BATON ROUGE, La., April 25, 2018 (GLOBE NEWSWIRE) -- Investar Holding Corporation (NASDAQ:ISTR) (the “Company”), the holding company for Investar Bank (the “Bank”), today announced financial results for the quarter ended March 31, 2018. The Company reported net income of $2.4 million, or $0.25 per diluted common share, for the first quarter of 2018, compared to $2.3 million, or $0.25 per diluted common share, for the quarter ended December 31, 2017, and $1.9 million, or $0.26 per diluted common share, for the quarter ended March 31, 2017. The first quarter of 2018 includes acquisition expense of $1.1 million ($0.09 per share after-tax impact) and a $0.6 million ($0.07 per share impact) charge to income tax expense as a result of the Tax Cuts and Jobs Act. The fourth quarter of 2017 includes acquisition expense of $0.8 million ($0.06 per share after-tax impact) and a $0.3 million ($0.03 per share impact) charge to income tax expense as a result of the Tax Cuts and Jobs Act.

On a non-GAAP basis, core earnings per diluted common share in the first quarter of 2018 were $0.40 compared to $0.34 for the fourth quarter of 2017 (refer to the Reconciliation of Non-GAAP Financial Measures table for a reconciliation of GAAP to non-GAAP metrics).

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

“I am pleased to announce another successful quarter for Investar. Following the acquisition of BOJ Bancshares, Inc. and its wholly-owned subsidiary, The Highlands Bank, on December 1, 2017, our operating teams successfully completed the integration of The Highlands Bank in February 2018, while continuing to provide outstanding customer service. This is the first quarter of operations following the BOJ acquisition and, despite the acquisition-related costs recognized, our financial results reflect the positive effect of the acquisition on our balance sheet and income statement. We look forward to realizing additional benefits from the acquisition going into the next quarter.

As we look to 2018, we believe our company is solidly positioned to grow the franchise and increase shareholder value. We continue to focus on quality loans and deposits while controlling noninterest expense and maintaining our focus on improving our return on assets and efficiency ratios.”

First Quarter Highlights

  • Total revenues, or interest and noninterest income, for the quarter ended March 31, 2018 totaled $18.2 million, an increase of $1.3 million, or 7.8%, compared to December 31, 2017, and an increase of $6.3 million, or 52.4%, compared to March 31, 2017.

  • Total loans increased $14.2 million, or 1.1%, to $1.27 billion at March 31, 2018, compared to $1.26 billion at December 31, 2017, and increased $370.8 million, or 41.1%, compared to $902.1 million at March 31, 2017.

  • Noninterest-bearing deposits increased $5.3 million, or 2.4%, to $221.9 million at March 31, 2018, compared to $216.6 million at December 31, 2017, and increased $109.4 million, or 97.2%, compared to $112.5 million at March 31, 2017.

  • Net interest margin increased fifteen basis points to 3.70% for the quarter ended March 31, 2018, compared to 3.55% for the quarter ended December 31, 2017, and increased forty-three basis points from 3.27% for the quarter ended March 31, 2017.

  • Cost of deposits decreased one basis point to 0.91% for the quarter ended March 31, 2018, compared to 0.92% for the quarter ended December 31, 2017, and decreased six basis points compared to 0.97% for the quarter ended March 31, 2017.

  • The Company completed the conversion of branch and operating systems associated with the BOJ Bancshares, Inc. acquisition during the quarter.

  • The Company repurchased 27,933 shares of its common stock through its stock repurchase program at an average price of $24.11 during the quarter ended March 31, 2018.

Loans

Total loans were $1.3 billion at March 31, 2018, an increase of $14.2 million, or 1.1%, compared to December 31, 2017, and an increase of $370.8 million, or 41.1%, compared to March 31, 2017.

