UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 7, 2019
FIRST GUARANTY BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
|
|
|
|
|
|
|
|
|
|
|
Louisiana
|
001-37621
|
26-0513559
|
|
(State or other jurisdiction
|
(Commission File Number)
|
(I.R.S. Employer
|
|
incorporation or organization)
|
|
Identification Number)
|
|
|
|
|
400 East Thomas Street
|
|
|
|
Hammond, Louisiana
|
|
70401
|
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
|
|
(985) 345-7685
|
|
(Registrant’s telephone number, including area code)
|
|
|
|
Not Applicable
|
|
(Former name or former address, if changed since last report)
|
Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐Written communications pursuant to Rule 425 under Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
|
|
|
|
|
|
|
|
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
|
Common Stock, $1 par value
|
|
FGBI
|
|
The Nasdaq Stock Market LLC
|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x
Item 1.01. Entry into a Material Definitive Agreement.
On November 7, 2019, First Guaranty entered into the Second Amendment to the Loan Agreement with First Horizon Bank (the "Loan Agreement"), a term note with First Horizon Bank (the "Term Note") and the First Amendment to the Pledge and Security Agreement with First Horizon Bank (the "Pledge and Security Agreement") for a term loan of $32.5 million secured by approximately 85% of the stock of First Guaranty's wholly-owned subsidiary, First Guaranty Bank. The term loan will bear interest quarterly and the interest rate will float based on Wall Street Journal Prime less 70 basis points. Each quarterly payment must include a minimum principal payment of $812,500 until the remaining balance is repaid with the final quarterly payment. The remaining balance on the term loan will be due and payable five years from the origination date (November 7, 2024).
The foregoing descriptions of the Loan Agreement, the Pledge and Security Agreement and the Term Note do not purport to be complete and are qualified in their entirety by reference to the Loan Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K, the Pledge and Security Agreement, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and the Term Note, which is filed as Exhibit 10.3 to this Current Report on Form 8-K, all of which are incorporated into this report by reference.
Item 8.01. Other Events.
On November 7, 2019, First Guaranty completed the acquisition of Union Bancshares, Incorporated, a Louisiana corporation ("Union"). On the November 7, 2019 acquisition date, Union was merged with and into First Guaranty with First Guaranty as the surviving corporation followed by the merger of Union's wholly-owned subsidiary, The Union Bank ("Union Bank") with and into the Bank, with the Bank continuing as the surviving entity. Shareholders of Union received $1,061.20 per share in cash, yielding an aggregate deal value of $43.4 million. The cash consideration was partially financed by a $32.5 million term loan from First Horizon Bank. Union Bancshares, Inc. had total consolidated assets of approximately $258.5 million, loans of $183.8 million and total deposits of $205.2 million as of November 7, 2019. First Guaranty incurred $0.2 million in pre-tax merger-related expenses during the first nine months of 2019. The acquisition of Union is being accounted for under the purchase method of accounting.
On November 12, 2019, First Guaranty Bancshares, Inc. issued a press release reporting the completion of its acquisition of Union Bancshares, Inc. The Press Release is enclosed as Exhibit 99.1 to this report.
Item 9.01. Financial Statements and Exhibits.
|
|
|
|
|
|
|
|
Exhibit No.
|
Description
|
|
|
Exhibit 10.1
|
Loan Agreement, dated as of November 7, 2019, by and between First Guaranty Bancshares, Inc. and First Horizon Bank.
|
|
|
Exhibit 10.2
|
Pledge and Security Agreement, dated as of November 7, 2019, by and between First Guaranty Bancshares, Inc. and First Horizon Bank.
|
|
|
Exhibit 10.3
|
Term Note, date as of November 7, 2019, by and between First Guaranty Bancshares, Inc. and First Horizon Bank.
|
|
|
Exhibit 99.1
|
Press Release dated November 12, 2019
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST GUARANTY BANCSHARES, INC.
|
|
|
|
(Registrant)
|
|
Date: November 12, 2019
|
|
|
|
|
|
|
By:
|
/s/Alton B. Lewis, Jr.
|
|
|
|
|
Alton B. Lewis, Jr.
|
|
|
|
|
Vice Chairman of the Board and
|
|
|
|
|
Principal Executive Officer
|
INDEX TO EXHIBITS
|
|
|
|
|
|
Exhibit Number
|
Description
|
|
Exhibit 10.1
|
|
|
Exhibit 10.2
|
|
|
Exhibit 10.3
|
|
|
Exhibit 99.1
|
|
EXHIBIT 10.1
SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT (“Amendment”) is made as of November 7, 2019 (the “Effective Date”), by and between FIRST GUARANTY BANCSHARES, INC., a Louisiana corporation (the “Borrower”) and FIRST HORIZON BANK (formerly known as First Tennessee Bank National Association) (the “Lender”).
