Investar Holding Corp 10-K

Item 8. Financial Statements and Supplementary Data REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Shareholders and Board of Directors Investar Holding Corporation Baton Rouge, Louisiana 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 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 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 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 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. 62 Table of Contents 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. Baton Rouge, Louisiana March 16, 2026 63 Table of Contents INVESTAR HOLDING CORPORATION CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share data) December 31, 2025 2024 ASSETS Cash and due from banks $ 26,606 $ 26,623 Interest-bearing balances due from other banks 14,899 1,299 Cash and cash equivalents 41,505 27,922 Available for sale securities at fair value (amortized cost of $ 416,002 and $ 392,564 , respectively) 370,614 331,121 Held to maturity securities at amortized cost (estimated fair value of $ 50,540 and $ 42,144 , respectively) 48,199 42,687 Loans 2,175,973 2,125,084 Less: allowance for credit losses ( 26,349 ) ( 26,721 ) Loans, net 2,149,624 2,098,363 Equity securities at fair value 3,354 2,593 Nonmarketable equity securities 17,021 16,502 Bank premises and equipment, net of accumulated depreciation of $ 23,836 and $ 21,853 , respectively 39,534 40,705 Other real estate owned, net 3,374 5,218 Accrued interest receivable 14,289 14,423 Deferred tax asset 14,050 17,120 Goodwill and other intangible assets, net 41,184 41,696 Bank owned life insurance 69,188 59,703 Other assets 21,112 24,759 Total assets $ 2,833,048 $ 2,722,812 LIABILITIES Deposits: Noninterest-bearing $ 445,986 $ 432,143 Interest-bearing 1,904,263 1,913,801 Total deposits 2,350,249 2,345,944 Advances from Federal Home Loan Bank 116,000 67,215 Repurchase agreements 11,183 8,376 Subordinated debt, net of unamortized issuance costs 16,738 16,697 Junior subordinated debt 8,830 8,733 Accrued taxes and other liabilities 28,975 34,551 Total liabilities 2,531,975 2,481,516 Commitments and contingencies (Note 19) STOCKHOLDERS’ EQUITY Preferred stock, no par value per share; 5,000,000 shares authorized; 6.5 % Series A Non-Cumulative Perpetual Convertible Preferred Stock; 32,500 shares ($ 1,000 liquidation preference) issued and outstanding at December 31, 2025 and none issued and outstanding at December 31, 2024 30,353 — Common stock, $ 1.00 par value per share; 40,000,000 shares authorized; 9,798,948 and 9,828,413 shares issued and outstanding, respectively 9,799 9,828 Surplus 146,133 146,890 Retained earnings 150,510 132,935 Accumulated other comprehensive loss ( 35,722 ) ( 48,357 ) Total stockholders’ equity 301,073 241,296 Total liabilities and stockholders’ equity $ 2,833,048 $ 2,722,812 See accompanying notes to the consolidated financial statements. 64 Table of Contents INVESTAR HOLDING CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share data) For the years ended December 31, 2025 2024 2023 INTEREST INCOME Interest and fees on loans $ 126,732 $ 128,498 $ 117,892 Interest on investment securities Taxable 11,940 11,047 12,372 Tax-exempt 2,743 1,249 693 Other interest income 2,601 3,071 2,244 Total interest income 144,016 143,865 133,201 INTEREST EXPENSE Interest on deposits 57,868 61,510 42,072 Interest on borrowings 5,375 12,602 16,609 Total interest expense 63,243 74,112 58,681 Net interest income 80,773 69,753 74,520 Reversal of credit losses ( 3,391 ) ( 3,480 ) ( 2,000 ) Net interest income after reversal of credit losses 84,164 73,233 76,520 NONINTEREST INCOME Service charges on deposit accounts 3,256 3,241 3,090 Gain (loss) on call or sale of investment securities, net 18 ( 753 ) ( 323 ) (Loss) gain on sale or disposition of fixed assets, net ( 8 ) 427 ( 1,323 ) Gain (loss) on sale of other real estate owned, net 29 683 ( 114 ) Gain on sale of loans — — 75 Servicing fees and fee income on serviced loans — — 14 Interchange fees 1,574 1,615 1,697 Income from bank owned life insurance 1,985 4,886 1,417 Change in the fair value of equity securities 261 413 ( 65 ) Income from legal settlement — 1,122 — Other operating income 2,348 2,571 2,070 Total noninterest income 9,463 14,205 6,538 Income before noninterest expense 93,627 87,438 83,058 NONINTEREST EXPENSE Depreciation and amortization 2,792 3,095 3,780 Salaries and employee benefits 40,228 38,615 37,143 Occupancy 2,667 2,576 2,994 Data processing 3,456 3,611 3,482 Marketing 429 370 302 Professional fees 2,076 1,797 1,933 Gain on early extinguishment of subordinated debt — ( 292 ) — Acquisition expense 1,036 — — Other operating expenses 13,057 13,260 12,996 Total noninterest expense 65,741 63,032 62,630 Income before income tax expense 27,886 24,406 20,428 Income tax expense 4,982 4,154 3,750 Net income 22,904 20,252 16,678 Preferred stock dividends declared 1,056 — — Net income available to common shareholders $ 21,848 $ 20,252 $ 16,678 EARNINGS PER COMMON SHARE Basic earnings per common share $ 2.22 $ 2.06 $ 1.69 Diluted earnings per common share 2.13 2.04 1.69 See accompanying notes to the consolidated financial statements. 65 Table of Contents INVESTAR HOLDING CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands) For the years ended December 31, 2025 2024 2023 Net income $ 22,904 $ 20,252 $ 16,678 Other comprehensive income (loss): Investment securities: 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 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 income (loss) 12,635 ( 3,210 ) 3,766 Total comprehensive income $ 35,539 $ 17,042 $ 20,444 See accompanying notes to the consolidated financial statements. 66 Table of Contents INVESTAR HOLDING CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ EQUITY (Amounts in thousands, except per share data) Preferred Stock Common Stock Surplus 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 — ( 22 ) ( 330 ) — — ( 352 ) Shares repurchased — ( 222 ) ( 2,804 ) — — ( 3,026 ) Options exercised — 8 97 — — 105 Common stock dividends declared, $ 0.395 per share — — — ( 3,878 ) — ( 3,878 ) Stock-based compensation — 82 1,906 — — 1,988 Net income — — — 16,678 — 16,678 Other comprehensive income, net — — — — 3,766 3,766 Balance, December 31, 2023 — 9,748 145,456 116,711 ( 45,147 ) 226,768 Surrendered shares — ( 95 ) ( 1,401 ) — — ( 1,496 ) Shares repurchased — ( 19 ) ( 286 ) — — ( 305 ) Options exercised — 96 1,263 — — 1,359 Common stock dividends declared, $ 0.41 per share — — — ( 4,028 ) — ( 4,028 ) Stock-based compensation — 98 1,858 — — 1,956 Net income — — — 20,252 — 20,252 Other comprehensive loss, net — — — — ( 3,210 ) ( 3,210 ) Balance, December 31, 2024 — 9,828 146,890 132,935 ( 48,357 ) 241,296 Surrendered shares — ( 57 ) ( 951 ) — — ( 1,008 ) Shares repurchased — ( 114 ) ( 2,179 ) — — ( 2,293 ) Options exercised — 34 501 — — 535 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 — 108 1,872 — — 1,980 Net income — — — 22,904 — 22,904 Other comprehensive income, net — — — — 12,635 12,635 Balance, December 31, 2025 $ 30,353 $ 9,799 $ 146,133 $ 150,510 $ ( 35,722 ) $ 301,073 See accompanying notes to the consolidated financial statements. 67 Table of Contents INVESTAR HOLDING CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) For the years ended December 31, 2025 2024 2023 Cash flows from operating activities Net income $ 22,904 $ 20,252 $ 16,678 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,792 3,095 3,780 Reversal of credit losses ( 3,391 ) ( 3,480 ) ( 2,000 ) Net amortization (accretion) of purchase accounting adjustments 59 ( 32 ) ( 274 ) Provision for other real estate owned 434 233 — Net accretion of securities ( 673 ) ( 62 ) ( 62 ) (Gain) loss on call or sale of investment securities, net ( 18 ) 753 323 Loss (gain) on sale or disposition of fixed assets, net 8 ( 427 ) 1,323 (Gain) loss on sale of other real estate owned, net ( 29 ) ( 683 ) 114 Gain on sale of loans — — ( 75 ) Gain on early extinguishment of subordinated debt — ( 292 ) — FHLB stock dividend ( 273 ) ( 194 ) ( 642 ) Stock-based compensation 1,980 1,956 1,988 Deferred taxes ( 349 ) 659 ( 350 ) Net change in value of BOLI ( 1,985 ) ( 1,771 ) ( 1,417 ) Gain on BOLI death benefit proceeds — ( 3,115 ) — Amortization of subordinated debt issuance costs 42 83 95 Change in the fair value of equity securities ( 261 ) ( 413 ) 65 Net change in: Accrued interest receivable 135 ( 57 ) ( 518 ) Other assets ( 2,009 ) 376 5,772 Accrued taxes and other liabilities ( 1,150 ) ( 954 ) 1,447 Net cash provided by operating activities 18,216 15,927 26,247 Cash flows from investing activities Proceeds from sales of investment securities available for sale — 18,048 14,974 Purchases of securities available for sale ( 74,974 ) ( 27,590 ) ( 107,904 ) Purchases of securities held to maturity ( 8,300 ) ( 27,000 ) ( 14,056 ) Proceeds from maturities, prepayments and calls of investment securities available for sale 52,231 35,576 140,712 Proceeds from maturities, prepayments and calls of investment securities held to maturity 2,783 4,779 1,879 Proceeds from redemption or sale of nonmarketable equity securities 2,491 1,872 17,429 Purchases of nonmarketable equity securities ( 2,738 ) ( 4,763 ) ( 4,196 ) Purchases of equity securities at fair value ( 500 ) ( 1,000 ) — Net (increase) decrease in loans ( 49,530 ) 83,283 41,999 Proceeds from sales of other real estate owned 3,126 2,070 1,484 Proceeds from sales of fixed assets — 1,341 42 Purchases of loans — — ( 163,842 ) Purchases of fixed assets ( 1,383 ) ( 506 ) ( 1,072 ) Purchases of BOLI ( 7,500 ) ( 10,000 ) — Proceeds from surrender of BOLI — 8,440 — Proceeds from BOLI death benefits — 5,540 — Purchases of other investments ( 230 ) ( 319 ) ( 617 ) Distributions from investments 618 294 274 Cash paid for branch sale to First Community Bank, net of cash received — — ( 596 ) Net cash (used in) provided by investing activities ( 83,906 ) 90,065 ( 73,490 ) 68 Table of Contents INVESTAR HOLDING CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED (Amounts in thousands) For the years ended December 31, 2025 2024 2023 Cash flows from financing activities Net increase in customer deposits 4,313 90,291 188,125 Net increase (decrease) in repurchase agreements 2,807 ( 257 ) 8,633 Net increase (decrease) in short-term FHLB advances 28,785 7,215 ( 333,500 ) 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 — ( 23,500 ) ( 30,000 ) Cash dividends paid on common stock ( 4,227 ) ( 3,972 ) ( 3,844 ) Payments to repurchase common stock ( 2,293 ) ( 305 ) ( 3,026 ) Proceeds from stock options exercised 63 337 105 Proceeds from preferred stock offering, net of issuance costs 30,353 — — Cash dividends paid on preferred stock ( 528 ) — — Extinguishment of subordinated debt — ( 27,388 ) — Net cash provided by (used in) financing activities 79,273 ( 110,079 ) 38,993 Net increase (decrease) in cash and cash equivalents 13,583 ( 4,087 ) ( 8,250 ) Cash and cash equivalents, beginning of period 27,922 32,009 40,259 Cash and cash equivalents, end of period $ 41,505 $ 27,922 $ 32,009 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash payments for: Interest on deposits and borrowings $ 63,119 $ 74,463 $ 56,773 Income taxes total 5,889 3,101 2,899 Federal 5,630 2,990 2,828 State 259 111 71 SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING ACTIVITIES Transfer from loans to other real estate owned $ 1,687 $ 1,975 $ 3,930 Transfer from bank premises and equipment to other real estate owned — 424 1,425 See accompanying notes to the consolidated financial statements. 69 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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, Texas and Alabama. Basis of Presentation The consolidated financial statements of Investar Holding Corporation and its wholly-owned subsidiary, the Bank, have been prepared in conformity with GAAP and to generally accepted practices within the banking industry. Prior period consolidated financial statements are reclassified whenever necessary to conform to the current period presentation. No reclassifications of prior period balances were material to the consolidated financial statements. Segment Reporting The Company determined that all of its banking operations serve a similar customer base, offer similar products and services, and are managed through similar processes. Therefore, the Company’s banking operations are aggregated into one reportable operating segment, which generates income principally from interest on loans and, to a lesser extent, securities investments, as well as from fees charged in connection with various loan and deposit services. The CODM is the Chief Executive Officer, who for the purposes of assessing performance, making operating decisions, and allocating Company resources, regularly reviews net income as reported in the accompanying consolidated statements of income. The level of disaggregation and amounts of significant segment income and expenses that are regularly provided to the CODM are the same as those presented in the accompanying consolidated statements of income. Likewise, the measure of segment assets is reported on the accompanying consolidated balance sheets as total assets. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material. Material estimates that are particularly susceptible to significant change relate to the determination of the ACL. While management uses available information to recognize credit losses on loans, future additions to the allowance may be necessary based on changes in economic conditions, changes in conditions of borrowers’ industries or changes in the condition of individual borrowers. Because of these factors, it is reasonably possible that the ACL may change materially in the near term. However, the amount of the change that is reasonably possible cannot be estimated. Other estimates that are susceptible to significant change in the near term relate to the allowance for off-balance sheet credit losses, the fair value of stock-based compensation awards, the determination of an ACL for 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. 70 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements Cash and Cash Equivalents Cash and cash equivalents include cash and amounts due from banks and federal funds sold due to the short-term nature of these items. Investment Securities The Company classifies and accounts for its investment securities as follows: • HTM Securities: bonds, notes, and debentures for which the Company has the positive intent and ability to hold to maturity are reported at cost, adjusted for premiums and discounts that are recognized in interest income using the interest method over the period to maturity. • AFS Securities: consist of bonds, notes, and debentures that are available to meet the Company’s operating needs. These securities are reported at fair value. Unrealized holding gains and losses, net of tax, on AFS securities are reported as a net amount in other comprehensive income. 