Loans | Loans The following table summarizes the components of First Guaranty's loan portfolio as of March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 (in thousands except for %) Balance As % of Category Balance As % of Category Real Estate: Construction & land development $ 200,504 9.0 % $ 174,334 8.1 % Farmland 31,840 1.4 % 31,810 1.5 % 1- 4 Family 293,773 13.1 % 288,347 13.3 % Multifamily 69,264 3.1 % 65,848 3.0 % Non-farm non-residential 894,105 40.0 % 886,407 40.9 % Total Real Estate 1,489,486 66.6 % 1,446,746 66.8 % Non-Real Estate: Agricultural 28,850 1.3 % 26,747 1.2 % Commercial and industrial (1) 412,672 18.4 % 398,391 18.4 % Commercial leases 257,323 11.5 % 246,022 11.4 % Consumer and other 48,702 2.2 % 48,142 2.2 % Total Non-Real Estate 747,547 33.4 % 719,302 33.2 % Total Loans Before Unearned Income 2,237,033 100.0 % 2,166,048 100.0 % Unearned income (5,914) (6,689) Total Loans Net of Unearned Income $ 2,231,119 $ 2,159,359 (1) Includes PPP loans fully guaranteed by the SBA of $20.2 million and $35.4 million at March 31, 2022 and December 31, 2021, respectively. The following table summarizes fixed and floating rate loans by contractual maturity, excluding nonaccrual loans, as of March 31, 2022 and December 31, 2021 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, 2022 December 31, 2021 (in thousands) Fixed Floating Total Fixed Floating Total One year or less $ 240,982 $ 158,143 $ 399,125 $ 239,423 $ 117,697 $ 357,120 More than one to five years 913,130 368,434 1,281,564 926,640 385,509 1,312,149 More than five to 15 years 144,797 112,988 257,785 114,976 106,579 221,555 Over 15 years 195,068 88,360 283,428 179,522 78,987 258,509 Subtotal $ 1,493,977 $ 727,925 2,221,902 $ 1,460,561 $ 688,772 2,149,333 Nonaccrual loans 15,131 16,715 Total Loans Before Unearned Income 2,237,033 2,166,048 Unearned income (5,914) (6,689) Total Loans Net of Unearned Income $ 2,231,119 $ 2,159,359 As of March 31, 2022, $242.3 million of floating rate loans were at their interest rate floor. At December 31, 2021, $349.1 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 March 31, 2022 and December 31, 2021: As of March 31, 2022 (in thousands) 30-89 Days Past Due 90 Days or Greater Total Past Due Current Total Loans Recorded Investment Real Estate: Construction & land development $ 1,071 $ 278 $ 1,349 $ 199,155 $ 200,504 $ 21 Farmland — 291 291 31,549 31,840 — 1- 4 family 4,872 3,436 8,308 285,465 293,773 170 Multifamily 557 162 719 68,545 69,264 162 Non-farm non-residential 1,878 8,650 10,528 883,577 894,105 478 Total Real Estate 8,378 12,817 21,195 1,468,291 1,489,486 831 Non-Real Estate: Agricultural 285 1,690 1,975 26,875 28,850 — Commercial and industrial 689 794 1,483 411,189 412,672 123 Commercial leases 153 — 153 257,170 257,323 — Consumer and other 2,317 784 3,101 45,601 48,702 — Total Non-Real Estate 3,444 3,268 6,712 740,835 747,547 123 Total Loans Before Unearned Income $ 11,822 $ 16,085 $ 27,907 $ 2,209,126 $ 2,237,033 $ 954 Unearned income (5,914) Total Loans Net of Unearned Income $ 2,231,119 As of December 31, 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 $ 956 $ 776 $ 1,732 $ 172,602 $ 174,334 $ 246 Farmland 17 787 804 31,006 31,810 — 1- 4 family 3,932 3,375 7,307 281,040 288,347 514 Multifamily 1,669 162 1,831 64,017 65,848 162 Non-farm non-residential 1,352 9,014 10,366 876,041 886,407 