First Guaranty Bancshares closed the second quarter of 2026 as a Louisiana-based community bank under a freshly issued consent order from the FDIC and the Louisiana Office of Financial Institutions, a regulatory action that crystallized a balance-sheet cleanup the company has been running since the middle of 2024. The Bank consented to the order without admitting or denying any charges of unsafe or unsound banking practices, and the order, effective in early August 2026, requires the bank to maintain a tier 1 leverage capital ratio of nine percent. As of the most recent quarter-end, the bank's tier 1 leverage ratio sat below the new floor while its total risk-based capital ratio was comfortably above its floor, putting the bank on a path to address the capital gap through retained earnings plus the cash and equivalents already on the balance sheet.
The second-quarter print shows the cleanup is working on the credit side. Net income swung to a positive three point four million dollars in the second quarter of 2026, compared to a loss of seven point three million in the year-ago quarter, and the provision for credit losses fell by more than eighty percent year-over-year, lifting pre-tax income to a positive four point three million. Total loans at quarter-end were fourteen point seven percent below the year-end 2025 level, with nonaccrual loans down materially, special mention loans down by one hundred forty-two point nine million, and substandard loans down by seventy point nine million. The company completed the sale of its Texas operations in late July 2026, which compresses the balance sheet further and sharpens the focus on the Louisiana, Kentucky and West Virginia footprint.
The market is paying a deep discount for the regulatory friction, not the underlying franchise. The stock trades near eight dollars with sixteen point five million shares outstanding, giving a market capitalization in the one-hundred-thirty-million range, a price-to-book of roughly zero point six nine times and a price-to-tangible-book in a similar range. Book value per common share of eleven point seven five dollars sits well above the trading price, and the ratio is the cleanest expression of the market's caution about the consent order. The loan-to-deposit ratio is roughly forty-five percent, well below peer averages, the investment portfolio is one point two billion of high-quality agency and corporate securities, and the cleanup is in active execution with the Texas exit already closed and a capital plan already filed. The falsifiable clock is the next two quarterly prints showing tier 1 leverage capital rising back toward nine percent without a return of large provision expense, and the consent order's full compliance horizon is the four to twelve months following the effective date in early August 2026.