Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
_____________________________________
 
FORM 10-Q
_____________________________________
 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2017
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                  to                  
Commission File Number: 001-36522
_____________________________________
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=11572763&doc=12 
Investar Holding Corporation
(Exact name of registrant as specified in its charter) 
Louisiana
27-1560715
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
7244 Perkins Road, Baton Rouge, Louisiana 70808
(Address of principal executive offices, including zip code)
(225) 227-2222
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒   No  ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Accelerated filer
þ
Non-accelerated filer
☐ (Do not check if a smaller reporting company)
Smaller reporting company
 
 
Emerging growth company
þ
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  þ
The number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date, is as follows: Common stock, $1.00 par value, 8,801,629 shares outstanding as of May 4, 2017.




TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
Item 3.
 
Item 4.
 
 
 
 
 
 
 
 
 
Item 1A.
 
Item 2.
 
Item 6.
 


2



SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
When included in this Quarterly Report on Form 10-Q, or in other documents that Investar Holding Corporation (the “Company”) files with the Securities and Exchange Commission (“SEC”) or in statements made by or on behalf of the Company, words like “may,” “should,” “could,” “predict,” “potential,” “believe,” “think,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would,” “outlook” and similar expressions or the negative version of those words are intended to identify forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a variety of risks and uncertainties that could cause actual results to differ materially from those described therein. The Company’s forward-looking statements are based on assumptions and estimates that management believes to be reasonable in light of the information available at the time such statements are made. However, many of the matters addressed by these statements are inherently uncertain and could be affected by many factors beyond management’s control. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. These factors include, but are not limited to, the following, any one or more of which could materially affect the outcome of future events:
 
business and economic conditions generally and in the financial services industry in particular, whether nationally, regionally or in the markets in which we operate;
our ability to achieve organic loan and deposit growth, and the composition of that growth;
changes (or the lack of changes) in interest rates, yield curves and interest rate spread relationships that affect our loan and deposit pricing;
the extent of continuing client demand for the high level of personalized service that is a key element of our banking approach as well as our ability to execute our strategy generally;
our dependence on our management team, and our ability to attract and retain qualified personnel;
changes in the quality or composition of our loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers;
inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates;
the concentration of our business within our geographic areas of operation in Louisiana; and
concentration of credit exposure.
These factors should not be construed as exhaustive. Additional information on these and other risk factors can be found in Item 1A. “Risk Factors” and Item 7. “Special Note Regarding Forward-Looking Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission.
Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on any forward-looking statement as a prediction of future events. We expressly disclaim any obligation or undertaking to update our forward-looking statements, and we do not intend to release publicly any updates or changes in our expectations concerning the forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based, except as required by law.


3



PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INVESTAR HOLDING CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
 
 
March 31, 2017
 
December 31, 2016
 
 
(Unaudited)
 
 
ASSETS
 
 
 
 
Cash and due from banks
 
$
8,043

 
$
9,773

Interest-bearing balances due from other banks
 
18,600

 
19,569

Federal funds sold
 

 
106

Cash and cash equivalents
 
26,643

 
29,448

 
 
 
 
 
Available for sale securities at fair value (amortized cost of $176,363 and $166,258, respectively)
 
174,139

 
163,051

Held to maturity securities at amortized cost (estimated fair value of $19,422 and $19,612, respectively)
 
19,648

 
20,091

Loans, net of allowance for loan losses of $7,243 and $7,051, respectively
 
894,905

 
886,375

Other equity securities
 
6,320

 
5,362

Bank premises and equipment, net of accumulated depreciation of $7,117 and $6,751, respectively
 
31,434

 
31,722

Other real estate owned, net
 
4,045

 
4,065

Accrued interest receivable
 
3,243

 
3,218

Deferred tax asset
 
2,601

 
2,868

Goodwill and other intangible assets, net
 
3,224

 
3,234

Bank owned life insurance
 
7,248

 
7,201

Other assets
 
2,385

 
2,325

Total assets
 
$
1,175,835

 
$
1,158,960

 
 
 
 
 
LIABILITIES
 
 

 
 

Deposits:
 
 

 
 

Noninterest-bearing
 
$
112,514

 
$
108,404

Interest-bearing
 
756,040

 
799,383

Total deposits
 
868,554

 
907,787

Advances from Federal Home Loan Bank
 
82,413

 
82,803

Repurchase agreements
 
36,361

 
39,087

Subordinated debt, net of unamortized issuance costs
 
18,133

 

Junior subordinated debt
 
3,609

 
3,609

Other borrowings
 
78

 
1,000

Accrued taxes and other liabilities
 
18,351

 
11,917

Total liabilities
 
1,027,499

 
1,046,203

 
 
 
 
 
STOCKHOLDERS’ EQUITY
 
 

 
 

Preferred stock, no par value per share; 5,000,000 shares authorized
 

 

Common stock, $1.00 par value per share; 40,000,000 shares authorized; 8,805,810 and 7,101,851 shares issued and outstanding, respectively
 
8,806

 
7,102

Surplus
 
112,927

 
81,499

Retained earnings
 
27,916

 
26,227

Accumulated other comprehensive loss
 
(1,313
)
 
(2,071
)
Total stockholders’ equity
 
148,336

 
112,757

Total liabilities and stockholders’ equity
 
$
1,175,835

 
$
1,158,960

See accompanying notes to the consolidated financial statements.

