istr-10q_20150630.htm

 

 

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 June 30, 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, 7,292,235 shares outstanding as of August 7, 2015.

 

 

 

 

 


TABLE OF CONTENTS

 

Special Note Regarding Forward-Looking Statements

3

 

 

 

 

Part I. Financial Information

 

 

 

 

 

Item 1.

 

Financial Statements (Unaudited)

4

 

 

Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014

4

 

 

Consolidated Statements of Operations for the three and six months ended June 30, 2015 and 2014

5

 

 

Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2015 and 2014

6

 

 

Consolidated Statements of Changes in Stockholders’ Equity

7

 

 

Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014

8

 

 

Notes to the Consolidated Financial Statements

9

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

30

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

48

Item 4.

 

Controls and Procedures

48

 

 

 

 

Part II. Other Information

49

 

 

 

 

Item 1A.

 

Risk Factors

49

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

49

Item 6.

 

Exhibits

50

Signatures

51

Exhibit Index

52

 

 

 

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


PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

 

INVESTAR HOLDING CORPORATION

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)

 

 

June 30, 2015

 

 

December 31, 2014

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Cash and due from banks

$

7,541

 

 

$

5,519

 

Interest-bearing balances due from other banks

 

16,807

 

 

 

13,493

 

Federal funds sold

 

191

 

 

 

500

 

Cash and cash equivalents

 

24,539

 

 

 

19,512

 

 

 

 

 

 

 

 

 

Available for sale securities at fair value (amortized cost

   of $82,049 and $69,838, respectively)

 

82,236

 

 

 

70,299

 

Held to maturity securities at amortized cost (estimated

   fair value of $24,015 and $22,301, respectively)

 

24,230

 

 

 

22,519

 

Loans held for sale

 

78,212

 

 

 

103,396

 

Loans, net of allowance for loan losses of $5,728 and

   $4,630, respectively

 

667,858

 

 

 

618,160

 

Other equity securities

 

4,183

 

 

 

5,566

 

Bank premises and equipment, net of accumulated

   depreciation of $4,662 and $3,964, respectively

 

29,444

 

 

 

28,538

 

Other real estate owned, net

 

2,519

 

 

 

2,735

 

Accrued interest receivable

 

2,432

 

 

 

2,435

 

Deferred tax asset

 

1,624

 

 

 

1,097

 

Goodwill and other intangibles

 

3,195

 

 

 

3,216

 

Other assets

 

1,383

 

 

 

1,881

 

Total assets

$

921,855

 

 

$

879,354

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

Noninterest-bearing

$

86,339

 

 

$

70,217

 

Interest-bearing

 

619,668

 

 

 

557,901

 

Total deposits

 

706,007

 

 

 

628,118

 

Advances from Federal Home Loan Bank

 

79,066

 

 

 

125,785

 

Repurchase agreements

 

15,130

 

 

 

12,293

 

Note payable

 

3,609

 

 

 

3,609

 

Accrued taxes and other liabilities

 

11,170

 

 

 

6,165

 

Total liabilities

 

814,982

 

 

 

775,970

 

 

 

 

 

 

 

 

 

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; 7,293,209 and 7,262,085 shares

   outstanding, respectively

 

7,295

 

 

 

7,264

 

Treasury stock

 

(26

)

 

 

(23

)

Surplus

 

84,358

 

 

 

84,213

 

Retained earnings

 

15,461

 

 

 

11,809

 

Accumulated other comprehensive (loss) income

 

(215

)

 

 

121

 

Total stockholders' equity

 

106,873

 

 

 

103,384

 

Total liabilities and stockholders' equity

$

921,855

 

 

$

879,354

 

 

 

 

 

 

 

 

 

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

 

 

Six months ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

8,646

 

 

$

7,119

 

 

$

16,944

 

 

$

13,794

 

Interest on investment securities

 

 

523

 

 

 

278

 

 

 

1,008

 

 

 

550

 

Other interest income

 

 

18

 

 

 

10

 

 

 

35

 

 

 

20

 

Total interest income

 

 

9,187

 

 

 

7,407

 

 

 

17,987

 

 

 

14,364

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

1,299

 

 

 

1,050

 

 

 

2,491

 

 

 

2,053

 

Interest on borrowings

 

 

108

 

 

 

108

 

 

 

217

 

 

 

194

 

Total interest expense

 

 

1,407

 

 

 

1,158

 

 

 

2,708

 

 

 

2,247

 

Net interest income

 

 

7,780

 

 

 

6,249

 

 

 

15,279

 

 

 

12,117

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for loan losses

 

 

400

 

 

 

448

 

 

 

1,100

 

 

 

693

 

Net interest income after provision for loan losses

 

 

7,380

 

 

 

5,801

 

 

 

14,179

 

