9 Decades of Commitment to Customer Service 1
FIRST
GUARANTY
BANCSHARES, INC.
2024 ANNUAL REPORT
CUSTOMER SERVICE
CUSTOMER SERVICE
DECADES OF COMMITMENT TO
9
First Guaranty Bancshares, Inc. Annual Report 2024
CELEBRATES
ANNUAL MEETING
The Annual Meeting of Shareholders will
convene at 2:00 PM Central Daylight Saving
Time (CDT) on
Thursday, May 15, 2025 in the FGB Center
206 S. Orange Street
Hammond, LA 70403
CORPORATE HEADQUARTERS
First Guaranty Square
400 East Thomas Street
Hammond, Louisiana 70401-3320
Telephone: (888) 375-3093
SHAREHOLDER SERVICES
First Guaranty Bancshares, Inc.
Post Office Box 2009
Hammond, Louisiana 70404-2009
Contact: Vanessa R. Drew
Telephone: (985) 375-0343
Email: investorrelations@fgb.net
CERTIFIED PUBLIC ACCOUNTANTS
Griffith, DeLaney, Hillman & Lett
Ashland, Kentucky
FINANCIAL AND GENERAL INFORMATION
Persons seeking financial or other information
about the Company are invited to contact:
Eric J. Dosch
Chief Financial Officer, Treasurer and Secretary
First Guaranty Bancshares, Inc.
Post Office Box 2009
Hammond, Louisiana 70404-2009
Telephone: (985) 375-0308
NOTICE TO SHAREHOLDERS
A copy of the First Guaranty Bancshares, Inc.
Annual Report filed on Form 10-K with the U.S.
Securities and Exchange Commission can be
accessed through the Company’s website at
www.fgb.net or is available without charge by
writing.
®
FIRST GUARANTY BANCSHARES, INC.
CORPORATE INFORMATION
9 Decades of Commitment to Customer Service 1
NASDAQ Stock Ticker Symbol:
FGBI and FGBIP
Corporate Information.............................................................................................. Page 1
Table of Contents..................................................................................................... Page 2
First Guaranty Bancshares, Inc. Financial Snapshot................................................... Page 3
Nine Decades of Commitment to Customer Service................................................... Page 4
Letter from the Chairman, Marshall T. Reynolds......................................................... Page 5
Letter from the Chief Executive Officer & President, Michael R. Mineer...................... Page 6
Report from the Chief Financial Officer, Eric J. Dosch................................................. Page 7
Report from the Chief Lending Officer, Randy S. Vicknair........................................... Page 8
Report from the Texas Area President, Jordan M. Lewis............................................. Page 9
Report from the Mideast Area President, Sam J. Gallo............................................... Page 10
Report from the Senior Vice President, Glenn A. Duhon, Sr......................................... Page 11
Our Mission and Our Values...................................................................................... Page 12
A Legacy of Leadership: Honoring Our CEO’s Retirement............................................ Page 13
First Guaranty Bank Board of Directors and First Guaranty Bancshares, Inc. Board..... Page 14
First Guaranty Bank ATM/ITM Locations.................................................................. Page 15
Locations Map......................................................................................................... Page 16
Earnings & Dividends............................................................................................... Page 18
Performance Graphs................................................................................................. Page 20
Banks Headquartered in Louisiana............................................................................ Page 23
FGB Gives Back....................................................................................................... Page 24
First Guaranty Bancshares, Inc. Financial Table of Contents...................................... Page 26
TABLE OF CONTENTS
®
Scan here or go to investors.fgb.net
to visit our Investor Relations site.
2 First Guaranty Bancshares, Inc. Annual Report 2024
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90 YEARS OF COMMITMENT
®
9 Decades of Commitment to Customer Service 3
Book Value Growth Per One 1993 Share [1]
(per common share)
First Guaranty has paid $110,317,000
in Cash Dividends to common
shareholders since 1993.
[1] Book value has been adjusted for cumulative stock splits and dividends 3.22 times since 1993.
Dividends Per One 1993 Common Share [2]
Cash Dividends on Common Stock (In thousands)
FIRST GUARANTY BANCSHARES, INC. FINANCIAL SNAPSHOT
FIRST GUARANTY BANK CELEBRATED 90 YEARS OF
COMMITMENT TO CUSTOMER SERVICE.
On December 31, 2024, total assets were $3.97 billion,
net income was $12.4 million, and earnings per common
share were $0.81. Return on average assets was 0.34%
and return on average common equity was 4.58%. First
Guaranty Bancshares, Inc. shares trade on the Nasdaq
Global Market Exchange and has paid quarterly dividends
for 126 consecutive quarters at December 31, 2024.
PERFORMANCE GRAPHS
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90 YEARS OF COMMITMENT
®
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90 YEARS OF COMMITMENT
®
[2] Cash dividends from the perspective of one original common stock from 1993 to present, this considers
the impact of stock splits and stock dividends.
Book Value per
one 1993 share
has increased from
$3.70 to $57.16
since 1993.
PROFILE
First Guaranty Bancshares, Inc. is the holding company of
First Guaranty Bank, which it wholly owns. The Bank is a full-
service financial institution with 31 locations throughout
Louisiana, 5 locations in Texas, and 1 in Kentucky and
West Virginia. Headquartered in Hammond, Louisiana, the
Company had 399 employees as of December 31, 2024.
FIRST GUARANTY BANK – NINE DECADES OF COMMITMENT TO CUSTOMER SERVICE
®
FIRST GUARANTY BANK – RESILIENCE
Over the course of nine decades, First
Guaranty Bank has grown from one location in
Hammond, Louisiana, to 31 locations across
Louisiana, Texas, Kentucky, and West Virginia
always with a focus on enhancing customer
service and remaining customer-centric.
Due to economic conditions in 2024, First
Guaranty Bank reassessed its business and
staffing model leading to the strategic decision
to adopt a new approach: slower growth,
a consolidated staff, and the utilization of
automation and technology.
These changes were implemented to better
serve our customers, align with industry
peers, and focus on the new strategy. As a
result, profitability and efficiency improved,
enabling the bank to offer competitive loan
and deposit rates.
EXTENDING CUSTOMER SERVICE
BEYOND THE BANK DOOR
First Guaranty Bank remains dedicated to giving
back to the communities we serve, not only
through financial contributions but also through
the time and energy of our employees and financial
education initiatives like the FGB Financial
Foundations program.
First Guaranty Bank is guided by values of integrity,
customer focus, mutual respect, teamwork,
initiative, professionalism, quality, and innovation.
These core values are the building blocks of
banking excellence. Teamwork and the ability to
properly serve our customers form the foundation
for the continued success of First Guaranty Bank.
First Guaranty Bancshares, Inc. is the holding company for First Guaranty Bank. First Guaranty
Bank celebrated 90 years last year. Throughout the years many things have changed but one
key constant remains: our commitment to customer service.
FGB
90
4 First Guaranty Bancshares, Inc. Annual Report 2024
Marshall T. Reynolds
Chairman of the Board
LETTER FROM THE CHAIRMAN
®
9 Decades of Commitment to Customer Service 5
FIRST GUARANTY BANCSHARES, INC.
Dear Shareholders,
2024 proved to be a very bad year for First Guaranty Bank. The answer is quite
simple. Around mid-2023 we started making some rather large loans and continued
this process through mid-2024. Our retained earnings should have been around $10
million per year. At 10% capital you can see we could afford around $100 million
growth in loans. Having our loan growth at about $500 million makes us substandard
in capital. The Federal Reserve quickly escalated interest rates causing this situation
which further escalated our problem. The Federal Reserve is a minor portion of this
problem. Last, we are the major problem for getting after loans while interest rates
were rising, we consequently find ourselves short on capital and long on loans.
We have done a multiplicity of things to rectify this situation.
1. Reduced employment by over 100 people
2. Sold some loans at a discount
3. Replaced our CEO
As you can see, we have pulled out all the stops. I do believe we will return to a
first-class institution paying a good dividend once again. Your help and support are
solicited and needed. Your Board of Directors is pulling hard together, and we are
committed to winning this battle.
MARSHALL T. REYNOLDS
Chairman of the Board
FIRST GUARANTY BANCSHARES, INC.
Chairman of the Board
FIRST GUARANTY BANK
Dear Shareholders,
First Guaranty Bank has made significant strides in implementing our new business
strategy. We initiated this strategy in the third quarter of 2024. The strategies were to
reduce risk on the balance sheet by slowing loan growth, expanding on balance sheet
liquidity, increasing the allowance for credit losses, accelerating capital growth and
reducing non-interest expense.
In banking, there are only two ways to make money. One must either increase revenue
or decrease costs. We are working to align our capital levels to our risk profile, which
slows revenue growth; therefore we have diligently worked to reduce our expenses.
We took steps to reduce our overall workforce by 20%, optimized our sales force
with a 40% reduction and we are eliminating 4 underperforming branches. We are
using technology to streamline operations and eliminate unnecessary contracts.
Additionally, our Board of Directors have unanimously voted to eliminate all directors’ fees. These collective
efforts generated pretax savings of more than $12 million on an annual basis.
The organization is transforming into strong risk management practices. We are balancing our ALM model to
make us less susceptible to market interest rates. We have completed a comprehensive annual loan review,
both internally and independent external, of our loan portfolio which has unfortunately, yet proactively led to
increased criticized assets and non-performing assets. We adjusted our under-writing processes, boosted our
allowance for credit losses and established a very proactive credit management culture.
Our balance sheet profile and size has driven the necessity to preserve more capital at the bank to support
the level of growth from our past. We have reduced risk weighted asset growth at the bank level, worked to
improve earnings from cost cutting measures, and reduced our common dividend allowing earnings accretion
thereby improving our overall capital ratios.
Our new business strategy is different from our recent past. Controlled growth, measured expense
reductions, sound balance sheet risk management and sound credit underwriting are our guiding principles.
Our senior management team has been aligned to execute within their respective areas on these principles.
While market forces are like the wind constantly changing, we will constantly change and set our sails to
meet our destination of a much stronger return on assets, return on equity and increasing net tangible book
value.
As we look forward, we remain committed to delivering the highest level of service with the same dedication
and passion that we have built throughout the decades.
Thank you for being a part of this journey and for your trust and support.
Michael R. Mineer
Chief Executive Officer &
President
®
Michael R. Mineer
Chief Executive Officer & President
FIRST GUARANTY BANCSHARES, INC.
Chief Executive Officer & President
FIRST GUARANTY BANK
6 First Guaranty Bancshares, Inc. Annual Report 2024
LETTER FROM THE CHIEF EXECUTIVE OFFICER & PRESIDENT
®
9 Decades of Commitment to Customer Service 7
Eric J. Dosch
Chief Financial Officer
FIRST GUARANTY BANCSHARES, INC.
Chief Financial Officer
FIRST GUARANTY BANK
First Guaranty continued in its 90th year serving the banking needs of our local communities
with excellence in customer service and with a renewed focus in improving our business. First
Guaranty initiated several strategic changes in mid-2024. Our strategies included reducing loan
growth while increasing the allowance for credit losses, expanding on balance sheet liquidity
with higher levels of cash and short duration securities, improving capital levels and ratios and
reducing non-interest expenses.
First Guaranty’s loans declined $54.9 million in 2024 compared to growth of $229.6 million
in 2023. Total loans were $2.69 billion at December 31, 2024 compared to $2.75 billion at
December 31, 2023. Loan interest income, however, increased $23.3 million during 2024 to
a total of $190.4 million compared to total loan interest income of $167.1 million in 2023
despite the reduction in loan balances. The increase was due to loans repricing to higher
market rates and due to new higher rate originations during the year. Loan yields averaged
6.86% during 2024 compared to 6.41% during 2023. First Guaranty was able to improve loan
revenue via rate rather than by volume during 2024.
First Guaranty increased liquidity during 2024 and the income generated by cash and securities. Cash and cash
equivalents increased from $286.5 million at December 31, 2023 to $564.2 million at December 31, 2024.
Investment securities totaled $602.7 million at December 31, 2024 an increase of $198.6 million from $404.1
million at December 31, 2023. Interest income from this liquidity portfolio increased 97 percent to $31.3 million in
2024 compared to $15.9 million in 2023.
First Guaranty grew its deposit balances in 2024. First Guaranty increased total deposits by $467.2 million during
2024. The majority of deposit growth occurred with time deposits. Our strategy balanced both local deposit growth
and growth with select issuance of brokered time deposits. The majority of time deposits were kept at a maturity of
three years or less in order to provide pricing flexibility should interest rates decline. First Guaranty’s newest Mid-
East market of Kentucky and West Virginia grew deposits $48.4 million from $51.6 million at December 31, 2023
to $100.0 million at December 31, 2024. This deposit growth was impressive during a time of significant market
competition for deposits.
Net interest income before allowances for credit losses increased to $88.4 million in 2024 compared to $84.7
million in 2023.
The provision for credit losses increased $16.3 million to $20.0 million in 2024 from $3.7 million in 2023. The
allowance for credit losses increased to $34.8 million at December 31, 2024 from $30.9 million at December 31,
2023. The allowance for loan losses to total loan ratio increased to 1.29% of total loans at December 31, 2024
compared to 1.13% at December 31, 2023.
Total shareholders’ equity increased $5.4 million to $255.0 million at December 31, 2024 from $249.6 million at
December 31, 2023. Retained earnings increased $5.0 million in 2024. First Guaranty’s Bank level risk weighted
capital ratio increased from 11.20% at December 31, 2023 to 12.11% at December 31, 2024.
First Guaranty’s total non-interest expense was $77.1 million in 2024, a decline of $2.5 million compared to total
non-interest expense of $79.7 million in 2023. The decline in non-interest expense reflected the cost reduction
strategies initiated in the second half of 2024.
First Guaranty continues to build strength to move forward. We will continue to move forward using the new strategies
initiated in 2024. We believe that the combination of these efforts will help move First Guaranty Bancshares, Inc.
forward into 2025 and beyond.
Eric J. Dosch
Chief Financial Officer
REPORT FROM THE CHIEF FINANCIAL OFFICER
2024 was a year of change for the First Guaranty Bank team.
Throughout the year, the team adapted and evolved to new changes for the bank. Our
CEO for 15 years, Alton Lewis, retired paving the way for the promotion of Mike Mineer
to the CEO position. The change in leadership brought a new direction for the bank and
the team while maintaining our focus on the creation of a strong balance sheet and
resilient bank. We implemented a new loan origination system called Abrigo to better
assist us with the origination and servicing of our loans. A final key change was the
restructuring of several departments to improve efficiency. Despite the changes, one
thing remained the same, First Guaranty Bank’s commitment to customer service over
the last 90 years. Our customers are the reason we are here!
Following our strategy, First Guaranty Bank’s total loan portfolio declined to $2.69
billion as of December 31, 2024, which was a $54.9 million decrease over the
previous year end of $2.75 billion. We remain focused on the communities we serve
with the First Guaranty Bank team closing over $300 million in new money loans, which was partially offset
by the standard amortization of the portfolio plus early loan payoffs exceeding $55 million. Average yield
continued to improve with fourth quarter yields of 6.72%.
First Guaranty Bank’s markets were solid in 2024, with significant contributions from all regions. As with
prior years, the team continues to diligently pursue opportunities which resulted in contributions to loan and
deposit growth throughout the year.
I look forward to new changes and opportunities in 2025!
Thank you!
Randy S. Vicknair
Senior Vice President/Chief Lending Officer
FIRST GUARANTY BANK
Randy S. Vicknair
Senior Vice President/
Chief Lending Officer
®
REPORT FROM THE CHIEF LENDING OFFICER
8 First Guaranty Bancshares, Inc. Annual Report 2024
Dear Shareholder,
For nine decades, First Guaranty Bank has honored the needs of its customers,
its employees, and its shareholders. That balance has been maintained through a
culture of customer service – with each of the three groups a part of the community
that comprises our customer. Barring that culture of customer service, we could not
succeed at our organizational mission.
When First Guaranty Bank first entered Texas in 2017, we had to introduce ourselves
to our customers: to win their trust and prove we could deliver. Culture is not easily
replicated, and it has required discipline in how we acted, how we listened, how we
spent our time, how we responded, and how we communicated with stakeholders.
Good customer service was not achieved overnight but took months and even years to
form in our newest regions. First Guaranty Bank did the work in Texas to successfully
establish a culture of community service consistent with our nine decades of experience.
Like most regions across America, Texas experienced the squeeze of the high-rate environment coupled with
inflationary forces in 2024. Substantial changes in organizational makeup and systems added to the complex
environment. A dynamic leadership acted quickly to cut costs and bring the bank into the healthiest possible
position. Every step of the plan reasserted our commitment to our customers. In Texas, the result was a
25.73% increase in the region’s contribution to profitability in 2024 - about a 300% increase since 2019
– and a stronger relationship with our communities. Deposits grew, as did the loan portfolio. Teammates
banded together to see how we could bring stability and confidence to our region during turbulent times, and
to celebrate our victories.
Few organizations pass through nine decades, none do so unscathed. Sacrifices had to be made, and every
member of our organization shared in that sacrifice. There were difficult times. However, the commitment did
not waiver: we maximized value for our customers, our employees, and our shareholders.
Going forward to the next 90 years, you can be confident that our organization is strong. The investment
in Texas continues to grow and yield strong returns. Our resolve to this mission is unwavering, and we will
continue to stand the test of time by the way we serve.
Ever onward,
JORDAN M. LEWIS
Texas Area President
®
REPORT FROM THE TEXAS AREA PRESIDENT
9 Decades of Commitment to Customer Service 9
Jordan Montgomery Lewis
Texas Area President
FIRST GUARANTY BANK
SAM J. GALLO
Kentucky/West Virginia
Area President
®
REPORT FROM THE KENTUCKY/WEST VIRGINIA AREA PRESIDENT
The Mid East Region had a very successful year in growing our franchise in both
Kentucky and West Virginia markets. In not even two years of business, the team had
grown deposits to nearly $100 million and opened over 1,600 accounts as 2024
came to a close. This deposit growth was over $40 million, year over year. This is an
amazing accomplishment that was made possible by the hard work and efforts of
every employee in the Mid East Region.
The lending side was also successful with the bulk of the loan growth occurring in the
first six months of 2024. Outstanding loans as of December 2024 were $335 million,
a growth in loans of over $50 million, year over year.
Our goals for 2025 are fairly simple. We want to get back to the basics. We want
to ensure we take good care of our current clients while focusing on “Relationship
Banking” as we move forward in the future. We feel that if we focus on “Relationship
Banking” this will allow us to grow our franchise the right way while increasing
shareholder value. Also, a very important initiative will be to get out into our communities and strive to brand
the First Guaranty Bank name. Last, but not least, we will continue to focus on strong portfolio management
with the goal of maintaining strong credit quality.
SAM J. GALLO
Kentucky/West Virginia Area President
FIRST GUARANTY BANK
10 First Guaranty Bancshares, Inc. Annual Report 2024
Glenn A. Duhon, Sr.
Senior Vice President/
Regional Manager
®
REPORT FROM THE SENIOR VICE PRESIDENT
The Southwest Louisiana Region continues to commit to customer service just as
First Guaranty Bank has done for the last 90 years. In this region we are lucky to
have the majority of customers long term, loyal, profitable, and concerned about their
financial future. We are also fortunate to have the support of management and our
Board of Directors who are concerned about customer service and the future of First
Guaranty Bank.
Our farmers had a decent year in 2024. A few areas had lower than expected rice
yields due to getting rain at the wrong time, causing false rice, resulting in lower
yields, but most should still meet all of their financial obligations. The sugar cane
crop had excellent stands, yields were good with a few areas affected by muddy fields
during harvest, however, they should also meet their financial obligations. It’s a little
early to comment on crawfish production, but so far it seems we will have a good
season.
This region is now made up of Abbeville and Jennings. Lake Charles loan production office is now in a
different region. Our Jennings branch ended the year with $48.2 million in deposits and $4.6 million in
loans. The Abbeville branch ended with $184.2 million in deposits and $100.8 million in loans. Summing up,
the region ended with a total of $232.4 million in deposits and $105.4 million in loans.
We are thankful for another successful year, our customers, employees, management, and Board of
Directors, everyone working together.
Sincerely,
Glenn A. Duhon, Sr.
Senior Vice President/Regional Manager
FIRST GUARANTY BANK
9 Decades of Commitment to Customer Service 11
Our Mission
The mission of First Guaranty Bank and First Guaranty Bancshares is to increase
the shareholder value while providing financial services for and contributing to
the growth and welfare of the communities we serve.
We believe that each customer is our most important customer and
should be treated as such. We endeavor to provide levels of service that
exceed the expectations of all our customers.
We believe that our employees are our greatest asset as demonstrated
in their professionalism and dedication. We encourage open
communications and strive to cultivate an entrepreneurial environment
in which our employees feel highly responsible for the performance of
the bank, and an environment where they will contribute new ideas and
innovations that will help us excel.
We seek to enhance stockholder value by continually improving the
quality of earnings, growth in earnings, return on equity and dividend
payout.
We strive to be a socially responsible corporate citizen by supporting
community activities and encouraging our employees to be actively
involved in our communities. We are committed to the success of the
communities that we serve, the same communities our employees call
home. Our goal is to participate in making our communities better places
in which to live, work and play.
Our Values
12 First Guaranty Bancshares, Inc. Annual Report 2024
®
A LEGACY OF LEADERSHIP: HONORING OUR CEO'S RETIREMENT
After serving as President and CEO for nearly 15
years, Alton Lewis retired from First Guaranty Bank
in May 2024.
Alton Lewis joined First Guaranty Bank in October 2009
as Chief Executive Officer, after practicing law in Louisiana
for 30 years and being elected to the Bank's Board in
2002. He later took on additional responsibilities as the
President of First Guaranty Bank and President of First
Guaranty Bancshares, Inc.
Under his leadership, First Guaranty Bank went public in
2015 as First Guaranty Bancshares, Inc., setting FGB up
for new opportunities of growth and expansion. Soon after,
FGB expanded its footprint by entering the Texas market
in 2017 through the acquisition of Synergy Bank, followed
by the acquisition of Union Bank in Central Louisiana in
2019 and opening a branch in Kentucky in 2023 and West
Virginia in 2024.
Alton's leadership was not without its fair share of
obstacles. He successfully navigated FGB through the
challenges posed by the Covid epidemic and the Silicon
Valley banking crisis, demonstrating exceptional leadership
and resilience.
Alton's love for each community that FGB served helped
to foster a community bank philosophy. One where the
employees were just as passionate about giving back as
he was. Alton truly believed that every employee was a
BIG DEAL. One of his proudest achievements was when
First Guaranty Bank was recognized by Lending Tree and
Newsweek as the Best Small Bank in the United States for
three consecutive years. He believed this was testament to
the dedication of FGB's entire staff and its loyal customers.
Under Alton's direction, First Guaranty Bank
transformed into a robust, prosperous, and well-
managed institution, leaving a lasting legacy
of resilience and community commitment.
By May 2024, First Guaranty Bank had grown
its total assets to $3.5 billion, establishing a
strong presence throughout Louisiana, Texas,
Kentucky, and West Virginia.
Alton continues to serve as a member of the
Board of Directors for First Guaranty Bank and
First Guaranty Bancshares, Inc.
The entire First Guaranty Bank team extends
their heartfelt wishes to Alton for a wonderful
and well-deserved retirement!
9 Decades of Commitment to Customer Service 13
Seated (L-R): Edgar R. Smith, III, Gloria M. Dykes, Marshall T. Reynolds,
Ann A. Smith, Michael R. Mineer
Standing (L-R): Nancy C. Ribas, Dr. Phillip E. Fincher, Andrew Gasaway, Jr.,
Anthony J. Berner, Jr., Richard W. “Dickie” Sitman, Alton B. Lewis,
Bruce McAnally, William K. Hood, Robert H. Gabriel, Jack M. Reynolds
Front row (seated): Marshall T. Reynolds
Back row: Bruce McAnally, Edgar R. Smith III, William K. Hood, Vanessa R. Drew, Alton B. Lewis
®
®
FIRST GUARANTY BANK BOARD OF DIRECTORS
FIRST GUARANTY BANCSHARES, INC. BOARD OF DIRECTORS
Edwin L. Hoover, Jr.
Morgan S. Nalty
Jack Rossi
14 First Guaranty Bancshares, Inc. Annual Report 2024
FGB
90
®
FIRST GUARANTY BANK ATM/ITM LOCATIONS
9 Decades of Commitment to Customer Service 15
SOUTH LOUISIANA
ABBEVILLE, LA
799 West Summers Drive
AMITE, LA
100 East Oak Street
1014 West Oak Street
BEDICO, LA
Bedico Supermarket:
28473 Highway 22
DENHAM SPRINGS, LA
2231 South Range Avenue
GREENSBURG, LA
6151 Highway 10
HAMMOND, LA
1201 West University Avenue
North Oaks Medical Center:
4 Medical Center Drive
North Oaks Rehabilitation Center:
1900 South Morrison Boulevard
INDEPENDENCE, LA
455 Railroad Avenue
JENNINGS, LA
500 North Cary Avenue
KENTWOOD, LA
723 Avenue G
LIVINGSTON, LA
(LPMC) Livingston Parish
Medical Center:
17199 Spring Ranch Road
LORANGER, LA
19518 Highway 40
ROBERT, LA
Robert’s Supermarket:
22628 Highway 190
SLU STUDENT UNION,
HAMMOND, LA
303 Union Avenue
WALKER, LA
29815 Walker Road South
WATSON, LA
33818 Highway 16
NORTH LOUISIANA
BENTON, LA
189 Burt Boulevard
ATM LOCATIONS
BOSSIER CITY, LA
4221 Airline Drive
DUBACH, LA
117 East Hico Street
HOMER, LA
401 North 2nd Street
OIL CITY, LA
126 South Highway 1
CENTRAL LOUISIANA
ALEXANDRIA, LA
1701 Metro Drive
6201 Coliseum Boulevard
BUNKIE, LA
1110 Shirley Road
HESSMER, LA
2705 Main Street
MARKSVILLE, LA
211 East Tunica Drive
MOREAUVILLE, LA
10710 Highway 1
TEXAS
FORT WORTH, TX
2001 North Handley Ederville Road
AMITE, LA
632 West Oak Street
GUARANTY WEST, LA
2111 West Thomas Street
HAMMOND MAIN OFFICE, LA
400 East Thomas Street
KENTWOOD, LA
301 Avenue F
PONCHATOULA, LA
500 West Pine Street
VIVIAN, LA
212 N. Pine Street
VANCEBURG, KY
15 Second Street
BRIDGEPORT, WV
1000 Jerry Dove Drive
ITM LOCATIONS
25
28
27
26
30
31
30
®
FIRST GUARANTY BANK BANKING LOCATIONS
16 First Guaranty Bancshares, Inc. Annual Report 2024
KENTUCKY
WEST VIRGINIA
TEXAS
1
10
49
20
55
12
22
20
7
13
10
15
3
9
24
14
1
2
21
11
23
6
17
16
5
4
8
12
18
19
LOCATIONS
®
FIRST GUARANTY BANK BANKING LOCATIONS
9 Decades of Commitment to Customer Service 17
LOUISIANA
23 Walker, LA
24 Watson, LA
25 Denton, TX
26 Fort Worth, TX
27 Garland, TX
28 McKinney, TX
29 Waco, TX
30 Vanceburg, KY
31 Bridgeport, WV
12 Hessmer, LA
13 Homer, LA
14 Independence, LA
15 Jennings, LA
16 Kentwood, LA
17 Lake Charles, LA – Loan
Production Office
18 Marksville, LA – Tunica
19 Moreauville, LA
20 Oil City, LA
21 Ponchatoula, LA
22 Vivian, LA
1 Main Office Hammond, LA –
Guaranty Square
2 Hammond, LA – Guaranty West
3 Abbeville, LA
4 Alexandria, LA
5 Amite, LA
6 Benton, LA
7 Bossier City, LA
8 Bunkie, LA
9 Denham Springs, LA
10 Dubach, LA
11 Greensburg, LA
Earnings
Total Common
Dividends Paid
Cumulative Retained
Earnings (Deficit)*
Notable Events
1993
$2.1 million
$ 200,000
$(4,984,000)
■Investors purchased $3.6 million of common stock
1994
$1.7 million
$ 601,000
$(3,879,070)
1995
$2.1 million
$ 815,000
$(2,796,000)
■Investors purchased $337,000 of common stock
1996
$3.3 million
$1,020,000
$ (774,000)
■Three-for-two stock split
1997
$3.4 million
$1,223,000
$ 1,205,000
1998
$3.4 million
$1,223,000
$ 3,482,000
1999
$3.4 million
$1,316,000
$ 4,473,000
■Investors purchased $9.6 million of common stock
■Acquired 13 branches from Bank One of Louisiana
■Acquired First Southwest Bank
2000
$5.0 million
$1,530,000
$ 5,027,000
■Gains from sale of acquired branches net of tax totaling $2.8
million
2001
$6.0 million
$1,668,000
$ 8,638,000
■Acquired Woodlands Bancorp
■Gains from sale of acquired branches net of tax totaling $1.3
million
2002
$3.5 million
$1,751,000
$10,426,000
2003
$7.0 million
$2,086,000
$13,967,000
2004
$8.6 million
$2,752,000
$19,771,000
2005
$6.0 million
$3,173,000
$23,351,000
■Four-for-three stock split
2006
$8.4 million
$3,335,000
$28,402,000
2007
$9.8 million
$3,503,000
$34,671,000
■Acquired Homestead Bancorp
2008
$5.5 million
$3,558,000
$36,626,000
2009
$7.6 million
$3,558,000
$40,069,000
2010
$10.0 million
$3,558,000
$45,203,000
2011
$8.0 million
$3,610,000
$47,650,000
■Acquired Greensburg Bancshares
2012
$12.1 million
$4,035,000
$53,702,000
■10% common stock dividend
■Dividend rate per share remains $0.16 per quarter
2013
$9.1 million
$4,027,000
$58,102,000
■Total loans exceeded $700 million
2014
$11.2 million
$4,027,000
$64,905,000
■Retained earnings grew by $6.8 million
■Total loans reached $790 million
2015
$14.5 million
$4,247,000
$73,445,000
■10% common stock dividend
■Listed in NASDAQ
■Redeemed SBLF Preferred Stock
2016
$14.1 million
$4,870,000
$82,668,000
■Loans totaled $949 million
■94th consecutive quarterly dividend
®
FIRST GUARANTY BANK EARNINGS & DIVIDENDS
18 First Guaranty Bancshares, Inc. Annual Report 2024
* Retained earnings have not been adjusted to consider stock splits or stock dividends. This better reflects earnings that have been retained as capital. Retained
earnings is the product of Company earnings less common and preferred dividends. The accumulated deficits in 1993 through 1996 were due to losses incurred
prior to 1993.
Earnings
Total Common
Dividends Paid
Cumulative Retained
Earnings (Deficit)*
Notable Events
2017
$11.8 million
$5,210,000
$89,209,000
■Grand openings of Bossier City, LA Banking Center
■Acquisition of Synergy Bank and addition of five new Texas locations
■50% ownership in Centurion Insurance Services allowing First
Guaranty to sell insurance products
2018
$14.2 million
$5,636,000
$97,786,00
■Grand opening of Lake Charles, LA Loan Production Office
■Total loans surpassed $1.2 billion
2019
$14.2 million
$5,803,000
$106,244,000
■106th consecutive quarterly dividend
■Acquisition of The Union Bank and addition of seven new Louisiana
locations
■Completed and opened our new Amite branch office
■Celebrated openings of Texas branches
■Installed four ITMs
2020
$20.3 million
$6,234,000
$120,328,000
■110th consecutive quarterly dividend
■Named #1 BEST SMALL BANK IN LOUISIANA AND THE U.S.!
■Provided 900 PPP loans to small businesses for a total of $111.1
million, assisting 917 small businesses
■MyFGB app
■Opened the FGB Center
2021
$25.9 million
$6,392,000
$139,849,000
■114th consecutive quarterly dividend
■Year-end 10% common stock dividend
■For the SECOND CONSECUTIVE YEAR named the #1 BEST SMALL
BANK IN LOUISIANA AND THE U.S.!
■Expansion into Mideast Markets
2022
$26.6 million
$6,859,000
$159,546,000
■For the THIRD CONSECUTIVE YEAR named #1 BEST SMALL BANK
IN LOUISIANA AND THE U.S.!
