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First Guaranty Bancshares (FGBI) came out with quarterly earnings of $0.06 per share, missing the Zacks Consensus Estimate of $0.09 per share. This compares to earnings of $0.42 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -33.33%. A quarter ago, it was expected that this bank holding company would post earnings of $0.16 per share when it actually produced earnings of $0.10, delivering a surprise of -37.50%.Over the last fo ...

HAMMOND, La., Feb. 05, 2024 (GLOBE NEWSWIRE) -- First Guaranty Bancshares, Inc. ("First Guaranty") (NASDAQ:FGBI), the holding company for First Guaranty Bank, announced its unaudited financial results for the quarter and year ending December 31, 2023. 2024!!!!!!! Happy New Year!!!!! We are happy to see 2023 in our rearview mirror. We survived the Silicon Valley adventure and now we have survived the Fed interest rate adventure. And we didn't just survive, we made money. Our loan volume continued to be stron ...

Financial Performance - Net income for Q3 2023 was $1.8 million, a decrease of $6.3 million or 78.0% from Q3 2022[108] - Earnings per common share for Q3 2023 were $0.10, down from $0.70 in Q3 2022[108] - First Guaranty's net income for Q3 2023 was $1.8 million, a decrease of $6.3 million or 78.0% from $8.1 million in Q3 2022[160] - For the nine months ended September 30, 2023, net income was $7.9 million, down $15.8 million or 66.7% from $23.8 million in the same period of 2022[161] Asset and Loan Growth - Total assets increased by $266.9 million to $3.4 billion, representing an 8.5% growth from December 31, 2022[108] - Total loans rose by $180.3 million to $2.7 billion, a 7.2% increase compared to December 31, 2022[108] - Net loans increased by $171.9 million, or 6.9%, to $2.7 billion as of September 30, 2023, compared to December 31, 2022[112] - The average outstanding loan balance for the nine months ended September 30, 2023, was $2,576.8 million, compared to $2,248.4 million for the same period in 2022[142] Deposit Trends - Total deposits reached $2.8 billion, up $91.2 million or 3.3% from December 31, 2022[108] - Noninterest-bearing demand deposits decreased by $66.0 million, or 12.6%, to $458.4 million at September 30, 2023[143] - Time deposits increased by $173.3 million, or 32.5%, to $706.7 million at September 30, 2023, primarily due to increases in consumer and business time deposits[143] - Public funds deposits totaled $1.1 billion at September 30, 2023, remaining stable compared to December 31, 2022[151] Credit Quality and Losses - The allowance for credit losses was 1.18% of total loans at September 30, 2023, compared to 0.93% at December 31, 2022[108] - Special mention loans rose by $21.1 million to $51.4 million at September 30, 2023, primarily due to downgrades in commercial lease and industrial loan relationships[114] - Substandard loans increased by $49.7 million to $92.5 million at September 30, 2023, mainly due to a downgrade of a real estate secured loan relationship[115] - Non-performing assets totaled $34.8 million, or 1.02% of total assets, as of September 30, 2023, an increase of $20.0 million, or 135.0%, from December 31, 2022[126] Interest Income and Expense - Net interest income for Q3 2023 was $20.4 million, down from $25.4 million in Q3 2022[108] - Interest income for Q3 2023 increased by $12.4 million or 35.1% to $47.6 million compared to Q3 2022[168] - Interest expense surged by $47.5 million, or 220.7%, to $69.0 million for the nine months ended September 30, 2023, largely due to rising market interest rates and an increase in average interest-bearing liabilities[176] - The average yield of interest-earning assets increased by 112 basis points to 5.92% for Q3 2023 from 4.80% in Q3 2022[168] Capital and Equity - Total shareholders' equity rose to $238.8 million at September 30, 2023, up from $235.0 million at December 31, 2022[158] - The Tier 1 Risk-based Capital Ratio was 9.79% as of September 30, 2023, down from 10.31% at December 31, 2022[213] - The capital conservation buffer was 2.72% as of September 30, 2023, exceeding the minimum requirement of 2.50%[209] Noninterest Income and Expenses - Noninterest income for Q3 2023 was $2.5 million, compared to $4.0 million in Q3 2022[108] - Noninterest income totaled $8,000 thousand for the nine months ended September 30, 2023, down from $8,500 thousand for the same period in 2022, a decrease of 5.88%[194] - Noninterest expense increased to $59,900 thousand for the nine months ended September 30, 2023, from $52,400 thousand for the same period in 2022, an increase of 14.24%[197] Borrowings and Liquidity - First Guaranty had $152.7 million in short-term borrowings as of September 30, 2023, compared to $146.4 million at December 31, 2022[154] - Long-term borrowings from the Federal Home Loan Bank totaled $155.0 million at September 30, 2023[155] - The company had a discount window line with the Federal Reserve Bank totaling $214.7 million as of September 30, 2023, an increase of $185.7 million from $29.0 million at December 31, 2022[204] - First Guaranty did not have any advances under the discount window facility as of September 30, 2023[204]

