Market Overview

Investar Holding Corporation Announces 2015 Fourth Quarter Results

Share:

BATON ROUGE, La., Jan. 28, 2016 (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 December 31, 2015. For the quarter ended December 31, 2015, the Company reported net income of $1.5 million, or $0.20 per diluted share, compared to $2.0 million, or $0.27 per diluted share for the quarter ended December 31, 2014. This represents a decrease of $0.5 million, or 27.6%, in net income which can primarily be attributed to a tax credit realized by the Company in the fourth quarter of 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 nonrecurring revenue and costs recorded for the period, were $1.5 million, or $0.21 per diluted share, for the quarter ended December 31, 2015 compared to core earnings of $1.4 million, or $0.19 per diluted share, for the quarter ended December 31, 2014. See calculation of core earnings on the Reconciliation of Non-GAAP Financial Measures.

During the quarter, the Bank announced that it was exiting the indirect auto loan origination business. The Bank discontinued accepting indirect auto loan applications on December 31, 2015, but continued to process and fund applications that were accepted on or before that date. In connection with the discontinuation of the Bank's indirect auto loan origination business, the Bank incurred exit costs of approximately $145,000, consisting of $76,000 of severance and $69,000 of contract termination costs.

The Bank intends to sell the balance of indirect auto loans classified as held for sale as of year-end. Subsequent to December 31, 2015, the Company has recognized $0.3 million in gain on sale of loans from sales of its indirect auto loans.

Additionally, during the fourth quarter of 2015, the Company realized unfavorable claims experience in its self-insured health plan maintained for its employees resulting in additional benefits expense of approximately $0.3 million when compared to the third quarter of 2015. The Company believes this experience was unusual and does not expect the high level of claims to continue.

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

"We remain focused on growing our franchise and delivering value to our shareholders. We were pleased with our earnings for the year and excited to have met our internal growth targets for both total loans and noninterest-bearing deposits. Credit quality remains strong and we will continue to focus our efforts on making quality credit decisions.

We took proactive steps during the quarter to better position the Company moving in to 2016 by hiring three additional commercial lenders while making the strategic decision to exit the indirect auto loan origination business. The decision was based on the operating performance of the indirect auto loan origination business unit and our desire to focus resources on relationship banking opportunities. We believe the shift from transactional banking to relationship banking will enhance value for our shareholders. We intend to remain focused on smart growth through the recent addition of quality commercial lenders and the continued bank-wide focus on growing noninterest-bearing deposits."

Fourth Quarter Highlights

  • Total loans, excluding loans held for sale, increased $34.9 million, or 4.9%, compared to September 30, 2015, and increased $122.7 million, or 19.7%, compared to December 31, 2014 to $745.4 million at December 31, 2015.
  • Commercial and industrial loans at December 31, 2015 increased $2.3 million, or 3.4%, compared to September 30, 2015 and increased $15.8 million, or 29.1%, compared to December 31, 2014 to $70.0 million at December 31, 2015.
  • Three experienced commercial lenders were hired in the fourth quarter as the Company focuses on growing its commercial loan portfolio.
  • Nonperforming loans to total loans decreased to 0.32% at December 31, 2015 compared to 0.37% at September 30, 2015 and 0.54% at December 31, 2014.
  • Allowance for loan losses to nonperforming loans increased to 254.16% at December 31, 2015 compared to 226.43% at September 30, 2015 and 138.61% at December 31, 2014.
  • Other real estate owned decreased $0.5 million, or 38.4%, to $0.7 million compared to $1.2 million at September 30, 2015 and decreased $2.0 million, or 73.5%, compared to $2.7 million at December 31, 2014.
  • Total noninterest-bearing deposits were $90.4 million at December 31, 2015, an increase of $20.2 million, or 28.8%, compared to December 31, 2014.

