Financial Performance - Net income for the first quarter of 2023 was $3.5 million, a decrease of $4.1 million or 54.3% from $7.6 million in the first quarter of 2022[102]. - Earnings per common share decreased to $0.27 for the first quarter of 2023 from $0.65 in the same period of 2022[102]. - Net interest income decreased by $2.7 million, or 10.8%, to $22.3 million for the three months ended March 31, 2023, compared to $25.0 million for the same period in 2022[159]. - Noninterest income totaled $2.7 million for the three months ended March 31, 2023, an increase of $0.7 million from $2.0 million for the same period in 2022[173]. - Income tax expense decreased to $1.1 million in Q1 2023 from $2.0 million in Q1 2022, reflecting a decrease in income before taxes[177]. Asset and Loan Growth - Total assets increased by $86.4 million to $3.2 billion, or 2.7%, as of March 31, 2023 compared to December 31, 2022[102]. - Total loans were $2.6 billion, an increase of $55.2 million, or 2.2%, from December 31, 2022[102]. - Net loans increased by $47.2 million, or 1.9%, to $2.5 billion as of March 31, 2023, compared to December 31, 2022[112]. - First Guaranty had $345.5 million in loans related to Texas markets, an increase of $11.6 million, or 3.5%, from $333.8 million at December 31, 2022[112]. - Loans maturing within one year totaled $378.8 million at March 31, 2023[179]. Deposit Trends - Total deposits rose to $2.9 billion, an increase of $138.8 million, or 5.1%, compared to December 31, 2022[102]. - Public funds deposits totaled $1.14 billion as of March 31, 2023, accounting for 40.0% of total deposits, compared to 40.9% in the previous year[151]. - Interest-bearing demand deposits increased by $71.1 million, or 4.9%, to $1.5 billion at March 31, 2023[140]. - Time deposits rose by $72.9 million, or 13.7%, to $606.2 million at March 31, 2023, primarily due to increases in consumer and business time deposits[140]. - The total amount of uninsured deposits was estimated at $355.0 million at March 31, 2023[143]. Credit Quality and Allowance for Losses - The allowance for credit losses was 1.22% of total loans at March 31, 2023, up from 0.93% at December 31, 2022[102]. - The allowance for credit losses totaled $31.5 million at March 31, 2023, up from $23.5 million at December 31, 2022, following the adoption of ASC 326[115]. - Non-performing assets totaled $24.6 million, or 0.76% of total assets, an increase of $9.8 million, or 66.2%, from $14.8 million, or 0.47%, at December 31, 2022[125]. - Nonaccrual loans increased from $13.6 million at December 31, 2022, to $15.7 million at March 31, 2023[126]. - A provision for loan losses of $0.3 million was made during the three months ended March 31, 2023, compared to $0.6 million for the same period in 2022[137]. Interest Income and Expense - Interest income increased due to growth in the loan portfolio, while interest expense also rose due to higher market rates[156]. - Interest income on loans increased by $10.1 million, or 36.1%, to $38.1 million for the three months ended March 31, 2023, due to an increase in both average balance and average yield of loans[162]. - Average yield on interest-earning assets increased by 115 basis points to 5.53% for the three months ended March 31, 2023, compared to 4.38% for the same period in 2022[160]. - Interest expense increased by $13.5 million, or 245.5%, to $19.0 million for the three months ended March 31, 2023, primarily due to an increase in market interest rates[163]. - Average rate of interest-bearing demand deposits rose to 3.56% for the three months ended March 31, 2023, compared to 0.70% for the same period in 2022[163]. Capital and Equity - Total shareholders' equity decreased to $228.7 million at March 31, 2023, from $235.0 million at December 31, 2022[155]. - The Bank's Tier 1 Risk-based Capital Ratio was 10.03% as of March 31, 2023, down from 10.31% at December 31, 2022[188]. - The capital conservation buffer was 2.98% as of March 31, 2023, exceeding the minimum requirement of 2.50%[184]. - The Community Bank Leverage Ratio requirement is set at 9%, and as of March 31, 2023, the Bank did not elect to follow this ratio[186]. Mergers and Expansion - First Guaranty entered into an agreement to acquire Lone Star Bank, which would result in a combined total of approximately $3.2 billion in total assets post-merger[104]. - First Guaranty plans to open a new full-service branch in Fate, Texas, as part of its organic expansion strategy[106].
FIRST GTY BANCSH(FGBIP) - 2023 Q1 - Quarterly Report