Investar Holding Corporation · NASDAQ:ISTR
Investar — Q3 2023 Earnings Presentation
35 slides from Investar's earnings presentation, November 2023
Slide 1: Q3 2023 Investor Presentation
NASDAQ: ISTR Q3 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: Execution of Strategic Initiatives
Execution of Strategic Initiatives Loan Portfolio Transformation ▪ During the 3rd quarter, we entered into an agreement to acquire commercial and industrial revolving lines of credit with an unpaid principal balance of $163 million in two tranches. The purchase of the first tranche, consisting of lo
Slide 5: Execution of Strategic Initiatives (continued)
Execution of Strategic Initiatives (continued) Capital ▪ Remain focused on building capital levels through organic earnings coupled with strategic management of balance sheet, including disciplined pace of share repurchases. Funding ▪ Beginning in the second quarter of 2023, we began utilizing the F
Slide 6: Financial Overview – 3rd Quarter 2023
Financial Overview – 3rd Quarter 2023 3rd Quarter Results Highlights Balance Sheet (in millions) ▪ Recorded quarterly net income of $2.8 million in the 3rd quarter. Assets $ 2,790 ▪ Total revenues, or interest and noninterest income, for the 3rd quarter totaled $34.8 million, an Net Loans $ 2,073 in
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 $24.00 6.1% TBV / Share (Ex. AOCI) 1 $23.18 $22.37 GROWTH CAGR2 $22.00 2018 – 2023Q3 $19.89 $19.72 $20.00 $19.20 $19.08 $18.79 $18.62 TBV per Share1 ($) $18.00 $17.46 $17.43 $17.13 $17.00 $16.00 $14.00 $12.00 $10.00 2018 2019 2020 2021 2022 Q
Slide 10: Dividend History
Dividend History $0.45 $0.40 $0.35 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $- 1 2 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q3 2023 1 Annualized based on 3rd quarter 2014 dividend of $0.0068 plus 4th quarter 2014 dividend of $0.007 2 Annualized based on 3rd quarter 2023 dividend of $0.10 10
Slide 11: Recent GAAP Earnings Performance
Recent GAAP Earnings Performance Net Income ($000) Earnings Per Share (Diluted) $8,898 $0.88 $7,304 $0.73 $6,547 $0.67 $3,812 $0.38 $2,781 $0.28 2022Q3 2022Q4 2023Q1 2023Q2 2023Q3 2022Q3 2022Q4 2023Q1 2023Q2 2023Q3 ROAA (%) Net Interest Margin (%) 1.32 3.77 3.50 1.11 3.13 0.96 2.82 2.66 0.57 0.40 20
Slide 12: Recent Core Earnings Performance
Recent Core Earnings Performance Core Earnings ($000)1 Core Earnings Per Share (Diluted) 1 $7,119 $0.71 $6,616 $0.67 $6,219 $0.62 $5,123 $0.51 $3,259 $0.33 2022Q3 2022Q4 2023Q1 2023Q2 2023Q3 2022Q3 2022Q4 2023Q1 2023Q2 2023Q3 Core ROAA (%) 1 Core Efficiency Ratio (%) 1 1.08 79.98 0.97 74.21 0.92 69.
Slide 13: Returns to Shareholders
Returns to Shareholders Shares Repurchased (%)1 5.89% ▪ In July 2023, the Board of Directors authorized an additional 5.02% 350,000 shares for repurchase under our stock repurchase program. 3.79% 3.39% ▪ Repurchased 52,407 shares during the 3rd quarter at an 1.93% average price of $12.89 and 190,682
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 – 3rd Quarter Update
Investment Portfolio – 3rd Quarter Update Available-for-Sale Commercial (Dollars in thousands) Book Value Gain (Loss) Fair Value Mortgage-backed U.S. Governmental Securities $ 66,500 $ (680) $ 65,820 Residential Securities 17% State and Political Subdivisions 19,864 (3,071) 16,793 Mortgage-backed Se
Slide 16: Investment Portfolio – Principal Cash Flows
Investment Portfolio – Principal Cash Flows ~$101 Million Maturing by Q4 ‘25 $16.0 25% $14.0 $14.1 22% $14.0 20% $11.7 20% $12.0 17% $10.8 $10.8 $10.2 $10.4 $9.7 $10.0 $9.1 14% 15% $8.0 11% 9% 10% $6.0 7% $4.0 4% 5% $2.0 2% $- 0% Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 202
Slide 17: Loan Portfolio – 3rd Quarter Update
Loan Portfolio – 3rd Quarter Update ▪ Loan yield improved to 5.53% for the 3rd quarter compared to 5.44% for Consumer the 2nd quarter. 0.6% Commercial & ▪ Total loans increased $18.2 million, or 0.9%, to $2.10 billion Industrial at September 30, 2023, compared to $2.08 billion at June 30, 2023. 19.6
Slide 18: CRE Portfolio Overview
CRE Portfolio Overview Farmland Healthcare 1% 12% Warehouse 6% Professional, Manufacturing & Other Multi-family 45% 10% $1.1B Office 10% Retail 16% Portfolio Characteristics September 30, 2023 % of Total Portfolio 50.1% Owner-Occupied as % of CRE Portfolio 41.8% Nonowner-Occupied Office as a % of To
Slide 19: C&I Portfolio Overview
