Investar Holding Corporation reported net income of $6.1 million, or $0.61 per diluted common share, for the fourth quarter of 2024. This marks an increase from $5.4 million, or $0.54 per diluted common share, in the third quarter of 2024, and $3.5 million, or $0.36 per diluted common share, in the fourth quarter of 2023. Core earnings per diluted common share reached $0.65, significantly up from $0.45 in the prior quarter.
The company's fourth-quarter results included $3.1 million in nontaxable noninterest income from bank owned life insurance (BOLI) death benefit proceeds, which favorably impacted core metrics. Investar successfully executed its balance sheet optimization strategy by repaying $109 million in borrowings under the Federal Reserve's Bank Term Funding Program and redeeming $20 million in principal amount of 5.125% Fixed-to-Floating Rate Subordinated Notes due 2029. These actions contributed to a 12 basis point decrease in the overall cost of funds to 3.49% and a 5 basis point decrease in the cost of deposits to 3.40%.
Total loans decreased by 1.4% to $2.13 billion, consistent with the strategy to optimize the portfolio mix, while total deposits increased by 2.6% to $2.35 billion. Nonperforming loans increased to $8.8 million, or 0.42% of total loans, primarily due to specific commercial real estate and 1-4 family loan relationships. Despite this, the company recognized a $0.7 million negative provision for credit losses, reflecting a decrease in total loans and an improved economic forecast. Investar's regulatory common equity tier 1 capital ratio increased to 10.85%, demonstrating solid capital resources.
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