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Investar Holding Corporation Announces 2014 Fourth Quarter Results

BATON ROUGE, La., Jan. 28, 2015 (GLOBE NEWSWIRE) -- Investar Holding Corporation (Nasdaq:ISTR) (the "Company"), the holding company for Investar Bank, today announced financial results for the quarter and year ended December 31, 2014. For the quarter ended December 31, 2014, the Company reported net income of $2.0 million, or $0.27 per diluted share, compared to $0.2 million, or $0.04 per diluted share for the quarter ended December 31, 2013. This represents an increase of $1.8 million, or 1,028%, in net income. For the year ended December 31, 2014, the Company reported net income of $5.4 million, or $0.93 per diluted share, compared to $3.2 million, or $0.81 per diluted share, for the year ended December 31, 2013. This represents an increase of $2.2 million, or 70.4%, in net income. After adjusting for the net effect of an investment in a tax credit entity, discussed in "Taxes" below, net income was $1.5 million, or $0.20 per diluted share, for the quarter ended December 31, 2014, compared to $0.2 million, or $0.04 per diluted share, for the comparable quarter in 2013, an increase in net income of 733.84%, or $0.16 per diluted share.

Investar Holding Corporation President and Chief Executive Officer John D'Angelo said, "Our board and management are very happy with our achievements and performance in 2014. We completed our IPO, realized a record year in profitability and loan originations and maintained a delinquency ratio significantly below our peers. We are very pleased with our organic growth and continue to drive more earnings to the bottom line as we grow into our infrastructure."

Performance Highlights

  • Increase in net income of $1.8 million, or 1,028%, compared to the fourth quarter of 2013.
  • Total assets were $879.4 million at December 31, 2014, an increase of $244.4 million, or 38.5%, from December 31, 2013.
  • Total gross loans increased $217.1 million, or 42.6%, to $726.2 million at December 31, 2014 from $509.1 million at December 31, 2013.
  • Commercial and industrial loans increased $21.5 million, or 65.9%, from December 31, 2013.
  • Return on average assets increased to 0.96% for the fourth quarter of 2014 compared to 0.12% for the fourth quarter of 2013.
  • Net interest income increased $7.7 million, or 40.4%, for the year ended December 31, 2014.
  • Net interest margin remained relatively stable at 3.84% for the fourth quarter of 2014 when compared to the third quarter of 2014.

Loans

Total loans were $622.8 million at December 31, 2014, an increase of $118.7 million, or 23.5%, from December 31, 2013.

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

Percentage Percentage Increase/(Decrease)
December 31, 2014 of Portfolio December 31, 2013 of Portfolio Amount Percent
Mortgage loans on real estate
Construction and land development $ 71,350 11.4% $ 63,170 12.5% $ 8,180 12.9%
1-4 Family 137,519 22.1 104,685 20.8 32,834 31.4
Multifamily 17,458 2.8 14,286 2.8 3,172 22.2
Farmland 2,919 0.5 830 0.2 2,089 251.7
Nonfarm, nonresidential
Owner occupied 119,668 19.2 78,415 15.6 41,253 52.6
Nonowner occupied 105,390 16.9 78,948 15.6 26,442 33.5
Commercial and industrial 54,187 8.7 32,665 6.5 21,522 65.9
Consumer 114,299 18.4 131,096 26.0 (16,797) (12.8)
Total loans 622,790 100% 504,095 100% 118,695 23.5%
Loans held for sale 103,396 5,029 98,367 1,956.0
Total gross loans $ 726,186 $ 509,124 $ 217,062 42.6%

Consumer loans, including consumer loans held for sale, totaled $214.0 million at December 31, 2014, an increase of 63.2% from $131.1 million at December 31, 2013. At December 31, 2013, there were no consumer loans held for sale. Due to the increase in production and the timing of loan pool sales, the Company increased its consumer held for sale portfolio to $99.7 million at December 31, 2014. Two loan pool sales totaling approximately $52.0 million were moved from the fourth quarter of 2014 to the first quarter of 2015 and have been completed subsequent to December 31, 2014.

At December 31, 2014, the Company's total business lending portfolio, which consists of loans secured by owner occupied nonfarm, nonresidential properties and commercial and industrial loans, was $173.9 million, an increase of $22.0 million, or 14.5%, compared to the business lending portfolio of $151.9 million at September 30, 2014 and an increase of $62.8 million, or 56.5%, compared to the business lending portfolio of $111.1 million at December 31, 2013.