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

             
        Linked Quarter
Change
 Year/Year Change Percentage of Total
Loans
  3/31/2018 12/31/2017 3/31/2017 $ % $ % 3/31/2018 3/31/2017
Mortgage loans on real estate                  
Construction and development $162,337  $157,667  $95,541  $4,670  3.0% $66,796  69.9% 12.8% 10.6%
1-4 Family 277,978  276,922  172,148  1,056  0.4  105,830  61.5  21.8  19.1 
Multifamily 54,504  51,283  47,776  3,221  6.3  6,728  14.1  4.3  5.3 
Farmland 20,725  23,838  7,994  (3,113) (13.1) 12,731  159.3  1.6  0.9 
Commercial real estate                  
Owner-occupied 274,216  272,433  181,590  1,783  0.7  92,626  51.0  21.5  20.1 
Nonowner-occupied 279,939  264,931  210,874  15,008  5.7  69,065  32.8  22.0  23.4 
Commercial and industrial 135,965  135,392  90,352  573  0.4  45,613  50.5  10.7  10.0 
Consumer 67,286  76,313  95,873  (9,027) (11.8) (28,587) (29.8) 5.3  10.6 
Total loans 1,272,950  1,258,779  902,148  14,171  1.1% 370,802  41.1% 100% 100%
                            

Construction and development loans were $162.3 million at March 31, 2018, an increase of $4.7 million, or 3.0%, compared to $157.7 million at December 31, 2017, and an increase of $66.8 million, or 69.9%, compared to $95.5 million at March 31, 2017. The increase in the construction and development portfolio at March 31, 2018 is primarily a result of organic growth in the Company’s Baton Rouge market where our lenders have great experience and long-standing relationships with local developers.

At March 31, 2018, the Company’s total business lending portfolio, which consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans, was $410.2 million, an increase of $2.4 million, or 0.6%, compared to the business lending portfolio of $407.8 million at December 31, 2017, and an increase of $138.2 million, or 50.8%, compared to the business lending portfolio of $271.9 million at March 31, 2017. The Company continues to focus on relationship banking and growing its commercial loan portfolio.

Consumer loans, including indirect auto loans of $48.8 million, totaled $67.3 million at March 31, 2018, a decrease of $9.0 million, or 11.8%, compared to $76.3 million, including indirect auto loans of $55.9 million, at December 31, 2017, and a decrease of $28.6 million, or 29.8%, compared to $95.9 million, including indirect auto loans of $80.9 million, at March 31, 2017. The decrease in consumer loans is mainly attributable to the scheduled paydowns of this portfolio and is consistent with our business strategy.

Credit Quality

Nonperforming loans were $5.5 million, or 0.44% of total loans, at March 31, 2018, an increase of $1.8 million compared to $3.7 million, or 0.29% of total loans, at December 31, 2017, and an increase of $3.4 million compared to $2.1 million, or 0.24% of total loans, at March 31, 2017. Included in nonperforming loans are loans acquired in 2017 with a balance of $3.0 million at March 31, 2018, which is the primary reason for the increase in nonperforming loans.

The allowance for loan losses was $8.1 million, or 146.78% and 0.64% of nonperforming and total loans, respectively, at March 31, 2018, compared to $7.9 million, or 214.43% and 0.63%, respectively, at December 31, 2017, and $7.2 million, or 337.95% and 0.80%, respectively, at March 31, 2017. As a result of the acquisitions of BOJ Bancshares, Inc. (“BOJ”) and Citizens Bancshares, Inc. (“Citizens”), the Company is holding acquired loans that are carried net of a fair value adjustment for credit and interest rate marks and are only included in the allowance calculation to the extent that the reserve requirement exceeds the remaining fair value adjustment.

The provision for loan losses was $0.6 million for the quarter ended March 31, 2018 and $0.4 million for the quarters ended December 31, 2017 and March 31, 2017.

Deposits

Total deposits at March 31, 2018 were $1.2 billion, an increase of $1.4 million, or 0.1%, compared to December 31, 2017, and an increase of $358.1 million, or 41.2%, compared to March 31, 2017. The Company acquired approximately $125.8 million and $212.2 million in deposits from the BOJ and Citizens acquisitions, respectively at the time of acquisition.

