Investar Holding Corporation · NASDAQ:ISTR
Investar — Debt Investor Presentation (November 2019)
31 slides from Investar's debt investor presentation, Nov 14, 2019
Slide 1: Investar Holding Corporation
= Sy INVESTAR ry HOLDING CORPORATION NASDAQ: ISTR
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation may contain 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 www.investarbank.com things, future events and financial performance. T
Slide 3: Notice to Recipients
NOTICE TO RECIPIENTS: This confidential presentation (this “Presentation”) has been prepared solely for general informational purposes by Investar Holding Corporation (together, with its wholly owned bank subsidiary Investar Bank, National Association, the “Company”), and is being furnished solely f
Slide 4: Terms of Proposed Subordinated Debt Offering
Terms of Proposed Subordinated Debt Offering Issuer Investar Holding Corporation (NASDAQ: ISTR) Security Subordinated Notes Kroll Bond Rating Agency BBB- Structure 5-years Fixed-to-Floating Rate Size $25.0 million Term 10 year, no-call 5 year Covenants Consistent with regulatory requirements for Tie
Slide 5: Company Profile as of September 30, 2019
COMPANY PROFILE AS OF SEPTEMBER 30, 2019 Market Data 09/30/19 YTD Financial Highlights Shares Outstanding 9,929,860 Assets $2.0 billion Market Cap $236.3 million Net Loans $1.6 billion Price per Share $23.80 Deposits $1.6 billion Dividend Yield 0.96% Tangible Equity(1) $184.3 million Price/ Tangible
Slide 6: Senior Management
SENIOR MANAGEMENT John J. D’Angelo, • Founding President and Chief Executive Officer President & CEO • New Orleans native; graduate of Louisiana State University • Prior to founding Investar, Mr. D’Angelo was president and director of Aegis Lending Corporation, a mortgage lending company with operat
Slide 7: Investar Snapshot
INVESTAR SNAPSHOT Company overview Financial highlights • Chartered as a de novo commercial bank in June 2006 by John J. As of and for the Year Ended D’Angelo, the current President and Chief Executive Officer (dollars in millions) 2016 2017 2018 2019YTD Balance Sheet • Completed initial public offe
Slide 8: Investar Timeline
INVESTAR TIMELINE 2018 Opened additional branch in our Baton Rouge market 2019 2014 Acquired Completed Mainland Bank initial public $2,018 offering 2012 Entered the New $1,786 Orleans market $1,623 2006 $1,159 Chartered with $1,032 an initial capitalization $879 of $10.1 million $635 $375 $279 $209
Slide 9: Accomplishments Since IPO
ACCOMPLISHMENTS SINCE IPO Since IPO in June 2014, Investar has experienced significant progress: Further Established in Four Key Louisiana Markets Shifted from Consumer Loans to C&I and CRE Focus Maintained High Quality Organic Loan Growth Transitioned from Transactional Banking to Relationship Bank
Slide 10: Attractive Markets
ATTRACTIVE MARKETS • Baton Rouge MSA • Louisiana’s second largest market by deposits and the state capital, which includes major industrial, medical, research, motion picture, and growing technology centers • Hammond MSA • Commercial hub of a large agricultural segment of Louisiana, bedroom communit
Slide 11: Opportunistic Acquisitions Completed
OPPORTUNISTIC ACQUISITIONS COMPLETED Branch map South Louisiana Business Bank • Announced: June 2011 • Closed: October 2011 • 1 Branch in Prairieville, LA • $31.5 million in gross loans and $38.6 million in deposits¹ First Community Bank • Announced: January 2013 • Closed: May 2013 • 2 Branches – Ha
Slide 12: Opportunistic Acquisitions Announced
OPPORTUNISTIC ACQUISITIONS ANNOUNCED Investar Holding Corporation (24) Bank of York (2) HTH Branch Acquisition (2) HTH branches in Alice and Victoria, Texas Bank of York, York, Alabama • Announced: August 2019 • Announced: July 2019 • Target closing date in Q1 2020 • Target closing date in Q4 2019 •
Slide 13: Historical Growth
HISTORICAL GROWTH Total Assets Total Loans ($ in millions) ($ in millions) $2,400 $2,100 $2,200 $1,900 $2,018 $2,000 $1,700 $1,576 $1,786 $1,800 $1,500 $1,401 $1,623 $1,259 $1,600 $1,300 $1,400 $1,100 $893 $1,200 $1,159 $900 $1,032 $745 $1,000 $700 $800 $500 2015Y 2016Y 2017Y 2018Y 2019YTD 2015Y 201
Slide 14: Loan Composition
LOAN COMPOSITION 2017 2018 Q3 2019 Increase/(Decrease) (dollars in thousands) Amount % Amount % Amount % Amount % Mortgage loans on real estate Construction and land development $ 157,667 12.5% $ 157,946 11.3% $ 176,674 11.1% $ 18,728 11.9% 1-4 Family 276,922 22.0 287,137 20.5 310,298 19.6 23,161 8.
