Company: FGBI
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0001408534-25-000015
Chunk: 7

Company: First Guaranty Bancshares, Inc.
Filing Date: 2025-03-17
Form: 10-K
Item: Item 1
Chunk 7
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 create more efficiency and reduce redundant processes in order to achieve more productively with less expense.   

Expanded Balance Sheet Risk Management 

We increased on balance sheet liquidity during 2024 which lowered our loan to deposit ratio and improved First Guaranty's sensitivity to changes in market interest rates.  First Guaranty's balance sheet position has historically been liability sensitive which resulted in a reduction in net interest income and net interest margin during the significant rise in market interest rates in 2022 and 2023.  Our strategy during the last year has been to take measures to reduce First Guaranty's liability sensitivity position and move the balance sheet towards a more market neutral position over time.   

Our deposit strategy continues to focus on expanding our individual and business deposit bases while maintaining our public funds deposit program. During 2023 and 2024 we also expanded our use of select wholesale or brokered deposits in order to increase liquidity and manage sensitivity to market risk.  Our deposit strategy leverages off the market share dominance that we have in several of our markets, such as the Hammond MSA where we had a 46.5% deposit market share at June 30, 2024, placing us first overall. Our commercial and consumer lending teams focus on building business and individual deposits concurrent with loans. Our public funds department is dedicated to maintaining strong relationships with our well diversified base of public entities. We provide a variety of services to our public funds clients. Our public funds deposit program has provided us with a stable source of funding. We will continue to concentrate on keeping many of these funds under contract as we are often the fiscal agent for these governmental agencies which helps maintain this funding. 

Enhanced Credit Risk Management 

First Guaranty's non-performing assets increased during 2024.  We have taken proactive measures to address these non-performing assets and to reduce the level of non-performing assets. We have increased our allowance for credit losses. We expanded our internal annual loan review function and engaged additional external loan review during 2024. We increased internal credit standards and slowed the origination of new loans. We increased the risk weighted capital ratios during 2024 through growth in retained earnings and the allowance for credit losses, reduction in commitments for construction loans and by reducing total loan balances.  We plan to continue increasing capital and increasing the risk weighted capital ratio.  

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Lending Activities

We offer a broad range of loan and lease products with a variety of rates and terms throughout our market areas, including business loans to primarily small