Financial Performance - Net income for the second quarter of 2023 was $2.7 million, a decrease of $5.4 million or 67.1% compared to $8.1 million in the second quarter of 2022[107]. - Earnings per common share were $0.19 for the second quarter of 2023, down from $0.70 for the same period in 2022[107]. - Net income for the six months ended June 30, 2023 was $6.1 million, a decrease of $9.6 million, or 60.9%, from $15.7 million for the same period in 2022[162]. - Earnings per common share for the six months ended June 30, 2023 was $0.46, a decrease of 66.2% from $1.36 for the same period in 2022[162]. Asset and Loan Growth - Total assets increased by $84.7 million to $3.2 billion, or 2.7%, as of June 30, 2023 compared to December 31, 2022[107]. - Total loans at June 30, 2023 were $2.6 billion, an increase of $71.6 million, or 2.8%, compared to December 31, 2022[107]. - Net loans increased by $63.2 million, or 2.5%, to $2.6 billion as of June 30, 2023, compared to December 31, 2022[113]. - Total earning assets amount to $3,134,929 thousand, with $2,590,666 thousand in loans and $408,577 thousand in securities[220]. Interest Income and Expense - Net interest income for the second quarter of 2023 was $20.9 million, down from $26.3 million for the same period in 2022[107]. - Interest income increased by $22.0 million, or 35.0%, to $85.1 million for the six months ended June 30, 2023 compared to the prior year[172]. - Interest expense increased by $30.1 million, or 256.9%, to $41.9 million for the six months ended June 30, 2023 from $11.7 million for the same period in 2022[177]. - Net interest margin decreased by 80 basis points to 2.86% for the six months ended June 30, 2023 from 3.66% for the same period in 2022[167]. Credit Quality and Allowance for Losses - The allowance for credit losses was 1.23% of total loans at June 30, 2023, compared to 0.93% at December 31, 2022[107]. - The allowance for credit losses totaled $31.9 million at June 30, 2023, up from $23.5 million at December 31, 2022[117]. - Non-performing assets totaled $25.7 million, or 0.79% of total assets, as of June 30, 2023, an increase of $10.9 million, or 73.5%, from December 31, 2022[127]. - Special mention loans rose by $16.5 million to $46.8 million at June 30, 2023, primarily due to the downgrade of one commercial lease loan relationship[115]. Deposits and Funding - Total deposits increased by $43.6 million, or 1.6%, to $2.8 billion from December 31, 2022, to June 30, 2023[144]. - Noninterest-bearing demand deposits decreased by $58.2 million, or 11.1%, to $466.2 million at June 30, 2023[144]. - Time deposits increased by $97.1 million, or 18.2%, to $630.5 million at June 30, 2023, primarily due to increases in consumer and public fund time deposits[144]. - Total public funds deposits were $1.1 billion at June 30, 2023, down from $1.11 billion at December 31, 2022, with public funds as a percentage of total deposits decreasing to 39.8%[155]. Capital and Equity - Total shareholders' equity rose to $238.9 million at June 30, 2023, up from $235.0 million at December 31, 2022, primarily due to a $9.3 million increase in surplus[159]. - The Tier 1 Risk-based Capital Ratio was 10.22% as of June 30, 2023, compared to 10.31% at December 31, 2022[213]. - The capital conservation buffer was 3.18% as of June 30, 2023, exceeding the minimum requirement of 2.50%[209]. Interest Rate Risk Management - The company has a liability-sensitive position with a negative cumulative gap of $(1,185,315) thousand on a one-year basis as of June 30, 2023[218]. - The management asset liability committee regularly reviews asset liability policies and interest rate risk positions to mitigate exposure[216]. - The company employs various investment strategies to manage interest rate risk, including internal modeling of asset and liability values[216]. - The board investment committee meets monthly to oversee interest rate risk management strategies[215].

