Investar Holding Corporation Announces 2024 First Quarter Results

BATON ROUGE, LA / ACCESSWIRE / April 22, 2024 / Investar Holding Corporation ("Investar") (NASDAQ:ISTR), the holding company for Investar Bank, National Association (the "Bank"), today announced financial results for the quarter ended March 31, 2024. Investar reported net income of $4.7 million, or $0.48 per diluted common share, for the first quarter of 2024, compared to net income of $3.5 million, or $0.36 per diluted common share, for the quarter ended December 31, 2023, and net income of $3.8 million, or $0.38 per diluted common share, for the quarter ended March 31, 2023.

On a non-GAAP basis, core earnings per diluted common share for the first quarter of 2024 were $0.43 compared to $0.39 for the fourth quarter of 2023, and $0.51 for the first quarter of 2023. Core earnings exclude certain items including, but not limited to, loss on call or sale of investment securities, net, (gain) loss on sale or disposition of fixed assets, net, loss on sale of other real estate owned, net, change in the fair value of equity securities, write down of other real estate owned, gain on early extinguishment of subordinated debt, and divestiture expense (refer to the Reconciliation of Non-GAAP Financial Measures tables for a reconciliation of GAAP to non-GAAP metrics).

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

"Investar had a solid first quarter, and I am pleased with our results. Despite the potential of a higher-for-longer interest rate environment, we are focused on proactively managing through this uncertainty while remaining strategically positioned to benefit from a decrease in rates. During the first quarter, we continued to execute on our strategy of consistent, quality earnings through the optimization of our balance sheet and prudent expense management, and we are beginning to realize the benefits as evidenced by our results. Primarily through the right-sizing of our balance sheet, we recognized the benefit of a $1.4 million negative provision. Our GAAP and core metrics for diluted earnings per share and return on average assets improved from the prior quarter.

Our goal is to build a fortress balance sheet that is less interest rate sensitive and responsibly build capital levels through organic earnings growth and a disciplined pace of share repurchases. Each quarter, we continue to focus on the things we can control and make progress towards our goals. We continue to benefit from the origination of higher yielding loans and repricing of our variable-rate assets. During the first quarter we originated and renewed loans, 80% of which were variable-rate loans, at a 9.2% blended interest rate. Our net interest margin decreased from the prior quarter, but we are pleased with the expansion of our adjusted net interest margin when excluding interest income accretion and interest recoveries.

We continue to closely manage our interest-earning assets and short-term funding costs. We completed a partial restructuring of approximately $8.4 million of our bank owned life insurance with reinvestments in policies that yield more than double the yield of the surrendered policies with just over a one year earn-back period. We refinanced all of our borrowings under the Bank Term Funding Program at a lower rate prior to the expiration of the program. Additionally, we repurchased $1.0 million in principal amount of subordinated debt at a significant discount to par and recognized a gain of $0.2 million.

Our efforts to focus on underwriting high quality credits and allow higher risk credit relationships to run off are paying off. Credit quality remained very strong as nonperforming loans represented just 0.26% of total loans, and we experienced minimal charge-offs.

As always, we remain focused on shareholder value and returning capital to shareholders. We repurchased 10,525 shares of our common stock during the first quarter at an average price of $16.20 per share."

