Bear State Financial, Inc. Announces Third Quarter 2015 Earnings

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November 5, 2015 5:00 PM EST

QUARTER HIGHLIGHTS:

  • Third quarter 2015 GAAP net income was $3.2 million or $0.10 per diluted common share, compared to GAAP net income of $22.7 million or $0.68 per diluted common share for the third quarter of 2014. Net income for the third quarter of 2014 included a non-recurring income tax benefit of $20.3 million.
  • Third quarter 2015 GAAP pre-tax earnings were $4.7 million compared to pre-tax earnings of $2.4 million in the third quarter of 2014.
  • Book value per common share was $5.36 at September 30, 2015, an 8% increase from $4.96 at September 30, 2014.
  • Tangible book value per common share was $4.38 at September 30, 2015, an 11% increase from $3.96 at September 30, 2014.
  • Bear State Financial, Inc. completed its acquisition of Metropolitan National Bank (Springfield, MO) on October 1, 2015.

LITTLE ROCK, Ark.--(BUSINESS WIRE)-- Bear State Financial, Inc. (the “Company,”)(NASDAQ: BSF), today reported earnings of $3.2 million and earnings per diluted common share of $0.10 in the third quarter of 2015, compared to earnings of $22.7 million or $0.68 per diluted common share in the third quarter of 2014. Net income for the third quarter of 2014 included a non-recurring income tax benefit of $20.3 million primarily resulting from the reversal of the Company’s valuation allowance against its deferred tax assets. Pre-tax income for the third quarter of 2015 was $4.7 million compared to pre-tax income of $2.4 million in the third quarter of 2014.

On October 1, 2015, the Company completed its previously-announced acquisition of Metropolitan National Bank (Springfield, MO) (“MNB”). In connection with and effective upon the MNB acquisition, Mark McFatridge, CEO of MNB, was appointed President and CEO of the Company and Bear State Bank, N.A., the Company’s wholly-owned bank subsidiary (“Bear State Bank”). In addition, McFatridge and John Ghirardelli, a member of the Board of Directors of MNB, were also elected to the respective Boards of Directors of the Company and Bear State Bank.

The Company plans to convert MNB systems to its core technology platform, and, subject to regulatory approval, consolidate its two banking charters to a single charter. The Company anticipates the conversion and charter consolidation to be substantially completed by the second quarter of 2016.

As of September 30, 2015, MNB had approximately $455 million of total assets, $370 million of net loans and $370 million of deposits. Following the consummation of the MNB acquisition on October 1, 2015, the Company and its consolidated subsidiaries will have approximately $2 billion in total assets, 55 total branches (41 branches throughout Arkansas, 2 branches in Southeast Oklahoma and 12 branches in Southwest Missouri) and three loan production offices in Arkansas and one in Missouri.

“This is a great time to be with Bear State Financial,” said Mark McFatridge, CEO. “Bear State continues to build on our strong foundation while making solid progress in achieving our goals with respect to improved operational efficiency. Our teams are working diligently toward making the integration of Metropolitan National Bank a non-event for our customers. Additionally, we continue to invest in systems and processes that will allow us to facilitate a simpler and more responsive operational environment in order to realize efficiencies that will benefit our organization long term.”

FINANCIAL CONDITION

Total assets were $1.47 billion at September 30, 2015, a 4% decrease compared to $1.53 billion at September 30, 2014. Total deposits were $1.21 billion at September 30, 2015, a 5% decrease compared to $1.28 billion at September 30, 2014. The decrease in deposits is due, in part, to management’s efforts to reduce unprofitable to marginally profitable accounts and more efficiently manage its deposit base. Total loans were $1.08 billion at September 30, 2015, an increase of $14 million, or 1%, from September 30, 2014. While loan opportunities are abundant in the Company’s markets, management has deliberately chosen not to pursue a majority of these opportunities due to unacceptable levels of rate and/or credit risk.

Total stockholders’ equity was $179 million at September 30, 2015, an 8% increase from $165 million at September 30, 2014. Tangible common stockholders’ equity was $146 million at September 30, 2015, an 11% increase from $132 million at September 30, 2014. Book value per common share was $5.36 at September 30, 2015, an 8% increase from $4.96 at September 30, 2014. Tangible book value per common share was $4.38 at September 30, 2015, an 11% increase from $3.96 at September 30, 2014. The Company’s ratio of total stockholders’ equity to total assets increased to 12.15% at September 30, 2015, compared to 10.82% at September 30, 2014. The calculation of the Company’s tangible book value per common share, tangible common stockholders’ equity and the reconciliation of such non-GAAP financial measures to the most comparable GAAP measures are included in the schedules accompanying this release.