■Grand openings of locations in mideast Market
2023
$6.9 million
$7,369,999
$159,067,000
■122nd consecutive quarterly dividend
■Vanceburg Branch opened
■USDA Lender of the Year
2024 $10.1 million
$5,127,000
$164,059,000
■126th consecutive quarterly dividend
■Bridgeport Branch opened
■Celebrated 90 years of committed customer service
$295.8 million
$110,316,000
®
FIRST GUARANTY BANK EARNINGS & DIVIDENDS
FGB
90
9 Decades of Commitment to Customer Service 19
Loans, Net of Unearned Income
(in millions)
Investments [4]
(in millions)
Loans, Net of Unearned Income
(in millions)
1993
$ 105
1998
$ 177
2003
$ 381
2008
$ 606
2013
$ 703
2018
$1,225
2023
$2,749
2024
$2,694
Investments
(in millions)
1993
$ 30
1998
$ 73
2003
$ 59
2008
$139
2013
$635
2018
$405
2023
$404
2024
$603
[4] Available for sale securities at fair value, held to maturity at amortized cost. Net of allowance for credit losses.
®
FIRST GUARANTY BANK PERFORMANCE GRAPHS
20 First Guaranty Bancshares, Inc. Annual Report 2024
0
500
1000
1500
2000
2500
3000
2024
2023
2018
2013
2008
2003
1998
1993
90 YEARS OF COMMITMENT
®
0
100
200
300
400
500
600
700
800
2024
2023
2018
2013
2008
2003
1998
1993
90 YEARS OF COMMITMENT
®
Total Deposits
(in millions)
Net Income
(in millions)
Net Income
(in millions)
1993
$2.1
1998
$3.7
2003
$7.0
2008
$5.5
2013
$9.1
2018
$14.2
2023
$9.2
2024
$12.4
Total Deposits
(in millions)
1993
$ 149
1998
$ 257
2003
$ 376
2008
$ 780
2013
$1,303
2018
$1,630
2023
$3,009
2024
$3,476
®
FIRST GUARANTY BANK PERFORMANCE GRAPHS
9 Decades of Commitment to Customer Service 21
0
3
6
9
12
15
2024
2023
2018
2013
2008
2003
1998
1993
90 YEARS OF COMMITMENT
®
Total Assets
(in millions)
Tangible Common Equity
has increased
$197.0 million since 1993.
Tangible Common Equity
(in thousands)
Tangible Common Equity [3]
(in thousands)
Total Assets
(in millions)
First Guaranty Assets
have increased
2,399% since 1993.
1993
$ 159
1998
$ 245
2003
$ 485
2008
$ 871
2013
$1,436
2018
$1,817
2023
$3,553
2024
$3,973
[3]Total equity less preferred equity, goodwill and acquisition
intangibles, principally core deposit intangibles, net of
accumulated amortization.
1993
$ 9,005
1998
$ 17,376
2003
$ 43,557
2008
$ 61,429
2013
$ 80,033
2018
$141,108
2023
$199,915
2024
$206,029
®
FIRST GUARANTY BANK PERFORMANCE GRAPHS
22 First Guaranty Bancshares, Inc. Annual Report 2024
0
500
1000
1500
2000
2500
3000
3500
4000
2024
2023
2018
2013
2008
2003
1998
1993
90 YEARS OF COMMITMENT
®
0
50000
100000
150000
200000
250000
2024
2023
2018
2013
2008
2003
1998
1993
90 YEARS OF COMMITMENT
®
Banks Headquartered in Louisiana Ranked by Asset Size as of December 31, 2024
1.
Origin Bank
Choudrant
2.
b1Bank
Baton Rouge
3.
First Guaranty Bank
Hammond
4.
Gulf Coast Bank and Trust Company
New Orleans
5.
Red River Bank
Alexandria
6.
BOM Bank
Natchitoches
7.
Sabine State Bank and Trust Company
Many
8.
First American Bank and Trust
Vacherie
9.
Synergy Bank
Houma
10.
JD Bank
Jennings
11.
Crescent Bank
New Orleans
12.
Liberty Bank and Trust Company
New Orleans
13.
The Evangeline Bank and Trust Company
Ville Platte
14.
Resource Bank
Covington
15.
Jonesboro State Bank
Jonesboro
16.
Community Bank of Louisiana
Mansfield
17.
Progressive Bank
Monroe
18.
South Louisiana Bank
Houma
19.
Community First Bank
New Iberia
20.
Concordia Bank & Trust Company
Vidalia
21.
United Community Bank
Raceland
22.
Metairie Bank & Trust Company
Metairie
23.
Cross Keys Bank
Saint Joseph
24.
Delta Bank
Vidalia
25.
Gibsland Bank & Trust Company
Gibsland
26.
Cottonport Bank
Cottonport
27.
Rayne State Bank & Trust Company
Rayne
28.
Merchants & Farmers Bank & Trust Company
Leesville
29.
Gulf Coast Bank
Abbeville
30.
Citizens Bank & Trust Company
Plaquemine
31.
Farmers-Merchants Bank & Trust Company
Breaux Bridge
32.
MC Bank & Trust Company
Morgan City
33.
Guaranty Bank & Trust Company of Delhi, Louisiana
Delhi
34.
The Bank
Jennings
35.
Bank of Zachary
Zachary
36.
Bank of St. Francisville
Saint Francisville
37.
Southern Heritage Bank
Jonesville
38.
Commercial Capital Bank
Delhi
39.
Bank of Commerce & Trust Co.
Crowley
40.
Lakeside Bank
Lake Charles
41.
City Bank & Trust Co.
Natchitoches
42.
Patterson State Bank
Patterson
43.
Winnsboro State Bank & Trust Company
Winnsoboro
44.
American Bank
Covington
45.
CLG The Community Bank
Jonesville
46.
Guaranty Bank and Trust Company
New Roads
47.
Bank of Coushatta
Coushatta
48.
Washington State Bank
Washington
49.
St. Landry Bank and Trust Company
Opelousas
50.
Citizens Progressive Bank
Winnsboro
51.
Caldwell Bank & Trust
Columbia
52.
American Bank & Trust Company
Opelousas
53.
Simmesport State Bank
Simmesport
54.
Marion State Bank
Marion
55.
Franklin State Bank & Trust
Franklin
56.
Landmark Bank
Clinton
57.
Bank of Abbeville & Trust Company
Abbeville
58.
Plaquemine Bank & Trust Company
Plaquemine
59.
Currency Bank Oak
Grove
60.
Bank of Sunset and Trust Company
Sunset
61.
Tensas State Bank
Newellton
62.
South Lafourche Bank & Trust Company
Larose
63.
Exchange Bank and Trust Company, Natchitoches
Natchitoches
64.
Citizens Bank & Trust Company
Covington
65.
Feliciana Bank & Trust Company
Clinton
66.
Farmers State Bank & Trust Co.
Church Point
67.
Vermilion Bank & Trust Company
Kaplan
68.
Citizens Bank & Trust Company of Vivian, Louisiana
Vivian
69.
Bank of Winnfield & Trust Company
Winnfield
70.
Colfax Banking Company
Colfax
71.
State Bank & Trust Company
Golden Meadow
72.
Bank of Erath
Erath
73.
Bank of Oak Ridge
Oak Ridge
74.
Hodge Bank & Trust
Hodge
75.
Bank of Louisiana
New Orleans
76.
Peoples Bank
Chatham
77.
The Bank of Commerce
White Castle
78.
Sicily Island State Bank
Sicily Island
79.
Basile State Bank
Basile
80.
Jackson Parish Bank
Jonesboro
81.
Bank of Gueydan
Gueydan
82.
The Mer Rouge State Bank
Mer Rouge
9 Decades of Commitment to Customer Service 23
First Guaranty Bank contributions for community support
represent 2% of earnings and exceeded $256,000 in 2024.
Community contributions are a priority budget item
for First Guaranty Bank. Listed are the institutions,
organizations, and associations that we have assisted
with contributions and sponsorships during 2024.
At First Guaranty Bank, our goal is to help improve
the communities we serve. In addition to monetary contributions, our employees dedicated time, energy,
and effort to many of these worthy causes.
®
24 First Guaranty Bancshares, Inc. Annual Report 2024
A
A.D. Sutton & Sons, Inc. – Back to
School Bash Supply Kits
Ace of Hears Foundation –
Tournament Sponsor
Advocacy Center for Crime Victims
and Children – Waco Mardi Gras
Ball
ALSAC/St. Jude’s Hospital
American Legion Post #47 – 2024
Louisiana Boys State
American Legion Post #141 – 2024
Louisiana Girls State
Amite Oyster Festival – 2024 Oyster
Reef Sponsor
Arts and Humanities Council for
Avoyelles – Center State Sponsor
Avoyelles Council on Aging, Inc. –
Society for the Developmentally
Disabled
Avoyelles Parish School Board – Fall
Festival, Tiger Serve Volleyball Club,
Avoyelles High Spirit Team
Avoyelles Public Charter School –
Baseball Rings
B
Back the Blue
Benton Athletics Inc. – Banner
Sponsor
Benton Christmas on the Square –
2024 Jingle Bell Sponsor
Bordelonville Volunteer Fire
Department – BBQ Dinner
Fundraiser
Bossier Chamber of Commerce –
Youth Leadership Trip Sponsor
Boys & Girls Club of Acadiana –
Celebrity Waiter Dinner Platinum
Sponsor
Bridgeport Police Department –
National Night Out
Brother Bill’s Helping Hand –
Community Development
Bunkie High School – Banner
Sponsor, Baseball Field Sign
C
CADA – Taste N Tell Sponsor
Fundraiser
Caring Hands Inc.
Champ Cooper Junior High School –
PBIS Rewards Software
Chesterson Square – LSU Baseball
Christmas on the Caddo – Sponsor
Claiborne Academy – Joe Michael
Golf
Claiborne Chamber of Commerce –
Annual Banquet Platinum Sponsor
Claiborne Charity Inc. – Charity
Classic Silver Sponsor
Community Renewal International
Inc. – Croquet Classic Sponsor
Crimestoppers of Tangipahoa –
Back to School Bash with Junior
Auxiliary in Independence, Brick
House Sponsor – Death at Disco
Fundraiser
D
Denham Springs High School – Girls
Basketball Sponsor, DHS Project
Graduation Gold Sponsor
Doyle High School – Baseball Field
Sponsor
Dubach Restoration and
Beautification Organization – Air
Conditioning Contribution, Chicken
Festival Sponsor
Town of Dubach
Dubach School – Adopt-A-School,
Elementary School Teacher/Staff
Appreciation Week
F
First Baptist Church Kentwood –
Weekend lunches for DW Dillon
Students
First Presbyterian Church of
Hammond – Shower Ministry
Contribution and Boy Scouts Troop
Scholarship Fund
Fuzzy Friends Rescue – Fur Ever
Friend Sponsor
G
Garland Independent School District
– Show and Sale Event
Grace Like Rain, Inc. – Class
Sponsor
H
City of Hammond – Back to School
Bash, Camp Blue
City of Hammond Recreation
Department – H.A.R.D. Summer
Camp
Hammond Airshow Foundation Inc. –
Airshow Sponsor
Hammond Area Recreation District
1 – Pole Banner Sponsor, Easter
Eggstravaganza Sponsor
Hammond Eastside Magnet School
– PTO Sponsor
Hammond High Baseball Booster –
Outfield Sponsor, Baseball Sign
Hammond High Magnet School
– Torbotics Team Gold Sponsor,
Second Base Sponsor
Hammond Regional Arts Center –
Art of the Cocktail 2024 Sazerac
Sponsor
Harrison County CASA Program Inc.
– 5K Race Defender Level Sponsor
Harrison County Chamber of
Commerce – Chamber Annual
Awards Dinner
Haynesville High School – Hugh
O’Brien Leadership Summit
Haynesville Quarterback Club
– Stadium Sign Haynesville
Quarterback Club
Hispanic Forum of Mesquite Inc. –
Bronze Sponsor
Homer Dixie Softball
Homer Golf Club – Tee Box Sign
Sponsor
Homer High School – Homer Pelican
Quarterback Club Sign
I
Independence High School – Beta
Club National Convention, 2024
Baseball Game Day Sponsor
Independence Leadership Academy
– Teacher Appreciation
Independence Sicilian Heritage –
2024 Festival Platinum Sponsor
Independence Summer Baseball
J
Jeff Davis Chamber of Commerce –
Golf Tournament Sponsor, Chamber
Diamond Level Sponsor
Jefferson Davis Parish Library –
2024 Summer Reading Program
Sponsor
Jennings High School – PTO’s
Teacher Appreciation Week
Junior Achievement of Central Texas
Junior Achievement of Chisholm Trail
Inc. – Financial Literacy Sponsor
Junior Achievement of Greater Baton
Rouge & Acadia – Financial Literacy
for Vermilion Parish, Financial
Literacy Sponsor for Livingston/
Albany
K
Kaplan High School – Pirate
Baseball Fence Sign
Town of Kentwood – Annual Bookbag
& School Supply Giveaway
Kentwood Baseball/Softball
Association – Team Sponsorship,
Sign
Kentwood High Magnet School –
Boys Basketball Lay Ups Sponsor
Kentwood Rotary Club – Golf
Tournament Hole Sponsor
Kids Sports, Inc. – Baseball
Uniforms
Kiwanis Club of Abbeville, Inc. – Golf
Hole Sponsor, Refreshments
Kiwanis Club of Denham Springs
– Clay Shoot Sponsor, Golf Cart
Rental
Kiwanis Club of Jennings - K-Kids
Program, High School Club
FGB
90
9 Decades of Commitment to Customer Service 25
L
L-36 A Warriors Way – Memorial Gala
Bronze Sponsor
Lady Wolf Softball Booster Club –
Sign
Lake Claiborne Inc. – 4th of July
Fireworks
Lallie Kemp Foundation – 2024 Gala
Diamond Sponsor
Launch – Keys to Explore Gala
Bronze Sponsor
Laurel Elementary – Fall Fest
Lewis County 4-H Council – Youth
Camp Scholarship
Lewis County Football
Lewis County Lionbackers Booster
Club Inc.
Lewis County Little League – Major
League Sponsor
Lewis County School District – Girls
Golf Team Sponsor, Volleyball
Sponsorship, Feed the Drivers,
Saturday Morning Basketball
League
Life Happens – Thanksgiving Dinner
Livingston Chamber Foundation –
Save Our Kids
Loranger High School – Powerlifting
Sponsor
Loranger Middle School – Teacher
Appreciation Week
Louisiana Cattlemen’s Association –
Annual Banquet Sponsor
Louisiana Christian University –
Baseball Rings
Louisiana Corn Festival – Silver
Sponsor
LSU Ag Center – Buckle Sponsor,
Tangi Junior Livestock Show
LSU Ag Center Vermilion Parish –
2025 Rice Educational Activities
M
Main Street Homer – Golf
Tournament Teams
Mansura Chamber of Commerce –
Cochon de Lait Porky Sponsor
Marksville High/Avoyelles Parish
School Board – Rings, Marksville
High Tiger Touchdown
Moreauville Volunteer Fire
Department – Annual Benefit
Dinner
Morgantown Baseball League –
Double Club Sponsor
N
N Stitches Custom Monogramming –
Strawberry Festival Open House
NAACP – Freedom Fund Brunch
Bronze Sponsor
North Caddo Elementary School –
Teacher Appreciation Celebration
North Caddo Magnet High School –
Lady Titan Softball Sponsor
North Tangi Support Group Inc. –
Mardi Gras Bronze Sponsor
Nutcracker Production
O
Operation Graduation Jennings –
Jennings High School Operation
Graduation 2024
Options, Inc. – Be the Key Brunch,
Ballin’ 4 Sponsor
P
Peabody Magnet High School –
Basketball Championship Rings
People’s Self-Help Housing Inc. –
Storage Shed
Petra Foundation – Gala Fundraiser
Bronze Sponsor
PHS Band Boosters Inc.
PHS Lay Wave Basketball
Pink October Crusaders – Ladies
Night Out
Ponchatoula Area Recreation – 2024
Gold Corporate Sponsor
Ponchatoula Chamber of Commerce
– Diamond Sponsor
Ponchatoula High School – Lady
Wave Club Sponsor, Wavette Spirit
Sponsor, In Memory of Anthony
Berner, Sr., Project Graduation
Sponsor, 2024 Seniors Breakfast,
Grand Slam Lady Wave Softball
Ponchatoula Lions Club – Benefit
Dinner
Ponchatoula Youth Baseball – 2
Team Sponsorships
Ponchatoula Youth Basketball – 2
Team Sponsorships
R
Richard Murphy Hospice Foundation
– Cosmic Universe Sponsor
Robert C. Byrd High School –
2024 Baseball Field Sign, Boys
Basketball
Town of Roseland – Back to School
Extravaganza
Rotary Club of Denton, Texas – 2024
Denton Rotary Flag Program
Rotary Club of Hammond –
Shamrock Charity Run Lucky Charm
Sponsor
Rotary Club of Oil City – Auction
Sponsor
Rotary Club of Ponchatoula – Golfin’
Dollars for Scholars Golf Scramble
S
Signature Style Inc. – SLU
Championship Rings
St. Helena Sheriff Office – School
Supply Contribution
St. Mary’s Masonic Lodge #240 –
2024 Cruisin’ for Kids
SLU Athletic Association –
Champagne Bingo
SLU Columbia Theatre for the Arts –
Sponsorship, 2024-2025 Season
Tickets
SLU Foundation – 2024 College
of Education, 2024 College of
Nursing and Health Science, 2024
Community Music School, Chef’s
Evening Platinum Sponsor
Southern University College of
Business – Gala Sponsor
T
Tangi Professional Women's
Organization – Round Table
Sponsor
Village of Tangipahoa – Tools for
Success School Supply Giveaway
Tangipahoa African American
Heritage – Annual Benefit Dinner
Bronze Sponsor
Tangipahoa Chamber of Commerce
– Chillin’ With the Chamber Title
Sponsor, LHSAA Basketball &
Soccer State Tournament
Tangipahoa Parish Cattlemen's
Association – Meeting Sponsor
Tangipahoa Parish Library – Pages
and Pumpkins Halloween
Tangipahoa Parish School System –
Talented Theatre Program
Tangipahoa Parish Sheriff –
Nightmare in the Arena, Mounted
Division Rodeo – Bucking Chute
Sponsor
Tangipahoa Voluntary Council on
Aging – Walk for Seniors Sponsor
The Italian Festival Inc. – 2024
Festival Muffaletta Sponsor
Tollesboro Lions Club – Main Pavilion
Sponsor
Tunica-Biloxi Indians Political Action
– Golf Tournament Sponsor
Tunica-Biloxi Tribe of Louisiana –
Hawk Level Sponsor
Twin Steeples, Inc. – Twin Steeples
Creative Arts Center Sponsorship
U
United Health Foundation Inc. – UHC
Pro-AM Golf Tournament Eagle
Sponsor
United Way of Central Louisiana Inc.
– Hit for Hope Sponsor
United Way of Northwest Louisiana –
Impact Investors Sponsor
United Way of Southeast Louisiana –
2024 Employee Match Contribution
Unlimited Play – Inclusive Playground
USPCA Region 10
V
Vanceburg Police Department –
Christmas Cops Shop with a
Cop, July Jubilee Celebration for
Independence Day
Vermilion Parish School Board
Herod Elementary – Graduation
Contribution
Vivian Athletic Association – Ballpark
Sign
W
Welsh High School – Safe & Sober
After Graduation Party
West Virginia Italian Heritage
Festival Inc. – 2024 Sponsorship
Y
YMCA of North Central West Virginia
Inc. – After School Program
Management’s Discussion and Analysis
of Financial Condition and Results of Operations.................................... 27
Selected Financial Data ............................................................................. 47
Report of Independent Registered Public Accounting Firm .................. 54
Consolidated Balance Sheets .................................................................... 57
Consolidated Statements of Income ........................................................ 58
Consolidated Statements of Comprehensive Income (Loss).................. 59
Consolidated Statements of Changes in Shareholders’ Equity ............. 60
Consolidated Statements of Cash Flows .................................................. 62
Notes to Consolidated Financial Statements .......................................... 63
OLD TABLE OF
CONTENTS
®
26 First Guaranty Bancshares, Inc. Annual Report 2024
FIRST GUARANTY BANCSHARES, INC.
FINANCIAL TABLE OF CONTENTS
Item 7: Management’s Discussion and Analysis of Financial
Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated
financial statements and the accompanying notes included elsewhere in this Annual Report on Form 10-K. A discussion regarding significant
changes in our financial condition from December 31, 2022 to December 31, 2023 and our results of operations for the year ended December
31, 2022 can be found under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual
Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 15, 2024, which is available on the SEC's website
at www.sec.gov and First Guaranty's website, www.fgb.net This discussion and analysis contains forward-looking statements that are subject to
certain risks and uncertainties and are based on certain assumptions that we believe are reasonable but may prove to be inaccurate. Certain risks,
uncertainties and other factors, including those set forth under "Forward-Looking Statements," "Risk Factors" and elsewhere in this Annual Report
on Form 10-K, may cause actual results to differ materially from those projected results discussed in the forward-looking statements appearing in
this discussion and analysis. We assume no obligation to update any of these forward-looking statements.
Overview
First Guaranty Bancshares is a Louisiana corporation and a financial holding company headquartered in Hammond, Louisiana. Our wholly-
owned subsidiary, First Guaranty Bank, a Louisiana-chartered commercial bank, provides personalized commercial banking services primarily
to Louisiana and Texas customers through 35 banking facilities primarily located in the MSAs of Hammond, Baton Rouge, Lafayette, Shreveport-
Bossier City, Lake Charles and Alexandria, Louisiana and Dallas-Fort Worth-Arlington, Waco, Texas and Mideast markets in Kentucky and West
Virginia. We emphasize personal relationships and localized decision making to ensure that products and services are matched to customer needs.
We compete for business principally on the basis of personal service to customers, customer access to officers and directors and competitive
interest rates and fees.
Total assets were $4.0 billion at December 31, 2024 and $3.6 billion at December 31, 2023. Total deposits were $3.5 billion at December 31,
2024 and $3.0 billion at December 31, 2023. Total loans were $2.7 billion at December 31, 2024, a decrease of $54.9 million, or 2.0%, compared
with $2.7 billion at December 31, 2023. Total shareholders' equity was $255.0 million and $249.6 million at December 31, 2024 and December
31, 2023, respectively.
Net income was $12.4 million and $9.2 million for the years ended December 31, 2024 and 2023, respectively. We generate most of our revenues
from interest income on loans, interest income on securities, sales of securities, ATM and debit card fees and service charges, commissions and
fees. We incur interest expense on deposits and other borrowed funds and noninterest expense such as salaries and employee benefits and
occupancy and equipment expenses. Net interest income is the difference between interest income earned on interest-earning assets such as
loans and securities and interest expense paid on interest-bearing liabilities such as deposits and borrowings which are used to fund those assets.
Net interest income is our largest source of revenue. To evaluate net interest income, we measure and monitor: (1) yields on our loans and other
interest-earning assets; (2) the costs of our deposits and other funding sources; (3) our net interest spread and (4) our net interest margin. Net
interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest margin is
calculated as net interest income divided by average interest-earning assets. Because noninterest-bearing sources of funds, such as noninterest-
bearing deposits also fund interest-earning assets, net interest margin includes the benefit of these noninterest-bearing sources. The increase in
net income was caused principally by an increase in net interest income of $3.7 million, an increase in noninterest income of $14.2 million, and
a decrease in noninterest expense of $2.5 million, partially offset by an increase in provision for credit losses of $16.3 million.
Changes in market interest rates and interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, as well as the volume
and types of interest-earning assets, interest-bearing and noninterest-bearing liabilities are usually the largest drivers of periodic changes in
net interest spread, net interest margin and net interest income. Fluctuations in market interest rates are driven by many factors, including
governmental monetary policies, inflation, deflation, macroeconomic developments, changes in unemployment, the money supply, political and
international conditions, conditions in domestic and foreign financial markets. Periodic changes in the volume and types of loans in our loan
portfolio are affected by, among other factors, economic and competitive conditions in Louisiana, Texas and our other out-of-state market areas. As
the economy transitioned from an extended period of historically low interest rates to a period of higher interest rates in 2022-2023, we continue to
evaluate our investments in interest-earning assets in relation to the impact such investments have on our financial condition, results of operations
and shareholders' equity.
Financial highlights for the fourth quarter and years ended December 31, 2024 and 2023:
•
Total assets increased $420.0 million, or 11.8%, to $4.0 billion at December 31, 2024 when compared with December 31, 2023. Total loans
at December 31, 2024 were $2.7 billion, a decrease of $54.9 million, or 2.0%, compared with December 31, 2023. Total deposits were
$3.5 billion at December 31, 2024, an increase of $467.2 million, or 15.5% compared with December 31, 2023. Retained earnings were
$73.0 million at December 31, 2024, an increase of $5.0 million compared to $68.0 million at December 31, 2023. Shareholders' equity was
$255.0 million and $249.6 million at December 31, 2024 and December 31, 2023, respectively.
•
Net income for each of the years ended December 31, 2023 and 2022 was $9.2 million and $28.9 million, respectively.
•
Net income for each of the years ended December 31, 2024 and 2023 was $12.4 million and $9.2 million, respectively.
•
Earnings per common share were $0.81 for the year ended December 31, 2024 and $0.62 for the year ended December 31, 2023.
Total weighted average common shares outstanding were 12,501,035 and 11,165,303 at December 31, 2024 and December 31, 2023,
respectively.
9 Decades of Commitment to Customer Service 27
•
The allowance for credit losses was 1.29% of total loans at December 31, 2024 compared to 1.13% at December 31, 2023.
•
The provision for credit losses totaled $20.0 million for 2024 and $3.7 million in 2023.
•
Net interest income for 2024 was $88.4 million compared to $84.7 million for 2023.
•
Noninterest income for 2024 was $24.7 million compared to $10.6 million for 2023.
•
The net interest margin was 2.47% for 2024 and 2.69% for 2023. Loans as a percentage of average interest earning assets decreased to
77.4% at December 31, 2024 compared to 82.8% at December 31, 2023.
•
Investment securities totaled $602.7 million at December 31, 2024, an increase of $198.6 million when compared to $404.1 million at
December 31, 2023. At December 31, 2024, available for sale securities, at fair value, totaled $281.1 million, an increase of $197.6 million
when compared to $83.5 million at December 31, 2023. At December 31, 2024, held to maturity securities, at amortized cost and net of the
allowance for credit losses, totaled $321.6 million as compared to $320.6 million at December 31, 2023. The allowance for credit losses for
HTM securities was $0.2 million at December 31, 2024, an increase of $0.1 million when compared to $0.1 million at December 31, 2023.
•
Total loans net of unearned income were $2.7 billion at December 31, 2024 a net decrease of $54.9 million from December 31, 2023. Total
loans net of unearned income are reduced by the allowance for credit losses which totaled $34.8 million at December 31, 2024 and $30.9
million at December 31, 2023. First Guaranty adopted ASC 326 effective January 1, 2023 and recorded a cumulative adoption adjustment
to the allowance of $7.1 million.
•
Nonaccrual loans increased $83.3 million to $108.5 million at December 31, 2024 compared to $25.2 million at December 31, 2023. The
increase in total nonaccrual loans was concentrated primarily in non-farm non-residential and multifamily loans.
•
Return on average assets was 0.34% and 0.28% for the years ended December 31, 2024 and 2023, respectively. Return on average common
equity was 4.58% and 3.36% for 2024 and 2023, respectively. Return on average assets is calculated by dividing net income by average
assets. Return on average common equity is calculated by dividing net income by average common equity.
•
Book value per common share was $17.75 as of December 31, 2024 compared to $17.36 as of December 31, 2023. Tangible book value
per common share was $16.48 as of December 31, 2024 compared to $16.03 as of December 31, 2023.
•
First Guaranty's Board of Directors declared cash dividends of $0.41 per common share in 2024 and $0.64 per common share in 2023. First
Guaranty has paid 126 consecutive quarterly dividends on its common stock as of December 31, 2024.
•
First Guaranty paid preferred cash dividends of $2.3 million during 2024 and 2023.
•
As previously announced, on March 28, 2024, First Guaranty issued a $30.0 million subordinate note in a private placement.
•
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 $13.3 million, or $10.5 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.
Recent Developments
•
In the first quarter of 2025, First Guaranty closed three branches and consolidated two existing branches into one location on March 7,
2025. These branches were located in Louisiana. The impact of the branch closures and consolidation is not expected to materially affect
operations.
28 First Guaranty Bancshares, Inc. Annual Report 2024
Critical Accounting Estimates
Our consolidated financial statements are prepared to conform to generally accepted accounting principles in the United States and with
predominant accounting practices within the banking industry. Certain critical estimates require judgment and estimates which are used in the
preparation of the financial statements and accompanying notes.
We have identified the following critical accounting estimate that is critical to an understanding of our financial condition and results of operations.
Allowance for Credit Losses.
The allowance for credit losses is established through a provision for credit losses charged to expense. Loans are charged against the allowance for
credit losses when management believes that the collectability of the principal is unlikely. The allowance is based on management’s evaluation of
expected credit losses over the life of the loans in the portfolio, in accordance with ASC 326. The loan portfolio is divided into segments to evaluate
expected losses. Loans that do not share risk characteristics with a segment are evaluated individually. Management estimates the allowance
balance using available information such as past events, current conditions and reasonable forecasts. Adjustments to historical information are
made using quantitative and qualitative factors developed by management.
The following are general credit risk factors that affect our loan portfolio segments. These factors do not encompass all risks associated with
each loan category. Construction and land development loans have risks associated with interim construction prior to permanent financing and
repayment risks due to the future sale of developed property. Farmland and agricultural loans have risks such as weather, government agricultural
policies, fuel and fertilizer costs, and market price volatility. One- to four-family residential, multifamily, and consumer credits are strongly influenced
by employment levels, consumer debt loads and the general economy. Non-farm non-residential loans include both owner-occupied real estate
and non-owner occupied real estate. Common risks associated with these properties is the ability to maintain tenant leases and keep lease income
at a level able to service required debt and operating expenses. Commercial and industrial loans generally have non-real estate secured collateral
which requires closer monitoring than real estate collateral.
The allowance consists of specific, general, and unallocated components. The specific component relates to loans that are classified as doubtful,
substandard, and individually evaluated for impairment. For such loans that are also classified as individually evaluated for impairment, an
allowance is established when the discounted cash flows (or collateral value or observable market price) of the loan is lower than the carrying value
of that loan. The general component covers non-classified loans and special mention loans and is based on historical loss experience adjusted
for qualitative factors. Qualitative factors include analysis of levels and trends in delinquencies, nonaccrual loans, charge-offs and recoveries, loan
risk ratings, trends in volume and terms of loans, changes in lending policy, credit concentrations, portfolio stress test results, national and local
economic trends, industry conditions, and other relevant factors. An unallocated component is maintained to cover uncertainties that could affect
the estimate of probable losses.
The allowance for credit losses on unfunded commitments represents expected credit losses over the contractual period for which First Guaranty
is exposed to credit risk from a contractual obligation to extend credit. No allowance is recorded if there is an unconditional right to cancel the
obligation. The allowance is reported as a component of Other Liabilities on the Consolidated Balance Sheets. Adjustments to the allowance for
unfunded commitments are included in the provision for credit losses on the Consolidated Statements of Income.
Financial Condition
Assets.
Our total assets were $4.0 billion at December 31, 2024, an increase of $420.0 million, or 11.8%, from total assets of $3.6 billion at December
31, 2023. Assets increased primarily due to increases in cash and cash equivalents of $277.8 million and investment securities of $198.6 million,
partially offset by a decrease in net loans of $58.8 million at December 31, 2024 compared to December 31, 2023.
Loans.
