LOANS

3 Months Ended

Mar. 31, 2020

Receivables [Abstract]

LOANS

NOTE 4 – LOANS

The Bank engages in a full complement of lending activities, including real estate-related loans, agriculture-related loans, commercial and financial loans and consumer installment loans within select markets in Georgia, Alabama, Florida and South Carolina. The Bank purchased residential mortgage loan pools during 2015 and 2016 collateralized by properties located outside our Southeast markets, specifically in California, Washington and Illinois. During the third quarter of 2016, the Bank began purchasing from unrelated third parties consumer installment home improvement loans made to borrowers throughout the United States. The Bank also offers certain SBA and commercial insurance premium finance loans nationally.

The Bank concentrates the majority of its lending activities in real estate loans. While risk of loss in the Company’s portfolio is primarily tied to the credit quality of the various borrowers, risk of loss may increase due to factors beyond the Company’s control, such as local, regional and/or national economic downturns. General conditions in the real estate market may also impact the relative risk in the real estate portfolio. A substantial portion of the Bank’s loans are secured by real estate in the Bank’s primary market area. Accordingly, the ultimate collectability of a substantial portion of the Bank’s loan portfolio is susceptible to changes in real estate conditions in the Bank’s primary market area.

Loans are stated at amortized cost. Balances within the major loans receivable categories are presented in the following table:

(dollars in thousands)	March 31, 2020		December 31, 2019
Commercial, financial and agricultural	$	827,392	$	802,171
Consumer installment	520,592		498,577
Indirect automobile	937,736		1,061,824
Mortgage warehouse	547,328		526,369
Municipal	749,633		564,304
Premium finance	661,845		654,669
Real estate – construction and development	1,628,367		1,549,062
Real estate – commercial and farmland	4,516,451		4,353,039
Real estate – residential	2,704,762		2,808,461
	$	13,094,106	$	12,818,476

The following is a summary of changes in the accretable discounts of purchased loans during the three months ended March 31, 2019:

(dollars in thousands)	March 31, 2019
Balance, January 1	$	40,496
Additions due to acquisitions	—
Accretion	(2,980)
Accretable discounts removed due to charge-offs	—
Transfers between non-accretable and accretable discounts, net	(1,869)
Ending balance	$	35,647

Nonaccrual and Past-Due Loans

A loan is placed on nonaccrual status when, in management’s judgment, the collection of the interest income appears doubtful. Interest receivable that has been accrued and is subsequently determined to have doubtful collectability is charged against interest income. Interest on loans that are classified as nonaccrual is subsequently applied to principal until the loans are returned to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are

brought current and future payments are reasonably assured. Past-due loans are loans whose principal or interest is past due 30 days or more. In some cases, where borrowers are experiencing financial difficulties, loans may be restructured to provide terms significantly different from the original contractual terms.

The following table presents an analysis of loans accounted for on a nonaccrual basis:

(dollars in thousands)	March 31, 2020		December 31, 2019
Commercial, financial and agricultural	$	10,457	$	9,236
Consumer installment	897		831
Indirect automobile	1,732		1,746
Premium finance	579		600
Real estate – construction and development	2,437		1,988
Real estate – commercial and farmland	26,575		23,797
Real estate – residential	35,189		36,926
	$	77,866	$	75,124

There was no interest income recognized on nonaccrual loans during the three months ended March 31, 2020.

The following table presents an analysis of nonaccrual loans with no related allowance for credit losses:

(dollars in thousands)	March 31, 2020
Real estate – commercial and farmland	$	610
Real estate – residential	2,772
	$	3,382

The following table presents an analysis of past-due loans as of March 31, 2020 and December 31, 2019:

