# Investar Holding (ISTR) 10-Q SEC filing - Q2 FY2026
- Filed: Aug 6, 2026, 5:03 PM EDT
- Fiscal quarter: Q2 FY2026
- Calendar quarter: Q2 2026
- Accession: 0001437749-26-026348
- OpenCapital page: https://www.opencapital.sh/filings/0001437749-26-026348
- Markdown URL: https://www.opencapital.sh/filings/0001437749-26-026348.md
- Official SEC filing index: https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/0001437749-26-026348-index.htm
## Filing documents
- [10-Q (istr20260630_10q.htm)](https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/istr20260630_10q.htm)
- [EXHIBIT 31.1 (ex_964824.htm)](https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/ex_964824.htm)
- [EXHIBIT 31.2 (ex_964825.htm)](https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/ex_964825.htm)
- [EXHIBIT 32.1 (ex_964826.htm)](https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/ex_964826.htm)
- [EXHIBIT 32.2 (ex_964827.htm)](https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/ex_964827.htm)
- [EXHIBIT 10.1 (ex_989496.htm)](https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/ex_989496.htm)
- [EXHIBIT 10.2 (ex_989497.htm)](https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/ex_989497.htm)
- [EXHIBIT 10.3 (ex_989498.htm)](https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/ex_989498.htm)
- [EXHIBIT 10.4 (ex_989499.htm)](https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/ex_989499.htm)
---
## 10-Q
SEC source: [istr20260630_10q.htm](https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/istr20260630_10q.htm)
**UNITED STATES**
**SECURITIES AND EXCHANGE COMMISSION**
**Washington D.C. 20549**
**_____________________________________**
**FORM 10-Q**
**_____________________________________**
**(Mark One)**
- ☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**
**For the quarterly period ended June 30, 2026**
**or**
- ☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**
**For the transition period from** **to**
**Commission File Number: 001-36522**
**Investar Holding Corporation**
**(Exact name of registrant as specified in its charter)**
**Louisiana**
**27-1560715**
**(State or other jurisdiction of** **incorporation or organization)**
**(I.R.S. Employer** **Identification No.)**
**10500 Coursey Boulevard, Baton Rouge, Louisiana 70816**
**(Address of principal executive offices, including zip code)**
**(225) 227-2222**
**(Registrant**’**s telephone number, including area code)**
Securities registered pursuant to Section 12(b) of the Act:
**Title of each class**
**Trading Symbol(s)**
**Name of each exchange on which registered**
Common stock, $1.00 par value per share
ISTR
The Nasdaq Global Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer ☒
Non-accelerated filer ☐
Smaller reporting company
☒
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares outstanding of the issuer’s class of common stock, as of the latest practicable date, is as follows: Common stock, $1.00 par value, 13,777,026 shares outstanding as of August 4, 2026.
**[](# "toc")TABLE OF CONTENTS**
- [**Part I. Financial Information**](#Part_1)
- [Item 1.](#Item1_Fin) [Financial Statements (Unaudited)](#Item1_Fin) [4](#Item1_Fin)
- [Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025](#BalanceSheet) [4](#BalanceSheet)
- [Consolidated Statements of Income for the three and six months ended June 30, 2026 and 2025](#Income) [5](#Income)
- [Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2026 and 2025](#CompIncome) [6](#CompIncome)
- [Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2026 and 2025](#Equity) [7](#Equity)
- [Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025](#CashFlows) [9](#CashFlows)
- [Notes to the Consolidated Financial Statements](#Notes) [11](#Notes)
- [Note 1. Summary of Significant Accounting Policies](#Note_1) [11](#Note_1)
- [Note 2. Business Combinations](#Note2BusinessComb) [13](#Note2BusinessComb)
- [Note 3. Earnings Per Common Share](#Note_2) [14](#Note_2)
- [Note 4. Investment Securities](#Note_3) [15](#Note_3)
- [Note 5. Loans and Allowance for Credit Losses](#Note_4) [18](#Note_4)
- [Note 6. Goodwill and Other Intangible Assets](#Note6Goodwill) [27](#Note6Goodwill)
- [Note 7. Stockholders’ Equity](#Note5) [28](#Note5)
- [Note 8. Stock-Based Compensation](#Note_8_Stock_based_comp) [29](#Note_8_Stock_based_comp)
- [Note 9. Derivative Financial Instruments](#Note7) [31](#Note7)
- [Note 10. Fair Values of Financial Instruments](#Note8) [32](#Note8)
- [Note 11. Income Taxes](#Note9) [37](#Note9)
- [Note 12. Commitments and Contingencies](#Note10) [37](#Note10)
- [Note 13. Leases](#Note11) [38](#Note11)
- [Item 2.](#Item2_MDA) [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#Item2_MDA) [39](#Item2_MDA)
- [Item 3.](#Item3_QQ) [Quantitative and Qualitative Disclosures about Market Risk](#Item3_QQ) [63](#Item3_QQ)
- [Item 4.](#Item4_Controls) [Controls and Procedures](#Item4_Controls) [63](#Item4_Controls)
- [**Part II. Other Information**](#Part_2)
- [Item 1A.](#Item1A_Risk) [Risk Factors](#Item1A_Risk) [64](#Item1A_Risk)
- [Item 2.](#Item2_Unregistered) [Unregistered Sales of Equity Securities and Use of Proceeds](#Item2_Unregistered) [64](#Item2_Unregistered)
- [Item 5.](#Item2_Unregistered) [Other Information](#Item_5) [65](#Item_5)
- [Item 6.](#Item6_Exhibits) [Exhibits](#Item6_Exhibits) [66](#Item6_Exhibits)
- [Signatures](#Signatures) [67](#Signatures)
**GLOSSARY OF DEFINED TERMS**
*Below is a listing of certain acronyms, abbreviations and defined terms, among others, used throughout this Quarterly Report on Form 10-Q.*
| 2032 Notes | – | 5.125% Fixed-to-Floating Rate Subordinated Notes due 2032 |
| --- | --- | --- |
| ACL | – | Allowance for Credit Losses |
| AFS | – | Available For Sale |
| ALCO | – | Asset/Liability Committee |
| Annual Report | – | Investar Holding Corporation’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 16, 2026 |
| ASC | – | Accounting Standards Codification |
| ASU | – | Accounting Standards Update |
| Bank | – | Investar Bank, National Association |
| Board | – | Board of Directors of Investar Holding Corporation |
| BOLI | – | Bank Owned Life Insurance |
| CECL | – | Current Expected Credit Loss |
| CODM | – | Chief Operating Decision Maker |
| Company | – | Investar Holding Corporation and its wholly-owned subsidiary the Bank (also, “we,” “our,” or “us”) |
| FASB | – | Financial Accounting Standards Board |
| FDIC | – | Federal Deposit Insurance Corporation |
| FHLB | – | Federal Home Loan Bank |
| FNB | – | First National Bank |
| FRB | – | Federal Reserve Bank of Atlanta |
| GAAP | – | U.S. Generally Accepted Accounting Principles |
| HTM | – | Held To Maturity |
| MD&A | – | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| NAICS | – | North American Industry Classification System |
| OCC | – | Office of the Comptroller of the Currency |
| PCD | – | Purchased Credit Deteriorated |
| PSL | – | Purchased Seasoned Loan |
| ROU | – | Right-Of-Use |
| RSU | – | Restricted Stock Unit |
| SBIC | – | Small Business Investment Company |
| SEC | – | U.S. Securities and Exchange Commission |
| Series A Preferred Stock | – | 6.5% Series A Non-Cumulative Perpetual Convertible Preferred Stock |
| WFB | – | Wichita Falls Bancshares, Inc. |
| U.S. | – | United States |
**[](# "Part_1")PART I. FINANCIAL INFORMATION**
**[FILINGSOURCEITEMBOUNDARYBEGIN Item 1. Financial Statements (Unaudited) FILINGSOURCEITEMBOUNDARYEND](# "Item1_Fin")ITEM 1. FINANCIAL STATEMENTS**
**[](# "BalanceSheet")INVESTAR HOLDING CORPORATION**
### CONSOLIDATED BALANCE SHEETS
_(Amounts in thousands, except share data)_
| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| | (Unaudited) | |
| ASSETS | | |
| Cash and due from banks | $31,758 | $26,606 |
| Interest-bearing balances due from other banks | 40,545 | 14,899 |
| Cash and cash equivalents | 72,303 | 41,505 |
| Available for sale securities at fair value (amortized cost of $459,375 and $416,002, respectively) | 411,326 | 370,614 |
| Held to maturity securities at amortized cost (fair value of $49,450 and $50,540, respectively) | 47,217 | 48,199 |
| Loans | 3,059,887 | 2,175,973 |
| Less: allowance for credit losses | (36,251) | (26,349) |
| Loans, net | 3,023,636 | 2,149,624 |
| Equity securities at fair value | 4,111 | 3,354 |
| Nonmarketable equity securities | 23,759 | 17,021 |
| Bank premises and equipment, net of accumulated depreciation of $25,268 and $23,836, respectively | 59,907 | 39,534 |
| Other real estate owned, net | 4,747 | 3,374 |
| Accrued interest receivable | 18,887 | 14,289 |
| Deferred tax asset | 15,183 | 14,050 |
| Goodwill and other intangible assets, net | 71,704 | 41,184 |
| Bank owned life insurance | 84,299 | 69,188 |
| Other assets | 24,594 | 21,112 |
| Total assets | $3,861,673 | $2,833,048 |
| LIABILITIES | | |
| Deposits: | | |
| Noninterest-bearing | $621,870 | $445,986 |
| Interest-bearing | 2,592,016 | 1,904,263 |
| Total deposits | 3,213,886 | 2,350,249 |
| Advances from Federal Home Loan Bank | 136,000 | 116,000 |
| Repurchase agreements | 18,575 | 11,183 |
| Subordinated debt, net of unamortized issuance costs | 16,759 | 16,738 |
| Junior subordinated debt | 22,994 | 8,830 |
| Accrued taxes and other liabilities | 33,327 | 28,975 |
| Total liabilities | 3,441,541 | 2,531,975 |
| Commitments and contingencies (Note 12) | | |
| 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 June 30, 2026 and December 31, 2025 | 30,353 | 30,353 |
| Common stock, $1.00 par value per share; 40,000,000 shares authorized; 13,777,385 and 9,798,948 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively | 13,777 | 9,799 |
| Surplus | 246,033 | 146,133 |
| Retained earnings | 167,784 | 150,510 |
| Accumulated other comprehensive loss | (37,815) | (35,722) |
| Total stockholders’ equity | 420,132 | 301,073 |
| Total liabilities and stockholders’ equity | $3,861,673 | $2,833,048 |
*See accompanying notes to the consolidated financial statements.*
**[](# "Income")INVESTAR HOLDING CORPORATION**
### CONSOLIDATED STATEMENTS OF INCOME
_(Amounts in thousands, except per share data) · (Unaudited)_
| Line item | Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
| --- | --- | --- | --- | --- |
| INTEREST INCOME | | | | |
| Interest and fees on loans | $47,715 | $31,140 | $95,669 | $61,692 |
| Interest on investment securities: | | | | |
| Taxable | 3,790 | 2,961 | 7,162 | 5,640 |
| Tax-exempt | 743 | 665 | 1,484 | 1,336 |
| Other interest income | 951 | 593 | 2,088 | 1,125 |
| Total interest income | 53,199 | 35,359 | 106,403 | 69,793 |
| INTEREST EXPENSE | | | | |
| Interest on deposits | 17,496 | 14,456 | 36,206 | 29,096 |
| Interest on borrowings | 2,254 | 1,259 | 4,088 | 2,708 |
| Total interest expense | 19,750 | 15,715 | 40,294 | 31,804 |
| Net interest income | 33,449 | 19,644 | 66,109 | 37,989 |
| Provision for (reversal of) credit losses | 275 | 141 | (1,833) | (3,455) |
| Net interest income after provision for (reversal of) credit losses | 33,174 | 19,503 | 67,942 | 41,444 |
| NONINTEREST INCOME | | | | |
| Service charges on deposit accounts | 933 | 788 | 1,889 | 1,583 |
| Gain on call or sale of investment securities, net | 12 | — | 12 | — |
| Loss on sale or disposition of bank premises and equipment, net | — | — | — | (3) |
| Gain (loss) on sale of other real estate owned, net | 4 | 29 | (80) | 29 |
| Gain on sale of loans | — | — | 26 | — |
| Interchange fees | 524 | 401 | 1,083 | 791 |
| Income from bank owned life insurance | 696 | 476 | 1,360 | 924 |
| Change in the fair value of equity securities | 177 | 53 | 307 | (23) |
| Other operating income | 752 | 879 | 1,481 | 1,336 |
| Total noninterest income | 3,098 | 2,626 | 6,078 | 4,637 |
| NONINTEREST EXPENSE | | | | |
| Depreciation and amortization | 1,333 | 710 | 2,677 | 1,431 |
| Salaries and employee benefits | 13,430 | 10,257 | 26,377 | 19,860 |
| Occupancy | 955 | 675 | 1,943 | 1,316 |
| Data processing | 1,223 | 914 | 2,437 | 1,811 |
| Marketing | 130 | 112 | 229 | 223 |
| Professional fees | 924 | 468 | 1,723 | 1,059 |
| Acquisition expense | 2,582 | 182 | 4,310 | 341 |
| Other operating expenses | 4,087 | 3,382 | 7,807 | 6,897 |
| Total noninterest expense | 24,664 | 16,700 | 47,503 | 32,938 |
| Income before income tax expense | 11,608 | 5,429 | 26,517 | 13,143 |
| Income tax expense | 2,136 | 935 | 5,021 | 2,356 |
| Net income | 9,472 | 4,494 | 21,496 | 10,787 |
| Preferred stock dividends declared | 528 | — | 1,056 | — |
| Net income available to common shareholders | $8,944 | $4,494 | $20,440 | $10,787 |
| EARNINGS PER COMMON SHARE | | | | |
| Basic earnings per common share | $0.64 | $0.46 | $1.48 | $1.10 |
| Diluted earnings per common share | 0.61 | 0.46 | 1.38 | 1.09 |
*See accompanying notes to the consolidated financial statements.*
**[](# "CompIncome")INVESTAR HOLDING CORPORATION**
### CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
_(Amounts in thousands) · (Unaudited)_
| Line item | Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
| --- | --- | --- | --- | --- |
| Net income | $9,472 | $4,494 | $21,496 | $10,787 |
| Other comprehensive (loss) income: | | | | |
| Investment securities: | | | | |
| Unrealized (loss) gain, available for sale, net of tax (benefit) expense of ($188), $339, ($565) and $1,821, respectively | (696) | 1,253 | (2,084) | 6,731 |
| Reclassification of realized gain, available for sale, net of tax expense of $3, $0, $3 and $0, respectively | (9) | — | (9) | — |
| Total other comprehensive (loss) income | (705) | 1,253 | (2,093) | 6,731 |
| Total comprehensive income | $8,767 | $5,747 | $19,403 | $17,518 |
*See accompanying notes to the consolidated financial statements.*
**[](# "Equity")INVESTAR HOLDING CORPORATION**
### CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS**’ **EQUITY
_(Amounts in thousands, except per share data) · (Unaudited)_
| Three months ended June 30, 2026: | Preferred Stock | Common Stock | Surplus | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity |
| --- | --- | --- | --- | --- | --- | --- |
| Balance, March 31, 2026 | $30,353 | $13,741 | $247,156 | $160,494 | $(37,110) | $414,634 |
| Common stock issued in acquisition of Wichita Falls Bancshares, Inc., net of issuance costs | — | — | (24) | — | — | (24) |
| Surrendered shares | — | (30) | (787) | — | — | (817) |
| Preferred stock dividends declared, $16.25 per share | — | — | — | (528) | — | (528) |
| Common stock dividends declared, $0.12 per share | — | — | — | (1,654) | — | (1,654) |
| Stock-based compensation | — | 94 | 423 | — | — | 517 |
| Shares repurchased | — | (28) | (735) | — | — | (763) |
| Net income | — | — | — | 9,472 | — | 9,472 |
| Other comprehensive loss, net | — | — | — | — | (705) | (705) |
| Balance, June 30, 2026 | $30,353 | $13,777 | $246,033 | $167,784 | $(37,815) | $420,132 |
| Three months ended June 30, 2025: | Common Stock | Surplus | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total Stockholders’ Equity |
| --- | --- | --- | --- | --- | --- |
| Balance, March 31, 2025 | $9,821 | $146,598 | $138,197 | $(42,879) | $251,737 |
| Surrendered shares | (24) | (391) | — | — | (415) |
| Options exercised | 4 | 59 | — | — | 63 |
| Common stock dividends declared, $0.11 per share | — | — | (1,083) | — | (1,083) |
| Stock-based compensation | 75 | 439 | — | — | 514 |
| Shares repurchased | (36) | (598) | — | — | (634) |
| Net income | — | — | 4,494 | — | 4,494 |
| Other comprehensive income, net | — | — | — | 1,253 | 1,253 |
| Balance, June 30, 2025 | $9,840 | $146,107 | $141,608 | $(41,626) | $255,929 |
*See accompanying notes to the consolidated financial statements.*
**INVESTAR HOLDING CORPORATION**
### CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS**’ **EQUITY, CONTINUED
_(Amounts in thousands, except per share data) · (Unaudited)_
| Six months ended June 30, 2026: | Preferred Stock | Common Stock | Surplus | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity |
| --- | --- | --- | --- | --- | --- | --- |
| Balance, December 31, 2025 | $30,353 | $9,799 | $146,133 | $150,510 | $(35,722) | $301,073 |
| Common stock issued in acquisition of Wichita Falls Bancshares, Inc., net of issuance costs | — | 3,955 | 101,706 | — | — | 105,661 |
| Surrendered shares | — | (33) | (845) | — | — | (878) |
| Options exercised | — | 29 | 386 | — | — | 415 |
| Preferred stock dividends declared, $32.50 per share | — | — | — | (1,056) | — | (1,056) |
| Common stock dividends declared, $0.23 per share | — | — | — | (3,166) | — | (3,166) |
| Stock-based compensation | — | 108 | 882 | — | — | 990 |
| Shares repurchased | — | (81) | (2,229) | — | — | (2,310) |
| Net income | — | — | — | 21,496 | — | 21,496 |
| Other comprehensive loss, net | — | — | — | — | (2,093) | (2,093) |
| Balance, June 30, 2026 | $30,353 | $13,777 | $246,033 | $167,784 | $(37,815) | $420,132 |
| Six months ended June 30, 2025: | Common Stock | Surplus | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total Stockholders’ Equity |
| --- | --- | --- | --- | --- | --- |
| Balance, December 31, 2024 | $9,828 | $146,890 | $132,935 | $(48,357) | $241,296 |
| Surrendered shares | (56) | (931) | — | — | (987) |
| Options exercised | 34 | 501 | — | — | 535 |
| Common stock dividends declared, $0.215 per share | — | — | (2,114) | — | (2,114) |
| Stock-based compensation | 105 | 859 | — | — | 964 |
| Shares repurchased | (71) | (1,212) | — | — | (1,283) |
| Net income | — | — | 10,787 | — | 10,787 |
| Other comprehensive income, net | — | — | — | 6,731 | 6,731 |
| Balance, June 30, 2025 | $9,840 | $146,107 | $141,608 | $(41,626) | $255,929 |
*See accompanying notes to the consolidated financial statements.*
**[](# "CashFlows")INVESTAR HOLDING CORPORATION**
### CONSOLIDATED STATEMENTS OF CASH FLOWS
_(Amounts in thousands) · (Unaudited)_
| Line item | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
| --- | --- | --- |
| Net income: | $21,496 | $10,787 |
| Adjustments to reconcile net income to net cash provided by operating activities: | | |
| Depreciation and amortization | 2,677 | 1,431 |
| Reversal of credit losses | (1,833) | (3,455) |
| Net (accretion) amortization of purchase accounting adjustments | (5,889) | 26 |
| Provision for other real estate owned | 75 | 296 |
| Net accretion of securities | (827) | (200) |
| Gain on call or sale of investment securities, net | (12) | — |
| Loss on sale or disposition of bank premises and equipment, net | — | 3 |
| Loss (gain) on sale of other real estate owned, net | 80 | (29) |
| Gain on sale of loans | (26) | — |
| FHLB stock dividend | (165) | (146) |
| Stock-based compensation | 990 | 964 |
| Deferred taxes | 2,685 | (28) |
| Net change in value of BOLI | (1,360) | (924) |
| Amortization of subordinated debt issuance costs | 21 | 21 |
| Change in the fair value of equity securities | (307) | 23 |
| Net change in: | | |
| Accrued interest receivable | 588 | 395 |
| Other assets | (3,023) | (585) |
| Accrued taxes and other liabilities | 1,217 | (923) |
| Net cash provided by operating activities | 16,387 | 7,656 |
| Cash flows from investing activities: | | |
| Proceeds from sales of investment securities AFS | 50,481 | — |
| Purchases of securities AFS | (225,270) | (39,610) |
| Proceeds from maturities, prepayments and calls of investment securities AFS | 183,375 | 23,777 |
| Proceeds from maturities, prepayments and calls of investment securities HTM | 1,319 | 1,156 |
| Proceeds from redemption or sale of nonmarketable equity securities | 2,890 | 2,315 |
| Purchases of nonmarketable equity securities | (5,833) | (748) |
| Purchases of equity securities at fair value | (450) | — |
| Net decrease in loans | 81,106 | 21,147 |
| Proceeds from sales of other real estate owned | 839 | 272 |
| Purchases of bank premises and equipment | (1,198) | (431) |
| Purchases of other investments | (102) | (80) |
| Distributions from other investments | 298 | 117 |
| Cash acquired from acquisition of Wichita Falls Bancshares, Inc., net of cash paid | 75,708 | — |
| Net cash provided by investing activities | 163,163 | 7,915 |
- **INVESTAR HOLDING CORPORATION**
- **CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED**
- **(Amounts in thousands)**
- **(Unaudited)**
| Line item | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
| --- | --- | --- |
| Cash flows from financing activities: | | |
| Net decrease in customer deposits | (159,161) | (7,752) |
| Net increase in repurchase agreements | 6,199 | 2,647 |
| Net increase in short-term FHLB advances | — | 2,785 |
| Proceeds from long-term FHLB advances | 60,000 | — |
| Repayment of long-term FHLB advances | (40,064) | — |
| Cash dividends paid on common stock | (2,590) | (2,063) |
| Cash dividends paid on preferred stock | (1,056) | — |
| Proceeds from stock options exercised | 374 | 63 |
| Payments to repurchase common stock | (2,310) | (1,283) |
| Advanced proceeds from preferred stock offering | — | 17,334 |
| Repayment of long-term debt | (10,120) | — |
| Payments of stock issuance costs | (24) | — |
| Net cash (used in) provided by financing activities | (148,752) | 11,731 |
| Net change in cash and cash equivalents | 30,798 | 27,302 |
| Cash and cash equivalents, beginning of period | 41,505 | 27,922 |
| Cash and cash equivalents, end of period | $$72,303 | 55,224 |
| SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES | | |
| Transfer from loans to other real estate owned | $$2,367 | 951 |
| Common stock dividends payable | 1,653 | 1,082 |
| Preferred stock dividends payable | 528 | — |
*See accompanying notes to the consolidated financial statements.*
**[](# "Notes")INVESTAR HOLDING CORPORATION**
### **NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
**[](# "Note_1")NOTE *1.* SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
**Nature of Operations**
The Company is a financial holding company, headquartered in Baton Rouge, Louisiana that provides full banking services, excluding trust services, through its wholly-owned banking subsidiary, Investar Bank, National Association, a national bank, primarily to meet the needs of individuals, professionals and small to medium-sized businesses. The Company’s primary markets are in south Louisiana, Texas and Alabama. At *June 30, 2026*, the Company operated
20 full service branches located in Louisiana, ten full service branches located in Texas and six full service branches located in Alabama and had *421* full-time equivalent employees.
**Basis of Presentation**
The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with GAAP for interim financial information and the instructions to Form *10*-Q and Article *10* of Regulation S-*X.* Accordingly, they do *not* include information or footnotes necessary for a complete presentation of financial position, results of operations, and cash flows in conformity with GAAP. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of the financial statements have been included. The results of operations for the *three* and *six* month periods ended *June 30, 2026* are *not* necessarily indicative of the results that *may* be expected for the entire fiscal year. These statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended *December 31, 2025*, including the notes thereto, which were included as part of the Company’s Annual Report.
Prior period consolidated financial statements are reclassified whenever necessary to conform to the current period presentation. *No* reclassifications of prior period balances were material to the consolidated financial statements.
**Principles of Consolidation**
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank. All significant intercompany accounts and transactions have been eliminated in consolidation.
**Segment Reporting**
The Company determined that all of its banking operations serve a similar customer base, offer similar products and services, and are managed through similar processes. Therefore, the Company’s banking operations are aggregated into one reportable operating segment, which generates income principally from interest on loans and, to a lesser extent, securities investments, as well as from fees charged in connection with various loan and deposit services. The CODM is the Chief Executive Officer, who for the purposes of assessing performance, making operating decisions, and allocating Company resources, regularly reviews net income as reported in the accompanying consolidated statements of income. The level of disaggregation and amounts of significant segment income and expenses that are regularly provided to the CODM are the same as those presented in the accompanying consolidated statements of income. Likewise, the measure of segment assets is reported on the accompanying consolidated balance sheets as total assets.
**Use of Estimates**
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material.
Material estimates that are particularly susceptible to significant change relate to the determination of the ACL. While management uses available information to recognize credit losses on loans, future additions to the 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 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.
*11*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
**Accounting Standards Adopted in *2026***
*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 early adopted ASU *2025*-*08* for the annual reporting period beginning on *January 1, 2026.* On *January 1, 2026,* for PSLs acquired from WFB, the Company established an ACL of $11.6 million and recorded it as part of their initial amortized cost. For additional information, see Note *2.* Business Combinations and Note *5.* Loans and Allowance for Credit Losses.
**Recent Accounting Pronouncements**
*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. ASU *2024*-*03* is *not* expected to have a significant impact on our financial statements.
*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.
*12*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
**[](#)NOTE *2.* BUSINESS COMBINATIONS**
On *January 1, 2026,* the Company completed the acquisition of WFB and its wholly-owned subsidiary, FNB, headquartered in Wichita Falls, Texas, with *seven* branches (including the headquarters) serving the surrounding areas. All of the issued and outstanding shares of WFB common stock were converted into aggregate merger consideration consisting of $7.2 million in cash and 3,955,272 shares of Company common stock for an aggregate transaction value of $112.9 million. After fair value adjustments, including total adjustments of ($0.2 million) to the fair value of total assets, recorded in the three months ended *June 30, 2026,* the acquisition added $1.15 billion in total assets, including $950.2 million in net loans, and $1.02 billion in deposits. As consideration paid was in excess of the net fair value of acquired assets, the Company recorded $18.2 million of goodwill, *none* of which is anticipated to be deductible for tax purposes. Goodwill resulted from a combination of synergies and cost savings, and further expansion into Texas.
The table below shows the allocation of the consideration paid for WFB’s common equity to the acquired identifiable assets and liabilities assumed and the goodwill generated from the transaction (dollars in thousands, except per share data). The fair values listed below are subject to refinement for up to *one* year after the closing date of the acquisition as additional information becomes available.
| Preliminary purchase price allocation: | |
| --- | --- |
| Shares of Investar common stock to be issued for shares of WFB common stock | 3,955,272 |
| Price per share, based on Investar common stock price as of December 31, 2025 | $26.72 |
| Fair value of Investar common stock issued | $105,685 |
| Cash consideration | 7,202 |
| Total consideration | $112,887 |
| Fair value of assets acquired: | |
| Cash and cash equivalents | $82,910 |
| Investment securities | 51,455 |
| Net loans | 950,235 |
| Nonmarketable equity securities | 3,621 |
| Bank premises and equipment | 19,834 |
| Core deposit intangible asset | 13,570 |
| BOLI | 13,751 |
| Other assets | 10,034 |
| Total assets acquired | 1,145,410 |
| Fair value of liabilities acquired: | |
| Deposits | 1,023,365 |
| Repurchase agreements | 1,193 |
| Notes payable | 9,163 |
| Other borrowings | 15,051 |
| Other liabilities | 1,930 |
| Total liabilities assumed | 1,050,702 |
| Fair value of net assets acquired | 94,708 |
| Goodwill | $18,179 |
**Loans**
The Company adopted ASU *2025*-*08* for the annual reporting period beginning on *January 1, 2026.* Accordingly, the initial estimate of expected credit losses recognized in the ACL included both PCD and non-PCD loans which were deemed PSLs.
The following table includes principal balance and the fair value of the loans acquired from WFB (dollars in thousands).
| Line item | Principal Balance Acquired | Non-Credit Premium/(Discount) | ACL | Fair Value of Net Loans |
| --- | --- | --- | --- | --- |
| PCD loans | $1,441 | $(97) | $(143) | $1,201 |
| PSL loans | 982,806 | (22,213) | (11,559) | 949,034 |
| Total | $984,247 | $(22,310) | $(11,702) | $950,235 |
The Company has determined it was impracticable to disclose stand-alone revenues and net income for legacy WFB since *January* *1,* *2026* due to the streamlining and integration of the operating activities during the *first* quarter of *2026.* The Company has also determined it was impracticable to include pro forma information for the WFB acquisition due to the cost versus benefit of including such disclosures.
**Acquisition Expense**
Acquisition related costs of $2.6 million and $4.3 million are included in “Acquisition expense” in the accompanying consolidated statements of income for the *three* and *six* months ended *June 30, 2026*, respectively, and $0.2 million and $0.3 million for the *three* and *six* months ended *June 30, 2025*, respectively. These costs include system conversion and integrating operations charges and legal and consulting expenses.
*13*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
**[](# "Note_2")NOTE *3.* EARNINGS PER COMMON 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.
The following is a summary of the information used in the computation of basic and diluted earnings per common share for the *three* and *six* months ended *June 30, 2026* and *2025* (in thousands, except share and per share data).
| Line item | Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
| --- | --- | --- | --- | --- |
| Net income | $9,472 | $4,494 | $21,496 | $10,787 |
| Less: preferred stock dividends declared | 528 | — | 1,056 | — |
| Net income available to common shareholders | $8,944 | $4,494 | $20,440 | $10,787 |
| Weighted average basic shares outstanding | 13,788,871 | 9,844,351 | 13,775,804 | 9,838,521 |
| Dilutive effect of stock compensation | 203,838 | 114,043 | 209,169 | 100,101 |
| Dilutive effect of Series A Preferred Stock | 1,547,603 | — | 1,547,603 | — |
| Weighted average diluted shares outstanding | 15,540,312 | 9,958,394 | 15,532,576 | 9,938,622 |
| Basic earnings per common share | $0.64 | $0.46 | $1.48 | $1.10 |
| Diluted earnings per common share | $0.61 | $0.46 | $1.38 | $1.09 |
The weighted average shares that have an antidilutive effect in the calculation of diluted earnings per common share and have been excluded from the computations above are shown below.
| Line item | Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
| --- | --- | --- | --- | --- |
| Stock options | — | 4,206 | — | 4,167 |
| RSUs | — | 265 | 315 | 446 |
*14*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
**[](# "Note_3")NOTE *4.* INVESTMENT SECURITIES**
**Debt Securities**
The amortized cost and approximate fair value of investment securities classified as AFS are summarized below as of the dates presented (dollars in thousands).
| June 30, 2026 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value |
| --- | --- | --- | --- | --- |
| Obligations of the U.S. Treasury and U.S. government agencies and corporations | $35,926 | $31 | $(539) | $35,418 |
| Obligations of state and political subdivisions | 18,858 | 38 | (1,590) | 17,306 |
| Corporate bonds | 25,406 | 133 | (1,351) | 24,188 |
| Residential mortgage-backed securities | 299,347 | 235 | (37,734) | 261,848 |
| Commercial mortgage-backed securities | 79,838 | 135 | (7,407) | 72,566 |
| Total | $459,375 | $572 | $(48,621) | $411,326 |
| 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 |
The Company calculates realized gains and losses on sales of debt securities under the specific identification method. Shortly after the acquisition of WFB on *January 1, 2026,* substantially all of the securities from the acquired portfolio were sold at carrying value, resulting in net proceeds of approximately $50.5 million. Proceeds from sales of investment securities classified as AFS and gross gains and losses are summarized below for the periods presented (dollars in thousands).
| Line item | Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
| --- | --- | --- | --- | --- |
| Proceeds from sales | — | — | $50,481 | — |
| Gross gains | — | — | — | — |
| Gross losses | — | — | — | — |
The amortized cost and approximate fair value of investment securities classified as HTM are summarized below as of the dates presented (dollars in thousands).
| June 30, 2026 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value |
| --- | --- | --- | --- | --- |
| Obligations of state and political subdivisions | $45,392 | $2,430 | $(6) | $47,816 |
| Residential mortgage-backed securities | 1,825 | — | (191) | 1,634 |
| Total | $47,217 | $2,430 | $(197) | $49,450 |
| 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 |
Securities are classified in the consolidated balance sheets according to management’s intent. The Company had no securities classified as trading as of *June 30, 2026* or *December 31, 2025*.
*15*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
The approximate fair value of AFS securities and unrealized losses, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, are summarized below as of the dates presented (dollars in thousands).
| Line item | Less than 12 Months | 12 Months or More | Total |
| --- | --- | --- | --- |
| | Unrealized Losses | Unrealized Losses | Unrealized Losses |
| June 30, 2026 | | | |
| Obligations of the U.S. Treasury and U.S. government agencies and corporations | $$(345) | $$(194) | $$(539) |
| Obligations of state and political subdivisions | (96) | (1,494) | (1,590) |
| Corporate bonds | (107) | (1,244) | (1,351) |
| Residential mortgage-backed securities | (1,135) | (36,599) | (37,734) |
| Commercial mortgage-backed securities | (255) | (7,152) | (7,407) |
| Total | $$(1,938) | $$(46,683) | $$(48,621) |
| Line item | Less than 12 Months | 12 Months or More | Total |
| --- | --- | --- | --- |
| | Unrealized Losses | Unrealized Losses | Unrealized Losses |
| December 31, 2025 | | | |
| Obligations of the U.S. Treasury and U.S. government agencies and corporations | $$(18) | $$(195) | $$(213) |
| Obligations of state and political subdivisions | — | (1,497) | (1,497) |
| Corporate bonds | (32) | (1,303) | (1,335) |
| Residential mortgage-backed securities | (97) | (36,089) | (36,186) |
| Commercial mortgage-backed securities | (70) | (7,113) | (7,183) |
| Total | $$(217) | $$(46,197) | $$(46,414) |
At *June 30, 2026*, 774 of the Company’s AFS debt securities had unrealized losses totaling 12.0% of the individual securities’ amortized cost basis and 10.6% of the Company’s total amortized cost basis of the AFS investment securities portfolio. At such date, 597 of the 774 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).
| Line item | Less than 12 Months | 12 Months or More | Total |
| --- | --- | --- | --- |
| | Unrealized Losses | Unrealized Losses | Unrealized Losses |
| June 30, 2026 | | | |
| Obligations of state and political subdivisions | — | $$(6) | $$(6) |
| Residential mortgage-backed securities | — | (191) | (191) |
| Total | — | $$(197) | $$(197) |
| Line item | Less than 12 Months | 12 Months or More | Total |
| --- | --- | --- | --- |
| | Unrealized Losses | Unrealized Losses | Unrealized Losses |
| December 31, 2025 | | | |
| Obligations of state and political subdivisions | — | $$(3) | $$(3) |
| Residential mortgage-backed securities | — | (174) | (174) |
| Total | — | $$(177) | $$(177) |
Unrealized losses are generally due to changes in market interest rates. The Company intends 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 *June 30, 2026* or *December 31, 2025*.
*16*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
The amortized cost and approximate fair value of investment debt securities, by contractual maturity, are shown below as of *June 30, 2026* (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.
| June 30, 2026 | Available for Sale / Amortized Cost | Available for Sale / Fair Value | Held to Maturity / Amortized Cost | Held to Maturity / Fair Value |
| --- | --- | --- | --- | --- |
| Due within one year | $6,543 | $6,533 | — | — |
| Due after one year through five years | 29,274 | 28,237 | 2,037 | 2,032 |
| Due after five years through ten years | 51,419 | 49,577 | 7,255 | 7,329 |
| Due after ten years | 372,139 | 326,979 | 37,925 | 40,089 |
| Total debt securities | $459,375 | $411,326 | $47,217 | $49,450 |
Accrued interest receivable on the Company’s investment securities was $2.6 million and $2.2 million at *June 30, 2026* and *December 31, 2025*, respectively, and is included in “Accrued interest receivable” on the accompanying consolidated balance sheets.
At *June 30, 2026*, securities with a carrying value of $125.2 million were pledged to secure certain deposits, borrowings, and other liabilities, compared to $75.6 million in pledged securities at *December 31, 2025*.
**Equity Securities**
Equity securities at fair value include marketable securities in corporate stocks and mutual funds and totaled $4.1 million and $3.4 million at *June 30, 2026* and *December 31, 2025*, respectively.
Nonmarketable equity securities primarily consist of FHLB stock and FRB stock. Members of the FHLB and FRB are required to own a certain amount of stock based on the level of borrowings and other factors and *may* invest in additional amounts. FHLB stock and FRB stock are carried at cost, restricted as to redemption, and periodically evaluated for impairment based on the ultimate recovery of par value. Both cash and stock dividends are reported as income. Nonmarketable equity securities also include investments in other correspondent banks including Independent Bankers Financial Corporation and First National Bankers Bank stock. These investments are carried at cost which approximates fair value. The balance of nonmarketable equity securities at *June 30, 2026* and *December 31, 2025* was $23.8 million and $17.0 million, respectively.
*17*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
**[](# "Note_4")NOTE *5.* 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).
| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| Construction and development | $261,799 | $147,980 |
| 1-4 Family | 907,385 | 376,238 |
| Multifamily | 144,234 | 130,005 |
| Farmland | 9,850 | 4,788 |
| Commercial real estate | 1,020,728 | 912,268 |
| Total mortgage loans on real estate | 2,343,996 | 1,571,279 |
| Commercial and industrial | 703,279 | 595,263 |
| Consumer | 12,612 | 9,431 |
| Total loans | $3,059,887 | $2,175,973 |
Interest on loans is calculated by using the simple interest method on daily balances of the principal amount outstanding. Loan origination fees, net of direct loan origination costs and commitment fees, are deferred and amortized as an adjustment to yield over the life of the loan, or over the commitment period, as applicable. Unamortized premiums and discounts on loans, included in the total loans balances above, were $17.0 million and $0.1 million at *June 30, 2026* and *December 31, 2025*, respectively, and unearned income, or deferred fees, on loans was $1.5 million and $1.6 million at *June 30, 2026* and *December 31, 2025*, respectively, and is also included in the total loans balance in the table above.
The tables below provide an analysis of the aging of loans as of *June 30, 2026* and *December 31, 2025* (dollars in thousands).
_June 30, 2026_
| | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | 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 | $ | $$256,578 | $2,265 | $2,092 | $864 | $261,799 | 859 |
| 1-4 Family | | 898,481 | 598 | 2,758 | 5,548 | 907,385 | 30 |
| Multifamily | | 144,062 | — | — | 172 | 144,234 | — |
| Farmland | | 9,850 | — | — | — | 9,850 | — |
| Commercial real estate | | 1,011,871 | 6,760 | 114 | 1,983 | 1,020,728 | — |
| Total mortgage loans on real estate | | 2,320,842 | 9,623 | 4,964 | 8,567 | 2,343,996 | 889 |
| Commercial and industrial | | 702,511 | 299 | 264 | 205 | 703,279 | — |
| Consumer | | 12,357 | 133 | 9 | 113 | 12,612 | — |
| Total loans | $ | $$3,035,710 | $10,055 | $5,237 | $8,885 | $3,059,887 | 889 |
_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 |
*18*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
The tables below provide an analysis of nonaccrual loans as of *June 30, 2026* and *December 31, 2025* (dollars in thousands).
_June 30, 2026_
| Line item | Nonaccrual with No Allowance for Credit Loss | Nonaccrual with an Allowance for Credit Loss | Total Nonaccrual Loans |
| --- | --- | --- | --- |
| Construction and development | $674 | $1,627 | $2,301 |
| 1-4 Family | 6,135 | 881 | 7,016 |
| Multifamily | 172 | — | 172 |
| Farmland | — | — | — |
| Commercial real estate | 7,119 | 1,466 | 8,585 |
| Total mortgage loans on real estate | 14,100 | 3,974 | 18,074 |
| Commercial and industrial | 76 | 154 | 230 |
| Consumer | 155 | 3 | 158 |
| Total loans | $14,331 | $4,131 | $18,462 |
_December 31, 2025_
| Line item | 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 |
**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 *six* months ended *June 30, 2026* and *2025*.
**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 *June 30, 2026* and *December 31, 2025*. The types of collateral that secure collateral dependent loans are discussed under “Portfolio Segment Risk Factors” below.
*19*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
**Portfolio Segment Risk Factors**
The following describes the risk characteristics relevant to each of the Company’s loan portfolio segments.
***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 consists of fixed-rate and adjustable-rate 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 adjustable-rate mortgage loans provide an initial fixed interest rate, generally for three, *five* or *seven* years, and then adjust annually thereafter and amortize over a period of up to *30* years. Adjustable-rate mortgage loans generally present different credit risks than fixed-rate mortgage loans primarily because the underlying debt service payments of the borrowers increase as interest rates increase, thereby increasing the potential for delinquency and default. The Company manages these risks through policies and procedures such as limiting loan-to-value ratios at origination, employing experienced underwriting personnel, requiring standards for appraisers, and *not* making subprime loans. In the *third* quarter of *2023,* the Company exited the consumer mortgage origination business.
