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Item 8. Financial Statements and Supplementary Data

2026-03-16 compared with 2025-03-12 · 414 added, 434 removed, 1886 unchanged (31% of the section changed)

Financial Statements and Supplementary Data

Management ’ s Report on Internal Control over Financial Reporting

To the Stockholders and Board of Directors

Investar Holding Corporation

Baton Rouge, Louisiana

Investar Holding Corporation (the “Company”) is responsible for the preparation, integrity and fair presentation of the consolidated financial statements included in this Annual Report on Form 10-K.

The consolidated financial statements and notes included in this Annual Report have been prepared in conformity with accounting principles generally accepted in the United States of America and necessarily include some amounts that are based on management’s best estimates and judgments.

Management of the Company is responsible for establishing and maintaining effective internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

The Company’s internal control over financial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

The system of internal control over financial reporting as it relates to the financial statements is evaluated for effectiveness by management and tested for reliability through a program of internal audits.

Actions are taken to correct potential deficiencies as they are identified.

Any system of internal control, no matter how well designed, has inherent limitations, including the possibility that a control can be circumvented or overridden, and misstatements due to error or fraud may occur and not be detected.

Also, because of changes in conditions, internal control effectiveness may vary over time.

Accordingly, even an effective system of internal control will provide only reasonable assurance with respect to financial statement preparation.

Management, with the participation of the Company’s principal executive officer and principal financial officer, conducted an assessment of the effectiveness of the Company’s system of internal control over financial reporting as of December 31, 2024, based on criteria for effective internal control over financial reporting described in the “Internal Control - Integrated Framework,” (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, management has concluded that, as of December 31, 2024, the Company’s system of internal control over financial reporting is effective and meets the criteria of the “Internal Control – Integrated Framework.”

HORNE LLP, the Company’s independent registered public accounting firm that has audited the Company’s financial statements included in this Annual Report, has issued an attestation report on the Company’s internal control over financial reporting which is included herein.

March 12, 2025

President and Chief Executive Officer

March 12, 2025

Executive Vice President and Chief Financial Officer

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Investar Holding Corporation

Opinion on the Internal Control Over Financial Reporting

We have audited Investar Holding Corporation’s (the “Company”) internal control over financial reporting as of December 31, 2024, based on criteria established in the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (the “PCAOB”), the consolidated financial statements of the Company as of December 31, 2024 and our report dated March 12, 2025 expressed an unqualified opinion.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Report on Management's Assessment of Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ HORNE LLP

Shareholders and Board of Directors

Investar Holding Corporation

Baton Rouge, Louisiana

March 12, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Investar Holding Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Investar Holding Corporation (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes to the consolidated financial statements (collectively, referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (the “PCAOB”), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated March 12, 2025, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Investar Holding Corporation (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of income and comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 , in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 16, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(i) relates to accounts or disclosures that are material to the financial statements and (ii) involved especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Allowance for Credit Losses

Description of the Matter

As described in Notes 1 and 3 to the financial statements, the Company’s allowance for credit losses (“ACL”) is a valuation that reflects the Company’s best estimate of expected credit losses inherent within the Company’s loan portfolio and is maintained at a level believed adequate by management to absorb credit losses inherent in the loan portfolio in accordance with Accounting Standards Codification ASC 326:

Financial Instruments – Credit Losses.

The ACL is measured over the contractual life of loans held for investments and is estimated using relevant available information relating to past events, current conditions and reasonable and supportable forecasts, as well as qualitative adjustments.

The ACL was $26,721,000 at December 31, 2024, which consists of two components:

the loss allocations on pools of loans that share similar risk characteristics and loss allocations on individual loans that do not share similar risk characteristics with other loans.

The Company’s measurement of expected credit losses of loans on a pool basis when the loans share similar risk characteristics is based off historical data that is adjusted, as necessary, for qualitative factors where there are differences in the historical loss data of the Company and current or projected future conditions.

Consideration of the relevant qualitative factors are used to bring the ACL to the level management believes is appropriate based on factors that are otherwise unaccounted for in the quantitative process.

The ACL also includes reserves for loans evaluated on an individual basis, such as certain loans on nonaccrual.

Management applies judgment in the determination of the qualitative factors and reserves assigned on an individual basis to estimate the ACL.

The ACL was identified by us as a critical audit matter because of the extent of auditor judgment applied and significant audit effort to evaluate the significant subjective and complex judgments made by management including the judgment required in evaluating management's determination of the qualitative factors and the reserve assumptions for loans evaluated on an individual basis.

How we Addressed the Matter in Our Audit

The primary audit procedures we performed in responses to this critical audit matter included:

• Obtained an understanding of the Company's process for establishing the ACL, including determination of the qualitative factors and reserve assumptions for loans evaluated on an individual basis, and evaluated the process utilized by management to challenge the model results and determine the best estimate of the ACL as of the balance sheet date.

• Evaluated the design and tested the operating effectiveness of the controls associated with the ACL process, including controls around the reliability and accuracy of data used in the model, management's review and approval of the selected qualitative factors, the reserve assumptions for loans evaluated on an individual basis, the governance of the credit loss methodology, and management's review and approval of the ACL.

• Assessed reasonableness of model methodology and key modeling assumptions, as well as the appropriateness of management’s qualitative framework, and reserve assumptions for loans evaluated on an individual basis.

• Performed specific substantive tests of the model utilized, qualitative factors and the reserve assumptions for loans evaluated on an individual basis.

We evaluated if qualitative factors were applied based on a comprehensive framework and compared the adjustments utilized by management to both internal portfolio metrics and external macroeconomic data (as applicable) to support adjustments and evaluate trends in such adjustments.

Within our reserve testing for loans evaluated on an individual basis, we evaluated management’s assumptions, including collateral valuations.

In addition, we evaluated the Company’s estimate of the overall ACL giving consideration to the Company’s borrowers, loan portfolio, and macroeconomic trends, independently obtained and compared such information to comparable financial institutions and considered whether new or contrary information existed.

As described in Note 3 to the consolidated financial statements, the allowance for credit losses (“ACL”) was $26.3 million at December 31, 2025.

As described in Note 1 to the consolidated financial statements, the Company developed a CECL 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 Company’s CECL calculation estimates loan losses using a combination of discounted cash flow and remaining life analyses.

The ACL is measured on a pool basis 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 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, changes in the competitive and regulatory environment of the banking industry and changes in other external factors.

We identified the evaluation of the qualitative adjustment related to changes in other external factors in connection with the measurement of the allowance for credit losses as a critical audit matter.

The Company’s evaluation and application of qualitive adjustments related to changes in other external factors to the calculated ACL for each pool of loans required significant judgment due to the complexity and subjectivity in determining these factors.

Auditing these factors involved especially subjective and complex judgment due to the nature and extent of effort required.

The primary procedures we performed to address this critical audit matter included:

• Testing the design and operating effectiveness of certain controls associated with the review and approval of the selected qualitative factors.

• Assessing the consistency of management’s application of its underlying framework for determining the qualitative adjustment.

• Assessing the reasonableness of management’s adjustments for changes in other external factors by comparing to data from external sources.

Classification of Series A Preferred Stock

As described in Note 13 to the consolidated financial statements, in July 2025, the Company completed a private placement of newly designated Series A Preferred Stock for proceeds of $32.5 million.

Subject to certain conditions, the Company may redeem shares of Series A Preferred Stock after a specific date.

Upon the occurrence of specified “Reorganization Events”, each share of Series A Preferred Stock outstanding immediately prior to such Reorganization Event will be entitled to receive distributions.

The Series A Preferred Stock was recorded in permanent equity within the consolidated balance sheet as of December 31, 2025.

We identified the classification the Series A Preferred Stock issued in July 2025 as a critical audit matter.

Significant judgment was involved in determining whether the Series A Preferred Stock should be recorded in permanent equity based on consideration of the terms of the preferred stock regarding redemption at the option of the Company and distributions upon Reorganization Events.

Auditing these elements involved especially challenging and complex auditor judgment due to the nature and extent of audit effort required to address these matters.

The primary procedures we performed to address this critical audit matter included:

• Reading and analyzing the relevant agreements to identify relevant terms and conditions that affect the classification of the Series A Preferred Stock.

• With the assistance of professionals in our firm having expertise in the relevant technical accounting, we evaluated the Company’s conclusions that the Series A Preferred Stock should be recorded in permanent equity under accounting principles generally accepted in the United State of America.

/s/ BDO USA, P.C.

(formerly HORNE LLP)

We have served as the Company’s auditor since 2020.

/s/ HORNE LLP

Baton Rouge, Louisiana

40 unchanged sentences

116,000 67,215

Borrowings under Bank Term Funding Program

Repurchase agreements

10 unchanged sentences

5,000,000 shares authorized;

none issued or outstanding

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

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

Common stock, $ 1.00 par value per share;

13 unchanged sentences

CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except share data)

(Amounts in thousands, except per share data)

For the years ended December 31,

18 unchanged sentences

80,773 69,753 74,520

Provision for credit losses

Reversal of credit losses

( 3,391 ) ( 3,480 ) ( 2,000 )

Net interest income after provision for credit losses

Net interest income after reversal of credit losses

84,164 73,233 76,520

2 unchanged sentences

3,256 3,241 3,090

(Loss) gain on call or sale of investment securities, net

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

18 ( 753 ) ( 323 )

Gain (loss) on sale or disposition of fixed assets, net

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

( 8 ) 427 ( 1,323 )

1 unchanged sentence

29 683 ( 114 )

Swap termination fee income

Gain on sale of loans

7 unchanged sentences

Income from legal settlement

Income from insurance proceeds

Other operating income

14 unchanged sentences

2,076 1,797 1,933

(Gain) loss on early extinguishment of subordinated debt

( 292 ) — 222

Gain on early extinguishment of subordinated debt

Acquisition expense

Other operating expenses

7 unchanged sentences

22,904 20,252 16,678

EARNINGS PER SHARE

Basic earnings per share

Preferred stock dividends declared

Net income available to common shareholders

$ 21,848 $ 20,252 $ 16,678

Diluted earnings per share

EARNINGS PER COMMON SHARE

Basic earnings per common share

$ 2.22 $ 2.06 $ 1.69

Cash dividends declared per common share

Diluted earnings per common share

2.13 2.04 1.69

1 unchanged sentence

INVESTAR HOLDING CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in thousands)