(dollars in thousands)	Loans 30-59 Days Past Due		Loans 60-89 Days Past Due		Loans 90 or More Days Past Due		Total Loans Past Due		Current Loans		Total Loans		Loans 90 Days or More Past Due and Still Accruing
March 31, 2020
Commercial, financial and agricultural	$	5,511	$	1,510	$	6,211	$	13,232	$	814,160	$	827,392	$	—
Consumer installment	3,784		1,432		1,416		6,632		513,960		520,592		856
Indirect automobile	4,698		712		1,462		6,872		930,864		937,736		10
Mortgage warehouse	—		—		—		—		547,328		547,328		—
Municipal	—		—		—		—		749,633		749,633		—
Premium finance	9,066		2,031		11,665		22,762		639,083		661,845		11,086
Real estate – construction and development	9,363		655		2,390		12,408		1,615,959		1,628,367		—
Real estate – commercial and farmland	19,944		2,500		18,699		41,143		4,475,308		4,516,451		—
Real estate – residential	34,179		9,939		30,691		74,809		2,629,953		2,704,762		22
Total	$	86,545	$	18,779	$	72,534	$	177,858	$	12,916,248	$	13,094,106	$	11,974
December 31, 2019
Commercial, financial and agricultural	$	3,609	$	2,251	$	6,484	$	12,344	$	789,827	$	802,171	$	—
Consumer installment	3,488		1,336		1,452		6,276		492,301		498,577		922
Indirect automobile	5,978		1,067		1,522		8,567		1,053,257		1,061,824		21
Mortgage warehouse	—		—		—		—		526,369		526,369		—
Municipal	—		—		—		—		564,304		564,304		—
Premium finance	13,801		8,022		5,411		27,234		627,435		654,669		4,811
Real estate – construction and development	7,785		1,224		1,583		10,592		1,538,470		1,549,062		—
Real estate – commercial and farmland	7,404		3,405		15,598		26,407		4,326,632		4,353,039		—
Real estate – residential	46,226		15,277		31,083		92,586		2,715,875		2,808,461		—
Total	$	88,291	$	32,582	$	63,133	$	184,006	$	12,634,470	$	12,818,476	$	5,754

Collateral-Dependent Loans

Collateral-dependent loans are loans where repayment is expected to be provided solely by the underlying collateral and there are no other available and reliable sources of repayment. These loans are written down to the lower of cost or collateral value less estimated selling costs. As of March 31, 2020, there were $70.0 million of collateral-dependent loans which are primarily secured by real estate, equipment and receivables.

Impaired Loans

Prior to the adoption of ASU 2016-13, loans were considered impaired when, based on current information and events, it was probable the Company would be unable to collect all amounts due in accordance with the original contractual terms of the loan agreements. Impaired loans include loans on nonaccrual status and accruing troubled debt restructurings. When determining if the Company would be unable to collect all principal and interest payments due in accordance with the contractual terms of the loan agreement, the Company considered the borrower’s capacity to pay, which included such factors as the borrower’s current financial statements, an analysis of global cash flow sufficient to pay all debt obligations and an evaluation of secondary sources of repayment, such as guarantor support and collateral value. The Company individually assessed for impairment all nonaccrual loans greater than $100,000 and all troubled debt restructurings greater than $100,000 (including all troubled debt restructurings, whether or not currently classified as such). The tables below include all loans deemed impaired, whether or not individually assessed for impairment. If a loan was deemed impaired, a specific valuation allowance was allocated, if necessary, so that the loan was reported net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment was expected solely from the collateral. Interest payments on impaired loans were typically applied to principal unless collectability of the principal amount was reasonably assured, in which case interest was recognized on a cash basis.

The following is a summary of information pertaining to impaired loans: 

	As of and for the Period Ended
(dollars in thousands)	December 31, 2019		March 31, 2019
Nonaccrual loans	$	75,124	$	41,879
Troubled debt restructurings not included above	29,609		30,906
Total impaired loans	$	104,733	$	72,785
Quarter-to-date interest income recognized on impaired loans	$	1,201	$	854
Quarter-to-date foregone interest income on impaired loans	$	1,044	$	729

The following table presents an analysis of information pertaining to impaired loans as of December 31, 2019 and March 31, 2019:

(dollars in thousands)	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Three Month Average Recorded Investment
December 31, 2019
Commercial, financial and agricultural	$	18,438	$	1,911	$	7,840	$	9,751	$	1,542	$	9,073
Consumer installment	2,179		839		—		839		—		420
Indirect automobile	1,845		1,746		—		1,746		—		1,481
Premium finance	757		—		757		757		156		758
Real estate – construction and development	4,893		1,319		1,605		2,924		204		5,277
Real estate – commercial and farmland	42,515		12,147		18,381		30,528		953		30,749
Real estate – residential	62,675		13,413		44,775		58,188		3,592		70,723
Total	$	133,302	$	31,375	$	73,358	$	104,733	$	6,447	$	118,481

(dollars in thousands)	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related  Allowance		Three  Month Average Recorded Investment
March 31, 2019
Commercial, financial and agricultural	$	12,886	$	3,666	$	1,687	$	5,353	$	180	$	4,126
Consumer installment	1,133		1,031		—		1,030		—		1,031
Real estate – construction and development	15,022		1,226		7,103		8,329		706		8,250
Real estate – commercial and farmland	20,514		2,209		15,406		17,615		1,248		18,414
Real estate – residential	42,918		15,715		24,742		40,458		1,341		39,634
Total	$	92,473	$	23,847	$	48,938	$	72,785	$	3,475	$	71,455

Credit Quality Indicators

The Company uses a nine category risk grading system to assign a risk grade to each loan in the portfolio. The following is a description of the general characteristics of the grades:

Grade 1 – Prime Credit – This grade represents loans to the Company’s most creditworthy borrowers or loans that are secured by cash or cash equivalents.

Grade 2 – Strong Credit – This grade includes loans that exhibit one or more characteristics better than that of a Good Credit. Generally, the debt service coverage and borrower’s liquidity is materially better than required by the Company’s loan policy.

Grade 3 – Good Credit – This grade is assigned to loans to borrowers who exhibit satisfactory credit histories, contain acceptable loan structures and demonstrate ability to repay.

Grade 4 – Satisfactory Credit – This grade includes loans which exhibit all the characteristics of a Good Credit, but warrant more than normal level of banker supervision due to (i) circumstances which elevate the risks of performance (such as start-up operations, untested management, heavy leverage and interim losses); (ii) adverse, extraordinary events that have affected, or could affect, the borrower’s cash flow, financial condition, ability to continue operating profitability or refinancing (such as death of principal, fire and divorce); (iii) loans that require more than the normal servicing requirements (such as any type of construction financing, acquisition and development loans, accounts receivable or inventory loans and floor plan loans); (iv) existing technical exceptions which raise some doubts about the Bank’s perfection in its collateral position or the continued financial capacity of the borrower; or (v) improvements in formerly criticized borrowers, which may warrant banker supervision.

Grade 5 – Fair Credit – This grade is assigned to loans that are currently performing and supported by adequate financial information that reflects repayment capacity but exhibits a loan-to-value ratio greater than 110%, based on a documented collateral valuation. Certain loans approved for modification in response to the COVID-19 pandemic were assigned risk grade 5 out of an abundance of caution.

Grade 6 – Other Assets Especially Mentioned – This grade includes loans that exhibit potential weaknesses that deserve management’s close attention. If left uncorrected, these weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date.

Grade 7 – Substandard – This grade represents loans which are inadequately protected by the current credit worthiness and paying capacity of the borrower or of the collateral pledged, if any. These assets exhibit a well-defined weakness or are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. These weaknesses may be characterized by past due performance, operating losses or questionable collateral values.

Grade 8 – Doubtful – This grade includes loans which exhibit all of the characteristics of a substandard loan with the added provision that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable or improbable.

Grade 9 – Loss – This grade is assigned to loans which are considered uncollectible and of such little value that their continuance as active assets of the Bank is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing it off.

The following table presents the loan portfolio's amortized cost by class of financing receivable, risk grade and year of origination (in thousands). Generally, current period renewals of credit are underwritten again at the point of renewal and considered current period originations for purposes of the table below. There were no loans risk graded 9 at March 31, 2020.

