BATON ROUGE, LA / ACCESS Newswire / January 23, 2025 / Investar Holding Corporation ("Investar") (NASDAQ:ISTR), the holding company for Investar Bank, National Association (the "Bank"), today announced financial results for the quarter ended December 31, 2024. Investar reported net income of $6.1 million, or $0.61 per diluted common share, for the fourth quarter of 2024, compared to net income of $5.4 million, or $0.54 per diluted common share, for the quarter ended September 30, 2024, and net income of $3.5 million, or $0.36 per diluted common share, for the quarter ended December 31, 2023.

On a non-GAAP basis, core earnings per diluted common share for the fourth quarter of 2024 were $0.65 compared to $0.45 for the third quarter of 2024 and $0.39 for the fourth quarter of 2023. Core earnings exclude certain non-operating items including, but not limited to, loss (gain) on call or sale of investment securities, net, loss on sale or disposition of fixed assets, net, loss on sale of other real estate owned, net, change in the fair value of equity securities, income from a legal settlement, loss on early extinguishment of subordinated debt, and legal settlement expense. As previously indicated, Investar's fourth quarter of 2024 results include $3.1 million in nontaxable noninterest income from bank owned life insurance ("BOLI") death benefit proceeds, which had a favorable impact on our core metrics. Refer to the Reconciliation of Non-GAAP Financial Measures tables for a reconciliation of GAAP to non-GAAP metrics, including the impact of BOLI death benefit proceeds on our core metrics.

Investar's President and Chief Executive Officer John D'Angelo commented:

"Over the past year, Investar has successfully implemented a strategy of consistent, quality earnings through the optimization of our balance sheet, and the fourth quarter results reflect our continued execution. Our net interest margin has begun to stabilize as our cost of funds has decreased. We remained focused on originating higher yielding loans and securing lower cost funding sources that are accretive to our margin. During the fourth quarter, in accordance with our strategy to remix the loan portfolio, we originated and renewed loans, 84% of which were variable-rate loans, at an 8.2% blended interest rate. We also repaid $109 million in borrowings under the Bank Term Funding Program and redeemed $20 million in principal amount of subordinated debt, which contributed to the decrease in our cost of funds. Additionally, despite inflationary pressures, noninterest expenses are closely monitored and remain well-controlled.

Credit quality remained very solid as nonperforming loans represented 0.42% of total loans at December 31, 2024, and we continued to allow higher risk commercial real estate relationships to run off.

We have closely managed our interest-earning assets and funding costs and are actively evaluating potential opportunities to further optimize our balance sheet mix to improve shareholder returns. Our liability sensitive balance sheet is well-positioned in the event of further rate cuts to benefit from the repricing of deposits and short-term borrowings.

As always, we remain focused on shareholder value and returning capital to shareholders. During the year, we paid quarterly dividends totaling $0.41 per share, which represented a 4% increase from the previous year."

Fourth Quarter Highlights

• Return on average assets increased to 0.88% for the quarter ended December 31, 2024 compared to 0.77% for the quarter ended September 30, 2024. Core return on average assets, which includes the impact of BOLI death benefit proceeds, increased to 0.93% for the quarter ended December 31, 2024 compared to 0.63% for the quarter ended September 30, 2024.

• Efficiency ratio improved to 71.00% for the quarter ended December 31, 2024 compared to 75.61% for the quarter ended September 30, 2024. Core efficiency ratio, which includes the impact of BOLI death benefit proceeds, improved to 69.41% for the quarter ended December 31, 2024 compared to 79.33% for the quarter ended September 30, 2024.

• Investar received BOLI death benefit proceeds totaling $5.5 million, and recorded a related $3.1 million in nontaxable noninterest income from BOLI, during the quarter ended December 31, 2024.

• Noninterest expense decreased $0.1 million to $16.1 million for the quarter ended December 31, 2024 compared to $16.2 million for the quarter ended September 30, 2024. Core noninterest expense remained flat at $15.9 million for the quarter ended December 31, 2024 compared to the quarter ended September 30, 2024.

