What changed in this filing

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Item 1. Business

2026-03-31 compared with 2025-03-17 · 166 added, 87 removed, 909 unchanged (22% of the section changed)

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First Guaranty Bancshares, Inc.

("First Guaranty") is a Louisiana corporation, and financial holding company headquartered in Hammond, Louisiana.

Our wholly owned subsidiary, First Guaranty Bank (the "Bank"), a Louisiana state-chartered commercial bank, provides personalized commercial banking services mainly to Louisiana and Texas customers through 35 banking facilities primarily located in the metropolitan/micropolitan statistical areas ("MSAs"), of Hammond, Baton Rouge, Lafayette, Shreveport-Bossier City, Lake Charles, Alexandria, Dallas-Fort Worth-Arlington, Waco, Texas.

First Guaranty expanded into Kentucky and West Virginia, our Mideast markets, in 2021 with loan and deposit production offices.

First Guaranty now has branches in Vanceburg, Kentucky and Bridgeport, West Virginia.

("First Guaranty" or "First Guaranty Bancshares") is a Louisiana corporation, and financial holding company headquartered in Hammond, Louisiana.

Our wholly owned subsidiary, First Guaranty Bank (the "Bank"), a Louisiana state-chartered commercial bank, provides personalized commercial banking services customers through 30 banking facilities.

The facilities are primarily located in the metropolitan/micropolitan statistical areas ("MSAs"), of Hammond, Baton Rouge, Lafayette, Shreveport-Bossier City, and Alexandria, Louisiana;

Dallas-Fort Worth-Arlington and Waco, Texas;

Vanceburg, Kentucky;

and Bridgeport, West Virginia.

As announced in a Current Report on Form 8-K filed on March 9, 2026, First Guaranty has entered into a purchase and assumption agreement pursuant to which it would exit the Dallas-Fort Worth-Arlington and Waco, Texas markets.

Our principal business consists of attracting deposits from the general public and local municipalities in our market areas and then investing those deposits.

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First Guaranty Bank was founded in Amite, Louisiana on March 12, 1934.

While the origins of First Guaranty Bank go back 90 years, we began our modern history in 1993 when an investor group, led by Marshall T.

While the origins of First Guaranty Bank go back more than 90 years, we began our modern history in 1993 when an investor group, led by Marshall T.

Reynolds, our Chairman, invested $3.6 million in First Guaranty Bank as part of a recapitalization plan with the objective of building a community-focused commercial bank in our Louisiana markets.

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In 2021 we issued $34.5 million of preferred stock and depositary shares that trades on the Nasdaq Global Market.

In 2023 we issued $20.0 million of common stock through two separate private placements.

Since 2023 we have issued an additional $27.0 million in common stock through private placements.

Since our Share Exchange, we have supplemented our organic growth with four acquisitions, which added stable deposits that provided funding for our lending business and extended our geographic footprint in the Baton Rouge, Hammond, Alexandria, Dallas-Fort Worth-Arlington, and Waco MSAs.

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July 30, 2007 $ 12,140 $ 129,606

Our primary market areas include the Louisiana MSAs of Hammond, Baton Rouge, Lafayette, Shreveport-Bossier City, Lake Charles and Alexandria along with the Texas MSAs of Dallas-Fort Worth-Arlington and Waco.

*As previously noted above, First Guaranty Bank has entered into a purchase and assumption agreement pursuant to which it would exit the Dallas-Fort Worth-Arlington and Waco markets.

Our primary market areas include the Louisiana MSAs of Hammond, Baton Rouge, Lafayette, Shreveport-Bossier City, and Alexandria;

the Texas MSAs of Dallas-Fort Worth-Arlington and Waco;

and our Mideast market, which includes Vanceburg, Kentucky and Bridgeport, West Virginia.

Most of our branches are located along the major Louisiana interstates of I-12, I-55, I-10, I-49 and I-20.

We have four branches in the Dallas-Fort Worth metroplex and one branch in Waco, Texas.

We have a loan production office in Lake Charles, Louisiana.

In 2021, First Guaranty expanded into Kentucky and West Virginia, and we now have branches located in Vanceburg, Kentucky and Bridgeport, West Virginia that are not in MSAs.

We refer to this region as our Mideast market.

As noted above, we have entered into a purchase and assumption agreement pursuant to which we would exit the Dallas-Fort Worth-Arlington and Waco markets.

In our Mideast market we operate one branch in Vanceburg, Kentucky and one branch in Bridgeport, West Virginia, both of which are located outside of designated MSAs.

We are headquartered in Hammond, Louisiana and approximately 60% of our deposits are in the Hammond MSA, our largest deposit concentration market.

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The Louisiana National Guard maintains a 56-acre campus at the airport, which is home to the 1/244 th Air Assault Helicopter Battalion.

Port Manchac, which provides egress via Lake Pontchartrain with the Gulf of Mexico, is located 15 miles south of Hammond.

Port Manchac, which provides egress via Lake Pontchartrain with the Gulf of America, is located 15 miles south of Hammond.

The Hammond Amtrak Station located in downtown Hammond is on Amtrak's City of New Orleans route, which runs from New Orleans to Chicago, Illinois.

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Bossier Parish is also the home to the Barksdale Air Force Base, which has 15,000 employees.

Lake Charles MSA .

First Guaranty established a loan production office in Lake Charles, LA in 2018.

Lake Charles is the sixth largest city in Louisiana.

The Lake Charles MSA has a population of approximately 240,000.

Its major industries include petrochemical, gambling, aircraft repair, and education.

Lake Charles has been the fastest growing MSA in Louisiana.

Alexandria MSA.