	Term Loans
As of March 31, 2020	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis		Total
Commercial, Financial and Agricultural
Risk Grade:
1	$	1,492	$	4,751	$	2,019	$	771	$	696	$	5,647	$	8,098	$	—	$	23,474
2	38		1,413		957		6,503		117		2,409		6,413		—		17,850
3	29,139		66,134		22,793		18,347		10,487		6,613		78,883		—		232,396
4	17,656		99,490		104,684		60,227		25,697		30,166		112,462		—		450,382
5	7,082		14,084		12,095		11,354		3,017		11,995		16,199		—		75,826
6	—		390		1,530		649		270		1,269		1,845		—		5,953
7	—		333		1,158		2,599		711		3,738		12,733		—		21,272
8	—		239		—		—		—		—		—		—		239
Total commercial, financial and agricultural loans	$	55,407	$	186,834	$	145,236	$	100,450	$	40,995	$	61,837	$	236,633	$	—	$	827,392
Consumer Installment
Risk Grade:
1	$	1,973	$	6,918	$	2,697	$	1,065	$	200	$	112	$	624	$	—	$	13,589
2	—		5		86		3		—		96		43		—		233
3	5,623		12,432		5,632		2,162		2,016		954		3,735		—		32,554
4	68,942		139,741		145,674		81,547		21,034		11,078		4,104		—		472,120
5	10		58		20		69		91		385		9		—		642
6	—		15		14		5		51		81		—		—		166
7	—		193		143		175		213		452		112		—		1,288
Total consumer installment	$	76,548	$	159,362	$	154,266	$	85,026	$	23,605	$	13,158	$	8,627	$	—	$	520,592
Indirect Automobile
Risk Grade:
2	$	—	$	—	$	141	$	40	$	9,226	$	6,177	$	—	$	—	$	15,584
3	—		50,064		269,735		291,917		175,293		129,460		—		—		916,469
4	—		996		—		—		—		—		—		—		996
7	—		35		473		711		1,594		1,874		—		—		4,687
Total indirect automobile	$	—	$	51,095	$	270,349	$	292,668	$	186,113	$	137,511	$	—	$	—	$	937,736
Mortgage Warehouse
Risk Grade:
3	$	—	$	—	$	—	$	—	$	—	$	—	$	547,328	$	—	$	547,328
Total mortgage warehouse	$	—	$	—	$	—	$	—	$	—	$	—	$	547,328	$	—	$	547,328

	Term Loans
As of March 31, 2020	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis		Total
Municipal
Risk Grade:
1	$	199,851	$	12,806	$	36,333	$	178,779	$	176,282	$	133,614	$	—	$	—	$	737,665
2	—		—		—		—		—		2,639		—		—		2,639
3	—		806		—		6,300		—		1,627		—		—		8,733
4	—		—		—		—		—		596		—		—		596
Total municipal	$	199,851	$	13,612	$	36,333	$	185,079	$	176,282	$	138,476	$	—	$	—	$	749,633
Premium Finance
Risk Grade:
2	$	324,711	$	320,085	$	2,751	$	1,352	$	321	$	960	$	—	$	—	$	650,180
7	—		7,990		113		—		3,466		96		—		—		11,665
Total premium finance	$	324,711	$	328,075	$	2,864	$	1,352	$	3,787	$	1,056	$	—	$	—	$	661,845
Real Estate – Construction and Development
Risk Grade:
2	$	—	$	—	$	—	$	—	$	—	$	22	$	—	$	—	$	22
3	29,824		83,506		24,815		7,930		4,192		10,450		1,487		—		162,204
4	94,621		638,391		302,673		102,194		13,439		38,513		88,208		—		1,278,039
5	17		36,633		45,990		16,283		22,066		17,361		24,323		—		162,673
6	—		3,889		7,595		2,805		761		4,719		115		—		19,884
7	—		607		354		642		103		3,715		124		—		5,545
Total real estate – construction and development	$	124,462	$	763,026	$	381,427	$	129,854	$	40,561	$	74,780	$	114,257	$	—	$	1,628,367
Real Estate – Commercial and Farmland
Risk Grade:
1	$	—	$	—	$	204	$	—	$	—	$	—	$	—	$	—	$	204
2	842		574		579		2,248		5,310		17,267		1,998		—		28,818
3	120,521		397,469		173,358		232,985		218,717		341,457		64,639		—		1,549,146
4	66,287		421,177		370,277		280,928		231,586		538,615		31,941		—		1,940,811
5	46,316		125,732		103,005		177,642		152,518		246,543		3,410		—		855,166
6	—		7,793		8,615		8,363		13,160		33,336		355		—		71,622
7	1,117		1,242		3,073		5,507		11,038		48,232		475		—		70,684
Total real estate – commercial and farmland	$	235,083	$	953,987	$	659,111	$	707,673	$	632,329	$	1,225,450	$	102,818	$	—	$	4,516,451

