Bear State Financial, Inc. (the “Company”) (NASDAQ:BSF), today reported earnings of $2.6 million and earnings per diluted common share of $0.07 in the fourth quarter of 2015, compared to earnings of $4.8 million or $0.14 per diluted common share in the fourth quarter of 2014. Net income for the fourth quarter of 2014 included a non-recurring income tax benefit of $1.6 million primarily resulting from the reversal of the Company’s remaining valuation allowance against its deferred tax assets. Core earnings for the fourth quarter of 2015 were $4.2 million or $0.11 per diluted common share compared to core earnings of $3.4 million or $0.10 per diluted common share in the fourth quarter of 2014. Core earnings per diluted common share trended positively in 2015 quarter over quarter at $0.08 in the first quarter, $0.09 in the second quarter, $0.10 in the third quarter and $0.11 in the fourth quarter.

For the full year of 2015, net income was $10.6 million and earnings per diluted common share was $0.30 compared to net income of $24.3 million or $0.84 per diluted common share for the full year of 2014. Net income for the full year of 2014 included an income tax benefit of $21.1 million primarily resulting from the reversal of the Company’s valuation allowance against its deferred tax assets. Core earnings for the full year of 2015 were $13.2 million or $0.38 per diluted common share compared to core earnings of $8.2 million or $0.29 per diluted common share for the full year of 2014.

On October 1, 2015, the Company completed its previously-announced acquisition of Metropolitan National Bank (Springfield, MO) (“MNB”). The Company’s results of operations for the twelve months ended December 31, 2015, includes results of operations for MNB for the period from October 1, 2015, through December 31, 2015. The Company anticipates that it will convert MNB’s systems to the Company’s core technology platform, and, subject to regulatory approval, merge MNB’s charter into Bear State Bank. In addition to the MNB integration project, the Company has evaluated its branch network and intends to reduce its total retail branches by up to six. The Company anticipates the integration and branch consolidation project to be substantially completed by the second quarter of 2016.

“The results for 2015 reflect Bear State Financial’s continued focus on disciplined growth and operational efficiency while further solidifying our reputation as a proven acquirer and operator. Completing the integration of three banks onto one core operating system, merging three bank charters and completing a rebrand to create Bear State Bank all while negotiating, receiving regulatory approval, and completing the acquisition of Metropolitan National Bank was an incredible achievement in one year,” said Mark McFatridge, president and CEO of Bear State Financial. “We continue to optimize our delivery strategies, in response to evolving customer preferences as we invest in more digital and mobile solutions, while remaining capital and expense conscious. With the strength of Bear State’s unique brand and commitment to innovation, I look forward to capitalizing on the momentum we’ve built as we head into 2016.”

FINANCIAL CONDITION

Total assets were $1.92 billion at December 31, 2015, a 27% increase from $1.51 billion at December 31, 2014. Total deposits were $1.61 billion at December 31, 2015, a 27% increase from $1.26 billion at December 31, 2014. The increase in both assets and deposits was primarily due to the MNB acquisition. Total loans were $1.46 billion at December 31, 2015, an increase of $404 million, or 38% from December 31, 2014.

Total stockholders’ equity was $223 million at December 31, 2015, a 31% increase from $170 million at December 31, 2014. Tangible common stockholders’ equity was $172 million at December 31, 2015, a 25% increase from $137 million at December 31, 2014. Book value per common share was $5.87 at December 31, 2015, a 15% increase from $5.11 at December 31, 2014. Tangible book value per common share was $4.52 at December 31, 2015, a 10% increase from $4.12 at December 31, 2014. The Company’s ratio of total stockholders’ equity to total assets increased to 11.62% at December 31, 2015, compared to 11.25% at December 31, 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

The Company recognized fourth quarter 2015 GAAP net income of $2.6 million or $0.07 per diluted common share compared to GAAP net income of $4.8 million or $0.14 per diluted common share in the fourth quarter of 2014. The GAAP net income resulted in a GAAP return on average assets of 0.53% in the fourth quarter of 2015, compared to 1.25% in the fourth 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.