The Union acquisition expanded First Guaranty into the Alexandria MSA with branches in Rapides and Avoyelles parishes.

Alexandria is the tenth largest city in Louisiana with a population of approximately 48,000 and is located along Interstate I-49.

Alexandria is the ninth largest city in Louisiana with a population of approximately 46,000 and is located along Interstate I-49.

The Alexandria MSA has an overall population of approximately 148,000.

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We currently are operating four branches located in Fort Worth (Tarrant County), Denton (Denton County), McKinney (Collin County), and Garland (Dallas County).

As noted above, we have entered into an agreement pursuant to which we would exit the Dallas-Fort Worth-Arlington market.

The Waco MSA is located between the Dallas Forth Worth MSA and Austin, Texas with a population of approximately 307,000.

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Waco is the home of Baylor University with approximately 20,000 students.

As noted above, we have entered into an agreement pursuant to which we would exit the Waco market.

Mideast Market .

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We aim to become the preferred bank for small businesses and consumers in both metropolitan and rural markets.

Our goal is to expand our market share along Louisiana's key interstate corridors, including I-12, I-55, I-10, I-49, and I-20, and to continue our growth in the Texas markets of Dallas-Fort Worth-Arlington and Waco.

Our goal is to expand our market share along Louisiana's key interstate corridors, including I-12, I-55, I-10, I-49, and I-20.

Additionally, we seek to strengthen our relationships in Kentucky and West Virginia.

This mission encompasses not only expanding our geographical footprint but also transforming lives by imparting personal finance skills and staying relevant through innovative banking solutions.

First Guaranty modified its business strategy in mid-2024.

Our new business strategy focuses on controlled asset growth, measured expense reductions, expanded balance sheet risk management, and enhanced credit risk management.

First Guaranty modified its business strategy in mid-2024 and utilized this strategy through 2025.

Our revised business strategy focuses on controlled asset growth, measured expense reductions, expanded balance sheet risk management, and enhanced credit risk management.

We expect to continue with this strategy in 2026.

As part of this strategy, we recently entered into an agreement pursuant to which we would exit our Texas markets of Dallas-Fort Worth-Arlington and Waco.

Controlled Asset Growth

First Guaranty successfully grew its loan portfolio and total assets during the last several years.

We plan to moderate future growth as we manage our current loan portfolio and capital levels.

We plan to reduce our exposure to commercial real estate loans particularly construction loans and non-owner occupied loans.

We will continue to pursue residential mortgage lending, consumer lending, owner occupied commercial real estate, commercial and industrial loans, and guaranteed lending.

First Guaranty reduced the size of our loan portfolio in 2025 in order to align with our risk-based capital levels.

We reduced our exposure to commercial real estate loans particularly construction loans and non-owner-occupied loans.

We continue to pursue residential mortgage lending, consumer lending, owner occupied commercial real estate, commercial and industrial loans, and guaranteed lending.

We will continue to be a leading agricultural lender and grow our Farm Service Agency lending.

We will continue with our commercial leasing business.

We will pursue smaller loan and lease loan originations relative to the past and try to achieve greater diversification within our loan portfolio.

Measured Expense Reduction

We initiated a series of cost reduction measures during the third quarter of 2024.

These included planned reduction in staffing that has resulted in approximately 20 percent, or almost 100 fewer full time equivalent employees at the end of 2024 compared to the end of 2023.

We reduced discretionary expenses such as travel, training and advertising, and director fees, and modified our health care plan.

We initiated a series of cost reduction measures during the third quarter of 2024 and have continued to diligently pursue cost reductions in 2025.

First Guaranty has reduced staffing 21 percent from 399 full time equivalent employees at the end of 2024 to 330 at the end of 2025.

We implemented reductions in discretionary expenses, including travel, training, advertising, and director fees, and modified our health care plan.

We are working to replace external third party service providers with lower cost providers or with internally generated solutions.

We are evaluating our internal functions to create more efficiency and reduce redundant processes in order to achieve more productively with less expense.

We are evaluating our internal functions to create more efficiency and reduce redundant processes in order to achieve more productivity with less expense.

Expanded Balance Sheet Risk Management

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Our deposit strategy continues to focus on expanding our individual and business deposit bases while maintaining our public funds deposit program.

During 2023 and 2024 we also expanded our use of select wholesale or brokered deposits in order to increase liquidity and manage sensitivity to market risk.

Beginning in 2023 and continuing through 2025 we also expanded our use of select wholesale or brokered deposits in order to increase liquidity and manage sensitivity to market risk.

Our deposit strategy leverages off the market share dominance that we have in several of our markets, such as the Hammond MSA where we had a 52.3% deposit market share at June 30, 2025, placing us first overall.

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Enhanced Credit Risk Management

First Guaranty's non-performing assets increased during 2024.

We have taken proactive measures to address these non-performing assets and to reduce the level of non-performing assets.

First Guaranty's non-performing assets decreased during 2025 as compared to December 31, 2024.

We have taken proactive measures to address and reduce the level of non-performing assets.

We modified the loan credit approval process, and are pursuing smaller loan relationships for origination compared to the past.

We have increased our allowance for credit losses.

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We increased internal credit standards and slowed the origination of new loans.

We increased the risk weighted capital ratios during 2024 through growth in retained earnings and the allowance for credit losses, reduction in commitments for construction loans and by reducing total loan balances.

We plan to continue increasing capital and increasing the risk weighted capital ratio.

We increased the risk weighted capital ratios during 2025 primarily by reducing total loan balances, including commitments for construction loans.

We plan to continue this strategy in 2026.

