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Investar Holding Corporation Announces 2016 Second Quarter Results

July 28, 2016

BATON ROUGE, LA, July 28, 2016 (GLOBE NEWSWIRE) -- Investar Holding Corporation (NASDAQ:ISTR) (the “Company”), the holding company for Investar Bank (the “Bank”), today announced financial results for the quarter ended June 30, 2016. The Company reported net income of $2.0 million, or $0.28 per diluted share for the second quarter of 2016, compared to $2.0 million, or $0.28 per diluted share for the quarter ended March 31, 2016, and $1.8 million, or $0.25 per diluted share, for the quarter ended June 30, 2015.

Investar Holding Corporation President and Chief Executive Officer John D’Angelo said:

“This was another successful quarter for Investar and demonstrates our continued emphasis on creating long-term shareholder value. We continued to experience solid organic loan growth which fueled the increase in interest income. Deposit growth remains a focus and we are very pleased with the 15% growth in our noninterest-bearing deposits. During the quarter, we increased the quarterly dividend payable to shareholders by 11% as well as repurchased over 82,000 shares of our common stock. This brings our total repurchases to 140,000 shares under our share repurchase program, which is approximately 56% of the total shares authorized for repurchase. Our Board and management remain keenly focused on our commitment to delivering shareholder value as demonstrated by our increased dividend and stock repurchase activity.”

Second Quarter Highlights

Total loans, excluding loans held for sale, increased 9.7% year to date, or 19.4% annualized. Total loans, excluding loans held for sale, increased $19.8 million, or 2.5%, compared to March 31, 2016, and increased $143.9 million, or 21.4%, compared to June 30, 2015, to $817.5 million at June 30, 2016.
The business lending portfolio, which consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans, was $226.6 million at June 30, 2016, an increase of $10.0 million, or 4.6%, compared to the business lending portfolio of $216.6 million at March 31, 2016, and an increase of $40.3 million, or 21.6%, compared to the business lending portfolio of $186.3 million at June 30, 2015.
Other real estate owned decreased $0.4 million, or 59.9%, to $0.3 million at June 30, 2016, compared to $0.7 million at March 31, 2016, and decreased $2.2 million, or 88.9%, compared to $2.5 million at June 30, 2015.
Total noninterest-bearing deposits were $109.8 million at June 30, 2016, an increase of $14.8 million, or 15.6%, compared to March 31, 2016, and an increase of $23.5 million, or 27.2%, compared to June 30, 2015.
Total interest income increased $0.3 million, or 3.2%, compared to the quarter ended March 31, 2016, and increased $1.5 million, or 16.7%, compared to the quarter ended June 30, 2015, to $10.7 million for the quarter ended June 30, 2016.
Net charge-offs remain low, averaging 0.02% of total loans for the past eight quarters.
The Company repurchased 82,123 shares of the Company’s common stock through our stock repurchase program at an average price of $15.55 during the quarter ended June 30, 2016.

Loans

Total loans were $817.5 million at June 30, 2016, an increase of $19.8 million, or 2.5 %, compared to March 31, 2016, and an increase of $143.9 million, or 21.4%, compared to June 30, 2015.

The following table sets forth the composition of the Company’s loan portfolio as of the dates indicated (dollars in thousands).

							Linked Qtr Change						Year/Year Change						Percentage of Total Loans
	6/30/2016		3/31/2016		6/30/2015		$			%			$			%			6/30/2016			6/30/2015
Mortgage loans on real estate
Construction and development	$	101,080	$	95,353	$	70,927	$	5,727			6.0	%	$	30,153			42.5	%		12.4	%		12.0	%
1-4 Family		166,778		162,312		153,118		4,466			2.8			13,660			8.9			20.4			20.3
Multifamily		37,300		33,609		21,260		3,691			11.0			16,040			75.4			4.6			4.2
Farmland		8,343		6,366		3,001		1,977			31.1			5,342			178.0			1.0			0.8
Commercial real estate
Owner-occupied		151,464		141,583		129,825		9,881			7.0			21,639			16.7			18.5			17.8
Nonowner-occupied		180,842		174,176		119,321		6,666			3.8			61,521			51.6			22.1			21.8
Commercial and industrial		75,103		74,990		56,485		113			0.2			18,618			33.0			9.2			9.4
Consumer		96,560		109,233		119,649		(12,673	)		(11.6	)		(23,089	)		(19.3	)		11.8			13.7
Total loans		817,470		797,622		673,586		19,848			2.5	%		143,884			21.4	%		100	%		100	%
Loans held for sale		46,717		50,921		78,212		(4,204	)		(8.3	)		(31,495	)		(40.3	)
Total gross loans	$	864,187	$	848,543	$	751,798	$	15,644			1.8	%	$	112,389			14.9	%

