Bear State Financial, Inc. (the “Company”) (NASDAQ: BSF), today reported earnings of $4.8 million and earnings per diluted common share of $0.13 in the fourth quarter of 2016, compared to earnings of $2.6 million or $0.07 per diluted common share in the fourth quarter of 2015. Core earnings for the fourth quarter of 2016 were $4.9 million or $0.13 per diluted common share compared to core earnings of $4.2 million or $0.11 per diluted common share in the fourth quarter of 2015.

For the full year of 2016, net income was $17.5 million and earnings per diluted common share was $0.46 compared to net income of $10.6 million or $0.30 per diluted common share for the full year of 2015. Core earnings for the full year of 2016 were $16.9 million or $0.45 per diluted common share compared to core earnings of $13.0 million or $0.37 per diluted common share for the full year of 2015.

During the first quarter of 2016, the Company integrated Metropolitan National Bank (Springfield, MO) (“MNB”) into Bear State Bank. In addition, the Company consolidated seven branch locations, or 13% of the branch network over the course of the year. The benefits of these operational and organizational efficiencies began to be realized in the second quarter of 2016 as evidenced by the improvement in the Company’s core efficiency ratio to 63% in the fourth quarter of 2016 compared to 67% in the fourth quarter of 2015. Revenue from the profit on sale of mortgage loans increased 56% for the full year of 2016 compared to the full year of 2015 which also contributed to the improvement in the core efficiency ratio.

FINANCIAL CONDITION

Total assets were $2.05 billion at December 31, 2016, a 7% increase compared to $1.92 billion at December 31, 2015. Total loans were $1.56 billion at December 31, 2016, an increase of $97.7 million, or 7% compared to December 31, 2015. Total deposits were $1.64 billion at December 31, 2016, a 2% increase compared to $1.61 billion at December 31, 2015. The increases in total assets and loans were primarily due to an increase in commercial and industrial loans as a result of a greater emphasis on this line of business.

Total stockholders’ equity was $233 million at December 31, 2016, a 5% increase from $223 million at December 31, 2015. Tangible common stockholders’ equity was $183 million at December 31, 2016, a 7% increase from $172 million at December 31, 2015. Book value per common share was $6.21 at December 31, 2016, a 6% increase from $5.87 at December 31, 2015. Tangible book value per common share was $4.86 at December 31, 2016, an 8% increase from $4.52 at December 31, 2015. The Company’s ratio of total stockholders’ equity to total assets decreased to 11.37% at December 31, 2016, compared to 11.62% at December 31, 2015. 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

The Company recognized fourth quarter 2016 net income of $4.8 million or $0.13 per diluted common share compared to net income of $2.6 million or $0.07 per diluted common share in the fourth quarter of 2015, resulting in a return on average assets of 0.95% in the fourth quarter of 2016, compared to 0.53% in the fourth quarter of 2015. 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.

Fourth quarter 2016 core earnings totaled $4.9 million or $0.13 per diluted common share, compared to core earnings of $4.2 million or $0.11 per diluted common share in the fourth quarter of 2015. The core return on average assets measured 0.95% and 0.86%, core return on average equity measured 8.23% and 7.41% and core return on average tangible equity measured 10.50% and 9.65%, each for the fourth quarters of 2016 and 2015, respectively. Non-core items during the fourth quarter of 2016 included net branch restructuring expense of $41,000. The effect of non-core items, net of taxes, increased GAAP net income by approximately $25,000 for the fourth quarter of 2016.

Net interest income for the fourth quarter of 2016 was $17.1 million compared to $17.7 million for the same period in 2015. Net interest income for the year ended December 31, 2016 was $67.5 million, compared to $54.5 million for the same period in 2015. Interest income for the fourth quarter of 2016 was $19.2 million compared to $19.5 million for the same period in 2015. Interest income for the year ended December 31, 2016 was $75.4 million compared to $60.8 million for the same period in 2015. The increase in interest income for the year ended December 31, 2016, compared to 2015 was primarily related to an increase in the average balance of loans receivable as a result of the acquisition of MNB in the fourth quarter of 2015, partially offset by a decrease in the average yield earned on loans receivable. Interest expense for the fourth quarter of 2016 was $2.1 million compared to $1.7 million for the same period in 2015. Interest expense for the year ended December 31, 2016 was $7.9 million compared to $6.4 million for the same period in 2015. The increase in interest expense for the fourth quarter of 2016 compared to the same period in 2015 was primarily due to an increase in the average balance of interest bearing deposits and an increase in the average rate paid on deposits. The increase in interest expense for the year ended December 31, 2016 compared to 2015 was primarily due to an increase in the average balance of interest bearing deposits as a result of the MNB acquisition.