Lending Activities

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In evaluating the property securing the loan, the factors we consider include the net operating income of the mortgaged property before debt service and depreciation, the debt service coverage ratio (the ratio of net operating income to debt service) to ensure that the borrower's net operating income together with the borrower's other sources of income is at least 125% of the annual debt service and the ratio of the loan amount to the appraised value of the mortgaged property.

We generally obtain personal guarantees from the borrower or a third party as a condition to originating commercial real estate loans.

We generally obtain personal guaranties from the borrower or a third party as a condition to originating commercial real estate loans.

All non-farm non-residential loans are appraised by outside independent appraisers approved by the board of directors.

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Non-farm non-residential loans are generally made at rates that adjust at or above the prime rate as reported in the Wall Street Journal , that mature in three to five years and with principal amortization for a period of up to 20 years.

We will also originate fixed-rate, non-farm non-residential loans that mature in three to five years with principal amortization of up to 20 years.

We have recently developed a fully amortizing loan product that will have periodic interest rate price resets which now represents the majority of our new origination and renewed loans.

We originate fixed-rate, non-farm non-residential loans that mature in three to five years with principal amortization of up to 20 years.

In addition, we have recently developed a fully amortizing loan product with periodic interest rate price resets, which now represents the majority of our new origination and renewed loans.

Our largest concentration of non-farm non-residential loans is secured by hotels, and such loans are generally made only to hotel operators known to management.

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Commercial and industrial loans (excluding syndicated loans) are generally made to small and mid-sized companies located within Louisiana and Texas.

We also participate in government programs which guarantee portions of commercial and industrial loans such as the SBA and USDA.

We also participate in government programs which guarantee portions of commercial and industrial loans such as the U.S.

Small Business Administration ("SBA") and United States Department of Agriculture ("USDA").

In most cases, we require collateral of equipment, accounts receivable, inventory, chattel or other assets before making a commercial business loan.

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Our underwriting standards for commercial and industrial loans include a review of the applicant's tax returns, financial statements, credit history, the underlying collateral and an assessment of the applicant's ability to meet existing obligations and payments on the proposed loan based on cash flow generated by the applicant's business.

We generally obtain personal guarantees from the borrower or a third party as a condition to originating commercial and industrial loans.

We generally obtain personal guaranties from the borrower or a third party as a condition to originating commercial and industrial loans.

Over the last 18 years, we pursued a focused program to participate in syndicated loans (loans made by a group of lenders, including us, who share or participate in a specific loan) with a larger regional financial institution as the lead lender.

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Our credit department independently reviews all syndicate loans and our board of directors has created a special committee to oversee the underwriting and approval of these loans.

At December 31, 2024, syndicated loans secured by assets other than commercial real estate totaled $27.6 million, or 10.7% of the commercial and industrial loan portfolio, of which $27.6 million were shared national credits.

At December 31, 2025, syndicated loans secured by assets other than commercial real estate totaled $21.1 million, or 9.2% of the commercial and industrial loan portfolio, all of which were shared national credits.

Commercial and industrial loans generally involve increased credit risk and, therefore, typically yield a higher return.

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We generally originate fixed-rate mortgage loans in amounts up to the maximum conforming loan limits as established by the Federal Housing Finance Agency, which at December 31, 2025 was $806,500 for single-family homes in our market area.

At December 31, 2024, we held $19.3 million in jumbo loans exceeded the conforming loan limit at origination.

At December 31, 2025, we held $16.8 million in jumbo loans which exceeded the conforming loan limit at origination.

We generally hold our one- to four-family residential real estate loans in our portfolio.

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Our home equity products are originated in amounts, that when combined with the existing first mortgage loan, do not generally exceed 80% of the loan-to-value ratio of the subject property.

All of our one- to four-family residential mortgages include "due on sale" clauses, which are provisions giving us the right to declare a loan immediately payable if the borrower sells or otherwise transfers an interest in the property to a third party.

Virtually all of our one- to four-family residential mortgages include "due on sale" clauses, which are provisions giving us the right to declare a loan immediately payable if the borrower sells or otherwise transfers an interest in the property to a third party.

Property appraisals on real estate securing our single-family residential loans are made by state certified and licensed independent appraisers approved by the board of directors.

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At December 31, 2025, we had $144.2 million or 6.9% of our total loan portfolio in multifamily loans.

Such loans may be either fixed- or adjustable-rate loans tied to the prime rate with maturity or repricing dates up to five years and amortization schedules of up to 20 years.

Such loans may be either fixed- or adjustable-rate loans tied to the prime or Treasury rate with maturity or repricing dates up to five years and amortization schedules of up to 20 years.

We will originate multifamily loans in amounts up to 80% of the value of the multifamily property.

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Additionally, if the estimate of value proves to be inaccurate, we may be confronted, at or prior to the maturity of the loan, with a project having a value which is insufficient to assure full repayment.

As part of First Guaranty's change in business strategy in mid-2024, the bank is not actively pursuing to increase this business line.

We intend to reduce exposure to construction and land development lending during 2025.

As part of First Guaranty's change in business strategy in mid-2024, the bank reduced this business line in 2025.

We intend to further reduce exposure to construction and land development lending during 2026.

Agricultural Loans.

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Farm Service Agency.

We generally obtain personal guarantees from the borrower or a third party as a condition to originating agricultural loans.

We generally obtain personal guaranties from the borrower or a third party as a condition to originating agricultural loans.

The underwriting standards used for agricultural loans include a determination of the borrower's ability to meet existing obligations and payments on the proposed loan from normal cash flows generated in the borrower's business.

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Farm Service Agency.

Generally, we obtain personal guarantees of the borrower on all loans secured by farmland.

Generally, we obtain personal guaranties of the borrower on all loans secured by farmland.