 

 

11,424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

97

 

 

 

73

 

 

 

191

 

 

 

136

 

Gain on sale of investment securities, net

 

 

134

 

 

 

48

 

 

 

134

 

 

 

165

 

Gain (loss) on sale of real estate owned, net

 

 

7

 

 

 

(5

)

 

 

6

 

 

 

(7

)

Gain on sale of loans, net

 

 

1,077

 

 

 

1,031

 

 

 

2,808

 

 

 

1,655

 

Fee income on loans held for sale, net

 

 

210

 

 

 

89

 

 

 

510

 

 

 

165

 

Other operating income

 

 

541

 

 

 

273

 

 

 

957

 

 

 

462

 

Total noninterest income

 

 

2,066

 

 

 

1,509

 

 

 

4,606

 

 

 

2,576

 

Income before noninterest expense

 

 

9,446

 

 

 

7,310

 

 

 

18,785

 

 

 

14,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

362

 

 

 

328

 

 

 

719

 

 

 

631

 

Salaries and employee benefits

 

 

3,971

 

 

 

3,491

 

 

 

7,879

 

 

 

6,962

 

Occupancy

 

 

225

 

 

 

181

 

 

 

438

 

 

 

406

 

Data processing

 

 

370

 

 

 

308

 

 

 

710

 

 

 

586

 

Marketing

 

 

62

 

 

 

71

 

 

 

120

 

 

 

147

 

Professional fees

 

 

237

 

 

 

197

 

 

 

499

 

 

 

256

 

Other operating expenses

 

 

1,455

 

 

 

1,153

 

 

 

2,741

 

 

 

2,128

 

Total noninterest expense

 

 

6,682

 

 

 

5,729

 

 

 

13,106

 

 

 

11,116

 

Income before income tax expense

 

 

2,764

 

 

 

1,581

 

 

 

5,679

 

 

 

2,884

 

Income tax expense

 

 

951

 

 

 

514

 

 

 

1,916

 

 

 

938

 

Net income

 

$

1,813

 

 

$

1,067

 

 

$

3,763

 

 

$

1,946

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

0.25

 

 

$

0.27

 

 

$

0.52

 

 

$

0.50

 

Diluted earnings per share

 

$

0.25

 

 

$

0.26

 

 

$

0.52

 

 

$

0.47

 

Cash dividends declared per common share

 

$

0.01

 

 

$

0.01

 

 

$

0.02

 

 

$

0.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to the consolidated financial statements.

 

 

 

 

5


INVESTAR HOLDING CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in thousands)

(Unaudited)

 

 

 

Three months ended

 

 

Six months ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

1,813

 

 

$

1,067

 

 

$

3,763

 

 

$

1,946

 

Other comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains on investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reclassification of realized (gains) losses, net of tax (expense) benefit

     of $(47), $16, $(47) and $56, respectively

 

 

(87

)

 

 

32

 

 

 

(87

)

 

 

108

 

Unrealized (losses) gains, available for sale, net of tax (benefit)

     expense of $(194), $114, $(51) and $137, respectively

 

 

(374

)

 

 

334

 

 

 

(96

)

 

 

402

 

Unrealized (losses) gains, transfer from available for sale to held to

      maturity, net of tax (benefit) expense of $(1), $6, $(1) and $6,

      respectively

 

 

(1

)

 

 

18

 

 

 

(2

)

 

 

18

 

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 $44, $0, $(82) and $0,

      respectively

 

 

94

 

 

 

-

 

 

 

(151

)

 

 

-

 

Total other comprehensive (loss) income

 

 

(368

)

 

 

384

 

 

 

(336

)

 

 

528

 

Total comprehensive income

 

$

1,445

 

 

$

1,451

 

 

$

3,427

 

 

$

2,474

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

(Loss) Income

 

 

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

 

 

 

 

 

(3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3

)

Dividends declared, $0.02 per share

 

-

 

 

 

-

 

 

 

-

 

 

 

(111

)

 

 

-

 

 

 

(111

)

Stock-based compensation

 

31

 

 

 

-

 

 

 

145

 

 

 

-

 

 

 

-

 

 

 

176

 

Net income

 

-

 

 

 

-

 

 

 

-

 

 

 

3,763

 

 

 

-

 

 

 

3,763

 

Other comprehensive loss, net

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(336

)

 

 

(336

)

Balance, June 30, 2015 (Unaudited)

$

7,295

 

 

$

(26

)

 

$

84,358

 

 

$

15,461

 

 

$

(215

)

 

$

106,873

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to the consolidated financial statements.

