EX-99.1
2
fgbi-ex991earningspressrel.htm
PRESS RELEASE DATES APRIL 26, 2023
Document
EXHIBIT 99.1
APRIL 26, 2023
NEWS FOR IMMEDIATE RELEASE
CONTACT: ERIC J. DOSCH, CFO
985.375.0308
First Guaranty Bancshares, Inc. Announces First Quarter 2023 Results
Hammond, Louisiana, April 26, 2023 – First Guaranty Bancshares, Inc. ("First Guaranty") (NASDAQ: FGBI), the holding company for First Guaranty Bank, announced its unaudited financial results for the quarter ending March 31, 2023.
Extraordinary! That is the only word that is appropriate for the performance of First Guaranty Bank. In a time in which the “experts” are all about gloom and doom in the banking industry, extraordinary describes the performance of First Guaranty Bank.
Our loan interest income for the first quarter of 2023 totaled $38,149,000 compared to $35,579,000 for the fourth quarter of 2022 and $28,038,000 for the first quarter of 2022. Yes, our interest expense has significantly reduced our net income; however, that impact has been greatly reduced in the past few months as our loan income has risen to offset the rise in interest expense. As we enter the back side of this cycle, we have already moved past the worst period and should be benefiting greatly.
Our total deposits have grown to $2,862,588 for the quarter ending March 31, 2023 compared to $2,623,935 for the quarter ending March 31, 2022.
We have shown that we can not only survive this “gloom and doom;” but that we can thrive.
Our strength is further shown as our acquisition of Lone Star Bank in Houston continues to move forward through the regulatory process. Additionally, we have received preliminary approval from the City of Fate in Rockwall County for our branch plans in Fate, Texas. Between Lone Star and Fate, we will double our presence in the Texas markets. We are not stopping there. We will continue to seek out growth opportunities to better serve our customers and shareholders.
We recently paid our 119th consecutive quarterly cash dividend. Extraordinary is the right word. We appreciate your support of our efforts. We will continue to build First Guaranty Bank and to build a fortress balance sheet.
Thank you for your attention.
Sincerely,
Alton B. Lewis
President and CEO
First Guaranty, Bancshares, Inc.
About First Guaranty
First Guaranty Bancshares, Inc. is the holding company for First Guaranty Bank, a Louisiana state-chartered bank. Founded in 1934, First Guaranty Bank offers a wide range of financial services and focuses on building client relationships and providing exceptional customer service. First Guaranty Bank currently operates thirty-six locations throughout Louisiana, Texas, Kentucky and West Virginia. First Guaranty’s common stock trades on the NASDAQ under the symbol FGBI. For more information, visit www.fgb.net.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact which represent our current judgement about possible future events. We believe these judgements are reasonable, but these statements are not guarantees of any future events or financial results, and our actual results may differ materially due to a variety of factors, many of which are described in our most recent Annual Report on Form 10-K and our other filings with the U.S. Securities and Exchange Commission. We caution readers not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or otherwise revise any forward-looking statements.
Important Information and Where to Find It
This Report does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed acquisition by First Guaranty of Lone Star. No offer of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended, and no offer to sell or solicitation of an offer to buy shall be made in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
In connection with the proposed Transaction, First Guaranty has filed with the SEC a Registration Statement on Form S-4, as amended, that includes a proxy statement of Lone Star and a prospectus of First Guaranty (as may be further amended or supplemented from time to time, the “Proxy Statement/Prospectus”), and First Guaranty may file with the SEC other relevant documents concerning the proposed Transaction. The definitive Proxy Statement/Prospectus will be mailed to shareholders of Lone Star. BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS, SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BY FIRST GUARANTY, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT FIRST GUARANTY, FGB, LONE STAR AND THE PROPOSED TRANSACTION.
Free copies of the Proxy Statement/Prospectus, as well as other filings containing information about First Guaranty, may be obtained at the SEC’s website (http://www.sec.gov) when they are filed by First Guaranty. You will also be able to obtain these documents, when they are filed, free of charge, from First Guaranty at www.fgb.net under the heading “SEC Filings.” Copies of the Proxy Statement/Prospectus can also be obtained, when it becomes available, free of charge, by directing a request to First Guaranty Bancshares, Inc., 400 East Thomas Street, Hammond, Louisiana 70401, Attn: Investor Relations, (985) 375-0343.