RESULTS OF OPERATIONS

Third quarter 2015 core earnings totaled $3.3 million or $0.10 per diluted common share, compared to core earnings of $4.1 million or $0.12 per diluted common share in the third quarter of 2014. The core return on average assets measured 0.90% and 1.09%; core return on average equity measured 7.41% and 11.12%; and core return on average tangible equity measured 9.07% and 14.42%, each for the third quarters of 2015 and 2014, respectively.

Pre-tax income on a GAAP basis for the third quarter of 2015 was $4.7 million compared to pre-tax income on a GAAP basis of $2.4 million in the third quarter of 2014. The Company recognized third quarter 2015 GAAP net income of $3.2 million or $0.10 per diluted common share compared to GAAP net income of $22.7 million or $0.68 per diluted common share in the third quarter of 2014. The GAAP net income resulted in a GAAP return on average assets of 0.87% in the third quarter of 2015, compared to 6.02% in the third quarter of 2014. GAAP net income includes what the Company considers “non-core items,” which are items that we do not consider indicative of our core operating performance and which are not necessarily comparable from year to year. The reconciliation of GAAP net income and core earnings, a non-GAAP financial measure, together with related financial measures and ratios is included in the schedules accompanying this release.

Net interest income for the third quarter of 2015 was $12.2 million, compared to $14.7 million for the same period in 2014. Net interest income for the nine months ended September 30, 2015 was $36.8 million, compared to $24 million for the same period in 2014. Interest income for the third quarter of 2015 was $13.7 million compared to $16.2 million for the same period in 2014. Interest income for the nine months ended September 30, 2015 was $41.4 million compared to $27.5 million for the same period in 2014. The increase in interest income for the nine months ended September 30, 2015, compared to the same period in 2014, was primarily related to increases in the average balances of loans receivable and investment securities as a result of the merger with First National Security Company (“First National”) on June 13, 2014. Interest expense for the third quarter of 2015 was $1.5 million compared to $1.6 million for the same period in 2014. Interest expense for the nine months ended September 30, 2015 was $4.6 million compared to $3.5 million for the same period in 2014. The increase in interest expense for the nine months ended September 30, 2015 compared to the same period in 2014 was primarily due to an increase in the average balance of deposit accounts and borrowings as a result of the First National merger.

Net interest margin measured 3.74% for the third quarter 2015, compared to 4.44% for the same period in 2014. Net interest margin for the nine months ended September 30, 2015 was 3.76%, compared to 3.84% for the same period in 2014. Average cost of total interest-bearing liabilities for the nine months ended September 30, 2015 was 0.55%, compared to 0.63% for the same period 2014.

Noninterest income is generated primarily through deposit account fee income, profit on sale of loans, and earnings on life insurance policies. Total noninterest income of $3.3 million for the three months ended September 30, 2015 decreased from $3.6 million for the same period in 2014, a 9% decrease. Total noninterest income of $9.8 million for the nine months ended September 30, 2015 increased from $6.7 million for the same period in 2014, a 48% increase. The increase in the nine month comparison period was primarily due to an increase in deposit fee income and gain on sale of loans. The increase in deposit fee income was primarily due to an increase in deposit accounts resulting from the merger with First National. The increase in gain on sale of loans was due to an increase in the number of and the average profit on mortgage loans sold.

Total noninterest expense decreased $4.9 million or 32% during the third quarter of 2015 compared to the third quarter of 2014. The variance in total noninterest expense for the three month period ended September 30, 2015 compared to the same period in 2014 was primarily the result of a decrease of approximately $4.1 million in non-core expenses incurred during the third quarter of 2014 and a benefit from expense savings following the Company’s consolidation of its three subsidiary banks into a single charter during the first quarter of 2015. Total noninterest expense increased $3.3 million or 11% during the nine months ended September 30, 2015 compared to the same period in 2014. The variance in total noninterest expense for the nine months ended September 30, 2015 compared to the same period in 2014 was primarily related to the increase in personnel and overhead costs resulting from the merger with First National. The Company’s core efficiency ratio was 66% in the third quarter of 2015 compared to 61% in the third quarter of 2014.