Net loans decreased $58.8 million, or 2.2%, to $2.7 billion at December 31, 2024 from December 31, 2023. Commercial and industrial loans
decreased $77.5 million primarily due to paydowns. Construction and land development loans decreased $69.4 million principally due to the
conversion of existing loans to permanent financing. Commercial lease loan balances decreased $65.2 million primarily due to paydowns on
the existing lease portfolio. First Guaranty's commercial lease portfolio generally has higher yields than commercial real estate loans but shorter
average lives. Consumer and other loans decreased $12.2 million primarily due to paydowns. Agricultural loans decreased $0.3 million primarily
due to seasonal activity. Farmland loans increased $3.5 million due to seasonal activity. One-to four-family loans increased $5.5 million primarily
due to new originations. Multifamily loans increased $46.2 million primarily due to the conversion of existing construction loans to permanent
financing and the origination of new loans. Non-farm non-residential loan balances increased $114.0 million primarily due to new originations and
the conversion of construction and land development loans to permanent financing. First Guaranty had approximately 3.0% of funded and 1.7%
of unfunded commitments in our loan portfolio to businesses engaged in support or service activities for oil and gas operations. First Guaranty's
hotel and hospitality portfolio totaled $178.9 million at December 31, 2024. As part of the management of risks in our loan portfolio, First Guaranty
had previously established an internal guidance limit of approximately $200.0 million for its hotel and hospitality portfolio. First Guaranty had
$407.1 million in loans related to our Texas markets at December 31, 2024 which was an increase of $31.4 million or 8.4% from $375.7 million
at December 31, 2023. First Guaranty had $335.5 million in loans related to our new Mideast markets in Kentucky and West Virginia at December
31, 2024 which was an increase of $57.5 million or 20.7% from $278.1 million at December 31, 2023. Syndicated loans at December 31, 2024
were $53.9 million, of which $27.6 million were shared national credits. Syndicated loans decreased $22.8 million from $76.7 million at December
31, 2023.
As of December 31, 2024, 79.2% of our loan portfolio was secured by real estate. The largest portion of our loan portfolio, at 42.9% as of
December 31, 2024, was non-farm non-residential loans secured by real estate. As of December 31, 2024, approximately 53.1% of the loan
9 Decades of Commitment to Customer Service 29
Loan Portfolio Maturities.
The following tables summarize the scheduled repayments of our loan portfolio at December 31, 2024. Demand loans, loans having no stated
repayment schedule or maturity, and overdraft loans are reported as being due in one year or less. Maturities are based on the final contractual
payment date and do not reflect the effect of prepayments and scheduled principal amortization.
December 31, 2024
One Year
or Less
More Than One
Year Through
Five Years
More Than Five
Years Through
Fifteen Years
After Fifteen
Years
Total
(in thousands)
Real Estate:
Construction & land development
$ 129,043
$ 52,341
$ 97,026 $ 51,638
$ 330,048
Farmland
7,406
2,302
4,038
22,245
35,991
1- 4 family
10,754
27,991
43,417
368,209
450,371
Multifamily
22,219
59,613
20,410
62,879
165,121
Non-farm non-residential
174,350
314,846
161,073
509,574
1,159,843
Total Real Estate
343,772
457,093
325,964
1,014,545
2,141,374
Non-Real Estate:
Agricultural
14,162
7,673
8,181
10,706
40,722
Commercial and industrial
105,225
125,548
21,804
4,941
257,518
Commercial leases
45,615
174,585
-
-
220,200
Consumer and other
10,474
27,004
4,788
-
42,266
Total Non-Real Estate
175,476
334,810
34,773
15,647
560,706
Total Loans Before Unearned Income
$ 519,248
$ 791,903 $ 360,737 $ 1,030,192
$ 2,702,080
Less: Unearned Income
(8,300 )
Total Loans Net Of Unearned Income
$ 2,693,780
portfolio was based on a floating rate tied to the prime rate, SOFR or Treasury rates. 46.2% of the loan portfolio is scheduled to mature within five
years from December 31, 2024. First Guaranty initiated a process to transfer any LIBOR indexed loans to alternative reference rates such as the
prime rate or SOFR as LIBOR was discontinued for repricings after June 30, 2023.
Commercial real estate (“CRE”) has received increased regulatory scrutiny in recent quarters due to valuation concerns associated with the
increase in market interest rates and the impact of the COVID-19 pandemic. First Guaranty has utilized enhanced risk management practices for
CRE concentration analysis for several years. First Guaranty Bank’s credit department conducts an annual stress test for CRE related loans that is
presented to the Bank’s board of directors. The stress test analyzes the impact of changes in interest rates and cash flow on loan customers with
credit exposures of $2.5 million or greater. First Guaranty generally requires personal guarantees on CRE loans. First Guaranty generally approves
CRE loans with loan-to-values of 80% or less. First Guaranty also generally requires for construction related CRE loans that the borrower provides
their equity contribution upfront before loan funds are advanced. First Guaranty modified its business strategy in 2024 to reduce exposure to
commercial real estate related loans, particularly loans secured by non-owner occupied properties and construction loans for commercial real
estate.
First Guaranty has diversified its CRE portfolio across both industries and geographic location. The following is a summary of the largest CRE
related loans associated with hotel and motels, office properties, apartment complexes, healthcare related properties, and properties under
construction as of December 31, 2024. The largest CRE loan secured by a hotel or motel totaled $19.9 million. The property is a flagged hotel
located in Texas. The largest CRE loan secured by an office related property totaled $21.3 million and is located in West Virginia. The largest CRE
loan secured by an apartment complex totaled $26.0 million and is located in Texas. The largest healthcare related loan is a $32.9 million property
secured by an assisted living center located in Alabama. The largest CRE loan under construction totaled $40.4 million for an apartment complex
and is secured by a property located in Louisiana.
30 First Guaranty Bancshares, Inc. Annual Report 2024
The following table sets forth the scheduled repayments of fixed and adjustable-rate loans at December 31, 2024 that are contractually due after
December 31, 2024.
Included in floating rate loans are loans that adjust to a floating rate following an initial fixed rate period. The initial fixed rate periods are typically
one, three, or five year periods.
Non-performing Assets.
Non-performing assets consist of non-performing loans and other real-estate owned. Non-performing loans are those on which the accrual of
interest has stopped or loans which are contractually 90 days past due on which interest continues to accrue. Loans are ordinarily placed on
nonaccrual status when principal and interest is delinquent for 90 days or more. However, management may elect to continue the accrual when
the estimated net available value of collateral is sufficient to cover the principal balance and accrued interest. It is our policy to discontinue the
accrual of interest income on any loan for which we have reasonable doubt as to the payment of interest or principal. When a loan is placed on
nonaccrual status, unpaid interest credited to income is reversed. Nonaccrual loans are returned to accrual status when the financial position
of the borrower indicates there is no longer any reasonable doubt as to the payment of principal or interest. Other real estate owned consists of
property acquired through formal foreclosure, in-substance foreclosure or by deed in lieu of foreclosure.
Due After December 31, 2024
(in thousands)
Fixed
Floating
Total
One year or less
$ 240,685
$ 245,272
$ 485,957
One to five years
501,800
256,720
758,520
Over five to 15 years
62,412
293,173
355,585
Over 15 years
358,727
634,762
993,489
Subtotal
$ 1,163,624
$ 1,429,927
$ 2,593,551
Nonaccrual loans
108,529
Total
$ 2,702,080
9 Decades of Commitment to Customer Service 31
The following table shows the principal amounts and categories of our non-performing assets at December 31, 2024 and 2023.
December 31,
2024
2023
(in thousands)
Nonaccrual loans:
Real Estate:
Construction and land development
$ 3,624
$
530
Farmland
2,619
836
1- 4 family
10,053
6,985
Multifamily
27,542
537
Non-farm non-residential
54,171
9,740
Total Real Estate
98,009
18,628
Non-Real Estate:
Agricultural
1,992
1,369
Commercial and industrial
6,762
1,581
Commercial leases
1,533
1,799
Consumer and other
233
1,810
Total Non-Real Estate
10,520
6,559
Total nonaccrual loans
108,529
25,187
Loans 90 days and greater delinquent & still accruing:
Real Estate:
Construction and land development
7,394
-
Farmland
-
-
1- 4 family
-
124
Multifamily
-
-
Non-farm non-residential
4,108
14,711
Total Real Estate
11,502
14,835
Non-Real Estate:
-
Agricultural
-
57
Commercial and industrial
-
395
Commercial leases
-
-
Consumer and other
-
-
Total Non-Real Estate
-
452
Total loans 90 days and greater delinquent & still accruing
11,502
15,287
Total non-performing loans≠≠≠
$
120,031
$
40,474
Other real estate owned and foreclosed assets::
Real Estate:
Construction and land development
226
251
Farmland
-
-
1- 4 family
3
309
Multifamily
-
-
Non-farm non-residential
90
690
Total Real Estate
319
1,250
32 First Guaranty Bancshares, Inc. Annual Report 2024
December 31,
2024
2023
(in thousands)
Non-Real Estate:
Agricultural
-
-
Commercial and industrial
-
-
Commercial leases
-
-
Consumer and other
-
-
Total Non-Real Estate
-
-
Total other real estate owned and foreclosed assets
319
1,250
Total non-performing assets
$ 120,350
$
41,724
Non-performing assets to total loans
4.47%
1.52%
Non-performing assets to total assets
3.03%
1.17%
Non-performing loans to total loans
4.46%
1.47%
Nonaccrual loans to total loans
4.03%
0.92%
Allowance for credit losses to nonaccrual loans
32.08%
122.79%
Non-performing assets were $120.4 million, or 3.03%, of total assets at December 31, 2024, compared to $41.7 million, or 1.17%, of total assets
at December 31, 2023, which represented an increase in non-performing assets of $78.6 million. The increase in non-performing assets occurred
primarily due to an increase in nonaccrual loans, partially offset by a decrease in loans 90 days greater delinquent and still accruing and other real
estate owned. Nonperforming loans included loans previously classified as purchase credit deteriorated following the adoption of CECL.
Nonaccrual loans increased from $25.2 million at December 31, 2023 to $108.5 million at December 31, 2024. The increase in total nonaccrual
loans was concentrated primarily in non-farm non-residential and multifamily loans. Non-performing assets included $3.9 million in loans with a
government guarantee, or 3.24% of non-performing assets. These are structured as net loss guarantees in which up to 90% of loss exposure is
covered.
At December 31, 2024 loans 90 days and greater delinquent and still accruing totaled $11.5 million, a decrease of $3.8 million or 24.8% from
$15.3 million at December 31, 2023. The decrease in loans 90 days or greater delinquent and still accruing was concentrated primarily in non-
farm non-residential loans.
Other real estate owned at December 31, 2024 totaled $0.3 million, a decrease of $0.9 million from $1.3 million at December 31, 2023.
At December 31, 2024, the largest 6 non-performing loan relationships comprise 76% of total non-performing loans. Additional details on the
non-performing relationships are as follows:
1.
A $28.7 million loan relationship secured by an assisted living center located in Louisiana; the loan was placed on nonaccrual in the fourth
quarter of 2024.
2.
A $26.0 million loan relationship secured by a multifamily apartment complex located in Texas; the loan was placed on nonaccrual in the
fourth quarter of 2024.
3.
A $23.0 million loan relationship was placed on nonaccrual at June 30, 2024. The loan relationship originally totaled $37.0 million and was
secured by five retail shopping center properties located in the Midwest. First Guaranty initiated liquidation of the collateral with two properties
sold in the fourth quarter of 2024. The proceeds, net of charge-offs, reduced the balance to $23.0 million. First Guaranty anticipates
continued reduction in this loan relationship through additional sales of properties in 2025.
4.
A $7.4 million loan relationship contractually matured at the end of the third quarter of 2024 and was greater than 90 days at December 31,
2024. The loan is secured by land located in Texas.
5.
A $4.0 million loan relationship contractually matured at the end of the third quarter of 2024 and was greater than 90 days at December 31,
2024. The loan is secured by a hotel located in Louisiana. First Guaranty and the borrower satisfactorily renewed the relationship in January
2025. It was removed from the nonperforming category and moved to performing in January of 2025.
6.
A $2.0 million loan relationship secured by a one- to four- family residential property located in West Virginia; the loan was placed on
nonaccrual at June 30, 2024.
9 Decades of Commitment to Customer Service 33
Classified Assets.
Federal regulations provide for the classification of loans and other assets, such as debt and equity securities considered by the FDIC to be of
lesser quality, as "substandard," "doubtful" or "loss." An asset is considered "substandard" if it is inadequately protected by the current net worth
and paying capacity of the obligor or of the collateral pledged, if any. "Substandard" assets include those characterized by the "distinct possibility"
that the insured institution will sustain "some loss" if the deficiencies are not corrected. Assets classified as "doubtful" have all of the weaknesses
inherent in those classified as "substandard," with the added characteristic that the weaknesses present make "collection or liquidation in full," on
the basis of currently existing facts, conditions, and values, "highly questionable and improbable." Assets classified as "loss" are those considered
"uncollectible" and of such little value that their continuance as assets without the establishment of a specific allowance for credit losses is not
warranted. Assets that do not currently expose the insured institution to sufficient risk to warrant classification in one of the aforementioned
categories but possess weaknesses are designated as "special mention" by our management.
When an insured institution classifies problem assets as either substandard or doubtful, it may establish general allowances in an amount deemed
prudent by management to cover losses that were both probable and reasonable to estimate. General allowances represent allowances which
have been established to cover accrued losses associated with lending activities that were both probable and reasonable to estimate, but which,
unlike specific allowances, have not been allocated to particular problem assets. When an insured institution classifies problem assets as "loss," it
is required either to establish a specific allowance for losses equal to 100% of that portion of the asset so classified or to charge-off such amount.
An institution's determination as to the classification of its assets and the amount of its valuation allowances is subject to review by the regulatory
authorities, which may require the establishment of additional general or specific allowances.
In connection with the filing of our periodic regulatory reports and in accordance with our classification of assets policy, we continuously assess the
quality of our loan portfolio and we regularly review the problem loans in our loan portfolio to determine whether any loans require classification
in accordance with applicable regulations. Loans are listed on the "watch list" initially because of emerging financial weaknesses even though the
loan is currently performing as agreed, or delinquency status, or if the loan possesses weaknesses although currently performing. Management
reviews the status of our loan portfolio delinquencies, by product types, with the full board of directors on a monthly basis. Individual classified loan
relationships are discussed as warranted. If a loan deteriorates in asset quality, the classification is changed to "special mention," "substandard,"
"doubtful" or "loss" depending on the circumstances and the evaluation. Generally, loans 90 days or more past due are placed on nonaccrual
status and classified "substandard."
We also employ a risk grading system for our loans to help assure that we are not taking unnecessary and/or unmanageable risk. The primary
objective of the loan risk grading system is to establish a method of assessing credit risk to further enable management to measure loan portfolio
quality and the adequacy of the allowance for credit losses. Further, we contract with an external loan review firm to complete a credit risk
assessment of the loan portfolio on a regular basis to help determine the current level and direction of our credit risk. The external loan review
firm communicates the results of their findings to the Bank's audit committee. Any material issues discovered in an external loan review are also
communicated to us immediately.
The increase in classified assets at December 31, 2024 as compared to December 31, 2023 was due to a $96.8 million increase in substandard
loans offset by a $1.1 million decrease in doubtful loans. The increase in substandard loans was primarily the result of downgrades during the
second quarter of 2024 of two related commercial loan relationships, with balances of $22.3 million and $16.9 million, from pass to substandard
status, and one commercial loan relationship totaling $28.7 million downgraded during the third quarter of 2024, from special mention to
substandard status, and one multifamily loan totaling $26.0 million downgraded during the fourth quarter of 2024, from special mention to
substandard status. The $28.7 million commercial loan relationship was pass status at December 31, 2023. The decrease in doubtful loans was
primarily the result of the payoff of a $0.4 million one-to-four family loan classified as doubtful during the first quarter of 2024. Special mention
loans increased by $66.9 million in 2024. The increase in special mention loans was primarily the result of downgrade during the third quarter
of 2024 of one commercial lease loan relationship totaling $18.1 million, and one downgrade during the fourth quarter of 2024 of one real estate
loan relationship totaling $16.0 million, from pass to special mention status.
34 First Guaranty Bancshares, Inc. Annual Report 2024
Allowance for Credit Losses.
First Guaranty adopted FASB ASC Topic 326 “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments”
Update No. 2016-13 (“ASU 2016-13”). ASU 2016-13 on January 1, 2023. ASU 2016-13, referred to as the Current Expected Credit Loss
(“CECL”) standard, requires financial assets measured on an amortized cost basis, including loans and held-to-maturity debt securities, to be
presented at an amount net of an allowance for credit losses, which reflects expected losses for the full life of the financial asset. Unfunded lending
commitments are also within the scope of this topic. Under prior GAAP losses were not recognized until the occurrence of the loss was probable.
The allowance for credit losses on loans is maintained to absorb expected losses over the life of the loans in the loan portfolio. The allowance is
increased by the provision for credit losses, offset by recoveries of previously charged-off loans and is decreased by loan charge-offs. The provision
is a charge to current expense to provide for current expected loan losses and to maintain the allowance commensurate with management's
evaluation of the risks inherent in the loan portfolio. Various factors are taken into consideration when determining the amount of the provision and
the adequacy of the allowance. These factors include but are not limited to:
• past due and non-performing assets;
• specific internal analysis of loans requiring special attention;
• the current level of regulatory classified and criticized assets and the associated risk factors with each;
• changes in underwriting standards or lending procedures and policies;
• charge-off and recovery practices;
• national and local economic and business conditions;
• nature and volume of loans;
• overall portfolio quality, loan concentrations and portfolio stress test results;
• adequacy of loan collateral;
• quality of loan review system and degree of oversight by our board of directors;
• competition and legal and regulatory requirements on borrowers;
• examinations of the loan portfolio by federal and state regulatory agencies and examinations; and
• review by our internal loan review department and independent accountants.
The data collected from all sources in determining the adequacy of the allowance is evaluated on a regular basis by management with
regard to current national and local economic trends, prior loss history, underlying collateral values, credit concentrations and industry
risks. An estimate of potential loss on specific loans is developed in conjunction with an overall risk evaluation of the total loan portfolio. This
evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as new information becomes available.
The allowance consists of specific, general, and unallocated components. The specific component relates to loans that are classified
as doubtful, substandard, or collateral dependent. For such loans that are also classified as collateral dependent, an allowance is
established when the collateral value is lower than the carrying value of that loan. The general component covers non-classified
loans and special mention loans and is based on historical loss experience for the past three years adjusted for qualitative factors
described above. An unallocated component is maintained to cover uncertainties that could affect the estimate of probable losses.
The balance in the allowance for credit losses is principally influenced by the provision for credit losses, recoveries, and by net loan
loss experience. Additions to the allowance are charged to the provision for credit losses. Losses are charged to the allowance as
incurred and recoveries on losses previously charged to the allowance are credited to the allowance at the time recovery is collected.
The allowance for credit losses was $34.8 million at December 31, 2024 compared to $30.9 million at December 31, 2023.
The balance in the allowance for credit losses is principally influenced by the provision for credit losses and by net loan loss experience. Additions
to the allowance are charged to the provision for credit losses. Losses are charged to the allowance as incurred and recoveries on losses previously
charged to the allowance are credited to the allowance at the time recovery is collected. The table below reflects the activity in the allowance for
credit losses for the years indicated. As previously disclosed, the adoption of the CECL model in ASC 326 was the cause of most of the increase
in the allowance in 2023.
9 Decades of Commitment to Customer Service 35
At or For the Years Ended December 31,
2024
2023
(dollars in thousands)
Balance at beginning of year
$
30,926
$
23,518
ASC 326 Adoption Day 1 Adjustment
-
8,120
Charge-offs:
Real Estate:
Construction and land development
(39)
-
Farmland
(258)
-
1- 4 family
(1,034)
(964)
Multifamily
-
-
Non-farm non-residential
(9,000)
(138)
Total Real Estate
(10,331)
(1,102)
Non-Real Estate:
Agricultural
(33)
-
Commercial and industrial loans
(4,873)
(1,694)
Commercial leases
-
-
Consumer and other
(3,354)
(2,975)
Total Non-Real Estate
(8,260)
(4,669)
Total charge-offs
(18,591)
(5,771)
Recoveries:
Real Estate:
Construction and land development
1
7
Farmland
2
-
1- 4 family
12
93
Multifamily
-
-
Non-farm non-residential
93
230
Total Real Estate
108
330
Non-Real Estate:
Agricultural
18
414
Commercial and industrial loans
235
205
Commercial leases
-
-
Consumer and other
551
426
Total Non-Real Estate
804
1,045
Total recoveries
912
1,375
Net (charge-offs)
(17,679)
(4,396)
Provision for credit losses
21,564
3,684
Balance at end of year
$ 34,811
$ 30,926
Ratios:
Net loan charge-offs to average loans
0.64%
0.17%
Net loan charge-offs to loans at end of year
0.66%
0.16%
Allowance for credit losses to loans at end of year
1.29%
1.13%
Net loan charge-offs to allowance for credit losses
50.79%
14.21%
Net loan charge-offs to provision charged to expense
81.98%
119.33%
36 First Guaranty Bancshares, Inc. Annual Report 2024
A provision for credit losses of $20.0 million was made during the year ended December 31, 2024 and $3.7 million for the same period in 2023.
The provisions made in 2024 included a $1.6 million negative provision for credit losses related to unfunded commitments and a $0.1 million
provision for credit losses on HTM securities. The provisions made were taken to provide for current credit losses and to maintain the allowance
proportionate to risks inherent in the loan portfolio.
The loan portfolio factors in 2024 that primarily affected the allocation of the allowance included the following:
• Construction and land development loans decreased during 2024 due to loans converted to permanent financing. The allowance decrease
related to this portfolio was due to a decline in the portfolio along with changes in the qualitative analysis of the portfolio related to economic
conditions.
• One-to-four family residential loans increased $5.5 million during 2024. The allowance increase related to this portfolio was due to growth
in the portfolio.
• Multifamily loans increased during 2024. The allowance increase related to this portfolio was due to growth in the portfolio and changes in
the qualitative analysis of the portfolio.
• Non-farm non-residential loans increased by $114.0 million during 2024. The allowance increase related to this portfolio was due to growth,
charge-offs and changes in the qualitative analysis of the portfolio related to economic conditions.
• Commercial and industrial loans decreased during 2024. The allowance decrease related to this portfolio was due to charge-offs and
changes in the qualitative analysis of the portfolio.
• Commercial leases decreased during 2024 from $285.4 million at December 31, 2023 to $220.2 million at December 31, 2024. The
allowance decrease related to this portfolio was due a decline in the portfolio along with changes in the qualitative analysis of the portfolio.
• Consumer and other loans decreased during 2024. The decrease in the related loan loss allowance balance was due primarily to charge-
offs and qualitative analysis of the portfolio.
First Guaranty charged off $18.6 million in loan balances during the year ended December 31, 2024 as compared to $5.8 million for 2023.
Recoveries totaled $0.9 million for the year ended December 31, 2024 and $1.4 million during 2023. The details of the $18.6 million in charged-
off loans were as follows:
1.
First Guaranty charged off $3.2 million in consumer loans during 2024. The consumer loan charge offs included $0.2 million in credit card
loans, $1.3 million of loans secured by automobiles or equipment and $1.7 million in unsecured loans.
2.
First Guaranty charged off $0.2 million on a commercial and industrial SBA loan relationship during the first quarter of 2024. This relationship
had no remaining principal balance at December 31, 2024.
3.
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 December 31, 2024.
4.
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 December 31, 2024.
5.
First Guaranty charged off $0.6 million on a real estate secured loan located in Louisiana during 2024. This was an acquired loan from the
Union Bank acquisition and was secured by rental properties. This loan had no remaining principal balance at December 31, 2024.
6.
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 December 31, 2024.
7.
First Guaranty charged off $0.3 million on a real estate secured SBA loan during the second quarter of 2024. This loan had a remaining
principal balance of $0.9 million at December 31, 2024.
8.
First Guaranty charged off $1.0 million on a loan relationship that is classified as purchased credit deteriorated during the third quarter of
2024. This relationship had remaining principal balance of $1.3 million at December 31, 2024.
9.
First Guaranty charged off $3.9 million on a non-farm non-residential loan relationship during the fourth quarter of 2024. This relationship
had remaining principal balance of $23.0 million at December 31, 2024.
10. Smaller loans and overdrawn deposit accounts comprised the remaining $3.4 million of charge-offs for 2024.
9 Decades of Commitment to Customer Service 37
Allocation of Allowance for Credit Losses.
The following tables set forth the allowance for credit losses allocated by loan category and the percent of loans in each category to total loans at the
dates indicated. The allowance for credit losses allocated to each category is not necessarily indicative of future losses in any particular category
and does not restrict the use of the allowance for losses in other categories.
At December 31,
2024
2023
Allowance for
Credit Losses
Percent of
Allowance to
Total Allowance
for Credit Losses
Percent of
Loans in Each
Category to
Total Loans
Allowance
for Credit
Losses
Percent of
Allowance to
Total Allowance
for Credit Losses
Percent of Loans
in Each Category
to Total Loans
(dollars in thousands)
Real Estate:
Construction and land development
$ 3,930
11.3%
12.2%
$ 5,845
18.9%
14.5%
Farmland
50
0.1%
1.3%
36
0.1%
1.2%
1- 4 family
9,243
26.6%
16.7%
6,653
21.5%
16.1%
Multifamily
3,949
11.4 %
6.1%
1,614
5.2%
4.3%
Non-farm non-residential
11,531
33.1%
42.9%
10,596
34.3%
37.9%
Non-Real Estate:
Agricultural
204
0.6%
1.5%
97
0.3%
1.5%
Commercial and industrial
1,994
5.7%
9.5%
2,711
8.8%
12.1%
Commercial leases
1,719
4.9%
8.2%
1,948
6.3%
10.4%
Consumer and other
1,337
3.8%
1.6%
1,426
4.6%
2.0%
Unallocated
854
2.5%
-%
-
-%
-%
Total Allowance
$ 34,811
100.0%
100.0%
$ 30,926
100.0%
100.0%
The following table presents net charge-offs during the period to average loans outstanding:
December 31, 2024
December 31, 2023
Net
(Charge-offs)
Recoveries
Average Loans
Oustanding1
Net Charge-offs
During Period to
Average Loans
Oustanding
Net
(Charge-offs)
Recoveries
Average Loans
Oustanding1
Net Charge-offs
During Period to
Average Loans
Oustanding
(in thousands, except for %)
Real Estate:
Construction and land development
(38)
$ 334,119
-%
$ 7
$ 333,107
-%
Farmland
(256)
37,897
(0.7)%
-
29,089
-%
1- 4 family
(1,022)
459,045
(0.2)%
(871)
414,007
(0.2)%
Multifamily
-
163,192
-%
-
120,522
-%
Non-farm non-residential
(8,907)
1,155,757
(0.8)%
92
1,037,722
-%
Non-Real Estate:
Agricultural
(15)
44,887
-%
414
44,308
0.9%
Commercial and industrial
(4,638)
281,462
(1.6)%
(1,489)
343,041
(0.4)%
Commercial leases
-
247,802
-%
-
290,559
-%
Consumer and other
(2,803)
46,308
(6.1)%
(2,549)
49,370
(5.2)%
1Average loans outstanding was calculated using the trailing four quarters total for loans.
38 First Guaranty Bancshares, Inc. Annual Report 2024
Investment Securities.
Investment securities at December 31, 2024 totaled $602.7 million, an increase of $198.6 million, or 49.1%, compared to $404.1 million at
December 31, 2023. The portfolio consists of both available for sale (AFS) and held to maturity securities (HTM). The securities designated as
held to maturity are agency and corporate debt securities that are part of First Guaranty’s investment strategy and public funds collateralization
program. We purchase securities for our investment portfolio to provide a source of liquidity, to provide an appropriate return on funds invested, to
manage interest rate risk and meet pledging requirements for public funds and borrowings.
The securities portfolio consisted principally of U.S. Government and Government agency securities, agency mortgage-backed securities, corporate
debt securities and municipal bonds. U.S. government agencies consist of FHLB, Federal Farm Credit Bank ("FFCB"), Freddie Mac and Fannie
Mae obligations. Mortgage-backed securities that we purchase are issued by Freddie Mac and Fannie Mae. Management monitors the securities
portfolio for both credit and interest rate risk. We generally limit the purchase of corporate securities to individual issuers to manage concentration
and credit risk. Corporate securities generally have a maturity of 10 years or less. U.S. Government securities consist of U.S. Treasury bills that have
maturities of less than 30 days. Government agency securities generally have maturities of 15 years or less. Agency mortgage-backed securities
have stated final maturities of 15 to 20 years.
At December 31, 2024, the U.S. Government and Government agency securities and municipal bonds qualified as securities available to
collateralize public funds. Securities pledged as collateral totaled $233.9 million at December 31, 2024 and $192.2 million at December 31, 2023.
Our public funds deposits have a seasonal increase due to tax collections at the end of the year and the first quarter. We typically collateralize the
seasonal public fund increases with short term instruments such as U.S. Treasuries or other agency backed securities.
Our available for sale securities portfolio totaled $281.1 million at December 31, 2024, an increase of $197.6 million, or 236.7%, compared
to $83.5 million at December 31, 2023. The increase was primarily due to the purchase of U.S. Treasury securities, collateralized mortgage
obligations, and mortgage-backed securities.
Our held to maturity securities portfolio had an amortized cost of $321.6 million, net of allowance at December 31, 2024, compared to $320.6
million at December 31, 2023.
There were no credit related impairment of available for sale securities during 2024. There were no charge-offs recorded during 2024. There was
a provision of $0.1 million recorded in the fourth quarter of 2024. The allowance for credit losses for held to maturity securities was $0.2 million
at December 31, 2024.
The following tables set forth the stated maturities and weighted average yields of our investment securities at December 31, 2024.
At December 31, 2024
One Year or Less
More than One Year
through Five Years
More than Five Years
through Ten Years
More than Ten Years
Carrying
Value
Weighted
Average
Yield
Carrying
Value
Weighted
Average
Yield
Carrying
Value
Weighted
Average
Yield
Carrying
Value
Weighted
Average
Yield
(in thousands, except for %)
Available for sale:
U.S. Treasuries
$ 147,780
4.2%
$ -
-%
$ -
-%
$ -
-%
U.S. Government Agencies
-
-%
-
-%
-
-%
-
-%
Corporate debt securities
-
-%
1,451
8.1%
10,131
5.5%
-
-%
Municipal bonds
6,056
5.7%
4,494
4.1%
8,402
4.1%
2,602
3.5%
Collateralized mortgage obligations
-
-%
-
-%
4,132
4.6%
27,486
4.3%
Mortgage-backed securities
-
-%
1
5.3%
3
6.4%
68,495 4.4%
Total available for sale securities
$ 153,836
4.3%
$ 5,946
5.1%
$ 22,668
4.8%
$ 98,583
4.4%
Held to maturity:
U.S. Government Agencies
$ -
-%
$ -
-%
$ 87,143
2.4%
$ 179,619
2.4%
Corporate debt securities
$ -
-%
$ 6,420
3.3%
$ 48,591
3.2%
$ -
-%
Total held to maturity securities
$ -
-%
$ 6,420
3.3%
$135,734
2.7%
$ 179,619
2.4%
At December 31, 2024, $153.8 million, or 25.5%, of the securities portfolio was scheduled to mature in less than one year. Securities, not
including mortgage-backed securities and collateralized mortgage obligations, with contractual maturity dates over 10 years totaled $182.2 million,
or 30.2%, of the total portfolio at December 31, 2024. We closely monitor the investment portfolio's yield, duration, and maturity to ensure a
satisfactory return. The average maturity of the securities portfolio is affected by call options that may be exercised by the issuer of the securities
and are influenced by market interest rates. Prepayments of mortgages that collateralize mortgage-backed securities also affect the maturity of
the securities portfolio.
9 Decades of Commitment to Customer Service 39
Deposits.
Managing the mix and pricing the maturities of deposit liabilities is an important factor affecting our ability to maximize our net interest margin.
