First Guaranty Bancshares, Inc. Announces Second Quarter 2023 Results
Hammond, Louisiana, August 8, 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 June 30, 2023.
Resilient: Springing back, rebounding. Returning to the original form for position after being bent, compressed or stretched. Recovering readily from illness, depression, adversity, or the like; buoyant. Random House Webster’s Unabridged Dictionary Second Edition.
Another good word is strong. An even better word is tough. These are words that describe what First Guaranty has been during a six month period in which we have survived wound after wound, not of our own causing as we continue to deliver to our shareholders, customers, and our staff members extraordinary results.
The latest of these have been the FDIC deposit insurance adjustment which was $450,000 for the second quarter.
Enough crying over spilt milk. This is what we did to make it better. Our interest income for the second quarter of 2023 increased to $43,781,000 compared to $32,540,000 for the second quarter of 2022. For the six months ending June 30, 2023, our interest income totaled $85,068,000 compared to $63,019,000. Our interest expense stabilized at $22,868,000 for the quarter compared to $41,854,000 for the six month period ending June 30, 2023.
We have significantly increased our loan interest income to offset the increased cost of deposits which are set by the Federal Reserve. For the quarter, we made over $2,000,000 for our shareholders even after the FDIC assessment.
Basically, we have and will continue to make a lot of money for our shareholders. We are working very hard to control non-interest expense. We are working very hard to expand our interest margin. Our lenders have done a great job working to increase the rates we receive for our loans.
Let’s keep moving forward. Let’s be resilient. Let’s be TOUGH.
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.
FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except share data)
June 30, 2023
December 31, 2022
Assets
Cash and cash equivalents:
Cash and due from banks
$
145,773
$
82,796
Federal funds sold
455
423
Cash and cash equivalents
146,228
83,219
Investment securities:
Available for sale, at fair value
80,153
131,458
Held to maturity, at cost and net of allowance for credit losses of $100 and $0 (estimated fair value of $250,008 and $242,560 respectively)
320,523
320,068
Investment securities
400,676
451,526
Federal Home Loan Bank stock, at cost
7,901
6,528
Loans held for sale
—
—
Loans, net of unearned income
2,590,666
2,519,077
Less: allowance for credit losses
31,861
23,518
Net loans
2,558,805
2,495,559
Premises and equipment, net
60,849
58,206
Goodwill
12,900
12,900
Intangible assets, net
4,583
4,979
Other real estate, net
1,273
113
Accrued interest receivable
15,099
13,002
Other assets
27,732
25,315
Total Assets
$
3,236,046
$
3,151,347
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing demand
$
466,172
$
524,415
Interest-bearing demand
1,448,492
1,460,259
Savings
222,296
205,760
Time
630,459
533,358
Total deposits
2,767,419
2,723,792
Short-term advances from Federal Home Loan Bank
30,000
120,000
Short-term borrowings
20,000
20,000
Repurchase agreements
7,409
6,442
Accrued interest payable
6,996
4,289
Long-term advances from Federal Home Loan Bank
120,000
—
Senior long-term debt
20,305
21,927
Junior subordinated debentures
15,000
15,000
Other liabilities
10,060
4,906
Total Liabilities
2,997,189
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 authorized; 11,431,083 and 10,716,796 shares issued and outstanding
11,431
10,717
Surplus
139,379
130,093
Retained earnings
69,887
76,351
Accumulated other comprehensive (loss) income
(14,898)
(15,228)
Total Shareholders' Equity
238,857
234,991
Total Liabilities and Shareholders' Equity
$
3,236,046
$
3,151,347
See Notes to Consolidated Financial Statements
FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
(in thousands, except share data)
2023
2022
2023
2022
Interest Income:
Loans (including fees)
$
40,290
$
29,999
$
78,439
$
58,037
Deposits with other banks
1,071
261
1,822
363
Securities (including FHLB stock)
2,420
2,280
4,807
4,619
Total Interest Income
43,781
32,540
85,068
63,019
Interest Expense:
Demand deposits
15,036
2,884
28,085
5,160
Savings deposits
838
101
1,417
162
Time deposits
5,224
2,540
8,800
5,295
Borrowings
1,770
705
3,552
1,109
Total Interest Expense
22,868
6,230
41,854
11,726
Net Interest Income
20,913
26,310
43,214
51,293
Less: Provision for credit losses
548
757
862
1,389
Net Interest Income after Provision for Credit Losses
20,365
25,553
42,352
49,904
Noninterest Income:
Service charges, commissions and fees
818
773
1,603
1,550
ATM and debit card fees
828
904
1,653
1,727