Fourth quarter 2015 core earnings totaled $4.2 million or $0.11 per diluted common share, compared to core earnings of $3.4 million or $0.10 per diluted common share in the fourth quarter of 2014. The core return on average assets measured 0.86% and 0.89%; core return on average equity measured 7.41% and 8.16%; and core return on average tangible equity measured 9.65% and 10.19%, each for the fourth quarters of 2015 and 2014, respectively. Non-core items during the fourth quarter of 2015 included merger, acquisition and integration expenses of $1.1 million, data processing termination fees of $1.2 million, rebranding expenses of $267,000, related to the acquisition of MNB and a loss on sale of securities of $68,000. Collectively, the effect of all non-core items, net of taxes, decreased GAAP net income by approximately $1.6 million, or approximately $0.04 of diluted earnings per share.

Net interest income for the fourth quarter of 2015 was $17.7 million, compared to $13.3 million for the same period in 2014. Net interest income for the twelve months ended December 31, 2015, was $54.5 million, compared to $37.4 million for the same period in 2014. Interest income for the fourth quarter of 2015 was $19.5 million compared to $14.9 million for the same period in 2014. Interest income for the twelve months ended December 31, 2015, was $60.8 million compared to $42.5 million for the same period in 2014. The increase in interest income for the twelve months ended December 31, 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 acquisition of MNB as well as the acquisition of First National Security Company (“FNSC”) which occurred on June 13, 2014. Interest expense for the fourth quarter of 2015 was $1.7 million compared to $1.6 million for the same period in 2014. Interest expense for the twelve months ended December 31, 2015, was $6.4 million compared to $5.1 million for the same period in 2014. The increase in interest expense for the quarter and twelve months ended December 31, 2015, compared to the same respective periods in 2014 was primarily due to an increase in the average balance of deposit accounts and borrowings as a result of the MNB and FNSC acquisitions.

Net interest margin measured 4.14% for the fourth quarter 2015, compared to 3.91% for the same period in 2014. Net interest margin for the twelve months ended December 31, 2015, was 3.88%, compared to 3.84% for 2014. The Company’s net interest margin increased primarily as a result of an increase in yields on loans receivable resulting from loans purchased in the MNB and FNSC acquisitions. Average cost of total interest-bearing liabilities for the twelve months ended December 31, 2015, was 0.53% compared to 0.60% for 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 $3.7 million for the three months ended December 31, 2015, increased from $3.4 million for the same period in 2014, a 10% increase. Total noninterest income of $13.5 million for the twelve months ended December 31, 2015, increased from $10.0 million for 2014, a 35% increase. The increase in the three and twelve month comparison period was primarily due to an increase in deposit fee income and earnings on life insurance policies. The increase in deposit fee income was primarily due to an increase in deposit accounts resulting from the acquisition of MNB and FNSC. The increase in earnings on life insurance was due to an increase in the balances of bank owned life insurance resulting from purchasing new policies and the acquisition of MNB.

Total noninterest expense increased $5.7 million or 50% during the fourth quarter of 2015 compared to the fourth quarter of 2014. Total noninterest expense increased $9.0 million or 21% during the twelve months ended December 31, 2015, compared 2014. The variance in total noninterest expense for the three and twelve months ended December 31, 2015, compared to the same respective periods in 2014 was primarily related to the increase in personnel and overhead costs resulting from, as well as transaction costs incurred in connection with, the acquisition of MNB and non-core expenses incurred as a result of the charter consolidation and systems integration of First Federal Bank, First National Bank and Heritage Bank in the first quarter of 2015. In addition, the twelve months ended 2015 reflected a full year of the FNSC acquisition versus approximately six months in 2014. The Company’s efficiency ratio was 68% in the fourth quarter of 2015 compared to 67% in the fourth quarter of 2014.

Nonperforming assets increased to $23.2 million at December 31, 2015, compared to $14.9 million at December 31, 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 current reserves adequately reflect its estimated loss exposure. The allowance for loan losses represented 1.00% of total loans at December 31, 2015, compared to 1.29% at December 31, 2014. The ratio of allowance for loan losses plus discount on acquired loans to total loans was 2.07% at December 31, 2015, compared to 2.38% at December 31, 2014. The ratio of the allowance for loan losses to nonperforming loans was 75.23% at December 31, 2015, compared to 139.82% at December 31, 2014. Annualized net charge-offs as a percentage of average loans for the quarter ended December 31, 2015, was 0.08% compared to 0.22% for the quarter ended December 31, 2014. Provision for loan losses in the fourth quarter of 2015 was $866,000 compared to $758,000 for the same period in 2014. Provision for loans losses for the twelve months ended December 31, 2015, was $1.8 million compared to $1.6 million for 2014. The increase in provision for loan losses is attributable to loan growth at the Company’s subsidiary banks and a migration of the MNB and FNSC renewed 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 and 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 Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, statements regarding the integration of MNB, the merger of the MNB and Bear State Bank charters, and the Company’s plans to reduce the total number of its retail branches. 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 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)
 