The strategies used to manage interest-bearing deposit liabilities are designed to adjust as the interest rate environment changes. We regularly
assess our funding needs, deposit pricing and interest rate outlooks. From December 31, 2023 to December 31, 2024, total deposits increased
$467.2 million, or 15.5%, to $3.5 billion. Noninterest-bearing demand deposits decreased $38.7 million, or 8.7% to $404.1 million at December
31, 2024. The decrease in noninterest-bearing demand deposits was primarily concentrated in individual and business noninterest-bearing
demand deposits. Interest-bearing demand deposits decreased $139.6 million, or 9.1%, to $1.4 billion at December 31, 2024. The decrease in
interest-bearing demand deposits was primarily concentrated in public funds interest-bearing demand deposits. Savings deposits increased $15.5
million, or 7.1%, to $234.4 million at December 31, 2024, primarily related to increases in business and individual savings deposits. Time deposits
increased $630.0 million, or 76.8%, to $1.5 billion at December 31, 2024, primarily due to increases in consumer and business time deposits
along with increased brokered time deposits of approximately $481.7 million. These new brokered time deposits have maturities of two and three
years. The proceeds from the new deposits were used to reduce short-term FHLB borrowings.
Management will continue to evaluate and update our product mix and related technology in its efforts to attract additional customers. We
currently offer a number of deposit products that are competitively priced and designed to attract and retain customers with primary emphasis on
noninterest-bearing deposits and other lower cost deposits.
At December 31, 2024, public funds deposits totaled $1.0 billion compared to $1.2 billion at December 31, 2023. Public funds time deposits
totaled $78.4 million at December 31, 2024 compared to $50.9 million at December 31, 2023. Public funds deposits decreased due to decreased
balances from existing customers that was primarily attributed to seasonal fluctuations. First Guaranty has developed a program for the retention
and management of public funds deposits. Since the end of 2012, First Guaranty has maintained public funds deposits in excess of $400.0
million. These deposits are from public entities such as school districts, hospital districts, sheriff departments and municipalities. The majority of
these funds are under fiscal agency agreements with terms of three years or less. Deposits under fiscal agency agreements are generally stable
but public entities may maintain the ability to negotiate term deposits on a specific basis including with other financial institutions. These deposits
generally have stable balances as we maintain both operating accounts and time deposits for these entities. There is a seasonal component to
public deposit levels associated with annual tax collections. Public funds will increase at the end of the year and during the first quarter. In addition
to seasonal fluctuations, there are monthly fluctuations associated with internal payroll and short-term tax collection accounts for our public funds
deposit accounts. Public funds deposit accounts are collateralized by FHLB letters of credit, by expanded reciprocal deposit insurance programs,
by Louisiana municipal bonds and by eligible government and government agency securities such as those issued by the FHLB, FFCB, Fannie
Mae, and Freddie Mac. First Guaranty continues to grow the proportion of its public funds portfolio that is collateralized by reciprocal deposit
insurance as an alternative to pledging securities or utilizing FHLB letters of credit. First Guaranty initiated this strategy to more efficiently invest
these deposits in higher yielding loans to improve the net interest margin and earnings. Total public funds collateralized by reciprocal deposit
insurance programs increased to $609.4 million at December 31, 2024 compared to $591.7 million at December 31, 2023.
The following table sets forth public funds as a percent of total deposits.
December 31,
2024
2023
(in thousands except for %)
Public Funds:
Noninterest-bearing Demand
$ 4,385
$ 6,471
Interest-bearing Demand
915,067
1,090,527
Savings
48,925
46,606
Time
78,420
50,934
Total Public Funds
$ 1,046,797
$ 1,194,538
Total Deposits
$ 3,476,260
$ 3,009,094
Total Public Funds as a percent of Total Deposits
30.1%
39.7%
40 First Guaranty Bancshares, Inc. Annual Report 2024
Borrowings.
First Guaranty maintains borrowing relationships with other financial institutions as well as the Federal Home Loan Bank on a short and long-term
basis to meet liquidity needs. First Guaranty had $7.0 million in short-term borrowings outstanding at December 31, 2024 compared to $66.3
million outstanding at December 31, 2023. The short-term borrowings at December 31, 2024 were comprised of repurchase agreements of $7.0
million. The short-term borrowings outstanding at December 31, 2023 were comprised of short-term Federal Home Loan Bank advances of $50.0
million, a line of credit of $20.0 million with an outstanding balance of $10.0 million and repurchase agreements of $6.3 million.
First Guaranty had long-term borrowings from the FHLB that totaled $135.0 million at December 31, 2024. First Guaranty converted previous
short-term floating rate borrowings from the FHLB into long-term lower fixed rate borrowings in order to reduce interest expense. First Guaranty
has a $100.0 million FHLB advance that matures in the second quarter of 2027, and a $35.0 million FHLB advance that matures in the third
quarter of 2027.
At December 31, 2024, we had $455.7 million in FHLB letters of credit outstanding obtained primarily for collateralizing public deposits compared
to $513.3 million at December 31, 2023.
First Guaranty had senior long-term debt totaling $15.2 million at December 31, 2024 and $39.1 million at December 31, 2023. The change in
senior long-term debt occurred when First Guaranty paid down $30.0 million of long term senior debt with the issuance of subordinated debt in
March 2024.
First Guaranty also had subordinated debt totaling $44.7 million at December 31, 2024 and $15.0 million at December 31, 2023.
Shareholders' Equity.
Total shareholders' equity increased to $255.0 million at December 31, 2024 from $249.6 million at December 31, 2023. The increase in
shareholders' equity was principally the result of an increase of $5.0 million in retained earnings, $0.3 million in surplus and a $0.1 million
decrease in accumulated other comprehensive loss. The $5.0 million increase in retained earnings was primarily due to net income of $12.4
million during the year ended December 31, 2024, partially offset by $5.1 million in cash dividends paid on shares of our common stock and
$2.3 million in cash dividends paid on shares of our preferred stock. The $0.3 million increase in surplus was due to common stock issued under
the Equity Bonus Plan during the first quarter of 2024. The decrease in accumulated other comprehensive loss was primarily attributed to the
decrease in unrealized losses on available for sale securities during the year ended December 31, 2024.
December 31, 2024
(in thousands)
Three months or less
$ 57,031
Three to six months
41,472
Six months to one year
70,657
One to three years
18,393
More than three years
13,423
Total certificates of deposit greater than $250,000
$ 200,976
At December 31, 2024, the aggregate amount of outstanding certificates of deposit in amounts greater than or equal to $250,000 was approximately
$201.0 million. At December 31, 2024, approximately $31.8 million of our certificates of deposit greater than or equal to $250,000 had a
remaining term greater than one year.
The total amount of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) was estimated at
$278.9 million at December 31, 2024. This total excludes public funds deposits that are collateralized by securities or FHLB letters of credit. The
amount of uninsured deposits including collateralized public funds deposits was estimated at $840.2 million at December 31, 2024.
The following table sets forth the maturity of certificates of deposits greater than $250,000 at December 31, 2024.
9 Decades of Commitment to Customer Service 41
Results of Operations
A discussion regarding significant changes in our financial condition from December 31, 2022 to December 31, 2023 and our results of operations
for the year ended December 31, 2022 can be found under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 15, 2024, which is available
on the SEC’s website at www.sec.gov and on our website, www.fgb.net.
Performance Summary
Year ended December 31, 2024 compared with year ended December 31, 2023. Net income for the year ended December 31, 2024 was $12.4
million, an increase of $3.2 million, or 35.0%, as compared to $9.2 million for the year ended December 31, 2023. The increase in net income of
$3.2 million for the year ended December 31, 2024 was the result of several factors. First Guaranty experienced an increase in interest income,
an increase in noninterest income, and a decrease in noninterest expense. This increased income was partially offset by an increase in interest
expense and an increase in the provision for credit losses. Loan interest income increased due to the growth in First Guaranty's loan portfolio and
repricing of existing loans to higher market rates, including loan fees recognized as an adjustment to yield. Securities interest income increased
due to an increase in the average yield of the investment portfolio. Noninterest income increased primarily due to the net gain on sale of assets
related to the sale-leaseback transaction and an increase on gains on the sale of loans. Noninterest expense decreased primarily due to decreased
legal and professional fees, marketing, travel and lodging, operating supplies, and data processing. Factors that partially offset the increase in net
income included an increase in interest expense that was due to increases in volume of interest-bearing liabilities and market interest rates. The
increase in the provision was related to changes within the portfolio and charge-offs experienced in 2024. Earnings per common share for the
years ended December 31, 2024 was $0.81 per common share, an increase of 30.6% or $0.19 per common share from $0.62 per common share
for the year ended December 31, 2023.
Net Interest Income
Our operating results depend primarily on our net interest income, which is the difference between interest income earned on interest-earning
assets, including loans and securities, and interest expense incurred on interest-bearing liabilities, including deposits and other borrowed funds.
Interest rate fluctuations, as well as changes in the amount and type of interest-earning assets and interest-bearing liabilities, combine to affect
net interest income. First Guaranty’s assets and liabilities are generally most affected by changes in the Federal Funds rate, SOFR rate, short term
Treasury rates such as one month and three month Treasury bills, and longer term Treasury rates such as the U.S. ten year Treasury rate. These
rates increased in 2022 and 2023 due to the impact of inflation and the Federal Reserve's actions to reduce inflation by increasing interest rates.
Our net interest income is affected by changes in the amount and mix of interest-earning assets and interest-bearing liabilities. There may also be
a time lag in the effect of interest rate changes on assets and liabilities. It is also affected by changes in yields earned on interest-earning assets
and rates paid on interest-bearing deposits and other borrowed funds.
A financial institution's asset and liability structure is substantially different from that of a non-financial company, in that virtually all assets and
liabilities are monetary in nature. Accordingly, changes in interest rates may have a significant impact on a financial institution's performance. The
impact of interest rate changes depends on the sensitivity to the change of our interest-earning assets and interest-bearing liabilities. The effects
of the changing interest rate environment in recent periods and our interest sensitivity position is discussed below.
Year ended December 31, 2024 compared with year ended December 31, 2023. Net interest income for the years ended December 31, 2024 and
2023 was $88.4 million and $84.7 million, respectively. The increase in net interest income for the year ended December 31, 2024 as compared
to the prior year was primarily due to an increase in the average balance of our total interest-earning assets and an increase in the average yield
of our total interest-earning assets, partially offset by an increase in the average balance of our total interest-bearing liabilities and an increase in
the average rate of our total interest-bearing liabilities. For the year ended December 31, 2024, the average balance of our total interest-earning
assets increased by $438.4 million to $3.6 billion due to strong growth in our loan portfolio and an increase in interest-earning deposits with banks.
The average yield of our interest-earning assets increased by 37 basis points to 6.18% from 5.81% for the year ended December 31, 2023 due
to an improved mix of higher yielding assets. For the year ended December 31, 2024, the average balance of our total interest-bearing liabilities
increased by $495.7 million to $3.0 billion due to growth in interest-bearing deposits and borrowings. The average rate of our total interest-bearing
liabilities increased by 52 basis points to 4.42% from 3.90% for the year ended 2023. The rise in market interest rates, particularly associated
with Treasury rates, contributed to the increase in our liabilities cost. The primary source of the increase in liabilities cost was associated with the
repricing of maturing time deposits to higher market rates along with interest bearing demand deposits for public funds that are primarily indexed
to Treasury rates. As a result, our net interest rate spread decreased 15 basis points to 1.76% for the year ended December 31, 2024 from 1.91%
for the year ended December 31, 2023. Our net interest margin decreased 22 basis points to 2.47% for the year ended December 31, 2024 from
2.69% for the year ended December 31, 2023.
Interest Income
Year ended December 31, 2024 compared with year ended December 31, 2023. Interest income increased $38.7 million, or 21.1%, to $221.7
million for the year ended December 31, 2024 as compared to the prior year. First Guaranty's loan portfolio expanded during 2024 due to growth
associated with our loan originations and existing loans repriced to higher market rates. These factors contributed to the increase in interest
income as the average balance of our total interest-earning assets, primarily associated with loans, increased, and the average yield of interest-
earning assets increased. The average balance of our interest-earning assets increased $438.4 million to $3.6 billion for the year ended December
31, 2024 as compared to the prior year. The average yield of interest-earning assets increased by 37 basis points to 6.18% for the year ended
December 31, 2024 compared to 5.81% for the year ended December 31, 2023.
Interest income on securities increased $4.3 million to $13.9 million for the year ended December 31, 2024 as compared to the prior year primarily
as a result of an increase in average yield and average balance of securities. The average yield on securities increased by 65 basis points to
2.96% for the year ended December 31, 2024 from 2.31% for the year ended December 31, 2023 due to the decrease in lower yielding Treasury
42 First Guaranty Bancshares, Inc. Annual Report 2024
securities that matured in 2023. The average balance of securities increased $54.2 million to $469.7 million for the year ended December 31,
2024 from $415.5 million for the year ended December 31, 2023 primarily due to an increase in the average balance of our U.S. Treasuries
securities, collateralized mortgage obligations, and mortgage -backed securities portfolios compared to the prior year.
Interest income on loans increased $23.2 million, or 13.9%, to $190.4 million for the year ended December 31, 2024 as a result of an increase in
the average balance and average yield of loans. The average balance of loans (excluding loans held for sale) increased by $169.9 million to $2.8
billion for the year ended December 31, 2024 from $2.6 billion for the year ended December 31, 2023 as a result of new loan originations. The
average yield on loans (excluding loans held for sale) increased by 45 basis points to 6.86% for the year ended December 31, 2024 from 6.41%
for the year ended December 31, 2023 due to the improved mix of loans along with an increase in market interest rates.
Interest income on interest-earning deposits with banks increased $11.1 million to $17.4 million for the year ended December 31, 2024 as
compared to the prior year period as a result of an increase in the average balance of interest-bearing deposits with banks. The average balance
of interest-bearing deposits with banks increased $213.3 million to $338.7 million for the year ended December 31, 2024 from $125.4 million
for the year ended December 31, 2023.
Interest Expense
Year ended December 31, 2024 compared with year ended December 31, 2023. Interest expense increased $35.0 million, or 35.6%, to $133.3
million for the year ended December 31, 2024 from $98.3 million for the year ended December 31, 2023 due primarily to an increase in market
interest rates and due to an increase in the average balance of interest-bearing liabilities. The average rate of interest-bearing demand deposits
increased by 20 basis points during the year ended December 31, 2024 to 4.36% as compared to 4.16% for the prior year. The increase in
market interest rates, particularly U.S. Treasury rates, contributed to the increase in rates paid on interest-bearing demand deposits. The largest
concentration of interest-bearing demand deposits is associated with public funds deposits that are primarily indexed to Treasury rates. Treasury
rates increased as the Federal Reserve increased rates to address increased inflation in the U.S. economy. The average rate of time deposits
increased 111 basis points during the year ended December 31, 2024 to 4.69% as compared to 3.58% for the prior year. The increase in the
average rate of time deposits was due to changes in market rates as existing time deposits repriced to higher market rates. The average balance
of interest-bearing liabilities increased by $495.7 million during the year ended December 31, 2024 to $3.0 billion. This increase was a result of
a $51.4 million increase in the average balance of interest-bearing demand deposits, a $17.4 million increase in the average balance of savings
deposits, a $378.5 million increase in the average balance of time deposits, and a $48.5 million increase in the average balance of borrowings.
Average Balances and Yields. The following table sets forth average balance sheet balances, average yields and costs, and certain other information
for the years indicated. No tax-equivalent yield adjustments were made, as the effect thereof was not material. All average balances are daily
average balances. Nonaccrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying
a zero yield. Loans, net of unearned income, include loans held for sale. The yields set forth below include the effect of deferred fees, discounts
and premiums that are amortized or accreted to interest income or expense.
The net interest income yield presented below is calculated by dividing net interest income by average interest-earning assets and is a measure
of the efficiency of the earnings from the balance sheet activities. It is affected by changes in the difference between interest on interest-earning
assets and interest-bearing liabilities and the percentage of interest-earning assets funded by interest-bearing liabilities.
9 Decades of Commitment to Customer Service 43
(1) Includes Federal Reserve balances reported in cash and due from banks on the consolidated balance sheets.
(2) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by average total interest-earning assets.
(5) The tax adjusted net interest margin was 2.47% and 2.69% for the years ended December 31, 2024 and 2023. A 21% tax rate was used to calculate the effect
on securities income from tax exempt securities for the years ended December 31, 2024 and 2023.
(6) Includes loan fees of $7.1 million and $6.0 million for the years ended December 31, 2024 and 2023.
December 31, 2024
December 31, 2023
Average
Balance
Interest
Yield/
Rate
Average
Balance
Interest
Yield/
Rate
(in thousands, except for %)
Assets
Interest-earning assets:
Interest-earning deposits with banks(1)
$
338,743
$
17,399
5.14%
$ 125,417
$
6,268
5.00%
Securities (including FHLB stock)
469,679
13,925
2.96%
415,504
9,601
2.31%
Federal funds sold
1,378
-
-%
374
-
-%
Loans held for sale
-
-
-%
-
-
-%
Loans, net of unearned income(6)
2,776,990
190,382
6.86%
2,607,074
167,140
6.41%
Total interest-earning assets
3,586,790
221,706
6.18%
3,148,369
183,009
5.81%
Noninterest-earning assets:
Cash and due from banks
19,891
18,729
Premises and equipment, net
69,548
61,733
Other assets
30,785
27,514
Total Assets
$ 3,707,014
$
3,256,345
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Demand deposits
$ 1,499,959
65,331
4.36%
$ 1,448,597
60,243
4.16%
Savings deposits
230,393
5,173
2.25%
213,025
3,554
1.67%
Time deposits
1,048,118
49,166
4.69%
669,661
23,967
3.58%
Borrowings
235,542
13,598
5.77%
187,019
10,540
5.64%
Total interest-bearing liabilities
3,014,012
133,268
4.42%
2,518,302
98,304
3.90%
Noninterest-bearing liabilities:
Demand deposits
414,804
481,456
Other
24,084
18,672
Total Liabilities
3,452,900
3,018,430
Shareholders' Equity
254,114
237,915
Total Liabilities and Shareholders' Equity
$ 3,707,014
$
3,256,345
Net interest income
$ 88,438
$ 84,705
Net interest rate spread(2)
1.76%
1.91%
Net interest-earning assets(3)
$ 572,778
$ 630,067
Net interest margin(4)(5)
2.47%
2.69%
Average interest-earning assets to interest-bearing
liabilities
119.00%
125.02%
44 First Guaranty Bancshares, Inc. Annual Report 2024
For the Years Ended December 31, 2024 vs. 2023
Increase (Decrease) Due To
Volume
Rate
Increase/Decrease
(in thousands except for %)
Interest earned on:
Interest-earning deposits with banks
$
10,952
$
179
$
11,131
Securities (including FHLB stock)
1,363
2,961
4,324
Federal funds sold
-
-
-
Loans held for sale
-
-
-
Loans, net of unearned income
11,259
11,983
23,242
Total interest income
23,574
15,123
38,697
Interest paid on:
Demand deposits
2,180
2,908
5,088
Savings deposits
309
1,310
1,619
Time deposits
16,260
8,939
25,199
Borrowings
2,796
262
3,058
Total interest expense
21,545
13,419
34,964
Change in net interest income
$
2,029
$
1,704
$
3,733
Provision for Credit and Loan Losses
A provision for credit and loan losses is a charge to income in an amount that management believes is necessary to maintain an adequate
allowance for credit losses. The allowance for credit losses is calculated under ASC 326 and is management's evaluation of expected credit losses
over the life of the loans in the portfolio. The provision is based on management's regular evaluation of current economic conditions in our specific
markets as well as regionally and nationally, changes in the character and size of the loan portfolio, underlying collateral values securing loans, and
other factors which deserve recognition in estimating loan losses. Past events, current conditions, and reasonable forecasts, along with quantitative
and qualitative adjustments, are used in calculating the allowance for credit losses. This evaluation is inherently subjective as it requires estimates
that are susceptible to significant revision as more information becomes available or as future events change.
We recorded a $20.0 million provision for credit losses for the year ended December 31, 2024 compared to $3.7 million for 2023. The $20.0
million provision included a $1.6 million negative provision for credit losses related to unfunded commitments and a $0.1 million provision for credit
losses on HTM securities. Total charge-offs were $18.6 million for year ended December 31, 2024 and $5.8 million for 2023. Charge-offs for 2024
were concentrated in consumer auto and equipment secured loans, unsecured consumer loans, a loan relationship that is classified as purchased
credit deteriorated, a loan relationship associated with a restaurant supply business located in Louisiana secured by real estate, equipment and
inventory, and a commercial and industrial loan associated with the Main Street Lending Program. Partially offsetting these charge-offs were
recoveries that totaled $0.9 million for the year ended December 31, 2024 and $1.4 million for the same period in 2023.
We believe that the allowance is adequate to cover expected losses in the loan portfolio. Economic uncertainty may result in additional increases
to the allowance for credit losses in future periods.
Noninterest Income
Our primary sources of recurring noninterest income are customer service fees, ATM and debit card fees, loan fees, gains on the sales of loans and
available for sale securities and other service fees. Noninterest income does not include loan origination fees which are recognized over the life of
the related loan as an adjustment to yield using the interest method.
Noninterest income totaled $24.7 million for the year ended December 31, 2024, an increase of $14.2 million from $10.6 million for the year
ended December 31, 2023. The increase was primarily due to increased gains on sale of assets associated with the sale-leaseback transaction
during the second quarter of 2024. Net securities losses were $0 for the year ended December 31, 2024 as compared to net securities losses of
Volume/Rate Analysis
The following table presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets
and interest-bearing liabilities for the years indicated. The table distinguishes between: (1) changes attributable to volume (changes in volume
multiplied by the prior year's rate); (2) changes attributable to rate (change in rate multiplied by the prior year's volume) and (3) total increase
(decrease) (the sum of the previous columns). Changes attributable to both volume and rate are allocated ratably between the volume and rate
categories.
9 Decades of Commitment to Customer Service 45
$0 for 2023. Service charges, commissions and fees totaled $3.2 million for the year ended December 31, 2024 as compared to $3.4 million for
2023. ATM and debit card fees totaled $3.1 million for the year ended December 31, 2024 and $3.2 million for 2023. Net gains on the sale of
loans were $1.5 million for the year ended December 31, 2024 and $12,000 for 2023. Other noninterest income totaled $3.6 million and $3.9
million for the years ended December 31, 2024 and 2023, respectively.
Noninterest Expense
Noninterest expense includes salaries and employee benefits, occupancy and equipment expense and other types of expenses. Noninterest
expense totaled $77.1 million for the year ended December 31, 2024 and $79.7 million for the year ended December 31, 2023. Salaries and
benefits expense totaled $38.3 million for the year ended December 31, 2024 and $40.4 million for the year ended December 31, 2023.
Occupancy and equipment expense totaled $10.2 million for the year ended December 31, 2024 and $9.0 million for the year ended December
31, 2023. Other noninterest expense totaled $28.6 million for the year ended December 31, 2024 and $30.2 million for 2023.
The following table presents, for the years indicated, the major categories of other noninterest expense:
December 31, 2024
December 31, 2023
(in thousands)
Other noninterest expense:
Legal and professional fees
$
4,465
$ 5,709
Data processing
1,555
2,100
ATM fees
1,668
1,804
Marketing and public relations
1,240
1,927
Taxes - sales, capital and franchise
2,237
2,263
Operating supplies
336
778
Software expense and amortization
5,093
5,282
Travel and lodging
685
1,362
Telephone
424
382
Amortization of core deposits
696
696
Donations
267
595
Net costs from other real estate and repossessions
827
157
Regulatory assessment
4,688
3,136
Other
4,465
4,032
Total other expense
$
28,646
$ 30,223
Income Taxes
The amount of income tax expense is influenced by the amount of pre-tax income, the amount of tax-exempt income and the amount of other
non-deductible expenses and the statutory tax rate. The provision for income taxes for the years ended December 31, 2024 and 2023 was $3.6
million and $2.7 million, respectively. The provision for income taxes in 2024 increased as compared to 2023 due to the increase in income before
income taxes. First Guaranty's statutory tax rate was 21.0% for the years ended December 31, 2024 and 2023.
Impact of Inflation
Our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K have been prepared in accordance
with GAAP. These require the measurement of financial position and operating results in terms of historical dollars, without considering changes
in the relative value of money over time due to inflation or deflation.
Unlike many industrial companies, substantially all of our assets and liabilities are monetary in nature. As a result, interest rates have a more
significant impact on our performance than the effects of general levels of inflation. Interest rates may not necessarily move in the same direction
or in the same magnitude as the prices of goods and services. However, other operating expenses do reflect general levels of inflation.
The Federal Reserve increased interest rates during 2022 and 2023 to address rising inflation in the U.S. The impact of rising interest rates
associated with inflation impacted First Guaranty's net interest income and net interest margin along with the value of its financial assets.
46 First Guaranty Bancshares, Inc. Annual Report 2024
At or For the Years Ended December 31,
2024
2023
2022
2021
2020
(in thousands except for %)
Year End Balance Data Sheet:
Investment securities
$
602,719
$
404,123
$ 451,526
$
364,156
$
238,548
Federal funds sold
$
430
$
341
$
423
$
183
$
702
Loans, net of unearned income
$ 2,693,780
$2,748,708
$2,519,077
$ 2,159,359
$ 1,844,135
Allowance for credit losses
$
34,811
$
30,926
$
23,518
$
24,029
$
24,518
Total assets
$ 3,972,728
$ 3,552,772
$ 3,151,347
$ 2,878,120
$ 2,473,078
Total deposits
$ 3,476,260
$3,009,094
$2,723,792
$ 2,596,492
$ 2,166,318
Borrowings
$
201,923
$
275,396
$ 183,369
$
49,635
$
116,630
Shareholders' equity
$
255,049
$
249,631
$ 234,991
$
223,889
$
178,591
Common shareholders' equity
$
221,991
$
216,573
$ 201,933
$
190,831
$
178,591
Performance Ratios and Other Data:
Return on average assets
0.34 %
0.28%
0.97%
1.01%
0.87%
Return on average common equity
4.58%
3.36%
13.64%
14.06%
11.36%
Return on average tangible assets(1)
0.35%
0.30%
0.99%
1.04%
0.90%
Return on average tangible common equity
5.21%
3.98%
15.31%
15.98%
13.08%
Net interest margin
2.47%
2.69%
3.47%
3.44%
3.35%
Average loans to average deposits
86.96%
92.69%
85.94%
83.65%
81.25%
Efficiency ratio(2)
68.16%
83.62%
63.94%
63.63%
58.95%
Efficiency ratio (excluding amortization of intangibles and
securities transactions)(2)
67.54%
82.89%
63.30%
63.32%
68.44%
Full time equivalent employees (year end)
399
491
472
470
429
(Footnotes on page 49.)
Selected Financial Data
The following table presents consolidated selected financial data for First Guaranty. It does not purport to be complete and is qualified in its entirety
by more detailed financial information and the audited consolidated financial statements contained elsewhere in this annual report.
9 Decades of Commitment to Customer Service 47
At or For the Years Ended December 31,
2024
2023
2022
2021
2020
(in thousands except for % and share data)
Capital Ratios:
Average shareholders' equity to average assets
6.85%
7.31%
7.62%
7.65%
7.62%
Average tangible equity to average tangible assets(3)
6.44%
6.82%
7.08%
7.02%
6.86%
Common shareholders' equity to total assets
5.59%
6.10%
6.41%
6.63%
7.22%
Tangible Common equity to tangible assets(3)
5.21%
5.65%
5.89%
6.04%
6.51%
Income Data:
Interest income
$
221,706
$
183,009
$
136,576
$
111,917
$
100,684
Interest expense
$
133,268
$
98,304
$
36,534
$
22,299
$
26,017
Net interest income
$
88,438
$
84,705
$
100,042
$
89,618
$
74,667
Provision for credit losses
$
20,034
$
3,714
$
3,656
$
2,055
$
14,877
Noninterest income (excluding securities transactions)
$
24,739
$
10,577
$
11,026
$
10,046
$
8,989
Securities (losses) gains
$
-
$
-
$
(17)
$
714
$
14,791
Noninterest expense
$
77,137
$
79,672
$
71,005
$
63,868
$
58,033
Earnings before income taxes
$
16,006
$
11,896
$
36,390
$
34,455
$
25,537
Net income
$
12,448
$
9,219
$
28,884
$
27,297
$
20,318
Net income available to common shareholders
$
10,119
$
6,890
$
26,556
$
25,913
$
20,318
Per Common Share Data:
Net earnings
$
0.81
$
0.62
$
2.48
$
2.42
$
1.90
Cash dividends paid
$
0.41
$
0.64
$
0.64
$
0.60
$
0.58
Book value
$
17.75
$
17.36
$
18.84
$
17.81
$
16.66
Tangible book value(4)
$
16.48
$
16.03
$
17.23
$
16.13
$
14.92
Dividend payout ratio for Common and Preferred
59.90%
105.20%
31.81%
28.49%
30.68%
Weighted average number of shares outstanding
12,501,035
11,165,303
10,716,796
10,716,796
10,716,796
Number of shares outstanding
12,504,717
12,475,424
10,716,796
10,716,796
10,716,796
Asset Quality Ratios:
Non-performing assets to total assets
3.03%
1.17%
0.47%
0.70%
1.25%
Non-performing assets to total loans
4.47%
1.52%
0.59%
0.93%
1.68%
Non-performing loans to total loans
4.46%
1.47%
0.58%
0.83%
1.55%
Loan loss reserve to non-performing assets
28.92%
74.12%
158.68%
119.95%
79.33%
Net charge-offs to average loans
0.64%
0.17%
0.18%
0.13%
0.08%
Provision for credit losses to average loans
0.72%
0.14%
0.16%
0.10%
0.89%
Allowance for credit losses to total loans
1.29%
1.13%
0.93%
1.11%
1.33%
(Footnotes on next page.)
48 First Guaranty Bancshares, Inc. Annual Report 2024
(1) Tangible calculation eliminates goodwill and acquisition intangibles, principally core deposit intangibles, net of accumulated amortization, net of tax. See below
for our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption "Selected Historical
Consolidated Financial and Other Data— Non-GAAP Financial Measures."
(2) Efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income. We calculate both a GAAP and a non-
GAAP efficiency ratio. The GAAP-based efficiency ratio is noninterest expenses divided by net interest income plus noninterest income. See below for our
reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption "Selected Financial Data— Non-
GAAP Financial Measures.
(3) We calculate tangible common equity as total shareholders' equity less preferred stock, goodwill and acquisition intangibles, principally core deposit intangibles,
net of accumulated amortization, and we calculate tangible assets as total assets less goodwill and core deposit intangibles. Tangible common equity to tangible
assets is a non-GAAP financial measure, and, as we calculate tangible common equity to tangible assets, the most directly comparable GAAP financial measure
is total shareholders' equity to total assets. See below for our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial
measures under the caption "Selected Historical Consolidated Financial and Other Data— Non-GAAP Financial Measures."
(4) We calculate tangible book value per common share as total shareholders' equity less preferred stock, goodwill and acquisition intangibles, principally core
deposit intangibles, net of accumulated amortization at the end of the relevant period, divided by the outstanding number of shares of our common stock at
the end of the relevant period. Tangible book value per common share is a non-GAAP financial measure, and, as we calculate tangible book value per common
share, the most directly comparable GAAP financial measure is book value per common share. See below for our reconciliation of non-GAAP financial measures
to their most directly comparable GAAP financial measures under the caption "Selected Financial Data— Non-GAAP Financial Measures."
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.
At December 31,
2024
2023
2022
2021
2020
(in thousands except for share data and %)
Tangible Common Equity
Total shareholder's equity
$
255,049
$
249,631
$
234,991
$
223,889
$
178,591
Adjustments:
Preferred Stock
33,058
33,058
33,058
33,058
-
Goodwill
12,900
12,900
12,900
12,900
12,900
Acquisition intangibles
2,962
3,658
4,355
5,051
5,815
Other intangibles
100
100
-
-
-
Tangible common equity
$
206,029
$
199,915
$
184,678
$
172,880
$
159,876
Common shares outstanding
12,504,717
12,475,424
10,716,796
10,716,796
10,716,796
Book value per common share
$
17.75
$
17.36
$
18.84
$
17.81
$
16.66
Tangible book value per common share
$
16.48
$
16.03
$
17.23
$
16.13
$
14.92
Tangible Assets
Total Assets
$ 3,972,728
$ 3,552,772
$ 3,151,347
$ 2,878,120
$
2,473,078
Adjustments:
Goodwill
12,900
12,900
12,900
12,900
12,900
Acquisition intangibles
2,962
3,658
4,355
5,051
5,815
Other intangibles
100
100
-
-
-
Tangible Assets
$ 3,956,766
$ 3,536,114
$ 3,134,092
$ 2,860,169
$
2,454,363
Tangible common equity to tangible assets
5.21%
5.65%
5.89%
6.04%
6.51%
9 Decades of Commitment to Customer Service 49
Liquidity and Capital Resources
Liquidity
Liquidity refers to the ability or flexibility to manage future cash flows to meet the needs of depositors and borrowers and fund operations.
