LOANS AND ALLOWANCE FOR CREDIT LOSSES

6 Months Ended

Jun. 30, 2024

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, 2024		December 31, 2023
Commercial, financial and agricultural	$	2,860,973	$	2,688,929
Consumer	217,787		241,552
Indirect automobile	16,335		34,257
Mortgage warehouse	1,070,921		818,728
Municipal	454,967		492,668
Premium finance	1,151,261		946,562
Real estate – construction and development	2,336,987		2,129,187
Real estate – commercial and farmland	8,103,634		8,059,754
Real estate – residential	4,779,738		4,857,666
	$	20,992,603	$	20,269,303

Accrued interest receivable on loans is reported in other assets on the consolidated balance sheets totaling $80.0 million and $79.2 million and at June 30, 2024 and December 31, 2023, respectively. The Company had no recorded allowance for credit losses related to accrued interest on loans at both June 30, 2024 and December 31, 2023.

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, 2024		December 31, 2023
Commercial, financial and agricultural	$	14,896	$	8,059
Consumer	675		1,153
Indirect automobile	218		299
Real estate – construction and development	3,248		282
Real estate – commercial and farmland	17,900		11,295
Real estate – residential(1)	142,461		130,029
	$	179,398	$	151,117

(1) Included in real estate - residential were $93.5 million and $90.2 million of serviced GNMA-guaranteed nonaccrual loans at June 30, 2024 and December 31, 2023, respectively.

Interest income recognized on nonaccrual loans during the six months ended June 30, 2024 and 2023 was not material.

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

(dollars in thousands)	June 30, 2024		December 31, 2023
Commercial, financial and agricultural	$	685	$	2,049
Real estate – construction and development	3,000		—
Real estate – commercial and farmland	1,238		9,109
Real estate – residential	83,515		75,419
	$	88,438	$	86,577

The following table presents an analysis of past-due loans as of June 30, 2024 and December 31, 2023:

(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, 2024
Commercial, financial and agricultural	$	9,531	$	6,182	$	8,425	$	24,138	$	2,836,835	$	2,860,973	$	4,160
Consumer	1,251		552		225		2,028		215,759		217,787		—
Indirect automobile	70		15		63		148		16,187		16,335		—
Mortgage warehouse	—		—		—		—		1,070,921		1,070,921		—
Municipal	—		—		—		—		454,967		454,967		—
Premium finance	8,773		8,158		11,415		28,346		1,122,915		1,151,261		11,416
Real estate – construction and development	562		337		3,565		4,464		2,332,523		2,336,987		—
Real estate – commercial and farmland	3,989		1,999		5,975		11,963		8,091,671		8,103,634		333
Real estate – residential	58,123		15,248		139,729		213,100		4,566,638		4,779,738		—
Total	$	82,299	$	32,491	$	169,397	$	284,187	$	20,708,416	$	20,992,603	$	15,909
December 31, 2023
Commercial, financial and agricultural	$	11,023	$	5,439	$	9,733	$	26,195	$	2,662,734	$	2,688,929	$	5,310
Consumer	2,155		1,037		498		3,690		237,862		241,552		—
Indirect automobile	153		17		78		248		34,009		34,257		—
Mortgage warehouse	—		—		—		—		818,728		818,728		—
Municipal	—		—		—		—		492,668		492,668		—
Premium finance	12,379		6,832		11,678		30,889		915,673		946,562		11,678
Real estate – construction and development	2,094		—		282		2,376		2,126,811		2,129,187		—
Real estate – commercial and farmland	5,070		1,656		6,352		13,078		8,046,676		8,059,754		—
Real estate – residential	49,976		19,300		127,087		196,363		4,661,303		4,857,666		—
Total	$	82,850	$	34,281	$	155,708	$	272,839	$	19,996,464	$	20,269,303	$	16,988

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, 2024				December 31, 2023
(dollars in thousands)	Balance		Allowance for Credit Losses		Balance		Allowance for Credit Losses
Commercial, financial and agricultural	$	11,736	$	2,696	$	5,889	$	567
Premium finance	1,832		136		1,990		45
Real estate – construction and development	3,000		—		280		23
Real estate – commercial and farmland	16,614		728		11,114		108
Real estate – residential	26,493		3,093		21,102		2,654
	$	59,675	$	6,653	$	40,375	$	3,397

Credit Quality Indicators

The Company uses a five 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 – These loans range from minimal to 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 ("Special Mention") – 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 – 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 – 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 – 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, 2024 and December 31, 2023. 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 doubtful or loss at June 30, 2024 or December 31, 2023.

