Investar Holding Corporation

What they do

Investar Bank, National Association takes deposits and makes loans, with a loan portfolio weighted toward commercial and industrial and commercial real estate lending, which the 10-K describes as carrying more default risk than residential real estate or other consumer loans. It also originates consumer mortgage loans, part of the book acquired from Wichita Falls Bancshares, and offers interest rate swap contracts to customers, running offsetting swaps with other financial institutions. The company has expanded outside its historical south Louisiana base into Texas and Alabama through de novo branching and acquisitions.

Revenue drivers

• Net interest income / commercial lending — Earned on a loan portfolio concentrated in commercial and industrial and commercial real estate loans with relatively large balances; net interest margin was 3.67% in the quarter ended June 30, 2026.
• Deposit funding — Cost of funds, including noninterest-bearing deposits, fell nine basis points to 2.31% in Q2 2026 as higher-cost brokered time deposits ran off and were replaced with lower-cost non-maturing deposits.
• Customer interest rate swaps — The company had $158.3 million notional in customer swaps offset by $158.3 million with other financial institutions at June 30, 2026, down from $180.8 million at December 31, 2025.
• Acquired Wichita Falls Bancshares (WFB) business — The WFB acquisition contributed to second quarter 2026 results and was operationally converted onto the company's core system in May 2026; consumer mortgage loans from WFB are being allowed to run off.

Recent performance

For the second quarter of 2026, Investar reported net income available to common shareholders of $8.9 million, or $0.61 per diluted common share, down from $11.5 million, or $0.77 per diluted share, in the first quarter of 2026 but up from $4.5 million, or $0.46 per diluted share, in the second quarter of 2025. Core diluted earnings per share were $0.75 in Q2 2026 versus $0.87 in Q1 2026 and $0.47 in Q2 2025; the first quarter of 2026 included a $2.1 million reversal of credit losses. Net interest margin improved eight basis points to 3.67%, and adjusted net interest margin excluding loan accretion and interest recoveries improved 11 basis points to 3.39%. Return on average assets was 0.98% in Q2 2026, down from 1.25% in Q1 2026, with core return on average assets of 1.21% versus 1.41%. Full-year 2025 revenue was $93.6 million with net income of $22.9 million, or $2.13 per diluted share.

Strategy

Management describes a strategy of consistent, quality earnings through balance sheet optimization, supported by the WFB acquisition and its May 2026 core system conversion. The company is allowing consumer mortgage loans acquired from WFB to run off and replacing them with production in business lending, primarily higher-yielding commercial and industrial loans. It hired eight commercial bankers, mainly from larger banks, across the Texas and Louisiana footprint to execute this remix and pursue multi-state growth both organically and through potential acquisitions. Capital return remains a stated priority: 27,235 shares were repurchased in Q2 2026 at an average price of $27.68, and the quarterly dividend was raised 9% to $0.12 per common share from $0.11.

Risks

• Regulatory examination and enforcement — The Federal Reserve and OCC periodically examine the business, and adverse findings could lead to remedial actions including capital directives, growth restrictions, civil monetary penalties, removal of officers and directors, or termination of deposit insurance.
• Credit concentration in commercial loans — The portfolio contains a significant number of commercial and industrial and commercial real estate loans with relatively large balances, so deterioration of a material amount of these loans could significantly increase the allowance for credit losses and non-performing assets.
• Inflation and interest rates — The 10-K states inflation remained elevated versus the Federal Reserve's 2% target, raising borrowers' costs and the company's operating costs, and that higher rates led to constrained loan demand in 2023 and 2024 and to a lesser extent in 2025.
• Deposit and liquidity pressure — The 10-K states concerns about banking industry liquidity and the safety of uninsured deposits may materially adversely impact liquidity, cost of funds, loan funding capacity, net interest margin and capital.

Outlook

Management said it is enthusiastic about its positioning for future growth both organically and through potential acquisitions, citing the Q2 2026 net interest margin improvement and the completed WFB conversion. It expects to continue remixing the loan portfolio toward commercial and industrial lending and to benefit from lower-cost non-maturing deposits replacing brokered time deposits. The company also indicated continued focus on shareholder value and returning capital, following the 9% dividend increase and Q2 share repurchases.