1
NASDAQ: ISTR
Investor Presentation
November 21, 2014
Exhibit 99.1
|
Forward-looking Statements
2
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.
|
Senior
Management
John J. D’Angelo,
President & CEO
Christopher L. Hufft,
Chief Accounting 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 1.9%
•
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
3
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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:
4
Completed Initial Public Offering of 3.3 million shares generating net proceeds of
$41.5 million
|
Franchise
Overview
Franchise History
Branch Map
5
Current
June
2006
–
Chartered
with
aninitial
capitalization
of
$10.1
million
2H
2011
–
Opened
two
additional
branches
in
Baton
Rouge
Market
May
2013
–
Entered
the
Hammond
market
through
the
acquisition
of
First
Community
Bank
June 2006
October 2011
October
1,
2011
–
Acquired
South
Louisiana
Business
Bank
December 2012
May 2013
July 2013
July
2013
–
Entered
Lafayette
market
by openinga
de
novo
branch
December
2012
–
Entered
the
New
Orleans
market
through
the
purchase
of
two
closed
branch
locations
and
hiring of
local
bankers
•
11 full-service branches in the Baton Rouge, New
Orleans, Hammond, and Lafayette markets
•
175 employees at 9/30/14
•
One new branch opening in 2015
•
5-year CAGRs¹
–
Assets –
34.8%
–
Loans –
33.2%
–
Deposits –
35.2%
May
2009
–
Opened
second
branch
in
Baton
Rouge
May 2009
FY 2008
FY
2008
–
Achieved
profitability
in
second
full
year
of
operations
(1)
For the five years ended December 31, 2013
July
2014
–
Completed
initial
public
offering
of
3.3
million
shares
July 2014
August 2014
August
2014
–
Opened
additional
branch
in
Baton
Rouge
market
|
Financial
Highlights
6
(1)
Efficiency ratio is a non-GAAP financial measure
Note: Gross loans includes loans held for sale (HFS)
Dollar values in thousands except share data
Year Ended December 31,
Nine Months Ended
2012
2013
9/30/2014
Financial Highlights
Total Assets
$375,446
$634,946
$784,597
Gross Loans
$305,741
$509,124
$634,747
Total Deposits
$299,670
$532,606
$621,612
Total Stockholders' Equity
$43,553
$55,483
$102,165
Shares Outstanding
3,210,816
3,945,114
7,253,774
Capital Ratios
TE / TA
11.60%
8.74%
13.03%
Tier 1 Leverage Ratio
11.55%
9.53%
13.52%
Total RBC Ratio
13.95%
11.51%
16.42%
Asset Quality
NPAs / Total Assets
0.62%
0.79%
0.56%
NPLs / Loans
0.02%
0.30%
0.25%
Loan Loss Reserves / NPLs
5136.00%
227.00%
296.01%
NCOs / Avg Loans
(0.12%)
0.09%
0.04%
Performance Ratios
Net Income
$2,361
$3,168
$3,388
ROAE
5.90%
6.10%
6.34%
ROAA
0.74%
0.64%
0.64%
Net Interest Margin
4.04%
4.10%
3.85%
Efficiency Ratio¹
74.32%
78.07%
73.69%
Per Share Data
Tangible Book Value per Share
$12.68
$13.24
$13.64
Diluted Earnings per Share
$0.71
$0.81
$0.65
|
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
•
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
7
|
Growth Has Been
the Story
Total Assets
Gross Loans
8
FCB Acquisition
FCB Acquisition
SLBB Acquisition
SLBB Acquisition
Note: Grey shading denotes the marked value of acquired assets and 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)
|
Loan
Composition
2007
2014 Q3
Business Lending Portfolio²
9
Total Loans¹: $581.4 million
Total Loans¹: $53.9 million
(1)
Total loans includes gross loans less loans held for sale
(2)
Business lending portfolio includes Owner Occupied CRE and C&I loans as of September 30,
2014
|
Credit
Metrics
10
NPAs / Total Loans + OREO
NCOs / Average Loans
2012
Peers¹
Investar
Peers¹
Investar
(1)
Peer
group
consists
of
2013
UBPR
peers
produced
by
the
FFIEC
and
defined
by
a
combination
of
asset
size,
number
of
branches
and
location
in
a
Metropolitan
Statistical
Area
|
Disciplined
Lending
11
•
Reserves
/
Total
Loans¹
,
²:
0.74%
•
Reserves / (Total Loans¹
–
Acquired): 0.81%
•
(Reserves
+
FV
Marks)
/
Total
Loans¹
,
²:
0.90%
Reserves / Total Loans¹
,
²
Reserves / NPLs
Provision Expense / NCOs
(1)
Total loans excludes loans held for sale and allowance for loan losses
(2)
Includes $48.6 million of loans from previous acquisitions that were marked-to-market
as of September 30, 2014
(3)
Reserves/NPLs for December 31, 2011 was 6,236%
(4)
Reserves/NPLs for December 31, 2012 was 5,136%
(5)
Investar recorded net recoveries in FY 2012
Ex Acquired NPLs
1,250%
578%
|
Auto
Portfolio
•
Core competency
•
19.8% of the loan portfolio, net of HFS
•
Program began early 2008
•
Hired an experienced team from Capital One and have added experienced personnel, most
recently from Chase
•
Long-term relationships with auto dealers
•
Non-exclusive relationships with dealerships in Baton Rouge, New Orleans, Hammond and
Lafayette
•
Currently evaluating new markets including Texas, Mississippi, Alabama and Florida
•
Minimized losses
•
Utilize
reporting
capabilities
to
produce
static
pools
•
Helps identify any negative trends and effectively manage risk
•
Centralized underwriting process performed by Bank
•
Planned sale of pools to manage size of portfolio
•
Approximately $50 million classified as held for sale at September 30, 2014
•
In general, servicing rights are retained (began in 2013
)
12
|
Auto Portfolio
–
By the Numbers
13
•
As of September 30, 2014:
–
19.8% of loan portfolio, net of HFS
–
69 month average original term
–
3.57% average yield
–
736 average FICO score
–
0.12% auto-NCOs / Avg auto loans
Auto Charge-offs
Dollar values in millions
Average Auto Loans
Year Ended December 31,
Nine Months Ended
2009
2010
2011
2012
2013
2013 Q3
2014 Q3
$30.5
$44.4
$70.0
$87.5
$108.4
$101.1
$155.8
|
Deposit
Composition and Growth
Deposit Composition ¹
($621.6 million)
Total Deposits
2009 -
Present
•
Strategy has been to bring in customers through
competitive rates, then implement an
aggressive
cross-sell
strategy
14
(1)
As of September 30, 2014
|
Performance
Metrics
15
Net Interest Margin
Expense Ratios
Year Ended,
2009
2010
2011
2012
2013
2014 Q3
Employees
23
49
70
100
167
175
Locations
2
4
5
7
10
11
(1)
Efficiency ratio is a non-GAAP financial measure
(2)
Represents annualized Q3 2014 data
|
Profitability
+120%
+37%
+29%
+123%
+24%
16
Pre-Tax Income
|
Opportunistic
Acquirer
•
Two whole bank transactions since 2011
•
Processes and infrastructure established to analyze selective opportunities going forward
17
•
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 (86% of book
value)
•
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
•
63% of Louisiana-headquartered banks < $250 million in assets²
•
83% of Louisiana-headquartered banks < $500 million in assets²
Current Landscape
(1)
Based on fair values at time of closing
(2)
As of March 31, 2014
|
Investment
Highlights
•
Strong historical 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
18
|
19
Appendix
|
Loan
Composition
20
Loan Composition
Year Ended December 31,
Quarter Ended
2011
2012
2013
September 30, 2014
Amount
%
Amount
%
Amount
%
Amount
%
Mortgage Loans on Real Estate
Construction and Land
Development
$21,171
9.61%
$20,271
7.02%
$63,170
12.53%
$62,342
10.72%
1-4 Family
46,664
21.19
54,813
18.98
104,685
20.77
131,953
22.69
Multifamily
1,454
0.66
1,750
0.61
14,286
2.83
16,665
2.87
Farmland
8
0.00
64
0.02
830
0.16
2,249
0.39
Non-farmland, Non-
residential
56,467
25.64
99,927
34.61
157,363
31.22
208,868
35.92
Commercial and Industrial
11,499
5.22
15,319
5.31
32,665
6.48
44,299
7.62
Consumer Installment Loans
82,986
37.68
96,609
33.46
131,096
26.01
115,065
19.79
Total Loans
$220,249
100.00%
$288,753
100.00%
$504,095
100.00%
$581,441
100.00%
|
Per Share
Growth
21
TBV / Share
Diluted EPS
|
Non-GAAP
Financial Measures
22
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
Year Ended December 31,
Nine Months Ended
2009
2010
2011
2012
2013
2013 Q3
2014 Q3
Total
Stockholders‘
Equity
-
GAAP
$15,219
$16,814
$35,166
$43,553
$55,483
$55,504
$102,165
Adjustments
Goodwill
$0
$0
$2,684
$2,684
$2,684
$2,684
$2,684
Other Intangibles
$0
$0
$155
$145
$573
$583
$542
Tangible Equity
$15,219
$16,814
$32,327
$40,724
$52,226
$52,237
$98,939
Total Assets -
GAAP
$173,915
$209,465
$279,330
$375,446
$634,946
$563,818
$784,597
Adjustments
Goodwill
$0
$0
$2,684
$2,684
$2,684
$2,684
$2,684
Other Intangibles
$0
$0
$155
$145
$573
$583
$542
Tangible Assets
$173,915
$209,465
$276,491
$372,617
$631,689
$560,551
$781,371
Total Shares Outstanding
Book Value Per Share
$10.88
$11.46
$12.82
$13.56
$14.06
$14.07
$14.08
Effect of Adjustment
$0.00
$0.00
($1.03)
($0.88)
($0.82)
($0.82)
($0.44)
Tangible Book Value Per Share
$10.88
$11.46
$11.79
$12.68
$13.24
$13.25
$13.64
Total Equity to Total Assets
8.75%
8.03%
12.59%
11.60%
8.74%
9.84%
13.03%
Effect of Adjustment
0
0
(0.90)
(0.67)
(0.47)
(0.52)
(0.37)
Tangible Equity to Tangible Assets
8.75%
8.03%
11.69%
10.93%
8.27%
9.32%
12.66%
Efficiency Ratio
Noninterest Expense
$4,052
$6,195
$8,615
$11,645
$19,024
$13,406
$17,429
Income before Noninterest Expense
$4,552
$7,293
$10,116
$14,985
$23,340
$17,454
$22,454
Provision
$1,273
$1,019
$639
$685
$1,026
$340
$1,198
Efficiency Ratio
69.6%
74.5%
80.1%
74.3%
78.1%
75.3%
73.7%
|