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8-K - FORM 8-K - BEAR STATE FINANCIAL, INC. | bsf20160420_8k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
900 S. Shackleford, Suite 401 |
FOR FURTHER INFORMATION CONTACT: |
Little Rock, AR 72211 |
Mark McFatridge | CEO |
|
Matt Machen | CFO |
|
501.975.6033 |
Bear State Financial, Inc. Announces First Quarter 2016 Earnings
FINANCIAL HIGHLIGHTS:
● |
First quarter GAAP net income was $3.3 million or $0.09 per common share, compared to GAAP net income of $2.3 million or $0.07 per common share for the first quarter of 2015. |
● |
First quarter 2016 core earnings were $3.7 million or $0.10 per common share, compared to core earnings of $2.8 million or $0.08 per common share in the first quarter of 2015. |
● |
Book value per common share was $5.96 at March 31, 2016, a 15% increase from $5.19 at March 31, 2015. |
● |
During the first quarter of 2016 Bear State Financial completed the consolidation and integration of Metropolitan National Bank, Springfield, MO into the Bear State Bank charter. |
Little Rock, AR – April 20, 2016 – Bear State Financial, Inc. (the “Company,” NASDAQ: BSF), today reported earnings of $3.3 million and earnings per diluted common share of $0.09 in the first quarter of 2016, compared to earnings of $2.3 million or $0.07 per diluted common share in the first quarter of 2015. Core earnings for the first quarter of 2016 were $3.7 million or $0.10 per diluted common share compared to core earnings of $2.8 million or $0.08 per diluted common share in the first quarter of 2015.
On February 22, 2016, the Company consolidated the Metropolitan National Bank (Springfield, MO) (“MNB”) charter into the Bear State Bank charter and converted MNB’s systems to the Company’s core technology platform. The Company has begun experiencing significant operational and organizational improvements as a result of the charter consolidation and systems conversion, the benefits of which are expected to be realized in the second quarter of 2016. In addition, the Company intends to consolidate six locations, or 11% of the branch network, by the end of April. The Company has notified all customers affected by these consolidations, and will be automatically transferring customer accounts to the next most convenient location.
“Our first quarter results continue to highlight the strengths of Bear State – disciplined growth, operational efficiency, and the ability to acquire and integrate,” said Mark McFatridge, President and CEO at Bear State Financial. “Only eight months after announcing the acquisition, we successfully completed the charter consolidation and systems integration of Metropolitan National Bank during the quarter. Our previously announced closure of 11% of our branch network will be completed during the second quarter. This initiative will improve operational efficiencies and reduce market overlaps. Additionally, our teammates continue to do a tremendous job in uncovering lending opportunities. While many of these opportunities are with creditworthy borrowers that we would love to bank, the competitive banking environment in which we operate is dictating terms that fall outside of our disciplined risk culture. We have, however, had significant success in our strategic initiative of diversifying our lending portfolio, as evidenced by the 5% growth in commercial and industrial loans during the quarter. This initiative will allow us the opportunity for relationships where we can fully deliver the value of the Bear.”
FINANCIAL CONDITION
Total assets were $1.92 billion at March 31, 2016, a 30% increase compared to $1.48 billion at March 31, 2015. Total deposits were $1.61 billion at March 31, 2016, a 30% increase compared to $1.24 billion at March 31, 2015. The increase in both assets and deposits was primarily due to the MNB acquisition on October 1, 2015. Total loans were $1.46 billion at March 31, 2016, an increase of $418 million, or 40% compared to the March 31, 2015.
Total stockholders’ equity was $224 million at March 31, 2016, a 29% increase from $173 million at March 31, 2015. Tangible common stockholders’ equity was $172 million at March 31, 2016, a 23% increase from $140 million at March 31, 2015. Book value per common share was $5.96 at March 31, 2016, a 15% increase from $5.19 at March 31, 2015. Tangible book value per common share was $4.59 at March 31, 2016, a 9% increase from $4.20 at March 31, 2015. The Company’s ratio of total stockholders’ equity to total assets decreased to 11.64% at March 31, 2016, compared to 11.72% at March 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 first quarter 2016 net income of $3.3 million or $0.09 per diluted common share compared to net income of $2.3 million or $0.07 per diluted common share in the first quarter of 2015, resulting in a return on average assets of 0.71% in the first quarter of 2016, compared to 0.61% in the first 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 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.
