UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
(Mark One)
x |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2015
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
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 x 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 x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer |
¨ |
Accelerated filer |
¨ |
|
|
|
|
Non-accelerated filer |
x (Do not check if a smaller reporting company) |
Smaller reporting company |
¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
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, 7,293,612 shares outstanding as of May 8, 2015.
TABLE OF CONTENTS
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. Factors that could have a material effect on the Company’s business, financial condition, results of operations and future growth prospects can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 that the Company filed with the SEC on March 31, 2015 and Part II, Item 1A. – Risk Factors, of this Quarterly Report on Form 10-Q. Additional risk factors may also be described in reports that the Company files from time to time with the SEC.
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
INVESTAR HOLDING CORPORATION
(Amounts in thousands, except share data)
|
March 31, 2015 |
|
|
December 31, 2014 |
|
||
|
(Unaudited) |
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
Cash and due from banks |
$ |
6,879 |
|
|
$ |
5,519 |
|
Interest-bearing balances due from other banks |
|
13,617 |
|
|
|
13,493 |
|
Federal funds sold |
|
170 |
|
|
|
500 |
|
Cash and cash equivalents |
|
20,666 |
|
|
|
19,512 |
|
|
|
|
|
|
|
|
|
Available for sale securities at fair value (amortized cost of $75,736 and $69,838, respectively) |
|
76,617 |
|
|
|
70,299 |
|
Held to maturity securities at amortized cost (estimated fair value of $22,321 and $22,301, respectively) |
|
22,369 |
|
|
|
22,519 |
|
Loans held for sale |
|
64,313 |
|
|
|
103,396 |
|
Loans, net of allowance for loan losses of $5,379 and $4,630, respectively |
|
641,060 |
|
|
|
618,160 |
|
Other equity securities |
|
1,839 |
|
|
|
5,566 |
|
Bank premises and equipment, net of accumulated depreciation of $4,310 and $3,964, respectively |
|
29,136 |
|
|
|
28,538 |
|
Other real estate owned, net |
|
2,568 |
|
|
|
2,735 |
|
Accrued interest receivable |
|
2,316 |
|
|
|
2,435 |
|
Deferred tax asset |
|
2,260 |
|
|
|
2,906 |
|
Goodwill and other intangibles |
|
3,206 |
|
|
|
3,216 |
|
Other assets |
|
1,730 |
|
|
|
1,882 |
|
Total assets |
$ |
868,080 |
|
|
$ |
881,164 |
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
Noninterest-bearing |
$ |
84,402 |
|
|
$ |
70,217 |
|
Interest-bearing |
|
614,490 |
|
|
|
557,901 |
|
Total deposits |
|
698,892 |
|
|
|
628,118 |
|
Advances from Federal Home Loan Bank |
|
34,865 |
|
|
|
125,785 |
|
Repurchase agreements |
|
12,878 |
|
|
|
12,293 |
|
Note payable |
|
3,609 |
|
|
|
3,609 |
|
Accrued taxes and other liabilities |
|
12,449 |
|
|
|
7,975 |
|
Total liabilities |
|
762,693 |
|
|
|
777,780 |
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
Preferred stock, $1.00 par value per share; 5,000,000 shares authorized |
|
- |
|
|
|
- |
|
Common stock, $1.00 par value per share; 40,000,000 shares authorized; 7,268,488 and 7,262,085 shares issued and outstanding, respectively |
|
7,271 |
|
|
|
7,264 |
|
Treasury stock |
|
(25 |
) |
|
|
(23 |
) |
Surplus |
|
84,283 |
|
|
|
84,213 |
|
Retained earnings |
|
13,705 |
|
|
|
11,809 |
|
Accumulated other comprehensive income |
|
153 |
|
|
|
121 |
|
Total stockholders' equity |
|
105,387 |
|
|
|
103,384 |
|
