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Investar Holding Corporation Announces 2015 Third Quarter Results

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BATON ROUGE, La., Oct. 27, 2015 (GLOBE NEWSWIRE) -- Investar Holding Corporation (NASDAQ: ISTR) (the "Company"), the holding company for Investar Bank (the "Bank"), today announced financial results for the quarter ended September 30, 2015. For the quarter ended September 30, 2015, the Company reported net income of $1.8 million, or $0.26 per diluted share, compared to $1.8 million, or $0.25 per  diluted  share,  for  the  quarter  ended  June 30,  2015,  and  $1.4  million,  or  $0.20  per  diluted  share,  for  the  quarter  ended September 30, 2014. This represents an increase of $0.4 million, or 28.7%, in net income for the quarter ended September 30, 2015 when compared to the same quarter in 2014.

Core earnings, a non-GAAP measure which excludes the after-tax impact of securities gains and losses, gains and losses on the sale of other real estate owned, and other identified costs recorded for the period, were $1.9 million, or $0.26 per diluted share, for the quarter ended September 30, 2015 compared to core earnings of $1.2 million, or $0.16 per diluted share, for the quarter ended September 30, 2014. See calculation of core earnings on the Reconciliation of Non-GAAP Financial Measures.

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

"We are pleased to announce another great quarter for Investar. We continue to experience solid loan growth throughout our markets. C&I loan growth remains a focus and we are pleased with the 25% year to date growth in the portfolio. We are also continuing to see the results of our efforts to grow our noninterest-bearing deposits with 35% growth year to date.

We remain aligned with our shareholders and are focused on enhancing the value of our franchise. We believe this will be achieved by transitioning the Bank to a more relationship-based model from a transaction-oriented one. We are committed to investing resources in developing and growing our small business banking strategy."

Third Quarter Highlights

  • Core earnings were $1.9 million, or $0.26 per diluted share, for the quarter ended September 30, 2015 compared to $1.7 million, or $0.24 per diluted share for the quarter ended June 30, 2015, and $1.2 million, or $0.16 per diluted share, for the quarter ended September 30, 2014.

  • Core return on average assets and core efficiency ratio improved for the third quarter of 2015 compared to the quarters ended June 30, 2015 and September 30, 2014.
  • Increase in net income of $0.4 million, or 28.7%, for the third quarter of 2015 compared to the third quarter of 2014.

  • Total loans, excluding loans held for sale, increased $37 million, or 5.5%, from June 30, 2015 and increased $87.8 million, or 14.1% (18.8% annualized), from December 31, 2014 to $710.6 million at September 30, 2015.
  • Commercial and industrial loans at September 30, 2015 increased $11.2 million, or 19.8%, from June 30, 2015 and increased $13.5 million, or 24.9% (33.3% annualized), from December 31, 2014 to $67.7 million at September 30, 2015.
  • Nonperforming loans to total loans decreased to 0.37% at September 30, 2015 from 0.54% at December 31, 2014.

  • Allowance for loan losses to nonperforming and total loans increased to 226.43% and 0.83%, respectively, at September 30, 2015 compared to 138.64% and 0.74%, respectively, at December 31, 2014.
  • Other real estate owned decreased $1.6 million, or 56.9% from December 31, 2014.

  • Total noninterest-bearing deposits were $94.5 million at September 30, 2015, an increase of $8.2 million, or 9.5%, from June 30, 2015 and an increase of $24.3 million, or 34.6% (46.3% annualized), from December 31, 2014.
  • Repurchased 36,856 shares of stock through our current stock repurchase program at an average price of $15.51.

  • The dividend declared in the third quarter of 2015 increased 20.6% when compared to the dividend declared for the third quarter of 2014.

  • Acquired land and building for an additional branch in the New Orleans market.

Loans

Total loans were $710.6 million at September 30, 2015, an increase of $87.8 million, or 14.1%, from December 31, 2014.

