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The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles. The consolidated financial statements and the footnotes of First Guaranty Bancshares, Inc. ("First Guaranty") thereto should be read in conjunction with the audited consolidated financial statements and note disclosures for First Guaranty previously filed with the Securities and Exchange Commission in First Guaranty's Annual Report on Form 10-K for the year ended December 31, 2025.

 

The consolidated financial statements include the accounts of First Guaranty Bancshares, Inc. and its wholly owned subsidiary First Guaranty Bank (the "Bank"). All significant intercompany balances and transactions have been eliminated in consolidation.

 

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary for a fair presentation of the consolidated financial statements. Those adjustments are of a normal recurring nature. The results of operations at June 30, 2026 and for the three and six-month periods ended June 30, 2026 and 2025 are not necessarily indicative of the results expected for the full year or any other interim period. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near-term relate to the determination of the allowance for credit losses, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, the valuation of the deferred tax asset, and the valuation of investment securities.

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Accounting Standards Adopted in 2026

None.

Accounting Pronouncements Not Yet Adopted

ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures" (ASU 2024-03") requires the disaggregation of certain expenses in the notes to the financial statements, to provide enhanced transparency into the expense captions presented on the face of the income statement. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this ASU may be applied either prospectively or retrospectively. First Guaranty is currently evaluating the impact that this update will have on its disclosures in the consolidated financial statements.

ASU 2025-08, "Financial Instruments—Credit Losses (Topic 326): Purchased Loans" (ASU 2025-08") amendments expand the application of the gross‑up approach to certain acquired loans, referred to as “purchased seasoned loans,” which will be recorded at purchase price plus an allowance for expected credit losses at acquisition rather than through a provision for credit losses. The guidance is effective for annual reporting periods beginning after December 15, 2026, including interim periods within those fiscal years, and is to be applied prospectively. Early adoption is permitted. First Guaranty is currently evaluating the impact that adoption of this guidance will have on its consolidated financial statements.

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A summary comparison of securities by type at June 30, 2026 and December 31, 2025 is shown below. 

						June 30, 2026																								December 31, 2025
(in thousands)						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
Available for sale:
U.S. Treasuries						$	49,539					$	—					$	(32)					$	49,507					$	98,123					$	26					$	—					$	98,149
Corporate debt securities						5,000						—						(87)						4,913						6,500						—						(51)						6,449
Municipal bonds						16,005						64						(890)						15,179						21,211						218						(373)						21,056
Collateralized mortgage obligations						568,188						104						(7,888)						560,404						301,685						1,232						(336)						302,581
Mortgage-backed securities						263,130						279						(2,654)						260,755						246,620						2,085						(348)						248,357
Total available for sale securities						$	901,862					$	447					$	(11,551)					$	890,758					$	674,139					$	3,561					$	(1,108)					$	676,592
Held to maturity:
U.S. Government Agencies						$	268,059					$	—					$	(54,498)					$	213,561					$	267,626					$	—					$	(51,627)					$	215,999
Corporate debt securities						55,294						4						(3,565)						51,733						55,199						8						(3,112)						52,095
Total held to maturity securities						$	323,353					$	4					$	(58,063)					$	265,294					$	322,825					$	8					$	(54,739)					$	268,094

 

The scheduled maturities of securities at June 30, 2026, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities due to calls or prepayments. Mortgage-backed securities are not due at a single maturity because of amortization and potential prepayment of the underlying mortgages. For this reason, they are presented separately in the maturity table below:

 

						At June 30, 2026
(in thousands)						Amortized Cost						Fair Value
Available for sale:
Due in one year or less						$	50,748					$	50,710
Due after one year through five years						8,355						8,189
Due after five years through 10 years						8,653						8,023
Over 10 years						2,788						2,677
Subtotal						70,544						69,599
Collateralized mortgage obligations						568,188						560,404
Mortgage-backed securities						263,130						260,755
Total available for sale securities						$	901,862					$	890,758
Held to maturity:
Due in one year or less						$	—					$	—
Due after one year through five years						67,350						62,186
Due after five years through 10 years						140,237						120,798
Over 10 years						115,766						82,310
Total held to maturity securities						$	323,353					$	265,294

 

At June 30, 2026, $779.7 million of First Guaranty's securities were pledged to secure public funds deposits and borrowings. The pledged securities had a market value of $728.1 million as of June 30, 2026.

Accrued interest receivable on First Guaranty's investment securities was $4.0 million and $3.0 million at June 30, 2026 and December 31, 2025, respectively, and was included in accrued interest receivable on the consolidated balance sheet. First Guaranty had a $0.2 million allowance for credit losses related to the held to maturity portfolio at June 30, 2026 and December 31, 2025.

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The following is a summary of the fair value of securities with gross unrealized losses and an aging of those gross unrealized losses at June 30, 2026.

																					At June 30, 2026
			Less Than 12 Months																		12 Months or More																		Total
(in thousands)			Number of Securities						Fair Value						Gross Unrealized Losses						Number of Securities						Fair Value						Gross Unrealized Losses						Number of Securities						Fair Value						Gross Unrealized Losses
Available for sale:
U.S. Treasuries			4						$	49,507					$	(32)					—						$	—					$	—					4						$	49,507					$	(32)
Corporate debt securities			2						1,983						(17)						3						2,930						(70)						5						4,913						(87)
Municipal bonds			41						7,149						(211)						25						5,720						(679)						66						12,869						(890)
Collateralized mortgage obligations			109						519,960						(7,888)						—						—						—						109						519,960						(7,888)
Mortgage-backed securities			56						176,580						(2,286)						6						11,690						(368)						62						188,270						(2,654)
Total available for sale securities			212						$	755,179					$	(10,434)					34						$	20,340					$	(1,117)					246						$	775,519					$	(11,551)
Held to maturity:
U.S. Government Agencies			—						$	—					$	—					29						$	213,561					$	(54,498)					29						$	213,561					$	(54,498)
Corporate debt securities			2						1,798						(148)						54						49,617						(3,417)						56						51,415						(3,565)
Total held to maturity securities			2						$	1,798					$	(148)					83						$	263,178					$	(57,915)					85						$	264,976					$	(58,063)

The following is a summary of the fair value of securities with gross unrealized losses and an aging of those gross unrealized losses at December 31, 2025. 

																					At December 31, 2025
			Less Than 12 Months																		12 Months or More																		Total
(in thousands)			Number of Securities						Fair Value						Gross Unrealized Losses						Number of Securities						Fair Value						Gross Unrealized Losses						Number of Securities						Fair Value						Gross Unrealized Losses
Available for sale:
U.S. Treasuries			2						$	19,646					$	—					—						$	—					$	—					2						$	19,646					$	—
Corporate debt securities			2						1,989						(11)						4						3,460						(40)						6						5,449						(51)
Municipal bonds			—						—						—						28						6,261						(373)						28						6,261						(373)
Collateralized mortgage obligations			31						137,608						(336)						—						—						—						31						137,608						(336)
Mortgage-backed securities			14						40,812						(130)						10						27,421						(218)						24						68,233						(348)
Total available for sale securities			49						$	200,055					$	(477)					42						$	37,142					$	(631)					91						$	237,197					$	(1,108)
Held to maturity:
U.S. Government Agencies			—						$	—					$	—					29						$	215,999					$	(51,627)					29						$	215,999					$	(51,627)
Corporate debt securities			2						1,805						(136)						54						49,965						(2,976)						56						51,770						(3,112)
Total held to maturity securities			2						$	1,805					$	(136)					83						$	265,964					$	(54,603)					85						$	267,769					$	(54,739)

As of June 30, 2026, 331 of First Guaranty's debt securities had unrealized losses totaling 6.3% of the individual securities' amortized cost basis and 5.7% of First Guaranty's total amortized cost basis of the investment securities portfolio. 117 of the 331 securities had been in a continuous loss position for over 12 months at such date. The 117 securities had an aggregate amortized cost basis of $342.6 million and an unrealized loss of $59.0 million at June 30, 2026. Management has the intent and ability to hold these debt securities until maturity or until anticipated recovery.