We have reviewed our loan portfolio for exposure, directly or indirectly, to the potential negative impacts from the fluctuation in oil and gas prices. We have identified less than one percent of our total loan portfolio with a relationship to the energy sector. At December 31, 2014, none of the loans identified were past due. At this time, we are not concerned that decreases in oil and gas prices will negatively impact our borrowers' ability to service their debt. Our allowance for loan losses is continuously evaluated based on several factors, including economic conditions, and we believe that any potential negatively affected future cash flows related to these loans would be covered by our allowance for loan losses.

The provision for loan loss expense was $0.4 million for the fourth quarter of 2014, a decrease of $0.3 million compared to the fourth quarter of 2013. The allowance for loan losses was $4.6 million, or 138.61% and 0.74% of nonperforming loans and total loans, respectively, at December 31, 2014, compared to $3.4 million, or 227% and 0.67% of nonperforming loans and total loans, respectively, at December 31, 2013.

Nonperforming assets totaled $6.1 million at December 31, 2014, an increase of $1.1 million compared to December 31, 2013. The ratio of total nonperforming assets to total assets was 0.69% at December 31, 2014, compared to 0.79% at December 31, 2013.

Deposits

Total deposits at December 31, 2014 were $628.1 million, an increase of $95.5 million, or 17.9%, from December 31, 2013. The increase in total deposits was driven primarily by an increase of $11.4 million, or 19.4%, in noninterest bearing demand deposits after adjusting for a $14 million short term deposit made by a commercial customer in late December 2013 that was fully withdrawn in January 2014, an increase in NOW accounts of $39.5 million, or 51.1%, and an increase in time deposits of $46.9 million, or 17.8%, from December 31, 2013. We believe our deposit cross sell strategy continues to impact both noninterest bearing demand deposit and NOW account growth.

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

Percentage Percentage Increase/(Decrease)
December 31, 2014 of Portfolio December 31, 2013 of Portfolio Amount Percent
Noninterest bearing demand deposits $ 70,217 11.2% $ 72,795 13.7% $ (2,578) (3.50)%
NOW accounts 116,644 18.6 77,190 14.5 39,454 51.1
Money market deposit accounts 77,589 12.3 67,006 12.6 10,583 15.8
Savings accounts 53,332 8.5 52,177 9.8 1,155 2.2
Time deposits 310,336 49.4 263,438 49.4 46,898 17.8
Total deposits $ 628,118 100% $ 532,606 100% $ 95,512 17.9%

Net Interest Income

Net interest income for the fourth quarter of 2014 totaled $7.6 million, an increase of $2.0 million, or 35.2%, from the fourth quarter of 2013. The increase was a direct result of continued growth of the Company's loan portfolio with an increase in net interest income of $2.3 million due to an increase in volume offset by a $0.3 million decrease related to a reduction in yield when compared to the fourth quarter of 2013.

Net interest income for the year ended December 31, 2014 totaled $26.7 million, an increase of $7.7 million, or 40.4%, from the year ended December 31, 2013. This increase was also a direct result of continued growth of the Company's loan portfolio with an increase in net interest income of $9.2 million due to an increase in volume offset by a $1.5 million decrease related to a reduction in yield when compared to the year ended December 31, 2013.

The Company's net interest margin was 3.84% for the quarter ended December 31, 2014 compared to 3.86% for the third quarter of 2014 and 4.01% for the fourth quarter of 2013. The decrease in the net interest margin since 2013 can be attributed to lower yields on the real estate and consumer loan portfolios. The yield on interest earning assets was 4.47% for the quarter ended December 31, 2014 compared to 4.51% for the third quarter of 2014 and 4.72% for the fourth quarter of 2013. The cost of deposits declined one basis point when comparing the fourth quarter of 2014 to the third quarter of 2014, and declined three basis points when comparing the fourth quarter of 2014 to the fourth quarter of 2013.

The Company's net interest margin was 3.85% for the year ended December 31, 2014 compared to 4.10% for the year ended December 31, 2013. The decline in the interest margin can be attributed to lower yields primarily on the construction, multifamily and nonfarm, nonresidential loan portfolios.

