First Guaranty Bancshares, Inc.

Current report

Except as disclosed in the updated risk factors below and elsewhere in this report, there are no material changes during the period covered by this Report to the risk factors previously disclosed in our 2024 Form 10-K. In particular, please see the discussion under the in Part I Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report.

Current report

A portion of our loan portfolio is comprised of commercial and industrial loans secured by accounts receivables, inventory, equipment or other commercial collateral, the deterioration in value of which could increase the potential for future losses.

Current report

At September 30, 2025, $227.1 million, or 9.9% of our total loans, was comprised of commercial and industrial loans to businesses collateralized by general business assets including, among other things, accounts receivable, inventory and equipment and generally backed by a personal guaranty of the borrower or principal. These commercial and industrial loans are typically larger in amount than loans to individuals and, therefore, have the potential for larger losses on a single loan basis. Additionally, the repayment of commercial and industrial loans is subject to the ongoing business operations of the borrower. The collateral securing such loans generally includes movable property such as equipment and inventory, which may decline in value more rapidly than we anticipate, or may be difficult to market and sell, exposing us to increased credit risk. Significant adverse changes in the economy or local market conditions in which our commercial lending customers operate could cause rapid declines in loan collectability and the values associated with general business assets, resulting in inadequate collateral coverage that may expose us to credit losses and could adversely affect our business, financial condition and results of operations.

Current report

As discussed further in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report, we established a specific reserves of $39.8 million during the third quarter of 2025 for commercial lease exposure to entities related to an auto parts manufacturer that declared Chapter 11 bankruptcy. However, this specific allowance may not be sufficient with respect to our credit exposure to this borrower relationship, and the allowance for commercial and industrial loans generally may not be sufficient to fully address future losses in this portfolio.

Current report

We hold certain intangible assets that could be classified as impaired in the future. If these assets are considered to be either partially or fully impaired in the future, our earnings and the book values of these assets would decrease.

Current report

We are required to test goodwill and core deposit intangible assets for impairment on a periodic basis. The impairment testing process considers a variety of factors, including macroeconomic conditions, industry and market considerations, cost factors, and financial performance.

Current report

We performed an impairment test as of September 30, 2025, which resulted in the impairment of all $12.9 million of goodwill on our books as of that date. The impairment was the result of First Guaranty's stock price trading below book value and the recent increase in credit provisions. That impairment testing did not result in an impairment of our core deposit intangible assets. If an impairment determination is made in a future reporting period, either with respect to such core deposit intangible assets or other intangible assets we may acquire in the future, our earnings and the book value of these intangible assets will be reduced by the amount of the impairment which would adversely affect our financial performance.

Previous report

Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. You should carefully consider such risks and the other information in this Quarterly Report on Form 10-Q, any of which could materially and adversely affect the Company’s business, financial condition, results of operations and stock price.

Previous report

The Company has identified a material weakness in its internal control over financial reporting.

Previous report

As disclosed in “Part I - Item 4. Controls and Procedures,” of this Quarterly Report on Form 10-Q, management has identified a material weakness in First Guaranty’s internal control over financial reporting. As a result, management concluded that the Company’s internal control over financial reporting and disclosure controls and procedures were not effective as of June 30, 2025. The Company is working to remediate the material weakness. However, there can be no assurance that these remediation efforts will be successful. In addition, these remediation efforts may place a burden on management and may result in additional expenses.

Previous report

First Guaranty cannot assure that additional significant deficiencies or material weaknesses in our internal control over financial reporting will not be identified in the future. Any failure to maintain or implement required new or improved controls, or any difficulties we experience in their implementation, could result in additional material weaknesses, cause us to fail to meet its periodic SEC reporting obligations or result in material misstatements to its financial statements in future periods, any of which could cause investors or customers to lose confidence in our reported financial information, a decline in the trading price of First Guaranty common stock or Series A Preferred Stock, or a delisting of the Company’s common stock from Nasdaq.