What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-11-05 compared with 2025-08-06 · 568 added, 483 removed, 1918 unchanged (35% of the section changed)

3 unchanged sentences

(Amounts in thousands, except share data)

June 30, 2025

September 30, 2025

December 31, 2024

48 unchanged sentences

5,000,000 shares authorized;

none issued or outstanding

6.5 % Series A Non-Cumulative Perpetual Convertible Preferred Stock;

32,500 shares ($ 1,000 liquidation preference) issued and outstanding at September 30, 2025 and none issued and outstanding at December 31, 2024

Common stock, $ 1.00 par value per share;

40,000,000 shares authorized;

9,839,848 and 9,828,413 shares issued and outstanding, respectively

9,825,883 and 9,828,413 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

146,304 146,890

10 unchanged sentences

CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except share data)

Three months ended June 30,

Six months ended June 30,

(Amounts in thousands, except per share data)

Three months ended September 30,

Nine months ended September 30,

INTEREST INCOME

12 unchanged sentences

Service charges on deposit accounts

Loss on call or sale of investment securities, net

Gain (loss) on call or sale of investment securities, net

(Loss) gain on sale or disposition of fixed assets, net

Gain on sale of other real estate owned, net

Gain (loss) on sale of other real estate owned, net

Interchange fees

1 unchanged sentence

Change in the fair value of equity securities

Income from legal settlement

Other operating income

12 unchanged sentences

Income tax expense

EARNINGS PER SHARE

Basic earnings per share

Diluted earnings per share

Preferred stock dividends declared

Net income available to common shareholders

EARNINGS PER COMMON SHARE

Basic earnings per common share

Diluted earnings per common share

Cash dividends declared per common share

3 unchanged sentences

(Amounts in thousands)

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

$ 6,179 $ 5,381 $ 16,966 $ 14,145

Other comprehensive income (loss):

Other comprehensive income:

Investment securities:

Unrealized gain (loss), available for sale, net of tax expense (benefit) of $ 339 , ($ 108 ), $ 1,821 and ($ 1,139 ), respectively

Unrealized gain, available for sale, net of tax expense of $ 1,153 , $ 2,847 , $ 2,974 and $ 1,708 , respectively

4,262 10,523 10,993 6,306

Reclassification of realized loss, available for sale, net of tax benefit of $ 0 , $ 80 , $ 0 and $ 80 , respectively

Total other comprehensive income (loss)

Reclassification of realized (gain) loss, available for sale, net of tax benefit of $ 0 , $ 0 , $ 0 and $ 80 , respectively

( 2 ) ( 1 ) ( 2 ) 302

Total other comprehensive income

4,260 10,522 10,991 6,608

Total comprehensive income

4 unchanged sentences

(Amounts in thousands, except share data)

Comprehensive

Stockholders’

(Loss) Income

Preferred Stock Common Stock Surplus

Retained Earnings Accumulated Other Comprehensive (Loss) Income Total Stockholders’ Equity

Three months ended:

June 30, 2024

September 30, 2024

Balance at beginning of period

2 unchanged sentences

— — ( 7 ) — — ( 7 )

Options exercised

82 1,081 — — 1,163

Dividends declared, $ 0.10 per share

Common stock dividends declared, $ 0.105 per share

— — — ( 1,031 ) — ( 1,031 )

4 unchanged sentences

— — — 5,381 — 5,381

Other comprehensive loss, net

Other comprehensive income, net

— — — — 10,522 10,522

1 unchanged sentence

$ — $ 9,828 $ 146,393 $ 127,860 $ ( 38,539 ) $ 245,542

June 30, 2025

September 30, 2025

Balance at beginning of period

3 unchanged sentences

Options exercised

Dividends declared, $ 0.11 per share

Preferred stock dividends declared, $ 16.25 per share

— — — ( 528 ) — ( 528 )

Common stock dividends declared, $ 0.11 per share

— — — ( 1,081 ) — ( 1,081 )

Preferred stock issuance, net of issuance costs

30,353 — — — — 30,353

Stock-based compensation

7 unchanged sentences

$ 30,353 $ 9,826 $ 146,304 $ 146,178 $ ( 37,366 ) $ 295,295

Comprehensive

Stockholders’

(Loss) Income

Six months ended:

June 30, 2024

Preferred Stock Common Stock Surplus

Retained Earnings Accumulated Other Comprehensive (Loss) Income Total Stockholders’ Equity

Nine months ended:

September 30, 2024

Balance at beginning of period

4 unchanged sentences

— 96 1,263 — — 1,359

Dividends declared, $ 0.20 per share

Common stock dividends declared, $ 0.305 per share

— — — ( 2,996 ) — ( 2,996 )

4 unchanged sentences

— — — 14,145 — 14,145

Other comprehensive loss, net

Other comprehensive income, net

— — — — 6,608 6,608

1 unchanged sentence

$ — $ 9,828 $ 146,393 $ 127,860 $ ( 38,539 ) $ 245,542

June 30, 2025

September 30, 2025

Balance at beginning of period

4 unchanged sentences

— 34 501 — — 535

Dividends declared, $ 0.215 per share

Preferred stock dividends declared, $ 16.25 per share

— — — ( 528 ) — ( 528 )

Common stock dividends declared, $ 0.325 per share

— — — ( 3,195 ) — ( 3,195 )

Preferred stock issuance, net of issuance costs

30,353 — — — — 30,353

Stock-based compensation

11 unchanged sentences

(Amounts in thousands)

Six months ended June 30,

Nine months ended September 30,

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

3 unchanged sentences

Provision for other real estate owned

Net (accretion) amortization of securities

Loss on call or sale of investment securities, net

Net accretion of securities

(Gain) loss on call or sale of investment securities, net

Loss (gain) on sale or disposition of fixed assets, net

4 unchanged sentences

Deferred taxes

Net change in value of bank owned life insurance

Net change in value of BOLI

Amortization of subordinated debt issuance costs

Change in the fair value of equity securities

Income from legal settlement

Net change in:

11 unchanged sentences

Purchases of equity securities at fair value

Net decrease in loans

Net (increase) decrease in loans

Proceeds from sales of other real estate owned

1 unchanged sentence

Purchases of fixed assets

Proceeds from surrender of bank owned life insurance

Purchases of bank owned life insurance

Proceeds from surrender of BOLI

Purchases of BOLI

Purchases of other investments

Distributions from investments

Net cash provided by investing activities

Net cash (used in) provided by investing activities

INVESTAR HOLDING CORPORATION

2 unchanged sentences

Cash flows from financing activities:

Net decrease in customer deposits

Net increase (decrease) in repurchase agreements

Net increase in short-term FHLB advances

Net increase in borrowings under the Bank Term Funding Program

Net increase in customer deposits

Net increase in repurchase agreements

Net decrease in short-term FHLB advances

Net decrease in borrowings under the BTFP

Proceeds from long-term FHLB advances

Repayment of long-term FHLB advances

Cash dividends paid on common stock

1 unchanged sentence

Payments to repurchase common stock

Advanced proceeds from preferred stock offering

Proceeds from preferred stock offering, net of issuance costs

Extinguishment of subordinated debt

12 unchanged sentences

The Company’s primary markets are in south Louisiana, southeast Texas and Alabama.

June 30, 2025

, the Company operated 20 full service branches located in Louisiana, three full service branches located in Texas and six full service branches located in Alabama and had 337 full-time e quivalent employees.

September 30, 2025

, the Company operated 20 full service branches located in Louisiana, three full service branches located in Texas and six full service branches located in Alabama and ha d 329 full-time e quivalent employees.

Basis of Presentation

1 unchanged sentence

Accordingly, they do not include information or footnotes necessary for a complete presentation of financial position, results of operations, and cash flows in conformity with GAAP.

However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial statements have been included.

The results of operations for the three and six month periods ended June 30, 2025 are not necessarily indicative of the results that may be expected for the entire fiscal year.

However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the financial statements have been included.

The results of operations for the three and nine month periods ended September 30, 2025 are not necessarily indicative of the results that may be expected for the entire fiscal year.

These statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2024 , including the notes thereto, which were included as part of the Company’s Annual Report.

19 unchanged sentences

However, the amount of the change that is reasonably possible cannot be estimated.

Other estimates that are susceptible to significant change in the near term relate to the allowance for off-balance sheet credit losses, the fair value of stock-based compensation awards, the determination of other-than-temporary impairments of securities, and the fair value of financial instruments and goodwill.

Other estimates that are susceptible to significant change in the near term relate to the allowance for off-balance sheet credit losses, the fair value of stock-based compensation awards, the determination of an ACL for securities, and the fair value of financial instruments and goodwill.

A changing interest rate environment, elevated levels of inflation and changing U.S.

trade and tariff policies have made certain estimates more challenging, including those discussed above.

Earnings Per Common Share

Basic earnings per share is calculated using the two -class method.

The two -class method is an earnings allocation formula that determines earnings per share separately for common stock and participating securities according to dividends declared and participation rights in undistributed earnings.

Under this method, all earnings distributed and undistributed are allocated to participating securities and common shares based on their respective rights to receive dividends.

Unvested share-based payment awards that contain nonforfeitable rights to dividends are considered participating securities (i.e.

unvested time-vested restricted stock), not subject to performance based measures.

Earnings per common share is computed in accordance with FASB ASC Topic 260, “Earnings Per Share.” Basic earnings per common share is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period.

Diluted earnings per common share is computed by using net income available to common shareholders plus dividends declared on dilutive convertible preferred stock, divided by the sum of 1 ) the weighted average number of shares determined for the basic earnings per common share computation, 2 ) the dilutive effect of stock-based compensation using the treasury stock method, and 3 ) the dilutive effect of convertible preferred stock using the if-converted method.

A reconciliation of the weighted average common shares used in calculating basic earnings per common share and the weighted average common shares used in calculating diluted earnings per common share for the reported periods is provided in Note 2 – Earnings Per Common Share.

INVESTAR HOLDING CORPORATION

22 unchanged sentences

The Company is currently evaluating the provisions of the amendment and the impact on its future consolidated financial statements.

EARNINGS PER SHARE

The following is a summary of the information used in the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2025 and 2024 (in thousands, except share data).

Three months ended June 30,

Six months ended June 30,

Earnings per common share – basic

Net income allocated to common shareholders

EARNINGS PER COMMON SHARE

The following is a summary of the information used in the computation of basic and diluted earnings per common share for the three and nine months ended September 30, 2025 and 2024 (in thousands, except share data).

Three months ended September 30,

Nine months ended September 30,

$ 6,179 $ 5,381 $ 16,966 $ 14,145

Weighted average basic shares outstanding

preferred stock dividends declared

Net income available to common shareholders

$ 5,651 $ 5,381 $ 16,438 $ 14,145

Basic earnings per common share

Weighted average basic shares outstanding

9,830,387 9,828,776 9,835,780 9,808,841

Earnings per common share – diluted

Net income allocated to common shareholders

Dilutive effect of stock-based compensation

149,886 73,672 137,116 83,662

Weighted average basic shares outstanding

Dilutive effect of Series A Preferred Stock

1,547,603 — 521,537 —

Dilutive effect of securities

Weighted average diluted shares outstanding

11,527,876 9,902,448 10,494,433 9,892,503

Total weighted average diluted shares outstanding

Basic earnings per common share

$ 0.57 $ 0.55 $ 1.67 $ 1.44

2 unchanged sentences

The weighted average shares that have an antidilutive effect in the calculation of diluted earnings per common share and have been excluded from the computations above are shown below.

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Stock options

7 unchanged sentences

Amortized Cost

June 30, 2025

September 30, 2025

Obligations of the U.S.

28 unchanged sentences

Procee ds from sales of investment securities classified as AFS and gross gains and losses are summarized below for the periods presented (dollars in thousands).

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Proceeds from sales

4 unchanged sentences

Amortized Cost

June 30, 2025

September 30, 2025

Obligations of state and political subdivisions

11 unchanged sentences

Securities are classified in the consolidated balance sheets according to management’s intent.

The Company had no securities classified as trading as of June 30, 2025 or December 31, 2024 .

The Company had no securities classified as trading as of September 30, 2025 or December 31, 2024 .

INVESTAR HOLDING CORPORATION

3 unchanged sentences

12 Months or More

June 30, 2025

September 30, 2025

Obligations of the U.S.

27 unchanged sentences

$ 25,544 $ ( 361 ) $ 282,120 $ ( 61,309 ) $ 307,664 $ ( 61,670 )

At June 30, 2025 , 679 of the Company’s AFS debt securities had unrealized losses totaling 15.2 % of the individual securities’ amortized cost basis and 13.1 % of the Company’s total amortized cost basis of the AFS investment securities portfolio.

At September 30, 2025 , 686 of the Company’s AFS debt securities had unrealized losses totaling 13.9 % of the individual securities’ amortized cost basis and 11.6 % of the Company’s total amortized cost basis of the AFS investment securities portfolio.

At such date, 609 of the 686 securities had been in a continuous loss position for over 12 months.

2 unchanged sentences

12 Months or More

June 30, 2025

September 30, 2025

Obligations of state and political subdivisions

13 unchanged sentences

The Company has the intent to hold these securities either until maturity or a forecasted recovery, and it is more likely than not that the Company will not have to sell the securities before the recovery of their amortized cost basis.

Due to the nature of the investments, current market prices, and the current interest rate environment, the Company determined that these declines were not attributable to credit losses at June 30, 2025 or December 31, 2024 .

INVESTAR HOLDING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The amortized cost and approximate fair value of investment debt securities, by contractual maturity, are shown below as of June 30, 2025 (dollars in thousands).

The amortized cost and approximate fair value of investment debt securities, by contractual maturity, are shown below as of September 30, 2025 (dollars in thousands).

Actual maturities may differ from contractual maturities due to mortgage-backed securities whereby borrowers may have the right to call or prepay obligations with or without call or prepayment penalties and certain callable bonds whereby the issuer has the option to call the bonds prior to contractual maturity.

1 unchanged sentence

Held to Maturity

June 30, 2025

September 30, 2025

Due within one year

8 unchanged sentences

$ 417,729 $ 370,251 $ 47,834 $ 50,576

Accrued interest receivable on the Company ’ s investment securities was $ 2.1 million and $ 1.9 million at June 30, 2025 and December 31, 2024 , respectively, and is included in “ Accrued interest receivable ” on the accompanying consolidated balance sheets.

At June 30, 2025 , securities with a carrying value of $ 40.8 million were pledged to secure certain deposits, borrowings, and other liabilities, compared to $ 68.1 million in pledged securities at December 31, 2024 .

Accrued interest receivable on the Company ’ s investment securities was $ 2.6 million and $ 1.9 million at September 30, 2025 and December 31, 2024 , respectively, and is included in “ Accrued interest receivable ” on the accompanying consolidated balance sheets.

At September 30, 2025 , securities with a carrying value of $ 65.5 million were pledged to secure certain deposits, borrowings, and other liabilities, compared to $ 68.1 million in pledged securities at December 31, 2024 .

Equity Securities

Equity securities at fair value include marketable securities in corporate stocks and mutual funds and totaled $ 2.6 million at June 30, 2025 and December 31, 2024 .

Equity securities at fair value include marketable securities in corporate stocks and mutual funds and totaled $ 3.3 million and $ 2.6 million at September 30, 2025 and December 31, 2024 , respectively.

Nonmarketable equity securities primarily consist of FHLB stock and FRB stock.

4 unchanged sentences

These investments are carried at cost which approximates fair value.

The balance of nonmarketable equity securities at June 30, 2025 and December 31, 2024 was $ 15.1 million and $ 16.5 million, respectively.

The balance of nonmarketable equity securities at September 30, 2025 and December 31, 2024 was $ 15.3 million and $ 16.5 million, respectively.

INVESTAR HOLDING CORPORATION

2 unchanged sentences

The Company’s loan portfolio consists of the following categories of loans as of the dates presented (dollars in thousands).

June 30, 2025

September 30, 2025

December 31, 2024

10 unchanged sentences

$ 2,150,523 $ 2,125,084

$ 2,106,355 $ 2,125,084

Interest on loans is calculated by using the simple interest method on daily balances of the principal amount outstanding.

Loan origination fees, net of direct loan origination costs and commitment fees, are deferred and amortized as an adjustment to yield over the life of the loan, or over the commitment period, as applicable.

Unamortized premiums and discounts on loans, included in the total loans balances above, were $ 0.1 million at both June 30, 2025 and December 31, 2024 , and unearned income, or deferred fees, on loans was $ 1.1 million and $ 1.0 million at June 30, 2025 and December 31, 2024 , respectively, and is also included in the total loans balance in the table above.

The tables below provide an analysis of the aging of loans as of June 30, 2025 and December 31, 2024 (dollars in thousands).

June 30, 2025

Unamortized premiums and discounts on loans, included in the total loans balances above, were $ 0.1 million at both September 30, 2025 and December 31, 2024 , and unearned income, or deferred fees, on loans was $ 1.3 million and $ 1.0 million at September 30, 2025 and December 31, 2024 , respectively, and is also included in the total loans balance in the table above.

The tables below provide an analysis of the aging of loans as of September 30, 2025 and December 31, 2024 (dollars in thousands).

September 30, 2025

30 - 59 Days Past Due

35 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The tables below provide an analysis of nonaccrual loans as of June 30, 2025 and December 31, 2024 (dollars in thousands).

June 30, 2025

The tables below provide an analysis of nonaccrual loans as of September 30, 2025 and December 31, 2024 (dollars in thousands).

September 30, 2025

Nonaccrual with No Allowance for Credit Loss

32 unchanged sentences

A loan may be returned to accrual status when all the principal and interest amounts contractually due are brought current and payment of future principal and interest amounts contractually due are reasonably assured, which is typically evidenced by a sustained period (at least six months) of repayment performance by the borrower.

No material interest income was recognized in the consolidated statements of income on nonaccrual loans for the six months ended June 30, 2025 and 2024 .

No material interest income was recognized in the consolidated statements of income on nonaccrual loans for the nine months ended September 30, 2025 and 2024 .

Collateral Dependent Loans

4 unchanged sentences

When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized costs basis of the financial asset exceeds the fair value of the underlying collateral less estimated cost to sell.

The Company ’ s collateral dependent loans include all nonaccrual loans shown in the tables above at June 30, 2025 and December 31, 2024 .

The Company ’ s collateral dependent loans include all nonaccrual loans shown in the tables above at September 30, 2025 and December 31, 2024 .

