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Item 8. Financial Statements and Supplementary Data

2026-03-31 compared with 2025-03-17 · 322 added, 242 removed, 1318 unchanged (30% of the section changed)

Item 8 - Financial Statements and Supplementary Data

Griffith, DeLaney, Hillman & Lett, CPAs, PSC

EisnerAmper LLP

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

To the Shareholders and Board of Directors of

First Guaranty Bancshares, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of First Guaranty Bancshares, Inc.

and Subsidiary (First Guaranty) as of December 31, 2024 and 2023, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively referred to as the financial statements).

We also have audited First Guaranty’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of First Guaranty as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, First Guaranty maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of First Guaranty Bancshares, Inc.

and Subsidiary (the “Company”) as of December 31, 2025, and the related consolidated statements of income, comprehensive income (loss), changes in shareholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025, and the consolidated results of their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

First Guaranty’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on First Guaranty’s financial statements and an opinion on First Guaranty’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to First Guaranty in accordance with the U.S.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the Audit Committee and that:

(i) related to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Allowance for Credit Losses

As described in Notes 1, 5 and 6 to the financial statements, at December 31, 2024, First Guaranty’s total loans were $2.7 billion and the associated allowance for credit losses (ACL) balance was $34.8 million.

The allowance for credit losses is management’s evaluation of expected credit losses over the life of the loans in the portfolio in accordance with Accounting Standards Codification ASC 326:

Financial Instruments – Credit Losses.

First Guaranty uses the discounted cash flow method to estimate expected losses for all of First Guaranty’s loan segments that exhibit similar risk characteristics and loans that do not share risk characteristics are evaluated on an individual basis.

For each loan segment, First Guaranty generates cash flow projections at the instrument level, adjusting payment expectations for estimated prepayment speed, curtailments, time to recovery, probability of default and loss given default.

Additional qualitative adjustments are applied for risk factors that are not considered within the modeling process but are relevant in assessing the expected credit losses within the loan segments.

Consideration is given to the following factors:

changes in lending policies, procedures and strategies;

changes in nature and volume of the portfolio;

staff experience;

changes in volume and trends in classified loans, delinquencies and nonaccruals;

concentration risk;

trends in underlying collateral values;

external factors such as competition, legal and regulatory environment;

changes in the quality of the loan review system;

and economic conditions.

Auditing management’s estimate of the allowances for loan credit losses, and more specifically the qualitative factor adjustments applied in the ACL, is a critical audit matter.

The principal consideration for our determination of the critical audit matter is a high degree of subjectivity of the assumptions utilized in calculating the qualitative reserve component within the model.

Furthermore, certain inputs and assumptions lack observable data and, therefore, applying audit procedures requires a higher degree of auditor judgement and subjectivity due to the nature and extent of audit evidence and effort required to address this matter.

The primary procedures we performed to address the critical audit matter included:

• Obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the reliability and accuracy of data used to calculate and estimate the various components of the ACL including:

◦ Loan data completeness and accuracy,

◦ Grouping of loans by segment,

◦ Model inputs utilized,

◦ Approval of model assumptions selected, and

◦ Qualitative factors have been appropriately identified, are adequately supported, and accurately applied.

• Evaluated and tested the data and inputs utilized within the ACL calculation for completeness and accuracy including mathematical accuracy of the calculation.

• Evaluated the qualitative factors for appropriate identification and application including reasonableness of the basis for adjustment.

• Analyzed the total qualitative factor adjustment applied to each loan segment, in comparison to changes in the Company’s quantitatively driven expected credit losses and loan segments and evaluated the appropriateness of the total qualitative factor adjustments applied in the overall allowance.

As described in Note 8 to the financial statements, First Guaranty’s goodwill totaled $12.9 million as of December 31, 2024.

Goodwill is tested annually for impairment, or more frequently if events or changes in circumstances indicate that the asset might be impaired.

First Guaranty uses significant judgment and assumptions in estimating the fair value of these assets, including comparisons to peers, projections of future cash flows, discount rates, and growth rates.

Given the complexity and subjectivity involved in these estimates, auditing the impairment assessment of goodwill and intangible assets was challenging and required a high degree of auditor judgment.

Our audit procedures related to First Guaranty’s impairment assessment of goodwill and intangible assets included the following:

• We reviewed management’s use of peer data by assessing the validity and adequacy of the data.

• We evaluated the reasonableness of management’s forecasts of future cash flows by comparing them to historical performance, industry trends, and economic conditions.

• We assessed the appropriateness of the discount rates and growth rates used by management by comparing them to independent market data and industry benchmarks.

• We tested the completeness and accuracy of the underlying data used in the impairment analysis.

• We reviewed the sensitivity analyses performed by management to evaluate the impact of changes in key assumptions on the impairment conclusions.

• We evaluated the adequacy of the First Guaranty’s disclosures related to goodwill in the financial statements.

Based on these procedures, we found management’s estimates and assumptions to be reasonable and supported by the available evidence.

We have served as First Guaranty's auditor since 2022.

The Company’s loans held for investment portfolio totaled $2.07 billion as of December 31, 2025, and the allowance for credit losses (“ACL”) on loans held for investment was $40.8 million.

The Company’s unfunded loan commitments totaled $251.1 million as of December 31, 2025, and the reserve for unfunded commitments was $700,000.

These amounts are included in the ACL and reserve for unfunded commitments.

As more fully described in Notes 1 and 6 to the Company’s financial statements, the Company estimates its exposure to expected credit losses as of the balance sheet date, for existing financial instruments held at amortized cost, and off-balance sheet exposures, such as unfunded loan commitments, letters of credit and other financial guarantees that are not unconditionally cancellable by the Company.

The Company measures expected credit losses of financial assets on a collective (pool) basis when the financial assets share similar risk characteristics.

Loans that do not share risk characteristics with a segment are evaluated individually.

We identified the valuation of the ACL as a critical audit matter, as the determination of the ACL requires management to exercise significant judgment and could have a material impact on the Company’s financial statements.

Management must consider numerous subjective factors, including determining portfolio segmentation, qualitative factors used to adjust the calculated allowance for credit losses, loan credit risk grading and identifying loans requiring individual evaluation among others.

As disclosed by management, different assumptions and conditions could result in a materially different amount for the estimate of the ACL.

As such, there is a high degree of auditor judgment and subjectivity, and significant audit effort was required in performing procedures in auditing the ACL.

Addressing the critical audit matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.