4



INVESTAR HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share data)
(Unaudited)
 
 
 
Three months ended March 31,
 
 
2017
 
2016
INTEREST INCOME
 
 
 
 
Interest and fees on loans
 
$
10,004

 
$
9,485

Interest on investment securities
 
1,029

 
856

Other interest income
 
60

 
37

Total interest income
 
11,093

 
10,378

 
 
 
 
 
INTEREST EXPENSE
 
 

 
 

Interest on deposits
 
1,853

 
1,515

Interest on borrowings
 
380

 
316

Total interest expense
 
2,233

 
1,831

Net interest income
 
8,860

 
8,547

 
 
 
 
 
Provision for loan losses
 
350

 
454

Net interest income after provision for loan losses
 
8,510

 
8,093

 
 
 
 
 
NONINTEREST INCOME
 
 

 
 

Service charges on deposit accounts
 
97

 
97

Gain on sale of investment securities, net
 
106

 
80

Gain on sale of fixed assets, net
 
23

 

Gain on sale of other real estate owned, net
 
5

 
1

Gain on sale of loans, net
 

 
313

Servicing fees and fee income on serviced loans
 
423

 
591

Other operating income
 
231

 
205

Total noninterest income
 
885

 
1,287

Income before noninterest expense
 
9,395

 
9,380

 
 
 
 
 
NONINTEREST EXPENSE
 
 

 
 

Depreciation and amortization
 
376

 
370

Salaries and employee benefits
 
3,950

 
3,873

Occupancy
 
264

 
236

Data processing
 
368

 
374

Marketing
 
28

 
112

Professional fees
 
232

 
279

Acquisition expense
 
145

 

Other operating expenses
 
1,321

 
1,140

Total noninterest expense
 
6,684

 
6,384

Income before income tax expense
 
2,711

 
2,996

Income tax expense
 
847

 
1,006

Net income
 
$
1,864

 
$
1,990

 
 
 

 
 

EARNINGS PER SHARE
 
 

 
 

Basic earnings per share
 
$
0.26

 
$
0.28

Diluted earnings per share
 
0.26

 
0.28

Cash dividends declared per common share
 
0.02

 
0.01

See accompanying notes to the consolidated financial statements.

5



INVESTAR HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands)
(Unaudited)
 
 
 
Three months ended March 31,
 
 
2017
 
2016
Net income
 
$
1,864

 
$
1,990

Other comprehensive income (loss):
 
 

 
 

Unrealized gain (loss) on investment securities:
 
 

 
 

Unrealized gain, available for sale, net of tax expense of $381 and $480, respectively
 
707

 
891

Reclassification of realized gain, net of tax benefit of $37 and $28, respectively
 
(69
)
 
(52
)
Unrealized loss, transfer from available for sale to held to maturity, net of tax benefit of $0 and $0, respectively
 

 
(1
)
Fair value of derivative financial instruments:
 
 

 
 

Change in fair value of interest rate swap designated as a cash flow hedge, net of tax expense (benefit) of $64 and ($242), respectively
 
120

 
(449
)
Total other comprehensive income
 
758

 
389

Total comprehensive income
 
$
2,622

 
$
2,379

See accompanying notes to the consolidated financial statements.


6



INVESTAR HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Amounts in thousands, except share data)
 
 
 
Common
Stock
 
Surplus
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Total
Stockholders’
Equity
Balance, December 31, 2015
 
$
7,264

 
$
84,099

 
$
18,650

 
$
(663
)
 
$
109,350

Surrendered shares
 
(4
)
 
(61
)
 

 

 
(65
)
Shares repurchased
 
(222
)
 
(3,251
)
 

 

 
(3,473
)
Options and warrants exercised
 
12

 
153

 

 

 
165

Dividends declared, $0.04 per share
 

 

 
(303
)
 

 
(303
)
Stock-based compensation
 
52

 
557

 

 

 
609

Net tax effect of stock-based compensation
 

 
2

 

 

 
2

Net income
 

 

 
7,880

 

 
7,880

Other comprehensive loss, net
 

 

 

 
(1,408
)
 
(1,408
)
Balance, December 31, 2016
 
$
7,102

 
$
81,499

 
$
26,227

 
$
(2,071
)
 
$
112,757

Common stock issued in offering, net of direct costs of $1,948
 
1,624

 
30,929

 

 

 
32,553

Surrendered shares
 
(4
)
 
(69
)
 

 

 
(73
)
Options and warrants exercised
 
35

 
438

 

 

 
473

Dividends declared, $0.02 per share
 

 

 
(175
)
 

 
(175
)
Stock-based compensation
 
49

 
130

 

 

 
179

Net income
 

 

 
1,864

 

 
1,864

Other comprehensive income, net
 

 

 

 
758

 
758

Balance, March 31, 2017 (Unaudited)
 
$
8,806

 
$
112,927

 
$
27,916

 
$
(1,313
)
 
$
148,336

See accompanying notes to the consolidated financial statements.


