First Guaranty Bancshares, Inc. - FORM 8-K - EX-99.1 - PRESS RELEASE DATED FEBRUARY 5, 2018

Attached files

file	filename
EX-99.2 - DEFINITIONS - First Guaranty Bancshares, Inc.	ex99-2.htm
8-K - 8-K - First Guaranty Bancshares, Inc.	fgb8k_02052018.htm

EXHIBIT 99.1

FEBRUARY 5, 2018

NEWS FOR IMMEDIATE RELEASE

CONTACT: ERIC J. DOSCH, CFO

985.375.0308

First Guaranty Bancshares, Inc. Announces Fourth Quarter 2017 Results

Hammond, Louisiana, February 5, 2018 – First Guaranty Bancshares, Inc. ("First Guaranty") (NASDAQ: FGBI), the holding company for First Guaranty Bank, announced its unaudited financial results for the quarter and year ending December 31, 2017.

The fourth quarter of 2017 and the entire year of 2017 brought continued progress toward First Guaranty Bancshares, Inc. goals of a fortress balance sheet and enhanced shareholder value. For the quarter ending December 31, 2017, core income totaled $3,504,000 compared to $3,134,000 for the quarter ending December 31, 2016. For the year ending December 31, 2017, core income totaled $12,672,000 an increase of $1,048,000 over the year ending December 31, 2016. Core income, the nuts and bolts of our business continues to increase.

In the fourth quarter of 2017, we declared and issued to our shareholders a 10% stock dividend. The earn back on our December 2015 10% stock dividend had been achieved in May 2017. At the end of the fourth quarter of 2017, we declared and issued to our shareholders our 98^th consecutive quarterly cash dividend. A total of $5,210,000 in dividends were paid to shareholders in 2017, bringing the total in dividends paid to shareholders since 1993 to $66,896,000.

In 2017 the total shareholders equity in First Guaranty Bancshares, Inc. increased by $19,634,000 or 16% to $143,983,000 from $124,349,000. Book value per share increased from $14.86 to $16.35. In 2017, we enhanced shareholder value both through the payment of dividends and the increased book value or balance sheet strength.

While the all-important core income and shareholder's equity have increased over the last year, securities gains decreased by $2.4 million year over year, expenses related to the Premier Bancshares, Inc. acquisition totaled $1.4 million, and a balance sheet adjustment of $0.9 million, resulting from the federal tax cut, reduced gross after tax income from $14,093,000 for the year ending December 31, 2016 to $11,751,000 for the year ending December 31, 2017. With the earnings already being generated by the Premier Bancshares, Inc. acquisition and with the tax savings which will be generated from the Federal tax cut, this reduction should be quickly overcome in 2018.

In the fourth quarter, core loans grew a net of $51.2 million. Loan interest income was $2,841,000 higher than the fourth quarter of 2016, a 24% increase. Net interest income was up by $4.8 million over 2016. Noninterest income, excluding securities gains, was increased by 23% over 2016. As of December 31, 2017, total loans had increased by $200 million, an increase of 21%, from the total loan level as of December 31, 2016.

At the same time loans have been increasing, the non-performing assets of First Guaranty Bancshares, Inc. declined 34% from December 31, 2016 to December 31, 2017, as they dropped to $14.7 million from $22.2 million.

The progress in 2017 was tremendous. We look forward to 2018 and even greater progress toward a fortress balance sheet and shareholder enhancement.

Thank you for your continued support.

Sincerely,

Alton B. Lewis

President and CEO

First Guaranty, Bancshares, Inc.

About First Guaranty

First Guaranty, a Louisiana-based company, has approximately $1.8 billion in assets as of December 31, 2017 and provides personalized commercial banking services through 27 banking facilities located across Louisiana and Texas. For more information, visit www.fgb.net.

Certain statements contained herein are "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward looking statements may be identified by reference to a future period or periods, or by the use of forward looking terminology, such as "may," "will," "believe," "expect," "estimate," "anticipate," "continue," or similar terms or variations on those terms, or the negative of those terms. Forward looking statements are subject to numerous risks and uncertainties, as described in our SEC filings, including, but not limited to, those related to the real estate and economic environment, particularly in the market areas in which First Guaranty operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity.

