Company: FGBI
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001408534-25-000036
Chunk: 66

Company: First Guaranty Bancshares, Inc.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 1
Chunk 66
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 represents net interest income divided by average total interest-earning assets.

(4)The tax adjusted net interest margin was 2.36% and 2.58% for the above periods ended March 31, 2025 and 2024, respectively. A 21% tax rate was used to calculate the effect on securities income from tax exempt securities for the above periods ended March 31, 2025 and 2024, respectively.

(5)Annualized.

(6)Includes loan fees of $1.6 million and $2.0 million for the three months ended March 31, 2025 and 2024, respectively. 

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        Provision for Credit Losses

A provision for credit losses is a charge to income in an amount that management believes is necessary to maintain an adequate allowance for credit losses. The allowance for loan losses is calculated under ASC 326 and is management's evaluation of expected credit losses over the life of the loans in the portfolio. The provision is based on management's regular evaluation of current economic conditions in our specific markets as well as regionally and nationally, changes in the character and size of the loan portfolio, underlying collateral values securing loans, and other factors which deserve recognition in estimating loan losses. Past events, current conditions, and reasonable forecasts, along with quantitative and qualitative adjustments, are used in calculating the allowance for credit losses. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available or as future events change.

For the three months ended March 31, 2025, the provision for credit losses was $14.5 million compared to $2.3 million for the same period in 2024. The $14.5 million provision included a $0.3 million negative provision for credit losses related to unfunded commitments. Total charge-offs were $6.9 million for the three months ended March 31, 2025 and $2.3 million for the same period in 2024. Charge-offs for the three months ended March 31, 2025 were concentrated in consumer auto and equipment secured loans, unsecured consumer loan and two construction and land development loans, both were subsequently sold during the first quarter of 2025. Partially offsetting these charge-offs were recoveries that totaled $0.2 million for the three months ended March 31, 2025 and $0.3 million for the same period in 2024. 

We believe that the allowance is adequate to cover