The primary procedures we performed to address this critical audit matter included:

• Obtained an understanding of the Company's process for establishing the ACL, including determination of the qualitative factors and reserve assumptions for loans evaluated on an individual basis, and evaluated the process utilized by management to challenge the model results and determine the best estimate of the ACL as of the balance sheet date;

• Evaluated the design and tested the implementation of controls associated with the ACL process including:

◦ reliability and accuracy of data used in the model,

◦ management’s review and approval of the selected qualitative factors,

◦ classifications of loans by loan segment,

◦ identification of problem loans,

◦ risk rating grades assigned to loans, and

◦ management’s review and approval of the ACL;

• Evaluated the appropriateness of the models and methodologies used in quantitative calculations;

• Tested the completeness and accuracy of data used in the estimate;

• Evaluated if qualitative factors were applied based on a comprehensive framework and compared to the adjustments utilized by management to both internal portfolio metrics and external macroeconomic data (as applicable) to support adjustments and evaluate trends in such adjustments based on independently obtained forecasts;

• Verified historical net loss;

• Performed loan reviews in order to evaluate the accuracy of loan credit ratings and reasonableness of specific reserves on individually evaluated loans;

• Evaluated the disclosures in the financial statements.

Identification of Adverse Conditions and Events

Net loss for the year ended December 31, 2025 was $56.0 million, primarily resulting from the goodwill impairment charge of $12.9 million and provision for credit losses of $81.7 million.

The Company’s non-performing assets, which consist of non-performing loans and other real estate owned, were $95.5 million, or 2.34% of total assets as of December 31, 2025.

Management is required to evaluate whether relevant conditions and events, considered in the aggregate, indicate that it is probable the Company will be unable to meet its obligations as they become due and maintain satisfactory regulatory capital within one year after the date the financial statements are issued.

This evaluation involved significant judgment taking into consideration forward‑looking analyses, including liquidity and capital stress testing, which assessed the Company’s ability to meet its obligations under certain adverse conditions such as accelerated deposit outflows, constrained access to secondary liquidity sources, and elevated credit losses within the criticized loan portfolio.

The evaluation of the Company’s ability to meet its obligations, including stress scenarios, required significant judgement with respect to the assumptions associated with depositor behavior, availability of funding sources, and regulatory capital requirements.

Addressing this matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

The primary procedures we performed to address this critical audit matter included:

• Evaluated management’s identification of relevant adverse conditions and events known and reasonably knowable as of the financial statement issuance date that could affect the Company’s ability to meet its obligations and maintain satisfactory regulatory capital within the assessment period;

• Obtained an understanding of the Company’s process for developing its stress testing models and evaluated the results of the model validation performed by a third-party management specialist engaged by management;

• Evaluated the reasonableness of key assumptions used in management’s liquidity and capital stress testing, including assumptions related to deposit runoff and stability, projected credit losses, borrowing capacity, availability and terms of secondary liquidity sources, and compliance with regulatory capital and liquidity thresholds under various stress scenarios;

• Performed independent stress analyses to assess the sensitivity of management’s liquidity and capital projections under further downside scenarios;

• Evaluated management’s liquidity forecasts, including assessments of expected depositor behavior, anticipated cash inflows and outflows, and the impact of projected losses on regulatory capital ratios.

/s/ EisnerAmper LLP

We have served as the Company’s auditor since 2025.

Metairie, Louisiana

March 31, 2026

Griffith, DeLaney, Hillman & Lett, CPAs, PSC

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

First Guaranty Bancshares, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of First Guaranty Bancshares, Inc.

and Subsidiary (First Guaranty) as of December 31, 2024, and the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows, and the related notes (collectively referred to as the financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of First Guaranty as of December 31, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinions

These financial statements are the responsibility of First Guaranty’s management.

Our responsibility is to express an opinion on First Guaranty’s financial statements based on our audit.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

We served as First Guaranty's auditor from 2022 to 2025.

Ashland, Kentucky

10 unchanged sentences

Investment securities:

Available for sale, at fair value 281,097 83,485

Held to maturity, at cost and net of allowance for credit losses of $ 150 and $ 80 (estimated fair value of $ 251,458 and $ 253,584 , respectively)

Available for sale, at fair value (cost of $ 674,139 and $ 284,321 , respectively)

676,592 281,097

Held to maturity, at cost and net of allowance for credit losses of $ 150 (estimated fair value of $ 268,094 and $ 251,458 , respectively)

322,675 321,622

Investment securities 999,267 602,719

Federal Home Loan Bank stock, at cost 10,206 9,706

Loans held for sale — —

Loans, net of unearned income 2,069,802 2,693,780

14 unchanged sentences

Total deposits 3,632,877 3,476,260

Short-term advances from Federal Home Loan Bank — 50,000

Short-term borrowings — 10,000

Repurchase agreements 7,119 7,009

28 unchanged sentences

Securities (including FHLB stock) 25,029 13,925

Federal funds sold — —

Total Interest Income 213,279 221,706

11 unchanged sentences

ATM and debit card fees 2,961 3,132

Net gains on securities — —

Net gains on sale of loans — 1,481

Net gains on sale of assets 13,306 23

Net (losses) gains on sale of assets ( 524 ) 13,306

Other 2,752 3,631

3 unchanged sentences

Occupancy and equipment expense 10,282 10,187

Goodwill impairment 12,900 —

Other 28,597 28,646

Total Noninterest Expense 82,249 77,137

Income Before Income Taxes 16,006 11,896

Provision for income taxes 3,558 2,677

Net Income 12,448 9,219

(Loss) Income Before Income Taxes ( 68,560 ) 16,006

(Benefit) Provision for income taxes ( 12,538 ) 3,558

Net (Loss) Income ( 56,022 ) 12,448

Preferred stock dividends 2,328 2,329

Net Income Available to Common Shareholders $ 10,119 $ 6,890

Net (Loss) Income Available to Common Shareholders $ ( 58,350 ) $ 10,119

Per Common Share:

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(in thousands) 2025 2024

Net Income $ 12,448 $ 9,219

Net (Loss) Income $ ( 56,022 ) $ 12,448

Other comprehensive income:

1 unchanged sentence

Unrealized holding gains arising during the period 7,037 115

Reclassification adjustments for (gains) included in net income — —

Change in unrealized gains on securities 7,037 115

Tax impact ( 24 ) ( 603 )

Tax effect ( 1,478 ) ( 24 )

Other comprehensive income 5,559 91

Comprehensive Income $ 12,539 $ 11,488

Comprehensive (Loss) Income $ ( 50,463 ) $ 12,539

See Notes to Consolidated Financial Statements

9 unchanged sentences

Net income — — — 2,310 — 2,310

Cumulative effect of adoption of ASC Topic 326, net of tax — — — ( 7,900 ) — ( 7,900 )

Other comprehensive income (loss) — — — — 414 414

Common Stock issued under Equity Bonus Plan, 29,293 shares

— 30 304 — — 334

Other comprehensive income — — — — 628 628

Preferred stock dividends — — — ( 582 ) — ( 582 )

3 unchanged sentences

Net income — — — 7,201 — 7,201

Common stock issued in private placement, 714,287 shares

— 714 9,286 — — 10,000

Other comprehensive income (loss) — — — — ( 84 ) ( 84 )

Other comprehensive income — — — — 206 206

Preferred stock dividends — — — ( 582 ) — ( 582 )