***Multifamily*** - Multifamily loans are normally made to real estate investors to support permanent financing for multifamily residential income producing properties that rely on the successful operation of the property for repayment. This management mainly involves property maintenance and collection of rents due from tenants. This type of lending carries a lower level of risk compared to other commercial lending. In addition, underwriting requirements for multifamily properties are stricter than for other nonowner-occupied property types. The Company manages this risk by avoiding concentrations with any particular customer. Multifamily loans are primarily secured by *first* liens on multifamily real estate.
***Farmland*** - Farmland loans are often for land improvements related to agricultural endeavors and *may* include construction of new specialized facilities. These loans are usually repaid through the conversion to permanent financing, or if scheduled loan amortization begins, for the long-term benefit of the borrower’s ongoing operations. Underwriting generally involves intensive analysis of the financial strength of the borrower and guarantor, liquidation value of the subject collateral, the associated unguaranteed exposure, and any available secondary sources of repayment, with the greatest emphasis given to a borrower’s capacity to meet cash flow coverage requirements as set forth by Company policies. Farmland loans are primarily secured by raw land.
***Commercial Real Estate*** - Commercial real estate loans are extensions of credit secured by owner occupied and nonowner-occupied collateral. Underwriting generally involves intensive analysis of the financial strength of the borrower and guarantor, liquidation value of the subject collateral, the associated unguaranteed exposure, and any available secondary sources of repayment, with the greatest emphasis given to a borrower’s capacity to meet cash flow coverage requirements as set forth by Company policies. Commercial real estate loans typically depend on the successful operation and management of the businesses that occupy these properties or the financial stability of tenants occupying the properties. Nonowner-occupied commercial real estate loans typically are dependent, in large part, on the owner’s ability to rent the property and the ability of the tenants to pay rent, whereas owner-occupied commercial real estate loans typically are dependent, in large part, on the success of the owner’s business. General market conditions and economic activity *may* impact the performance of these types of loans, including fluctuations in the value of real estate, new job creation trends, and tenant vacancy rates. The Company attempts to limit risk by analyzing a borrower’s cash flow and collateral value on an ongoing basis. The Company also typically requires personal guarantees from the principal owners of the property, supported by a review of their personal financial statements, as an additional means of mitigating risk. The Company manages risk by avoiding concentrations in any *one* business or industry. Commercial real estate loans are primarily secured by retail shopping facilities, office and industrial buildings, healthcare facilities, warehouses, and various special purpose commercial properties.
*20*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
***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 Company policies. Repayment of these loans generally comes from the generation of cash flow as the result of the borrower’s business operations. Commercial lending generally involves different risks from those associated with commercial real estate lending or construction lending. Although commercial loans *may* be collateralized by equipment or other business assets (including real estate, if available as collateral), the repayment of these types of loans depends primarily on the creditworthiness and projected cash flow of the borrower (and any guarantors). Thus, the general business conditions of the local economy and the borrower’s ability to sell its products and services, thereby generating sufficient operating revenue to repay us under the agreed upon terms and conditions, are the chief considerations when assessing the risk of a commercial loan. The liquidation of collateral, if any, is considered a secondary source of repayment because equipment and other business assets *may,* among other things, be obsolete or of limited resale value. The Company actively monitors certain financial measures of the borrower, including advance rate, cash flow, collateral value and other appropriate credit factors. Commercial and industrial loans also include public finance loans made to governmental entities, which can be taxable or tax-exempt, and are generally repaid using pledged revenue sources including income tax, property tax, sales tax, and utility revenue, among other sources. Commercial and industrial loans are primarily secured by accounts receivable, inventory and equipment.
***Consumer*** - Consumer loans are offered by the Company in order to provide a full range of retail financial services to its customers and include auto loans, credit cards, and other consumer installment loans. Typically, the Company evaluates the borrower’s repayment ability through a review of credit scores and an evaluation of debt to income ratios. Repayment of consumer loans depends upon key consumer economic measures and upon the borrower’s financial stability and is more likely to be adversely affected by divorce, job loss, illness and personal hardships than repayment of other loans. A shortfall in the value of any collateral also *may* pose a risk of loss to the Company for these types of loans. Consumer loans include loans primarily secured by vehicles and unsecured loans.
**Credit Quality Indicators**
Loans are categorized into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The following definitions are utilized for risk ratings, which are consistent with the definitions used in supervisory guidance:
***Pass*** - Loans *not* meeting the criteria below are considered Pass. These loans have higher credit characteristics and financial strength. The borrowers at least generate profits and cash flow that are in line with peer and industry standards and have debt service coverage ratios above loan covenants and policy guidelines. For some of these loans, a guaranty from a financially capable party mitigates characteristics of the borrower that might otherwise result in a lower grade.
***Special Mention*** - Loans classified as Special Mention possess some credit deficiencies that need to be corrected to avoid a greater risk of default in the future. For example, financial ratios relating to the borrower *may* have deteriorated. Often, a Special Mention categorization is temporary while certain factors are analyzed or matters addressed before the loan is re-categorized as either Pass or Substandard.
***Substandard*** - Loans classified as Substandard are inadequately protected by the current net worth and paying capacity of the borrower or the liquidation value of any collateral. If deficiencies are *not* addressed, it is likely that this category of loan will result in the Bank incurring a loss. Where a borrower has been unable to adjust to industry or general economic conditions, the borrower’s loan is often categorized as Substandard.
***Doubtful*** - Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
***Loss*** - Loans classified as Loss are considered uncollectible and of such little value that their continuance as recorded assets is *not* warranted. This classification does *not* mean that the assets have absolutely *no* recovery or salvage value, but rather it is *not* practical or desirable to defer writing off these assets.
*21*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
The tables below present the Company’s loan portfolio by year of origination, category, and credit quality indicator as of *June 30, 2026* and *December 31, 2025* (dollars in thousands). Loans acquired are shown in the table by origination year. The Company had an immaterial amount of revolving loans converted to term loans at *June 30, 2026* and *December 31, 2025*.
_June 30, 2026_
| Line item | 2026 | 2025 | 2024 | 2023 | 2022 | Prior | Revolving Loans | Total |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Construction and development | | | | | | | | |
| Pass | $20,483 | $88,704 | $65,911 | $16,111 | $32,705 | $7,335 | $7,616 | $238,865 |
| Special Mention | — | — | — | — | — | — | — | — |
| Substandard | — | 2,265 | — | 6,143 | 4,677 | 54 | 9,795 | 22,934 |
| Total construction and development | $20,483 | $90,969 | $65,911 | $22,254 | $37,382 | $7,389 | $17,411 | $261,799 |
| Current-period gross charge-offs | — | — | — | — | — | — | — | — |
| 1-4 Family | | | | | | | | |
| Pass | $9,219 | $13,508 | $16,092 | $100,618 | $431,439 | $264,093 | $65,311 | $900,280 |
| Special Mention | — | — | — | — | — | — | — | — |
| Substandard | — | — | — | 161 | 3,592 | 3,316 | 36 | 7,105 |
| Total 1-4 family | $9,219 | $13,508 | $16,092 | $100,779 | $435,031 | $267,409 | $65,347 | $907,385 |
| Current-period gross charge-offs | — | — | — | — | $(87) | $(81) | — | $(168) |
| Multifamily | | | | | | | | |
| Pass | $19,799 | $38,994 | $1,540 | $22,435 | $46,418 | $10,535 | $495 | $140,216 |
| Special Mention | — | — | — | — | — | 3,846 | — | 3,846 |
| Substandard | — | — | — | — | — | 172 | — | 172 |
| Total multifamily | $19,799 | $38,994 | $1,540 | $22,435 | $46,418 | $14,553 | $495 | $144,234 |
| Current-period gross charge-offs | — | — | — | — | — | — | — | — |
| Farmland | | | | | | | | |
| Pass | $2,957 | $1,091 | $433 | $418 | $106 | $3,382 | $1,463 | $9,850 |
| Special Mention | — | — | — | — | — | — | — | — |
| Substandard | — | — | — | — | — | — | — | — |
| Total farmland | $2,957 | $1,091 | $433 | $418 | $106 | $3,382 | $1,463 | $9,850 |
| Current-period gross charge-offs | — | — | — | — | — | — | — | — |
| Commercial real estate | | | | | | | | |
| Pass | $80,097 | $144,836 | $47,577 | $73,325 | $273,152 | $360,950 | $15,142 | $995,079 |
| Special Mention | — | — | — | — | — | 5,223 | — | 5,223 |
| Substandard | 184 | 5,923 | 2,427 | 587 | 1,526 | 9,779 | — | 20,426 |
| Total commercial real estate | $80,281 | $150,759 | $50,004 | $73,912 | $274,678 | $375,952 | $15,142 | $1,020,728 |
| Current-period gross charge-offs | — | — | — | — | — | $(123) | — | $(123) |
| Commercial and industrial | | | | | | | | |
| Pass | $68,484 | $111,982 | $27,199 | $22,136 | $104,840 | $30,077 | $338,155 | $702,873 |
| Special Mention | — | — | — | — | — | — | 125 | 125 |
| Substandard | 51 | — | 3 | 41 | 7 | 156 | — | 258 |
| Doubtful | — | — | 23 | — | — | — | — | 23 |
| Total commercial and industrial | $68,535 | $111,982 | $27,225 | $22,177 | $104,847 | $30,233 | $338,280 | $703,279 |
| Current-period gross charge-offs | — | $(193) | — | — | $(5) | — | $(26) | $(224) |
| Consumer | | | | | | | | |
| Pass | $3,619 | $3,323 | $2,168 | $1,340 | $680 | $620 | $686 | $12,436 |
| Special Mention | — | — | — | — | — | — | — | — |
| Substandard | — | 3 | 66 | 41 | 4 | 47 | 15 | 176 |
| Total consumer | $3,619 | $3,326 | $2,234 | $1,381 | $684 | $667 | $701 | $12,612 |
| Current-period gross charge-offs | $(47) | $(12) | $(8) | $(5) | — | — | $(9) | $(81) |
| Total loans | | | | | | | | |
| Pass | $204,658 | $402,438 | $160,920 | $236,383 | $889,340 | $676,992 | $428,868 | $2,999,599 |
| Special Mention | — | — | — | — | — | 9,069 | 125 | 9,194 |
| Substandard | 235 | 8,191 | 2,496 | 6,973 | 9,806 | 13,524 | 9,846 | 51,071 |
| Doubtful | — | — | 23 | — | — | — | — | 23 |
| Total loans | $204,893 | $410,629 | $163,439 | $243,356 | $899,146 | $699,585 | $438,839 | $3,059,887 |
| Current-period gross charge-offs | $(47) | $(205) | $(8) | $(5) | $(92) | $(204) | $(35) | $(596) |
*22*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
_December 31, 2025_
| Line item | 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) |
The Company had *no* loans that were classified as Loss at *June 30, 2026* and *no* loans that were classified as Doubtful or Loss at *December 31, 2025*.
*23*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
**Loan Participations and Sold Loans**
Loan participations and whole loans sold to and serviced for others are *not* included in the accompanying consolidated balance sheets, the balances of which were $47.3 million and $44.7 million at *June 30, 2026* and *December 31, 2025*, respectively. The total unpaid principal balances of loans where participating interests have been sold were approximately $237.8 million and $239.2 million at *June 30, 2026* and *December 31, 2025*, respectively.
**Loans to Related Parties**
In the ordinary course of business, the Company makes loans to related parties including its executive officers, principal stockholders, directors and their immediate family members, as well as to companies of which these individuals are principal owners. Loans outstanding to such related party borrowers amounted to approximately $33.8 million and $34.7 million as of *June 30, 2026* and *December 31, 2025*, respectively. No related party loans were classified as nonperforming or nonaccrual at *June 30, 2026* or *December 31, 2025*.
The table below shows the aggregate principal balance of loans to such related parties as of the dates presented (dollars in thousands).
| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| Balance, beginning of period | $34,749 | $43,647 |
| New loans/changes in relationship | 79 | 231 |
| Repayments/changes in relationship | (1,000) | (9,129) |
| Balance, end of period | $33,828 | $34,749 |
**Allowance for Credit Losses**
The CECL methodology requires that lifetime expected credit losses be recorded at the time the financial asset is originated or acquired, and be adjusted each period as a provision for credit losses for changes in expected lifetime credit losses. The Company developed a CECL model methodology that calculates expected credit losses over the life of the portfolio by analyzing the composition, characteristics and quality of the loan portfolio, as well as prevailing economic conditions and forecasts. The CECL calculation estimates credit losses using a combination of discounted cash flow and remaining life analyses, 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. Management has determined that *four* quarters represents a reasonable and supportable forecast period. To the extent the lives of the loans in the portfolio extend beyond the period for which a reasonable and supportable forecast can be made, when necessary, the model reverts back to the historical loss rates adjusted for qualitative factors related to current conditions using a *four*-quarter reversion period. The Company evaluates the adequacy of the ACL on a quarterly basis.
The ACL is comprised of reserves measured on a collective (pool) basis based on a lifetime loss-rate model when similar risk characteristics exist. For each pool of loans, the Company evaluates and applies qualitative adjustments to the calculated ACL based on several factors, including, but *not* limited to, changes in current and expected future economic conditions, changes in the nature and volume of the portfolio, changes in levels of concentrations, changes in the volume and severity of past due loans, changes in lending policies and personnel, changes in the competitive and regulatory environment of the banking industry, and changes in other external factors. Loans that do *not* share similar risk characteristics with other loans are excluded from the loan pools and individually evaluated for impairment. For collateral dependent loans where the borrower is experiencing financial difficulty, which the Company evaluates independently from the loan pool, the expected credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral, which is based on *third* party appraisals. Individually evaluated loans that are *not* collateral dependent are evaluated based on a discounted cash flow methodology. Credits deemed uncollectible are charged to the ACL. Provisions for credit losses and recoveries on loans previously charged off are adjustments to the ACL.
*24*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
The Company made the accounting policy election to exclude accrued interest receivable from the amortized cost of loans and the estimate of the ACL. Accrued interest receivable on the Company’s loans was $16.2 million and $12.1 million at *June 30, 2026* and *December 31, 2025*, respectively, and is included in “Accrued interest receivable” on the accompanying consolidated balance sheets.
The table below shows a summary of the activity in the ACL for the *three* and *six* months ended *June 30, 2026* and *2025* (dollars in thousands).
| Line item | Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
| --- | --- | --- | --- | --- |
| Balance, beginning of period | $35,985 | $26,435 | $26,349 | $26,721 |
| ACL on PCD loans at acquisition | — | — | 143 | — |
| ACL on PSL loans at acquisition | — | — | 11,559 | — |
| Provision for (reversal of) credit losses on loans(1) | 374 | 172 | (1,428) | (3,523) |
| Charge-offs | (229) | (131) | (596) | (258) |
| Recoveries | 121 | 144 | 224 | 3,680 |
| Balance, end of period | $36,251 | $26,620 | $36,251 | $26,620 |
(*1*) For the *three* months ended *June 30, 2026*, the $0.3 million provision for credit losses on the consolidated statement of income includes a $0.4 million provision for credit losses on loans and a $0.1 million reversal of credit losses on unfunded loan commitments. For the *six* months ended *June 30, 2026*, the $1.8 million reversal of credit losses on the consolidated statement of income includes a $1.4 million reversal of credit losses on loans and a $0.4 million reversal of credit losses on unfunded loan commitments. For the *three* months ended *June 30, 2025*, the $0.1 million provision for credit losses on the consolidated statement of income includes a $0.2 million provision for credit losses on loans and a $31,000 reversal of credit losses on unfunded loan commitments. For the *six* months ended *June 30, 2025*, the $3.5 million reversal of credit losses on the consolidated statement of income includes a $3.5 million reversal of credit losses on loans and a $68,000 provision for credit losses on unfunded loan commitments.
The provision for credit losses on loans for the *three* months ended *June 30, 2026* was primarily due to adjustments to qualitative factors, partially offset by a decrease in total loans. The reversal of credit losses on loans for the *six* months ended *June 30, 2026* was primarily due to a decrease in total loans during the period, changes in the economic forecast and the completion of the CECL allowance model recalibration. The provision for credit losses on loans for the *three* months ended *June 30, 2025* was primarily due to changes in the economic forecast and loan mix. The reversal of credit losses on loans for the *six* months ended *June 30, 2025* was primarily due to a $3.3 million recovery during the *first* quarter of *2025* of loans previously charged off as a result of a property insurance settlement related to *one* loan relationship that became impaired in the *third* quarter of *2021* as a result of Hurricane Ida.
*25*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
The following tables outline the activity in the ACL by collateral type for the *three* and *six* months ended *June 30, 2026* and *2025*, and show both the allowance and portfolio balances for loans individually and collectively evaluated for impairment as of *June 30, 2026* and *2025* (dollars in thousands).
_Three months ended June 30, 2026_
| | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | Construction & Development | | 1-4 Family | Multifamily | Farmland | Commercial Real Estate | Commercial & Industrial | Consumer | Total |
| Allowance for credit losses: | | | | | | | | | |
| Beginning balance | $ | $$1,355 | $15,922 | $1,146 | $8 | $9,045 | $8,358 | $151 | 35,985 |
| Provision for (reversal of) credit losses on loans | | 254 | 241 | 40 | 2 | 95 | (264) | 6 | 374 |
| Charge-offs | | — | (39) | — | — | (123) | (28) | (39) | (229) |
| Recoveries | | — | 2 | — | — | — | 116 | 3 | 121 |
| Ending balance | $ | $$1,609 | $16,126 | $1,186 | $10 | $9,017 | $8,182 | $121 | 36,251 |
_Three months ended June 30, 2025_
| | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | Construction & Development | | 1-4 Family | Multifamily | Farmland | Commercial Real Estate | Commercial & Industrial | Consumer | Total |
| Allowance for credit losses: | | | | | | | | | |
| Beginning balance | $ | $$1,258 | $6,552 | $1,497 | $8 | $12,018 | $5,002 | $100 | 26,435 |
| Provision for (reversal of) credit losses on loans | | 55 | (198) | (3) | (4) | (14) | 325 | 11 | 172 |
| Charge-offs | | — | — | — | — | — | (102) | (29) | (131) |
| Recoveries | | — | 80 | — | 1 | 8 | 38 | 17 | 144 |
| Ending balance | $ | $$1,313 | $6,434 | $1,494 | $5 | $12,012 | $5,263 | $99 | 26,620 |
_Six months ended June 30, 2026_
| | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | Construction & Development | | 1-4 Family | Multifamily | Farmland | Commercial Real Estate | Commercial & Industrial | Consumer | Total |
| Allowance for credit losses: | | | | | | | | | |
| Beginning balance | $ | $$1,327 | $6,053 | $1,814 | $6 | $11,388 | $5,680 | $81 | 26,349 |
| ACL on PCD loans at acquisition | | — | 109 | — | — | — | 15 | 19 | 143 |
| ACL on PSL loans at acquisition | | 455 | 9,344 | 51 | 2 | 874 | 783 | 50 | 11,559 |
| (Reversal of) provision for credit losses on loans | | (173) | 716 | (679) | 2 | (3,122) | 1,787 | 41 | (1,428) |
| Charge-offs | | — | (168) | — | — | (123) | (224) | (81) | (596) |
| Recoveries | | — | 72 | — | — | — | 141 | 11 | 224 |
| Ending balance | $ | $$1,609 | $16,126 | $1,186 | $10 | $9,017 | $8,182 | $121 | 36,251 |
| Ending allowance balance for loans individually evaluated for impairment | | 58 | 148 | — | — | 149 | 66 | 3 | 424 |
| Ending allowance balance for loans collectively evaluated for impairment | | 1,551 | 15,978 | 1,186 | 10 | 8,868 | 8,116 | 118 | 35,827 |
| Loans receivable: | | | | | | | | | |
| Balance of loans individually evaluated for impairment | | 2,301 | 7,016 | 172 | — | 8,585 | 230 | 158 | 18,462 |
| Balance of loans collectively evaluated for impairment | | 259,498 | 900,369 | 144,062 | 9,850 | 1,012,143 | 703,049 | 12,454 | 3,041,425 |
| Total period-end balance | $ | $$261,799 | $907,385 | $144,234 | $9,850 | $1,020,728 | $703,279 | $12,612 | 3,059,887 |
_Six months ended June 30, 2025_
| | | | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | Construction & Development | | 1-4 Family | Multifamily | Farmland | Commercial Real Estate | Commercial & Industrial | Consumer | Total |
| Allowance for credit losses: | | | | | | | | | |
| Beginning balance | $ | $$1,145 | $5,603 | $1,185 | $8 | $11,759 | $6,933 | $88 | 26,721 |
| Provision for (reversal of) credit losses on loans | | 167 | 766 | 309 | (4) | (3,069) | (1,737) | 45 | (3,523) |
| Charge-offs | | — | (23) | — | — | — | (180) | (55) | (258) |
| Recoveries | | 1 | 88 | — | 1 | 3,322 | 247 | 21 | 3,680 |
| Ending balance | $ | $$1,313 | $6,434 | $1,494 | $5 | $12,012 | $5,263 | $99 | 26,620 |
| Ending allowance balance for loans individually evaluated for impairment | | — | 255 | — | — | 150 | — | 3 | 408 |
| Ending allowance balance for loans collectively evaluated for impairment | | 1,313 | 6,179 | 1,494 | 5 | 11,862 | 5,263 | 96 | 26,212 |
| Loans receivable: | | | | | | | | | |
| Balance of loans individually evaluated for impairment | | 23 | 3,956 | — | — | 3,323 | 83 | 68 | 7,453 |
| Balance of loans collectively evaluated for impairment | | 141,631 | 383,840 | 102,569 | 4,519 | 924,868 | 531,377 | 10,098 | 2,098,902 |
| Total period-end balance | $ | $$141,654 | $387,796 | $102,569 | $4,519 | $928,191 | $531,460 | $10,166 | 2,106,355 |
**Loan Modifications to Borrowers Exper****iencing Financial Difficulty**
Occasionally, the Company modifies loans to borrowers in financial distress by providing certain concessions, such as principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, a term extension, or a combination of such concessions. Modifications that do *not* impact the contractual payment 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 *six* months ended *June 30, 2026* and *2025*, the Company did *not* provide any modifications under these circumstances to borrowers experiencing financial difficulty.
*26*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
**[](#)NOTE *6.* 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 *June 30, 2026* and *December 31, 2025*, “Goodwill and other intangible assets, net” in the accompanying consolidated balance sheets totaled $71.7 million and $41.2 million, respectively, and included no accumulated impairment losses.
The carrying amount of goodwill at *June 30, 2026* and *December 31, 2025* was $58.3 million and $40.1 million, respectively. The Company recorded $18.2 million of goodwill during *2026,* related to the acquisition of WFB. The Company reviews the carrying value of goodwill and indefinite-lived intangible assets at least annually, or more frequently if certain impairment indicators exist. No goodwill impairment was recorded during the periods presented.
The table below shows a summary of goodwill activity for the periods presented (dollars in thousands).
| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| Beginning balance | $40,088 | $40,088 |
| Acquisition of WFB | 18,179 | — |
| Ending balance | $58,267 | $40,088 |
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 Company recorded a core deposit intangible of $13.6 million related to the acquisition of WFB. The table below shows a summary of the core deposit intangible assets as of the dates presented (dollars in thousands).
| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| Gross carrying amount | $21,055 | $7,486 |
| Accumulated amortization | (7,718) | (6,490) |
| Net carrying amount | $13,337 | $996 |
Amortization expense for the core deposit intangible assets recorded in “Depreciation and amortization” in the accompanying consolidated statements of income totaled approximately $0.6 million and $1.2 million for the *three* and *six* months ended *June 30, 2026*, respectively, and $0.1 million and $0.3 million for the *three* and *six* months ended *June 30, 2025*, 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 9.1 years.
| Remainder of 2026 | 1,198 |
| --- | --- |
| 2027 | 1,939 |
| 2028 | 1,702 |
| 2029 | 1,475 |
| 2030 | 1,366 |
| Thereafter | 5,657 |
| Total | $13,337 |
The trademark intangible had a carrying value of $0.1 million at *June 30, 2026* and *December 31, 2025*.
*27*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
**[](#)NOTE *7.* STOCKHOLDERS**’ **EQUITY**
***Accumulated Other Comprehensive (Loss) Income***
Activity within the balances in accumulated other comprehensive (loss) income, net is shown in the tables below (dollars in thousands).
| Three months ended June 30, 2026 | AFS Securities |
| --- | --- |
| Balance at beginning of period | $(37,110) |
| Unrealized loss, net | (696) |
| Reclassification of realized gain, net | (9) |
| Balance at end of period | $(37,815) |
| Three months ended June 30, 2025 | AFS Securities |
| Balance at beginning of period | $(42,879) |
| Unrealized gain, net | 1,253 |
| Balance at end of period | $(41,626) |
| Six months ended June 30, 2026 | AFS Securities |
| --- | --- |
| Balance at beginning of period | $(35,722) |
| Unrealized loss, net | (2,084) |
| Reclassification of realized gain, net | (9) |
| Balance at end of period | $(37,815) |
| Six months ended June 30, 2025 | AFS Securities |
| Balance at beginning of period | $(48,357) |
| Unrealized gain, net | 6,731 |
| Balance at end of period | $(41,626) |
*28*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
**[](#)NOTE *8.* STOCK-BASED COMPENSATION**
*Equity Incentive Plan*. The Company’s Second Amended and Restated *2017* Long-Term Incentive Compensation Plan (the “Plan”) authorizes the grant of various types of equity awards, such as restricted stock, RSUs, stock options and stock appreciation rights to eligible participants, which include all of the Company’s employees, non-employee directors, and consultants. Under the Plan, a total of 1,800,000 shares of common stock are reserved, 600,000 of which were authorized in *2021* and 600,000 of which were authorized in *2026,* for issuance to eligible participants pursuant to equity awards under the Plan. The Plan is administered by the Compensation Committee of the Board, which determines, within the provisions of the Plan, those eligible employees to whom, and the times at which, equity awards will be granted. The Compensation Committee, in its discretion, *may* delegate its authority and duties under the Plan to specified officers; however, only the Compensation Committee *may* approve the terms of equity awards to the Company’s executive officers and directors. At *June 30, 2026*, approximately 718,429 shares remain available for grant under the Plan.
***Stock Options***
The Company grants stock options to key personnel that vest in one-*fifth* increments on each of the *first* *five* anniversaries of the grant date, and the maximum option term cannot exceed ten years measured from the grant date.
The Company uses a Black-Scholes option pricing model to estimate the fair value of stock-based awards. The Black-Scholes option pricing model incorporates various subjective assumptions, including expected term and expected volatility. Expected volatility was determined based on the historical volatilities of the Company’s common stock. The Company did not grant any stock options during the *six* months ended *June 30, 2026* and *2025*.
Stock option expense of $24,000 and $0.1 million is included in “Salaries and employee benefits” in the accompanying consolidated statements of income for the *three* and *six* months ended *June 30, 2026*, respectively, and $32,000 and $0.1 million for the *three* and *six* months ended *June 30, 2025*, respectively. At *June 30, 2026*, 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 2.2 years.
The table below summarizes the Company’s stock option activity for the periods presented.
| Line item | Six months ended June 30, 2026 / Number of Options | Six months ended June 30, 2026 / Weighted Average Exercise Price | Six months ended June 30, 2025 / Number of Options | Six months ended June 30, 2025 / Weighted Average Exercise Price |
| --- | --- | --- | --- | --- |
| Outstanding, beginning of period | 226,602 | $18.77 | 260,602 | $18.37 |
| Exercised | (29,070) | 14.28 | (34,000) | 15.74 |
| Outstanding, end of period | 197,532 | $19.43 | 226,602 | $18.77 |
| Exercisable, end of period | 161,249 | $20.25 | 168,786 | $19.64 |
*29*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
***Restricted Stock*** ***and RSUs***
Under the Plan, the Company *may* grant restricted stock, RSUs, and other stock-based awards to Plan participants, subject to forfeiture upon the occurrence of certain events until the vesting dates specified in the participant’s award agreement. Historically, the Company granted restricted stock awards to Plan participants. Beginning in *2019,* the Company began granting time-vesting RSUs to its non-employee directors and certain officers of the Company, with vesting terms ranging from two years to five years. The RSUs do *not* have voting rights and do *not* receive dividends or dividend equivalents. As of *May 1, 2023,* all of the previously granted shares of restricted stock had vested, and only outstanding RSUs remained.
Compensation expense for RSUs, which is calculated based on the market price of the Company’s common stock at the grant date applied to the total number of units granted, is recognized on a straight-line basis over the requisite service period of generally five years for employees and non-employee directors. Upon vesting of RSUs, the benefit of tax deductions in excess of recognized compensation expense is reflected as an income tax benefit in the consolidated statements of income.
Compensation expense related to RSUs of $0.5 million and $0.9 million is included in the accompanying consolidated statements of income for the *three* and *six* months ended *June 30, 2026*, respectively, and $0.5 million and $0.9 million for the *three* and *six* months ended *June 30, 2025*, respectively. The unearned compensation related to these awards is amortized to compensation expense over the vesting period. As of *June 30, 2026*, unearned stock-based compensation cost associated with these awards totaled approximately $5.9 million and is expected to be recognized over a weighted average period of 3.7 years.
The following table summarizes the RSU activity for the periods presented.
| Line item | Six months ended June 30, 2026 / Shares | Six months ended June 30, 2026 / Weighted Average Grant Date Fair Value | Six months ended June 30, 2025 / Shares | Six months ended June 30, 2025 / Weighted Average Grant Date Fair Value |
| --- | --- | --- | --- | --- |
| Balance, beginning of period | 337,735 | $16.81 | 323,820 | $16.65 |
| Granted | 96,558 | 27.59 | 134,182 | 17.76 |
| Forfeited | (1,461) | 18.47 | (4,760) | 16.37 |
| Earned and issued | (107,507) | 17.09 | (104,377) | 17.65 |
| Balance, end of period | 325,325 | $19.91 | 348,865 | $16.78 |
*30*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
**[](#)NOTE *9.* DERIVATIVE FINANCIAL INSTRUMENTS**
**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” (“ASC *820”*).* The Company did not recognize any gains or losses in other operating income resulting from fair value adjustments of these swap agreements during the *three* and *six* months ended *June 30, 2026* and *2025*.
The table below presents the notional amounts and fair values of the Company’s derivative financial instruments as well as their classification on the accompanying consolidated balance sheets at *June 30, 2026* and *December 31, 2025* (dollars in thousands).
| June 30, 2026 | Notional(1) | Fair Value / Derivative Assets(2) | Fair Value / Derivative Liabilities(2) |
| --- | --- | --- | --- |
| Interest rate swaps | $316,692 | $11,528 | $11,528 |
| December 31, 2025 | | | |
| Interest rate swaps | $361,564 | $11,660 | $11,660 |
(*1*) At *June 30, 2026* the Company had notional amounts of $158.3 million in interest rate swap contracts with customers and $158.3 million in offsetting interest rate swap contracts with other financial institutions. 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.
(*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 *June 30, 2026* and *December 31, 2025* (dollars in thousands).
| June 30, 2026 | Gross Amounts Recognized | Gross Amounts Offset in the Consolidated Balance Sheets | Net Amounts Presented in the Consolidated Balance Sheets | Gross Amounts Not Offset in the Consolidated Balance Sheets / Financial Instruments | Gross Amounts Not Offset in the Consolidated Balance Sheets / Cash Collateral(1) | Net Amount |
| --- | --- | --- | --- | --- | --- | --- |
| Financial assets: | | | | | | |
| Interest rate swaps | $11,528 | — | $11,528 | — | $(10,115) | $1,413 |
| Total | $11,528 | — | $11,528 | — | $(10,115) | $1,413 |
| Financial liabilities: | | | | | | |
| Interest rate swaps | $11,528 | — | $11,528 | — | — | $11,528 |
| Repurchase agreements | 18,575 | — | 18,575 | (16,447) | — | 2,128 |
| Total | $30,103 | — | $30,103 | $(16,447) | — | $13,656 |
| 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 |
(*1*) The Company had no collateral posted with counterparties at *June 30, 2026* and *December 31, 2025*. Collateral received from counterparties is included in “Interest-bearing deposits” in the accompanying consolidated balance sheets.
*31*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
**[](#)****NOTE *10.* FAIR VALUES OF FINANCIAL INSTRUMENTS**
In accordance with ASC *820,* disclosure of fair value information about financial instruments, whether or *not* recognized in the balance sheet, is required. The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. Fair value is best determined based upon quoted market prices or exit prices. In cases where quoted market prices are *not* available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows, and the fair value estimates *may* *not* be realized in an immediate settlement of the instruments. Accordingly, the aggregate fair value amounts presented do *not* represent the underlying value of the Company.
If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques *may* be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.
The Company holds SBIC qualified funds and other investment funds that do *not* have a readily determinable fair value. In accordance with ASC *820,* these investments are measured at fair value using the net asset value practical expedient and are *not* required to be classified in the fair value hierarchy. At each of *June 30, 2026* and *December 31, 2025*, the fair values of these investments were $3.5 million and are included in “Other assets” in the accompanying consolidated balance sheets.
*Fair Value Hierarchy*
In accordance with ASC *820,* the Company groups its financial assets and financial liabilities measured at fair value in *three* levels, based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to determine fair value.
Level *1* – Valuation is based upon quoted prices for identical assets or liabilities traded in active markets.
Level *2* – Valuation is based upon observable inputs other than quoted prices included in level *1,* such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are *not* active, or other inputs that are observable or can be corroborated by observable market data.
Level *3* – Valuation is based upon unobservable inputs that are supported by little or *no* market activity. 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 *June 30, 2026* and *December 31, 2025*, all of the Company’s level *3* investments were obligations of state and political subdivisions. The Company estimated the fair value of these level *3* investments using discounted cash flow models, the key inputs of which are the coupon rate, current spreads to the yield curves, and expected repayment dates, adjusted for illiquidity of the local municipal market and sinking funds, if applicable. Option-adjusted models *may* be used for structured or callable notes, as appropriate.
*Derivative Financial Instruments* – The fair value for interest rate swap agreements is based upon the expected future cash flows of the agreements discounted at market rates. These derivative instruments are classified in level *2* of the fair value hierarchy.
*32*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
Assets and liabilities measured at fair value on a recurring basis are summarized in the table below as of the dates indicated (dollars in thousands).
| June 30, 2026 | Estimated / Fair Value | Quoted Prices in Active Markets for Identical Assets / (Level 1) | Significant Other Observable Inputs / (Level 2) | Significant Unobservable Inputs / (Level 3) |
| --- | --- | --- | --- | --- |
| Assets: | | | | |
| Obligations of the U.S. Treasury and U.S. government agencies and corporations | $35,418 | — | $35,418 | — |
| Obligations of state and political subdivisions | 17,306 | — | 14,697 | 2,609 |
| Corporate bonds | 24,188 | — | 24,188 | — |
| Residential mortgage-backed securities | 261,848 | — | 261,848 | — |
| Commercial mortgage-backed securities | 72,566 | — | 72,566 | — |
| Equity securities at fair value | 4,111 | 4,111 | — | — |
| Interest rate swaps - gross assets | 11,528 | — | 11,528 | — |
| Total assets | $426,965 | $4,111 | $420,245 | $2,609 |
| Liabilities: | | | | |
| Interest rate swaps - gross liabilities | $11,528 | — | $11,528 | — |
| 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 | — |
*33*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
The Company reviews fair value hierarchy classifications on a quarterly basis. Changes in the Company’s ability to observe inputs to the valuation *may* cause reclassification of certain assets or liabilities within the fair value hierarchy. The tables below provide a reconciliation for assets measured at fair value on a recurring basis using significant unobservable inputs, or level *3* inputs, for the *six* months ended *June 30, 2026* and *2025* (dollars in thousands).
| Line item | Obligations of State and Political Subdivisions |
| --- | --- |
| Balance at December 31, 2025 | $3,604 |
| Unrealized gain included in other comprehensive loss | 34 |
| Maturities, prepayments, and calls | (1,029) |
| Balance at June 30, 2026 | $2,609 |
| Line item | Obligations of State and Political Subdivisions | Corporate Bonds |
| --- | --- | --- |
| Balance at December 31, 2024 | $4,317 | $494 |
| Unrealized gain included in other comprehensive income | 68 | 6 |
| Maturities, prepayments, and calls | (917) | (500) |
| Balance at June 30, 2025 | $3,468 | — |
There were no liabilities measured at fair value on a recurring basis using level *3* inputs at *June 30, 2026* and *December 31, 2025*. For the *six* months ended *June 30, 2026* and *2025*, there were no gains or losses included in earnings related to the change in fair value of the assets measured on a recurring basis using significant unobservable inputs held at the end of the period.
The following table provides quantitative information about significant unobservable inputs used in fair value measurements of level *3* assets measured at fair value on a recurring basis at *June 30, 2026* and *December 31, 2025* (dollars in thousands).
| June 30, 2026 | Estimated Fair Value | Valuation Technique | Unobservable Inputs | Range of Discounts | Weighted Average Discount(1) |
| --- | --- | --- | --- | --- | --- |
| Obligations of state and political subdivisions | $2,609 | Option-adjusted discounted cash flow model; present value of expected future cash flow model | Bond appraisal adjustment(2) | 0% - 7% | 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% |
(*1*) Weighted by relative fair value.
(*2*) Fair values determined through valuation analysis using coupon, yield (discount margin), liquidity and expected repayment dates.
*34*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
*Fair Value of Assets and Liabilities Measured on a Nonrecurring Basis*
Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are *not* measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).
The following methods and assumptions were used by the Company in estimating the fair value of assets and liabilities valued on a nonrecurring basis:
*Loans Individually Evaluated* – For collateral dependent loans where the borrower is experiencing financial difficulty, the expected credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral, which is based on *third*-party appraisals. Individually evaluated loans that are *not* collateral dependent are evaluated based on a discounted cash flow methodology. Credits deemed uncollectible are charged to the ACL. Since *not* all valuation inputs are observable, these nonrecurring fair value determinations are classified as level *3.*
*Other Real Estate Owned* – Other real estate owned consists of properties acquired through foreclosure or acceptance of a deed in lieu of foreclosure and real property *no* longer used in the Bank’s business operations. 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*) is summarized below as of *June 30, 2026* and *December 31, 2025*. There were no liabilities measured on a nonrecurring basis at *June 30, 2026* or *December 31, 2025* (dollars in thousands).
| June 30, 2026 | Estimated Fair Value | Valuation Technique | Unobservable Inputs | Range of Discounts | Weighted Average Discount(1) |
| --- | --- | --- | --- | --- | --- |
| Loans individually evaluated for impairment(2) | $3,011 | Discounted cash flows; underlying collateral value | Collateral discounts and estimated costs to sell | 2% - 100% | 5% |
| Other real estate owned(3) | 700 | Underlying collateral value, third party appraisals | Collateral discounts and discount rates | 10% | 10% |
| 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% |
| (1) | Weighted by relative fair value. |
| --- | --- |
| (2) | Loans individually evaluated for impairment that were re-measured during the period had a carrying value of $3.4 million and $3.6 million at June 30, 2026 and December 31, 2025, respectively, with related ACL of $0.4 million and $0.3 million, respectively, as of such dates. |
| (3) | Other real estate owned that was re-measured during the period had a carrying value of $0.7 million at June 30, 2026. During the six months ended June 30, 2026, the Company recorded a $0.1 million write-down of other real estate owned which is included as part of “Other operating expenses” in noninterest expense on the accompanying consolidated statement of income. Other real estate owned that was re-measured during the period had a carrying value of $2.0 million at December 31, 2025. During the six months ended June 30, 2025, the Company recorded a $0.3 million write-down of other real estate owned which is included as part of “Other operating expenses” in noninterest expense on the accompanying consolidated statement of income. |
*35*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
*Financial Instruments*
Accounting guidance requires the disclosure of estimated fair value information about certain on- and off-balance sheet financial instruments, including those financial instruments that are *not* measured and reported at fair value on a recurring or nonrecurring basis. The significant methods and assumptions used by the Company to estimate the fair value of financial instruments are discussed below.
*Cash and Cash Equivalents* – For these short-term instruments, the fair value is the carrying value.
*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 are summarized in the tables below as of the dates indicated (dollars in thousands).
_June 30, 2026_
| Line item | Carrying Amount | Estimated Fair Value | Level 1 | Level 2 | Level 3 |
| --- | --- | --- | --- | --- | --- |
| Financial assets: | | | | | |
| Cash and cash equivalents | $72,303 | $72,303 | $72,303 | — | — |
| Investment securities - AFS | 411,326 | 411,326 | — | 408,717 | 2,609 |
| Investment securities - HTM | 47,217 | 49,450 | — | 1,634 | 47,816 |
| Equity securities at fair value | 4,111 | 4,111 | 4,111 | — | — |
| Nonmarketable equity securities | 23,759 | 23,759 | — | 23,759 | — |
| Loans, net of allowance | 3,023,636 | 3,002,686 | — | — | 3,002,686 |
| Interest rate swaps - gross assets | 11,528 | 11,528 | — | 11,528 | — |
| Financial liabilities: | | | | | |
| Deposits | 3,213,886 | 3,211,288 | — | 3,211,288 | — |
| FHLB short-term advances and repurchase agreements | 54,575 | 54,573 | — | 54,573 | — |
| FHLB long-term advances | 100,000 | 99,669 | — | 99,669 | — |
| Junior subordinated debt | 22,994 | 22,991 | — | — | 22,991 |
| Subordinated debt | 16,759 | 15,648 | — | 15,648 | — |
| Interest rate swaps - gross liabilities | 11,528 | 11,528 | — | 11,528 | — |
_December 31, 2025_
| Line item | 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 | — |
*36*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
**[](#)NOTE *11.* INCOME TAXES**
The income tax expense and the effective tax rate included in the consolidated statements of income are shown in the table below for the periods presented (dollars in thousands).
| Line item | Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
| --- | --- | --- | --- | --- |
| Income tax expense | $2,136 | $935 | $5,021 | $2,356 |
| Effective tax rate | 18.4% | 17.2% | 18.9% | 17.9% |
For the *three* and *six* months ended *June 30, 2026* and *2025*, the effective tax rate differed from the statutory tax rate of 21% primarily due to tax-exempt interest income earned on certain loans and investment securities and income from BOLI.
