Loans | Loans The following table summarizes the components of First Guaranty's loan portfolio as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 (in thousands except for %) Balance As % of Category Balance As % of Category Real Estate: Construction & land development $ 153,969 8.6 % $ 172,247 11.3 % Farmland 27,732 1.5 % 22,741 1.5 % 1- 4 Family 273,687 15.3 % 289,635 18.9 % Multifamily 41,295 2.3 % 23,973 1.6 % Non-farm non-residential 761,674 42.4 % 616,536 40.3 % Total Real Estate 1,258,357 70.1 % 1,125,132 73.6 % Non-Real Estate: Agricultural 35,625 2.0 % 26,710 1.8 % Commercial and industrial 378,926 21.1 % 268,256 17.5 % Consumer and other 121,226 6.8 % 108,868 7.1 % Total Non-Real Estate 535,777 29.9 % 403,834 26.4 % Total Loans Before Unearned Income 1,794,134 100.0 % 1,528,966 100.0 % Unearned income (5,418) (3,476) Total Loans Net of Unearned Income $ 1,788,716 $ 1,525,490 The following table summarizes fixed and floating rate loans by contractual maturity, excluding nonaccrual loans, as of September 30, 2020 and December 31, 2019 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. September 30, 2020 December 31, 2019 (in thousands) Fixed Floating Total Fixed Floating Total One year or less $ 178,559 $ 73,993 $ 252,552 $ 205,596 $ 104,859 $ 310,455 More than one to five years 677,486 365,968 1,043,454 509,455 286,131 795,586 More than five to 15 years 157,746 84,513 242,259 147,502 65,713 213,215 Over 15 years 144,770 85,809 230,579 143,695 51,612 195,307 Subtotal $ 1,158,561 $ 610,283 1,768,844 $ 1,006,248 $ 508,315 1,514,563 Nonaccrual loans 25,290 14,403 Total Loans Before Unearned Income 1,794,134 1,528,966 Unearned income (5,418) (3,476) Total Loans Net of Unearned Income $ 1,788,716 $ 1,525,490 As of September 30, 2020, $275.8 million of floating rate loans were at their interest rate floor. At December 31, 2019, $153.3 million of floating rate loans were at their interest rate floor. Nonaccrual loans have been excluded from these totals. The following tables present the age analysis of past due loans at September 30, 2020 and December 31, 2019: As of September 30, 2020 (in thousands) 30-89 Days Past Due 90 Days or Greater Total Past Due Current Total Loans Recorded Investment Real Estate: Construction & land development $ 903 $ 1,183 $ 2,086 $ 151,883 $ 153,969 $ 520 Farmland 4,178 1,286 5,464 22,268 27,732 429 1- 4 family 7,543 7,837 15,380 258,307 273,687 2,677 Multifamily 801 370 1,171 40,124 41,295 370 Non-farm non-residential 5,094 14,414 19,508 742,166 761,674 843 Total Real Estate 18,519 25,090 43,609 1,214,748 1,258,357 4,839 Non-Real Estate: Agricultural 109 4,078 4,187 31,438 35,625 144 Commercial and industrial 2,713 1,391 4,104 374,822 378,926 599 Consumer and other 900 459 1,359 119,867 121,226 146 Total Non-Real Estate 3,722 5,928 9,650 526,127 535,777 889 Total Loans Before Unearned Income $ 22,241 $ 31,018 $ 53,259 $ 1,740,875 $ 1,794,134 $ 5,728 Unearned income (5,418) Total Loans Net of Unearned Income $ 1,788,716 As of December 31, 2019 (in thousands) 30-89 Days Past Due 90 Days or Greater Total Past Due Current Total Loans Recorded Investment Real Estate: Construction & land development $ 760 $ 429 $ 1,189 $ 171,058 $ 172,247 $ 48 Farmland 6 1,274 1,280 21,461 22,741 — 1- 4 family 8,521 3,682 12,203 277,432 289,635 923 Multifamily — — — 23,973 23,973 — Non-farm non-residential 11,279 6,249 17,528 599,008 616,536 1,603 Total Real Estate 20,566 11,634 32,200 