First Guaranty Bancshares Inc.

08/14/2026 | Press release | Distributed by Public on 08/14/2026 10:25

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2026
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
For the transition period from __________ to __________
Commission File Number: 001-37621
FIRST GUARANTY BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Louisiana 26-0513559
(State or other jurisdiction incorporation or organization) (I.R.S. Employer 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)
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
Depository Shares (each representing a 1/40th interest in a share of 6.75% Series A Fixed-Rate Non-Cumulative perpetual preferred stock) FGBIP The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filers," "accelerated filers," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒
Smaller reporting company ☒
Emerging growth company ☐
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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
As of August 13, 2026 the registrant had 16,539,094 shares of $1 par value common stock outstanding.
Table of Contents
Page
Part I.
Financial Information
4
Item 1.
Financial Statements (unaudited)
4
Consolidated Balance Sheets
4
Consolidated Statements of Income
5
Consolidated Statements of Comprehensive Income
6
Consolidated Statements of Shareholders' Equity
7
Consolidated Statements of Cash Flows
8
Notes to Unaudited Consolidated Financial Statements
10
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
36
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
59
Item 4.
Controls and Procedures
62
Part II.
Other Information
63
Item 1.
Legal Proceedings
63
Item 1A.
Risk Factors
63
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
63
Item 3.
Defaults Upon Senior Securities
63
Item 4.
Mine Safety Disclosures
63
Item 5.
Other Information
63
Item 6.
Exhibits
65
Signatures
66
-3-
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except share data) June 30, 2026 December 31, 2025
Assets
Cash and cash equivalents:
Cash and due from banks $ 781,030 $ 845,150
Federal funds sold 546 551
Cash and cash equivalents 781,576 845,701
Interest-earning time deposits with banks 250 250
Investment securities:
Available for sale, at fair value (cost of $901,862 and $674,139, respectively)
890,758 676,592
Held to maturity, at cost and net of allowance for credit losses of $150 (estimated fair value of $265,294 and $268,094, respectively)
323,203 322,675
Investment securities 1,213,961 999,267
Federal Home Loan Bank stock, at cost 10,433 10,206
Loans, net of unearned income 1,765,210 2,069,802
Less: allowance for credit losses 34,299 40,755
Net loans 1,730,911 2,029,047
Premises and equipment, net 72,656 59,585
Intangible assets, net 2,218 2,638
Other real estate, net 29,721 35,084
Accrued interest receivable 11,875 12,455
Other assets 41,409 84,088
Total Assets $ 3,895,010 $ 4,078,321
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing demand $ 415,296 $ 414,604
Interest-bearing demand 1,092,746 1,165,061
Savings 224,436 213,936
Time 1,724,574 1,839,276
Total deposits 3,457,052 3,632,877
Repurchase agreements 7,227 7,119
Accrued interest payable 17,492 17,637
Long-term advances from Federal Home Loan Bank 135,000 135,000
Senior long-term debt 14,214 14,203
Junior subordinated debentures 29,835 29,805
Other liabilities 6,840 15,462
Total Liabilities 3,667,660 3,852,103
Shareholders' Equity
Preferred stock, Series A - $1,000 par value - 100,000 shares authorized
Non-cumulative perpetual; 34,500 shares issued and outstanding
33,058 33,058
Common stock, $1 par value - 100,600,000 shares authorized; 16,539,094 and 15,793,433 shares issued and outstanding
16,539 15,793
Surplus 176,492 170,621
Retained earnings 18,742 14,055
Accumulated other comprehensive (loss) income (17,481) (7,309)
Total Shareholders' Equity 227,350 226,218
Total Liabilities and Shareholders' Equity $ 3,895,010 $ 4,078,321
See Notes to Consolidated Financial Statements
-4-
FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Three Months Ended
June 30, 		Six Months Ended
June 30,
(in thousands, except share data) 2026 2025 2026 2025
Interest Income:
Loans (including fees) $ 33,090 $ 41,013 $ 66,369 $ 83,982
Deposits with other banks 6,073 7,511 14,710 13,510
Securities (including FHLB stock) 12,118 5,797 22,477 11,292
Total Interest Income 51,281 54,321 103,556 108,784
Interest Expense:
Demand deposits 8,241 12,708 17,851 24,912
Savings deposits 963 1,336 1,909 2,598
Time deposits 17,395 15,196 35,994 31,086
Borrowings 2,404 2,841 4,835 5,725
Total Interest Expense 29,003 32,081 60,589 64,321
Net Interest Income 22,278 22,240 42,967 44,463
Less: Provision for credit losses 2,625 16,610 5,250 31,158
Net Interest Income after Provision for Credit Losses 19,653 5,630 37,717 13,305
Noninterest Income:
Service charges, commissions and fees 736 834 1,494 1,683
ATM and debit card fees 655 778 1,297 1,525
Net gains on securities - - 1 -
Net gains on sale of assets - - 44 4
Other 508 544 1,271 1,298
Total Noninterest Income 1,899 2,156 4,107 4,510
Noninterest Expense:
Salaries and employee benefits 7,029 7,843 14,381 16,284
Occupancy and equipment expense 2,361 2,605 4,825 5,245
Other 7,818 6,819 14,731 13,755
Total Noninterest Expense 17,208 17,267 33,937 35,284
Income (Loss) Before Income Taxes 4,344 (9,481) 7,887 (17,469)
Provision (benefit) for income taxes 913 (2,178) 1,713 (4,000)
Net Income (Loss) 3,431 (7,303) 6,174 (13,469)
Less: Preferred stock dividends 582 582 1,164 1,164
Net Income (Loss) Available to Common Shareholders $ 2,849 $ (7,885) $ 5,010 $ (14,633)
Per Common Share:
Earnings (Loss) $ 0.17 $ (0.61) $ 0.31 $ (1.15)
Cash dividends paid $ 0.01 $ 0.01 $ 0.02 $ 0.02
Weighted Average Common Shares Outstanding 16,326,060 12,910,785 16,062,514 12,709,905
See Notes to Consolidated Financial Statements
-5-
FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
Three Months Ended
June 30, 		Six Months Ended
June 30,
(in thousands) 2026 2025 2026 2025
Net Income (Loss) $ 3,431 $ (7,303) $ 6,174 $ (13,469)
Other comprehensive (loss) income:
Unrealized gains (losses) on securities:
Unrealized holding (losses) gains arising during the period (5,213) 1,228 (12,875) 3,365
Reclassification adjustments for losses (gains) included in net income - - (1) -
Change in unrealized (losses) gains on securities (5,213) 1,228 (12,876) 3,365
Tax impact 1,095 (257) 2,704 (706)
Other comprehensive (loss) income (4,118) 971 (10,172) 2,659
Comprehensive (Loss) Income $ (687) $ (6,332) $ (3,998) $ (10,810)
See Notes to Consolidated Financial Statements
-6-
FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
Preferred Stock $1,000 Par
Common Stock
$1 Par
Surplus Retained
Earnings 		Accumulated
Other Comprehensive
Income/(Loss) 		Total
(in thousands, except per share data)
Balance December 31, 2024 $ 33,058 $ 12,505 $ 149,389 $ 72,965 $ (12,868) $ 255,049
Net (loss) income - - - (6,166) - (6,166)
Common Stock issued in private placement, 186,787 shares
- 186 1,395 - - 1,581
Other comprehensive income - - - - 1,688 1,688
Preferred stock dividends - - - (582) - (582)
Cash dividends on common stock ($0.01 per share)
- - - (125) - (125)
Balance March 31, 2025 (unaudited) $ 33,058 $ 12,691 $ 150,784 $ 66,092 $ (11,180) $ 251,445
Net (loss) income - - - (7,303) - (7,303)
Common Stock issued in private placement, 358,680 shares
- 359 2,619 - - 2,978
Common Stock issued in subordinated debt conversion, 1,981,506 shares
- 1,982 13,018 - - 15,000
Common Stock issued as payment-in-kind, 88,482 shares
- 88 620 - - 708
Other comprehensive income - - - 971 971
Preferred stock dividends - - - (582) - (582)
Cash dividends on common stock ($0.01 per share)
- - - (129) - (129)
Balance June 30, 2025 (unaudited) $ 33,058 $ 15,120 $ 167,041 $ 58,078 $ (10,209) $ 263,088
Balance December 31, 2025 $ 33,058 $ 15,793 $ 170,621 $ 14,055 $ (7,309) $ 226,218
Net income - - - 2,743 - 2,743
Common Stock issued in private placement, 128,704 shares
- 129 871 - - 1,000
Common Stock issued as payment-in-kind, 105,907 shares
- 106 717 - - 823
Other comprehensive (loss) income - - - - (6,054) (6,054)
Preferred stock dividends - - - (582) - (582)
Cash dividends on common stock ($0.01 per share)
- - - (158) - (158)
Balance March 31, 2026 (unaudited) $ 33,058 $ 16,028 $ 172,209 $ 16,058 $ (13,363) $ 223,990
Net income - - - 3,431 - 3,431
Common Stock issued in private placement, 436,204 shares
- 436 3,564 - - 4,000
Common Stock issued as payment-in-kind, 74,846 shares
- 75 719 - - 794
Other comprehensive (loss) income - - - - (4,118) (4,118)
Preferred stock dividends - - - (582) - (582)
Cash dividends on common stock ($0.01 per share)
- - - (165) - (165)
Balance June 30, 2026 (unaudited) $ 33,058 $ 16,539 $ 176,492 $ 18,742 $ (17,481) $ 227,350
See Notes to Consolidated Financial Statements
-7-
FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Six Months Ended June 30,
(in thousands) 2026 2025
Cash Flows From Operating Activities
Net income (loss) $ 6,174 $ (13,469)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision for credit losses 5,250 31,158
Depreciation and amortization 1,997 2,189
Change in right of use asset 11,028 251
Amortization/Accretion of investments (2,107) (2,105)
(Gain) loss on sale/call of securities (1) -
Gain on sale of assets (44) (4)
Repossessed asset write downs, gains and losses on dispositions 127 24
Interest expense paid-in-kind 1,617 708
FHLB stock dividends (227) (250)
Change in operating lease liabilities (11,098) (233)
Change in other assets and liabilities, net 37,168 (31,197)
Net Cash Provided By (Used In) Operating Activities 49,884 (12,928)
Cash Flows From Investing Activities
Proceeds from maturities and calls of HTM securities - -
Proceeds from maturities, calls and sales of AFS securities 112,646 119,937
Funds invested in certificates of deposit - -
Funds invested in AFS securities (338,108) (231,470)
Funds invested in preferred securities - -
Proceeds from redemption of preferred securities - -
Funds invested in Federal Home Loan Bank stock - -
Proceeds from sale/redemption of Federal Home Loan Bank stock - -
Net decrease in loans 290,965 268,151
Purchase of premises and equipment (14,819) (481)
Proceeds from sales of premises and equipment 338 4
Proceeds from sales of other real estate owned 7,173 130
Net Cash Provided By Investing Activities 58,195 156,271
-8-
Cash Flows From Financing Activities
Net (decrease) increase in deposits (175,825) 5,078
Net increase in federal funds purchased and short-term borrowings 108 108
Proceeds from long-term borrowings - -
Repayment of long-term borrowings - (1,008)
Proceeds from subordinated debentures - -
Proceeds from issuance of common stock 5,000 4,559
Dividends paid on preferred stock (1,164) (1,164)
Dividends paid on common stock (323) (254)
Net Cash (Used In) Provided By Financing Activities (172,204) 7,319
Net (Decrease) Increase In Cash and Cash Equivalents (64,125) 150,662
Cash and Cash Equivalents at the Beginning of the Period 845,701 564,208
Cash and Cash Equivalents at the End of the Period $ 781,576 $ 714,870
Noncash Activities:
Acquisition of real estate in settlement of loans $ 1,921 $ 7,515
Common stock issued for payment-in-kind $ 1,617 $ 708
Common stock issued for debt conversion $ - $ 15,000
Cash Paid During The Period:
Interest on deposits and borrowed funds $ 60,734 $ 65,260
Federal income taxes $ (1,600) $ 2,500
State income taxes $ - $ -
See Notes to the Consolidated Financial Statements.
-9-
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
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.
-10-
Note 2. Recent Accounting Pronouncements
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.
-11-
Note 3. Securities
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.
-12-
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.
-13-
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
-14-
Note 4. Loans
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.
-15-
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.
-16-
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
-17-
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
-18-
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
-19-
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
-20-
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
-21-
Note 5. Allowance for Credit Losses on Loans
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.
-22-
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.
-23-
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.
-24-
Note 6. Goodwill and Other Intangible Assets
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.
