Investar Holding Corp 10-Q

ITEM 1. FINANCIAL STATEMENTS INVESTAR HOLDING CORPORATION CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share data) September 30, 2025 December 31, 2024 (Unaudited) ASSETS Cash and due from banks $ 32,564 $ 26,623 Interest-bearing balances due from other banks 2,809 1,299 Cash and cash equivalents 35,373 27,922 Available for sale securities at fair value (amortized cost of $ 417,729 and $ 392,564 , respectively) 370,251 331,121 Held to maturity securities at amortized cost (fair value of $ 50,576 and $ 42,144 , respectively) 47,834 42,687 Loans 2,150,523 2,125,084 Less: allowance for credit losses ( 26,470 ) ( 26,721 ) Loans, net 2,124,053 2,098,363 Equity securities at fair value 3,270 2,593 Nonmarketable equity securities 15,255 16,502 Bank premises and equipment, net of accumulated depreciation of $ 23,297 and $ 21,853 , respectively 39,732 40,705 Other real estate owned, net 4,633 5,218 Accrued interest receivable 14,858 14,423 Deferred tax asset 14,362 17,120 Goodwill and other intangible assets, net 41,303 41,696 Bank owned life insurance 68,612 59,703 Other assets 21,092 24,759 Total assets $ 2,800,628 $ 2,722,812 LIABILITIES Deposits: Noninterest-bearing $ 446,361 $ 432,143 Interest-bearing 1,926,317 1,913,801 Total deposits 2,372,678 2,345,944 Advances from Federal Home Loan Bank 60,000 67,215 Repurchase agreements 15,066 8,376 Subordinated debt, net of unamortized issuance costs 16,728 16,697 Junior subordinated debt 8,806 8,733 Accrued taxes and other liabilities 32,055 34,551 Total liabilities 2,505,333 2,481,516 Commitments and contingencies (Note 10) STOCKHOLDERS’ EQUITY Preferred stock, no par value per share; 5,000,000 shares authorized; 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 30,353 — Common stock, $ 1.00 par value per share; 40,000,000 shares authorized; 9,825,883 and 9,828,413 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 9,826 9,828 Surplus 146,304 146,890 Retained earnings 146,178 132,935 Accumulated other comprehensive loss ( 37,366 ) ( 48,357 ) Total stockholders’ equity 295,295 241,296 Total liabilities and stockholders’ equity $ 2,800,628 $ 2,722,812 See accompanying notes to the consolidated financial statements. 4 Table of Contents INVESTAR HOLDING CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share data) (Unaudited) Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 INTEREST INCOME Interest and fees on loans $ 32,563 $ 32,764 $ 94,255 $ 97,060 Interest on investment securities: Taxable 3,096 2,755 8,736 8,338 Tax-exempt 689 228 2,025 680 Other interest income 747 1,101 1,872 2,282 Total interest income 37,095 36,848 106,888 108,360 INTEREST EXPENSE Interest on deposits 14,726 15,729 43,822 45,439 Interest on borrowings 1,216 3,263 3,924 10,651 Total interest expense 15,942 18,992 47,746 56,090 Net interest income 21,153 17,856 59,142 52,270 Provision for credit losses 139 ( 945 ) ( 3,316 ) ( 2,779 ) Net interest income after provision for credit losses 21,014 18,801 62,458 55,049 NONINTEREST INCOME Service charges on deposit accounts 832 828 2,415 2,437 Gain (loss) on call or sale of investment securities, net 2 1 2 ( 382 ) (Loss) gain on sale or disposition of fixed assets, net ( 5 ) — ( 8 ) 427 Gain (loss) on sale of other real estate owned, net 94 ( 4 ) 123 708 Interchange fees 394 403 1,185 1,208 Income from bank owned life insurance 485 459 1,409 1,310 Change in the fair value of equity securities 200 174 177 254 Income from legal settlement — 1,122 — 1,122 Other operating income 982 561 2,318 1,958 Total noninterest income 2,984 3,544 7,621 9,042 Income before noninterest expense 23,998 22,345 70,079 64,091 NONINTEREST EXPENSE Depreciation and amortization 683 760 2,114 2,359 Salaries and employee benefits 10,302 9,982 30,162 28,823 Occupancy 679 652 1,995 1,929 Data processing 831 880 2,642 2,710 Marketing 101 121 324 234 Professional fees 496 473 1,555 1,363 Gain on early extinguishment of subordinated debt — — — ( 502 ) Acquisition expense 246 — 587 — Other operating expenses 3,188 3,312 10,085 10,037 Total noninterest expense 16,526 16,180 49,464 46,953 Income before income tax expense 7,472 6,165 20,615 17,138 Income tax expense 1,293 784 3,649 2,993 Net income 6,179 5,381 16,966 14,145 Preferred stock dividends declared 528 — 528 — Net income available to common shareholders $ 5,651 $ 5,381 $ 16,438 $ 14,145 EARNINGS PER COMMON SHARE Basic earnings per common share $ 0.57 $ 0.55 $ 1.67 $ 1.44 Diluted earnings per common share 0.54 0.54 1.62 1.43 Cash dividends declared per common share 0.11 0.105 0.325 0.305 See accompanying notes to the consolidated financial statements. 5 Table of Contents INVESTAR HOLDING CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) (Unaudited) Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Net income $ 6,179 $ 5,381 $ 16,966 $ 14,145 Other comprehensive income: Investment securities: 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 (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 $ 10,439 $ 15,903 $ 27,957 $ 20,753 See accompanying notes to the consolidated financial statements. 6 Table of Contents INVESTAR HOLDING CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ EQUITY (Amounts in thousands, except share data) (Unaudited) Preferred Stock Common Stock Surplus Retained Earnings Accumulated Other Comprehensive (Loss) Income Total Stockholders’ Equity Three months ended: September 30, 2024 Balance at beginning of period $ — $ 9,829 $ 145,918 $ 123,510 $ ( 49,061 ) $ 230,196 Surrendered shares — — ( 7 ) — — ( 7 ) Common stock dividends declared, $ 0.105 per share — — — ( 1,031 ) — ( 1,031 ) Stock-based compensation — 1 518 — — 519 Shares repurchased — ( 2 ) ( 36 ) — — ( 38 ) Net income — — — 5,381 — 5,381 Other comprehensive income, net — — — — 10,522 10,522 Balance at end of period $ — $ 9,828 $ 146,393 $ 127,860 $ ( 38,539 ) $ 245,542 September 30, 2025 Balance at beginning of period $ — $ 9,840 $ 146,107 $ 141,608 $ ( 41,626 ) $ 255,929 Surrendered shares — — ( 8 ) — — ( 8 ) Options exercised — — — — — — 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 — 1 511 — — 512 Shares repurchased — ( 15 ) ( 306 ) — — ( 321 ) Net income — — — 6,179 — 6,179 Other comprehensive income, net — — — — 4,260 4,260 Balance at end of period $ 30,353 $ 9,826 $ 146,304 $ 146,178 $ ( 37,366 ) $ 295,295 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 $ — $ 9,748 $ 145,456 $ 116,711 $ ( 45,147 ) $ 226,768 Surrendered shares — ( 94 ) ( 1,385 ) — — ( 1,479 ) Options exercised — 96 1,263 — — 1,359 Common stock dividends declared, $ 0.305 per share — — — ( 2,996 ) — ( 2,996 ) Stock-based compensation — 97 1,345 — — 1,442 Shares repurchased — ( 19 ) ( 286 ) — — ( 305 ) Net income — — — 14,145 — 14,145 Other comprehensive income, net — — — — 6,608 6,608 Balance at end of period $ — $ 9,828 $ 146,393 $ 127,860 $ ( 38,539 ) $ 245,542 September 30, 2025 Balance at beginning of period $ — $ 9,828 $ 146,890 $ 132,935 $ ( 48,357 ) $ 241,296 Surrendered shares — ( 56 ) ( 939 ) — — ( 995 ) Options exercised — 34 501 — — 535 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 — 106 1,370 — — 1,476 Shares repurchased — ( 86 ) ( 1,518 ) — — ( 1,604 ) Net income — — — 16,966 — 16,966 Other comprehensive income, net — — — — 10,991 10,991 Balance at end of period $ 30,353 $ 9,826 $ 146,304 $ 146,178 $ ( 37,366 ) $ 295,295 See accompanying notes to the consolidated financial statements. 7 Table of Contents INVESTAR HOLDING CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited) Nine months ended September 30, 2025 2024 Net income $ 16,966 $ 14,145 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,114 2,359 Provision for credit losses ( 3,316 ) ( 2,779 ) Net amortization (accretion) of purchase accounting adjustments 42 ( 40 ) Provision for other real estate owned 434 233 Net accretion of securities ( 405 ) ( 12 ) (Gain) loss on call or sale of investment securities, net ( 2 ) 382 Loss (gain) on sale or disposition of fixed assets, net 8 ( 427 ) Gain on sale of other real estate owned, net ( 123 ) ( 708 ) Gain on early extinguishment of subordinated debt — ( 502 ) FHLB stock dividend ( 208 ) ( 139 ) Stock-based compensation 1,476 1,442 Deferred taxes ( 216 ) 404 Net change in value of BOLI ( 1,409 ) ( 1,310 ) Amortization of subordinated debt issuance costs 31 64 Change in the fair value of equity securities ( 177 ) ( 254 ) Income from legal settlement — ( 1,122 ) Net change in: Accrued interest receivable ( 435 ) 42 Other assets ( 1,555 ) 126 Accrued taxes and other liabilities 1,370 4,314 Net cash provided by operating activities 14,595 16,218 Cash flows from investing activities: Proceeds from sales of investment securities available for sale — 7,906 Purchases of securities available for sale ( 61,229 ) ( 15,634 ) Purchases of securities held to maturity ( 6,500 ) ( 1,500 ) Proceeds from maturities, prepayments and calls of investment securities available for sale 36,475 27,031 Proceeds from maturities, prepayments and calls of investment securities held to maturity 1,349 3,664 Proceeds from redemption or sale of nonmarketable equity securities 2,315 1,872 Purchases of nonmarketable equity securities ( 859 ) ( 2,267 ) Purchases of equity securities at fair value ( 500 ) ( 1,000 ) Net (increase) decrease in loans ( 24,040 ) 53,356 Proceeds from sales of other real estate owned 1,961 1,984 Proceeds from sales of fixed assets — 1,340 Purchases of fixed assets ( 928 ) ( 388 ) Proceeds from surrender of BOLI — 8,440 Purchases of BOLI ( 7,500 ) ( 10,000 ) Purchases of other investments ( 155 ) ( 140 ) Distributions from investments 585 112 Net cash (used in) provided by investing activities ( 59,026 ) 74,776 8 Table of Contents INVESTAR HOLDING CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED (Amounts in thousands) (Unaudited) Cash flows from financing activities: Net increase in customer deposits 26,741 31,750 Net increase in repurchase agreements 6,690 4,361 Net decrease in short-term FHLB advances ( 7,215 ) — Net decrease in borrowings under the BTFP — ( 103,500 ) Proceeds from long-term FHLB advances — 60,000 Repayment of long-term FHLB advances — ( 20,000 ) Cash dividends paid on common stock ( 3,146 ) ( 2,940 ) Proceeds from stock options exercised 63 1,359 Payments to repurchase common stock ( 1,604 ) ( 305 ) Proceeds from preferred stock offering, net of issuance costs 30,353 — Extinguishment of subordinated debt — ( 7,388 ) Net cash provided by (used in) financing activities 51,882 ( 36,663 ) Net change in cash and cash equivalents 7,451 54,331 Cash and cash equivalents, beginning of period 27,922 32,009 Cash and cash equivalents, end of period $ 35,373 $ 86,340 SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING ACTIVITIES Transfer from loans to other real estate owned $ 1,687 $ 1,810 See accompanying notes to the consolidated financial statements. 9 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations The Company is a financial holding company, headquartered in Baton Rouge, Louisiana that provides full banking services, excluding trust services, through its wholly-owned banking subsidiary, Investar Bank, National Association, a national bank, primarily to meet the needs of individuals, professionals and small to me dium-sized businesses. The Company’s primary markets are in south Louisiana, southeast Texas and Alabama. At 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 The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with GAAP for interim financial information and the instructions to Form 10 -Q and Article 10 of Regulation S- X. 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 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. Prior period consolidated financial statements are reclassified whenever necessary to conform to the current period presentation. No reclassifications of prior period balances were material to the consolidated financial statements. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank. All significant intercompany accounts and transactions have been eliminated in consolidation. Segment Reporting The Company determined that all of its banking operations serve a similar customer base, offer similar products and services, and are managed through similar processes. Therefore, the Company’s banking operations are aggregated into one reportable operating segment, which generates income principally from interest on loans and, to a lesser extent, securities investments, as well as from fees charged in connection with various loan and deposit services. The CODM is the Chief Executive Officer, who for the purposes of assessing performance, making operating decisions, and allocating Company resources, regularly reviews net income as reported in the accompanying consolidated statements of income. The level of disaggregation and amounts of significant segment income and expenses that are regularly provided to the CODM are the same as those presented in the accompanying consolidated statements of income. Likewise, the measure of segment assets is reported on the accompanying consolidated balance sheets as total assets. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material. Material estimates that are particularly susceptible to significant change relate to the determination of the ACL. While management uses available information to recognize credit losses on loans, future additions to the ACL may be necessary based on changes in economic conditions, changes in conditions of borrowers’ industries or changes in the condition of individual borrowers. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s ACL. Such agencies may require the Company to recognize additions to the ACL based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the ACL may change materially in the near term. 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 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. 10 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Accounting Standards Adopted in 2025 FASB ASC Topic 740 “ Income Taxes - Improvements to Income Tax Disclosures ” Update No. 2023 - 09 ( “ ASU 2023 - 09 ”). In December 2023, the FASB issued ASU 2023 - 09, which enhances the transparency and decision usefulness of income tax disclosures. ASU 2023 - 09 requires disclosure of additional categories of information about federal, state and foreign income taxes in the rate reconciliation table and requires companies to provide more information about the reconciling items in some categories if a quantitative threshold is met. ASU 2023 - 09 became effective for the Company on January 1, 2025. The Company will provide the required disclosures in its Annual Report on Form 10 -K for the year ended December 31, 2025, and the adoption of ASU 2023 - 09 is not expected to have a material impact on the Company’s consolidated financial statements. Recent Accounting Pronouncements FASB “ Disclosure Improvements ” Update No. 2023 - 06 ( “ ASU 2023 - 06 ”). In October 2023, the FASB issued ASU 2023 - 06, which amends the disclosure or presentation requirements related to various topics. The amendment is intended to align GAAP with the SEC’s regulations. ASU 2023 - 06 is required to be applied prospectively, and early adoption is prohibited. For reporting entities subject to the SEC’s existing disclosure requirements, the effective dates of ASU 2023 - 06 will be the date on which the SEC’s removal of that related disclosure requirement from Regulation S- X or Regulation S-K becomes effective. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S- X or Regulation S-K, the pending content of the related amendment will be removed and will not become effective for any entities. ASU 2023 - 06 is not expected to have a material impact on the Company’s consolidated financial statements. FASB ASC Topic 220 “ Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses ” Update No. 2024 - 03 ( “ ASU 2024 - 03 ”). In November 2024, the FASB issued ASU 2024 - 03, which requires disaggregated disclosure of income statement expenses in a tabular format in the notes of the financial statements for public business entities. ASU 2024 - 03 is effective on a prospective basis for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption and retrospective application permitted. The Company is currently evaluating the provisions of the amendment and the impact on its future consolidated financial statements. NOTE 2. 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, 2025 2024 2025 2024 Net income $ 6,179 $ 5,381 $ 16,966 $ 14,145 Less: preferred stock dividends declared 528 — 528 — Net income available to common shareholders $ 5,651 $ 5,381 $ 16,438 $ 14,145 Weighted average basic shares outstanding 9,830,387 9,828,776 9,835,780 9,808,841 Dilutive effect of stock-based compensation 149,886 73,672 137,116 83,662 Dilutive effect of Series A Preferred Stock 1,547,603 — 521,537 — Weighted average diluted shares outstanding 11,527,876 9,902,448 10,494,433 9,892,503 Basic earnings per common share $ 0.57 $ 0.55 $ 1.67 $ 1.44 Diluted earnings per common share $ 0.54 $ 0.54 $ 1.62 $ 1.43 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 September 30, Nine months ended September 30, 2025 2024 2025 2024 Stock options — 7,405 3,362 6,367 RSUs — 401 816 4,420 11 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 3. INVESTMENT SECURITIES Debt Securities The amortized cost and approximate fair value of investment securities classified as AFS are summarized below as of the dates presented (dollars in thousands). Gross Gross Unrealized Unrealized Fair Amortized Cost Gains Losses Value September 30, 2025 Obligations of the U.S. Treasury and U.S. government agencies and corporations $ 19,092 $ 43 $ ( 239 ) $ 18,896 Obligations of state and political subdivisions 17,753 17 ( 1,556 ) 16,214 Corporate bonds 27,790 70 ( 1,444 ) 26,416 Residential mortgage-backed securities 282,461 718 ( 37,741 ) 245,438 Commercial mortgage-backed securities 70,633 142 ( 7,488 ) 63,287 Total $ 417,729 $ 990 $ ( 48,468 ) $ 370,251 Gross Gross Unrealized Unrealized Fair Amortized Cost Gains Losses Value December 31, 2024 Obligations of the U.S. Treasury and U.S. government agencies and corporations $ 15,985 $ 47 $ ( 325 ) $ 15,707 Obligations of state and political subdivisions 18,363 — ( 2,243 ) 16,120 Corporate bonds 29,772 8 ( 2,513 ) 27,267 Residential mortgage-backed securities 256,272 39 ( 47,543 ) 208,768 Commercial mortgage-backed securities 72,172 133 ( 9,046 ) 63,259 Total $ 392,564 $ 227 $ ( 61,670 ) $ 331,121 The Company calculates realized gains and losses on sales of debt securities under the specific identification method. 