First Guaranty wishes to caution readers not to place undue reliance on any such forward looking statements, which speak only as of the date made. First Guaranty wishes to advise readers that the factors listed above could affect First Guaranty's financial performance and could cause First Guaranty's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. First Guaranty does not undertake and specifically declines any obligation to publicly release the results of any revisions, which may be made to any forward looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share data)	December 31, 2017			December 31, 2016
Assets
Cash and cash equivalents:
Cash and due from banks	$	37,205		$	17,840
Federal funds sold		823			271
Cash and cash equivalents		38,028			18,111

Investment securities:
Available for sale, at fair value		381,785			397,473
Held to maturity, at cost (estimated fair value of $118,557 and $99,906 respectively)		120,121			101,863
Investment securities		501,906			499,336

Federal Home Loan Bank stock, at cost		2,351			1,816
Loans held for sale		1,308			-

Loans, net of unearned income		1,149,014			948,921
Less: allowance for loan losses		9,225			11,114
Net loans		1,139,789			937,807

Premises and equipment, net		38,020			23,519
Goodwill		3,472			1,999
Intangible assets, net		4,424			1,056
Other real estate, net		1,281			359
Accrued interest receivable		7,982			7,039
Other assets		11,869			9,904
Total Assets	$	1,750,430		$	1,500,946

Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing demand	$	251,617		$	231,094
Interest-bearing demand		611,677			479,810
Savings		104,661			97,280
Time		581,331			517,997
Total deposits		1,549,286			1,326,181

Short-term borrowings		15,500			6,500
Accrued interest payable		2,488			1,931
Senior long-term debt		22,774			22,100
Junior subordinated debentures		14,664			14,630
Other liabilities		1,735			5,255
Total Liabilities		1,606,447			1,376,597

Shareholders' Equity
Common stock:¹
$1 par value - authorized 100,600,000 shares; issued 8,807,175 and 8,369,424 shares		8,807			8,369
Surplus		92,268			81,000
Retained earnings		44,464			38,979
Accumulated other comprehensive income (loss)		(1,556	)		(3,999	)
Total Shareholders' Equity		143,983			124,349
Total Liabilities and Shareholders' Equity	$	1,750,430		$	1,500,946

See Notes to Consolidated Financial Statements

¹All share amounts have been restated to reflect the ten percent stock dividend paid December 14, 2017 to shareholders of record as of December 8, 2017.

FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (unaudited)

	Three Months Ended December 31,				Year Ended Ended December 31,
(in thousands, except share data)	2017		2016		2017		2016
Interest Income:
Loans (including fees)	$	14,587	$	11,746	$	54,034	$	45,495
Deposits with other banks		36		14		178		69
Securities (including FHLB stock)		3,307		2,955		13,325		12,968
Federal funds sold		1		-		9		-
Total Interest Income		17,931		14,715		67,546		58,532

Interest Expense:
Demand deposits		1,624		731		5,526		2,633
Savings deposits		54		26		201		80
Time deposits		2,033		1,413		7,112		5,954
Borrowings		411		347		1,554		1,473
Total Interest Expense		4,122		2,517		14,393		10,140

Net Interest Income		13,809		12,198		53,153		48,392
Less: Provision for loan losses		758		727		3,822		3,705
Net Interest Income after Provision for Loan Losses		13,051		11,471		49,331		44,687

Noninterest Income:
Service charges, commissions and fees		738		549		2,589		2,388
ATM and debit card fees		522		493		1,986		1,859
Net gains on securities		401		43		1,397		3,799
Net gains on sale of loans		184		5		311		14
Other		539		339		2,057		1,395
Total Noninterest Income		2,384		1,429		8,340		9,455

Noninterest Expense:
Salaries and employee benefits		5,424		4,166		20,113		16,577
Occupancy and equipment expense		1,231		1,146		4,505		4,242
Other		3,706		2,859		13,903		12,066
Total Noninterest Expense		10,361		8,171		38,521		32,885

Income Before Income Taxes		5,074		4,729		19,150		21,257
Less: Provision for income taxes		2,568		1,567		7,399		7,164
Net Income	$	2,506	$	3,162	$	11,751	$	14,093

Per Common Share:¹
Earnings	$	0.28	$	0.38	$	1.37	$	1.68
Cash dividends paid	$	0.16	$	0.15	$	0.60	$	0.58

Weighted Average Common Shares Outstanding		8,807,175		8,369,424		8,608,088		8,369,424

See Notes to Consolidated Financial Statements
¹All share amounts have been restated to reflect the ten percent stock dividend paid December 14, 2017 to shareholders of record as of December 8, 2017.

FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)

	Three Months Ended December 31, 2017							Three Months Ended December 31, 2016
(in thousands except for %)	Average Balance		Interest		Yield/Rate (5)			Average Balance		Interest		Yield/Rate (5)
Assets
Interest-earning assets:
Interest-earning deposits with banks	$	20,812	$	36		0.69	%	$	20,649	$	14		0.27	%
Securities (including FHLB stock)		492,412		3,307		2.66	%		477,838		2,955		2.46	%
Federal funds sold		892		1		0.44	%		250		-		-	%
Loans held for sale		2,352		38		6.41	%		-		-		-	%
Loans, net of unearned income		1,120,057		14,549		5.15	%		917,311		11,746		5.09	%
Total interest-earning assets		1,636,525	$	17,931		4.35	%		1,416,048	$	14,715		4.13	%

Noninterest-earning assets:
Cash and due from banks		11,054							7,700
Premises and equipment, net		37,180							22,923
Other assets		14,467							3,644
Total Assets	$	1,699,226						$	1,450,315

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Demand deposits	$	547,740	$	1,624		1.18	%	$	417,725	$	731		0.70	%
Savings deposits		105,490		54		0.20	%		95,042		26		0.10	%
Time deposits		601,311		2,033		1.34	%		524,334		1,413		1.07	%
Borrowings		42,730		411		3.82	%		43,443		347		3.18	%
Total interest-bearing liabilities		1,297,271	$	4,122		1.26	%		1,080,544	$	2,517		0.93	%

Noninterest-bearing liabilities:
Demand deposits		252,605							234,024
Other		5,729							7,411
Total Liabilities		1,555,605							1,321,979

Shareholders' equity		143,621							128,336
Total Liabilities and Shareholders' Equity	$	1,699,226						$	1,450,315
Net interest income			$	13,809						$	12,198

Net interest rate spread (1)						3.09	%						3.20	%
Net interest-earning assets (2)	$	339,254						$	335,504
Net interest margin (3), (4)						3.35	%						3.43	%

Average interest-earning assets to interest-bearing liabilities						126.15	%						131.05	%

(1)	Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(2)	Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
(3)	Net interest margin represents net interest income divided by average total interest-earning assets.
(4)	The tax adjusted net interest margin was 3.37% and 3.45% for the above periods ended December 31, 2017 and 2016 respectively. A 35% tax rate was used to calculate the effect on securities income from tax exempt securities.
(5)	Annualized.

FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)

	Year Ended December 31, 2017							Year Ended December 31, 2016
(in thousands except for %)	Average Balance		Interest		Yield/Rate			Average Balance		Interest		Yield/Rate
Assets
Interest-earning assets:
Interest-earning deposits with banks	$	23,913	$	178		0.74	%	$	20,857	$	69		0.33	%
Securities (including FHLB stock)		511,776		13,325		2.60	%		523,438		12,968		2.48	%
Federal funds sold		977		9		0.89	%		256		-		-	%
Loans held for sale		1,233		69		5.60	%		-		-		-	%
Loans, net of unearned income		1,056,519		53,965		5.11	%		881,387		45,495		5.16	%
Total interest-earning assets		1,594,418	$	67,546		4.23	%		1,425,938	$	58,532		4.10	%

Noninterest-earning assets:
Cash and due from banks		10,147							7,915
Premises and equipment, net		31,885							22,306
Other assets		9,488							3,800
Total Assets	$	1,645,938						$	1,459,959