3 unchanged sentences

Net income — — — 1,927 — 1,927

Other comprehensive income (loss) — — — — 605 605

Other comprehensive income — — — — 907 907

Preferred stock dividends — — — ( 582 ) — ( 582 )

3 unchanged sentences

Net income — — — 1,010 — 1,010

Common stock issued in private placement, 1,000,000 shares

— 1,000 9,000 — — 10,000

Common stock issued under Equity Bonus Plan, 44,341 shares

— 44 706 — — 750

Other comprehensive income — — — — 1,334 1,334

Other comprehensive income (loss) — — — — ( 1,650 ) ( 1,650 )

Preferred stock dividends — — — ( 582 ) — ( 582 )

8 unchanged sentences

Balance December 31, 2024 $ 33,058 $ 12,505 $ 149,389 $ 72,965 $ ( 12,868 ) $ 255,049

Net income — — — 2,310 — 2,310

Common stock issued under Equity Bonus Plan, 29,293 shares

Net (loss) income — — — ( 6,166 ) — ( 6,166 )

Common Stock issued in private placement, 186,787 shares

— 186 1,395 — — 1,581

4 unchanged sentences

Balance March 31, 2025 $ 33,058 $ 12,691 $ 150,784 $ 66,092 $ ( 11,180 ) $ 251,445

Net income — — — 7,201 — 7,201

Other comprehensive income (loss) — — — — 206 206

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 )

2 unchanged sentences

Balance June 30, 2025 $ 33,058 $ 15,120 $ 167,041 $ 58,078 $ ( 10,209 ) $ 263,088

Net income — — — 1,927 — 1,927

Net (loss) income — — — ( 45,003 ) — ( 45,003 )

Common Stock issued in private placement, 122,503 shares

— 123 864 — — 987

Common Stock issued as payment-in-kind, 110,272 shares

— 110 777 — — 887

Other comprehensive income — — — — 1,849 1,849

4 unchanged sentences

Net income — — — 2,450 — 2,450

Common Stock issued in private placement, 277,787 shares

— 278 1,222 — — 1,500

Common Stock issued as payment-in-kind, 162,699 shares

— 162 717 — — 879

Other comprehensive income — — — — 1,051 1,051

10 unchanged sentences

Cash Flows From Operating Activities:

Net income $ 12,448 $ 9,219

Adjustments to reconcile net income to net cash provided by operating activities:

Net (loss) income $ ( 56,022 ) $ 12,448

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Provision for credit losses 81,729 20,034

Goodwill impairment 12,900 —

Depreciation and amortization 4,290 4,432

Change in right of use asset 509 276

Amortization/Accretion of investments ( 3,126 ) ( 2,556 )

(Gain) loss on sale/call of securities — —

Gain on sale of assets ( 14,535 ) ( 35 )

Loss (gain) on sale of assets 623 ( 14,535 )

Repossessed asset write downs, gains and losses on dispositions 433 397

Interest expense paid-in-kind 2,474 —

FHLB stock dividends ( 500 ) ( 775 )

Change in operating lease liabilities ( 474 ) ( 258 )

Change in other assets and liabilities, net ( 51,116 ) 14,266

Net Cash Provided by Operating Activities 33,729 21,714

Net Cash (Used In) Provided by Operating Activities ( 8,280 ) 33,729

Cash Flows From Investing Activities:

3 unchanged sentences

Proceeds from maturities and calls of HTM securities 970 —

Funds invested in HTM securities ( 970 ) —

Proceeds from sale/redemption of Federal Home Loan Bank stock — 8,724

Funds invested in Federal Home Loan Bank stock — ( 4,265 )

Funds invested in intangibles — ( 100 )

Net decrease (increase) in loans 36,826 ( 234,123 )

Net decrease in loans 516,698 36,826

Purchases of premises and equipment ( 1,696 ) ( 3,044 )

1 unchanged sentence

Proceeds from sales of other real estate owned 142 953

Net Cash Used In Investing Activities ( 142,069 ) ( 206,088 )

Net Cash Provided By (Used In) Investing Activities 129,897 ( 142,069 )

Cash Flows From Financing Activities:

Net increase in deposits 156,617 467,166

Net decrease in federal funds purchased and short-term borrowings ( 59,288 ) ( 80,145 )

Net increase (decrease)in federal funds purchased and short-term borrowings 110 ( 59,288 )

Proceeds of long-term borrowings, net of costs — 29,700

Repayment of long-term borrowings ( 1,008 ) ( 44,030 )

Common stock issued in private placement — 20,000

Proceeds from issuance of common stock 7,046 —

Dividends paid on preferred stock ( 2,329 ) ( 2,328 )

6 unchanged sentences

Acquisition of real estate in settlement of loans $ 30,985 $ 423

Premises transferred to other real estate owned $ 4,352

Common stock issued for stock grants $ — $ 334

Common stock issued for debt conversion $ 15,000 $ —

Common stock issued for payment-in-kind $ 2,474 $ —

Cash Paid During the Period:

11 unchanged sentences

The Bank also maintains an investment portfolio comprised of government, government agency, corporate, and municipal securities.

The Bank has thirty-five banking facilities and fifty-four automated teller machines (ATMs) in Southeast, Southwest, Central and North Louisiana, North Central Texas, Kentucky and West Virginia.

The Bank has thirty banking facilities and forty automated teller machines (ATMs) in Southeast, Southwest, Central and North Louisiana, North Central Texas, Kentucky and West Virginia.

First Guaranty is subject to periodic examination by the Federal Reserve Board, the Federal Deposit Insurance Corporation (“FDIC”), and the Office of Financial Institutions (“OFI”), which assess, among other matters, First Guaranty’s financial condition, capital adequacy, asset quality, earnings, liquidity, management, and compliance with applicable laws and regulations.

As a result of such examinations, regulatory agencies may, when deemed necessary, require corrective actions or impose other supervisory measures.

As presented in the statement of income First Guaranty reported a net loss of $ 56.0 million for the year ended December 31, 2025.

Further, as subsequently disclosed herein, non‑performing assets, consisting of non‑performing loans and other real estate owned, totaled $ 95.5 million as of December 31, 2025.

Summary of significant accounting policies

7 unchanged sentences

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, and the valuation of investment securities.

In connection with the determination of the allowance for credit losses and real estate owned, First Guaranty obtains independent appraisals for significant properties.

9 unchanged sentences

Discounts and premiums related to debt securities are amortized using the effective interest rate method.

On January 1, 2023 the Bank adopted ASC 326, which requires expected credit related losses on available for sale debt securities to be recorded through an allowance for credit losses, while non-credit related losses or declines in fair value continue to be recognized through other comprehensive income.

Under the new guidance, First Guaranty is also required to evaluate held to maturity debt securities for expected credit losses.

Management evaluates securities for impairment at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.

130 unchanged sentences

All of First Guaranty's operations are considered by management to be aggregated into one reportable operating segment.

