First Guaranty Bank(US:FGBI)2022-03-15 16:00Financial Performance - As of December 31, 2021, the company had consolidated total assets of $2.9 billion, total deposits of $2.6 billion, and total shareholders' equity of $223.9 million[17]. - The loan-to-deposit ratio was 83.2% as of December 31, 2021, indicating a strong focus on increasing total loans as a percentage of assets[36]. - The company has grown from $159 million in assets in 1993 to $2.9 billion in assets by the end of 2021, demonstrating significant growth over the years[19]. - The company has completed four acquisitions since its Share Exchange, which added stable deposits and expanded its geographic footprint[20]. - The company has a deposit market share of 37.5% in the Hammond MSA, placing it first overall in that market[24]. - Total deposits held by the company were $2.6 billion as of December 31, 2021, including $957.9 million in public funds deposits[77][78]. - The investment securities portfolio had a fair value of $266.7 million, with U.S. government agency securities comprising the largest share[80]. - The company generated $68.7 million of pre-tax income from its securities portfolio over the last five years, with no temporary impairments recognized for the year ended December 31, 2021[81]. - The bank had $43.9 million in brokered deposits, primarily in reciprocal deposit programs, as of December 31, 2021[79]. Loan Portfolio - As of December 31, 2021, non-farm non-residential loans totaled $886.4 million, representing 40.9% of the total loan portfolio, with owner-occupied loans at $332.2 million, or 37.5% of non-farm non-residential loans[50]. - Commercial and industrial loans amounted to $398.4 million, or 18.4% of the total loan portfolio, with commercial term loans at $157.9 million, or 39.6% of commercial and industrial loans[53]. - The company holds $288.3 million in one- to four-family residential real estate loans, accounting for 13.3% of the total loan portfolio, with jumbo loans totaling $29.1 million[57]. - Multifamily loans stood at $65.8 million, or 3.0% of the total loan portfolio, with underwriting following guidelines for non-farm non-residential loans[61]. - The total loan portfolio included $174.3 million in construction and land development loans, representing 8.1% of the total[64]. - Agricultural loans amounted to $26.7 million, or 1.2% of the total loan portfolio, with a focus on crops and secured by various collateral[66]. - Farmland loans totaled $31.8 million, accounting for 1.5% of the total loan portfolio, with terms up to five years and potential for 100% financing with guarantees[68]. - Commercial leases reached $246.0 million, representing 11.4% of the total loan portfolio, with an average size of approximately $16.0 million[69]. - Consumer and other loans totaled $48.1 million, or 2.2% of the total loan portfolio, with $23.8 million being unsecured[70]. Strategic Initiatives - The company plans to continue expanding its Texas markets in Dallas-Fort Worth-Arlington and Waco both organically and through strategic acquisitions[36]. - The company aims to grow its market share along key interstate corridors in Louisiana and expand its services to small and medium-sized businesses[36]. - The company is expanding its small business lending program, focusing on SBA, USDA, and commercial leasing loans, leveraging expertise from the acquisition of Synergy Bank[39]. - The company plans to pursue strategic acquisitions of community banks and non-banking financial companies to supplement organic growth, focusing on targets with quality loan portfolios[45]. - The bank's expansion into Kentucky and West Virginia includes loan and deposit production offices, indicating a strategic move to grow its market presence[23]. - First Guaranty Bank plans to grow its loan portfolio by targeting small and medium-sized businesses in various sectors, including agriculture and healthcare[37]. Regulatory Environment - The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 exempts banks with less than $10 billion in assets from certain regulations, including the ability-to-repay requirements for qualified residential mortgage loans[93]. - The CARES Act provided over $2 trillion to support the economy during the COVID-19 pandemic, including the establishment of the Paycheck Protection Program (PPP) to support affected businesses[95]. - As of December 31, 2021, First Guaranty Bank exceeded all regulatory capital requirements and was considered well-capitalized based on FDIC guidelines[104]. - Federal regulations require a common equity Tier 1 capital to risk-based assets ratio of 4.5%, a Tier 1 capital to risk-based assets ratio of 6.0%, and a total capital to risk-based assets of 8%[97]. - The community bank leverage ratio was temporarily reduced to 8% under the CARES Act, with plans to revert to 9% thereafter[103]. - First Guaranty Bank is subject to concentrated commercial real estate lending regulations, which require heightened risk management practices if certain concentration thresholds are met[106]. - Transactions between First Guaranty Bank and its affiliates are limited to 10% of the institution's capital stock and surplus for any one affiliate, with an aggregate limit of 20%[114]. - The bank's ability to pay dividends is subject to Louisiana law, which requires an unimpaired surplus equal to 50% of its outstanding capital stock before and after the dividend payment[96]. - The FDIC has the authority to establish higher capital requirements for individual institutions if deemed necessary based on qualitative factors[102]. - First Guaranty Bank did not elect to follow the community bank leverage ratio as of December 31, 2021[103]. Competition and Market Challenges - The bank faces intense competition in loan making and deposit attraction, particularly from larger financial institutions in its market areas[83]. - The bank's market areas face intense competition from larger financial institutions, impacting its ability to attract deposits and make loans[83]. Employee and Operational Information - The bank employed 463 full-time and 27 part-time employees as of December 31, 2021, with no collective bargaining agreements in place[86]. - The bank is required to maintain non-interest-earning reserves against transaction accounts, which were reduced to zero in March 2020 due to COVID-19[121]. - The bank is subject to consolidated regulatory capital requirements as a bank holding company, but is not currently subject to the Federal Reserve Board's consolidated capital adequacy guidelines as it does not have more than $3.0 billion in total assets[131]. - The bank's operations are subject to various federal laws, including the Truth-In-Lending Act and the Equal Credit Opportunity Act, which govern credit transactions[125]. - First Guaranty Bank has elected "financial holding company" status, allowing it to engage in a broader array of financial activities[130].