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. These leases have all been designated as operating leases. First Guaranty does not lease equipment under operating leases, and does not have leases designated as financing leases.

On June 28, 2024 First Guaranty sold three properties owned by it, two stand-alone branches and a portion of the headquarters building which also contains a branch, to a partnership owned by certain directors of First Guaranty. The aggregate purchase price was approximately $14.7 million. All of the properties are located in Louisiana.

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. 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, in connection with the sale-leaseback transaction.


	Year Ended December 31, 2025		Year Ended December 31, 2024
Weighted-average lease term (in years)	13.3		14.3
Weighted-average discount rate	7.9	%	7.9	%

First Guaranty’s operating lease ROU assets were $11.1 million and $11.6 million at December 31, 2025 and December 31, 2024, respectively, and the related operating lease liabilities were $11.2 million and $11.6 million, respectively. The ROU asset is included in Other Assets on the balance sheet, and the related operating lease liabilities are included in Other liabilities.

Operating lease expense, including short-term leases, is included in occupancy expense in the amount of $1.7 million and $1.1 million for the years ending December 31, 2025 and 2024, respectively. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Cash payment for amounts included in the measurement of lease liabilities of $1.4 million and $0.8 million were included in operating cash flows for the respective years.

The following table reports minimum lease payments under non-cancelable operating leases at December 31, 2025:


(in thousands)
2026	$	1,406
2027	1,406
2028	1,351
2029	1,307
2030	1,326
Thereafter	11,471
Total lease payments	18,267
Less: interest	(7,102)
Present value of lease liabilities	$	11,165