 
December September June March December
2015 2015 2015 2015 2014
 

Balance sheet data, at quarter end:

Commercial real estate - mortgage loans $ 561,910 $ 401,044 $ 378,878 $ 388,043 $ 415,155
Consumer real estate - mortgage loans 401,594 309,951 307,183 315,082 320,254
Farmland loans 94,235 53,192 48,058 50,244 47,199
Construction and land development loans 116,015 93,688 103,094 100,918 98,594
Commercial and industrial loans 246,304 186,772 185,266 152,913 139,871
Consumer and other loans 38,594 32,428 32,455 32,613 33,809
Total loans 1,458,652 1,077,075 1,054,934 1,039,813 1,054,882
Allowance for loan losses (14,550 ) (13,975 ) (13,854 ) (13,762 ) (13,660 )
Investment securities 198,585 164,564 182,525 176,599 174,218
Goodwill 40,196 25,717 25,717 25,717 25,717
Core deposit intangible, net 11,374 6,869 7,026 7,182 7,338
Total assets 1,920,216 1,470,725 1,451,281 1,477,597 1,514,595
Noninterest-bearing deposits 234,879 173,525 168,225 176,924 180,136
Total deposits 1,607,683 1,209,176 1,208,800 1,236,258 1,263,797
Short term borrowings 12,075 10,366 3,530 5,576 12,083
FHLB advances 53,518 49,457 41,591 38,936 43,095
Other borrowings 18,862 18,843 18,450 18,706 18,163
Total stockholders' equity 223,157 178,670 174,831 173,128 170,454
 

Balance sheet data, quarterly averages:

Total loans $ 1,445,357 $ 1,077,500 $ 1,059,235 $ 1,045,946 $ 1,059,636
Investment securities 209,629 180,831 189,285 183,857 183,735
Total earning assets 1,699,227 1,294,619 1,294,523 1,325,125 1,350,646
Goodwill 40,216 25,717 25,717 25,717 25,773
Core deposit intangible, net 11,549 6,972 7,127 7,284 7,441
Total assets 1,920,617 1,466,342 1,468,521 1,504,716 1,525,455
Noninterest-bearing deposits 234,206 176,219 173,248 175,457 178,286
Interest-bearing deposits 1,364,403 1,036,330 1,055,200 1,072,255 1,106,867
Total deposits 1,598,609 1,212,549 1,228,448 1,247,712 1,285,153
Short term borrowings 26,872 6,166 4,481 11,902 11,992
FHLB advances 47,127 47,614 38,625 50,206 37,942
Other borrowings 18,983 18,641 18,564 18,482 19,552
Total stockholders' equity 223,083 177,824 175,025 172,811 166,793
 

Statement of operation data for the three months ended:

Interest income $ 19,467 $ 13,749 $ 13,523 $ 14,106 $ 14,945
Interest expense   1,745       1,529       1,563       1,528     1,627  
Net interest income 17,722 12,220 11,960 12,578 13,318
Provision for loan losses   866       331       300       300     758  
Net interest income after provision for loan losses 16,856 11,889 11,660 12,278 12,560
Noninterest income 3,721 3,318 3,397 3,111 3,382
Noninterest expense   17,044       10,465       11,273       12,237     11,387  
Income before taxes 3,533 4,742 3,784 3,152 4,555
Income tax expense   973       1,529       1,253       885     (259 )
Net income $ 2,560     $ 3,213     $ 2,531     $ 2,267   $ 4,814  
 
         
BEAR STATE FINANCIAL, INC.
SELECTED CONSOLIDATED FINANCIAL DATA - UNAUDITED
(In thousands, except share data)
 
 
December September June March December
2015 2015 2015 2015 2014
 

Common stock data:

Net income per share, diluted $ 0.07 $ 0.10 $ 0.08 $ 0.07 $ 0.14
Core earnings per share, diluted $ 0.11 $ 0.10 $ 0.09 $ 0.08 $ 0.10
Book value per share $ 5.87 $ 5.36 $ 5.24 $ 5.19 $ 5.11
Tangible book value per share $ 4.52 $ 4.38 $ 4.26 $ 4.20 $ 4.12
Diluted weighted average shares outstanding 38,173,234 33,497,298 33,521,490 33,551,776 33,508,230
End of period shares outstanding 37,987,722 33,349,512 33,375,753 33,375,753 33,365,845
 

Profitability and performance ratios:

Return on average assets 0.53 % 0.87 % 0.69 % 0.61 % 1.25 %
Core return on average assets 0.86 % 0.90 % 0.79 % 0.76 % 0.89 %
Return on average equity 4.56 % 7.17 % 5.80 % 5.32 % 11.45 %
Core return on average equity 7.41 % 7.41 % 6.65 % 6.58 % 8.16 %
Core return on average tangible equity 9.65 % 9.07 % 8.18 % 8.14 % 10.19 %
Net interest margin 4.14 % 3.74 % 3.71 % 3.85 % 3.91 %
Noninterest income to total revenue 17.35 % 21.35 % 22.12 % 19.83 % 20.25 %
Noninterest income to average assets 0.77 % 0.90 % 0.93 % 0.84 % 0.88 %
Noninterest expense to average assets 3.52 % 2.83 % 3.08 % 3.30 % 2.96 %
Efficiency ratio(1) 67.66 % 66.24 % 69.51 % 71.88 % 66.54 %
Average loans to average deposits 90.41 % 88.86 % 86.23 % 83.83 % 82.45 %
Securities to total assets 10.34 % 11.19 % 12.58 % 11.95 % 11.50 %
 

Asset quality ratios:

Allowance for loan losses to total loans 1.00 % 1.30 % 1.31 % 1.32 % 1.29 %
Allowance for loan losses to non-performing loans 75.23 % 83.18 % 134.94 % 138.60 % 139.82 %
Nonperforming loans to total loans 1.36 % 1.56 % 0.97 % 0.95 % 0.93 %
Nonperforming assets to total assets 1.21 % 1.30 % 0.94 % 0.99 % 0.96 %
Annualized net charge offs to average total loans 0.08 % 0.08 % 0.08 % 0.08 % 0.22 %
 

Regulatory capital ratios:

Tier 1 leverage ratio 8.89 % 9.83 % 9.54 % 8.96 % 8.29 %
Common equity tier 1 capital ratio 10.38 % 11.77 % 11.59 % 11.39 % N/A
Tier 1 capital to risk weighted assets 10.38 % 11.77 % 11.59 % 11.39 % 10.89 %
Total capital to risk weighted assets 11.27 % 12.94 % 12.77 % 12.58 % 12.11 %
  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)
 
 
December 31, December 31,
ASSETS 2015 2014
 
Cash and cash equivalents:
Cash and collection items $ 36,535 $ 25,971
Interest bearing deposits with banks   15,596   87,115
 
Total cash and cash equivalents 52,131 113,086
 
Interest bearing time deposits in banks 10,930 12,421
Federal funds sold 18 --
Investment securities, available for sale 198,585 174,218
Other investment securities, at cost 9,563 5,864

Loans receivable, net of allowance at December 31, 2015 and 2014, of $14,550 and $13,660, respectively

1,444,102 1,041,222
Loans held for sale 7,326 6,409
Accrued interest receivable 6,157 4,485
Real estate owned, net 3,642 4,792
Office properties and equipment, net 63,641 50,332
Cash surrender value of life insurance 52,602 44,130
Goodwill 40,196 25,717
Core deposit intangible, net 11,374 7,338
Deferred tax asset, net 16,713 20,697
Prepaid expenses and other assets   3,236   3,884
 
TOTAL $ 1,920,216 $ 1,514,595
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
LIABILITIES:
Deposits:
Noninterest bearing $ 234,879 $ 180,136
Interest bearing   1,372,804   1,083,661
 
Total deposits 1,607,683 1,263,797
 
Short term borrowings 12,075 12,083
Other borrowings 72,380 61,258
Other liabilities   4,921   7,003
 