The types of collateral that secure collateral dependent loans are discussed under “Portfolio Segment Risk Factors” below.

18 unchanged sentences

This management mainly involves property maintenance and collection of rents due from tenants.

This type of lending carries a lower level of risk, as compared to other commercial lending.

This type of lending carries a lower level of risk compared to other commercial lending.

In addition, underwriting requirements for multifamily properties are stricter than for other nonowner-occupied property types.

48 unchanged sentences

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The tables below present the Company’s loan portfolio by year of origination, category, and credit quality indicator as of June 30, 2025 and December 31, 2024 (dollars in thousands).

The tables below present the Company’s loan portfolio by year of origination, category, and credit quality indicator as of September 30, 2025 and December 31, 2024 (dollars in thousands).

Loans acquired are shown in the table by origination year.

The Company had an immaterial amount of revolving loans converted to term loans at June 30, 2025 and December 31, 2024 .

June 30, 2025

The Company had an immaterial amount of revolving loans converted to term loans at September 30, 2025 and December 31, 2024 .

September 30, 2025

Revolving Loans

135 unchanged sentences

$ ( 173 ) $ ( 6 ) $ ( 144 ) $ ( 74 ) $ — $ ( 145 ) $ ( 820 ) $ ( 1,362 )

The Company had no loans that were classified as doubtful or loss at June 30, 2025 or December 31, 2024 .

The Company had no loans that were classified as doubtful or loss at September 30, 2025 or December 31, 2024 .

INVESTAR HOLDING CORPORATION

1 unchanged sentence

Loan Participations and Sold Loans

Loan participations and whole loans sold to and servic ed for others are not included in the accompanying consolidated balance sheets, the balances of which we re $ 41.0 million and $ 38.2 million a t June 30, 2025 and December 31, 2024 , respectively.

The unpaid principal balances of these loans were approximate ly $ 220.2 million and $ 175.0 million at June 30, 2025 and December 31, 2024 , respectively.

Loan participations and whole loans sold to and servic ed for others are not included in the accompanying consolidated balance sheets, the balances of which we re $ 44.4 million and $ 38.2 million a t September 30, 2025 and December 31, 2024 , respectively.

The unpaid principal balances of these loans were approximate ly $ 228.4 million and $ 175.0 million at September 30, 2025 and December 31, 2024 , respectively.

Loans to Related Parties

In the ordinary course of business, the Company makes loans to related parties including its executive officers, principal stockholders, directors and their immediate family members, as well as to companies of which these individuals are principal owners.

Loans outstanding to such related party borrowers amounted to approximately $ 35.6 million and $ 43.6 million as of June 30, 2025 and December 31, 2024 , respectively.

No related party loans were classified as nonperforming or nonaccrual at June 30, 2025 or December 31, 2024 .

Loans outstanding to such related party borrowers amounted to approximately $ 35.2 million and $ 43.6 million as of September 30, 2025 and December 31, 2024 , respectively.

No related party loans were classified as nonperforming or nonaccrual at September 30, 2025 or December 31, 2024 .

The table below shows the aggregate principal balance of loans to such related parties as of the dates presented (dollars in thousands).

June 30, 2025

September 30, 2025

December 31, 2024

23 unchanged sentences

The Company made the accounting policy election to exclude accrued interest receivable from the amortized cost of loans and the estimate of the ACL.

Accrued interest receivable on the Company’s loan s was $ 11.9 million and $ 12.5 million a t June 30, 2025 and December 31, 2024 , respectively, and is included in “ Accrued interest receivable ” on the accompanying consolidated balance sheets.

The table below shows a summary of the activity in the ACL for the three and six months ended June 30, 2025 and 2024 (dollars in thousands).

Three months ended June 30,

Six months ended June 30,

Accrued interest receivable on the Company’s loan s was $ 12.1 million and $ 12.5 million a t September 30, 2025 and December 31, 2024 , respectively, and is included in “ Accrued interest receivable ” on the accompanying consolidated balance sheets.

The table below shows a summary of the activity in the ACL for the three and nine months ended September 30, 2025 and 2024 (dollars in thousands).

Three months ended September 30,

Nine months ended September 30,

Balance, beginning of period

6 unchanged sentences

$ 26,470 $ 28,103 $ 26,470 $ 28,103

For the three months ended June 30, 2025 , the $ 0.1 million provision for credit losses on the consolidated statement of income includes a $ 0.2 million provision for loan losses and a $ 31,000 negative provision for unfunded loan commitments.

For the six months ended June 30, 2025 , the $ 3.5 million negative provision for credit losses on the consolidated statement of income includes a $ 3.5 million negative provision for loan losses and a $ 68,000 provision for unfunded loan commitments.

For the three months ended June 30, 2024 , the $ 0.4 million negative provision for credit losses on the consolidated statement of income includes a $ 0.3 million negative provision for loan losses and a $ 0.1 million negative provision for unfunded loan commitments.

For the six months ended June 30, 2024 , the $ 1.8 million negative provision for credit losses on the consolidated statement of income includes a $ 1.7 million negative provision for loan losses and a $ 0.1 million negative provision for unfunded loan commitments.

The provision for credit losses for the three months ended June 30, 2025 was primarily due t o changes in the economic forecast and loan mix.

Th e negative provision for credit losses for the six months ended June 30, 2025 was primarily due t o a $ 3.3 million recovery during the first quarter of 2025 of loans previously charged off as a result of a property insurance settlement related to one loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida.

The negative provision for credit losses for the three months ended June 30, 2024 was primarily due to a decrease in total loans and aging of existing loans.

The negative provision for credit losses for the six months ended June 30, 2024 was primarily due to a decrease in total loans, aging of existing loans, and, to a lesser extent, the completion of our annual CECL allowance model recalibration, which resulted in lower historical loss rates.

For the three months ended September 30, 2025 , the $ 0.1 million provision for credit losses on the consolidated statement of income includes a $ 0.1 million negative provision for loan losses and a $ 0.2 million provision for unfunded loan commitments.

For the nine months ended September 30, 2025 , the $ 3.3 million negative provision for credit losses on the consolidated statement of income includes a $ 3.6 million negative provision for loan losses and a $ 0.3 million provision for unfunded loan commitments.

For the three months ended September 30, 2024 , the $ 0.9 million negative provision for credit losses on the consolidated statement of income includes a $ 0.9 million negative provision for loan losses and a $ 40,000 negative provision for unfunded loan commitments.

For the nine months ended September 30, 2024 , the $ 2.8 million negative provision for credit losses on the consolidated statement of income includes a $ 2.6 million negative provision for loan losses and a $ 0.2 million negative provision for unfunded loan commitments.

The provision for credit losses for the three months ended September 30, 2025 was primarily due t o loan growth partially offset by changes in the economic forecast and loan mix.

Th e negative provision for credit losses for the nine months ended September 30, 2025 was primarily due t o a $ 3.3 million recovery during the first quarter of 2025 of loans previously charged off as a result of a property insurance settlement related to one loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida.

The negative provision for credit losses for the three months 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 negative provision for credit losses for the nine months ended September 30, 2024 was primarily due to net recoveries, a decrease in total loans, aging of existing loans, an improvement in economic forecast, and, to a lesser extent, the completion of the Company ’s annual CECL allowance model recalibration, which resulted in lower historical loss rates.

INVESTAR HOLDING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following tables outline the activity in the ACL by collateral type for the three and six months ended June 30, 2025 and 2024 , and show both the allowance and portfolio balances for loans individually and collectively evaluated for impairment as of June 30, 2025 and 2024 (dollars in thousands).

Three months ended June 30, 2025

The following tables outline the activity in the ACL by collateral type for the three and nine months ended September 30, 2025 and 2024 , and show both the allowance and portfolio balances for loans individually and collectively evaluated for impairment as of September 30, 2025 and 2024 (dollars in thousands).

Three months ended September 30, 2025

Construction & Development

10 unchanged sentences

$ 1,281 $ 6,238 $ 1,862 $ 5 $ 11,626 $ 5,373 $ 85 $ 26,470

Three months ended June 30, 2024

Three months ended September 30, 2024

Construction & Development

10 unchanged sentences

$ 1,317 $ 5,782 $ 1,225 $ 8 $ 12,319 $ 7,350 $ 102 $ 28,103

Six months ended June 30, 2025

Nine months ended September 30, 2025

Construction & Development

21 unchanged sentences

$ 140,561 $ 382,445 $ 130,232 $ 3,996 $ 922,541 $ 560,763 $ 9,985 $ 2,150,523

Six months ended June 30, 2024

Nine months ended September 30, 2024

Construction & Development

26 unchanged sentences

Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is written off.

During the six months ended June 30, 2025 and 2024 , the Company did not provide any modifications under these circumstances to borrowers experiencing financial difficulty.

During the nine months ended September 30, 2025 and 2024 , the Company did not provide any modifications under these circumstances to borrowers experiencing financial difficulty.

INVESTAR HOLDING CORPORATION

1 unchanged sentence

STOCKHOLDERS ’ EQUITY

Series A Preferred Stock

July 1, 2025, the Company completed a private placement of

32,500 shares of its newly designated Series A Preferred Stock at a purchase price of

$ 1,000 per share pursuant to securities purchase agreements (collectively, the “Securities Purchase Agreements”) with certain institutional and other accredited investors, for aggregate gross proceeds to the Company o

f $ 32.5 million.

The net proceeds of the private placement were approximately $ 30.4 million, after deducting placement agent fees and other offering related expenses.

The Company intends to use the net proceeds from the private placement to support the acquisition of WFB and for general corporate purposes, including organic growth and other potential acquisitions.

The Series A Preferred Stock is intended to qualify as additional Tier 1 capital of the Company.

The relative preferences, rights and limitations of the Series A Preferred Stock are set forth in the Company’s Restated Articles of Incorporation, as amended by the Articles of Amendment effective as of

June 30, 2025 ( as amended, the “Restated Articles”).

6.5 % on the liquidation preference of

$ 1,000 per share, payable in arrears on

October 1 of each year commencing on

October 1, 2025.

Subject to certain exceptions, the Company is prohibited from paying dividends on, or repurchasing or redeeming its common stock, unless full dividends for the Series A Preferred Stock’s most recently completed dividend period have been declared and paid on all outstanding shares of Series A Preferred Stock.

47.619 shares of common stock per share of Series A Preferred Stock (subject to certain adjustments) (the “Conversion Rate”), plus cash in lieu of fractional shares of common stock.

The maximum number of shares of common stock that

may be issued upon conversion is

1,600,000 (subject to certain adjustments as described in the Restated Articles).

In addition, subject to certain conditions, on or after

July 1, 2028, the Company will have the right, at its option, from time to time on any dividend payment date, to cause some or all of the Series A Preferred Stock to be converted into shares of the Company’s common stock at the Conversion Rate if, for

20 trading days within a period of

30 consecutive trading days, the closing price of the Company’s common stock exceeds

$ 26.25 per share (subject to certain adjustments).

The Series A Preferred Stock has

no maturity date and is perpetual unless redeemed by the Company or converted in accordance with the Restated Articles.

Subject to certain conditions, the Company

may redeem, from time to time, in whole or in part, shares of Series A Preferred Stock on any dividend payment date occurring on or after

July 1, 2030 at a redemption price of

$ 1,000 per share, plus all declared but unpaid dividends thereon, without regard to, or accumulation of, any undeclared dividends.

Holders of the Series A Preferred Stock have

no voting rights, except with respect to certain changes in the terms of the Series A Preferred Stock, certain fundamental business transactions and as otherwise required by applicable law.

$ 1,000 per share of, plus all declared but unpaid dividends thereon, without regard to, or accumulation of, any undeclared dividends, and (ii) the amount that such holder would have received in respect of the common stock issuable upon conversion of the Series A Preferred Stock had such holder converted such share of Series A Preferred Stock immediately prior to such time.

$ 1,000 per share, plus all declared but unpaid dividends thereon, without regard to, or accumulation of, any undeclared dividends, and (ii) the amount equal to the distribution amount of such assets or proceeds of the Company as was receivable by a holder of the number of shares of the Company’s common stock into which such share of Series A Preferred Stock was convertible immediately prior to such Reorganization Event.

The Securities Purchase Agreements contain representations and warranties, covenants, and indemnification provisions that are customary for private placements of shares of convertible preferred stock by companies that have securities registered with the SEC.

In connection with the execution of the Securities Purchase Agreements, the Company and each of the purchasers entered into a Registration Rights Agreement, pursuant to which the Company agreed at its expense, subject to certain exceptions, to file with the SEC a registration statement to register the resale of the shares of the Company’s common stock issuable to the holders of the Series A Preferred Stock upon conversion thereof.

not assigned to the transferee of the securities, (iv) are sold in accordance with Rule

144 promulgated under the Securities Act (“Rule

144” ), or (v) become eligible for resale without volume or manner-of-sale restrictions under Rule

144 (or any successor rule then in effect) and without the requirement for the Company to be in compliance with the current public information requirement under Rule

The Company filed a Registration Statement on Form S- 3 with the SEC on September 2, 2025 registering the resale from time to time by the stockholders named therein of the shares of Company common stock issuable upon conversion of shares of Series A Preferred Stock.

The Registration Statement was declared effective by the SEC on September 17, 2025.

Accumulated Other Comprehensive (Loss) Income

Activity within the balances in accumulated other comprehensive (loss) income, net is shown in the table below (dollars in thousands).

Three months ended June 30,

Three months ended September 30,

Beginning of Period

4 unchanged sentences

$ ( 36,701 ) $ 4,262 $ ( 32,439 ) $ ( 43,844 ) $ 10,523 $ ( 33,321 )

Reclassification of realized (gain) loss, AFS, net

Reclassification of realized gain, AFS, net

( 4,926 ) ( 2 ) ( 4,928 ) ( 5,218 ) ( 1 ) ( 5,219 )

2 unchanged sentences

$ ( 41,626 ) $ 4,260 $ ( 37,366 ) $ ( 49,061 ) $ 10,522 $ ( 38,539 )

Six months ended June 30,

Nine months ended September 30,

Beginning of Period

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however, only the Compensation Committee may approve the terms of equity awards to the Company’s executive officers and directors.

At June 30, 2025 , approximately 205,635 shares remain available for grant under the plan.

At September 30, 2025 , approximately 208,197 shares remain available for grant under the plan.

Stock Options

The Company grants stock options to key personnel that vest in one - fifth increments on each of the first five anniversaries of the grant date, and the maximum option term cannot exceed ten years measured from the grant date.

The Company uses a Black-Scholes option pricing model to estimate the fair value of stock-based awards.

1 unchanged sentence

Expected volatility was determined based on the historical volatilities of the Company.

The table below shows the assumptions used for the stock options granted during the six months ended June 30, 2024 .

The Company did not grant any stock options during the six months ended June 30, 2025 .

The table below shows the assumptions used for the stock options granted during the nine months ended September 30, 2024 .

The Company did not grant any stock options during the nine months ended September 30, 2025 .

Dividend yield

3 unchanged sentences

Weighted average grant date fair value

Stock option expense of $ 32,000 and $ 0.1 million is included in “Salaries and employee benefits” in the accompanying consolidated statements of income for the three and six months ended June 30, 2025 , respectively, and $ 40,000 and $ 0.1 million for the three and six months ended June 30, 2024 , respectively.

At June 30, 2025 , there was $ 0.3 million of unrecognized compensation cost related to stock options that is expected to be recognized over a weighted-average period of 2.9 years.

Stock option expense of $ 32,000 and $ 0.1 million is included in “Salaries and employee benefits” in the accompanying consolidated statements of income for the three and nine months ended September 30, 2025 , respectively, and $ 41,000 and $ 0.1 million for the three and nine months ended September 30, 2024 , respectively.

At September 30, 2025 , there was $ 0.3 million of unrecognized compensation cost related to stock options that is expected to be recognized over a weighted-average period of 2.7 years.

The table below summarizes the Company’s stock option activity for the periods presented.

Six months ended June 30,

Nine months ended September 30,

Number of Options

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Historically, the Company granted restricted stock awards to Plan participants.

Beginning in 2019, the Company began granting time vested RSUs to its non-employee directors and certain officers of the Company instead, with vesting terms ranging from two years to five years.

Beginning in 2019, the Company began granting time-vesting RSUs to its non-employee directors and certain officers of the Company, with vesting terms ranging from two years to five years.

The RSUs do not have voting rights and do not receive dividends or dividend equivalents.

3 unchanged sentences

Upon vesting of RSUs, the benefit of tax deductions in excess of recognized compensation expense is reflected as an income tax benefit in the consolidated statements of income.

Compensation expense related RSUs of $ 0.5 million and $ 0.9 million is included in the accompanying consolidated statements of income for the three and six months ended June 30, 2025 , respectively, and $ 0.5 million and $ 0.8 million for the three and six months ended June 30, 2024 , respectively.

Compensation expense related RSUs of $ 0.5 million and $ 1.4 million is included in the accompanying consolidated statements of income for the three and nine months ended September 30, 2025 , respectively, and $ 0.5 million and $ 1.3 million for the three and nine months ended September 30, 2024 , respectively.

The unearned compensation related to these awards is amortized to compensation expense over the vesting period.

As of June 30, 2025 , unearned stock-based compensation cost associated with these awards totaled approximately $ 5.3 million and is expected to be recognized over a weighted average period of 3.6 years.

As of September 30, 2025 , unearned stock-based compensation cost associated with these awards totaled approximately $ 4.8 million and is expected to be recognized over a weighted average period of 3.4 years.

The following table summarizes the RSU activity for the periods presented.

Six months ended June 30,

Nine months ended September 30,

Weighted Average Grant Date Fair Value

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Conversely, securities were pledged to the counterparties by the Company in an amount greater than or equal to the loss position of the derivative contracts, if applicable.

There were no assets or liabilities recorded in the accompanying consolidated balance sheets at June 30, 2025 or December 31, 2024 associated with the swap contracts, other than interest rate swaps related to customer loans, described below.

There were no assets or liabilities recorded in the accompanying consolidated balance sheets at September 30, 2025 or December 31, 2024 associated with the swap contracts, other than interest rate swaps related to customer loans, described below.

Customer Derivatives – Interest Rate Swaps

5 unchanged sentences

however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by FASB ASC Topic 820, “ Fair Value Measurement ” (“ASC 820” ).

The Company did not recognize any net gains or losses in other operating income resulting from fair value adjustments of these swap agreements during the three and six months ended June 30, 2025 and 2024 .

