By Lisa Kerner
Charlotte, N.C., Dec. 23 – First Guaranty Bancshares, Inc. issued a 10-year $15 million subordinated note in a private placement to company director Edgar Ray Smith III on Monday and entered into a $25 million term loan on Tuesday.
The note will bear interest at a fixed annual rate of 4% for the first five years of the term and then adjust to a floating rate based on the prime rate as reported by the Wall Street Journal plus 75 basis points for the period of time after the fifth year until redemption or maturity.
First Guaranty cannot repay the note until after Dec. 21, 2020, subject to limited exceptions, according to an 8-K filing with the Securities and Exchange Commission.
Interest is payable in arrears semiannually for the fixed-rate period and quarterly for the floating-rate period.
The note is expected to qualify for treatment as tier 2 capital for regulatory capital purposes.
Term loan
On Tuesday, the company borrowed a $25 million term loan from First Tennessee Bank NA.
The loan is secured by about 85% of the stock of the company’s wholly owned bank subsidiary, First Guaranty Bank.
The interest rate is Libor plus 250 bps, payable quarterly.
Each quarterly payment must include a minimum principal payment of $625,000 until the remaining balance is repaid with the final quarterly payment. The remaining balance on the term loan will be due and payable on Dec. 22, 2020.
First Guaranty is a bank holding company based in Hammond, La.
| Issuer: | First Guaranty Bancshares, Inc.
|
| Issue: | Subordinated note
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| Amount: | $15 million
|
| Coupon: | 4%, payable semiannually, for first five years; then Wall Street Journal prime rate plus 75 bps, payable quarterly
|
| Maturity: | Dec. 21, 2025
|
| Call option: | After Dec. 21, 2020
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| Purchaser: | Company director Edgar Ray Smith III
|
| Settlement date: | Dec. 21
|
| Distribution: | Private placement
|
|
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| Issuer: | First Guaranty Bancshares, Inc.
|
| Issue: | Term loan
|
| Amount: | $25 million
|
| Coupon: | Libor plus 250 bps, payable quarterly
|
| Maturity: | Dec. 22, 2020
|
| Lender: | First Tennessee Bank NA
|
| Settlement date: | Dec. 22
|
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