1 unchanged sentence

$ 22,904 $ 20,252 $ 16,678

Other comprehensive (loss) income:

Other comprehensive income (loss):

Investment securities:

Unrealized (loss) gain, available for sale, net of tax (benefit) expense of ($ 1,026 ), $ 951 , and ($ 12,993 ), respectively

( 3,805 ) 3,510 ( 48,019 )

Reclassification of realized loss (gain), available for sale, net of tax benefit (expense) of $ 158 , $ 67 , and ($ 1 ), respectively

Unrealized gain (loss), available for sale, net of tax expense (benefit) of $ 3,423 , ($ 1,026 ), and $ 951 , respectively

12,650 ( 3,805 ) 3,510

Unrealized loss, transfer from available for sale to held to maturity, net of tax benefit of $ 0 for all respective periods

Derivative financial instruments:

Change in fair value of interest rate swaps designated as cash flow hedges, net of tax expense of $ 0 , $ 0 , and $ 1,151 , respectively

Reclassification of realized gain, interest rate swap termination, net of tax expense of $ 0 , $ 0 , and $ 1,697 , respectively

Reclassification of realized (gain) loss, available for sale, net of tax (expense) benefit of ($ 3 ), $ 158 , and $ 67 , respectively

( 15 ) 595 256

Total other comprehensive (loss) income

Total other comprehensive income (loss)

12,635 ( 3,210 ) 3,766

Total comprehensive income (loss)

Total comprehensive income

$ 35,539 $ 17,042 $ 20,444

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ EQUITY

(Amounts in thousands, except share data)

Comprehensive

Stockholders’

Income (Loss)

(Amounts in thousands, except per share data)

Preferred Stock

Retained Earnings

Accumulated Other Comprehensive (Loss) Income

Total Stockholders’ Equity

Balance, January 1, 2023

$ — $ 9,902 $ 146,587 $ 108,206 $ ( 48,913 ) $ 215,782

Cumulative effect of adoption of ASC 326, net

— — — ( 4,295 ) — ( 4,295 )

Surrendered shares

4 unchanged sentences

— 8 97 — — 105

Dividends declared, $ 0.365 per share

Common stock dividends declared, $ 0.395 per share

— — — ( 3,878 ) — ( 3,878 )

2 unchanged sentences

— — — 16,678 — 16,678

Other comprehensive loss, net

Other comprehensive income, net

— — — — 3,766 3,766

1 unchanged sentence

— 9,748 145,456 116,711 ( 45,147 ) 226,768

Cumulative effect of adoption of ASU 2016-13, net

— — ( 4,295 ) — ( 4,295 )

Surrendered shares

3 unchanged sentences

Options exercised

Dividends declared, $ 0.395 per share

— 96 1,263 — — 1,359

Common stock dividends declared, $ 0.41 per share

— — — ( 4,028 ) — ( 4,028 )

Stock-based compensation

1 unchanged sentence

— — — 20,252 — 20,252

Other comprehensive income, net

Other comprehensive loss, net

— — — — ( 3,210 ) ( 3,210 )

7 unchanged sentences

— 34 501 — — 535

Dividends declared, $ 0.41 per share

Common stock dividends declared, $ 0.435 per share

— — — ( 4,273 ) — ( 4,273 )

Preferred stock dividends declared, $ 32.50 per share

— — — ( 1,056 ) — ( 1,056 )

Preferred stock issuance, net of issuance costs

30,353 — — — — 30,353

Stock-based compensation

1 unchanged sentence

— — — 22,904 — 22,904

Other comprehensive loss, net

Other comprehensive income, net

— — — — 12,635 12,635

11 unchanged sentences

2,792 3,095 3,780

Provision for credit losses

Reversal of credit losses

( 3,391 ) ( 3,480 ) ( 2,000 )

Net accretion of purchase accounting adjustments

Net amortization (accretion) of purchase accounting adjustments

59 ( 32 ) ( 274 )

Provision for other real estate owned

Net (accretion) amortization of securities

Net accretion of securities

( 673 ) ( 62 ) ( 62 )

Loss (gain) on call or sale of investment securities, net

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

( 18 ) 753 323

(Gain) loss on sale or disposition of fixed assets, net

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

8 ( 427 ) 1,323

1 unchanged sentence

( 29 ) ( 683 ) 114

Gain on sale of loans to First Community Bank

(Gain) loss on early extinguishment of subordinated debt

( 292 ) — 222

Gain on sale of loans

Gain on early extinguishment of subordinated debt

FHLB stock dividend

4 unchanged sentences

( 349 ) 659 ( 350 )

Net change in value of bank owned life insurance

Net change in value of BOLI

( 1,985 ) ( 1,771 ) ( 1,417 )

Gain on bank owned life insurance death benefit proceeds

Gain on BOLI death benefit proceeds

— ( 3,115 ) —

2 unchanged sentences

( 261 ) ( 413 ) 65

Loans held for sale:

Proceeds from sales

Gain on sale of loans

Net change in:

21 unchanged sentences

( 2,738 ) ( 4,763 ) ( 4,196 )

Proceeds from redemption or sale of equity securities at fair value

Purchases of equity securities at fair value

( 500 ) ( 1,000 ) —

Net decrease (increase) in loans

Net (increase) decrease in loans

( 49,530 ) 83,283 41,999

2 unchanged sentences

Proceeds from sales of fixed assets

1,341 42 4,692

Purchases of loans

2 unchanged sentences

( 1,383 ) ( 506 ) ( 1,072 )

Purchases of bank owned life insurance

Purchases of BOLI

( 7,500 ) ( 10,000 ) —

Proceeds from surrender of bank owned life insurance

Proceeds from bank owned life insurance death benefits

Proceeds from surrender of BOLI

Proceeds from BOLI death benefits

Purchases of other investments

2 unchanged sentences

Cash paid for branch sale to First Community Bank, net of cash received

Net cash provided by (used in) investing activities

Net cash (used in) provided by investing activities

( 83,906 ) 90,065 ( 73,490 )

4 unchanged sentences

Cash flows from financing activities

Net increase (decrease) in customer deposits

Net increase in customer deposits

4,313 90,291 188,125

Net (decrease) increase in repurchase agreements

Net increase (decrease) in repurchase agreements

2,807 ( 257 ) 8,633

1 unchanged sentence

28,785 7,215 ( 333,500 )

Net (decrease) increase in borrowings under the Bank Term Funding Program

Net (decrease) increase in borrowings under the BTFP

— ( 212,500 ) 212,500

Proceeds from long-term FHLB advances

20,000 60,000 —

Repayment of long-term FHLB advances

5 unchanged sentences

Proceeds from stock options exercised

Proceeds from subordinated debt, net of issuance costs

Proceeds from preferred stock offering, net of issuance costs

Cash dividends paid on preferred stock

Extinguishment of subordinated debt

— ( 27,388 ) —

Net cash (used in) provided by financing activities

Net cash provided by (used in) financing activities

79,273 ( 110,079 ) 38,993

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

13,583 ( 4,087 ) ( 8,250 )

5 unchanged sentences

Cash payments for:

$ 3,101 $ 2,899 $ 8,887

Interest on deposits and borrowings

Income taxes total

5,889 3,101 2,899

5,630 2,990 2,828

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING ACTIVITIES

2 unchanged sentences

Transfer from bank premises and equipment to other real estate owned

424 1,425 525

See accompanying notes to the consolidated financial statements.

3 unchanged sentences

Nature of Operations

Investar Holding Corporation is a financial holding company headquartered in Baton Rouge, Louisiana, that provides, through its wholly-owned subsidiary, Investar Bank, National Association, full banking services, excluding trust services, tailored primarily to meet the needs of individuals, professionals, and small to medium-sized businesses throughout its markets in south Louisiana, southeast Texas and Alabama.

Basis of Presentation

16 unchanged sentences

While management uses available information to recognize credit losses on loans, future additions to the allowance may be necessary based on changes in economic conditions, changes in conditions of borrowers’ industries or changes in the condition of individual borrowers.

The Company adopted ASU 2016 - 13 effective January 1, 2023, which changed how the Company accounts for the ACL.

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 allowance 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 impairments of investment securities, and the fair value of financial instruments and goodwill.

A changing interest rate environment and elevated levels of inflation have made certain estimates more challenging, including those discussed above.

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 investment 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.

INVESTAR HOLDING CORPORATION

3 unchanged sentences

Investment Securities

The Company’s investments in securities are accounted for in accordance with applicable guidance contained in the FASB ASC, which requires the classification of securities into one of the following categories:

The Company classifies and accounts for its investment securities as follows:

HTM Securities:

5 unchanged sentences

Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities.

Realized gains and losses on the sale of debt and equity securities are determined using the specific identification method and average cost method, respectively.

The Company follows FASB guidance related to impairment of AFS securities.

Realized gains and losses on the sale of AFS securities are determined using the specific identification method.

For AFS securities that are in an unrealized loss position at the balance sheet date, the Company first assesses whether or not it intends to sell the security, or more likely than not will be required to sell the security, before recovery of its amortized cost basis.

9 unchanged sentences

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off are stated at the unpaid principal balance outstanding, net of purchase premiums or discounts, deferred income (net of costs), any direct principal charge-offs, and any ACL.

Interest on loans is calculated by using the effective interest rate 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.

Interest on loans is accrued based on the stated rate.

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

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 ordinarily placed on nonaccrual when a loan is specifically determined to be impaired or when principal or interest is delinquent for 90 days or more;

however, management may elect to continue the accrual when the estimated net realizable value of collateral is sufficient to cover the principal balance and the accrued interest.

Any unpaid interest previously accrued on nonaccrual loans is reversed from incom e.

however, management may elect to continue the accrual when a loan is well secured and in the process of collection.

Any unpaid interest previously accrued on nonaccrual loans is reversed from interest incom e.

Interest income on nonaccrual loans is recognized only to the extent that cash payments are received in excess of principal due.

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Notes to Consolidated Financial Statements

The Company follows the FASB accounting guidance on sales of financial assets, which includes participating interests in loans.

For loan participations that are structured in accordance with this guidance, the sold portions are recorded as a reduction of the loan portfolio.

Loan participations that do not meet the criteria are accounted for as secured borrowings.