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

    Percentage   Percentage Increase/(Decrease)

 September 30, 2015 of Portfolio December 31, 2014 of Portfolio Amount Percent 
 
Mortgage loans on real estate 
Construction and development $79,796  11.2% $71,350  11.4%  $8,446    11.8% 
1-4 Family  154,277  21.7  137,519  22.1   16,758    12.2  
Multifamily  24,484  3.5  17,458  2.8   7,026    40.2  
Farmland  3,009  0.4  2,919  0.5   90    30.8  
Commercial real estate       
Owner occupied  132,419  18.7  119,668  19.2   12,751    10.7  
Nonowner occupied  126,555  17.8  105,390  16.9   21,165    20.1  
Commercial and industrial  67,671  9.5  54,187  8.7   13,484    24.9  
Consumer  122,350  17.2   114,299  18.4    8,051    7.0  
Total loans  710,561  100%  622,790  100%   87,771    14.1% 
Loans held for sale  55,653   103,396    (47,743   (46.2) 
Total gross loans $766,214  $726,186   $40,028    5.5% 
 

Consumer loans, including consumer loans held for sale, totaled $175.7 million at September 30, 2015, a decrease of $38.3 million, or 17.9%, from $214 million at December 31, 2014. The decrease is mainly attributable to the $46.4 million decrease in the balance of consumer loans held for sale at September 30, 2015 when compared to December 31, 2014. Two consumer loan sales were postponed by the buyer from the fourth quarter of 2014 to the first quarter of 2015, therefore increasing the balance of consumer loans held for sale at December 31, 2014.

At  September 30,  2015,  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 $200.1 million, an increase of $26.2 million, or 15.1%, compared to the business lending portfolio of $173.9 million at December 31, 2014.

Management continues to monitor the Company's loan portfolio for exposure, directly or indirectly, to the potential negative impacts from the decline in oil and gas prices. Less than 1% of the total loan portfolio remains directly related to the energy sector. At this time, management does not anticipate that oil and gas prices at current levels will negatively impact borrowers' ability to service their debt.

The provision for loan loss expense was $0.4 million for the third quarter of 2015, a decrease of $0.1 million compared to the third quarter of 2014. The allowance for loan losses was $5.9 million, or 226.43% and 0.83% of nonperforming loans and total loans, respectively, at September 30, 2015, compared to $4.6 million, or 138.61% and 0.74% of nonperforming loans and total loans, respectively, at December 31, 2014. The allowance for loan losses plus the fair value marks on acquired loans was 0.93% of total loans at September 30, 2015 compared to 0.88% at December 31, 2014. Nonperforming loans to total loans improved to 0.37% at September 30, 2015 compared to 0.54% at December 31, 2014.

Deposits

Total deposits at September 30, 2015 were $730.4 million, an increase of $102.3 million, or 16.3%, from December 31, 2014. The increase in total deposits was driven primarily by an increase of $24.3 million, or 34.6%, in noninterest-bearing demand deposits, and an increase in time deposits of $43.5 million, or 14%, from December 31, 2014. The Company's focus on relationship banking, including our deposit cross sell strategy, as well as management's focus on growing the commercial and industrial loan portfolio and bringing in related deposits, continues to positively impact both noninterest-bearing demand deposit and NOW account growth.

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

             
    Percentage   Percentage

 Increase/(Decrease)
  September 30, 2015 of Portfolio December 31, 2014 of Portfolio

 Amount Percent
 
Noninterest-bearing demand deposits $94,533   12.9% $70,217   11.2% $24,316   34.6%
NOW accounts  132,739   18.2   116,644   18.6   16,095   13.8 
Money market deposit accounts  95,584   13.1   77,589   12.3   17,995   23.2 
Savings accounts  53,717   7.3   53,332   8.5   385   0.7 
Time deposits  353,861   48.5   310,336   49.4   43,525   14.0 
Total deposits $730,434    100% $628,118    100% $102,316    16.3%
 

Net Interest Income

Net interest income for the third quarter of 2015 totaled $8 million, an increase of $0.2 million, or 2.2%, compared to the second quarter of 2015, and an increase of $1 million, or 13.6%, compared to the third quarter of 2014. The increase was a direct result of continued growth of the Company's loan portfolio with an increase in net interest income of $1.8 million due to an increase in volume offset by a $0.8 million decrease related to a reduction in yield compared to the third quarter of 2014.

