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8-K - 8-K - Investar Holding Corp | d62969d8k.htm |
1 NASDAQ: ISTR Raymond James Conference: September 9, 2015 Exhibit 99.1 |
Forward-looking Statements
2 This presentation may include forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon current expectations and assumptions about our business that are subject to a variety of risks and uncertainties that could cause the actual results to differ materially from those described in this presentation. You should not rely on forward-looking statements as a prediction of future events. Additional information regarding factors that could cause actual results to differ materially from those discussed in any forward looking statements are described in reports and registration statements we file with the SEC, including our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, copies of which are available on the Investar internet website http://www.investarbank.com. We disclaim any obligation to update any forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based except as required by law. www.investarbank.com NASDAQ: ISTR We encourage everyone to visit the Investors Section of our website at www.investarbank.com,
where
we have posted additional important information such as press releases and SEC filings. We intend to use our website to expedite public access to time- critical information regarding the Company in advance of or in lieu of distributing a press release or a filing with the SEC disclosing the same information. |
Company Profile as of June 30, 2015
3 Share Outstanding 7,293,209 Assets $921.9 million Market Cap $110.9 million Net Loans $667.9 million Price per Share $15.20 Deposits $706.0 million Dividend Yield (YTD) 0.19% Tangible Equity $103.7 million Price/ Tangible Book Value 106.9% TE/TA 11.29% Price/LTM EPS 15.2x Net Income $3.8 million ROAA 0.86% ROAE 7.17% NPAs/Assets 0.56% Net Interest Margin 3.71% Cost of Funds 0.79% Market Data Financial Highlights |
Senior Management
John J. DAngelo,
President & CEO
Christopher L. Hufft,
Chief Accounting Officer
Founding President and Chief Executive Officer New Orleans native; graduate of Louisiana State University Prior to founding Investar, Mr. DAngelo was president and director of Aegis
Lending Corporation, a mortgage lending company with operations in 46 states
and the District of Columbia
Previously, Mr. DAngelo held various senior positions at Hibernia National Bank
(the predecessor to Capital One Bank, N.A.), focusing on the East Baton Rouge
Parish, Louisiana, market
Current ownership of 2% Joined the Bank in February 2014 as Chief Accounting Officer Prior to joining the Bank, Mr. Hufft served for 9 years as the Vice President of
Accounting at Amedisys, Inc., a publicly-traded home health and hospice
company
Mr. Hufft, a licensed certified public accountant, also spent seven years in
public accounting, serving both public and privately-held
clients in the banking, healthcare and manufacturing
sectors
B.S. Accounting
Louisiana State University
Travis M. Lavergne,
Chief Credit Officer
Served as Executive Vice President and Chief Credit Officer since March, 2013 and
Chief Risk Management Officer since joining in July 2012
Prior to joining the Bank, Mr. Lavergne was a Senior Examiner at the Louisiana
Office of Financial Institutions from September 2005 to July 2012
B.S. Finance Louisiana State University M.B.A. Southeastern Louisiana University 4 |
Accomplishments to Date
Key Areas Staffed with Experienced Bankers
Very Strong Growth Complemented by Two Successful Acquisitions
High Quality Organic Loan Portfolio