Loans

Total loans were $745.4 million at December 31, 2015, an increase of $122.7 million, or 19.7%, 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) 
  December 31, 2015  of Portfolio  December 31, 2014  of Portfolio  Amount  Percent 
Mortgage loans on real estate                        
Construction and development $81,863   11.0% $71,350   11.4% $10,513   14.7%
1-4 Family  156,300   21.0   137,519   22.1   18,781   13.7 
Multifamily  29,694   4.0   17,458   2.8   12,236   70.1 
Farmland  2,955   0.4   2,919   0.5   36   1.2 
Commercial real estate                        
Owner-occupied  137,752   18.5   119,668   19.2   18,084   15.1 
Nonowner-occupied  150,831   20.2   105,390   16.9   45,441   43.1 
Commercial and industrial  69,961   9.4   54,187   8.7   15,774   29.1 
Consumer  116,085   15.5   114,299   18.4   1,786   1.6 
Total loans  745,441   100%  622,790   100%  122,651   19.7%
Loans held for sale  80,509       103,396       (22,887)  (22.1)
Total gross loans $825,950      $726,186      $99,764   13.7%
                         

Consumer loans, including consumer loans held for sale, totaled $196.0 million at December 31, 2015, a decrease of $18.0 million, or 8.4% from $214.0 million at December 31, 2014. The decrease is mainly attributable to the $19.8 million decrease in the balance of consumer loans held for sale at December 31, 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. In addition, in November the Company announced that the Bank will exit the indirect auto loan origination business but would be accepting indirect auto loan applications through December 31, 2015. Our impending exit from the business negatively impacted the volume of loans originated for sale in the fourth quarter of 2015 when compared to prior quarters.

At December 31, 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 $207.7 million, an increase of $33.8 million, or 19.5%, 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 fluctuation 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 decreases in oil and gas prices will negatively impact borrowers' ability to service their debt. Management continually evaluates the allowance for loan losses based on several factors, including economic conditions, and currently believes that any potential negatively affected future cash flows related to these loans would be covered by the allowance for loan losses.

The provision for loan loss expense was $0.4 million for the fourth quarter of both 2015 and 2014. The allowance for loan losses was $6.1 million, or 254.16% and 0.82% of nonperforming loans and total loans, respectively, at December 31, 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 0.91% of total loans at December 31, 2015 compared to 0.88% at December 31, 2014. Nonperforming loans to total loans improved to 0.32% at December 31, 2015 compared to 0.54% at December 31, 2014.

Deposits

Total deposits at December 31, 2015 were $737.4 million, an increase of $109.3 million, or 17.4%, from December 31, 2014. The increase in total deposits was driven primarily by an increase in noninterest-bearing demand deposits of $20.2 million, or 28.8%, an increase in NOW accounts of $23.9 million, or 20.5%, and an increase in time deposits of $46.3 million, or 14.9%, 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) 
  December 31, 2015  of Portfolio  December 31, 2014  of Portfolio  Amount  Percent 
Noninterest-bearing demand deposits $90,447   12.3% $70,217   11.2% $20,230   28.8%
NOW accounts  140,503   19.0   116,644  18.6   23,859   20.5 
Money market deposit accounts  96,113   13.0   77,589  12.3   18,524   23.9 
Savings accounts  53,735  7.3   53,332  8.5   403   0.8 
Time deposits  356,608  48.4   310,336  49.4   46,272   14.9 
Total deposits $737,406   100% $628,118   100% $109,288   17.4%
                         

Net Interest Income

Net interest income for the fourth quarter of 2015 totaled $8.2 million, an increase of $0.3 million, or 3.5%, compared to the third quarter of 2015, and an increase of $0.6 million, or 8.6%, compared to the fourth 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 $1.4 million due to an increase in volume offset by a $0.8 million decrease related to a reduction in yield compared to the fourth quarter of 2014.

The Company's net interest margin was 3.53% for the quarter ended December 31, 2015 compared to 3.52% for the third quarter of 2015 and 3.84% for the fourth quarter of 2014. The yield on interest-earning assets was 4.24% for the quarter ended December 31, 2015 compared to 4.20% for the third quarter of 2015 and 4.47% for the fourth quarter of 2014. The decrease in both the net interest margin and yield on interest-earning assets compared to the fourth quarter of 2014 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 1 basis point when comparing the fourth quarter of 2015 to the third quarter of 2015, and increased 5 basis points when comparing the fourth quarter of 2015 to the fourth quarter of 2014.

Noninterest Income

Noninterest income for the fourth quarter of 2015 totaled $1.6 million, a decrease of $0.6 million, or 27.5%, compared to the third quarter of 2015, and an increase of $0.2 million, or 18.6%, compared to the fourth quarter of 2014. The decrease in noninterest income compared to the third quarter of 2015 is mainly attributable to the $0.5 million decrease in gain on sale of loans related to the timing of loan sales.