Total liabilities and stockholders' equity |
$ |
868,080 |
|
|
$ |
881,164 |
|
|
|
|
|
|
|
|
|
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, |
|
|||||
|
2015 |
|
|
2014 |
|
||
|
|
|
|
|
|
|
|
INTEREST INCOME |
|
|
|
|
|
|
|
Interest and fees on loans |
$ |
8,298 |
|
|
$ |
6,675 |
|
Interest on investment securities |
|
485 |
|
|
|
272 |
|
Other interest income |
|
17 |
|
|
|
10 |
|
Total interest income |
|
8,800 |
|
|
|
6,957 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE |
|
|
|
|
|
|
|
Interest on deposits |
|
1,192 |
|
|
|
1,003 |
|
Interest on borrowings |
|
109 |
|
|
|
87 |
|
Total interest expense |
|
1,301 |
|
|
|
1,090 |
|
Net interest income |
|
7,499 |
|
|
|
5,867 |
|
|
|
|
|
|
|
|
|
Provision for loan losses |
|
700 |
|
|
|
245 |
|
Net interest income after provision for loan losses |
|
6,799 |
|
|
|
5,622 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST INCOME |
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
94 |
|
|
|
63 |
|
Gain on sale of investment securities, net |
|
- |
|
|
|
116 |
|
Loss on sale of real estate owned, net |
|
(1 |
) |
|
|
(3 |
) |
Gain on sale of loans, net |
|
1,731 |
|
|
|
624 |
|
Fee income on loans held for sale, net |
|
300 |
|
|
|
76 |
|
Other operating income |
|
416 |
|
|
|
190 |
|
Total noninterest income |
|
2,540 |
|
|
|
1,066 |
|
Income before noninterest expense |
|
9,339 |
|
|
|
6,688 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EXPENSE |
|
|
|
|
|
|
|
Depreciation and amortization |
|
357 |
|
|
|
303 |
|
Salaries and employee benefits |
|
3,908 |
|
|
|
3,471 |
|
Occupancy |
|
213 |
|
|
|
224 |
|
Data processing |
|
340 |
|
|
|
278 |
|
Marketing |
|
58 |
|
|
|
76 |
|
Professional fees |
|
262 |
|
|
|
59 |
|
Other operating expenses |
|
1,286 |
|
|
|
974 |
|
Total noninterest expense |
|
6,424 |
|
|
|
5,385 |
|
Income before income tax expense |
|
2,915 |
|
|
|
1,303 |
|
Income tax expense |
|
965 |
|
|
|
424 |
|
Net income |
$ |
1,950 |
|
|
$ |
879 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER SHARE |
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.27 |
|
|
$ |
0.23 |
|
Diluted earnings per share |
$ |
0.27 |
|
|
$ |
0.21 |
|
Cash dividends declared per common share |
$ |
0.01 |
|
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|
See accompanying notes to the consolidated financial statements. |
|
5
INVESTAR HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands, except share data)
(Unaudited)
|
Three months ended |
|
|||||
|
March 31, |
|
|||||
|
2015 |
|
|
2014 |
|
||
|
|
|
|
|
|
|
|
Net income |
$ |
1,950 |
|
|
$ |
879 |
|
Other comprehensive income: |
|
|
|
|
|
|
|
Unrealized gains on investment securities: |
|
|
|
|
|
|
|
Reclassification of realized gains, net of tax expense (benefit) of $0 and $(39), respectively |
|
- |
|
|
|
(77 |
) |
Unrealized gains, available for sale, net of tax expense of $143 and $104, respectively |
|
278 |
|
|
|
202 |
|
Unrealized (loss) gains, transfer from available for sale to held to maturity, net of tax expense of $0 and $10, respectively |
|
(1 |
) |
|
|
19 |
|
Fair value of derivative financial instruments: |
|
|
|
|
|
|
|
Change in fair value of interest rate swap designated as a cash flow hedge, net of tax (benefit) expense of $(126) and $0, respectively |
|
(245 |
) |
|
|
- |
|
Total other comprehensive income |
|
32 |
|
|
|
144 |
|
Total comprehensive income |
$ |
1,982 |
|
|
$ |
1,023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
Total |
|
||
|
Common |
|
|
Treasury |
|
|
|
|
|
|
Retained |
|
|
Comprehensive |
|
|
Stockholders' |
|
|||||
|
Stock |
|
|
Stock |
|
|
Surplus |
|
|
Earnings |
|
|
Income (Loss) |