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 September 30, Nine months ended September 30, 2025 2024 2025 2024 Proceeds from sales $ — $ — $ — $ 7,906 Gross gains $ — $ — $ — $ — Gross losses $ — $ — $ — $ ( 383 ) The amortized cost and approximate fair value of investment securities classified as HTM are summarized below as of the dates presented (dollars in thousands). Gross Gross Unrealized Unrealized Fair Amortized Cost Gains Losses Value September 30, 2025 Obligations of state and political subdivisions $ 45,946 $ 2,922 $ ( 2 ) $ 48,866 Residential mortgage-backed securities 1,888 — ( 178 ) 1,710 Total $ 47,834 $ 2,922 $ ( 180 ) $ 50,576 Gross Gross Unrealized Unrealized Fair Amortized Cost Gains Losses Value December 31, 2024 Obligations of state and political subdivisions $ 40,618 $ 70 $ ( 365 ) $ 40,323 Residential mortgage-backed securities 2,069 — ( 248 ) 1,821 Total $ 42,687 $ 70 $ ( 613 ) $ 42,144 Securities are classified in the consolidated balance sheets according to management’s intent. The Company had no securities classified as trading as of September 30, 2025 or December 31, 2024 . 12 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The approximate fair value of AFS securities and unrealized losses, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, are summarized below as of the dates presented (dollars in thousands). Less than 12 Months 12 Months or More Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses September 30, 2025 Obligations of the U.S. Treasury and U.S. government agencies and corporations $ 6,050 $ ( 27 ) $ 3,189 $ ( 212 ) $ 9,239 $ ( 239 ) Obligations of state and political subdivisions 1,523 ( 23 ) 13,497 ( 1,533 ) 15,020 ( 1,556 ) Corporate bonds 2,736 ( 36 ) 18,025 ( 1,408 ) 20,761 ( 1,444 ) Residential mortgage-backed securities 8,247 ( 78 ) 194,252 ( 37,663 ) 202,499 ( 37,741 ) Commercial mortgage-backed securities 12,536 ( 143 ) 39,368 ( 7,345 ) 51,904 ( 7,488 ) Total $ 31,092 $ ( 307 ) $ 268,331 $ ( 48,161 ) $ 299,423 $ ( 48,468 ) Less than 12 Months 12 Months or More Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses December 31, 2024 Obligations of the U.S. Treasury and U.S. government agencies and corporations $ 5,505 $ ( 20 ) $ 4,012 $ ( 305 ) $ 9,517 $ ( 325 ) Obligations of state and political subdivisions 3,434 ( 99 ) 12,686 ( 2,144 ) 16,120 ( 2,243 ) Corporate bonds 1,947 ( 5 ) 24,326 ( 2,508 ) 26,273 ( 2,513 ) Residential mortgage-backed securities 5,432 ( 103 ) 198,803 ( 47,440 ) 204,235 ( 47,543 ) Commercial mortgage-backed securities 9,226 ( 134 ) 42,293 ( 8,912 ) 51,519 ( 9,046 ) Total $ 25,544 $ ( 361 ) $ 282,120 $ ( 61,309 ) $ 307,664 $ ( 61,670 ) 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. The approximate fair value of HTM securities and unrealized losses, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, are summarized below as of the dates presented (dollars in thousands). Less than 12 Months 12 Months or More Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses September 30, 2025 Obligations of state and political subdivisions $ — $ — $ 2,201 $ ( 2 ) $ 2,201 $ ( 2 ) Residential mortgage-backed securities — — 1,710 ( 178 ) 1,710 ( 178 ) Total $ — $ — $ 3,911 $ ( 180 ) $ 3,911 $ ( 180 ) Less than 12 Months 12 Months or More Total Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses December 31, 2024 Obligations of state and political subdivisions $ 10,795 $ ( 209 ) $ 2,458 $ ( 156 ) $ 13,253 $ ( 365 ) Residential mortgage-backed securities — — 1,821 ( 248 ) 1,821 ( 248 ) Total $ 10,795 $ ( 209 ) $ 4,279 $ ( 404 ) $ 15,074 $ ( 613 ) Unrealized losses are generally due to changes in market interest rates. 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 September 30, 2025 or December 31, 2024 . 13 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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. Available for Sale Held to Maturity Amortized Fair Amortized Fair Cost Value Cost Value September 30, 2025 Due within one year $ 5,714 $ 5,722 $ — $ — Due after one year through five years 25,156 24,787 2,203 2,201 Due after five years through ten years 32,036 30,521 5,740 5,853 Due after ten years 354,823 309,221 39,891 42,522 Total debt securities $ 417,729 $ 370,251 $ 47,834 $ 50,576 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 $ 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. Members of the FHLB and FRB are required to own a certain amount of stock based on the level of borrowings and other factors and may invest in additional amounts. FHLB stock and FRB stock are carried at cost, restricted as to redemption, and periodically evaluated for impairment based on the ultimate recovery of par value. Both cash and stock dividends are reported as income. Nonmarketable equity securities also include investments in other correspondent banks including Independent Bankers Financial Corporation and First National Bankers Bank stock. These investments are carried at cost which approximates fair value. The balance of nonmarketable equity securities at September 30, 2025 and December 31, 2024 was $ 15.3 million and $ 16.5 million, respectively. 14 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 4. LOANS AND ALLOWANCE FOR CREDIT LOSSES The Company’s loan portfolio consists of the following categories of loans as of the dates presented (dollars in thousands). September 30, 2025 December 31, 2024 Construction and development $ 140,561 $ 154,553 1-4 Family 382,445 396,815 Multifamily 130,232 84,576 Farmland 3,996 6,977 Commercial real estate 922,541 944,548 Total mortgage loans on real estate 1,579,775 1,587,469 Commercial and industrial 560,763 526,928 Consumer 9,985 10,687 Total loans $ 2,150,523 $ 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 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 Current 30 - 59 Days Past Due 60 - 89 Days Past Due 90 Days or More Past Due Total > 90 Days and Accruing Construction and development $ 140,480 $ 76 $ — $ 5 $ 140,561 $ — 1-4 Family 377,719 367 1,432 2,927 382,445 — Multifamily 130,232 — — — 130,232 — Farmland 3,996 — — — 3,996 — Commercial real estate 920,406 490 — 1,645 922,541 — Total mortgage loans on real estate 1,572,833 933 1,432 4,577 1,579,775 — Commercial and industrial 560,440 287 31 5 560,763 — Consumer 9,949 6 3 27 9,985 — Total loans $ 2,143,222 $ 1,226 $ 1,466 $ 4,609 $ 2,150,523 $ — December 31, 2024 Current 30 - 59 Days Past Due 60 - 89 Days Past Due 90 Days or More Past Due Total > 90 Days and Accruing Construction and development $ 154,461 $ 86 $ — $ 6 $ 154,553 $ — 1-4 Family 387,782 5,200 1,054 2,779 396,815 — Multifamily 84,576 — — — 84,576 — Farmland 6,977 — — — 6,977 — Commercial real estate 942,493 458 48 1,549 944,548 — Total mortgage loans on real estate 1,576,289 5,744 1,102 4,334 1,587,469 — Commercial and industrial 526,329 64 270 265 526,928 — Consumer 10,377 87 65 158 10,687 2 Total loans $ 2,112,995 $ 5,895 $ 1,437 $ 4,757 $ 2,125,084 $ 2 15 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 Nonaccrual with an Allowance for Credit Loss Total Nonaccrual Loans Construction and development $ 21 $ — $ 21 1-4 Family 2,492 802 3,294 Multifamily — — — Farmland — — — Commercial real estate 1,165 2,990 4,155 Total mortgage loans on real estate 3,678 3,792 7,470 Commercial and industrial 135 — 135 Consumer 64 11 75 Total loans $ 3,877 $ 3,803 $ 7,680 December 31, 2024 Nonaccrual with No Allowance for Credit Loss Nonaccrual with an Allowance for Credit Loss Total Nonaccrual Loans Construction and development $ 24 $ — $ 24 1-4 Family 1,475 2,336 3,811 Multifamily — — — Farmland — — — Commercial real estate 4,168 123 4,291 Total mortgage loans on real estate 5,667 2,459 8,126 Commercial and industrial 252 230 482 Consumer 211 5 216 Total loans $ 6,130 $ 2,694 $ 8,824 Nonaccrual and Past Due Loans Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. In determining whether or not a borrower may be unable to meet payment obligations for each class of loans, the borrower’s debt service capacity is considered through the analysis of current financial information, if available, and/or current information with regard to the collateral position. Regulatory provisions would typically require the placement of a loan on nonaccrual status if (i) principal or interest has been in default for a period of 90 days or more unless the loan is both well secured and in the process of collection or (ii) full payment of principal and interest is not expected. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income on nonaccrual loans is recognized only to the extent that cash payments are received in excess of principal due. 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 nine months ended September 30, 2025 and 2024 . Collateral Dependent Loans Collateral dependent loans are loans for which the repayments, on the basis of the Company ’ s assessment at the reporting date, are expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. Loans that do not share risk characteristics are excluded from the loan pools and evaluated on an individual basis, and the Company has determined to evaluate collateral dependent loans individually for impairment. The ACL for collateral dependent loans is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the present value of expected cash flows from the operation of the collateral. 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 September 30, 2025 and December 31, 2024 . The types of collateral that secure collateral dependent loans are discussed under “Portfolio Segment Risk Factors” below. 16 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Portfolio Segment Risk Factors The following describes the risk characteristics relevant to each of the Company’s loan portfolio segments. Constructio n and Development - Construction and development loans are generally made for the purpose of acquisition and development of land to be improved through the construction of commercial and residential buildings. The successful repayment of these types of loans is generally dependent upon a commitment for permanent financing from the Company, or from the sale of the constructed property. These loans carry more risk than commercial or residential real estate loans due to the dynamics of construction projects, changes in interest rates, the long-term financing market, and state and local government regulations. One such risk is that loan funds are advanced upon the security of the property under construction, which is of uncertain value prior to the completion of construction. Thus, it is more difficult to evaluate accurately the total loan funds required to complete a project and to calculate related loan-to-value ratios. The Company attempts to minimize the risks associated with construction lending by limiting loan-to-value ratios as described above. In addition, as to speculative development loans, the Company generally makes such loans only to borrowers that have a positive pre-existing relationship with us. The Company manages risk by using specific underwriting policies and procedures for these types of loans and by avoiding excessive concentrations in any one business or industry. Construction and development loans are primarily secured by residential and commercial properties, which are under construction and/or redevelopment. 1 - 4 Family - The 1 - 4 family portfolio mainly consists of residential mortgage loans to consumers to finance a primary residence. The majority of these loans are secured by first liens on residential properties located in the Company’s market areas and carry risks associated with the creditworthiness of the borrower and changes in the value of the collateral and loan-to-value-ratios. The Company manages these risks through policies and procedures such as limiting loan-to-value ratios at origination, employing experienced underwriting personnel, requiring standards for appraisers, and not making subprime loans. In the third quarter of 2023, the Company exited the consumer mortgage origination business. Multifamily - Multifamily loans are normally made to real estate investors to support permanent financing for multifamily residential income producing properties that rely on the successful operation of the property for repayment. This management mainly involves property maintenance and collection of rents due from tenants. 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. The Company manages this risk by avoiding concentrations with any particular customer. Multifamily loans are primarily secured by first liens on multifamily real estate. Farmland - Farmland loans are often for land improvements related to agricultural endeavors and may include construction of new specialized facilities. These loans are usually repaid through the conversion to permanent financing, or if scheduled loan amortization begins, for the long-term benefit of the borrower’s ongoing operations. Underwriting generally involves intensive analysis of the financial strength of the borrower and guarantor, liquidation value of the subject collateral, the associated unguaranteed exposure, and any available secondary sources of repayment, with the greatest emphasis given to a borrower’s capacity to meet cash flow coverage requirements as set forth by Company policies. Farmland loans are primarily secured by raw land. Commercial Real Estate - Commercial real estate loans are extensions of credit secured by owner occupied and nonowner-occupied collateral. Underwriting generally involves intensive analysis of the financial strength of the borrower and guarantor, liquidation value of the subject collateral, the associated unguaranteed exposure, and any available secondary sources of repayment, with the greatest emphasis given to a borrower’s capacity to meet cash flow coverage requirements as set forth by Company policies. Commercial real estate loans typically depend on the successful operation and management of the businesses that occupy these properties or the financial stability of tenants occupying the properties. Nonowner-occupied commercial real estate loans typically are dependent, in large part, on the owner’s ability to rent the property and the ability of the tenants to pay rent, whereas owner-occupied commercial real estate loans typically are dependent, in large part, on the success of the owner’s business. General market conditions and economic activity may impact the performance of these types of loans, including fluctuations in the value of real estate, new job creation trends, and tenant vacancy rates. The Company attempts to limit risk by analyzing a borrower’s cash flow and collateral value on an ongoing basis. The Company also typically requires personal guarantees from the principal owners of the property, supported by a review of their personal financial statements, as an additional means of mitigating risk. The Company manages risk by avoiding concentrations in any one business or industry. Commercial real estate loans are primarily secured by retail shopping facilities, office and industrial buildings, healthcare facilities, warehouses, and various special purpose commercial properties. 