For loan participations, the participating interests sold are recorded as a reduction of the loan portfolio.

Loan participations that do not meet the definition of a participating interest are accounted for as secured borrowings.

See “Acquisition Accounting” below for accounting treatment of loans acquired through business acquisitions.

Employee Retention Credit

The CARES Act provided for an ERC, which was a broad based refundable payroll tax credit that incentivized businesses to retain employees on the payroll during the COVID- 19 pandemic.

The ERC is a credit against certain employment taxes of up to $ 5,000 per employee for eligible employers based on certain wages paid after March 12, 2020 through December 31, 2020.

In 2021, the tax credit increased to up to $ 7,000 for each quarter, equal to 70 % of qualified wages paid to employees during a quarter, capped at $ 10,000 of qualified wages per employee per quarter.

The ERC terminated effective September 30, 2021.

The Company qualified for the ERC based on the significant adverse financial impacts of the COVID- 19 pandemic.

In the fourth quarter of 2022, Company recorded a $ 2.3 million reduction to payroll taxes related to the second quarter of 2021, which is included as part of “Salaries and employee benefits” in noninter est expense on the accompanying consolidated statement of income for the year ended December 31, 2022.

Allowance for Credit Losses

For reporting periods beginning on and after January 1, 2023, reflecting the adoption of ASU 2016 - 13:

The Company’s ACL is determined using a CECL model.

The ACL represents the measurement of all expected credit losses for financial assets accounted for on an amortized cost basis.

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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 and securities portfolios, as well as prevailing economic conditions and forecasts.

The Company’s CECL calculation estimates loan losses using a combination of discounted cash flow and remaining life analyses.

The Company’s CECL calculation estimates loan losses using a combination of discounted cash flow and remaining life analyses, which is a type of loss rate methodology that uses an average loss rate and applies it to future expected outstanding balances of the pool.

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 ACL is measured on a pool basis when similar risk characteristics exist and is maintained at an amount which management believes is a current estimate of the expected credit losses for the full life of the relevant pool of loans and related unfunded lending commitments.

For modeling purposes, loan pools include:

agriculture and farmland, automotive, commercial and industrial, construction and development, commercial real estate - nonowner-occupied and multifamily, commercial real estate - owner-occupied, credit cards, home equity lines of credit and junior liens, consumer, residential senior liens, and other loans, which primarily consist of public finance.

For discounted cash flow modeling purposes, loan pools include:

commercial and industrial, construction and development, commercial real estate (nonowner-occupied and multifamily), commercial real estate (owner-occupied), home equity lines of credit and junior liens, consumer and residential senior liens.

For remaining life modeling purposes, loan pools include:

agriculture and farmland, automotive, credit cards and other loans, which primarily consist of public finance.

Management periodically reassesses each pool to confirm that the loans within the pool continue to share similar characteristics and risk profiles and to determine whether further segmentation is necessary.

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.

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, changes in the competitive and regulatory environment of the banking industry and changes in other external factors.

The loss rates computed for each pool and expected pool-level funding rates are applied to the related unfunded lending commitments to calculate an ACL.

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In evaluating HTM securities in an unrealized loss position for credit losses, the Company considers the nature of the investments, the current market price, and the current interest rate environment, among other factors.

For reporting periods prior to January 1, 2023, prior to the adoption of ASU 2016 - 13:

Prior to the adoption of CECL, the Company established an allowance for loan losses in an amount that management believed would be adequate to absorb probable losses inherent in the loan portfolio as of the balance sheet date based on evaluations of the collectability of loans and prior loan loss experience.

The evaluations took into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans, and current economic conditions that may affect the borrower’s ability to pay.

This evaluation was inherently subjective as it required estimates that were susceptible to significant revision as more information became available.

Allowances for impaired loans were generally determined based on collateral values or the present value of estimated cash flows.

Credits deemed uncollectible were charged to the allowance.

Provisions for loan losses and recoveries on loans previously charged off were adjusted to the allowance.

Past due status was determined based on contractual terms.

The allowance consisted of allocated and general components.

The allocated component related to loans that were classified as impaired.

For loans that were classified as impaired, an allowance was established when the discounted cash flows (or collateral value or observable market price) of the impaired loan was lower than the carrying value of that loan.

The general component covered non-classified loans and was based on historical loss experience adjusted for qualitative factors.

Based on management’s review and observations made through qualitative review, management may apply qualitative adjustments to determine loss estimates at a group and/or portfolio segment level as deemed appropriate.

Management had an established methodology to determine the adequacy of the allowance for loan losses that assessed the risks and losses inherent in the portfolio and portfolio segments.

The Company utilized an internally developed model that required judgment to determine the estimation method that fit the credit risk characteristics of the loans in its portfolio and portfolio segments.

Qualitative and environmental factors that may not be directly reflected in quantitative estimates include:

asset quality trends, changes in loan concentrations, new products and process changes, changes and pressures from competition, changes in lending policies and underwriting practices, trends in the nature and volume of the loan portfolio, changes in experience and depth of lending staff and management and national and regional economic trends.

The Company also considered third party or comparable company loss data.

Changes in these factors were considered in determining changes in the allowance for loan losses.

The impact of these factors on the Company’s qualitative assessment of the allowance for loan losses could change from period to period based on management’s assessment of the extent to which these factors were already reflected in historic loss rates.

The uncertainty inherent in the estimation process was also considered in evaluating the allowance for loan losses.

Equity Securities

Equity securities at fair value include marketable securities in corporate stocks and mutual funds which totaled $ 3.4 million and $ 2.6 million at December 31, 2025 and December 31, 2024 , respectively.

Realized gains and losses on the sale of equity securities are determined using the average cost method.

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

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Notes to Consolidated Financial Statements

Bank Premises and Equipment

Bank Premises and Equipment and Leases

Bank premises and equipment are stated at cost, less accumulated depreciation, with the exception of land, which is stated at cost.

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Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination.

Goodwill and other intangible assets deemed to have an indefinite useful life are not amortized but instead are subject to review for impairment annually, or more frequently if deemed necessary, in accordance with the provisions of FASB ASC Topic 350, “ Intangibles – Goodwill and Other.

Intangible assets with estimable useful lives are amortized over their respective estimated useful lives and reviewed for impairment in accordance with FASB ASC Topic 360, “ Property, Plant, and Equipment.

Goodwill and other intangible assets deemed to have an indefinite useful life are not amortized but instead are subject to review for impairment annually, or more frequently if deemed necessary.

Intangible assets with estimable useful lives are amortized over their respective estimated useful lives and reviewed for impairment.

If impaired, the asset is written down to its estimated fair value.

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Repurchase Agreements

Securities sold under agreements to repurchase are secured borrowings treated as financing activities and are carried at the amounts at which the securities will be subsequently reacquired as specified in the respective agreements.

Repurchase agreements are secured borrowings treated as financing activities and are carried at the amounts at which the securities were sold plus accrued interest.

Repurchase agreements are subject to underlying agreements with master netting or similar arrangements, which provide for the right of setoff in the event of default or in the event of bankruptcy of either party to the transactions.

Repurchase agreements are reported to these arrangements on a gross basis.

Stock-Based Compensation

The Company accounts for stock-based compensation under the provisions of ASC Topic 718, “ Compensation - Stock Compensation .” Under this accounting guidance, share-based payment awards are measured based on the fair value of the award on the grant date and recognized as an expense on a straight-line basis over the requisite service period, which is the vesting period.

Share-based payment awards are measured based on the fair value of the award on the grant date and recognized as an expense on a straight-line basis over the requisite service period, which is the vesting period.

The impact of forfeitures of share-based payment awards on compensation expense is recognized as forfeitures occur.

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Off-Balance Sheet Credit-Related Financial Instruments

The Company accounts for its guarantees in accordance with the provisions of ASC Topic 460, “ Guarantees .” In the ordinary course of business, the Company has entered into commitments to extend credit, including commitments under credit card agreements, commercial letters of credit and standby letters of credit.

In the ordinary course of business, the Company has entered into commitments to extend credit, including commitments under credit card agreements, commercial letters of credit and standby letters of credit.

Such financial instruments are recorded when they are funded.

Derivative Financial Instruments

ASC Topic 815, “ Derivatives and Hedging ,” requires that all derivatives be recognized as assets or liabilities in the balance sheet at fair value.

Derivatives executed with the same counterparty are generally subject to master netting arrangements, however, fair value amounts recognized for derivative financial instruments and fair value amounts recognized for the right or obligation to reclaim or return cash collateral are not offset for financial reporting purposes.

Derivatives are recognized as assets or liabilities in the balance sheet at fair value.

Derivatives executed with the same counterparty are generally subject to master netting arrangements;

however, fair value amounts recognized for derivative financial instruments and fair value amounts recognized for the right or obligation to reclaim or return cash collateral are not offset for financial reporting purposes.

In the course of its business operations, the Company is exposed to certain risks, including interest rate, liquidity and credit risk.

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Derivatives which are designated and qualify as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.

The effective portion of the derivative’s gain or loss is initially reported as a component of other comprehensive income and subsequently reclassified into earnings when the forecasted transaction affects earnings or when the hedge is terminated.

The ineffective portion of the gain or loss is reported in earnings immediately.

In applying hedge accounting for derivatives, the Company establishes a method for assessing the effectiveness of the hedging derivative and a measurement approach for determining the ineffective aspect of the hedge upon the inception of the hedge.

These methods are consistent with the Company’s approach to managing risk.

For hedging relationships that are highly effective, the derivative’s gain or loss is initially reported as a component of other comprehensive income and subsequently reclassified into earnings when the forecasted transaction affects earnings or when the hedge is terminated.

If it is determined that hedge effectiveness has not been or will not continue to be highly effective, then the hedge designation ceases and any gain or loss in AOCI is recognized in earnings immediately.

Refer to Note 12.

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Thus, provisions for deferred taxes are recorded in recognition of such temporary differences.

Deferred taxes are determined utilizing a liability method whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the reported amounts of existing assets and liabilities and their respective tax basis.

Deferred taxes are determined utilizing the asset and liability method whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the reported amounts of existing assets and liabilities and their respective tax basis.

Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

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The Company has adopted accounting guidance related to accounting for uncertainty in income taxes, which sets out a consistent framework to determine the appropriate level of tax reserves to maintain for uncertain tax positions.