Note 7. Other Real Estate (ORE)
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.
Loans secured by one-to-four family residential properties in the process of foreclosure totaled $0.3 million as of June 30, 2026.
Note 8. Borrowings
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.
-25-
Note 9. Commitments and Contingencies
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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Note 10. Leases
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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Note 11. Fair Value Measurements
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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Note 12. Financial Instruments
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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Note 13. Subsequent Events
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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Note 14. Segment Reporting
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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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of First Guaranty's financial condition and results of operations is intended to highlight the significant factors affecting First Guaranty's financial condition and results of operations presented in the consolidated financial statements included in this Form 10-Q. This discussion is designed to provide readers with a more comprehensive view of the operating results and financial position than would be obtained from reading the consolidated financial statements alone. Reference should be made to those statements for an understanding of the following review and analysis. The financial data at June 30, 2026 and for the three and six months ended June 30, 2026 and 2025 have been derived from unaudited consolidated financial statements and include, in the opinion of management, all adjustments (consisting of normal recurring accruals and provisions) necessary to present fairly First Guaranty's financial position and results of operations for such periods.
Special Note Regarding Forward-Looking Statements
Congress passed the Private Securities Litigation Act of 1995 in an effort to encourage corporations to provide information about a company's anticipated future financial performance. This act provides a safe harbor for such disclosure, which protects us from unwarranted litigation, if actual results are different from management expectations. This discussion and analysis contains forward-looking statements and reflects management's current views and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "may," "should," "expect," "anticipate," "intend," "plan," "continue," "believe," "seek," "estimate" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to a number of factors and uncertainties, including, our ability to comply with the requirements imposed by the regulatory consent order; changes in general economic conditions, either nationally or in our market areas, that are worse than expected; competition among depository and other financial institutions; inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; adverse changes in the securities markets; changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; our ability to enter new markets successfully and capitalize on growth opportunities; our ability to successfully integrate acquired entities; changes in consumer spending, borrowing and savings habits; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board; changes in our organization, compensation and benefit plans; changes in our financial condition or results of operations that reduce capital available to pay dividends; increases in our provision for credit losses and changes in the financial condition or future prospects of issuers of securities that we own, which could cause our actual results and experience to differ from the anticipated results and expectations, expressed in such forward-looking statements. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
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Second Quarter and Six Months Ended June 30, 2026, Financial Overview
First Guaranty Bancshares is a Louisiana corporation and a financial holding company headquartered in Hammond, Louisiana. Our wholly-owned subsidiary, First Guaranty Bank, a Louisiana-chartered commercial bank, provides personalized commercial banking services primarily to Louisiana and Texas customers through 30 banking facilities primarily located in the MSAs of Hammond, Baton Rouge, Lafayette, Shreveport-Bossier City, and Alexandria, Louisiana and Dallas-Fort Worth-Arlington, Waco, Texas and Mideast markets in Kentucky and West Virginia. As announced in a Current Report on Form 8-K filed on August 6, 2026, First Guaranty 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 sale was completed on July 31, 2026. We emphasize personal relationships and localized decision making to ensure that products and services are matched to customer needs. We compete for business principally on the basis of personal service to customers, customer access to officers and directors and competitive interest rates and fees.
Financial highlights for the second quarter and six months ended June 30, 2026 are as follows:
•Net income (loss) for the three months ended June 30, 2026 and 2025 was $3.4 million and $(7.3) million, respectively. Net income (loss) for the six months ended June 30, 2026 and 2025 was $6.2 million and $(13.5) million, respectively, an increase of $19.6 million.
•Total assets decreased $183.3 million and were $3.9 billion at June 30, 2026 compared to $4.1 billion at December 31, 2025. Total loans at June 30, 2026 were $1.8 billion, a decrease of $304.6 million, or 14.7%, compared with December 31, 2025. Total deposits were $3.5 billion at June 30, 2026, a decrease of $175.8 million, or 4.8%, compared with December 31, 2025. Retained earnings were $18.7 million at June 30, 2026, an increase of $4.7 million compared to $14.1 million at December 31, 2025. Shareholders' equity was $227.4 million and $226.2 million at June 30, 2026 and December 31, 2025, respectively.
•Earnings (loss) per common share were $0.17 and $(0.61) for the three months ended June 30, 2026 and 2025, respectively. Total weighted average shares outstanding were 16,326,060 and 12,910,785 for the three months ended June 30, 2026 and 2025, respectively. Earnings (loss) per common share were $0.31 and $(1.15) for the six months ended June 30, 2026 and 2025, respectively. Total weighted average shares outstanding were 16,062,514 and 12,709,905 for the six months ended June 30, 2026 and 2025, respectively.
•The allowance for credit losses was 1.94% of total loans at June 30, 2026 compared to 1.97% at December 31, 2025.
•Net interest income for the three months ended June 30, 2026 was $22.3 million compared to $22.2 million for the three months ended June 30, 2025. Net interest income for the six months ended June 30, 2026 was $43.0 million compared to $44.5 million for the six months ended June 30, 2025.
•The provision for credit losses for the three months ended June 30, 2026 was $2.6 million compared to $16.6 million for the three months ended June 30, 2025. The provision for credit losses for the six months ended June 30, 2026 was $5.3 million compared to $31.2 million for the six months ended June 30, 2025.
•Charge-offs were $7.7 million during the three months ended June 30, 2026 and $1.1 million during the same period in 2025. Recoveries totaled $0.9 million during the three months ended June 30, 2026 and $0.2 million during the same period in 2025. Charge-offs were $13.2 million during the six months ended June 30, 2026 and $8.0 million during the same period in 2025. Recoveries totaled $1.5 million during the six months ended June 30, 2026 and $0.4 million during the same period in 2025.
•First Guaranty had $29.7 million of other real estate owned as of June 30, 2026 compared to $35.1 million at December 31, 2025.
•The net interest margin for the three months ended June 30, 2026 was 2.37% which was an increase of 3 basis points from the net interest margin of 2.34% for the same period in 2025. The net interest margin for the six months ended June 30, 2026 was 2.22% which was a decrease of 13 basis points from the net interest margin of 2.35% for the same period in 2025. Loans as a percentage of average interest earning assets decreased to 49.5% at June 30, 2026 compared to 66.5% at June 30, 2025.
•Investment securities totaled $1.2 billion at June 30, 2026, an increase of $214.7 million when compared to $999.3 million at December 31, 2025. At June 30, 2026, available for sale securities, at fair value, totaled $890.8 million, an increase of $214.2 million when compared to $676.6 million at December 31, 2025. At June 30, 2026, held to maturity securities, at amortized cost and net of the allowance for credit losses totaled $323.2 million, an increase of $0.5 million when compared to $322.7 million at December 31, 2025. The allowance for credit losses for HTM securities was $0.2 million at June 30, 2026 and December 31, 2025.
•Total loans net of unearned income were $1.8 billion at June 30, 2026, a net decrease of $304.6 million from December 31, 2025. Total loans net of unearned income are reduced by the allowance for credit losses which totaled $34.3 million at June 30, 2026 and $40.8 million at December 31, 2025, respectively.
•Nonaccrual loans decreased $19.0 million to $40.6 million at June 30, 2026 compared to $59.6 million at December 31, 2025.
•At June 30, 2026, the largest 10 non-performing loan relationships comprise 78% of total non-performing assets. Additional details on the non-performing relationships are as follows:
•A $23.3 million loan relationship secured by an independent living center located in Louisiana; the loan was transferred to other real estate owned in the fourth quarter of 2025.
•A $10.8 million loan relationship secured by an assisted living center located in Texas; the loan was placed on nonaccrual in the third quarter of 2025.
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•A $7.7 million loan relationship secured by commercial land development located in Texas; the loan was placed on nonaccrual in the second quarter of 2026.
•A $5.2 million loan relationship was placed on nonaccrual during the second quarter of 2025. The loan is secured by multifamily apartment complexes located in Louisiana. This loan relationship had a specific reserve of $0.8 million as of June 30, 2026.
•A $2.4 million guaranteed loan secured by livestock and farmland located in Louisiana; the loan was placed in nonaccrual in the fourth quarter of 2024.
•A $1.5 million loan secured by a hotel in Louisiana; the loan was placed on nonaccrual during the second quarter of 2026. This loan relationship had a specific reserve of $0.6 million as of June 30, 2026.
•A $1.2 million loan secured by multiple office buildings located in West Virginia; the loan was placed on nonaccrual during the second quarter of 2025.
•A $1.0 million loan secured by commercial real estate in Texas; the loan was placed on nonaccrual during the third quarter of 2024.
•A $0.8 million loan secured by a retail strip center located in Louisiana; the loan was placed on nonaccrual during the fourth quarter of 2025.
•A $0.8 million loan secured by a mobile home park located in New Mexico; the loan was transferred to other real estate owned in the second quarter of 2026.
•First Guaranty charged off $7.7 million in loan balances during the second quarter of 2026. The details of the $7.7 million in charged-off loans were as follows:
•First Guaranty charged off $5.7 million on a commercial lease relationship during the second quarter of 2026. This relationship had no remaining principal balance as of June 30, 2026. This lease was part of a relationship with an outstanding balance of $49.1 million prior to fourth quarter of 2025 charge-offs, which reduced the balance to $5.7 million.
•First Guaranty charged off $0.8 million on a commercial lease relationship during the second quarter of 2026. This relationship had no remaining principal balance as of June 30, 2026.
•First Guaranty charged off $0.7 million on a non-farm non-residential loan relationship during the second quarter of 2026. This relationship had a remaining principal balance of $0.4 million as of June 30, 2026.
•Smaller loans and overdrawn deposit accounts comprised the remaining $0.5 million of charge-offs for the second quarter of 2026.
•Special mention loan relationships totaled $186.6 million as of June 30, 2026, a decline of $142.9 million compared to December 31, 2025.
•Substandard loan relationships totaled $276.6 million as of June 30, 2026, a decline of $70.9 million compared to December 31, 2025.
•There were no doubtful loan relationships as of June 30, 2026, a decline of $9.4 million compared to December 31, 2025.
•Noninterest expense totaled $17.2 million for the second quarter 2026, $16.7 million for the first quarter 2026, $16.8 million for the fourth quarter of 2025, $30.2 million for the third quarter of 2025 (including $12.9 million of goodwill impairment), and $17.3 million for the second quarter of 2025. Full time equivalent employees totaled 333 at June 30, 2026 compared to 360 at June 30, 2025.
•Return on average assets for the three months ended June 30, 2026 and 2025 was 0.35% and (0.75)%, respectively. Return on average assets for the six months ended June 30, 2026 and 2025 was 0.31% and (0.69)%, respectively. Return on average common equity for the three months ended June 30, 2026 and 2025 was 5.95% and (14.33)%, respectively. Return on average common equity for the six months ended June 30, 2026 and 2025 was 5.24% and (13.31)% respectively. Return on average assets is calculated by dividing annualized net income by average assets. Return on average common equity is calculated by dividing annualized net income by average common equity.
•Book value per common share was $11.75 as of June 30, 2026 compared to $12.23 as of December 31, 2025. The decrease was due primarily to the changes in accumulated other comprehensive income ("AOCI") and recent issuance of new shares. AOCI is comprised of unrealized gains and losses on available for sale securities, including unrealized losses on available for sale securities at the time of transfer to held to maturity.
•First Guaranty's Board of Directors declared cash dividends of $0.01 per common share in the second quarter of 2026 and 2025. First Guaranty has paid 132 consecutive quarterly dividends as of June 30, 2026.
•First Guaranty paid preferred stock dividends of $1.2 million during the first six months of 2026 and 2025.
Recent Developments
•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.
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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%. 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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Financial Condition
Changes in Financial Condition from December 31, 2025 to June 30, 2026
Assets
Total assets at June 30, 2026 were $3.9 billion, a decrease of $183.3 million from December 31, 2025. Assets decreased primarily due to a decrease in net loans of $298.1 million and cash and cash equivalents of $64.1 million partially offset by an increase in investment securities of $214.7 million at June 30, 2026 compared to December 31, 2025.
