Edgar Filing: Ameris Bancorp

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-13901

AMERIS BANCORP

(Exact name of registrant as specified in its charter)

GEORGIA	58-1456434
(State of incorporation)	(IRS Employer ID No.)

310 FIRST STREET, S.E., MOULTRIE, GA 31768

(Address of principal executive offices)

(229) 890-1111

(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Securities Exchange Act. (Check one):

Large accelerated filer	x	Accelerated filer	¨

Non-accelerated filer	¨ (Do not check if smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act). Yes ¨ No x

There were 34,831,329 shares of Common Stock outstanding as of April 30, 2016.

AMERIS BANCORP

TABLE OF CONTENTS

		Page

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements.

	Consolidated Balance Sheets at March 31, 2016, December 31, 2015 and March 31, 2015	3

	Consolidated Statements of Earnings and Comprehensive Income for the Three Months Ended March 31, 2016 and 2015	4

	Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2016 and 2015	5

	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015	6

	Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	60

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	85

Item 4.	Controls and Procedures.	85

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	86

Item 1A.	Risk Factors.	86

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	86

Item 3.	Defaults Upon Senior Securities.	86

Item 4.	Mine Safety Disclosures.	86

Item 5.	Other Information.	86

Item 6.	Exhibits.	86

Signatures		86

Item 1.

Financial Statements

AMERIS BANCORP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)

	March 31, 2016			December 31, 2015			March 31, 2015
	(Unaudited)			(Audited)			(Unaudited)
Assets
Cash and due from banks	$	146,863		$	118,518		$	80,142
Federal funds sold and interest-bearing accounts		107,373			272,045			126,157
Investment securities available for sale, at fair value		837,103			783,185			610,330
Other investments		12,802			9,323			8,636
Mortgage loans held for sale, at fair value		97,439			111,182			73,796

Loans, net of unearned income		2,528,007			2,406,877			1,999,420
Purchased loans not covered by FDIC loss-share agreements (“purchased non-covered loans”)		1,129,919			771,554			643,092
Purchased loan pools not covered by FDIC loss-share agreements (“purchased loan pools”)		656,734			592,963			-
Purchased loans covered by FDIC loss-share agreements (“covered loans”)		130,279			137,529			245,745
Less: allowance for loan losses		(21,482	)		(21,062	)		(21,852	)
Loans, net		4,423,457			3,887,861			2,866,405

Other real estate owned, net		14,967			16,147			32,339
Purchased, non-covered other real estate owned, net		15,048			14,333			13,818
Covered other real estate owned, net		3,764			5,011			16,089
Total other real estate owned, net		33,779			35,491			62,246

Premises and equipment, net		124,747			121,639			98,292
FDIC loss-share receivable, net		1,197			6,301			23,312
Other intangible assets, net		21,892			17,058			7,591
Goodwill		121,512			90,082			63,547
Cash value of bank owned life insurance		76,676			64,251			59,212
Other assets		92,931			72,004			73,238
Total assets	$	6,097,771		$	5,588,940		$	4,152,904

Liabilities and Stockholders’ Equity
Liabilities
Deposits:
Noninterest-bearing	$	1,529,037		$	1,329,857		$	967,015
Interest-bearing		3,701,750			3,549,433			2,513,216
Total deposits		5,230,787			4,879,290			3,480,231
Securities sold under agreements to repurchase		43,741			63,585			55,520
Other borrowings		110,531			39,000			43,851
Other liabilities		28,647			22,432			17,952
Subordinated deferrable interest debentures		83,237			69,874			65,567
Total liabilities		5,496,943			5,074,181			3,663,121

Stockholders’ Equity
Preferred stock, stated value $1,000; 5,000,000 shares authorized; 0 shares issued and outstanding		-			-			-
Common stock, par value $1; 100,000,000 shares authorized; 36,272,185; 33,625,162 and 33,592,585 shares issued		36,272			33,625			33,593
Capital surplus		407,726			337,349			335,578
Retained earnings		163,395			152,820			126,566
Accumulated other comprehensive income		6,411			3,353			6,353
Treasury stock, at cost, 1,434,731; 1,413,777 and 1,410,442 shares		(12,976	)		(12,388	)		(12,307	)
Total stockholders’ equity		600,828			514,759			489,783
Total liabilities and stockholders’ equity	$	6,097,771		$	5,588,940		$	4,152,904

See notes to unaudited consolidated financial statements

AMERIS BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended March 31,
	2016			2015
Interest income
Interest and fees on loans	$	49,191		$	38,618
Interest on taxable securities		4,583			3,153
Interest on nontaxable securities		446			469
Interest on deposits in other banks and federal funds sold		336			128
Total interest income		54,559			42,368

Interest expense
Interest on deposits		2,741			2,280
Interest on other borrowings		1,382			1,256
Total interest expense		4,123			3,536

Net interest income		50,436			38,832
Provision for loan losses		681			1,069
Net interest income after provision for loan losses		49,755			37,763

Noninterest income
Service charges on deposit accounts		9,915			6,429
Mortgage banking activity		10,211			8,083
Other service charges, commissions and fees		1,111			668
Gain on sale of securities		94			12
Other noninterest income		2,955			2,383
Total noninterest income		24,286			17,575

Noninterest expense
Salaries and employee benefits		26,187			20,632
Occupancy and equipment expense		5,700			4,554
Advertising and marketing expense		805			641
Amortization of intangible assets		1,020			630
Data processing and communications costs		6,113			4,260
Credit resolution related expenses		1,799			3,161
Merger and conversion charges		6,359			15
Other noninterest expenses		7,617			6,934
Total noninterest expense		55,600			40,827
Income before income tax expense		18,441			14,511
Income tax expense		6,124			4,747
Net income		12,317			9,764

Other comprehensive income
Unrealized holding gains arising during period on investment securities available for sale, net of tax of $2,011 and $350		3,734			650
Reclassification adjustment for gains included in earnings, net of tax of $33 and $4		(61	)		(8	)
Unrealized loss on cash flow hedges arising during period, net of tax of $331 and $208		(615	)		(387	)
Other comprehensive income		3,058			255
Total comprehensive income		15,375			10,019
Basic earnings per common share	$	0.38		$	0.32
Diluted earnings per common share	$	0.37		$	0.32
Dividends declared per common share	$	0.05		$	0.05
Weighted average common shares outstanding
Basic		32,752			30,443
Diluted		33,054			30,796

See notes to unaudited consolidated financial statements

AMERIS BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(dollars in thousands, except per share data)

(Unaudited)

	Three Months Ended						Three Months Ended
	March 31, 2016						March 31, 2015
	Shares			Amount			Shares			Amount
PREFERRED STOCK
Balance at beginning of period		-		$	-			-		$	-
Balance at end of period		-		$	-			-		$	-

COMMON STOCK
Balance at beginning of period		33,625,162		$	33,625			28,159,027		$	28,159
Issuance of common shares		2,549,469			2,549			5,320,000			5,320
Issuance of restricted shares		96,749			97			71,000			71
Cancellation of restricted shares		(3,000	)		(3	)		-			-
Proceeds from exercise of stock options		3,805			4			42,558			43
Balance at end of period		36,272,185		$	36,272			33,592,585		$	33,593

CAPITAL SURPLUS
Balance at beginning of period				$	337,349					$	225,015
Stock-based compensation					492						380
Issuance of common shares, net of issuance costs of $0 and $4,811					69,906						109,569
Issuance of restricted shares					(97	)					(71	)
Cancellation of restricted shares					3						-
Proceeds from exercise of stock options					73						685
Balance at end of period				$	407,726					$	335,578

RETAINED EARNINGS
Balance at beginning of period				$	152,820					$	118,412
Net income					12,317						9,764
Dividends on common shares					(1,742	)					(1,610	)
Balance at end of period				$	163,395					$	126,566

ACCUMULATED OTHER COMPREHENSIVE INCOME, NET OF TAX
Unrealized gains on securities and derivatives:
Balance at beginning of period				$	3,353					$	6,098
Other comprehensive income during the period					3,058						255
Balance at end of period				$	6,411					$	6,353

TREASURY STOCK
Balance at beginning of period		(1,413,777	)	$	(12,388	)		(1,385,164	)	$	(11,656	)
Purchase of treasury shares		(20,954	)		(588	)		(25,278	)		(651	)
Balance at end of period		(1,434,731	)	$	(12,976	)		(1,410,442	)	$	(12,307	)
TOTAL STOCKHOLDERS’ EQUITY				$	600,828					$	489,783

See notes to unaudited consolidated financial statements.

AMERIS BANCORP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Three Months Ended March 31,
	2016			2015
Cash flows from operating activities:
Net income	$	12,317		$	9,764
Adjustments reconciling net income to net cash provided by operating activities:
Depreciation		2,723			1,938
Amortization of intangible assets		1,020			630
Net amortization of investment securities available for sale		1,441			1,158
Net gains on securities available for sale		(94	)		(12	)
Stock based compensation expense		492			380
Net (gains) losses on sale or disposal of premises and equipment		(77	)		89
Net write-downs and losses on sale of other real estate owned		1,498			1,834
Provision for loan losses		681			1,069
Accretion of discount on covered loans		(1,487	)		(4,466	)
Accretion of discount on purchased non-covered loans		(2,647	)		(3,111	)
Changes in FDIC loss-share receivable, net of cash payments received		1,805			3,899
Increase in cash surrender value of BOLI		(357	)		(345	)
Originations of mortgage loans held for sale		(266,587	)		(186,332	)
Proceeds from sales of mortgage loans held for sale		280,022			204,173
Net gains on sale of mortgage loans held for sale		(11,405	)		(8,619	)
Originations of SBA loans		(17,134	)		(17,185	)
Proceeds from sales of SBA loans		13,300			8,163
Net gains on sale of SBA loans		(1,086	)		(909	)
Change attributable to other operating activities		(946	)		170
Net cash provided by operating activities		13,479			12,288

Cash flows from investing activities:
Purchase of securities available for sale		(56,168	)		(89,811	)
Proceeds from maturities of securities available for sale		24,666			16,022
Proceeds from sales of securities available for sale		41,564			5,118
Decrease in other investments, net		(1,274	)		1,639
Net increase in loans, excluding purchased non-covered and covered loans		(94,916	)		(90,716	)
Purchases of loan pools		(90,369	)		-
Payments received on purchased non-covered loans		43,807			32,920
Payments received on purchased loan pools		26,598			-
Payments received on covered loans		8,218			25,958
Purchases of premises and equipment		(3,694	)		(2,999	)
Proceeds from sales of premises and equipment		131			173
Proceeds from sales of other real estate owned		4,497			9,340
Payments received from FDIC under loss-share agreements		3,299			6,390
Net cash proceeds received (paid) from acquisitions		(7,205	)		-
Net cash used in investing activities		(100,846	)		(85,966	)