**[](#)NOTE *12.* 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 approximate amounts of the Company’s commitments to extend credit as of the dates presented (dollars in thousands).
| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| Loan commitments | $468,484 | $431,795 |
| Standby letters of credit | 6,955 | 5,436 |
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).
| Line item | Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
| --- | --- | --- | --- | --- |
| Balance, beginning of period | $331 | $141 | $425 | $42 |
| ACL on unfunded loan commitments at acquisition | — | — | 212 | — |
| (Reversal of) provision for credit losses on unfunded loan commitments | (99) | (31) | (405) | 68 |
| Balance, end of period | $232 | $110 | $232 | $110 |
Additionally, at *June 30, 2026*, the Company had unfunded commitments of $1.4 million for its investments in SBIC qualified funds and other investment funds.
*37*
**INVESTAR HOLDING CORPORATION**
**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**
**(Unaudited)**
**[](#)NOTE *13.* 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 *six* months ended *June 30, 2026* and *2025* (dollars in thousands).
| Line item | June 30, 2026 | June 30, 2025 |
| --- | --- | --- |
| Total operating lease cost(1) | $359 | $225 |
| Weighted-average remaining lease term (in years) | 4.3 | 5.2 |
| Weighted-average discount rate | 3.5% | 3.4% |
(*1*) Short-term lease cost was immaterial for the periods presented.
At *June 30, 2026* and *December 31, 2025*, the Company’s operating lease ROU assets were $2.6 million and $1.8 million, respectively, and the Company’s related operating lease liabilities were $2.7 million and $1.9 million, respectively. The Company’s operating leases have remaining terms ranging from approximately one to five years, including extension options if the Company is reasonably certain they will be exercised.
Future obligations due under non-cancelable operating leases at *June 30, 2026* are presented below (dollars in thousands).
| Remainder of 2026 | 343 |
| --- | --- |
| 2027 | 670 |
| 2028 | 653 |
| 2029 | 599 |
| 2030 | 450 |
| Thereafter | 157 |
| Total lease payments | 2,872 |
| Less: imputed interest | (216) |
| Total lease obligations | $2,656 |
At *June 30, 2026*, the Company had *not* entered into any material leases that have *not* yet commenced.
The Bank owns its corporate headquarters building, the *first* floor of which is occupied by multiple tenants. The Bank, as lessor, also leases a portion of *one* of its branch locations. All tenant leases are operating leases. The Bank, as lessor, recognized lease income of $0.1 million and $0.2 million for the *three* and *six* month periods ended *June 30, 2026* and *2025*, respectively.
*38*
**[](# "Item2_MDA")ITEM** **2. MANAGEMENT**’**S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**
**Cautionary Note Regarding Forward-Looking Statements**
When included in this Quarterly Report on Form 10-Q, or in other documents that Investar Holding Corporation files with the SEC or in statements made by or on behalf of the Company, words like “may,” “should,” “could,” “predict,” “potential,” “believe,” “think,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would,” “outlook” and similar expressions or the negative version of those words are intended to identify forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a variety of risks and uncertainties that could cause actual results to differ materially from those described therein. The Company’s forward-looking statements are based on assumptions and estimates that management believes to be reasonable in light of the information available at the time such statements are made. However, many of the matters addressed by these statements are inherently uncertain and could be affected by many factors beyond management’s control. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. These factors include, but are not limited to, the following, any one or more of which could materially affect the outcome of future events:
- the significant risks and uncertainties for our business, results of operations and financial condition, as well as our regulatory capital and liquidity ratios and other regulatory requirements caused by business and economic conditions generally and in the financial services industry in particular, whether nationally, regionally or in the markets in which we operate, including heightened uncertainties resulting from recent changing trade and tariff policies that could have an adverse impact on inflation and economic growth at least in the near term;
- changes in inflation, interest rates, yield curves and interest rate spread relationships that affect our loan and deposit pricing;
- our ability to successfully execute our strategy focused on consistent, quality earnings through the optimization of our balance sheet, and our ability to successfully execute a long-term growth strategy;
- our ability to achieve organic loan and deposit growth, and the composition of that growth;
- our ability to identify and enter into agreements to combine with attractive acquisition candidates, finance acquisitions, complete acquisitions after definitive agreements are entered into, and successfully integrate and grow acquired operations;
- our potential growth, including our entrance or expansion into new markets, and the need for sufficient capital to support that growth;
- a reduction in liquidity, including as a result of a reduction in the amount of deposits we hold or other sources of liquidity;
- inaccuracy of the assumptions and estimates we make in establishing reserves for credit losses and other estimates;
- changes in the quality or composition of our loan portfolio, including adverse developments in borrower industries or in the repayment ability of individual borrowers;
- changes in the quality and composition of, and changes in unrealized losses in, our investment portfolio, including whether we may have to sell securities before their recovery of amortized cost basis and realize losses;
- the extent of continuing client demand for the high level of personalized service that is a key element of our banking approach as well as our ability to execute our strategy generally;
- our dependence on our management team, and our ability to attract and retain qualified personnel;
- the concentration of our business within our geographic areas of operation in Louisiana, Texas and Alabama;
- risks to holders of our common stock relating to our Series A Preferred Stock, including but not limited to dividend preferences to holders of the preferred stock, other conditions with respect to the payment of dividends on our common stock, potential dilution upon conversion of the preferred stock, and liquidation preferences to holders of the preferred stock;
- increasing costs of complying with new and potential future regulations;
- new or increasing geopolitical tensions, including resulting from conflicts and wars in the Middle East, Ukraine and Israel and surrounding areas or new areas;
- the emergence or worsening of widespread public health challenges or pandemics;
- concentration of credit exposure;
- any deterioration in asset quality and higher loan charge-offs, and the time and effort necessary to resolve problem assets;
- fluctuations in the price of oil and natural gas;
- data processing system failures and errors;
- risks associated with our digital transformation process, including increased risks of cyberattacks and other security breaches and challenges associated with addressing the increased prevalence of artificial intelligence;
- risks of losses resulting from increased fraud attacks against us and others in the financial services industry;
- potential impairment of our goodwill and other intangible assets;
- the impact of litigation and other legal proceedings to which we become subject;
- competitive pressures in the commercial finance, retail banking, mortgage lending and consumer finance industries, as well as the financial resources of, and products offered by, competitors;
- the impact of changes in laws and regulations applicable to us, including banking, securities and tax laws and regulations and accounting standards, as well as changes in the interpretation of such laws and regulations by our regulators;
- changes in the scope and costs of FDIC insurance and other coverages;
- governmental monetary and fiscal policies; and
- hurricanes, tropical storms, tropical depressions, floods, winter storms, droughts and other adverse weather events, all of which have affected the Company’s market areas from time to time; other natural disasters; oil spills and other man-made disasters; acts of terrorism; other international or domestic calamities; acts of God; and other matters beyond our control.
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 “Cautionary Note Regarding Forward-Looking Statements” in the Company’s Annual Report and in Part II. Item 1A. “Risk Factors” of this report.
Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on any forward-looking statement as a prediction of future events. We expressly disclaim any obligation or undertaking to update our forward-looking statements, and we do not intend to release publicly any updates or changes in our expectations concerning the forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based, except as required by law.
**Company Overview**
This section presents management’s perspective on the consolidated financial condition and results of operations of the Company and its wholly-owned subsidiary, the Bank. The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and related notes thereto included herein, and the audited consolidated financial statements for the year ended December 31, 2025, including the notes thereto, and the related MD&A in the Annual Report. All cross-references to the “Notes” in this Form 10-Q refer to the Notes to Consolidated Financial Statements contained in Part I. Item 1. Financial Statements unless otherwise noted.
The Bank commenced operations in 2006, and we completed our initial public offering in July 2014. On July 1, 2019, the Bank changed from a Louisiana state bank charter to a national bank charter, and its name changed to Investar Bank, National Association. Through the Bank, we provide full banking services, excluding trust services, tailored primarily to meet the needs of individuals, professionals, and small to medium-sized businesses. Our primary areas of operation are south Louisiana, including Baton Rouge, New Orleans, Lafayette, Lake Charles, and their surrounding areas; Texas, including Houston and its surrounding area, and, as of January 1, 2026, north Dallas and Wichita Falls and their surrounding areas; and Alabama, including York and Oxford and their surrounding areas. At June 30, 2026, we operated 36 full service branches comprised of 20 full service branches in Louisiana, ten full service branches in Texas, and six full service branches in Alabama.
Our strategy focuses on consistent, quality earnings through the optimization of our balance sheet. Our strategy includes originating and renewing high quality, primarily variable-rate, loans and allowing higher risk credit relationships to run off. We have kept duration short on our liabilities to provide flexibility to secure lower cost funding that was accretive to our net interest margin. Our strategy also includes growth through acquisitions, including whole-bank acquisitions, strategic branch acquisitions and asset acquisitions. We have completed eight whole-bank acquisitions since 2011 and regularly review acquisition opportunities. Our most recent whole bank acquisition was completed in January 2026. For additional information, see “Acquisition of WFB” below.
Our principal business is lending to and accepting deposits from individuals and small to medium-sized businesses in our areas of operation. As a financial holding company operating through one reportable segment, we generate our income principally from interest on loans and, to a lesser extent, our securities investments, as well as from fees charged in connection with our various loan and deposit services. Our principal expenses are interest expense on interest-bearing customer deposits and borrowings, salaries and employee benefits, occupancy costs, data processing and other operating expenses. We measure our performance through our net interest margin, return on average assets, and return on average equity, among other metrics, while seeking to maintain appropriate regulatory leverage and risk-based capital ratios.
**Acquisition of WFB**
On July 1, 2025, we announced that we had entered into the Agreement and Plan of Merger by and between the Company and WFB, headquartered in Wichita Falls, Texas, 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, WFB’s wholly-owned subsidiary, with and into the Bank, with the Bank as the surviving bank. We completed the acquisition of WFB and FNB on January 1, 2026. All of the issued and outstanding shares of WFB common stock were converted into aggregate merger consideration consisting of $7.2 million in cash and 3,955,272 shares of our common stock for an aggregate transaction value of $112.9 million. This value is based on the Company’s closing stock price on December 31, 2025 of $26.72 per common share. On January 1, 2026, we acquired $1.15 billion in total assets, $950.2 million in net loans and $1.02 billion in total deposits. For additional information, see Note 2. Business Combinations.
**Private Placement of Series A Preferred Stock**
In connection with the WFB transaction, on July 1, 2025, we completed a private placement of 32,500 shares of our newly designated Series A Preferred Stock with selected institutional and other accredited investors at a price of $1,000 per share, for aggregate gross proceeds of $32.5 million. The net proceeds were $30.4 million, after deducting placement agent fees and other offering-related expenses. 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.
**Certain Events That Affect Period-over-Period Comparability**
***Acquisitions***. As discussed above, on January 1, 2026, we completed the acquisition of WFB.
***Changing Inflation and** **Interest** **Rates***. During 2025, beginning in September 2025, the Federal Reserve reduced the federal funds target rate three times by 75 basis points on a cumulative basis to 3.50% to 3.75%. Accordingly, the prevailing federal funds target rate for the three and six months ended June 30, 2026 was lower than for the three and six months ended June 30, 2025.
***Hurricane Ida.***During the first quarter of 2025, we recorded a $3.3 million recovery of loans previously charged off as a result of a property insurance settlement related to a loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida, and we also recorded related noninterest expense of $0.2 million.
***Private Placement of Series A Preferred Stock**.* As discussed above, on July 1, 2025, we completed a private placement of our newly designated Series A Preferred Stock.
**Overview of Financial Condition and Results of Operations**
Total assets increased $1.03 billion, or 36.3%, to $3.86 billion at June 30, 2026, compared to $2.83 billion at December 31, 2025. The acquisition of WFB increased total assets by $1.15 billion on January 1, 2026. For the three months ended June 30, 2026, net income available to common shareholders was $8.9 million, or $0.61 per diluted common share, compared to net income available to common shareholders of $4.5 million, or $0.46 per diluted common share, for the three months ended June 30, 2025. For the six months ended June 30, 2026, net income available to common shareholders was $20.4 million, or $1.38 per diluted common share, compared to net income available to common shareholders of $10.8 million, or $1.09 per diluted common share, for the six months ended June 30, 2025. At June 30, 2026, the Company and Bank each were in compliance with all regulatory capital requirements, and the Bank was considered “well-capitalized” under the FDIC’s prompt corrective action regulations.
Key components of our performance for the three and six months ended June 30, 2026 are summarized below.
- Total loans increased $883.9 million, or 40.6%, to $3.06 billion at June 30, 2026, compared to $2.18 billion at December 31, 2025.
- Total deposits increased $863.6 million, or 36.7%, to $3.21 billion at June 30, 2026, compared to $2.35 billion at December 31, 2025. Noninterest-bearing deposits increased $175.9 million, or 39.4%, to $621.9 million at June 30, 2026, compared to $446.0 million at December 31, 2025. As of June 30, 2026, estimated uninsured deposits represented approximately 34% of our total deposits.
- Net interest income for the three months ended June 30, 2026 was $33.4 million, an increase of $13.8 million, or 70.3%, compared to $19.6 million for the three months ended June 30, 2025, which was the result of a $17.8 million increase in interest income partially offset by a $4.0 million increase in interest expense. Net interest income for the six months ended June 30, 2026 was $66.1 million, an increase of $28.1 million, or 74.0%, compared to $38.0 million for the six months ended June 30, 2025, which was the result of a $36.6 million increase in interest income partially offset by an $8.5 million increase in interest expense.
- During the three months ended June 30, 2026, our net interest margin was 3.67%, compared to 3.03% for the three months ended June 30, 2025. During the six months ended June 30, 2026, our net interest margin was 3.63%, compared to 2.95% for the six months ended June 30, 2025. We experienced margin expansion as our yield on interest-earning assets increased and our overall cost of funds decreased for the respective periods.
- For the three months ended June 30, 2026, we recorded a provision for credit losses of $0.3 million compared to a provision for credit losses of $0.1 million for the three months ended June 30, 2025. For the six months ended June 30, 2026, we recorded a reversal of credit losses of $1.8 million compared to a reversal of credit losses of $3.5 million for the six months ended June 30, 2025.
- Noninterest income increased $0.5 million, or 18.0%, to $3.1 million for the three months ended June 30, 2026, compared to $2.6 million for the three months ended June 30, 2025. Noninterest income increased $1.4 million, or 31.1%, to $6.1 million for the six months ended June 30, 2026, compared to $4.6 million for the six months ended June 30, 2025.
- Noninterest expense increased $8.0 million, or 47.7%, to $24.7 million for the three months ended June 30, 2026, compared to $16.7 million for the three months ended June 30, 2025. Noninterest expense increased $14.6 million, or 44.2%, to $47.5 million for the six months ended June 30, 2026, compared to $32.9 million for the six months ended June 30, 2025.
-
Nonperforming loans were 0.63% of total loans at June 30, 2026, compared to 0.43% at December 31, 2025.
- Return on average assets increased to 0.98% for the three months ended June 30, 2026, compared to 0.66% for the three months ended June 30, 2025. Return on average assets increased to 1.11% for the six months ended June 30, 2026, compared to 0.80% for the six months ended June 30, 2025.
- Return on average common equity was 9.19% for the three months ended June 30, 2026, compared to 7.07% for the three months ended June 30, 2025. Return on average common equity was 10.64% for the six months ended June 30, 2026, compared to 8.66% for the six months ended June 30, 2025.
- Book value per common share reached a record high of $28.29 at June 30, 2026, compared to $27.63 at December 31, 2025.
- During the three months ended June 30, 2026, we paid $0.8 million to repurchase 27,235 shares of common stock compared to $0.6 million to repurchase 36,065 shares of common stock during the three months ended June 30, 2025. During the six months ended June 30, 2026, we paid $2.3 million to repurchase 80,655 shares of common stock compared to $1.3 million to repurchase 71,057 shares of common stock during the six months ended June 30, 2025.
- Stockholders’ equity increased $119.1 million, or 39.5%, to $420.1 million at June 30, 2026 compared to $301.1 million at December 31, 2025.
**Discussion and Analysis of Financial Condition**
***Loans***
*General*. Loans constitute our most significant asset, comprising 79.2% and 76.8% of our total assets at June 30, 2026 and December 31, 2025, respectively. Total loans increased $883.9 million, or 40.6%, to $3.06 billion at June 30, 2026, compared to $2.18 billion at December 31, 2025. The increase in loans was primarily the result of the acquisition of WFB, which increased total loans $961.9 million on January 1, 2026. We are emphasizing the origination of high margin loans that promote long-term profitability and proactively exiting credit relationships that do not fit this strategy. Our variable-rate loans as a percentage of total loans increased to 50% at June 30, 2026 compared to 38% at December 31, 2025. Included in variable-rate loans as of June 30, 2026 are adjustable-rate mortgage loans we acquired in connection with our acquisition of WFB.
The table below sets forth the balance of loans outstanding by loan type as of the dates presented, and the percentage of each loan type to total loans (dollars in thousands).
| Line item | June 30, 2026 / Amount | June 30, 2026 / Percentage of / Total Loans | December 31, 2025 / Amount | December 31, 2025 / Percentage of / Total Loans |
| --- | --- | --- | --- | --- |
| Construction and development | $261,799 | 8.6% | $147,980 | 6.8% |
| 1-4 Family | 907,385 | 29.7 | 376,238 | 17.3 |
| Multifamily | 144,234 | 4.7 | 130,005 | 6.0 |
| Farmland | 9,850 | 0.3 | 4,788 | 0.2 |
| Commercial real estate | | | | |
| Owner-occupied(1) | 508,245 | 16.6 | 460,126 | 21.1 |
| Nonowner-occupied | 512,483 | 16.7 | 452,142 | 20.8 |
| Total mortgage loans on real estate | 2,343,996 | 76.6 | 1,571,279 | 72.2 |
| Commercial and industrial(1) | 703,279 | 23.0 | 595,263 | 27.4 |
| Consumer | 12,612 | 0.4 | 9,431 | 0.4 |
| Total loans | $3,059,887 | 100% | $2,175,973 | 100% |
(1)
The Company’s business lending portfolio consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans.
At June 30, 2026, the Company’s business lending portfolio, which consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans, was $1.21 billion, an increase of $156.1 million, or 14.8%, compared to $1.06 billion at December 31, 2025. The increase in the business lending portfolio was primarily driven by the acquisition of WFB and increased commercial and industrial loan production, partially offset by loan amortization.
Construction and development loans totaled $261.8 million at June 30, 2026, an increase of $113.8 million, or 76.9%, compared to $148.0 million at December 31, 2025. The increase in construction and development loans was primarily due to the acquisition of WFB, partially offset by planned run off of loans acquired from WFB, consisting of consumer mortgage and nonowner-occupied construction loans, and conversions to permanent loans upon completion of construction.
1-4 Family loans totaled $907.4 million at June 30, 2026, an increase of $531.1 million, or 141.2%, compared to $376.2 million at December 31, 2025. The increase in 1-4 family loans was primarily due to the acquisition of WFB. Substantially all of the 1-4 family loans acquired from WFB were consumer mortgage loans with an adjustable rate.
During the third quarter of 2023, we exited the consumer mortgage loan origination business to transition into shorter duration, higher risk-adjusted return asset classes in an effort to focus more on our core business and optimize profitability. Our strategy is to allow the consumer mortgage portfolio to amortize and remix the loan portfolio by replacing consumer mortgage loans with owner-occupied commercial real estate loans and commercial and industrial loans. We will continue our strategy to allow the consumer mortgage portfolio to amortize, including those loans acquired through our acquisition of WFB.
The consumer mortgage portfolio was approximately $849.0 million and $224.5 million at June 30, 2026 and December 31, 2025, respectively. The increase was due to the acquisition of WFB. Our consumer mortgage portfolio is included in the 1-4 family and construction and development categories. At June 30, 2026, the remaining loans in the construction and development category consisted primarily of commercial properties, and the remaining loans in the 1-4 family category consisted primarily of second mortgages, home equity loans, home equity lines of credit, and business purpose loans secured by 1-4 family residential real estate.
Nonowner-occupied loans totaled $512.5 million at June 30, 2026, an increase of $60.3 million, or 13.3%, compared to $452.1 million at December 31, 2025. The increase in nonowner-occupied loans was primarily due to the acquisition of WFB, organic growth and conversions of construction and development loans to nonowner-occupied loans upon completion of construction, partially offset by loan amortization.
*Loan Concentrations*. Loan concentrations are considered to exist when there are amounts loaned to multiple borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. At June 30, 2026 and December 31, 2025, we had no concentrations of loans exceeding 10% of total loans other than loans in the categories listed in the table above.
The table below sets forth the balance of owner-occupied loans by industry based on NAICS code and nonowner-occupied loans by property type as of the dates presented (dollars in thousands).
| Line item | June 30, 2026 / Amount | June 30, 2026 / Percentage of Total | December 31, 2025 / Amount | December 31, 2025 / Percentage of Total |
| --- | --- | --- | --- | --- |
| Owner-occupied | | | | |
| Retail trade | $133,243 | 26% | $129,973 | 28% |
| Real estate | 63,846 | 13 | 39,930 | 9 |
| Wholesale trade | 57,374 | 11 | 59,282 | 13 |
| Healthcare and social assistance | 40,815 | 8 | 42,522 | 9 |
| Other services (except public administration) | 35,433 | 7 | 32,147 | 7 |
| Mining, quarrying, and oil and gas extraction | 33,445 | 7 | 34,119 | 7 |
| Accommodation and food services | 33,051 | 6 | 30,884 | 7 |
| Manufacturing | 28,545 | 6 | 20,733 | 5 |
| Construction | 21,260 | 4 | 16,193 | 4 |
| All other(1) | 61,233 | 12 | 54,343 | 11 |
| Total owner-occupied | $508,245 | 100% | $460,126 | 100% |
| Nonowner-occupied | | | | |
| Retail | $162,774 | 32% | $157,272 | 35% |
| Office | 103,804 | 20 | 82,833 | 18 |
| Healthcare | 82,567 | 16 | 85,921 | 19 |
| Warehouse | 72,661 | 14 | 49,254 | 11 |
| Hotel/motel | 29,483 | 6 | 29,956 | 7 |
| All other | 61,194 | 12 | 46,906 | 10 |
| Total nonowner-occupied | $512,483 | 100% | $452,142 | 100% |
(1) No individual category within “All other” represents more than 4% of total owner-occupied loans.
The following table reflects contractual loan maturities of loans in our loan portfolio and the amount of such loans with fixed and variable interest rates in each maturity range at June 30, 2026 (dollars in thousands). Adjustable-rate mortgage loans that we acquired in connection with our acquisition of WFB are reflected in the “Loans with variable rates” portion of the table; however, the rate of these loans is generally fixed for an initial period depending on the loan terms.
| Line item | One Year or Less | After One Year Through Five Years | After Five Years Through Fifteen Years | After Fifteen Years | Total |
| --- | --- | --- | --- | --- | --- |
| Mortgage loans on real estate: | | | | | |
| Construction and development | $209,903 | $38,331 | $13,225 | $340 | $261,799 |
| 1-4 Family | 31,177 | 84,581 | 45,179 | 746,448 | 907,385 |
| Multifamily | 27,969 | 97,758 | 5,768 | 12,739 | 144,234 |
| Farmland | 1,101 | 6,803 | 1,686 | 260 | 9,850 |
| Commercial real estate | | | | | |
| Owner-occupied | 117,689 | 212,764 | 174,894 | 2,898 | 508,245 |
| Nonowner-occupied | 184,942 | 218,064 | 105,890 | 3,587 | 512,483 |
| Commercial and industrial | 372,142 | 175,178 | 155,880 | 79 | 703,279 |
| Consumer | 2,882 | 8,120 | 1,385 | 225 | 12,612 |
| Total loans | $947,805 | $841,599 | $503,907 | $766,576 | $3,059,887 |
| Loans with fixed rates: | | | | | |
| Mortgage loans on real estate: | | | | | |
| Construction and development | $108,188 | $17,472 | $3,738 | $144 | $129,542 |
| 1-4 Family | 18,637 | 53,950 | 37,691 | 202,077 | 312,355 |
| Multifamily | 24,397 | 51,848 | 3,183 | 831 | 80,259 |
| Farmland | 453 | 5,509 | 534 | — | 6,496 |
| Commercial real estate | | | | | |
| Owner-occupied | 20,896 | 145,015 | 161,234 | — | 327,145 |
| Nonowner-occupied | 114,863 | 184,771 | 84,883 | 156 | 384,673 |
| Commercial and industrial | 28,320 | 135,186 | 110,286 | — | 273,792 |
| Consumer | 2,662 | 7,922 | 1,247 | 80 | 11,911 |
| Total loans with fixed rates | $318,416 | $601,673 | $402,796 | $203,288 | $1,526,173 |
| Loans with variable rates: | | | | | |
| Mortgage loans on real estate: | | | | | |
| Construction and development | $101,715 | $20,859 | $9,487 | $196 | $132,257 |
| 1-4 Family | 12,540 | 30,631 | 7,488 | 544,371 | 595,030 |
| Multifamily | 3,572 | 45,910 | 2,585 | 11,908 | 63,975 |
| Farmland | 648 | 1,294 | 1,152 | 260 | 3,354 |
| Commercial real estate | | | | | |
| Owner-occupied | 96,793 | 67,749 | 13,660 | 2,898 | 181,100 |
| Nonowner-occupied | 70,079 | 33,293 | 21,007 | 3,431 | 127,810 |
| Commercial and industrial | 343,822 | 39,992 | 45,594 | 79 | 429,487 |
| Consumer | 220 | 198 | 138 | 145 | 701 |
| Total loans with variable rates | $629,389 | $239,926 | $101,111 | $563,288 | $1,533,714 |
***Investment Securities***
We purchase investment securities primarily to provide a source for meeting liquidity needs, with return on investment a secondary consideration. We also use investment securities as collateral for certain deposits and other types of borrowings. Investment securities represented 11.9% of our total assets and totaled $458.5 million at June 30, 2026, an increase of $39.7 million, or 9.5%, from $418.8 million at December 31, 2025. The increase in investment securities at June 30, 2026 compared to December 31, 2025 was driven primarily by a $16.7 million increase in obligations of the U.S. Treasury and U.S. government agencies and corporations, a $14.4 million increase in residential mortgage-backed securities and a $9.0 million increase in commercial mortgage-backed securities. Due in large part to higher interest rates and market volatility, net unrealized losses in our AFS investment securities portfolio totaled $48.0 million at June 30, 2026, compared to $45.4 million at December 31, 2025. For additional information, see Note 4. Investment Securities.
Shortly after the acquisition of WFB, substantially all of the securities from the acquired portfolio were sold at carrying value, resulting in net proceeds of approximately $50.5 million.
The table below shows the carrying value of our investment securities portfolio by investment type and the percentage that such investment type comprises of our entire portfolio as of the dates indicated (dollars in thousands).
| Line item | June 30, 2026 / Balance | June 30, 2026 / Percentage of Portfolio | December 31, 2025 / Balance | December 31, 2025 / Percentage of Portfolio |
| --- | --- | --- | --- | --- |
| Obligations of the U.S. Treasury and U.S. government agencies and corporations | $35,418 | 7.7% | $18,751 | 4.5% |
| Obligations of state and political subdivisions | 62,698 | 13.7 | 62,613 | 14.9 |
| Corporate bonds | 24,188 | 5.3 | 24,682 | 5.9 |
| Residential mortgage-backed securities | 263,673 | 57.5 | 249,247 | 59.5 |
| Commercial mortgage-backed securities | 72,566 | 15.8 | 63,520 | 15.2 |
| Total | $458,543 | 100% | $418,813 | 100% |
The investment portfolio consists of AFS and HTM securities. We do not hold any investments classified as trading. We classify debt securities as HTM if management has the positive intent and ability to hold the securities to maturity. HTM debt securities are stated at amortized cost. Securities not classified as HTM are classified as AFS and are stated at fair value. The carrying values of our AFS securities are adjusted for unrealized gains or losses not attributable to credit losses as valuation allowances, and any gains or losses are reported on an after-tax basis as a component of other comprehensive (loss) income. As of June 30, 2026, AFS securities comprised 90% of our total investment securities.
We perform a quarterly assessment to develop an estimate of expected credit losses on the investment portfolio, which considers the nature of the investments, credit ratings, current interest rate environment, the financial health of the issuer, ratings changes and outlook, explicit and implicit guarantees, and insurance programs, among other factors. 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. These securities are either guaranteed by the U.S. government or by a government sponsored enterprise and are generally considered to be risk-free. We intend 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. We determined that the declines in the fair values of the AFS and HTM securities portfolio were not attributable to credit losses at June 30, 2026 and December 31, 2025. Accordingly, no ACL was recorded related to our investment securities.
The table below sets forth the stated maturities and weighted average yields of our investment debt securities based on the amortized cost of our investment portfolio at June 30, 2026 (dollars in thousands).
| Line item | One Year or Less / Amount | One Year or Less / Yield | After One Year Through Five Years / Amount | After One Year Through Five Years / Yield | After Five Years Through Ten Years / Amount | After Five Years Through Ten Years / Yield | After Ten Years / Amount | After Ten Years / Yield |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Held to maturity: | | | | | | | | |
| Obligations of state and political subdivisions | — | — | $2,037 | 4.10% | $7,255 | 5.90% | $36,100 | 7.17% |
| Residential mortgage-backed securities | — | — | — | — | — | — | 1,825 | 3.15 |
| Available for sale: | | | | | | | | |
| Obligations of the U.S. Treasury and U.S. government agencies and corporations | 6,014 | 3.92 | 4,438 | 5.34 | 25,065 | 4.16 | 409 | 4.21 |
| Obligations of state and political subdivisions | 29 | 2.99 | 5,793 | 2.60 | 5,387 | 2.51 | 7,649 | 3.56 |
| Corporate bonds | 500 | 3.00 | 11,708 | 4.93 | 12,448 | 4.47 | 750 | 7.68 |
| Residential mortgage-backed securities | — | — | 273 | 1.93 | 3,693 | 3.16 | 295,381 | 2.84 |
| Commercial mortgage-backed securities | — | — | 7,062 | 4.13 | 4,826 | 3.99 | 67,950 | 3.40 |
| | $6,543 | | $31,311 | | $58,674 | | $410,064 | |
The maturity of mortgage-backed securities reflects scheduled repayments based upon the contractual maturities of the securities. Weighted average yields on tax-exempt securities are calculated based on amortized cost on a fully tax equivalent basis assuming a federal tax rate of 21%, when applicable.
***Deposits***
The following table sets forth the composition of our deposits and the percentage of each deposit type to total deposits at June 30, 2026 and December 31, 2025 (dollars in thousands).
| Line item | June 30, 2026 / Amount | June 30, 2026 / Percentage of Total Deposits | December 31, 2025 / Amount | December 31, 2025 / Percentage of Total Deposits |
| --- | --- | --- | --- | --- |
| Noninterest-bearing demand deposits | $621,870 | 19.3% | $445,986 | 19.0% |
| Interest-bearing demand deposits | 989,520 | 30.8 | 608,807 | 25.9 |
| Money market deposits | 362,317 | 11.3 | 255,500 | 10.9 |
| Brokered demand deposits | — | — | 2 | — |
| Savings deposits | 165,192 | 5.1 | 136,124 | 5.8 |
| Brokered time deposits | 62,900 | 2.0 | 204,069 | 8.7 |
| Time deposits | 1,012,087 | 31.5 | 699,761 | 29.7 |
| Total deposits | $3,213,886 | 100% | $2,350,249 | 100% |
Total deposits were $3.21 billion at June 30, 2026, an increase of $863.6 million, or 36.7%, compared to $2.35 billion at December 31, 2025. The increase in deposits was primarily the result of the acquisition of WFB, which increased total deposits $1.02 billion on January 1, 2026, consisting of $187.9 million and $835.5 million of noninterest-bearing deposits and interest-bearing deposits, respectively.
The increase in noninterest-bearing demand deposits, interest-bearing demand deposits, and money market deposits at June 30, 2026 compared to December 31, 2025 was primarily the result of the acquisition of WFB and organic growth. The increase in time deposits at June 30, 2026 compared to December 31, 2025 was primarily the result of the acquisition of WFB, partially offset by the run-off of higher yielding time deposits. Brokered time deposits decreased to $62.9 million at June 30, 2026 from $204.1 million at December 31, 2025. We utilize brokered time deposits, entirely in denominations of less than $250,000, to secure fixed cost funding and reduce short-term borrowings. At June 30, 2026, the balance of brokered time deposits remained below 10% of total assets, and the remaining weighted average duration was approximately four months with a weighted average rate of 3.78%.
At June 30, 2026, our estimated uninsured deposits were $1.10 billion, or approximately 34% of total deposits, compared to $793.2 million, or approximately 34% of our total deposits at December 31, 2025. The estimates are based on the same methodologies and assumptions used for our regulatory reporting requirements. The insured deposit data does not reflect an evaluation of all of the account ownership category distinctions that would determine the availability of deposit insurance to individual accounts based on FDIC regulations.
The following table shows scheduled maturities of time deposits in excess of the FDIC insurance limit of $250,000 at June 30, 2026 and December 31, 2025 (dollars in thousands).
| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| Time remaining until maturity: | | |
| Three months or less | $155,712 | $103,130 |
| Over three months through six months | 84,992 | 60,840 |
| Over six months through twelve months | 107,019 | 62,241 |
| Over twelve months | 18,054 | 10,320 |
| Total | $365,777 | $236,531 |
***Borrowings***
At June 30, 2026, total borrowings included securities sold under agreements to repurchase, FHLB advances, subordinated debt issued in 2022, and junior subordinated debentures assumed through acquisitions.
We had $18.6 million of securities sold under agreements to repurchase at June 30, 2026 and $11.2 million at December 31, 2025.
Our advances from the FHLB were $136.0 million at June 30, 2026, an increase of $20.0 million compared to FHLB advances of $116.0 million at December 31, 2025. Based on original maturities, at June 30, 2026, $36.0 million were short-term and $100.0 million were long-term FHLB advances, compared to $36.0 million short-term and $80.0 million long-term FHLB advances at December 31, 2025. FHLB advances are used to fund new loan and investment activity that is not funded by deposits or other borrowings.
The main source of our short-term borrowings are advances from the FHLB. The rate charged for advances from the FHLB is directly tied to the Federal Reserve’s federal funds target rate. As of June 30, 2026, the federal funds target rate was 3.50% to 3.75%.
The average balances and cost of short-term borrowings for the three and six months ended June 30, 2026 and 2025 are summarized in the table below (dollars in thousands).
| Line item | Average Balances / Three months ended June 30, 2026 | Average Balances / Three months ended June 30, 2025 | Average Balances / Six months ended June 30, 2026 | Average Balances / Six months ended June 30, 2025 | Cost of Short-term Borrowings / Three months ended June 30, 2026 | Cost of Short-term Borrowings / Three months ended June 30, 2025 | Cost of Short-term Borrowings / Six months ended June 30, 2026 | Cost of Short-term Borrowings / Six months ended June 30, 2025 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Federal funds purchased and short-term FHLB advances | $48,207 | $20,989 | $42,137 | $29,731 | 3.82% | 4.44% | 3.83% | 4.44% |
| Repurchase agreements | 23,896 | 11,596 | 18,727 | 11,832 | 0.76 | 0.75 | 0.78 | 0.75 |
| Total short-term borrowings | $72,103 | $32,585 | $60,864 | $41,563 | 2.81% | 3.13% | 2.89% | 3.39% |
The following table sets forth certain information regarding securities sold under agreements to repurchase for the three and six months ended June 30, 2026 and 2025 (dollars in thousands).
| Line item | Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
| --- | --- | --- | --- | --- |
| Repurchase agreements: | | | | |
| Amount outstanding at period end | $18,575 | $11,023 | $18,575 | $11,023 |
| Average amount outstanding during the period | 23,896 | 11,596 | 18,727 | 11,832 |
| Maximum amount at any month end during the period | 18,575 | 16,082 | 18,575 | 16,082 |
| Weighted-average interest rate at period end | 0.80% | 0.75% | 0.80% | 0.75% |
| Weighted-average interest rate during period | 0.76 | 0.75 | 0.78 | 0.75 |
The carrying value of the subordinated debt, which consists entirely of our 2032 Notes, was $16.8 million and $16.7 million at June 30, 2026 and December 31, 2025, respectively. The $23.0 million and $8.8 million in junior subordinated debt at June 30, 2026 and December 31, 2025, respectively, represented the junior subordinated debentures that we assumed through acquisitions. The increase in junior subordinated debt was due to the acquisition of WFB and consisted of $9.2 million of unsecured debt obligations due to trusts and a $5.0 million loan, which matures in October 2029, related to our Southlake corporate office. On January 1, 2026, we assumed WFB’s obligations on an unsecured basis with respect to a $10.0 million note to TIB, N.A. We repaid the note in full in January 2026.
For a description of the 2032 Notes, see our Annual Report, Part II. Item 7. “MD&A – Discussion and Analysis of Financial Condition – Borrowings – 2032 Notes” and Note 10 to the financial statements included in such report.
***Stockholders*’ *Equity***
Stockholders’ equity was $420.1 million at June 30, 2026, an increase of $119.1 million compared to December 31, 2025. The increase was primarily attributable to the acquisition of WFB, $21.5 million of net income for the six months ended June 30, 2026, partially offset by $3.2 million in dividends declared on common stock, $2.3 million for share repurchases, a $2.1 million increase in accumulated other comprehensive loss due to a decrease in the fair value of the Bank’s AFS securities portfolio, and $1.1 million in dividends declared on the Series A Preferred Stock.
**Results of Operations**
***Performance Summary***
| Line item | Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
| --- | --- | --- | --- | --- |
| Net income | $9,472 | $4,494 | $21,496 | $10,787 |
| Net income available to common shareholders | 8,944 | 4,494 | 20,440 | 10,787 |
| Diluted earnings per common share | 0.61 | 0.46 | 1.38 | 1.09 |
| Performance Ratios | | | | |
| Return on average assets | 0.98% | 0.66% | 1.11% | 0.80% |
| Return on average common equity | 9.19 | 7.07 | 10.64 | 8.66 |
| Book value per common share | $28.29 | $26.01 | $28.29 | $26.01 |
***Net Interest Income and Net Interest Margin***
Net interest income, our principal source of earnings, is the difference between the interest income generated by earning assets and the total interest cost of the deposits and borrowings obtained to fund those assets. Factors affecting the level of net interest income include the volume of earning assets and interest-bearing liabilities, yields earned on loans and investments and rates paid on deposits and other borrowings, the level of nonperforming loans, the amount of noninterest-bearing liabilities supporting earning assets, and the interest rate environment. Net interest margin is the ratio of net interest income to average interest-earning assets.
The primary factors affecting net interest margin are changes in interest rates, competition, and the shape of the interest rate yield curve. The Federal Reserve Board sets various benchmark rates, including the federal funds target rate, and thereby influences the general market rates of interest, including the deposit and loan rates offered by financial institutions. During 2025, beginning in September, the Federal Reserve reduced the federal funds target rate three times by 75 basis points on a cumulative basis to 3.50% to 3.75%, where it remained as of August 6, 2026. Accordingly, the prevailing federal funds target rate during the three and six months ended June 30, 2026 was lower than during the three and six months ended June 30, 2025. For additional discussion, see *Certain Events That Affect Period-over-Period Comparability* – *Changing Inflation and Interest Rates.*
*Three months ended June 30, 2026 vs. three months ended June 30, 2025*. Net interest income increased 70.3% to $33.4 million for the three months ended June 30, 2026 compared to $19.6 million for the same period in 2025. The increase was primarily due to a higher average balance of, and an increase in the yield on, the loan portfolio, partially offset by an increase in the average balance of interest-bearing demand deposits and time deposits. Average loans increased by $945.4 million for the three months ended June 30, 2026 primarily due to the acquisition of WFB, which, in addition to higher loan yields, resulted in a $16.6 million increase in interest income on loans compared to the same period in 2025. Average brokered time deposits were $73.5 million for the three months ended June 30, 2026 compared to $255.4 million during the three months ended June 30, 2025, which along with lower rates paid, resulted in a $2.3 million decrease in interest expense for the three months ended June 30, 2026 compared to the same period in 2025. Average interest-bearing demand deposits increased by $526.2 million, which, combined with an increase in rates, resulted in a $3.3 million increase in interest expense in the second quarter of 2026 compared to the same period in 2025. A higher average balance of time deposits partially offset by a decrease in rates paid on time deposits resulted in a $2.0 million increase in interest expense compared to the same period in 2025. Average noninterest-bearing deposits increased by $178.7 million. Our yield on interest-earning assets increased primarily due to an increase in the average balance of, and the yield on, the loan portfolio. Rates paid on interest-bearing liabilities decreased primarily as a result of the overall decrease in prevailing interest rates.
Interest income was $53.2 million for the three months ended June 30, 2026, compared to $35.4 million for the same period in 2025. Loan interest income made up substantially all of our interest income for the three months ended June 30, 2026 and 2025, although interest on investment securities contributed 8.5% of interest income during the second quarter of 2026 compared to 10.3% during the second quarter of 2025. The overall yield on interest-earning assets was 5.83% and 5.45% for the three months ended June 30, 2026 and 2025, respectively. The loan portfolio yielded 6.28% and 5.94% for the three months ended June 30, 2026 and 2025, respectively, while the yield on the investment portfolio was 3.52% for the three months ended June 30, 2026 compared to 3.22% for the three months ended June 30, 2025. The overall yield on interest-earning assets increased 38 basis points for the quarter ended June 30, 2026 compared to the quarter ended June 30, 2025 and was primarily driven by a 34 basis point increase in the yield on the loan portfolio and a 30 basis point increase in the yield on the investment securities portfolio.