Part I. Financial Information [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Unaudited Q1 2023 financial statements show total assets grew to **$3.24 billion**, but net income declined to **$3.5 million** due to increased interest expense and a **$7.9 million** CECL-related reduction in retained earnings [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased by **2.7%** to **$3.24 billion** as of March 31, 2023, driven by growth in net loans and deposits, while shareholders' equity slightly decreased due to CECL adoption Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **$3,237,796** | **$3,151,347** | **+2.7%** | | Net Loans | $2,542,774 | $2,495,559 | +1.9% | | Total Deposits | $2,862,588 | $2,723,792 | +5.1% | | **Total Liabilities** | **$3,009,120** | **$2,916,356** | **+3.2%** | | **Total Shareholders' Equity** | **$228,676** | **$234,991** | **-2.7%** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Q1 2023 net income available to common shareholders significantly decreased to **$2.9 million** from **$7.0 million** year-over-year, as a **245.5%** surge in interest expense offset interest income growth, compressing net interest income Q1 2023 vs Q1 2022 Income Statement (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | Change | | :--- | :--- | :--- | :--- | | Total Interest Income | $41,287 | $30,479 | +35.5% | | Total Interest Expense | $18,986 | $5,496 | +245.5% | | **Net Interest Income** | **$22,301** | **$24,983** | **-10.7%** | | Provision for credit losses | $314 | $632 | -50.3% | | **Net Income** | **$3,468** | **$7,585** | **-54.3%** | | Net Income Available to Common Shareholders | $2,886 | $7,003 | -58.8% | | **Earnings Per Common Share** | **$0.27** | **$0.65** | **-58.5%** | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes detail accounting policies, notably the January 1, 2023, CECL adoption which increased the allowance for credit losses by **$8.2 million** and reduced retained earnings by **$7.9 million**, also covering securities, loans, and litigation - The company adopted the Current Expected Credit Loss (CECL) standard on January 1, 2023, requiring estimation of lifetime expected credit losses for financial assets using a modified retrospective approach[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) Impact of ASU 2016-13 (CECL) Adoption (in thousands) | Account | Dec 31, 2022 Balance | Impact of Adoption | Jan 1, 2023 Balance | | :--- | :--- | :--- | :--- | | Allowance for credit losses | $(23,518) | $(8,220) | $(31,738) | | Deferred tax asset | $6,420 | $2,100 | $8,520 | | Reserve for unfunded loan commitments | — | $(2,900) | $(2,900) | | **Retained earnings** | **$76,351** | **$(7,900)** | **$68,451** | - As of March 31, 2023, the securities portfolio held significant unrealized losses, with held-to-maturity securities having an amortized cost of **$320.3 million** and a fair value of **$254.3 million**, though management intends and is able to hold them until maturity or recovery[34](index=34&type=chunk)[38](index=38&type=chunk) - The company is a defendant in a lawsuit alleging fault for a customer's loss due to third-party fraud, with a possible loss range of **$0.0 million to $1.5 million**, and no liability has been recorded as the case is in early stages[72](index=72&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **54.3%** Q1 2023 net income decline to significant net interest margin compression, driven by rising interest expense, while total assets grew **2.7%** to **$3.2 billion** and nonperforming assets increased, alongside disclosures of a pending acquisition and an SEC inquiry - Net income for Q1 2023 was **$3.5 million**, a **54.3%** decrease from Q1 2022, with earnings per common share falling to **$0.27** from **$0.65**[107](index=107&type=chunk) - The net interest margin decreased by **60 basis points** to **2.99%** in Q1 2023 from **3.59%** in Q1 2022, due to rising interest rates increasing liability costs faster than asset yields[107](index=107&type=chunk) - The company entered a definitive agreement to acquire Lone Star Bank, which would add approximately **$3.2 billion** in combined assets and four new banking locations in Texas[109](index=109&type=chunk)[110](index=110&type=chunk) - The SEC requested information regarding the company's Employee Stock