FINANCIAL HIGHLIGHTS:
- Second quarter 2017 GAAP net income
was $6.7 million, a 47% increase from $4.5 million for the second
quarter of 2016. Diluted earnings per common share for the second
quarter of 2017 was $0.18, a 50% increase from $0.12 for the second
quarter of 2016.
- Second quarter 2017 core earnings
were $6.3 million, a 53% increase from $4.1 million for the second
quarter of 2016. Diluted core earnings per common share for the
second quarter of 2017 was $0.17, a 55% increase from $0.11 for the
second quarter of 2016.
- The Company’s efficiency ratio
improved to 55% in the second quarter of 2017 compared to 72% in
the second quarter of 2016. Further, the Company’s core efficiency
ratio improved to 56% in the second quarter of 2017 compared to 68%
in the second quarter of 2016.
- Net interest income increased 12%
for the second quarter of 2017 compared to the second quarter of
2016 primarily due to loan portfolio growth of 12% year over
year.
- The ratio of nonperforming assets to
total assets improved to 0.78% at June 30, 2017, compared to 1.08%
at June 30, 2016.
- Book value per common share was
$6.48 at June 30, 2017, a 7% increase from $6.08 at June 30, 2016.
Tangible book value per common share was $5.16 at June 30, 2017, a
9% increase from $4.72 at June 30, 2016.
Bear State Financial, Inc. (the “Company”) (NASDAQ:BSF), today
reported earnings of $6.7 million and earnings per diluted common
share of $0.18 in the second quarter of 2017, compared to earnings
of $4.5 million or $0.12 per diluted common share in the second
quarter of 2016. Core earnings for the second quarter of 2017 were
$6.3 million or $0.17 per diluted common share compared to core
earnings of $4.1 million or $0.11 per diluted common share in the
second quarter of 2016.
The Company experienced record revenue of $23.4 million in the
second quarter of 2017, which is an increase of 12% compared to the
second quarter of 2016. Net interest income increased 12% for the
second quarter of 2017 compared to the second quarter of 2016
primarily due to loan portfolio growth. Noninterest income
increased 9% for the second quarter of 2017 compared to the second
quarter of 2016 primarily due to increases in earnings on life
insurance and deposit fee income.
Along with revenue growth, the Company continued to focus on
operational efficiency as evidenced by the decrease in noninterest
expense of 15% for the second quarter of 2017 compared to the
second quarter of 2016, resulting in an improvement in the
Company’s efficiency ratio to 55% in the second quarter of 2017
compared to 72% in the second quarter of 2016. Further, the
Company’s core efficiency ratio improved to 56% in the second
quarter of 2017 compared to 68% in the second quarter of 2016.
During the second quarter of 2017, the Company transitioned two
branch locations to operate using personalized technology with
Interactive ATMs (“ITMs”) only.
FINANCIAL CONDITION
Total assets were $2.24 billion at June 30, 2017, a 12% increase
compared to $1.99 billion at June 30, 2016. The increase in total
assets was primarily due to increases in investment securities and
loans. Total loans were $1.66 billion at June 30, 2017, an increase
of $175.7 million, or 12% compared to June 30, 2016, and investment
securities were $254.0 million at June 30, 2017, an increase of
$61.4 million, or 32% compared to June 30, 2016. Total deposits
were $1.70 billion at June 30, 2017, a 4% increase compared to
$1.64 billion at June 30, 2016.
Total stockholders’ equity was $244.5 million at June 30, 2017,
a 7% increase from $228.5 million at June 30, 2016. Tangible common
stockholders’ equity was $194.5 million at June 30, 2017, a 10%
increase from $177.5 million at June 30, 2016. Book value per
common share was $6.48 at June 30, 2017, a 7% increase from $6.08
at June 30, 2016. Tangible book value per common share was $5.16 at
June 30, 2017, a 9% increase from $4.72 at June 30, 2016. The
Company’s ratio of total stockholders’ equity to total assets
decreased to 10.92% at June 30, 2017, compared to 11.48% at June
30, 2016. The calculation of the Company’s tangible book value per
common share and 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
The Company recognized second quarter 2017 net income of $6.7
million or $0.18 per diluted common share compared to net income of
$4.5 million or $0.12 per diluted common share in the second
quarter of 2016, resulting in a return on average assets of 1.22%
in the second quarter of 2017, compared to 0.94% in the second
quarter of 2016. Calculation of net income in accordance with GAAP
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 Company reports core earnings, which is a non-GAAP
financial measure that the Company defines as GAAP net income less
non-core items. The reconciliation of GAAP net income to core
earnings together with related financial measures and ratios is
included in the schedules accompanying this release.