Net gains (losses) on securities
—
—
—
(17)
Net gains on sale of loans
—
90
12
89
Other
1,166
760
2,248
1,140
Total Noninterest Income
2,812
2,527
5,516
4,489
Total Business Revenue, Net of Provision for Credit Losses
23,177
28,080
47,868
54,393
Noninterest Expense:
Salaries and employee benefits
9,932
9,085
19,936
18,065
Occupancy and equipment expense
2,219
2,252
4,421
4,453
Other
7,584
6,482
15,544
12,052
Total Noninterest Expense
19,735
17,819
39,901
34,570
Income Before Income Taxes
3,442
10,261
7,967
19,823
Less: Provision for income taxes
766
2,137
1,823
4,114
Net Income
2,676
8,124
6,144
15,709
Less: Preferred stock dividends
582
582
1,164
1,164
Net Income Available to Common Shareholders
$
2,094
$
7,542
$
4,980
$
14,545
Per Common Share:
Earnings
$
0.19
$
0.70
$
0.46
$
1.36
Cash dividends paid
$
0.16
$
0.16
$
0.32
$
0.32
Weighted Average Common Shares Outstanding
10,913,029
10,716,796
10,815,454
10,716,796
See Notes to Consolidated Financial Statements
FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)
Three Months Ended June 30, 2023
Three Months Ended June 30, 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
$
90,388
$
1,071
4.75
%
$
135,072
$
261
0.77
%
Securities (including FHLB stock)
407,689
2,420
2.38
%
455,224
2,280
2.01
%
Federal funds sold
410
—
—
%
162
—
—
%
Loans held for sale
—
—
—
%
—
—
—
%
Loans, net of unearned income (6)
2,568,051
40,290
6.29
%
2,244,110
29,999
5.36
%
Total interest-earning assets
3,066,538
$
43,781
5.73
%
2,834,568
$
32,540
4.60
%
Noninterest-earning assets:
Cash and due from banks
18,443
19,334
Premises and equipment, net
59,924
58,235
Other assets
28,958
28,828
Total Assets
$
3,173,863
$
2,940,965
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Demand deposits
$
1,458,353
$
15,036
4.14
%
$
1,327,954
$
2,884
0.87
%
Savings deposits
214,055
838
1.57
%
211,281
101
0.19
%
Time deposits
631,605
5,224
3.32
%
549,052
2,540
1.86
%
Borrowings
122,969
1,770
5.77
%
55,536
705
5.10
%
Total interest-bearing liabilities
2,426,982
$
22,868
3.78
%
2,143,823
$
6,230
1.17
%
Noninterest-bearing liabilities:
Demand deposits
496,209
563,832
Other
17,366
7,947
Total Liabilities
2,940,557
2,715,602
Shareholders' equity
233,306
225,363
Total Liabilities and Shareholders' Equity
$
3,173,863
$
2,940,965
Net interest income
$
20,913
$
26,310
Net interest rate spread (1)
1.95
%
3.43
%
Net interest-earning assets (2)
$
639,556
$
690,745
Net interest margin (3), (4)
2.74
%
3.72
%
Average interest-earning assets to interest-bearing liabilities
126.35
%
132.22
%
(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 2.74% and 3.73% for the above periods ended June 30, 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 June 30, 2023 and 2022 respectively.
(5)Annualized.
(6)Includes loan fees of $1.4 million and $2.5 million for the three months ended June 30, 2023 and 2022 respectively. PPP loan fee income of $11,000 and $0.5 million was recognized for the three months ended June 30, 2023 and 2022 respectively.
FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)
Six Months Ended June 30, 2023
Six Months Ended June 30, 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
$
81,497
$
1,822
4.51
%
$
183,047
$
363
0.40
%
Securities (including FHLB stock)
417,104
4,807
2.32
%
444,879
4,619
2.09
%
Federal funds sold
421
—
—
%
197
—
—
%
Loans held for sale
—
—
—
%
—
—
—
%
Loans, net of unearned income (6)
2,548,446
78,439
6.21
%
2,199,435
58,037
5.32
%
Total interest-earning assets
3,047,468
$
85,068
5.63
%
2,827,558
$
63,019
4.49
%
Noninterest-earning assets:
Cash and due from banks
18,853
18,910
Premises and equipment, net
59,043
58,314
Other assets
27,854
28,709
Total Assets
$
3,153,218
$
2,933,491
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Demand deposits
$
1,473,147
$
28,085
3.84
%
$
1,325,755
$
5,160
0.78
%
Savings deposits
209,190
1,417
1.37
%
207,664
162
0.16
%
Time deposits
596,575
8,800
2.97
%
562,550
5,295
1.90
%
Borrowings
121,892
3,552
5.88
%
51,732
1,109
4.32
%
Total interest-bearing liabilities
2,400,804
$
41,854
3.52
%
2,147,701
$
11,726
1.10
%
Noninterest-bearing liabilities:
Demand deposits
503,216
554,475
Other
15,071
7,396
Total Liabilities
2,919,091
2,709,572
Shareholders' equity
234,127
223,919
Total Liabilities and Shareholders' Equity
$
3,153,218
$
2,933,491
Net interest income
$
43,214
$
51,293
Net interest rate spread (1)
2.11
%
3.39
%
Net interest-earning assets (2)
$
646,664
$
679,857
Net interest margin (3), (4)
2.86
%
3.66
%
Average interest-earning assets to interest-bearing liabilities
126.94
%
131.66
%
(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 2.86% and 3.66% for the above periods ended June 30, 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 June 30, 2023 and 2022 respectively.
(5)Annualized.