Interest expense was $19.8 million for the three months ended June 30, 2026, an increase of $4.0 million compared to interest expense of $15.7 million for the three months ended June 30, 2025. An increase in interest expense of $4.9 million resulted from an increase in the volume of interest-bearing liabilities, primarily interest-bearing demand deposits and time deposits. A decrease of $0.8 million resulted from the decrease in the cost of interest-bearing liabilities, primarily time deposits and brokered time deposits. Average interest-bearing liabilities increased by $789.9 million for the three months ended June 30, 2026 compared to the same period in 2025, while average interest-bearing deposits increased by $682.3 million, primarily due to an increase in average interest-bearing demand deposits and average time deposits. We increased rates on our interest-bearing demand deposits during the second quarter of 2026 compared to the second quarter of 2025 to attract and retain lower cost deposits relative to higher cost short-term borrowings and brokered time deposits, and the interest-bearing demand deposits acquired from WFB had a higher rate than legacy interest-bearing demand deposits. Average time deposits increased due to the acquisition of WFB; however, we reduced rates on our time deposits during the second quarter of 2026 compared to the second quarter of 2025 due to lower prevailing market interest rates. The cost of interest-bearing deposits decreased 34 basis points to 2.72% for the three months ended June 30, 2026 compared to 3.06% for the three months ended June 30, 2025 primarily as a result of a lower average balance of, and a decrease in rates paid on, brokered time deposits and a decrease in rates paid on time deposits, partially offset by a higher average balance of time deposits and a higher average balance of, and an increase in the rates paid on, interest-bearing demand deposits. The cost of interest-bearing liabilities decreased 31 basis points to 2.82% for the three months ended June 30, 2026 compared to 3.13% for the same period in 2025.
Net interest margin was 3.67% for the three months ended June 30, 2026, an increase of 64 basis points from 3.03% for the three months ended June 30, 2025. The increase in net interest margin was primarily driven by a 38 basis point increase in the yield on interest-earning assets and a 31 basis point decrease in the cost of interest-bearing liabilities.
*Average Balances and Yields*. The following table sets forth average balance sheet data, including all major categories of interest-earning assets and interest-bearing liabilities, together with the interest earned or paid and the average yield or rate paid on each such category for the three months ended June 30, 2026 and 2025. Averages presented in the table below are daily averages (dollars in thousands).
| Line item | Three months ended June 30, 2026 / Average / Balance | Three months ended June 30, 2026 / Interest / Income/ / Expense(1) | Three months ended June 30, 2026 / Yield/ Rate(1) | Three months ended June 30, 2025 / Average / Balance | Three months ended June 30, 2025 / Interest / Income/ / Expense(1) | Three months ended June 30, 2025 / Yield/ Rate(1) |
| --- | --- | --- | --- | --- | --- | --- |
| Assets | | | | | | |
| Interest-earning assets: | | | | | | |
| Loans | $3,049,671 | $47,715 | 6.28% | $2,104,266 | $31,140 | 5.94% |
| Securities: | | | | | | |
| Taxable | 460,171 | 3,790 | 3.30 | 402,438 | 2,961 | 2.95 |
| Tax-exempt | 56,218 | 743 | 5.30 | 49,682 | 665 | 5.37 |
| Interest-earning balances with banks | 90,896 | 951 | 4.20 | 47,909 | 593 | 4.97 |
| Total interest-earning assets | 3,656,956 | 53,199 | 5.83 | 2,604,295 | 35,359 | 5.45 |
| Cash and due from banks | 31,886 | | | 26,185 | | |
| Intangible assets | 71,812 | | | 41,496 | | |
| Other assets | 154,580 | | | 95,142 | | |
| Allowance for credit losses | (35,523) | | | (26,730) | | |
| Total assets | $3,879,711 | | | $2,740,388 | | |
| Liabilities and stockholders’ equity | | | | | | |
| Interest-bearing liabilities: | | | | | | |
| Deposits: | | | | | | |
| Interest-bearing demand deposits | $1,320,779 | $7,707 | 2.34% | $794,603 | $4,396 | 2.22% |
| Brokered demand deposits | 88 | 1 | 3.82 | 980 | 11 | 4.50 |
| Savings deposits | 165,410 | 376 | 0.91 | 135,662 | 350 | 1.04 |
| Brokered time deposits | 73,462 | 706 | 3.86 | 255,374 | 2,999 | 4.71 |
| Time deposits | 1,019,011 | 8,706 | 3.43 | 709,855 | 6,700 | 3.79 |
| Total interest-bearing deposits | 2,578,750 | 17,496 | 2.72 | 1,896,474 | 14,456 | 3.06 |
| Short-term borrowings(2) | 72,103 | 504 | 2.81 | 32,585 | 254 | 3.13 |
| Long-term debt | 153,627 | 1,750 | 4.57 | 85,487 | 1,005 | 4.71 |
| Total interest-bearing liabilities | 2,804,480 | 19,750 | 2.82 | 2,014,546 | 15,715 | 3.13 |
| Noninterest-bearing deposits | 627,583 | | | 448,835 | | |
| Other liabilities | 27,114 | | | 22,101 | | |
| Stockholders’ equity | 420,534 | | | 254,906 | | |
| Total liabilities and stockholders’ equity | $3,879,711 | | | $2,740,388 | | |
| Net interest income/net interest margin | | $33,449 | 3.67% | | $19,644 | 3.03% |
(1)
Interest income and net interest margin are expressed as a percentage of average interest-earning assets outstanding for the indicated periods and are not presented on a tax equivalent basis. Interest expense is expressed as a percentage of average interest-bearing liabilities for the indicated periods.
(2) For additional information, see *Discussion and Analysis of Financial Condition – Borrowings.*
_Three months ended June 30, 2026 vs. · Three months ended June 30, 2025_
| Line item | Volume | Rate | Net(1) |
| --- | --- | --- | --- |
| Interest income: | | | |
| Loans | $13,990 | $2,585 | $16,575 |
| Securities: | | | |
| Taxable | 425 | 404 | 829 |
| Tax-exempt | 88 | (10) | 78 |
| Interest-earning balances with banks | 533 | (175) | 358 |
| Total interest-earning assets | 15,036 | 2,804 | 17,840 |
| Interest expense: | | | |
| Interest-bearing demand deposits | 2,911 | 400 | 3,311 |
| Brokered demand deposits | (10) | — | (10) |
| Savings deposits | 77 | (51) | 26 |
| Brokered time deposits | (2,136) | (157) | (2,293) |
| Time deposits | 2,918 | (912) | 2,006 |
| Short-term borrowings | 308 | (58) | 250 |
| Long-term debt | 801 | (56) | 745 |
| Total interest-bearing liabilities | 4,869 | (834) | 4,035 |
| Change in net interest income | $10,167 | $3,638 | $13,805 |
(1)
Changes in interest due to both volume and rate have been allocated entirely to rate.
*Six months ended June 30, 2026 vs. six months ended June 30, 2025*. Net interest income increased 74.0% to $66.1 million for the six months ended June 30, 2026 compared to $38.0 million for the same period in 2025. The increase was primarily due to a higher average balance of, and an increase in the yield on, the loan portfolio, partially offset by an increase in the average balance of interest-bearing demand deposits and time deposits. Average loans increased by $966.1 million for the six months ended June 30, 2026 primarily due to the acquisition of WFB, which, in addition to higher loan yields, resulted in a $34.0 million increase in interest income on loans compared to the same period in 2025. Average brokered time deposits were $112.7 million for the six months ended June 30, 2026 compared to $253.8 million during the six months ended June 30, 2025, which along with lower rates paid, resulted in a $3.8 million decrease in interest expense for the six months ended June 30, 2026 compared to the same period in 2025. Average interest-bearing demand deposits increased by $522.1 million, which, combined with an increase in rates, resulted in a $6.9 million increase in interest expense in the six months ended June 30, 2026 compared to the same period in 2025. A higher average balance of time deposits partially offset by a decrease in rates paid on time deposits resulted in a $4.1 million increase in interest expense compared to the same period in 2025. Average noninterest-bearing deposits increased by $191.1 million. Our yield on interest-earning assets increased primarily due to an increase in the average balance of, and the yield on, the loan portfolio. Rates paid on interest-bearing liabilities decreased primarily as a result of the overall decrease in prevailing interest rates.
Interest income was $106.4 million for the six months ended June 30, 2026, compared to $69.8 million for the same period in 2025. Loan interest income made up substantially all of our interest income for the six months ended June 30, 2026 and 2025, although interest on investment securities contributed 8.1% of interest income during the six months ended June 30, 2026 compared to 10.0% during the six months ended June 30, 2025. The overall yield on interest-earning assets was 5.85% and 5.42% for the six months ended June 30, 2026 and 2025, respectively. The loan portfolio yielded 6.28% and 5.91% for the six months ended June 30, 2026 and 2025, respectively, while the yield on the investment portfolio was 3.48% for the six months ended June 30, 2026 compared to 3.16% for the six months ended June 30, 2025. The overall yield on interest-earning assets increased 43 basis points for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 and was primarily driven by a 37 basis point increase in the yield on the loan portfolio and a 32 basis point increase in the yield on the investment securities portfolio.
Interest expense was $40.3 million for the six months ended June 30, 2026, an increase of $8.5 million compared to interest expense of $31.8 million for the six months ended June 30, 2025. An increase in interest expense of $10.1 million resulted from an increase in the volume of interest-bearing liabilities, primarily interest-bearing deposits and time deposits. A decrease of $1.6 million resulted from the decrease in the cost of interest-bearing liabilities, primarily time deposits and brokered time deposits. Average interest-bearing liabilities increased by $801.3 million for the six months ended June 30, 2026 compared to the same period in 2025, while average interest-bearing deposits increased by $728.4 million, primarily due to an increase in average interest-bearing demand deposits and average time deposits. We increased rates on our interest-bearing demand deposits during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 to attract and retain lower cost deposits relative to higher cost short-term borrowings and brokered time deposits, and the interest-bearing demand deposits acquired from WFB had a higher rate than legacy interest-bearing demand deposits. Average time deposits increased due to the acquisition of WFB; however, we reduced rates on our time deposits during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to lower prevailing market interest rates. The cost of interest-bearing deposits decreased 31 basis points to 2.79% for the six months ended June 30, 2026 compared to 3.10% for the six months ended June 30, 2025 primarily as a result of a lower average balance of, and a decrease in rates paid on, brokered time deposits and a decrease in rates paid on time deposits, partially offset by a higher average balance of time deposits and a higher average balance of, and an increase in the rates paid on, interest-bearing demand deposits. The cost of interest-bearing liabilities decreased 30 basis points to 2.88% for the six months ended June 30, 2026 compared to 3.18% for the same period in 2025.
Net interest margin was 3.63% for the six months ended June 30, 2026, an increase of 68 basis points from 2.95% for the six months ended June 30, 2025. The increase in net interest margin was primarily driven by a 43 basis point increase in the yield on interest-earning assets and a 30 basis point decrease in the cost of interest-bearing liabilities.
*Average Balances and Yields*. The following table sets forth average balance sheet data, including all major categories of interest-earning assets and interest-bearing liabilities, together with the interest earned or paid and the average yield or rate paid on each such category for the six months ended June 30, 2026 and 2025. Averages presented in the table below are daily averages (dollars in thousands).
| Line item | Six months ended June 30, 2026 / Average / Balance | Six months ended June 30, 2026 / Interest / Income/ / Expense(1) | Six months ended June 30, 2026 / Yield/ Rate(1) | Six months ended June 30, 2025 / Average / Balance | Six months ended June 30, 2025 / Interest / Income/ / Expense(1) | Six months ended June 30, 2025 / Yield/ Rate(1) |
| --- | --- | --- | --- | --- | --- | --- |
| Assets | | | | | | |
| Interest-earning assets: | | | | | | |
| Loans | $3,072,666 | $95,669 | 6.28% | $2,106,572 | $61,692 | 5.91% |
| Securities: | | | | | | |
| Taxable | 444,435 | 7,162 | 3.25 | 395,029 | 5,640 | 2.88 |
| Tax-exempt | 56,427 | 1,484 | 5.30 | 50,218 | 1,336 | 5.37 |
| Interest-earning balances with banks | 97,138 | 2,088 | 4.34 | 45,736 | 1,125 | 4.96 |
| Total interest-earning assets | 3,670,666 | 106,403 | 5.85 | 2,597,555 | 69,793 | 5.42 |
| Cash and due from banks | 32,423 | | | 26,155 | | |
| Intangible assets | 74,630 | | | 41,563 | | |
| Other assets | 153,951 | | | 94,569 | | |
| Allowance for credit losses | (36,703) | | | (26,708) | | |
| Total assets | $3,894,967 | | | $2,733,134 | | |
| Liabilities and stockholders’ equity | | | | | | |
| Interest-bearing liabilities: | | | | | | |
| Deposits: | | | | | | |
| Interest-bearing demand deposits | $1,305,227 | $15,378 | 2.38% | $783,176 | $8,475 | 2.18% |
| Brokered demand deposits | 44 | 1 | 3.82 | 4,725 | 105 | 4.47 |
| Savings deposits | 165,493 | 737 | 0.90 | 134,906 | 702 | 1.05 |
| Brokered time deposits | 112,657 | 2,213 | 3.96 | 253,834 | 6,031 | 4.79 |
| Time deposits | 1,037,048 | 17,877 | 3.48 | 715,478 | 13,783 | 3.88 |
| Total interest-bearing deposits | 2,620,469 | 36,206 | 2.79 | 1,892,119 | 29,096 | 3.10 |
| Short-term borrowings(2) | 60,864 | 872 | 2.89 | 41,563 | 699 | 3.39 |
| Long-term debt | 139,141 | 3,216 | 4.66 | 85,469 | 2,009 | 4.74 |
| Total interest-bearing liabilities | 2,820,474 | 40,294 | 2.88 | 2,019,151 | 31,804 | 3.18 |
| Noninterest-bearing deposits | 630,593 | | | 439,509 | | |
| Other liabilities | 26,054 | | | 23,218 | | |
| Stockholders’ equity | 417,846 | | | 251,256 | | |
| Total liabilities and stockholders’ equity | $3,894,967 | | | $2,733,134 | | |
| Net interest income/net interest margin | | $66,109 | 3.63% | | $37,989 | 2.95% |
(1)
Interest income and net interest margin are expressed as a percentage of average interest-earning assets outstanding for the indicated periods and are not presented on a tax equivalent basis. Interest expense is expressed as a percentage of average interest-bearing liabilities for the indicated periods.
(2) For additional information, see *Discussion and Analysis of Financial Condition – Borrowings.*
_Six months ended June 30, 2026 vs. · Six months ended June 30, 2025_
| Line item | Volume | Rate | Net(1) |
| --- | --- | --- | --- |
| Interest income: | | | |
| Loans | $28,292 | $5,685 | $33,977 |
| Securities: | | | |
| Taxable | 706 | 816 | 1,522 |
| Tax-exempt | 165 | (17) | 148 |
| Interest-earning balances with banks | 1,265 | (302) | 963 |
| Total interest-earning assets | 30,428 | 6,182 | 36,610 |
| Interest expense: | | | |
| Interest-bearing demand deposits | 5,649 | 1,254 | 6,903 |
| Brokered demand deposits | (104) | — | (104) |
| Savings deposits | 159 | (124) | 35 |
| Brokered time deposits | (3,354) | (464) | (3,818) |
| Time deposits | 6,195 | (2,101) | 4,094 |
| Short-term borrowings | 325 | (152) | 173 |
| Long-term debt | 1,262 | (55) | 1,207 |
| Total interest-bearing liabilities | 10,132 | (1,642) | 8,490 |
| Change in net interest income | $20,296 | $7,824 | $28,120 |
(1)
Changes in interest due to both volume and rate have been allocated entirely to rate.
***Noninterest Income***
We expect to continue to develop new products that generate noninterest income, and enhance our existing products, in order to diversify our revenue sources.
The following table illustrates the primary components of noninterest income for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025 (dollars in thousands).
| Line item | Three months ended June 30, 2026 | Three months ended June 30, 2025 | Increase (Decrease) / $ | Increase (Decrease) / % | Six months ended June 30, 2026 | Six months ended June 30, 2025 | Increase (Decrease) / $ | Increase (Decrease) / % |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Noninterest income: | | | | | | | | |
| Service charges on deposit accounts | $933 | $788 | $145 | 18.4% | $1,889 | $1,583 | $306 | 19.3% |
| Gain on call or sale of investment securities, net | 12 | — | 12 | — | 12 | — | 12 | — |
| Loss on sale or disposition of bank premises and equipment, net | — | — | — | — | — | (3) | 3 | 100.0 |
| Gain (loss) on sale of other real estate owned, net | 4 | 29 | (25) | (86.2) | (80) | 29 | (109) | (375.9) |
| Gain on sale of loans | — | — | — | — | 26 | — | 26 | — |
| Interchange fees | 524 | 401 | 123 | 30.7 | 1,083 | 791 | 292 | 36.9 |
| Income from BOLI | 696 | 476 | 220 | 46.2 | 1,360 | 924 | 436 | 47.2 |
| Change in the fair value of equity securities | 177 | 53 | 124 | 234.0 | 307 | (23) | 330 | 1,434.8 |
| Other operating income | 752 | 879 | (127) | (14.4) | 1,481 | 1,336 | 145 | 10.9 |
| Total noninterest income | $3,098 | $2,626 | $472 | 18.0% | $6,078 | $4,637 | $1,441 | 31.1% |
*Three months ended June 30, 2026 vs. three months ended June 30, 2025*. Total noninterest income increased $0.5 million, or 18.0%, to $3.1 million for the three months ended June 30, 2026 compared to $2.6 million for the three months ended June 30, 2025. The increase in noninterest income was primarily attributable to a $0.2 million increase in income from BOLI, a $0.1 million increase in interchange fees, a $0.1 million increase in service charges on deposit accounts, a $0.1 million increase in change in fair value of equity securities, partially offset by a $0.1 million decrease in other operating income. The increases were primarily related to the acquisition of WFB on January 1, 2026. The decrease in other operating income was primarily attributable to $0.3 million of income from insurance proceeds received for damages to a property recorded in other real estate owned in the second quarter of 2025, partially offset by a $0.1 million increase in distributions from other investments and a $0.1 million increase in wealth management income.
*Six months ended June 30, 2026 vs. six months ended June 30, 2025*. Total noninterest income increased $1.4 million, or 31.1%, to $6.1 million for the six months ended June 30, 2026 compared to $4.6 million for the six months ended June 30, 2025. The increase in noninterest income was primarily attributable to a $0.4 million increase in income from BOLI, a $0.3 million increase in interchange fees, a $0.3 million increase in service charges on deposit accounts, a $0.3 million increase in change in fair value of equity securities and a $0.1 million increase in other operating income. The increases were primarily related to the acquisition of WFB on January 1, 2026. The increase in other operating income was primarily attributable to a $0.2 million increase in distributions from other investments and a $0.2 million increase in wealth management income, partially offset by $0.3 million of income from insurance proceeds received for damages to a property recorded in other real estate owned in the second quarter of 2025.
***Noninterest Expense***
Noninterest expense includes salaries and employee benefits and other costs associated with the conduct of our operations. Our goal is to manage our costs within the framework of our operating strategy of generating consistent, quality earnings.
The following table illustrates the primary components of noninterest expense for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025 (dollars in thousands).
| Line item | Three months ended June 30, 2026 | Three months ended June 30, 2025 | Increase (Decrease) / $ | Increase (Decrease) / % | Six months ended June 30, 2026 | Six months ended June 30, 2025 | Increase (Decrease) / $ | Increase (Decrease) / % |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Noninterest expense: | | | | | | | | |
| Depreciation and amortization | $1,333 | $710 | $623 | 87.7% | $2,677 | $1,431 | $1,246 | 87.1% |
| Salaries and employee benefits | 13,430 | 10,257 | 3,173 | 30.9 | 26,377 | 19,860 | 6,517 | 32.8 |
| Occupancy | 955 | 675 | 280 | 41.5 | 1,943 | 1,316 | 627 | 47.6 |
| Data processing | 1,223 | 914 | 309 | 33.8 | 2,437 | 1,811 | 626 | 34.6 |
| Marketing | 130 | 112 | 18 | 16.1 | 229 | 223 | 6 | 2.7 |
| Professional fees | 924 | 468 | 456 | 97.4 | 1,723 | 1,059 | 664 | 62.7 |
| Acquisition expense | 2,582 | 182 | 2,400 | 1,318.7 | 4,310 | 341 | 3,969 | 1,163.9 |
| Other operating expenses | 4,087 | 3,382 | 705 | 20.8 | 7,807 | 6,897 | 910 | 13.2 |
| Total noninterest expense | $24,664 | $16,700 | $7,964 | 47.7% | $47,503 | $32,938 | $14,565 | 44.2% |
*Three months ended June 30, 2026 vs. three months ended June 30, 2025*. Total noninterest expense was $24.7 million for the three months ended June 30, 2026, an increase of $8.0 million, or 47.7%, compared to the same period in 2025. The increase was primarily driven by a $3.2 million increase in salaries and employee benefits, a $2.4 million increase in acquisition expense, a $0.6 million increase in depreciation and amortization, a $0.5 million increase in professional fees, a $0.3 million increase in occupancy, a $0.3 million increase in data processing and a $0.7 million increase in other operating expense. The increases were primarily related to the acquisition of WFB on January 1, 2026. The increase in other operating expense was primarily attributable to a $0.4 million increase in branch services, a $0.2 million increase in FDIC assessments, a $0.2 million increase in software expense and a $0.1 million increase in telecommunications expense, partially offset by a $0.2 million decrease in other real estate expense and a $0.1 million decrease in bank shares taxes.
*Six months ended June 30, 2026 vs. six months ended June 30, 2025*. Total noninterest expense was $47.5 million for the six months ended June 30, 2026, an increase of $14.6 million, or 44.2%, compared to the same period in 2025. The increase was primarily driven by a $6.5 million increase in salaries and employee benefits, a $4.0 million increase in acquisition expense, a $1.2 million increase in depreciation and amortization, a $0.6 million increase in occupancy, a $0.6 million increase in data processing and a $0.9 million increase in other operating expense. The increases were primarily related to the acquisition of WFB on January 1, 2026. The increase in other operating expense was primarily attributable to a $0.4 million increase in FDIC assessments, a $0.3 million increase in software expense, a $0.2 million increase in telecommunications expense and $0.2 million increase in office supplies and postage, partially offset by a $0.2 million decrease in bank shares taxes.
***Income Tax Expense***
Income tax expense for the three months ended June 30, 2026 and 2025 was $2.1 million and $0.9 million, respectively. The effective tax rate for the three months ended June 30, 2026 and 2025 was 18.4% and 17.2%, respectively. Income tax expense for the six months ended June 30, 2026 and 2025 was $5.0 million and $2.4 million, respectively. The effective tax rate for the six months ended June 30, 2026 and 2025 was 18.9% and 17.9%, respectively.
For the three months and six months ended June 30, 2026 and 2025, the effective tax rate differed from the statutory tax rate of 21% primarily due to tax-exempt interest income earned on certain loans and investment securities and income from BOLI.
**Risk Management**
The primary risks associated with our operations are credit, interest rate and liquidity risk. Changing inflation also presents risk. Credit, inflation and interest rate risk are discussed immediately below, while liquidity risk is discussed in this section under the heading *Liquidity and Capital Resources* further below.
***Credit Risk and the Allowance for Credit Losses***
*General*. The risk of loss should a borrower default on a loan is inherent in any lending activity. Our portfolio and related credit risk are monitored and managed on an ongoing basis by our risk management department, the Board’s loan committee and the full Board. We utilize a ten point risk-rating system, which assigns a risk grade to each borrower based on a number of quantitative and qualitative factors associated with a loan transaction. The risk grade categorizes the loan into one of five risk categories based on information about the ability of borrowers to service the debt. The information includes, among other factors, current financial information about the borrower, historical payment experience, credit documentation, public information and current economic trends. These categories assist management in monitoring our credit quality. The risk categories, which are consistent with the definitions used in guidance promulgated by federal banking regulators, are as follows.
*
- *
*Pass (grades 1-6)* – Loans not falling into one of the categories below are considered Pass. These loans have high credit characteristics and financial strength. The borrowers at least generate profits and cash flow that are in line with peer and industry standards and have debt service coverage ratios above loan covenants and our policy guidelines. For some of these loans, a guaranty from a financially capable party mitigates characteristics of the borrower that might otherwise result in a lower grade.
- *Special Mention (grade 7)* – Loans classified as Special Mention possess some credit deficiencies that need to be corrected to avoid a greater risk of default in the future. For example, financial ratios relating to the borrower may have deteriorated. Often, a special mention categorization is temporary while certain factors are analyzed or matters addressed before the loan is re-categorized as either Pass or Substandard.
- *Substandard (grade 8)* – Loans rated as Substandard are inadequately protected by the current net worth and paying capacity of the borrower or the liquidation value of any collateral. If deficiencies are not addressed, it is likely that this category of loan will result in the Bank incurring a loss. Where a borrower has been unable to adjust to industry or general economic conditions, the borrower’s loan is often categorized as Substandard.
- *Doubtful (grade 9)* – Doubtful loans are Substandard loans with one or more additional negative factors that makes full collection of amounts outstanding, either through repayment or liquidation of collateral, highly questionable and improbable.
- *Loss (grade 10)* – Loans classified as Loss have deteriorated to such a point that it is not practicable to defer writing off the loan. For these loans, all efforts to remediate the loan’s negative characteristics have failed and the value of the collateral, if any, has severely deteriorated relative to the amount outstanding. Although some value may be recovered on such a loan, it is not significant in relation to the amount borrowed.
At June 30, 2026 and December 31, 2025, there were no loans classified as Loss, while there were $23,000 and no loans, respectively, classified as Doubtful, $51.1 million and $38.1 million, respectively, of loans classified as Substandard, and $9.2 million and $9.7 million, respectively, of loans classified as Special Mention.
An independent loan review is conducted annually, whether internally or externally, on at least 40% of commercial loans utilizing a risk-based approach designed to maximize the effectiveness of the review. Internal loan review is independent of the loan underwriting and approval process. In addition, credit analysts periodically review certain commercial loans to identify negative financial trends related to any one borrower, any related groups of borrowers or an industry. All loans not categorized as pass are put on an internal watch list, with quarterly reports to the Board. In addition, a written status report is maintained by our special assets division for all commercial loans categorized as Substandard or worse. We use this information in connection with our collection efforts.
If our collection efforts are unsuccessful, collateral securing loans may be repossessed and sold or, for loans secured by real estate, foreclosure proceedings initiated. The collateral is sold at public auction for fair market value (based upon recent appraisals), with fees associated with the foreclosure being deducted from the sales price. The purchase price is applied to the outstanding loan balance. If the loan balance is greater than the sales proceeds, the deficient balance is charged-off.
*Allowance for Credit Losses*. We account for the ACL in accordance with ASC 326, which uses the CECL accounting methodology. The CECL methodology requires that lifetime expected credit losses be recorded at the time the financial asset is originated or acquired and be adjusted each period through a provision for credit losses for changes in the expected lifetime credit losses. The ACL was $36.3 million and $26.3 million at June 30, 2026 and December 31, 2025, respectively. On January 1, 2026, we recorded an $11.7 million ACL due to the acquisition of WFB.
We maintain a separate ACL on unfunded loan commitments, which is included in “Accrued taxes and other liabilities” in the accompanying consolidated balance sheets. The ACL is generally increased by the provision for credit losses and decreased by charge-offs, net of recoveries.
The provision for credit losses for the three months ended June 30, 2026 was primarily due to adjustments to qualitative factors, partially offset by a decrease in total loans. The reversal of credit losses for the six months ended June 30, 2026 was primarily due to a decrease in total loans during the period, changes in the economic forecast and the completion of our CECL allowance model recalibration. The provision for credit losses for the three months ended June 30, 2025 was primarily due to changes in the economic forecast and loan mix. The reversal of credit losses for the six months ended June 30, 2025 was primarily due to a $3.3 million recovery during the first quarter of 2025 of loans previously charged off as a result of a property insurance settlement related to one loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida.
Periodically, we complete a CECL allowance model recalibration. This process, which was completed in the first quarter of 2026, includes peer group analysis, updates to our probability of default and loss-given default models, including prepayment and curtailment assumptions, and qualitative factor scorecard ranges, as needed. The changes resulting from the model recalibration reduced the ACL by approximately $3.0 million and $0.5 million during the six months ended June 30, 2026 and 2025, respectively.
Refer to Note 1. Summary of Significant Accounting Policies – Allowance for Credit Losses in our Annual Report for further discussion of our ACL accounting policy.
The following table presents the allocation of the ACL by loan category and the percentage of loans in each loan category to total loans as of the dates indicated (dollars in thousands).
| Line item | June 30, 2026 / Allowance for Credit Losses | June 30, 2026 / % of Loans in each Category to Total Loans | December 31, 2025 / Allowance for Credit Losses | December 31, 2025 / % of Loans in each Category to Total Loans |
| --- | --- | --- | --- | --- |
| Mortgage loans on real estate: | | | | |
| Construction and development | $1,609 | 8.6% | $1,327 | 6.8% |
| 1-4 Family | 16,126 | 29.7 | 6,053 | 17.3 |
| Multifamily | 1,186 | 4.7 | 1,814 | 6.0 |
| Farmland | 10 | 0.3 | 6 | 0.2 |
| Commercial real estate | 9,017 | 33.3 | 11,388 | 41.9 |
| Commercial and industrial | 8,182 | 23.0 | 5,680 | 27.4 |
| Consumer | 121 | 0.4 | 81 | 0.4 |
| Total | $36,251 | 100% | $26,349 | 100% |
The following table presents the amount of the ACL allocated to each loan category as a percentage of total loans as of the dates indicated.
| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| Mortgage loans on real estate: | | |
| Construction and development | 0.05% | 0.06% |
| 1-4 Family | 0.53 | 0.28 |
| Multifamily | 0.04 | 0.08 |
| Farmland | 0.00 | 0.00 |
| Commercial real estate | 0.29 | 0.52 |
| Commercial and industrial | 0.27 | 0.26 |
| Consumer | 0.00 | 0.01 |
| Total | 1.18% | 1.21% |
As discussed above, the balance in the ACL is principally influenced by the provision for (reversal of) credit losses on loans and net loan loss experience. Additions to the ACL are charged to the provision for credit losses on loans. Losses are charged to the ACL as incurred and recoveries on losses previously charged to the allowance are credited to the allowance at the time the recovery is collected.
The table below reflects the activity in the ACL and key ratios for the periods indicated (dollars in thousands).
| Line item | Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
| --- | --- | --- | --- | --- |
| Allowance at beginning of period | $35,985 | $26,435 | $26,349 | $26,721 |
| ACL on PCD loans at acquisition | — | — | 143 | — |
| ACL on PSL loans at acquisition | — | — | 11,559 | — |
| Provision for (reversal of) credit losses on loans(1) | 374 | 172 | (1,428) | (3,523) |
| Net (charge-offs) recoveries | (108) | 13 | (372) | 3,422 |
| Allowance at end of period | $36,251 | $26,620 | $36,251 | $26,620 |
| Total loans - period end | 3,059,887 | 2,106,355 | 3,059,887 | 2,106,355 |
| Nonaccrual loans - period end | 18,462 | 7,453 | 18,462 | 7,453 |
| Key ratios: | | | | |
| Allowance for credit losses to total loans - period end | 1.18% | 1.26% | 1.18% | 1.26% |
| Allowance for credit losses to nonaccrual loans - period end | 196.4% | 357.2% | 196.4% | 357.2% |
| Nonaccrual loans to total loans - period end | 0.60% | 0.35% | 0.60% | 0.35% |
(1) For the three months ended June 30, 2026, the $0.3 million provision for credit losses on the consolidated statement of income includes a $0.4 million provision for credit losses on loans and a $0.1 million reversal of credit losses on unfunded loan commitments. For the six months ended June 30, 2026, the $1.8 million reversal of credit losses on the consolidated statement of income includes a $1.4 million reversal of credit losses on loans and a $0.4 million reversal of credit losses on unfunded loan commitments. For the three months ended June 30, 2025, the $0.1 million provision for credit losses on the consolidated statement of income includes a $0.2 million provision for credit losses on loans and a $31,000 reversal of credit losses on unfunded loan commitments. For the six months ended June 30, 2025, the $3.5 million reversal of credit losses on the consolidated statement of income includes a $3.5 million reversal of credit losses on loans and a $68,000 provision for credit losses on unfunded loan commitments.
The ACL to total loans decreased to 1.18% at June 30, 2026 compared to 1.26% at June 30, 2025, and the ACL to nonaccrual loans ratio decreased to 196.4% at June 30, 2026 compared to 357.2% at June 30, 2025. The decrease in the ACL to total loans compared to June 30, 2025 was primarily due to the completion of our CECL allowance model recalibration and changes in the economic forecast. The decrease in ACL to nonaccrual loans compared to June 30, 2025 was primarily due to an increase in nonaccrual loans. Nonaccrual loans were $18.5 million, or 0.60% of total loans, at June 30, 2026, an increase of $11.0 million compared to $7.5 million, or 0.35% of total loans, at June 30, 2025. The increase in nonaccrual loans was primarily attributable to the downgrade of one primarily owner-occupied commercial real estate relationship totaling $6.6 million, one construction and development relationship totaling $1.6 million and loans acquired from WFB totaling $1.2 million.
The following table presents the allocation of net (charge-offs) recoveries by loan category for the periods indicated (dollars in thousands).
| Line item | Three months ended June 30, 2026 / Net Recoveries (Charge-offs) | Three months ended June 30, 2026 / Average Balance | Three months ended June 30, 2026 / Ratio of Net Charge-offs (Recoveries) to Average Loans | Three months ended June 30, 2025 / Net Recoveries (Charge-offs) | Three months ended June 30, 2025 / Average Balance | Three months ended June 30, 2025 / Ratio of Net Charge-offs (Recoveries) to Average Loans |
| --- | --- | --- | --- | --- | --- | --- |
| Mortgage loans on real estate: | | | | | | |
| Construction and development | — | $276,325 | — | — | $133,104 | — |
| 1-4 Family | (37) | 915,812 | 0.00 | 80 | 391,490 | (0.02) |
| Multifamily | — | 135,020 | — | — | 102,999 | — |
| Farmland | — | 9,975 | — | 1 | 6,242 | (0.02) |
| Commercial real estate | (123) | 1,026,014 | 0.01 | 8 | 943,943 | (0.00) |
| Commercial and industrial | 88 | 673,712 | (0.01) | (64) | 516,705 | 0.01 |
| Consumer | (36) | 12,813 | 0.28 | (12) | 9,783 | 0.12 |
| Total | $(108) | $3,049,671 | 0.00% | $13 | $2,104,266 | (0.00 |
| Line item | Six months ended June 30, 2026 / Net Recoveries (Charge-offs) | Six months ended June 30, 2026 / Average Balance | Six months ended June 30, 2026 / Ratio of Net Charge-offs (Recoveries) to Average Loans | Six months ended June 30, 2025 / Net Recoveries (Charge-offs) | Six months ended June 30, 2025 / Average Balance | Six months ended June 30, 2025 / Ratio of Net Charge-offs (Recoveries) to Average Loans |
| --- | --- | --- | --- | --- | --- | --- |
| Mortgage loans on real estate: | | | | | | |
| Construction and development | — | $284,873 | — | $1 | $139,907 | (0.00 |
| 1-4 Family | (96) | 923,679 | 0.01 | 65 | 392,819 | (0.02) |
| Multifamily | — | 132,606 | — | — | 98,392 | — |
| Farmland | — | 9,167 | — | 1 | 6,569 | (0.02) |
| Commercial real estate | (123) | 1,044,718 | 0.01 | 3,322 | 942,653 | (0.35) |
| Commercial and industrial | (83) | 664,379 | 0.01 | 67 | 516,103 | (0.01) |
| Consumer | (70) | 13,244 | 0.53 | (34) | 10,129 | 0.34 |
| Total | $(372) | $3,072,666 | 0.01% | $3,422 | $2,106,572 | (0.16 |
Charge-offs reflect the realization of losses in the portfolio that were recognized previously through the provision for credit losses on loans. Net charge-offs include recoveries of amounts previously charged off. For the three months ended June 30, 2026, net charge-offs were $0.1 million, or less than 0.01%, of the average loan balance for the period. For the six months ended June 30, 2026, net charge-offs were $0.4 million, or 0.01%, of the average loan balance for the period. For the three months ended June 30, 2025, net recoveries were $13,000, or less than 0.01%, of the average loan balance for the period. For the six months ended June 30, 2025, net recoveries were $3.4 million, or 0.16%, of the average loan balance for the period. Net recoveries during the six months ended June 30, 2025 were primarily the result of a property insurance settlement related to a loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida.
Management believes the ACL at June 30, 2026 is sufficient to provide adequate protection against losses in our portfolio. However, there can be no assurance that this allowance will prove to be adequate over time to cover ultimate losses in connection with our loans. This ACL may prove to be inadequate due to many factors, including those set forth in Part I. Item 1A. “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Company’s Annual Report. These factors could cause deterioration in credit quality that could lead us to increase our ACL in future periods. Our results of operations and financial condition could be materially adversely affected to the extent that the ACL is insufficient to cover such changes or events.
*Nonperforming Assets*. Nonperforming assets consist of nonperforming loans and other real estate owned. Nonperforming loans are those on which the accrual of interest has stopped or loans which are contractually 90 days past due and accruing. Loans are ordinarily placed on nonaccrual when a loan is specifically determined to be impaired or when principal and interest is delinquent for 90 days or more. Additionally, management may elect to continue the accrual when the estimated net available value of collateral is sufficient to cover the principal balance and accrued interest. It is our policy to discontinue the accrual of interest income on any loan for which we have reasonable doubt as to the payment of interest or principal. A loan may be returned to accrual status when all the principal and interest amounts contractually due are brought current and future principal and interest amounts contractually due are reasonably assured, which is typically evidenced by a sustained period of repayment performance by the borrower. Nonperforming loans were $19.4 million, or 0.63% of total loans, at June 30, 2026, an increase of $10.1 million compared to $9.3 million, or 0.43% of total loans, at December 31, 2025. The increase in nonperforming loans compared to December 31, 2025 was primarily attributable to the downgrade of one primarily owner-occupied commercial real estate relationship totaling $6.6 million, one construction and development relationship totaling $1.6 million and loans acquired from WFB totaling $1.2 million.
*Loan Modifications to Borrowers Experiencing Financial Difficulty.* Occasionally, we modify loans to borrowers in financial distress by providing certain concessions, such as principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension, excluding covenant waivers and modification of contingent acceleration clauses, or a combination of such concessions. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL. Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is written off. During the six months ended June 30, 2026 and 2025*,* we did not provide any modifications under these circumstances to borrowers experiencing financial difficulty.
*Other Real Estate Owned.* Other real estate owned consists of properties acquired through foreclosure or acceptance of a deed in lieu of foreclosure and real property no longer used in the Bank’s business operations. Real estate acquired through foreclosure is initially recorded at fair value at the time of foreclosure, less estimated selling cost, and any related write-down is charged to the ACL. Real property no longer used in the Bank’s business operations is recorded at the lower of its net book value or fair value at the date of transfer to other real estate owned.
For the six months ended June 30, 2026, additions to other real estate owned were $2.4 million, which were driven by transfers of a $1.3 million owner-occupied commercial real estate loan and 1-4 family loans to other real estate owned. Other real estate owned with a cost basis of $0.2 million and $0.9 million was sold during the three and six months ended June 30, 2026, respectively, resulting in a gain of $4,000 and a loss of $0.1 million for the respective periods. Other real estate owned with a cost basis of $0.2 million was sold during the three and six months ended June 30, 2025, resulting in a gain of $29,000 for the periods. During the three and six months ended June 30, 2026, we recorded a $0.1 million write-down of other real estate owned related to a former branch location based on a third-party appraisal. During the three and six months ended June 30, 2025, we recorded $0.3 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 and a former branch location based on a third-party appraisal.
At June 30, 2026, approximately $2.1 million of loans secured by 1-4 family residential property were in the process of foreclosure.
The table below provides details of our other real estate owned as of the dates indicated (dollars in thousands).
| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| 1-4 Family | $860 | $736 |
| Commercial real estate | 3,887 | 2,638 |
| Total other real estate owned | $4,747 | $3,374 |
Changes in our other real estate owned are summarized in the table below for the periods indicated (dollars in thousands).
| Line item | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
| --- | --- | --- |
| Balance, beginning of period | $3,374 | $5,218 |
| Additions | 2,367 | 951 |
| Sales of other real estate owned | (919) | (244) |
| Write-downs | (75) | (296) |
| Balance, end of period | $4,747 | $5,629 |
*Swap Contracts.* The Company enters into interest rate swap contracts that allow commercial loan customers to effectively convert a variable-rate commercial loan agreement to a fixed-rate commercial loan agreement. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to an interest rate swap agreement, which serves to effectively swap the customer’s variable-rate loan into a fixed-rate loan. The Company then enters into a corresponding swap agreement with a third party in order to economically hedge its exposure through the customer agreement. The interest rate swaps with both the customers and third parties are not designated as hedges, and changes in fair value are recognized through earnings. As the interest rate swaps are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings. The Company did not recognize any net impact in other income resulting from fair value adjustments during the three and six months ended June 30, 2026 and 2025. At June 30, 2026 and December 31, 2025, we had notional amounts of $158.3 million and $180.8 million, respectively, in interest rate swap contracts with customers and $158.3 million and $180.8 million, respectively, in offsetting interest rate swap contracts with other financial institutions. At June 30, 2026 and December 31, 2025, the fair value of the swap contracts consisted of gross assets of $11.5 million and $11.7 million, respectively, and gross liabilities of $11.5 million and $11.7 million, respectively, recorded in “Other assets” and “Accrued taxes and other liabilities,” respectively, in the accompanying consolidated balance sheets. For additional information, see Note 9. Derivative Financial Instruments.
