LOANS AND ALLOWANCE FOR CREDIT LOSSES

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

LOANS AND ALLOWANCE FOR CREDIT LOSSES

NOTE 3 – LOANS AND ALLOWANCE FOR CREDIT LOSSES

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

(dollars in thousands)	June 30, 2023		December 31, 2022
Commercial, financial and agricultural	$	2,718,831	$	2,679,403
Consumer	307,486		384,037
Indirect automobile	63,231		108,648
Mortgage warehouse	1,147,413		1,038,924
Municipal	510,410		509,151
Premium finance	988,731		1,023,479
Real estate – construction and development	2,217,744		2,086,438
Real estate – commercial and farmland	7,815,779		7,604,867
Real estate – residential	4,702,134		4,420,306
	$	20,471,759	$	19,855,253

Accrued interest receivable on loans is reported in other assets on the consolidated balance sheets totaling $69.8 million and $69.3 million at June 30, 2023 and December 31, 2022, respectively. The Company had no recorded allowance for credit related to accrued interest on loans at both June 30, 2023 and December 31, 2022.

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 to interest income. Interest on loans that are classified as nonaccrual is subsequently applied to principal until the loans are returned to accrual status. 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, approved by the Company’s Chief Credit Officer. 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)	June 30, 2023		December 31, 2022
Commercial, financial and agricultural	$	8,774	$	11,094
Consumer	235		420
Indirect automobile	318		346
Real estate – construction and development	447		523
Real estate – commercial and farmland	10,657		13,203
Real estate – residential(1)	106,249		109,222
	$	126,680	$	134,808

(1) Included in real estate - residential were $69.7 million and $69.6 million of serviced GNMA-guaranteed nonaccrual loans at June 30, 2023 and December 31, 2022, respectively.

There was no interest income recognized on nonaccrual loans during the six months ended June 30, 2023 and 2022.

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

(dollars in thousands)	June 30, 2023		December 31, 2022
Commercial, financial and agricultural	$	1,344	$	33
Real estate – commercial and farmland	7,997		1,464
Real estate – residential	61,573		58,734
	$	70,914	$	60,231

The following table presents an analysis of past-due loans as of June 30, 2023 and December 31, 2022:

(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
June 30, 2023
Commercial, financial and agricultural	$	12,380	$	5,976	$	10,370	$	28,726	$	2,690,105	$	2,718,831	$	4,385
Consumer	5,111		815		435		6,361		301,125		307,486		331
Indirect automobile	138		49		136		323		62,908		63,231		—
Mortgage warehouse	—		—		—		—		1,147,413		1,147,413		—
Municipal	—		—		—		—		510,410		510,410		—
Premium finance	6,795		9,087		8,387		24,269		964,462		988,731		8,387
Real estate – construction and development	1,061		19		764		1,844		2,215,900		2,217,744		321
Real estate – commercial and farmland	2,782		2,883		7,755		13,420		7,802,359		7,815,779		—
Real estate – residential	31,604		12,691		102,664		146,959		4,555,175		4,702,134		—
Total	$	59,871	$	31,520	$	130,511	$	221,902	$	20,249,857	$	20,471,759	$	13,424
December 31, 2022
Commercial, financial and agricultural	$	16,219	$	5,451	$	11,632	$	33,302	$	2,646,101	$	2,679,403	$	3,267
Consumer	2,539		3,163		741		6,443		377,594		384,037		472
Indirect automobile	466		77		267		810		107,838		108,648		—
Mortgage warehouse	—		—		—		—		1,038,924		1,038,924		—
Municipal	—		—		—		—		509,151		509,151		—
Premium finance	13,859		10,620		13,626		38,105		985,374		1,023,479		13,626
Real estate – construction and development	25,367		3,829		966		30,162		2,056,276		2,086,438		500
Real estate – commercial and farmland	1,738		168		10,223		12,129		7,592,738		7,604,867		—
Real estate – residential	35,015		11,329		106,170		152,514		4,267,792		4,420,306		—
Total	$	95,203	$	34,637	$	143,625	$	273,465	$	19,581,788	$	19,855,253	$	17,865

Collateral-Dependent Loans

Collateral-dependent loans are loans where repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty. If the Company determines that foreclosure is probable, these loans are written down to the lower of cost or fair value of the collateral less estimated costs to sell. When repayment is expected to be from the operation of the collateral, the allowance for credit losses is calculated as the amount by which the amortized cost basis of the financial asset exceeds the present value of expected cash flows from the operation of the collateral. The Company may, in the alternative, measure the allowance for credit loss as the amount by which the amortized cost basis of the financial asset exceeds the estimated fair value of the collateral.

