First Guaranty Bancshares, Inc. Announces Key Developments and Second Quarter 2024 Financial Results
HAMMOND, La., July 24, 2024 (GLOBE NEWSWIRE) -- First Guaranty Bancshares, Inc. ("First Guaranty") (NASDAQ: FGBI), the holding company for First Guaranty Bank, announced its key developments and unaudited financial results for the second quarter and six months ending June 30, 2024.
Key developments are as follows:
-- First Guaranty is initiating changes to its business strategy. The
changes include slowing the trajectory of the bank's asset growth,
further increasing the capital position, and working with leaner staff
while utilizing automation and technological advances. First Guaranty has
reduced staff by 71 positions. This reduction represents approximately
15% of the bank's workforce. Each of the affected employees will receive
60 days of pay, payment for their unused vacation time, their elected
healthcare coverage through September 30, 2024, and will have the
opportunity to apply for open positions within the bank. First Guaranty
will continue its other noninterest expense reductions previously
undertaken earlier in the year.
-- First Guaranty anticipates that the change to the business strategy will
generate a reduction in noninterest expense of approximately $12.0
million pre-tax on an annual basis which includes the reduction in staff.
The cost savings are anticipated to impact the fourth quarter of 2024 by
about $2.0 million pre-tax. It is anticipated that about $3.0 million in
pre-tax savings will be realized per quarter for 2025.
-- First Guaranty's Board of Directors anticipates paying a quarterly cash
dividend of $0.08 per share for the third and fourth quarters of 2024.
-- As previously announced, on June 28, 2024, the Bank consummated a
sale-leaseback transaction relating to two stand-alone branches and a
portion of the headquarters building which also contains a branch
(collectively, the "Properties"). The aggregate cash purchase price was
$14.7 million. The sale-leaseback transaction resulted in a pre-tax gain
of approximately $13.2 million, or $10.4 million after tax. Aggregate
first full year of rent expense under the Lease Agreements will be
approximately $1.3 million pre-tax, or $1.0 million after tax.
Financial Highlights for the second quarter and six months ended June 30, 2024, are as follows:
-- Total assets increased $62.8 million and were $3.6 billion at June 30,
2024 and December 31, 2023. Total loans at June 30, 2024 were $2.8
billion, an increase of $84.6 million, or 3.1%, compared with
December 31, 2023. Total deposits were $3.0 billion at June 30, 2024, an
increase of $34.4 million, or 1.1%, compared with December 31, 2023.
Retained earnings were $72.3 million at June 30, 2024, an increase of
$4.3 million compared to $68.0 million at December 31, 2023.
Shareholders' equity was $255.1 million and $249.6 million at June 30,
2024 and December 31, 2023, respectively.
-- Net income for the second quarter of 2024 and 2023 was $7.2 million and
$2.7 million, respectively, an increase of $4.5 million or 169.1%. Net
income for the six months ended June 30, 2024 and 2023 was $9.5 million
and $6.1 million, respectively, an increase of $3.4 million or 54.8%.
-- Earnings per common share were $0.53 and $0.19 for the second quarter of
2024 and 2023, respectively, and $0.67 and $0.46 for the six months ended
June 30, 2024 and 2023, respectively. Total weighted average shares
outstanding were 12,504,717 and 10,913,029 for the second quarter of 2024
and 2023, respectively, and 12,497,313 and 10,815,454 for the six months
ended June 30, 2024 and 2023, respectively. The change in shares was due
to the issuance of 44,341 and 29,293 shares of common stock under the
Equity Bonus Plan during the fourth quarter of 2023 and the first quarter
of 2024, respectively, and the issuance of 1,714,287 shares of common
stock under private placement in 2023.
-- The allowance for credit losses was 1.07% of total loans at June 30, 2024
compared to 1.13% at December 31, 2023.
-- Net interest income for the second quarter of 2024 was $21.2 million
compared to $20.9 million for the same period in 2023. Net interest
income for the six months ended June 30, 2024 was $43.2 million compared
to $43.2 million for the six months ended June 30, 2023.
-- The provision for credit losses for the second quarter of 2024 was $6.8
million compared to $0.5 million for the same period in 2023. The
provision for credit losses for the six months ended June 30, 2024 was
$9.1 million compared to $0.9 million for the six months ended June 30,
2023.