Consumer loans, including consumer loans held for sale, totaled $143.3 million at June 30, 2016, a decrease of $16.7 million, or 10.5%, compared to $160.0 million at March 31, 2016, and a decrease of $49.3 million, or 25.6%, compared to June 30, 2015. The decrease compared to the linked quarter is mainly attributable to principal payments on consumer loan balances. Since the Bank discontinued accepting indirect auto loan applications at the end of 2015, which was the primary source of its consumer loan portfolio and consumer loans held for sale, the consumer loan portfolio is expected to decrease over time. The Bank currently has the intent and ability to sell the balance of the consumer loans classified as held for sale at June 30, 2016, however, if this classification were to change, the loans would be transferred to the consumer loan portfolio.

At June 30, 2016, the Company’s total business lending portfolio, which consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans, was $226.6 million, an increase of $10.0 million, or 4.6%, compared to the business lending portfolio of $216.6 million at March 31, 2016 and an increase of $40.3 million, or 21.6%, compared to the business lending portfolio of $186.3 million at June 30, 2015.

Credit Quality

Nonperforming loans were $5.5 million, or 0.67% of total loans, at June 30, 2016, an increase of $3.2 million, or 136.9%, compared to $2.3 million, or 0.29% of total loans, at March 31, 2016, and an increase of $2.8 million, or 103.7%, compared to $2.7 million, or 0.40% of total loans, at June 30, 2015. The allowance for loan losses was $7.1 million, or 129.6% and 0.87% of nonperforming loans and total loans, respectively, at June 30, 2016, compared to $6.5 million, or 279.8% and 0.81% of nonperforming loans and total loans, respectively, at March 31, 2016 and $5.7 million, or 213.2% and 0.85% of nonperforming loans and total loans, respectively, at June 30, 2015. The allowance for loan losses plus the fair value marks on acquired loans was 0.95% of total loans at June 30, 2016 compared to 0.90% at March 31, 2016 and 0.95% at June 30, 2015. The increase in nonperforming loans and the decrease in the allowance for loan losses as a percentage of nonperforming loans at June 30, 2016 when compared to both March 31, 2016 and June 30, 2015 are mainly attributable to a $2.7 million commercial and industrial loan relationship not related to the oil and gas industry. Management has evaluated the loan relationship, which is well collateralized and properly reserved, and expects it to be resolved without any additional material impact to the financial statements.

The provision for loan loss expense was $0.8 million for the second quarter of 2016, an increase of $0.3 million and $0.4 million compared to March 31, 2016 and June 30, 2015, respectively. The increase in the provision for loan loss expense can also be attributed to the $2.7 million loan relationship discussed above.

Management continues to monitor the Company’s loan portfolio for exposure to potential negative impacts of suppressed oil and gas prices. We consider our exposure to the energy sector not to be significant, at less than one percent of the total loan portfolio at June 30, 2016. However, should the price of oil and gas decline further and/or remain at the current low price for an extended period, the general economic conditions in our south Louisiana markets could be negatively affected and could negatively impact borrowers’ ability to service their debt. Management continually evaluates the allowance for loan losses based on several factors, including economic conditions, and currently believes that any potential negatively affected future cash flows related to these loans would be covered by the current allowance for loan losses.

Deposits

Total deposits at June 30, 2016 were $867.2 million, an increase of $58.5 million, or 7.2%, compared to March 31, 2016 and an increase of $161.2 million, or 22.8%, compared to June 30, 2015. The increase in total deposits was driven by an increase in noninterest-bearing deposits of $23.5 million, or 27.2%, an increase in money market accounts of $16.4 million, or 17.8%, and an increase in time deposits of $112.2 million, or 32.6%, compared to June 30, 2015.

The Company’s focus on relationship banking continues to positively impact noninterest-bearing demand deposit growth.

The following table sets forth the composition of the Company’s deposits as of the dates indicated (dollars in thousands).