Cash flows from financing activities:
Net increase (decrease) in deposits		(49,863	)		49,082
Net decrease in securities sold under agreements to repurchase		(19,844	)		(17,790	)
Proceeds from other borrowings		23,000			-
Repayment of other borrowings		-			(35,030	)
Dividends paid – common stock		(1,742	)		(1,610	)
Purchase of treasury shares		(588	)		(651	)
Issuance of common stock		-			114,889
Proceeds from exercise of stock options		77			728

	Three Months Ended March 31,
	2016			2015
Net cash provided by (used in) financing activities		(48,960	)		109,618

Net increase (decrease) in cash and cash equivalents		(136,327	)		35,940
Cash and cash equivalents at beginning of period		390,563			170,359
Cash and cash equivalents at end of period	$	254,236		$	206,299

SUPPLEMENTAL DISCLOSURES OF NON-CASH INFORMATION
Cash paid during the period for:
Interest	$	4,059		$	3,741
Income taxes	$	804		$	215
Loans (excluding purchased non-covered and covered loans) transferred to other real estate owned	$	1,044		$	2,444
Purchased non-covered loans transferred to other real estate owned	$	1,243		$	1,094
Covered loans transferred to other real estate owned	$	158		$	1,230
Loans provided for the sales of other real estate owned	$	585		$	1,573
Change in unrealized gain on securities available for sale	$	3,673		$	642
Change in unrealized loss on cash flow hedge (interest rate swap)	$	(615	)	$	(387	)
Issuance of common stock in acquisitions	$	72,456		$	-

See notes to unaudited consolidated financial statements

AMERIS BANCORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2016

(Unaudited)

NOTE 1 – BASIS OF PRESENTATION AND ACCOUNTING POLICIES

Ameris Bancorp (the “Company” or “Ameris”) is a financial holding company headquartered in Moultrie, Georgia. Ameris conducts substantially all of its operations through its wholly owned banking subsidiary, Ameris Bank (the “Bank”). At March 31, 2016, the Bank operated 103 branches in select markets in Georgia, Alabama, Florida and South Carolina. Our business model capitalizes on the efficiencies of a large financial services company while still providing the community with the personalized banking service expected by our customers. We manage our Bank through a balance of decentralized management responsibilities and efficient centralized operating systems, products and loan underwriting standards. The Company’s Board of Directors and senior managers establish corporate policy, strategy and administrative policies. Within our established guidelines and policies, the banker closest to the customer responds to the differing needs and demands of his or her unique market.

The accompanying unaudited consolidated financial statements for Ameris have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statement presentation. The interim consolidated financial statements included herein are unaudited but reflect all adjustments (consisting of normal recurring accruals) which, in the opinion of management, are necessary for a fair presentation of the consolidated financial position and results of operations for the interim periods presented. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the period ended March 31, 2016 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the financial statements and notes thereto and the report of our registered independent public accounting firm included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Newly Issued Accounting Pronouncements

ASU 2016-02 – Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 amends the existing standards for lease accounting effectively requiring most leases be carried on the balance sheets of the related lessees by requiring them to recognize a right-of-use asset and a corresponding lease liability. ASU 2016-02 includes qualitative and quantitative disclosure requirements intended to provide greater insight into the nature of an entity’s leasing activities. The standard must be adopted using a modified retrospective transition with a cumulative-effect adjustment to equity as of the beginning of the period in which it is adopted. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods with early adoption permitted. The Company is currently evaluating the impact this standard will have on the Company’s results of operations, financial position or disclosures.

ASU 2015-16 – Business Combinations (Topic 805) - Simplifying the Accounting for Measurement-Period Adjustments (“ASU 2015-16”). ASU 2015-16 requires that an acquirer recognize adjustments to estimated amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the estimated amounts, calculated as if the accounting had been completed at the acquisition date. The standard also requires an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the estimated amounts had been recognized as of the acquisition date. ASU 2015-16 is effective for public business entities for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments should be applied prospectively to adjustments to provisional amounts that occur after the effective date with earlier application permitted for financial statements that have not been issued. The Company has early adopted the provisions of this amendment, and the adoption did not have a material impact on the Company's consolidated financial statements.

ASU 2015-03 – Interest – Imputation of Interest (“ASU 2015-03”). ASU 2015-03 simplifies presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. ASU 2015-03 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015, and early adoption is permitted. It should be applied on a retrospective basis. The adoption of this standard did not have a material effect on the Company’s results of operations, financial position or disclosures.

ASU 2015-02 “Consolidation (Topic 810) - Amendments to the Consolidation Analysis (“ASU 2015-02”). ASU 2015-02 includes amendments that are intended to improve targeted areas of consolidation for legal entities including reducing the number of consolidation models from four to two and simplifying the FASB Accounting Standards Codification. ASU 2015-02 is effective for annual and interim periods within those annual periods, beginning after December 15, 2015. The amendments may be applied retrospectively in previously issued financial statements for one or more years with a cumulative effect adjustment to retained earnings as of the beginning of the first year restated. Early adoption is permitted, including adoption in an interim period. The adoption of this standard did not have a material effect on the Company’s results of operations, financial position or disclosures.

ASU 2015-01- Income Statement – Extraordinary and Unusual Items (“ASU 2015-01”). ASU 2015-01 eliminates the concept of extraordinary items by no longer allowing companies to segregate an extraordinary item from the results of operations, separately present an extraordinary item on the income statement, or disclose income taxes or earnings-per-share data applicable to an extraordinary item. ASU 2015-01 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015, and early adoption is permitted. The adoption of this standard did not have a material effect on the Company’s results of operations, financial position or disclosures.

ASU 2014-09 – Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 provides guidance that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective prospectively, for annual and interim periods, beginning after December 15, 2016. The Company is currently evaluating the impact this standard will have on the Company’s results of operations, financial position or disclosures.

NOTE 2 – BUSINESS COMBINATIONS

Jacksonville Bancorp, Inc.

On March 11, 2016, the Company completed its acquisition of Jacksonville Bancorp, Inc. (“JAXB”), a bank holding company headquartered in Jacksonville, Florida. Upon consummation of the acquisition, JAXB was merged with and into the Company, with Ameris as the surviving entity in the merger. At that time, JAXB’s wholly owned banking subsidiary, The Jacksonville Bank (“Jacksonville Bank”), was also merged with and into the Bank. The acquisition expanded the Company’s existing market presence, as Jacksonville Bank had a total of eight full-service branches located in Jacksonville and Jacksonville Beach, Duval County, Florida. Under the terms of the merger, JAXB’s common shareholders received 0.5861 shares of Ameris common stock or $16.50 in cash for each share of JAXB common stock or nonvoting common stock they previously held, subject to the total consideration being allocated 75% stock and 25% cash. As a result, the Company issued 2,549,469 common shares at a fair value of $72.5 million and paid $23.9 million in cash to former shareholders of JAXB.

The acquisition of JAXB was accounted for using the acquisition method of accounting in accordance with FASB ASC 805, Business Combinations. Assets acquired, liabilities assumed and consideration exchanged were recorded at their respective acquisition date fair values. Determining the fair value of assets and liabilities is a complicated process involving significant judgment regarding methods and assumptions used to calculate estimated fair values. Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information regarding the closing date fair values becomes available. In addition, management assessed and recorded the deferred tax assets resulting from differences in the carrying values of acquired assets and assumed liabilities for financial reporting purposes and their basis for income tax purposes. This estimate also reflects acquired net operating loss carryforwards and other acquired assets with built-in losses that are expected to be settled or otherwise recovered in future periods where the realization of such benefits would be subject to applicable limitations under Section 382 of the Internal Revenue Code of 1986, as amended. Management continues to evaluate fair value adjustments related to loans, other real estate owned, premises, intangibles and deferred tax assets.

The following table presents the assets acquired and liabilities of JAXB assumed as of March 11, 2016 and their initial fair value estimates. The fair value adjustments shown in the following table continue to be evaluated by management and may be subject to further adjustment:

(Dollars in Thousands)	As Recorded by JAXB			Fair Value Adjustments			As Recorded by Ameris
Assets
Cash and cash equivalents	$	9,704		$	-		$	9,704
Federal funds sold and interest-bearing balances		7,027			-			7,027
Investment securities		60,836			(942	)(a)		59,894
Other investments		2,458			-			2,458
Loans		416,831			(15,746	)(b)		401,085
Less allowance for loan losses		(12,613	)		12,613	(c)		-
Loans, net		404,218			(3,133	)		401,085
Other real estate owned		2,873			(1,035	)(d)		1,838
Premises and equipment		4,798			-			4,798
Intangible assets		288			5,566	(e)		5,854
Other assets		14,141			23,266	(f)		37,407
Total assets	$	506,343		$	23,722		$	530,065
Liabilities
Deposits:
Noninterest-bearing	$	123,399		$	-		$	123,399
Interest-bearing		277,539			421	(g)		277,960
Total deposits		400,938			421			401,359
Other borrowings		48,350			84	(h)		48,434
Other liabilities		2,354			-			2,354
Subordinated deferrable interest debentures		16,294			(3,393	)(i)		12,901
Total liabilities		467,936			(2,888	)		465,048
Net identifiable assets acquired over (under) liabilities assumed		38,407			26,610			65,017
Goodwill		-			31,375			31,375
Net assets acquired over (under) liabilities assumed	$	38,407		$	57,985		$	96,392
Consideration:
Ameris Bancorp common shares issued		2,549,469
Purchase price per share of the Company's common stock	$	28.42
Company common stock issued		72,456
Cash exchanged for shares		23,936
Fair value of total consideration transferred	$	96,392

Explanation of fair value adjustments

(a)

Adjustment reflects the fair value adjustments of the portfolio of securities available for sale as of the acquisition date.

(b)

Adjustment reflects the fair value adjustments based on the Company’s evaluation of the acquired loan portfolio, net of the reversal of JAXB remaining fair value adjustments from their prior acquisitions.

(c)

Adjustment reflects the elimination of JAXB’s allowance for loan losses.

(d)

Adjustment reflects the fair value adjustment based on the Company’s evaluation of the acquired OREO portfolio, which is based largely on contracted sale prices.

(e)

Adjustment reflects the recording of core deposit intangible on the acquired core deposit accounts.

(f)

Adjustment reflects the deferred taxes on the difference in the carrying values of acquired assets and assumed liabilities for financial reporting purposes and their basis for federal income tax purposes and the reversal of JAXB valuation allowance established on their deferred tax assets.

(g)

Adjustment reflects the fair value adjustments based on the Company’s evaluation of the acquired deposits.

(h)

Adjustment reflects the fair value adjustments based on the Company’s evaluation of the liability for other borrowings.

(i)

Adjustment reflects the fair value adjustment to the subordinated deferrable interest debentures at the acquisition date, net of the reversal of JAXB remaining fair value adjustments from their prior acquisitions.