Slide 15: Loan Composition
LOAN COMPOSITION September 30, 2019 Consumer 2% Construction & land development 11% C&I 18% CRE 44% Residential/Farmland 25% Total Loans: $1.6 billion YTD Yield on loans: 5.28% 50% of CRE is owner-occupied 15
Slide 16: Loan Composition: Business Lending Portfolio
LOAN COMPOSITION Business Lending Portfolio1 Health Care and Social Assistance Construction 12% 7% Other Industries less than 5% 25% Retail Trade 11% Real Estate and Rental and Leasing 14% Professional, Scientific, & Wholesale Trade Technical 12% 11% Manufacturing 8% Total Business Lending Portfolio
Slide 17: Asset Quality Trends
ASSET QUALITY TRENDS NPAs / Total Loans and OREO NPLs / Total Loans 1.25% 1.00% 1.00% 0.80% 0.72% 0.71% 0.75% 0.62% 0.60% 0.55% 0.46% 0.46% 0.31% 0.36% 0.50% 0.37% 0.40% 0.27% 0.25% 0.20% 0.00% 0.00% 2015Y 2016Y 2017Y 2018Y 2019YTD 2015Y 2016Y 2017Y 2018Y 2019YTD NCOs / Avg. Loans Loan Loss Reserves
Slide 18: ISTR Loan Portfolio Credit Summary
ISTR LOAN PORTFOLIO CREDIT SUMMARY Special Special Doubtful, Pass Mention Substandard Doubtful Total Mention, 0.0% 0.2% Substandard, 0.4% Commercial Real Estate 693,007 - 143 - 693,150 1-4 Family 307,394 535 2,298 71 310,298 Consumer 29,383 200 613 - 30,196 Construction and Development 176,244 111 3
Slide 19: Deposit Composition and Growth
DEPOSIT COMPOSITION AND GROWTH Deposit Composition ¹ ($1.6 billion) Noninterest-bearing demand deposits 19% CDs 43% Interest-bearing demand deposits 19% Money market Savings 12% 7% YTD Cost of funds: 1.66% Target: 20% of total deposits are noninterest-bearing • Treasury Management • Small Business B
Slide 20: Financial Highlights
FINANCIAL HIGHLIGHTS Amounts in thousands, except share data Year Ended December 31, 9 Mos. Ended 2016 2017 2018 Q3 2019 YTD Financial Highlights Total Assets $ 1,158,960 $ 1,622,734 $ 1,786,469 $ 2,018,001 Gross Loans 893,846 1,258,779 1,400,825 1,586,342 Total Deposits 907,787 1,225,237 1,361,731
Slide 21: Efficiency and Performance Metrics
EFFICIENCY AND PERFORMANCE METRICS A Focus on Improving Efficiency ROATCE & ROAA Core Efficiency Ratio Noninterest Expense / Avg. Assets ROATCE ROAA 90.0% 10.0% 15.0% 2.00% 75.0% 8.0% 12.0% 1.60% Noninterest ExpenseAssetsAvg. / Noninterest 68.9% 67.6% 66.2% 63.8% 64.3% 9.7% 8.9% ROAA 60.0% 6.0% 9.0%
Slide 22: Net Interest Margin Trends
NET INTEREST MARGIN TRENDS Net Interest Income (NII) & Net Interest Margin (NIM) Key Components of NII & NIM Loan Yield Securities Yield Cost of Funds Net Interest Income NIM 6.00% 6.00% $70,000 5.11% 5.29% 5.00% 5.00% 4.65% 4.72% 4.55% $60,000 $57,370 4.00% $50,000 $47,853 4.00% $42,517 3.61% 3.61%
Slide 23: Historical Capital Position