							Linked Qtr Change					Year/Year Change					Percentage of Total Deposits
	6/30/2016		3/31/2016		6/30/2015		$		%			$		%			6/30/2016			6/30/2015
Noninterest-bearing demand deposits	$	109,828	$	95,033	$	86,339	$	14,795		15.6	%	$	23,489		27.2	%		12.7	%		12.2	%
NOW accounts		139,893		138,672		131,136		1,221		0.9			8,757		6.7			16.1			18.6
Money market deposit accounts		108,552		104,936		92,126		3,616		3.4			16,426		17.8			12.5			13.1
Savings accounts		52,899		52,285		52,546		614		1.2			353		0.7		6.1			7.4
Time deposits		456,033		417,772		343,860		38,261		9.2			112,173		32.6		52.6			48.7
Total deposits	$	867,205	$	808,698	$	706,007	$	58,507		7.2	%	$	161,198		22.8	%		100	%		100	%

Net Interest Income

Net interest income for the second quarter of 2016 totaled $8.7 million, an increase of $0.1 million, or 1.3%, compared to the first quarter of 2016, and an increase of $0.9 million, or 11.3%, compared to the second quarter of 2015. The increase was a direct result of continued growth of the Company’s loan portfolio with an increase in net interest income of $1.5 million due to an increase in volume offset by a $0.6 million decrease related to a reduction in yield compared to the second quarter of 2015.

The Company’s net interest margin was 3.38% for the quarter ended June 30, 2016 compared to 3.47% for the first quarter of 2016 and 3.70% for the second quarter of 2015. The yield on interest-earning assets was 4.18% for the quarter ended June 30, 2016 compared to 4.21% for the first quarter of 2016 and 4.37% for the second quarter of 2015.

The cost of deposits increased six basis points for the quarter ended June 30, 2016 compared to the first quarter of 2016, and increased twelve basis points compared to the second quarter of 2015. The increase is primarily a result of increases in time deposit rates.

Noninterest Income

Noninterest income for the second quarter of 2016 totaled $2.3 million, an increase of $1.0 million, or 75.3%, compared to the first quarter of 2016, and an increase of $0.2 million, or 9.2%, compared to the second quarter of 2015. The increase in noninterest income when compared to March 31, 2016 is mainly attributable to the $1.3 million gain on sale of fixed assets recognized for the sale of the land and building of one of the Bank’s branch locations to a healthcare company. The increase in gain on sale of fixed assets was offset by a $0.3 million decrease in the gain on sale of loans. Since exiting the indirect auto loan origination business at the end of 2015, the Bank has experienced decreased loan sales and has ceased originations of consumer loans held for sale. The Bank does intend to sell the balance of the consumer loans held for sale at June 30, 2016, however, it expects the gain on sale of loans to diminish over time.

Noninterest Expense

Noninterest expense for the second quarter of 2016 totaled $7.1 million, an increase of $0.7 million, or 11.3%, compared to the first quarter of 2016, and an increase of $0.4 million, or 6.3%, compared to the second quarter of 2015. The increase in noninterest expense compared to the first quarter of 2016 is primarily due to $0.6 million in customer reimbursements that we paid to certain borrowers during the second quarter.

Basic Earnings Per Share and Diluted Earnings Per Share

The Company reported both basic and diluted earnings per share of $0.28 for the three months ended June 30, 2016, an increase of $0.03, compared to basic and diluted earnings per share of $0.25 for the three months ended June 30, 2015.

Taxes

The Company recorded income tax expense of $1.0 million for the quarter ended June 30, 2016, which equates to an effective tax rate of 33.4%.

About Investar Holding Corporation

Investar Holding Corporation, headquartered in Baton Rouge, Louisiana, provides full banking services, excluding trust services, through its wholly-owned banking subsidiary, Investar Bank, a state chartered bank. The Company’s primary market is South Louisiana and it currently operates 10 full service banking offices located throughout its market. At June 30, 2016, the Company had 152 full-time equivalent employees.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States of America, or GAAP. These measures and ratios include “tangible common equity,” “tangible assets,” “tangible equity to tangible assets,” and “tangible book value per common share.” Management believes these non-GAAP financial measures provide information useful to investors in understanding the Company’s financial results, and the Company believes that its presentation, together with the accompanying reconciliations, provide a more complete understanding of factors and trends affecting the Company’s business and allow investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and the Company strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. A reconciliation of the non-GAAP financial measures disclosed in this press release to the comparable GAAP financial measures is included at the end of the financial statement tables.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance. The Company generally identifies forward-looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. The Company does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. 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, 2015, filed with the Securities and Exchange Commission.