Nimble Institution Able to Shift Resources as Customers Demands
Change Firmly Established in Four Key Louisiana
Markets Since commencing operations in June 2006, Investar has
successfully established a profitable commercial bank in multiple
growth markets: 5
Completed Initial Public Offering of 3.3 million shares generating net proceeds
of $41.7 million |
Franchise Overview
Franchise History
6 June 2006 Chartered with an initial capitalization of $10.1 million 2Q 2011 Opened two additional branches in Baton Rouge Market May 2013 Entered the Hammond market through the acquisition of First Community Bank October 1, 2011 Acquired South Louisiana Business Bank July 2013 Entered Lafayette market by opening a de novo branch December 2012 Entered the New Orleans market through the purchase of two closed branch locations and hiring of local bankers May 2009 Opened second branch in Baton Rouge FY 2008 Achieved profitability in second full year of operations July 2014 Completed initial public offering of 3.3 million shares August 2014 Opened additional branch in Baton Rouge market |
Franchise Overview
Branch Map 7 Current Total Assets: $922 Million 11 full-service branches in the Baton Rouge, New Orleans, Hammond, and Lafayette markets 176 employees at June 30, 2015 One new branch opening in 2015 Institutional ownership 42% Insider ownership 9% 5-year CAGRs¹ Assets 38.3% Loans 35.6% Deposits 34.2% (1) For the five years ended December 31, 2014 |
Current Strategy
Management Continue to add experienced bankers in new and existing markets Market Southern Louisiana focus with complementary new market expansion Growth Leverage existing infrastructure in four markets Limited de novo branching Opportunistic, disciplined acquisition strategy Asset Quality Loan portfolio diversity Disciplined credit philosophy legacy delinquencies less than 1% Profitability Expected to increase as investment in infrastructure has already been made
8 |
Opportunistic Acquirer
Two whole bank transactions since 2011 Processes and infrastructure established to analyze selective opportunities going forward
9 Announced: June, 2011 Closed: October, 2011 1 Branch in Prairieville, LA $31.5 million in gross loans¹ $38.6 million in deposits¹ Announced: January, 2013 Closed: May, 2013 2 Branches Hammond and Mandeville, LA $77.5 million in gross loans¹ $86.5 million in deposits¹ Rationale Entered Ascension Parish with 3.4% deposit market share Capital accretive Management talent Rationale Recorded bargain purchase gain Initial entrance into Hammond market plus another location in the New Orleans MSA South Louisiana Business Bank First Community Bank Focused on existing footprint and complementary markets in Southern Louisiana
60% of Louisiana-headquartered banks < $250 million in assets²
81% of Louisiana-headquartered banks < $500 million in assets²
Current Landscape
(1) Based on fair values at time of closing (2) As of March 31, 2015 |
Growth Has Been the Story
Total Assets +33% +69% +34% Gross Loans +43% +38% +66% +34% 10 FCB Acquisition FCB Acquisition SLBB Acquisition SLBB Acquisition Note: Gray shading denotes the marked value of acquired assets and loans on date of the respective acquisitions of South Louisiana Bank
(closed on October 1, 2011) and First Community Bank (closed on May 1, 2013) +39% +5% +4% HFS HFS |
Loan Composition
