Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Investar Holding Corporation Announces 2021 Second Quarter Results By: Investar Holding via AccessWire July 22, 2021 at 18:00 PM EDT BATON ROUGE, LA / ACCESSWIRE / July 22, 2021 / Investar Holding Corporation ("Investar") (NASDAQ:ISTR), the holding company for Investar Bank, National Association (the "Bank"), today announced financial results for the quarter ended June 30, 2021. Investar reported record net income of $5.7 million, or $0.53 per diluted common share, for the second quarter of 2021, compared to $5.4 million, or $0.51 per diluted common share, for the quarter ended March 31, 2021, and $4.3 million, or $0.39 per diluted common share, for the quarter ended June 30, 2020.On a non-GAAP basis, core earnings per diluted common share for the second quarter of 2021 were $0.53 compared to $0.49 for the first quarter of 2021 and $0.32 for the second quarter of 2020. Core earnings exclude certain non-operating items including, but not limited to, gain on sale of investment securities, change in the fair value of equity securities, and acquisition expense (refer to the Reconciliation of Non-GAAP Financial Measures tables for a reconciliation of GAAP to non-GAAP metrics).Investar Holding Corporation President and Chief Executive Officer John D'Angelo said:"I am pleased to announce another successful quarter for Investar with record net income of $5.7 million. We are excited to have completed the acquisition of Cheaha Bank and operational conversion in the second quarter. In line with our stated strategy, we continued to reduce our cost of funds by 13 basis points through an improved deposit mix. We expanded our owner-occupied commercial real estate portfolio as we remain focused on relationship banking and growing our commercial portfolio. As the economy recovers from the pandemic, we remain confident in the overall credit quality of our loan portfolio and continue to experience minimal loss from charge-offs. Loan yield improved in the second quarter, however, we did experience compression of our net interest margin due to excess liquidity of approximately $230 million. This excess liquidity will continue to put pressure on our net interest margin as we work to deploy it through loan growth and investment opportunities. Investar continues to invest in improved banking technology as we continue to see a shift in customer behavior with the use of technology. We continue to evaluate our branch network and look for opportunities that will further improve our operating efficiency."Second Quarter Highlights •Investar recorded record net income of $5.7 million for the quarter ended June 30, 2021, compared to net income of $5.4 million for the quarter ended March 31, 2021 and $4.3 million for the quarter ended June 30, 2020. •On April 1, 2021, Investar closed its previously announced acquisition of Cheaha Financial Group, Inc. ("Cheaha"), headquartered in Oxford, Alabama, and its wholly-owned subsidiary, Cheaha Bank. As of March 31, 2021, Cheaha had approximately $238 million in assets, $120 million in net loans, and $206 million in total deposits. In the aggregate, Cheaha's shareholders received approximately $41.1 million in cash consideration. On June 18, 2021, Investar completed the operational conversion of Cheaha. •Total loans increased $101.9 million, or 5.5%, to $1.95 billion at June 30, 2021, compared to $1.85 billion at March 31, 2021, and increased $133.8 million, or 7.4%, compared to $1.81 billion at June 30, 2020. Excluding loans acquired from Cheaha on April 1, 2021 with a total balance of $120.0 million at June 30, 2021 and PPP loans with a total balance of $73.0 million ($1.7 million acquired from Cheaha), $106.6 million, and $109.5 million at June 30, 2021, March 31, 2021 and June 30, 2020, respectively, total loans increased $17.2 million, or 1.0% (4.0% annualized), compared to March 31, 2021 and increased $52.1 million, or 3.1%, compared to June 30, 2020. •The yield on the loan portfolio increased to 4.78% at June 30, 2021 compared to 4.72% at March 31, 2021. •Cost of deposits decreased 12 basis points to 0.51% for the quarter ended June 30, 2021 compared to 0.63% for the quarter ended March 31, 2021 and decreased 69 basis points compared to 1.20% for the quarter ended June 30, 2020. Our overall cost of funds decreased 13 and 66 basis points to 0.70% compared to 0.83% and 1.36% for the quarters ended March 31, 2021 and June 30, 2020, respectively. •Total deposits increased $250.3 million, or 12.5%, to $2.26 billion at June 30, 2021, compared to $2.01 billion at March 31, 2021, and increased $370.6 million, or 19.6%, compared to $1.89 billion at June 30, 2020. Investar recorded total deposits with a fair value of $207.0 million from its acquisition of Cheaha on April 1, 2021, and the remaining increase is due to organic growth. •Noninterest-bearing deposits increased $66.6 million, or 12.9%, to $582.1 million at June 30, 2021, compared to $515.5 million at March 31, 2021 and increased $113.0 million, or 24.1%, compared to $469.1 million at June 30, 2020. Investar acquired approximately $45.4 million in noninterest-bearing deposits from Cheaha, and the remaining increase is due to organic growth. Excluding noninterest-bearing deposits acquired from Cheaha, noninterest-bearing deposits increased $21.3 million, or 4.1%, compared to March 31, 2021 and increased $67.7 million, or 14.4%, compared to June 30, 2020. •Deposit mix improved during the second quarter of 2021. Noninterest-bearing deposits as a percentage of total deposits increased to 25.8% at June 30, 2021 compared to 25.6% at March 31, 2021 and 24.8% at June 30, 2020. Time deposits as a percentage of total deposits decreased to 23.4% at June 30, 2021, compared to 24.6% at March 31, 2021 and 35.5% at June 30, 2020.LoansTotal loans were $1.95 billion at June 30, 2021, an increase of $101.9 million, or 5.5%, compared to March 31, 2021, and an increase of $133.8 million, or 7.4%, compared to June 30, 2020. Excluding the loans acquired from Cheaha on April 1, 2021, or $120.0 million at June 30, 2021, total loans decreased $18.2 million, or 1.0%, compared to March 31, 2021, and increased $13.8 million, or 0.8%, compared to June 30, 2020.The following table sets forth the composition of the total loan portfolio as of the dates indicated (dollars in thousands). Linked Quarter Change Year/Year Change Percentage of Total Loans 6/30/2021 3/31/2021 6/30/2020 $ % $ % 6/30/2021 6/30/2020 Mortgage loans on real estate Construction and development $213,070 $190,816 $199,419 $22,254 11.7% $13,651 6.8% 10.9% 11.0%1-4 Family 375,690 341,266 326,102 34,424 10.1 49,588 15.2 19.3 18.0 Multifamily 60,309 60,844 60,617 (535) (0.9) (308) (0.5) 3.1 3.3 Farmland 22,263 24,145 28,845 (1,882) (7.8) (6,582) (22.8) 1.1 1.6 Commercial real estate Owner-occupied 438,590 399,393 371,783 39,197 9.8 66,807 18.0 22.5 20.5 Nonowner-occupied 445,125 430,487 411,776 14,638 3.4 33,349 8.1 22.9 22.7 Commercial and industrial 370,203 380,534 390,085 (10,331) (2.7) (19,882) (5.1) 19.0 21.5 Consumer 22,570 18,485 25,344 4,085 22.1 (2,774) (10.9) 1.2 1.4 Total loans $1,947,820 $1,845,970 $1,813,971 $101,850 5.5% $133,849 7.4% 100% 100%In response to the COVID-19 pandemic, in the first quarter of 2020, the Bank instituted a 90-day loan deferral program for customers impacted by the pandemic. As of June 30, 2021, the balance of loans participating in the 90-day deferral program was approximately $0.3 million, or 0.01% of the total loan portfolio, compared to $11.2 million, or 0.6% of the total loan portfolio, at March 31, 2021. As 90-day loan deferrals have expired, most customers have returned to their regular payment schedules.In the second quarter of 2020, the Bank began participating as a lender in the Paycheck Protection Program ("PPP") as established by the CARES Act. The PPP loans are generally 100% guaranteed by the SBA ("Small Business Administration"), have an interest rate of 1%, and are eligible to be forgiven based on certain criteria, with the SBA remitting any applicable forgiveness amount to the lender. At June 30, 2021, the balance of the Bank's PPP loans was $73.0 million, compared to $106.6 million at March 31, 2021 and $109.5 million at June 30, 2020. Eighty-seven percent of the total number of PPP loans we have originated have principal balances of $150,000 or less. At June 30, 2021, approximately 57% of the total balance of PPP loans originated have been forgiven by the SBA or paid off by the customer. Excluding loans acquired from Cheaha on April 1, 2021 with a total balance of $120.0 million at June 30, 2021 and PPP loans with a total balance of $73.0 million ($1.7 million acquired from Cheaha), $106.6 million, and $109.5 million at June 30, 2021, March 31, 2021 and June 30, 2020, respectively, total loans increased $17.2 million, or 1.0% (4.0% annualized), compared to March 31, 2021 and increased $52.1 million, or 3.1%, compared to June 30, 2020.We experienced the greatest loan growth in the owner-occupied commercial real estate portfolio for the quarter ended June 30, 2021 compared to March 31, 2021 as we remain focused on relationship banking and growing our commercial loan portfolios. We acquired approximately $7.7 million in owner-occupied commercial real estate loans from Cheaha, and the remaining $31.5 million increase is due to organic loan growth.At June 30, 2021, Investar's total business lending portfolio, which consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans, was $808.8 million, an increase of $28.9 million, or 3.7%, compared to the business lending portfolio of $779.9 million at March 31, 2021, and an increase of $46.9 million, or 6.2%, compared to the business lending portfolio of $761.9 million at June 30, 2020. The increase in the business lending portfolio compared to March 31, 2021 is primarily due to the acquisition of Cheaha, which added approximately $22.3 million in loans. The remaining growth of $6.6 million is due to the growth in the owner-occupied commercial real estate portfolio, as the commercial and industrial loan portfolio decreased during the period driven by payoffs of PPP loans. The increase in the business lending portfolio at June 30, 2021 compared to June 30, 2020 is primarily due to the growth in the owner-occupied commercial real estate portfolio.Consumer loans totaled $22.6 million at June 30, 2021, an increase of $4.1 million, or 22.1%, compared to $18.5 million at March 31, 2021, and a decrease of $2.8 million, or 10.9%, compared to $25.3 million at June 30, 2020. The increase in consumer loans compared to March 31, 2021 is primarily attributable to the acquisition of Cheaha, which added approximately $6.1 million in consumer loans at June 30, 2021. The decrease in consumer loans compared to June 30, 2020 is mainly attributable to the scheduled paydowns of the indirect auto lending portfolio and is consistent with our business strategy.Our loan portfolio includes loans to businesses in certain industries that may be more significantly affected by the pandemic than others. These loans, including loans related to oil and gas, food services, hospitality, and entertainment, represent approximately 6.4% of our total portfolio, or 5.9% excluding PPP loans, at June 30, 2021, compared to 6.8% of our total portfolio, or 5.7% excluding PPP loans, at March 31, 2021 and 6.8% of our total portfolio, or 5.8% excluding PPP loans, at June 30, 2020 as shown in the table