7



INVESTAR HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited) 
 
 
Three months ended March 31,
 
 
2017
 
2016
Cash flows from operating activities:
 
 

 
 

Net income
 
$
1,864

 
$
1,990

Adjustments to reconcile net income to net cash provided by operating activities:
 
 

 
 

Depreciation and amortization
 
376

 
370

Provision for loan losses
 
350

 
454

Amortization of purchase accounting adjustments
 

 
(17
)
Net amortization of securities
 
331

 
230

Gain on sale of securities, net
 
(106
)
 
(80
)
Gain on sale of fixed assets, net
 
(23
)
 

Gain on sale of other real estate owned, net
 
(5
)
 
(1
)
FHLB stock dividend
 
(18
)
 
(11
)
Stock-based compensation
 
179

 
141

Deferred taxes
 
(141
)
 
(228
)
Net change in value of bank owned life insurance
 
(47
)
 
(42
)
Loans held for sale:
 
 

 
 

Originations
 

 
(495
)
Proceeds from sales
 

 
23,837

Gain on sale of loans
 

 
(313
)
Net change in:
 
 

 
 

Accrued interest receivable
 
(25
)
 
(148
)
Other assets
 
125

 
927

Accrued taxes and other liabilities
 
6,272

 
807

Net cash provided by operating activities
 
9,132

 
27,421

 
 
 
 
 
Cash flows from investing activities:
 
 

 
 

Proceeds from sales of investment securities available for sale
 
10,325

 
3,440

Funds invested in securities available for sale
 
(26,577
)
 
(19,594
)
Proceeds from maturities, prepayments and calls of investment securities available for sale
 
5,944

 
2,111

Proceeds from maturities, prepayments and calls of investment securities held to maturity
 
421

 
143

Purchase of other equity securities
 
(940
)
 
(1,338
)
Net increase in loans
 
(8,881
)
 
(45,779
)
Proceeds from sales of other real estate owned
 
25

 
62

Proceeds from the sales of fixed assets
 
291

 

Purchases of fixed assets
 
(346
)
 
(489
)
Acquisition of trademark intangible
 

 
(100
)
Purchase of bank owned life insurance
 

 
(3,500
)
Net cash used in investing activities
 
(19,738
)
 
(65,044
)
 
 
 
 
 
Cash flows from financing activities:
 
 

 
 

Net (decrease) increase in customer deposits
 
(39,233
)
 
71,317

Net decrease in repurchase agreements
 
(2,726
)
 
(9,422
)
Net decrease in short-term FHLB advances
 
(5,000
)
 
(21,903
)
Proceeds from long-term FHLB advances
 
5,000

 

Repayment of long-term FHLB advances
 
(390
)
 
(1,633
)
Proceeds from other borrowings
 
78

 

Repayment of other borrowings
 
(1,000
)
 

Proceeds from subordinated debt, net of issuance costs
 
18,133

 

Cash dividends paid on common stock
 
(87
)
 
(63
)
Proceeds from public offering of common stock, net of issuance costs
 
32,553

 

Proceeds from stock options and warrants exercised
 
473

 

Payments to repurchase common stock
 

 
(315
)
Net cash provided by financing activities
 
7,801

 
37,981

 
 
 
 
 
Net (decrease) increase in cash and cash equivalents
 
(2,805
)
 
358

Cash and cash equivalents, beginning of period
 
29,448

 
20,966

Cash and cash equivalents, end of period
 
$
26,643

 
$
21,324

See accompanying notes to the consolidated financial statements.

8

INVESTAR HOLDING CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited consolidated financial statements of Investar Holding Corporation (the “Company”) have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include information or footnotes necessary for a complete presentation of financial position, results of operations, and cash flows in conformity with GAAP. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial statements have been included. The results of operations for the three month period ended March 31, 2017 are not necessarily indicative of the results that may be expected for the entire fiscal year. These statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2016, including the notes thereto, which were included as part of the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 9, 2017.
Nature of Operations
Investar Holding Corporation, headquartered in Baton Rouge, Louisiana, provides full banking services, excluding trust services, through its wholly-owned banking subsidiary, Investar Bank (the “Bank”), a Louisiana-chartered bank. The Company’s primary market is South Louisiana. The Company currently operates 10 full service banking offices located throughout its market and had 152 employees at March 31, 2017.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, the Bank. All significant intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material.
Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in local economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination. Because of these factors, it is reasonably possible that the allowance for loan losses may change materially in the near term. However, the amount of the change that is reasonably possible cannot be estimated.
Other estimates that are susceptible to significant change in the near term relate to the determination of other-than-temporary impairments of securities and the fair value of financial instruments.
Reclassifications
Certain reclassifications have been made to the 2016 financial statements to be consistent with the 2017 presentation.
Concentrations of Credit Risk
The Company’s loan portfolio consists of the various types of loans described in Note 4, Loans. Real estate or other assets secure most loans. The majority of loans have been made to individuals and businesses in the Company’s market of South Louisiana. Customers are dependent on the condition of the local economy for their livelihoods and servicing their loan obligations. The Company does not have any significant concentrations in any one industry or individual customer.

