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

$1.69

million as of

March 31, 2020,

and

$2.20

million as of

December 31, 2019.

Deferred loan fees, net of loan costs, totaled

$4.86

million as of

March 31, 2020,

and

$4.60

million as of

December 31, 2019.

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:

	March 31, 2020					December 31, 2019
(Amounts in thousands)	Amount		Percent			Amount		Percent
Non-covered loans held for investment
Commercial loans
Construction, development, and other land	$	53,321		2.54	%	$	48,659		2.30	%
Commercial and industrial		129,728		6.19	%		142,962		6.76	%
Multi-family residential		110,202		5.26	%		121,840		5.76	%
Single family non-owner occupied		187,771		8.96	%		163,181		7.72	%
Non-farm, non-residential		726,664		34.65	%		727,261		34.39	%
Agricultural		11,303		0.54	%		11,756		0.56	%
Farmland		26,045		1.24	%		23,155		1.10	%
Total commercial loans		1,245,034		59.38	%		1,238,814		58.59	%
Consumer real estate loans
Home equity lines		105,384		5.03	%		110,078		5.21	%
Single family owner occupied		603,546		28.79	%		620,697		29.35	%
Owner occupied construction		13,946		0.66	%		17,241		0.82	%
Total consumer real estate loans		722,876		34.48	%		748,016		35.38	%
Consumer and other loans
Consumer loans		112,127		5.35	%		110,027		5.20	%
Other		4,573		0.22	%		4,742		0.22	%
Total consumer and other loans		116,700		5.57	%		114,769		5.42	%
Total non-covered loans		2,084,610		99.43	%		2,101,599		99.39	%
Total covered loans		12,115		0.57	%		12,861		0.61	%
Total loans held for investment, net of unearned income	$	2,096,725		100.00	%	$	2,114,460		100.00	%

Loans held for sale	$	-				$	263

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

	March 31, 2020		December 31, 2019
(Amounts in thousands)
Covered loans
Commercial loans
Construction, development, and other land	$	27	$	28
Single family non-owner occupied		194		199
Non-farm, non-residential		2		3
Total commercial loans		223		230
Consumer real estate loans
Home equity lines		9,306		9,853
Single family owner occupied		2,586		2,778
Total consumer real estate loans		11,892		12,631
Total covered loans	$	12,115	$	12,861

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. Effective

January 1, 2020,

the Company collapsed the insignificant PCI loans and discounts for Peoples, Waccamaw, and other acquired loans into the core loan portfolio. The only remaining PCI pools are those loans acquired in the Highlands acquisition on

December 31, 2019.

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

	March 31, 2020				December 31, 2019
(Amounts in thousands)	Recorded Investment		Unpaid Principal Balance		Recorded Investment		Unpaid Principal Balance
PCI Loans, by acquisition
Peoples	$	-	$	-	$	5,071	$	6,431
Waccamaw		-		-		2,708		14,277
Highlands		49,920		60,434		53,116		64,096
Other acquired		-		-		352		378
Total PCI Loans	$	49,920	$	60,434	$	61,247	$	85,182

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

	Peoples			Waccamaw			Highlands			Total
(Amounts in thousands)
Balance January 1, 2019	$	2,590		$	14,639		$	-		$	17,229
Accretion		(986	)		(4,157	)		-			(5,143	)
Reclassifications (to) from nonaccretable difference (1)		(5	)		1,416			-			1,411
Other changes, net		354			(302	)		-			52
Balance March 31, 2019	$	1,953		$	11,596		$	-		$	13,549

Balance January 1, 2020	$	1,890		$	12,574		$	8,152		$	22,616
Accretion		-			-			(686	)		(686	)
Reclassifications from nonaccretable difference (1)		-			-			-			-
Other changes, net		(1,890	)		(12,574	)		-			(14,464	)
Balance March 31, 2020	$	-		$	-		$	7,466		$	7,466

(

) Represents changes attributable to expected loss assumptions