below.Industry Percentage of Loan Portfolio June 30, 2021 Percentage of Loan Portfolio June 30, 2021 (excluding PPP loans) Percentage of Loan Portfolio March 31, 2021 Percentage of Loan Portfolio March 31, 2021 (excluding PPP loans) Percentage of Loan Portfolio June 30, 2020 Percentage of Loan Portfolio June 30, 2020 (excluding PPP loans) Oil and gas 2.7% 2.5% 3.2% 2.4% 3.5% 2.7%Food services 2.9 2.6 2.8 2.5 2.4 2.2 Hospitality 0.4 0.4 0.4 0.4 0.4 0.4 Entertainment 0.4 0.4 0.4 0.4 0.5 0.5 Total 6.4% 5.9% 6.8% 5.7% 6.8% 5.8%Credit QualityNonperforming loans were $20.9 million, or 1.07% of total loans, at June 30, 2021, an increase of $6.0 million compared to $14.9 million, or 0.81% of total loans, at March 31, 2021, and an increase of $7.8 million compared to $13.1 million, or 0.72% of total loans, at June 30, 2020. The increase in nonperforming loans compared to March 31, 2021 is mainly attributable to two loan relationships totaling $5.7 million at June 30, 2021. Of the $5.7 million, $2.9 million is secured by real estate. Included in nonperforming loans are acquired loans with a balance of $6.2 million at June 30, 2021, or 30% of nonperforming loans.The allowance for loan losses was $20.4 million, or 97.8% and 1.05% of nonperforming and total loans, respectively, at June 30, 2021, compared to $20.4 million, or 137.3% and 1.11%, respectively, at March 31, 2021, and $16.7 million, or 127.6% and 0.92%, respectively, at June 30, 2020.The provision for loan losses was $0.1 million for the quarter ended June 30, 2021 compared to $0.4 million and $2.5 million for the quarters ended March 31, 2021 and June 30, 2020, respectively. Additional provision for loan losses was recorded in 2020 primarily as a result of the deterioration of market conditions which have been adversely affected by the COVID-19 pandemic. The Bank continues to assess the impact the pandemic may have on its loan portfolio to determine the need for additional reserves.DepositsTotal deposits at June 30, 2021 were $2.26 billion, an increase of $250.3 million, or 12.5%, compared to $2.01 billion at March 31, 2021, and an increase of $370.6 million, or 19.6%, compared to $1.89 billion at June 30, 2020. Investar acquired approximately $207.0 million in deposits from Cheaha at the time of acquisition on April 1, 2021.The COVID-19 pandemic has created a significant amount of excess liquidity in the market, and, as a result, we have experienced large increases in both noninterest and interest-bearing demand deposits, and in money market deposit accounts and savings accounts compared to June 30, 2020. The Bank utilized $100.1 million in brokered deposits in the second quarter of 2021 and $80.0 million in the first quarter of 2021, which are used to satisfy the required borrowings under its interest rate swap agreements, due to more favorable pricing. Our deposit mix has improved and reflects our consistent focus on relationship banking and growing our commercial relationships, as well as the effects of the pandemic on consumer and business spending.The following table sets forth the composition of deposits as of the dates indicated (dollars in thousands). Linked Quarter Change Year/Year Change Percentage of Total Deposits 6/30/2021 3/31/2021 6/30/2020 $ % $ % 6/30/2021 6/30/2020 Noninterest-bearing demand deposits $582,109 $515,487 $469,095 $66,622 12.9% $113,014 24.1% 25.8% 24.8%Interest-bearing demand deposits 630,829 564,128 437,821 66,701 11.8 193,008 44.1 27.9 23.2 Brokered deposits 100,117 80,015 - 20,102 25.1 100,117 - 4.4 - Money market deposit accounts 243,058 200,744 183,371 42,314 21.1 59,687 32.5 10.8 9.7 Savings accounts 174,385 154,131 129,157 20,254 13.1 45,228 35.0 7.7 6.8 Time deposits 529,668 495,375 670,144 34,293 6.9 (140,476) (21.0) 23.4 35.5 Total deposits $2,260,166 $2,009,880 $1,889,588 $250,286 12.5% $370,578 19.6% 100.0% 100.0%Noninterest-bearing and interest-bearing demand deposits experienced the largest increases compared to March 31, 2021 and June 30, 2020. These increases were primarily driven by government stimulus payments, reduced spending by consumer and business customers related to the COVID-19 pandemic, and increases in PPP borrowers' deposit accounts. We believe these factors may be temporary depending on the future economic effects of the COVID-19 pandemic.Management made a strategic decision to either reprice or run-off higher yielding time deposits and other interest-bearing deposit products during 2020 and the first and second quarters of 2021, which contributed to our decreasing cost of deposits compared to the quarters ended March 31, 2021 and June 30, 2020. The increase in time deposits at June 30, 2021 compared to March 31, 2021 is primarily due to the acquisition of Cheaha.Net Interest IncomeNet interest income for the second quarter of 2021 totaled $21.2 million, an increase of $1.5 million, or 7.8%, compared to the first quarter of 2021, and an increase of $2.8 million, or 15.4%, compared to the second quarter of 2020. Included in net interest income for the quarters ended June 30, 2021, March 31, 2021 and June 30, 2020 is $0.5 million, $0.1 million, and $0.4 million of interest income accretion from the acquisition of loans. Also included in net interest income for the quarters ended June 30, 2021 and March 31, 2021 are interest recoveries of $25,000 and $17,000, respectively, on acquired loans.Investar's net interest margin was 3.48% for the quarter ended June 30, 2021, compared to 3.64% for the quarter ended March 31, 2021 and 3.46% for the quarter ended June 30, 2020. The decrease in net interest margin for the quarter ended June 30, 2021 compared to the quarter ended March 31, 2021 was driven by excess liquidity. The average balance of interest-bearing balances with banks for the quarter ended June 30, 2021, as shown on our net interest margin table, increased $157.2 million compared to the quarter ended March 31, 2021, and resulted in a 23 basis point decrease in the net interest margin. This decrease in net interest margin was partially offset by a six basis point increase in the yield on the loan portfolio and a 13 basis point decrease in the cost of funds for the quarter ended June 30, 2021 compared to the quarter ended March 31, 2021. The increase in net interest margin for the quarter ended June 30, 2021 compared to the quarter ended June 30, 2020 was driven by a 66 basis point decrease in the cost of funds partially offset by a 49 basis point decrease in the yield on interest-earning assets.The yield on interest-earning assets was 4.00% for the quarter ended June 30, 2021, compared to 4.26% for the quarter ended March 31, 2021 and 4.49% for the quarter ended June 30, 2020. The decrease in the yield on interest-earning assets compared to the quarter ended June 30, 2020 was driven by lower loan yields and a large decrease in the yield earned on investment securities. In response to the pandemic, during March 2020, the Federal Reserve reduced the federal funds rate 150 basis points to 0 to 0.25 percent, which has affected the yields that we earn on our interest-earning assets. In addition, the PPP loans originated have a contractual interest rate of 1% and origination fees based on the loan amount, which impacts the yield on our loan portfolio.Exclusive of PPP loans, which had an average balance of $96.0 million and related interest and fee income of $1.2 million for the quarter ended June 30, 2021, compared to an average balance of $97.3 million and related interest and fee income of $1.4 million for the quarter ended March 31, 2021 and an average balance of $78.9 million and related interest and fee income of $0.8 million for the quarter ended June 30, 2020, adjusted net interest margin was 3.41% for the quarter ended June 30, 2021, compared to an adjusted net interest margin of 3.54% for the quarter ended March 31, 2021 and 3.44% for the quarter ended June 30, 2020. Included in PPP interest and fee income for the quarters ended June 30, 2021 and March 31, 2021 is $0.6 million and $0.7 million, respectively, of accelerated fee income recognized due to the forgiveness or pay-off of PPP loans. Refer to the Reconciliation of Non-GAAP Financial Measures table for a reconciliation of GAAP to non-GAAP metrics.Exclusive of the interest income accretion from the acquisition of loans, interest recoveries, and accelerated fee income recognized due to the forgiveness or pay-off of PPP loans, all discussed above, adjusted net interest margin decreased to 3.29% for the quarter ended June 30, 2021, compared to 3.49% for the quarter ended March 31, 2021, and 3.39% for the quarter ended June 30, 2020. The adjusted yield on interest-earning assets was 3.82% for the quarter ended June 30, 2021 compared to 4.10% and 4.43% for the quarters ended March 31, 2021 and June 30, 2020, respectively. Refer to the Reconciliation of Non-GAAP Financial Measures table for a reconciliation of GAAP to non-GAAP metrics.The cost of deposits decreased 12 basis points to 0.51% for the quarter ended June 30, 2021 compared to 0.63% for the quarter ended March 31, 2021 and decreased 69 basis points compared to 1.20% for the quarter ended June 30, 2020. The decrease in the cost of deposits compared to the quarters ended March 31, 2021 and June 30, 2020 reflects the decrease in rates paid for all categories of interest-bearing deposits.The overall costs of funds for the quarter ended June 30, 2021 decreased 13 basis points to 0.70% compared to 0.83% for the quarter ended March 31, 2021 and decreased 66 basis points compared to 1.36% for the quarter ended June 30, 2020. The decrease in the cost of funds for the quarter ended June 30, 2021 compared to the quarters ended March 31, 2021 and June 30, 2020 resulted from both lower cost of deposits and lower average balances of short-term borrowings, the costs of which are driven by the Federal Reserve's federal funds rates.Noninterest IncomeNoninterest income for the second quarter of 2021 totaled $4.1 million, an increase of $1.7 million, or 72.6%, compared to the first quarter of 2021 and an increase of $0.2 million, or 3.8%, compared to the second quarter of 2020. The increase in noninterest income compared to the quarter ended March 31, 2021 was mainly driven by a $1.1 million increase in the gain on sale of investment securities. The increase in noninterest income compared to the quarter ended June 30, 2020 is mainly attributable to a $0.5 million increase in the gain on sale of investment securities and $0.2 million increases in service charges on deposit accounts and interchange fees, partially offset by a $0.7 million decrease in other operating income, compared to the quarter ended June 30, 2020. The decrease in other operating income compared to the quarter ended June 30, 2020 was driven by a $0.6 million decrease in derivative fee income.Noninterest ExpenseNoninterest expense for the second quarter of 2021 totaled $18.0 million, an increase of $3.2 million, or 21.3%, compared to the first quarter of 2021, and an increase of $3.5 million, or 24.0%, compared to the second quarter of 2020. The increase in noninterest expense for the quarter ended June 30, 2021 compared to the quarter ended March 31, 2021 was driven by a $1.3 million increase in acquisition expense and a $1.2 million increase in salaries and benefits, both of which are primarily related to the acquisition of Cheaha. In addition, the Bank is self-insured for employee health insurance and experienced two unfavorable health