• The overall cost of funds for the quarter ended December 31, 2024 decreased 12 basis points to 3.49% compared to 3.61% for the quarter ended September 30, 2024. The cost of deposits decreased five basis points to 3.40% for the quarter ended December 31, 2024 compared to 3.45% for the quarter ended September 30, 2024.

• Credit quality remained solid with nonperforming loans comprising 0.42% of total loans at December 31, 2024 compared to 0.19% at September 30, 2024.

• Variable-rate loans as a percentage of total loans was 32% at December 31, 2024 compared to 30% at September 30, 2024. During the fourth quarter of 2024, we originated and renewed loans, 84% of which were variable-rate loans, at an 8.2% blended interest rate.

• Consistent with our strategy of optimizing the balance sheet, total loans decreased $30.8 million, or 1.4%, to $2.13 billion at December 31, 2024, compared to $2.16 billion at September 30, 2024. As a result of our strategy, we recognized the benefit of a $0.7 million negative provision for credit losses.

• Total deposits increased $58.5 million, or 2.6%, to $2.35 billion at December 31, 2024 compared to $2.29 billion at September 30, 2024.

• Investar redeemed all of the remaining $20.0 million in principal amount of our 5.125% Fixed-to-Floating Rate Subordinated Notes due 2029 (the "2029 Notes"). The 2029 Notes were to bear interest at a floating rate higher than the fixed rate beginning on December 31, 2024.

• During the fourth quarter of 2024, Investar repaid all of the remaining $109.0 million in borrowings under the Federal Reserve's Bank Term Funding Program ("BTFP"), which contributed to the decrease in our overall cost of funds. The weighted average rate was 4.76% for the quarter ended December 31, 2024.

• Investar's regulatory common equity tier 1 capital ratio increased to 10.85%, or 5.0% at December 31, 2024 compared to 10.33% at September 30, 2024.

Loans

Total loans were $2.13 billion at December 31, 2024, a decrease of $30.8 million, or 1.4%, compared to September 30, 2024, and a decrease of $85.5 million, or 3.9%, compared to December 31, 2023.

The following table sets forth the composition of the total loan portfolio as of the dates indicated (dollars in thousands).

At December 31, 2024, Investar's total business lending portfolio, which consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans, was $976.2 million, a decrease of $6.6 million, or 0.7%, compared to the business lending portfolio of $982.7 million at September 30, 2024, and a decrease of $16.8 million, or 1.7%, compared to the business lending portfolio of $993.0 million at December 31, 2023. The decrease in the business lending portfolio compared to September 30, 2024 is primarily driven by loan amortization in owner-occupied commercial real estate, partially offset by increased loan production by our Commercial and Industrial Division. The decrease in the business lending portfolio compared to December 31, 2023 is primarily driven by loan amortization consistent with our strategy of optimizing the balance sheet, partially offset by conversions of construction and development loans to owner-occupied loans upon completion of construction.

Nonowner-occupied loans totaled $495.3 million at December 31, 2024, a decrease of $4.0 million, or 0.8%, compared to $499.3 million at September 30, 2024, and an increase of $7.2 million, or 1.5%, compared to $488.1 million at December 31, 2023. The decrease in nonowner-occupied loans compared to September 30, 2024 is due to loan amortization and aligns with our strategy to optimize the mix of the portfolio. The increase in nonowner-occupied loans compared to December 31, 2023 is primarily due to a reclassification of a $15.9 million multifamily loan to a nonowner-occupied loan and conversions of construction and development loans to nonowner-occupied loans upon completion of construction, partially offset by loan amortization.

Construction and development loans totaled $154.6 million at December 31, 2024, a decrease of $12.4 million, or 7.4%, compared to $167.0 million at September 30, 2024, and a decrease of $35.8 million, or 18.8%, compared to $190.4 million at December 31, 2023. The decrease in construction and development loans compared to September 30, 2024 and December 31, 2023 is primarily due to conversions to permanent loans upon completion of construction.