First quarter 2016 core earnings totaled $3.7 million or $0.10 per diluted common share, compared to core earnings of $2.8 million or $0.08 per diluted common share in the first quarter of 2015. The core return on average assets measured 0.77% and 0.76%, core return on average equity measured 6.61% and 6.58% and core return on average tangible equity measured 8.58% and 8.14% each for the first quarters of 2016 and 2015, respectively. Non-core items during the first quarter of 2016 included merger, acquisition and integration expenses of $250,000, rebranding expenses of $195,000 related to the acquisition of MNB, branch reduction expenses of $63,000 and a loss on sale of securities of $2,000. Collectively, the effect of all non-core items, net of taxes, decreased GAAP net income by approximately $315,000, or approximately $0.01 of diluted earnings per share.
Net interest income for the first quarter of 2016 was $16.9 million compared to $12.6 million for the same period in 2015. Interest income for the first quarter of 2016 was $18.8 million compared to $14.1 million for the same period in 2015. The increase in interest income for the first quarter of 2016 compared to the same period in 2015 was primarily related to increases in the average balances of loans receivable and investment securities as a result of the MNB acquisition. Interest expense for the first quarter of 2016 was $1.9 million compared to $1.5 million for the same period in 2015. The increase in interest expense for the first quarter of 2016 compared to the same period in 2015 was primarily due to an increase in the average balance of deposit accounts as a result of the MNB acquisition.
Net interest margin measured 4.03% for the first quarter of 2016, compared to 3.85% for the same period in 2015. The Company’s net interest margin increased primarily as a result of an increase in average yield on interest earning assets resulting from a higher percentage of loans in the mix of interest earning assets. The average cost of total interest-bearing liabilities decreased to 0.51% for the first quarter 2016, compared to 0.54% for the same period in 2015.
Noninterest income is generated primarily through deposit account fee income, profit on sale of loans, and earnings on life insurance policies. Total noninterest income for the three months ended March 31, 2016 increased to $3.7 million from $3.1 million for the same period in 2015, an 18% increase. The increase was primarily due to an increase in deposit fee income and gain on sale of loans. The increase in deposit fee income was primarily due to an increase in deposit accounts resulting from the acquisition of MNB. The increase in gain on sale of loans was due to an increase in the number of mortgage loans sold and the average profit per loan.
Total noninterest expense increased $3.1 million or 25% during the first quarter of 2016 compared to the first quarter of 2015. The variance in total noninterest expense was primarily due to expenses incurred in connection with the MNB acquisition. The Company’s core efficiency ratio was 71.96% in the first quarter of 2016 compared to 71.88% in the first quarter of 2015.
The ratio of nonperforming assets to total assets increased to 1.23% at March 31, 2016, compared to 0.99% at March 31, 2015. The increase in nonperforming assets is primarily attributable to a single relationship that management continues to actively monitor. Recently occurring developments have been encouraging and management anticipates a resolution of this matter later this year. Management believes that current reserves adequately reflect its estimated loss exposure. The allowance for loan losses represented 1.02% of total loans at March 31, 2016, compared to 1.32% at March 31, 2015. The ratio of allowance for loan losses plus discount on acquired loans to total loans was 1.99% at March 31, 2016, compared to 2.20% at March 31, 2015. The ratio of the allowance for loan losses to nonperforming loans was 72.84% at March 31, 2016, compared to 138.60% at March 31, 2015. Annualized net charge-offs as a percentage of average loans for the quarter ended March 31, 2016 was 0.04% compared to 0.08% for the quarter ended March 31, 2015. Provision for loan losses increased from $300,000 for the first quarter of 2015 to $489,000 for the first quarter of 2016. The increase in provision is attributable to loan originations and a migration of the MNB and First National 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. 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 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 55 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; 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 Company’s plans to reduce the total number of its retail branches and the Company’s future expectations regarding certain nonperforming assets. 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)