First Quarter Highlights

• Return on average assets increased to 0.68% for the quarter ended March 31, 2024 compared to 0.50% for the quarter ended December 31, 2023. Core return on average assets improved to 0.61% for the quarter ended March 31, 2024 compared to 0.54% for the quarter ended December 31, 2023.
• Noninterest expense and core noninterest expense decreased $0.1 million to $15.3 million for the quarter ended March 31, 2024 compared to $15.4 million for the quarter ended December 31, 2023.
• Credit quality remained strong as nonperforming loans were 0.26% of total loans at March 31, 2024 and December 31, 2023.
• Consistent with our strategy of optimizing the balance sheet, total loans decreased $30.0 million, or 1.4%, to $2.18 billion at March 31, 2024, compared to $2.21 billion at December 31, 2023.
• Variable-rate loans as a percentage of total loans improved to 28% at March 31, 2024 compared to 27% at December 31, 2023. During the first quarter we originated and renewed loans, 80% of which were variable-rate loans, at a 9.2% blended interest rate.
• Investar recorded a negative provision for credit losses of $1.4 million for the quarter ended March 31, 2024, compared to a provision for credit losses of $0.5 million for the quarter ended December 31, 2023.
• During the first quarter, Investar refinanced all of its borrowings under the Federal Reserve's Bank Term Funding Program ("BTFP"). The weighted average rate was 4.76% at March 31, 2024 compared to 4.83% at December 31, 2023.
• Investar completed the closure and sale of one branch location in Alabama during the first quarter of 2024 and recorded a $0.4 million gain on sale or disposition of fixed assets.
• Investar repurchased $1.0 million in principal amount of our 5.125% Fixed-to-Floating Rate Subordinated Notes due 2032 (the "2032 Notes") and recognized a gain on early extinguishment of subordinated debt of $0.2 million.
• Investar surrendered approximately $8.4 million of bank owned life insurance ("BOLI") and reinvested the proceeds in higher yielding policies. The restructuring has an expected earn-back period of just over one year.
• Investar repurchased 10,525 shares of its common stock through its stock repurchase program at an average price of $16.20 during the quarter ended March 31, 2024, leaving 503,741 shares authorized for repurchase under the program at March 31, 2024.

Loans

Total loans were $2.18 billion at March 31, 2024, a decrease of $30.0 million, or 1.4%, compared to December 31, 2023, and an increase of $71.5 million, or 3.4%, compared to March 31, 2023.

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

At March 31, 2024, the Bank's total business lending portfolio, which consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans, was $972.4 million, a decrease of $20.6 million, or 2.1%, compared to the business lending portfolio of $993.0 million at December 31, 2023, and an increase of $113.7 million, or 13.2%, compared to the business lending portfolio of $858.7 million at March 31, 2023. The decrease in the business lending portfolio compared to December 31, 2023 is primarily driven by lower loan demand and loan amortization. The increase in the business lending portfolio compared to March 31, 2023 is primarily driven by our purchase of commercial and industrial revolving lines of credit in the second half of 2023, partially offset by lower loan demand due to higher rates.

Nonowner-occupied loans totaled $495.8 million at March 31, 2024, an increase of $7.7 million, or 1.6%, compared to $488.1 million at December 31, 2023, and a decrease of $37.7 million, or 7.1%, compared to $533.6 million at March 31, 2023. The increase in nonowner-occupied loans compared to December 31, 2023 is primarily due to conversions from construction and development upon completion of construction. The decrease in nonowner-occupied loans compared to March 31, 2023 is primarily due to a reclassification of approximately $24.1 million nonowner-occupied loans to multifamily loans due to a change in the primary use of the property and loan amortization.

Construction and development loans totaled $173.5 million at March 31, 2024, a decrease of $16.9 million, or 8.9%, compared to $190.4 million at December 31, 2023, and a decrease of $36.8 million, or 17.5%, compared to $210.3 million at March 31, 2023. The decrease in construction and development loans compared to December 31, 2023 and March 31, 2023 is primarily due to conversions to permanent loans upon completion of construction.

Credit Quality

Nonperforming loans were $5.6 million, or 0.26% of total loans, at March 31, 2024, a decrease of $0.2 million compared to $5.8 million, or 0.26% of total loans, at December 31, 2023, and a decrease of $0.1 million compared to $5.7 million, or 0.27% of total loans, at March 31, 2023. The decrease in nonperforming loans compared to December 31, 2023 is mainly attributable to paydowns.

The allowance for credit losses was $29.1 million, or 515.4% and 1.34% of nonperforming and total loans, respectively, at March 31, 2024, compared to $30.5 million, or 529.3% and 1.38% of nonperforming and total loans, respectively, at December 31, 2023, and $30.5 million, or 535.6% and 1.45% of nonperforming and total loans, respectively, at March 31, 2023.

