Note 3. Loans

Loan Portfolio

The Company’s loan portfolio is grouped into three segments (commercial loans, consumer real estate loans, and consumer and other loans) and each segment is divided further into various classes. Loans, net of unearned income, consisted of the following at March 31, 2013, and December 31, 2012:


	March 31, 2013					December 31, 2012
(Amounts in thousands)	Amount		Percent			Amount		Percent

Covered loans	$	195,060		11.55	%	$	207,106		12.01	%
Non-covered loans
Commercial loans
Construction, development, and other land		55,220		3.27	%		57,434		3.33	%
Commercial and industrial		91,666		5.43	%		88,738		5.15	%
Multi-family residential		63,929		3.78	%		65,694		3.81	%
Single family non-owner occupied		136,334		8.07	%		135,912		7.88	%
Non-farm, non-residential		440,226		26.06	%		448,810		26.02	%
Agricultural		2,117		0.12	%		1,709		0.10	%
Farmland		33,930		2.01	%		34,570		2.00	%

Total commercial loans		823,422		48.74	%		832,867		48.29	%
Consumer real estate loans
Home equity lines		108,385		6.42	%		111,081		6.44	%
Single family owner occupied		470,437		27.85	%		473,547		27.46	%
Owner occupied construction		19,760		1.17	%		16,223		0.94	%

Total consumer real estate loans		598,582		35.44	%		600,851		34.84	%
Consumer and other loans
Consumer loans		68,625		4.06	%		78,163		4.53	%
Other		3,603		0.21	%		5,666		0.33	%

Total consumer and other loans		72,228		4.27	%		83,829		4.86	%

Total non-covered loans		1,494,232		88.45	%		1,517,547		87.99	%

Total loans held for investment, net of unearned income	$	1,689,292		100.00	%	$	1,724,653		100.00	%


Loans held for sale	$	2,794				$	6,672

Covered loans held for investment consisted of the following at March 31, 2013, and December 31, 2012:


(Amounts in thousands)	March 31, 2013		December 31, 2012
Covered loans
Commercial loans
Construction, development, and other land	$	24,495	$	26,595
Commercial and industrial		5,205		6,948
Multi-family residential		2,549		2,611
Single family non-owner occupied		10,672		11,428
Non-farm, non-residential		42,857		48,565
Agricultural		128		144
Farmland		1,222		1,091

Total commercial loans		87,128		97,382
Consumer real estate loans
Home equity lines		80,463		81,445
Single family owner occupied		23,042		22,961
Owner occupied construction		1,628		1,644

Total consumer real estate loans		105,133		106,050
Consumer and other loans
Consumer loans		2,799		3,674

Total covered loans	$	195,060	$	207,106

See Note 12, “Litigation, Commitments and Contingencies,” for information concerning the Company’s off-balance sheet credit risk related to lending activities.

Acquired Impaired Loans

When the fair values of acquired loans are established, certain loans are identified as impaired. The Company has estimated the cash flows to be collected on the acquired impaired loans and discounted those cash flows at a market rate of interest. The outstanding principal balance of acquired impaired loans was $168.87 million at March 31, 2013, $198.34 million at December 31, 2012, and $6.28 million at March 31, 2012. The following tables present the carrying balance of acquired impaired loans during the periods indicated:


	Three Months Ended March 31, 2013
	Peoples		Waccamaw		Other		Total
(Amounts in thousands)
Balance, January 1	$	26,907	$	110,115	$	2,340	$	139,362
Balance, March 31		21,715		96,537		2,364		120,616

	Three Months Ended March 31, 2012
	Peoples		Waccamaw		Other		Total
(Amounts in thousands)
Balance, January 1	$	—	$	—	$	2,886	$	2,886
Balance, March 31		—		—		2,388		2,388

The following tables present changes in the accretable yield on acquired impaired loans during the periods indicated:


	Three Months Ended March 31, 2013
	Peoples			Waccamaw			Other			Total
(Amounts in thousands)
Balance, January 1, 2013	$	2,342		$	21,886		$	15		$	24,243
Additions		7			66			—			73
Accretion		(376	)		(1,385	)		(51	)		(1,812	)
Transfers to accretable difference (exit events), net		2,302			(12,482	)		46			(10,134	)
Disposals		(537	)		(585	)		—			(1,122	)

Balance, March 31, 2013	$	3,738		$	7,500		$	10		$	11,248


	Three Months Ended March 31, 2012
	Peoples			Waccamaw			Other			Total
(Amounts in thousands)
Balance, January 1, 2012	$	—		$	—		$	919		$	919
Additions		—			—			—			—
Accretion		—			—			(934	)		(934	)
Transfers to accretable difference, net		—			—			46			46
Disposals		—			—			—			—

Balance, March 31, 2012	$	—		$	—		$	31		$	31