Good afternoon, everyone. Thank you for joining us today. So we will have some attending virtually, who hopefully can hear now, and then those of you in the room. So for those of you attending virtually, if you need help at any time during this session, please call the number that should show up on the screen shortly, and that's 813-308-9980, and enter access code 675813. Can you confirm, Carl, if everyone on the line can hear? Okay, perfect. Thank you. If you've already mailed in your proxies, there's no need to take any action at this time. However, if you have not, and you are attending this session virtually, I encourage you to send it in now.
You may send your proxy ballots to First Guaranty Bank via fax at 985-348-0537, or email a copy to investorrelations@fgb.net. Please do so within the next 5 minutes. For those who are here in person, if you still need to submit your proxy, you will have an opportunity to do so later in the meeting.
Recording in progress.
Our standard disclosures regarding forward-looking statements are on slide four, so we'll just take a second to pause there. At this time, I'd like to give the floor to Mr. Marshall Reynolds, Chairman of the Board.
Good afternoon, ladies and gentlemen. I'm Marshall Reynolds, Chairman of the Board. On behalf of the directors, officers, and staff at First Guaranty Bank, I would like to welcome everyone here this afternoon to the 2024 Annual Shareholders Meeting of First Guaranty Bancshares, Inc. At this time, I'd like to introduce Mr. Tony Berner, one of the First Guaranty Bank directors representing Ponchatoula, who will lead us in invocation to begin our meeting today. Would you please stand?
Heavenly Father, we come to you this day and ask for your blessing and help as we gather. We would pray for guidance in the matters at hand and ask that you would clearly show us how to conduct our work with a spirit of joy and enthusiasm. Give us the desire to find ways to excel in our work. Help us to come together and encourage each other to excellence. We ask that we challenge each other to reach higher and farther to attain the goals that we have set for ourselves, for it is in Your Holy Name that we pray. Amen.
Well, guys, and girls, you know, 2024 shareholders meeting may be a little uncomfortable. If we look back to 2022, and we read our quarterly reports and annual reports, and we noticed that, Mr. Lewis constantly referred to a Fortress balance sheet. And boy, in 2023, we really needed this Fortress balance sheet. You know, the Fed raised interest faster than in any other time in history and got everyone shaking their heads. Cost of funds went up, loan interests were flat, most of them made on five-year terms, so on and so forth. So we had a tremendous negative squeeze. I think the fourth quarter, I think we only made $700,000, and barely came back in the first quarter, but made $1 million or something like that.
But one thing you got to remember about this Fortress balance sheet, everybody got their dividend in December, and everybody got their dividend in March. We raised $20 million from the directors during the course of the year. So we had that Fortress balance sheet and certainly have enjoyed it. In the second quarter of this year, we've got this thing coming back. Look at the third quarter, the fourth quarter. The government talked about 4 interest rate reduction this year. I said, "Well, they might have the first one in March." Didn't happen. So everybody looked at April, and then they said, "Well, it might be in May." Didn't have it in May. So we're probably maybe only going to have 2 interest rate reductions this year. And looking ahead, it'd probably be in first one will probably be in July.
The second one will probably be right before the election. But this 2023 has been a hell of a year. And certainly, it's been a hell of a year for our bank. But we have got it together. Your board of directors is focused on this. Your management is focused on it, and we're going to get this thing turned back around... and get it going just like it was, only better, because there's more of us now, and we're better folks. At this time, I'd like to turn the meeting over to Alton Lewis. See, I can't read this without my glasses. At this time, I'd like to introduce you to Alton Lewis, Vice Chairman of the Board, Chief Executive Officer, and President of First Guaranty Bank and First Guaranty Bancshares. Mr. Lewis will conduct today's meeting. Thank you.
