Loans | Note 5. Loans The following table summarizes the components of First Guaranty's loan portfolio as of March 31, 2018 and December 31, 2017: March 31, 2018 December 31, 2017 (in thousands except for %) Balance As % of Category Balance As % of Category Real Estate: Construction & land development $ 95,524 8.4 % $ 112,603 9.8 % Farmland 24,668 2.2 % 25,691 2.2 % 1- 4 Family 158,937 13.9 % 158,733 13.8 % Multifamily 43,406 3.8 % 16,840 1.4 % Non-farm non-residential 529,478 46.5 % 530,293 46.1 % Total Real Estate 852,013 74.8 % 844,160 73.3 % Non-Real Estate: Agricultural 18,957 1.7 % 21,514 1.9 % Commercial and industrial 213,613 18.7 % 230,638 20.0 % Consumer and other 55,007 4.8 % 55,185 4.8 % Total Non-Real Estate 287,577 25.2 % 307,337 26.7 % Total loans before unearned income 1,139,590 100.0 % 1,151,497 100.0 % Unearned income (2,419 ) (2,483 ) Total loans net of unearned income $ 1,137,171 $ 1,149,014 The following table summarizes fixed and floating rate loans by contractual maturity, excluding nonaccrual loans, as of March 31, 2018 and December 31, 2017 unadjusted for scheduled principal payments, prepayments, or repricing opportunities. The average life of the loan portfolio may be substantially less than the contractual terms when these adjustments are considered. March 31, 2018 December 31, 2017 (in thousands) Fixed Floating Total Fixed Floating Total One year or less $ 100,339 $ 91,386 $ 191,725 $ 89,383 $ 75,361 $ 164,744 More than one to five years 374,968 221,610 596,578 390,333 251,135 641,468 More than five to 15 years 130,571 71,811 202,382 124,215 70,273 194,488 Over 15 years 71,456 66,913 138,369 70,366 67,881 138,247 Subtotal $ 677,334 $ 451,720 1,129,054 $ 674,297 $ 464,650 1,138,947 Nonaccrual loans 10,536 12,550 Total loans before unearned income 1,139,590 1,151,497 Unearned income (2,419 ) (2,483 ) Total loans net of unearned income $ 1,137,171 $ 1,149,014 As of March 31, 2018, $54.9 million of floating rate loans were at their interest rate floor. At December 31, 2017, $95.4 million of floating rate loans were at the interest rate floor. Nonaccrual loans have been excluded from these totals. The following tables present the age analysis of past due loans, at March 31, 2018 and December 31, 2017: As of March 31, 2018 (in thousands) 30-89 Days Past Due 90 Days or Greater Total Past Due Current Total Loans Recorded Investment 90 Days Accruing Real Estate: Construction & land development $ 328 $ 360 $ 688 $ 94,836 $ 95,524 $ - Farmland 420 235 655 24,013 24,668 - 1 - 4 family 2,906 1,480 4,386 154,551 158,937 - Multifamily - - - 43,406 43,406 - Non-farm non-residential 6,680 4,201 10,881 518,597 529,478 316 Total Real Estate 10,334 6,276 16,610 835,403 852,013 316 Non-Real Estate: Agricultural 383 2,047 2,430 16,527 18,957 75 Commercial and industrial 973 2,428 3,401 210,212 213,613 30 Consumer and other 252 206 458 54,549 55,007 - Total Non-Real Estate 1,608 4,681 6,289 281,288 287,577 105 Total loans before unearned income $ 11,942 $ 10,957 $ 22,899 $ 1,116,691 $ 1,139,590 $ 421 Unearned income (2,419 ) Total loans net of unearned income $ 1,137,171 As of December 31, 2017 (in thousands) 30-89 Days Past Due 90 Days or Greater Total Past Due Current Total Loans Recorded Investment 90 Days Accruing Real Estate: Construction & land development $ 95 $ 371 $ 466 $ 112,137 $ 112,603 $ - Farmland 175 65 240 25,451 25,691 - 1 - 4 family 1,481 1,953 3,434 155,299 158,733 - Multifamily - - - 16,840 16,840 - Non-farm non-residential 1,006 3,758 4,764 525,529 530,293 - Total Real Estate 2,757 6,147 8,904 835,256 844,160 - Non-Real Estate: Agricultural 239 1,537 1,776 19,738 21,514 41 Commercial and industrial 630 5,624 6,254 224,384 230,638 798 Consumer and other 463 81 544 54,641 55,185 - Total Non-Real Estate 1,332 7,242 8,574 298,763 307,337 839 Total loans before unearned income $ 4,089 $ 13,389 $ 17,478 $ 1,134,019 $ 1,151,497 $ 839 Unearned income (2,483 ) Total loans net of unearned income $ 1,149,014 The tables above include $10.5 million and $12.6 million of nonaccrual loans at March 31, 2018 and December 31, 2017, respectively. See the tables below for more detail on nonaccrual loans. The following is a summary of nonaccrual loans by class at the dates indicated: (in thousands) As of March 31, 2018 As of December 31, 2017 Real Estate: Construction & land development $ 360 $ 371 Farmland 235 65 1 - 4 family 1,480 1,953 