Executive Summary

Q3 2025 was a loss-driven quarter: net loss of $45.0M and diluted EPS of $(3.01), driven by a $47.9M provision for credit losses (including $39.8M tied to a single auto-parts-related commercial lease) and a $12.9M goodwill impairment .
Net interest income remained stable at $22.24M, and net interest margin held at 2.34%, but “Total Business Revenue (Loss), net of provision for credit losses” was $(23.84)M versus $22.20M in Q3 2024, reflecting the outsized provision .
Capital improved despite the hit: consolidated Total Risk-based Capital ratio was 11.97% and the bank’s Total Risk-based Capital ratio reached 12.34%; ACL rose to 3.76% of loans, signaling heightened defensive posture .
Management emphasized continued risk reduction (especially CRE), cost control, and capital preservation; near-term stock reaction catalysts include resolution of the auto-parts lease exposure and planned Q4 OREO sale closing .

What Went Well and What Went Wrong

What Went Well

Capital and reserves strengthened: “risk weighted capital ratio” improved to 12.34% (bank), and ACL rose to 3.76% of loans, enhancing loss-absorption capacity .
Cost discipline intact: excluding goodwill impairment, noninterest expense was a stable ~$17.3M; FTE declined to 339 from 404 YoY, evidencing operating efficiency .
Progress on de-risking CRE/exiting assets: largest OREO ($7.4M land development in TX) under contract for Q4 sale; loan concentrations and nonaccrual balances saw targeted actions and payoffs .

What Went Wrong

Credit shock: $47.9M provision in Q3, with $39.8M specific to one auto-parts-related lease exposure; net loss of $45.0M flowed directly from provision plus $12.9M goodwill impairment .
Elevated charge-offs: $21.3M Q3 charge-offs across CRE (multifamily and independent living), plus consumer and smaller credits; NPA metrics remained elevated .
Margin pressure and revenue deterioration: NIM fell 17 bps YoY to 2.34% and “Total Business Revenue” swung to $(23.84)M from +$22.20M YoY on provision magnitude .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Net Interest Income ($USD Millions)	$22.70	$22.22	$22.24	$22.24
Total Business Revenue (Net of Provision) ($USD Millions)	$22.20	$10.03	$7.79	$(23.84)
Net (Loss) Income ($USD Millions)	$1.93	$(6.17)	$(5.83)	$(45.00)
Diluted EPS ($USD)	$0.11	$(0.54)	$(0.50)	$(3.01)
Net Interest Margin (%)	2.51%	2.35%	2.34%	2.34%

Q3 2025 vs. Prior Quarter (Q2 2025)	Q3 2025 vs. Prior Year (Q3 2024)
Net Interest Income: flat ($22.24M vs $22.24M)	Net Interest Income: down ~2% ($22.24M vs $22.70M)
Total Business Revenue: down to $(23.84)M from $7.79M (provision spike)	Total Business Revenue: down to $(23.84)M from $22.20M
EPS: $(3.01) vs $(0.50) (credit reserve + goodwill impairment)	EPS: $(3.01) vs $0.11
NIM: 2.34% vs 2.34% (stable)	NIM: 2.34% vs 2.51% (−17 bps)

Segment/Loan Mix Breakdown (Balances, $USD Millions)

Category	Dec 31, 2024	Mar 31, 2025	Jun 30, 2025	Sep 30, 2025
Construction & Land Development	$330.05	$288.29	$268.83	$231.16
Farmland	$35.99	$29.96	$32.27	$31.69
1–4 Family	$450.37	$444.37	$440.47	$441.02
Multifamily	$165.12	$144.52	$144.86	$137.58
Non-farm Non-residential	$1,159.84	$1,117.17	$1,052.50	$1,003.20
Agricultural	$40.72	$37.60	$42.83	$44.74
Commercial & Industrial	$257.52	$234.51	$238.14	$227.08
Commercial Leases	$220.20	$183.99	$159.21	$134.96
Consumer & Other	$42.27	$39.77	$38.24	$34.76
Total Loans (before unearned)	$2,702.08	$2,520.19	$2,417.35	$2,286.17

KPIs and Balance Sheet

Metric	Q1 2025	Q2 2025	Q3 2025
Total Assets ($USD Billions)	$3.83	$3.97	$3.80
Total Loans net of unearned ($USD Billions)	$2.51	$2.35	$2.19
Total Deposits ($USD Billions)	$3.34	$3.48	$3.35
Allowance for Credit Losses (% Loans)	1.71%	2.36%	3.76%
Non-performing Assets / Total Assets (%)	3.50%	3.20%	3.33%
Net Loan Charge-offs ($USD Millions)	$6.9	$1.1	$21.3
Bank Total Risk-based Capital Ratio (%)	—	—	12.34%
Consolidated Total Risk-based Capital Ratio (%)	—	—	11.97%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Common Dividend per Share	Q3 2025	$0.08 (Q3 2024 actual)	$0.01	Lowered
Quantitative Revenue/Margin Guidance	2025	Not provided	Not provided	Maintained (no formal guidance)

Note: Management reiterated focus on de-risking CRE, preserving capital, and resolving specific credit exposures; no formal quantitative guidance ranges were disclosed .