An income tax position will be recognized as a benefit only if it is more likely than not that it will be sustained upon examination by the Internal Revenue Service, based upon its technical merits.

Once that status is met, the amount recorded will be the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.

The Company recognizes interest and penalties on income taxes as a component of income tax expense.

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When a transfer is accounted for as a sale, the transferred assets are derecognized from the balance sheet and a gain or loss on sale is recognized in noninterest income in the accompanying consolidated statements of income.

If the sale criteria are not met, the transfer is recorded as a secured borrowing in which the assets remain on the balance sheet and the proceeds from the transaction are recognized as a liability.

Revenue Recognition

The Company recognizes revenue in the consolidated statements of income as it is earned and when collectability is reasonably assured.

The primary source of revenue is interest income from interest-earning assets, which is recognized on the accrual basis of accounting using the effective interest method.

The recognition of revenues from interest-earning assets is based upon formulas from underlying loan agreements, securities contracts, or other similar contracts.

Noninterest income is recognized on the accrual basis of accounting as services are provided or as transactions occur.

Noninterest income includes fees from deposit accounts, merchant services, ATM and debit card fees, servicing fees, interchange fees, and other miscellaneous services and transactions.

Earnings Per Share

The Company’s primary sources of revenue are derived from interest earned on loans, investment securities, and other financial instruments that are not within the scope of FASB ASC Topic 606, “ Revenue from Contracts with Customers ” (“ASC 606” ).

The Company’s services that fall within the scope of ASC 606 are presented within noninterest income and primarily include fees from deposit accounts, merchant services, ATM and debit card fees, servicing fees, interchange fees, and other miscellaneous services and transactions.

Revenue is recognized when transactions occur or as services are performed over primarily monthly or quarterly periods, and payment is typically received in the period the transactions occur.

Fees may be fixed or, where applicable, based on a percentage of transaction size.

Therefore, there is limited judgment involved in applying ASC 606 that significantly affects the determination of the amount and timing of revenue from contracts with customers.

The Company has evaluated the nature of its contracts with customers and determined that further disaggregation of revenue from contracts with customers into more granular categories beyond what is presented in the accompanying consolidated statements of income is not necessary.

Earnings Per Common Share

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

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

Basic earnings per 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 share is calculated in a manner similar to that of basic earnings per share except that the weighted average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if all potentially dilutive common shares (such as those resulting from the exercise of stock options and warrants) were issued during the period, computed using the treasury stock method.

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 22.

Earnings Per Common Share.

Comprehensive Income

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Acquisition Accounting

The Company follows the FASB ASC Topic 805 , “ Business Combinations ” (“ASC 805” ) to determine the appropriate accounting treatment for an acquisition.

ASC 805 prescribes an initial fair value screen to determine if substantially all of the fair value of the assets acquired is concentrated in a single asset or group of similar assets.

If the initial screen test is met, the assets acquired represent an asset acquisition rather than a business combination.

Loans acquired in an asset acquisitions are recorded using the cost accumulation and allocation model whereby the cost of the acquisition is allocated on a relative fair value basis to the assets acquired.

Business combinations are accounted for under the acquisition method of accounting.

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The fair value adjustment for performing acquired loans is accreted over the life of the loan using the effective interest method.

Estimated credit losses are included in the determination of fair value;

therefore, an ACL is not recorded on the acquisition date.

Subsequent to acquisition, acquired performing loans are evaluated using a similar allowance methodology as the legacy portfolio.

An ACL is only recorded to the extent that the required reserves exceed the unaccreted fair value adjustment.

The Company accounts for PCD assets under ASC Topic 326.

The CECL estimate for PCD assets is recognized through the ACL with an offset to the amortized cost basis of the PCD asset at the date of acquisition.

In addition, an initial ACL is estimated and recorded as provision for credit losses on loans at the acquisition date.

Acquired performing loans are evaluated using a similar allowance methodology as the legacy portfolio.

Loans acquired in a business combination that have evidence of more-than-insignificant deterioration in credit quality since origination are considered PCD loans.

At acquisition, the CECL estimate for PCD loans is recognized through the ACL with an offset to the amortized cost basis of the PCD asset to establish the initial amortized cost basis of the PCD loans.

Any difference between the amortized cost basis and the unpaid principal balance of PCD loans is considered to relate to noncredit factors, resulting in a premium or discount that is amortized to interest income over the life of the loan using the effective interest method.

Subsequent changes in the ACL for PCD assets are recognized through a provision for credit losses on loans.

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Accounting Standards Adopted in 2025

FASB ASC Topic 280 “ Segment Reporting:

Improvements to Reportable Segments Disclosures ” Update No.

FASB ASC Topic 740 “ Income Taxes - Improvements to Income Tax Disclosures ” Update No.

2023 - 09 ( “ ASU 2023 - 09” ) .

ASU 2023 - 07 became effective for the Company for the fiscal year ended December 31, 2024 and will be applied in interim periods beginning after December 31, 2024.

ASU 2023 - 07 requires public entities to disclose the title and position of the entity’s CODM and an explanation of how the CODM utilizes the reported measures of profit or loss to assess segment performance and allocate resources, significant segment expenses, an amount and description for other segment items, and, on an interim basis, certain segment related disclosures that previously were required only on an annual basis.

ASU 2023 - 07 also clarifies that entities with a single reportable segment are subject to both new and existing segment reporting requirements and that an entity is permitted to disclose multiple measures of segment profit or loss, provided that certain criteria are met.

On January 1, 2025, the Company adopted ASU 2023 - 09 using the retrospective method, 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.

The adoption of ASU 2023 - 09 did not have a material impact on the Company’s consolidated financial statements.

The Company provided the required disclosures in Note 16.

Income Taxes.

Recent Accounting Pronouncements

This section briefly describes accounting standards that have been issued, but are not yet adopted, that could impact the Company’s financial statements.

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 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 is effective for fiscal years beginning after December 15, 2024 and 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:

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

FASB ASC Topic 326 “Financial Instruments - Credit Losses (Topic 326 ):

Purchased Loans.” Update No.

2025 - 08 ( “ ASU 2025 - 08” ) .

In November 2025, the FASB issued ASU 2025 - 08, which expands the scope of the “gross‑up” method, formerly applicable only to PCD assets, to include acquired non‑PCD loans that meet certain criteria, now referred to as PSLs.

Under this model, an ACL is recognized at acquisition, offsetting the loan’s amortized cost basis, thereby eliminating the day- one provision expense previously required for non‑PCD assets.

PSLs are defined as non‑PCD loans acquired either (i) through a business combination, or (ii) purchased more than 90 days after origination when the acquirer was not involved in origination.

ASU 2025 - 08 is effective for annual reporting periods beginning after December 15, 2026, including interim reporting periods, and must be applied prospectively.

Early adoption is permitted in interim or annual reporting periods in which financial statements have not yet been issued.

An entity that adopts the amendments in an interim reporting period may apply them as of the beginning of that interim reporting period or the beginning of the annual reporting period that includes that interim reporting period.

The Company expects to early adopt ASU 2025 - 08 for the annual reporting period beginning on January 1, 2026.

We are currently unable to reasonably estimate the impact of adopting ASU 2025 - 08 and will apply the guidance to loans purchased on or after January 1, 2026.

FASB ASC Topic 815 “Derivatives and Hedging ( Topic 815 ):

Hedge Accounting Improvements.” Update No.

2025 - 09 ( “ ASU 2025 - 09” ) .

In November 2025, the FASB issued ASU 2025 - 09, which aligns hedge accounting more closely with an entity’s economic risk management practices.

Key amendments include (i) to allow designating a variable price component of a nonfinancial forecasted purchase or sale as the hedged risk, (ii) to allow grouping individual forecasted transactions with similar ( not identical) risk exposures, (iii) a new model for hedging forecasted interest on variable-rate debt, enabling changes in index or tenor without dedesignation, subject to simplifying assumptions, and (iv) additional clarifications related to hedge accounting of nonfinancial components, net written options, and dual-hedge strategies.

ASU 2025 - 09 is effective on a prospective basis for annual reporting periods beginning after December 15, 2026.

Early adoption is permitted.

ASU 2025 - 09 is not expected to have a significant impact on our financial statements.

INVESTAR HOLDING CORPORATION

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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.

The unrealized losses in obligations of state and political subdivisions were caused by interest rate changes.

These securities generally benefit from stable, dedicated revenue sources and a legal framework that prioritizes bondholder payments, which significantly mitigates credit risk.

The unrealized losses in mortgage-backed securities were caused by interest rate changes.

The Company expects to recover the amortized cost basis over the term of the securities.

These securities are either guaranteed by the U.S.

government or by a government sponsored enterprise and are generally considered to be risk-free.

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 December 31, 2025 and 2024 .

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$ 2,175,973 $ 2,125,084

$ 2,125,084 $ 2,210,619

Unamortized premiums and discounts on loans, included in the total loans balances above, were $ 0.1 million and $ 0.2 million at December 31, 2024 and December 31, 2023 , respectively.

Unamortized premiums and discounts on loans, included in the total loans balances above, were $ 0.1 million at December 31, 2025 and December 31, 2024 .

Unearned income, or deferred fees, on loans was $ 1.6 million and $ 1.0 million at December 31, 2025 and December 31, 2024 , respectively, and is also included in the total loans balance in the table above.

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Total Nonaccrual Loans

Interest Income Recognized on Nonaccrual Loans

Construction and development

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$ 5,274 $ 3,985 $ 9,259

$ 6,130 $ 2,694 $ 8,824 $ 154

December 31, 2024

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Total Nonaccrual Loans

Interest Income Recognized on Nonaccrual Loans

Construction and development

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$ 6,130 $ 2,694 $ 8,824

$ 3,863 $ 1,907 $ 5,770 $ 1,506

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.

Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due.

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 are placed on nonaccrual status when (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.

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A loan may be returned to accrual status when all the principal and interest amounts contractually due are brought current and 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.

Interest income recognized on nonaccrual loans shown in the table above for the year ended December 31, 2023 was primarily attributable to the resolution of one oil and gas loan relationship.

No material interest income was recognized in the consolidated statements of income on nonaccrual loans for the years ended December 31, 2025 and 2024 .

