Company: FGBI
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0001408534-25-000015
Chunk: 184

Company: First Guaranty Bancshares, Inc.
Filing Date: 2025-03-17
Form: 10-K
Item: Item 8
Chunk 184
---
 commercial letters of credit are conditional commitments to guarantee the performance of a customer to a third party. These guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. The majority of these guarantees are short-term, one year or less; however, some guarantees extend for up to three years. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities. Collateral requirements are the same as on-balance sheet instruments and commitments to extend credit.There were no losses incurred on off-balance sheet commitments in 2024 or 2023. In accordance with ASC 326, the Bank has recorded an Allowance for Credit Losses on unfunded lending commitments of $1.2 million and $2.8 million at December 31, 2024 and 2023, respectively.

-103-

Note 19. Leases

First Guaranty’s primary leasing activities relate to certain real estate leases of a portion of the main office, certain branches, and certain ATM locations. These leases have all been designated as operating leases. First Guaranty does not lease equipment under operating leases, and does not have leases designated as financing leases.On June 28, 2024 First Guaranty sold three properties owned by it, two stand-alone branches and a portion of the headquarters building which also contains a branch, to a partnership owned by certain directors of First Guaranty. The aggregate purchase price was approximately $14.7 million. All of the properties are located in Louisiana.First Guaranty concurrently entered into absolute net lease agreements with the partnership under which First Guaranty will lease each of the properties. Each of the lease agreements has an initial term of 15 years with specified renewal options. Annual payments due under the leases total approximately $1.3 million. The sale-leaseback transaction resulted in a pre-tax gain of approximately $13.3 million.First Guaranty recorded operating right-of-use ("ROU") assets and corresponding lease liabilities of $11.5 million and $11.5 million, respectively. The discount rate was based on First Guaranty's estimated borrowing costs based on the lease term.Information concerning First Guaranty’s leases is as follows:Year EndedDecember 31, 2024Year EndedDecember 31, 2023Weighted-average lease term (in years)14.34.6Weighted-average discount rate7.9 %2.9 %First