 

9

INVESTAR HOLDING CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Recent Accounting Pronouncements
 
FASB ASC Subtopic 310-20 “Receivables – Nonrefundable Fees and Other Costs, Premium Amortization on Purchased Callable Debt Securities” Update No. 2017-08. The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-08 in March 2017. The amendments in the ASU shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. Update 2017-08 will be effective for the Company beginning January 1, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments should be applied on a modified retrospective basis, with a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is assessing the impact of ASU 2017-08 on its accounting and disclosures.
FASB ASC Topic 350 “Intangibles – Goodwill and Other: Simplifying the Test for Goodwill Impairment” Update No. 2017-04. The FASB issued ASU No. 2017-04 in January 2017. The ASU simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Therefore, any carrying amount which exceeds the reporting unit’s fair value, up to the amount of goodwill recorded, will be recognized as an impairment loss. ASU 2017-04 will be effective for the Company on January 1, 2020. The amendments will be applied prospectively on or after the effective date. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. Based on recent goodwill impairments tests, which did not require the application of Step 2, the Company does not expect the adoption of this ASU to have an immediate impact.
FASB ASC Topic 805 “Business Combinations: Clarifying the Definition of a Business” Update No. 2017-01. The FASB issued ASU No. 2017-01 in January 2017. The amendments in the ASU are intended to clarify the definition and the current interpretation of a business to assist companies and other reporting organizations with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The ASU will be effective for the Company beginning January 1, 2018. The amendments will be applied prospectively on or after the effective date. Early application of the amendments in this ASU is allowed for transactions, including when a subsidiary or group of assets is deconsolidated/derecognized, in which the acquisition date occurs before the issuance date or effective date of the amendments, only when the transaction has not been reported in financial statements that have been issued or made available for issuance. The adoption of this standard is not expected to have a material impact on the Company’s financial statements.
FASB ASC Topic 230 “Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments” Update No. 2016-15. The FASB issued ASU No. 2016-15 in August 2016. The amendments in the ASU address eight specific cash flow issues with the objective of reducing the existing diversity in practice, as the issues are either unclear or do not have specific guidance under current GAAP. ASU 2016-15 will be effective on January 1, 2018. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.
FASB ASC Topic 326 “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments” Update No. 2016-13. The FASB issued ASU No. 2016-13 in June 2016. The amendments introduce an impairment model that is based on expected credit losses, rather than incurred losses, to estimate credit losses on certain types of financial instruments (e.g., loans and held-to-maturity securities), including certain off-balance sheet financial instruments (e.g., loan commitments). The expected credit losses should consider historical information, current information, and reasonable and supportable forecasts, including estimates of prepayments, over the contractual term. Financial instruments with similar risk characteristics may be grouped together when estimating expected credit losses. The ASU also amends the current AFS security impairment model for debt securities. The new model will require an estimate of expected credit losses when the fair value is below the amortized cost of the asset through the use of an allowance to record estimated credit losses (and subsequent recoveries). Non-credit related losses will continue to be recognized through other comprehensive income. In addition, the amendments provide for a simplified accounting model for purchased financial assets with a more-than-insignificant amount of credit deterioration since their origination. The initial estimate of expected credit losses would be recognized through an allowance for loan losses with an offset (i.e., increase) to the cost basis of the related financial asset at acquisition.

10

INVESTAR HOLDING CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

ASU 2016-13 will be effective for the Company beginning January 1, 2020. The amendments will be applied through a modified-retrospective approach, resulting in a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. A prospective transition approach is required for debt securities for which other-than-temporary impairment had been recognized before the effective date. Amounts previously recognized in accumulated other comprehensive income as of the date of adoption that relate to improvements in cash flows expected to be collected should continue to be accreted into income over the remaining life of the asset. Recoveries of amounts previously written off relating to improvements in cash flows after the date of adoption should be recorded in earnings when received. Management is currently evaluating the potential impact of ASU 2016-13 on the Company’s consolidated financial statements.
FASB ASC Topic 825 “Financial Instruments – Overall” Update No. 2016-1. The FASB issued ASU No. 2016-1 in January 2016 to address certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The ASU will not change the guidance for classifying and measuring investments in debt securities or loans; however, it will impact how entities measure certain equity investments, recognize changes in the fair value of financial liabilities measured under the fair value option that are attributable to instrument-specific credit risk, and disclose and present financial assets and liabilities in financial statements. The main provisions require investments in equity securities to be measured at fair value through net income, unless they qualify for a new practicability exception, the equity method of accounting, or consolidation, and require fair value changes arising from changes in instrument-specific credit risk for financial liabilities that are measured under the fair value option to be recognized in other comprehensive income. The amendments will also require entities to present financial assets and financial liabilities separately, grouped by measurement category and form of financial asset in the statement of financial position or in the accompanying notes to the financial statements. Entities will also no longer have to disclose the methods and significant assumptions for financial instruments measured at amortized cost, but will be required to measure such instruments under the “exit price” notion for disclosure purposes.
The amendments in this ASU are effective for the Company beginning January 1, 2018. The Company will record a cumulative-effect adjustment to beginning retained earnings as of the beginning of the first reporting period in which the guidance is adopted, with two exceptions. The amendments related to equity investments without readily determinable fair values will be effective prospectively. The requirement to use the exit price notion to measure fair value of financial instruments for disclosure purposes will also be applied prospectively.
The Company does not expect a significant cumulative-effect adjustment to be recorded at adoption or any significant impact to the consolidated financial statements associated with the accounting for its current equity investments. The Company does anticipate financial statement disclosures to be impacted, specifically related to financial instruments measured at amortized cost whose fair values are disclosed under the “entry price” notion, but is currently still in the process of determining the impact.
FASB ASC Topic 606 “Revenue from Contracts with Customers” Update No. 2014-9. The FASB issued ASU No. 2014-9 in May 2014 which implements a common revenue standard and clarifies the principles used for recognizing revenue. The amendments in the ASU clarify that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. As part of that principle, the entity should identify the contract(s) with the customer, identify the performance obligation(s) of the contract, determine the transaction price, allocate that transaction price to the performance obligation(s), and then recognize revenue when or as the entity satisfies the performance obligation(s). The amendments also provide additional guidance/principles associated with gross vs. net presentation (i.e., principal versus agency considerations).
The amendments in ASU No. 2014-9 will be effective for the Company beginning January 1, 2018. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that annual reporting period. The amendments will be applied through the election of one of two retrospective methods.
The Company intends to adopt the amendments beginning January 1, 2018 and does not expect to recognize a significant cumulative adjustment to equity upon implementation of the standard. Further, the Company does not expect a significant impact to the Company’s consolidated statements of comprehensive income or consolidated balance sheets from either a presentation or timing perspective, but is still analyzing some contracts.
 