March |
December |
September |
June |
March |
||||||||||||||||
2016 |
2015 |
2015 |
2015 |
2015 |
||||||||||||||||
Balance sheet data, at quarter end: |
||||||||||||||||||||
Commercial real estate - mortgage loans |
$ | 555,264 | $ | 561,910 | $ | 401,044 | $ | 378,878 | $ | 388,043 | ||||||||||
Consumer real estate - mortgage loans |
395,509 | 401,594 | 309,951 | 307,183 | 315,082 | |||||||||||||||
Farmland |
93,380 | 94,235 | 53,192 | 48,058 | 50,244 | |||||||||||||||
Construction and land development |
117,283 | 116,015 | 93,688 | 103,094 | 100,918 | |||||||||||||||
Commercial and industrial loans |
258,479 | 246,304 | 186,772 | 185,266 | 152,913 | |||||||||||||||
Consumer and other |
37,673 | 38,594 | 32,428 | 32,455 | 32,613 | |||||||||||||||
Total loans |
1,457,588 | 1,458,652 | 1,077,075 | 1,054,934 | 1,039,813 | |||||||||||||||
Allowance for loan losses |
(14,866 | ) | (14,550 | ) | (13,975 | ) | (13,854 | ) | (13,762 | ) | ||||||||||
Investment securities |
185,143 | 198,585 | 164,564 | 182,525 | 176,599 | |||||||||||||||
Goodwill |
40,196 | 40,196 | 25,717 | 25,717 | 25,717 | |||||||||||||||
Core deposit intangible, net |
11,119 | 11,374 | 6,869 | 7,026 | 7,182 | |||||||||||||||
Total assets |
1,922,301 | 1,920,216 | 1,470,725 | 1,451,281 | 1,477,597 | |||||||||||||||
Noninterest-bearing deposits |
216,173 | 234,879 | 173,525 | 168,225 | 176,924 | |||||||||||||||
Total deposits |
1,610,718 | 1,607,683 | 1,209,176 | 1,208,800 | 1,236,258 | |||||||||||||||
Short term borrowings |
8,990 | 12,075 | 10,366 | 3,530 | 5,576 | |||||||||||||||
FHLB advances |
50,178 | 53,518 | 49,457 | 41,591 | 38,936 | |||||||||||||||
Other borrowings |
22,681 | 18,862 | 18,843 | 18,450 | 18,706 | |||||||||||||||
Total stockholders' equity |
223,798 | 223,157 | 178,670 | 174,831 | 173,128 | |||||||||||||||
Balance sheet data, quarterly averages: |
||||||||||||||||||||
Total loans |
$ | 1,461,091 | $ | 1,445,357 | $ | 1,077,500 | $ | 1,059,235 | $ | 1,045,946 | ||||||||||
Investment securities |
206,258 | 209,629 | 180,831 | 189,285 | 183,857 | |||||||||||||||
Total earning assets |
1,702,917 | 1,699,227 | 1,294,619 | 1,294,523 | 1,325,125 | |||||||||||||||
Goodwill |
40,196 | 40,216 | 25,717 | 25,717 | 25,717 | |||||||||||||||
Core deposit intangible, net |
11,284 | 11,549 | 6,972 | 7,127 | 7,284 | |||||||||||||||
Total assets |
1,920,833 | 1,920,617 | 1,466,342 | 1,468,521 | 1,504,716 | |||||||||||||||
Noninterest-bearing deposits |
221,909 | 234,206 | 176,219 | 173,248 | 175,457 | |||||||||||||||
Interest-bearing deposits |
1,369,759 | 1,364,403 | 1,036,330 | 1,055,200 | 1,072,255 | |||||||||||||||
Total deposits |
1,591,668 | 1,598,609 | 1,212,549 | 1,228,448 | 1,247,712 | |||||||||||||||
Short term borrowings |
12,163 | 26,872 | 6,166 | 4,481 | 11,902 | |||||||||||||||
FHLB advances |
64,488 | 47,127 | 47,614 | 38,625 | 50,206 | |||||||||||||||
Other borrowings |
25,353 | 18,983 | 18,641 | 18,564 | 18,482 | |||||||||||||||
Total stockholders' equity |
224,416 | 223,083 | 177,824 | 175,025 | 172,811 | |||||||||||||||
Statement of operations data for the three months ended: | ||||||||||||||||||||
Interest income |
$ | 18,790 | $ | 19,468 | $ | 13,749 | $ | 13,523 | $ | 14,106 | ||||||||||
Interest expense |
1,864 | 1,744 | 1,529 | 1,563 | 1,528 | |||||||||||||||
Net interest income |
16,926 | 17,724 | 12,220 | 11,960 | 12,578 | |||||||||||||||
Provision for loan losses |
489 | 866 | 331 | 300 | 300 | |||||||||||||||
Net interest income after provision for loan losses |
16,437 | 16,858 | 11,889 | 11,660 | 12,278 | |||||||||||||||
Noninterest income |
3,673 | 3,721 | 3,318 | 3,397 | 3,111 | |||||||||||||||
Noninterest expense |
15,331 | 17,044 | 10,465 | 11,273 | 12,237 | |||||||||||||||
Income before taxes |
4,779 | 3,535 | 4,742 | 3,784 | 3,152 | |||||||||||||||
Income tax provision (benefit) |
1,436 | 972 | 1,529 | 1,253 | 885 | |||||||||||||||
Net income |
$ | 3,343 | $ | 2,563 | $ | 3,213 | $ | 2,531 | $ | 2,267 |
BEAR STATE FINANCIAL, INC.