The Company's net interest margin was 3.52% for the quarter ended September 30, 2015 compared to 3.70% for the second quarter of 2015 and 3.86% for the third quarter of 2014. The yield on interest-earning assets was 4.20% for the quarter ended September 30, 2015 compared to 4.37% for the second quarter of 2015 and 4.51% for the third quarter of 2014. The decrease in both the net interest margin and yield on interest-earning assets can be attributed to the consumer loan portfolio. The consumer loan portfolio primarily consists of indirect auto loans and has experienced margin compression related to its current originations.

The cost of deposits increased one basis point when comparing the third quarter of 2015 to the second quarter of 2015, and increased three basis points when comparing the third quarter of 2015 to the third quarter of 2014.

Noninterest Income

Noninterest income for the third quarter of 2015 totaled $2.2 million, an increase of $0.1 million, or 4.9%, compared to the second quarter of 2015, and an increase of $0.2 million, or 10.6%, compared to the third quarter of 2014. The largest component of noninterest income is the gain on sale of loans, representing 47.2% and 58.7% for the third quarters of 2015 and 2014, respectively.

The following table sets forth the composition of the Company's gain on sale of loans for the time periods indicated (dollars in thousands).

    
 Q3 2015 Q2 2015 Q3 2014 Qtr/Qtr Year/Year
Gain on sale of loans         
Consumer$  705  $  803  $  713   -12%  -1%
Mortgage   318     274     433   16%  -27%
Total 1,023   1,077   1,146   -5%  -11%

The increase in noninterest income from the third quarter of 2014 resulted primarily from the $0.3 million increase in both other operating income and gain on sale of investment securities, offset by a $0.4 million decrease in gain on sale of real estate owned, net. The increase in other operating income is mainly attributable to the $0.2 million increase in servicing fees, a direct result of the growth in the Company's servicing portfolio from increased consumer loan sales.

Core noninterest income, which excludes the gains and losses on the sales of investment securities and other real estate owned, was $2 million for the third quarter of 2015, an increase of $0.1 million, or 2.9%, compared to $1.9 million for the second quarter of 2015, and an increase of $0.3 million, or 19.9%, compared to the third quarter of 2014.

Noninterest Expense

Noninterest expense for the third quarter of 2015 totaled $7 million, an increase of $0.3 million, or 5%, compared to the second quarter of 2015, and an increase of $0.7 million, or 11.1%, compared to the third quarter of 2014. The increase in noninterest expense from the third quarter of 2014 is primarily due to the $0.4 million increase in salaries and employee benefits and the $0.2 million increase in other operating expenses, both of which are mainly attributable to the continued growth of the Company including the opening of the Highland Road branch in Baton Rouge, Louisiana on August 1, 2014.

During the quarter, the Company incurred restructuring costs of approximately $0.3 million. These costs included severance of $150,000, which contributed to the $0.4 million increase in salaries and benefits discussed above, professional fees of $61,000, and other expenses of $105,000 related to the downsizing of our indirect lending platform. The downsizing can be attributed to the Company's ongoing strategic shift to enhance franchise value by transitioning to a more relationship-based model from one that is transaction-oriented. The Company also recorded an impairment of $54,000 on its investment in a tax credit entity. Core noninterest expense, which excludes the impact of these costs, was $6.6 million for both the third and second quarters of 2015, an increase of $0.3 million, or 5.2%, compared to the third quarter of 2014.

Basic Earnings Per Share and Diluted Earnings Per Share

The Company reported both basic and diluted earnings per share of $0.26 for the three months ended September 30, 2015, an increase of $0.06 compared to basic and diluted earnings per share for the three months ended September 30, 2014.

Core basic and diluted earnings per share were $0.26 for the three months ended September 30, 2015, an increase of $0.09 and $0.10, respectively, compared to core basic earnings per share of $0.17 and core diluted earnings per share of $0.16 for the three months ended September 30, 2014.

