Investar Holding Corporation · NASDAQ:ISTR
Investar — Investor Presentation (December 2019)
41 slides from Investar's investor presentation, Dec 24, 2019
Slide 1: $20.0 - $25.0 Million Private Placement of Common Stock
NASDAQ: ISTR $20.0 - $25.0 Million Private Placement of Common Stock Investor Presentation December 2019 Strictly Confidential
Slide 2: Disclosures and Disclaimers
Disclosures and Disclaimers This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect current views of Investar Holding Corporation (the “Company”) with respect to, among other things, future events and financial
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 fo
Slide 4: Risk Factors
Risk Factors • As a business operating in the financial services industry, Investar Holding Corporation’s business and operations may be adversely affected by current economic conditions and geopolitical matters • Investar Holding Corporation’s business strategy includes the continuation of growth p
Slide 5: Table of Contents
Table of Contents SECTION DESCRIPTION I. Executive Summary II. Company Overview III. Proposed Acquisition IV. Pro Forma Impact Appendix 5
Slide 6: I. Executive Summary
I. EXECUTIVE SUMMARY
Slide 7: Offering Summary
Offering Summary Issuer: Investar Holding Corporation in Baton Rouge, Louisiana Exchange/Ticker: NASDAQ / ISTR Offering Type: Private placement / PIPE Security Type: Common stock Offering Amount: $20.0 - $25.0 million Expected Closing Date: December 2019 ISTR will register the resale of the shares w
Slide 8: Investment Highlights
Investment Highlights An opportunity to invest in a dynamic Southeast franchise with an experienced management team and a proven track record of growth at an attractive entry point . Experienced and successful leadership team headed by Founder . Access to a diverse mix of operating markets across th
Slide 9: Use of Proceeds
Use of Proceeds . Supports the acquisition of Cheaha Financial Group in Oxford, Alabama • $206 million in assets • Top-tier profitability • Strong credit quality . Acquisition is consistent with the Company’s expansion strategy and will increase the Company’s presence along the I-20 corridor in Alab
Slide 10: Leadership Team
Leadership Team John J. D’Angelo, President & Chief Executive Officer . Founding President and Chief Executive Officer . Prior to founding Investar, Mr. D’Angelo was president and director of Aegis Lending Corporation, a mortgage lending company with operations in 46 states and the District of Colum
Slide 11: II. Company Overview
II. COMPANY OVERVIEW
Slide 12: Company Profile
Company Profile Company Overview Financial Highlights* . Based in Baton Rouge, Louisiana, Investar Holding Corporation is Assets $2,018,014 the bank holding company for Investar Bank Net Loans $1,576,003 Deposits $1,585,357 • The Bank was founded in 2006; Investar Holding Tangible Common Equity1 $18
Slide 13: Corporate Culture
Corporate Culture VALUES MISSION Integrity INVESTAR IS Neighborly a dynamic full service Visionary community bank focused Empowerment on relationships that create Star Service value and opportunities for Team Focused our customers, employees, Accountable shareholders and the Responsive community ser
Slide 14: Current Footprint
Current Footprint Full Loan Total service Production deposits 30 branches 2 offices $1.7Billion Investar Locations Loan Production Offices Pending Locations Note: Includes pending acquisition of two PlainsCapital Bank branches 14 Source: S&P Global Market Intelligence; Investar Holding Corporation
Slide 15: Largest Operating Markets
Largest Operating Markets Baton Rouge, LA MSA Baton Rouge Employment by Industry . 14 branches with $881 million in deposits . Population: 855,786 71,500 70,600 . Capitol of Louisiana; over 70,000 government employees in the MSA 54,600 54,000 . Home to Louisiana State University which enrolled over
