First Guaranty Bancshares (FGBI) 8-K First Guaranty Bancshares, Inc. Announce Fourth Quarter 2016 Results

EXHIBIT 99.1

FEBRUARY 2, 2017

NEWS FOR IMMEDIATE RELEASE

CONTACT: ERIC J. DOSCH, CFO

985.375.0308

First Guaranty Bancshares, Inc. Announce Fourth Quarter 2016 Results

Hammond, Louisiana, February 2, 2017 – First Guaranty Bancshares, Inc. (the "Company" or "First Guaranty") (NASDAQ: FGBI), the holding company for First Guaranty Bank, announced its unaudited financial results for the quarter ending December 31, 2016.

"First Guaranty Bancshares, Inc.  was the big winner in the fourth quarter.  The holding company of First Guaranty Bank saw its stock price shoot up by 48 percent, ending the year trading at just under $24 a share. "

- Timothy Boone, The Advocate, January 15, 2017

First Guaranty Bancshares, Inc. continued its drive toward a fortress balance sheet and increasing shareholder value with a solid fourth quarter showing.  Net income available to common shareholders was $3,162,000 for the quarter compared to $3,281,000 for the fourth quarter of 2015.  For the year, earnings totaled $14,093,000 as of December 31, 2016 compared to $14,121,000 as of December 31, 2015.  These income figures were in spite of flood related expenses which totaled $275,000 pre-tax, $178,750 after tax and in spite of the interest expense related to the redemption of the Small Business Lending Fund Preferred Stock in December 2015.  This interest expense totaled $329,000 for the fourth quarter of 2016 and $1,404,000 for the 12 months ending December 31, 2016.  The strong earnings were driven by continued strong loan growth as the loan portfolio as of December 31, 2016 totaled $948.9 million compared to $841.6 million as of December 31, 2015.  Loan interest income for the fourth quarter of 2016 totaled $11,746,000 compared to $10,856,000 for the fourth quarter of 2015.  For the year to date, loan interest income increased to $45.5 million for the year ending 2016 compared to $42.5 million for the year ending December 31, 2015.  Net interest margin for the year ended at 3.39% compared to 3.26% for the year 2015.

The loans to deposits ratio improved to 72% as of December 31, 2016 up from 65% as of December 31, 2015.  Once again, in accord with our business plan, First Guaranty was required to sell additional securities to fund the loan growth.

Retained earnings as of December 31, 2016 were $59,155,000 compared to $49,932,000 as of December 31, 2015, an increase of $9.2 million for the year.

In addition to the strong earnings and retained earnings, dividends of $0.16 per share were paid each quarter for a total dividend for the year of $0.64 per share.  December 31, 2016 marked the 94^th consecutive quarter of dividend payments by First Guaranty Bancshares, Inc.

Meanwhile, asset quality improved as total nonperforming assets dropped from $26.0 million as of March 31, 2016  to $22.2 million as of December 31, 2016.

In the fourth quarter, our flood damaged Watson office returned to full service and rehabilitation began on the more severely damaged Denham Springs office.  A temporary facility continues to serve our Denham Springs customers.  The construction of our new Bossier City branch continues and is scheduled for completion in April 2017.

Progress continues.  It is our aim in 2017 to continue to strengthen First Guaranty Bancshares, Inc. and to continue to enhance shareholder value.

About First Guaranty

First Guaranty, a Louisiana-based company, has approximately $1.5 billion in assets as of December 31, 2016 and provides personalized commercial banking services through 21 banking facilities located across Louisiana.  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 the Company 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.