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

  Q4 2015  Q3 2015  Q4 2014  Qtr/Qtr  Year/Year 
Gain on sale of loans                    
Consumer $327  $705  $226   -54%  45%
Mortgage  210   318   422   -34%  -50%
Total  537   1,023   648   -48%  -17%
                     

The increase in noninterest income from the fourth quarter of 2014 resulted primarily from the $0.3 million increase in other operating income, offset by a $0.1 million decrease in gain on sale loans. The increase in other operating income is mainly attributable to the $0.3 million increase in servicing fees, a direct result of the growth in the Company's servicing portfolio from consumer loan sales.

Core noninterest income, which excludes the gains and losses on the sales of investment securities and other real estate owned, was $1.5 million for the fourth quarter of 2015, a decrease of $0.5 million, or 23.5%, compared to $2.0 million for the third quarter of 2015, and an increase of $0.3 million, or 24.0%, compared to $1.2 million for the fourth quarter of 2014.

Noninterest Expense

Noninterest expense for the fourth quarter of 2015 totaled $7.2 million, an increase of $0.2 million, or 3.1%, compared to the third quarter of 2015, and an increase of $0.3 million, or 4.0%, compared to the fourth quarter of 2014. The increase in noninterest expense from the fourth quarter of 2014 is primarily due to the $0.5 million increase in salaries and employee benefits and the $0.1 million increase in both other operating expenses and professional fees, all of which are mainly attributable to the continued growth of the Company. Furthermore, the Company provides health insurance to its employees through a self-insured plan and realized unfavorable claims experience during the fourth quarter of 2015 resulting in additional benefits expense of approximately $0.3 million.

During the fourth quarter of 2015, the Company incurred nonrecurring exit costs of approximately $145,000. These costs included severance, which contributed to the $0.5 million increase in salaries and benefits discussed above, and other expenses related to the exit from the indirect auto loan origination business, announced in November 2015. Core noninterest expense, which excludes the impact of these nonrecurring costs, was $7.1 million for the fourth quarter of 2015, an increase of $0.5 million, or 6.7%, compared to $6.6 million in the third quarter of 2015, and an increase of $0.8 million, or 13.1%, compared to the fourth quarter of 2014.

Basic Earnings Per Share and Diluted Earnings Per Share

The Company reported both basic and diluted earnings per share of $0.20 for the three months ended December 31, 2015, a decrease of $0.08 and $0.07, respectively, compared to basic and diluted earnings per share of $0.28 and $0.27, respectively, for the three months ended December 31, 2014.

Core basic and diluted earnings per share were $0.21 for the three months ended December 31, 2015, an increase of $0.02 compared to core basic and diluted earnings per share of $0.19 for the three months ended December 31, 2014.

Taxes

The Company recorded income tax expense of $0.7 million for the quarter ended December 31, 2015, which equates to an effective tax rate of 33.9%.

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 December 31, 2015, the Company had 168 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) 
  
         
  December 31, 2015  December 31, 2014 
  (Unaudited)     
ASSETS        
Cash and due from banks $6,313  $5,519 
Interest-bearing balances due from other banks  14,472   13,493 
Federal funds sold  181   500 
Cash and cash equivalents  20,966   19,512 
         
Available for sale securities at fair value (amortized cost of $113,828 and $69,838, respectively)  113,371   70,299 
Held to maturity securities at amortized cost (estimated fair value of $26,258 and $22,301, respectively)  26,408   22,519 
Loans held for sale  80,509   103,396 
Loans, net of allowance for loan losses of $6,128 and $4,630, respectively  739,313   618,160 
Other equity securities  5,835   5,566 
Bank premises and equipment, net of accumulated depreciation of $5,368 and $3,964, respectively  30,630   28,538 
Other real estate owned, net  725   2,735 
Accrued interest receivable  2,831   2,435 
Deferred tax asset  1,915   1,097 
Goodwill and other intangible assets  3,175   3,216 
Other assets  5,877   1,881 
Total assets $1,031,555  $879,354 
         