Recitals of Fact
Borrower and Lender previously entered into a Loan Agreement dated December 22, 2015 (as previously amended to date, the “Existing Loan Agreement”; the Existing Loan Agreement as amended hereby is sometimes referred to herein as the “Loan Agreement”), pursuant to which Lender committed to make a term loan to Borrower in the original amount of Twenty-Five Million Dollars ($25,000,000.00) as more particularly described therein, the present principal balance of which is Seventeen Million Six Hundred Forty-Seven Thousand Fifty-Eight and 80/100 Dollars ($17,647,058.80) (the “Term Loan”).
In order to partially fund a share exchange pursuant to which Borrower shall acquire all of the issued and outstanding $10 par value common stock of Union Bancshares, Incorporated (“Union Bancshares”) in exchange for certain cash consideration pursuant to an Agreement and Plan of Share Exchange dated as of July 31, 2019 and being by and between Borrower and Union Bancshares (the “Share Exchange Agreement”), following which Union Bancshares will be merged with and into the Borrower, with the Borrower as the surviving entity, and Union Bancshares’ wholly-owned subsidiary Union Bank will be merged with and into Borrower’s wholly-owned subsidiary First Guaranty Bank (collectively, the “Mergers”), Borrower has now requested that Lender make an additional term loan to Borrower in the principal amount of Thirty-Two Million Five Hundred Thousand Dollars ($32,500,000.00). Lender has agreed to do so on the terms and conditions set forth herein, and in an 2019 Term Note from Borrower to Lender of even date herewith.
NOW, THEREFORE, incorporating the Recitals of Fact set forth above and in consideration of the mutual agreements herein contained, the parties agree as follows:
AGREEMENTS
1. Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Loan Agreement.
2. To induce the Lender to enter into this Amendment, the Borrower does hereby absolutely and unconditionally, certify, represent and warrant to the Lender, and covenant and agree with the Lender, that:
(a) All representations and warranties made by the Borrower in the Existing Loan Agreement and all documents executed in connection therewith (collectively, the “Existing Loan Documents”) are true, correct and complete in all material respects as of the date of this Amendment.
(b) As of the date hereof and with the execution of this Amendment, there are no existing events, circumstances or conditions which constitute, or would, with the giving of notice, lapse of time, or both, constitute Events of Default.
(c) There are no existing offsets, defenses or counterclaims to the obligations of the Borrower, as set forth in the Existing Loan Documents.
(d) The Borrower has no existing claim for damages against the Lender arising out of or related to the Existing Loan Agreement or any other loans and obligations of the Borrower to the Lender; and, if and to the extent (if any) that the Borrower has any such existing claim, the Borrower does hereby forever release and discharge, in all respects, the Lender with respect to such claim.
(e) The Existing Loan Agreement, as amended by this Amendment, and the other Existing Loan Documents, are valid, genuine, enforceable in accordance with their respective terms, and in full force and effect.
3. The first paragraph of the “Witnesseth” Section on the first page of the Existing Loan Agreement, is hereby deleted and replaced with the following:
WHEREAS, the Borrower has previously requested, and Lender has previously provided a term loan to Borrower in the original principal amount of Twenty-Five Million Dollars ($25,000,000.00), the current principal balance of which is Seventeen Million Six Hundred Forty-Seven Thousand Fifty-Eight and 80/100 Dollars ($17,647,058.80), and Borrower has requested and Lender has agreed to loan an additional Thirty-Two Million Five Hundred Thousand Dollars ($32,500,000.00) to Borrower on the terms and conditions hereinafter set forth;
4. Section 1.2 of the Existing Loan Agreement is amended and replaced with the following:
1.2 Loans.
(a) Lender has previously provided a term loan to Borrower in the original principal amount of Twenty-Five Million Dollars ($25,000,000.00), the current outstanding balance of which is Seventeen Million Six Hundred Forty-Seven Thousand Fifty-Eight and 80/100 Dollars ($17,647,058.80), as the 2015 Loan, as evidenced by the 2015 Loan Note (hereinafter defined). The 2015 Loan Note shall bear interest and be payable in accordance with the terms and provisions of the 2015 Loan Note. The 2015 Loan (hereinafter defined) shall expire and mature, and any remaining outstanding principal balance on the 2015 Loan and all accrued but unpaid interest thereon shall be due and payable, on the 2015 Loan Maturity Date (hereinafter defined). All proceeds of the 2015 Loan have previously been advanced. Notwithstanding any other provision of this Agreement, no further principal advances are available to be borrowed under the 2015 Loan.