Grant Program, for which the company has provided data and reserved **$0.6 million**[114](index=114&type=chunk) [Financial Condition](index=39&type=section&id=Financial%20Condition) Total assets increased by **$86.4 million** to **$3.2 billion** at March 31, 2023, driven by loan and deposit growth, while nonperforming assets significantly rose to **0.76%** of total assets, and shareholders' equity declined due to CECL and dividends Nonperforming Assets (in thousands) | Category | March 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total nonaccrual loans | $15,669 | $13,566 | | Loans 90+ days delinquent & accruing | $8,075 | $1,142 | | Total Real Estate Owned | $887 | $113 | | **Total non-performing assets** | **$24,631** | **$14,821** | | Non-performing assets to total assets | 0.76% | 0.47% | - The allowance for credit losses on loans increased to **$31.5 million**, or **1.22%** of total loans, at March 31, 2023, primarily due to the **$8.1 million** day-one adjustment from CECL adoption[107](index=107&type=chunk)[144](index=144&type=chunk) - Total deposits increased by **5.1%** to **$2.9 billion**, with significant growth in interest-bearing demand and time deposits, and uninsured deposits estimated at **$355.0 million**[145](index=145&type=chunk)[148](index=148&type=chunk) [Results of Operations](index=50&type=section&id=Results%20of%20Operations) Q1 2023 net income declined due to a **$2.7 million** decrease in net interest income, as a **$13.5 million** surge in interest expense outpaced the **$10.8 million** rise in interest income, while noninterest expenses also increased due to legal and personnel costs Net Interest Margin Analysis | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Average Yield on Earning Assets | 5.53% | 4.38% | | Average Rate on Interest-Bearing Liabilities | 3.24% | 1.04% | | **Net Interest Rate Spread** | **2.29%** | **3.34%** | | **Net Interest Margin** | **2.99%** | **3.59%** | - Interest expense increased by **245.5%** year-over-year to **$19.0 million**, primarily driven by higher market rates on interest-bearing demand deposits, especially public funds indexed to Treasury rates[170](index=170&type=chunk) - Noninterest expense increased to **$20.2 million** from **$16.8 million** year-over-year, driven by a **$1.0 million** rise in salaries and benefits and a **$2.4 million** increase in other expenses, including legal and professional fees[184](index=184&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, managed via ALM, with a March 31, 2023, interest sensitivity analysis revealing a liability-sensitive position and a negative cumulative gap of **$1.17 billion** within one year, indicating potential net interest income pressure in a rising rate environment - The company's principal market risk is interest rate risk, arising from the maturity mismatch between its longer-term assets and shorter-term liabilities[201](index=201&type=chunk) Interest Sensitivity Gap Analysis (March 31, 2023, in thousands) | Period | Earning Assets | Source of Funds | Period Gap | Cumulative Gap | | :--- | :--- | :--- | :--- | :--- | | 3 Months Or Less | $838,533 | $1,896,251 | $(1,057,718) | $(1,057,718) | | Over 3 Months thru 12 Months | $268,100 | $382,146 | $(114,046) | $(1,171,764) | | **Total One Year** | **$1,106,633** | **$2,278,397** | **$(1,171,764)** | **$(1,171,764)** | [Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[208](index=208&type=chunk) Part II. Other Information [Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) The company settled a loan overpayment lawsuit for **$0.6 million** in Q1 2023 and faces a pending fraud-related lawsuit with a potential loss range up to **$1.5 million**, though management believes current legal proceedings will not materially affect financial condition - A lawsuit alleging overpayment on a loan was settled in Q1 2023 for **$0.6 million**[210](index=210&type=chunk) - A pending lawsuit alleges bank fault in a customer's fraud-related loss, with a possible loss range of **$0.0 million to $1.5 million**, and the bank is defending without accruing a liability[210](index=210&type=chunk) [Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K were reported for the period - No material changes to risk factors were reported for the period[211](index=211&type=chunk) [Exhibits](index=55&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including the merger agreement with Lone Star Bank, corporate governance documents, and various officer certifications