Maintaining appropriate levels of liquidity allows us to have sufficient funds available to meet customer demand for loans, withdrawal of deposit
balances and maturities of deposits and other liabilities. Liquid assets include cash and due from banks, interest-earning demand deposits with
banks, federal funds sold and available for sale investment securities.
First Guaranty's cash and cash equivalents totaled $564.2 million at December 31, 2024 compared to $286.5 million at December 31, 2023.
Loans maturing within one year or less at December 31, 2024 totaled $486.0 million compared to $357.7 million at December 31, 2023. At
December 31, 2024, time deposits maturing within one year or less totaled $804.1 million compared to $503.7 million at December 31, 2023.
Time deposits maturing after one year through three years totaled $489.6 million at December 31, 2024 compared to $214.0 million at December
31, 2023. Time deposits maturing after three years totaled $157.0 million at December 31, 2024 compared to $103.0 million at December
31, 2023. First Guaranty's held to maturity ("HTM") investment securities portfolio at December 31, 2024 was $321.6 million or 53.4% of the
investment portfolio compared to $320.6 million at December 31, 2023. First Guaranty's available for sale ("AFS") portfolio was $281.1 million, or
46.6% of the investment portfolio at December 31, 2024 compared to $83.5 million, or 20.7% at December 31, 2023. The majority of the AFS
portfolio was comprised of U.S. Treasuries, U.S. Government Agencies, collateralized mortgage obligations, mortgage-backed securities, municipal
bonds and investment grade corporate bonds. We believe these securities are readily marketable and enhance our liquidity.
We maintained a net borrowing capacity at the FHLB totaling $339.2 million and $259.6 million at December 31, 2024 and December 31, 2023,
respectively with $135.0 million and $205.0 million in FHLB advances outstanding at December 31, 2024 and December 31, 2023, respectively.
The advances outstanding at December 31, 2024 were comprised of two long term advances totaling $135.0 million. The change in borrowing
capacity with the Federal Home Loan Bank was due to changes in the value that First Guaranty receives on pledged collateral and due to First
Guaranty's usage of the line. First Guaranty has increasingly transitioned public funds deposits into reciprocal deposit programs for collateralization
as an alternative to FHLB letters of credit. At December 31, 2024, we had outstanding letters of credit from the FHLB in the amount of $455.7
million that were primarily used to collateralize public funds deposits. We also maintain federal funds lines of credit at various correspondent banks
with borrowing capacity of $93.0 million at December 31, 2024. We also have a discount window line with the Federal Reserve Bank that totaled
$250.4 million at December 31, 2024. Management believes there is sufficient liquidity to satisfy current operating needs.
Capital Resources
Our capital position is reflected in total shareholders' equity, subject to certain adjustments for regulatory purposes. Further, our capital base allows
us to take advantage of business opportunities while maintaining the level of resources we deem appropriate to address business risks inherent
in daily operations.
Total shareholders' equity increased to $255.0 million at December 31, 2024 from $249.6 million at December 31, 2023. The increase in
shareholders' equity was principally the result of an increase of $5.0 million in retained earnings, $0.3 million in surplus and a $0.1 million
decrease in accumulated other comprehensive loss. The $5.0 million increase in retained earnings was primarily due to net income of $12.4
million during the year ended December 31, 2024, partially offset by $5.1 million in cash dividends paid on shares of our common stock and
$2.3 million in cash dividends paid on shares of our preferred stock. The $0.3 million increase in surplus was due to common stock issued under
the Equity Bonus Plan during the first quarter of 2024. The decrease in accumulated other comprehensive loss was primarily attributed to the
decrease in unrealized losses on available for sale securities during the year ended December 31, 2024.
The efficiency ratio is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We
calculate the efficiency ratio by dividing noninterest expense by the sum of net interest income and noninterest income, excluding amortizations
of intangibles and securities transactions. The GAAP-based efficiency ratio is noninterest expenses divided by net interest income plus noninterest
income. Noninterest income in 2024 included the gain from the sale-leaseback transaction.
The following table reconciles, as of the dates set forth below, our efficiency ratio to the GAAP-based efficiency ratio:
For the Year Ended December 31,
2024
2023
2022
2021
2020
(in thousands except for share data and %)
GAAP-based efficiency ratio
68.16%
83.62%
63.94%
63.63%
58.95%
Noninterest expense
$
77,137
$
79,672
$
71,005
$
63,868
$
58,033
Amortization of intangibles
696
696
696
764
711
Noninterest expense, excluding amortization
76,441
78,976
70,309
63,104
57,322
Net interest income
88,438
84,705
100,042
89,618
74,667
Noninterest income
24,739
10,577
11,009
10,760
23,780
Adjustments:
Securities transactions
-
-
(17)
714
14,691
Noninterest income, excluding securities transactions
$
24,739
$
10,577
$
11,026
$
10,046
$
9,089
Efficiency ratio
67.54%
82.89%
63.30%
63.32%
68.44%
50 First Guaranty Bancshares, Inc. Annual Report 2024
Off-balance sheet commitments
We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers
and to reduce our own exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit and standby
and commercial letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount
recognized in our consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of the involvement in
particular classes of financial instruments.
The exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and
standby and commercial letters of credit is represented by the contractual notional amount of those instruments. The same credit policies are used
in making commitments and conditional obligations as we do for on-balance sheet instruments. Unless otherwise noted, collateral or other security
is not required to support financial instruments with credit risk.
The notional amounts of the financial instruments with off-balance sheet risk at December 31, 2024 and 2023 are as follows:
"Well Capitalized
Minimums"
At December 31, 2024
"Well Capitalized
Minimums"
At December 31, 2023
Tier 1 Leverage Ratio
Bank
5.00%
7.82%
5.00%
8.94%
Consolidated
5.00%
6.42%
N/A
N/A
Tier 1 Risk-based Capital Ratio
Bank
8.00%
11.00%
8.00%
10.31%
Consolidated
8.00%
9.04%
N/A
N/A
Total Risk-based Capital Ratio
Bank
10.00%
12.11%
10.00%
11.20%
Consolidated
10.00%
11.73%
N/A
N/A
Common Equity Tier One Capital
Bank
6.50%
11.00%
6.50%
10.31%
Consolidated
6.50%
7.87%
N/A
N/A
Contract Amount
December 31, 2024
December 31, 2023
(in thousands)
Commitments to Extend Credit
$
134,178
$ 304,218
Unfunded Commitments under lines of credit
$
186,006
$ 214,546
Commercial and Standby letters of credit
$
13,576
$ 13,971
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since commitments may
expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Each customer's
creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based
on our credit evaluation of the counterpart. Collateral requirements vary but may include accounts receivable, inventory, property, plant and
equipment, residential real estate and commercial properties.
Unfunded commitments under lines of credit are contractually obligated by us as long as the borrower is in compliance with the terms of the loan
relationship. Unfunded lines of credit are typically operating lines of credit that adjust on a regular basis as a customer requires funding. There
Capital Management
We manage our capital to comply with our internal planning targets and regulatory capital standards administered by the Federal Reserve and
the FDIC. We review capital levels on a monthly basis. We evaluate a number of capital ratios, including Tier 1 capital to total adjusted assets (the
leverage ratio) and Tier 1 capital to risk-weighted assets. At December 31, 2024, First Guaranty and the Bank was classified as well-capitalized.
First Guaranty's capital conservation buffer was 3.04% at December 31, 2024. The Bank's capital conservation buffer was 4.11% at December
31, 2024.
The following table presents First Guaranty and the Bank's capital ratios as of the indicated dates.
9 Decades of Commitment to Customer Service 51
may be seasonal variations to the usage of these lines. At December 31, 2024, the largest concentrations of unfunded commitments were lines of
credit associated with construction and land development loans and commercial and industrial loans.
Commercial and standby letters of credit are conditional commitments to guarantee the performance of a customer to a third party. These
guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar
transactions. The majority of these guarantees are short-term (one year or less); however, some guarantees extend for up to three years. The credit
risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. Collateral requirements are
the same as on-balance sheet instruments and commitments to extend credit.
There were no losses incurred on any commitments during the years ended December 31, 2024 and 2023. The reserve for credit losses on
unfunded commitments was $1.2 million at December 31, 2024.
Item 7A – Quantitative and Qualitative Disclosures about Market Risk
Asset/Liability Management and Market Risk
Asset/Liability Management
Our asset/liability management process consists of quantifying, analyzing and controlling interest rate risk to maintain reasonably stable net interest
income levels under various interest rate environments. The principal objective of asset/liability management is to maximize net interest income
while operating within acceptable limits established for interest rate risk and to maintain adequate levels of liquidity.
The majority of our assets and liabilities are monetary in nature. Consequently, one of our most significant forms of market risk is interest rate
risk, which is inherent in our lending and deposit-taking activities. Our assets, consisting primarily of loans secured by real estate and fixed rate
securities in our investment portfolio, have longer maturities than our liabilities, consisting primarily of deposits. As a result, a principal part of
our business strategy is to manage interest rate risk and reduce the exposure of our net interest income to changes in market interest rates. The
board of directors of First Guaranty Bank has established two committees, the management asset liability committee and the board investment
committee, to oversee the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate given our
business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines
approved by the board of directors. The management asset liability committee is comprised of senior officers of the Bank and meets as needed
to review our asset liability policies and interest rate risk position. The board ALCO investment committee is comprised of certain members of
the board of directors of the Bank and meets monthly. The management asset liability committee provides a monthly report to the board ALCO
investment committee.
The need for interest sensitivity gap management is most critical in times of rapid changes in overall interest rates. First Guaranty has generally
been liability sensitive. We modified our business plan in 2024 to reduce the liability sensitive nature of our balance sheet. We are working to
limit our future exposure to interest rate fluctuations by creating a more balanced mix of rate sensitive assets and liabilities on a one-year time
horizon and greater than one-year time horizon. We purchased amortizing mortgage backed securities in 2024. We also purchased U.S. Treasury
securities with a maturity of one year or less in 2024. Because of the significant impact on net interest margin from mismatches in repricing
opportunities, we monitor the asset-liability mix periodically depending upon the management asset liability committee's assessment of current
business conditions and the interest rate outlook. These strategies include, but are not limited to, frequent internal modeling of asset and liability
values and behavior due to changes in interest rates. We monitor cash flow forecasts closely and evaluate the impact of both prepayments and
extension risk.
52 First Guaranty Bancshares, Inc. Annual Report 2024
December 31, 2024
Interest Sensitivity Within
3 Months
Or Less
Over 3
Months thru
12 Months
Total One Year
Over One Year
Total
(dollars in thousands, except for percentages)
Earning Assets:
Loans (including loans held for sale)
$ 917,176
$ 387,048
$
1,304,224
$
1,389,556
$
2,693,780
Securities (including FHLB stock)
109,213
54,391
163,604
448,821
612,425
Federal Funds Sold
430
—
430
-
430
Other earning assets
545,081
—
545,081
-
545,081
Total earning assets
$ 1,571,900
$ 441,439
$
2,013,339
$
1,838,377
$
3,851,716
Source of Funds:
Interest-bearing accounts:
Demand deposits
$ 1,387,068
$
-
$
1,387,068
$
-
$
1,387,068
Savings deposits
234,444
-
234,444
-
234,444
Time deposits
208,429
595,703
804,132
646,560
1,450,692
Short-term borrowings
-
-
-
6,916
6,916
Senior long-term debt
15,169
-
15,169
135,000
150,169
Junior subordinated debt
44,745
-
44,745
-
44,745
Noninterest-bearing, net
-
-
-
577,682
577,682
Total source of funds
$ 1,889,855
$ 595,703
$
2,485,558
$
1,366,158
$
3,851,716
Period gap
$
(317,955)
$
(154,264)
$
(472,219)
$
472,219
Cumulative gap
$
(317,955)
$
(472,219)
$
(472,219)
$
-
Cumulative gap as a percent of earning assets
(8.3)%
(12.3)%
(12.3)%
The following interest sensitivity analysis is one measurement of interest rate risk. This analysis, which we prepare quarterly, reflects the contractual
maturity characteristics of assets and liabilities over various time periods. This analysis does not factor in prepayments or interest rate floors on
loans which may significantly change the report. This table includes nonaccrual loans in their respective maturity periods. The gap indicates
whether more assets or liabilities are subject to repricing over a given time period. The interest sensitivity analysis at December 31, 2024 illustrated
below reflects a liability-sensitive position with a negative cumulative gap on a one-year basis.
9 Decades of Commitment to Customer Service 53
Griffith, DeLaney, Hillman & Lett
CERTIFIED PUBLIC ACCOUNTANTS
PAUL DAVID GRIFFITH, CPA
JOHN MICHAEL DELANEY, CPA
TRACY NEAL HILLMAN, CPA
JONATHAN E. LETT, CPA
BEVERLY SUE PEMBERTON, CPA
KIMBERLY PAYNE CURTIS, CPA
CHRIS TILSLEY, CPA
429 - 13th Street, P.O. Box 1360
Ashland, Kentucky 41105-1360
(606) 329-1656
(800) 377-6270
FAX: (606) 324-4739
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
First Guaranty Bancshares, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of First Guaranty Bancshares, Inc. and Subsidiary (First Guaranty) as of December
31, 2024 and 2023, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows
for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively referred to as the financial statements).
We also have audited First Guaranty’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal
Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of First Guaranty as of
December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December
31, 2024, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, First Guaranty
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in
Internal Control—Integrated Framework (2013) issued by COSO.
Basis for Opinion
First Guaranty’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and
for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on
Internal Control over Financial Reporting. Our responsibility is to express an opinion on First Guaranty’s financial statements and an opinion on
First Guaranty’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to First Guaranty in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether
effective internal control over financial reporting was maintained in all material respects.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements,
whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also
included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable
basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A
company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.
54 First Guaranty Bancshares, Inc. Annual Report 2024
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements
and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any
way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing
separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Allowance for Credit Losses
As described in Notes 1, 5 and 6 to the financial statements, at December 31, 2024, First Guaranty’s total loans were $2.7 billion and the associated
allowance for credit losses (ACL) balance was $34.8 million. The allowance for credit losses is management’s evaluation of expected credit losses
over the life of the loans in the portfolio in accordance with Accounting Standards Codification ASC 326: Financial Instruments – Credit Losses.
First Guaranty uses the discounted cash flow method to estimate expected losses for all of First Guaranty’s loan segments that exhibit similar
risk characteristics and loans that do not share risk characteristics are evaluated on an individual basis. For each loan segment, First Guaranty
generates cash flow projections at the instrument level, adjusting payment expectations for estimated prepayment speed, curtailments, time to
recovery, probability of default and loss given default. Additional qualitative adjustments are applied for risk factors that are not considered within
the modeling process but are relevant in assessing the expected credit losses within the loan segments. Consideration is given to the following
factors: changes in lending policies, procedures and strategies; changes in nature and volume of the portfolio; staff experience; changes in volume
and trends in classified loans, delinquencies and nonaccruals; concentration risk; trends in underlying collateral values; external factors such as
competition, legal and regulatory environment; changes in the quality of the loan review system; and economic conditions.
Auditing management’s estimate of the allowances for loan credit losses, and more specifically the qualitative factor adjustments applied in the
ACL, is a critical audit matter. The principal consideration for our determination of the critical audit matter is a high degree of subjectivity of
the assumptions utilized in calculating the qualitative reserve component within the model. Furthermore, certain inputs and assumptions lack
observable data and, therefore, applying audit procedures requires a higher degree of auditor judgement and subjectivity due to the nature and
extent of audit evidence and effort required to address this matter.
The primary procedures we performed to address the critical audit matter included:
•
Obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the reliability and accuracy of
data used to calculate and estimate the various components of the ACL including:
◦
Loan data completeness and accuracy,
◦
Grouping of loans by segment,
◦
Model inputs utilized,
◦
Approval of model assumptions selected, and
◦
Qualitative factors have been appropriately identified, are adequately supported, and accurately applied.
•
Evaluated and tested the data and inputs utilized within the ACL calculation for completeness and accuracy including mathematical
accuracy of the calculation.
•
Evaluated the qualitative factors for appropriate identification and application including reasonableness of the basis for adjustment.
•
Analyzed the total qualitative factor adjustment applied to each loan segment, in comparison to changes in the Company’s quantitatively
driven expected credit losses and loan segments and evaluated the appropriateness of the total qualitative factor adjustments applied in
the overall allowance.
Goodwill
As described in Note 8 to the financial statements, First Guaranty’s goodwill totaled $12.9 million as of December 31, 2024. Goodwill is tested
annually for impairment, or more frequently if events or changes in circumstances indicate that the asset might be impaired. First Guaranty uses
significant judgment and assumptions in estimating the fair value of these assets, including comparisons to peers, projections of future cash
flows, discount rates, and growth rates. Given the complexity and subjectivity involved in these estimates, auditing the impairment assessment of
goodwill and intangible assets was challenging and required a high degree of auditor judgment.
9 Decades of Commitment to Customer Service 55
Our audit procedures related to First Guaranty’s impairment assessment of goodwill and intangible assets included the following:
•
We reviewed management’s use of peer data by assessing the validity and adequacy of the data.
•
We evaluated the reasonableness of management’s forecasts of future cash flows by comparing them to historical performance,
industry trends, and economic conditions.
•
We assessed the appropriateness of the discount rates and growth rates used by management by comparing them to independent
market data and industry benchmarks.
•
We tested the completeness and accuracy of the underlying data used in the impairment analysis.
•
We reviewed the sensitivity analyses performed by management to evaluate the impact of changes in key assumptions on the
impairment conclusions.
•
We evaluated the adequacy of the First Guaranty’s disclosures related to goodwill in the financial statements.
Based on these procedures, we found management’s estimates and assumptions to be reasonable and supported by the available evidence.
We have served as First Guaranty's auditor since 2022.
Ashland, Kentucky
March 17, 2025
56 First Guaranty Bancshares, Inc. Annual Report 2024
FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY - CONSOLIDATED BALANCE SHEETS
December 31, 2024
December 31, 2023
(in thousands, except share data)
Assets
Cash and cash equivalents:
Cash and due from banks
$
563,778
$ 286,114
Federal funds sold
430
341
Cash and cash equivalents
564,208
286,455
Interest-earning time deposits with banks
250
-
Investment securities:
Available for sale, at fair value
281,097
83,485
Held to maturity, at cost and net of allowance for credit losses of $150 and $80
(estimated fair value of $251,458 and $253,584, respectively)
321,622
320,638
Investment securities
602,719
404,123
Federal Home Loan Bank stock, at cost
9,706
13,390
Loans held for sale
-
-
Loans, net of unearned income
2,693,780
2,748,708
Less: allowance for credit losses
34,811
30,926
Net loans
2,658,969
2,717,782
Premises and equipment, net
67,789
69,792
Goodwill
12,900
12,900
Intangible assets, net
3,474
4,298
Other real estate, net
319
1,250
Accrued interest receivable
14,850
15,713
Other assets
37,544
27,069
Total Assets
$
3,972,728
$
3,552,772
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing demand
$
404,056
$ 442,755
Interest-bearing demand
1,387,068
1,526,628
Savings
234,444
218,986
Time
1,450,692
820,725
Total deposits
3,476,260
3,009,094
Short-term advances from Federal Home Loan Bank
-
50,000
Short-term borrowings
-
10,000
Repurchase agreements
7,009
6,297
Accrued interest payable
20,437
11,807
Long-term advances from Federal Home Loan Bank
135,000
155,000
Senior long-term debt
15,169
39,099
Junior subordinated debentures
44,745
15,000
Other liabilities
19,059
6,844
Total Liabilities
3,717,679
3,303,141
Shareholders' Equity
Preferred stock, Series A - $1,000 par value - 100,000 shares authorized
Non-cumulative perpetual; 34,500 issued and outstanding, respectively
$
33,058
$
33,058
Common stock, $1 par value - 100,600,000 shares authorized; 12,504,717 and
12,475,424 shares issued and outstanding
12,505
12,475
Surplus
149,389
149,085
Retained earnings
72,965
67,972
Accumulated other comprehensive (loss) income
(12,868)
(12,959)
Total Shareholders' Equity
255,049
249,631
Total Liabilities and Shareholders' Equity
$
3,972,728
$
3,552,772
See Notes to the Consolidated Financial Statements.
9 Decades of Commitment to Customer Service 57
FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31,
2024
2023
(in thousands, except share data)
Interest Income:
Loans (including fees)
$
190,382
$ 167,140
Deposits with other banks
17,399
6,268
Securities (including FHLB stock)
13,925
9,601
Federal funds sold
-
-
Total Interest Income
221,706
183,009
Interest Expense:
Demand deposits
65,331
60,243
Savings deposits
5,173
3,554
Time deposits
49,166
23,967
Borrowings
13,598
10,540
Total Interest Expense
133,268
98,304
Net Interest Income
88,438
84,705
Less: Provision for credit losses
20,034
3,714
Net Interest Income after Provision for Credit Losses
68,404
80,991
Noninterest Income:
Service charges, commissions and fees
3,189
3,401
ATM and debit card fees
3,132
3,242
Net gains on securities
-
-
Net gains on sale of loans
1,481
12
Net gains on sale of assets
13,306
23
Other
3,631
3,899
Total Noninterest Income
24,739
10,577
Noninterest Expense:
Salaries and employee benefits
38,304
40,422
Occupancy and equipment expense
10,187
9,027
Other
28,646
30,223
Total Noninterest Expense
77,137
79,672
Income Before Income Taxes
16,006
11,896
Less: Provision for income taxes
3,558
2,677
Net Income
12,448
9,219
Less: Preferred stock dividends
2,329
2,329
Net Income Available to Common Shareholders
$
10,119
$
6,890
Per Common Share:
Earnings
$
0.81
$
0.62
Cash dividends paid
$
0.41
$
0.64
Weighted Average Common Shares Outstanding
12,501,035
11,165,303
See Notes to Consolidated Financial Statements
58 First Guaranty Bancshares, Inc. Annual Report 2024
FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Years Ended December 31,
2024
2023
(in thousands)
Net Income
$
12,448
$
9,219
Other comprehensive income:
Unrealized (losses) gains on securities:
Unrealized holding gains arising during the period
115
2,872
Reclassification adjustments for (gains) included in net income
-
-
Change in unrealized gains on securities
115
2,872
Tax impact
(24)
(603)
Other comprehensive income
91
2,269
Comprehensive Income
$
12,539
$ 11,488
See Notes to Consolidated Financial Statements
9 Decades of Commitment to Customer Service 59
FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Preferred
Stock
$1,000 Par
Common
Stock
$1 Par
Surplus
Retained
Earnings
Accumulated
Other
Comprehensive
Income/(Loss)
Total
(in thousands, except share data)
Balance December 31, 2022
$
33,058
$ 10,717
$130,093
$
76,351
$
(15,228)
$ 234,991
Net income
-
-
-
3,468
-
3,468
Cumulative effect of adoption of ASC Topic 326, net of tax
-
-
-
(7,900)
-
(7,900)
Other comprehensive income (loss)
-
-
-
414
414
Preferred stock dividends
-
-
-
(582)
-
(582)
Cash dividends on common stock ($0.16 per share)
-
-
-
(1,715)
-
(1,715)
Balance March 31, 2023
$
33,058
$ 10,717 $ 130,093
$
69,622
$
(14,814)
$ 228,676
Net income
-
-
-
2,676
-
2,676
Common stock issued in private placement, 714,287
shares
-
714
9,286
-
-
10,000
Other comprehensive income (loss)
-
-
-
-
(84)
(84)
Preferred stock dividends
-
-
-
(582)
-
(582)
Cash dividends on common stock ($0.16 per share)
-
-
-
(1,829)
-
(1,829)
Balance June 30, 2023
$
33,058
$ 11,431 $ 139,379
$
69,887
$
(14,898)
$ 238,857
Net income
-
-
-
1,772
-
1,772
Other comprehensive income (loss)
-
-
-
-
605
605
Preferred stock dividends
-
-
-
(582)
-
(582)
Cash dividends on common stock ($0.16 per share)
-
-
-
(1,830)
-
(1,830)
Balance September 30, 2023
$
33,058
$ 11,431 $ 139,379
$
69,247
$
(14,293)
$ 238,822
Net income
-
-
-
1,303
-
1,303
Common stock issued in private placement,
1,000,000 shares
-
1,000
9,000
-
-
10,000
Common stock issued under Equity Bonus Plan,
44,341 shares
-
44
706
-
-
750
Other comprehensive income
-
-
-
-
1,334
1,334
Preferred stock dividends
-
-
-
(582)
-
(582)
Cash dividends on common stock ($0.16 per share)
-
-
-
(1,996)
-
(1,996)
Balance December 31, 2023
$
33,058
$ 12,475 $ 149,085
$
67,972
$
(12,959) $ 249,631
60 First Guaranty Bancshares, Inc. Annual Report 2024
Preferred
Stock
$1,000 Par
Common
Stock
$1 Par
Surplus
Retained
Earnings
Accumulated
Other
Comprehensive
Income/(Loss)
Total
(in thousands, except share data)
Balance December 31, 2023
$
33,058
$
12,475 $
149,085
$
67,972
$ (12,959) $
249,631
Net income
-
-
-
2,310
-
2,310
Common stock issued under Equity Bonus Plan,
29,293 shares
-
30
304
-
-
334
Other comprehensive income
-
-
-
-
628
628
Preferred stock dividends
-
-
-
(582)
-
(582)
Cash dividends on common stock ($0.16 per share)
-
-
-
(2,001)
-
(2,001)
Balance March 31, 2024
$ 33,058
$
12,505 $
149,389
$
67,699
$ (12,331) $
250,320
Net income
-
-
-
7,201
-
7,201
Other comprehensive income (loss)
-
-
-
-
206
206
Preferred stock dividends
-
-
-
(582)
-
(582)
Cash dividends on common stock ($0.16 per share)
-
-
-
(2,001)
-
(2,001)
Balance June 30, 2024
$
33,058
$
12,505 $
149,389
$
72,317
$ (12,125) $
255,144
Net income
-
-
-
1,927
-
1,927
Other comprehensive income
-
-
-
-
907
907
Preferred stock dividends
-
-
-
(582)
-
(582)
Cash dividends on common stock ($0.08 per share)
-
-
-
(1,000)
-
(1,000)
Balance September 30, 2024
$
33,058
$
12,505 $
149,389
$
72,662
$ (11,218) $
256,396
Net income
-
-
-
1,010
-
1,010
Other comprehensive income
-
-
-
-
(1,650)
(1,650)
Preferred stock dividends
-
-
-
(582)
-
(582)
Cash dividends on common stock ($0.01 per share)
-
-
-
(125)
-
(125)
Balance December 31, 2024
$
33,058
$
12,505 $
149,389
$
72,965
$ (12,868) $
255,049
See Notes to Consolidated Financial Statements
9 Decades of Commitment to Customer Service 61
FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31,
2024
2023
(in thousands)
Cash Flows From Operating Activities:
Net income
$
12,448
$ 9,219
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses
20,034
3,714
Depreciation and amortization
4,432
4,026
Amortization/Accretion of investments
(2,556)
987
(Gain) loss on sale/call of securities
-
-
Gain on sale of assets
(14,535)
(35 )
Repossessed asset writedowns, gains and losses on dispositions
397
150
FHLB stock dividends
(775)
(358 )
Change in other assets and liabilities, net
14,284
4,011
Net Cash Provided by Operating Activities
33,729
21,714
Cash Flows From Investing Activities:
Increase in interest bearing deposits
(250)
Proceeds from maturities, calls and sales of AFS securities
169,497
51,406
Funds invested in AFS securities
(365,491)
(2,626 )
Proceeds from maturities and calls of HTM securities
-
289
Proceeds from sale/redemption of Federal Home Loan Bank stock
8,724
2,425
Funds invested in Federal Home Loan Bank stock
(4,265)
(8,929 )
Funds invested in intangibles
-
(100 )
Net decrease (increase) in loans
36,826
(234,123 )
Purchases of premises and equipment
(3,044)
(14,855 )
Proceeds from sales of premises and equipment
14,981
324
Proceeds from sales of other real estate owned
953
101
Net Cash Used In Investing Activities
(142,069)
(206,088 )
Cash Flows From Financing Activities:
Net increase in deposits
467,166
285,302
Net decrease in federal funds purchased and short-term borrowings
(59,288)
(80,145 )
Proceeds of long-term borrowings, net of costs
29,700
195,097
Repayment of long-term borrowings
(44,030)
(22,946 )
Common stock issued in private placement
-
20,000
Dividends paid on preferred stock
(2,328)
(2,328 )
Dividends paid common stock
(5,127)
(7,370 )
Net Cash Provided By Financing Activities
386,093
387,610
Net Increase in Cash and Cash Equivalents
277,753
203,236
Cash and Cash Equivalents at the Beginning of the Period
286,455
83,219
Cash and Cash Equivalents at the End of the Period
$
564,208
$ 286,455
Noncash Activities:
Acquisition of real estate in settlement of loans
$
423
$ 1,388
Common stock issued for stock grants
334
$ 750
Cash Paid During the Period:
Interest on deposits and borrowed funds
$
124,638
$ 90,786
Federal income taxes
-
$ 3,100
State income taxes
$
-
$ 330
See Notes to the Consolidated Financial Statements.
62 First Guaranty Bancshares, Inc. Annual Report 2024
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Business and Summary of Significant Accounting Policies
Business
First Guaranty Bancshares, Inc. ("First Guaranty") is a Louisiana corporation and a financial holding company headquartered in Hammond,
LA. First Guaranty owns all of the outstanding shares of common stock of First Guaranty Bank. First Guaranty Bank (the "Bank") is a Louisiana-
chartered commercial bank that offers a wide range of financial services and focuses on building client relationships and providing exceptional
customer service. These services include consumer and commercial lending, mortgage loan origination, the issuance of credit cards and retail
banking services. The Bank also maintains an investment portfolio comprised of government, government agency, corporate, and municipal
securities. The Bank has thirty-five banking facilities and fifty-four automated teller machines (ATMs) in Southeast, Southwest, Central and North
Louisiana, North Central Texas, Kentucky and West Virginia.
Summary of significant accounting policies
The accounting and reporting policies of First Guaranty conform to generally accepted accounting principles and to predominant accounting
practices within the banking industry. The more significant accounting and reporting policies are as follows:
Consolidation
The consolidated financial statements include the accounts of First Guaranty Bancshares, Inc., and its wholly owned subsidiary, First Guaranty
Bank. All significant intercompany balances and transactions have been eliminated in consolidation.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires Management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenue and expense during the reporting periods. Actual results could differ from those estimates.
Material estimates that are particularly susceptible to significant change in the near-term relate to the determination of the allowance for credit
losses, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, and the valuation of investment securities.
In connection with the determination of the allowance for credit losses and real estate owned, First Guaranty obtains independent appraisals for
significant properties.
Cash and cash equivalents
For purposes of reporting cash flows, cash and cash equivalents are defined as cash, due from banks, interest-bearing demand deposits with
banks and federal funds sold with maturities of three months or less.
Securities
First Guaranty reviews its financial position, liquidity and future plans in evaluating the criteria for classifying investment securities. Debt securities
that Management has the ability and intent to hold to maturity are classified as held to maturity and carried at cost, adjusted for amortization of
premiums and accretion of discounts using methods approximating the interest method. Securities available for sale are stated at fair value. The
unrealized difference, if any, between amortized cost and fair value of these AFS securities is excluded from income and is reported, net of deferred
taxes, in accumulated other comprehensive income as a part of shareholders' equity. Details of other comprehensive income are reported in the
consolidated statements of comprehensive income. Realized gains and losses on securities are computed based on the specific identification
method and are reported as a separate component of other income. Amortization of premiums and discounts is included in interest income.
Discounts and premiums related to debt securities are amortized using the effective interest rate method.