Total liabilities $ 1,697,059 $ 1,344,141
 
STOCKHOLDERS’ EQUITY:
Preferred stock, $0.01 par value, 5,000,000 shares authorized;

none issued at December 31, 2015 and 2014

 

 

$

 

 

--

 

 

$

 

 

--

Common stock, $.01 par value - 100,000,000 shares authorized at December 31, 2015 and 2014; 37,987,722 and 33,365,845 shares issued and outstanding at December 31, 2015 and 2014, respectively

380 334
Additional paid-in capital 211,817 169,543
Accumulated other comprehensive income 386 577
Accumulated deficit   10,574   --
 
Total stockholders’ equity   223,157   170,454
 
TOTAL $ 1,920,216 $ 1,514,595
 
     

BEAR STATE FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except earnings per share)
 
 
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2015 2014 2015 2014
INTEREST INCOME:
Loans receivable $ 18,430 $ 14,084 $ 57,039 $ 39,465
Investment securities:
Taxable 461 299 1,521 1,076
Nontaxable 503 445 1,969 1,514
Other   73     117     317     436  
Total interest income   19,467     14,945     60,846     42,491  
 
INTEREST EXPENSE:
Deposits 1,485 1,362 5,339 4,538
Other borrowings   260     265     1,025     600  
 
Total interest expense   1,745     1,627     6,364     5,138  
 
NET INTEREST INCOME 17,722 13,318 54,482 37,353
 
PROVISION FOR LOAN LOSSES   866     758     1,797     1,588  
 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES   16,856     12,560     52,685     35,765  
 
NONINTEREST INCOME:
Net gain (loss) on sales of investment securities (68 ) 1 20 31
Deposit fee income 2,338 1,902 7,907 5,349
Earnings on life insurance policies 415 368 1,510 1,126
Gain on sale of loans 725 851 3,084 2,774
Other   311     260     1,026     759  
 

Total noninterest income

  3,721     3,382     13,547     10,039  
 
NONINTEREST EXPENSES:
Salaries and employee benefits 8,220 6,025 25,742 21,889
Net occupancy expense 2,138 1,539 6,411 4,391
Real estate owned, net 63 (71 ) (368 ) 1,387
Amortization of intangible assets 255 157 724 339
Data processing 2,596 1,096 6,411 6,254
Professional fees 348 223 964 867
Advertising and public relations 756 561 2,520 1,354
Postage and supplies 304 248 1,113 712
Other   2,364     1,609     7,502     4,875  
 
Total noninterest expenses   17,044     11,387     51,019     42,068  
 
INCOME (LOSS) BEFORE INCOME TAXES 3,533 4,555 15,213 3,736
 
INCOME TAX PROVISION (BENEFIT)   973     (259 )   4,639   --   (20,570 )
 
NET INCOME $ 2,560   $ 4,814   $ 10,574   $ 24,306  
 
Basic earnings per common share $ 0.07   $ 0.14   $ 0.31   $ 0.86  
 
Diluted earnings per common share $ 0.07   $ 0.14   $ 0.30   $ 0.84  
 
           

BEAR STATE FINANCIAL, INC.

AVERAGE CONSOLIDATED BALANCE SHEETS and NET INTEREST ANALYSIS - UNAUDITED
(In thousands)
 
 

 

Three Months Ended December 31,
2015 2014
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
(Dollars in Thousands)
Interest-earning assets:
Loans receivable(1) $ 1,445,357 $ 18,430 5.06 % $ 1,059,636 $ 14,084 5.27 %
Investment securities(2) 209,629 964 1.82 183,735 744 1.61
Other interest-earning assets   44,241   73 0.65   107,275     117 0.43
Total interest-earning assets 1,699,227 19,467 4.55 1,350,646 14,945 4.39
Noninterest-earning assets   221,390   174,809  
Total assets $ 1,920,617 $ 1,525,455  
Interest-bearing liabilities:
Deposits $ 1,364,403 1,485 0.43 $ 1,106,867 1,362 0.49
Other borrowings   92,982   260 1.11   69,486     265 1.51
Total interest-bearing liabilities 1,457,385 1,745 0.48 1,176,353 1,627 0.55
Noninterest-bearing deposits 234,206 178,286
Noninterest-bearing liabilities   5,943   4,023  
Total liabilities 1,697,534 1,358,662
Stockholders' equity   223,083   166,793  