Participants in the Solicitation
This Report is not a solicitation of a proxy from any security holder of Lone Star. However, Lone Star and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Lone Star in respect of the proposed Transaction. Information about Lone Star’s directors and executive officers will be contained in the Proxy Statement/Prospectus. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Proxy Statement/Prospectus and other relevant materials to be filed with the SEC when they become available. Free copies of this document may be obtained as described in the preceding paragraph.
FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except share data)
March 31, 2023
December 31, 2022
Assets
Cash and cash equivalents:
Cash and due from banks
$
168,456
$
82,796
Federal funds sold
479
423
Cash and cash equivalents
168,935
83,219
Investment securities:
Available for sale, at fair value
81,060
131,458
Held to maturity, at cost (estimated fair value of $254,284 and $242,560 respectively)
320,348
320,068
Investment securities
401,408
451,526
Federal Home Loan Bank stock, at cost
4,523
6,528
Loans held for sale
—
—
Loans, net of unearned income
2,574,242
2,519,077
Less: allowance for credit losses
31,568
23,518
Net loans
2,542,674
2,495,559
Premises and equipment, net
58,600
58,206
Goodwill
12,900
12,900
Intangible assets, net
4,770
4,979
Other real estate, net
887
113
Accrued interest receivable
15,332
13,002
Other assets
27,767
25,315
Total Assets
$
3,237,796
$
3,151,347
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing demand
$
519,028
$
524,415
Interest-bearing demand
1,531,321
1,460,259
Savings
206,008
205,760
Time
606,231
533,358
Total deposits
2,862,588
2,723,792
Short-term advances from Federal Home Loan Bank
50,000
120,000
Short-term borrowings
20,000
20,000
Repurchase agreements
6,606
6,442
Accrued interest payable
4,608
4,289
Long-term advances from Federal Home Loan Bank
20,000
—
Senior long-term debt
21,116
21,927
Junior subordinated debentures
15,000
15,000
Other liabilities
9,202
4,906
Total Liabilities
3,009,120
2,916,356
Shareholders' Equity
Preferred stock, Series A - $1,000 par value - 100,000 shares authorized
Non-cumulative perpetual; 34,500 issued and outstanding
33,058
33,058
Common stock, $1 par value - 100,600,000 shares outstanding; 10,716,796 shares issued
10,717
10,717
Surplus
130,093
130,093
Retained earnings
69,622
76,351
Accumulated other comprehensive (loss) income
(14,814)
(15,228)
Total Shareholders' Equity
228,676
234,991
Total Liabilities and Shareholders' Equity
$
3,237,796
$
3,151,347
See Notes to Consolidated Financial Statements
FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Three Months Ended March 31,
(in thousands, except share data)
2023
2022
Interest Income:
Loans (including fees)
$
38,149
$
28,038
Deposits with other banks
751
102
Securities (including FHLB stock)
2,387
2,339
Total Interest Income
41,287
30,479
Interest Expense:
Demand deposits
13,049
2,276
Savings deposits
579
61
Time deposits
3,576
2,755
Borrowings
1,782
404
Total Interest Expense
18,986
5,496
Net Interest Income
22,301
24,983
Less: Provision for credit losses
314
632
Net Interest Income after Provision for Credit Losses
21,987
24,351
Noninterest Income:
Service charges, commissions and fees
785
777
ATM and debit card fees
825
823
Net gains (losses) on securities
—
(17)
Net gains (losses) on sale of loans
12
(1)
Other
1,082
380
Total Noninterest Income
2,704
1,962
Total Business Revenue, Net of Provision for Credit Losses
24,691
26,313
Noninterest Expense:
Salaries and employee benefits
10,004
8,980
Occupancy and equipment expense
2,202
2,201
Other
7,960
5,570
Total Noninterest Expense
20,166
16,751
Income Before Income Taxes
4,525
9,562
Less: Provision for income taxes
1,057
1,977
Net Income
3,468
7,585
Less: Preferred stock dividends
582
582
Net Income Available to Common Shareholders
$
2,886
$
7,003
Per Common Share:
Earnings
$
0.27
$
0.65
Cash dividends paid
$
0.16
$
0.16
Weighted Average Common Shares Outstanding
10,716,796
10,716,796
See Notes to Consolidated Financial Statements
FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)
Three Months Ended March 31, 2023
Three Months Ended March 31, 2022
(in thousands except for %)
Average Balance
Interest
Yield/Rate (5)
Average Balance
Interest
Yield/Rate (5)
Assets
Interest-earning assets:
Interest-earning deposits with banks
$
72,506
$
751
4.20
%
$
231,556
$
102
0.18
%
Securities (including FHLB stock)
426,625
2,387
2.27
%
434,420
2,339
2.18
%
Federal funds sold
431
—
—
%
232
—
—
%
Loans held for sale
—
—
—
%
—
—
—
%
Loans, net of unearned income (6)
2,528,622
38,149
6.12
%
2,154,264
28,038
5.28
%
Total interest-earning assets
3,028,184
$
41,287
5.53
%
2,820,472
$
30,479
4.38
%
Noninterest-earning assets:
Cash and due from banks
19,269
18,481
Premises and equipment, net
58,152
58,393
Other assets
26,737
28,589
Total Assets
$
3,132,342
$
2,925,935
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Demand deposits
$
1,488,105
$
13,049
3.56
%
$
1,323,532
$
2,276
0.70
%
Savings deposits
204,271
579
1.15
%
204,008
61
0.12
%
Time deposits
561,154
3,576
2.58
%
576,199
2,755
1.94
%
Borrowings
120,803
1,782
5.98
%
47,886
404
3.42
%
Total interest-bearing liabilities
2,374,333
$
18,986
3.24
%
2,151,625
$
5,496
1.04
%
Noninterest-bearing liabilities:
Demand deposits
510,302
545,013
Other
12,749
6,839
Total Liabilities
2,897,384
2,703,477
Shareholders' equity
234,958
222,458
Total Liabilities and Shareholders' Equity
$
3,132,342
$
2,925,935
Net interest income
$
22,301
$
24,983
Net interest rate spread (1)
2.29
%
3.34
%
Net interest-earning assets (2)
$
653,851
$
668,847
Net interest margin (3), (4)
2.99
%
3.59
%
Average interest-earning assets to interest-bearing liabilities
127.54
%
131.09
%
(1)Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(2)Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
(3)Net interest margin represents net interest income divided by average total interest-earning assets.
(4)The tax adjusted net interest margin was 2.99% and 3.60% for the above periods ended March 31, 2023 and 2022 respectively. A 21% tax rate was used to calculate the effect on securities income from tax exempt securities for the above periods ended March 31, 2023 and 2022 respectively.
(5)Annualized.
(6)Includes loan fees of $1.4 million and $2.1 million for the three months ended March 31, 2023 and 2022 respectively. PPP loan fee income of $5,000 and $0.6 million was recognized for the three months ended March 31, 2023 and 2022 respectively.
The following table summarizes the components of First Guaranty's loan portfolio as of March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022:
March 31, 2023
December 31, 2022
September 30, 2022
June 30, 2022
(in thousands except for %)
Balance
As % of Category
Balance
As % of Category
Balance
As % of Category
Balance
As % of Category
Real Estate:
Construction & land development
$
289,486
11.2
%
$
233,091
9.2
%
$
204,640
8.4
%
$
175,221
7.6
%
Farmland
23,065
0.9
%
24,823
1.0
%
24,556
1.0
%
28,152
1.2
%
1- 4 Family
385,984
14.9
%
366,330
14.5
%
352,501
14.5
%
310,403
13.5
%
Multifamily
120,620
4.7
%
119,785
4.7
%
118,273
4.9
%
105,454
4.6
%
Non-farm non-residential
1,027,199
39.8
%
992,929
39.3
%
981,954
40.5
%
962,442
41.8
%
Total Real Estate
1,846,354
71.5
%
1,736,958
68.7
%
1,681,924
69.3
%
1,581,672
68.7
%
Non-Real Estate:
Agricultural
40,351
1.6
%
39,045
1.5
%
47,642
2.0
%
37,164
1.6
%
Commercial and industrial(1)
344,332
13.3
%
385,279
15.3
%
365,549
15.1
%
397,233
17.3
%
Commercial leases
302,450
11.7
%
317,574
12.6
%
281,010
11.6
%
237,560
10.3
%
Consumer and other
49,157
1.9
%
47,864
1.9
%
48,188
2.0
%
48,448
2.1
%
Total Non-Real Estate
736,290
28.5
%
789,762
31.3
%
742,389
30.7
%
720,405
31.3
%
Total loans before unearned income
2,582,644
100.0
%
2,526,720
100.0
%
2,424,313
100.0
%
2,302,077
100.0
%
Unearned income
(8,402)
(7,643)
(6,986)
(6,339)
Total loans net of unearned income
$
2,574,242
$
2,519,077
$
2,417,327
$
2,295,738
(1) Includes PPP loans fully guaranteed by the SBA of $5.7 million, $5.9 million, $6.1 million, and $12.0 million at March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022, respectively.