Investar recorded a negative provision for credit losses of $1.4 million for the quarter ended March 31, 2024 compared to a provision for credit losses of $0.5 million and $0.4 million for the quarters ended December 31, 2023 and March 31, 2023, respectively. The negative provision for credit losses in the quarter ended March 31, 2024 was primarily due to a decrease in total loans, aging of existing loans, and, to a lesser extent, the completion of our annual current expected credit loss allowance model recalibration. The provision for credit losses in the quarter ended December 31, 2023 was primarily attributable to loan growth resulting from the purchase of commercial and industrial revolving lines of credit, partially offset by an improvement in the economic forecast. The provision for credit losses for the quarter ended March 31, 2023 was due to organic loan growth.

Deposits

Total deposits at March 31, 2024 were $2.21 billion, a decrease of $47.9 million, or 2.1%, compared to $2.26 billion at December 31, 2023, and an increase of $62.2 million, or 2.9%, compared to $2.15 billion at March 31, 2023.

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

The increase in interest-bearing demand deposits at March 31, 2024 compared to December 31, 2023 is primarily due to organic growth. The decrease in noninterest-bearing demand deposits, money market deposits, and savings deposits at March 31, 2024 compared to December 31, 2023 is primarily the result of customers drawing down on their existing deposit accounts. The decrease in time deposits at March 31, 2024 compared to December 31, 2023 is primarily due to a reduced emphasis on attracting time deposits. Brokered time deposits decreased to $237.9 million at March 31, 2024 from $269.1 million at December 31, 2023 primarily due to scheduled maturities as part of our laddering strategy. Investar utilizes brokered time deposits, entirely in denominations of less than $250,000, to secure fixed cost funding and reduce short-term borrowings. At March 31, 2024, the balance of brokered time deposits remained below 10% of total assets, and the remaining weighted average duration is approximately 14 months with a weighted average rate of 5.18%.

Time deposits and brokered time deposits increased, and other deposit categories decreased at March 31, 2024 compared to March 31, 2023 primarily due to shifts into interest-bearing deposit products as a result of rising interest rates. The majority of the increase in time deposits at March 31, 2024 compared to March 31, 2023 is due to organic growth and existing customer funds migrating from other deposit categories. We utilized shorter term brokered time deposits, which were laddered to provide flexibility, to fund a portion of the purchase of commercial and industrial revolving lines of credit in the second half of 2023.

Stockholders' Equity

Stockholders' equity was $227.0 million at March 31, 2024, an increase of $0.2 million compared to December 31, 2023, and an increase of $8.5 million compared to March 31, 2023. The increase in stockholders' equity compared to December 31, 2023 is primarily attributable to net income for the quarter, partially offset by an increase in accumulated other comprehensive loss due to a decrease in the fair value of the Bank's available for sale securities portfolio. The increase in stockholders' equity compared to March 31, 2023 is primarily attributable to net income for the last twelve months, partially offset by an increase in accumulated other comprehensive loss due to a decrease in the fair value of the Bank's available for sale securities portfolio.

Net Interest Income

Net interest income for the first quarter of 2024 totaled $17.2 million, a decrease of $1.3 million, or 6.9%, compared to the fourth quarter of 2023, and a decrease of $3.0 million, or 14.7%, compared to the first quarter of 2023. Total interest income was $35.7 million, $36.7 million and $31.0 million for the quarters ended March 31, 2024, December 31, 2023 and March 31, 2023, respectively. Total interest expense was $18.5 million, $18.2 million and $10.8 million for the corresponding periods. Included in net interest income for the quarters ended March 31, 2024, December 31, 2023 and March 31, 2023 is $19,000, $25,000, and $0.1 million, respectively, of interest income accretion from the acquisition of loans. Also included in net interest income for each of the quarters ended March 31, 2024, December 31, 2023 and March 31, 2023 are interest recoveries of $21,000, $1.1 million, and $0.1 million, respectively.