SELECTED CONSOLIDATED FINANCIAL DATA - UNAUDITED
March |
December |
September |
June |
March |
||||||||||||||||
2016 |
2015 |
2015 |
2015 |
2015 |
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Common stock data: |
||||||||||||||||||||
Net income per share, diluted |
$ | 0.09 | $ | 0.07 | $ | 0.10 | $ | 0.08 | $ | 0.07 | ||||||||||
Core earnings per share, diluted |
$ | 0.10 | $ | 0.11 | $ | 0.10 | $ | 0.09 | $ | 0.08 | ||||||||||
Book value per share |
$ | 5.96 | $ | 5.87 | $ | 5.36 | $ | 5.24 | $ | 5.19 | ||||||||||
Tangible book value per share |
$ | 4.59 | $ | 4.52 | $ | 4.38 | $ | 4.26 | $ | 4.20 | ||||||||||
Diluted weighted average shares outstanding |
37,918,188 | 38,173,234 | 33,497,298 | 33,521,490 | 33,551,776 | |||||||||||||||
End of period shares outstanding |
37,560,031 | 37,987,722 | 33,349,512 | 33,375,753 | 33,375,753 | |||||||||||||||
Profitability and performance ratios: |
||||||||||||||||||||
Return on average assets |
0.71 | % | 0.53 | % | 0.87 | % | 0.69 | % | 0.61 | % | ||||||||||
Core return on average assets |
0.77 | % | 0.86 | % | 0.90 | % | 0.79 | % | 0.76 | % | ||||||||||
Return on average equity |
6.04 | % | 4.56 | % | 7.17 | % | 5.80 | % | 5.32 | % | ||||||||||
Core return on average equity |
6.61 | % | 7.41 | % | 7.41 | % | 6.65 | % | 6.58 | % | ||||||||||
Core return on average tangible equity |
8.58 | % | 9.65 | % | 9.07 | % | 8.18 | % | 8.14 | % | ||||||||||
Net interest margin |
4.03 | % | 4.14 | % | 3.74 | % | 3.71 | % | 3.85 | % | ||||||||||
Noninterest income to total revenue |
17.83 | % | 17.35 | % | 21.35 | % | 22.12 | % | 19.83 | % | ||||||||||
Noninterest income to average assets |
0.78 | % | 0.77 | % | 0.90 | % | 0.93 | % | 0.84 | % | ||||||||||
Noninterest expense to average assets |
3.24 | % | 3.52 | % | 2.83 | % | 3.08 | % | 3.30 | % | ||||||||||
Efficiency ratio(1) |
71.96 | % | 67.66 | % | 66.24 | % | 69.51 | % | 71.88 | % | ||||||||||
Average loans to average deposits |
91.80 | % | 90.41 | % | 88.86 | % | 86.23 | % | 83.83 | % | ||||||||||
Securities to total assets |
9.63 | % | 10.34 | % | 11.19 | % | 12.58 | % | 11.95 | % | ||||||||||
Asset quality ratios: |
||||||||||||||||||||
Allowance for loan losses to total loans |
1.02 | % | 1.00 | % | 1.30 | % | 1.31 | % | 1.32 | % | ||||||||||
Allowance for loan losses to non-performing loans |
72.84 | % | 75.23 | % | 83.18 | % | 134.94 | % | 138.60 | % | ||||||||||
Nonperforming loans to total loans |
1.40 | % | 1.36 | % | 1.56 | % | 0.97 | % | 0.95 | % | ||||||||||
Nonperforming assets to total assets |
1.23 | % | 1.22 | % | 1.30 | % | 0.94 | % | 0.99 | % | ||||||||||
Annualized net charge offs to average total loans |
0.04 | % | 0.08 | % | 0.08 | % | 0.08 | % | 0.08 | % | ||||||||||
Regulatory capital ratios: |
||||||||||||||||||||
Tier 1 leverage ratio |
9.15 | % | 9.15 | % | 9.83 | % | 9.54 | % | 8.96 | % | ||||||||||
Common equity tier 1 capital ratio |
10.63 | % | 10.62 | % | 11.77 | % | 11.59 | % | 11.39 | % | ||||||||||
Tier 1 capital to risk weighted assets |
10.63 | % | 10.62 | % | 11.77 | % | 11.59 | % | 11.39 | % | ||||||||||
Total capital to risk weighted assets |
11.55 | % | 11.52 | % | 12.94 | % | 12.77 | % | 12.58 | % |
(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
(In thousands, except share data)
(Unaudited)
March 31, 2016 |
December 31, 2015 |
|||||||
ASSETS | ||||||||
Cash and cash equivalents |
$ | 64,699 | $ | 52,131 | ||||
Interest-bearing time deposits in banks |
10,681 | 10,930 | ||||||
Federal funds sold |
516 | 18 | ||||||
Investment securities available for sale |
185,143 | 198,585 | ||||||
Other investment securities, at cost |
