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Investar Holding Corporation Announces 2014 Second Quarter Results

BATON ROUGE, La., July 25, 2014 (GLOBE NEWSWIRE) -- Investar Holding Corporation (Nasdaq:ISTR) (the "Company"), the holding company for Investar Bank, today announced financial results for the three and six month periods ended June 30, 2014. For the quarter ended June 30, 2014, the Company reported net income of $1.1 million, or $0.26 per diluted share, as compared to $0.9 million, or $0.21 per diluted share, for the first quarter of 2014 and $1 million, or $0.25 per diluted share, for the second quarter of 2013 after adjusting for the bargain purchase gain and other acquisition expenses. This represents an increase of $0.05 per diluted share, or 23.8%, over the first quarter of 2014 and an increase of $0.01 per diluted share, or 4%, over the second quarter of 2013. For the six months ended June 30, 2014, the Company reported net income of $1.9 million, or $0.47 per diluted share, as compared to $1.6 million, or $0.44 per diluted share, after adjusting for the bargain purchase gain and other acquisition expenses for the six months ended June 30, 2013. This represents an increase of $0.03 per diluted share, or 6.8%, over the six months ended June 30, 2013.

Investar Holding Corporation President and Chief Executive Officer John D'Angelo said, "We are very pleased with our results for the second quarter. We are continuing to grow our balance sheet, with solid growth in both loans and deposits. Our earnings growth remains strong with a 23.8% increase in earnings per share over the first quarter of 2014. We remain very excited about the recent completion of our IPO, which we believe positions us for continued growth."

Performance Highlights

  • Increase in net interest income of $0.4 million, or 6.5%, compared to the first quarter of 2014, and $1.6 million, or 32.5%, compared to the second quarter of 2013.
  • Tangible book value per share of $13.86 as of June 30, 2014.
  • Total assets have grown to $729.1 million at June 30, 2014, an increase of $94.1 million, or 14.8%, from December 31, 2013.
  • Total loans increased $59.9 million, or 11.9%, to $564.0 million at June 30, 2014 from $504.1 million at December 31, 2013.
  • Deposits increased $46.1 million, or 8.7%, to $578.7 million at June 30, 2014 from $532.6 million at December 31, 2013.
  • The Company's cost of deposits for the three and six month periods ending June 30, 2014 was 0.84%, a decrease of six and eight basis points compared to the same periods in the prior year.
  • On July 3, 2014 the Company completed an initial public offering of 2,875,000 shares of its common stock generating gross proceeds of $37.6 million to support future growth.

Loans

Total loans were $564.0 million at June 30, 2014, an increase of $59.9 million, or 11.9%, from December 31, 2013. Loan growth was primarily driven by increases in 1-4 family and nonfarm, non-residential real estate loans.

The following table sets forth the composition of the Company's loan portfolio as of the dates indicated.

Increase/(Decrease)
(dollars in thousands) June 30, 2014 December 31, 2013 Amount Percent
Mortgage Loans on Real Estate
Construction & Land Development $ 60,333 $ 63,170 $ (2,837) (4.5)%
1-4 Family 125,246 104,685 20,561 19.6
Multifamily 17,706 14,286 3,420 23.9
Farmland 2,282 830 1,452 174.9
Nonfarm, Non Residential 191,820 157,363 34,457 21.9
Commercial & Industrial 34,778 32,665 2,113 6.5
Consumer 131,810 131,096 714 0.5
Total Loans $ 563,975 $ 504,095 $ 59,880 11.9%

The provision for loan loss expense was $0.4 million for the quarter, an increase of $0.2 million from the first quarter of 2014 and an increase of $0.3 million compared to the second quarter of 2013. The allowance for loan losses was $3.9 million, or 296.24% and 0.69% of nonperforming loans and total loans, respectively, at June 30, 2014, compared to $3.5 million, or 206.1% and 0.67% of nonperforming loans and total loans, respectively, at March 31, 2014, and $2.8 million, or 141.01% and 0.66% of nonperforming loans and total loans, respectively, at June 30, 2013.

Nonperforming assets totaled $4.7 million at June 30, 2014, a decrease of $0.6 million compared to March 31, 2014 and a decrease of $0.3 million compared to December 31, 2013. The ratio of total nonperforming assets to total assets was 0.65% at June 30, 2014, compared to 0.79% at March 31, 2014 and December 31, 2013.

