Investar Holding Corp. Expands Presence in Texas
Investar Holding Corp., based in Louisiana, is significantly increasing its footprint in Texas with a deal valued at $1.6 billion involving Wichita Falls Banksharing.
This acquisition includes the First National Bank holding company, which has been around for 36 years, and brings in approximately $1.2 billion in deposits. Notably, $364 million of that is based in the fast-expanding Dallas-Fort Worth area, where the bank operates five branches. As a result, the Texas deposit percentage for the Pro Forma Company will jump from 6% to 37%, which should notably alter Investar’s funding profile.
Investar’s CEO, John D’Angelo, labeled this merger as “a pivotal moment” for the company in a recent press release. The deal is anticipated to finalize in the fourth quarter of this year.
To finance the acquisition, Investar recently completed a private placement of $32.5 million in preferred stock, aiming to use these funds not just for this purchase but also for general growth and possible future acquisitions.
When asked about potentially pursuing more mergers and acquisitions, an Investar spokesperson did not provide immediate feedback.
The acquisition price for Wichita Falls is approximately $84 million in cash and stock.
Investors appear optimistic about the deal, as shares for Investar were trading at around $21.56, marking a nearly 6% increase on Wednesday.
Investar entered the Texas market back in 2019 with its acquisition of Mainland Bank, which had assets worth $125 million.
Once this latest transaction is complete, Investar’s total assets will amount to $4 billion, backed by $3.3 billion in loans and $3.5 billion in deposits. The company forecasts earnings of $3.08 per share by 2026, which would represent a substantial 35% increase. In comparison, Investar recorded earnings per share of $2.06 in 2024 and $1.69 in 2023.
David Flack, President of Wichita Falls, suggested in a press release that this merger would be beneficial for customers, helping them access new products and services while keeping their trusted local bankers.
First National Bank’s President and CEO, Stan Pinkham, noted that the acquisition by Investar is a significant opportunity for enhanced strategic collaboration through combined resources.
Founded by D’Angelo in 2006, Investar, with $2.7 billion in assets, often utilizes mergers and acquisitions to drive its growth. For instance, the company previously acquired Citizens Bancshares, a $249 million asset bank in Louisiana, for $46 million back in July 2017.
In a recent focus on expansion, Investar has also been pursuing various acquisition strategies, including its acquisition of Cheha Financial Group in Alabama for $41 million in April 2021. While Investar primarily serves commercial and small business clients, Wichita Falls has a stronger emphasis on mortgage lending, operating two mortgage offices in addition to its seven branches.
As of late March, mortgages for one-to-four family homes accounted for less than half of Wichita Falls’ $1.1 billion loan portfolio. To diversify its holdings, Investar plans to sell off $200 million in mortgages, which will help reduce its overall mortgage concentration and address some corporate debt.
Investar expects the trading to finalize in approximately five months, a timeline that aligns with the current trend of more prompt merger and acquisition approvals from regulators. Recently, Seaport Research Partners’ Senior Analyst Laurie Havely Hansicker noted that 10 out of 21 banks announced for potential acquisition in January and February of this year have already been completed.