claims resulting in an increase of $0.3 million in employee benefits compared to the quarter ended March 31, 2021.The increase in noninterest expense for the second quarter of 2021 compared to the second quarter of 2020 is primarily attributable to the $1.4 million and $1.3 million increases in acquisition expense and salaries and employee benefits, respectively. The increase in salaries and employee benefits is driven by an increase in employees following the acquisition of Cheaha, increase in health insurance claims, and deferred compensation costs.TaxesInvestar recorded income tax expense of $1.5 million for the quarter ended June 30, 2021, which equates to an effective tax rate of 20.7%, a decrease from the effective tax rate of 21.1% at March 31, 2021 and increase from the effective tax rate of 19.2% for the quarter ended June 30, 2020.Basic and Diluted Earnings Per Common ShareInvestar reported basic and diluted earnings per common share of $0.54 and $0.53, respectively, for the quarter ended June 30, 2021, an increase of $0.03 and $0.02, respectively, compared to basic and diluted earnings per common share of $0.51 for the quarter ended March 31, 2021, and an increase of $0.15 and $0.14, respectively, compared to basic and diluted earnings per common share of $0.39 for the quarter ended June 30, 2020.About Investar Holding CorporationInvestar, headquartered in Baton Rouge, Louisiana, provides full banking services, excluding trust services, through its wholly-owned banking subsidiary, Investar Bank, National Association. The Bank currently operates 34 branch locations serving Louisiana, Texas, and Alabama. At June 30, 2021, the Bank had 357 full-time equivalent employees and total assets of $2.7 billion.Non-GAAP Financial MeasuresThis press release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States of America, or GAAP. These measures and ratios include "tangible common equity," "tangible assets," "tangible equity to tangible assets," "tangible book value per common share," "core noninterest income," "core earnings before noninterest expense," "core noninterest expense," "core earnings before income tax expense," "core income tax expense," "core earnings," "core efficiency ratio," "core return on average assets," "core return on average equity," "core basic earnings per share," and "core diluted earnings per share." We also present certain average loan, yield, net interest income and net interest margin data adjusted to show the effects of excluding PPP loans, interest income accretion from the acquisition of loans, and interest recoveries. Management believes these non-GAAP financial measures provide information useful to investors in understanding Investar's financial results, and Investar believes that its presentation, together with the accompanying reconciliations, provide a more complete understanding of factors and trends affecting Investar's business and allow investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and Investar strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. A reconciliation of the non-GAAP financial measures disclosed in this press release to the comparable GAAP financial measures is included at the end of the financial statement tables.Forward-Looking and Cautionary StatementsThis press release 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 forward-looking statements by terminology such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "could," "should," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates," or the negative version of those words or other comparable words. In addition, any of the following matters related to the pandemic may impact our financial results in future periods, and such impacts may be material depending on the length and severity of the pandemic and government and societal responses to it: •borrowers may default on loans and economic conditions could deteriorate requiring further increases to the allowance for loan losses; •demand for our loans and other banking services, and related income and fees, may be reduced; •the value of collateral securing our loans may deteriorate; and •lower market interest rates will have an adverse impact on our variable rate loans and reduce our income.Any forward-looking statements contained in this press release are based on the historical performance of Investar and its subsidiaries or on Investar's current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by Investar that the future plans, estimates or expectations by Investar will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to Investar's operations, financial results, financial condition, business prospects, growth strategy and liquidity. If one or more of these or other risks or uncertainties materialize, or if Investar's underlying assumptions prove to be incorrect, Investar's actual results may vary materially from those indicated in these statements. Investar does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. These factors include, but are not limited to, the following, any one or more of which could materially affect the outcome of future events: •the ongoing impacts of the COVID-19 pandemic on economic conditions in general and on the Bank's markets in particular, and on the Bank's operations and financial results; •ongoing disruptions in the oil and gas industry due to fluctuations in the price of oil; •business and economic conditions generally and in the financial services industry in particular, whether nationally, regionally or in the markets in which we operate; •increased cyber and payment fraud risk, as cybercriminals attempt to profit from the disruption, given increased online and remote activity; •our ability to achieve organic loan and deposit growth, and the composition of that growth; •our ability to identify and enter into agreements to combine with attractive acquisition candidates, finance acquisitions, complete acquisitions after definitive agreements are entered into, and successfully integrate acquired operations; •changes (or the lack of changes) in interest rates, yield curves and interest rate spread relationships that affect our loan and deposit pricing; •possible cessation or market replacement of LIBOR and the related effect on our LIBOR-based financial products and contracts, including, but not limited to, hedging products, debt obligations, investments and loans; •the extent of continuing client demand for the high level of personalized service that is a key element of our banking approach as well as our ability to execute our strategy generally; •our dependence on our management team, and our ability to attract and retain qualified personnel; •changes in the quality or composition of our loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers; •inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates; •the concentration of our business within our geographic areas of operation in Louisiana, Texas and Alabama; and •concentration of credit exposure.These factors should not be construed as exhaustive. Additional information on these and other risk factors can be found in Item 1A. "Risk Factors" and in the "Special Note Regarding Forward-Looking Statements" in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Investar's Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (the "SEC").For further information contact:Investar Holding CorporationChris HufftChief Financial Officer(225) 227-2215Chris.Hufft@investarbank.comINVESTAR HOLDING CORPORATIONSUMMARY FINANCIAL INFORMATION(Amounts in thousands, except share data)(Unaudited) As of and for the three months ended 6/30/2021 3/31/2021 6/30/2020 Linked Quarter Year/Year EARNINGS DATA Total interest income $24,347 $22,969 $23,802 6.0% 2.3%Total interest expense 3,182 3,335 5,463 (4.6) (41.8)Net interest income 21,165 19,634 18,339 7.8 15.4 Provision for loan losses 114 400 2,500 (71.5) (95.4)Total noninterest income 4,082 2,365 3,931 72.6 3.8 Total noninterest expense 17,960 14,809 14,480 21.3 24.0 Income before income taxes 7,173 6,790 5,290 5.6 35.6 Income tax expense 1,485 1,430 1,016 3.8 46.2 Net income $5,688 $5,360 $4,274 6.1 33.1 AVERAGE BALANCE SHEET DATA Total assets $2,650,050 $2,354,504 $2,296,082 12.6% 15.4%Total interest-earning assets 2,441,368 2,185,853 2,130,236 11.7 14.6 Total loans 1,940,513 1,857,272 1,789,863 4.5 8.4 Total interest-bearing deposits 1,677,471 1,484,515 1,403,168 13.0 19.5 Total interest-bearing liabilities 1,817,746 1,623,286 1,615,422 12.0 12.5 Total deposits 2,236,902 1,951,046 1,827,512 14.7 22.4 Total stockholders' equity 251,793 247,236 236,651 1.8 6.4 PER SHARE DATA Earnings: Basic earnings per common share $0.54 $0.51 $0.39 5.9% 38.5%Diluted earnings per common share 0.53 0.51 0.39 3.9 35.9 Core Earnings(1): Core basic earnings per common share(1) 0.53 0.49 0.32 8.2 65.6 Core diluted earnings per common share(1) 0.53 0.49 0.32 8.2 65.6 Book value per common share 24.08 23.79 21.84 1.2 10.3 Tangible book value per common share(1) 19.85 20.72 18.82 (4.2) 5.5 Common shares outstanding 10,413,390 10,436,493 10,839,977 (0.2) (3.9)Weighted average common shares outstanding - basic 10,414,875 10,509,468 10,882,084 (0.9) (4.3)Weighted average common shares outstanding - diluted 10,541,907 10,567,173 10,882,084 (0.2) (3.1) PERFORMANCE RATIOS Return on average assets 0.86% 0.92% 0.75% (6.5)% 14.7%Core return on average assets(1) 0.84 0.89 0.62 (5.6) 35.5 Return on average equity 9.06 8.79 7.26 3.1 24.8 Core return on average equity(1) 8.85 8.50 6.00 4.1 47.5 Net interest margin 3.48 3.64 3.46 (4.4) 0.6 Net interest income to average assets 3.20 3.38 3.21 (5.3) (0.3)Noninterest expense to average assets 2.72 2.55 2.54 6.7 7.1 Efficiency ratio(2) 71.14 67.32 65.02 5.7 9.4 Core efficiency ratio(1) 69.62 67.35 67.03 3.4 3.9 Dividend payout ratio 14.81 13.73 15.38 7.9 (3.7)Net charge-offs to average loans - 0.02 - (100.0) - (1) Non-GAAP financial measure. See reconciliation.(2) Efficiency ratio represents noninterest expenses divided by the sum of net interest income (before provision for loan losses) and noninterest income.INVESTAR HOLDING CORPORATIONSUMMARY FINANCIAL INFORMATION(Amounts in thousands, except share data)(Unaudited) As of and for the three months ended 6/30/2021 3/31/2021 6/30/2020 Linked Quarter Year/Year ASSET QUALITY RATIOS Nonperforming assets to total assets 0.84% 0.68% 0.56% 23.5% 50.0%Nonperforming loans to total loans 1.07 0.81 0.72 32.1 48.6 Allowance for loan losses to total loans 1.05 1.11 0.92 (5.4) 14.1 Allowance for loan losses to nonperforming loans 97.83 137.33 127.62 (28.8) (23.3) CAPITAL RATIOS Investar Holding Corporation: Total equity to total assets 9.38% 10.31% 10.03% (9.1)% (6.5)%Tangible equity to tangible assets(1) 7.86 9.10 8.77 (13.6) (10.4)Tier 1 leverage ratio 8.19 9.37 9.31 (12.6) (12.0)Common equity tier 1 capital ratio(2) 9.96 11.08 11.02 (10.1) (9.6)Tier 1 capital ratio(2) 10.43 11.42 11.37 (8.7) (8.3)Total capital ratio(2) 13.55 14.77 14.61 (8.3) (7.3)Investar Bank: Tier 1 leverage ratio 9.49 10.56 10.09 (10.1) (5.9)Common equity tier 1 capital ratio(2) 12.10 12.86 12.33 (5.9) (1.9)Tier 1 capital ratio(2) 12.10 12.86 12.33 (5.9) (1.9)Total capital ratio(2) 13.11 13.95 13.25 (6.0) (1.1)(1) Non-GAAP financial measure. See reconciliation.