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| 8-K - 8-K - Investar Holding Corp | form8-kxq22018earningsrele.htm |
Exhibit 99.1
For Immediate Release
Investar Holding Corporation Announces 2018 Second Quarter Results
BATON ROUGE, LA (July 25, 2018) – Investar Holding Corporation (NASDAQ: ISTR) (the “Company”), the holding company for Investar Bank (the “Bank”), today announced financial results for the quarter ended June 30, 2018. The Company reported record net income of $3.8 million, or $0.39 per diluted common share, for the second quarter of 2018, compared to $2.4 million, or $0.25 per diluted common share, for the quarter ended March 31, 2018, and $1.9 million, or $0.22 per diluted common share, for the quarter ended June 30, 2017.
On a non-GAAP basis, core earnings per diluted common share for the second and first quarters of 2018 were $0.40, compared to $0.22 for the quarter ended June 30, 2017, respectively. Core earnings exclude certain non-operating items including, but not limited to, acquisition expense, tax reform related re-measurement charges, and non-routine legal charges related to acquired loans (refer to the Reconciliation of Non-GAAP Financial Measures table for a reconciliation of GAAP to non-GAAP metrics).
Investar Holding Corporation President and Chief Executive Officer John D’Angelo said:
“This was a solid quarter of positive performance for Investar. Net income has grown 98% to a record $3.8 million compared to the same quarter last year. Our net interest margin remains stable at 3.70% for the first two quarters of 2018 and our deposit mix continues to improve as we continue to grow noninterest-bearing deposits. Total loan growth was 8.4% on an annualized basis, and most of the growth came in our commercial and industrial and commercial real estate portfolios. We also experienced positive asset quality trends across the portfolio with decreases in nonperforming loans and net charge-offs and improvements in both return on assets and efficiency ratios. With both 2017 acquisitions fully integrated in the first quarter of 2018, we are continuing to focus on achieving synergies through efficient operations.
In the second quarter, we continued to expand our Investar family with the addition of five experienced lenders focused on growing our commercial business relationships. We look forward to the knowledge and experience brought to Investar by these team members.”
Second Quarter Highlights
• | Total revenues, or interest and noninterest income, for the quarter ended June 30, 2018 totaled $19.2 million, an increase of $1.0 million, or 5.2%, compared to the quarter ended March 31, 2018, and an increase of $6.6 million, or 51.9%, compared to the quarter ended June 30, 2017. |
• | Total loans increased $27.4 million, or 2.1% (8.4% annualized), to $1.30 billion at June 30, 2018, compared to $1.27 billion at March 31, 2018. |
• | The business lending portfolio, which consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans, was $432.9 million at June 30, 2018, an increase of $22.7 million, or 5.5%, compared to the business lending portfolio of $410.2 million at March 31, 2018, and an increase of $148.8 million, or 52.4%, compared to the business lending portfolio of $284.1 million at June 30, 2017. |
• | Nonperforming loans to total loans decreased to 0.33%, compared to 0.44% at March 31, 2018. |
• | Deposit mix has improved with noninterest-bearing deposits now representing 18.1% of total deposits compared to 14.6% at June 30, 2017. |
• | Net interest margin remained stable at 3.70% for both quarters ended June 30, 2018 and March 31, 2018, compared to 3.28% for the quarter ended June 30, 2017. |
• | Return on assets improved to 0.93% for the quarter ended June 30, 2018 compared to 0.60% for the quarter ended March 31, 2018 and 0.64% for the quarter ended June 30, 2017. |
• | Efficiency ratio improved to 65.49% for the quarter ended June 30, 2018, compared to 70.74% for the quarter ended March 31, 2018 and 68.57% for the quarter ended June 30, 2017. |
Loans
Total loans were $1.3 billion at June 30, 2018, an increase of $27.4 million, or 2.1%, compared to March 31, 2018, and an increase of $367.4 million, or 39.4%, compared to June 30, 2017. Compared to the first quarter of 2018, we experienced the majority of our second quarter loan growth in the commercial real estate and commercial and industrial portfolios as we remain focused on relationship banking and growing our commercial loan portfolio. Loan balances after June 30, 2017 reflect our acquisitions of Citizens Bancshares, Inc. (“Citizens”) and BOJ Bancshares, Inc. (“BOJ”) which occurred later in 2017.
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 | ||||||||||||||||||||||||||||||
6/30/2018 | 3/31/2018 | 6/30/2017 | $ | % | $ | % | 6/30/2018 | 6/30/2017 | ||||||||||||||||||||||||
Mortgage loans on real estate | ||||||||||||||||||||||||||||||||
Construction and development | $ | 165,395 | $ | 162,337 | $ | 109,627 | $ | 3,058 | 1.9 | % | $ | 55,768 | 50.9 | % | 12.7 | % | 11.8 | % | ||||||||||||||
1-4 Family | 280,335 | 277,978 | 177,979 | 2,357 | 0.8 | 102,356 | 57.5 | 21.6 | 19.1 | |||||||||||||||||||||||
Multifamily | 48,838 | 54,504 | 46,109 | (5,666 | ) | (10.4 | ) | 2,729 | 5.9 | 3.8 | 4.9 | |||||||||||||||||||||
Farmland | 20,144 | 20,725 | 8,006 | (581 | ) | (2.8 | ) | 12,138 | 151.6 | 1.5 | 0.9 | |||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||||||||||
Owner-occupied | 287,320 | 274,216 | 185,226 | 13,104 | 4.8 | 102,094 | 55.1 | 22.1 | 19.8 | |||||||||||||||||||||||
Nonowner-occupied | 292,946 | 279,939 | 223,297 | 13,007 | 4.6 | 69,649 | 31.2 | 22.5 | 23.9 | |||||||||||||||||||||||
Commercial and industrial | 145,554 | 135,965 | 98,837 | 9,589 | 7.1 | 46,717 | 47.3 | 11.2 | 10.6 | |||||||||||||||||||||||
Consumer | 59,779 | 67,286 | 83,879 | (7,507 | ) | (11.2 | ) | (24,100 | ) | (28.7 | ) | 4.6 | 9.0 | |||||||||||||||||||
Total loans | $ | 1,300,311 | $ | 1,272,950 | $ | 932,960 | $ | 27,361 | 2.1 | % | $ | 367,351 | 39.4 | % | 100 | % | 100 | % | ||||||||||||||
At June 30, 2018, the Company’s total business lending portfolio, which consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans, was $432.9 million, an increase of $22.7 million, or 5.5%, compared to the business lending portfolio of $410.2 million at March 31, 2018, and an increase of $148.8 million, or 52.4%, compared to the business lending portfolio of $284.1 million at June 30, 2017.
