First Guaranty Bancshares, Inc. reported a net loss of $7.3 million for the second quarter of 2025, a significant decline from a net income of $7.2 million during the same period in 2024. For the first half of 2025, the company recorded a net loss of $13.5 million, compared to a net income of $9.5 million in the prior year. The losses were primarily attributed to a substantial provision for credit losses of $16.6 million in the second quarter, up from $6.8 million in the same quarter last year. This increase reflects heightened reserves on individually evaluated loans and adverse trends in the loan portfolio. The loss per common share for the quarter was $(0.61), a decrease from earnings of $0.53 per share in the previous year.
Total assets for First Guaranty decreased slightly to $4.0 billion as of June 30, 2025, down from $4.0 billion at the end of 2024. The decline was driven by a reduction in net loans, which fell to $2.41 billion, a decrease of $283.3 million or 10.5% from the previous year-end. This reduction is part of the company's strategy to mitigate risk in its loan portfolio, particularly in commercial real estate. Total deposits remained relatively stable at $3.48 billion, reflecting a slight decrease of $5.1 million from December 31, 2024. The company’s allowance for credit losses increased to $58.9 million, representing 2.44% of total loans, compared to $34.8 million or 1.29% at the end of 2024.
Operationally, First Guaranty has focused on reducing non-performing assets, which decreased by $6.8 million compared to the previous quarter. The company successfully managed to reduce non-accrual loans through a workout structure associated with a commercial real estate loan. Additionally, the bank sold an $8.8 million non-accrual loan in July 2025. The company’s non-accrual loans totaled $119.2 million as of June 30, 2025, an increase from $108.5 million at the end of 2024, but a decrease from $130 million at the end of the first quarter of 2025.
In terms of strategic developments, First Guaranty has made significant changes to its capital structure, including the conversion of $15 million in subordinated debt into common stock and the issuance of additional shares through a private placement. These actions contributed to an increase in shareholders' equity to $263.1 million as of June 30, 2025, up from $255 million at the end of 2024. The company has also implemented cost-cutting measures, resulting in a reduction of noninterest expenses by $3.3 million compared to the same quarter last year, aligning with its strategic plan to enhance operational efficiency.
Looking ahead, First Guaranty aims to continue its strategy of reducing exposure to commercial real estate loans while managing its loan portfolio's risk profile. The company anticipates further adjustments in its lending practices and a focus on maintaining adequate liquidity and capital ratios to support future growth. The management remains cautious about the economic environment and its potential impact on the bank's performance, particularly regarding credit quality and interest rate fluctuations.
About First Guaranty Bancshares, Inc.
First Guaranty Bancshares, Inc. is a Louisiana-based financial holding company operating First Guaranty Bank, which provides personalized commercial banking services. Its core activities include attracting deposits, offering various loan products (real estate, commercial, industrial, agricultural, consumer), and investing in securities. Serving Louisiana, Texas, Kentucky, and West Virginia markets, it emphasizes community focus, digital banking, and controlled asset growth. The company competes through personal service, technology, and strategic regional expansion.
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