Loans
Net loans decreased $298.1 million, or 14.7%, to $1.7 billion at June 30, 2026 from December 31, 2025. First Guaranty adopted a change in its business plan in July 2024 that focused on reducing risk in the balance sheet, including risk associated with the loan portfolio. As part of this strategy, First Guaranty has reduced loan originations, charged-off loan balances and conducted select loan sales, which have each contributed to a decline in loan balances. Non-farm non-residential loan balances decreased $158.2 million due to paydowns on the existing portfolio. Multifamily loans decreased $58.5 million primarily due to paydowns. Construction and land development loans decreased $50.5 million principally due to the conversion of existing loans to permanent financing. Commercial lease loan balances decreased $19.0 million primarily due to paydowns on the existing lease portfolio and due to the charge-off of a remaining $5.7 million balance on one lease loan relationship. First Guaranty's commercial lease portfolio generally has higher yields than commercial real estate loans but shorter average lives. Consumer and other loans decreased $11.8 million primarily due to paydowns. Commercial and industrial loans decreased $6.1 million primarily due to the sale of loans, paydowns and charge-offs. One-to-four family residential loans decreased $8.4 million primarily due to charge-offs and paydowns. Farmland loans decreased $1.3 million primarily due to seasonal activity. Agricultural loans increased $7.6 million due to seasonal activity. First Guaranty had approximately 2.1% of funded and 1.9% of unfunded commitments in our loan portfolio to businesses engaged in support or service activities for oil and gas operations. First Guaranty's hotel and hospitality portfolio totaled $121.0 million at June 30, 2026. First Guaranty had $101.0 million in loans related to our Texas markets at June 30, 2026 compared to $192.6 million at December 31, 2025. As noted above, on July 31, 2026, the Bank completed the sale of its Texas operations, including approximately $88.4 million in Texas loans as of such date. First Guaranty had $341.4 million in loans related to our Mideast markets in Kentucky and West Virginia at June 30, 2026 compared to $323.1 million at December 31, 2025. Syndicated loans at June 30, 2026 were $51.4 million, of which $22.1 million were shared national credits. Syndicated loans increased $1.1 million from $50.3 million at December 31, 2025. Syndicated loans were subsequently reduced by $23.2 million by a loan payoff in the third quarter of 2026.
As of June 30, 2026, 80.6% of our loan portfolio was secured by real estate. The largest portion of our loan portfolio, at 44.7% as of June 30, 2026, was non-farm non-residential loans secured by real estate. Approximately 56.8% of the loan portfolio was based on a floating rate tied to the prime rate, Secured Overnight Financing Rate ("SOFR"), or Treasury rates as of June 30, 2026. This amount includes loans that convert to floating rates following an initial fixed rate period, which typically ranges from one, three, or five year periods. 36.6% of the loan portfolio is scheduled to mature within five years from June 30, 2026.
Commercial real estate ("CRE") has received increased regulatory scrutiny in recent quarters due to valuation concerns associated with the increase in market interest rates and the impact of the COVID-19 pandemic. First Guaranty has utilized enhanced risk management practices for CRE concentration analysis for several years. First Guaranty Bank's credit department conducts an annual stress test for CRE related loans that is presented to the Bank's board of directors. The stress test analyzes the impact of changes in interest rates and cash flow on loan customers with credit exposures of $2.5 million or greater. First Guaranty generally requires personal guaranties on CRE loans. First Guaranty generally approves CRE loans with loan-to-values of 80% or less. First Guaranty also generally requires for construction related CRE loans that the borrower provides their equity contribution upfront before loan funds are advanced. First Guaranty modified its business strategy in 2024 to reduce exposure to commercial real estate related loans, particularly loans secured by non-owner occupied properties and construction loans for commercial real estate. First Guaranty continued this strategy in 2026.
First Guaranty has diversified its CRE portfolio across both industries and geographic location. The following is a summary of the largest CRE related loans associated with hotel and motels, office properties, apartment complexes, healthcare related properties, and properties under construction as of June 30, 2026. First Guaranty generally does not finance multi-story office buildings in major metropolitan areas. The largest CRE loan secured by a hotel or motel totaled $19.1 million. The property is a flagged hotel located in Texas. The largest CRE loan secured by an office related property totaled $20.7 million and is located in West Virginia. The largest CRE loan secured by an apartment complex totaled $22.9 million and is located in Florida. The largest healthcare related loan is a $33.5 million property secured by an assisted living center located in Alabama. The largest CRE loan under construction totaled $14.6 million for a RV resort park and is secured by a property located in Louisiana.
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As of June 30, 2026, the Bank's total exposure (including outstanding loans and commitments) to its ten largest borrower relationships represented approximately 21% of the Bank's loan portfolio. The majority of these relationships are real estate secured. All of the loans below were on accrual status as of June 30, 2026. Below is a summary of those ten largest lending relationships:
Top 10 Large Loan Relationships
(in thousands)
Relationship Description Balance Risk Rating No. Loans Origination Year Location
1 Non-Owner Occupied Commercial Real Estate $ 78,336 Pass 6 2021-2023 West Virginia & Pennsylvania
2 Loan Note Purchaser 46,235 Pass 2 2026 West Virginia
3 Medical Facilities 45,302 Substandard 10 2008-2022 Louisiana
4 Apartment Complex / Hotel Property 37,430 Pass / Special Mention 2 2023 Florida
5 Assisted Living Facility 33,467 Special Mention 1 2022 Alabama
6 Owner Occupied Office Building 30,705 Substandard 2 2019-2023 Utah
7 Manufacturing Company 30,270 Substandard 8 2015-2024 Louisiana
8 Casino 23,882 Pass 10 2020-2023 Louisiana
9 Medical Facilities* 23,176 Substandard 2 2020-2021 Arkansas
10 Oil & Gas Company 22,129 Pass 7 2020-2022 West Virginia
$ 370,932
*Subsequently paid off in the third quarter of 2026.
The decrease in classified assets at June 30, 2026 as compared to December 31, 2025 was due to a $70.9 million decrease in substandard loans and a $9.4 million decrease in doubtful loans. The decrease in substandard loans was primarily the result of the payoff of a $19.2 million non-farm non-residential loan relationship, a $15.1 million construction and land development loan relationship, a $14.5 million non-farm non-residential loan relationship, and a $14.3 million commercial loan relationship. The decrease in doubtful loans was driven by the sale of a $3.7 million commercial and industrial loan relationship. The Bank recorded as $1.8 million charge-off as the result of the sale. Special mention loans decreased by $142.9 million in 2026. The decrease in special mention loans was primarily the result of the upgrade of a $22.9 million multifamily loan and $15.9 million non-farm non-residential loan to pass status and the payoff of a $40.0 million multifamily loan and a $20.1 million non-farm non-residential loan relationship.
Top 10 Substandard Relationships
June 30, 2026
(in thousands) Balance Allocated Reserve Origination Year(s) Location
Relationship Description
1 Medical Facilities $ 45,302 $ - 2008-2022 Louisiana
2 Owner Occupied Office Building 30,705 - 2023 Utah
3 Manufacturing Company 30,270 - 2015-2024 Louisiana
4 Medical Facilities* 23,176 - 2020-2021 Arkansas
5 Commercial Retail Shopping Center 13,204 - 2020-2022 Oklahoma
6 Food Processor 12,755 - 2022-2024 Ohio
7 Gas Station & Convenience Store 11,420 - 2023 Louisiana
8 Assisted Living Facility** 10,789 - 2023-2025 Texas
9 Commercial Land Development 7,723 73 2023 Texas
10 Timber & Logging 7,006 - 2022-2024 Louisiana
$ 192,350 $ 73
*Subsequently paid off in the third quarter of 2026.
**Loan is on nonaccrual status
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Top 10 Special Mention Relationships
June 30, 2026
Balance Allocated Reserve Origination Year(s) Location
Relationship Description
1 Assisted Living Facility $ 33,467 - 2022 Alabama
2 Construction Business 20,607 - 2022-2024 Louisiana & Texas
3 Assisted Living Facility 16,602 - 2017 Louisiana
4 Recreational Park 16,465 - 2020 Louisiana
5 Land Subdivision 16,152 - 2022 Texas
6 Warehouse Facility 15,750 - 2011 Louisiana & Tennessee
7 Hotel Property 14,518 - 2023 Florida
8 Multipurpose Commercial Real Estate Building 8,884 - 2023 Louisiana
9 Multipurpose Commercial Real Estate Building 7,317 - 2021 Texas
10 Hotel Property 4,592 - 2023 Georgia
$ 154,354 $ -
Net loans are reduced by the allowance for credit losses which totaled $34.3 million at June 30, 2026 and $40.8 million at December 31, 2025. Loan charge-offs were $13.2 million during the first six months of 2026 and $8.0 million during the same period in 2025. Recoveries totaled $1.5 million during the first six months of 2026 and $0.4 million during the same period in 2025. The provision for credit losses totaled $5.3 million for the first six months of 2026 and $31.2 million for the same period in 2025. See Note 4 of the Notes to Consolidated Financial Statements for more information on loans and Note 5 for more information on the allowance for credit losses.
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Investment Securities
Investment securities net of the allowance for credit losses at June 30, 2026 totaled $1.2 billion, an increase of $214.7 million compared to $999.3 million at December 31, 2025. The portfolio consists of both available for sale (AFS) and held to maturity securities (HTM). The securities designated as held to maturity are agency and corporate debt securities that are part of First Guaranty's investment strategy and public funds collateralization program. We purchase securities for our investment portfolio to provide a source of liquidity, to provide an appropriate return on funds invested, to manage interest rate risk and meet pledging requirements for public funds and borrowings.
The securities portfolio consisted principally of U.S. Government and Government agency securities, agency mortgage-backed securities, collateralized mortgage obligations ("CMOs"), corporate debt securities and municipal bonds. U.S. government agencies consist of FHLB, FFCB, Freddie Mac and Federal National Mortgage Association ("Fannie Mae") obligations. Mortgage-backed securities that we purchase are issued by Freddie Mac and Fannie Mae. CMOs are also issued by Freddie Mac and Fannie Mae and are structured to provide varying repayment profiles. Management monitors the securities portfolio for both credit and interest rate risk. We generally limit the purchase of corporate securities to individual issuers to manage concentration and credit risk. Corporate securities generally have a maturity of 10 years or less. U.S. Government securities consist of U.S. Treasury bills that have maturities of less than 30 days. Government agency securities generally have maturities of 15 years or less. Agency mortgage-backed securities have stated final maturities of 15 to 20 years, while CMOs generally have stated final maturities ranging from 15 to 30 years, although actual maturities may vary based on prepayment activity.
Our available for sale securities portfolio totaled $890.8 million at June 30, 2026, an increase of $214.2 million, or 31.7%, compared to $676.6 million at December 31, 2025. The increase was primarily due to the purchase of collateralized mortgage obligations and mortgage-backed securities.
Our held to maturity securities portfolio net of the allowance for credit losses totaled $323.2 million at June 30, 2026, an increase of $0.5 million, or 0.2%, compared to $322.7 million at December 31, 2025. The increase in carrying value was primarily attributable to the continued accretion of the fair value discount that was recognized in amortized cost at the time the securities were designated as held to maturity in 2021.
At June 30, 2026, $50.7 million, or 4.2%, of the securities portfolio was scheduled to mature in less than one year. $75.5 million, or 6.2%, of the securities portfolio, not including collateralized mortgage obligations and mortgage-backed securities, were scheduled to mature between one and five years. The majority of these securities were corporate bonds. $148.3 million, or 12.2%, of the securities portfolio, not including collateralized mortgage obligations and mortgage-backed securities, were scheduled to mature between five and ten years. Securities, not including collateralized mortgage obligations and mortgage-backed securities, with contractual maturity dates over 10 years totaled $118.4 million, or 9.8%, of the total securities portfolio at June 30, 2026. The average maturity of the securities portfolio is affected by call options that may be exercised by the issuer of the securities and are influenced by market interest rates. Prepayments of mortgages that collateralize mortgage-backed securities also affect the maturity of the securities portfolio. Based on internal forecasts as of June 30, 2026, management believes that the securities portfolio has a forecasted weighted average life of approximately 5.45 years based on the current interest rate environment. The portfolio had an estimated effective duration of 4.23 years at June 30, 2026.
There were no credit related impairment of available for sale securities during the six months ended June 30, 2026 or 2025. The allowance for credit losses for held to maturity securities was $0.2 million at June 30, 2026 and December 31, 2025.
Nonperforming Assets
Nonperforming assets consist of nonperforming loans and other real estate owned. Nonperforming loans are those on which the accrual of interest has stopped or loans which are contractually 90 days past due on which interest continues to accrue. Loans are ordinarily placed on nonaccrual status when principal and interest is delinquent for 90 days or more. However, management may elect to continue the accrual when the asset is well secured and in the process of collection. It is our policy to discontinue the accrual of interest income on any loan for which we have reasonable doubt as to the payment of interest or principal. When a loan is placed on nonaccrual status, unpaid interest credited to income is reversed. Nonaccrual loans are returned to accrual status when the financial position of the borrower indicates there is no longer any reasonable doubt as to the payment of principal or interest and a reasonable payment performance period is observed (generally considered six months or longer). Other real estate owned consists of property acquired through formal foreclosure, in-substance foreclosure or by deed in lieu of foreclosure.