HISTORICAL CAPITAL POSITION Consolidated Bank September 30, 2019 September 30, 2019 15.00% CET1 Ratio 15.00% CET1 Ratio (1) Tier 1 Risk-Based Ratio Tier 1 Risk-Based Ratio Total Risk-Based Ratio 14.22% Tier 1 Leverage Ratio Total Risk-Based Ratio Tier 1 Leverage Ratio 13.95% 14.00% TCE / TA Ratio 14
Slide 24: Pro Forma Regulatory Capital
PRO FORMA REGULATORY CAPITAL $6,500 $18,250 Note: Assumes $25 million of subordinated At September 30, 2019 debt is raised and 93% of proceeds are down- $10,442 streamed to the bank as common equity with $178,240 7% of proceeds retained at the holding company. Pro Forma $6,500 $178,240 $43,250 $10,4
Slide 25: Pro Forma Double Leverage and Interest Coverage
PRO FORMA DOUBLE LEVERAGE AND INTEREST COVERAGE Pro Forma for Bank of York Acquisition, Branch Acquisitions, & Subordinated Debt Offering Annualized For the Nines ISTR Months Ended Pro Forma for Bank September 30, 2019 of York & HTH Branch ISTR ISTR Acquisitions (1) Pro Forma Bank Level Common Equit
Slide 26: Investment Opportunity
INVESTMENT OPPORTUNITY 1 Management • Legacy team with proven industry expertise tied to the South Louisiana region • Continue to add experienced bankers in new and existing markets 2 Market • South Louisiana focus with complementary market expansion • New foothold in Texas provides significant room
Slide 27: Appendix
APPENDIX 27
Slide 28: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Tangible equity, tangible book value per share, and the ratio of tangible equity to tangible assets are not financial measures recognized under GAAP and, therefore, are considered non-GAAP financial measures. Company management, banking regulators, many financial analysts
Slide 29: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES December 31, YTD Dollar values in thousands except per share amounts 2015 2016 2017 2018 Q3 2019 Net interest income (x) $ 31,458 $ 34,739 $ 42,517 $ 57,370 $ 47,853 Provision for loan losses 1,865 2,079 1,540 2,570 1,172 Adjusted net interest income after provision for l
Slide 30: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Dollar values in thousands except per share amounts Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Net interest income (a) $ 14,385 $ 14,807 $ 15,156 $ 16,331 $ 16,366 Provision for loan losses 785 593 265 369 538 Net interest income after provision for loan losses 13,600 14,214
Slide 31: Income Statement
INCOME STATEMENT December 31, YTD (dollars in thousands, except share data) 2015 2016 2017 2018 Q3 2019 INTEREST INCOME Interest and fees on loans $ 35,076 $ 39,380 $ 47,863 $ 66,750 $ 59,621 Interest on investment securities 2,189 3,565 5,055 6,608 5,697 Other interest income 75 207 428 533 610 TOT
Investar Holding — Debt Investor Presentation (November 2019) on 6ix