Company: FGBI
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001408534-25-000036
Chunk: 54

Company: First Guaranty Bancshares, Inc.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 1
Chunk 54
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 on historical loss experience for the past three years adjusted for qualitative factors described above. An unallocated component is maintained to cover uncertainties that could affect the estimate of probable losses.

The balance in the allowance for credit losses is principally influenced by the provision for loan losses, recoveries, and by net loan loss experience. Additions to the allowance are charged to the provision for credit losses. Losses are charged to the allowance as incurred and recoveries on losses previously charged to the allowance are credited to the allowance at the time recovery is collected.

The allowance for credit losses on loans was $43.0 million, or 1.71% of total loans, and 32.2% of nonperforming loans at March 31, 2025.

Comparing March 31, 2025 to December 31, 2024, there were changes within the specific components of the allowance balance. 

A provision for credit losses of $14.5 million was made during the three months ended March 31, 2025 and $2.3 million for the same period in 2024. The $14.5 million provision made in 2025 included a $0.3 million negative provision for credit losses related to unfunded commitments. First Guaranty's unfunded commitments declined during the first three months of 2025 which resulted in a reduced liability. The provisions made were taken to provide for current credit losses and to maintain the allowance proportionate to risks inherent in the loan portfolio. 

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The loan portfolio factors in the first three months of 2025 that primarily affected the allocation of the allowance included the following:

•Construction and land development loans decreased during the first three months of 2025 due to the sale of loans. The allowance increase related to this portfolio was due to an increase in the allowance for loans individually evaluated of $2.6 million.

•One-to-four family residential loans decreased $6.0 million during the first three months of 2025. The allowance increase was due to changes in the qualitative analysis of the portfolio.

•Multifamily loans decreased $20.6 million during the first three months of 2025. The allowance increase related to this portfolio was due to changes in the qualitative analysis of the portfolio, and a $1.3 million increase in the allowance for loan individually evaluated.

•Non-farm non-residential loans decreased by $42.7 million during the first three months of 2025. The allowance increase related to this portfolio was due to changes