11 Loan Composition Amount % Amount % Amount % Amount % Amount % Mortgage loans on real estate Construction and land development $20,271 $20,271 7.0% 7.0% $63,170 $63,170 12.5% 12.5% $71,350 $71,350 11.4% 11.4% $70,927 $70,927 10.5% 10.5% ($423) ($423) -0.1% -0.1% 1-4 Family 54,813 54,813 19.0 19.0 104,685 104,685 20.8 20.8 137,519 137,519 22.1 22.1 153,118 153,118 22.7 22.7 $15,599 $15,599 11.3 11.3 Multifamily 1,750 1,750 0.6 0.6 14,286 14,286 2.8 2.8 17,458 17,458 2.8 2.8 21,260 21,260 3.2 3.2 $3,802 $3,802 21.8 21.8 Farmland 64 64 0.0 0.0 830 830 0.2 0.2 2,919 2,919 0.5 0.5 3,001 3,001 0.4 0.4 $82 $82 2.8 2.8 Commercial real estate Owner occupied 52,533 52,533 18.2 18.2 78,415 78,415 15.6 15.6 119,668 119,668 19.2 19.2 129,825 129,825 19.3 19.3 $10,157 $10,157 8.5 8.5 Nonowner occupied 47,394 47,394 16.4 16.4 78,948 78,948 15.6 15.6 105,390 105,390 16.9 16.9 119,321 119,321 17.7 17.7 $13,931 $13,931 13.2 13.2 Commercial and industrial 15,319 15,319 5.3 5.3 32,665 32,665 6.5 6.5 54,187 54,187 8.7 8.7 56,485 56,485 8.4 8.4 $2,298 $2,298 4.2 4.2 Consumer 96,609 96,609 33.5 33.5 131,096 131,096 26.0 26.0 114,299 114,299 18.4 18.4 119,649 119,649 17.8 17.8 $5,350 $5,350 4.7 4.7 Total loans $288,753 100% 100% $504,095 $504,095 100% 100% $622,790 $622,790 100% 100% $673,586 $673,586 100% 100% $50,796 $50,796 8.2% 8.2% Loans held for sale 16,988 16,988 5,029 5,029 103,396 103,396 78,212 78,212 (25,184) (25,184) (24.4) (24.4) Total gross loans $305,741 $509,124 $509,124 $726,186 $726,186 $751,798 $751,798 $25,612 $25,612 3.5% 3.5% Increase/(Decrease) 2012 2013 2014 2015 December 31, June 30, |
Loan Composition
June 30, 2015 Business Lending Portfolio² 12 (1) Total loans includes gross loans less loans held for sale (2) Business lending portfolio includes owner occupied CRE and C&I loans as of June 30, 2015
Total Business Lending Portfolio 2 : $186.3 million Total Loans¹: $673.6 million Yield on loans: 4.73% 52% of CRE is owner occupied |
Credit Metrics
13 FCB Acquisition NPAs / Total Loans + OREO NCOs / Average Loans Peers¹ Investar Peers¹ Investar (1) Peer group consists of UBPR peers produced by the FFIEC and defined by a combination of asset size, number of branches and location in a
Metropolitan Statistical Area. |
Disciplined Lending
14 Reserves / Total Loans¹ , ²: 0.85% Reserves / (Total Loans¹ Acquired): 0.91% (Reserves + FV Marks) / Total Loans¹ , ²: 0.95% Reserves / Total Loans¹ , ² Reserves / NPLs Provision Expense / NCOs NM 5 NM NM 3 4 (1) Total loans excludes loans held for sale and allowance for loan losses (2) Includes $41.1 million of loans from previous acquisitions that were marked-to-market as of June 30, 2015
(3) Reserves/NPLs for December 31, 2011 was 6,236% (4) Reserves/NPLs for December 31, 2012 was 5,136% (5) Investar recorded net recoveries in FY 2012 |
Deposit Composition and Growth
Deposit Composition ¹
($706 million)
Total Deposits
2010 - Present Strategy has been to bring in customers through competitive rates, then implement an aggressive cross-sell strategy (1) As of June 30, 2015 Cost of funds of interest bearing deposits: 0.84% Growth in noninterest bearing deposits: 23% |
Financial Highlights
16 (1) Gross loans includes loans held for sale (HFS) (2) Efficiency ratio is a non-GAAP financial measure Amounts in thousands, except share data 2015 2014 2014 2013 Financial Highlights Total Assets $921,855 $729,070 $879,354 $634,946 Gross Loans (1) $751,798 $596,106 $726,186 $509,124 Total Deposits $706,007 $578,667 $628,118 $532,606 Total Stockholders' Equity $106,873 $57,940 $103,384 $55,483 Shares Outstanding 7,293,209 3,945,753 7,262,085 3,945,114 Capital Ratios Tangible Equity / Tangible Assets 11.29% 7.54% 11.76% 8.74% Tier 1 Leverage Ratio 12.15% 8.37% 12.61% 9.53% Total RBC Ratio 14.10% 10.46% 14.41% 11.51% Asset Quality Ratios NPAs / Total Assets 0.56% 0.65% 0.69% 0.79% NPLs / Loans 0.40% 0.23% 0.54% 0.30% Loan Loss Reserves / Total Loans 0.85% 0.69% 0.74% 0.67% Loan Loss Reserves / NPLs 213.20% 296.24% 138.61% 227.00% NCOs / Avg Loans 0.00% 0.03% 0.07% 0.09% Performance Ratios Net Income $1,813 $1,067 $5,397 $3,168 ROAE 6.82% 7.45% 6.80% 6.10% ROAA 0.82% 0.61% 0.73% 0.64% Net Interest Margin 3.70% 3.85% 3.85% 4.10% Efficiency Ratio (2) 67.87% 73.85% 74.90% 78.07% Per Share Data Tangible Book Value per Share $14.22 $13.86 $13.79 $13.24 Diluted Earnings per Share $0.25 $0.26 $0.93 $0.81 Year Ended December 31, Quarter Ended June 30, |
