The following table summarizes the composition of our loan portfolio as of March 30, 2020 and December 31, 2019 (in thousands):

(1)	Included $13.5 million of loans as of December 31, 2019, acquired in the Greater Atlantic Bank (“GAB”) transaction covered under an FDIC loss-share agreement. The agreement covering single family loans expired on December 31, 2019.

Accounting policy related to the allowance for loan losses is considered a critical policy given the level of estimation, judgment, and uncertainty in the levels of the allowance required to account for the inherent probable losses in the loan portfolio and the material effect such estimation, judgment, and uncertainty can have on the Company’s consolidated financial results.

Accretable discount on the acquired loans totaled $10.6 million and $11.2 million at March 31, 2020 and December 31, 2019, respectively. Accretion associated with the acquired loans held for investment of $597 thousand and $816 thousand was recognized during the three months ended March 31, 2020 and 2019, respectively.

Impaired loans for the portfolio were as follows (in thousands):


	Total Loans
			Unpaid
	Recorded		Principal		Related
March 31, 2020	Investment (1)		Balance		Allowance
With no related allowance recorded
Commercial real estate - owner occupied	$	5,986	$	6,956	$	—
Commercial real estate - non-owner occupied (2)		3,231		3,327		—
Construction and land development		357		802		—
Commercial loans		5,276		6,513		—
Residential 1-4 family (3)		5,103		6,222		—
Other consumer loans		20		20		—
Total	$	19,973	$	23,840	$	—

With an allowance recorded
Commercial real estate - owner occupied	$	—	$	—	$	—
Commercial real estate - non-owner occupied (2)		—		—		—
Construction and land development		—		—		—
Commercial loans		2,415		2,480		1,309
Residential 1-4 family (3)		—		—		—
Other consumer loans		—		—		—
Total	$	2,415	$	2,480	$	1,309
Grand total	$	22,388	$	26,320	$	1,309


	Total Loans
			Unpaid
	Recorded		Principal		Related
December 31, 2019	Investment (1)		Balance		Allowance
With no related allowance recorded
Commercial real estate - owner occupied	$	6,890	$	8,530	$	—
Commercial real estate - non-owner occupied (2)		3,120		3,363		—
Construction and land development		345		747		—
Commercial loans		5,049		8,490		—
Residential 1-4 family (3)		1,021		2,719		—
Other consumer loans		—		—		—
Total	$	16,425	$	23,849	$	—

With an allowance recorded
Commercial real estate - owner occupied	$	—	$	—	$	—
Commercial real estate - non-owner occupied (2)		176		281		1
Construction and land development		—		—		—
Commercial loans		2,498		2,533		957
Residential 1-4 family (3)		2,841		3,243		92
Other consumer loans		39		39		1
Total	$	5,554	$	6,096	$	1,051
Grand total	$	21,979	$	29,945	$	1,051

(1)	Recorded investment is after cumulative prior charge offs of $1.5 million as of March 31, 2020 and December 31, 2019. These loans also have aggregate SBA guarantees of $4.4 million and $3.1 million as of March 31, 2020 and December 31, 2019, respectively.

(2)	Includes loans secured by farmland and multi-family residential loans.

(3)	Includes home equity lines of credit.

The following tables present the average recorded investment and interest income recognized for impaired loans recognized by class of loans for the three months ended March 31, 2020 and 2019 (in thousands):


	Total Loans
	Average		Interest
	Recorded		Income
Three Months Ended March 31, 2020	Investment		Recognized
With no related allowance recorded
Commercial real estate - owner occupied	$	6,987	$	91
Commercial real estate - non-owner occupied (1)		3,341		46
Construction and land development		815		14
Commercial loans		3,646		46
Residential 1-4 family (2)		6,229		37
Other consumer loans		20		—
Total	$	21,038	$	234

With an allowance recorded
Commercial real estate - owner occupied	$	—	$	—
Commercial real estate - non-owner occupied (1)		—		—
Construction and land development		—		—
Commercial loans		3,581		49
Residential 1-4 family (2)		—		—
Other consumer loans		—		—
Total	$	3,581	$	49
Grand total	$	24,619	$	283


	Total Loans
	Average		Interest
	Recorded		Income
Three Months Ended March 31, 2019	Investment		Recognized
With no related allowance recorded
Commercial real estate - owner occupied	$	6,034	$	66
Commercial real estate - non-owner occupied (1)		4,435		37
Construction and land development		370		14
Commercial loans		5,011		11
Residential 1-4 family (2)		5,305		59
Other consumer loans		40		—
Total	$	21,195	$	187

With an allowance recorded
Commercial real estate - owner occupied	$	—	$	—
Commercial real estate - non-owner occupied (1)		—		—
Construction and land development		—		—
Commercial loans		4,712		50
Residential 1-4 family (2)		984		18
Other consumer loans		—		—
Total	$	5,696	$	68
Grand total	$	26,891	$	255

________________________________________

(1)	Includes loans secured by farmland and multi-family residential loans.