Credit Quality

Nonperforming loans were $8.8 million, or 0.42% of total loans, at December 31, 2024, an increase of $4.7 million compared to $4.1 million, or 0.19% of total loans, at September 30, 2024, and an increase of $3.0 million compared to $5.8 million, or 0.26% of total loans, at December 31, 2023. The increase in nonperforming loans compared to September 30, 2024 is mainly attributable to one nonowner-occupied commercial real estate relationship totaling $2.4 million, two owner-occupied commercial real estate relationships totaling $1.3 million, and ten 1-4 family loan relationships totaling $1.3 million, partially offset by paydowns.

The allowance for credit losses was $26.7 million, or 302.8% and 1.26% of nonperforming and total loans, respectively, at December 31, 2024, compared to $28.1 million, or 682.0% and 1.30% of nonperforming and total loans, respectively, at September 30, 2024, and $30.5 million, or 529.3% and 1.38% of nonperforming and total loans, respectively, at December 31, 2023.

Investar recorded a negative provision for credit losses of $0.7 million for the quarter ended December 31, 2024 compared to a negative provision for credit losses of $0.9 million and a provision for credit losses of $0.5 million for the quarters ended September 30, 2024 and December 31, 2023, respectively. The negative provision for credit losses in the quarter ended December 31, 2024 is primarily attributable to a decrease in total loans, aging of existing loans, and an improvement in the economic forecast. The negative provision for credit losses in the quarter ended September 30, 2024 was primarily due to net recoveries of $0.4 million, a decrease in total loans, aging of existing loans, and an improvement in the economic forecast. The provision for credit losses for the quarter ended December 31, 2023 was primarily attributable to loan growth resulting from the purchase of commercial and industrial revolving lines of credit, partially offset by an improvement in the economic forecast.

Deposits

Total deposits at December 31, 2024 were $2.35 billion, an increase of $58.5 million, or 2.6%, compared to $2.29 billion at September 30, 2024, and an increase of $90.2 million, or 4.0%, compared to $2.26 billion at December 31, 2023.

The following table sets forth the composition of deposits as of the dates indicated (dollars in thousands).

The increase in interest-bearing demand deposits and savings deposits at December 31, 2024 compared to September 30, 2024 is primarily the result of organic growth. The decrease in noninterest-bearing demand deposits and money market deposits at December 31, 2024 compared to September 30, 2024 is primarily due to customers drawing down on their existing deposit accounts. The decrease in time deposits at December 31, 2024 compared to September 30, 2024 is primarily due to a reduced emphasis on time deposits. Brokered time deposits decreased to $245.5 million at December 31, 2024 from $271.7 million at September 30, 2024. Investar utilizes brokered time deposits, entirely in denominations of less than $250,000, to secure fixed cost funding and reduce short-term borrowings. At December 31, 2024, the balance of brokered time deposits remained below 10% of total assets, and the remaining weighted average duration was approximately seven months with a weighted average rate of 4.99%. Investar utilizes brokered demand deposits when pricing is more favorable than other short-term borrowings. For the quarter ended December 31, 2024, brokered demand deposits had a weighted average rate of 4.43%.

The increase in interest-bearing demand deposits, money market deposits, and time deposits at December 31, 2024 compared to December 31, 2023 is primarily the result of organic growth. The decrease in noninterest-bearing demand deposits and savings deposits at December 31, 2024 compared to December 31, 2023 is primarily due to customers drawing down on their existing deposit accounts and shifts into interest-bearing deposit products with higher rates.