C&I Portfolio Overview By Collateral Type By Industry Unsecured Transportation & 7% Attorney Cases Warehousing 13% 18% Marine 16% Real Estate 5% Other Professional 13% (Scientific & T ech) 15% Construction $310M 9% $310M Cash/Brokerage Secured Finance and 10% Insurance 16% Inventory 1% Accounts Rece
Slide 20: Construction & Development Portfolio Overview
Construction & Development Portfolio Overview Multi-family 1% 1-4 Family Construction - Builder 24% Commercial Land and Construction 55% $211M 1-4 Family Construction - Consumer 8% Lot/Raw Land - Consumer 1-4 Family 2% Development/Builder Lots 10% Portfolio Characteristics September 30, 2023 % of To
Slide 21: Consumer Portfolio Overview
Consumer Portfolio Overview Unsecured 13% Miscellaneous 1% Auto 27% $12M CD/Savings Secured 44% Recreational 15% Portfolio Characteristics September 30, 2023 % of Total Portfolio 0.6% Average Loan Size $10K Note: Since exiting the indirect auto loan origination business at the end of 2015, the Bank
Slide 22: Allowance for Credit Losses
Allowance for Credit Losses Allowance for Credit Losses / Total Loans (%) 1.42 1.11 1.16 1.09 0.63 2019Y 2020Y 2021Y 2022Y 2023Q3 For the Nine For the Year Ended Months Ended (Dollars in thousands) 12/31/2019 12/31/2020 12/31/2021 12/31/2022 9/30/2023 Allowance for Credit Losses Allowance for Credit
Slide 23: Asset Quality Trends
Asset Quality Trends Nonperforming Assets ($000s) NPAs / Assets (%) $15,440 0.58 $12,018 0.44 $11,131 $10,013 0.40 0.36 $6,361 0.23 2022Q3 2022Q4 2023Q1 2023Q2 2023Q3 2022Q3 2022Q4 2023Q1 2023Q2 2023Q3 Net Charge-offs / Avg. Loans (%) Reserves / NPLs (%) 0.01 0.00 0.00 535.6 534.1 429.6 (0.01) 214.9
Slide 24: Deposit Portfolio
Deposit Portfolio Deposit Mix at September 30, 2023 ▪ Total deposits increased $28.6 million, or 1.3%, to $2.21 billion at September 30, 2023, compared to $2.18 billion at June 30, 2023. Money Savings Interest- Market 6.0% bearing 8.4% ▪ Uninsured deposits were 34% of total deposits at September Dem
Slide 25: Non-Interest Expense
Non-Interest Expense $2,753,807 $2,789,533 $2,513,203 $2,321,181 $63,062 $62,353 $62,920 $62,192 $60,865 $61,849 $2,148,916 $57,131 $55,480 $1,786,469 $48,168 $46,079 $41,882 $39,488 2 2018 2019 2020 2021 2022 YTD 2023 Non-interest expense (GAAP) Core Non-interest expense 1 Total Assets 1 Non-GAAP f
Slide 26: Financial Profile
Financial Profile As of December 31, For the Three Months Ended (Dollars in thousands, except per share data) 2018 2019 2020 2021 2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 Balance Sheet Total Assets $ 1,786,469 $ 2,148,916 $ 2,321,181 $ 2,513,203 $ 2,753,807 $ 2,753,807 $ 2,751,669 $ 2,753,674 $
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) 2018 2019 2020 2021 2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 Tangible common equity: Total stockholders' equity $ 182,262 $ 241,976 $ 243,284 $ 242,598 $ 215,782 $ 215,782 $ 218,4
Slide 29: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) For the Three Months Ended (Dollars in thousands) 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 Net Income $ 10,103 $ 9,404 $ 7,304 $ 8,898 $ 3,812 $ 6,547 $ 2,781 Plus: Provision for Credit Losses (449) 941 1,162 1,268 388 (2,840) (34) Pl
Slide 30: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) For the Three Months Ended (Dollars in thousands) 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 Interest on Deposits $ 1,854 $ 1,217 $ 976 $ 907 $ 1,315 $ 3,052 $ 6,221 $ 9,534 $ 11,733 Average Interest-Bearing Deposit
Slide 31: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) For the Three Months Ended (Dollars in thousands) 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 Net interest income $ 23,467 $ 22,519 $ 20,173 $ 18,387 $ 17,469 Provision for credit losses 1,162 1,268 388 (2,840) (34) Net interest income after provision for c
Slide 32: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) For the Three Months Ended (Dollars in thousands, except per share data) 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 Core basic earnings per common share $ 0.71 $ 0.63 $ 0.52 $ 0.67 $ 0.33 Diluted earnings per common share (GAAP) 0.73 0.88 0.38 0.67 0.28 Lo
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 the former Chief Financial Officer of Investar and the Ban
Slide 34: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) YTD 2023 (Dollars in thousands) 2018 2019 2020 2021 2022 YTD 2023 Annualized Total noninterest expense $ 41,882 $ 48,168 $ 57,131 $ 63,062 $ 60,865 $ 47,190 $ 62,920 Severance (293) - (289) (181) (632) (123) Loan purchase expense - - - - - (29) Acquisition expense
Slide 35: Slide 35