Deposits

Total deposits at June 30, 2014 were $578.7 million, an increase of $46.1 million, or 8.7%, from December 31, 2013. Total noninterest bearing demand deposits at December 31, 2013 were slightly inflated by a $14 million short term deposit made by a commercial customer in late December 2013 that was fully withdrawn in January 2014. The increase in total deposits was driven primarily by an increase in NOW accounts of $21.7 million, or 28.1%, an increase of $11 million, or 18.7%, in noninterest bearing demand deposits after adjusting for the $14 million short term deposit, and an increase in time deposits of $23.9 million, or 9.1%, from December 31, 2013. We believe our deposit cross sell strategy has resulted in 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.

Increase/(Decrease)
(dollars in thousands) June 30, 2014 December 31, 2013 Amount Percent
Noninterest Bearing Demand Deposits $ 69,804 $ 72,795 $ (2,991) (4.1)%
NOW Accounts 98,889 77,190 21,699 28.1
Money Market Deposit Accounts 70,164 67,006 3,158 4.7
Savings Accounts 52,431 52,177 254 0.5
Time Deposits 287,379 263,438 23,941 9.1
Total Deposits $ 578,667 $ 532,606 $ 46,061 8.6%

Net Interest Income

Net interest income for the second quarter of 2014 totaled $6.3 million, an increase of $0.4 million, or 6.5%, from the first quarter of 2014 and an increase of $1.6 million, or 32.5%, from the second quarter of 2013. Net interest income for the six months ended June 30, 2014 totaled $12.1 million, an increase of $4 million, or 49.4%, from the six months ended June 30, 2013. These increases were the result of continued growth of the Company's loan portfolio.

The Company's net interest margin was 3.85% for the quarter ended June 30, 2014 compared to 3.93% for the first quarter of 2014 and 4.28% for the second quarter of 2013. The decline in the interest margin can be attributed to lower yields on the consumer and real estate loan portfolios. The yield on interest earning assets was 4.56% for the quarter ended June 30, 2014 compared to 4.65% for the first quarter of 2014 and 5.04% for the second quarter of 2013. The cost of deposits remained flat when comparing the second quarter of 2014 to the first quarter of 2014, and declined six basis points when comparing the second quarter of 2014 to the second quarter of 2013.

The Company's net interest margin was 3.89% for the six month period ended June 30, 2014 compared to 4.10% for the six month period ended June 30, 2013. The decline in the interest margin for both the three and six month comparison periods can be attributed to lower yields on the consumer and real estate loan portfolios.

Noninterest Income

Noninterest income, excluding securities gains, for the second quarter of 2014 totaled $1.5 million, an increase of $0.5 million, or 53.8%, compared to the first quarter of 2014, and a decrease of $0.6 million, or 31.9% compared to the second quarter of 2013. The increase in noninterest income for the second quarter of 2014 compared to the first quarter of 2014 resulted primarily from an increase of $0.4 million in gain on sale of consumer loans and increased consumer loan servicing fee income. Noninterest income for the second quarter of 2013 included the $0.9 million bargain purchase gain recorded in connection with the Company's acquisition of First Community Bank ("FCB") in May 2013. Excluding the bargain purchase gain, the $0.2 million increase in noninterest income for the second quarter of 2014 compared to the second quarter of 2013 resulted primarily from an increase of $0.5 million in gain on sale of consumer loans offset by a decrease of approximately $0.3 million in fee income on mortgage loans held for sale.

Noninterest income, excluding securities gains, for the six months ended June 30, 2014 totaled $2.4 million, a decrease of $0.6 million, or 21%, compared to the six months ended June 30, 2013. Excluding the bargain purchase gain recorded in the second quarter of 2013, noninterest income increased $0.3 million for the six months ended June 30, 2014 compared to the six months ended June 30, 2013 primarily as a result of an increase of approximately $0.1 million in consumer loan servicing fee income and $0.1 million in interchange and ATM fee income.

