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Investar Holding Corporation Announces 2021 Second Quarter Results

·35-min read


Baton Rouge, LA , 07/22/2021 / 17:04, CST/CDT - EQS Newswire - Investar Bank (Nasdaq)


BATON ROUGE, LA / ACCESSWIRE / July 22, 2021 / Investar Holding Corporation ("Investar") (NASDAQ:ISTR), the holding company for Investar Bank, National Association (the "Bank"), today announced financial results for the quarter ended June 30, 2021. Investar reported record net income of $5.7 million, or $0.53 per diluted common share, for the second quarter of 2021, compared to $5.4 million, or $0.51 per diluted common share, for the quarter ended March 31, 2021, and $4.3 million, or $0.39 per diluted common share, for the quarter ended June 30, 2020.

On a non-GAAP basis, core earnings per diluted common share for the second quarter of 2021 were $0.53 compared to $0.49 for the first quarter of 2021 and $0.32 for the second quarter of 2020. Core earnings exclude certain non-operating items including, but not limited to, gain on sale of investment securities, change in the fair value of equity securities, and acquisition expense (refer to the Reconciliation of Non-GAAP Financial Measures tables for a reconciliation of GAAP to non-GAAP metrics).

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

"I am pleased to announce another successful quarter for Investar with record net income of $5.7 million. We are excited to have completed the acquisition of Cheaha Bank and operational conversion in the second quarter. In line with our stated strategy, we continued to reduce our cost of funds by 13 basis points through an improved deposit mix. We expanded our owner-occupied commercial real estate portfolio as we remain focused on relationship banking and growing our commercial portfolio. As the economy recovers from the pandemic, we remain confident in the overall credit quality of our loan portfolio and continue to experience minimal loss from charge-offs. Loan yield improved in the second quarter, however, we did experience compression of our net interest margin due to excess liquidity of approximately $230 million. This excess liquidity will continue to put pressure on our net interest margin as we work to deploy it through loan growth and investment opportunities. Investar continues to invest in improved banking technology as we continue to see a shift in customer behavior with the use of technology. We continue to evaluate our branch network and look for opportunities that will further improve our operating efficiency."

Second Quarter Highlights

 

Investar recorded record net income of $5.7 million for the quarter ended June 30, 2021, compared to net income of $5.4 million for the quarter ended March 31, 2021 and $4.3 million for the quarter ended June 30, 2020.

 

On April 1, 2021, Investar closed its previously announced acquisition of Cheaha Financial Group, Inc. ("Cheaha"), headquartered in Oxford, Alabama, and its wholly-owned subsidiary, Cheaha Bank. As of March 31, 2021, Cheaha had approximately $238 million in assets, $120 million in net loans, and $206 million in total deposits. In the aggregate, Cheaha's shareholders received approximately $41.1 million in cash consideration. On June 18, 2021, Investar completed the operational conversion of Cheaha.

 

Total loans increased $101.9 million, or 5.5%, to $1.95 billion at June 30, 2021, compared to $1.85 billion at March 31, 2021, and increased $133.8 million, or 7.4%, compared to $1.81 billion at June 30, 2020. Excluding loans acquired from Cheaha on April 1, 2021 with a total balance of $120.0 million at June 30, 2021 and PPP loans with a total balance of $73.0 million ($1.7 million acquired from Cheaha), $106.6 million, and $109.5 million at June 30, 2021, March 31, 2021 and June 30, 2020, respectively, total loans increased $17.2 million, or 1.0% (4.0% annualized), compared to March 31, 2021 and increased $52.1 million, or 3.1%, compared to June 30, 2020.

 

The yield on the loan portfolio increased to 4.78% at June 30, 2021 compared to 4.72% at March 31, 2021.

 

Cost of deposits decreased 12 basis points to 0.51% for the quarter ended June 30, 2021 compared to 0.63% for the quarter ended March 31, 2021 and decreased 69 basis points compared to 1.20% for the quarter ended June 30, 2020. Our overall cost of funds decreased 13 and 66 basis points to 0.70% compared to 0.83% and 1.36% for the quarters ended March 31, 2021 and June 30, 2020, respectively.

 

Total deposits increased $250.3 million, or 12.5%, to $2.26 billion at June 30, 2021, compared to $2.01 billion at March 31, 2021, and increased $370.6 million, or 19.6%, compared to $1.89 billion at June 30, 2020. Investar recorded total deposits with a fair value of $207.0 million from its acquisition of Cheaha on April 1, 2021, and the remaining increase is due to organic growth.

 

Noninterest-bearing deposits increased $66.6 million, or 12.9%, to $582.1 million at June 30, 2021, compared to $515.5 million at March 31, 2021 and increased $113.0 million, or 24.1%, compared to $469.1 million at June 30, 2020. Investar acquired approximately $45.4 million in noninterest-bearing deposits from Cheaha, and the remaining increase is due to organic growth. Excluding noninterest-bearing deposits acquired from Cheaha, noninterest-bearing deposits increased $21.3 million, or 4.1%, compared to March 31, 2021 and increased $67.7 million, or 14.4%, compared to June 30, 2020.

 

Deposit mix improved during the second quarter of 2021. Noninterest-bearing deposits as a percentage of total deposits increased to 25.8% at June 30, 2021 compared to 25.6% at March 31, 2021 and 24.8% at June 30, 2020. Time deposits as a percentage of total deposits decreased to 23.4% at June 30, 2021, compared to 24.6% at March 31, 2021 and 35.5% at June 30, 2020.

Loans

Total loans were $1.95 billion at June 30, 2021, an increase of $101.9 million, or 5.5%, compared to March 31, 2021, and an increase of $133.8 million, or 7.4%, compared to June 30, 2020. Excluding the loans acquired from Cheaha on April 1, 2021, or $120.0 million at June 30, 2021, total loans decreased $18.2 million, or 1.0%, compared to March 31, 2021, and increased $13.8 million, or 0.8%, compared to June 30, 2020.

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

 

 

 

 

 

 

 

 

 

 

 

Linked Quarter Change

 

 

Year/Year Change

 

 

Percentage of Total Loans

 

 

 

6/30/2021

 

 

3/31/2021

 

 

6/30/2020

 

 

$

 

 

%

 

 

$

 

 

%

 

 

6/30/2021

 

 

6/30/2020

 

Mortgage loans on real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and development

 

$

213,070

 

 

$

190,816

 

 

$

199,419

 

 

$

22,254

 

 

 

11.7

%

 

$

13,651

 

 

 

6.8

%

 

 

10.9

%

 

 

11.0

%

1-4 Family

 

 

375,690

 

 

 

341,266

 

 

 

326,102

 

 

 

34,424

 

 

 

10.1

 

 

 

49,588

 

 

 

15.2

 

 

 

19.3

 

 

 

18.0

 

Multifamily

 

 

60,309

 

 

 

60,844

 

 

 

60,617

 

 

 

(535

)

 

 

(0.9

)

 

 

(308

)

 

 

(0.5

)

 

 

3.1

 

 

 

3.3

 

Farmland

 

 

22,263

 

 

 

24,145

 

 

 

28,845

 

 

 

(1,882

)

 

 

(7.8

)

 

 

(6,582

)

 

 

(22.8

)

 

 

1.1

 

 

 

1.6

 

Commercial real estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owner-occupied

 

 

438,590

 

 

 

399,393

 

 

 

371,783

 

 

 

39,197

 

 

 

9.8

 

 

 

66,807

 

 

 

18.0

 

 

 

22.5

 

 

 

20.5

 

Nonowner-occupied

 

 

445,125

 

 

 

430,487

 

 

 

411,776

 

 

 

14,638

 

 

 

3.4

 

 

 

33,349

 

 

 

8.1

 

 

 

22.9

 