Taxes

The Company recorded income tax expense of $0.9 million for the quarter ended September 30, 2015, which equates to an effective tax rate of 31.4%. During the third quarter, the Company recorded an additional tax credit related to its investment in a tax credit entity in  December  2014  whose  purpose  was  to  invest  in  a Federal  Historic Rehabilitation  tax  credit  project.  The Company recognized a tax credit of $72,000, reducing tax expense for the third quarter, as well as a corresponding impairment on its investment in the tax credit entity of $54,000.

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 11 full service banking offices located throughout its market. At September 30, 2015, the Company had 165 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," "efficiency ratio," "core noninterest income," "core earnings before noninterest expense," "core noninterest 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 review any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. These factors include, but are not limited to, the following, any one or more of which could materially affect the outcome of future events:

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

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

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

  • the extent of continuing client demand for the high level of personalized service that is a key element of our banking approach as well as our ability to execute our strategy generally;
  • our dependence on our management team, and our ability to attract and retain qualified personnel;

  • changes in the quality or composition of our loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers;

  • inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates;

  • the concentration of our business within our geographic areas of operation in Louisiana; and

  • concentration of credit exposure.

These factors should not be construed as exhaustive. Additional information on these and other risk factors can be found in Item 1A. "Risk Factors" and Item 7. "Special Note Regarding Forward-Looking Statements" in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission.

INVESTAR HOLDING CORPORATION  
CONSOLIDATED BALANCE SHEETS  
(Amounts in thousands, except share data) 
  
  September 30, 2015 December 31, 2014 
  (Unaudited)   
      
ASSETS         
Cash and due from banks $  6,595  $  5,519  
Interest-bearing balances due from other banks  13,058   13,493  
Federal funds sold  223   500  
Cash and cash equivalents  19,876   19,512  
      
Available for sale securities at fair value (amortized cost of $84,218 and $69,838,     
respectively)  84,566   70,299  
Held to maturity securities at amortized cost (estimated fair value of $27,486 and     
$22,301, respectively)  27,525   22,519  
Loans held for sale  55,653   103,396  
Loans, net of allowance for loan losses of $5,911 and $4,630, respectively  704,650   618,160  
Other equity securities  4,899   5,566  
Bank premises and equipment, net of accumulated depreciation of $5,796 and $3,964,     
respectively  29,916   28,538  
Other real estate owned, net  1,178   2,735  
Accrued interest receivable  2,560   2,435  
Deferred tax asset  1,803   1,097  
Goodwill and other intangible assets  3,185   3,216  
Other assets  1,936   1,881  
Total assets $   937,747   $   879,354   
      
LIABILITIES      
Deposits             
Noninterest-bearing $94,533   $70,217  
Interest-bearing  635,901   557,901  
Total deposits  730,434   628,118  
Advances from Federal Home Loan Bank  47,900   125,785  
Repurchase agreements  34,648   12,293  
Note payable  3,609   3,609  
Accrued taxes and other liabilities  13,028   6,165  
Total liabilities  829,619   775,970  
      
STOCKHOLDERS' EQUITY         
Preferred stock, $1.00 par value per share; 5,000,000 shares authorized  -   -  
Common stock, $1.00 par value per share; 40,000,000 shares authorized; 7,264,261 and         
7,262,085 shares outstanding, respectively  7,305   7,264  
Treasury stock  (630  (23) 
Surplus  84,588   84,213  
Retained earnings  17,257   11,809  
Accumulated other comprehensive (loss) income  (392)  121  
Total stockholders' equity  108,128   103,384  
Total liabilities and stockholders' equity  $937,747   $879,354  



INVESTAR HOLDING CORPORATION 
CONSOLIDATED STATEMENTS OF OPERATIONS  
(Amounts in thousands, except share data) (Unaudited) 
  
  Three months ended Nine months ended 
  September 30, September 30, 
   2015   2014   2015   2014  
          
