Market Overview

Bear State Financial, Inc. Announces First Quarter 2017 Earnings

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Bear State Financial, Inc. (the "Company") (NASDAQ:BSF), today reported
earnings of $4.9 million and earnings per diluted common share of $0.13
in the first quarter of 2017, compared to earnings of $3.3 million or
$0.09 per diluted common share in the first quarter of 2016. Core
earnings for the first quarter of 2017 were $5.9 million or $0.15 per
diluted common share compared to core earnings of $3.7 million or $0.10
per diluted common share in the first quarter of 2016.

The company experienced record revenue of $23 million in the first
quarter of 2017 which is an increase of 12% compared to the first
quarter of 2016. Net interest income increased 11% for the first quarter
of 2017 compared to the first quarter of 2016 primarily due to loan
portfolio growth. Noninterest income increased 14% for the first quarter
of 2017 compared to the first quarter of 2016 primarily due to increases
in gain on sale of loans and deposit fee income.

Along with revenue growth, the Company continued to focus on operational
efficiency as evidenced by the decrease in noninterest expense of 6% for
the first quarter of 2017 compared to the first quarter of 2016,
resulting in an improvement in the Company's efficiency ratio to 63% in
the first quarter of 2017 compared to 74% in the first quarter of 2016.
Further, the Company's core efficiency ratio improved to 56% in the
first quarter of 2017 compared to 72% in the first quarter of 2016.
During the first quarter of 2017, the Company consolidated three of its
retail branch locations and transitioned one limited service branch
location to operate using personalized technology with Interactive ATMs
("ITMs") only. Two additional retail branch locations will transition to
operate solely with ITMs in the second quarter of 2017.

FINANCIAL CONDITION

Total assets were $2.17 billion at March 31, 2017, a 13% increase
compared to $1.92 billion at March 31, 2016. The increase in total
assets was primarily due to increases in investment securities and
loans. Total loans were $1.64 billion at March 31, 2017, an increase of
$180.2 million, or 12% compared to March 31, 2016 and investment
securities were $250.5 million at March 31, 2017, an increase of $65.4
million, or 35% compared to March 31, 2016. Total deposits were $1.67
billion at March 31, 2017, a 4% increase compared to $1.61 billion at
March 31, 2016.

Total stockholders' equity was $238 million at March 31, 2017, a 6%
increase from $224 million at March 31, 2016. Tangible common
stockholders' equity was $188 million at December 31, 2016, a 9%
increase from $172 million at March 31, 2016. Book value per common
share was $6.31 at March 31, 2017, a 6% increase from $5.96 at March 31,
2016. Tangible book value per common share was $4.98 at March 31, 2017,
an 8% increase from $4.59 at March 31, 2016. The Company's ratio of
total stockholders' equity to total assets decreased to 10.94% at March
31, 2017, compared to 11.64% at March 31, 2016. 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 2017 net income of $4.9 million or
$0.13 per diluted common share compared to net income of $3.3 million or
$0.09 per diluted common share in the first quarter of 2016, resulting
in a return on average assets of 0.95% in the first quarter of 2017,
compared to 0.71% in the first quarter of 2016. Calculation of net
income in accordance with GAAP includes what the Company considers
"non-core items," which are items that we do not consider indicative of
our core operating performance and which are not necessarily comparable
from year to year. The Company reports core earnings, which is a
non-GAAP financial measure that the Company defines as GAAP net income
less non-core items. The reconciliation of GAAP net income to core
earnings together with related financial measures and ratios is included
in the schedules accompanying this release.

First quarter 2017 core earnings totaled $5.9 million or $0.15 per
diluted common share, compared to core earnings of $3.7 million or $0.10
per diluted common share in the first quarter of 2016. The core return
on average assets measured 1.14% and 0.77%, core return on average
equity measured 10.06% and 6.61% and core return on average tangible
equity measured 12.80% and 8.58%, each for the first quarters of 2017
and 2016, respectively. Non-core items during the first quarter of 2017
included gain on sales of investments of $11,000 and branch restructure
expenses of $1.6 million, including $1.1 million of severance expense,
primarily due to severance of $0.8 million accrued upon the departure of
our former CEO in January 2017. The effect of non-core items, net of
taxes, decreased GAAP net income by approximately $946,000 for the first
quarter of 2017.