Thank you, Chairman Reynolds. Good afternoon, and welcome to the 2024 Annual Shareholders Meeting of First Guaranty Bancshares. The meeting is officially convened. At this time, I would introduce the following individuals. Please stand when you're introduced. First of all, Jonathan Lett from the accounting firm of Griffith, DeLaney, Hillman, and Lett, CPAs. Is he here? There he is. Okay. He is our external auditor, right? Did I get that right? Okay. Thank you. The recording secretary to the board, Vanessa Drew. The members and nominees of the First Guaranty Bancshares Board of Directors are Marshall T. Reynolds. You previously met him. William K. Hood. Where'd he go? There he is. Mr. Hood is the chairman of the Audit Committee, the Directors Loan Committee, the Compliance Review Committee, and the Marketing Committee of the bank. He is the president of Hood Automotive Group.
He's the longest-serving director, having been on the bank's board of directors since 1977. Thank you, Mr. Hood. Your hair, your hair color's changed over the years. Me, Alton B. Lewis. Jack Rossi. There he is, next to Mr. Hood. Mr. Rossi's been a holding company board member since February of 2018, a bank board member since March 2018. He's a certified public accountant in West Virginia and Virginia, with over 40 years of public accounting experience. Mr. Rossi is the Executive Vice President of Business Development at Summit Community Bank in West Virginia. He was a partner with the West Virginia accounting firm of Arnett & Foster when he managed their financial institutions practice until he retired from that firm in 2013. Mr.
Rossi is a past president of the West Virginia Society of CPAs and has served as a member of the West Virginia Board of Accountancy. He apparently knows a little bit about accounting, so... Edgar R. Smith III. Mr. Smith was appointed to the company's board of directors in October 2014, has been a member of the bank's board of directors since February 2007. Mr. Smith is the chairman and CEO of Smitty's Supply Incorporated, the chairman, president, and CEO of Latch Oil Incorporated, the chairman of Chem II International LLC, the president of Big 4 Trucking and affiliates Big 4 Investments, Jackson Energy, and X-Ray Systems. Mr. Smith is a busy man. Vanessa, which you met. She's an assistant vice president and administrative officer of the bank, with over 40 years of banking experience at First Guaranty Bank.
She is the recording secretary to the board of directors of First Guaranty Bancshares, as well as First Guaranty Bank and the audit committee, investment committee, and the annual shareholders meeting. Ms. Drew is the chairwoman of the Contributions Committee, handles shareholder services and the transfer agent desk. Vanessa is a notary public for the state of Louisiana since 1990. She attended Southeastern Louisiana University and was a past member of the American Businesswomen's Association. The members of the First Guaranty Bank board of directors are Mr. Berner, who you previously met. He's now retired. They look relaxed and rested. He's a former consultant, a Gold Star. He was with Gold Star Food Group and the President of Pon Food Corporation of Ponchatoula. Mr. Berner joined the board of directors in May of 1997. Gloria Dykes. Mrs. Dykes? Mrs.
Dykes is the owner of Dykes Beef Farm and part owner of Dykes Feed and Fertilizer in Montpelier, and Bluff Creek Properties and Washington Parish Properties. Ms. Dykes was elected to the bank board in July of 2011. Dr. Fincher. Dr. Fincher is a retired economics and finance professor at Louisiana Tech University. He's the vice president of the board of Claiborne Electric Cooperative since 2004, vice president of the 1803 Electric Cooperative Board since 2019, and the owner of C&B Ranch since 1969. Dr. Fincher was elected to the board in March of 2008 and serves on the North Louisiana Advisory Board. And I have to add this over here.... He has his PhD that he got from the University of Mississippi. Robert Gabriel.
Bob is the president of Gabriel Building Supply Company of Ponchatoula, and they meet. He was elected in 2007 and is a former director of Ponchatoula Homestead. Andrew Gasaway Jr. Andrew is the president of Gasaway, Gasaway Bankston Architects. He's the secretary to the board of directors of First Security Bank. He's been on the board since 1978. Mr. Hood. Edward L. Hoover Jr. There he is. He's been a board member since 1994. He is the president of Encore Development Corporation, with over 50 years of professional experience as a real estate investor and developer and business owner. His various real estate investments include warehousing, shopping centers, and office buildings. And he'll be glad to remind you, he's also an actor, right? Alton B. Lewis. Bruce McAnally, who's not with us today. Mr.
