Investar Holding Corporation · NASDAQ:ISTR
Investar — Q3 2024 Earnings Presentation
35 slides from Investar's earnings presentation, October 2024
Slide 1: Q3 2024 Investor Presentation
NASDAQ: ISTR Q3 2024 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 – 3rd Quarter 2024
Execution of Strategic Initiatives – 3rd Quarter 2024 Balance Sheet Optimization and Capital ▪ We are continuing to focus on consistent, quality earnings through the optimization and right-sizing of the balance sheet. As a result of the right-sizing of our balance sheet and net recoveries of $0.4 mi
Slide 5: Financial Overview – 3rd Quarter 2024
Financial Overview – 3rd Quarter 2024 Highlights 3rd Quarter Results ▪ Return on average assets increased to 0.77% for the 3rd quarter of 2024 compared to 0.59% for the Balance Sheet (in millions) 2nd quarter of 2024. Core return on average assets1 increased to 0.63% for the 3rd quarter of Assets $
Slide 6: 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 7: 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 8: Creating Shareholder Value
Creating Shareholder Value Tangible Book Value Per Share1 5.8% TBV / Share (Ex. AOCI) 1 GROWTH CAGR2 $24.65 $24.00 2019 – 2024Q3 $23.55 $22.37 $22.00 $20.73 $19.89 $19.72 $20.00 $19.20 $19.08 $18.92 $18.79 TBV per Share1 ($) $18.62 $18.00 $17.43 $16.00 $14.00 $12.00 $10.00 2019 2020 2021 2022 2023 2
Slide 9: 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 2023 2024 1 Annualized based on 3rd quarter 2014 dividend of $0.0068 plus 4th quarter 2014 dividend of $0.007 2 Annualized based on actual dividends of $0.305 through the 3rd qu
Slide 10: Recent GAAP Earnings Performance
Recent GAAP Earnings Performance Net Income ($000) Earnings Per Share (Diluted) $5,381 $0.54 $4,707 $0.48 $4,057 $0.41 $3,538 $0.36 $2,781 $0.28 2023Q3 2023Q4 2024Q1 2024Q2 2024Q3 2023Q3 2023Q4 2024Q1 2024Q2 2024Q3 ROAA (%) Net Interest Margin (%) 2.66 2.72 2.62 2.67 0.77 2.59 0.68 0.59 0.50 0.40 20
Slide 11: Recent Core Earnings Performance
Recent Core Earnings Performance Core Earnings ($000)1 Core Earnings Per Share (Diluted) 1 $4,444 $0.45 $4,273 $0.43 $3,833 $0.39 $3,567 $0.36 $3,259 $0.33 2023Q3 2023Q4 2024Q1 2024Q2 2024Q3 2023Q3 2023Q4 2024Q1 2024Q2 2024Q3 Core ROAA (%) 1 Core Efficiency Ratio (%) 1 0.61 0.63 79.98 78.81 80.24 79
Slide 12: 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 2,000 shares during the 3rd quarter at an 2.25% average price of $18.50 and 18,621 s
Slide 13: 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 14: Investment Portfolio – 3rd Quarter 2024
Investment Portfolio – 3rd Quarter 2024 Commercial Available-for-Sale Mortgage-backed (Dollars in thousands) Book Value Gain (Loss) Fair Value Securities 18% U.S. Governmental Securities $ 20,298 $ (173) $ 20,125 State and Political Subdivisions 17,748 (1,866) 15,882 Residential Mortgage-backed Corp
Slide 15: Investment Portfolio – Principal Cash Flows
Investment Portfolio – Principal Cash Flows ~$61 Million Maturing by Q4 2025 $15.0 $11.5 $11.6 $11.7 $11.5 15% 12% 9% 6% 3% 2024Q4 2025Q1 2025Q2 2025Q3 2025Q4 Cashflow ($ in millions) Cumulative Principal Return (%) 15
Slide 16: Loan Portfolio – 3rd Quarter 2024
Loan Portfolio – 3rd Quarter 2024 Consumer 0.5% ▪ Consistent with our strategy to optimize the balance sheet, total loans decreased $10.9 million, or 0.5%, to $2.16 billion at September 30, 2024 Commercial & compared to $2.17 billion at June 30, 2024. Industrial Construction & 23.9% Development 7.7%
Slide 17: CRE Portfolio Overview
CRE Portfolio Overview Farmland Healthcare 1% 9% Warehouse 6% Wholesale Trade 4% Professional, Manufacturing & Multi-family Other 8% $1.1B 47% Office 9% Retail 16% Portfolio Characteristics September 30, 2024 % of Total Portfolio 49.2% Owner-Occupied as % of CRE Portfolio 44.1% Nonowner-Occupied Off
Slide 18: C&I Portfolio Overview
C&I Portfolio Overview By Collateral Type By Industry Attorney Cases Transportation & 10% Warehousing 12% Other 9% Finance & Insurance Professional 43% (Scientific & Tech) Accounts Receivable Unsecured 12% 44% 5% $420M $420M Equipment Construction 9% 7% Cash/Brokerage Secured 10% Other Marine 26% 13
Slide 19: Construction & Development Portfolio Overview
Construction & Development Portfolio Overview 1-4 Family Development/Builder Lots 15% 1-4 Family Construction - Consumer 2% Commercial Land & Construction 47% $167M 1-4 Family Construction - Builder 30% Lot/Raw Land - Multifamily Consumer 4% 2% Portfolio Characteristics September 30, 2024 % of Total
Slide 20: Consumer Portfolio Overview