The table below sets forth the amounts and categories of our nonperforming assets at the dates indicated.
(in thousands)
March 31, 2023
December 31, 2022
September 30, 2022
June 30, 2022
Nonaccrual loans:
Real Estate:
Construction and land development
$
221
$
225
$
104
$
—
Farmland
677
290
290
290
1- 4 family
6,209
3,826
3,646
3,148
Multifamily
—
—
—
—
Non-farm non-residential
2,675
3,746
2,629
2,925
Total Real Estate
9,782
8,087
6,669
6,363
Non-Real Estate:
Agricultural
1,469
1,622
1,645
1,791
Commercial and industrial
1,026
819
876
864
Commercial leases
1,799
1,799
—
152
Consumer and other
1,593
1,239
1,168
991
Total Non-Real Estate
5,887
5,479
3,689
3,798
Total nonaccrual loans
15,669
13,566
10,358
10,161
Loans 90 days and greater delinquent & accruing:
Real Estate:
Construction and land development
190
427
326
—
Farmland
—
—
—
—
1- 4 family
—
332
359
210
Multifamily
—
157
13
—
Non-farm non-residential
1,641
103
318
508
Total Real Estate
1,831
1,019
1,016
718
Non-Real Estate:
Agricultural
—
—
—
—
Commercial and industrial
6,244
123
444
123
Commercial leases
—
—
—
—
Consumer and other
—
—
—
—
Total Non-Real Estate
6,244
123
444
123
Total loans 90 days and greater delinquent & accruing
8,075
1,142
1,460
841
Total non-performing loans
23,744
14,708
11,818
11,002
Real Estate Owned:
Real Estate Loans:
Construction and land development
—
—
—
—
Farmland
—
—
—
—
1- 4 family
113
113
249
218
Multifamily
—
—
—
—
Non-farm non-residential
774
—
1,418
1,416
Total Real Estate
887
113
1,667
1,634
Non-Real Estate Loans:
Agricultural
—
—
—
—
Commercial and industrial
—
—
—
—
Commercial leases
—
—
—
—
Consumer and other
—
—
—
—
Total Non-Real Estate
—
—
—
—
Total Real Estate Owned
887
113
1,667
1,634
Total non-performing assets
$
24,631
$
14,821
$
13,485
$
12,636
Non-performing assets to total loans
0.96
%
0.59
%
0.56
%
0.55
%
Non-performing assets to total assets
0.76
%
0.47
%
0.44
%
0.43
%
Non-performing loans to total loans
0.92
%
0.58
%
0.49
%
0.48
%
Nonaccrual loans to total loans
0.61
%
0.54
%
0.43
%
0.44
%
Allowance for credit losses to nonaccrual loans
201.47
%
173.36
%
226.57
%
232.09
%
Non-GAAP Financial Measures
Our accounting and reporting policies conform to accounting principles generally accepted in the United States, or GAAP, and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional metrics. Tangible book value per share and the ratio of tangible equity to tangible assets are not financial measures recognized under GAAP and, therefore, are considered non-GAAP financial measures.
Our management, banking regulators, many financial analysts and other investors use these non-GAAP financial measures to compare the capital adequacy of banking organizations with significant amounts of preferred equity and/or goodwill or other intangible assets, which typically stem from the use of the purchase accounting method of accounting for mergers and acquisitions. Tangible equity, tangible assets, tangible book value per share or related measures should not be considered in isolation or as a substitute for total shareholders' equity, total assets, book value per share or any other measure calculated in accordance with GAAP. Moreover, the manner in which we calculate tangible equity, tangible assets, tangible book value per share and any other related measures may differ from that of other companies reporting measures with similar names.
The following table reconciles, as of the dates set forth below, shareholders' equity (on a GAAP basis) to tangible equity and total assets (on a GAAP basis) to tangible assets and calculates our tangible book value per share.