 

 

22.7

 

Commercial and industrial

 

 

370,203

 

 

 

380,534

 

 

 

390,085

 

 

 

(10,331

)

 

 

(2.7

)

 

 

(19,882

)

 

 

(5.1

)

 

 

19.0

 

 

 

21.5

 

Consumer

 

 

22,570

 

 

 

18,485

 

 

 

25,344

 

 

 

4,085

 

 

 

22.1

 

 

 

(2,774

)

 

 

(10.9

)

 

 

1.2

 

 

 

1.4

 

Total loans

 

$

1,947,820

 

 

$

1,845,970

 

 

$

1,813,971

 

 

$

101,850

 

 

 

5.5

%

 

$

133,849

 

 

 

7.4

%

 

 

100

%

 

 

100

%

In response to the COVID-19 pandemic, in the first quarter of 2020, the Bank instituted a 90-day loan deferral program for customers impacted by the pandemic. As of June 30, 2021, the balance of loans participating in the 90-day deferral program was approximately $0.3 million, or 0.01% of the total loan portfolio, compared to $11.2 million, or 0.6% of the total loan portfolio, at March 31, 2021. As 90-day loan deferrals have expired, most customers have returned to their regular payment schedules.

In the second quarter of 2020, the Bank began participating as a lender in the Paycheck Protection Program ("PPP") as established by the CARES Act. The PPP loans are generally 100% guaranteed by the SBA ("Small Business Administration"), have an interest rate of 1%, and are eligible to be forgiven based on certain criteria, with the SBA remitting any applicable forgiveness amount to the lender. At June 30, 2021, the balance of the Bank's PPP loans was $73.0 million, compared to $106.6 million at March 31, 2021 and $109.5 million at June 30, 2020. Eighty-seven percent of the total number of PPP loans we have originated have principal balances of $150,000 or less. At June 30, 2021, approximately 57% of the total balance of PPP loans originated have been forgiven by the SBA or paid off by the customer. Excluding loans acquired from Cheaha on April 1, 2021 with a total balance of $120.0 million at June 30, 2021 and PPP loans with a total balance of $73.0 million ($1.7 million acquired from Cheaha), $106.6 million, and $109.5 million at June 30, 2021, March 31, 2021 and June 30, 2020, respectively, total loans increased $17.2 million, or 1.0% (4.0% annualized), compared to March 31, 2021 and increased $52.1 million, or 3.1%, compared to June 30, 2020.

We experienced the greatest loan growth in the owner-occupied commercial real estate portfolio for the quarter ended June 30, 2021 compared to March 31, 2021 as we remain focused on relationship banking and growing our commercial loan portfolios. We acquired approximately $7.7 million in owner-occupied commercial real estate loans from Cheaha, and the remaining $31.5 million increase is due to organic loan growth.

At June 30, 2021, Investar's total business lending portfolio, which consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans, was $808.8 million, an increase of $28.9 million, or 3.7%, compared to the business lending portfolio of $779.9 million at March 31, 2021, and an increase of $46.9 million, or 6.2%, compared to the business lending portfolio of $761.9 million at June 30, 2020. The increase in the business lending portfolio compared to March 31, 2021 is primarily due to the acquisition of Cheaha, which added approximately $22.3 million in loans. The remaining growth of $6.6 million is due to the growth in the owner-occupied commercial real estate portfolio, as the commercial and industrial loan portfolio decreased during the period driven by payoffs of PPP loans. The increase in the business lending portfolio at June 30, 2021 compared to June 30, 2020 is primarily due to the growth in the owner-occupied commercial real estate portfolio.

Consumer loans totaled $22.6 million at June 30, 2021, an increase of $4.1 million, or 22.1%, compared to $18.5 million at March 31, 2021, and a decrease of $2.8 million, or 10.9%, compared to $25.3 million at June 30, 2020. The increase in consumer loans compared to March 31, 2021 is primarily attributable to the acquisition of Cheaha, which added approximately $6.1 million in consumer loans at June 30, 2021. The decrease in consumer loans compared to June 30, 2020 is mainly attributable to the scheduled paydowns of the indirect auto lending portfolio and is consistent with our business strategy.

Our loan portfolio includes loans to businesses in certain industries that may be more significantly affected by the pandemic than others. These loans, including loans related to oil and gas, food services, hospitality, and entertainment, represent approximately 6.4% of our total portfolio, or 5.9% excluding PPP loans, at June 30, 2021, compared to 6.8% of our total portfolio, or 5.7% excluding PPP loans, at March 31, 2021 and 6.8% of our total portfolio, or 5.8% excluding PPP loans, at June 30, 2020 as shown in the table below.

Industry

 

Percentage of Loan Portfolio June 30, 2021

 

 

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

 

 

Percentage of Loan Portfolio March 31, 2021

 

 

Percentage of Loan Portfolio March 31, 2021 (excluding PPP loans)

 

 

Percentage of Loan Portfolio June 30, 2020

 

 

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

 

Oil and gas

 

 

2.7

%

 

 

2.5

%

 

 

3.2

%

 

 

2.4

%

 

 

3.5

%

 

 

2.7

%

Food services

 

 

2.9

 

 

 

2.6

 

 

 

2.8

 

 

 

2.5

 

 

 

2.4

 

 

 

2.2

 

Hospitality

 

 

0.4

 

 

 

0.4

 

 

 

0.4

 

 

 

0.4

 

 

 

0.4

 

 

 

0.4

 

Entertainment

 

 

0.4

 

 

 

0.4

 

 

 

0.4

 

 

 

0.4

 

 

 

0.5

 

 

 

0.5

 

Total

 

 

6.4

%

 

 

5.9

%

 

 

6.8

%

 

 

5.7

%

 

 

6.8

%

 

 

5.8

%

Credit Quality

Nonperforming loans were $20.9 million, or 1.07% of total loans, at June 30, 2021, an increase of $6.0 million compared to $14.9 million, or 0.81% of total loans, at March 31, 2021, and an increase of $7.8 million compared to $13.1 million, or 0.72% of total loans, at June 30, 2020. The increase in nonperforming loans compared to March 31, 2021 is mainly attributable to two loan relationships totaling $5.7 million at June 30, 2021. Of the $5.7 million, $2.9 million is secured by real estate. Included in nonperforming loans are acquired loans with a balance of $6.2 million at June 30, 2021, or 30% of nonperforming loans.

The allowance for loan losses was $20.4 million, or 97.8% and 1.05% of nonperforming and total loans, respectively, at June 30, 2021, compared to $20.4 million, or 137.3% and 1.11%, respectively, at March 31, 2021, and $16.7 million, or 127.6% and 0.92%, respectively, at June 30, 2020.

The provision for loan losses was $0.1 million for the quarter ended June 30, 2021 compared to $0.4 million and $2.5 million for the quarters ended March 31, 2021 and June 30, 2020, respectively. Additional provision for loan losses was recorded in 2020 primarily as a result of the deterioration of market conditions which have been adversely affected by the COVID-19 pandemic. The Bank continues to assess the impact the pandemic may have on its loan portfolio to determine the need for additional reserves.

Deposits

Total deposits at June 30, 2021 were $2.26 billion, an increase of $250.3 million, or 12.5%, compared to $2.01 billion at March 31, 2021, and an increase of $370.6 million, or 19.6%, compared to $1.89 billion at June 30, 2020. Investar acquired approximately $207.0 million in deposits from Cheaha at the time of acquisition on April 1, 2021.

The COVID-19 pandemic has created a significant amount of excess liquidity in the market, and, as a result, we have experienced large increases in both noninterest and interest-bearing demand deposits, and in money market deposit accounts and savings accounts compared to June 30, 2020. The Bank utilized $100.1 million in brokered deposits in the second quarter of 2021 and $80.0 million in the first quarter of 2021, which are used to satisfy the required borrowings under its interest rate swap agreements, due to more favorable pricing. Our deposit mix has improved and reflects our consistent focus on relationship banking and growing our commercial relationships, as well as the effects of the pandemic on consumer and business spending.