(b) Lender also hereby agrees to lend, and Borrower hereby also agrees to borrow, upon the terms and conditions set forth in this Agreement, (i) the sum of Thirty-Two Million Five Hundred Thousand Dollars ($32,500,000.00), as the 2019 Loan (hereinafter defined), to be evidenced by the 2019 Term Note (hereinafter defined) in such amount. The 2019 Loan Note shall bear interest and be payable in accordance with the terms and provisions of the 2019 Loan Note. The 2019 Loan shall expire and mature, and any remaining outstanding principal balance on the 2019 Loan and all accrued but unpaid interest thereon shall be due and payable, on the 2019 Loan Maturity Date (hereinafter defined). Proceeds of the 2019 Loan shall be advanced in a single disbursement on the date set forth in the 2019 Loan Note. Once the principal balance of the 2019 Loan has been advanced, notwithstanding any other provision of this Agreement, no further principal advances will be available to be borrowed under the 2019 Loan.
5. Section 5.15 of the Existing Loan Agreement is hereby modified and amended to read as follows:
5.15 Fixed Charge Coverage Ratio. Borrower shall maintain, as of each Covenant Compliance Date, a ratio of Cash Flow for the prior four (4) fiscal quarters to Fixed Charges for the prior four (4) fiscal quarters of not less than 1.35 to 1.00, to be measured quarterly as of the last day of each fiscal quarter of Borrower. For the four (4) fiscal quarters following completion of the Mergers, non-recurring merger-related expenses shall be added back to “Cash Flow” for the purposes of such calculation.
6. From and after the Effective Date, any reference to the “Loan” in the recitals to the Existing Loan Agreement or in Sections 1.5, 2.1, 4, 5, 6, 7, or 8 of the Existing Loan Agreement, as amended hereby, shall be deemed to refer to the “Loans”, collectively, as such term is defined in Section 7 of this Amendment, below. From and after the Effective Date, any reference to the “Note” in Sections 4, 5, 7, 8, or Appendix A of the Existing Loan Agreement, as amended hereby, shall be deemed to refer to the “Notes”, collectively, as such term is defined in Section 6 of this Amendment, below.
7. The following new definitions are hereby added to Appendix A to the Existing Loan Agreement, in proper alphabetical order, to read as follows:
“2015 Loan” means that certain term loan from the Lender to the Borrower in the original principal amount of Twenty-Five Million Dollars ($25,000,000.00), as subsequently amended and restated, originally made on December 22, 2015, and amended and restated on June 1, 2017 and on November 7, 2019.
“2015 Loan Maturity Date” means December 22, 2020.
“2015 Loan Note” means that certain Seventeen Million Six Hundred Forty-Seven Thousand Fifty-Eight and 80/100 Dollars ($17,647,058.80) Second Amended and Restated Term Note of the Borrower to the Lender, dated the 2019 Loan Effective Date, which amended and restated that certain Twenty-Five Million Dollar ($25,000,000.00) Term Note of the Borrower to the Lender dated June 1, 2017, which amended and restated that certain Twenty-Five Million Dollar ($25,000,000.00) Term Note of the Borrower to the Lender dated December 22, 2015.
“2019 Loan” means that certain term loan from the Lender to the Borrower in the original principal amount of Thirty-Two Million Five Hundred Thousand Dollars ($32,500,000.00), made on the 2019 Loan Effective Date.
“2019 Loan Effective Date” means November 7, 2019.
“2019 Loan Maturity Date” means November 7, 2024.
“2019 Loan Note” means that certain Thirty-Two Million Five Hundred Thousand Dollar ($32,500,000.00) 2019 Term Note of the Borrower to the Lender, dated the 2019 Loan Effective Date.
“Loans” means the 2015 Loan and the 2019 Loan, collectively.
“Mergers” means Borrower’s acquisition of all of the issued and outstanding $10 par value common stock of Union Bancshares, Incorporated (“Union Bancshares”) in exchange for certain cash consideration pursuant to an Agreement and Plan of Share Exchange dated as of July 31, 2019, and being by and between Borrower and Union Bancshares, following which Union Bancshares will be merged with and into the Borrower, with the Borrower as the surviving entity, and Union Bancshares’ wholly-owned subsidiary Union Bank will be merged with and into Borrower’s wholly-owned subsidiary First Guaranty Bank.