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The table below sets forth the amounts and categories of our nonperforming assets at the dates indicated.
(in thousands) June 30, 2026 December 31, 2025
Nonaccrual loans:
Real Estate:
Construction and land development $ 18,823 $ 9,281
Farmland 2,595 2,671
1- 4 family 7,593 9,768
Multifamily 2,215 2,278
Non-farm non-residential 7,064 24,347
Total Real Estate 38,290 48,345
Non-Real Estate:
Agricultural 1,436 2,172
Commercial and industrial 841 2,266
Commercial leases - 6,640
Consumer and other 27 158
Total Non-Real Estate 2,304 11,236
Total nonaccrual loans 40,594 59,581
Loans 90 days and greater delinquent & accruing:
Real Estate:
Construction and land development - -
Farmland - -
1- 4 family - 763
Multifamily - -
Non-farm non-residential - 33
Total Real Estate - 796
Non-Real Estate:
Agricultural - -
Commercial and industrial - -
Commercial leases - -
Consumer and other - -
Total Non-Real Estate - -
Total loans 90 days and greater delinquent & accruing - 796
Total nonperforming loans 40,594 60,377
Real Estate Owned:
Construction and land development 1,161 8,161
Farmland - -
1- 4 family 897 351
Multifamily - -
Non-farm non-residential 27,663 26,572
Total Real Estate Owned 29,721 35,084
Total nonperforming assets $ 70,315 $ 95,461
Nonperforming assets to total loans 3.98 % 4.61 %
Nonperforming assets to total assets 1.81 % 2.34 %
Nonperforming loans to total loans 2.30 % 2.92 %
Nonaccrual loans to total loans 2.30 % 2.88 %
Allowance for credit losses to nonaccrual loans 84.49 % 68.40 %
Net loan charge-offs to average loans 1.22 % 3.17 %
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Top 10 Non-Performing Assets
June 30, 2026
Balance Allocated Reserve Origination Year Location
Asset Description
1 Independent Living Center OREO $ 23,301 $ - 2021 Louisiana
2 Assisted Living Center 10,789 - 2023-2025 Texas
3 Commercial Land Development 7,723 73 2023 Texas
4 Apartment Complex 5,181 794 2023 Louisiana
5 Farmland 2,391 - 2020 Louisiana
6 Hotel 1,522 550 2016 Louisiana
7 Commercial Building 1,175 - 2023 West Virginia
8 Commercial Real Estate 965 - 2017 Texas
9 Retail Strip Center 833 5 2016 Louisiana
10 Mobile Home Park OREO 831 - 2020 New Mexico
$ 54,711 $ 1,422
At June 30, 2026, nonperforming assets totaled $70.3 million, or 1.81% of total assets, compared to $95.5 million, or 2.34%, of total assets at December 31, 2025, which represented a decrease of $25.1 million, or 26.3%. The decrease in nonperforming assets occurred primarily due to a decrease in nonaccrual loans, other real estate, and in loans 90 days greater delinquent. Nonperforming loans included loans previously classified as purchase credit deteriorated following the adoption of CECL.
Nonaccrual loans decreased from $59.6 million at December 31, 2025 to $40.6 million at June 30, 2026. Nonaccrual loans included $3.6 million in loans with a government guarantee. These are structured as net loss guarantees in which up to 90% of loss exposure is covered.
At June 30, 2026, there were no loans 90 days or greater delinquent and still accruing, compared to $0.8 million at December 31, 2025.
Other real estate owned totaled $29.7 million at June 30, 2026, a decrease of $5.4 million compared to $35.1 million at December 31, 2025. Other real estate owned decreased primarily due to the sale of $7.4 million of other real estate owned comprised of a land development project in January 2026.
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Allowance for Credit Losses
First Guaranty adopted FASB ASC Topic 326 "Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments" Update No. 2016-13 ("ASU 2016-13"). ASU 2016-13 on January 1, 2023. ASU 2016-13, referred to as the Current Expected Credit Loss ("CECL") standard, requires financial assets measured on an amortized cost basis, including loans and held-to-maturity debt securities, to be presented at an amount net of an allowance for credit losses, which reflects expected losses for the full life of the financial asset. Unfunded lending commitments are also within the scope of this topic. Under prior GAAP losses were not recognized until the occurrence of the loss was probable.
The allowance for credit losses on loans is maintained to absorb potential losses in the loan portfolio. The allowance is increased by the provision for loan losses, offset by recoveries of previously charged-off loans and is decreased by loan charge-offs. The provision is a charge to current expense to provide for current expected loan losses and to maintain the allowance commensurate with management's evaluation of the risks inherent in the loan portfolio. Various factors are taken into consideration when determining the amount of the provision and the adequacy of the allowance. These factors include but are not limited to:
•past due and nonperforming assets;
•specific internal analysis of loans requiring special attention;
•the current level of regulatory classified and criticized assets and the associated risk factors with each;
•changes in underwriting standards or lending procedures and policies;
•charge-off and recovery practices;
•national and local economic and business conditions;
•nature and volume of loans;
•overall portfolio quality;
•adequacy of loan collateral;
•quality of loan review system and degree of oversight by our board of directors;
•competition and legal and regulatory requirements on borrowers;
•examinations of the loan portfolio by federal and state regulatory agencies and examinations; and
•review by our internal loan review department and independent accountants.
The data collected from all sources in determining the adequacy of the allowance is evaluated on a regular basis by management with regard to current national and local economic trends, prior loss history, underlying collateral values, credit concentrations and industry risks. An estimate of potential loss on specific loans is developed in conjunction with an overall risk evaluation of the total loan portfolio. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as new information becomes available.
The allowance consists of specific, general, and unallocated components. The specific component relates to loans that are classified as doubtful, substandard, or collateral dependent. For such loans that are also classified as collateral dependent, an allowance is established when the collateral value is lower than the carrying value of that loan. The general component covers non-classified loans and special mention loans and is based on historical loss experience for the past three years adjusted for qualitative factors described above. An unallocated component is maintained to cover uncertainties that could affect the estimate of probable losses.
The balance in the allowance for credit losses is principally influenced by the provision for loan losses, recoveries, and by net loan loss experience. Additions to the allowance are charged to the provision for credit losses. Losses are charged to the allowance as incurred and recoveries on losses previously charged to the allowance are credited to the allowance at the time recovery is collected.
The allowance for credit losses on loans was $34.3 million, or 1.94% of total loans, and 84.5% of nonperforming loans at June 30, 2026.
A provision for credit losses of $5.3 million was made during the six months ended June 30, 2026 and $31.2 million for the same period in 2025. The provisions made during the six months ended June 30, 2025 included a $0.5 million negative provision for credit losses related to unfunded commitments. First Guaranty's unfunded commitments declined during the first six months of 2025 which resulted in a reduced liability. The provisions made were taken to provide for current credit losses and to maintain the allowance proportionate to risks inherent in the loan portfolio.
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The loan portfolio factors in the first six months of 2026 that primarily affected the allocation of the allowance included the following:
•Construction and land development loans decreased $50.5 million during the first six months of 2026. The allowance increase was due to changes in the qualitative analysis of the portfolio.
•One-to-four family residential loans decreased $8.4 million during the first six months of 2026. The allowance decrease related to this portfolio was due primarily to charge-offs of the portfolio.
•Multifamily loans decreased $58.5 million during the first six months of 2026. The allowance increase related to this portfolio was due primarily to a $1.8 million increase in the allowance for loans individually evaluated.
•Non-farm non-residential loans decreased by $158.2 million during the first six months of 2026. The allowance decrease related to this portfolio was due primarily to charge-offs of the portfolio.
•Commercial and industrial loans decreased $6.1 million during the first six months of 2026. The allowance decrease related to this portfolio was due primarily to charge-offs and changes in the qualitative analysis of the portfolio.
•Commercial leases decreased $19.0 million during the first six months of 2026. The allowance increase was due to changes in the qualitative analysis of the portfolio.
•Consumer and other loans decreased $11.8 million during the first six months of 2026. The decrease in the related allowance balance was due primarily to charge-offs and changes in the qualitative analysis of the portfolio.
Other information related to the allowance for credit losses is as follows:
(in thousands) Six Months Ended
June 30, 2026 		Six Months Ended
June 30, 2025
Loans:
Average outstanding balance $ 1,936,196 $ 2,541,990
Balance at end of period $ 1,765,210 $ 2,410,505
Allowance for Credit Losses:
Balance at beginning of year $ 40,755 $ 34,811
Charge-offs (13,184) (8,017)
Recoveries 1,478 409
Provision 5,250 31,668
Balance at end of period $ 34,299 $ 58,871
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Deposits
Managing the mix and pricing the maturities of deposit liabilities is an important factor affecting our ability to maximize our net interest margin. The strategies used to manage interest-bearing deposit liabilities are designed to adjust as the interest rate environment changes. We regularly assess our funding needs, deposit pricing and interest rate outlooks. First Guaranty Bank uses reciprocal deposit insurance products for collateralization of deposits. In addition to reciprocal deposits, First Guaranty may periodically utilize one-way sell options under these networks that results in a drop in deposits and corresponding drop in cash, removing those assets and deposit liabilities from the balance sheet. Total deposits in the one-way sell network were $285.0 million at June 30, 2026. From December 31, 2025 to June 30, 2026, total deposits decreased $175.8 million, or 4.8%, to $3.5 billion. Noninterest-bearing demand deposits increased $0.7 million, or 0.2%, to $415.3 million at June 30, 2026. The increase in noninterest-bearing demand deposits was primarily concentrated in business noninterest-bearing demand deposits. Interest-bearing demand deposits decreased $72.3 million, or 6.2%, to $1.1 billion at June 30, 2026. The decrease in interest-bearing demand deposits was primarily concentrated in public funds interest-bearing demand deposits that were in the reciprocal deposit network. Savings deposits increased $10.5 million, or 4.9%, to $224.4 million at June 30, 2026, primarily related to increases in individual savings deposits. Time deposits decreased $114.7 million, or 6.2%, to $1.7 billion at June 30, 2026, primarily due to decreases in individual and brokered time deposits.
Management will continue to evaluate and update our product mix and related technology in its efforts to attract additional customers. We currently offer a number of deposit products that are competitively priced and designed to attract and retain customers with primary emphasis on noninterest-bearing deposits, select time deposits and other lower cost deposits.
As of June 30, 2026, the aggregate amount of outstanding certificates of deposit in amounts greater than $250,000 was approximately $154.3 million. At June 30, 2026, approximately $29.0 million of First Guaranty's certificates of deposit greater than $250,000 had a remaining term greater than one year.
Brokered deposits totaled $1.1 billion as of June 30, 2026. Brokered deposits with a maturity of one year or less totaled $284.6 million as of June 30, 2026. Brokered deposits with an early redemption call option within one year totaled $207.4 million.
The total amount of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) was estimated at $276.2 million at June 30, 2026. This total excludes public funds deposits that are collateralized by securities or FHLB letters of credit. The amount of uninsured deposits including collateralized public funds deposits was estimated at $883.6 million at June 30, 2026.
The following table sets forth the distribution of our time deposit accounts.
(in thousands) June 30, 2026
Time deposits of less than $100,000 $ 1,278,600
Time deposits of $100,000 through $250,000 291,702
Time deposits of more than $250,000 154,272
Total Time Deposits $ 1,724,574
The following table sets forth the maturity of the time deposits greater than $250,000 at June 30, 2026.
(in thousands) June 30, 2026
Three months or less $ 43,320
Three to six months 40,510
Six months to one year 41,406
One to three years 27,561
More than three years 1,475
Total Time Deposits greater than $250,000 $ 154,272
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Public funds deposits totaled $938.2 million at June 30, 2026 and $927.2 million at December 31, 2025. Public funds time deposits totaled $76.7 million at June 30, 2026 compared to $78.7 million at December 31, 2025. First Guaranty has developed a program for the retention and management of public funds deposits. Since the end of 2012, First Guaranty has maintained public funds deposits in excess of $400.0 million. These deposits are from public entities such as school districts, hospital districts, sheriff departments and municipalities. The majority of these funds are under fiscal agency agreements with terms of three years or less. Deposits under fiscal agency agreements are generally stable but public entities may maintain the ability to negotiate term deposits on a specific basis including with other financial institutions. These deposits generally have stable balances as we maintain both operating accounts and time deposits for these entities. There is a seasonal component to public deposit levels associated with annual tax collections. Public funds will increase at the end of the year and during the first quarter. In addition to seasonal fluctuations, there are monthly fluctuations associated with internal payroll and short-term tax collection accounts for our public funds deposit accounts. Public funds deposit accounts are collateralized by FHLB letters of credit, by expanded reciprocal deposit insurance programs, by Louisiana municipal bonds and by eligible government and government agency securities such as those issued by the FHLB, FFCB, Fannie Mae, and Freddie Mac. First Guaranty intends to grow the proportion of its public funds portfolio that is collateralized by reciprocal deposit insurance as an alternative to pledging securities or utilizing FHLB letters of credit. First Guaranty initiated this strategy to invest these deposits more efficiently in higher yielding loans to improve the net interest margin and earnings. Total public funds collateralized by reciprocal deposit insurance programs decreased to $512.7 million at June 30, 2026 compared to $602.2 million at December 31, 2025.
