First Guaranty (FGBI) Q2 Loss Jumps 194%

Core Viewpoint - First Guaranty Bancshares reported a significant net loss in Q2 2025, driven by credit issues and portfolio restructuring, despite modest growth in net interest income [1][5][10] Financial Performance - GAAP EPS for Q2 2025 was a loss of $0.50, missing analyst expectations by $0.30, and representing a 194.3% decline year-over-year from a profit of $0.53 in Q2 2024 [2][5] - Net income (GAAP) fell to a loss of $5.8 million from a profit of $7.2 million in Q2 2024, marking a 180.7% decrease [2][5] - Net interest income increased to $22.2 million, a 4.7% rise from $21.2 million in Q2 2024 [2][6] - Noninterest expense decreased by 16% to $17.3 million compared to Q2 2024 [2][6] Asset Quality and Risk Management - The allowance for credit losses rose to 2.36% of total loans, up from 1.29% at the end of 2024, reflecting management's concerns over troubled loans [2][7] - Non-performing loans constituted 4.96% of total loans, an increase from 4.46% at the prior year-end, with six large loan relationships accounting for 75% of the nonperforming balance [7][8] Strategic Focus - The bank is prioritizing risk control within its loan portfolio, particularly in commercial real estate, and is implementing cost management measures including staff reductions [4][8] - The bank's real estate secured loans decreased to $1.94 billion, representing 80.1% of the total portfolio, with expectations for further reductions [8] - A significant reduction in the quarterly dividend to $0.01 per share from $0.16 in Q2 2024 was made to enhance capital during restructuring efforts [10] Future Outlook - Management did not provide specific revenue or earnings guidance but indicated a continued focus on reducing commercial real estate loan exposures and plans for further asset sales [9]