Slide 16: Additional Core Markets
Additional Core Markets Deposit Breakdown Lafayette, LA MSA . 2 branches with $171 million in deposits . Population: 491,001 . Economy expected to grow by 3,200 jobs in 2020 and 4,000 jobs in 2021 Other 14% . Major employers include Stuller Inc., LHC Group, Acadian Ambulance, SCP Alabama Health, CGI
Slide 17: Acquisition Strategy
Acquisition Strategy Focus on Growth and Geographic Diversification with Small, Low Risk Transactions Opportunity to Improve Shareholder Value . Provides additional size and operating efficiencies . Ability to enhance target earnings by implementing core competencies and eliminating operating redund
Slide 18: Successful Execution of Acquisition Strategy
Successful Execution of Acquisition Strategy 2011 South LA Business Bank (LA) 2017 Price: $14.7 million BOJ Bancshares (LA) Structure:100% Stock Price: $22.1 million P/TBV: 120% Structure: 80% stock P/EPS: NM 2013 P/TBV: 132% 2019 Assets: $50.1 million First Community P/EPS: 20.6x EPS Accretion: NA
Slide 19: Creating Shareholder Value
Creating Shareholder Value $20.00 $2.50 $18.56 $18.00 $1.92 $17.13 $2.00 $16.06 $1.61 $16.00 $15.42 $1.79 $1.50 ($) 1 $14.62 $1.39 $14.00 $13.79 $1.13 $1.10 $0.97 $1.00 TBV TBV per Share $0.93 $1.06 Earnings per Share($) $0.97 $0.96 $12.00 $0.90 $0.50 $10.00 $8.00 $0.00 2014 2015 2016 2017 2018 2019
Slide 20: Historical Asset Growth
Historical Asset Growth $2,018.0 Total Assets CAGR Since 2006 – 39% Organic Assets CAGR Since 2006 – 35% $1,786.5 $1,622.7 $697.7 $563.6 $563.6 $1,159.0 $1,031.6 $155.8 $881.2 $155.8 $155.8 $634.9 $1,320.3 $1,222.8 $155.8 $1,059.1 $1,003.2 $375.4 $875.8 $279.3 $50.2 $725.4 $50.2 $479.2 $325.3 $209.5
Slide 21: Proven Growth Story
Proven Growth Story Total Assets ($M) Total Net Loans ($M) $2,250 $1,750 $2,000 $1,576 $2,018 $1,500 $1,391 $1,750 $1,786 $1,250 $1,251 $1,623 $1,500 $1,000 $886 $1,250 $750 $820 $1,159 $1,000 $1,032 $500 $750 $250 2015Y 2016Y 2017Y 2018Y 2019YTD 2015Y 2016Y 2017Y 2018Y 2019YTD Total Deposits ($M) N
Slide 22: Asset Quality Trends
Asset Quality Trends Nonperforming Assets ($000s) NPA / Assets (%) $12,000 0.90% $10,750 $10,000 0.75% 0.73% $9,005 $8,000 $8,442 0.60% 0.60% 0.55% $6,828 $6,000 0.45% 0.46% $4,765 $4,000 0.30% 0.34% $2,000 0.15% $0 0.00% 2015Y 2016Y 2017Y 2018Y 2019YTD 2015Y 2016Y 2017Y 2018Y 2019YTD Net Charge-off
Slide 23: Loan Portfolio Composition
Loan Portfolio Composition Consumer 2% . Diverse portfolio with focus on CRE and C&I lending Constr & Dev 11% Comm & Ind . Granular portfolio with target loan size from $1.5 million to $3.5 million 18% 1-4 Fam . Loan yield of 5.29% as of the most recent quarter 20% Nonowner-Occupied . Approximately
Slide 24: Core Deposit Base
Core Deposit Base Trailing Quarter Deposit Mix September 30, 2019 Deposit Mix 100% Savings Money 7.0% Market 80% 12.3% 60% Interest-bearing Demand 19.2% 40% Time Noninterest- 43.1% 20% bearing Demand 18.4% 0% 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 Noninterest-bearing Demand Interest
Slide 25: Positive Profitability Trends
Positive Profitability Trends Core ROAA (%) . Net Income of $13.5 million year to date as of 3Q19 1.20% . 2019 YTD ROAA of 0.93%; Core ROAA at 1.00% 1.00% 1.00% 0.93% . Expected to easily surpass 2018 record income of $13.6 million 0.80% 0.77% 0.73% 0.69% . 2019 YTD Net Interest Margin of 3.53% 0.60
Slide 26: III. Proposed Transaction
III. PROPOSED TRANSACTION
Slide 27: Cheaha Company Overview
Company Overview . Cheaha Bank and its bank holding company, Cheaha Financial Group, CHEAHA BANK were founded in 2000 in Oxford, Alabama For the Twelve Months Ended Year-to-Date . Primarily serves customers and communities along the I-20 corridor In $000s ex cept for per share data 12/31/17 12/31/18