Second quarter 2017 core earnings totaled $6.3 million or $0.17
per diluted common share, compared to core earnings of $4.1 million
or $0.11 per diluted common share in the second quarter of 2016.
The core return on average assets measured 1.15% and 0.84%, core
return on average equity measured 10.36% and 7.23% and core return
on average tangible equity measured 13.07% and 9.34%, each for the
second quarters of 2017 and 2016, respectively. Non-core items
during the second quarter of 2017 included a claim on bank owned
life insurance of $395,000, gain on sales of investments of $37,000
and branch restructure expenses of $29,000. The effect of non-core
items, net of taxes, increased GAAP net income by approximately
$400,000 for the second quarter of 2017.
Net interest income for the second quarter of 2017 was $18.7
million compared to $16.6 million for the same period in 2016.
Interest income for the second quarter of 2017 was $21.2 million
compared to $18.5 million for the same period in 2016. The increase
in interest income for the quarter ended June 30, 2017, compared to
2016 was primarily related to an increase in the average balances
of loans receivable and investment securities and an increase in
the yield earned on investment securities. Interest expense for the
second quarter of 2017 was $2.5 million compared to $1.9 million
for the same period in 2016. The increase in interest expense for
the second quarter of 2017 compared to the same period in 2016 was
primarily due to an increase in the average balance of borrowings
and an increase in the average rate paid on deposits, partially
offset by a decrease in the average rate paid on borrowings.
Net interest margin measured 3.76% for the second quarter of
2017, compared to 3.86% for the same period in 2016. The average
yield on interest-earning assets for the second quarter of 2017 was
4.26% compared to 4.31% for the same period in 2016. The average
cost of interest-bearing liabilities increased to 0.58% for the
second quarter of 2017, compared to 0.52% for the same period in
2016.
Noninterest income is generated primarily through deposit
account fee income, profit on sale of mortgage loans, and earnings
on life insurance policies. Total noninterest income for the three
months ended June 30, 2017, increased to $4.7 million from $4.3
million for the same period in 2016, a 9% increase. The increases
in the three month comparison period was primarily due to increases
in deposit fee income and earnings on bank owned life
insurance.
Total noninterest expense decreased $2.2 million, or 15%, for
the second quarter of 2017 compared to the second quarter of 2016.
The decrease in total noninterest expense for the three month
comparative period was primarily related to the Company’s efforts
to improve its operational efficiency as well as a decrease in the
number of branches and transitioning of three branches to operate
solely with ITMs.
Income tax provision increased by $2.2 million, or 263%, for the
second quarter of 2017 compared to the second quarter of 2016. The
increase in income tax provision was primarily due to an increase
in taxable income in the second quarter of 2017 partially offset by
the recording of a valuation allowance reversal of $897,000 on
deferred tax assets in the second quarter of 2016. The Company’s
effective tax rate for the quarter ended June 30, 2017, was 31.6%
compared to 15.7% for the quarter ended June 30, 2016.
ASSET QUALITY
The ratio of nonperforming assets to total assets decreased to
0.78% at June 30, 2017, compared to 1.08% at June 30, 2016. The
allowance for loan losses represented 1.03% of total loans at June
30, 2017, compared to 0.99% at June 30, 2016. The ratio of the
allowance for loan losses to nonperforming loans was 104% at June
30, 2017, compared to 76% at June 30, 2016. Annualized net
charge-offs as a percentage of average loans for the quarter ended
June 30, 2017, was 0.14% compared to 0.17% for the quarter ended
June 30, 2016. Provision for loan losses increased from $533,000
for the second quarter of 2016 to $821,000 for the second quarter
of 2017. The increase in the provision was primarily attributable
to loan originations and migration of acquired loans from the
purchased loan portfolio to the originated loan portfolio.
