8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 26, 2023

FIRST GUARANTY BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

Louisiana	001-37621	26-0513559
(State or other jurisdiction	(Commission File Number)	(I.R.S. Employer
incorporation or organization)		Identification Number)
400 East Thomas Street
Hammond, Louisiana		70401
(Address of principal executive offices)		(Zip Code)
(985) 345-7685
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☒Written communications pursuant to Rule 425 under Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock, $1 par valueFGBIThe Nasdaq Stock Market LLCDepositary Shares (each representing a 1/40th interest in a share of 6.75% Series A Fixed-Rate Non-Cumulative perpetual preferred stock)FGBIPThe Nasdaq Stock Market LLC

Item 2.02.        Results of Operations and Financial Condition

On April 26, 2023, First Guaranty Bancshares, Inc. issued a press release reporting its financial results at and for the three months ended March 31, 2023.

The Press Release is enclosed as Exhibit 99.1 to this report. The information in Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

Item 9.01.        Financial Statements and Exhibits.

Exhibit 99.1    Press Release dated April 26, 2023.

Forward Looking Statements

This letter contains forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact which represent our current judgement about possible future events. We believe these judgements are reasonable, but these statements are not guarantees of any future events or financial results, and our actual results may differ materially due to a variety of factors, many of which are described in our most recent Annual Report on Form 10-K and our other filings with the U.S. Securities and Exchange Commission. We caution readers not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or otherwise revise any forward-looking statements.

Important Information and Where to Find It

This Report does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed acquisition by First Guaranty of Lone Star. No offer of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended, and no offer to sell or solicitation of an offer to buy shall be made in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

In connection with the proposed Transaction, First Guaranty has filed with the SEC a Registration Statement on Form S-4, as amended, that includes a proxy statement of Lone Star and a prospectus of First Guaranty (as may be further amended or supplemented from time to time, the “Proxy Statement/Prospectus”), and First Guaranty may file with the SEC other relevant documents concerning the proposed Transaction. The definitive Proxy Statement/Prospectus will be mailed to shareholders of Lone Star. BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS, SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BY FIRST GUARANTY, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT FIRST GUARANTY, FGB, LONE STAR AND THE PROPOSED TRANSACTION.

Free copies of the Proxy Statement/Prospectus, as well as other filings containing information about First Guaranty, may be obtained at the SEC’s website (http://www.sec.gov) when they are filed by First Guaranty. You will also be able to obtain these documents, when they are filed, free of charge, from First Guaranty at www.fgb.net under the heading “SEC Filings.” Copies of the Proxy Statement/Prospectus can also be obtained, when it becomes available, free of charge, by directing a request to First Guaranty Bancshares, Inc., 400 East Thomas Street, Hammond, Louisiana 70401, Attn: Investor Relations, (985) 375-0343.

Participants in the Solicitation

This Report is not a solicitation of a proxy from any security holder of Lone Star. However, Lone Star and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Lone Star in respect of the proposed Transaction. Information about Lone Star’s directors and executive officers will be contained in the Proxy Statement/Prospectus. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Proxy Statement/Prospectus and other relevant materials to be filed with the SEC when they become available. Free copies of this document may be obtained as described in the preceding paragraph.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FIRST GUARANTY BANCSHARES, INC.
	(Registrant)
Date: April 26, 2023
	By:	/s/Eric J. Dosch
		Eric J. Dosch
		Chief Financial Officer

INDEX TO EXHIBITS

Exhibit Number	Description
Exhibit 99.1	Press Release April 26, 2023 "First Guaranty Bancshares, Inc. Announces First Quarter 2023 Results."

Document

EXHIBIT 99.1

APRIL 26, 2023

NEWS FOR IMMEDIATE RELEASE

CONTACT: ERIC J. DOSCH, CFO

985.375.0308

First Guaranty Bancshares, Inc. Announces First Quarter 2023 Results

Hammond, Louisiana, April 26, 2023 – First Guaranty Bancshares, Inc. ("First Guaranty") (NASDAQ: FGBI), the holding company for First Guaranty Bank, announced its unaudited financial results for the quarter ending March 31, 2023.

Extraordinary! That is the only word that is appropriate for the performance of First Guaranty Bank. In a time in which the “experts” are all about gloom and doom in the banking industry, extraordinary describes the performance of First Guaranty Bank.