Construction and development loans were $165.4 million at June 30, 2018, an increase of $3.1 million, or 1.9%, compared to $162.3 million at March 31, 2018, and an increase of $55.8 million, or 50.9%, compared to $109.6 million at June 30, 2017. The increase in the construction and development portfolio at June 30, 2018 is primarily a result of organic growth in the Company’s Baton Rouge market where our lenders have great experience and long-standing relationships with local developers. At June 30, 2018, the construction and development portfolio included $22.9 million of loans acquired from Citizens and BOJ in 2017.
Consumer loans, including indirect auto loans of $42.1 million, totaled $59.8 million at June 30, 2018, a decrease of $7.5 million, or 11.2%, compared to $67.3 million, including indirect auto loans of $48.8 million, at March 31, 2018, and a decrease of $24.1 million, or 28.7%, compared to $83.9 million, including indirect auto loans of $70.8 million, at June 30, 2017. The decrease in consumer loans is mainly attributable to the scheduled paydowns of this portfolio and is consistent with our business strategy.
Credit Quality
Nonperforming loans were $4.2 million, or 0.33% of total loans, at June 30, 2018, a decrease of $1.3 million compared to $5.5 million, or 0.44% of total loans, at March 31, 2018, and an increase of $3.0 million compared to $1.2 million, or 0.13% of total loans, at June 30, 2017. Included in nonperforming loans are loans acquired in 2017 with a balance of $2.6 million at June 30, 2018, which is the primary reason for the increase in nonperforming loans compared to June 30, 2017.
The allowance for loan losses was $8.5 million, or 199.04% and 0.65% of nonperforming and total loans, respectively, at June 30, 2018, compared to $8.1 million, or 146.78% and 0.64%, respectively, at March 31, 2018, and $7.3 million, or 627.63% and 0.78%, respectively, at June 30, 2017. As a result of the acquisitions of Citizens and BOJ in 2017, the Company is holding acquired loans that are carried net of a fair value adjustment for credit and interest rate marks and are only included in the allowance calculation to the extent that the reserve requirement exceeds the remaining fair value adjustment.
The provision for loan losses was $0.6 million for the quarters ended June 30, 2018 and March 31, 2018 and $0.4 million for the quarter ended June 30, 2017.
Deposits
Total deposits at June 30, 2018 were $1.2 billion, an increase of $4.3 million, or 0.3%, compared to March 31, 2018, and an increase of $336.1 million, or 37.6%, compared to June 30, 2017.
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 | ||||||||||||||||||||||||||||||
6/30/2018 | 3/31/2018 | 6/30/2017 | $ | % | $ | % | 6/30/2018 | 6/30/2017 | ||||||||||||||||||||||||
Noninterest-bearing demand deposits | $ | 222,570 | $ | 221,855 | $ | 130,625 | $ | 715 | 0.3 | % | $ | 91,945 | 70.4 | % | 18.1 | % | 14.6 | % | ||||||||||||||
NOW accounts | 231,987 | 228,269 | 171,244 | 3,718 | 1.6 | 60,743 | 35.5 | 18.8 | 19.1 | |||||||||||||||||||||||
Money market deposit accounts | 151,510 | 145,627 | 143,957 | 5,883 | 4.0 | 7,553 | 5.2 | 12.3 | 16.1 | |||||||||||||||||||||||
Savings accounts | 117,649 | 124,589 | 50,945 | (6,940 | ) | (5.6 | ) | 66,704 | 130.9 | 9.6 | 5.7 | |||||||||||||||||||||
Time deposits | 507,214 | 506,332 | 398,054 | 882 | 0.2 | 109,160 | 27.4 | 41.2 | 44.5 | |||||||||||||||||||||||
Total deposits | $ | 1,230,930 | $ | 1,226,672 | $ | 894,825 | $ | 4,258 | 0.3 | % | $ | 336,105 | 37.6 | % | 100.0 | % | 100.0 | % | ||||||||||||||
As we continue to focus on relationship banking and growing our commercial relationships, we continue to improve our deposit mix with growth in noninterest-bearing demand deposits and a decrease in time deposits as a percentage of total deposits.
Net Interest Income
Net interest income for the second quarter of 2018 totaled $14.3 million, an increase of $0.5 million, or 3.3%, compared to the first quarter of 2018, and an increase of $5.0 million, or 54.0%, compared to the second quarter of 2017. Included in net interest income for the quarters ended June 30, 2018 and March 31, 2018 is $0.5 million and $0.7 million, respectively, of interest income accretion from the acquisition of loans. Also included in net interest income for the quarters ended June 30, 2018 and June 30, 2017 is an interest recovery of $0.2 million and $0.1 million, respectively, on acquired loans.