-- First Guaranty had $1.0 million of other real estate owned as of June 30,
2024 compared to $1.3 million at December 31, 2023.
-- The net interest margin for the three months ended June 30, 2024 was
2.48% which was a decrease of 26 basis points from the net interest
margin of 2.74% for the same period in 2023. The net interest margin for
the six months ended June 30, 2024 was 2.53% which was a decrease of 33
basis points from the net interest margin of 2.86% for the same period in
2023. First Guaranty attributed the decrease in the net interest margin
to the increase in market interest rates that began in 2022 and continued
through 2023 that increased the cost of liabilities. Loans as a
percentage of average interest earning assets decreased to 81.1% at
June 30, 2024 compared to 83.6% at June 30, 2023.
Investment securities totaled $358.6 million at June 30, 2024, a decrease of $45.6 million when compared to $404.1 million at December 31, 2023. At June 30, 2024, available for sale securities, at fair value, totaled $37.4 million, a decrease of $46.1 million when compared to $83.5 million at December 31, 2023. The decrease in available for sale securities was primarily due to the maturity of low yielding Treasury securities of which the proceeds were subsequently reinvested in higher yielding loans and or cash equivalents. At June 30, 2024, held to maturity securities, at amortized cost and net of the allowance for credit losses totaled $321.2 million, an increase of $0.5 million when compared to $320.6 million at December 31, 2023. The allowance for credit losses for HTM securities was $0.1 million at June 30, 2024 and December 31, 2023.
-- Total loans net of unearned income were $2.8 billion at June 30, 2024, a
net increase of $84.6 million from December 31, 2023. Total loans net of
unearned income are reduced by the allowance for credit losses which
totaled $30.3 million at June 30, 2024 and $30.9 million at December 31,
2023, respectively.
-- Nonaccrual loans increased $37.1 million to $62.3 million at June 30,
2024 compared to $25.2 million at December 31, 2023. The increase in
total nonaccrual loans was concentrated primarily in one commercial real
estate relationship that totaled $36.9 million. This relationship is
comprised of five loans secured by real estate located in the Midwest.
$13.9 million of this relationship was previously reported in 90 day plus
but still accruing at December 31, 2023.
-- At June 30, 2024, our largest non-performing assets were comprised of the
following nonaccrual loans: (1) $36.9 million non-farm non-residential
loan relationship comprised of five loans; (2) a $2.0 million loan
relationship that is classified as purchased credit deteriorated; (3) a
commercial lease loan that totaled $1.8 million; (4) a construction and
land development loan that totaled $1.7 million; (5) a commercial lease
loan that totaled $1.7 million; and (6) a $1.3 million one- to
four-family loan relationship.
-- First Guaranty charged off $8.8 million in loan balances during the
second quarter of 2024. The details of the $8.8 million in charged-off
loans were as follows:
1. First Guaranty charged off $0.5 million in consumer loans during the
second quarter of 2024. The consumer loan charge offs included $0.1
million of loans secured by automobiles or equipment and $0.4 million in
unsecured loans.
2. First Guaranty charged off $3.8 million on a loan relationship associated
with a restaurant supply business located in Louisiana during the second
quarter of 2024. This loan was secured by real estate, equipment, and
inventory. This loan had a previous specific reserve of $2.5 million as
of March 31, 2024. This loan had no remaining principal balance at
June 30, 2024.
3. First Guaranty charged off a $1.8 million commercial and industrial loan
that was originated under the Main Street Lending Program during the
second quarter of 2024. The $1.8 million was the unguaranteed retained
portion of the loan. This loan had a previous allocation in the reserve
of $1.8 million at March 31, 2024. This loan had no remaining principal
balance at June 30, 2024.
4. First Guaranty charged off $0.6 million on a real estate secured loan
located in Louisiana during the second quarter of 2024. This was an
acquired loan from the Union Bank acquisition and was secured by rental
properties. This loan had a remaining principal balance of $0.4 million
at June 30, 2024.
5. First Guaranty charged off $0.4 million on a commercial and industrial
SBA loan relationship during the second quarter of 2024. This
relationship had a remaining principal balance of $0.6 million at
June 30, 2024.
6. First Guaranty charged off $0.3 million on a real estate secured SBA loan
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