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Securities are evaluated for impairment from credit losses at least quarterly and more frequently when economic or market conditions warrant such evaluation. Consideration is given to (i) the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, (iii) the recovery of contractual principal and interest and (iv) the intent and ability of First Guaranty to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

 

Investment securities issued by the U.S. Government and Government sponsored enterprises with unrealized losses and the amount of unrealized losses on those investment securities that are the result of changes in market interest rates will not be credit impaired. First Guaranty has the ability and intent to hold these securities until recovery, which may not be until maturity.

 

Corporate debt securities in a loss position consist primarily of corporate bonds issued by businesses in the financial, insurance, utility, manufacturing, industrial, consumer products and oil and gas industries. There were no held to maturity corporate securities with a credit related impairment loss as of June 30, 2026. First Guaranty believes that the remaining issuers will be able to fulfill the obligations of these securities based on evaluations described above. First Guaranty has the ability and intent to hold these securities until they recover, which could be at their maturity dates.

There were no charge-offs recognized on securities during the six months ended June 30, 2026 and 2025. There were no provisions for credit losses recognized on securities during the six months ended June 30, 2026 and 2025.

For securities that have indications of credit related impairment, management analyzes future expected cash flows to determine if any credit related impairment is evident. Estimated cash flows are determined using management's best estimate of future cash flows based on specific assumptions. The assumptions used to determine the cash flows were based on estimates of loss severity and credit default probabilities. Management reviews reports from credit rating agencies and public filings of issuers. 

 

At June 30, 2026, First Guaranty's exposure to bond issuers that exceeded 10% of shareholders' equity is below: 

						At June 30, 2026
(in thousands)						Amortized Cost						Fair Value
U.S. Government Treasuries (U.S.)						$	49,539					$	49,507
Federal Home Loan Bank (FHLB)						32,460						27,084
Federal Home Loan Mortgage Corporation (Freddie Mac-FHLMC)						101,917						76,433
Federal Farm Credit Bank (FFCB)						139,962						116,202
Government National Mortgage Association (Ginnie Mae-GNMA)						822,829						812,776
Total						$	1,146,707					$	1,082,002

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The following table summarizes the components of First Guaranty's loan portfolio as of June 30, 2026 and December 31, 2025: 

						June 30, 2026												December 31, 2025
(in thousands except for %)						Balance						As % of Category						Balance						As % of Category
Real Estate:
Construction & land development						$	99,000					5.6		%				$	149,493					7.2		%
Farmland						30,878						1.7		%				32,160						1.5		%
1- 4 Family						420,388						23.8		%				428,773						20.7		%
Multifamily						85,772						4.8		%				144,235						6.9		%
Non-farm non-residential						790,300						44.7		%				948,536						45.7		%
Total Real Estate						1,426,338						80.6		%				1,703,197						82.0		%
Non-Real Estate:
Agricultural						42,860						2.4		%				35,244						1.7		%
Commercial and industrial						222,627						12.6		%				228,738						11.0		%
Commercial leases						56,619						3.2		%				75,617						3.7		%
Consumer and other						21,223						1.2		%				33,023						1.6		%
Total Non-Real Estate						343,329						19.4		%				372,622						18.0		%
Total Loans Before Unearned Income						1,769,667						100.0		%				2,075,819						100.0		%
Unearned income						(4,457)												(6,017)
Total Loans Net of Unearned Income						$	1,765,210											$	2,069,802

Accrued interest receivable on First Guaranty's loans totaled $7.9 million and $9.4 million at June 30, 2026 and December 31, 2025, respectively, and is included in accrued interest receivable on the consolidated balance sheet. Accrued interest receivable is excluded from First Guaranty's estimate of the allowance for credit losses.

The following table summarizes fixed and floating rate loans by contractual maturity, excluding nonaccrual loans, as of June 30, 2026 and December 31, 2025 unadjusted for scheduled principal payments, prepayments, or repricing opportunities. The average life of the loan portfolio may be substantially less than the contractual terms when these adjustments are considered. 

						June 30, 2026																		December 31, 2025
(in thousands)						Fixed						Floating						Total						Fixed						Floating						Total
One year or less						$	213,025					$	167,959					$	380,984					$	269,181					$	200,350					$	469,531
More than one to five years						144,571						106,566						251,137						174,719						175,338						350,057
More than five to 15 years						50,529						237,485						288,014						54,639						254,314						308,953
Over 15 years						338,874						470,064						808,938						338,713						548,984						887,697
Subtotal						$	746,999					$	982,074					1,729,073						$	837,252					$	1,178,986					2,016,238
Nonaccrual loans																		40,594																		59,581
Total Loans Before Unearned Income																		1,769,667																		2,075,819
Unearned income																		(4,457)																		(6,017)
Total Loans Net of Unearned Income																		$	1,765,210																	$	2,069,802

 

Included in floating rate loans are loans that adjust to a floating rate following an initial fixed rate period. The initial fixed rate periods are typically one, three, or five years.

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The following tables present the age analysis of past due loans at June 30, 2026 and December 31, 2025: 

						As of June 30, 2026
(in thousands)						30-89 Days Past Due						90 Days or Greater						Total Past Due						Current						Total Loans						Recorded Investment 90 Days Accruing
Real Estate:
Construction & land development						$	1,473					$	18,823					$	20,296					$	78,704					$	99,000					$	—
Farmland						1,362						2,595						3,957						26,921						30,878						—
1- 4 family						3,211						7,593						10,804						409,584						420,388						—
Multifamily						—						2,215						2,215						83,557						85,772						—
Non-farm non-residential						3,592						7,064						10,656						779,644						790,300						—
Total Real Estate						9,638						38,290						47,928						1,378,410						1,426,338						—
Non-Real Estate:
Agricultural						79						1,436						1,515						41,345						42,860						—
Commercial and industrial						756						841						1,597						221,030						222,627						—
Commercial leases						1,057						—						1,057						55,562						56,619						—
Consumer and other						208						27						235						20,988						21,223						—
Total Non-Real Estate						2,100						2,304						4,404						338,925						343,329						—
Total Loans Before Unearned Income						$	11,738					$	40,594					$	52,332					$	1,717,335					$	1,769,667					$	—
Unearned income																														(4,457)
Total Loans Net of Unearned Income																														$	1,765,210

 

						As of December 31, 2025
(in thousands)						30-89 Days Past Due						90 Days or Greater						Total Past Due						Current						Total Loans						Recorded Investment 90 Days Accruing
Real Estate:
Construction & land development						$	42					$	9,281					$	9,323					$	140,170					$	149,493					$	—
Farmland						17						2,671						2,688						29,472						32,160						—
1- 4 family						12,875						10,531						23,406						405,367						428,773						763
Multifamily						175						2,278						2,453						141,782						144,235						—
Non-farm non-residential						6,456						24,380						30,836						917,700						948,536						33
Total Real Estate						19,565						49,141						68,706						1,634,491						1,703,197						796
Non-Real Estate:
Agricultural						1,263						2,172						3,435						31,809						35,244						—
Commercial and industrial						3,004						2,266						5,270						223,468						228,738						—
Commercial leases						2,123						6,640						8,763						66,854						75,617						—
Consumer and other						527						158						685						32,338						33,023						—
Total Non-Real Estate						6,917						11,236						18,153						354,469						372,622						—
Total Loans Before Unearned Income						$	26,482					$	60,377					$	86,859					$	1,988,960					$	2,075,819					$	796
Unearned income																														(6,017)
Total Loans Net of Unearned Income																														$	2,069,802

 

The tables above include $40.6 million and $59.6 million of nonaccrual loans at June 30, 2026 and December 31, 2025, respectively. See the tables below for more detail on nonaccrual loans.