Consumer Portfolio Overview Unsecured 13% Miscellaneous 1% Auto 28% CD/Savings Secured $11M 46% Recreational 12% Portfolio Characteristics September 30, 2024 % of Total Portfolio 0.5% Average Loan Size $11K Note: Since exiting the indirect auto loan origination business at the end of 2015, the Bank
Slide 21: Allowance for Credit Losses
Allowance for Credit Losses Allowance for Credit Losses / Total Loans (%) 1.38 1.30 1.16 1.09 1.11 2020 2021 2022 2023 2024Q3 For the Nine For the Year Ended Months Ended (Dollars in thousands) 12/31/2020 12/31/2021 12/31/2022 12/31/2023 9/30/2024 Allowance for Credit Losses Allowance for Credit Los
Slide 22: Asset Quality Trends
Asset Quality Trends Nonperforming Assets ($000s) NPAs / Assets (%) $10,207 0.36 0.36 0.36 $10,013 $9,897 0.32 $8,860 0.30 $8,337 2023Q3 2023Q4 2024Q1 2024Q2 2024Q3 2023Q3 2023Q4 2024Q1 2024Q2 2024Q3 Net Charge-offs / Avg. Loans (%) Reserves / NPLs (%) 0.01 682.0 576.4 534.1 529.3 515.4 0.00 0.00 (0
Slide 23: Deposit Portfolio – 3rd Quarter 2024
Deposit Portfolio – 3rd Quarter 2024 Money Market ▪ Total deposits increased $77.2 million, or 3.5%, to $2.29 billion at 8.6% September 30, 2024, compared to $2.21 billion at June 30, 2024. Savings 5.6% Interest-bearing ▪ Beginning in the 4th quarter of 2022, management utilized Demand 21.9% brokere
Slide 24: Non-Interest Expense
Non-Interest Expense $2,753,807 $2,815,155 $2,802,573 $2,513,203 $2,321,181 $2,148,916 $63,062 $62,192 $62,353 $62,630 $61,761 $62,604 $62,607 $60,865 $57,131 $55,480 $48,168 $46,079 2 2019 2020 2021 2022 2023 YTD2024 Non-interest expense (GAAP) Core Non-interest expense 1 Total Assets 1 Non-GAAP fi
Slide 25: 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 12/31/2023 3/31/2024 6/30/2024 9/30/2024 Balance Sheet Total Assets $ 2,148,916 $ 2,321,181 $ 2,513,203 $ 2,753,807 $ 2,815,155 $ 2,815,155 $ 2,787,706 $ 2,787,578 $
Slide 26: Appendix
APPENDIX
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation As of December 31, As of the Three Months Ended (Dollars in thousands, except per share data) 2019 2020 2021 2022 2023 12/31/2023 3/31/2024 6/30/2024 9/30/2024 Tangible common equity: Total stockholders' equity $ 241,976 $ 243,284 $ 242,598 $ 215,782 $ 226,768 $ 226,768 $ 227
Slide 28: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) For the Three Months Ended (Dollars in thousands) 3/31/2023 6/30/2023 9/30/2023 12/31/2023 3/31/2024 6/30/2024 9/30/2024 Net Income $ 3,812 $ 6,547 $ 2,781 $ 3,538 $ 4,707 $ 4,057 $ 5,381 Plus: Provision for Credit Losses 388 (2,840) (34) 486 (1,419) (415) (945) P
Slide 29: 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 12/31/2023 3/31/2024 6/30/2024 9/30/2024 Interest on Deposits $ 1,315 $ 3,052 $ 6,221 $ 9,534 $ 11,733 $ 14,584 $ 14,845 $ 14,865 $ 15,729 Average Interest-Bearing
Slide 30: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) For the Three Months Ended (Dollars in thousands) 9/30/2023 12/31/2023 3/31/2024 6/30/2024 9/30/2024 Net interest income $ 17,469 $ 18,491 $ 17,216 $ 17,198 $ 17,856 Provision for credit losses (34) 486 (1,419) (415) (945) Net interest income after provision for c
Slide 31: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) For the Three Months Ended (Dollars in thousands, except per share data) 9/30/2023 12/31/2023 3/31/2024 6/30/2024 9/30/2024 Core basic earnings per common share $ 0.33 $ 0.39 $ 0.44 $ 0.36 $ 0.45 Diluted earnings per common share (GAAP) 0.28 0.36 0.48 0.41 0.54 Lo
Slide 32: 1 Adjustment to noninterest income directly attributable to income from a legal settlement related
1 Adjustment to noninterest income directly attributable to income from a legal settlement related to one loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida. 2 Change in net asset value of other investments represents unrealized gains or losses on Invest
Slide 33: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) YTD 2024 (Dollars in thousands) 2019 2020 2021 2022 2023 YTD 2024 Annualized Total noninterest expense $ 48,168 $ 57,131 $ 63,062 $ 60,865 $ 62,630 $ 46,953 $ 62,604 Severance - (289) (181) (632) (123) - Loan purchase expense - - - - (95) - Acquisition expense (2,
Slide 34: Non-GAAP Reconciliation (continued)
Non-GAAP Reconciliation (continued) For the three months ended September 30, 2024 June 30, 2024 Interest Interest Average Income/ Average Income/ (Dollars in thousands) Balance Expense Yield/ Rate Balance Expense Yield/ Rate Interest-earning assets: Loans $ 2,159,412 $ 32,764 6.04% $ 2,168,762 $ 32,
Slide 35: Slide 35