Goodwill of $31.4 million, which is the excess of the purchase price over the fair value of net assets acquired, was recorded in the JAXB acquisition and is the result of expected operational synergies and other factors. This goodwill is not expected to be deductible for tax purposes.

In the acquisition, the Company purchased $401.1 million of loans at fair value, net of $15.7 million, or 3.78%, estimated discount to the outstanding principal balance. Of the total loans acquired, management identified $28.3 million that were considered to be credit impaired and are accounted for under ASC Topic 310-30. The table below summarizes the total contractually required principal and interest cash payment, management’s estimate of expected total cash payments and fair value of the loans as of acquisition date for purchased credit impaired loans. Contractually required principal and interest payment have been adjusted for estimated prepayments.

Contractually required principal and interest	$	42,314
Non-accretable difference		(7,877	)
Cash flows expected to be collected		34,437
Accretable yield		(6,182	)
Total purchased credit-impaired loans acquired	$	28,255

The following table presents the acquired loan data for the JAXB acquisition.

	Fair Value of Acquired Loans at Acquisition Date		Gross Contractual Amounts Receivable at Acquisition Date		Best Estimate at Acquisition Date of Contractual Cash Flows Not Expected to be Collected
	(Dollars in Thousands)
Acquired receivables subject to ASC 310-30	$	28,255	$	42,314	$	7,877
Acquired receivables not subject to ASC 310-30	$	372,830	$	488,346	$	-

Branch Acquisition

On June 12, 2015, the Company completed its acquisition of 18 branches from Bank of America, National Association located in Calhoun, Columbia, Dixie, Hamilton, Suwanee and Walton Counties, Florida and Ben Hill, Colquitt, Dougherty, Laurens, Liberty, Thomas, Tift and Ware Counties, Georgia. Under the terms of the Purchase and Assumption Agreement dated January 28, 2015, the Company paid a deposit premium of $20.0 million, equal to 3.00% of the average daily deposits for the 15 calendar-day period immediately prior to the acquisition date. In addition, the Company acquired approximately $4.0 million in loans and $10.7 million in premises and equipment.

The acquisition of the 18 branches was accounted for using the acquisition method of accounting in accordance with FASB ASC 805, Business Combinations. Assets acquired, liabilities assumed and consideration exchanged were recorded at their respective acquisition date fair values. Determining the fair value of assets and liabilities is a complicated process involving significant judgment regarding methods and assumptions used to calculate estimated fair values. Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information regarding the closing date fair values becomes available. During the third and fourth quarters of 2015, management revised its initial estimates regarding the valuation of loans, premises and intangible assets acquired. Management continues to evaluate fair value adjustments related to premises acquired.

The following table presents the assets acquired and liabilities assumed as of June 12, 2015 and their fair value estimates. The fair value adjustments shown in the following table continue to be evaluated by management and may be subject to further adjustment:

(Dollars in Thousands)	As Recorded by Bank of America		Initial Fair Value Adjustments			Subsequent Fair Value Adjustments			As Recorded by Ameris
Assets
Cash and cash equivalents	$	630,220	$	-		$	-		$	630,220
Loans		4,363		-			(364	)(d)		3,999
Premises and equipment		10,348		1,060	(a)		(755	)(e)		10,653
Intangible assets		-		7,651	(b)		985	(f)		8,636
Other assets		126					-			126
Total assets	$	645,057	$	8,711		$	(134	)	$	653,634
Liabilities
Deposits:
Noninterest-bearing	$	149,854	$	-		$	-		$	149,854
Interest-bearing		495,110		(215	)(c)		-			494,895
Total deposits		644,964		(215	)		-			644,749
Other liabilities		93		-			-			93
Total liabilities		645,057		(215	)		-			644,842
Net identifiable assets acquired over (under) liabilities assumed		-		8,926			(134	)		8,792
Goodwill		-		11,076			134			11,210
Net assets acquired over (under) liabilities assumed	$	-	$	20,002		$	-		$	20,002
Consideration:
Cash paid as deposit premium	$	20,002
Fair value of total consideration transferred	$	20,002

Explanation of fair value adjustments

(a)

Adjustment reflects the fair value adjustments of the premises and equipment as of the acquisition date.

(b)

Adjustment reflects the recording of core deposit intangible on the acquired core deposit accounts.

(c)

Adjustment reflects the fair value adjustments based on the Company’s evaluation of the acquired deposits.

(d)

Adjustment reflects the fair value adjustments based on the Company’s evaluation of the acquired loan portfolio.

(e)

Adjustment reflects additional recording of fair value adjustment of the premises and equipment.

(f)

Adjustment reflects additional recording of core deposit intangible on the acquired core deposit accounts.

Goodwill of $11.2 million, which is the excess of the purchase consideration over the fair value of net assets acquired, was recorded in the branch acquisition and is the result of expected operational synergies and other factors.

In the acquisition, the Company purchased $4.0 million of loans at fair value. Management identified $364,000 of overdrafts that were considered to be credit impaired and were subsequently charged off as uncollectible under ASC Topic 310-30.

Merchants & Southern Banks of Florida, Incorporated

On May 22, 2015, the Company completed its acquisition of all shares of the outstanding common stock of Merchants & Southern Banks of Florida, Incorporated (“Merchants”), a bank holding company headquartered in Gainesville, Florida, for a total purchase price of $50,000,000. Upon consummation of the stock purchase, Merchants was merged with and into the Company, with Ameris as the surviving entity in the merger. At that time, Merchants’ wholly owned banking subsidiary, Merchants and Southern Bank, was also merged with and into the Bank. The acquisition grew the Company’s existing market presence, as Merchants and Southern Bank had a total of 13 banking locations in Alachua, Marion and Clay Counties, Florida.

The acquisition of Merchants was accounted for using the acquisition method of accounting in accordance with FASB ASC 805, Business Combinations. Assets acquired, liabilities assumed and consideration exchanged were recorded at their respective acquisition date fair values. Determining the fair value of assets and liabilities is a complicated process involving significant judgment regarding methods and assumptions used to calculate estimated fair values. Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as additional information regarding the closing date fair values becomes available. During the third and fourth quarters of 2015, management revised its initial estimates regarding the valuation of investment securities, core deposit intangible and other assets acquired. In addition, management continued its assessment and recorded the deferred tax assets resulting from differences in the carrying values of acquired assets and assumed liabilities for financial reporting purposes and their basis for income tax purposes. This estimate also reflects acquired net operating loss carryforwards and other acquired assets with built-in losses that are expected to be settled or otherwise recovered in future periods where the realization of such benefits would be subject to applicable limitations under Section 382 of the Internal Revenue Code of 1986, as amended. Management continues to evaluate fair value adjustments related to loans and premises acquired.

The following table presents the assets acquired and liabilities of Merchants assumed as of May 22, 2015 and their fair value estimates. The fair value adjustments shown in the following table continue to be evaluated by management and may be subject to further adjustment:

(Dollars in Thousands)	As Recorded by Merchants			Initial Fair Value Adjustments			Subsequent Fair Value Adjustments			As Recorded by Ameris
Assets
Cash and cash equivalents	$	7,527		$	-		$	-		$	7,527
Federal funds sold and interest-bearing balances		106,188			-			-			106,188
Investment securities		164,421			(553	)(a)		(639	)(j)		163,229
Other investments		872			-			(253	)(k)		619
Loans		199,955			(8,500	)(b)		-			191,455
Less allowance for loan losses		(3,354	)		3,354	(c)		-			-
Loans, net		196,601			(5,146	)		-			191,455
Other real estate owned		4,082			(1,115	)(d)		-			2,967
Premises and equipment		14,614			(3,680	)(e)		-			10,934
Intangible assets		-			4,577	(f)		(634	)(l)		3,943
Other assets		2,333			2,335	(g)		(1,109	)(m)		3,559
Total assets	$	496,638		$	(3,582	)	$	(2,635	)	$	490,421
Liabilities
Deposits:
Noninterest-bearing	$	121,708		$	-		$	-		$	121,708
Interest-bearing		286,112			-			41,588	(n)		327,700
Total deposits		407,820			-			-			449,408
Federal funds purchased and securities sold under agreements to repurchase		41,588			-			(41,588	)(n)		-
Other liabilities		2,151			81	(h)		-			2,232
Subordinated deferrable interest debentures		6,186			(2,680	)(i)		-			3,506
Total liabilities		457,745			(2,599	)		-			455,146
Net identifiable assets acquired over (under) liabilities assumed		38,893			(983	)		(2,635	)		35,275
Goodwill		-			12,090			2,635			14,725
Net assets acquired over (under) liabilities assumed	$	38,893		$	11,107		$	-		$	50,000
Consideration:
Cash exchanged for shares	$	50,000
Fair value of total consideration transferred	$	50,000

Explanation of fair value adjustments

(a)

Adjustment reflects the fair value adjustments of the portfolio of securities available for sale as of the acquisition date.

(b)

Adjustment reflects the fair value adjustments based on the Company’s evaluation of the acquired loan portfolio.

(c)

Adjustment reflects the elimination of Merchants’ allowance for loan losses.

(d)

Adjustment reflects the fair value adjustment based on the Company’s evaluation of the acquired OREO portfolio.

(e)

Adjustment reflects the fair value adjustment based on the Company’s evaluation of the acquired premises.

(f)

Adjustment reflects the recording of core deposit intangible on the acquired core deposit accounts.

(g)

(h)

Adjustment reflects the fair value adjustments based on the Company’s evaluation of interest rate swap liabilities.

(i)

Adjustment reflects the fair value adjustment to the subordinated deferrable interest debentures at the acquisition date.

(j)

Adjustment reflects the additional fair value adjustments of the portfolio of securities available for sale as of the acquisition date.

(k)

Adjustment reflects the fair value adjustments of other investments as of the acquisition date.

(l)

Adjustment reflects adjustment to the core deposit intangible on the acquired core deposit accounts.

(m)

Adjustment reflects the additional deferred taxes on the difference in the carrying values of acquired assets and assumed liabilities for financial reporting purposes and their basis for federal income tax purposes.

(n)

Subsequent to acquisition, the acquired securities sold under agreements to repurchase were converted to deposit accounts and are no longer reported as securities sold under agreements to repurchase on the Consolidated Balance Sheet as of December 31, 2015.

Goodwill of $14.7 million, which is the excess of the purchase price over the fair value of net assets acquired, was recorded in the Merchants acquisition and is the result of expected operational synergies and other factors. This goodwill is not expected to be deductible for tax purposes.

In the acquisition, the Company purchased $191.5 million of loans at fair value, net of $8.5 million, or 4.25%, estimated discount to the outstanding principal balance. Of the total loans acquired, management identified $11.2 million that were considered to be credit impaired and are accounted for under ASC Topic 310-30. The table below summarizes the total contractually required principal and interest cash payment, management’s estimate of expected total cash payments and fair value of the loans as of acquisition date for purchased credit impaired loans. Contractually required principal and interest payment have been adjusted for estimated prepayments.