While the chief decision-makers monitor the revenue streams of the various products and services, the identifiable segments are not material.

While the chief decision-maker monitors the revenue streams of the various products and services, the identifiable segments are not material.

Operations are managed and financial performance is evaluated on a Company-wide basis.

Reclassifications

Certain reclassifications have been made to prior year end financial statements in order to conform to the classification adopted for reporting in 2024.

Recent Accounting Pronouncements

Accounting Standards Adopted in 2025

Accounting Pronouncements Not Yet Adopted

2023-09, "Improvements to Tax Disclosures" ("ASU 2023-09") is intended to enhance the transparency and decision usefulness of income tax disclosures primarily through changes to the rate reconciliation and income taxes paid information.

This update is effective for annual periods beginning after December 15, 2024, though early adoption is permitted.

We do not expect it to have a material effect on First Guaranty's consolidated financial statements.

This update is effective for annual periods beginning after December 15, 2024, though early adoption was permitted.

First Guaranty adopted ASU 2023-09 retrospectively, resulting in expanded disclosures for prior periods presented.

The adoption did not have a material impact on the Company’s consolidated financial statements.

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.

Cash and Due from Banks

1 unchanged sentence

There was no reserve requirement as of December 31, 2025 and 2024.

At December 31, 2024 First Guaranty had three accounts at correspondent banks, excluding the Federal Reserve Bank, that exceeded the FDIC insurable limit of $250,000.

These accounts were over the insurable limit by $ 10.7 million.

At December 31, 2025 First Guaranty had four accounts at correspondent banks, excluding the Federal Reserve Bank, that exceeded the FDIC insurable limit of $250,000.

These accounts exceeded the insurable limit by $ 13.3 million.

At December 31, 2024 First Guaranty had three accounts at correspondent banks, excluding the Federal Reserve Bank, that exceeded the FDIC insurable limit of $250,000.

These accounts were over the insurable limit by $ 1.2 million.

These accounts exceeded the insurable limit by $ 10.7 million.

A summary comparison of securities by type at December 31, 2025 and 2024 is shown below.

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Treasury $ 98,123 $ 26 $ — $ 98,149 $ 147,840 $ 33 $ ( 93 ) $ 147,780

Government Agencies — — — — — — — —

Corporate debt securities 6,500 — ( 51 ) 6,449 12,250 — ( 668 ) 11,582

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Accrued interest receivable on First Guaranty's investment securities was $ 3.0 million and $ 1.4 million at December 31, 2025 and 2024, respectively, and was included in accrued interest receivable on the consolidated balance sheet.

The allowance for credit losses related to the held to maturity portfolio was 0.2 million and $ 0.1 million at December 31, 2024 and 2023, respectively.

Accrued interest receivable is excluded from First Guaranty's estimate of the allowance for credit losses.

The allowance for credit losses related to the held to maturity portfolio was $ 0.2 million for the years ended December 31, 2025 and December 31, 2024.

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.

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Treasuries 2 $ 19,646 $ — — $ — $ — 2 $ 19,646 $ —

Government Agencies — — — — — — — — —

Corporate debt securities 2 1,989 ( 11 ) 4 3,460 ( 40 ) 6 5,449 ( 51 )

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Treasuries 2 $ 48,615 $ ( 93 ) — $ — $ — 2 $ 48,615 $ ( 93 )

Government Agencies — — — — — — — — —

Corporate debt securities 2 1,965 ( 35 ) 12 9,617 ( 633 ) 14 11,582 ( 668 )

Municipal bonds 2 505 ( 4 ) 34 5,406 ( 335 ) 36 5,911 ( 339 )

Collateralized mortgage obligations 8 31,619 ( 446 ) — — — 8 31,619 ( 446 )

Mortgage-backed securities 15 65,089 ( 1,721 ) 6 3,410 ( 210 ) 21 68,499 ( 1,931 )

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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.

Government and Government sponsored enterprises that have unrealized losses attributable to changes in market interest rates are not considered credit impaired.

First Guaranty has the ability and intent to hold these securities until recovery, which may not be until maturity.

There were no charge-offs recognized on securities during the year ended December 31, 2024.

There was one charge-off, net of recovery, of $ 0.1 million recognized on a corporate security during the year ended December 31, 2023.

There was a $ 0.1 million provision for credit losses recognized on securities during each of the years ended December 31, 2024 and 2023.

Gross realized gains on sales of securities were $ 0 for the years ended December 31, 2024 and 2023, respectively.

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 at December 31, 2025.

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 years ended December 31, 2025 and December 31, 2024 .

There were no provisions for credit losses recognized on securities for the year ended December 31, 2025 compared to a $ 0.1 million provision recognized for the year ended 2024.

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.

Gross realized gains on sales of securities were $ 0 for both years ended December 31, 2025 and 2024.

Gross realized losses were $ 0 for the years ended December 31, 2025 and 2024.

The tax applicable to these transactions amounted to $ 0 for 2024 and 2023, respectively.

Proceeds from sales of securities classified as available for sale amounted to $ 0 for the years ended December 31, 2024 and 2023, respectively.

Net unrealized losses on available for sale securities included in accumulated other comprehensive income (loss) ("AOCI"), net of applicable income taxes, totaled $ 7.3 million and $ 12.9 million at December 31, 2025 and 2024.

AOCI included $ 9.3 million and $ 10.4 million of losses related to the amortization of transfers of securities from held to maturity to available for sale at December 31, 2025 and 2024.

Included in the statement of changes in comprehensive income was $ 1.4 million of amortization during the period.

During 2025 and 2024 net gains, net of tax, reclassified out of AOCI into earnings totaled $ 0 .

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Commercial and industrial 228,738 11.0 % 257,518 9.5 %

257,518 9.5 % 334,972 12.1 %

Commercial leases 75,617 3.7 % 220,200 8.2 %

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Total Loans Net of Unearned Income $ 2,069,802 $ 2,693,780

(1) Includes PPP loans fully guaranteed by the SBA of $ 1.6 million and $ 2.8 million at December 31, 2024 and December 31, 2023, respectively.

Accrued interest receivable on First Guaranty's loans totaled $ 9.4 million and $ 13.4 million at December 31, 2025 and December 31, 2024, respectively, and is included in accrued interest receivable on the consolidated balance sheet.

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For the Year Ended December 31,

(in thousands) Beginning Allowance (12/31/2022) ASC 326 Adoption Day 1 Adjustment Charge-offs Recoveries Provision Ending Allowance (12/31/2023)

(in thousands) Beginning Allowance (12/31/2023) Charge-offs Recoveries Provision Ending Allowance (12/31/2024)

Construction & land development $ 5,845 $ ( 39 ) $ 1 $ ( 1,877 ) $ 3,930

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Total Loans Net of Unearned Income $ 2,069,802

All loans individually evaluated for impairment as of December 31, 2024 were considered collateral dependent loans.

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

As of December 31, 2024

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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.