10,490 | 9,563 | ||||||
Loans receivable, net of allowance of $14,866 and $14,550, respectively |
1,442,722 | 1,444,102 | ||||||
Loans held for sale |
10,103 | 7,326 | ||||||
Accrued interest receivable |
5,927 | 6,157 | ||||||
Real estate owned - net |
3,164 | 3,642 | ||||||
Office properties and equipment - net |
63,250 | 63,641 | ||||||
Cash surrender value of life insurance |
56,014 | 52,602 | ||||||
Goodwill |
40,196 | 40,196 | ||||||
Core deposit intangible - net |
11,119 | 11,374 | ||||||
Deferred tax asset, net |
15,009 | 16,713 | ||||||
Prepaid expenses and other assets |
3,268 | 3,236 | ||||||
TOTAL |
$ | 1,922,301 | $ | 1,920,216 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
LIABILITIES: |
||||||||
Noninterest bearing deposits |
$ | 216,173 | $ | 234,879 | ||||
Interest bearing deposits |
1,394,545 | 1,372,804 | ||||||
Total deposits |
1,610,718 | 1,607,683 | ||||||
Short term borrowings |
8,990 | 12,075 | ||||||
Other borrowings |
72,859 | 72,380 | ||||||
Other liabilities |
5,936 | 4,921 | ||||||
Total liabilities |
1,698,503 | 1,697,059 | ||||||
STOCKHOLDERS’ EQUITY: |
||||||||
Preferred stock, $0.01 par value—5,000,000 shares authorized; none issued at March 31, 2016 and December 31, 2015 |
-- | -- | ||||||
Common stock, $0.01 par value—100,000,000 shares authorized; 37,560,031 and 37,987,722 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively |
376 | 380 | ||||||
Additional paid-in capital |
208,476 | 211,817 | ||||||
Accumulated other comprehensive income |
1,029 | 386 | ||||||
Retained earnings |
13,917 | 10,574 | ||||||
Total stockholders’ equity |
223,798 | 223,157 | ||||||
TOTAL |
$ | 1,922,301 | $ | 1,920,216 |
BEAR STATE FINANCIAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except earnings per share)
(Unaudited)
Three Months Ended |
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March 31, |
March 31, |
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2016 |
2015 |
|||||||
INTEREST INCOME: |
||||||||
Loans receivable |
$ | 17,685 | $ | 13,204 | ||||
Investment securities: |
||||||||
Taxable |
537 | 298 | ||||||
Nontaxable |
485 | 508 | ||||||
Other |
83 | 96 | ||||||
Total interest income |
18,790 | 14,106 | ||||||
INTEREST EXPENSE: |
||||||||
Deposits |
1,515 | 1,304 | ||||||
Other borrowings |
349 | 224 | ||||||
Total interest expense |
1,864 | 1,528 | ||||||
NET INTEREST INCOME |
16,926 | 12,578 | ||||||
PROVISION FOR LOAN LOSSES |
489 | 300 | ||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |
16,437 | 12,278 | ||||||
NONINTEREST INCOME: |
||||||||
Net gain (loss) on sales of investment securities |
(2 | ) | 88 | |||||
Deposit fee income |
2,150 | 1,739 | ||||||
Earnings on life insurance policies |
412 | 367 | ||||||
Gain on sale of loans |
794 | 637 | ||||||
Other |
319 | 280 | ||||||
Total noninterest income |
3,673 | 3,111 | ||||||
NONINTEREST EXPENSES: |
||||||||
Salaries and employee benefits |
8,250 | 6,459 | ||||||
Net occupancy expense |
1,928 | 1,434 | ||||||
Real estate owned, net |
28 | 38 | ||||||
Amortization of intangible assets |
255 | 156 | ||||||
Data processing |
1,433 | 1,169 | ||||||
Professional fees |
379 | 376 | ||||||
Advertising and public relations |
496 | 680 | ||||||
Postage and supplies |
290 | 235 | ||||||
Other |
2,272 | 1,690 | ||||||
Total noninterest expenses |
15,331 | 12,237 | ||||||
INCOME BEFORE INCOME TAXES |
4,779 | 3,152 | ||||||
INCOME TAX PROVISION |
1,436 | 885 | ||||||
NET INCOME |
$ | 3,343 | $ | 2,267 | ||||
Basic earnings per common share |
$ | 0.09 | $ | 0.07 | ||||
Diluted earnings per common share |
$ | 0.09 | $ | 0.07 |
BEAR STATE FINANCIAL, INC.