Contractually required principal and interest	$	17,201
Non-accretable difference		(2,712	)
Cash flows expected to be collected		14,489
Accretable yield		(3,254	)
Total purchased credit-impaired loans acquired	$	11,235

The following table presents the acquired loan data for the Merchants acquisition.

	Fair Value of Acquired Loans at Acquisition Date		Gross Contractual Amounts Receivable at Acquisition Date		Best Estimate at Acquisition Date of Contractual Cash Flows Not Expected to be Collected
	(Dollars in Thousands)
Acquired receivables subject to ASC 310-30	$	11,235	$	14,086	$	2,712
Acquired receivables not subject to ASC 310-30	$	180,220	$	184,906	$	-

The results of operations of JAXB and Merchants subsequent to the respective acquisition dates are included in the Company’s consolidated statements of operations. The following unaudited pro forma information reflects the Company’s estimated consolidated results of operations as if the acquisitions had occurred on January 1, 2015, unadjusted for potential cost savings (in thousands).

	Three Months Ended March 31,
	2016		2015

Net interest income and noninterest income	$	78,798	$	64,931
Net income	$	13,052	$	12,195
Income per common share available to common stockholders – basic	$	0.38	$	0.37
Income per common share available to common stockholders – diluted	$	0.37	$	0.37
Average number of shares outstanding, basic		34,741		32,992
Average number of shares outstanding, diluted		35,043		33,345

A rollforward of purchased non-covered loans for the three months ended March 31, 2016, the year ended December 31, 2015 and the three months ended March 31, 2015 is shown below:

(Dollars in Thousands)	March 31, 2016			December 31, 2015			March 31, 2015
Balance, January 1	$	771,554		$	674,239		$	674,239
Charge-offs, net of recoveries		(317	)		(991	)		(244	)
Additions due to acquisitions		401,085			195,818			-
Accretion		2,647			10,590			3,111
Transfers to purchased non-covered other real estate owned		(1,243	)		(4,473	)		(1,094	)
Transfer from covered loans due to loss-share expiration		-			50,568			-
Payments received		(43,807	)		(154,666	)		(32,920	)
Other		-			469			-
Ending balance	$	1,129,919		$	771,554		$	643,092

The following is a summary of changes in the accretable discounts of purchased non-covered loans during the three months ended March 31, 2016, the year ended December 31, 2015 and the three months ended March 31, 2015:

(Dollars in Thousands)	March 31, 2016			December 31, 2015			March 31, 2015
Balance, January 1	$	24,785		$	25,716		$	25,716
Additions due to acquisitions		9,991			5,788			-
Accretion		(2,647	)		(10,590	)		(3,111	)
Transfer from covered loans due to loss-share expiration		-			1,665			-
Accretable discounts removed due to charge-offs		(11	)		(1,768	)		(1,380	)
Transfers between non-accretable and accretable discounts, net		353			3,974			(996	)
Ending balance	$	32,471		$	24,785		$	20,229

NOTE 3 – INVESTMENT SECURITIES

The Company’s investment policy blends the Company’s liquidity needs and interest rate risk management with its desire to increase income and provide funds for expected growth in loans. The investment securities portfolio consists primarily of U.S. government-sponsored mortgage-backed securities and agencies, state, county and municipal securities and corporate debt securities. The Company’s portfolio and investing philosophy concentrate activities in obligations where the credit risk is limited. For the small portion of the Company’s portfolio found to present credit risk, the Company has reviewed the investments and financial performance of the obligors and believes the credit risk to be acceptable.

The amortized cost and estimated fair value of investment securities available for sale at March 31, 2016, December 31, 2015 and March 31, 2015 are presented below:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(Dollars in Thousands)
March 31, 2016:
U.S. government agencies	$	7,592	$	45	$	(9	)	$	7,628
State, county and municipal securities		152,764		4,894		(125	)		157,533
Corporate debt securities		8,407		139		(24	)		8,522
Mortgage-backed securities		657,764		7,042		(1,386	)		663,420
Total debt securities	$	826,527	$	12,120	$	(1,544	)	$	837,103

December 31, 2015:
U.S. government agencies	$	14,959	$	-	$	(69	)	$	14,890
State, county and municipal securities		157,681		4,046		(411	)		161,316
Corporate debt securities		5,900		145		(28	)		6,017
Mortgage-backed securities		599,721		3,945		(2,704	)		600,962
Total debt securities	$	778,261	$	8,136	$	(3,212	)	$	783,185

March 31, 2015:
U.S. government agencies	$	14,954	$	72	$	(42	)	$	14,984
State, county and municipal securities		154,499		4,800		(235	)		159,064
Corporate debt securities		10,794		193		(52	)		10,935
Mortgage-backed securities		420,497		6,185		(1,335	)		425,347
Total debt securities	$	600,744	$	11,250	$	(1,664	)	$	610,330

The amortized cost and fair value of available-for-sale securities at March 31, 2016 by contractual maturity are summarized in the table below. Expected maturities for mortgage-backed securities may differ from contractual maturities because in certain cases borrowers can prepay obligations without prepayment penalties. Therefore, these securities are shown separately in the following maturity summary.

	Amortized Cost		Fair Value
	(Dollars in Thousands)
Due in one year or less	$	4,028	$	4,060
Due from one year to five years		52,090		53,677
Due from five to ten years		51,887		53,967
Due after ten years		60,758		61,979
Mortgage-backed securities		657,764		663,420
	$	826,527	$	837,103

Securities with a carrying value of approximately $493.0 million serve as collateral to secure public deposits and for other purposes required or permitted by law at March 31, 2016, compared with $551.0 million and $426.6 million at December 31, 2015 and March 31, 2015, respectively.

The following table details the gross unrealized losses and fair value of securities aggregated by category and duration of the continuous unrealized loss position at March 31, 2016, December 31, 2015 and March 31, 2015.

	Less Than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(Dollars in Thousands)
March 31, 2016:
U.S. government agencies	$	4,991	$	(9	)	$	-	$	-		$	4,991	$	(9	)
State, county and municipal securities		5,845		(96	)		1,639		(29	)		7,484		(125	)
Corporate debt securities		883		(24	)		-		-			883		(24	)
Mortgage-backed securities		142,687		(975	)		24,762		(411	)		167,449		(1,386	)
Total debt securities	$	154,406	$	(1,104	)	$	26,401	$	(440	)	$	180,807	$	(1,544	)

December 31, 2015:
U.S. government agencies	$	9,932	$	(27	)	$	4,958	$	(42	)	$	14,890	$	(69	)
State, county and municipal securities		19,293		(199	)		11,557		(212	)		30,850		(411	)
Corporate debt securities		1,383		(28	)		-		-			1,383		(28	)
Mortgage-backed securities		263,281		(1,950	)		29,950		(754	)		293,231		(2,704	)
Total debt securities	$	293,889	$	(2,204	)	$	46,465	$	(1,008	)	$	340,354	$	(3,212	)

March 31, 2015:
U.S. government agencies	$	-	$	-		$	4,958	$	(42	)	$	4,958	$	(42	)
State, county and municipal securities		4,675		(34	)		10,579		(201	)		15,254		(235	)
Corporate debt securities		5,007		(52	)		-		-			5,007		(52	)
Mortgage-backed securities		46,361		(378	)		31,483		(957	)		77,844		(1,335	)
Total debt securities	$	56,043	$	(464	)	$	47,020	$	(1,200	)	$	103,063	$	(1,664	)

As of March 31, 2016, the Company’s security portfolio consisted of 406 securities, 55 of which were in an unrealized loss position. The majority of unrealized losses are related to the Company’s mortgage-backed and state, county and municipal securities, as discussed below.

At March 31, 2016, the Company held 46 mortgage-backed securities that were in an unrealized loss position, all of which were issued by U.S. government-sponsored entities and agencies. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at March 31, 2016.

At March 31, 2016, the Company held six state, county and municipal securities, one U.S. government-sponsored agency security, and two corporate securities that were in an unrealized loss position. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at March 31, 2016. During the first three months of 2016 and 2015, the Company received timely and current interest and principal payments on all of the securities classified as corporate debt securities. The Company’s investments in subordinated debt include investments in regional and super-regional banks on which the Company prepares regular analysis through review of financial information and credit ratings. Investments in preferred securities are also concentrated in the preferred obligations of regional and super-regional banks through non-pooled investment structures. The Company did not have investments in “pooled” trust preferred securities at March 31, 2016, December 31, 2015 or March 31, 2015.

Management and the Company’s Asset and Liability Committee (the “ALCO Committee”) evaluate securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. While the majority of the unrealized losses on debt securities relate to changes in interest rates, corporate debt securities have also been affected by reduced levels of liquidity and higher risk premiums. Occasionally, management engages independent third parties to evaluate the Company’s position in certain corporate debt securities to aid management and the ALCO Committee in its determination regarding the status of impairment. The Company believes that each investment poses minimal credit risk and further, that the Company does not intend to sell these investment securities at an unrealized loss position at March 31, 2016, and it is more likely than not that the Company will not be required to sell these securities prior to recovery or maturity. Therefore, at March 31, 2016, these investments are not considered impaired on an other-than-temporary basis.

At March 31, 2016, December 31, 2015 and March 31, 2015, all of the Company’s mortgage-backed securities were obligations of government-sponsored agencies.

The following table is a summary of sales activities in the Company’s investment securities available for sale for the three months ended March 31, 2016, year ended December 31, 2015 and three months ended March 31, 2015:

	March 31, 2016			December 31, 2015			March 31, 2015
	(Dollars in Thousands)
Gross gains on sales of securities	$	312		$	396		$	31
Gross losses on sales of securities		(218	)		(259	)		(19	)
Net realized gains on sales of securities available for sale	$	94		$	137		$	12
Sales proceeds	$	41,564		$	72,528		$	5,118

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 also purchased loan pools during 2015 and 2016 collateralized by properties located outside our Southeast markets, specifically in California, Washington and Illinois. 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. In addition, a substantial portion of the OREO is located in those same markets. Accordingly, the ultimate collectability of a substantial portion of the Bank’s loan portfolio and the recovery of a substantial portion of the carrying amount of OREO are susceptible to changes in real estate conditions in the Bank’s primary market area.

Commercial, financial and agricultural loans include both secured and unsecured loans for working capital, expansion, crop production, and other business purposes, including SBA guaranteed loans. Short-term working capital loans are secured by non-real estate collateral such as accounts receivable, crops, inventory and equipment. The Bank evaluates the financial strength, cash flow, management, credit history of the borrower and the quality of the collateral securing the loan. The Bank often requires personal guarantees and secondary sources of repayment on commercial, financial and agricultural loans.