As of June 30, 2024	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2024		2023		2022		2021		2020		Prior				Total
Commercial, Financial and Agricultural
Risk Grade:
Pass	$	534,839	$	729,004	$	631,819	$	307,287	$	93,751	$	65,315	$	459,680	$	2,821,695
Special mention	—		30		1,298		1,456		1,182		3,409		2,640		10,015
Substandard	84		1,910		3,392		9,882		546		5,591		7,858		29,263
Total commercial, financial and agricultural	$	534,923	$	730,944	$	636,509	$	318,625	$	95,479	$	74,315	$	470,178	$	2,860,973
Current-period gross charge offs	—		11,545		10,486		4,196		1,007		600		—		27,834
Consumer
Risk Grade:
Pass	$	31,494	$	25,079	$	12,646	$	3,856	$	21,129	$	31,061	$	91,257	$	216,522
Special mention	—		—		20		—		6		53		—		79
Substandard	33		239		99		34		177		544		60		1,186
Total consumer	$	31,527	$	25,318	$	12,765	$	3,890	$	21,312	$	31,658	$	91,317	$	217,787
Current-period gross charge offs	35		387		141		18		547		691		198		2,017
Indirect Automobile
Risk Grade:
Pass	$	—	$	—	$	—	$	—	$	—	$	16,002	$	—	$	16,002
Special mention	—		—		—		—		—		29		—		29
Substandard	—		—		—		—		—		304		—		304
Total indirect automobile	$	—	$	—	$	—	$	—	$	—	$	16,335	$	—	$	16,335
Current-period gross charge offs	—		—		—		—		—		104		—		104
Mortgage Warehouse
Risk Grade:
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	1,070,471	$	1,070,471
Special mention	—		—		—		—		—		—		450		450
Total mortgage warehouse	$	—	$	—	$	—	$	—	$	—	$	—	$	1,070,921	$	1,070,921
Current-period gross charge offs	—		—		—		—		—		—		—		—
Municipal
Risk Grade:
Pass	$	20,042	$	9,167	$	31,822	$	37,541	$	146,128	$	207,646	$	2,621	$	454,967
Total municipal	$	20,042	$	9,167	$	31,822	$	37,541	$	146,128	$	207,646	$	2,621	$	454,967
Current-period gross charge offs	—		—		—		—		—		—		—		—
Premium Finance
Risk Grade:
Pass	$	980,449	$	158,296	$	649	$	451	$	—	$	—	$	—	$	1,139,845
Substandard	3,705		7,699		12		—		—		—		—		11,416
Total premium finance	$	984,154	$	165,995	$	661	$	451	$	—	$	—	$	—	$	1,151,261
Current-period gross charge offs	380		4,183		245		—		—		—		—		4,808