Reportable modifications to borrowers experiencing financial difficulty (MEFD) during the year ended December 31, 2024 consisted of $ 3.0 million term extensions, $ 0.6 million payment delays, and $ 0 with both term extensions and payment delays.

Reportable modifications to borrowers experiencing financial difficulty (MEFD) during the year ended December 31, 2025 consisted of $ 19.1 million term extensions and $ 12.3 million in modification of loan terms.

The bank had $ 0 unfunded commitments to borrowers whose terms have been modified as a reportable MEFD as of December 31, 2025.

As of December 31, 2024, there have been no loans that were modified with in the previous 12 months for which there has been payment default during the period.

As of December 31, 2025, there have been $ 0.8 million in loans that were modified with in the previous 12 months for which there has been payment default during the period.

Premises and Equipment

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Net book value $ 59,585 $ 67,789

During 2025, First Guaranty transferred $ 4.4 million of properties consisting of branches or property for future development to other real estate owned.

An impairment charge of $ 0.1 million was recognized in connection with the transfer.

The properties are held for sale as of December 31, 2025.

Depreciation expense amounted to $ 3.2 million and $ 3.4 million for 2025 and 2024, respectively.

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Goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to impairment testing.

Other intangible assets, such as core deposit intangibles and loan servicing assets, continue to be amortized over their useful lives.

Goodwill represents the purchase price over the fair value of net assets acquired from the Homestead Bancorp in 2007, Premier Bancshares, Inc.

in 2017 and Union Bancshares, Incorporated in 2019.

No impairment charges have been recognized since acquisition.

Goodwill totaled $ 12.9 million at December 31, 2024 and 2023.

First Guaranty is required to conduct testing of goodwill impairment periodically (at least annually) and upon the occurrence of certain triggering events, which are events or circumstances that make it more likely than not that the fair value of its goodwill is below its carrying amount.

Goodwill totaled $ 0 at December 31, 2025 and $ 12.9 million at December 31, 2024.

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, which 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;

therefore, a one-time non-cash impairment charge was recorded.

There were no impairment charges in prior years.

Other intangible assets not subject to amortization totaled $ 0.1 million at December 31, 2025 and 2024.

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Amortization expense relating to purchase accounting intangibles totaled $ 0.7 million for the years ended December 31, 2025 and 2024, respectively.

Amortization expense of the core deposit intangible assets for the next five years is as follows:

Amortization expense of the core deposit intangible assets for their remaining life is as follows:

For the Years Ended Estimated Amortization Expense

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December 31, 2029 $ 177

December 31, 2029 $ 179

Other Real Estate

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Net Other Real Estate Owned and Foreclosed Property $ 35,084 $ 319

Loans secured by one-to-four family residential properties in the process of foreclosure totaled $ 1.4 million as of December 31, 2024.

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.

The properties are held for sale as of December 31, 2025.

Loans secured by one-to-four family residential properties in the process of foreclosure totaled $ 1.8 million and $ 1.4 million as of December 31, 2025 and 2024, respectively.

A schedule of maturities of all time deposits are as follows:

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Total $ 1,839,276

The table above includes $ 657.2 million in brokered deposits for December 31, 2024.

The table above includes $ 1.1 billion in brokered deposits for December 31, 2025.

The aggregate amount of jumbo time deposits, each with a minimum denomination of $250,000 totaled $ 174.7 million and $ 201.0 million at December 31, 2025 and 2024, respectively.

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Long-term debt is summarized as follows:

Senior long-term debt with a commercial bank, priced at floating Wall Street Journal Prime less 50 basis points ( 7.50 % as of December 31, 2024), totaled $ 15.2 million at December 31, 2024 and $ 39.1 million at December 31, 2023.

First Guaranty refinanced this note on October 2023.

First Guaranty pays $ 1.0 million principal plus interest quarterly.

Senior long-term debt, priced at floating Wall Street Journal Prime less 50 basis points ( 6.75 % as of December 31, 2025), totaled $ 14.2 million at December 31, 2025 and $ 15.2 million at December 31, 2024.

First Guaranty refinanced this note with a commercial bank on October 2023, and a related party subsequently purchased the note from the commercial bank in the first quarter of 2025.

In the quarter ended June 30, 2025, the parties amended the note to waive principal payments and permit interest payments in cash or common stock quarterly through March 30, 2026.

On March 20, 2026, the note was further amended to extend the waiver of principal payments and permit quarterly interest payments in cash or common stock through March 31, 2028.

This loan has a contractual maturity date of October 5, 2033.

This long-term debt is secured by a pledge of 86.77 % ( 4,823,899 shares) of First Guaranty's interest in First Guaranty Bank (a wholly owned subsidiary).

Junior subordinated debt, priced at Wall Street Journal Prime plus 75 basis points ( 8.75 % as of December 31, 2024), totaled $ 15.0 million at December 31, 2024 and December 31, 2023.

First Guaranty pays interest quarterly.

The Note is unsecured and ranks junior in right of payment to any senior indebtedness and obligations to general and secured creditors.

The current Note is scheduled to mature on June 21, 2032.

The Note qualifies for treatment as Tier 2 capital for regulatory capital purposes.

Junior subordinated debt, priced at Wall Street Journal Prime plus 75 basis points ( 9.25 % as of December 31, 2024), totaled $ 29.7 million at December 31, 2024 and $ 0 at December 31, 2023.

Junior subordinated debt, priced at Wall Street Journal Prime plus 75 basis points, totaled $ 0 at December 31, 2025 and $ 15.0 million December 31, 2024.

During the quarter ended June 30, 2025, First Guaranty entered into an Exchange Agreement under which the 2022 Note, due June 21, 2032, was exchanged for 1,981,506 shares of newly issued common stock.

Junior subordinated debt, priced at Wall Street Journal Prime plus 75 basis points ( 8.25 % as of December 31, 2025), totaled $ 29.8 million at December 31, 2025 and $ 29.7 million at December 31, 2024.

This note was issued in March of 2024.

First Guaranty pays interest monthly.

During the quarter ended June 30, 2025, First Guaranty entered into an amendment permitting interest to be paid in cash or common stock through March 30, 2026.

On March 20, 2026, the note was further amended to extend this provision through March 31, 2028.

First Guaranty pays interest quarterly.

The Note is unsecured and ranks junior in right of payment to any senior indebtedness and obligations to general and secured creditors.

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2029 — 4,031 —

2030 — 4,031 —

2031 and thereafter — 3,181 30,000

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First Guaranty's capital conservation buffer was 4.52 % at December 31, 2025.

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 First Guaranty and the Bank 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.

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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.

The federal banking agencies set the new Community Bank Leverage Ratio at 9%.

A financial institution can elect to be subject to this new definition.

The new rule took effect on January 1, 2020.

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

The Bank has not elected to follow the Community Bank Leverage Ratio.