Collateral Dependent Loans

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Loan Participations and Sold Loans

Loa n participations and whole loans sold to and serviced for others are not included in the accompanying consolidated balance sheets, the balances of which w ere $ 38.2 million an d $ 25.9 million as of December 31, 2024 and 2023 , respectively.

The unpaid principal balances of these loans were approxim ately $ 175.0 million an d $ 99.8 million at December 31, 2024 and 2023 , respectively.

Loa n participations and whole loans sold to and serviced for oth ers are not included in the accompanying consolidated balance sheets, the balances of which were $ 44.7 million and $ 38.2 million as of December 31, 2025 and 2024 , respectively.

The total unpaid principal balances of loans where participating interests have been sold were approximately $ 239.2 million an d $ 175.0 million at December 31, 2025 and 2024 , respectively.

Loans to Related Parties

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$ 26,721 $ 30,540 $ 24,364

ASU 2016-13 adoption impact (1)

Provision for credit losses on loans (2)

ASC 326 adoption impact (1)

Reversal of credit losses on loans (2)

( 3,774 ) ( 3,191 ) ( 1,964 )

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$ 26,349 $ 26,721 $ 30,540

( 1 ) On January 1, 2023, the Company adopted ASU 2016 - 13, which introduced a new model known as CECL.

Amounts for the years ended December 31, 2024 and December 31, 2023 reflect the impact of adopting the CECL accounting standard and the Company’s transition from a probable incurred loss methodology to the current expected credit loss methodology.

Amounts for the year ended December 31, 2022 represent the allowance for loan losses under the probable incurred loss methodology.

( 2 ) For the year ended December 31, 2024 , the $ 3.5 million negative provision for credit losses on the consolidated statement of income includes a $ 3.2 million negative provision for loan losses and a $ 0.3 million negative provision for unfunded loan commitments.

For the year ended December 31, 2023 , the $ 2.0 million negative provision for credit losses on the consolidated statement of income includes a $ 2.0 million negative provision for loan losses and a $ 36,000 negative provision for unfunded loan commitments.

( 1 ) On January 1, 2023, the Company adopted ASC 326, which introduced a new model known as CECL.

( 2 ) For the year ended December 31, 2025 , the $ 3.4 million reversal of credit losses on the consolidated statement of income includes a $ 3.8 million reversal of loan losses and a $ 0.4 million provision for unfunded loan commitments.

For the year ended December 31, 2024 , the $ 3.5 million reversal of credit losses on the consolidated statement of income includes a $ 3.2 million reversal of loan losses and a $ 0.3 million reversal of credit losses on unfunded loan commitments.

For the year ended December 31, 2023 , the $ 2.0 million reversal of credit losses on the consolidated statement of income includes a $ 2.0 million reversal of loan losses and a $ 36,000 reversal of credit losses on unfunded loan commitments.

The reversal of credit losses on loans for the year ended December 31, 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 reversal of credit losses on loans for the year ended December 31, 2024 was primarily driven by 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.

The reversal of credit losses on loans for the year ended December 31, 2023 was primarily driven by net recoveries of $ 2.3 million in the loan portfolio primarily attributable to recoveries on one loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida.

The following tables outline the activity in the ACL by collateral type for the years ended December 31, 2025, 2024 and 2023 , and show both the allowance and portfolio balances for loans individually and collectively evaluated for impairment as of December 31, 2025, 2024 and 2023 (dollars in thousands).

Amounts for the year ended December 31, 2022 represent the allowance for loan losses under the probable incurred loss methodology.

December 31, 2025

5 unchanged sentences

$ 1,145 $ 5,603 $ 1,185 $ 8 $ 11,759 $ 6,933 $ 88 $ 26,721

Provision for credit losses on loans

Provision for (reversal of) credit losses on loans

176 429 629 ( 3 ) ( 3,692 ) ( 1,381 ) 68 ( 3,774 )

23 unchanged sentences

$ 2,471 $ 9,129 $ 1,124 $ 2 $ 10,691 $ 6,920 $ 203 $ 30,540

ASU 2016-13 adoption impact

( 75 ) 4,712 ( 84 ) ( 99 ) 676 793 ( 58 ) 5,865

Provision for credit losses on loans

Provision for (reversal of) credit losses on loans

( 1,617 ) ( 3,291 ) 61 ( 30 ) 1,068 628 ( 10 ) ( 3,191 )

21 unchanged sentences

$ 2,555 $ 3,917 $ 999 $ 113 $ 10,718 $ 5,743 $ 319 $ 24,364

Provision for credit losses on loans

ASC 326 adoption impact

( 75 ) 4,712 ( 84 ) ( 99 ) 676 793 ( 58 ) 5,865

Provision for (reversal of) credit losses on loans

( 84 ) 524 209 ( 12 ) ( 2,922 ) 213 108 ( 1,964 )

— ( 46 ) — — ( 27 ) ( 421 ) ( 248 ) ( 742 )

75 22 — — 2,246 592 82 3,017

Ending balance

2 unchanged sentences

212 187 — — — 114 25 538

Ending allowance balance for loans acquired with deteriorated credit quality

— — — — — — — —

Ending allowance balance for loans collectively evaluated for impairment

3 unchanged sentences

789 4,178 — — 216 468 119 5,770

Balance of loans acquired with deteriorated credit quality

— 302 — — 609 — 57 968

Balance of loans collectively evaluated for impairment

7 unchanged sentences

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

During the year ended December 31, 2024 the Company did not provide any modifications under these circumstances to borrowers experiencing financial difficulty.

During the years ended December 31, 2025 and 2024 the Company did not provide any modifications under these circumstances to borrowers experiencing financial difficulty.

During the year ended December 31, 2023, the amount of loans that were modified to borrowers experiencing financial difficulty was immaterial.

11 unchanged sentences

( 3,097 ) ( 1,386 )

( 434 ) ( 233 )

Balance, end of period

$ 3,374 $ 5,218

For the year ended December 31, 2025 , additions to other real estate owned were driven by transfers of commercial real estate and 1 - 4 family loans to other real estate owned.

During the year ended December 31, 2025 , the Company recorded $ 0.4 million of write-downs of other real estate owned related 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 year ended December 31, 2024 , additions to other real estate owned were primarily driven by transfers of 1 - 4 family loans to other real estate owned.

1 unchanged sentence

During the year ended December 31, 2024 , the Company 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.

For the year ended December 31, 2023 , additions to other real estate owned of $ 2.7 million were related to transfers of properties related to one loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida, and additions of $ 0.3 million were related to acquired loans.

During the year ended December 31, 2023 , the Company closed one branch and one stand-alone ATM and transferred the associated land and buildings from “B ank premises and equipment, net” to “O ther real estate owned, net” in the accompanying consolidated balance sheets , as the Company did not intend to use the properties for banking operations.

At December 31, 2025 and 2024 , approximately $ 2.0 million and $ 0.1 million, respectively, of loans secured by 1 - 4 family residential property were in the process of foreclosure.

At December 31, 2024 , other real estate owned included $ 1.7 million of foreclosed 1 - 4 family residential properties compared to none at December 31, 2023 .

At December 31, 2025 , other real estate owned included $ 0.7 million of foreclosed 1 - 4 family residential properties compared to $ 1.7 million at December 31, 2024 .

INVESTAR HOLDING CORPORATION

13 unchanged sentences

Depreciation and amortization related to bank premises and equipment charged to noninterest expense was approximately $ 2.3 million, $ 2.5 million and $ 3.0 million for the years ended December 31, 2025, 2024 and 2023 , respectively.

D uring the year ended December 31, 2025 , the Company recognized a loss of $ 8,000 included in “(Loss) gain on sale or disposition of fixed assets, net” in the accompanying consolidated statements of income related to the disposal of two ATMs.

During the year ended December 31, 2024 , the Company closed one branch in the Alabama market.

The Company also transferred one piece of land previously being held for a future branch location, totaling $ 0.4 million, from “B ank premises and equipment, net” to “O ther real estate owned, net” in the accompanying consolidated balance sheets.

D uring the year ended December 31, 2024 , the Company recognized a gain of $ 0.4 million included in “Gain (l oss) on sale or disposition of fixed assets, net” in the accompanying consolidated statements of income.

During the year ended December 31, 2023 , the Company completed the sale of the Alice and Victoria, Texas locations.

The Company also closed one branch and one stand-alone ATM in Louisiana and transferred the associated land and buildings, totaling $ 1.4 million, from “B ank premises and equipment, net” to “O ther real estate owned, net” in the accompanying consolidated balance sheets.

The Company also ceased operation of 13 additional ATM s during the third quarter of 2023.

During the year ended December 31, 2023 , the Company recognized a loss of $ 1.3 million included in “Gain (l oss) on sale or disposition of fixed assets, net” in the accompanying consolidated statements of income.

During the year ended December 31, 2024 , the Company recognized a gain of $ 0.4 million included in “(Loss) gain on sale or disposition of fixed assets, net” in the accompanying consolidated statements of income.

INVESTAR HOLDING CORPORATION

9 unchanged sentences

Weighted average discount rate

( 1 ) Short-term lease cost was immaterial for the periods presented.

At December 31, 2025 and 2024 , the Company’s operating lease ROU assets were $ 1.8 million and $ 2.0 million, respectively, and the Company’s related operating lease liabilities were $ 1.9 million and $ 2.1 million, respectively.

The Company’s operating leases have remaining terms ranging from approximately one to seven 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 December 31, 2024 are presented below (dollars in thousands).

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 obligations due under non-cancelable operating leases at December 31, 2025 are presented below (dollars in thousands).

Total lease payments

imputed interest

Total lease obligations

At December 31, 2025 , the Company had not entered into any material leases that have not yet commenced.

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

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

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

All tenant leases are operating leases.

The Bank, as lessor, recognized lease income of $ 0.4 million, $ 0.4 million and $ 0.3 million in “ Other operating income ” in the accompanying consolidated statements of income for the years ended December 31, 2024, 2023 and 2022 , respectively.

The Bank, as lessor, recognized lease income of $ 0.4 million in “ Other operating income ” in the accompanying consolidated statements of income for each of the years ended December 31, 2025, 2024 and 2023 .

On January 27, 2023, the Bank completed the sale of certain assets, deposits and other liabilities associated with the Alice and Victoria, Texas branch locations to First Community Bank.

7 unchanged sentences

The trademark intangible had a carrying value of $ 0.1 million at December 31, 2025 and 2024 .