The following table presents an analysis of individually evaluated collateral-dependent financial assets and related allowance for credit losses:

	June 30, 2023				December 31, 2022
(dollars in thousands)	Balance		Allowance for Credit Losses		Balance		Allowance for Credit Losses
Commercial, financial and agricultural	$	3,941	$	670	$	7,128	$	6,294
Mortgage warehouse	—		—		—		—
Premium finance	736		—		3,233		—
Real estate – construction and development	601		94		780		13
Real estate – commercial and farmland	9,139		286		15,168		1,428
Real estate – residential	18,437		4,902		15,464		2,066
	$	32,854	$	5,952	$	41,773	$	9,801

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:

Pass (Grades 1 - 5) – These grades represent acceptable credit risk to the Company based on factors including creditworthiness of the borrower, current performance and nature of the collateral.

Other Assets Especially Mentioned (Grade 6) – 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.

Substandard (Grade 7) – 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.

Doubtful (Grade 8) – 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.

Loss (Grade 9) – 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 tables present the loan portfolio's amortized cost by class of financing receivable, risk grade and year of origination (in thousands) as of June 30, 2023 and December 31, 2022. Generally, current period renewals of credit are underwritten again at the point of renewal and considered current period originations for purposes of the tables below. The Company had an immaterial amount of revolving loans which converted to term loans and the amortized cost basis of those loans is included in the applicable origination year. There were no loans risk graded 8 or 9 at June 30, 2023 or December 31, 2022.

As of June 30, 2023	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2023		2022		2021		2020		2019		Prior				Total
Commercial, Financial and Agricultural
Risk Grade:
Pass	$	546,295	$	919,283	$	454,312	$	133,061	$	79,731	$	67,945	$	496,253	$	2,696,880
6	25		608		75		118		163		2,301		913		4,203
7	3,548		2,233		2,561		1,185		3,079		2,895		2,247		17,748
Total commercial, financial and agricultural	$	549,868	$	922,124	$	456,948	$	134,364	$	82,973	$	73,141	$	499,413	$	2,718,831
Current-period gross charge offs	978		12,715		7,700		961		610		2,560		25		25,549
Consumer
Risk Grade:
Pass	$	29,695	$	23,736	$	8,734	$	31,252	$	19,417	$	25,483	$	167,962	$	306,279
6	—		7		—		1		—		93		198		299
7	12		111		39		99		98		463		86		908
Total consumer	$	29,707	$	23,854	$	8,773	$	31,352	$	19,515	$	26,039	$	168,246	$	307,486
Current-period gross charge offs	2		222		50		1,076		671		968		203		3,192
Indirect Automobile
Risk Grade:
Pass	$	—	$	—	$	—	$	—	$	8,614	$	54,028	$	—	$	62,642
6	—		—		—		—		—		2		—		2
7	—		—		—		—		35		552		—		587
Total indirect automobile	$	—	$	—	$	—	$	—	$	8,649	$	54,582	$	—	$	63,231
Current-period gross charge offs	—		—		—		—		—		99		—		99
Mortgage Warehouse
Risk Grade:
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	1,064,769	$	1,064,769
6	—		—		—		—		—		—		82,644		82,644
7	—		—		—		—		—		—		—		—
Total mortgage warehouse	$	—	$	—	$	—	$	—	$	—	$	—	$	1,147,413	$	1,147,413
Current-period gross charge offs	—		—		—		—		—		—		—		—
Municipal
Risk Grade:
Pass	$	2,569	$	25,452	$	54,458	$	184,799	$	15,112	$	228,020	$	—	$	510,410
Total municipal	$	2,569	$	25,452	$	54,458	$	184,799	$	15,112	$	228,020	$	—	$	510,410
Current-period gross charge offs	—		—		—		—		—		—		—		—
Premium Finance
Risk Grade:
Pass	$	797,510	$	178,702	$	4,132	$	—	$	—	$	—	$	—	$	980,344
7	1,621		6,766		—		—		—		—		—		8,387
Total premium finance	$	799,131	$	185,468	$	4,132	$	—	$	—	$	—	$	—	$	988,731
Current-period gross charge offs	4		2,955		310		—		—		—		—		3,269

