Merger Transaction

Effective at the close of business on June 16, 2017, First Guaranty completed its acquisition of 100% of the outstanding shares of Premier Bancshares, Inc., a Texas corporation ("Premier"), a single bank holding company headquartered in McKinney, Texas and its wholly owned subsidiary, Synergy Bank. This acquisition allowed First Guaranty to expand its presence into the North Central Texas market area. Under terms of an agreement and plan of merger dated January 30, 2017, First Guaranty issued 0.119 of a share of its common stock for each share of Premier for a total of 397,988 shares at a price of $25.86 (unadjusted for the 10% stock dividend in December 2017) and paid $10.3 million in cash for an acquisition value of approximately $21.0 million. The purchase price resulted in approximately $1.5 million in goodwill and $2.7 million in core deposit intangible, none of which is deductible for tax purposes.

First Guaranty accounts for business combinations under the acquisition method in accordance with ASC Topic 805, Business Combinations. Accordingly, for each transaction, the purchase price is allocated to the fair value of the assets acquired and liabilities assumed as of the date of the acquisition. In conjunction with the adoption of ASU 2015-16, upon receipt of final fair value estimates during the measurement period, which must be within one year of the acquisition dates, First Guaranty records any adjustments to the preliminary fair value estimates in the reporting period in which the adjustments are determined. During the second quarter of 2018, First Guaranty finalized the purchase price allocations related to the Premier acquisition. No adjustments to goodwill were made in 2018.



(in thousands)	Premier Bancshares, Inc.

Cash and due from banks	$	4,542
Federal funds sold	2,855
Securities available for sale	5,892
Loans	128,018
Premises and equipment	9,493
Goodwill	1,474
Intangible assets	3,809
Other real estate	221
Other assets	2,009
Total assets acquired	$	158,313

Deposits	127,228
FHLB borrowings	9,700
Other liabilities	431
Total liabilities assumed	$	137,359
Net assets acquired	$	20,954

The following pro forma information for the twelve months ended December 31, 2017 and December 31, 2016 reflects First Guaranty's estimated consolidated results of operations as if the acquisition of Premier occurred at January 1, 2016, unadjusted for potential cost savings.



(in thousands, except share data)	2017		2016
Net Interest Income	$	55,663	$	53,190
Noninterest Income	8,540		11,541
Noninterest Expense	42,434		39,395
Net Income	10,885		13,709

Earnings per common share	$	1.24	$	1.56