UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): November 9, 2015

 

 

Investar Holding Corporation

(Exact name of registrant as specified in its charter)

 

 

 

Louisiana   001-36522   27-1560715

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

7244 Perkins Road

Baton Rouge, Louisiana 70808

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (225) 227-2222

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 7.01. Regulation FD Disclosure

Investar Holding Corporation (the “Company”) has announced that John J. D’Angelo, Chief Executive Officer and President, will make presentations regarding the Company at the Sandler O’Neill + Partners, L.P. East Coast Financial Services Conference in Palm Beach, Florida on November 9, 2015 – November 11, 2015. The slides furnished as Exhibit 99.1 to this Current Report on Form 8-K were prepared for the presentations.

The information in this report is being furnished, not filed, pursuant to Regulation FD. Accordingly, the information in Items 7.01 and 9.01 of this report will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference. The furnishing of the information in this report is not intended to, and does not, constitute a determination or admission by the Company that the information in this report is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company.

The exhibit to this report may include certain statements concerning expectations for the future that are forward-looking statements as defined by federal securities law. Any forward-looking statements 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 review 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, 2014, filed with the Securities and Exchange Commission.

 

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit
Number
  

Description of Exhibit

99.1    Presentation slides to be used at the Sandler O’Neill East Coast Banking Conference in Palm Beach, Florida on November 9, 2015 – November 11, 2015.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

   

INVESTAR HOLDING CORPORATION

Date: November 10, 2015

   

By:

 

/s/ John J. D’Angelo

     

John J. D’Angelo

     

President and Chief Executive Officer

SLIDE 1

NASDAQ: ISTR Sandler O’Neill East Coast Financial Services Conference November 2015 Exhibit 99.1


SLIDE 2

Forward-looking Statements This presentation may include forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon current expectations and assumptions about our business that are subject to a variety of risks and uncertainties that could cause the actual results to differ materially from those described in this presentation. You should not rely on forward-looking statements as a prediction of future events. Additional information regarding factors that could cause actual results to differ materially from those discussed in any forward looking statements are described in reports and registration statements we file with the SEC, including our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, copies of which are available on the Investar internet website http://www.investarbank.com. We disclaim any obligation to update any 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. www.investarbank.com NASDAQ: ISTR We encourage everyone to visit the Investors Section of our website at www.investarbank.com, where we have posted additional important information such as press releases and SEC filings. We intend to use our website to expedite public access to time-critical information regarding the Company in advance of or in lieu of distributing a press release or a filing with the SEC disclosing the same information.


SLIDE 3

Company Profile as of September 30, 2015


SLIDE 4

Senior Management John J. D’Angelo, President & CEO Christopher L. Hufft, Chief Financial Officer Founding President and Chief Executive Officer New Orleans native; graduate of Louisiana State University Prior to founding Investar, Mr. D’Angelo was president and director of Aegis Lending Corporation, a mortgage lending company with operations in 46 states and the District of Columbia Previously, Mr. D’Angelo held various senior positions at Hibernia National Bank (the predecessor to Capital One Bank, N.A.), focusing on the East Baton Rouge Parish, Louisiana, market Current ownership of 2% Joined the Bank in February 2014 as Chief Accounting Officer Prior to joining the Bank, Mr. Hufft served for 9 years as the Vice President of Accounting at Amedisys, Inc., a publicly-traded home health and hospice company Mr. Hufft, a licensed certified public accountant, also spent seven years in public accounting, serving both public and privately-held clients in the banking, healthcare and manufacturing sectors B.S. Accounting – Louisiana State University Travis M. Lavergne, Chief Credit Officer Served as Executive Vice President and Chief Credit Officer since March, 2013 and Chief Risk Management Officer since joining in July 2012 Prior to joining the Bank, Mr. Lavergne was a Senior Examiner at the Louisiana Office of Financial Institutions from September 2005 to July 2012 B.S. Finance – Louisiana State University M.B.A. Southeastern Louisiana University


SLIDE 5

Accomplishments to Date Key Areas Staffed with Experienced Bankers Very Strong Growth Complemented by Two Successful Acquisitions High Quality Organic Loan Portfolio Nimble Institution Able to Shift Resources as Customers’ Demands Change Firmly Established in Four Key Louisiana Markets Since commencing operations in June 2006, Investar has successfully established a profitable commercial bank in multiple growth markets: Completed Initial Public Offering of 3.3 million shares generating net proceeds of $41.7 million


SLIDE 6

Franchise Overview Franchise History June 2006 – Chartered with an initial capitalization of $10.1 million 2Q 2011 – Opened two additional branches in Baton Rouge Market May 2013 – Entered the Hammond market through the acquisition of First Community Bank October 1, 2011 – Acquired South Louisiana Business Bank July 2013 – Entered Lafayette market by opening a de novo branch December 2012 – Entered the New Orleans market through the purchase of two closed branch locations and hiring of local bankers May 2009 – Opened second branch in Baton Rouge FY 2008 – Achieved profitability in second full year of operations July 2014 – Completed initial public offering of 3.3 million shares August 2014 – Opened additional branch in Baton Rouge market


SLIDE 7

Franchise Overview Branch Map Current Total Assets: $937.7 Million 11 full-service branches in the Baton Rouge, New Orleans, Hammond, and Lafayette markets 165 employees at September 30, 2015 One new branch opening in 2015 Institutional ownership 41% Insider ownership 9% 5-year CAGRs¹ Assets – 38.3% Loans – 35.6% Deposits – 34.2% For the five years ended December 31, 2014


SLIDE 8

Current Strategy Management Continue to add experienced bankers in new and existing markets Market Southern Louisiana focus with complementary new market expansion Growth Leverage existing infrastructure in four markets Limited de novo branching Opportunistic, disciplined acquisition strategy Focus on relationship banking Asset Quality Loan portfolio diversity Disciplined credit philosophy – legacy delinquencies less than 1% Profitability Expected to increase as investment in infrastructure has already been made


SLIDE 9

Opportunistic Acquirer Two whole bank transactions since 2011 Processes and infrastructure established to analyze selective opportunities going forward Announced: June, 2011 Closed: October, 2011 1 Branch in Prairieville, LA $31.5 million in gross loans¹ $38.6 million in deposits¹ Announced: January, 2013 Closed: May, 2013 2 Branches – Hammond and Mandeville, LA $77.5 million in gross loans¹ $86.5 million in deposits¹ Rationale Entered Ascension Parish with 3.4% deposit market share Capital accretive Management talent Rationale Recorded bargain purchase gain Initial entrance into Hammond market plus another location in the New Orleans MSA South Louisiana Business Bank First Community Bank Focused on existing footprint and complementary markets in Southern Louisiana 60% of Louisiana-headquartered banks < $250 million in assets² 81% of Louisiana-headquartered banks < $500 million in assets² Current Landscape Based on fair values at time of closing As of March 31, 2015


SLIDE 10

Growth Has Been the Story Total Assets +33% +76% +32% FCB Acquisition SLBB Acquisition Note: Gray shading denotes the marked value of acquired assets on date of the respective acquisitions of South Louisiana Bank (closed on October 1, 2011) and First Community Bank (closed on May 1, 2013). Percentage growth excludes HFS balances. +23% +14% HFS HFS HFS $5 HFS $17 HFS $8 HFS $6


SLIDE 11

Growth Has Been the Story Gross Loans +24% +39% +75% +31% FCB Acquisition SLBB Acquisition Note: Light blue shading denotes the marked value of acquired loans on date of the respective acquisitions of South Louisiana Bank (closed on October 1, 2011) and First Community Bank (closed on May 1, 2013). Percentage growth excludes HFS balances. +14% HFS HFS HFS $6 HFS $8 HFS $17 HFS $5


SLIDE 12

Loan Composition Loan Composition Amount % Amount % Amount % Amount % Amount % Mortgage loans on real estate Construction and land development 20,271 $ 7.0% 63,170 $ 12.5% 71,350 $ 11.4% 79,796 $ 11.2% 8,446 $ 11.8% 1-4 Family 54,813 19.0 104,685 20.8 137,519 22.1 154,277 21.7 $16,758 12.2 Multifamily 1,750 0.6 14,286 2.8 17,458 2.8 24,484 3.5 $7,026 40.2 Farmland 64 0.0 830 0.2 2,919 0.5 3,009 0.4 $90 30.8 Commercial real estate Owner occupied 52,533 18.2 78,415 15.6 119,668 19.2 132,419 18.7 $12,751 10.7 Nonowner occupied 47,394 16.4 78,948 15.6 105,390 16.9 126,555 17.8 $21,165 20.1 Commercial and industrial 15,319 5.3 32,665 6.5 54,187 8.7 67,671 9.5 $13,484 24.9 Consumer 96,609 33.5 131,096 26.0 114,299 18.4 122,350 17.2 $8,051 7.0 Total loans 288,753 $ 100% 504,095 $ 100% 622,790 $ 100% 710,561 $ 100% 87,771 $ 14.1% Loans held for sale 16,988 5,029 103,396 55,653 (47,743) (46.2) Total gross loans 305,741 $ 509,124 $ 726,186 $ 766,214 $ 40,028 $ 5.5% Increase/(Decrease) 2012 2013 2014 2015 December 31, September 30,


SLIDE 13

Loan Composition September 30, 2015 Business Lending Portfolio² Total Loans¹: $710.6 million Yield on loans: 4.67% 51% of CRE is owner occupied Total loans includes gross loans less loans held for sale Business lending portfolio includes owner occupied CRE and C&I loans as of September 30, 2015 Total Business Lending Portfolio2: $132.4 million


SLIDE 14

Credit Metrics NPAs / Total Loans + OREO NCOs / Average Loans Peers¹ Investar Peers¹ Investar Peer group consists of UBPR peers produced by the FFIEC and defined by a combination of asset size, number of branches and location in a Metropolitan Statistical Area.


SLIDE 15

Disciplined Lending Reserves / Total Loans¹,²: 0.83% Reserves / (Total Loans¹ – Acquired): 0.88% (Reserves + FV Marks) / Total Loans¹,²: 0.93% Reserves / Total Loans¹,² Reserves / NPLs Provision Expense / NCOs NM 5 NM NM 3 4 Total loans excludes loans held for sale and allowance for loan losses Includes $39.5 million of loans from previous acquisitions that were marked-to-market as of September 30, 2015 Reserves/NPLs for December 31, 2011 was 6,236% Reserves/NPLs for December 31, 2012 was 5,136% Investar recorded net recoveries in FY 2012


SLIDE 16

Deposit Composition and Growth Deposit Composition ¹ ($730 million) Total Deposits 2010 - Present CAGR: 33% Target: 20% of total deposits are noninterest-bearing Treasury Management Small Business Banking Focus on Relationship Banking As of September 30, 2015 Cost of funds of interest-bearing deposits: 0.84% YTD Growth in noninterest-bearing deposits: 35% 16


SLIDE 17

Financial Highlights Gross loans includes loans held for sale (HFS) Efficiency ratio is a non-GAAP financial measure Amounts in thousands, except share data 2015 2014 2014 2013 Financial Highlights Total Assets $937,747 $784,597 $879,354 $634,946 Gross Loans (1) $766,214 $634,747 $726,186 $509,124 Total Deposits $730,434 $621,612 $628,118 $532,606 Total Stockholders' Equity $108,128 $102,165 $103,384 $55,483 Shares Outstanding 7,264,261 7,253,774 7,262,085 3,945,114 Capital Ratios Tangible Equity / Tangible Assets 11.23% 12.66% 11.76% 8.74% Tier 1 Leverage Ratio 12.61% 13.52% 12.61% 9.53% Total RBC Ratio 14.41% 16.42% 14.41% 11.51% Asset Quality Ratios NPAs / Total Assets 0.40% 0.56% 0.69% 0.79% NPLs / Loans 0.37% 0.25% 0.54% 0.30% Loan Loss Reserves / Total Loans 0.83% 0.74% 0.74% 0.67% Loan Loss Reserves / NPLs 226.43% 296.01% 138.61% 227.00% NCOs / Avg Loans 0.03% 0.03% 0.07% 0.09% Performance Ratios Net Income $1,856 $1,442 $5,397 $3,168 ROAE 6.83% 5.72% 6.80% 6.10% ROAA 0.78% 0.75% 0.73% 0.64% Net Interest Margin 3.52% 3.86% 3.85% 4.10% Efficiency Ratio (2) 69.31% 70.47% 74.90% 78.07% Per Share Data Tangible Book Value per Share $14.45 $13.64 $13.79 $13.24 Diluted Earnings per Share $0.26 $0.20 $0.93 $0.81 Year Ended December 31, Quarter Ended September 30,


SLIDE 18

Performance Metrics Net Interest Margin Net Interest Margin (%) Return on average assets was adjusted for the bargain purchase gain recognized in 2013, and the net effect of the Company’s investment in a tax credit entity recognized in 2014. Return on Average Assets ROAA (%)1


SLIDE 19

Performance Metrics Efficiency ratio is a non-GAAP financial measure. The efficiency ratio was adjusted for the impairment related to the Company’s investment in a tax credit entity for the year ended December 31, 2014 and for the bargain purchase gain recognized as a result of the acquisition First Community Bank for the year ended December 31, 2013. Expense Ratios Efficiency Ratio¹ (%) Noninterest Expense / Avg. Assets (%)


SLIDE 20

Profitability +70% +40% +34% +136% Net Income and Earnings Per Share Net Income (Thousands) Earnings per Share Net Income (Thousands) Earnings per Share


SLIDE 21

Investment Highlights Strong balance sheet and earnings growth Meaningful organic opportunities exist in market Profitable with room to grow into current infrastructure Clean asset quality Experienced management team Experienced, disciplined acquirer Committed level of insider ownership Management aligned with shareholders


SLIDE 22

Appendix


SLIDE 23

Non-GAAP Financial Measures Tangible book value per share, the ratio of tangible equity to tangible assets, and the efficiency ratio are not financial measures recognized under GAAP and, therefore, are considered non-GAAP financial measures. Our management, banking regulators, many financial analysts and other investors use these non-GAAP financial measures to compare the capital adequacy of banking organizations with significant amounts of preferred equity and/or goodwill or other intangible assets, which typically stem from the use of the purchase accounting method of accounting for mergers and acquisitions. Tangible equity, tangible assets, tangible book value per share or related measures should not be considered in isolation or as a substitute for total stockholders’ equity, total assets, book value per share or any other measure calculated in accordance with GAAP. Moreover, the manner in which we calculate tangible equity, tangible assets, tangible book value per share and any other related measures may differ from that of other companies reporting measures with similar names. The following table reconciles, as of the dates set forth below, stockholders’ equity (on a GAAP basis) to tangible equity and total assets (on a GAAP basis) to tangible assets and calculates our tangible book value per share. Dollar values in thousands except per share amounts 2010 2011 2012 2013 2014 Q3 2014 Q3 2015 Total Stockholders' Equity - GAAP $16,814 $35,166 $43,553 $55,483 $103,384 $102,165 $108,128 Adjustments Goodwill $0 $2,684 $2,684 $2,684 $2,684 $2,684 $2,684 Other Intangibles $0 $155 $145 $573 $532 $542 $511 Tangible Equity $16,814 $32,327 $40,724 $52,226 $100,168 $98,939 $104,933 Total Assets - GAAP $209,465 $279,330 $375,446 $634,946 $879,354 $784,597 $937,747 Adjustments Goodwill $0 $2,684 $2,684 $2,684 $2,684 $2,684 $2,684 Other Intangibles $0 $155 $145 $573 $532 $552 $501 Tangible Assets $209,465 $276,491 $372,617 $631,689 $876,138 $781,361 $934,562 Total Shares Outstanding Book Value Per Share $11.46 $12.82 $13.56 $14.06 $14.24 $14.08 $14.88 Effect of Adjustment $0.00 ($1.03) ($0.88) ($0.82) ($0.45) $0.44 ($0.43) Tangible Book Value Per Share $11.46 $11.79 $12.68 $13.24 $13.79 $13.64 $14.45 Total Equity to Total Assets 8.03% 12.59% 11.60% 8.74% 11.76% 13.02% 11.53% Effect of Adjustment - (0.90) (0.67) (0.47) (0.33) (0.36) (0.30) Tangible Equity to Tangible Assets 8.03% 11.69% 10.93% 8.27% 11.43% 12.66% 11.23% Efficiency Ratio Noninterest Expense $6,195 $8,615 $11,645 $19,024 $24,384 $6,313 $7,013 Income before Noninterest Expense $7,293 $10,116 $14,985 $23,340 $30,926 $8,454 $9,719 Provision $1,019 $639 $685 $1,026 $1,628 $505 $400 Efficiency Ratio 74.5% 80.1% 74.3% 78.1% 74.9% 70.5% 69.3% Year Ended December 31, Three Months Ended


SLIDE 24

Income Statement (dollars in thousands, except share data) Three Months Ended 2010 2011 2012 2013 2014 Q3 2014 Q3 2015 INTEREST INCOME Interest and fees on loans $ 9,082 $ 10,877 $ 13,968 $ 21,686 $ 29,979 $ 7,801 $ 8,912 Interest on investment securities 611 406 585 756 1,339 367 550 Other interest income 17 19 34 30 50 14 18 TOTAL INTEREST INCOME 9,710 11,302 14,857 22,472 31,368 8,182 9,480 INTEREST EXPENSE Interest on deposits 3,194 2,445 2,361 3,204 4,273 1,084 1,358 Interest on borrowings 300 134 181 256 402 98 170 TOTAL INTEREST EXPENSE 3,494 2,579 2,542 3,460 4,675 1,182 1,528 NET INTEREST INCOME 6,216 8,723 12,042 19,012 26,694 7,000 7,952 PROVISION FOR LOAN LOSSES 1,019 639 685 1,026 1,628 505 400 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 5,197 8,084 11,360 17,986 25,066 6,495 7,552 NON-INTEREST INCOME Service charges on deposit accounts 74 102 118 214 305 85 95 Gain on sale of investment securities, net 184 160 139 449 340 63 334 Net gain on sale of assets - 55 36 346 1,892 1,391 876 Bargain purchase gain - - - 906 - - - Fee income on mortgage loans held for sale, net 1,733 1,569 3,131 2,843 2,119 85 261 Other operating income 105 146 201 596 1,204 335 601 TOTAL NON-INTEREST INCOME 2,096 2,032 3,625 5,354 5,860 1,959 2,167 INCOME BEFORE NON-INTEREST EXPENSE 7,293 10,116 14,985 23,340 30,926 8,454 9,719 NON-INTEREST EXPENSE Salaries and employee benefits 3,538 4,909 7,461 11,772 14,565 3,773 4,161 Impairment on investment in tax credit entity - - - - 690 - 54 Operating expenses 2,657 3,706 4,184 7,252 9,129 2,540 2,798 TOTAL NON-INTEREST EXPENSE 6,195 8,615 11,645 19,024 24,384 6,313 7,013 INCOME BEFORE INCOME TAX EXPENSE 1,098 1,501 3,340 4,316 6,542 2,141 2,706 INCOME TAX EXPENSE 383 502 979 1,148 1,145 699 850 NET INCOME 715 $ 999 $ 2,361 $ 3,168 $ 5,397 $ 1,442 $ 1,856 $ Basic earnings per share 0.51 $ 0.54 $ 0.79 $ 0.86 $ 0.98 $ 0.20 $ 0.26 $ Diluted earnings per share 0.43 $ 0.47 $ 0.71 $ 0.81 $ 0.93 $ 0.20 $ 0.26 $ Year Ended December 31,