Our loan interest income for the first quarter of 2023 totaled $38,149,000 compared to $35,579,000 for the fourth quarter of 2022 and $28,038,000 for the first quarter of 2022. Yes, our interest expense has significantly reduced our net income; however, that impact has been greatly reduced in the past few months as our loan income has risen to offset the rise in interest expense. As we enter the back side of this cycle, we have already moved past the worst period and should be benefiting greatly.

Our total deposits have grown to $2,862,588 for the quarter ending March 31, 2023 compared to $2,623,935 for the quarter ending March 31, 2022.

We have shown that we can not only survive this “gloom and doom;” but that we can thrive.

Our strength is further shown as our acquisition of Lone Star Bank in Houston continues to move forward through the regulatory process. Additionally, we have received preliminary approval from the City of Fate in Rockwall County for our branch plans in Fate, Texas. Between Lone Star and Fate, we will double our presence in the Texas markets. We are not stopping there. We will continue to seek out growth opportunities to better serve our customers and shareholders.

We recently paid our 119th consecutive quarterly cash dividend. Extraordinary is the right word. We appreciate your support of our efforts. We will continue to build First Guaranty Bank and to build a fortress balance sheet.

Thank you for your attention.

Sincerely,

Alton B. Lewis

President and CEO

First Guaranty, Bancshares, Inc.

About First Guaranty

First Guaranty Bancshares, Inc. is the holding company for First Guaranty Bank, a Louisiana state-chartered bank. Founded in 1934, First Guaranty Bank offers a wide range of financial services and focuses on building client relationships and providing exceptional customer service. First Guaranty Bank currently operates thirty-six locations throughout Louisiana, Texas, Kentucky and West Virginia. First Guaranty’s common stock trades on the NASDAQ under the symbol FGBI. For more information, visit www.fgb.net.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact which represent our current judgement about possible future events. We believe these judgements are reasonable, but these statements are not guarantees of any future events or financial results, and our actual results may differ materially due to a variety of factors, many of which are described in our most recent Annual Report on Form 10-K and our other filings with the U.S. Securities and Exchange Commission. We caution readers not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or otherwise revise any forward-looking statements.

Important Information and Where to Find It

This Report does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed acquisition by First Guaranty of Lone Star. No offer of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended, and no offer to sell or solicitation of an offer to buy shall be made in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

In connection with the proposed Transaction, First Guaranty has filed with the SEC a Registration Statement on Form S-4, as amended, that includes a proxy statement of Lone Star and a prospectus of First Guaranty (as may be further amended or supplemented from time to time, the “Proxy Statement/Prospectus”), and First Guaranty may file with the SEC other relevant documents concerning the proposed Transaction. The definitive Proxy Statement/Prospectus will be mailed to shareholders of Lone Star. BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS, SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BY FIRST GUARANTY, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT FIRST GUARANTY, FGB, LONE STAR AND THE PROPOSED TRANSACTION.

Free copies of the Proxy Statement/Prospectus, as well as other filings containing information about First Guaranty, may be obtained at the SEC’s website (http://www.sec.gov) when they are filed by First Guaranty. You will also be able to obtain these documents, when they are filed, free of charge, from First Guaranty at www.fgb.net under the heading “SEC Filings.” Copies of the Proxy Statement/Prospectus can also be obtained, when it becomes available, free of charge, by directing a request to First Guaranty Bancshares, Inc., 400 East Thomas Street, Hammond, Louisiana 70401, Attn: Investor Relations, (985) 375-0343.

Participants in the Solicitation

This Report is not a solicitation of a proxy from any security holder of Lone Star. However, Lone Star and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Lone Star in respect of the proposed Transaction. Information about Lone Star’s directors and executive officers will be contained in the Proxy Statement/Prospectus. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Proxy Statement/Prospectus and other relevant materials to be filed with the SEC when they become available. Free copies of this document may be obtained as described in the preceding paragraph.

FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except share data)		December 31, 2022
Assets
Cash and cash equivalents:
Cash and due from banks	168,456	$	82,796
Federal funds sold		423
Cash and cash equivalents		83,219
Investment securities:
Available for sale, at fair value		131,458
Held to maturity, at cost (estimated fair value of 254,284 and 242,560 respectively)		320,068
Investment securities		451,526
Federal Home Loan Bank stock, at cost		6,528
Loans held for sale		—
Loans, net of unearned income		2,519,077
Less: allowance for credit losses		23,518
Net loans		2,495,559
Premises and equipment, net		58,206
Goodwill		12,900
Intangible assets, net		4,979
Other real estate, net		113
Accrued interest receivable		13,002
Other assets		25,315
Total Assets	3,237,796	$	3,151,347
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing demand	519,028	$	524,415
Interest-bearing demand		1,460,259
Savings		205,760
Time		533,358
Total deposits		2,723,792
Short-term advances from Federal Home Loan Bank		120,000
Short-term borrowings		20,000
Repurchase agreements		6,442
Accrued interest payable		4,289
Long-term advances from Federal Home Loan Bank		—
Senior long-term debt		21,927
Junior subordinated debentures		15,000
Other liabilities		4,906
Total Liabilities		2,916,356
Shareholders' Equity
Preferred stock, Series A - 1,000 par value - 100,000 shares authorized
Non-cumulative perpetual; 34,500 issued and outstanding		33,058
Common stock, 1 par value - 100,600,000 shares outstanding; 10,716,796 shares issued		10,717
Surplus		130,093
Retained earnings		76,351
Accumulated other comprehensive (loss) income		(15,228)
Total Shareholders' Equity		234,991
Total Liabilities and Shareholders' Equity	3,237,796	$	3,151,347
See Notes to Consolidated Financial Statements

All values are in US Dollars.

FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
	Three Months Ended<br>March 31,
(in thousands, except share data)		2023		2022
Interest Income:
Loans (including fees)		$	38,149	$	28,038
Deposits with other banks		751		102
Securities (including FHLB stock)		2,387		2,339
Total Interest Income		41,287		30,479
Interest Expense:
Demand deposits		13,049		2,276
Savings deposits		579		61
Time deposits		3,576		2,755
Borrowings		1,782		404
Total Interest Expense		18,986		5,496
Net Interest Income		22,301		24,983
Less: Provision for credit losses		314		632
Net Interest Income after Provision for Credit Losses		21,987		24,351
Noninterest Income:
Service charges, commissions and fees		785		777
ATM and debit card fees		825		823
Net gains (losses) on securities		—		(17)
Net gains (losses) on sale of loans		12		(1)
Other		1,082		380
Total Noninterest Income		2,704		1,962
Total Business Revenue, Net of Provision for Credit Losses		24,691		26,313
Noninterest Expense:
Salaries and employee benefits		10,004		8,980
Occupancy and equipment expense		2,202		2,201
Other		7,960		5,570
Total Noninterest Expense		20,166		16,751
Income Before Income Taxes		4,525		9,562
Less: Provision for income taxes		1,057		1,977
Net Income		3,468		7,585
Less: Preferred stock dividends		582		582
Net Income Available to Common Shareholders		$	2,886	$	7,003
Per Common Share:
Earnings		$	0.27	$	0.65
Cash dividends paid		$	0.16	$	0.16
Weighted Average Common Shares Outstanding		10,716,796		10,716,796
See Notes to Consolidated Financial Statements
FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
---	---	---	---	---	---	---	---	---	---	---	---	---
CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)
	Three Months Ended March 31, 2023						Three Months Ended March 31, 2022
(in thousands except for %)	Average Balance		Interest		Yield/Rate (5)		Average Balance		Interest		Yield/Rate (5)
Assets
Interest-earning assets:
Interest-earning deposits with banks	$	72,506	$	751	4.20	%	$	231,556	$	102	0.18	%
Securities (including FHLB stock)	426,625		2,387		2.27	%	434,420		2,339		2.18	%
Federal funds sold	431		—		—	%	232		—		—	%
Loans held for sale	—		—		—	%	—		—		—	%
Loans, net of unearned income (6)	2,528,622		38,149		6.12	%	2,154,264		28,038		5.28	%
Total interest-earning assets	3,028,184		$	41,287	5.53	%	2,820,472		$	30,479	4.38	%
Noninterest-earning assets:
Cash and due from banks	19,269						18,481
Premises and equipment, net	58,152						58,393
Other assets	26,737						28,589
Total Assets	$	3,132,342					$	2,925,935
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Demand deposits	$	1,488,105	$	13,049	3.56	%	$	1,323,532	$	2,276	0.70	%
Savings deposits	204,271		579		1.15	%	204,008		61		0.12	%
Time deposits	561,154		3,576		2.58	%	576,199		2,755		1.94	%
Borrowings	120,803		1,782		5.98	%	47,886		404		3.42	%
Total interest-bearing liabilities	2,374,333		$	18,986	3.24	%	2,151,625		$	5,496	1.04	%
Noninterest-bearing liabilities:
Demand deposits	510,302						545,013
Other	12,749						6,839
Total Liabilities	2,897,384						2,703,477
Shareholders' equity	234,958						222,458
Total Liabilities and Shareholders' Equity	$	3,132,342					$	2,925,935
Net interest income			$	22,301					$	24,983
Net interest rate spread (1)					2.29	%					3.34	%
Net interest-earning assets (2)	$	653,851					$	668,847
Net interest margin (3), (4)					2.99	%					3.59	%
Average interest-earning assets to interest-bearing liabilities					127.54	%					131.09	%

