HAMMOND, La. - First Guaranty Bancshares, Inc. (NASDAQ: NASDAQ:FGBI), the parent company of First Guaranty Bank, has announced a strategic shift which includes a workforce reduction and a focus on capital growth and technological enhancements. The company reported a staff cut of 71 employees, representing about 15% of its workforce, as part of its cost-saving measures.
The affected employees will receive two months of salary, compensation for unused vacation, and healthcare coverage through September 30, 2024, along with the chance to apply for other bank positions. This move is expected to reduce annual pre-tax noninterest expenses by approximately $12 million, with a $2 million impact anticipated in the fourth quarter of 2024 and $3 million per quarter in 2025.
Additionally, the Board of Directors plans to pay a quarterly cash dividend of $0.08 per share for the latter half of 2024. The bank also completed a sale-leaseback transaction on June 28, 2024, for two branches and part of its headquarters, resulting in a pre-tax gain of about $13.2 million.
Financial highlights for the second quarter and first half of 2024 show an increase in total assets to $3.6 billion, with total loans rising by 3.1% to $2.8 billion. Total deposits grew by 1.1% to $3.0 billion. Net income for the quarter surged by 169.1% to $7.2 million, and earnings per share increased from $0.19 in the second quarter of 2023 to $0.53 in the same period in 2024.
The bank's net interest income remained stable at $43.2 million for the first half of the year, while the provision for credit losses rose to $9.1 million from $0.9 million in the previous year. The net interest margin declined due to rising market interest rates, which began in 2022.
First Guaranty faced challenges with nonaccrual loans, particularly a $36.9 million commercial real estate relationship. The bank also reported charge-offs totaling $8.8 million for the quarter, with significant amounts related to a restaurant supply business and a Main Street Lending Program loan.
Shareholders' equity increased slightly to $255.1 million, and the bank has maintained a consistent dividend payout, marking 124 consecutive quarters of dividend payments.
The information in this article is based on a press release statement from First Guaranty Bancshares (NYSE:GNTY), Inc.
InvestingPro Insights
As First Guaranty Bancshares, Inc. (NASDAQ: FGBI) navigates through strategic shifts and workforce adjustments, investors and stakeholders are keenly observing the company's financial health and market performance. Here are some critical insights based on real-time data from InvestingPro that add context to the bank's recent announcements.
InvestingPro Data reveals that First Guaranty Bancshares has a market capitalization of $123.8 million. Despite the challenges faced, the company has shown resilience with a strong return over the last month, as indicated by a 1 Month Price Total Return of 15.83%. Additionally, the bank's commitment to shareholder returns remains evident with a significant Dividend Yield of 6.29%, which is particularly noteworthy given the bank's history of maintaining dividend payments for 19 consecutive years.
InvestingPro Tips highlight that First Guaranty has been profitable over the last twelve months, and analysts predict the company will continue to be profitable this year. This aligns with the bank's recent report of a substantial increase in net income for the second quarter of 2024. While the bank suffers from weak gross profit margins, its strategic efforts, including technological enhancements and capital growth focus, may provide avenues to strengthen its financial position.
For those looking to delve deeper into First Guaranty's financial metrics and gain additional insights, InvestingPro offers a comprehensive suite of tools and analyses. There are several more InvestingPro Tips available, providing valuable guidance for informed investment decisions. To access these tips and take advantage of real-time data, visit https://www.investing.com/pro/FGBI and remember to use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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