LIABILITIES        
Deposits        
Noninterest-bearing $90,447  $70,217 
Interest-bearing  646,959   557,901 
Total deposits  737,406   628,118 
Advances from Federal Home Loan Bank  127,497   125,785 
Repurchase agreements  39,099   12,293 
Note payable  3,609   3,609 
Accrued taxes and other liabilities  14,594   6,165 
Total liabilities  922,205   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; 7,264,282 and 7,262,085 shares outstanding, respectively  7,305   7,264 
Treasury stock  (634)  (23)
Surplus  84,692   84,213 
Retained earnings  18,650   11,809 
Accumulated other comprehensive (loss) income  (663)  121 
Total stockholders' equity  109,350   103,384 
Total liabilities and stockholders' equity $1,031,555  $879,354 
         



INVESTAR HOLDING CORPORATION 
CONSOLIDATED STATEMENTS OF OPERATIONS 
(Amounts in thousands, except share data) 
(Unaudited) 
                 
  Three months ended  Twelve months ended 
  December 31,  December 31, 
  2015  2014  2015  2014 
INTEREST INCOME                
Interest and fees on loans $9,220  $8,384  $35,076  $29,979 
Interest on investment securities  631   422   2,189   1,339 
Other interest income  22   16   75   51 
Total interest income  9,873   8,822   37,340   31,369 
                 
INTEREST EXPENSE                
Interest on deposits  1,401   1,135   5,250   4,273 
Interest on borrowings  245   110   632   402 
Total interest expense  1,646   1,245   5,882   4,675 
Net interest income  8,227   7,577   31,458   26,694 
                 
Provision for loan losses  365   430   1,865   1,628 
Net interest income after provision for loan losses  7,862   7,147   29,593   25,066 
                 
NONINTEREST INCOME                
Service charges on deposit accounts  94   84   380   305 
Gain on sale of investment securities, net  21   111   489   340 
Gain (loss) on sale of real estate owned, net  36   (7)  (105)  230 
Gain on sale of loans, net  537   648   4,368   3,449 
Fee income on loans held for sale, net  208   79   979   329 
Other operating income  675   410   2,233   1,207 
Total noninterest income  1,571   1,325   8,344   5,860 
Income before noninterest expense  9,433   8,472   37,937   30,926 
                 
NONINTEREST EXPENSE                
Depreciation and amortization  365   353   1,446   1,326 
Salaries and employee benefits  4,358   3,830   16,398   14,565 
Occupancy  296   204   951   833 
Data processing  409   349   1,508   1,289 
Marketing  93   89   248   329 
Professional fees  305   166   1,075   599 
Impairment on investment in tax credit entity  -   690   54   690 
Other operating expenses  1,408   1,274   5,673   4,753 
Total noninterest expense  7,234   6,955   27,353   24,384 
Income before income tax expense  2,199   1,517   10,584   6,542 
Income tax expense (benefit)  745   (491)  3,511   1,145 
Net income $1,454  $2,008  $7,073  $5,397 
                 
EARNINGS PER SHARE                
Basic earnings per share $0.20  $0.28  $0.98  $0.98 
Diluted earnings per share $0.20  $0.27  $0.97  $0.93 
Cash dividends declared per common share $0.01  $0.01  $0.03  $0.04 
                 



INVESTAR HOLDING CORPORATION 
EARNINGS PER COMMON SHARE 
(Amounts in thousands, except share data) 
(Unaudited) 
  
  Three months ended
December 31,
  Twelve months ended
December 31,
 
  2015  2014  2015  2014 
Net income available to common shareholders $1,454  $2,008  $7,073  $5,397 
Weighted average number of common shares outstanding -                
Used in computation of basic earnings per common share  7,200,526   7,213,416   7,214,045   5,533,514 
Effect of dilutive securities:                
Restricted stock  12,564   33,377   5,861   41,467 
Stock options  21,150   22,811   21,150   22,811 
Stock warrants  16,952   141,900   16,952   179,510 
Weighted average number of common shares outstanding -                
Plus effect of dilutive securities used in computation of diluted earnings per common share  7,251,192   7,411,504   7,258,008   5,777,302 
Basic earnings per share $0.20  $0.28  $0.98  $0.98 
Diluted earnings per share $0.20  $0.27  $0.97  $0.93 
                 



INVESTAR HOLDING CORPORATION 
SUMMARY FINANCIAL INFORMATION 
(Amounts in thousands, except share data) 
(Unaudited) 
                     