*Impact of Inflation*. The inflationary outlook in the U.S. remains uncertain. Inflation has moderated in recent periods; however, it has remained higher than the Federal Reserve’s target inflation rate of two percent. A decrease in the general level of interest rates may lead to, among other things, prepayments on our loan and mortgage-backed securities portfolios as borrowers refinance their loans at lower rates, lower rates on new loans, lower rates on existing variable rate loans and lower yields on investment securities, which may be offset by lower costs of interest-bearing liabilities. If interest-earning assets mature or reprice more quickly, or to a greater degree than interest-bearing liabilities, falling interest rates could reduce net interest income. Significant fluctuations in interest rates makes our business and balance sheet more challenging to manage. For additional information, see *Interest Rate Risk* below, and Item 1A. “Risk Factors – Risks Related to our Business – Changes in interest rates could have an adverse effect on our profitability” and “– Inflation and rising prices may continue to adversely affect our results of operations and financial condition” in our Annual Report.
***Interest Rate Risk***
Market risk is the risk of loss from adverse changes in market prices and rates. Since the majority of our assets and liabilities are monetary in nature, our market risk arises primarily from interest rate risk inherent in our lending and deposit activities. A sudden and substantial change in interest rates may adversely impact our earnings and profitability because the interest rates borne by assets and liabilities do not change at the same speed, to the same extent, or on the same basis. Accordingly, our ability to proactively structure the volume and mix of our assets and liabilities to address anticipated changes in interest rates, as well as to react quickly to such fluctuations, can significantly impact our financial results. To that end, management actively monitors and manages our interest rate risk exposure.
The ALCO has been authorized by the Board to implement our asset/liability management policy, which establishes guidelines with respect to our exposure to interest rate fluctuations, liquidity, loan limits as a percentage of funding sources, exposure to correspondent banks and brokers and reliance on non-core deposits. The goal of the policy is to enable us to maximize our interest income and maintain our net interest margin without exposing the Bank to excessive interest rate risk, credit risk and liquidity risk. Within that framework, the ALCO monitors our interest rate sensitivity and makes decisions relating to our asset/liability composition.
Net interest income simulation is the Bank’s primary tool for benchmarking near term earnings exposure. Given the ALCO’s objective to understand the potential risk and volatility embedded within the current mix of assets and liabilities, standard rate scenario simulations assume total assets remain static (i.e., no growth). The Bank may also use a standard gap report in its interest rate risk management process. The primary use for the gap report is to provide supporting detailed information to the ALCO’s discussion.
The Bank has particular concerns with the utility of the gap report as a risk management tool because of difficulties in relating gap directly to changes in net interest income. Hence, the income simulation is the key indicator for earnings-at-risk since it expressly measures what the gap report attempts to estimate.
Short term interest rate risk management tactics are decided by the ALCO where risk exposures exist out into the one to two-year horizon. Tactics are formulated and presented to the ALCO for discussion, modification, and/or approval. Such tactics may include asset and liability acquisitions of appropriate maturities in the cash market, loan and deposit product/pricing strategy modification, and derivatives hedging activities to the extent such activity is authorized by the Board.
Since the impact of rate changes due to mismatched balance sheet positions in the short-term can quickly and materially affect the current year’s income statement, they require constant monitoring and management.
Within the gap position that management directs, we attempt to structure our assets and liabilities to minimize the risk of either a rising or falling interest rate environment. We manage our gap position for time horizons of one month, two months, three months, four to six months, seven to twelve months, 13-24 months, 25-36 months, 37-60 months and more than 60 months. The goal of our asset/liability management is for the Bank to maintain a net interest income at risk in an up or down 100 basis point environment at less than (5)%. At June 30, 2026, the Bank was within the policy guidelines for asset/liability management.
The table below depicts the estimated impact on net interest income of immediate changes in interest rates at the specified levels.
_As of June 30, 2026_
| Changes in Interest Rates (in basis points) | Estimated Increase/Decrease in Net Interest Income(1) |
| --- | --- |
| +300 | (2.7)% |
| +200 | (1.8)% |
| +100 | (0.8)% |
| -100 | 1.5% |
| -200 | 3.0% |
| -300 | 4.5% |
(1)
The percentage change in this column represents the projected net interest income for 12 months on a flat balance sheet in a stable interest rate environment versus the projected net interest income in the various rate scenarios.
The computation of the prospective effects of hypothetical interest rate changes requires numerous assumptions regarding characteristics of new business and the behavior of existing positions. These business assumptions are based upon our experience, business plans and published industry experience. Key assumptions include asset prepayment speeds, competitive factors, the relative price sensitivity of certain assets and liabilities, and the expected life of non-maturity deposits. However, there are a number of factors that influence the effect of interest rate fluctuations on us that are difficult to measure and predict. For example, a rapid drop in interest rates might cause our loans to be repaid at a more rapid pace and certain mortgage-related investments to prepay more quickly than projected. This could mitigate some of the benefits of falling rates as are expected when we are in a negatively-gapped position. Conversely, a rapid rise in rates could give us an opportunity to increase our margins and stifle the rate of repayment on our mortgage-related loans, which would increase our returns; however, we may need to increase the rates we offer to maintain or increase deposits, which would adversely impact our margins. As a result, because these assumptions are inherently uncertain, actual results will differ from simulated results.
**Liquidity and Capital Resources**
*Liquidity.* Liquidity is a measure of the ability to fund loan commitments and meet deposit maturities and withdrawals in a timely and cost-effective way. Our primary sources of funds are from deposits, amortization of loans, loan prepayments and the maturities of loans, payments and maturities of investment securities and other investments and other cash flows provided from operations. Uses of funds include deposits, debt service, lease commitments, unfunded commitments, and dividends. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit outflows, loan prepayments, and borrowings are greatly influenced by general interest rates, economic conditions, and the competitive environment in which we operate. To minimize funding risks, we closely monitor our liquidity position through periodic reviews of maturity profiles, yield and rate behaviors, and loan and deposit forecasts. Excess short-term liquidity is usually invested in overnight federal funds sold.
Our core deposits, which are deposits excluding brokered demand deposits, brokered time deposits, and time deposits greater than $250,000, are our most stable source of liquidity to meet our cash flow needs due to the nature of the long-term relationships generally established with our customers. Maintaining the ability to acquire these funds as needed in a variety of markets, and within ALCO compliance targets, is essential to ensuring our liquidity. At June 30, 2026 and December 31, 2025, 71% and 68%, respectively, of our total assets were funded by core deposits.
Our investment portfolio is another alternative for meeting our cash flow requirements. Investment securities generate cash flow through interest payments, principal payments and maturities, and they generally have readily available markets that allow for their conversion to cash. At June 30, 2026, 90% of our investment securities portfolio was classified as AFS, and we had gross unrealized losses in our AFS investment securities portfolio of $48.6 million and gross unrealized gains of $0.6 million. The sale of securities in a loss position would cause us to record a loss on sale of investment securities in noninterest income in the period during which the securities were sold. Some securities are pledged to secure certain deposit types or short-term borrowings, such as FHLB advances, which impacts their liquidity. At June 30, 2026, securities with a carrying value of $125.2 million were pledged to secure certain deposits, borrowings, and other liabilities, compared to $75.6 million in pledged securities at December 31, 2025.
Other sources available for meeting liquidity needs include advances from the FHLB, repurchase agreements and other borrowings. FHLB advances may be used to meet day to day liquidity needs, particularly if the prevailing interest rate on an FHLB advance compares favorably to the rates that we would be required to pay to attract deposits. At June 30, 2026, the balance of our outstanding advances with the FHLB was $136.0 million, consisting of $36.0 million short-term and $100.0 million long-term advances based on original maturities, an increase of $20.0 million, compared to $116.0 million, consisting of $36.0 million short-term and $80.0 million long-term advances based on original maturities, at December 31, 2025. The total amount of remaining credit available to us from the FHLB at June 30, 2026 was $1.06 billion. At June 30, 2026, our FHLB borrowings were collateralized by a blanket pledge of certain loans totaling approximately $1.35 billion.
Repurchase agreements are contracts for the sale of securities which we own with a corresponding agreement to repurchase those securities at an agreed upon price and date. Our policies limit the use of repurchase agreements to those collateralized by investment securities. We had $18.6 million of repurchase agreements outstanding at June 30, 2026 and $11.2 million at December 31, 2025.
We maintain unsecured lines of credit with correspondent banks totaling $75.0 million. These lines of credit are federal funds lines of credit and are used for overnight borrowing only. The lines of credit mature at various times within the next year. There were no outstanding balances on our unsecured lines of credit at June 30, 2026 and December 31, 2025.
At June 30, 2026, we held $72.3 million of cash and cash equivalents and maintained approximately $1.06 billion of available funding from FHLB advances and maintained $75.0 million in unsecured lines of credit with correspondent banks. Cash and cash equivalents and available funding represent 110% of uninsured deposits of $1.10 billion at June 30, 2026.
We maintain an effective shelf registration statement with the SEC, which can be utilized to meet liquidity needs. The shelf registration statement allows us to raise capital of up to $150 million from time to time through the sale of debt securities, common stock, preferred stock, depositary shares, warrants, subscription rights and units, or a combination thereof, subject to market conditions.
In addition, at June 30, 2026 and December 31, 2025, we had $17.0 million in aggregate principal amount of subordinated debt outstanding, consisting entirely of our 2032 Notes. For additional information on our 2032 Notes, see our Annual Report, Part II. Item 7. “MD&A – Discussion and Analysis of Financial Condition – Borrowings” and Note 10 to the financial statements included in such report.
Our liquidity strategy is focused on using the least costly funds available to us in the context of our balance sheet composition and interest rate risk position. Accordingly, we target growth of noninterest-bearing deposits. Although we cannot directly control the types of deposit instruments our customers choose, we can influence those choices with the interest rates and deposit specials we offer. In recent periods, the proportion of our deposits represented by noninterest-bearing deposits has declined primarily due to rising market interest rates as customers have migrated to higher yielding alternatives.
At June 30, 2026, we held $62.9 million of brokered time deposits and no brokered demand deposits as defined for federal regulatory purposes. At December 31, 2025, we held $204.1 million of brokered time deposits and de minimis brokered demand deposits as defined for federal regulatory purposes. We utilize brokered time deposits to secure fixed cost funding and reduce short-term borrowings. We utilize brokered demand deposits when pricing is more favorable than other short-term borrowings. We hold QwickRate® deposits, included in our time deposit balances, which we obtain through a qualified network, to address liquidity needs when rates on such deposits compare favorably with deposit rates in our markets. We held $11.0 million and $11.3 million of QwickRate® deposits at June 30, 2026 and December 31, 2025, respectively.
The following table presents, by type, our funding sources, which consist of total average deposits and borrowed funds, as a percentage of total funds and the total cost of each funding source for the three and six months ended June 30, 2026 and 2025.
| Line item | Percentage of Total Average Deposits and Borrowed Funds / Three months ended June 30, 2026 | Percentage of Total Average Deposits and Borrowed Funds / Three months ended June 30, 2025 | Percentage of Total Average Deposits and Borrowed Funds / Six months ended June 30, 2026 | Percentage of Total Average Deposits and Borrowed Funds / Six months ended June 30, 2025 | Cost of Funds / Three months ended June 30, 2026 | Cost of Funds / Three months ended June 30, 2025 | Cost of Funds / Six months ended June 30, 2026 | Cost of Funds / Six months ended June 30, 2025 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Noninterest-bearing demand deposits | 18% | 18% | 18% | 18% | — | — | — | — |
| Interest-bearing demand deposits | 39 | 32 | 38 | 32 | 2.34 | 2.22 | 2.38 | 2.18 |
| Brokered demand deposits | — | — | — | — | 3.82 | 4.50 | 3.82 | 4.47 |
| Savings accounts | 5 | 6 | 5 | 6 | 0.91 | 1.04 | 0.90 | 1.05 |
| Brokered time deposits | 2 | 10 | 3 | 10 | 3.86 | 4.71 | 3.96 | 4.79 |
| Time deposits | 30 | 29 | 30 | 29 | 3.43 | 3.79 | 3.48 | 3.88 |
| Short-term borrowings | 2 | 1 | 2 | 2 | 2.81 | 3.13 | 2.89 | 3.39 |
| Long-term borrowed funds | 4 | 4 | 4 | 3 | 4.57 | 4.71 | 4.66 | 4.74 |
| Total deposits and borrowed funds | 100% | 100% | 100% | 100% | 2.31% | 2.56% | 2.35% | 2.61% |
*Capital Resources.* Our primary sources of capital include retained earnings, capital obtained through acquisitions and proceeds from the sale of our capital stock and subordinated debt. We may issue capital stock and debt securities from time to time to fund acquisitions and support our organic growth. As noted elsewhere in this report, on July 1, 2025 we completed a private placement of Series A Preferred Stock. We used the net proceeds from the offering to support the acquisition of WFB and for general corporate purposes, including organic growth and other potential acquisitions.
During the three and six months ended June 30, 2026, we paid $1.5 million and $2.6 million, respectively, in dividends on our common stock compared to $1.0 million and $2.1 million, for the three and six months ended June 30, 2025, respectively. We declared dividends on our common stock of $0.12 and $0.23 per common share during the three and six months ended June 30, 2026, respectively, compared to dividends of $0.11 and $0.215 per common share during the three and six months ended June 30, 2025, respectively.
During the three and six months ended June 30, 2026, we paid $0.5 million and $1.1 million, respectively, in dividends on our Series A Preferred Stock compared to none during the three and six months ended June 30, 2025. We declared dividends on our Series A Preferred Stock of $16.25 and $32.50 per share during the three and six months ended June 30, 2026, respectively, compared to none during the three and six months ended June 30, 2025.
Our Board has authorized a share repurchase program, and at June 30, 2026, we had 300,741 shares of our common stock remaining authorized for repurchase under the program. During the three months ended June 30, 2026, we paid $0.8 million to repurchase 27,235 shares of common stock compared to $0.6 million to repurchase 36,065 shares of common stock during the three months ended June 30, 2025. During the six months ended June 30, 2026, we paid $2.3 million to repurchase 80,655 shares of common stock compared to $1.3 million to repurchase 71,057 shares of common stock during the six months ended June 30, 2025. The aggregate purchase price does not include the effect of excise tax incurred on net share repurchases.
We are subject to various regulatory capital requirements administered by the Federal Reserve and the OCC which specify capital tiers, including the following classifications for the Bank under the OCC’s prompt corrective action regulations.
| Capital Tiers(1) | Tier 1 Leverage Ratio | Common Equity Tier 1 Capital Ratio | Tier 1 Capital Ratio | Total Capital Ratio | Ratio of Tangible to Total Assets |
| --- | --- | --- | --- | --- | --- |
| Well capitalized | 5% or above | 6.5% or above | 8% or above | 10% or above | |
| Adequately capitalized | 4% or above | 4.5% or above | 6% or above | 8% or above | |
| Undercapitalized | Less than 4% | Less than 4.5% | Less than 6% | Less than 8% | |
| Significantly undercapitalized | Less than 3% | Less than 3% | Less than 4% | Less than 6% | |
| Critically undercapitalized | | | | | 2% or less |
(1)
In order to be well capitalized or adequately capitalized, a bank must satisfy each of the required ratios in the table. In order to be undercapitalized or significantly undercapitalized, a bank would need to fall below just one of the relevant ratio thresholds in the table. In order to be well capitalized, the Bank cannot be subject to any written agreement or order requiring it to maintain a specific level of capital for any capital measure. Pursuant to regulatory capital rules, the Company has made an election not to include unrealized gains and losses in the investment securities portfolio for purposes of calculating “Tier 1” capital and “Tier 2” capital.
The Company and the Bank each were in compliance with all regulatory capital requirements at June 30, 2026 and December 31, 2025. The Bank also was considered “well-capitalized” under the OCC’s prompt corrective action regulations as of these dates.
The following table presents the actual capital amounts and regulatory capital ratios for the Company and the Bank as of the dates presented (dollars in thousands).
| June 30, 2026 | Actual / Amount | Actual / Ratio | Minimum Capital Requirement for Bank to be Well Capitalized Under Prompt Corrective Action Rules / Amount | Minimum Capital Requirement for Bank to be Well Capitalized Under Prompt Corrective Action Rules / Ratio |
| --- | --- | --- | --- | --- |
| Investar Holding Corporation: | | | | |
| Tier 1 leverage capital | $408,120 | 10.56% | — | — |
| Common equity tier 1 capital | 359,267 | 11.68 | — | — |
| Tier 1 capital | 408,120 | 13.27 | — | — |
| Total capital | 460,840 | 14.99 | — | — |
| Investar Bank: | | | | |
| Tier 1 leverage capital | 414,439 | 10.75 | 192,840 | 5.00 |
| Common equity tier 1 capital | 414,439 | 13.51 | 199,380 | 6.50 |
| Tier 1 capital | 414,439 | 13.51 | 245,391 | 8.00 |
| Total capital | 450,400 | 14.68 | 306,738 | 10.00 |
| December 31, 2025 | | | | |
| Investar Holding Corporation: | | | | |
| Tier 1 leverage capital | $305,810 | 10.73% | — | — |
| Common equity tier 1 capital | 265,957 | 11.18 | — | — |
| Tier 1 capital | 305,810 | 12.85 | — | — |
| Total capital | 348,943 | 14.66 | — | — |
| Investar Bank: | | | | |
| Tier 1 leverage capital | 308,528 | 10.85 | 142,230 | 5.00 |
| Common equity tier 1 capital | 308,528 | 13.00 | 154,291 | 6.50 |
| Tier 1 capital | 308,528 | 13.00 | 189,897 | 8.00 |
| Total capital | 334,923 | 14.11 | 237,371 | 10.00 |
**Off-Balance Sheet Transactions**
*Unfunded Commitments*. The Bank enters into loan commitments and standby letters of credit in the normal course of its business. Loan commitments are made to meet the financing needs of our customers, while standby letters of credit commit the Bank to make payments on behalf of customers when certain specified future events occur. The credit risks associated with loan commitments and standby letters of credit are essentially the same as those involved in making loans to our customers. Accordingly, our normal credit policies apply to these arrangements. Collateral (e.g., securities, receivables, inventory, equipment, etc.) is obtained based on management’s credit assessment of the customer. The credit risk associated with these commitments is evaluated in a manner similar to the ACL. The ACL on unfunded loan commitments is included in “Accrued taxes and other liabilities” in the accompanying consolidated balance sheets and was $0.2 million and $0.4 million at June 30, 2026 and December 31, 2025, respectively.
Loan commitments and standby letters of credit do not necessarily represent future cash requirements, in that while the customer typically has the ability to draw upon these commitments at any time, these commitments often expire without being drawn upon in full or at all. Substantially all of our standby letters of credit expire within one year. Our unfunded loan commitments and standby letters of credit outstanding are summarized below as of the dates indicated (dollars in thousands):
| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| Loan commitments | $468,484 | $431,795 |
| Standby letters of credit | 6,955 | 5,436 |
The Company closely monitors the amount of remaining future commitments to borrowers in light of prevailing economic conditions and adjusts these commitments as necessary. The Company intends to continue this process as new commitments are entered into or existing commitments are renewed.
Additionally, at June 30, 2026, the Company had unfunded commitments of $1.4 million for its investment in SBIC qualified funds and other investment funds.
For the six months ended June 30, 2026 and for the year ended December 31, 2025, except as disclosed herein and in the Company’s Annual Report, we engaged in no off-balance sheet transactions that we believe are reasonably likely to have a material effect on our financial condition, results of operations, or cash flows.
**Lease Obligations**
The Company’s primary leasing activities relate to certain real estate leases entered into in support of the Company’s branch operations. The Company’s branch locations operated under lease agreements have all been designated as operating leases. The Company does not lease equipment under operating leases, nor does it have leases designated as finance leases.
The following table presents, as of June 30, 2026, contractually obligated lease payments due under non-cancelable operating leases by payment date (dollars in thousands).
| Less than one year | 659 |
| --- | --- |
| One to three years | 1,295 |
| Three to five years | 893 |
| Over five years | 25 |
| Total | $2,872 |
**Critical Accounting Estimates**
The preparation of our consolidated financial statements in accordance with GAAP requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, income and expenses and related disclosure of contingent assets and liabilities. Although independent third parties are often engaged to assist us in the estimation process, management evaluates the results, challenges and assumptions used and considers other factors which could impact these estimates. Actual results may differ from these estimates under different assumptions or conditions.
There were no material changes or developments during the reporting period with respect to methodologies that the Company uses when applying what management believes are significant accounting policies and developing critical accounting estimates, which are those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. We believe that the judgments, estimates and assumptions that we use in the preparation of our consolidated financial statements are appropriate. For more detailed information about our accounting policies, please refer to Note 1. Summary of Significant Accounting Policies of our Annual Report.
**[](# "Item3_QQ")Item 3. Quantitative and Qualitative Disclosures about Market Risk**
Quantitative and qualitative disclosures about market risk as of December 31, 2025 are set forth in the Company’s Annual Report in the section captioned “MD&A – Risk Management.” Please refer to the information in Item 2. “MD&A – Risk Management” in this report for additional information about the Company’s market risk for the six months ended June 30, 2026; except as discussed therein, there have been no material changes in the Company’s market risk since December 31, 2025.
**[](# "Item4_Controls")Item 4. Controls and Procedures**
**Evaluation of Disclosure Controls and Procedures**
Based on their evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, the Company’s Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are effective for ensuring that information the Company is required to disclose in the reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
**Changes in Internal Control over Financial Reporting**
There were no changes in the Company’s internal control over financial reporting during the fiscal quarter covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
**[](# "Part_2")PART II. OTHER INFORMATION**
**[](# "Item1A_Risk")Item** **1A. Risk Factors**
For information regarding risk factors that could affect the Company’s results of operations, financial condition and liquidity, see the risk factors disclosed in the Annual Report. There have been no significant changes in our risk factors as described in such Annual Report.
**[](# "Item2_Unregistered")Item** **2. Unregistered Sales of Equity Securities and Use of Proceeds**
**Unregistered Sales of Equity Securities**
None.
**Issuer Purchases of Equity Securities**
The table below provides information with respect to purchases made by the Company of shares of its common stock during each of the months during the three month period ended June 30, 2026.
| (b) Average Price Paid per Share (or Unit)(2) | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Still Be Purchased Under the Plans or Programs(3) |
| --- | --- |
| $27.54 | $316,841 |
| 27.73 | 305,741 |
| 27.93 | 300,741 |
| $27.59 | $300,741 |
| (1) | Includes 30,255 shares of common stock surrendered to cover the payroll taxes due upon the vesting of RSUs. |
| --- | --- |
| (2) | The average price paid per share does not include the effect of excise tax expense incurred on net stock repurchases. |
| (3) | The Company has had a share repurchase program, which has no expiration date, since 2015. On July 19, 2023 and September 21, 2022, the Board approved an additional 350,000 shares and 300,000 shares, respectively, of the Company’s common stock for repurchase under the share repurchase program. As of June 30, 2026, the Company had 300,741 shares remaining available under the program. |
Because we are a holding company with no material business activities, our ability to pay dividends is substantially dependent upon the ability of the Bank to transfer funds to us in the form of dividends, loans and advances. The Bank’s ability to pay dividends and make other distributions and payments to us depends upon the Bank’s earnings, financial condition, general economic conditions, compliance with regulatory requirements and other factors. In addition, the Bank’s ability to pay dividends to us is itself subject to various legal, regulatory and other restrictions under federal banking laws that are described in Part I. Item 1. “Business” of our Annual Report.
In addition, as a Louisiana corporation, we are subject to certain restrictions on dividends under the Louisiana Business Corporation Act. Generally, a Louisiana corporation may pay dividends to its shareholders unless, after giving effect to the dividend, either (1) the corporation would not be able to pay its debts as they come due in the usual course of business or (2) the corporation’s total assets are less than the sum of its total liabilities and the amount that would be needed, if the corporation were to be dissolved at the time of the payment of the dividend, to satisfy the preferential rights of shareholders whose preferential rights are superior to those receiving the dividend. In addition, our existing and future debt agreements limit, or may limit, our ability to pay dividends. Under the terms of our 2032 Notes, we are prohibited from paying dividends upon and during the continuance of any Event of Default under such notes. Under the terms of our Series A Preferred Stock, subject to certain exceptions, we are prohibited from paying dividends on, or repurchasing or redeeming our 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. Finally, our ability to pay dividends may be limited on account of the junior subordinated debentures that we assumed through acquisitions. We must make payments on the junior subordinated debentures before any dividends can be paid on our common stock.
**[](#)Item** ***5*. Other Information**
Pursuant to Item *408*(a) of Regulation S-K, none of our directors or executive officers adopted, terminated, or modified a Rule *10b5*-*1* trading arrangement or a non-Rule *10b5*-*1* trading arrangement during the quarter ended *June 30, 2026*.
**[](# "Item6_Exhibits")Item** **6. Exhibits**
| Exhibit No. | Description of Exhibit |
| --- | --- |
| 2.1* | Agreement and Plan of Merger, dated July 1, 2025, by and among Investar Holding Corporation and Wichita Falls Bancshares, Inc.(1) |
| 3.1 | Composite Articles of Incorporation of Investar Holding Corporation(2) |
| 3.2 | Amended and Restated By-laws of Investar Holding Corporation(3) |
| 4.1 | Specimen Common Stock Certificate(4) |
| 4.2 | Specimen certificate representing Series A Non-Cumulative Perpetual Convertible Preferred Stock(5) |
| 4.3 | Indenture, dated April 6, 2022, by and among Investar Holding Corporation and UMB Bank, National Association, as trustee(6) |
| 4.4 | Form of 5.125% Fixed-to-Floating Rate Subordinated Note due 2032(7) |
| 10.1** | Employment Agreement, dated as of July 17, 2026, by and between Investar Bank, National Association and Linda M. Crochet |
| 10.2** | Employment Agreement, dated as of July 17, 2026, by and between Investar Bank, National Association and Jeffrey W. Martin |
| 10.3** | Salary Continuation Agreement, dated as of July 17, 2026, by and between Investar Bank, National Association and Linda M. Crochet |
| 10.4** | Salary Continuation Agreement, dated as of July 17, 2026, by and between Investar Bank, National Association and Jeffrey W. Martin |
| 10.5** | Second Amended and Restated Investar Holding Corporation 2017 Long-Term Incentive Compensation Plan(8) |
| 31.1 | Certification of the Principal Executive Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 31.2 | Certification of the Principal Financial Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| 32.1 | Certification of the Principal Executive Officer, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 32.2 | Certification of the Principal Financial Officer, as required pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| 101.INS | Inline XBRL Instance Document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) |
| (1) | Filed as exhibit 2.1 to the Current Report on Form 8-K of the Company filed with the SEC on July 1, 2025 and incorporated herein by reference. |
| --- | --- |
| (2) | Filed as exhibit 3.1 to the Quarterly Report on Form 10-Q of the Company filed with the SEC on August 6, 2025 and incorporated herein by reference. |
| (3) | Filed as exhibit 3.2 to the Registration Statement on Form S-4 of the Company filed with the SEC on October 10, 2017 and incorporated herein by reference. |
| (4) | Filed as exhibit 4.1 to the Registration Statement on Form S-1 of the Company filed with the SEC on May 16, 2014 and incorporated herein by reference. |
| (5) | Filed as exhibit 4.1 to the Current Report on Form 8-K of the Company filed with the SEC on July 1, 2025 and incorporated herein by reference. |
| (6) | Filed as exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on April 7, 2022 and incorporated herein by reference. |
| (7) | Filed as exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on April 7, 2022 and incorporated herein by reference. |
| (8) | Filed as exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on May 22, 2026 and incorporated herein by reference. |
* The registrant has omitted schedules and similar attachments to the subject agreement pursuant to Item 601(b)(2) of Regulation S-K. The registrant will furnish a copy of any omitted schedule or similar attachment to the SEC upon request.
** Management contract or compensatory plan or arrangement.
The Company does not have any long-term debt instruments under which securities are authorized exceeding 10% of the total assets of the Company and its subsidiaries on a consolidated basis. The Company will furnish to the SEC, upon its request, a copy of all long-term debt instruments.
**[](# "Signatures")SIGNATURES**
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
**INVESTAR HOLDING CORPORATION**
Date: August 6, 2026
/s/ John J. D’Angelo
John J. D’Angelo
President and Chief Executive Officer
(Principal Executive Officer)
Date: August 6, 2026
/s/ John R. Campbell
John R. Campbell
Chief Financial Officer
(Principal Financial Officer)
67
---
## EXHIBIT 31.1
SEC source: [ex_964824.htm](https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/ex_964824.htm)
**Exhibit 31.1**
**CERTIFICATIONS**
I, John J. D’Angelo, certify that:
1. I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2026 of Investar Holding Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
- Date: August 6, 2026 /s/ John J. D’Angelo
- John J. D’Angelo
- President and Chief Executive Officer
- (Principal Executive Officer)
---
## EXHIBIT 31.2
SEC source: [ex_964825.htm](https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/ex_964825.htm)
**Exhibit 31.2**
**CERTIFICATIONS**
I, John R. Campbell, certify that:
1. I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2026 of Investar Holding Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
- Date: August 6, 2026 /s/ John R. Campbell
- John R. Campbell
- Chief Financial Officer
- (Principal Financial Officer)
---
## EXHIBIT 32.1
SEC source: [ex_964826.htm](https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/ex_964826.htm)
**Exhibit 32.1**
**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350**
**AS ADOPTED PURSUANT TO**
**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**
In connection with the quarterly report on Form 10-Q of Investar Holding Corporation (the “Company”) for the period ended June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John J. D’Angelo, President and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.
- Date: August 6, 2026 /s/ John J. D’Angelo
- John J. D’Angelo
- President and Chief Executive Officer
- (Principal Executive Officer)
---
## EXHIBIT 32.2
SEC source: [ex_964827.htm](https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/ex_964827.htm)
**Exhibit 32.2**
**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350**
**AS ADOPTED PURSUANT TO**
**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**
In connection with the quarterly report on Form 10-Q of Investar Holding Corporation (the “Company”) for the period ended June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John R. Campbell, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.
- Date: August 6, 2026 /s/ John R. Campbell
- John R. Campbell
- Chief Financial Officer
- (Principal Financial Officer)
---
## EXHIBIT 10.1
SEC source: [ex_989496.htm](https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/ex_989496.htm)
**Exhibit 10.1**
**EMPLOYMENT AGREEMENT**
**THIS EMPLOYMENT AGREEMENT** (this “***Agreement***”) is made and entered into as of July 17, 2026 (the “***Effective Date***”), by and among **INVESTAR BANK, NATIONAL ASSOCIATION**, a Louisiana bank (the “***Employer***”) and Linda M. Crochet, a resident of Louisiana (“***Executive***”). The Employer and Executive are sometimes hereinafter referred to, collectively, as the “***Parties***” and, individually, as a “***Party***.”
**WHEREAS**, Executive is currently engaged as Executive Vice President and Chief Operations Officer of the Employer; and
**WHEREAS**, the Employer wishes to continue to employ Executive to serve as Executive Vice President and Chief Operations Officer of the Employer and Executive wishes to continue to be so employed by the Employer, all upon the terms and conditions hereinafter set forth;
**NOW, THEREFORE**, for and in consideration of the Agreement’s mutual covenants, and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Definitions. The following terms used in this Agreement shall have the following meanings:
(a) “***Cause***” shall mean a termination of Executive’s employment as a result of:
(i) any act by Executive of fraud against, material misappropriation from, or material dishonesty to the Employer during the Term;
(ii) conduct by Executive that amounts to willful misconduct, gross and willful insubordination, or gross neglect in the performance of Executive’s duties and responsibilities hereunder;
(iii) Executive’s indictment for (or its procedural equivalent), or entering of a guilty plea or plea of no contest with respect to, a crime involving breach of trust or moral turpitude or any felony;
(iv) Employer’s receipt of any form of notice, written or otherwise, that any regulatory agency having jurisdiction over the Employer intends to institute any form of formal or informal regulatory action against Executive;
(v) Executive’s removal and/or permanent prohibition from participating in the conduct of the Employer’s affairs by an order issued under 12 U.S.C. Section 1818(e) or (g);
(vi) the exhibition of a standard of behavior within the scope of or related to Executive’s employment that is materially disruptive to the orderly conduct of the Employer’s business operations (including, without limitation, substance abuse or sexual harassment or sexual misconduct that violates federal or state law);
(vii) Executive’s breach of any fiduciary duty owed to the Employer; or
(viii) a material breach of the terms of this Agreement by Executive not cured by Executive within twenty (20) business days after her receipt of the Employer’s written notice thereof, including, without limitation, a material failure by Executive to perform Executive’s duties and responsibilities in the manner and to the extent required under this Agreement, and, in the event Executive does not cure said condition, the Employer terminates her employment within thirty (30) days after the period for curing said condition has expired;
1
each of the foregoing to be determined by the Chief Executive Officer of the Employer (“***CEO***”), as applicable, in the reasonable exercise of his or her discretion and acting in good faith.
(b) “***Change in Control***” shall mean the occurrence of any of the following events, provided the Change in Control also constitutes a change in the ownership of the Company, or in a substantial portion of the assets of the Company, as applicable, within the meaning of Section 409A of the Code.
(i) During any twelve (12)-month period, the individuals who are members of the Board of Directors of the Company (the “***Company Board***”) immediately before the beginning of such twelve (12)-month period (the “***Incumbent Board***”*)* cease for any reason to constitute at least 50% of the Company Board during that twelve (12)-month period; provided, however, that if the election, or nomination for election by the Company’s shareholders, of any new director was approved in advance by a vote of at least 50% of the Incumbent Board, such new director shall, for purposes of this Agreement, be considered as a member of the Incumbent Board;
(ii) Upon the consummation of any acquisition, merger, consolidation, reorganization or other similar transaction immediately after which the shareholders of the Company immediately before such transaction own less than 50% of the total fair market value or total voting power of the Company or the Person resulting from such transaction if not the Company; provided, however, that the event described in this Subsection (ii) shall not be deemed to be a Change in Control by virtue of any of the following acquisitions: (A) by the Company, (B) by any employee benefit plan (or related trust) sponsored or maintained by the Company or the Employer, or (C) by an underwriter temporarily holding securities pursuant to an offering of such securities;
(iii) When any Person or more than one Person acting as a group acquires, or has acquired, during any twelve (12)-month period more than 50% of the total gross fair market value of the assets of the Company immediately prior to such acquisition or acquisitions, including, without limitation, stock or assets of the Employer.
(c) “***Code***” shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
(d) “***Company***” shall mean Investar Holding Corporation, a Louisiana corporation.
(e) “***Competitive Business***” shall mean an enterprise that is in the business of offering banking products and/or services, which services and/or products are similar or substantially identical to those offered by the Employer during Executive’s employment with the Employer.
(f) “***Disability***” shall mean a condition for which benefits are payable to Executive under any long-term disability insurance coverage then provided to Executive by the Employer; or, if no such coverage is then being provided, the inability of Executive to perform the essential functions of Executive’s duties under this Agreement with or without reasonable accommodation for a period of at least ninety (90) days in the aggregate in any rolling one hundred and eighty (180)-day period, as determined by an independent physician selected by the Employer.
(g) “***Good Reason***” shall mean if, during the term of Executive’s employment under this Agreement, and without Executive’s consent, the following occurs:
2
(i) any breach of the material terms of this Agreement by the Employer;
(ii) any material and adverse change in the reporting relationship(s), authority, duties or responsibilities of Executive;
(iii) any assignment of duties that are materially and adversely inconsistent with Executive’s position or that are materially and adversely inconsistent with Executive’s authority, duties or responsibilities described in this Agreement;
(iv) the relocation of Executive without Executive’s consent to any principal place of employment that is a material change from the main office of the Employer as the Employer may from time to time designate; provided, however, this Subsection (iv) shall not apply in the case of business travel which requires Executive to relocate temporarily for periods of ninety (90) days or less; or
(v) any material and adverse change in Executive’s Base Salary or annual bonus opportunity.
Notwithstanding the foregoing, no event shall constitute Good Reason unless Executive notifies the CEO in writing regarding the existence of the condition(s) constituting Good Reason no later than thirty (30) days after Executive knows of the condition(s), the Employer does not cure said condition within thirty (30) days after receipt of Executive’s written notice and, in the event the Employer does not cure said condition, Executive terminates her employment within thirty (30) days after the period for curing said condition has expired without the Employer having cured same.
(h) “***Person***” shall mean any individual, corporation, bank, credit union, general or limited partnership, limited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature.
(i) “***Territory***” shall mean, to the extent the Employer carries on business therein, (i) Ascension, Calcasieu, East Baton Rouge, East Feliciana, Evangeline, Jefferson, Lafayette, Livingston, St. Tammany, Tangipahoa, West Baton Rouge and West Feliciana Parishes, Louisiana, (ii) Galveston and Harris Counties, Texas, (iii) Sumter and Tuscaloosa Counties, Alabama, and (iv) in the event that the Employer expands the geographic reach of its business to other parishes or counties during Executive’s employment, the definition of Territory shall expand to include such additional parishes or counties where its offices are located. In such case, Executive agrees to execute and deliver an amendment hereto adding any such additional parishes or counties, upon payment to Executive by the Employer of the sum of One Hundred Dollars ($100) per amendment.
2. Employment. The Employer hereby employs Executive, and Executive hereby accepts such employment, as Executive Vice President and Chief Operations Officer of the Employer, with such duties and responsibilities as are customarily performed by persons acting in such capacities and as may be delegated from time to time to Executive by the CEO, as applicable, upon and pursuant to the terms and conditions set forth in this Agreement.
3. Term and Duties.
(a) Term. The period of Executive’s employment with the Employer under this Agreement shall commence as of the date hereof and shall continue for a period of three (3) years unless earlier terminated pursuant to this Agreement (the “***Initial Term***”). If the Agreement is in effect at the end of the Initial Term, the Term, as defined herein, shall be renewed automatically for successive twelve (12)-month periods (each a “***Renewal Term***”) unless and until one Party gives written notice to the other of its or her intent not to extend this Agreement with such written notice to be given not less than ninety (90) days prior to the end of the Initial Term or any subsequent Renewal Term, as applicable. In the event such notice of non-renewal is properly given, this Agreement shall terminate at the end of the remaining Initial Term or Renewal Term then in effect, subject to earlier termination in connection with the termination of Executive’s employment pursuant to this Agreement. In the event that any Party provides timely notice of non-renewal of the Agreement, Executive shall terminate her employment with the Employer on expiration of the Term (the Initial Term and any subsequent Renewal Terms hereinafter referred to as the “***Term***”).
3
(b) Performance of Duties. During the Term, except for periods of illness, disability, reasonable vacation periods, and authorized leaves of absence, all subject to policies generally applicable to senior executives of the Employer, Executive shall devote substantially all of her business time, attention, skill, and efforts to the faithful performance of her duties under this Agreement. Executive shall be eligible to participate as a member in community, civic, religious, or similar organizations, and may pursue personal investments, which in either event do not present any material conflict of interest with the Employer (with prior written approval by the CEO during the Term), or unfavorably affect in any material respect the performance of Executive’s duties under this Agreement.
(c) No Other Agreement. Executive shall have no employment contract or other written or oral agreement concerning employment with any organization, entity or person other than the Employer during the Term.
4. Compensation.
(a) Base Salary. The Employer shall pay Executive a minimum base salary per year that is no less than the amount paid to Executive as of the Effective Date of this Agreement (as in effect as of the Effective Date or as subsequently increased thereafter, the “***Base Salary***”). Following the first anniversary of the Initial Term and thereafter (including during any Renewal Term), Executive’s Base Salary may be increased (but not decreased) at the discretion of the Company Board; such initial Base Salary, or any increased Base Salary, shall be payable in substantially equal installments in accordance with the Employer’s normal pay practices, but not less frequently than monthly.
(b) Incentive Compensation. Subject to applicable law, including any required regulatory approval, Executive shall be eligible to participate in an annual incentive compensation program. For each calendar year during the Term (prorated for any partial calendar year), Executive shall be eligible to receive annual incentive compensation in an amount of up to thirty-six percent (36%) of her Base Salary earned for that calendar year (“***Incentive Compensation***”). The performance measures for any given year shall be set by the Company Board after consultation with Executive no later than November 30th of the year preceding the year to which the Incentive Compensation opportunity relates. Entitlement to and payment of such Incentive Compensation and any related holdbacks are subject to the discretion and approval of the Company Board. Any Incentive Compensation earned shall be payable no later than sixty (60) days following the calendar quarter in which the Incentive Compensation is earned, in accordance with the Employer’s normal practices for the payment of Incentive Compensation. To be entitled to any payment of Incentive Compensation, Executive must be employed by the Employer on the last day of the applicable calendar year in which the Incentive Compensation is earned.
(c) Stock Option and Equity Awards. Executive will be eligible to participate in any stock option plan, restricted stock and long-term equity incentive plans offered by the Employer to employees on the same basis as such other similarly situated employees of the Employer and terms consistent with Executive’s position with the Employer.
4
(d) Reimbursement of Expenses; Automobile Use. Employer shall pay or reimburse Executive for all reasonable travel and entertainment expenses incurred by Executive in the performance of her duties and responsibilities under this Agreement, in accordance with the terms provided in the Employer’s applicable policies and procedures, and as the Employer has adopted or may adopt in the future;
Executive agrees, as a condition of any such reimbursement, to submit verification of the nature and amount of such expenses in accordance with such reimbursement policies and in sufficient detail to comply with rules and regulation promulgated by the United States Department of Treasury.
(e) Clawback of Compensation. Executive agrees to repay the gross amount of any compensation previously paid to Executive under this Agreement that is subject to recovery under any applicable law (including any rule of any exchange or service through which the securities of the Company are then traded) or compensation recoupment policy the Employer may adopt from time to time, including, but not limited to, the following circumstances:
(i) where such compensation was in excess of what should have been paid because the determination of the amount due was based, in whole or in part, on materially inaccurate financial information of the Employer;
(ii) where such compensation constitutes “excessive compensation” within the meaning of 12 C.F.R. Part 30, Appendix A;
(iii) where Executive has committed, is substantially responsible for, or has violated, the respective acts, omissions, conditions, or offenses outlined under 12 C.F.R. Section 359.4(a)(4); or
(iv) if the Employer becomes, and for so long as the Employer remains, subject to the provisions of 12 U.S.C. Section 1831o(f), where such compensation exceeds the restrictions imposed on the senior executive officers of such an institution.