About Bear State Financial, Inc.
Bear State Financial, Inc. is the parent company for Bear State
Bank. Bear State Financial, Inc. 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 subsidiary, Bear State Bank, is a community oriented
financial institution providing a broad line of financial products
to individuals and business customers. Bear State Bank operates 42
branches, three personalized technology centers equipped with
interactive teller machines and three loan production offices
throughout Arkansas, Southwest Missouri and Southeast Oklahoma.
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 and 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 from period to period, 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. Management and the Board of Directors also
utilize core earnings or components of core earnings and related
ratios in the preparation of the Company’s operating budgets,
monthly financial performance reporting and investor presentations
of Company performance and in the calculation of annual
performance-based incentives for certain members of management. In
2016, the Company modified its definition of core earnings to
clarify that a material amount of net gains, losses or impairments
to the Company’s real estate owned (“REO”) portfolio during an
applicable reporting period will be considered a non-core item and
will thus be excluded from core earnings. Immaterial net gains,
losses and impairments to the REO portfolio, however, will not be
considered a non-core item and will not be excluded from core
earnings. The Company believes that while activity within the REO
portfolio is a recurring aspect of its core business, material
changes to the portfolio are not indicative of the Company’s
normalized banking 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. Management believes that these non-GAAP
tangible measures provide additional useful information about the
capital strength of the Company to the investment community, as
these measures are widely used by industry analysts for banks and
bank holding companies with prior merger and acquisition activity.
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 Section
27A of the Securities Act of 1933, as amended and Section 21E of
the Securities Exchange Act of 1934, as amended. 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,” “plan,” “intend,”
“anticipate,” “expect,” or similar terms or variations of 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 pricing,
products and services, and with respect to the loans extended by
Bear State Bank 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)
June March
December September June 2017
2017 2016 2016 2016
Balance sheet
data, at quarter end:
Commercial real estate - mortgage loans $ 632,149 $ 604,888 $
587,633 $ 566,302 $ 557,612 Consumer real estate - mortgage loans
396,550 397,898 389,107 385,126 390,066 Farmland 97,881 98,672
94,018 94,187 92,452 Construction and land development 131,046
129,078 125,785 119,433 124,369 Commercial and industrial loans
364,194 370,961 323,096 312,957 281,874 Consumer and other 36,624
36,100 36,265 36,645 36,339 Total loans 1,658,444 1,637,597
1,555,904 1,514,650 1,482,712 Loans held for sale 7,470 4,735 8,954
13,995 15,168 Allowance for loan losses (17,083 ) (16,821 ) (15,584
) (15,112 ) (14,751 ) Investment securities 275,805 268,981 229,212
209,508 204,236 Goodwill 40,196 40,196 40,196 40,196 40,196 Core
deposit intangible, net 9,842 10,098 10,353 10,608 10,863 Total
assets 2,239,090 2,174,041 2,053,175 2,007,938 1,990,715
Noninterest-bearing deposits 255,806 221,891 223,038 239,831
255,648 Total deposits 1,703,246 1,669,066 1,644,080 1,653,523
1,641,250 Short term borrowings 17,856 17,831 19,114 13,511 14,964
FHLB advances 254,928 225,072 129,992 80,138 75,282 Other
borrowings 11,600 13,506 22,012 22,518 22,900 Total stockholders'
equity 244,533 237,912 233,427 232,403 228,534
Balance sheet