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

             
        Linked Quarter
Change
 Year/Year Change Percentage of
Total Deposits
  3/31/2018 12/31/2017 3/31/2017 $ % $ % 3/31/2018 3/31/2017
Noninterest-bearing demand deposits $221,855  $216,599  $112,514  $5,256  2.4% $109,341  97.2% 18.1% 13.0%
NOW accounts 228,269  208,683  168,860  19,586  9.4  59,409  35.2  18.6  19.4 
Money market deposit accounts 145,627  146,140  124,604  (513) (0.4) 21,023  16.9  11.9  14.3 
Savings accounts 124,589  117,372  52,682  7,217  6.1  71,907  136.5  10.1  6.1 
Time deposits 506,332  536,443  409,894  (30,111) (5.6) 96,438  23.5  41.3  47.2 
Total deposits $1,226,672  $1,225,237  $868,554  $1,435  0.1% $358,118  41.2% 100.0% 100.0%
                                 

Net Interest Income

Net interest income for the first quarter of 2018 totaled $13.9 million, an increase of $1.0 million, or 8.1%, compared to the fourth quarter of 2017, and an increase of $5.0 million, or 56.4%, compared to the first quarter of 2017. Included in net interest income for the quarters ended March 31, 2018 and December 31, 2017 is $0.7 million and $0.2 million, respectively, of interest income accretion from the acquisition of loans. The increase in net interest income was primarily driven by growth in loan and securities balances partially offset by an increase in interest expense as we funded the increase in earning assets with increased deposits and borrowings. Net interest income for the first quarter of 2018 increased $4.4 million and $1.7 million due to increases in the volume and yield, respectively, of interest-earning assets, offset slightly by decreases of $0.8 million and $0.3 million due to the increases in the volume and rate, respectively, of interest-bearing liabilities compared to the first quarter of 2017.

The Company’s net interest margin was 3.70% for the quarter ended March 31, 2018 compared to 3.55% for the quarter ended December 31, 2017 and 3.27% for the quarter ended March 31, 2017. The yield on interest-earning assets was 4.59% for the quarter ended March 31, 2018 compared to 4.42% for the quarter ended December 31, 2017 and 4.10% for the quarter ended March 31, 2017. The increase in net interest margin at March 31, 2018 compared to both December 31, 2017 and March 31, 2017 was driven by an increase in interest-earning assets and the yields earned on those assets, and an increase in the volume of lower cost deposits, partially resulting from the acquisitions of both BOJ and Citizens.

Exclusive of the interest income accretion from the acquisition of loans, discussed above, as well as a $40,000 interest recovery in the quarter ended December 31, 2017, net interest margin was 3.52% for the quarter ended March 31, 2018 compared to 3.48% for the quarter ended December 31, 2017 and 3.25% for the quarter ended March 31, 2017. The yield on interest-earning assets was 4.41% at March 31, 2018 compared to 4.35% and 4.07% for the quarters ended December 31, 2017 and March 31, 2017, respectively.

The cost of deposits decreased one basis point to 0.91% for the quarter ended March 31, 2018 compared to 0.92% for the quarter ended December 31, 2017 and decreased six basis points compared to 0.97% at March 31, 2017. The decrease in the cost of deposits when compared to the quarter ended March 31, 2017 is a result of a decrease in the cost of interest-bearing demand and savings deposits. The overall costs of funds for the quarter ended March 31, 2018 increased three basis points to 1.10% compared to 1.07% for the quarter ended December 31, 2017 and increased twelve basis points compared to 0.98% for the quarter ended March 31, 2017. The increase in the cost of funds at March 31, 2018 compared to December 31, 2017 and March 31, 2017 is mainly a result of an increase in the cost of borrowed funds used to finance loan and investment activity. The increase in the cost of funds at March 31, 2018 compared to March 31, 2017 is mainly attributable to the increase in long term borrowings resulting from the Company’s issuance and sale, on March 24, 2017, of $18.6 million in aggregate principal amount of its 6.00% Fixed-to-Floating Rate Subordinated Notes due in 2027.