INTEREST INCOME         
Interest and fees on loans $8,912  $7,801  $25,856  $21,595  
Interest on investment securities  550   367   1,558   917  
Other interest income  18   14   53   34  
Total interest income  9,480   8,182   27,467   22,546  
          
INTEREST EXPENSE   
Interest on deposits  1,358   1,084   3,849   3,137  
Interest on borrowings  170   98   387   292  
Total interest expense  1,528   1,182   4,236   3,429  
Net interest income  7,952   7,000   23,231   19,117  
          
Provision for loan losses  400   505   1,500   1,198  
Net interest income after provision for loan losses  7,552   6,495   21,731   17,919  
  
NONINTEREST INCOME 
Service charges on deposit accounts  95   85   286   221  
Gain on sale of investment securities, net  334   63   468   228  
(Loss) gain on sale of real estate owned, net  (147  245   (141  238  
Gain on sale of loans, net  1,023   1,146   3,831   2,801  
Fee income on loans held for sale, net  261   85   771   250  
Other operating income  601   335   1,558   797  
Total noninterest income  2,167   1,959   6,773   4,535  
Income before noninterest expense  9,719   8,454   28,504   22,454  
          
NONINTEREST EXPENSE     
Depreciation and amortization  362   343   1,081   973  
Salaries and employee benefits  4,161   3,773   12,040   10,735  
Occupancy  217   223   655   629  
Data processing  389   354   1,099   940  
Marketing  35   94   155   241  
Professional fees  271   176   770   433  
Impairment on investment in tax credit entity  54   -   54   -  
Other operating expenses  1,524   1,350   4,265   3,478  
Total noninterest expense  7,013   6,313   20,119   17,429  
Income before income tax expense  2,706   2,141   8,385   5,025  
Income tax expense  850   699   2,766   1,637  
Net income $1,856  $1,442  $5,619  $3,388  
          
EARNINGS PER SHARE   
Basic earnings per share $0.26  $0.20  $0.78  $0.68  
Diluted earnings per share $0.26  $0.20  $0.78  $0.65  
Cash dividends declared per common share $0.01  $0.01  $0.02  $0.03  



INVESTAR HOLDING CORPORATION
EARNINGS PER COMMON SHARE 
(Amounts in thousands, except share data) 
(Unaudited)
 
  Three months ended Nine months ended
  September 30, September 30,
   2015   2014   2015   2014 
         
Net income available to common shareholders $  1,856  $  1,442  $  5,619  $  3,388 
Weighted average number of common shares         
outstanding -        
Used in computation of basic earnings per    7,217,006   7,064,806   7,218,603   4,967,393 
common share        
Effect of dilutive securities:        
Restricted stock  9,326   35,251   4,812   45,649 
Stock options  13,980   22,811   12,385   22,811 
Stock warrants  12,269   189,601   11,284   192,184 
Weighted average number of common shares                
outstanding -        
Plus effect of dilutive securities used in         
computation of diluted earnings per         
common share  7,252,581   7,312,469   7,247,084   5,228,037 
Basic earnings per share $  0.26  $  0.20  $  0.78  $  0.68 
Diluted earnings per share $0.26  $0.20  $0.78  $0.65 



INVESTAR HOLDING CORPORATION 
SUMMARY FINANCIAL INFORMATION 
(Amounts in thousands, except share data) 
(Unaudited)
     
  Q3 2015 Q2 2015 Q3 2014 Qtr/Qtr Year/Year
           
EARNINGS DATA     
Total interest income $9,480  $9,187  $8,182   3.2%  15.9%
Total interest expense  1,528   1,407   1,182   8.6%  29.3%
Net interest income  7,952   7,780   7,000   2.2%  13.6%
Provision for loan losses  400   400   505   0.0%  -20.8%
Total noninterest income  2,167   2,066   1,959   4.9%  10.6%
Total noninterest expense  7,013   6,682   6,313   5.0%  11.1%
Income before income taxes  2,706   2,764   2,141   -2.1%  26.4%
Income tax expense  850   951   699   -10.6%  21.6%
Net income $1,856  $1,813  $1,442   2.4%  28.7%
           