As of June 30, 2024	Term Loans by Origination Year												Revolving Loans Amortized Cost Basis
	2024		2023		2022		2021		2020		Prior				Total
Real Estate – Construction and Development
Risk Grade:
Pass	$	280,290	$	338,310	$	1,065,404	$	432,596	$	35,092	$	94,589	$	83,578	$	2,329,859
Special mention	1,454		1,226		2,931		67		—		290		—		5,968
Substandard	—		79		16		532		—		533		—		1,160
Total real estate – construction and development	$	281,744	$	339,615	$	1,068,351	$	433,195	$	35,092	$	95,412	$	83,578	$	2,336,987
Current-period gross charge offs	—		—		—		—		—		—		—		—
Real Estate – Commercial and Farmland
Risk Grade:
Pass	$	89,702	$	466,153	$	2,081,414	$	2,133,812	$	1,072,326	$	2,010,066	$	95,168	$	7,948,641
Special mention	—		1,359		56		3,502		14,839		76,168		—		95,924
Substandard	—		1,173		17,189		16,438		3,931		20,338		—		59,069
Total real estate – commercial and farmland	$	89,702	$	468,685	$	2,098,659	$	2,153,752	$	1,091,096	$	2,106,572	$	95,168	$	8,103,634
Current-period gross charge offs	—		513		—		—		—		—		—		513
Real Estate - Residential
Risk Grade:
Pass	$	126,638	$	673,422	$	1,352,544	$	1,098,997	$	483,248	$	612,181	$	278,384	$	4,625,414
Special mention	—		12		—		69		162		1,586		1,183		3,012
Substandard	198		16,256		32,774		32,128		26,564		39,705		3,687		151,312
Total real estate - residential	$	126,836	$	689,690	$	1,385,318	$	1,131,194	$	509,974	$	653,472	$	283,254	$	4,779,738
Current-period gross charge offs	—		—		21		—		—		5		—		26
Total Loans
Risk Grade:
Pass	$	2,063,454	$	2,399,431	$	5,176,298	$	4,014,540	$	1,851,674	$	3,036,860	$	2,081,159	$	20,623,416
Special mention	1,454		2,627		4,305		5,094		16,189		81,535		4,273		115,477
Substandard	4,020		27,356		53,482		59,014		31,218		67,015		11,605		253,710
Total loans	$	2,068,928	$	2,429,414	$	5,234,085	$	4,078,648	$	1,899,081	$	3,185,410	$	2,097,037	$	20,992,603
Total current-period gross charge offs	415		16,628		10,893		4,214		1,554		1,400		198		35,302

As of December 31, 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	$	892,951	$	758,471	$	384,830	$	95,055	$	56,447	$	41,095	$	432,472	$	2,661,321
Special mention	—		335		5,722		92		109		451		803		7,512
Substandard	1,512		3,595		3,222		1,140		3,533		5,748		1,346		20,096
Total commercial, financial and agricultural	$	894,463	$	762,401	$	393,774	$	96,287	$	60,089	$	47,294	$	434,621	$	2,688,929
Consumer
Risk Grade:
Pass	$	44,736	$	17,661	$	5,878	$	25,654	$	15,838	$	20,937	$	109,214	$	239,918
Special mention	—		5		—		—		—		26		—		31
Substandard	154		181		41		334		197		531		165		1,603
Total consumer	$	44,890	$	17,847	$	5,919	$	25,988	$	16,035	$	21,494	$	109,379	$	241,552
Indirect Automobile
Risk Grade:
Pass	$	—	$	—	$	—	$	—	$	6,086	$	27,646	$	—	$	33,732
Substandard	—		—		—		—		55		470		—		525
Total indirect automobile	$	—	$	—	$	—	$	—	$	6,141	$	28,116	$	—	$	34,257
Mortgage Warehouse
Risk Grade:
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	772,366	$	772,366
Special mention	—		—		—		—		—		—		46,362		46,362
Total mortgage warehouse	$	—	$	—	$	—	$	—	$	—	$	—	$	818,728	$	818,728
Municipal
Risk Grade:
Pass	$	14,216	$	27,346	$	48,941	$	177,156	$	14,655	$	208,236	$	2,118	$	492,668
Total municipal	$	14,216	$	27,346	$	48,941	$	177,156	$	14,655	$	208,236	$	2,118	$	492,668
Premium Finance
Risk Grade:
Pass	$	928,930	$	4,038	$	1,916	$	—	$	—	$	—	$	—	$	934,884
Substandard	10,777		901		—		—		—		—		—		11,678
Total premium finance	$	939,707	$	4,939	$	1,916	$	—	$	—	$	—	$	—	$	946,562