  Q4 2015  Q3 2015  Q4 2014  Qtr/Qtr  Year/Year 
EARNINGS DATA                    
Total interest income $9,873  $9,480  $8,822   4.1%  11.9%
Total interest expense  1,646   1,528   1,245   7.7%  32.2%
Net interest income  8,227   7,952   7,577   3.5%  8.6%
Provision for loan losses  365   400   430   -8.8%  -15.1%
Total noninterest income  1,571   2,167   1,325   -27.5%  18.6%
Total noninterest expense  7,234   7,013   6,955   3.2%  4.0%
Income before income taxes  2,199   2,706   1,517   -18.7%  45.0%
Income tax expense  745   850   (491)  -12.4%  -251.7%
Net income $1,454  $1,856  $2,008   -21.7%  -27.6%
                     
AVERAGE BALANCE SHEET DATA                    
Total assets $974,820  $944,234  $826,369   3.2%  18.0%
Total interest-earning assets  923,662   895,208   782,868   3.2%  18.0%
Total loans  739,809   692,196   621,565   6.9%  19.0%
Total gross loans  793,830   777,080   675,305   2.2%  17.6%
Total interest-bearing deposits  645,247   634,232   553,603   1.7%  16.6%
Total interest-bearing liabilities  759,068   738,612   641,611   2.8%  18.3%
Total deposits  741,201   721,657   628,837   2.7%  17.9%
Total shareholders' equity  108,998   107,795   102,781   1.1%  6.0%
                     
PER SHARE DATA                    
Earnings:                    
Basic earnings per share $0.20  $0.26  $0.28   -22.3%  -27.9%
Diluted earnings per share  0.20   0.26   0.27   -22.9%  -25.7%
Core earnings:                    
Basic earnings per share(1)  0.21   0.26   0.19   -19.2%  8.6%
Diluted earnings per share(1)  0.21   0.26   0.19   -17.8%  11.5%
Book value per share  15.05   14.88   14.24   1.2%  5.7%
Tangible book value per share(1)  14.62   14.45   13.79   1.1%  6.0%
Common shares outstanding  7,264,282   7,264,261   7,262,085   0.0%  0.0%
                     
PERFORMANCE RATIOS                    
Return on average assets  0.59%  0.78%  0.96%  -24.4%  -38.5%
Core return on average assets(1)  0.62%  0.80%  0.67%  -23.1%  -8.1%
Return on average equity  5.29%  6.83%  7.75%  -22.5%  -31.7%
Core return on average equity(1)  5.50%  7.01%  5.38%  -21.5%  2.2%
Net interest margin  3.53%  3.52%  3.84%  0.3%  -8.1%
Net interest income to average assets  3.35%  3.34%  3.64%  0.3%  -8.0%
Noninterest expense to average assets  2.94%  2.95%  3.34%  -0.3%  -12.0%
Efficiency ratio (1)  73.83%  69.31%  78.13%  6.5%  -5.5%
Core efficiency ratio (1)  72.77%  66.88%  70.38%  8.8%  3.4%
Dividend payout ratio  4.26%  3.19%  2.51%  33.5%  69.7%
Net charge-offs to average loans  0.02%  0.03%  0.02%  -33.3%  0.0%
                     



INVESTAR HOLDING CORPORATION 
SUMMARY FINANCIAL INFORMATION 
(Amounts in thousands, except share data) 
(Unaudited) 
                     
  Q4 2015  Q3 2015  Q4 2014  Qtr/Qtr  Year/Year 
ASSET QUALITY RATIOS                    
Nonperforming assets to total assets  0.30%  0.40%  0.69%  -25.0%  -56.5%
Nonperforming loans to total loans  0.32%  0.37%  0.54%  -13.5%  -40.7%
Allowance for loan losses to total loans  0.82%  0.83%  0.74%  -1.2%  10.8%
Allowance for loan losses to nonperforming loans  254.16%  226.43%  138.61%  12.2%  83.4%
                     
CAPITAL RATIOS(2)                    
Investar Holding Corporation:                    
Total equity to total assets  10.60%  11.53%  11.76%  -8.1%  -9.9%
Tangible equity to tangible assets  10.32%  11.23%  11.43%  -8.1%  -9.7%
Tier 1 leverage ratio  11.39%  11.61%  12.61%  -1.8%  -9.6%
Common equity tier 1 capital ratio  11.67%  12.69% NA   -8.0% NA 
Tier 1 capital ratio  12.05%  13.11%  13.79%  -8.0%  -12.5%
Total capital ratio  12.38%  13.82%  14.41%  -7.9%  -11.7%
Investar Bank:                    
Tier 1 leverage ratio  11.07%  11.25%  9.00%  -1.6%  23.0%
Common equity tier 1 capital ratio  11.71%  12.71% NA   -7.9% NA 
Tier 1 capital ratio  11.71%  12.71%  9.86%  -7.9%  18.8%
Total capital ratio  12.38%  13.42%  10.48%  -7.7%  18.1%
                     
                     
(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 December 31, 2015. 
  



