Company: FGBI
Filing Date: 2025-11-17
Form Type: 10-Q
Source: 0001408534-25-000092
Chunk: 108

Company: First Guaranty Bancshares, Inc.
Filing Date: 2025-11-17
Form: 10-Q
Item: Part I, Item 1
Chunk 108
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 period in 2024. The increase in the provision was primarily impacted by the $39.8 million reserve associated with one commercial lease relationship. First Guaranty has a $52.0 million credit exposure associated with commercial lease financing to entities related to an auto parts manufacturer that declared Chapter 11 bankruptcy during the third quarter. The credit exposure consists of one $17.2 million commercial lease, which was past due on its payments and placed on nonaccrual as of September 30, 2025, and three commercial leases totaling $34.8 million that were current on payments and remained on accrual status as of September 30, 2025. First Guaranty has downgraded all four lease credits to substandard and impaired status. A specific reserve of $17.2 million has been established for the nonaccrual credit and a specific reserve of $22.6 million has been established for the three lease credits that remain on accrual status. The commercial leases are serviced by a third party. Total charge-offs were $21.3 million for the three months ended September 30, 2025 and $2.6 million for the same period in 2024. Charge-offs for the three months ended September 30, 2025 were concentrated with two commercial real estate credits charge-offs of $9.4 million on an independent living center located in Louisiana and $10.4 million on an apartment complex located in Texas. Partially offsetting these charge-offs were recoveries that totaled $0.3 million for the three months ended September 30, 2025 and $0.2 million for the same period in 2024. 

For the nine months ended September 30, 2025, the provision for credit losses was $79.1 million compared to $14.0 million for the same period in 2024. The $79.1 million provision included a $0.5 million negative provision for credit losses related to unfunded commitments. The increase in the provision was primarily impacted by the $39.8 million reserve associated with one commercial lease relationship, as discussed above. Total charge-offs were $29.4 million for the nine months ended September 30, 2025 and $13.7 million for the same period in 2024. Charge-offs for the nine months ended September 30, 2025 were concentrated in one commercial and industrial loan, one multifamily loan, one non-farm non-residential loan, a one-to-four family loan,