17 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Com mercial and Industrial - Commercial and industrial loans receive similar underwriting treatment as commercial real estate loans in that the repayment source is analyzed to determine its ability to meet cash flow coverage requirements as set forth by Company policies. Repayment of these loans generally comes from the generation of cash flow as the result of the borrower’s business operations. Commercial lending generally involves different risks from those associated with commercial real estate lending or construction lending. Although commercial loans may be collateralized by equipment or other business assets (including real estate, if available as collateral), the repayment of these types of loans depends primarily on the creditworthiness and projected cash flow of the borrower (and any guarantors). Thus, the general business conditions of the local economy and the borrower’s ability to sell its products and services, thereby generating sufficient operating revenue to repay us under the agreed upon terms and conditions, are the chief considerations when assessing the risk of a commercial loan. The liquidation of collateral, if any, is considered a secondary source of repayment because equipment and other business assets may, among other things, be obsolete or of limited resale value. The Company actively monitors certain financial measures of the borrower, including advance rate, cash flow, collateral value and other appropriate credit factors. Commercial and industrial loans also include public finance loans made to governmental entities, which can be taxable or tax-exempt, and are generally repaid using pledged revenue sources including income tax, property tax, sales tax, and utility revenue, among other sources. Commercial and industrial loans are primarily secured by accounts receivable, inventory and equipment. Consumer - Consumer loans are offered by the Company in order to provide a full range of retail financial services to its customers and include auto loans, credit cards, and other consumer installment loans. Typically, the Company evaluates the borrower’s repayment ability through a review of credit scores and an evaluation of debt to income ratios. Repayment of consumer loans depends upon key consumer economic measures and upon the borrower’s financial stability and is more likely to be adversely affected by divorce, job loss, illness and personal hardships than repayment of other loans. A shortfall in the value of any collateral also may pose a risk of loss to the Company for these types of loans. Consumer loans include loans primarily secured by vehicles and unsecured loans. Credit Quality Indicators Loans are categorized into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The following definitions are utilized for risk ratings, which are consistent with the definitions used in supervisory guidance: Pass - Loans not meeting the criteria below are considered pass. These loans have higher credit characteristics and financial strength. The borrowers at least generate profits and cash flow that are in line with peer and industry standards and have debt service coverage ratios above loan covenants and policy guidelines. For some of these loans, a guaranty from a financially capable party mitigates characteristics of the borrower that might otherwise result in a lower grade. Special Mention - Loans classified as special mention possess some credit deficiencies that need to be corrected to avoid a greater risk of default in the future. For example, financial ratios relating to the borrower may have deteriorated. Often, a special mention categorization is temporary while certain factors are analyzed or matters addressed before the loan is re-categorized as either pass or substandard. Substandard - Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the borrower or the liquidation value of any collateral. If deficiencies are not addressed, it is likely that this category of loan will result in the Bank incurring a loss. Where a borrower has been unable to adjust to industry or general economic conditions, the borrower’s loan is often categorized as substandard. Doubtful - Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loss - Loans classified as loss are considered uncollectible and of such little value that their continuance as recorded assets is not warranted. This classification does not mean that the assets have absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off these assets. 18 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 September 30, 2025 and December 31, 2024 . September 30, 2025 2025 2024 2023 2022 2021 Prior Revolving Loans Total Construction and development Pass $ 42,362 $ 35,013 $ 19,561 $ 7,648 $ 2,956 $ 2,675 $ 20,083 $ 130,298 Special Mention — — — — — — — — Substandard — — 4,682 4,842 718 21 — 10,263 Total construction and development $ 42,362 $ 35,013 $ 24,243 $ 12,490 $ 3,674 $ 2,696 $ 20,083 $ 140,561 Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — 1-4 Family Pass $ 11,245 $ 10,365 $ 34,318 $ 90,074 $ 68,116 $ 108,820 $ 54,532 $ 377,470 Special Mention — — — — — — — — Substandard — 214 423 767 843 2,458 270 4,975 Total 1-4 family $ 11,245 $ 10,579 $ 34,741 $ 90,841 $ 68,959 $ 111,278 $ 54,802 $ 382,445 Current-period gross charge-offs $ — $ — $ — $ ( 59 ) $ — $ ( 23 ) $ — $ ( 82 ) Multifamily Pass $ 35,621 $ 1,582 $ 22,894 $ 45,235 $ 11,552 $ 7,348 $ 20 $ 124,252 Special Mention — — — — — 3,852 — 3,852 Substandard — — — 638 — 1,490 — 2,128 Total multifamily $ 35,621 $ 1,582 $ 22,894 $ 45,873 $ 11,552 $ 12,690 $ 20 $ 130,232 Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Farmland Pass $ 484 $ 69 $ 473 $ 115 $ 359 $ 2,245 $ 251 $ 3,996 Special Mention — — — — — — — — Substandard — — — — — — — — Total farmland $ 484 $ 69 $ 473 $ 115 $ 359 $ 2,245 $ 251 $ 3,996 Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate Pass $ 80,672 $ 44,585 $ 70,729 $ 273,484 $ 189,082 $ 234,206 $ 11,002 $ 903,760 Special Mention — — — — 1,577 3,894 — 5,471 Substandard — 2,565 325 1,343 3,913 5,164 — 13,310 Total commercial real estate $ 80,672 $ 47,150 $ 71,054 $ 274,827 $ 194,572 $ 243,264 $ 11,002 $ 922,541 Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial and industrial Pass $ 78,344 $ 18,479 $ 23,227 $ 112,721 $ 18,888 $ 16,236 $ 291,823 $ 559,718 Special Mention — — — — — — 910 910 Substandard — — — — — 85 50 135 Total commercial and industrial $ 78,344 $ 18,479 $ 23,227 $ 112,721 $ 18,888 $ 16,321 $ 292,783 $ 560,763 Current-period gross charge-offs $ — $ ( 28 ) $ ( 78 ) $ ( 7 ) $ ( 24 ) $ — $ ( 51 ) $ ( 188 ) Consumer Pass $ 4,018 $ 2,230 $ 1,404 $ 798 $ 260 $ 694 $ 481 $ 9,885 Special Mention — — — — — — — — Substandard — — 15 6 — 79 — 100 Total consumer $ 4,018 $ 2,230 $ 1,419 $ 804 $ 260 $ 773 $ 481 $ 9,985 Current-period gross charge-offs $ ( 45 ) $ ( 5 ) $ ( 10 ) $ ( 11 ) $ ( 7 ) $ ( 1 ) $ ( 2 ) $ ( 81 ) Total loans Pass $ 252,746 $ 112,323 $ 172,606 $ 530,075 $ 291,213 $ 372,224 $ 378,192 $ 2,109,379 Special Mention — — — — 1,577 7,746 910 10,233 Substandard — 2,779 5,445 7,596 5,474 9,297 320 30,911 Total loans $ 252,746 $ 115,102 $ 178,051 $ 537,671 $ 298,264 $ 389,267 $ 379,422 $ 2,150,523 Current-period gross charge-offs $ ( 45 ) $ ( 33 ) $ ( 88 ) $ ( 77 ) $ ( 31 ) $ ( 24 ) $ ( 53 ) $ ( 351 ) 19 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) December 31, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Total Construction and development Pass $ 53,448 $ 36,560 $ 26,585 $ 3,583 $ 2,176 $ 1,754 $ 19,946 $ 144,052 Special Mention — 374 — 737 — — — 1,111 Substandard — 4,524 4,842 — 18 6 — 9,390 Total construction and development $ 53,448 $ 41,458 $ 31,427 $ 4,320 $ 2,194 $ 1,760 $ 19,946 $ 154,553 Current-period gross charge-offs $ — $ — $ ( 77 ) $ ( 72 ) $ — $ — $ — $ ( 149 ) 1-4 Family Pass $ 12,039 $ 38,426 $ 92,502 $ 72,848 $ 53,300 $ 70,854 $ 51,424 $ 391,393 Special Mention 61 — — — — 2 — 63 Substandard 170 352 902 931 752 2,079 173 5,359 Total 1-4 family $ 12,270 $ 38,778 $ 93,404 $ 73,779 $ 54,052 $ 72,935 $ 51,597 $ 396,815 Current-period gross charge-offs $ ( 86 ) $ — $ ( 42 ) $ — $ — $ ( 120 ) $ — $ ( 248 ) Multifamily Pass $ 1,639 $ 7,538 $ 47,070 $ 11,994 $ 3,400 $ 6,796 $ 199 $ 78,636 Special Mention — — — — — 3,940 — 3,940 Substandard — — 649 — 1,351 — — 2,000 Total multifamily $ 1,639 $ 7,538 $ 47,719 $ 11,994 $ 4,751 $ 10,736 $ 199 $ 84,576 Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Farmland Pass $ 72 $ 1,605 $ 1,290 $ 633 $ 892 $ 1,508 $ 977 $ 6,977 Special Mention — — — — — — — — Substandard — — — — — — — — Total farmland $ 72 $ 1,605 $ 1,290 $ 633 $ 892 $ 1,508 $ 977 $ 6,977 Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate Pass $ 51,071 $ 77,895 $ 293,519 $ 202,461 $ 159,968 $ 134,164 $ 7,993 $ 927,071 Special Mention — 251 — 1,662 162 157 — 2,232 Substandard 3,178 648 1,321 3,986 2,901 3,094 117 15,245 Total commercial real estate $ 54,249 $ 78,794 $ 294,840 $ 208,109 $ 163,031 $ 137,415 $ 8,110 $ 944,548 Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial and industrial Pass $ 45,894 $ 38,599 $ 120,877 $ 24,351 $ 7,612 $ 15,842 $ 272,853 $ 526,028 Special Mention — — — — — — 418 418 Substandard 23 — 6 24 — 235 194 482 Total commercial and industrial $ 45,917 $ 38,599 $ 120,883 $ 24,375 $ 7,612 $ 16,077 $ 273,465 $ 526,928 Current-period gross charge-offs $ — $ — $ ( 18 ) $ — $ — $ — $ ( 812 ) $ ( 830 ) Consumer Pass $ 4,043 $ 2,602 $ 1,307 $ 824 $ 200 $ 821 $ 645 $ 10,442 Special Mention — — — — — — — — Substandard — 144 6 — 12 83 — 245 Total consumer $ 4,043 $ 2,746 $ 1,313 $ 824 $ 212 $ 904 $ 645 $ 10,687 Current-period gross charge-offs $ ( 87 ) $ ( 6 ) $ ( 7 ) $ ( 2 ) $ — $ ( 25 ) $ ( 8 ) $ ( 135 ) Total loans Pass $ 168,206 $ 203,225 $ 583,150 $ 316,694 $ 227,548 $ 231,739 $ 354,037 $ 2,084,599 Special Mention 61 625 — 2,399 162 4,099 418 7,764 Substandard 3,371 5,668 7,726 4,941 5,034 5,497 484 32,721 Total loans $ 171,638 $ 209,518 $ 590,876 $ 324,034 $ 232,744 $ 241,335 $ 354,939 $ 2,125,084 Current-period gross charge-offs $ ( 173 ) $ ( 6 ) $ ( 144 ) $ ( 74 ) $ — $ ( 145 ) $ ( 820 ) $ ( 1,362 ) The Company had no loans that were classified as doubtful or loss at September 30, 2025 or December 31, 2024 . 20 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 $ 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 $ 35.2 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). September 30, 2025 December 31, 2024 Balance, beginning of period $ 43,647 $ 46,000 New loans/changes in relationship 186 620 Repayments/changes in relationship ( 8,645 ) ( 2,973 ) Balance, end of period $ 35,188 $ 43,647 Allowance for Credit Losses The Company accounts for the ACL in accordance with FASB ASC Topic 326 “ Financial Instruments – Credit Losses ” (“ASC 326” ) , which uses the CECL accounting methodology. 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 as a provision for credit losses for changes in expected lifetime credit losses. The Company developed a CECL model methodology that calculates expected credit losses over the life of the portfolio by analyzing the composition, characteristics and quality of the loan portfolio, as well as prevailing economic conditions and forecasts. The CECL calculation estimates credit losses using a combination of discounted cash flow and remaining life analyses. To the extent the lives of the loans in the portfolio extend beyond the period for which a reasonable and supportable forecast can be made, when necessary, the model reverts back to the historical loss rates adjusted for qualitative factors related to current conditions using a four -quarter reversion period. The Company evaluates the adequacy of the ACL on a quarterly basis. The ACL is comprised of reserves measured on a collective (pool) basis based on a lifetime loss-rate model when similar risk characteristics exist. For each pool of loans, the Company evaluates and applies qualitative adjustments to the calculated ACL based on several factors, including, but not limited to, changes in current and expected future economic conditions, changes in the nature and volume of the portfolio, changes in levels of concentrations, changes in the volume and severity of past due loans, changes in lending policies and personnel and changes in the competitive and regulatory environment of the banking industry. Loans that do not share similar risk characteristics with other loans are excluded from the loan pools and individually evaluated for impairment. For collateral dependent loans where the borrower is experiencing financial difficulty, which the Company evaluates independently from the loan pool, the expected credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral, which is based on third party appraisals. Individually evaluated loans that are not collateral dependent are evaluated based on a discounted cash flow methodology. Credits deemed uncollectible are charged to the ACL. Provisions for credit losses and recoveries on loans previously charged off are adjustments to the ACL. 21 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 $ 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, 2025 2024 2025 2024 Balance, beginning of period $ 26,620 $ 28,620 $ 26,721 $ 30,540 Provision for credit losses on loans (1) ( 86 ) ( 906 ) ( 3,609 ) ( 2,615 ) Charge-offs ( 93 ) ( 78 ) ( 351 ) ( 455 ) Recoveries 29 467 3,709 633 Balance, end of period $ 26,470 $ 28,103 $ 26,470 $ 28,103 ( 1 ) 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. 22 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 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 1-4 Family Multifamily Farmland Commercial Real Estate Commercial & Industrial Consumer Total Allowance for credit losses: Beginning balance $ 1,313 $ 6,434 $ 1,494 $ 5 $ 12,012 $ 5,263 $ 99 $ 26,620 Provision for credit losses on loans ( 33 ) ( 148 ) 368 — ( 386 ) 106 7 ( 86 ) Charge-offs — ( 59 ) — — — ( 8 ) ( 26 ) ( 93 ) Recoveries 1 11 — — — 12 5 29 Ending balance $ 1,281 $ 6,238 $ 1,862 $ 5 $ 11,626 $ 5,373 $ 85 $ 26,470 Three months ended September 30, 2024 Construction & Development 1-4 Family Multifamily Farmland Commercial Real Estate Commercial & Industrial Consumer Total Allowance for credit losses: Beginning balance $ 1,492 $ 5,741 $ 1,518 $ 9 $ 12,230 $ 7,529 $ 101 $ 28,620 Provision for credit losses on loans ( 596 ) 76 ( 293 ) ( 1 ) 89 ( 200 ) 19 ( 906 ) Charge-offs — ( 38 ) — — — ( 17 ) ( 23 ) ( 78 ) Recoveries 421 3 — — — 38 5 467 Ending balance $ 1,317 $ 5,782 $ 1,225 $ 8 $ 12,319 $ 7,350 $ 102 $ 28,103 Nine months ended September 30, 2025 Construction & Development 1-4 Family Multifamily Farmland Commercial Real Estate Commercial & Industrial Consumer Total Allowance for credit losses: Beginning balance $ 1,145 $ 5,603 $ 1,185 $ 8 $ 11,759 $ 6,933 $ 88 $ 26,721 Provision for credit losses on loans 134 618 677 ( 4 ) ( 3,455 ) ( 1,631 ) 52 ( 3,609 ) Charge-offs — ( 82 ) — — — ( 188 ) ( 81 ) ( 351 ) Recoveries 2 99 — 1 3,322 259 26 3,709 Ending balance $ 1,281 $ 6,238 $ 1,862 $ 5 $ 11,626 $ 5,373 $ 85 $ 26,470 Ending allowance balance for loans individually evaluated for impairment — 122 — — 91 — 1 214 Ending allowance balance for loans collectively evaluated for impairment 1,281 6,116 1,862 5 11,535 5,373 84 26,256 Loans receivable: Balance of loans individually evaluated for impairment 21 3,294 — — 4,155 135 75 7,680 Balance of loans collectively evaluated for impairment 140,540 379,151 130,232 3,996 918,386 560,628 9,910 2,142,843 Total period-end balance $ 140,561 $ 382,445 $ 130,232 $ 3,996 $ 922,541 $ 560,763 $ 9,985 $ 2,150,523 Nine months ended September 30, 2024 Construction & Development 1-4 Family Multifamily Farmland Commercial Real Estate Commercial & Industrial Consumer Total Allowance for credit losses: Beginning balance $ 2,471 $ 9,129 $ 1,124 $ 2 $ 10,691 $ 6,920 $ 203 $ 30,540 Provision for credit losses on loans ( 1,444 ) ( 3,214 ) 101 ( 30 ) 1,628 386 ( 42 ) ( 2,615 ) Charge-offs ( 149 ) ( 144 ) — — — ( 83 ) ( 79 ) ( 455 ) Recoveries 439 11 — 36 — 127 20 633 Ending balance $ 1,317 $ 5,782 $ 1,225 $ 8 $ 12,319 $ 7,350 $ 102 $ 28,103 Ending allowance balance for loans individually evaluated for impairment — 293 — — — 89 6 388 Ending allowance balance for loans collectively evaluated for impairment 1,317 5,489 1,225 8 12,319 7,261 96 27,715 Loans receivable: Balance of loans individually evaluated for impairment 24 3,557 — — 735 270 101 4,687 Balance of loans collectively evaluated for impairment 166,930 399,540 85,283 7,173 966,006 515,003 11,224 2,151,159 Total period-end balance $ 166,954 $ 403,097 $ 85,283 $ 7,173 $ 966,741 $ 515,273 $ 11,325 $ 2,155,846 Loan Modifications to Borrowers Exper iencing Financial Difficulty Occasionally, the Company modifies loans to borrowers in financial distress by providing certain concessions, such as principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, a term extension, or a combination of such concessions. Modifications that do not impact the contractual payments terms, such as covenant waivers, modification of a contingent acceleration clauses, and insignificant payment delays are not included in the disclosures. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL. 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 nine months ended September 30, 2025 and 2024 , the Company did not provide any modifications under these circumstances to borrowers experiencing financial difficulty. 23 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 5. STOCKHOLDERS ’ EQUITY 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. 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”). 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. 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. 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 the 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 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. 