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Louisiana bank faces unusual limits on who it can lend to
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A branch sale completed last week should boost the bank's capital, moving it closer to complying with a major requirement of the consent order.
First Guaranty Bank has been contending with credit-quality problems for some time, and now its regulators have devised an unusual way to address the issue: The Hammond, Louisiana, lender will be restricted from extending additional credit to certain borrowers.
Processing ContentThe $3.9 billion-asset bank recently agreed to a consent order that aims to reduce its criticized loans and strengthen its credit quality, according to a Friday securities filing.
Still, news of the consent order triggered a selloff of First Guaranty's shares.
In July 2023, the bank canceled plans to acquire Lone Star Bank in Houston after its share price plunged, upsetting the deal's economics.