Earnings Call Themes & Trends

No Q3 2025 earnings call transcript was available in the document catalog. Themes below reflect management communications via press releases/shareholder reports.

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Asset Quality/NPLs	Q1: Nonaccruals rose to $133.4M; new assisted living and land development issues; provision $14.5M . Q2: NPA down $6.8M QoQ; provision $14.7M; successful workouts; planned sale of $8.8M nonaccrual in July .	Auto-parts-related lease bankruptcy; $47.9M provision; ACL to 3.76% of loans; charge-offs $21.3M; top non-performing relationships detailed .	Deteriorated in Q3 due to specific event; reserves strengthened.
CRE Concentration Reduction	Loan balances declined from $2.69B (12/31/24) to $2.51B (Q1), $2.41B (Q2) .	Loans at $2.28B; continued CRE risk reduction .	Improving (lower CRE exposure).
Capital & Buffers	Focus on capital preservation; book value declined as shares increased; ACL build .	Risk-weighted capital improved; goodwill impairment did not impact regulatory capital; capital conservation buffer above minimums .	Strengthening.
Expense Management/FTE	Noninterest expense down; annualized savings ~$13.4M; FTE down from 495 (Q2’24) to 360 (Q2’25) .	Ex-goodwill, noninterest expense ~flat with Q2; FTE 339 (down YoY) .	Improving/stable.
Liquidity/Deposits	Deposits stable near $3.5B (Q2); public fund seasonality noted (Q1) .	Deposits $3.35B; funding costs remain elevated (rate mix) .	Stable to slightly lower.
Regulatory/Legal	No major items; continued risk management .	Well-capitalized status; buffers above requirements; community bank leverage ratio not elected .	Stable.

Management Commentary

“First Guaranty has made significant progress in reducing risk in our balance sheet and increasing our capital ratios… I am disappointed with the news associated with the auto parts bankruptcy but we have taken proactive steps to reserve against the credit… We anticipate further clarification of our position in the fourth quarter of 2025.” — CEO Michael R. Mineer .
“Noninterest expense (excluding the goodwill impairment) was stable… Our business strategy change from July of last year prepared the bank to be able to withstand this event.” — CEO letter in Q3 shareholder report .

Q&A Highlights

No Q3 2025 earnings call transcript available; therefore, no Q&A themes to report from a call [ListDocuments shows none].

Estimates Context

EPS vs. S&P Global consensus: Consensus for Q3 2025 Primary EPS was $(0.32); S&P’s “actual” Primary EPS was $(2.30)*; GAAP diluted EPS in the company’s press release was $(3.01) (difference likely reflects normalization/non-GAAP adjustments in S&P definition). Result: significant miss vs. consensus. Miss .
Revenue consensus was unavailable; S&P showed actual revenue (mapped to “Total Business Revenue net of provision”) of $(23.84)M*, but no estimate count/consensus was provided (Revenue - # of Estimates returned none).
EPS estimate count: 1 for Q3 2025*, indicating thin sell-side coverage, limiting consensus robustness.

Metric	Period	Consensus	Actual	Outcome
Primary EPS	Q3 2025	$(0.32)*	$(2.30)* and GAAP EPS $(3.01)	Miss

Values retrieved from S&P Global.*

Key Takeaways for Investors

The quarter’s outsized provision tied to a single commercial lease exposure and goodwill impairment drove the loss; watch for credit resolution updates in Q4 (timing and recoveries) as near-term stock catalysts .
Despite the hit, capital ratios improved and ACL coverage rose sharply to 3.76% of loans; balance sheet risk is being actively reduced (notably CRE) .
NIM appears stable near 2.34%, but funding mix/costs and lower loan balances cap NII upside; expect focus on deposit pricing discipline and securities mix .
Operating efficiency actions are sticking (lower FTE, stable core Opex); sustained cost control is a medium-term support while credit costs normalize .
Dividend cut to $0.01 reflects capital preservation priority; future payout actions likely hinge on asset quality progress and earnings recovery .
Thin sell-side coverage (one EPS estimate) amplifies estimate volatility; expect consensus adjustments downward given Q3’s provision and impairment (EPS miss vs. S&P Global*).
Risk/reward turns on asset-quality trajectory: specific credits (assisted living, multifamily, auto-parts lease) and OREO dispositions will drive narrative and valuation resets .

First Guaranty Bancshares, Inc. (FGBI)·Q3 2025 Earnings Summary