Net interest margin measured 3.75% for the fourth quarter of 2016, compared to 4.14% for the same period in 2015. Net interest margin for the year ended December 31, 2016 was 3.85%, compared to 3.88% for 2015. The Company’s net interest margin decreased primarily as a result of a decrease in the average yield on interest earning assets. The average yield on interest-earning assets for the fourth quarter of 2016 was 4.21% compared to 4.55% for the same period in 2015. The average yield on interest-earning assets for the year ended December 31, 2016 was 4.30% compared to 4.33% for the same period in 2015. The average cost of interest-bearing liabilities increased to 0.54% for the fourth quarter 2016, compared to 0.48% for the same period in 2015. The average cost of interest-bearing liabilities for the years ended December 31, 2016 and 2015 was 0.53%.

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 December 31, 2016 increased to $4.4 million from $3.7 million for the same period in 2015, an 18% increase. Total noninterest income of $16.7 million for the year ended December 31, 2016 increased from $13.5 million for the same period in 2015, a 23% increase. The increases in the three and twelve month comparison periods were primarily due to increases in deposit fee income and gain on sales of mortgage loans. The increase in deposit fee income was primarily due to an increase in deposit accounts resulting from the acquisition of MNB. The increase in gain on sales of loans was due to an increase in the volume of mortgage loans sold.

Total noninterest expense decreased $3.4 million or 20% for the fourth quarter of 2016 compared to the fourth quarter of 2015. Total noninterest expense increased $6.3 million or 12% during the year ended December 31, 2016 compared to 2015. The decrease in total noninterest expense for the three month comparative period was primarily related to transaction costs incurred in connection with the acquisition of MNB in the fourth quarter of 2015. The increase in total noninterest expense for the twelve month comparative period was primarily related to the increase in personnel and overhead costs incurred in connection with the MNB acquisition. The Company’s core efficiency ratio was 63% in the fourth quarter of 2016 compared to 67% in the fourth quarter of 2015.

Income tax provision increased by $1.2 million or 126% for the fourth quarter of 2016 compared to the fourth quarter of 2015. Income tax provision for the year ended December 31, 2016 increased by $2.2 million or 48% compared to the same period in 2015. The increases in income tax provision were a result of an increase in taxable income. For the year ended December 31, 2016, the income tax provision was reduced by $0.9 million due to the reversal of the valuation allowance on the Company’s deferred tax asset in the second quarter of 2016.

The ratio of nonperforming assets to total assets decreased to 0.94% at December 31, 2016, compared to 1.22% at December 31, 2015. The allowance for loan losses represented 1.00% of total loans at December 31, 2016 and 2015. The ratio of allowance for loan losses plus discount on acquired loans to total loans was 1.68% at December 31, 2016, compared to 2.07% at December 31, 2015. The ratio of the allowance for loan losses to nonperforming loans was 90% at December 31, 2016, compared to 75% at December 31, 2015. Annualized net charge-offs as a percentage of average loans for the quarter ended December 31, 2016 was 0.10% compared to 0.08% for the quarter ended December 31, 2015. Provision for loan losses decreased from $866,000 for the fourth quarter of 2015 to $851,000 for the fourth quarter of 2016. Provision for loan losses for the year ended December 31, 2016 was $2.5 million, compared to $1.8 million for the same period in 2015. The increase in the provision is attributable to loan originations and a 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 48 branches 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. The Company recently 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)
                   
December September June March December
2016 2016 2016 2016 2015
 

Balance sheet data, at quarter end:

Commercial real estate - mortgage loans $ 587,633 $ 566,302 $ 557,612 $ 555,264 $ 561,910
Consumer real estate - mortgage loans 389,592 385,642 390,743 395,509 401,594
Farmland 94,018 94,187 92,452 93,380 94,235
Construction and land development 125,785 119,433 124,369 117,283 116,015
Commercial and industrial loans 323,096 312,957 281,874 258,479 246,304
Consumer and other 36,265 36,645 36,339 37,673 38,594
Total loans 1,556,389 1,515,166 1,483,389 1,457,588 1,458,652
Loans held for sale 8,954 13,995 15,168 10,103 7,326
Allowance for loan losses (15,584 ) (15,112 ) (14,751 ) (14,866 ) (14,550 )
Investment securities 215,453 197,670 192,549 185,143 198,585
Goodwill 40,196 40,196 40,196 40,196 40,196
Core deposit intangible, net 10,353 10,608 10,863 11,119 11,374
Total assets 2,053,175 2,007,938 1,990,715 1,922,301 1,920,216
Noninterest-bearing deposits 223,038 239,831 255,648 216,173 234,879
Total deposits 1,644,080 1,653,523 1,641,250 1,610,718 1,607,683
Short term borrowings 19,114 13,511 14,964 8,990 12,075
FHLB advances 129,992 80,138 75,282 50,178 53,518
Other borrowings 22,012 22,518 22,900 22,681 18,862
Total stockholders' equity 233,427 232,403 228,534 223,798 223,157
 

Balance sheet data, quarterly averages:

Total loans $ 1,536,703 $ 1,522,106 $ 1,492,504 $ 1,461,091 $ 1,445,357
Investment securities 217,522 202,868 188,808 206,258 209,629
Total earning assets 1,810,802 1,768,892 1,724,381 1,702,917 1,699,227
Goodwill 40,196 40,196 40,196 40,196 40,216
Core deposit intangible, net 10,519 10,775 11,030 11,284 11,549
Total assets 2,019,792 1,981,582 1,937,722 1,920,833 1,920,617
Noninterest-bearing deposits 229,296 239,886 215,766 221,909 234,206
Interest-bearing deposits 1,416,991 1,395,501 1,394,262 1,369,759 1,364,403
Total deposits 1,646,287 1,635,387 1,610,028 1,591,668 1,598,609
Short term borrowings 17,983 13,699 11,991 12,163 26,872
FHLB advances 94,336 73,418 64,494 64,488 47,127
Other borrowings 22,161 22,634 22,982 25,353 18,983
Total stockholders' equity 234,339 231,758 226,587 224,416 223,083
 

Statement of income data for the three months ended:

Interest income $ 19,212 $ 18,849 $ 18,535 $ 18,790 $ 19,468
Interest expense   2,105     2,014     1,935     1,864     1,744  
Net interest income 17,107 16,835 16,600 16,926 17,724
Provision for loan losses   851     643     533     489     866  
Net interest income after provision for loan losses 16,256 16,192 16,067 16,437 16,858
Noninterest income 4,394 4,333 4,311 3,673 3,721
Noninterest expense   13,625     13,400     14,989     15,331     17,044  
Income before taxes 7,025 7,125 5,389 4,779 3,535
Income tax provision   2,192     2,384     847     1,436     972  
Net income $ 4,833   $ 4,741   $ 4,542   $ 3,343   $ 2,563  
 
 
BEAR STATE FINANCIAL, INC.
SELECTED CONSOLIDATED FINANCIAL DATA – UNAUDITED
 
                   
December September June March December
2016 2016 2016 2016 2015
 

Common stock data:

Net income per share, diluted $ 0.13 $ 0.13 $ 0.12 $ 0.09 $ 0.07
Core earnings per share, diluted $ 0.13 $ 0.11 $ 0.11 $ 0.10 $ 0.11
Book value per share $ 6.21 $ 6.18 $ 6.08 $ 5.96 $ 5.87
Tangible book value per share $ 4.86 $ 4.83 $ 4.72 $ 4.59 $ 4.52
Diluted weighted average shares outstanding 37,833,124 37,807,419 37,772,959 37,918,188 38,173,234
End of period shares outstanding 37,618,597 37,600,986 37,589,543 37,560,031 37,987,722
 

Profitability and performance ratios:

Return on average assets 0.95 % 0.95 % 0.94 % 0.71 % 0.53 %
Core return on average assets 0.95 % 0.85 % 0.84 % 0.77 % 0.86 %
Return on average equity 8.18 % 8.12 % 8.04 % 6.04 % 4.56 %
Core return on average equity 8.23 % 7.28 % 7.23 % 6.61 % 7.41 %
Core return on average tangible equity 10.50 % 9.34 % 9.34 % 8.58 % 9.65 %
Net interest margin 3.75 % 3.78 % 3.86 % 4.03 % 4.14 %
Noninterest income to total revenue 20.44 % 20.47 % 20.62 % 17.83 % 17.35 %
Noninterest income to average assets 0.86 % 0.87 % 0.89 % 0.78 % 0.77 %
Noninterest expense to average assets 2.68 % 2.68 % 3.10 % 3.24 % 3.52 %
Efficiency ratio 63.37 % 63.30 % 71.68 % 74.43 % 79.48 %
Core efficiency ratio(1) 63.18 % 66.99 % 68.29 % 71.96 % 67.66 %
Average loans to average deposits 93.34 % 93.07 % 92.70 % 91.80 % 90.41 %
Securities to total assets 10.49 % 9.84 % 9.67 % 9.63 % 10.34 %
 

Asset quality ratios:

Allowance for loan losses to total loans 1.00 % 1.00 % 0.99 % 1.02 % 1.00 %
Allowance for loan losses to non-performing loans 89.69 % 86.41 % 76.42 % 72.84 % 75.23 %
Nonperforming loans to total loans 1.12 % 1.15 % 1.30 % 1.40 % 1.36 %
Nonperforming assets to total assets 0.94 % 0.95 % 1.08 % 1.23 % 1.22 %
Annualized net charge offs to average total loans (2) 0.10 % 0.07 % 0.17 % 0.05 % 0.08 %
 

Regulatory capital ratios:

Tier 1 leverage ratio 9.47 % 9.37 % 9.30 % 9.16 % 9.15 %
Common equity tier 1 capital ratio 11.03 % 11.00 % 10.78 % 10.65 % 10.62 %
Tier 1 capital to risk weighted assets 11.03 % 11.00 % 10.78 % 10.65 % 10.62 %
Total capital to risk weighted assets 11.96 % 11.92 % 11.69 % 11.58 % 11.52 %
                               

(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 includes 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)
       

December 31,
2016

December 31,
2015

ASSETS
Cash and cash equivalents $ 78,789 $ 52,131
Interest-bearing time deposits in banks 4,571 10,930
Federal funds sold -- 18
Investment securities—
Available for sale, at fair value 188,476 198,585
Held to maturity, at amortized cost 26,977 --
Other investment securities, at cost 13,759 9,563
Loans receivable, net of allowance of $15,584 and $14,550, respectively 1,540,805 1,444,102
Loans held for sale 8,954 7,326
Accrued interest receivable 7,006 6,157
Real estate owned - net 1,945 3,642
Office properties and equipment – net 54,049 63,641
Office properties and equipment held for sale 5,337 --
Cash surrender value of life insurance 57,267 52,602
Goodwill 40,196 40,196
Core deposit intangible – net 10,353 11,374
Deferred tax asset, net 11,619 16,713
Prepaid expenses and other assets   3,072     3,236
 
TOTAL $ 2,053,175   $ 1,920,216
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
LIABILITIES:
Noninterest bearing deposits $ 223,038 $ 234,879
Interest bearing deposits   1,421,042     1,372,804
Total deposits 1,644,080 1,607,683
Short term borrowings 19,114 12,075
Other borrowings 152,004 72,380
Other liabilities   4,550     4,921
 
Total liabilities   1,819,748     1,697,059
 
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.01 par value—5,000,000 shares authorized; none issued at December 31, 2016 or December 31, 2015 -- --
Common stock, $0.01 par value—100,000,000 shares authorized; 37,618,597 and 37,987,722 shares issued and outstanding at December 31, 2016 and December 31, 2015, respectively 376 380
Additional paid-in capital 209,274 211,817
Accumulated other comprehensive income (1,436 ) 386
Retained earnings   25,213     10,574
 
Total stockholders’ equity   233,427     223,157
 
TOTAL $ 2,053,175   $ 1,920,216
 
 

 

 

BEAR STATE FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except earnings per share)
(Unaudited)
       