Net interest income for the first quarter of 2017 was $18.8 million
compared to $16.9 million for the same period in 2016. Interest income
for the first quarter of 2017 was $21.0 million compared to $18.8
million for the same period in 2016. The increase in interest income for
the quarter ended March 31, 2017, compared to 2016 was primarily related
to an increase in the average balances of loans receivable and
investment securities and an increase in the yield earned on investment
securities. Interest expense for the first quarter of 2017 was $2.2
million compared to $1.9 million for the same period in 2016. The
increase in interest expense for the first quarter of 2017 compared to
the same period in 2016 was primarily due to an increase in the average
balance of borrowings and an increase in the average rate paid on
deposits, partially offset by a decrease in the average rate paid on
borrowings.

Net interest margin measured 4.05% for the first quarter of 2017,
compared to 4.03% for the same period in 2016. The average yield on
interest-earning assets for the first quarter of 2017 was 4.52% compared
to 4.47% for the same period in 2016. The average cost of
interest-bearing liabilities increased to 0.55% for the first quarter
2017, compared to 0.51% for the same period in 2016.

Noninterest income is generated primarily through deposit account fee
income, profit on sale of mortgage loans, and earnings on life insurance
policies. Total noninterest income for the three months ended March 31,
2017 increased to $4.2 million from $3.7 million for the same period in
2016, a 14% increase. The increases in the three month comparison period
was primarily due to increases in deposit fee income and gain on sales
of mortgage loans.

Total noninterest expense decreased $0.9 million or 6% for the first
quarter of 2017 compared to the first quarter of 2016. The decrease in
total noninterest expense for the three month comparative period was
primarily related to the Company's efforts to improve its operational
efficiency as well as transaction costs incurred in connection with the
integration of MNB in the first quarter of 2016.

Income tax provision increased by $0.9 million or 60% for the first
quarter of 2017 compared to the first quarter of 2016. The increase in
income tax provision was primarily due to an increase in taxable income.
The Company's effective tax rate for the quarter ended March 31, 2017
was 31.9% compared to 30.1% for the quarter ended March 31, 2016.

The ratio of nonperforming assets to total assets decreased to 0.87% at
March 31, 2017, compared to 1.23% at March 31, 2016. The allowance for
loan losses represented 1.03% of total loans at March 31, 2017 compared
to 1.02% at March 31, 2016. The ratio of allowance for loan losses plus
discount on acquired loans to total loans was 1.58% at March 31, 2017,
compared to 1.99% at March 31, 2016. The ratio of the allowance for loan
losses to nonperforming loans was 94% at March 31, 2017, compared to 73%
at March 31, 2016. Annualized net charge-offs as a percentage of average
loans for the quarter ended March 31, 2017 was 0.03% compared to 0.05%
for the quarter ended March 31, 2016. Provision for loan losses
increased from $489,000 for the first quarter of 2016 to $1.3 million
for the first quarter of 2017. The increase in the provision was
primarily attributable to loan originations and migration of acquired
loans from the purchased loan portfolio to the originated loan portfolio.

About Bear State Financial, Inc.

Bear State Financial, Inc. is the parent company for Bear State Bank.
Bear State Financial, Inc. common stock is traded on the NASDAQ Global
Market under the symbol BSF. For more information on Bear State
Financial, please visit www.bearstatefinancial.com.
Its principal subsidiary, Bear State Bank, is a community oriented
financial institution providing a broad line of financial products to
individuals and business customers. Bear State Bank operates 44 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. In 2016, the Company modified its
definition of core earnings to clarify that a material amount of net
gains, losses or impairments to the Company's real estate owned ("REO")
portfolio during an applicable reporting period will be considered a
non-core item and will thus be excluded from core earnings. Immaterial
net gains, losses and impairments to the REO portfolio, however, will
not be considered a non-core item and will not be excluded from core
earnings. The Company believes that while activity within the REO
portfolio is a recurring aspect of its core business, material changes
to the portfolio are not indicative of the Company's normalized banking
operations.

The Company also reports certain non-GAAP equity measures (including
tangible stockholders' equity, tangible book value per common share and
related ratios) that exclude intangible assets from their calculation.
Management believes that these non-GAAP tangible measures provide
additional useful information about the capital strength of the Company
to the investment community, as these measures are widely used by
industry analysts for banks and bank holding companies with prior merger
and acquisition activity. A reconciliation of non-GAAP financial
measures to GAAP measures is included in the accompanying financial
tables.

