Investar Holding Corp Debt Disclosure
NOTE 11. OTHER BORROWED FUNDS
Federal Home Loan Bank Advances
FHLB advances and weighted average interest rates at the end of the period by contractual maturity are summarized as of the dates presented (dollars in thousands).
| Amount | Weighted Average Rate | |||||||||||||||
| December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | |||||||||||||
| Fixed rate advances maturing: | ||||||||||||||||
| 2024 | $ | — | $ | 23,500 | — | % | 1.81 | % | ||||||||
| 2025 | 7,215 | — | 4.75 | — | ||||||||||||
| 2026 | 60,000 | — | 3.92 | — | ||||||||||||
| $ | 67,215 | $ | 23,500 | 4.01 | % | 1.81 | % | |||||||||
As of December 31, 2024, these advances are collateralized by a blanket pledge of certain loans totaling approximately $979.7 million. The Company also maintains letters of credit from the FHLB to secure certain public funds deposits. As of December 31, 2024, the Company had an additional $733.7 million in unused borrowing capacity with the FHLB.
Borrowings Under Bank Term Funding Program
On March 12, 2023, the Federal Reserve established the BTFP. The BTFP was a one-year program which provided additional liquidity through borrowings with a term of up to one year secured by the pledging of certain qualifying securities and other assets, valued at par value. At December 31, 2024, the Company had no outstanding borrowings under the BTFP. At December 31, 2023 outstanding borrowings under the BTFP were $212.5 million, with a weighted average rate of 4.83%. During the fourth quarter of 2024, the Company repaid all outstanding borrowings under the BTFP.
Lines of Credit
The Company has outstanding unsecured lines of credit with its correspondent banks available to assist in the management of short-term liquidity. Any balances drawn on these lines of credit mature daily. At December 31, 2024 and 2023, the available balance on the unsecured lines of credit totaled approximately $60.0 million, with no outstanding balance reflected on the consolidated balance sheets.
Junior Subordinated Debt
The following table provides a summary of the Company’s junior subordinated debentures (dollars in thousands).
| Face Value | Carrying Value | Maturity Date | Variable Interest Rate | Interest Rate at December 31, 2024 | ||||||||||||
| First Community Louisiana Statutory Trust I | $ | 3,609 | $ | 3,609 | June 2036 |
| 6.39 | % | ||||||||
| BOJ Bancshares Statutory Trust I | 3,093 | 2,557 | December 2034 |
| 6.52 | % | ||||||||||
| Cheaha Statutory Trust I | 3,093 | 2,567 | September 2035 |
| 6.32 | % | ||||||||||
| $ | 9,795 | $ | 8,733 | |||||||||||||
These debentures are unsecured obligations due to trusts that are unconsolidated subsidiaries. The debentures were issued in conjunction with the trusts’ issuances of obligated capital securities. The trusts used the proceeds from the issuances of their capital securities to buy floating rate junior subordinated deferrable interest debentures that bear the same interest rate and terms as the capital securities. These debentures are the trusts’ only assets and the interest payments from the debentures finance the distributions paid on the capital securities. These debentures rank junior and are subordinate in the right of payment to all other debt of the Company.
As part of the purchase accounting adjustments made with the BOJ Bancshares Inc. acquisition on December 1, 2017, and with the Cheaha Financial Group, Inc. acquisition on April 1, 2021, the Company adjusted the carrying value of the junior subordinated debentures to fair value as of the respective acquisition date. The discounts on the debentures will continue to be amortized through maturity and recognized as a component of interest expense.
The debentures may be called by the Company at par plus any accrued interest. Interest on the debentures is calculated quarterly. The distribution rate payable on the capital securities is cumulative and payable quarterly in arrears. The Company has the right to defer payments of interest on the debentures at any time by extending the interest payment period for a period not exceeding 20 consecutive quarters with respect to each deferral period, provided that no extension period may extend beyond the redemption or maturity date of the debentures.
The debentures are included on the consolidated balance sheets as liabilities; however, for regulatory purposes, the carrying values of these obligations are eligible for inclusion in Tier I regulatory capital, subject to certain limitations. The total carrying values of $8.7 million and $8.6 million were allowed in the calculation of Tier I regulatory capital at December 31, 2024 and 2023, respectively.
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.