Real estate loans include construction and development loans, commercial and farmland loans and residential loans. Construction and development loans include loans for the development of residential neighborhoods, one-to-four family home residential construction loans to builders and consumers, and commercial real estate construction loans, primarily for owner-occupied properties. The Company limits its construction lending risk through adherence to established underwriting procedures. Commercial real estate loans include loans secured by owner-occupied commercial buildings for office, storage, retail, farmland and warehouse space. They also include non-owner occupied commercial buildings such as leased retail and office space. Commercial real estate loans may be larger in size and may involve a greater degree of risk than one-to-four family residential mortgage loans. Payments on such loans are often dependent on successful operation or management of the properties. Residential loans represent permanent mortgage financing and are secured by residential properties located within the Bank's market areas, along with warehouse lines of credit secured by residential mortgages.

Consumer installment loans and other loans include automobile loans, boat and recreational vehicle financing, and both secured and unsecured personal loans. Consumer loans carry greater risks than other loans, as the collateral can consist of rapidly depreciating assets such as automobiles and equipment that may not provide an adequate source of repayment of the loan in the case of default.

Loans are stated at unpaid balances, net of unearned income and deferred loan fees. Balances within the major loan categories are presented in the following table:

(Dollars in Thousands)	March 31, 2016		December 31, 2015		March 31, 2015
Commercial, financial and agricultural	$	434,073	$	449,623	$	334,917
Real estate – construction and development		264,820		244,693		178,568
Real estate – commercial and farmland		1,154,887		1,104,991		947,274
Real estate – residential		629,138		570,430		496,043
Consumer installment		31,901		31,125		29,113
Other		13,188		6,015		13,505
	$	2,528,007	$	2,406,877	$	1,999,420

Purchased non-covered loans are defined as loans that were acquired in bank acquisitions that are not covered, or are no longer covered, by a loss-sharing agreement with the Federal Deposit Insurance Corporation (“FDIC”). Purchased non-covered loans totaling $1.13 billion, $771.6 million and $643.1 million at March 31, 2016, December 31, 2015 and March 31, 2015, respectively, are not included in the above schedule.

Purchased non-covered loans are shown below according to major loan type as of the end of the periods shown:

(Dollars in Thousands)	March 31, 2016		December 31, 2015		March 31, 2015
Commercial, financial and agricultural	$	111,537	$	45,462	$	36,258
Real estate – construction and development		103,753		72,080		53,668
Real estate – commercial and farmland		598,935		390,755		291,760
Real estate – residential		309,770		258,153		257,216
Consumer installment		5,924		5,104		4,190
	$	1,129,919	$	771,554	$	643,092

Purchased loan pools are defined as groups of loans that were not acquired in bank acquisitions or FDIC-assisted transactions. As of March 31, 2016, purchased loan pools totaled $656.7 million and consisted of whole-loan, adjustable rate residential mortgages on properties outside the Company’s markets, with principal balances totaling $644.3 million and $12.4 million of remaining purchase premium paid at acquisition. As of December 31, 2015, purchased loan pools totaled $593.0 million and consisted of whole-loan, adjustable rate residential mortgages on properties outside the Company’s markets, with principal balances totaling $580.7 million and $12.3 million of purchase premium paid at acquisition. The Company did not have any purchased loan pools at March 31, 2015. At March 31, 2016 and December 31, 2015, all loans included in the purchased loan pools were performing current loans, all risk-rated grade 20. At March 31, 2016 and December 31, 2015, the Company had allocated $1.3 million and $581,000, respectively, of allowance for loan losses for the purchased loan pools. As part of the due diligence process prior to purchasing an individual mortgage pool, a complete re-underwrite of the individual loan files was conducted. The underwriting process included a review of all income, asset, credit and property related documentation that was used to originate the loan. Underwriters utilized the originating lender’s program guidelines, as well as general prudent mortgage lending standards, to assess each individual loan file. Additional research was conducted to assess the real estate market conditions and market expectations in the geographic areas where a collateral concentration existed. As part of this review, an automated valuation model was employed to provide current collateral valuations and to support individual loan-to-value ratios. Additionally, a sample of site inspections was completed to provide further assurance. The results of the due diligence review were evaluated by officers of the Company in order to determine overall conformance to the Bank’s credit and lending policies.

Covered loans are defined as loans that were acquired in FDIC-assisted transactions and are still covered by a loss-sharing agreement with the FDIC. Covered loans totaling $130.3 million, $137.5 million and $245.7 million at March 31, 2016, December 31, 2015 and March 31, 2015, respectively, are not included in the above schedules.

Covered loans are shown below according to loan type as of the end of the periods shown:

(Dollars in Thousands)	March 31, 2016		December 31, 2015		March 31, 2015
Commercial, financial and agricultural	$	4,739	$	5,546	$	20,905
Real estate – construction and development		7,205		7,612		19,519
Real estate – commercial and farmland		67,055		71,226		130,290
Real estate – residential		51,176		53,038		74,847
Consumer installment		104		107		184
	$	130,279	$	137,529	$	245,745

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. 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, excluding purchased non-covered and covered loans:

(Dollars in Thousands)	March 31, 2016		December 31, 2015		March 31, 2015
Commercial, financial and agricultural	$	1,266	$	1,302	$	1,015
Real estate – construction and development		1,776		1,812		3,286
Real estate – commercial and farmland		7,067		7,019		7,893
Real estate – residential		5,191		6,278		8,246
Consumer installment		400		449		401
	$	15,700	$	16,860	$	20,841

The following table presents an analysis of purchased non-covered loans accounted for on a nonaccrual basis:

(Dollars in Thousands)	March 31, 2016		December 31, 2015		March 31, 2015
Commercial, financial and agricultural	$	660	$	1,064	$	198
Real estate – construction and development		1,620		1,106		785
Real estate – commercial and farmland		10,895		4,920		9,096
Real estate – residential		5,925		6,168		7,202
Consumer installment		87		72		27
	$	19,187	$	13,330	$	17,308

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

(Dollars in Thousands)	March 31, 2016		December 31, 2015		March 31, 2015
Commercial, financial and agricultural	$	2,799	$	2,803	$	8,404
Real estate – construction and development		1,537		1,701		6,262
Real estate – commercial and farmland		5,265		5,034		17,000
Real estate – residential		3,694		3,663		6,606
Consumer installment		36		37		87
	$	13,331	$	13,238	$	38,359

The following table presents an analysis of past due loans, excluding purchased non-covered and covered loans, as of March 31, 2016, December 31, 2015 and March 31, 2015:

	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
	(Dollars in Thousands)
As of March 31, 2016:
Commercial, financial & agricultural	$	1,161	$	633	$	870	$	2,664	$	431,409	$	434,073	$	-
Real estate – construction & development		793		709		1,476		2,978		261,842		264,820		-
Real estate – commercial & farmland		1,015		539		6,955		8,509		1,146,378		1,154,887		-
Real estate – residential		6,078		1,084		4,176		11,338		617,800		629,138		-
Consumer installment loans		399		92		291		782		31,119		31,901		-
Other		-		-		-		-		13,188		13,188		-
Total	$	9,446	$	3,057	$	13,768	$	26,271	$	2,501,736	$	2,528,007	$	-

	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
	(Dollars in Thousands)
As of December 30, 2015:
Commercial, financial & agricultural	$	568	$	271	$	835	$	1,674	$	447,949	$	449,623	$	-
Real estate – construction & development		1,413		261		1,739		3,413		241,280		244,693		-
Real estate – commercial & farmland		1,781		641		6,912		9,334		1,095,657		1,104,991		-
Real estate – residential		3,806		2,120		5,121		11,047		559,383		570,430		-
Consumer installment loans		374		188		238		800		30,325		31,125		-
Other		-		-		-		-		6,015		6,015		-
Total	$	7,942	$	3,481	$	14,845	$	26,268	$	2,380,609	$	2,406,877	$	-

	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
	(Dollars in Thousands)
As of March 31, 2015:
Commercial, financial & agricultural	$	1,258	$	2,821	$	984	$	5,063	$	329,854	$	334,917	$	-
Real estate – construction & development		404		240		3,205		3,849		174,719		178,568		-
Real estate – commercial & farmland		6,398		1,285		7,732		15,415		931,859		947,274		-
Real estate – residential		4,430		1,879		7,569		13,878		482,165		496,043		-
Consumer installment loans		367		136		256		759		28,354		29,113		-
Other		-		-		-		-		13,505		13,505		-
Total	$	12,857	$	6,361	$	19,746	$	38,964	$	1,960,456	$	1,999,420	$	-

The following table presents an analysis of purchased non-covered past-due loans as of March 31, 2016, December 31, 2015 and March 31, 2015:

	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
	(Dollars in Thousands)
As of March 31, 2016:
Commercial, financial & agricultural	$	172	$	73	$	445	$	690	$	110,847	$	111,537	$	-
Real estate – construction & development		1,481		32		1,149		2,662		101,091		103,753		-
Real estate – commercial & farmland		2,204		488		9,126		11,818		587,117		598,935		-
Real estate – residential		2,951		2,172		4,652		9,775		299,995		309,770		-
Consumer installment loans		4		-		66		70		5,854		5,924		-
Total	$	6,812	$	2,765	$	15,438	$	25,015	$	1,104,904	$	1,129,919	$	-

	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
	(Dollars in Thousands)
As of December 30, 2015:
Commercial, financial & agricultural	$	248	$	13	$	846	$	1,107	$	44,355	$	45,462	$	-
Real estate – construction & development		416		687		420		1,523		70,557		72,080		-
Real estate – commercial & farmland		2,479		1,629		3,347		7,455		383,300		390,755		-
Real estate – residential		4,965		2,176		4,928		12,069		246,084		258,153		-
Consumer installment loans		31		9		70		110		4,994		5,104		-
Total	$	8,139	$	4,514	$	9,611	$	22,264	$	749,290	$	771,554	$	-

	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
	(Dollars in Thousands)
As of March 31, 2015:
Commercial, financial & agricultural	$	216	$	-	$	85	$	301	$	35,957	$	36,258	$	-
Real estate – construction & development		393		17		766		1,176		52,492		53,668		-
Real estate – commercial & farmland		1,611		831		8,495		10,937		280,823		291,760		-
Real estate – residential		3,113		2,454		6,490		12,057		245,159		257,216		-
Consumer installment loans		100		-		19		119		4,071		4,190		-
Total	$	5,433	$	3,302	$	15,855	$	24,590	$	618,502	$	643,092	$	-

The following table presents an analysis of covered past-due loans as of March 31, 2016, December 31, 2015 and March 31, 2015:

	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
	(Dollars in Thousands)
As of March 31, 2016:
Commercial, financial & agricultural	$	75	$	-	$	2,757	$	2,832	$	1,907	$	4,739	$	-
Real estate – construction & development		87		-		1,471		1,558		5,647		7,205		-
Real estate – commercial & farmland		744		50		2,736		3,530		63,525		67,055		-
Real estate – residential		1,532		805		2,580		4,917		46,259		51,176		-
Consumer installment loans		-		-		36		36		68		104		-
Total	$	2,438	$	855	$	9,580	$	12,873	$	117,406	$	130,279	$	-

	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
	(Dollars in Thousands)
As of December 30, 2015:
Commercial, financial & agricultural	$	-	$	-	$	2,802	$	2,802	$	2,744	$	5,546	$	-
Real estate – construction & development		96		-		1,633		1,729		5,883		7,612		-
Real estate – commercial & farmland		170		205		3,064		3,439		67,787		71,226		-
Real estate – residential		2,155		1,001		2,658		5,814		47,224		53,038		-
Consumer installment loans		-		-		37		37		70		107		-
Total	$	2,421	$	1,206	$	10,194	$	13,821	$	123,708	$	137,529	$	-

	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
	(Dollars in Thousands)
As of March 31, 2015:
Commercial, financial & agricultural	$	165	$	225	$	1,776	$	2,166	$	18,739	$	20,905	$	-
Real estate – construction & development		455		-		5,605		6,060		13,459		19,519		-
Real estate – commercial & farmland		2,364		1,150		11,063		14,577		115,713		130,290		-
Real estate – residential		2,293		1,019		4,999		8,310		66,536		74,847		-
Consumer installment loans		-		-		87		87		97		184		-
Total	$	5,277	$	2,394	$	23,530	$	31,201	$	214,544	$	245,745	$	-

Impaired Loans

Loans are considered impaired when, based on current information and events, it is probable the Company will 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 will be unable to collect all principal and interest payments due in accordance with the contractual terms of the loan agreement, the Company considers the borrower’s capacity to pay, which includes 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 assesses for impairment all nonaccrual loans greater than $125,000 and all troubled debt restructurings greater than $100,000. The tables below include all loans deemed impaired, whether or not individually assessed for impairment. If a loan is deemed impaired, a specific valuation allowance is allocated, if necessary, so that the loan is 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 is expected solely from the collateral. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis.

The following is a summary of information pertaining to impaired loans, excluding purchased non-covered and covered loans:

	As of and For the Period Ended
	March 31, 2016		December 31, 2015		March 31, 2015
	(Dollars in Thousands)
Nonaccrual loans	$	15,700	$	16,860	$	20,841
Troubled debt restructurings not included above		14,385		14,418		12,935
Total impaired loans	$	30,085	$	31,278	$	33,776

Interest income recognized on impaired loans	$	318	$	909	$	168
Foregone interest income on impaired loans	$	242	$	1,204	$	109

The following table presents an analysis of information pertaining to impaired loans, excluding purchased non-covered and covered loans as of March 31, 2016, December 31, 2015 and March 31, 2015:

	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
	(Dollars in Thousands)
As of March 31, 2016:
Commercial, financial & agricultural	$	3,150	$	339	$	1,206	$	1,545	$	408	$	1,544
Real estate – construction & development		3,278		230		2,022		2,252		742		2,428
Real estate – commercial & farmland		14,530		5,142		7,870		13,012		874		12,898
Real estate – residential		13,976		1,662		11,177		12,839		2,223		13,345
Consumer installment loans		519		-		437		437		7		466
Total	$	35,453	$	7,373	$	22,712	$	30,085	$	4,254	$	30,681

	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
	(Dollars in Thousands)
As of December 31, 2015:
Commercial, financial & agricultural	$	3,062	$	158	$	1,385	$	1,543	$	135	$	2,275
Real estate – construction & development		3,581		230		2,374		2,604		774		3,228
Real estate – commercial & farmland		14,385		6,702		6,083		12,785		1,067		15,105
Real estate – residential		15,809		1,621		12,230		13,851		2,224		11,977
Consumer installment loans		592		-		495		495		9		488
Total	$	37,429	$	8,711	$	22,567	$	31,278	$	4,209	$	33,073

	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
	(Dollars in Thousands)
As of March 31, 2015:
Commercial, financial & agricultural	$	2,378	$	5	$	1,287	$	1,292	$	240	$	1,627
Real estate – construction & development		7,397		274		3,801		4,075		667		4,264
Real estate – commercial & farmland		16,980		3,280		11,922		15,202		2,127		14,909
Real estate – residential		14,181		1,592		11,166		12,758		1,869		12,833
Consumer installment loans		548		-		449		449		6		491
Total	$	41,484	$	5,151	$	28,625	$	33,776	$	4,909	$	34,124

The following is a summary of information pertaining to purchased non-covered impaired loans:

	As of and For the Period Ended
	March 31, 2016		December 31, 2015		March 31, 2015
	(Dollars in Thousands)
Nonaccrual loans	$	19,187	$	13,330	$	17,308
Troubled debt restructurings not included above		9,193		9,373		1,526
Total impaired loans	$	28,380	$	22,703	$	18,834

Interest income recognized on impaired loans	$	357	$	785	$	18
Foregone interest income on impaired loans	$	356	$	1,365	$	21

The following table presents an analysis of information pertaining to impaired purchased non-covered loans as of March 31, 2016, December 31, 2015 and March 31, 2015:

	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
	(Dollars in Thousands)
As of March 31, 2016:
Commercial, financial & agricultural	$	2,632	$	236	$	426	$	662	$	-	$	864
Real estate – construction & development		3,599		892		1,237		2,129		2		1,799
Real estate – commercial & farmland		15,358		8,480		8,694		17,174		182		14,154
Real estate – residential		9,774		1,648		6,675		8,323		270		8,640
Consumer installment loans		87		92		-		92		-		85
Total	$	31,450	$	11,348	$	17,032	$	28,380	$	454	$	25,542

	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
	(Dollars in Thousands)
As of December 31, 2015:
Commercial, financial & agricultural	$	3,103	$	1,066	$	-	$	1,066	$	-	$	392
Real estate – construction & development		8,987		1,469		-		1,469		-		1,429
Real estate – commercial & farmland		14,999		11,134		-		11,134		-		10,806
Real estate – residential		14,946		8,957		-		8,957		-		8,067
Consumer installment loans		94		77		-		77		-		65
Total	$	42,129	$	22,703	$	-	$	22,703	$	-	$	20,759

	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
	(Dollars in Thousands)
As of March 31, 2015:
Commercial, financial & agricultural	$	1,331	$	198	$	-	$	198	$	-	$	187
Real estate – construction & development		2,153		1,113		-		1,113		-		1,275
Real estate – commercial & farmland		13,911		9,816		-		9,816		-		10,202
Real estate – residential		12,183		7,679		-		7,679		-		7,435
Consumer installment loans		38		28		-		28		-		50
Total	$	29,616	$	18,834	$	-	$	18,834	$	-	$	19,148

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

	As of and For the Period Ended
	March 31, 2016		December 31, 2015		March 31, 2015
	(Dollars in Thousands)
Nonaccrual loans	$	13,331	$	13,238	$	38,359
Troubled debt restructurings not included above		12,308		13,283		20,721
Total impaired loans	$	25,639	$	26,521	$	59,080

Interest income recognized on impaired loans	$	185	$	886	$	220
Foregone interest income on impaired loans	$	170	$	1,596	$	130

The following table presents an analysis of information pertaining to impaired covered loans as of March 31, 2016, December 31, 2015 and March 31, 2015:

	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
	(Dollars in Thousands)
As of March 31, 2016:
Commercial, financial & agricultural	$	4,842	$	-	$	3,107	$	3,107	$	111	$	2,801
Real estate – construction & development		8,347		-		2,354		2,354		84		2,403
Real estate – commercial & farmland		10,264		-		6,712		6,712		168		6,789
Real estate – residential		15,457		4,167		9,256		13,423		166		14,042
Consumer installment loans		51		43		-		43		-		45
Total	$	38,961	$	4,210	$	21,429	$	25,639	$	529	$	26,080

	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
	(Dollars in Thousands)
As of December 31, 2015:
Commercial, financial & agricultural	$	5,188	$	2,802	$	-	$	2,802	$	-	$	7,408
Real estate – construction & development		15,119		2,480		-		2,480		-		6,906
Real estate – commercial & farmland		20,508		7,001		-		7,001		-		18,504
Real estate – residential		15,830		14,192		-		14,192		-		16,010
Consumer installment loans		60		46		-		46		-		86
Total	$	56,705	$	26,521	$	-	$	26,521	$	-	$	48,914

	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment
	(Dollars in Thousands)
As of March 31, 2015:
Commercial, financial & agricultural	$	13,512	$	8,407	$	-	$	8,407	$	-	$	8,495
Real estate – construction & development		24,503		9,080		-		9,080		-		9,859
Real estate – commercial & farmland		35,493		23,462		-		23,462		-		22,062
Real estate – residential		23,585		18,042		-		18,042		-		18,048
Consumer installment loans		119		89		-		89		-		92
Total	$	97,212	$	59,080	$	-	$	59,080	$	-	$	58,556

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

Grade 15 – Good Credit – This grade includes loans that exhibit one or more characteristics better than that of a Satisfactory Credit. Generally, debt service coverage and borrower’s liquidity is materially better than required by the Company’s loan policy.

Grade 20 – Satisfactory Credit – This grade is assigned to loans to borrowers who exhibit satisfactory credit histories, contain acceptable loan structures and demonstrate ability to repay.

Grade 23 – Performing, Under-Collateralized 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.