McAnally joined the bank's board of directors in June 2017 with the acquisition of Premier Synergy Bank, where he served as chairman of the board. Mr. McAnally is a registered pharmacist and independent pharmacy owner residing in Austin, Texas. He serves as the founder and director of RxPreferred Benefits in Nashville, Tennessee, and as director of Best Value Pharmacies in Fort Worth, Texas, and he was a founder of Paragon Healthcare in Dallas, Texas. Morgan S. Nalty. Morgan is an investment banking executive and partner in the firm of Johnson Rice & Company L.L.C. Mr. Nalty joined the board of directors in 2001. Jack M. Reynolds. Jack has been a board member since January 2018. He's a native of Huntington, West Virginia. Currently serves as vice president of Trifecta Productions, vice president of Pritchard Electric, and secretary of the ADJ Corporation.
He serves on the boards of Energy Services of America and Harrah and Reynolds Corporation. Marshall Reynolds, who you previously met. Ms. Nancy Reavis. Nancy is the owner of Reavis Holdings, LLC. She was elected to the bank's board of directors in 2011 and is a former director of the Bank of Greensboro. Jack Rossi, that y'all have previously met. Richard W. Sitman, better known as Dickie. Mr. Sitman was elected to the board in July of 2011 and is a former director of the Bank of Greensboro. He serves on the board of directors of Dixie Electric Membership Corporation. He's the board president of Dixie Business Center and is on the board of the Association of Louisiana Electric Co-ops. Anne A. Smith. Ms. Smith has been a board member since 2018.
She is a member of the Southern University Board of Supervisors, the Southern University Chairwoman Emeritus, a former member of the Louisiana Office of Student Financial Assistance Advisory Board, and the Tangipahoa Parish School Board. As a retired educator, she served as principal, assistant principal, coach, and teacher at Kentwood High School. She is a inaugural committee member of the Anderson Ray Lato Memorial Fund. And I have to add this every year, too. State champion coach in, I think, basketball and track, right? So quite a person. Edgar R. Smith III, who was previously introduced. The North Louisiana Advisory Board is comprised of... Are they up there? Yeah. Dr. Fincher, Thomas Dale Crump Jr., John Davidson Gladney, Carrell Gilmer Dowies III, and Britt Lamar Synco. The proxies for today's meetings are Marshall Reynolds and Eric J. Dosch.
Eric, you want to stand up so they can see you? The inspectors of election for today's meetings are Kristen Williams, the chairperson, Diane Lanier, Landon Dohmann , and Catherine Campbell. Now, the meeting starts. At the inspectors of election table, the following material is available for review. And where is that table? Is that where you are?
Right outside the door.
Outside the door, okay. So you can see these things. List of the shareholders of record as of the close of business on March 25, 2024, an affidavit showing the proof of notice of the meeting and the proxy statement and the form of proxy, which have been given to every stockholder of record as of March 25, 2024. You will see the inspectors' election oath of office and the quorum certificate for the inspectors of the election. The inspectors of the election have informed me that a quorum is present, either by proxy or in person. There's a certificate available at the election table if you would like to review that. There are 4 proposals on the docket for the meeting today.
Number 1 is to elect the board of directors to serve until the next meeting of shareholders and until their successors are duly elected and qualified. These are the directors of the holding company. The nominees are William K. Hood, Jack Rossi, Alton Lewis, Edgar R. Smith III, Marshall T. Reynolds, and Vanessa Drew. Secondly, to approve an advisory non-binding resolution regarding our executive compensation as it's described in the proxy statement. Third, to ratify the appointment of Griffith, DeLaney, Hillman, and Lett CPAs, PSC, as First Guaranty's independent registered public accounting firm for the year ending December 31, 2024. And fourth, to transact such other business as may properly come before the meeting or any adjournment or postponement thereof. Since there are no other nominations, in accordance with the holding company's bylaws, the nominations are closed. The polls are now open.
