First Guaranty Bancshares, Inc. reported a GAAP net loss of $5.8 million for the second quarter of 2025, a significant decrease from a net income of $7.2 million in Q2 2024. The loss per share was $0.50, underperforming analyst expectations. This decline was primarily due to a substantial provision for credit losses, which increased to $14.7 million from $6.8 million in the same period last year.
The company continued its strategic shift to reduce its overall loan portfolio, particularly in commercial real estate, with real estate secured loans dropping to $1.94 billion, comprising 80.1% of the total portfolio. Asset quality remained a central concern, as the allowance for credit losses increased to 2.36% of total loans, up from 1.29% at December 31, 2024. Non-performing loans constituted 4.96% of total loans, with six large loan relationships accounting for 75% of the nonperforming balance as of June 30, 2025.
First Guaranty implemented cost management measures, including staff reductions that saw total headcount decrease by 135 employees over the past year, from 495 to 360. Net interest income showed moderate growth, increasing to $22.2 million from $21.2 million in Q2 2024. The quarterly dividend was reduced to $0.01 per share from $0.16 in Q2 2024, a deliberate action to prioritize capital preservation during the restructuring. The company also completed a debt-to-equity conversion and a private placement of new shares to improve regulatory capital metrics.
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