Company: FGBI
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001408534-25-000070
Chunk: 227

Company: First Guaranty Bancshares, Inc.
Filing Date: 2025-08-18
Form: 10-Q
Item: Part I, Item 3
Chunk 227
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 the consolidated financial statements as included in this Quarterly Report on Form 10-Q present fairly, in all material respects, the Company's financial condition, results of operations and cash flows as of and for the periods presented in accordance with generally accepted accounting principles in the United States.

Material Weakness in Internal Control Over Financial Reporting

Management has determined that the Company did not effectively perform controls on a timely basis relating to the loan operations quality control review function for all new loans originated during the period.  Management communicated the results of its assessment to the Audit Committee of the Board of Directors. 

Remediation steps have been taken and implemented to address the material weakness described above through the following steps:

•New leadership oversees the loan operations department;  

•Additional staff have been added to the quality control function; and  

•Enhanced monitoring processes have been instituted by the new loan department leadership.

Changes in Internal Control Over Financial Reporting

Other than as described above, there were no changes in First Guaranty's internal control over financial reporting during the last fiscal quarter in the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, First Guaranty's internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

First Guaranty is subject to various legal proceedings in the normal course of its business. First Guaranty assesses its liabilities and contingencies in connection with outstanding legal proceedings. Where it is probable that First Guaranty will incur a loss and the amount of the loss can be reasonably estimated, First Guaranty records a liability in its consolidated financial statements. First Guaranty does not record a loss if the loss is not probable, or the amount of the loss is not estimable. First Guaranty Bank is a defendant in a lawsuit alleging fault for a loss of funds by a customer related to fraud by a third party, with a possible loss range of $0.0 million to $1.5 million. The Bank denies the allegations and intends to vigorously defend against this lawsuit, which is in early stages, and no trial has been set. No accrued liability has been recorded related to this lawsuit. First Guaranty settled a case in the third quarter of 2021 for $1.1 million. A receivable for $0.9 million was recorded for recovery by a claim against First Guaranty's insurer. During the second quarter of 2024, First Guaranty received $0.5 million of the $