Company: FGBI
Filing Date: 2025-11-17
Form Type: 10-Q
Source: 0001408534-25-000092
Chunk: 269

Company: First Guaranty Bancshares, Inc.
Filing Date: 2025-11-17
Form: 10-Q
Item: Part I, Item 3
Chunk 269
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 not be prevented or detected on a timely basis.

Notwithstanding the below identified material weakness, and notwithstanding the conclusion by our CEO and CFO that our disclosure controls and procedures as of September 30, 2025 were not effective, management believes 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

As of June 30, 2025, management 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.

To address the identified material weakness described above, management implemented the following remediation 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.

Due to the nature of the remediation process, controls must operate effectively for a sufficient period of time for a definitive conclusion, validated through testing, that the deficiencies have been fully remediated and, as such, management cannot be certain that the measures it has undertaken have fully remediated the material weaknesses that it has identified or that additional material weaknesses will not arise in the future. Management will continue to monitor the design and effectiveness of these controls through ongoing tests during the fourth quarter of fiscal year 2025 and will make any further changes that management determines to be appropriate.

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