Nonperforming assets increased to $19.1 million at September 30, 2015, compared to $15.0 million at September 30, 2014. The increase in nonperforming assets is primarily attributable to a single relationship that management has been actively monitoring. The Company anticipates a resolution of this matter within the next six months and management believes that reserves adequately reflect its estimated loss exposure. The allowance for loan losses represented 1.30% of total loans at September 30, 2015, compared to 1.22% at September 30, 2014. The ratio of allowance for loan losses plus discount on acquired loans to total loans was 1.97% at September 30, 2015, compared to 2.52% at September 30, 2014. The ratio of the allowance for loan losses to nonperforming loans was 83.18% at September 30, 2015, compared to 136.79% at September 30, 2014. Annualized net charge-offs as a percentage of average loans for the quarter ended September 30, 2015 was 0.08% compared to 0.01% for the quarter ended September 30, 2014. Provision for loan losses in the third quarter of 2015 was $331,000, compared to $600,000 for the same period in 2014. Provision for loans losses for the nine months ended September 30, 2015 was $931,000, compared to $830,000 for the same period in 2014.

About Bear State Financial, Inc.

Bear State Financial, Inc. is the parent company for Bear State Bank, and effective October 1, 2015, for Metropolitan National Bank. Bear State Financial common stock is traded on the NASDAQ Global Market under the symbol BSF. For more information on Bear State Financial, please visit www.bearstatefinancial.com. Its principal subsidiaries are community oriented financial institutions providing a broad line of financial products to individuals and business customers. Bear State Bank operates 43 branches and three loan production offices throughout Arkansas and Southeast Oklahoma. Metropolitan National Bank operates 12 branches and one loan production office in Southwest Missouri.

Non-GAAP Financial Measures

This release contains certain non-GAAP financial measures in addition to results presented in accordance with accounting principles generally accepted in the United States (“GAAP”). These non-GAAP measures provide supplemental perspectives on operating results, performance trends, and financial condition. They are not a substitute for GAAP measures; they should be read and used in conjunction with the Company’s GAAP financial information. In all cases, it should be understood that non-GAAP per share measures do not depict amounts that accrue directly to the benefit of shareholders. The Company utilizes the non-GAAP measure of core earnings, which management believes is useful in evaluating operating trends, including components of core revenue and core expense. Core earnings and its components exclude amounts that the Company views as unrelated to its normalized operations. The Company also reports certain non-GAAP equity measures (including tangible stockholders’ equity, tangible book value per common share and related ratios) that exclude intangible assets from their calculation due to the importance of these non-GAAP measures to the investment community. A reconciliation of non-GAAP financial measures to GAAP measures is included in the accompanying financial tables.

Forward-Looking Statements

This press release contains statements about future events that constitute forward-looking statements within the meaning of the Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements regarding the integration of MNB and the consolidation of the MNB and Bear State Bank charters. Such forward-looking statements may be identified by reference to a future period or periods, or by the use of forward-looking terminology, such as “may,” “will,” “believe,” “anticipate,” “expect,” or similar terms or variations on those terms, or the negative of those terms. Forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, those risks previously disclosed in the Company’s filings with the SEC, general economic conditions, changes in interest rates, regulatory considerations, competition, technological developments, retention and recruitment of qualified personnel, and market acceptance of Bear State Bank’s and MNB’s pricing, products and services, and with respect to the loans extended by Bear State Bank and MNB and real estate owned, market prices of the property securing loans and the costs of collection and sales. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company does not undertake and specifically declines any obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

 
 
 
 
 
BEAR STATE FINANCIAL, INC.
SELECTED CONSOLIDATED FINANCIAL DATA - UNAUDITED
(In thousands, except share data)
                     
September June March December September
2015 2015 2015 2014 2014
 

Balance sheet data, at quarter end:

Commercial real estate - mortgage loans $ 401,044 $ 378,878 $ 388,043 $ 415,155 $ 423,925
Consumer real estate - mortgage loans 309,951 307,183 315,082 320,254 318,508
Farmland 53,192 48,058 50,244 47,199 48,892
Construction and land development 93,688 103,094 100,918 98,594 89,165
Commercial and industrial loans 186,772 185,266 152,913 139,871 149,073
Consumer and other 32,428 32,455 32,613 33,809 33,268
Total loans 1,077,075 1,054,934 1,039,813 1,054,882 1,062,831
Allowance for loan losses (13,975 ) (13,854 ) (13,762 ) (13,660 ) (12,964 )
Investment securities 164,564 182,525 176,599 174,218 190,376
Goodwill 25,717 25,717 25,717 25,717 25,801
Core deposit intangible, net 6,869 7,026 7,182 7,338 7,494
Total assets 1,470,725 1,451,281 1,477,597 1,514,595 1,528,387
Noninterest-bearing deposits 173,525 168,225 176,924 180,136 169,962
Total deposits 1,209,176 1,208,800 1,236,258 1,263,797 1,277,306
Short term borrowings 10,366 3,530 5,576 12,083 12,081
FHLB advances 49,457 41,591 38,936 43,095 49,783
Other borrowings 18,843 18,450 18,706 18,163 19,519
Total stockholders' equity 178,670 174,831 173,128 170,454 165,419
 

Balance sheet data, quarterly averages:

Total loans $ 1,077,500 $ 1,059,235 $ 1,045,946 $ 1,059,636 $ 1,045,076
Investment securities 180,831 189,285 183,857 183,735 213,813
Total earning assets 1,294,619 1,294,523 1,325,125 1,350,646 1,309,259
Goodwill 25,717 25,717 25,717 25,773 25,612
Core deposit intangible, net 6,972 7,127 7,284 7,441 7,773
Total assets 1,466,342 1,468,521 1,504,716 1,525,455 1,493,527
Noninterest-bearing deposits 176,219 173,248 175,457 178,286 170,310
Interest-bearing deposits 1,036,330 1,055,200 1,072,255 1,106,867 1,096,212
Total deposits 1,212,549 1,228,448 1,247,712 1,285,153 1,266,522
Short term borrowings 6,166 4,481 11,902 11,992 14,763
FHLB Advances 47,614 38,625 50,206 37,942 47,559
Other borrowings 18,641 18,564 18,482 19,552 14,675
Total stockholders' equity 177,824 175,025 172,811 166,793 145,737
 

Statement of operation data for the three months ended:

Interest income $ 13,749 $ 13,523 $ 14,106 $ 14,945 $ 16,223
Interest expense   1,529         1,563         1,528     1,627     1,567  
Net interest income 12,220 11,960 12,578 13,318 14,656
Provision for loan losses   331         300         300     758     600  
Net interest income after provision for loan losses 11,889 11,660 12,278 12,560 14,056
Noninterest income 3,318 3,397 3,111 3,382 3,631
Noninterest expense   10,465         11,273         12,237     11,387     15,324  
Income before taxes 4,742 3,784 3,152 4,555 2,363
Income tax expense   1,529         1,253         885     (259 )   (20,312 )
Net income $ 3,213       $ 2,531       $ 2,267   $ 4,814   $ 22,675  
 
 
 
 
 
 
BEAR STATE FINANCIAL, INC.
SELECTED CONSOLIDATED FINANCIAL DATA - UNAUDITED
(In thousands, except share data)
             
September June March December September
2015 2015 2015 2014 2014
 

Common stock data:

Core earnings per share, diluted $ 0.10 $ 0.09 $ 0.08 $ 0.10 $ 0.12
Net income per share, diluted $ 0.10 $ 0.08 $ 0.07 $ 0.14 $ 0.68
Tangible book value per share $ 4.38 $ 4.26 $ 4.20 $ 4.12 $ 3.96
Book value per share $ 5.36 $ 5.24 $ 5.19 $ 5.11 $ 4.96
Diluted weighted average shares outstanding 33,497,298 33,521,490 33,551,776 33,508,230 33,432,486
End of period shares outstanding 33,349,512 33,375,753 33,375,753 33,365,845 33,366,345
 

Profitability and performance ratios:

Core return on average assets 0.90 % 0.79 % 0.76 % 0.89 % 1.09 %
Return on average assets 0.87 % 0.69 % 0.61 % 1.25 % 6.02 %
Core return on average equity 7.41 % 6.65 % 6.58 % 8.16 % 11.12 %
Core return on average tangible equity 9.07 % 8.18 % 8.14 % 10.19 % 14.42 %
Return on average equity 7.17 % 5.80 % 5.32 % 11.45 % 61.73 %
Net interest margin 3.74 % 3.71 % 3.85 % 3.91 % 4.44 %
Noninterest income to total revenue 21.35 % 22.12 % 19.83 % 20.25 % 19.86 %
Noninterest income to average assets 0.90 % 0.93 % 0.84 % 0.88 % 0.96 %
Noninterest expense to average assets 2.83 % 3.08 % 3.30 % 2.96 % 4.07 %
Efficiency ratio(1) 66.24 % 69.51 % 71.88 % 66.54 % 61.02 %
Average loans to average deposits 88.86 % 86.23 % 83.83 % 82.45 % 82.52 %
Securities to total assets 11.19 % 12.58 % 11.95 % 11.50 % 12.46 %
 

Asset quality ratios:

Allowance for loan losses to total loans 1.30 % 1.31 % 1.32 % 1.29 % 1.22 %
Allowance for loan losses to non-performing loans 83.18 % 134.94 % 138.60 % 139.82 % 136.79 %
Nonperforming loans to total loans 1.56 % 0.97 % 0.95 % 0.93 % 0.89 %
Nonperforming assets to total assets 1.30 % 0.94 % 0.99 % 0.96 % 0.98 %
Annualized net charge offs to average total loans 0.08 % 0.08 % 0.08 % 0.22 % 0.01 %
 

Regulatory capital ratios:

Tier 1 leverage ratio 9.83 % 9.54 % 8.96 % 8.29 % 8.11 %
Common equity tier 1 capital ratio

11.77

% 11.59 % 11.39 % N/A N/A
Tier 1 capital to risk weighted assets

11.77

% 11.59 % 11.39 % 10.89 % 10.31 %
Total capital to risk weighted assets

12.94

% 12.77 % 12.58 % 12.11 % 11.45 %
 
(1) Efficiency ratio is a non-GAAP ratio that is calculated by dividing core noninterest expense by the sum of net interest income and noninterest income. Other companies may define and calculate this data differently.
 
 
 
 
 
 

BEAR STATE FINANCIAL, INC.CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - UNAUDITED(In thousands, except share data)

 
 
ASSETS      

September 30,

2015

   

December 31,

2014

 
Cash and cash equivalents $ 58,746 $ 113,086
Interest-bearing time deposits in banks 10,930 12,421
Investment securities available for sale 164,564 174,218
Other investment securities, at cost 8,197 5,864
Loans receivable, net of allowance of $13,975 and $13,660, respectively 1,063,100 1,041,222
Loans held for sale 8,032 6,409
Accrued interest receivable 5,020 4,485
Real estate owned - net 2,290 4,792
Office properties and equipment - net 51,768 50,332
Cash surrender value of life insurance 45,998 44,130
Goodwill 25,717 25,717
Core deposit intangible - net 6,869 7,338
Deferred tax asset, net 17,121 20,697
Prepaid expenses and other assets   2,373   3,884
 
TOTAL $ 1,470,725 $ 1,514,595
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
LIABILITIES:
Noninterest bearing deposits $ 173,525 $ 180,136
Interest bearing deposits   1,035,651   1,083,661
Total deposits 1,209,176 1,263,797
Short term borrowings 10,366 12,083
Other borrowings 68,300 61,258
Other liabilities   4,213   7,003
 
Total liabilities   1,292,055   1,344,141
 
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.01 par value—5,000,000 shares authorized; none issued at September 30, 2015 and December 31, 2014 -- --
Common stock, $0.01 par value—100,000,000 shares authorized; 33,349,512 and 33,365,845 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively 333 334
Additional paid-in capital 169,570 169,543
Accumulated other comprehensive income 753 577
Retained earnings   8,014   --
 
Total stockholders’ equity   178,670   170,454
 
TOTAL $ 1,470,725 $ 1,514,595
 
 
 
 
 
 

BEAR STATE FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except earnings per share)
(Unaudited)
 
      Three Months Ended     Nine Months Ended
September 30,     September 30, September 30,     September 30,
2015 2014 2015 2014
INTEREST INCOME:
Loans receivable $ 12,829 $ 15,390 $ 38,610 $ 25,381
Investment securities:
Taxable 337 272 979 777
Nontaxable 516 456 1,546 1,069
Other   67     105     243     321  
Total interest income   13,749     16,223     41,378     27,548  
 