The following table sets forth public funds as a percent of total deposits.
(in thousands except for %) June 30, 2026 December 31, 2025
Public Funds:
Noninterest-bearing Demand $ 4,698 $ 4,091
Interest-bearing Demand 834,407 826,099
Savings 22,377 18,275
Time 76,698 78,722
Total Public Funds $ 938,180 $ 927,187
Total Deposits $ 3,457,052 $ 3,632,877
Total Public Funds as a percent of Total Deposits 27.1 % 25.5 %
Borrowings
First Guaranty maintains borrowing relationships with other financial institutions as well as the Federal Home Loan Bank on a short and long-term basis to meet liquidity needs. First Guaranty had $7.2 million in short-term borrowings outstanding at June 30, 2026 and $7.1 million at December 31, 2025. The short-term borrowings at June 30, 2026 and December 31, 2025 were comprised of repurchase agreements.
First Guaranty had long-term borrowings from the FHLB that totaled $135.0 million at June 30, 2026 and December 31, 2025. First Guaranty converted previous short-term floating rate borrowings from the FHLB into long-term lower fixed rate borrowings in order to reduce interest expense. First Guaranty has a $100.0 million FHLB advance that matures in the second quarter of 2027, and a $35.0 million FHLB advance that matures in the third quarter of 2027.
First Guaranty had senior long-term debt totaling $14.2 million as of June 30, 2026 and December 31, 2025. In the quarter ended June 30, 2025, the parties amended the note to waive principal payments and permit quarterly interest payments in cash or common stock through March 31, 2026. On March 20, 2026, the parties extended the waiver of principal payments and the ability to make interest payments in cash or common stock through March 31, 2028.
First Guaranty had subordinated debt totaling $29.8 million at June 30, 2026 and December 31, 2025. During the quarter ended June 30, 2025, First Guaranty entered into an amendment permitting quarterly interest to be paid in cash or common stock through March 31, 2026. On March 20, 2026, the parties extended the ability to make interest payments in cash or common stock through March 31, 2028.
First Guaranty had $232.3 million in Federal Home Loan Bank letters of credit as of June 30, 2026 compared to $327.2 million at December 31, 2025. Federal Home Loan Bank letters of credit are obtained primarily for collateralizing public deposits.
Total Shareholders' Equity
Total shareholders' equity increased to $227.4 million at June 30, 2026 from $226.2 million at December 31, 2025. The increase in shareholders' equity was principally the result of an increase of $4.7 million in retained earnings, an increase of $5.9 million in surplus, and an increase of $0.7 million in common stock, partially offset by an increase of $10.2 million in accumulated other comprehensive loss. The $4.7 million increase in retained earnings was primarily due to net income of $6.2 million during the six months ended June 30, 2026, partially offset by $0.3 million in cash dividends paid on shares of our common stock and $1.2 million in cash dividends paid on shares of our preferred stock. The $5.9 million increase in surplus and $0.7 million increase in common stock was primarily due to the issuance of common stock under private placement during the first six months of 2026, and common stock issued as payment-in-kind for interest on senior long-term and subordinated debt. The increase in accumulated other comprehensive loss was primarily attributed to the increase in unrealized losses on available for sale securities during the six months ended June 30, 2026.
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Results of Operations for the Second Quarter and Six Months Ended June 30, 2026 and 2025
Performance Summary
Three months ended June 30, 2026 compared to the three months ended June 30, 2025. Net income for the three months ended June 30, 2026 was $3.4 million, an increase of $10.7 million, from net loss of $7.3 million for the three months ended June 30, 2025. The increase in net income for the three months ended June 30, 2026 as compared to the prior year period was primarily the result of a decrease in the provision to the credit allowance. Income per common share for the three months ended June 30, 2026 was $0.17 per common share, an increase of $0.78 per common share from $(0.61) per common share for the three months ended June 30, 2025.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025. Net income for the six months ended June 30, 2026 was $6.2 million, an increase of $19.6 million, from net loss of $13.5 million for the six months ended June 30, 2025. The increase in net income for the six months ended June 30, 2026 as compared to the prior year period was primarily the result of a decrease in the provision to the credit allowance. Income per common share for the six months ended June 30, 2026 was $0.31 per common share, an increase of $1.46 per common share from $(1.15) per common share for the six months ended June 30, 2025.
Net Interest Income
Our operating results depend primarily on our net interest income, which is the difference between interest income earned on interest-earning assets, including loans and securities, and interest expense incurred on interest-bearing liabilities, including deposits and other borrowed funds. Interest rate fluctuations, as well as changes in the amount and type of interest-earning assets and interest-bearing liabilities, combine to affect net interest income. First Guaranty's assets and liabilities are generally most affected by changes in the Federal Funds rate, SOFR rate, short-term Treasury rates such as one month and three month Treasury bills, and longer term Treasury rates such as the U.S. ten year Treasury rate. Our net interest income is affected by changes in the amount and mix of interest-earning assets and interest-bearing liabilities. There may also be a time lag in the effect of interest rate changes on assets and liabilities. It is also affected by changes in yields earned on interest-earning assets and rates paid on interest-bearing deposits and other borrowed funds.
A financial institution's asset and liability structure is substantially different from that of a non-financial company, in that virtually all assets and liabilities are monetary in nature. Accordingly, changes in interest rates may have a significant impact on a financial institution's performance. The impact of interest rate changes depends on the sensitivity to the change of our interest-earning assets and interest-bearing liabilities. The effects of the changing interest rate environment in recent periods and our interest sensitivity position is discussed below.
Three months ended June 30, 2026 compared to the three months ended June 30, 2025. Net interest income for the three months ended June 30, 2026 and 2025 was $22.3 million and $22.2 million, respectively. The increase in net interest income for the three months ended June 30, 2026 as compared to the prior year period was primarily due to a decrease in the average rate of our total interest-bearing liabilities, partially offset by a decrease in the average yield of our total interest-earning assets, a decrease in the average balance of our total interest-earning assets and an increase in the average balance of our total interest-bearing liabilities. The average rate of our total interest-bearing liabilities decreased by 40 basis points to 3.60% for the three months ended June 30, 2026 from 4.00% for the three months ended June 30, 2025. The primary source of the decrease in liabilities cost was associated with the repricing of interest bearing demand deposits for public funds that are primarily indexed to Treasury rates. The average yield of our interest-earning assets decreased by 26 basis points to 5.46% for the three months ended June 30, 2026 from 5.72% for the three months ended June 30, 2025 primarily due to a lower yield on interest-earning deposits with banks. For the three months ended June 30, 2026, the average balance of our total interest-earning assets decreased by $42.5 million to $3.8 billion due to the decrease in the average balance on loans. For the three months ended June 30, 2026, the average balance of our total interest-bearing liabilities increased by $12.0 million to $3.2 billion primarily due to growth in time deposits. As a result, our net interest rate spread increased 14 basis points to 1.86% for the three months ended June 30, 2026 from 1.72% for the three months ended June 30, 2025. Our net interest margin increased 3 basis points to 2.37% for the three months ended June 30, 2026 from 2.34% for the three months ended June 30, 2025.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025. Net interest income for the six months ended June 30, 2026 and 2025 was $43.0 million and $44.5 million, respectively. The decrease in net interest income for the six months ended June 30, 2026 as compared to the prior year period was primarily due to an increase in the average balance of our total interest-bearing liabilities and a decrease in the average yield of our total interest-earning assets, partially offset by a decrease in the average rate of our interest-bearing liabilities and an increase in the average balance of our total interest-earning assets. For the six months ended June 30, 2026, the average balance of our total interest-bearing liabilities increased by $131.8 million to $3.4 billion primarily due to growth in interest-bearing time deposits. The average yield of our interest-earning assets decreased by 40 basis points to 5.34% for the six months ended June 30, 2026 from 5.74% for the six months ended June 30, 2025 primarily due to a lower yield on interest-earning deposits with banks. The average rate of our total interest-bearing liabilities decreased by 38 basis points to 3.63% for the six months ended June 30, 2026 from 4.01% for the six months ended June 30, 2025. The primary source of the decrease in liabilities cost was associated with the repricing of interest bearing demand deposits for public funds that are primarily indexed to Treasury rates. For the six months ended June 30, 2026, the average balance of our total interest-earning assets increased by $90.5 million to $3.9 billion due to growth in the securities portfolio and an increase in interest-earning deposits with banks. As a result, our net interest rate spread decreased 2 basis points to 1.71% for the six months ended June 30, 2026 from 1.73% for the six months ended June 30, 2025. Our net interest margin decreased 13 basis points to 2.22% for the six months ended June 30, 2026 from 2.35% for the six months ended June 30, 2025.
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Interest Income
Three months ended June 30, 2026 compared to the three months ended June 30, 2025. Interest income decreased $3.0 million, or 5.6%, to $51.3 million for the three months ended June 30, 2026 as compared to the prior year period. The decrease in interest income was attributable to a decrease in the average balance and average yield of interest-earning assets. The average balance of our interest-earning assets decreased $42.5 million to $3.8 billion for the three months ended June 30, 2026 as compared to the same period in the prior year. The average yield of interest-earning assets decreased by 26 basis points to 5.46% for the three months ended June 30, 2026 compared to 5.72% for the three months ended June 30, 2025.
Interest income on securities increased $6.3 million to $12.1 million for the three months ended June 30, 2026 as compared to the prior year period primarily as a result of an increase in average balance and average yield of securities. The average balance of securities increased $572.2 million to $1.2 billion for the three months ended June 30, 2026 from $671.1 million for the three months ended June 30, 2025 primarily due to a increase in the average balance of our mortgage-backed securities and collateralized mortgage obligations securities portfolio compared to the prior year. The average yield on securities increased 45 basis points to 3.91% for the three months ended June 30, 2026 compared to 3.46% for the three months ended June 30, 2025 due to the increase in higher yielding securities.
Interest income on loans decreased $7.9 million or 19.3%, to $33.1 million for the three months ended June 30, 2026 as compared to the prior year period as a result of a decrease in the average balance of loans. The average balance of loans (excluding loans held for sale) decreased by $595.3 million to $1.9 billion for the three months ended June 30, 2026 from $2.5 billion for the three months ended June 30, 2025 largely as a result of loan sales and payoffs on the portfolio. This was partially offset by an increase in the average yield on loans (excluding loans held for sale) of 43 basis points to 7.12% for the three months ended June 30, 2026 from 6.69% for the three months ended June 30, 2025.
Interest income on interest-earning deposits with banks decreased $1.4 million to $6.1 million for the three months ended June 30, 2026 as compared to the prior year period as a result of a decrease in the average balance and average yield of interest-bearing deposits with banks. The average balance of interest-bearing deposits with banks decreased $19.4 million to $657.1 million for the three months ended June 30, 2026 from $676.5 million for the three months ended June 30, 2025. The yield on interest-earning deposits decreased 74 basis points to 3.71% for the three months ended June 30, 2026 from 4.45% for the three months ended June 30, 2025.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025. Interest income decreased $5.2 million, or 4.81%, to $103.6 million for the six months ended June 30, 2026 as compared to the prior year period. The decrease in interest income was attributable to a decrease in the average yield of interest-earning assets, partially offset by an increase in the average balance of interest-bearing assets. The average yield of interest-earning assets decreased by 40 basis points to 5.34% for the six months ended June 30, 2026 compared to 5.74% for the six months ended June 30, 2025. The average balance of our interest-earning assets increased $90.5 million to $3.9 billion for the six months ended June 30, 2026 as compared to the same period in the prior year.
Interest income on securities increased $11.2 million to $22.5 million for the six months ended June 30, 2026 as compared to the prior year period primarily as a result of an increase in average balance and average yield of securities. The average balance of securities increased $509.7 million to $1.2 billion for the six months ended June 30, 2026 from $664.4 million for the six months ended June 30, 2025 primarily due to a increase in the average balance of our mortgage-backed securities and collateralized mortgage obligations securities portfolio compared to the prior year. The average yield on securities increased 43 basis points to 3.86% for the six months ended June 30, 2026 compared to 3.43% for the six months ended June 30, 2025 due to the increase in higher yielding securities.