Noninterest Income

Noninterest income for the fourth quarter of 2014 totaled $1.3 million, an increase of $0.4 million, or 36.7%, compared to the fourth quarter of 2013. Noninterest income, excluding securities gains, for the fourth quarter of 2014 totaled $1.2 million, an increase of $0.4 million, or 40.5% compared to the fourth quarter of 2013. The increase resulted primarily from the increase of $0.2 million in other operating income and the increase of $0.1 million in gain on sale of consumer loans.

Noninterest income for the year ended December 31, 2014 totaled $5.9 million, an increase of $0.5 million, or 9.5%, compared to the year ended December 31, 2013. Noninterest income, excluding securities gains and the $0.9 million bargain purchase gain recorded in the second quarter of 2013 in connection with the Company's acquisition of First Community Bank in May 2013, increased $1.5 million for the year ended December 31, 2014 compared to the year ended December 31, 2013 primarily as a result of the increase of approximately $1.4 million in gain on sale of consumer loans and increases in our servicing and other fee income offset by the $0.7 million decline in fee income on mortgage loans held for sale.

Noninterest Expense

Noninterest expense for the fourth quarter of 2014 totaled $7.0 million, an increase of $1.3 million, or 23.8%, compared to the fourth quarter of 2013. The increase in noninterest expense is primarily due to the $0.4 million increase in salaries and employee benefits, the $0.1 million increase in both occupancy and equipment expense and data processing expense and the $0.7 million increase in impairment on investment in tax credit entity recognized as a result of the Federal Historic Rehabilitation tax credit project completed in December 2014. The increases in salaries and benefits, occupancy and equipment and data processing expenses are attributable to the Company's expansion into the Lafayette, Louisiana region, which included the opening of a branch in the fourth quarter of 2013, the opening of the Highland Road branch in Baton Rouge, Louisiana on August 1, 2014 and the addition of 16 full-time equivalent employees.

Noninterest expense for the year ended December 31, 2014 totaled $24.4 million, an increase of $5.4 million, or 28.2%, compared to the year ended December 31, 2013. The increase is attributable to the full twelve months of expenses associated with the two branches that the Company acquired as a result of the First Community Bank acquisition in May 2013 and the Company's expansion into the Lafayette region, which included the opening of a branch during the fourth quarter 2013, as well as the additional expenses related to the opening of the Highland Road branch during the third quarter of 2014. Other factors include the impairment charge on the investment in the tax credit entity related to the Federal Historic Rehabilitation tax credit project, mentioned above, and the professional fees related to the Company's implementation of Sarbanes-Oxley compliance.

Basic Earnings Per Share and Diluted Earnings Per Share

The Company reported basic earnings per share and diluted earnings per share of $0.28 and $0.27, respectively, for the three months ended December 31, 2014, an increase of $0.08 and $0.07, respectively, compared to the three months ended September 30, 2014 and an increase of $0.23 and $0.23, respectively, when compared to the three months ended December 31, 2013.

The Company reported basic earnings per share and diluted earnings per share for the year ended December 31, 2014 of $0.98 and $0.93, an increase of $0.12 and $0.12, respectively, compared to the year ended December 31, 2013. Excluding the net effect of the Company's investment in the Federal Historic Rehabilitation tax credit project during the fourth quarter of 2014, diluted earnings per share for the year ended December 31, 2014 was $0.85, an increase of $0.23, after adjusting for the bargain purchase gain and acquisition related expenses for the year ended December 31, 2013.

Taxes

The Company recorded income tax (benefit) expense of $(0.5) million and $1.1 million for the quarter and year ended December 31, 2014, respectively, which equates to an effective tax rate of (32.4)% and 17.5%, respectively. During the fourth quarter of 2014, the Company invested in a tax credit entity whose purpose was to invest in a Federal Historic Rehabilitation tax credit project. As a result of the investment, the Company recognized a tax credit of $1.0 million, reducing tax expense for the quarter and year ended December 31, 2014, as well as a corresponding impairment on the investment in the tax credit entity of $0.7 million. Due to the net effect of the investment, the Company experienced an effective tax rate below the statutory rate of 35%.

