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Investar Holding Corporation Announces 2016 Third Quarter Results

BATON ROUGE, La., Oct. 27, 2016 (GLOBE NEWSWIRE) -- Investar Holding Corporation (NASDAQ:ISTR) (the “Company”), the holding company for Investar Bank (the “Bank”), today announced financial results for the quarter ended September 30, 2016. The Company reported net income of $2.0 million, or $0.29 per diluted share for the third quarter of 2016, compared to $2.0 million, or $0.28 per diluted share for the quarter ended June 30, 2016, and $1.8 million, or $0.26 per diluted share, for the quarter ended September 30, 2015.

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

“We are pleased to have had another great quarter. Our focus on relationship banking continues to positively impact noninterest-bearing demand deposit growth, with 24.3% year-to-date growth. Also during the quarter, we repurchased over 80,000 shares of our common stock, delivering on our commitment to increase shareholder value.

Our prayers go out to those families and businesses affected by the record flooding that occurred in the greater Baton Rouge and surrounding areas in August. While none of our branches were significantly affected by the flood waters, some of our employees and their extended families were greatly impacted. As a member of the affected communities, we have set up programs to help employees and customers experiencing financial difficulty as a result of the flood. We will continue to assist the communities in any way that we can as they rebuild.”

Third Quarter Highlights

  • Total loans, excluding loans held for sale, increased 13.6% year to date, or 18.1% annualized. Total loans, excluding loans held for sale, increased $29.3 million, or 3.6%, compared to June 30, 2016, and increased $136.3 million, or 19.2%, compared to September 30, 2015, to $846.8 million at September 30, 2016.
  • The business lending portfolio, which consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans, was $250.3 million at September 30, 2016, an increase of $23.7 million, or 10.5%, compared to $226.6 million at June 30, 2016, and an increase of $50.2 million, or 25.1%, compared to $200.1 million at September 30, 2015.
  • Total noninterest-bearing deposits were $112.4 million at September 30, 2016, an increase of $2.6 million, or 2.4%, compared to June 30, 2016, and an increase of $17.9 million, or 20.7%, compared to September 20, 2015.
  • Total interest income increased $0.3 million, or 2.6%, compared to the quarter ended June 30, 2016, and increased $1.5 million, or 16.0%, compared to the quarter ended September 30, 2015, to $11.0 million for the quarter ended September 30, 2016.
  • Net charge-offs remain low, averaging 0.02% of total loans for the past eight quarters.
  • The Company repurchased 80,773 shares of the Company’s common stock through its stock repurchase program at an average price of $15.34 during the quarter ended September 30, 2016, leaving approximately 29,000 shares available for repurchase. In addition, on October 19, 2016, the board approved an additional 250,000 shares for repurchase under its stock repurchase program.
  • The Bank continues to invest in relationship banking through the hiring of an experienced Treasury Management Officer focused on the Baton Rouge market.

Loans

Total loans were $846.8 million at September 30, 2016, an increase of $29.3 million, or 3.6%, compared to June 30, 2016, and an increase of $136.3 million, or 19.2%, compared to September 30, 2015.

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

Linked Qtr Change Year/Year Change Percentage of Total Loans
9/30/2016 6/30/2016 9/30/2015 $ % $ % 9/30/2016 9/30/2015
Mortgage loans on real estate
Construction and development $92,355 $101,080 $79,796 $(8,725) -8.6% $12,559 15.7% 10.9% 11.2%
1-4 Family 175,392 166,778 154,277 8,614 5.2 21,115 13.6 20.7 21.7
Multifamily 42,560 37,300 24,484 5,260 14.1 18,076 73.8 5.0 3.5
Farmland 8,281 8,343 3,009 (62) (0.7) 5,272 175.2 1.0 0.4
Commercial real estate
Owner-occupied 172,952 151,464 132,419 21,488 14.2 40,533 30.6 20.5 18.7
Nonowner-occupied 192,270 180,842 126,555 11,428 6.3 65,715 51.9 22.7 17.8
Commercial and industrial 77,312 75,103 67,671 2,209 2.9 9,641 14.2 9.1 9.5
Consumer 85,706 96,560 122,350 (10,854) (11.2) (36,644) 30.0 10.1 17.2
Total loans 846,828 817,470 710,561 29,358 3.6% 136,267 19.2% 100% 100%
Loans held for sale 40,553 46,717 55,653 (6,164) (13.2) (15,100) (26.9)
Total gross loans $887,381 $864,187 $766,214 $23,194 2.7% $121,167 15.8%