Forward-Looking Statements

This press release contains statements about future events that
constitute forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. Such forward-looking
statements may be identified by reference to a future period or periods,
or by the use of forward-looking terminology, such as "may," "will,"
"believe," "plan," "intend," "anticipate," "expect," or similar terms or
variations of those terms, or the negative of those terms.
Forward-looking statements are subject to numerous risks and
uncertainties, including, but not limited to, those risks previously
disclosed in the Company's filings with the SEC, general economic
conditions, changes in interest rates, regulatory considerations,
competition, technological developments, retention and recruitment of
qualified personnel, and market acceptance of Bear State Bank's pricing,
products and services, and with respect to the loans extended by Bear
State Bank and real estate owned, market prices of the property securing
loans and the costs of collection and sales. The Company wishes to
caution readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date made. The Company does not
undertake and specifically declines any obligation to publicly release
the result of any revisions that may be made to any forward-looking
statements to reflect events or circumstances after the date of such
statements or to reflect the occurrence of anticipated or unanticipated
events.

 
BEAR STATE FINANCIAL, INC.
SELECTED CONSOLIDATED FINANCIAL DATA – UNAUDITED
(In thousands)
         
March December September June March
2017 2016 2016 2016 2016
 

Balance sheet data, at quarter end:

Commercial real estate - mortgage loans $ 604,888 $ 587,633 $ 566,302 $ 557,612 $ 555,264
Consumer real estate - mortgage loans 398,106 389,592 385,642 390,743 395,509
Farmland 98,672 94,018 94,187 92,452 93,380
Construction and land development 129,078 125,785 119,433 124,369 117,283
Commercial and industrial loans 370,961 323,096 312,957 281,874 258,479
Consumer and other 36,100 36,265 36,645 36,339 37,673
Total loans 1,637,805 1,556,389 1,515,166 1,483,389 1,457,588
Loans held for sale 4,735 8,954 13,995 15,168 10,103
Allowance for loan losses (16,821 ) (15,584 ) (15,112 ) (14,751 ) (14,866 )
Investment securities 250,493 215,453 197,670 192,549 185,143
Goodwill 40,196 40,196 40,196 40,196 40,196
Core deposit intangible, net 10,098 10,353 10,608 10,863 11,119
Total assets 2,174,041 2,053,175 2,007,938 1,990,715 1,922,301
Noninterest-bearing deposits 221,891 223,038 239,831 255,648 216,173
Total deposits 1,669,066 1,644,080 1,653,523 1,641,250 1,610,718
Short term borrowings 17,831 19,114 13,511 14,964 8,990
FHLB advances 225,072 129,992 80,138 75,282 50,178
Other borrowings 13,506 22,012 22,518 22,900 22,681
Total stockholders' equity 237,912 233,427 232,403 228,534 223,798
 

Balance sheet data, quarterly averages:

Total loans $ 1,607,892 $ 1,536,703 $ 1,522,106 $ 1,492,504 $ 1,461,091
Investment securities 248,355 217,522 202,868 188,808 206,258
Total earning assets 1,886,813 1,810,802 1,768,892 1,724,381 1,702,917
Goodwill 40,196 40,196 40,196 40,196 40,196
Core deposit intangible, net 10,265 10,519 10,775 11,030 11,284
Total assets 2,092,022 2,019,792 1,981,582 1,937,722 1,920,833
Noninterest-bearing deposits 213,467 229,296 239,886 215,766 221,909
Interest-bearing deposits 1,414,137 1,416,991 1,395,501 1,394,262 1,369,759
Total deposits 1,627,604 1,646,287 1,635,387 1,610,028 1,591,668
Short term borrowings 15,549 17,983 13,699 11,991 12,163
FHLB advances 190,965 94,336 73,418 64,494 64,488
Other borrowings 16,247 22,161 22,634 22,982 25,353
Total stockholders' equity 236,247 234,339 231,758 226,587 224,416
 

Statement of income data for the three
months ended:

Interest income $ 21,048 $ 19,212 $ 18,849 $ 18,535 $ 18,790
Interest expense   2,214     2,105     2,014     1,935     1,864  
Net interest income 18,834 17,107 16,835 16,600 16,926
Provision for loan losses   1,349     851     643     533     489  
Net interest income after provision for loan losses 17,485 16,256 16,192 16,067 16,437
Noninterest income 4,176 4,394 4,333 4,311 3,673
Noninterest expense   14,444     13,625     13,400     14,989     15,331  
Income before taxes 7,217 7,025 7,125 5,389 4,779
Income tax provision   2,300     2,192     2,384     847     1,436  
Net income $ 4,917   $ 4,833   $ 4,741   $ 4,542   $ 3,343  
 