About Investar Holding Corporation

Investar Holding Corporation, headquartered in Baton Rouge, Louisiana, provides full banking services, excluding trust services, through its wholly-owned banking subsidiary, Investar Bank, a state chartered bank. The Company's primary market is South Louisiana and it currently operates 11 full service banking offices located throughout its market. At December 31, 2014, the Company had 179 full-time equivalent employees.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States of America, or GAAP. These measures and ratios include "tangible 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
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
December 31, 2014 December 31, 2013
(Unaudited)
ASSETS
Cash and due from banks $ 5,519 $ 5,964
Interest bearing balances due from other banks 13,493 21,739
Federal funds sold 500 500
Cash and cash equivalents 19,512 28,203
Available for sale securities at fair value (amortized cost of $69,838 and $56,733, respectively) 70,299 56,173
Held to maturity securities at amortized cost (estimated fair value of $22,301 and $5,986, respectively) 22,519 6,579
Loans held for sale 103,396 5,029
Loans, net of allowance for loan losses of $4,630 and $3,380, respectively 618,160 500,715
Other equity securities 5,566 2,020
Bank premises and equipment, net of accumulated depreciation of $4,745 and $2,679, respectively 28,538 24,680
Real estate owned, net 2,735 3,515
Accrued interest receivable 2,435 1,835
Deferred tax asset 1,097 1,205
Goodwill 2,684 2,684
Other assets 2,413 2,308
Total assets $ 879,354 $ 634,946
LIABILITIES
Deposits
Noninterest bearing $ 70,217 $ 72,795
Interest bearing 557,901 459,811
Total deposits 628,118 532,606
Advances from Federal Home Loan Bank 125,785 30,818
Repurchase agreements 12,293 10,203
Note payable 3,609 3,609
Accrued interest payable 284 285
Accrued taxes and other liabilities 5,881 1,942
Total liabilities 775,970 579,463
STOCKHOLDERS' EQUITY
Common stock, $1.00 par value per share; 40,000,000 shares authorized; 7,262,085 and 3,945,114 shares issued and outstanding, respectively 7,264 3,943
Treasury stock (23)
Surplus 84,213 45,281
Retained earnings 11,809 6,609
Accumulated other comprehensive income (loss) 121 (350)
Total stockholders' equity 103,384 55,483
Total liabilities and stockholders' equity $ 879,354 $ 634,946
INVESTAR HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share data)
(Unaudited)
Three months ended Twelve months ended
December 31, December 31,
2014 2013 2014 2013
INTEREST INCOME
Interest and fees on loans $ 8,384 $ 6,355 $ 29,979 $ 21,686
Interest on investment securities:
Taxable interest income 322 155 945 402
Exempt from federal income taxes 100 87 394 354
Other interest income 16 8 51 30
Total interest income 8,822 6,605 31,369 22,472
INTEREST EXPENSE
Interest on deposits 1,135 920 4,273 3,204
Interest on borrowings 110 82 402 256
Total interest expense 1,245 1,002 4,675 3,460
Net interest income 7,577 5,603 26,694 19,012
Provision for loan losses 430 686 1,628 1,026
Net interest income after provision for loan losses 7,147 4,917 25,066 17,986
NONINTEREST INCOME
Service charges on deposit accounts 84 61 305 214
Gain on sale of investment securities, net 111 105 340 449
(Loss) gain on sale of real estate owned, net (7) 230 97
Gain on sale of loans, net 226 109 1,659 247
Gain on sale of fixed assets, net 3 2
Bargain purchase gain 906
Fee income on mortgage loans held for sale, net 501 518 2,119 2,843
Other operating income 410 176 1,204 596
Total noninterest income 1,325 969 5,860 5,354
Income before noninterest expense 8,472 5,886 30,926 23,340
NONINTEREST EXPENSE
Salaries and employee benefits 3,830 3,393 14,565 11,772