Consumer loans, including consumer loans held for sale, totaled $126.3 million at September 30, 2016, a decrease of $17.0 million, or 11.9%, compared to $143.3 million at June 30, 2016, and a decrease of $49.4 million, or 28.1%, compared to $175.7 million at September 30, 2015. The decrease compared to the linked quarter is mainly attributable to principal payments on consumer loan balances. Since the Bank discontinued accepting indirect auto loan applications at the end of 2015, which was the primary source of its consumer loan portfolio and consumer loans held for sale, the consumer loan portfolio is expected to decrease over time. The Bank currently has the intent and ability to sell the balance of the consumer loans classified as held for sale at September 30, 2016, however, if this classification were to change, the loans would be transferred to the consumer loan portfolio.

At September 30, 2016, the Company’s total business lending portfolio, which consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans, was $250.3 million, an increase of $23.7 million, or 10.5%, compared to the business lending portfolio of $226.6 million at June 30, 2016 and an increase of $50.2 million, or 25.1%, compared to the business lending portfolio of $200.1 million at September 30, 2015.

Credit Quality

Nonperforming loans were $9.0 million, or 1.06% of total loans, at September 30, 2016, an increase of $3.5 million, or 63.7%, compared to $5.5 million, or 0.67% of total loans, at June 30, 2016, and an increase of $6.4 million, or 243%, compared to $2.6 million, or 0.37% of total loans, at September 30, 2015. The allowance for loan losses was $7.4 million, or 82.4% and 0.87% of nonperforming loans and total loans, respectively, at September 30, 2016, compared to $7.1 million, or 129.6% and 0.87% of nonperforming loans and total loans, respectively, at June 30, 2016, and $5.9 million, or 226.4% and 0.83% of nonperforming loans and total loans, respectively, at September 30, 2015. The allowance for loan losses plus the fair value marks on acquired loans was 0.95% of total loans at September 30, 2016 compared to 0.95% at June 30, 2016 and 0.93% at September 30, 2015. The increase in nonperforming loans and the decrease in the allowance for loan losses as a percentage of nonperforming loans at September 30, 2016 when compared to both June 30, 2016 and September 30, 2015 are mainly attributable to a $4.7 million owner-occupied commercial real estate relationship. Management has evaluated the loan relationship and has recorded a specific reserve of approximately $0.5 million in the allowance for loan losses. Also included in nonperforming loans is a $2.6 million commercial and industrial loan relationship not related to the oil and gas industry that was placed on nonaccrual status in the second quarter of 2016, as mentioned in a prior release. The Company has determined that a specific reserve is no longer required on the loan as it believes sufficient collateral exists after receiving additional cash collateral from the borrower. Subsequent to the end of the third quarter, the Company received a $0.5 million principal pay-down on this loan relationship. A bankruptcy plan was accepted by the borrower’s creditors and the Company does not expect a loss on this loan at this time. As a result of the loan remaining current throughout the bankruptcy process and the additional cash collateral, the Company anticipates the loan to be placed back on accrual during the fourth quarter.

The Company has instituted a 90-day loan deferral program for customers who were impacted by the flood and has allocated a portion of its general reserves to the potential impact as a result of the flood. The Company placed approximately $23.5 million, or 2.8% of the total loan portfolio on a 90-day deferral plan. The Company continues to assess the impact the flooding may have on the region and its loan portfolio to determine the need for specific or additional general reserves.