11

INVESTAR HOLDING CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 2. EARNINGS PER SHARE
The following is a summary of the information used in the computation of basic and diluted earnings per common share for the three months ended March 31, 2017 and 2016 (in thousands, except share data).
 
 
 
Three months ended March 31,
 
 
2017
 
2016
Net income available to common shareholders
 
$
1,864

 
$
1,990

Weighted average number of common shares outstanding used in computation of basic earnings per common share
 
7,205,942

 
7,194,558

Effect of dilutive securities:
 
 
 
 
Restricted stock
 
20,604

 
15,353

Stock options
 
26,838

 
14,854

Stock warrants
 
23,485

 
11,267

Weighted average number of common shares outstanding plus effect of dilutive securities used in computation of diluted earnings per common share
 
7,276,869

 
7,236,032

Basic earnings per share
 
$
0.26

 
$
0.28

Diluted earnings per share
 
$
0.26

 
$
0.28

 
 
NOTE 3. INVESTMENT SECURITIES
The amortized cost and approximate fair value of investment securities classified as available for sale are summarized below as of the dates presented (dollars in thousands).
 
 
 
Amortized Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
March 31, 2017
 
 
 
 
Obligations of other U.S. government agencies and corporations
 
$
40,555

 
$
65

 
$
(320
)
 
$
40,300

Obligations of state and political subdivisions
 
28,715

 
36

 
(1,063
)
 
27,688

Corporate bonds
 
15,271

 
51

 
(348
)
 
14,974

Residential mortgage-backed securities
 
88,604

 
167

 
(744
)
 
88,027

Commercial mortgage-backed securities
 
2,507

 

 
(62
)
 
2,445

Equity securities
 
711

 
48

 
(54
)
 
705

Total
 
$
176,363

 
$
367

 
$
(2,591
)
 
$
174,139

 
 
 
Amortized Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
December 31, 2016
 
 
 
 
Obligations of other U.S. government agencies and corporations
 
$
29,809

 
$
68

 
$
(387
)
 
$
29,490

Obligations of state and political subdivisions
 
29,631

 
15

 
(1,791
)
 
27,855

Corporate bonds
 
15,292

 
54

 
(378
)
 
14,968

Residential mortgage-backed securities
 
88,295

 
193

 
(900
)
 
87,588

Commercial mortgage-backed securities
 
2,520

 

 
(76
)
 
2,444

Equity securities
 
711

 
46

 
(51
)
 
706

Total
 
$
166,258

 
$
376

 
$
(3,583
)
 
$
163,051


 

12

INVESTAR HOLDING CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The amortized cost and approximate fair value of investment securities classified as held to maturity are summarized below as of the dates presented (dollars in thousands).
 
 
 
Amortized Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
March 31, 2017
 
 
 
 
Obligations of state and political subdivisions
 
$
12,870

 
$
7

 
$
(172
)
 
$
12,705

Residential mortgage-backed securities
 
6,778

 
5

 
(66
)
 
6,717

Total
 
$
19,648

 
$
12

 
$
(238
)
 
$
19,422

 
 
 
Amortized Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
December 31, 2016
 
 
 
 
Obligations of state and political subdivisions
 
$
12,976

 
$
2

 
$
(429
)
 
$
12,549

Residential mortgage-backed securities
 
7,115

 
8

 
(60
)
 
7,063

Total
 
$
20,091

 
$
10

 
$
(489
)
 
$
19,612

 
Securities are classified in the consolidated balance sheets according to management’s intent. The Company had no securities classified as trading as of March 31, 2017 or December 31, 2016.
The aggregate fair values and aggregate unrealized losses on securities whose fair values are below book values are summarized in the tables below. Due to the nature of the investment and current market prices, these unrealized losses are considered a temporary impairment of the securities.
The following table presents, by type and number of securities, the age of gross unrealized losses and approximate fair value by investment category for securities available for sale as of the dates presented (dollars in thousands).
 