Stockholders' Equity

Stockholders' equity was $241.3 million at December 31, 2024, a decrease of $4.2 million, or 1.7%, compared to September 30, 2024, and an increase of $14.5 million, or 6.4%, compared to December 31, 2023. The decrease in stockholders' equity compared to September 30, 2024 is primarily attributable to an increase in accumulated other comprehensive loss due to a decrease in the fair value of the Bank's available for sale securities portfolio, partially offset by net income for the quarter. The increase in stockholders' equity compared to December 31, 2023 is primarily attributable to net income for the 12 months ended December 31, 2024, partially offset by an increase in accumulated other comprehensive loss due to a decrease in the fair value of the Bank's available for sale securities portfolio.

Net Interest Income

Net interest income for the fourth quarter of 2024 totaled $17.5 million, a decrease of $0.4 million, or 2.1%, compared to the third quarter of 2024, and a decrease of $1.0 million, or 5.5%, compared to the fourth quarter of 2023. Total interest income was $35.5 million, $36.8 million and $36.7 million for the quarters ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively. Total interest expense was $18.0 million, $19.0 million and $18.2 million for the corresponding periods. Included in net interest income for the quarters ended December 31, 2024, September 30, 2024 and December 31, 2023 is $11,000, $13,000, and $25,000, respectively, of interest income accretion from the acquisition of loans. Also included in net interest income for the quarters ended December 31, 2024, September 30, 2024 and December 31, 2023 are interest recoveries of $11,000, $79,000 and $1.1 million, respectively.

Investar's net interest margin was 2.65% for the quarter ended December 31, 2024, compared to 2.67% for the quarter ended September 30, 2024 and 2.72% for the quarter ended December 31, 2023. The decrease in net interest margin for the quarter ended December 31, 2024 compared to the quarter ended September 30, 2024 was driven by a 13 basis point decrease in the yield on interest-earning assets, partially offset by a 12 basis point decrease in the overall cost of funds. The decrease in net interest margin for the quarter ended December 31, 2024 compared to the quarter ended December 31, 2023 was driven by a nine basis point increase in the overall cost of funds and a two basis point decrease in the yield on interest-earning assets.

The yield on interest-earning assets was 5.38% for the quarter ended December 31, 2024, compared to 5.51% for the quarter ended September 30, 2024 and 5.40% for the quarter ended December 31, 2023. The decrease in the yield on interest-earning assets compared to the quarter ended September 30, 2024 was driven by a 17 basis point decrease in the yield on our loan portfolio. The decrease in the yield on interest-earning assets compared to the quarter ended December 31, 2023 was driven by a six basis point decrease in the yield on our loan portfolio.

Exclusive of the interest income accretion from the acquisition of loans and interest recoveries, discussed above, adjusted net interest margin decreased to 2.64% for the quarter ended December 31, 2024, compared to 2.66% for the quarter ended September 30, 2024 and increased from 2.56% for the quarter ended December 31, 2023. The adjusted yield on interest-earning assets was 5.37% for the quarter ended December 31, 2024 compared to 5.50% and 5.23% for the quarters ended September 30, 2024 and December 31, 2023, respectively. Refer to the Reconciliation of Non-GAAP Financial Measures table for a reconciliation of GAAP to non-GAAP metrics.

The cost of deposits decreased five basis points to 3.40% for the quarter ended December 31, 2024 compared to 3.45% for the quarter ended September 30, 2024 and increased 23 basis points compared to 3.17% for the quarter ended December 31, 2023. The decrease in the cost of deposits compared to the quarter ended September 30, 2024 resulted primarily from both a lower average balance of, and a decrease in rates paid on, brokered time deposits and a decrease in rates paid on time deposits, partially offset by both a higher average balance of, and an increase in rates paid on, interest-bearing demand deposits. The increase in the cost of deposits compared to the quarter ended December 31, 2023 resulted primarily from both a higher average balance of, and an increase in rates paid on, interest-bearing demand deposits and an increase in rates paid on time deposits, partially offset by both a lower average balance of, and a decrease in rates paid on, brokered time deposits.