Interest income on loans decreased $17.6 million or 20.97%, to $66.4 million for the six months ended June 30, 2026 as compared to the prior year period as a result of a decrease in the average balance of loans. The average balance of loans (excluding loans held for sale) decreased by $605.8 million to $1.9 billion for the six months ended June 30, 2026 from $2.5 billion for the six months ended June 30, 2025 largely as a result of loan sales and payoffs on the portfolio. This was partially offset by an increase in the average yield on loans (excluding loans held for sale) of 25 basis points to 6.91% for the six months ended June 30, 2026 from 6.66% for the six months ended June 30, 2025.
Interest income on interest-earning deposits with banks increased $1.2 million to $14.7 million for the six months ended June 30, 2026 as compared to the prior year period as a result of an increase in the average balance of interest-bearing deposits with banks, partially offset by a decrease in the average yield of interest-bearing deposits with banks. The average balance of interest-bearing deposits with banks increased 188,249 to $800.6 million for the six months ended June 30, 2026 from $612.3 million for the six months ended June 30, 2025. The yield on interest-earning deposits decreased 74 basis points to 3.71% for the six months ended June 30, 2026 from 4.45% for the six months ended June 30, 2025.
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Interest Expense
Three months ended June 30, 2026 compared to the three months ended June 30, 2025. Interest expense decreased $3.1 million, or 9.6%, to $29.0 million for the three months ended June 30, 2026 from $32.1 million for the three months ended June 30, 2025 due primarily to a decrease on the average rate of interest-bearing liabilities, partially offset by an increase in the average balance of interest-bearing liabilities. The average balance of interest-bearing liabilities increased by $12.0 million during the three months ended June 30, 2026 to $3.2 billion as compared to the prior year period. This increase was a result of a $353.3 million increase in the average balance of time deposits, partially offset by a $302.8 million decrease in the average balance of interest-bearing demand deposits, a $24.2 million decrease in the average balance of savings deposits, and a $14.3 million decrease in the average balance of borrowings. The average rate of interest-bearing demand deposits was 3.11% for the three months ended June 30, 2026 and 3.73% for the three months ended June 30, 2025. The decrease in market interest rates, particularly U.S. Treasury rates, contributed to the decrease in rates paid on interest-bearing demand deposits. The largest concentration of interest-bearing demand deposits is associated with public funds deposits that are primarily indexed to Treasury rates. The average rate of time deposits decreased 37 basis points during the three months ended June 30, 2026 to 3.96% as compared to the prior year period. The decrease in the average rate of time deposits was due to changes in market rates as existing time deposits repriced.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025. Interest expense decreased $3.7 million, or 5.8%, to $60.6 million for the six months ended June 30, 2026 from $64.3 million for the six months ended June 30, 2025 due primarily to a decrease on the average rate of interest-bearing liabilities, partially offset by an increase in the average balance of interest-bearing liabilities. The average balance of interest-bearing liabilities increased by $131.8 million during the six months ended June 30, 2026 to $3.4 billion as compared to the prior year period. This increase was a result of a $394.1 million increase in the average balance of time deposits, partially offset by a $224.2 million decrease in the average balance of interest-bearing demand deposits, a $23.0 million decrease in the average balance of savings deposits, and a $15.1 million decrease in the average balance of borrowings. The average rate of interest-bearing demand deposits was 3.14% for the six months ended June 30, 2026 and 3.67% for the six months ended June 30, 2025. The decrease in market interest rates, particularly U.S. Treasury rates, contributed to the decrease in rates paid on interest-bearing demand deposits. The largest concentration of interest-bearing demand deposits is associated with public funds deposits that are primarily indexed to Treasury rates. The average rate of time deposits decreased 41 basis points during the six months ended June 30, 2026 to 3.99% as compared to the prior year period. The decrease in the average rate of time deposits was due to changes in market rates as existing time deposits repriced.
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The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments were made, as the effect thereof was not material. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances but have been reflected in the tables as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.
The net interest income yield shown below in the average balance sheet is calculated by dividing net interest income by average interest-earning assets and is a measure of the efficiency of the earnings from balance sheet activities. It is affected by changes in the difference between interest on interest-earning assets and interest-bearing liabilities and the percentage of interest-earning assets funded by interest-bearing liabilities.
Three Months Ended June 30, 2026 Three Months Ended June 30, 2025
(in thousands except for %) Average Balance Interest Yield/Rate (5) Average Balance Interest Yield/Rate (5)
Assets
Interest-earning assets:
Interest-earning deposits with banks $ 657,069 $ 6,073 3.71 % $ 676,456 $ 7,511 4.45 %
Securities (including FHLB stock) 1,243,273 12,118 3.91 % 671,090 5,797 3.46 %
Federal funds sold 544 - - % 573 - - %
Loans held for sale - - - % - - - %
Loans, net of unearned income(6) 1,864,702 33,090 7.12 % 2,459,978 41,013 6.69 %
Total interest-earning assets 3,765,588 $ 51,281 5.46 % 3,808,097 $ 54,321 5.72 %
Noninterest-earning assets:
Cash and due from banks 24,787 20,676
Premises and equipment, net 68,430 66,172
Other assets 44,854 22,876
Total Assets $ 3,903,659 $ 3,917,821
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Demand deposits $ 1,064,664 $ 8,241 3.11 % $ 1,367,486 $ 12,708 3.73 %
Savings deposits 219,383 963 1.76 % 243,589 1,336 2.20 %
Time deposits 1,759,634 17,395 3.96 % 1,406,320 15,196 4.33 %
Borrowings 186,565 2,404 5.17 % 200,862 2,841 5.67 %
Total interest-bearing liabilities 3,230,246 $ 29,003 3.60 % 3,218,257 $ 32,081 4.00 %
Noninterest-bearing liabilities:
Demand deposits 416,385 406,409
Other 31,969 39,427
Total Liabilities 3,678,600 3,664,093
Shareholders' equity 225,059 253,728
Total Liabilities and Shareholders' Equity $ 3,903,659 $ 3,917,821
Net interest income $ 22,278 $ 22,240
Net interest rate spread (1) 1.86 % 1.72 %
Net interest-earning assets (2) $ 535,342 $ 589,840
Net interest margin (3), (4) 2.37 % 2.34 %
Average interest-earning assets to interest-bearing liabilities 116.57 % 118.33 %
(1)Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(2)Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
(3)Net interest margin represents net interest income divided by average total interest-earning assets.
(4)The tax adjusted net interest margin was 2.39% and 2.35% for the above periods ended June 30, 2026 and 2025, respectively. A 21% tax rate was used to calculate the effect on securities income from tax exempt securities for the above periods ended June 30, 2026 and 2025, respectively.
(5)Annualized.
(6)Includes loan fees of $1.2 million for the three months ended June 30, 2026 and 2025.
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Six Months Ended June 30, 2026 Six Months Ended June 30, 2025
(in thousands except for %) Average Balance Interest Yield/Rate (5) Average Balance Interest Yield/Rate (5)
Assets
Interest-earning assets:
Interest-earning deposits with banks $ 800,580 $ 14,710 3.71 % $ 612,331 $ 13,510 4.45 %
Securities (including FHLB stock) 1,174,109 22,477 3.86 % 664,386 11,292 3.43 %
Federal funds sold 546 - - % 523 - - %
Loans held for sale - - - % 1,705 - - %
Loans, net of unearned income(6) 1,936,196 66,369 6.91 % 2,541,990 83,982 6.66 %
Total interest-earning assets 3,911,431 $ 103,556 5.34 % 3,820,935 $ 108,784 5.74 %
Noninterest-earning assets:
Cash and due from banks 24,411 20,517
Premises and equipment, net 63,743 66,550
Other assets 46,862 26,847
Total Assets $ 4,046,447 $ 3,934,849
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Demand deposits $ 1,146,400 $ 17,851 3.14 % $ 1,370,630 $ 24,912 3.67 %
Savings deposits 217,272 1,909 1.77 % 240,265 2,598 2.18 %
Time deposits 1,817,975 35,994 3.99 % 1,423,912 31,086 4.40 %
Borrowings 186,351 4,835 5.23 % 201,441 5,725 5.73 %
Total interest-bearing liabilities 3,367,998 $ 60,589 3.63 % 3,236,248 $ 64,321 4.01 %
Noninterest-bearing liabilities:
Demand deposits 416,993 404,214
Other 35,461 39,679
Total Liabilities 3,820,452 3,680,141
Shareholders' equity 225,995 254,708
Total Liabilities and Shareholders' Equity $ 4,046,447 $ 3,934,849
Net interest income $ 42,967 $ 44,463
Net interest rate spread (1) 1.71 % 1.73 %
Net interest-earning assets (2) $ 543,433 $ 584,687
Net interest margin (3), (4) 2.22 % 2.35 %
Average interest-earning assets to interest-bearing liabilities 116.14 % 118.07 %
(1)Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
(2)Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.
(3)Net interest margin represents net interest income divided by average total interest-earning assets.
(4)The tax adjusted net interest margin was 2.23% and 2.35% for the above periods ended June 30, 2026 and 2025, respectively. A 21% tax rate was used to calculate the effect on securities income from tax exempt securities for the above periods ended June 30, 2026 and 2025, respectively.
(5)Annualized.
(6)Includes loan fees of $2.8 million for the six months ended June 30, 2026 and 2025.
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Provision for Credit Losses
A provision for credit losses is a charge to income in an amount that management believes is necessary to maintain an adequate allowance for credit losses. The allowance for loan losses is calculated under ASC 326 and is management's evaluation of expected credit losses over the life of the loans in the portfolio. The provision is based on management's regular evaluation of current economic conditions in our specific markets as well as regionally and nationally, changes in the character and size of the loan portfolio, underlying collateral values securing loans, and other factors which deserve recognition in estimating loan losses. Past events, current conditions, and reasonable forecasts, along with quantitative and qualitative adjustments, are used in calculating the allowance for credit losses. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available or as future events change.
For the three months ended June 30, 2026, the provision for credit losses was $2.6 million compared to $16.6 million for the same period in 2025. The decrease in the provision was primarily impacted by changes in the loan portfolio. Total charge-offs were $7.7 million for the three months ended June 30, 2026 and $1.1 million for the same period in 2025. Charge-offs for the three months ended June 30, 2026 were concentrated in one commercial lease loan relationship. Partially offsetting these charge-offs were recoveries that totaled $0.9 million for the three months ended June 30, 2026 and $0.2 million for the same period in 2025.
For the six months ended June 30, 2026, the provision for credit losses was $5.3 million compared to $31.2 million for the same period in 2025. The decrease in the provision was primarily impacted by changes in the loan portfolio. Total charge-offs were $13.2 million for the six months ended June 30, 2026 and $8.0 million for the same period in 2025. Charge-offs for the six months ended June 30, 2026 were concentrated in one commercial lease loan relationship, one commercial and industrial loan and one non-farm non-residential loan relationship secured by retail real estate. Partially offsetting these charge-offs were recoveries that totaled $1.5 million for the six months ended June 30, 2026 and $0.4 million for the same period in 2025.
We believe that the allowance is adequate to cover current expected losses in the loan portfolio given the current economic conditions, and current expected net charge-offs and nonperforming asset levels. Economic uncertainty may result in additional increases to the allowance for credit losses in future periods.
There was no provision for credit losses on AFS or HTM securities in the six months ended June 30, 2026 and 2025.
Noninterest Income
Our primary sources of recurring noninterest income are customer service fees, ATM and debit card fees, loan fees, gains on the sales of loans and available for sale securities and other service fees. Noninterest income does not include loan origination fees which are recognized over the life of the related loan as an adjustment to yield using the interest method.
Noninterest income totaled $1.9 million for the three months ended June 30, 2026, a decrease of $0.3 million from $2.2 million for the three months ended June 30, 2025. The decrease was primarily due to a decrease in ATM and debit card fees and service charges, commissions, and fees. Service charges, commissions and fees totaled $0.7 million for the three months ended June 30, 2026 and $0.8 million for the same period in 2025. ATM and debit card fees totaled $0.7 million for the three months ended June 30, 2026 and $0.8 million for the same period in 2025. Net gains on the sale of securities were $0 for the three months ended June 30, 2026 and 2025. Net gains on the sale of assets were $0 for the three months ended June 30, 2026 and 2025. Other noninterest income totaled $0.5 million for the three months ended June 30, 2026 and 2025.