|
|
Equity |
|
||||||
Balance, December 31, 2013 |
$ |
3,943 |
|
|
$ |
- |
|
|
$ |
45,281 |
|
|
$ |
6,609 |
|
|
$ |
(350 |
) |
|
$ |
55,483 |
|
Common stock issued in offering, net of direct cost of $4,266 |
|
3,285 |
|
|
|
- |
|
|
|
38,443 |
|
|
|
- |
|
|
|
- |
|
|
|
41,728 |
|
Warrants exercised |
|
22 |
|
|
|
- |
|
|
|
275 |
|
|
|
- |
|
|
|
- |
|
|
|
297 |
|
Surrendered shares |
|
- |
|
|
|
(17 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(17 |
) |
Shares repurchased |
|
|
|
|
|
(6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6 |
) |
Dividends declared, $0.04 per share |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(197 |
) |
|
|
- |
|
|
|
(197 |
) |
Stock-based compensation |
|
14 |
|
|
|
- |
|
|
|
214 |
|
|
|
- |
|
|
|
- |
|
|
|
228 |
|
Net income |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5,397 |
|
|
|
- |
|
|
|
5,397 |
|
Other comprehensive income, net |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
471 |
|
|
|
471 |
|
Balance, December 31, 2014 |
$ |
7,264 |
|
|
$ |
(23 |
) |
|
$ |
84,213 |
|
|
$ |
11,809 |
|
|
$ |
121 |
|
|
$ |
103,384 |
|
Surrendered shares |
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2 |
) |
Dividends declared, $0.01 per share |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(54 |
) |
|
|
- |
|
|
|
(54 |
) |
Stock-based compensation |
|
7 |
|
|
|
- |
|
|
|
70 |
|
|
|
- |
|
|
|
- |
|
|
|
77 |
|
Net income |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,950 |
|
|
|
- |
|
|
|
1,950 |
|
Other comprehensive income, net |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
32 |
|
|
|
32 |
|
Balance, March 31, 2015 (Unaudited) |
$ |
7,271 |
|
|
$ |
(25 |
) |
|
$ |
84,283 |
|
|
$ |
13,705 |
|
|
$ |
153 |
|
|
$ |
105,387 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to the consolidated financial statements. |
|
7
INVESTAR HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands, except share data)
(Unaudited)
|
|
For the three months ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2015 |
|
|
2014 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
1,950 |
|
|
$ |
879 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
357 |
|
|
|
303 |
|
Amortization (accretion) of premium (discount) on securities, net |
|
|
251 |
|
|
|
235 |
|
Amortization of purchase accounting adjustments |
|
|
(70 |
) |
|
|
(101 |
) |
Provision for loan losses |
|
|
700 |
|
|
|
245 |
|
Provision for other real estate owned |
|
|
12 |
|
|
|
10 |
|
Gain on sale of securities |
|
|
- |
|
|
|
(116 |
) |
Loss on sale of other real estate owned |
|
|
1 |
|
|
|
3 |
|
FHLB stock dividend |
|
|
(3 |
) |
|
|
(2 |
) |
Stock-based compensation |
|
|
77 |
|
|
|
41 |
|
Other |
|
|
11 |
|
|
|
- |
|
Loans held for sale: |
|
|
|
|
|
|
|
|
Originations |
|
|
(102,886 |
) |
|
|
(36,401 |
) |
Proceeds from sales |
|
|
143,699 |
|
|
|
16,722 |
|
Gain on sale of loans |
|
|
(1,731 |
) |
|
|
(624 |
) |
Net change in: |
|
|
|
|
|
|
|
|
Accrued interest receivable |
|
|
119 |
|
|
|
67 |
|
Deferred tax asset |
|
|
646 |
|
|
|
(22 |
) |
Other assets |
|
|
152 |
|
|
|
421 |
|
Accrued taxes and other liabilities |
|
|
4,082 |
|
|
|
436 |
|
Net cash provided by (used in) operating activities |
|
|
47,367 |
|
|
|
(17,904 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Purchases of investment securities available for sale |
|
|
(8,616 |
) |
|
|
(19,437 |
) |
Proceeds from paydowns, redemptions and maturities of securities available for sale |
|
|
2,462 |
|
|
|
12,499 |
|
Proceeds from paydowns, redemptions and maturities of securities held to maturity |
|
|
143 |
|
|
|
14 |
|
Proceeds from sale of loans |
|