Multifamily - - Non-farm non-residential 3,885 3,758 Total Real Estate 5,960 6,147 Non-Real Estate: Agricultural 1,972 1,496 Commercial and industrial 2,398 4,826 Consumer and other 206 81 Total Non-Real Estate 4,576 6,403 Total Nonaccrual Loans $ 10,536 $ 12,550 The following table identifies the credit exposure of the loan portfolio, including loans acquired with deteriorated credit quality, by specific credit ratings as of the dates indicated: As of March 31, 2018 As of December 31, 2017 (in thousands) Pass Special Mention Substandard Doubtful Total Pass Special Mention Substandard Doubtful Total Real Estate: Construction & land development $ 91,189 $ 122 $ 4,213 $ - $ 95,524 $ 108,200 $ 125 $ 4,278 $ - $ 112,603 Farmland 23,838 569 261 - 24,668 25,030 569 92 - 25,691 1 - 4 family 148,464 2,213 8,260 - 158,937 149,426 1,856 7,451 - 158,733 Multifamily 35,931 660 6,815 - 43,406 9,366 639 6,835 - 16,840 Non-farm non-residential 506,128 5,290 18,060 - 529,478 510,494 2,490 17,309 - 530,293 Total Real Estate 805,550 8,854 37,609 - 852,013 802,516 5,679 35,965 - 844,160 Non-Real Estate: Agricultural 15,714 631 2,612 - 18,957 19,050 995 1,469 - 21,514 Commercial and industrial 187,498 18,849 5,248 2,018 213,613 201,722 19,187 5,169 4,560 230,638 Consumer and other 48,691 137 6,179 - 55,007 48,225 68 6,892 - 55,185 Total Non-Real Estate 251,903 19,617 14,039 2,018 287,577 268,997 20,250 13,530 4,560 307,337 Total loans before unearned income $ 1,057,453 $ 28,471 $ 51,648 $ 2,018 $ 1,139,590 $ 1,071,513 $ 25,929 $ 49,495 $ 4,560 $ 1,151,497 Unearned income (2,419 ) (2,483 ) Total loans net of unearned income $ 1,137,171 $ 1,149,014 Purchased Impaired Loans As part of the acquisition of Premier on June 16, 2017, First Guaranty purchased credit impaired loans for which there was, at acquisition, evidence of deterioration of credit quality since their origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans is as follows at March 31, 2018. thousands) As of March 31, 2018 As of December 31, 2017 Real Estate: Construction & land development $ 1,127 $ 1,135 Farmland 7 8 1 - 4 family 48 50 Multifamily - - Non-farm non-residential 2,131 2,148 Total Real Estate 3,313 3,341 Non-Real Estate: Agricultural - - Commercial and industrial 896 1,017 Consumer and other - - Total Non-Real Estate 896 1,017 Total $ 4,209 $ 4,358 For those purchased loans disclosed above, there was no allowance for loan losses at March 31, 2018 or December 31, 2017. Where First Guaranty can reasonably estimate the cash flows expected to be collected on the loans, a portion of the purchase discount is allocated to an accretable yield adjustment based upon the present value of the future estimated cash flows versus the current carrying value of the loan and the accretable yield portion is being recognized as interest income over the remaining life of the loan. Where First Guaranty cannot reasonably estimate the cash flows expected to be collected on the loans, it has decided to account for those loans using the cost recovery method of income recognition. As such, no portion of a purchase discount adjustment has been determined to meet the definition of an accretable yield adjustment on those loans accounted for using the cost recovery method. If, in the future, cash flows from the borrower(s) can be reasonably estimated, a portion of the purchase discount would be allocated to an accretable yield adjustment based upon the present value of the future estimated cash flows versus the current carrying value of the loan and the accretable yield portion would be recognized as interest income over the remaining life of the loan. Until such accretable yield can be calculated, under the cost recovery method of income recognition, all payments will be used to reduce the carrying value of the loan and no income will be recognized on the loan until the carrying value is reduced to zero. Any loan accounted for under the cost recovery method is also still included as a non-accrual loan in the amounts presented in the table below. The accretable yield, or income expected to be collected, on the purchased loans above is as follows for the three months ended March 31, 2018. (in thousands) Three Months Ended March 31, 2018 Balance, beginning of period $ 1,031 Acquisition accretable yield - Accretion (65 ) Net transfers from nonaccretable difference to accretable yield - Balance, end of period $ 966 |