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The following is a summary of nonaccrual loans by class at the dates indicated: 

						As of June 30, 2026
(in thousands)						With Related Allowance						Without Related Allowance						Total
Real Estate:
Construction & land development						$	8,034					$	10,789					$	18,823
Farmland						204						2,391						2,595
1- 4 family						7,593						—						7,593
Multifamily						162						2,053						2,215
Non-farm non-residential						4,358						2,706						7,064
Total Real Estate						20,351						17,939						38,290
Non-Real Estate:
Agricultural						806						630						1,436
Commercial and industrial						841						—						841
Commercial leases						—						—						—
Consumer and other						27						—						27
Total Non-Real Estate						1,674						630						2,304
Total Nonaccrual Loans						$	22,025					$	18,569					$	40,594

						As of December 31, 2025
(in thousands)						With Related Allowance						Without Related Allowance						Total
Real Estate:
Construction & land development						$	436					$	8,845					$	9,281
Farmland						224						2,447						2,671
1- 4 family						9,091						677						9,768
Multifamily						197						2,081						2,278
Non-farm non-residential						5,641						18,706						24,347
Total Real Estate						15,589						32,756						48,345
Non-Real Estate:
Agricultural						1,257						915						2,172
Commercial and industrial						912						1,354						2,266
Commercial leases						5,803						837						6,640
Consumer and other						158						—						158
Total Non-Real Estate						8,130						3,106						11,236
Total Nonaccrual Loans						$	23,719					$	35,862					$	59,581

 

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The following table presents First Guaranty's loan portfolio by credit quality classification and origination year as of the date indicated:

						As of June 30, 2026
						Term Loans by Origination Year
(in thousands)						2026						2025						2024						2023						2022						Prior						Revolving Loans						Total
Real Estate:
Construction & land development:
Pass						$	5,384					$	6,711					$	5,804					$	6,538					$	5,669					4,702						$	280					$	35,088
Special Mention						—						—						82						9,191						34,045						514						—						43,832
Substandard						—						2,685						—						17,080						181						134						—						20,080
Doubtful						—						—						—						—						—						—						—						—
Total Construction & land development						5,384						9,396						5,886						32,809						39,895						5,350						280						99,000
Current period gross charge-offs						—						—						—						—						—						—						—						—
Farmland
Pass						1,496						1,421						2,489						2,827						3,432						5,694						1,296						18,655
Special Mention						—						—						119						—						—						1,424						—						1,543
Substandard						—						—						2,817						3,677						75						4,111						—						10,680
Doubtful						—						—						—						—						—						—						—						—
Total Farmland						1,496						1,421						5,425						6,504						3,507						11,229						1,296						30,878
Current period gross charge-offs						—						—						—						—						—						—						—						—
1- 4 family
Pass						16,951						32,819						50,460						82,910						82,700						110,388						4,625						380,853
Special Mention						—						—						65						611						4,121						5,731						1,118						11,646
Substandard						—						2,249						3,080						5,194						4,637						12,404						325						27,889
Doubtful						—						—						—						—						—						—						—						—
Total 1- 4 family						16,951						35,068						53,605						88,715						91,458						128,523						6,068						420,388
Current period gross charge-offs						—						—						79						95						556						1,449						—						2,179
Multifamily
Pass						—						—						429						29,388						28,087						9,805						3,567						71,276
Special Mention						—						—						—						30						59						—						828						917
Substandard						—						—						—						332						13,247						—						—						13,579
Doubtful						—						—						—						—						—						—						—						—
Total Multifamily						—						—						429						29,750						41,393						9,805						4,395						85,772
Current period gross charge-offs						—						—						—						25						—						—						—						25
Non-farm non-residential
Pass						11,082						15,899						53,409						100,367						163,421						206,823						5,203						556,204
Special Mention						552						192						6,947						22,467						15,195						34,599						6,497						86,449
Substandard						—						799						3,399						43,482						30,930						69,037						—						147,647
Doubtful						—						—						—						—						—						—						—						—
Total non-farm non-residential						11,634						16,890						63,755						166,316						209,546						310,459						11,700						790,300
Current period gross charge-offs						—						—						268						1,471						235						300						—						2,274
Total Real Estate						35,465						62,775						129,100						324,094						385,799						465,366						23,739						1,426,338
Non-Real Estate:
Agricultural
Pass						888						2,055						1,488						1,132						1,620						3,574						22,315						33,072
Special Mention						—						62						75						63						—						270						141						611
Substandard						—						—						17						165						7,046						1,416						533						9,177
Doubtful						—						—						—						—						—						—						—						—
Total Agricultural						888						2,117						1,580						1,360						8,666						5,260						22,989						42,860
Current period gross charge-offs						—						—						—						49						—						246						—						295
Commercial and industrial
Pass						76,203						12,410						5,038						3,752						3,234						6,902						49,361						156,900

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Special Mention						2,081						33,517						628						188						221						387						1,780						38,802
Substandard						—						14						45						1,746						5,250						314						19,556						26,925
Doubtful						—						—						—						—						—						—						—						—
Total Commercial and industrial						78,284						45,941						5,711						5,686						8,705						7,603						70,697						222,627
Current period gross charge-offs						—						94						1,936						19						29						(43)						—						2,035
Commercial leases
Pass						—						2,288						1,311						9,491						16,080						4,338						—						33,508
Special Mention						—						1,118						1,555						69						—						—						—						2,742
Substandard						—						—						11,643						6,557						2,169						—						—						20,369
Doubtful						—						—						—						—						—						—						—						—
Total Commercial leases						—						3,406						14,509						16,117						18,249						4,338						—						56,619
Current period gross charge-offs						—						—						(652)						5,711						772						92						—						5,923
Consumer and other loans
Pass						4,233						3,716						2,117						1,524						845						8,474						—						20,909
Special Mention						—						—						—						—						4						28						—						32
Substandard						—						95						29						49						33						76						—						282
Doubtful						—						—						—						—						—						—						—						—
Total Consumer and other loans						4,233						3,811						2,146						1,573						882						8,578						—						21,223
Current period gross charge-offs						58						49						47						102						120						77						—						453
Total Non-Real Estate						83,405						55,275						23,946						24,736						36,502						25,779						93,686						343,329
Total Loans
Pass						116,237						77,319						122,545						237,929						305,088						360,700						86,647						1,306,465
Special Mention						2,633						34,889						9,471						32,619						53,645						42,953						10,364						186,574
Substandard						—						5,842						21,030						78,282						63,568						87,492						20,414						276,628
Doubtful						—						—						—						—						—						—						—						—
Total Loans Before Unearned Income						$	118,870					$	118,050					$	153,046					$	348,830					$	422,301					$	491,145					$	117,425					$	1,769,667
Unearned income																																																(4,457)
Total Loans Net of Unearned Income																																																$	1,765,210
Total Current Period Gross Charge-offs						$	58					$	143					$	1,678					$	7,472					$	1,712					$	2,121					$	—					$	13,184