Financial Position - As of December 31, 2022, First Guaranty Bancshares had consolidated total assets of $3.2 billion, total deposits of $2.7 billion, and total shareholders' equity of $235.0 million[19]. - Total deposits held by the company were $2.7 billion as of December 31, 2022[75]. - Public funds deposits amounted to $1.1 billion at the end of 2022, primarily from local government entities[76]. - The investment securities portfolio generated $63.2 million of pre-tax income over the last five years, with a fair value of $195.5 million in U.S. government agency securities as of December 31, 2022[78][79]. - The carrying value of the securities portfolio was $451.5 million as of December 31, 2022, with 14.3% of total assets invested in investment securities[181]. - First Guaranty Bank exceeded all regulatory capital requirements and was considered well-capitalized based on FDIC guidelines as of December 31, 2022[104]. - The company had $20.3 million in brokered deposits, mainly in reciprocal deposit programs, as of December 31, 2022[77]. - The company is required to maintain adequate capital levels, and future capital raising may be challenging depending on market conditions[187]. Loan Portfolio - The loan to deposit ratio was 92.5% as of December 31, 2022, indicating a strong focus on increasing total loans as a percentage of assets[37]. - First Guaranty aims to grow its loan portfolio by targeting small and medium-sized businesses in sectors such as manufacturing, agriculture, and healthcare[38]. - Non-farm non-residential loans totaled $992.9 million, or 39.3% of the total loan portfolio as of December 31, 2022, with owner-occupied loans making up 35.4% of this segment[51]. - Commercial and industrial loans amounted to $385.3 million, or 15.3% of the total loan portfolio as of December 31, 2022, with commercial term loans at $157.5 million, representing 40.9% of commercial and industrial loans[54]. - One- to four-family residential real estate loans totaled $366.3 million, or 14.5% of the total loan portfolio as of December 31, 2022, with jumbo loans exceeding the conforming limit at $29.3 million[57]. - Multifamily loans accounted for $119.8 million, or 4.7% of the total loan portfolio as of December 31, 2022, with underwriting following general guidelines for non-farm non-residential loans[61]. - Agricultural loans totaled $39.0 million, representing 1.5% of the total loan portfolio as of December 31, 2022[65]. - Farmland loans amounted to $24.8 million, or 1.0% of the total loan portfolio at the end of 2022[67]. - Commercial leases reached $317.6 million, making up 12.6% of the total loan portfolio as of December 31, 2022[68]. - Consumer and other loans totaled $47.9 million, or 1.9% of the total loan portfolio at the end of 2022[69]. - As of December 31, 2022, construction and land development loans accounted for $233.1 million, or 9.2% of the total loan portfolio[63]. - Approximately 68.7% of the total loan portfolio was secured by real estate, primarily in Louisiana and North Central Texas[137]. - Approximately $47.7 million in loans were indexed to LIBOR as of December 31, 2022, highlighting exposure to the transition from LIBOR[189]. - The majority of the guaranteed loan portfolio, amounting to $5.9 million, was comprised of loans originated under the SBA PPP program as of December 31, 2022[195]. Growth and Expansion - First Guaranty expanded into Kentucky and West Virginia in 2021, with a branch in Vanceburg, Kentucky, and a loan and deposit production office in Bridgeport, West Virginia[21]. - The company is in the process of acquiring Lone Star Bank, which will expand its geographic footprint into the Greater Houston area and along the I-10 corridor[23]. - The company plans to continue expanding its Texas markets in Dallas-Fort Worth-Arlington and Waco both organically and through strategic acquisitions[37]. - The company has completed four acquisitions since its Share Exchange, enhancing its deposit base and geographic reach in key markets[22]. - The company aims to pursue strategic acquisitions of community banks and non-banking