	Term Loans
As of March 31, 2020	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis		Total
Real Estate - Residential
Risk Grade:
1	$	—	$	—	$	—	$	—	$	—	$	25	$	—	$	—	$	25
2	—		428		32		130		1,686		66,302		1,869		—		70,447
3	130,436		560,981		355,435		267,876		215,327		551,033		240,959		1,956		2,324,003
4	8,257		22,733		26,359		14,195		14,311		71,260		53,612		61		210,788
5	101		3,671		2,340		4,482		5,142		15,730		5,354		—		36,820
6	—		1,295		894		200		335		5,438		1,097		—		9,259
7	323		8,321		7,001		8,083		3,475		19,624		6,593		—		53,420
Total real estate - residential	$	139,117	$	597,429	$	392,061	$	294,966	$	240,276	$	729,412	$	309,484	$	2,017	$	2,704,762

The following table presents the loan portfolio by risk grade as of December 31, 2019 (in thousands): 

Risk Grade	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance		Real Estate - Construction and Development		Real Estate - Commercial and Farmland		Real Estate - Residential		Total
1	$	22,396	$	13,184	$	—	$	—	$	552,062	$	—	$	—	$	208	$	27	$	587,877
2	18,937		1,233		18,354		—		2,690		654,069		17,535		35,299		92,255		840,372
3	215,180		33,314		1,033,861		526,369		8,925		—		90,124		1,720,039		2,406,587		6,034,399
4	482,146		449,224		4,009		—		627		—		1,377,674		2,348,083		222,779		4,884,542
5	33,317		208		—		—		—		—		41,759		133,119		24,618		233,021
6	4,901		213		—		—		—		—		17,223		53,941		10,132		86,410
7	25,294		1,191		5,600		—		—		600		4,747		62,350		52,063		151,845
8	—		8		—		—		—		—		—		—		—		8
9	—		2		—		—		—		—		—		—		—		2
Total	$	802,171	$	498,577	$	1,061,824	$	526,369	$	564,304	$	654,669	$	1,549,062	$	4,353,039	$	2,808,461	$	12,818,476

Troubled Debt Restructurings

The restructuring of a loan is considered a “troubled debt restructuring” if both (i) the borrower is experiencing financial difficulties and (ii) the Company has granted a concession. Concessions may include interest rate reductions to below market interest rates, principal forgiveness, restructuring amortization schedules and other actions intended to minimize potential losses. The Company has exhibited the greatest success for rehabilitation of the loan by a reduction in the rate alone (maintaining the amortization of the debt) or a combination of a rate reduction and the forbearance of previously past due interest or principal. This has most typically been evidenced in certain commercial real estate loans whereby a disruption in the borrower’s cash flow resulted in an extended past due status, of which the borrower was unable to catch up completely as the cash flow of the property ultimately stabilized at a level lower than its original level. A reduction in rate, coupled with a forbearance of unpaid principal and/or interest, allowed the net cash flows to service the debt under the modified terms.