Are there any votes to be cast by proxy or ballot? Anybody need to vote? No. If there were, the inspectors of election would collect the ballots now, but there are none, so we'll move on. I now declare the polls closed. Inspectors of election, would you please count the votes and return with the election results? The next matter is, do I hear a motion to dispense with the readings of the minutes from the 2023 annual shareholders meeting? Motion by Mr. Hoover, second by Ms. Reavis. Any opposition? And at this time, I'd like to proceed with a presentation reflecting the performance of First Guaranty Bank. That's right. I think I turned it back over to you, Donna.
So for the last 3 years, First Guaranty Bank was named the best small bank in America. That did not happen this year. We were not named Best Small Bank in America this year, but that's just because Newsweek did not award that category at all. So we get the honor of saying that for all 3 years that it was awarded, we were the winners. So what we did do this year, though, we marked our 90th year in business, and we celebrated 90 years giving back and with our Spirit Week like we do every year. So I thought it would be fun just to kind of give you guys a collage of the fun that we have while we're at work.
So for Spirit Week, every day we had a theme, so you dressed up according to that theme, whether it was Candy Day or '90s Day or Spirit Day, and then dressed with something using the first letter of your name. That was a fun day. But I think that the day that the most people had fun with was Freaky Friday. So for those of you who don't know, Freaky Friday was a movie where two people traded places. So this was a day where everyone could be their fellow fanatical banker, so they could be someone else. And as you can see, we all got into the spirit, and it seems a lot of people wanted to be Alton for the day. So I thought that was funny.
So, but also for the ninetieth year, we, you know, we took a serious note, too, because we also wanted to continue to reinforce our community involvement in giving back. So what we did is we actually produced a commercial to show what we do in the community, but also to encourage other businesses in our community to do the same. So I want to show you the commercial today. Mm-hmm. Yeah, it does have volume.
It's in our blood.
My apologies, I'm just going to go ahead and restart.
We're committed to each other. It's who we are, what we were founded on. It's in our blood. We're not only the bankers you see at your local branch, we live, work, and play here in our communities. Giving back to the communities we call home is one of the most important things we can do, and we hope you'll join us in doing the same. First Guaranty Bank, 90 years of fanatically giving back.
I hope you guys could hear that.
We're committed.
So now it's time for the management team to present their reports to you. I will give the floor now to Eric Dosch, our CFO.
All right. Thank you, Desiree. Good afternoon. As our CFO, I'll speak to improvements that we've made in order to move our company forward through these challenging economic times. During the last year, we took several steps to reduce First Guaranty's exposure to rising interest rates while still maintaining the ability to benefit, should interest rates decline. We extended federal, long-term Federal Home Loan Bank advances that provided $135 million of fixed rate funding until 2027. This paid off short-term floating rate borrowings at higher costs. We issued $175 million of select fixed-rate brokered CDs that mature out to 2027. Our Chief Deposit Officer has negotiated-...
negotiated rate concessions on numerous public fund accounts since June of last year, that saves approximately $825,000 of interest expense on an annual basis, even if interest rates do not change. We've continued to grow deposits, especially in our newest markets of Kentucky and West Virginia. Our liquidity remains strong. On-balance sheet, cash exceeded $300 million at March 31, 2024, double our level from March 2023, and we currently earn 5.4% on our surplus cash liquidity. Our loan portfolio continues to reprice higher. The average yield on the loan portfolio improved to 6.83% for the first quarter of 2024, compared to 6.66% in the fourth quarter of 2023.