|
- |
|
|
|
23,482 |
|
Proceeds from redemptions of other equity securities |
|
|
5,356 |
|
|
|
348 |
|
Purchases of other equity securities |
|
|
(1,625 |
) |
|
|
(430 |
) |
Net increase in loans |
|
|
(23,819 |
) |
|
|
(47,684 |
) |
Proceeds from sales of other real estate owned |
|
|
417 |
|
|
|
88 |
|
Purchases of premises, equipment and software |
|
|
(945 |
) |
|
|
(1,889 |
) |
Net cash used in investing activities |
|
|
(26,627 |
) |
|
|
(33,009 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Net increase in customer deposits |
|
|
70,800 |
|
|
|
31,635 |
|
Net increase in repurchase agreements |
|
|
585 |
|
|
|
2,577 |
|
Net (decrease) increase in short-term FHLB advances |
|
|
(90,639 |
) |
|
|
3,830 |
|
Proceeds from long-term FHLB advances |
|
|
500 |
|
|
|
- |
|
Repayment of long-term FHLB advances |
|
|
(781 |
) |
|
|
(430 |
) |
Cash dividends paid on common stock |
|
|
(51 |
) |
|
|
(48 |
) |
Net cash (used in) provided by financing activities |
|
|
(19,586 |
) |
|
|
37,564 |
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
1,154 |
|
|
|
(13,349 |
) |
Cash and cash equivalents, beginning of period |
|
|
19,512 |
|
|
|
28,203 |
|
Cash and cash equivalents, end of period |
|
$ |
20,666 |
|
|
$ |
14,854 |
|
|
|
|||||||
|
|
|||||||
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, 2015 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, 2014, 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 31, 2015.
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 11 full service banking offices located throughout its market and had 177 employees at March 31, 2015.
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 financial statements in conformity with 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 susceptible to a significant change in the near term are the allowance for loan losses, the fair value of financial instruments and the determination of other-than-temporary impairments of securities.
Reclassifications
Certain reclassifications have been made to the 2014 financial statements to be consistent with the 2015 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 has 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.
Recent Accounting Pronouncements
FASB ASC Topic 835-30 “Interest-Imputation of Interest” Update No. 2015-03. The Financial Accounting Standards Board (the “FASB”) issued Update No. 2015-03 in April 2015 as part of its initiative to reduce complexity in the accounting standards. To simplify presentation of debt issuance costs, the amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. For public entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial position.
9
INVESTAR HOLDING CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
FASB ASC Topic 810 “Consolidation” Update No. 2015-02. The FASB issued Update No. 2015-02 in February 2015 to respond to stakeholders’ concerns about the current accounting for consolidation of certain legal entities. The amendments in the update change the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities and are effective for public entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial position.
FASB ASC Topic 225-20 “Income Statement – Extraordinary and Unusual Items” Update No. 2015-01. The FASB issued Update No. 2015-01 in January 2015 as part of its initiative to reduce complexity in accounting standards. This update eliminates from GAAP the concept of extraordinary items. The amendments in the update are effective for the annual period ending after December 15, 2015. Early adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial position.