data, quarterly averages:
Total loans $ 1,659,830 $ 1,607,892 $ 1,536,703 $ 1,522,106 $
1,492,504 Investment securities 271,402 248,355 217,522 202,868
188,808 Total earning assets 1,990,562 1,886,813 1,810,802
1,768,892 1,724,381 Goodwill 40,196 40,196 40,196 40,196 40,196
Core deposit intangible, net 10,008 10,265 10,519 10,775 11,030
Total assets 2,190,240 2,092,022 2,019,792 1,981,582 1,937,722
Noninterest-bearing deposits 220,511 213,467 229,296 239,886
215,766 Interest-bearing deposits 1,435,630 1,414,137 1,416,991
1,395,501 1,394,262 Total deposits 1,656,141 1,627,604 1,646,287
1,635,387 1,610,028 Short term borrowings 15,463 15,549 17,983
13,699 11,991 FHLB advances 258,658 190,965 94,336 73,418 64,494
Other borrowings 11,898 16,247 22,161 22,634 22,982 Total
stockholders' equity 242,263 236,247 234,339 231,758 226,587
Statement of
income data for the three months ended:
Interest income $ 21,153 $ 21,048 $ 19,212 $ 18,849 $ 18,535
Interest expense 2,496 2,214
2,105 2,014 1,935 Net interest
income 18,657 18,834 17,107 16,835 16,600 Provision for loan losses
821 1,349 851 643
533 Net interest income after provision for
loan losses 17,836 17,485 16,256 16,192 16,067 Noninterest income
4,694 4,176 4,394 4,333 4,311 Noninterest expense 12,795
14,444 13,625 13,400
14,989 Income before taxes 9,735 7,217 7,025
7,125 5,389 Income tax provision 3,078 2,300
2,192 2,384 847
Net income $ 6,657 $ 4,917 $ 4,833 $ 4,741
$ 4,542
BEAR STATE FINANCIAL, INC. SELECTED CONSOLIDATED
FINANCIAL DATA – UNAUDITED June
March December September June
2017 2017 2016 2016 2016
Common stock
data:
Net income per share, diluted $ 0.18 $ 0.13 $ 0.13 $ 0.13 $ 0.12
Core earnings per share, diluted $ 0.17 $ 0.15 $ 0.13 $ 0.11 $ 0.11
Book value per share $ 6.48 $ 6.31 $ 6.21 $ 6.18 $ 6.08 Tangible
book value per share $ 5.16 $ 4.98 $ 4.86 $ 4.83 $ 4.72 Diluted
weighted average shares outstanding 37,883,264 37,880,022
37,833,124 37,807,419 37,772,959 End of period shares outstanding
37,713,171 37,689,939 37,618,597 37,600,986 37,589,543
Profitability and
performance ratios:
Return on average assets 1.22 % 0.95 % 0.95 % 0.95 % 0.94 % Core
return on average assets 1.15 % 1.14 % 0.95 % 0.85 % 0.84 % Return
on average equity 11.02 % 8.44 % 8.18 % 8.12 % 8.04 % Core return
on average equity 10.36 % 10.06 % 8.23 % 7.28 % 7.23 % Core return
on average tangible equity 13.07 % 12.80 % 10.50 % 9.34 % 9.34 %
Net interest margin 3.76 % 4.05 % 3.75 % 3.78 % 3.86 % Noninterest
income to total revenue 20.10 % 18.15 % 20.44 % 20.47 % 20.62 %
Noninterest income to average assets 0.86 % 0.81 % 0.86 % 0.87 %
0.89 % Noninterest expense to average assets 2.34 % 2.80 % 2.68 %
2.68 % 3.10 % Efficiency ratio 54.79 % 62.77 % 63.37 % 63.30 %
71.68 % Core efficiency ratio(1) 55.70 % 56.00 % 63.18 % 66.99 %
68.29 % Average loans to average deposits 100.22 % 98.79 % 93.34 %
93.07 % 92.70 % Securities to total assets 12.32 % 11.52 % 10.49 %
9.84 % 9.67 %
Asset quality
ratios:
Allowance for loan losses to total loans 1.03 % 1.03 % 1.00 % 1.00
% 0.99 % Allowance for loan losses to non-performing loans 104.00 %
94.20 % 89.69 % 86.41 % 76.42 % Nonperforming loans to total loans
0.99 % 1.09 % 1.12 % 1.15 % 1.30 % Nonperforming assets to total
assets 0.78 % 0.87 % 0.94 % 0.95 % 1.08 % Annualized net charge
offs to average total loans (2) 0.14 % 0.03 % 0.10 % 0.07 % 0.17 %
Regulatory
capital ratios:
Tier 1 leverage ratio 9.18 % 9.27 % 9.47 % 9.37 % 9.30 % Common
equity tier 1 capital ratio 10.85 % 10.58 % 11.04 % 11.00 % 10.78 %
Tier 1 capital to risk weighted assets 10.85 % 10.58 % 11.04 %
11.00 % 10.78 % Total capital to risk weighted assets 11.80 % 11.51
% 11.96 % 11.92 % 11.69 %
(1) Core efficiency ratio is a non-GAAP
ratio that is calculated by dividing core noninterest expense by
total core revenue (the sum of net interest income and core
noninterest income). Other companies may define and
calculate this data differently.