(2) Estimated for June 30, 2021.INVESTAR HOLDING CORPORATIONCONSOLIDATED BALANCE SHEETS(Amounts in thousands, except share data)(Unaudited) June 30, 2021 March 31, 2021 June 30, 2020 ASSETS Cash and due from banks $36,775 $29,970 $31,725 Interest-bearing balances due from other banks 229,498 69,400 99,239 Federal funds sold 500 97 - Cash and cash equivalents 266,773 99,467 130,964 Available for sale securities at fair value (amortized cost of $267,706, $299,310, and $242,175, respectively) 269,360 301,433 246,886 Held to maturity securities at amortized cost (estimated fair value of $12,007, $12,341, and $14,265, respectively) 11,812 11,966 14,053 Loans, net of allowance for loan losses of $20,445, $20,423, and $16,657, respectively 1,927,375 1,825,547 1,797,314 Other equity securities 16,725 16,763 19,398 Bank premises and equipment, net of accumulated depreciation of $17,566, $16,803, and $14,022, respectively 62,588 56,631 56,767 Other real estate owned, net 1,490 1,518 69 Accrued interest receivable 12,205 12,868 13,701 Deferred tax asset 508 - 1,515 Goodwill and other intangible assets, net 43,973 32,001 32,715 Bank-owned life insurance 50,462 39,131 38,437 Other assets 9,636 10,631 7,544 Total assets $2,672,907 $2,407,956 $2,359,363 LIABILITIES Deposits Noninterest-bearing $582,109 $515,487 $469,095 Interest-bearing 1,678,057 1,494,393 1,420,493 Total deposits 2,260,166 2,009,880 1,889,588 Advances from Federal Home Loan Bank 82,500 82,500 158,500 Repurchase agreements 6,713 4,274 4,908 Subordinated debt 42,943 42,920 42,854 Junior subordinated debt 8,320 5,962 5,923 Accrued taxes and other liabilities 21,550 14,169 20,884 Total liabilities 2,422,192 2,159,705 2,122,657 STOCKHOLDERS' EQUITY Preferred stock, no par value per share; 5,000,000 shares authorized - - - Common stock, $1.00 par value per share; 40,000,000 shares authorized; 10,413,390, 10,436,493, and 10,839,977 shares issued and outstanding, respectively 10,413 10,436 10,840 Surplus 155,847 155,822 161,729 Retained earnings 80,867 75,998 63,767 Accumulated other comprehensive income 3,588 5,995 370 Total stockholders' equity 250,715 248,251 236,706 Total liabilities and stockholders' equity $2,672,907 $2,407,956 $2,359,363 INVESTAR HOLDING CORPORATIONCONSOLIDATED STATEMENTS OF INCOME(Amounts in thousands, except share data)(Unaudited) For the three months ended June 30, 2021 March 31, 2021 June 30, 2020 INTEREST INCOME Interest and fees on loans $23,135 $21,627 $22,118 Interest on investment securities 1,009 1,179 1,455 Other interest income 203 163 229 Total interest income 24,347 22,969 23,802 INTEREST EXPENSE Interest on deposits 2,114 2,302 4,190 Interest on borrowings 1,068 1,033 1,273 Total interest expense 3,182 3,335 5,463 Net interest income 21,165 19,634 18,339 Provision for loan losses 114 400 2,500 Net interest income after provision for loan losses 21,051 19,234 15,839 NONINTEREST INCOME Service charges on deposit accounts 607 491 405 Gain on sale of investment securities, net 1,721 600 1,178 Loss on sale of fixed assets, net - (2) - Loss on sale of other real estate owned, net (5) - - Gain on sale of loans 46 - - Servicing fees and fee income on serviced loans 65 64 96 Interchange fees 501 388 347 Income from bank owned life insurance 311 223 233 Change in the fair value of equity securities 91 65 248 Other operating income 745 536 1,424 Total noninterest income 4,082 2,365 3,931 Income before noninterest expense 25,133 21,599 19,770 NONINTEREST EXPENSE Depreciation and amortization 1,278 1,206 1,149 Salaries and employee benefits 9,916 8,695 8,572 Occupancy 676 637 536 Data processing 973 746 786 Marketing 71 41 78 Professional fees 378 358 429 Acquisition expenses 1,641 361 255 Other operating expenses 3,027 2,765 2,675 Total noninterest expense 17,960 14,809 14,480 Income before income tax expense 7,173 6,790 5,290 Income tax expense 1,485 1,430 1,016 Net income $5,688 $5,360 $4,274 EARNINGS PER SHARE Basic earnings per common share $0.54 $0.51 $0.39 Diluted earnings per common share $0.53 $0.51 $0.39 Cash dividends declared per common share $0.08 $0.07 $0.06 INVESTAR HOLDING CORPORATIONCONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS(Amounts in thousands)(Unaudited) For the three months ended June 30, 2021 March 31, 2021 June 30, 2020 Interest Interest Interest Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate Balance Expense Rate Assets Interest-earning assets: Loans $1,940,513 $23,135 4.78% $1,857,272 $21,627 4.72% $1,789,863 $22,118 4.97%Securities: Taxable 283,318 860 1.22 270,040 1,039 1.56 244,703 1,253 2.06 Tax-exempt 22,061 149 2.71 20,228 140 2.81 29,150 202 2.79 Interest-bearing balances with banks 195,476 203 0.42 38,313 163 1.72 66,520 229 1.38 Total interest-earning assets 2,441,368 24,347 4.00 2,185,853 22,969 4.26 2,130,236 23,802 4.49 Cash and due from banks 40,639 30,335 25,900 Intangible assets 44,727 32,112 32,561 Other assets 143,774 126,750 121,706 Allowance for loan losses (20,458) (20,546) (14,321) Total assets $2,650,050 $2,354,504 $2,296,082 Liabilities and stockholders' equity Interest-bearing liabilities: Deposits: Interest-bearing demand deposits $854,504 $701 0.33% $736,502 $685 0.38% $597,022 $827 0.56%Brokered deposits 97,245 240 0.99 83,832 209 1.01 - - - Savings deposits 173,553 71 0.16 146,078 66 0.19 125,680 94 0.30 Time deposits 552,169 1,102 0.80 518,103 1,342 1.05 680,466 3,269 1.93 Total interest-bearing deposits 1,677,471 2,114 0.51 1,484,515 2,302 0.63 1,403,168 4,190 1.20 Short-term borrowings 10,030 5 0.21 11,407 6 0.18 84,447 233 1.11 Long-term debt 130,245 1,063 3.27 127,364 1,027 3.27 127,807 1,040 3.27 Total interest-bearing liabilities 1,817,746 3,182 0.70 1,623,286 3,335 0.83 1,615,422 5,463 1.36 Noninterest-bearing deposits 559,431 466,531 424,344 Other liabilities 21,080 17,451 19,665 Stockholders' equity 251,793 247,236 236,651 Total liability and stockholders' equity $2,650,050 $2,354,504 $2,296,082 Net interest income/net interest margin $21,165 3.48% $19,634 3.64% $18,339 3.46%INVESTAR HOLDING CORPORATIONRECONCILIATION OF NON-GAAP FINANCIAL MEASURESINTEREST EARNED AND YIELD ANALYSIS ADJUSTED FOR PPP LOANS(Amounts in thousands)(Unaudited) For the three months ended June 30, 2021 March 31, 2021 June 30, 2020 Interest Interest Interest Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate Balance Expense Rate Interest-earning assets: Loans $1,940,513 $23,135 4.78% $1,857,272 $21,627 4.72% $1,789,863 $22,118 4.97%Adjustments: PPP loans 96,045 1,237 5.17% 97,288 1,405 5.86% 78,903 788 4.02%Adjusted loans 1,844,468 21,898 4.76% 1,759,984 20,222 4.66% 1,710,960 21,330 5.01%Securities: Taxable 283,318 860 1.22 270,040 1,039 1.56 244,703 1,253 2.06 Tax-exempt 22,061 149 2.71 20,228 140 2.81 29,150 202 2.79 Interest-bearing balances with banks 195,476 203 0.42 38,313 163 1.72 66,520 229 1.38 Adjusted interest-earning assets 2,345,323 23,110 3.95 2,088,565 21,564 4.19 2,051,333 23,014 4.51 Total interest-bearing liabilities 1,817,746 3,182 0.70 1,623,286 3,335 0.83 1,615,422 5,463 1.36 Adjusted net interest income/adjusted net interest margin $19,928 3.41% $18,229 3.54% $17,551 3.44%INVESTAR HOLDING CORPORATIONRECONCILIATION OF NON-GAAP FINANCIAL MEASURESINTEREST EARNED AND YIELD ANALYSIS ADJUSTED FOR INTEREST ACCRETION, RECOVERIES AND ACCELERATED PPP INCOME(Amounts in thousands)(Unaudited) For the three months ended June 30, 2021 March 31, 2021 June 30, 2020 Interest Interest Interest Average Income/ Average Income/ Average Income/ Balance Expense Yield/ Rate Balance Expense Yield/ Rate Balance Expense Yield/ Rate Interest-earning assets: Loans $1,940,513 $23,135 4.78% $1,857,272 $21,627 4.72% $1,789,863 $22,118 4.97%Adjustments: Accelerated fee income for forgiven or paid off PPP loans 556 692 - Interest recoveries 25 17 - Accretion 532 135 365 Adjusted Loans 1,940,513 22,022 4.55 1,857,272 20,783 4.54 1,789,863 21,753 4.89 Securities: Taxable 283,318 860 1.22 270,040 1,039 1.56 244,703 1,253 2.06 Tax-exempt 22,061 149 2.71 20,228 140 2.81 29,150 202 2.79 Interest-bearing balances with banks 195,476 203 0.42 38,313 163 1.72 66,520 229 1.38 Adjusted interest-earning assets 2,441,368 23,234 3.82 2,185,853 22,125 4.10 2,130,236 23,437 4.43 Total interest-bearing liabilities 1,817,746 3,182 0.70 1,623,286 3,335 0.83 1,615,422 5,463 1.36 Adjusted net interest income/adjusted net interest margin $20,052 3.29% $18,790 3.49% $17,974 3.39% INVESTAR HOLDING CORPORATIONRECONCILIATION OF NON-GAAP FINANCIAL MEASURES(Amounts in thousands, except share data)(Unaudited) June 30, 2021 March 31, 2021 June 30, 2020 Tangible common equity Total stockholders' equity $250,715 $248,251 $236,706 Adjustments: Goodwill 39,527 28,144 28,144 Core deposit intangible 4,346 3,757 4,471 Trademark intangible 100 100 100 Tangible common equity $206,742 $216,250 $203,991 Tangible assets Total assets $2,672,907 $2,407,956 $2,359,363 Adjustments: Goodwill 39,527 28,144 28,144 Core deposit intangible 4,346 3,757 4,471 Trademark intangible 100 100 100 Tangible assets $2,628,934 $2,375,955 $2,326,648 Common shares outstanding 10,413,390 10,436,493 10,839,977 Tangible equity to tangible assets 7.86% 9.10% 8.77%Book value per common share $24.08 $23.79 $21.84 Tangible book value per common share 19.85 20.72 18.82 INVESTAR HOLDING CORPORATIONRECONCILIATION OF NON-GAAP FINANCIAL MEASURES(Amounts in thousands, except share data)(Unaudited) Three months ended 6/30/2021 3/31/2021 6/30/2020 Net interest income(a) $21,165 $19,634 $18,339 Provision for loan losses 114 400 2,500 Net interest income after provision for loan losses 21,051 19,234 15,839 Noninterest income(b) 4,082 2,365 3,931 Gain on sale of investment securities, net (1,721) (600) (1,178)Loss on sale of other real estate owned, net 5 - - Loss on sale of fixed assets, net - 2 - Change in the fair value of equity securities (91) (65) (248)Core noninterest income(d) 2,275 1,702 2,505 Core earnings before noninterest expense 23,326 20,936 18,344 Total noninterest expense(c) 17,960 14,809 14,480 Acquisition expense (1,641) (361) (255)Severance - (78) (253)Core noninterest expense(f) 16,319 14,370 13,972 Core earnings before income tax expense 7,007 6,566 4,372 Core income tax expense(1) 1,450 1,385 840 Core earnings $5,557 $5,181 $3,532 Core basic earnings per common share 0.53 0.49 0.32 Diluted earnings per common share (GAAP) $0.53 $0.51 $0.39 Gain on sale of investment securities, net (0.12) (0.05) (0.09)Loss on sale of other real estate owned, net - - - Loss on sale of fixed assets, net - - - Change in the fair value of equity securities (0.01) (0.01) (0.02)Acquisition expense 0.13 0.03 0.02 Severance - 0.01 0.02 Core diluted earnings per common share $0.53 $0.49 $0.32 Efficiency ratio(c) / (a+b) 71.14% 67.32% 65.02%Core efficiency ratio(f) / (a+d) 69.62% 67.35% 67.03%Core return on average assets(2) 0.84% 0.89% 0.62%Core return on average equity(2) 8.85% 8.50% 6.00%Total average assets $2,650,050 $2,354,504 $2,296,082 Total average stockholders' equity 251,793 247,236 236,651 (1) Core income tax expense is calculated using the effective tax rates of 20.7%, 21.1% and 19.2% for the quarters ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively.(2) Core earnings used in calculation. No adjustments were made to average assets or average equity.SOURCE: Investar Holding CorporationView source version on accesswire.com: https://www.accesswire.com/656678/Investar-Holding-Corporation-Announces-2021-Second-Quarter-Results Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Investar Holding Corporation Announces 2021 Second Quarter Results By: Investar Holding via AccessWire July 22, 2021 at 18:00 PM EDT BATON ROUGE, LA / ACCESSWIRE / July 22, 2021 / Investar Holding Corporation ("Investar") (NASDAQ:ISTR), the holding company for Investar Bank, National Association (the "Bank"), today announced financial results for the quarter ended June 30, 2021. Investar reported record net income of $5.7 million, or $0.53 per diluted common share, for the second quarter of 2021, compared to $5.4 million, or $0.51 per diluted common share, for the quarter ended March 31, 2021, and $4.3 million, or $0.39 per diluted common share, for the quarter ended June 30, 2020.On a non-GAAP basis, core earnings per diluted common share for the second quarter of 2021 were $0.53 compared to $0.49 for the first quarter of 2021 and $0.32 for the second quarter of 2020. Core earnings exclude certain non-operating items including, but not limited to, gain on sale of investment securities, change in the fair value of equity securities, and acquisition expense (refer to the Reconciliation of Non-GAAP Financial Measures tables for a reconciliation of GAAP to non-GAAP metrics).Investar Holding Corporation President and Chief Executive Officer John D'Angelo said:"I am pleased to announce another successful quarter for Investar with record net income of $5.7 million. We are excited to have completed the acquisition of Cheaha Bank and operational conversion in the second quarter. In line with our stated strategy, we continued to reduce our cost of funds by 13 basis points through an improved deposit mix. We expanded our owner-occupied commercial real estate portfolio as we remain focused on relationship banking and growing our commercial portfolio. As the economy recovers from the pandemic, we remain confident in the overall credit quality of our loan portfolio and continue to experience minimal loss from charge-offs. Loan yield improved in the second quarter, however, we did experience compression of our net interest margin due to excess liquidity of approximately $230 million. This excess liquidity will continue to put pressure on our net interest margin as we work to deploy it through loan growth and investment opportunities. Investar continues to invest in improved banking technology as we continue to see a shift in customer behavior with the use of technology. We continue to evaluate our branch network and look for opportunities that will further improve our operating efficiency."Second Quarter Highlights •Investar recorded record net income of $5.7 million for the quarter ended June 30, 2021, compared to net income of $5.4 million for the quarter ended March 31, 2021 and $4.3 million for the quarter ended June 30, 2020. •On April 1, 2021, Investar closed its previously announced acquisition of Cheaha Financial Group, Inc. ("Cheaha"), headquartered in Oxford, Alabama, and its wholly-owned subsidiary, Cheaha Bank. As of March 31, 2021, Cheaha had approximately $238 million in assets, $120 million in net loans, and $206 million in total deposits. In the aggregate, Cheaha's shareholders received approximately $41.1 million in cash consideration. On June 18, 2021, Investar completed the operational conversion of Cheaha. •Total loans increased $101.9 million, or 5.5%, to $1.95 billion at June 30, 2021, compared to $1.85 billion at March 31, 2021, and increased $133.8 million, or 7.4%, compared to $1.81 billion at June 30, 2020. Excluding loans acquired from Cheaha on April 1, 2021 with a total balance of $120.0 million at June 30, 2021 and PPP loans with a total balance of $73.0 million ($1.7 million acquired from Cheaha), $106.6 million, and $109.5 million at June 30, 2021, March 31, 2021 and June 30, 2020, respectively, total loans increased $17.2 million, or 1.0% (4.0% annualized), compared to March 31, 2021 and increased $52.1 million, or 3.1%, compared to June 30, 2020. •The yield on the loan portfolio increased to 4.78% at June 30, 2021 compared to 4.72% at March 31, 2021. •Cost of deposits decreased 12 basis points to 0.51% for the quarter ended June 30, 2021 compared to 0.63% for the quarter ended March 31, 2021 and decreased 69 basis points compared to 1.20% for the quarter ended June 30, 2020. Our overall cost of funds decreased 13 and 66 basis points to 0.70% compared to 0.83% and 1.36% for the quarters ended March 31, 2021 and June 30, 2020, respectively. •Total deposits increased $250.3 million, or 12.5%, to $2.26 billion at June 30, 2021, compared to $2.01 billion at March 31, 2021, and increased $370.6 million, or 19.6%, compared to $1.89 billion at June 30, 2020. Investar recorded total deposits with a fair value of $207.0 million from its acquisition of Cheaha on April 1, 2021, and the remaining increase is due to organic growth. •Noninterest-bearing deposits increased $66.6 million, or 12.9%, to $582.1 million at June 30, 2021, compared to $515.5 million at March 31, 2021 and increased $113.0 million, or 24.1%, compared to $469.1 million at June 30, 2020. Investar acquired approximately $45.4 million in noninterest-bearing deposits from Cheaha, and the remaining increase is due to organic growth. Excluding noninterest-bearing deposits acquired from Cheaha, noninterest-bearing deposits increased $21.3 million, or 4.1%, compared to March 31, 2021 and increased $67.7 million, or 14.4%, compared to June 30, 2020. •Deposit mix improved during the second quarter of 2021. Noninterest-bearing deposits as a percentage of total deposits increased to 25.8% at June 30, 2021 compared to 25.6% at March 31, 2021 and 24.8% at June 30, 2020. Time deposits as a percentage of total deposits decreased to 23.4% at June 30, 2021, compared to 24.6% at March 31, 2021 and 35.5% at June 30, 2020.LoansTotal loans were $1.95 billion at June 30, 2021, an increase of $101.9 million, or 5.5%, compared to March 31, 2021, and an increase of $133.8 million, or 7.4%, compared to June 30, 2020. Excluding the loans acquired from Cheaha on April 1, 2021, or $120.0 million at June 30, 2021, total loans decreased $18.2 million, or 1.0%, compared to March 31, 2021, and increased $13.8 million, or 0.8%, compared to June 30, 2020.The following table sets forth the composition of the total loan portfolio as of the dates indicated (dollars in thousands). Linked Quarter Change Year/Year Change Percentage of Total Loans 6/30/2021 3/31/2021 6/30/2020 $ % $ % 6/30/2021 6/30/2020 Mortgage loans on real estate Construction and development $213,070 $190,816 $199,419 $22,254 11.7% $13,651 6.8% 10.9% 11.0%1-4 Family 375,690 341,266 326,102 34,424 10.1 49,588 15.2 19.3 18.0 Multifamily 60,309 60,844 60,617 (535) (0.9) (308) (0.5) 3.1 3.3 Farmland 22,263 24,145 28,845 (1,882) (7.8) (6,582) (22.8) 1.1 1.6 Commercial real estate Owner-occupied 438,590 399,393 371,783 39,197 9.8 66,807 18.0 22.5 20.5 Nonowner-occupied 445,125 430,487 411,776 14,638 3.4 33,349 8.1 22.9 22.7 Commercial and industrial 370,203 380,534 390,085 (10,331) (2.7) (19,882) (5.1) 19.0 21.5 Consumer 22,570 18,485 25,344 4,085 22.1 (2,774) (10.9) 1.2 1.4 Total loans $1,947,820 $1,845,970 $1,813,971 $101,850 5.5% $133,849 7.4% 100% 100%In response to the COVID-19 pandemic, in the first quarter of 2020, the Bank instituted a 90-day loan deferral program for customers impacted by the pandemic. As of June 30, 2021, the balance of loans participating in the 90-day deferral program was approximately $0.3 million, or 0.01% of the total loan portfolio, compared to $11.2 million, or 0.6% of the total loan portfolio, at March 31, 2021. As 90-day loan deferrals have expired, most customers have returned to their regular payment schedules.In the second quarter of 2020, the Bank began participating as a lender in the Paycheck Protection Program ("PPP") as established by the CARES Act. The PPP loans are generally 100% guaranteed by the SBA ("Small Business Administration"), have an interest rate of 1%, and are eligible to be forgiven based on certain criteria, with the SBA remitting any applicable forgiveness amount to the lender. At June 30, 2021, the balance of the Bank's PPP loans was $73.0 million, compared to $106.6 million at March 31, 2021 and $109.5 million at June 30, 2020. Eighty-seven percent of the total number of PPP loans we have originated have principal balances of $150,000 or less. At June 30, 2021, approximately 57% of the total balance of PPP loans originated have been forgiven by the SBA or paid off by the customer. Excluding loans acquired from Cheaha on April 1, 2021 with a total balance of $120.0 million at June 30, 2021 and PPP loans with a total balance of $73.0 million ($1.7 million acquired from Cheaha), $106.6 million, and $109.5 million at June 30, 2021, March 31, 2021 and June 30, 2020, respectively, total loans increased $17.2 million, or 1.0% (4.0% annualized), compared to March 31, 2021 and increased $52.1 million, or 3.1%, compared to June 30, 2020.We experienced the greatest loan growth in the owner-occupied commercial real estate portfolio for the quarter ended June 30, 2021 compared to March 31, 2021 as we remain focused on relationship banking and growing our commercial loan portfolios. We acquired approximately $7.7 million in owner-occupied commercial real estate loans from Cheaha, and the remaining $31.5 million increase is due to organic loan growth.At June 30, 2021, Investar's total business lending portfolio, which consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans, was $808.8 million, an increase of $28.9 million, or 3.7%, compared to the business lending portfolio of $779.9 million at March 31, 2021, and an increase of $46.9 million, or 6.2%, compared to the business lending portfolio of $761.9 million at June 30, 2020. The increase in the business lending portfolio compared to March 31, 2021 is primarily due to the acquisition of Cheaha, which added approximately $22.3 million in loans. The remaining growth of $6.6 million is due to the growth in the owner-occupied commercial real estate portfolio, as the commercial and industrial loan portfolio decreased during the period driven by payoffs of PPP loans. The increase in the business lending portfolio at June 30, 2021 compared to June 30, 2020 is primarily due to the growth in the owner-occupied commercial real estate portfolio.Consumer loans totaled $22.6 million at June 30, 2021, an increase of $4.1 million, or 22.1%, compared to $18.5 million at March 31, 2021, and a decrease of $2.8 million, or 10.9%, compared to $25.3 million at June 30, 2020. The increase in consumer loans compared to March 31, 2021 is primarily attributable to the acquisition of Cheaha, which added approximately $6.1 million in consumer loans at June 30, 2021. The decrease in consumer loans compared to June 30, 2020 is mainly attributable to the scheduled paydowns of the indirect auto lending portfolio and is consistent with our business strategy.Our loan portfolio includes loans to businesses in certain industries that may be more significantly affected by the pandemic than others. These loans, including loans related to oil and gas, food services, hospitality, and entertainment, represent approximately 6.4% of our total portfolio, or 5.9% excluding PPP loans, at June 30, 2021, compared to 6.8% of our total portfolio, or 5.7% excluding PPP loans, at March 31, 2021 and 6.8% of our total portfolio, or 5.8% excluding PPP loans, at June 30, 2020 as shown in the table below.Industry Percentage of Loan Portfolio June 30, 2021 Percentage of Loan Portfolio June 30, 2021 (excluding PPP loans) Percentage of Loan Portfolio March 31, 2021 Percentage of Loan Portfolio March 31, 2021 (excluding PPP loans) Percentage of Loan Portfolio