INVESTAR HOLDING CORPORATION
SUMMARY FINANCIAL INFORMATION
(Amounts in thousands, except share data)
(Unaudited)

	As of and for the three months ended
	6/30/2016			3/31/2016			6/30/2015			Linked Quarter			Year/Year
EARNINGS DATA
Total interest income	$	10,719		$	10,378		$	9,187			3.3	%		16.7	%
Total interest expense		2,061			1,831			1,407			12.6	%		46.5	%
Net interest income		8,658			8,547			7,780			1.3	%		11.3	%
Provision for loan losses		800			454			400			76.2	%		100.0	%
Total noninterest income		2,256			1,287			2,066			75.3	%		9.2	%
Total noninterest expense		7,104			6,384			6,682			11.3	%		6.3	%
Income before income taxes		3,010			2,996			2,764			0.5	%		8.9	%
Income tax expense		1,005			1,006			951			-0.1	%		5.7	%
Net income	$	2,005		$	1,990		$	1,813			0.8	%		10.6	%

AVERAGE BALANCE SHEET DATA
Total assets	$	1,086,604		$	1,044,993		$	891,581			4.0	%		21.9	%
Total interest-earning assets		1,028,360			988,779			842,984			4.0	%		22.0	%
Total loans		800,710			767,761			664,607			4.3	%		20.5	%
Total gross loans		852,475			832,368			729,851			2.4	%		16.8	%
Total interest-bearing deposits		739,678			676,826			617,442			9.3	%		19.8	%
Total interest-bearing liabilities		866,386			836,332			694,497			3.6	%		24.8	%
Total deposits		835,215			764,145			699,151			9.3	%		19.5	%
Total shareholders' equity		112,035			110,873			106,583			1.0	%		5.1	%

PER SHARE DATA
Earnings:
Basic earnings per share	$	0.28		$	0.28		$	0.25			0.0	%		12.0	%
Diluted earnings per share		0.28			0.28			0.25			0.0	%		12.0	%
Book value per share		15.63			15.28			14.65			2.3	%		6.7	%
Tangible book value per share⁽¹⁾		15.18			14.83			14.22			2.4	%		6.8	%
Common shares outstanding		7,214,734			7,296,426			7,293,209			-1.1	%		-1.1	%

PERFORMANCE RATIOS
Return on average assets		0.74	%		0.76	%		0.82	%		-2.6	%		-9.8	%
Return on average equity		7.18	%		7.20	%		6.82	%		-0.3	%		5.3	%
Net interest margin		3.38	%		3.47	%		3.70	%		-2.6	%		-8.6	%
Net interest income to average assets		3.20	%		3.28	%		3.50	%		-2.4	%		-8.6	%
Noninterest expense to average assets		2.62	%		2.45	%		3.01	%		6.9	%		-13.0	%
Efficiency ratio⁽²⁾		65.09	%		64.92	%		67.87	%		0.3	%		-4.1	%
Dividend payout ratio		3.57	%		3.25	%		3.11	%		9.8	%		14.8	%
Net charge-offs to average loans		0.02	%		0.02	%		0.00	%		0.0	%		0.0	%


⁽¹⁾ Non-GAAP financial measure. See reconciliation.
⁽²⁾ Efficiency ratio represents noninterest expenses divided by the sum of net interest income (before provision for loan losses) and noninterest income.

INVESTAR HOLDING CORPORATION
SUMMARY FINANCIAL INFORMATION
(Amounts in thousands, except share data)
(Unaudited)

	As of and for the three months ended
	6/30/2016			3/31/2016			6/30/2015			Linked Quarter			Year/Year
ASSET QUALITY RATIOS
Nonperforming assets to total assets		0.51	%		0.28	%		0.56	%		82.1	%		-8.9	%
Nonperforming loans to total loans		0.67	%		0.29	%		0.40	%		131.0	%		67.5	%
Allowance for loan losses to total loans		0.87	%		0.81	%		0.85	%		7.4	%		2.4	%
Allowance for loan losses to nonperforming loans		129.6	%		279.75	%		213.20	%		-53.7	%		-39.2	%