As of June 30, 2023	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2023		2022		2021		2020		2019		Prior				Total
Real Estate – Construction and Development
Risk Grade:
Pass	$	218,089	$	841,086	$	792,121	$	191,193	$	48,648	$	35,502	$	75,878	$	2,202,517
6	—		—		—		—		—		517		—		517
7	—		592		304		164		—		13,650		—		14,710
Total real estate – construction and development	$	218,089	$	841,678	$	792,425	$	191,357	$	48,648	$	49,669	$	75,878	$	2,217,744
Current-period gross charge offs	—		—		—		—		—		—		—		—
Real Estate – Commercial and Farmland
Risk Grade:
Pass	$	351,788	$	1,807,366	$	1,926,491	$	1,148,117	$	813,499	$	1,556,760	$	99,724	$	7,703,745
6	—		348		—		1,232		30,476		46,854		500		79,410
7	—		198		449		2,651		4,398		24,928		—		32,624
Total real estate – commercial and farmland	$	351,788	$	1,807,912	$	1,926,940	$	1,152,000	$	848,373	$	1,628,542	$	100,224	$	7,815,779
Current-period gross charge offs	—		—		—		—		3,151		169		—		3,320
Real Estate - Residential
Risk Grade:
Pass	$	451,392	$	1,462,604	$	1,181,824	$	525,870	$	253,419	$	466,163	$	245,958	$	4,587,230
6	—		233		142		266		676		2,406		237		3,960
7	809		14,196		21,021		25,900		20,687		26,533		1,798		110,944
Total real estate - residential	$	452,201	$	1,477,033	$	1,202,987	$	552,036	$	274,782	$	495,102	$	247,993	$	4,702,134
Current-period gross charge offs	24		—		9		—		—		105		59		197
Total Loans
Risk Grade:
Pass	$	2,397,338	$	5,258,229	$	4,422,072	$	2,214,292	$	1,238,440	$	2,433,901	$	2,150,544	$	20,114,816
6	25		1,196		217		1,617		31,315		52,173		84,492		171,035
7	5,990		24,096		24,374		29,999		28,297		69,021		4,131		185,908
Total loans	$	2,403,353	$	5,283,521	$	4,446,663	$	2,245,908	$	1,298,052	$	2,555,095	$	2,239,167	$	20,471,759
Total current-period gross charge offs	1,008		15,892		8,069		2,037		4,432		3,901		287		35,626

As of December 31, 2022	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2022		2021		2020		2019		2018		Prior				Total
Commercial, Financial and Agricultural
Risk Grade:
Pass	$	1,127,120	$	526,043	$	174,120	$	109,091	$	56,657	$	41,612	$	621,784	$	2,656,427
6	—		13		94		183		895		1,774		317		3,276
7	8,565		1,214		1,182		3,314		545		2,759		2,121		19,700
Total commercial, financial and agricultural	$	1,135,685	$	527,270	$	175,396	$	112,588	$	58,097	$	46,145	$	624,222	$	2,679,403
Consumer
Risk Grade:
Pass	$	41,487	$	12,692	$	37,906	$	23,454	$	17,144	$	13,825	$	236,113	$	382,621
6	38		—		—		—		—		98		196		332
7	68		62		216		106		118		431		83		1,084
Total consumer	$	41,593	$	12,754	$	38,122	$	23,560	$	17,262	$	14,354	$	236,392	$	384,037
Indirect Automobile
Risk Grade:
Pass	$	—	$	—	$	—	$	11,900	$	50,749	$	45,120	$	—	$	107,769
6	—		—		—		—		—		11		—		11
7	—		—		—		41		149		678		—		868
Total indirect automobile	$	—	$	—	$	—	$	11,941	$	50,898	$	45,809	$	—	$	108,648
Mortgage Warehouse
Risk Grade:
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	990,106	$	990,106
6	—		—		—		—		—		—		22,831		22,831
7	—		—		—		—		—		—		25,987		25,987
Total mortgage warehouse	$	—	$	—	$	—	$	—	$	—	$	—	$	1,038,924	$	1,038,924
Municipal
Risk Grade:
Pass	$	18,074	$	46,809	$	188,507	$	9,752	$	4,358	$	241,651	$	—	$	509,151
Total municipal	$	18,074	$	46,809	$	188,507	$	9,752	$	4,358	$	241,651	$	—	$	509,151
Premium Finance
Risk Grade:
Pass	$	1,000,214	$	9,667	$	12	$	—	$	—	$	—	$	—	$	1,009,893
7	13,051		535		—		—		—		—		—		13,586
Total premium finance	$	1,013,265	$	10,202	$	12	$	—	$	—	$	—	$	—	$	1,023,479
Real Estate – Construction and Development
Risk Grade:
Pass	$	834,831	$	793,723	$	306,084	$	69,596	$	7,934	$	31,490	$	27,474	$	2,071,132
6	277		—		—		—		173		165		—		615
7	—		783		164		5		13,159		580		—		14,691
Total real estate – construction and development	$	835,108	$	794,506	$	306,248	$	69,601	$	21,266	$	32,235	$	27,474	$	2,086,438