(1)Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(2)Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

(3)Net interest margin represents net interest income divided by average total interest-earning assets.

(4)The tax adjusted net interest margin was 2.99% and 3.60% for the above periods ended March 31, 2023 and 2022 respectively. A 21% tax rate was used to calculate the effect on securities income from tax exempt securities for the above periods ended March 31, 2023 and 2022 respectively.

(5)Annualized.

(6)Includes loan fees of $1.4 million and $2.1 million for the three months ended March 31, 2023 and 2022 respectively. PPP loan fee income of $5,000 and $0.6 million was recognized for the three months ended March 31, 2023 and 2022 respectively.

The following table summarizes the components of First Guaranty's loan portfolio as of March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022:

	March 31, 2023				December 31, 2022				September 30, 2022				June 30, 2022
(in thousands except for %)	Balance		As % of Category		Balance		As % of Category		Balance		As % of Category		Balance		As % of Category
Real Estate:
Construction & land development	$	289,486	11.2	%	$	233,091	9.2	%	$	204,640	8.4	%	$	175,221	7.6	%
Farmland	23,065		0.9	%	24,823		1.0	%	24,556		1.0	%	28,152		1.2	%
1- 4 Family	385,984		14.9	%	366,330		14.5	%	352,501		14.5	%	310,403		13.5	%
Multifamily	120,620		4.7	%	119,785		4.7	%	118,273		4.9	%	105,454		4.6	%
Non-farm non-residential	1,027,199		39.8	%	992,929		39.3	%	981,954		40.5	%	962,442		41.8	%
Total Real Estate	1,846,354		71.5	%	1,736,958		68.7	%	1,681,924		69.3	%	1,581,672		68.7	%
Non-Real Estate:
Agricultural	40,351		1.6	%	39,045		1.5	%	47,642		2.0	%	37,164		1.6	%
Commercial and industrial(1)	344,332		13.3	%	385,279		15.3	%	365,549		15.1	%	397,233		17.3	%
Commercial leases	302,450		11.7	%	317,574		12.6	%	281,010		11.6	%	237,560		10.3	%
Consumer and other	49,157		1.9	%	47,864		1.9	%	48,188		2.0	%	48,448		2.1	%
Total Non-Real Estate	736,290		28.5	%	789,762		31.3	%	742,389		30.7	%	720,405		31.3	%
Total loans before unearned income	2,582,644		100.0	%	2,526,720		100.0	%	2,424,313		100.0	%	2,302,077		100.0	%
Unearned income	(8,402)				(7,643)				(6,986)				(6,339)
Total loans net of unearned income	$	2,574,242			$	2,519,077			$	2,417,327			$	2,295,738

(1) Includes PPP loans fully guaranteed by the SBA of $5.7 million, $5.9 million, $6.1 million, and $12.0 million at March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022, respectively.

The table below sets forth the amounts and categories of our nonperforming assets at the dates indicated.