						As of December 31, 2025
						Term Loans by Origination Year
(in thousands)						2025						2024						2023						2022						2021						Prior						Revolving Loans						Total
Real Estate:
Construction & land development:
Pass						$	11,416					$	8,479					$	6,888					$	31,030					$	5,894					2,626						$	6,005					$	72,338
Special Mention						—						32						16,735						12,348						—						120						—						29,235
Substandard						1,273						1,810						41,808						961						2,066						2						—						47,920
Doubtful						—						—						—						—						—						—						—						—
Total Construction & land development						12,689						10,321						65,431						44,339						7,960						2,748						6,005						149,493
Current period gross charge-offs						—						—						—						5,794						—						—						—						5,794
Farmland
Pass						1,474						2,869						2,538						3,697						4,674						1,741						3,037						20,030
Special Mention						—						155						—						30						—						2,607						—						2,792
Substandard						—						2,852						3,797						35						—						2,654						—						9,338
Doubtful						—						—						—						—						—						—						—						—
Total Farmland						1,474						5,876						6,335						3,762						4,674						7,002						3,037						32,160
Current period gross charge-offs						—						—						—						—						—						68						—						68

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1- 4 family
Pass						32,828						55,162						88,161						91,666						51,709						72,022						7,636						399,184
Special Mention						—						68						410						1,736						499						3,902						246						6,861
Substandard						2,285						116						4,898						4,535						3,436						6,746						636						22,652
Doubtful						—						—						—						76						—						—						—						76
Total 1- 4 family						35,113						55,346						93,469						98,013						55,644						82,670						8,518						428,773
Current period gross charge-offs						—						—						—						21						180						456						—						657
Multifamily
Pass						2,994						435						6,936						41,186						5,258						6,148						3,658						66,615
Special Mention						—						—						22,950						15						40,890						—						—						63,855
Substandard						—						—						372						13,393						—						—						—						13,765
Doubtful						—						—						—						—						—						—						—						—
Total Multifamily						2,994						435						30,258						54,594						46,148						6,148						3,658						144,235
Current period gross charge-offs						—						—						—						10,670						—						—						—						10,670
Non-farm non-residential
Pass						16,962						38,215						113,566						150,487						65,144						171,799						10,726						566,899
Special Mention						194						16,662						25,187						31,289						10,533						71,231						27,969						183,065
Substandard						878						9,666						38,876						50,372						21,811						70,695						6,274						198,572
Doubtful						—						—						—						—						—						—						—						—
Total non-farm non-residential						18,034						64,543						177,629						232,148						97,488						313,725						44,969						948,536
Current period gross charge-offs						—						9,432						—						33						3,360						66						—						12,891
Total Real Estate						70,304						136,521						373,122						432,856						211,914						412,293						66,187						1,703,197
Non-Real Estate:
Agricultural
Pass						1,713						1,716						1,435						1,779						1,219						2,705						14,328						24,895
Special Mention						70						85						72						1,014						—						79						—						1,320
Substandard						—						20						46						6,187						239						2,297						240						9,029
Doubtful						—						—						—						—						—						—						—						—
Total Agricultural						1,783						1,821						1,553						8,980						1,458						5,081						14,568						35,244
Current period gross charge-offs						—						169						—						—						—						—						—						169
Commercial and industrial
Pass						36,431						14,475						13,846						6,284						28,635						8,722						54,165						162,558
Special Mention						33,579						160						2,098						5,052						607						256						516						42,268
Substandard						135						36						39						697						1,327						4,009						14,052						20,295
Doubtful						—						3,617						—						—						—						—						—						3,617
Total Commercial and industrial						70,145						18,288						15,983						12,033						30,569						12,987						68,733						228,738
Current period gross charge-offs						29						220						599						281						184						26						—						1,339
Commercial leases
Pass						2,902						4,262						11,901						16,586						8,790						—						—						44,441
Special Mention						—						—						—						—						—						—						—						—
Substandard						—						12,831						7,337						3,426						1,457						414						—						25,465
Doubtful						—						—						5,711						—						—						—						—						5,711
Total Commercial leases						2,902						17,093						24,949						20,012						10,247						414						—						75,617
Current period gross charge-offs						—						17,728						18,899						233						7,347						—						—						44,207
Consumer and other loans
Pass						6,860						3,134						11,118						1,433						1,370						8,580						—						32,495
Special Mention						—						—						1						6						36						—						—						43
Substandard						32						37						94						147						142						33						—						485
Doubtful						—						—						—						—						—						—						—						—
Total Consumer and other loans						6,892						3,171						11,213						1,586						1,548						8,613						—						33,023
Current period gross charge-offs						237						189						240						338						259						120						—						1,383
Total Non-Real Estate						81,722						40,373						53,698						42,611						43,822						27,095						83,301						372,622
Total Loans

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Pass						113,580						128,747						256,389						344,148						172,693						274,343						99,555						1,389,455
Special Mention						33,843						17,162						67,453						51,490						52,565						78,195						28,731						329,439
Substandard						4,603						27,368						97,267						79,753						30,478						86,850						21,202						347,521
Doubtful						—						3,617						5,711						76						—						—						—						9,404
Total Loans Before Unearned Income						$	152,026					$	176,894					$	426,820					$	475,467					$	255,736					$	439,388					$	149,488					$	2,075,819
Unearned income																																																(6,017)
Total Loans Net of Unearned Income																																																$	2,069,802
Total Current Period Gross Charge-offs						$	266					$	27,738					$	19,738					$	17,370					$	11,330					$	736					$	—					$	77,178

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A summary of changes in the allowance for credit losses, by portfolio type, for the six months ended June 30, 2026 and 2025 are as follows: 

						For the Six Months Ended June 30,
						2026
(in thousands)						Beginning Allowance (12/31/2025)						Charge-offs						Recoveries						Provision						Ending Allowance (6/30/2026)
Real Estate:
Construction & land development						$	2,079					$	—					$	150					$	912					$	3,141
Farmland						183						—						—						7						190
1- 4 family						13,340						(2,179)						400						(60)						11,501
Multifamily						1,377						(25)						—						1,179						2,531
Non-farm non-residential						12,054						(2,274)						225						30						10,035
Total Real Estate						29,033						(4,478)						775						2,068						27,398
Non-Real Estate:
Agricultural						173						(295)						226						269						373
Commercial and industrial						6,271						(2,035)						171						(1,878)						2,529
Commercial leases						1,192						(5,923)						130						6,705						2,104
Consumer and other						1,007						(453)						176						100						830
Unallocated						3,079						—						—						(2,014)						1,065
Total Non-Real Estate						11,722						(8,706)						703						3,182						6,901
Total Loans						$	40,755					$	(13,184)					$	1,478					$	5,250					$	34,299
Unfunded lending commitments						700						—						—						—						700
Total						$	41,455					$	(13,184)					$	1,478					$	5,250					$	34,999

						For the Six Months Ended June 30,
						2025
(in thousands)						Beginning Allowance (12/31/2024)						Charge-offs						Recoveries						Provision						Ending Allowance (6/30/2025)
Real Estate:
Construction & land development						$	3,930					$	(5,794)					$	—					$	5,504					$	3,640
Farmland						50						—						—						122						172
1- 4 family						9,243						(16)						22						6,751						16,000
Multifamily						3,949						—						—						3,537						7,486
Non-farm non-residential						11,531						(33)						16						10,350						21,864
Total Real Estate						28,703						(5,843)						38						26,264						49,162
Non-Real Estate:
Agricultural						204						(169)						—						211						246
Commercial and industrial						1,994						(975)						52						4,616						5,687
Commercial leases						1,719						(233)						—						619						2,105
Consumer and other						1,337						(797)						319						457						1,316
Unallocated						854						—						—						(499)						355
Total Non-Real Estate						6,108						(2,174)						371						5,404						9,709
Total Loans						$	34,811					$	(8,017)					$	409					$	31,668					$	58,871
Unfunded lending commitments						1,210						—						—						(510)						700
Total						$	36,021					$	(8,017)					$	409					$	31,158					$	59,571

Negative provisions are caused by changes in the composition and credit quality of the loan portfolio and by recoveries. The result is an allocation of the credit loss reserve from one category to another.