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 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 September 30, 2025 2024 Beginning of Period Net Change End of Period Beginning of Period Net Change End of Period Unrealized (loss) gain, AFS, net $ ( 36,701 ) $ 4,262 $ ( 32,439 ) $ ( 43,844 ) $ 10,523 $ ( 33,321 ) Reclassification of realized gain, AFS, net ( 4,926 ) ( 2 ) ( 4,928 ) ( 5,218 ) ( 1 ) ( 5,219 ) Unrealized gain, transfer from AFS to HTM, net 1 — 1 1 — 1 Accumulated other comprehensive (loss) income $ ( 41,626 ) $ 4,260 $ ( 37,366 ) $ ( 49,061 ) $ 10,522 $ ( 38,539 ) Nine months ended September 30, 2025 2024 Beginning of Period Net Change End of Period Beginning of Period Net Change End of Period Unrealized (loss) gain, AFS, net $ ( 43,432 ) $ 10,993 $ ( 32,439 ) $ ( 39,627 ) $ 6,306 $ ( 33,321 ) Reclassification of realized (gain) loss, AFS, net ( 4,926 ) ( 2 ) ( 4,928 ) ( 5,521 ) 302 ( 5,219 ) Unrealized gain, transfer from AFS to HTM, net 1 — 1 1 — 1 Accumulated other comprehensive (loss) income $ ( 48,357 ) $ 10,991 $ ( 37,366 ) $ ( 45,147 ) $ 6,608 $ ( 38,539 ) 24 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 6. STOCK-BASED COMPENSATION Equity Incentive Plan. The Company’s Amended and Restated 2017 Long-Term Incentive Compensation Plan (the “Plan”) authorizes the grant of various types of equity awards, such as restricted stock, RSUs, stock options and stock appreciation rights to eligible participants, which include all of the Company’s employees, non-employee directors, and consultants. Under the Plan, a total of 1,200,000 shares of common stock are reserved, 600,000 of which were authorized in 2021, for issuance to eligible participants pursuant to equity awards under the Plan. The Plan is administered by the Compensation Committee of the Board, which determines, within the provisions of the Plan, those eligible employees to whom, and the times at which, equity awards will be granted. The Compensation Committee, in its discretion, may delegate its authority and duties under the Plan to specified officers; however, only the Compensation Committee may approve the terms of equity awards to the Company’s executive officers and directors. 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. The Black-Scholes option pricing model incorporates various subjective assumptions, including expected term and expected volatility. 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 nine months ended September 30, 2024 . The Company did not grant any stock options during the nine months ended September 30, 2025 . Dividend yield 2.45% Expected volatility 40.80% Risk-free interest rate 4.29% Expected term (in years) 6.5 Weighted average grant date fair value $ 6.04 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. Nine months ended September 30, 2025 2024 Number of Options Weighted Average Exercise Price Number of Options Weighted Average Exercise Price Outstanding, beginning of period 260,602 $ 18.37 326,605 $ 17.32 Granted — — 29,997 16.35 Exercised ( 34,000 ) 15.74 ( 96,000 ) 14.16 Outstanding, end of period 226,602 $ 18.77 260,602 $ 18.37 Exercisable, end of period 168,786 $ 19.64 174,872 $ 19.15 25 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Restricted Stock and RSUs Under the Plan, the Company may grant restricted stock, RSUs, and other stock-based awards to Plan participants, subject to forfeiture upon the occurrence of certain events until the vesting dates specified in the participant’s award agreement. Historically, the Company granted restricted stock awards to Plan participants. 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. As of May 1, 2023, all of the previously granted shares of restricted stock had vested, and only outstanding RSUs remained. Compensation expense for RSUs, which is calculated based on the market price of the Company’s common stock at the grant date applied to the total number of units granted, is recognized on a straight-line basis over the requisite service period of generally five years for employees and, through the end of 2024, two years for non-employee directors . Beginning on January 1, 2025, grants of RSUs to non-employee directors generally vest over a service period of five years. 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 $ 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 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. Nine months ended September 30, 2025 2024 Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Balance, beginning of period 323,820 $ 16.65 336,749 $ 17.37 Granted 134,169 17.76 110,886 16.41 Forfeited ( 7,309 ) 16.54 ( 25,266 ) 17.06 Earned and issued ( 105,504 ) 17.68 ( 96,855 ) 18.84 Balance, end of period 345,176 $ 16.76 325,514 $ 16.63 26 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 7. DERIVATIVE FINANCIAL INSTRUMENTS As part of its liability management, the Company has historically utilized pay-fixed interest rate swaps to manage exposure against the variability in the expected future cash flows (future interest payments) attributable to changes in the 1 -month SOFR associated with the forecasted issuances of 1 -month fixed rate debt arising from a rollover strategy. To mitigate credit risk, securities were pledged to the Company by the counterparties in an amount greater than or equal to the gain position of the derivative contracts. 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 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 The Company enters into interest rate swaps that allow commercial loan customers to effectively convert a variable-rate commercial loan agreement to a fixed-rate commercial loan agreement. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to an interest rate swap agreement, which serves to effectively swap the customer’s variable-rate loan into a fixed-rate loan. The Company then enters into a corresponding swap agreement with a third party in order to economically hedge its exposure through the customer agreement. The interest rate swaps with both the customers and third parties are not designated as hedges under FASB ASC Topic 815, “ Derivatives and Hedging ” (“ASC 815” ) , and are marked to market through earnings. As the interest rate swaps are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; 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 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). Fair Value Notional (1) Derivative Assets (2) Derivative Liabilities (2) September 30, 2025 Interest rate swaps $ 366,266 $ 12,230 $ 12,230 December 31, 2024 Interest rate swaps $ 373,845 $ 17,195 $ 17,195 ( 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. ( 2 ) Derivative assets and liabilities are reported at fair value in “Other assets” and “Accrued taxes and other liabilities,” respectively, in the accompanying consolidated balance sheets. 27 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 8. FAIR VALUES OF FINANCIAL INSTRUMENTS In accordance with ASC 820, disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, is required. The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. Fair value is best determined based upon quoted market prices or exit prices. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows, and the fair value estimates may not be realized in an immediate settlement of the instruments. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. The Company holds SBIC qualified funds and other investment funds that do not have a readily determinable fair value. 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 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 In accordance with ASC 820, the Company groups its financial assets and financial liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to determine fair value. Level 1 – Valuation is based upon quoted prices for identical assets or liabilities traded in active markets. Level 2 – Valuation is based upon observable inputs other than quoted prices included in level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 – Valuation is based upon unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Fair Value of Assets and Liabilities Measured on a Recurring Basis The following methods and assumptions were used by the Company in estimating the fair value of assets and liabilities valued on a recurring basis: AFS Investment Securities and Marketable Equity Securities – Where quoted prices are available in an active market, the Company classifies the securities within level 1 of the valuation hierarchy. Securities are defined as both long and short positions. Level 1 securities include marketable equity securities in corporate stocks and mutual funds. If quoted market prices are not available, the Company estimates fair values using pricing models and discounted cash flows that consider standard input factors such as observable market data, benchmark yields, interest rate volatilities, broker/dealer quotes, and credit spreads. Examples of such instruments, which would generally be classified within level 2 of the valuation hierarchy if observable inputs are available, include obligations of the U.S. Treasury and U.S. government agencies and corporations, obligations of state and political subdivisions, corporate bonds, residential mortgage-backed securities, and commercial mortgage-backed securities. In certain cases where there is limited activity or less transparency around inputs to the valuation, the Company classifies those securities in level 3. Management monitors the current placement of securities in the fair value hierarchy to determine whether transfers between levels may be warranted based on market reference data, which may include reported trades; bids, offers or broker/dealer quotes; benchmark yields and spreads; as well as other reference data. 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 expected future cash flows of the agreements discounted at market rates. These derivative instruments are classified in level 2 of the fair value hierarchy. 28 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Assets and liabilities measured at fair value on a recurring basis are summarized in the table below as of the dates indicated (dollars in thousands). Estimated Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Fair Value (Level 1) (Level 2) (Level 3) September 30, 2025 Assets: Obligations of the U.S. Treasury and U.S. government agencies and corporations $ 18,896 $ — $ 18,896 $ — Obligations of state and political subdivisions 16,214 — 12,606 3,608 Corporate bonds 26,416 — 26,416 — Residential mortgage-backed securities 245,438 — 245,438 — Commercial mortgage-backed securities 63,287 — 63,287 — Equity securities at fair value 3,270 3,270 — — Interest rate swaps - gross assets 12,230 — 12,230 — Total assets $ 385,751 $ 3,270 $ 378,873 $ 3,608 Liabilities: Interest rate swaps - gross liabilities $ 12,230 $ — $ 12,230 $ — December 31, 2024 Assets: Obligations of the U.S. Treasury and U.S. government agencies and corporations $ 15,707 $ — $ 15,707 $ — Obligations of state and political subdivisions 16,120 — 11,803 4,317 Corporate bonds 27,267 — 26,773 494 Residential mortgage-backed securities 208,768 — 208,768 — Commercial mortgage-backed securities 63,259 — 63,259 — Equity securities at fair value 2,593 2,593 — — Interest rate swaps - gross assets 17,195 — 17,195 — Total assets $ 350,909 $ 2,593 $ 343,505 $ 4,811 Liabilities: Interest rate swaps - gross liabilities $ 17,195 $ — $ 17,195 $ — 29 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The Company reviews fair value hierarchy classifications on a quarterly basis. 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 nine months ended September 30, 2025 and 2024 (dollars in thousands). Obligations of State and Political Subdivisions Corporate Bonds Balance at December 31, 2024 $ 4,317 $ 494 Realized gain (loss) included in earnings — — Unrealized gain included in other comprehensive income 208 6 Purchases — — Sales — — Maturities, prepayments, and calls ( 917 ) ( 500 ) Transfers into level 3 — — Transfers out of level 3 — — Balance at September 30, 2025 $ 3,608 $ — Obligations of State and Political Subdivisions Corporate Bonds Balance at December 31, 2023 $ 5,250 $ 463 Realized gain (loss) included in earnings — — Unrealized (loss) gain included in other comprehensive income ( 940 ) 15 Purchases — — Sales — — Maturities, prepayments, and calls ( 27 ) — Transfers into level 3 — — Transfers out of level 3 — — 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 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 Valuation Technique Unobservable Inputs Range of Discounts September 30, 2025 Obligations of state and political subdivisions $ 3,608 Option-adjusted discounted cash flow model; present value of expected future cash flow model Bond appraisal adjustment (1) 0 % - 7 % December 31, 2024 Obligations of state and political subdivisions $ 4,317 Option-adjusted discounted cash flow model; present value of expected future cash flow model Bond appraisal adjustment (1) 2 % - 15 % Corporate bonds 494 Option-adjusted discounted cash flow model; present value of expected future cash flow model Bond appraisal adjustment (1) 1 % ( 1 ) Fair values determined through valuation analysis using coupon, yield (discount margin), liquidity and expected repayment dates. 30 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Fair Value of Assets and Liabilities Measured on a Nonrecurring Basis Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following methods and assumptions were used by the Company in estimating the fair value of assets and liabilities valued on a nonrecurring basis: Loans Individually Evaluated – For collateral dependent loans where the borrower is experiencing financial difficulty the expected credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral, which is based on third party appraisals. Individually evaluated loans that are not collateral dependent are evaluated based on a discounted cash flow methodology. Credits deemed uncollectible are charged to the ACL . Since not all valuation inputs are observable, these nonrecurring fair value determinations are classified as level 3. Other Real Estate Owned – Other real estate owned consists of properties acquired through foreclosure or acceptance of a deed in lieu of foreclosure and real property no longer used in the Bank’s business operations. Real estate acquired through foreclosure is initially recorded at fair value at the time of foreclosure, less estimated selling cost, and any related write-down is charged to the ACL. 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. Subsequently, it may be necessary to record nonrecurring fair value adjustments for declines in fair value. Fair value, when recorded, is determined based on appraisals by qualified licensed appraisers and adjusted for management’s estimates of costs to sell. 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 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 Valuation Technique Unobservable Inputs Range of Discounts Weighted Average Discount (3) September 30, 2025 Loans individually evaluated for impairment (1) $ 3,046 Discounted cash flows; underlying collateral value Collateral discounts and estimated costs to sell 1 % - 100 % 5 % Other real estate owned (2) 3,217 Underlying collateral value, third party appraisals Collateral discounts and discount rates 10 % - 14 % 12 % December 31, 2024 Loans individually evaluated for impairment (1) $ 2,174 Discounted cash flows; underlying collateral value Collateral discounts and estimated costs to sell 0 % - 79 % 31 % Other real estate owned (2) 900 Underlying collateral value, third party appraisals Collateral discounts and discount rates 18 % 18 % ( 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 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. 31 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Financial Instruments Accounting guidance requires the disclosure of estimated fair value information about certain on- and off-balance sheet financial instruments, including those financial instruments that are not measured and reported at fair value on a recurring or nonrecurring basis. The significant methods and assumptions used by the Company to estimate the fair value of financial instruments are discussed below. Cash and Cash Equivalents – For these short-term instruments, the fair value is the carrying value. The Company classifies these assets in level 1 of the fair value hierarchy. Investment Securities and Equity Securities – The fair value measurement techniques and assumptions for AFS securities and marketable equity securities is discussed earlier in the note. The same measurement techniques and assumptions were applied to the valuation of HTM securities and nonmarketable equity securities including equity in correspondent banks. Loans – The fair value of portfolio loans, net is determined using an exit price methodology. The exit price methodology is based on a discounted cash flow analysis, in which projected cash flows are based on contractual cash flows adjusted for prepayments for certain loan types (e.g., residential mortgage loans and multifamily loans) and the use of a discount rate based on expected relative risk of the cash flows. The discount rate selected considers loan type, maturity date, a liquidity premium, cost to service, and cost of capital, which is a level 3 fair value estimate. Loans held for sale are measured using quoted market prices when available. If quoted market prices are not available, comparable market values or discounted cash flow analyses may be utilized. The Company classifies these assets in level 3 of the fair value hierarchy. Deposits – The fair values disclosed for noninterest-bearing demand deposits are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts). These noninterest-bearing deposits are classified in level 2 of the fair value hierarchy. All interest-bearing deposits are classified in level 3 of the fair value hierarchy. The carrying amounts of variable-rate accounts (for example, interest-bearing checking, savings, and money market accounts), fixed-term money market accounts, and certificates of deposit approximate their fair values at the reporting date. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow analysis that applies market interest rates on comparable instruments to a schedule of aggregated expected monthly maturities on time deposits. Short-Term Borrowings – The carrying amounts of federal funds purchased, repurchase agreements, and other short-term borrowings approximate their fair values. The Company classifies these borrowings in level 2 of the fair value hierarchy. Long-Term Borrowings, including Junior Subordinated Debt Securities – The fair values of long-term borrowings are estimated using discounted cash flow analyses based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. The fair value of the Company’s long-term debt is therefore classified in level 3 in the fair value hierarchy. Subordinated Debt Securities – The fair value of subordinated debt is estimated based on current market rates on similar debt in the market. The Company classifies this debt in level 2 of the fair value hierarchy. Derivative Financial Instruments – The fair value measurement techniques and assumptions for derivative financial instruments is discussed earlier in the note. The estimated fair values of the Company’s financial instruments are summarized in the tables below as of the dates indicated (dollars in thousands). September 30, 2025 Carrying Amount Estimated Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 35,373 $ 35,373 $ 35,373 $ — $ — Investment securities - AFS 370,251 370,251 — 366,643 3,608 Investment securities - HTM 47,834 50,576 — 1,710 48,866 Equity securities at fair value 3,270 3,270 3,270 — — Nonmarketable equity securities 15,255 15,255 — 15,255 — Loans, net of allowance 2,124,053 2,035,736 — — 2,035,736 Interest rate swaps - gross assets 12,230 12,230 — 12,230 — Financial liabilities: Deposits, noninterest-bearing $ 446,361 $ 446,361 $ — $ 446,361 $ — Deposits, interest-bearing 1,926,317 1,838,925 — — 1,838,925 Repurchase agreements 15,066 15,066 — 15,066 — FHLB long-term advances 60,000 60,019 — — 60,019 Junior subordinated debt 8,806 8,806 — — 8,806 Subordinated debt 16,728 14,728 — 14,728 — Interest rate swaps - gross liabilities 12,230 12,230 — 12,230 — December 31, 2024 Carrying Amount Estimated Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 27,922 $ 27,922 $ 27,922 $ — $ — Investment securities - AFS 331,121 331,121 — 326,310 4,811 Investment securities - HTM 42,687 42,144 — 1,821 40,323 Equity securities at fair value 2,593 2,593 2,593 — — Nonmarketable equity securities 16,502 16,502 — 16,502 — Loans, net of allowance 2,098,363 1,973,780 — — 1,973,780 Interest rate swaps - gross assets 17,195 17,195 — 17,195 — Financial liabilities: Deposits, noninterest-bearing $ 432,143 $ 432,143 $ — $ 432,143 $ — Deposits, interest-bearing 1,913,801 1,826,868 — — 1,826,868 FHLB short-term advances and repurchase agreements 15,591 15,577 — 15,577 — FHLB long-term advances 60,000 59,620 — — 59,620 Junior subordinated debt 8,733 8,733 — — 8,733 Subordinated debt 16,697 14,738 — 14,738 — Interest rate swaps - gross liabilities 17,195 17,195 — 17,195 — 32 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 9. INCOME TAXES 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 September 30, Nine months ended September 30, 2025 2024 2025 2024 Income tax expense $ 1,293 $ 784 $ 3,649 $ 2,993 Effective tax rate 17.3 % 12.7 % 17.7 % 17.5 % 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. NOTE 10. COMMITMENTS AND CONTINGENCIES Unfunded Commitments The Company is a party to financial instruments with off-balance sheet risk entered into in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit consisting of loan commitments and standby letters of credit, which are not included in the accompanying financial statements. Such financial instruments are recorded in the financial statements when they become payable. 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 $ 0.3 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. The Company applies the same credit standards used in the lending process when extending these commitments and periodically reassesses the customer’s creditworthiness through ongoing credit reviews. Since some commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Collateral is obtained based on the Company’s assessment of the transaction. Substantially all standby letters of credit issued have expiration dates within one year. The table below shows the approximate amounts of the Company’s commitments to extend credit as of the dates presented (dollars in thousands). September 30, 2025 December 31, 2024 Loan commitments $ 428,674 $ 377,301 Standby letters of credit 7,479 7,658 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. 33 Table of Contents INVESTAR HOLDING CORPORATION NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 11. LEASES The Company’s primary leasing activities relate to certain real estate leases entered into in support of the Company’s branch operations. The Company’s lease agreements under which its branch locations are operated have all been designated as operating leases. The Company does not lease equipment under operating leases, nor does it have leases designated as finance leases. Lease expense for lease payments is recognized on a straight-line basis over the lease term. 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 nine months ended September 30, 2025 and 2024 (dollars in thousands). September 30, 2025 2024 Total operating lease cost $ 337 $ 331 Weighted-average remaining lease term (in years) 5.0 6.0 Weighted-average discount rate 3.4 % 3.3 % 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 September 30, 2025 are presented below (dollars in thousands). Remainder of 2025 $ 114 2026 459 2027 459 2028 405 2029 337 Thereafter 350 Total $ 2,124 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. All tenant leases are operating leases. 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. 34 Table of Contents ITEM 2. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Cautionary Note Regarding Forward-Looking Statements When included in this Quarterly Report on Form 10-Q, or in other documents that Investar Holding Corporation files with the SEC or in statements made by or on behalf of the Company, words like “may,” “should,” “could,” “predict,” “potential,” “believe,” “think,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would,” “outlook” and similar expressions or the negative version of those words are intended to identify forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a variety of risks and uncertainties that could cause actual results to differ materially from those described therein. The Company’s forward-looking statements are based on assumptions and estimates that management believes to be reasonable in light of the information available at the time such statements are made. However, many of the matters addressed by these statements are inherently uncertain and could be affected by many factors beyond management’s control. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. These factors include, but are not limited to, the following, any one or more of which could materially affect the outcome of future events: • the significant risks and uncertainties for our business, results of operations and financial condition, as well as our regulatory capital and liquidity ratios and other regulatory requirements caused by business and economic conditions generally and in the financial services industry in particular, whether nationally, regionally or in the markets in which we operate, including heightened uncertainties resulting from recent changing trade and tariff policies that could have an adverse impact on inflation and economic growth at least in the near term; • changes in inflation, interest rates, yield curves and interest rate spread relationships that affect our loan and deposit pricing; • our ability to successfully execute our strategy focused on consistent, quality earnings through the optimization of our balance sheet, and our ability to successfully execute a long-term growth strategy; • our ability to achieve organic loan and deposit growth, and the composition of that growth; • our ability to identify and enter into agreements to combine with attractive acquisition candidates, finance acquisitions, complete acquisitions after definitive agreements are entered into, and successfully integrate and grow acquired operations; • our potential growth, including our entrance or expansion into new markets, and the need for sufficient capital to support that growth; • a reduction in liquidity, including as a result of a reduction in the amount of deposits we hold or other sources of liquidity, which may be caused by, among other things, disruptions in the banking industry similar to those that occurred in early 2023 that caused bank depositors to move uninsured deposits to other banks or alternative investments outside the banking industry; • inaccuracy of the assumptions and estimates we make in establishing reserves for credit losses and other estimates; • changes in the quality or composition of our loan portfolio, including adverse developments in borrower industries or in the repayment ability of individual borrowers; • changes in the quality and composition of, and changes in unrealized losses in, our investment portfolio, including whether we may have to sell securities before their recovery of amortized cost basis and realize losses; • the extent of continuing client demand for the high level of personalized service that is a key element of our banking approach as well as our ability to execute our strategy generally; • our dependence on our management team, and our ability to attract and retain qualified personnel; • the concentration of our business within our geographic areas of operation in Louisiana, Texas and Alabama; • risks to holders of our common stock relating to our Series A Preferred Stock, including but not limited to dividend preferences to holders of the preferred stock, other conditions with respect to the payment of dividends on our common stock, potential dilution upon conversion of the preferred stock, and liquidation preferences to holders of the preferred stock; • increasing costs of complying with new and potential future regulations; • new or increasing geopolitical tensions, including resulting from wars in Ukraine and Israel and surrounding areas; • the emergence or worsening of widespread public health challenges or pandemics; • concentration of credit exposure; • any deterioration in asset quality and higher loan charge-offs, and the time and effort necessary to resolve problem assets; • fluctuations in the price of oil and natural gas; • data processing system failures and errors; 35 Table of Contents • risks associated with our digital transformation process, including increased risks of cyberattacks and other security breaches and challenges associated with addressing the increased prevalence of artificial intelligence; • risks of losses resulting from increased fraud attacks against us and others in the financial services industry; • potential impairment of our goodwill and other intangible assets; • the impact of litigation and other legal proceedings to which we become subject; • competitive pressures in the commercial finance, retail banking, mortgage lending and consumer finance industries, as well as the financial resources of, and products offered by, competitors; • the impact of changes in laws and regulations applicable to us, including banking, securities and tax laws and regulations and accounting standards, as well as changes in the interpretation of such laws and regulations by our regulators; • changes in the scope and costs of FDIC insurance and other coverages; • governmental monetary and fiscal policies; and • hurricanes, tropical storms, tropical depressions, floods, winter storms, droughts and other adverse weather events, all of which have affected the Company’s market areas from time to time; other natural disasters; oil spills and other man-made disasters; acts of terrorism; other international or domestic calamities; acts of God; and other matters beyond our control. Forward-Looking and Cautionary Statements Relating to the Pending Wichita Falls Transaction With respect to the pending WFB transaction, forward-looking statements include, but are not limited to, statements about the potential benefits of the transaction, including future financial and operating results; statements about the Company’s plans, objectives, expectations and intentions; statements about the expected timing of completion of the proposed merger; and other statements that are not historical facts. 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 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. Additional information on these and other risk factors can be found in Part I. Item 1A. “Risk Factors” and Part II. Item 7. “MD&A – Cautionary Note Regarding Forward-Looking Statements” in the Company’s Annual Report and in Part II. Item 1A. “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. We expressly disclaim any obligation or undertaking to update our forward-looking statements, and we do not intend to release publicly any updates or changes in our expectations concerning the forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based, except as required by law. 36 Table of Contents Critical Accounting Estimates The preparation of our consolidated financial statements in accordance with GAAP requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, income and expenses and related disclosure of contingent assets and liabilities. Although independent third parties are often engaged to assist us in the estimation process, management evaluates the results, challenges assumptions used and considers other factors which could impact these estimates. Actual results may differ from these estimates under different assumptions or conditions. There were no material changes or developments during the reporting period with respect to methodologies that the Company uses when applying what management believes are significant accounting policies and developing critical accounting estimates, which are those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. We believe that the judgments, estimates and assumptions that we use in the preparation of our consolidated financial statements are appropriate. For more detailed information about our accounting policies, please refer to Note 1. Summary of Significant Accounting Policies of our Annual Report. Company Overview This section presents management’s perspective on the consolidated financial condition and results of operations of the Company and its wholly-owned subsidiary, the Bank. The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and related notes thereto included herein, and the audited consolidated financial statements for the year ended December 31, 2024 , including the notes thereto, and the related MD&A in the Annual Report. All cross-references to the “Notes” in this Form 10-Q refer to the Notes to Consolidated Financial Statements contained in Part I. Item 1. Financial Statements unless otherwise noted . The Bank commenced operations in 2006, and we completed our initial public offering in July 2014. On July 1, 2019, the Bank changed from a Louisiana state bank charter to a national bank charter, and its name changed to Investar Bank, National Association. Through the Bank, we provide full banking services, excluding trust services, tailored primarily to meet the needs of individuals, professionals, and small to medium-sized businesses. Our primary areas of operation are south Louisiana, including Baton Rouge, New Orleans, Lafayette, Lake Charles, and their surrounding areas; southeast Texas, primarily Houston and its surrounding area; and Alabama, including York and Oxford and their surrounding areas. 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. We have continued to evaluate opportunities to improve our branch network efficiency, leverage our digital initiatives, and further reduce costs. We closed one branch in our Alabama market during the first quarter of 2024. Our strategy focuses on consistent, quality earnings through the optimization of our balance sheet. Our strategy includes originating and renewing high quality, primarily variable-rate, loans and allowing higher risk credit relationships to run off. We have kept duration short on our liabilities to provide flexibility to secure lower cost funding that was accretive to our net interest margin. Our strategy also includes growth through acquisitions, including whole-bank acquisitions, strategic branch acquisitions and asset acquisitions. We have completed seven whole-bank acquisitions since 2011 and regularly review acquisition opportunities. Our most recent whole bank acquisition was completed in April 2021. 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. As a financial holding company operating through one reportable segment, we generate our income principally from interest on loans and, to a lesser extent, our securities investments, as well as from fees charged in connection with our various loan and deposit services. Our principal expenses are interest expense on interest-bearing customer deposits and borrowings, salaries and employee benefits, occupancy costs, data processing and other operating expenses. We measure our performance through our net interest margin, return on average assets, and return on average equity, among other metrics, while seeking to maintain appropriate regulatory leverage and risk-based capital ratios. Pending Acquisition of WFB 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 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 Note 5. Stockholders’ Equity. 