Commercial Leases.

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We work with third parties to facilitate the sourcing of lease financing opportunities.

Commercial leases generally have higher yields and shorter average lives than real estate secured loans.

Commercial leases generally carry higher yields and shorter average lives than real estate‑secured loans but are secured by equipment and other assets that may decline in value more rapidly or be difficult to liquidate, increasing credit risk.

The weighted average size of our commercial leases was approximately $3.5 million at December 31, 2025.

In 2025, First Guaranty charged-off $43.4 million against commercial leases related to an automobile parts manufacturer.

Adverse economic or market conditions affecting our leasing customers could reduce collectability and collateral values, resulting in inadequate collateral coverage and increased credit losses.

The largest commercial lease relationship was $16.1 million at December 31, 2025.

Commercial leases totaled $75.6 million, or 3.7% of our total loan portfolio at December 31, 2025.

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Loan Approval Authority.

We establish various lending limits for executive management and also maintain a loan committee comprised of our directors and management.

We establish lending limits applicable to executive management and maintain two loan committees:

a management loan committee and a separate loan committee comprised of directors and management.

Generally, loan officers have authority to approve secured loan relationships in amounts up to $150,000 and unsecured loan relationships in amounts up to $25,000, while Regional Managers and Presidents have secured loan approval authority up to $500,000 and unsecured approval authority up to $100,000.

For loans exceeding a loan officer's approval authority, we utilize three methods for approvals:

(1) credit officers, (2) Management Loan Committee, and (3) the Bank's director loan committee.

(1) credit officers, (2) Management Loan Committee, and (3) the board of directors.

Loan relationships between $500,000 and $1,500,000 are approved by a combination of credit officers and executive management.

The management loan committee approves new money loans between $1,500,001 - $2,500,000.

The director loan committee approves loan relationships of between $2,500,001 and up to $20.0 million.

Syndicated loans and commercial leases are approved by the Bank's director loan committee in amounts up to $20.0 million.

Any loan relationship exceeding $20.0 million requires the approval of the board of directors.

The management loan committee composition and approval structure were modified in 2025 as part of First Guaranty’s risk management strategy change.

Several members of senior management were made voting members and they must unanimously approve new money loans and loan relationship renewals that are $1.5 million or greater up to $10.0 million.

The bank further modified its approval structure by requiring that the full board of directors approve any loan relationship that exceeds $10.0 million.

Our lending activities are also subject to Louisiana statutes and internal guidelines limiting the amount we can lend to any one borrower.

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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 clients received funds associated with the CARES Act during 2021 and 2022 which increased average balances.

These balances from CARES Act relief funds are anticipated to decline over time.

Public funds deposit accounts are collateralized by FHLB letters of credit, reciprocal deposit insurance programs, Louisiana municipal bonds and eligible government and government agency securities such as those issued by the FHLB, FFCB, Fannie Mae, and Freddie Mac.

The interest rates paid by us on deposits are set at the direction of our executive management.

Interest rates are determined based on our liquidity requirements, interest rates paid by our competitors, and our growth goals and applicable regulatory restrictions and requirements.

At December 31, 2024, we had $768.0 million in brokered deposits, of which $657.5 million were time deposits and $110.5 million were money market deposits.

At December 31, 2025, we had $1.2 billion in brokered deposits, of which $1.1 billion were time deposits and $88.6 million were money market deposits.

The objectives of our investment policy are to provide a source of liquidity, to provide an appropriate return on funds invested, to manage interest rate risk and to meet pledging requirements for our public funds and other borrowings.

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(5) corporate and other debt securities and (6) municipal bonds.

Government agency securities comprise the largest share of our investment securities, having a fair value of $202.1 million all of which were classified as held to maturity at December 31, 2024.

The Bank's management asset liability committee and board investment committee are responsible for regular review of our investment activities and the review and approval of our investment policy.

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Human Capital Resources

First Guaranty Bank recently reached the milestone of 90 years in operation, and throughout our history, we have worked to build and grow trust and relationships, operating with a strong commitment to the welfare of our customers and communities.

First Guaranty Bank recently reached the milestone of more than 90 years in operation, and throughout our history, we have worked to build and grow trust and relationships, operating with a strong commitment to the welfare of our customers and communities.

Our workforce drives this success and longevity.

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The CFPB has broad rule-making authority for a wide range of consumer protection laws that apply to all banks and savings institutions, including the authority to prohibit "unfair, deceptive or abusive" acts and practices.

In February 2025, the Trump administration halted the CFPB’s operations, and its employees were instructed to cease all supervision and examination activity.

During 2025, the Trump administration rescinded a number of CFPB’s rules and significantly reduced the CFPB's operations, including supervision and examination activity.

As a result, the future of the CFPB and its impact on First Guaranty Bancshares and First Guaranty Bank remains uncertain.

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First Guaranty Bank did not elect to follow the community bank leverage ratio as of December 31, 2025.

Effective April 1, 2026, with early adoption available January 1, 2026, the community bank leverage ratio was reduced to 8%.

At December 31, 2025, First Guaranty and the Bank exceeded all regulatory capital requirements and was considered to be well-capitalized based on FDIC and Federal Reserve Board guidelines.

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Generally, Sections 23A and 23B of the Federal Reserve Act limit the extent to which the bank or its subsidiaries may engage in "covered transactions" with any one affiliate to 10% of such institution's capital stock and surplus and contain an aggregate limit on all such transactions with all affiliates to an amount equal to 20% of such institution's capital stock and surplus.

The term "covered transaction" includes the making of loans, purchase of assets, issuance of a guarantee and similar transactions.

The term "covered transaction" includes the making of loans, purchase of assets, issuance of a guaranty and similar transactions.