Noninterest Income

Noninterest income for the first quarter of 2018 totaled $1.1 million, an increase of $0.1 million, or 11.4%, compared to the fourth quarter of 2017, and an increase of $0.2 million, or 21.1%, compared to the first quarter of 2017. The increase in noninterest income compared to the quarter ended December 31, 2017 is due to increases in service charges on deposit accounts and gain on sale of fixed assets. The increase in noninterest income compared to the quarter ended March 31, 2017 is mainly attributable to increased service charges on deposit accounts.

Noninterest Expense

Noninterest expense for the first quarter of 2018 totaled $10.6 million, an increase of $0.9 million, or 9.3%, compared to the fourth quarter of 2017, and an increase of $3.9 million, or 58.0%, compared to the first quarter of 2017. The increase in noninterest expense compared to the quarters ended December 31, 2017 and March 31, 2017 is mainly attributable to the increases in both salaries and employee benefits and acquisition expense. The increase in salaries and employee benefits is mainly a result of the increase in employees following the BOJ and Citizens acquisitions, as well as the addition of four commercial lenders in the Baton Rouge, New Orleans and Lafayette markets, a Community Development Officer and Treasury Management Sales Officer in the New Orleans market, and a C&I Banking President, all occurring since the quarter ended March 31, 2017. The increase in acquisition expense is a result of the BOJ acquisition that was completed on December 1, 2017 and the operational conversion which was completed in the first quarter of 2018.

Taxes

The Company recorded income tax expense of $1.3 million for the quarter ended March 31, 2018, which equates to an effective tax rate of 35.8%, a decrease from the effective tax rate of 39.5% for the quarter ended December 31, 2017 and an increase from the effective tax rate of 31.2% for the quarter ended March 31, 2017. The income tax expense for the quarters ended March 31, 2018 and December 31, 2017 include charges of $0.6 million and $0.3 million, respectively, as a result of the revaluation of the Company’s deferred tax assets and liabilities required following the enactment of the Tax Cuts and Jobs Act. The Company’s final analysis and write-down will be based on a number of factors, including completion of the Company’s 2017 consolidated tax return. Management expects the Company’s effective tax rate to approximate 20% for the remainder of 2018, mainly as a result of the Tax Cuts and Jobs Act.

Basic Earnings Per Share and Diluted Earnings Per Common Share

The Company reported both basic and diluted earnings per common share of $0.25 for the quarters ended March 31, 2018 and December 31, 2017, a decrease of $0.01 compared to basic and diluted earnings per common share of $0.26 for the quarter ended March 31, 2017. The decrease in both basic and diluted earnings per share is attributable to the Company’s issuance of approximately 1.6 million common shares as part of a public offering on March 22, 2017, the issuance of approximately 0.8 million common shares as consideration in the acquisition of BOJ, the $1.1 million and $0.8 million in acquisition expense for the quarters ended March 31, 2018 and December 31, 2017, respectively, and the $0.6 million and $0.3 million charges to income tax expense as a result of the Tax Cuts and Jobs Act recognized during the quarters ended March 31, 2018 and December 31, 2017, respectively.

About Investar Holding Corporation

Investar Holding Corporation, headquartered in Baton Rouge, Louisiana, provides full banking services, excluding trust services, through its wholly-owned banking subsidiary, Investar Bank, a state chartered bank. The Company’s primary market is South Louisiana and it currently operates 20 full service banking offices located throughout its market. At March 31, 2018, the Company had 251 full-time equivalent employees.

Non-GAAP Financial Measures

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

Forward-Looking Statements

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

  • business and economic conditions generally and in the financial services industry in particular, whether nationally, regionally or in the markets in which we operate;
  • our ability to achieve organic loan and deposit growth, and the composition of that growth;
  • changes (or the lack of changes) in interest rates, yield curves and interest rate spread relationships that affect our loan and deposit pricing;
  • the extent of continuing client demand for the high level of personalized service that is a key element of our banking approach as well as our ability to execute our strategy generally;
  • our dependence on our management team, and our ability to attract and retain qualified personnel;
  • changes in the quality or composition of our loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers;
  • inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates;
  • the concentration of our business within our geographic areas of operation in Louisiana; and
  • concentration of credit exposure.

