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Investar Holding Corporation Announces 2016 Third Quarter Results
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Investar Holding Corporation Announces 2016 Third Quarter Results

October 27, 2016

BATON ROUGE, La., Oct. 27, 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 September 30, 2016. The Company reported net income of $2.0 million, or $0.29 per diluted share for the third quarter of 2016, compared to $2.0 million, or $0.28 per diluted share for the quarter ended June 30, 2016, and $1.8 million, or $0.26 per diluted share, for the quarter ended September 30, 2015.

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

“We are pleased to have had another great quarter. Our focus on relationship banking continues to positively impact noninterest-bearing demand deposit growth, with 24.3% year-to-date growth. Also during the quarter, we repurchased over 80,000 shares of our common stock, delivering on our commitment to increase shareholder value.

Our prayers go out to those families and businesses affected by the record flooding that occurred in the greater Baton Rouge and surrounding areas in August. While none of our branches were significantly affected by the flood waters, some of our employees and their extended families were greatly impacted. As a member of the affected communities, we have set up programs to help employees and customers experiencing financial difficulty as a result of the flood. We will continue to assist the communities in any way that we can as they rebuild.”

Third Quarter Highlights

  • Total loans, excluding loans held for sale, increased 13.6% year to date, or 18.1% annualized. Total loans, excluding loans held for sale, increased $29.3 million, or 3.6%, compared to June 30, 2016, and increased $136.3 million, or 19.2%, compared to September 30, 2015, to $846.8 million at September 30, 2016.
  • The business lending portfolio, which consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans, was $250.3 million at September 30, 2016, an increase of $23.7 million, or 10.5%, compared to $226.6 million at June 30, 2016, and an increase of $50.2 million, or 25.1%, compared to $200.1 million at September 30, 2015.
  • Total noninterest-bearing deposits were $112.4 million at September 30, 2016, an increase of $2.6 million, or 2.4%, compared to June 30, 2016, and an increase of $17.9 million, or 20.7%, compared to September 20, 2015.
  • Total interest income increased $0.3 million, or 2.6%, compared to the quarter ended June 30, 2016, and increased $1.5 million, or 16.0%, compared to the quarter ended September 30, 2015, to $11.0 million for the quarter ended September 30, 2016.
  • Net charge-offs remain low, averaging 0.02% of total loans for the past eight quarters.
  • The Company repurchased 80,773 shares of the Company’s common stock through its stock repurchase program at an average price of $15.34 during the quarter ended September 30, 2016, leaving approximately 29,000 shares available for repurchase. In addition, on October 19, 2016, the board approved an additional 250,000 shares for repurchase under its stock repurchase program.
  • The Bank continues to invest in relationship banking through the hiring of an experienced Treasury Management Officer focused on the Baton Rouge market.

Loans

Total loans were $846.8 million at September 30, 2016, an increase of $29.3 million, or 3.6%, compared to June 30, 2016, and an increase of $136.3 million, or 19.2%, compared to September 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 
  9/30/2016  6/30/2016  9/30/2015  $  %  $  %  9/30/2016 9/30/2015 
Mortgage loans on real estate                                   
Construction and development $92,355  $101,080  $79,796  $(8,725)  -8.6% $12,559   15.7%  10.9% 11.2%
1-4 Family  175,392   166,778   154,277   8,614   5.2   21,115   13.6   20.7  21.7 
Multifamily  42,560   37,300   24,484   5,260   14.1   18,076   73.8   5.0  3.5 
Farmland  8,281   8,343   3,009   (62)  (0.7)  5,272   175.2   1.0  0.4 
Commercial real estate                                   
Owner-occupied  172,952   151,464   132,419   21,488   14.2   40,533   30.6   20.5  18.7 
Nonowner-occupied  192,270   180,842   126,555   11,428   6.3   65,715   51.9   22.7  17.8 
Commercial and industrial  77,312   75,103   67,671   2,209   2.9   9,641   14.2   9.1  9.5 
Consumer  85,706   96,560   122,350   (10,854)  (11.2)  (36,644)  30.0   10.1  17.2 
Total loans  846,828   817,470   710,561   29,358   3.6%  136,267   19.2%  100% 100%
Loans held for sale  40,553   46,717   55,653   (6,164)  (13.2)  (15,100)  (26.9)       
Total gross loans $887,381  $864,187  $766,214  $23,194   2.7% $121,167   15.8%       
                                    

Consumer loans, including consumer loans held for sale, totaled $126.3 million at September 30, 2016, a decrease of $17.0 million, or 11.9%, compared to $143.3 million at June 30, 2016, and a decrease of $49.4 million, or 28.1%, compared to $175.7 million at September 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 September 30, 2016, however, if this classification were to change, the loans would be transferred to the consumer loan portfolio.