The provision for loan loss expense was $0.5 million for the third quarter of 2016, a decrease of $0.4 million and an increase of $0.1 million compared to June 30, 2016 and September 30, 2015, respectively. The decrease in the provision for loan loss expense for the third quarter of 2016 when compared to the second quarter of 2016 is attributable to the specific reserve that was recorded during the second quarter for the commercial and industrial loan relationship mentioned above.

Management continues to monitor the Company’s loan portfolio for exposure to potential negative impacts of suppressed oil and gas prices. We consider our exposure to the energy sector not to be significant, at less than one percent of the total loan portfolio at September 30, 2016. However, should the price of oil and gas decline further and/or remain at the current low price for an extended period, the general economic conditions in our south Louisiana markets could be negatively affected and could negatively impact borrowers’ ability to service their debt. Management continually evaluates the allowance for loan losses based on several factors, including economic conditions, and currently believes that any potential negatively affected future cash flows related to these loans would be covered by the current allowance for loan losses.

Deposits

Total deposits at September 30, 2016 were $907.0 million, an increase of $39.8 million, or 4.6%, compared to June 30, 2016 and an increase of $176.6 million, or 25.0%, compared to September 30, 2015. The increase in total deposits was driven by an increase in noninterest-bearing deposits of $17.9 million, or 20.7%, an increase in money market accounts of $27.9 million, or 30.3%, and an increase in time deposits of $115.4 million, or 33.6%, compared to September 30, 2015.

The Company’s focus on relationship banking continues to positively impact noninterest-bearing demand deposit growth.

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

Linked Qtr Change Year/Year Change Percentage of
Total Deposits
9/30/2016 6/30/2016 9/30/2015 $ % $ % 9/30/2016 9/30/2015
Noninterest-bearing demand deposits $112,414 $109,828 $94,533 $2,586 2.4% $17,881 20.7% 12.4% 12.9%
NOW accounts 150,551 139,893 132,739 10,658 7.6 17,812 13.6 16.6 18.2
Money market deposit accounts 123,487 108,552 95,584 14,935 13.8 27,903 30.3 13.6 13.1
Savings accounts 51,332 52,899 53,717 (1,567) (3.0) (2,385) (4.5) 5.7 7.3
Time deposits 469,267 456,033 353,861 13,234 2.9 115,406 33.6 51.7 48.5
Total deposits $907,051 $867,205 $730,434 $39,846 4.6% $176,617 25.0% 100% 100%

Net Interest Income

Net interest income for the third quarter of 2016 totaled $8.8 million, an increase of $0.1 million, or 1.1 %, compared to the second quarter of 2016, and an increase of $0.8 million, or 10.1%, compared to the third quarter of 2015. The increase was a direct result of continued growth of the Company’s loan portfolio with an increase in net interest income of $1.2 million due to an increase in volume offset by a $0.4 million decrease related to a reduction in yield compared to the third quarter of 2015.

The Company’s net interest margin was 3.23% for the quarter ended September 30, 2016 compared to 3.38% for the second quarter of 2016 and 3.52% for the third quarter of 2015. The yield on interest-earning assets was 4.06% for the quarter ended September 30, 2016 compared to 4.18% for the second quarter of 2016 and 4.20% for the third quarter of 2015. The decrease in net interest margin and yield on interest-earning assets when compared to the second quarter of 2016 is mainly attributable to the increase in nonaccrual loans during the third quarter, as discussed in Credit Quality above, as well as the decline in the yields on investment securities due to an increase in pay-downs of securities with unamortized premiums.

The cost of deposits increased two basis points for the quarter ended September 30, 2016 compared to the second quarter of 2016, and increased thirteen basis points compared to the third quarter of 2015. The increase in the cost of deposits when compared to the third quarter of 2015 is primarily a result of increases in time deposit rates. During the third quarter of 2016, the Company began lowering its rates on time deposits in an effort to begin reducing its cost of funds. Subsequent to the end of the quarter, time deposit rates have been lowered further as we attempt to improve our funding costs.