Grade 25 – Minimum Acceptable Credit – This grade includes loans which exhibit all the characteristics of a Satisfactory 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 30 – Other Asset 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 40 – 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 50 – 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 60 – 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 loss 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, excluding purchased non-covered and covered loans, by risk grade as of March 31, 2016:

Risk Grade	Commercial, financial & agricultural		Real estate - construction & development		Real estate - commercial & farmland		Real estate - residential		Consumer installment loans		Other		Total
	(Dollars in Thousands)
10	$	243,355	$	-	$	2,316	$	1,479	$	7,053	$	-	$	254,203
15		22,705		4,170		112,167		73,341		1,127		-		213,510
20		90,196		58,014		729,346		434,434		20,872		13,188		1,346,050
23		581		7,414		10,040		6,813		199		-		25,047
25		72,557		188,385		275,297		89,834		1,969		-		628,042
30		1,908		3,829		10,517		5,730		157		-		22,141
40		2,771		3,008		15,204		17,507		523		-		39,013
50		-		-		-		-		-		-		-
60		-		-		-		-		1		-		1
Total	$	434,073	$	264,820	$	1,154,887	$	629,138	$	31,901	$	13,188	$	2,528,007

The following table presents the loan portfolio, excluding purchased non-covered and covered loans, by risk grade as of December 31, 2015:

Risk Grade	Commercial, financial & agricultural		Real estate - construction & development		Real estate - commercial & farmland		Real estate - residential		Consumer installment loans		Other		Total
	(Dollars in Thousands)
10	$	241,721	$	294	$	116	$	1,606	$	6,872	$	-	$	250,609
15		28,420		2,074		117,880		78,165		1,191		-		227,730
20		97,142		46,221		685,538		369,624		19,780		6,015		1,224,320
23		559		7,827		13,073		6,112		36		-		27,607
25		77,829		183,512		254,012		91,465		2,595		-		609,413
30		1,492		1,620		13,821		7,347		143		-		24,423
40		2,460		3,145		20,551		16,111		506		-		42,773
50		-		-		-		-		-		-		-
60		-		-		-		-		2		-		2
Total	$	449,623	$	244,693	$	1,104,991	$	570,430	$	31,125	$	6,015	$	2,406,877

The following table presents the loan portfolio, excluding purchased non-covered and covered loans, by risk grade as of March 31, 2015:

Risk Grade	Commercial, financial & agricultural		Real estate - construction & development		Real estate - commercial & farmland		Real estate - residential		Consumer installment loans		Other		Total
	(Dollars in Thousands)
10	$	147,820	$	1,751	$	152	$	1,727	$	6,011	$	-	$	157,461
15		24,619		3,504		119,032		57,583		1,191		-		205,929
20		90,407		47,148		541,490		303,463		16,720		13,505		1,012,733
23		981		8,521		11,934		7,141		66		-		28,643
25		60,018		110,570		238,026		100,175		4,222		-		513,011
30		3,911		1,890		11,364		8,007		289		-		25,461
40		7,161		5,184		25,276		17,947		610		-		56,178
50		-		-		-		-		4		-		4
60		-		-		-		-		-		-		-
Total	$	334,917	$	178,568	$	947,274	$	496,043	$	29,113	$	13,505	$	1,999,420

The following table presents the purchased non-covered loan portfolio by risk grade as of March 31, 2016:

Risk Grade	Commercial, financial & agricultural		Real estate - construction & development		Real estate - commercial & farmland		Real estate - residential		Consumer installment loans		Other		Total
	(Dollars in Thousands)
10	$	9,306	$	-	$	-	$	138	$	1,061	$	-	$	10,505
15		1,206		1,135		9,302		35,904		682		-		48,229
20		20,666		13,477		188,912		119,213		2,211		-		344,479
23		-		4,334		9,773		13,338		-		-		27,445
25		73,016		73,700		343,928		115,422		1,772		-		607,838
30		5,308		7,948		25,615		11,613		33		-		50,517
40		2,003		3,159		21,405		14,142		165		-		40,874
50		30		-		-		-		-		-		30
60		2		-		-		-		-		-		2
Total	$	111,537	$	103,753	$	598,935	$	309,770	$	5,924	$	-	$	1,129,919

The following table presents the purchased non-covered loan portfolio by risk grade as of December 31, 2015:

Risk Grade	Commercial, financial & agricultural		Real estate - construction & development		Real estate - commercial & farmland		Real estate - residential		Consumer installment loans		Other		Total
	(Dollars in Thousands)
10	$	8,592	$	-	$	-	$	-	$	1,010	$	-	$	9,602
15		1,186		1,143		10,490		37,808		541		-		51,168
20		10,057		13,678		183,219		128,005		2,031		-		336,990
23		-		438		5,177		6,414		-		-		12,029
25		17,565		47,517		162,253		66,166		1,328		-		294,829
30		6,657		4,185		14,297		5,503		51		-		30,693
40		1,373		5,119		15,319		14,257		143		-		36,211
50		30		-		-		-		-		-		30
60		2		-		-		-		-		-		2
Total	$	45,462	$	72,080	$	390,755	$	258,153	$	5,104	$	-	$	771,554

The following table presents the purchased non-covered loan portfolio by risk grade as of March 31, 2015:

Risk Grade	Commercial, financial & agricultural		Real estate - construction & development		Real estate - commercial & farmland		Real estate - residential		Consumer installment loans		Other		Total
	(Dollars in Thousands)
10	$	6,696	$	-	$	-	$	289	$	459	$	-	$	7,444
15		995		641		9,396		12,136		472		-		23,640
20		13,751		13,746		115,359		62,056		1,568		-		206,480
23		73		-		3,174		6,777		-		-		10,024
25		12,585		31,512		136,581		155,187		1,521		-		337,386
30		958		3,564		9,404		8,332		65		-		22,323
40		1,170		4,205		17,846		12,417		105		-		35,743
50		30		-		-		22		-		-		52
60		-		-		-		-		-		-		-
Total	$	36,258	$	53,668	$	291,760	$	257,216	$	4,190	$	-	$	643,092

The following table presents the covered loan portfolio by risk grade as of March 31, 2016:

Risk Grade	Commercial, financial & agricultural		Real estate - construction & development		Real estate - commercial & farmland		Real estate - residential		Consumer installment loans		Other		Total
	(Dollars in Thousands)
10	$	-	$	-	$	-	$	-	$	-	$	-	$	-
15		-		-		-		-		-		-		-
20		47		770		10,443		9,635		-		-		20,895
23		25		-		1,797		5,024		-		-		6,846
25		1,932		3,704		37,276		23,388		11		-		66,311
30		4		823		3,003		4,338		48		-		8,216
40		2,731		1,908		14,536		8,791		45		-		28,011
50		-		-		-		-		-		-		-
60		-		-		-		-		-		-		-
Total	$	4,739	$	7,205	$	67,055	$	51,176	$	104	$	-	$	130,279

The following table presents the covered loan portfolio by risk grade as of December 31, 2015:

Risk Grade	Commercial, financial & agricultural		Real estate - construction & development		Real estate - commercial & farmland		Real estate - residential		Consumer installment loans		Other		Total
	(Dollars in Thousands)
10	$	-	$	-	$	-	$	-	$	-	$	-	$	-
15		-		-		-		-		-		-		-
20		93		800		11,698		10,040		-		-		23,631
23		52		-		2,957		5,723		-		-		8,732
25		2,594		3,907		38,741		24,345		11		-		69,598
30		5		828		2,857		4,552		-		-		8,242
40		2,802		2,077		14,973		8,378		96		-		28,326
50		-		-		-		-		-		-		-
60		-		-		-		-		-		-		-
Total	$	5,546	$	7,612	$	71,226	$	53,038	$	107	$	-	$	137,529

The following table presents the covered loan portfolio by risk grade as of March 31, 2015:

Risk Grade	Commercial, financial & agricultural		Real estate - construction & development		Real estate - commercial & farmland		Real estate - residential		Consumer installment loans		Other		Total
	(Dollars in Thousands)
10	$	-	$	-	$	-	$	-	$	-	$	-	$	-
15		667		1,847		734		522		-		-		3,770
20		75		458		21,010		13,353		51		-		34,947
23		4,481		8,567		6,382		6,130		-		-		25,560
25		5,094		2,594		69,536		36,510		37		-		113,771
30		10,588		6,053		4,053		5,893		9		-		26,596
40		-		-		28,575		12,439		87		-		41,101
50		-		-		-		-		-		-		-
60		-		-		-		-		-		-		-
Total	$	20,905	$	19,519	$	130,290	$	74,847	$	184	$	-	$	245,745

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, 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 2016 and 2015 totaling $36.8 million and $32.0 million, respectively, under such parameters

As of March 31, 2016, December 31, 2015 and March 31, 2015, the Company had a balance of $17.5 million, $16.4 million and $13.9 million, respectively, in troubled debt restructurings, excluding purchased non-covered and covered loans. The Company has recorded $1.2 million, $1.3 million and $1.6 million in previous charge-offs on such loans at March 31, 2016, December 31, 2015 and March 31, 2015, respectively. The Company’s balance in the allowance for loan losses allocated to such troubled debt restructurings was $2.7 million, $2.7 million and $1.6 million at March 31, 2016, December 31, 2015 and March 31, 2015, respectively. At March 31, 2016, 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 ending March 31, 2016 and 2015, the Company modified loans as troubled debt restructurings, excluding purchased non-covered and covered loans, with principal balances of $1.7 million and $2.7 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, excluding purchased non-covered and covered loans, which occurred during the three months ending March 31, 2016 and 2015:

	March 31, 2016				March 31, 2015
Loan class:	#		Balance (in thousands)		#		Balance (in thousands)
Commercial, financial & agricultural		1	$	12		-	$	-
Real estate – construction & development		-		-		-		-
Real estate – commercial & farmland		2		1,605		2		2,015
Real estate – residential		1		60		7		666
Consumer installment		-		-		3		17
Total		4	$	1,676		12	$	2,698

Troubled debt restructurings, excluding purchased non-covered and covered loans, with an outstanding balance of $793,000 and $1.5 million defaulted during the three months ended March 31, 2016 and 2015, respectively, and these defaults did not have a material impact on the Company’s allowance for loan loss. The following table presents the troubled debt restructurings by class that defaulted (defined as 30 days past due) during the three months ending March 31, 2016 and 2015:

	March 31, 2016				March 31, 2015
Loan class:	#		Balance (in thousands)		#		Balance (in thousands)
Commercial, financial & agricultural		2	$	7		1	$	5
Real estate – construction & development		1		18		-		-
Real estate – commercial & farmland		1		194		3		746
Real estate – residential		9		563		6		748
Consumer installment		1		11		4		20
Total		14	$	793		14	$	1,519

The following table presents the amount of troubled debt restructurings by loan class, excluding purchased non-covered and covered loans, classified separately as accrual and nonaccrual at March 31, 2016, December 31, 2015 and March 31, 2015:

As of March 31, 2016	Accruing Loans				Non-Accruing Loans
Loan class:	#		Balance *(in thousands)*		#		Balance *(in thousands)*
Commercial, financial & agricultural		5	$	279		10	$	75
Real estate – construction & development		9		476		2		30
Real estate – commercial & farmland		17		5,945		3		1,871
Real estate – residential		52		7,648		19		1,040
Consumer installment		10		37		21		87
Total		93	$	14,385		55	$	3,103

As of December 31, 2015	Accruing Loans				Non-Accruing Loans
Loan class:	#		Balance *(in thousands)*		#		Balance *(in thousands)*
Commercial, financial & agricultural		4	$	240		10	$	110
Real estate – construction & development		11		792		3		63
Real estate – commercial & farmland		16		5,766		3		596
Real estate – residential		51		7,574		20		1,123
Consumer installment		12		46		23		94
Total		94	$	14,418		59	$	1,986

As of March 31, 2015	Accruing Loans				Non-Accruing Loans
Loan class:	#		Balance *(in thousands)*		#		Balance *(in thousands)*
Commercial, financial & agricultural		5	$	277		3	$	17
Real estate – construction & development		9		789		4		90
Real estate – commercial & farmland		20		7,309		1		64
Real estate – residential		42		4,513		11		736
Consumer installment		10		47		15		90
Total		86	$	12,935		34	$	997