Noninterest Expense

Noninterest expense for the second quarter of 2014 totaled $5.7 million, an increase of $0.3 million, or 6.4%, compared to the first quarter of 2014 and an increase of $1.3 million, or 28.9%, compared to the second quarter of 2013, excluding acquisition related expenses of $0.2 million. The increase in noninterest expense over the first quarter of 2014 was primarily due to a $0.1 million increase in credit investigation costs related to the increase in our consumer loan production and a $0.1 million increase in professional fees related to the company's implementation costs of Sarbanes-Oxley compliance. The increase in noninterest expense over the prior year quarter is primarily attributed to expenses associated with the two branches that the Company acquired as a result of the FCB acquisition in May 2013, as well as with the opening of a branch in Lafayette, Louisiana during the fourth quarter of 2013.

Noninterest expense for the six months ended June 30, 2014 totaled $11.1 million, an increase of $3.2 million, or 40%, compared to the six months ended June 30, 2013, excluding acquisition costs of $0.3 million, due to the full six months of expenses associated with three branches added in 2013.

Taxes

The company recorded income tax expense of $0.5 million and $0.9 million for the three and six month periods ended June 30, 2014, respectively, which equates to an effective tax rate of 32.5%.

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 currently operates 10 full service banking offices located throughout its market and had 165 employees at June 30, 2014.

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 book value," "tangible book value per common share," "efficiency ratio," "tangible equity to tangible assets," "adjusted efficiency ratio," and "adjusted return on equity." Management also utilizes non-GAAP performance measures to adjust net income for certain significant activities or transactions that are infrequent in nature. 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. These factors should not be construed as exhaustive. 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. Information on these factors can be found in the filings that the Company makes with the Securities and Exchange Commission.