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A summary of the allowance along with loans and leases individually and collectively evaluated are as follows: 

						As of June 30, 2026
(in thousands)						Allowance Individually Evaluated						Allowance Collectively Evaluated						Total Allowance for Credit Losses						Loans Individually Evaluated						Loans Collectively Evaluated						Total Loans before Unearned Income
Real Estate:
Construction & land development						$	73					$	3,068					$	3,141					$	18,512					$	80,488					$	99,000
Farmland						—						190						190						2,391						28,487						30,878
1- 4 family						794						10,707						11,501						7,036						413,352						420,388
Multifamily						1,783						748						2,531						8,336						77,436						85,772
Non-farm non-residential						554						9,481						10,035						37,963						752,337						790,300
Total Real Estate						3,204						24,194						27,398						74,238						1,352,100						1,426,338
Non-Real Estate:
Agricultural						—						373						373						630						42,230						42,860
Commercial and industrial						—						2,529						2,529						25,514						197,113						222,627
Commercial leases						—						2,104						2,104						—						56,619						56,619
Consumer and other						—						830						830						—						21,223						21,223
Unallocated						—						1,065						1,065						—						—						—
Total Non-Real Estate						—						6,901						6,901						26,144						317,185						343,329
Total						$	3,204					$	31,095					$	34,299					$	100,382					$	1,669,285					1,769,667
Unearned Income																																				(4,457)
Total Loans Net of Unearned Income																																				$	1,765,210

$69.1 million of loans individually evaluated for impairment as of June 30, 2026 were considered collateral dependent loans.

 

						As of December 31, 2025
(in thousands)						Allowance Individually Evaluated									Allowance Collectively Evaluated						Total Allowance for Credit Losses						Loans Individually Evaluated									Loans Collectively Evaluated						Total Loans before Unearned Income
Real Estate:
Construction & land development						$	—								$	2,079					$	2,079					$	28,237								$	121,256					$	149,493
Farmland						—									183						183						2,447									29,713						32,160
1- 4 family						857									12,483						13,340						7,816									420,957						428,773
Multifamily						11									1,366						1,377						8,446									135,789						144,235
Non-farm non-residential						1,398									10,656						12,054						41,888									906,648						948,536
Total Real Estate						2,266									26,767						29,033						88,834									1,614,363						1,703,197
Non-Real Estate:
Agricultural						—									173						173						915									34,329						35,244
Commercial and industrial						3,534									2,737						6,271						5,308									223,430						228,738
Commercial leases						—									1,192						1,192						6,548									69,069						75,617
Consumer and other						—									1,007						1,007						—									33,023						33,023
Unallocated						—									3,079						3,079						—									—						—
Total Non-Real Estate						3,534									8,188						11,722						12,771									359,851						372,622
Total						$	5,800								$	34,955					$	40,755					$	101,605								$	1,974,214					2,075,819
Unearned Income																																										(6,017)
Total loans net of unearned income																																										$	2,069,802

$91.8 million of loans individually evaluated for impairment as of December 31, 2025 were considered collateral dependent loans.

As of June 30, 2026 and December 31, 2025, First Guaranty had loans totaling $40.6 million and $59.6 million, respectively, not accruing interest. First Guaranty had no loans past due 90 days or more and still accruing interest as of June 30, 2026 as compared to $0.8 million as of December 31, 2025. The average outstanding balance of nonaccrual loans for the six months ended June 30, 2026 was $55.4 million compared to $114.6 million for the year ended December 31, 2025.

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The Bank held loans that were individually evaluated for impairment at June 30, 2026 for which the repayment, on the basis of the assessment at the reporting date, is expected to be provided substantially though the operation or sale of the collateral and the borrower is experiencing financial difficulty. The Allowance for Credit Losses for these collateral-dependent loans is primarily based on the fair value of the underlying collateral at the reporting date. The following describes the type of collateral that secure collateral dependent loans:

•Residential real estate loans are primarily secured by first liens on residential real estate.

•Commercial real estate loans are primarily secured by office and industrial buildings, warehouses, retail shopping facilities and various special purpose properties, including hotels and restaurants.

•Construction and land loans are primarily secured by residential and commercial properties, which are under construction and/or redevelopment, and by raw land.

•Commercial loans are primarily secured by accounts receivable, inventory and equipment.

•Agriculture loans are primarily secured by farmland and equipment.

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

Occasionally, the Bank modifies loans to borrowers in financial distress by providing certain concessions, such as principal forgiveness, term extension, an other-than-insignificant payment delay, interest only for a specified period of time, an interest rate reduction, or a combination of such concessions. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. Upon the Bank’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is charged-off.

The Bank did not execute any new reportable modifications to borrowers experiencing financial difficulty (MEFD) during the six months ended June 30, 2026. As of June 30, 2026, loans that had been previously modified for borrowers experiencing financial difficulty consisted of $13.1 million of term extensions, $11.8 million of loan term modifications, and $0.4 million of payment delays. The Bank had no unfunded commitments to borrowers whose terms have been modified as a reportable MEFD as of June 30, 2026.

As of June 30, 2026, there have been no loans that were modified within the previous 12 months for which there has been payment default during the period.

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Goodwill and intangible assets deemed to have indefinite lives are not amortized but are evaluated for impairment. First Guaranty performs impairment testing when events or changes in circumstances indicate it is more likely than not that the carrying amount may not be recoverable. As a result of prior impairment testing, no goodwill remains on the balance sheet.

During 2025, First Guaranty performed a quantitative impairment test as of September 30, 2025, using a combination of market and income approaches, including the guideline public company method, guideline precedent transaction method, and discounted cash flow analysis. The test was triggered by First Guaranty's stock price trading below book value and the recent increase in credit provisions. Based on the results of the test, First Guaranty concluded the goodwill of $12.9 million was impaired and recorded a one-time non-cash impairment charge during 2025. No goodwill impairment charges were recorded in periods prior to 2025.

Other intangible assets continue to be amortized over their useful lives. Loan servicing assets totaled $0.2 million at June 30, 2026 and $0.3 million at December 31, 2025. Other intangible assets recorded include core deposit intangibles, which are subject to amortization. The weighted-average amortization period remaining for First Guaranty's core deposit intangibles is 2.8 years at June 30, 2026. The core deposits intangible reflect the value of deposit relationships, including the beneficial rates, which arose from acquisitions.