AVERAGE CONSOLIDATED BALANCE SHEETS and NET INTEREST ANALYSIS - UNAUDITED
(In thousands)
Three Months Ended March 31, |
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2016 |
2015 |
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Average Balance |
Interest |
Average Yield/ Cost |
Average Balance |
Interest |
Average Yield/ Cost |
|||||||||||||||||||
(Dollars in Thousands) |
||||||||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||||||
Loans receivable(1) |
$ | 1,461,091 | $ | 17,685 | 4.91 | % | $ | 1,045,946 | $ | 13,204 | 5.12 | % | ||||||||||||
Investment securities(2) |
206,258 | 1,022 | 2.01 | 183,857 | 806 | 1.78 | ||||||||||||||||||
Other interest-earning assets |
35,568 | 83 | 0.95 | 95,322 | 96 | 0.41 | ||||||||||||||||||
Total interest-earning assets |
1,702,917 | 18,790 | 4.47 | 1,325,125 | 14,106 | 4.32 | ||||||||||||||||||
Noninterest-earning assets |
217,916 | 179,591 | ||||||||||||||||||||||
Total assets |
$ | 1,920,833 | $ | 1,504,716 | ||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||||||
Deposits |
$ | 1,369,759 | 1,515 | 0.45 | $ | 1,072,255 | 1,304 | 0.49 | ||||||||||||||||
Other borrowings |
102,004 | 349 | 1.39 | 80,590 | 224 | 1.13 | ||||||||||||||||||
Total interest-bearing liabilities |
1,471,763 | 1,864 | 0.51 | 1,152,845 | 1,528 | 0.54 | ||||||||||||||||||
Noninterest-bearing deposits |
221,909 | 175,457 | ||||||||||||||||||||||
Noninterest-bearing liabilities |
2,745 | 3,603 | ||||||||||||||||||||||
Total liabilities |
1,696,417 | 1,331,905 | ||||||||||||||||||||||
Stockholders' equity |
224,416 | 172,811 | ||||||||||||||||||||||
Total liabilities and stockholders' equity |
$ | 1,920,833 | $ | 1,504,716 | ||||||||||||||||||||
Net interest income |
$ | 16,926 | $ | 12,578 | ||||||||||||||||||||
Net earning assets |
$ | 231,154 | $ | 172,280 | ||||||||||||||||||||
Interest rate spread |
3.96 | % | 3.78 | % | ||||||||||||||||||||
Net interest margin |
4.03 | % | 3.85 | % | ||||||||||||||||||||
Ratio of interest-earning assets to Interest-bearing liabilities |
11.71 | % | 114.94 | % |
(1) Includes nonaccrual loans.
(2) Includes FHLB and FRB stock.
BEAR STATE FINANCIAL, INC.