The loan yield was 6.12% for the first quarter of 2023, a year ago. Our net interest margin improved to 2.58% in the first quarter of 2024, compared to the 2.53% in the fourth quarter of last year. We continue to work to reduce our non-interest expense, which was lower in the first quarter of 2024 compared to the fourth quarter of 2023, and it was also lower compared to a year ago. Our net income improved in the first quarter of 2024 compared to the fourth quarter of 2023. Our net income to our common shareholders was $1,007,000, compared to $721,000 for the fourth quarter of 2023.
We believe that our efforts will keep making First Guaranty better each day and result in stronger growth and improved earnings over time. We're gonna continue to keep this positive momentum going forward. Now I'll give the floor to Randy Vicknair, our Chief Lending Officer. Randy?
Thank you, Eric. In a year that brought us interest rate hikes, liquidity challenges, and major bank failures, the First Guaranty Bank team pulled together and remained resilient to provide the same great service to our customers and advancement for our company. Our focus in lending continues to be on the expansion of our guaranteed lending and small business initiatives, as these programs aid in identifying and securing quality loans for the bank. As part of this initiative, we recruited an SBA business development officer to serve as a resource to our lending team, assisting with the identification and structuring of SBA lending opportunities. The addition of our Texas Mortgage Department manager and team members in 2023 have provided new mortgage loan originations in that market, providing key diversification, along with the continued contribution from our Louisiana and MidEast mortgage teams.
As a community bank, the contributions from our mortgage team are crucial to our community reinvestment initiatives. We continue to observe an increase in small business loan opportunities of $5 million and lower. This not only provides a steady source of loan opportunities, but these loans are community bank loans that build a solid foundation for our bank. Additionally, these opportunities tend to be less transactional and incorporate the entire business relationship, including loans, deposits, and other cash management services. This is important, as a secondary initiative of the lending team is deposit growth, generating over $30 million in new deposits for 2023, with an aggregate contribution of over $180 million in new deposits over the last four years.
The lending strategic initiatives led to over 9% net loan growth in 2023, as well as 38% loan interest income growth and strong increasing loan yields. Additionally, I'm very excited to announce that for the second year in a row, First Guaranty Bank received a lending award, receiving the Louisiana Economic Development's 2024 Community Impact Award for Most Valuable Bank. Combined with last year's USDA Top Lender in Louisiana award, we're excited by these wonderful accomplishments, and we'll continue to build on them moving forward into 2024. As important as these items are, we do not sacrifice them for credit quality, as credit quality remains the utmost importance. I'll turn it over to Colton McDaniel, our Chief Credit Officer, to explain more about the continuing improvements in our credit process.
Thank you, Randy. To follow up on Randy's comments, continuing to improve our credit process in 2024, our credit team continues to grow, and for the third year in a row, we have underwritten over 1,000 commercial loans for a total of $2 billion, not including our consumer and mortgage lending. Of the $2 billion in loans, over $900 million proceeded to closing. Our staff has grown in numbers and experience since last year, with experts in SBA and USDA lending, as well as C&I lending. This will complement Randy's small business loan opportunities of $5 million and less well. We continue to sharpen our understanding of the CECL methodology, moving into our second year under the new standard by maintaining our allowance for credit losses, or ACL, of $31.5 million, or 1.14% of total loans.
We continue to closely monitor our commercial real estate portfolio. We are commencing our annual stress testing of this portfolio. We stress via EBITDA decreases, interest rate increases for the variable rate loans, and collateral valuation decreases and their effect on loans of value for the real estate collateral. We also segment our commercial real estate portfolio by location, to manage location and local economic risk. Our risk-based pricing platform has helped us navigate proper returns, given the FOMC's volatility with rates. The model helps us price to a risk-adjusted rate of return based upon asset class and forward-looking pricing curve. This helps us ensure our shareholders are properly compensated for our loan portfolio during this challenging economic environment.... Of course, our most important resource is our people. They provide knowledge and expertise to allow us to effectively identify and mitigate risk in our loan portfolio.