As of December 31, 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	$	457,077	$	938,909	$	505,254	$	58,840	$	54,646	$	30,042	$	81,662	$	2,126,430
Special mention	—		—		—		—		—		479		—		479
Substandard	—		266		1,512		—		—		500		—		2,278
Total real estate – construction and development	$	457,077	$	939,175	$	506,766	$	58,840	$	54,646	$	31,021	$	81,662	$	2,129,187
Real Estate – Commercial and Farmland
Risk Grade:
Pass	$	450,315	$	1,890,498	$	2,133,833	$	1,090,735	$	765,640	$	1,437,323	$	100,206	$	7,868,550
Special mention	—		17,131		53,329		—		30,200		46,370		—		147,030
Substandard	428		418		15,578		2,660		6,106		18,984		—		44,174
Total real estate – commercial and farmland	$	450,743	$	1,908,047	$	2,202,740	$	1,093,395	$	801,946	$	1,502,677	$	100,206	$	8,059,754
Real Estate - Residential
Risk Grade:
Pass	$	714,684	$	1,425,186	$	1,148,092	$	506,137	$	236,147	$	423,648	$	262,968	$	4,716,862
Special mention	13		—		72		201		234		1,411		380		2,311
Substandard	5,057		26,171		28,459		30,566		19,357		25,263		3,620		138,493
Total real estate - residential	$	719,754	$	1,451,357	$	1,176,623	$	536,904	$	255,738	$	450,322	$	266,968	$	4,857,666
Total Loans
Risk Grade:
Pass	$	3,502,909	$	5,062,109	$	4,228,744	$	1,953,577	$	1,149,459	$	2,188,927	$	1,761,006	$	19,846,731
Special mention	13		17,471		59,123		293		30,543		48,737		47,545		203,725
Substandard	17,928		31,532		48,812		34,700		29,248		51,496		5,131		218,847
Total loans	$	3,520,850	$	5,111,112	$	4,336,679	$	1,988,570	$	1,209,250	$	2,289,160	$	1,813,682	$	20,269,303

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, 2024, the allowance for credit losses increased due to the current economic forecast and organic loan growth during the period. The allowance for credit losses was determined at June 30, 2024 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 downside 75th percentile S-2 scenario was weighted at 25%. The allowance for credit losses was determined at December 31, 2023 solely using the Moody's baseline scenario economic forecast. The current forecast reflects, among other things, an increase in forecast levels of multifamily rental vacancies and unemployment, partially offset by a decrease in the severity of commercial real estate price index decline compared with the forecast at December 31, 2023.

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, 2024
(dollars in thousands)	Commercial, Financial and Agricultural		Consumer		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, March 31, 2024	$	63,804	$	3,903	$	36	$	1,823	$	63	$	616
Provision for loan losses	10,869		263		(149)		319		(3)		594
Loans charged off	(12,539)		(926)		(39)		—		—		(2,802)
Recoveries of loans previously charged off	4,408		211		180		—		—		2,294
Balance, June 30, 2024	$	66,542	$	3,451	$	28	$	2,142	$	60	$	702
	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, March 31, 2024	$	72,168	$	110,656	$	66,954	$	320,023
Provision for loan losses	5,269		11,311		(3,125)		25,348
Loans charged off	—		(513)		(26)		(16,845)
Recoveries of loans previously charged off	45		509		45		7,692
Balance, June 30, 2024	$	77,482	$	121,963	$	63,848	$	336,218
Six Months Ended June 30, 2024
(dollars in thousands)	Commercial, Financial and Agricultural		Consumer		Indirect Automobile		Mortgage Warehouse		Municipal		Premium Finance
Balance, December 31, 2023	$	64,053	$	3,902	$	50	$	1,678	$	345	$	602
Provision for loan losses	23,016		1,163		(283)		464		(285)		163
Loans charged off	(27,834)		(2,017)		(104)		—		—		(4,808)
Recoveries of loans previously charged off	7,307		403		365		—		—		4,745
Balance, June 30, 2024	$	66,542	$	3,451	$	28	$	2,142	$	60	$	702
	Real Estate – Construction and Development		Real Estate – Commercial and Farmland		Real Estate – Residential		Total
Balance, December 31, 2023	$	61,017	$	110,097	$	65,356	$	307,100
Provision for loan losses	16,417		11,785		(1,569)		50,871
Loans charged off	—		(513)		(26)		(35,302)
Recoveries of loans previously charged off	48		594		87		13,549
Balance, June 30, 2024	$	77,482	$	121,963	$	63,848	$	336,218