 

Other real estate owned consists of the following at the dates indicated: 

(in thousands)						June 30, 2026						December 31, 2025
Other Real Estate Owned:
Residential						$	897					$	351
Construction & land development						1,161						8,161
Non-farm non-residential						27,663						26,572
Total Other Real Estate Owned						$	29,721					$	35,084

During 2025, First Guaranty transferred $4.4 million of existing bank owned properties previously used as either operating branches or future branch development to other real estate owned. As of June 30, 2026, these properties had a carrying value of $4.3 million and were held for sale.

During the first quarter of 2026, First Guaranty entered into amendments to further amend the promissory note for the senior debt owed to a related party and subordinated note to a related party which allows First Guaranty to extend the waiver of principal payments and permit quarterly interest payments in cash or shares of common stock through March 31, 2028.

First Guaranty issued 21,241 shares of common stock for payment in kind ("PIK") interest due on the senior debt for the quarter ended June 30, 2026. First Guaranty issued 53,605 shares of common stock as PIK payments of interest on a $30.0 million subordinated debt for the quarter ended June 30, 2026.

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Off-balance sheet commitments

 

First Guaranty is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit and standby and commercial letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. The contract or notional amounts of those instruments reflect the extent of the involvement in particular classes of financial instruments.

 

The exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby and commercial letters of credit is represented by the contractual notional amount of those instruments. The same credit policies are used in making commitments and conditional obligations as it does for balance sheet instruments. Unless otherwise noted, collateral or other security is not required to support financial instruments with credit risk.

 

Below is a summary of the notional amounts of the financial instruments with off-balance sheet risk at June 30, 2026 and December 31, 2025:

Contract Amount

(in thousands)						June 30, 2026						December 31, 2025
Commitments to Extend Credit						$	22,133					$	70,846
Unfunded Commitments under lines of credit						$	135,938					$	161,690
Commercial and Standby letters of credit						$	19,207					$	18,531

 

Allowance For Credit Losses - Off- Balance-Sheet Credit Exposures

The provision for credit losses on unfunded commitments was $0 for the six months ended June 30, 2026 compared to a reversal of $0.5 million for the six months ended June 30, 2025. The ACL on off-balance-sheet credit exposures totaled $0.7 million at June 30, 2026 and December 31, 2025 and is included in other liabilities on the accompanying consolidated balance sheets.

Litigation

First Guaranty is subject to various legal proceedings in the normal course of its business. First Guaranty assesses its liabilities and contingencies in connection with outstanding legal proceedings. Where it is probable that First Guaranty will incur a loss and the amount of the loss can be reasonably estimated, First Guaranty records a liability in its consolidated financial statements. First Guaranty does not record a loss if the loss is not probable or the amount of the loss is not estimable. First Guaranty Bank is a defendant in a lawsuit alleging fault for a loss of funds by a customer related to fraud by a third party with a possible loss range of $0.0 million to $1.5 million. The Bank denies the allegations and intends to vigorously defend against this lawsuit, which is in early stages and no trial date has been set. No accrued liability has been recorded related to this lawsuit. In the opinion of management, neither First Guaranty nor First Guaranty Bank is currently involved in such legal proceedings, either individually or in the aggregate, that the resolution is expected to have a material adverse effect on First Guaranty’s consolidated results of operations, financial condition, or cash flows. However, one or more unfavorable outcomes in these ordinary claims or litigation against First Guaranty or First Guaranty Bank could have a material adverse effect for the period in which they are resolved. In addition, regardless of their merits or ultimate outcomes, such matters are costly, divert management’s attention, and may materially and adversely affect the reputation of First Guaranty and First Guaranty Bank, even if resolved favorably.

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First Guaranty’s primary leasing activities relate to certain real estate leases of certain branches, and certain ATM locations. These leases have all been designated as operating leases. First Guaranty does not lease equipment under operating leases, and does not have leases designated as financing leases.

On April 29, 2026, First Guaranty repurchased certain properties, previously sold in a sale-leaseback transaction in June of 2024, for an aggregate purchase price of $14.8 million. Upon repurchase, the related lease agreements were terminated and no further lease payments are required. Lease expense associated with the sale‑leaseback arrangement totaled approximately $0.3 million per quarter prior to termination. As a result of the repurchase, this lease expense relating to these properties was eliminated and partially offset by depreciation expense, which is expected to increase by approximately $0.2 million per quarter.

Information concerning First Guaranty’s leases is as follows:

						June 30, 2026						June 30, 2025
Weighted-average lease term (in years)						1.9						13.8
Weighted-average discount rate						2.9		%				7.9		%

First Guaranty’s operating lease right-of-use ("ROU") assets were $0.1 million and $11.1 million at June 30, 2026 and December 31, 2025, respectively, and the related operating lease liabilities were $0.1 million and $11.2 million, respectively. The ROU asset is included in Other Assets on the balance sheet, and the related operating lease liabilities are included in Other Liabilities.

Operating lease expense, including short-term leases, is included in occupancy expense in the amount of $0.6 million and $0.8 million for the six months ended June 30, 2026 and June 30, 2025, respectively. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Cash payment for amounts included in the measurement of lease liabilities of $0.1 million and $0.7 million were included in operating cash flows for the respective six-month periods.

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The fair value of a financial instrument is the current amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. Valuation techniques use certain inputs to arrive at fair value. Inputs to valuation techniques are the assumptions that market participants would use in pricing the asset or liability. They may be observable or unobservable. First Guaranty uses a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

 

Level 1 Inputs – Unadjusted quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

 

Level 2 Inputs – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds or credit risks) or inputs that are derived principally from or corroborated by market data by correlation or other means.

 

Level 3 Inputs – Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity's own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

 

A description of the valuation methodologies used for instruments measured at fair value follows, as well as the classification of such instruments within the valuation hierarchy.

 

Securities available for sale. Securities are classified within Level 1 where quoted market prices are available in an active market. Inputs include securities that have quoted prices in active markets for identical assets. If quoted market prices are unavailable, fair value is estimated using quoted prices of securities with similar characteristics, at which point the securities would be classified within Level 2 of the hierarchy. Securities classified within Level 3 in First Guaranty's portfolio as of June 30, 2026 include corporate debt and municipal securities.

Loan individually evaluated for impairment. Fair value is measured by either the fair value of the collateral if the loan is collateral dependent (Level 2 or Level 3), or the present value of expected future cash flows, discounted at the loan's effective interest rate (Level 3). Fair value of the collateral is determined by appraisals or by independent valuation. 

Other real estate owned. Properties are recorded at the balance of the loan or at estimated fair value less estimated selling costs, whichever is less, at the date acquired. Fair values of other real estate owned ("OREO") are determined by sales agreement or appraisal, and costs to sell are based on estimation per the terms and conditions of the sales agreement or amounts commonly used in real estate transactions. Inputs include appraisal values or recent sales activity for similar assets in the property's market; thus, OREO measured at fair value would be classified within either Level 2 or Level 3 of the hierarchy. During 2025, First Guaranty transferred $4.4 million of existing bank owned properties previously used as either operating branches or future branch development to other real estate owned. As of June 30, 2026, these properties had a carrying value of $4.3 million, and were held for sale. The properties are included in Level 3 as of June 30, 2026.

 

Certain non-financial assets and non-financial liabilities are measured at fair value on a non-recurring basis including assets and liabilities related to reporting units measured at fair value in the testing of goodwill impairment, as well as intangible assets and other non-financial long-lived assets measured at fair value for impairment assessment.