(2) The quarter ending June 30, 2016,
included a charge-off on a purchased credit impaired loan amounting
to 0.13% of average total loans.
BEAR STATE FINANCIAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In
thousands, except share data) (Unaudited)
June
30, December 31, 2017 2016 ASSETS
Cash and cash equivalents $ 125,153 $ 78,789 Interest-bearing time
deposits in banks 4,324 4,571 Investment securities: Available for
sale securities, at fair value 211,038 188,476 Held to maturity
securities, at amortized cost (fair value of $42,332 and $25,090,
respectively) 42,953 26,977 Other investment securities, at cost
21,814 13,759 Loans receivable, net of allowance of $17,083 and
$15,584, respectively 1,641,636 1,540,805 Loans held for sale 7,470
8,954 Accrued interest receivable 7,469 7,006 Real estate owned,
net 1,103 1,945 Office properties and equipment, net 51,943 54,049
Office properties and equipment held for sale 4,948 5,337 Cash
surrender value of life insurance 58,091 57,267 Goodwill 40,196
40,196 Core deposit intangibles, net 9,842 10,353 Deferred tax
asset, net 6,696 11,619 Prepaid expenses and other assets
4,414 3,072 TOTAL $ 2,239,090 $
2,053,175
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES: Noninterest bearing deposits $ 255,806 $
223,038 Interest bearing deposits 1,447,440
1,421,042 Total deposits 1,703,246 1,644,080 Securities sold
under agreement to repurchase 17,856 19,114 Other borrowings
266,528 152,004 Other liabilities 6,927 4,550
Total liabilities 1,994,557
1,819,748 STOCKHOLDERS’ EQUITY:
Preferred stock, $0.01 par value -
5,000,000 shares authorized; none issued at June 30, 2017, or
December 31, 2016
-- --
Common stock, $0.01 par value -
100,000,000 shares authorized; 37,713,171 and 37,618,597 shares
issued and outstanding at June 30, 2017, and December 31, 2016,
respectively
377 376 Additional paid-in capital 209,736 209,274 Accumulated
other comprehensive loss (106 ) (1,436 ) Retained earnings
34,526 25,213 Total stockholders’
equity 244,533 233,427 TOTAL $
2,239,090 $ 2,053,175
BEAR STATE FINANCIAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands,
except earnings per share) (Unaudited)
Three
Months Ended Six Months Ended June 30, June
30, June 30, June 30, 2017 2016
2017 2016 INTEREST INCOME: Loans receivable $ 19,392
$ 17,519 $ 38,871 35,205 Investment securities: Taxable 678 474
1,290 1,010 Nontaxable 940 462 1,823 947 Other 143 80
218 164 Total interest income
21,153 18,535 42,202 37,326
INTEREST EXPENSE: Deposits 1,737 1,608 3,417 3,123 Other
borrowings 759 327 1,293 675
Total interest expense 2,496 1,935
4,710 3,798 NET INTEREST INCOME 18,657
16,600 37,492 33,528 PROVISION FOR LOAN LOSSES 821
533 2,171 1,022 NET
INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 17,836
16,067 35,321 32,506
NONINTEREST INCOME: Net gain (loss) on sales of investment
securities 37 -- 48 (2 ) Deposit fee income 2,513 2,236 4,990 4,387
Earnings on life insurance policies 810 421 1,219 833 Gain on sales
of loans 1,073 1,291 2,068 2,086 Other 261 363
545 682 Total noninterest income
4,694 4,311 8,870 7,986
NONINTEREST EXPENSES: Salaries and employee benefits 6,771 7,857
14,854 16,107 Net occupancy expense 1,684 1,898 3,575 3,825 Real
estate owned, net 101 (27 ) 7 2 FDIC insurance 276 338 526 646
Amortization of intangible assets 255 255 511 511 Data processing
1,525 1,405 2,892 2,839 Professional fees 418 525 1,024 1,133
Advertising and public relations 256 369 552 865 Postage and
supplies 218 325 424 616 Other 1,291 2,044
2,874 3,779 Total noninterest expenses
12,795 14,989 27,239 30,323
INCOME BEFORE INCOME TAXES 9,735 5,389 16,952 10,169
INCOME TAX PROVISION 3,078 847
5,378 2,284 NET INCOME $ 6,657 $ 4,542
$ 11,574 $ 7,885 Basic earnings per common share $
0.18 $ 0.12 $ 0.31 $ 0.21 Diluted earnings per
common share $ 0.18 $ 0.12 $ 0.31 $ 0.21
BEAR STATE FINANCIAL, INC.