Executive agrees to return within sixty (60) days, or within any earlier timeframe required by applicable law or any recoupment policy, any such compensation properly identified by the Employer by written notice. If Executive fails to return such compensation within the applicable time period, Executive agrees that the amount of such compensation may be deducted from any and all other compensation owed to Executive by the Employer. The provisions of this Section 4(e) shall be modified to the extent, and remain in effect for the period, required by applicable law.
5. Participation in Benefit Plans.
(a) Incentive, Savings, and Retirement Plans. During the Term, Executive shall be entitled to participate in all other incentive, savings, and retirement plans, practices, policies, and programs applicable generally to senior executive officers of the Employer, on the same basis as such other similarly situated employees of the Employer and consistent with Executive’s position with the Employer, in accordance with the terms of such plans, practices, policies and programs.
(b) Health and Welfare Benefit Plans. During the Term, Executive and Executive’s dependents shall be eligible for participation in and shall receive all benefits under any health and welfare benefit plans, practices, policies and programs provided by the Employer, to the extent applicable to similarly situated executives of the Employer and their eligible dependents and subject to the terms, conditions and eligibility requirements (including any required premium payments or other costs) therefore as may be prescribed by the Employer and set forth in the terms of such plans, practices, policies and programs from time to time.
5
(c) Paid Time Off. During the Term, Executive shall be entitled to annual paid time off in accordance with the policies that the Employer periodically establishes for similarly situated executives of the Employer.
6. Payments and Benefits to Executive Upon Termination of Employment. The Employer may terminate Executive’s employment under this Agreement for any reason (except upon termination of Executive’s employment for Cause) with thirty (30) days’ prior written notice to Executive, and Executive may voluntarily terminate her employment under this Agreement with thirty (30) days’ prior written notice to the Employer. The rights and obligations of the Employer and Executive in the event of employment termination during the Term are set forth in this Section 6 as follows:
(a) Death Benefits. Executive’s employment under this Agreement shall terminate automatically upon Executive’s death. If Executive’s employment is terminated by reason of death during the Term, the Employer shall pay Executive, or as applicable, her designated beneficiary or beneficiaries, or to her estate, as the case may be, any accrued but unpaid compensation described in Section 4 as set forth therein.
(b) Disability Benefits. If the Employer determines that Executive has incurred a Disability (whether or not any applicable long-term disability insurance carrier deems him to have incurred a Disability), the Employer may terminate Executive’s employment under this Agreement on account of Executive’s Disability. If Executive’s employment is terminated by the Employer by reason of Disability, the Employer shall pay to Executive, or in the event of her subsequent death, to her designated beneficiary or beneficiaries, or to her estate, as the case may be (1) her then current Base Salary in equal monthly installments and in accordance with the Employer’s regular payroll practices for a period ending one hundred and eighty (180) days following the date of termination of her employment by reason of Disability, and (2) any accrued but unpaid compensation or other vested benefits described in Section 4 as set forth therein.
(c) Termination for Cause or by Executive Without Good Reason. Following Executive’s termination for Cause or a termination by Executive without Good Reason upon thirty (30) days’ written notice, the Employer shall pay Executive any accrued but unpaid compensation described in Section 4 as set forth therein. Executive shall have no right to any other compensation or benefits (except for vested benefits under any employee benefit plan in accordance with the terms of the plan and any right to continued health coverage under Section 4980B of the Code (“***COBRA***”) or similar state law) for any period after a termination for Cause or a termination by Executive without Good Reason upon thirty (30) days’ written notice, and all outstanding unvested equity and shares/units associated with outstanding performance cycles and all unvested options or other equity awards will be cancelled.
(d) Other Qualifying Events of Termination. Upon Executive’s termination of employment for Good Reason or the Employer’s termination of Executive’s employment for any reason other than death, Disability or Cause, Executive shall be entitled to the following:
(i) the Employer shall pay to Executive, or in the event of her subsequent death, to her designated beneficiary or beneficiaries, or to her estate, as the case may be, any accrued but unpaid compensation described in Agreement Section 4 as set forth therein;
(ii) the Employer shall pay to Executive, or in the event of her subsequent death, to her designated beneficiary or beneficiaries, or to her estate, as the case may be, an amount equal to the sum of (1) Executive’s then-current Base Salary (or, if greater, the rate in effect before any reduction in Base Salary that gave rise to termination of Executive’s employment for Good Reason) plus (2) the average annual bonus paid to Executive with respect to the three (3) calendar-year period immediately preceding Executive’s termination of employment, to be paid in equal monthly installments and in accordance with the Employer’s regular payroll practices, over a period of twelve (12) months following the date of termination of her employment (“***Severance***”); and
6
(iii) if Executive elects to continue participation in any group medical, dental, vision and/or prescription drug plan benefits to which Executive and/or Executive’s eligible dependents would be entitled under COBRA, then for eighteen (18) months following the date of termination (the “***COBRA Reimbursement Period***”) the Employer shall pay to Executive monthly payments of an amount equal to the excess of (1) the COBRA cost of such coverage over (2) the amount that Executive would have had to pay for such coverage if she had remained employed during the COBRA Reimbursement Period and paid the active employee rate for such coverage, less withholding for taxes and other similar items; provided, however, that (A) if Executive becomes eligible to receive group health benefits under a program of a subsequent employer or otherwise, the Employer’s obligation to pay any portion of the cost of health coverage as described herein shall cease, except as otherwise provided by law; and (B) the COBRA Reimbursement Period shall only run for the period during which Executive is eligible to elect health coverage under COBRA and timely elects such coverage.
Any amounts due pursuant to this Section 6(d) shall be subject to Section 8(a). Executive shall have no right to any other compensation or benefits (except for vested benefits under any employee benefit plan in accordance with the terms of the plan and any right to continued health coverage under COBRA or similar state law) for any period after termination.
7. Change in Control.
(a) If during the Term and during the period beginning six (6) months prior to, and ending twelve (12) months after the closing of a Change in Control, Executive experiences a termination of employment either by Executive for Good Reason or the Employer for any reason other than death, Disability or Cause, then, in addition to any Severance payable pursuant to Section 6(d), the Employer shall pay to Executive, or in the event of her subsequent death, to her designated beneficiary or beneficiaries, or to her estate, as the case may be, an amount equal to fifty percent (50%) of the sum of (1) Executive’s then-current Base Salary (or, if greater, the rate in effect before any reduction in Base Salary that gave rise to termination of Executive’s employment for Good Reason) plus (2) the average annual bonus paid to Executive with respect to the three (3) calendar-year period immediately preceding Executive’s termination of employment, to be paid on the later of the date of the Change in Control or Executive’s termination of employment. Any amounts due pursuant to this Section 7(a) (a “***Change in Control Payment***”) shall be paid in a lump sum subject to Section 8(a).
(b) Notwithstanding the foregoing, if all or any portion of the payments and benefits provided to an Executive under this Agreement, or any other payment or benefit (including under any plan or arrangement adopted in the future), would otherwise constitute “excess parachute payments” within the meaning of Section 280G of the Code (“***Payments***”), then the amount of such Payments shall be reduced to an amount that would result in there being no excess parachute payments; provided, however, that the foregoing reduction will be made only if and to the extent that such reduction would result in an increase in the aggregate Payments to be provided, determined on an after-tax basis (taking into account the excise tax imposed by Section 4999 of the Code (the “***Excise Tax***”), any tax imposed by any comparable provision of state law, and any applicable federal, state and local income and employment taxes). If any such reduction is necessary hereunder, cash payments shall be modified or reduced first, against the latest amounts otherwise payable, and then any other benefits on a prorated basis. Determination of whether the Payments would constitute an excess parachute payment, and the amount of reduction so that no excess parachute payments shall exist, shall be made, at the Employer’s expense, by the independent accounting firm employed by the Employer immediately prior to the occurrence of any Change in Control (the “***Determination Firm***”).
7
(c) This Agreement contains covenants of Executive to refrain from certain activities deemed harmful to the Employer for a set period of time in exchange for the promises contained herein. If Executive is deemed eligible to receive Payments under this Agreement that could be subject to the Excise Tax, the Employer shall seek a valuation from the Determination Firm to determine the value of the covenants contained in this Agreement and such amount shall be allocated to such arrangements and be excluded from treatment as a Payment.
8. General Provisions Applicable to Post-Termination Compensation.
(a) Release. In return for Severance or any other post-termination payments and benefits described in Sections 6 or 7 of this Agreement and the Release, Executive shall execute a full release and waiver acceptable to the Employer (the “***Release***”) of all known or unknown claims or causes of action Executive has, had, or may have against the Employer, its affiliates and all of the officers, employees, directors and agents of the Employer and its affiliates. Executive must execute such Release and the applicable revocation period required by law must expire, within sixty (60) days following Executive’s termination of employment (and again as to payments due as of a later Change in Control within sixty (60) days following the Change in Control). The Severance or any other post-termination payments and benefits described in Sections 6 or 7 of this Agreement that would have been made prior to such Release becoming effective and irrevocable shall be held and accumulated until the execution of said Release and the expiration of the revocation period without Executive having revoked the same. If the Release becomes effective and irrevocable within such sixty (60) days, all payments and reimbursements held and accumulated will be made within thirty (30) days after the Release becomes effective and irrevocable and the remaining payments and reimbursements will be made as otherwise specified. If Executive does not execute the Release and the Release does not become irrevocable before the sixtieth (60th) day after Executive’s termination of employment, Executive shall not receive Severance or any other post-termination payments and benefits described in Sections 6 or 7 of this Agreement. Notwithstanding the foregoing, if the period for the execution of said Release and the expiration of the revocation period without Executive having revoked the same spans more than one calendar year, all payments and reimbursements held and accumulated will not be made any earlier than the subsequent calendar year.
(b) Compliance with Protective Covenants. Notwithstanding anything to the contrary in this Agreement, in the event Executive fails or ceases to fully abide by all of the covenants contained in Section 10, or in the event any court of competent jurisdiction or arbitrator deems any such covenant(s) to be invalid or unenforceable as the result of a challenge by Executive, then Executive acknowledges and agrees that such circumstances shall constitute a failure of consideration and Executive shall not be entitled to Severance or any other post-termination payments or benefits pursuant to Sections 6 or 7 of this Agreement. If Executive has already received any such Severance or post-termination payments and benefits at the time she fails or ceases to fully abide by any such covenant or any court of competent jurisdiction or arbitrator deems any such covenant(s) to be invalid or unenforceable as the result of a challenge by Executive, the Employer shall immediately be entitled to recover all such gross amounts in full from Executive.
9. Regulatory Limitations
(a) If Executive is suspended and/or temporarily prohibited from participating in the conduct of the affairs of the Employer by a notice served under 12 U.S.C. Section 1818(e) or (g), the obligations of the Employer under this Agreement shall be suspended as of the date of service of such notice, unless stayed by appropriate proceedings.
8
(b) If Executive is removed and/or permanently prohibited from participating in the conduct of the affairs of the Employer by an order issued under 12 U.S.C. Section 1818(e) or (g), all obligations of the Employer under this Agreement shall terminate as of the effective date of the order, but vested rights of the Parties shall not be affected.
(c) Notwithstanding the timing for the payment of any Severance or other post-termination payments and benefits described in Sections 6 and 7, no such payments shall be made or commence, as applicable, that require the concurrence or consent of the appropriate federal banking agency of the Employer pursuant to 12 C.F.R. Section 359 prior to the receipt of such concurrence or consent. The Employer shall have the obligation to submit an application to make such payment to the appropriate federal banking agency within fifteen (15) business days of Executive’s right to such payment arising and shall provide a copy of such application to Executive. Any payments suspended by operation of this Section 9(c) shall be paid as a lump sum within thirty (30) days following receipt of the concurrence or consent of the appropriate federal banking agency of the Employer or as otherwise directed by such federal banking agency.
(d) All obligations under this Agreement are further subject to such conditions, restrictions, limitations and forfeiture provisions as may separately apply pursuant to any applicable state banking laws.
10. Protective Covenants. Executive shall abide by and be bound by the following Protective Covenants:
(a) Confidential Information and Trade Secrets. The Parties acknowledge that the Employer shall disclose during the Term, or has already disclosed, to Executive for use in Executive’s employment, and that during the Term, Executive will be provided access to and otherwise make use of, acquire, create, or add to certain valuable, unique, proprietary, and secret information of the Employer (whether tangible or intangible and whether or not electronically kept or stored), including financial statements, drawings, designs, manuals, business plans, processes, procedures, formulas, inventions, pricing policies, customer and prospect lists and contacts, contracts, sources and identity of vendors and contractors, financial information of customers of the Employer, and other proprietary documents, materials, or information indigenous to the Employer, relating to its businesses and activities, or the manner in which the Employer does business, which is valuable to the Employer in conducting its business because the information is kept confidential and is not generally known to the Employer’s competitors or to the general public (the “***Confidential Information***”). Confidential Information does not include information generally known or easily obtained from public sources or public records unless Executive causes the Confidential Information to become generally known or easily obtained from public sources or public records.
To the extent that the Confidential Information rises to the level of a trade secret under applicable law, then Executive shall, during Executive’s employment and for so long as the Confidential Information remains a trade secret under applicable law (or for the maximum period of time otherwise allowed by applicable law), (i) protect and maintain the confidentiality of such trade secrets and (ii) refrain from disclosing, copying, or using any such trade secrets, without the Employer’s prior written consent, except as necessary in Executive’s performance of Executive’s duties while employed with the Employer.
To the extent that the Confidential Information defined above does not rise to the level of a trade secret under applicable law, Executive shall, during Executive’s employment and for a period of eighteen (18) months following any voluntary or involuntary termination of employment, (i) protect and maintain the confidentiality of the Confidential Information and (ii) refrain from disclosing, copying, or using any Confidential Information without the Employer’s prior written consent, except as necessary in Executive’s performance of Executive’s duties while employed with the Employer.
9
(b) Return of Property of the Employer. Upon any voluntary or involuntary termination of Executive’s employment (or at any time upon request by the Employer), Executive agrees to immediately return to the Employer all property of the Employer (including, without limitation, all documents, electronic files, records, computer disks or other tangible or intangible things that may or may not relate to or otherwise comprise Confidential Information or trade secrets, as defined by applicable law) that Executive created, used, possessed or maintained while working for the Employer from whatever source and whenever created, including all reproductions or excerpts thereof. This provision does not apply to purely personal documents of Executive, but it does apply to business calendars, customer lists, contact information, computer programs, disks and their contents and like information that may contain some personal matters of Executive. Executive acknowledges that title to all such property is vested in the Employer.
(c) Non-Solicitation of Customers. During the Term and for a period of (i) twelve (12) months thereafter, or (ii) if any Change in Control Payment is paid to Executive pursuant to Section 7(a), eighteen (18) months thereafter, Executive agrees not to, directly or indirectly, in the Territory (as defined above), contact, solicit, divert, appropriate, or call upon, the customers of the Employer with whom Executive has had material contact during the most recent twelve (12) months, including prospects of the Employer with whom Executive had such contact during said most recent twelve (12) months (1) to solicit such customers or prospective customers for a Competitive Business as herein defined (including, without limitation, any Competitive Business started by Executive) or (2) to otherwise encourage any such customer to discontinue, reduce, or adversely alter the amount of its business with the Employer. Executive acknowledges that, due to Executive’s relationship with the Employer, Executive will develop, or has developed, special contacts and relationships with the Employer’s customers and prospective customers, and that it would be unfair and harmful to the Employer if Executive took advantage of these relationships.
(d) Non-Piracy of Employees. During the Term and for a period of (i) twelve (12) months thereafter, or (ii) if any Change in Control Payment is paid to Executive pursuant to Section 7(a), eighteen (18) months thereafter, Executive covenants and agrees that Executive shall not, directly or indirectly: (1) solicit, recruit, or hire (or attempt to solicit, recruit, or hire) or otherwise assist anyone in soliciting, recruiting, or hiring, any employee or independent contractor (which shall not include non-exclusive outside vendors) of the Employer who performed work for the Employer within the six (6) month period prior to the solicitation or who was otherwise engaged or employed with the Employer at the time of the termination of Executive’s employment with the Employer or (2) otherwise encourage, solicit, or support any such employees or independent contractors to leave their employment or engagement with the Employer, in either case until such employee or contractor has been terminated or separated from the Employer for at least twelve (12) months.
(e) Non-Compete. During the Term and for a period of (i) twelve (12) months thereafter, or (ii) if any Change in Control Payment is paid to Executive pursuant to Section 7(a), eighteen (18) months thereafter, Executive covenants and agrees that Executive shall not, directly or indirectly, compete with the Employer, as an officer, director, member, principal, partner, shareholder (other than a shareholder in a company that is publicly traded and so long as such ownership is less than five (5) percent), owner, manager, supervisor, administrator, employee, consultant, or independent contractor, by working in the Territory (as defined above) for or as a Competitive Business, in a capacity identical or substantially similar to the capacity in which Executive served at the Employer. Executive acknowledges that the Employer conducts its business within the Territory, that Executive will perform services for and on behalf of the Employer within the Territory, and that this Section 10(e) (and the definition of the Territory) is a reasonable limitation on Executive’s ability to compete with the Employer.
(f) Mutual Non-Disparagement. During the Term and for a period of twelve (12) months thereafter, the Employer agrees that it will not issue any statement (written or oral) that could reasonably be perceived as disparaging to Executive. During the Term and for a period of twelve (12) months thereafter, Executive agrees that she will not make any statement (written or oral) that could reasonably be perceived as disparaging to the Employer or any person or entity that she reasonably should know is an affiliate of the Employer.
10
(g) Acknowledgment. It is understood and agreed by Executive that the Parties have attempted to limit her right to compete only to the extent necessary to protect the Employer from unfair competition. It is acknowledged that the purpose of these covenants and promises is (and that they are necessary) to protect the Employer’s legitimate business interests, to protect the Employer’s investment in the overall development of its business and the good will of its customers, and to protect and retain (and to prevent Executive from unfairly and to the detriment of the Employer utilizing or taking advantage of) the business trade secrets and Confidential Information of the Employer and those substantial contacts and relationships (including those with customers and employees of the Employer) which Executive established due to her employment with the Employer. Therefore, in addition to any other remedies, Executive agrees that in the event that she breaches any of the covenants in Section 10 of this Agreement, no further amounts will be paid to Executive pursuant hereto, other than salary or benefits earned and accrued by Executive as of the date of any such breach. The Employer and Executive agree that all remedies available to the Employer or Executive, as applicable, shall be cumulative.
Executive acknowledges that these covenants and promises (and their respective time, geographic, and/or activity limitations) are reasonable and that said limitations are no greater than necessary to protect said legitimate business interests in light of Executive’s position with the Employer and the Employer’s business, and Executive agrees to strictly abide by the terms hereof.
If any provision of this Agreement is ruled invalid or unenforceable by a court of competent jurisdiction because of a conflict between the provision and any applicable law or public policy, the provision shall be redrawn to make the provision consistent with, and valid and enforceable under, the law or public policy.
(h) Notwithstanding anything in this Agreement to the contrary, (a) nothing in this Agreement, including but not limited to the Release, or other agreement prohibits Executive from reporting possible violations of law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress and any agency Inspector General (the “***Government Agencies***”), or communicating with Government Agencies or otherwise participating in any investigation or proceedings that may be conducted by Government Agencies, including providing documents or other information; (b) Executive does not need the prior authorization of the Employer to take any action described in (a), and Executive is not required to notify the Employer that she has taken any action described in (a); and (c) neither this Agreement nor the Release limits Executive’s right to receive an award for providing information relating to a possible securities law violation to the Securities and Exchange Commission. Further, notwithstanding the foregoing, Executive will not be held criminally or civilly liable under any federal, state or local trade secret law for the disclosure of a trade secret that (x) is made (i) in confidence to a federal, state or local official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (y) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Additionally, if Executive is suing the Employer for retaliation based on the reporting of a suspected violation of law, she may disclose a trade secret to her attorney and use the trade secret information in the court proceeding, so long as any document containing the trade secret is filed under seal and Executive does not disclose the trade secret except pursuant to court order.
(i) Injunctive Relief. The Employer or Executive shall have the right to apply to any appropriate court located in the State of Louisiana for injunctive relief with respect to the enforcement of the covenants and agreements set forth in this Section 10. This remedy shall be in addition to, and not in limitation of, any other rights or remedies to which the Employer or Executive are or may be entitled at law or in equity respecting this Agreement.
11
11. Section 409A. Executive and the Employer intend for all payments under this Agreement to be either outside the scope of Section 409A of the Code or to comply with its requirements as to timing of payments. Accordingly, to the extent applicable, this Agreement at all times is intended to be operated so as to be exempt from or in accordance with the requirements of Section 409A of the Code, as amended, and the regulations and rulings thereunder, including any applicable transition rules. The Employer shall have authority to take action, or refrain from taking any action, with respect to the payments and benefits under this Agreement that is reasonably necessary to be exempt from or comply with Section 409A. Notwithstanding the foregoing, however, in no event will the Employer be liable to Executive if this Agreement or any compensation payable hereunder fails to be exempt from or comply with Section 409A of the Code. Any payments that qualify for the “short-term deferral” exception or another exception under Section 409A of the Code shall be paid under the applicable exception (with the earliest amounts payable being deemed subject to the exception to the extent available). For purposes of the limitations on nonqualified deferred compensation under Section 409A of the Code, each payment of compensation under this Agreement shall be treated as a separate payment of compensation for purposes of applying the Section 409A of the Code. Notwithstanding anything in this Agreement to the contrary, if any amounts or benefits payable under this Agreement in the event of Executive’s termination of employment constitute “nonqualified deferred compensation” within the meaning of Code Section 409A, payment of such amounts and benefits shall commence when Executive incurs a “separation from service” within the meaning of Treasury Regulation 1.409A-1(h), without regard to any of the optional provisions thereunder, from the Employer and any entity that would be considered a single employer with the Employer under Code Section 414(b) or 414(c) as modified by the rules under Section 409A of the Code (a “***Separation from Service***”). Such payments or benefits shall be provided in accordance with the timing provisions of this Agreement by substituting the Agreement’s references to “termination of employment” or “termination” with Separation from Service. In addition, if at the time of Executive’s Separation from Service Executive is a “specified employee” within the meaning of Code Section 409A(a)(2)(B)(i), any amount or benefits that the constitutes “nonqualified deferred compensation” within the meaning of Code Section 409A that becomes payable to Executive on account of Executive’s Separation from Service will not be paid until after the earlier of (i) the first business day of the seventh (7th) month following Executive’s Separation from Service, or (ii) the date of Executive’s death (the “***409A Suspension Period***”) to the extent required to comply with Section 409A of the Code. After the end of the 409A Suspension Period, Executive shall be paid a cash lump sum payment equal to any payments (including interest on any such payments, at an interest rate of not less than the prime interest rate, as published in the Wall Street Journal, over the period such payment is restricted from being paid to Executive) and benefits that the Employer would otherwise have been required to provide under this Agreement but for the imposition of the 409A Suspension Period. Thereafter, Executive shall receive any remaining payments and benefits due under this Agreement in accordance with the terms of Section 6(d) or Section 7(a), as applicable (as if there had not been any 409A Suspension Period beforehand). To the extent not otherwise specified in this Agreement, all (A) reimbursements and (B) in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (1) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement); (2) the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in any other calendar year; (3) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred; and (4) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit.
12. General Provisions.
(a) Modification and Waiver. This Agreement may not be modified or amended except by an instrument in writing, signed by the Parties, and which specifically refers to this Agreement. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the Party charged with such waiver or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.
12
(b) Nonassignability. Neither this Agreement nor any right or interest hereunder shall be assignable by Executive, her beneficiaries or legal representatives, without the prior written consent of the Employer, provided, however, that nothing herein shall preclude (i) Executive from designating a beneficiary to receive any benefits payable hereunder upon her death, or (ii) the executors, administrators, or other legal representatives of Executive or her estate from assigning any rights hereunder to the person or persons entitled thereto. The Employer may assign this Agreement without the consent of Executive.
(c) Binding Agreement. This Agreement shall be binding upon, and inure to the benefit of, the Employer and Executive and their respective heirs, successors, assigns, and legal representatives.
(d) No Bar. Executive acknowledges and agrees that the existence of any claim or cause of action against the Employer shall not constitute a defense to the enforcement by the Employer of Executive’s covenants, obligations, or undertakings in this Agreement.
(e) No Conflicting Obligations. Executive hereby acknowledges and represents by her execution of this Agreement that she will not perform, except upon the Employer’s written request, employment-related obligations and duties for the Employer that would cause a breach, default, or violation of any other employment, nondisclosure, confidentiality, non-competition, or other agreement to which Executive may be a party or otherwise bound. Moreover, Executive hereby agrees that she will not use in the performance of such employment-related obligations and duties for the Employer or otherwise disclose to the Employer, except upon the Employer’s written request, any trade secrets or confidential information of any person or entity (including any former employer) if and to the extent that such use or disclosure may cause a breach or violation of any obligation or duty owed to such employer, person, or entity under any agreement or applicable law.
(f) Mediation. Except with respect to Section 10 above if any dispute arises out of or relates to this Agreement, or a breach thereof, and if the dispute cannot be settled through direct discussions between the Parties, the Parties agree to first endeavor to settle the dispute in an amicable manner by mediation under the Commercial Mediation Rules of the American Arbitration Association before resorting to any other process for resolving the dispute.
(g) Indemnification. To the fullest extent permitted by law, the Employer shall indemnify Executive with respect to any actions, proceedings, investigations, or inquiries (collectively, “***Actions***”) commenced against or relating to Executive in her capacity as an officer, director, executive, agent or fiduciary or former officer, director, executive, agent or fiduciary of the Employer, or any affiliate thereof, for which Executive may render service in such capacity, whether by or on behalf of the Employer, its shareholders, or other third parties, including, without limitation, any governmental agent or entity, and the Employer shall advance to Executive on a timely basis an amount equal to the reasonable fees and expenses incurred in defending such Actions, after receipt of an itemized request for such advance, and an undertaking from Executive to repay the amount of such advance, with interest at a reasonable rate from the date of the request, as determined by the Employer, if it shall ultimately be determined that Executive is not entitled (as a matter of law or by judicial determination) to be indemnified against such expenses. This indemnity shall survive any termination of employment under this Agreement and is in addition to and not in limitation of any other right to indemnification or exoneration to which Executive is entitled at law, or under the governing organizational documents and/or policies of the Employer. The Employer agrees to use its best efforts to secure and maintain officers’ and directors’ liability insurance, including coverage for Executive on terms similar to those provided to other senior executives.
13
(h) Legal Fees. If, after a Change in Control, (a) the Employer has failed to comply with any of its obligations under this Agreement, or (b) the Employer or any other person (other than Executive) has taken any action to declare this Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from Executive the benefits intended to be provided to Executive hereunder (including any payment pursuant to Section 6(d) and/or Section 7 of this Agreement), the Employer irrevocably authorizes Executive from time to time to retain counsel of her choice, at the Employer’s expense, to represent Executive in connection with the initiation or defense of any litigation or other legal action, whether by or against the Employer or any of its affiliated companies or any director, officer, shareholder, or other person affiliated with the Employer. The fees and expenses of counsel selected from time to time by Executive as provided in this Section 12(h) shall be paid or reimbursed to Executive by the Employer, whether suit or an arbitration proceeding has been brought or not. The Employer’s obligation to pay Executive’s legal fees provided by this Section 12(h) operates separately from and in addition to any legal fee reimbursement obligation the Employer has with Executive under any separate severance or other agreement.
(i) Severability. If for any reason any provision of this Agreement is held invalid, the Parties agree that the court or arbitrator shall modify the provision(s) (or subpart(s) thereof) to make the provision(s) (or subpart(s) thereof) and this Agreement valid and enforceable. Any invalid provision shall not affect any other provision of this Agreement not held invalid, and each such other provision shall, to the full extent consistent with law, continue in full force and effect. If any provision of this Agreement shall be held invalid in part, such invalidity shall in no way affect the rest of such provision not held so invalid, and the rest of such provision, together with all other provisions of this Agreement, shall to the full extent, consistent with law, continue in full force and effect.
(j) Governing Law. This Agreement has been executed under seal and delivered in the State of Louisiana, and its validity, interpretation, performance, and enforcement shall be governed by the laws of the State of Louisiana, without reference to its rules of conflicts of laws. Further, Louisiana law shall apply to the merits of any dispute or claim in arbitration, without reference to its rules of conflicts of law.
(k) Rights of Third Parties. Nothing herein expressed or implied is intended to or shall be construed to confer upon or give to any person, firm, or other entity, other than the Parties and their permitted assigns, any rights or remedies under or by reason of this Agreement.
(l) Notices. All notices, requests, demands, and other communications provided for by this Agreement shall be in writing and shall be sufficiently given if and when mailed in the United States by registered or certified mail, or personally delivered, to the Party entitled thereto at the address stated below or to such changed address as the addressee may have given by a similar notice:
To the Employer: Investar Bank, National Association
10500 Coursey Boulevard
Baton Rouge, Louisiana 70816
Attention: CEO
To Executive: Linda M. Crochet
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
(m) Counterpart Signatures. This Agreement may be executed in counterparts or by facsimile signature, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.
[Signatures on next page]
14
**IN WITNESS WHEREOF**, the Parties have executed this Agreement as of the date first written above.
**INVESTAR BANK, NATIONAL ASSOCIATION**
By: /s/ John J. D'Angelo
Name: John J. D’Angelo
Title: President and Chief Executive Officer
**EXECUTIVE**:
By: /s/ Linda M. Crochet
Name: Linda M. Crochet
15
---
## EXHIBIT 10.2
SEC source: [ex_989497.htm](https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/ex_989497.htm)
**Exhibit 10.2**
**EMPLOYMENT AGREEMENT**
**THIS EMPLOYMENT AGREEMENT** (this “***Agreement***”) is made and entered into as of July 17, 2026 (the “***Effective Date***”), by and among **INVESTAR BANK, NATIONAL ASSOCIATION**, a Louisiana bank (the “***Employer***”) and Jeffrey W. Martin, a resident of Louisiana (“***Executive***”). The Employer and Executive are sometimes hereinafter referred to, collectively, as the “***Parties***” and, individually, as a “***Party***.”
**WHEREAS**, Executive is currently engaged as Executive Vice President and Chief Risk Officer of the Employer; and
**WHEREAS**, the Employer wishes to continue to employ Executive to serve as Executive Vice President and Chief Risk Officer of the Employer and Executive wishes to continue to be so employed by the Employer, all upon the terms and conditions hereinafter set forth;
**NOW, THEREFORE**, for and in consideration of the Agreement’s mutual covenants, and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Definitions. The following terms used in this Agreement shall have the following meanings:
(a) “***Cause***” shall mean a termination of Executive’s employment as a result of:
(i) any act by Executive of fraud against, material misappropriation from, or material dishonesty to the Employer during the Term;
(ii) conduct by Executive that amounts to willful misconduct, gross and willful insubordination, or gross neglect in the performance of Executive’s duties and responsibilities hereunder;
(iii) Executive’s indictment for (or its procedural equivalent), or entering of a guilty plea or plea of no contest with respect to, a crime involving breach of trust or moral turpitude or any felony;
(iv) Employer’s receipt of any form of notice, written or otherwise, that any regulatory agency having jurisdiction over the Employer intends to institute any form of formal or informal regulatory action against Executive;
(v) Executive’s removal and/or permanent prohibition from participating in the conduct of the Employer’s affairs by an order issued under 12 U.S.C. Section 1818(e) or (g);
(vi) the exhibition of a standard of behavior within the scope of or related to Executive’s employment that is materially disruptive to the orderly conduct of the Employer’s business operations (including, without limitation, substance abuse or sexual harassment or sexual misconduct that violates federal or state law);
(vii) Executive’s breach of any fiduciary duty owed to the Employer; or
(viii) a material breach of the terms of this Agreement by Executive not cured by Executive within twenty (20) business days after his receipt of the Employer’s written notice thereof, including, without limitation, a material failure by Executive to perform Executive’s duties and responsibilities in the manner and to the extent required under this Agreement, and, in the event Executive does not cure said condition, the Employer terminates his employment within thirty (30) days after the period for curing said condition has expired;
1
each of the foregoing to be determined by the Chief Executive Officer of the Employer (“***CEO***”), as applicable, in the reasonable exercise of his or her discretion and acting in good faith.
(b) “***Change in Control***” shall mean the occurrence of any of the following events, provided the Change in Control also constitutes a change in the ownership of the Company, or in a substantial portion of the assets of the Company, as applicable, within the meaning of Section 409A of the Code.
(i) During any twelve (12)-month period, the individuals who are members of the Board of Directors of the Company (the “***Company Board***”) immediately before the beginning of such twelve (12)-month period (the “***Incumbent Board***”*)* cease for any reason to constitute at least 50% of the Company Board during that twelve (12)-month period; provided, however, that if the election, or nomination for election by the Company’s shareholders, of any new director was approved in advance by a vote of at least 50% of the Incumbent Board, such new director shall, for purposes of this Agreement, be considered as a member of the Incumbent Board;
(ii) Upon the consummation of any acquisition, merger, consolidation, reorganization or other similar transaction immediately after which the shareholders of the Company immediately before such transaction own less than 50% of the total fair market value or total voting power of the Company or the Person resulting from such transaction if not the Company; provided, however, that the event described in this Subsection (ii) shall not be deemed to be a Change in Control by virtue of any of the following acquisitions: (A) by the Company, (B) by any employee benefit plan (or related trust) sponsored or maintained by the Company or the Employer, or (C) by an underwriter temporarily holding securities pursuant to an offering of such securities;
(iii) When any Person or more than one Person acting as a group acquires, or has acquired, during any twelve (12)-month period more than 50% of the total gross fair market value of the assets of the Company immediately prior to such acquisition or acquisitions, including, without limitation, stock or assets of the Employer.
(c) “***Code***” shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
(d) “***Company***” shall mean Investar Holding Corporation, a Louisiana corporation.
(e) “***Competitive Business***” shall mean an enterprise that is in the business of offering banking products and/or services, which services and/or products are similar or substantially identical to those offered by the Employer during Executive’s employment with the Employer.
(f) “***Disability***” shall mean a condition for which benefits are payable to Executive under any long-term disability insurance coverage then provided to Executive by the Employer; or, if no such coverage is then being provided, the inability of Executive to perform the essential functions of Executive’s duties under this Agreement with or without reasonable accommodation for a period of at least ninety (90) days in the aggregate in any rolling one hundred and eighty (180)-day period, as determined by an independent physician selected by the Employer.
(g) “***Good Reason***” shall mean if, during the term of Executive’s employment under this Agreement, and without Executive’s consent, the following occurs:
2
(i) any breach of the material terms of this Agreement by the Employer;
(ii) any material and adverse change in the reporting relationship(s), authority, duties or responsibilities of Executive;
(iii) any assignment of duties that are materially and adversely inconsistent with Executive’s position or that are materially and adversely inconsistent with Executive’s authority, duties or responsibilities described in this Agreement;
(iv) the relocation of Executive without Executive’s consent to any principal place of employment that is a material change from the main office of the Employer as the Employer may from time to time designate; provided, however, this Subsection (iv) shall not apply in the case of business travel which requires Executive to relocate temporarily for periods of ninety (90) days or less; or
(v) any material and adverse change in Executive’s Base Salary or annual bonus opportunity.
Notwithstanding the foregoing, no event shall constitute Good Reason unless Executive notifies the CEO in writing regarding the existence of the condition(s) constituting Good Reason no later than thirty (30) days after Executive knows of the condition(s), the Employer does not cure said condition within thirty (30) days after receipt of Executive’s written notice and, in the event the Employer does not cure said condition, Executive terminates his employment within thirty (30) days after the period for curing said condition has expired without the Employer having cured same.
(h) “***Person***” shall mean any individual, corporation, bank, credit union, general or limited partnership, limited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature.
(i) “***Territory***” shall mean, to the extent the Employer carries on business therein, (i) Ascension, Calcasieu, East Baton Rouge, East Feliciana, Evangeline, Jefferson, Lafayette, Livingston, St. Tammany, Tangipahoa, West Baton Rouge and West Feliciana Parishes, Louisiana, (ii) Galveston and Harris Counties, Texas, (iii) Sumter and Tuscaloosa Counties, Alabama, and (iv) in the event that the Employer expands the geographic reach of its business to other parishes or counties during Executive’s employment, the definition of Territory shall expand to include such additional parishes or counties where its offices are located. In such case, Executive agrees to execute and deliver an amendment hereto adding any such additional parishes or counties, upon payment to Executive by the Employer of the sum of One Hundred Dollars ($100) per amendment.
2. Employment. The Employer hereby employs Executive, and Executive hereby accepts such employment, as Executive Vice President and Chief Risk Officer of the Employer, with such duties and responsibilities as are customarily performed by persons acting in such capacities and as may be delegated from time to time to Executive by the CEO, as applicable, upon and pursuant to the terms and conditions set forth in this Agreement.
3. Term and Duties.
(a) Term. The period of Executive’s employment with the Employer under this Agreement shall commence as of the date hereof and shall continue for a period of three (3) years unless earlier terminated pursuant to this Agreement (the “***Initial Term***”). If the Agreement is in effect at the end of the Initial Term, the Term, as defined herein, shall be renewed automatically for successive twelve (12)-month periods (each a “***Renewal Term***”) unless and until one Party gives written notice to the other of its or his intent not to extend this Agreement with such written notice to be given not less than ninety (90) days prior to the end of the Initial Term or any subsequent Renewal Term, as applicable. In the event such notice of non-renewal is properly given, this Agreement shall terminate at the end of the remaining Initial Term or Renewal Term then in effect, subject to earlier termination in connection with the termination of Executive’s employment pursuant to this Agreement. In the event that any Party provides timely notice of non-renewal of the Agreement, Executive shall terminate his employment with the Employer on expiration of the Term (the Initial Term and any subsequent Renewal Terms hereinafter referred to as the “***Term***”).
3
(b) Performance of Duties. During the Term, except for periods of illness, disability, reasonable vacation periods, and authorized leaves of absence, all subject to policies generally applicable to senior executives of the Employer, Executive shall devote substantially all of his business time, attention, skill, and efforts to the faithful performance of his duties under this Agreement. Executive shall be eligible to participate as a member in community, civic, religious, or similar organizations, and may pursue personal investments, which in either event do not present any material conflict of interest with the Employer (with prior written approval by the CEO during the Term), or unfavorably affect in any material respect the performance of Executive’s duties under this Agreement.
(c) No Other Agreement. Executive shall have no employment contract or other written or oral agreement concerning employment with any organization, entity or person other than the Employer during the Term.
4. Compensation.
(a) Base Salary. The Employer shall pay Executive a minimum base salary per year that is no less than the amount paid to Executive as of the Effective Date of this Agreement (as in effect as of the Effective Date or as subsequently increased thereafter, the “***Base Salary***”). Following the first anniversary of the Initial Term and thereafter (including during any Renewal Term), Executive’s Base Salary may be increased (but not decreased) at the discretion of the Company Board; such initial Base Salary, or any increased Base Salary, shall be payable in substantially equal installments in accordance with the Employer’s normal pay practices, but not less frequently than monthly.
(b) Incentive Compensation. Subject to applicable law, including any required regulatory approval, Executive shall be eligible to participate in an annual incentive compensation program. For each calendar year during the Term (prorated for any partial calendar year), Executive shall be eligible to receive annual incentive compensation in an amount of up to thirty-six percent (36%) of his Base Salary earned for that calendar year (“***Incentive Compensation***”). The performance measures for any given year shall be set by the Company Board after consultation with Executive no later than November 30th of the year preceding the year to which the Incentive Compensation opportunity relates. Entitlement to and payment of such Incentive Compensation and any related holdbacks are subject to the discretion and approval of the Company Board. Any Incentive Compensation earned shall be payable no later than sixty (60) days following the calendar quarter in which the Incentive Compensation is earned, in accordance with the Employer’s normal practices for the payment of Incentive Compensation. To be entitled to any payment of Incentive Compensation, Executive must be employed by the Employer on the last day of the applicable calendar year in which the Incentive Compensation is earned.
(c) Stock Option and Equity Awards. Executive will be eligible to participate in any stock option plan, restricted stock and long-term equity incentive plans offered by the Employer to employees on the same basis as such other similarly situated employees of the Employer and terms consistent with Executive’s position with the Employer.
4
(d) Reimbursement of Expenses; Automobile Use. Employer shall pay or reimburse Executive for all reasonable travel and entertainment expenses incurred by Executive in the performance of his duties and responsibilities under this Agreement, in accordance with the terms provided in the Employer’s applicable policies and procedures, and as the Employer has adopted or may adopt in the future;
Executive agrees, as a condition of any such reimbursement, to submit verification of the nature and amount of such expenses in accordance with such reimbursement policies and in sufficient detail to comply with rules and regulation promulgated by the United States Department of Treasury.
(e) Clawback of Compensation. Executive agrees to repay the gross amount of any compensation previously paid to Executive under this Agreement that is subject to recovery under any applicable law (including any rule of any exchange or service through which the securities of the Company are then traded) or compensation recoupment policy the Employer may adopt from time to time, including, but not limited to, the following circumstances:
(i) where such compensation was in excess of what should have been paid because the determination of the amount due was based, in whole or in part, on materially inaccurate financial information of the Employer;
(ii) where such compensation constitutes “excessive compensation” within the meaning of 12 C.F.R. Part 30, Appendix A;
(iii) where Executive has committed, is substantially responsible for, or has violated, the respective acts, omissions, conditions, or offenses outlined under 12 C.F.R. Section 359.4(a)(4); or
(iv) if the Employer becomes, and for so long as the Employer remains, subject to the provisions of 12 U.S.C. Section 1831o(f), where such compensation exceeds the restrictions imposed on the senior executive officers of such an institution.