The increase in net interest income was primarily driven by growth in loan and securities balances partially offset by an increase in interest expense as we funded the increase in interest-earning assets with increased borrowings. Net interest income for the second quarter of 2018 increased $4.4 million and $1.8 million due to increases in the volume and yield, respectively, of interest-earning assets. These increases were slightly offset by a decrease of $1.2 million due to an increase in the volume of interest-bearing liabilities compared to the second quarter of 2017. While we did experience loan growth in the second quarter of 2018, several loans were recorded in the latter part of the quarter, and therefore, we did not recognize a full quarter of interest on these loans, but recorded a related allowance for loan losses through the provision for loan losses.
The Company’s net interest margin was 3.70% for the quarters ended June 30, 2018 and March 31, 2018 compared to 3.28% for the quarter ended June 30, 2017. The yield on interest-earning assets was 4.65% for the quarter ended June 30, 2018 compared to 4.59% for the quarter ended March 31, 2018 and 4.18% for the quarter ended June 30, 2017. The increase in net interest margin at June 30, 2018 compared to June 30, 2017 was driven by an increase in interest-earning assets and the yields earned on those assets as well as interest accretion on acquired loans, partially offset by an increase in the cost of funds required to fund the increase in assets.
Exclusive of the interest income accretion from the acquisition of loans, discussed above, as well as the $0.2 million and $0.1 million interest recoveries in the quarters ended June 30, 2018 and June 30, 2017, respectively, net interest margin would have been 3.51% for the quarter ended June 30, 2018 compared to 3.52% for the quarter ended March 31, 2018 and 3.23% for the quarter ended June 30, 2017, while the yield on interest-earning assets would have been 4.46% at June 30, 2018 compared to 4.41% and 4.13% for the quarters ended March 31, 2018 and June 30, 2017, respectively.
The cost of deposits increased six basis points to 0.97% for the quarter ended June 30, 2018 compared to 0.91% for the quarter ended March 31, 2018 and decreased one basis point compared to 0.98% at June 30, 2017. The increase in the cost of deposits compared to the quarter ended March 31, 2018 reflects the increased rates offered for our interest-bearing demand deposits and time deposits to remain competitive in our market in a rising interest rate environment. The overall costs of funds for the quarter ended June 30, 2018 increased nine basis points to 1.19% compared to 1.10% for both the quarters ended March 31, 2018 and June 30, 2017. The increase in the cost of funds at June 30, 2018 compared to March 31, 2018 and June 30, 2017 is mainly a result of an increase in the cost of borrowed funds used to finance loan and investment activity.
Noninterest Income
Noninterest income for the second quarter of 2018 totaled $1.2 million, an increase of $0.1 million, or 11.3%, compared to the first quarter of 2018, and an increase of $0.4 million, or 48.9%, compared to the second quarter of 2017. The increase in noninterest income compared to the quarter ended March 31, 2018 is mainly attributable to increases in other operating income. Other operating income includes, among other things, interchange fees, various operations fees, and income recognized on certain equity method investments. The increase in noninterest income compared to the quarter ended June 30, 2017 is mainly attributable to increases in other operating income and service charges on deposit accounts.
Noninterest Expense
Noninterest expense for the second quarter of 2018 totaled $10.2 million, a decrease of $0.4 million, or 3.8%, compared to the first quarter of 2018, and an increase of $3.2 million, or 46.7%, compared to the second quarter of 2017. The decrease in noninterest expense compared to the first quarter is mainly attributable to the $1.1 million decrease in acquisition expenses that was partially offset by $0.4 million and $0.3 million increases in salaries and employee benefits and other operating expenses, respectively.
The increase in salaries and employee benefits compared to the first quarter can be attributed to the hiring of five additional lenders and their related support staff. In addition, we realized unfavorable health care claims experience resulting in approximately $140,000 in excess health care costs in the quarter that we do not anticipate in future quarters.
The increase in other operating expenses compared to the first quarter includes approximately $89,000 in non-routine legal expenses associated with acquired loans.
The increase in noninterest expense compared to the quarter ended June 30, 2017 is mainly attributable to the increases in both salaries and employee benefits and other operating expenses. The increase in salaries and employee benefits is mainly a result of the increase in employees following the Citizens and BOJ acquisitions which occurred on July 1, 2017 and December 1, 2017, respectively, as well as the addition of lenders and support staff throughout our market in 2018. Full-time equivalent employees increased by 112, or 71%, at June 30, 2018 compared to June 30, 2017.
Staffing Optimization Plan
Subsequent to the end of the second quarter, as part of a staffing optimization plan focused on the operations of our recent acquisitions, we reduced staffing resulting in annual savings of approximately $0.7 million. We expect to recognize severance costs of approximately $0.2 million in the third quarter of 2018. We continue to focus on cost containment and deploying resources in the most efficient manner.
Taxes
The Company recorded income tax expense of $1.0 million for the quarter ended June 30, 2018, which equates to an effective tax rate of 20.2%, a decrease from the effective tax rate of 35.8% and 31.3% for the quarters ended March 31, 2018 and June 30, 2017, respectively. The income tax expense for the quarter ended March 31, 2018 includes charges of $0.6 million as a result of the revaluation of the Company’s deferred tax assets and liabilities required following the enactment of the Tax Cuts and Jobs Act. Management expects the Company’s effective tax rate to approximate 20% for the remainder of 2018, mainly as a result of the Tax Cuts and Jobs Act.
Basic Earnings Per Share and Diluted Earnings Per Common Share
The Company reported both basic and diluted earnings per common share of $0.39 for the quarter ended June 30, 2018, an increase of $0.14 and $0.17 compared to basic and diluted earnings per common share of $0.25 and $0.22 for the quarters ended March 31, 2018 and June 30, 2017, respectively.
About Investar Holding Corporation
Investar Holding Corporation, headquartered in Baton Rouge, Louisiana, provides full banking services, excluding trust services, through its wholly-owned banking subsidiary, Investar Bank, a state chartered bank. The Company’s primary market is South Louisiana and it currently operates 20 full service banking offices located throughout its market. At June 30, 2018, the Company had 269 full-time equivalent employees.
