Investar Holding Corporation · NASDAQ:ISTR
Investar — Q4 2023 Earnings Presentation
35 slides from Investar's earnings presentation, February 2024
Slide 1: Q4 2023 Investor Presentation
NASDAQ: ISTR Q4 2023 Investor Presentation 1
Slide 2: Cautionary Statements
Cautionary Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect Investar’s current views with respect to, among other things, future events and financial performance. Investar generally identifies for
Slide 3: Our Company
Our Company Investar Holding Corp. is the Bank Holding Company for Investar Bank ▪ Headquartered in Baton Rouge, LA Mission ▪ Founded in 2006 Investar is a dynamic full service community bank focused on relationships that create value and opportunities for our customers, employees, ▪ Full service, c
Slide 4: 2023 Overview
2023 Overview Managing Through Volatility Balance Sheet Optimization ▪ After seven rate hikes during 2022, the Federal Reserve continued its tightening ▪ Pivoted from a growth strategy to a focus on consistent, quality earnings and cycle with four additional rate hikes in 2023, raising the target ra
Slide 5: Execution of Strategic Initiatives – 4th Quarter 2023
Execution of Strategic Initiatives – 4th Quarter 2023 Balance Sheet Optimization and Capital ▪ As we look forward into 2024, we are continuing to focus on consistent, quality earnings through the optimization and right-sizing of the balance sheet. This will allow for repayment of higher cost borrowi
Slide 6: Financial Overview – 4th Quarter 2023
Financial Overview – 4th Quarter 2023 Highlights 4th Quarter Results ▪ Recorded quarterly net income of $3.5 million in the 4th quarter. Balance Sheet (in millions) Assets $ 2,815 ▪ Total revenues, or interest and noninterest income, for the 4th quarter totaled $38.4 million, an increase of $3.6 mil
Slide 7: Leadership Team
Leadership Team John J. D’Angelo, President and Chief Executive Officer Mr. D’Angelo has been the President and Chief Executive Officer of the Company since our organization as a bank holding company in 2013. He has also served as the Bank’s President and Chief Executive Officer since its organizati
Slide 8: 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 9: Creating Shareholder Value
Creating Shareholder Value Tangible Book Value Per Share1 6.2% TBV / Share (Ex. AOCI) 1 $24.00 GROWTH CAGR2 $23.55 2018 – 2023 $22.37 $22.00 $19.89 $19.72 $20.00 $19.20 $19.08 $18.79 $18.92 $18.62 TBV per Share1 ($) $18.00 $17.46 $17.43 $17.13 $16.00 $14.00 $12.00 $10.00 2018 2019 2020 2021 2022 202
Slide 10: Dividend History
Dividend History $0.45 $0.40 $0.35 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $- 20141 2015 2016 2017 2018 2019 2020 2021 2022 2023 1 Annualized based on 3rd quarter 2014 dividend of $0.0068 plus 4th quarter 2014 dividend of $0.007 10
Slide 11: Recent GAAP Earnings Performance
Recent GAAP Earnings Performance Net Income ($000) Earnings Per Share (Diluted) $8,898 $0.88 $6,547 $0.67 $3,812 $3,538 $0.38 $0.36 $2,781 $0.28 2022Q4 2023Q1 2023Q2 2023Q3 2023Q4 2022Q4 2023Q1 2023Q2 2023Q3 2023Q4 ROAA (%) Net Interest Margin (%) 1.32 3.50 3.13 0.96 2.82 2.72 2.66 0.57 0.50 0.40 20
Slide 12: Recent Core Earnings Performance
Recent Core Earnings Performance Core Earnings ($000)1 Core Earnings Per Share (Diluted) 1 $6,616 $6,219 $0.67 $0.62 $5,123 $0.51 $3,835 $3,259 $0.39 $0.33 2022Q4 2023Q1 2023Q2 2023Q3 2023Q4 2022Q4 2023Q1 2023Q2 2023Q3 2023Q4 Core ROAA (%) 1 Core Efficiency Ratio (%) 1 79.98 0.97 74.21 74.85 0.92 69
Slide 13: Returns to Shareholders