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 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. If either criteria is met, the security’s amortized cost basis is written down to fair value through net income. If neither criteria is met, the Company evaluates whether any portion of the decline in fair value is the result of credit deterioration. If the evaluation indicates that a credit loss exists, an ACL is recorded through provisions for credit losses, limited by the amount by which the amortized cost exceeds fair value. Any impairment not recognized in the ACL is recognized in other comprehensive income (loss). See “Allowance for Credit Losses” below for the accounting treatment of the allowance of credit losses for AFS and HTM securities. Loans The Company’s loan portfolio categories include real estate, commercial and consumer loans. Real estate loans are further categorized into construction and development, 1 - 4 family residential, multifamily, farmland and commercial real estate loans. The consumer loan category includes loans originated through indirect lending. Indirect lending, which is lending initiated through third -party business partners, is largely comprised of loans made through automotive dealerships. 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 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 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. A loan may b e returned to accrual status when all the principal and interest amounts contractually due are brought current and future principal and interest amounts contractually due are reasonably assured, which is typically evidenced by a sustained period of repayment performance by the borrower. 71 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements 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. Allowance for Credit Losses The ACL represents the measurement of all expected credit losses for financial assets accounted for on an amortized cost basis. Expected losses at the reporting date are calculated based on historical experience, current conditions, and reasonable and supportable forecasts. The lifetime expected credit losses are recorded at the time the financial asset is originated or acquired and adjusted each period as a provision for credit losses for changes in expected lifetime credit losses. The Company developed a CECL model methodology that calculates expected credit losses over the life of the portfolio by analyzing the composition, characteristics and quality of the loan 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, 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 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, 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. Loans that do not share similar risk characteristics with other loans are excluded from the loan pools and individually evaluated for impairment. Individually evaluated loans are loans for which it is probable that all the amounts due under the contractual terms of the loan will not be collected. The ACL on loans that are individually evaluated is based on a comparison of the recorded investment in the loan with either the expected cash flows discounted using the loan’s original effective interest rate, observable market price for the loan or the fair value of the collateral underlying certain collateral dependent loans. The ACL is established after input from management as well as the risk management department and the special assets committee. F or collateral dependent loans where the borrower is experiencing financial difficulty, which the Company evaluates independently from the loan pool, the expected credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral, which is generally ba sed on third -party appraisals. Credits deemed uncollectible are charged to the ACL. Provisions for credit losses and recoveries on loans previously charged off are adjustments to the ACL. Expected credit losses on AFS securities are recorded in an ACL when management does not intend to sell or believes that it is not more likely than not that they will be required to sell the securities prior to recovery of the securities’ amortized cost basis. If management has the intent to sell or believes it is more likely than not the Company will be required to sell an impaired AFS security before recovery of the amortized cost basis, the credit loss is recorded as a direct write-down of the amortized cost basis. In evaluating AFS 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. Declines in the fair value of AFS securities that are not considered credit related are recognized in accumulated other comprehensive income or loss. 72 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements Expected credit losses on HTM securities are recorded in an ACL and estimated using a probability of loss model based on reasonable and supportable forecasts. HTM securities are evaluated on a collective basis by security type. 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. 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. Members of the FHLB and FRB are required to own a certain amount of stock based on the level of borrowings and other factors and may invest in additional amounts. FHLB stock and FRB stock are carried at cost, restricted as to redemption, and periodically evaluated for impairment based on the ultimate recovery of par value. Both cash and stock dividends are reported as income. Nonmarketable equity securities also include investments in other correspondent banks including Independent Bankers Financial Corporation and First National Bankers Bank stock. These investments are carried at cost which approximates fair value. The balance of nonmarketable equity securities at December 31, 2025 and 2024 was $ 17.0 million and $ 16.5 million, respectively. 73 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements 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. Depreciation expense is computed using the straight-line method and is charged to expense over the estimated useful lives of 39 years for buildings, five to 39 years for improvements, three to seven years for furniture and equipment, and one to five years for computer equipment and software. Costs of major additions and improvements, which extend the useful life of the asset, are capitalized. Expenditures for maintenance and repairs are expensed as incurred. Gains or losses on the disposition of land, buildings, and equipment are included in noninterest income on the consolidated statements of income. The Company leases certain branch locations under operating lease agreements. The Company also leases certain office facilities to outside parties under operating lessor agreements; however, such leases are not significant. The Company determines if an arrangement is a lease at inception and, at that time, assesses appropriate classification of the lease as finance or operating. Operating leases, with the exception of short-term leases, are included in operating lease ROU assets and operating lease liabilities in “Bank premises and equipment, net” and “Accrued taxes and other liabilities,” respectively, in the accompanying consolidated balance sheets. Operating lease ROU assets represent the right to use an underlying asset for the lease term and operating lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company uses the interest rate implicit in the contract, when available, or the Company’s incremental collateralized borrowing rate with similar terms based on the information available at the commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease pre-payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease. When it is reasonably certain that the Company will exercise an option to extend a lease, the extension is included in the lease term when calculating the present value of lease payments. Other Real Estate Owned Other real estate owned includes real estate 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. Valuations are periodically performed by management, a nd write-downs on other real estate owned are charged to expense through a valuation allowance wh en fair value is determined to be less than the carrying value. Costs relative to the development and improvement of properties are capitalized to the extent realizable. The ability of the Company to recover the carrying value of real estate is based upon future sales of the other real estate owned. The ability to affect such sales is subject to market conditions and other factors, many of which are beyond the Company’s control. Operating income and expense of such properties is included in other operating income or expense, respectively, on the accompanying consolidated statements of income. Gain or loss on the disposition of such properties is included in noninterest income on the consolidated statements of income. Goodwill and Other Intangible Assets 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. 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. No impairment charges have been recognized through December 31, 2025 . Core deposit intangibles representing the value of the acquired core deposit base are generally recorded in connection with business combinations involving banks and branch locations. The Company’s policy is to amortize core deposit intangibles over the estimated useful life of the deposit base. The remaining useful lives of core deposit intangibles are evaluated periodically to determine whether events and circumstances warrant revision of the remaining period of amortization. The Company’s core deposit intangibles are currently amortized using the sum-of-the-years-digits basis over 10 to 15 years. See Note 7. Goodwill and Other Intangible Assets, for additional information. Bank Owned Life Insurance The Company invests in BOLI policies on certain current and former officers and employees that provide earnings to partially offset the cost of employee benefit plans. The Company is the owner and beneficiary of the life insurance policies it purchased directly on a chosen group of employees. The policies are carried on the Company’s consolidated balance sheet at their cash surrender value and are subject to regulatory capital requirements. The determination of the cash surrender value includes a full evaluation of the contractual terms of each policy and assumes the surrender of policies on an individual-life by individual-life basis. Additionally, the Company periodically reviews the creditworthiness of the insurance companies that have underwritten the policies. Earnings accruing to the Company are derived from the general account investments of the insurance companies. Increases in the net cash surrender value of BOLI policies and insurance proceeds received upon death are not taxable and are recorded in noninterest income in the consolidated statements of income. 74 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements Repurchase 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 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. See Note 14. Stock-Based Compensation, for further disclosures regarding stock-based compensation. Off-Balance Sheet Credit-Related Financial Instruments 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 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. The Company manages its risks through the use of derivative financial instruments, primarily through management of exposure due to the receipt or payment of future cash amounts based on interest rates. The Company’s derivative financial instruments manage the differences in the timing, amount and duration of expected cash receipts and payments. 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. 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. Derivative Financial Instruments, which describes the derivative instruments currently used by the Company and discloses how these derivatives impact the Company’s financial position and results of operations. Income Taxes The provision for income taxes is based on amounts reported in the consolidated statements of income after exclusion of nontaxable income such as interest income on certain loan and investment securities and income from BOLI. Also, certain items of income and expenses are recognized in different time periods for financial statement purposes than for income tax purposes. Thus, provisions for deferred taxes are recorded in recognition of such temporary differences. 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. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. 75 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements 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. There were no material penalties or related interest for the years ended December 31, 2025 , 2024 or 2023 . Transfer of Financial Assets Transfers of financial assets in which the Company has surrendered control over the transferred assets are accounted for as sales. Control over transferred assets is deemed to be surrendered when the assets have been legally isolated from the Company, the transferee obtains the right to pledge or exchange the transferred assets with no conditions that constrain the transferee, and the Company does not maintain effective control over the transferred assets. 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’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. The two -class method is an earnings allocation formula that determines earnings per share separately for common stock and participating securities according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings distributed and undistributed are allocated to participating securities and common shares based on their respective rights to receive dividends. Unvested share-based payment awards that contain nonforfeitable rights to dividends are considered participating securities (i.e. unvested time-vested restricted stock), not subject to performance-based measures. Earnings per common share is computed in accordance with FASB ASC Topic 260, “ Earnings Per Share. ” Basic earnings per common share is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per common share is computed by using net income available to common shareholders plus dividends declared on dilutive convertible preferred stock, divided by the sum of 1 ) the weighted average number of shares determined for the basic earnings per common share computation, 2 ) the dilutive effect of stock-based compensation using the treasury stock method, and 3 ) the dilutive effect of convertible preferred stock using the if-converted method. A reconciliation of the weighted average common shares used in calculating basic earnings per common share and the weighted average common shares used in calculating diluted earnings per common share for the reported periods is provided in Note 22. Earnings Per Common Share. Comprehensive Income Comprehensive income includes net income and other comprehensive income or loss, which in the case of the Company includes unrealized gains and losses on securities, changes in the fair value of interest rate swaps, and the reclassification of realized gains and losses on AFS securities and interest rate swap terminations to net income, net of related income taxes. 