AVERAGE BALANCE SHEET DATA          
Total assets $944,234  $891,581  $762,330   5.9%  23.9%
Total interest-earning assets  895,208   842,984   719,985   6.2%  24.3%
Total loans  692,196   664,606   589,082   4.2%  17.5%
Total gross loans  777,080   729,851   619,356   6.5%  25.5%
Total interest-bearing deposits  634,232   617,442   523,075   2.7%  21.3%
Total interest-bearing liabilities  738,612   694,497   585,015   6.4%  26.3%
Total deposits  721,657   699,151   594,519   3.2%  21.4%
Total shareholders' equity  107,795   106,583   100,068   1.1%  7.7%
           
PER SHARE DATA          
Earnings:          
Basic earnings per share $0.26  $0.25  $0.20   2.4%  28.6%
Diluted earnings per share  0.26   0.25   0.20   2.5%  28.0%
Core earnings:          
Basic earnings per share(1)  0.26   0.24   0.17   10.0%  49.6%
Diluted earnings per share(1)  0.26   0.24   0.16   10.0%  61.9%
Book value per share  14.88   14.65   14.08   1.6%  5.7%
Tangible book value per share(1)  14.45   14.22   13.64   1.6%  5.9%
Common shares outstanding  7,264,261   7,293,209   7,253,774   -0.4%  0.1%
           
PERFORMANCE RATIOS          
Return on average assets  0.78%  0.82%  0.75%  -4.9%  4.0%
Core return on average assets(1)  0.80%  0.77%  0.64%  3.3%  24.4%
Return on average equity  6.83%  6.82%  5.72%  0.1%  19.4%
Core return on average equity(1)  7.01%  6.48%  4.90%  8.2%  43.1%
Net interest margin  3.52%  3.70%  3.86%  -4.9%  -8.8%
Net interest income to average assets  3.34%  3.50%  3.64%  -4.6%  -8.2%
Noninterest expense to average assets  2.95%  3.01%  3.29%  -2.0%  -10.3%
Efficiency ratio (1)  69.31%  67.87%  70.47%  2.1%  -1.6%
Core efficiency ratio (1)  66.88%  68.85%  72.97%  -2.9%  -8.3%
Dividend payout ratio  3.19%  3.11%  3.40%  2.6%  -6.2%
Net chargeoffs to average loans  0.03%  0.00%  0.04%  NA   -25.0%



INVESTAR HOLDING CORPORATION  
SUMMARY FINANCIAL INFORMATION  
(Amounts in thousands, except share data) 
 (Unaudited) 
           
 Q3 2015 Q2 2015 Q3 2014 Qtr/Qtr Year/Year
   
ASSET QUALITY RATIOS   
Nonperforming assets to total assets   0.40%  0.56%  0.56%     
Nonperforming loans to total loans   0.37%  0.40%  0.25%  -7.5%  48.0% 
Allowance for loan losses to total loans   0.83%  0.85%  0.74%  -2.4%  12.2% 
Allowance for loan losses to nonperforming loans  226.43%  213.20%  296.01%  6.2%  23.5% 
 
CAPITAL RATIOS(2) 
Investar Holding Corporation: 
Total equity to total assets  11.53%  11.59%  13.03%  -0.5%  -11.5% 
Tangible equity to tangible assets  11.23%  11.29%  12.66%  -0.5%  -11.3% 
Tier 1 leverage ratio  11.61%  12.15%  13.52%  -4.4%  -14.1% 
Common equity tier 1 capital ratio  12.69%  12.96%  NA   -2.1%  NA  
Tier 1 capital ratio  13.11%  13.39%  15.76%  -2.1%  -16.8% 
Total capital ratio  13.82%  14.10%  16.42%  -2.0%  -15.8% 
Investar Bank:           
Tier 1 leverage ratio  11.25%  11.72%  9.04%  -4.0%  24.4% 
Common equity tier 1 capital ratio  12.71%  12.91%  NA   -1.5%  NA  
Tier 1 capital ratio  12.71%  12.91%  10.53%  -1.5%  20.7% 
Total capital ratio  13.42%  13.62%  11.20%  -1.5%  19.8% 

(1) Non-GAAP financial measures. See reconciliation.
(2) Beginning January 1, 2015, the capital ratios for the Company and the Bank are calculated using the Basel III framework. Capital ratios for prior periods were calculated using the Basel I framework. The Common Equity Tier 1 (CET1) capital ratio is a new ratio introduced under the Basel III framework. Ratios are estimated for September 30, 2015.