37 Table of Contents Certain Events That Affect Period-over-Period Comparability Changing Inflation and Interest Rates . Inflation increased rapidly during 2021 through June 2022. After June 2022, the rate of inflation generally declined although it has remained above the Federal Reserve’s target inflation rate of 2%. In response, the Federal Reserve raised the federal funds target rate multiple times from March 2022 through July 2023. During 2023, the Federal Reserve raised the federal funds target rate four times, from 4.25% to 4.50%, to 5.25% to 5.50%. 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%. 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 . Between March 10, 2023 and March 12, 2023, state banking supervisors closed Silicon Valley Bank and Signature Bank and named the FDIC as receiver. At the time of closure, they were among the 30 largest U.S. banks. While the reasons for their failure are complex and have not been fully investigated, reports indicate that, among other things, both banks had grown in asset size in recent periods at a faster rate than their peers, had large proportions of uninsured deposits (approximately 87.5% and 89.7% of total deposits, respectively) and high unrealized losses on investment securities. Silicon Valley Bank’s business strategy focused on serving the technology and venture capital sectors, and Signature Bank had significant exposure to deposits from the digital asset industry. Prior to their closure, both banks experienced sudden and rapid deposit withdrawals. These events caused bank deposit customers, particularly those with uninsured deposits, to become concerned regarding the safety of their deposits, and in some cases caused customers to withdraw deposits. In response to the disruptions, among other things, the Federal Reserve announced a new BTFP to provide eligible banks with loans of up to one-year maturity backed by collateral pledged at par value. On April 24, 2023, San Francisco-based First Republic Bank, also among the 30 largest U.S. banks, reported a large deposit outflow and substantially reduced net income. First Republic Bank also had a large proportion of uninsured deposits (67% as of December 31, 2022). On May 1, 2023, regulators seized First Republic Bank and sold all of its deposits and most of its assets to JPMorgan Chase Bank. In response to the disruptions and related publicity, we formed an internal task force that included members of our ALCO. The task force met frequently to review our liquidity position and liquidity sources, and oversaw the Bank’s process to qualify for the BTFP. In addition, we took steps to inform our customers about our financial position, liquidity and insured deposit products. During the second quarter of 2023, we utilized the BTFP and reduced FHLB advances. The Bank utilized this source of funding due to its lower rate, the ability to prepay the obligations without penalty, and as a means to lock in funding. During the fourth quarter of 2023 and again in the first quarter of 2024, the Bank refinanced its BTFP borrowings with new borrowings under the program due to more favorable rates. The Federal Reserve ceased making new loans under the BTFP on March 11, 2024. 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 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. Item 1A. Risk Factors. Branch Activity. We closed one branch in Anniston, Alabama in January 2024. In October 2024, w e converted an existing loan and deposit production office in our Texas market to a full-service branch location. Subordinated Debt Repurchases. During the first quarter of 2024, we repurchased $1.0 million in principal amount of our 2032 Notes. 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. Subordinated Debt Redemption. During the fourth quarter of 2024, we redeemed all of the remaining $20.0 million in principal amount of the 2029 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 . 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, and we also recorded related noninterest expense of $0.2 million. We recorded an impairment charge of $21.6 million related to this relationship during the third quarter of 2021. 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. 38 Table of Contents Overview of Financial Condition and Results of Operations 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. 39 Table of Contents Discussion and Analysis of Financial Condition Loans General . 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 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). September 30, 2025 December 31, 2024 Percentage of Percentage of Amount Total Loans Amount Total Loans Construction and development $ 140,561 6.5 % $ 154,553 7.3 % 1-4 Family 382,445 17.8 396,815 18.7 Multifamily 130,232 6.1 84,576 4.0 Farmland 3,996 0.2 6,977 0.3 Commercial real estate Owner-occupied (1) 462,830 21.5 449,259 21.1 Nonowner-occupied 459,711 21.4 495,289 23.3 Total mortgage loans on real estate 1,579,775 73.5 1,587,469 74.7 Commercial and industrial (1) 560,763 26.1 526,928 24.8 Consumer 9,985 0.4 10,687 0.5 Total loans $ 2,150,523 100 % $ 2,125,084 100 % (1) The Company ’ s business lending portfolio consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans. 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 $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. 40 Table of Contents Loan Concentrations . 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 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). September 30, 2025 December 31, 2024 Amount Percentage of Total Amount Percentage of Total Owner-occupied Retail trade $ 126,121 27 % $ 136,350 30 % Real estate 60,239 13 67,590 15 Wholesale trade 59,885 13 48,930 11 Healthcare and social assistance 37,493 8 38,950 9 Other services (except public administration) 30,111 7 32,532 7 Accommodation and food services 29,957 6 30,071 7 Mining, quarrying, and oil and gas extraction 25,595 6 3,415 1 Manufacturing 20,747 4 16,618 4 Construction 16,630 4 18,276 4 All other (1) 56,052 12 56,527 12 Total owner-occupied $ 462,830 100 % $ 449,259 100 % Nonowner-occupied Retail $ 158,098 34 % $ 168,033 34 % Healthcare 86,218 19 95,641 19 Office 84,082 18 97,261 20 Warehouse 56,185 12 57,684 12 Hotel/motel 30,195 7 30,875 6 All other 44,933 10 45,795 9 Total nonowner-occupied $ 459,711 100 % $ 495,289 100 % (1) No individual category within “All other” represents more than 4% of total owner-occupied loans. The following table sets forth loans outstanding at 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. Demand loans, loans having no stated schedule of repayments and no stated maturity and overdrafts are reported below as due in one year or less (dollars in thousands). One Year or Less After One Year Through Five Years After Five Years Through Ten Years After Ten Years Through Fifteen Years After Fifteen Years Total Mortgage loans on real estate: Construction and development $ 102,362 $ 33,352 $ 2,453 $ 2,247 $ 147 $ 140,561 1-4 Family 81,540 65,269 19,472 16,910 199,254 382,445 Multifamily 63,596 59,287 6,490 — 859 130,232 Farmland 1,826 2,133 37 — — 3,996 Commercial real estate Owner-occupied 49,499 190,802 138,241 76,834 7,454 462,830 Nonowner-occupied 100,905 242,156 91,259 25,235 156 459,711 Commercial and industrial 342,745 104,031 57,811 55,047 1,129 560,763 Consumer 3,509 5,174 1,070 149 83 9,985 Total loans $ 745,982 $ 702,204 $ 316,833 $ 176,422 $ 209,082 $ 2,150,523 Loans with fixed rates: Mortgage loans on real estate: Construction and development $ 17,135 $ 18,859 $ 2,105 $ 2,247 $ 147 $ 40,493 1-4 Family 14,872 59,669 19,333 16,910 199,254 310,038 Multifamily 14,839 51,139 3,624 — 860 70,462 Farmland 441 2,133 36 — — 2,610 Commercial real estate Owner-occupied 11,461 144,417 103,680 73,415 1,465 334,438 Nonowner-occupied 84,033 197,095 82,147 12,160 155 375,590 Commercial and industrial 42,071 76,791 57,811 55,047 1,129 232,849 Consumer 3,023 5,174 1,070 149 83 9,499 Total loans with fixed rates $ 187,875 $ 555,277 $ 269,806 $ 159,928 $ 203,093 $ 1,375,979 Loans with variable rates: Mortgage loans on real estate: Construction and development $ 85,227 $ 14,493 $ 348 $ — $ — $ 100,068 1-4 Family 66,668 5,600 139 — — 72,407 Multifamily 48,757 8,148 2,865 — — 59,770 Farmland 1,386 — — — — 1,386 Commercial real estate Owner-occupied 38,037 46,385 34,562 3,419 5,989 128,392 Nonowner-occupied 16,872 45,061 9,113 13,075 — 84,121 Commercial and industrial 300,674 27,240 — — — 327,914 Consumer 486 — — — — 486 Total loans with variable rates $ 558,107 $ 146,927 $ 47,027 $ 16,494 $ 5,989 $ 774,544 41 Table of Contents Investment Securities We purchase investment securities primarily to provide a source for meeting liquidity needs, with return on investment a secondary consideration. We also use investment securities as collateral for certain deposits and other types of borrowings. 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. Investment Securities. 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). September 30, 2025 December 31, 2024 Balance Percentage of Portfolio Balance Percentage of Portfolio Obligations of the U.S. Treasury and U.S. government agencies and corporations $ 18,896 4.5 % $ 15,707 4.2 % Obligations of state and political subdivisions 62,160 14.9 56,738 15.2 Corporate bonds 26,416 6.3 27,267 7.3 Residential mortgage-backed securities 247,326 59.2 210,837 56.4 Commercial mortgage-backed securities 63,287 15.1 63,259 16.9 Total $ 418,085 100 % $ 373,808 100 % The investment portfolio consists of AFS and HTM securities. We do not hold any investments classified as trading. We classify debt securities as HTM if management has the positive intent and ability to hold the securities to maturity. HTM debt securities are stated at amortized cost. Securities not classified as HTM are classified as AFS and are stated at fair value . As of September 30, 2025 , AFS securities comprised 89% 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 September 30, 2025 and December 31, 2024 . 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 September 30, 2025 (dollars in thousands). One Year or Less After One Year Through Five Years After Five Years Through Ten Years After Ten Years Amount Yield Amount Yield Amount Yield Amount Yield Held to maturity: Obligations of state and political subdivisions $ — — % $ 2,203 3.75 % $ 5,740 6.24 % $ 38,003 7.02 % Residential mortgage-backed securities — — — — — — 1,888 3.13 Available for sale: Obligations of the U.S. Treasury and U.S. government agencies and corporations 5,037 4.01 5,960 6.37 7,226 4.43 869 4.97 Obligations of state and political subdivisions 104 3.81 3,528 2.90 6,470 2.27 7,651 2.81 Corporate bonds 550 4.14 10,117 5.10 14,123 4.28 3,000 4.26 Residential mortgage-backed securities — — 301 1.96 2,662 2.46 279,498 2.72 Commercial mortgage-backed securities 23 1.67 5,250 4.17 1,555 3.66 63,805 3.42 $ 5,714 $ 27,359 $ 37,776 $ 394,714 The maturity of mortgage-backed securities reflects scheduled repayments based upon the contractual maturities of the securities. 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. 42 Table of Contents Deposits 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 Amount Percentage of Total Deposits Amount Percentage of Total Deposits Noninterest-bearing demand deposits $ 446,361 18.8 % $ 432,143 18.4 % Interest-bearing demand deposits 633,766 26.7 554,777 23.7 Money market deposits 237,339 10.0 191,548 8.2 Brokered demand deposits — — 47,320 2.0 Savings deposits 137,514 5.8 134,879 5.7 Brokered time deposits 210,822 8.9 245,520 10.5 Time deposits 706,876 29.8 739,757 31.5 Total deposits $ 2,372,678 100 % $ 2,345,944 100 % 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 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 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. 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 $ 99,713 $ 119,312 Over three months through six months 77,181 76,073 Over six months through twelve months 54,688 44,570 Over twelve months 8,620 16,823 Total $ 240,202 $ 256,778 43 Table of Contents Borrowings 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 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. We utilized this source of funding due to its lower rate and the ability to prepay the obligations without penalty. The rates on the borrowings under the BTFP were fixed for one year from the day each borrowing was made. During the fourth quarter of 2023 and again in the first quarter of 2024, we refinanced all of our borrowings under the BTFP with new loans under the BTFP with a one-year term due to more favorable rates . The BTFP ceased making new loans as scheduled on March 11, 2024. 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 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 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 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 Average Balances Cost of Short-term Borrowings Cost of Short-term Borrowings Three months ended September 30, Nine months ended September 30, Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 2025 2024 2025 2024 Federal funds purchased and short-term FHLB advances $ 17,243 $ — $ 25,523 $ 3,789 4.44 % — % 4.44 % 5.53 % Borrowings under BTFP — 198,239 — 219,133 — 4.76 — 4.78 Repurchase agreements 11,209 9,300 11,622 7,844 0.61 0.75 0.70 0.58 Total short-term borrowings $ 28,452 $ 207,539 $ 37,145 $ 230,766 2.93 % 4.59 % 3.27 % 4.65 % 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. Item 7. “MD&A – Discussion and Analysis of Financial Condition – Borrowings – 2032 Notes” a nd Note 10 to the financial statements included in such report. Stockholders ’ Equity 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. 44 Table of Contents Results of Operations Net Interest Income and Net Interest Margin Net interest income, our principal source of earnings, is the difference between the interest income generated by earning assets and the total interest cost of the deposits and borrowings obtained to fund those assets. Factors affecting the level of net interest income include the volume of earning assets and interest-bearing liabilities, yields earned on loans and investments and rates paid on deposits and other borrowings, the level of nonperforming loans, the amount of noninterest-bearing liabilities supporting earning assets, and the interest rate environment. Net interest margin is the ratio of net interest income to average interest-earning assets. 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 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% 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 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 $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 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 $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 . 45 Table of Contents 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 September 30, 2025 and 2024 . Averages presented in the table below are daily averages (dollars in thousands). Three months ended September 30, 2025 2024 Interest Interest Average Income/ Average Income/ Balance Expense (1) Yield/ Rate (1) Balance Expense (1) Yield/ Rate (1) Assets Interest-earning assets: Loans $ 2,141,280 $ 32,563 6.03 % $ 2,159,412 $ 32,764 6.04 % Securities: Taxable 406,153 3,096 3.02 396,254 2,755 2.77 Tax-exempt 51,442 689 5.31 24,552 228 3.68 Interest-earning balances with banks 60,431 747 4.90 79,793 1,101 5.49 Total interest-earning assets 2,659,306 37,095 5.53 2,660,011 36,848 5.51 Cash and due from banks 27,102 26,121 Intangible assets 41,370 41,927 Other assets 96,704 97,704 Allowance for credit losses (27,144 ) (28,794 ) Total assets $ 2,797,338 $ 2,796,969 Liabilities and stockholders’ equity Interest-bearing liabilities: Deposits: Interest-bearing demand deposits $ 836,137 $ 4,802 2.28 % $ 676,946 $ 3,440 2.02 % Brokered demand deposits 109 1 4.59 — — — Savings deposits 136,314 380 1.11 127,536 366 1.14 Brokered time deposits 242,224 2,842 4.66 255,076 3,335 5.20 Time deposits 704,593 6,701 3.77 754,217 8,588 4.53 Total interest-bearing deposits 1,919,377 14,726 3.04 1,813,775 15,729 3.45 Short-term borrowings (2) 28,452 210 2.93 207,539 2,396 4.59 Long-term debt 85,521 1,006 4.66 71,946 867 4.79 Total interest-bearing liabilities 2,033,350 15,942 3.11 2,093,260 18,992 3.61 Noninterest-bearing deposits 451,029 433,126 Other liabilities 21,786 31,805 Stockholders’ equity 291,173 238,778 Total liabilities and stockholders’ equity $ 2,797,338 $ 2,796,969 Net interest income/net interest margin $ 21,153 3.16 % $ 17,856 2.67 % (1) Interest income and net interest margin are expressed as a percentage of average interest-earning assets outstanding for the indicated periods and are not presented on a tax equivalent basis. Interest expense is expressed as a percentage of average interest-bearing liabilities for the indicated periods. (2) For additional information, see Discussion and Analysis of Financial Condition – Borrowings. Three months ended September 30, 2025 vs. Three months ended September 30, 2024 Volume Rate Net (1) Interest income: Loans $ (275 ) $ 74 $ (201 ) Securities: Taxable 69 272 341 Tax-exempt 249 212 461 Interest-earning balances with banks (267 ) (87 ) (354 ) Total interest-earning assets (224 ) 471 247 Interest expense: Interest-bearing demand deposits 809 553 1,362 Brokered demand deposits 1 — 1 Savings deposits 25 (11 ) 14 Brokered time deposits (168 ) (325 ) (493 ) Time deposits (565 ) (1,322 ) (1,887 ) Short-term borrowings (2,068 ) (118 ) (2,186 ) Long-term debt 164 (25 ) 139 Total interest-bearing liabilities (1,802 ) (1,248 ) (3,050 ) Change in net interest income $ 1,578 $ 1,719 $ 3,297 (1) Changes in interest due to both volume and rate have been allocated entirely to rate. 46 Table of Contents 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 $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. 