 
Three Months Ended Year Ended
December 31,     December 31, December 31,     December 31,
2016 2015 2016 2015
INTEREST INCOME:
Loans receivable $ 17,924 $ 18,430 $ 70,936 $ 57,039
Investment securities:
Taxable 475 475 1,952 1,535
Nontaxable 729 490 2,185 1,955
Other   84   73     313     317  
Total interest income   19,212   19,468     75,386     60,846  
 
INTEREST EXPENSE:
Deposits 1,729 1,484 6,515 5,339
Other borrowings   376   260     1,403     1,025  
 
Total interest expense   2,105   1,744     7,918     6,364  
 
NET INTEREST INCOME 17,107 17,724 67,468 54,482
 
PROVISION FOR LOAN LOSSES   851   866     2,516     1,797  
 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES   16,256   16,858     64,952     52,685  
 
NONINTEREST INCOME:
Net gain on sales of investment securities -- (68 ) 19 20
Deposit fee income 2,354 2,338 8,994 7,907
Earnings on life insurance policies 418 415 1,665 1,510
Gain on sales of loans 1,342 725 4,796 3,084
Other   280   311     1,237     1,026  
 
Total noninterest income   4,394   3,721     16,711     13,547  
 
NONINTEREST EXPENSES:
Salaries and employee benefits 7,443 8,220 31,168 25,742
Net occupancy expense 1,762 2,138 7,414 6,411
Real estate owned, net 2 63 (377 ) (369 )
FDIC insurance 230 324 1,099 960
Amortization of intangible assets 255 255 1,021 724
Data processing 1,341 2,596 5,520 6,411
Professional fees 531 531 2,212 1,923
Advertising and public relations 316 756 1,600 2,520
Postage and supplies 233 304 1,121 1,113
Other   1,512   1,857     6,567     5,584  
 
Total noninterest expenses   13,625   17,044     57,345     51,019  
 
INCOME BEFORE INCOME TAXES 7,025 3,535 24,318 15,213

INCOME TAX PROVISION

  2,192   972     6,859     4,639  
 
NET INCOME $ 4,833 $ 2,563   $ 17,459   $ 10,574  
 
Basic earnings per common share $ 0.13 $ 0.07   $ 0.46   $ 0.31  
 
Diluted earnings per common share $ 0.13 $ 0.07   $ 0.46   $ 0.30  
 
 

 

 

 

BEAR STATE FINANCIAL, INC.

AVERAGE CONSOLIDATED BALANCE SHEETS and NET INTEREST ANALYSIS - UNAUDITED
(Dollars in thousands)
   
 
Three Months Ended December 31,
2016     2015
Average

Balance

     Interest     Average

Yield/

Cost

Average

Balance

     Interest     Average

Yield/

Cost

(Dollars in Thousands)
Interest-earning assets:  
Loans receivable(1) $ 1,536,703 $ 17,924 4.63 % $ 1,445,357 $ 18,430 5.06 %
Investment securities(2) 217,522 1,204 2.20 209,629 965 1.82
Other interest-earning assets   56,577   84 0.59   44,241   73 0.65
Total interest-earning assets 1,810,802 19,212 4.21 1,699,227 19,468 4.55
Noninterest-earning assets   208,990   221,390
Total assets $ 2,019,792 $ 1,920,617
Interest-bearing liabilities:
Deposits $ 1,416,991 1,729 0.48 $ 1,364,403 1,484 0.43
Other borrowings   134,480   376 1.11   92,982   260 1.11
Total interest-bearing liabilities 1,551,471 2,105 0.54 1,457,385 1,744 0.48
Noninterest-bearing deposits 229,296 234,206
Noninterest-bearing liabilities   4,686   5,943
Total liabilities 1,785,453 1,697,534
Stockholders' equity   234,339   223,083
Total liabilities and

stockholders' equity

$ 2,019,792 $ 1,920,617
   
Net interest income $ 17,107 $ 17,724
Net earning assets $ 259,331 $ 241,842
Interest rate spread 3.67 % 4.07 %
Net interest margin 3.75 % 4.14 %

Ratio of interest-earning assets to

Interest-bearing liabilities

116.71 % 116.59 %
 
 

 