Performance Metrics
17 Net Interest Margin (1) Return on average assets was adjusted for the bargain purchase gain recognized in 2013 and the net effect of the Companys investment
in a tax credit entity recognized in 2014. Return on Average
Assets |
Performance Metrics
18 (1) Efficiency ratio is a non-GAAP financial measure. The efficiency ratio was adjusted for the impairment related to the Companys
investment in a tax credit entity for the quarter and year ended December 31, 2014 and for the bargain purchase gain recognized as a result of the acquisition of South Louisiana Business Bank for the year ended December 31,
2013. Expense Ratios
74.5% 80.1% 74.3% 80.0% 72.8% 67.9% 3.19% 3.82% 3.65% 3.83% 3.32% 3.00% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 2010 2011 2012 2013 2014 Q2 2015 2010 2011 2012 2013 2014 Q2 2015 Employees 49 70 100 167 179 176 Locations 4 5 7 10 11 11 Year Ended December 31, |
$715 $999 $2,361 $3,168 $5,397 $0.43 $0.47 $0.71 $0.81 $0.93 -$0.80 -$0.60 -$0.40 -$0.20 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $500 $1,500 $2,500 $3,500 $4,500 $5,500 $6,500 2010 2011 2012 2013 2014 Profitability +70% +40% +34% +136% 19 Net Income and Earnings Per Share $1,442 $2,008 $1,950 $1,813 $0.20 $0.28 $0.27 $0.25 -$0.80 -$0.60 -$0.40 -$0.20 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $500 $1,500 $2,500 $3,500 $4,500 $5,500 $6,500 Q3 2014 Q4 2014 Q1 2015 Q2 2015 |
Investment Highlights
Strong historical balance sheet and earnings growth Meaningful organic opportunities exist in market Profitable with room to grow into current infrastructure Clean asset quality Experienced management team Experienced, disciplined acquirer Committed level of insider ownership 20 |
21 Appendix * * * * * * * * * * |
Non-GAAP Financial Measures
22 Tangible book value per share, the ratio of tangible equity to tangible assets, and the efficiency ratio are not financial measures
recognized under GAAP and, therefore, are considered non-GAAP
financial measures. Our management, banking regulators, many financial analysts and other investors use these non-GAAP financial measures to compare the capital adequacy of banking organizations with significant amounts of preferred equity and/or goodwill or other intangible assets,
which typically stem from the use of the purchase accounting
method of accounting for mergers and acquisitions. Tangible equity, tangible assets, tangible book value per share or related measures should not be considered in isolation or as a substitute for total stockholders equity, total assets, book value per share or any other measure
calculated in accordance with GAAP. Moreover, the manner in which
we calculate tangible equity, tangible assets, tangible book value per share and any other related measures may differ from that of other companies reporting measures with similar names. The following table reconciles, as of the dates set forth below, stockholders equity (on a
GAAP basis) to tangible equity and total assets (on a GAAP basis)
to tangible assets and calculates our tangible book value per share.