At September 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 $250.3 million, an increase of $23.7 million, or 10.5%, compared to the business lending portfolio of $226.6 million at June 30, 2016 and an increase of $50.2 million, or 25.1%, compared to the business lending portfolio of $200.1 million at September 30, 2015.

Credit Quality

Nonperforming loans were $9.0 million, or 1.06% of total loans, at September 30, 2016, an increase of $3.5 million, or 63.7%, compared to $5.5 million, or 0.67% of total loans, at June 30, 2016, and an increase of $6.4 million, or 243%, compared to $2.6 million, or 0.37% of total loans, at September 30, 2015. The allowance for loan losses was $7.4 million, or 82.4% and 0.87% of nonperforming loans and total loans, respectively, at September 30, 2016, compared to $7.1 million, or 129.6% and 0.87% of nonperforming loans and total loans, respectively, at June 30, 2016, and $5.9 million, or 226.4% and 0.83% of nonperforming loans and total loans, respectively, at September 30, 2015. The allowance for loan losses plus the fair value marks on acquired loans was 0.95% of total loans at September 30, 2016 compared to 0.95% at June 30, 2016 and 0.93% at September 30, 2015. The increase in nonperforming loans and the decrease in the allowance for loan losses as a percentage of nonperforming loans at September 30, 2016 when compared to both June 30, 2016 and September 30, 2015 are mainly attributable to a $4.7 million owner-occupied commercial real estate relationship. Management has evaluated the loan relationship and has recorded a specific reserve of approximately $0.5 million in the allowance for loan losses. Also included in nonperforming loans is a $2.6 million commercial and industrial loan relationship not related to the oil and gas industry that was placed on nonaccrual status in the second quarter of 2016, as mentioned in a prior release. The Company has determined that a specific reserve is no longer required on the loan as it believes sufficient collateral exists after receiving additional cash collateral from the borrower. Subsequent to the end of the third quarter, the Company received a $0.5 million principal pay-down on this loan relationship. A bankruptcy plan was accepted by the borrower’s creditors and the Company does not expect a loss on this loan at this time. As a result of the loan remaining current throughout the bankruptcy process and the additional cash collateral, the Company anticipates the loan to be placed back on accrual during the fourth quarter.

The Company has instituted a 90-day loan deferral program for customers who were impacted by the flood and has allocated a portion of its general reserves to the potential impact as a result of the flood. The Company placed approximately $23.5 million, or 2.8% of the total loan portfolio on a 90-day deferral plan. The Company continues to assess the impact the flooding may have on the region and its loan portfolio to determine the need for specific or additional general reserves.

The provision for loan loss expense was $0.5 million for the third quarter of 2016, a decrease of $0.4 million and an increase of $0.1 million compared to June 30, 2016 and September 30, 2015, respectively. The decrease in the provision for loan loss expense for the third quarter of 2016 when compared to the second quarter of 2016 is attributable to the specific reserve that was recorded during the second quarter for the commercial and industrial loan relationship mentioned 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 September 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 September 30, 2016 were $907.0 million, an increase of $39.8 million, or 4.6%, compared to June 30, 2016 and an increase of $176.6 million, or 25.0%, compared to September 30, 2015. The increase in total deposits was driven by an increase in noninterest-bearing deposits of $17.9 million, or 20.7%, an increase in money market accounts of $27.9 million, or 30.3%, and an increase in time deposits of $115.4 million, or 33.6%, compared to September 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		 
  9/30/2016  6/30/2016  9/30/2015  $  %  $  %  9/30/2016  9/30/2015 
Noninterest-bearing demand deposits $112,414  $109,828  $94,533  $2,586   2.4% $17,881   20.7%  12.4%  12.9%
NOW accounts  150,551   139,893   132,739   10,658   7.6   17,812   13.6   16.6   18.2 
Money market deposit accounts  123,487   108,552   95,584   14,935   13.8   27,903   30.3   13.6   13.1 
Savings accounts  51,332   52,899   53,717   (1,567)  (3.0)  (2,385)  (4.5) 5.7  7.3 
Time deposits  469,267   456,033   353,861   13,234   2.9   115,406   33.6  51.7  48.5 
Total deposits $907,051  $867,205  $730,434  $39,846   4.6% $176,617   25.0%  100%  100%
                                     