INTEREST EXPENSE:
Deposits 1,265 1,320 3,853 3,174
Other borrowings   264     247     767     334  
 
Total interest expense   1,529     1,567     4,620     3,508  
 
NET INTEREST INCOME 12,220 14,656 36,758 24,040
 
PROVISION FOR LOAN LOSSES   331     600     931     830  
 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES   11,889     14,056     35,827     23,210  
 
NONINTEREST INCOME:
Net gain on sales of investment securities -- 30 88 30
Deposit fee income 1,926 1,956 5,569 3,445
Earnings on life insurance policies 357 349 1,096 758
Gain on sale of loans 833 968 2,359 1,923
Other   202     328     715     497  
 
Total noninterest income   3,318     3,631     9,827     6,653  
 
NONINTEREST EXPENSES:
Salaries and employee benefits 5,518 6,261 17,521 15,864
Net occupancy expense 1,475 1,569 4,273 2,850
Real estate owned, net (341 ) 650 (431 ) 1,458
Amortization of intangible assets 156 157 469 183
Data processing 1,103 4,177 3,814 5,159
Professional fees 133 213 616 644
Advertising and public relations 510 494 1,764 795
Postage and supplies 244 263 809 466
Other   1,667     1,540     5,138     3,264  
 
Total noninterest expenses   10,465     15,324     33,973     30,683  
 
INCOME (LOSS) BEFORE INCOME TAXES 4,742 2,363 11,681 (820 )
 
INCOME TAX PROVISION (BENEFIT)   1,529     (20,312 )   3,667     (20,312 )
 
NET INCOME $ 3,213   $ 22,675   $ 8,014   $ 19,492  
 
Basic earnings per common share $ 0.10   $ 0.68   $ 0.24   $ 0.73  
 
Diluted earnings per common share $ 0.10   $ 0.68   $ 0.24   $ 0.71  
 
 
 
 
 
 

BEAR STATE FINANCIAL, INC.AVERAGE CONSOLIDATED BALANCE SHEETS and NET INTEREST ANALYSIS - UNAUDITED(In thousands)

 
 

 

      Three Months Ended September 30,
2015     2014
Average

Balance

    Interest     Average

Yield/

Cost

Average

Balance

    Interest     Average

Yield/

Cost

(Dollars in Thousands)
Interest-earning assets:
Loans receivable(1) $ 1,077,500 $ 12,829 4.72 % $ 1,045,076 $ 15,390 5.84 %
Investment securities(2) 180,831 853 1.87 213,813 728 1.35
Other interest-earning assets   36,288   67 0.73   50,370   105 0.83

Total interest-earning assets

1,294,619 13,749 4.21 1,309,259 16,223 4.92
Noninterest-earning assets   171,723   184,268
Total assets $ 1,466,342 $ 1,493,527
Interest-bearing liabilities:
Deposits $ 1,036,330 1,265 0.48 $ 1,096,212 1,320 0.48
Other borrowings   72,421   264 1.45   76,997   247 1.27
Total interest-bearing liabilities 1,108,751 1,529 0.55 1,173,209 1,567 0.53
Noninterest-bearing deposits 176,219 170,310
Noninterest-bearing liabilities   3,548   4,271
Total liabilities 1,288,518 1,347,790
Stockholders' equity   177,824   145,737

Total liabilities and stockholders' equity

$ 1,466,342 $ 1,493,527
   
Net interest income $ 12,220 $ 14,656
Net earning assets $ 185,868 $ 136,050
Interest rate spread 3.66 % 4.39 %
Net interest margin 3.74 % 4.44 %

Ratio of interest-earning assets to Interest-bearing liabilities

116.76 % 111.60 %
 
 
 