Year Ended December 31,
2016 2015
Average

Balance

Interest Average

Yield/

Cost

Average

Balance

Interest   Average

Yield/

Cost

(Dollars in Thousands)
Interest-earning assets:
Loans receivable(1) $ 1,503,245 $ 70,936 4.72 % $ 1,158,288 $ 57,039 4.92 %
Investment securities(2) 203,899 4,137 2.03 190,870 3,490 1.83
Other interest-earning assets   44,814   313 0.70   55,258   317 0.57
Total interest-earning assets 1,751,958 75,386 4.30 1,404,416 60,846 4.33
Noninterest-earning assets   213,221   185,470
Total assets $ 1,965,179 $ 1,589,886
Interest-bearing liabilities:
Deposits $ 1,394,194 6,515 0.47 $ 1,131,870 5,339 0.47
Other borrowings   111,484   1,403 1.26   76,905   1,025 1.33
Total interest-bearing liabilities 1,505,678 7,918 0.53 1,208,775 6,364 0.53
Noninterest-bearing deposits 226,758 189,826
Noninterest-bearing liabilities   3,447   4,096
Total liabilities 1,735,883 1,402,697
Stockholders' equity   229,296   187,189
Total liabilities and

stockholders' equity

$ 1,965,179 $ 1,589,886
   
Net interest income $ 67,468 $ 54,482
Net earning assets $ 246,280 $ 195,641
Interest rate spread 3.78 % 3.80 %
Net interest margin 3.85 % 3.88 %

Ratio of interest-earning assets to

Interest-bearing liabilities

116.36 % 116.19 %
 

(1) Includes nonaccrual loans.

(2) Includes FHLB and FRB stock.

 
           

BEAR STATE FINANCIAL, INC.

ASSET QUALITY ANALYSIS - UNAUDITED

(Dollars in thousands)

 
 
December 31, 2016 December 31, 2015

Net (2)

    

% Total
Assets

Net (2)

    

% Total
Assets

Increase
(Decrease)

Nonaccrual Loans:
One- to four-family residential $ 6,709 0.33 % $ 6,455 0.34 % $ 254
Multifamily -- 0.00 % 230 0.01 % (230 )
Nonfarm nonresidential 5,177 0.25 % 6,638 0.35 % (1,461 )
Farmland 783 0.04 % 973 0.05 % (190 )
Construction and land development 463 0.02 % 622 0.03 % (159 )
Commercial 4,071 0.20 % 4,235 0.22 % (164 )
Consumer   173 0.01 %   187 0.01 %   (14 )
 
Total nonaccrual loans 17,376 0.85 % 19,340 1.01 % (1,964 )
 
Accruing loans 90 days or more past due -- -- 451 0.02 % (451 )
 
Real estate owned   1,945 0.09 %   3,642 0.19 %   (1,697 )
 
Total nonperforming assets 19,321 0.94 % 23,433 1.22 % (4,112 )
Performing restructured loans   4,804 0.23 %   284 0.01 %   4,520  
 
Total nonperforming assets and performing restructured loans (1) $ 24,125 1.17 % $ 23,717 1.23 % $ 408  
 

(1) The table does not include substandard loans which were judged not to be impaired totaling $30.7 million at December 31, 2016 and $30.2 million at December 31, 2015 or acquired ASC 310-30 purchased credit impaired loans which are considered performing at December 31, 2016.

(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
12/31/2016     9/30/2016     6/30/2016     3/31/2016     12/31/2015
Net income available to common stockholders $ 4,833   $ 4,741   $ 4,542   $ 3,343   $ 2,563  
Average common stockholders' equity 234,339 231,758 226,587 224,416 223,083
Less Average Intangible Assets:
Goodwill (40,196 ) (40,196 ) (40,196 ) (40,196 ) (40,216 )
Core deposit intangible, net of accumulated amortization   (10,519 )   (10,775 )   (11,030 )   (11,284 )   (11,549 )
 
Average tangible common stockholders' equity $ 183,624   $ 180,787   $ 175,361   $ 172,936   $ 171,318  
 
Annualized return on average tangible
common stockholders' equity 		  10.4 %   10.4 %   10.4 %   7.8 %   5.9 %
 
 
BEAR STATE FINANCIAL, INC.
CALCULATION OF TANGIBLE BOOK VALUE PER COMMON SHARE - UNAUDITED
(In thousands, except per share data)
 