 
 
 
 
Less than 12 Months
 
12 Months or More
 
Total
 
 
Count
 
Fair Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
March 31, 2017
 
 
 
 
 
 
 
Obligations of other U.S. government agencies and corporations
 
47

 
$
25,563

 
$
(316
)
 
$
440

 
$
(4
)
 
$
26,003

 
$
(320
)
Obligations of state and political subdivisions
 
22

 
23,027

 
(1,063
)
 

 

 
23,027

 
(1,063
)
Corporate bonds
 
25

 
2,745

 
(103
)
 
7,180

 
(245
)
 
9,925

 
(348
)
Residential mortgage-backed securities
 
104

 
56,232

 
(732
)
 
1,988

 
(12
)
 
58,220

 
(744
)
Commercial mortgage-backed securities
 
4

 
2,445

 
(62
)
 

 

 
2,445

 
(62
)
Equity securities
 
3

 
5

 
(1
)
 
486

 
(53
)
 
491

 
(54
)
Total
 
205

 
$
110,017

 
$
(2,277
)
 
$
10,094

 
$
(314
)
 
$
120,111

 
$
(2,591
)
 
 
 
 
 
Less than 12 Months
 
12 Months or More
 
Total
 
 
Count
 
Fair Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
December 31, 2016
 
 
 
 
 
 
 
Obligations of other U.S. government agencies and corporations
 
45

 
$
22,819

 
$
(382
)
 
$
448

 
$
(5
)
 
$
23,267

 
$
(387
)
Obligations of state and political subdivisions
 
33

 
25,764

 
(1,791
)
 

 

 
25,764

 
(1,791
)
Corporate bonds
 
27

 
3,724

 
(132
)
 
6,929

 
(246
)
 
10,653

 
(378
)
Residential mortgage-backed securities
 
110

 
60,433

 
(883
)
 
1,778

 
(17
)
 
62,211

 
(900
)
Commercial mortgage-backed securities
 
4

 
2,444

 
(76
)
 

 

 
2,444

 
(76
)
Equity securities
 
3

 
50

 
(4
)
 
492

 
(47
)
 
542

 
(51
)
Total
 
222

 
$
115,234

 
$
(3,268
)
 
$
9,647

 
$
(315
)
 
$
124,881

 
$
(3,583
)

13

INVESTAR HOLDING CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

 
The following table presents, by type and number of securities, the age of gross unrealized losses and approximate fair value by investment category for securities held to maturity as of the dates presented (dollars in thousands).
 
 
 
 
 
Less than 12 Months
 
12 Months or More
 
Total
 
 
Count
 
Fair Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
March 31, 2017
 
 
 
 
 
 
 
Obligations of state and political subdivisions
 
3

 
$
8,048

 
$
(172
)
 
$

 
$

 
$
8,048

 
$
(172
)
Residential mortgage-backed securities
 
6

 
4,494

 
(66
)
 

 

 
4,494

 
(66
)
Total
 
9

 
$
12,542

 
$
(238
)
 
$

 
$

 
$
12,542

 
$
(238
)

 
 
 
 
Less than 12 Months
 
12 Months or More
 
Total
 
 
Count
 
Fair Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
 
Fair Value
 
Unrealized
Losses
December 31, 2016
 
 
 
 
 
 
 
Obligations of state and political subdivisions
 
5

 
$
9,597

 
$
(429
)
 
$

 
$

 
$
9,597

 
$
(429
)
Residential mortgage-backed securities
 
6

 
4,677

 
(60
)
 

 

 
4,677

 
(60
)
Total
 
11

 
$
14,274

 
$
(489
)
 
$

 
$

 
$
14,274

 
$
(489
)
 
The unrealized losses in the Company’s investment portfolio, caused by interest rate increases, are not credit issues and the Company does not intend to sell the securities. Furthermore, it is not more likely than not that the Company will be required to sell the securities before recovery of their amortized cost bases. The Company does not consider these securities to be other-than-temporarily impaired at March 31, 2017 or December 31, 2016.
The weighted average tax equivalent yield, amortized cost and approximate fair value of debt securities, by contractual maturity (including mortgage-backed securities), are shown below as of the dates presented. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties (dollars in thousands).
 
 
 
Securities Available for Sale
 
Securities Held to Maturity
 
 
Weighted
Average T.E.
Yield
 
Amortized
Cost
 
Fair
Value
 
Weighted
Average T.E.
Yield
 
Amortized
Cost
 
Fair
Value
March 31, 2017
 
 
 
 
 
 
Due within one year
 
2.05
%
 
$
900

 
$
898

 
7.17
%
 
$
685

 
$
686

Due after one year through five years
 
2.33

 
11,641

 
11,654

 
7.17

 
3,095

 
3,100

Due after five years through ten years
 
2.93

 
26,963

 
26,611

 
7.17

 
2,745

 
2,730

Due after ten years
 
2.53

 
136,148

 
134,271

 
3.54

 
13,123

 
12,906

Total debt securities
 
 

 
$
175,652

 
$
173,434

 
 

 
$
19,648

 
$
19,422

 
 
 
Securities Available for Sale
 
Securities Held to Maturity
 
 
Weighted
Average T.E.
Yield
 
Amortized
Cost
 
Fair
Value
 
Weighted
Average T.E.
Yield
 
Amortized
Cost
 
Fair
Value
December 31, 2016
 
 
 
 
 
 
Due within one year
 
1.61
%
 
$
1,753

 
$
1,750

 
7.17
%
 
$
685

 
$
686

Due after one year through five years
 
2.27

 
10,509

 
10,476

 
7.17

 
3,095

 
3,089

Due after five years through ten years
 
2.77

 
27,173

 
26,771

 
7.17

 
2,745

 
2,637

Due after ten years
 
2.51

 
126,112

 
123,348

 
3.17

 
13,566

 
13,200

Total debt securities
 
 

 
$
165,547

 
$
162,345

 
 

 
$
20,091

 
$
19,612


 

14

INVESTAR HOLDING CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 4. LOANS
The Company’s loan portfolio consists of the following categories of loans as of the dates presented (dollars in thousands).
 