June 30, 2020 Percentage of Loan Portfolio June 30, 2020 (excluding PPP loans) Oil and gas 2.7% 2.5% 3.2% 2.4% 3.5% 2.7%Food services 2.9 2.6 2.8 2.5 2.4 2.2 Hospitality 0.4 0.4 0.4 0.4 0.4 0.4 Entertainment 0.4 0.4 0.4 0.4 0.5 0.5 Total 6.4% 5.9% 6.8% 5.7% 6.8% 5.8%Credit QualityNonperforming loans were $20.9 million, or 1.07% of total loans, at June 30, 2021, an increase of $6.0 million compared to $14.9 million, or 0.81% of total loans, at March 31, 2021, and an increase of $7.8 million compared to $13.1 million, or 0.72% of total loans, at June 30, 2020. The increase in nonperforming loans compared to March 31, 2021 is mainly attributable to two loan relationships totaling $5.7 million at June 30, 2021. Of the $5.7 million, $2.9 million is secured by real estate. Included in nonperforming loans are acquired loans with a balance of $6.2 million at June 30, 2021, or 30% of nonperforming loans.The allowance for loan losses was $20.4 million, or 97.8% and 1.05% of nonperforming and total loans, respectively, at June 30, 2021, compared to $20.4 million, or 137.3% and 1.11%, respectively, at March 31, 2021, and $16.7 million, or 127.6% and 0.92%, respectively, at June 30, 2020.The provision for loan losses was $0.1 million for the quarter ended June 30, 2021 compared to $0.4 million and $2.5 million for the quarters ended March 31, 2021 and June 30, 2020, respectively. Additional provision for loan losses was recorded in 2020 primarily as a result of the deterioration of market conditions which have been adversely affected by the COVID-19 pandemic. The Bank continues to assess the impact the pandemic may have on its loan portfolio to determine the need for additional reserves.DepositsTotal deposits at June 30, 2021 were $2.26 billion, an increase of $250.3 million, or 12.5%, compared to $2.01 billion at March 31, 2021, and an increase of $370.6 million, or 19.6%, compared to $1.89 billion at June 30, 2020. Investar acquired approximately $207.0 million in deposits from Cheaha at the time of acquisition on April 1, 2021.The COVID-19 pandemic has created a significant amount of excess liquidity in the market, and, as a result, we have experienced large increases in both noninterest and interest-bearing demand deposits, and in money market deposit accounts and savings accounts compared to June 30, 2020. The Bank utilized $100.1 million in brokered deposits in the second quarter of 2021 and $80.0 million in the first quarter of 2021, which are used to satisfy the required borrowings under its interest rate swap agreements, due to more favorable pricing. Our deposit mix has improved and reflects our consistent focus on relationship banking and growing our commercial relationships, as well as the effects of the pandemic on consumer and business spending.The following table sets forth the composition of deposits as of the dates indicated (dollars in thousands). Linked Quarter Change Year/Year Change Percentage of Total Deposits 6/30/2021 3/31/2021 6/30/2020 $ % $ % 6/30/2021 6/30/2020 Noninterest-bearing demand deposits $582,109 $515,487 $469,095 $66,622 12.9% $113,014 24.1% 25.8% 24.8%Interest-bearing demand deposits 630,829 564,128 437,821 66,701 11.8 193,008 44.1 27.9 23.2 Brokered deposits 100,117 80,015 - 20,102 25.1 100,117 - 4.4 - Money market deposit accounts 243,058 200,744 183,371 42,314 21.1 59,687 32.5 10.8 9.7 Savings accounts 174,385 154,131 129,157 20,254 13.1 45,228 35.0 7.7 6.8 Time deposits 529,668 495,375 670,144 34,293 6.9 (140,476) (21.0) 23.4 35.5 Total deposits $2,260,166 $2,009,880 $1,889,588 $250,286 12.5% $370,578 19.6% 100.0% 100.0%Noninterest-bearing and interest-bearing demand deposits experienced the largest increases compared to March 31, 2021 and June 30, 2020. These increases were primarily driven by government stimulus payments, reduced spending by consumer and business customers related to the COVID-19 pandemic, and increases in PPP borrowers' deposit accounts. We believe these factors may be temporary depending on the future economic effects of the COVID-19 pandemic.Management made a strategic decision to either reprice or run-off higher yielding time deposits and other interest-bearing deposit products during 2020 and the first and second quarters of 2021, which contributed to our decreasing cost of deposits compared to the quarters ended March 31, 2021 and June 30, 2020. The increase in time deposits at June 30, 2021 compared to March 31, 2021 is primarily due to the acquisition of Cheaha.Net Interest IncomeNet interest income for the second quarter of 2021 totaled $21.2 million, an increase of $1.5 million, or 7.8%, compared to the first quarter of 2021, and an increase of $2.8 million, or 15.4%, compared to the second quarter of 2020. Included in net interest income for the quarters ended June 30, 2021, March 31, 2021 and June 30, 2020 is $0.5 million, $0.1 million, and $0.4 million of interest income accretion from the acquisition of loans. Also included in net interest income for the quarters ended June 30, 2021 and March 31, 2021 are interest recoveries of $25,000 and $17,000, respectively, on acquired loans.Investar's net interest margin was 3.48% for the quarter ended June 30, 2021, compared to 3.64% for the quarter ended March 31, 2021 and 3.46% for the quarter ended June 30, 2020. The decrease in net interest margin for the quarter ended June 30, 2021 compared to the quarter ended March 31, 2021 was driven by excess liquidity. The average balance of interest-bearing balances with banks for the quarter ended June 30, 2021, as shown on our net interest margin table, increased $157.2 million compared to the quarter ended March 31, 2021, and resulted in a 23 basis point decrease in the net interest margin. This decrease in net interest margin was partially offset by a six basis point increase in the yield on the loan portfolio and a 13 basis point decrease in the cost of funds for the quarter ended June 30, 2021 compared to the quarter ended March 31, 2021. The increase in net interest margin for the quarter ended June 30, 2021 compared to the quarter ended June 30, 2020 was driven by a 66 basis point decrease in the cost of funds partially offset by a 49 basis point decrease in the yield on interest-earning assets.The yield on interest-earning assets was 4.00% for the quarter ended June 30, 2021, compared to 4.26% for the quarter ended March 31, 2021 and 4.49% for the quarter ended June 30, 2020. The decrease in the yield on interest-earning assets compared to the quarter ended June 30, 2020 was driven by lower loan yields and a large decrease in the yield earned on investment securities. In response to the pandemic, during March 2020, the Federal Reserve reduced the federal funds rate 150 basis points to 0 to 0.25 percent, which has affected the yields that we earn on our interest-earning assets. In addition, the PPP loans originated have a contractual interest rate of 1% and origination fees based on the loan amount, which impacts the yield on our loan portfolio.Exclusive of PPP loans, which had an average balance of $96.0 million and related interest and fee income of $1.2 million for the quarter ended June 30, 2021, compared to an average balance of $97.3 million and related interest and fee income of $1.4 million for the quarter ended March 31, 2021 and an average balance of $78.9 million and related interest and fee income of $0.8 million for the quarter ended June 30, 2020, adjusted net interest margin was 3.41% for the quarter ended June 30, 2021, compared to an adjusted net interest margin of 3.54% for the quarter ended March 31, 2021 and 3.44% for the quarter ended June 30, 2020. Included in PPP interest and fee income for the quarters ended June 30, 2021 and March 31, 2021 is $0.6 million and $0.7 million, respectively, of accelerated fee income recognized due to the forgiveness or pay-off of PPP loans. Refer to the Reconciliation of Non-GAAP Financial Measures table for a reconciliation of GAAP to non-GAAP metrics.Exclusive of the interest income accretion from the acquisition of loans, interest recoveries, and accelerated fee income recognized due to the forgiveness or pay-off of PPP loans, all discussed above, adjusted net interest margin decreased to 3.29% for the quarter ended June 30, 2021, compared to 3.49% for the quarter ended March 31, 2021, and 3.39% for the quarter ended June 30, 2020. The adjusted yield on interest-earning assets was 3.82% for the quarter ended June 30, 2021 compared to 4.10% and 4.43% for the quarters ended March 31, 2021 and June 30, 2020, respectively. Refer to the Reconciliation of Non-GAAP Financial Measures table for a reconciliation of GAAP to non-GAAP metrics.The cost of deposits decreased 12 basis points to 0.51% for the quarter ended June 30, 2021 compared to 0.63% for the quarter ended March 31, 2021 and decreased 69 basis points compared to 1.20% for the quarter ended June 30, 2020. The decrease in the cost of deposits compared to the quarters ended March 31, 2021 and June 30, 2020 reflects the decrease in rates paid for all categories of interest-bearing deposits.The overall costs of funds for the quarter ended June 30, 2021 decreased 13 basis points to 0.70% compared to 0.83% for the quarter ended March 31, 2021 and decreased 66 basis points compared to 1.36% for the quarter ended June 30, 2020. The decrease in the cost of funds for the quarter ended June 30, 2021 compared to the quarters ended March 31, 2021 and June 30, 2020 resulted from both lower cost of deposits and lower average balances of short-term borrowings, the costs of which are driven by the Federal Reserve's federal funds rates.Noninterest IncomeNoninterest income for the second quarter of 2021 totaled $4.1 million, an increase of $1.7 million, or 72.6%, compared to the first quarter of 2021 and an increase of $0.2 million, or 3.8%, compared to the second quarter of 2020. The increase in noninterest income compared to the quarter ended March 31, 2021 was mainly driven by a $1.1 million increase in the gain on sale of investment securities. The increase in noninterest income compared to the quarter ended June 30, 2020 is mainly attributable to a $0.5 million increase in the gain on sale of investment securities and $0.2 million increases in service charges on deposit accounts and interchange fees, partially offset by a $0.7 million decrease in other operating income, compared to the quarter ended June 30, 2020. The decrease in other operating income compared to the quarter ended June 30, 2020 was driven by a $0.6 million decrease in derivative fee income.Noninterest ExpenseNoninterest expense for the second quarter of 2021 totaled $18.0 million, an increase of $3.2 million, or 21.3%, compared to the first quarter of 2021, and an increase of $3.5 million, or 24.0%, compared to the second quarter of 2020. The increase in noninterest expense for the quarter ended June 30, 2021 compared to the quarter ended March 31, 2021 was driven by a $1.3 million increase in acquisition expense and a $1.2 million increase in salaries and benefits, both of which are primarily related to the acquisition of Cheaha. In addition, the Bank is self-insured for employee health insurance and experienced two unfavorable health claims resulting in an increase of $0.3 million in employee benefits compared to the quarter ended March 31, 2021.The increase in noninterest expense for the second quarter of 2021 compared to the second quarter of 2020 is primarily attributable to the $1.4 