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Demand deposits	$	539,399	$	5,526		1.02	%	$	415,410	$	2,633		0.63	%
Savings deposits		102,779		201		0.20	%		89,279		80		0.09	%
Time deposits		575,666		7,112		1.24	%		558,982		5,954		1.07	%
Borrowings		41,190		1,554		3.77	%		43,474		1,473		3.39	%
Total interest-bearing liabilities		1,259,034	$	14,393		1.14	%		1,107,145	$	10,140		0.92	%

Noninterest-bearing liabilities:
Demand deposits		244,949							221,634
Other		5,138							5,144
Total Liabilities		1,509,121							1,333,923

Shareholders' equity		136,817							126,036
Total Liabilities and Shareholders' Equity	$	1,645,938						$	1,459,959
Net interest income			$	53,153						$	48,392

Net interest rate spread (1)						3.09	%						3.18	%
Net interest-earning assets (2)	$	335,384						$	318,793
Net interest margin (3), (4)						3.33	%						3.39	%

Average interest-earning assets to interest-bearing liabilities						126.64	%						128.79	%

(1)	Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(2)	Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
(3)	Net interest margin represents net interest income divided by average total interest-earning assets.
(4)	The tax adjusted net interest margin was 3.36% and 3.42% for the above periods ended December 31, 2017 and 2016 respectively. A 35% tax rate was used to calculate the effect on securities income from tax exempt securities.

The following table summarizes the components of First Guaranty's loan portfolio as of December 31, 2017, September 30, 2017, June 30, 2017 and March 31, 2017:

	December 31, 2017						September 30, 2017						June 30, 2017						March 31, 2017
(in thousands except for %)	Balance			As % of Category			Balance			As % of Category			Balance			As % of Category			Balance			As % of Category
Real Estate:
Construction & land development	$	112,603			9.8	%	$	108,610			9.8	%	$	83,158			7.4	%	$	86,376			8.7	%
Farmland		25,691			2.2	%		29,345			2.6	%		23,710			2.1	%		23,348			2.3	%
1- 4 Family		158,733			13.8	%		158,564			14.3	%		160,928			14.4	%		139,665			14.0	%
Multifamily		16,840			1.4	%		17,089			1.5	%		15,195			1.4	%		12,440			1.3	%
Non-farm non-residential		540,231			46.9	%		508,210			45.6	%		509,776			45.6	%		436,217			43.8	%
Total Real Estate		854,098			74.1	%		821,818			73.8	%		792,767			70.9	%		698,046			70.1	%
Non-Real Estate:
Agricultural		21,514			1.9	%		29,109			2.6	%		28,673			2.6	%		23,178			2.3	%
Commercial and industrial		220,700			19.2	%		209,386			18.8	%		222,021			19.9	%		206,158			20.7	%
Consumer and other		55,185			4.8	%		53,606			4.8	%		73,431			6.6	%		69,090			6.9	%
Total Non-Real Estate		297,399			25.9	%		292,101			26.2	%		324,125			29.1	%		298,426			29.9	%
Total loans before unearned income		1,151,497			100.0	%		1,113,919			100.0	%		1,116,892			100.0	%		996,472			100.0	%
Unearned income		(2,483	)					(2,128	)					(2,108	)					(2,033	)
Total loans net of unearned income	$	1,149,014					$	1,111,791					$	1,114,784					$	994,439

The table below sets forth the amounts and categories of our nonperforming assets at the dates indicated.

(in thousands)	December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017
Nonaccrual loans:
Real Estate:
Construction and land development	$	371		$	376		$	386		$	399
Farmland		65			107			94			97
1 - 4 family residential		1,953			2,296			2,268			2,396
Multifamily		-			-			4,975			5,058
Non-farm non-residential		3,758			773			1,927			2,600
Total Real Estate		6,147			3,552			9,650			10,550
Non-Real Estate:
Agricultural		1,496			617			1,372			1,630
Commercial and industrial		4,826			6,081			8,031			8,078
Consumer and other		81			50			39			721
Total Non-Real Estate		6,403			6,748			9,442			10,429
Total nonaccrual loans		12,550			10,300			19,092			20,979