76 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements Acquisition Accounting Business combinations are accounted for under the acquisition method of accounting. Purchased assets and assumed liabilities are recorded at their respective acquisition date fair values, and identifiable intangible assets are recorded at fair value. If the consideration given exceeds the fair value of the net assets received, goodwill is recognized. If the fair value of the net assets received exceeds the consideration given, a bargain purchase gain is recognized. Fair values are subject to refinement for up to one year after the closing date of an acquisition as information relative to closing date fair values becomes available. Loans acquired in a business combination are recorded at their estimated fair value as of the acquisition date. The fair value of loans acquired is determined using a discounted cash flow model based on assumptions regarding the amount and timing of principal and interest prepayments, estimated payments, estimated default rates, estimated loss severity in the event of defaults, and current market rates. The fair value adjustment for performing acquired loans is accreted over the life of the loan using the effective interest method. 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. Treasury Stock The Louisiana Business Corporation Act does not include the concept of treasury stock. Rather, shares purchased by the Company constitute authorized but unissued shares. Accounting principles generally accepted in the United States of America state that accounting for treasury stock shall conform to state law. The Company’s consolidated financial statements as of December 31, 2025, 2024 and 2023 reflect this principle. The cost of shares purchased by the Company has been allocated to common stock and surplus balances. 77 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements Accounting Standards Adopted in 2025 FASB ASC Topic 740 “ Income Taxes - Improvements to Income Tax Disclosures ” Update No. 2023 - 09 ( “ ASU 2023 - 09” ) . 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 ASC Topic 220 “ Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses ” Update No. 2024 - 03 ( “ ASU 2024 - 03” ) . In November 2024, the FASB issued ASU 2024 - 03, which requires disaggregated disclosure of income statement expenses in a tabular format in the notes of the financial statements for public business entities. ASU 2024 - 03 is effective on a prospective basis for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption and retrospective application permitted. The Company is currently evaluating the provisions of the amendment and the impact on its future consolidated financial statements. 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. 78 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements NOTE 2. INVESTMENT SECURITIES The amortized cost and approximate fair value of investment securities classified as AFS are summarized below as of the dates presented (dollars in thousands). December 31, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Obligations of the U.S. Treasury and U.S. government agencies and corporations $ 18,910 $ 54 $ ( 213 ) $ 18,751 Obligations of state and political subdivisions 17,736 43 ( 1,497 ) 16,282 Corporate bonds 25,922 95 ( 1,335 ) 24,682 Residential mortgage-backed securities 282,849 716 ( 36,186 ) 247,379 Commercial mortgage-backed securities 70,585 118 ( 7,183 ) 63,520 Total $ 416,002 $ 1,026 $ ( 46,414 ) $ 370,614 December 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Obligations of the U.S. Treasury and U.S. government agencies and corporations $ 15,985 $ 47 $ ( 325 ) $ 15,707 Obligations of state and political subdivisions 18,363 — ( 2,243 ) 16,120 Corporate bonds 29,772 8 ( 2,513 ) 27,267 Residential mortgage-backed securities 256,272 39 ( 47,543 ) 208,768 Commercial mortgage-backed securities 72,172 133 ( 9,046 ) 63,259 Total $ 392,564 $ 227 $ ( 61,670 ) $ 331,121 The Company calculates realized gains and losses on sales of debt securities under the specific identification method. Proceeds from sales of investment securities classified as AFS and gross gains and losses are summarized below for the periods presented (dollars in thousands). Twelve months ended December 31, 2025 2024 2023 Proceeds from sales $ — $ 18,048 $ 14,974 Gross gains $ — $ — $ 2 Gross losses $ — $ ( 754 ) $ ( 325 ) The amortized cost and approximate fair value of investment securities classified as HTM are summarized below as of the dates presented (dollars in thousands). December 31, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Obligations of state and political subdivisions $ 46,331 $ 2,518 $ ( 3 ) $ 48,846 Residential mortgage-backed securities 1,868 — ( 174 ) 1,694 Total $ 48,199 $ 2,518 $ ( 177 ) $ 50,540 December 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Obligations of state and political subdivisions $ 40,618 $ 70 $ ( 365 ) $ 40,323 Residential mortgage-backed securities 2,069 — ( 248 ) 1,821 Total $ 42,687 $ 70 $ ( 613 ) $ 42,144 Securities are classified in the consolidated balance sheets according to management’s intent. The Company had no securities classified as trading as of December 31, 2025 or December 31, 2024 . 79 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements The approximate fair value of AFS securities and unrealized losses, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, are summarized below as of the dates presented (dollars in thousands). Less than 12 Months 12 Months or More Total December 31, 2025 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Obligations of the U.S. Treasury and U.S. government agencies and corporations $ 5,669 $ ( 18 ) $ 3,017 $ ( 195 ) $ 8,686 $ ( 213 ) Obligations of state and political subdivisions — — 14,330 ( 1,497 ) 14,330 ( 1,497 ) Corporate bonds 3,169 ( 32 ) 14,196 ( 1,303 ) 17,365 ( 1,335 ) Residential mortgage-backed securities 11,982 ( 97 ) 192,175 ( 36,089 ) 204,157 ( 36,186 ) Commercial mortgage-backed securities 9,865 ( 70 ) 41,810 ( 7,113 ) 51,675 ( 7,183 ) Total $ 30,685 $ ( 217 ) $ 265,528 $ ( 46,197 ) $ 296,213 $ ( 46,414 ) Less than 12 Months 12 Months or More Total December 31, 2024 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Obligations of the U.S. Treasury and U.S. government agencies and corporations $ 5,505 $ ( 20 ) $ 4,012 $ ( 305 ) $ 9,517 $ ( 325 ) Obligations of state and political subdivisions 3,434 ( 99 ) 12,686 ( 2,144 ) 16,120 ( 2,243 ) Corporate bonds 1,947 ( 5 ) 24,326 ( 2,508 ) 26,273 ( 2,513 ) Residential mortgage-backed securities 5,432 ( 103 ) 198,803 ( 47,440 ) 204,235 ( 47,543 ) Commercial mortgage-backed securities 9,226 ( 134 ) 42,293 ( 8,912 ) 51,519 ( 9,046 ) Total $ 25,544 $ ( 361 ) $ 282,120 $ ( 61,309 ) $ 307,664 $ ( 61,670 ) At December 31, 2025 , 675 of the Company’s AFS securities had unrealized losses totaling 13.5 % of the individual securities’ amortized cost basis and 11.2 % of the Company’s total amortized cost basis of the AFS investment securities portfolio. At such date, 610 of the 675 securities had been in a continuous loss position for over 12 months. The approximate fair value of HTM securities, and unrealized losses, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, are summarized below as of the dates presented (dollars in thousands). Less than 12 Months 12 Months or More Total December 31, 2025 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Obligations of state and political subdivisions $ — $ — $ 2,060 $ ( 3 ) $ 2,060 $ ( 3 ) Residential mortgage-backed securities — — 1,694 ( 174 ) 1,694 ( 174 ) Total $ — $ — $ 3,754 $ ( 177 ) $ 3,754 $ ( 177 ) Less than 12 Months 12 Months or More Total December 31, 2024 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Obligations of state and political subdivisions $ 10,795 $ ( 209 ) $ 2,458 $ ( 156 ) $ 13,253 $ ( 365 ) Residential mortgage-backed securities — — 1,821 ( 248 ) 1,821 ( 248 ) Total $ 10,795 $ ( 209 ) $ 4,279 $ ( 404 ) $ 15,074 $ ( 613 ) Unrealized losses are generally due to changes in market interest rates. The Company has the intent to hold these securities either until maturity or a forecasted recovery, and it is more likely than not that the Company will not have to sell the securities before the recovery of their amortized cost basis. 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 . 80 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements The amortized cost and approximate fair value of investment debt securities, by contractual maturity, are shown below as of December 31, 2025 (dollars in thousands). Actual maturities may differ from contractual maturities due to mortgage-backed securities whereby borrowers may have the right to call or prepay obligations with or without call or prepayment penalties and certain callable bonds whereby the issuer has the option to call the bonds prior to contractual maturity. Available for Sale Held to Maturity December 31, 2025 Amortized Cost Fair Value Amortized Cost Fair Value Due within one year $ 5,177 $ 5,190 $ — $ — Due after one year through five years 25,310 24,793 2,064 2,061 Due after five years through ten years 30,711 29,415 7,540 7,650 Due after ten years 354,804 311,216 38,595 40,829 Total debt securities $ 416,002 $ 370,614 $ 48,199 $ 50,540 Accrued interest receivable on the Company’s investment securities was $ 2.2 million and $ 1.9 million at December 31, 2025 and December 31, 2024 , respectively, and is included in “ Accrued interest receivable ” on the accompanying consolidated balance sheets. At December 31, 2025 , securities with a carrying value of $ 75.6 million were pledged to secure certain deposits, borrowings, and other liabilities, compared to $ 68.1 million in pledged securities at December 31, 2024 . 81 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES The Company’s loan portfolio consists of the following categories of loans as of the dates presented (dollars in thousands). December 31, 2025 2024 Construction and development $ 147,980 $ 154,553 1-4 Family 376,238 396,815 Multifamily 130,005 84,576 Farmland 4,788 6,977 Commercial real estate 912,268 944,548 Total mortgage loans on real estate 1,571,279 1,587,469 Commercial and industrial 595,263 526,928 Consumer 9,431 10,687 Total loans $ 2,175,973 $ 2,125,084 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. The tables below provide an analysis of the aging of loans as of December 31, 2025 and December 31, 2024 (dollars in thousands). December 31, 2025 Current 30 - 59 Days Past Due 60 - 89 Days Past Due 90 Days or More Past Due Total > 90 Days and Accruing Construction and development $ 147,862 $ 56 $ 19 $ 43 $ 147,980 $ — 1-4 Family 365,725 4,442 1,950 4,121 376,238 — Multifamily 130,005 — — — 130,005 — Farmland 4,788 — — — 4,788 — Commercial real estate 908,687 — 2,032 1,549 912,268 — Total mortgage loans on real estate 1,557,067 4,498 4,001 5,713 1,571,279 — Commercial and industrial 594,886 291 81 5 595,263 2 Consumer 9,388 9 4 30 9,431 — Total loans $ 2,161,341 $ 4,798 $ 4,086 $ 5,748 $ 2,175,973 $ 2 December 31, 2024 Current 30 - 59 Days Past Due 60 - 89 Days Past Due 90 Days or More Past Due Total > 90 Days and Accruing Construction and development $ 154,461 $ 86 $ — $ 6 $ 154,553 $ — 1-4 Family 387,782 5,200 1,054 2,779 396,815 — Multifamily 84,576 — — — 84,576 — Farmland 6,977 — — — 6,977 — Commercial real estate 942,493 458 48 1,549 944,548 — Total mortgage loans on real estate 1,576,289 5,744 1,102 4,334 1,587,469 — Commercial and industrial 526,329 64 270 265 526,928 — Consumer 10,377 87 65 158 10,687 2 Total loans $ 2,112,995 $ 5,895 $ 1,437 $ 4,757 $ 2,125,084 $ 2 82 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements The tables below provide an analysis of nonaccrual loans as of December 31, 2025 and December 31, 2024 (dollars in thousands). December 31, 2025 Nonaccrual with No Allowance for Credit Loss Nonaccrual with an Allowance for Credit Loss Total Nonaccrual Loans Construction and development $ 59 $ — $ 59 1-4 Family 4,122 991 5,113 Multifamily — — — Farmland — — — Commercial real estate 940 2,991 3,931 Total mortgage loans on real estate 5,121 3,982 9,103 Commercial and industrial 84 — 84 Consumer 69 3 72 Total loans $ 5,274 $ 3,985 $ 9,259 December 31, 2024 Nonaccrual with No Allowance for Credit Loss Nonaccrual with an Allowance for Credit Loss Total Nonaccrual Loans Construction and development $ 24 $ — $ 24 1-4 Family 1,475 2,336 3,811 Multifamily — — — Farmland — — — Commercial real estate 4,168 123 4,291 Total mortgage loans on real estate 5,667 2,459 8,126 Commercial and industrial 252 230 482 Consumer 211 5 216 Total loans $ 6,130 $ 2,694 $ 8,824 Nonaccrual and Past Due Loans Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due. 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. 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. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income on nonaccrual loans is recognized only to the extent that cash payments are received in excess of principal due. A loan may be returned to accrual status when all the principal and interest amounts contractually due are brought current and payment of future principal and interest amounts contractually due are reasonably assured, which is typically evidenced by a sustained period (at least six months) of repayment performance by the borrower. No material interest income was recognized in the consolidated statements of income on nonaccrual loans for the years ended December 31, 2025 and 2024 . Collateral Dependent Loans Collateral dependent loans are loans for which the repayments, on the basis of the Company’s assessment at the reporting date, are expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. Loans that do not share risk characteristics are excluded from the loan pools and evaluated on an individual basis, and the Company has determined to evaluate collateral dependent loans individually for impairment. The ACL for collateral dependent loans is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the financial asset exceeds the present value of expected cash flows from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized costs basis of the financial asset exceeds the fair value of the underlying collateral less estimated cost to sell. The Company’s collateral dependent loans include all nonaccrual loans shown in the tables above at December 31, 2025 and 2024 . The types of collateral that secure collateral dependent loans are discussed under “Portfolio Segment Risk Factors” below. 83 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements Portfolio Segment Risk Factors The following describes the risk characteristics relevant to each of the Company’s loan portfolio segments. Construction and Development - Construction and development loans are generally made for the purpose of acquisition and development of land to be improved through the construction of commercial and residential buildings. The successful repayment of these types of loans is generally dependent upon a commitment for permanent financing from the Company, or from the sale of the constructed property. These loans carry more risk than commercial or residential real estate loans due to the dynamics of construction projects, changes in interest rates, the long-term financing market, and state and local government regulations. One such risk is that loan funds are advanced upon the security of the property under construction, which is of uncertain value prior to the completion of construction. Thus, it is more difficult to evaluate accurately the total loan funds required to complete a project and to calculate related loan-to-value ratios. The Company attempts to minimize the risks associated with construction lending by limiting loan-to-value ratios as described above. In addition, as to speculative development loans, the Company generally makes such loans only to borrowers that have a positive pre-existing relationship with us. The Company manages risk by using specific underwriting policies and procedures for these types of loans and by avoiding excessive concentrations in any one business or industry. Construction and development loans are primarily secured by residential and commercial properties, which are under construction and/or redevelopment. 