“Notes” means the 2015 Note and the 2019 Note, collectively.
8. Notwithstanding anything to the contrary in the Existing Loan Agreement, upon the effectiveness of this Amendment, Lender hereby acknowledges and consents to the Mergers, upon the terms and conditions set forth in the Share Exchange Agreement as certified to Lender.
9. Borrower shall pay to Lender an additional commitment fee in the amount of Thirty-Two Thousand Five Hundred Dollars ($32,500.00) in consideration of Lender’s agreement to make the 2019 Loan available to the Borrower under the Loan Agreement until the 2019 Loan Maturity Date. Borrower agrees that this additional commitment fee is fair and reasonable considering the condition of the money market, the creditworthiness of the Borrower, the interest rate to be paid, and the nature of the security (or the lack thereof) for such 2019 Loan.
10. This Amendment shall be effective upon the Lender’s receipt (and counter- signature where required) of (a) duly executed original counterparts of (i) this Amendment, (ii) the Borrower’s Seventeen Million Six Hundred Forty-Seven Thousand Fifty-Eight and 80/100 Dollars ($17,647,058.80) Second Amended and Restated Term Note in favor of the Lender, (iii) the Borrower’s Thirty-Two Million Five Hundred Thousand Dollars ($32,500,000.00) Term Note in favor of the Lender, (iv) the Certificate Regarding the Share Exchange Agreement of the Borrower (together with copies of all documents referred to therein), and (v) the First Amendment to the Pledge Agreement; (b) such secretary’s certificates, resolutions, lien searches, and evidence of good standing with respect to Borrower, the Bank, and the other parties to the Mergers as Lender may require, in form and substance satisfactory to Lender; (c) copies of all notices, approvals, and consents required in connection with the Mergers; (d) evidence satisfactory to the Lender of the simultaneous closing of the Mergers; (e) payment by Borrower of all fees and expenses due to Lender hereunder, including without limitation the additional Thirty-Two Thousand Five Hundred Dollar ($32,500.00) commitment fee described above and all of Lender’s reasonable, out-of-pocket attorney fees in connection herewith; and (f) an opinion of Borrower’s counsel to Lender in form and substance satisfactory to Lender and addressing such matters as Lender may require.
11. All references in the Existing Loan Agreement and in any other Loan Documents to the “Loan Agreement” or the “Note” shall, except as the context may otherwise require, be deemed to constitute references to the Loan Agreement as amended hereby and the Note, as amended by the Amended and Restated Term Note of even date herewith.
12. All terms and provisions of the Existing Loan Agreement or any other Loan Document as heretofore amended, which are inconsistent with the provisions of this Amendment are hereby modified and amended to conform hereto; and, as so modified and amended, are hereby ratified, approved and confirmed. Except as otherwise may be expressly provided herein, this Amendment shall become effective as of the date set forth in the initial paragraph hereof.
Signatures follow.
IN WITNESS WHEREOF, the Borrower and the Lender have caused this Agreement to be executed by their respective officers, duly authorized so to do, all as of the day and year first above written.
Borrower:
FIRST GUARANTY BANCSHARES, INC.
By: /s/ Alton B. Lewis, Jr.
Printed Name: Alton B. Lewis, Jr.
Title: President and Chief Executive Officer
Lender:
FIRST HORIZON BANK, a Tennessee banking corporation
By: /s/ R. Chuck Hunt
Printed Name: R. Chuck Hunt
Title: Vice President
EXHIBIT 10.2
FIRST AMENDMENT TO PLEDGE AND SECURITY AGREEMENT
This First Amendment to Pledge and Security Agreement (this “Amendment”) is made and agreed to as of November 7, 2019 by and between FIRST GUARANTY BANCSHARES, INC., a Louisiana corporation (hereinafter called “Pledgor”) and FIRST HORIZON BANK (formerly known as First Tennessee Bank National Association), having its principal office located in Memphis, Tennessee (hereinafter called “Lender”).
Recitals of Fact:
A. Pledgor and Lender have previously entered into a Pledge and Security Agreement dated December 22, 2015 (as amended, the “Pledge Agreement”), pursuant to which the Pledgor granted the Lender a lien in certain Pledged Securities (as defined therein).
B. As of the date of this Amendment, Pledgor and Lender are entering into a Second Amendment to Loan Agreement and a 2019 Term Note and, in connection therewith, are amending the Pledge Agreement as set forth herein.