1,092,932 1,125,132 2,574 Non-Real Estate: Agricultural 310 4,800 5,110 21,600 26,710 — Commercial and industrial 2,801 342 3,143 265,113 268,256 15 Consumer and other 794 266 1,060 107,808 108,868 50 Total Non-Real Estate 3,905 5,408 9,313 394,521 403,834 65 Total Loans Before Unearned Income $ 24,471 $ 17,042 $ 41,513 $ 1,487,453 $ 1,528,966 $ 2,639 Unearned income (3,476) Total Loans Net of Unearned Income $ 1,525,490 The tables above include $25.3 million and $14.4 million of nonaccrual loans at September 30, 2020 and December 31, 2019, 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 September 30, 2020 As of December 31, 2019 Real Estate: Construction & land development $ 663 $ 381 Farmland 857 1,274 1- 4 family 5,160 2,759 Multifamily — — Non-farm non-residential 13,571 4,646 Total Real Estate 20,251 9,060 Non-Real Estate: Agricultural 3,934 4,800 Commercial and industrial 792 327 Consumer and other 313 216 Total Non-Real Estate 5,039 5,343 Total Nonaccrual Loans $ 25,290 $ 14,403 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 September 30, 2020 As of December 31, 2019 (in thousands) Pass Special Mention Substandard Doubtful Total Pass Special Mention Substandard Doubtful Total Real Estate: Construction & land development $ 147,144 $ 5,794 $ 1,031 $ — $ 153,969 $ 163,808 $ 6,180 $ 2,259 $ — $ 172,247 Farmland 23,151 564 4,017 — 27,732 18,223 3,177 1,341 — 22,741 1- 4 family 254,816 5,524 13,347 — 273,687 271,392 4,751 13,492 — 289,635 Multifamily 31,427 1,881 7,987 — 41,295 16,025 805 7,143 — 23,973 Non-farm 713,565 25,990 21,025 1,094 761,674 589,800 7,743 18,993 — 616,536 Total Real Estate 1,170,103 39,753 47,407 1,094 1,258,357 1,059,248 22,656 43,228 — 1,125,132 Non-Real Estate: Agricultural 30,419 947 4,259 — 35,625 21,529 48 5,133 — 26,710 Commercial 349,417 25,761 3,748 — 378,926 262,416 1,199 4,641 — 268,256 Consumer and other 120,068 359 799 — 121,226 108,618 180 70 — 108,868 Total Non-Real Estate 499,904 27,067 8,806 — 535,777 392,563 1,427 9,844 — 403,834 Total Loans Before Unearned Income $ 1,670,007 $ 66,820 $ 56,213 $ 1,094 1,794,134 $ 1,451,811 $ 24,083 $ 53,072 $ — 1,528,966 Unearned income (5,418) (3,476) Total Loans Net of Unearned Income $ 1,788,716 $ 1,525,490 Purchased Impaired Loans As part of the acquisition of Union Bancshares, Incorporated on November 7, 2019 and Premier Bancshares, Inc. 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 September 30, 2020 and December 31, 2019. (in thousands) As of September 30, 2020 As of December 31, 2019 Real Estate: Construction & land development $ 394 $ 526 Farmland — — 1- 4 family 4,140 6,402 Multifamily 920 — Non-farm non-residential 2,404 2,294 Total Real Estate 7,858 9,222 Non-Real Estate: Agricultural — — Commercial and industrial 1,048 1,198 Consumer and other — — Total Non-Real Estate 1,048 1,198 Total $ 8,906 $ 10,420 For those purchased loans disclosed above, there was no allowance for loan losses at September 30, 2020 or December 31, 2019. 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. The accretable yield, or income expected to be collected, on the purchased loans above is as follows for the nine months ended September 30, 2020 and 2019. (in thousands) Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 Balance, beginning of period $ 3,647 $ 613 Acquisition accretable yield 30 — Accretion (537) (746) Net transfers from nonaccretable difference to accretable yield — 498 Balance, end of period $ 3,140 $ 365 |