Item 1.01 Entry into a Material Definitive Agreement
First Amendment to Promissory Note
On June 4, 2025, First Guaranty Bancshares, Inc. ("First Guaranty or the "Company") entered into the First Amendment to the Promissory Note (the "Promissory Note Amendment") with Smith & Tate Investment, L.L.C. ("Smith & Tate), which amends that certain Promissory Note, dated as of October 5, 2023, by and between First Guaranty and Smith & Tate, as successor to Burke & Herbert Bank & Trust Company, as successor to Summit Community Bank, Inc. (as amended, the "Promissory Note"). Smith & Tate is a company controlled by Edgar Ray Smith, III, a director and principal shareholder of First Guaranty.
Prior to the Promissory Note Amendment, the Promissory Note provided for the payment of thirty-nine (39) quarterly installments of principal in the amount of $1,007,812.50 (the "Principal Payments") plus all accrued but unpaid interest, beginning on December 31, 2023, and continuing on the last day of each consecutive calendar quarter thereafter, followed by a final payment on October 5, 2033, equal to the then-outstanding principal balance and all accrued but unpaid interest, penalties and fees due thereon.
The terms of the Promissory Note Amendment provide for the waiver of the Principal Payment for the four (4) consecutive calendar quarters beginning on the June 30, 2025, interest payment date and ending on the March 31, 2026, interest payment date (the "Promissory Note Modified Payment Period"). Each interest payment that becomes due and payable during the Promissory Note Modified Payment Period will be made, at First Guaranty's option, either (a) in cash, as provided in the Promissory Note, or (b) in shares of common stock of First Guaranty, $1.00 par value (the "Common Stock"), with the number of shares of Common Stock to constitute each such interest payment equaling (i) the cash payment due as of such interest payment date based on the then-applicable interest rate as provided in the Promissory Note; divided by (ii) the consolidated closing bid price per share of the Common Stock on the trading day immediately preceding the interest payment date. The number of shares of Common Stock to be issued will be rounded down to the nearest whole share.
The foregoing description of the Promissory Note Amendment does not purport to be complete and is qualified in its entirety by reference to the Promissory Note Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K.
First Amendment to the Floating Rate Subordinated Note due March 28, 2034
On June 4, 2025, First Guaranty entered into the First Amendment to the First Guaranty Bancshares, Inc. Floating Rate Subordinated Note due March 28, 2034 (the "Subordinated Note Amendment") with Smith & Tate, which amended that certain First Guaranty Bancshares, Inc. Floating Rate Subordinated Note due March 28, 2034 (the "Subordinated Note"). As noted above, Smith & Tate is controlled by Edgar Ray Smith, III, a director and principal shareholder of the Company.
The Subordinated Note is for a ten-year term and bears interest at a floating rate based on the Prime Rate as reported by the Wall Street Journal plus 75 basis points for the period of time until redemption or maturity. Prior to the Subordinated Note Amendment, interest on the Subordinated Note was payable monthly.
The terms of the Subordinated Note Amendment provide for the payment of quarterly interest on March 31, June 30, September 30, and December 31 of each year. Beginning on the June 30, 2025, interest payment date and ending on the March 31, 2026, interest payment date, payments of interest will be made, at First Guaranty's option, either (a) in cash, as provided for in the Subordinated Note, or (b) in shares of Common Stock, with the number of shares of Common Stock to constitute each such interest payment equaling (i) the cash payment due as of such interest payment date based on the then-applicable interest rate as provided in the Subordinated Note; divided by (ii) the consolidated closing bid price per share of the Common Stock on the trading day immediately preceding the interest payment date. The number of shares of Common Stock to be issued will be rounded down to the nearest whole share.
The foregoing description of the Subordinated Note Amendment does not purport to be complete and is qualified in its entirety by reference to the Subordinated Note Amendment, which is attached as Exhibit 10.2 to this Current Report on Form 8-K.