Investar Holding Corp (ISTR) Stock Analysis and Metrics

Sector: Financial Services Industry: Banks - Regional CIK: 0001602658

P/B 0.87

P/E 11.41

P/S 2.75

Market Cap 257.25 Mn

ROIC (Qtr) 6.08

Div Yield % 1.65

Rev 1y % (Qtr) 7.40

Total Debt (Qtr) 100.60 Mn

Debt/Equity (Qtr) 0.34

About

Investar Holding Corporation, a Louisiana-based company commonly recognized by its ticker symbol "ISTR," operates within the banking industry, specifically focusing on commercial and retail lending products, deposit products, and other banking services. Its primary operations are conducted through its wholly-owned subsidiary, Investar Bank, National Association, catering to individuals, professionals, and small to medium-sized businesses across south Louisiana, southeast Texas, and Alabama. The company's core business activities revolve around...

Investar Holding Corporation, a Louisiana-based company commonly recognized by its ticker symbol "ISTR," operates within the banking industry, specifically focusing on commercial and retail lending products, deposit products, and other banking services. Its primary operations are conducted through its wholly-owned subsidiary, Investar Bank, National Association, catering to individuals, professionals, and small to medium-sized businesses across south Louisiana, southeast Texas, and Alabama.

The company's core business activities revolve around lending and deposit services. Investar Holding Corporation generates its revenue predominantly through lending activities, which encompass commercial real estate loans, commercial and industrial loans, construction and development loans, and consumer loans. Commercial real estate loans constitute roughly 48% of the company's total loans, while commercial and industrial loans account for approximately 25%. Additionally, the company offers a variety of deposit products, such as savings, checking, and money market accounts, certificates of deposit, and individual retirement accounts, further diversifying its revenue streams.

Investar Holding Corporation holds a significant position within its industry, characterized by a competitive landscape with numerous state, regional, and national banks, savings and loan associations, credit unions, finance companies, mortgage companies, insurance companies, brokerage firms, and investment companies. The company's competitive advantages stem from its community bank approach, emphasizing quality customer service and fostering robust customer relationships.

The company's customers primarily consist of small to medium-sized businesses, professionals, and individuals, with a substantial presence in Baton Rouge, Louisiana. Notably, the company maintains a strong position in its local markets, despite being a relatively smaller entity compared to larger national banks and financial institutions.

Investar Holding Corporation manages a diverse range of products and services under various brand names and trade names. Among these are its commercial banking segment, offering financial products and services to small to medium-sized businesses, professionals, and individuals, and its retail banking segment, catering to individuals with deposit products such as savings, checking, and money market accounts, as well as certificates of deposit and individual retirement accounts.

Stock Price Chart

Analysis

Pros

Strong tangible asset base of 2.76B provides 27.43x coverage of total debt 100.60M, indicating robust asset backing and low credit risk.
Robust free cash flow of 13.26M exceeds capital expenditure of 1.04M by 12.69x, indicating strong organic growth funding capability.
Retained earnings of 146.18M provide strong 3.54x coverage of intangibles 41.30M, indicating quality earnings retention.
Free cash flow of 13.26M provides solid 0.70x coverage of operating expenses 18.94M, showing operational efficiency.
Operating cash flow of 14.30M provides strong 13.69x coverage of capital expenditure 1.04M, enabling organic growth.

Cons

Operating cash flow of 14.30M barely covers its investment activities of (43.74M), with a coverage ratio of -0.33, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Operating cash flow of 14.30M provides thin coverage of dividend payments of (4.18M) with a -3.42 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
Free cash flow of 13.26M represents just -0.10x of debt issuance (130.43M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
Operating cash flow of 14.30M barely covers operating expenses of 18.94M with a 0.76 ratio, suggesting thin operational efficiency margins and limited flexibility.
Retained earnings of 146.18M provide limited buffer against comprehensive income items of (37.37M), which is -3.91x, indicating elevated exposure to market risks.

Peer Comparison

Companies in the Banks - Regional

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	NU	Nu Holdings Ltd.	85.19 Bn	33.68	6.05	4.49 Bn
2	USB	Us Bancorp \De\	79.87 Bn	11.73	3.07	77.98 Bn
3	PNC	Pnc Financial Services Group, Inc.	79.24 Bn	12.78	3.51	62.34 Bn
4	NWG	NatWest Group plc	63.09 Bn	9.37	2.89	169.04 Bn
5	TFC	Truist Financial Corp	61.97 Bn	12.64	3.39	71.11 Bn
6	MTB	M&T Bank Corp	31.44 Bn	11.98	3.46	14.99 Bn
7	FITB	Fifth Third Bancorp	30.56 Bn	13.53	3.76	18.94 Bn
8	FCNCA	First Citizens Bancshares Inc /De/	26.31 Bn	11.60	2.96	40.00 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	0.11	0.14
EV to Cash from Ops.	21.57	6.85
EV to Debt	3.07	5.15
EV to EBIT	11.07	14.55
EV to EBITDA	10.04	15.06
EV to Free Cash Flow [EV/FCF]	23.27	8.34
EV to Market Cap	1.20	1.01
EV to Revenue	3.30	-3.70
Price to Book Value [P/B]	0.87	1.15
Price to Earnings [P/E]	11.41	16.82

Dividend Metrics

Metric	Value	Industry
Dividend Coverage Ratio	4.79	269.61
Dividend Payout Ratio %	18.80	35.05
Dividend per Basic Share	0.43	0.89
FCF Dividend Payout Ratio %	31.88	34.25
Interest Coverage	0.00	-0.05

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	-233.29	-68.67
Cash and Equivalents Growth (1y) %	-59.03	15.31
Dividend Growth (1y) %	6.17	5.16
EBIAT Growth (1y) %	30.48	109.49
EBITDA Growth (1y) %	24.29	38.27
EBIT Growth (1y) %	29.94	60.77
EBT Growth (1y) %	29.94	60.67
EPS Growth (1y) %	27.22	75.40
FCF Growth (1y) %	-23.35	159.21
Gross Profit Growth (1y) %	11.42	13.98

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.03	0.04
Cash Payout Ratio	0.28	0.26
Cash Ratio	0.00	0.00
Current Ratio	0.00	0.01
Debt to Equity Ratio	0.34	0.53
Interest Cover Ratio	0.00	-0.05
Times Interest Earned	0.00	-0.05

Profitability

Metric	Value	Industry
EBITDA Margin %	32.90	146.83
EBIT Margin %	29.85	154.20
EBT Margin %	29.85	153.46
Gross Margin %	100.00	97.83
Net Profit Margin %	24.10	114.69

Investar Holding Corp (NASDAQ: ISTR)