Dollar values in thousands except per share amounts
Three Months Ended
2010 2011 2012 2013 2014 2014 Q2 2015 Q2 Total Stockholders' Equity - GAAP $16,814 $35,166 $43,553 $55,483 $103,384 $57,940 $106,873 Adjustments Goodwill $0 $2,684 $2,684 $2,684 $2,684 $2,684 $2,684 Other Intangibles $0 $155 $145 $573 $532 $552 $511 Tangible Equity $16,814 $32,327 $40,724 $52,226 $100,168 $54,704 $103,678 Total Assets - GAAP $209,465 $279,330 $375,446 $634,946 $879,354 $729,070 $921,855 Adjustments Goodwill $0 $2,684 $2,684 $2,684 $2,684 $2,684 $2,684 Other Intangibles $0 $155 $145 $573 $532 $552 $511 Tangible Assets $209,465 $276,491 $372,617 $631,689 $876,138 $725,834 $918,660 Total Shares Outstanding Book Value Per Share $11.46 $12.82 $13.56 $14.06 $14.24 $14.68 $14.65 Effect of Adjustment $0.00 ($1.03) ($0.88) ($0.82) ($0.45) $0.82 ($0.43) Tangible Book Value Per Share $11.46 $11.79 $12.68 $13.24 $13.79 $13.86 $14.22 Total Equity to Total Assets 8.03% 12.59% 11.60% 8.74% 11.76% 7.95% 11.59% Effect of Adjustment - (0.90) (0.67) (0.47) (0.33) (0.41) 0.30 Tangible Equity to Tangible Assets 8.03% 11.69% 10.93% 8.27% 11.43% 7.54% 11.29% Efficiency Ratio Noninterest Expense $6,195 $8,615 $11,645 $19,024 $24,384 $5,729 $6,682 Income before Noninterest Expense $7,293 $10,116 $14,985 $23,340 $30,926 $7,310 $9,446 Provision $1,019 $639 $685 $1,026 $1,628 $448 $400 Efficiency Ratio 74.5% 80.1% 74.3% 78.1% 74.9% 73.8% 67.9% Year Ended December 31, |
Income Statement
23 Three Months Ended 2010 2011 2012 2013 2014 2014 Q2 2015 Q2 INTEREST INCOME Interest and fees on loans $ 9,082 $ 10,877 $ 13,968 $ 21,686 $ 29,979 $ 7,119 $ 8,646 Interest on investment securities 611 406 585 756 1,339 278 523 Other interest income 17 19 34 30 50 10 18 TOTAL INTEREST INCOME 9,710 11,302 14,857 22,472 31,368 7,407 9,187 INTEREST EXPENSE Interest on deposits 3,194 2,445 2,361 3,204 4,273 1,050 1,299 Interest on borrowings 300 134 181 256 402 108 108 TOTAL INTEREST EXPENSE 3,494 2,579 2,542 3,460 4,675 1,158 1,407 NET INTEREST INCOME 6,216 8,723 12,042 19,012 26,694 6,249 7,780 PROVISION FOR LOAN LOSSES 1,019 639 685 1,026 1,628 448 400 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 5,197 8,084 11,360 17,986 25,066 5,801 7,380 NON-INTEREST INCOME Service charges on deposit accounts 74 102 118 214 305 73 97 Gain on sale of investment securities, net 184 160 139 449 340 48 134 Net gain on sale of assets - 55 36 346 1,892 1,026 1,084 Bargain purchase gain - - - 906 - - - Fee income on mortgage loans held for sale, net 1,733 1,569 3,131 2,843 2,119 89 210 Other operating income 105 146 201 596 1,204 273 541 TOTAL NON-INTEREST INCOME 2,096 2,032 3,625 5,354 5,860 1,509 2,066 INCOME BEFORE NON-INTEREST EXPENSE 7,293 10,116 14,985 23,340 30,926 7,310 9,446 NON-INTEREST EXPENSE Salaries and employee benefits 3,538 4,909 7,461 11,772 14,565 3,491 3,971 Impairment on investment in tax credit entity - - - - 690 - - Operating expenses 2,657 3,706 4,184 7,252 9,129 2,238 2,711 TOTAL NON-INTEREST EXPENSE 6,195 8,615 11,645 19,024 24,384 5,729 6,682 INCOME BEFORE INCOME TAX EXPENSE 1,098 1,501 3,340 4,316 6,542 1,581 2,764 INCOME TAX EXPENSE 383 502 979 1,148 1,145 514 951 NET INCOME 715 $ 999 $ 2,361 $ 3,168 $ 5,397 $ 1,067 $ 1,813 $ Basic earnings per share 0.51 $ 0.54 $ 0.79 $ 0.86 $ 0.98 $ 0.27 $ 0.25 $ Diluted earnings per share 0.43 $ 0.47 $ 0.71 $ 0.81 $ 0.93 $ 0.26 $ 0.25 $ Year Ended December 31, |