Investar's net interest margin was 2.59% for the quarter ended March 31, 2024, compared to 2.72% for the quarter ended December 31, 2023 and 3.13% for the quarter ended March 31, 2023. The decrease in net interest margin for the quarter ended March 31, 2024 compared to the quarter ended December 31, 2023 was driven by an 11 basis point increase in the overall cost of funds, and a two basis point decrease in the yield on interest-earning assets. The decrease in net interest margin for the quarter ended March 31, 2024 compared to the quarter ended March 31, 2023 was driven by a 128 basis point increase in the overall cost of funds, partially offset by a 58 basis point increase in the yield on interest-earning assets.

The yield on interest-earning assets was 5.38% for the quarter ended March 31, 2024, compared to 5.40% for the quarter ended December 31, 2023 and 4.80% for the quarter ended March 31, 2023. The decrease in the yield on interest-earning assets compared to the quarter ended December 31, 2023 was primarily attributable to a four basis point decrease in the yield on the loan portfolio, partially offset by a one basis point increase in the yield on the taxable securities portfolio. The increase in the yield on interest-earning assets compared to the quarter ended March 31, 2023 was primarily driven by a 62 basis point increase in the yield on the loan portfolio.

Exclusive of the interest income accretion from the acquisition of loans and interest recoveries, adjusted net interest margin was 2.59% for the quarter ended March 31, 2024, compared to 2.56% for the quarter ended December 31, 2023 and 3.10% for the quarter ended March 31, 2023. The adjusted yield on interest-earning assets was 5.38% for the quarter ended March 31, 2024 compared to 5.23% and 4.77% for the quarters ended December 31, 2023 and March 31, 2023, respectively. Refer to the Reconciliation of Non-GAAP Financial Measures table for a reconciliation of GAAP to non-GAAP metrics.

The cost of deposits increased 14 basis points to 3.31% for the quarter ended March 31, 2024 compared to 3.17% for the quarter ended December 31, 2023 and increased 169 basis points compared to 1.62% for the quarter ended March 31, 2023. The increase in the cost of deposits compared to the quarter ended December 31, 2023 resulted from an increase in rates paid on time deposits and brokered time deposits and both a higher average balance and an increase in rates paid on interest-bearing demand deposits. The increase in the cost of deposits compared to the quarter ended March 31, 2023 resulted from both a higher average balance and an increase in rates paid on time deposits and brokered time deposits, and an increase in rates paid on interest-bearing demand deposits and savings deposits, partially offset by a lower average balance of interest-bearing demand deposits.

The cost of short-term borrowings decreased 18 basis points to 4.66% for the quarter ended March 31, 2024 compared to 4.84% for the quarter ended December 31, 2023 and decreased 14 basis points compared to 4.80% for the quarter ended March 31, 2023. Beginning in the second quarter of 2023, the Bank began utilizing the BTFP to secure fixed rate funding for up to a one-year term and reduce short-term Federal Home Loan Bank ("FHLB") advances, which are priced daily. The Bank utilized this source of funding due to its lower rate as compared to FHLB advances, the ability to prepay the obligations without penalty, and as a means to lock in funding. The decrease in the cost of short-term borrowings compared to the quarters ended December 31, 2023 and March 31, 2023 resulted primarily from the refinancing of borrowings under the BTFP at lower rates.

The overall cost of funds for the quarter ended March 31, 2024 increased 11 basis points to 3.51% compared to 3.40% for the quarter ended December 31, 2023 and increased 128 basis points compared to 2.23% for the quarter ended March 31, 2023. The increase in the cost of funds for the quarter ended March 31, 2024 compared to the quarter ended December 31, 2023 resulted from an increase in the cost of deposits and a higher average balance of short-term borrowings, partially offset by a lower average balance of deposits and a decrease in the cost of short-term borrowings. The increase in the cost of funds for the quarter ended March 31, 2024 compared to the quarter ended March 31, 2023 resulted from both a higher average balance and an increase in the cost of deposits, partially offset by both a lower average balance and a decrease in the cost of short-term borrowings.

Noninterest Income

Noninterest income for the first quarter of 2024 totaled $2.7 million, an increase of $1.0 million, or 56.6%, compared to the fourth quarter of 2023 and an increase of $1.7 million, or 155.4%, compared to the first quarter of 2023.