We are partnered with Southeastern Louisiana's business programs and the Commercial Banking Initiative academic program at LSU. These partnerships allow us to maintain further training, research, and recruiting resources. Additionally, we are very excited about our Abrigo implementation this year, which will strengthen our underwriting process and help us maintain credit administrative tasks, such as financial document gathering, to help our lending and credit staff better analyze our borrowers and their creditworthiness. I'll be followed by Mark Ducoing, our Chief Deposit Officer, as he gives his insights on deposit strategies and exceptional customer services initiatives.
Thank you, Colton. Good afternoon, everyone. Our deposit portfolio remained very stable and has grown by about 6.9% year-over-year. This is almost identical to the growth that we experienced in loans over the same period of time, and we'll continue to maintain our deposit growth in equivalence with the liquidity needed to support our loan portfolio. We focus on liquidity management each day, and we're committed to maintaining a daily liquidity ratio above 10%. We absorbed the wave of historic Fed rate increases into the cost of our deposit portfolio, and we're now positioned to see upcoming expansion of our net interest margin as our loans continue to reprice. We continue to see strong demand for certificates of deposit. We are growing this sector of our deposits, but we focus this growth on accounts with maturities of 18 months or less.
This positions us to take better advantage of future rate cuts that may come over the next few months. Our new Mideast market has greatly supported our growth in deposits over the last year. The recent opening of our new branch in Bridgeport, West Virginia, will help maintain this level of growth throughout 2024 and into 2025. Michael Mineer, our Mideast Area President, will touch on this deposit success a little bit later in this presentation. We do continue to leverage our strong partnership with IntraFi to offer our customers the safety of FDIC insurance coverage on their larger deposits. We currently have $757 million in ICS and CDARS accounts and have successfully used this tool to obtain many new consumer and commercial clients.
This aids in our ability to maintain our level of uninsured deposits at approximately 10% of total deposits, if you exclude our fully insured or secured public fund deposits. We are very confident in the long-term stability of our deposit base. Speaking of public funds, we have experienced continued growth in the balances maintained by our existing public funds customers over the past year. We did successfully renew nearly every contract that matured since December 2022, and as Eric mentioned, we obtained many rate concessions on these renewals. The average tenure of our top 10 largest public fund clients is over 25 years with the bank, and we are proud to be the fiscal agent for some of the key governmental agencies in the communities we serve. A strong deposit franchise, though, is only possible if we deliver outstanding customer service.
We use Avannis as our partner to independently monitor and test the customer service quality of all of our customer-facing departments. I'm proud to say that our overall average satisfaction rate is over 91% and has improved every year since we began testing in 2021. Our average customer satisfaction is a full 3% higher than the national average as calculated by Avannis. Additionally, our customer contact center answers calls within an average of 10 seconds, and you actually speak to a real banker for assistance. We are very proud of the service levels we deliver each and every day to our customers. In summary, our focus going forward is to maintain our deposit growth in line with our loan growth, to provide a strong and stable source of funds to fuel the growth of First Guaranty Bank.
But as we grow, we will never lose sight of our community roots and our fanatical commitment to customer service. So I'll now turn the presentation over to Mike Mineer, our Mideast Area President. Mike?
Thank you, Mark. It's certainly an opportunity and excited to be able to tell our story today on how we got here. It was in the fall of September of 2021, there was a company called Premier Financial. We were a $2.2 billion publicly traded company, and we sold. Marshall was the chairman. I was one of the executives at the holding company. We owned a bank called Citizens Deposit Bank and Trust, and I was the CEO. Marshall is the glue that brought us here, and that's the journey on how we came. Very quickly, we negotiated an asset purchase from the company we sold to, $60 million in loans, and then very quickly in the fall, November of 2021, 12 members of our team moved over to start our new challenge. When we came here, Marshall and Mr.