The table below presents the notional amounts and fair values of the Company’s derivative financial instruments as well as their classification on the accompanying consolidated balance sheets at June 30, 2025 and December 31, 2024 (dollars in thousands).

The Company did not recognize any net gains or losses in other operating income resulting from fair value adjustments of these swap agreements during the three and nine months ended September 30, 2025 and 2024 .

The table below presents the notional amounts and fair values of the Company’s derivative financial instruments as well as their classification on the accompanying consolidated balance sheets at September 30, 2025 and December 31, 2024 (dollars in thousands).

Derivative Assets (2)

Derivative Liabilities (2)

June 30, 2025

September 30, 2025

Interest rate swaps

3 unchanged sentences

$ 373,845 $ 17,195 $ 17,195

( 1 ) At June 30, 2025 the Company had notional amounts of $ 185.6 million in interest rate swap contracts with customers and $ 185.6 million in offsetting interest rate swap contracts with other financial institutions.

( 1 ) At September 30, 2025 the Company had notional amounts of $ 183.1 million in interest rate swap contracts with customers and $ 183.1 million in offsetting interest rate swap contracts with other financial institutions.

At December 31, 2024 the Company had notional amounts of $ 186.9 million in interest rate swap contracts with customers and $ 186.9 million in offsetting interest rate swap contracts with other financial institutions.

14 unchanged sentences

In accordance with ASC 820, these investments are measured at fair value using the net asset value practical expedient and are not required to be classified in the fair value hierarchy.

At both June 30, 2025 and December 31, 2024 , the fair values of these investments were $ 3.8 million and are included in “Other assets” in the accompanying consolidated balance sheets.

At both September 30, 2025 and December 31, 2024 , the fair values of these investments were $ 3.8 million and are included in “Other assets” in the accompanying consolidated balance sheets.

Fair Value Hierarchy

19 unchanged sentences

as well as other reference data.

At June 30, 2025 and December 31, 2024 , substantially all of the Company’s level 3 investments were obligations of state and political subdivisions.

At September 30, 2025 and December 31, 2024 , substantially all of the Company’s level 3 investments were obligations of state and political subdivisions.

The Company estimated the fair value of these level 3 investments using discounted cash flow models, the key inputs of which are the coupon rate, current spreads to the yield curves, and expected repayment dates, adjusted for illiquidity of the local municipal market and sinking funds, if applicable.

Option-adjusted models may be used for structured or callable notes, as appropriate.

Derivative Financial Instruments – The fair value for interest rate swap agreements is based upon the amounts required to settle the contracts.

Derivative Financial Instruments – The fair value for interest rate swap agreements is based upon the expected future cash flows of the agreements discounted at market rates.

These derivative instruments are classified in level 2 of the fair value hierarchy.

3 unchanged sentences

Estimated Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs

June 30, 2025

September 30, 2025

Obligations of the U.S.

41 unchanged sentences

Changes in the Company’s ability to observe inputs to the valuation may cause reclassification of certain assets or liabilities within the fair value hierarchy.

The tables below provide a reconciliation for assets measured at fair value on a recurring basis using significant unobservable inputs, or level 3 inputs, for the six months ended June 30, 2025 and 2024 (dollars in thousands).

The tables below provide a reconciliation for assets measured at fair value on a recurring basis using significant unobservable inputs, or level 3 inputs, for the nine months ended September 30, 2025 and 2024 (dollars in thousands).

Obligations of State and Political Subdivisions

8 unchanged sentences

Transfers out of level 3

Balance at June 30, 2025

Balance at September 30, 2025

Obligations of State and Political Subdivisions

3 unchanged sentences

Realized gain (loss) included in earnings

Unrealized (loss) gain included in other comprehensive loss

Unrealized (loss) gain included in other comprehensive income

Maturities, prepayments, and calls

1 unchanged sentence

Transfers out of level 3

Balance at June 30, 2024

Balance at September 30, 2024

$ 4,283 $ 478

There were no liabilities measured at fair value on a recurring basis using level 3 inputs at June 30, 2025 and December 31, 2024 .

For the six months ended June 30, 2025 and 2024 , there were no gains or losses included in earnings related to the change in fair value of the assets measured on a recurring basis using significant unobservable inputs held at the end of the period.

The following table provides quantitative information about significant unobservable inputs used in fair value measurements of level 3 assets measured at fair value on a recurring basis at June 30, 2025 and December 31, 2024 (dollars in thousands).

There were no liabilities measured at fair value on a recurring basis using level 3 inputs at September 30, 2025 and December 31, 2024 .

For the nine months ended September 30, 2025 and 2024 , there were no gains or losses included in earnings related to the change in fair value of the assets measured on a recurring basis using significant unobservable inputs held at the end of the period.

The following table provides quantitative information about significant unobservable inputs used in fair value measurements of level 3 assets measured at fair value on a recurring basis at September 30, 2025 and December 31, 2024 (dollars in thousands).

Estimated Fair Value

2 unchanged sentences

Range of Discounts

June 30, 2025

September 30, 2025

Obligations of state and political subdivisions

28 unchanged sentences

Accordingly, values for other real estate owned are classified as level 3.

Quantitative information about assets measured at fair value on a nonrecurring basis based on significant unobservable inputs (level 3 ) is summarized below as of June 30, 2025 and December 31, 2024 .

There were no liabilities measured on a nonrecurring basis at June 30, 2025 or December 31, 2024 (dollars in thousands).

Quantitative information about assets measured at fair value on a nonrecurring basis based on significant unobservable inputs (level 3 ) is summarized below as of September 30, 2025 and December 31, 2024 .

There were no liabilities measured on a nonrecurring basis at September 30, 2025 or December 31, 2024 (dollars in thousands).

Estimated Fair Value

3 unchanged sentences

Weighted Average Discount (3)

June 30, 2025

September 30, 2025

Loans individually evaluated for impairment (1)

13 unchanged sentences

Collateral discounts and discount rates

( 1 ) Loan s individually evaluated for impairment that were re-measured during the period had a carrying value of $ 2.9 million and $ 2.4 million at June 30, 2025 and December 31, 2024 , respectively, with related ACL of $ 0.2 million as o f s uch dates.

( 2 ) Other real estate owned that was re-measured during the period had a carrying value of $ 2.0 million at June 30, 2025 .

During the six months ended June 30, 2025 , the Company recorded a $ 0.3 million write-down of other real estate owned which is included as part of “Other operating expenses” in noninterest expense on the accompanying consolidated statement of income .

( 1 ) Loan s individually evaluated for impairment that were re-measured during the period had a carrying value of $ 3.2 million and $ 2.4 million at September 30, 2025 and December 31, 2024 , respectively, with related ACL of $ 0.2 million as o f s uch dates.

( 2 ) Other real estate owned that was re-measured during the period had a carrying value of $ 3.2 million at September 30, 2025 .

During the nine months ended September 30, 2025 , the Company recorded a $ 0.4 million write-down of other real estate owned which is included as part of “Other operating expenses” in noninterest expense on the accompanying consolidated statement of income .

Other real estate owned that was re-measured during the period had a carrying value of $ 0.9 million at December 31, 2024 .

During the six months ended June 30, 2024 , the Company recorded a $ 0.2 million write-down of other real estate owned which is included as part of “Other operating expenses” in noninterest expense on the accompanying consolidated statement of income .

During the nine months ended September 30, 2024 , the Company recorded a $ 0.2 million write-down of other real estate owned which is included as part of “Other operating expenses” in noninterest expense on the accompanying consolidated statement of income .

( 3 ) Weighted by relative fair value.

27 unchanged sentences

The estimated fair values of the Company’s financial instruments are summarized in the tables below as of the dates indicated (dollars in thousands).

June 30, 2025

September 30, 2025

Carrying Amount

20 unchanged sentences

1,926,317 1,838,925 — — 1,838,925

FHLB short-term advances and repurchase agreements

Repurchase agreements

15,066 15,066 — 15,066 —

43 unchanged sentences

The income tax expense and the effective tax rate included in the consolidated statements of income are shown in the table below for the periods presented (dollars in thousands).

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Income tax expense

2 unchanged sentences

17.3 % 12.7 % 17.7 % 17.5 %

For the three and six months ended June 30, 2025 , and the three months ended June 30, 2024 the effective tax rate differed from the statutory tax rate of 21% primarily due to tax-exempt interest income earned on certain loans and investment securities and income from BOLI.

For the six months ended June 30, 2024 , the effective tax rate differed from the statutory tax rate of 21% primarily due to tax-exempt interest income earned on certain loans and investment securities and income from BOLI, partially offset by the surrender of approximately $ 8.4 million of BOLI contracts, which resulted in $ 0.3 million of income tax expense.

During the third quarter of 2024, the Company revised its estimated 2024 annual effective tax rate to account for the projected increase in nontaxable income from BOLI in the fourth quarter of approximately $ 3.1 million upon receipt of death benefit proceeds.

During the first quarter of 2024, the Company surrendered approximately $ 8.4 million of BOLI contracts and reinvested the proceeds in higher yielding policies, which resulted in $ 0.3 million of income tax expense.

The restructuring had an expected earn-back period of just over one year.

For the three and nine months ended September 30, 2025 , the effective tax rate differed from the statutory tax rate of 21% primarily due to tax-exempt interest income earned on certain loans and investment securities and income from BOLI.

For the three months ended September 30, 2024 , the effective tax rate differed from the statutory tax rate of 21% primarily due to the revision of the Company ’ s estimated 2024 annual effective tax rate, discussed above, tax-exempt interest income earned on certain loans and investment securities and income from BOLI.

For the nine months ended September 30, 2024 , the effective tax rate differed from the statutory tax rate of 21% primarily due to the revision of the estimated 2024 annual effective tax rate, discussed above, tax-exempt interest income earned on certain loans and investment securities and income from BOLI, partially offset by the surrender of BOLI contracts.

COMMITMENTS AND CONTINGENCIES

4 unchanged sentences

The credit risk associated with these commitments is evaluated in a manner similar to the ACL on loans.

The reserve for unfunded loan commitments was $ 0.1 million and $ 42,000 at June 30, 2025 and December 31, 2024 , respectively, and is included in “Accrued taxes and other liabilities” in the accompanying consolidated balance sheets.

The reserve for unfunded loan commitments was $ 0.3 million and $ 42,000 at September 30, 2025 and December 31, 2024 , respectively, and is included in “Accrued taxes and other liabilities” in the accompanying consolidated balance sheets.

Commitments to extend credit are agreements to lend money with fixed expiration dates or termination clauses.

4 unchanged sentences

The table below shows the approximate amounts of the Company’s commitments to extend credit as of the dates presented (dollars in thousands).

June 30, 2025

September 30, 2025

December 31, 2024

2 unchanged sentences

Standby letters of credit

Additionally, at June 30, 2025 , the Company had unfunded commitments of $ 0.9 million for its investments in SBIC qualified funds and other investment funds.

Additionally, at September 30, 2025 , the Company had unfunded commitments of $ 1.6 million for its investments in SBIC qualified funds and other investment funds.

INVESTAR HOLDING CORPORATION

5 unchanged sentences

The Company has lease agreements with lease and non-lease components, which the Company has elected to account for separately, as the non-lease component amounts are readily determinable.

Quantitative information regarding the Company’s operating leases is presented below as of and for the six months ended June 30, 2025 and 2024 (dollars in thousands).

Quantitative information regarding the Company’s operating leases is presented below as of and for the nine months ended September 30, 2025 and 2024 (dollars in thousands).

September 30,

Total operating lease cost

1 unchanged sentence

Weighted-average discount rate

At both June 30, 2025 and December 31, 2024 , the Company’s operating lease ROU assets were $ 2.0 million, and the Company’s related operating lease liabilities were $ 2.1 million.

At September 30, 2025 and December 31, 2024 , the Company’s operating lease ROU assets were $ 1.9 million and $ 2.0 million, respectively, and the Company’s related operating lease liabilities were $ 2.0 million and $ 2.1 million, respectively.

The Company’s operating leases have remaining terms ranging from approximately two to six years, including extension options if the Company is reasonably certain they will be exercised.

Future minimum lease payments due under non-cancelable operating leases at June 30, 2025 are presented below (dollars in thousands).

Future minimum lease payments due under non-cancelable operating leases at September 30, 2025 are presented below (dollars in thousands).

Remainder of 2025

At June 30, 2025 , the Company had not entered into any material leases that have not yet commenced.

At September 30, 2025 , the Company had not entered into any material leases that have not yet commenced.

The Bank owns its corporate headquarters building, the first floor of which is occupied by multiple tenants.

The Bank, as lessor, also leases a portion of one of its branch locations and a former stand-alone ATM location.

The Bank, as lessor, also leases a portion of one of its branch locations.

All tenant leases are operating leases.

The Bank, as lessor, recognized lease income of $ 0.1 million and $ 0.2 million for the three and six month periods ended June 30, 2025 and 2024 , respectively.

INVESTAR HOLDING CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SUBSEQUENT EVENTS

Agreement and Plan of Merger with Wichita Falls Bancshares, Inc.

On July 1, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with WFB, the holding company for First National Bank, headquartered in Wichita Falls, Texas.

The Merger Agreement provides for the merger of WFB with and into the Company, with the Company as the surviving corporation.

Immediately following the merger, First National Bank will be merged with and into the Bank, with the Bank as the surviving bank.

Under th e terms of the Merger Agreement, all of the issued and outstanding shares of WFB common stock will be converted into and represent the right to receive in the aggregate $ 7.2 million in cash from the Company and 3,955,344 shares of Company common stock, subject to certain adjustments.

Based on the Company’s closing stock price of $ 19.32 as of June 30, 2025, the transaction is valued at approximately $ 83.6 million in the aggregate.

First National Bank operates seven branches and two mortgage offices in north Texas and had approximately $ 1.4 billion in assets at June 30, 2025.

Consummation of the transactions contemplated by the Merger Agreement is subject to various customary conditions, including, without limitation, the approval of the shareholders of each of the Company and WFB;

the receipt of certain regulatory approvals;

the accuracy of the representations and warranties of the parties and compliance by the parties with their respective covenants and obligations under the Merger Agreement (subject to customary materiality qualifiers);

and the absence of a material adverse change with respect to WFB.

The Merger Agreement contains certain termination rights, including the right, subject to certain exceptions, of either party to terminate the Merger Agreement if the closing has not occurred by March 31, 2026 ( or June 30, 2026 if the only outstanding closing condition is the receipt of all required regulatory approvals), and the right of WFB to terminate the Merger Agreement, subject to certain conditions, to accept a business combination transaction deemed by its board of directors to be superior to the proposed merger.

The Merger Agreement provides for the payment by WFB of a termination fee of $ 3,300,000 upon the termination of the Merger Agreement under certain circumstances.

Private Placement of Series A Preferred Stock

On July 1, 2025, the Company completed a private placement of 32,500 shares of its newly designated Series A Preferred Stock at a purchase price of $ 1,000 per share pursuant to securities purchase agreements (collectively, the “Securities Purchase Agreements”) with certain institutional and other accredited investors, for aggregate gross proceeds to the Company o f $ 32.5 million.

The net proceeds of the private placement were approximately $ 30.4 million, after deducting placement agent fees and other offering related expenses.

The Company intends to use the net proceeds from the private placement to support the acquisition of WFB and for general corporate purposes, including organic growth and other potential acquisitions.

The Series A Preferred Stock is intended to qualify as additional Tier 1 capital of the Company.

At June 30, 2025, the Company had received advanced proceeds from the private placement of $ 17.3 million, which are included in “Cash and cash equivalents” in the accompanying consolidated balance sheet, and the Company recorded a corresponding liability, which is included in “Accrued taxes and other liabilities” in the accompanying consolidated balance sheet.

Pursuant to the Restated Articles, holders of the Series A Preferred Stock are entitled to receive, when, as and if authorized by the Board, on a non-cumulative basis, quarterly cash dividends at an annual rate equal to 6.5 % on the liquidation preference of $ 1,000 per share, payable in arrears on January 1, April 1, July 1 and October 1 of each year commencing on October 1, 2025.

Holders of Series A Preferred Stock have the right, at any time and from time to time, at such holder’s option to convert all or any portion of their Series A Preferred Stock into shares of the Company’s common stock at the rate of 47.619 shares of common stock per share of Series A Preferred Stock (subject to certain adjustments) (the “Conversion Rate”), plus cash in lieu of fractional shares of common stock.

The maximum number of shares of common stock that may be issued upon conversion is 1,600,000 (subject to certain adjustments as described in the Restated Articles).

In addition, subject to certain conditions, on or after July 1, 2028, the Company will have the right, at its option, from time to time on any dividend payment date, to cause some or all of the Series A Preferred Stock to be converted into shares of the Company’s common stock at the Conversion Rate if, for 20 trading days within a period of 30 consecutive trading days, the closing price of the Company’s common stock exceeds $ 26.25 per share (subject to certain adjustments).

The Series A Preferred Stock has no maturity date and is perpetual unless redeemed by the Company or converted in accordance with the Restated Articles.

Subject to certain conditions, the Company may redeem, from time to time, in whole or in part, shares of Series A Preferred Stock on any dividend payment date occurring on or after July 1, 2030 at a redemption price of $ 1,000 per share, plus all declared but unpaid dividends thereon, without regard to, or accumulation of, any undeclared dividends.

Holders of the Series A Preferred Stock have no voting rights, except with respect to certain changes in the terms of the Series A Preferred Stock, certain fundamental business transactions and as otherwise required by applicable law.

If the Company voluntarily or involuntarily liquidates, dissolves or winds up, each holder will be entitled to receive, before any distribution of assets or proceeds is made to holders of the Company’s common stock, cash liquidating distributions in an amount equal to the greater of (i) the liquidation preference of $ 1,000 per share of, plus all declared but unpaid dividends thereon, without regard to, or accumulation of, any undeclared dividends, and (ii) the amount that such holder would have received in respect of the common stock issuable upon conversion of Series A Preferred Stock had such holder converted such share of Series A Preferred Stock immediately prior to such time.

Upon the occurrence of specified “Reorganization Events” as defined in the Restated Articles, such as a merger in which the Company’s common stock is converted into other consideration, each share of Series A Preferred Stock outstanding immediately prior to such Reorganization Event will be entitled to receive, before any distribution of such assets or proceeds is made to holders of the Company’s common stock, in full, the greater of (i) the amount per share equal to the liquidation value of $ 1,000 per share, plus all declared but unpaid dividends thereon, without regard to, or accumulation of, any undeclared dividends, and (ii) the amount equal to the distribution amount of such assets or proceeds of the Company as was receivable by a holder of the number of shares of the Company’s common stock into which such share of Series A Preferred Stock was convertible immediately prior to such Reorganization Event.