In addition, forward-looking statement and estimates regarding the effects of the Tax Cuts and Jobs Act are based on our current interpretation of this legislation and may change as a result of additional implementation guidance, changes in assumptions, potential future refinements of or revisions to calculations and completion of the Company’s 2017 consolidated tax return.

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 the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission.

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
  3/31/2018 12/31/2017 3/31/2017 Linked Quarter Year/Year
EARNINGS DATA          
Total interest income $17,178  $15,967  $11,093  7.6% 54.9%
Total interest expense 3,320  3,150  2,233  5.4  48.7 
Net interest income 13,858  12,817  8,860  8.1  56.4 
Provision for loan losses 625  395  350  58.2  78.6 
Total noninterest income 1,072  962  885  11.4  21.1 
Total noninterest expense 10,562  9,608  6,684  9.9  58.0 
Income before income taxes 3,743  3,776  2,711  (0.9) 38.1 
Income tax expense 1,341  1,492  847  (10.1) 58.3 
Net income $2,402  $2,284  $1,864  5.2  28.9 
           
AVERAGE BALANCE SHEET DATA          
Total assets $1,629,277  $1,534,917  $1,157,654  6.1% 40.7%
Total interest-earning assets 1,518,425  1,434,164  1,097,816  5.9  38.3 
Total loans 1,261,047  1,169,686  892,546  7.8  41.3 
Total interest-bearing deposits 1,002,655  957,847  778,262  4.7  28.8 
Total interest-bearing liabilities 1,228,942  1,171,884  920,360  4.9  33.5 
Total deposits 1,219,482  1,147,782  888,672  6.2  37.2 
Total stockholders’ equity 173,467  160,485  117,497  8.1  47.6 
           
PER SHARE DATA          
Earnings:          
Basic earnings per share $0.25  $0.25  $0.26  % (3.8)%
Diluted earnings per share 0.25  0.25  0.26    (3.8)
Core Earnings(1):          
Core basic earnings per share(1) 0.40  0.35  0.27  14.3  48.1 
Core diluted earnings per share(1) 0.40  0.34  0.27  17.6  48.1 
Book value per share 18.22  18.15  16.85  0.4  8.1 
Tangible book value per share(1) 16.11  16.06  16.48  0.3  (2.2)
Common shares outstanding 9,517,328  9,514,926  8,805,810    8.1 
Weighted average common shares outstanding - basic 9,513,332  8,981,014  7,205,942  5.9  32.0 
Weighted average common shares outstanding - diluted 9,609,603  9,052,213  7,276,869  6.2  32.1 
           
PERFORMANCE RATIOS          
Return on average assets 0.60% 0.59% 0.65% 1.7% (7.7)%
Core return on average assets(1) 0.95  0.81  0.68  17.3  39.7 
Return on average equity 5.62  5.65  6.44  (0.5) (12.7)
Core return on average equity(1) 8.90  7.77  6.66  14.5  33.6 
Net interest margin 3.70  3.55  3.27  4.2  13.1 
Net interest income to average assets 3.45  3.31  3.10  4.2  11.3 
Noninterest expense to average assets 2.63  2.48  2.34  6.0  12.4 
Efficiency ratio(2) 70.74  69.73  68.59  1.4  3.1 
Core efficiency ratio(1) 63.73  63.73  67.18    (5.1)
Dividend payout ratio 13.86  12.38  7.73  12.0  79.3 
Net charge-offs to average loans 0.03  0.01  0.02  200.0  50.0 
           