Total liabilities and stockholders' equity

$ 1,920,617 $ 1,525,455  
       
Net interest income $ 17,722 $ 13,318
Net earning assets $ 241,842 $ 174,293  
Interest rate spread 4.07 % 3.84 %
Net interest margin 4.14 % 3.91 %

Ratio of interest-earning assets to Interest-bearing liabilities

116.59 % 114.82 %
 
 

 

Year Ended December 31,
2015 2014
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
(Dollars in Thousands)
Interest-earning assets:
Loans receivable(1) $ 1,158,288 $ 57,039 4.92 % $ 756,078 $ 39,465 5.22 %
Investment securities(2) 190,870 3,490 1.83 144,410 2,590 1.79
Other interest-earning assets   55,258   317 0.57   72,535     436 0.60
Total interest-earning assets 1,404,416 60,846 4.33 973,023 42,491 4.37
Noninterest-earning assets   185,470   111,447  
Total assets $ 1,589,886 $ 1,084,470  
Interest-bearing liabilities:
Deposits $ 1,131,870 5,339 0.47 $ 814,251 4,538 0.56
Other borrowings   76,905   1,025 1.33   42,176     600 1.42
Total interest-bearing liabilities 1,208,775 6,364 0.53 856,427 5,138 0.60
Noninterest-bearing deposits 189,826 107,066
Noninterest-bearing liabilities   4,096   3,224  
Total liabilities 1,402,697 966,717
Stockholders' equity   187,189   117,753  

Total liabilities and stockholders' equity

$ 1,589,886 $ 1,084,470  
       
Net interest income $ 54,482 $ 37,353
Net earning assets $ 195,641 $ 116,596  
Interest rate spread 3.81 % 3.77 %
Net interest margin 3.88 % 3.84 %

Ratio of interest-earning assets to Interest-bearing liabilities

116.19 % 113.61 %
  1. Includes nonaccrual loans.
  2. Includes FHLB and FRB stock.
         

BEAR STATE FINANCIAL, INC.

ASSET QUALITY ANALYSIS - UNAUDITED
(In thousands)
 
 
December 31, 2015 December 31, 2014
% Total % Total Increase
Net (2) Assets Net (2) Assets (Decrease)
Nonaccrual Loans:
One- to four-family residential $ 6,455 0.34 % $ 4,959 0.33 % $ 1,496
Multifamily 230 0.01 % -- -- 230
Nonfarm nonresidential 6,638 0.35 % 3,113 0.21 % 3,525
Farmland 973 0.05 % 734 0.05 % 239
Construction and land development 622 0.03 % 624 0.04 % (2 )
Commercial 4,235 0.22 % 306 0.02 % 3,929
Consumer   187 0.01 %   34 --     153  
 
Total nonaccrual loans 19,340 1.01 % 9,770 0.65 % 9,570
 
Accruing loans 90 days or more past due 451 0.02 353 0.02 % 98
 
Real estate owned   3,439 0.18 %   4,792 0.31 %   (1,353 )
 
Total nonperforming assets 23,230 1.21 % 14,915 0.98 % 8,315
Performing restructured loans   284 0.01 %   566 0.04 %   (282 )
 
Total nonperforming assets and performing restructured loans (1) $ 23,514 1.22 % $ 15,481 1.02 % $ 8,033  
  1. The table does not include substandard loans which were judged not to be impaired totaling $30.2 million at December 31, 2015, and $24.9 million at December 31, 2014, or acquired ASC 310-30 purchased credit impaired loans which are considered performing at December 31, 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
12/31/2015 9/30/2015 6/30/2015 3/31/2015 12/31/2014
Net income available to common stockholders $ 2,560   $ 3,213   $ 2,531   $ 2,267   $ 4,814  
Average common stockholders' equity 223,083 177,824 175,025 172,811 166,793
Less Average Intangible Assets:
Goodwill (40,216 ) (25,717 ) (25,717 ) (25,717 ) (25,773 )
Core Deposit Intangible, net of accumulated amortization   (11,549 )   (6,972 )   (7,127 )   (7,284 )   (7,441 )
 