The Company wishes to caution readers not to place undue reliance on any such forward looking statements, which speak only as of the date made. The Company wishes to advise readers that the factors listed above could affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company 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, 2016			December 31, 2015
Assets
Cash and cash equivalents:
Cash and due from banks	$	17,840		$	36,690
Federal funds sold		271			582
Cash and cash equivalents		18,111			37,272
Interest-earning time deposits with banks		-			997
Investment securities:
Available for sale, at fair value		397,473			376,369
Held to maturity, at cost (estimated fair value of $99,906 and $168,148 respectively)		101,863			169,752
Investment securities		499,336			546,121
Federal Home Loan Bank stock, at cost		1,816			935
Loans, net of unearned income		948,921			841,583
Less: allowance for loan losses		11,114			9,415
Net loans		937,807			832,168
Premises and equipment, net		23,519			22,019
Goodwill		1,999			1,999
Intangible assets, net		1,056			1,394
Other real estate, net		359			1,577
Accrued interest receivable		7,039			6,015
Other assets		9,904			9,256
Total Assets	$	1,500,946		$	1,459,753
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing demand	$	231,094		$	213,203
Interest-bearing demand		479,810			409,209
Savings		97,280			81,448
Time		517,997			592,010
Total deposits		1,326,181			1,295,870
Short-term borrowings		6,500			1,800
Accrued interest payable		1,931			1,707
Senior long-term debt		22,100			25,824
Junior subordinated debentures		14,630			14,597
Other liabilities		5,255			1,731
Total Liabilities		1,376,597			1,341,529
Shareholders' Equity
Common stock:1
$1 par value - authorized 100,600,000 shares; issued 7,609,194 shares		7,609			7,609
Surplus		61,584			61,584
Retained earnings		59,155			49,932
Accumulated other comprehensive income (loss)		(3,999	)		(901	)
Total Shareholders' Equity		124,349			118,224
Total Liabilities and Shareholders' Equity	$	1,500,946		$	1,459,753
See Notes to Consolidated Financial Statements
1 All share amounts have been restated to reflect the ten percent stock dividend paid December 17, 2015 to shareholders of record as of December 10, 2015.

FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
	Three Months Ended December 31,						Year Ended December 31,
(in thousands, except share data)	2016			2015			2016		2015
Interest Income:
Loans (including fees)	$	11,746		$	10,856		$	45,495	$	42,536
Deposits with other banks		14			16			69		72
Securities (including FHLB stock)		2,955			3,215			12,968		13,471
Total Interest Income		14,715			14,087			58,532		56,079
Interest Expense:
Demand deposits		731			367			2,633		1,419
Savings deposits		26			12			80		38
Time deposits		1,413			1,616			5,954		6,985
Borrowings		347			61			1,473		166
Total Interest Expense		2,517			2,056			10,140		8,608
Net Interest Income		12,198			12,031			48,392		47,471
Less: Provision for loan losses		727			986			3,705		3,864
Net Interest Income after Provision for Loan Losses		11,471			11,045			44,687		43,607
Noninterest Income:
Service charges, commissions and fees		549			690			2,388		2,736
ATM and debit card fees		493			452			1,859		1,779
Net (losses) gains on securities		(17	)		128			3,739		3,300
Net gain on sale of loans		5			-			14		4
Other		399			115			1,455		1,137
Total Noninterest Income		1,429			1,385			9,455		8,956
Noninterest Expense:
Salaries and employee benefits		4,166			3,749			16,577		15,496
Occupancy and equipment expense		1,146			924			4,242		3,845
Other		2,859			3,038			12,066		11,754
Total Noninterest Expense		8,171			7,711			32,885		31,095
Income Before Income Taxes		4,729			4,719			21,257		21,468
Less: Provision for income taxes		1,567			1,349			7,164		6,963
Net Income		3,162			3,370			14,093		14,505
Preferred Stock Dividends		-			(89	)		-		(384	)
Income Available to Common Shareholders	$	3,162		$	3,281		$	14,093	$	14,121
Per Common Share:1
Earnings	$	0.42		$	0.45		$	1.85	$	2.01
Cash dividends paid	$	0.16		$	0.16		$	0.64	$	0.60
Weighted Average Common Shares Outstanding		7,609,194			7,292,349			7,609,194		7,013,869
See Notes to Consolidated Financial Statements
1 All share amounts have been restated to reflect the ten percent stock dividend paid December 17, 2015 to shareholders of record as of December 10, 2015.

 

FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)
	Three Months Ended December 31, 2016							Three Months Ended December 31, 2015
(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	$	20,649	$	14		0.27	%	$	29,427	$	16		0.22	%
Securities (including FHLB stock)		477,838		2,955		2.46	%		523,375		3,215		2.44	%
Federal funds sold		250		-		-	%		313		-		-	%
Loans held for sale		-		-		-	%		-		-		-	%
Loans, net of unearned income		917,311		11,746		5.09	%		845,940		10,856		5.09	%
Total interest-earning assets		1,416,048	$	14,715		4.13	%		1,399,055	$	14,087		3.99	%
Noninterest-earning assets:
Cash and due from banks		7,700							7,686
Premises and equipment, net		22,923							21,499
Other assets		3,644							4,631
Total Assets	$	1,450,315						$	1,432,871
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Demand deposits	$	417,725	$	731		0.70	%	$	370,648	$	367		0.39	%
Savings deposits		95,042		26		0.10	%		81,091		12		0.06	%
Time deposits		524,334		1,413		1.07	%		604,776		1,616		1.06	%
Borrowings		43,443		347		3.18	%		7,536		61		3.21	%
Total interest-bearing liabilities		1,080,544	$	2,517		0.93	%		1,064,051	$	2,056		0.77	%
Noninterest-bearing liabilities:
Demand deposits		234,024							214,512
Other		7,411							4,353
Total Liabilities		1,321,979							1,282,916
Shareholders' equity		128,336							149,955
Total Liabilities and Shareholders' Equity	$	1,450,315						$	1,432,871
Net interest income			$	12,198						$	12,031
Net interest rate spread (1)						3.20	%						3.23	%
Net interest-earning assets (2)	$	335,504						$	335,004
Net interest margin (3), (4)						3.43	%						3.41	%
Average interest-earning assets to interest-bearing liabilities						131.05	%						131.48	%

(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 3.45% and 3.45% for the above periods ended December 31, 2016 and 2015 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, 2016							Year Ended December 31, 2015
(in thousands except for %)	Average Balance		Interest		Yield/Rate			Average Balance		Interest		Yield/Rate
Assets
Interest-earning assets:
Interest-earning deposits with banks	$	20,857	$	69		0.33	%	$	30,485	$	72		0.24	%
Securities (including FHLB stock)		523,438		12,968		2.48	%		609,348		13,471		2.12	%
Federal funds sold		256		-		-	%		312		-		-	%
Loans held for sale		-		-		-	%		-		-		-	%
Loans, net of unearned income		881,387		45,495		5.16	%		816,027		42,536		5.21	%
Total interest-earning assets		1,425,938	$	58,532		4.10	%		1,456,172	$	56,079		3.85	%
Noninterest-earning assets:
Cash and due from banks		7,915							7,191
Premises and equipment, net		22,306							20,300
Other assets		3,800							5,870
Total Assets	$	1,459,959						$	1,489,533
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Demand deposits	$	415,410	$	2,633		0.63	%	$	401,617	$	1,419		0.35	%
Savings deposits		89,279		80		0.09	%		77,726		38		0.05	%
Time deposits		558,982		5,954		1.07	%		640,134		6,985		1.09	%
Borrowings		43,474		1,473		3.39	%		6,320		166		2.62	%
Total interest-bearing liabilities		1,107,145	$	10,140		0.92	%		1,125,797	$	8,608		0.76	%
Noninterest-bearing liabilities:
Demand deposits		221,634							211,584
Other		5,144							5,010
Total Liabilities		1,333,923							1,342,391
Shareholders' equity		126,036							147,142
Total Liabilities and Shareholders' Equity	$	1,459,959						$	1,489,533
Net interest income			$	48,392						$	47,471
Net interest rate spread (1)						3.18	%						3.09	%
Net interest-earning assets (2)	$	318,793						$	330,375
Net interest margin (3), (4)						3.39	%						3.26	%
Average interest-earning assets to interest-bearing liabilities						128.79	%						129.35	%

(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 3.42% and 3.29% for the years ended December 31, 2016 and 2015 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, 2016, September 30, 2016, June 30, 2016 and March 31, 2016:

	December 31, 2016						September 30, 2016						June 30, 2016						March 31, 2016
(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	$	84,239			8.9	%	$	78,659			8.6	%	$	71,736			8.0	%	$	69,875			8.1	%
Farmland		21,138			2.2	%		21,561			2.4	%		21,455			2.4	%		22,037			2.6	%
1- 4 Family		135,211			14.2	%		139,651			15.3	%		137,522			15.3	%		131,543			15.3	%
Multifamily		12,450			1.3	%		12,585			1.4	%		12,682			1.4	%		10,830			1.3	%
Non-farm non-residential		417,014			43.9	%		366,400			40.1	%		352,582			39.3	%		333,048			38.9	%
Total Real Estate		670,052			70.5	%		618,856			67.8	%		595,977			66.4	%		567,333			66.2	%
Non-Real Estate:
Agricultural		23,783			2.5	%		29,866			3.3	%		27,561			3.1	%		23,266			2.7	%
Commercial and industrial		193,969			20.4	%		206,630			22.6	%		214,270			23.8	%		206,178			24.1	%
Consumer and other		63,011			6.6	%		57,393			6.3	%		60,475			6.7	%		59,925			7.0	%
Total Non-Real Estate		280,763			29.5	%		293,889			32.2	%		302,306			33.6	%		289,369			33.8	%
Total loans before unearned income		950,815			100.0	%		912,745			100.0	%		898,283			100.0	%		856,702			100.0	%
Unearned income		(1,894	)					(2,000	)					(1,899	)					(1,926	)
Total loans net of unearned income	$	948,921					$	910,745					$	896,384					$	854,776