Net Interest Income

Net interest income for the third quarter of 2016 totaled $8.8 million, an increase of $0.1 million, or 1.1 %, compared to the second quarter of 2016, and an increase of $0.8 million, or 10.1%, compared to the third 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 $1.2 million due to an increase in volume offset by a $0.4 million decrease related to a reduction in yield compared to the third quarter of 2015.

The Company’s net interest margin was 3.23% for the quarter ended September 30, 2016 compared to 3.38% for the second quarter of 2016 and 3.52% for the third quarter of 2015. The yield on interest-earning assets was 4.06% for the quarter ended September 30, 2016 compared to 4.18% for the second quarter of 2016 and 4.20% for the third quarter of 2015. The decrease in net interest margin and yield on interest-earning assets when compared to the second quarter of 2016 is mainly attributable to the increase in nonaccrual loans during the third quarter, as discussed in Credit Quality above, as well as the decline in the yields on investment securities due to an increase in pay-downs of securities with unamortized premiums.

The cost of deposits increased two basis points for the quarter ended September 30, 2016 compared to the second quarter of 2016, and increased thirteen basis points compared to the third quarter of 2015. The increase in the cost of deposits when compared to the third quarter of 2015 is primarily a result of increases in time deposit rates. During the third quarter of 2016, the Company began lowering its rates on time deposits in an effort to begin reducing its cost of funds. Subsequent to the end of the quarter, time deposit rates have been lowered further as we attempt to improve our funding costs.

Noninterest Income

Noninterest income for the third quarter of 2016 totaled $1.0 million, a decrease of $1.2 million, or 54.4%, compared to the second quarter of 2016, and a decrease of $1.1 million, or 52.5%, compared to the third quarter of 2015. The decrease in noninterest income when compared to the quarter ended June 30, 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 in the second quarter. The decrease in noninterest income when compared to the third quarter of 2015 is mainly due to the $1.0 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 September 30, 2016, however, it expects the gain on sale of loans to diminish over time.

Noninterest Expense

Noninterest expense for the third quarter of 2016 totaled $6.5 million, a decrease of $0.6 million, or 7.8%, compared to the second quarter of 2016, and a decrease of $0.5 million, or 6.6%, compared to the third quarter of 2015. The decrease in noninterest expense compared to the second quarter of 2016 is primarily due to $0.6 million in customer reimbursements that we paid to certain borrowers during the second quarter. The decrease in noninterest expense compared to the third quarter of 2015 is mainly due to a $0.2 million decrease in salaries and benefits and a $0.4 million decrease in other operating expenses.

Along with its normal operating expenses, during the third quarter of 2016 the Company recorded additional expense in other operating expenses of approximately $31,000 related to employee and community assistance as a result of the August flooding.

Basic Earnings Per Share and Diluted Earnings Per Share

The Company reported both basic and diluted earnings per share of $0.29 for the three months ended September 30, 2016, an increase of $0.03, compared to basic and diluted earnings per share of $0.26 for the three months ended September 30, 2015.

Taxes

The Company recorded income tax expense of $0.7 million for the quarter ended September 30, 2016, which equates to an effective tax rate of 26.8%. The Company recorded a $0.1 million tax benefit during the quarter related to the filing of its 2015 tax return which contributed to the lower effective tax rate during the quarter. Management expects the effective income tax rate to approximate 32.5% for the fourth quarter of 2016.