Alton tasked us with $300 million in asset growth in 3 years. Today, on the board, you see where we are today. Today, we have $315 million in loans on the books. We have total, with participations, over $342 million, with those participations sold. In Bridgeport, you can see they've been tremendous producers for $263 million in total production. Loans sold, you'll see there, of about $26 million. And in Kentucky, we have $79 million in outstanding assets... We were also tasked during that same time to open 2 full-service locations. We opened in January of last year, 2023, an office in Kentucky. We have over 1,100 new accounts, over $56 million in new deposits in our first year. Likewise, we just opened Bridgeport, West Virginia. That has opened last month.
We already have over 100 new accounts, with over $22 million in total deposits. Collectively, today, we're probably over $80 million in new deposits in the Mideast. That is gonna be a significant challenge for us to fund deposits for the loans that we've grown in the past. Lastly, I'll say that the addition of the Mideast team to First Guaranty adds geographic asset diversification, as well as new markets for deposit growth. As I conclude, I will say that we collectively have gone where few banks would venture to go, with such geographic distance, state, legal, and banking cultural differences, and yet these numbers show the resolve of all involved to make it happen. The success of the Mideast team is from the support provided by our CEO, Mr.
Alton Lewis, the directors, and the management of First Guaranty Bank, and the resolve of our chairman, Marshall T. Reynolds, to bring us all together and to prove to the world we can do what many would never try to achieve. That is our story. I thank you for listening, and now I will turn it over to Mr. Jordan Lewis, our Area President in Texas.
Thank you, Mike. He's a tough act to follow. However, it is my privilege, as, as a native son of Hammond, Louisiana, to tell you First Guaranty Bank's story and success in Texas. When we entered the state in 2017, we were told by many how competitive the market is and how difficult it would be to get into these Texas communities. Well, seven years later, the people of Texas now know that First Guaranty Bank is no cookie-cutter bank. We're a true community bank that treats people with dignity and respect, and earns their business. Deposits, relationships, loans, and profits have steadily grown. From 2018 to 2022, they were good years. 2022 was a great year for a lot of banks.
It was in 2023 that we saw record-breaking results in Texas, with over $155 million in new loans originated. Despite national headwinds driving up rates, net interest income in Texas actually grew significantly, contributing 50% more than it had in the previous year to the bank's profits. At the same time, First Guaranty Bank invested in an even brighter future in Texas, hiring community-minded lenders, leaders, and bankers across DFW, including a Texas mortgage director, so we could ensure that our industry-leading mortgage products were now accessible to the 8+ million people in DFW, and the 30+ million people across Texas. The end result is that now the Texas communities are seeking out First Guaranty Bank and asking us to come to their markets.
We have plans to do just that, with immediate target locations in Fate and Cedar Park, Texas, actively being pursued in 2024. With such a strong organization, leadership, and vision, it's no wonder that Texas loves First Guaranty Bank now, and which is why we are flourishing and delivering strong returns to you from there. I look forward to the chance to update you again next year, but for now, I'm gonna turn the floor over to our Chief Information Officer, Coby Pennington, to go over the successes in our information technology department.
Thank you, Jordan. Good afternoon. As the Chief Information Officer, I'm excited to share significant strides that we've made in IT operations over the past year and outline the vision moving forward. Talking about digital transformation initiatives, over the past year, we've reorganized the IT organization to improve efficiency and delivery and cost of IT services. We continue to implement automations where it enhances accuracy, reduces time, and saves money. By embracing emerging technologies, we've been able to implement automations quickly and cost effectively, and these improvements will only continue to grow over time. In our 2024 budget projections, we project significant savings over 2023, largely due to optimization, including a 50% reduction in leased data lines and over a 60% reduction in professional services and external consulting costs.