Average tangible common stockholders' equity $ 171,318   $ 145,135   $ 142,181   $ 139,810   $ 133,579  
 
Annualized return on average tangible common stockholders' equity   5.9 %   8.8 %   7.1 %   6.6 %   14.3 %
 
         
BEAR STATE FINANCIAL, INC.
CALCULATION OF RATIO OF TANGIBLE BOOK VALUE PER COMMON SHARE - UNAUDITED
(In thousands, except share data)
 
 
As of
12/31/2015 9/30/2015 6/30/2015 3/31/2015 12/31/2014
Total common stockholder's equity 223,157 178,670 174,831 173,128 170,454
Less intangible assets:
Goodwill (40,196 ) (25,717 ) (25,717 ) (25,717 ) (25,717 )
Core Deposit Intangible, net of accumulated amortization   (11,374 )   (6,869 )   (7,026 )   (7,182 )   (7,338 )
Total intangibles   (51,570 )   (32,586 )   (32,743 )   (32,899 )   (33,055 )
Total tangible common stockholder's equity $ 171,587   $ 146,084   $ 142,088   $ 140,229   $ 137,399  
 
Common Shares Outstanding   37,988     33,350     33,376     33,376     33,366  
 
Tangible book value per common share $ 4.52   $ 4.38   $ 4.26   $ 4.20   $ 4.12  
 
       

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
2015 2015 2015 2015 2014
Net income (loss) $ 2,560 $ 3,213 $ 2,531 $ 2,267 $ 4,814
Adj: Gain on sale of securities, net 68 - - (88 ) (1 )
Adj: Merger, acquisition and integration expenses 1,081 166 441 565 55
Adj: Rebranding expenses 267 6 158 395 219
Adj: Pension plan payment
Adj: Real estate owned provision - - - - -
Adj. Data processing termination fees 1,186
Adj: Deferred tax asset valuation allowance reversal (1,550 )
Tax Effect of Adjustments     (996 )     (66 )     (229 )     (334 )     (105 )
Total core income (A) $ 4,166     $ 3,319     $ 2,901     $ 2,805     $ 3,432  
 
Total revenue $ 21,443 $ 15,538 $ 15,357 $ 15,689 $ 16,700
Adj: Gain on sale of securities, net     68       -       -       (88 )     (1 )
Total core revenue   $ 21,511     $ 15,538     $ 15,357     $ 15,601     $ 16,699  
 
Total non-interest expense $ 17,044 $ 10,465 $ 11,273 $ 12,237 $ 11,387
Less: Merger, acquisition and integration expenses (1,081 ) (166 ) (441 ) (565 ) (55 )
Less: Rebranding Expenses (267 ) (6 ) (158 ) (395 ) (219 )
Less: Pension plan payment - - - - -
Less: Real estate owned provision - - - - -
Less: Data processing termination fees     (1,186 )     -       -       -       -  
Core noninterest expense   $ 14,510     $ 10,293     $ 10,674     $ 11,277     $ 11,113  
 
Total average assets (B) $ 1,920,617 $ 1,466,342 $ 1,468,521 $ 1,504,716 $ 1,525,455
Total average stockholders' equity (C) 223,083 177,824 175,025 172,811 166,793
Total average tangible stockholders' equity (D) 171,318 145,135 142,181 139,810 133,579
Total tangible stockholders' equity, period end (E) 171,587 146,084 142,088 140,229 137,399
 
Total common shares outstanding, period-end (F) 37,987,722 33,349,512 33,375,753 33,375,753 33,365,845
Average diluted shares outstanding (G) 38,173,234 33,497,298 33,521,490 33,551,776 33,508,230
 
Core earnings per share, diluted (A/G) 0.11 0.10 0.09 0.08 0.10
Tangible book value per share, period-end (E/F) $ 4.52 $ 4.38 $ 4.26 $ 4.20 $ 4.12
 
Core return on average assets (A/B) 0.86 % 0.90 % 0.79 % 0.76 % 0.89 %
Core return on average equity (A/C) 7.41 % 7.41 % 6.65 % 6.58 % 8.16 %
Core return on average tangible equity (A/D) 9.65 % 9.07 % 8.18 % 8.14 % 10.19 %
Efficiency ratio(1) 67.67 % 66.24 % 69.51 % 71.88 % 66.54 %
  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.