Returns to Shareholders Shares Repurchased (%)1 ▪ In July 2023, the Board of Directors authorized an additional 5.89% 350,000 shares for repurchase under our stock repurchase 5.02% program. 3.79% 3.39% ▪ Repurchased 31,766 shares during the 4th quarter at an average price of $10.43 and 222,448 share
Slide 14: Continued Execution of Acquisition Strategy
Continued Execution of Acquisition Strategy Investar Has Completed 7 Whole Bank Acquisitions and 1 Branch Transaction 2011 Total Assets: South LA Business Bank (LA) 2017 $2.8 Billion BOJ Bancshares (LA) 2019 2013 Bank of York (AL) First Community Bank (LA) 2017 2021 2019 Citizens Cheaha Financial Ba
Slide 15: Investment Portfolio – 4th Quarter Update
Investment Portfolio – 4th Quarter Update Commercial Available-for-Sale Mortgage-backed (Dollars in thousands) Book Value Gain (Loss) Fair Value Securities 18% U.S. Governmental Securities $ 20,383 $ (340) $ 20,043 State and Political Subdivisions 18,768 (2,065) 16,703 Residential Mortgage-backed Co
Slide 16: Investment Portfolio – Principal Cash Flows
Investment Portfolio – Principal Cash Flows ~$82 Million Maturing by Q4 ‘25 $16.0 19% 20% $14.1 17% $14.0 $12.0 $11.4 14% 15% $10.3 $10.1 $10.0 $9.5 $9.0 $9.1 $8.8 11% $8.0 10% 8% $6.0 6% $4.0 4% 5% 2% $2.0 $- 0% Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Cashflow ($ in millions
Slide 17: Loan Portfolio – 4th Quarter Update
Loan Portfolio – 4th Quarter Update Consumer ▪ Loan yield improved to 5.93% for the 4th quarter compared to 5.53% for the 0.5% 3rd quarter. Commercial & Industrial Construction & ▪ Total loans increased $107.6 million, or 5.1%, to $2.21 billion at December 24.6% Development 31, 2023, compared to $2.
Slide 18: CRE Portfolio Overview
CRE Portfolio Overview Farmland Healthcare 1% 9% Warehouse 6% Wholesale Trade 5% Professional, Manufacturing & Other 44% Multi-family $1.1B 10% Office 10% Retail 15% Portfolio Characteristics December 31, 2023 % of Total Portfolio 47.6% Owner-Occupied as % of CRE Portfolio 42.8% Nonowner-Occupied Of
Slide 19: C&I Portfolio Overview
C&I Portfolio Overview By Collateral Type By Industry Transportation & Attorney Cases Warehousing 9% 13% Other 10% Professional (Scientific & Tech) Finance & Insurance 11% Accounts Receivable Unsecured 43% 44% 5% $439M $439M Equipment 11% Other 24% Cash/Brokerage Secured 9% Real Estate Marine Constr
Slide 20: Construction & Development Portfolio Overview
Construction & Development Portfolio Overview 1-4 Family Development/Builder Lots 12% 1-4 Family Construction - Consumer 4% Commercial Land & Construction 53% $190M 1-4 Family Construction - Builder 27% Multifamily Lot/Raw Land - 1% Consumer 3% Portfolio Characteristics December 31, 2023 % of Total
Slide 21: Consumer Portfolio Overview
Consumer Portfolio Overview Unsecured 13% Miscellaneous 1% Auto 27% $12M CD/Savings Secured 45% Recreational 14% Portfolio Characteristics December 31, 2023 % of Total Portfolio 0.5% Average Loan Size $10K Note: Since exiting the indirect auto loan origination business at the end of 2015, the Bank h
Slide 22: Allowance for Credit Losses
Allowance for Credit Losses Allowance for Credit Losses / Total Loans (%) 1.38 1.11 1.16 1.09 0.63 2019Y 2020Y 2021Y 2022Y 2023Y For the Year Ended (Dollars in thousands) 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Allowance for Credit Losses Allowance for Credit Losses - Beginning $ 9,45
Slide 23: Asset Quality Trends