(2)	Includes home equity lines of credit.

The following tables present the aging of the recorded investment in past due loans by class of loans as of March 31, 2020 and December 31, 2019 (in thousands):


	30 - 59		60 - 89		90
	Days		Days		Days		Total		Nonaccrual		Loans Not		Total
March 31, 2020	Past Due		Past Due		or More		Past Due		Loans (3)		Past Due		Loans (4)
Total loans:
Commercial real estate - owner occupied	$	8,716	$	942	$	—	$	9,658	$	—	$	400,081	$	409,739
Commercial real estate - non-owner occupied (1)		10,837		867		—		11,704		—		695,543		707,247
Construction and land development		1,087		—		—		1,087		—		114,057		115,144
Commercial loans		571		109		—		680		5,358		217,395		223,433
Residential 1-4 family (2)		14,531		394		—		14,925		3,563		712,451		730,939
Other consumer loans		211		6		—		217		20		25,471		25,708
Total	$	35,953	$	2,318	$	—	$	38,271	$	8,941	$	2,164,998	$	2,212,210


	30 - 59		60 - 89		90
	Days		Days		Days		Total		Nonaccrual		Loans Not		Total
December 31, 2019	Past Due		Past Due		or More		Past Due		Loans (3)		Past Due		Loans
Total loans:
Commercial real estate - owner occupied	$	813	$	—	$	—	$	813	$	—	$	413,666	$	414,479
Commercial real estate - non-owner occupied (1)		936		—		—		936		—		657,936		658,872
Construction and land development		746		275		—		1,021		—		149,729		150,750
Commercial loans		234		62		—		296		6,337		214,814		221,447
Residential 1-4 family (2)		4,060		—		—		4,060		2,524		707,199		713,783
Other consumer loans		107		—		—		107		39		26,158		26,304
Total	$	6,896	$	337	$	—	$	7,233	$	8,900	$	2,169,502	$	2,185,635

(1)	Includes loans secured by farmland and multi-family residential loans.

(2)	Includes home equity lines of credit.

(3)	Nonaccrual loans include SBA guaranteed amounts totaling $2.9 million and $4.1 million at March 31, 2020 and December 31, 2019, respectively.

(4)	Includes $547.1 million of loans that were subject to deferrals at April 30, 2020.

Activity in the allowance for loan and lease losses by class of loan for the three months ended March 31, 2020 and 2019 is summarized below (in thousands):


	Commercial		Commercial
	Real Estate		Real Estate		Construction						Other
	Owner		Non-owner		and Land		Commercial		1-4 Family		Consumer
Three Months Ended March 31, 2020	Occupied		Occupied (1)		Development		Loans		Residential (2)		Loans		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	810	$	1,720	$	683	$	5,418	$	1,266	$	190	$	174	$	10,261
Provision (recovery) for non-purchased loans		253		971		(307)		822		1,387		74		(100)		3,100
Provision for purchase credit impaired loans		—		—		—		350		—		—		—		350
Total provision (recovery)		253		971		(307)		1,172		1,387		74		(100)		3,450
Charge offs		—		—		—		(822)		(245)		(32)		—		(1,099)
Recoveries		5		2		—		65		31		7		—		110
Ending balance	$	1,068	$	2,693	$	376	$	5,833	$	2,439	$	239	$	74	$	12,722

Three Months Ended March 31, 2019
Allowance for loan losses:
Beginning balance	$	802	$	1,669	$	821	$	7,097	$	1,106	$	224	$	564	$	12,283
Provision (recovery)		11		624		99		(887)		56		83		214		200
Charge offs		—		(462)		—		(167)		—		(60)		—		(689)
Recoveries		3		—		—		63		8		6		—		80
Ending balance	$	816	$	1,831	$	920	$	6,106	$	1,170	$	253	$	778	$	11,874

(1)	Includes loans secured by farmland and multi-family residential loans.

(2)	Includes home equity lines of credit.

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of March 31, 2020 and the balance in the allowance for loan losses and the recorded investment in non-covered loans by portfolio segment and based on impairment method as of December 31, 2019 (in thousands):


	Commercial		Commercial
	Real Estate		Real Estate		Construction						Other
	Owner		Non-owner		and Land		Commercial		1-4 Family		Consumer
March 31, 2020	Occupied		Occupied (1)		Development		Loans		Residential (2)		Loans		Unallocated		Total
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	—	$	—	$	—	$	1,309	$	—	$	—	$	—	$	1,309
Collectively evaluated for impairment		1,068		2,693		376		4,524		2,439		239		74		11,413
Total ending allowance	$	1,068	$	2,693	$	376	$	5,833	$	2,439	$	239	$	74	$	12,722