Nine Months Ended September 30,
2015 2014
Average

Balance

Interest Average

Yield/

Cost

Average

Balance

Interest Average

Yield/

Cost

(Dollars in Thousands)
Interest-earning assets:
Loans receivable(1) $ 1,062,552 $ 38,610 4.86 % $ 653,780 $ 25,381 5.19 %
Investment securities(2) 184,648 2,525 1.83 131,157 1,846 1.88
Other interest-earning assets   58,988   243 0.55   51,728   321 0.83
Total interest-earning assets 1,306,188 41,378 4.24 836,665 27,548 4.40
Noninterest-earning assets   173,547   99,541
Total assets $ 1,479,735 $ 936,206
Interest-bearing liabilities:
Deposits $ 1,054,412 3,853 0.49 $ 715,593 3,174 0.59
Other borrowings   71,530   767 1.43   32,971   334 1.35
Total interest-bearing liabilities 1,125,942 4,620 0.55 748,564 3,508 0.63
Noninterest-bearing deposits 175,028 83,145
Noninterest-bearing liabilities   3,508   3,326
Total liabilities 1,304,478 835,035
Stockholders' equity   175,257   101,171

Total liabilities and stockholders' equity

$ 1,479,735 $ 936,206
   
Net interest income $ 36,758 $ 24,040
Net earning assets $ 180,246 $ 88,101
Interest rate spread 3.69 % 3.78 %
Net interest margin 3.76 % 3.84 %

Ratio of interest-earning assets to Interest-bearing liabilities

116.01 % 111.77 %

(1) Includes nonaccrual loans.

(2) Includes FHLB and FRB stock.

 
 
 
 
 
 

BEAR STATE FINANCIAL, INC.ASSET QUALITY ANALYSIS - UNAUDITED(In thousands)

 
    September 30, 2015   December 31, 2014  

Net (2)

 

% Total

Assets

Net (2)

 

% Total

Assets

Increase

(Decrease)

Nonaccrual Loans:
One- to four-family residential $ 5,698 0.39 % $ 4,959 0.33 % $ 739
Nonfarm nonresidential 6,023 0.41 % 3,113 0.21 % 2,910
Farmland 735 0.05 % 734 0.05 % 1
Construction and land development 682 0.04 % 624 0.04 % 58
Commercial 3,518 0.24 % 306 0.02 % 3,212
Consumer   144 0.01 %   34 --     110  
 
Total nonaccrual loans 16,800 1.14 % 9,770 0.65 % 7,030
 
Accruing loans 90 days or more past due -- -- 353 0.02 % (353 )
 
Real estate owned   2,290 0.16 %   4,792 0.31 %   (2,502 )
 
Total nonperforming assets 19,090 1.30 % 14,915 0.98 % 4,175
Performing restructured loans   287 0.02 %   566 0.04 %   (279 )
 
Total nonperforming assets and performing restructured loans (1) $ 19,377 1.32 % $ 15,481 1.02 % $ 3,896  
 

(1) The table does not include substandard loans which were judged not to be impaired totaling $18.1 million at September 30, 2015 and $24.9 million at December 31, 2014 or acquired ASC 310-30 purchased credit impaired loans which are considered performing at September 30, 2015.

(2) Loan balances are presented net of undisbursed loan funds, partial charge-offs and interest payments recorded as reductions in principal balances for financial reporting purposes.

 
 
 
 
 
 
BEAR STATE FINANCIAL, INC.
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS' EQUITY - UNAUDITED
(In thousands)
 
      For the Quarter Ending
9/30/2015     6/30/2015     3/31/2015     12/31/2014     9/30/2014
Net income available to common stockholders $ 3,213   $ 2,531   $ 2,267   $ 4,814   $ 22,675  
Average common stockholders' equity 177,824 175,025 172,811 166,793 145,737
Less Average Intangible Assets:
Goodwill (25,717 ) (25,717 ) (25,717 ) (25,773 ) (25,612 )
Core Deposit Intangible, net of accumulated amortization   (6,972 )   (7,127 )   (7,284 )   (7,441 )   (7,773 )
 
Average tangible common stockholders' equity $ 145,135   $ 142,181   $ 139,810   $ 133,579   $ 112,352  
 
Annualized return on average tangible common stockholders' equity   8.8 %   7.1 %   6.6 %   14.3 %   80.1 %
 
 
 
 
BEAR STATE FINANCIAL, INC.
CALCULATION OF RATIO OF TANGIBLE BOOK VALUE PER COMMON SHARE - UNAUDITED
(In thousands, except share data)
 