Non-GAAP Financial Measures
This 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.” Management believes these non-GAAP financial measures provide information useful to investors in understanding the Company’s financial results, and the Company believes that its presentation, together with the accompanying reconciliations, provide a more complete understanding of factors and trends affecting the Company’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 the Company 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 Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the Company’s current views with respect to, among other things, future events and financial performance. The Company 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. Any forward-looking statements contained in this press release are based on the historical performance of the Company and its subsidiaries or on the Company’s current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by the Company that the future plans, estimates or expectations by the Company will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to the Company’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 the Company’s underlying assumptions prove to be incorrect, the Company’s actual results may vary materially from those indicated in these statements. The Company 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:
• | business and economic conditions generally and in the financial services industry in particular, whether nationally, regionally or in the markets in which we operate; |
• | our ability to achieve organic loan and deposit growth, and the composition of that growth; |
• | changes (or the lack of changes) in interest rates, yield curves and interest rate spread relationships that affect our loan and deposit pricing; |
• | 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; and |
• | concentration of credit exposure. |
In addition, forward-looking statements and estimates regarding the effects of the Tax Cuts and Jobs Act are based on our current interpretation of this legislation and may change as a result of additional implementation guidance, changes in assumptions, potential future refinements of or revisions to calculations and completion of the Company’s 2017 consolidated tax return.
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 the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission.
For further information contact:
Investar Holding Corporation
Chris Hufft
Chief Financial Officer
(225) 227-2215
Chris.Hufft@investarbank.com
INVESTAR HOLDING CORPORATION | ||||||||||||||||||
SUMMARY FINANCIAL INFORMATION | ||||||||||||||||||
(Amounts in thousands, except share data) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
As of and for the three months ended | ||||||||||||||||||
6/30/2018 | 3/31/2018 | 6/30/2017 | Linked Quarter | Year/Year | ||||||||||||||
EARNINGS DATA | ||||||||||||||||||
Total interest income | $ | 18,009 | $ | 17,178 | $ | 11,844 | 4.8 | % | 52.1 | % | ||||||||
Total interest expense | 3,689 | 3,320 | 2,542 | 11.1 | 45.1 | |||||||||||||
Net interest income | 14,320 | 13,858 | 9,302 | 3.3 | 53.9 | |||||||||||||
Provision for loan losses | 567 | 625 | 375 | (9.3 | ) | 51.2 | ||||||||||||
Total noninterest income | 1,193 | 1,072 | 801 | 11.3 | 48.9 | |||||||||||||
Total noninterest expense | 10,160 | 10,562 | 6,928 | (3.8 | ) | 46.7 | ||||||||||||
Income before income taxes | 4,786 | 3,743 | 2,800 | 27.9 | 70.9 | |||||||||||||
Income tax expense | 966 | 1,341 | 877 | (28.0 | ) | 10.1 | ||||||||||||
Net income | $ | 3,820 | $ | 2,402 | $ | 1,923 | 59.0 | 98.6 | ||||||||||
AVERAGE BALANCE SHEET DATA | ||||||||||||||||||
Total assets | $ | 1,655,709 | $ | 1,629,277 | $ | 1,198,878 | 1.6 | % | 38.1 | % | ||||||||
Total interest-earning assets | 1,553,813 | 1,518,425 | 1,137,752 | 2.3 | 36.6 | |||||||||||||
Total loans | 1,269,894 | 1,261,047 | 914,265 | 0.7 | 38.9 | |||||||||||||
Total interest-bearing deposits | 1,001,037 | 1,002,655 | 745,647 | (0.2 | ) | 34.3 | ||||||||||||
Total interest-bearing liabilities | 1,247,695 | 1,228,942 | 922,780 | 1.5 | 35.2 | |||||||||||||
Total deposits | 1,223,441 | 1,219,482 | 862,361 | 0.3 | 41.9 | |||||||||||||
Total stockholders’ equity | 175,801 | 173,467 | 149,713 | 1.3 | 17.4 | |||||||||||||
PER SHARE DATA | ||||||||||||||||||
Earnings: | ||||||||||||||||||
Basic earnings per share | $ | 0.39 | $ | 0.25 | $ | 0.22 | 56.0 | % | 77.3 | % | ||||||||
Diluted earnings per share | 0.39 | 0.25 | 0.22 | 56.0 | 77.3 | |||||||||||||
Core Earnings(1): | ||||||||||||||||||
Core basic earnings per share(1) | 0.40 | 0.40 | 0.22 | — | 81.8 | |||||||||||||
Core diluted earnings per share(1) | 0.40 | 0.40 | 0.22 | — | 81.8 | |||||||||||||