 
 
March 31, 2017
 
December 31, 2016
Construction and development
 
$
95,541

 
$
90,737

1-4 Family
 
172,148

 
177,205

Multifamily
 
47,776

 
42,759

Farmland
 
7,994

 
8,207

Commercial real estate
 
392,464

 
380,716

Total mortgage loans on real estate
 
715,923

 
699,624

Commercial and industrial
 
90,352

 
85,377

Consumer
 
95,873

 
108,425

Total loans
 
$
902,148

 
$
893,426

 
The table below provides an analysis of the aging of loans as of the dates presented (dollars in thousands).
 
 
 
March 31, 2017
 
 
Past Due and Accruing
 
 
 
 
 
 
 
 
 
 
30-59 days
 
60-89 days
 
90 or more
days
 
Nonaccrual
 
Total Past
Due &
Nonaccrual
 
Current
 
Total Loans
Construction and development
 
$

 
$

 
$

 
$
478

 
$
478

 
$
95,063

 
$
95,541

1-4 Family
 

 

 

 
46

 
46

 
172,102

 
172,148

Multifamily
 

 

 

 

 

 
47,776

 
47,776

Farmland
 

 

 

 

 

 
7,994

 
7,994

Commercial real estate
 

 

 

 

 

 
392,464

 
392,464

Total mortgage loans on real estate
 

 

 

 
524

 
524

 
715,399

 
715,923

Commercial and industrial
 
24

 
5

 

 
438

 
467

 
89,885

 
90,352

Consumer
 
122

 
74

 
8

 
1,173

 
1,377

 
94,496

 
95,873

Total loans
 
$
146

 
$
79

 
$
8

 
$
2,135

 
$
2,368

 
$
899,780

 
$
902,148

 
 
 
December 31, 2016
 
 
Past Due and Accruing
 
 
 
 
 
 
 
 
 
 
30-59 days
 
60-89 days
 
90 or more
days
 
Nonaccrual
 
Total Past
Due &
Nonaccrual
 
Current
 
Total Loans
Construction and development
 
$
48

 
$

 
$

 
$
480

 
$
528

 
$
90,209

 
$
90,737

1-4 Family
 
427

 

 

 
47

 
474

 
176,731

 
177,205

Multifamily
 

 

 

 

 

 
42,759

 
42,759

Farmland
 

 

 

 

 

 
8,207

 
8,207

Commercial real estate
 

 

 

 

 

 
380,716

 
380,716

Total mortgage loans on real estate
 
475

 

 

 
527

 
1,002

 
698,622

 
699,624

Commercial and industrial
 
30

 

 

 
443

 
473

 
84,904

 
85,377

Consumer
 
378

 
149

 
1

 
1,008

 
1,536

 
106,889

 
108,425

Total loans
 
$
883

 
$
149

 
$
1

 
$
1,978

 
$
3,011

 
$
890,415

 
$
893,426

 

15

INVESTAR HOLDING CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Credit Quality Indicators
Loans are categorized into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The following definitions are utilized for risk ratings, which are consistent with the definitions used in supervisory guidance:
Pass - Loans not meeting the criteria below are considered pass. These loans have high credit characteristics and financial strength. The borrowers at least generate profits and cash flow that are in line with peer and industry standards and have debt service coverage ratios above loan covenants and our policy guidelines. For some of these loans, a guaranty from a financially capable party mitigates characteristics of the borrower that might otherwise result in a lower grade.
Special Mention - Loans classified as special mention possess some credit deficiencies that need to be corrected to avoid a greater risk of default in the future. For example, financial ratios relating to the borrower may have deteriorated. Often, a special mention categorization is temporary while certain factors are analyzed or matters addressed before the loan is re-categorized as either pass or substandard.
Substandard - Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the borrower or the liquidation value of any collateral. If deficiencies are not addressed, it is likely that this category of loan will result in the Bank incurring a loss. Where a borrower has been unable to adjust to industry or general economic conditions, the borrower’s loan is often categorized as substandard.
Doubtful - Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
Loss - Loans classified as loss are considered uncollectible and of such little value that their continuance as recorded assets is not warranted. This classification does not mean that the assets have absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off these assets.
The table below presents the Company’s loan portfolio by category and credit quality indicator as of the dates presented (dollars in thousands).
 
