First Guaranty Bancshares dropped to a loss last quarter as it took a financial hit from loans linked to an auto parts company that has declared bankruptcy.
The Louisiana-based bank’s net loss was US$45.0 million, down from income of $1.9 million one year ago, due to provisions for credit losses, an impairment charge, and a credit exposure.
“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 given the current known facts,” said First Guaranty CEO Michael Mineer.
“First Guaranty Bank's risk weighted capital ratio has improved to 12.34% at September 30, 2025 compared to 11.66% at September 30, 2024. Our business strategy change from July of last year prepared the bank to be able to withstand this event.”
It saw a $47.9 million provision for credit losses, with $39.8 million of this stemming from First Guaranty’s relationship with an auto parts manufacturer that declared bankruptcy last quarter. The bank also posted an impairment charge of $12.9 million.
The bank had a $52.0 million credit exposure due to its commercial lease financing to entities linked to the auto parts company. This included a $17.2 million lease past due on its payments and $34.8 million in leases current on payments.
First Guaranty did not offer the name of the auto parts company.
Auto parts company First Brands declared bankruptcy last quarter after recording $12 billion in liabilities. First Brands has been accused of fraud by creditor groups in filings for its bankruptcy case, and the U.S. Department of Justice has opened a criminal probe.
First Guaranty’s net interest income was $22.2 million last quarter, down from $22.7 million year-over-year. Its total assets fell by $175.4 million to $3.8 billion across 2025’s first nine months.
First Guaranty’s (NASDAQ: FGBI) share price closed at $6.56 on Friday, down from its previous close at $6.64. Its shares are down 41.95% in 2025 to date, and its market capitalisation is $99.19 million.
