Company: FGBI
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001408534-25-000070
Chunk: 111

Company: First Guaranty Bancshares, Inc.
Filing Date: 2025-08-18
Form: 10-Q
Item: Part I, Item 8
Chunk 111
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arm non-residential81 90 Total Other Real Estate Owned and Foreclosed Property7,657 319 Allowance for Other Real Estate Owned losses— — Net Other Real Estate Owned and Foreclosed Property$7,657 $319 

Loans secured by one-to-four family residential properties in the process of foreclosure totaled $1.6 million as of June 30, 2025. 

Note 8. Borrowings

During the quarter ended June 30, 2025, First Guaranty entered into an Exchange Agreement which provided for the exchange of certain floating rate subordinated debt due June 21, 2032, in the principal amount of $15.0 million, held by a related party for 1,981,506 shares of newly issued common stock of First Guaranty. First Guaranty also entered into the amendments to the promissory note for the senior debt owed to a related party and subordinated note to a related party which allows First Guaranty  to make payment of interest either in cash or shares of common stock for the period June 30, 2025 through March 30, 2026. As of March 31, 2025, First Guaranty was not in compliance with one financial covenant under its credit agreement for its senior debt. First Guaranty’s adjusted Texas Ratio exceeded 35% at March 31, 2025.  As a result, the interest rate on the senior loan was increased by one percent to 8.0% for the second quarter of 2025.  The lender has provided a waiver for this covenant breach effective June 30, 2025 through March 31, 2026.First Guaranty issued 36,060 shares of common stock for payment in kind ("PIK") interest due on the senior debt for the quarter ended June 30, 2025. First Guaranty issued 52,422 shares of common stock as PIK payments of interest on a $30.0 million subordinated debt for the quarter ended June 30, 2025.

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Note 9. Commitments and Contingencies

 Off-balance sheet commitments First Guaranty is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit and standby and commercial letters of credit.