Noninterest Income

Noninterest income for the third quarter of 2016 totaled $1.0 million, a decrease of $1.2 million, or 54.4%, compared to the second quarter of 2016, and a decrease of $1.1 million, or 52.5%, compared to the third quarter of 2015. The decrease in noninterest income when compared to the quarter ended June 30, 2016 is mainly attributable to the $1.3 million gain on sale of fixed assets recognized for the sale of the land and building of one of the Bank’s branch locations to a healthcare company in the second quarter. The decrease in noninterest income when compared to the third quarter of 2015 is mainly due to the $1.0 million decrease in the gain on sale of loans. Since exiting the indirect auto loan origination business at the end of 2015, the Bank has experienced decreased loan sales and has ceased originations of consumer loans held for sale. The Bank does intend to sell the balance of the consumer loans held for sale at September 30, 2016, however, it expects the gain on sale of loans to diminish over time.

Noninterest Expense

Noninterest expense for the third quarter of 2016 totaled $6.5 million, a decrease of $0.6 million, or 7.8%, compared to the second quarter of 2016, and a decrease of $0.5 million, or 6.6%, compared to the third quarter of 2015. The decrease in noninterest expense compared to the second quarter of 2016 is primarily due to $0.6 million in customer reimbursements that we paid to certain borrowers during the second quarter. The decrease in noninterest expense compared to the third quarter of 2015 is mainly due to a $0.2 million decrease in salaries and benefits and a $0.4 million decrease in other operating expenses.

Along with its normal operating expenses, during the third quarter of 2016 the Company recorded additional expense in other operating expenses of approximately $31,000 related to employee and community assistance as a result of the August flooding.

Basic Earnings Per Share and Diluted Earnings Per Share

The Company reported both basic and diluted earnings per share of $0.29 for the three months ended September 30, 2016, an increase of $0.03, compared to basic and diluted earnings per share of $0.26 for the three months ended September 30, 2015.

Taxes

The Company recorded income tax expense of $0.7 million for the quarter ended September 30, 2016, which equates to an effective tax rate of 26.8%. The Company recorded a $0.1 million tax benefit during the quarter related to the filing of its 2015 tax return which contributed to the lower effective tax rate during the quarter. Management expects the effective income tax rate to approximate 32.5% for the fourth quarter of 2016.

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 10 full service banking offices located throughout its market. At September 30, 2016, the Company had 155 full-time equivalent employees.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States of America, or GAAP. These measures and ratios include “tangible common equity,” “tangible assets,” “tangible equity to tangible assets,” and “tangible book value per common share.” Management believes these non-GAAP financial measures provide information useful to investors in understanding the Company’s financial results, and the Company believes that its presentation, together with the accompanying reconciliations, provide a more complete understanding of factors and trends affecting the Company’s business and allow investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and the Company strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. A reconciliation of the non-GAAP financial measures disclosed in this press release to the comparable GAAP financial measures is included at the end of the financial statement tables.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance. The Company generally identifies forward-looking statements by terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to the Company’s operations, financial results, financial condition, business prospects, growth strategy and liquidity. If one or more of these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. The Company does not undertake any obligation to publicly update or 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:

  • business and economic conditions generally and in the financial services industry in particular, whether nationally, regionally or in the markets in which we operate;
  • our ability to achieve organic loan and deposit growth, and the composition of that growth;
  • changes (or the lack of changes) in interest rates, yield curves and interest rate spread relationships that affect our loan and deposit pricing;
  • the extent of continuing client demand for the high level of personalized service that is a key element of our banking approach as well as our ability to execute our strategy generally;
  • our dependence on our management team, and our ability to attract and retain qualified personnel;
  • changes in the quality or composition of our loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers and including the potential impact on our borrowers of the August 2016 flooding in Baton Rouge and surrounding areas;
  • inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates;
  • the concentration of our business within our geographic areas of operation in Louisiana; and
  • concentration of credit exposure.