As of December 31, 2022	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2022		2021		2020		2019		2018		Prior				Total
Real Estate – Commercial and Farmland
Risk Grade:
Pass	$	1,739,021	$	1,975,003	$	1,085,086	$	869,116	$	447,311	$	1,259,763	$	110,848	$	7,486,148
6	607		17,974		—		30,841		4,801		18,289		—		72,512
7	387		2,810		3,078		12,007		6,527		21,398		—		46,207
Total real estate – commercial and farmland	$	1,740,015	$	1,995,787	$	1,088,164	$	911,964	$	458,639	$	1,299,450	$	110,848	$	7,604,867
Real Estate - Residential
Risk Grade:
Pass	$	1,524,021	$	1,214,724	$	548,968	$	268,821	$	115,693	$	393,570	$	234,684	$	4,300,481
6	236		145		94		688		364		2,910		600		5,037
7	6,735		21,283		25,860		27,173		14,396		17,665		1,676		114,788
Total real estate - residential	$	1,530,992	$	1,236,152	$	574,922	$	296,682	$	130,453	$	414,145	$	236,960	$	4,420,306
Total Loans
Risk Grade:
Pass	$	6,284,768	$	4,578,661	$	2,340,683	$	1,361,730	$	699,846	$	2,027,031	$	2,221,009	$	19,513,728
6	1,158		18,132		188		31,712		6,233		23,247		23,944		104,614
7	28,806		26,687		30,500		42,646		34,894		43,511		29,867		236,911
Total loans	$	6,314,732	$	4,623,480	$	2,371,371	$	1,436,088	$	740,973	$	2,093,789	$	2,274,820	$	19,855,253

Allowance for Credit Losses on Loans

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. 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 (the “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.

The Company’s methodologies for estimating the allowance for credit losses consider available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the financial assets that are reasonable and supportable, to the identified pools of loans with similar risk characteristics for which the historical loss experience was observed. The Company utilizes a one year reasonable and supportable forecast period. The Company’s methodologies revert back to historical loss information on a straight-line basis over four quarters after the reasonable and supportable forecast period.

During the six months ended June 30, 2023, the allowance for credit losses increased due to a decline in forecasted macroeconomic factors, particularly residential and commercial real estate price indices and organic loan growth during the period. The allowance for credit losses was determined at June 30, 2023 using a weighting of two economic forecasts from Moody's in order to align with management's best estimate over the reasonable and supportable forecast period. The Moody's baseline scenario was weighted at 75% and the upside 10th percentile S-1 scenario was weighted at 25%. The allowance for

credit losses was determined at December 31, 2022 solely using the Moody's baseline scenario economic forecast. The current forecast reflects, among other things, declines in forecast levels of home prices and commercial real estate prices compared with the forecast at December 31, 2022.

The following tables detail activity and end of period balances in the allowance for credit losses by portfolio segment for the periods indicated. 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 June 30, 2023
(dollars in thousands)	Commercial, Financial and Agricultural		Consumer		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, March 31, 2023	$	45,238	$	4,893	$	137	$	1,924	$	354	$	893
Provision for loan losses	15,322		1,513		(199)		411		3		51
Loans charged off	(13,316)		(2,052)		(65)		—		—		(1,848)
Recoveries of loans previously charged off	3,545		194		225		—		—		1,680
Balance, June 30, 2023	$	50,789	$	4,548	$	98	$	2,335	$	357	$	776
	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, March 31, 2023	$	42,841	$	87,124	$	59,254	$	242,658
Provision for loan losses	11,276		12,275		2,991		43,643
Loans charged off	—		(3,320)		(69)		(20,670)
Recoveries of loans previously charged off	472		61		263		6,440
Balance, June 30, 2023	$	54,589	$	96,140	$	62,439	$	272,071
Six Months Ended June 30, 2023
(dollars in thousands)	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, December 31, 2022	$	39,455	$	5,413	$	174	$	2,118	$	357	$	1,025
Adjustment to allowance for adoption of ASU 2022-02	(105)		—		—		—		—		—
Provision for loan losses	31,400		1,836		(418)		217		—		(42)
Loans charged off	(25,549)		(3,192)		(99)		—		—		(3,269)
Recoveries of loans previously charged off	5,588		491		441		—		—		3,062
Balance, June 30, 2023	$	50,789	$	4,548	$	98	$	2,335	$	357	$	776
	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, December 31, 2022	$	32,659	$	67,433	$	57,043	$	205,677
Adjustment to allowance for adoption of ASU 2022-02	(37)		(722)		(847)		(1,711)
Provision for loan losses	21,395		32,644		5,987		93,019
Loans charged off	—		(3,320)		(197)		(35,626)
Recoveries of loans previously charged off	572		105		453		10,712
Balance, June 30, 2023	$	54,589	$	96,140	$	62,439	$	272,071