On January 1, 2023 the Bank adopted ASC 326, which requires expected credit related losses on available for sale debt securities to be recorded
through an allowance for credit losses, while non-credit related losses or declines in fair value continue to be recognized through other comprehensive
income. Under the new guidance, First Guaranty is also required to evaluate held to maturity debt securities for expected credit losses.
Management evaluates securities for impairment at least on a quarterly basis, and more frequently when economic or market conditions warrant
such an evaluation. In estimating losses, management considers the extent that fair value has been less than cost and the financial condition
and near term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to
sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to
sell is met, the entire difference between amortized cost and fair value is recognized as impairment through an allowance for credit losses. For
debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) impairment
related to credit loss, which must be recognized in the income statement and 2) impairment related to other factors, which is recognized in other
comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the
amortized cost basis but cannot be more than the difference between amortized cost and the fair value of the security.
Loans held for sale
Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value in the aggregate.
Net unrealized losses, if any, are recognized through a valuation allowance by charges to income. Loans held for sale have primarily been fixed
rate single-family residential mortgage loans under contract to be sold in the secondary market. In most cases, loans in this category are sold
9 Decades of Commitment to Customer Service 63
within thirty days. Buyers generally have recourse to return a purchased loan under limited circumstances. Recourse conditions may include early
payment default, breach of representations or warranties and documentation deficiencies. Mortgage loans held for sale are generally sold with the
mortgage servicing rights released. Gains or losses on sales of mortgage loans are recognized based on the differences between the selling price
and the carrying value of the related mortgage loans sold.
Loans
Loans are stated at the principal amounts outstanding, net of unearned income and deferred loan fees. In addition to loans issued in the
normal course of business, overdrafts on customer deposit accounts are considered to be loans and reclassified as such. Interest income on all
classifications of loans is calculated using the simple interest method on daily balances of the principal amount outstanding.
Accrual of interest is discontinued on a loan when Management believes, after considering economic and business conditions and collection
efforts, the borrower's financial condition is such that reasonable doubt exists as to the full and timely collection of principal and interest. This
evaluation is made for all loans that are 90 days or more contractually past due. When a loan is placed in nonaccrual status, all interest previously
accrued but not collected is reversed against current period interest income. Income on such loans is then recognized only to the extent that cash
is received and where the future collection of interest and principal is probable. Loans are returned to accrual status when, in the judgment of
Management, all principal and interest amounts contractually due are reasonably assured to be collected within a reasonable time frame and when
the borrower has demonstrated payment performance of cash or cash equivalents; generally for a period of 6 months. All loans, except mortgage
loans, are considered past due if they are past due 30 days. Mortgage loans are considered past due when two consecutive payments have been
missed. Loans that are past due 90-120 days and deemed uncollectible are charged-off. The loan charge off is a reduction of the allowance for
credit losses.
Credit Quality
First Guaranty's credit quality indicators are pass, special mention, substandard, and doubtful.
Loans included in the pass category are performing loans with satisfactory debt coverage ratios, collateral, payment history, and documentation
requirements.
Special mention loans have potential weaknesses that deserve close attention. If left uncorrected, these potential weaknesses may result in
deterioration of the repayment prospects. Borrowers may be experiencing adverse operating trends (declining revenues or margins) or an ill
proportioned balance sheet (e.g., increasing inventory without an increase in sales, high leverage, tight liquidity). Adverse economic or market
conditions, such as interest rate increases or the entry of a new competitor, may also support a special mention rating. Nonfinancial reasons
include management problems, pending litigation, an ineffective loan agreement or other material structural weakness, and any other significant
deviation from prudent lending practices.
A substandard loan is inadequately protected by the paying capacity of the obligor or of the collateral pledged, if any. Loans classified as
substandard have a well-defined weakness. They are characterized by the distinct possibility that First Guaranty will sustain some loss if the
deficiencies are not corrected. These loans require more intensive supervision. Substandard loans are generally characterized by current or
expected unprofitable operations, inadequate debt service coverage, inadequate liquidity, or marginal capitalization. Repayment may depend on
collateral or other credit risk mitigates. For some substandard loans, the likelihood of full collection of interest and principal may be in doubt and
interest is no longer accrued. Consumer loans that are 90 days or more past due or that are nonaccrual are considered substandard.
Doubtful loans have the weaknesses of substandard loans with the additional characteristic that the weaknesses make collection or liquidation in
full questionable and there is a high probability of loss based on currently existing facts, conditions and values.
Loan fees and costs
Nonrefundable loan origination and commitment fees and direct costs associated with originating loans are deferred and recognized over the lives
of the related loans as an adjustment to the loans' yield using the level yield method.
Allowance for credit losses
The allowance for credit losses is established through a provision for credit losses charged to expense. Loans are charged against the allowance for
credit losses when management believes that the collectability of the principal is unlikely. The allowance is based on management’s evaluation of
expected credit losses over the life of the loans in the portfolio, in accordance with ASC 326. The loan portfolio is divided into segments to evaluate
expected losses. Loans that do not share risk characteristics with a segment are evaluated individually. Management estimates the allowance
balance using available information such as past events, current conditions and reasonable forecasts. Adjustments to historical information are
made using qualitative and qualitative factors developed by management.
The following are general credit risk factors that affect our loan portfolio segments. These factors do not encompass all risks associated with
each loan category. Construction and land development loans have risks associated with interim construction prior to permanent financing and
repayment risks due to the future sale of developed property. Farmland and agricultural loans have risks such as weather, government agricultural
policies, fuel and fertilizer costs, and market price volatility. One- to four-family residential, multifamily, and consumer credits are strongly influenced
by employment levels, consumer debt loads and the general economy. Non-farm non-residential loans include both owner-occupied real estate
and non-owner occupied real estate. Common risks associated with these properties is the ability to maintain tenant leases and keep lease income
at a level able to service required debt and operating expenses. Commercial and industrial loans generally have non-real estate secured collateral
which requires closer monitoring than real estate collateral.
64 First Guaranty Bancshares, Inc. Annual Report 2024
The allowance consists of specific, general, and unallocated components. The specific component relates to loans that are classified as doubtful,
substandard, and individually evaluated for impairment. For such loans that are also classified as individually evaluated for impairment, an
allowance is established when the discounted cash flows (or collateral value or observable market price) of the loan is lower than the carrying value
of that loan. The general component covers non-classified loans and special mention loans and is based on historical loss experience adjusted
for qualitative factors. Qualitative factors include analysis of levels and trends in delinquencies, nonaccrual loans, charge-offs and recoveries, loan
risk ratings, trends in volume and terms of loans, changes in lending policy, credit concentrations, portfolio stress test results, national and local
economic trends, industry conditions, and other relevant factors. An unallocated component is maintained to cover uncertainties that could affect
the estimate of probable losses.
The allowance for credit losses on unfunded commitments represents expected credit losses over the contractual period for which First Guaranty
is exposed to credit risk from a contractual obligation to extend credit. No allowance is recorded if there is an unconditional right to cancel the
obligation. The allowance is reported as a component of Other Liabilities on the Consolidated Balance Sheets. Adjustments to the allowance for
unfunded commitments are included in the provision for credit losses on the Consolidated Statements of Income.
Goodwill and intangible assets
Goodwill and intangible assets deemed to have indefinite lives are subject to annual impairment tests. Goodwill represents the excess of the
purchase price over the fair value of the net identifiable assets acquired in an acquisition. First Guaranty's goodwill is tested for impairment on an
annual basis, or more often if events or circumstances indicate that there may be impairment in accordance with ASC Topic 350.
Identifiable intangible assets are acquired assets that lack physical substance but can be distinguished from goodwill because of contractual or
legal rights or because the assets are capable of being sold or exchanged either on their own or in combination with the related contract, asset or
liability. First Guaranty's intangible assets primarily relate to core deposits and loan servicing assets related to the SBA portfolio. These core deposit
intangibles are amortized on a straight-line basis over terms ranging from seven to fifteen years. Management periodically evaluates whether events
or circumstances have occurred that impair this deposit intangible.
Premises and equipment
Premises and equipment are stated at cost, less accumulated depreciation. Depreciation is computed for financial reporting purposes using the
straight-line method over the estimated useful lives of the respective assets as follows:
Buildings and improvements 10-40 years
Equipment, fixtures and automobiles 3-10 years
Expenditures for renewals and betterments are capitalized and depreciated over their estimated useful lives. Repairs, maintenance and minor
improvements are charged to operating expense as incurred. Gains or losses on disposition, if any, are recorded as a separate line item in
noninterest income on the Statements of Income.
Other real estate
Other real estate includes properties acquired through foreclosure or acceptance of deeds in lieu of foreclosure. These properties are recorded
at the lower of the recorded investment in the property or its fair value less the estimated cost of disposition. Any valuation adjustments required
prior to foreclosure are charged to the allowance for credit losses. Subsequent to foreclosure, losses on the periodic revaluation of the property are
charged to current period earnings as other real estate expense or to the allowance for other real estate. Costs of operating and maintaining the
properties are charged to other real estate expense as incurred. Any subsequent gains or losses on dispositions are credited or charged to income
in the period of disposition.
Off-balance sheet financial instruments
In the ordinary course of business, First Guaranty has entered into commitments to extend credit, including commitments under credit card
arrangements, commitments to fund commercial real estate, construction and land development loans secured by real estate, and performance
standby letters of credit. Such financial instruments are recorded when they are funded.
Income taxes
First Guaranty and its subsidiary file a consolidated federal income tax return on a calendar year basis. In lieu of Louisiana state income tax, the
Bank is subject to the Louisiana bank shares tax, which is included in noninterest expense in First Guaranty's consolidated financial statements.
With few exceptions, First Guaranty is no longer subject to U.S. federal, state or local income tax examinations for years before 2021. Deferred tax
assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts
of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which the deferred tax assets or liabilities are expected to be settled or realized. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount expected to be utilized.
Comprehensive income
Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes
in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the
equity section of the balance sheet, such items along with net income, are components of comprehensive income. The components of other
comprehensive income and related tax effects are presented in the Statements of Comprehensive Income.
9 Decades of Commitment to Customer Service 65
Fair Value Measurements
The fair value of a financial instrument is the current amount that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs
in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability.
Valuation techniques use certain inputs to arrive at fair value. Inputs to valuation techniques are the assumptions that market participants would
use in pricing the asset or liability. They may be observable or unobservable. First Guaranty uses a fair value hierarchy for valuation inputs that
gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. See Note
19 for a detailed description of fair value measurements.
Transfers of Financial Assets
Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is
deemed to be surrendered when (i) the assets have been isolated from First Guaranty, (ii) the transferee obtains the right (free of conditions that
constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (iii) First Guaranty does not maintain effective
control over the transferred assets through an agreement to repurchase them before their maturity.
Earnings per common share
Earnings per share represents income available to common shareholders divided by the weighted average number of common shares outstanding
during the period. No convertible shares of First Guaranty's stock are outstanding.
Revenue Recognition
First Guaranty has identified certain recurring revenue streams (including fee income, NSF/OD charges, and ATM/ Card fee income) related to
noninterest income, which are within the scope of Topic 606, Revenue from Contracts with Customers.
There are no significant judgments relating to the amount and timing of revenue recognition for revenue streams within the scope of Topic 606,
Revenue from Contracts with Customer. Due to the nature of the services First Guaranty provides to its customers, it does not incur costs to obtain
contracts, and there are no material incremental costs to fulfill these contacts that should be capitalized. There are no material contract assets or
receivables as First Guaranty does not typically enter into long-term revenue contracts with customers.
Operating Segments
All of First Guaranty's operations are considered by management to be aggregated into one reportable operating segment. While the chief decision-
makers monitor the revenue streams of the various products and services, the identifiable segments are not material. Operations are managed and
financial performance is evaluated on a Company-wide basis.
Reclassifications
Certain reclassifications have been made to prior year end financial statements in order to conform to the classification adopted for reporting in
2024.
Note 2. Recent Accounting Pronouncements
Accounting Standards Adopted in 2024
None.
Accounting Pronouncements Not Yet Adopted
ASU No. 2023-09, "Improvements to Tax Disclosures" ("ASU 2023-09") is intended to enhance the transparency and decision usefulness of
income tax disclosures primarily through changes to the rate reconciliation and income taxes paid information. This update is effective for annual
periods beginning after December 15, 2024, though early adoption is permitted. We do not expect it to have a material effect on First Guaranty's
consolidated financial statements.
66 First Guaranty Bancshares, Inc. Annual Report 2024
Note 3. Cash and Due from Banks
Certain reserves are required to be maintained at the Federal Reserve Bank. There was no reserve requirement as of December 31, 2024 and
2023. At December 31, 2024 First Guaranty had three accounts at correspondent banks, excluding the Federal Reserve Bank, that exceeded the
FDIC insurable limit of $250,000. These accounts were over the insurable limit by $10.7 million. At December 31, 2023 First Guaranty had three
accounts at correspondent banks, excluding the Federal Reserve Bank, that exceeded the FDIC insurable limit of $250,000. These accounts were
over the insurable limit by $1.2 million.
Note 4. Securities
A summary comparison of securities by type at December 31, 2024 and 2023 is shown below.
December 31, 2024
December 31, 2023
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
(in thousands)
Available for sale:
U.S. Treasury
$
147,840
$
33
$
(93) $
147,780 $
50,048
$ -
$ (218) $ 49,830
U.S. Government Agencies
-
-
-
-
-
-
-
-
Corporate debt securities
12,250
-
(668)
11,582
16,750
3
(1,279)
15,474
Municipal bonds
21,736
220
(339)
21,617
13,522
31
(372)
13,181
Collateralized mortgage obligations
32,065
-
(446)
31,619
-
-
-
-
Mortgage-backed securities
70,430
-
(1,931)
68,499
5,144
-
(144)
5,000
Total available for sale securities
$ 284,321
$
253
$
(3,477) $
281,097 $
85,464
$ 34
$
(2,013) $
83,485
Held to maturity:
U.S. Government Agencies
$
266,761
$
-
$ (64,671) $
202,090 $
265,896
$ -
$
(61,532) 204,364
Corporate debt securities
55,011
-
(5,643)
49,368
54,822
-
(5,602)
49,220
Total held to maturity securities
$ 321,772
$
-
$ (70,314) $
251,458 $
320,718
$ -
$
(67,134) $
253,584
December 31, 2024
Amortized Cost
Fair Value
(in thousands)
Available for sale:
Due in one year or less
$
153,941
$
153,898
Due after one year through five years
5,959
5,945
Due after five years through 10 years
19,162
18,533
Over 10 years
2,764
2,603
Subtotal
181,826
180,979
Collateralized mortgage obligations
32,065
31,619
Mortgage-backed Securities
70,430
68,499
Total available for sale securities
$
284,321
$
281,097
Held to maturity:
Due in one year or less
$
-
$
-
Due after one year through five years
6,420
5,959
Due after five years through 10 years
135,734
116,359
Over 10 years
179,618
129,140
Total held to maturity securities
$
321,772
$
251,458
The scheduled maturities of securities at December 31, 2024, by contractual maturity, are shown below. Actual maturities may differ from
contractual maturities due to call or prepayments. Mortgage-backed securities are not due at a single maturity because of amortization and
potential prepayment of the underlying mortgages. For this reason they are presented separately in the maturity table below.
9 Decades of Commitment to Customer Service 67
At December 31, 2024 and 2023 the carrying value of pledged securities totaled $233.9 million and $192.2 million, respectively.
Accrued interest receivable on First Guaranty's investment securities was $1.4 million and $1.8 million at December 31, 2024 and 2023, respectively,
and was included in accrued interest receivable on the consolidated balance sheet. The allowance for credit losses related to the held to maturity portfolio
was $0.2 million and $0.1 million at December 31, 2024 and 2023, respectively.
The following is a summary of the fair value of securities with gross unrealized losses and an aging of those gross unrealized losses at December 31, 2024.
December 31, 2023
Less Than 12 Months
12 Months or More
Total
Number
of
Securities
Fair
Value
Gross
Unrealized
Losses
Number
of
Securities
Fair
Value
Gross
Unrealized
Losses
Number
of
Securities
Fair
Value
Gross
Unrealized
Losses
(in thousands)
Available for sale:
U.S. Treasuries
-
$
-
$
-
3
$ 49,830
$
(218 )
3
$ $ 49,830
$ (218)
U.S. Government Agencies
-
-
-
-
-
-
-
-
-
Corporate debt securities
-
-
-
15
14,471
(1,279 )
15
14,471
(1,279 )
Municipal bonds
12
3,417
(6)
41
5,895
(366 )
53
9,312
(372)
Mortgage-backed securities
2
2,606
(21)
5
2,394
(123 )
7
5,000
(144)
Total available for sale
securities
14
$ 6,023
$ (27)
64
72,590
$
(1,986 )
78
$
78,613
$
(2,013)
Held to maturity
U.S. Government Agencies
-
$ -
$ -
29
$ 204,364
$ (61,532 )
29
$
204,364
$ (61,532)
Corporate debt securities
-
-
-
57
49,220
(5,602 )
57
49,220
(5,602 )
Total held to maturity
securities
-
$
-
$
-
86
$
253,584
$ (67,134 )
86
$
253,584
$ (67,134)
The following is a summary of the fair value of securities with gross unrealized losses and an aging of those gross unrealized losses at December 31, 2023.
December 31, 2024
Less Than 12 Months
12 Months or More
Total
Number
of
Securities
Fair
Value
Gross
Unrealized
Losses
Number
of
Securities
Fair
Value
Gross
Unrealized
Losses
Number
of
Securities
Fair
Value
Gross
Unrealized
Losses
(in thousands)
Available for sale:
U.S. Treasuries
2
$
48,615
$
(93)
-
$
-
$
-
2
$
48,615
$
(93)
U.S. Government Agencies
-
-
-
-
-
-
-
-
-
Corporate debt securities
2
1,965
(35)
12
9,617
(633)
14
11,582
(668)
Municipal bonds
2
505
(4)
34
5,406
(335)
36
5,911
(339)
Collateralized mortgage
obligations
8
31,619
(446)
-
-
-
8
31,619
(446)
Mortgage-backed securities
15
65,089
(1,721)
6
3,410
(210)
21
68,499
(1,931)
Total available for sale
securities
29
$ 147,793
$
(2,299)
52
$
18,433
$
(1,178)
81
$ 166,226
$
(3,477)
Held to maturity
U.S. Government Agencies
-
$ -
$ -
29
$ 202,090
$
(64,671)
29
$ 202,090
$ (64,671)
Corporate debt securities
1
322
(3)
56
49,046
(5,640)
57
49,368
(5,643)
Total held to maturity
securities
1
$
322
$
(3)
85
$ 251,136
$
(70,311)
86
$ 251,458
$ (70,314)
68 First Guaranty Bancshares, Inc. Annual Report 2024
As of December 31, 2024, 167 of First Guaranty's debt securities had gross unrealized losses totaling 15.0% of the individual securities' amortized
cost basis and 12.2% of First Guaranty's total amortized cost basis of the investment securities portfolio. 137 of the 167 securities had been in
a continuous loss position for over 12 months at such date. The 137 securities had an aggregate amortized cost basis of $341.1 million and an
unrealized loss of $71.5 million at December 31, 2024. Management has the intent and ability to hold these debt securities until maturity or until
anticipated recovery.
Securities are evaluated for impairment from credit losses at least quarterly and more frequently when economic or market conditions warrant
such evaluation. Consideration is given to (i) the extent to which the fair value has been less than cost, (ii) the financial condition and near-term
prospects of the issuer, (iii) the recovery of contractual principal and interest and (iv) the intent and ability of First Guaranty to retain its investment
in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.
Investment securities issued by the U.S. Government and Government sponsored enterprises with unrealized losses and the amount of unrealized
losses on those investment securities that are the result of changes in market interest rates will not be credit impaired. First Guaranty has the ability
and intent to hold these securities until recovery, which may not be until maturity.
There were no charge-offs recognized on securities during the year ended December 31, 2024. There was one charge-off, net of recovery, of
$0.1 million recognized on a corporate security during the year ended December 31, 2023. There was a $0.1 million provision for credit losses
recognized on securities during each of the years ended December 31, 2024 and 2023.
Gross realized gains on sales of securities were $0 for the years ended December 31, 2024 and 2023, respectively. Gross realized losses were
$0 for the years ended December 31, 2024 and 2023. The tax applicable to these transactions amounted to $0 for 2024 and 2023, respectively.
Proceeds from sales of securities classified as available for sale amounted to $0 for the years ended December 31, 2024 and 2023, respectively.
Net unrealized losses on available for sale securities included in accumulated other comprehensive income (loss) ("AOCI"), net of applicable
income taxes, totaled $12.9 million and $13.0 million at December 31, 2024 and 2023. During 2024 and 2023 net gains, net of tax, reclassified
out of AOCI into earnings totaled $0.
At December 31, 2024, First Guaranty's exposure to investment securities issuers that exceeded 10% of shareholders' equity was as follows:
December 31, 2024
Amortized Cost
Fair Value
(in thousands)
U.S. Government Treasuries (U.S.)
$
147,840
$
147,780
Federal Home Loan Bank (FHLB)
32,302
25,737
Federal Home Loan Mortgage Corporation (Freddie Mac-FHLMC)
98,990
70,391
Federal Farm Credit Bank (FFCB)
139,223
109,503
Government National Mortgage Association (Ginnie Mae-GNMA)
65,266
63,556
Total
$
483,621
$
416,967
9 Decades of Commitment to Customer Service 69
Note 5. Loans
The following table summarizes the components of First Guaranty's loan portfolio as of December 31, 2024 and December 31, 2023:
December 31,
2024
2023
Balance
As % of Category
Balance
As % of Category
(in thousands, except for %)
Real Estate:
Construction & land development
$
330,048
12.2%
$ 399,435
14.5%
Farmland
35,991
1.3%
32,530
1.2%
1- 4 Family
450,371
16.7%
444,850
16.1%
Multifamily
165,121
6.1%
118,921
4.3%
Non-farm non-residential
1,159,842
42.9%
1,045,865
37.9 %
Total Real Estate
2,141,373
79.2%
2,041,601
74.0%
Non-Real Estate:
Agricultural
40,722
1.5%
41,008
1.5%
Commercial and industrial(1)
257,518
9.5%
334,972
12.1%
Commercial leases
220,200
8.2%
285,415
10.4%
Consumer and other
42,267
1.6%
54,485
2.0 %
Total Non-Real Estate
560,707
20.8%
715,880
26.0%
Total Loans Before Unearned Income
2,702,080
100.0%
2,757,481
100.0 %
Unearned income
(8,300)
(8,773)
Total Loans Net of Unearned Income
$
2,693,780
$ 2,748,708
(1) Includes PPP loans fully guaranteed by the SBA of $1.6 million and $2.8 million at December 31, 2024 and December 31, 2023, respectively.
Accrued interest receivable on First Guaranty's loans totaled $13.4 million and $13.9 million at December 31, 2024 and December 31, 2023,
respectively, and is included in accrued interest receivable on the consolidated balance sheet. Accrued interest receivable is excluded from First
Guaranty's estimate of the allowance for credit losses.
The following table summarizes fixed and floating rate loans by contractual maturity, excluding nonaccrual loans, as of December 31, 2024 and
December 31, 2023 unadjusted for scheduled principal payments, prepayments, or repricing opportunities. The average life of the loan portfolio
may be substantially less than the contractual terms when these adjustments are considered
December 31,
2024
2023
(in thousands)
Fixed
Floating
Total
Fixed
Floating
Total
One year or less
$ 240,685 $
245,272
$
485,957 $
268,864
$
88,884
$ 357,748
One to five years
501,800
256,720
758,520
782,754
357,981
1,140,735
Five to 15 years
62,412
293,173
355,585
88,490
269,918
358,408
Over 15 years
358,727
634,762
993,489 $
334,337
541,066
875,403
Subtotal
$ 1,163,624 $
1,429,927
2,593,551 $ 1,474,445
$
1,257,849
2,732,294
Nonaccrual loans
108,529
25,187
Total Loans Before Unearned Income
2,702,080
2,757,481
Unearned income
(8,300)
(8,773)
Total Loans Net of Unearned Income
$
2,693,780
$ 2,748,708
Included in floating rate loans are loans that adjust to a floating rate following an initial fixed rate period. The initial fixed rate periods are typically
one, three, or five years.
70 First Guaranty Bancshares, Inc. Annual Report 2024
As of December 31, 2024
30-89 Days
Past Due
90 Days or
Greater Past
Due
Total Past
Due
Current
Total Loans
Recorded
Investment 90
Days Accruing
(in thousands)
Real Estate:
Construction & land development
$
1,562
$
11,018
$
12,580
$
317,468 $
330,048
$
7,394
Farmland
-
2,619
2,619
33,372
35,991
-
1- 4 family
12,917
10,053
22,970
427,401
450,371
-
Multifamily
199
27,542
27,741
137,380
165,121
-
Non-farm non-residential
38,607
58,279
96,886
1,062,956
1,159,842
4,108
Total Real Estate
53,285
109,511
162,796
1,978,577
2,141,373
11,502
Non-Real Estate:
Agricultural
677
1,992
2,669
38,053
40,722
-
Commercial and industrial
1,293
6,762
8,055
249,463
257,518
-
Commercial leases
-
1,533
1,533
218,667
220,200
-
Consumer and other
860
233
1,093
41,174
42,267
-
Total Non-Real Estate
2,830
10,520
13,350
547,357
560,707
-
Total Loans Before Unearned Income
$
56,115
$
120,031
$ 176,146
$ 2,525,934
2,702,080
$
11,502
Unearned income
(8,300))
Total Loans Net of Unearned Income
$
2,693,780
As of December 31, 2023
30-89 Days
Past Due
90 Days or
Greater Past
Due
Total Past
Due
Current
Total Loans
Recorded
Investment 90
Days Accruing
(in thousands)
Real Estate:
Construction & land development
$
1,281
$
530
$
1,811
$
397,624 $ 399,435 $ -
Farmland
97
836
933
31,597
32,530
-
1- 4 family
3,929
7,109
11,038
433,812
444,850
124
Multifamily
824
537
1,361
117,560
118,921
-
Non-farm non-residential
1,020
24,451
25,471
1,020,394
1,045,865
14,711
Total Real Estate
7,151
33,463
40,614
2,000,987
2,041,601
14,835
Non-Real Estate:
Agricultural
240
1,426
1,666
39,342
41,008
57
Commercial and industrial
2,483
1,976
4,459
330,513
334,972
395
Commercial leases
-
1,799
1,799
283,616
285,415
-
Consumer and other
1,037
1,810
2,847
51,638
54,485
-
Total Non-Real Estate
3,760
7,011
10,771
705,109
715,880
452
Total Loans Before Unearned Income
$ 10,911
$ 40,474
$ 51,385
$ 2,706,096
2,757,481
$ $ 15,287
Unearned income
(8,773)
Total Loans Net of Unearned Income
$ 2,748,708
The following tables present the age analysis of past due loans at December 31, 2024 and December 31, 2023:
The tables above include $108.5 million and $25.2 million of nonaccrual loans for December 31, 2024 and 2023, respectively. See the tables
below for more detail on nonaccrual loans.
9 Decades of Commitment to Customer Service 71
The following is a summary of nonaccrual loans by class at the dates indicated.