(6)Includes loan fees of $2.8 million and $4.5 million for the six months ended June 30, 2023 and 2022 respectively. PPP loan fee income of $16,000 and $1.1 million was recognized for the six months ended June 30, 2023 and 2022 respectively.
The following table summarizes the components of First Guaranty's loan portfolio as of June 30, 2023, March 31, 2023, December 31, 2022, and September 30, 2022:
June 30, 2023
March 31, 2023
December 31, 2022
September 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
$
301,259
11.6
%
$
289,486
11.2
%
$
233,091
9.2
%
$
204,640
8.4
%
Farmland
29,398
1.1
%
23,065
0.9
%
24,823
1.0
%
24,556
1.0
%
1- 4 Family
406,148
15.6
%
385,984
14.9
%
366,330
14.5
%
352,501
14.5
%
Multifamily
121,342
4.7
%
120,620
4.7
%
119,785
4.7
%
118,273
4.9
%
Non-farm non-residential
1,025,073
39.5
%
1,027,199
39.8
%
992,929
39.3
%
981,954
40.5
%
Total Real Estate
1,883,220
72.5
%
1,846,354
71.5
%
1,736,958
68.7
%
1,681,924
69.3
%
Non-Real Estate:
Agricultural
47,924
1.8
%
40,351
1.6
%
39,045
1.5
%
47,642
2.0
%
Commercial and industrial(1)
338,023
13.0
%
344,332
13.3
%
385,279
15.3
%
365,549
15.1
%
Commercial leases
282,161
10.9
%
302,450
11.7
%
317,574
12.6
%
281,010
11.6
%
Consumer and other
47,771
1.8
%
49,157
1.9
%
47,864
1.9
%
48,188
2.0
%
Total Non-Real Estate
715,879
27.5
%
736,290
28.5
%
789,762
31.3
%
742,389
30.7
%
Total loans before unearned income
2,599,099
100.0
%
2,582,644
100.0
%
2,526,720
100.0
%
2,424,313
100.0
%
Unearned income
(8,433)
(8,402)
(7,643)
(6,986)
Total loans net of unearned income
$
2,590,666
$
2,574,242
$
2,519,077
$
2,417,327
(1) Includes PPP loans fully guaranteed by the SBA of $5.4 million, $5.7 million, $5.9 million, and $6.1 million at June 30, 2023, March 31, 2023, December 31, 2022, and September 30, 2022, respectively.
The table below sets forth the amounts and categories of our nonperforming assets at the dates indicated.
(in thousands)
June 30, 2023
March 31, 2023
December 31, 2022
September 30, 2022
Nonaccrual loans:
Real Estate:
Construction and land development
$
518
$
221
$
225
$
104
Farmland
867
677
290
290
1- 4 family
6,320
6,209
3,826
3,646
Multifamily
537
—
—
—
Non-farm non-residential
8,285
2,675
3,746
2,629
Total Real Estate
16,527
9,782
8,087
6,669
Non-Real Estate:
Agricultural
1,375
1,469
1,622
1,645
Commercial and industrial
2,167
1,026
819
876
Commercial leases
1,818
1,799
1,799
—
Consumer and other
2,016
1,593
1,239
1,168
Total Non-Real Estate
7,376
5,887
5,479
3,689
Total nonaccrual loans
23,903
15,669
13,566
10,358
Loans 90 days and greater delinquent & accruing:
Real Estate:
Construction and land development
182
190
427
326
Farmland
—
—
—
—
1- 4 family
295
—
332
359
Multifamily
—
—
157
13
Non-farm non-residential
—
1,641
103
318
Total Real Estate
477
1,831
1,019
1,016
Non-Real Estate:
Agricultural
61
—
—
—
Commercial and industrial
—
6,244
123
444
Commercial leases
—
—
—
—
Consumer and other
—
—
—
—
Total Non-Real Estate
61
6,244
123
444
Total loans 90 days and greater delinquent & accruing
538
8,075
1,142
1,460
Total non-performing loans
24,441
23,744
14,708
11,818
Real Estate Owned:
Real Estate Loans:
Construction and land development
251
—
—
—
Farmland
—
—
—
—
1- 4 family
248
113
113
249
Multifamily
—
—
—
—
Non-farm non-residential
774
774
—
1,418
Total Real Estate
1,273
887
113
1,667
Non-Real Estate Loans:
Agricultural
—
—
—
—
Commercial and industrial
—
—
—
—
Commercial leases
—
—
—
—
Consumer and other
—
—
—
—
Total Non-Real Estate
—
—
—
—
Total Real Estate Owned
1,273
887
113
1,667
Total non-performing assets
$
25,714
$
24,631
$
14,821
$
13,485
Non-performing assets to total loans
0.99
%
0.96
%
0.59
%
0.56
%
Non-performing assets to total assets
0.79
%
0.76
%
0.47
%
0.44
%
Non-performing loans to total loans
0.94
%
0.92
%
0.58
%
0.49
%
Nonaccrual loans to total loans
0.92
%
0.61
%
0.54
%
0.43
%
Allowance for credit losses to nonaccrual loans
133.29
%
201.47
%
173.36
%
226.57
%
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.