In addition, loans or other extensions of credit by the institution to the affiliate are required to be collateralized in accordance with specified requirements.

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First Guaranty Bank's latest FDIC CRA rating, dated October 11, 2022, was "satisfactory."

The federal banking agencies approved additional rules in 2023, which began to take effect on April 1, 2024, aimed at strengthening and modernizing the CRA.

The federal banking agencies approved additional rules in 2023 aimed at strengthening and modernizing the CRA, which were subject to litigation prior to taking effect.

During 2025, the federal banking agencies proposed rules to fully rescind the 2023 rules.

The ultimate scope and timing of any changes to the CRA remains uncertain.

First Guaranty Bank is a member of the FHLB System, which consists of eleven regional FHLBs.

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First Guaranty has elected "financial holding company" status.

In order to remain a financial holding company, a bank holding company and its subsidiary bank must continue to be considered “well capitalized” and “well managed” and its subsidiary bank must have at least a “satisfactory” rating under the Community Reinvestment Act.

Bank holding companies with greater than $3 billion in total consolidated assets are subject to consolidated regulatory capital requirements.

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We have recently experienced an increase in nonperforming assets.

At December 31, 2024, our non-performing assets, which consist of non-performing loans and other real estate owned, were $120.4 million, or 3.03% of total assets, an increase of 188.4% from December 31, 2023.

At December 31, 2025, our non-performing assets, which consist of non-performing loans and other real estate owned, were $95.5 million, or 2.34% of total assets.

Although this represents a decrease from December 31, 2024 levels, our level of non-performing assets remains significantly above our historical levels and above that of many of our peers.

Our non-performing assets adversely affect our net income in various ways:

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If additional borrowers become delinquent and do not pay their loans and we are unable to successfully manage our non-performing assets, our losses and troubled assets could increase significantly, which could have a material adverse effect on our financial condition and results of operations.

Adverse events in Louisiana and Texas, where our business is concentrated, along with our new Mideast markets in Kentucky and West Virginia could adversely affect our results of operations and future growth.

Adverse events in Louisiana, Texas, Kentucky, and West Virginia, where our business is concentrated, could adversely affect our results of operations and future growth.

Our business, the location of our branches and the real estate used as collateral on our real estate loans are primarily concentrated in Louisiana and North Central Texas.

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This could require increasing our allowance for credit losses to address the decrease in the value of the real estate securing our loans which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Our loan portfolio is concentrated within certain industries and borrowing relationships.

Credit risk is primarily related to the risk that a borrower will not be able to repay some or all of its obligations to us.

Concentrations of credit risk occur when the aggregate amount owed by one borrower, a group of related borrowers, or borrowers within the same or related markets, industries or groups, represent a relatively large percentage of the total capital or total credit extended by a bank.

Although each loan in a concentration may be of sound quality, concentration risks represent a risk not present when the same loan amounts are extended to a more diversified group of borrowers.

Loans concentrated in one borrower depend, to a large degree, upon the financial capability and character of the individual borrower.

Loans made to a group of related borrowers can be susceptible to financial problems experienced by one or a few members of that group.

Loans made to borrowers that are part of the same or related industries or groups, or that are located in the same market area, can all be adversely impacted with respect to their ability to repay some or all of their obligations when adverse conditions prevail in the broader economy generally, in the market specifically or even within just the respective industries or groups.

In addition to credit risks resulting from such concentrations, regulators could require that the Bank raise capital, diversify its loan portfolio, or limit further growth in such relationships or industries to mitigate such risks.

As of December 31, 2025, the Bank’s total exposure (including outstanding loans and commitments) to its twenty largest borrower relationships represented approximately 29.6% of the Bank’s loan portfolio.

The majority of these relationships are real estate secured.

Below is a summary of those twenty largest lending relationships:

Top 20 Large Loan Relationships

(in thousands)

Relationship Description Balance Risk Rating No.

Loans Origination Year Location

1 Non-Owner Occupied Commercial Real Estate $ 79,451 Pass 6 2021-2023 West Virginia & Pennsylvania

2 Medical Facilities 46,319 Substandard 11 2008-2022 Louisiana

3 Construction Business 41,380 Substandard 12 2022-2024 Louisiana & Texas

4 Apartment Complex 40,405 Special Mention 1 2021 Louisiana

5 Loan Note Purchaser 39,908 Pass 16 2012-2024 West Virginia

6 Apartment Complex / Hotel Property 37,564 Special Mention 2 2023 Florida

7 Manufacturing Company 34,005 Special Mention 9 2015-2023 Louisiana

8 Owner Occupied Office Building 33,553 Substandard 3 2019-2023 Utah

9 Assisted Living Facility 33,467 Special Mention 1 2025 Alabama

10 Casino 26,434 Pass 11 2020-2023 Louisiana

11 Medical Facilities 23,538 Substandard 2 2020-2021 Arkansas

12 Assisted Living Facility 21,334 Pass / Special Mention 7 2017-2023 Louisiana

13 Oil & Gas 21,096 Pass 1 2020-2022 West Virginia

14 Hotel Property 20,484 Special Mention 2 2022-2023 Texas

15 Non-Owner Occupied Commercial Real Estate 20,400 Pass 27 2013-2021 Louisiana

16 Owner Occupied CRE 20,217 Special Mention 3 2020 Louisiana

17 Hotel Property 19,763 Pass 4 2023 West Virginia

18 Hotel Property 19,379 Pass 1 2020 Texas

19 Hotel Property 17,414 Pass 4 2012-2023 Louisiana

20 Assisted Living Facility 17,234 Pass 4 2019-2022 Louisiana & Mississippi

Our loan portfolio consists of a high percentage of loans secured by non-farm non-residential real estate.