A major focus for our department is innovation and implementation of banking software and process improvements. We've also made improvements with our vendor management, ensuring that our relationships with third-party providers are yielding favorable agreements for the bank in terms of pricing, performance, and security controls. Those initiatives will help us more with our operational efficiency and cost reduction. In cybersecurity, which is a top priority, in partnership with our CISO, Kenny Wilson, we continue to fortify our defenses against the ever-evolving threat landscape. External audits have shown continued progress in compliance and reduction in risk. Our proactive approach helps ensure the security and integrity of the data that our customers entrust us with and our operations.
Looking to the future, we have several exciting IT projects on the horizon, further enhancements to our mobile banking platform, and fintech partnerships that will help keep us competitive, responsive to market demands, and support our bank's financial performance goals. In conclusion, our IT strategy is robust and forward-thinking. It's an integral part of the bank's overall success. We're setting the stage not only for a future that is profitable, but also more efficient and innovative. Thank you for your continued trust, and at this time, I will give the floor back to Mr. Lewis.
A great group. A great group. 2023, as Mr., excuse me, has indicated, was a very painful time for us. Mr. Reynolds continued his leadership, but the Federal Reserve decided that it was gonna raise interest rates instantly several times, which meant that what we had to pay for interest was going up dramatically, but what we were getting paid for interest didn't change so fast. Now, what does that mean? That means that income shrunk. We did nothing wrong, nothing wrong. It was simply the vagaries of the market and of the government, but we had to cope with it. We had to adjust to it, and I'm proud to say that our entire team came together to make that adjustment.
Our lending and our loan production people and credit, everybody worked hard to get new loans in, because the only thing we could do is get new loans with higher rates, or get our customers to come in and change their loans so that... Or renew them, so that we could raise the rate. Now, in 2023, I had numerous customers ask me if we could raise the rate that they were getting on their CDs and their deposits, 'cause things were going up. Strangely, not a single loan customer came in and asked if we would raise the rate that they have to pay on their loans. So that's what we had to deal with, but our team came together and did the right thing.
I mean, we have, as you see here, as you've seen from, from the various presentations, a very strong team, a very committed team, a very positive team. And everybody came together to do what we needed to do to survive and to continue to make money. Everybody worked hard to get I mean, just loans are up, you know? In that time of rising rates, loans are up, deposits are up. Everything's going counter to what you would think would be happening, because what the government was planning on doing was put us all in a depression so that, you know, inflation would go away. Of course, I never did understand. They don't like inflation, but then they, they passed the Inflation Reduction Act, which put out what? $7 billion of money out there to cause inflation. But I don't understand our leadership sometimes.
Anyway, what I'm telling you is, we have done what we need to do. We've stayed profitable. We've continued to grow. We have stayed together. Although we had to cut expense, we had to rein in hiring, everybody's attitude was positive. It's, you know, we're working together. We're building something, we're doing something. And I appreciate everything that all of our staff did, that our directors did, that our shareholders have put up with, and I thank all of you. But I can tell you, we're gonna be a lot stronger, we're gonna be a lot better. We've learned a lot, we're gonna continue to learn, and we're gonna continue to be a cohesive team that works to take care of our communities, to take care of our employees, to take care of our shareholders, and to move forward. So I appreciate your patience.
I appreciate you being here today, and thank you. Oh, now that's where I just need to turn to the script. Okay. That's a good idea. May we have a report from the Inspectors of Election Chairperson, Kristen Williams?
Good afternoon. All of the votes have been tallied. The proposals presented today have all been elected by a majority of the vote. I know like my presentation, it's the shortest.
Thank you, Ms. Williams. Do I hear a motion to accept the report of the inspections of the election on the results of the election? Mr. Doughty . Second by Ms. Dykes. Thank you. I now ask for a motion to approve and ratify all action of the board of directors, officers, and personnel since the last annual meeting. Do I hear such a motion? Mr. Hoover. Mr. Berner is the second. Now, this is gets to the fun part. If there is no other business, then I ask for a motion for adjournment. Mr. Gasaway, is there a second? Mr. Hood. That concludes the meeting. Thank you very much. See you next year.