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.

 

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.

(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.

(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:

(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		%

 

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.