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Emphasis on the origination of short-term loans could expose us to increased lending risks.

At December 31, 2024, $1.2 billion, or 46.2% of our total loans consisted of short-term loans, defined as loans whose payments are typically based on ten to 20-year amortization schedules but have maturities typically ranging from one to five years.

At December 31, 2025, $819.6 million, or 39.6% of our total loans consisted of short-term loans, defined as loans whose payments are typically based on ten to 20-year amortization schedules but have maturities typically ranging from one to five years.

This results in our borrowers having significantly higher final payments due at maturity, known as "balloon payments." In the event our borrowers are unable to make their balloon payments when they are due, we may incur significant losses in our loan portfolio.

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Our bank regulators could require us to implement additional policies and procedures consistent with their interpretation of the guidance that may result in additional costs to us or that may result in a curtailment of our commercial real estate and multifamily lending and/or the requirement that we maintain higher levels of regulatory capital, either of which would adversely affect our loan originations and profitability.

We are subject to regulatory enforcement risk, reputation risk and litigation risk regarding our participation in the PPP and Main Street Lending Program and we are subject to the risk that the SBA may not fund some or all PPP loan guarantees .

We are subject to regulatory enforcement risk, reputation risk and litigation risk regarding our participation in the Paycheck Protection Program ("PPP") and Main Street Lending Program and we are subject to the risk that the SBA may not fund some or all PPP loan guarantees .

The CARES Act included the PPP as a loan program administered through the SBA and the Main Street Lending Program ("MSLP") administered through the U.S.

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The remediation costs and any other financial liabilities associated with an environmental hazard could have a material adverse effect on our financial condition and results of operations.

In addition, certain one-to four-family residential properties securing our loans are located in areas subject to elevated flood risk.

Increases in insurance costs, reduced availability of coverage, or a borrower’s inability to obtain or maintain required hazard or flood insurance may adversely affect borrower performance, collateral values, and loss severity.

Unavailable or insufficient insurance coverage could increase costs or exposure to uninsured losses and have a material adverse effect on financial condition and results of operations.

Risks Related to Interest Rates

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As a result of this rapid increase in interest rates, unrealized losses in First Guaranty's investment securities portfolio increased dramatically and thereby negatively impacted First Guaranty's accumulated other comprehensive income.

These unrealized losses were approximately $73.8 million as of December 31, 2024 compared to $69.1 million as of December 31, 2023 and $80.9 million as of December 31, 2022.

These gross unrealized losses were approximately $55.8 million as of December 31, 2025 compared to $73.8 million as of December 31, 2024 and $69.1 million as of December 31, 2023.

Such losses could be realized into earnings should liquidity needs and/or business strategy necessitate the sale of securities in a loss position, which could adversely affect First Guaranty's financial condition, capital ratios, and results of operations.

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Loss of a large public funds depositor at the end of a contract would negatively impact liquidity.

First Guaranty participates in reciprocal deposit programs that offer expanded deposit insurance for customers with large balances.

First Guaranty utilizes these reciprocal deposit networks to collateralize a large portion of its public funds deposit balances.

A disruption to the use of these programs, including regulatory restrictions, could negatively impact First Guaranty’s liquidity position.

Other primary sources of funds consist of cash flows from operations and maturities and sales of investment securities.

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For the year ended December 31, 2025, our net interest income totaled $86.9 million in comparison to our total noninterest income of $8.5 million earned during the same year.

We do not rely on nontraditional sources of fee income utilized by some community banks, such as fees from sales of insurance, securities or investment advisory products or services.

We do not have nontraditional sources of fee income utilized by some community banks, such as fees from sales of insurance, securities or investment advisory products or services.

The amount of our net interest income is influenced by the overall interest rate environment, competition, and the amount of interest-earning assets relative to the amount of interest-bearing liabilities.

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The largest component of this service charge income is overdraft-related fees.

Management believes that changes in banking regulations pertaining to rules on certain overdraft payments on consumer accounts have and will continue to have an adverse impact on our service charge income.

Additionally, changes in customer behavior, as well as increased competition from other financial institutions, may result in declines in deposit accounts or in overdraft frequency resulting in a decline in service charge income.

Changes in banking regulations pertaining to rules on certain overdraft payments on consumer accounts could have an adverse impact on our service charge income.

Additionally, changes in customer behavior, as well as increased competition from other financial institutions and non-bank competitors, may result in declines in deposit accounts or in overdraft frequency resulting in a decline in service charge income.

A reduction in deposit account fee income could have a material adverse effect on our earnings.

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We may be unable to successfully compete with others for business.

The area in which we operate is considered attractive from an economic and demographic viewpoint, and is a highly competitive banking market.

The banking industry in which we operate is a highly competitive industry, and we have historically faced competition in our markets from other community banks as well as regional and national banks and certain non-bank lenders.

Our market areas are generally considered attractive from an economic and demographic viewpoint, and constitute highly competitive banking markets.

We compete for loans and deposits with numerous regional and national banks and other community banking institutions, as well as other kinds of financial institutions and enterprises, such as securities firms, insurance companies, savings associations, credit unions, mortgage brokers and private lenders.

In recent years, non-bank competitors, particularly fintech companies, have increasingly competed against us, and we expect the competition from such non-bank competitors to increase in the future.

Many competitors have substantially greater resources than we do.

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Risks Related to Operations

We face risks related to our operational, technological and organizational infrastructure.

We face risks related to our operational, technological and organizational infrastructure, including those related to artificial intelligence.