The shares of Series A Preferred Stock sold in the private placement have not been registered under the Securities Act in reliance on the exemption from registration in Section 4 (a)( 2 ) of the Securities Act and Rule 506 (b) of Regulation D of the SEC promulgated under the Securities Act, and, as a result, the shares may not be offered or sold in the U.S.

absent a registration statement or exemption from registration.

The Company’s obligation to have an effective registration statement covering the resale of the shares of common stock underlying the Series A Preferred Stock continues until such securities (i) are sold or otherwise transferred under an effective registration statement under the Securities Act, (ii) cease to be outstanding, (iii) are transferred in a transaction in which the purchaser’s rights are not assigned to the transferee of the securities, (iv) are sold in accordance with Rule 144 promulgated under the Securities Act (“Rule 144” ), or (v) become eligible for resale without volume or manner-of-sale restrictions under Rule 144 (or any successor rule then in effect) and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144.

The Bank, as lessor, recognized lease income of $ 0.1 million and $ 0.3 million for the three and nine month periods ended September 30, 2025 and 2024 , respectively.

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

47 unchanged sentences

Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include risks and uncertainties relating to:

(i) the ability to obtain the requisite shareholder approvals;

(ii) the risk that the Company may be unable to obtain governmental and regulatory approvals required to consummate the proposed merger, or required governmental and regulatory approvals may delay the merger or result in the imposition of conditions that could cause the parties to abandon the merger;

(iii) the risk that a condition to closing may not be satisfied;

(iv) the timing to consummate the proposed merger;

(v) the risk that the businesses will not be integrated successfully;

(vi) the risk that the cost savings and any other synergies from the proposed merger may not be fully realized or may take longer to realize than expected;

(vii) disruption from the proposed merger making it more difficult to maintain relationships with customers, employees or vendors;

and (viii) the diversion of management time on merger-related issues.

(i) the risk that a condition to closing may not be satisfied;

(ii) the timing to consummate the proposed merger;

(iii) the risk that the businesses will not be integrated successfully;

(iv) the risk that the cost savings and any other synergies from the proposed merger may not be fully realized or may take longer to realize than expected;

(v) disruption from the proposed merger making it more difficult to maintain relationships with customers, employees or vendors;

(vi) the diversion of management time on merger-related issues;

and (vii) the impact of litigation or any other legal proceedings.

These factors should not be construed as exhaustive.

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“Risk Factors” of this report.

Additional information and risk factors related to the WFB transaction can be found in the definitive proxy statement/prospectus filed with the SEC on September 23, 2025, as amended.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on any forward-looking statement as a prediction of future events.

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and Alabama, including York and Oxford and their surrounding areas.

At June 30, 2025 , we operated 29 full service branches comprised of 20 full service branches in Louisiana, three full service branches in Texas, and six full service branches in Alabama.

At September 30, 2025 , we operated 29 full service branches comprised of 20 full service branches in Louisiana, three full service branches in Texas, and six full service branches in Alabama.

We opened a loan and deposit production office in our Texas market in the first quarter of 2024 and converted it to a full-service branch location in the fourth quarter of 2024.

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Our most recent whole bank acquisition was completed in April 2021.

On July 1, 2025, we announced that we had entered into a definitive agreement to acquire WFB.

For additional information, see Note 12.

Subsequent Events and “Pending Acquisition of WFB” below .

On July 1, 2025, we announced that we had entered into an Agreement and Plan of Merger (the “Merger Agreement”).

For additional information, see “Pending Acquisition of WFB” below .

Our principal business is lending to and accepting deposits from individuals and small to medium-sized businesses in our areas of operation.

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Pending Acquisition of WFB

On July 1, 2025, we announced that we had entered into a definitive agreement to acquire WFB, headquartered in Wichita Falls, Texas and its wholly-owned subsidiary, First National Bank.

First National Bank operates seven branches and two mortgage offices in north Texas and had approximat

ely $1.4 billion in as sets at June 30, 2025.

The closing of the transaction is subject to the satisfaction of all closing conditions, including the receipt of all required regulatory and shareholder approvals.

For additional information, see Note 12.

Subsequent Events.

On July 1, 2025, we announced that we had entered into the Merger Agreement to acquire WFB, headquartered in Wichita Falls, Texas and its wholly-owned subsidiary, First National Bank.

The Merger Agreement provides for the merger of WFB with and into the Company, with the Company as the surviving corporation.

Immediately following the merger, First National Bank will be immediately merged with and into the Bank, with the Bank as the surviving bank.

First National Bank operates seven branches and one mortgage office in north Texas, and, at June 30, 2025, had $1.4 billion in total as sets, $1.1 billion in net loans and $1.1 billion in total deposits.

Under th e terms of the Merger Agreement, all of the issued and outstanding shares of WFB common stock will be converted into and represent the right to receive in the aggregate $7.2 million in cash from the Company and 3,955,334 shares of Company common stock, subject to certain adjustments.

Based on the Company’s closing stock price of $19.32 as of June 30, 2025, the transaction is valued at approximately $83.6 million in the aggregate.

The Merger Agreement has been unanimously approved by the boards of directors of the Company and WFB, and on October 15, 2025, the

OCC approved the merger of First National Bank with and into the Bank.

On October 21, 2025, the transaction received a waiver of the applicable application and prior approval requirements from the Federal Reserve.

Shareholders of WFB and our shareholders approved the Merger Agreement at special meetings on October 23, 2025 and October 24, 2025, respectively.

Upon satisfaction of all closing conditions, we anticipate the transaction will close on or about January 1, 2026.

Private Placement of Series A Preferred Stock

In connection with the WFB transaction, on July 1, 2025 we completed a private placement of 32,500 shares of our newly designated Series A Preferred Stock at a price of $1,000 per share, for aggregate gross proceeds of $32.5 million.

For additional information, see Note 12.

Subsequent Events.

In connection with the WFB transaction, on July 1, 2025 we completed a private placement of 32,500 shares of our newly designated Series A Preferred Stock with selected institutional and other accredited investors at a price of $1,000 per share, for aggregate gross proceeds of $32.5 million.

The net proceeds were $30.4 million, after deducting placement agent fees and other offering-related expenses.

Investar intends to use the net proceeds from the offering to support the acquisition of WFB and for general corporate purposes, including organic growth and other potential acquisitions.

We filed a Registration Statement on Form S-3 with the SEC on September 2, 2025 registering the resale from time to time by the stockholders named therein of the shares of Company common stock issuable upon conversion of shares of Series A Preferred Stock.

The Registration Statement was declared effective by the SEC on September 17, 2025.

For additional information, see

Stockholders’ Equity.

Certain Events That Affect Period-over-Period Comparability

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During 2024, beginning in September 2024, the Federal Reserve reduced the federal funds target rate three times by 100 basis points on a cumulative basis to 4.25% to 4.50%.

Accordingly, the prevailing federal funds target rate for the six months ended June 30, 2025 was 100 basis points lower than for the six months ended June 30, 2024.

In September 2025, the Federal Reserve reduced the federal funds target rate by 25 basis points to 4.00% to 4.25%.

Accordingly, the prevailing federal funds target rate for the nine months ended September 30, 2025 was lower than for the nine months ended September 30, 2024.

Disruptions in the Banking Industry .

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During the third quarter of 2024, we began paying down borrowings under the BTFP and repaid all of the remaining borrowings under the BTFP in the fourth quarter of 2024 .

As of June 30, 2025 , estimated uninsured deposits represented approximately 34% of our total deposits.

As of September 30, 2025 , estimated uninsured deposits represented approximately 35% of our total deposits.

For additional information, see “Discussion and Analysis of Financial Condition – “Deposits,” “Borrowings,” “Liquidity and Capital Resources” and our Annual Report, Part II.

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During the fourth quarter of 2024, we redeemed all of the remaining $20.0 million in principal amount of the 2029 Notes.

As of June 30, 2025 and December 31, 2024 our outstanding subordinated debt consisted of $17.0 million in principal amount of our 2032 Notes.

As of September 30, 2025 and December 31, 2024, our outstanding subordinated debt consisted of $17.0 million in principal amount of our 2032 Notes.

BOLI Restructuring.

During the first quarter of 2024, we surrendered approximately $8.4 million of BOLI and reinvested the proceeds in higher yielding policies.

Legal Settlement.

During the third quarter of 2024, we recorded noninterest income of $1.1 million from a legal settlement related to a lending relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida.

BOLI Death Benefit Proceeds.

The third quarter 2024 effective tax rate reflects a revision to our estimated 2024 annual effective tax rate to account for our projected increase in nontaxable income from BOLI in the fourth quarter of 2024 of approximately $3.1 million upon receipt of death benefit proceeds.

Hurricane Ida .

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We recorded an impairment charge of $21.6 million related to this relationship during the third quarter of 2021.

As of June 30, 2025 , we have recorded total recoveries on the relationship of approximately $7.9 million on a cumulative basis.

At June 30, 2025 , our other real estate owned related to this relationship included two remaining properties with a total cost basis of $1.5 million, which we are actively marketing for sale.

As of September 30, 2025 , we have recorded total recoveries on the relationship of approximately $7.9 million on a cumulative basis.

At September 30, 2025 , our other real estate owned related to this relationship included two remaining properties with a total cost basis of $1.5 million, which we are actively marketing for sale.

Upon sale of these properties, we will have arrived at final resolution of this loan relationship.

Private Placement of Series A Preferred Stock .

During the third quarter of 2025, we completed a private placement of 32,500 shares of our newly designated Series A Preferred Stock with selected institutional and other accredited investors at a price of $1,000 per share, for aggregate gross proceeds of $32.5 million.

The net proceeds were $30.4 million, after deducting placement agent fees and other offering-related expenses.

Overview of Financial Condition and Results of Operations

Total assets increased $25.3 million, or 0.9% , to $2.75 billion at June 30, 2025 , compared to $2.72 billion at December 31, 2024 .

For the six months ended June 30, 2025 , net income was $10.8 million, or $1.09 per diluted common share, compared to net income of $8.8 million, or $0.89 , per diluted common share for the six months ended June 30, 2024 .

At June 30, 2025 , the Company and Bank each were in compliance with all regulatory capital requirements, and the Bank was considered “well-capitalized” under the FDIC’s prompt corrective action regulations.

Key components of our performance for the six months ended June 30, 2025 are summarized below.

Net interest income for the six months ended June 30, 2025 was $38.0 million, an increase of $3.6 million, or 10.4% , compared to $34.4 million for the six months ended June 30, 2024 , which was a result of a $5.3 million decrease in interest expense partially offset by a $1.7 million decrease in interest income.

We experienced margin expansion as our cost of funds decreased and our yield on interest-earning assets increased.

During the six months ended June 30, 2025 , our net interest margin was 2.95% , compared to 2.61% for the six months ended June 30, 2024 .

For the six months ended June 30, 2025 , we recorded a negative provision for credit losses of $3.5 million primarily as a result of a $3.3 million recovery of loans previously charged off following a property insurance settlement related to a loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida.

For the six months ended June 30, 2024, we recorded a negative provision for credit losses of $1.8 million primarily due to a decrease in total loans, aging of existing loans, and, to a lesser extent, the completion of our annual CECL allowance model recalibration, which resulted in lower historical loss rates.

Noninterest income decreased $0.9 million, or 15.7% , to $4.6 million for the six months ended June 30, 2025 compared to $5.5 million for the six months ended June 30, 2024 .

Noninterest expense increased $2.2 million, or 7.0% , to $32.9 million for the six months ended June 30, 2025 compared to $30.8 million for the six months ended June 30, 2024 .

Credit quality metrics improved as nonperforming loans were 0.36% of total loans at June 30, 2025 compared to 0.42% at December 31, 2024 .

Return on average assets increased to 0.80% for the six months ended June 30, 2025 , compared to 0.63% for the six months ended June 30, 2024 .

Return on average equity was 8.66% for the six months ended June 30, 2025 , compared to 7.73% for the six months ended June 30, 2024 .

Book value per common share reached a record high of $26.01 at June 30, 2025 compared to $24.55 at December 31, 2024 .

Total deposits decreased $7.8 million, or 0.3% , to $2.34 billion at June 30, 2025 , compared to $2.35 billion at December 31, 2024 .

Excluding $47.3 million of brokered demand deposits at December 31, 2024 , total deposits increased $39.6 million, or 1.7%, to $2.34 billion at June 30, 2025 , compared to $2.30 billion at December 31, 2024 .

No ninterest-bearing deposits increased $16.3 million, or 3.8% , to $448.5 million at June 30, 2025 , compared to $432.1 million at December 31, 2024 .

As of June 30, 2025 , estimated uninsured deposits represented approximately 34% of our total deposits.

Total loans decreased $18.7 million, or 0.9% , to $2.11 billion at June 30, 2025 , compared to $2.13 billion at December 31, 2024 .

During the six months ended June 30, 2025 , we paid $1.3 million to repur chase 71,057 shares of common stock, compared to $0.3 million to repurchase 16,621 shares of common stock during the six months ended June 30, 2024 .

We paid $2.1 million in cash dividends on our common stock during six months ended June 30, 2025 compared to $2.0 million during the six months ended June 30, 2024 .

Accumulated other comprehensive loss d ecreased $6.7 million, or 13.9% , to $41.6 million at June 30, 2025 , compared to $48.4 million at December 31, 2024 primarily due to an increase in the fair value of our AFS securities portfolio.

Total assets increased $77.8 million, or 2.9% , to $2.80 billion at September 30, 2025 , compared to $2.72 billion at December 31, 2024 .

For the three months ended September 30, 2025 , net income available to common shareholders was $5.7 million, or $0.54 per diluted common share, compared to net income available to common shareholders of $5.4 million, or $0.54 , per diluted common share for the three months ended September 30, 2024 .

For the nine months ended September 30, 2025 , net income available to common shareholders was $16.4 million, or $1.62 per diluted common share, compared to net income available to common shareholders of $14.1 million, or $1.43 , per diluted common share for the nine months ended September 30, 2024 .

At September 30, 2025 , the Company and Bank each were in compliance with all regulatory capital requirements, and the Bank was considered “well-capitalized” under the FDIC’s prompt corrective action regulations.

Key components of our performance for the three and nine months ended September 30, 2025 are summarized below.

Net interest income for the three months ended September 30, 2025 was $21.2 million, an increase of $3.3 million, or 18.5% , compared to $17.9 million for the three months ended September 30, 2024 , which was a result of a $3.1 million decrease in interest expense and a $0.2 million increase in interest income.

Net interest income for the nine months ended September 30, 2025 was $59.1 million, an increase of $6.9 million, or 13.1% , compared to $52.3 million for the nine months ended September 30, 2024 , which was a result of an $8.3 million decrease in interest expense partially offset by a $1.5 million decrease in interest income.

We experienced margin expansion as our cost of funds decreased and our yield on interest-earning assets increased for the respective periods.

During the three months ended September 30, 2025 , our net interest margin was 3.16% , compared to 2.67% for the three months ended September 30, 2024 .

During the nine months ended September 30, 2025 , our net interest margin was 3.02% , compared to 2.63% for the nine months ended September 30, 2024 .

For the three months ended September 30, 2025 , we recorded a provision for credit losses of $0.1 million primarily as a result of loan growth partially offset by changes in the economic forecast and loan mix .

For the three months ended September 30, 2024 , we recorded a negative provision for credit losses of $0.9 million primarily as a result of net recoveries of $0.4 million, a decrease in total loans, aging of existing loans, and an improvement in the economic forecast .

For the nine months ended September 30, 2025 , we recorded a negative provision for credit losses of $3.3 million primarily as a result of a $3.3 million recovery of loans previously charged off following a property insurance settlement related to a loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida.

For the nine months ended September 30, 2024, we recorded a negative provision for credit losses of $2.8 million primarily due to net recoveries, a decrease in total loans, aging of existing loans, an improvement in economic forecast, and, to a lesser extent, the completion of our annual CECL allowance model recalibration, which resulted in lower historical loss rates.

Noninterest income decreased $0.6 million, or 15.8% , to $3.0 million for the three months ended September 30, 2025 compared to $3.5 million for the three months ended September 30, 2024 .

Noninterest income decreased $1.4 million, or 15.7% , to $7.6 million for the nine months ended September 30, 2025 compared to $9.0 million for the nine months ended September 30, 2024 .

Noninterest expense increased $0.3 million, or 2.1% , to $16.5 million for the three months ended September 30, 2025 compared to $16.2 million for the three months ended September 30, 2024 .

Noninterest expense increased $2.5 million, or 5.3%, to $49.5 million for the nine months ended September 30, 2025 compared to $47.0 million for the nine months ended September 30, 2024 .

Credit quality metrics improved as nonperforming loans were 0.36% of total loans at September 30, 2025 compared to 0.42% at December 31, 2024 .

Return on average assets increased to 0.88% for the three months ended September 30, 2025 , compared to 0.77% for the three months ended September 30, 2024 .

Return on average assets increased to 0.82% for the nine months ended September 30, 2025 , compared to 0.68% for the nine months ended September 30, 2024 .

Return on average common equity was 8.60% for the three months ended September 30, 2025 , compared to 8.97% for the three months ended September 30, 2024 .

Return on average common equity was 8.64% for the nine months ended September 30, 2025 , compared to 8.16% for the nine months ended September 30, 2024 .

Book value per common share reached a record high of $26.96 at September 30, 2025 compared to $24.55 at December 31, 2024 .

Total deposits increased $26.7 million, or 1.1% , to $2.37 billion at September 30, 2025 , compared to $2.35 billion at December 31, 2024 .

Excluding $47.3 million of brokered demand deposits at December 31, 2024 , total deposits increased $74.1 million, or 3.2%, to $2.37 billion at September 30, 2025 , compared to $2.30 billion at December 31, 2024 .

No ninterest-bearing deposits increased $14.2 million, or 3.3% , to $446.4 million at September 30, 2025 , compared to $432.1 million at December 31, 2024 .

As of September 30, 2025 , estimated uninsured deposits represented approximately 35% of our total deposits.

Total loans increased $25.4 million, or 1.2% , to $2.15 billion at September 30, 2025 , compared to $2.13 billion at December 31, 2024 .