In accordance with ASC Topic 350, “ Intangibles – Goodwill and Other , ” the Company reviews the carrying value of indefinite-lived intangible assets at least annually, or more frequently if certain impairment indicators exist.

The Company reviews the carrying value of goodwill and indefinite-lived intangible assets at least annually, or more frequently if certain impairment indicators exist.

The Company performed its annual impairment testing on October 31, 2025 and determined that there was no impairment to its goodwill or trademark intangible asset.

10 unchanged sentences

The weighted average amortization period remaining for core deposit intangibles is 3.8 years.

Total $ 1,508

INVESTAR HOLDING CORPORATION

19 unchanged sentences

Public funds deposits as of December 31, 2025 totaled approximately $ 246.2 million and were secured by investment securities with a carrying value of approximately $ 63.5 million and FHLB letters of credit totaling $ 106.4 million.

Public funds deposits as of December 31, 2023 totaled approximately $ 134.8 million, and were secured by investment securities with a carrying value of approximately $ 110.1 million.

Public funds deposits as of December 31, 2024 totaled approximately $ 194.0 million and were secured by investment securities with a carrying value of approximately $ 19.1 million and FHLB letters of credit totaling $ 126.2 million.

As of December 31, 2025 and 2024 , total deposits outstanding to executive officers, directors and to companies in which they are principal owners amounted to approximately $ 14.7 million and $ 20.3 million, respectively.

7 unchanged sentences

These funds were secured by investment securities with carrying values of approximately $ 12.1 million and $ 49.0 million at December 31, 2025 and December 31, 2024 , respectively.

The weighted average interest rate on repurchase agreements was 0.75 % and 0.13 % at December 31, 2024 and December 31, 2023 , respectively.

The weighted average interest rate on repurchase agreements was 0.75 % at December 31, 2025 and 2024 .

The weighted average rate paid for repurchase agreements during the years ended December 31, 2025, 2024 and 2023 was 0.75 %, 0.65 % and 0.13 %, respectively.

For additional information about the Company’s repurchase agreements, including the gross presentation, the effects of offsetting, and a net presentation, refer to Note 12.

Derivative Financial Instruments.

INVESTAR HOLDING CORPORATION

4 unchanged sentences

The 2032 Notes have a stated maturity date of April 15, 2032 and bear interest at a fixed rate of 5.125 % per year from and including April 6, 2022 to but excluding April 15, 2027 or earlier redemption date.

From April 15, 2027 to but excluding the stated maturity date or earlier redemption date, the 2032 Notes will bear interest a floating rate equal to the then current three -month term SOFR, plus 277 basis points.

From April 15, 2027 to but excluding the stated maturity date or earlier redemption date, the 2032 Notes will bear interest at a floating rate equal to the then current three -month term SOFR, plus 277 basis points.

As provided in the 2032 Notes, the interest rate on the 2032 Notes during the applicable floating rate period may be determined based on a rate other than three -month term SOFR.

4 unchanged sentences

The 2032 Notes are intended to qualify as Tier 2 capital for regulatory purposes.

The Company used the majority of the net proceeds to redeem its 2027 Notes in June 2022 and utilized the remaining proceeds for share repurchases and for general corporate purposes.

During the year ended December 31, 2024, the Company repurchased $ 3.0 million in principal amount of the 2032 Notes.

3 unchanged sentences

During the second quarter of 2024, the Company repurchased $ 5.0 million in principal amount of the 2029 Notes, and on December 30, 2024, the Company redeemed the remaining $ 20.0 million in principal amount in full accordance with their terms at a redemption price equal to 100% of the outstanding principal balance plus accrued and unpaid interest up to but excluding the December 30, 2024 redemption date.

On March 24, 2017, the Company issued and sold $ 18.6 million in aggregate principal amount of its 2027 Notes due March 30, 2027.

Beginning on March 30, 2022, the Company could redeem the 2027 Notes, in whole or in part, at their principal amount plus any accrued and unpaid interest.

The 2027 Notes bore an interest rate of 6.00 % per annum until March 30, 2022, on which date the interest rate would reset quarterly to an annual interest rate equal to the then-current LIBOR plus 394.5 basis points.

In June 2022, the Company redeemed the 2027 Notes in full in accordance with their terms at a redemption price equal to 100% of the outstanding principal balance plus accrued and unpaid interest up to but excluding the June 30, 2022 redemption date.

The aggregate redemption price, excluding accrued interest, totaled $ 18.6 million.

The carrying value of subordinated debt was $ 16.7 million and $ 44.3 million at December 31, 2024 and 2023 , respectively.

The carrying value of subordinated debt includes unamortized issuance costs of $ 0.3 million and $ 0.7 million at December 31, 2024 and 2023 , respectively, which are being amortized using the straight-line method over the lives of the respective securities.

The carrying value of subordinated debt was $ 16.7 million at December 31, 2025 and 2024 .

The carrying value of subordinated debt includes unamortized issuance costs of $ 0.3 million at December 31, 2025 and 2024 , which are being amortized using a method that approximates the effective interest method over the lives of the respective securities.

INVESTAR HOLDING CORPORATION

14 unchanged sentences

As of December 31, 2025 , these advances are collateralized by a blanket pledge of certain loans totaling approximately $ 934.5 million.

The Company also maintains letters of credit from the FHLB to secure certain public funds deposits.

As of December 31, 2025 , the Company had an additional $ 651.5 million in unused borrowing capacity with the FHLB.

2 unchanged sentences

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

At December 31, 2024 , the Company had no outstanding borrowings under the BTFP.

At December 31, 2023 outstanding borrowings under the BTFP were $ 212.5 million, with a weighted average rate of 4.83 %.

At December 31, 2025 and 2024 , the Company had no outstanding borrowings under the BTFP.

During the fourth quarter of 2024, the Company repaid all outstanding borrowings under the BTFP.

9 unchanged sentences

Interest Rate at December 31, 2025

First Community Louisiana Statutory Trust I

$ 3,609 $ 3,609 June 2036

3-month SOFR + Spread Adjustment of 0.26% + Margin of 1.77%

BOJ Bancshares Statutory Trust I

4 unchanged sentences

3-month SOFR + Spread Adjustment of 0.26% + Margin of 1.70%

First Community Louisiana Statutory Trust I

3,609 3,609 June 2036

3-month SOFR + Spread Adjustment of 0.26% + Margin of 1.77%

$ 9,795 $ 8,830

22 unchanged sentences

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

During the year ended December 31, 2022 , the Company voluntarily terminated interest rate swap agreements with a total notional amount of $ 115.0 million in response to market conditions.

For the year ended December 31, 2022 an unrealized gain of $ 6.4 million, net of tax expense of $ 1.7 million, was reclassified from “Accumulated other comprehensive loss” and recorded as “Swap termination fee income” in noninterest income in the accompanying consolidated statement of income.

For the year ended December 31, 2022 a gain of $ 4.3 million, net of tax expense of $ 1.2 million, was recognized in “Other comprehensive loss” in the accompanying consolidated statement of comprehensive income (loss) for the change in fair value of the interest rate swap contracts.

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,” and are marked to market through earnings.

The interest rate swaps with both the customers and third parties are not designated as hedges under FASB ASC Topic 815, “ Derivatives and Hedging ,” and changes in fair value are recognized in other operating income.

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” ).

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.

” The Company did not recognize any gains or losses in other operating income resulting from fair value adjustments of these swap agreements during the years ended December 31, 2025, 2024 and 2023 .

11 unchanged sentences

( 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.

The table below presents the gross presentation, the effects of offsetting, and a net presentation of the Company’s derivative financial instruments and securities sold under agreements to repurchase at December 31, 2025 and December 31, 2024 (dollars in thousands).

For additional information regarding the Company’s repurchase agreements see Note 9.

Securities Sold Under Agreements to Repurchase.

Gross Amounts Not Offset in the Consolidated Balance Sheets

Gross Amounts Recognized

Gross Amounts Offset in the Consolidated Balance Sheets

Net Amounts Presented in the Consolidated Balance Sheets

Financial Instruments

Cash Collateral (1)

December 31, 2025

Financial assets:

Interest rate swaps

$ 11,660 $ — $ 11,660 $ — $ ( 8,729 ) $ 2,931

Financial liabilities:

Interest rate swaps

$ 11,660 $ — $ 11,660 $ — $ — $ 11,660

Repurchase agreements

11,183 — 11,183 ( 11,183 ) — —

$ 22,843 $ — $ 22,843 $ ( 11,183 ) $ — $ 11,660

December 31, 2024

Financial assets:

Interest rate swaps

$ 17,195 $ — $ 17,195 $ — $ ( 15,445 ) $ 1,750

Financial liabilities:

Interest rate swaps

$ 17,195 $ — $ 17,195 $ — $ — $ 17,195

Repurchase agreements

8,376 — 8,376 ( 8,376 ) — —

$ 25,571 $ — $ 25,571 $ ( 8,376 ) $ — $ 17,195

( 1 ) The Company had no collateral posted with counterparties at December 31, 2025 and 2024 .

Collateral received from counterparties is included in “Interest-bearing deposits” in the accompanying consolidated balance sheets.

INVESTAR HOLDING CORPORATION

1 unchanged sentence

STOCKHOLDERS’ EQUITY

Preferred Stock

The Company’s Articles of Incorporation give the Company’s board of directors the authority to issue up to 5,000,000 shares of preferred stock.

At December 31, 2024 and 2023 , there were no preferred shares outstanding.

The preferred shares are considered “blank check” preferred stock.

This type of preferred stock allows the board of directors to fix the designations, preferences and relative, participating, optional or other special rights, and qualifications and limitations or restrictions of any series of preferred stock without further shareholder approval.

The Company’s Articles of Incorporation give the Company’s board of directors the authority to issue up to 40,000,000 shares of common stock.

Amendment to Restated Articles of Incorporation

On June 30, 2025, the Company filed the Articles of Amendment with the Louisiana Secretary of State, which became effective as of June 30, 2025, amending the Company’s Restated Articles by establishing and designating the newly authorized Series A Preferred Stock initially consisting of 32,500 authorized shares.

Series A Preferred Stock

The Company’s Restated Articles give the Company’s Board the authority to issue up to 5,000,000 shares of preferred stock, which are considered “blank check” preferred stock.