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

 

 

 

 

 

 

 

 

 

 

 

Linked Quarter Change

 

 

Year/Year Change

 

 

Percentage of 
Total Deposits

 


 

 

6/30/2021

 

 

3/31/2021

 

 

6/30/2020

 

 

$

 

 

%

 

 

$

 

 

%

 

 

6/30/2021

 

 

6/30/2020

 

Noninterest-bearing demand deposits

 

$

582,109

 

 

$

515,487

 

 

$

469,095

 

 

$

66,622

 

 

 

12.9

%

 

$

113,014

 

 

 

24.1

%

 

 

25.8

%

 

 

24.8

%

Interest-bearing demand deposits

 

 

630,829

 

 

 

564,128

 

 

 

437,821

 

 

 

66,701

 

 

 

11.8

 

 

 

193,008

 

 

 

44.1

 

 

 

27.9

 

 

 

23.2

 

Brokered deposits

 

 

100,117

 

 

 

80,015

 

 

 

-

 

 

 

20,102

 

 

 

25.1

 

 

 

100,117

 

 

 

-

 

 

 

4.4

 

 

 

-

 

Money market deposit accounts

 

 

243,058

 

 

 

200,744

 

 

 

183,371

 

 

 

42,314

 

 

 

21.1

 

 

 

59,687

 

 

 

32.5

 

 

 

10.8

 

 

 

9.7

 

Savings accounts

 

 

174,385

 

 

 

154,131

 

 

 

129,157

 

 

 

20,254

 

 

 

13.1

 

 

 

45,228

 

 

 

35.0

 

 

 

7.7

 

 

 

6.8

 

Time deposits

 

 

529,668

 

 

 

495,375

 

 

 

670,144

 

 

 

34,293

 

 

 

6.9

 

 

 

(140,476

)

 

 

(21.0

)

 

 

23.4

 

 

 

35.5

 

Total deposits

 

$

2,260,166

 

 

$

2,009,880

 

 

$

1,889,588

 

 

$

250,286

 

 

 

12.5

%

 

$

370,578

 

 

 

19.6

%

 

 

100.0

%

 

 

100.0

%

Noninterest-bearing and interest-bearing demand deposits experienced the largest increases compared to March 31, 2021 and June 30, 2020. These increases were primarily driven by government stimulus payments, reduced spending by consumer and business customers related to the COVID-19 pandemic, and increases in PPP borrowers' deposit accounts. We believe these factors may be temporary depending on the future economic effects of the COVID-19 pandemic.

Management made a strategic decision to either reprice or run-off higher yielding time deposits and other interest-bearing deposit products during 2020 and the first and second quarters of 2021, which contributed to our decreasing cost of deposits compared to the quarters ended March 31, 2021 and June 30, 2020. The increase in time deposits at June 30, 2021 compared to March 31, 2021 is primarily due to the acquisition of Cheaha.

Net Interest Income

Net interest income for the second quarter of 2021 totaled $21.2 million, an increase of $1.5 million, or 7.8%, compared to the first quarter of 2021, and an increase of $2.8 million, or 15.4%, compared to the second quarter of 2020. Included in net interest income for the quarters ended June 30, 2021, March 31, 2021 and June 30, 2020 is $0.5 million, $0.1 million, and $0.4 million of interest income accretion from the acquisition of loans. Also included in net interest income for the quarters ended June 30, 2021 and March 31, 2021 are interest recoveries of $25,000 and $17,000, respectively, on acquired loans.

Investar's net interest margin was 3.48% for the quarter ended June 30, 2021, compared to 3.64% for the quarter ended March 31, 2021 and 3.46% for the quarter ended June 30, 2020. The decrease in net interest margin for the quarter ended June 30, 2021 compared to the quarter ended March 31, 2021 was driven by excess liquidity. The average balance of interest-bearing balances with banks for the quarter ended June 30, 2021, as shown on our net interest margin table, increased $157.2 million compared to the quarter ended March 31, 2021, and resulted in a 23 basis point decrease in the net interest margin. This decrease in net interest margin was partially offset by a six basis point increase in the yield on the loan portfolio and a 13 basis point decrease in the cost of funds for the quarter ended June 30, 2021 compared to the quarter ended March 31, 2021. The increase in net interest margin for the quarter ended June 30, 2021 compared to the quarter ended June 30, 2020 was driven by a 66 basis point decrease in the cost of funds partially offset by a 49 basis point decrease in the yield on interest-earning assets.

The yield on interest-earning assets was 4.00% for the quarter ended June 30, 2021, compared to 4.26% for the quarter ended March 31, 2021 and 4.49% for the quarter ended June 30, 2020. The decrease in the yield on interest-earning assets compared to the quarter ended June 30, 2020 was driven by lower loan yields and a large decrease in the yield earned on investment securities. In response to the pandemic, during March 2020, the Federal Reserve reduced the federal funds rate 150 basis points to 0 to 0.25 percent, which has affected the yields that we earn on our interest-earning assets. In addition, the PPP loans originated have a contractual interest rate of 1% and origination fees based on the loan amount, which impacts the yield on our loan portfolio.

Exclusive of PPP loans, which had an average balance of $96.0 million and related interest and fee income of $1.2 million for the quarter ended June 30, 2021, compared to an average balance of $97.3 million and related interest and fee income of $1.4 million for the quarter ended March 31, 2021 and an average balance of $78.9 million and related interest and fee income of $0.8 million for the quarter ended June 30, 2020, adjusted net interest margin was 3.41% for the quarter ended June 30, 2021, compared to an adjusted net interest margin of 3.54% for the quarter ended March 31, 2021 and 3.44% for the quarter ended June 30, 2020. Included in PPP interest and fee income for the quarters ended June 30, 2021 and March 31, 2021 is $0.6 million and $0.7 million, respectively, of accelerated fee income recognized due to the forgiveness or pay-off of PPP loans. Refer to the Reconciliation of Non-GAAP Financial Measures table for a reconciliation of GAAP to non-GAAP metrics.

Exclusive of the interest income accretion from the acquisition of loans, interest recoveries, and accelerated fee income recognized due to the forgiveness or pay-off of PPP loans, all discussed above, adjusted net interest margin decreased to 3.29% for the quarter ended June 30, 2021, compared to 3.49% for the quarter ended March 31, 2021, and 3.39% for the quarter ended June 30, 2020. The adjusted yield on interest-earning assets was 3.82% for the quarter ended June 30, 2021 compared to 4.10% and 4.43% for the quarters ended March 31, 2021 and June 30, 2020, respectively. Refer to the Reconciliation of Non-GAAP Financial Measures table for a reconciliation of GAAP to non-GAAP metrics.

The cost of deposits decreased 12 basis points to 0.51% for the quarter ended June 30, 2021 compared to 0.63% for the quarter ended March 31, 2021 and decreased 69 basis points compared to 1.20% for the quarter ended June 30, 2020. The decrease in the cost of deposits compared to the quarters ended March 31, 2021 and June 30, 2020 reflects the decrease in rates paid for all categories of interest-bearing deposits.

The overall costs of funds for the quarter ended June 30, 2021 decreased 13 basis points to 0.70% compared to 0.83% for the quarter ended March 31, 2021 and decreased 66 basis points compared to 1.36% for the quarter ended June 30, 2020. The decrease in the cost of funds for the quarter ended June 30, 2021 compared to the quarters ended March 31, 2021 and June 30, 2020 resulted from both lower cost of deposits and lower average balances of short-term borrowings, the costs of which are driven by the Federal Reserve's federal funds rates.