Occupancy expense and equipment expense, net 638 519 2,428 1,899
Bank shares tax 56 111 299 280
FDIC and OFI assessments 167 99 531 344
Legal fees 36 20 125 126
Data processing 349 206 1,289 847
Advertising 89 89 330 320
Stationery and supplies 35 66 167 226
Software amortization and expense 156 126 537 406
Professional fees 130 156 475 355
Telephone expense 44 48 179 150
Business entertainment 32 31 135 86
Impairment on investment in tax credit entity 690 690
Other operating expenses 703 754 2,634 2,213
Total noninterest expense 6,955 5,618 24,384 19,024
Income before income tax expense 1,517 268 6,542 4,316
Income tax (benefit) expense (491) 90 1,145 1,148
Net income $ 2,008 $ 178 $ 5,397 $ 3,168
EARNINGS PER SHARE
Basic earnings per share $ 0.28 $ 0.05 $ 0.98 $ 0.86
Diluted earnings per share $ 0.27 $ 0.04 $ 0.93 $ 0.81
Cash dividends declared per common share $ 0.01 $ 0.01 $ 0.04 $ 0.05
INVESTAR HOLDING CORPORATION
EARNINGS PER COMMON SHARE
(Amounts in thousands, except share data)
(Unaudited)
Three months ended
December 31,
Twelve months ended
December 31,
2014 2013 2014 2013
Net income available to common shareholders $ 2,008 $ 178 $ 5,397 $ 3,168
Weighted average number of common shares outstanding – used in computation of basic earnings per common share 7,213,416 3,900,752 5,533,514 3,667,929
Effect of dilutive securities:
Restricted stock 33,377 44,042 41,467 32,141
Stock options 22,811 28,531 22,811 29,773
Stock warrants 141,900 193,498 179,510 193,532
Weighted average number of common shares outstanding plus effect of dilutive securities used in computation of diluted earnings per common share 7,411,504 4,166,823 5,777,302 3,923,375
Basic earnings per share $ 0.28 $ 0.05 $ 0.98 $ 0.86
Diluted earnings per share $ 0.27 $ 0.04 $ 0.93 $ 0.81
INVESTAR HOLDING CORPORATION
SUMMARY FINANCIAL INFORMATION
(Amounts in thousands, except share data)
(Unaudited)
Twelve months ended
December 31,
Q4 2014 Q3 2014 Q4 2013 Qtr/Qtr Year/Year 2014 2013
EARNINGS DATA
Total interest income $ 8,822 $ 8,182 $ 6,605 7.82% 33.57% $ 31,369 $ 22,472
Total interest expense 1,245 1,182 1,002 5.33% 24.25% 4,675 3,460
Net interest income 7,577 7,000 5,603 8.24% 35.23% 26,694 19,012
Provision for loan losses 430 505 686 -14.85% -37.32% 1,628 1,026
Total noninterest income 1,325 1,959 969 -32.36% 36.74% 5,860 5,354
Total noninterest expense 6,955 6,313 5,618 10.17% 23.80% 24,384 19,024
Income before income taxes 1,517 2,141 268 -29.15% 466.04% 6,542 4,316
Income tax expense (491) 699 90 -170.24% -645.56% 1,145 1,148
Net income $ 2,008 $ 1,442 $ 178 39.25% 1028.09% $ 5,397 $ 3,168
AVERAGE BALANCE SHEET DATA
Total assets $ 826,369 $ 762,330 $ 592,403 8.40% 39.49% $ 734,977 $ 496,685
Total interest-earning assets 782,868 719,985 554,853 8.73% 41.09% 693,334 463,616
Total loans 675,305 619,356 483,504 9.03% 39.67% 601,238 405,997
Total interest-bearing deposits 553,603 523,075 432,043 5.84% 28.14% 515,433 363,907
Total interest-bearing liabilities 641,611 585,015 477,410 9.67% 34.39% 583,158 396,524
Total deposits 628,837 594,519 488,755 5.77% 28.66% 583,072 411,471
Total shareholders' equity 102,781 100,068 55,214 2.71% 86.15% 79,371 51,070
PER SHARE DATA
Basic earnings per share $ 0.28 $ 0.20 $ 0.05 40.00% 513.60% $ 0.98 $ 0.86
Diluted earnings per share 0.27 0.20 0.04 35.00% 532.05% 0.93 0.81
Book value per share 14.24 14.08 14.06 1.14% 1.28% 14.24 14.06
Tangible book value per share (1) 13.79 13.64 13.24 1.10% 4.15% 13.79 13.24
Common shares outstanding 7,262,085 7,253,774 3,945,114 0.11% 84.08% 7,262,085 3,945,114
PERFORMANCE RATIOS
Return on average assets 0.96% 0.75% 0.12% 28.00 % 700.00% 0.73% 0.64%
Adjusted return on average assets (1) 0.71% 0.75% 0.12% -5.12 % 497.76% 0.66% 0.50%