As of March 31, 2016, December 31, 2015 and March 31, 2015, the Company had a balance of $9.9 million, $10.0 million and $1.7 million, respectively, in troubled debt restructurings included in purchased non-covered loans. The Company has recorded $377,000 in previous charge-offs on such loans at March 31, 2016 and December 31, 2015. The Company had not recorded any previous charge-offs on such loans at March 31, 2015. At March 31, 2016, 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 ending March 31, 2016 and 2015, the Company modified purchased non-covered loans as troubled debt restructurings, with principal balances of $494,000 and $5,000, respectively, and these modifications did not have a material impact on the Company’s allowance for loan loss. The following table presents the purchased non-covered loans by class modified as troubled debt restructurings, which occurred during the three months ending March 31, 2016 and 2015:

	March 31, 2016				March 31, 2015
Loan class:	#		Balance (in thousands)		#		Balance (in thousands)
Commercial, financial & agricultural		-	$	-		1	$	1
Real estate – construction & development		-		-		-		-
Real estate – commercial & farmland		1		29		-		-
Real estate – residential		1		465		-		-
Consumer installment		-		-		1		4
Total		2	$	494		2	$	5

Troubled debt restructurings included in purchased non-covered loans with an outstanding balance of $12,000 and $329,000 defaulted during the three months ended March 30, 2015 and 2014, respectively, and these defaults did not have a material impact on the Company’s allowance for loan loss. The following table presents the troubled debt restructurings by class that defaulted (defined as 30 days past due) during the three months ending March 31, 2016 and 2015:

	March 31, 2016				March 31, 2015
Loan class:	#		Balance (in thousands)		#		Balance (in thousands)
Commercial, financial & agricultural		-	$	-		-	$	-
Real estate – construction & development		1		12		1		328
Real estate – commercial & farmland		-		-		-		-
Real estate – residential		-		-		-		-
Consumer installment		-		-		1		1
Total		1	$	12		2	$	329

The following table presents the amount of troubled debt restructurings by loan class of purchased non-covered loans, classified separately as accrual and nonaccrual at March 31, 2016, December 31, 2015 and March 31, 2015:

As of March 31, 2016	Accruing Loans				Non-Accruing Loans
Loan class:	#		Balance (in thousands)		#		Balance (in thousands)
Commercial, financial & agricultural		1	$	2		2	$	19
Real estate – construction & development		2		510		3		39
Real estate – commercial & farmland		12		6,003		4		431
Real estate – residential		12		2,397		5		486
Consumer installment		2		5		2		2
Total		29	$	8,917		16	$	977

As of December 31, 2015	Accruing Loans				Non-Accruing Loans
Loan class:	#		Balance (in thousands)		#		Balance (in thousands)
Commercial, financial & agricultural		1	$	2		2	$	21
Real estate – construction & development		1		363		3		42
Real estate – commercial & farmland		14		6,214		3		412
Real estate – residential		13		2,789		4		180
Consumer installment		2		5		2		3
Total		31	$	9,373		14	$	658

As of March 31, 2015	Accruing Loans				Non-Accruing Loans
Loan class:	#		Balance (in thousands)		#		Balance (in thousands)
Commercial, financial & agricultural		-	$	-		1	$	1
Real estate – construction & development		1		328		-		-
Real estate – commercial & farmland		3		720		1		69
Real estate – residential		5		477		2		93
Consumer installment		1		1		1		4
Total		10	$	1,526		5	$	167

As of March 31, 2016, December 31, 2015 and March 31, 2015, the Company had a balance of $15.7 million, $15.5 million and $23.3 million, respectively, in troubled debt restructurings included in covered loans. The Company has recorded $1.2 million, $1.2 million and $1.1 million in previous charge-offs on such loans at March 31, 2016, December 31, 2015 and March 31, 2015, respectively. At March 31, 2016, 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 ending March 31, 2016 and 2015, the Company modified covered loans as troubled debt restructurings with principal balances of $574,000 and $115,000, respectively, and these modifications did not have a material impact on the Company’s allowance for loan loss. The following table presents the covered loans by class modified as troubled debt restructurings, during the three months ending March 31, 2016 and 2015:

	March 31, 2016				March 31, 2015
Loan class:	#		Balance (in thousands)		#		Balance (in thousands)
Commercial, financial & agricultural		1	$	76		-	$	-
Real estate – construction & development		-		-		-		-
Real estate – commercial & farmland		1		475		-		-
Real estate – residential		1		23		2		115
Consumer installment		-		-		-		-
Total		3	$	574		2	$	115

Troubled debt restructurings of covered loans with an outstanding balance of $1.1 million and $2.1 million defaulted during the three months ended March 30, 2016 and 2015, respectively, and these defaults did not have a material impact on the Company’s allowance for loan loss. The following table presents the troubled debt restructurings by class that defaulted (defined as 30 days past due) during the three months ending March 31, 2016 and 2015:

	March 31, 2016				March 31, 2015
Loan class:	#		Balance (in thousands)		#		Balance (in thousands)
Commercial, financial & agricultural		-	$	-		-	$	-
Real estate – construction & development		-		-		-		-
Real estate – commercial & farmland		1		613		2		1,728
Real estate – residential		7		489		5		362
Consumer installment		-		-		-		-
Total		8	$	1,102		7	$	2,090

The following table presents the amount of troubled debt restructurings by loan class of covered loans, classified separately as accrual and nonaccrual at March 31, 2016, December 31, 2015 and March 31, 2015:

As of March 31, 2016	Accruing Loans				Non-Accruing Loans
Loan class:	#		Balance (in thousands)		#		Balance (in thousands)
Commercial, financial & agricultural		-	$	-		3	$	77
Real estate – construction & development		4		790		-		-
Real estate – commercial & farmland		3		1,311		5		2,133
Real estate – residential		96		10,200		26		1,224
Consumer installment		1		7		-		-
Total		104	$	12,308		34	$	3,434

As of December 31, 2015	Accruing Loans				Non-Accruing Loans
Loan class:	#		Balance (in thousands)		#		Balance (in thousands)
Commercial, financial & agricultural		-	$	-		2	$	1
Real estate – construction & development		4		779		-		-
Real estate – commercial & farmland		4		1,967		3		1,067
Real estate – residential		97		10,529		26		1,116
Consumer installment		2		8		-		-
Total		107	$	13,283		31	$	2,184

As of March 31, 2015	Accruing Loans				Non-Accruing Loans
Loan class:	#		Balance (in thousands)		#		Balance (in thousands)
Commercial, financial & agricultural		1	$	3		2	$	-
Real estate – construction & development		3		2,819		1		13
Real estate – commercial & farmland		13		6,461		2		1,736
Real estate – residential		97		11,436		10		821
Consumer installment		1		2		-		-
Total		115	$	20,721		15	$	2,570

Allowance for Loan Losses

The allowance for loan losses represents an allowance for probable incurred losses in the loan portfolio. The adequacy of the allowance for loan losses is evaluated periodically based on a review of all significant loans, with a particular emphasis on nonaccrual, past due and other loans that management believes might be potentially impaired or warrant additional attention. The Company segregates the loan portfolio by type of loan and utilizes this segregation in evaluating exposure to risks within the portfolio. In addition, based on internal reviews and external reviews performed by regulatory authorities, the Company further segregates the loan portfolio by loan grades based on an assessment of risk for a particular loan or group of loans. Certain reviewed loans are assigned specific allowances when a review of relevant data determines that a general allocation is not sufficient or when the review affords management the opportunity to adjust the amount of exposure in a given credit. In establishing allowances, management considers historical loan loss experience but adjusts this data with a significant emphasis on current loan quality trends, current economic conditions and other factors in the markets where the Company operates. Factors considered include, among others, current valuations of real estate in the Company’s markets, unemployment rates, the effect of weather conditions on agricultural related entities and other significant local economic events.

The Company has developed a methodology for determining the adequacy of the allowance for loan losses which is monitored by the Company’s Chief Credit Officer. Procedures provide for the assignment of a risk rating for every loan included in the total loan portfolio, with the exception of certain mortgage loans serviced at a third party, mortgage warehouse lines and overdraft protection loans, which are treated as pools for risk-rating purposes. The risk rating schedule provides nine ratings of which five ratings are classified as pass ratings and four ratings are classified as criticized ratings. Each risk rating is assigned a percentage factor to be applied to the loan balance to determine the adequate amount of reserve. All relationships greater than $1.0 million and a sample of relationships greater than $250,000 are reviewed annually by the Bank’s independent internal loan review department. As a result of these loan reviews, certain loans may be identified as having deteriorating credit quality. Other loans that surface as problem loans may also be assigned specific reserves. Past-due loans are assigned risk ratings based on the number of days past due. The calculation of the allowance for loan losses, including underlying data and assumptions, is reviewed regularly by the Company’s Chief Financial Officer and the independent internal loan review department.

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 60 (Loss per the regulatory guidance), the uncollectible portion is charged-off.

The following table details activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2016, the year ended December 31, 2015 and the three months ended March 31, 2015. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

	Commercial, financial & agricultural			Real estate – construction & development			Real estate – commercial & farmland			Real estate – residential			Consumer installment loans and Other			Purchased non-covered loans, including pools			Covered loans			Total

Three months ended March 31, 2016:
Balance, January 1, 2016	$	1,144		$	5,009		$	7,994		$	4,760		$	1,574		$	581		$	-		$	21,062
Provision for loan losses		788			(1,051	)		(669	)		25			399			828			361			681
Loans charged off		(406	)		(155	)		(347	)		(468	)		(59	)		(307	)		(72	)		(1,814	)
Recoveries of loans previously charged off		73			122			121			314			25			658			240			1,553
Balance, March 31, 2016	$	1,599		$	3,925		$	7,099		$	4,631		$	1,939		$	1,760		$	529		$	21,482

Period-end amount allocated to:
Loans individually evaluated for impairment	$	400		$	733		$	873		$	2,153		$	-		$	454		$	529		$	5,142
Loans collectively evaluated for impairment		1,199			3,192			6,226			2,478			1,939			1,306			-			16,340
Ending balance	$	1,599		$	3,925		$	7,099		$	4,631		$	1,939		$	1,760		$	529		$	21,482

Loans:
Individually evaluated for impairment	$	799		$	1,604		$	12,050		$	9,540		$	-		$	17,032		$	21,429		$	62,454
Collectively evaluated for impairment		433,274			263,216			1,142,837			619,598			45,089			1,635,551			28,937			4,168,502
Acquired with deteriorated credit quality		-			-			-			-			-			134,070			79,913			213,983
Ending balance	$	434,073		$	264,820		$	1,154,887		$	629,138		$	45,089		$	1,786,653