Book value per share | 18.50 | 18.22 | 17.11 | 1.5 | 8.1 | |||||||||||||
Tangible book value per share(1) | 16.42 | 16.11 | 16.74 | 1.9 | (1.9 | ) | ||||||||||||
Common shares outstanding | 9,581,034 | 9,517,328 | 8,815,119 | 0.7 | 8.7 | |||||||||||||
Weighted average common shares outstanding - basic | 9,588,873 | 9,513,332 | 8,685,980 | 0.8 | 10.4 | |||||||||||||
Weighted average common shares outstanding - diluted | 9,648,021 | 9,609,603 | 8,780,628 | 0.4 | 9.9 | |||||||||||||
PERFORMANCE RATIOS | ||||||||||||||||||
Return on average assets | 0.93 | % | 0.60 | % | 0.64 | % | 55.0 | % | 45.3 | % | ||||||||
Core return on average assets(1) | 0.94 | 0.95 | 0.64 | (1.1 | ) | 46.9 | ||||||||||||
Return on average equity | 8.72 | 5.62 | 5.15 | 55.2 | 69.3 | |||||||||||||
Core return on average equity(1) | 8.85 | 8.90 | 5.11 | (0.6 | ) | 73.2 | ||||||||||||
Net interest margin | 3.70 | 3.70 | 3.28 | — | 12.8 | |||||||||||||
Net interest income to average assets | 3.47 | 3.45 | 3.11 | 0.6 | 11.6 | |||||||||||||
Noninterest expense to average assets | 2.46 | 2.63 | 2.32 | (6.5 | ) | 6.0 | ||||||||||||
Efficiency ratio(2) | 65.49 | 70.74 | 68.57 | (7.4 | ) | (4.5 | ) | |||||||||||
Core efficiency ratio(1) | 64.99 | 63.73 | 68.46 | 2.0 | (5.1 | ) | ||||||||||||
Dividend payout ratio | 10.01 | 13.86 | 9.94 | (27.8 | ) | 0.7 | ||||||||||||
Net charge-offs to average loans | 0.02 | 0.03 | 0.03 | (33.3 | ) | (33.3 | ) | |||||||||||
(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 CORPORATION | |||||||||||||||
SUMMARY FINANCIAL INFORMATION | |||||||||||||||
(Amounts in thousands, except share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
As of and for the three months ended | |||||||||||||||
6/30/2018 | 3/31/2018 | 6/30/2017 | Linked Quarter | Year/Year | |||||||||||
ASSET QUALITY RATIOS | |||||||||||||||
Nonperforming assets to total assets | 0.50 | % | 0.60 | % | 0.41 | % | (16.7 | )% | 22.0 | % | |||||
Nonperforming loans to total loans | 0.33 | 0.44 | 0.13 | (25.0 | ) | 153.8 | |||||||||
Allowance for loan losses to total loans | 0.65 | 0.64 | 0.78 | 1.6 | (16.7 | ) | |||||||||
Allowance for loan losses to nonperforming loans | 199.04 | 146.78 | 627.63 | 35.6 | (68.3 | ) | |||||||||
CAPITAL RATIOS | |||||||||||||||
Investar Holding Corporation: | |||||||||||||||
Total equity to total assets | 10.44 | % | 10.55 | % | 12.30 | % | (1.0 | )% | (15.1 | )% | |||||
Tangible equity to tangible assets(1) | 9.38 | 9.44 | 12.07 | (0.6 | ) | (22.3 | ) | ||||||||
Tier 1 leverage ratio | 10.22 | 10.11 | 12.71 | 1.1 | (19.6 | ) | |||||||||
Common equity tier 1 capital ratio(2) | 11.64 | 11.67 | 14.41 | (0.3 | ) | (19.2 | ) | ||||||||
Tier 1 capital ratio(2) | 12.11 | 12.16 | 14.75 | (0.4 | ) | (17.9 | ) | ||||||||
Total capital ratio(2) | 14.04 | 14.12 | 17.22 | (0.6 | ) | (18.5 | ) | ||||||||
Investar Bank: | |||||||||||||||
Tier 1 leverage ratio | 11.14 | 11.06 | 13.96 | 0.7 | (20.2 | ) | |||||||||
Common equity tier 1 capital ratio(2) | 13.21 | 13.31 | 16.20 | (0.8 | ) | (18.5 | ) | ||||||||
Tier 1 capital ratio(2) | 13.21 | 13.31 | 16.20 | (0.8 | ) | (18.5 | ) | ||||||||
Total capital ratio(2) | 13.82 | 13.92 | 16.91 | (0.7 | ) | (18.3 | ) | ||||||||
(1) Non-GAAP financial measure. See reconciliation. | |||||||||||||||
(2) Estimated for June 30, 2018. | |||||||||||||||
INVESTAR HOLDING CORPORATION | ||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||
(Amounts in thousands, except share data) | ||||||||||||
(Unaudited) | ||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | ||||||||||
ASSETS | ||||||||||||
Cash and due from banks | $ | 21,338 | $ | 13,409 | $ | 11,720 | ||||||
Interest-bearing balances due from other banks | 13,483 | 7,623 | 23,238 | |||||||||
Federal funds sold | 10 | 70 | 3 | |||||||||
Cash and cash equivalents | 34,831 | 21,102 | 34,961 | |||||||||
Available for sale securities at fair value (amortized cost of $247,317, $236,225, and $185,121, respectively) | 241,587 | 231,448 | 183,584 | |||||||||
Held to maturity securities at amortized cost (estimated fair value of $17,064, $17,479, and $19,418, respectively) | 17,299 | 17,727 | 19,460 | |||||||||
Loans, net of allowance for loan losses of $8,451, $8,130, and $7,320, respectively | 1,291,860 | 1,264,820 | 925,640 | |||||||||
Other equity securities | 13,095 | 11,573 | 7,025 | |||||||||
Bank premises and equipment, net of accumulated depreciation of $8,805, $8,300, and $7,497, respectively | 39,253 | 38,091 | 31,510 | |||||||||
Other real estate owned, net | 4,225 | 4,266 | 3,830 | |||||||||
Accrued interest receivable | 4,842 | 4,707 | 3,197 | |||||||||
Deferred tax asset | 1,429 | 1,496 | 2,343 | |||||||||
Goodwill and other intangible assets, net | 19,952 | 20,141 | 3,213 | |||||||||