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, 2015 and 2014 (dollars in thousands, except share data):
|
Three months ended March 31, |
|
|||||
|
2015 |
|
|
2014 |
|
||
|
|
|
|||||
Net income available to common shareholders |
$ |
1,950 |
|
|
$ |
879 |
|
Weighted average number of common shares outstanding used in computation of basic earnings per common share |
|
7,219,235 |
|
|
|
3,901,064 |
|
Effect of dilutive securities: |
|
|
|
|
|
|
|
Restricted stock |
|
12,738 |
|
|
|
44,049 |
|
Stock options |
|
9,961 |
|
|
|
22,810 |
|
Stock warrants |
|
8,921 |
|
|
|
193,498 |
|
Weighted average number of common shares outstanding plus effect of dilutive securities used in computation of diluted earnings per common share |
|
7,250,855 |
|
|
|
4,161,421 |
|
Basic earnings per share |
$ |
0.27 |
|
|
$ |
0.23 |
|
Diluted earnings per share |
$ |
0.27 |
|
|
$ |
0.21 |
|
NOTE 3. INVESTMENT SECURITIES
The amortized cost and approximate fair value of investment securities classified as available for sale are summarized as follows as of the dates presented (dollars in thousands):
|
|
|
|
|
|
Gross |
|
|
Gross |
|
|
|
|
|
||
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
Fair |
|
||||
March 31, 2015 |
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Value |
|
||||
Obligations of other U.S. government agencies and corporations |
|
$ |
6,868 |
|
|
$ |
50 |
|
|
$ |
(22 |
) |
|
$ |
6,896 |
|
Mortgage-backed securities |
|
|
48,461 |
|
|
|
699 |
|
|
|
(27 |
) |
|
|
49,133 |
|
Obligations of state and political subdivisions |
|
|
11,759 |
|
|
|
220 |
|
|
|
(40 |
) |
|
|
11,939 |
|
Corporate bonds |
|
|
7,841 |
|
|
|
47 |
|
|
|
(54 |
) |
|
|
7,834 |
|
Equity securities |
|
|
807 |
|
|
|
24 |
|
|
|
(16 |
) |
|
|
815 |
|
Total |
|
$ |
75,736 |
|
|
$ |
1,040 |
|
|
$ |
(159 |
) |
|
$ |
76,617 |
|
10
INVESTAR HOLDING CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
|
|
|
|
|
|
Gross |
|
|
Gross |
|
|
|
|
|
||
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
Fair |
|
||||
December 31, 2014 |
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Value |
|
||||
Obligations of other U.S. government agencies and corporations |
|
$ |
4,351 |
|
|
$ |
31 |
|
|
$ |
(22 |
) |
|
$ |
4,360 |
|
Mortgage-backed securities |
|
|
47,903 |
|
|
|
365 |
|
|
|
(22 |
) |
|
|
48,246 |
|
Obligations of state and political subdivisions |
|
|
11,616 |
|
|
|
181 |
|
|
|
(57 |
) |
|
|
11,740 |
|
Corporate bonds |
|
|
5,416 |
|
|
|
23 |
|
|
|
(20 |
) |
|
|
5,419 |
|
Equity securities |
|
|
552 |
|
|
|
- |
|
|
|
(18 |
) |
|
|
534 |
|
Total |
|
$ |
69,838 |
|
|
$ |
600 |
|
|
$ |
(139 |
) |
|
$ |
70,299 |
|
The amortized cost and approximate fair value of investment securities classified as held to maturity are summarized as follows as of the dates presented (dollars in thousands):
|
|
|
|
|
|
Gross |
|
|
Gross |
|
|
|
|
|
||
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
Fair |
|
||||
March 31, 2015 |
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Value |
|
||||
Obligations of other U.S. government agencies and corporations |
|
$ |
3,981 |
|
|
$ |
- |
|
|
$ |
(30 |
) |
|
$ |
3,951 |
|
Mortgage-backed securities |
|
|
3,416 |
|
|
|
14 |
|
|
|
(32 |
) |
|
|
3,398 |
|
Obligations of state and political subdivisions |
|
|
14,972 |
|
|
|
- |
|
|
|
- |
|
|
|
14,972 |
|
Total |
|
$ |
22,369 |
|
|
$ |
14 |
|
|
$ |
(62 |
) |
|
$ |
22,321 |
|
|
|
|
|
|
|
Gross |
|
|
Gross |
|
|
|
|
|
||
|
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
Fair |
|
||||
December 31, 2014 |
|
Cost |
|
|
Gains |
|
|
Losses |
|
|
Value |
|
||||
Obligations of other U.S. government agencies and corporations |
|
$ |
3,979 |
|
|
$ |
- |
|
|
$ |
(165 |
) |
|
$ |
3,814 |
|
Mortgage-backed securities |
|
|
3,469 |
|
|
|
5 |
|
|
|
(58 |
) |
|
|
3,416 |
|
Obligations of state and political subdivisions |
|
|
15,071 |
|
|
|
- |
|
|
|
- |
|
|
|
15,071 |
|
Total |
|
$ |
22,519 |
|
|
$ |
5 |
|
|
$ |
(223 |
) |
|
$ |
22,301 |
|
The Company had no securities classified as trading as of March 31, 2015 or December 31, 2014.
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 |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
Unrealized |
|
|
|
|
|
|
Unrealized |
|
|
|
|
|
|
Unrealized |
|
|||
March 31, 2015 |
|
Count |
|
|
Fair Value |
|