ASSET QUALITY ANALYSIS - UNAUDITED
(In thousands)
March 31, 2016 |
December 31, 2015 |
|||||||||||||||||||
Net (2) |
% Total Assets |
Net (2) |
% Total Assets |
Increase (Decrease) |
||||||||||||||||
Nonaccrual Loans: |
||||||||||||||||||||
One- to four-family residential |
$ | 8,438 | 0.45 | % | $ | 6,455 | 0.34 | % | $ | 1,983 | ||||||||||
Multifamily |
157 | 0.01 | % | 230 | 0.01 | % | (73 | ) | ||||||||||||
Nonfarm nonresidential |
5,657 | 0.29 | % | 6,638 | 0.35 | % | (981 | ) | ||||||||||||
Farmland |
817 | 0.04 | % | 973 | 0.05 | % | (156 | ) | ||||||||||||
Construction and land development |
871 | 0.05 | % | 622 | 0.03 | % | 249 | |||||||||||||
Commercial |
4,208 | 0.22 | % | 4,235 | 0.22 | % | (27 | ) | ||||||||||||
Consumer |
260 | 0.01 | % | 187 | 0.01 | % | 73 | |||||||||||||
Total nonaccrual loans |
20,408 | 1.07 | % | 19,340 | 1.01 | % | 1,068 | |||||||||||||
Accruing loans 90 days or more past due |
-- | -- | 451 | 0.02 | % | (451 | ) | |||||||||||||
Real estate owned |
3,164 | 0.16 | % | 3,642 | 0.19 | % | (478 | ) | ||||||||||||
Total nonperforming assets |
23,572 | 1.23 | % | 23,433 | 1.22 | % | 139 | |||||||||||||
Performing restructured loans |
281 | 0.01 | % | 284 | 0.01 | % | (3 | ) | ||||||||||||
Total nonperforming assets and performing restructured loans (1) |
$ | 23,853 | 1.24 | % | $ | 23,717 | 1.23 | % | $ | 136 |
(1) |
The table does not include substandard loans which were judged not to be impaired totaling $31.2 million at March 31, 2016 and $30.2 million at December 31, 2015 or acquired ASC 310-30 purchased credit impaired loans which are considered performing at March 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
(In thousands)
For the Quarter Ending |
||||||||||||||||||||
3/31/2016 |
12/31/2015 |
9/30/2015 |
6/30/2015 |
3/31/2015 |
||||||||||||||||
Net income available to common stockholders |
$ | 3,343 | $ | 2,563 | $ | 3,213 | $ | 2,531 | $ | 2,267 | ||||||||||
Average common stockholders' equity |
224,416 | 223,083 | 177,824 | 175,025 | 172,811 | |||||||||||||||
Less Average Intangible Assets: |
||||||||||||||||||||
Goodwill |
(40,196 | ) | (40,216 | ) | (25,717 | ) | (25,717 | ) | (25,717 | ) | ||||||||||
Core deposit intangible, net of accumulated amortization |
(11,284 | ) | (11,549 | ) | (6,972 | ) | (7,127 | ) | (7,284 | ) | ||||||||||
Average tangible common stockholders' equity |
$ | 172,936 | $ | 171,318 | $ | 145,135 | $ | 142,181 | $ | 139,810 | ||||||||||
Annualized return on average tangible common stockholders' equity |
7.8 | % | 5.9 | % | 8.8 | % | 7.1 | % | 6.6 | % |
BEAR STATE FINANCIAL, INC.
CALCULATION OF RATIO OF TANGIBLE BOOK VALUE PER COMMON SHARE - UNAUDITED
(In thousands, except share data)
For the Quarter Ending |
||||||||||||||||||||
3/31/2016 |
12/31/2015 |
9/30/2015 |
6/30/2015 |
3/31/2015 |
||||||||||||||||
Total common stockholder's equity |
$ | 223,798 | $ | 223,157 | $ | 178,670 | $ | 174,831 | $ | 173,128 | ||||||||||
Less intangible assets: |
||||||||||||||||||||
Goodwill |
(40,196 | ) | (40,196 | ) | (25,717 | ) | (25,717 | ) | (25,717 | ) | ||||||||||
Core deposit intangible, net of accumulated amortization |
(11,119 | ) | (11,374 | ) | (6,869 | ) | (7,026 | ) | (7,182 | ) | ||||||||||
Total intangible assets |
(51,315 | ) | (51,570 | ) | (32,586 | ) | (32,743 | ) | (32,899 | ) | ||||||||||
Total tangible common stockholder's equity |
$ | 172,483 | $ | 171,587 | $ | 146,084 | $ | 142,088 | $ | 140,229 | ||||||||||
Common Shares Outstanding |
37,560 | 37,988 | 33,350 | 33,376 | 33,376 | |||||||||||||||
Tangible book value per common share |
$ | 4.59 | $ | 4.52 | $ | 4.38 | $ | 4.26 | $ | 4.20 |
BEAR STATE FINANCIAL, INC.
