Loans | Loans The following table summarizes the components of First Guaranty's loan portfolio as of June 30, 2021 and December 31, 2020: June 30, 2021 December 31, 2020 (in thousands except for %) Balance As % of Category Balance As % of Category Real Estate: Construction & land development $ 191,795 9.3 % $ 150,841 8.2 % Farmland 28,157 1.4 % 26,880 1.4 % 1- 4 Family 278,252 13.4 % 271,236 14.7 % Multifamily 104,461 5.0 % 45,932 2.5 % Non-farm non-residential 830,686 40.0 % 824,137 44.6 % Total Real Estate 1,433,351 69.1 % 1,319,026 71.4 % Non-Real Estate: Agricultural 34,123 1.6 % 28,335 1.5 % Commercial and industrial (1) 358,831 17.3 % 353,028 19.1 % Consumer and other (2) 248,157 12.0 % 148,783 8.0 % Total Non-Real Estate 641,111 30.9 % 530,146 28.6 % Total Loans Before Unearned Income 2,074,462 100.0 % 1,849,172 100.0 % Unearned income (8,054) (5,037) Total Loans Net of Unearned Income $ 2,066,408 $ 1,844,135 (1) Includes PPP loans fully guaranteed by the SBA of $62.4 million and $92.3 million at June 30, 2021 and December 31, 2020, respectively. (2) Includes equipment financing leases of $207.9 million and $104.4 million at June 30, 2021 and December 31, 2020, respectively. The following table summarizes fixed and floating rate loans by contractual maturity, excluding nonaccrual loans, as of June 30, 2021 and December 31, 2020 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. June 30, 2021 December 31, 2020 (in thousands) Fixed Floating Total Fixed Floating Total One year or less $ 245,569 $ 80,516 $ 326,085 $ 186,252 $ 79,680 $ 265,932 More than one to five years 840,160 405,714 1,245,874 740,358 368,259 1,108,617 More than five to 15 years 121,673 133,603 255,276 128,860 91,032 219,892 Over 15 years 156,831 75,329 232,160 146,830 92,325 239,155 Subtotal $ 1,364,233 $ 695,162 2,059,395 $ 1,202,300 $ 631,296 1,833,596 Nonaccrual loans 15,067 15,576 Total Loans Before Unearned Income 2,074,462 1,849,172 Unearned income (8,054) (5,037) Total Loans Net of Unearned Income $ 2,066,408 $ 1,844,135 As of June 30, 2021, $326.2 million of floating rate loans were at their interest rate floor. At December 31, 2020, $305.0 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 June 30, 2021 and December 31, 2020: As of June 30, 2021 (in thousands) 30-89 Days Past Due 90 Days or Greater Total Past Due Current Total Loans Recorded Investment Real Estate: Construction & land development $ 745 $ 2,094 $ 2,839 $ 188,956 $ 191,795 $ 1,471 Farmland — 791 791 27,366 28,157 — 1- 4 family 5,505 5,619 11,124 267,128 278,252 3,462 Multifamily 5,059 — 5,059 99,402 104,461 — Non-farm non-residential 6,419 9,943 16,362 814,324 830,686 2,431 Total Real Estate 17,728 18,447 36,175 1,397,176 1,433,351 7,364 Non-Real Estate: Agricultural 836 2,695 3,531 30,592 34,123 150 Commercial and industrial 896 1,468 2,364 356,467 358,831 578 Consumer and other 660 690 1,350 246,807 248,157 141 Total Non-Real Estate 2,392 4,853 7,245 633,866 641,111 869 Total Loans Before Unearned Income $ 20,120 $ 23,300 $ 43,420 $ 2,031,042 $ 2,074,462 $ 8,233 Unearned income (8,054) Total Loans Net of Unearned Income $ 2,066,408 As of December 31, 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 $ 8,088 $ 1,621 $ 9,709 $ 141,132 $ 150,841 $ 1,000 Farmland 227 857 1,084 25,796 26,880 — 1- 4 family 6,050 7,207 13,257 257,979 271,236 4,980 Multifamily 