Noninterest income totaled $4.1 million for the six months ended June 30, 2026, a decrease of $0.4 million from $4.5 million for the six months ended June 30, 2025. The decrease was primarily due to a decrease in ATM and debit card fees and service charges, commissions, and fees. Service charges, commissions and fees totaled $1.5 million for the six months ended June 30, 2026 and $1.7 million for the same period in 2025. ATM and debit card fees totaled $1.3 million for the six months ended June 30, 2026 and $1.5 million for the same period in 2025. Net gains on the sale of securities were $1,000 for the six months ended June 30, 2026 compared to $0 for the same period in 2025. Net gains on the sale of assets were $44,000 for the six months ended June 30, 2026 compared to $4,000 for the same period in 2025. Other noninterest income totaled $1.3 million for the six months ended June 30, 2026 and 2025.
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Noninterest Expense
Noninterest expense totaled $17.2 million for the three months ended June 30, 2026, compared to $17.3 million for the same period in 2025. The decrease was primarily attributable to lower salaries and employee benefits expense, partially offset by increases in other real estate and regulatory assessment expenses. Salaries and employee benefits expense decreased to $7.0 million for the three months ended June 30, 2026, compared to $7.8 million for the same period in 2025. Occupancy and equipment expense was $2.4 million for the three months ended June 30, 2026, compared to $2.6 million for the same period in 2025. Other noninterest expense totaled $7.8 million for the three months ended June 30, 2026, compared to $6.8 million for the same period in 2025. Legal fees increased to $0.8 million during the three months ended June 30, 2026, compared to $0.7 million for the same period in 2025. Net costs related to other real estate and repossessions totaled $0.5 million for the three months ended June 30, 2026, compared to $24,000 for the same period in 2025, primarily due to costs associated with an independent living center that is in other real estate owned. Regulatory assessment expense increased to $1.8 million for the three months ended June 30, 2026, from $1.6 million for the same period in 2025.
Noninterest expense totaled $33.9 million for the six months ended June 30, 2026, compared to $35.3 million for the same period in 2025. The decrease was primarily attributable to lower salaries and employee benefits expense, partially offset by increases in other real estate and regulatory assessment expenses. Salaries and employee benefits expense decreased to $14.4 million for the six months ended June 30, 2026, compared to $16.3 million for the same period in 2025. Occupancy and equipment expense was $4.8 million for the six months ended June 30, 2026, compared to $5.2 million for the same period in 2025. Other noninterest expense totaled $14.7 million for the six months ended June 30, 2026, compared to $13.8 million for the same period in 2025. Legal fees decreased to $1.5 million during the six months ended June 30, 2026, compared to $1.8 million for the same period in 2025, primarily due to higher legal costs in the first six months of 2025 related to loan sales. This decrease was partially offset by higher costs associated with other real estate owned and increased regulatory assessment expense. Net costs related to other real estate and repossessions totaled $0.9 million for the six months ended June 30, 2026, compared to $74,000 for the same period in 2025, primarily due to costs associated with an independent living center that is in other real estate owned. Regulatory assessment expense increased to $3.6 million for the six months ended June 30, 2026, from $3.2 million for the same period in 2025.
The following table presents, for the periods indicated, the major categories of other noninterest expense:
Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2026 2025 2026 2025
Other noninterest expense:
Legal and professional fees $ 787 $ 671 $ 1,480 $ 1,759
Data processing 365 349 690 686
ATM fees 344 502 702 852
Marketing and public relations 189 163 411 404
Taxes - sales, capital, and franchise 518 543 1,034 1,043
Operating supplies 39 49 111 86
Software expense and amortization 1,237 1,188 2,409 2,404
Travel and lodging 127 126 182 198
Telephone 92 104 186 195
Amortization of core deposit intangibles 174 174 348 348
Donations 86 82 153 140
Net costs from other real estate and repossessions 530 24 898 74
Regulatory assessment 1,808 1,609 3,616 3,153
Other 1,522 1,235 2,511 2,413
Total other noninterest expense $ 7,818 $ 6,819 $ 14,731 $ 13,755
Income Taxes
The amount of income tax expense is influenced by the amount of pre-tax income, the amount of tax-exempt income and the amount of other non-deductible expenses and the statutory tax rate. The provision for income taxes for the three months ended June 30, 2026 was $0.9 million compared to a benefit of $2.2 million for the same period in 2025. The provision for income taxes increased due to an increase in income before income taxes. First Guaranty's statutory tax rate was 21.0% for the three months ended June 30, 2026 and 2025.
The provision for income taxes for the six months ended June 30, 2026 was $1.7 million compared to a benefit of $4.0 million for the same period in 2025. The provision for income taxes increased due to an increase in income before income taxes. First Guaranty's statutory tax rate was 21.0% for the six months ended June 30, 2026 and 2025.
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Liquidity and Capital Resources
Liquidity
Liquidity refers to the ability or flexibility to manage future cash flows to meet the needs of depositors and borrowers and fund operations. Maintaining appropriate levels of liquidity allows us to have sufficient funds available to meet customer demand for loans, withdrawal of deposit balances and maturities of deposits and other liabilities. Liquid assets include cash and due from banks, interest-earning demand deposits with banks, federal funds sold and available for sale investment securities.
As noted below in Part II, Item 1A Risk Factors, the issuance of the Consent Order could adversely affect the willingness of the Bank's sources of liquidity, including depositors, the Federal Home Loan Bank, deposit placement networks, brokered deposit sources and other counterparties to provide or maintain liquidity or funding to the Bank.
First Guaranty's cash and cash equivalents totaled $781.6 million at June 30, 2026 compared to $845.7 million at December 31, 2025. Loans maturing within one year or less at June 30, 2026 totaled $381.0 million compared to $469.5 million at December 31, 2025. At June 30, 2026, time deposits maturing within one year or less totaled $765.8 million compared to $977.0 million at December 31, 2025. Time deposits maturing after one year through three years totaled $633.6 million at June 30, 2026 compared to $507.8 million at December 31, 2025. Time deposits maturing after three years totaled $325.2 million at June 30, 2026 compared to $52.2 million at December 31, 2025. First Guaranty's held to maturity ("HTM") securities portfolio at June 30, 2026 was $323.2 million, or 26.6% of the investment portfolio, compared to $322.7 million, or 32.3% at December 31, 2025. First Guaranty's available for sale ("AFS") securities portfolio was $890.8 million, or 73.4% of the investment portfolio as of June 30, 2026 compared to $676.6 million, or 67.7% of the investment portfolio at December 31, 2025. The majority of the AFS portfolio was comprised of corporate debt securities, municipal bonds, collateralized mortgage obligations and mortgage-backed securities.
First Guaranty maintained a net borrowing capacity at the Federal Home Loan Bank totaling $73.8 million and $97.5 million at June 30, 2026 and December 31, 2025, respectively with $135.0 million in FHLB advances outstanding at June 30, 2026 and December 31, 2025. The advances outstanding at June 30, 2026 and December 31, 2025 were comprised of two long-term advances that totaled $135.0 million. The change in borrowing capacity with the Federal Home Loan Bank was due to changes in the value that First Guaranty receives on pledged collateral and due to First Guaranty's usage of the line. First Guaranty has increasingly transitioned public funds deposits into reciprocal deposit programs for collateralization as an alternative to FHLB letters of credit. We also maintain federal funds lines of credit at various correspondent banks with borrowing capacity of $93.0 million as of June 30, 2026. We also have a discount window line with the Federal Reserve Bank that totaled $59.9 million at June 30, 2026 which was a decrease of $49.3 million compared to availability of $109.2 million at December 31, 2025. First Guaranty did not have any advances under this facility at June 30, 2026. Management believes there is sufficient liquidity to satisfy current operating needs.
Capital Resources
First Guaranty's capital position is reflected in shareholders' equity, subject to certain adjustments for regulatory purposes. Further, our capital base allows us to take advantage of business opportunities while maintaining the level of resources we deem appropriate to address business risks inherent in daily operations.
Total shareholders' equity increased to $227.4 million at June 30, 2026 from $226.2 million at December 31, 2025. The increase in shareholders' equity was principally the result of an increase of $4.7 million in retained earnings, an increase of $5.9 million in surplus, and an increase of $0.7 million in common stock, partially offset by an increase of $10.2 million in accumulated other comprehensive loss. The $4.7 million increase in retained earnings was primarily due to net income of $6.2 million during the six months ended June 30, 2026, partially offset by $0.3 million in cash dividends paid on shares of our common stock and $1.2 million in cash dividends paid on shares of our preferred stock. The $5.9 million increase in surplus and $0.7 million increase in common stock was primarily due to the issuance of common stock under private placement during the first six months of 2026, and common stock issued as payment-in-kind for interest on senior long-term and subordinated debt. The increase in accumulated other comprehensive loss was primarily attributed to the increase in unrealized losses on available for sale securities during the six months ended June 30, 2026.
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Regulatory Capital
Risk-based capital regulations adopted by the FDIC require banks to achieve and maintain specified ratios of capital to risk-weighted assets. Similar capital regulations apply to bank holding companies over $3.0 billion in assets. The risk-based capital rules are designed to measure "Tier 1" capital (consisting of common equity, retained earnings and a limited amount of qualifying perpetual preferred stock and trust preferred securities, net of goodwill and other intangible assets and accumulated other comprehensive income) and total capital in relation to the credit risk of both on- and off- balance sheet items. Under the guidelines, one of its risk weights is applied to the different on-balance sheet items. Off-balance sheet items, such as loan commitments, are also subject to risk weighting. Applicable bank holding companies and all banks must maintain a minimum total capital to total risk weighted assets ratio of 8.00%, at least half of which must be in the form of core or Tier 1 capital. These guidelines also specify that bank holding companies that are experiencing internal growth or making acquisitions will be expected to maintain capital positions substantially above the minimum supervisory levels.
In order to avoid limitations on distributions, including dividend payments, and certain discretionary bonus payments to executive officers, an institution must hold a capital conservation buffer above its minimum risk-based capital requirements. As of June 30, 2026, the Bank's capital conservation buffer was 8.21% exceeding the minimum of 2.50%. As of June 30, 2026, First Guaranty's capital conservation buffer was 6.81% exceeding the minimum of 2.50%.
As a result of the Economic Growth, Regulatory Relief, and Consumer Protection Act, the Federal Reserve Board has amended its small bank holding company and savings and loan holding company policy statement to provide that holding companies with consolidated assets of less than $3 billion that are (i) not engaged in significant nonbanking activities, (ii) do not conduct significant off-balance sheet activities, and (3) do not have a material amount of SEC-registered debt or equity securities, other than trust preferred securities, that contribute to an organization's complexity, are no longer subject to regulatory capital requirements, effective August 30, 2018. On January 1, 2024, First Guaranty ceased being considered a "small bank holding company". Accordingly, both the Bank and First Guaranty are required to maintain specified ratios of capital to risk-weighted assets.
In addition, as a result of the legislation, the federal banking agencies have developed a "Community Bank Leverage Ratio" (the ratio of a bank's Tier 1 capital to average total consolidated assets) for financial institutions with assets of less than $10 billion. A "qualifying community bank" that exceeds this ratio will be deemed to be in compliance with all other capital and leverage requirements, including the capital requirements to be considered "well capitalized" under Prompt Corrective Action statutes. The federal banking agencies may consider a financial institution's risk profile when evaluating whether it qualifies as a community bank for purposes of the capital ratio requirement. In April 2026, the federal banking agencies finalized a rule lowering the Community Bank Leverage Ratio to 8%, effective July 1, 2026. As of June 30, 2026, the Bank has not elected to follow the Community Bank Leverage Ratio.
At June 30, 2026, First Guaranty and the Bank each satisfied the minimum numerical capital ratio thresholds to be considered well capitalized under applicable federal regulatory requirements. However, because the Consent Order requires the Bank to meet and maintain specific capital levels, the Bank may not be considered well capitalized for purposes of the prompt corrective action framework while the Consent Order remains in effect, even if its capital ratios otherwise exceed the applicable numerical thresholds. As a bank holding company, First Guaranty's financial condition and liquidity may be adversely affected by any limitations on the Bank's regulatory capital status, operations, dividends or funding sources. Although the Consent Order does not directly impose capital requirements on First Guaranty, the Bank's regulatory standing may adversely affect First Guaranty's liquidity, regulatory standing and its ability in engage in certain activities.