INVESTAR HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
June 30, 2014 December 31, 2013
(Unaudited)
ASSETS
Cash and due from banks $ 12,872 $ 10,549
Interest bearing balances due from other banks 1,777 17,154
Federal funds sold 500 500
Cash and cash equivalents 15,149 28,203
Investment securities:
Available-for-sale at fair value (amortized cost of $65,286 and $56,733, respectively) 65,528 56,173
Held-to-maturity, at amortized cost (estimated fair value of $13,707 and $5,986, respectively) 14,015 6,579
Loans held for sale 32,131 5,029
Loans—less allowance for loan losses of $3,882 and $3,380, respectively 560,093 500,715
Other equity securities 3,409 2,020
Bank premises and equipment, net 27,679 24,680
Real estate owned, net 3,423 3,515
Accrued interest receivable 1,921 1,835
Prepaid FDIC/OFI assessment 99
Deferred tax asset 709 1,205
Goodwill 2,684 2,684
Other assets 2,230 2,308
Total assets $ 729,070 $ 634,946
LIABILITIES
Deposits:
Noninterest bearing $ 69,804 $ 72,795
Interest bearing 508,863 459,811
Total deposits 578,667 532,606
Advances from Federal Home Loan Bank 68,409 30,818
Repurchase agreements 11,425 10,203
Note payable 8,609 3,609
Accrued interest payable 289 285
Accrued taxes and other liabilities 3,731 1,942
Total liabilities 671,130 579,463
STOCKHOLDERS' EQUITY
Common stock, $1.00 par value per share; 40,000,000 shares authorized; 3,945,753 and 3,945,114 shares issued and outstanding, respectively 3,945 3,943
Treasury Stock (4)
Surplus 45,363 45,281
Retained earnings 8,458 6,609
Accumulated other comprehensive income (loss) 178 (350)
Total stockholders' equity 57,940 55,483
Total liabilities and stockholders' equity $ 729,070 $ 634,946
INVESTAR HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share data)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2014 2013 2014 2013
INTEREST INCOME
Interest and fees on loans $ 7,119 $ 5,391 $ 13,794 $ 9,317
Interest on investment securities:
Taxable interest income 188 66 379 141
Exempt from federal income taxes 90 90 171 167
Other interest income 10 6 20 11
Total interest income 7,407 5,553 14,364 9,636
INTEREST EXPENSE
Interest on deposits 1,050 780 2,053 1,422
Interest on borrowings 108 56 194 104
Total interest expense 1,158 836 2,247 1,526
Net interest income 6,249 4,717 12,117 8,110
Provision for loan losses 448 143 693 232
Net interest income after provision for loan losses 5,801 4,574 11,424 7,878
NONINTEREST INCOME
Service charges on deposit accounts 73 58 136 86
Gain on sale of investment securities, net 48 47 165 309
Net (loss) gain on sales of ORE (5) 91 (7) 91
Gain on sale of loans 546 52 720 52
Bargain purchase gain 906 906
Fee income on mortgage loans held for sale, net 574 921 1,100 1,732
Other operating income 273 118 462 186
Total noninterest income 1,509 2,193 2,576 3,362
Income before noninterest expense 7,310 6,767 14,000 11,240
NONINTEREST EXPENSE
Salaries and employee benefits 3,491 2,860 6,962 5,111
Net occupancy expense and equipment expense 577 450 1,162 810
Bank shares tax 82 55 160 101
FDIC and OFI assessments 119 79 233 144
Legal fees 40 77 48 92
Data processing 308 215 586 402
Advertising 71 71 147 148
Stationery and supplies 44 62 92 101
Software amortization and expense 122 95 228 162
Professional fees 159 100 210 166
Telephone expense 46 34 92 59
Business entertainment 39 16 65 33
Other operating expenses 631 501 1,131 859
Total noninterest expense 5,729 4,615 11,116 8,188
Income before income tax expense 1,581 2,152 2,884 3,052
Income tax expense 514 455 938 736
Net income $ 1,067 $ 1,697 $ 1,946 $ 2,316
EARNINGS PER SHARE
Basic earnings per share $ 0.27 $ 0.47 $ 0.50 $ 0.68
Diluted earnings per share $ 0.26 $ 0.44 $ 0.47 $ 0.64
Cash dividends declared per common share $ 0.01 $ 0.02 $ 0.01 $ 0.02
INVESTAR HOLDING CORPORATION
EARNINGS PER COMMON SHARE
(Amounts in thousands, except share data)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2014 2013 2014 2013
Net income available to common shareholders $ 1,067 $ 1,697 $ 1,946 $ 2,316
Weighted average number of common shares outstanding – used in computation of basic earnings per common share 3,901,542 3,598,703 3,901,304 3,404,313
Effect of dilutive securities:
Restricted stock 44,493 19,223 44,272 18,894
Stock options 22,810 30,310 22,810 30,310
