On July 23, 2024, First Guaranty Bancshares Inc (FGBI, Financial) released its 8-K filing announcing key developments and financial results for the second quarter and six months ending June 30, 2024. First Guaranty Bancshares Inc provides personalized commercial banking services to its customers in Louisiana through several banking facilities. The company’s principal business activities include attracting deposits and investing them in securities and lending activities to serve the credit needs of its customer base.
Performance Overview
First Guaranty Bancshares Inc (FGBI, Financial) reported a net income of $7.2 million for Q2 2024, a significant increase from $2.7 million in Q2 2023, marking a 169.1% year-over-year growth. The earnings per share (EPS) for the quarter stood at $0.53, falling short of the analyst estimate of $1.03. The company’s revenue for the quarter was $21.2 million, slightly below the estimated $22.11 million.
Strategic Changes and Financial Achievements
First Guaranty Bancshares Inc (FGBI, Financial) is initiating strategic changes to slow asset growth, increase capital position, and utilize automation and technological advances. The company has reduced its workforce by 71 positions, approximately 15% of its total workforce, which is expected to reduce noninterest expenses by approximately $12.0 million pre-tax annually.
The company’s Board of Directors anticipates paying a quarterly cash dividend of $0.08 per share for the third and fourth quarters of 2024. Additionally, a sale-leaseback transaction of two branches and part of the headquarters building resulted in a pre-tax gain of approximately $13.2 million.
Financial Highlights
Key financial metrics for the second quarter and six months ended June 30, 2024, include:
| Metric | Q2 2024 | Q2 2023 | 6M 2024 | 6M 2023 |
|---|---|---|---|---|
| Net Income | $7.2 million | $2.7 million | $9.5 million | $6.1 million |
| Earnings Per Share | $0.53 | $0.19 | $0.67 | $0.46 |
| Total Assets | $3.6 billion | $3.6 billion | $3.6 billion | $3.6 billion |
| Total Loans | $2.8 billion | $2.7 billion | $2.8 billion | $2.7 billion |
| Total Deposits | $3.0 billion | $3.0 billion | $3.0 billion | $3.0 billion |
Income Statement and Balance Sheet Insights
Net interest income for Q2 2024 was $21.2 million, compared to $20.9 million in Q2 2023. The provision for credit losses increased significantly to $6.8 million from $0.5 million in the same period last year. Noninterest income saw a substantial rise to $15.5 million from $2.8 million, primarily due to gains on the sale of assets.
Total assets increased by $62.8 million to $3.6 billion as of June 30, 2024. Total loans grew by $84.6 million to $2.8 billion, while total deposits rose by $34.4 million to $3.0 billion. Shareholders' equity increased to $255.1 million from $249.6 million at the end of 2023.
Key Metrics and Analysis
The net interest margin for Q2 2024 was 2.48%, a decrease from 2.74% in Q2 2023, attributed to increased market interest rates. The allowance for credit losses was 1.07% of total loans, down from 1.13% at the end of 2023. Nonaccrual loans increased to $62.3 million, primarily due to one commercial real estate relationship.
Return on average assets for Q2 2024 was 0.81%, up from 0.34% in Q2 2023. Return on average common equity was 12.16%, compared to 4.19% in the same period last year. Book value per common share increased to $17.76 from $17.36 at the end of 2023.
Commentary
“First Guaranty Bancshares Inc (FGBI, Financial) has demonstrated robust financial performance in Q2 2024, significantly increasing net income and EPS. The strategic changes and cost-saving measures are expected to further strengthen the company’s financial position,” said Eric J. Dosch, CFO.
For more detailed financial information, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from First Guaranty Bancshares Inc for further details.