AVERAGE CONSOLIDATED BALANCE SHEETS and
NET INTEREST ANALYSIS - UNAUDITED
(Dollars in thousands)
Three Months Ended June 30, 2017 2016
Average Average Average Yield/
Average Yield/ Balance Interest
Cost Balance Interest Cost (Dollars in
Thousands) Interest-earning assets: Loans receivable(1) $ 1,659,830
$ 19,392 4.69 % $ 1,492,504 $ 17,519 4.71 % Investment
securities(2) 271,402 1,618 2.39 188,808 936 1.99 Other
interest-earning assets 59,330 143 0.97 43,069
80 0.75 Total interest-earning assets 1,990,562 21,153 4.26
1,724,381 18,535 4.31 Noninterest-earning assets 199,678
213,341 Total assets $ 2,190,240 $ 1,937,722
Interest-bearing liabilities: Deposits $ 1,435,630 1,737 0.49 $
1,394,262 1,608 0.46 Other borrowings 286,019 759
1.06 99,467 327 1.32 Total interest-bearing
liabilities 1,721,649 2,496 0.58 1,493,729 1,935 0.52
Noninterest-bearing deposits 220,511 215,766 Noninterest-bearing
liabilities 5,817 1,640 Total liabilities 1,947,977
1,711,135 Stockholders' equity 242,263 226,587
Total liabilities and stockholders'
equity
$ 2,190,240 $ 1,937,722 Net interest
income $ 18,657 $ 16,600 Net earning assets $ 268,913 $ 230,652
Interest rate spread 3.68 % 3.79 % Net interest margin 3.76 % 3.86
%
Ratio of interest-earning assets to
Interest-bearing liabilities
115.62 % 115.44 %
Six Months Ended June 30, 2017 2016
Average Average Average Yield/
Average Yield/ Balance Interest
Cost Balance Interest Cost (Dollars in
Thousands) Interest-earning assets: Loans receivable(1) $ 1,634,005
$ 38,871 4.80 % $ 1,476,798 $ 35,205 4.81 % Investment
securities(2) 259,942 3,113 2.41 197,533 1,957 2.00 Other
interest-earning assets 45,029 218 0.98 39,319
164 0.84 Total interest-earning assets 1,938,976 42,202 4.39
1,713,650 37,326 4.39 Noninterest-earning assets 202,427
215,630 Total assets $ 2,141,403 $ 1,929,280
Interest-bearing liabilities: Deposits $ 1,424,943 3,417 0.48 $
1,382,011 3,123 0.46 Other borrowings 254,565 1,293
1.02 100,736 675 1.35 Total interest-bearing
liabilities 1,679,508 4,710 0.57 1,482,747 3,798 0.52
Noninterest-bearing deposits 217,009 218,837 Noninterest-bearing
liabilities 5,615 2,214 Total liabilities 1,902,132
1,703,798 Stockholders' equity 239,271 225,482
Total liabilities and stockholders'
equity
$ 2,141,403 $ 1,929,280 Net interest
income $ 37,492 $ 33,528 Net earning assets $ 259,468 $ 230,903
Interest rate spread 3.82 % 3.87 % Net interest margin 3.90 % 3.95
%
Ratio of interest-earning assets to
Interest-bearing liabilities
115.45 % 115.57 % (1) Includes nonaccrual loans. (2)
Includes FHLB and FRB stock.