 
BEAR STATE FINANCIAL, INC.
SELECTED CONSOLIDATED FINANCIAL DATA – UNAUDITED
 
         
March December September June March
2017 2016 2016 2016 2016
 

Common stock data:

Net income per share, diluted $ 0.13 $ 0.13 $ 0.13 $ 0.12 $ 0.09
Core earnings per share, diluted $ 0.15 $ 0.13 $ 0.11 $ 0.11 $ 0.10
Book value per share $ 6.31 $ 6.21 $ 6.18 $ 6.08 $ 5.96
Tangible book value per share $ 4.98 $ 4.86 $ 4.83 $ 4.72 $ 4.59
Diluted weighted average shares outstanding 37,880,022 37,833,124 37,807,419 37,772,959 37,915,503
End of period shares outstanding 37,689,939 37,618,597 37,600,986 37,589,543 37,560,031
 

Profitability and performance ratios:

Return on average assets 0.95 % 0.95 % 0.95 % 0.94 % 0.71 %
Core return on average assets 1.14 % 0.95 % 0.85 % 0.84 % 0.77 %
Return on average equity 8.44 % 8.18 % 8.12 % 8.04 % 6.04 %
Core return on average equity 10.06 % 8.23 % 7.28 % 7.23 % 6.61 %
Core return on average tangible equity 12.80 % 10.50 % 9.34 % 9.34 % 8.58 %
Net interest margin 4.05 % 3.75 % 3.78 % 3.86 % 4.03 %
Noninterest income to total revenue 18.15 % 20.44 % 20.47 % 20.62 % 17.83 %
Noninterest income to average assets 0.81 % 0.86 % 0.87 % 0.89 % 0.78 %
Noninterest expense to average assets 2.80 % 2.68 % 2.68 % 3.10 % 3.24 %
Efficiency ratio 62.77 % 63.37 % 63.30 % 71.68 % 74.43 %
Core efficiency ratio(1) 56.00 % 63.18 % 66.99 % 68.29 % 71.96 %
Average loans to average deposits 98.79 % 93.34 % 93.07 % 92.70 % 91.80 %
Securities to total assets 11.52 % 10.49 % 9.84 % 9.67 % 9.63 %
 

Asset quality ratios:

Allowance for loan losses to total loans 1.03 % 1.00 % 1.00 % 0.99 % 1.02 %
Allowance for loan losses to non-performing loans 94.20 % 89.69 % 86.41 % 76.42 % 72.84 %
Nonperforming loans to total loans 1.09 % 1.12 % 1.15 % 1.30 % 1.40 %
Nonperforming assets to total assets 0.87 % 0.94 % 0.95 % 1.08 % 1.23 %
Annualized net charge offs to average total loans (2) 0.03 % 0.10 % 0.07 % 0.17 % 0.05 %
 

Regulatory capital ratios:

Tier 1 leverage ratio 9.27 % 9.47 % 9.37 % 9.30 % 9.16 %
Common equity tier 1 capital ratio 10.58 % 11.04 % 11.00 % 10.78 % 10.65 %
Tier 1 capital to risk weighted assets 10.58 % 11.04 % 11.00 % 10.78 % 10.65 %
Total capital to risk weighted assets 11.51 % 11.96 % 11.92 % 11.69 % 11.58 %
                     

(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)
   
March 31, December 31,
2017 2016
ASSETS
Cash and cash equivalents $ 87,815 $ 78,789
Interest-bearing time deposits in banks 4,324 4,571

Investment Securities:

Available for sale, at fair value 208,035 188,476
Held to maturity, at amortized cost (fair value of $40,681 and
$25,090, respectively)
42,458 26,977
Other investment securities, at cost 18,488 13,759
Loans receivable, net of allowance of $16,821 and $15,584,
respectively
1,620,984 1,540,805
Loans held for sale 4,735 8,954
Accrued interest receivable 7,248 7,006
Real estate owned, net 1,182 1,945
Office properties and equipment, net 52,539 54,049
Office properties and equipment held for sale 5,597 5,337
Cash surrender value of life insurance 57,676 57,267
Goodwill 40,196 40,196
Core deposit intangibles, net 10,098 10,353
Deferred tax asset, net 9,179 11,619
Prepaid expenses and other assets   3,487     3,072  
 