1 - 4 Family - The 1 - 4 family portfolio mainly consists of residential mortgage loans to consumers to finance a primary residence. The majority of these loans are secured by first liens on residential properties located in the Company’s market areas and carry risks associated with the creditworthiness of the borrower and changes in the value of the collateral and loan-to-value-ratios. The Company manages these risks through policies and procedures such as limiting loan-to-value ratios at origination, employing experienced underwriting personnel, requiring standards for appraisers, and not making subprime loans. In the third quarter of 2023, the Company exited the consumer mortgage origination business. Multifamily - Multifamily loans are normally made to real estate investors to support permanent financing for multifamily residential income producing properties that rely on the successful operation of the property for repayment. This management mainly involves property maintenance and collection of rents due from tenants. This type of lending carries a lower level of risk, as compared to other commercial lending. In addition, underwriting requirements for multifamily properties are stricter than for other nonowner-occupied property types. The Company manages this risk by avoiding concentrations with any particular customer. Multifamily loans are primarily secured by first liens on multifamily real estate. Farmland - Farmland loans are often for land improvements related to agricultural endeavors and may include construction of new specialized facilities. These loans are usually repaid through the conversion to permanent financing, or if scheduled loan amortization begins, for the long-term benefit of the borrower’s ongoing operations. Underwriting generally involves intensive analysis of the financial strength of the borrower and guarantor, liquidation value of the subject collateral, the associated unguaranteed exposure, and any available secondary sources of repayment, with the greatest emphasis given to a borrower’s capacity to meet cash flow coverage requirements as set forth by Bank policies. Farmland loans are primarily secured by raw land. Commercial Real Estate - Commercial real estate loans are extensions of credit secured by owner-occupied and nonowner-occupied collateral. Underwriting generally involves intensive analysis of the financial strength of the borrower and guarantor, liquidation value of the subject collateral, the associated unguaranteed exposure, and any available secondary sources of repayment, with the greatest emphasis given to a borrower’s capacity to meet cash flow coverage requirements as set forth by Bank policies. Commercial real estate loans typically depend on the successful operation and management of the businesses that occupy these properties or the financial stability of tenants occupying the properties. Nonowner-occupied commercial real estate loans typically are dependent, in large part, on the owner’s ability to rent the property and the ability of the tenants to pay rent, whereas owner-occupied commercial real estate loans typically are dependent, in large part, on the success of the owner’s business. General market conditions and economic activity may impact the performance of these types of loans, including fluctuations in the value of real estate, new job creation trends, and tenant vacancy rates. The Company attempts to limit risk by analyzing a borrower’s cash flow and collateral value on an ongoing basis. The Company also typically requires personal guarantees from the principal owners of the property, supported by a review of their personal financial statements, as an additional means of mitigating risk. The Company manages risk by avoiding concentrations in any one business or industry. Commercial real estate loans are primarily secured by retail shopping facilities, office and industrial buildings, healthcare facilities, warehouses, and various special purpose commercial properties. Commercial and Industrial - Commercial and industrial loans receive similar underwriting treatment as commercial real estate loans in that the repayment source is analyzed to determine its ability to meet cash flow coverage requirements as set forth by Bank policies. Repayment of these loans generally comes from the generation of cash flow as the result of the borrower’s business operations. Commercial lending generally involves different risks from those associated with commercial real estate lending or construction lending. Although commercial loans may be collateralized by equipment or other business assets (including real estate, if available as collateral), the repayment of these types of loans depends primarily on the creditworthiness and projected cash flow of the borrower (and any guarantors). Thus, the general business conditions of the local economy and the borrower’s ability to sell its products and services, thereby generating sufficient operating revenue to repay us under the agreed upon terms and conditions, are the chief considerations when assessing the risk of a commercial loan. The liquidation of collateral, if any, is considered a secondary source of repayment because equipment and other business assets may, among other things, be obsolete or of limited resale value. The Company actively monitors certain financial measures of the borrower, including advance rate, cash flow, collateral value and other appropriate credit factors. Commercial and industrial loans also include public finance loans made to governmental entities, which can be taxable or tax-exempt, and are generally repaid using pledged revenue sources including income tax, property tax, sales tax, and utility revenue, among other sources. Commercial and industrial loans are primarily secured by accounts receivable, inventory and equipment. Consumer - Consumer loans are offered by the Company in order to provide a full range of retail financial services to its customers and include auto loans, credit cards, and other consumer installment loans. Typically, the Company evaluates the borrower’s repayment ability through a review of credit scores and an evaluation of debt to income ratios. Repayment of consumer loans depends upon key consumer economic measures and upon the borrower’s financial stability and is more likely to be adversely affected by divorce, job loss, illness and personal hardships than repayment of other loans. A shortfall in the value of any collateral also may pose a risk of loss to the Company for these types of loans. Consumer loans include loans primarily secured by vehicles and unsecured loans. Refer to Note 1. Summary of Significant Accounting Policies – Allowance for Credit Losses for loan pools used for modeling purposes, which are aggregated into the portfolio segments shown above. Concentrations of Credit Substantially all of the Company’s loans and commitments have been granted to customers in the Company’s market areas in south Louisiana, southeast Texas and Alabama. The distribution of commitments to extend credit approximates the distribution of loans outstanding. Accordingly, the ultimate collectability of a substantial portion of the loan portfolio is susceptible to changes in market conditions in these areas. 84 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements Credit Quality Indicators Loans are categorized into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The following definitions are utilized for risk ratings, which are consistent with the definitions used in supervisory guidance: Pass - Loans not meeting the criteria below are considered Pass. These loans have high credit characteristics and financial strength. The borrowers at least generate profits and cash flow that are in line with peer and industry standards and have debt service coverage ratios above loan covenants and policy guidelines. For some of these loans, a guaranty from a financially capable party mitigates characteristics of the borrower that might otherwise result in a lower grade. Special Mention - Loans classified as Special Mention possess some credit deficiencies that need to be corrected to avoid a greater risk of default in the future. For example, financial ratios relating to the borrower may have deteriorated. Often, a Special Mention categorization is temporary while certain factors are analyzed or matters addressed before the loan is re-categorized as either Pass or Substandard. Substandard - Loans classified as Substandard are inadequately protected by the current net worth and paying capacity of the borrower or the liquidation value of any collateral. If deficiencies are not addressed, it is likely that this category of loan will result in the Bank incurring a loss. Where a borrower has been unable to adjust to industry or general economic conditions, the borrower’s loan is often categorized as Substandard. Doubtful - Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loss - Loans classified as Loss are considered uncollectible and of such little value that their continuance as recorded assets is not warranted. This classification does not mean that the assets have absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off these assets. 85 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements The tables below present the Company’s loan portfolio by year of origination, category, and credit quality indicator as of December 31, 2025 and December 31, 2024 (dollars in thousands). Loans acquired are shown in the tables by origination year. The Company had an immaterial amount of revolving loans converted to term loans at December 31, 2025 and December 31, 2024 . December 31, 2025 2025 2024 2023 2022 2021 Prior Revolving Loans Total Construction and development Pass $ 55,625 $ 34,770 $ 16,812 $ 7,549 $ 2,729 $ 2,513 $ 17,105 $ 137,103 Special Mention — — — — — — — — Substandard 627 — 4,659 4,822 710 59 — 10,877 Total construction and development $ 56,252 $ 34,770 $ 21,471 $ 12,371 $ 3,439 $ 2,572 $ 17,105 $ 147,980 Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — 1-4 Family Pass $ 11,627 $ 9,164 $ 32,814 $ 86,613 $ 67,255 $ 104,643 $ 57,576 $ 369,692 Special Mention — — — — — — — — Substandard — 58 415 2,405 744 2,703 221 6,546 Total 1-4 family $ 11,627 $ 9,222 $ 33,229 $ 89,018 $ 67,999 $ 107,346 $ 57,797 $ 376,238 Current-period gross charge-offs $ — $ — $ — $ ( 47 ) $ ( 10 ) $ ( 23 ) $ — $ ( 80 ) Multifamily Pass $ 39,307 $ 1,568 $ 22,836 $ 45,255 $ 11,400 $ 5,616 $ — $ 125,982 Special Mention — — — — — 3,853 — 3,853 Substandard — — — — — 170 — 170 Total multifamily $ 39,307 $ 1,568 $ 22,836 $ 45,255 $ 11,400 $ 9,639 $ — $ 130,005 Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Farmland Pass $ 1,147 $ 68 $ 457 $ 109 $ 358 $ 2,163 $ 486 $ 4,788 Special Mention — — — — — — — — Substandard — — — — — — — — Total farmland $ 1,147 $ 68 $ 457 $ 109 $ 358 $ 2,163 $ 486 $ 4,788 Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate Pass $ 129,724 $ 44,915 $ 66,947 $ 266,080 $ 162,367 $ 208,716 $ 7,797 $ 886,546 Special Mention — — — — 1,548 3,840 — 5,388 Substandard 6,032 2,534 121 120 4,359 7,168 — 20,334 Total commercial real estate $ 135,756 $ 47,449 $ 67,068 $ 266,200 $ 168,274 $ 219,724 $ 7,797 $ 912,268 Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial and industrial Pass $ 104,768 $ 14,470 $ 22,265 $ 107,550 $ 17,430 $ 14,734 $ 313,496 $ 594,713 Special Mention 193 — — — — — 273 466 Substandard — — — — — 84 — 84 Total commercial and industrial $ 104,961 $ 14,470 $ 22,265 $ 107,550 $ 17,430 $ 14,818 $ 313,769 $ 595,263 Current-period gross charge-offs $ — $ ( 28 ) $ ( 78 ) $ ( 7 ) $ ( 24 ) $ — $ ( 132 ) $ ( 269 ) Consumer Pass $ 4,331 $ 1,625 $ 1,246 $ 700 $ 205 $ 655 $ 571 $ 9,333 Special Mention — — — — — — — — Substandard 2 1 15 5 — 75 — 98 Total consumer $ 4,333 $ 1,626 $ 1,261 $ 705 $ 205 $ 730 $ 571 $ 9,431 Current-period gross charge-offs $ ( 71 ) $ ( 6 ) $ ( 12 ) $ ( 11 ) $ ( 7 ) $ ( 1 ) $ ( 2 ) $ ( 110 ) Total loans Pass $ 346,529 $ 106,580 $ 163,377 $ 513,856 $ 261,744 $ 339,040 $ 397,031 $ 2,128,157 Special Mention 193 — — — 1,548 7,693 273 9,707 Substandard 6,661 2,593 5,210 7,352 5,813 10,259 221 38,109 Total loans $ 353,383 $ 109,173 $ 168,587 $ 521,208 $ 269,105 $ 356,992 $ 397,525 $ 2,175,973 Current-period gross charge-offs $ ( 71 ) $ ( 34 ) $ ( 90 ) $ ( 65 ) $ ( 41 ) $ ( 24 ) $ ( 134 ) $ ( 459 ) 86 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements December 31, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Total Construction and development Pass $ 53,448 $ 36,560 $ 26,585 $ 3,583 $ 2,176 $ 1,754 $ 19,946 $ 144,052 Special Mention — 374 — 737 — — — 1,111 Substandard — 4,524 4,842 — 18 6 — 9,390 Total construction and development $ 53,448 $ 41,458 $ 31,427 $ 4,320 $ 2,194 $ 1,760 $ 19,946 $ 154,553 Current-period gross charge-offs $ — $ — $ ( 77 ) $ ( 72 ) $ — $ — $ — $ ( 149 ) 1-4 Family Pass $ 12,039 $ 38,426 $ 92,502 $ 72,848 $ 53,300 $ 70,854 $ 51,424 $ 391,393 Special Mention 61 — — — — 2 — 63 Substandard 170 352 902 931 752 2,079 173 5,359 Total 1-4 family $ 12,270 $ 38,778 $ 93,404 $ 73,779 $ 54,052 $ 72,935 $ 51,597 $ 396,815 Current-period gross charge-offs $ ( 86 ) $ — $ ( 42 ) $ — $ — $ ( 120 ) $ — $ ( 248 ) Multifamily Pass $ 1,639 $ 7,538 $ 47,070 $ 11,994 $ 3,400 $ 6,796 $ 199 $ 78,636 Special Mention — — — — — 3,940 — 3,940 Substandard — — 649 — 1,351 — — 2,000 Total multifamily $ 1,639 $ 7,538 $ 47,719 $ 11,994 $ 4,751 $ 10,736 $ 199 $ 84,576 Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Farmland Pass $ 72 $ 1,605 $ 1,290 $ 633 $ 892 $ 1,508 $ 977 $ 6,977 Special Mention — — — — — — — — Substandard — — — — — — — — Total farmland $ 72 $ 1,605 $ 1,290 $ 633 $ 892 $ 1,508 $ 977 $ 6,977 Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate Pass $ 51,071 $ 77,895 $ 293,519 $ 202,461 $ 159,968 $ 134,164 $ 7,993 $ 927,071 Special Mention — 251 — 1,662 162 157 — 2,232 Substandard 3,178 648 1,321 3,986 2,901 3,094 117 15,245 Total commercial real estate $ 54,249 $ 78,794 $ 294,840 $ 208,109 $ 163,031 $ 137,415 $ 8,110 $ 944,548 Current-period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial and industrial Pass $ 45,894 $ 38,599 $ 120,877 $ 24,351 $ 7,612 $ 15,842 $ 272,853 $ 526,028 Special Mention — — — — — — 418 418 Substandard 23 — 6 24 — 235 194 482 Total commercial and industrial $ 45,917 $ 38,599 $ 120,883 $ 24,375 $ 7,612 $ 16,077 $ 273,465 $ 526,928 Current-period gross charge-offs $ — $ — $ ( 18 ) $ — $ — $ — $ ( 812 ) $ ( 830 ) Consumer Pass $ 4,043 $ 2,602 $ 1,307 $ 824 $ 200 $ 821 $ 645 $ 10,442 Special Mention — — — — — — — — Substandard — 144 6 — 12 83 — 245 Total consumer $ 4,043 $ 2,746 $ 1,313 $ 824 $ 212 $ 904 $ 645 $ 10,687 Current-period gross charge-offs $ ( 87 ) $ ( 6 ) $ ( 7 ) $ ( 2 ) $ — $ ( 25 ) $ ( 8 ) $ ( 135 ) Total loans Pass $ 168,206 $ 203,225 $ 583,150 $ 316,694 $ 227,548 $ 231,739 $ 354,037 $ 2,084,599 Special Mention 61 625 — 2,399 162 4,099 418 7,764 Substandard 3,371 5,668 7,726 4,941 5,034 5,497 484 32,721 Total loans $ 171,638 $ 209,518 $ 590,876 $ 324,034 $ 232,744 $ 241,335 $ 354,939 $ 2,125,084 Current-period gross charge-offs $ ( 173 ) $ ( 6 ) $ ( 144 ) $ ( 74 ) $ — $ ( 145 ) $ ( 820 ) $ ( 1,362 ) The Company had no loans that were classified as Doubtful or Loss at December 31, 2025 or December 31, 2024 . 