Loans 90 days and greater delinquent & accruing:
Real Estate:
Construction and land development		-			-			-			-
Farmland		-			-			-			-
1 - 4 family residential		-			47			58			50
Multifamily		-			-			-			-
Non-farm non-residential		-			-			-			-
Total Real Estate		-			47			58			50
Non-Real Estate:
Agricultural		41			362			-			-
Commercial and industrial		798			-			-			-
Consumer and other		-			-			1,018			-
Total Non-Real Estate		839			362			1,018			-
Total loans 90 days and greater delinquent & accruing		839			409			1,076			50

Total non-performing loans		13,389			10,709			20,168			21,029

Real Estate Owned:
Real Estate Loans:
Construction and land development		304			319			319			-
Farmland		-			-			-			-
1 - 4 family residential		23			23			146			43
Multifamily		-			-			-			-
Non-farm non-residential		954			954			269			196
Total Real Estate		1,281			1,296			734			239
Non-Real Estate Loans:
Agricultural		-			-			-			-
Commercial and industrial		-			-			-			-
Consumer and other		-			-			-			-
Total Non-Real Estate		-			-			-			-
Total Real Estate Owned		1,281			1,296			734			239

Total non-performing assets	$	14,670		$	12,005		$	20,902		$	21,268

Non-performing assets to total loans		1.28	%		1.08	%		1.87	%		2.14	%
Non-performing assets to total assets		0.84	%		0.71	%		1.21	%		1.35	%
Non-performing loans to total loans		1.17	%		0.96	%		1.81	%		2.11	%

Non-GAAP Financial Measures

Our accounting and reporting policies conform to accounting principles generally accepted in the United States, or GAAP, and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional metrics. Tangible book value per share and the ratio of tangible equity to tangible assets are not financial measures recognized under GAAP and, therefore, are considered non-GAAP financial measures.

Our management, banking regulators, many financial analysts and other investors use these non-GAAP financial measures to compare the capital adequacy of banking organizations with significant amounts of preferred equity and/or goodwill or other intangible assets, which typically stem from the use of the purchase accounting method of accounting for mergers and acquisitions. Tangible equity, tangible assets, tangible book value per share or related measures should not be considered in isolation or as a substitute for total shareholders' equity, total assets, book value per share or any other measure calculated in accordance with GAAP. Moreover, the manner in which we calculate tangible equity, tangible assets, tangible book value per share and any other related measures may differ from that of other companies reporting measures with similar names.

The following table reconciles, as of the dates set forth below, shareholders' equity (on a GAAP basis) to tangible equity and total assets (on a GAAP basis) to tangible assets and calculates our tangible book value per share.

	At December 31,
(in thousands except for share data and %)	2017			2016			2015			2014			2013
Tangible Common Equity
Total shareholders' equity	$	143,983		$	124,349		$	118,224		$	139,583		$	123,405
Adjustments:
Preferred		-			-			-			39,435			39,435
Goodwill		3,472			1,999			1,999			1,999			1,999
Acquisition intangibles		3,249			978			1,298			1,618			1,938
Tangible common equity	$	137,262		$	121,372		$	114,927		$	96,531		$	80,033
Common shares outstanding¹		8,807,175			8,369,424			8,369,424			7,611,397			7,611,397
Book value per common share¹	$	16.35		$	14.86		$	14.13		$	13.16		$	11.03
Tangible book value per common share¹	$	15.59		$	14.50		$	13.73		$	12.68		$	10.52
Tangible Assets
Total Assets	$	1,750,430		$	1,500,946		$	1,459,753		$	1,518,876		$	1,436,441
Adjustments:
Goodwill		3,472			1,999			1,999			1,999			1,999
Acquisition intangibles		3,249			978			1,298			1,618			1,938
Tangible Assets	$	1,743,709		$	1,497,969		$	1,456,456		$	1,515,259		$	1,432,504
Tangible common equity to tangible assets		7.87	%		8.10	%		7.89	%		6.37	%		5.59	%
¹All share amounts have been restated to reflect the ten percent stock dividend paid December 14, 2017 to shareholders of record as of December 8, 2017.

Attached files

First Guaranty Bancshares, Inc. Reports

Also read