Loans:
Individually evaluated for impairment	$	5,986	$	3,231	$	357	$	5,276	$	5,103	$	20	$	—	$	19,973
Collectively evaluated for impairment		403,753		704,016		114,787		218,157		725,836		25,688		—		2,192,237
Total ending loan balances	$	409,739	$	707,247	$	115,144	$	223,433	$	730,939	$	25,708	$	—	$	2,212,210

December 31, 2019
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	—	$	—	$	—	$	957	$	85	$	—	$	—	$	1,042
Collectively evaluated for impairment		810		1,720		683		4,461		1,181		190		174		9,219
Total ending allowance	$	810	$	1,720	$	683	$	5,418	$	1,266	$	190	$	174	$	10,261

Loans:
Individually evaluated for impairment	$	6,890	$	3,120	$	345	$	7,544	$	1,443	$	—	$	—	$	19,342
Collectively evaluated for impairment		407,589		655,752		150,405		213,903		712,340		26,304		—		2,166,293
Total ending loan balances	$	414,479	$	658,872	$	150,750	$	221,447	$	713,783	$	26,304	$	—	$	2,185,635

(1)	Includes loans secured by farmland and multi-family residential loans.

(2)	Includes home equity lines of credit.

Troubled Debt Restructurings

A modification is classified as a TDR if both of the following exist: (1) the borrower is experiencing financial difficulty and (2) the Bank has granted a concession to the borrower. The Bank determines that a borrower may be experiencing financial difficulty if the borrower is currently delinquent on any of its debt, or if the Bank is concerned that the borrower may not be able to perform in accordance with the current terms of the loan agreement in the foreseeable future. Many aspects of the borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty, particularly as it relates to commercial borrowers due to the complex nature of the loan structure, business/industry risk and borrower/guarantor structures. Concessions may include the reduction of an interest rate at a rate lower than current market rates for a new loan with similar risk, extension of the maturity date, reduction of accrued interest, or principal forgiveness. When evaluating whether a concession has been granted, the Bank also considers whether the borrower has provided additional collateral or guarantors and whether such additions adequately compensate the Bank for the restructured terms, or if the revised terms are consistent with those currently being offered to new loan customers. The assessments of whether a borrower is experiencing (or is likely to experience) financial difficulty and whether a concession has been granted is subjective in nature and management’s judgment is required when determining whether a modification is a TDR.

Although each occurrence is unique to the borrower and is evaluated separately, for all portfolio segments, TDRs are typically modified through reduction in interest rates, reductions in payments, changing the payment terms from principal and interest to interest only, and/or extensions in term maturity.

There were no TDRs during the three months ended March 31, 2020 and there have been no defaults of TDRs modified during the past twelve months.

Credit Quality Indicators

Through its system of internal controls, Southern National evaluates and segments loan portfolio credit quality on a quarterly basis using regulatory definitions for Special Mention, Substandard and Doubtful. Special Mention loans are considered to be criticized. Substandard and Doubtful loans are considered to be classified.

Special Mention loans are loans that have a potential weakness that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position.

Substandard loans may be inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful loans have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Southern National had no loans classified Doubtful at March 31, 2020 or December 31, 2019.

As of March 31, 2020 and December 31, 2019, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows (in thousands):


	Total Loans
	Special
March 31, 2020	Mention		Substandard (3)		Pass		Total
Commercial real estate - owner occupied	$	3,795	$	4,192	$	401,752	$	409,739
Commercial real estate - non-owner occupied (1)		3,563		173		703,511		707,247
Construction and land development		—		667		114,477		115,144
Commercial loans		3,487		4,212		215,734		223,433
Residential 1-4 family (2)		661		1,308		728,970		730,939
Other consumer loans		116		—		25,592		25,708
Total	$	11,622	$	10,552	$	2,190,036	$	2,212,210


	Total Loans
	Special
December 31, 2019	Mention		Substandard (3)		Pass		Total
Commercial real estate - owner occupied	$	3,821	$	3,975	$	406,683	$	414,479
Commercial real estate - non-owner occupied (1)		4,193		176		654,503		658,872
Construction and land development		—		690		150,060		150,750
Commercial loans		3,432		4,462		213,553		221,447
Residential 1-4 family (2)		666		1,194		711,923		713,783
Other consumer loans		122		—		26,182		26,304
Total	$	12,234	$	10,497	$	2,162,904	$	2,185,635

(1)	Includes loans secured by farmland and multi-family residential loans.

(2)	Includes home equity lines of credit.

(3)	Includes SBA guarantees of $2.9 million and $4.1 million as of March 31, 2020 and December 31, 2019, respectively.

The amount of foreclosed residential real estate property held at March 31, 2020 and December 31, 2019 was $1.2 million and $1.4 million, respectively. The recorded investment in consumer mortgage loans collateralized by residential

real estate property that are in the process of foreclosure was $2.0 million and $1.9 million at March 31, 2020 and December 31, 2019, respectively.