The increase in noninterest income compared to the quarter ended December 31, 2023 is driven by a $0.5 million increase in gain on sale or disposition of fixed assets, a $0.3 million decrease in loss on call or sale of investment securities, a $0.1 million increase in the change in fair value of equity securities, and a $0.1 million increase in other operating income. The increase in gain of sale or disposition of fixed assets resulted from the closure of one branch in the Alabama market during the first quarter of 2024. The increase in other operating income is primarily attributable to a $0.1 million increase in derivative fee income.

The increase in noninterest income compared to the quarter ended March 31, 2023 is primarily attributable to a $1.3 million increase in gain on sale or disposition of fixed assets, a $0.1 decrease in the loss on other real estate owned, $0.1 million increase in the change in fair value of equity securities, and a $0.2 million increase in other operating income. During the first quarter of 2024, there was a gain of sale or disposition of fixed assets of $0.4 million resulting from the closure of one branch in the Alabama market compared to a loss on sale or disposition of fixed assets of $0.9 million as a result of the sale of the Alice and Victoria, Texas branches in the first quarter of 2023. The increase in other operating income is primarily attributable to a $0.1 million increase in the change in the net asset value of other investments.

Noninterest Expense

Noninterest expense for the first quarter of 2024 totaled $15.3 million, a decrease of $0.1 million, or 0.9%, compared to the fourth quarter of 2023, and a decrease of $0.9 million, or 5.4%, compared to the first quarter of 2023.

The decrease in noninterest expense for the quarter ended March 31, 2024 compared to the quarter ended December 31, 2023 was primarily driven by a $0.2 million gain on early extinguishment of subordinated debt, a $0.1 million decrease in occupancy expense, and a $0.1 million decrease in depreciation and amortization, partially offset by a $0.2 million increase in salaries and employee benefits, and a $0.1 million increase in other operating expense. The gain on early extinguishment of subordinated debt is due to the repurchase of $1.0 million in principal amount of our 2032 Notes in the first quarter of 2024. The decrease in occupancy was primarily due to higher maintenance costs in the fourth quarter of 2023. The increase in other operating expense resulted from a $0.1 million increase in Federal Deposit Insurance Corporation ("FDIC") assessments and a $0.2 million write down of other real estate owned related to a former branch location, partially offset by a $0.2 million decrease in bank shares tax.

The decrease in noninterest expense for the quarter ended March 31, 2024 compared to the quarter ended March 31, 2023 was primarily driven by $0.7 million in expenses as a result of the sale of the Alice and Victoria, Texas branch locations in the first quarter of 2023. As a result of the sale of the Alice and Victoria, Texas branches, we recorded $0.4 million of occupancy expense to terminate the remaining contractually obligated lease payments, $0.1 million of salaries and employee benefits for severance, $0.1 million of professional fees for legal and consulting services, and $0.1 million of depreciation and amortization to accelerate the amortization of the remaining core deposit intangible. The remaining decrease of $0.2 million is primarily due to a $0.2 million gain on early extinguishment of subordinated debt, a $0.1 million decrease in depreciation and amortization, and a $0.1 million decrease in professional fees unrelated to the sale of the Alice and Victoria, Texas branch locations, partially offset by a $0.3 million increase in other operating expenses. The increase in other operating expense resulted from a $0.2 million increase in FDIC assessments and a $0.2 million write down of other real estate owned related to a former branch location, partially offset by a $0.1 million decrease in collection and repossession expenses and a $0.1 million decrease in bank shares tax.

Taxes

Investar recorded an income tax expense of $1.4 million for the quarter ended March 31, 2024, which equates to an effective tax rate of 22.7%, compared to effective tax rates of 18.1% and 18.7% for the quarters ended December 31, 2023 and March 31, 2023, respectively. Investar surrendered approximately $8.4 million of BOLI and reinvested the proceeds in higher yielding policies. Investar incurred a $0.3 million income tax expense as a result of the restructuring. The restructuring has an expected earn-back period of just over one year. Excluding the effect of the BOLI surrender, the effective tax rate for the quarter ended March 31, 2024 was approximately 18.0%.