INVESTAR HOLDING CORPORATION 
CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS 
(Amounts in thousands) 
(Unaudited) 
  
  Three months ended December 31, 
  2015  2014 
  Average
Balance
  Interest
Income/
Expense

  Yield/ Rate  Average
Balance
  Interest
Income/
Expense

  Yield/ Rate 
Assets                        
Interest-earning assets:                        
Loans $793,830  $9,220   4.61% $675,305  $8,384   4.93%
Securities:                        
Taxable  93,713   527   2.23   79,354   322   1.61 
Tax-exempt  17,174   104   2.40   11,508   100   3.45 
Interest-bearing balances with banks  18,945   22   0.46   16,701   16   0.38 
Total interest-earning assets  923,662   9,873   4.24   782,868   8,822   4.47 
Cash and due from banks  5,656           5,306         
Intangible assets  3,178           3,220         
Other assets  48,374           39,427         
Allowance for loan losses  (6,050)          (4,452)        
Total assets $974,820          $826,369         
                         
Liabilities and shareholders' equity                        
Interest-bearing liabilities:                        
Deposits:                        
Interest-bearing demand $233,748  $369   0.63% $189,758  $294   0.61%
Savings deposits  54,482   92   0.67   54,192   92   0.67 
Time deposits  357,017   940   1.04   309,653   749   0.96 
Total interest-bearing deposits  645,247   1,401   0.86   553,603   1,135   0.81 
Short-term borrowings  84,531   171   0.80   41,816   18   0.17 
Long-term debt  29,290   74   1.00   46,192   92   0.79 
Total interest-bearing liabilities  759,068   1,646   0.86   641,611   1,245   0.77 
Noninterest-bearing deposits  95,954           75,234         
Other liabilities  10,800           6,743         
Stockholders' equity  108,998           102,781         
Total liability and stockholders' equity $974,820          $826,369         
Net interest income/net interest margin     $8,227   3.53%     $7,577   3.84%
                         



INVESTAR HOLDING CORPORATION 
CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS 
(Amounts in thousands) 
(Unaudited) 
                         
  
  Twelve months ended December 31, 
  2015  2014 
  Average
Balance
  Interest
Income/
Expense

  Yield/ Rate  Average
Balance
  Interest
Income/
Expense

  Yield/ Rate 
Assets                        
Interest-earning assets:                        
Loans $754,056  $35,076   4.65% $601,238  $29,979   4.99%
Securities:                        
Taxable  80,516   1,741   2.16   66,384   945   1.42 
Tax-exempt  18,077   448   2.48   12,652   394   3.11 
Interest-bearing balances with banks  18,136   75   0.41   13,060   51   0.39 
Total interest-earning assets  870,785   37,340   4.29   693,334   31,369   4.52 
Cash and due from banks  5,611           5,668         
Intangible assets  3,194           3,235         
Other assets  46,313           36,617         
Allowance for loan losses  (5,636)          (3,877)        
Total assets $920,267          $734,977         
                         
Liabilities and shareholders' equity                        
Interest-bearing liabilities:                        
Deposits:                        
Interest-bearing demand $222,730  $1,402   0.63% $173,715  $1,078   0.62%
Savings deposits  54,240   367   0.68   52,881   361   0.68 
Time deposits  343,638   3,481   1.01   288,837   2,834   0.98 
Total interest-bearing deposits  620,608   5,250   0.85   515,433   4,273   0.83 
Short-term borrowings  60,970   296   0.49   28,349   54   0.19 
Long-term debt  36,712   336   0.92   39,376   348   0.88 
Total interest-bearing liabilities  718,290   5,882   0.82   583,158   4,675   0.80 
Noninterest-bearing deposits  85,635           67,639         
Other liabilities  9,256           4,809         
Stockholders' equity  107,086           79,371         
Total liability and stockholders' equity $920,267          $734,977         
Net interest income/net interest margin     $31,458   3.61%     $26,694   3.85%
                         