Our ability to grow and compete is dependent on our ability to build or acquire the necessary operational and technological infrastructure and to manage the cost of that infrastructure as we expand.

Similar to other large corporations, operational risk can manifest itself in many ways, such as errors related to failed or inadequate processes, faulty or disabled computer systems, fraud by employees or outside persons and exposure to external events.

Operational risk can manifest itself in many ways, such as errors related to failed or inadequate processes, faulty or disabled computer systems, fraud by employees or outside persons and exposure to external events such as cyber-attacks.

As discussed below, we are dependent on our operational infrastructure to help manage these risks.

In addition, we are heavily dependent on the strength and capability of our technology systems which we use both to interface with our customers and to manage our internal financial systems and other systems.

In addition, we are heavily dependent on the strength and capability of our technology systems, including those provided by third parties, which we use both to interface with our customers and to manage our internal financial systems and other systems.

Our ability to develop and deliver new products that meet the needs of our existing customers and attract new ones depends on the functionality of our technology systems.

The use of artificial intelligence in business is rapidly evolving and the legal and regulatory environment remains uncertain for this new technology.

Additionally, our ability to run our business in compliance with applicable laws and regulations is dependent on these infrastructures.

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Such incidents may result in required notifications to customers and or regulators resulting in reduced reputation and liability to legal proceedings.

Our failure to effectively implement new technologies including artificial intelligence could adversely affect our operations and financial condition.

Our industry is undergoing rapid technological changes with frequent introductions of new technology-driven products and services, including those using artificial intelligence.

Our ability to compete successfully to some extent depends on whether we can implement new technologies to provide products and services to our customers more efficiently while avoiding significant operational challenges that increase our costs or delay full implementation, especially relative to our peers, many of which have greater resources to devote to technological improvements.

The development and use of new technologies present a number of risks and challenges to our business.

For example, we must have or develop in-house capabilities to implement, manage and use the new technologies, or outsource the implementation, management and use of the new technologies to third parties, and develop appropriate internal controls and third-party oversight.

In particular, the business, legal and regulatory environment relating to artificial intelligence is uncertain and rapidly evolving, and could require changes in our approach to artificial intelligence technology and increase our compliance costs and the risk of non-compliance.

The use of artificial intelligence may also increase our exposure to cyber-attacks or other security risks, as discussed above.

Risks Related to Accounting

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We could also be required to apply a new or revised standard retroactively, which may result in our restating our prior period financial statements.

In June 2016, the FASB issued a standard, Financial Instruments – Credit Losses , that significantly changed how banks measure and recognize credit impairment for many financial assets from an incurred loss methodology to a current expected loss model.

The current expected credit loss model requires banks to immediately recognize an estimate of credit losses expected to occur over the remaining life of the financial assets that are in the scope of the standard.

First Guaranty adopted this standard effective January 1, 2023.

We hold certain intangible assets that could be classified as impaired in the future.

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The impairment testing process considers a variety of factors, including macroeconomic conditions, industry and market considerations, cost factors, and financial performance.

If an impairment determination is made in a future reporting period, our earnings and the book value of these intangible assets will be reduced by the amount of the impairment which would adversely affect our financial performance.

During the year ended December 31, 2025, we performed an impairment test that resulted in the impairment of all $12.9 million of goodwill on our books.

The impairment was the result of First Guaranty's stock price trading below book value and the recent increase in credit provisions.

If an impairment determination is made in a future reporting period with respect to our remaining core deposit intangible assets of $2.3 million as of December 31, 2025 or other intangible assets we may acquire in the future, our earnings and the book value of these intangible assets will be reduced by the amount of the impairment which would adversely affect our financial performance.

Failure to maintain effective internal controls over financial reporting in the future could impair our ability to accurately and timely report our financial results or prevent fraud.

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Any failure to maintain, in the future, an effective internal control environment could impact our ability to report our financial results on an accurate and timely basis, which could result in regulatory actions, loss of investor confidence, and adversely impact our business.

As previously reported in Part I, Item 4 of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, management identified a material weakness in our internal control over financial reporting.

Management determined that First Guaranty did not effectively perform controls on a timely basis relating to the loan operations quality control review function for new loans originated during the period.

Several remediation steps were taken which included new leadership, additional staff, and enhanced monitoring processes by the loan department leadership.

Additional testing of controls during the fourth quarter of 2025 was completed.

First Guaranty has concluded that the material weakness has been effectively remediated as of December 31, 2025.

If material weaknesses in internal control over financial reporting are discovered or occur in the future, our consolidated financial statements may contain material misstatements and we could be required to revise or restate our financial results, which could materially and adversely affect our business, results of operations and financial condition, restrict our ability to access the capital markets, require us to expend significant resources to correct the material weakness, subject us to fines, penalties or judgments, harm our reputation, adversely affect the trading price of our common stock, or otherwise cause a decline in investor confidence.

We could recognize losses on securities held in our securities portfolio, particularly if interest rates increase or economic and market conditions deteriorate.

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Factors beyond our control can significantly influence the fair value of securities in our portfolio and can cause potential adverse changes to the fair value of these securities.

For example, fixed-rate securities are generally subject to decreases in market value when interest rates rise, as we experienced in 2022 and 2023, resulting in unrealized losses of $73.8 million as of December 31, 2024.

For example, fixed-rate securities are generally subject to decreases in market value when interest rates rise, as we experienced in 2022 and 2023.

Additional factors include, but are not limited to, rating agency downgrades of the securities, defaults by the issuer or individual borrowers with respect to the underlying securities, and instability in the credit markets.

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Hurricanes or other adverse weather conditions can have an adverse impact on our market areas.