Asset Quality Trends Nonperforming Assets ($000s) NPAs / Assets (%) $12,018 0.44 $11,131 0.40 $10,013 $10,207 0.36 0.36 $6,361 0.23 2022Q4 2023Q1 2023Q2 2023Q3 2023Q4 2022Q4 2023Q1 2023Q2 2023Q3 2023Q4 Net Charge-offs / Avg. Loans (%) Reserves / NPLs (%) 0.01 535.6 534.1 529.3 0.00 0.00 429.6 (0.01)
Slide 24: Deposit Portfolio
Deposit Portfolio Deposit Mix at December 31, 2023 ▪ Total deposits increased $46.3 million, or 2.1%, to $2.26 billion at December 31, 2023, compared to $2.21 billion at Money Savings September 30, 2023. Interest- Market 6.1% 8.0% bearing Demand ▪ Beginning in the fourth quarter of 2022, management
Slide 25: Non-Interest Expense
Non-Interest Expense $2,753,807 $2,815,155 $2,513,203 $2,321,181 $63,062 $62,192 $62,353 $62,630 $60,865 $61,761 $2,148,916 $57,131 $55,480 $1,786,469 $48,168 $46,079 $41,882 $39,488 2018 2019 2020 2021 2022 2023 1 Non-interest expense (GAAP) Core Non-interest expense Total Assets 1 Non-GAAP financi
Slide 26: Financial Profile
Financial Profile As of December 31, For the Three Months Ended (Dollars in thousands, except per share data) 2019 2020 2021 2022 2023 3/31/2023 6/30/2023 9/30/2023 12/31/2023 Balance Sheet Total Assets $ 2,148,916 $ 2,321,181 $ 2,513,203 $ 2,753,807 $ 2,815,155 $ 2,751,669 $ 2,753,674 $ 2,789,533 $
Slide 27: Appendix
APPENDIX
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation As of December 31, For the Three Months Ended (Dollars in thousands, except per share data) 2019 2020 2021 2022 2023 3/31/2023 6/30/2023 9/30/2023 12/31/2023 Tangible common equity: Total stockholders' equity $ 241,976 $ 243,284 $ 242,598 $ 215,782 $ 226,768 $ 218,458 $ 218,3
Slide 29: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) For the Three Months Ended (Dollars in thousands) 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 Net Income $ 9,404 $ 7,304 $ 8,898 $ 3,812 $ 6,547 $ 2,781 $ 3,538 Plus: Provision for Credit Losses 941 1,162 1,268 388 (2,840) (34) 486 Plus
Slide 30: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) For the Three Months Ended (Dollars in thousands) 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 Interest on Deposits $ 1,217 $ 976 $ 907 $ 1,315 $ 3,052 $ 6,221 $ 9,534 $ 11,733 $ 14,584 Average Interest-Bearing Depos
Slide 31: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) For the Three Months Ended (Dollars in thousands) 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 Net interest income $ 22,519 $ 20,173 $ 18,387 $ 17,469 $ 18,491 Provision for credit losses 1,268 388 (2,840) (34) 486 Net interest income after provision for cr
Slide 32: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) For the Three Months Ended (Dollars in thousands, except per share data) 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 Core basic earnings per common share $ 0.63 $ 0.52 $ 0.67 $ 0.33 $ 0.39 Diluted earnings per common share (GAAP) 0.88 0.38 0.67 0.28 0.36 L
Slide 33: Non-GAAP Reconciliation footnotes
1 Adjustment to noninterest income recorded upon completion of the sale of the Alice and Victoria branches for remaining discount on loans sold. 2 Income from insurance proceeds represents nontaxable income related to an insurance policy for a former chief financial officer of the Company and the Ba
Slide 34: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) (Dollars in thousands) 2018 2019 2020 2021 2022 2023 Total noninterest expense $ 41,882 $ 48,168 $ 57,131 $ 63,062 $ 60,865 $ 62,630 Severance (293) - (289) (181) (632) (123) Loan purchase expense - - - - - (95) Acquisition expense (1,445) (2,089) (1,062) (2,448)
Slide 35: Slide 35