Three Months Ended June 30, 2022
(dollars in thousands)	Commercial, Financial and Agricultural		Consumer		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, March 31, 2022	$	25,526	$	5,619	$	373	$	3,010	$	384	$	2,515
Provision for loan losses	1,738		557		(306)		875		(13)		200
Loans charged off	(4,391)		(1,137)		(41)		—		—		(1,066)
Recoveries of loans previously charged off	2,785		230		265		—		—		1,113
Balance, June 30, 2022	$	25,658	$	5,269	$	291	$	3,885	$	371	$	2,762
	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, March 31, 2022	$	26,831	$	67,033	$	29,960	$	161,251
Provision for loan losses	(3,954)		(7,647)		21,777		13,227
Loans charged off	—		(81)		(137)		(6,853)
Recoveries of loans previously charged off	355		44		225		5,017
Balance, June 30, 2022	$	23,232	$	59,349	$	51,825	$	172,642
Six Months Ended June 30, 2022
(dollars in thousands)	Commercial, Financial and Agricultural		Consumer Installment		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, December 31, 2021	$	26,829	$	6,097	$	476	$	3,231	$	401	$	2,729
Provision for loan losses	1,953		1,346		(596)		654		(30)		108
Loans charged off	(8,805)		(2,562)		(129)		—		—		(2,435)
Recoveries of loans previously charged off	5,681		388		540		—		—		2,360
Balance, June 30, 2022	$	25,658	$	5,269	$	291	$	3,885	$	371	$	2,762
	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, December 31, 2021	$	22,045	$	77,831	$	27,943	$	167,582
Provision for loan losses	614		(17,199)		23,643		10,493
Loans charged off	—		(1,364)		(137)		(15,432)
Recoveries of loans previously charged off	573		81		376		9,999
Balance, June 30, 2022	$	23,232	$	59,349	$	51,825	$	172,642

Modifications to Borrowers Experiencing Financial Difficulty

The Company periodically provides modifications to borrowers experiencing financial difficulty. These modifications include either payment deferrals, term extensions, interest rate reductions, principal forgiveness or combinations of modification types. The determination of whether the borrower is experiencing financial difficulty is made on the date of the modification. When principal forgiveness is provided, the amount of principal forgiveness is charged off against the allowance for credit losses with a corresponding reduction in the amortized cost basis of the loan.

The following table shows the amortized cost basis of the loans modified to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted:

(dollars in thousands)	Payment Deferral		Term Extension		Total		Percentage of Total Class of Financial Receivable
Commercial, financial and agricultural	$	1,207	$	1,997	$	3,204	0.1	%
Real estate – construction and development	—		286		286		—	%
Real estate – commercial and farmland	—		1,206		1,206		—	%
Total	$	1,207	$	3,489	$	4,696	—	%

The Company does not have any commitments to lend additional funds to borrowers experiencing financial difficulty for which the Company has modified their loans.

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty during the six months ended June 30, 2023:

Payment Deferral
Loan Type	Financial Effect
Commercial, financial and agricultural	Payments were reduced approximately 32% for three months before returning to a fully amortizing payment structure thereafter.
Commercial, financial and agricultural	Payments were reduced approximately 73% for four months before requiring full repayment.

Term Extension
Loan Type	Financial Effect
Commercial, financial and agricultural	Maturity dates were extended for an average of 10.5 months.
Real estate – construction and development	Maturity date was extended for 11 months.
Real estate – commercial and farmland	Maturity dates were extended for an average of 10.5 months.

The Company monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that have been modified in the last 12 months:

(dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 or More Days Past Due		Total
Commercial, financial and agricultural	$	2,707	$	497	$	—	$	—	$	3,204
Real estate – construction and development	286		—		—		—		286
Real estate – commercial and farmland	706		500		—		—		1,206
Total	$	3,699	$	997	$	—	$	—	$	4,696

The following table provides the amortized cost basis of financing receivables that had a payment default during both the three and six months ended June 30, 2023 and were modified in the 12 months before default to borrowers experiencing financial difficulty.

(dollars in thousands)	Term Extension
Commercial, financial and agricultural	$	497
Real estate – commercial and farmland	500
Total	$	997