BEAR STATE FINANCIAL, INC.
ASSET QUALITY ANALYSIS -
UNAUDITED
(Dollars in thousands)
June 30, 2017
December 31, 2016 % Total % Total
Increase Net (2) Assets Net (2)
Assets (Decrease) Nonaccrual Loans: One- to
four-family residential $ 6,866 0.30 % $ 6,709 0.33 % $ 157
Multifamily 119 0.01 % -- -- 119 Nonfarm nonresidential 7,172 0.31
% 5,177 0.25 % 1,995 Farmland 1,023 0.05 % 783 0.04 % 240
Construction and land development 212 0.01 % 463 0.02 % (251 )
Commercial 844 0.04 % 4,071 0.20 % (3,227 ) Consumer 190
0.01 % 173 0.01 % 17 Total nonaccrual
loans 16,426 0.73 % 17,376 0.85 % (950 ) Accruing loans 90
days or more past due -- -- -- -- -- Real estate owned
1,103 0.05 % 1,945 0.09 % (842 ) Total
nonperforming assets 17,529 0.78 % 19,321 0.94 % (1,792 )
Performing restructured loans 1,194 0.05 % 4,804 0.23
% (3,610 ) Total nonperforming assets and performing
restructured loans (1) $ 18,723 0.83 % $ 24,125 1.17 % $ (5,402 )
(1) The table does not include substandard
loans which were judged not to be impaired totaling $22.8 million
at June 30, 2017, and $30.7 million at December 31, 2016, or
acquired ASC 310-30 purchased credit impaired loans which are
considered performing.
(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
(Dollars in thousands)
For the Quarter Ending
6/30/2017 3/31/2017 12/31/2016
9/30/2016 6/30/2016 Net income available to common
stockholders $ 6,657 $ 4,917 $ 4,833 $ 4,741
$ 4,542 Average common stockholders' equity 242,263
236,247 234,339 231,758 226,587 Less average intangible assets:
Goodwill (40,196 ) (40,196 ) (40,196 ) (40,196 ) (40,196 ) Core
deposit intangible, net of accumulated amortization (10,008
) (10,265 ) (10,519 ) (10,775 ) (11,030
) Average tangible common stockholders' equity $ 192,059
$ 185,786 $ 183,624 $ 180,787 $ 175,361
Annualized return on average tangible
common stockholders' equity
13.9 % 10.7 % 10.4 % 10.4 % 10.4
%
BEAR STATE FINANCIAL, INC.
CALCULATION OF TANGIBLE BOOK VALUE PER
COMMON SHARE - UNAUDITED
(In thousands, except per share data)
For the
Quarter Ending 6/30/2017 3/31/2017
12/31/2016 9/30/2016 6/30/2016 Total common
stockholder's equity $ 244,533 $ 237,912 $ 233,427 $ 232,403 $
228,534 Less intangible assets: Goodwill (40,196 ) (40,196 )
(40,196 ) (40,196 ) (40,196 ) Core deposit intangible, net of
accumulated amortization (9,842 ) (10,098 )
(10,353 ) (10,608 ) (10,863 ) Total intangible assets
(50,038 ) (50,294 ) (50,549 ) (50,804 )
(51,059 ) Total tangible common stockholder's equity $
194,495 $ 187,618 $ 182,878 $ 181,599 $
177,475 Common Shares Outstanding 37,713
37,690 37,619 37,601
37,590 Tangible book value per common
share $ 5.16 $ 4.98 $ 4.86 $ 4.83 $
4.72
BEAR STATE FINANCIAL, INC.
