First Guaranty Bancshares (FGBI) 8-K First Guaranty Bancshares, Inc. Announces Second Quarter 2018 Results

EXHIBIT 99.1

JULY 31, 2018

NEWS FOR IMMEDIATE RELEASE

CONTACT: ERIC J. DOSCH, CFO

985.375.0308

First Guaranty Bancshares, Inc. Announces Second Quarter 2018 Results

Hammond, Louisiana, July 31, 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 June 30, 2018.

The second quarter of 2018 marked our 100^th consecutive quarterly dividend. The second quarter of 2018 also provided an incredibly strong foundation to propel us into our next 100 quarters. We continued our progress toward a fortress balance sheet with net income of $4,597,000 compared to $2,932,000 for the second quarter of 2017, an increase of 57%. Our loan portfolio grew to a total of $1,174,141,000, $59.4 million more than June 30, 2017. Loan interest income for the second quarter of 2018 increased to $15,919,000 compared to $12,826,000 for the second quarter 2017, an increase of 24%. Our net interest margin grew to 3.44% compared to 3.33% as of June 30, 2017.

As we have acted  decisively to increase loan interest income during the present rising interest rate market, yields have risen. The six month average loan yield for the first half of 2018 was 5.39% compared to 5.08% for the same period in 2017.  For the second quarter of 2018, the average loan yield was 5.50% compared to 5.10% for the second quarter of 2017.  In addition to increasing the yields, we have stressed floating rates on new loans and have been successful in moving  loans from fixed rates to floating rates as loans mature or are otherwise changed in structure.

Retained earnings increased to $49,844,000 as of June 30, 2018 from $41,608,000 as of June 30, 2017. Our asset quality increased significantly as the non-performing assets decreased to $10,496,000 as of June 30, 2018 compared to $14,670,000 as of December 31, 2017. Likewise, the Texas ratio at the Holding Company level was an incredibly strong 6.76% compared to 14.34% as of June 30, 2017.

We are steadily and surely building a rock solid financial institution with strong capital, strong earnings, and good asset quality. We are steadily enhancing shareholder value through increased share value and dividend income.

We look forward to the next 100 quarters.

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 $1.7 billion in assets as of June 30, 2018 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)	June 30, 2018			December 31, 2017
Assets
Cash and cash equivalents:
Cash and due from banks	$	27,639		$	37,205
Federal funds sold		165			823
Cash and cash equivalents		27,804			38,028
Investment securities:
Available for sale, at fair value		348,476			381,535
Held to maturity, at cost (estimated fair value of $109,659 and $118,557 respectively)		114,044			120,121
Investment securities		462,520			501,656
Federal Home Loan Bank stock, at cost		2,359			2,351
Loans held for sale		639			1,308
Loans, net of unearned income		1,174,141			1,149,014
Less: allowance for loan losses		10,770			9,225
Net loans		1,163,371			1,139,789
Premises and equipment, net		38,127			38,020
Goodwill		3,472			3,472
Intangible assets, net		4,075			4,424
Other real estate, net		1,225			1,281
Accrued interest receivable		7,428			7,982
Other assets		11,794			12,119
Total Assets	$	1,722,814		$	1,750,430
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing demand	$	249,550		$	251,617
Interest-bearing demand		562,222			611,677
Savings		111,987			104,661
Time		605,909			581,331
Total deposits		1,529,668			1,549,286
Short-term borrowings		10,925			15,500
Accrued interest payable		2,457			2,488
Senior long-term debt		21,306			22,774
Junior subordinated debentures		14,682			14,664
Other liabilities		2,577			1,735
Total Liabilities		1,581,615			1,606,447
Shareholders' Equity
Common stock:
$1 par value - authorized 100,600,000 shares; issued 8,807,175 shares		8,807			8,807
Surplus		92,268			92,268
Retained earnings		49,844			44,464
Accumulated other comprehensive income (loss)		(9,720	)		(1,556	)
Total Shareholders' Equity		141,199			143,983
Total Liabilities and Shareholders' Equity	$	1,722,814		$	1,750,430
See Notes to Consolidated Financial Statements

FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands, except share data)	2018			2017		2018			2017
Interest Income:
Loans (including fees)	$	15,919		$	12,826	$	30,783		$	25,026
Deposits with other banks		31			41		116			60
Securities (including FHLB stock)		3,330			3,298		6,683			6,701
Federal funds sold		-			2		1			2
Total Interest Income		19,280			16,167		37,583			31,789
Interest Expense:
Demand deposits		2,142			1,360		4,118			2,442
Savings deposits		92			50		174			86
Time deposits		2,290			1,591		4,375			3,035
Borrowings		472			374		877			740
Total Interest Expense		4,996			3,375		9,544			6,303
Net Interest Income		14,284			12,792		28,039			25,486
Less: Provision for loan losses		(409	)		1,302		196			2,013
Net Interest Income after Provision for Loan Losses		14,693			11,490		27,843			23,473
Noninterest Income:
Service charges, commissions and fees		777			571		1,494			1,133
ATM and debit card fees		531			493		1,032			967
Net (losses) gains on securities		(216	)		404		(206	)		934
Net gains on sale of loans		129			119		131			124
Other		547			410		895			795
Total Noninterest Income		1,768			1,997		3,346			3,953
Noninterest Expense:
Salaries and employee benefits		5,633			4,593		11,215			9,419
Occupancy and equipment expense		1,397			1,077		2,738			��2,108
Other		3,647			3,351		6,931			6,488
Total Noninterest Expense		10,677			9,021		20,884			18,015
Income Before Income Taxes		5,784			4,466		10,305			9,411
Less: Provision for income taxes		1,187			1,534		2,107			3,228
Net Income	$	4,597		$	2,932	$	8,198		$	6,183
Per Common Share:1
Earnings	$	0.52		$	0.35	$	0.93		$	0.74
Cash dividends paid	$	0.16		$	0.15	$	0.32		$	0.30
Weighted Average Common Shares Outstanding		8,807,175			8,441,581		8,807,175			8,405,702
See Notes to Consolidated Financial Statements
1 All 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 June 30, 2018							Three Months Ended June 30, 2017
(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	$	16,015	$	31		0.78	%	$	25,361	$	41		0.65	%
Securities (including FHLB stock)		488,525		3,330		2.73	%		507,847		3,298		2.60	%
Federal funds sold		601		-		-	%		878		2		0.91	%
Loans held for sale		1,989		34		6.77	%		255		4		6.38	%
Loans, net of unearned income		1,158,619		15,885		5.50	%		1,008,759		12,822		5.10	%
Total interest-earning assets		1,665,749	$	19,280		4.64	%		1,543,100	$	16,167		4.20	%
Noninterest-earning assets:
Cash and due from banks		10,319							8,090
Premises and equipment, net		38,177							27,161
Other assets		13,245							5,208
Total Assets	$	1,727,490						$	1,583,559
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Demand deposits	$	567,141	$	2,142		1.51	%	$	535,786	$	1,360		1.02	%
Savings deposits		110,425		92		0.33	%		101,684		50		0.20	%
Time deposits		603,183		2,290		1.52	%		536,061		1,591		1.19	%
Borrowings		44,459		472		4.26	%		38,002		374		3.95	%
Total interest-bearing liabilities		1,325,208	$	4,996		1.51	%		1,211,533	$	3,375		1.12	%
Noninterest-bearing liabilities:
Demand deposits		255,981							236,099
Other		5,642							4,908
Total Liabilities		1,586,831							1,452,540
Shareholders' equity		140,659							131,019
Total Liabilities and Shareholders' Equity	$	1,727,490						$	1,583,559
Net interest income			$	14,284						$	12,792
Net interest rate spread (1)						3.13	%						3.08	%
Net interest-earning assets (2)	$	340,541						$	331,567
Net interest margin (3), (4)						3.44	%						3.33	%
Average interest-earning assets to interest-bearing liabilities						125.70	%						127.37	%

(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 3.35% for the above periods ended June 30, 2018 and 2017 respectively. A 21% and 35%  tax rate was used to calculate the effect on securities income from tax exempt securities for the above periods ended June 30, 2018 and 2017 respectively.
(5)	Annualized.

FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)
	Six Months Ended June 30, 2018							Six Months Ended June 30, 2017
(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	$	24,034	$	116		0.97	%	$	22,021	$	60		0.55	%
Securities (including FHLB stock)		497,953		6,683		2.71	%		525,257		6,701		2.57	%
Federal funds sold		816		1		0.22	%		563		2		0.62	%
Loans held for sale		1,858		57		6.19	%		140		4		5.84	%
Loans, net of unearned income		1,148,882		30,726		5.39	%		992,883		25,022		5.08	%
Total interest-earning assets		1,673,543	$	37,583		4.53	%		1,540,864	$	31,789		4.16	%
Noninterest-earning assets:
Cash and due from banks		10,295							7,924
Premises and equipment, net		38,183							25,826
Other assets		13,818							4,931
Total Assets	$	1,735,839						$	1,579,545
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Demand deposits	$	587,132	$	4,118		1.41	%	$	535,151	$	2,442		0.92	%
Savings deposits		110,333		174		0.32	%		99,736		86		0.17	%
Time deposits		597,651		4,375		1.48	%		538,002		3,035		1.14	%
Borrowings		41,449		877		4.27	%		39,620		740		3.77	%
Total interest-bearing liabilities		1,336,565	$	9,544		1.44	%		1,212,509	$	6,303		1.05	%
Noninterest-bearing liabilities:
Demand deposits		252,847							233,856
Other		5,107							4,579
Total Liabilities		1,594,519							1,450,944
Shareholders' equity		141,320							128,601
Total Liabilities and Shareholders' Equity	$	1,735,839						$	1,579,545
Net interest income			$	28,039						$	25,486
Net interest rate spread (1)						3.09	%						3.11	%
Net interest-earning assets (2)	$	336,978						$	328,355
Net interest margin (3), (4)						3.38	%						3.34	%
Average interest-earning assets to interest-bearing liabilities						125.21	%						127.08	%

(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 3.39% and 3.36% for the above periods ended June 30, 2018 and 2017 respectively. A 21% and 35%  tax rate was used to calculate the effect on securities income from tax exempt securities for the above periods ended June 30, 2018 and 2017 respectively.
(5)	Annualized.

The following table summarizes the components of First Guaranty's loan portfolio as of June 30, 2018, March 31, 2018, December 31, 2017 and September 30, 2017:

	June 30, 2018						March 31, 2018						December 31, 2017						September 30, 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	$	91,654			7.8	%	$	95,524			8.4	%	$	112,603			9.8	%	$	108,610			9.8	%
Farmland		24,448			2.1	%		24,668			2.2	%		25,691			2.2	%		29,345			2.6	%
1- 4 Family		164,841			14.0	%		158,937			13.9	%		158,733			13.8	%		158,564			14.3	%
Multifamily		43,118			3.6	%		43,406			3.8	%		16,840			1.4	%		17,089			1.5	%
Non-farm non-residential		569,559			48.4	%		529,478			46.5	%		530,293			46.1	%		508,210			45.6	%
Total Real Estate		893,620			75.9	%		852,013			74.8	%		844,160			73.3	%		821,818			73.8	%
Non-Real Estate:
Agricultural		26,517			2.3	%		18,957			1.7	%		21,514			1.9	%		29,109			2.6	%
Commercial and industrial		200,349			17.0	%		213,613			18.7	%		230,638			20.0	%		209,386			18.8	%
Consumer and other		56,458			4.8	%		55,007			4.8	%		55,185			4.8	%		53,606			4.8	%
Total Non-Real Estate		283,324			24.1	%		287,577			25.2	%		307,337			26.7	%		292,101			26.2	%
Total loans before unearned income		1,176,944			100.0	%		1,139,590			100.0	%		1,151,497			100.0	%		1,113,919			100.0	%
Unearned income		(2,803	)					(2,419	)					(2,483	)					(2,128	)
Total loans net of unearned income	$	1,174,141					$	1,137,171					$	1,149,014					$	1,111,791