These factors should not be construed as exhaustive. Additional information on these and other risk factors can be found in Item 1A. “Risk Factors” and Item 7. “Special Note Regarding Forward-Looking Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission.

INVESTAR HOLDING CORPORATION
SUMMARY FINANCIAL INFORMATION
(Amounts in thousands, except share data)
(Unaudited)
As of and for the three months ended
9/30/2016 6/30/2016 9/30/2015 Linked Quarter Year/Year
EARNINGS DATA
Total interest income $10,993 $10,719 $9,480 2.6% 16.0%
Total interest expense 2,240 2,061 1,528 8.7% 46.6%
Net interest income 8,753 8,658 7,952 1.1% 10.1%
Provision for loan losses 450 800 400 -43.8% 12.5%
Total noninterest income 1,029 2,256 2,167 -54.4% -52.5%
Total noninterest expense 6,548 7,104 7,013 -7.8% -6.6%
Income before income taxes 2,784 3,010 2,706 -7.5% 2.9%
Income tax expense 747 1,005 850 -25.7% -12.1%
Net income $2,037 $2,005 $1,856 1.6% 9.8%
AVERAGE BALANCE SHEET DATA
Total assets $1,134,591 $1,086,604 $944,234 4.4% 20.2%
Total interest-earning assets 1,075,145 1,028,360 895,208 4.5% 20.1%
Total loans 840,028 800,710 692,196 4.9% 21.4%
Total gross loans 874,272 852,475 777,080 2.6% 12.5%
Total interest-bearing deposits 784,591 739,678 634,232 6.1% 23.7%
Total interest-bearing liabilities 905,521 866,386 738,612 4.5% 22.6%
Total deposits 887,327 835,215 721,657 6.2% 23.0%
Total stockholders’ equity 113,056 112,035 107,795 0.9% 4.9%
PER SHARE DATA
Earnings:
Basic earnings per share $0.29 $0.28 $0.26 3.6% 11.5%
Diluted earnings per share 0.29 0.28 0.26 3.6% 11.5%
Book value per share 15.93 15.63 14.88 1.9% 7.1%
Tangible book value per share(1) 15.47 15.18 14.45 1.9% 7.1%
Common shares outstanding 7,131,186 7,214,734 7,264,261 -1.2% -1.8%
PERFORMANCE RATIOS
Return on average assets 0.71% 0.74% 0.78% -4.1% -9.0%
Return on average equity 7.15% 7.18% 6.83% -0.4% 4.7%
Net interest margin 3.23% 3.38% 3.52% -4.4% -8.2%
Net interest income to average assets 3.06% 3.20% 3.34% -4.4% -8.4%
Noninterest expense to average assets 2.29% 2.62% 2.95% -12.6% -22.4%
Efficiency ratio(2) 66.94% 65.09% 69.31% 2.8% -3.4%
Dividend payout ratio 3.81% 3.57% 3.19% 6.7% 19.4%
Net charge-offs to average loans 0.02% 0.02% 0.03% 0.0% 33.3%
(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
9/30/2016 6/30/2016 9/30/2015 Linked Quarter Year/Year
ASSET QUALITY RATIOS
Nonperforming assets to total assets 0.80% 0.51% 0.40% 56.9% 100.0%
Nonperforming loans to total loans 1.06% 0.67% 0.37% 58.2% 186.5%
Allowance for loan losses to total loans 0.87% 0.87% 0.83% 0.0% 4.8%
Allowance for loan losses to nonperforming loans 82.4% 129.6% 226.4% -36.4% -63.6%
CAPITAL RATIOS
Investar Holding Corporation:
Total equity to total assets 9.84% 10.01% 11.53% -1.7% -14.7%
Tangible equity to tangible assets(1) 9.59% 9.75% 11.23% -1.6% -14.6%
Tier 1 leverage ratio 10.10% 10.46% 11.61% -3.4% -13.0%
Common equity tier 1 capital ratio(2) 11.03% 11.11% 12.69% -0.7% -13.1%
Tier 1 capital ratio(2) 11.38% 11.47% 13.11% -0.8% -13.2%
Total capital ratio(2) 12.12% 12.19% 13.82% -0.6% -12.3%
Investar Bank:
Tier 1 leverage ratio 9.94% 10.26% 11.25% -3.1% -11.6%
Common equity tier 1 capital ratio(2) 11.20% 11.25% 12.71% -0.4% -11.9%
Tier 1 capital ratio(2) 11.20% 11.25% 12.71% -0.4% -11.9%
Total capital ratio(2) 11.94% 11.97% 13.42% -0.3% -11.0%
(1) Non-GAAP financial measure. See reconciliation.
(2) Estimated for September 30, 2016.


