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, and 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.

As a result of the sale-leaseback transaction, First Guaranty recorded operating right-of-use ("ROU") assets and corresponding lease liabilities of $11.5 million and $11.5 million, respectively. Each lease agreement had an initial term of 15 years with specified renewal options, and aggregate annual lease payments totaled approximately $1.3 million. The sale-leaseback transaction resulted in a pre-tax gain of approximately $13.3 million.

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


	Three Months Ended March 31, 2026		Three Months Ended March 31, 2025
Weighted-average lease term (in years)	12.8		14.0
Weighted-average discount rate	7.9	%	7.9	%

First Guaranty’s operating lease ROU assets were $10.9 million and $11.1 million at March 31, 2026 and December 31, 2025, respectively, and the related operating lease liabilities were $10.9 million and $11.2 million, respectively. The ROU asset is included in Other Assets on the balance sheet, and the related operating lease liabilities are included in Other Liabilities.

Operating lease expense, including short-term leases, is included in occupancy expense in the amount of $0.5 million and $0.4 million for the three months ended March 31, 2026 and March 31, 2025, respectively. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Cash payment for amounts included in the measurement of lease liabilities of $0.4 million and $0.4 million were included in operating cash flows for the respective three-month periods.

The following table reports minimum lease payments under non-cancelable operating leases at March 31, 2026:


(in thousands)
2026	$	1,055
2027	1,406
2028	1,351
2029	1,307
2030	1,326
Thereafter	11,471
Total lease payments	17,916
Less: interest	(6,981)
Present value of lease liabilities	$	10,935