As of December 31, 2024
With Related
Allowance
Without Related
Allowance
Total
(in thousands)
Real Estate:
Construction & land development
$
697
$
2,927
$
3,624
Farmland
678
1,941
2,619
1- 4 family
7,309
2,744
10,053
Multifamily
25,986
1,556
27,542
Non-farm non-residential
7,976
46,195
54,171
Total Real Estate
42,646
55,363
98,009
Non-Real Estate:
Agricultural
729
1,263
1,992
Commercial and industrial
1,724
5,038
6,762
Commercial leases
-
1,533
1,533
Consumer and other
233
-
233
Total Non-Real Estate
2,686
7,834
10,520
Total Nonaccrual Loans
$
45,332
$
63,197
$
108,529
As of December 31, 2023
With Related
Allowance
Without Related
Allowance
Total
(in thousands)
Real Estate:
Construction & land development
$
530 $
-
$
530
Farmland
511
325
836
1- 4 family
5,417
1,568
6,985
Multifamily
-
537
537
Non-farm non-residential
8,730
1.010
9,740
Total Real Estate
15,188
3,440
18,628
Non-Real Estate:
Agricultural
399
970
1,369
Commercial and industrial
1,581
-
1,581
Commercial leases
-
1,799
1,799
Consumer and other
1,810
-
1,810
Total Non-Real Estate
3,790
2,769
6,559
Total Nonaccrual Loans
$
18,978 $
6,209
$
25,187
72 First Guaranty Bancshares, Inc. Annual Report 2024
The following table presents First Guaranty's loan portfolio by credit quality classification and origination year as of the date indicated:
As of December 31, 2024
2024
2023
2022
2021
2020
Prior
Revolving
Loans
Total
(in thousands)
Real Estate:
Construction & land development
Pass
$
18,411 $
110,178 $ 135,554 $
17,703 $
1,728 $
4,422
$
12,734
$
300,730
Special Mention
609
16,956
91
-
81
64
30
17,831
Substandard
-
1,461
8,572
599
246
525
-
11,403
Doubtful
-
-
-
84
-
-
-
84
Total Construction & land
development
19,020
128,595
144,217
18,386
2,055
5,011
12,764
330,048
Current period gross charge-offs
-
-
39
-
-
-
-
39
Farmland
Pass
2,373
11,976
3,499
3,312
1,599
1,922
2,865
27,546
Special Mention
3,029
-
57
-
1,656
76
-
4,818
Substandard
-
381
27
-
2,592
627
-
3,627
Doubtful
-
-
-
-
-
-
-
-
Total Farmland
5,402
12,357
3,583
3,312
5,847
2,625
2,865
35,991
Current period gross charge-offs
-
-
258
-
-
-
-
258
1- 4 family
Pass
62,044
98,098
101,780
63,313
36,285
47,263
9,896
418,679
Special Mention
431
1,644
1,775
326
2,383
2,320
1,039
9,918
Substandard
-
4,186
3,129
4,689
1,619
4,343
3,543
21,509
Doubtful
-
-
73
-
-
119
73
265
Total 1- 4 family
62,475
103,928
106,757
68,328
40,287
54,045
14,551
450,371
Current period gross charge-offs
-
-
174
59
5
796
-
1,034
Multifamily
Pass
446
9,196
44,395
48,143
14,607
5,135
4,419
126,341
Special Mention
-
-
7,100
506
-
1,577
-
9,183
Substandard
-
-
28,041
-
-
1,556
-
29,597
Doubtful
-
-
—
-
-
-
-
-
Total 1- 4 Multifamily
446
9,196
79,536
48,649
14,607
8,268
4,419
165,121
Current period gross charge-offs
-
-
-
-
-
-
-
-
Non-farm non-residential
Pass
68,227
202,084
250,338
95,588
96,967
251,914
38,698
1,003,816
Special Mention
-
4,390
354
8,509
1,067
34,467
9,208
57,995
Substandard
11,356
9,213
32,688
37,181
916
2,917
3,694
97,965
Doubtful
-
-
-
-
66
-
-
66
Total non-farm non-residential
79,583
215,687
283,380
141,278
99,016
289,298
51,600
1,159,842
Current period gross charge-offs
-
3,793
1,031
3,009
331
836
-
9,000
Total Real Estate
166,926
469,763
617,473
279,953
161,812
359,247
86,199
2,141,373
9 Decades of Commitment to Customer Service 73
As of December 31, 2024
2024
2023
2022
2021
2020
Prior
Revolving
Loans
Total
(in thousands)
Non-Real Estate:
Agricultural
Pass
2,102
2,766
7,815
2,904
1,142
5,676
13,130
35,535
Special Mention
18
74
1,793
10
132
112
91
2,230
Substandard
169
51
-
663
128
1,915
12
2,938
Doubtful
-
-
-
-
-
19
-
19
Total Agricultural
2,289
2,891
9,608
3,577
1,402
7,722
13,233
40,722
Current period gross charge-offs
-
-
-
33
-
-
-
33
Commercial and industrial
Pass
27,172
26,410
19,230
39,601
30,833
13,946
80,769
237,961
Special Mention
4,082
660
78
91
38
80
306
5,335
Substandard
25
59
815
939
193
1,229
10,962
14,222
Doubtful
-
-
-
-
-
-
-
-
Total Commercial and industrial
31,279
27,129
20,123
40,631
31,064
15,255
92,037
257,518
Current period gross charge-offs
185
702
913
563
2,168
342
-
4,873
Commercial leases
Pass
48,856
61,057
47,140
38,027
3,554
398
-
199,032
Special Mention
-
-
18,153
-
-
-
-
18,153
Substandard
-
-
3,015
-
-
-
-
3,015
Doubtful
-
-
-
-
-
-
-
-
Total Commercial leases
48,856
61,057
68,308
38,027
3,554
398
-
220,200
Current period gross charge-offs
-
-
-
-
-
-
-
-
Consumer and other loans
Pass
8,457
14,710
4,083
3,257
4,467
6,262
-
41,236
Special Mention
-
29
42
98
26
-
-
195
Substandard
96
176
276
221
29
38
-
836
Doubtful
-
-
-
-
-
-
-
-
Total Consumer and other loans
8,553
14,915
4,401
3,576
4,522
6,300
-
42,267
Current period gross charge-offs
438
802
1,013
693
283
125
-
3,354
Total Non-Real Estate
90,977
105,992
102,440
85,811
40,542
29,675
105,270
560,707
Total Loans
Pass
238,088
536,475
613,834
311,848
191,182
336,938
162,511
2,390,876
Special Mention
8,169
23,753
29,443
9,540
5,383
38,696
10,674
125,658
Substandard
11,646
15,527
76,563
44,292
5,723
13,150
18,211
185,112
Doubtful
-
-
73
84
66
138
73
434
Total Loans Before Unearned Income
$ 257,903
$ 575,755
$ 719,913 $ 365,764 $ 202,354 $ 388,922
$ 191,469 $
2,702,080
Unearned income
(8,300)
Total Loans Net of Unearned Income
$
2,693,780
Total Current Period Gross Charge-offs
$
623
$
5,297
$
3,428 $
4,357 $
2,787 $
2,099
$
- $
18,591
74 First Guaranty Bancshares, Inc. Annual Report 2024
As of December 31, 2023
2023
2022
2021
2020
2019
Prior
Revolving
Loans
Total
(in thousands)
Real Estate:
Construction & land development
Pass
$ 134,527 $
140,068 $ 75,884 $
3,369 $
8,533 $ 11,940
$
18,907
$ 393,228
Special Mention
789
1,579
170
-
90
250
-
2,878
Substandard
-
716
458
263
94
1,668
-
3,199
Doubtful
-
39
91
-
-
-
-
130
Total Construction & land
development
135,316
142,402
76,603
3,632
8,717
13,858
18,907
399,435
Current period gross charge-offs
-
-
-
-
-
-
-
-
Farmland
Pass
9,513
4,032
3,340
1,768
253
2,730
2,162
23,798
Special Mention
-
194
-
514
-
359
-
1,067
Substandard
-
251
1,369
3,877
115
653
1,355
7,620
Doubtful
-
-
-
-
-
-
45
45
Total Farmland
9,513
4,477
4,709
6,159
368
3,742
3,562
32,530
Current period gross charge-offs
-
-
-
-
-
-
-
-
1- 4 family
Pass
112,636
110,978
70,599
41,766
19,542
47,374
17,215
420,110
Special Mention
1,307
2,505
749
1,544
775
997
667
8,544
Substandard
48
2,625
5,368
1,357
1,956
3,086
773
15,213
Doubtful
-
122
391
-
239
159
72
983
Total 1- 4 family
113,991
116,230
77,107
44,667
22,512
51,616
18,727
444,850
Current period gross charge-offs
-
-
-
-
-
964
-
964
Multifamily
Pass
9,945
76,217
6,121
15,131
1,877
2,311
5,110
116,712
Special Mention
-
-
-
-
-
1,648
24
1,672
Substandard
-
-
-
-
-
537
-
537
Doubtful
-
-
-
-
-
-
-
-
Total 1- 4 Multifamily
9,945
76,217
6,121
15,131
1,877
4,496
5,134
118,921
Current period gross charge-offs
-
-
-
-
-
-
-
-
Non-farm non-residential
Pass
162,234
247,182
111,054
88,039
73,797
256,032
33,907
972,245
Special Mention
708
369
1,014
388
15,846
5,191
1,525
25,041
Substandard
247
18,930
18,488
-
-
6,125
4,723
48,513
Doubtful
-
-
-
66
-
-
-
66
Total non-farm non-residential
163,189
266,481
130,556
88,493
89,643
267,348
40,155
1,045,865
Current period gross charge-offs
-
-
-
138
-
-
-
138
Total Real Estate
431,954
605,807
295,096
158,082
123,117
341,060
86,485
2,041,601
9 Decades of Commitment to Customer Service 75
As of December 31, 2023
2023
2022
2021
2020
2019
Prior
Revolving
Loans
Total
(in thousands)
Non-Real Estate:
Agricultural
Pass
2,555
10,406
3,142
1,336
1,532
2,378
16,259
37,608
Special Mention
-
104
-
81
-
-
25
210
Substandard
-
-
692
279
20
2,100
57
3,148
Doubtful
-
-
-
-
-
42
-
42
Total Agricultural
2,555
10,510
3,834
1,696
1,552
4,520
16,341
41,008
Current period gross charge-offs
-
-
-
-
-
-
-
-
Commercial and industrial
Pass
41,105
27,800
48,097
53,585
5,613
27,634
119,886
323,720
Special Mention
63
37
4,382
146
-
53
598
5,279
Substandard
45
283
178
602
27
4,531
145
5,811
Doubtful
-
-
-
-
-
162
-
162
Total Commercial and industrial
41,213
28,120
52,657
54,333
5,640
32,380
120,629
334,972
Current period gross charge-offs
29
791
133
532
-
209
-
1,694
Commercial leases
Pass
74,456
117,566
67,615
6,087
4,428
-
-
270,152
Special Mention
-
11,867
1,597
-
-
-
-
13,464
Substandard
-
1,799
-
-
-
-
-
1,799
Doubtful
-
-
-
-
-
-
-
-
Total Commercial leases
74,456
131,232
69,212
6,087
4,428
-
-
285,415
Current period gross charge-offs
-
-
-
-
-
-
-
-
Consumer and other loans
Pass
21,257
8,770
6,463
6,164
650
7,887
150
51,341
Special Mention
36
151
255
87
15
19
-
563
Substandard
164
1,077
790
265
86
68
-
2,450
Doubtful
-
-
34
79
2
16
-
131
Total Consumer and other loans
21,457
9,998
7,542
6,595
753
7,990
150
54,485
Current period gross charge-offs
598
1,126
820
359
28
44
-
2,975
Total Non-Real Estate
139,681
179,860
133,245
68,711
12,373
44,890
137,120
715,880
Total Loans
Pass
568,228
743,019
392,315
217,245
116,225
358,286
213,596
2,608,914
Special Mention
2,903
16,806
8,167
2,760
16,726
8,517
2,839
58,718
Substandard
504
25,681
27,343
6,643
2,298
18,768
7,053
88,290
Doubtful
-
161
516
145
241
379
117
1,559
Total Loans Before Unearned Income
$ 571,635
$ 785,667
$ 428,341 $ 226,793 $ 135,490 $ 385,950
$ 223,605 $ 2,757,481
Unearned income
(8,773)
Total Loans Net of Unearned Income
$ 2,748,708
Total Current Period Gross Charge-offs
$ 627 $ 1,917
$ 953 $ 1,029 $
28 $ 1,217
$ - $ 5,771
76 First Guaranty Bancshares, Inc. Annual Report 2024
Note 6. Allowance for Credit Losses on Loans
A summary of changes in the allowance for credit losses, by portfolio type, for the years ended December 31, 2024 and 2023 are as follows:
For the Year Ended December 31,
2024
Beginning
Allowance
(12/31/23)
Charge-Offs
Recoveries
Provision
Ending
Allowance
(12/31/24)
(in thousands)
Real Estate:
Construction & land development
$
5,845
$
(39)
$
1
$
(1,877) $
3,930
Farmland
36
(258)
2
270
50
1- 4 family
6,653
(1,034)
12
3,612
9,243
Multifamily
1,614
-
-
2,335
3,949
Non-farm non-residential
10,596
(9,000)
93
9,842
11,531
Total Real Estate
24,744
(10,331)
108
14,182
28,703
Non-Real Estate:
Agricultural
97
(33)
18
122
204
Commercial and industrial
2,711
(4,873)
235
3,921
1,994
Commercial leases
1,948
-
-
(229)
1,719
Consumer and other
1,426
(3,354)
551
2,714
1,337
Unallocated
-
-
-
854
854
Total Non-Real Estate
6,182
(8,260)
804
7,382
6,108
Total Loans
$
30,926
$
(18,591)
$
912
$
21,564
$
34,811
Unfunded lending commitments
2,810
-
-
(1,600)
1,210
Total
$
33,736
$
(18,591)
$
912
$
19,964
$
36,021
9 Decades of Commitment to Customer Service 77
Negative provisions are caused by changes in the composition and credit quality of the loan portfolio and by recoveries. The result is an allocation
of the credit loss reserve from one category to another.
For the Year Ended December 31,
2023
Beginning
Allowance
(12/31/22)
ASC 326
Adoption Day 1
Adjustment
Charge-Offs
Recoveries
Provision
Ending
Allowance
(12/31/23)
(in thousands)
Real Estate:
Construction & land development
$
1,232
$
1,891
$ -
$
7
$
2,715
$
5,845
Farmland
83
(39)
-
-
(8)
36
1- 4 family
1,761
3,465
(964)
93
2,298
6,653
Multifamily
746
1,418
-
-
(550)
1,614
Non-farm non-residential
9,280
307
(138)
230
917
10,596
Total Real Estate
13,102
7,042
(1,102)
330
5,372
24,744
Non-Real Estate:
Agricultural
240
(98)
-
414
(459)
97
Commercial and industrial
2,194
2,971
(1,694)
205
(965)
2,711
Commercial leases
4,879
(162)
-
-
(2,769)
1,948
Consumer and other
2,506
(1,042)
(2,975)
426
2,511
1,426
Unallocated
597
(591)
-
-
(6)
-
Total Non-Real Estate
10,416
1,078
(4,669)
1,045
(1,688)
6,182
Total Loans
$
23,518
$
8,120
$
(5,771)
$
1,375 $
3,684
$
30,926
Unfunded lending commitments
-
2,900
-
-
(90)
2,810
Total
$
23,518
$
11,020
$
(5,771)
$
1,375 $
3,594
33,763
78 First Guaranty Bancshares, Inc. Annual Report 2024
As of December 31, 2024
Allowance
Individually
Evaluated
Allowance
Collectively
Evaluated
Total Allowance
for Credit
Losses
Loans
Individually
Evaluated
Loans
Collectively
Evaluated
Total Loans
before Unearned
Income
(in thousands)
Real Estate:
Construction & land development
$
403
$
3,527 $
3,930
$
10,724
$
319,324
$
330,048
Farmland
-
50
50
2,973
33,018
35,991
1- 4 family
430
8,813
9,243
3,174
447,197
450,371
Multifamily
2,942
1,007
3,949
27,516
137,605
165,121
Non-farm non-residential
1,229
10,302
11,531
54,201
1,105,641
1,159,842
Total Real Estate
5,004
23,699
28,703
98,588
2,042,785
2,141,373
Non-Real Estate:
Agricultural
129
75
204
2,151
38,571
40,722
Commercial and industrial
3
1,991
1,994
5,194
252,324
257,518
Commercial leases
-
1,719
1,719
3,015
217,185
220,200
Consumer and other
-
1,337
1,337
-
42,267
42,267
Unallocated
-
854
854
-
-
-
Total Non-Real Estate
132
5,976
6,108
10,360
550,347
560,707
Total
$
5,136
$
29,675 $
34,811
$ 108,948
$
2,593,132
$
2,702,080
Unearned Income
(8,300)
Total Loans Net of Unearned Income
$
2,693,780
All loans individually evaluated for impairment as of December 31, 2024 were considered collateral dependent loans.
A summary of the allowance along with loans and leases individually and collectively evaluated are as follows:
9 Decades of Commitment to Customer Service 79
As of December 31, 2024 and 2023, First Guaranty had loans totaling $108.5 million and $25.2 million, respectively, not accruing interest. As of
December 31, 2024, and 2023, First Guaranty had loans past due 90 days or more and still accruing interest totaling $11.5 million and $15.3
million, respectively. The average outstanding balance of nonaccrual loans in 2024 was $63.4 million compared to $22.5 million in 2023.
The Bank held loans that were individually evaluated for impairment at December 31, 2024 for which the repayment, on the basis of the
assessment at the reporting date, is expected to be provided substantially though the operation or sale of the collateral and the borrower is
experiencing financial difficulty. The Allowance for Credit Losses for these collateral-dependent loans is primarily based on the fair value of the
underlying collateral at the reporting date. The following describes the type of collateral that secure collateral dependent loans:
• Residential real estate loans are primarily secured by first liens on residential real estate.
• Commercial real estate loans are primarily secured by office and industrial buildings, warehouses, retail shopping facilities and various
special purpose properties, including hotels and restaurants.
• Construction and land loans are primarily secured by residential and commercial properties, which are under construction and/or
redevelopment, and by raw land.
• Commercial loans are primarily secured by accounts receivable, inventory and equipment.
• Agriculture loans are primarily secured by farmland and equipment.
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Occasionally, the Bank modifies loans to borrowers in financial distress by providing certain concessions, such as principal forgiveness, term
extension, an other-than-insignificant payment delay, interest only for a specified period of time, an interest rate reduction, or a combination of
such concessions. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. Upon
the Bank’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is
charged-off. Reportable modifications to borrowers experiencing financial difficulty (MEFD) during the year ended December 31, 2024 consisted
of $3.0 million term extensions, $0.6 million payment delays, and $0 with both term extensions and payment delays. The bank had $0 unfunded
commitments to borrowers whose terms have been modified as a reportable MEFD as of December 31, 2024.
As of December 31, 2024, there have been no loans that were modified with in the previous 12 months for which there has been payment default
during the period.
As of December 31, 2023
Allowance
Individually
Evaluated
Allowance
Collectively
Evaluated
Total Allowance
for Credit
Losses
Loans
Individually
Evaluated
Loans
Collectively
Evaluated
Total Loans
before Unearned
Income
(in thousands)
Real Estate:
Construction & land development
$
-
$
5,845 $
5,845
$
1,389
$ 398,046
$ 399,435
Farmland
-
36
36
5,670
26,860
32,530
1- 4 family
316
6,337
6,653
5,066
439,784
444,850
Multifamily
-
1,614
1,614
537
118,384
118,921
Non-farm non-residential
3,047
7,549
10,596
46,571
999,294
1,045,865
Total Real Estate
3,363
21,381
24,744
59,233
1,982,368
2,041,601
Non-Real Estate:
Agricultural
1
96
97
1,466
39,542
41,008
Commercial and industrial
758
1,953
2,711
4,464
330,508
334,972
Commercial leases
-
1,948
1,948
1,799
283,616
285,415
Consumer and other
-
1,426
1,426
-
54,485
54,485
Unallocated
-
-
-
-
-
-
Total Non-Real Estate
759
5,423
6,182
7,729
708,151
715,880
Total
$ 4,122
$
26,804 $
30,926
$
66,962
$ 2,690,519
$ 2,757,481
Unearned Income
(8,773)
Total Loans Net of Unearned Income
$ 2,748,708
All loans individually evaluated for impairment as of December 31, 2023 were considered collateral dependent loans.
80 First Guaranty Bancshares, Inc. Annual Report 2024
Note 7. Premises and Equipment
The components of premises and equipment at December 31, 2024 and 2023 are as follows:
December 31,
2024
2023
(in thousands)
Land
$
16,802
$
15,541
Bank premises
60,741
55,452
Furniture and equipment
32,946
31,681
Construction in progress
2,407
14,368
Acquired value
112,896
117,042
Less: accumulated depreciation
45,107
47,250
Net book value
$
67,789
$
69,792
December 31,
2023
2022
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
(in thousands)
Core deposit intangibles
$ 16,266
$ 13,303
$ 2,963
$ 16,266
$ 12,607
$ 3,659
Loan servicing assets
2,200
1,789
411
2,198
1,659
539
Total
$ 18,466
$ 15,092
$ 3,374
$ 18,464
$ 14,266
$ 4,198
The core deposits intangible reflect the value of deposit relationships, including the beneficial rates, which arose from acquisitions. The
weighted-average amortization period remaining for the core deposit intangibles is 4.3 years.
Amortization expense relating to purchase accounting intangibles totaled $0.7 million for the years ended December 31, 2024 and 2023,
respectively.
Amortization expense of the core deposit intangible assets for the next five years is as follows:
For the Years Ended
Estimated Amortization Expense
(in thousands)
December 31, 2025
$ 696
December 31, 2026
$ 696
December 31, 2027
$ 696
December 31, 2028
$ 696
December 31, 2029
$ 179
Depreciation expense amounted to $3.4 million and $3.0 million for 2024 and 2023, respectively. Interest cost capitalized as a construction cost
was $0 for 2024 and 2023, respectively.
Note 8. Goodwill and Other Intangible Assets
Goodwill and intangible assets deemed to have indefinite lives are no longer amortized, but are subject to impairment testing. Other intangible
assets, such as core deposit intangibles and loan servicing assets, continue to be amortized over their useful lives. Goodwill represents the
purchase price over the fair value of net assets acquired from the Homestead Bancorp in 2007, Premier Bancshares, Inc. in 2017 and Union
Bancshares, Incorporated in 2019. No impairment charges have been recognized since acquisition. Goodwill totaled $12.9 million at December
31, 2024 and 2023. Other intangible assets not subject to amortization totaled $0.1 million at December 31, 2024 and 2023.
The following table summarizes intangible assets subject to amortization.
9 Decades of Commitment to Customer Service 81
Loans secured by one-to-four family residential properties in the process of foreclosure totaled $1.4 million as of December 31, 2024.
Note 10. Deposits
A schedule of maturities of all time deposits are as follows:
The table above includes $657.2 million in brokered deposits for December 31, 2024. The aggregate amount of jumbo time deposits, each with
a minimum denomination of $250,000 totaled $201.0 million and $196.9 million at December 31, 2024 and 2023, respectively.
Note 11. Borrowings
Short-term borrowings are summarized as follows:
First Guaranty maintains borrowing relationships with other financial institutions as well as the Federal Home Loan Bank on a short and long-term
basis to meet liquidity needs. First Guaranty had $7.0 million in short-term borrowings outstanding at December 31, 2024 compared to $66.3
million outstanding at December 31, 2023.
Available lines of credit totaled $682.7 million at December 31, 2024 and $589.2 million at December 31, 2023.
December 31, 2024
(in thousands)
2025
$
804,825
2026
335,461
2027
153,567
2028
107,561
2029 and thereafter
49,278
Total
$
1,450,692
December 31, 2024
December 31, 2023
(in thousands)
Federal Home Loan Bank advances
$
-
50,000
Repurchase agreements
7,009
6,297
Line of credit
-
10,000
Total short-term borrowings
$
7,009
$
66,297
Note 9. Other Real Estate
Other real estate owned consists of the following at the dates indicated:
December 31,
2024
2023
(in thousands)
Real Estate Owned Acquired by Foreclosure:
Residential
$
226
$
309
Construction & land development
3
251
Non-farm non-residential
90
690
Total Other Real Estate Owned and Foreclosed Property
319
1,250
Allowance for Other Real Estate Owned losses
-
-
Net Other Real Estate Owned and Foreclosed Property
$
319
$ 1,250
82 First Guaranty Bancshares, Inc. Annual Report 2024
December 31,
2024
2023
(in thousands, except for %)
Outstanding at year end
$
7,009
$
66,297
Maximum month-end outstanding
$
66,982
$
152,659
Average daily outstanding
$
24,849
$
67,102
Weighted average rate during the year
5.60%
5.78%
Weighted average rate at year end
5.56%
5.65%
The following schedule provides certain information about First Guaranty's short-term borrowings for the periods indicated:
Long-term debt is summarized as follows:
Senior long-term debt with a commercial bank, priced at floating Wall Street Journal Prime less 50 basis points (7.50% as of December 31, 2024),
totaled $15.2 million at December 31, 2024 and $39.1 million at December 31, 2023. First Guaranty refinanced this note on October 2023. First
Guaranty pays $1.0 million principal plus interest quarterly. This loan has a contractual maturity date of October 5, 2033. This long-term debt is
secured by a pledge of 86.77% (4,823,899 shares) of First Guaranty's interest in First Guaranty Bank (a wholly owned subsidiary).
Junior subordinated debt, priced at Wall Street Journal Prime plus 75 basis points (8.75% as of December 31, 2024), totaled $15.0 million at
December 31, 2024 and December 31, 2023. First Guaranty pays interest quarterly. The Note is unsecured and ranks junior in right of payment to
any senior indebtedness and obligations to general and secured creditors. The current Note is scheduled to mature on June 21, 2032. The Note
qualifies for treatment as Tier 2 capital for regulatory capital purposes.
Junior subordinated debt, priced at Wall Street Journal Prime plus 75 basis points (9.25% as of December 31, 2024), totaled $29.7 million at
December 31, 2024 and $0 at December 31, 2023. This note was issued in March of 2024. First Guaranty pays interest monthly. The Note is
unsecured and ranks junior in right of payment to any senior indebtedness and obligations to general and secured creditors. The current Note is
scheduled to mature on March 28, 2034. The Note qualifies for treatment as Tier 2 capital for regulatory capital purposes.
At December 31, 2024, letters of credit issued by the FHLB totaling $455.7 million were outstanding and carried as off-balance sheet items, all
of which expire by 2029. At December 31, 2023, letters of credit issued by the FHLB totaling $513.3 million were outstanding and carried as off-
balance sheet items, all of which expire by 2024. The letters of credit are solely used for pledging towards public fund deposits. The FHLB has a
blanket lien on substantially all of the loans in First Guaranty's portfolio which is used to secure borrowing availability from the FHLB. First Guaranty
has obtained a subordination agreement from the FHLB on First Guaranty's farmland, agricultural, and commercial and industrial loans. These
loans are available to be pledged for additional reserve liquidity.
As of December 31, 2024 obligations on long-term advances from FHLB, senior long-term debt and junior subordinated debentures totaled
$194.9 million.
9 Decades of Commitment to Customer Service 83
The scheduled payments are as follows:
Note 12. Capital Requirements
First Guaranty and the Bank are subject to various regulatory capital requirements administered by federal and state banking agencies. Failure to
meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions that, if undertaken, could have
a direct material effect on First Guaranty's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt
corrective action, First Guaranty and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities
and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject
to qualitative judgments by the regulators about components, risk weightings and other factors.
Quantitative measures established by regulation to ensure capital adequacy require First Guaranty and the Bank to maintain minimum amounts
and ratios of total and Tier 1 capital to risk-weighted assets and of Tier 1 capital to average assets. Management believes, as of December 31, 2024
and 2023, that First Guaranty and the Bank met all capital adequacy requirements.
In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus
payments to management if the institution does not hold a "capital conservation buffer" consisting of 2.5% of common equity Tier 1 capital to risk-
weighted assets above the amount necessary to meet its minimum risk-based capital requirements. The Bank's capital conservation buffer was
4.11% at December 31, 2024. First Guaranty's capital conservation buffer was 3.04% at December 31, 2024.
As a result of the Economic Growth, Regulatory Relief, and Consumer Protection Act, the Federal Reserve Board has amended its small bank
holding company and savings and loan holding company policy statement to provide that holding companies with consolidated assets of less
than $3 billion that are (i) not engaged in significant nonbanking activities, (ii) do not conduct significant off-balance sheet activities, and (3) do
not have a material amount of SEC-registered debt or equity securities, other than trust preferred securities, that contribute to an organization's
complexity, are no longer subject to regulatory capital requirements, effective August 30, 2018. On January 1, 2024, First Guaranty ceased being
considered a "small bank holding company". Accordingly, both First Guaranty and the Bank are required to maintain specified ratios of capital to
risk-weighted assets.
In addition, as a result of the legislation, the federal banking agencies have developed a "Community Bank Leverage Ratio" (the ratio of a bank's
Tier 1 capital to average total consolidated assets) for financial institutions with assets of less than $10 billion. A "qualifying community bank" that
elects to be subject to this provision and exceeds this ratio will be deemed to be in compliance with all other capital and leverage requirements,
including the capital requirements to be considered "well capitalized" under Prompt Corrective Action statutes. The federal banking agencies may
consider a financial institution's risk profile when evaluating whether it qualifies as a community bank for purposes of the capital ratio requirement.
The federal banking agencies set the new Community Bank Leverage Ratio at 9%. A financial institution can elect to be subject to this new
definition. The new rule took effect on January 1, 2020. The Bank has not elected to follow the Community Bank Leverage Ratio.
Long-term Advances
from FHLB
Senior Long-term
Debts
Junior Subordinated
Debentures
(in thousands)
2025
$
-
$
4,031
$
-
2026
-
4,031
-
2027
135,000
4,031
-
2028
-
3,180
-
2029
-
-
-
2030 and thereafter
-
-
45,000
Subtotal
$
135,000
$
15,273
$
45,000
Debt issuance costs
-
(104)
(255)
Total
$
135,000
$
15,169
$
44,745
84 First Guaranty Bancshares, Inc. Annual Report 2024
At December 31, 2024, we satisfied the minimum regulatory capital requirements and were well capitalized within the meaning of federal
regulatory requirements.
Actual
Minimum Capital
Requirements
Minimum to be Well
Capitalized Under Action
Provisions
Amount
Ratio
Amount
Ratio
Amount
Ratio
(in thousands, except for %)
December 31, 2024
Total Risk-Based Capital:
Bank
$
342,634
12.11 %
$
226,395
8.00%
$
282,994
10.00%
Consolidated
$
332,125
11.73%
$
226,583
8.00%
$
283,229
10.00%
Tier 1 Capital:
Bank
$
311,413
11.00%
$
169,796
6.00%
$
226,395
8.00%
Consolidated
$
255,904
9.04%
$
169,937
6.00%
$
226,583
8.00%
Tier 1 Leverage Capital:
Bank
$
311,413
7.82%
$
159,319
4.00%
$
199,149
5.00%
Consolidated
$
255,904
6.42%
$
159,330
4.00%
$
199,162
5.00%
Common Equity Tier One Capital:
Bank
$
311,413
11.00%
$
127,347
4.50%
$
183,946
6.50%
Consolidated
$
222,846
7.87%
$
127,453
4.50%
$
184,099
6.50%
December 31, 2023
Total Risk-Based Capital:
Bank
$
330,944
11.20%
$
236,321
8.00%
$
295,402
10.00%
Consolidated
N/A
N/A
N/A
N/A
N/A
N/A
Tier 1 Capital:
Bank
$
304,553
10.31%
$
177,241
6.00%
$
236,321
8.00%
Consolidated
N/A
N/A
N/A
N/A
N/A
N/A
Tier 1 Leverage Capital:
Bank
$
304,553
8.94%
$
121,821
4.00%
$
152,277
5.00%
Consolidated
N/A
N/A
N/A
N/A
N/A
N/A
Common Equity Tier One Capital:
Bank
$
304,553
10.31%
$
132,931
4.50%
$
192,011
6.50%
Consolidated
N/A
N/A
N/A
N/A
N/A
N/A
Note 13. Dividend Restrictions
The Federal Reserve Bank ("FRB") has stated that, generally, a bank holding company should not maintain a rate of distributions to shareholders
unless its available net income has been sufficient to fully fund the distributions, and the prospective rate of earnings retention appears consistent
with the bank holding company's capital needs, asset quality and overall financial condition. As a Louisiana corporation, First Guaranty is restricted
under the Louisiana corporate law from paying dividends under certain conditions.
First Guaranty Bank may not pay dividends or distribute capital assets if it is in default on any assessment due to the FDIC. First Guaranty Bank is
also subject to regulations that impose minimum regulatory capital and minimum state law earnings requirements that affect the amount of cash
available for distribution. In addition, under the Louisiana Banking Law, dividends may not be paid if it would reduce the unimpaired surplus below
50% of outstanding capital stock in any year.
The Bank is restricted under applicable laws in the payment of dividends to an amount equal to current year earnings plus undistributed earnings
for the immediately preceding year, unless prior permission is received from the Commissioner of Financial Institutions for the State of Louisiana.
Dividends payable by the Bank in 2025 without permission will be limited to 2025 earnings plus the undistributed earnings of $8.1 million from
2024. In addition, our ability to pay dividends will continue to be subject, among other things, to certain regulatory guidance and/or restrictions.
9 Decades of Commitment to Customer Service 85
Accordingly, at January 1, 2025, $302.4 million of First Guaranty's equity in the net assets of the Bank was restricted. In addition, dividends paid
by the Bank to First Guaranty would be prohibited if the effect thereof would cause the Bank's capital to be reduced below applicable minimum
capital requirements.
Note 14. Related Party Transactions
In the normal course of business, First Guaranty and its subsidiary, First Guaranty Bank, have loans, deposits and other transactions with its
executive officers, directors, affiliates and certain business organizations and individuals with which such persons are associated. These transactions
are completed with terms no less favorable than current market rates. An analysis of the activity of loans made to such borrowers during the year
ended December 31, 2024 and 2023 follows:
December 31,
2024
2023
(in thousands)
Balance, beginning of year
$
55,885
$ 89,735
Net (Decrease) Increase
(7,872)
(33,850)
Balance, end of year
$
48,013
$
55,885
Unfunded commitments to First Guaranty and Bank directors and executive officers totaled $22.6 million and $19.6 million at December 31, 2024
and 2023, respectively. At December 31, 2024 First Guaranty and the Bank had deposits from directors and executives totaling $61.7 million. There
were no participations in loans purchased from affiliated financial institutions included in First Guaranty's loan portfolio in 2024 or 2023.
During the years ended 2024 and 2023, First Guaranty paid approximately $0.3 million, respectively, for printing services and supplies and office
furniture and equipment to Champion Industries, Inc., of which Mr. Marshall T. Reynolds, the Chairman of First Guaranty's Board of Directors, is
President, Chief Executive Officer, Chairman of the Board of Directors and a major shareholder of Champion.
On December 21, 2015, First Guaranty issued a $15.0 million subordinated note (the "2015 Note") to Edgar Ray Smith III, a director of First
Guaranty. The 2015 Note had a ten-year term (non-callable for first five years) and bore interest at a fixed annual rate of 4.0% for the first five years of
the term and then adjusted to a floating rate based on the Prime Rate as reported by the Wall Street Journal plus 75 basis points for the period of time
after the fifth year until redemption or maturity. On June 21, 2022, First Guaranty issued a $15.0 million subordinated note (the “2022 Note”) to Mr.
Smith, and used the proceeds of such issuance to redeem the 2015 Note in full. The 2022 Note has a ten-year term, maturing on June 21, 2032, is
non-callable for the first five years, and bears interest at a floating rate based on the Prime Rate as reported by the Wall Street Journal plus 75 basis
points. During the years ended 2024 and 2023, First Guaranty paid interest of $1.4 million and $1.2 million, respectively, under the 2022 Note.
On March 28, 2024, First Guaranty issued a $30.0 million subordinated note (the "2024 Note") to Smith & Tate Investment, L.L.C., a company
controlled by Edgar Ray Smith III, a director of First Guaranty. The 2024 Note has a ten-year term, maturing on March 28, 2034, is non-callable for
the first five years, and bears interest at a floating rate based on the Prime Rate as reported by the Wall Street Journal plus 75 basis points. During
the year ended 2024, First Guaranty paid interest of $1.9 million, under the 2024 Note.
During the years ended 2024 and 2023, First Guaranty paid approximately $63,000 and $0.1 million, respectively, for the purchase and maintenance
of First Guaranty's automobiles to subsidiaries of Hood Automotive Group, of which William K. Hood, a director of First Guaranty, is President.
During the years ended 2024 and 2023, First Guaranty paid approximately $9,300 and $0.7 million, respectively, for architectural services in relation
to bank branches to Gasaway Gasaway Bankston Architects, of which bank subsidiary board member Andrew B. Gasaway is part owner.
