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 Federal Deposit Insurance Corporation (“FDIC”) assisted transactions that are covered by loss share agreements. Customer overdrafts reclassified as loans totaled

$1.60

million as of

March 31, 2019,

and

$1.79

million as of

December 31, 2018.

Deferred loan fees, net of loan costs, totaled

$4.23

million as of

March 31, 2019,

and

$4.60

million as of

December 31, 2018.

For information about off-balance sheet financing, see Note

14,

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

The following table presents loans, net of unearned income, with the non-covered portfolio by loan class, as of the dates indicated:

	March 31, 2019					December 31, 2018
(Amounts in thousands)	Amount		Percent			Amount		Percent
Non-covered loans held for investment
Commercial loans
Construction, development, and other land	$	63,975		3.68	%	$	63,508		3.58	%
Commercial and industrial		94,039		5.41	%		104,863		5.91	%
Multi-family residential		102,071		5.87	%		107,012		6.03	%
Single family non-owner occupied		140,037		8.06	%		140,097		7.89	%
Non-farm, non-residential		602,207		34.67	%		613,877		34.58	%
Agricultural		8,975		0.52	%		8,545		0.48	%
Farmland		18,569		1.07	%		18,905		1.07	%
Total commercial loans		1,029,873		59.28	%		1,056,807		59.54	%
Consumer real estate loans
Home equity lines		90,000		5.18	%		93,466		5.27	%
Single family owner occupied		502,059		28.89	%		510,963		28.79	%
Owner occupied construction		13,867		0.80	%		18,171		1.02	%
Total consumer real estate loans		605,926		34.87	%		622,600		35.08	%
Consumer and other loans
Consumer loans		79,185		4.56	%		71,552		4.03	%
Other		4,921		0.28	%		5,310		0.30	%
Total consumer and other loans		84,106		4.84	%		76,862		4.33	%
Total non-covered loans		1,719,905		98.99	%		1,756,269		98.94	%
Total covered loans		17,475		1.01	%		18,815		1.06	%
Total loans held for investment, net of unearned income	$	1,737,380		100.00	%	$	1,775,084		100.00	%

The following table presents the covered loan portfolio, by loan class, as of the dates indicated:

	March 31, 2019		December 31, 2018
(Amounts in thousands)
Covered loans
Commercial loans
Construction, development, and other land	$	33	$	35
Single family non-owner occupied		231		238
Non-farm, non-residential		6		6
Total commercial loans		270		279
Consumer real estate loans
Home equity lines		14,076		15,284
Single family owner occupied		3,129		3,252
Total consumer real estate loans		17,205		18,536
Total covered loans	$	17,475	$	18,815

The Company identifies certain purchased loans as impaired when fair values are established at acquisition and groups those purchased credit impaired (“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:

	March 31, 2019				December 31, 2018
(Amounts in thousands)	Recorded Investment		Unpaid Principal Balance		Recorded Investment		Unpaid Principal Balance
PCI Loans, by acquisition
Peoples	$	5,348	$	7,116	$	5,330	$	7,272
Waccamaw		5,266		18,436		5,805		19,602
Other acquired		853		879		868		894
Total PCI Loans	$	11,467	$	26,431	$	12,003	$	27,768

The following table presents the changes in the accretable yield on PCI loans, by acquisition, during the periods indicated:

	Peoples			Waccamaw			Total
(Amounts in thousands)
Balance January 1, 2018	$	3,388		$	19,465		$	22,853
Accretion		(364	)		(1,845	)		(2,209	)
Reclassifications (to) from nonaccretable difference (1)		(29	)		601			572
Other changes, net		132			(261	)		(129	)
Balance March 31, 2018	$	3,127		$	17,960		$	21,087

Balance January 1, 2019	$	2,590		$	14,639		$	17,229
Accretion		(259	)		(752	)		(1,011	)
Reclassifications from nonaccretable difference (1)		7			653			660
Other changes, net		58			250			308
Balance March 31, 2019	$	2,396		$	14,790		$	17,186

(

) Represents changes attributable to expected loss assumptions