NOW, THEREFORE, It is agreed that as of the date hereof, Pledgor and Lender have agreed to modify and amend the Pledge Agreement as follows:
Agreements:
1. All terms and conditions of the Pledge Agreement that are not amended herein, and all capitalized terms used but not otherwise defined herein, shall have the meanings given to them in the Pledge Agreement.
2. The term “Loan Agreement”, as used in the first “WHEREAS” clause of the Pledge Agreement, is hereby modified and amended to refer to that certain Loan Agreement between Lender and Pledgor dated December 22, 2015, as amended by the First Amendment to Loan Agreement dated June 1, 2017 and the Second Amendment to Loan Agreement dated the same date as this Amendment, as the same may be further modified, amended, renewed, restated, or extended.
3. Pledgor hereby ratifies and confirms its prior grant of security in the Pledged Securities, as collateral security for the “Obligations”, as defined therein. Section 2 of the Pledge Agreement is hereby modified and amended to read as follows:
2. Obligations Secured. This Agreement is made, and the security interest created hereby is granted to Lender, to secure full payment and performance of any and all indebtedness and other obligations of Pledgor to Lender, direct or contingent, however evidenced or denominated, and however or whenever incurred, including without limitation (a) indebtedness incurred pursuant to any past, present or future commitment of Lender to Pledgor, including without limitation that certain Twenty-Five Million Dollar ($25,000,000.00) Term Loan and that certain Thirty-Two Million Five Hundred Thousand Dollar ($32,500,000.00) 2019 Term Loan governed by the Loan Agreement, and all other indebtedness or obligations of Pledgor or Bank under or evidenced by the Notes, Loan Agreement, and other Loan Documents, as each of them may be amended from time to time and (b) all indebtedness, liabilities, obligations, covenants and duties of Pledgor to the Lender, of every kind, nature and description arising under of in respect of any Lender Product (hereinafter defined) (including arising under or in respect of any guaranty thereof), whether direct or indirect, absolute or contingent, due or not due, contractual or tortious, liquidated or unliquidated, in each case now existing or hereafter arising (all of the foregoing, collectively, the “Obligations”); except that the indebtedness and other liabilities secured by this Agreement shall not include any indebtedness subject to the disclosure requirements of the Federal Truth-in-Lending Act if at the time such indebtedness is created or incurred, any legally required disclosure of this security interest shall not have been made. As used herein, “Lender Products” means any of the following that the Lender provides, to or enters into with the Pledgor: (i) any deposit, lockbox, Cash Management Services (hereinafter defined), or other cash management agreement, (ii) any Interest Rate Swap, (iii) any credit cards, purchase cards and/or debit cards, and (iv) any other product, service or agreement pursuant to which Pledgor is indebted to the Lender. As used herein, “Cash Management Services” means any services provided from time to time by the Lender to Pledgor in connection with the operating, collections, payroll, trust or other depository or disbursement accounts, including automated clearinghouse, e-payable, electronic funds transfer, wire transfer, controlled disbursement, overdraft, depository, information reporting, lockbox and stop payment services.
4. All references to the Pledge Agreement in any of the other Loan Documents shall henceforth be deemed to be references to the Pledge Agreement as amended hereby.
Signatures follow.
IN WITNESS WHEREOF, Pledgor and Lender have executed this Amendment as of the date first written above.
PLEDGOR:
FIRST GUARANTY BANCSHARES, INC.
By: /s/ Alton B. Lewis, Jr.
Printed Name: Alton B. Lewis, Jr.
Title: President and Chief Executive Officer
LENDER:
FIRST HORIZON BANK
By: /s/ R. Chuck Hunt
Printed Name: R. Chuck Hunt
Title: Vice President
EXHIBIT 10.3
2019 TERM NOTE
$32,500,000.00 Memphis, Tennessee
November 7, 2019
FOR VALUE RECEIVED, the undersigned FIRST GUARANTY BANCSHARES, INC., a Louisiana corporation (“Maker”), promises to pay to the order of FIRST HORIZON BANK (formerly known as First Tennessee Bank National Association), having its principal place of business in Memphis, Tennessee (“Bank”), the principal sum of THIRTY-TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($32,500,000.00), together with interest from date until maturity, upon disbursed and unpaid principal balances, at the rate hereinafter specified, said principal and interest being payable as follows:
the unpaid principal balance hereof shall be payable in 21 consecutive principal installments, installment nos. 1 to 20, both inclusive, being quarterly payments in the amount of Eight Hundred Twelve Thousand Five Hundred Dollars ($812,500.00) each, and installment no. 21 being for the entire unpaid principal balance, the first of said installments of principal being due and payable on the first (1st) day of January 2020, and one on the first (1st) day of each calendar quarter thereafter until all are fully paid (with the final installment, being a balloon payment for the entire then-unpaid principal balance, if not sooner paid, being due and payable on the 7th day of November, 2024); and interest on the indebtedness hereby evidenced shall be paid concurrently with the payment of such principal installments; provided, however, that in any case where the date for a payment hereunder shall be, in Memphis, Tennessee, a Saturday, a Sunday, a legal holiday, or a day on which banking institutions are authorized by law to close, then such performance may be made on the next succeeding business day not a Saturday, a Sunday, a legal holiday, or a day on which banking institutions are authorized by law to close.