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 September 30, 2016, the Company had 155 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 and including the potential impact on our borrowers of the August 2016 flooding in Baton Rouge and surrounding areas;
  • 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 
  9/30/2016  6/30/2016  9/30/2015  Linked Quarter  Year/Year 
EARNINGS DATA                    
Total interest income $10,993  $10,719  $9,480   2.6%  16.0%
Total interest expense  2,240   2,061   1,528   8.7%  46.6%
Net interest income  8,753   8,658   7,952   1.1%  10.1%
Provision for loan losses  450   800   400   -43.8%  12.5%
Total noninterest income  1,029   2,256   2,167   -54.4%  -52.5%
Total noninterest expense  6,548   7,104   7,013   -7.8%  -6.6%
Income before income taxes  2,784   3,010   2,706   -7.5%  2.9%
Income tax expense  747   1,005   850   -25.7%  -12.1%
Net income $2,037  $2,005  $1,856   1.6%  9.8%
                     
AVERAGE BALANCE SHEET DATA                    
Total assets $1,134,591  $1,086,604  $944,234   4.4%  20.2%
Total interest-earning assets  1,075,145   1,028,360   895,208   4.5%  20.1%
Total loans  840,028   800,710   692,196   4.9%  21.4%
Total gross loans  874,272   852,475   777,080   2.6%  12.5%
Total interest-bearing deposits  784,591   739,678   634,232   6.1%  23.7%
Total interest-bearing liabilities  905,521   866,386   738,612   4.5%  22.6%
Total deposits  887,327   835,215   721,657   6.2%  23.0%
Total stockholders’ equity  113,056   112,035   107,795   0.9%  4.9%
                     
PER SHARE DATA                    
Earnings:                    
Basic earnings per share $0.29  $0.28  $0.26   3.6%  11.5%
Diluted earnings per share  0.29   0.28   0.26   3.6%  11.5%
Book value per share  15.93   15.63   14.88   1.9%  7.1%
Tangible book value per share(1)  15.47   15.18   14.45   1.9%  7.1%
Common shares outstanding  7,131,186   7,214,734   7,264,261   -1.2%  -1.8%
                     
PERFORMANCE RATIOS                    
Return on average assets  0.71%  0.74%  0.78%  -4.1%  -9.0%
Return on average equity  7.15%  7.18%  6.83%  -0.4%  4.7%
Net interest margin  3.23%  3.38%  3.52%  -4.4%  -8.2%
Net interest income to average assets  3.06%  3.20%  3.34%  -4.4%  -8.4%
Noninterest expense to average assets  2.29%  2.62%  2.95%  -12.6%  -22.4%
Efficiency ratio(2)  66.94%  65.09%  69.31%  2.8%  -3.4%
Dividend payout ratio  3.81%  3.57%  3.19%  6.7%  19.4%
Net charge-offs to average loans  0.02%  0.02%  0.03%  0.0%  33.3%
                     
                     
(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 
  9/30/2016  6/30/2016  9/30/2015  Linked Quarter  Year/Year 
ASSET QUALITY RATIOS                    
Nonperforming assets to total assets  0.80%  0.51%  0.40%  56.9%  100.0%
Nonperforming loans to total loans  1.06%  0.67%  0.37%  58.2%  186.5%
Allowance for loan losses to total loans  0.87%  0.87%  0.83%  0.0%  4.8%
Allowance for loan losses to nonperforming loans  82.4%  129.6%  226.4%  -36.4%  -63.6%
                     
CAPITAL RATIOS                    
Investar Holding Corporation:                    
Total equity to total assets  9.84%  10.01%  11.53%  -1.7%  -14.7%
Tangible equity to tangible assets(1)  9.59%  9.75%  11.23%  -1.6%  -14.6%
Tier 1 leverage ratio  10.10%  10.46%  11.61%  -3.4%  -13.0%
Common equity tier 1 capital ratio(2)  11.03%  11.11%  12.69%  -0.7%  -13.1%
Tier 1 capital ratio(2)  11.38%  11.47%  13.11%  -0.8%  -13.2%
Total capital ratio(2)  12.12%  12.19%  13.82%  -0.6%  -12.3%
Investar Bank:                    
Tier 1 leverage ratio  9.94%  10.26%  11.25%  -3.1%  -11.6%
Common equity tier 1 capital ratio(2)  11.20%  11.25%  12.71%  -0.4%  -11.9%
Tier 1 capital ratio(2)  11.20%  11.25%  12.71%  -0.4%  -11.9%
Total capital ratio(2)  11.94%  11.97%  13.42%  -0.3%  -11.0%
                     
                     
(1) Non-GAAP financial measure. See reconciliation. 
(2) Estimated for September 30, 2016. 