(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
  3/31/2018 12/31/2017 3/31/2017 Linked Quarter Year/Year
ASSET QUALITY RATIOS          
Nonperforming assets to total assets 0.60% 0.46% 0.53% 30.4% 13.2%
Nonperforming loans to total loans 0.44  0.29  0.24  51.7  83.3 
Allowance for loan losses to total loans 0.64  0.63  0.80  1.6  (20.0)
Allowance for loan losses to nonperforming loans 146.78  214.43  337.95  (31.5) (56.6)
           
CAPITAL RATIOS          
Investar Holding Corporation:          
Total equity to total assets 10.55% 10.64% 12.62% (0.8)% (16.4)%
Tangible equity to tangible assets(1) 9.44  9.53  12.38  (0.9) (23.7)
Tier 1 leverage ratio 10.11  10.66  12.97  (5.2) (22.1)
Common equity tier 1 capital ratio(2) 11.90  11.75  14.84  1.3  (19.8)
Tier 1 capital ratio(2) 12.40  12.24  15.20  1.3  (18.4)
Total capital ratio(2) 14.40  14.22  17.77  1.3  (19.0)
Investar Bank:          
Tier 1 leverage ratio 11.06  11.63  14.23  (4.9) (22.3)
Common equity tier 1 capital ratio(2) 13.57  13.35  16.68  1.6  (18.6)
Tier 1 capital ratio(2) 13.57  13.35  16.68  1.6  (18.6)
Total capital ratio(2) 14.19  13.95  17.41  1.7  (18.5)
           
(1) Non-GAAP financial measure. See reconciliation.
(2) Estimated for March 31, 2018.
 


 
INVESTAR HOLDING CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
(Unaudited)
       
  March 31, 2018 December 31, 2017 March 31, 2017
ASSETS      
Cash and due from banks $13,409  $19,619  $8,043 
Interest-bearing balances due from other banks 7,623  10,802  18,600 
Federal funds sold 70     
Cash and cash equivalents 21,102  30,421  26,643 
       
Available for sale securities at fair value (amortized cost of $237,672, $220,077, and $176,363, respectively) 232,873  217,564  174,139 
Held to maturity securities at amortized cost (estimated fair value of $17,479, $17,947, and $19,422, respectively) 17,727  17,997  19,648 
Loans, net of allowance for loan losses of $8,130, $7,891, and $7,243, respectively 1,264,820  1,250,888  894,905 
Other equity securities 10,148  9,798  6,320 
Bank premises and equipment, net of accumulated depreciation of $8,300, $7,825, and $7,117, respectively 38,091  37,540  31,434 
Other real estate owned, net 4,266  3,837  4,045 
Accrued interest receivable 4,707  4,688  3,243 
Deferred tax asset 1,496  1,294  2,601 
Goodwill and other intangible assets, net 20,141  19,926  3,224 
Bank-owned life insurance 23,382  23,231  7,248 
Other assets 5,435  5,550  2,385 
Total assets $1,644,188  $1,622,734  $1,175,835 
       
LIABILITIES      
Deposits      
Noninterest-bearing $221,855  $216,599  $112,514 
Interest-bearing 1,004,817  1,008,638  756,040 
Total deposits 1,226,672  1,225,237  868,554 
Advances from Federal Home Loan Bank 187,066  166,658  82,413 
Repurchase agreements 21,053  21,935  36,361 
Subordinated debt 18,180  18,168  18,133 
Junior subordinated debt 5,806  5,792  3,609 
Other borrowings     78 
Accrued taxes and other liabilities 11,981  12,215  18,351 
Total liabilities 1,470,758  1,450,005  1,027,499 
       
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; 9,517,328, 9,514,926, and 8,805,810 shares outstanding, respectively 9,517  9,515  8,806 
Surplus 131,179  131,582  112,927 
Retained earnings 35,829  33,203  27,916 
Accumulated other comprehensive loss (3,095) (1,571) (1,313)
Total stockholders’ equity 173,430  172,729  148,336 
  Total liabilities and stockholders’ equity $1,644,188  $1,622,734  $1,175,835 
             


 
INVESTAR HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except share data)
(Unaudited)
       
