First Guaranty Bank(FGBI) - 2022 Q3 - Quarterly Report

Financial Performance - Net income for the third quarter of 2022 was $8.1 million, an increase of $0.3 million or 3.4% compared to $7.8 million in the same period of 2021 [126]. - Earnings per common share were $0.70 for the third quarter of 2022, up from $0.67 for the same period in 2021 [127]. - Net income for the nine months ended September 30, 2022 was $23.8 million, an increase of $4.5 million, or 23.5%, from $19.2 million for the same period in 2021 [212]. - Earnings per common share for the nine months ended September 30, 2022 was $2.05, an increase of 19.2% or $0.33 from $1.72 for the same period in 2021 [212]. Asset and Loan Growth - Total assets increased by $218.7 million, or 7.6%, to $3.10 billion at September 30, 2022 compared to December 31, 2021 [125]. - Total loans at September 30, 2022 were $2.4 billion, an increase of $258.0 million, or 11.9%, compared to December 31, 2021 [125]. - Net loans increased by $258.5 million, or 12.1%, to $2.4 billion as of September 30, 2022, compared to December 31, 2021 [150]. - Investment securities totaled $451.2 million, an increase of $87.1 million, or 23.9%, compared to $364.2 million at December 31, 2021 [155]. Income and Expenses - Net interest income for the third quarter of 2022 was $25.4 million, compared to $23.8 million for the same period in 2021 [130]. - Noninterest income for the third quarter of 2022 was $4.0 million, compared to $2.1 million for the same period in 2021 [133]. - Noninterest expense for Q3 2022 was $17.8 million, an increase from $15.8 million in Q3 2021, with salaries and benefits expense rising to $9.2 million from $8.1 million [243]. - Interest expense increased by $4.7 million, or 27.7%, to $21.5 million for the nine months ended September 30, 2022 from $16.9 million for the same period in 2021 [227]. Loan Loss Provisions - The provision for loan losses for the third quarter of 2022 was $1.5 million, compared to $0.3 million for the same period in 2021 [131]. - The provision for loan losses totaled $2.9 million for the first nine months of 2022, compared to $1.8 million for the same period in 2021 [153]. - Provision for loan losses increased to $1.5 million for Q3 2022 from $0.3 million in Q3 2021, with total charge-offs of $1.8 million compared to $0.7 million in the prior year [236]. - For the nine months ended September 30, 2022, provision for loan losses was $2.9 million, up from $1.8 million in the same period in 2021, with total charge-offs of $5.1 million compared to $1.5 million [237]. Deposits and Equity - Total deposits increased by $112.1 million, or 4.3%, to $2.7 billion from December 31, 2021, to September 30, 2022 [193]. - Total shareholders' equity rose to $231.4 million at September 30, 2022, up from $223.9 million at December 31, 2021, driven by a $16.9 million increase in retained earnings [209]. - Noninterest-bearing demand deposits rose by $2.0 million, or 0.4%, to $534.5 million, primarily due to growth in compensating balances associated with new loan originations [193]. - Total public funds deposits reached $1.07 billion at September 30, 2022, compared to $957.9 million at December 31, 2021, marking a 11.5% increase [204]. Asset Quality - Total impaired loans decreased by $8.2 million to $6.8 million at September 30, 2022 compared to $15.0 million at December 31, 2021 [138]. - Non-performing assets decreased by $6.5 million, or 32.7%, to $13.5 million, representing 0.44% of total assets as of September 30, 2022 [165]. - Nonaccrual loans decreased from $16.7 million at December 31, 2021, to $10.4 million at September 30, 2022 [166]. - The allowance for loan and lease losses was $23.5 million, representing 0.97% of total loans and 198.6% of nonperforming loans [179]. Interest Rate Sensitivity - The interest sensitivity gap at September 30, 2022, was $(983,907,000), indicating a liability-sensitive position [268]. - A 100 basis point increase in interest rates could lead to a decrease in net interest income by 2.52% [271]. - The estimated change in net interest income from a gradual 100 basis point increase in interest rates is a decrease of 1.44% [271]. - The Bank's asset/liability management process aims to maximize net interest income while controlling interest rate risk [261].