Stock warrants 193,498 193,498 193,498 193,571
Weighted average number of common shares outstanding plus effect of dilutive securities used in computation of diluted earnings per common share 4,162,343 3,841,734 4,161,884 3,647,088
Basic earnings per share $ 0.27 $ 0.47 $ 0.50 $ 0.68
Diluted earnings per share $ 0.26 $ 0.44 $ 0.47 $ 0.64
INVESTAR HOLDING CORPORATION
SUMMARY FINANCIAL INFORMATION
(Amounts in thousands, except share data)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2014 2013 2014 2013
EARNINGS DATA
Total interest income $ 7,407 $ 5,553 $ 14,364 $ 9,636
Total interest expense 1,158 836 2,247 1,526
Net interest income 6,249 4,717 12,117 8,110
Provision for loan losses 448 143 693 232
Total noninterest income 1,509 2,193 2,576 3,362
Total noninterest expense 5,729 4,615 11,116 8,188
Income before income taxes 1,581 2,152 2,884 3,052
Income tax expense 514 455 938 736
Net income 1,067 1,697 1,946 2,316
AVERAGE BALANCE SHEET DATA
Total assets 697,708 474,562 674,624 427,424
Total interest-earning assets 650,811 442,240 628,610 398,849
Total loans 575,978 387,738 554,384 348,683
Total interest-bearing deposits 500,725 348,143 492,147 311,740
Total interest-bearing liabilities 572,084 374,628 552,503 337,102
Total deposits 565,219 394,377 553,992 351,753
Total shareholders' equity 57,458 50,775 56,952 47,510
PER SHARE DATA
Basic earnings per share 0.27 0.47 0.50 0.68
Diluted earnings per share 0.26 0.44 0.47 0.64
Book value per share 14.68 13.99 14.68 13.99
Tangible book value per share (1) 13.86 13.15 13.86 13.15
Common shares outstanding 3,945,753 3,890,389 3,945,753 3,890,389
PERFORMANCE RATIOS
Return on average assets 0.61% 1.43% 0.58% 1.09%
Adjusted return on average assets (1) 0.61% 0.81% 0.58% 0.76%
Return on average equity 7.45% 13.41% 6.89% 9.83%
Adjusted return on average equity (1) 7.45% 7.57% 6.89% 6.88%
Net interest margin 3.85% 4.28% 3.89% 4.10%
Net interest income to average assets 4.26% 4.69% 4.29% 4.55%
Noninterest expense to average assets 3.29% 3.90% 3.32% 3.86%
Efficiency ratio (1) 73.85% 66.79% 75.66% 71.37%
Adjusted efficiency ratio (1) 73.85% 74.03% 75.66% 75.15%
Dividend payout ratio 4.56% 2.52% 4.90% 3.18%
June 30, 2014 June 30, 2013
ASSET QUALITY RATIOS
Nonperforming assets to total assets 0.65% 0.98%
Nonperforming loans to loans, net of unearned income 0.23% 0.47%
Allowance for loan losses to total loans 0.69% 0.66%
Allowance for loan losses to nonperforming loans 296.24% 141.01%
Net Chargeoffs to average loans, net of unearned income 0.03% 0.05%
CAPITAL RATIOS
Total equity to total assets 7.95% 10.26%
Tangible equity to tangible assets 7.54% 9.70%
Tier 1 capital to average assets 8.99% 10.20%
Tier 1 capital to risk-weighted assets 10.54% 11.63%
Total capital to risk-weighted assets 11.20% 12.25%
(1) Non-GAAP financial measures. See reconciliation.
INVESTAR HOLDING CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS
(Amounts in thousands)
(Unaudited)
Three months ended June 30,
2014 2013
Interest Interest
Average Income/ Average Income/
Balance Expense Yield/Rate Balance Expense Yield/Rate
Assets
Interest-earning assets:
Loans $ 575,978 $ 7,119 4.96% $ 387,738 $ 5,391 5.58%
Securities:
Taxable 58,088 188 1.30 37,002 66 0.72
Tax-exempt 12,995 90 2.78 15,038 90 2.40
Interest-bearing balances with banks 3,750 10 1.07 2,462 6 0.98
Total interest-earning assets 650,811 7,407 4.56 442,240 5,553 5.04
Cash and due from banks 11,734 6,034
Intangible assets 3,240 3,131
Other assets 35,534 25,878
Allowance for loan losses (3,611) (2,721)
Total assets $ 697,708 $ 474,562
Liabilities and shareholders' equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand $ 166,763 262 0.63 $ 104,942 167 0.64
Savings deposits 52,407 89 0.68 41,158 68 0.66
Time deposits 281,555 699 1.00 202,043 545 1.08
Total interest-bearing deposits 500,725 1,050 0.84 348,143 780 0.90
Short-term borrowings 33,108 20 0.24 5,576 4 0.29
Long-term debt 38,251 88 0.92 20,909 52 1.00
Total interest-bearing liabilities 572,084 1,158 0.81 374,628 836 0.90
Noninterest-bearing deposits 64,494 46,234
Other liabilities 3,672 2,925
Stockholders' equity 57,458 50,775
Total liability and stockholders' equity $ 697,708 $ 474,562
Net interest income/net interest margin $ 6,249 3.85% $ 4,717 4.28%
INVESTAR HOLDING CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS
(Amounts in thousands)
(Unaudited)
Six months ended June 30,
2014 2013
Interest Interest
Average Income/ Average Income/
Balance Expense Yield/Rate Balance Expense Yield/Rate
Assets
Interest-earning assets:
Loans $ 554,384 $ 13,794 5.02% $ 348,683 $ 9,317 5.39%
Securities:
Taxable 55,859 379 1.37 34,211 141 0.83
Tax-exempt 13,591 171 2.54 13,850 167 2.43
Interest-bearing balances with banks 4,776 20 0.84 2,105 11 1.05
Total interest-earning assets 628,610 14,364 4.61 398,849 9,636 4.87
Cash and due from banks 11,306 5,056
Intangible assets 3,245 2,980
Other assets 34,967 23,250
Allowance for loan losses (3,504) (2,711)
Total assets $ 674,624 $ 427,424
Liabilities and shareholders' equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand $ 162,760 505 0.63 $ 97,205 317 0.66
Savings deposits 52,168 178 0.69 35,845 124 0.70
Time deposits 277,219 1,370 1.00 178,690 981 1.11
Total interest-bearing deposits 492,147 2,053 0.84 311,740 1,422 0.92
Short-term borrowings 24,153 25 0.21 5,328 6 0.23
Long-term debt 36,203 170 0.95 20,034 98 0.99
Total interest-bearing liabilities 552,503 2,248 0.82 337,102 1,526 0.91
Noninterest-bearing deposits 61,845 40,013
Other liabilities 3,324 2,799
Stockholders' equity 56,952 47,510
Total liability and stockholders' equity $ 674,624 $ 427,424
Net interest income/net interest margin $ 12,116 3.89% $ 8,110 4.10%
INVESTAR HOLDING CORPORATION
RECONCILIATION OF NON GAAP FINANCIAL MEASURES
(Amounts in thousands, except share data)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
(Amounts in thousands, except share data) 2014 2013 2014 2013
Net interest income (a) $ 6,249 $ 4,717 $ 12,117 $ 8,110
Provision for loan losses (b) 448 143 693 232
Net interest income after provision for loan losses 5,801 4,574 11,424 7,878
Noninterest income (c) 1,509 2,193 2,576 3,362
Bargain purchase gain (906) (906)
Adjusted noninterest income 1,509 1,287 2,576 2,456
Adjusted income before noninterest expense (d) 7,310 5,861 14,000 10,334
Total noninterest expense (e) 5,729 4,615 11,116 8,188
Acquisition related expense (170) (248)
Adjusted noninterest expense (f) 5,729 4,445 11,116 7,940
Adjusted income before income tax expense 1,581 1,416 2,884 2,394
Adjusted income tax expense (1) 514 458 938 774
Adjusted net income 1,067 958 1,946 1,620
Diluted earnings per share (GAAP) $ 0.26 $ 0.44 $ 0.47 $ 0.64
Bargain purchase gain (0.24) (0.25)
Acquisition related expense 0.05 0.05
Adjusted diluted earnings per share $ 0.26 $ 0.25 $ 0.47 $ 0.44
Efficiency ratio (e) / (a+c) 73.85% 66.79% 75.66% 71.37%
Adjusted efficiency ratio(2) (f) / (b+d) 73.85% 74.03% 75.66% 75.15%
Adjusted return on assets (2) 0.61% 0.81% 0.58% 0.76%
Adjusted return on equity (2) 7.45% 7.57% 6.89% 6.88%
Total average assets $ 697,708 $ 474,562 $ 674,624 $ 427,424
Total average stockholders' equity $ 57,458 $ 50,775 $ 56,952 $ 47,510
(1) Income tax expense is calculated on the adjusted non-GAAP effective tax rate of 32.34% for the three and six month periods ended June 30, 2013.
(2) Adjusted for the impact of the bargain purchase gain and acquisition expenses incurred during the three and six month periods ended June 30, 2013.
INVESTAR HOLDING CORPORATION
RECONCILIATION OF NON GAAP FINANCIAL MEASURES
(Amounts in thousands, except share data)
(Unaudited)
June 30, December 31,
2014 2013 2013
Tangible Common Equity
Total stockholder's equity $ 57,940 $ 54,430 $ 55,483
Adjustments:
Goodwill 2,684 2,684 2,684
Core deposit intangible 552 593 573
Tangible common equity $ 54,704 $ 51,153 $ 52,226
Tangible Assets
Total Assets $ 729,070 $ 530,583 $ 634,946
Adjustments:
Goodwill 2,684 2,684 2,684
Core deposit intangible 552 593 573
Tangible Assets $ 725,834 $ 527,306 $ 631,689
Common shares outstanding 3,945,753 3,890,389 3,945,114
Tangible equity to tangible assets 7.54% 9.70% 8.27%
Book value per common share $ 14.68 $ 13.99 $ 14.06
Tangible book value per common share $ 13.86 $ 13.15 $ 13.24

CONTACT: For further information contact: Investar Holding Company John D'Angelo President and Chief Executive Officer (225) 448-5461 John.Dangelo@investarbank.com Investar Holding Company Chris Hufft Chief Accounting Officer (225) 227-2215 Chris.Hufft@investarbank.comSource:Investar Holding Company

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