  For the three months ended
  March 31, 2018 December 31, 2017 March 31, 2017
INTEREST INCOME      
Interest and fees on loans $15,626  $14,407  $10,004 
Interest on investment securities 1,459  1,428  1,029 
Other interest income 93  132  60 
Total interest income 17,178  15,967  11,093 
       
INTEREST EXPENSE      
Interest on deposits 2,253  2,233  1,853 
Interest on borrowings 1,067  917  380 
Total interest expense 3,320  3,150  2,233 
Net interest income 13,858  12,817  8,860 
       
Provision for loan losses 625  395  350 
Net interest income after provision for loan losses 13,233  12,422  8,510 
       
NONINTEREST INCOME      
Service charges on deposit accounts 359  293  97 
Gain on sale of investment securities, net   50  106 
Gain (loss) on sale of fixed assets, net 90  (57) 23 
(Loss) gain on sale of other real estate owned, net   (5) 5 
Servicing fees and fee income on serviced loans 288  329  423 
Other operating income 335  352  231 
Total noninterest income 1,072  962  885 
Income before noninterest expense 14,305  13,384  9,395 
       
NONINTEREST EXPENSE      
Depreciation and amortization 598  556  376 
Salaries and employee benefits 6,048  5,486  3,950 
Occupancy 380  324  264 
Data processing 542  521  368 
Marketing 38  151  28 
Professional fees 255  224  232 
Acquisition expenses 1,104  819  145 
Other operating expenses 1,597  1,527  1,321 
Total noninterest expense 10,562  9,608  6,684 
Income before income tax expense 3,743  3,776  2,711 
Income tax expense 1,341  1,492  847 
Net income $2,402  $2,284  $1,864 
       
EARNINGS PER SHARE      
Basic earnings per share $0.25  $0.25  $0.26 
Diluted earnings per share $0.25  $0.25  $0.26 
Cash dividends declared per common share $0.04  $0.03  $0.02 
             


 
INVESTAR HOLDING CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS
(Amounts in thousands)
(Unaudited)
                   
  For the three months ended
  March 31, 2018 December 31, 2017 March 31, 2017
  Average
Balance
 Interest
Income/
Expense
 Yield/
Rate
 Average
Balance
 Interest
Income/
Expense
 Yield/
Rate
 Average
Balance
 Interest
Income/
Expense
 Yield/
Rate
Assets                  
Interest-earning assets:                  
Loans $1,261,047  $15,626  5.03% $1,169,686  $14,407  4.89% $892,546  $10,004  4.55%
Securities:                  
Taxable 206,722  1,253  2.46  203,011  1,221  2.39  150,139  839  2.27 
Tax-exempt 34,688  206  2.41  35,060  207  2.34  30,540  190  2.52 
Interest-bearing balances with banks 15,968  93  2.37  26,407  132  1.98  24,591  60  0.99 
Total interest-earning assets 1,518,425  17,178  4.59  1,434,164  15,967  4.42  1,097,816  11,093  4.10 
Cash and due from banks 25,526      22,520      8,546     
Intangible assets 19,881      15,655      3,227     
Other assets 73,438      70,254      55,190     
Allowance for loan losses (7,993)     (7,676)     (7,125)    
Total assets $1,629,277      $1,534,917      $1,157,654     
                   
Liabilities and stockholders’ equity                  
Interest-bearing liabilities:                  
Deposits:                  
Interest-bearing demand deposits $360,903  $580  0.65  $348,573  $608  0.69  $291,855  $488  0.68 
Savings deposits 120,861  137  0.46  105,896  138  0.52  53,237  86  0.66 
Time deposits 520,891  1,536  1.20  503,378  1,487  1.17  433,170  1,279  1.20 
Total interest-bearing deposits 1,002,655  2,253  0.91  957,847  2,233  0.92  778,262  1,853  0.97 
Short-term borrowings 143,646  507  1.43  135,126  430  1.26  120,923  282  0.95 
Long-term debt 82,641  560  2.75  78,911  487  2.45  21,175  98  1.88 
Total interest-bearing liabilities 1,228,942  3,320  1.10  1,171,884  3,150  1.07  920,360  2,233  0.98 
Noninterest-bearing deposits 216,827      189,935      110,410     
Other liabilities 10,041      12,613      9,387     
Stockholders’ equity 173,467      160,485      117,497     
Total liability and stockholders’ equity $1,629,277      $1,534,917      $1,157,654     
Net interest income/net interest margin   $13,858  3.70%   $12,817  3.55%   $8,860  3.27%
                            