This type of preferred stock allows the Board to fix the designations, preferences and relative, participating, optional or other special rights, and qualifications and limitations or restrictions of any series of preferred stock without further shareholder approval.

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 of $ 32.5 million.

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

The Company utilized 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 was classified as permanent equity in the accompanying consolidated balance sheets and is intended to qualify as additional Tier 1 capital of the Company.

At December 31, 2025 and 2024 , there were 32,500 and no preferred shares outstanding, respectively.

The relative preferences, rights and limitations of the Series A Preferred Stock are set forth in the Company’s 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.

INVESTAR HOLDING CORPORATION

Notes to Consolidated Financial Statements

The Company’s Restated Articles of Incorporation give the Company’s Board the authority to issue up to 40,000,000 shares of common stock.

At December 31, 2025 , there were 9,798,948 common shares outstanding compared to 9,828,413 and 9,748,067 at December 31, 2024 and 2023 , respectively.

6 unchanged sentences

Further, a national bank may not pay a dividend in excess of its undivided profits.

Pursuant to the Company's Restated Articles of Incorporation, subject to certain exceptions, the Company is prohibited from paying dividends on 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.

Under the terms of the junior subordinated debentures, assumed through acquisition, the Company has the right at any time during the term of the debentures to defer the payment of interest.

1 unchanged sentence

Under the terms of the Company’s 2032 Notes, the Company is prohibited from paying dividends upon and during the continuance of any Event of Default under such notes.

These restrictions do not, and are not expected in the future to, materially limit the Company’s ability to pay dividends to its shareholders in an amount consistent with the Company’s history of paying dividends.

Accumulated Other Comprehensive (Loss) Income

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

For the years ended December 31,

Beginning of Period

End of Period

Beginning of Period

End of Period

Beginning of Period

End of Period

Unrealized (loss) gain, AFS, net

$ ( 39,627 ) $ ( 3,805 ) $ ( 43,432 ) $ ( 43,137 ) $ 3,510 $ ( 39,627 ) $ 4,882 $ ( 48,019 ) $ ( 43,137 )

Reclassification of realized (gain) loss, AFS, net

( 5,521 ) 595 ( 4,926 ) ( 5,777 ) 256 ( 5,521 ) ( 5,772 ) ( 5 ) ( 5,777 )

Unrealized gain (loss), transfer from AFS to HTM, net

1 — 1 1 — 1 2 ( 1 ) 1

Change in fair value of interest rate swaps designated as cash flow hedges, net

7,830 — 7,830 7,830 — 7,830 3,501 4,329 7,830

Reclassification of realized gain, interest rate swap termination, net

( 7,830 ) — ( 7,830 ) ( 7,830 ) — ( 7,830 ) ( 1,450 ) ( 6,380 ) ( 7,830 )

These restrictions do not, and are not expected in the future to, materially limit the Company’s ability to pay dividends on common stock to its shareholders in an amount consistent with the Company’s history of paying dividends.

Accumulated Other Comprehensive (Loss) Income

$ ( 45,147 ) $ ( 3,210 ) $ ( 48,357 ) $ ( 48,913 ) $ 3,766 $ ( 45,147 ) $ 1,163 $ ( 50,076 ) $ ( 48,913 )

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

AFS Securities

Balance, December 31, 2022

Change in unrealized gain, net

Reclassification of realized loss, net

Balance, December 31, 2023

Change in unrealized loss, net

Reclassification of realized loss, net

Balance, December 31, 2024

Change in unrealized gain, net

Reclassification of realized gain, net

Balance, December 31, 2025

INVESTAR HOLDING CORPORATION

9 unchanged sentences

Stock Options

During the years ended December 31, 2024, 2023 and 2022 , the Company granted 29,997 , 34,497 , and 34,379 stock options, respectively, to key personnel that vest in one - fifth increments on each of the first five anniversaries of the grant date.

During the year ended December 31, 2025 , the Company did not grant any stock options.

During the years ended December 31, 2024 and 2023, the Company granted 29,997 and 34,497 stock options, respectively, to key personnel that vest in one - fifth increments on each of the first five anniversaries of the grant date, which is the requisite service period.

The maximum option term cannot exceed ten years measured from the grant date.

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

8 unchanged sentences

( 96,000 ) 14.16

( 7,500 ) 14.00

Outstanding at December 31, 2024

10 unchanged sentences

Expected volatility was determined based on the historical volatilities of the Company’s stock price.

Stock option expense of $ 0.2 million is included in “Salaries and employee benefits” in the accompanying consolidated statements of income for each of the years ended December 31, 2024, 2023 and 2022 .

Stock option expense of $ 0.1 million, $ 0.2 million, and $ 0.2 million is included in “Salaries and employee benefits” in the accompanying consolidated statements of income for the years ended December 31, 2025, 2024 and 2023 , respectively.

At December 31, 2025 , there was $ 0.2 million of unrecognized compensation cost related to stock options that is expected to be recognized over a weighted average period of 2.5 years.

15 unchanged sentences

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

Compensation expense for RSUs is determined based on the market price of the Company’s common stock at the grant date and is applied to the total number of units granted and is recognized on a straight-line basis over the requisite service period of generally five years for employees and two years for non-employee directors.

Beginning on January 1, 2025, grants of RSUs to non-employee directors generally vest over a 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.

The Company granted a total of 135,220 RSUs to employees and directors for the year ended December 31, 2025 .

Of the RSUs granted in 2024 , 90,574 shares vest over five years and 21,218 shares vest over two years.

All of the RSUs granted in 2025 vest over five years.

The Company granted a total of 111,792 RSUs to employees and directors for the year ended December 31, 2024 .

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Of the RSUs granted in 2023 , 153,467 shares vest over five years and 19,269 shares vest over two years.

Compensation expense related to restricted stock and RSUs included in the accompanying consolidated statements of income for the years ended December 31, 2024, 2023 and 2022 was $ 1.8 million, $ 1.8 million and $ 2.0 million, respectively.

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

Compensation expense related to restricted stock and RSUs included in the accompanying consolidated statements of income for each of the years ended December 31, 2025, 2024 and 2023 was $ 1.8 million.

The unearned compensation related to these awards is amortized on a straight-line basis to compensation expense over the vesting period.

As of December 31, 2025 , unearned stock-based compensation cost associated with these awards totaled approximately $ 4.2 million and is expected to be recognized over a weighted average period of 3.3 years.

The following table summarizes the restricted stock and RSU activity for the years ended December 31, 2024 and December 31, 2023 .

The following table summarizes the restricted stock and RSU activity for the years ended December 31, 2025, 2024 and 2023 .

Weighted Average Grant Date Fair Value

Balance, beginning of period

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Notes to Consolidated Financial Statements

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFITS

The Company is obligated for certain costs associated with its insurance program for employee health.

The Company is self-insured for a substantial portion of its potential claims.

The Company recognizes its obligation associated with these costs, up to specified deductible limits, in the period in which a claim is incurred, including with respect to both reported claims and claims incurred but not reported.

The claims costs are estimated based on historical claims experience.

The reserves for insurance claims are reviewed and updated by management on a quarterly basis, and were approximately $ 0.3 million and $ 0.2 million at

December 31, 2025 and 2024

, respectively and are included in “Accrued taxes and other liabilities” in the accompanying consolidated balance sheets.

Health insurance expense included in “Salaries and employee benefits” in the accompanying consolidated statements of income were approximately $ 2.7 million, $ 2.0 million and $ 3.1 million for the years ended

December 31, 2025, 2024 and 2023

, respectively.

Defined Contribution Plan

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Contributions in the form of Company stock are held in a portion of the 401 (k) Plan that qualifies as an employee stock ownership plan.

The Company made Company stock contributions of $ 0.1 million in the year ended December 31, 2022.

The Company did not make any Company stock contributions during years ended December 31, 2025, 2024 and 2023 .

The discretionary components vest in increments of 20 % annually over a period of five years based on the employees’ years of service, beginning upon completion of two years of service (such that an employee with six years of service will be 100% vested).

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The deferred compensation plan provides for payments for a period of 15 years following specified retirement dates, which range from 2018 through 2032.

On November 4, 2022, the Company ’s then-current Chief Financial Officer separated from the Company, and t he Board approved the continuation of his Split-Dollar Life Insurance Agreement following his separation date.

Accordingly, in the fourth quarter of 2022, the Company recorded deferred compensation expense and associated liability of $ 0.2 million.

At December 31, 2025 and 2024 , the Company had a liabil ity of $ 5.5 million and $ 5.6 million, re spectively, included in “Accrued taxes and other liabilities” on the accompanying consolidated balance sheets related to these deferred compensation plans.

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$ 4,982 $ 4,154 $ 3,750

The provision for federal income taxes differs from that computed by applying the federal statutory rate of 21 % as indicated in the following analysis for the years ended December 31, 2024, 2023 and 2022 (dollars in thousands).

Tax based on statutory rate

A reconciliation between reported income tax expense and the amounts computed by applying the U.S.

federal statutory income tax rate of 21% to income before income taxes is presented in the following table for the years ended December 31, 2025, 2024 and 2023 (dollars in thousands).

Federal income tax based on statutory rate

$ 5,856 21.0 % $ 5,125 21.0 % $ 4,290 21.0 %

(Decrease) increase resulting from:

Effect of tax-exempt interest income

State taxes, net of federal income tax effects (1)

204 0.7 143 0.6 129 0.6

Nontaxable or nondeductible items:

Tax-exempt interest

( 796 ) ( 2.8 ) ( 567 ) ( 2.3 ) ( 533 ) ( 2.6 )

( 417 ) ( 1.5 ) ( 741 ) ( 3.1 ) ( 297 ) ( 1.4 )

Total income tax expense

137 0.5 188 0.8 88 0.4

Effective tax rate

( 2 ) — 6 — 73 0.4

Total income tax expense and effective tax rate, as reported

$ 4,982 17.9 % $ 4,154 17.0 % $ 3,750 18.4 %

( 1 ) For the years presented, Alabama comprises the majority (greater than 50% ) of the tax effect in this category.

The Company records deferred income tax on the tax effect of changes in timing differences.

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Unrealized loss on AFS securities

13,085 12,216

NOL carryforward

Deferred compensation

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$ 14,050 $ 17,120

The Company acquired NOL carryforwards through tax free acquisitions.