This Note is being issued pursuant to that certain Loan Agreement, dated December 22, 2015, as amended to date, between the Maker and the Bank, as said agreement may be amended or modified (the “Loan Agreement”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in the Loan Agreement.
The interest rate on this Note is subject to change from time to time based on changes in an independent index which is the Wall Street Journal Prime rate as published in the Wall Street Journal. When a range of rates has been published, the higher of the rates will be used (the “Index”). The Index is not necessarily the lowest rate charged by Bank on its loans. If the Index becomes unavailable during the term of this loan, the Bank may designate a substitute index after notice to the Maker. The Bank will tell the Maker the current Index rate upon the Maker’s request. The interest rate change will not occur more often than each day. The Maker understands that the Bank may make loans based on other rates as well. The Index currently is 4.75% per annum. The interest rate to be applied to the unpaid principal balance of this Note (the “Contract Rate”) will be at a rate equal to the Index less .70% (the “Margin”), provided, in no event shall the Contract Rate ever be less than three percent (3.00%), which results in an initial rate of 4.05% per annum. NOTICE: Under no circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable law. NOTICE: Under no circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable law.
The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.
In the event that the foregoing provisions should be construed by a court of competent jurisdiction not to constitute a valid, enforceable designation of a rate of interest or method of determining same, the indebtedness hereby evidenced shall bear interest at the lesser of (a) ten percent (10.00%) per annum or (b) the maximum effective variable contract rate which may be charged by the Bank under applicable law from time to time in effect (the “Maximum Rate).
Notwithstanding the foregoing, upon the occurrence of an Event of Default (as defined in the Loan Agreement), the Bank, at its option, may charge, and the Maker agrees to pay, interest on disbursed and unpaid principal balances at the default rate (the “Default Rate”) per annum equal to the lesser of (a) the Maximum Rate or (b) (i) the Contract Rate plus (ii) four percent (4.00%).
Any amounts not paid when due hereunder (whether by acceleration or otherwise), subject to any applicable grace or notice and cure period set forth in the Loan Agreement, shall bear interest after maturity at the Default Rate.
For any payment which is not made within ten (10) days of the due date for such payment, the Maker shall pay a late fee. The late fee shall equal five percent (5%) of the unpaid portion of the past-due payment.
This Note is secured by the Pledge Agreement.
All installments of interest, and the principal hereof, are payable at the office of First Tennessee Bank National Association, 165 Madison Avenue, Memphis, Tennessee 38103, or at such other place as the holder may designate in writing, in lawful money of the United States of America, which shall be legal tender in payment of all debts and dues, public and private, at the time of payment.
Upon the occurrence of any Event of Default under the Loan Agreement, then and in any such event, the entire unpaid principal balance of the indebtedness evidenced hereby, together with all interest then accrued, shall, at the absolute option of the holder hereof, at once become due and payable, without demand or notice, the same being expressly waived and Bank may exercise any right, power or remedy permitted by law or equity, or as set forth herein or in the Loan Agreement or any other Loan Document.
If this Note is placed in the hands of an attorney for collection, by suit or otherwise, or to protect the security for its payment, or to enforce its collection, or to represent the rights of the Bank in connection with any loan documentation executed in connection herewith, or to defend successfully against any claim, cause of action or suit brought by the Maker against the Bank, the Maker shall pay on demand all costs of collection and litigation (including court costs), together with a reasonable attorney’s fee. These include, but are not limited to, the Bank’s reasonable attorney’s fees and legal expenses, whether or not there is a lawsuit, including attorney’s fees for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction) and appeals.
The Bank and the Maker hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Bank or Maker against the other.
To the extent permitted by applicable law, the Bank reserves a right of setoff in all the Maker’s accounts with the Bank (whether checking, savings, or some other account). This includes all accounts the Maker may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. The Maker authorizes the Bank, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts, and, at the Bank’s option, to administratively freeze all such accounts to allow the Bank to protect the Bank’s charge and setoff rights provided in this paragraph.