For the Period Ending
9/30/2015 6/30/2015 3/31/2015 12/31/2014 9/30/2014
Total common stockholder's equity 178,670 174,831 173,128 170,454 165,419
Less intangible assets:
Goodwill (25,717 ) (25,717 ) (25,717 ) (25,717 ) (25,801 )
Core Deposit Intangible, net of accumulated amortization   (6,869 )   (7,026 )   (7,182 )   (7,338 )   (7,494 )
Total intangibles   (32,586 )   (32,743 )   (32,899 )   (33,055 )   (33,295 )
Total tangible common stockholder's equity $ 146,084   $ 142,088   $ 140,229   $ 137,399   $ 132,124  
 
Common Shares Outstanding   33,350     33,376     33,376     33,366     33,366  
 
Tangible book value per common share $ 4.38   $ 4.26   $ 4.20   $ 4.12   $ 3.96  
 
 
 
 
 
 
BEAR STATE FINANCIAL, INC.
RECONCILIATION OF NON-GAAP SELECTED CONSOLIDATED FINANCIAL DATA - UNAUDITED
(In thousands, except share data)
 
    As of and for the quarter ended
September 30,     June 30,     March 31,     December 31,     September 30,
2015 2015 2015 2014 2014
Net income (loss) $ 3,213 $ 2,531 $ 2,267 $ 4,814 $ 22,675
Adj: Gain on sale of securities, net - - (88 ) (1 ) (30 )
Adj: Merger, acquisition and integration expenses 166 441 565 55 477
Adj: Rebranding expenses 6 158 395 219
Adj: Pension plan payment
Adj: Real estate owned provision - - - - 653
Adj. Data processing termination fees 3,035
Adj: Deferred tax asset valuation allowance reversal (1,550 ) (21,142 )
Tax Effect of Adjustments         (66 )       (229 )       (334 )       (105 )       (1,583 )
Total core income   (A)   $ 3,319       $ 2,901       $ 2,805       $ 3,432       $ 4,085  
 
Total revenue $ 15,538 $ 15,357 $ 15,689 $ 16,700 $ 18,287
Adj: Gain on sale of securities, net         -         -         (88 )       (1 )       (30 )
Total core revenue       $ 15,538       $ 15,357       $ 15,601       $ 16,699       $ 18,257  
 
Total non-interest expense $ 10,465 $ 11,273 $ 12,237 $ 11,387 $ 15,324
Less: Merger, acquisition and integration expenses (166 ) (441 ) (565 ) (55 ) (477 )
Less: Rebranding Expenses (6 ) (158 ) (395 ) (219 ) -
Less: Pension plan payment - - - - -
Less: Real estate owned provision - - - - (653 )
Less: Data processing termination fees         -         -         -         -         (3,035 )
Core noninterest expense       $ 10,293       $ 10,674       $ 11,277       $ 11,113       $ 11,159  
 
Total average assets (B) $ 1,466,342 $ 1,468,521 $ 1,504,716 $ 1,525,455 $ 1,493,527
Total average stockholders' equity (C) 177,824 175,025 172,811 166,793 145,737
Total average tangible stockholders' equity (D) 145,135 142,181 139,810 133,579 112,352
Total tangible stockholders' equity, period end (E) 146,084 142,088 140,229 137,399 132,124
 
Total common shares outstanding, period-end (F) 33,349,512 33,375,753 33,375,753 33,365,845 33,366,345
Average diluted shares outstanding (G) 33,497,298 33,521,490 33,551,776 33,508,230 33,432,486
 
Core earnings per share, diluted (A/G) 0.10 0.09 0.08 0.10 $ 0.12
Tangible book value per share, period-end (E/F) $ 4.38 $ 4.26 $ 4.20 $ 4.12 $ 3.96
 
Core return on average assets (A/B) 0.90 % 0.79 % 0.76 % 0.89 % 1.09 %
Core return on average equity (A/C) 7.41 % 6.65 % 6.58 % 8.16 % 11.12 %
Core return on average tangible equity (A/D) 9.07 % 8.18 % 8.14 % 10.19 % 14.42 %
Efficiency ratio(1) 66.24 % 69.51 % 71.88 % 66.54 % 61.02 %
 

(1) Efficiency ratio is a non-GAAP ratio that is calculated by dividing core noninterest expense by the sum of net interest income and noninterest income. Other companies may define and calculate this data differently.

 
 
 
 

Bear State Financial, Inc.
Mark McFatridge, CEO, 501-975-6011
or
Matt Machen, CFO, 501-975-6011

Source: Bear State Financial, Inc.


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