INVESTAR HOLDING CORPORATION
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
(Unaudited)
September 30, 2016 June 30, 2016 September 30, 2015
ASSETS
Cash and due from banks $10,172 $9,958 $6,595
Interest-bearing balances due from other banks 35,811 27,175 13,058
Federal funds sold 172 1 223
Cash and cash equivalents 46,155 37,134 19,876
Available for sale securities at fair value (amortized cost of $147,609, $149,986, and $84,218, respectively) 148,981 151,841 84,566
Held to maturity securities at amortized cost (estimated fair value of $21,625, $25,810, and $27,486, respectively) 21,454 25,656 27,525
Loans held for sale 40,553 46,717 55,653
Loans, net of allowance for loan losses of $7,383, $7,091, and $5,911, respectively 839,445 810,379 704,650
Other equity securities 7,388 7,371 4,899
Bank premises and equipment, net of accumulated depreciation of $6,380, $6,017, and $5,796, respectively 31,835 30,147 29,916
Other real estate owned, net 279 279 1,178
Accrued interest receivable 3,081 2,840 2,560
Deferred tax asset 1,384 1,459 1,803
Goodwill and other intangible assets 3,244 3,254 3,185
Bank-owned life insurance 7,150 7,101 -
Other assets 3,256 2,752 1,936
Total assets $1,154,205 $1,126,930 $937,747
LIABILITIES
Deposits
Noninterest-bearing $112,414 $109,828 $94,533
Interest-bearing 794,637 757,377 635,901
Total deposits 907,051 867,205 730,434
Advances from Federal Home Loan Bank 88,943 93,599 47,900
Repurchase agreements 23,554 28,854 34,648
Junior subordinated debt 3,609 3,609 3,609
Accrued taxes and other liabilities 17,472 20,900 13,028
Total liabilities 1,040,629 1,014,167 829,619
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; 7,359,666, 7,359,976, and 7,304,910 shares issued and 7,131,186, 7,214,734, and 7,264,261 shares outstanding, respectively 7,360 7,360 7,305
Treasury stock (3,526) (2,249) (630)
Surplus 85,124 84,958 84,588
Retained earnings 24,465 22,507 17,257
Accumulated other comprehensive income (loss) 153 187 (392)
Total stockholders equity 113,576 112,763 108,128
Total liabilities and stockholders equity $1,154,205 $1,126,930 $937,747