million and $1.3 million increases in acquisition expense and salaries and employee benefits, respectively. The increase in salaries and employee benefits is driven by an increase in employees following the acquisition of Cheaha, increase in health insurance claims, and deferred compensation costs.TaxesInvestar recorded income tax expense of $1.5 million for the quarter ended June 30, 2021, which equates to an effective tax rate of 20.7%, a decrease from the effective tax rate of 21.1% at March 31, 2021 and increase from the effective tax rate of 19.2% for the quarter ended June 30, 2020.Basic and Diluted Earnings Per Common ShareInvestar reported basic and diluted earnings per common share of $0.54 and $0.53, respectively, for the quarter ended June 30, 2021, an increase of $0.03 and $0.02, respectively, compared to basic and diluted earnings per common share of $0.51 for the quarter ended March 31, 2021, and an increase of $0.15 and $0.14, respectively, compared to basic and diluted earnings per common share of $0.39 for the quarter ended June 30, 2020.About Investar Holding CorporationInvestar, headquartered in Baton Rouge, Louisiana, provides full banking services, excluding trust services, through its wholly-owned banking subsidiary, Investar Bank, National Association. The Bank currently operates 34 branch locations serving Louisiana, Texas, and Alabama. At June 30, 2021, the Bank had 357 full-time equivalent employees and total assets of $2.7 billion.Non-GAAP Financial MeasuresThis press release contains financial information determined by methods other than in accordance with generally accepted accounting principles in the United States of America, or GAAP. These measures and ratios include "tangible common equity," "tangible assets," "tangible equity to tangible assets," "tangible book value per common share," "core noninterest income," "core earnings before noninterest expense," "core noninterest expense," "core earnings before income tax expense," "core income tax expense," "core earnings," "core efficiency ratio," "core return on average assets," "core return on average equity," "core basic earnings per share," and "core diluted earnings per share." We also present certain average loan, yield, net interest income and net interest margin data adjusted to show the effects of excluding PPP loans, interest income accretion from the acquisition of loans, and interest recoveries. Management believes these non-GAAP financial measures provide information useful to investors in understanding Investar's financial results, and Investar believes that its presentation, together with the accompanying reconciliations, provide a more complete understanding of factors and trends affecting Investar's business and allow investors to view performance in a manner similar to management, the entire financial services sector, bank stock analysts and bank regulators. These non-GAAP measures should not be considered a substitute for GAAP basis measures and results, and Investar strongly encourages investors to review its consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. A reconciliation of the non-GAAP financial measures disclosed in this press release to the comparable GAAP financial measures is included at the end of the financial statement tables.Forward-Looking and Cautionary StatementsThis press release 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 forward-looking statements by terminology such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "could," "should," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates," or the negative version of those words or other comparable words. In addition, any of the following matters related to the pandemic may impact our financial results in future periods, and such impacts may be material depending on the length and severity of the pandemic and government and societal responses to it: •borrowers may default on loans and economic conditions could deteriorate requiring further increases to the allowance for loan losses; •demand for our loans and other banking services, and related income and fees, may be reduced; •the value of collateral securing our loans may deteriorate; and •lower market interest rates will have an adverse impact on our variable rate loans and reduce our income.Any forward-looking statements contained in this press release are based on the historical performance of Investar and its subsidiaries or on Investar's current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by Investar that the future plans, estimates or expectations by Investar will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to Investar's operations, financial results, financial condition, business prospects, growth strategy and liquidity. If one or more of these or other risks or uncertainties materialize, or if Investar's underlying assumptions prove to be incorrect, Investar's actual results may vary materially from those indicated in these statements. Investar does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. A number of important factors could cause actual results to differ materially from those indicated by the forward-looking statements. These factors include, but are not limited to, the following, any one or more of which could materially affect the outcome of future events: •the ongoing impacts of the COVID-19 pandemic on economic conditions in general and on the Bank's markets in particular, and on the Bank's operations and financial results; •ongoing disruptions in the oil and gas industry due to fluctuations in the price of oil; •business and economic conditions generally and in the financial services industry in particular, whether nationally, regionally or in the markets in which we operate; •increased cyber and payment fraud risk, as cybercriminals attempt to profit from the disruption, given increased online and remote activity; •our ability to achieve organic loan and deposit growth, and the composition of that growth; •our ability to identify and enter into agreements to combine with attractive acquisition candidates, finance acquisitions, complete acquisitions after definitive agreements are entered into, and successfully integrate acquired operations; •changes (or the lack of changes) in interest rates, yield curves and interest rate spread relationships that affect our loan and deposit pricing; •possible cessation or market replacement of LIBOR and the related effect on our LIBOR-based financial products and contracts, including, but not limited to, hedging products, debt obligations, investments and loans; •the extent of continuing client demand for the high level of personalized service that is a key element of our banking approach as well as our ability to execute our strategy generally; •our dependence on our management team, and our ability to attract and retain qualified personnel; •changes in the quality or composition of our loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers; •inaccuracy of the assumptions and estimates we make in establishing reserves for probable loan losses and other estimates; •the concentration of our business within our geographic areas of operation in Louisiana, Texas and Alabama; and •concentration of credit exposure.These factors should not be construed as exhaustive. Additional information on these and other risk factors can be found in Item 1A. "Risk Factors" and in the "Special Note Regarding Forward-Looking Statements" in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Investar's Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (the "SEC").For further information contact:Investar Holding CorporationChris HufftChief Financial Officer(225) 227-2215Chris.Hufft@investarbank.comINVESTAR HOLDING CORPORATIONSUMMARY FINANCIAL INFORMATION(Amounts in thousands, except share data)(Unaudited) As of and for the three months ended 6/30/2021 3/31/2021 6/30/2020 Linked Quarter Year/Year EARNINGS DATA Total interest income $24,347 $22,969 $23,802 6.0% 2.3%Total interest expense 3,182 3,335 5,463 (4.6) (41.8)Net interest income 21,165 19,634 18,339 7.8 15.4 Provision for loan losses 114 400 2,500 (71.5) (95.4)Total noninterest income 4,082 2,365 3,931 72.6 3.8 Total noninterest expense 17,960 14,809 14,480 21.3 24.0 Income before income taxes 7,173 6,790 5,290 5.6 35.6 Income tax expense 1,485 1,430 1,016 3.8 46.2 Net income $5,688 $5,360 $4,274 6.1 33.1 AVERAGE BALANCE SHEET DATA Total assets $2,650,050 $2,354,504 $2,296,082 12.6% 15.4%Total interest-earning assets 2,441,368 2,185,853 2,130,236 11.7 14.6 Total loans 1,940,513 1,857,272 1,789,863 4.5 8.4 Total interest-bearing deposits 1,677,471 1,484,515 1,403,168 13.0 19.5 Total interest-bearing liabilities 1,817,746 1,623,286 1,615,422 12.0 12.5 Total deposits 2,236,902 1,951,046 1,827,512 14.7 22.4 Total stockholders' equity 251,793 247,236 236,651 1.8 6.4 PER SHARE DATA Earnings: Basic earnings per common share $0.54 $0.51 $0.39 5.9% 38.5%Diluted earnings per common share 0.53 0.51 0.39 3.9 35.9 Core Earnings(1): Core basic earnings per common share(1) 0.53 0.49 0.32 8.2 65.6 Core diluted earnings per common share(1) 0.53 0.49 0.32 8.2 65.6 Book value per common share 24.08 23.79 21.84 1.2 10.3 Tangible book value per common share(1) 19.85 20.72 18.82 (4.2) 5.5 Common shares outstanding 10,413,390 10,436,493 10,839,977 (0.2) (3.9)Weighted average common shares outstanding - basic 10,414,875 10,509,468 10,882,084 (0.9) (4.3)Weighted average common shares outstanding - diluted 10,541,907 10,567,173 10,882,084 (0.2) (3.1) PERFORMANCE RATIOS Return on average assets 0.86% 0.92% 0.75% (6.5)% 14.7%Core return on average assets(1) 0.84 0.89 0.62 (5.6) 35.5 Return on average equity 9.06 8.79 7.26 3.1 24.8 Core return on average equity(1) 8.85 8.50 6.00 4.1 47.5 Net interest margin 3.48 3.64 3.46 (4.4) 0.6 Net interest income to average assets 3.20 3.38 3.21 (5.3) (0.3)Noninterest expense to average assets 2.72 2.55 2.54 6.7 7.1 Efficiency ratio(2) 71.14 67.32 65.02 5.7 9.4 Core efficiency ratio(1) 69.62 67.35 67.03 3.4 3.9 Dividend payout ratio 14.81 13.73 15.38 7.9 (3.7)Net charge-offs to average loans - 0.02 - (100.0) - (1) Non-GAAP financial measure. See reconciliation.(2) Efficiency ratio represents noninterest expenses divided by the sum of net interest income (before provision for loan losses) and noninterest income.INVESTAR HOLDING CORPORATIONSUMMARY FINANCIAL INFORMATION(Amounts in thousands, except share data)(Unaudited) As of and for the three months ended 6/30/2021 3/31/2021 6/30/2020 Linked Quarter Year/Year ASSET QUALITY RATIOS Nonperforming assets to total assets 0.84% 0.68% 0.56% 23.5% 50.0%Nonperforming loans to total loans 1.07 0.81 0.72 32.1 48.6 Allowance for loan losses to total loans 1.05 1.11 0.92 (5.4) 14.1 Allowance for loan losses to nonperforming loans 97.83 137.33 127.62 (28.8) (23.3) CAPITAL RATIOS Investar Holding Corporation: Total equity to total assets 9.38% 10.31% 10.03% (9.1)% (6.5)%Tangible equity to tangible assets(1) 7.86 9.10 8.77 (13.6) (10.4)Tier 1 leverage ratio 8.19 9.37 9.31 (12.6) (12.0)Common equity tier 1 capital ratio(2) 9.96 11.08 11.02 (10.1) (9.6)Tier 1 capital ratio(2) 10.43 11.42 11.37 (8.7) (8.3)Total capital ratio(2) 13.55 14.77 14.61 (8.3) (7.3)Investar Bank: Tier 1 leverage ratio 9.49 10.56 10.09 (10.1) (5.9)Common equity tier 1 capital ratio(2) 12.10 12.86 12.33 (5.9) (1.9)Tier 1 capital ratio(2) 12.10 12.86 12.33 (5.9) (1.9)Total capital ratio(2) 13.11 13.95 13.25 (6.0) (1.1)(1) Non-GAAP financial measure. See reconciliation.