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Bank $ 270,796 6.90 % $ 157,010 4.00 % $ 196,263 5.00 %

Consolidated $ 255,904 6.42 % $ 159,330 4.00 % $ 199,162 5.00 %

Consolidated $ 233,136 5.93 % $ 157,333 4.00 % $ 196,667 N/A

Common Equity Tier One Capital:

Bank $ 270,796 12.24 % $ 99,593 4.50 % $ 143,856 6.50 %

Consolidated $ 255,904 7.87 % $ 127,453 4.50 % $ 184,099 6.50 %

Consolidated $ 233,136 9.03 % $ 99,716 4.50 % $ 144,035 N/A

December 31, 2024

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Bank $ 342,634 12.11 % $ 226,395 8.00 % $ 282,994 10.00 %

Consolidated N/A N/A N/A N/A N/A N/A

Consolidated $ 332,125 11.73 % $ 226,583 8.00 % $ 283,229 10.00 %

Tier 1 Capital:

Bank $ 311,413 11.00 % $ 169,796 6.00 % $ 226,395 8.00 %

Consolidated N/A N/A N/A N/A N/A N/A

Consolidated $ 255,904 9.04 % $ 169,937 6.00 % $ 226,583 8.00 %

Tier 1 Leverage Capital:

Bank $ 311,413 7.82 % $ 159,319 4.00 % $ 199,149 5.00 %

Consolidated N/A N/A N/A N/A N/A N/A

Consolidated $ 255,904 6.42 % $ 159,330 4.00 % $ 199,162 N/A

Common Equity Tier One Capital:

Bank $ 311,413 11.00 % $ 127,347 4.50 % $ 183,946 6.50 %

Consolidated N/A N/A N/A N/A N/A N/A

Consolidated $ 255,904 7.87 % $ 127,453 4.50 % $ 184,099 N/A

Dividend Restrictions

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The Bank is restricted under applicable laws in the payment of dividends to an amount equal to current year earnings plus undistributed earnings for the immediately preceding year, unless prior permission is received from the Commissioner of Financial Institutions for the State of Louisiana.

Dividends payable by the Bank in 2025 without permission will be limited to 2025 earnings plus the undistributed earnings of $ 8.1 million from 2024.

Dividends payable by the Bank in 2026 without permission will be limited to 2026 earnings.

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

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There were no participations in loans purchased from affiliated financial institutions included in First Guaranty's loan portfolio in 2025 or 2024.

During the years ended 2024 and 2023, First Guaranty paid approximately $ 0.3 million, respectively, for printing services and supplies and office furniture and equipment to Champion Industries, Inc., of which Mr.

During the years ended 2025 and 2024, First Guaranty paid approximately $ 0.2 million and $ 0.3 million, respectively, for printing services and supplies and office furniture and equipment to Champion Industries, Inc., of which Mr.

Reynolds, the Chairman of First Guaranty's Board of Directors, is President, Chief Executive Officer, Chairman of the Board of Directors and a major shareholder of Champion.

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Smith, and used the proceeds of such issuance to redeem the 2015 Note in full.

The 2022 Note has a ten-year term, maturing on June 21, 2032, is non-callable for the first five years , and bears interest at a floating rate based on the Prime Rate as reported by the Wall Street Journal plus 75 basis points.

During the years ended 2024 and 2023, First Guaranty paid interest of $ 1.4 million and $ 1.2 million, respectively, under the 2022 Note.

The 2022 Note had a ten-year term (non-callable for the first five years ) and bore interest at a floating rate based on the Prime Rate as reported by the Wall Street Journal plus 75 basis points.

During 2024, First Guaranty paid interest of $ 1.4 million on the 2022 Note.

On March 28, 2024, First Guaranty issued a $ 30.0 million subordinated note (the "2024 Note") to Smith & Tate Investment, L.L.C., a company controlled by Edgar Ray Smith III, a director of First Guaranty.

The 2024 Note has a ten-year term, maturing on March 28, 2034, is non-callable for the first five years , and bears interest at a floating rate based on the Prime Rate as reported by the Wall Street Journal plus 75 basis points.

During the year ended 2024, First Guaranty paid interest of $ 1.9 million, under the 2024 Note.

During the years ended 2024 and 2023, First Guaranty paid approximately $ 63,000 and $ 0.1 million, respectively, for the purchase and maintenance of First Guaranty's automobiles to subsidiaries of Hood Automotive Group, of which William K.

Hood, a director of First Guaranty, is President.

During the years ended 2024 and 2023, First Guaranty paid approximately $ 9,300 and $ 0.7 million, respectively, for architectural services in relation to bank branches to Gasaway Gasaway Bankston Architects, of which bank subsidiary board member Andrew B.

During the quarter ended June 30, 2025, First Guaranty entered into an amendment permitting interest to be paid in cash or common stock through March 31, 2026.

On March 20, 2026, the note was further amended to extend this provision through March 31, 2028.

During 2025, First Guaranty issued 248,122 shares as payment-in-kind interest on the 2024 Note.

During 2024, First Guaranty paid interest of $ 1.9 million, on the 2024 Note.

First Guaranty has senior long-term debt (the "Senior Note") with Smith & Tate Investment, L.L.C., a company controlled by Edgar Ray Smith III, a director of First Guaranty.

The note, refinanced in October 2023 and transferred to Smith & Tate in 2025, is priced at floating Wall Street Journal Prime less 50 basis points ( 6.75 % as of December 31, 2025).

The Senior Note totaled $ 14.2 million at December 31, 2025 and $ 15.2 million at December 31, 2024.

This loan has a contractual maturity date of October 5, 2033.

In the quarter ended June 30, 2025, the parties amended the note to waive principal payments and permit interest payments in cash or common stock through March 31, 2026.

On March 20, 2026, the note was further amended to extend the waiver of principal payments and permit quarterly interest payments in cash or common stock through March 31, 2028.

During 2025, First Guaranty paid $ 1.0 million of principal and $ 0.3 million of interest and issued 113,331 shares of common stock as payment-in-kind interest on the Senior Note.

During the years ended 2025 and 2024, First Guaranty paid approximately $ 7,000 and $ 63,000 , respectively, for the purchase and maintenance of First Guaranty's automobiles to subsidiaries of Hood Automotive Group.

Hood Automotive Group was led by William K.

Hood, who served as a director of First Guaranty until his passing in 2025.

During the years ended 2025 and 2024, First Guaranty paid approximately $ 0 and $ 9,300 , respectively, for architectural services in relation to bank branches to Gasaway Gasaway Bankston Architects, of which bank subsidiary board member Andrew B.

Gasaway is part owner.

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First Guaranty owns a 50 % interest in Centurion and accounts for this investment under the equity method.

On June 28, 2024, the Bank consummated a sale-leaseback transaction relating to two stand-alone branches and a portion of the headquarters building which also contains a branch (collectively, the “Properties”).

The Bank sold the Properties to a partnership owned by Marshall T.

Reynolds, William K.

Hood and Edgar R.

Smith III, directors of First Guaranty, for an aggregate cash purchase price of $ 14.7 million.