Slide 28: Transaction Terms
Transaction Terms Investar Holding Corporation’s proposed acquisition of Cheaha Financial Group, Inc. Transaction . Investar Holding Corporation will acquire 100% of Cheaha Financial Group, Inc.’s (“Cheaha”) outstanding common stock in a negotiated transaction Consideration Mix . 100% cash . $80.00
Slide 29: Transaction Rationale
Transaction Rationale . Continuation of disciplined acquisition strategy with the goal of building a premier regional community bank Strategic . Increases presence along Alabama’s I-20 corridor complementing the recent acquisition of Rationale Bank of York . Highly profitable organization with the p
Slide 30: Attractive Earnings, Liquidity & Asset Quality
Attractive Earnings, Liquidity & Asset Quality Net IncomeNet Income ($000s) ROAAROAA (%) Net InterestNIM Margin (%) 3,600 1.80% 5.00% 3,364 1.75% 3,273 3,279 4.66% 4.68% 3,000 1.65% 4.50% 3,060 1.65% 4.51% 1.63% 4.32% 2,400 1.50% 4.00% 4.19% 1.51% 2,246 1.46% 1,800 1.35% 3.50% 1,200 1.20% 3.00% 600
Slide 31: Key Assumptions
Key Assumptions Cost Savings . Approximately 28% of noninterest expenses Merger Expenses . Approximately $2.0 million pre-tax Core Deposit Intangible . 1.5%, amortized over 10 years using sum-of-digits method Credit Mark . $1.3 million . $20.0 million offering Capital Raise . Offering price of $24.0
Slide 32: IV. Pro Forma Impact
IV. PRO FORMA IMPACT
Slide 33: Pro Forma Franchise
Pro Forma Franchise Alexandria Full Loan Total Jacksonville service Production 34branches 2 offices $1.9deposits Billion Anniston Oxford Cheaha Locations Investar Locations Loan Production Offices Note: Data shown includes pending acquisition of two PlainsCapital Bank Pending Locations branches 33 S
Slide 34: Pro Forma Balance Sheet
Pro Forma Balance Sheet Dollars in thousands, except per share data Pro Forma Balance Sheet: Fair Value M&A ISTR* Cheaha HC Pro Forma Capital Raise Pro Forma Adjustments Adjustments 9/30/19 Adjusted 9/30/19 Cash and equivalents $ 88,225 $ 8,783 $ - $ (43,137) e $ 53,871 $ 19,050 h $ 72,921 Securitie
Slide 35: Estimated Pro Forma Financial Metrics
Estimated Pro Forma Financial Metrics Pro Forma Financial Impact1 Pro Forma Capital Ratios Holding Company Impact 16.0% 2020 EPS Impact 6.8% Accretion 14.0% 13.4% 13.1% 2021 EPS Impact 12.4% Accretion 12.8% 12.6% 12.0% 10.7% Initial TBV Impact 6.7% Dilution 10.2% 10.0% 8.3% TBV Payback Period 3.7 Ye
Slide 36: Pro Forma Loan Mix
Pro Forma Loan Mix INVESTAR CHEAHA BANK PRO FORMA Consr & Other Consr & Other 4.1% Multifam Consr & 4.3% C&D 2.3% Other C&D C&I 7.5% 11.3% 11.5% 12.6% C&D C&I 14.5% C&I Multifam 18.2% Multifam 17.8% 3.7% 3.6% 1-4 Fam 18.0% 1-4 Fam Other CRE 19.1% 15.6% 1-4 Fam Other CRE Other CRE OwnOcc CRE OwnOcc 3
Slide 37: Pro Forma Deposit Mix
Pro Forma Deposit Mix INVESTAR CHEAHA BANK PRO FORMA Time Deposits > Time Deposits $250k > $250k 6.9% 8.0% Non Int. Bearing NOW Non Int. Bearing Accts Time 17.1% Non Int. Bearing 18.6% 4.7% NOW Accts Deposits > 18.5% 3.5% $250k 18.8% Time Deposits < NOW Accts $250k 16.0% Time Deposits < 36.1% $250k
Slide 38: Appendix
APPENDIX
Slide 39: Non-GAAP Reconciliation
Non-GAAP Reconciliation (Dollars in thousands, except per share data) As of September 30, As of December 31, 2019 2018 2017 2016 2015 2014 Tangible Common Equity: Total Stockholders' Equity $ 210,457 $ 182,262 $ 172,729 $ 112,757 $ 109,350 $ 103,384 Adjustments: Goodwill (21,902) (17,424) (17,086) (
Slide 40: Stock Chart
Stock Chart Price ($) Volume $27.00 300,000 275,000 $26.00 250,000 225,000 $25.00 200,000 $24.00 175,000 150,000 $23.00 125,000 100,000 $22.00 75,000 50,000 $21.00 25,000 $20.00 0 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Note: Market data as of December 3,
Slide 41: Slide 41
Investar Holding — Investor Presentation (December 2019) on 6ix