As of December 31, 2024 , the Company had fully utilized all NOL carryforwards.

As of December 31, 2023 , the Company’s gross NOL carryforwards were approximately $ 0.3 million.

The Company files income tax returns under U.S.

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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.

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not have a readily determinable fair value.

In accordance with ASC

These investments are measured at fair value using the net asset value practical expedient and are

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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.

The Company groups its financial assets and financial liabilities 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.

Level 3 – Valuation is based upon unobservable inputs that are supported by little or no market activity.

This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs, as well as an entity’s own assumptions that market participants would use in pricing the assets or liabilities.

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.

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

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

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

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

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Realized gain (loss) included in net income

Unrealized loss included in other comprehensive income

Unrealized (loss) gain included in other comprehensive loss

( 906 ) 31 ( 875 )

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Realized gain (loss) included in net income

Unrealized (loss) gain included in other comprehensive loss

( 906 ) 31 ( 875 )

Unrealized gain included in other comprehensive income

Maturities, prepayments, and calls

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Range of Discounts

Weighted Average Discount (1)

December 31, 2025

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Bond appraisal adjustment (2)

Corporate bonds

494 Option-adjusted discounted cash flow model;

present value of expected future cash flow model

Bond appraisal adjustment (1)

0 % - 6 % 2 %

December 31, 2024

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Bond appraisal adjustment (2)

2 % - 15 % 6 %

Corporate bonds

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Bond appraisal adjustment (2)

( 1 ) Weighted by relative fair value.

Fair values determined through valuation analysis using coupon, yield (discount margin), liquidity and expected repayment dates.

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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.

Other real estate owned is recorded at the lower of its net book value or fair value, and 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.

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Collateral discounts and discount rates

13 % - 14 % 13 %

December 31, 2024

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0 % - 79 % 31 %

( 1 ) Loans individually evaluated that were re-measured during the period had a carrying value of $ 2.4 million and $ 1.8 million at December 31, 2024 and December 31, 2023 , respectively, with related ACL of $ 0.2 million and $ 0.5 million as of such dates.

( 2 ) Other real estate owned that was remeasured during the period had a carrying value of $ 0.9 million at December 31, 2024 .

During the year ended December 31, 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.

Other real estate owned (3)

900 Underlying collateral value, third party appraisals

Collateral discounts and discount rates

( 1 ) Weighted by relative fair value.

( 2 ) Loans individually evaluated that were re-measured during the period had a carrying value of $ 3.6 million and $ 2.4 million at December 31, 2025 and December 31, 2024 , respectively, with related ACL of $ 0.3 million and $ 0.2 million as of such dates.

( 3 ) Other real estate owned that was remeasured during the period had a carrying value of $ 2.0 million and $ 0.9 million at December 31, 2025 and December 31, 2024 , respectively.

During the years ended December 31, 2025 and December 31, 2024 , the Company recorded write-downs of other real estate owned of $ 0.4 million and $ 0.2 million, respectively, which is included as part of “Other operating expenses” in noninterest expense on the accompanying consolidated statements of income.

INVESTAR HOLDING CORPORATION

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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.

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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.

The discount rate selected considers loan type, maturity date, a liquidity premium, cost to service, and cost of capital.

Deposits – The fair values disclosed for demand deposits are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts).

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.

Short-Term Borrowings – The carrying amounts of federal funds purchased, repurchase agreements, and other short-term borrowings approximate their fair values because of their short-term nature.

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.

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Financial liabilities:

Deposits, noninterest-bearing

$ 2,350,249 $ 2,349,856 $ — $ 2,349,856 $ —

Deposits, interest-bearing

1,913,801 1,826,868 — — 1,826,868

FHLB short-term advances and repurchase agreements

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1,913,801 1,826,868 — — 1,826,868

Borrowings under BTFP and repurchase agreements

FHLB short-term advances and repurchase agreements

15,591 15,577 — 15,577 —

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In addition to the formal statutes, regulations, and guidance, regulatory authorities also consider the adequacy of the Company’s and the Bank’s total capital in relation to its assets, deposits, risk profile, and other such items and, as a result, capital adequacy considerations could further limit the availability of dividends from the Company and the Bank.

The Company is also subject to dividend restrictions under the terms of its 2032 Notes and junior subordinated debentures.

The Company is also subject to dividend restrictions under the terms of its Series A Preferred Stock, 2032 Notes and junior subordinated debentures.

See “ Common Stock – Dividend Restrictions ” in Note 13.

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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.

At December 31, 2024 and 2023 , the reserve for unfunded loan commitments was $ 42,000 and $ 0.3 million, 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.

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Standby letters of credit

The credit risk associated with these commitments is evaluated in a manner similar to the ACL on loans and is included in “Accrued taxes and other liabilities” in the accompanying consolidated balance sheets.

The table below shows a summary of the activity in the ACL on unfunded loan commitments for the periods presented (dollars in thousands).

December 31, 2025

December 31, 2024

December 31, 2023

Balance, beginning of period

$ 42 $ 330 $ 372

Provision for (reversal of) credit losses on unfunded loan commitments

383 ( 288 ) ( 36 )

ASC 326 adoption impact (1)

Balance, end of period

$ 425 $ 42 $ 330

( 1 ) On January 1, 2023, the Company adopted ASC 326, which introduced a new model known as CECL.

Additionally, at December 31, 2025 , the Company had unfunded commitments of $ 1.5 million for its investment in SBIC qualified funds.

The Company is obligated for certain costs associated with its insurance program for employee health.

The Company is self-insured for a substantial portion of its potential claims.

The claims costs are estimated based on historical claims experience.

The reserves for insurance claims are reviewed and updated by management on a quarterly basis.

Employment Agreements

On August 1, 2020, the Company entered into an employment agreement with its Chief Executive Officer.

The agreement provides that the executive shall receive a minimum annual base salary of $ 510,000 , shall be eligible for annual incentive compensation up to a certain percentage of the base salary, subject to the discretion and approval of the Company’s board of directors, and shall be entitled to the payment of severance benefits upon termination under specified circumstances.

The employment agreement automatically renews for successive one -year periods unless written notice of non-renewal is given by either party to the other at least ninety ( 90 ) days prior to the expiration of the then-current term.

INVESTAR HOLDING CORPORATION

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Cash and due from banks

$ 10,126 $ 951

Equity securities at fair value

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STOCKHOLDERS’ EQUITY

Preferred stock

146,133 146,890

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$ 9,500 $ 34,937

Dividends on corporate stock

Change in the fair value of equity securities

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Gain on early extinguishment of subordinated debt

Acquisition expense

Other expense

Total expense

Income (loss) before income tax benefit and equity in undistributed earnings of bank subsidiary

31,916 ( 706 )

Income before income tax benefit and equity in undistributed earnings of bank subsidiary

Equity in undistributed earnings of bank subsidiary

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22,904 20,252

Preferred stock dividends declared

Net income available to common shareholders

$ 21,848 $ 20,252

INVESTAR HOLDING CORPORATION

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Change in the fair value of equity securities

( 247 ) ( 417 )

Amortization of subordinated debt issuance costs and purchase accounting adjustments

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Purchases of equity securities at fair value

( 500 ) ( 1,000 )

Purchases of other investments

( 230 ) ( 165 )

Investment in subsidiary

Net cash used in investing activities

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( 4,227 ) ( 3,972 )

Cash dividends paid on preferred stock

Payments to repurchase common stock

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Extinguishment of subordinated debt

Net cash used in financing activities

( 31,328 ) ( 6,765 )

Net increase (decrease) in cash

Proceeds from preferred stock offering, net of issuance costs

Net cash provided by (used in) financing activities

23,368 ( 31,328 )

Net increase in cash

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

$ 10,126 $ 951

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

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Notes to Consolidated Financial Statements

EARNINGS PER SHARE

The following is a summary of the information used in the computation of basic and diluted earnings per common share for the years ended December 31, 2024, 2023 and 2022 (in thousands, except share data).

Earnings per common share - basic

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 years ended December 31, 2025, 2024 and 2023 (in thousands, except share and per share data).

$ 22,904 $ 20,252 $ 16,678

income allocated to participating securities

preferred stock dividends declared

Net income available to common shareholders

21,848 20,252 16,678

income allocated to participating securities

Net income allocated to common shareholders

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9,829,130 9,813,694 9,839,258

Basic earnings per common share

$ 2.06 $ 1.69 $ 3.54

Earnings per common share - diluted

Net income allocated to common shareholders

$ 20,252 $ 16,677 $ 35,676

Weighted average basic shares outstanding

Dilutive effect of stock-based compensation

167,693 122,386 2,583

Dilutive effect of securities

Dilutive effect of Series A Preferred Stock

Weighted average diluted shares outstanding

10,776,985 9,936,080 9,841,841

Total weighted average diluted shares outstanding

Basic earnings per common share

$ 2.22 $ 2.06 $ 1.69

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950 4,741 71,711

Restricted stock awards

4,741 71,711 15,176

SUBSEQUENT EVENTS

Effective as of January 1, 2026, the Company, the holding company for the Bank, completed its previously announced acquisition of WFB, the holding company for FNB.

The acquisition was completed in accordance with the previously announced Agreement and Plan of Merger, dated July 1, 2025, by and between the Company and WFB (the “Merger Agreement”), which provided for the merger of WFB with and into the Company, with the Company as the surviving corporation, followed by the merger of FNB with and into the Bank, with the Bank as the surviving bank.

Under the terms of the Merger Agreement, the Company issued an aggregate of 3,955,272 shares of its common stock and $ 7.2 million in cash to the shareholders of WFB as consideration for the exchange of all outstanding shares of WFB common stock.

At December 31, 2025, WFB had $ 1.2 billion in total assets, $ 1.0 billion in net loans and $ 1.0 billion in total deposits.

The acquisition of WFB will be accounted for as a business combination.

The Company is currently in the process of completing the purchase accounting and has not made all of the remaining required disclosures such as the fair value of assets acquired and supplemental pro forma information, which will be disclosed in subsequent filings.

The Company has evaluated all other subsequent events and transactions that occurred after December 31, 2025 up through the date that the financial statements were available to be issued and determined that there were no additional events that require disclosure.

No events or changes in circumstances were identified that would have an adverse impact on the financial statements.

INVESTAR HOLDING CORPORATION

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data