190 366 556 45,376 45,932 366 Non-farm non-residential 15,792 12,148 27,940 796,197 824,137 4,699 Total Real Estate 30,347 22,199 52,546 1,266,480 1,319,026 11,045 Non-Real Estate: Agricultural 143 3,539 3,682 24,653 28,335 67 Commercial and industrial 663 2,557 3,220 349,808 353,028 1,856 Consumer and other 1,176 372 1,548 147,235 148,783 123 Total Non-Real Estate 1,982 6,468 8,450 521,696 530,146 2,046 Total Loans Before Unearned Income $ 32,329 $ 28,667 $ 60,996 $ 1,788,176 $ 1,849,172 $ 13,091 Unearned income (5,037) Total Loans Net of Unearned Income $ 1,844,135 The tables above include $15.1 million and $15.6 million of nonaccrual loans at June 30, 2021 and December 31, 2020, 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 June 30, 2021 As of December 31, 2020 Real Estate: Construction & land development $ 623 $ 621 Farmland 791 857 1- 4 family 2,157 2,227 Multifamily — — Non-farm non-residential 7,512 7,449 Total Real Estate 11,083 11,154 Non-Real Estate: Agricultural 2,545 3,472 Commercial and industrial 890 701 Consumer and other 549 249 Total Non-Real Estate 3,984 4,422 Total Nonaccrual Loans $ 15,067 $ 15,576 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 June 30, 2021 As of December 31, 2020 (in thousands) Pass Special Mention Substandard Doubtful Total Pass Special Mention Substandard Doubtful Total Real Estate: Construction & land development $ 182,228 $ 8,217 $ 1,350 $ — $ 191,795 $ 139,032 $ 10,785 $ 1,024 $ — $ 150,841 Farmland 24,193 40 3,924 — 28,157 22,822 46 4,012 — 26,880 1- 4 family 255,998 10,199 12,055 — 278,252 251,315 7,252 12,669 — 271,236 Multifamily 94,238 2,273 7,950 — 104,461 36,146 1,841 7,945 — 45,932 Non-farm 760,273 49,862 20,551 — 830,686 756,760 51,355 16,022 — 824,137 Total Real Estate 1,316,930 70,591 45,830 — 1,433,351 1,206,075 71,279 41,672 — 1,319,026 Non-Real Estate: Agricultural 31,113 85 2,925 — 34,123 24,180 92 4,063 — 28,335 Commercial 322,002 27,458 9,371 — 358,831 321,957 27,388 3,683 — 353,028 Consumer and other 246,609 554 994 — 248,157 147,697 442 644 — 148,783 Total Non-Real Estate 599,724 28,097 13,290 — 641,111 493,834 27,922 8,390 — 530,146 Total Loans Before Unearned Income $ 1,916,654 $ 98,688 $ 59,120 $ — 2,074,462 $ 1,699,909 $ 99,201 $ 50,062 $ — 1,849,172 Unearned income (8,054) (5,037) Total Loans Net of Unearned Income $ 2,066,408 $ 1,844,135 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 June 30, 2021 and December 31, 2020. (in thousands) As of June 30, 2021 As of December 31, 2020 Real Estate: Construction & land development $ 297 $ 397 Farmland — — 1- 4 family 3,998 4,102 Multifamily 953 900 Non-farm non-residential 2,385 2,396 Total Real Estate 7,633 7,795 Non-Real Estate: Agricultural 343 343 Commercial and industrial 818 1,017 Consumer and other — — Total Non-Real Estate 1,161 1,360 Total $ 8,794 $ 9,155 For those purchased loans disclosed above, there was an allowance for loan losses of $0.7 million at June 30, 2021 and $0.5 million at December 31, 2020. 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 six months ended June 30, 2021 and 2020. (in thousands) Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 Balance, beginning of period $ 2,892 $ 3,647 Acquisition accretable yield — 30 Accretion (264) (374) Net transfers from nonaccretable difference to accretable yield — — Balance, end of period $ 2,628 $ 3,303 |