Return on average equity 7.75% 5.72% 1.28% 35.49 % 505.47% 6.80% 6.10%
Adjusted return on average equity (1) 5.72% 5.72% 1.28% 0.14 % 347.94% 6.12% 4.85%
Net interest margin 3.84% 3.86% 4.01% -0.52 % -4.24% 3.85% 4.10%
Net interest income to average assets 3.64% 3.64% 3.75% 0.00 % -2.93% 3.63% 3.83%
Noninterest expense to average assets 3.34% 3.29% 3.76% 1.52 % -11.17% 3.32% 3.83%
Efficiency ratio (1) 78.13% 70.47% 85.46% 10.87 % -8.58% 74.90% 78.07%
Adjusted efficiency ratio (1) 70.38% 70.47% 85.46% -0.12 % -17.65% 72.78% 80.02%
Dividend payout ratio 2.51% 3.40% 26.27% -26.18 % -90.45% 3.93% 5.44%
Twelve months ended December 31,
2014 2013 Year/Year
ASSET QUALITY RATIOS
Nonperforming assets to total assets 0.69% 0.79% -12.66%
Nonperforming loans to loans 0.54% 0.30% 80.00%
Allowance for loan losses to total loans 0.74% 0.67% 10.45%
Allowance for loan losses to nonperforming loans 138.61% 227% -38.94%
Net chargeoffs to average loans 0.07% 0.09% -22.22%
CAPITAL RATIOS
Investar Holding Corporation:
Total equity to total assets 11.76% 8.74% 34.55%
Tangible equity to tangible assets 11.43% 8.27% 38.21%
Tier 1 capital to average assets 12.61% 9.53% 32.32%
Tier 1 capital to risk-weighted assets 13.79% 10.85% 27.10%
Total capital to risk-weighted assets 14.41% 11.51% 25.20%
Investar Bank:
Tier 1 capital to average assets 9.00% 9.50% -5.26%
Tier 1 capital to risk-weighted assets 9.86% 10.83% -8.96%
Total capital to risk-weighted assets 10.48% 11.48% -8.71%
(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 December 31,
2014 2013
Average
Balance
Interest
Income/
Expense
Yield/ Rate Average
Balance
Interest
Income/
Expense
Yield/ Rate
Assets
Interest-earning assets:
Loans $ 675,305 $ 8,384 4.93% $ 483,504 $ 6,355 5.21%
Securities:
Taxable 79,354 322 1.61 47,679 155 1.29
Tax-exempt 11,508 100 3.45 14,830 87 2.33
Interest-bearing balances with banks 16,701 16 0.38 8,840 8 0.36
Total interest-earning assets 782,868 8,822 4.47 554,853 6,605 4.72
Cash and due from banks 5,306 6,029
Intangible assets 3,220 3,261
Other assets 39,427 31,052
Allowance for loan losses (4,452) (2,792)
Total assets $ 826,369 $ 592,403
Liabilities and shareholders' equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand $ 189,758 $ 294 0.61% $ 136,489 $ 218 0.63%
Savings deposits 54,192 92 0.67 51,106 90 0.70
Time deposits 309,653 749 0.96 244,448 612 0.99
Total interest-bearing deposits 553,603 1,135 0.81 432,043 920 0.84
Short-term borrowings 41,816 18 0.17 10,108 3 0.12
Long-term debt 46,192 92 0.79 35,259 79 0.89
Total interest-bearing liabilities 641,611 1,245 0.77 477,410 1,002 0.83
Noninterest-bearing deposits 75,234 56,712
Other liabilities 6,743 3,067
Stockholders' equity 102,781 55,214
Total liability and stockholders' equity $ 826,369 $ 592,403
Net interest income/net interest margin $ 7,577 3.84% $ 5,603 4.01%
INVESTAR HOLDING CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS
(Amounts in thousands)
(Unaudited)
Twelve months ended December 31,
2014 2013
Average
Balance
Interest
Income/
Expense
Yield/ Rate Average
Balance
Interest
Income/
Expense
Yield/ Rate
Assets
Interest-earning assets:
Loans $ 601,238 $ 29,979 4.99% $ 405,997 $ 21,686 5.34%
Securities:
Taxable 66,384 945 1.42 39,957 414 1.04
Tax-exempt 12,652 394 3.11 14,685 354 2.41
Interest-bearing balances with banks 13,060 51 0.39 2,977 18 0.60
Total interest-earning assets 693,334 31,369 4.52 463,616 22,472 4.85
Cash and due from banks 5,668 7,285
Intangible assets 3,235 3,124
Other assets 36,617 25,397
Allowance for loan losses (3,877) (2,737)
Total assets $ 734,977 $ 496,685
Liabilities and shareholders' equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand $ 173,715 $ 1,078 0.62% $ 113,097 $ 726 0.64%