During the three months ended September 30, 2025 , we paid $0.3 million to repur chase 14,722 shares of common stock, compared to $37,000 to repurchase 2,000 shares of common stock during the three months ended September 30, 2024 .

During the nine months ended September 30, 2025 , we paid $1.6 million to repur chase 85,779 shares of common stock, compared to $0.3 million to repurchase 18,621 shares of common stock during the nine months ended September 30, 2024 .

Accumulated other comprehensive loss d ecreased $11.0 million, or 22.7% , to $37.4 million at September 30, 2025 , compared to $48.4 million at December 31, 2024 primarily due to an increase in the fair value of our AFS securities portfolio.

Discussion and Analysis of Financial Condition

Loans constitute our most significant asset, comprising 77% and 78% of our total assets at June 30, 2025 and December 31, 2024 , respectively.

Total loans decreased $18.7 million, or 0.9% , to $2.11 billion at June 30, 2025 , compared to $2.13 billion at December 31, 2024 .

The decrease in loans was primarily the result of loan amortization.

Loans constitute our most significant asset, comprising 77% and 78% of our total assets at September 30, 2025 and December 31, 2024 , respectively.

Total loans increased $25.4 million, or 1.2% , to $2.15 billion at September 30, 2025 , compared to $2.13 billion at December 31, 2024 .

The increase in loans was primarily the result of organic growth.

Given the high interest rate environment, we are emphasizing origination of high margin loans that promote long-term profitability and proactively exiting credit relationships that do not fit this strategy.

Our variable-rate loans as a percentage of total loans increased to 34% at June 30, 2025 compared to 32% at December 31, 2024.

Our variable-rate loans as a percentage of total loans increased to 36% at September 30, 2025 compared to 32% at December 31, 2024.

The table below sets forth the balance of loans outstanding by loan type as of the dates presented, and the percentage of each loan type to total loans (dollars in thousands).

June 30, 2025

September 30, 2025

December 31, 2024

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The Company ’ s business lending portfolio consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans.

At June 30, 2025 , the Company’s business lending portfolio, which consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans, was $993.6 million, an increase of $17.5 million, or 1.8% , compared to $976.2 million at December 31, 2024 .

The increase in the business lending portfolio is primarily driven by organic growth and higher utilization of credit lines, particularly on commercial and industrial relationships.

Nonowner-occupied loans totaled $466.0 million at June 30, 2025, a decrease of $29.3 million, or 5.9%, compared to $495.3 million at December 31, 2024.

The decrease in nonowner-occupied loans is primarily due to loan amortization and payoffs that aligned with our continued strategy to optimize and de-risk the mix of the portfolio.

Construction and development loans totaled $141.7 million at June 30, 2025, a decrease of $12.9 million, or 8.3%, compared to $154.6 million at December 31, 2024.

The decrease in construction and development loans is primarily due to conversions to permanent loans upon completion of construction.

At September 30, 2025 , the Company’s business lending portfolio, which consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans, was $1.02 billion, an increase of $47.4 million, or 4.9% , compared to $976.2 million at December 31, 2024 .

The increase in the business lending portfolio was primarily driven by organic growth and higher utilization of credit lines, particularly on commercial and industrial relationships.

Nonowner-occupied loans totaled $459.7 million at September 30, 2025, a decrease of $35.6 million, or 7.2%, compared to $495.3 million at December 31, 2024.

The decrease in nonowner-occupied loans was primarily due to loan amortization and payoffs that aligned with our continued strategy to optimize and de-risk the mix of the portfolio.

Construction and development loans totaled $140.6 million at September 30, 2025, a decrease of $14.0 million, or 9.1%, compared to $154.6 million at December 31, 2024.

The decrease in construction and development loans was primarily due to conversions to permanent loans upon completion of construction.

During the third quarter of 2023 we exited the consumer mortgage loan origination business to transition into shorter duration, higher risk-adjusted return asset classes, in an effort to focus more on our core business and optimize profitability.

The consumer mortgage portfolio was approximately $233.1 million and $242.5 million at June 30, 2025 and December 31, 2024, respectively, substantially all of which is included in the 1-4 family category.

The consumer mortgage portfolio was approximately $229.1 million a nd $242.5 million at September 30, 2025 and December 31, 2024, respectively, substantially all of which is included in the 1-4 family category.

The remaining loans in the 1-4 family category consisted primarily of second mortgages, home equity loans, home equity lines of credit, and business purpose loans secured by 1-4 family residential real estate.

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Loan concentrations are considered to exist when there are amounts loaned to multiple borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions.

At June 30, 2025 and December 31, 2024 , we had no concentrations of loans exceeding 10% of total loans other than loans in the categories listed in the table above.

At September 30, 2025 and December 31, 2024 , we had no concentrations of loans exceeding 10% of total loans other than loans in the categories listed in the table above.

The table below sets forth the balance of owner-occupied loans by industry based on NAICS code and nonowner-occupied loans by property type as of the dates presented (dollars in thousands).

June 30, 2025

September 30, 2025

December 31, 2024

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Accommodation and food services

Mining, quarrying, and oil and gas extraction

Manufacturing

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The following table sets forth loans outstanding at

June 30, 2025

, which, based on remaining scheduled repayments of principal, are due in the periods indicated.

September 30, 2025

, which, based on remaining scheduled repayments of principal, are due in the periods indicated, as well as the amount of loans with fixed and variable rates in each maturity category.

Loans with balloon payments and longer amortizations are often repriced and extended beyond the initial maturity when credit conditions remain satisfactory.

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After Fifteen Years

Mortgage loans on real estate:

Construction and development

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Nonowner-occupied

Total mortgage loans on real estate

Commercial and industrial

Loans with fixed rates:

Mortgage loans on real estate:

Construction and development

Commercial real estate

Owner-occupied

Nonowner-occupied

Commercial and industrial

Total loans with fixed rates

Loans with variable rates:

Mortgage loans on real estate:

Construction and development

Commercial real estate

Owner-occupied

Nonowner-occupied

Commercial and industrial

Total loans with variable rates

Investment Securities

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We also use investment securities as collateral for certain deposits and other types of borrowings.

Investment securities represented 14% of our total assets and totaled $397.2 million at June 30, 2025 , an increase of $23.4 million, or 6.3% , from $373.8 million at December 31, 2024 .

The increase in investment securities at June 30, 2025 compared to December 31, 2024 was driven primarily by a $24.4 million increase in residential mortgage-backed securities .

Net unrealized losses in our AFS investment securities portfolio decreased to $52.9 million at June 30, 2025 compared to $61.4 million at December 31, 2024 primarily due to lower prevailing market interest rates.

Investment securities represented 15% of our total assets and totaled $418.1 million at September 30, 2025 , an increase of $44.3 million, or 11.8% , from $373.8 million at December 31, 2024 .

The increase in investment securities at September 30, 2025 compared to December 31, 2024 was driven primarily by a $36.5 million increase in residential mortgage-backed securities .

Net unrealized losses in our AFS investment securities portfolio decreased to $47.5 million at September 30, 2025 compared to $61.4 million at December 31, 2024 primarily due to lower prevailing market interest rates.

For additional information, see Note 3.

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The table below shows the carrying value of our investment securities portfolio by investment type and the percentage that such investment type comprises of our entire portfolio as of the dates indicated (dollars in thousands).

June 30, 2025

September 30, 2025

December 31, 2024

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Securities not classified as HTM are classified as AFS and are stated at fair value .

As of June 30, 2025 , AFS securities comprised 90% of our total investment securities.

Due to the nature of the investments, current market prices, and the current interest rate environment, we determined that the declines in the fair values of the AFS and HTM securities portfolio were not attributable to credit losses at June 30, 2025 and December 31, 2024 .

As of September 30, 2025 , AFS securities comprised 89% of our total investment securities.

Accordingly, there was no adjustment made to the amortized cost basis.

The carrying values of our AFS securities are adjusted for unrealized gains or losses not attributable to credit losses as valuation allowances, and any gains or losses are reported on an after-tax basis as a component of other comprehensive income (loss).

The table below sets forth the stated maturities and weighted average yields of our investment debt securities based on the amortized cost of our investment portfolio at June 30, 2025 (dollars in thousands).

The table below sets forth the stated maturities and weighted average yields of our investment debt securities based on the amortized cost of our investment portfolio at September 30, 2025 (dollars in thousands).

One Year or Less

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Weighted average yields on tax-exempt securities are calculated based on amortized cost on a fully tax equivalent basis assuming a federal tax rate of 21%, when applicable.

The following table sets forth the composition of our deposits and the percentage of each deposit type to total deposits at June 30, 2025 and December 31, 2024 (dollars in thousands).

June 30, 2025

The following table sets forth the composition of our deposits and the percentage of each deposit type to total deposits at September 30, 2025 and December 31, 2024 (dollars in thousands).

September 30, 2025

December 31, 2024

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Total deposits

Total deposits were $2.34 billion at June 30, 2025 , a decrease of $7.8 million, or 0.3% , compared to $2.35 billion at December 31, 2024 .

There were no brokered demand deposits at June 30, 2025, compared to $47.3 million at December 31, 2024.

Total deposits, excluding $47.3 million of brokered demand deposits at December 31, 2024, increased $39.6 million, or 1.7%, to $2.34 billion at June 30, 2025, compared to $2.30 billion at December 31, 2024.

Total deposits were $2.37 billion at September 30, 2025 , an increase of $26.7 million, or 1.1% , compared to $2.35 billion at December 31, 2024 .

There were no brokered demand deposits at September 30, 2025, compared to $47.3 million at December 31, 2024.

Total deposits, excluding $47.3 million of brokered demand deposits at December 31, 2024 , increased $74.1 million, or 3.2%, to $2.37 billion at September 30, 2025, compared to $2.30 billion at December 31, 2024.

We utilize brokered demand deposits when pricing is more favorable than other short-term borrowings.

The increase in noninterest-bearing demand deposits, interest-bearing demand deposits, and money market deposits at June 30, 2025 compared to December 31, 2024 is primarily the result of organic growth.

We increased rates on our interest-bearing demand deposits during the second quarter of 2025 compared to the second quarter of 2024 to attract and retain lower cost deposits relative to higher-cost short-term borrowings.

The decrease in time deposits at June 30, 2025 compared to December 31, 2024 is primarily due to maturities of higher cost time deposits as a result of our strategy to keep duration short and lower rates.

Brokered time deposits increased to $256.1 million at June 30, 2025 from $245.5 million at December 31, 2024.

The increase in noninterest-bearing demand deposits, interest-bearing demand deposits, and money market deposits at September 30, 2025 compared to December 31, 2024 was primarily the result of organic growth.

We increased rates on our interest-bearing demand deposits during 2025 compared to 2024 to attract and retain lower cost deposits relative to higher-cost short-term borrowings.

The decrease in time deposits at September 30, 2025 compared to December 31, 2024 was primarily due to maturities of higher cost time deposits as a result of our strategy to keep duration short and lower rates.

Brokered time deposits decreased to $210.8 million at September 30, 2025 from $245.5 million at December 31, 2024.

We utilize brokered time deposits with laddered maturities, entirely in denominations of less than $250,000, to secure fixed cost funding and reduce short-term borrowings.

At June 30, 2025, the balance of brokered time deposits remained below 10% of total assets, and the remaining weighted average duration was approximate ly four months with a weighted average rate o f 4.68%.

At June 30, 2025, our estimated uninsured deposits were $785.7 million, or approximately 34% of total deposits, compared to $737.6 million, or approximately 31% of our total deposits at December 31, 2024.

At September 30, 2025, the balance of brokered time deposits remained below 10% of total assets, and the remaining weighted average duration was approximate ly three months with a weighted average rate o f 4.51%.

At September 30, 2025, our estimated uninsured deposits were $825.3 million, or approximately 35% of total deposits, compared to $737.6 million, or approximately 31% of our total deposits at December 31, 2024.

The estimates are based on the same methodologies and assumptions used for our regulatory reporting requirements.

The insured deposit data does not reflect an evaluation of all of the account ownership category distinctions that would determine the availability of deposit insurance to individual accounts based on FDIC regulations.

At June 30, 2025 , total borrowings include securities s old under agreements to repurchase, FHLB advances, subordinated debt issued in 2022, an d junior subordinated debentures assumed through acquisitions.

We had $11.0 million of securities sold under agreements to repurchase at June 30, 2025 and $8.4 million at December 31, 2024 .

Our advances from the FHLB were $70.0 million at June 30, 2025 , an increase of $2.8 million, compared to FHLB advances of $67.2 million at December 31, 2024 .

Based on original maturities, at June 30, 2025 , $10.0 million of our FHLB advances were short-term and $60.0 million were long-term, compared to $7.2 million short-term and $60.0 million long-term FHLB advances at December 31, 2024 .

The following table shows scheduled maturities of time deposits in excess of the FDIC insurance limit of $250,000 at September 30, 2025 and December 31, 2024 (dollars in thousands).

September 30, 2025

December 31, 2024

Time remaining until maturity

Three months or less

Over three months through six months

Over six months through twelve months

Over twelve months

At September 30, 2025 , total borrowings include securities s old under agreements to repurchase, FHLB advances, subordinated debt issued in 2022, an d junior subordinated debentures assumed through acquisitions.

We had $15.1 million of securities sold under agreements to repurchase at September 30, 2025 and $8.4 million at December 31, 2024 .

Our advances from the FHLB were $60.0 million at September 30, 2025 , a decrease of $7.2 million, compared to FHLB advances of $67.2 million at December 31, 2024 .

Based on original maturities, at September 30, 2025 , all of our FHLB advances were long-term, compared to $7.2 million short-term and $60.0 million long-term FHLB advances at December 31, 2024 .

FHLB advances are used to fund new loan and investment activity that is not funded by deposits or other borrowings.

On March 12, 2023, the Federal Reserve established the BTFP.

The BTFP was a one-year program which provided additional liquidity through borrowings for a term of up to one year secured by the pledging of certain qualifying securities and other assets valued at par.

The BTFP was a one-year program that provided additional liquidity through borrowings for a term of up to one year secured by the pledging of certain qualifying securities and other assets valued at par.

Beginning in the second quarter of 2023, we utilized the BTFP to secure fixed rate funding for a one-year term and reduce short-term FHLB advances, which are priced daily.

4 unchanged sentences

During the third quarter of 2024, we began paying down borrowings under the BTFP and repaid all of the remaining borrowings under the BTFP in the fourth quarter of 2024.

At June 30, 2025 and December 31, 2024, we had no outstanding borrowings under the BTFP.

At September 30, 2025 and December 31, 2024, we had no outstanding borrowings under the BTFP.

Typically, the main source of our short-term borrowings are advances from the FHLB ;

however, during the six months ended June 30, 2024, our primary source of short-term borrowings were borrowings under the BTFP due to more favorable rates.

however, during the three and nine months ended September 30, 2024, our primary source of short-term borrowings were borrowings under the BTFP due to more favorable rates.

The rate charged for advances from the FHLB is directly tied to the Federal Reserve’s federal funds target rate.

As previously discussed, the Federal Reserve target rate was 5.25% to 5.50% during first half of 2024 compared to 4.25% to 4.50% during first half of 2025.

The average balances and cost of short-term borrowings for the six months ended June 30, 2025 and 2024 are summarized in the table below (dollars in thousands).

As previously discussed, the Federal Reserve target rate was 4.00% to 4.25% at September 30, 2025 compared to 4.75% to 5.00% at September 30, 2024 .

The average balances and cost of short-term borrowings for the three and nine months ended September 30, 2025 and 2024 are summarized in the table below (dollars in thousands).

Average Balances

2 unchanged sentences

Cost of Short-term Borrowings

Three months ended June 30,

Six months ended June 30,

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Three months ended September 30,

Nine months ended September 30,

Federal funds purchased and short-term FHLB advances

2 unchanged sentences

Total short-term borrowings

The carrying value of the subordinated debt, which consists entirely of our 2032 Notes, was $16.7 million at June 30, 2025 and December 31, 2024 .

The $8.8 million and $8.7 million in junior subordinated debt at June 30, 2025 and December 31, 2024 , respectively, represent the junior subordinated debentures that we assumed through acquisitions.

The carrying value of the subordinated debt, which consists entirely of our 2032 Notes, was $16.7 million at September 30, 2025 and December 31, 2024 .

The $8.8 million and $8.7 million in junior subordinated debt at September 30, 2025 and December 31, 2024 , respectively, represent the junior subordinated debentures that we assumed through acquisitions.

For a description of the 2032 Notes , see our Annual Report, Part II.

1 unchanged sentence

Stockholders ’ Equity

Stockholders’ equity was $255.9 million at June 30, 2025 , an increase of $14.6 million compared to December 31, 2024 .

The increase is primarily attributable to $10.8 million of net income for the six months ended June 30, 2025 and a $6.7 million decrease in accumulated other comprehensive loss due to an increase in the fair value of the Bank’s AFS securities portfolio, partially offset by $2.1 million in dividends declared and $1.3 million for share repurchases.

Stockholders’ equity was $295.3 million at September 30, 2025 , an increase of $54.0 million compared to December 31, 2024 .

The increase was primarily attributable to the issuance of the Series A Preferred Stock, discussed above, $17.0 million of net income for the nine months ended September 30, 2025 and an $11.0 million decrease in accumulated other comprehensive loss due to an increase in the fair value of the Bank’s AFS securities portfolio, partially offset by $3.2 million in dividends declared on common stock, $1.6 million for share repurchases, and $0.5 million in dividends declared on the Series A Preferred Stock.

Results of Operations

4 unchanged sentences

The primary factors affecting net interest margin are changes in interest rates, competition, and the shape of the interest rate yield curve.

The Federal Reserve Board sets various benchmark rates, including the federal funds rate, and thereby influences the general market rates of interest, including the deposit and loan rates offered by financial institutions.

The Federal Reserve Board sets various benchmark rates, including the federal funds target rate, and thereby influences the general market rates of interest, including the deposit and loan rates offered by financial institutions.

The Federal Reserve increased the federal funds target rate four times during 2023, from 4.25% to 4.50%, to 5.25% to 5.50%.

During 2024, beginning in September, the Federal Reserve reduced the federal funds target rate three times by 100 basis points on a cumulative basis to 4.25% to 4.50%.

Accordingly, the prevailing federal funds target rate during three and six months ended June 30, 2025 was 100 basis points lower than during the three and six months ended June 30, 2024 .