INVESTAR HOLDING CORPORATION 
CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS  
(Amounts in thousands) 
(Unaudited) 
  
  Three months ended September 30, 
   2015   2014  
  Average
Balance
 Interest
Income/
Expense

Yield/Rate



 Average
Balance
 Interest
Income/
Expense

Yield/Rate



 
              
Assets        
Interest-earning assets:       
Loans $777,080  $8,912   4.55% $619,356  $7,801   5.00% 
Securities:             
Taxable  82,476   444   2.14   66,713   244   1.45  
Tax-exempt  17,234   106   2.44   19,353   123   2.52  
Interest-bearing balances with banks  18,418   18   0.39   14,563   14   0.38  
Total interest-earning assets  895,208   9,480   4.20   719,985   8,182   4.51  
Cash and due from banks  5,669       6,093      
Intangible assets  3,189       3,230      
Other assets  46,061       37,057      
Allowance for loan losses  (5,893)      (4,035)     
Total assets $944,234      $762,330      
              
Liabilities and shareholders' equity            
Interest-bearing liabilities:              
Deposits:                         
Interest-bearing demand $229,919  $369   0.64% $179,226  $279   0.62% 
Savings deposits  53,407   91   0.68   52,973   91   0.68  
Time deposits  350,906   898   1.02   290,876   714   0.97  
Total interest-bearing deposits  634,232   1,358   0.85   523,075   1,084   0.82  
Short-term borrowings  68,544   32   0.19   23,137   12   0.21  
Long-term debt  35,836   138   1.53   38,803   86   0.88  
Total interest-bearing liabilities  738,612   1,528   0.82   585,015   1,182   0.80  
Noninterest-bearing deposits  87,425       71,444      
Other liabilities  10,402       5,803      
Stockholders' equity  107,795       100,068      
Total liability and stockholders' equity $944,234      $762,330      
Net interest income/net interest margin  $  7,952   3.52%   $  7,000   3.86% 



INVESTAR HOLDING CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS 
(Amounts in thousands)
(Unaudited)
 
  Three months ended September 30,
   2015   2014 
  Average
Balance
 Interest
Inco
me/
Expense
 Yield/Rate Average
Balan
ce
 Interest
Incom
e/
Expense
 Yield/Rate
             
             
Assets       
Interest-earning assets:      
Loans $740,652  $25,856   4.67% $576,280  $21,595   5.01%
Securities:            
Taxable  76,069   1,214   2.13   58,779   623   1.42 
Tax-exempt  18,381   344   2.50   16,272   294   2.42 
Interest-bearing balances with banks  17,863   53   0.40   11,833   34   0.38 
Total interest-earning assets  852,965   27,467   4.31   663,164   22,546   4.55 
Cash and due from banks  5,597       5,790     
Intangible assets  3,199       3,240     
Other assets  45,619       35,667     
Allowance for loan losses  (5,497)      (3,683)    
Total assets $901,883      $  704,178     
             
Liabilities and shareholders' equity            
Interest-bearing liabilities:             
Deposits:                        
Interest-bearing demand $219,018  $1,034   0.63% $168,309  $783   0.62%
Savings deposits  54,158   274   0.68   52,439   269   0.69 
Time deposits  339,129   2,541   1.00   281,822   2,085   0.99 
Total interest-bearing deposits  612,305   3,849   0.84   502,570   3,137   0.83 
Short-term borrowings  53,030   72   0.18   23,810   36   0.20 
Long-term debt  39,213   315   1.07   37,079   256   0.92 
Total interest-bearing liabilities  704,548   4,236   0.80   563,459   3,429   0.81 
Noninterest-bearing deposits  82,157       65,080     
Other liabilities  8,736       4,157     
Stockholders' equity  106,442       71,482     
Total liability and stockholders' equity $901,883      $704,178     
Net interest income/net interest margin   $  23,231   3.64%   $  19,117   3.85%