The undersigned agrees to furnish a current financial statement as provided in the Loan Agreement, and further agrees to execute and deliver all other instruments and take such other actions as the Bank may from time to time reasonably request in order to carry out the provisions and intent hereof.
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each business entity that opens an account. What this means to Maker: When Maker opens an account, the Bank will ask for Federal Tax Identification Number, physical street address, full legal name of the Maker and other information that will allow the Bank to identify Maker. The Bank may also ask Maker to provide copies of certain documents that will aid in confirming this information.
The Maker and any endorsers or guarantors hereof waive protest, demand, presentment, and notice of dishonor, and agree that this Note may be extended, in whole or in part, without limit as to the number of such extensions or the period or periods thereof, without notice to them and without affecting their liability thereon. Maker agrees that borrowers, endorsers, guarantors and sureties may be added or released without notice and without affecting Maker’s liability hereunder. The liability of Maker shall not be affected by the failure of Bank to perfect or otherwise obtain or maintain the priority or validity of any security interest in any collateral. The liability of Maker shall be absolute and unconditional and without regard to the liability of any other party hereto.
It is the intention of the Bank and the Maker to comply strictly with applicable usury laws; and, accordingly, in no event and upon no contingency shall the holder hereof ever be entitled to receive, collect, or apply as interest any interest, fees, charges or other payments equivalent to interest, in excess of the maximum effective contract rate which the Bank may lawfully charge under applicable statutes and laws from time to time in effect; and in the event that the holder hereof ever receives, collects, or applies as interest any such excess, such amount which, but for this provision, would be excessive interest, shall be applied to the reduction of the principal amount of the indebtedness hereby evidenced; and if the principal amount of the indebtedness evidenced hereby, all lawful interest thereon and all lawful fees and charges in connection therewith, are paid in full, any remaining excess shall forthwith be paid to the Maker, or other party lawfully entitled thereto. All interest paid or agreed to be paid by the Maker shall, to the maximum extent permitted under applicable law, be amortized, prorated, allocated and spread throughout the full period until payment in full of the principal so that the interest hereon for such full period shall not exceed the maximum amount permitted by applicable law. Any provision hereof, or of any other agreement between the holder hereof and the Maker, that operates to bind, obligate, or compel the Maker to pay interest in excess of such maximum effective contract rate shall be construed to require the payment of the maximum rate only. The provisions of this paragraph shall be given precedence over any other provision contained herein or in any other agreement between the holder hereof and the Maker that is in conflict with the provisions of this paragraph.
This Note shall be governed and construed according to the statutes and laws of the State of Tennessee from time to time in effect, except to the extent that Section 85 of Title 12 of the United States Code (or other applicable federal statute) may permit the charging of a higher rate of interest than applicable state law, in which event such applicable federal statute, as amended and supplemented from time to time shall govern and control the maximum rate of interest permitted to be charged hereunder; it being intended that, as to the maximum rate of interest which may be charged, received, and collected hereunder, those applicable statutes and laws, whether state or federal, from time to time in effect, which permit the charging of a higher rate of interest, shall govern and control; provided, always, however, that in no event and under no circumstances shall the Maker be liable for the payment of interest in excess of the maximum rate permitted by such applicable law, from time to time in effect.
The principal amount of this Note may be prepaid in whole or in part at any time, and from time to time without penalty or premium, provided, however, that if an Interest Rate Swap has been entered into in connection with this Note, any full or partial prepayments of principal
amounts due under this Note may require termination or adjustment of the Interest Rate Swap and may result in a payment due from Maker per the terms and conditions of the Interest Rate Swap.
Bank is hereby authorized to disclose any financial or other information about Maker to any regulatory body or agency having jurisdiction over Bank and to any present, future or prospective participant or successor in interest in any loan or other financial accommodation made by Bank to Maker. The information provided may include, without limitation, amounts, terms, balances, payment history, return item history and any financial or other information about Maker. However, subject to applicable law, Bank shall use reasonable efforts to protect the confidentiality of the terms and conditions of the Loan in all other respects.
The invalidity or unenforceability of any one or more provisions of this Note shall not render any other provision invalid or unenforceable. In lieu of any invalid or unenforceable provision, there shall be added automatically a valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible.
The covenants, conditions, waivers, releases and agreements contained in this Note shall bind, and the benefits thereof shall inure to, the parties hereto and their respective heirs, executors, administrators, successors and assigns; provided, however, that this Note cannot be assigned by Maker without the prior written consent of Bank, and any such assignment or attempted assignment by Maker without consent shall be void and of no effect with respect to Bank.