Bank-owned life insurance | 23,543 | 23,382 | 7,297 | |||||||||
Other assets | 5,555 | 5,435 | 3,466 | |||||||||
Total assets | $ | 1,697,471 | $ | 1,644,188 | $ | 1,225,526 | ||||||
LIABILITIES | ||||||||||||
Deposits | ||||||||||||
Noninterest-bearing | $ | 222,570 | $ | 221,855 | $ | 130,625 | ||||||
Interest-bearing | 1,008,360 | 1,004,817 | 764,200 | |||||||||
Total deposits | 1,230,930 | 1,226,672 | 894,825 | |||||||||
Advances from Federal Home Loan Bank | 237,075 | 187,066 | 109,285 | |||||||||
Repurchase agreements | 16,752 | 21,053 | 36,745 | |||||||||
Subordinated debt | 18,191 | 18,180 | 18,145 | |||||||||
Junior subordinated debt | 5,819 | 5,806 | 3,609 | |||||||||
Accrued taxes and other liabilities | 11,474 | 11,981 | 12,121 | |||||||||
Total liabilities | 1,520,241 | 1,470,758 | 1,074,730 | |||||||||
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; 9,581,034, 9,517,328, and 8,815,119 shares outstanding, respectively | 9,581 | 9,517 | 8,815 | |||||||||
Surplus | 132,166 | 131,179 | 113,246 | |||||||||
Retained earnings | 39,258 | 35,829 | 29,644 | |||||||||
Accumulated other comprehensive loss | (3,775 | ) | (3,095 | ) | (909 | ) | ||||||
Total stockholders’ equity | 177,230 | 173,430 | 150,796 | |||||||||
Total liabilities and stockholders’ equity | $ | 1,697,471 | $ | 1,644,188 | $ | 1,225,526 | ||||||
INVESTAR HOLDING CORPORATION | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||
(Amounts in thousands, except share data) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
For the three months ended | For the six months ended | |||||||||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | ||||||||||||||||
INTEREST INCOME | ||||||||||||||||||||
Interest and fees on loans | $ | 16,223 | $ | 15,626 | $ | 10,559 | $ | 31,849 | $ | 20,563 | ||||||||||
Interest on investment securities | 1,644 | 1,459 | 1,199 | 3,103 | 2,228 | |||||||||||||||
Other interest income | 142 | 93 | 86 | 235 | 146 | |||||||||||||||
Total interest income | 18,009 | 17,178 | 11,844 | 35,187 | 22,937 | |||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||
Interest on deposits | 2,426 | 2,253 | 1,827 | 4,679 | 3,680 | |||||||||||||||
Interest on borrowings | 1,263 | 1,067 | 715 | 2,330 | 1,095 | |||||||||||||||
Total interest expense | 3,689 | 3,320 | 2,542 | 7,009 | 4,775 | |||||||||||||||
Net interest income | 14,320 | 13,858 | 9,302 | 28,178 | 18,162 | |||||||||||||||
Provision for loan losses | 567 | 625 | 375 | 1,192 | 725 | |||||||||||||||
Net interest income after provision for loan losses | 13,753 | 13,233 | 8,927 | 26,986 | 17,437 | |||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||||
Service charges on deposit accounts | 327 | 359 | 96 | 686 | 193 | |||||||||||||||
Gain on sale of investment securities, net | 22 | — | 109 | 22 | 215 | |||||||||||||||
(Loss) gain on sale of fixed assets, net | (1 | ) | 90 | 1 | 89 | 24 | ||||||||||||||
Loss on sale of other real estate owned, net | (4 | ) | — | (10 | ) | (4 | ) | (5 | ) | |||||||||||
Servicing fees and fee income on serviced loans | 253 | 288 | 378 | 541 | 801 | |||||||||||||||
Other operating income | 596 | 335 | 227 | 931 | 458 | |||||||||||||||
Total noninterest income | 1,193 | 1,072 | 801 | 2,265 | 1,686 | |||||||||||||||
Income before noninterest expense | 14,946 | 14,305 | 9,728 | 29,251 | 19,123 | |||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||
Depreciation and amortization | 629 | 598 | 391 | 1,227 | 767 | |||||||||||||||
Salaries and employee benefits | 6,495 | 6,048 | 4,109 | 12,543 | 8,059 | |||||||||||||||
Occupancy | 335 | 380 | 245 | 715 | 509 | |||||||||||||||
Data processing | 565 | 542 | 355 | 1,107 | 723 | |||||||||||||||
Marketing | 44 | 38 | 119 | 82 | 147 | |||||||||||||||
Professional fees | 228 | 255 | 231 | 483 | 463 | |||||||||||||||
Acquisition expenses | — | 1,104 | 80 | 1,104 | 225 | |||||||||||||||
Other operating expenses | 1,864 | 1,597 | 1,398 | 3,461 | 2,719 | |||||||||||||||
Total noninterest expense | 10,160 | 10,562 | 6,928 | 20,722 | 13,612 | |||||||||||||||
Income before income tax expense | 4,786 | 3,743 | 2,800 | 8,529 | 5,511 | |||||||||||||||
Income tax expense | 966 | 1,341 | 877 | 2,307 | 1,724 | |||||||||||||||
Net income | $ | 3,820 | $ | 2,402 | $ | 1,923 | $ | 6,222 | $ | 3,787 | ||||||||||
EARNINGS PER SHARE | ||||||||||||||||||||
Basic earnings per share | $ | 0.39 | $ | 0.25 | $ | 0.22 | $ | 0.64 | $ | 0.48 | ||||||||||
Diluted earnings per share | $ | 0.39 | $ | 0.25 | $ | 0.22 | $ | 0.64 | $ | 0.47 | ||||||||||
Cash dividends declared per common share | $ | 0.04 | $ | 0.04 | $ | 0.02 | $ | 0.08 | $ | 0.04 | ||||||||||
INVESTAR HOLDING CORPORATION | |||||||||||||||||||||||||||||||||
CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS | |||||||||||||||||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||
For the three months ended | |||||||||||||||||||||||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | |||||||||||||||||||||||||||||||
Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||
Loans | $ | 1,269,894 | $ | 16,223 | 5.12 | % | $ | 1,261,047 | $ | 15,626 | 5.03 | % | $ | 914,265 | $ | 10,559 | 4.63 | % | |||||||||||||||
Securities: | |||||||||||||||||||||||||||||||||
Taxable | 224,263 | 1,441 | 2.58 | 206,722 | 1,253 | 2.46 | 165,689 | 1,013 | 2.45 | ||||||||||||||||||||||||
Tax-exempt | 33,936 | 203 | 2.40 | 34,688 | 206 | 2.41 | 29,375 | 186 | 2.54 | ||||||||||||||||||||||||
Interest-bearing balances with banks | 25,720 | 142 | 2.20 | 15,968 | 93 | 2.37 | 28,423 | 86 | 1.21 | ||||||||||||||||||||||||
Total interest-earning assets | 1,553,813 | 18,009 | 4.65 | 1,518,425 | 17,178 | 4.59 | 1,137,752 | 11,844 | 4.18 | ||||||||||||||||||||||||
Cash and due from banks | 16,690 | 25,526 | 8,213 | ||||||||||||||||||||||||||||||
Intangible assets | 20,064 | 19,881 | 3,217 | ||||||||||||||||||||||||||||||
Other assets | 73,312 | 73,438 | 56,919 | ||||||||||||||||||||||||||||||
Allowance for loan losses | (8,170 | ) | (7,993 | ) | (7,223 | ) | |||||||||||||||||||||||||||
Total assets | $ | 1,655,709 | $ | 1,629,277 | $ | 1,198,878 | |||||||||||||||||||||||||||
Liabilities and stockholders’ equity | |||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||
Deposits: | |||||||||||||||||||||||||||||||||
Interest-bearing demand deposits | $ | 372,824 | $ | 641 | 0.69 | $ | 360,903 | $ | 580 | 0.65 | $ | 291,902 | $ | 524 | 0.72 | ||||||||||||||||||
Savings deposits | 121,174 | 138 | 0.46 | 120,861 | 137 | 0.46 | 51,474 | 83 | 0.65 | ||||||||||||||||||||||||
Time deposits | 507,039 | 1,647 | 1.30 | 520,891 | 1,536 | 1.20 | 402,271 | 1,220 | 1.22 | ||||||||||||||||||||||||
Total interest-bearing deposits | 1,001,037 | 2,426 | 0.97 | 1,002,655 | 2,253 | 0.91 | 745,647 | 1,827 | 0.98 | ||||||||||||||||||||||||
Short-term borrowings | 140,595 | 579 | 1.65 | 143,646 | 507 | 1.43 | 137,848 | 350 | 1.02 | ||||||||||||||||||||||||
Long-term debt | 106,063 | 684 | 2.59 | 82,641 | 560 | 2.75 | 39,285 | 365 | 3.73 | ||||||||||||||||||||||||
Total interest-bearing liabilities | 1,247,695 | 3,689 | 1.19 | 1,228,942 | 3,320 | 1.10 | 922,780 | 2,542 | 1.10 | ||||||||||||||||||||||||
Noninterest-bearing deposits | 222,404 | 216,827 | 116,714 | ||||||||||||||||||||||||||||||
Other liabilities | 9,809 | 10,041 | 9,671 | ||||||||||||||||||||||||||||||
Stockholders’ equity | 175,801 | 173,467 | 149,713 | ||||||||||||||||||||||||||||||
Total liability and stockholders’ equity | $ | 1,655,709 | $ | 1,629,277 | $ | 1,198,878 | |||||||||||||||||||||||||||
Net interest income/net interest margin | $ | 14,320 | 3.70 | % | $ | 13,858 | 3.70 | % | $ | 9,302 | 3.28 | % | |||||||||||||||||||||
INVESTAR HOLDING CORPORATION | ||||||||||||||||||||||
CONSOLIDATED AVERAGE BALANCE SHEET, INTEREST EARNED AND YIELD ANALYSIS | ||||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
For the six months ended | ||||||||||||||||||||||
June 30, 2018 | June 30, 2017 | |||||||||||||||||||||
Average Balance | Interest Income/ Expense | Yield/ Rate | Average Balance | Interest Income/ Expense | Yield/ Rate | |||||||||||||||||
Assets | ||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Loans | $ | 1,265,495 | $ | 31,849 | 5.08 | % | $ | 903,466 | $ | 20,563 | 4.59 | % | ||||||||||
Securities: | ||||||||||||||||||||||
Taxable | 215,541 | 2,694 | 2.52 | 157,957 | 1,852 | 2.36 | ||||||||||||||||
Tax-exempt | 34,310 | 409 | 2.41 | 29,955 | 376 | 2.53 | ||||||||||||||||
Interest-bearing balances with banks | 25,118 | 235 | 1.88 | 26,517 | 146 | 1.12 | ||||||||||||||||
Total interest-earning assets | 1,540,464 | 35,187 | 4.61 | 1,117,895 | 22,937 | 4.14 | ||||||||||||||||
Cash and due from banks | 16,837 | 8,379 | ||||||||||||||||||||
Intangible assets | 19,973 | 3,222 | ||||||||||||||||||||
Other assets | 73,374 | 56,058 | ||||||||||||||||||||
Allowance for loan losses | (8,082 | ) | (7,174 | ) | ||||||||||||||||||
Total assets | $ | 1,642,566 | $ | 1,178,380 | ||||||||||||||||||
Liabilities and stockholders’ equity | ||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||
Interest-bearing demand | $ | 366,896 | $ | 1,220 | 0.67 | $ | 291,878 | $ | 1,011 | 0.70 | ||||||||||||
Savings deposits | 121,018 | 276 | 0.46 | 52,350 | 169 | 0.65 | ||||||||||||||||
Time deposits | 513,927 | 3,183 | 1.25 | 417,635 | 2,500 | 1.21 | ||||||||||||||||
Total interest-bearing deposits | 1,001,841 | 4,679 | 0.94 | 761,863 | 3,680 | 0.97 | ||||||||||||||||