Noninterest Income

Noninterest income for the second quarter of 2021 totaled $4.1 million, an increase of $1.7 million, or 72.6%, compared to the first quarter of 2021 and an increase of $0.2 million, or 3.8%, compared to the second quarter of 2020. The increase in noninterest income compared to the quarter ended March 31, 2021 was mainly driven by a $1.1 million increase in the gain on sale of investment securities. The increase in noninterest income compared to the quarter ended June 30, 2020 is mainly attributable to a $0.5 million increase in the gain on sale of investment securities and $0.2 million increases in service charges on deposit accounts and interchange fees, partially offset by a $0.7 million decrease in other operating income, compared to the quarter ended June 30, 2020. The decrease in other operating income compared to the quarter ended June 30, 2020 was driven by a $0.6 million decrease in derivative fee income.

Noninterest Expense

Noninterest expense for the second quarter of 2021 totaled $18.0 million, an increase of $3.2 million, or 21.3%, compared to the first quarter of 2021, and an increase of $3.5 million, or 24.0%, compared to the second quarter of 2020. The increase in noninterest expense for the quarter ended June 30, 2021 compared to the quarter ended March 31, 2021 was driven by a $1.3 million increase in acquisition expense and a $1.2 million increase in salaries and benefits, both of which are primarily related to the acquisition of Cheaha. In addition, the Bank is self-insured for employee health insurance and experienced two unfavorable health claims resulting in an increase of $0.3 million in employee benefits compared to the quarter ended March 31, 2021.

The increase in noninterest expense for the second quarter of 2021 compared to the second quarter of 2020 is primarily attributable to the $1.4 million and $1.3 million increases in acquisition expense and salaries and employee benefits, respectively. The increase in salaries and employee benefits is driven by an increase in employees following the acquisition of Cheaha, increase in health insurance claims, and deferred compensation costs.

Taxes

Investar recorded income tax expense of $1.5 million for the quarter ended June 30, 2021, which equates to an effective tax rate of 20.7%, a decrease from the effective tax rate of 21.1% at March 31, 2021 and increase from the effective tax rate of 19.2% for the quarter ended June 30, 2020.

Basic and Diluted Earnings Per Common Share

Investar reported basic and diluted earnings per common share of $0.54 and $0.53, respectively, for the quarter ended June 30, 2021, an increase of $0.03 and $0.02, respectively, compared to basic and diluted earnings per common share of $0.51 for the quarter ended March 31, 2021, and an increase of $0.15 and $0.14, respectively, compared to basic and diluted earnings per common share of $0.39 for the quarter ended June 30, 2020.

About Investar Holding Corporation

Investar, headquartered in Baton Rouge, Louisiana, provides full banking services, excluding trust services, through its wholly-owned banking subsidiary, Investar Bank, National Association. The Bank currently operates 34 branch locations serving Louisiana, Texas, and Alabama. At June 30, 2021, the Bank had 357 full-time equivalent employees and total assets of $2.7 billion.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States of America, or GAAP. These measures and ratios include "tangible common equity," "tangible assets," "tangible equity to tangible assets," "tangible book value per common share," "core noninterest income," "core earnings before noninterest expense," "core noninterest expense," "core 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." We also present certain average loan, yield, net interest income and net interest margin data adjusted to show the effects of excluding PPP loans, interest income accretion from the acquisition of loans, and interest recoveries. Management believes these non-GAAP financial measures provide information useful to investors in understanding Investar's financial results, and Investar believes that its presentation, together with the accompanying reconciliations, provide a more complete understanding of factors and trends affecting Investar's business and allow investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and Investar strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. A reconciliation of the non-GAAP financial measures disclosed in this press release to the comparable GAAP financial measures is included at the end of the financial statement tables.

Forward-Looking and Cautionary Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect Investar's current views with respect to, among other things, future events and financial performance. Investar generally identifies forward-looking statements by terminology such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "could," "should," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates," or the negative version of those words or other comparable words. In addition, any of the following matters related to the pandemic may impact our financial results in future periods, and such impacts may be material depending on the length and severity of the pandemic and government and societal responses to it:

 

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

 

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

 

the value of collateral securing our loans may deteriorate; and

 

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

Any forward-looking statements contained in this press release are based on the historical performance of Investar and its subsidiaries or on Investar's current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by Investar that the future plans, estimates or expectations by Investar will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to Investar's operations, financial results, financial condition, business prospects, growth strategy and liquidity. If one or more of these or other risks or uncertainties materialize, or if Investar's underlying assumptions prove to be incorrect, Investar's actual results may vary materially from those indicated in these statements. Investar does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. These factors include, but are not limited to, the following, any one or more of which could materially affect the outcome of future events:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

the extent of continuing client demand for the high level of personalized service that is a key element of our banking approach as well as our ability to execute our strategy generally;

 

our dependence on our management team, and our ability to attract and retain qualified personnel;

 

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

 

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

 

the concentration of our business within our geographic areas of operation in Louisiana, Texas and Alabama; and

 

concentration of credit exposure.

These factors should not be construed as exhaustive. Additional information on these and other risk factors can be found in Item 1A. "Risk Factors" and in the "Special Note Regarding Forward-Looking Statements" in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Investar's Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (the "SEC").

For further information contact:

Investar Holding Corporation
Chris Hufft
Chief Financial Officer
(225) 227-2215
Chris.Hufft@investarbank.com

INVESTAR HOLDING CORPORATION
SUMMARY FINANCIAL INFORMATION
(Amounts in thousands, except share data)
(Unaudited)

 

 

As of and for the three months ended

 

 

 

6/30/2021

 

 

3/31/2021

 

 

6/30/2020

 

 

Linked Quarter

 

 

Year/Year

 

EARNINGS DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest income

 

$

24,347

 

 

$

22,969

 

 

$

23,802

 

 

 

6.0

%

 

 

2.3

%

Total interest expense

 

 

3,182

 

 

 

3,335

 

 

 

5,463

 

 

 

(4.6

)

 

 

(41.8

)

Net interest income

 

 

21,165

 

 

 

19,634

 

 

 

18,339

 

 

 

7.8

 

 

 

15.4

 

Provision for loan losses

 

 

114

 

 

 

400

 

 

 

2,500

 

 

 

(71.5

)

 

 

(95.4

)

Total noninterest income

 

 

4,082

 

 

 

2,365

 

 

 

3,931

 

 

 

72.6

 

 

 

3.8

 

Total noninterest expense

 

 

17,960

 

 

 

14,809

 

 

 

14,480

 

 

 

21.3

 

 

 

24.0

 

Income before income taxes

 

 

7,173

 

 

 

6,790

 

 

 

5,290

 

 

 

5.6

 

 

 

35.6

 

Income tax expense

 

 

1,485

 

 

 

1,430

 

 

 

1,016

 

 

 

3.8

 

 

 

46.2

 

Net income

 

$

5,688

 

 

$

5,360

 

 

$

4,274

 

 

 

6.1

 

 

 

33.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE BALANCE SHEET DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

2,650,050

 

 

$

2,354,504

 

 

$

2,296,082

 

 

 

12.6

%

 

 

15.4

%

Total interest-earning assets

 

 

2,441,368

 

 

 

2,185,853

 

 

 

2,130,236

 

 

 

11.7

 

 

 

14.6

 

Total loans

 

 

1,940,513

 

 

 

1,857,272

 

 

 

1,789,863

 

 

 

4.5

 

 

 

8.4

 

Total interest-bearing deposits

 

 

1,677,471

 

 

 

1,484,515

 

 

 

1,403,168

 

 

 

13.0

 

 

 

19.5

 

Total interest-bearing liabilities

 

 

1,817,746

 