Our market area in Southeast Louisiana is close to New Orleans and the Gulf of Mexico, areas which are susceptible to hurricanes, tropical storms, flooding and other natural disasters and adverse weather conditions which could result in a disruption of our operations and increases in loan losses.

Our market area in Southeast Louisiana is close to New Orleans and the Gulf of America, areas which are susceptible to hurricanes, tropical storms, flooding and other natural disasters and adverse weather conditions which could result in a disruption of our operations and increases in loan losses.

In recent years, hurricanes have affected several of our markets in Southeast Louisiana.

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If we become subject to any regulatory actions, it could have a material adverse effect on our business, results of operations, financial condition and growth prospects.

Certain of our activities require financial holding company status, which is subject to regulatory requirements.

As a bank holding company that has elected to become a financial holding company, we currently engage in certain financial activities in which a bank holding company is not otherwise permitted to engage.

However, to maintain financial holding company status, a bank holding company (and its depository institution subsidiary) must remain “well capitalized” and “well managed.” If a bank holding company ceases to meet these capital and management requirements, there are many penalties it would be faced with, including (i) the Federal Reserve Board may impose limitations or conditions on the conduct of its activities, and (ii) it may not undertake any of the broader financial activities permissible for financial holding companies or acquire a company engaged in such financial activities without prior approval of the Federal Reserve Board.

If a company does not return to compliance within 180 days, which period may be extended, the Federal Reserve Board may require divestiture of such financial activities for which financial holding company status is required.

To the extent we do not meet the requirements to be a financial holding company in the future, there could be a material adverse effect on our business, financial condition and results of operations.

We may be unable to disclose some restrictions or limitations on our operations imposed by our regulators.

From time to time, bank regulatory agencies take supervisory actions that restrict or limit a financial institution’s activities and lead it to raise capital or subject it to other requirements.

Directives issued to enforce such actions may be confidential and thus, in some instances, we are not permitted to publicly disclose these actions.

In addition, as part of our regular examination process, our and our banking subsidiary’s respective regulators may advise us or our banking subsidiaries to operate under various restrictions as a prudential matter.

Any such actions or restrictions, if and in whatever manner imposed, would likely adversely affect our costs and revenues.

Moreover, efforts to comply with any such nonpublic supervisory actions or restrictions may require material investments in additional resources and systems, as well as a significant commitment of managerial time and attention.

As a result, such supervisory actions or restrictions, if and in whatever manner imposed, could have a material adverse effect on our business and results of operations;

and, in certain instances, we may not be able to publicly disclose these matters.

We may be required to raise additional capital in the future, but that capital may not be available when it is needed, or it may only be available on unacceptable terms, which could adversely affect our financial condition and results of operations.

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Curtailment of government guaranteed loan programs could affect a segment of our business, and government agencies may not honor their guarantees if we do not originate loans in compliance with their guidelines.

As of December 31, 2024, $43.2 million, or 1.6% of our total loan portfolio, was comprised of loans where all or some portion of the loans were guaranteed through the SBA, USDA or FSA lending programs, and we intend to grow this segment of our portfolio in the future.

As of December 31, 2025, $72.2 million, or 3.5% of our total loan portfolio, was comprised of loans where all or some portion of the loans were guaranteed through the SBA, USDA or Farm Service Agency ("FSA") lending programs.

From time to time, the government agencies that guarantee these loans reach their internal limits and cease to guarantee loans.

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If our employees do not follow the SBA, USDA or FSA guidelines in originating loans and if our loan review and audit programs fail to identify and rectify such failures, the government agencies that guarantee these loans may refuse to honor their guarantee obligations and we may incur losses as a result.

Risk Associated with an Investment in our Securities

Risks Associated with an Investment in our Securities

An active, liquid market for our securities may not be sustained.

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Our principal shareholders (Marshall T.

Reynolds, William K.

Reynolds, the estate of William K.

Hood and Edgar R.

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We have no obligation to continue paying dividends, and we may change our dividend policy at any time without prior notice to our common shareholders.

In addition, our ability to pay dividends will continue to be subject, among other things, to certain regulatory guidance and/or restrictions.

In addition, our ability to pay dividends will continue to be subject, among other things, to certain regulatory guidance and/or restrictions, including, as noted above, certain regulatory restrictions that we may not be allowed to disclose.

Future dividends, if any, will be declared and paid at the discretion of our board of directors and will depend on a number of factors, including our and First Guaranty Bank’s capital levels.

Subject to certain exceptions, the terms of our senior debt and subordinated debt prohibit us from paying dividends on shares of our capital stock at times when we are deferring the payment of interest on such subordinated debt.

Moreover, our ability to pay dividends on our common stock is limited by the terms of our Series A Preferred Stock, which provide that if we have not paid dividends on the Series A Preferred Stock for the most recently completed dividend period, then no dividend or distribution shall be declared, paid, or set aside for payment on shares of our common stock.

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Factors that would be considered by our board of directors in making this determination include our financial condition, liquidity and capital needs, the impact of current and pending legislation and regulations, economic conditions, our ability to service any equity or debt obligations senior to the Series A Preferred Stock, any credit agreements to which we are a party, tax considerations and such other factors as our board of directors may deem relevant.

In addition, regulatory restrictions, including those which we may not be allowed to disclose, may limit our ability to pay dividends on the Series A Preferred Stock.

Unlike indebtedness, where principal and interest would customarily be payable on specified due dates, in the case of preferred stock like the Series A Preferred Stock dividends are payable only when, as and if authorized and declared by our board of directors or a duly authorized committee of the board and, as a Louisiana corporation and financial holding company, we are subject to restrictions on payments of dividends out of lawfully available funds as described elsewhere in this Annual Report on Form 10-K.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business