 

 

 

 

7


 

INVESTAR HOLDING CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

 

 

 

For the six months ended

 

 

 

June 30,

 

 

 

2015

 

 

2014

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

3,763

 

 

$

1,946

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

719

 

 

 

631

 

Amortization (accretion) of premium (discount) on securities, net

 

 

528

 

 

 

509

 

Amortization of purchase accounting adjustments

 

 

(121

)

 

 

(184

)

Provision for loan losses

 

 

1,100

 

 

 

693

 

Provision for other real estate owned

 

 

24

 

 

 

26

 

Gain on sale of securities

 

 

(134

)

 

 

(165

)

(Gain) loss on sale of other real estate owned

 

 

(6

)

 

 

7

 

FHLB stock dividend

 

 

(7

)

 

 

(3

)

Stock-based compensation

 

 

176

 

 

 

84

 

Other

 

 

11

 

 

 

-

 

Loans held for sale:

 

 

 

 

 

 

 

 

Originations

 

 

(210,350

)

 

 

(81,448

)

Proceeds from sales

 

 

238,341

 

 

 

55,281

 

Gain on sale of loans

 

 

(2,808

)

 

 

(1,655

)

Net change in:

 

 

 

 

 

 

 

 

Accrued interest receivable

 

 

3

 

 

 

(86

)

Deferred tax asset

 

 

(349

)

 

 

90

 

Other assets

 

 

533

 

 

 

(42

)

Accrued taxes and other liabilities

 

 

4,759

 

 

 

1,920

 

Net cash provided by (used in) operating activities

 

 

36,182

 

 

 

(22,396

)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of investment securities available for sale

 

 

(24,095

)

 

 

(29,559

)

Purchases of investment securities held to maturity

 

 

(2,182

)

 

 

(7,470

)

Proceeds from the sale of investment securities available for sale

 

 

6,217

 

 

 

16,497

 

Proceeds from paydowns, redemptions and maturities of securities available for sale

 

 

5,248

 

 

 

4,172

 

Proceeds from paydowns, redemptions and maturities of securities held to maturity

 

 

449

 

 

 

27

 

Proceeds from sale of loans

 

 

-

 

 

 

61,745

 

Proceeds from redemptions of other equity securities

 

 

5,355

 

 

 

348

 

Purchases of other equity securities

 

 

(3,966

)

 

 

(1,734

)

Net increase in loans

 

 

(51,093

)

 

 

(121,471

)

Proceeds from sales of other real estate owned

 

 

561

 

 

 

539

 

Purchases of premises, equipment and software

 

 

(1,604

)

 

 

(3,609

)

Net cash used in investing activities

 

 

(65,110

)

 

 

(80,515

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Net increase in customer deposits

 

 

77,942

 

 

 

46,141

 

Net increase in repurchase agreements

 

 

2,837

 

 

 

1,222

 

Net (decrease) increase in short-term FHLB advances

 

 

(48,256

)

 

 

37,201

 

Proceeds from long-term FHLB advances

 

 

3,000

 

 

 

6,000

 

Repayment of long-term FHLB advances

 

 

(1,464

)

 

 

(610

)

Cash dividends paid on common stock

 

 

(104

)

 

 

(97

)

Net cash provided by financing activities

 

 

33,955

 

 

 

89,857

 

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

5,027

 

 

 

(13,054

)

Cash and cash equivalents, beginning of period

 

 

19,512

 

 

 

28,203

 

Cash and cash equivalents, end of period

 

$

24,539

 

 

$

15,149

 

 

 

 

 

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 and six month periods ended June 30, 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 176 employees at June 30, 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 Technical Corrections and Improvements Update No. 2015-10. The Financial Accounting Standards Board (the “FASB”) issued Update No. 2015-10 in June 2015 to clarify the Accounting Standards Codification (the “Codification”). This Update contains amendments that will affect a wide variety of Topics in the Codification. The amendments generally fall into one of the following types of amendments: amendments related to differences between original guidance and the Codification, guidance clarification and reference corrections, simplification, and minor improvements. 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 820Fair Value MeasurementUpdate No. 2015-07. The FASB issued Update No. 2015-07 in May 2015 to address diversity in practice related to how certain investments measured at net asset value with redemption dates in the future are categorized within the fair value hierarchy. The amendments in this Update remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. 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.

 

FASB ASC Topic 835-30 “Interest – Imputation of Interest” Update No. 2015-03. The FASB issued Update No. 2015-03 in April 2015 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.

 

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 and six months ended June 30, 2015 and 2014 (in thousands, except share data).

 

 

Three months ended

June 30,

 

 

Six months ended

June 30,

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

 

 

 

 

Net income available to common shareholders

$

1,813

 

 

$

1,067

 

 

$

3,763

 

 

$

1,946

 

Weighted average number of common shares outstanding

   used in computation of basic earnings per common share

 

7,219,593

 

 

 

3,901,542

 

 

 

7,219,415