Merger Transaction

Effective at the close of business on November 7, 2019, First Guaranty completed its acquisition of 100% of the outstanding shares of Union Bancshares, Incorporated, a Louisiana corporation ("Union"), a single bank holding company headquartered in Marksville, Louisiana and its wholly owned subsidiary, Union Bank for $43.4 million in cash. This acquisition allowed First Guaranty to expand its presence into the Central Louisiana market area. The purchase price resulted in approximately $9.5 million in goodwill and $4.2 million in core deposit intangible, none of which is deductible for tax purposes.

First Guaranty accounts for business combinations under the acquisition method in accordance with ASC Topic 805, Business Combinations. Accordingly, for each transaction, the purchase price is allocated to the fair value of the assets acquired and liabilities assumed as of the date of the acquisition. In conjunction with the adoption of ASU 2015-16, upon receipt of final fair value estimates during the measurement period, which must be within one year of the acquisition dates, First Guaranty records any adjustments to the preliminary fair value estimates in the reporting period in which the adjustments are determined. First Guaranty is continuing to finalize the purchase price allocations related to the Union acquisition. Based on management's preliminary valuation of tangible and intangible assets acquired and liabilities assumed, the purchase price for the Union acquisition is allocated in the table below. These allocations are subject to change.



(in thousands)	Union Bancshares, Incorporated

Cash and due from banks	$	20,058
Securities available for sale	38,813
Loans	184,165
Premises and equipment	7,223
Goodwill	9,469
Intangible assets	4,213
Other real estate	1,595
Other assets	9,303
Total assets acquired	$	274,839

Deposits	204,983
FHLB borrowings	16,617
Repurchase agreements	6,863
Other liabilities	2,993
Total liabilities assumed	$	231,456
Net assets acquired	$	43,383

The following pro forma information for the twelve months ended December 31, 2019 and December 31, 2018 reflects First Guaranty's estimated consolidated results of operations as if the acquisition of Union occurred at January 1, 2018, unadjusted for potential cost savings.



(in thousands, except share data)	2019		2018
Net Interest Income	$	70,105	$	67,194
Noninterest Income	9,877		7,075
Noninterest Expense	54,482		51,261
Net Income	16,459		17,259

Earnings per common share	$	1.70	$	1.78

The fair value of net assets acquired includes fair value adjustments to certain receivables that were not considered impaired as of the acquisition date. The non-impaired loans excluded from the purchase credit impairment requirements under ASC 310-30 were recorded at an estimated fair value of $176.9 million and had gross contractual amounts receivable of $174.2 million on the date of acquisition. Contractual cash flows not expected to be collected are estimated at $1.2 million.