First Guaranty Plunges to $45M Loss on Soaring Credit Provisions

TL;DR

**FGBIP is bleeding cash with a massive credit loss provision and goodwill hit; get out now before it gets worse.**

AI Summary

First Guaranty Bancshares, Inc. (FGBIP) reported a significant net loss of $45.003 million for the three months ended September 30, 2025, a sharp decline from a net income of $1.927 million in the same period of 2024. For the nine months ended September 30, 2025, the company posted a net loss of $58.472 million, compared to a net income of $11.438 million in 2024. This substantial loss was primarily driven by a massive increase in the provision for credit losses, which surged to $47.933 million for the quarter and $79.091 million for the nine-month period, up from $4.904 million and $14.013 million respectively in the prior year. The company also recognized a goodwill impairment charge of $12.900 million during the quarter. Total assets decreased to $3.797 billion from $3.973 billion at December 31, 2024, largely due to a reduction in net loans from $2.659 billion to $2.194 billion. Cash and cash equivalents, however, increased significantly to $754.183 million from $564.208 million. Total deposits also saw a decrease, falling to $3.355 billion from $3.476 billion.

Why It Matters

This 10-Q reveals a deeply concerning financial deterioration for First Guaranty Bancshares, marked by a dramatic increase in credit loss provisions and a goodwill impairment. For investors, the substantial net loss and reduction in common stock dividends from $0.08 to $0.01 per share signal significant capital erosion and potential future instability, making FGBIP a high-risk investment. Employees might face job insecurity as the bank grapples with profitability challenges. Customers could experience tighter lending standards or reduced services if the bank needs to conserve capital. In the broader market, this filing highlights the ongoing pressures on regional banks, particularly those with significant loan portfolios, in a challenging economic environment, potentially impacting competitive dynamics as stronger banks may gain market share.

Risk Assessment

Risk Level: high — The risk level is high due to a net loss of $45.003 million for the quarter and $58.472 million for the nine months ended September 30, 2025. This is primarily driven by a staggering $47.933 million provision for credit losses in the quarter, a nearly tenfold increase from $4.904 million in Q3 2024, and a $12.900 million goodwill impairment charge. These figures indicate significant asset quality deterioration and a substantial hit to profitability.

Analyst Insight

Investors should consider divesting FGBIP shares given the severe net losses, massive increase in credit loss provisions, and goodwill impairment. The significant reduction in common stock dividends from $0.08 to $0.01 per share further signals financial distress and a potential lack of confidence in future earnings. Reallocate capital to more stable financial institutions.

Financial Highlights

debt To Equity

16.18

revenue

$162,284,000

operating Margin

N/A

total Assets

$3,797,336,000

total Debt

$206,309,000

net Income

-$58,472,000

eps

-$3.81

gross Margin

N/A

cash Position

$754,183,000

revenue Growth

-0.9%

Revenue Breakdown

Key Numbers

• $45.003M — Net Loss (for the three months ended September 30, 2025, down from $1.927M net income in Q3 2024.)
• $79.091M — Provision for Credit Losses (for the nine months ended September 30, 2025, a significant increase from $14.013M in the prior year.)
• $12.900M — Goodwill Impairment (recognized in the three and nine months ended September 30, 2025.)
• $2.194B — Net Loans (as of September 30, 2025, decreased from $2.659B at December 31, 2024.)
• $3.797B — Total Assets (as of September 30, 2025, decreased from $3.973B at December 31, 2024.)
• $0.01 — Cash Dividends per Common Share (for Q3 2025, a sharp reduction from $0.08 in Q3 2024.)
• $58.003M — Unrealized Losses on HTM Securities (as of September 30, 2025, indicating interest rate risk.)
• 15,352,947 — Common Shares Outstanding (as of October 31, 2025, an increase from 12,504,717 at December 31, 2024, due to private placements and debt conversion.)

Key Players & Entities

• First Guaranty Bancshares, Inc. (company) — registrant
• First Guaranty Bank (company) — wholly owned subsidiary
• SEC (regulator) — filing authority
• $45.003 million (dollar_amount) — net loss for Q3 2025
• $58.472 million (dollar_amount) — net loss for nine months ended Sept 30, 2025
• $47.933 million (dollar_amount) — provision for credit losses for Q3 2025
• $12.900 million (dollar_amount) — goodwill impairment charge for Q3 2025
• $3.797 billion (dollar_amount) — total assets as of Sept 30, 2025
• $2.194 billion (dollar_amount) — net loans as of Sept 30, 2025
• $0.01 (dollar_amount) — cash dividends paid per common share for Q3 2025

