Investar Holding Corp Income Taxes Disclosure

NOTE 16. INCOME TAXES

 

Income tax expense is displayed in the table below for the years ended December 31, 2025, 2024 and 2023 (dollars in thousands).

 

		December 31,
		2025				2024				2023
Current federal income tax expense		$	5,071			$	3,352			$	3,971
Current state income tax expense			260				143				129
Deferred federal income tax expense			(349	)			659				(350	)
Total income tax expense		$	4,982			$	4,154			$	3,750

 

A reconciliation between reported income tax expense and the amounts computed by applying the U.S. federal statutory income tax rate of 21% to income before income taxes is presented in the following table for the years ended December 31, 2025, 2024 and 2023 (dollars in thousands).

 

		December 31,
		2025								2024								2023
		Amount				Percent				Amount				Percent				Amount				Percent
Federal income tax based on statutory rate		$	5,856				21.0	%		$	5,125				21.0	%		$	4,290				21.0	%
State taxes, net of federal income tax effects(1)			204				0.7				143				0.6				129				0.6
Nontaxable or nondeductible items:
Tax-exempt interest			(796	)			(2.8	)			(567	)			(2.3	)			(533	)			(2.6	)
BOLI impact			(417	)			(1.5	)			(741	)			(3.1	)			(297	)			(1.4	)
Other			137				0.5				188				0.8				88				0.4
Other			(2	)			—				6				—				73				0.4
Total income tax expense and effective tax rate, as reported		$	4,982				17.9	%		$	4,154				17.0	%		$	3,750				18.4	%

 

(1)	For the years presented, Alabama comprises the majority (greater than 50%) of the tax effect in this category.

 

The Company records deferred income tax on the tax effect of changes in timing differences.

 

The net deferred tax asset was comprised of the following items as of the dates indicated (dollars in thousands).

 

		December 31,
		2025				2024
Deferred tax liabilities:
Depreciation		$	(2,565	)		$	(2,674	)
FHLB stock dividend			(120	)			(90	)
Basis difference in acquired assets and liabilities			(988	)			(1,029	)
Operating lease ROU asset			(372	)			(428	)
Other			(158	)			(94	)
Gross deferred tax liability			(4,203	)			(4,315	)
Deferred tax assets:
Allowance for credit losses			5,623				5,620
Unrealized loss on AFS securities			9,666				13,085
Deferred compensation			1,145				1,169
Basis difference in acquired assets and liabilities			196				201
Employee and director stock awards			525				534
Operating lease liability			390				448
Unearned loan fees			333				208
Other			375				170
Gross deferred tax asset			18,253				21,435
Net deferred tax asset		$	14,050			$	17,120

 

The Company files income tax returns under U.S. federal jurisdiction and the states of Alabama, Florida, Texas and Louisiana, although the state of Louisiana does not assess an income tax on income resulting from banking operations. The Company is open to examination in the U.S. and the states of Louisiana, Alabama, and Florida for tax years ended December 31, 2022 through December 31, 2025; and Texas for tax years ended December 31, 2021 through  December 31, 2025.