INVESTAR HOLDING CORPORATION 
CONSOLIDATED BALANCE SHEETS 
(Amounts in thousands, except share data) 
(Unaudited) 
             
  September 30, 2016  June 30, 2016  September 30, 2015 
ASSETS            
Cash and due from banks $10,172  $9,958  $6,595 
Interest-bearing balances due from other banks  35,811   27,175   13,058 
Federal funds sold  172   1   223 
Cash and cash equivalents  46,155   37,134   19,876 
             
Available for sale securities at fair value (amortized cost of $147,609, $149,986, and $84,218, respectively)  148,981   151,841   84,566 
Held to maturity securities at amortized cost (estimated fair value of $21,625, $25,810, and $27,486, respectively)  21,454   25,656   27,525 
Loans held for sale  40,553   46,717   55,653 
Loans, net of allowance for loan losses of $7,383, $7,091, and $5,911, respectively  839,445   810,379   704,650 
Other equity securities  7,388   7,371   4,899 
Bank premises and equipment, net of accumulated depreciation of $6,380, $6,017, and $5,796, respectively  31,835   30,147   29,916 
Other real estate owned, net  279   279   1,178 
Accrued interest receivable  3,081   2,840   2,560 
Deferred tax asset  1,384   1,459   1,803 
Goodwill and other intangible assets  3,244   3,254   3,185 
Bank-owned life insurance  7,150   7,101   - 
Other assets  3,256   2,752   1,936 
Total assets $1,154,205  $1,126,930  $937,747 
             
LIABILITIES            
Deposits            
Noninterest-bearing $112,414  $109,828  $94,533 
Interest-bearing  794,637   757,377   635,901 
Total deposits  907,051   867,205   730,434 
Advances from Federal Home Loan Bank  88,943   93,599   47,900 
Repurchase agreements  23,554   28,854   34,648 
Junior subordinated debt  3,609   3,609   3,609 
Accrued taxes and other liabilities  17,472   20,900   13,028 
Total liabilities  1,040,629   1,014,167   829,619 
             
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; 7,359,666, 7,359,976, and 7,304,910 shares issued and 7,131,186, 7,214,734, and 7,264,261 shares outstanding, respectively  7,360   7,360   7,305 
Treasury stock  (3,526)  (2,249)  (630)
Surplus  85,124   84,958   84,588 
Retained earnings  24,465   22,507   17,257 
Accumulated other comprehensive income (loss)  153   187   (392)
Total stockholders’ equity  113,576   112,763   108,128 
Total liabilities and stockholders’ equity $1,154,205  $1,126,930  $937,747 
             


INVESTAR HOLDING CORPORATION 
CONSOLIDATED STATEMENTS OF OPERATIONS 
(Amounts in thousands, except share data) 
(Unaudited) 
                     
  For the three months ended  For the nine months ended 
  September 30, 2016  June 30, 2016  September 30, 2015  September 30, 2016  September 30, 2015 
                     
INTEREST INCOME                    
Interest and fees on loans $10,011  $9,781  $8,912  $29,277  $25,856 
Interest on investment securities  920   891   550   2,667   1,558 
Other interest income  62   47   18   146   53 
Total interest income  10,993   10,719   9,480   32,090   27,467 
                     
INTEREST EXPENSE                    
Interest on deposits  1,934   1,763   1,358   5,212   3,849 
Interest on borrowings  306   298   170   920   387 
Total interest expense  2,240   2,061   1,528   6,132   4,236 
Net interest income  8,753   8,658   7,952   25,958   23,231 
                     
Provision for loan losses  450   800   400   1,704   1,500 
Net interest income after provision for loan losses  8,303   7,858   7,552   24,254   21,731 
                     
