First Guaranty Bank(FGBI) - 2022 Q1 - Quarterly Report

Financial Performance - Net income for the first quarter of 2022 was $7.6 million, an increase of $2.6 million or 51% from $5.0 million in the first quarter of 2021[124]. - Earnings per common share increased to $0.65 for the first quarter of 2022, compared to $0.47 for the same period in 2021[124]. - Net interest income for the first quarter of 2022 was $25.0 million, up from $19.6 million in the same period of 2021[127]. - The net interest margin increased by 34 basis points to 3.59% for the three months ended March 31, 2022, compared to 3.25% for the same period in 2021[130]. - Noninterest income decreased to $2.0 million for the three months ended March 31, 2022, down from $2.3 million in the same period in 2021, primarily due to increased losses on securities sales[223]. - Noninterest expense rose to $16.8 million for the three months ended March 31, 2022, compared to $15.0 million for the same period in 2021, driven by higher salaries and benefits expenses[225]. - The provision for income taxes increased to $2.0 million for the three months ended March 31, 2022, up from $1.3 million in the same period in 2021, reflecting an increase in income before income taxes[227]. Asset and Loan Growth - Total assets increased by $32.0 million, or 1.1%, to $2.9 billion as of March 31, 2022, compared to December 31, 2021[123]. - Total loans rose by $71.8 million, or 3.3%, to $2.2 billion at March 31, 2022, compared to December 31, 2021[123]. - The average outstanding loan balance increased to $2.15 billion at March 31, 2022, compared to $1.91 billion at March 31, 2021[185]. - Investment securities increased by $88.6 million to $452.8 million at March 31, 2022, compared to $364.2 million at December 31, 2021[150]. - Held to maturity securities increased by $166.0 million, or 108.1%, to $319.6 million at March 31, 2022[153]. - As of March 31, 2022, 66.6% of the loan portfolio was secured by real estate, with non-farm non-residential loans making up 40.0% of the portfolio[146]. Loan Quality and Impairment - Total impaired loans decreased by $3.5 million to $11.5 million at March 31, 2022, compared to $15.0 million at December 31, 2021[133]. - Special mention loans decreased by $43.9 million to $94.8 million at March 31, 2022, compared to $138.7 million at December 31, 2021[147]. - Non-performing assets totaled $17.9 million, or 0.62% of total assets, a decrease from $20.0 million, or 0.70%, at December 31, 2021[160]. - Nonaccrual loans decreased from $16.7 million at December 31, 2021, to $15.1 million at March 31, 2022[161]. - Loans 90 days or greater delinquent and still accruing totaled $1.0 million, a decrease of $0.3 million compared to $1.2 million at December 31, 2021[162]. - The allowance for loan and lease losses totaled $24.1 million at March 31, 2022, with loan charge-offs of $0.8 million in Q1 2022[148]. Deposits and Funding - Total deposits increased by $27.4 million, or 1.1%, to $2.6 billion from December 31, 2021, to March 31, 2022[187]. - Noninterest-bearing demand deposits rose by $23.4 million, or 4.4%, to $556.0 million at March 31, 2022, primarily due to growth in compensating balances[187]. - Interest-bearing demand deposits increased by $23.8 million, or 1.9%, to $1.3 billion at March 31, 2022, mainly concentrated in public funds[187]. - Time deposits decreased by $23.6 million, or 4.0%, to $563.0 million at March 31, 2022, due to the transition of public funds customers to interest-bearing deposits[187]. - Public funds deposits totaled $979.5 million at March 31, 2022, compared to $957.9 million at December 31, 2021, representing an increase due to seasonal fluctuations[196]. Capital and Ratios - Total shareholders' equity decreased to $221.8 million at March 31, 2022, from $223.9 million at December 31, 2021[203]. - As of March 31, 2022, the Bank's Tier 1 Risk-based Capital Ratio was 8.00%, down from 10.40% at December 31, 2021, indicating a decrease in capital adequacy[239]. - The capital conservation buffer was 3.38% as of March 31, 2022, exceeding the minimum requirement of 2.50%[236]. Interest Income and Expense - Interest income increased by $5.1 million, or 20.3%, to $30.5 million for the three months ended March 31, 2022, compared to the prior year period[210]. - Interest expense declined due to decreases in market interest rates and a strategy to increase lower-cost deposits[205]. - The average yield of interest-earning assets rose by 18 basis points to 4.38% for the three months ended March 31, 2022, up from 4.20% in the same period of 2021[210]. - The net interest rate spread increased by 35 basis points to 3.34% for the three months ended March 31, 2022, compared to 2.99% for the same period in 2021[208]. - Interest-sensitive assets totaled $992,440,000 within the one-year time frame[248]. Risk Management - The interest sensitivity analysis indicated a liability-sensitive position with a negative cumulative gap of $(804,077,000) on a one-year basis[245]. - The company maintains exposure to interest rate fluctuations within prudent levels using various investment strategies, including internal modeling[243]. - The interest sensitivity gap reflects the difference between total interest-sensitive assets and liabilities, indicating potential risk exposure[246]. - The analysis does not factor in prepayments or interest rate floors, which could significantly alter the results[245].