Company: FGBI
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001408534-25-000070
Chunk: 50

Company: First Guaranty Bancshares, Inc.
Filing Date: 2025-08-18
Form: 10-Q
Item: Part I, Item 1
Chunk 50
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 the loan portfolio was based on a floating rate tied to the prime rate, Secured Overnight Financing Rate ("SOFR"), or Treasury rates as of June 30, 2025. 46.2% of the loan portfolio is scheduled to mature within five years from June 30, 2025. 

Commercial real estate (“CRE”) has received increased regulatory scrutiny in recent quarters due to valuation concerns associated with the increase in market interest rates and the impact of the COVID-19 pandemic. First Guaranty has utilized enhanced risk management practices for CRE concentration analysis for several years. First Guaranty Bank’s credit department conducts an annual stress test for CRE related loans that is presented to the Bank’s board of directors. The stress test analyzes the impact of changes in interest rates and cash flow on loan customers with credit exposures of $2.5 million or greater. First Guaranty generally requires personal guarantees on CRE loans. First Guaranty generally approves CRE loans with loan-to-values of 80% or less. First Guaranty also generally requires for construction related CRE loans that the borrower provides their equity contribution upfront before loan funds are advanced. First Guaranty modified its business strategy in 2024 to reduce exposure to commercial real estate related loans, particularly loans secured by non-owner occupied properties and construction loans for commercial real estate. First Guaranty continued this strategy in 2025.  

First Guaranty has diversified its CRE portfolio across both industries and geographic location. The following is a summary of the largest CRE related loans associated with hotel and motels, office properties, apartment complexes, healthcare related properties, and properties under construction as of June 30, 2025. First Guaranty generally does not finance multi-story office buildings in major metropolitan areas. The largest CRE loan secured by a hotel or motel totaled $19.7 million. The property is a flagged hotel located in Texas. The largest CRE loan secured by an office related property totaled $21.1 million and is located in West Virginia. The largest CRE loan secured by an apartment complex totaled $40.9 million and is located in Louisiana. The largest healthcare related loan is a $27.5 million property secured by an independent living center located in Louisiana. This healthcare loan is in non-accrual status. The largest CRE loan under construction totaled $32.0 million for an apartment complex and is secured by a property located in Texas.

The increase in classified assets at June 30, 2025 as compared to December 31, 2024