NONINTEREST INCOME                    
Service charges on deposit accounts  79   88   95   264   286 
Gain on sale of investment securities, net  204   144   334   428   468 
Gain on sale of fixed assets, net  -   1,252   14   1,252   14 
Gain (loss) on sale of real estate owned, net  -   10   (147)  11   (141)
Gain on sale of loans, net  -   -   1,023   313   3,831 
Fee income on loans held for sale, net  118   106   261   347   771 
Servicing fees  392   431   429   1,291   1,082 
Other operating income  236   225   158   666   462 
Total noninterest income  1,029   2,256   2,167   4,572   6,773 
Income before noninterest expense  9,332   10,114   9,719   28,826   28,504 
                     
NONINTEREST EXPENSE                    
Depreciation and amortization  371   369   362   1,110   1,081 
Salaries and employee benefits  3,945   3,890   4,161   11,708   12,040 
Occupancy  265   242   217   743   655 
Data processing  374   367   389   1,115   1,099 
Marketing  102   102   35   316   155 
Professional fees  312   375   271   966   770 
Customer reimbursements  -   584   -   584   - 
Other operating expenses  1,179   1,175   1,578   3,494   4,319 
Total noninterest expense  6,548   7,104   7,013   20,036   20,119 
Income before income tax expense  2,784   3,010   2,706   8,790   8,385 
Income tax expense  747   1,005   850   2,758   2,766 
Net income $2,037  $2,005  $1,856  $6,032  $5,619 
                     
EARNINGS PER SHARE                    
Basic earnings per share $0.29  $0.28  $0.26  $0.85  $0.78 
Diluted earnings per share $0.29  $0.28  $0.26  $0.84  $0.78 
Cash dividends declared per common share $0.01  $0.01  $0.01  $0.03  $0.02 
                     


INVESTAR HOLDING CORPORATION 
EARNINGS PER COMMON SHARE 
(Amounts in thousands, except share data) 
(Unaudited) 
                     
  For the three months ended  For the nine months ended 
  September 30, 2016  June 30, 2016  September 30, 2015  September 30, 2016  September 30, 2015 
                     
Net income available to common stockholders $2,037  $2,005  $1,856  $6,032  $5,619 
Weighted average number of common shares outstanding used in computation of basic earnings per common share  7,059,953   7,158,532   7,217,006   7,137,398   7,218,603 
Effect of dilutive securities:                    
Restricted stock  15,546   15,298   9,326   8,991   4,812 
Stock options  15,369   14,715   13,980   14,920   12,385 
Stock warrants  11,575   11,231   12,269   11,360   11,284 
Weighted average number of common shares outstanding plus effect of dilutive securities used in computation of diluted earnings per common share  7,102,443   7,199,776   7,252,581   7,172,669   7,247,084 
Basic earnings per share $0.29  $0.28  $0.26  $0.85  $0.78 
Diluted earnings per share $0.29  $0.28  $0.26  $0.84  $0.78 
                     


INVESTAR HOLDING CORPORATION 
CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS 
(Amounts in thousands) 
(Unaudited) 
                                     
  For the three months ended 
  September 30, 2016  June 30, 2016  September 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 $874,272  $10,011   4.54% $852,475  $9,781   4.60% $777,080  $8,912   4.55%
Securities:                                    
Taxable  136,047   728   2.12   129,126   732   2.27   82,476   444   2.14 
Tax-exempt  30,733   192   2.48   25,105   159   2.54   17,234   106   2.44 
Interest-bearing balances with banks  34,093   62   0.72   21,654   47   0.87   18,418   18   0.39 
Total interest-earning assets  1,075,145   10,993   4.06   1,028,360   10,719   4.18   895,208   9,480   4.20 
Cash and due from banks  7,138           7,647           5,669         
Intangible assets  3,248           3,258           3,189         
Other assets  56,273           54,123           46,061         
Allowance for loan losses  (7,213)          (6,784)          (5,893)        
Total assets $1,134,591          $1,086,604          $944,234         
                                     
Liabilities and stockholders’ equity                                    
Interest-bearing liabilities:                                    
Deposits:                                    
Interest-bearing demand $262,841  $433   0.65% $247,052  $393   0.64% $229,919  $369   0.64%
Savings deposits  51,924   88   0.67   52,728   88   0.67   53,407   91   0.68 
Time deposits  469,826   1,413   1.19   439,898   1,282   1.17   350,906   898   1.02 
Total interest-bearing deposits  784,591   1,934   0.98   739,678   1,763   0.96   634,232   1,358   0.85 
Short-term borrowings  98,286   237   0.96   103,274   229   0.89   68,544   32   0.19 
Long-term debt  22,644   69   1.21   23,434   69   1.18   35,836   138   1.53 
Total interest-bearing liabilities  905,521   2,240   0.98   866,386   2,061   0.95   738,612   1,528   0.82 
Noninterest-bearing deposits  102,736           95,537           87,425         
Other liabilities  13,278           12,646           10,402         
Stockholders’ equity  113,056           112,035           107,795         
Total liability and stockholders’ equity $1,134,591          $1,086,604          $944,234         
Net interest income/net interest margin     $8,753   3.23%     $8,658   3.38%     $7,952   3.52%
                                     


INVESTAR HOLDING CORPORATION 
CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS 
(Amounts in thousands) 
(Unaudited) 
                         
                         
  For the nine months ended 
  September 30 2016  September 30, 2015 
  Average
Balance		  Interest
Income/
Expense		  Yield/ Rate  Average
Balance		  Interest
Income/
Expense		  Yield/ Rate 
Assets                        
Interest-earning assets:                        
Loans $853,116  $29,277   4.57% $740,652  $25,856   4.67%
Securities:                        
Taxable  125,982   2,172   2.30   76,069   1,214   2.13 
Tax-exempt  25,920   495   2.54   18,381   344   2.50 
Interest-bearing balances with banks  25,608   146   0.76   17,863   53   0.40 
Total interest-earning assets  1,030,626   32,090   4.15   852,965   27,467   4.31 
Cash and due from banks  7,335           5,597         
Intangible assets  3,228           3,199         
Other assets  54,478           45,619         
Allowance for loan losses  (6,770)          (5,497)        
Total assets $1,088,897          $901,883         
                         
Liabilities and stockholders’ equity                        
Interest-bearing liabilities:                        
Deposits:                        
Interest-bearing demand $249,960  $1,205   0.64% $219,018  $1,034   0.63%
Savings deposits  52,596   265   0.67   54,158   274   0.68 
Time deposits  431,328   3,742   1.16   339,129   2,541   1.00 
Total interest-bearing deposits  733,884   5,212   0.95   612,305   3,849   0.84 
Short-term borrowings  111,418   710   0.85   53,030   72   0.18 
Long-term debt  24,243   210   1.15   39,213   315   1.07 
Total interest-bearing liabilities  869,545   6,132   0.94   704,548   4,236   0.80 
Noninterest-bearing deposits  95,225           82,157         
Other liabilities  12,135           8,736         
Stockholders’ equity  111,992           106,442         
Total liability and stockholders’ equity $1,088,897          $901,883         
Net interest income/net interest margin     $25,958   3.36%     $23,231   3.64%
                         


INVESTAR HOLDING CORPORATION 
RECONCILIATION OF NON GAAP FINANCIAL MEASURES 
(Amounts in thousands, except share data) 
(Unaudited) 
             
             
  September 30, 2016  June 30, 2016  September 30, 2015 
Tangible common equity            
Total stockholder's equity $113,576  $112,763  $108,128 
Adjustments:            
Goodwill  2,684   2,684   2,684 
Core deposit intangible  460   470   501 
Trademark intangible  100   100   - 
Tangible common equity $110,332  $109,509  $104,943 
Tangible assets            
Total assets $1,154,205  $1,126,930  $937,747 
Adjustments:            
Goodwill  2,684   2,684   2,684 
Core deposit intangible  460   470   501 
Trademark intangible  100   100   - 
Tangible assets $1,150,961  $1,123,676  $934,562 
             
Common shares outstanding  7,131,186   7,214,734   7,264,261 
Tangible equity to tangible assets  9.59%  9.75%  11.23%
Book value per common share $15.93  $15.63  $14.88 
Tangible book value per common share  15.47   15.18   14.45 
             

 

For further information contact:

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

Source: Investar Holding Corporation

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