FAQ

Risk Factors

• Increased Provision for Credit Losses [high — financial]: The provision for credit losses surged to $47.933 million for Q3 2025 and $79.091 million for the nine-month period, a substantial increase from $4.904 million and $14.013 million respectively in the prior year. This indicates a significant deterioration in loan portfolio quality or increased economic uncertainty.
• Goodwill Impairment Charge [high — financial]: A goodwill impairment charge of $12.900 million was recognized in the three and nine months ended September 30, 2025. This suggests that the carrying value of acquired assets is no longer supported by their expected future cash flows.
• Decline in Net Loans [medium — financial]: Net loans decreased from $2.659 billion at December 31, 2024, to $2.194 billion as of September 30, 2025. This reduction could stem from increased charge-offs, reduced lending activity, or a strategic shift in the loan portfolio.
• Decrease in Total Deposits [medium — financial]: Total deposits fell to $3.355 billion from $3.476 billion at December 31, 2024. This outflow of deposits could increase funding costs or liquidity pressures.
• Unrealized Losses on HTM Securities [medium — financial]: The company reported $58.003 million in unrealized losses on Held-to-Maturity (HTM) securities as of September 30, 2025. While these do not impact earnings directly, they represent significant interest rate risk and potential future losses if securities need to be sold.
• Reduced Cash Dividends [medium — financial]: Cash dividends per common share were reduced to $0.01 for Q3 2025 from $0.08 in Q3 2024. This signals potential concerns about future profitability and cash flow generation.
• Increased Common Shares Outstanding [low — financial]: Common shares outstanding increased from 12,504,717 at December 31, 2024, to 15,352,947 as of October 31, 2025, due to private placements and debt conversion. This dilutes existing shareholders' ownership.

Industry Context

The banking industry is currently navigating a complex environment characterized by higher interest rates and increased regulatory scrutiny. Regional banks, in particular, are facing challenges in managing deposit costs, loan growth, and asset quality. Competition remains intense, with a focus on digital transformation and customer retention.

Regulatory Implications

The significant increase in the provision for credit losses and the goodwill impairment charge may attract closer scrutiny from regulators regarding risk management practices and the valuation of assets. Compliance with capital adequacy ratios and liquidity requirements will be critical.

What Investors Should Do

1. Monitor the trend in provision for credit losses closely.
2. Analyze the drivers behind the decline in net loans and deposit outflows.
3. Evaluate the impact of unrealized losses on HTM securities.
4. Assess management's strategy for addressing asset quality and profitability.

Key Dates

• 2025-09-30: Quarter and Nine-Month Period End — Reported a net loss of $45.003 million for Q3 2025 and $58.472 million for the nine months, driven by a significant increase in credit loss provisions and a goodwill impairment charge.
• 2024-12-31: Year End — Total assets were $3.973 billion, net loans were $2.659 billion, and total deposits were $3.476 billion.
• 2024-09-30: Prior Year Quarter and Nine-Month Period End — Reported net income of $1.927 million for Q3 2024 and $11.438 million for the nine months, with significantly lower provisions for credit losses.

Glossary

Provision for Credit Losses

An expense recognized by financial institutions to cover potential losses from loans that may not be repaid. It is an estimate based on the expected credit losses in the loan portfolio. (A substantial increase in this provision ($47.933M for Q3 2025) is the primary driver of the company's net loss, indicating potential deterioration in loan quality.)

Goodwill Impairment

An accounting charge taken when the carrying value of goodwill on a company's balance sheet exceeds its fair value. Goodwill typically arises from acquisitions. (The $12.900 million charge signifies that the acquired assets are not performing as expected, impacting profitability.)

Held-to-Maturity (HTM) Securities

Investment securities that a company has the intent and ability to hold until their maturity date. Unrealized gains or losses on these securities are not recognized in earnings until maturity or sale. (The company has $58.003 million in unrealized losses on these securities, highlighting interest rate risk exposure.)

Net Loans

The total amount of loans issued by a bank, minus the allowance for credit losses and unearned income. It represents the net value of the bank's lending portfolio. (A significant decrease in net loans ($2.194B from $2.659B) suggests a contraction in the core lending business.)

Accumulated Other Comprehensive (Loss) Income

A component of shareholders' equity that includes unrealized gains and losses on certain investments (like available-for-sale securities) and foreign currency translation adjustments, which are not included in net income. (The negative balance of ($8.360 million) reflects unrealized losses on investment securities, impacting total equity.)

Year-Over-Year Comparison

Compared to the prior year, First Guaranty Bancshares, Inc. has experienced a dramatic shift from profitability to significant losses. For the nine months ended September 30, 2025, the company reported a net loss of $58.472 million, a stark contrast to the $11.438 million net income in the same period of 2024. This reversal is primarily attributed to a more than five-fold increase in the provision for credit losses, rising from $14.013 million to $79.091 million, and the recognition of a $12.900 million goodwill impairment charge. Total assets have also seen a decrease, while net loans have contracted significantly, indicating a challenging operating environment.