 

 

1,623,286

 

 

 

1,615,422

 

 

 

12.0

 

 

 

12.5

 

Total deposits

 

 

2,236,902

 

 

 

1,951,046

 

 

 

1,827,512

 

 

 

14.7

 

 

 

22.4

 

Total stockholders' equity

 

 

251,793

 

 

 

247,236

 

 

 

236,651

 

 

 

1.8

 

 

 

6.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$

0.54

 

 

$

0.51

 

 

$

0.39

 

 

 

5.9

%

 

 

38.5

%

Diluted earnings per common share

 

 

0.53

 

 

 

0.51

 

 

 

0.39

 

 

 

3.9

 

 

 

35.9

 

Core Earnings(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core basic earnings per common share(1)

 

 

0.53

 

 

 

0.49

 

 

 

0.32

 

 

 

8.2

 

 

 

65.6

 

Core diluted earnings per common share(1)

 

 

0.53

 

 

 

0.49

 

 

 

0.32

 

 

 

8.2

 

 

 

65.6

 

Book value per common share

 

 

24.08

 

 

 

23.79

 

 

 

21.84

 

 

 

1.2

 

 

 

10.3

 

Tangible book value per common share(1)

 

 

19.85

 

 

 

20.72

 

 

 

18.82

 

 

 

(4.2

)

 

 

5.5

 

Common shares outstanding

 

 

10,413,390

 

 

 

10,436,493

 

 

 

10,839,977

 

 

 

(0.2

)

 

 

(3.9

)

Weighted average common shares outstanding - basic

 

 

10,414,875

 

 

 

10,509,468

 

 

 

10,882,084

 

 

 

(0.9

)

 

 

(4.3

)

Weighted average common shares outstanding - diluted

 

 

10,541,907

 

 

 

10,567,173

 

 

 

10,882,084

 

 

 

(0.2

)

 

 

(3.1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERFORMANCE RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

 

0.86

%

 

 

0.92

%

 

 

0.75

%

 

 

(6.5

)%

 

 

14.7

%

Core return on average assets(1)

 

 

0.84

 

 

 

0.89

 

 

 

0.62

 

 

 

(5.6

)

 

 

35.5

 

Return on average equity

 

 

9.06

 

 

 

8.79

 

 

 

7.26

 

 

 

3.1

 

 

 

24.8

 

Core return on average equity(1)

 

 

8.85

 

 

 

8.50

 

 

 

6.00

 

 

 

4.1

 

 

 

47.5

 

Net interest margin

 

 

3.48

 

 

 

3.64

 

 

 

3.46

 

 

 

(4.4

)

 

 

0.6

 

Net interest income to average assets

 

 

3.20

 

 

 

3.38

 

 

 

3.21

 

 

 

(5.3

)

 

 

(0.3

)

Noninterest expense to average assets

 

 

2.72

 

 

 

2.55

 

 

 

2.54

 

 

 

6.7

 

 

 

7.1

 

Efficiency ratio(2)

 

 

71.14

 

 

 

67.32

 

 

 

65.02

 

 

 

5.7

 

 

 

9.4

 

Core efficiency ratio(1)

 

 

69.62

 

 

 

67.35

 

 

 

67.03

 

 

 

3.4

 

 

 

3.9

 

Dividend payout ratio

 

 

14.81

 

 

 

13.73

 

 

 

15.38

 

 

 

7.9

 

 

 

(3.7

)

Net charge-offs to average loans

 

 

-

 

 

 

0.02

 

 

 

-

 

 

 

(100.0

)

 

 

-

 

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

(2) Efficiency ratio represents noninterest expenses divided by the sum of net interest income (before provision for loan losses) and noninterest income.

INVESTAR HOLDING CORPORATION
SUMMARY FINANCIAL INFORMATION
(Amounts in thousands, except share data)
(Unaudited)

 

 

As of and for the three months ended

 

 

 

6/30/2021

 

 

3/31/2021

 

 

6/30/2020

 

 

Linked Quarter

 

 

Year/Year

 

ASSET QUALITY RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets to total assets

 

 

0.84

%

 

 

0.68

%

 

 

0.56

%

 

 

23.5

%

 

 

50.0

%

Nonperforming loans to total loans

 

 

1.07

 

 

 

0.81

 

 

 

0.72

 

 

 

32.1

 

 

 

48.6

 

Allowance for loan losses to total loans

 

 

1.05

 

 

 

1.11

 

 

 

0.92

 

 

 

(5.4

)

 

 

14.1

 

Allowance for loan losses to nonperforming loans

 

 

97.83

 

 

 

137.33

 

 

 

127.62

 

 

 

(28.8

)

 

 

(23.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CAPITAL RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investar Holding Corporation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity to total assets

 

 

9.38

%

 

 

10.31

%

 

 

10.03

%

 

 

(9.1

)%

 

 

(6.5

)%

Tangible equity to tangible assets(1)

 

 

7.86

 

 

 

9.10

 

 

 

8.77

 

 

 

(13.6

)

 

 

(10.4

)

Tier 1 leverage ratio

 

 

8.19

 

 

 

9.37

 

 

 

9.31

 

 

 

(12.6

)

 

 

(12.0

)

Common equity tier 1 capital ratio(2)

 

 

9.96

 

 

 

11.08

 

 

 

11.02

 

 

 

(10.1

)

 

 

(9.6

)

Tier 1 capital ratio(2)

 

 

10.43

 

 

 

11.42

 

 

 

11.37

 

 

 

(8.7

)

 

 

(8.3

)

Total capital ratio(2)

 

 

13.55

 

 

 

14.77

 

 

 

14.61

 

 

 

(8.3

)

 

 

(7.3

)

Investar Bank:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 leverage ratio

 

 

9.49

 

 

 

10.56

 

 

 

10.09

 

 

 

(10.1

)

 

 

(5.9

)

Common equity tier 1 capital ratio(2)

 

 

12.10

 

 

 

12.86

 

 

 

12.33

 

 

 

(5.9

)

 

 

(1.9

)

Tier 1 capital ratio(2)

 

 

12.10

 

 

 

12.86

 

 

 

12.33

 

 

 

(5.9

)

 

 

(1.9

)

Total capital ratio(2)

 

 

13.11

 

 

 

13.95

 

 

 

13.25

 

 

 

(6.0

)

 

 

(1.1

)

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

(2) Estimated for June 30, 2021.

INVESTAR HOLDING CORPORATION

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)

(Unaudited)

 

 

June 30, 2021

 

 

March 31, 2021

 

 

June 30, 2020

 

ASSETS

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

36,775

 

 

$

29,970

 

 

$

31,725

 

Interest-bearing balances due from other banks

 

 

229,498

 

 

 

69,400

 

 

 

99,239

 

Federal funds sold

 

 

500

 

 

 

97

 

 

 

-

 

Cash and cash equivalents

 

 

266,773

 

 

 

99,467

 

 

 

130,964

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available for sale securities at fair value (amortized cost of $267,706, $299,310, and $242,175, respectively)

 

 

269,360

 

 

 

301,433

 

 

 

246,886

 

Held to maturity securities at amortized cost (estimated fair value of $12,007, $12,341, and $14,265, respectively)

 

 

11,812

 

 

 

11,966

 

 

 

14,053

 

Loans, net of allowance for loan losses of $20,445, $20,423, and $16,657, respectively

 

 

1,927,375

 

 

 

1,825,547

 

 

 

1,797,314

 

Other equity securities

 

 

16,725

 

 

 

16,763

 

 

 

19,398

 

Bank premises and equipment, net of accumulated depreciation of $17,566, $16,803, and $14,022, respectively

 

 

62,588

 

 

 

56,631

 

 

 

56,767

 

Other real estate owned, net

 

 