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

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 during the three and six months ended June 30, 2024, and 2023:

Three Months Ended June 30, 2024
(dollars in thousands)	Payment Deferral		Term Extension		Interest Rate Reduction		Combination of Term Extension and Rate Reduction		Total		Percentage of Total Class of Financial Receivable
Commercial, financial and agricultural	$	625	$	—	$	—	$	—	$	625	—	%
Real estate – residential	—		2,567		503		808		3,878		0.1	%
Total	$	625	$	2,567	$	503	$	808	$	4,503	—	%

Six Months Ended June 30, 2024
(dollars in thousands)	Payment Deferral		Term Extension		Interest Rate Reduction		Combination of Term Extension and Rate Reduction		Total		Percentage of Total Class of Financial Receivable
Commercial, financial and agricultural	$	625	$	—	$	—	$	—	$	625	—	%
Real estate – residential	—		6,093		503		1,341		7,937		0.2	%
Total	$	625	$	6,093	$	503	$	1,341	$	8,562	—	%

Three Months Ended June 30, 2023
(dollars in thousands)	Payment Deferral		Term Extension		Total		Percentage of Total Class of Financial Receivable
Commercial, financial and agricultural	$	380	$	1,997	$	2,377	0.1	%
Real estate – construction and development	—		286		286		—	%
Real estate – commercial and farmland	—		1,206		1,206		—	%
Total	$	380	$	3,489	$	3,869	—	%

Six Months Ended June 30, 2023
(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 had unfunded commitments to borrowers experiencing financial difficulty for which the Company has modified their loans of $1.5 million at both June 30, 2024 and December 31, 2023.

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty during the six months ended June 30, 2024, and 2023:

Six Months Ended June 30, 2024

Payment Deferral
Loan Type	Financial Effect
Commercial, financial and agricultural	Payments were deferred for 16 months.

Term Extension
Loan Type	Financial Effect
Real estate - residential	Maturity dates were extended for a weighted average of 81 months

Interest Rate Reduction
Loan Type	Financial Effect
Real estate - residential	Rate was reduced by 1.625%

Combination of Term Extension and Rate Reduction
Loan Type	Financial Effect
Real estate - residential	Maturity date was extended for a weighted average 112 months and rate was reduced by a weighted average 2.86%

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:

As of June 30, 2024
(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	$	3,667	$	—	$	—	$	—	$	3,667
Real estate – commercial and farmland	3,462		—		—		—		3,462
Real estate – residential	10,463		1,711		1,036		1,259		14,469
Total	$	17,592	$	1,711	$	1,036	$	1,259	$	21,598

As of December 31, 2023
(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	$	4,018	$	355	$	—	$	799	$	5,172
Real estate – commercial and farmland	6,692		1,129		—		—		7,821
Real estate – residential	5,113		711		442		1,106		7,372
Total	$	15,823	$	2,195	$	442	$	1,905	$	20,365

The following table provides the amortized cost basis of financing receivables that had a payment default during the three months ended June 30, 2024 and were modified in the 12 months before default to borrowers experiencing financial difficulty.

(dollars in thousands)	Term Extension		Combination of Term Extension and Rate Reduction		Total
Real estate – residential	$	3,337	$	456	$	3,793
Total	$	3,337	$	456	$	3,793

The following table provides the amortized cost basis of financing receivables that had a payment default during the six months ended June 30, 2024 and were modified in the 12 months before default to borrowers experiencing financial difficulty.

(dollars in thousands)	Term Extension		Combination of Term Extension and Rate Reduction		Total
Real estate – residential	$	3,337	$	456	$	3,793
Total	$	3,337	$	456	$	3,793

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		Total
Commercial, financial and agricultural	$	497	$	497
Real estate – commercial and farmland	500		500
Total	$	997	$	997