RECONCILIATION OF NON-GAAP SELECTED CONSOLIDATED FINANCIAL DATA - UNAUDITED
(In thousands, except share data)
For the Quarter Ending |
|||||||||||||||||||||
March |
December |
September |
June |
March |
|||||||||||||||||
2016 |
2015 |
2015 |
2015 |
2015 |
|||||||||||||||||
Net income (loss) |
$ | 3,343 | $ | 2,563 | $ | 3,213 | $ | 2,531 | $ | 2,267 | |||||||||||
Adj: Loss (gain) on sale of securities, net |
2 | 68 | - | - | (88 | ) | |||||||||||||||
Adj: Merger, acquisition and integration expenses |
250 | 1,081 | 166 | 441 | 565 | ||||||||||||||||
Adj: Rebranding expenses |
195 | 267 | 6 | 158 | 395 | ||||||||||||||||
Adj: Branch reduction expenses |
63 | ||||||||||||||||||||
Adj: Data processing termination fees |
1,186 | ||||||||||||||||||||
Tax Effect of Adjustments |
(195 | ) | (996 | ) | (66 | ) | (229 | ) | (334 | ) | |||||||||||
Total core income |
(A) |
$ | 3,658 | $ | 4,169 | $ | 3,319 | $ | 2,901 | $ | 2,805 | ||||||||||
Total revenue |
$ | 20,599 | $ | 21,445 | $ | 15,538 | $ | 15,357 | $ | 15,689 | |||||||||||
Adj: Loss (gain) on sale of securities, net |
2 | 68 | - | - | (88 | ) | |||||||||||||||
Total core revenue |
|
$ | 20,601 | $ | 21,513 | $ | 15,538 | $ | 15,357 | $ | 15,601 | ||||||||||
Total non-interest expense |
$ | 15,331 | $ | 17,044 | $ | 10,465 | $ | 11,273 | $ | 12,237 | |||||||||||
Less: Merger, acquisition and integration expenses |
(250 | ) | (1,081 | ) | (166 | ) | (441 | ) | (565 | ) | |||||||||||
Less: Rebranding expenses |
(195 | ) | (267 | ) | (6 | ) | (158 | ) | (395 | ) | |||||||||||
Less: Branch reduction expenses |
(63 | ) | - | - | - | - | |||||||||||||||
Less: Pension plan payment |
- | - | - | - | - | ||||||||||||||||
Less: Real estate owned provision |
- | - | - | - | - | ||||||||||||||||
Less: Data processing termination fees |
- | (1,186 | ) | - | - | - | |||||||||||||||
Core noninterest expense |
|
$ | 14,823 | $ | 14,510 | $ | 10,293 | $ | 10,674 | $ | 11,277 | ||||||||||
Total average assets |
(B) |
$ | 1,920,833 | $ | 1,920,617 | $ | 1,466,342 | $ | 1,468,521 | $ | 1,504,716 | ||||||||||
Total average stockholders' equity |
(C) |
224,416 | 223,083 | 177,824 | 175,025 | 172,811 | |||||||||||||||
Total average tangible stockholders' equity |
(D) |
172,936 | 171,318 | 145,135 | 142,181 | 139,810 | |||||||||||||||
Total tangible stockholders' equity, period end |
(E) |
172,483 | 171,587 | 146,084 | 142,088 | 140,229 | |||||||||||||||
Total common shares outstanding, period-end |
(F) |
37,560,031 | 37,987,722 | 33,349,512 | 33,375,753 | 33,375,753 | |||||||||||||||
Average diluted shares outstanding |
(G) |
37,918,188 | 38,173,234 | 33,497,298 | 33,521,490 | 33,551,776 | |||||||||||||||
Core earnings per share, diluted |
(A/G) |
$ | 0.10 | $ | 0.11 | $ | 0.10 | $ | 0.09 | $ | 0.08 | ||||||||||
Tangible book value per share, period-end |
(E/F) |
$ | 4.59 | $ | 4.52 | $ | 4.38 | $ | 4.26 | $ | 4.20 | ||||||||||
Core return on average assets |
(A/B) |
0.77 | % | 0.86 | % | 0.90 | % | 0.79 | % | 0.76 | % | ||||||||||
Core return on average equity |
(A/C) |
6.61 | % | 7.41 | % | 7.41 | % | 6.65 | % | 6.58 | % | ||||||||||
Core return on average tangible equity |
(A/D) |
8.58 | % | 9.65 | % | 9.07 | % | 8.18 | % | 8.14 | % | ||||||||||
Efficiency ratio(1) |
71.96 | % | 67.66 | % | 66.24 | % | 69.51 | % | 71.88 | % |
(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.
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