During 2024, beginning in September, the Federal Reserve reduced the federal funds target rate three times by 100 basis points on a cumulative basis to 4.25% to 4.50% where it remained until September 2025.

In September 2025, the Federal Reserve reduced the federal funds target rate by 25 basis points to 4.00% to 4.25%.

Accordingly, the prevailing federal funds target rate during three and nine months ended September 30, 2025 was lower than during the three and nine months ended September 30, 2024 .

For additional discussion, see Certain Events That Affect Period-over-Period Comparability – Changing Inflation and Interest Rates.

Three months ended June 30, 2025 vs.

three months ended June 30, 2024 .

Net interest income increased 14.2% to $19.6 million for the three months ended June 30, 2025 compared to $17.2 million for the same period in 2024 .

The increase is primarily due to a lower average balance of short-term borrowings and a decrease in the rates paid on time deposits, partially offset by a lower average balance of loans and an increase in the average balance of and rates paid on interest-bearing demand deposits.

Average short-term borrowings decreased by $215.6 million for the three months ended June 30, 2025 , as we paid all remaining borrowings under the BTFP in the fourth quarter of 2024.

Three months ended September 30, 2025 vs.

three months ended September 30, 2024 .

Net interest income increased 18.5% to $21.2 million for the three months ended September 30, 2025 compared to $17.9 million for the same period in 2024 .

The increase was primarily due to a lower average balance of short-term borrowings and a decrease in the average balance of and rates paid on time deposits, partially offset by an increase in the average balance of and rates paid on interest-bearing demand deposits and a lower average balance of loans.

Average short-term borrowings decreased by $179.1 million for the three months ended September 30, 2025 , as we paid all remaining borrowings under the BTFP in the fourth quarter of 2024.

The lower average balance of, and a decrease in rates paid on, short-term borrowings resulted in a $2.2 million decrease in interest expense compared to the same period in 2024 .

A lower average balance of, and a decrease in rates paid on, time deposits resulted in a $1.9 million decrease in interest expense compared to the same period in 2024 .

Average loans decreased by $64.5 million for the three months ended June 30, 2025 in accordance with our strategy to optimize the balance sheet , which, in addition to lower loan yields, resulted in a $1.0 million decrease in interest income on loans compared to the same period in 2024 .

Average interest-bearing demand deposits increased by $136.0 million, which, combined with an increase in rates, resulted in a $1.3 million increase in interest expense in the second quarter of 2025 compared to the same period in 2024.

Average loans decreased by $18.1 million for the three months ended September 30, 2025 in accordance with our strategy to optimize the balance sheet , which, in addition to lower loan yields, resulted in a $0.2 million decrease in interest income on loans compared to the same period in 2024 .

Average interest-bearing demand deposits increased by $159.2 million, which, combined with an increase in rates, resulted in a $1.4 million increase in interest expense in the third quarter of 2025 compared to the same period in 2024.

Average noninterest-bearing deposits increased by $17.9 million.

Rates paid on interest-bearing liabilities decreased primarily as a result of the overall decrease in prevailing interest rates .

Our yield on interest-earning assets was flat as the decrease in the yield on loans was offset by an increase in the yield on the investment securities portfolio.

Interest income was $35.4 million for the three months ended June 30, 2025 , compared to $35.8 million for the same period in 2024 .

Loan interest income made up substantially all of our interest income for the three months ended June 30, 2025 and 2024 , although interest on investment securities contributed 10.3% of interest income during the second quarter of 2025 compared to 8.3% during the second quarter of 2024 .

Of the $0.4 million decrease in interest income, a decrease in interest income of $0.7 million can be attributed primarily to the decrease in the volume of loans, partially offset by an increase of $0.3 million, which can be attributed primarily to an increase in the yield earned on investment securities.

The overall yield on interest-earning assets was 5.45% for each the three months ended June 30, 2025 and 2024 .

The loan portfolio yielded 5.94% and 5.96% for the three months ended June 30, 2025 and June 30, 2024 , respectively, while the yield on the investment portfolio was 3.22% for the three months ended June 30, 2025 compared to 2.81% for the three months ended June 30, 2024 .

The overall yield on interest-earning assets was flat for the quarter ended June 30, 2025 compared to the quarter ended June 30, 2024 and was primarily driven by a 41 b asis point increase in the yield on the investment securities portfolio, offset by a two basis point decrease in the yield on the loan portfolio.

Interest expense was $15.7 million for the three months ended June 30, 2025 , a decrease of $2.9 million compared to interest expense of $18.6 million for the three months ended June 30, 2024 .

Our yield on interest-earning assets increased primarily due to an increase in the yield on the investment securities portfolio, partially offset by the decrease in the average balance of loans.

Interest income was $37.1 million for the three months ended September 30, 2025 , compared to $36.8 million for the same period in 2024 .

Loan interest income made up substantially all of our interest income for the three months ended September 30, 2025 and 2024 , although interest on investment securities contributed 10.2% of interest income during the third quarter of 2025 compared to 8.1% during the third quarter of 2024 .

Of the $0.2 million increase in interest income, an increase of $0.8 million can be attributed to a higher average balance of, and an increase in the yield earned on investment securities, partially offset by a decrease in interest income of $0.4 million, which can be attributed to decreases in the volume and yield earned on interest-earning balances with banks and a decrease in interest income of $0.2 million can be attributed primarily to the decrease in the volume of loans .

The overall yield on interest-earning assets was 5.53% and 5.51% for the three months ended September 30, 2025 and 2024 , respectively.

The loan portfolio yielded 6.03% and 6.04% for the three months ended September 30, 2025 and September 30, 2024 , respectively, while the yield on the investment portfolio was 3.28% for the three months ended September 30, 2025 compared to 2.82% for the three months ended September 30, 2024 .

The overall yield on interest-earning assets increased two basis points for the quarter ended September 30, 2025 compared to the quarter ended September 30, 2024 and was primarily driven by a 46 b asis point increase in the yield on the investment securities portfolio, partially offset by a one basis point decrease in the yield on the loan portfolio.

Interest expense was $15.9 million for the three months ended September 30, 2025 , a decrease of $3.1 million compared to interest expense of $19.0 million for the three months ended September 30, 2024 .

A decrease in interest expense of $1.8 million resulted from a decrease in the volume of interest-bearing liabilities, primarily short-term borrowings.

A decrease of $1.2 million resulted from the decrease in the cost of interest-bearing liabilities, primarily time deposits.

Average interest-bearing liabilities decreased by $75.7 million for the three months ended June 30, 2025 compared to the same period in 2024 , as average short-term borrowings decreased by $215.6 million while average interest-bearing deposits increased by $125.5 million , primarily due to increases in average interest-bearing demand deposits.

Average time deposits decreased, as we reduced rates on our time deposits during the second quarter of 2025 compared to the second quarter of 2024 due to lower prevailing market interest rates .

The cost of deposits decreased 32 basis points to 3.06% for the three months ended June 30, 2025 compared to 3.38% for the three months ended June 30, 2024 primarily as a result of a decrease in the cost of time deposits, partially offset by a higher average balance of, and an increase in the cost of, interest-bearing demand deposits.

The cost of interest-bearing liabilities decreased 45 basis points to 3.13% for the three months ended June 30, 2025 compared to 3.58% for the same period in 2024 , primarily due to a lower average balance of short-term borrowings and a decrease in the cost of time deposits, partially offset by a higher cost and average balance of interest-bearing demand deposits.

Net interest margin was 3.03% for the three months ended June 30, 2025 , an increase of 41 basis points from 2.62% for the three months ended June 30, 2024 .

Average interest-bearing liabilities decreased by $59.9 million for the three months ended September 30, 2025 compared to the same period in 2024 , as average short-term borrowings decreased by $179.1 million while average interest-bearing deposits increased by $105.6 million , primarily due to an increase in average interest-bearing demand deposits.

We increased rates on our interest-bearing demand deposits during the third quarter of 2025 compared to the third quarter of 2024 to attract and retain lower cost deposits relative to higher cost short-term borrowings .

Average time deposits decreased, as we reduced rates on our time deposits during the third quarter of 2025 compared to the third quarter of 2024 due to lower prevailing market interest rates .

The cost of deposits decreased 41 basis points to 3.04% for the three months ended September 30, 2025 compared to 3.45% for the three months ended September 30, 2024 primarily as a result of a lower average balance of, and a decrease in the cost of time deposits, partially offset by a higher average balance of, and an increase in the cost of, interest-bearing demand deposits.

The cost of interest-bearing liabilities decreased 50 basis points to 3.11% for the three months ended September 30, 2025 compared to 3.61% for the same period in 2024 , primarily due to a lower average balance of short-term borrowings and a decrease in the cost of time deposits, partially offset by a higher cost and average balance of interest-bearing demand deposits.

Net interest margin was 3.16% for the three months ended September 30, 2025 , an increase of 49 basis points from 2.67% for the three months ended September 30, 2024 .

The increase in net interest margin was primarily driven by a 50 basis point decrease in the cost of interest-bearing liabilities .

Average Balances and Yields .

The following table sets forth average balance sheet data, including all major categories of interest-earning assets and interest-bearing liabilities, together with the interest earned or paid and the average yield or rate paid on each such category for the three months ended June 30, 2025 and 2024 .

Averages presented in the table below are daily averages (dollars in thousands).

Three months ended June 30,

Three months ended September 30,

Yield/ Rate (1)

25 unchanged sentences

For additional information, see Discussion and Analysis of Financial Condition – Borrowings.

Three months ended June 30, 2025 vs.

Three months ended June 30, 2024

Three months ended September 30, 2025 vs.

Three months ended September 30, 2024

Interest income:

12 unchanged sentences

Changes in interest due to both volume and rate have been allocated entirely to rate.

Six months ended June 30, 2025 vs.

six months ended June 30, 2024 .

Net interest income increased 10.4% to $38.0 million for the six months ended June 30, 2025 compared to $34.4 million for the same period in 2024 .

Average short-term borrowings decreased by $200.9 million for the six months ended June 30, 2025 , as we paid all remaining borrowings under the BTFP in the fourth quarter of 2024.

Nine months ended September 30, 2025 vs.

nine months ended September 30, 2024 .

Net interest income increased 13.1% to $59.1 million for the nine months ended September 30, 2025 compared to $52.3 million for the same period in 2024 .

The increase was primarily due to a lower average balance of short-term borrowings and a lower average balance of, and a decrease in the rates paid on time deposits, partially offset by a lower average balance of loans and an increase in the average balance of, and rates paid on interest-bearing demand deposits.

Average short-term borrowings decreased by $193.6 million for the nine months ended September 30, 2025 , as we paid all remaining borrowings under the BTFP in the fourth quarter of 2024.

The lower average balance of, and a decrease in rates paid on, short-term borrowings resulted in a $7.1 million decrease in interest expense compared to the same period in 2024 .

A lower average balance of, and a decrease in rates paid on, time deposits resulted in a $4.4 million decrease in interest expense compared to the same period in 2024 .

Average loans decreased by $75.6 million for the six months ended June 30, 2025 in accordance with our strategy to optimize the balance sheet , which, in addition to lower loan yields, resulted in a $2.6 million decrease in interest income on loans compared to the same period in 2024 .

Average interest-bearing demand deposits increased by $113.6 million, which, combined with an increase in rates, resulted in a $2.2 million increase in interest expense in the first half of 2025 compared to the same period in 2024.

Average loans decreased by $56.2 million for the nine months ended September 30, 2025 in accordance with our strategy to optimize the balance sheet , which, in addition to lower loan yields, resulted in a $2.8 million decrease in interest income on loans compared to the same period in 2024 .

Average interest-bearing demand deposits increased by $129.0 million, which, combined with an increase in rates, resulted in a $3.6 million increase in interest expense for the nine months ended September 30, 2025 compared to the same period in 2024.

Average noninterest-bearing deposits increased by $14.3 million.

1 unchanged sentence

Our yield on interest-earning assets increased primarily due to an increase in yield on the investment securities portfolio.

Interest income was $69.8 million for the six months ended June 30, 2025 , compared to $71.5 million for the same period in 2024 .

Loan interest income made up substantially all of our interest income for the six months ended June 30, 2025 and 2024 , although interest on investment securities contributed 10.0% of interest income during the second quarter of 2025 compared to 8.4% during the second quarter of 2024 .

Interest income was $106.9 million for the nine months ended September 30, 2025 , compared to $108.4 million for the same period in 2024 .

Loan interest income made up substantially all of our interest income for the nine months ended September 30, 2025 and 2024 , although interest on investment securities contributed 10.1% of interest income during the third quarter of 2025 compared to 8.3% during the third quarter of 2024 .

Of the $1.5 million decrease in interest income, a decrease in interest income of $2.1 million can be attributed to the decrease in the volume of interest-earnings assets, primarily loans .

The overall yield on interest-earning assets was 5.42% and 5.41% for the six months ended June 30, 2025 and 2024 , respectively.

The loan portfolio yielded 5.91% and 5.93% for the six months ended June 30, 2025 and June 30, 2024 , respectively, while the yield on the investment portfolio was 3.16% for the six months ended June 30, 2025 compared to 2.81% for the six months ended June 30, 2024 .

The increase in the overall yield on interest-earning assets compared to the quarter ended June 30, 2024 was primarily driven by a 35 b asis point increase in the yield on the investment securities portfolio, partially offset by a two basis point decrease in the yield on the loan portfolio.

Interest expense was $31.8 million for the six months ended June 30, 2025 , a decrease of $5.3 million compared to interest expense of $37.1 million for the six months ended June 30, 2024 .

A decrease in interest expense of $3.6 million resulted from a decrease in volume of interest-bearing liabilities, primarily short-term borrowings, partially offset by an increase in volume of interest-bearing demand deposits.

A decrease in interest expense of $1.7 million resulted from the decrease in the cost of interest-bearing liabilities, primarily time deposits, partially offset by an increase in the cost of interest-bearing demand deposits.

Average interest-bearing liabilities decreased by $85.4 million for the six months ended June 30, 2025 compared to the same period in 2024 , as average short-term borrowings decreased by $200.9 million while average interest-bearing deposits increased by $103.8 million.

We reduced rates on our time deposits during the six months ended June 30, 2025 compared to the t o the same period in 2024 due to lower prevailing market interest rates .

We increased rates on our interest-bearing demand deposits during the six months ended June 30, 2025 compared to the t o the same period in 2024 to attract and retain lower cost deposits relative to higher cost short-term borrowings .

The cost of deposits decreased 24 basis points to 3.10% for the six months ended June 30, 2025 compared to 3.34% for the six months ended June 30, 2024 primarily as a result of a lower average balance of time deposits, partially offset by a higher average balance of, and an increase in the cost of, interest-bearing demand deposits.

The cost of interest-bearing liabilities decreased 36 basis points to 3.18% for the six months ended June 30, 2025 compared to 3.54% for the same period in 2024 , primarily due to a lower average balance of short-term borrowings and a decrease in the cost of time deposits, partially offset by a higher cost and average balance of interest-bearing demand deposits.

Net interest margin was 2.95% for the six months ended June 30, 2025 , an increase of 34 basis points from 2.61% for the six months ended June 30, 2024 .

The overall yield on interest-earning assets was 5.46% and 5.45% for the nine months ended September 30, 2025 and 2024 , respectively.

The loan portfolio yielded 5.95% and 5.96% for the nine months ended September 30, 2025 and September 30, 2024 , respectively, while the yield on the investment portfolio was 3.20% for the nine months ended September 30, 2025 compared to 2.81% for the nine months ended September 30, 2024 .

The increase in the overall yield on interest-earning assets compared to the quarter ended September 30, 2024 was primarily driven by a 39 b asis point increase in the yield on the investment securities portfolio, partially offset by a one basis point decrease in the yield on the loan portfolio.

Interest expense was $47.7 million for the nine months ended September 30, 2025 , a decrease of $8.3 million compared to interest expense of $56.1 million for the nine months ended September 30, 2024 .

A decrease in interest expense of $5.4 million resulted from a decrease in volume of interest-bearing liabilities, primarily short-term borrowings and time deposits, partially offset by an increase in volume of interest-bearing demand deposits and long-term debt.

A decrease in interest expense of $3.0 million resulted from the decrease in the cost of interest-bearing liabilities, primarily time deposits and brokered time deposits, partially offset by an increase in the cost of interest-bearing demand deposits.

Average interest-bearing liabilities decreased by $76.8 million for the nine months ended September 30, 2025 compared to the same period in 2024 , as average short-term borrowings decreased by $193.6 million while average interest-bearing deposits increased by $104.5 million.

We reduced rates on our time deposits during the nine months ended September 30, 2025 compared to the t o the same period in 2024 due to lower prevailing market interest rates .

We increased rates on our interest-bearing demand deposits during the nine months ended September 30, 2025 compared to the t o the same period in 2024 to attract and retain lower cost deposits relative to higher cost short-term borrowings .

The cost of deposits decreased 30 basis points to 3.08% for the nine months ended September 30, 2025 compared to 3.38% for the nine months ended September 30, 2024 primarily as a result of a lower average balance of, and a decrease in the cost of, time deposits, partially offset by a higher average balance of, and an increase in the cost of, interest-bearing demand deposits.

The cost of interest-bearing liabilities decreased 42 basis points to 3.15% for the nine months ended September 30, 2025 compared to 3.57% for the same period in 2024 , primarily due to a lower average balance of short-term borrowings and a lower average balance of, and a decrease in the cost of, time deposits, partially offset by a higher cost and average balance of interest-bearing demand deposits.

Net interest margin was 3.02% for the nine months ended September 30, 2025 , an increase of 39 basis points from 2.63% for the nine months ended September 30, 2024 .

The increase in net interest margin was primarily driven by a 42 basis point decrease in the cost of interest-bearing liabilities and a one basis point increase in the yield on interest-ear ning assets .

Average Balances and Yields .

Averages presented in the table below are daily averages (dollars in thousands).

Six months ended June 30,

Nine months ended September 30,

Yield/ Rate (1)

25 unchanged sentences

For additional information, see Discussion and Analysis of Financial Condition – Borrowings.

Six months ended June 30, 2025 vs.

Six months ended June 30, 2024

Nine months ended September 30, 2025 vs.

Nine months ended September 30, 2024

Interest income:

15 unchanged sentences

We expect to continue to develop new products that generate noninterest income, and enhance our existing products, in order to diversify our revenue sources.

Three months ended June 30, 2025 vs.

three months ended June 30, 2024 .