Key Financial Figures

• $1 — ange on which registered Common Stock, $1 par value FGBI The Nasdaq Stock Market

Filing Documents

• fgbi-20250930.htm (10-Q) — 3153KB
• fgbi-ex31109302025.htm (EX-31.1) — 9KB
• fgbi-ex31209302025.htm (EX-31.2) — 9KB
• fgbi-ex32109302025.htm (EX-32.1) — 4KB
• fgbi-ex32209302025.htm (EX-32.2) — 4KB
• fgbi-20250930_g1.jpg (GRAPHIC) — 26KB
• 0001408534-25-000092.txt ( ) — 15002KB
• fgbi-20250930.xsd (EX-101.SCH) — 49KB
• fgbi-20250930_cal.xml (EX-101.CAL) — 132KB
• fgbi-20250930_def.xml (EX-101.DEF) — 363KB
• fgbi-20250930_lab.xml (EX-101.LAB) — 752KB
• fgbi-20250930_pre.xml (EX-101.PRE) — 554KB
• fgbi-20250930_htm.xml (XML) — 3814KB

Financial Statements (unaudited)

Financial Statements (unaudited) 4 Consolidated Balance Sheets 4 Consolidated Statements of Income 5 Consolidated Statements of Comprehensive Income 6 Consolidated Statements of Shareholders' Equity 7 Consolidated Statements of Cash Flows 9 Notes to Unaudited Consolidated Financial Statements 11 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 35 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 59 Item 4.

Controls and Procedures

Controls and Procedures 61 Part II. Other Information 62 Item 1.

Legal Proceedings

Legal Proceedings 62 Item 1A.

Risk Factors

Risk Factors 62 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 62 Item 3. Defaults Upon Senior Securities 62 Item 4. Mine Safety Disclosures 62 Item 5. Other Information 62 Item 6. Exhibits 64

Signatures

Signatures 65 -3-

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Consolidated Financial Statements

Item 1. Consolidated Financial Statements FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands, except share data) September 30, 2025 December 31, 2024 Assets Cash and cash equivalents: Cash and due from banks $ 753,629 $ 563,778 Federal funds sold 554 430 Cash and cash equivalents 754,183 564,208 Interest-earning time deposits with banks 250 250 Investment securities: Available for sale, at fair value (cost of $ 372,873 and $ 284,321 , respectively) 374,335 281,097 Held to maturity, at cost and net of allowance for credit losses of $ 150 (estimated fair value of $ 264,566 and $ 251,458 , respectively) 322,413 321,622 Investment securities 696,748 602,719 Federal Home Loan Bank stock, at cost 10,079 9,706 Loans, net of unearned income 2,279,741 2,693,780 Less: allowance for credit losses 85,713 34,811 Net loans 2,194,028 2,658,969 Premises and equipment, net 59,979 67,789 Goodwill — 12,900 Intangible assets, net 2,847 3,474 Other real estate, net 12,050 319 Accrued interest receivable 14,776 14,850 Other assets 52,396 37,544 Total Assets $ 3,797,336 $ 3,972,728 Liabilities and Shareholders' Equity Deposits: Noninterest-bearing demand $ 396,906 $ 404,056 Interest-bearing demand 1,390,219 1,387,068 Savings 215,077 234,444 Time 1,352,695 1,450,692 Total deposits 3,354,897 3,476,260 Repurchase agreements 7,117 7,009 Accrued interest payable 16,333 20,437 Long-term advances from Federal Home Loan Bank 135,000 135,000 Senior long-term debt 14,196 15,169 Junior subordinated debentures 29,790 44,745 Other liabilities 18,928 19,059 Total Liabilities 3,576,261 3,717,679 Shareholders' Equity Preferred stock, Series A - $ 1,000 par value - 100,000 shares authorized Non-cumulative perpetual; 34,500 shares issued and outstanding 33,058 33,058 Common stock, $ 1 par value - 100,600,000 shares authorized; 15,352,947 and 12,504,717 shares issued and outstanding 15,353 12,505 Surp

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles. The consolidated financial statements and the footnotes of First Guaranty Bancshares, Inc. ("First Guaranty") thereto should be read in conjunction with the audited consolidated financial statements and note disclosures for First Guaranty previously filed with the Securities and Exchange Commission in First Guaranty's Annual Report on Form 10-K for the year ended December 31, 2024. The consolidated financial statements include the accounts of First Guaranty Bancshares, Inc. and its wholly owned subsidiary First Guaranty Bank (the "Bank"). All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary for a fair presentation of the consolidated financial statements. Those adjustments are of a normal recurring nature. The results of operations at September 30, 2025 and for the three and nine month periods ended September 30, 2025 and 2024 are not necessarily indicative of the results expected for the full year or any other interim period. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. 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 fo

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