281 Total Real Estate 7,926 14,114 22,040 1,424,706 1,446,746 1,203 Non-Real Estate: Agricultural 97 2,302 2,399 24,348 26,747 — Commercial and industrial 1,233 722 1,955 396,436 398,391 23 Commercial leases — — — 246,022 246,022 — Consumer and other 920 822 1,742 46,400 48,142 19 Total Non-Real Estate 2,250 3,846 6,096 713,206 719,302 42 Total Loans Before Unearned Income $ 10,176 $ 17,960 $ 28,136 $ 2,137,912 $ 2,166,048 $ 1,245 Unearned income (6,689) Total Loans Net of Unearned Income $ 2,159,359 The tables above include $15.1 million and $16.7 million of nonaccrual loans at March 31, 2022 and December 31, 2021, 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, 2022 As of December 31, 2021 Real Estate: Construction & land development $ 257 $ 530 Farmland 291 787 1- 4 family 3,266 2,861 Multifamily — — Non-farm non-residential 8,172 8,733 Total Real Estate 11,986 12,911 Non-Real Estate: Agricultural 1,690 2,302 Commercial and industrial 671 699 Commercial leases — — Consumer and other 784 803 Total Non-Real Estate 3,145 3,804 Total Nonaccrual Loans $ 15,131 $ 16,715 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, 2022 As of December 31, 2021 (in thousands) Pass Special Mention Substandard Doubtful Total Pass Special Mention Substandard Doubtful Total Real Estate: Construction & land development $ 184,904 $ 14,845 $ 755 $ — $ 200,504 $ 151,220 $ 21,997 $ 1,117 $ — $ 174,334 Farmland 27,708 40 4,092 — 31,840 27,678 40 4,092 — 31,810 1- 4 family 277,674 6,907 9,192 — 293,773 270,866 7,644 9,837 — 288,347 Multifamily 61,893 458 6,913 — 69,264 56,686 2,212 6,950 — 65,848 Non-farm 809,414 67,369 17,322 — 894,105 795,495 72,103 18,809 — 886,407 Total Real Estate 1,361,593 89,619 38,274 — 1,489,486 1,301,945 103,996 40,805 — 1,446,746 Non-Real Estate: Agricultural 26,284 177 2,389 — 28,850 23,952 128 2,667 — 26,747 Commercial 401,333 3,483 7,856 — 412,672 355,407 34,220 8,764 — 398,391 Commercial leases 257,170 — 153 — 257,323 245,869 — 153 — 246,022 Consumer and other 46,186 1,561 955 — 48,702 46,804 374 964 — 48,142 Total Non-Real Estate 730,973 5,221 11,353 — 747,547 672,032 34,722 12,548 — 719,302 Total Loans Before Unearned Income $ 2,092,566 $ 94,840 $ 49,627 $ — 2,237,033 $ 1,973,977 $ 138,718 $ 53,353 $ — 2,166,048 Unearned income (5,914) (6,689) Total Loans Net of Unearned Income $ 2,231,119 $ 2,159,359 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 March 31, 2022 and December 31, 2021. (in thousands) As of March 31, 2022 As of December 31, 2021 Real Estate: Construction & land development $ 144 $ 146 Farmland — — 1- 4 family 1,704 1,848 Multifamily — — Non-farm non-residential 2,221 2,192 Total Real Estate 4,069 4,186 Non-Real Estate: Agricultural — 159 Commercial and industrial 783 798 Commercial leases — — Consumer and other — — Total Non-Real Estate 783 957 Total $ 4,852 $ 5,143 For those purchased loans disclosed above, there was an allowance for loan and lease losses of $0.7 million at March 31, 2022 and December 31, 2021. 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 three months ended March 31, 2022 and 2021. (in thousands) Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Balance, beginning of period $ 2,378 $ 2,892 Acquisition accretable yield — — Accretion (94) (142) Net transfers from nonaccretable difference to accretable yield — — Balance, end of period $ 2,284 $ 2,750 |