"Well Capitalized Minimums" As of June 30, 2026 As of December 31, 2025
Tier 1 Leverage Ratio
Bank 5.00 % 7.09 % 6.90 %
Consolidated N/A 6.22 % 5.93 %
Tier 1 Risk-based Capital Ratio
Bank 8.00 % 14.95 % 12.24 %
Consolidated 6.00 % 13.10 % 10.52 %
Total Risk-based Capital Ratio
Bank 10.00 % 16.21 % 13.48 %
Consolidated 10.00 % 15.97 % 13.12 %
Common Equity Tier One Capital Ratio
Bank 6.50 % 14.95 % 12.24 %
Consolidated N/A 11.31 % 9.03 %
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
Asset/Liability Management and Market Risk
Our asset/liability management (ALM) process consists of quantifying, analyzing and controlling interest rate risk (IRR) to maintain reasonably stable net interest income levels under various interest rate environments. The principal objective of ALM is to maximize net interest income while operating within acceptable limits established for interest rate risk and to maintain adequate levels of liquidity.
The majority of our assets and liabilities are monetary in nature. Consequently, one of our most significant forms of market risk is interest rate risk, which is inherent in our lending and deposit-taking activities. Our assets, consisting primarily of loans secured by real estate and fixed rate securities in our investment portfolio, have longer maturities than our liabilities, consisting primarily of deposits. As a result, a principal part of our business strategy is to manage interest rate risk and reduce the exposure of our net interest income to changes in market interest rates. The board of directors of First Guaranty Bank has established two committees, the management asset liability committee and the board investment committee, to oversee the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the board of directors. The management asset liability committee is comprised of senior officers of the Bank and meets as needed to review our asset liability policies and interest rate risk position. The board ALCO investment committee is comprised of certain members of the board of directors of the Bank and meets monthly. The management asset liability committee provides a monthly report to the board ALCO investment committee.
The need for interest sensitivity gap management is most critical in times of rapid changes in overall interest rates. First Guaranty has generally been liability sensitive. We modified our business plan in 2024 to reduce the liability sensitive nature of our balance sheet. We are working to limit our future exposure to interest rate fluctuations by creating a more balanced mix of rate sensitive assets and liabilities on a one-year time horizon and greater than one-year time horizon. We purchased amortizing mortgage backed securities in 2024, 2025 and 2026. We also purchased U.S. Treasury securities with a maturity of one year or less in 2024. Because of the significant impact on net interest margin from mismatches in repricing opportunities, we monitor the asset-liability mix periodically depending upon the management asset liability committee's assessment of current business conditions and the interest rate outlook. These strategies include, but are not limited to, frequent internal modeling of asset and liability values and behavior due to changes in interest rates. We monitor cash flow forecasts closely and evaluate the impact of both prepayments and extension risk.
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The following interest sensitivity analysis is one measurement of interest rate risk. This analysis reflects the contractual maturity characteristics of assets and liabilities over various time periods. This analysis does not factor in prepayments or interest rate floors on loans which may significantly change the report. This table includes nonaccrual loans in their respective maturity periods. The gap indicates whether more assets or liabilities are subject to repricing over a given time period. The interest sensitivity analysis at June 30, 2026 illustrated below reflects a liability-sensitive position with a negative cumulative gap on a one-year basis.
The interest spread and liability funding discussed below are directly related to changes in asset and liability mixes, volumes, maturities and repricing opportunities for interest-earning assets and interest-bearing liabilities. Interest-sensitive assets and liabilities are those which are subject to repricing in the near term, including both floating or adjustable rate instruments and instruments approaching maturity. The interest sensitivity gap is the difference between total interest-sensitive assets and total interest-sensitive liabilities. Interest rates on our various asset and liability categories do not respond uniformly to changing market conditions. Interest rate risk is the degree to which interest rate fluctuations in the marketplace can affect net interest income.
June 30, 2026
Interest Sensitivity Within
(in thousands except for %) 3 Months Or Less Over 3 Months
thru 12 Months 		Total One Year Over One Year Total
Earning Assets:
Loans (including loans held for sale) $ 684,822 $ 296,716 $ 981,538 $ 783,672 $ 1,765,210
Securities (including FHLB stock) 36,043 25,100 61,143 1,163,251 1,224,394
Federal Funds Sold 546 - 546 - 546
Other earning assets 730,848 - 730,848 - 730,848
Total earning assets $ 1,452,259 $ 321,816 $ 1,774,075 $ 1,946,923 $ 3,720,998
Source of Funds:
Interest-bearing accounts:
Demand deposits $ 1,092,746 $ - $ 1,092,746 $ - $ 1,092,746
Savings deposits 224,436 - 224,436 - 224,436
Time deposits 291,653 474,102 765,755 958,819 1,724,574
Short-term borrowings - - - 7,198 7,198
Long-term borrowings 14,214 - 14,214 135,000 149,214
Junior subordinated debt 29,835 - 29,835 - 29,835
Noninterest-bearing, net - - - 492,995 492,995
Total source of funds $ 1,652,884 $ 474,102 $ 2,126,986 $ 1,594,012 $ 3,720,998
Period gap $ (200,625) $ (152,286) $ (352,911) $ 352,911
Cumulative gap $ (200,625) $ (352,911) $ (352,911) $ -
Cumulative gap as a percent of earning assets (5.4) % (9.5) % (9.5) %
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As defined by the Securities and Exchange Commission in Exchange Act Rules 13a-15(e) and 15d-15(e), a Company's "disclosure controls and procedures" means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within time periods specified in the Commission's rules and forms. First Guaranty maintains such controls designed to ensure this material information is communicated to Management, including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), as appropriate, to allow timely decision regarding required disclosure.
Management, with the participation of the CEO and CFO, have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q. Based on that evaluation, the CEO and CFO have concluded that the disclosure controls and procedures as of the end of the period covered by this quarterly report are effective. There were no changes in First Guaranty's internal control over financial reporting during the last fiscal quarter in the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, First Guaranty's internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
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 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.
Item 1A. Risk Factors
Except as disclosed in the updated risk factors below and elsewhere in this report, there are no material changes during the period covered by this Report to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. In particular, please see the discussion under the in Part I Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this report.
The Consent Order issued by the FDIC and OFI requires the Bank to devote significant resources to enhance its policies, procedures, and practices, and places additional restrictions on the Bank's operations, and the failure to comply with any provision of the Consent Order may cause the FDIC to take further action against it.
On August 5, 2026, the Bank consented to the issuance of the Consent Order by the FDIC and the OFI. The Consent Order requires the Bank and/or the Bank Board to, among other things, 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%, 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. Because the Consent Order requires the Bank to meet and maintain specific capital levels, the Bank may not be considered "well capitalized" for purposes of the prompt corrective action framework, even if its capital ratios otherwise exceed the numerical thresholds for well capitalized status, while the Consent Order remains in effect. In addition, the Bank's ability to accept, renew or roll over brokered deposits, including certain deposits obtained through deposit placement networks, may be limited. The issuance of the Consent Order could adversely affect the willingness of depositors, the FHLB, deposit placement networks, brokered deposit sources and other counterparties to provide or maintain liquidity or funding to the Bank, which could adversely affect the Bank's liquidity, funding costs, financial condition and results of operations.
The Consent Order also restricts the Bank's ability to pay dividends without the prior written consent of the FDIC and OFI, which could adversely affect First Guaranty's liquidity and ability to pay dividends on its preferred or common stock or meet its other obligations. The Consent Order may also require the Bank to charge off, collect or reduce classified assets, limit additional extensions of credit to certain classified borrowers, and implement or enhance policies, procedures, monitoring and reporting related to loan administration, loan review, CRE concentrations, underwriting and credit administration. These requirements are expected to result in increased compliance, consulting, legal and other noninterest expenses, require significant management and board attention, and may adversely affect the Bank's operations, financial condition and results of operations. The Bank's regulatory status may also adversely affect First Guaranty's regulatory standing, liquidity, and its ability in engage certain activities.
First Guaranty's management and board of directors have devoted and expect to continue to devote considerable time, attention, and resources on developing, implementing, and monitoring corrective actions to comply with the terms of the Consent Order.
There is no guarantee that First Guaranty will ultimately address the FDIC's and OFI's concerns and comply with all of the terms of the Consent Order. Issuance of the Consent Order does not preclude further government action, including the assessment of civil money penalties or other enforcement actions, if the FDIC and/or the OFI determine that the Bank has continued, or has failed to correct, the practices and/or violations described in the Consent Order or that the Bank otherwise is violating or has violated the Consent Order.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a)On April 30, 2026, First Guaranty issued an aggregate of 436,204 shares of its common stock, $1.00 par value per share (the "Common Stock"), for aggregate offering proceeds of $4.0 million. These shares were issued in a private placement, with the proceeds used for general corporate purposes, including to support continued growth and to enhance regulatory capital ratios. On June 30, 2026, First Guaranty issued an aggregate of 74,846 shares of its common stock, $1.00 par value per share (the "Common Stock"), as payment-in-kind in lieu of interest payments pursuant to that certain Promissory Note, dated as of March 20, 2026, by and between First Guaranty Bancshares, Inc. and Smith & Tate Investment, L.L.C. (the "Promissory Note Amendment"), and that certain Second Amendment to the First Guaranty Bancshares, Inc. Floating Rate Subordinated Note due March 28, 2034, dated as of March 20, 2026, by and between First Guaranty and Smith & Tate Investment, L.L.C. (the "Subordinated Note Amendment"). First Guaranty did not receive any proceeds of the payment-in-kind issuance. These issuances of common stock by First Guaranty were made to "accredited investors" in reliance upon the exemptions from registration available under Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D.
(b)Not applicable.
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(c)Not applicable.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(a)Not applicable.
(b)Not applicable.
(c)During the three months ended June 30, 2026, no First Guaranty officer or director adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading agreement", as each term is defined in Item 408(a) of Regulation S-K.
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Item 6. Exhibits
The following exhibits are either filed as part of this report or are incorporated herein by reference.
Exhibit Number Exhibit
3.1
3.2
3.3
3.4
3.5
4.1
4.2
4.2
4.3
4.4
4.5
4.6
4.7
10.1
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.SCH XBRL Taxonomy Extension Schema.
101.CAL XBRL Taxonomy Extension Calculation Linkbase.
101.DEF XBRL Taxonomy Extension Definition Linkbase.
101.PRE XBRL Taxonomy Extension Presentation Linkbase.
101.LAB XBRL Taxonomy Extension Label Linkbase.
101.INS XBRL Instance Document.
(1)Incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K12G3 filed by First Guaranty Bancshares, Inc. with the Securities and Exchange Commission on August 2, 2007.
(2)Incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed by First Guaranty Bancshares, Inc. with the Securities and Exchange Commission on September 23, 2011.
(3)Incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed by First Guaranty Bancshares, Inc. with the Securities and Exchange Commission on April 27, 2021.
(4)Incorporated by reference to Exhibit 3.2 of the Current Report on Form 8-K12G3 filed by First Guaranty Bancshares, Inc. with the Securities and Exchange Commission on August 2, 2007.
(5)Incorporated by reference to Exhibit 3.3 of the Current Report on Form 8-K12G3 filed by First Guaranty Bancshares, Inc. with the Securities and Exchange Commission on August 2, 2007.
(6)Incorporated by reference to Exhibit 4 of the Current Report on Form 8-K12G3 filed by First Guaranty Bancshares, Inc. with the Securities and Exchange Commission on August 2, 2007.
(7)Incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed by First Guaranty Bancshares, Inc. with the Securities and Exchange Commission on June 23, 2022.
(8)Incorporated by reference to Exhibit 4.3 of the Annual Report on Form 10-K filed by First Guaranty Bancshares, Inc. with the Securities and Exchange Commission on March 16, 2023.
(9)Incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed by First Guaranty Bancshares, Inc. with the Securities and Exchange Commission on April 27, 2021.
(10)Incorporated by reference to Exhibit 4.5 of the Annual Report on Form 10-K filed by First Guaranty Bancshares, Inc. with the Securities and Exchange Commission on March 16, 2023.
(11)Incorporated by reference to Exhibit 4.2 of the Current Report on Form 8-K filed by First Guaranty Bancshares, Inc. with the Securities and Exchange Commission on April 27, 2021.
(12)Incorporated by reference to Exhibit 4.2 of the Current Report on Form 8-K filed by First Guaranty Bancshares, Inc. with the Securities and Exchange Commission on April 3, 2024.
(13)Incorporated by reference to Exhibit 99.1 of the Current Report on Form 8-K filed by First Guaranty Bancshares, Inc. with the Securities and Exchange Commission on August 7, 2026.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, First Guaranty has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
FIRST GUARANTY BANCSHARES, INC.
Date: August 14, 2026 By: /s/ Michael R. Mineer
Michael R. Mineer
President and Chief Executive Officer
Principal Executive Officer
Date: August 14, 2026 By: /s/ Eric J. Dosch
Eric J. Dosch
Chief Financial Officer, Secretary and Treasurer
Principal Financial Officer
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