87 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements Loan Participations and Sold Loans 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 In the ordinary course of business, the Company makes loans to related parties including its executive officers, directors and their immediate family members, as well as to companies in which these individuals are principal owners. Loans outstanding to such related party borrowers amounted to approximately $ 34.7 million and $ 43.6 million as of December 31, 2025 and December 31, 2024 , respectively. No related party loans were classified as nonperforming or nonaccrual at December 31, 2025 or December 31, 2024 . The table below shows the aggregate principal balance of loans to such related parties for the years ended December 31, 2025 and 2024 (dollars in thousands). December 31, 2025 2024 Balance, beginning of period $ 43,647 $ 46,000 New loans/changes in relationship 231 620 Repayments/changes in relationship ( 9,129 ) ( 2,973 ) Balance, end of period $ 34,749 $ 43,647 88 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements Allowance for Credit Losses The Company made the accounting policy election to exclude accrued interest receivable from the amortized cost of loans and the estimate of the ACL. Accrued interest receivable on the Company’s loans was $ 12.1 million and $ 12.5 million at December 31, 2025 and December 31, 2024 , respectively, and is included in “ Accrued interest receivable ” on the accompanying consolidated balance sheets. The table below shows a summary of the activity in the ACL for the years ended December 31, 2025, 2024 and 2023 (dollars in thousands). December 31, 2025 2024 2023 Balance, beginning of period $ 26,721 $ 30,540 $ 24,364 ASC 326 adoption impact (1) — — 5,865 Reversal of credit losses on loans (2) ( 3,774 ) ( 3,191 ) ( 1,964 ) Charge-offs ( 459 ) ( 1,362 ) ( 742 ) Recoveries 3,861 734 3,017 Balance, end of period $ 26,349 $ 26,721 $ 30,540 ( 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). December 31, 2025 Construction & Development 1-4 Family Multifamily Farmland Commercial Real Estate Commercial & Industrial Consumer Total Allowance for credit losses: Beginning balance $ 1,145 $ 5,603 $ 1,185 $ 8 $ 11,759 $ 6,933 $ 88 $ 26,721 Provision for (reversal of) credit losses on loans 176 429 629 ( 3 ) ( 3,692 ) ( 1,381 ) 68 ( 3,774 ) Charge-offs — ( 80 ) — — — ( 269 ) ( 110 ) ( 459 ) Recoveries 6 101 — 1 3,321 397 35 3,861 Ending balance $ 1,327 $ 6,053 $ 1,814 $ 6 $ 11,388 $ 5,680 $ 81 $ 26,349 Ending allowance balance for loans individually evaluated for impairment — 114 — — 247 — 3 364 Ending allowance balance for loans collectively evaluated for impairment 1,327 5,939 1,814 6 11,141 5,680 78 25,985 Loans receivable: Balance of loans individually evaluated for impairment 59 5,113 — — 3,931 84 72 9,259 Balance of loans collectively evaluated for impairment 147,921 371,125 130,005 4,788 908,337 595,179 9,359 2,166,714 Total period-end balance $ 147,980 $ 376,238 $ 130,005 $ 4,788 $ 912,268 $ 595,263 $ 9,431 $ 2,175,973 89 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements December 31, 2024 Construction & Development 1-4 Family Multifamily Farmland Commercial Real Estate Commercial & Industrial Consumer Total Allowance for credit losses: Beginning balance $ 2,471 $ 9,129 $ 1,124 $ 2 $ 10,691 $ 6,920 $ 203 $ 30,540 Provision for (reversal of) credit losses on loans ( 1,617 ) ( 3,291 ) 61 ( 30 ) 1,068 628 ( 10 ) ( 3,191 ) Charge-offs ( 149 ) ( 248 ) — — — ( 830 ) ( 135 ) ( 1,362 ) Recoveries 440 13 — 36 — 215 30 734 Ending balance $ 1,145 $ 5,603 $ 1,185 $ 8 $ 11,759 $ 6,933 $ 88 $ 26,721 Ending allowance balance for loans individually evaluated for impairment — 269 — — — 89 3 361 Ending allowance balance for loans collectively evaluated for impairment 1,145 5,334 1,185 8 11,759 6,844 85 26,360 Loans receivable: Balance of loans individually evaluated for impairment 24 3,811 — — 4,291 482 216 8,824 Balance of loans collectively evaluated for impairment 154,529 393,004 84,576 6,977 940,257 526,446 10,471 2,116,260 Total period-end balance $ 154,553 $ 396,815 $ 84,576 $ 6,977 $ 944,548 $ 526,928 $ 10,687 $ 2,125,084 December 31, 2023 Construction & Development 1-4 Family Multifamily Farmland Commercial Real Estate Commercial & Industrial Consumer Total Allowance for credit losses: Beginning balance $ 2,555 $ 3,917 $ 999 $ 113 $ 10,718 $ 5,743 $ 319 $ 24,364 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 ) Charge-offs — ( 46 ) — — ( 27 ) ( 421 ) ( 248 ) ( 742 ) Recoveries 75 22 — — 2,246 592 82 3,017 Ending balance $ 2,471 $ 9,129 $ 1,124 $ 2 $ 10,691 $ 6,920 $ 203 $ 30,540 Ending allowance balance for loans individually evaluated for impairment 212 187 — — — 114 25 538 Ending allowance balance for loans collectively evaluated for impairment 2,259 8,942 1,124 2 10,691 6,806 178 30,002 Loans receivable: Balance of loans individually evaluated for impairment 789 4,178 — — 216 468 119 5,770 Balance of loans collectively evaluated for impairment 189,582 409,608 105,946 7,651 937,492 542,953 11,617 2,204,849 Total period-end balance $ 190,371 $ 413,786 $ 105,946 $ 7,651 $ 937,708 $ 543,421 $ 11,736 $ 2,210,619 Loan Modifications to Borrowers Experiencing Financial Difficulty Occasionally, the Company modifies loans to borrowers in financial distress by providing certain concessions, such as principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, a term extension, or a combination of such concessions. Modifications that do not impact the contractual payments terms, such as covenant waivers, modification of a contingent acceleration clauses, and insignificant payment delays are not included in the disclosures. When principal forgiveness is provided, the amount of forgiveness is charged off against the ACL. Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is written off. During the 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. 90 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements NOTE 4. OTHER REAL ESTATE OWNED The table below shows the activity in other real estate owned for the years ended December 31, 2025 and 2024 (dollars in thousands). Year ended Year ended December 31, 2025 December 31, 2024 Balance, beginning of period $ 5,218 $ 4,438 Additions 1,687 1,975 Transfers from bank premises and equipment — 424 Sales of other real estate owned ( 3,097 ) ( 1,386 ) Write-downs ( 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. During the year ended December 31, 2024 , the Company transferred one piece of land that was previously being held for a future branch location 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 property for banking operations. 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. 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, 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 . 91 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements NOTE 5. BANK PREMISES AND EQUIPMENT Bank premises and equipment consisted of the following as of the dates indicated (dollars in thousands). December 31, 2025 2024 Land $ 9,626 $ 9,626 Buildings and improvements 38,823 38,425 Furniture and equipment 10,915 10,615 Software 1,824 1,813 Construction-in-progress 411 41 ROU assets 1,771 2,038 Less: accumulated depreciation and amortization ( 23,836 ) ( 21,853 ) Bank premises and equipment, net $ 39,534 $ 40,705 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. 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. 92 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements NOTE 6. LEASES The Company’s primary leasing activities relate to certain real estate leases entered into in support of the Company’s branch operations. The Company’s lease agreements under which its branch locations are operated have all been designated as operating leases. The Company does not lease equipment under operating leases, nor does it have leases designated as finance leases. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which the Company has elected to account for separately, as the non-lease component amounts are readily determinable. Quantitative information regarding the Company’s operating leases is presented below as of and for the years ended December 31, 2025 and 2024 (dollars in thousands). December 31, 2025 2024 Total operating lease cost (1) $ 449 $ 449 Weighted average remaining lease term (in years) 4.7 5.8 Weighted average discount rate 3.4 % 3.3 % ( 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 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). 2026 $ 459 2027 459 2028 405 2029 337 2030 223 Thereafter 127 Total lease payments 2,010 Less: imputed interest ( 154 ) Total lease obligations $ 1,856 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. All tenant leases are operating leases. 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. Upon the completion of the sale, the Bank recorded $ 0.3 million of occupancy expense to terminate the remaining contractually obligated lease payments due under non-cancelable operating leases. 93 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements NOTE 7. GOODWILL AND OTHER INTANGIBLE ASSETS The Company’s intangible assets consist of goodwill, core deposit intangible assets arising from acquisitions, and a trademark intangible. At December 31, 2025 and 2024 , “Goodwill and other intangible assets, net ” in the accompanying consolidated balance sheets totaled $ 41.2 million and $ 41.7 million, respectively, and included no accumulated impairment losses. The carrying amount of goodwill at December 31, 2025 and 2024 was $ 40.1 million. The trademark intangible had a carrying value of $ 0.1 million at December 31, 2025 and 2024 . 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. Core deposit intangibles have finite lives and are being amortized on an accelerated basis over their estimated useful lives, which range from 10 to 15 years. The table below shows a summary of the core deposit intangible assets as of the dates presented (dollars in thousands). December 31, 2025 2024 Gross carrying amount $ 7,486 $ 7,486 Accumulated amortization ( 6,490 ) ( 5,978 ) Net carrying amount $ 996 $ 1,508 Amortization expense for the core deposit intangible assets recorded in “Depreciation and amortization ” in the accompanying consolidated statements of income totaled approximately $ 0.5 million, $ 0.6 million, and $ 0.8 million for the years ended December 31, 2025, 2024 and 2023 , respectively. The estimated remaining amortization expense for the Company’s core deposit intangible assets is displayed in the table below (dollars in thousands). The weighted average amortization period remaining for core deposit intangibles is 3.8 years. 2026 $ 398 2027 278 2028 161 2029 85 2030 59 Thereafter 15 $ 996 94 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements NOTE 8. DEPOSITS Deposits consisted of the following as of the dates presented (dollars in thousands). December 31, 2025 2024 Noninterest-bearing demand deposits $ 445,986 $ 432,143 Interest-bearing demand deposits 608,807 554,777 Money market deposits 255,500 191,548 Brokered demand deposits 2 47,320 Savings deposits 136,124 134,879 Brokered time deposits 204,069 245,520 Time deposits 699,761 739,757 Total deposits $ 2,350,249 $ 2,345,944 The approximate scheduled maturities of time deposits, including brokered time deposits, for each of the next five years are shown below (dollars in thousands). 2026 $ 852,490 2027 26,229 2028 16,859 2029 2,306 2030 5,946 $ 903,830 The aggregate amount of time deposits in denominations of $250,000 or more at December 31, 2025 and 2024 was approximately $ 166.8 million and $ 192.1 million, respectively. 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, 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. NOTE 9. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE The Company utilizes securities sold under agreements to repurchase to facilitate the needs of customers and to facilitate secured short-term funding needs. Repurchase agreements are stated at the amount of cash received in connection with the transaction. The Company monitors collateral levels on a continuous basis and may be required to provide additional collateral based on the fair value of the underlying securities. Securities pledged as collateral under repurchase agreements are maintained with the Company’s safekeeping agents. Repurchase agreements mature on a daily basis. The total balance of repurchase agreements was $ 11.2 million and $ 8.4 million at December 31, 2025 and December 31, 2024 , respectively. 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 % 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. 95 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements NOTE 10. SUBORDINATED DEBT SECURITIES On April 6, 2022, the Company entered into a Subordinated Note Purchase Agreement with certain institutional accredited investors and qualified institutional buyers (the “Purchasers”) under which the Company issued $ 20.0 million in aggregate principal amount of its 2032 Notes to the Purchasers at a price equal to 100% of the aggregate principal amount of the 2032 Notes. The 2032 Notes were issued under an indenture, dated April 6, 2022 ( the “Indenture”), by and among the Company and UMB Bank, National Association, as trustee. 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 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. The 2032 Notes may be redeemed, in whole or in part, on or after April 15, 2027 or, in whole but not in part, under certain other limited circumstances set forth in the Indenture. Any redemption the Company made would be at a redemption price equal to 100% of the principal balance being redeemed, together with any accrued and unpaid interest to the date of redemption. Principal and interest on the 2032 Notes are subject to acceleration only in limited circumstances in the case of certain bankruptcy and insolvency-related events. The 2032 Notes are the unsecured, subordinated obligations of the Company and rank junior in right of payment to current and future senior indebtedness and to obligations to its general creditors. The 2032 Notes are intended to qualify as Tier 2 capital for regulatory purposes. During the year ended December 31, 2024, the Company repurchased $ 3.0 million in principal amount of the 2032 Notes. On November 12, 2019, the Company issued and sold $ 25.0 million in aggregate principal amount of its 2029 Notes due December 30, 2029. Beginning on December 30, 2024, the Company could redeem the 2029 Notes, in whole or in part, at their principal amount plus any accrued and unpaid interest. The 2029 Notes bore an interest rate of 5.125 % per annum until December 30, 2024, on which date the interest rate would reset quarterly to an annual interest rate equal to the then-current three -month LIBOR as calculated on each applicable date of determination, or an alternative rate determined in accordance with the terms of the 2029 Notes if the three -month LIBOR could not be determined, plus 349.0 basis points. 