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

(in thousands)	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017
Nonaccrual loans:
Real Estate:
Construction and land development	$	326		$	360		$	371		$	376
Farmland		638			235			65			107
1 - 4 family residential		2,298			1,480			1,953			2,296
Multifamily		-			-			-			-
Non-farm non-residential		3,821			3,885			3,758			773
Total Real Estate		7,083			5,960			6,147			3,552
Non-Real Estate:
Agricultural		1,360			1,972			1,496			617
Commercial and industrial		347			2,398			4,826			6,081
Consumer and other		227			206			81			50
Total Non-Real Estate		1,934			4,576			6,403			6,748
Total nonaccrual loans		9,017			10,536			12,550			10,300
Loans 90 days and greater delinquent & accruing:
Real Estate:
Construction and land development		-			-			-			-
Farmland		-			-			-			-
1 - 4 family residential		28			-			-			47
Multifamily		-			-			-			-
Non-farm non-residential		-			316			-			-
Total Real Estate		28			316			-			47
Non-Real Estate:
Agricultural		-			75			41			362
Commercial and industrial		226			30			798			-
Consumer and other		-			-			-			-
Total Non-Real Estate		226			105			839			362
Total loans 90 days and greater delinquent & accruing		254			421			839			409
Total non-performing loans		9,271			10,957			13,389			10,709
Real Estate Owned:
Real Estate Loans:
Construction and land development		250			250			304			319
Farmland		-			-			-			-
1 - 4 family residential		164			164			23			23
Multifamily		-			-			-			-
Non-farm non-residential		811			857			954			954
Total Real Estate		1,225			1,271			1,281			1,296
Non-Real Estate Loans:
Agricultural		-			-			-			-
Commercial and industrial		-			-			-			-
Consumer and other		-			-			-			-
Total Non-Real Estate		-			-			-			-
Total Real Estate Owned		1,225			1,271			1,281			1,296
Total non-performing assets	$	10,496		$	12,228		$	14,670		$	12,005
Non-performing assets to total loans		0.89	%		1.08	%		1.28	%		1.08	%
Non-performing assets to total assets		0.61	%		0.71	%		0.84	%		0.71	%
Non-performing loans to total loans		0.79	%		0.96	%		1.17	%		0.96	%

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 June 30,			At December 31,
(in thousands except for share data and %)	2018			2017			2016			2015			2014
Tangible Common Equity
Total shareholders' equity	$	141,199		$	143,983		$	124,349		$	118,224		$	139,583
Adjustments:
Preferred		-			-			-			-			39,435
Goodwill		3,472			3,472			1,999			1,999			1,999
Acquisition intangibles		2,976			3,249			978			1,298			1,618
Tangible common equity	$	134,751		$	137,262		$	121,372		$	114,927		$	96,531
Common shares outstanding1		8,807,175			8,807,175			8,369,424			8,369,424			7,611,397
Book value per common share1	$	16.03		$	16.35		$	14.86		$	14.13		$	13.16
Tangible book value per common share1	$	15.30		$	15.59		$	14.50		$	13.73		$	12.68
Tangible Assets
Total Assets	$	1,722,814		$	1,750,430		$	1,500,946		$	1,459,753		$	1,518,876
Adjustments:
Goodwill		3,472			3,472			1,999			1,999			1,999
Acquisition intangibles		2,976			3,249			978			1,298			1,618
Tangible Assets	$	1,716,366		$	1,743,709		$	1,497,969		$	1,456,456		$	1,515,259
Tangible common equity to tangible assets		7.85	%		7.87	%		8.10	%		7.89	%		6.37	%
1 All 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.