financial companies to supplement organic growth, focusing on targets with quality loan portfolios[46]. Dividend and Shareholder Value - First Guaranty has paid a quarterly dividend on its common stock for 118 consecutive quarters as of December 31, 2022, demonstrating a commitment to returning value to shareholders[21]. - The ability to pay dividends is subject to regulatory guidance and restrictions, and future dividends will depend on various factors including capital levels[202]. - Dividends on the Series A Preferred Stock are non-cumulative and discretionary, with no obligation to pay if not declared by the board[209]. - The Series A Preferred Stock ranks junior to all existing and future indebtedness, affecting the payment of dividends[206]. - Principal shareholders beneficially own approximately 40% of the outstanding common stock as of December 31, 2022[201]. Risk Management and Regulatory Environment - The company emphasizes maintaining strong asset quality through disciplined credit culture and proactive measures in response to economic challenges, including loan relief measures during the COVID-19 pandemic[44]. - The company is subject to extensive regulation, and changes in laws could materially affect operations and financial condition[185]. - The bank's ability to pay dividends is subject to restrictions under Louisiana law, requiring unimpaired surplus equal to 50% of its outstanding capital stock[95]. - The concentration in commercial real estate loans was 399% of total capital, subjecting the company to additional regulatory scrutiny[147]. - The company faces risks related to interest rates, as shifts may reduce net interest income and impact loan demand, delinquencies, and repayment rates[155]. - The company may face increased FDIC deposit insurance assessments due to recent bank failures, which could reduce profitability[191]. - The company adopted the current expected credit loss model effective January 1, 2023, which may impact how credit impairment is recognized[177]. - The company must periodically test goodwill and core deposit intangible assets for impairment, which could adversely affect financial performance[179]. - The company operates in a market area susceptible to natural disasters, which could disrupt operations and increase loan losses[183]. Operational Challenges - Liquidity is essential for operations, with a lack of liquidity potentially jeopardizing the company's financial condition and results of operations[157]. - The company relies heavily on deposits, and recent increases in interest rates have intensified competition for these deposits, which could adversely affect liquidity[157][160]. - The operational and technological infrastructure is critical for growth, and failures in these systems could lead to significant financial losses and reputational damage[172]. - The company may face challenges in maintaining and managing growth, particularly in attracting core deposits and identifying commercial lending opportunities[166]. Performance Metrics - For the year ended December 31, 2022, net interest income totaled $100.0 million, significantly higher than the total noninterest income of $11.0 million, indicating a strong dependence on net interest income for earnings[167]. - Service charges, commissions, and fees contributed $3.2 million, or 28.7% of total noninterest income for the year ended December 31, 2022, up from $2.7 million, or 26.9% in the previous year[168]. - Non-performing assets were $14.8 million, or 0.47% of total assets, adversely affecting net income and requiring management involvement for resolution[142]. - The allowance for credit losses was 0.93% of total loans and 159.90% of total non-performing loans, indicating potential for significant credit losses[145]. - Short-term loans comprised $1.6 billion, or 64.0% of total loans, increasing the risk of significant losses due to balloon payments at maturity[146]. - The assessment range for First Guaranty Bank, based on financial measures and supervisory ratings, is from 1.5 basis points to 30 basis points[116].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from __________ to __________ Commission File Number: 001-37621 FIRST GUARANTY BANCSHARES, INC. (Exact name of registrant as specified in its charter) Louisiana 26-0513559 (State ...

