Investar Holding Corporation reported significant financial performance improvements for the three and nine months ended September 30, 2024, compared to the same periods in 2023. For the third quarter, net income rose to $5.4 million, up from $2.8 million, while net income for the nine months increased to $14.1 million from $13.1 million. Basic earnings per share for the third quarter were $0.55, compared to $0.28 in the prior year.

Total interest income for the third quarter reached $36.8 million, an increase from $33.2 million, driven by higher interest and fees on loans, which rose to $32.8 million from $28.9 million. However, total interest expense also increased to $19.0 million from $15.7 million, reflecting a rise in the cost of deposits, which reached 3.45% compared to 2.73% in 2023. Consequently, net interest income for the third quarter was $17.9 million, a slight increase from $17.5 million.

Noninterest income saw a substantial increase, rising to $3.5 million for the third quarter, up from $1.6 million, primarily due to a legal settlement contributing $1.1 million. For the nine-month period, noninterest income increased to $9.0 million from $4.8 million, aided by gains on the sale of fixed assets and other real estate.

The company’s total loans decreased by 2.5% to $2.16 billion as of September 30, 2024, from $2.21 billion at the end of 2023. This decline was attributed to a decrease in various loan categories, including commercial and industrial loans, which saw a slight increase, while construction and development loans decreased. The allowance for credit losses was $28.1 million, down from $30.5 million at the end of 2023, reflecting improved credit quality and net recoveries.

Investar's total deposits increased by 1.4% to $2.29 billion, with noninterest-bearing deposits decreasing slightly. The company’s total assets were estimated at $368.4 million, down from $380.4 million at the end of 2023. The bank's capital ratios remained strong, with Tier 1 leverage capital at 8.95% and common equity tier 1 capital at 10.33%, both exceeding regulatory requirements.

Strategically, Investar has shifted its focus from growth to optimizing its balance sheet and enhancing earnings quality. The company exited the consumer mortgage origination business in Q3 2023 and has closed several branches in recent years to streamline operations. The adoption of the CECL accounting methodology for credit losses has also impacted financial reporting, leading to a one-time increase in the allowance for credit losses.