The Bank also agreed to lease the Properties back from this partnership.

The sale-leaseback transaction resulted in a pre-tax gain of approximately $ 13.3 million, or $ 10.5 million after tax, during 2024.

During the year ended 2025 and 2024, the Bank paid approximately $ 1.3 million and $ 0.6 million to the partnership pursuant to the leasing of the Properties.

Employee Benefit Plans

First Guaranty has an employee savings plan to which employees, who meet certain service requirements, may defer 1 % up to the IRS legal limit of their base salaries, 6 % of which may be matched up to 100 %, at its sole discretion.

Contributions to the savings plan were $ 0 and $ 80,000 in 2024 and 2023, respectively.

On May 19, 2022 the shareholders of First Guaranty adopted the First Guaranty Bank Equity Bonus Plan.

The plan established an equity bonus pool of 80,000 shares.

All full time employees of First Guaranty are eligible to participate.

There were no contributions to the savings plan during 2025 and 2024.

On May 19, 2022 the shareholders of First Guaranty adopted the First Guaranty Bank Equity Bonus Plan, which established an equity bonus pool of 80,000 shares.

All full time employees of First Guaranty were eligible to participate.

In May of 2024, 29,293 shares were distributed to five members of executive management.

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All shares were vested on the date of issuance.

In December 31, 2023, 44,341 shares were distributed to a total of 311 employees.

Grant date fair market value of the shares issued was $ 750,000 .

All shares were vested on the date of issuance.

The plan expired in 2024.

Other Expenses

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(in thousands) 2025 2024

Current $ 3,518 $ 2,857

Deferred 40 ( 180 )

Federal $ ( 73 ) $ 3,178

Total Current ( 490 ) 3,518

Federal ( 11,817 ) 40

State ( 231 ) —

Total Deferred ( 12,048 ) 40

Total $ ( 12,538 ) $ 3,558

(1) For the years presented , Texas, West Virginia and Kentucky make up the taxes in this category.

The following table presents income taxes paid, net of refunds for the periods below:

(in thousands) 2025 2024

Federal $ 4,100 $ —

Total $ 4,150 $ —

The difference between income taxes computed by applying the statutory federal income tax rate and the provision for income taxes in the financial statements is reconciled as follows:

(in thousands except for %) 2024 2023

Statutory tax rate 21.0 % 21.0 %

December 31, 2025 December 31, 2024

(in thousands except for %) Amount Rate Amount Rate

Federal income taxes at statutory rate $ ( 14,398 ) ( 21.0 ) % $ 3,361 21.0 %

State tax, net of federal income tax effect (1)

( 512 ) ( 0.8 ) % 268 1.7 %

Tax exempt municipal income ( 152 ) ( 0.2 ) % ( 146 ) ( 0.9 ) %

State tax expense 340 220

Goodwill impairment not deductible 2,709 4.0 % — — %

Other ( 185 ) ( 0.3 ) % 75 0.4 %

Total $ ( 12,538 ) ( 18.3 ) % $ 3,558 22.2 %

(1) For the years presented , Texas, West Virginia and Kentucky make up the taxes in this category.

Deferred taxes are recorded based upon differences between the financial statement and tax basis of assets and liabilities, and available tax credit carry forwards.

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Allowance for credit losses $ 8,907 $ 7,596

Other real estate owned — 18

Unrealized losses on available for sale securities — 677

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Discount on purchased loans ( 99 ) ( 118 )

Other real estate owned ( 75 ) —

Unrealized gains on available for sale securities ( 515 ) —

Other ( 1,196 ) ( 1,367 )

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Net operating loss carryforwards for income tax purposes were $ 49.7 million and $ 3.9 million as of December 31, 2025 and 2024, respectively.

The carryforwards were acquired in 2017 in the Premier acquisition and expire from 2027 to 2034, and will be utilized subject to annual Internal Revenue Code Section 382 limitations.

The carryforwards were the result of the net operating loss generated in 2025 of $ 46.2 million and amounts acquired in 2017 in the Premier acquisition.

The acquisition related losses expire from 2027 to 2034, and will be utilized subject to annual Internal Revenue Code Section 382 limitations.

The net operating loss generated in 2025 can offset up to 80% of future taxable income and can be carried forward indefinitely.

ASC 740-10, Income Taxes, clarifies the accounting for uncertainty in income taxes and prescribes a recognition threshold and measurement attribute for the consolidated financial statements recognition and measurement of a tax position taken or expected to be taken in a tax return.

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Collateral requirements vary but may include accounts receivable, inventory, property, plant and equipment, residential real estate and commercial properties.

Standby and commercial letters of credit are conditional commitments to guarantee the performance of a customer to a third party.

These guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions.

The majority of these guarantees are short-term, one year or less;

however, some guarantees extend for up to three years .

Standby and commercial letters of credit are conditional commitments to guaranty the performance of a customer to a third party.

These guaranties are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions.

The majority of these guaranties are short-term, one year or less;

however, some guaranties extend for up to three years .

The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities.

Collateral requirements are the same as on-balance sheet instruments and commitments to extend credit.

There were no losses incurred on off-balance sheet commitments in 2024 or 2023.

In accordance with ASC 326, the Bank has recorded an Allowance for Credit Losses on unfunded lending commitments of $ 1.2 million and $ 2.8 million at December 31, 2024 and 2023, respectively.

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

The provision for credit losses on unfunded commitments was a reversal of $ 0.5 million and $ 1.6 million for the years ended December 31, 2025 and 2024, respectively.

The ACL on off-balance-sheet credit exposures total $ 0.7 million at December 31, 2025 and $ 1.2 million at December 31, 2024 and is included in other liabilities on the accompanying consolidated balance sheets.

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.

First Guaranty’s primary leasing activities relate to certain real estate leases of a portion of the main office, certain branches, and certain ATM locations.

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First Guaranty concurrently entered into absolute net lease agreements with the partnership under which First Guaranty will lease each of the properties.

Each of the lease agreements has an initial term of 15 years with specified renewal options.

Each of the lease agreements has an initial term of 15 years.

Annual payments due under the leases total approximately $ 1.3 million.

The sale-leaseback transaction resulted in a pre-tax gain of approximately $ 13.3 million.

First Guaranty recorded operating right-of-use ("ROU") assets and corresponding lease liabilities of $ 11.5 million and $ 11.5 million, respectively.

The discount rate was based on First Guaranty's estimated borrowing costs based on the lease term.

First Guaranty recorded operating right-of-use ("ROU") assets and corresponding lease liabilities of $ 11.5 million and $ 11.5 million, respectively, in connection with the sale-leaseback transaction.

Information concerning First Guaranty’s leases is as follows:

40 unchanged sentences

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.

Those properties were available for sales as of December 31, 2025.

The properties are included in Level 3 as of December 31, 2025.

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.

8 unchanged sentences

While Management believes 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, 2023 to December 31, 2024 was due to a net increase in Treasury bills of $ 98.0 million.