The following table summarizes financial assets measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: 

(in thousands)						June 30, 2026						December 31, 2025
Available for Sale Securities Fair Value Measurements Using:
Level 1: Quoted Prices in Active Markets For Identical Assets						$	49,507					$	98,149
Level 2: Significant Other Observable Inputs						825,490						555,565
Level 3: Significant Unobservable Inputs						15,761						22,878
Securities available for sale measured at fair value						$	890,758					$	676,592

 

First Guaranty's valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While the methodologies used are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value.

The change in Level 1 securities available for sale from December 31, 2025 to June 30, 2026 was due to a net decrease in Treasury bills of $48.6 million. There were no transfers between Level 2 and Level 3 from December 31, 2025 to June 30, 2026. There were no transfers between Level 1 and 2 securities available for sale from December 31, 2025 to June 30, 2026.

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The following table reconciles assets measured at fair value on a recurring basis using unobservable inputs (Level 3):

						Level 3 Changes
(in thousands)						June 30, 2026						December 31, 2025
Balance, beginning of year						$	22,878					$	6,095
Total gains or losses (realized/unrealized):
Included in earnings						—						—
Included in other comprehensive income						(730)						121
Purchases, sales, issuances and settlements, net						(6,387)						(473)
Transfers in and/or out of Level 3						—						17,135
Balance as of end of period						$	15,761					$	22,878

There were no gains or losses for the period included in earnings attributable to the change in unrealized gains or losses related to assets still held as of June 30, 2026.

The following table measures financial assets and financial liabilities measured at fair value on a non-recurring basis as of June 30, 2026 and December 31, 2025, segregated by the level of valuation inputs within the fair value hierarchy utilized to measure fair value: 

(in thousands)						At June 30, 2026						At December 31, 2025
Fair Value Measurements Using: Loans Individually Evaluated for Impairment
Level 1: Quoted Prices in Active Markets For Identical Assets						$	—					$	—
Level 2: Significant Other Observable Inputs						—						—
Level 3: Significant Unobservable Inputs						21,903						43,809
Loans individually evaluated for impairment measured at fair value						$	21,903					$	43,809
Fair Value Measurements Using: Other Real Estate Owned
Level 1: Quoted Prices in Active Markets For Identical Assets						$	—					$	—
Level 2: Significant Other Observable Inputs						—						—
Level 3: Significant Unobservable Inputs						29,721						35,084
Other real estate owned measured at fair value						$	29,721					$	35,084

ASC 825-10 provides First Guaranty with an option to report selected financial assets and liabilities at fair value. The fair value option established by this statement permits First Guaranty to choose to measure eligible items at fair value at specified election dates and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each reporting date subsequent to implementation.

 

First Guaranty has chosen not to elect the fair value option for any items that are not already required to be measured at fair value in accordance with accounting principles generally accepted in the United States.

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Fair value estimates are generally subjective in nature and are dependent upon a number of significant assumptions associated with each instrument or group of similar instruments, including estimates of discount rates, risks associated with specific financial instruments, estimates of future cash flows and relevant available market information. Fair value information is intended to represent an estimate of an amount at which a financial instrument could be exchanged in a current transaction between a willing buyer and seller engaging in an exchange transaction. However, since there are no established trading markets for a significant portion of First Guaranty's financial instruments, First Guaranty may not be able to immediately settle financial instruments; as such, the fair values are not necessarily indicative of the amounts that could be realized through immediate settlement. In addition, the majority of the financial instruments, such as loans and deposits, are held to maturity and are realized or paid according to the contractual agreement with the customer.

 

Quoted market prices are used to estimate fair values when available. However, due to the nature of the financial instruments, in many instances quoted market prices are not available. Accordingly, estimated fair values have been estimated based on other valuation techniques, such as discounting estimated future cash flows using a rate commensurate with the risks involved or other acceptable methods. Fair values are estimated without regard to any premium or discount that may result from concentrations of ownership of financial instruments, possible income tax ramifications or estimated transaction costs. The fair value estimates are subjective in nature and involve matters of significant judgment and, therefore, cannot be determined with precision. Fair values are also estimated at a specific point in time and are based on interest rates and other assumptions at that date. As events change the assumptions underlying these estimates, the fair values of financial instruments will change.

 

Disclosure of fair values is not required for certain items such as lease financing, investments accounted for under the equity method of accounting, obligations of pension and other postretirement benefits, premises and equipment, other real estate, prepaid expenses, the value of long-term relationships with depositors (core deposit intangibles) and other customer relationships, other intangible assets and income tax assets and liabilities. Fair value estimates are presented for existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. In addition, the tax ramifications related to the realization of the unrealized gains and losses have not been considered in the estimates. Accordingly, the aggregate fair value amounts presented do not purport to represent and should not be considered representative of the underlying market or franchise value of First Guaranty.

 

Because the standard permits many alternative calculation techniques and because numerous assumptions have been used to estimate the fair values, reasonable comparison of the fair value information with other financial institutions' fair value information cannot necessarily be made. The methods and assumptions used to estimate the fair values of financial instruments are as follows:

 

Cash and due from banks, interest-bearing deposits with banks, federal funds sold and federal funds purchased.

 

These items are generally short-term and the carrying amounts reported in the consolidated balance sheets are a reasonable estimation of the fair values. Cash and due from bank for the purposes of the Consolidated Statements of Cash Flows include cash on hand, balances due from banks: which includes non-interest and interest-bearing accounts, and federal funds sold, all of which mature within ninety days.

 

Investment Securities.

 

Fair values are principally based on quoted market prices. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments or the use of discounted cash flow analyses.

 

Loans Held for Sale.

 

Fair values of mortgage loans held for sale are based on commitments on hand from investors or prevailing market prices. These loans are classified within level 3 of the fair value hierarchy.

 

Loans, net.

 

Market values are computed present values using net present value formulas. The present value is the sum of the present value of all projected cash flows on an item at a specified discount rate. The discount rate is set as an appropriate rate index, plus or minus an appropriate spread. These loans are classified within level 3 of the fair value hierarchy.

 

Loan individually evaluated for impairment.

Fair value is measured by either the fair value of the collateral if the loan is collateral dependent (Level 2 or Level 3), or the present value of expected future cash flows, discounted at the loan's effective interest rate (Level 3). Fair value of the collateral is determined by appraisals or by independent valuation.

Accrued interest receivable.

 

The carrying amount of accrued interest receivable approximates its fair value.

 

Deposits.

 

The fair value of customer deposits, excluding certificates of deposit, is the amount payable on demand. Market values of certificates of deposit are actually computed present values using net present value formulas. The present value is the sum of the present value of all projected cash flows on an item at a

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specified discount rate. The discount rate is set as an appropriate rate index, plus or minus an appropriate spread. Deposits are classified within level 3 of the fair value hierarchy.

 Accrued interest payable.

 

The carrying amount of accrued interest payable approximates its fair value.

 

Borrowings.

 

The carrying amount of federal funds purchased and other short-term borrowings approximate their fair values. The fair value of First Guaranty's long-term borrowings is computed using net present value formulas. The present value is the sum of the present value of all projected cash flows on an item at a specified discount rate. The discount rate is set as an appropriate rate index, plus or minus an appropriate spread. Borrowings are classified within level 3 of the fair value hierarchy.