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. 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. 96 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements NOTE 11. OTHER BORROWED FUNDS Federal Home Loan Bank Advances FHLB advances and weighted average interest rates at the end of the period by contractual maturity are summarized as of the dates presented (dollars in thousands). Amount Weighted Average Rate December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Fixed rate advances maturing: 2025 $ — $ 7,215 — % 4.75 % 2026 96,000 60,000 3.87 3.92 2028 20,000 — 3.64 — $ 116,000 $ 67,215 3.83 % 4.01 % As of December 31, 2025 , these advances are collateralized by a blanket pledge of certain loans totaling approximately $ 934.5 million. As of December 31, 2025 , the Company had an additional $ 651.5 million in unused borrowing capacity with the FHLB. Borrowings Under Bank Term Funding Program On March 12, 2023, the Federal Reserve established the BTFP. 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, 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. Lines of Credit The Company has outstanding unsecured lines of credit with its correspondent banks available to assist in the management of short-term liquidity. Any balances drawn on these lines of credit mature daily. At December 31, 2025 and 2024 , the available balance on the unsecured lines of credit totaled approximately $ 60.0 million, with no outstanding balance reflected on the consolidated balance sheets. Junior Subordinated Debt The following table provides a summary of the Company’s junior subordinated debentures (dollars in thousands). Face Value Carrying Value Maturity Date Variable Interest Rate Interest Rate at December 31, 2025 BOJ Bancshares Statutory Trust I $ 3,093 $ 2,611 December 2034 3-month SOFR + Spread Adjustment of 0.26% + Margin of 1.90% 5.88 % Cheaha Statutory Trust I 3,093 2,610 September 2035 3-month SOFR + Spread Adjustment of 0.26% + Margin of 1.70% 5.68 First Community Louisiana Statutory Trust I 3,609 3,609 June 2036 3-month SOFR + Spread Adjustment of 0.26% + Margin of 1.77% 5.75 $ 9,795 $ 8,830 These debentures are unsecured obligations due to trusts that are unconsolidated subsidiaries. The debentures were issued in conjunction with the trusts’ issuances of obligated capital securities. The trusts used the proceeds from the issuances of their capital securities to buy floating rate junior subordinated deferrable interest debentures that bear the same interest rate and terms as the capital securities. These debentures are the trusts’ only assets and the interest payments from the debentures finance the distributions paid on the capital securities. These debentures rank junior and are subordinate in the right of payment to all other debt of the Company. As part of the purchase accounting adjustments made with the BOJ Bancshares Inc. acquisition on December 1, 2017, and with the Cheaha Financial Group, Inc. acquisition on April 1, 2021, the Company adjusted the carrying value of the junior subordinated debentures to fair value as of the respective acquisition date. The discounts on the debentures will continue to be amortized through maturity and recognized as a component of interest expense. The debentures may be called by the Company at par plus any accrued interest. Interest on the debentures is calculated quarterly. The distribution rate payable on the capital securities is cumulative and payable quarterly in arrears. The Company has the right to defer payments of interest on the debentures at any time by extending the interest payment period for a period not exceeding 20 consecutive quarters with respect to each deferral period, provided that no extension period may extend beyond the redemption or maturity date of the debentures. The debentures are included on the consolidated balance sheets as liabilities; however, for regulatory purposes, the carrying values of these obligations are eligible for inclusion in Tier I regulatory capital, subject to certain limitations. The total carrying values of $ 8.8 million and $ 8.7 million were allowed in the calculation of Tier I regulatory capital at December 31, 2025 and 2024 , respectively. 97 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements NOTE 12. DERIVATIVE FINANCIAL INSTRUMENTS As part of its liability management, the Company has historically utilized pay-fixed interest rate swaps to manage exposure against the variability in the expected future cash flows (future interest payments) attributable to changes in the 1 -month SOFR associated with the forecasted issuances of 1 -month fixed rate debt arising from a rollover strategy. To mitigate credit risk, securities were pledged to the Company by the counterparties in an amount greater than or equal to the gain position of the derivative contracts. Conversely, securities were pledged to the counterparties by the Company in an amount greater than or equal to the loss position of the derivative contracts, if applicable. There were no assets or liabilities recorded in the accompanying consolidated balance sheets at December 31, 2025 or December 31, 2024 associated with the swap contracts, other than interest rate swaps related to customer loans, described below. Customer Derivatives – Interest Rate Swaps The Company enters into interest rate swaps that allow commercial loan customers to effectively convert a variable-rate commercial loan agreement to a fixed-rate commercial loan agreement. 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 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. ” 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 . The table below presents the notional amounts and fair values of the Company's derivative financial instruments as well as their classification on the accompanying consolidated balance sheets at December 31, 2025 and December 31, 2024 (dollars in thousands). Fair Value Notional (1) Derivative Assets (2) Derivative Liabilities (2) December 31, 2025 Interest rate swaps $ 361,564 $ 11,660 $ 11,660 December 31, 2024 Interest rate swaps $ 373,845 $ 17,195 $ 17,195 ( 1 ) At December 31, 2025 the Company had notional amounts of $ 180.8 million in interest rate swap contracts with customers and $ 180.8 million in offsetting interest rate swap contracts with other financial institutions. At December 31, 2024 the Company had notional amounts of $ 186.9 million in interest rate swap contracts with customers and $ 186.9 million in offsetting interest rate swap contracts with other financial institutions. ( 2 ) Derivative assets and liabilities are reported at fair value in “Other assets” and “Accrued taxes and other liabilities,” respectively, in the accompanying consolidated balance sheets. 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) Net Amount December 31, 2025 Financial assets: Interest rate swaps $ 11,660 $ — $ 11,660 $ — $ ( 8,729 ) $ 2,931 Total $ 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 ) — — Total $ 22,843 $ — $ 22,843 $ ( 11,183 ) $ — $ 11,660 December 31, 2024 Financial assets: Interest rate swaps $ 17,195 $ — $ 17,195 $ — $ ( 15,445 ) $ 1,750 Total $ 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 ) — — Total $ 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. 98 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements NOTE 13. STOCKHOLDERS’ EQUITY 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. 99 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements Common Stock 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. In addition, the Company repurchased 114,249 , 18,621 , and 222,448 shares of its common stock through its stock repurchase program at an average price of $ 19.84 , $ 16.13 , and $ 13.47 per share during the years ended December 31, 2025, 2024 and 2023 , respectively. Dividend Restrictions. In the ordinary course of business, the Company is dependent upon dividends from the Bank to provide funds for the payment of dividends to shareholders and to provide for other cash requirements. Banking regulations may limit the amount of dividends that may be paid to the Company. Approval by regulatory authorities is required if the effect of the dividend would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared exceed the net profits for that year combined with the retained net profits for the preceding two years. 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. In the event that the Company elects to defer interest on the debentures, it may not, with certain exceptions, declare or pay any dividends or distributions on its common stock or purchase or acquire any of its common stock. 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 on common stock 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 table below (dollars in thousands). AFS Securities Balance, December 31, 2022 $ ( 48,913 ) Change in unrealized gain, net 3,510 Reclassification of realized loss, net 256 Balance, December 31, 2023 ( 45,147 ) Change in unrealized loss, net ( 3,805 ) Reclassification of realized loss, net 595 Balance, December 31, 2024 ( 48,357 ) Change in unrealized gain, net 12,650 Reclassification of realized gain, net ( 15 ) Balance, December 31, 2025 $ ( 35,722 ) 100 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements NOTE 14. STOCK-BASED COMPENSATION Equity Incentive Plan. The Company’s Amended and Restated 2017 Long-Term Incentive Compensation Plan (the “Plan”) authorizes the grant of various types of equity awards, such as restricted stock, RSUs, stock options and stock appreciation rights to eligible participants, which include all of the Company’s employees, non-employee directors, and consultants. The Plan has reserved a total of 1,200,000 shares of common stock, 600,000 of which were authorized in 2021, for issuance to eligible participants pursuant to equity awards under the Plan. The Plan is administered by the Compensation Committee of the Board, which has the authority to designate participants in the Plan, grant awards and determine the terms and conditions thereof. The Compensation Committee, in its discretion, may delegate its authority and duties under the Plan to specified officers; however, only the Compensation Committee may approve the terms of equity awards to the Company’s executive officers and directors. At December 31, 2025 , approximately 213,526 shares remain available for grant. Stock Options 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. Shares Weighted Average Price Weighted Average Remaining Contractual Term (Years) Outstanding at December 31, 2022 350,430 $ 17.89 4.19 Granted 34,497 13.96 Forfeited ( 50,822 ) 19.47 Exercised ( 7,500 ) 14.00 Outstanding at December 31, 2023 326,605 17.32 3.84 Granted 29,997 16.35 Exercised ( 96,000 ) 14.16 Outstanding at December 31, 2024 260,602 18.37 4.78 Exercised ( 34,000 ) 15.74 Outstanding at December 31, 2025 226,602 18.77 4.46 Exercisable at December 31, 2025 168,786 $ 19.64 3.46 The aggregate intrinsic value of stock options is calculated as the aggregate difference between the exercise price of the stock options and the fair market value of the Company’s common stock for those stock options having an exercise price lower than the fair market value of the Company’s common stock. At December 31, 2025 , the shares underlying outstanding and exercisable stock options had intrinsic values of $ 1.8 million and $ 1.2 million, respectively. The Company uses a Black-Scholes option pricing model to estimate the fair value of stock options. The Black-Scholes option pricing model incorporates various subjective assumptions, including expected term and expected volatility. Expected volatility was determined based on the historical volatilities of the Company’s stock price. 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. The table below shows the assumptions used for the stock options granted during the years ended December 31, 2024 and 2023. 2024 2023 Dividend yield 2.45 % 2.72 % Expected volatility 40.80 % 38.31 % Risk-free interest rate 4.29 % 3.56 % Expected term (in years) 6.5 6.5 Weighted average grant date fair value $ 6.04 $ 4.58 101 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements Restricted Stock Units The Company grants time-vested RSUs to its non-employee directors and certain officers, with vesting terms ranging from two years to five years. RSUs represent the right to receive shares of the Company’s common stock in the future upon vesting of the award. 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, through the end of 2024, two years for non-employee directors. Beginning on January 1, 2025, grants of RSUs to non-employee directors generally vest over a 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 . 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 . Of the RSUs granted in 2024 , 90,574 shares vest over five years and 21,218 shares vest over two years. The Company granted a total of 172,736 RSUs to employees and directors for the year ended December 31, 2023 . 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 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, 2025, 2024 and 2023 . December 31, 2025 2024 2023 Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Balance, beginning of period 323,820 $ 16.65 336,749 $ 17.37 253,488 $ 20.19 Granted 135,220 17.80 111,792 16.41 172,736 14.82 Forfeited ( 13,689 ) 16.55 ( 26,788 ) 17.05 ( 7,008 ) 20.53 Earned and issued ( 107,616 ) 17.61 ( 97,933 ) 18.76 ( 82,467 ) 20.42 Balance, end of period 337,735 $ 16.81 323,820 $ 16.65 336,749 $ 17.37 102 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements NOTE 15. EMPLOYEE BENEFITS Insurance 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 The Company maintains a 401 (k) defined contribution plan (the “401 (k) Plan”), which covers employees over the age of 21 who have completed three months of credited service, as defined by the 401 (k) Plan. The 401 (k) Plan allows employees to defer a percentage of their salaries subject to certain limits based on federal tax laws. The Company makes matching contributions up to 4 % of the employee’s annual salary (subject to certain maximum compensation amounts as prescribed in Internal Revenue Service guidance). Contributions by the Company and participants are immediately vested. Employer matching contributions to the 401 (k) Plan for each of the years ended December 31, 2025, 2024 and 2023 were approximately $ 1.1 million, $ 1.1 million and $ 1.0 million, respectively, and are included in “Salaries and employee benefits” in the accompanying consolidated statements of income. The 401 (k) Plan also allows for discretionary Company contributions in the form of cash or Company stock. 