The Company’s policy requires a restructure request to be supported by a current, well-documented credit evaluation of the borrower’s financial condition and a collateral evaluation that is no older than six months from the date of the restructure. Key factors of that evaluation include the documentation of current, recurring cash flows, support provided by the guarantor(s) and the current valuation of the collateral. If the appraisal in the file is older than six months, an evaluation must be made as to the continued reasonableness of the valuation. For certain income-producing properties, current rent rolls and/or other income information can be utilized to support the appraisal valuation, when coupled with documented cap rates within our markets and a physical inspection of the collateral to validate the current condition.

The Company’s policy states that in the event a loan has been identified as a troubled debt restructuring, it should be assigned a grade of substandard and placed on nonaccrual status until such time the borrower has demonstrated the ability to service the loan payments based on the restructured terms – generally defined as six months of satisfactory payment history. Missed payments under the original loan terms are not considered under the new structure; however, subsequent missed payments are considered non-performance and are not considered toward the six month required term of satisfactory payment history. The Company’s loan policy states that a nonaccrual loan may be returned to accrual status when (i) none of its principal and interest is due and unpaid, and the Company expects repayment of the remaining contractual principal and interest or (ii) it otherwise becomes well secured and in the process of collection. Restoration to accrual status on any given loan must be supported by a well-documented credit evaluation of the borrower’s financial condition and the prospects for full repayment and approved by the Company’s Chief Credit Officer.

In the normal course of business, the Company renews loans with a modification of the interest rate or terms that are not deemed as troubled debt restructurings because the borrower is not experiencing financial difficulty. The Company modified loans in the first three months of 2020 and 2019 totaling $71.3 million and $26.9 million, respectively, under such parameters. During the three months ended March 31, 2020, the Company additionally modified $147.8 million in loans for borrowers impacted by the COVID-19 pandemic. These modifications primarily consisted of short-term payment deferrals or interest-only periods to assist customers. Modifications related to the COVID-19 pandemic and qualifying under the provisions of Section 4013 of the CARES Act are not deemed as troubled debt restructurings.

As of March 31, 2020 and December 31, 2019, the Company had a balance of $36.2 million and $35.2 million, respectively, in troubled debt restructurings. The Company has recorded $2.0 million and $1.9 million in previous charge-offs on such loans at March 31, 2020 and December 31, 2019, respectively. The Company’s balance in the allowance for loan losses allocated to such troubled debt restructurings was $2.7 million and $3.7 million at March 31, 2020 and December 31, 2019, respectively. At March 31, 2020, the Company did not have any commitments to lend additional funds to debtors whose terms have been modified in troubled restructurings.

During the three months ended March 31, 2020 and 2019, the Company modified loans as troubled debt restructurings with principal balances of $1.0 million and $2.9 million, respectively, and these modifications did not have a material impact on the Company’s allowance for loan loss. The following table presents the loans by class modified as troubled debt restructurings which occurred during the three months ended March 31, 2020 and 2019: 

	March 31, 2020			March 31, 2019
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	—	$	—	1	$	7
Consumer installment	1	9		6	45
Real estate – construction and development	—	—		—	—
Real estate – commercial and farmland	1	64		1	33
Real estate – residential	8	903		17	2,849
Total	10	$	976	25	$	2,934

Troubled debt restructurings with an outstanding balance of $3.0 million and $1.7 million defaulted during the three months ended March 31, 2020 and 2019, respectively, and these defaults did not have a material impact on the Company’s allowance for loan loss. The following table presents for loans the troubled debt restructurings by class that defaulted (defined as 30 days past due) during the three months ended March 31, 2020 and 2019: 

	March 31, 2020			March 31, 2019
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	1	$	200	1	$	3
Consumer installment	—	—		2	28
Real estate – construction and development	2	287		—	—
Real estate – commercial and farmland	2	681		1	163
Real estate – residential	19	1,800		15	1,474
Total	24	$	2,968	19	$	1,668

The following table presents the amount of troubled debt restructurings by loan class classified separately as accrual and nonaccrual at March 31, 2020 and December 31, 2019: 

March 31, 2020	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	5	$	575	15	$	334
Consumer installment	4	4		27	105
Premium finance	1	159		—	—
Real estate – construction and development	5	925		4	289
Real estate – commercial and farmland	19	5,587		9	2,415
Real estate – residential	212	22,775		39	3,078
Total	246	$	30,025	94	$	6,221