The cost of short-term borrowings decreased 68 basis points to 3.91% for the quarter ended December 31, 2024 compared to 4.59% for the quarter ended September 30, 2024 and decreased 93 basis points compared to 4.84% for the quarter ended December 31, 2023. Beginning in the second quarter of 2023, the Bank began utilizing the BTFP to secure fixed rate funding for up to a one-year term and reduce short-term Federal Home Loan Bank ("FHLB") advances, which are priced daily. The Bank utilized this source of funding due to its lower rate as compared to FHLB advances, the ability to prepay the obligations without penalty, and as a means to lock in funding. During the fourth quarter of 2024, the Bank repaid all of the remaining $109.0 million in borrowings under the BTFP. The decrease in the cost of short-term borrowings compared to the quarter ended September 30, 2024 resulted primarily from a lower average balance of borrowings under the BTFP. The decrease in the cost of short-term borrowings compared to the quarter ended December 31, 2023 resulted primarily from both a lower average balance of, and a decrease in rates paid on, borrowings under the BTFP, which were driven by a decrease in the Federal Reserve's federal funds rate.

The overall cost of funds for the quarter ended December 31, 2024 decreased 12 basis points to 3.49% compared to 3.61% for the quarter ended September 30, 2024 and increased nine basis points compared to 3.40% for the quarter ended December 31, 2023. The decrease in the cost of funds for the quarter ended December 31, 2024 compared to the quarter ended September 30, 2024 resulted from a decrease in the cost of deposits and both a decrease in the average balance of, and a decrease in the cost of short-term borrowings, partially offset by a higher average balance of deposits. The increase in the cost of funds for the quarter ended December 31, 2024 compared to the quarter ended December 31, 2023 resulted from both a higher average balance of, and an increase in the cost of deposits, partially offset by both a lower average balance of, and a decrease in the cost of short-term borrowings.

Noninterest Income

Noninterest income for the fourth quarter of 2024 totaled $5.2 million, an increase of $1.6 million, or 45.7%, compared to the third quarter of 2024 and an increase of $3.4 million, or 194.2%, compared to the fourth quarter of 2023.

The increase in noninterest income compared to the quarter ended September 30, 2024 is driven by a $3.1 million increase in income from BOLI, partially offset by a $1.1 million decrease in income from legal settlement and a $0.4 million increase in loss on call or sale of investment securities. During the fourth quarter, the Bank received BOLI death benefit proceeds totaling $5.5 million and recorded $3.1 million in income from BOLI. During the third quarter, Investar recorded $1.1 million in income from a legal settlement related to one loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida.

The increase in noninterest income compared to the quarter ended December 31, 2023 is driven by a $3.2 million increase in income from BOLI, a $0.1 million increase in change in the fair value of equity securities, and a $0.1 million increase in other operating income. The increase in other operating income is primarily attributable to a $0.1 million increase in distributions from investments.

Noninterest Expense

Noninterest expense for the fourth quarter of 2024 totaled $16.1 million, a decrease of $0.1 million, or 0.6%, compared to the third quarter of 2024, and an increase of $0.6 million, or 4.1%, compared to the fourth quarter of 2023.

The decrease in noninterest expense for the quarter ended December 31, 2024 compared to the quarter ended September 30, 2024 was driven by a $0.2 million decrease in salaries and employee benefits and a $0.1 million decrease in other operating expenses, partially offset by a $0.2 million increase in loss on early extinguishment of subordinated debt. The decrease in salaries and employee benefits was primarily due to decreases in salaries expense and deferred compensation expense, partially offset by an increase in health insurance claims. During the fourth quarter of 2024, Investar redeemed $20.0 million in principal amount of our 2029 Notes and recognized a loss on early extinguishment of subordinated debt of $0.2 million primarily consisting of unamortized deferred financing costs. The decrease in other operating expenses is primarily due to a decrease in collection and repossession expenses and Federal Deposit Insurance Corporation ("FDIC") assessments, partially offset by an increase in charitable contributions.

