INVESTAR HOLDING CORP : Material Impairments (form 8-K)

ISTR

Item 2.06 Material Impairments

On October 8, 2021, management of Investar Holding Corporation (the "Company") and its wholly-owned subsidiary, Investar Bank, National Association (the "Bank"), determined that the Company expects to recognize a material impairment charge for the quarter ended September 30, 2021. The non-cash impairment charge relates to a lending relationship with related borrowers (collectively, the "Borrower") consisting of multiple loans with an outstanding aggregate loan balance of $40.4 million that are secured by various types of collateral. As a result of Hurricane Ida, which made landfall in Louisiana as a category 4 hurricane on August 29, 2021, the Borrower's business operations were disrupted. As a result of the storm's impact on the Borrower's operations, some of the collateral supporting the loan relationship experienced a significant reduction in value.

After careful evaluation of the relationship and collateral, and on the basis of information currently available to the Company, management concluded that an impairment charge was required under generally accepted accounting principles. As of the date of this report, based on the estimated value of collateral with respect to the loan relationship, including primarily real estate, inventory, and equipment, the Company will recognize an impairment charge of $21.6 million as a provision to its allowance for loan losses for the quarter ended September 30, 2021.

At this time, the Company is unable to quantify the amount of potential recoveries in excess of what is reflected in the current impairment charge estimate or if further impairment charges will be incurred related to this lending relationship. In addition, the Company currently expects an indeterminate amount of expenses in connection with the preservation and recovery of collateral. The impairment charge is not expected to affect the Company's or the Bank's status as a "well-capitalized" institution.

At this time, the Company is not aware of additional material impairments related to Hurricane Ida; however, the Company cannot give any assurances that additional impairment charges will not result from the storm's impact to our market areas. .

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