Regulators restricted First Guaranty Bank\u2019s ability to extend credit to borrowers whose transactions were labeled a \u201closs\u201d in a 2025 exam. The bank also must boost its Tier 1 leverage capital ratio.<\/p>\n\n\n\n
Hammond, Louisiana-based First Guaranty Bank has agreed to operate under a consent order concerning the credit quality of its borrowers, the lender said Friday in a filing with the Securities and Exchange Commission.<\/p>\n\n\n\n
The Federal Deposit Insurance Corp. and Louisiana Office of Financial Institutions are restricting the $3.9 billion-asset bank from extending additional credit to borrowers whose credit remains uncollected and was charged off or classified as a \u201closs\u201d during a September 2025 exam by regulators.<\/p>\n\n\n\n
The regulators are also restricting First Guaranty from extending additional credit to borrowers whose credit remains uncollected and was classified as \u201cdoubtful\u201d or \u201csubstandard\u201d during the exam, unless the bank\u2019s board signs a written statement detailing reasons why failure to extend credit would be detrimental.<\/p>\n\n\n\n
Under the order, which took effect Friday, First Guaranty must maintain a Tier 1 leverage capital ratio of 9% or more and a total risk-based capital ratio of at least 14%.<\/p>\n\n\n\n
Within 120 days, the bank must eliminate from its books \u2013 by charge-off or collection \u2013 assets or portions of assets classified during the September 2025 exam as a \u201closs\u201d and 50% of assets labeled \u201cdoubtful.\u201d<\/p>\n\n\n\n
Ahead of that, though \u2013 within 60 days \u2013 First Guaranty must submit a written plan to regulators detailing how it will reduce remaining assets classified as \u201cdoubtful\u201d and \u201csubstandard,\u201d including specific information for each asset with a balance of $2 million or more, according to Friday\u2019s order.<\/p>\n\n\n\n
In the intermediate term \u2013 within 90 days \u2013 First Guaranty\u2019s board must submit to regulators a written plan identifying, measuring and monitoring the bank\u2019s commercial real estate concentration.<\/p>\n\n\n\n
Also within 90 days, the board must implement measures to correct weaknesses found in CRE stress testing, as well as measures to correct certain loan underwriting and credit administration weaknesses identified in the September 2025 exam.<\/p>\n\n\n\n
The bank is restricted from paying any dividend to its holding company while under the order without the regulators\u2019 prior written consent. First Guaranty must also submit quarterly progress reports to the FDIC and OFI.<\/p>\n\n\n\n
First Guaranty, in Friday\u2019s filing, said it has submitted a capital plan to the regulators and, apart from the Tier 1 leverage ratio requirement, \u201cthe Bank currently believes that it is in full compliance with the Consent Order.\u201d<\/p>\n\n\n\n
The bank noted its Tier 1 leverage capital ratio was 7.09% as of June 30, and itstotal risk-based capital ratio was 16.21%.<\/p>\n\n\n\n
Among the moves that could boost First Guaranty\u2019s Tier 1 figures, the bank announced Thursday it had completed the sale of five branches to Muskogee, Oklahoma-based Armstrong Bank. When the sale was proposed in March, First Guaranty estimated the transaction would boost Tier 1 leverage capital by about 100 basis points.<\/p>\n\n\n\n
First Guaranty\u2019s real estate-related nonperforming assets decreased to $38.3 million as of June 30, from $88.6 million, according to second-quarter results disclosed July 28.<\/p>\n\n\n\n
The bank reported no doubtful loan relationships as of June 30 but cited $276.6 million in substandard loan relationships, according to the earnings report.<\/p>\n\n\n\n
Overall, the bank reported $3.4 million in profit in the second quarter, a turnaround from a $7.3 million loss a year earlier.<\/p>\n","protected":false},"excerpt":{"rendered":"
Regulators restricted First Guaranty Bank\u2019s ability to extend credit to borrowers whose transactions were labeled a \u201closs\u201d in a 2025 exam. The bank also must boost its Tier 1 leverage capital ratio. Hammond, Louisiana-based First Guaranty Bank has agreed to operate under a consent order concerning the credit quality of its borrowers, the lender said […]<\/p>\n","protected":false},"author":2,"featured_media":54,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"class_list":["post-53","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking-credit"],"_links":{"self":[{"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=\/wp\/v2\/posts\/53","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=53"}],"version-history":[{"count":1,"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=\/wp\/v2\/posts\/53\/revisions"}],"predecessor-version":[{"id":55,"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=\/wp\/v2\/posts\/53\/revisions\/55"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=\/wp\/v2\/media\/54"}],"wp:attachment":[{"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=53"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=53"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/law.petpolicyadvisors.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=53"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}