December 31, 2019	Accruing Loans			Non-Accruing Loans
Loan Class	#	Balance (in thousands)		#	Balance (in thousands)
Commercial, financial and agricultural	5	$	516	17	$	335
Consumer installment	4	8		27	107
Premium finance	1	156		—	—
Real estate – construction and development	6	936		3	253
Real estate – commercial and farmland	21	6,732		8	2,071
Real estate – residential	197	21,261		40	2,857
Total	234	$	29,609	95	$	5,623

 Allowance for Credit Losses

The allowance for credit losses represents an allowance for expected losses over the remaining contractual life of the assets. The contractual term does not consider extensions, renewals or modifications unless the Company reasonably expects to execute a troubled debt restructuring with a borrower. The Company segregates the loan portfolio by type of loan and utilizes this segregation in evaluating exposure to risks within the portfolio.

Loan losses are charged against the allowance when management believes the collection of a loan’s principal is unlikely. Subsequent recoveries are credited to the allowance. Consumer loans are charged off in accordance with the Federal Financial Institutions Examination Council’s (“FFIEC”) Uniform Retail Credit Classification and Account Management Policy. Commercial loans are charged off when they are deemed uncollectible, which usually involves a triggering event within the collection effort. If the loan is collateral dependent, the loss is more easily identified and is charged off when it is identified, usually based upon receipt of an appraisal. However, when a loan has guarantor support, the Company may carry the estimated loss as a reserve against the loan while collection efforts with the guarantor are pursued. If, after collection efforts with the guarantor are complete, the deficiency is still considered uncollectible, the loss is charged off and any further collections are treated as recoveries. In all situations, when a loan is downgraded to an Asset Quality Rating of 9 (Loss per the regulatory guidance), the uncollectible portion is charged off.

During the three months ended, March 31, 2020, the allowance for credit losses increases primarily due to deterioration in forecasted macroeconomic factors resulting from the COVID-19 pandemic. The current forecast reflects, among other things, a decline in GDP and elevated unemployment levels through the forecast period compared to the forecast at the time of adoption of ASC 326 on January 1, 2020. In addition, a specific qualitative factor was incorporated to reflect elevated collection risk in our premium finance loan segment resulting from governmental requirements to defer insurance premium loan payments for 60 days to borrowers experiencing financial difficulty in New York and New Jersey and allow deferred payments to be paid equally over twelve months.

The following tables detail activity in the allowance for credit losses by portfolio segment for the three-month periods ended March 31, 2020 and March 31, 2019 and end of period balances by portfolio segment as of March 31, 2020, December 31, 2019 and March 31, 2019. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

Three Months Ended March 31, 2020
(dollars in thousands)	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, December 31, 2019	$	4,567	$	3,784	$	—	$	640	$	484	$	2,550
Adjustment to allowance for adoption of ASU 2016-13	2,587		8,012		4,109		463		(92)		4,471
Provision for loan losses	3,080		4,149		564		(1)		130		4,634
Loans charged off	(2,486)		(1,142)		(1,231)		—		—		(831)
Recoveries of loans previously charged off	362		643		22		—		—		684
Balance, March 31, 2020	$	8,110	$	15,446	$	3,464	$	1,102	$	522	$	11,508
	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, December 31, 2019	$	5,995	$	9,666	$	10,503	$	38,189
Adjustment to allowance for adoption of ASU 2016-13	12,248		27,073		19,790		78,661
Provision for loan losses	6,734		15,858		1,899		37,047
Loans charged off	—		(928)		(100)		(6,718)
Recoveries of loans previously charged off	342		85		207		2,345
Balance, March 31, 2020	$	25,319	$	51,754	$	32,299	$	149,524

Prior to the adoption of ASC 326 on January 1, 2020, the Company calculated the allowance for loan losses under the incurred loss methodology. The following tables are disclosures related to the allowance for loan losses in prior periods.