INVESTAR HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share data)
(Unaudited)
For the three months ended For the nine months ended
September 30, 2016 June 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015
INTEREST INCOME
Interest and fees on loans $10,011 $9,781 $8,912 $29,277 $25,856
Interest on investment securities 920 891 550 2,667 1,558
Other interest income 62 47 18 146 53
Total interest income 10,993 10,719 9,480 32,090 27,467
INTEREST EXPENSE
Interest on deposits 1,934 1,763 1,358 5,212 3,849
Interest on borrowings 306 298 170 920 387
Total interest expense 2,240 2,061 1,528 6,132 4,236
Net interest income 8,753 8,658 7,952 25,958 23,231
Provision for loan losses 450 800 400 1,704 1,500
Net interest income after provision for loan losses 8,303 7,858 7,552 24,254 21,731
NONINTEREST INCOME
Service charges on deposit accounts 79 88 95 264 286
Gain on sale of investment securities, net 204 144 334 428 468
Gain on sale of fixed assets, net - 1,252 14 1,252 14
Gain (loss) on sale of real estate owned, net - 10 (147) 11 (141)
Gain on sale of loans, net - - 1,023 313 3,831
Fee income on loans held for sale, net 118 106 261 347 771
Servicing fees 392 431 429 1,291 1,082
Other operating income 236 225 158 666 462
Total noninterest income 1,029 2,256 2,167 4,572 6,773
Income before noninterest expense 9,332 10,114 9,719 28,826 28,504
NONINTEREST EXPENSE
Depreciation and amortization 371 369 362 1,110 1,081
Salaries and employee benefits 3,945 3,890 4,161 11,708 12,040
Occupancy 265 242 217 743 655
Data processing 374 367 389 1,115 1,099
Marketing 102 102 35 316 155
Professional fees 312 375 271 966 770
Customer reimbursements - 584 - 584 -
Other operating expenses 1,179 1,175 1,578 3,494 4,319
Total noninterest expense 6,548 7,104 7,013 20,036 20,119
Income before income tax expense 2,784 3,010 2,706 8,790 8,385
Income tax expense 747 1,005 850 2,758 2,766
Net income $2,037 $2,005 $1,856 $6,032 $5,619
EARNINGS PER SHARE
Basic earnings per share $0.29 $0.28 $0.26 $0.85 $0.78
Diluted earnings per share $0.29 $0.28 $0.26 $0.84 $0.78
Cash dividends declared per common share $0.01 $0.01 $0.01 $0.03 $0.02


INVESTAR HOLDING CORPORATION
EARNINGS PER COMMON SHARE
(Amounts in thousands, except share data)
(Unaudited)
For the three months ended For the nine months ended
September 30, 2016 June 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015
Net income available to common stockholders $2,037 $2,005 $1,856 $6,032 $5,619
Weighted average number of common shares outstanding used in computation of basic earnings per common share 7,059,953 7,158,532 7,217,006 7,137,398 7,218,603
Effect of dilutive securities:
Restricted stock 15,546 15,298 9,326 8,991 4,812
Stock options 15,369 14,715 13,980 14,920 12,385
Stock warrants 11,575 11,231 12,269 11,360 11,284
Weighted average number of common shares outstanding plus effect of dilutive securities used in computation of diluted earnings per common share 7,102,443 7,199,776 7,252,581 7,172,669 7,247,084
Basic earnings per share $0.29 $0.28 $0.26 $0.85 $0.78
Diluted earnings per share $0.29 $0.28 $0.26 $0.84 $0.78


INVESTAR HOLDING CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS
(Amounts in thousands)
(Unaudited)
For the three months ended
September 30, 2016 June 30, 2016 September 30, 2015
Average
Balance
Interest
Income/
Expense
Yield/ Rate Average
Balance
Interest
Income/
Expense
Yield/ Rate Average
Balance
Interest
Income/
Expense
Yield/ Rate
Assets
Interest-earning assets:
Loans $874,272 $10,011 4.54% $852,475 $9,781 4.60% $777,080 $8,912 4.55%
Securities:
Taxable 136,047 728 2.12 129,126 732 2.27 82,476 444 2.14
Tax-exempt 30,733 192 2.48 25,105 159 2.54 17,234 106 2.44
Interest-bearing balances with banks 34,093 62 0.72 21,654 47 0.87 18,418 18 0.39
Total interest-earning assets 1,075,145 10,993 4.06 1,028,360 10,719 4.18 895,208 9,480 4.20
Cash and due from banks 7,138 7,647 5,669
Intangible assets 3,248 3,258 3,189
Other assets 56,273 54,123 46,061
Allowance for loan losses (7,213) (6,784) (5,893)
Total assets $1,134,591 $1,086,604 $944,234
Liabilities and stockholders equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand $262,841 $433 0.65% $247,052 $393 0.64% $229,919 $369 0.64%
Savings deposits 51,924 88 0.67 52,728 88 0.67 53,407 91 0.68
Time deposits 469,826 1,413 1.19 439,898 1,282 1.17 350,906 898 1.02
Total interest-bearing deposits 784,591 1,934 0.98 739,678 1,763 0.96 634,232 1,358 0.85
Short-term borrowings 98,286 237 0.96 103,274 229 0.89 68,544 32 0.19
Long-term debt 22,644 69 1.21 23,434 69 1.18 35,836 138 1.53
Total interest-bearing liabilities 905,521 2,240 0.98 866,386 2,061 0.95 738,612 1,528 0.82
Noninterest-bearing deposits 102,736 95,537 87,425
Other liabilities 13,278 12,646 10,402
Stockholders’ equity 113,056 112,035 107,795
Total liability and stockholders’ equity $1,134,591 $1,086,604 $944,234
Net interest income/net interest margin $8,753 3.23% $8,658 3.38% $7,952 3.52%