(2) Estimated for June 30, 2021.INVESTAR HOLDING CORPORATIONCONSOLIDATED BALANCE SHEETS(Amounts in thousands, except share data)(Unaudited) June 30, 2021 March 31, 2021 June 30, 2020 ASSETS Cash and due from banks $36,775 $29,970 $31,725 Interest-bearing balances due from other banks 229,498 69,400 99,239 Federal funds sold 500 97 - Cash and cash equivalents 266,773 99,467 130,964 Available for sale securities at fair value (amortized cost of $267,706, $299,310, and $242,175, respectively) 269,360 301,433 246,886 Held to maturity securities at amortized cost (estimated fair value of $12,007, $12,341, and $14,265, respectively) 11,812 11,966 14,053 Loans, net of allowance for loan losses of $20,445, $20,423, and $16,657, respectively 1,927,375 1,825,547 1,797,314 Other equity securities 16,725 16,763 19,398 Bank premises and equipment, net of accumulated depreciation of $17,566, $16,803, and $14,022, respectively 62,588 56,631 56,767 Other real estate owned, net 1,490 1,518 69 Accrued interest receivable 12,205 12,868 13,701 Deferred tax asset 508 - 1,515 Goodwill and other intangible assets, net 43,973 32,001 32,715 Bank-owned life insurance 50,462 39,131 38,437 Other assets 9,636 10,631 7,544 Total assets $2,672,907 $2,407,956 $2,359,363 LIABILITIES Deposits Noninterest-bearing $582,109 $515,487 $469,095 Interest-bearing 1,678,057 1,494,393 1,420,493 Total deposits 2,260,166 2,009,880 1,889,588 Advances from Federal Home Loan Bank 82,500 82,500 158,500 Repurchase agreements 6,713 4,274 4,908 Subordinated debt 42,943 42,920 42,854 Junior subordinated debt 8,320 5,962 5,923 Accrued taxes and other liabilities 21,550 14,169 20,884 Total liabilities 2,422,192 2,159,705 2,122,657 STOCKHOLDERS' EQUITY Preferred stock, no par value per share; 5,000,000 shares authorized - - - Common stock, $1.00 par value per share; 40,000,000 shares authorized; 10,413,390, 10,436,493, and 10,839,977 shares issued and outstanding, respectively 10,413 10,436 10,840 Surplus 155,847 155,822 161,729 Retained earnings 80,867 75,998 63,767 Accumulated other comprehensive income 3,588 5,995 370 Total stockholders' equity 250,715 248,251 236,706 Total liabilities and stockholders' equity $2,672,907 $2,407,956 $2,359,363 INVESTAR HOLDING CORPORATIONCONSOLIDATED STATEMENTS OF INCOME(Amounts in thousands, except share data)(Unaudited) For the three months ended June 30, 2021 March 31, 2021 June 30, 2020 INTEREST INCOME Interest and fees on loans $23,135 $21,627 $22,118 Interest on investment securities 1,009 1,179 1,455 Other interest income 203 163 229 Total interest income 24,347 22,969 23,802 INTEREST EXPENSE Interest on deposits 2,114 2,302 4,190 Interest on borrowings 1,068 1,033 1,273 Total interest expense 3,182 3,335 5,463 Net interest income 21,165 19,634 18,339 Provision for loan losses 114 400 2,500 Net interest income after provision for loan losses 21,051 19,234 15,839 NONINTEREST INCOME Service charges on deposit accounts 607 491 405 Gain on sale of investment securities, net 1,721 600 1,178 Loss on sale of fixed assets, net - (2) - Loss on sale of other real estate owned, net (5) - - Gain on sale of loans 46 - - Servicing fees and fee income on serviced loans 65 64 96 Interchange fees 501 388 347 Income from bank owned life insurance 311 223 233 Change in the fair value of equity securities 91 65 248 Other operating income 745 536 1,424 Total noninterest income 4,082 2,365 3,931 Income before noninterest expense 25,133 21,599 19,770 NONINTEREST EXPENSE Depreciation and amortization 1,278 1,206 1,149 Salaries and employee benefits 9,916 8,695 8,572 Occupancy 676 637 536 Data processing 973 746 786 Marketing 71 41 78 Professional fees 378 358 429 Acquisition expenses 1,641 361 255 Other operating expenses 3,027 2,765 2,675 Total noninterest expense 17,960 14,809 14,480 Income before income tax expense 7,173 6,790 5,290 Income tax expense 1,485 1,430 1,016 Net income $5,688 $5,360 $4,274 EARNINGS PER SHARE Basic earnings per common share $0.54 $0.51 $0.39 Diluted earnings per common share $0.53 $0.51 $0.39 Cash dividends declared per common share $0.08 $0.07 $0.06 INVESTAR HOLDING CORPORATIONCONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS(Amounts in thousands)(Unaudited) For the three months ended June 30, 2021 March 31, 2021 June 30, 2020 Interest Interest Interest Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate Balance Expense Rate Assets Interest-earning assets: Loans $1,940,513 $23,135 4.78% $1,857,272 $21,627 4.72% $1,789,863 $22,118 4.97%Securities: Taxable 283,318 860 1.22 270,040 1,039 1.56 244,703 1,253 2.06 Tax-exempt 22,061 149 2.71 20,228 140 2.81 29,150 202 2.79 Interest-bearing balances with banks 195,476 203 0.42 38,313 163 1.72 66,520 229 1.38 Total interest-earning assets 2,441,368 24,347 4.00 2,185,853 22,969 4.26 2,130,236 23,802 4.49 Cash and due from banks 40,639 30,335 25,900 Intangible assets 44,727 32,112 32,561 Other assets 143,774 126,750 121,706 Allowance for loan losses (20,458) (20,546) (14,321) Total assets $2,650,050 $2,354,504 $2,296,082 Liabilities and stockholders' equity Interest-bearing liabilities: Deposits: Interest-bearing demand deposits $854,504 $701 0.33% $736,502 $685 0.38% $597,022 $827 0.56%Brokered deposits 97,245 240 0.99 83,832 209 1.01 - - - Savings deposits 173,553 71 0.16 146,078 66 0.19 125,680 94 0.30 Time deposits 552,169 1,102 0.80 518,103 1,342 1.05 680,466 3,269 1.93 Total interest-bearing deposits 1,677,471 2,114 0.51 1,484,515 2,302 0.63 1,403,168 4,190 1.20 Short-term borrowings 10,030 5 0.21 11,407 6 0.18 84,447 233 1.11 Long-term debt 130,245 1,063 3.27 127,364 1,027 3.27 127,807 1,040 3.27 Total interest-bearing liabilities 1,817,746 3,182 0.70 1,623,286 3,335 0.83 1,615,422 5,463 1.36 Noninterest-bearing deposits 559,431 466,531 424,344 Other liabilities 21,080 17,451 19,665 Stockholders' equity 251,793 247,236 236,651 Total liability and stockholders' equity $2,650,050 $2,354,504 $2,296,082 Net interest income/net interest margin $21,165 3.48% $19,634 3.64% $18,339 3.46%INVESTAR HOLDING CORPORATIONRECONCILIATION OF NON-GAAP FINANCIAL MEASURESINTEREST EARNED AND YIELD ANALYSIS ADJUSTED FOR PPP LOANS(Amounts in thousands)(Unaudited) For the three months ended June 30, 2021 March 31, 2021 June 30, 2020 Interest Interest Interest Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate Balance Expense Rate Interest-earning assets: Loans $1,940,513 $23,135 4.78% $1,857,272 $21,627 4.72% $1,789,863 $22,118 4.97%Adjustments: PPP loans 96,045 1,237 5.17% 97,288 1,405 5.86% 78,903 788 4.02%Adjusted loans 1,844,468 21,898 4.76% 1,759,984 20,222 4.66% 1,710,960 21,330 5.01%Securities: Taxable 283,318 860 1.22 270,040 1,039 1.56 244,703 1,253 2.06 Tax-exempt 22,061 149 2.71 20,228 140 2.81 29,150 202 2.79 Interest-bearing balances with banks 195,476 203 0.42 38,313 163 1.72 66,520 229 1.38 Adjusted interest-earning assets 2,345,323 23,110 3.95 2,088,565 21,564 4.19 2,051,333 23,014 4.51 Total interest-bearing liabilities 1,817,746 3,182 0.70 1,623,286 3,335 0.83 1,615,422 5,463 1.36 Adjusted net interest income/adjusted net interest margin $19,928 3.41% $18,229 3.54% $17,551 3.44%INVESTAR HOLDING CORPORATIONRECONCILIATION OF NON-GAAP FINANCIAL MEASURESINTEREST EARNED AND YIELD ANALYSIS ADJUSTED FOR INTEREST ACCRETION, RECOVERIES AND ACCELERATED PPP INCOME(Amounts in thousands)(Unaudited) For the three months ended June 30, 2021 March 31, 2021 June 30, 2020 Interest Interest Interest Average Income/ Average Income/ Average Income/ Balance Expense Yield/ Rate Balance Expense Yield/ Rate Balance Expense Yield/ Rate Interest-earning assets: Loans $1,940,513 $23,135 4.78% $1,857,272 $21,627 4.72% $1,789,863 $22,118 4.97%Adjustments: Accelerated fee income for forgiven or paid off PPP loans 556 692 - Interest recoveries 25 17 - Accretion 532 135 365 Adjusted Loans 1,940,513 22,022 4.55 1,857,272 20,783 4.54 1,789,863 21,753 4.89 Securities: Taxable 283,318 860 1.22 270,040 1,039 1.56 244,703 1,253 2.06 Tax-exempt 22,061 149 2.71 20,228 140 2.81 29,150 202 2.79 Interest-bearing balances with banks 195,476 203 0.42 38,313 163 1.72 66,520 229 1.38 Adjusted interest-earning assets 2,441,368 23,234 3.82 2,185,853 22,125 4.10 2,130,236 23,437 4.43 Total interest-bearing liabilities 1,817,746 3,182 0.70 1,623,286 3,335 0.83 1,615,422 5,463 1.36 Adjusted net interest income/adjusted net interest margin $20,052 3.29% $18,790 3.49% $17,974 3.39% INVESTAR HOLDING CORPORATIONRECONCILIATION OF NON-GAAP FINANCIAL MEASURES(Amounts in thousands, except share data)(Unaudited) June 30, 2021 March 31, 2021 June 30, 2020 Tangible common equity Total stockholders' equity $250,715 $248,251 $236,706 Adjustments: Goodwill 39,527 28,144 28,144 Core deposit intangible 4,346 3,757 4,471 Trademark intangible 100 100 100 Tangible common equity $206,742 $216,250 $203,991 Tangible assets Total assets $2,672,907 $2,407,956 $2,359,363 Adjustments: Goodwill 39,527 28,144 28,144 Core deposit intangible 4,346 3,757 4,471 Trademark intangible 100 100 100 Tangible assets $2,628,934 $2,375,955 $2,326,648 Common shares outstanding 10,413,390 10,436,493 10,839,977 Tangible equity to tangible assets 7.86% 9.10% 8.77%Book value per common share $24.08 $23.79 $21.84 Tangible book value per common share 19.85 20.72 18.82 INVESTAR HOLDING CORPORATIONRECONCILIATION OF NON-GAAP FINANCIAL MEASURES(Amounts in thousands, except share data)(Unaudited) Three months ended 6/30/2021 3/31/2021 6/30/2020 Net interest income(a) $21,165 $19,634 $18,339 Provision for loan losses 114 400 2,500 Net interest income after provision for loan losses 21,051 19,234 15,839 Noninterest income(b) 4,082 2,365 3,931 Gain on sale of investment securities, net (1,721) (600) (1,178)Loss on sale of other real estate owned, net 5 - - Loss on sale of fixed assets, net - 2 - Change in the fair value of equity securities (91) (65) (248)Core noninterest income(d) 2,275 1,702 2,505 Core earnings before noninterest expense 23,326 20,936 18,344 Total noninterest expense(c) 17,960 14,809 14,480 Acquisition expense (1,641) (361) (255)Severance - (78) (253)Core noninterest expense(f) 16,319 14,370 13,972 Core earnings before income tax expense 7,007 6,566 4,372 Core income tax expense(1) 1,450 1,385 840 Core earnings $5,557 $5,181 $3,532 Core basic earnings per common share 0.53 0.49 0.32 Diluted earnings per common share (GAAP) $0.53 $0.51 $0.39 Gain on sale of investment securities, net (0.12) (0.05) (0.09)Loss on sale of other real estate owned, net - - - Loss on sale of fixed assets, net - - - Change in the fair value of equity securities (0.01) (0.01) (0.02)Acquisition expense 0.13 0.03 0.02 Severance - 0.01 0.02 Core diluted earnings per common share $0.53 $0.49 $0.32 Efficiency ratio(c) / (a+b) 71.14% 67.32% 65.02%Core efficiency ratio(f) / (a+d) 69.62% 67.35% 67.03%Core return on average assets(2) 0.84% 0.89% 0.62%Core return on average equity(2) 8.85% 8.50% 6.00%Total average assets $2,650,050 $2,354,504 $2,296,082 Total average stockholders' equity 251,793 247,236 236,651 (1) Core income tax expense is calculated using the effective tax rates of 20.7%, 21.1% and 19.2% for the quarters ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively.(2) Core earnings used in calculation. No adjustments were made to average assets or average equity.SOURCE: Investar Holding CorporationView source version on accesswire.com: https://www.accesswire.com/656678/Investar-Holding-Corporation-Announces-2021-Second-Quarter-Results