INVESTAR HOLDING CORPORATION 
RECONCILIATION OF NON GAAP FINANCIAL MEASURES 
(Amounts in thousands, except share data) 
(Unaudited) 
             
             
  December 31,  September 30, 
  2015  2014  2015 
Tangible common equity            
Total stockholder's equity $109,350  $103,384  $108,128 
Adjustments:            
Goodwill  2,684   2,684   2,684 
Core deposit intangible  491   532   501 
Tangible common equity $106,175  $100,168  $104,943 
Tangible assets            
Total assets $1,031,555  $879,354  $937,747 
Adjustments:            
Goodwill  2,684   2,684   2,684 
Core deposit intangible  491   532   501 
Tangible assets $1,028,380  $876,138  $934,562 
             
Common shares outstanding  7,264,282   7,262,085   7,264,261 
Tangible equity to tangible assets  10.32%  11.43%  11.23%
Book value per common share $15.05  $14.24  $14.88 
Tangible book value per common share  14.62   13.79   14.45 
             



INVESTAR HOLDING CORPORATION 
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES 
(Amounts in thousands, except share data) 
(Unaudited) 
  
  Three months ended 
  December 31,  September 30, 
  2015  2014  2015 
Net interest income(a)$8,227  $7,577  $7,952 
Provision for loan losses  365   430   400 
Net interest income after provision for loan losses  7,862   7,147   7,552 
             
Noninterest income(b) 1,571   1,325   2,167 
Gain on sale of investment securities  (21)  (111)  (334)
(Gain) loss on sale of other real estate owned, net  (36)  7   147 
Core noninterest income(d) 1,514   1,221   1,980 
             
Core earnings before noninterest expense  9,376   8,368   9,532 
             
Total noninterest expense(c) 7,234   6,955   7,013 
Impairment on investment in tax credit entity  -   (690)  (54)
Restructuring/exit costs:            
Severance  (76)  -   (150)
Legal and consulting  -   -   (61)
Other  (69)  -   (105)
Core noninterest expense(f) 7,089   6,265   6,643 
             
Core earnings before income tax expense  2,287   2,103   2,889 
Core income tax expense (1)  775   708   985 
Core earnings $1,512  $1,395  $1,904 
             
Core basic earnings per share $0.21  $0.19  $0.26 
             
Diluted earnings per share (GAAP) $0.20  $0.27  $0.26 
Gain on sale of investment securities  -   (0.01)  (0.04)
Loss on sale of other real estate owned, net  -   -   0.01 
Impairment on investment in tax credit entity  -   0.06   - 
Tax credit related to historical tax credit project  -   (0.13)  - 
Restructuring/exit costs  0.01   -   0.03 
Core diluted earnings per share $0.21  $0.19  $0.26 
             
Efficiency ratio(c) / (a+b) 73.83%  78.13%  69.31%
Core efficiency ratio(f) / (a+d) 72.77%  71.21%  66.88%
Core return on average assets (2)  0.62%  0.67%  0.80%
Core return on average equity (2)  5.50%  5.38%  7.01%
Total average assets $974,820  $826,369  $944,234 
Total average stockholders' equity  108,998   102,781   107,795 
             
  
(1) Core income tax expense is calculated using the actual effective tax rate of 33.9% for the three months ended December 31, 2015. The core income tax expense for the three months ended September 30, 2015 and December 31, 2014 is calculated using the core effective tax rates of 34.1% and 33.7%, respectively. 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 
  December 31,  September 30, 
  2015  2014  2015 
Earnings before income tax expense(a)$2,199  $1,517  $2,706 
             
Income tax expense  745   (491)  850 
Income tax credit  -   1,002   72 
Adjusted income tax expense(b) 745   511   922 
             
Core effective tax rate(1)(b) / (a) 33.9%  33.7%  34.1%
             
  
(1) Core effective tax rate is used in the calculation of core income tax expense. 
  



For further information contact: Investar Holding Corporation Chris Hufft Chief Financial Officer (225) 227-2215 Chris.Hufft@investarbank.com
View Comments and Join the Discussion!