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 increased primarily due to an increase in yield on the investment securities portfolio. 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 5.46% 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 . 47 Table of Contents 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 nine months ended September 30, 2025 and 2024 . Averages presented in the table below are daily averages (dollars in thousands). Nine months ended September 30, 2025 2024 Interest Interest Average Income/ Average Income/ Balance Expense (1) Yield/ Rate (1) Balance Expense (1) Yield/ Rate (1) Assets Interest-earning assets: Loans $ 2,118,268 $ 94,255 5.95 % $ 2,174,502 $ 97,060 5.96 % Securities: Taxable 398,778 8,736 2.93 403,442 8,338 2.76 Tax-exempt 50,631 2,025 5.35 25,022 680 3.63 Interest-earning balances with banks 50,688 1,872 4.94 54,641 2,282 5.58 Total interest-earning assets 2,618,365 106,888 5.46 2,657,607 108,360 5.45 Cash and due from banks 26,475 26,114 Intangible assets 41,498 42,083 Other assets 95,288 94,496 Allowance for credit losses (26,855 ) (29,295 ) Total assets $ 2,754,771 $ 2,791,005 Liabilities and stockholders’ equity Interest-bearing liabilities: Deposits: Interest-bearing demand deposits $ 801,024 $ 13,277 2.22 % $ 672,047 $ 9,689 1.93 % Brokered demand deposits 3,170 106 4.47 — — — Savings deposits 135,380 1,081 1.07 130,438 1,046 1.07 Brokered time deposits 249,921 8,873 4.75 250,864 9,776 5.21 Time deposits 711,810 20,485 3.85 743,489 24,928 4.48 Total interest-bearing deposits 1,901,305 43,822 3.08 1,796,838 45,439 3.38 Short-term borrowings (2) 37,145 910 3.27 230,766 8,027 4.65 Long-term debt 85,487 3,014 4.71 73,135 2,624 4.79 Total interest-bearing liabilities 2,023,937 47,746 3.15 2,100,739 56,090 3.57 Noninterest-bearing deposits 443,391 429,090 Other liabilities 22,735 29,482 Stockholders’ equity 264,708 231,694 Total liabilities and stockholders’ equity $ 2,754,771 $ 2,791,005 Net interest income/net interest margin $ 59,142 3.02 % $ 52,270 2.63 % (1) Interest income and net interest margin are expressed as a percentage of average interest-earning assets outstanding for the indicated periods and are not presented on a tax equivalent basis. Interest expense is expressed as a percentage of average interest-bearing liabilities for the indicated periods. (2) For additional information, see Discussion and Analysis of Financial Condition – Borrowings. Nine months ended September 30, 2025 vs. Nine months ended September 30, 2024 Volume Rate Net (1) Interest income: Loans $ (2,510 ) $ (295 ) $ (2,805 ) Securities: Taxable (97 ) 495 398 Tax-exempt 695 650 1,345 Interest-earning balances with banks (165 ) (245 ) (410 ) Total interest-earning assets (2,077 ) 605 (1,472 ) Interest expense: Interest-bearing demand deposits 1,860 1,728 3,588 Brokered demand deposits 106 — 106 Savings deposits 40 (5 ) 35 Brokered time deposits (38 ) (865 ) (903 ) Time deposits (1,062 ) (3,381 ) (4,443 ) Short-term borrowings (6,735 ) (382 ) (7,117 ) Long-term debt 443 (53 ) 390 Total interest-bearing liabilities (5,386 ) (2,958 ) (8,344 ) Change in net interest income $ 3,309 $ 3,563 $ 6,872 (1) Changes in interest due to both volume and rate have been allocated entirely to rate. 48 Table of Contents Noninterest Income Noninterest income includes, among other things, service charges on deposit accounts, gains and losses on sale or disposition of fixed assets, interchange fees, income from BOLI, and changes in the fair value of equity securities. 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 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. 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 Noninterest expense includes salaries and employee benefits and other costs associated with the conduct of our operations. Our goal is to manage our costs within the framework of our operating strategy of generating consistent, quality earnings. 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. 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. 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 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 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. 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 The primary risks associated with our operations are credit, interest rate and liquidity risk. Changing inflation also presents risk. Credit, inflation and interest rate risk are discussed below, while liquidity risk is discussed in this section under the heading Liquidity and Capital Resources below. 49 Table of Contents Credit Risk and the Allowance for Credit Losses General. The risk of loss should a borrower default on a loan is inherent in any lending activity. Our portfolio and related credit risk are monitored and managed on an ongoing basis by our risk management department, the Board’s loan committee and the full Board. We utilize a ten point risk-rating system, which assigns a risk grade to each borrower based on a number of quantitative and qualitative factors associated with a loan transaction. The risk grade categorizes the loan into one of five risk categories based on information about the ability of borrowers to service the debt. The information includes, among other factors, current financial information about the borrower, historical payment experience, credit documentation, public information and current economic trends. These categories assist management in monitoring our credit quality. The risk categories, which are consistent with the definitions used in guidance promulgated by federal banking regulators, are as follows. • Pass (grades 1-6) – Loans not falling into one of the categories below are considered pass. These loans have high credit characteristics and financial strength. The borrowers at least generate profits and cash flow that are in line with peer and industry standards and have debt service coverage ratios above loan covenants and our policy guidelines. For some of these loans, a guaranty from a financially capable party mitigates characteristics of the borrower that might otherwise result in a lower grade. • Special Mention (grade 7) – Loans classified as special mention possess some credit deficiencies that need to be corrected to avoid a greater risk of default in the future. For example, financial ratios relating to the borrower may have deteriorated. Often, a special mention categorization is temporary while certain factors are analyzed or matters addressed before the loan is re-categorized as either pass or substandard. • Substandard (grade 8) – Loans rated as substandard are inadequately protected by the current net worth and paying capacity of the borrower or the liquidation value of any collateral. If deficiencies are not addressed, it is likely that this category of loan will result in the Bank incurring a loss. Where a borrower has been unable to adjust to industry or general economic conditions, the borrower’s loan is often categorized as substandard. • Doubtful (grade 9) – Doubtful loans are substandard loans with one or more additional negative factors that makes full collection of amounts outstanding, either through repayment or liquidation of collateral, highly questionable and improbable. • Loss (grade 10) – Loans classified as loss have deteriorated to such a point that it is not practicable to defer writing off the loan. For these loans, all efforts to remediate the loan’s negative characteristics have failed and the value of the collateral, if any, has severely deteriorated relative to the amount outstanding. Although some value may be recovered on such a loan, it is not significant in relation to the amount borrowed. 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. Internal loan review is independent of the loan underwriting and approval process. In addition, credit analysts periodically review certain commercial loans to identify negative financial trends related to any one borrower, any related groups of borrowers or an industry. All loans not categorized as pass are put on an internal watch list, with quarterly reports to the Board. In addition, a written status report is maintained by our special assets division for all commercial loans categorized as substandard or worse. We use this information in connection with our collection efforts. If our collection efforts are unsuccessful, collateral securing loans may be repossessed and sold or, for loans secured by real estate, foreclosure proceedings initiated. The collateral is sold at public auction for fair market value (based upon recent appraisals), with fees associated with the foreclosure being deducted from the sales price. The purchase price is applied to the outstanding loan balance. If the loan balance is greater than the sales proceeds, the deficient balance is charged-off. Allowance for Credit Losses . We account for the ACL in accordance with ASC 326, which uses the CECL accounting methodology. 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 $26.5 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 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 nine months ended September 30, 2025 and 2024. Refer to Note 1. Summary of Significant Accounting Policies – Allowance for Credit Losses in our Annual Report for further discussion of our ACL accounting policy. 50 Table of Contents 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). September 30, 2025 December 31, 2024 Allowance for Credit Losses % of Loans in each Category to Total Loans Allowance for Credit Losses % of Loans in each Category to Total Loans Mortgage loans on real estate: Construction and development $ 1,281 6.5 % $ 1,145 7.3 % 1-4 Family 6,238 17.8 5,603 18.7 Multifamily 1,862 6.1 1,185 4.0 Farmland 5 0.2 8 0.3 Commercial real estate 11,626 42.9 11,759 44.4 Commercial and industrial 5,373 26.1 6,933 24.8 Consumer 85 0.4 88 0.5 Total $ 26,470 100 % $ 26,721 100 % 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. September 30, 2025 December 31, 2024 Mortgage loans on real estate: Construction and development 0.06 % 0.05 % 1-4 Family 0.29 0.26 Multifamily 0.09 0.06 Farmland 0.00 0.00 Commercial real estate 0.54 0.55 Commercial and industrial 0.25 0.33 Consumer 0.00 0.01 Total 1.23 % 1.26 % As discussed above, the balance in the ACL is principally influenced by the provision for credit losses on loans and net loan loss experience. Additions to the ACL are charged to the provision for credit losses on loans. Losses are charged to the ACL as incurred and recoveries on losses previously charged to the allowance are credited to the allowance at the time the recovery is collected. The table below reflects the activity in the ACL and key ratios for the periods indicated (dollars in thousands). Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Allowance at beginning of period $ 26,620 $ 28,620 $ 26,721 $ 30,540 Provision for credit losses on loans (1) (86 ) (906 ) (3,609 ) (2,615 ) Net (charge-offs) recoveries (64 ) 389 3,358 178 Allowance at end of period $ 26,470 $ 28,103 $ 26,470 $ 28,103 Total loans - period end 2,150,523 2,155,846 2,150,523 2,155,846 Nonaccrual loans - period end 7,680 4,120 7,680 4,120 Key ratios: Allowance for credit losses to total loans - period end 1.23 % 1.30 % 1.23 % 1.30 % Allowance for credit losses to nonaccrual loans - period end 344.7 % 682.0 % 344.7 % 682.0 % Nonaccrual loans to total loans - period end 0.36 % 0.19 % 0.36 % 0.19 % (1) 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. 51 Table of Contents 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 September 30, 2025 2024 Net Recoveries (Charge-offs) Average Balance Ratio of Net Charge-offs (Recoveries) to Average Loans Net Recoveries (Charge-offs) Average Balance Ratio of Net Charge-offs (Recoveries) to Average Loans Mortgage loans on real estate: Construction and development $ 1 $ 135,451 (0.00 )% $ 421 $ 167,061 (0.25 )% 1-4 Family (48 ) 384,837 0.01 (35 ) 410,374 0.01 Multifamily — 127,712 — — 93,404 — Farmland — 4,048 — — 7,386 — Commercial real estate — 931,864 — — 960,567 — Commercial and industrial 4 547,228 (0.00 ) 21 509,478 (0.00 ) Consumer (21 ) 10,140 0.21 (18 ) 11,142 0.16 Total $ (64 ) $ 2,141,280 0.00 % $ 389 $ 2,159,412 (0.02 )% Nine months ended September 30, 2025 2024 Net Recoveries (Charge-offs) Average Balance Ratio of Net Charge-offs (Recoveries) to Average Loans Net Recoveries (Charge-offs) Average Balance Ratio of Net Charge-offs (Recoveries) to Average Loans Mortgage loans on real estate: Construction and development $ 2 $ 138,405 (0.00 )% $ 290 $ 173,967 (0.17 )% 1-4 Family 17 390,129 (0.00 ) (133 ) 411,112 0.03 Multifamily — 108,273 — — 100,814 — Farmland 1 5,719 (0.02 ) 36 7,625 (0.47 ) Commercial real estate 3,322 939,017 (0.35 ) — 954,006 — Commercial and industrial 71 526,592 (0.01 ) 44 515,574 (0.01 ) Consumer (55 ) 10,133 0.54 (59 ) 11,404 0.52 Total $ 3,358 $ 2,118,268 (0.16 )% $ 178 $ 2,174,502 (0.01 )% Charge-offs reflect the realization of losses in the portfolio that were recognized previously through the provision for credit losses on loans. Net charge-offs include recoveries of amounts previously charged off. 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. This ACL may prove to be inadequate due to many factors including higher inflation and interest rates than anticipated, higher unemployment than anticipated, other unanticipated adverse changes in the economy, unanticipated effects of the current geopolitical and domestic political conflicts, a public health crisis, or discrete events adversely affecting specific customers or industries. We are monitoring changes and potential changes to U.S. tariff and trade policies that could have an adverse impact on inflation and economic growth, at least in the near term, and which make forecasting difficult. These factors could cause deterioration in credit quality that could lead us to increase our ACL in future periods. Our results of operations and financial condition could be materially adversely affected to the extent that the ACL is insufficient to cover such changes or events. Nonperforming Asse ts . No nperforming assets consist of nonperforming loans and other real estate owned. Nonperforming loans are those on which the accrual of interest has stopped or loans which are contractually 90 days past due on which interest continues to accrue. Loans are ordinarily placed on nonaccrual when a loan is specifically determined to be impaired or when principal and interest is delinquent for 90 days or more. Additionally, management may elect to continue the accrual when the estimated net available value of collateral is sufficient to cover the principal balance and accrued interest. It is our policy to discontinue the accrual of interest income on any loan for which we have reasonable doubt as to the payment of interest or principal. 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 $7.7 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. Occasionally, we modify loans to borrowers in financial distress by providing certain concessions, such as principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension, excluding covenant waivers and modification of contingent acceleration clauses, or a combination of such concessions. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL . 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 nine months ended September 30, 2025 and 2024 , we did not provide any modifications under these circumstances to borrowers experiencing financial difficulty. 52 Table of Contents Other Real Estate Owned. Other real estate owned consists of properties acquired through foreclosure or acceptance of a deed in lieu of foreclosure and real property no longer used in the Bank’s business operations. Real estate acquired through foreclosure is initially recorded at fair value at the time of foreclosure, less estimated selling cost, and any related write-down is charged to the ACL. 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 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). September 30, 2025 December 31, 2024 1-4 Family $ 1,995 $ 1,684 Commercial real estate 2,638 3,358 Commercial and industrial — 176 Total other real estate owned $ 4,633 $ 5,218 Changes in our other real estate owned are summarized in the table below for the periods indicated (dollars in thousands). Nine months ended September 30, 2025 2024 Balance, beginning of period $ 5,218 $ 4,438 Additions 1,687 1,810 Sales of other real estate owned (1,838 ) (1,276 ) Write-downs (434 ) (233 ) Balance, end of period $ 4,633 $ 4,739 Impact of Inflation . Inflation reached a near 40-year high in late 2021 primarily due to effects of the COVID-19 pandemic, and continued rising through June 2022. After June 2022, the rate of inflation generally declined; however, it has remained higher than the Federal Reserve’s target inflation rate of two percent. 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 September 30, 2025 . When the rate of inflation accelerates, there is an erosion of consumer and customer purchasing power. Accordingly, if the rate of inflation accelerates in the future, this could impact our business by reducing our tolerance for extending credit, and our customer’s desire to obtain credit, or causing us to incur additional provisions for credit losses resulting from a possible increased default rate. Inflation and related higher rates have led and may continue to lead to lower loan re-financings. Inflation has also increased and may continue to increase the costs of goods and services we purchase, including the costs of salaries and benefits . We are monitoring changes and potential changes to U.S. tariff and trade policies that could have an adverse impact on inflation and economic growth, at least in the near term, and which make forecasting difficult . 