1,490

 

 

 

1,518

 

 

 

69

 

Accrued interest receivable

 

 

12,205

 

 

 

12,868

 

 

 

13,701

 

Deferred tax asset

 

 

508

 

 

 

-

 

 

 

1,515

 

Goodwill and other intangible assets, net

 

 

43,973

 

 

 

32,001

 

 

 

32,715

 

Bank-owned life insurance

 

 

50,462

 

 

 

39,131

 

 

 

38,437

 

Other assets

 

 

9,636

 

 

 

10,631

 

 

 

7,544

 

Total assets

 

$

2,672,907

 

 

$

2,407,956

 

 

$

2,359,363

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$

582,109

 

 

$

515,487

 

 

$

469,095

 

Interest-bearing

 

 

1,678,057

 

 

 

1,494,393

 

 

 

1,420,493

 

Total deposits

 

 

2,260,166

 

 

 

2,009,880

 

 

 

1,889,588

 

Advances from Federal Home Loan Bank

 

 

82,500

 

 

 

82,500

 

 

 

158,500

 

Repurchase agreements

 

 

6,713

 

 

 

4,274

 

 

 

4,908

 

Subordinated debt

 

 

42,943

 

 

 

42,920

 

 

 

42,854

 

Junior subordinated debt

 

 

8,320

 

 

 

5,962

 

 

 

5,923

 

Accrued taxes and other liabilities

 

 

21,550

 

 

 

14,169

 

 

 

20,884

 

Total liabilities

 

 

2,422,192

 

 

 

2,159,705

 

 

 

2,122,657

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock, no par value per share; 5,000,000 shares authorized

 

 

-

 

 

 

-

 

 

 

-

 

Common stock, $1.00 par value per share; 40,000,000 shares authorized; 10,413,390, 10,436,493, and 10,839,977 shares issued and outstanding, respectively

 

 

10,413

 

 

 

10,436

 

 

 

10,840

 

Surplus

 

 

155,847

 

 

 

155,822

 

 

 

161,729

 

Retained earnings

 

 

80,867

 

 

 

75,998

 

 

 

63,767

 

Accumulated other comprehensive income

 

 

3,588

 

 

 

5,995

 

 

 

370

 

Total stockholders' equity

 

 

250,715

 

 

 

248,251

 

 

 

236,706

 

Total liabilities and stockholders' equity

 

$

2,672,907

 

 

$

2,407,956

 

 

$

2,359,363

 

INVESTAR HOLDING CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except share data)

(Unaudited)

 

 

For the three months ended

 

 

 

June 30, 2021

 

 

March 31, 2021

 

 

June 30, 2020

 

INTEREST INCOME

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

23,135

 

 

$

21,627

 

 

$

22,118

 

Interest on investment securities

 

 

1,009

 

 

 

1,179

 

 

 

1,455

 

Other interest income

 

 

203

 

 

 

163

 

 

 

229

 

Total interest income

 

 

24,347

 

 

 

22,969

 

 

 

23,802

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

2,114

 

 

 

2,302

 

 

 

4,190

 

Interest on borrowings

 

 

1,068

 

 

 

1,033

 

 

 

1,273

 

Total interest expense

 

 

3,182

 

 

 

3,335

 

 

 

5,463

 

Net interest income

 

 

21,165

 

 

 

19,634

 

 

 

18,339

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for loan losses

 

 

114

 

 

 

400

 

 

 

2,500

 

Net interest income after provision for loan losses

 

 

21,051

 

 

 

19,234

 

 

 

15,839

 


 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

 

607

 

 

 

491

 

 

 

405

 

Gain on sale of investment securities, net

 

 

1,721

 

 

 

600

 

 

 

1,178

 

Loss on sale of fixed assets, net

 

 

-

 

 

 

(2

)

 

 

-

 

Loss on sale of other real estate owned, net

 

 

(5

)

 

 

-

 

 

 

-

 

Gain on sale of loans

 

 

46

 

 

 

-

 

 

 

-

 

Servicing fees and fee income on serviced loans

 

 

 

 

 

64

 

 

 

96

 

Interchange fees

 

 

501

 

 

 

388

 

 

 

347

 

Income from bank owned life insurance

 

 

311

 

 

 

223

 

 

 

233

 

Change in the fair value of equity securities

 

 

91

 

 

 

65

 

 

 

248

 

Other operating income

 

 

745

 

 

 

536

 

 

 

1,424

 

Total noninterest income

 

 

4,082

 

 

 

2,365

 

 

 

3,931

 

Income before noninterest expense

 

 

25,133

 

 

 

21,599

 

 

 

19,770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1,278

 

 

 

1,206

 

 

 

1,149

 

Salaries and employee benefits

 

 

9,916

 

 

 

8,695

 

 

 

8,572

 

Occupancy

 

 

676

 

 

 

637

 

 

 

536

 

Data processing

 

 

973

 

 

 

746

 

 

 

786

 

Marketing

 

 

71

 

 

 

41

 

 

 

78

 

Professional fees

 

 

378

 

 

 

358

 

 

 

429

 

Acquisition expenses

 

 

1,641

 

 

 

361

 

 

 

255

 

Other operating expenses

 

 

3,027

 

 

 

2,765

 

 

 

2,675

 

Total noninterest expense

 

 

17,960

 

 

 

14,809

 

 

 

14,480

 

Income before income tax expense

 

 

7,173

 

 

 

6,790

 

 

 

5,290

 

Income tax expense

 

 

1,485

 

 

 

1,430

 

 

 

1,016

 

Net income

 

$

5,688

 

 

$

5,360

 

 

$

4,274

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER SHARE

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$

0.54

 

 

$

0.51

 

 

$

0.39

 

Diluted earnings per common share

 

$

0.53

 

 

$

0.51

 

 

$

0.39

 

Cash dividends declared per common share

 

$

0.08

 

 

$

0.07

 

 

$

0.06

 

INVESTAR HOLDING CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS
(Amounts in thousands)
(Unaudited)


 

 

For the three months ended

 

 

 

June 30, 2021

 

 

March 31, 2021

 

 

June 30, 2020

 

 

 


 

 

 

Interest

 

 


 

 

 


 

 

 

Interest

 

 


 

 

 


 

 

 

Interest

 

 


 

 

 

 

Average

 

 

Income/

 

 


Yield/

 

 

Average

 

 

Income/

 

 


Yield/

 

 

Average

 

 

Income/

 

 


Yield/

 

 

 

Balance

 

 

Expense

 

 

Rate

 

 

Balance

 

 

Expense

 

 

Rate

 

 

Balance

 

 

Expense

 

 

Rate

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

1,940,513

 

 

$

23,135

 

 

 

4.78

%

 

$

1,857,272

 

 

$

21,627

 

 

 

4.72

%

 

$

1,789,863

 

 

$

22,118

 

 

 

4.97

%

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

283,318

 

 

 

860

 

 

 

1.22

 

 

 

270,040

 

 

 

1,039

 

 

 

1.56

 

 

 

244,703

 

 

 

1,253

 

 

 

2.06

 

Tax-exempt

 

 

22,061

 

 

 

149

 

 

 

2.71

 

 

 

20,228

 

 

 

140

 

 

 

2.81

 

 

 

29,150

 

 

 

202

 

 

 

2.79

 

Interest-bearing balances with banks

 

 

195,476

 

 

 

203

 

 

 

0.42

 

 

 

38,313

 

 

 

163

 

 

 

1.72

 

 

 

66,520

 

 

 

229

 

 

 

1.38

 

Total interest-earning assets

 

 

2,441,368

 

 

 

24,347

 

 

 

4.00

 

 

 

2,185,853

 

 

 

22,969

 

 

 

4.26

 

 

 

2,130,236

 

 

 

