Investar Holding Corporation Reports $6.3 Million Net Income for Q1 2025

Investar Holding Corporation reported a net income of $6.3 million, or $0.63 per diluted share, for the three months ended March 31, 2025, marking a significant increase from the $4.7 million, or $0.48 per diluted share, recorded in the same period of 2024. This growth was primarily driven by a negative provision for credit losses of $3.6 million, attributed to a recovery related to a loan impacted by Hurricane Ida, compared to a negative provision of $1.4 million in the prior year. Additionally, net interest income rose to $18.3 million, a 6.6% increase from $17.2 million, largely due to a decrease in interest expense.

The company experienced a decrease in total loans, which fell by $18.5 million, or 0.9%, to $2.11 billion as of March 31, 2025. This decline was primarily due to lower utilization of credit lines and loan amortization, reflecting a strategic pivot towards optimizing the balance sheet. In contrast, total deposits increased slightly by $1.4 million, or 0.1%, to $2.35 billion, with noninterest-bearing deposits rising by 1.1% to $436.7 million. The company’s net interest margin improved to 2.87%, up from 2.59% in the previous year, indicating enhanced efficiency in managing interest income relative to interest expenses.

Investar's operational metrics showed improvements in credit quality, with nonperforming loans decreasing to 0.27% of total loans, down from 0.42% at the end of 2024. The allowance for credit losses stood at $26.4 million, representing 1.25% of total loans, a slight decrease from 1.34% a year earlier. The company maintained a strong capital position, with stockholders' equity increasing to $251.7 million, bolstered by retained earnings and a reduction in accumulated other comprehensive loss.

Strategically, Investar has shifted its focus from aggressive growth to achieving consistent, quality earnings. The company is actively managing its loan portfolio to prioritize high-margin, variable-rate loans while allowing higher-risk credit relationships to run off. Additionally, Investar is exploring acquisition opportunities to enhance its market presence, having successfully opened a new full-service branch in Texas in late 2024. The outlook remains cautious, with management monitoring economic conditions, interest rates, and potential impacts from inflation and geopolitical tensions on future performance.