 
 
March 31, 2017
 
 
Pass
 
Special
Mention
 
Substandard
 
Total
Construction and development
 
$
95,044

 
$

 
$
497

 
$
95,541

1-4 Family
 
172,056

 

 
92

 
172,148

Multifamily
 
46,919

 

 
857

 
47,776

Farmland
 
7,994

 

 

 
7,994

Commercial real estate
 
391,892

 

 
572

 
392,464

Total mortgage loans on real estate
 
713,905

 

 
2,018

 
715,923

Commercial and industrial
 
87,349

 

 
3,003

 
90,352

Consumer
 
94,278

 
422

 
1,173

 
95,873

Total loans
 
$
895,532

 
$
422

 
$
6,194

 
$
902,148

 

16

INVESTAR HOLDING CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

 
 
December 31, 2016
 
 
Pass
 
Special
Mention
 
Substandard
 
Total
Construction and development
 
$
90,238

 
$

 
$
499

 
$
90,737

1-4 Family
 
177,091

 
20

 
94

 
177,205

Multifamily
 
42,759

 

 

 
42,759

Farmland
 
8,207

 

 

 
8,207

Commercial real estate
 
380,716

 

 

 
380,716

Total mortgage loans on real estate
 
699,011

 
20

 
593

 
699,624

Commercial and industrial
 
83,215

 
59

 
2,103

 
85,377

Consumer
 
106,916

 
501

 
1,008

 
108,425

Total loans
 
$
889,142

 
$
580

 
$
3,704

 
$
893,426

 
 
The Company had no loans that were classified as doubtful or loss as of March 31, 2017 or December 31, 2016.
Loan participations and whole loans sold to and serviced for others are not included in the accompanying consolidated balance sheets. The balances of the participations and whole loans sold were $248.6 million and $274.9 million as of March 31, 2017 and December 31, 2016, respectively. The unpaid principal balances of these loans were approximately $295.8 million and $319.6 million as of March 31, 2017 and December 31, 2016, respectively.
In the ordinary course of business, the Company makes loans to its executive officers, principal stockholders, directors and to companies in which these individuals are principal owners. Loans outstanding to such related party borrowers (including companies in which they are principal owners) amounted to approximately $20.7 million and $20.0 million as of March 31, 2017 and December 31, 2016, respectively. These loans are all current and performing according to the original terms. These loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons not related to the Company or the Bank and did not involve more than normal risk of collectability or present other unfavorable features.
The table below shows the aggregate amount of loans to such related parties as of the dates presented (dollars in thousands).
 
 
 
March 31, 2017
 
December 31, 2016
Balance, beginning of period
 
$
19,957

 
$
17,992

New loans
 
2,462

 
5,058

Repayments and changes in relationship
 
(1,731
)
 
(3,093
)
Balance, end of period
 
$
20,688

 
$
19,957

 
 

17

INVESTAR HOLDING CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Loans Acquired with Deteriorated Credit Quality
The Company elected to account for certain loans acquired as acquired impaired loans under ASC 310-30 due to evidence of credit deterioration at acquisition and the probability that the Company will be unable to collect all contractually required payments.
The following table presents changes in the carrying value, net of allowance for loan losses, of acquired impaired loans, or loans accounted for under ASC 310-30, for the periods presented (dollars in thousands).
 
 
Acquired
Impaired
 
 
Carrying value, net at December 31, 2015
 
$
2,690

Accretion to interest income
 
121

Net transfers from (to) nonaccretable difference to (from) accretable yield
 
1

Payments received, net
 
(551
)
Charge-offs
 
(85
)
Carrying value, net at December 31, 2016
 
$
2,176

Accretion to interest income
 
25

Payments received, net
 
(8
)
Carrying value, net at March 31, 2017
 
$
2,193

 
The table below shows the changes in the accretable yield on acquired impaired loans for the periods presented (dollars in thousands).
 
 
Acquired
Impaired
 
 
Balance, period ended December 31, 2015
 
$
395

Net transfers from (to) nonaccretable difference to (from) accretable yield
 
1

Accretion to interest income
 
(121
)
Balance, period ended December 31, 2016
 
$
275

Accretion to interest income
 
(25
)
Balance, period ended March 31, 2017
 
$
250

 
 
NOTE 5. ALLOWANCE FOR LOAN LOSSES
The table below shows a summary of the activity in the allowance for loan losses for the three months ended March 31, 2017 and 2016 (dollars in thousands).
 
 
 
Three months ended March 31,
 
 
2017
 
2016
Balance, beginning of period
 
$
7,051

 
$
6,128

Provision for loan losses
 
350

 
454

Loans charged off
 
(166
)
 
(156
)
Recoveries
 
8

 
37

Balance, end of period
 
$
7,243

 
$
6,463

 
 

18

INVESTAR HOLDING CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The following tables outline the activity in the allowance for loan losses by collateral type for the three months ended March 31, 2017 and 2016, and show both the allowances and portfolio balances for loans individually and collectively evaluated for impairment as of March 31, 2017 and 2016 (dollars in thousands).
  
 
 
Three months ended March 31, 2017
 
 
Construction &
Development
 
Farmland
 
1-4
Family
 
Multifamily
 
Commercial
Real Estate
 
Commercial &
Industrial
 
Consumer
 
Total
Allowance for loan losses:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Beginning balance
 
$
579

 
$
60

 
$
1,377

 
$
355

 
$
2,499

 
$
759

 
$
1,422

 
7,051

Provision
 
112

 
(6
)
 
(141
)
 
19

 
409

 
(15
)
 
(28
)
 
350

Charge-offs
 

 

 

 

 

 

 
(166
)
 
(166
)
Recoveries
 
3

 

 
1

 

 

 

 
4

 
8

Ending balance
 
$
694

 
$
54

 
$
1,237

 
$
374

 
$
2,908

 
$
744

 
$
1,232

 
$
7,243

Ending allowance balance for loans individually evaluated for impairment
 

 

 

 

 

 
130

 
329

 
459

Ending allowance balance for loans collectively evaluated for impairment
 
$
694

 
$
54

 
$
1,237