23,802

 

 

 

4.49

 

Cash and due from banks

 

 

40,639

 

 

 

 

 

 

 

 

 

 

 

30,335

 

 

 

 

 

 

 

 

 

 

 

25,900

 

 

 

 

 

 

 

 

 

Intangible assets

 

 

44,727

 

 

 

 

 

 

 

 

 

 

 

32,112

 

 

 

 

 

 

 

 

 

 

 

32,561

 

 

 

 

 

 

 

 

 

Other assets

 

 

143,774

 

 

 

 

 

 

 

 

 

 

 

126,750

 

 

 

 

 

 

 

 

 

 

 

121,706

 

 

 

 

 

 

 

 

 

Allowance for loan losses

 

 

(20,458

)

 

 

 

 

 

 

 

 

 

 

(20,546

)

 

 

 

 

 

 

 

 

 

 

(14,321

)

 

 

 

 

 

 

 

 

Total assets

 

$

2,650,050

 

 

 

 

 

 

 

 

 

 

$

2,354,504

 

 

 

 

 

 

 

 

 

 

$

2,296,082

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and stockholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

 

$

854,504

 

 

$

701

 

 

 

0.33

%

 

$

736,502

 

 

$

685

 

 

 

0.38

%

 

$

597,022

 

 

$

827

 

 

 

0.56

%

Brokered deposits

 

 

97,245

 

 

 

240

 

 

 

0.99

 

 

 

83,832

 

 

 

209

 

 

 

1.01

 

 

 

-

 

 

 

-

 

 

 

-

 

Savings deposits

 

 

173,553

 

 

 

71

 

 

 

0.16

 

 

 

146,078

 

 

 

66

 

 

 

0.19

 

 

 

125,680

 

 

 

94

 

 

 

0.30

 

Time deposits

 

 

552,169

 

 

 

1,102

 

 

 

0.80

 

 

 

518,103

 

 

 

1,342

 

 

 

1.05

 

 

 

680,466

 

 

 

3,269

 

 

 

1.93

 

Total interest-bearing deposits

 

 

1,677,471

 

 

 

2,114

 

 

 

0.51

 

 

 

1,484,515

 

 

 

2,302

 

 

 

0.63

 

 

 

1,403,168

 

 

 

4,190

 

 

 

1.20

 

Short-term borrowings

 

 

10,030

 

 

 

5

 

 

 

0.21

 

 

 

11,407

 

 

 

6

 

 

 

0.18

 

 

 

84,447

 

 

 

233

 

 

 

1.11

 

Long-term debt

 

 

130,245

 

 

 

1,063

 

 

 

3.27

 

 

 

127,364

 

 

 

1,027

 

 

 

3.27

 

 

 

127,807

 

 

 

1,040

 

 

 

3.27

 

Total interest-bearing liabilities

 

 

1,817,746

 

 

 

3,182

 

 

 

0.70

 

 

 

1,623,286

 

 

 

3,335

 

 

 

0.83

 

 

 

1,615,422

 

 

 

5,463

 

 

 

1.36

 

Noninterest-bearing deposits

 

 

559,431

 

 

 

 

 

 

 

 

 

 

 

466,531

 

 

 

 

 

 

 

 

 

 

 

424,344

 

 

 

 

 

 

 

 

 

Other liabilities

 

 

21,080

 

 

 

 

 

 

 

 

 

 

 

17,451

 

 

 

 

 

 

 

 

 

 

 

19,665

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

251,793

 

 

 

 

 

 

 

 

 

 

 

247,236

 

 

 

 

 

 

 

 

 

 

 

236,651

 

 

 

 

 

 

 

 

 

Total liability and stockholders' equity

 

$

2,650,050

 

 

 

 

 

 

 

 

 

 

$

2,354,504

 

 

 

 

 

 

 

 

 

 

$

2,296,082

 

 

 

 

 

 

 

 

 

Net interest income/net interest margin

 

 

 

 

 

$

21,165

 

 

 

3.48

%

 

 

 

 

 

$

19,634

 

 

 

3.64

%

 

 

 

 

 

$

18,339

 

 

 

3.46

%

INVESTAR HOLDING CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
INTEREST EARNED AND YIELD ANALYSIS ADJUSTED FOR PPP LOANS
(Amounts in thousands)
(Unaudited)

 

 

For the three months ended

 

 

 

June 30, 2021

 

 

March 31, 2021

 

 

June 30, 2020

 

 

 

 

 

 

Interest

 

 

 

 

 

 

 

 

Interest

 

 

 

 

 

 

 

 

Interest

 

 

 

 

 

 

Average

 

 

Income/

 

 

Yield/

 

 

Average

 

 

Income/

 

 

Yield/

 

 

Average

 

 

Income/

 

 

Yield/

 

 

 

Balance

 

 

Expense

 

 

Rate

 

 

Balance

 

 

Expense

 

 

Rate

 

 

Balance

 

 

Expense

 

 

Rate

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

1,940,513

 

 

$

23,135

 

 

 

4.78

%

 

$

1,857,272

 

 

$

21,627

 

 

 

4.72

%

 

$

1,789,863

 

 

$

22,118

 

 

 

4.97

%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PPP loans

 

 

96,045

 

 

 

1,237

 

 

 

5.17

%

 

 

97,288

 

 

 

1,405

 

 

 

5.86

%

 

 

78,903

 

 

 

788

 

 

 

4.02

%

Adjusted loans

 

 

1,844,468

 

 

 

21,898

 

 

 

4.76

%

 

 

1,759,984

 

 

 

20,222

 

 

 

4.66

%

 

 

1,710,960

 

 

 

21,330

 

 

 

5.01

%

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

283,318

 

 

 

860

 

 

 

1.22

 

 

 

270,040

 

 

 

1,039

 

 

 

1.56

 

 

 

244,703

 

 

 

1,253

 

 

 

2.06

 

Tax-exempt

 

 

22,061

 

 

 

149

 

 

 

2.71

 

 

 

20,228

 

 

 

140

 

 

 

2.81

 

 

 

29,150

 

 

 

202

 

 

 

2.79

 

Interest-bearing balances with banks

 

 

195,476

 

 

 

203

 

 

 

0.42

 

 

 

38,313

 

 

 

163

 

 

 

1.72

 

 

 

66,520

 

 

 

229

 

 

 

1.38

 

Adjusted interest-earning assets

 

 

2,345,323

 

 

 

23,110

 

 

 

3.95

 

 

 

2,088,565

 

 

 

21,564

 

 

 

4.19

 

 

 

2,051,333

 

 

 

23,014

 

 

 

4.51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-bearing liabilities

 

 

1,817,746

 

 

 

3,182

 

 

 

0.70

 

 

 

1,623,286

 

 

 

3,335

 

 

 

0.83

 

 

 

1,615,422

 

 

 

5,463

 

 

 

1.36

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net interest income/adjusted net interest margin

 

 

 

 

 

$

19,928

 

 

 

3.41

%

 

 

 

 

 

$

18,229

 

 

 

3.54

%

 

 

 

 

 

$

17,551

 

 

 

3.44

%

INVESTAR HOLDING CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
INTEREST EARNED AND YIELD ANALYSIS ADJUSTED FOR INTEREST ACCRETION, RECOVERIES AND ACCELERATED PPP INCOME
(Amounts in thousands)
(Unaudited)

 

 

For the three months ended

 

 

 

June 30, 2021

 

 

March 31, 2021

 

 

June 30, 2020

 

 

 

 

 

 

Interest

 

 

 

 

 

 

 

 

Interest

 

 

 

 

 

 

 

 

Interest

 

 

 

 

 

 

Average

 

 

Income/

 

 

 

 

 

Average

 

 

Income/

 

 

 

 

 

Average

 

 