CAPITAL RATIOS
Investar Holding Corporation:
Total equity to total assets		10.01	%		10.39	%		11.59	%		-3.7	%		-13.6	%
Tangible equity to tangible assets		9.75	%		10.11	%		11.29	%		-3.6	%		-13.6	%
Tier 1 leverage ratio		10.46	%		10.78	%		12.15	%		-3.0	%		-13.9	%
Common equity tier 1 capital ratio		11.11	%		11.49	%		12.96	%		-3.3	%		-14.3	%
Tier 1 capital ratio		11.47	%		11.86	%		13.39	%		-3.3	%		-14.3	%
Total capital ratio		12.19	%		12.54	%		14.10	%		-2.8	%		-13.5	%
Investar Bank:
Tier 1 leverage ratio		10.26	%		10.52	%		11.72	%		-2.5	%		-12.5	%
Common equity tier 1 capital ratio		11.25	%		11.57	%		12.91	%		-2.8	%		-12.9	%
Tier 1 capital ratio		11.25	%		11.57	%		12.91	%		-2.8	%		-12.9	%
Total capital ratio		11.97	%		12.25	%		13.62	%		-2.3	%		-12.1	%

INVESTAR HOLDING CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
(Unaudited)

	June 30, 2016			March 31, 2016			June 30, 2015
ASSETS
Cash and due from banks	$	9,958		$	8,808		$	7,541
Interest-bearing balances due from other banks		27,175			12,465			16,807
Federal funds sold		1			51			191
Cash and cash equivalents		37,134			21,324			24,539

Available for sale securities at fair value (amortized cost of $149,986, $127,737, and $82,049, respectively)		151,841			128,570			82,236
Held to maturity securities at amortized cost (estimated fair value of $25,810, $26,348, and $24,015, respectively)		25,656			26,249			24,230
Loans held for sale		46,717			50,921			78,212
Loans, net of allowance for loan losses of $7,091, $6,463, and $5,728, respectively		810,379			791,159			667,858
Other equity securities		7,371			7,183			4,183
Bank premises and equipment, net of accumulated depreciation of $6,017, $5,727, and $4,662, respectively		30,147			30,759			29,444
Other real estate owned, net		279			695			2,519
Accrued interest receivable		2,840			2,978			2,432
Deferred tax asset		1,459			1,934			1,624
Goodwill and other intangible assets		3,254			3,265			3,195
Bank-owned life insurance		7,101			7,054			-
Other assets		2,752			1,438			1,383
Total assets	$	1,126,930		$	1,073,529		$	921,855

LIABILITIES
Deposits
Noninterest-bearing	$	109,828		$	95,033		$	86,339
Interest-bearing		757,377			713,665			619,668
Total deposits		867,205			808,698			706,007
Advances from Federal Home Loan Bank		93,599			103,960			79,066
Repurchase agreements		28,854			29,678			15,130
Junior subordinated debt		3,609			3,609			3,609
Accrued taxes and other liabilities		20,900			16,097			11,170
Total liabilities		1,014,167			962,042			814,982

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; 7,359,976, 7,358,231, and 7,294,987 shares issued and 7,214,734, 7,296,429, and 7,293,209 shares outstanding, respectively		7,360			7,358			7,295
Treasury stock		(2,249	)		(952	)		(26	)
Surplus		84,958			84,780			84,358
Retained earnings		22,507			20,575			15,461
Accumulated other comprehensive income (loss)		187			(274	)		(215	)
Total stockholders' equity		112,763			111,487			106,873
Total liabilities and stockholders' equity	$	1,126,930		$	1,073,529		$	921,855

INVESTAR HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share data)
(Unaudited)

	For the three months ended						For the six months ended
	June 30, 2016		March 31, 2016		June 30, 2015		June 30, 2016		June 30, 2015

INTEREST INCOME
Interest and fees on loans	$	9,781	$	9,485	$	8,646	$	19,266	$	16,944
Interest on investment securities		891		856		523		1,747		1,008
Other interest income		47		37		18		84		35
Total interest income		10,719		10,378		9,187		21,097		17,987

INTEREST EXPENSE
Interest on deposits		1,763		1,515		1,299		3,278		2,491
Interest on borrowings		298		316		108		614		217
Total interest expense		2,061		1,831		1,407		3,892		2,708
Net interest income		8,658		8,547		7,780		17,205		15,279