(dollars in thousands)	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
December 31, 2019
Period-end allocation:
Loans individually evaluated for impairment (1)	$	1,543	$	—	$	—	$	—	$	—	$	758
Loans collectively evaluated for impairment	3,024		3,784		—		640		484		1,792
Ending balance	$	4,567	$	3,784	$	—	$	640	$	484	$	2,550
Loans:
Individually evaluated for impairment (1)	$	8,032	$	—	$	—	$	—	$	—	$	6,768
Collectively evaluated for impairment	789,252		498,363		1,056,811		526,369		564,304		647,901
Acquired with deteriorated credit quality	4,887		214		5,013		—		—		—
Ending balance	$	802,171	$	498,577	$	1,061,824	$	526,369	$	564,304	$	654,669
	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
December 31, 2019
Period-end allocation:
Loans individually evaluated for impairment (1)	$	204	$	953	$	3,704	$	7,162
Loans collectively evaluated for impairment	5,791		8,713		6,799		31,027
Ending balance	$	5,995	$	9,666	$	10,503	$	38,189
Loans:
Individually evaluated for impairment (1)	$	1,605	$	19,759	$	46,311	$	82,475
Collectively evaluated for impairment	1,532,786		4,256,397		2,737,095		12,609,278
Acquired with deteriorated credit quality	14,671		76,883		25,055		126,723
Ending balance	$	1,549,062	$	4,353,039	$	2,808,461	$	12,818,476

(1) At December 31, 2019, loans individually evaluated for impairment includes all nonaccrual loans greater than $100,000 and all troubled debt restructurings greater than $100,000, including all troubled debt restructurings and not only those currently classified as troubled debt restructurings.

(dollars in thousands)	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Three Months Ended March 31, 2019
Balance, December 31, 2018	$	2,352	$	3,795	$	—	$	640	$	509	$	1,426
Provision for loan losses	300		1,823		—		—		(1)		714
Loans charged off	(684)		(1,897)		—		—		—		(1,320)
Recoveries of loans previously charged off	222		215		—		—		—		1,010
Balance, March 31, 2019	$	2,190	$	3,936	$	—	$	640	$	508	$	1,830
Period-end allocation:
Loans individually evaluated for impairment (1)	$	180	$	—	$	—	$	—	$	—	$	500
Loans collectively evaluated for impairment	2,010		3,936		—		640		508		1,330
Ending balance	$	2,190	$	3,936	$	—	$	640	$	508	$	1,830
Loans:
Individually evaluated for impairment (1)	$	1,687	$	—	$	—	$	—	$	—	$	2,106
Collectively evaluated for impairment	627,690		462,976		—		296,372		591,302		485,874
Acquired with deteriorated credit quality	2,220		129		—		—		—		—
Ending balance	$	631,597	$	463,105	$	—	$	296,372	$	591,302	$	487,980
	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Three Months Ended March 31, 2019
Balance, December 31, 2018	$	4,210	$	9,659	$	6,228	$	28,819
Provision for loan losses	122		792		(342)		3,408
Loans charged off	(25)		(1,254)		(199)		(5,379)
Recoveries of loans previously charged off	117		40		207		1,811
Balance, March 31, 2019	$	4,424	$	9,237	$	5,894	$	28,659
Period-end allocation:
Loans individually evaluated for impairment (1)	$	706	$	1,248	$	1,342	$	3,976
Loans collectively evaluated for impairment	3,718		7,989		4,552		24,683
Ending balance	$	4,424	$	9,237	$	5,894	$	28,659
Loans:
Individually evaluated for impairment (1)	$	7,103	$	15,406	$	24,912	$	51,214
Collectively evaluated for impairment	901,586		3,106,929		1,876,367		8,349,096
Acquired with deteriorated credit quality	7,287		53,117		19,276		82,029
Ending balance	$	915,976	$	3,175,452	$	1,920,555	$	8,482,339

(1) At March 31, 2019, loans individually evaluated for impairment includes all nonaccrual loans greater than $100,000 and all troubled debt restructurings greater than $100,000, including all troubled debt restructurings and not only those currently classified as troubled debt restructurings.