(in thousands)	March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022
Nonaccrual loans:
Real Estate:
Construction and land development	$	221		$	225		$	104		$	—
Farmland	677			290			290			290
1- 4 family	6,209			3,826			3,646			3,148
Multifamily	—			—			—			—
Non-farm non-residential	2,675			3,746			2,629			2,925
Total Real Estate	9,782			8,087			6,669			6,363
Non-Real Estate:
Agricultural	1,469			1,622			1,645			1,791
Commercial and industrial	1,026			819			876			864
Commercial leases	1,799			1,799			—			152
Consumer and other	1,593			1,239			1,168			991
Total Non-Real Estate	5,887			5,479			3,689			3,798
Total nonaccrual loans	15,669			13,566			10,358			10,161
Loans 90 days and greater delinquent & accruing:
Real Estate:
Construction and land development	190			427			326			—
Farmland	—			—			—			—
1- 4 family	—			332			359			210
Multifamily	—			157			13			—
Non-farm non-residential	1,641			103			318			508
Total Real Estate	1,831			1,019			1,016			718
Non-Real Estate:
Agricultural	—			—			—			—
Commercial and industrial	6,244			123			444			123
Commercial leases	—			—			—			—
Consumer and other	—			—			—			—
Total Non-Real Estate	6,244			123			444			123
Total loans 90 days and greater delinquent & accruing	8,075			1,142			1,460			841
Total non-performing loans	23,744			14,708			11,818			11,002
Real Estate Owned:
Real Estate Loans:
Construction and land development	—			—			—			—
Farmland	—			—			—			—
1- 4 family	113			113			249			218
Multifamily	—			—			—			—
Non-farm non-residential	774			—			1,418			1,416
Total Real Estate	887			113			1,667			1,634
Non-Real Estate Loans:
Agricultural	—			—			—			—
Commercial and industrial	—			—			—			—
Commercial leases	—			—			—			—
Consumer and other	—			—			—			—
Total Non-Real Estate	—			—			—			—
Total Real Estate Owned	887			113			1,667			1,634
Total non-performing assets	$	24,631		$	14,821		$	13,485		$	12,636
Non-performing assets to total loans	0.96		%	0.59		%	0.56		%	0.55		%
Non-performing assets to total assets	0.76		%	0.47		%	0.44		%	0.43		%
Non-performing loans to total loans	0.92		%	0.58		%	0.49		%	0.48		%
Nonaccrual loans to total loans	0.61		%	0.54		%	0.43		%	0.44		%
Allowance for credit losses to nonaccrual loans	201.47		%	173.36		%	226.57		%	232.09		%

Non-GAAP Financial Measures

Our accounting and reporting policies conform to accounting principles generally accepted in the United States, or GAAP, and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional metrics. Tangible book value per share and the ratio of tangible equity to tangible assets are not financial measures recognized under GAAP and, therefore, are considered non-GAAP financial measures.

Our management, banking regulators, many financial analysts and other investors use these non-GAAP financial measures to compare the capital adequacy of banking organizations with significant amounts of preferred equity and/or goodwill or other intangible assets, which typically stem from the use of the purchase accounting method of accounting for mergers and acquisitions. Tangible equity, tangible assets, tangible book value per share or related measures should not be considered in isolation or as a substitute for total shareholders' equity, total assets, book value per share or any other measure calculated in accordance with GAAP. Moreover, the manner in which we calculate tangible equity, tangible assets, tangible book value per share and any other related measures may differ from that of other companies reporting measures with similar names.

The following table reconciles, as of the dates set forth below, shareholders' equity (on a GAAP basis) to tangible equity and total assets (on a GAAP basis) to tangible assets and calculates our tangible book value per share.

	At March 31,			At December 31,
(in thousands except for share data and %)	2023			2022			2021			2020			2019
Tangible Common Equity
Total shareholders' equity	$	228,676		$	234,991		$	223,889		$	178,591		$	166,035
Adjustments:
Preferred	33,058			33,058			33,058			—			—
Goodwill	12,900			12,900			12,900			12,900			12,942
Acquisition intangibles	4,181			4,355			5,051			5,815			6,527
Tangible common equity	$	178,537		$	184,678		$	172,880		$	159,876		$	146,566
Common shares outstanding	10,716,796			10,716,796			10,716,796			10,716,796			10,716,796
Book value per common share	$	18.25		$	18.84		$	17.81		$	16.66		$	15.49
Tangible book value per common share	$	16.66		$	17.23		$	16.13		$	14.92		$	13.68
Tangible Assets
Total Assets	$	3,237,796		$	3,151,347		$	2,878,120		$	2,473,078		$	2,117,216
Adjustments:
Goodwill	12,900			12,900			12,900			12,900			12,942
Acquisition intangibles	4,181			4,355			5,051			5,815			6,527
Tangible Assets	$	3,220,715		$	3,134,092		$	2,860,169		$	2,454,363		$	2,097,747
Tangible common equity to tangible assets	5.54		%	5.89		%	6.04		%	6.51		%	6.99		%