Short-term borrowings | 142,112 | 1,086 | 1.54 | 129,432 | 633 | 0.99 | ||||||||||||||||
Long-term debt | 94,417 | 1,244 | 2.66 | 30,280 | 462 | 3.08 | ||||||||||||||||
Total interest-bearing liabilities | 1,238,370 | 7,009 | 1.14 | 921,575 | 4,775 | 1.04 | ||||||||||||||||
Noninterest-bearing deposits | 219,631 | 113,579 | ||||||||||||||||||||
Other liabilities | 9,924 | 9,532 | ||||||||||||||||||||
Stockholders’ equity | 174,641 | 133,694 | ||||||||||||||||||||
Total liability and stockholders’ equity | $ | 1,642,566 | $ | 1,178,380 | ||||||||||||||||||
Net interest income/net interest margin | $ | 28,178 | 3.69 | % | $ | 18,162 | 3.28 | % | ||||||||||||||
INVESTAR HOLDING CORPORATION | ||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||||||||||
(Amounts in thousands, except share data) | ||||||||||||
(Unaudited) | ||||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | ||||||||||
Tangible common equity | ||||||||||||
Total stockholders’ equity | $ | 177,230 | $ | 173,430 | $ | 150,796 | ||||||
Adjustments: | ||||||||||||
Goodwill | 17,358 | 17,424 | 2,684 | |||||||||
Core deposit intangible | 2,494 | 2,617 | 429 | |||||||||
Trademark intangible | 100 | 100 | 100 | |||||||||
Tangible common equity | $ | 157,278 | $ | 153,289 | $ | 147,583 | ||||||
Tangible assets | ||||||||||||
Total assets | $ | 1,697,471 | $ | 1,644,188 | $ | 1,225,526 | ||||||
Adjustments: | ||||||||||||
Goodwill | 17,358 | 17,424 | 2,684 | |||||||||
Core deposit intangible | 2,494 | 2,617 | 429 | |||||||||
Trademark intangible | 100 | 100 | 100 | |||||||||
Tangible assets | $ | 1,677,519 | $ | 1,624,047 | $ | 1,222,313 | ||||||
Common shares outstanding | 9,581,034 | 9,517,328 | 8,815,119 | |||||||||
Tangible equity to tangible assets | 9.38 | % | 9.44 | % | 12.07 | % | ||||||
Book value per common share | $ | 18.50 | $ | 18.22 | $ | 17.11 | ||||||
Tangible book value per common share | 16.42 | 16.11 | 16.74 | |||||||||
INVESTAR HOLDING CORPORATION | ||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||||||||||
(Amounts in thousands, except share data) | ||||||||||||
(Unaudited) | ||||||||||||
Three months ended | ||||||||||||
6/30/2018 | 3/31/2018 | 6/30/2017 | ||||||||||
Net interest income | (a) | $ | 14,320 | $ | 13,858 | $ | 9,302 | |||||
Provision for loan losses | 567 | 625 | 375 | |||||||||
Net interest income after provision for loan losses | 13,753 | 13,233 | 8,927 | |||||||||
Noninterest income | (b) | 1,193 | 1,072 | 801 | ||||||||
Gain on sale of investment securities, net | (22 | ) | — | (109 | ) | |||||||
Loss on sale of other real estate owned, net | 4 | — | 10 | |||||||||
Loss (gain) on sale of fixed assets, net | 1 | (90 | ) | (1 | ) | |||||||
Core noninterest income | (d) | 1,176 | 982 | 701 | ||||||||
Core earnings before noninterest expense | 14,929 | 14,215 | 9,628 | |||||||||
Total noninterest expense | (c) | 10,160 | 10,562 | 6,928 | ||||||||
Acquisition expense | — | (1,104 | ) | (80 | ) | |||||||
Non-routine legal expense | (89 | ) | — | — | ||||||||
Core noninterest expense | (f) | 10,071 | 9,458 | 6,848 | ||||||||
Core earnings before income tax expense | 4,858 | 4,757 | 2,780 | |||||||||
Core income tax expense(1) | 981 | 950 | 871 | |||||||||
Core earnings | $ | 3,877 | $ | 3,807 | $ | 1,909 | ||||||
Core basic earnings per common share | 0.40 | 0.40 | 0.22 | |||||||||
Diluted earnings per common share (GAAP) | $ | 0.39 | $ | 0.25 | $ | 0.22 | ||||||
Gain on sale of investment securities, net | — | — | (0.01 | ) | ||||||||
Gain on sale of fixed assets, net | — | (0.01 | ) | — | ||||||||
Acquisition expense | — | 0.09 | 0.01 | |||||||||
Non-routine legal expense | 0.01 | — | — | |||||||||
Tax reform related re-measurement charges to income tax expense | — | 0.07 | — | |||||||||
Core diluted earnings per common share | $ | 0.40 | $ | 0.40 | $ | 0.22 | ||||||
Efficiency ratio | (c) / (a+b) | 65.49 | % | 70.74 | % | 68.57 | % | |||||
Core efficiency ratio | (f) / (a+d) | 64.99 | % | 63.73 | % | 68.46 | % | |||||
Core return on average assets(2) | 0.94 | % | 0.95 | % | 0.64 | % | ||||||
Core return on average equity(2) | 8.85 | % | 8.90 | % | 5.11 | % | ||||||
Total average assets | $ | 1,655,709 | $ | 1,629,277 | $ | 1,198,878 | ||||||
Total average stockholders’ equity | 175,801 | 173,467 | 149,713 | |||||||||
(1) Core income tax expense is calculated using the effective tax rates of 20.2% and 31.3% for the quarters ended June 30, 2018 and June 30, 2017, respectively, and 19.98% for the quarter ended March 31, 2018, prior to the one-time charges of $0.6 million to tax expense as a result of the Tax Cuts and Jobs Act. | ||||||||||||
(2) Core earnings used in calculation. No adjustments were made to average assets or average equity. | ||||||||||||