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 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). Deferred Compensation The Bank has entered into SCAs with certain officers of the Company. The SCAs represent unfunded, non-qualified deferred compensation arrangements under the Internal Revenue Code of 1986, as amended. The SCAs between the Bank and each officer, as supplemented if applicable, provide that the officer shall receive annual payments of a fixed amount upon attaining the age of 65, with such payments payable monthly over a period of 120 months ( 10 years). Each officer is also entitled to certain reduced payments following a termination of employment prior to attaining age 65 (other than a termination due to death or with cause), which payments shall be made on the same schedule mentioned above. The Company maintains a deferred compensation plan for a former employee of Citizens Bank, a liability assumed in the Citizens Bank acquisition in 2017. Under the deferred compensation agreement, the former employee will receive monthly payments of $ 2,000 through May of 2030. The Company also maintains a deferred compensation plan for certain former employees of Cheaha, and associated liabilities of $ 1.7 million were assumed in the acquisition on April 1, 2021. The deferred compensation plan provides for payments for a period of 15 years following specified retirement dates, which range from 2018 through 2032. 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. Deferred compensation expenses related to these plans recognized for the years ended December 31, 2025, 2024 and 2023 were approximately $ 0.3 million, $ 0.5 million and $ 0.2 million, respectively, and are included in “Salaries and employee benefits” in the accompanying consolidated statements of income. NOTE 16. INCOME TAXES Income tax expense is displayed in the table below for the years ended December 31, 2025, 2024 and 2023 (dollars in thousands). December 31, 2025 2024 2023 Current federal income tax expense $ 5,071 $ 3,352 $ 3,971 Current state income tax expense 260 143 129 Deferred federal income tax expense ( 349 ) 659 ( 350 ) Total income tax expense $ 4,982 $ 4,154 $ 3,750 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). December 31, 2025 2024 2023 Amount Percent Amount Percent Amount Percent Federal income tax based on statutory rate $ 5,856 21.0 % $ 5,125 21.0 % $ 4,290 21.0 % 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 ) BOLI impact ( 417 ) ( 1.5 ) ( 741 ) ( 3.1 ) ( 297 ) ( 1.4 ) Other 137 0.5 188 0.8 88 0.4 Other ( 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. 103 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements The net deferred tax asset was comprised of the following items as of the dates indicated (dollars in thousands). December 31, 2025 2024 Deferred tax liabilities: Depreciation $ ( 2,565 ) $ ( 2,674 ) FHLB stock dividend ( 120 ) ( 90 ) Basis difference in acquired assets and liabilities ( 988 ) ( 1,029 ) Operating lease ROU asset ( 372 ) ( 428 ) Other ( 158 ) ( 94 ) Gross deferred tax liability ( 4,203 ) ( 4,315 ) Deferred tax assets: Allowance for credit losses 5,623 5,620 Unrealized loss on AFS securities 9,666 13,085 Deferred compensation 1,145 1,169 Basis difference in acquired assets and liabilities 196 201 Employee and director stock awards 525 534 Operating lease liability 390 448 Unearned loan fees 333 208 Other 375 170 Gross deferred tax asset 18,253 21,435 Net deferred tax asset $ 14,050 $ 17,120 The Company files income tax returns under U.S. federal jurisdiction and the states of Alabama, Florida, Texas and Louisiana, although the state of Louisiana does not assess an income tax on income resulting from banking operations. The Company is open to examination in the U.S. and the states of Louisiana, Alabama, and Florida for tax years ended December 31, 2022 through December 31, 2025 ; and Texas for tax years ended December 31, 2021 through December 31, 2025 . 104 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements NOTE 17. FAIR VALUES OF FINANCIAL INSTRUMENTS The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. Fair value is best determined based upon quoted market prices or exit prices. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows, and the fair value estimates may not be realized in an immediate settlement of the instruments. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions. The Company holds SBIC qualified funds and other investment funds that do not have a readily determinable fair value. These investments are measured at fair value using the net asset value practical expedient and are not required to be classified in the fair value hierarchy. At December 31, 2025 and December 31, 2024 , the fair values of these investments we r e $ 3.5 million and $ 3.8 million , respectively, and are included in “Other assets” in the accompanying consolidated balance sheets. Fair Value Hierarchy 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. 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. Fair Value of Assets and Liabilities Measured on a Recurring Basis The following methods and assumptions were used by the Company in estimating the fair value of assets and liabilities valued on a recurring basis: AFS Investment Securities and Marketable Equity Securities – Where quoted prices are available in an active market, the Company classifies the securities within level 1 of the valuation hierarchy. Securities are defined as both long and short positions. Level 1 securities include marketable equity securities in corporate stocks and mutual funds. If quoted market prices are not available, the Company estimates fair values using pricing models and discounted cash flows that consider standard input factors such as observable market data, benchmark yields, interest rate volatilities, broker/dealer quotes, and credit spreads. Examples of such instruments, which would generally be classified within level 2 of the valuation hierarchy if observable inputs are available, include obligations of the U.S. Treasury and U.S. government agencies and corporations, obligations of state and political subdivisions, corporate bonds, residential mortgage-backed securities, and commercial mortgage-backed securities. In certain cases where there is limited activity or less transparency around inputs to the valuation, the Company classifies those securities in level 3. Management monitors the current placement of securities in the fair value hierarchy to determine whether transfers between levels may be warranted based on market reference data, which may include reported trades; bids, offers or broker/dealer quotes; benchmark yields and spreads; as well as other reference data. At December 31, 2025 and December 31, 2024 , the majority of the Company’s level 3 investments were obligations of state and political subdivisions. The Company estimated the fair value of these level 3 investments using discounted cash flow models, the key inputs of which are the coupon rate, current spreads to the yield curves, and expected repayment dates, adjusted for illiquidity of the local municipal market and sinking funds, if applicable. Option-adjusted models may be used for structured or callable notes, as appropriate. Derivative Financial Instruments – The fair value for interest rate swap agreements is based upon the expected future cash flows of the agreements discounted at market rates. These derivative instruments are classified in level 2 of the fair value hierarchy. 105 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements Assets and liabilities measured at fair value on a recurring basis are summarized in the table below as of the dates indicated (dollars in thousands). Quoted Prices in Significant Active Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) December 31, 2025 Assets: Obligations of the U.S. Treasury and U.S. government agencies and corporations $ 18,751 $ — $ 18,751 $ — Obligations of state and political subdivisions 16,282 — 12,678 3,604 Corporate bonds 24,682 — 24,682 — Residential mortgage-backed securities 247,379 — 247,379 — Commercial mortgage-backed securities 63,520 — 63,520 — Equity securities at fair value 3,354 3,354 — — Interest rate swaps - gross assets 11,660 — 11,660 — Total assets $ 385,628 $ 3,354 $ 378,670 $ 3,604 Liabilities: Interest rate swaps - gross liabilities $ 11,660 $ — $ 11,660 $ — December 31, 2024 Assets: Obligations of the U.S. Treasury and U.S. government agencies and corporations $ 15,707 $ — $ 15,707 $ — Obligations of state and political subdivisions 16,120 — 11,803 4,317 Corporate bonds 27,267 — 26,773 494 Residential mortgage-backed securities 208,768 — 208,768 — Commercial mortgage-backed securities 63,259 — 63,259 — Equity securities at fair value 2,593 2,593 — — Interest rate swaps - gross assets 17,195 — 17,195 — Total assets $ 350,909 $ 2,593 $ 343,505 $ 4,811 Liabilities: Interest rate swaps - gross liabilities $ 17,195 $ — $ 17,195 $ — 106 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements The Company reviews fair value hierarchy classifications on a quarterly basis. Changes in the Company’s ability to observe inputs to the valuation may cause reclassification of certain assets or liabilities within the fair value hierarchy. The table below provides a reconciliation for assets measured at fair value on a recurring basis using significant unobservable inputs, or level 3 inputs (dollars in thousands). Obligations of State and Political Subdivisions Corporate Bonds Total Balance at December 31, 2023 $ 5,250 $ 463 $ 5,713 Realized gain (loss) included in net income — — — Unrealized (loss) gain included in other comprehensive loss ( 906 ) 31 ( 875 ) Purchases — — — Sales — — — Maturities, prepayments, and calls ( 27 ) — ( 27 ) Transfers into level 3 — — — Transfers out of level 3 — — — Balance at December 31, 2024 $ 4,317 $ 494 $ 4,811 Realized gain (loss) included in net income — — — Unrealized gain included in other comprehensive income 204 6 210 Purchases — — — Sales — — — Maturities, prepayments, and calls ( 917 ) ( 500 ) ( 1,417 ) Transfers into level 3 — — — Transfers out of level 3 — — — Balance at December 31, 2025 $ 3,604 $ — $ 3,604 There were no liabilities measured at fair value on a recurring basis using level 3 inputs at December 31, 2025 and 2024 . For the years ended December 31, 2025, 2024 and 2023 , there were no gains or losses included in earnings related to the change in fair value of the assets measured on a recurring basis using significant unobservable inputs held at the end of the period. The following table provides quantitative information about significant unobservable inputs used in fair value measurements of level 3 assets measured at fair value on a recurring basis at December 31, 2025 and 2024 (dollars in thousands). Estimated Fair Value Valuation Technique Unobservable Inputs Range of Discounts Weighted Average Discount (1) December 31, 2025 Obligations of state and political subdivisions $ 3,604 Option-adjusted discounted cash flow model; present value of expected future cash flow model Bond appraisal adjustment (2) 0 % - 6 % 2 % December 31, 2024 Obligations of state and political subdivisions $ 4,317 Option-adjusted discounted cash flow model; present value of expected future cash flow model Bond appraisal adjustment (2) 2 % - 15 % 6 % Corporate bonds 494 Option-adjusted discounted cash flow model; present value of expected future cash flow model Bond appraisal adjustment (2) 1 % 1 % ( 1 ) Weighted by relative fair value. ( 2 ) Fair values determined through valuation analysis using coupon, yield (discount margin), liquidity and expected repayment dates. 107 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements Fair Value of Assets and Liabilities Measured on a Nonrecurring Basis Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The following methods and assumptions were used by the Company in estimating the fair value of assets and liabilities valued on a nonrecurring basis: Loans Individually Evaluated – For collateral dependent loans where the borrower is experiencing financial difficulty, the expected credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral, which is based on third -party appraisals. Individually evaluated loans that are not collateral dependent are evaluated based on a discounted cash flow methodology. Credits deemed uncollectible are charged to the ACL. Since not all valuation inputs are observable, these nonrecurring fair value determinations are classified as level 3. Other Real Estate Owned – Other real estate owned consists of properties acquired through foreclosure or acceptance of a deed in lieu of foreclosure and real property no longer used in the Bank’s business operations. 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. Accordingly, values for other real estate owned are classified as level 3. Quantitative information about assets measured at fair value on a nonrecurring basis based on significant unobservable inputs (level 3 ) are summarized below as of the dates indicated; there were no liabilities measured on a nonrecurring basis at December 31, 2025 or 2024 (dollars in thousands). Estimated Fair Value Valuation Technique Unobservable Inputs Range of Discounts Weighted Average Discount (1) December 31, 2025 Loans individually evaluated for impairment (2) $ 3,312 Discounted cash flows, underlying collateral value Collateral discounts and estimated costs to sell 1 % - 100 % 9 % Other real estate owned (3) 1,959 Underlying collateral value, third party appraisals Collateral discounts and discount rates 13 % - 14 % 13 % December 31, 2024 Loans individually evaluated for impairment (2) $ 2,174 Discounted cash flows, underlying collateral value Collateral discounts and estimated costs to sell 0 % - 79 % 31 % Other real estate owned (3) 900 Underlying collateral value, third party appraisals Collateral discounts and discount rates 18 % 18 % ( 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. 108 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements Financial Instruments Accounting guidance requires the disclosure of estimated fair value information about certain on- and off-balance sheet financial instruments, including those financial instruments that are not measured and reported at fair value on a recurring or nonrecurring basis. The significant methods and assumptions used by the Company to estimate the fair value of financial instruments are discussed below. Cash and Cash Equivalents – For these short-term instruments, the fair value is the carrying value. Investment Securities and Equity Securities – The fair value measurement techniques and assumptions for AFS securities and marketable equity securities is discussed earlier in the note. The same measurement techniques and assumptions were applied to the valuation of HTM securities and nonmarketable equity securities including equity in correspondent banks. Loans – The fair value of portfolio loans, net is determined using an exit price methodology. The exit price methodology is based on a discounted cash flow analysis, in which projected cash flows are based on contractual cash flows adjusted for prepayments for certain loan types (e.g. residential mortgage loans and multifamily loans) and the use of a discount rate based on expected relative risk of the cash flows. The discount rate selected considers loan type, maturity date, a liquidity premium, cost to service, and cost of capital. 