Income/

 

 

 

 

 

 

Balance

 

 

Expense

 

 

Yield/ Rate

 

 

Balance

 

 

Expense

 

 

Yield/ Rate

 

 

Balance

 

 

Expense

 

 

Yield/ Rate

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

1,940,513

 

 

$

23,135

 

 

 

4.78

%

 

$

1,857,272

 

 

$

21,627

 

 

 

4.72

%

 

$

1,789,863

 

 

$

22,118

 

 

 

4.97

%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accelerated fee income for forgiven or paid off PPP loans

 

 

 

 

 

 

556

 

 

 

 

 

 

 

 

 

 

 

692

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

Interest recoveries

 

 

 

 

 

 

25

 

 

 

 

 

 

 

 

 

 

 

17

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

Accretion

 

 

 

 

 

 

532

 

 

 

 

 

 

 

 

 

 

 

135

 

 

 

 

 

 

 

 

 

 

 

365

 

 

 

 

 

Adjusted Loans

 

 

1,940,513

 

 

 

22,022

 

 

 

4.55

 

 

 

1,857,272

 

 

 

20,783

 

 

 

4.54

 

 

 

1,789,863

 

 

 

21,753

 

 

 

4.89

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

283,318

 

 

 

860

 

 

 

1.22

 

 

 

270,040

 

 

 

1,039

 

 

 

1.56

 

 

 

244,703

 

 

 

1,253

 

 

 

2.06

 

Tax-exempt

 

 

22,061

 

 

 

149

 

 

 

2.71

 

 

 

20,228

 

 

 

140

 

 

 

2.81

 

 

 

29,150

 

 

 

202

 

 

 

2.79

 

Interest-bearing balances with banks

 

 

195,476

 

 

 

203

 

 

 

0.42

 

 

 

38,313

 

 

 

163

 

 

 

1.72

 

 

 

66,520

 

 

 

229

 

 

 

1.38

 

Adjusted interest-earning assets

 

 

2,441,368

 

 

 

23,234

 

 

 

3.82

 

 

 

2,185,853

 

 

 

22,125

 

 

 

4.10

 

 

 

2,130,236

 

 

 

23,437

 

 

 

4.43

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-bearing liabilities

 

 

1,817,746

 

 

 

3,182

 

 

 

0.70

 

 

 

1,623,286

 

 

 

3,335

 

 

 

0.83

 

 

 

1,615,422

 

 

 

5,463

 

 

 

1.36

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net interest income/adjusted net interest margin

 

 

 

 

 

$

20,052

 

 

 

3.29

%

 

 

 

 

 

$

18,790

 

 

 

3.49

%

 

 

 

 

 

$

17,974

 

 

 

3.39

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

June 30, 2021

 

 

March 31, 2021

 

 

June 30, 2020

 

Tangible common equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

$

250,715

 

 

$

248,251

 

 

$

236,706

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

39,527

 

 

 

28,144

 

 

 

28,144

 

Core deposit intangible

 

 

4,346

 

 

 

3,757

 

 

 

4,471

 

Trademark intangible

 

 

100

 

 

 

100

 

 

 

100

 

Tangible common equity

 

$

206,742

 

 

$

216,250

 

 

$

203,991

 

Tangible assets

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

2,672,907

 

 

$

2,407,956

 

 

$

2,359,363

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

39,527

 

 

 

28,144

 

 

 

28,144

 

Core deposit intangible

 

 

4,346

 

 

 

3,757

 

 

 

4,471

 

Trademark intangible

 

 

100

 

 

 

100

 

 

 

100

 

Tangible assets

 

$

2,628,934

 

 

$

2,375,955

 

 

$

2,326,648

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

 

10,413,390

 

 

 

10,436,493

 

 

 

10,839,977

 

Tangible equity to tangible assets

 

 

7.86

%

 

 

9.10

%

 

 

8.77

%

Book value per common share

 

$

24.08

 

 

$

23.79

 

 

$

21.84

 

Tangible book value per common share

 

 

19.85

 

 

 

20.72

 

 

 

18.82

 

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

 

 

 

Three months ended

 


 

 

 

6/30/2021

 

 

3/31/2021

 

 

6/30/2020

 

Net interest income

(a)

 

$

21,165

 

 

$

19,634

 

 

$

18,339

 

Provision for loan losses

 

 

 

114

 

 

 

400

 

 

 

2,500

 

Net interest income after provision for loan losses

 

 

 

21,051

 

 

 

19,234

 

 

 

15,839

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

(b)

 

 

4,082

 

 

 

2,365

 

 

 

3,931

 

Gain on sale of investment securities, net

 

 

 

(1,721

)

 

 

(600

)

 

 

(1,178

)

Loss on sale of other real estate owned, net

 

 

 

5

 

 

 

-

 

 

 

-

 

Loss on sale of fixed assets, net

 

 

 

-

 

 

 

2

 

 

 

-

 

Change in the fair value of equity securities

 

 

 

(91

)

 

 

(65

)

 

 

(248

)

Core noninterest income

(d)

 

 

2,275

 

 

 

1,702

 

 

 

2,505

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core earnings before noninterest expense

 

 

 

23,326

 

 

 

20,936

 

 

 

18,344

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total noninterest expense

(c)

 

 

17,960

 

 

 

14,809

 

 

 

14,480

 

Acquisition expense

 

 

 

(1,641

)

 

 

(361

)

 

 

(255

)

Severance

 

 

 

-

 

 

 

(78

)

 

 

(253

)

Core noninterest expense

(f)

 

 

16,319

 

 

 

14,370

 

 

 

13,972

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core earnings before income tax expense

 

 

 

7,007

 

 

 

6,566

 

 

 

4,372

 

Core income tax expense(1)

 

 

 

1,450

 

 

 

1,385

 

 

 

840

 

Core earnings

 

 

$

5,557

 

 

$

5,181

 

 

$

3,532

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core basic earnings per common share

 

 

 

0.53

 

 

 

0.49

 

 

 

0.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share (GAAP)

 

 

$

0.53

 

 

$

0.51

 

 

$

0.39

 

Gain on sale of investment securities, net

 

 

 

(0.12

)

 

 

(0.05

)

 

 

(0.09

)

Loss on sale of other real estate owned, net

 

 

 

-

 

 

 

-

 

 

 

-

 

Loss on sale of fixed assets, net

 

 

 

-

 

 

 

-

 

 

 

-

 

Change in the fair value of equity securities

 

 

 

(0.01

)

 

 

(0.01

)

 

 

(0.02

)

Acquisition expense

 

 

 

0.13

 

 

 

0.03

 

 

 

0.02

 

Severance

 

 

 

-

 

 

 

0.01

 

 

 

0.02

 

Core diluted earnings per common share

 

 

$

0.53

 

 

$

0.49

 

 

$

0.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio

(c) / (a+b)

 

 

71.14

%

 

 

67.32

%

 

 

65.02

%

Core efficiency ratio

(f) / (a+d)

 

 

69.62

%

 

 

67.35

%

 

 

67.03

%

Core return on average assets(2)

 

 

 

0.84

%

 

 

0.89

%

 

 

0.62

%

Core return on average equity(2)

 

 

 

8.85

%

 

 

8.50

%

 

 

6.00

%

Total average assets

 

 

$

2,650,050

 

 

$

2,354,504

 

 

$

2,296,082

 

Total average stockholders' equity

 

 

 

251,793

 

 

 

247,236

 

 

 

236,651

 

(1) Core income tax expense is calculated using the effective tax rates of 20.7%, 21.1% and 19.2% for the quarters ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively.

(2) Core earnings used in calculation. No adjustments were made to average assets or average equity.

SOURCE: Investar Holding Corporation




07/22/2021 EQS Newswire / EQS Group AG



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