Total noninterest income decreased $0.1 million, or 4.5% , to $2.6 million for the three months ended June 30, 2025 compared to $2.8 million for the three months ended June 30, 2024 .

The decrease in noninterest income wa s primarily attributable to a $0.7 million decrease in gain on sale of other real estate owned, which was realized in second quarter 2024 on the sale of certain property related to one loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida, partially offset by a $0.4 million decrease in loss on call or sale of investment securities, and a $0.1 million increase in other operating income.

The increase in other operating income is primarily attributable to $0.3 million of insurance proceeds received in second quarter 2025 for damages to a property recorded in other real estate owned, also related to the loan relationship described above, and a $0.1 million increase in distributions from other investments, partially offset by a $0.1 million decrease in derivative fee income and a $0.1 million decrease in the change in net asset value of other investments.

Six months ended June 30, 2025 vs.

six months ended June 30, 2024 .

Total noninterest income decreased $0.9 million, or 15.7% , to $4.6 million for the six months ended June 30, 2025 compared to $5.5 million for the six months ended June 30, 2024 .

The decrease in noninterest income wa s primarily attributable to a $0.7 million decrease in gain on sale of other real estate owned, described above, and a $0.4 million decrease in gain on sale or disposition of fixed assets, partially offset by a $0.4 million decrease in loss on call or sale of investment securities.

Three months ended September 30, 2025 vs.

three months ended September 30, 2024 .

Total noninterest income decreased $0.6 million, or 15.8% , to $3.0 million for the three months ended September 30, 2025 compared to $3.5 million for the three months ended September 30, 2024 .

The decrease in noninterest income w as primarily attributable to $1.1 million in income from a legal settlement recorded in the third quarter of 2024 related to one loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida, partially offset by a $0.4 million increase in other operating income and a $0.1 million increase in gain on sale of other real estate owned.

The increase in other operating income was primarily attributable to a $0.4 million increase in distributions from other investments.

Nine months ended September 30, 2025 vs.

nine months ended September 30, 2024 .

Total noninterest income decreased $1.4 million, or 15.7% , to $7.6 million for the nine months ended September 30, 2025 compared to $9.0 million for the nine months ended September 30, 2024 .

The decrease in noninterest income w as primarily attributable to $1.1 million in income from a legal settlement recorded in the third quarter of 2024, discussed above, a $0.6 million decrease in gain on sale of other real estate owned and a $0.4 million decrease in gain on sale or disposition of fixed assets, partially offset by a $0.4 million decrease in loss on call or sale of investment securities and a $0.4 million increase in other operating income.

During the second quarter of 2024, we realized a $0.7 million gain on other real estate owned on the sale of certain property related to one loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida.

During the first quarter of 2024, we recorded a $0.4 million gain on sale or disposition of fixed assets as a result of the closure of one branch in the Alabama market.

A $0.1 million decrease in other operating income is primarily attributable to a $0.2 million decrease in the change in net asset value of other investments and a $0.2 million decrease in derivative fee income, partially offset by $0.3 million of insurance proceeds received for damages to a property recorded in other real estate owned, as described above.

The increase in other operating income was primarily attributable to a $0.5 million increase in distributions from other investments and $0.3 million of insurance proceeds received in second quarter 2025 for damages to a property recorded in other real estate owned, partially offset by a $0.2 million decrease in the change in net asset value of other investments and a $0.2 million decrease in derivative fee income.

Noninterest Expense

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Our goal is to manage our costs within the framework of our operating strategy of generating consistent, quality earnings.

Three months ended June 30, 2025 vs.

three months ended June 30, 2024 .

Total noninterest expense was $16.7 million for the three months ended June 30, 2025 , an increase of $1.2 million, or 7.9% , compared to the same period in 2024 .

The increase was primarily driven by a $0.7 million increase in salaries and employee benefits, a $0.3 million decrease in gain on early extinguishment of subordinated debt, and a $0.2 million increase in acquisition expense.

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 health insurance claims.

During the second quarter of 2024, we repurchased $5.0 million in principal amount of our 2029 Notes and $2.0 million in principal amount of our 2032 Notes and recognized a gain on early extinguishment of subordinated debt of $0.3 million.

The increase in acquisition expense is related to the WFB transaction, discussed above.

A $0.1 million increase in other operating expenses resulted primarily from a $0.3 million write down in the second quarter 2025 of other real estate owned related to the loan relationship discussed above and a former branch location.

Six months ended June 30, 2025 vs.

six months ended June 30, 2024 .

Total noninterest expense was $32.9 million for the six months ended June 30, 2025 , an increase of $2.2 million, or 7.0% , compared to the same period in 2024 .

The increase was primarily driven by a $1.0 million increase in salaries and employee benefits, a $0.5 million decrease in gain on early extinguishment of subordinated debt, a $0.3 million increase in acquisition expense, a $0.2 million increase in professional fees and a $0.2 million increase in other operating expense, partially offset by a $0.2 million decrease in depreciation and amortization.

Three months ended September 30, 2025 vs.

three months ended September 30, 2024 .

Total noninterest expense was $16.5 million for the three months ended September 30, 2025 , an increase of $0.3 million, or 2.1% , compared to the same period in 2024 .

The increase w as primarily driven by a $0.3 million increase in salaries and employee benefits and a $0.2 million increase in acquisition expense, partially offset by a $0.1 million decrease in other operating expenses and a $0.1 million decrease in depreciation and amortization.

The increase in salaries and employee benefits was primarily due to investment in people with an emphasis on our Texas markets to remix and strengthen our balance sheet and an increase in health insurance claims.

The increase in acquisition expense was related to the WFB transaction announced on July 1, 2025.

The decrease in other operating expenses resulted from $0.3 million in collection and repossession expenses recorded in the third quarter of 2024 related to the income from the legal settlement, discussed above, and a $0.1 million decrease in FDIC assessments, partially offset by a $0.1 million increase in write down of other real estate owned and a $0.1 million increase in branch services expense.

Nine months ended September 30, 2025 vs.

nine months ended September 30, 2024 .

Total noninterest expense was $49.5 million for the nine months ended September 30, 2025 , an increase of $2.5 million, or 5.3% , compared to the same period in 2024 .

The increase was primarily driven by a $1.3 million increase in salaries and employee benefits, a $0.6 million increase in acquisition expense, a $0.5 million decrease in gain on early extinguishment of subordinated debt, and a $0.2 million increase in professional fees, partially offset by a $0.2 million decrease in depreciation and amortization.

During the first half of 2024, we repurchased $5.0 million in principal amount of our 2029 Notes and $3.0 million in principal amount of our 2032 Notes and recognized a gain on early extinguishment of subordinated debt of $0.5 million.

The increase in acquisition expense is related to the WFB transaction, discussed above.

The increase in other operating expense resulted from a $0.2 million increase in branch services expense and a $0.2 million increase in collection and repossession expenses.

During the first quarter of 2025, we recorded a $3.3 million recovery of loans previously charged off as a result of a property insurance settlement related to a loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida.

The increase in collection and repossession expenses was primarily due to this property insurance settlement.

The decrease in depreciation and amortization is primarily due to the closure of one branch location in the first quarter of 2024.

The increase in acquisition expense was related to the WFB transaction, discussed above.

The decrease in depreciation and amortization was primarily due to the closure of one branch location in the first quarter of 2024.

Income Tax Expense

Income tax expense for the three months ended June 30, 2025 and 2024 was $0.9 million and $0.8 million, respectively.

The effective tax rate for the three months ended June 30, 2025 and 2024 was 17.2% and 17.0% , respectively.

Income tax expense for the six months ended June 30, 2025 and 2024 was $2.4 million and $2.2 million, respectively .

The effective tax rate for the six months ended June 30, 2025 and 2024 was 17.9% and 20.1% , respectively.

Income tax expense for the three months ended September 30, 2025 and 2024 was $1.3 million and $0.8 million, respectively.

The effective tax rate for the three months ended September 30, 2025 and 2024 was 17.3% and 12.7% , respectively.

Income tax expense for the nine months ended September 30, 2025 and 2024 was $3.6 million and $3.0 million, respectively .

The effective tax rate for the nine months ended September 30, 2025 and 2024 was 17.7% and 17.5% , respectively.

During the third quarter of 2024, we revised our estimated 2024 annual effective tax rate to account for our projected increase in nontaxable income from BOLI in the fourth quarter of approximately $3.1 million upon receipt of death benefit proceeds.

During the first quarter of 2024, we surrendered approximately $8.4 million of BOLI contracts and reinvested the proceeds in higher yielding policies, which resulted in $0.3 million of income tax expense.

The restructuring had an expected earn-back period of just over one year.

For the three and nine months ended September 30, 2025 , and the effective tax rate differed from the statutory tax rate of 21% primarily due to tax-exempt interest income earned on certain loans and investment securities and income from BOLI.

For the three months ended September 30, 2024 , the effective tax rate differed from the statutory tax rate of 21% primarily due to the revision of our estimated 2024 annual effective tax rate, discussed above, tax-exempt interest income earned on certain loans and investment securities and income from BOLI.

For the nine months ended September 30, 2024 , the effective tax rate differed from the statutory tax rate of 21% primarily due to the revision of our estimated 2024 annual effective tax rate, discussed above, tax-exempt interest income earned on certain loans and investment securities and income from BOLI, partially offset by the surrender of BOLI contracts.

On July 4, 2025, the OBBBA, which contains a broad range of tax reform provisions affecting businesses, was signed into law.

Since the bill was signed after the close of the quarter, no financial statement impact was reflected in the second quarter of 2025.

We are currently evaluating the impact of the OBBBA on the consolidated financial statements an d do not believe it will have a material impact.

While the details are still under review, we do not expect a significant impact on 2025 income tax expense.

The OBBBA did not have a material impact on the consolidated financial statements in the third quarter of 2025, and we do not expect a significant impact on 2025 income tax expense.

Risk Management

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Although some value may be recovered on such a loan, it is not significant in relation to the amount borrowed.

At June 30, 2025 and December 31, 2024 , there were no loans classified as loss or doubtful, $31.6 million and $32.7 million, respectively, of loans classified as substandard, and $10.4 million and $7.8 million, respectively, of loans classified as special mention.

At September 30, 2025 and December 31, 2024 , there were no loans classified as loss or doubtful, $30.9 million and $32.7 million, respectively, of loans classified as substandard, and $10.2 million and $7.8 million, respectively, of loans classified as special mention.

An independent loan review is conducted annually, whether internally or externally, on at least 40% of commercial loans utilizing a risk-based approach designed to maximize the effectiveness of the review.

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The CECL methodology requires that lifetime expected credit losses be recorded at the time the financial asset is originated or acquired and be adjusted each period through a provision for credit losses for changes in the expected lifetime credit losses .

The ACL was $26.6 million and $26.7 million at June 30, 2025 and December 31, 2024 , respectively.

The ACL was $26.5 million and $26.7 million at September 30, 2025 and December 31, 2024 , respectively.

We maintain a separate ACL on unfunded loan commitments, which is included in “Accrued taxes and other liabilities” in the accompanying consolidated balance sheets.

The ACL is generally increased by the provision for credit losses and decreased by charge-offs, net of recoveries.

The provision for credit losses for the three months ended June 30, 2025 was primarily due to changes in the economic forecast and loan mix.

The negative provision for credit losses for the six months ended June 30, 2025 was primarily due to a $3.3 million recovery during the first quarter of 2025 of loans previously charged off as a result of a property insurance settlement related to one loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida .

The negative provision for credit losses for the three months ended June 30, 2024 was primarily due to a decrease in total loans and aging of existing loans.

The provision for credit losses for the three months ended September 30, 2025 was primarily due to loan growth partially offset by changes in the economic forecast and loan mix.

The negative provision for credit losses for the nine months ended September 30, 2025 was primarily due to a $3.3 million recovery during the first quarter of 2025 of loans previously charged off as a result of a property insurance settlement related to one loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida .

The negative provision for credit losses for the three months 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 negative provision for credit losses for the nine months ended September 30, 2024 was primarily due to net recoveries, a decrease in total loans, aging of existing loans, an improvement in the economic forecast and, to a lesser extent, the completion of our annual CECL allowance model recalibration, which resulted in lower historical loss rates.

We complete our annual model recalibration process in the first quarter of each year.

Our annual review includes peer group analysis, updates to our probability of default and loss-given default models, including prepayment and curtailment assumptions, and qualitative factor scorecard ranges, as needed.

The changes resulting from the model recalibration reduced the ACL by approximately $0.5 million during each of the six months ended June 30, 2025 and 2024.

The changes resulting from the model recalibration reduced the ACL by approximately $0.5 million during each of the nine months ended September 30, 2025 and 2024.

Refer to Note 1.

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The following table presents the allocation of the ACL by loan category and the percentage of loans in each loan category to total loans as of the dates indicated (dollars in thousands).

June 30, 2025

September 30, 2025

December 31, 2024

8 unchanged sentences

The following table presents the amount of the ACL allocated to each loan category as a percentage of total loans as of the dates indicated.

June 30, 2025

September 30, 2025

December 31, 2024

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The table below reflects the activity in the ACL and key ratios for the periods indicated (dollars in thousands).

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Allowance at beginning of period

Provision for credit losses on loans (1)

Net recoveries (charge-offs)

Net (charge-offs) recoveries

Allowance at end of period

4 unchanged sentences

Nonaccrual loans to total loans - period end

For the three months ended June 30, 2025, the $0.1 milli on provision for credit losses on the consolidated statement of income includes a $0.2 million provision for loan losses and a $31,000 negative provision for u nfunded loan commitments.

For the six months ended June 30, 2025, the $3.5 million negative provision for credit losses on the consolidated statement of income includes a $3.5 million negative provision for loan losses and a $68,000 provision for unfunded loan commitments.

For the three months ended June 30, 2024, the $0.4 million negative provision for credit losses on the consolidated statement of income includes a $0.3 million negative provision for loan losses and a $0.1 million negative provision for unfunded loan commitments.

For the six months ended June 30, 2024, the $1.8 million negative provision for credit losses on the consolidated statement of income includes a $1.7 million negative provision for loan losses and a $0.1 million negative provision for unfunded loan commitments.

The ACL to total loans decreased to 1.26% at June 30, 2025 compared to 1.32% at June 30, 2024 , and the ACL to nonaccrual loans ratio decreased to 357.2% at June 30, 2025 compared to 582.7% at June 30, 2024 .

The decrease in the ACL to total loans compared to June 30, 2024 is primarily due to a decrease in total loans, aging of existing loans and an improvement in the economic forecast .

The decrease in ACL to nonaccrual loans compared to June 30, 2024 is primarily due to an increase in nonaccrual loans.

Nonaccrual loans were $7.5 million, or 0.35% of total loans, at June 30, 2025 , an increase of $2.5 million compared to $4.9 million, or 0.23% of total loans, at June 30, 2024 .

The increase in nonaccrual loans is primarily a ttributable to one owner-occupied commercial relationship totaling $1.3 million and one 1-4 family loan relationship totaling $0.8 million .

For the three months ended September 30, 2025, the $0.1 million provision for credit losses on the consolidated statement of income includes a $0.1 million n egative provision for loan losses and a $0.2 million provision for unfunded loan com mitments.

For the nine months ended September 30, 2025, the $3.3 million negative provision for credit losses on the consolidated statement of income includes a $3.6 millio n negative provision for loan losses and a $0.3 million provision for un funded loan commitments.

For the three months ended September 30, 2024, the $0.9 million negative provision for credit losses on the consolidated statement of income includes a $0.9 million negative provision for loan losses and a $40,000 negative provision for unfunded loan commitments.

For the nine months ended September 30, 2024, the $2.8 million negative provision for credit losses on the consolidated statement of income includes a $2.6 million negative provision for loan losses and a $0.2 million negative provision for unfunded loan commitments.

The ACL to total loans decreased to 1.23% at September 30, 2025 compared to 1.30% at September 30, 2024 , and the ACL to nonaccrual loans ratio decreased to 344.7% at September 30, 2025 compared to 682.0% at September 30, 2024 .

The decrease in the ACL to total loans compared to September 30, 2024 was primarily due to a decrease in total loans, aging of existing loans and an improvement in the economic forecast .

The decrease in ACL to nonaccrual loans compared to September 30, 2024 was primarily due to an increase in nonaccrual loans.

Nonaccrual loans were $7.7 million, or 0.36% of total loans, at September 30, 2025 , an increase of $3.6 million compared to $4.1 million, or 0.19% of total loans, at September 30, 2024 .

The increase in nonaccrual loans was primarily a ttributable to one nonowner-occupied commercial relationship totaling $1.7 million, owner-occupied commercial relationships totaling $2.1 million and one 1-4 family loan relationship totaling $0.8 million, partially offset by the transfer of a $0.7 million 1-4 family loan to other real estate owned .

The following table presents the allocation of net (charge-offs) recoveries by loan category for the periods indicated (dollars in thousands).

Three months ended June 30,

Three months ended September 30,

Net Recoveries (Charge-offs)

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Ratio of Net Charge-offs (Recoveries) to Average Loans

Net (Charge-offs) Recoveries

Net Recoveries (Charge-offs)

Average Balance

4 unchanged sentences

Commercial and industrial

Six months ended June 30,

Nine months ended September 30,

Net Recoveries (Charge-offs)

1 unchanged sentence

Ratio of Net Charge-offs (Recoveries) to Average Loans

Net (Charge-offs) Recoveries

Net Recoveries (Charge-offs)

Average Balance

6 unchanged sentences

Net charge-offs include recoveries of amounts previously charged off.

For the three months ended June 30, 2025, net recoveries were $13,000 , or less than 0.01%, of the average loan balance for the period.

For the six months ended June 30, 2025 , net recoveries were $3.4 million, or 0.16%, of the average loan balance for the period.

Net recoveries during the six months ended June 30, 2025 were primarily the result of a property insurance settlement related to a loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida .

Net charge-offs for the three and six months ended June 30, 2024 were $0.2 million, or 0.01% , of the average loan balance for the period.

Net charge-offs during the three and six months ended June 30, 2024 were primarily attributable to construction and development and 1-4 family loans.

Management believes the ACL at June 30, 2025 is sufficient to provide adequate protection against losses in our portfolio.

For the three months ended September 30, 2025, net charge-offs were $64,000 , or less than 0.01%, of the average loan balance for the period.

For the nine months ended September 30, 2025 , net recoveries were $3.4 million, or 0.16%, of the average loan balance for the period.