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

(in thousands)	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016
Nonaccrual loans:
Real Estate:
Construction and land development	$	551		$	551		$	551		$	555
Farmland		105			108			111			118
1 - 4 family residential		2,242			2,579			4,383			4,749
Multifamily		5,014			5,097			5,152			5,262
Non-farm non-residential		2,753			1,526			1,741			1,935
Total Real Estate		10,665			9,861			11,938			12,619
Non-Real Estate:
Agricultural		1,958			2,393			2,630			3,537
Commercial and industrial		8,070			7,790			7,878			8,266
Consumer and other		981			1,045			1,022			-
Total Non-Real Estate		11,009			11,228			11,530			11,803
Total nonaccrual loans		21,674			21,089			23,468			24,422
Loans 90 days and greater delinquent & accruing:
Real Estate:
Construction and land development		34			-			-			-
Farmland		-			-			-			-
1 - 4 family residential		145			688			276			216
Multifamily		-			-			-			-
Non-farm non-residential		-			-			91			129
Total Real Estate		179			688			367			345
Non-Real Estate:
Agricultural		-			-			-			-
Commercial and industrial		-			-			-			-
Consumer and other		-			-			-			-
Total Non-Real Estate		-			-			-			-
Total loans 90 days and greater delinquent & accruing		179			688			367			345
Total non-performing loans		21,853			21,777			23,835			24,767
Real Estate Owned:
Real Estate Loans:
Construction and land development		-			21			21			25
Farmland		-			-			-			-
1 - 4 family residential		71			206			498			564
Multifamily		-			-			-			-
Non-farm non-residential		288			554			607			637
Total Real Estate		359			781			1,126			1,226
Non-Real Estate Loans:
Agricultural		-			-			-			-
Commercial and industrial		-			-			-			-
Consumer and other		-			-			-			-
Total Non-Real Estate		-			-			-			-
Total Real Estate Owned		359			781			1,126			1,226
Total non-performing assets	$	22,212		$	22,558		$	24,961		$	25,993
Non-performing assets to total loans		2.34	%		2.48	%		2.78	%		3.04	%
Non-performing assets to total assets		1.48	%		1.57	%		1.71	%		1.77	%
Non-performing loans to total loans		2.30	%		2.39	%		2.66	%		2.90	%

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 %)	2016			2015			2014			2013			2012
Tangible Common Equity
Total shareholders' equity	$	124,349		$	118,224		$	139,583		$	123,405		$	134,181
Adjustments:
Preferred		-			-			39,435			39,435			39,435
Goodwill		1,999			1,999			1,999			1,999			1,999
Acquisition intangibles		978			1,298			1,618			1,938			2,257
Tangible common equity	$	121,372		$	114,927		$	96,531		$	80,033		$	90,490
Common shares outstanding		7,609,194			7,609,194			6,920,022			6,920,022			6,920,022
Book value per common share	$	16.34		$	15.54		$	14.47		$	12.13		$	13.69
Tangible book value per common share	$	15.95		$	15.10		$	13.95		$	11.57		$	13.08
Tangible Assets
Total Assets	$	1,500,946		$	1,459,753		$	1,518,876		$	1,436,441		$	1,407,303
Adjustments:
Goodwill		1,999			1,999			1,999			1,999			1,999
Acquisition intangibles		978			1,298			1,618			1,938			2,257
Tangible Assets	$	1,497,969		$	1,456,456		$	1,515,259		$	1,432,504		$	1,403,047
Tangible common equity to tangible assets		8.10	%		7.89	%		6.37	%		5.59	%		6.45	%