Subject to the terms of the Loan Agreement, Bank may from time to time sell or assign, in whole or in part, or grant participations in, the Loan, this Note and/or the obligations evidenced thereby. The holder of any such sale, assignment or participation, if the applicable agreement between Bank and such holder so provides, shall be: (a) entitled to all of the rights, obligations and benefits of Bank; and (b) deemed to hold and may exercise the rights of setoff or banker’s lien with respect to any and all obligations of such holder to Maker, in each case as fully as though Maker were directly indebted to such holder. Bank shall give notice to Maker of such sale, assignment or participation in accordance with the terms of the Loan Agreement.
Maker hereby consents that any action or proceeding against it be commenced and maintained in any state or federal court sitting in Memphis, Shelby County, Tennessee, by service of process on any such owner, partner and/or officer; and Maker agrees that such courts of the State shall have jurisdiction with respect to the subject matter hereof and the person of Maker and all collateral securing the obligations of Maker. Maker agrees not to assert any defense to any action or proceeding initiated by Bank based upon improper venue or inconvenient forum.
Signature page to follow
FIRST GUARANTY BANCSHARES, INC.
By: /s/ Alton B. Lewis, Jr.
Printed Name: Alton B. Lewis, Jr.
Title: President and Chief Executive Officer
MAKER
Signature page to 2019 Term Note
EXHIBIT 99.1
NOVEMBER 12, 2019
FOR IMMEDIATE RELEASE
CONTACT: ALTON LEWIS, CEO AND ERIC DOSCH, CFO
985.375.0350 / 985.375.0308
FIRST GUARANTY BANCSHARES, INC. HAS OFFICIALLY ACQUIRED UNION BANCSHARES, INCORPORATED
HAMMOND, LA, November 12, 2019 - First Guaranty Bancshares, Inc. of Hammond, Louisiana, today, announced the completion of the acquisition of and merger with Union Bancshares, Incorporated of Marksville, Louisiana. According to Alton Lewis, President and Chief Executive Officer of First Guaranty, “This merger is a giant step forward for First Guaranty in its drive to serve our customers and communities while building a strong, solid financial institution benefiting our shareholders. First Guaranty Bank and Union Bank are both solid, strong, profitable banks. The combination of the two creates a much stronger single institution than the sum of two parts.”
This combination will allow First Guaranty to offer its strong customer service and a wide variety of loan, deposit, and financial products to Central Louisiana, a new area of operation. It will also allow First Guaranty to extend its culture of community support and community service into new areas.
First Guaranty will now have assets of approximately $2.1 billion and 440 employees located in 34 locations, including 29 in Louisiana plus McKinney Texas, Garland Texas, Denton Texas, Fort Worth Texas, and Waco Texas.
ABOUT FIRST GUARANTY BANCSHARES, INC.
First Guaranty Bancshares, Inc. is the holding company for First Guaranty Bank, a Louisiana state-chartered bank. Founded in 1934, First Guaranty Bank offers a wide range of financial services and focuses on building client relationships and providing exceptional customer service. First Guaranty Bank currently operates twenty-one branches in Louisiana and five branches in Texas. The Company’s common stock trades on the NASDAQ under the symbol FGBI.
For additional information, visit First Guaranty Bank’s website at www.fgb.net.
ABOUT UNION BANCSHARES, INCORPORATED
Union Bancshares, Incorporated is the holding company for The Union Bank, a Louisiana state-chartered bank. The Union Bank currently operates seven branches in Louisiana. These include branch locations in Alexandria, Bunkie, Hessmer, Pineville, Moreauville, and two in Marksville.
For additional information, visit The Union Bank’s website at www.union-bank.com.
Certain statements contained herein are "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward looking statements may be identified by reference to a future period or periods, or by the use of forward looking terminology, such as "may," "will," "believe," "expect," "estimate," "anticipate," "continue," or similar terms or variations on those terms, or the negative of those terms. Forward looking statements are subject to numerous risks and uncertainties, as described in our SEC filings, including, but not limited to, those related to the real estate and economic environment, particularly in the market areas in which First Guaranty operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity.First Guaranty wishes to caution readers not to place undue reliance on any such forward looking statements, which speak only as of the date made.
First Guaranty wishes to advise readers that the factors listed above could affect First Guaranty's financial performance and could cause First Guaranty's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. First Guaranty does not undertake and specifically declines any obligation to publicly release the results of any revisions, which may be made to any forward looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