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%. 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. remains uncertain. A decrease in the general level of interest rates may lead to, among other things, prepayments on our loan and mortgage-backed securities portfolios as borrowers refinance their loans at lower rates, lower rates on new loans, lower rates on existing variable rate loans and lower yields on investment securities, which may be offset by lower costs of interest-bearing liabilities. If interest-earning assets mature or reprice more quickly, or to a greater degree than interest-bearing liabilities, falling interest rates could reduce net interest income. Significant fluctuations in interest rates makes our business and balance sheet more challenging to manage. For additional information, see Interest Rate Risk below, and Item 1A. “Risk Factors – Risks Related to our Business – Changes in interest rates could have an adverse effect on our profitability” and – “Inflation and rising prices may continue to adversely affect our results of operations and financial condition” in our Annual Report. 53 Table of Contents Interest Rate Risk Market risk is the risk of loss from adverse changes in market prices and rates. Since the majority of our assets and liabilities are monetary in nature, our market risk arises primarily from interest rate risk inherent in our lending and deposit activities. A sudden and substantial change in interest rates may adversely impact our earnings and profitability because the interest rates borne by assets and liabilities do not change at the same speed, to the same extent, or on the same basis. Accordingly, our ability to proactively structure the volume and mix of our assets and liabilities to address anticipated changes in interest rates, as well as to react quickly to such fluctuations, can significantly impact our financial results. To that end, management actively monitors and manages our interest rate risk exposure. The ALCO has been authorized by the Board to implement our asset/liability management policy, which establishes guidelines with respect to our exposure to interest rate fluctuations, liquidity, loan limits as a percentage of funding sources, exposure to correspondent banks and brokers and reliance on non-core deposits. The goal of the policy is to enable us to maximize our interest income and maintain our net interest margin without exposing the Bank to excessive interest rate risk, credit risk and liquidity risk. Within that framework, the ALCO monitors our interest rate sensitivity and makes decisions relating to our asset/liability composition. Net interest income simulation is the Bank’s primary tool for benchmarking near term earnings exposure. Given the ALCO’s objective to understand the potential risk and volatility embedded within the current mix of assets and liabilities, standard rate scenario simulations assume total assets remain static (i.e. no growth). The Bank may also use a standard gap report in its interest rate risk management process. The primary use for the gap report is to provide supporting detailed information to the ALCO’s discussion. The Bank has particular concerns with the utility of the gap report as a risk management tool because of difficulties in relating gap directly to changes in net interest income. Hence, the income simulation is the key indicator for earnings-at-risk since it expressly measures what the gap report attempts to estimate. Short term interest rate risk management tactics are decided by the ALCO where risk exposures exist out into the one to two-year horizon. Tactics are formulated and presented to the ALCO for discussion, modification, and/or approval. Such tactics may include asset and liability acquisitions of appropriate maturities in the cash market, loan and deposit product/pricing strategy modification, and derivatives hedging activities to the extent such activity is authorized by the Board. Since the impact of rate changes due to mismatched balance sheet positions in the short-term can quickly and materially affect the current year’s income statement, they require constant monitoring and management. Within the gap position that management directs, we attempt to structure our assets and liabilities to minimize the risk of either a rising or falling interest rate environment. We manage our gap position for time horizons of one month, two months, three months, four to six months, seven to twelve months, 13-24 months, 25-36 months, 37-60 months and more than 60 months. 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 September 30, 2025 , the Bank was within the policy guidelines for asset/liability management. 54 Table of Contents The table below de picts the estimated impact on net interest income of immediate changes in interest rates at the specified levels. As of September 30, 2025 Changes in Interest Rates (in basis points) Estimated Increase/Decrease in Net Interest Income (1) +300 (3.1)% +200 (2.2)% +100 (0.8)% -100 1.2% -200 2.3% -300 3.4% (1) The percentage change in this column represents the projected net interest income for 12 months on a flat balance sheet in a stable interest rate environment versus the projected net interest income in the various rate scenarios. The computation of the prospective effects of hypothetical interest rate changes requires numerous assumptions regarding characteristics of new business and the behavior of existing positions. These business assumptions are based upon our experience, business plans and published industry experience. Key assumptions include asset prepayment speeds, competitive factors, the relative price sensitivity of certain assets and liabilities, and the expected life of non-maturity deposits. However, there are a number of factors that influence the effect of interest rate fluctuations on us which are difficult to measure and predict. For example, a rapid drop in interest rates might cause our loans to repay at a more rapid pace and certain mortgage-related investments to prepay more quickly than projected. This could mitigate some of the benefits of falling rates as are expected when we are in a negatively-gapped position. Conversely, a rapid rise in rates could give us an opportunity to increase our margins and stifle the rate of repayment on our mortgage-related loans which would increase our returns; however, we may need to increase the rates we offer to maintain or increase deposits, which would adversely impact our margins. As a result, because these assumptions are inherently uncertain, actual results will differ from simulated results. Liquidity and Capital Resources Liquidity. Liquidity is a measure of the ability to fund loan commitments and meet deposit maturities and withdrawals in a timely and cost-effective way. Cash flow requirements can be met by generating net income, attracting new deposits, converting assets to cash or borrowing funds. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit outflows, loan prepayments, loan sales and borrowings are greatly influenced by general interest rates, economic conditions and the competitive environment in which we operate. To minimize funding risks, we closely monitor our liquidity position through periodic reviews of maturity profiles, yield and rate behaviors, and loan and deposit forecasts. Excess short-term liquidity is usually invested in overnight federal funds sold. Our core deposits, which are deposits excluding time deposits greater than $250,000 and deposits of municipalities and other political entities, are our most stable source of liquidity to meet our cash flow needs due to the nature of the long-term relationships generally established with our customers. 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 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 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 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 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 $15.1 milli on of repurchase agreements outstanding at September 30, 2025 and $8.4 million at December 31, 2024 . 55 Table of Contents We maintain unsecured lines of credit with First National Bankers Bank and The Independent Bankers Bank totaling $60.0 million. These lines of credit are federal funds lines of credit and are used for overnight borrowing only. The lines of credit mature at various times within the next year. 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. Item 7. “MD&A – Discussion and Analysis of Financial Condition – Borrowings” and Note 10 to the financial statements included in such report. Our liquidity strategy is focused on using the least costly funds available to us in the context of our balance sheet composition and interest rate risk position. Accordingly, we target growth of noninterest-bearing deposits. 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 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. W e utilize brokered time deposits to secure fixed cost funding and reduce short-term borrowings. We utilize brokered demand deposits when pricing is more favorable than other short-term borrowings. 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 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 . 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 nine months ended September 30, 2025 and 2024 . Percentage of Total Average Deposits and Borrowed Funds Percentage of Total Average Deposits and Borrowed Funds Cost of Funds Cost of Funds Three months ended September 30, Nine months ended September 30, Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 2025 2024 2025 2024 Noninterest-bearing demand deposits 18 % 17 % 18 % 17 % — % — % — % — % Interest-bearing demand deposits 34 27 32 27 2.28 2.02 2.22 1.93 Brokered demand deposits — — — — 4.59 — 4.47 — Savings accounts 6 5 6 5 1.11 1.14 1.07 1.07 Brokered time deposits 10 10 10 10 4.66 5.20 4.75 5.21 Time deposits 28 30 29 29 3.77 4.53 3.85 4.48 Short-term borrowings 1 8 2 9 2.93 4.59 3.27 4.65 Long-term borrowed funds 3 3 3 3 4.66 4.79 4.71 4.79 Total deposits and borrowed funds 100 % 100 % 100 % 100 % 2.55 % 2.99 % 2.59 % 2.96 % Capital Resources . Our primary sources of capital include retained earnings, capital obtained through acquisitions, and proceeds from the sale of our capital stock and subordinated debt. We may issue additional capital stock and debt securities from time to time to fund acquisitions and support our organic growth. As noted elsewhere in this report, on July 1, 2025 we completed a private placement of Series A Preferred Stock. We intend 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. The Series A Preferred Stock is intended to qualify as additional Tier 1 capital. 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. 56 Table of Contents We are subject to various regulatory capital requirements administered by the Federal Reserve and the OCC which specify capital tiers, including the following classifications for the Bank under the OCC’s prompt corrective action regulations. Capital Tiers (1) Tier 1 Leverage Ratio Common Equity Tier 1 Capital Ratio Tier 1 Capital Ratio Total Capital Ratio Ratio of Tangible to Total Assets Well capitalized 5% or above 6.5% or above 8% or above 10% or above Adequately capitalized 4% or above 4.5% or above 6% or above 8% or above Undercapitalized Less than 4% Less than 4.5% Less than 6% Less than 8% Significantly undercapitalized Less than 3% Less than 3% Less than 4% Less than 6% Critically undercapitalized 2% or less (1) In order to be well capitalized or adequately capitalized, a bank must satisfy each of the required ratios in the table. In order to be undercapitalized or significantly undercapitalized, a bank would need to fall below just one of the relevant ratio thresholds in the table. In order to be well capitalized, the Bank cannot be subject to any written agreement or order requiring it to maintain a specific level of capital for any capital measure. 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 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. The following table presents the actual capital amounts and regulatory capital ratios for the Company and the Bank as of the dates presented (dollars in thousands). Actual Minimum Capital Requirement for Bank to be Well Capitalized Under Prompt Corrective Action Rules Amount Ratio Amount Ratio September 30, 2025 Investar Holding Corporation: Tier 1 leverage capital $ 301,562 10.70 % $ — — % Common equity tier 1 capital 261,709 11.12 — — Tier 1 capital 301,562 12.82 — — Total capital 344,715 14.65 — — Investar Bank: Tier 1 leverage capital 306,183 10.88 140,720 5.00 Common equity tier 1 capital 306,183 13.05 152,544 6.50 Tier 1 capital 306,183 13.05 187,747 8.00 Total capital 332,608 14.17 234,684 10.00 December 31, 2024 Investar Holding Corporation: Tier 1 leverage capital $ 258,178 9.27 % $ — — % Common equity tier 1 capital 248,678 10.84 — — Tier 1 capital 258,178 11.25 — — Total capital 301,259 13.13 — — Investar Bank: Tier 1 leverage capital 269,733 9.70 139,092 5.00 Common equity tier 1 capital 269,733 11.77 148,925 6.50 Tier 1 capital 269,733 11.77 183,293 8.00 Total capital 296,117 12.92 229,116 10.00 Off-Balance Sheet Transactions and Lease Obligations Swap Contracts. The Bank historically has entered into interest rate swap contracts, some of which are forward starting, to manage exposure against the variability in the expected future cash flows (future interest payments) attributable to changes in the one-month SOFR associated with the forecasted issuances of one-month fixed rate debt arising from a rollover strategy. 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 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. Derivative Financial Instruments. 57 Table of Contents The Company also enters into interest rate swap contracts that allow commercial loan customers to effectively convert a variable-rate commercial loan agreement to a fixed-rate commercial loan agreement. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to an interest rate swap agreement, which serves to effectively swap the customer’s variable-rate loan into a fixed-rate loan. The Company then enters into a corresponding swap agreement with a third party in order to economically hedge its exposure through the customer agreement. The interest rate swaps with both the customers and third parties are not designated as hedges under ASC 815 , and are marked to market through earnings. As the interest rate swaps are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by ASC 820 . The Company did not recognize any gains or losses in other income resulting from fair value adjustments during the three and nine months ended September 30, 2025 and 2024 . At September 30, 2025 and 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. At September 30, 2025 and December 31, 2024 , the fair value of the swap contracts consisted of gross assets of $12.2 million and $17.2 million, respectively, and gross liabilities of $12.2 million and $17.2 million, respectively, record ed in “Other assets” and “Accrued taxes and other liabilities,” respectively, in the accompanying consolidated balance sheets. Unfunded Commitments . The Bank enters into loan commitments and standby letters of credit in the normal course of its business. Loan commitments are made to meet the financing needs of our customers, while standby letters of credit commit the Bank to make payments on behalf of customers when certain specified future events occur. The credit risks associated with loan commitments and standby letters of credit are essentially the same as those involved in making loans to our customers. Accordingly, our normal credit policies apply to these arrangements. Collateral (e.g., securities, receivables, inventory, equipment, etc.) is obtained based on management’s credit assessment of the customer. 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 $0.3 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. Substantially all of our standby letters of credit expire within one year. Our unfunded loan commitments and standby letters of credit outstanding are summarized below as of the dates indicated (dollars in thousands): September 30, 2025 December 31, 2024 Loan commitments $ 428,674 $ 377,301 Standby letters of credit 7,479 7,658 The Company closely monitors the amount of remaining future commitments to borrowers in light of prevailing economic conditions and adjusts these commitments as necessary. The Company intends to continue this process as new commitments are entered into or existing commitments are renewed. 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. The Company’s primary leasing activities relate to certain real estate leases entered into in support of the Company’s branch operations. The Company’s branch locations operated under lease agreements have all been designated as operating leases. The Company does not lease equipment under operating leases, nor does it have leases designated as finance leases. 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 $ 457 One to three years 878 Three to five years 606 Over five years 183 Total $ 2,124 58 Table of Contents