The increase in noninterest expense for the quarter ended December 31, 2024 compared to the quarter ended December 31, 2023 was driven by a $0.8 million increase in salaries and employee benefits and a $0.2 million increase in loss on early extinguishment of subordinated debt, partially offset by a $0.2 million decrease in depreciation and amortization and a $0.2 million decrease in other operating expenses. The increase in salaries and employee benefits is primarily due to investment in people with an emphasis on our Texas markets to remix and strengthen our balance sheet and an increase in incentive-based compensation. The decrease in depreciation and amortization is primarily due to the closure of one branch location in the first quarter of 2024. The decrease in other operating expenses is primarily due to a decrease in bank shares tax and a decrease in other real estate expense, partially offset by an increase in charitable contributions.

Taxes

Investar recorded income tax expense of $1.2 million for the quarter ended December 31, 2024, which equates to an effective tax rate of 16.0%, an increase from the effective tax rate of 12.7% for the quarter ended September 30, 2024 and a decrease from the effect tax rate of 18.1% for the quarter ended December 31, 2023. The third quarter 2024 effective tax rate reflected a revision to our estimated 2024 annual effective tax rate to account for the projected increase in nontaxable income from BOLI in the fourth quarter of $3.1 million upon receipt of death benefit proceeds.

Basic and Diluted Earnings Per Common Share

Investar reported basic and diluted earnings per common share of $0.62 and $0.61, respectively, for the quarter ended December 31, 2024, compared to basic and diluted earnings per common share of $0.55 and $0.54, respectively for the quarter ended September 30, 2024, and basic and diluted earnings per common share of $0.36 for the quarter ended December 31, 2023.

About Investar Holding Corporation

Investar, headquartered in Baton Rouge, Louisiana, provides full banking services, excluding trust services, through its wholly-owned banking subsidiary, Investar Bank, National Association. The Bank currently operates 29 branch locations serving Louisiana, Texas, and Alabama. At December 31, 2024, the Bank had 331 full-time equivalent employees and total assets of $2.7 billion.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States of America, or GAAP. These measures and ratios include "tangible common equity," "tangible assets," "tangible equity to tangible assets," "tangible book value per common share," "core noninterest income," "core earnings before noninterest expense," "core noninterest expense," "core earnings before income tax expense," "core income tax expense," "core earnings," "core efficiency ratio," "core return on average assets," "core return on average equity," "core basic earnings per share," and "core diluted earnings per share." We also present certain average loan, yield, net interest income and net interest margin data adjusted to show the effects of excluding interest recoveries and interest income accretion from the acquisition of loans. Management believes these non-GAAP financial measures provide information useful to investors in understanding Investar's financial results, and Investar believes that its presentation, together with the accompanying reconciliations, provide a more complete understanding of factors and trends affecting Investar's business and allow investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and Investar strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. A reconciliation of the non-GAAP financial measures disclosed in this press release to the comparable GAAP financial measures is included at the end of the financial statement tables.

Forward-Looking and Cautionary Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect Investar's current views with respect to, among other things, future events and financial performance. Investar generally identifies forward-looking statements by terminology such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "could," "should," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates," or the negative version of those words or other comparable words.

Any forward-looking statements contained in this press release are based on the historical performance of Investar and its subsidiaries or on Investar's current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by Investar that the future plans, estimates or expectations by Investar will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to Investar's operations, financial results, financial condition, business prospects, growth strategy and liquidity. If one or more of these or other risks or uncertainties materialize, or if Investar's underlying assumptions prove to be incorrect, Investar's actual results may vary materially from those indicated in these statements. Investar does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. These factors include, but are not limited to, the following, any one or more of which could materially affect the outcome of future events:

• the significant risks and uncertainties for our business, results of operations and financial condition, as well as our regulatory capital and liquidity ratios and other regulatory requirements caused by business and economic conditions generally and in the financial services industry in particular, whether nationally, regionally or in the markets in which we operate;

• changes in inflation, interest rates, yield curves and interest rate spread relationships that affect our loan and deposit pricing;

