First Guaranty Bancshares Reports Net Income Turnaround in Q2 2026

First Guaranty Bancshares, Inc. reported a significant turnaround in its financial performance for the second quarter and the first half of 2026, with net income of $3.4 million for the three months ended June 30, 2026, compared to a net loss of $7.3 million for the same period in 2025. For the six months ended June 30, 2026, the company recorded a net income of $6.2 million, a substantial improvement from a net loss of $13.5 million in the prior year. This positive shift is attributed primarily to a decrease in the provision for credit losses, which fell to $2.6 million in the second quarter from $16.6 million a year earlier.

Total assets decreased to $3.9 billion as of June 30, 2026, down from $4.1 billion at the end of 2025, largely due to a $304.6 million reduction in net loans, which totaled $1.8 billion. This decline in loans is part of a strategic shift initiated in July 2024 aimed at reducing risk in the balance sheet. Total deposits also decreased by $175.8 million, or 4.8%, to $3.5 billion, reflecting a decrease in interest-bearing demand deposits and time deposits. The company’s retained earnings increased to $18.7 million, up from $14.1 million at the end of 2025.

In terms of operational developments, First Guaranty completed the sale of its Texas operations, which included five branches and related assets, to Armstrong Bank on July 31, 2026. This transaction is expected to consist of approximately $234 million in deposits and $88 million in loans. Additionally, the company has consented to a regulatory Consent Order with the FDIC and the Louisiana Office of Financial Institutions, which mandates specific actions related to capital maintenance and credit administration.

The company’s allowance for credit losses was 1.94% of total loans as of June 30, 2026, down from 1.97% at the end of 2025. Nonaccrual loans decreased to $40.6 million, representing 2.30% of total loans, compared to $59.6 million, or 2.88%, at the end of the previous year. The company’s net interest income for the second quarter was $22.3 million, slightly up from $22.2 million in the same quarter of 2025, while the net interest margin increased to 2.37% from 2.34%.

Looking ahead, First Guaranty aims to continue its focus on risk management and compliance with the terms of the Consent Order. The company is also working to enhance its capital ratios and improve its operational efficiency. Management remains cautious about the economic environment and its potential impact on the bank's performance, particularly in light of the ongoing regulatory scrutiny and the need to maintain adequate liquidity and capital levels.