Provision for loan losses		800		454		400		1,254		1,100
Net interest income after provision for loan losses		7,858		8,093		7,380		15,951		14,179

NONINTEREST INCOME
Service charges on deposit accounts		88		97		97		185		191
Gain on sale of investment securities, net		144		80		134		224		134
Gain on sale of fixed assets, net		1,252		-		-		1,252		-
Gain on sale of real estate owned, net		10		1		7		11		6
Gain on sale of loans, net		-		313		1,077		313		2,808
Fee income on loans held for sale, net		106		123		210		229		510
Servicing fees		431		468		373		899		653
Other operating income		225		205		168		430		304
Total noninterest income		2,256		1,287		2,066		3,543		4,606
Income before noninterest expense		10,114		9,380		9,446		19,494		18,785

NONINTEREST EXPENSE
Depreciation and amortization		369		370		362		739		719
Salaries and employee benefits		3,890		3,873		3,971		7,763		7,879
Occupancy		242		236		225		478		438
Data processing		367		374		370		741		710
Marketing		102		112		62		214		120
Professional fees		375		279		237		654		499
Customer reimbursements		584		-		-		584		-
Other operating expenses		1,175		1,140		1,455		2,315		2,741
Total noninterest expense		7,104		6,384		6,682		13,488		13,106
Income before income tax expense		3,010		2,996		2,764		6,006		5,679
Income tax expense		1,005		1,006		951		2,011		1,916
Net income	$	2,005	$	1,990	$	1,813	$	3,995	$	3,763

EARNINGS PER SHARE
Basic earnings per share	$	0.28	$	0.28	$	0.25	$	0.56	$	0.52
Diluted earnings per share	$	0.28	$	0.28	$	0.25	$	0.55	$	0.52
Cash dividends declared per common share	$	0.01	$	0.01	$	0.01	$	0.02	$	0.02

INVESTAR HOLDING CORPORATION
EARNINGS PER COMMON SHARE
(Amounts in thousands, except share data)
(Unaudited)

	For the three months ended						For the six months ended
	June 30, 2016		March 31, 2016		June 30, 2015		June 30, 2016		June 30, 2015

Net income available to common shareholders	$	2,005	$	1,990	$	1,813	$	3,995	$	3,763
Weighted average number of common shares outstanding used in computation of basic earnings per common share		7,158,532		7,194,558		7,219,593		7,176,545		7,219,415
Effect of dilutive securities:
Restricted stock		15,298		15,353		13,372		12,705		11,065
Stock options		14,715		14,854		16,725		14,752		13,478
Stock warrants		11,231		11,267		12,467		11,249		10,765
Weighted average number of common shares outstanding plus effect of dilutive securities used in computation of diluted earnings per common share		7,199,776		7,236,032		7,262,157		7,215,251		7,254,723
Basic earnings per share	$	0.28	$	0.28	$	0.25	$	0.56	$	0.52
Diluted earnings per share	$	0.28	$	0.28	$	0.25	$	0.55	$	0.52

INVESTAR HOLDING CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS
(Amounts in thousands)
(Unaudited)

	For the three months ended
	June 30, 2016								March 31, 2016								June 30, 2015
	Average Balance			Interest Income/ Expense		Yield/ Rate			Average Balance			Interest Income/ Expense		Yield/ Rate			Average Balance			Interest Income/ Expense		Yield/ Rate
Assets
Interest-earning assets:
Loans	$	852,475		$	9,781		4.60	%	$	832,368		$	9,485		4.57	%	$	729,851		$	8,646		4.75	%
Securities:
Taxable		129,126			732		2.27			113,446			712		2.52			77,050			404		2.10
Tax-exempt		25,105			159		2.54			22,199			144		2.60			18,948			119		2.52
Interest-bearing balances with banks		21,654			47		0.87			20,766			37		0.71			17,135			18		0.42
Total interest-earning assets		1,028,360			10,719		4.18			988,779			10,378		4.21			842,984			9,187		4.37
Cash and due from banks		7,647								7,222								5,432
Intangible assets		3,258								3,179								3,199
Other assets		54,123								52,121								45,532
Allowance for loan losses		(6,784	)							(6,308	)							(5,566	)
Total assets	$	1,086,604							$	1,044,993							$	891,581