 

The carrying amounts and estimated fair values of financial instruments at June 30, 2026 were as follows:

						Fair Value Measurements at June 30, 2026 Using
(in thousands)						Carrying Amount						Level 1						Level 2						Level 3						Total
Assets
Cash and due from banks						$	781,030					$	781,030					$	—					$	—					$	781,030
Federal funds sold						546						546						—						—						546
Securities, available for sale						890,758						49,507						825,490						15,761						890,758
Securities, held for maturity						323,203						—						265,294						—						265,294
Loans held for sale						—						—						—						—						—
Loans, net						1,730,911						—						—						1,728,208						1,728,208
Accrued interest receivable						11,875						—						—						11,875						11,875
Liabilities
Deposits						$	3,457,052					$	—					$	—					$	3,450,617					3,450,617
Repurchase agreements						7,227						—						—						7,201						7,201
Accrued interest payable						17,492						—						—						17,492						17,492
Long-term advances from Federal Home Loan Bank						135,000						—						—						135,194						135,194
Senior long-term debt						14,214						—						—						14,265						14,265
Junior subordinated debentures						29,835						—						—						30,000						30,000

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The carrying amounts and estimated fair values of financial instruments at December 31, 2025 were as follows:

												Fair Value Measurements at December 31, 2025 Using
(in thousands)						Carrying Amount						Level 1						Level 2						Level 3						Total
Assets
Cash and due from banks						$	845,150					$	845,150					$	—					$	—					$	845,150
Federal funds sold						551						551						—						—						551
Securities, available for sale						676,592						98,149						555,565						22,878						676,592
Securities, held for maturity						322,675						—						268,094						—						268,094
Loans, net						2,029,047						—						—						2,025,685						2,025,685
Accrued interest receivable						12,455						—						—						12,455						12,455
Liabilities
Deposits						$	3,632,877					$	—					$	—					$	3,643,821					3,643,821
Repurchase agreements						7,119						—						—						7,160						7,160
Accrued interest payable						17,637						—						—						17,637						17,637
Long-term advances from Federal Home Loan Bank						135,000						—						—						136,529						136,529
Senior long-term debt						14,203						—						—						14,266						14,266
Junior subordinated debentures						29,805						—						—						30,000						30,000

There is no material difference between the contract amount and the estimated fair value of off-balance sheet items that are primarily comprised of short-term unfunded loan commitments that are generally at market prices.

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On July 31, 2026, First Guaranty Bank completed the sale of the Bank's Texas operations, consisting of five branches and related deposits, loans and certain other assets, to Armstrong Bank, Muskogee, Oklahoma. The transaction is expected to consist of approximately $234 million in deposits and $88 million in loans.

As disclosed in the Current Report on Form 8-K filed with the SEC on August 7, 2026, the Bank has consented to the issuance of a Consent Order (the “Consent Order”) with the FDIC and the Louisiana Office of Financial Institutions (the “OFI”), which became effective as of August 7, 2026 (the “Effective Date”). The Bank consented to the issuance of the Consent Order without admitting or denying any charges of unsafe or unsound banking practices or violations of law. The Consent Order primarily resulted from the September 2, 2025, joint examination of the Bank conducted by the FDIC and OFI (the “2025 Exam”). In the period between that 2025 Exam and the issuance of the Consent Order, the Bank’s board of directors (the “Bank Board”) and management have taken a number of steps to address the issues identified in the Consent Order. A copy of the Consent Order is attached as an exhibit to this report, and the description of the contents of the Consent Order in this report is qualified in its entirety by reference to the full text of the Consent Order, which is incorporated herein by reference.

The Consent Order requires the Bank to undertake a number of actions and comply with certain restrictions relating primarily to board oversight, capital maintenance, classified assets, credit administration, commercial real estate (CRE) concentrations and monitoring, and dividends. These provisions are summarized in more detail below:

•The Bank Board must monitor and confirm the completion of actions taken by management to comply with the Consent Order and ensure that the Bank has sufficient policies, personnel, resources, and systems to implement and adhere to the Consent Order.

•The Bank must maintain a Tier 1 leverage capital ratio equal to or greater than 9% and a total risk-based capital ratio equal to or greater than 14%. If the Bank fails to maintain the required capital ratios, the Bank must submit a plan to the FDIC and OFI to increase Tier 1 Capital or take other measures to bring the Bank’s capital ratios to the levels required by the Consent Order.

•The Bank is restricted from extending additional credit to borrowers whose credit remains uncollected and was charged off or classified “loss” by the FDIC or OFI in the 2025 Exam, subject to certain limited exceptions.

•The Bank is restricted from extending additional credit to borrowers whose credit remains uncollected and was classified “doubtful” or “substandard” by the FDIC or OFI in the 2025 Exam, unless the Bank Board has signed a detailed written statement giving reasons why failure to extend such credit would be detrimental to the best interests of the Bank.

•Within 120 days after the Effective Date, the Bank must, to the extent it has not previously done so, eliminate from its books, by charge-off or collection (excluding through the proceeds of any loan from the Bank), all assets or portions of assets classified “loss” and 50% of the assets classified “doubtful” by the FDIC or OFI in the 2025 Exam.

•Within 60 days after the Effective Date, the Bank must submit a written plan to the FDIC and OFI to reduce the remaining assets classified “doubtful” and “substandard” in the 2025 Exam, including specified information for each classified asset with a balance of $2 million or more.

•The Bank must maintain satisfactory loan documentation practices and identify, track, correct and report to the Bank Board loan policy exceptions.

•The Bank Board must maintain a satisfactory loan review program commensurate with the Bank’s credit risk profile and commercial real estate concentration.

•Within 90 days after the Effective Date, the Bank Board must maintain and submit for approval a written plan for identifying, measuring, and monitoring the Bank’s CRE concentration.

•Within 90 days after the Effective Date, the Bank Board must implement measures to correct the weaknesses regarding CRE stress testing identified in the 2025 Exam.

•Within 90 days after the Effective Date, the Bank Board must implement measures to correct certain loan underwriting and credit administration weaknesses described in the 2025 Exam.

•So long as the Consent Order is in effect, the Bank may not pay any dividend to First Guaranty without the prior written consent of the FDIC and OFI.

•The Bank must furnish quarterly progress reports to the FDIC and OFI regarding compliance with the Consent Order.

The Consent Order will remain in effect until modified, terminated, suspended, or set aside by the FDIC and OFI.

Management and the Bank Board have been working to address the issues identified in the 2025 Exam, and will continue and expand these efforts to comply with the Consent Order. As of June 30, 2026, the Bank’s Tier 1 leverage ratio was 7.09% and its total risk-based capital ratio was 16.21%.

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The Bank has submitted a capital plan to the FDIC and OFI. Other than the achievement of the required Tier 1 leverage ratio, the Bank currently believes that it is in full compliance with the Consent Order as of the date hereof.

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First Guaranty is engaged in a single line of business as a financial institution, which provides a full range of banking, financial and trust services to state, county and local government entities and individuals and small and commercial businesses. First Guaranty has identified its President and Chief Executive Officer as the chief operating decision maker (“CODM”), who uses consolidated net income (see Consolidated Statements of Income) to determine how resources should be allocated and manage First Guaranty. First Guaranty’s operations constitute a single operating segment and therefore, a single reportable segment, because the CODM manages the business activities using information of First Guaranty as a whole. The accounting policies used to measure the profit and loss of the segment are the same as those described in the summary of significant accounting policies described in Note 1 included in Form 10-K for the year ended December 31, 2025. First Guaranty’s most significant reported source of income and expense are interest income and interest expense (see Consolidated Statements of Income). The remaining significant segment income and expenses are described in the Consolidated Statements of Income.

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