Note

Loans

The Company groups loans held for investment into

three

segments (commercial loans, consumer real estate loans, and consumer and other loans) with each segment divided into various classes. Covered loans are those loans acquired in FDIC assisted transactions that are covered by loss share agreements.

Customer overdrafts reclassified as loans totaled

$1.71

million as of

December 31, 2017,

and

$1.41

million as of

December 31, 2016.

Deferred loan fees totaled

$4.44

million in

2017,

$3.90

million in

2016,

and

$3.78

million in

2015.

For information about off-balance sheet financing, see Note

20,

“Litigation, Commitments, and Contingencies,” to the Consolidated Financial Statements of this report.

The following table presents loans, net of unearned income with non-covered

loans and by loan class, as of the dates indicated:

	December 31,
	2017					2016
(Amounts in thousands)	Amount		Percent			Amount		Percent
Non-covered loans held for investment
Commercial loans
Construction, development, and other land	$	60,017		3.30	%	$	56,948		3.07	%
Commercial and industrial		92,188		5.07	%		92,204		4.98	%
Multi-family residential		125,202		6.89	%		134,228		7.24	%
Single family non-owner occupied		141,670		7.80	%		142,965		7.72	%
Non-farm, non-residential		616,633		33.93	%		598,674		32.31	%
Agricultural		7,035		0.39	%		6,003		0.32	%
Farmland		25,649		1.41	%		31,729		1.71	%
Total commercial loans		1,068,394		58.79	%		1,062,751		57.35	%
Consumer real estate loans
Home equity lines		103,205		5.68	%		106,361		5.74	%
Single family owner occupied		502,686		27.66	%		500,891		27.03	%
Owner occupied construction		39,178		2.16	%		44,535		2.41	%
Total consumer real estate loans		645,069		35.50	%		651,787		35.18	%
Consumer and other loans
Consumer loans		70,772		3.89	%		77,445		4.18	%
Other		5,001		0.28	%		3,971		0.21	%
Total consumer and other loans		75,773		4.17	%		81,416		4.39	%
Total non-covered loans		1,789,236		98.46	%		1,795,954		96.92	%
Total covered loans		27,948		1.54	%		56,994		3.08	%
Total loans held for investment, net of unearned income	$	1,817,184		100.00	%	$	1,852,948		100.00	%

The following table presents the covered loan portfolio, by

loan class, as of the dates indicated. The commercial loss share agreement expired on

June 30, 2017.

	December 31,
(Amounts in thousands)	2017		2016
Covered loans
Commercial loans
Construction, development, and other land	$	39	$	4,570
Commercial and industrial		-		895
Multi-family residential		-		8
Single family non-owner occupied		284		962
Non-farm, non-residential		9		7,512
Agricultural		-		25
Farmland		-		397
Total commercial loans		332		14,369
Consumer real estate loans
Home equity lines		23,720		35,817
Single family owner occupied		3,896		6,729
Total consumer real estate loans		27,616		42,546
Consumer and other loans
Consumer loans		-		79
Total covered loans	$	27,948	$	56,994

The Company identifies certain purchased loans as impaired when fair values are established at acquisition and

groups those PCI loans into loan pools with 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

recorded investment and contractual unpaid principal balance of PCI loans, by acquisition, as of the dates indicated:

	December 31,
	2017				2016
(Amounts in thousands)	Recorded Investment		Unpaid Principal Balance		Recorded Investment		Unpaid Principal Balance
PCI Loans, by acquisition
Peoples	$	5,278	$	8,111	$	5,576	$	9,397
Waccamaw		12,176		31,335		21,758		45,030
Other acquired		986		1,012		1,095		1,121
Total PCI Loans	$	18,440	$	40,458	$	28,429	$	55,548

The following table present

s the changes in the accretable yield on PCI loans, by acquisition, during the periods indicated:

	Peoples			Waccamaw			Total
(Amounts in thousands)
Balance January 1, 2015	$	4,745		$	19,048		$	23,793
Additions		-			2			2
Accretion		(2,712	)		(6,459	)		(9,171	)
Reclassifications from nonaccretable difference (1)		1,283			6,564			7,847
Other changes, net		273			6,954			7,227
Balance December 31, 2015	$	3,589		$	26,109		$	29,698

Balance January 1, 2016	$	3,589		$	26,109		$	29,698
Accretion		(1,237	)		(5,380	)		(6,617	)
Reclassifications from nonaccretable difference (1)		287			1,620			1,907
Other changes, net		1,753			(515	)		1,238
Balance December 31, 2016	$	4,392		$	21,834		$	26,226

Balance January 1, 2017	$	4,392		$	21,834		$	26,226
Accretion		(1,379	)		(5,664	)		(7,043	)
Reclassifications from nonaccretable difference (1)		825			3,378			4,203
Other changes, net		(450	)		(83	)		(533	)
Balance December 31, 2017	$	3,388		$	19,465		$	22,853

(

)

Respresents changes attributable to expected loss assumptions