Executive agrees to return within sixty (60) days, or within any earlier timeframe required by applicable law or any recoupment policy, any such compensation properly identified by the Employer by written notice. If Executive fails to return such compensation within the applicable time period, Executive agrees that the amount of such compensation may be deducted from any and all other compensation owed to Executive by the Employer. The provisions of this Section 4(e) shall be modified to the extent, and remain in effect for the period, required by applicable law.
5. Participation in Benefit Plans.
(a) Incentive, Savings, and Retirement Plans. During the Term, Executive shall be entitled to participate in all other incentive, savings, and retirement plans, practices, policies, and programs applicable generally to senior executive officers of the Employer, on the same basis as such other similarly situated employees of the Employer and consistent with Executive’s position with the Employer, in accordance with the terms of such plans, practices, policies and programs.
(b) Health and Welfare Benefit Plans. During the Term, Executive and Executive’s dependents shall be eligible for participation in and shall receive all benefits under any health and welfare benefit plans, practices, policies and programs provided by the Employer, to the extent applicable to similarly situated executives of the Employer and their eligible dependents and subject to the terms, conditions and eligibility requirements (including any required premium payments or other costs) therefore as may be prescribed by the Employer and set forth in the terms of such plans, practices, policies and programs from time to time.
5
(c) Paid Time Off. During the Term, Executive shall be entitled to annual paid time off in accordance with the policies that the Employer periodically establishes for similarly situated executives of the Employer.
6. Payments and Benefits to Executive Upon Termination of Employment. The Employer may terminate Executive’s employment under this Agreement for any reason (except upon termination of Executive’s employment for Cause) with thirty (30) days’ prior written notice to Executive, and Executive may voluntarily terminate his employment under this Agreement with thirty (30) days’ prior written notice to the Employer. The rights and obligations of the Employer and Executive in the event of employment termination during the Term are set forth in this Section 6 as follows:
(a) Death Benefits. Executive’s employment under this Agreement shall terminate automatically upon Executive’s death. If Executive’s employment is terminated by reason of death during the Term, the Employer shall pay Executive, or as applicable, his designated beneficiary or beneficiaries, or to his estate, as the case may be, any accrued but unpaid compensation described in Section 4 as set forth therein.
(b) Disability Benefits. If the Employer determines that Executive has incurred a Disability (whether or not any applicable long-term disability insurance carrier deems him to have incurred a Disability), the Employer may terminate Executive’s employment under this Agreement on account of Executive’s Disability. If Executive’s employment is terminated by the Employer by reason of Disability, the Employer shall pay to Executive, or in the event of his subsequent death, to his designated beneficiary or beneficiaries, or to his estate, as the case may be (1) his then current Base Salary in equal monthly installments and in accordance with the Employer’s regular payroll practices for a period ending one hundred and eighty (180) days following the date of termination of his employment by reason of Disability, and (2) any accrued but unpaid compensation or other vested benefits described in Section 4 as set forth therein.
(c) Termination for Cause or by Executive Without Good Reason. Following Executive’s termination for Cause or a termination by Executive without Good Reason upon thirty (30) days’ written notice, the Employer shall pay Executive any accrued but unpaid compensation described in Section 4 as set forth therein. Executive shall have no right to any other compensation or benefits (except for vested benefits under any employee benefit plan in accordance with the terms of the plan and any right to continued health coverage under Section 4980B of the Code (“***COBRA***”) or similar state law) for any period after a termination for Cause or a termination by Executive without Good Reason upon thirty (30) days’ written notice, and all outstanding unvested equity and shares/units associated with outstanding performance cycles and all unvested options or other equity awards will be cancelled.
(d) Other Qualifying Events of Termination. Upon Executive’s termination of employment for Good Reason or the Employer’s termination of Executive’s employment for any reason other than death, Disability or Cause, Executive shall be entitled to the following:
(i) the Employer shall pay to Executive, or in the event of his subsequent death, to his designated beneficiary or beneficiaries, or to his estate, as the case may be, any accrued but unpaid compensation described in Agreement Section 4 as set forth therein;
(ii) the Employer shall pay to Executive, or in the event of his subsequent death, to his designated beneficiary or beneficiaries, or to his estate, as the case may be, an amount equal to the sum of (1) Executive’s then-current Base Salary (or, if greater, the rate in effect before any reduction in Base Salary that gave rise to termination of Executive’s employment for Good Reason) plus (2) the average annual bonus paid to Executive with respect to the three (3) calendar-year period immediately preceding Executive’s termination of employment, to be paid in equal monthly installments and in accordance with the Employer’s regular payroll practices, over a period of twelve (12) months following the date of termination of his employment (“***Severance***”); and
6
(iii) if Executive elects to continue participation in any group medical, dental, vision and/or prescription drug plan benefits to which Executive and/or Executive’s eligible dependents would be entitled under COBRA, then for eighteen (18) months following the date of termination (the “***COBRA Reimbursement Period***”) the Employer shall pay to Executive monthly payments of an amount equal to the excess of (1) the COBRA cost of such coverage over (2) the amount that Executive would have had to pay for such coverage if he had remained employed during the COBRA Reimbursement Period and paid the active employee rate for such coverage, less withholding for taxes and other similar items; provided, however, that (A) if Executive becomes eligible to receive group health benefits under a program of a subsequent employer or otherwise, the Employer’s obligation to pay any portion of the cost of health coverage as described herein shall cease, except as otherwise provided by law; and (B) the COBRA Reimbursement Period shall only run for the period during which Executive is eligible to elect health coverage under COBRA and timely elects such coverage.
Any amounts due pursuant to this Section 6(d) shall be subject to Section 8(a). Executive shall have no right to any other compensation or benefits (except for vested benefits under any employee benefit plan in accordance with the terms of the plan and any right to continued health coverage under COBRA or similar state law) for any period after termination.
7. Change in Control.
(a) If during the Term and during the period beginning six (6) months prior to, and ending twelve (12) months after the closing of a Change in Control, Executive experiences a termination of employment either by Executive for Good Reason or the Employer for any reason other than death, Disability or Cause, then, in addition to any Severance payable pursuant to Section 6(d), the Employer shall pay to Executive, or in the event of his subsequent death, to his designated beneficiary or beneficiaries, or to his estate, as the case may be, an amount equal to fifty percent (50%) of the sum of (1) Executive’s then-current Base Salary (or, if greater, the rate in effect before any reduction in Base Salary that gave rise to termination of Executive’s employment for Good Reason) plus (2) the average annual bonus paid to Executive with respect to the three (3) calendar-year period immediately preceding Executive’s termination of employment, to be paid on the later of the date of the Change in Control or Executive’s termination of employment. Any amounts due pursuant to this Section 7(a) (a “***Change in Control Payment***”) shall be paid in a lump sum subject to Section 8(a).
(b) Notwithstanding the foregoing, if all or any portion of the payments and benefits provided to an Executive under this Agreement, or any other payment or benefit (including under any plan or arrangement adopted in the future), would otherwise constitute “excess parachute payments” within the meaning of Section 280G of the Code (“***Payments***”), then the amount of such Payments shall be reduced to an amount that would result in there being no excess parachute payments; provided, however, that the foregoing reduction will be made only if and to the extent that such reduction would result in an increase in the aggregate Payments to be provided, determined on an after-tax basis (taking into account the excise tax imposed by Section 4999 of the Code (the “***Excise Tax***”), any tax imposed by any comparable provision of state law, and any applicable federal, state and local income and employment taxes). If any such reduction is necessary hereunder, cash payments shall be modified or reduced first, against the latest amounts otherwise payable, and then any other benefits on a prorated basis. Determination of whether the Payments would constitute an excess parachute payment, and the amount of reduction so that no excess parachute payments shall exist, shall be made, at the Employer’s expense, by the independent accounting firm employed by the Employer immediately prior to the occurrence of any Change in Control (the “***Determination Firm***”).
7
(c) This Agreement contains covenants of Executive to refrain from certain activities deemed harmful to the Employer for a set period of time in exchange for the promises contained herein. If Executive is deemed eligible to receive Payments under this Agreement that could be subject to the Excise Tax, the Employer shall seek a valuation from the Determination Firm to determine the value of the covenants contained in this Agreement and such amount shall be allocated to such arrangements and be excluded from treatment as a Payment.
8. General Provisions Applicable to Post-Termination Compensation.
(a) Release. In return for Severance or any other post-termination payments and benefits described in Sections 6 or 7 of this Agreement and the Release, Executive shall execute a full release and waiver acceptable to the Employer (the “***Release***”) of all known or unknown claims or causes of action Executive has, had, or may have against the Employer, its affiliates and all of the officers, employees, directors and agents of the Employer and its affiliates. Executive must execute such Release and the applicable revocation period required by law must expire, within sixty (60) days following Executive’s termination of employment (and again as to payments due as of a later Change in Control within sixty (60) days following the Change in Control). The Severance or any other post-termination payments and benefits described in Sections 6 or 7 of this Agreement that would have been made prior to such Release becoming effective and irrevocable shall be held and accumulated until the execution of said Release and the expiration of the revocation period without Executive having revoked the same. If the Release becomes effective and irrevocable within such sixty (60) days, all payments and reimbursements held and accumulated will be made within thirty (30) days after the Release becomes effective and irrevocable and the remaining payments and reimbursements will be made as otherwise specified. If Executive does not execute the Release and the Release does not become irrevocable before the sixtieth (60th) day after Executive’s termination of employment, Executive shall not receive Severance or any other post-termination payments and benefits described in Sections 6 or 7 of this Agreement. Notwithstanding the foregoing, if the period for the execution of said Release and the expiration of the revocation period without Executive having revoked the same spans more than one calendar year, all payments and reimbursements held and accumulated will not be made any earlier than the subsequent calendar year.
(b) Compliance with Protective Covenants. Notwithstanding anything to the contrary in this Agreement, in the event Executive fails or ceases to fully abide by all of the covenants contained in Section 10, or in the event any court of competent jurisdiction or arbitrator deems any such covenant(s) to be invalid or unenforceable as the result of a challenge by Executive, then Executive acknowledges and agrees that such circumstances shall constitute a failure of consideration and Executive shall not be entitled to Severance or any other post-termination payments or benefits pursuant to Sections 6 or 7 of this Agreement. If Executive has already received any such Severance or post-termination payments and benefits at the time he fails or ceases to fully abide by any such covenant or any court of competent jurisdiction or arbitrator deems any such covenant(s) to be invalid or unenforceable as the result of a challenge by Executive, the Employer shall immediately be entitled to recover all such gross amounts in full from Executive.
9. Regulatory Limitations
(a) If Executive is suspended and/or temporarily prohibited from participating in the conduct of the affairs of the Employer by a notice served under 12 U.S.C. Section 1818(e) or (g), the obligations of the Employer under this Agreement shall be suspended as of the date of service of such notice, unless stayed by appropriate proceedings.
8
(b) If Executive is removed and/or permanently prohibited from participating in the conduct of the affairs of the Employer by an order issued under 12 U.S.C. Section 1818(e) or (g), all obligations of the Employer under this Agreement shall terminate as of the effective date of the order, but vested rights of the Parties shall not be affected.
(c) Notwithstanding the timing for the payment of any Severance or other post-termination payments and benefits described in Sections 6 and 7, no such payments shall be made or commence, as applicable, that require the concurrence or consent of the appropriate federal banking agency of the Employer pursuant to 12 C.F.R. Section 359 prior to the receipt of such concurrence or consent. The Employer shall have the obligation to submit an application to make such payment to the appropriate federal banking agency within fifteen (15) business days of Executive’s right to such payment arising and shall provide a copy of such application to Executive. Any payments suspended by operation of this Section 9(c) shall be paid as a lump sum within thirty (30) days following receipt of the concurrence or consent of the appropriate federal banking agency of the Employer or as otherwise directed by such federal banking agency.
(d) All obligations under this Agreement are further subject to such conditions, restrictions, limitations and forfeiture provisions as may separately apply pursuant to any applicable state banking laws.
10. Protective Covenants. Executive shall abide by and be bound by the following Protective Covenants:
(a) Confidential Information and Trade Secrets. The Parties acknowledge that the Employer shall disclose during the Term, or has already disclosed, to Executive for use in Executive’s employment, and that during the Term, Executive will be provided access to and otherwise make use of, acquire, create, or add to certain valuable, unique, proprietary, and secret information of the Employer (whether tangible or intangible and whether or not electronically kept or stored), including financial statements, drawings, designs, manuals, business plans, processes, procedures, formulas, inventions, pricing policies, customer and prospect lists and contacts, contracts, sources and identity of vendors and contractors, financial information of customers of the Employer, and other proprietary documents, materials, or information indigenous to the Employer, relating to its businesses and activities, or the manner in which the Employer does business, which is valuable to the Employer in conducting its business because the information is kept confidential and is not generally known to the Employer’s competitors or to the general public (the “***Confidential Information***”). Confidential Information does not include information generally known or easily obtained from public sources or public records unless Executive causes the Confidential Information to become generally known or easily obtained from public sources or public records.
To the extent that the Confidential Information rises to the level of a trade secret under applicable law, then Executive shall, during Executive’s employment and for so long as the Confidential Information remains a trade secret under applicable law (or for the maximum period of time otherwise allowed by applicable law), (i) protect and maintain the confidentiality of such trade secrets and (ii) refrain from disclosing, copying, or using any such trade secrets, without the Employer’s prior written consent, except as necessary in Executive’s performance of Executive’s duties while employed with the Employer.
To the extent that the Confidential Information defined above does not rise to the level of a trade secret under applicable law, Executive shall, during Executive’s employment and for a period of eighteen (18) months following any voluntary or involuntary termination of employment, (i) protect and maintain the confidentiality of the Confidential Information and (ii) refrain from disclosing, copying, or using any Confidential Information without the Employer’s prior written consent, except as necessary in Executive’s performance of Executive’s duties while employed with the Employer.
9
(b) Return of Property of the Employer. Upon any voluntary or involuntary termination of Executive’s employment (or at any time upon request by the Employer), Executive agrees to immediately return to the Employer all property of the Employer (including, without limitation, all documents, electronic files, records, computer disks or other tangible or intangible things that may or may not relate to or otherwise comprise Confidential Information or trade secrets, as defined by applicable law) that Executive created, used, possessed or maintained while working for the Employer from whatever source and whenever created, including all reproductions or excerpts thereof. This provision does not apply to purely personal documents of Executive, but it does apply to business calendars, customer lists, contact information, computer programs, disks and their contents and like information that may contain some personal matters of Executive. Executive acknowledges that title to all such property is vested in the Employer.
(c) Non-Solicitation of Customers. During the Term and for a period of (i) twelve (12) months thereafter, or (ii) if any Change in Control Payment is paid to Executive pursuant to Section 7(a), eighteen (18) months thereafter, Executive agrees not to, directly or indirectly, in the Territory (as defined above), contact, solicit, divert, appropriate, or call upon, the customers of the Employer with whom Executive has had material contact during the most recent twelve (12) months, including prospects of the Employer with whom Executive had such contact during said most recent twelve (12) months (1) to solicit such customers or prospective customers for a Competitive Business as herein defined (including, without limitation, any Competitive Business started by Executive) or (2) to otherwise encourage any such customer to discontinue, reduce, or adversely alter the amount of its business with the Employer. Executive acknowledges that, due to Executive’s relationship with the Employer, Executive will develop, or has developed, special contacts and relationships with the Employer’s customers and prospective customers, and that it would be unfair and harmful to the Employer if Executive took advantage of these relationships.
(d) Non-Piracy of Employees. During the Term and for a period of (i) twelve (12) months thereafter, or (ii) if any Change in Control Payment is paid to Executive pursuant to Section 7(a), eighteen (18) months thereafter, Executive covenants and agrees that Executive shall not, directly or indirectly: (1) solicit, recruit, or hire (or attempt to solicit, recruit, or hire) or otherwise assist anyone in soliciting, recruiting, or hiring, any employee or independent contractor (which shall not include non-exclusive outside vendors) of the Employer who performed work for the Employer within the six (6) month period prior to the solicitation or who was otherwise engaged or employed with the Employer at the time of the termination of Executive’s employment with the Employer or (2) otherwise encourage, solicit, or support any such employees or independent contractors to leave their employment or engagement with the Employer, in either case until such employee or contractor has been terminated or separated from the Employer for at least twelve (12) months.
(e) Non-Compete. During the Term and for a period of (i) twelve (12) months thereafter, or (ii) if any Change in Control Payment is paid to Executive pursuant to Section 7(a), eighteen (18) months thereafter, Executive covenants and agrees that Executive shall not, directly or indirectly, compete with the Employer, as an officer, director, member, principal, partner, shareholder (other than a shareholder in a company that is publicly traded and so long as such ownership is less than five (5) percent), owner, manager, supervisor, administrator, employee, consultant, or independent contractor, by working in the Territory (as defined above) for or as a Competitive Business, in a capacity identical or substantially similar to the capacity in which Executive served at the Employer. Executive acknowledges that the Employer conducts its business within the Territory, that Executive will perform services for and on behalf of the Employer within the Territory, and that this Section 10(e) (and the definition of the Territory) is a reasonable limitation on Executive’s ability to compete with the Employer.
(f) Mutual Non-Disparagement. During the Term and for a period of twelve (12) months thereafter, the Employer agrees that it will not issue any statement (written or oral) that could reasonably be perceived as disparaging to Executive. During the Term and for a period of twelve (12) months thereafter, Executive agrees that he will not make any statement (written or oral) that could reasonably be perceived as disparaging to the Employer or any person or entity that he reasonably should know is an affiliate of the Employer.
10
(g) Acknowledgment. It is understood and agreed by Executive that the Parties have attempted to limit his right to compete only to the extent necessary to protect the Employer from unfair competition. It is acknowledged that the purpose of these covenants and promises is (and that they are necessary) to protect the Employer’s legitimate business interests, to protect the Employer’s investment in the overall development of its business and the good will of its customers, and to protect and retain (and to prevent Executive from unfairly and to the detriment of the Employer utilizing or taking advantage of) the business trade secrets and Confidential Information of the Employer and those substantial contacts and relationships (including those with customers and employees of the Employer) which Executive established due to his employment with the Employer. Therefore, in addition to any other remedies, Executive agrees that in the event that he breaches any of the covenants in Section 10 of this Agreement, no further amounts will be paid to Executive pursuant hereto, other than salary or benefits earned and accrued by Executive as of the date of any such breach. The Employer and Executive agree that all remedies available to the Employer or Executive, as applicable, shall be cumulative.
Executive acknowledges that these covenants and promises (and their respective time, geographic, and/or activity limitations) are reasonable and that said limitations are no greater than necessary to protect said legitimate business interests in light of Executive’s position with the Employer and the Employer’s business, and Executive agrees to strictly abide by the terms hereof.
If any provision of this Agreement is ruled invalid or unenforceable by a court of competent jurisdiction because of a conflict between the provision and any applicable law or public policy, the provision shall be redrawn to make the provision consistent with, and valid and enforceable under, the law or public policy.
(h) Notwithstanding anything in this Agreement to the contrary, (a) nothing in this Agreement, including but not limited to the Release, or other agreement prohibits Executive from reporting possible violations of law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress and any agency Inspector General (the “***Government Agencies***”), or communicating with Government Agencies or otherwise participating in any investigation or proceedings that may be conducted by Government Agencies, including providing documents or other information; (b) Executive does not need the prior authorization of the Employer to take any action described in (a), and Executive is not required to notify the Employer that he has taken any action described in (a); and (c) neither this Agreement nor the Release limits Executive’s right to receive an award for providing information relating to a possible securities law violation to the Securities and Exchange Commission. Further, notwithstanding the foregoing, Executive will not be held criminally or civilly liable under any federal, state or local trade secret law for the disclosure of a trade secret that (x) is made (i) in confidence to a federal, state or local official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (y) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Additionally, if Executive is suing the Employer for retaliation based on the reporting of a suspected violation of law, he may disclose a trade secret to his attorney and use the trade secret information in the court proceeding, so long as any document containing the trade secret is filed under seal and Executive does not disclose the trade secret except pursuant to court order.
(i) Injunctive Relief. The Employer or Executive shall have the right to apply to any appropriate court located in the State of Louisiana for injunctive relief with respect to the enforcement of the covenants and agreements set forth in this Section 10. This remedy shall be in addition to, and not in limitation of, any other rights or remedies to which the Employer or Executive are or may be entitled at law or in equity respecting this Agreement.
11
11. Section 409A. Executive and the Employer intend for all payments under this Agreement to be either outside the scope of Section 409A of the Code or to comply with its requirements as to timing of payments. Accordingly, to the extent applicable, this Agreement at all times is intended to be operated so as to be exempt from or in accordance with the requirements of Section 409A of the Code, as amended, and the regulations and rulings thereunder, including any applicable transition rules. The Employer shall have authority to take action, or refrain from taking any action, with respect to the payments and benefits under this Agreement that is reasonably necessary to be exempt from or comply with Section 409A. Notwithstanding the foregoing, however, in no event will the Employer be liable to Executive if this Agreement or any compensation payable hereunder fails to be exempt from or comply with Section 409A of the Code. Any payments that qualify for the “short-term deferral” exception or another exception under Section 409A of the Code shall be paid under the applicable exception (with the earliest amounts payable being deemed subject to the exception to the extent available). For purposes of the limitations on nonqualified deferred compensation under Section 409A of the Code, each payment of compensation under this Agreement shall be treated as a separate payment of compensation for purposes of applying the Section 409A of the Code. Notwithstanding anything in this Agreement to the contrary, if any amounts or benefits payable under this Agreement in the event of Executive’s termination of employment constitute “nonqualified deferred compensation” within the meaning of Code Section 409A, payment of such amounts and benefits shall commence when Executive incurs a “separation from service” within the meaning of Treasury Regulation 1.409A-1(h), without regard to any of the optional provisions thereunder, from the Employer and any entity that would be considered a single employer with the Employer under Code Section 414(b) or 414(c) as modified by the rules under Section 409A of the Code (a “***Separation from Service***”). Such payments or benefits shall be provided in accordance with the timing provisions of this Agreement by substituting the Agreement’s references to “termination of employment” or “termination” with Separation from Service. In addition, if at the time of Executive’s Separation from Service Executive is a “specified employee” within the meaning of Code Section 409A(a)(2)(B)(i), any amount or benefits that the constitutes “nonqualified deferred compensation” within the meaning of Code Section 409A that becomes payable to Executive on account of Executive’s Separation from Service will not be paid until after the earlier of (i) the first business day of the seventh (7th) month following Executive’s Separation from Service, or (ii) the date of Executive’s death (the “***409A Suspension Period***”) to the extent required to comply with Section 409A of the Code. After the end of the 409A Suspension Period, Executive shall be paid a cash lump sum payment equal to any payments (including interest on any such payments, at an interest rate of not less than the prime interest rate, as published in the Wall Street Journal, over the period such payment is restricted from being paid to Executive) and benefits that the Employer would otherwise have been required to provide under this Agreement but for the imposition of the 409A Suspension Period. Thereafter, Executive shall receive any remaining payments and benefits due under this Agreement in accordance with the terms of Section 6(d) or Section 7(a), as applicable (as if there had not been any 409A Suspension Period beforehand). To the extent not otherwise specified in this Agreement, all (A) reimbursements and (B) in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (1) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement); (2) the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in any other calendar year; (3) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred; and (4) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit.
12. General Provisions.
(a) Modification and Waiver. This Agreement may not be modified or amended except by an instrument in writing, signed by the Parties, and which specifically refers to this Agreement. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the Party charged with such waiver or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.
12
(b) Nonassignability. Neither this Agreement nor any right or interest hereunder shall be assignable by Executive, his beneficiaries or legal representatives, without the prior written consent of the Employer, provided, however, that nothing herein shall preclude (i) Executive from designating a beneficiary to receive any benefits payable hereunder upon his death, or (ii) the executors, administrators, or other legal representatives of Executive or his estate from assigning any rights hereunder to the person or persons entitled thereto. The Employer may assign this Agreement without the consent of Executive.
(c) Binding Agreement. This Agreement shall be binding upon, and inure to the benefit of, the Employer and Executive and their respective heirs, successors, assigns, and legal representatives.
(d) No Bar. Executive acknowledges and agrees that the existence of any claim or cause of action against the Employer shall not constitute a defense to the enforcement by the Employer of Executive’s covenants, obligations, or undertakings in this Agreement.
(e) No Conflicting Obligations. Executive hereby acknowledges and represents by his execution of this Agreement that he will not perform, except upon the Employer’s written request, employment-related obligations and duties for the Employer that would cause a breach, default, or violation of any other employment, nondisclosure, confidentiality, non-competition, or other agreement to which Executive may be a party or otherwise bound. Moreover, Executive hereby agrees that he will not use in the performance of such employment-related obligations and duties for the Employer or otherwise disclose to the Employer, except upon the Employer’s written request, any trade secrets or confidential information of any person or entity (including any former employer) if and to the extent that such use or disclosure may cause a breach or violation of any obligation or duty owed to such employer, person, or entity under any agreement or applicable law.
(f) Mediation. Except with respect to Section 10 above if any dispute arises out of or relates to this Agreement, or a breach thereof, and if the dispute cannot be settled through direct discussions between the Parties, the Parties agree to first endeavor to settle the dispute in an amicable manner by mediation under the Commercial Mediation Rules of the American Arbitration Association before resorting to any other process for resolving the dispute.
(g) Indemnification. To the fullest extent permitted by law, the Employer shall indemnify Executive with respect to any actions, proceedings, investigations, or inquiries (collectively, “***Actions***”) commenced against or relating to Executive in his capacity as an officer, director, executive, agent or fiduciary or former officer, director, executive, agent or fiduciary of the Employer, or any affiliate thereof, for which Executive may render service in such capacity, whether by or on behalf of the Employer, its shareholders, or other third parties, including, without limitation, any governmental agent or entity, and the Employer shall advance to Executive on a timely basis an amount equal to the reasonable fees and expenses incurred in defending such Actions, after receipt of an itemized request for such advance, and an undertaking from Executive to repay the amount of such advance, with interest at a reasonable rate from the date of the request, as determined by the Employer, if it shall ultimately be determined that Executive is not entitled (as a matter of law or by judicial determination) to be indemnified against such expenses. This indemnity shall survive any termination of employment under this Agreement and is in addition to and not in limitation of any other right to indemnification or exoneration to which Executive is entitled at law, or under the governing organizational documents and/or policies of the Employer. The Employer agrees to use its best efforts to secure and maintain officers’ and directors’ liability insurance, including coverage for Executive on terms similar to those provided to other senior executives.
13
(h) Legal Fees. If, after a Change in Control, (a) the Employer has failed to comply with any of its obligations under this Agreement, or (b) the Employer or any other person (other than Executive) has taken any action to declare this Agreement void or unenforceable, or instituted any litigation or other legal action designed to deny, diminish, or to recover from Executive the benefits intended to be provided to Executive hereunder (including any payment pursuant to Section 6(d) and/or Section 7 of this Agreement), the Employer irrevocably authorizes Executive from time to time to retain counsel of his choice, at the Employer’s expense, to represent Executive in connection with the initiation or defense of any litigation or other legal action, whether by or against the Employer or any of its affiliated companies or any director, officer, shareholder, or other person affiliated with the Employer. The fees and expenses of counsel selected from time to time by Executive as provided in this Section 12(h) shall be paid or reimbursed to Executive by the Employer, whether suit or an arbitration proceeding has been brought or not. The Employer’s obligation to pay Executive’s legal fees provided by this Section 12(h) operates separately from and in addition to any legal fee reimbursement obligation the Employer has with Executive under any separate severance or other agreement.
(i) Severability. If for any reason any provision of this Agreement is held invalid, the Parties agree that the court or arbitrator shall modify the provision(s) (or subpart(s) thereof) to make the provision(s) (or subpart(s) thereof) and this Agreement valid and enforceable. Any invalid provision shall not affect any other provision of this Agreement not held invalid, and each such other provision shall, to the full extent consistent with law, continue in full force and effect. If any provision of this Agreement shall be held invalid in part, such invalidity shall in no way affect the rest of such provision not held so invalid, and the rest of such provision, together with all other provisions of this Agreement, shall to the full extent, consistent with law, continue in full force and effect.
(j) Governing Law. This Agreement has been executed under seal and delivered in the State of Louisiana, and its validity, interpretation, performance, and enforcement shall be governed by the laws of the State of Louisiana, without reference to its rules of conflicts of laws. Further, Louisiana law shall apply to the merits of any dispute or claim in arbitration, without reference to its rules of conflicts of law.
(k) Rights of Third Parties. Nothing herein expressed or implied is intended to or shall be construed to confer upon or give to any person, firm, or other entity, other than the Parties and their permitted assigns, any rights or remedies under or by reason of this Agreement.
(l) Notices. All notices, requests, demands, and other communications provided for by this Agreement shall be in writing and shall be sufficiently given if and when mailed in the United States by registered or certified mail, or personally delivered, to the Party entitled thereto at the address stated below or to such changed address as the addressee may have given by a similar notice:
To the Employer: Investar Bank, National Association
10500 Coursey Boulevard
Baton Rouge, Louisiana 70816
Attention: CEO
To Executive: Jeffrey W. Martin
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
(m) Counterpart Signatures. This Agreement may be executed in counterparts or by facsimile signature, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.
[Signatures on next page]
14
**IN WITNESS WHEREOF**, the Parties have executed this Agreement as of the date first written above.
**INVESTAR BANK, NATIONAL ASSOCIATION**
By: /s/ John J. D'Angelo
Name: John J. D’Angelo
Title: President and Chief Executive Officer
**EXECUTIVE**:
By: /s/ Jeffrey W. Martin
Name: Jeffrey W. Martin
15
---
## EXHIBIT 10.3
SEC source: [ex_989498.htm](https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/ex_989498.htm)
**Exhibit 10.3**
**INVESTAR BANK**
**Salary Continuation Agreement**
This **Salary Continuation Agreement** (this “Agreement”) is entered into as of this 17th day of July, 2026, by and between Investar Bank (the “Bank”) and Linda Crochet (the “Executive”).
**Whereas**, the Executive has contributed substantially to the success of the Bank and the Bank desires that the Executive continue in its employ,
**Whereas**, to encourage the Executive to remain an employee, the Bank is willing to provide to the Executive salary continuation benefits payable from the Bank’s general assets,
**Whereas**, none of the conditions or events included in the definition of the term “golden parachute payment” that is set forth in section 18(k)(4)(A)(ii) of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] currently exists or, to the best knowledge of the Bank, is contemplated insofar as the Bank is concerned, and
**Whereas**, the parties hereto intend this Agreement to be an unfunded arrangement maintained primarily to provide supplemental retirement benefits for the Executive (who is a key employee and member of a select group of management), and to be considered a top hat plan for purposes of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Executive is fully advised of the Bank’s financial status.
**Now Therefore**, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows.
**Article 1**
**Definitions**
**1.1** “**Accrual Balance**” means the liability that should be accrued by the Bank under generally accepted accounting principles (“GAAP”) for the Bank’s obligation to the Executive under this Agreement, applying Financial Accounting Standards Board ASC 710-10-30 (formerly known as Accounting Principles Board Opinion No. 12, as amended by Statement of Financial Accounting Standards No. 106), and the calculation method and discount rate specified hereinafter. The Accrual Balance shall be calculated such that when it is credited with interest each month the Accrual Balance at Normal Retirement Age equals the present value of the normal retirement benefits. The discount rate means the rate used by the Plan Administrator for determining the Accrual Balance. In its sole discretion the Plan Administrator may adjust the discount rate to maintain the rate within reasonable standards according to GAAP.
**1.2** “**Affiliate**” means the Bank and any other corporation or other form of entity of which the Company owns, from time to time, directly or indirectly, at least 80% of the total combined voting power of all classes of stock or other equity interests
**1.3** “**Beneficiary**” means each designated person, or the estate of the deceased Executive, entitled to benefits, if any, upon the death of the Executive, determined according to Article 4.
**1.4** “**Beneficiary Designation Form**” means the form established from time to time by the Plan Administrator that the Executive completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries.
**1.5** “**Change in Control**” means, and shall be deemed to occur, upon the consummation of a Change in Equity Ownership, a Change in Effective Control, a Change in the Ownership of Assets or a Change by Merger. For this purpose:
(a) A “Change in Equity Ownership” means that a person or group acquires, directly or indirectly in accordance with Code Section 318, more than 50% of the aggregate fair market value or voting power of the capital stock of the Company, including for this purpose capital stock previously acquired by such person or group; provided, however, that once any person or group acquires more than 50% of the aggregate fair market value or voting power of the Company’s capital stock, additional acquisitions by such person or group shall not be deemed to constitute an additional Change in Control hereunder.
(b) A “Change in Effective Control” means that a majority of the members of the Board of Directors of the Company is replaced during any 12-month period, whether by appointment or election, without endorsement by a majority of the members of the Board of Directors of the Company then serving prior to the date of such appointment or election.
(c) A “Change in the Ownership of Assets” means that any person or group acquires, or has acquired in a series of transactions during the immediately preceding 12-month period ending on the date of the most recent acquisition, all or substantially all of the assets of the Company.
(d) A “Change by Merger” means that the Company shall consummate a merger or consolidation or similar transaction with another corporation or entity, unless as a result of such transaction, more than 50% of the then outstanding voting securities of the surviving or resulting corporation or entity shall be owned in the aggregate by the former shareholders of the Company, and the voting securities of the surviving or resulting corporation or entity are owned in substantially the same proportion as the common stock of the Company was beneficially owned before such transaction.
Notwithstanding the above, a Change in Control shall occur for purposes of this Agreement only if such event also constitutes a “change in the ownership,” “change in effective control,” and/or a “change in the ownership of a substantial portion of assets” of the Company as those terms are defined under Treasury Regulation §1.409A-3(i)(5).
**1.6** “**Code**” means the Internal Revenue Code of 1986, as amended, and rules, regulations, and guidance of general application issued by the Department of the Treasury under the Internal Revenue Code of 1986, as amended.
**1.7** “**Committee**” means the Compensation Committee of the Board of Directors of the Company.
**1.8** “**Company**” means Investar Holding Corporation, a Louisiana corporation and parent of the Bank.
**1.9** “**Disability**” means, because of a medically determinable physical or mental impairment that can be expected to result in death or that can be expected to last for a continuous period of at least 12 months, (a) the Executive is unable to engage in any substantial gainful activity, or (b) the Executive is receiving income replacement benefits for a period of at least three months under an accident and health plan of the employer. Medical determination of disability may be made either by the Social Security Administration or by the provider of an accident or health plan covering employees of the Bank. Upon request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of the Social Security Administration’s or provider’s determination.
**1.10** “**Early Termination**” means Separation from Service before Normal Retirement Age for reasons other than death, Disability, or Termination with Cause.
**1.11** “**Effective Date**” means July 17, 2026.
**1.12** “**Normal Retirement Age**” means age 68.
**1.13** “**Plan Administrator**” or “**Administrator**” means the plan administrator described in Article 7.
**1.14** “**Plan Year**” means a twelve-month period commencing on January 1 and ending on December 31 of each year. The initial Plan Year shall commence on the effective date of this Agreement.
**1.15** “**Separation from Service**” means separation from service as defined in Internal Revenue Code section 409A and rules, regulations, and guidance of general application thereunder issued by the Department of the Treasury, including termination for any reason of the Executive’s service as an executive and independent contractor to the Bank and any member of a controlled group, as defined in Code section 414, other than because of a leave of absence approved by the Bank or the Executive’s death. For purposes of this Agreement, if there is a dispute about the employment status of the Executive or the date of the Executive’s Separation from Service, the Bank shall have the sole and absolute right to decide the dispute unless a Change in Control shall have occurred.
**1.16** “**Termination with Cause**” and “**Cause**” shall have the same meaning specified in any effective employment or similar agreement between the Executive and the Company or the Bank. If no such agreement exists containing a definition of termination with cause, Termination with Cause means the Company or the Bank terminates the Executive’s employment because the Executive has:
(a) Committed an intentional act of fraud, embezzlement or theft in the course of employment or otherwise engaged in any intentional misconduct which is materially injurious to the financial condition or business reputation of the Company or its Affiliates;
(b) Committed intentional damage to the property of the Company and its Affiliates or committed intentional wrongful disclosure of proprietary information or confidential information, which is materially injurious to the financial condition or business reputation of the Company or its Affiliates;
(c) Been convicted with no further possibility of appeal, or entered a guilty or nolo contendere plea, for a felony or a crime involving moral turpitude;
(d) Willfully and substantially refused to perform the essential duties of her position after written notice from the Company; or
(e) Intentionally, recklessly or negligently violated any material provision of any code of conduct or ethics or equivalent code or policy of the Company or the Bank that is applicable to the Executive.
The Committee, in its discretion, shall determine whether any Separation from Service is on account of Cause as defined herein, provided that no act or failure to act will be deemed “intentional” if it is due primarily to an error in judgment, but will be deemed “intentional” only if done or omitted to be done by the Executive not in good faith and without reasonable belief that her action or omission was in the best interest of the Company or an Affiliate.
**1.17** “**Voluntary Termination with Good Reason**” means a voluntary Separation from Service by the Executive within 24 months after a Change in Control if the following conditions (a) and (b) are satisfied:
(a) The Executive shall have “Good Reason” to separate from service if any of the following occur without the Executive’s advance written consent within 24 months after a Change in Control –
(i) a material diminution of the Executive’s base salary,
(ii) a material diminution of the Executive’s authority, duties, or responsibilities,
(iii) a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Executive is required to report,
(iv) a material diminution in the budget over which the Executive retains authority,
(v) a material change in the geographic location at which the Executive must perform services for the Bank, or
(vi) any other action or inaction that constitutes a material breach by the Bank of the agreement under which the Executive provides services to the Bank.
(b) The Executive must give notice to the Bank of the existence of one or more of the conditions described in clause (a) within 90 days after the initial existence of the condition, and the Bank has 30 days thereafter to remedy the condition. In addition, the Executive’s voluntary termination because of the existence of one or more of the conditions described in clause (a) must occur within 24 months after the earlier of the initial existence of the condition or the Change in Control.
**Article 2**
**Lifetime Benefits**
**2.1** **Normal Retirement Age**. Unless Separation from Service occurs before Normal Retirement Age, when the Executive attains Normal Retirement Age the Bank shall pay to the Executive the benefit described in this section 2.1 instead of any other benefit under this Agreement. If the Executive’s Separation from Service thereafter is a Termination with Cause or if this Agreement terminates under Article 5, no further benefits shall be paid.
**2.1.1** *Amount of benefit*. The annual benefit under this section 2.1 is $100,000.
**2.1.2** *Payment of benefit*. Beginning with the month immediately after the month in which the Executive attains Normal Retirement Age, the Bank shall pay the annual benefit to the Executive in equal monthly installments on the first day of each month. The annual benefit shall be paid to the Executive for 10 years.
**2.2** **Early Termination Benefit**. Unless section 2.4 applies, upon Early Termination the Bank shall pay to the Executive the benefit described in this section 2.2 instead of any other benefit under this Agreement. No benefit is payable under this Agreement if the Executive’s employment terminates with Cause or if this Agreement terminates under Article 5. Neither the Bank nor the Executive may elect in the 24-month period after a Change in Control between the benefit under this section 2.2 versus the benefit under section 2.4. If the Executive’s Separation from Service within 24 months after a Change in Control is an involuntary termination without Cause or a Voluntary Termination with Good Reason, no benefit is payable under this section 2.2 and the Executive is instead entitled to the benefit under section 2.4 or, if the Executive first attained Normal Retirement Age, section 2.1.
**2.2.1** *Amount of benefit*. The annual benefit under this section 2.2 is calculated as the amount that fully amortizes the Accrual Balance existing at the end of the month immediately before the month in which Separation from Service occurs, amortizing that Accrual Balance over 10 years and taking into account interest at the discount rate or rates established by the Plan Administrator.
**2.2.2** *Payment of benefit*. Beginning the month immediately after the month in which the Executive attains Normal Retirement Age, the Bank shall pay the benefit under this section 2.2 to the Executive in equal monthly installments on the first day of each month. The benefit shall be paid to the Executive for 10 years.
**2.3** **Disability Benefit**. For Separation from Service because of Disability before Normal Retirement Age, the Bank will pay to the Executive the benefit described in this section 2.3 instead of any other benefit under this Agreement.
**2.3.1** *Amount of benefit*. The annual benefit under this section 2.3 is calculated as the amount that fully amortizes the Accrual Balance existing at the end of the month immediately before the month in which Separation from Service occurs, amortizing that Accrual Balance over 10 years and taking into account interest at the discount rate or rates established by the Plan Administrator.
**2.3.2** *Payment of benefit*. Beginning the month immediately after the month in which the Executive attains Normal Retirement Age, the Bank shall pay the benefit under this section 2.3 to the Executive in equal monthly installments on the first day of each month. The benefit shall be paid to the Executive for 10 years.
**2.4** **Change in Control**. If the Executive’s Separation from Service occurs before Normal Retirement Age, and such Separation from Service is an involuntary termination without Cause or a Voluntary Termination with Good Reason, in either case within 24 months after a Change in Control, the Bank will pay to the Executive the benefit described in this section 2.4 instead of any other benefit under this Agreement. No benefit is payable under this Agreement if the Executive’s employment terminates with Cause or if this Agreement terminates under Article 5. Neither the Bank nor the Executive may elect in the 24-month period after a Change in Control between the benefit under this section 2.4 versus the Early Termination benefit under section 2.2. If the Executive’s Separation from Service within 24 months after a Change in Control is an involuntary termination without Cause or a Voluntary Termination with Good Reason, no benefit is payable under section 2.2 and the Executive is instead entitled to the benefit under this section 2.4. But if the Executive has attained Normal Retirement Age when Separation from Service within 24 months after a Change in Control occurs, whether Separation from Service is voluntary or involuntary for any reason other than Termination with Cause, the Executive is entitled solely to the benefit provided by section 2.1, not this section 2.4.