Basic and Diluted Earnings Per Common Share

Investar reported basic and diluted earnings per common share of $0.48 for the quarter ended March 31, 2024, compared to basic and diluted earnings per common share of $0.36 for the quarter ended December 31, 2023, and basic and diluted earnings per common share of $0.38 for the quarter ended March 31, 2023.

About Investar Holding Corporation

Investar, headquartered in Baton Rouge, Louisiana, provides full banking services, excluding trust services, through its wholly-owned banking subsidiary, Investar Bank, National Association. The Bank currently operates 28 branch locations serving Louisiana, Texas, and Alabama. At March 31, 2024, the Bank had 323 full-time equivalent employees and total assets of $2.8 billion.

Non-GAAP Financial Measures

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

Forward-Looking and Cautionary Statements

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

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

• the significant risks and uncertainties for our business, results of operations and financial condition, as well as our regulatory capital and liquidity ratios and other regulatory requirements caused by business and economic conditions generally and in the financial services industry in particular, whether nationally, regionally or in the markets in which we operate;
• changes in inflation, interest rates, yield curves and interest rate spread relationships that affect our loan and deposit pricing;
• our ability to continue to successfully execute the pivot of our near-term strategy from primarily a growth strategy to a strategy primarily focused on consistent, quality earnings through the optimization of our balance sheet, and our ability to successfully execute a long-term growth strategy;
• our ability to achieve organic loan and deposit growth, and the composition of that growth;
• a reduction in liquidity, including as a result of a reduction in the amount of deposits we hold or other sources of liquidity, which may be caused by, among other things, disruptions in the banking industry similar to those that occurred in early 2023 that caused bank depositors to move uninsured deposits to other banks or alternative investments outside the banking industry;
• our ability to identify and enter into agreements to combine with attractive acquisition candidates, finance acquisitions, complete acquisitions after definitive agreements are entered into, and successfully integrate and grow acquired operations;
• our adoption on January 1, 2023 of ASU 2016-13, and inaccuracy of the assumptions and estimates we make in establishing reserves for credit losses and other estimates;
• changes in the quality or composition of our loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers;
• changes in the quality and composition of, and changes in unrealized losses in, our investment portfolio, including whether we may have to sell securities before their recovery of amortized cost basis and realize losses;
• the extent of continuing client demand for the high level of personalized service that is a key element of our banking approach as well as our ability to execute our strategy generally;
• our dependence on our management team, and our ability to attract and retain qualified personnel;
• the concentration of our business within our geographic areas of operation in Louisiana, Texas and Alabama;
• increasing costs of complying with new and potential future regulations;
• new or increasing geopolitical tensions, including resulting from wars in Ukraine and Israel and surrounding areas;
• the emergence or worsening of widespread public health challenges or pandemics including COVID-19;
• concentration of credit exposure;
• any deterioration in asset quality and higher loan charge-offs, and the time and effort necessary to resolve problem assets;
• fluctuations in the price of oil and natural gas;
• data processing system failures and errors;
• risks associated with our digital transformation process, including increased risks of cyberattacks and other security breaches and challenges associated with addressing the increased prevalence of artificial intelligence;
• risks of losses resulting from increased fraud attacks against us and others in the financial services industry;
• potential impairment of our goodwill and other intangible assets;
• our potential growth, including our entrance or expansion into new markets, and the need for sufficient capital to support that growth;
• the impact of litigation and other legal proceedings to which we become subject;
• competitive pressures in the commercial finance, retail banking, mortgage lending and consumer finance industries, as well as the financial resources of, and products offered by, competitors;
• the impact of changes in laws and regulations applicable to us, including banking, securities and tax laws and regulations and accounting standards, as well as changes in the interpretation of such laws and regulations by our regulators;
• changes in the scope and costs of FDIC insurance and other coverages;
• governmental monetary and fiscal policies; and
• hurricanes, tropical storms, tropical depressions, floods, winter storms, droughts and other adverse weather events, all of which have affected Investar's market areas from time to time; other natural disasters; oil spills and other man-made disasters; acts of terrorism; other international or domestic calamities; acts of God; and other matters beyond our control.

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

For further information contact:

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

SOURCE: Investar Holding Corporation