 
INVESTAR HOLDING CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Amounts in thousands, except share data)
(Unaudited)
       
       
  March 31, 2018 December 31, 2017 March 31, 2017
Tangible common equity      
Total stockholders’ equity $173,430  $172,729  $148,336 
Adjustments:      
Goodwill 17,424  17,086  2,684 
Core deposit intangible 2,617  2,740  440 
Trademark intangible 100  100  100 
Tangible common equity $153,289  $152,803  $145,112 
Tangible assets      
Total assets $1,644,188  $1,622,734  $1,175,835 
Adjustments:      
Goodwill 17,424  17,086  2,684 
Core deposit intangible 2,617  2,740  440 
Trademark intangible 100  100  100 
Tangible assets $1,624,047  $1,602,808  $1,172,611 
       
Common shares outstanding 9,517,328  9,514,926  8,805,810 
Tangible equity to tangible assets 9.44% 9.53% 12.38%
Book value per common share $18.22  $18.15  $16.85 
Tangible book value per common share 16.11  16.06  16.48 
          


 
INVESTAR HOLDING CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Amounts in thousands, except share data)
(Unaudited)
       
  Three months ended
  March 31, 2018 December 31, 2017 March 31, 2017
Net interest income(a)$13,858  $12,817  $8,860 
Provision for loan losses 625  395  350 
Net interest income after provision for loan losses 13,233  12,422  8,510 
       
Noninterest income(b)1,072  962  885 
Gain on sale of investment securities, net   (50) (106)
Loss (gain) on sale of other real estate owned, net   5  (5)
(Gain) loss on sale of fixed assets, net (90) 57  (23)
Core noninterest income(d)982  974  751 
       
Core earnings before noninterest expense 14,215  13,396  9,261 
       
Total noninterest expense(c)10,562  9,608  6,684 
Acquisition expense (1,104) (819) (145)
Severance     (82)
Core noninterest expense(f)9,458  8,789  6,457 
       
Core earnings before income tax expense 4,757  4,607  2,804 
Core income tax expense(1) 950  1,462  875 
Core earnings $3,807  $3,145  $1,929 
       
Core basic earnings per share 0.40  0.35  0.27 
       
Diluted earnings per share (GAAP) $0.25  $0.25  $0.26 
Gain on sale of investment securities, net     (0.01)
Loss (gain) on sale of other real estate owned, net      
(Gain) loss on sale of fixed assets, net (0.01)    
Acquisition expense 0.09  0.06  0.01 
Severance     0.01 
Tax reform related re-measurement charges to income tax expense 0.07  0.03   
Core diluted earnings per share $0.40  $0.34  $0.27 
       
Efficiency ratio(c) / (a+b)70.74% 69.73% 68.59%
Core efficiency ratio(f) / (a+d)63.73% 63.73% 67.18%
Core return on average assets(2) 0.95% 0.81% 0.68%
Core return on average equity(2) 8.90% 7.77% 6.66%
Total average assets $1,629,277  $1,534,917  $1,157,654 
Total average stockholders’ equity 173,467  160,485  117,497 
       
(1) Core income tax expense is calculated using the effective tax rates of 19.98% and 31.7% for the quarters ended March 31, 2018 and December 31, 2017, respectively, prior to the one-time charges of $0.6 million and $0.3 million, respectively, to tax expense as a result of the Tax Cuts and Jobs Act, and the actual effective tax rate of 31.2% for the quarter ended March 31, 2017.
(2) Core earnings used in calculation. No adjustments were made to average assets or average equity.