Liabilities and shareholders’ equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand	$	247,052		$	393		0.64	%	$	239,844		$	380		0.64	%	$	222,130		$	353		0.64	%
Savings deposits		52,728			88		0.67			53,144			88		0.66			53,364			90		0.68
Time deposits		439,898			1,282		1.17			383,838			1,047		1.09			341,948			856		1.00
Total interest-bearing deposits		739,678			1,763		0.96			676,826			1,515		0.90			617,442			1,299		0.84
Short-term borrowings		103,274			229		0.89			132,839			243		0.73			36,977			16		0.17
Long-term debt		23,434			69		1.18			26,667			73		1.10			40,078			92		0.92
Total interest-bearing liabilities		866,386			2,061		0.95			836,332			1,831		0.88			694,497			1,407		0.81
Noninterest-bearing deposits		95,537								87,319								81,709
Other liabilities		12,646								10,469								8,792
Stockholders’ equity		112,035								110,873								106,583
Total liability and stockholders’ equity	$	1,086,604							$	1,044,993							$	891,581
Net interest income/net interest margin				$	8,658		3.38	%				$	8,547		3.47	%				$	7,780		3.70	%

INVESTAR HOLDING CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS
(Amounts in thousands)
(Unaudited)


	For the six months ended
	June 30 2016								June 30, 2015
	Average Balance			Interest Income/ Expense		Yield/ Rate			Average Balance			Interest Income/ Expense		Yield/ Rate
Assets
Interest-earning assets:
Loans	$	842,420		$	19,266		4.59	%	$	722,136		$	16,944		4.73	%
Securities:
Taxable		121,286			1,444		2.39			72,812			770		2.13
Tax-exempt		23,652			303		2.57			18,963			238		2.53
Interest-bearing balances with banks		21,210			84		0.79			17,580			35		0.40
Total interest-earning assets		1,008,568			21,097		4.20			831,491			17,987		4.36
Cash and due from banks		7,435								5,560
Intangible assets		3,219								3,204
Other assets		53,123								45,396
Allowance for loan losses		(6,546	)							(5,295	)
Total assets	$	1,065,799							$	880,356

Liabilities and shareholders' equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand	$	243,448		$	773		0.64	%	$	213,477		$	663		0.63	%
Savings deposits		52,936			177		0.67			54,540			184		0.68
Time deposits		411,868			2,328		1.13			333,143			1,644		1.00
Total interest-bearing deposits		708,252			3,278		0.93			601,160			2,491		0.84
Short-term borrowings		118,056			473		0.80			45,145			40		0.18
Long-term debt		25,050			141		1.13			40,929			177		0.87
Total interest-bearing liabilities		851,358			3,892		0.92			687,234			2,708		0.79
Noninterest-bearing deposits		91,428								79,480
Other liabilities		11,559								7,888
Stockholders' equity		111,454								105,754
Total liability and stockholders’ equity	$	1,065,799							$	880,356
Net interest income/net interest margin				$	17,205		3.42	%				$	15,279		3.71	%

INVESTAR HOLDING CORPORATION
RECONCILIATION OF NON GAAP FINANCIAL MEASURES
(Amounts in thousands, except share data)
(Unaudited)


	June 30, 2016			March 31, 2016			June 30, 2015
Tangible common equity
Total stockholder's equity	$	112,763		$	111,487		$	106,873
Adjustments:
Goodwill		2,684			2,684			2,684
Core deposit intangible		470			480			511
Trademark intangible		100			100
Tangible common equity	$	109,509		$	108,223		$	103,678
Tangible assets
Total assets	$	1,126,930		$	1,073,529		$	921,855
Adjustments:
Goodwill		2,684			2,684			2,684
Core deposit intangible		470			480			511
Trademark intangible		100			100			-
Tangible assets	$	1,123,676		$	1,070,265		$	918,660

Common shares outstanding		7,214,734			7,296,429			7,293,209
Tangible equity to tangible assets		9.75	%		10.11	%		11.29	%
Book value per common share	$	15.63		$	15.28		$	14.65
Tangible book value per common share		15.18			14.83			14.22

For further information contact:

Investar Holding Corporation                                                          
Chris Hufft
Chief Financial Officer
(225) 227-2215
Chris.Hufft@investarbank.com

Source: Investar Holding Corporation