Net recoveries during the nine months ended September 30, 2025 were primarily the result of a property insurance settlement related to a loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida .

Net recoveries for the three and nine months ended September 30, 2024 were $0.4 million and $0.2 million, or 0.02% and 0.01% , respectively, of the average loan balance for the period.

Net recoveries during the three and nine months ended September 30, 2024 were primarily attributable to construction and development loans.

Management believes the ACL at September 30, 2025 is sufficient to provide adequate protection against losses in our portfolio.

However, there can be no assurance that this allowance will prove to be adequate over time to cover ultimate losses in connection with our loans.

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A loan may be returned to accrual status when all the principal and interest amounts contractually due are brought current and future principal and interest amounts contractually due are reasonably assured, which is typically evidenced by a sustained period of repayment performance by the borrower.

Nonperforming loans were $7.5 million, or 0.36% of total loans, at June 30, 2025 , a decrease of $1.3 million compared to $8.8 million, or 0.42% of total loans, at December 31, 2024 .

The decrease in nonperforming loans compared to December 31, 2024 is mainly attributable to paydowns.

Nonperforming loans were $7.7 million, or 0.36% of total loans, at September 30, 2025 , a decrease of $1.1 million compared to $8.8 million, or 0.42% of total loans, at December 31, 2024 .

The decrease in nonperforming loans compared to December 31, 2024 is mainly attributable to paydowns and the transfer of a $0.7 million 1-4 family loan to other real estate owned .

Loan Modifications to Borrowers Experiencing Financial Difficulty.

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Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is written off.

During the six months ended June 30, 2025 and 2024 , we did not provide any modifications under these circumstances to borrowers experiencing financial difficulty.

During the nine months ended September 30, 2025 and 2024 , we did not provide any modifications under these circumstances to borrowers experiencing financial difficulty.

Other Real Estate Owned.

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Real property no longer used in the Bank’s business operations is recorded at the lower of its net book value or fair value at the date of transfer to other real estate owned.

For the six months ended June 30, 2025 , additions to other real estate owned were $1.0 million, which were driven by transfers of commercial real estate loans to other real estate owned.

O ther real estate owned with a cost basis of $0.2 million wa s sold during the three and six months ended June 30, 2025 and 2024 , resulting in a gain of $29,000 for the periods.

During the three and six months ended June 30, 2025 , we recorded $0.3 million of write-downs of other real estate owned r elated to a property that was part of the loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida and a former branch location based on a third-party appraisal.

During the six months ended June 30, 2024 , we recorded a $0.2 million write-down of other real estate owned primarily related to a former branch location based on a third-party appraisal.

Other real estate owned with a cost basis of $1.1 million was sold during the three and six months ended June 30, 2024 resulting in a gain of $0.7 million for the periods, related to the loan relationship described above.

At June 30, 2025 , approximately $2.2 million of loans secured by 1-4 family residential property were in the process of foreclosure.

For the nine months ended September 30, 2025 , additions to other real estate owned were $1.7 million, which were driven by transfers of commercial real estate and 1-4 family loans to other real estate owned.

O ther real estate owned with a cost basis of $1.6 million and $1.8 million was sold during the three and nine months ended September 30, 2025 and 2024 , respectively, resulting in a gain of $0.1 million for both periods.

During the three months ended September 30, 2025 , we recorded $0.1 million of write-downs of other real estate owned r elated to a 1-4 family property .

During the nine months ended September 30, 2025 , we recorde d $0.4 million of write-downs of other real estate owned r elated to a property that was part of the loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida, a former branch location based on a third-party appraisal, and a 1-4 family property.

For the nine months ended September 30, 2024 , additions to other real estate owned were $1.8 million, which were primarily driven by transfers of 1-4 family loans to other real estate owned.

During the nine months ended September 30, 2024 , we recorded a $0.2 million write-down of other real estate owned primarily related to a former branch location based on a third-party appraisal.

Other real estate owned with a cost basis of $0.2 million and $1.3 million was sold during the three and nine months ended September 30, 2024 , respectively, resulting in a loss of $4,000 and a gain of $0.7 million, respectively, for the periods.

At September 30, 2025 , approximately $1.7 million of loans secured by 1-4 family residential property were in the process of foreclosure.

The table below provides details of our other real estate owned as of the dates indicated (dollars in thousands).

June 30, 2025

September 30, 2025

December 31, 2024

3 unchanged sentences

Changes in our other real estate owned are summarized in the table below for the periods indicated (dollars in thousands).

Six months ended June 30,

Nine months ended September 30,

Balance, beginning of period

6 unchanged sentences

In response to higher inflation, the Federal Reserve increased the federal funds target rate during 2022 and 2023 as discussed in Certain Events That Affect Period-over-Period Comparability – Changing Inflation and Interest Rates , which generally increased the amount we earn on our interest-earning assets but also increased the amount we pay on our interest-bearing liabilities as discussed throughout this report.

We believe that higher rates resulting from inflation and related factors led to constrained loan demand during 2023 and 2024 and through June 30, 2025 .

We believe that higher rates resulting from inflation and related factors led to constrained loan demand during 2023 and 2024 and through September 30, 2025 .

When the rate of inflation accelerates, there is an erosion of consumer and customer purchasing power.

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As noted above, the rate of inflation generally declined after June 2022.

In response, from September 2024 to December 2024, the Federal Reserve reduced the federal funds target rate by 100 basis points to 4.25% to 4.50%, where it remained as of August 6, 2025.

In response, from September 2024 to December 2024, the Federal Reserve reduced the federal funds target rate by 100 basis points to 4.25% to 4.50%.

In September 2025, the Federal Reserve reduced the federal funds target rate by 25 basis points to 4.00% to 4.25%.

On October 29, 2025, the Federal Reserve reduced the federal funds target rate by 25 basis points to 3.75% to 4.00%, where it remained as of November 5, 2025.

The inflationary outlook in the U.S.

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The goal of our asset/liability management is for the Bank to maintain a net interest income at risk in an up or down 100 basis point environment at less than (5)%.

At June 30, 2025 , the Bank was within the policy guidelines for asset/liability management.

At September 30, 2025 , the Bank was within the policy guidelines for asset/liability management.

The table below de picts the estimated impact on net interest income of immediate changes in interest rates at the specified levels.

As of June 30, 2025

As of September 30, 2025

Changes in Interest Rates (in basis points)

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Maintaining the ability to acquire these funds as needed in a variety of markets, and within ALCO compliance targets, is essential to ensuring our liquidity.

At June 30, 2025 and December 31, 2024 , 69% and 68%, respectively, of our total assets were funded by core deposits.

At September 30, 2025 and December 31, 2024 , 70% and 68%, respectively, of our total assets were funded by core deposits.

Our investment portfolio is another alternative for meeting our cash flow requirements.

Investment securities generate cash flow through interest payments, principal payments and maturities, and they generally have readily available markets that allow for their conversion to cash.

At June 30, 2025 , 90% of our investment securities portfolio was classified as AFS, and we had gross unrealized losses in our AFS investment securities portfolio of $53.4 million and gross unrealized gains of $0.5 million.

At September 30, 2025 , 89% of our investment securities portfolio was classified as AFS, and we had gross unrealized losses in our AFS investment securities portfolio of $48.5 million and gross unrealized gains of $1.0 million.

The sale of securities in a loss position would cause us to record a loss on sale of investment securities in noninterest income in the period during which the securities were sold.

Some securities are pledged to secure certain deposit types or short-term borrowings, such as FHLB advances, which impacts their liquidity.

At June 30, 2025 , securities with a carrying value of $40.8 million were pledged to secure certain deposits, borrowings, and other liabilities, compared to $68.1 million i n pledged securities at December 31, 2024.

At September 30, 2025 , securities with a carrying value of $65.5 million were pledged to secure certain deposits, borrowings, and other liabilities, compared to $68.1 million i n pledged securities at December 31, 2024.

Other sources available for meeting liquidity needs include advances from the FHLB, repurchase agreements and other borrowings.

FHLB advances may be used to meet day to day liquidity needs, particularly if the prevailing interest rate on an FHLB advance compares favorably to the rates that we would be required to pay to attract deposits.

At June 30, 2025 , the balanc e of our outstanding advances with the FHLB was $70.0 million, consisting of $10.0 million short-term and $60.0 million long-term advances based on original maturities , an increase of $2.8 million, compared to $67.2 million, consisting of $7.2 million short-term and $60.0 million long-term advances based on original maturities, at December 31, 2024.

The total amount of remaining credit available to us from the FHLB at June 30, 2025 was $705.0 million .

At June 30, 2025 , our FHLB borrowings were collateralized by a blanket pledge of certain loans totaling approximately $954.2 million .

At September 30, 2025 , the balanc e of our outstanding advances with the FHLB was $60.0 million, consisting of $60.0 million long-term advances based on original maturities , a decrease of $7.2 million, compared to $67.2 million, consisting of $7.2 million short-term and $60.0 million long-term advances based on original maturities, at December 31, 2024.

The total amount of remaining credit available to us from the FHLB at September 30, 2025 was $713.7 million .

At September 30, 2025 , our FHLB borrowings were collateralized by a blanket pledge of certain loans totaling approximately $944.2 million .

Repurchase agreements are contracts for the sale of securities which we own with a corresponding agreement to repurchase those securities at an agreed upon price and date.

Our policies limit the use of repurchase agreements to those collateralized by investment securities.

We had $11.0 milli on of repurchase agreements outstanding at June 30, 2025 and $8.4 million at December 31, 2024 .

We had $15.1 milli on of repurchase agreements outstanding at September 30, 2025 and $8.4 million at December 31, 2024 .

We maintain unsecured lines of credit with First National Bankers Bank and The Independent Bankers Bank totaling $60.0 million.

1 unchanged sentence

The lines of credit mature at various times within the next year.

There were no outstanding balances on our unsecured lines of credit at June 30, 2025 and December 31, 2024 .

At June 30, 2025 , we held $55.2 million of cash and cash equivalents and maintained approximate ly $705.0 million of available funding from FHLB advances and maintained $60.0 million in unsecured lines of credit with correspondent banks.

Cash and cash equivalents at June 30, 2025 included $17.3 million in advanced proceeds from the sale of our Series A Preferred Stock, which closed on July 1, 2025.

Cash and cash equivalents and available funding represent 104% of uninsured deposits of $785.7 million at June 30, 2025 .

In addition, at June 30, 2025 and December 31, 2024 , we had $17.0 million in aggregate principal amount of subordinated debt outstanding, consisting entirely of our 2032 Notes.

There were no outstanding balances on our unsecured lines of credit at September 30, 2025 and December 31, 2024 .

At September 30, 2025 , we held $35.4 million of cash and cash equivalents and maintained approximate l y $713.7 million of available funding from FHLB advances and maintained $60.0 million in unsecured lines of credit with correspondent banks.

Cash and cash equivalents and available funding represent 98% of uninsured deposits of $825.3 million at September 30, 2025 .

In addition, at September 30, 2025 and December 31, 2024 , we had $17.0 million in aggregate principal amount of subordinated debt outstanding, consisting entirely of our 2032 Notes.

For additional information on our 2032 Notes, see our Annual Report, Part II.

3 unchanged sentences

Although we cannot directly control the types of deposit instruments our customers choose, we can influence those choices with the interest rates and deposit specials we offer.

In recent years, the proportion of our deposits represented by noninterest-bearing deposits has declined primarily due to rising market interest rates as customers have migrated to higher yielding alternatives , although such proportion increased as of the end of second quarter 2025 as rates declined in the latter part of 2024 .

At June 30, 2025 , we held $256.1 million of brokered time deposits and no brokered demand deposits as defined for federal regulatory purposes.

In recent years, the proportion of our deposits represented by noninterest-bearing deposits has declined primarily due to rising market interest rates as customers have migrated to higher yielding alternatives , although such proportion increased as of the end of third quarter 2025 as rates declined in the latter part of 2024 and again in September 2025 .

At September 30, 2025 , we held $210.8 million of brokered time deposits and no brokered demand deposits as defined for federal regulatory purposes.

At December 31, 2024 , we held $245.5 million of brokered time deposits and $47.3 million of brokered demand deposits as defined for federal regulatory purposes.

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We hold QwickRate® deposits, included in our time deposit balances, which we obtain through a qualified network, to address liquidity needs when rates on such deposits compare favorably with deposit rates in our markets.

At June 30, 2025 , we held $5.9 million of QwickRate® deposits, a decrease of $7.0 million compared to $12.9 million at December 31, 2024 .

The following table presents, by type, our funding sources, which consist of total average deposits and borrowed funds, as a percentage of total funds and the total cost of each funding source for the three and six months ended June 30, 2025 and 2024 .

At September 30, 2025 , we held $7.5 million of QwickRate® deposits, a decrease of $5.4 million compared to $12.9 million at December 31, 2024 .

Percentage of Total Average Deposits and Borrowed Funds

2 unchanged sentences

Cost of Funds

Three months ended June 30,

Six months ended June 30,

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Three months ended September 30,

Nine months ended September 30,

Noninterest-bearing demand deposits

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The Series A Preferred Stock is intended to qualify as additional Tier 1 capital.

During the six months ended June 30, 2025 and 2024, we paid $2.1 m illion and $2.0 million in dividends, respectively .

We declared dividends on our common stock of $0.215 per share during the six months ended June 30, 2025 compared to dividends of $0.20 per share during the six months ended June 30, 2024 .

Our Board has authorized a share repurchase program, and at June 30, 2025 , we had 424,588 shar es of our common stock remaining authorized for repurchase under the program.

During the six months ended June 30, 2025 , we paid $1.3 million to repurchas e 71,057 s hares of our common stock, compared to paying $0.3 million to repurchas e 16,621 s hares of our common stock during the six months ended June 30, 2024 .

During the nine months ended September 30, 2025 and 2024 , we paid $3.1 m illion and $2.9 million in dividends on our common stock, respectively .

We declared dividends on our common stock of $0.325 per share during the nine months ended September 30, 2025 compared to dividends of $0.305 per share during the nine months ended September 30, 2024 .

We declared dividends on our Series A Preferred Stock of $16.25 per share during the nine months ended September 30, 2025 compared to none during the nine months ended September 30, 2024 .

Our Board has authorized a share repurchase program, and at September 30, 2025 , we had 409,866 shar es of our common stock remaining authorized for repurchase under the program.

During the nine months ended September 30, 2025 , we paid $1.6 million to repurchas e 85,779 s hares of our common stock, compared to paying $0.3 million to repurchas e 18,621 s hares of our common stock during the nine months ended September 30, 2024 .

The aggregate purchase price does not include the effect of excise tax incurred on net share repurchases.

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Pursuant to regulatory capital rules, the Company has made an election not to include unrealized gains and losses in the investment securities portfolio for purposes of calculating “Tier 1” capital and “Tier 2” capital.

The Company and the Bank each were in compliance with all regulatory capital requirements at June 30, 2025 and December 31, 2024 .

The Company and the Bank each were in compliance with all regulatory capital requirements at September 30, 2025 and December 31, 2024 .

The Bank also was considered “well-capitalized” under the OCC’s prompt corrective action regulations as of these dates.

1 unchanged sentence

Minimum Capital Requirement for Bank to be Well Capitalized Under Prompt Corrective Action Rules

June 30, 2025

September 30, 2025

Investar Holding Corporation:

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An interest rate swap is an agreement whereby one party agrees to pay a fixed rate of interest on a notional principal amount in exchange for receiving a floating rate of interest on the same notional amount for a predetermined period of time, from a second party.

At June 30, 2025 and December 31, 2024 , we had no current or forward starting interest rate swap agreements, other than interest rate swaps related to customer loans, described below.

At September 30, 2025 and December 31, 2024 , we had no current or forward starting interest rate swap agreements, other than interest rate swaps related to customer loans, described below.

For additional information, see Note 7.

7 unchanged sentences

The Company did not recognize any gains or losses in other income resulting from fair value adjustments during the

three and six months ended June 30, 2025

June 30, 2025

three and nine months ended September 30, 2025

September 30, 2025

December 31, 2024

, we had notional amo unts of $183.1 million and $186.9 million, respectively, in interest rate swap contracts with customers and $183.1 million and $186.9 million, respectively, in offsetting interest rate swap contracts with other financial institutions.

June 30, 2025

September 30, 2025

December 31, 2024

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Loan commitments are also evaluated in a manner similar to the ACL on loans.

The reserve for unfunded loan commitments is included in “Accrued taxes and other liabilities” in the accompanying consolidated balance sheets and was $0.1 million and $42,000 at June 30, 2025 and December 31, 2024 , respectively.

The reserve for unfunded loan commitments is included in “Accrued taxes and other liabilities” in the accompanying consolidated balance sheets and was $0.3 million and $42,000 at September 30, 2025 and December 31, 2024 , respectively.

Loan commitments and standby letters of credit do not necessarily represent future cash requirements, in that while the customer typically has the ability to draw upon these commitments at any time, these commitments often expire without being drawn upon in full or at all.

1 unchanged sentence

Our unfunded loan commitments and standby letters of credit outstanding are summarized below as of the dates indicated (dollars in thousands):

June 30, 2025

September 30, 2025

December 31, 2024

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The Company intends to continue this process as new commitments are entered into or existing commitments are renewed.

Additionally, at June 30, 2025 , the Company had unfunded commitments of $0.9 million for its investment in SBIC qualified funds and other investment funds.

For the six months ended June 30, 2025 and for the year ended December 31, 2024 , except as disclosed herein and in the Company’s Annual Report, we engaged in no off-balance sheet transactions that we believe are reasonably likely to have a material effect on our financial condition, results of operations, or cash flows.

Additionally, at September 30, 2025 , the Company had unfunded commitments of $1.6 million for its investment in SBIC qualified funds and other investment funds.

For the nine months ended September 30, 2025 and for the year ended December 31, 2024 , except as disclosed herein and in the Company’s Annual Report, we engaged in no off-balance sheet transactions that we believe are reasonably likely to have a material effect on our financial condition, results of operations, or cash flows.

Lease Obligations.

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The Company does not lease equipment under operating leases, nor does it have leases designated as finance leases.

The following table presents, as of June 30, 2025 , contractually obligated lease payments due under non-cancelable operating leases by payment date (dollars in thousands).

The following table presents, as of September 30, 2025 , contractually obligated lease payments due under non-cancelable operating leases by payment date (dollars in thousands).

Less than one year

3 unchanged sentences

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-Q

Item 1. Financial Statements