Savings deposits 52,881 361 0.68 42,774 299 0.70
Time deposits 288,837 2,834 0.98 208,036 2,179 1.05
Total interest-bearing deposits 515,433 4,273 0.83 363,907 3,204 0.88
Short-term borrowings 28,349 54 0.19 7,627 12 0.16
Long-term debt 39,376 348 0.88 24,990 244 0.98
Total interest-bearing liabilities 583,158 4,675 0.80 396,524 3,460 0.87
Noninterest-bearing deposits 67,639 47,564
Other liabilities 4,809 1,527
Stockholders' equity 79,371 51,070
Total liability and stockholders' equity $ 734,977 $ 496,685
Net interest income/net interest margin $ 26,694 3.85% $ 19,012 4.10%
INVESTAR HOLDING CORPORATION
RECONCILIATION OF NON GAAP FINANCIAL MEASURES
(Amounts in thousands, except share data)
(Unaudited)
December 31,
2014 2013
Tangible common equity
Total stockholder's equity $ 103,384 $ 55,483
Adjustments:
Goodwill 2,684 2,684
Core deposit intangible 532 573
Tangible common equity $ 100,168 $ 52,226
Tangible assets
Total assets $ 879,354 $ 634,946
Adjustments:
Goodwill 2,684 2,684
Core deposit intangible 532 573
Tangible assets $ 876,138 $ 631,689
Common shares outstanding 7,262,085 3,945,114
Tangible equity to tangible assets 11.43% 8.27%
Book value per common share $ 14.24 $ 14.06
Tangible book value per common share $ 13.79 $ 13.24
INVESTAR HOLDING CORPORATION
RECONCILIATION OF NON GAAP FINANCIAL MEASURES
(Amounts in thousands, except share data)
(Unaudited)
Three months ended
December 31,
Three months ended
September 30,
Twelve months ended
December 31,
2014 2013 2014 2014 2013
Net interest income (a) $ 7,577 $ 5,603 $ 7,000 $ 26,694 $ 19,012
Provision for loan losses (b) 430 686 505 1,628 1,026
Net interest income after provision for loan losses 7,147 4,917 6,495 25,066 17,986
Noninterest income (c) 1,325 969 1,959 5,860 5,354
Bargain purchase gain (906)
Adjusted noninterest income 1,325 969 1,959 5,860 4,448
Adjusted income before noninterest expense (d) 8,472 5,886 8,454 30,926 22,434
Total noninterest expense (e) 6,955 5,618 6,313 24,384 19,024
Acquisition related expense (250)
Impairment related to investment in tax credit entity (690) (690)
Adjusted noninterest expense (f) 6,265 5,618 6,313 23,694 18,774
Adjusted income before income tax expense 2,207 268 2,141 7,232 3,660
Adjusted income tax expense (1) 724 90 699 2,372 1,184
Adjusted net income 1,483 178 1,442 4,860 2,476
Diluted earnings per share (GAAP) $ 0.27 $ 0.04 $ 0.20 $ 0.93 $ 0.81
Bargain purchase gain (0.23)
Acquisition related expense 0.04
Impairment related to investment in tax credit entity 0.06 0.08
Tax credit related to historical tax credit project (0.13) (0.16)
Adjusted diluted earnings per share $ 0.20 $ 0.04 $ 0.20 $ 0.85 $ 0.62
Efficiency ratio (e) / (a+c) 78.13% 85.46% 70.47% 74.90% 78.07%
Adjusted efficiency ratio(2) (f) / (b+d) 70.38% 85.46% 70.47% 72.78% 80.02%
Adjusted return on average assets (2) 0.71% 0.12% 0.75% 0.66% 0.50%
Adjusted return on average equity (2) 5.72% 1.28% 5.72% 6.12% 4.85%
Total average assets $ 826,369 $ 592,403 $ 762,330 $ 734,977 $ 496,685
Total average stockholders' equity $ 102,781 $ 55,214 $ 100,068 $ 79,371 $ 51,070
(1) Income tax expense is calculated on the adjusted non-GAAP effective tax rate of 32.8% for the three and twelve month periods ended December 31, 2014. Income tax expense is calculated on the adjusted non-GAAP effective tax rate of 32.3% for the twelve month period ended December 31, 2013.
(2) Adjusted for the net effect of the investment in the tax credit entity for the three and twelve month periods ended December 31, 2014 and the impact of the bargain purchase gain and acquisition expenses incurred during the twelve month period ended December 31, 2013.

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