First Guaranty in La. reports loss after selling worrisome CRE loans
First Guaranty Bancshares in Hammond, La., lost $6.2 million in the first quarter after selling two commercial real estate loans at a loss.
The $3.8 billion-asset company, which earned $2.3 million a year earlier, recorded a $14.5 million loan-loss provision in the recent quarter. About $5.8 million of the provision was tied to the loan sales.
One loan was tied to a construction project in Louisiana with a $41 million balance. The other involved a land development project in Texas with a $28.9 million balance. Though both loans were performing at Dec. 31, each “displayed credit-related weaknesses” that led the bank to unload them.
Nonaccrual loans increased by $24.9 million from the end of last year, totaling $133.4 million on March 31. The amount includes a $33 million loan tied to an assisted living center in Alabama and a $7.4 million land development loan in Texas. The total was partially offset by the sale of $8.8 million in nonaccrual loans backed by a shopping center.
First Guaranty has been working to preserve capital since hiring Michael Mineer as president and CEO nearly a year ago. It began cutting its dividend in July, around the same time it announced plans to lay off about 15% of its employees. The dividend was slashed to a penny in December.