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 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. Subordinated Debt Securities – The fair value of subordinated debt is estimated based on current market rates on similar debt in the market. Derivative Financial Instruments – The fair value measurement techniques and assumptions for derivative financial instruments is discussed earlier in the note. The estimated fair values of the Company’s financial instruments at December 31, 2025 and December 31, 2024 are shown below (dollars in thousands). December 31, 2025 Carrying Amount Estimated Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 41,505 $ 41,505 $ 41,505 $ — $ — Investment securities - AFS 370,614 370,614 — 367,010 3,604 Investment securities - HTM 48,199 50,540 — 1,694 48,846 Equity securities at fair value 3,354 3,354 3,354 — — Nonmarketable equity securities 17,021 17,021 — 17,021 — Loans, net of allowance 2,149,624 2,080,142 — — 2,080,142 Interest rate swaps - gross assets 11,660 11,660 — 11,660 — Financial liabilities: Deposits $ 2,350,249 $ 2,349,856 $ — $ 2,349,856 $ — FHLB short-term advances and repurchase agreements 47,183 47,193 — 47,193 — FHLB long-term advances 80,000 80,079 — 80,079 — Junior subordinated debt 8,830 8,830 — — 8,830 Subordinated debt 16,738 15,252 — 15,252 — Interest rate swaps - gross liabilities 11,660 11,660 — 11,660 — 109 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements December 31, 2024 Carrying Amount Estimated Fair Value Level 1 Level 2 Level 3 Financial assets: Cash and cash equivalents $ 27,922 $ 27,922 $ 27,922 $ — $ — Investment securities - AFS 331,121 331,121 — 326,310 4,811 Investment securities - HTM 42,687 42,144 — 1,821 40,323 Equity securities at fair value 2,593 2,593 2,593 — — Nonmarketable equity securities 16,502 16,502 — 16,502 — Loans, net of allowance 2,098,363 1,973,780 — — 1,973,780 Interest rate swaps - gross assets 17,195 17,195 — 17,195 — Financial liabilities: Deposits, noninterest-bearing $ 432,143 $ 432,143 $ — $ 432,143 $ — Deposits, interest-bearing 1,913,801 1,826,868 — — 1,826,868 FHLB short-term advances and repurchase agreements 15,591 15,577 — 15,577 — FHLB long-term advances 60,000 59,620 — — 59,620 Junior subordinated debt 8,733 8,733 — — 8,733 Subordinated debt 16,697 14,738 — 14,738 — Interest rate swaps - gross liabilities 17,195 17,195 — 17,195 — NOTE 18. REGULATORY MATTERS The Company and Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the financial statements. Under capital adequacy guidelines, the Company and Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios (set forth in the table below) of total, Common Equity Tier 1, and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and Tier 1 capital to average assets (as defined). As of December 31, 2025 and 2024 , the Bank was considered well-capitalized under the regulatory framework for prompt corrective action. To be categorized as well-capitalized, the Bank must maintain minimum risk-based and Tier 1 leverage capital ratios as set forth in the table below and not be subject to a written agreement or order with regulators to maintain a specific capital level for any capital measure. There are no conditions or events since the regulatory framework for prompt corrective action was issued that management believes have changed the Bank’s category. 110 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements The Company’s and the Bank’s actual capital amounts and ratios as of December 31, 2025 and December 31, 2024 are presented in the tables below (dollars in thousands). Actual Capital Adequacy * Well Capitalized Amount Ratio Amount Ratio Amount Ratio December 31, 2025 Tier 1 leverage capital Investar Holding Corporation $ 305,810 10.73 % $ 113,987 4.00 % NA NA Investar Bank 308,528 10.85 113,784 4.00 142,230 5.00 Common Equity Tier 1 risk-based capital Investar Holding Corporation 265,957 11.18 166,592 7.00 NA NA Investar Bank 308,528 13.00 166,160 7.00 154,291 6.50 Tier 1 risk-based capital Investar Holding Corporation 305,810 12.85 202,290 8.50 NA NA Investar Bank 308,528 13.00 201,765 8.50 189,897 8.00 Total risk-based capital Investar Holding Corporation 348,943 14.66 249,887 10.50 NA NA Investar Bank 334,923 14.11 249,240 10.50 237,371 10.00 December 31, 2024 Tier 1 leverage capital Investar Holding Corporation $ 258,178 9.27 % $ 111,403 4.00 % NA NA Investar Bank 269,733 9.70 111,274 4.00 139,092 5.00 Common Equity Tier 1 risk-based capital Investar Holding Corporation 248,678 10.84 160,614 7.00 NA NA Investar Bank 269,733 11.77 160,381 7.00 148,925 6.50 Tier 1 risk-based capital Investar Holding Corporation 258,178 11.25 195,032 8.50 NA NA Investar Bank 269,733 11.77 194,749 8.50 183,293 8.00 Total risk-based capital Investar Holding Corporation 301,259 13.13 240,922 10.50 NA NA Investar Bank 296,117 12.92 240,572 10.50 229,116 10.00 *The minimum ratios and amounts under the column for Capital Adequacy for December 31, 2025 and December 31, 2024 reflect the minimum regulatory capital ratios imposed under Basel III plus the fully phased-in capital conservation buffer of 2.5 %. Applicable federal statutes, regulations, and guidance impose restrictions on the amounts of dividends that may be declared by the Company and the Bank. 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 Series A Preferred Stock, 2032 Notes and junior subordinated debentures. See “ Common Stock – Dividend Restrictions ” in Note 13. Stockholders’ Equity, for more information. 111 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements NOTE 19. COMMITMENTS AND CONTINGENCIES Unfunded Commitments The Company is a party to financial instruments with off-balance sheet risk entered into in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit consisting of loan commitments and standby letters of credit, which are not included in the accompanying financial statements. Such financial instruments are recorded in the financial statements when they become payable. Commitments to extend credit are agreements to lend money with fixed expiration dates or termination clauses. The Company applies the same credit standards used in the lending process when extending these commitments and periodically reassesses the customer’s creditworthiness through ongoing credit reviews. Since some commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Collateral is obtained based on the Company’s assessment of the transaction. Substantially all standby letters of credit issued have expiration dates within one year. The table below shows the amounts of the Company’s commitments to extend credit as of the dates presented (dollars in thousands). December 31, 2025 December 31, 2024 Loan commitments $ 431,795 $ 377,301 Standby letters of credit 5,436 7,658 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) — — ( 6 ) 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. 112 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements Legal Proceedings The nature of the business of the Company’s banking and other subsidiaries ordinarily results in a certain amount of claims, litigation, investigations, and legal and administrative cases and proceedings, which are considered incidental to the normal conduct of business. Some of these claims are against entities which the Company acquired in business acquisitions. The Company has asserted defenses to these claims and, with respect to such legal proceedings, intends to continue to defend itself, litigating or settling cases according to management’s judgment as to what is in the best interest of the Company and its shareholders. The Company assesses its liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available. Where it is probable that the Company will incur a loss and the amount of the loss can be reasonably estimated, the Company records a liability in its consolidated financial statements. These legal reserves may be increased or decreased to reflect any relevant developments on a quarterly basis. Where a loss is not probable or the amount of loss is not estimable, the Company does not accrue legal reserves. While the outcome of legal proceedings is inherently uncertain, based on information currently available and available insurance coverage, the Company’s management believes that it has established appropriate legal reserves. If an accrual is not made, and there is at least a reasonable possibility that a loss or additional loss may have been incurred, the Company discloses the nature of the contingency and an estimate of the possible loss or range of loss or a statement that such an estimate cannot be made. Any incremental liabilities arising from pending legal proceedings are not expected to have a material adverse effect on the Company’s consolidated financial position, consolidated results of operations, or consolidated cash flows. However, it is possible that the ultimate resolution of these matters, if unfavorable, may be material to the Company’s consolidated financial position, consolidated results of operations, or consolidated cash flows. As of the date of this filing, the Company believes the amount of losses associated with legal proceedings that it is reasonably possible to incur is not material. NOTE 20. TRANSACTIONS WITH RELATED PARTIES The Bank has made and expects in the future to continue to make in the ordinary course of business, loans to directors and executive officers of the Company and the Bank, their affiliated companies, and other related persons. In management’s opinion, these loans were made in the ordinary course of business at normal credit terms, including interest rate and collateral requirements, and do not represent more than normal credit risk. See Note 3. Loans and Allowance for Credit Losses, for more information regarding lending transactions between the Bank and these related parties. During 2025 and 2024 , certain executive officers and directors of the Company and the Bank, including companies with which they are affiliated and other related persons, were deposit customers of the Bank. See Note 8. Deposits, regarding total deposits outstanding to these related parties. 113 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements NOTE 21. PARENT COMPANY ONLY FINANCIAL STATEMENTS BALANCE SHEETS December 31, (dollars in thousands) 2025 2024 ASSETS Cash and due from banks $ 10,126 $ 951 Equity securities at fair value 2,916 2,169 Due from bank subsidiary 652 1,670 Investment in bank subsidiary 313,191 262,251 Investment in trust 295 295 Trademark intangible 100 100 Other assets 1,790 1,095 Total assets $ 329,070 $ 268,531 LIABILITIES Subordinated debt, net of unamortized issuance costs $ 16,738 $ 16,697 Junior subordinated debt 8,830 8,733 Accounts payable 210 228 Accrued interest payable 240 212 Dividend payable 1,606 1,032 Deferred tax liability 373 333 Total liabilities 27,997 27,235 STOCKHOLDERS’ EQUITY Preferred stock 30,353 — Common stock 9,799 9,828 Surplus 146,133 146,890 Retained earnings 150,510 132,935 Accumulated other comprehensive loss ( 35,722 ) ( 48,357 ) Total stockholders’ equity 301,073 241,296 Total liabilities and stockholders’ equity $ 329,070 $ 268,531 114 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements STATEMENTS OF INCOME For the years ended December 31, (dollars in thousands) 2025 2024 REVENUE Dividends received from bank subsidiary $ 9,500 $ 34,937 Dividends on corporate stock 1 — Change in the fair value of equity securities 247 417 Interest income from investment in trust 19 22 Other operating income 156 93 Total revenue 9,923 35,469 EXPENSE Interest on borrowings 1,661 2,939 Management fees to bank subsidiary 360 360 Gain on early extinguishment of subordinated debt — ( 292 ) Acquisition expense 49 — Other expense 574 546 Total expense 2,644 3,553 Income before income tax benefit and equity in undistributed earnings of bank subsidiary 7,279 31,916 Equity in undistributed earnings of bank subsidiary 15,155 ( 12,298 ) Income tax benefit 470 634 Net income 22,904 20,252 Preferred stock dividends declared 1,056 — Net income available to common shareholders $ 21,848 $ 20,252 115 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements STATEMENTS OF CASH FLOWS For the years ended December 31, (dollars in thousands) 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 22,904 $ 20,252 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed earnings of bank subsidiary ( 15,155 ) 12,298 Change in the fair value of equity securities ( 247 ) ( 417 ) Amortization of subordinated debt issuance costs and purchase accounting adjustments 138 187 Gain on early extinguishment of subordinated debt — ( 292 ) Net change in: Due from bank subsidiary 1,018 ( 529 ) Other assets ( 446 ) ( 51 ) Deferred tax liability 40 73 Accrued other liabilities 1,435 1,083 Net cash provided by operating activities 9,687 32,604 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of equity securities at fair value ( 500 ) ( 1,000 ) Purchases of other investments ( 230 ) ( 165 ) Investment in subsidiary ( 23,150 ) — Net cash used in investing activities ( 23,880 ) ( 1,165 ) CASH FLOWS FROM FINANCING ACTIVITIES Cash dividends paid on common stock ( 4,227 ) ( 3,972 ) Cash dividends paid on preferred stock ( 528 ) — Payments to repurchase common stock ( 2,293 ) ( 305 ) Proceeds from stock options exercised 63 337 Extinguishment of subordinated debt — ( 27,388 ) Proceeds from preferred stock offering, net of issuance costs 30,353 — Net cash provided by (used in) financing activities 23,368 ( 31,328 ) Net increase in cash 9,175 111 Cash and cash equivalents, beginning of period 951 840 Cash and cash equivalents, end of period $ 10,126 $ 951 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash payments for: Interest on borrowings $ 1,633 $ 3,298 116 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements NOTE 22. 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). December 31, 2025 2024 2023 Net income $ 22,904 $ 20,252 $ 16,678 Less: preferred stock dividends declared 1,056 — — Net income available to common shareholders 21,848 20,252 16,678 Less: income allocated to participating securities — — 1 Net income allocated to common shareholders $ 21,848 $ 20,252 $ 16,677 Weighted average basic shares outstanding 9,829,130 9,813,694 9,839,258 Dilutive effect of stock-based compensation 167,693 122,386 2,583 Dilutive effect of Series A Preferred Stock 780,162 — — Weighted average diluted shares outstanding 10,776,985 9,936,080 9,841,841 Basic earnings per common share $ 2.22 $ 2.06 $ 1.69 Diluted earnings per common share $ 2.13 $ 2.04 $ 1.69 The weighted average number of shares that have an antidilutive effect in the calculation of diluted earnings per common share and have been excluded from the computations above are shown below. December 31, 2025 2024 2023 Stock options 822 2,238 — RSUs 950 4,741 71,711 NOTE 23. 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. 117 Table of Contents INVESTAR HOLDING CORPORATION Notes to Consolidated Financial Statements Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None.