During the years ended 2024 and 2023, First Guaranty paid approximately $0.8 million, respectively, to Centurion Insurance, an insurance brokerage
agency, to bind coverage at market terms for property casualty insurance and health insurance. First Guaranty owns a 50% interest in Centurion and
accounts for this investment under the equity method.
Note 15. Employee Benefit Plans
First Guaranty has an employee savings plan to which employees, who meet certain service requirements, may defer 1% up to the IRS legal limit
of their base salaries, 6% of which may be matched up to 100%, at its sole discretion. Contributions to the savings plan were $0 and $80,000 in
2024 and 2023, respectively.
On May 19, 2022 the shareholders of First Guaranty adopted the First Guaranty Bank Equity Bonus Plan. The plan established an equity bonus
pool of 80,000 shares. All full time employees of First Guaranty are eligible to participate. In May of 2024, 29,293 shares were distributed to five
members of executive management. Grant date fair market value of the shares issued was $333,000. All shares were vested on the date of issuance.
In December 31, 2023, 44,341 shares were distributed to a total of 311 employees. Grant date fair market value of the shares issued was $750,000.
All shares were vested on the date of issuance.
86 First Guaranty Bancshares, Inc. Annual Report 2024
Note 16. Other Expenses
The following is a summary of the significant components of other noninterest expense:
December 31,
2024
2023
(in thousands, except for %)
Statutory tax rate
21.0%
21.0%
Federal income taxes at statutory rate
$
3,290
$
2,452
Tax exempt municipal income
(146)
(102)
Other
74
107
State tax expense
340
220
Total
$
3,558
$
$ 2,677
Years Ended December 31,
2024
2023
(in thousands, except share data)
Other noninterest expense:
Legal and professional fees
$
4,465
$
5,709
Data processing
1,555
2,100
ATM Fees
1,668
1,804
Marketing and public relations
1,240
1,927
Taxes - sales, capital and franchise
2,237
2,263
Operating supplies
336
778
Software expense and amortization
5,093
5,282
Travel and lodging
685
1,362
Telephone
424
382
Amortization of core deposits
696
696
Donations
267
595
Net costs from other real estate and repossessions
827
157
Regulatory assessment
4,688
3,136
Other
4,465
4,032
Total other noninterest expense
$
28,646
$
30,223
First Guaranty does not capitalize advertising costs. They are expensed as incurred and are included in other noninterest expense on the
Consolidated Statements of Income. Advertising expense was $0.4 million for 2024 and $1.0 million for 2023.
Note 17. Income Taxes
The following is a summary of the provision for income taxes included in the Consolidated Statements of Income:
December 31,
2024
2023
(in thousands)
Current
$
3,518
$
2,857
Deferred
40
(180)
Total
$
3,558
$
2,677
The difference between income taxes computed by applying the statutory federal income tax rate and the provision for income taxes in the financial
statements is reconciled as follows:
9 Decades of Commitment to Customer Service 87
December 31,
2024
2023
(in thousands)
Deferred tax assets:
Allowance for credit losses
$
7,596
$
7,101
Other real estate owned
-
18
Unrealized losses on available for sale securities
677
416
Unrealized losses on available for sale securities transferred to held to maturity
2,743
3,029
Net operating loss
822
914
Other
277
473
Gross deferred tax assets
12,115
11,951
Deferred tax liabilities:
Depreciation and amortization
(2,058)
(1,871)
Core deposit intangibles
(622)
(768)
Discount on purchased loans
(118)
(180)
Other
(1,367)
(927)
Gross deferred tax liabilities
(4,165)
(3,746)
Net deferred tax assets (liabilities)
$
7,950
$
8,205
First Guaranty determined that the net deferred tax asset at December 31, 2024 and 2023 was more likely than not to be realized based on an
assessment of all available positive and negative evidence, and therefore no valuation allowance was recorded.
Net operating loss carryforwards for income tax purposes were $3.9 million and $4.4 million as of December 31, 2024 and 2023, respectively.
The carryforwards were acquired in 2017 in the Premier acquisition and expire from 2027 to 2034, and will be utilized subject to annual Internal
Revenue Code Section 382 limitations.
ASC 740-10, Income Taxes, clarifies the accounting for uncertainty in income taxes and prescribes a recognition threshold and measurement
attribute for the consolidated financial statements recognition and measurement of a tax position taken or expected to be taken in a tax return.
First Guaranty does not believe it has any unrecognized tax benefits included in its consolidated financial statements. First Guaranty has not had
any settlements in the current period with taxing authorities, nor has it recognized tax benefits as a result of a lapse of the applicable statute of
limitations. First Guaranty recognizes interest and penalties accrued related to unrecognized tax benefits, if applicable, in noninterest expense.
During the years ended December 31, 2024 and 2023, First Guaranty did not recognize any interest or penalties in its consolidated financial
statements, nor has it recorded an accrued liability for interest or penalty payments.
Note 18. Commitments and Contingencies
Off-balance sheet commitments
First Guaranty is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its
customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit and
standby and commercial letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the
amount recognized in the consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of the involvement
in particular classes of financial instruments.
The exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and
standby and commercial letters of credit is represented by the contractual notional amount of those instruments. The same credit policies are used
in making commitments and conditional obligations as it does for balance sheet instruments. Unless otherwise noted, collateral or other security
is not required to support financial instruments with credit risk.
Deferred taxes are recorded based upon differences between the financial statement and tax basis of assets and liabilities, and available tax
credit carry forwards. Temporary differences between the financial statement and tax values of assets and liabilities give rise to deferred taxes.
The significant components of deferred taxes classified in First Guaranty's Consolidated Balance Sheets at December 31, 2024 and 2023 are as
follows:
88 First Guaranty Bancshares, Inc. Annual Report 2024
December 31,
2024
2023
(in thousands)
Contract Amount
Commitments to Extend Credit
$
134,178
$
304,218
Unfunded Commitments under lines of credit
$
186,006
$
214,546
Commercial and Standby letters of credit
$
13,576
$
13,971
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since commitments may expire
without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Each customer's creditworthiness
is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on Management's
credit evaluation of the counterpart. Collateral requirements vary but may include accounts receivable, inventory, property, plant and equipment,
residential real estate and commercial properties.
Standby and commercial letters of credit are conditional commitments to guarantee the performance of a customer to a third party. These
guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar
transactions. The majority of these guarantees are short-term, one year or less; however, some guarantees extend for up to three years. The credit
risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities. Collateral requirements are the same as
on-balance sheet instruments and commitments to extend credit.
There were no losses incurred on off-balance sheet commitments in 2024 or 2023. In accordance with ASC 326, the Bank has recorded an
Allowance for Credit Losses on unfunded lending commitments of $1.2 million and $2.8 million at December 31, 2024 and 2023, respectively.
Note 19. Leases
First Guaranty’s primary leasing activities relate to certain real estate leases of a portion of the main office, certain branches, and certain ATM
locations. These leases have all been designated as operating leases. First Guaranty does not lease equipment under operating leases, and does
not have leases designated as financing leases.
On June 28, 2024 First Guaranty sold three properties owned by it, two stand-alone branches and a portion of the headquarters building which
also contains a branch, to a partnership owned by certain directors of First Guaranty. The aggregate purchase price was approximately $14.7
million. All of the properties are located in Louisiana.
First Guaranty concurrently entered into absolute net lease agreements with the partnership under which First Guaranty will lease each of the
properties. Each of the lease agreements has an initial term of 15 years with specified renewal options. Annual payments due under the leases
total approximately $1.3 million. The sale-leaseback transaction resulted in a pre-tax gain of approximately $13.3 million.
First Guaranty recorded operating right-of-use ("ROU") assets and corresponding lease liabilities of $11.5 million and $11.5 million, respectively.
The discount rate was based on First Guaranty's estimated borrowing costs based on the lease term.
Information concerning First Guaranty’s leases is as follows:
Year Ended
December 31,2024
Year Ended
December 31,2023
Weighted-average lease term (in years)
14.3
4.6
Weighted-average discount rate
7.9%
2.9%
First Guaranty’s operating lease ROU assets were $11.6 million and $0.3 million at December 31, 2024 and December 31, 2023, respectively, and
the related operating lease liabilities were $11.6 million and $0.3 million, respectively. The ROU asset is included in Other Assets on the balance
sheet, and the related operating lease liabilities are included in Other liabilities.
Operating lease expense, including short-term leases, is included in occupancy expense in the amount of $1.1 million and $0.5 million for the
years ending December 31, 2024 and 2023, respectively. Lease expense for lease payments is recognized on a straight-line basis over the lease
term. Cash payment for amounts included in the measurement of lease liabilities of $0.8 million and $0.1 million were included in operating cash
flows for the respective years.
Set forth below is a summary of the notional amounts of the financial instruments with off-balance sheet risk at December 31, 2024 and December
31, 2023.
9 Decades of Commitment to Customer Service 89
Note 20. Fair Value Measurements
The fair value of a financial instrument is the current amount that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs
in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability.
Valuation techniques use certain inputs to arrive at fair value. Inputs to valuation techniques are the assumptions that market participants would
use in pricing the asset or liability. They may be observable or unobservable. First Guaranty uses a fair value hierarchy for valuation inputs that
gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair
value hierarchy is as follows:
Level 1 Inputs – Unadjusted quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to
access at the measurement date.
Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.
These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities
in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities,
prepayment speeds or credit risks) or inputs that are derived principally from or corroborated by market data by correlation or other means.
Level 3 Inputs – Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity's own assumptions about the
assumptions that market participants would use in pricing the assets or liabilities.
A description of the valuation methodologies used for instruments measured at fair value follows, as well as the classification of such instruments
within the valuation hierarchy.
Securities available for sale. Securities are classified within Level 1 where quoted market prices are available in an active market. Inputs include
securities that have quoted prices in active markets for identical assets. If quoted market prices are unavailable, fair value is estimated using
quoted prices of securities with similar characteristics, at which point the securities would be classified within Level 2 of the hierarchy. Securities
classified Level 3 as of December 31, 2024 includes corporate debt and municipal securities.
Loans evaluated individually. Fair value is measured by either the fair value of the collateral if the loan is collateral dependent (Level 2 or Level 3),
or the present value of expected future cash flows, discounted at the loan's effective interest rate (Level 3). Fair value of the collateral is determined
by appraisals or by independent valuation.
Other real estate owned. Properties are recorded at the balance of the loan or at estimated fair value less estimated selling costs, whichever is
less, at the date acquired. Fair values of other real estate owned ("OREO") at December 31, 2024 and 2023 are determined by sales agreement or
appraisal, and costs to sell are based on estimation per the terms and conditions of the sales agreement or amounts commonly used in real estate
transactions. Inputs include appraisal values or recent sales activity for similar assets in the property's market; thus OREO measured at fair value
would be classified within either Level 2 or Level 3 of the hierarchy.
The following table reports minimum lease payments under non-cancelable operating leases at December 31, 2024:
(in thousands)
2025
$
1,406
2026
1,406
2027
1,406
2028
1,351
2029
1,307
Thereafter
12,797
Total Lease Payments
19,673
Less: interest
(8,034)
Present value of lease liabilities
$
11,639
90 First Guaranty Bancshares, Inc. Annual Report 2024
December 31,
2024
2023
(in thousands)
Available for Sale Securities Fair Value Measurements Using:
Level 1: Quoted Prices in Active Markets For Identical Assets
$
147,780
$
49,830
Level 2: Significant Other Observable Inputs
127,222
23,172
Level 3: Significant Unobservable Inputs
6,095
10,483
Securities available for sale measured at fair value
$
281,097
$
83,485
Certain non-financial assets and non-financial liabilities are measured at fair value on a non-recurring basis including assets and liabilities related
to reporting units measured at fair value in the testing of goodwill impairment, as well as intangible assets and other non-financial long-lived assets
measured at fair value for impairment assessment.
The following table summarizes financial assets measured at fair value on a recurring basis as of December 31, 2024 and 2023, segregated by
the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:
The following table reconciles assets measured at fair value on a recurring basis using unobservable inputs (Level 3):
Level 3 Changes
December 31,
2024
2023
(in thousands)
Balance, beginning of year
$
10,483
$
$ 11,102
Total gains or losses (realized/unrealized):
Included in earnings
-
-
Included in other comprehensive income
230
(38 )
Purchases, sales, issuances and settlements, net
(4,618)
(581 )
Transfers in and/or out of Level 3
-
-
Balance as of end of year
$
6,095
$
$ 10,483
There were no gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held
as of December 31, 2024.
First Guaranty's valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of
future fair values. While Management believes the methodologies used are appropriate and consistent with other market participants, the use of
different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value.
The change in Level 1 securities available for sale from December 31, 2023 to December 31, 2024 was due to a net increase in Treasury bills of
$98.0 million. There were no transfers between Level 1 and 2 securities available for sale from December 31, 2023 to December 31, 2024. There
were no transfers between Level 2 and Level 3 from December 31, 2023 to December 31, 2024.
9 Decades of Commitment to Customer Service 91
The following table measures financial assets and financial liabilities measured at fair value on a non-recurring basis as of December 31, 2024 and
December 31, 2023, segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value:
December 31,
2024
2023
(in thousands)
Fair Value Measurements Using: Loan Individually Evaluated for Impairment
Level 1: Quoted Prices in Active Markets For Identical Assets
$
-
$
-
Level 2: Significant Other Observable Inputs
-
-
Level 3: Significant Unobservable Inputs
50,449
8,083
Individually evaluated loans measured at fair value
$
50,449
$
8,083
Fair Value Measurements Using: Other Real Estate Owned
Level 1: Quoted Prices in Active Markets For Identical Assets
$
-
$
-
Level 2: Significant Other Observable Inputs
319
1,250
Level 3: Significant Unobservable Inputs
-
-
Other real estate owned measured at fair value
$
319
$
1,250
ASC 825-10 provides First Guaranty with an option to report selected financial assets and liabilities at fair value. The fair value option established
by this statement permits First Guaranty to choose to measure eligible items at fair value at specified election dates and report unrealized gains
and losses on items for which the fair value option has been elected in earnings at each reporting date subsequent to implementation.
First Guaranty has chosen not to elect the fair value option for any items that are not already required to be measured at fair value in accordance
with accounting principles generally accepted in the United States.
Note 21. Financial Instruments
Fair value estimates are generally subjective in nature and are dependent upon a number of significant assumptions associated with each
instrument or group of similar instruments, including estimates of discount rates, risks associated with specific financial instruments, estimates of
future cash flows and relevant available market information. Fair value information is intended to represent an estimate of an amount at which a
financial instrument could be exchanged in a current transaction between a willing buyer and seller engaging in an exchange transaction. However,
since there are no established trading markets for a significant portion of First Guaranty's financial instruments, First Guaranty may not be able
to immediately settle financial instruments; as such, the fair values are not necessarily indicative of the amounts that could be realized through
immediate settlement. In addition, the majority of the financial instruments, such as loans and deposits, are held to maturity and are realized or
paid according to the contractual agreement with the customer.
Quoted market prices are used to estimate fair values when available. However, due to the nature of the financial instruments, in many instances
quoted market prices are not available. Accordingly, estimated fair values have been estimated based on other valuation techniques, such as
discounting estimated future cash flows using a rate commensurate with the risks involved or other acceptable methods. Fair values are estimated
without regard to any premium or discount that may result from concentrations of ownership of financial instruments, possible income tax
ramifications or estimated transaction costs. The fair value estimates are subjective in nature and involve matters of significant judgment and,
therefore, cannot be determined with precision. Fair values are also estimated at a specific point in time and are based on interest rates and other
assumptions at that date. As events change the assumptions underlying these estimates, the fair values of financial instruments will change.
Disclosure of fair values is not required for certain items such as lease financing, investments accounted for under the equity method of accounting,
obligations of pension and other postretirement benefits, premises and equipment, other real estate, prepaid expenses, the value of long-term
relationships with depositors (core deposit intangibles) and other customer relationships, other intangible assets and income tax assets and
liabilities. Fair value estimates are presented for existing on- and off-balance sheet financial instruments without attempting to estimate the value
of anticipated future business and the value of assets and liabilities that are not considered financial instruments. In addition, the tax ramifications
related to the realization of the unrealized gains and losses have not been considered in the estimates. Accordingly, the aggregate fair value
amounts presented do not purport to represent and should not be considered representative of the underlying market or franchise value of First
Guaranty.
Because the standard permits many alternative calculation techniques and because numerous assumptions have been used to estimate the fair
values, reasonable comparison of the fair value information with other financial institutions' fair value information cannot necessarily be made. The
methods and assumptions used to estimate the fair values of financial instruments are as follows:
Cash and due from banks, interest-bearing deposits with banks, federal funds sold and federal funds purchased.
These items are generally short-term and the carrying amounts reported in the consolidated balance sheets are a reasonable estimation of the fair
values.
92 First Guaranty Bancshares, Inc. Annual Report 2024
Investment Securities.
Fair values are principally based on quoted market prices. If quoted market prices are not available, fair values are based on quoted market prices
of comparable instruments or the use of discounted cash flow analyses.
Loans Held for Sale.
Fair values of mortgage loans held for sale are based on commitments on hand from investors or prevailing market prices. These loans are
classified within level 3 of the fair value hierarchy.
Loans, net.
Market values are computed present values using net present value formulas. The present value is the sum of the present value of all projected
cash flows on an item at a specified discount rate. The discount rate is set as an appropriate rate index, plus or minus an appropriate spread. These
loans are classified within level 3 of the fair value hierarchy.
Loan individually evaluated for impairment.
Fair value is measured by either the fair value of the collateral if the loan is collateral dependent (Level 2 or Level 3), or the present value of
expected future cash flows, discounted at the loan's effective interest rate (Level 3). Fair value of the collateral is determined by appraisals or by
independent valuation.
Cash Surrender of BOLI.
The cash surrender value of BOLI approximates fair value.
Accrued interest receivable.
The carrying amount of accrued interest receivable approximates its fair value.
Deposits.
The fair value of customer deposits, excluding certificates of deposit, is the amount payable on demand. Market values of certificates of deposit are
actually computed present values using net present value formulas. The present value is the sum of the present value of all projected cash flows
on an item at a specified discount rate. The discount rate is set as an appropriate rate index, plus or minus an appropriate spread. Deposits are
classified within level 3 of the fair value hierarchy.
Accrued interest payable.
The carrying amount of accrued interest payable approximates its fair value.
Borrowings.
The carrying amount of federal funds purchased and other short-term borrowings approximate their fair values. The fair value of First Guaranty's
long-term borrowings is computed using net present value formulas. The present value is the sum of the present value of all projected cash flows
on an item at a specified discount rate. The discount rate is set as an appropriate rate index, plus or minus an appropriate spread. Borrowings are
classified within level 3 of the fair value hierarchy.
Other Unrecognized Financial Instruments.
The fair value of commitments to extend credit is estimated using the fees charged to enter into similar legally binding agreements, taking into
account the remaining terms of the agreements and customers' credit ratings. For fixed-rate loan commitments, fair value also considers the
difference between current levels of interest rates and the committed rates. The fair values of letters of credit are based on fees charged for similar
agreements or on estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date. At December
31, 2024 and 2023 the fair value of guarantees under commercial and standby letters of credit was not material.
9 Decades of Commitment to Customer Service 93
The carrying amounts and estimated fair values of financial instruments at December 31, 2024 were as follows:
Fair Value Measurements at December 31, 2024 Using
Carrying
Amount
Level 1
Level 2
Level 3
Total
(in thousands)
Assets
Cash and due from banks
$
563,778
$
563,778
$
-
$
-
$
563,778
Federal funds sold
430
430
-
-
430
Securities, available for sale
281,097
147,780
127,222
6,095
281,097
Securities, held for maturity
321,622
-
251,458
-
251,458
Loans, net
2,658,969
-
-
2,508,440
2,508,440
Cash surrender value of BOLI
6,012
-
-
6,012
6,012
Accrued interest receivable
14,850
-
-
14,850
14,850
Liabilities
Deposits
$ 3,476,260
$
-
$
-
$ 3,475,411
$ 3,475,411
Short-term advances from Federal Home Loan Bank
-
-
-
-
-
Short-term borrowings
-
-
-
-
-
Repurchase agreements
7,009
-
-
7,005
7,005
Accrued interest payable
20,437
-
-
20,437
20,437
Long-Term advances from Federal Home Loan Bank
135,000
-
-
134,977
134,977
Senior long-term debt
15,169
-
-
15,274
15,274
Junior subordinated debentures
44,745
-
-
45,000
45,000
94 First Guaranty Bancshares, Inc. Annual Report 2024
Fair Value Measurements at December 31, 2023 Using
Carrying
Amount
Level 1
Level 2
Level 3
Total
(in thousands)
Assets
Cash and due from banks
$
286,114
$
286,114
$
-
$
-
$
286,114
Federal funds sold
341
341
-
-
341
Securities, available for sale
83,485
49,830
23,172
10,483
83,485
Securities, held for maturity
320,638
-
253,584
-
253,584
Loans, net
2,717,782
-
-
2,581,979
2,581,979
Cash surrender value of BOLI
5,861
-
-
5,861
5,861
Accrued interest receivable
15,713
-
-
15,713
15,713
Liabilities
Deposits
$ 3,009,094
$
-
$
-
$ 3,001,498
3,001,498
Short-term advances from Federal Home Loan Bank
50,000
-
-
50,000
50,000
Short-term borrowings
10,000
-
-
10,000
10,000
Repurchase agreements
6,297
-
-
6,285
6,285
Accrued interest payable
11,807
-
-
11,807
11,807
Long-Term advances from Federal Home Loan Bank
155,000
-
-
152,299
152,299
Senior long-term debt
39,099
-
-
39,304
39,304
Junior subordinated debentures
15,000
-
-
15,000
15,000
There is no material difference between the contract amount and the estimated fair value of off-balance sheet items that are primarily comprised
of short-term unfunded loan commitments that are generally at market prices.
The carrying amounts and estimated fair values of financial instruments at December 31, 2023 were as follows:
9 Decades of Commitment to Customer Service 95
Note 22. Concentrations of Credit and Other Risks
First Guaranty monitors loan portfolio concentrations by region, collateral type, loan type, and industry on a monthly basis and has established
maximum thresholds as a percentage of its capital to ensure that the desired mix and diversification of its loan portfolio is achieved. First Guaranty
is compliant with the established thresholds as of December 31, 2024. Personal, commercial and residential loans are granted to customers, most
of who reside in northern and southern areas of Louisiana. Although First Guaranty has a diversified loan portfolio, significant portions of the loans
are collateralized by real estate located in Tangipahoa Parish and surrounding parishes in Southeast Louisiana. Declines in the Louisiana economy
could result in lower real estate values which could, under certain circumstances, result in losses to First Guaranty.
The distribution of commitments to extend credit approximates the distribution of loans outstanding. Commercial and standby letters of credit were
granted primarily to commercial borrowers.
Approximately 30.1% of First Guaranty's deposits are derived from local governmental agencies at December 31, 2024. These governmental
depositing authorities are generally long-term customers. A number of the depositing authorities are under contractual obligation to maintain their
operating funds exclusively with First Guaranty. In most cases, First Guaranty is required to pledge securities or letters of credit issued by the
Federal Home Loan Bank to the depositing authorities to collateralize their deposits. Under certain circumstances, the withdrawal of all of, or a
significant portion of, the deposits of one or more of the depositing authorities may result in a temporary reduction in liquidity, depending primarily
on the maturities and/or classifications of the securities pledged against such deposits and the ability to replace such deposits with either new
deposits or other borrowings. Public fund deposits totaled $1.0 billion at December 31, 2024.
Note 23. Litigation
First Guaranty is subject to various legal proceedings in the normal course of its business. First Guaranty assesses its liabilities and contingencies
in connection with outstanding legal proceedings. Where it is probable that First Guaranty will incur a loss and the amount of the loss can be
reasonably estimated, First Guaranty records a liability in its consolidated financial statements. First Guaranty does not record a loss if the loss
is not probable or the amount of the loss is not estimable. First Guaranty Bank is a defendant in a lawsuit alleging fault for a loss of funds by a
customer related to fraud by a third party with a possible loss range of $0.0 million to $1.5 million. The Bank denies the allegations and intends
to vigorously defend against this lawsuit, which is in early stages and no trial date has been set. No accrued liability has been recorded related to
this lawsuit. First Guaranty settled a case in the third quarter of 2021 for $1.1 million. A receivable for $0.9 million was recorded for recovery by
a claim against First Guaranty's insurer. During the second quarter of 2024, First Guaranty received $0.5 million of the $0.9 million receivable.
The remaining $0.4 million was written off. In the opinion of management, neither First Guaranty nor First Guaranty Bank is currently involved in
such legal proceedings, either individually or in the aggregate, that the resolution is expected to have a material adverse effect on First Guaranty’s
consolidated results of operations, financial condition, or cash flows. However, one or more unfavorable outcomes in these ordinary claims or
litigation against First Guaranty or First Guaranty Bank could have a material adverse effect for the period in which they are resolved. In addition,
regardless of their merits or ultimate outcomes, such matters are costly, divert management’s attention, and may materially and adversely affect
the reputation of First Guaranty and First Guaranty Bank, even if resolved favorably.
96 First Guaranty Bancshares, Inc. Annual Report 2024
First Guaranty Bancshares, Inc.
Condensed Balance Sheets
December 31,
2024
2023
(in thousands)
Assets
Cash
$
2,541
$
8,955
Investment in bank subsidiary
310,558
302,327
Other assets
2,707
2,952
Total Assets
$
315,806
$
314,234
Liabilities and Shareholders' Equity
Short-term debt
-
10,000
Senior long-term debt
15,169
39,099
Junior subordinated debentures
44,745
15,000
Other liabilities
843
504
Total Liabilities
60,757
64,603
Shareholders' Equity
255,049
249,631
Total Liabilities and Shareholders' Equity
$
315,806
$
314,234
Note 24. Condensed Parent Company Information
The following condensed financial information reflects the accounts and transactions of First Guaranty Bancshares, Inc. for the dates indicated:
9 Decades of Commitment to Customer Service 97
First Guaranty Bancshares, Inc.
Condensed Statements of Income
December 31,
2024
2023
(in thousands)
Operating Income
Dividends received from bank subsidiary
$
9,330
$
10,579
Net gains on sale of equity securities
-
-
Other income
655
638
Total operating income
9,985
11,217
Operating Expenses
Interest expense
5,748
4,532
Salaries & Benefits
205
313
Other expenses
1,076
2,365
Total operating expenses
7,029
7,210
Income before income tax benefit and increase in equity in undistributed earnings of subsidiary
2,956
4,007
Income tax benefit
1,352
1,273
Income before increase in equity in undistributed earnings of subsidiary
4,308
5,280
Increase in equity in undistributed earnings of subsidiary
8,140
3,939
Net Income
$
12,448
$
9,219
98 First Guaranty Bancshares, Inc. Annual Report 2024
Item 9 - Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A - Contracts and Procedures
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of First Guaranty's
management, including its Chief Executive Officer (Principal Executive Officer) and its Chief Financial Officer (Principal Financial Officer), of the
effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based on that
evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that these disclosure controls and procedures were effective.
For further information, see "Management's annual report on internal control over financial reporting" below. There was no change in First
Guaranty's internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that occurred during
the quarter ended December 31, 2024, that has materially affected, or is reasonably likely to materially affect, First Guaranty's internal control
over financial reporting.
First Guaranty Bancshares, Inc.
Condensed Statements of Cash Flows
December 31,
2024
2023
(in thousands)
Cash flows from operating activities:
Net income
$
12,448
$
9,219
Adjustments to reconcile net income to net cash provided by operating activities:
Increase in equity in undistributed earnings of subsidiary
(8,140)
(3,939)
Depreciation and amortization
-
24
Net change in other liabilities
484
(296)
Net change in other assets
245
(580)
Net cash provided by operating activities
5,037
4,428
Cash flows from investing activities:
Proceeds from sales of equity securities
-
-
Funds invested in equity securities
-
-
Funds invested in bank subsidiary
-
(17,000)
Net cash used in investing activities
-
(17,000)
Cash flows from financing activities:
Net (decrease) increase in short-term borrowings
(10,000)
(10,000)
Proceeds from long-term borrowings, net of costs
29,700
40,097
Repayment of long-term debt
(24,030)
(22,946)
Net proceeds from issuance of common stock
-
20,000
Subsidiary payment for stock grants issued
334
750
Dividends paid
(7,455)
(9,698)
Net cash (used in) provided by financing activities
(11,451)
18,203
Net (decrease) increase in cash and cash equivalents
(6,414 )
5,631
Cash and cash equivalents at the beginning of the period
8,955
3,324
Cash and cash equivalents at the end of the period
$
2,541
$
8,955
9 Decades of Commitment to Customer Service 99
Management's Annual Report on Internal Control over Financial Reporting
The Management of First Guaranty Bancshares, Inc. has prepared the consolidated financial statements and other information in our Annual
Report in accordance with accounting principles generally accepted in the United States of America and is responsible for its accuracy. The
financial statements necessarily include amounts that are based on Management's best estimates and judgments. In meeting its responsibility,
Management relies on internal accounting and related control systems. The internal control systems are designed to ensure that transactions are
properly authorized and recorded in our financial records and to safeguard our assets from material loss or misuse. Such assurance cannot be
absolute because of inherent limitations in any internal control system.
Management is responsible for establishing and maintaining the adequate internal control over financial reporting, as such term is defined in the
Exchange Act Rules 13 – 15(f). Under the supervision and with the participation of Management, including our principal executive officer and
principal financial officer, we conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in
Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. This section
relates to Management's evaluation of internal control over financial reporting including controls over the preparation of the schedules equivalent
to the basic financial statements and compliance with laws and regulations. Our evaluation included a review of the documentation of controls,
evaluations of the design of the internal control system and tests of the effectiveness of internal controls.
Based on our evaluation under the framework in Internal Control – Integrated Framework, Management concluded that internal control over
financial reporting was effective as of December 31, 2024.
First Guaranty's independent registered public accounting firm has also issued an attestation report, which expresses an unqualified opinion on
the effectiveness of First Guaranty's internal control over financial reporting as of December 31, 2024.
Item 9B - Other Information
(a) None
(b) During the three months ended December 31, 2024, no First Guaranty director or officer adopted or terminated a "Rule 10b5-1 trading
arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in item 408(a) of Regulation S-K.
Item 9C - Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
Item 5 - Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities
Shares of our common stock are traded on the Nasdaq Global Market under the symbol "FGBI". As of December 31, 2024, there were approximately
1,600 holders of record of our common stock.
The depositary shares underlying our Series A Preferred Stock are traded on the Nasdaq Global Market under the symbol “FGBIP”.
Our common and preferred shareholders are entitled to receive dividends when, and if, declared by the Board of Directors, out of funds legally
available for dividends. We have paid quarterly cash dividends on our common stock for each of the last 126 quarters dating back to the third
quarter of 1993. The Board of Directors intends to continue to pay regular quarterly cash dividends on both our common and preferred stock.
The ability to pay dividends in the future will depend on our earnings and financial condition, liquidity and capital requirements, regulatory
restrictions, the general economic and regulatory climate and ability to service any equity or debt obligations senior to common stock. There are
legal restrictions on the ability of First Guaranty Bank to pay cash dividends to First Guaranty Bancshares, Inc. Under federal and state law, we
are required to maintain certain surplus and capital levels and may not distribute dividends in cash or in kind, if after such distribution we would
fall below such levels. Specifically, an insured depository institution is prohibited from making any capital distribution to its shareholders, including
by way of dividend, if after making such distribution, the depository institution fails to meet the required minimum level for any relevant capital
measure including the risk-based capital adequacy and leverage standards.
Additionally, under the Louisiana Business Corporation Act, First Guaranty Bancshares, Inc. is prohibited from paying any cash dividends to
shareholders if, after the payment of such dividend First Guaranty Bancshares would not be able to pay its debts as they became due in the usual
course of business or its total assets would be less than its total liabilities or where net assets are less than the liquidation value of shares that have
a preferential right to participate in First Guaranty Bancshares, Inc.'s assets in the event First Guaranty Bancshares, Inc. were to be liquidated.
First Guaranty Bancshares, Inc. did not repurchase any of its shares of common stock during 2024.
100 First Guaranty Bancshares, Inc. Annual Report 2024
9 Decades of Commitment to Customer Service 101
102 First Guaranty Bancshares, Inc. Annual Report 2024
www.fgb.net