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

$1.81

million as of

September 30, 2019,

and

$1.79

million as of

December 31, 2018.

Deferred loan fees, net of loan costs, totaled

$4.41

million as of

September 30, 2019,

and

$4.60

million as of

December 31, 2018.

For information about off-balance sheet financing, see Note

15,

“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:

	September 30, 2019					December 31, 2018
(Amounts in thousands)	Amount		Percent			Amount		Percent
Non-covered loans held for investment
Commercial loans
Construction, development, and other land	$	61,350		3.62	%	$	63,508		3.58	%
Commercial and industrial		93,627		5.53	%		104,863		5.91	%
Multi-family residential		96,274		5.68	%		107,012		6.03	%
Single family non-owner occupied		135,298		7.99	%		140,097		7.89	%
Non-farm, non-residential		584,897		34.52	%		613,877		34.58	%
Agricultural		9,429		0.56	%		8,545		0.48	%
Farmland		16,728		0.99	%		18,905		1.07	%
Total commercial loans		997,603		58.89	%		1,056,807		59.54	%
Consumer real estate loans
Home equity lines		86,349		5.10	%		93,466		5.27	%
Single family owner occupied		484,567		28.60	%		510,963		28.78	%
Owner occupied construction		14,872		0.87	%		18,171		1.02	%
Total consumer real estate loans		585,788		34.57	%		622,600		35.07	%
Consumer and other loans
Consumer loans		92,027		5.43	%		71,552		4.03	%
Other		4,540		0.27	%		5,310		0.30	%
Total consumer and other loans		96,567		5.70	%		76,862		4.33	%
Total non-covered loans		1,679,958		99.16	%		1,756,269		98.94	%
Total covered loans		14,158		0.84	%		18,815		1.06	%
Total loans held for investment, net of unearned income	$	1,694,116		100.00	%	$	1,775,084		100.00	%

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

	September 30, 2019		December 31, 2018
(Amounts in thousands)
Covered loans
Commercial loans
Construction, development, and other land	$	30	$	35
Single family non-owner occupied		216		238
Non-farm, non-residential		4		6
Total commercial loans		250		279
Consumer real estate loans
Home equity lines		11,031		15,284
Single family owner occupied		2,877		3,252
Total consumer real estate loans		13,908		18,536
Total covered loans	$	14,158	$	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:

	September 30, 2019				December 31, 2018
(Amounts in thousands)	Recorded Investment		Unpaid Principal Balance		Recorded Investment		Unpaid Principal Balance
PCI Loans, by acquisition
Peoples	$	5,219	$	6,680	$	5,330	$	7,272
Waccamaw		3,469		11,498		5,805		19,602
Other acquired		364		390		868		894
Total PCI Loans	$	9,052	$	18,568	$	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		(986	)		(4,157	)		(5,143	)
Reclassifications (to) from nonaccretable difference (1)		(5	)		1,416			1,411
Other changes, net		354			(302	)		52
Balance September 30, 2018	$	2,751		$	16,422		$	19,173

Balance January 1, 2019	$	2,590		$	14,639		$	17,229
Accretion		(734	)		(2,761	)		(3,495	)
Reclassifications from nonaccretable difference (1)		14			1,200			1,214
Other changes, net		167			141			308
Balance September 30, 2019	$	2,037		$	13,219		$	15,256

(

) Represents changes attributable to expected loss assumptions