• our ability to successfully execute our near-term strategy to pivot from primarily a growth strategy to a strategy primarily focused on consistent, quality earnings through the optimization of our balance sheet, and our ability to successfully execute a long-term growth strategy;

• our ability to achieve organic loan and deposit growth, and the composition of that growth;

• a reduction in liquidity, including as a result of a reduction in the amount of deposits we hold or other sources of liquidity, which may be caused by, among other things, disruptions in the banking industry similar to those that occurred in early 2023 that caused bank depositors to move uninsured deposits to other banks or alternative investments outside the banking industry;

• our ability to identify and enter into agreements to combine with attractive acquisition candidates, finance acquisitions, complete acquisitions after definitive agreements are entered into, and successfully integrate and grow acquired operations;

• our adoption on January 1, 2023 of ASU 2016-13, and inaccuracy of the assumptions and estimates we make in establishing reserves for credit losses and other estimates;

• changes in the quality or composition of our loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers;

• changes in the quality and composition of, and changes in unrealized losses in, our investment portfolio, including whether we may have to sell securities before their recovery of amortized cost basis and realize losses;

• the extent of continuing client demand for the high level of personalized service that is a key element of our banking approach as well as our ability to execute our strategy generally;

• our dependence on our management team, and our ability to attract and retain qualified personnel;

• the concentration of our business within our geographic areas of operation in Louisiana, Texas and Alabama;

• increasing costs of complying with new and potential future regulations;

• new or increasing geopolitical tensions, including resulting from wars in Ukraine and Israel and surrounding areas;

• the emergence or worsening of widespread public health challenges or pandemics including COVID-19;

• concentration of credit exposure;

• any deterioration in asset quality and higher loan charge-offs, and the time and effort necessary to resolve problem assets;

• fluctuations in the price of oil and natural gas;

• data processing system failures and errors;

• risks associated with our digital transformation process, including increased risks of cyberattacks and other security breaches and challenges associated with addressing the increased prevalence of artificial intelligence;

• risks of losses resulting from increased fraud attacks against us and others in the financial services industry;

• our potential growth, including our entrance or expansion into new markets, and the need for sufficient capital to support that growth;

• the impact of litigation and other legal proceedings to which we become subject;

• competitive pressures in the commercial finance, retail banking, mortgage lending and consumer finance industries, as well as the financial resources of, and products offered by, competitors;

• the impact of changes in laws and regulations applicable to us, including banking, securities and tax laws and regulations and accounting standards, as well as changes in the interpretation of such laws and regulations by our regulators;

• changes in the scope and costs of FDIC insurance and other coverages;

• governmental monetary and fiscal policies; and

• hurricanes, tropical storms, tropical depressions, floods, winter storms, droughts and other adverse weather events, all of which have affected Investar's market areas from time to time; other natural disasters; oil spills and other man-made disasters; acts of terrorism; other international or domestic calamities; acts of God; and other matters beyond our control.

These factors should not be construed as exhaustive. Additional information on these and other risk factors can be found in Part I Item 1A. "Risk Factors" and in the "Special Note Regarding Forward-Looking Statements" in Part II Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Investar's Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission.

For further information contact:

Investar Holding Corporation
John Campbell
Executive Vice President and Chief Financial Officer
(225) 227-2215
John.Campbell@investarbank.com

INVESTAR HOLDING CORPORATION
SUMMARY FINANCIAL INFORMATION
(Amounts in thousands, except share data)
(Unaudited)

⁽¹⁾ Non-GAAP financial measure. See reconciliation.
⁽²⁾ Efficiency ratio represents noninterest expense divided by the sum of net interest income (before provision for credit losses) and noninterest income.

INVESTAR HOLDING CORPORATION
SUMMARY FINANCIAL INFORMATION
(Unaudited)

⁽¹⁾ Non-GAAP financial measure. See reconciliation.
⁽²⁾ Estimated for December 31, 2024.

INVESTAR HOLDING CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
(Unaudited)