For the Quarter Ending
12/31/2016 9/30/2016 6/30/2016 3/31/2016 12/31/2015
Total common stockholder's equity $ 233,427 $ 232,403 $ 228,534 $ 223,798 $ 223,157
Less intangible assets:
Goodwill (40,196 ) (40,196 ) (40,196 ) (40,196 ) (40,196 )
Core deposit intangible, net of accumulated amortization   (10,353 )   (10,608 )   (10,863 )   (11,119 )   (11,374 )
Total intangible assets   (50,549 )   (50,804 )   (51,059 )   (51,315 )   (51,570 )
Total tangible common stockholder's equity $ 182,878   $ 181,599   $ 177,475   $ 172,483   $ 171,587  
 
Common Shares Outstanding   37,619     37,601     37,590     37,560     37,988  
 
Tangible book value per common share $ 4.86   $ 4.83   $ 4.72   $ 4.59   $ 4.52  
 
 
BEAR STATE FINANCIAL, INC.
RECONCILIATION OF NON-GAAP SELECTED CONSOLIDATED FINANCIAL DATA - UNAUDITED
(In thousands, except share data)
                     
For the Quarter Ending
December September June March December
2016 2016 2016 2016 2015
Net income $ 4,833 $ 4,741 $ 4,542 $ 3,343 $ 2,563
Adj: Loss (gain) on sale of securities, net -- (21 ) -- 2 68
Adj: Merger, acquisition and integration expenses -- -- 137 445 1,348
Adj: Branch restructure and related property valuation expense, net of (gain) on sale of properties 41 (323 ) 571 63 --
Adj: Data processing termination fees -- -- -- -- 1,186
Adj: Net provision/loss/(gain) on real estate owned -- (444 ) -- -- --
Adj: Deferred tax asset valuation allowance reversal -- -- (897 ) -- --
Tax effect of adjustments (1)           (16 )       302         (271 )       (195 )       (996 )
Total core income   (A)     $ 4,858       $ 4,255       $ 4,082       $ 3,658       $ 4,169  
 
Total revenue $ 21,501 $ 21,168 $ 20,911 $ 20,599 $ 21,445
Adj: Loss (gain) on sale of securities, net           --         (21 )       --         2         68  
Total core revenue         $ 21,501       $ 21,147       $ 20,911       $ 20,601       $ 21,513  
 
Total non-interest expense $ 13,625 $ 13,400 $ 14,989 $ 15,331 $ 17,044
Adj: Merger, acquisition and integration expenses -- -- (137 ) (445 ) (1,348 )
Adj: Branch restructure and related property valuation (expense), net of gain on sale of properties (41 ) 323 (571 ) (63 ) --
Adj: Data processing termination fees -- -- -- -- (1,186 )
Adj: Net (provision/loss)/gain on real estate owned           --         444         --         --         --  
Total core noninterest expense         $ 13,584       $ 14,167       $ 14,281       $ 14,823       $ 14,510  
 
Total average assets (B) $ 2,019,792 $ 1,981,582 $ 1,937,722 $ 1,920,833 $ 1,920,617
Total average stockholders' equity (C) 234,339 231,758 226,587 224,416 223,083
Total average tangible stockholders' equity (D) 183,624 180,787 175,361 172,936 171,318
Total tangible stockholders' equity, period end (E) 182,878 181,599 177,475 172,483 171,587
 
Total common shares outstanding, period-end (F) 37,618,597 37,600,986 37,589,543 37,560,031 37,987,722
Average diluted shares outstanding (G) 37,833,124 37,807,419 37,772,959 37,918,188 38,173,234
 
Core earnings per share, diluted (A/G) $ 0.13 $ 0.11 $ 0.11 $ 0.10 $ 0.11
Tangible book value per share, period-end (E/F) $ 4.86 $ 4.83 $ 4.72 $ 4.59 $ 4.52
 
Core return on average assets (A/B) 0.95 % 0.85 % 0.84 % 0.77 % 0.86 %
Core return on average equity (A/C) 8.23 % 7.28 % 7.23 % 6.61 % 7.41 %
Core return on average tangible equity (A/D) 10.50 % 9.34 % 9.34 % 8.58 % 9.65 %
Core efficiency ratio(2)           63.18 %       66.99 %       68.29 %       71.96 % 67.66 %

(1) The tax effect is calculated at the Company’s blended statutory rate of 38.29% for adjustments that impact taxable income.

(2) 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.