First Guaranty Bancshares, Inc. entered into a Loan Agreement with Summit Community Bank, Inc. (?Lender?) pursuant to which Lender will make (i) a term loan in the principal amount of $40.3 million (the ?Term Loan?), and (ii) a revolving line of credit in the maximum principal amount of up to $21.0 million (the ?Line of Credit,? and, together with the Term Loan, the ?Loans?). The principal sum outstanding under the Term Loan will bear interest at a rate equal to the Prime Index Rate as published by the Wall Street Journal, reset quarterly, minus 0.50% per annum, with a floor of 4.49% per annum.

The principal sum outstanding under the Line of Credit will bear interest at a rate equal to the Prime Index Rate as published by the Wall Street Journal, reset monthly, with a floor of 4.49% per annum. The principal amount due and payable under the Term Loan will be amortized over a period of forty (40) quarters and will be in quarterly installments of principal, plus accrued interest, with the final payment equal to the then-outstanding principal balance and all accrued and unpaid interest, penalties and fees due thereon due at maturity of October 5, 2033. Any outstanding amounts under the Line of Credit will be repaid with monthly installments of interest only, followed by a final payment equal to the then-outstanding principal balance and all accrued and unpaid interest, penalties and fees due thereon at maturity on October 5, 2024, unless renewed.

The proceeds of the Term Loan were used to repay in full all outstanding amounts under the existing indebtedness from First Horizon Bank (formerly known as First Tennessee Bank National Association). In connection with entering into the Loan Agreement, the Company issued to Lender a Promissory Note dated October 5, 2023 in the amount of $40.3 million (the ?Term Loan Note?) and a Promissory Note dated October 5, 2023 in a principal amount of up to $21.0 million (the ?Line of Credit Note,? and, together with the Term Loan Note, the ?Notes?).

The Company?s obligations under the Loan Agreement and the Notes are secured by approximately 85% of the stock of the Company?s wholly-owned bank subsidiary, First Guaranty Bank (such shares, the ?Collateral?), pursuant to the Stock Pledge and Security Agreement, dated October 5, 2023, by the Company in favor of Lender (the ?Pledge Agreement?). The Loan Agreement, the Notes and the Pledge Agreement contain customary representations, warranties and covenants, including covenants requiring the Company and First Guaranty Bank to maintain certain financial and capital ratios. The Loan Agreement, the Notes and the Pledge Agreement also provide for certain events of default, including, among other things, payment defaults, breaches of representations and warranties and bankruptcy or insolvency proceedings, the occurrence of which, after any applicable cure period, would permit Lender, among other things, to accelerate payment of all amounts outstanding under the Loan Agreement and the Notes, as applicable, and to exercise its remedies with respect to the Collateral, including the sale of the Collateral.