Note 4.

Loans

The Company’s loans held for investment are grouped into three segments (commercial loans, consumer real estate loans, and consumer and other loans) with each segment divided into various classes. Covered loans are defined as loans acquired in Federal Deposit Insurance Corporation (“FDIC”) assisted transactions that are covered by loss share agreements. The following table presents loans, net of unearned income and disaggregated by class, as of the periods indicated:


	March 31, 2016					December 31, 2015
(Amounts in thousands)	Amount		Percent			Amount		Percent
Non-covered loans held for investment
Commercial loans
Construction, development, and other land	$	52,529		2.98	%	$	48,896		2.86	%
Commercial and industrial		92,397		5.24	%		88,903		5.21	%
Multi-family residential		111,388		6.32	%		95,026		5.57	%
Single family non-owner occupied		151,595		8.60	%		149,351		8.75	%
Non-farm, non-residential		521,471		29.59	%		485,460		28.45	%
Agricultural		3,650		0.21	%		2,911		0.17	%
Farmland		27,013		1.53	%		27,540		1.61	%

Total commercial loans		960,043		54.47	%		898,087		52.62	%
Consumer real estate loans
Home equity lines		106,444		6.04	%		107,367		6.29	%
Single family owner occupied		497,530		28.23	%		495,209		29.02	%
Owner occupied construction		40,892		2.32	%		43,505		2.55	%

Total consumer real estate loans		644,866		36.59	%		646,081		37.86	%
Consumer and other loans
Consumer loans		73,531		4.17	%		72,000		4.22	%
Other		7,451		0.43	%		7,338		0.43	%

Total consumer and other loans		80,982		4.60	%		79,338		4.65	%

Total non-covered loans		1,685,891		95.66	%		1,623,506		95.13	%
Total covered loans		76,538		4.34	%		83,035		4.87	%

Total loans held for investment, net of unearned income	$	1,762,429		100.00	%	$	1,706,541		100.00	%

Customer overdrafts reclassified as loans totaled $1.29 million as of March 31, 2016, and $1.24 million as of December 31, 2015. Deferred loan fees totaled $3.94 million as of March 31, 2016, and $3.78 million as of December 31, 2015. For information concerning off-balance sheet financing, see Note 14, “Litigation, Commitments and Contingencies,” to the Condensed Consolidated Financial Statements of this report.

The following table presents the components of the Company’s covered loan portfolio, disaggregated by class, as of the dates indicated:


	March 31, 2016		December 31, 2015
(Amounts in thousands)
Commercial loans
Construction, development, and other land	$	6,129	$	6,303
Commercial and industrial		1,020		1,170
Multi-family residential		100		640
Single family non-owner occupied		2,258		2,674
Non-farm, non-residential		12,439		14,065
Agricultural		34		34
Farmland		632		643

Total commercial loans		22,612		25,529
Consumer real estate loans
Home equity lines		45,745		48,565
Single family owner occupied		7,837		8,595
Owner occupied construction		262		262

Total consumer real estate loans		53,844		57,422
Consumer and other loans
Consumer loans		82		84

Total covered loans	$	76,538	$	83,035

Certain purchased loans are identified as impaired when fair values are established at acquisition. These purchased credit impaired (“PCI”) loans are aggregated into loan pools that have common risk characteristics. The Company estimates cash flows to be collected on PCI loans and discounts those cash flows at a market rate of interest. The following table presents the carrying and contractual unpaid principal balance of PCI loans, by acquisition, as of the dates indicated:


	March 31, 2016				December 31, 2015
	Carrying Balance		Unpaid Principal Balance		Carrying Balance		Unpaid Principal Balance
(Amounts in thousands)
Peoples Bank of Virginia	$	6,872	$	11,108	$	6,681	$	11,249
Waccamaw Bank		32,745		58,544		34,707		63,151
Other acquired		1,227		1,270		1,254		1,297

Total PCI Loans	$	40,844	$	70,922	$	42,642	$	75,697

The following tables present the activity in the accretable yield related to PCI loans, by acquisition, in the periods indicated:


	Three Months Ended March 31, 2016
	Peoples			Waccamaw			Other		Total
(Amounts in thousands)
Beginning balance	$	3,589		$	26,109		$	—	$	29,698
Accretion		(459	)		(1,484	)		—		(1,943	)
Reclassifications from nonaccretable difference		(221	)		(272	)		—		(493	)
Removals, extensions, and other events, net		1,724			598			—		2,322

Ending balance	$	4,633		$	24,951		$	—	$	29,584


	Three Months Ended March 31, 2015
	Peoples			Waccamaw			Other		Total
(Amounts in thousands)
Beginning balance	$	4,745		$	19,048		$	—	$	23,793
Additions		—			2			—		2
Accretion		(630	)		(1,602	)		—		(2,232	)
Reclassifications from nonaccretable difference		1,106			2,445			—		3,551
Removals, extensions, and other events, net		(735	)		(439	)		—		(1,174	)

Ending balance	$	4,486		$	19,454		$	—	$	23,940