The change in Level 1 securities available for sale from December 31, 2024 to December 31, 2025 was due to a net decrease in Treasury bills of $ 49.6 million.

There were no transfers between Level 1 and 2 securities available for sale from December 31, 2024 to December 31, 2025.

There were no transfers between Level 2 and Level 3 from December 31, 2023 to December 31, 2024.

There were $ 17.1 million in municipal bonds transferred from level Level 2 to Level 3 from December 31, 2024 to December 31, 2025.

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

47 unchanged sentences

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.

11 unchanged sentences

Fair value of the collateral is determined by appraisals or by independent valuation.

Cash Surrender of BOLI.

The cash surrender value of BOLI approximates fair value.

Accrued interest receivable.

12 unchanged sentences

Borrowings are classified within level 3 of the fair value hierarchy.

Other Unrecognized Financial Instruments.

The fair value of commitments to extend credit is estimated using the fees charged to enter into similar legally binding agreements, taking into account the remaining terms of the agreements and customers' credit ratings.

For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates.

The fair values of letters of credit are based on fees charged for similar agreements or on estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date.

At December 31, 2024 and 2023 the fair value of guarantees under commercial and standby letters of credit was not material.

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

6 unchanged sentences

Loans, net 2,029,047 — — 2,025,685 2,025,685

Cash surrender value of BOLI 6,012 — — 6,012 6,012

Accrued interest receivable 12,455 — — 12,455 12,455

Deposits $ 3,632,877 $ — $ — $ 3,643,821 3,643,821

Short-term advances from Federal Home Loan Bank — — — — —

Short-term borrowings — — — — —

Repurchase agreements 7,119 — — 7,160 7,160

11 unchanged sentences

Loans, net 2,658,969 — — 2,508,440 2,508,440

Cash surrender value of BOLI 5,861 — — 5,861 5,861

Accrued interest receivable 14,850 — — 14,850 14,850

Deposits $ 3,476,260 $ — $ — $ 3,475,411 3,475,411

Short-term advances from Federal Home Loan Bank 50,000 — — 50,000 50,000

Short-term borrowings 10,000 — — 10,000 10,000

Repurchase agreements 7,009 — — 7,005 7,005

18 unchanged sentences

Public fund deposits totaled $ 0.9 billion at December 31, 2025.

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.

First Guaranty settled a case in the third quarter of 2021 for $ 1.1 million.

A receivable for $ 0.9 million was recorded for recovery by a claim against First Guaranty's insurer.

During the second quarter of 2024, First Guaranty received $ 0.5 million of the $ 0.9 million receivable.

The remaining $ 0.4 million was written off.

Subsequent Events

On March 10, 2026, First Guaranty and its wholly owned subsidiary, First Guaranty Bank, entered into a definitive purchase and assumption agreement with Armstrong Bank, headquartered in Muskogee, Oklahoma, for the sale of First Guaranty Bank’s Texas operations.

The transaction has been approved by the respective boards of directors of the parties and is expected to close during the third quarter of 2026, subject to customary regulatory approvals and other closing conditions.

Pursuant to the agreement, First Guaranty Bank will exit the Texas market through the sale of its five Texas branch locations, consisting of four branches in the Dallas–Fort Worth metropolitan area and one branch in Waco, Texas.

The transaction is expected to include approximately $ 270 million in deposits and approximately $ 110 million in loans.

The transaction provides for a deposit premium of 7.65 % and is expected to increase First Guaranty Bank’s Tier 1 leverage ratio by approximately 100 basis points upon closing.

On March 20, 2026, First Guaranty entered into a second amendment to its promissory note with Smith & Tate Investment, L.L.C., which further amends the promissory note originally dated October 5, 2023, as previously amended on June 4, 2025.

The second amendment extends the existing waiver of quarterly principal payments from March 31, 2026 through March 31, 2028 and extends First Guaranty’s option during this period to satisfy interest payments either in cash or through the issuance of shares of the Company’s common stock, based on the closing bid price immediately preceding the interest payment date.

Smith & Tate is controlled by Edgar Ray Smith, III, a director and principal shareholder of First Guaranty.

On March 20, 2026, First Guaranty entered into a second amendment to its Floating Rate Subordinated Note due March 28, 2034 with Smith & Tate, which further amended the subordinated note previously amended on June 4, 2025.

The second amendment extends First Guaranty’s ability to elect to satisfy quarterly interest payments either in cash or through the issuance of shares of First Guaranty’s common stock, based on the closing bid price immediately preceding the interest payment date.

Smith & Tate is controlled by Edgar Ray Smith, III, a director and principal shareholder of First Guaranty.

Condensed Parent Company Information

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Total operating expenses 5,462 7,029

Income before income tax benefit and increase in equity in undistributed earnings of subsidiary 2,956 4,007

(Loss) income before income tax benefit and increase in equity in undistributed earnings of subsidiary ( 4,810 ) 2,956

Income tax benefit 1,028 1,352

Income before increase in equity in undistributed earnings of subsidiary 4,308 5,280

Increase in equity in undistributed earnings of subsidiary 8,140 3,939

Net Income $ 12,448 $ 9,219

(Loss) income before (decrease) increase in equity in undistributed earnings of subsidiary ( 3,782 ) 4,308

(Decrease) increase in equity in undistributed earnings of subsidiary ( 52,240 ) 8,140

Net (Loss) Income $ ( 56,022 ) $ 12,448

First Guaranty Bancshares, Inc.

4 unchanged sentences

Adjustments to reconcile net income to net cash provided by operating activities:

Increase in equity in undistributed earnings of subsidiary ( 8,140 ) ( 3,939 )

Decrease (increase) in equity in undistributed earnings of subsidiary 52,240 ( 8,140 )

Depreciation and amortization — —

Net change in other liabilities 484 ( 296 )

Net change in other assets 245 ( 580 )

Net cash provided by operating activities 5,037 4,428

Net change in other assets and liabilities, net 1,974 729

Net cash (used in) provided by operating activities ( 1,808 ) 5,037

Cash flows from investing activities:

4 unchanged sentences

Cash flows from financing activities:

Net (decrease) increase in short-term borrowings ( 10,000 ) ( 10,000 )

Net increase (decrease) in short-term borrowings — ( 10,000 )

Proceeds from long-term borrowings, net of costs — 29,700

3 unchanged sentences

Dividends paid ( 2,888 ) ( 7,455 )

Net cash (used in) provided by financing activities ( 11,451 ) 18,203

Net (decrease) increase in cash and cash equivalents ( 6,414 ) 5,631

Net cash provided by (used in) financing activities 3,150 ( 11,451 )

Net increase (decrease) in cash and cash equivalents 1,342 ( 6,414 )

Cash and cash equivalents at the beginning of the period 2,541 8,955

Cash and cash equivalents at the end of the period $ 3,883 $ 2,541

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.

Item 9 - Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data