RECONCILIATION OF NON-GAAP SELECTED
CONSOLIDATED FINANCIAL DATA - UNAUDITED
(In thousands, except share data)
For the Quarter
Ending June March December
September June 2017 2017 2016
2016 2016 Net income $ 6,657 $ 4,917 $ 4,833 $ 4,741
$ 4,542 Adj: Loss (gain) on sale of securities, net (37 ) (11 ) --
(21 ) -- Adj: Claim on bank owned life insurance (395 ) -- -- -- --
Adj: Merger, acquisition and integration expenses -- -- -- -- 137
Adj: Branch restructure expense (1) 29 1,565 41 (323 ) 571 Adj: Net
provision/loss/(gain) on real estate owned -- -- -- (444 ) -- Adj:
Deferred tax asset valuation allowance reversal -- -- -- -- (897 )
Tax effect of adjustments (2) 3
(608 ) (16 ) 302
(271 ) Total core earnings (A) $ 6,257
$ 5,863 $ 4,858 $ 4,255
$ 4,082 Total revenue $ 23,351 $ 23,010
$ 21,501 $ 21,168 $ 20,911 Adj: Loss (gain) on sale of securities,
net (37 ) (11 ) -- (21 ) -- Adj: Claim on bank owned life insurance
(395 ) --
-- -- --
Total core revenue $ 22,919 $
22,999 $ 21,501 $ 21,147
$ 20,911 Total non-interest expense $ 12,795 $ 14,444
$ 13,625 $ 13,400 $ 14,989 Adj: Merger, acquisition and integration
expenses -- -- -- -- (137 ) Adj: Branch restructure expense (1) (29
) (1,565 ) (41 ) 323 (571 ) Adj: Net (provision/loss)/gain on real
estate owned -- --
-- 444
-- Total core noninterest expense
$ 12,766 $ 12,879 $ 13,584
$ 14,167 $ 14,281 Total
average assets (B) $ 2,190,240 $ 2,092,022 $ 2,019,792 $ 1,981,582
$ 1,937,722 Total average stockholders' equity (C) 242,263 236,247
234,339 231,758 226,587 Total average tangible stockholders' equity
(D) 192,059 185,786 183,624 180,787 175,361 Total tangible
stockholders' equity, period end (E) 194,495 187,618 182,878
181,599 177,475 Total common shares outstanding, period-end
(F) 37,713,171 37,689,939 37,618,597 37,600,986 37,589,543 Diluted
weighted average shares outstanding (G) 37,883,264 37,880,022
37,833,124 37,807,419 37,772,959 Core earnings per share,
diluted (A/G) $ 0.17 $ 0.15 $ 0.13 $ 0.11 $ 0.11 Tangible book
value per share, period-end (E/F) $ 5.16 $ 4.98 $ 4.86 $ 4.83 $
4.72 Core return on average assets (A/B) 1.15 % 1.14 % 0.95
% 0.85 % 0.84 % Core return on average equity (A/C) 10.36 % 10.06 %
8.23 % 7.28 % 7.23 % Core return on average tangible equity (A/D)
13.07 % 12.80 % 10.50 % 9.34 % 9.34 % Core efficiency ratio(3)
55.70 % 56.00 % 63.18 % 66.99 % 68.29 %
(1) This adjustment primarily consists of
costs associated with properties disposed or held for sale as a
result of branch restructuring, including net (gains) losses on
sales, impairment charges, and other expenses such as accelerated
depreciation. For the quarter ended March 31, 2017, this adjustment
also included severance expense totaling $1.1 million resulting
from branch and other organizational restructure, primarily due to
severance of $0.8 million accrued upon the departure of the former
CEO in January 2017.
(2) The tax effect is calculated at the
Company’s blended statutory rate of 39.14% for adjustments that
impact taxable income for periods in 2017 and 38.29% for periods
ending in 2016.
(3) Core efficiency ratio is a non-GAAP
ratio that is calculated by dividing core noninterest expense by
total core revenue (the sum of net interest income and core
noninterest income). Other companies may define and calculate this
data differently.
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version on businesswire.com: http://www.businesswire.com/news/home/20170727005587/en/
Bear State Financial, Inc.Matt Machen, CEO, 501-975-6033orSherri
Billings, CFO, 501-975-6033
Bear State Financial, Inc. (NASDAQ:BSF)
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