Company: FGBI
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001408534-25-000036
Chunk: 60

Company: First Guaranty Bancshares, Inc.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 1
Chunk 60
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 as compared to the prior year period was primarily the result of the provision to the credit allowance.  The increase in the provision for credit losses was related to changes within the portfolio, loan sales and charge-offs experienced in the first quarter. This was partially offset by an increase in interest income, an increase in noninterest income, and a decrease in noninterest expense. Loan interest income decreased primarily due to the decrease in First Guaranty's loan portfolio. Securities interest income increased due to an increase in the average balance and average yield of the investment portfolio. Noninterest income increased primarily due to an increase in service charges, commisions and fees. Noninterest expense decreased primarily due to decreased personnel expenses, travel and lodging, other real estate and repossession expense, sales taxes, and marketing expense. Loss per common share for the three months ended March 31, 2025 was $(0.54) per common share, $0.68 per common share from $0.14 per common share for the three months ended March 31, 2024. 

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. 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.

Three months