First Guaranty in La. reports big 3Q loss due to credit woes, goodwill charge

First Guaranty Bancshares in Hammond, La., reported a large quarterly loss due to exposure to a large auto parts manufacturer and goodwill impairment.

The $3.8 billion-asset company said in a press release that it lost $45 million in the third quarter, which included a $47.9 million loan-loss provision. The company also recorded a $12.9 million goodwill impairment charge.

First Guaranty said it has a $52.0 million credit exposure tied to commercial leases related to the auto parts manufacturer, which sought bankruptcy protection in the third quarter. While the borrower wasn’t identified, First Brands Group in Texas recently filed for bankruptcy protection.

A $17.2 million commercial lease is past due and was placed on nonaccrual in September. Three other leases are still performing, though First Guaranty downgraded all the lease credits to substandard and impaired status. A $17.2 million specific reserve was established for the nonaccrual credit and a $22.6 million reserve was created for the other credits.

“I am disappointed with the news associated with the auto parts bankruptcy, but we have taken proactive steps to reserve against the credit, given the current known facts,” CEO Michael Mineer said in the release. “We anticipate further clarification of our position in the fourth quarter. … For the time being, we will retain the high level of reserve against these commercial lease credits.”

The goodwill impairment charge was the result of First Guaranty’s stock price trading below book value and the recent increase in credit provisions.

It has been a rough two years for First Guaranty, which laid off 15% of its staff, slashed its dividend, and disclosed exposure to CRE loans in late 2024. It raised capital in the third quarter of this year by selling 122,000 shares of common stock in a private placement.