Financial Performance - Net income for the second quarter of 2022 was $8.1 million, an increase of $1.7 million or 26.3% compared to $6.4 million in the second quarter of 2021 [126]. - Earnings per common share were $0.70 for the second quarter of 2022, compared to $0.58 for the same period in 2021 [127]. - Net income for the six months ended June 30, 2022 was $15.7 million, an increase of $4.3 million, or 37.1%, from $11.5 million for the same period in 2021 [211]. - Earnings per common share for the six months ended June 30, 2022 was $1.36, an increase of 29.5% or $0.31 per common share from $1.05 for the same period in 2021 [211]. Asset and Loan Growth - Total assets increased by $81.2 million, or 2.8%, to $2.96 billion at June 30, 2022 compared to December 31, 2021 [125]. - Total loans at June 30, 2022 were $2.3 billion, an increase of $136.4 million, or 6.3%, compared to December 31, 2021 [125]. - Net loans increased by $136.8 million, or 6.4%, to $2.3 billion as of June 30, 2022, compared to December 31, 2021 [149]. - Non-farm non-residential loan balances increased by $76.0 million due to new originations, while multifamily loans increased by $39.6 million primarily from the conversion of existing construction loans to permanent financing [149]. Interest Income and Margin - Net interest income for the second quarter of 2022 was $26.3 million, compared to $21.4 million for the same period in 2021 [130]. - The net interest margin for the three months ended June 30, 2022 was 3.72%, an increase of 39 basis points from 3.33% for the same period in 2021 [134]. - Net interest income for the six months ended June 30, 2022 was $51.3 million, up from $41.0 million in the prior year, reflecting an increase of $10.3 million, or 25.1% [216]. - Average yield of interest-earning assets increased by 30 basis points to 4.49% for the six months ended June 30, 2022 from 4.19% for the same period in 2021 [221]. Non-Performing Assets - Total non-performing loans decreased to $11.0 million from $18.0 million, a reduction of $6.0 million, or 33.4% [162]. - Non-performing assets decreased by $7.4 million, or 36.9%, to $12.6 million, representing 0.43% of total assets as of June 30, 2022 [164]. - The allowance for loan and lease losses was $23.6 million as of June 30, 2022, compared to $24.0 million at December 31, 2021 [152]. Deposits and Equity - Total deposits increased by $63.6 million, or 2.4%, to $2.7 billion from December 31, 2021 to June 30, 2022 [191]. - Total shareholders' equity increased to $226.5 million at June 30, 2022, from $223.9 million at December 31, 2021, primarily due to an increase in retained earnings [208]. - Public funds deposits totaled $1.0 billion at June 30, 2022, up from $957.9 million at December 31, 2021, indicating a growth of 4.5% [201]. Loan Loss Provisions - A provision for loan losses of $1.4 million was made during the six months ended June 30, 2022, compared to $1.5 million for the same period in 2021 [180]. - The provision for loan losses is based on management's evaluation of economic conditions and changes in the loan portfolio [233]. - The allowance for loan losses is considered adequate to cover potential losses, although economic uncertainty may lead to future increases [236]. Interest Rate Sensitivity - The interest sensitivity gap was $(833,876,000) on a one-year basis, indicating a liability-sensitive position [266]. - A 400 basis point increase in interest rates could lead to a decrease in net interest income by 3.59% [269]. - The Bank's asset/liability management process aims to maintain stable net interest income levels under various interest rate environments [259].