INVESTAR HOLDING CORPORATION 
RECONCILIATION OF NON GAAP FINANCIAL MEASURES 
(Amounts in thousands, except share data)
(Unaudited)
 
  September 30, June 30,
   2015   2014   2015 
Tangible common equity      
Total stockholder's equity $  108,128  $  102,165  $  106,873 
Adjustments:      
Goodwill  2,684   2,684   2,684 
Core deposit intangible  501   542   511 
Tangible common equity $   104,943   $   98,939   $   103,678  
Tangible assets      
Total assets $  937,747  $  784,597  $  921,855 
Adjustments:      
Goodwill  2,684   2,684   2,684 
Core deposit intangible  501   542   511 
Tangible assets $   934,562   $   781,371   $   918,660  
       
Common shares outstanding  7,264,261   7,253,774   7,293,209 
Tangible equity to tangible assets  11.23%  12.66%  11.29%
Book value per common share $14.88  $14.08  $14.65 
Tangible book value per common share  14.45   13.64   14.22 



INVESTAR HOLDING CORPORATION 
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES 
(Amounts in thousands, except share data)
(Unaudited)
 
    Three months ended
    September 30, June 30,
     2015   2014   2015 
               
Net interest income (a) $7,952  $7,000  $7,780 
Provision for loan losses    400   505   400 
Net interest income after provision for loan losses    7,552   6,495   7,380 
         
Gain on sale of investment securities    (334)  (63)  (134)
Loss (gain) on sale of other real estate owned, net    147   (245)  (7)
Core noninterest income (d)  1,980   1,651   1,925 
         
Core earnings before noninterest expense   9,532   8,146   9,305 
         
Impairment on investment in tax credit entity    (54)  -   - 
Restructuring costs:        
Severance    (150)  -   - 
Legal and consulting    (61)  -   - 
Other    (105)  -   - 
Core noninterest expense (f)  6,643   6,313   6,682 
         
Core income tax expense (1)    985   598   902 
Core earnings   $1,904  $1,235  $1,721 
         
Core basic earnings per share  $0.26  $0.17  $0.24 
         
Gain on sale of investment securities    (0.04)  (0.01)  (0.01)
Loss (gain) on sale of other real estate owned, net    0.01   (0.03)  - 
Impairment on investment in tax credit entity    -   -   - 
Restructuring costs    0.03     -     - 
Core diluted earnings per share   $0.26  $0.16  $0.24 
         
               
Core efficiency ratio (f) / (a+d)  66.88%  72.97%  68.85%
Core return on average assets (2)    0.80%  0.64%  0.77%
Core return on average equity (2)    7.01%  4.90%  6.48%
Total average assets   $944,234  $762,330  $891,581 
Total average stockholders' equity    107,795   100,068   106,583 

(1) Core income tax expense is calculated using the actual effective tax rates of 34.4% and 32.6% for the three months ended June 30, 2015 and September 30, 2014, respectively. The core income tax expense for the three months ended September 30, 2015 is calculated using the core effective tax rate of 34.1%. See rate reconciliation on the following page.
(2) Core earnings used in calculation. No adjustments were made to average assets or average equity.

INVESTAR HOLDING CORPORATION 
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES 
(Amounts in thousands, except share data)
(Unaudited)
 
    Three months ended

    September 30, June 30,
     2015   2014   2015 
         
Earnings before income tax expense (a) $2,706  $2,141  $2,764 
         
Income tax credit    72     -      -  
Adjusted income tax expense (b)  922   699   951 
         
Core effective tax rate(1) (b) / (a)  34.1%  32.6%  34.4%
         
For further information contact: Investar Holding Corporation Chris Hufft Chief Financial Officer (225) 227-2215 Chris.Hufft@investarbank.com
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