INVESTAR HOLDING CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS
(Amounts in thousands)
(Unaudited)
For the nine months ended
September 30 2016 September 30, 2015
Average
Balance
Interest
Income/
Expense
Yield/ Rate Average
Balance
Interest
Income/
Expense
Yield/ Rate
Assets
Interest-earning assets:
Loans $853,116 $29,277 4.57% $740,652 $25,856 4.67%
Securities:
Taxable 125,982 2,172 2.30 76,069 1,214 2.13
Tax-exempt 25,920 495 2.54 18,381 344 2.50
Interest-bearing balances with banks 25,608 146 0.76 17,863 53 0.40
Total interest-earning assets 1,030,626 32,090 4.15 852,965 27,467 4.31
Cash and due from banks 7,335 5,597
Intangible assets 3,228 3,199
Other assets 54,478 45,619
Allowance for loan losses (6,770) (5,497)
Total assets $1,088,897 $901,883
Liabilities and stockholders equity
Interest-bearing liabilities:
Deposits:
Interest-bearing demand $249,960 $1,205 0.64% $219,018 $1,034 0.63%
Savings deposits 52,596 265 0.67 54,158 274 0.68
Time deposits 431,328 3,742 1.16 339,129 2,541 1.00
Total interest-bearing deposits 733,884 5,212 0.95 612,305 3,849 0.84
Short-term borrowings 111,418 710 0.85 53,030 72 0.18
Long-term debt 24,243 210 1.15 39,213 315 1.07
Total interest-bearing liabilities 869,545 6,132 0.94 704,548 4,236 0.80
Noninterest-bearing deposits 95,225 82,157
Other liabilities 12,135 8,736
Stockholders’ equity 111,992 106,442
Total liability and stockholders’ equity $1,088,897 $901,883
Net interest income/net interest margin $25,958 3.36% $23,231 3.64%


INVESTAR HOLDING CORPORATION
RECONCILIATION OF NON GAAP FINANCIAL MEASURES
(Amounts in thousands, except share data)
(Unaudited)
September 30, 2016 June 30, 2016 September 30, 2015
Tangible common equity
Total stockholder's equity $113,576 $112,763 $108,128
Adjustments:
Goodwill 2,684 2,684 2,684
Core deposit intangible 460 470 501
Trademark intangible 100 100 -
Tangible common equity $110,332 $109,509 $104,943
Tangible assets
Total assets $1,154,205 $1,126,930 $937,747
Adjustments:
Goodwill 2,684 2,684 2,684
Core deposit intangible 460 470 501
Trademark intangible 100 100 -
Tangible assets $1,150,961 $1,123,676 $934,562
Common shares outstanding 7,131,186 7,214,734 7,264,261
Tangible equity to tangible assets 9.59% 9.75% 11.23%
Book value per common share $15.93 $15.63 $14.88
Tangible book value per common share 15.47 15.18 14.45


For further information contact: Investar Holding Corporation Chris Hufft Chief Financial Officer (225) 227-2215 Chris.Hufft@investarbank.com

Source:Investar Holding Corporation