**2.4.1** *Amount of benefit*. The benefit under this section 2.4 is the greater of the Accrual Balance required to be maintained by the Bank on the date on which the Executive’s Separation from Service occurs or $200,000.
**2.4.2** *Payment of benefit*. The Bank will pay the benefit under this section 2.4 to the Executive in a single lump sum on the date of the Executive’s Separation from Service, except as otherwise required under section 2.7.
**2.5** **Lump-Sum Payout of Remaining Normal Retirement Benefit, Early Termination Benefit, or Disability Benefit When a Change in Control Occurs**. If a Change in Control occurs while the Executive is receiving the Normal Retirement Age benefit under section 2.1, the Bank shall pay the remaining salary continuation benefits to the Executive in a single lump sum on the day of the Change in Control. If a Change in Control occurs after Separation from Service but while the Executive is receiving or is entitled to receive the Early Termination benefit under section 2.2 or the Disability benefit under section 2.3, the Bank shall pay the remaining salary continuation benefits to the Executive in a single lump sum three days after the Change in Control. The lump-sum payment due to the Executive as a result of a Change in Control shall be an amount equal to the Accrual Balance amount corresponding to the particular benefit when the Change in Control occurs, or the vested Accrual Balance if the Executive is receiving or entitled at Normal Retirement Age to receive the benefit under section 2.2.
**2.6** **Annual Benefit Statement**. Within 120 days after the end of each Plan Year, the Plan Administrator shall provide or cause to be provided to the Executive an annual benefit statement showing benefits payable or potentially payable to the Executive under this Agreement. Each annual benefit statement shall supersede the previous year’s annual benefit statement. If there is a contradiction between this Agreement and the annual benefit statement concerning the amount of a particular benefit payable or potentially payable to the Executive under sections 2.2, 2.3, or 2.4 hereof, the amount of the benefit determined under this Agreement shall control.
**2.7** **Savings Clause Relating to Compliance with Code Section 409A**. The Agreement is intended to comply with Code Section 409A and official guidance issued thereunder. Notwithstanding anything to the contrary, this Agreement shall be interpreted, operated and administered in a manner consistent with this intention. If any provision of this Agreement would subject the Executive to additional tax or interest under Code Section 409A, the Bank shall reform the provision. However, the Bank shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Executive to additional tax or interest, and the Bank shall not be required to incur any additional compensation expense as a result of the reformed provision. Notwithstanding any other provision of this Agreement, if any payment hereunder is triggered by the Executive’s Separation from Service and the Executive is determined to be a "specified employee" as defined in Code Section 409A(a)(2)(b)(i), then such payment shall not be paid until the first day of the seventh month after the month in which the Executive’s Separation from Service occurs or, if earlier, on the Executive's death (the "Specified Employee Payment Date"). The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date and interest on such amounts calculated based on the applicable federal rate published by the Internal Revenue Service for the month in which the Executive's Separation from Service occurs shall be paid to the Executive in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.
**2.8** **One Benefit Only**. Despite anything to the contrary in this Agreement, the Executive and Beneficiary are entitled to one benefit only under this Agreement, which shall be determined by the first event to occur that is dealt with by this Agreement. Except as provided in section 2.5 or Article 3, subsequent occurrence of events dealt with by this Agreement shall not entitle the Executive or Beneficiary to other or additional benefits under this Agreement.
**Article 3**
**Death Benefits**
**3.1** **Death Before Separation from Service**. If the Executive dies before Separation from Service, at the Executive’s death the Executive’s Beneficiary shall be entitled to no benefits whatsoever under this Agreement.
**3.2** **Death after Separation from Service**. If the Executive dies after Separation from Service, if Separation from Service was not a Termination with Cause, and if at death the Executive was receiving the benefit under section 2.1 or was receiving or was entitled at Normal Retirement Age to receive the benefit under sections 2.2 or 2.3, at the Executive’s death the Executive’s Beneficiary shall be entitled to an amount in cash equal to the Accrual Balance remaining at the Executive’s death, unless the Change-in-Control benefit shall have been paid to the Executive under section 2.4 or unless a Change-in-Control payout shall have occurred under section 2.5. No benefit shall be paid under this Article 3 after the Change-in-Control benefit is paid under section 2.4 or after a Change-in-Control payout occurs under section 2.5. If a benefit is payable to the Executive’s Beneficiary, the benefit shall be paid in a single lump sum 90 days after the Executive’s death. However, no benefits under this Agreement shall be paid or payable to the Executive or the Executive’s Beneficiary if this Agreement is terminated under Article 5.
**Article 4**
**Beneficiaries**
**4.1** **Beneficiary Designations**. The Executive shall have the right to designate at any time a Beneficiary to receive any benefits payable under this Agreement after the Executive’s death. The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designation under any other benefit plan of the Bank in which the Executive participates.
**4.2** **Beneficiary Designation: Change**. The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent. The Executive’s Beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall have the right to change a Beneficiary by completing, signing, and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures, as in effect from time to time. Upon acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator before the Executive’s death.
**4.3** **Acknowledgment**. No designation or change in designation of a Beneficiary shall be effective until received, accepted, and acknowledged in writing by the Plan Administrator or its designated agent.
**4.4** **No Beneficiary Designation**. If the Executive dies without a valid beneficiary designation or if all designated Beneficiaries predecease the Executive, the Executive’s spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, the benefits shall be made to the personal representative of the Executive’s estate.
**4.5** **Facility of Payment**. If a benefit is payable to a minor, to a person declared incapacitated, or to a person incapable of handling the disposition of his or her property, the Bank may pay the benefit to the guardian, legal representative, or person having the care or custody of the minor, incapacitated person, or incapable person. The Bank may require proof of incapacity, minority, or guardianship as it may deem appropriate before distribution of the benefit. Distribution shall completely discharge the Bank from all liability for the benefit.
**Article 5**
**General Limitations**
**5.1** **Termination with Cause**. Despite any contrary provision of this Agreement, the Bank will not pay any benefit under this Agreement and this Agreement terminates if Separation from Service is a Termination with Cause.
**5.2** **Removal**. If the Executive is removed from office or permanently prohibited from participating in the Bank’s affairs by an order issued under section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), all obligations of the Bank under this Agreement shall terminate as of the effective date of the order, and the Split Dollar Life Insurance Agreement and Endorsement between the Executive and the Bank dated as of the date hereof also shall terminate as of the effective date of the order.
**5.3** **Default**. Despite any contrary provision of this Agreement, if the Bank is in “default” or “in danger of default,” as those terms are defined in section 3(x) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(x), all obligations under this Agreement shall terminate.
**5.4** **FDIC Open-Bank Assistance**. All obligations under this Agreement shall terminate, except to the extent determined that continuation of the contract is necessary for the continued operation of the Bank, if the Federal Deposit Insurance Corporation enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in section 13(c) of the Federal Deposit Insurance Act. 12 U.S.C. 1823(c). Any rights of the parties that have already vested shall not be affected by such action, however.
**Article 6**
**Claims and Review Procedures**
**6.1** **Claims Procedure**. The Bank will notify any person or entity that makes a claim for benefits under this Agreement (the “Claimant”) in writing, within 90 days after receiving Claimant’s written application for benefits, of his or her eligibility or noneligibility for benefits under the Agreement. If the Plan Administrator determines that the Claimant is not eligible for benefits or full benefits, the notice will state (a) the specific reasons for denial, (b) a specific reference to the provisions of the Agreement on which the denial is based, (c) a description of any additional information or material necessary for the Claimant to perfect his or her claim, and a description of why it is needed, and (d) an explanation of the Agreement’s claims review procedure and other appropriate information concerning steps to be taken if the Claimant wishes to have the claim reviewed. If the Plan Administrator determines that there are special circumstances requiring additional time to make a decision, the Bank will notify the Claimant of the special circumstances and the date by which a decision is expected to be made, and may extend the time for up to an additional 90 days.
**6.2** **Review Procedure**. If the Claimant is determined by the Plan Administrator not to be eligible for benefits, or if the Claimant believes that he or she is entitled to greater or different benefits, the Claimant will have the opportunity to have his or her claim reviewed by the Bank by filing a petition for review with the Bank within 60 days after receipt of the notice issued by the Bank. The Claimant’s petition must state the specific reasons the Claimant believes entitle him or her to benefits or to greater or different benefits. Within 60 days after receipt by the Bank of the petition, the Plan Administrator will give the Claimant (and counsel, if any) an opportunity to present his or her position verbally or in writing, and the Claimant (or counsel) will have the right to review the pertinent documents. The Plan Administrator will notify the Claimant of the Plan Administrator’s decision in writing within the 60-day period, stating specifically the basis of its decision, written in a manner to be understood by the Claimant, and the specific provisions of the Agreement on which the decision is based. If, because of the need for a hearing, the 60-day period is not sufficient, the decision may be deferred for up to another 60 days at the election of the Plan Administrator, but notice of this deferral will be given to the Claimant.
**Article 7**
**Administration of Agreement**
**7.1** **Plan Administrator Duties**. This Agreement shall be administered by a Plan Administrator consisting of the Board of Directors of Investar Holding Corporation (the “Board”) or such committee thereof or person as the Board shall appoint. The Executive may not be a member of the Plan Administrator. The Plan Administrator shall have the discretion and authority to (a) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Agreement and (b) decide or resolve any and all questions that may arise, including interpretations of this Agreement.
**7.2** **Agents**. In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel, who may be counsel to the Bank.
**7.3** **Binding Effect of Decisions**. The decision or action of the Plan Administrator about any question arising out of the administration, interpretation, and application of the Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Agreement. No Executive or Beneficiary shall be deemed to have any right, vested or nonvested, regarding the continued use of any previously adopted assumptions, including but not limited to the discount rate and calculation method employed in the determination of the Accrual Balance.
**7.4** **Indemnity of Plan Administrator**. The Bank shall indemnify and hold harmless the members of the Plan Administrator against any and all claims, losses, damages, expenses, or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator or any of its members.
**7.5** **Bank Information**. To enable the Plan Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the retirement, Disability, death, or Separation from Service of the Executive, and such other pertinent information as the Plan Administrator may reasonably require.
**Article 8**
**Miscellaneous**
**8.1** **Amendments and Termination**. This Agreement may be amended solely by a written agreement signed by the Bank and by the Executive. This Agreement may be terminated by the Board or a subcommittee thereof without the Executive’s consent. Unless Article 5 provides that the Executive is not entitled to payment, the Bank must pay the Accrual Balance in a single lump sum to the Executive if the Bank Terminates this Agreement but only if the termination and payment are carried out consistent with the terms of the Code Section 409A plan-termination exceptions to the prohibition against accelerated payment [Rule 1.409A-3(j)(4)(ix)]. Consistent with Code section 409A, the lump-sum termination payment will be made to the Executive on the first day of the thirteenth month after the month in which the Bank terminates this Agreement.
**8.2** **Binding Effect**. This Agreement shall bind the Executive and the Bank and their beneficiaries, survivors, executors, successors, administrators, and transferees.
**8.3** **No Guarantee of Employment**. This Agreement is not an employment policy or contract. It does not give the Executive the right to remain an employee of the Bank nor does it interfere with the Bank’s right to discharge the Executive. It also does not require the Executive to remain an employee or interfere with the Executive’s right to terminate employment at any time.
**8.4** **Non-Transferability**. Benefits under this Agreement may not be sold, transferred, assigned, pledged, attached, or encumbered.
**8.5** **Successors; Binding Agreement**. By an assumption agreement in form and substance satisfactory to the Executive, the Bank shall require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the Bank’s business or assets to expressly assume and agree to perform this Agreement in the same manner and to the same extent the Bank would be required to perform this Agreement had no succession occurred.
**8.6** **Tax Withholding**. The Bank shall withhold any taxes that are required to be withheld from the benefits provided under this Agreement.
**8.7** **Applicable Law**. The Agreement and all rights hereunder shall be governed by the laws of the State of Louisiana, except to the extent preempted by the laws of the United States of America.
**8.8** **Unfunded Arrangement**. The Executive and Beneficiary are general unsecured creditors of the Bank for the payment of benefits under this Agreement. The benefits represent the mere promise by the Bank to pay benefits. The rights to benefits are not subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance on the Executive’s life is a general asset of the Bank to which the Executive and Beneficiary have no preferred or secured claim.
**8.9** **Entire Agreement**. This Agreement constitutes the entire agreement between the Bank and the Executive concerning the subject matter. No rights are granted to the Executive under this Agreement other than those specifically set forth.
**8.10** **Severability**. If any provision of this Agreement is held invalid, such invalidity shall not affect any other provision of this Agreement not held invalid, and to the full extent consistent with law each such other provision shall continue in full force and effect. If any provision of this Agreement is held invalid in part, such invalidity shall not affect the remainder of such provision not held invalid, and to the full extent consistent with law the remainder of such provision, together with all other provisions of this Agreement, shall continue in full force and effect.
**8.11** **Headings**. Headings are included herein solely for convenience of reference and shall not affect the meaning or interpretation of any provision of this Agreement.
**8.12** **Notices**. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid, to the following addresses or to such other address as either party may designate by like notice. If to the Bank, notice shall be given to the Board of Directors, Investar Holding Corporation, 10500 Coursey Boulevard, Baton Rouge, LA 70816, or to such other or additional person or persons as the Bank shall have designated to the Executive in writing. If to the Executive, notice shall be given to the Executive at the Executive’s address appearing on the Bank’s records, or to such other or additional person or persons as the Executive shall have designated to the Bank in writing.
**In Witness Whereof**, the Executive and a duly authorized Bank officer have executed this Salary Continuation Agreement as of the date first written above.
- **Executive:** **Bank:**
- Linda Crochet **Investar Bank**
- /s/ Linda Crochet By: /s/ John J. D’Angelo
- Title: President and Chief Executive Officer
**Beneficiary Designation**
**Investar Bank**
**Salary Continuation Agreement**
**Investar Bank**
I designate the following as beneficiary of any death benefits under this Salary Continuation Agreement:
Primary:
Contingent:
**Note:** **To name a trust as beneficiary, please provide the name of the trustee(s) and the** **exact** **name and date of the trust agreement.**
I understand that I may change these beneficiary designations by filing a new written designation with the Bank. I further understand that the designations will be automatically revoked if the beneficiary predeceases me, or, if I have named my spouse as beneficiary and our marriage is subsequently dissolved.
- Signature:
- Date: , 20____
- Accepted by the Bank this ____ day of ________________ , 20____
- By:
- Title:
---
## EXHIBIT 10.4
SEC source: [ex_989499.htm](https://www.sec.gov/Archives/edgar/data/1602658/000143774926026348/ex_989499.htm)
**Exhibit 10.4**
**INVESTAR BANK**
**Salary Continuation Agreement**
This **Salary Continuation Agreement** (this “Agreement”) is entered into as of this 17th day of July, 2026, by and between Investar Bank (the “Bank”) and Jeffrey W. Martin (the “Executive”).
**Whereas**, the Executive has contributed substantially to the success of the Bank and the Bank desires that the Executive continue in its employ,
**Whereas**, to encourage the Executive to remain an employee, the Bank is willing to provide to the Executive salary continuation benefits payable from the Bank’s general assets,
**Whereas**, none of the conditions or events included in the definition of the term “golden parachute payment” that is set forth in section 18(k)(4)(A)(ii) of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] currently exists or, to the best knowledge of the Bank, is contemplated insofar as the Bank is concerned, and
**Whereas**, the parties hereto intend this Agreement to be an unfunded arrangement maintained primarily to provide supplemental retirement benefits for the Executive (who is a key employee and member of a select group of management), and to be considered a top hat plan for purposes of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Executive is fully advised of the Bank’s financial status.
**Now Therefore**, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows.
**Article 1**
**Definitions**
**1.1** “**Accrual Balance**” means the liability that should be accrued by the Bank under generally accepted accounting principles (“GAAP”) for the Bank’s obligation to the Executive under this Agreement, applying Financial Accounting Standards Board ASC 710-10-30 (formerly known as Accounting Principles Board Opinion No. 12, as amended by Statement of Financial Accounting Standards No. 106), and the calculation method and discount rate specified hereinafter. The Accrual Balance shall be calculated such that when it is credited with interest each month the Accrual Balance at Normal Retirement Age equals the present value of the normal retirement benefits. The discount rate means the rate used by the Plan Administrator for determining the Accrual Balance. In its sole discretion the Plan Administrator may adjust the discount rate to maintain the rate within reasonable standards according to GAAP.
**1.2** “**Affiliate**” means the Bank and any other corporation or other form of entity of which the Company owns, from time to time, directly or indirectly, at least 80% of the total combined voting power of all classes of stock or other equity interests
**1.3** “**Beneficiary**” means each designated person, or the estate of the deceased Executive, entitled to benefits, if any, upon the death of the Executive, determined according to Article 4.
**1.4** “**Beneficiary Designation Form**” means the form established from time to time by the Plan Administrator that the Executive completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries.
**1.5** “**Change in Control**” means, and shall be deemed to occur, upon the consummation of a Change in Equity Ownership, a Change in Effective Control, a Change in the Ownership of Assets or a Change by Merger. For this purpose:
(a) A “Change in Equity Ownership” means that a person or group acquires, directly or indirectly in accordance with Code Section 318, more than 50% of the aggregate fair market value or voting power of the capital stock of the Company, including for this purpose capital stock previously acquired by such person or group; provided, however, that once any person or group acquires more than 50% of the aggregate fair market value or voting power of the Company’s capital stock, additional acquisitions by such person or group shall not be deemed to constitute an additional Change in Control hereunder.
(b) A “Change in Effective Control” means that a majority of the members of the Board of Directors of the Company is replaced during any 12-month period, whether by appointment or election, without endorsement by a majority of the members of the Board of Directors of the Company then serving prior to the date of such appointment or election.
(c) A “Change in the Ownership of Assets” means that any person or group acquires, or has acquired in a series of transactions during the immediately preceding 12-month period ending on the date of the most recent acquisition, all or substantially all of the assets of the Company.
(d) A “Change by Merger” means that the Company shall consummate a merger or consolidation or similar transaction with another corporation or entity, unless as a result of such transaction, more than 50% of the then outstanding voting securities of the surviving or resulting corporation or entity shall be owned in the aggregate by the former shareholders of the Company, and the voting securities of the surviving or resulting corporation or entity are owned in substantially the same proportion as the common stock of the Company was beneficially owned before such transaction.
Notwithstanding the above, a Change in Control shall occur for purposes of this Agreement only if such event also constitutes a “change in the ownership,” “change in effective control,” and/or a “change in the ownership of a substantial portion of assets” of the Company as those terms are defined under Treasury Regulation §1.409A-3(i)(5).
**1.6** “**Code**” means the Internal Revenue Code of 1986, as amended, and rules, regulations, and guidance of general application issued by the Department of the Treasury under the Internal Revenue Code of 1986, as amended.
**1.7** “**Committee**” means the Compensation Committee of the Board of Directors of the Company.
**1.8** “**Company**” means Investar Holding Corporation, a Louisiana corporation and parent of the Bank.
**1.9** “**Disability**” means, because of a medically determinable physical or mental impairment that can be expected to result in death or that can be expected to last for a continuous period of at least 12 months, (a) the Executive is unable to engage in any substantial gainful activity, or (b) the Executive is receiving income replacement benefits for a period of at least three months under an accident and health plan of the employer. Medical determination of disability may be made either by the Social Security Administration or by the provider of an accident or health plan covering employees of the Bank. Upon request of the Plan Administrator, the Executive must submit proof to the Plan Administrator of the Social Security Administration’s or provider’s determination.
**1.10** “**Early Termination**” means Separation from Service before Normal Retirement Age for reasons other than death, Disability, or Termination with Cause.
**1.11** “**Effective Date**” means July 17, 2026.
**1.12** “**Normal Retirement Age**” means age 65.
**1.13** “**Plan Administrator**” or “**Administrator**” means the plan administrator described in Article 7.
**1.14** “**Plan Year**” means a twelve-month period commencing on January 1 and ending on December 31 of each year. The initial Plan Year shall commence on the effective date of this Agreement.
**1.15** “**Separation from Service**” means separation from service as defined in Internal Revenue Code section 409A and rules, regulations, and guidance of general application thereunder issued by the Department of the Treasury, including termination for any reason of the Executive’s service as an executive and independent contractor to the Bank and any member of a controlled group, as defined in Code section 414, other than because of a leave of absence approved by the Bank or the Executive’s death. For purposes of this Agreement, if there is a dispute about the employment status of the Executive or the date of the Executive’s Separation from Service, the Bank shall have the sole and absolute right to decide the dispute unless a Change in Control shall have occurred.
**1.16** “**Termination with Cause**” and “**Cause**” shall have the same meaning specified in any effective employment or similar agreement between the Executive and the Company or the Bank. If no such agreement exists containing a definition of termination with cause, Termination with Cause means the Company or the Bank terminates the Executive’s employment because the Executive has:
(a) Committed an intentional act of fraud, embezzlement or theft in the course of employment or otherwise engaged in any intentional misconduct which is materially injurious to the financial condition or business reputation of the Company or its Affiliates;
(b) Committed intentional damage to the property of the Company and its Affiliates or committed intentional wrongful disclosure of proprietary information or confidential information, which is materially injurious to the financial condition or business reputation of the Company or its Affiliates;
(c) Been convicted with no further possibility of appeal, or entered a guilty or nolo contendere plea, for a felony or a crime involving moral turpitude;
(d) Willfully and substantially refused to perform the essential duties of his position after written notice from the Company; or
(e) Intentionally, recklessly or negligently violated any material provision of any code of conduct or ethics or equivalent code or policy of the Company or the Bank that is applicable to the Executive.
The Committee, in its discretion, shall determine whether any Separation from Service is on account of Cause as defined herein, provided that no act or failure to act will be deemed “intentional” if it is due primarily to an error in judgment, but will be deemed “intentional” only if done or omitted to be done by the Executive not in good faith and without reasonable belief that his action or omission was in the best interest of the Company or an Affiliate.
**1.17** “**Voluntary Termination with Good Reason**” means a voluntary Separation from Service by the Executive within 24 months after a Change in Control if the following conditions (a) and (b) are satisfied:
(a) The Executive shall have “Good Reason” to separate from service if any of the following occur without the Executive’s advance written consent within 24 months after a Change in Control –
(i) a material diminution of the Executive’s base salary,
(ii) a material diminution of the Executive’s authority, duties, or responsibilities,
(iii) a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Executive is required to report,
(iv) a material diminution in the budget over which the Executive retains authority,
(v) a material change in the geographic location at which the Executive must perform services for the Bank, or
(vi) any other action or inaction that constitutes a material breach by the Bank of the agreement under which the Executive provides services to the Bank.
(b) The Executive must give notice to the Bank of the existence of one or more of the conditions described in clause (a) within 90 days after the initial existence of the condition, and the Bank has 30 days thereafter to remedy the condition. In addition, the Executive’s voluntary termination because of the existence of one or more of the conditions described in clause (a) must occur within 24 months after the earlier of the initial existence of the condition or the Change in Control.
**Article 2**
**Lifetime Benefits**
**2.1** **Normal Retirement Age**. Unless Separation from Service occurs before Normal Retirement Age, when the Executive attains Normal Retirement Age the Bank shall pay to the Executive the benefit described in this section 2.1 instead of any other benefit under this Agreement. If the Executive’s Separation from Service thereafter is a Termination with Cause or if this Agreement terminates under Article 5, no further benefits shall be paid.
**2.1.1** *Amount of benefit*. The annual benefit under this section 2.1 is $100,000.
**2.1.2** *Payment of benefit*. Beginning with the month immediately after the month in which the Executive attains Normal Retirement Age, the Bank shall pay the annual benefit to the Executive in equal monthly installments on the first day of each month. The annual benefit shall be paid to the Executive for 10 years.
**2.2** **Early Termination Benefit**. Unless section 2.4 applies, upon Early Termination the Bank shall pay to the Executive the benefit described in this section 2.2 instead of any other benefit under this Agreement. No benefit is payable under this Agreement if the Executive’s employment terminates with Cause or if this Agreement terminates under Article 5. Neither the Bank nor the Executive may elect in the 24-month period after a Change in Control between the benefit under this section 2.2 versus the benefit under section 2.4. If the Executive’s Separation from Service within 24 months after a Change in Control is an involuntary termination without Cause or a Voluntary Termination with Good Reason, no benefit is payable under this section 2.2 and the Executive is instead entitled to the benefit under section 2.4 or, if the Executive first attained Normal Retirement Age, section 2.1.
**2.2.1** *Amount of benefit*. The annual benefit under this section 2.2 is calculated as the amount that fully amortizes the Accrual Balance existing at the end of the month immediately before the month in which Separation from Service occurs, amortizing that Accrual Balance over 10 years and taking into account interest at the discount rate or rates established by the Plan Administrator.
**2.2.2** *Payment of benefit*. Beginning the month immediately after the month in which the Executive attains Normal Retirement Age, the Bank shall pay the benefit under this section 2.2 to the Executive in equal monthly installments on the first day of each month. The benefit shall be paid to the Executive for 10 years.
**2.3** **Disability Benefit**. For Separation from Service because of Disability before Normal Retirement Age, the Bank will pay to the Executive the benefit described in this section 2.3 instead of any other benefit under this Agreement.
**2.3.1** *Amount of benefit*. The annual benefit under this section 2.3 is calculated as the amount that fully amortizes the Accrual Balance existing at the end of the month immediately before the month in which Separation from Service occurs, amortizing that Accrual Balance over 10 years and taking into account interest at the discount rate or rates established by the Plan Administrator.
**2.3.2** *Payment of benefit*. Beginning the month immediately after the month in which the Executive attains Normal Retirement Age, the Bank shall pay the benefit under this section 2.3 to the Executive in equal monthly installments on the first day of each month. The benefit shall be paid to the Executive for 10 years.
**2.4** **Change in Control**. If the Executive’s Separation from Service occurs before Normal Retirement Age, and such Separation from Service is an involuntary termination without Cause or a Voluntary Termination with Good Reason, in either case within 24 months after a Change in Control, the Bank will pay to the Executive the benefit described in this section 2.4 instead of any other benefit under this Agreement. No benefit is payable under this Agreement if the Executive’s employment terminates with Cause or if this Agreement terminates under Article 5. Neither the Bank nor the Executive may elect in the 24-month period after a Change in Control between the benefit under this section 2.4 versus the Early Termination benefit under section 2.2. If the Executive’s Separation from Service within 24 months after a Change in Control is an involuntary termination without Cause or a Voluntary Termination with Good Reason, no benefit is payable under section 2.2 and the Executive is instead entitled to the benefit under this section 2.4. But if the Executive has attained Normal Retirement Age when Separation from Service within 24 months after a Change in Control occurs, whether Separation from Service is voluntary or involuntary for any reason other than Termination with Cause, the Executive is entitled solely to the benefit provided by section 2.1, not this section 2.4.
**2.4.1** *Amount of benefit*. The benefit under this section 2.4 is the greater of the Accrual Balance required to be maintained by the Bank on the date on which the Executive’s Separation from Service occurs or $200,000.
**2.4.2** *Payment of benefit*. The Bank will pay the benefit under this section 2.4 to the Executive in a single lump sum on the date of the Executive’s Separation from Service, except as otherwise required under section 2.7.
**2.5** **Lump-Sum Payout of Remaining Normal Retirement Benefit, Early Termination Benefit, or Disability Benefit When a Change in Control Occurs**. If a Change in Control occurs while the Executive is receiving the Normal Retirement Age benefit under section 2.1, the Bank shall pay the remaining salary continuation benefits to the Executive in a single lump sum on the day of the Change in Control. If a Change in Control occurs after Separation from Service but while the Executive is receiving or is entitled to receive the Early Termination benefit under section 2.2 or the Disability benefit under section 2.3, the Bank shall pay the remaining salary continuation benefits to the Executive in a single lump sum three days after the Change in Control. The lump-sum payment due to the Executive as a result of a Change in Control shall be an amount equal to the Accrual Balance amount corresponding to the particular benefit when the Change in Control occurs, or the vested Accrual Balance if the Executive is receiving or entitled at Normal Retirement Age to receive the benefit under section 2.2.
**2.6** **Annual Benefit Statement**. Within 120 days after the end of each Plan Year, the Plan Administrator shall provide or cause to be provided to the Executive an annual benefit statement showing benefits payable or potentially payable to the Executive under this Agreement. Each annual benefit statement shall supersede the previous year’s annual benefit statement. If there is a contradiction between this Agreement and the annual benefit statement concerning the amount of a particular benefit payable or potentially payable to the Executive under sections 2.2, 2.3, or 2.4 hereof, the amount of the benefit determined under this Agreement shall control.
**2.7** **Savings Clause Relating to Compliance with Code Section 409A**. The Agreement is intended to comply with Code Section 409A and official guidance issued thereunder. Notwithstanding anything to the contrary, this Agreement shall be interpreted, operated and administered in a manner consistent with this intention. If any provision of this Agreement would subject the Executive to additional tax or interest under Code Section 409A, the Bank shall reform the provision. However, the Bank shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Executive to additional tax or interest, and the Bank shall not be required to incur any additional compensation expense as a result of the reformed provision. Notwithstanding any other provision of this Agreement, if any payment hereunder is triggered by the Executive’s Separation from Service and the Executive is determined to be a "specified employee" as defined in Code Section 409A(a)(2)(b)(i), then such payment shall not be paid until the first day of the seventh month after the month in which the Executive’s Separation from Service occurs or, if earlier, on the Executive's death (the "Specified Employee Payment Date"). The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date and interest on such amounts calculated based on the applicable federal rate published by the Internal Revenue Service for the month in which the Executive's Separation from Service occurs shall be paid to the Executive in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.
**2.8** **One Benefit Only**. Despite anything to the contrary in this Agreement, the Executive and Beneficiary are entitled to one benefit only under this Agreement, which shall be determined by the first event to occur that is dealt with by this Agreement. Except as provided in section 2.5 or Article 3, subsequent occurrence of events dealt with by this Agreement shall not entitle the Executive or Beneficiary to other or additional benefits under this Agreement.
**Article 3**
**Death Benefits**
**3.1** **Death Before Separation from Service**. If the Executive dies before Separation from Service, at the Executive’s death the Executive’s Beneficiary shall be entitled to no benefits whatsoever under this Agreement.
**3.2** **Death after Separation from Service**. If the Executive dies after Separation from Service, if Separation from Service was not a Termination with Cause, and if at death the Executive was receiving the benefit under section 2.1 or was receiving or was entitled at Normal Retirement Age to receive the benefit under sections 2.2 or 2.3, at the Executive’s death the Executive’s Beneficiary shall be entitled to an amount in cash equal to the Accrual Balance remaining at the Executive’s death, unless the Change-in-Control benefit shall have been paid to the Executive under section 2.4 or unless a Change-in-Control payout shall have occurred under section 2.5. No benefit shall be paid under this Article 3 after the Change-in-Control benefit is paid under section 2.4 or after a Change-in-Control payout occurs under section 2.5. If a benefit is payable to the Executive’s Beneficiary, the benefit shall be paid in a single lump sum 90 days after the Executive’s death. However, no benefits under this Agreement shall be paid or payable to the Executive or the Executive’s Beneficiary if this Agreement is terminated under Article 5.
**Article 4**
**Beneficiaries**
**4.1** **Beneficiary Designations**. The Executive shall have the right to designate at any time a Beneficiary to receive any benefits payable under this Agreement after the Executive’s death. The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designation under any other benefit plan of the Bank in which the Executive participates.
**4.2** **Beneficiary Designation: Change**. The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form and delivering it to the Plan Administrator or its designated agent. The Executive’s Beneficiary designation shall be deemed automatically revoked if the Beneficiary predeceases the Executive or if the Executive names a spouse as Beneficiary and the marriage is subsequently dissolved. The Executive shall have the right to change a Beneficiary by completing, signing, and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures, as in effect from time to time. Upon acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be cancelled. The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Executive and accepted by the Plan Administrator before the Executive’s death.
**4.3** **Acknowledgment**. No designation or change in designation of a Beneficiary shall be effective until received, accepted, and acknowledged in writing by the Plan Administrator or its designated agent.
**4.4** **No Beneficiary Designation**. If the Executive dies without a valid beneficiary designation or if all designated Beneficiaries predecease the Executive, the Executive’s spouse shall be the designated Beneficiary. If the Executive has no surviving spouse, the benefits shall be made to the personal representative of the Executive’s estate.
**4.5** **Facility of Payment**. If a benefit is payable to a minor, to a person declared incapacitated, or to a person incapable of handling the disposition of his or her property, the Bank may pay the benefit to the guardian, legal representative, or person having the care or custody of the minor, incapacitated person, or incapable person. The Bank may require proof of incapacity, minority, or guardianship as it may deem appropriate before distribution of the benefit. Distribution shall completely discharge the Bank from all liability for the benefit.
**Article 5**
**General Limitations**
**5.1** **Termination with Cause**. Despite any contrary provision of this Agreement, the Bank will not pay any benefit under this Agreement and this Agreement terminates if Separation from Service is a Termination with Cause.
**5.2** **Removal**. If the Executive is removed from office or permanently prohibited from participating in the Bank’s affairs by an order issued under section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1), all obligations of the Bank under this Agreement shall terminate as of the effective date of the order, and the Split Dollar Life Insurance Agreement and Endorsement between the Executive and the Bank dated as of the date hereof also shall terminate as of the effective date of the order.
**5.3** **Default**. Despite any contrary provision of this Agreement, if the Bank is in “default” or “in danger of default,” as those terms are defined in section 3(x) of the Federal Deposit Insurance Act, 12 U.S.C. 1813(x), all obligations under this Agreement shall terminate.
**5.4** **FDIC Open-Bank Assistance**. All obligations under this Agreement shall terminate, except to the extent determined that continuation of the contract is necessary for the continued operation of the Bank, if the Federal Deposit Insurance Corporation enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in section 13(c) of the Federal Deposit Insurance Act. 12 U.S.C. 1823(c). Any rights of the parties that have already vested shall not be affected by such action, however.
**Article 6**
**Claims and Review Procedures**
**6.1** **Claims Procedure**. The Bank will notify any person or entity that makes a claim for benefits under this Agreement (the “Claimant”) in writing, within 90 days after receiving Claimant’s written application for benefits, of his or her eligibility or noneligibility for benefits under the Agreement. If the Plan Administrator determines that the Claimant is not eligible for benefits or full benefits, the notice will state (a) the specific reasons for denial, (b) a specific reference to the provisions of the Agreement on which the denial is based, (c) a description of any additional information or material necessary for the Claimant to perfect his or her claim, and a description of why it is needed, and (d) an explanation of the Agreement’s claims review procedure and other appropriate information concerning steps to be taken if the Claimant wishes to have the claim reviewed. If the Plan Administrator determines that there are special circumstances requiring additional time to make a decision, the Bank will notify the Claimant of the special circumstances and the date by which a decision is expected to be made, and may extend the time for up to an additional 90 days.
**6.2** **Review Procedure**. If the Claimant is determined by the Plan Administrator not to be eligible for benefits, or if the Claimant believes that he or she is entitled to greater or different benefits, the Claimant will have the opportunity to have his or her claim reviewed by the Bank by filing a petition for review with the Bank within 60 days after receipt of the notice issued by the Bank. The Claimant’s petition must state the specific reasons the Claimant believes entitle him or her to benefits or to greater or different benefits. Within 60 days after receipt by the Bank of the petition, the Plan Administrator will give the Claimant (and counsel, if any) an opportunity to present his or her position verbally or in writing, and the Claimant (or counsel) will have the right to review the pertinent documents. The Plan Administrator will notify the Claimant of the Plan Administrator’s decision in writing within the 60-day period, stating specifically the basis of its decision, written in a manner to be understood by the Claimant, and the specific provisions of the Agreement on which the decision is based. If, because of the need for a hearing, the 60-day period is not sufficient, the decision may be deferred for up to another 60 days at the election of the Plan Administrator, but notice of this deferral will be given to the Claimant.
**Article 7**
**Administration of Agreement**
**7.1** **Plan Administrator Duties**. This Agreement shall be administered by a Plan Administrator consisting of the Board of Directors of Investar Holding Corporation (the “Board”) or such committee thereof or person as the Board shall appoint. The Executive may not be a member of the Plan Administrator. The Plan Administrator shall have the discretion and authority to (a) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Agreement and (b) decide or resolve any and all questions that may arise, including interpretations of this Agreement.
**7.2** **Agents**. In the administration of this Agreement, the Plan Administrator may employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel, who may be counsel to the Bank.
**7.3** **Binding Effect of Decisions**. The decision or action of the Plan Administrator about any question arising out of the administration, interpretation, and application of the Agreement and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Agreement. No Executive or Beneficiary shall be deemed to have any right, vested or nonvested, regarding the continued use of any previously adopted assumptions, including but not limited to the discount rate and calculation method employed in the determination of the Accrual Balance.
**7.4** **Indemnity of Plan Administrator**. The Bank shall indemnify and hold harmless the members of the Plan Administrator against any and all claims, losses, damages, expenses, or liabilities arising from any action or failure to act with respect to this Agreement, except in the case of willful misconduct by the Plan Administrator or any of its members.
**7.5** **Bank Information**. To enable the Plan Administrator to perform its functions, the Bank shall supply full and timely information to the Plan Administrator on all matters relating to the date and circumstances of the retirement, Disability, death, or Separation from Service of the Executive, and such other pertinent information as the Plan Administrator may reasonably require.
**Article 8**
**Miscellaneous**
**8.1** **Amendments and Termination**. This Agreement may be amended solely by a written agreement signed by the Bank and by the Executive. This Agreement may be terminated by the Board or a subcommittee thereof without the Executive’s consent. Unless Article 5 provides that the Executive is not entitled to payment, the Bank must pay the Accrual Balance in a single lump sum to the Executive if the Bank Terminates this Agreement but only if the termination and payment are carried out consistent with the terms of the Code Section 409A plan-termination exceptions to the prohibition against accelerated payment [Rule 1.409A-3(j)(4)(ix)]. Consistent with Code section 409A, the lump-sum termination payment will be made to the Executive on the first day of the thirteenth month after the month in which the Bank terminates this Agreement.
**8.2** **Binding Effect**. This Agreement shall bind the Executive and the Bank and their beneficiaries, survivors, executors, successors, administrators, and transferees.
**8.3** **No Guarantee of Employment**. This Agreement is not an employment policy or contract. It does not give the Executive the right to remain an employee of the Bank nor does it interfere with the Bank’s right to discharge the Executive. It also does not require the Executive to remain an employee or interfere with the Executive’s right to terminate employment at any time.
**8.4** **Non-Transferability**. Benefits under this Agreement may not be sold, transferred, assigned, pledged, attached, or encumbered.
**8.5** **Successors; Binding Agreement**. By an assumption agreement in form and substance satisfactory to the Executive, the Bank shall require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the Bank’s business or assets to expressly assume and agree to perform this Agreement in the same manner and to the same extent the Bank would be required to perform this Agreement had no succession occurred.
**8.6** **Tax Withholding**. The Bank shall withhold any taxes that are required to be withheld from the benefits provided under this Agreement.
**8.7** **Applicable Law**. The Agreement and all rights hereunder shall be governed by the laws of the State of Louisiana, except to the extent preempted by the laws of the United States of America.
**8.8** **Unfunded Arrangement**. The Executive and Beneficiary are general unsecured creditors of the Bank for the payment of benefits under this Agreement. The benefits represent the mere promise by the Bank to pay benefits. The rights to benefits are not subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance on the Executive’s life is a general asset of the Bank to which the Executive and Beneficiary have no preferred or secured claim.
**8.9** **Entire Agreement**. This Agreement constitutes the entire agreement between the Bank and the Executive concerning the subject matter. No rights are granted to the Executive under this Agreement other than those specifically set forth.
**8.10** **Severability**. If any provision of this Agreement is held invalid, such invalidity shall not affect any other provision of this Agreement not held invalid, and to the full extent consistent with law each such other provision shall continue in full force and effect. If any provision of this Agreement is held invalid in part, such invalidity shall not affect the remainder of such provision not held invalid, and to the full extent consistent with law the remainder of such provision, together with all other provisions of this Agreement, shall continue in full force and effect.
**8.11** **Headings**. Headings are included herein solely for convenience of reference and shall not affect the meaning or interpretation of any provision of this Agreement.
**8.12** **Notices**. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, return receipt requested, with postage prepaid, to the following addresses or to such other address as either party may designate by like notice. If to the Bank, notice shall be given to the Board of Directors, Investar Holding Corporation, 10500 Coursey Boulevard, Baton Rouge, LA 70816, or to such other or additional person or persons as the Bank shall have designated to the Executive in writing. If to the Executive, notice shall be given to the Executive at the Executive’s address appearing on the Bank’s records, or to such other or additional person or persons as the Executive shall have designated to the Bank in writing.
**In Witness Whereof**, the Executive and a duly authorized Bank officer have executed this Salary Continuation Agreement as of the date first written above.
- **Executive:** **Bank:**
- Jeffrey W. Martin **Investar Bank**
- /s/ Jeffrey W. Martin By: /s/ John J. D’Angelo
- Title: President and Chief Executive Officer
**Beneficiary Designation**
**Investar Bank**
**Salary Continuation Agreement**
**Investar Bank**
I designate the following as beneficiary of any death benefits under this Salary Continuation Agreement:
Primary:
Contingent:
**Note:** **To name a trust as beneficiary, please provide the name of the trustee(s) and the** **exact** **name and date of the trust agreement.**
I understand that I may change these beneficiary designations by filing a new written designation with the Bank. I further understand that the designations will be automatically revoked if the beneficiary predeceases me, or, if I have named my spouse as beneficiary and our marriage is subsequently dissolved.
- Signature:
- Date: , 20____
- Accepted by the Bank this ____ day of ________________ , 20____
- By:
- Title: