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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): October 20, 2021
 

 
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.)
 
10500 Coursey Blvd.
Baton Rouge, Louisiana 70816
(Address of principal executive offices) (Zip Code)
 
Registrants 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))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common stock, $1.00 par value per share
ISTR
The Nasdaq Global Market
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 

 
 

 
Item 2.02
Results of Operations and Financial Condition
 
On October 21, 2021, Investar Holding Corporation (the “Company”), the holding company of Investar Bank, National Association (the “Bank”), issued a press release reporting third quarter 2021 results. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
 
The information contained in Item 2.02, including Exhibit 99.1 of this Current Report, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly set forth by specific reference in such a filing.
 
 
Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
 
(b) and (c) As part of management’s ongoing reorganization efforts, on October 20, 2021, the board of directors of the Company appointed Linda M. Crochet to serve as the Executive Vice President and Chief Operations Officer of the Company and the Bank, replacing Dane M. Babin, who previously served as the Executive Vice President and Chief Operations Officer of the Company and Bank.
 
Ms. Crochet, 58, has over 35 years of banking experience and joined the Bank as the Greater Baton Rouge Portfolio President in January 2019 after serving as Senior Director of Credit Processing Technology within the Credit Risk Management department at Capital One Bank. Ms. Crochet’s appointment as Chief Operations Officer was not pursuant to any arrangement or understanding with respect to any other person. There are no family relationships between Ms. Crochet and any director, executive officer or other person that would require disclosure under Item 401(d) of Regulation S-K under the Securities Act of 1933 (“Regulation S-K”). The Company has not engaged in any transaction in which Ms. Crochet had a direct or indirect material interest within the meaning of Item 404(a) of Regulation S-K.
 
On October 20, 2021, Dane M. Babin notified the Company that he was resigning from all positions with the Company and the Bank, effective November 4, 2021. 
 
A copy of the press release announcing the Company’s management changes is furnished as Exhibit 99.2 to this Current Report on Form 8-K an dis incorporated by reference into this Item 5.02.
 
Item 8.01
Other Events
 
In furtherance of the Company’s management reorganization efforts, on October 20, 2021, the board of directors of the Company appointed Jeffrey W. Martin to serve as the Executive Vice President and Chief Credit Officer of the Company and the Bank. Mr. Martin, 56, has over 28 years of banking experience and joined the Bank as the Business Banking Director in April 2020 after serving as a Commercial Banking Executive at Regions Bank for 26 years.
 
 
Item 9.01
Financial Statements and Exhibits.
 
(d) Exhibits
 
Exhibit Number
 
Description of Exhibit
99.1
 
99.2   Press release dated October 22, 2021
104
 
The cover page of Investar Holding Corporation’s Form 8-K is formatted in Inline XBRL.
 
 

 
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: October 22, 2021
By:
/s/ John J. D’Angelo
   
John J. D’Angelo
   
President and Chief Executive Officer
 
 
EX-99.1 2 ex_282962.htm EXHIBIT 99.1 ex_282962.htm

Exhibit 99.1

 

For Immediate Release

 

Investar Holding Corporation Announces 2021 Third Quarter Results

 

 

BATON ROUGE, LA / ACCESSWIRE / October 21, 2021 / Investar Holding Corporation (“Investar”) (NASDAQ:ISTR), the holding company for Investar Bank, National Association (the “Bank”), today announced financial results for the quarter ended September 30, 2021. Investar reported a net loss of $10.0 million, or $0.95 per diluted common share, for the third quarter of 2021, compared to net income of $5.7 million, or $0.53 per diluted common share, for the quarter ended June 30, 2021, and net income of $4.5 million, or $0.41 per diluted common share, for the quarter ended September 30, 2020. As previously reported, Investar’s third quarter results reflect a large impairment charge recorded as a result of Hurricane Ida, discussed in more detail below under Credit Quality.

 

On a non-GAAP basis, core (loss) earnings per diluted common share for the third quarter of 2021 were ($1.06compared to $0.53 for the first quarter of 2021 and $0.35 for the third quarter of 2020. Core (loss) earnings exclude certain non-operating items including, but not limited to, gain on sale of investment securities, change in the fair value of equity securities, and acquisition expense (refer to the Reconciliation of Non-GAAP Financial Measures tables for a reconciliation of GAAP to non-GAAP metrics).

 

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

 

“Our prayers go out to those families and businesses affected by Hurricane Ida, which hit south Louisiana as a category 4 hurricane on August 29. While none of our branches were significantly affected by the storm, some of our customers, 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 hurricane. We will continue to assist our communities as they rebuild.

 

Unfortunately, our results for the quarter were adversely impacted by the storm that devastated some of our market areas. We recorded an impairment charge of $21.6 million which negatively affected our earnings and performance ratios. However, the Holding Corporation and Bank remain well-capitalized.”

 

Third Quarter Highlights

 

 

Cost of deposits decreased eight basis points to 0.43% for the quarter ended September 30, 2021 compared to 0.51% for the quarter ended June 30, 2021 and decreased 54 basis points compared to 0.97% for the quarter ended September 30, 2020. Our overall cost of funds decreased seven and 53 basis points to 0.63% for the quarter ended September 30, 2021 compared to 0.70% and 1.16% for the quarters ended June 30, 2021 and September 30, 2020, respectively.

 

 

 

 

Total deposits increased $43.5 million, or 1.9%, to $2.30 billion at September 30, 2021, compared to $2.26 billion at June 30, 2021, and increased $469.2 million, or 25.6%, compared to $1.83 billion at September 30, 2020. Investar recorded total deposits with a fair value of $207.0 million from its acquisition of Cheaha Bank (“Cheaha”) on April 1, 2021. The remaining increase is due to organic growth and brokered deposits, which are used to satisfy the required borrowings under Investar’s interest rate swap agreements, due to more favorable pricing. 

 

 

Noninterest-bearing deposits increased $15.3 million, or 2.6%, to $597.5 million at September 30, 2021, compared to $582.1 million at June 30, 2021 and increased $145.4 million, or 32.2%, compared to $452.1 million at September 30, 2020. Investar acquired approximately $45.4 million in noninterest-bearing deposits from Cheaha, and the remaining increase is due to organic growth. Excluding noninterest-bearing deposits acquired from Cheaha, noninterest-bearing deposits increased $100.0 million, or 22.1%, compared to September 30, 2020. 

 

 

Deposit mix improved during the third quarter of 2021. Noninterest-bearing deposits as a percentage of total deposits increased to 25.9% at September 30, 2021 compared to 25.8% at June 30, 2021 and 24.6% at September 30, 2020. Time deposits as a percentage of total deposits decreased to 21.0% at September 30, 2021, compared to 23.4% at June 30, 2021 and 32.2% at September 30, 2020.

 

 

Investar terminated multiple interest rate swap agreements during the third quarter and recognized $1.8 million in swap termination fees, included in noninterest income for the quarter ended September 30, 2021.

 

 

Investar repurchased 109,548 shares of its common stock through its stock repurchase program at an average price of $22.27 per share during the quarter ended September 30, 2021, leaving 205,692 shares authorized for repurchase under the current stock repurchase plan.

 

Loans

 

Total loans were $1.88 billion at September 30, 2021a decrease of $67.2 million, or 3.4%, compared to June 30, 2021, and an increase of $51.0 million, or 2.8%, compared to September 30, 2020. Excluding loans acquired from Cheaha on April 1, 2021 with an aggregate balance of $110.1 million and $120.0 million at September 30, 2021 and June 30, 2021, respectively, total loans decreased $57.2 million, or 3.1%, compared to June 30, 2021, and decreased $59.1 million, or 3.2%, compared to September 30, 2020. 

 

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

 

                           

Linked Quarter Change

   

Year/Year Change

   

Percentage of Total Loans

 
   

9/30/2021

   

6/30/2021

   

9/30/2020

   

$

   

%

   

$

   

%

   

9/30/2021

   

9/30/2020

 

Mortgage loans on real estate

                                                                       

Construction and development

  $ 215,247     $ 213,070     $ 206,751     $ 2,177       1.0 %   $ 8,496       4.1 %     11.4 %     11.3 %

1-4 Family

    362,249       375,690       339,364       (13,441 )     (3.6 )     22,885       6.7       19.3       18.6  

Multifamily

    58,972       60,309       57,734       (1,337 )     (2.2 )     1,238       2.1       3.1       3.2  

Farmland

    21,376       22,263       26,005       (887 )     (4.0 )     (4,629 )     (17.8 )     1.1       1.4  

Commercial real estate

                                                                       

Owner-occupied

    432,898       438,590       379,490       (5,692 )     (1.3 )     53,408       14.1       23.0       20.7  

Nonowner-occupied

    435,575       445,125       404,748       (9,550 )     (2.1 )     30,827       7.6       23.2       22.1  

Commercial and industrial

    335,008       370,203       392,955       (35,195 )     (9.5 )     (57,947 )     (14.7 )     17.8       21.5  

Consumer

    19,333       22,570       22,633       (3,237 )     (14.3 )     (3,300 )     (14.6 )     1.0       1.2  

Total loans

    1,880,658       1,947,820       1,829,680       (67,162 )     (3.4 )%     50,978       2.8 %     100 %     100 %

Loans held for sale

    300                   300             300                        

Total gross loans

  $ 1,880,958     $ 1,947,820     $ 1,829,680     $ (66,862 )     (3.4 )%   $ 51,278       2.8 %                

 

 

In the second quarter of 2020, the Bank began participating as a lender in the Paycheck Protection Program (“PPP”) as established by the CARES Act. The PPP loans are generally 100% guaranteed by the Small Business Administration (“SBA”), have an interest rate of 1%, and are eligible to be forgiven based on certain criteria, with the SBA remitting any applicable forgiveness amount to the lender. At September 30, 2021, the balance of the Bank’s PPP loans, which is included in the commercial and industrial portfolio, was $41.9 million, compared to $73.0 million at June 30, 2021 and $110.3 million at September 30, 2020. Eighty-seven percent of the total number of PPP loans we have originated have principal balances of $150,000 or less. At September 30, 2021, approximately 76% of the total balance of PPP loans originated have been forgiven by the SBA or paid off by the customer. Excluding loans acquired from Cheaha on April 1, 2021 with an aggregate balance of $110.1 million and $120.0 million at September 30, 2021 and June 30, 2021, respectively, and PPP loans with a total balance of $41.9 million ($1.4 million acquired from Cheaha), $73.0 million ($1.7 million acquired from Cheaha), and $110.3 million at September 30, 2021, June 30, 2021, and September 30, 2020, respectively, total loans decreased $26.4 million, or 1.5%, compared to June 30, 2021 and increased $10.7 million, or 0.6%, compared to September 30, 2020.

At September 30, 2021, Investar’s total business lending portfolio, which consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans, was $767.9 million, a decrease of $40.9 million, or 5.1%, compared to the business lending portfolio of $808.8 million at June 30, 2021, and a decrease of $4.5 million, or 0.6%, compared to the business lending portfolio of $772.4 million at September 30, 2020. The decrease in the business lending portfolio compared to June 30, 2021 is primarily driven by the forgiveness of PPP loans and the impairment charge recorded as a result of Hurricane Ida.

Consumer loans totaled $19.3 million at September 30, 2021a decrease of $3.2 million, or 14.3%, compared to $22.6 million at June 30, 2021, and a decrease of $3.3 million, or 14.6%, compared to $22.6 million at September 30, 2020. The decrease in consumer loans compared to June 30, 2021 and September 30, 2020 is mainly attributable to the scheduled paydowns of the indirect auto lending portfolio and is consistent with our business strategy. The decreases were slightly offset by the acquisition of Cheaha on April 1, 2021, which added approximately $6.1 million in consumer loans in the second quarter of 2021.

 

Our loan portfolio includes loans to businesses in certain industries that may be more significantly affected by the pandemic than others. These loans, including loans related to oil and gas, food services, hospitality, and entertainment, represent approximately 5.5% of our total portfolio, or 5.2% excluding PPP loans, at September 30, 2021, compared to 6.4% of our total portfolio, or 5.9% excluding PPP loans, at June 30, 2021 and 6.6% of our total portfolio, or 5.6% excluding PPP loans, at September 30, 2020 as shown in the table below.

 

Industry

 

Percentage of Loan Portfolio September 30, 2021

   

Percentage of Loan Portfolio September 30, 2021 (excluding PPP loans)

   

Percentage of Loan Portfolio June 30, 2021

   

Percentage of Loan Portfolio June 30, 2021 (excluding PPP loans)

   

Percentage of Loan Portfolio September 30, 2020

   

Percentage of Loan Portfolio September 30, 2020 (excluding PPP loans)

 

Oil and gas

    2.6 %     2.4 %     2.7 %     2.5 %     3.5 %     2.7 %

Food services

    1.8       1.6       2.9       2.6       2.3       2.1  

Hospitality

    0.5       0.5       0.4       0.4       0.4       0.4  

Entertainment

    0.6       0.7       0.4       0.4       0.4       0.4  

Total

    5.5 %     5.2 %     6.4 %     5.9 %     6.6 %     5.6 %

 

Credit Quality

 

Nonperforming loans were $32.9 million, or 1.75% of total loans, at September 30, 2021an increase of $12.0 million compared to $20.9 million, or 1.07% of total loans, at June 30, 2021, and an increase of $20.5 million compared to $12.4 million, or 0.68% of total loans, at September 30, 2020. The increase in nonperforming loans compared to June 30, 2021 is mainly attributable to one loan relationship, discussed further below, which added $15.5 million to the balance of nonperforming loans at September 30, 2021. Included in nonperforming loans are acquired loans with a balance of $5.3 million at September 30, 2021, or 16% of nonperforming loans.

 

The allowance for loan losses was $20.6 million, or 62.4% and 1.09% of nonperforming and total loans, respectively, at September 30, 2021, compared to $20.4 million, or 97.8% and 1.05%, respectively, at June 30, 2021, and $19.0 million, or 153.8% and 1.04%, respectively, at September 30, 2020.

 

The provision for loan losses was $21.7 million for the quarter ended September 30, 2021 compared to $0.1 million and $2.5 million for the quarters ended June 30, 2021 and September 30, 2020, respectively. The provision for loan losses for the quarter ended September 30, 2021 includes an impairment charge of $21.6 million related to a loan relationship with related borrowers (collectively, the “Borrower”) consisting of multiple loans that are secured by various types of collateral. As a result of Hurricane Ida, which made landfall in Louisiana as a category 4 hurricane on August 29, 2021, the Borrower’s business operations were disrupted causing a significant reduction in value of some of the collateral supporting the loan relationship, including real estate, inventory, and equipment. The impairment charge of $21.6 million is based on the estimated value of collateral with respect to the loan relationship at September 30, 2021.  

 

Investar has instituted a 90-day loan deferral program for customers who were impacted by Hurricane Ida. At September 30, 2021, Investar had placed approximately $47.7 million, or 2.5% of the total loan portfolio on a 90-day deferral plan. Investar continues to assess the impact the hurricane had on the region and its loan portfolio to determine whether there is a need for additional reserves.

 

Deposits

 

Total deposits at September 30, 2021 were $2.30 billion, an increase of $43.5 million, or 1.9%, compared to $2.26 billion at June 30, 2021, and an increase of $469.2 million, or 25.6%, compared to $1.83 billion at September 30, 2020. Investar acquired approximately $207.0 million in deposits from Cheaha at the time of acquisition on April 1, 2021. The remaining increase is due to organic growth and brokered deposits. 

 

The COVID-19 pandemic has created a significant amount of excess liquidity in the market, and, as a result, we have experienced large increases in both noninterest and interest-bearing demand deposits, and in money market deposit accounts compared to June 30, 2021 and September 30, 2020. These increases were primarily driven by reduced spending by consumer and business customers related to the COVID-19 pandemic, and increases in PPP borrowers’ deposit accounts. We believe these factors may be temporary depending on the future economic effects of the COVID-19 pandemic. In addition, the Bank utilized $125.0 million in brokered deposits in the third quarter of 2021 and $100.1 million in the second quarter of 2021, which are used to satisfy the required borrowings under its interest rate swap agreements, due to more favorable pricing.

 

Our deposit mix continues to improve and reflects our consistent focus on relationship banking and growing our commercial relationships, as well as the effects of the pandemic on consumer and business spending. Noninterest-bearing deposits as a percentage of total deposits has increased while time deposits as a percentage of total deposits has decreased. Management made a strategic decision to either reprice or run-off higher yielding time deposits and other interest-bearing deposit products during 2020 and 2021, which has contributed to our decreasing cost of deposits compared to the quarters ended June 30, 2021 and September 30, 2020. 

 

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

 

                                                           

Percentage of

 
                           

Linked Quarter Change

   

Year/Year Change

   

Total Deposits

 
   

9/30/2021

   

6/30/2021

   

9/30/2020

   

$

   

%

   

$

   

%

   

9/30/2021

   

9/30/2020

 

Noninterest-bearing demand deposits

  $ 597,452     $ 582,109     $ 452,070     $ 15,343       2.6 %   $ 145,382       32.2 %     25.9 %     24.6 %

Interest-bearing demand deposits

    658,743       630,829       473,819       27,914       4.4       184,924       39.0       28.6       25.8  

Brokered deposits

    125,016       100,117             24,899       24.9       125,016             5.4        

Money market deposit accounts

    264,846       243,058       179,133       21,788       9.0       85,713       47.8       11.5       9.8  

Savings accounts

    174,953       174,385       139,153       568       0.3       35,800       25.7       7.6       7.6  

Time deposits

    482,631       529,668       590,274       (47,037 )     (8.9 )     (107,643 )     (18.2 )     21.0       32.2  

Total deposits

  $ 2,303,641     $ 2,260,166     $ 1,834,449     $ 43,475       1.9 %   $ 469,192       25.6 %     100.0 %     100.0 %

 

 

Net Interest Income

 

Net interest income for the third quarter of 2021 totaled $21.5 million, an increase of $0.4 million, or 1.8%, compared to the second quarter of 2021, and an increase of $2.8 million, or 15.2%, compared to the third quarter of 2020. Included in net interest income for the quarters ended September 30, 2021, June 30, 2021 and September 30, 2020 is $0.3 million, $0.5 million, and $0.2 million of interest income accretion from the acquisition of loans. Also included in net interest income for the quarters ended September 30, 2021June 30, 2021 and September 30, 2020 are interest recoveries of $0.2 million,  $25,000, and $15,000, respectively.

 

 

 

Investar’s net interest margin was 3.44% for the quarter ended September 30, 2021, compared to 3.48% for the quarter ended June 30, 2021 and 3.46% for the quarter ended September 30, 2020. The decrease in net interest margin for the quarter ended September 30, 2021 compared to the quarter ended June 30, 2021 was driven by excess liquidity. The average balance of interest-bearing balances with banks for the quarter ended September 30, 2021, as shown on our net interest margin table, increased $81.4 million and $227.5 million compared to the quarters ended June 30, 2021 and September 30, 2020, respectively, and resulted in a 12 and 34 basis point decrease in the net interest margin, respectively. The decrease in net interest margin resulting from excess liquidity for the quarter ended September 30, 2021 was partially offset by an eight basis point decrease in the cost of deposits compared to the quarter ended June 30, 2021. Compared to the quarter ended September 30, 2020, the decrease in the net interest margin resulting from excess liquidity was partially offset by a 54 basis point decrease in the cost of deposits.

 

The yield on interest-earning assets was 3.91% for the quarter ended September 30, 2021, compared to 4.00% for the quarter ended June 30, 2021 and 4.33% for the quarter ended September 30, 2020. The decrease in the yield on interest-earning assets compared to the quarter ended June 30, 2021 was a direct result of excess liquidity. The decrease in the yield on interest-earning assets compared to the quarter ended September 30, 2020 was driven by excess liquidity and a large decrease in the yield earned on investment securities. In response to the pandemic, during March 2020, the Federal Reserve reduced the federal funds rate 150 basis points to 0 to 0.25 percent, which has affected the yields that we earn on our interest-earning assets. In addition, the PPP loans originated have a contractual interest rate of 1% and origination fees based on the loan amount, which impacts the yield on our loan portfolio.

 

Exclusive of PPP loans, which had an average balance of $58.5 million and related interest and fee income of $1.3 million for the quarter ended September 30, 2021, compared to an average balance of $96.0 million and related interest and fee income of $1.2 million for the quarter ended June 30, 2021 and an average balance of $114.7 million and related interest and fee income of $0.8 million for the quarter ended September 30, 2020, adjusted net interest margin was 3.31% for the quarter ended September 30, 2021, compared to an adjusted net interest margin of 3.41% for the quarter ended June 30, 2021 and 3.50% for the quarter ended September 30, 2020. Included in PPP interest and fee income for the quarters ended September 30, 2021June 30, 2021, and September 30, 2020 is $1.0 million, $0.6 million, and $0.1 million, respectively, of accelerated fee income recognized due to the forgiveness or pay-off of PPP loans. Refer to the Reconciliation of Non-GAAP Financial Measures table for a reconciliation of GAAP to non-GAAP metrics.

 

Exclusive of the interest income accretion from the acquisition of loans, interest recoveries, and accelerated fee income recognized due to the forgiveness or pay-off of PPP loans, all discussed above, adjusted net interest margin decreased to 3.21% for the quarter ended September 30, 2021, compared to 3.29% for the quarter ended June 30, 2021, and 3.41% for the quarter ended September 30, 2020. The adjusted yield on interest-earning assets was 3.67% for the quarter ended September 30, 2021 compared to 3.82% and 4.28% for the quarters ended June 30, 2021 and September 30, 2020, respectively. Refer to the Reconciliation of Non-GAAP Financial Measures table for a reconciliation of GAAP to non-GAAP metrics.

 

The cost of deposits decreased eight basis points to 0.43% for the quarter ended September 30, 2021 compared to 0.51% for the quarter ended June 30, 2021 and decreased 54 basis points compared to 0.97% for the quarter ended September 30, 2020. The decrease in the cost of deposits compared to the quarters ended June 30, 2021 and September 30, 2020 reflects the decrease in rates paid for all categories of interest-bearing deposits.

 

The overall costs of funds for the quarter ended September 30, 2021 decreased seven basis points to 0.63% compared to 0.70% for the quarter ended June 30, 2021 and decreased 53 basis points compared to 1.16% for the quarter ended September 30, 2020. The decrease in the cost of funds for the quarter ended September 30, 2021 compared to the quarters ended June 30, 2021 and September 30, 2020 resulted from both lower cost of deposits and lower average balances of short-term borrowings, the costs of which are driven by the Federal Reserve’s federal funds rates.

 

Noninterest Income

 

Noninterest income for the third quarter of 2021 totaled $3.9 million, a decrease of $0.2 million, or 4.1%, compared to the second quarter of 2021 and an increase of $0.5 million, or 15.1%, compared to the third quarter of 2020. The decrease in noninterest income compared to the quarter ended June 30, 2021 was driven by a $1.7 million decrease in the gain on sale of investment securities and the $0.3 million decrease in other operating income, partially offset by the $1.8 million increase in swap termination fees. Swap termination fees were recorded when we voluntarily terminated a number of our interest rate swap agreements at the end of September 2021. The increase in noninterest income compared to the quarter ended September 30, 2020 is mainly attributable to a $1.8 million increase in swap termination fees, partially offset by decreases in the gain on sale of investment securities and other operating income. The decrease in other operating income compared to the quarter ended September 30, 2020 was attributable to a $0.8 million decrease in derivative fee income.

 

Noninterest Expense

 

Noninterest expense for the third quarter of 2021 totaled $16.4 million, a decrease of $1.6 million, or 8.8%, compared to the second quarter of 2021, and an increase of $2.3 million, or 16.6%, compared to the third quarter of 2020. The decrease in noninterest expense for the quarter ended September 30, 2021 compared to the quarter ended June 30, 2021 was driven by a $1.2 million decrease in acquisition expense. The increase in noninterest expense for the quarter ended September 30, 2021 compared to the quarter ended September 30, 2020 is primarily a result of a $1.5 million increase in salaries and employee benefits, as well as $0.4 million increases in both acquisition expense and other operating expenses. The increase in salaries and employee benefits is attributable to the acquisition of Cheaha, which added four branch locations and related staff, as well as an increase in health insurance claims and deferred compensation costs.

 

 

 

Taxes

 

Investar recorded an income tax benefit of $2.6 million for the quarter ended September 30, 2021, which equates to an effective tax rate of 21.0%an increase from the effective tax rate of 20.7% at June 30, 2021 and increase from the effective tax rate of 19.6% for the quarter ended September 30, 2020.

 

Basic and Diluted Earnings Per Common Share

 

Investar reported basic and diluted loss per common share of $0.95 for the quarter ended September 30, 2021, compared to basic and diluted earnings per common share of $0.54 and $0.53 for the quarter ended June 30, 2021, and basic and diluted earnings per common share of $0.41 for the quarter ended September 30, 2020.

 

About Investar Holding Corporation

 

Investar, headquartered in Baton Rouge, Louisiana, provides full banking services, excluding trust services, through its wholly-owned banking subsidiary, Investar Bank, National Association. The Bank currently operates 34 branch locations serving Louisiana, Texas, and Alabama. At September 30, 2021, the Bank had 348 full-time equivalent employees and total assets of $2.7 billion.

 

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,” “tangible book value per common share,” “core noninterest income,” “core earnings before noninterest expense,” “core noninterest expense,” “core (loss) earnings before income tax expense,” “core income tax (benefit) expense,” “core (loss) earnings,” “core efficiency ratio,” “core return on average assets,” “core return on average equity,” “core basic (loss) earnings per share,” and “core (loss) diluted earnings per share.” We also present certain average loan, yield, net interest income and net interest margin data adjusted to show the effects of excluding PPP loans, interest income accretion from the acquisition of loans, and interest recoveries. Management believes these non-GAAP financial measures provide information useful to investors in understanding Investar’s financial results, and Investar believes that its presentation, together with the accompanying reconciliations, provide a more complete understanding of factors and trends affecting Investar’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 Investar 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 and Cautionary Statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect Investar’s current views with respect to, among other things, future events and financial performance. Investar 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. In addition, any of the following matters related to the pandemic may impact our financial results in future periods, and such impacts may be material depending on the length and severity of the pandemic and government and societal responses to it:

 

 

borrowers may default on loans and economic conditions could deteriorate requiring further increases to the allowance for loan losses;

 

 

demand for our loans and other banking services, and related income and fees, may be reduced;

 

 

the value of collateral securing our loans may deteriorate; and

 

 

lower market interest rates will have an adverse impact on our variable rate loans and reduce our income.

 

Any forward-looking statements contained in this press release are based on the historical performance of Investar and its subsidiaries or on Investar’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by Investar that the future plans, estimates or expectations by Investar will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to Investar’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 Investar’s underlying assumptions prove to be incorrect, Investar’s actual results may vary materially from those indicated in these statements. Investar 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:

 

 

the ongoing impacts of the COVID-19 pandemic on economic conditions in general and on the Bank’s markets in particular, and on the Bank’s operations and financial results;

 

 

ongoing disruptions in the oil and gas industry due to fluctuations in the price of oil;

 

 

business and economic conditions generally and in the financial services industry in particular, whether nationally, regionally or in the markets in which we operate;

 

 

increased cyber and payment fraud risk, as cybercriminals attempt to profit from the disruption, given increased online and remote activity;

 

 

our ability to achieve organic loan and deposit growth, and the composition of that growth;

 

 

our ability to identify and enter into agreements to combine with attractive acquisition candidates, finance acquisitions, complete acquisitions after definitive agreements are entered into, and successfully integrate acquired operations;

 

 

changes (or the lack of changes) in interest rates, yield curves and interest rate spread relationships that affect our loan and deposit pricing;

 

 

possible cessation or market replacement of LIBOR and the related effect on our LIBOR-based financial products and contracts, including, but not limited to, hedging products, debt obligations, investments and loans;

 

 

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, Texas and Alabama; 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 in the “Special Note Regarding Forward-Looking Statements” in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Investar’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (the “SEC”).

 

For further information contact:

 

Investar Holding Corporation   

Chris Hufft

Chief Financial Officer

(225) 227-2215

Chris.Hufft@investarbank.com

 

 

 

INVESTAR HOLDING CORPORATION

SUMMARY FINANCIAL INFORMATION

(Amounts in thousands, except share data)

(Unaudited)

 

   

As of and for the three months ended

 
   

9/30/2021

   

6/30/2021

   

9/30/2020

   

Linked Quarter

   

Year/Year

 

EARNINGS DATA

                                       

Total interest income

  $ 24,473     $ 24,347     $ 23,394       0.5 %     4.6 %

Total interest expense

    2,925       3,182       4,688       (8.1 )     (37.6 )

Net interest income

    21,548       21,165       18,706       1.8       15.2  

Provision for loan losses

    21,713       114       2,500       18,946.5       768.5  

Total noninterest income

    3,914       4,082       3,401       (4.1 )     15.1  

Total noninterest expense

    16,381       17,960       14,051       (8.8 )     16.6  

Income before income taxes

    (12,632 )     7,173       5,556       (276.1 )     (327.4 )

Income tax expense

    (2,648 )     1,485       1,089       (278.3 )     (343.2 )

Net income

  $ (9,984 )   $ 5,688     $ 4,467       (275.5 )     (323.5 )
                                         

AVERAGE BALANCE SHEET DATA

                                       

Total assets

  $ 2,686,712     $ 2,650,050     $ 2,320,501       1.4 %     15.8 %

Total interest-earning assets

    2,482,070       2,441,368       2,149,946       1.7       15.4  

Total loans

    1,923,960       1,940,513       1,816,014       (0.9 )     5.9  

Total interest-bearing deposits

    1,691,318       1,677,471       1,390,443       0.8       21.6  

Total interest-bearing liabilities

    1,830,240       1,817,746       1,613,049       0.7       13.5  

Total deposits

    2,272,715       2,236,902       1,836,168       1.6       23.8  

Total stockholders’ equity

    254,616       251,793       239,822       1.1       6.2  
                                         

PER SHARE DATA

                                       

Earnings:

                                       

Basic earnings per common share

  $ (0.95 )   $ 0.54     $ 0.41       (275.9 )%     (331.7 )%

Diluted earnings per common share

    (0.95 )     0.53       0.41       (279.2 )     (331.7 )

Core Earnings(1):

                                       

Core basic (loss) earnings per common share(1)

    (1.06 )     0.53       0.35       (300.0 )     (402.9 )

Core diluted (loss) earnings per common share(1)

    (1.06 )     0.53       0.35       (300.5 )     (403.6 )

Book value per common share

    22.85       24.08       22.32       (5.1 )     2.4  

Tangible book value per common share(1)

    18.57       19.85       19.27       (6.4 )     (3.6 )

Common shares outstanding

    10,343,416       10,413,390       10,629,586       (0.7 )     (2.7 )

Weighted average common shares outstanding - basic

    10,398,787       10,414,875       10,759,791       (0.2 )     (3.4 )

Weighted average common shares outstanding - diluted

    10,398,787       10,541,907       10,761,617       (1.4 )     (3.4 )
                                         

PERFORMANCE RATIOS

                                       

Return on average assets

    (1.47 )%     0.86 %     0.77 %     (270.9 )%     (290.9 )%

Core return on average assets(1)

    (1.63 )     0.84       0.65       (294.0 )     (350.8 )

Return on average equity

    (15.56 )     9.06       7.41       (271.7 )     (310.0 )

Core return on average equity(1)

    (17.20 )     8.85       6.29       (294.4 )     (373.4 )

Net interest margin

    3.44       3.48       3.46       (1.1 )     (0.6 )

Net interest income to average assets

    3.18       3.20       3.21       (0.6 )     (0.9 )

Noninterest expense to average assets

    2.42       2.72       2.41       (11.0 )     0.4  

Efficiency ratio(2)

    64.33       71.14       63.56       (9.6 )     1.2  

Core efficiency ratio(1)

    67.17       69.62       65.97       (3.5 )     1.8  

Dividend payout ratio

    (8.42 )     14.81       15.85       (156.9 )     (153.1 )

Net charge-offs to average loans

    1.12             0.01             11,100.0  

 

(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

 
   

9/30/2021

   

6/30/2021

   

9/30/2020

   

Linked Quarter

   

Year/Year

 

ASSET QUALITY RATIOS

                                       

Nonperforming assets to total assets

    1.25 %     0.84 %     0.54 %     48.8 %     131.5 %

Nonperforming loans to total loans

    1.75       1.07       0.68       63.6       157.4  

Allowance for loan losses to total loans

    1.09       1.05       1.04       3.8       4.8  

Allowance for loan losses to nonperforming loans

    62.44       97.83       153.80       (36.2 )     (59.4 )
                                         

CAPITAL RATIOS

                                       

Investar Holding Corporation:

                                       

Total equity to total assets

    8.77 %     9.38 %     10.21 %     (6.5 )%     (14.1 )%

Tangible equity to tangible assets(1)

    7.24       7.86       8.94       (7.9 )     (19.0 )

Tier 1 leverage ratio

    7.60       8.19       9.29       (7.2 )     (18.2 )

Common equity tier 1 capital ratio(2)

    9.29       9.96       10.95       (6.7 )     (15.2 )

Tier 1 capital ratio(2)

    9.75       10.43       11.30       (6.5 )     (13.7 )

Total capital ratio(2)

    12.87       13.55       14.62       (5.0 )     (12.0 )

Investar Bank:

                                       

Tier 1 leverage ratio

    8.99       9.49       10.23       (5.3 )     (12.1 )

Common equity tier 1 capital ratio(2)

    11.55       12.10       12.46       (4.5 )     (7.3 )

Tier 1 capital ratio(2)

    11.55       12.10       12.46       (4.5 )     (7.3 )

Total capital ratio(2)

    12.57       13.11       13.50       (4.1 )     (6.9 )

 

(1) Non-GAAP financial measure. See reconciliation.

(2) Estimated for September 30, 2021.

 

 

 

INVESTAR HOLDING CORPORATION

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)

(Unaudited)

 

   

September 30, 2021

   

June 30, 2021

   

September 30, 2020

 

ASSETS

                       

Cash and due from banks

  $ 45,404     $ 36,775     $ 32,856  

Interest-bearing balances due from other banks

    304,587       229,498       17,697  

Federal funds sold

    500       500        

Cash and cash equivalents

    350,491       266,773       50,553  
                         

Available for sale securities at fair value (amortized cost of $274,312, $267,706, and $275,288, respectively)

    274,387       269,360       278,906  

Held to maturity securities at amortized cost (estimated fair value of $11,936, $12,007, and $13,737, respectively)

    11,407       11,812       13,542  

Loans held for sale

    300              

Loans, net of allowance for loan losses of $20,566, $20,445, and $19,044, respectively

    1,860,091       1,927,375       1,810,636  

Other equity securities

    16,783       16,725       20,927  

Bank premises and equipment, net of accumulated depreciation of $18,579, $17,566, and $14,971, respectively

    61,619       62,588       57,074  

Other real estate owned, net

    635       1,490       69  

Accrued interest receivable

    11,732       12,205       13,057  

Deferred tax asset

    1,493       508       2,160  

Goodwill and other intangible assets, net

    44,283       43,973       32,471  

Bank-owned life insurance

    50,767       50,462       38,672  

Other assets

    12,060       9,636       5,178  

Total assets

  $ 2,696,048     $ 2,672,907     $ 2,323,245  
                         

LIABILITIES

                       

Deposits

                       

Noninterest-bearing

  $ 597,452     $ 582,109     $ 452,070  

Interest-bearing

    1,706,189       1,678,057       1,382,379  

Total deposits

    2,303,641       2,260,166       1,834,449  

Advances from Federal Home Loan Bank

    78,500       82,500       178,500  

Repurchase agreements

    6,580       6,713       5,923  

Subordinated debt

    42,966       42,943       42,874  

Junior subordinated debt

    8,352       8,320       5,936  

Accrued taxes and other liabilities

    19,685       21,550       18,296  

Total liabilities

    2,459,724       2,422,192       2,085,978  
                         

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; 10,343,416, 10,413,390, and 10,629,586 shares issued and outstanding, respectively

    10,344       10,413       10,630  

Surplus

    154,527       155,847       159,410  

Retained earnings

    70,054       80,867       67,536  

Accumulated other comprehensive income (loss)

    1,399       3,588       (309 )

Total stockholders’ equity

    236,324       250,715       237,267  

Total liabilities and stockholders’ equity

  $ 2,696,048     $ 2,672,907     $ 2,323,245  

 

 

 

INVESTAR HOLDING CORPORATION

CONSOLIDATED STATEMENTS OF (LOSS) INCOME

(Amounts in thousands, except share data)

(Unaudited)

 

   

For the three months ended

 
   

September 30, 2021

   

June 30, 2021

   

September 30, 2020

 

INTEREST INCOME

                       

Interest and fees on loans

  $ 23,220     $ 23,135     $ 21,866  

Interest on investment securities

    1,021       1,009       1,356  

Other interest income

    232       203       172  

Total interest income

    24,473       24,347       23,394  
                         

INTEREST EXPENSE

                       

Interest on deposits

    1,854       2,114       3,404  

Interest on borrowings

    1,071       1,068       1,284  

Total interest expense

    2,925       3,182       4,688  

Net interest income

    21,548       21,165       18,706  
                         

Provision for loan losses

    21,713       114       2,500  

Net interest (loss) income after provision for loan losses

    (165 )     21,051       16,206  
                         

NONINTEREST INCOME

                       

Service charges on deposit accounts

    650       607       441  

Gain on sale of investment securities, net

          1,721       939  

Loss on sale of fixed assets, net

                (5 )

Loss on sale of other real estate owned, net

          (5 )      

Swap termination fees

    1,835              

Gain on sale of loans

    73       46        

Servicing fees and fee income on serviced loans

    38       65       85  

Interchange fees

    504       501       387  

Income from bank owned life insurance

    304       311       234  

Change in the fair value of equity securities

    48       91       (31 )

Other operating income

    462       745       1,351  

Total noninterest income

    3,914       4,082       3,401  

Income before noninterest expense

    3,749       25,133       19,607  
                         

NONINTEREST EXPENSE

                       

Depreciation and amortization

    1,264       1,278       1,203  

Salaries and employee benefits

    9,770       9,916       8,228  

Occupancy

    662       676       604  

Data processing

    715       973       816  

Marketing

    57       71       88  

Professional fees

    382       378       343  

Acquisition expenses

    446       1,641       52  

Other operating expenses

    3,085       3,027       2,717  

Total noninterest expense

    16,381       17,960       14,051  

(Loss) income before income tax expense

    (12,632 )     7,173       5,556  

Income tax (benefit) expense

    (2,648 )     1,485       1,089  

Net (loss) income

  $ (9,984 )   $ 5,688     $ 4,467  
                         

EARNINGS PER SHARE

                       

Basic (loss) earnings per common share

  $ (0.95 )   $ 0.54     $ 0.41  

Diluted (loss) earnings per common share

  $ (0.95 )   $ 0.53     $ 0.41  

Cash dividends declared per common share

  $ 0.08     $ 0.08     $ 0.07  

 

 

 

INVESTAR HOLDING CORPORATION

CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS

(Amounts in thousands)

(Unaudited)

 

   

For the three months ended

 
   

September 30, 2021

   

June 30, 2021

   

September 30, 2020

 
           

Interest

                   

Interest

                   

Interest

         
   

Average

   

Income/

           

Average

   

Income/

           

Average

   

Income/

         
   

Balance

   

Expense

   

Yield/ Rate

   

Balance

   

Expense

   

Yield/ Rate

   

Balance

   

Expense

   

Yield/ Rate

 

Assets

                                                                       

Interest-earning assets:

                                                                       

Loans

  $ 1,923,960     $ 23,220       4.79 %   $ 1,940,513     $ 23,135       4.78 %   $ 1,816,014     $ 21,866       4.79 %

Securities:

                                                                       

Taxable

    262,751       892       1.35       283,318       860       1.22       262,088       1,199       1.82  

Tax-exempt

    18,499       129       2.76       22,061       149       2.71       22,504       157       2.77  

Interest-bearing balances with banks

    276,860       232       0.33       195,476       203       0.42       49,340       172       1.39  

Total interest-earning assets

    2,482,070       24,473       3.91       2,441,368       24,347       4.00       2,149,946       23,394       4.33  

Cash and due from banks

    38,511                       40,639                       28,225                  

Intangible assets

    44,040                       44,727                       32,563                  

Other assets

    142,608                       143,774                       126,581                  

Allowance for loan losses

    (20,517 )                     (20,458 )                     (16,814 )                

Total assets

  $ 2,686,712                     $ 2,650,050                     $ 2,320,501                  
                                                                         

Liabilities and stockholders’ equity

                                                                       

Interest-bearing liabilities:

                                                                       

Deposits:

                                                                       

Interest-bearing demand deposits

  $ 901,146     $ 599       0.26 %   $ 854,504     $ 701       0.33 %   $ 627,715     $ 755       0.48 %

Brokered deposits

    112,601       264       0.93       97,245       240       0.99                    

Savings deposits

    173,971       67       0.15       173,553       71       0.16       133,701       91       0.27  

Time deposits

    503,600       924       0.73       552,169       1,102       0.80       629,027       2,558       1.62  

Total interest-bearing deposits

    1,691,318       1,854       0.43       1,677,471       2,114       0.51       1,390,443       3,404       0.97  

Short-term borrowings

    9,136       5       0.21       10,030       5       0.21       95,316       248       1.03  

Long-term debt

    129,786       1,066       3.26       130,245       1,063       3.27       127,290       1,036       3.24  

Total interest-bearing liabilities

    1,830,240       2,925       0.63       1,817,746       3,182       0.70       1,613,049       4,688       1.16  

Noninterest-bearing deposits

    581,397                       559,431                       445,725                  

Other liabilities

    20,459                       21,080                       21,905                  

Stockholders’ equity

    254,616                       251,793                       239,822                  

Total liability and stockholders’ equity

  $ 2,686,712                     $ 2,650,050                     $ 2,320,501                  

Net interest income/net interest margin

          $ 21,548       3.44 %           $ 21,165       3.48 %           $ 18,706       3.46 %

 

 

 

INVESTAR HOLDING CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

INTEREST EARNED AND YIELD ANALYSIS ADJUSTED FOR PPP LOANS
(Amounts in thousands)
(Unaudited)

 

   

For the three months ended

 
   

September 30, 2021

   

June 30, 2021

   

September 30, 2020

 
           

Interest

                   

Interest

                   

Interest

         
   

Average

   

Income/

           

Average

   

Income/

           

Average

   

Income/

         
   

Balance

   

Expense

   

Yield/ Rate

   

Balance

   

Expense

   

Yield/ Rate

   

Balance

   

Expense

   

Yield/ Rate

 

Interest-earning assets:

                                                                       

Loans

  $ 1,923,960     $ 23,220       4.79 %   $ 1,940,513     $ 23,135       4.78 %   $ 1,816,014     $ 21,866       4.79 %

Adjustments:

                                                                       

PPP loans

    58,481       1,309       8.88 %     96,045       1,237       5.17 %     114,679       818       2.84 %

Adjusted loans

    1,865,479       21,911       4.66 %     1,844,468       21,898       4.76 %     1,701,335       21,048       4.92 %

Securities:

                                                                       

Taxable

    262,751       892       1.35       283,318       860       1.22       262,088       1,199       1.82  

Tax-exempt

    18,499       129       2.76       22,061       149       2.71       22,504       157       2.77  

Interest-bearing balances with banks

    276,860       232       0.33       195,476       203       0.42       49,340       172       1.39  

Adjusted interest-earning assets

    2,423,589       23,164       3.79       2,345,323       23,110       3.95       2,035,267       22,576       4.41  
                                                                         

Total interest-bearing liabilities

    1,830,240       2,925       0.63       1,817,746       3,182       0.70       1,613,049       4,688       1.16  
                                                                         

Adjusted net interest income/adjusted net interest margin

          $ 20,239       3.31 %           $ 19,928       3.41 %           $ 17,888       3.50 %

 

 

 

INVESTAR HOLDING CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

INTEREST EARNED AND YIELD ANALYSIS ADJUSTED FOR INTEREST ACCRETION, RECOVERIES AND ACCELERATED PPP INCOME
(Amounts in thousands)
(Unaudited)

 

   

For the three months ended

 
   

September 30, 2021

   

June 30, 2021

   

September 30, 2020

 
           

Interest

                   

Interest

                   

Interest

         
   

Average

   

Income/

           

Average

   

Income/

           

Average

   

Income/

         
   

Balance

   

Expense

   

Yield/ Rate

   

Balance

   

Expense

   

Yield/ Rate

   

Balance

   

Expense

   

Yield/ Rate

 

Interest-earning assets:

                                                                       

Loans

  $ 1,923,960     $ 23,220       4.79 %   $ 1,940,513     $ 23,135       4.78 %   $ 1,816,014     $ 21,866       4.79 %

Adjustments:

                                                                       

Accelerated fee income for forgiven or paid off PPP loans

            1,001                       556                       58          

Interest recoveries

            187                       25                       15          

Accretion

            298                       532                       200          

Adjusted Loans

    1,923,960       21,734       4.48       1,940,513       22,022       4.55       1,816,014       21,593       4.73  

Securities:

                                                                       

Taxable

    262,751       892       1.35       283,318       860       1.22       262,088       1,199       1.82  

Tax-exempt

    18,499       129       2.76       22,061       149       2.71       22,504       157       2.77  

Interest-bearing balances with banks

    276,860       232       0.33       195,476       203       0.42       49,340       172       1.39  

Adjusted interest-earning assets

    2,482,070       22,987       3.67       2,441,368       23,234       3.82       2,149,946       23,121       4.28  
                                                                         

Total interest-bearing liabilities

    1,830,240       2,925       0.63       1,817,746       3,182       0.70       1,613,049       4,688       1.16  
                                                                         

Adjusted net interest income/adjusted net interest margin

          $ 20,062       3.21 %           $ 20,052       3.29 %           $ 18,433       3.41 %
                                                                         

 

 

 

INVESTAR HOLDING CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except share data)

(Unaudited)

 

   

September 30, 2021

   

June 30, 2021

   

September 30, 2020

 

Tangible common equity

                       

Total stockholders’ equity

  $ 236,324     $ 250,715     $ 237,267  

Adjustments:

                       

Goodwill

    40,088       39,527       28,144  

Core deposit intangible

    4,095       4,346       4,227  

Trademark intangible

    100       100       100  

Tangible common equity

  $ 192,041     $ 206,742     $ 204,796  

Tangible assets

                       

Total assets

  $ 2,696,048     $ 2,672,907     $ 2,323,245  

Adjustments:

                       

Goodwill

    40,088       39,527       28,144  

Core deposit intangible

    4,095       4,346       4,227  

Trademark intangible

    100       100       100  

Tangible assets

  $ 2,651,765     $ 2,628,934     $ 2,290,774  
                         

Common shares outstanding

    10,343,416       10,413,390       10,629,586  

Tangible equity to tangible assets

    7.24 %     7.86 %     8.94 %

Book value per common share

  $ 22.85     $ 24.08     $ 22.32  

Tangible book value per common share

    18.57       19.85       19.27  

 

 

 

INVESTAR HOLDING CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except share data)

(Unaudited)

 

     

Three months ended

 
     

9/30/2021

   

6/30/2021

   

9/30/2020

 

Net interest income

(a)

  $ 21,548     $ 21,165     $ 18,706  

Provision for loan losses

      21,713       114       2,500  

Net interest (loss) income after provision for loan losses

      (165 )     21,051       16,206  
                           

Noninterest income

(b)

    3,914       4,082       3,401  

Gain on sale of investment securities, net

            (1,721 )     (939 )

Loss on sale of other real estate owned, net

            5        

Loss on sale of fixed assets, net

                  5  

Swap termination fees

      (1,835 )            

Change in the fair value of equity securities

      (48 )     (91 )     31  

Core noninterest income

(d)

    2,031       2,275       2,498  
                           

Core earnings before noninterest expense

      1,866       23,326       18,704  
                           

Total noninterest expense

(c)

    16,381       17,960       14,051  

Acquisition expense

      (446 )     (1,641 )     (52 )

Severance

      (98 )           (10 )

Core noninterest expense

(f)

    15,837       16,319       13,989  
                           

Core (loss) earnings before income tax expense

      (13,971 )     7,007       4,715  

Core income tax (benefit) expense(1)

      (2,934 )     1,450       924  

Core (loss) earnings

    $ (11,037 )   $ 5,557     $ 3,791  
                           

Core basic (loss) earnings per common share

      (1.06 )     0.53       0.35  
                           

Diluted (loss) earnings per common share (GAAP)

    $ (0.95 )   $ 0.53     $ 0.41  

Gain on sale of investment securities, net

            (0.12 )     (0.07 )

Loss on sale of other real estate owned, net

                   

Loss on sale of fixed assets, net

                   

Swap termination fees

      (0.14 )            

Change in the fair value of equity securities

      (0.01 )     (0.01 )      

Acquisition expense

      0.03