TOTAL $ 2,174,041   $ 2,053,175  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
LIABILITIES:
Noninterest bearing deposits $ 221,891 $ 223,038
Interest bearing deposits   1,447,175     1,421,042  
Total deposits 1,669,066 1,644,080
Securities sold under agreement to repurchase 17,831 19,114
Other borrowings 238,578 152,004
Other liabilities   10,654     4,550  
 
Total liabilities   1,936,129     1,819,748  
 
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value—5,000,000 shares authorized; none
issued at March 31, 2017 or December 31, 2016
-- --
Common stock, $0.01 par value—100,000,000 shares authorized;
37,689,939 and 37,618,597 shares issued and outstanding at March 31,
2017 and December 31, 2016, respectively
377 376
Additional paid-in capital 209,623 209,274
Accumulated other comprehensive loss (1,088 ) (1,436 )
Retained earnings   29,000     25,213  
 
Total stockholders' equity   237,912     233,427  
 
TOTAL $ 2,174,041   $ 2,053,175  
 
 

BEAR STATE FINANCIAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except earnings per share)
(Unaudited)
      Three Months Ended
    March 31,   March 31,
2017 2016
INTEREST INCOME:
Loans receivable $ 19,479 $ 17,685
Investment securities:
Taxable 611 537
Nontaxable 883 485
Other   75     83  
Total interest income   21,048     18,790  
 
INTEREST EXPENSE:
Deposits 1,680 1,515
Other borrowings   534     349  
 
Total interest expense   2,214     1,864  
 
NET INTEREST INCOME 18,834 16,926
 
PROVISION FOR LOAN LOSSES   1,349     489  
 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES   17,485     16,437  
 
NONINTEREST INCOME:
Net gain (loss) on sales of investment securities 11 (2 )
Deposit fee income 2,477 2,150
Earnings on life insurance policies 409 412
Gain on sales of loans 995 794
Other   284     319  
 
Total noninterest income   4,176     3,673  
 
NONINTEREST EXPENSES:
Salaries and employee benefits 8,083 8,250
Net occupancy expense 1,892 1,928
Real estate owned, net (94 ) 28
FDIC insurance 251 308
Amortization of intangible assets 255 255
Data processing 1,368 1,433
Professional fees 606 609
Advertising and public relations 297 496
Postage and supplies 205 290
Other   1,581     1,734  
 
Total noninterest expenses   14,444     15,331  
 
INCOME BEFORE INCOME TAXES 7,217 4,779

INCOME TAX PROVISION

  2,300     1,436  
 
NET INCOME $ 4,917   $ 3,343  
 
Basic earnings per common share $ 0.13   $ 0.09  
 
Diluted earnings per common share $ 0.13   $ 0.09  
 
       

BEAR STATE FINANCIAL, INC.

AVERAGE CONSOLIDATED BALANCE SHEETS and NET INTEREST ANALYSIS -
UNAUDITED

(Dollars in thousands)

 
Three Months Ended March 31,
2017

 

2016

  Average Average
Average Yield/

 

Average

Yield/
Balance Interest Cost

 

Balance

 

Interest

Cost
(Dollars in Thousands)
Interest-earning assets:  
Loans receivable(1) $ 1,607,892

$

19,479

4.91 %

$

1,461,091

$ 17,685 4.91 %
Investment securities(2) 248,355 1,494 2.44

206,258

1,022 2.01
Other interest-earning assets   30,566   75   1.00   35,568   83 0.95
Total interest-earning assets 1,886,813 21,048 4.52 1,702,917 18,790 4.47
Noninterest-earning assets   205,209   217,916
Total assets $ 2,092,022

$

1,920,833

Interest-bearing liabilities:
Deposits $ 1,414,137 1,680 0.48

$

1,369,759

1,515 0.45
Other borrowings   222,761   534   0.97   102,004   349 1.39
Total interest-bearing liabilities 1,636,898 2,214 0.55 1,471,763 1,864 0.51
Noninterest-bearing deposits 213,467 221,909

Noninterest-bearing liabilities

  5,410   2,745
Total liabilities 1,855,775 1,696,417
Stockholders' equity   236,247   224,416

Total liabilities and stockholders' equity

 

$ 2,092,022

$

1,920,833

     
Net interest income

$

18,834

  $ 16,926
Net earning assets $ 249,915

$

231,154

Interest rate spread 3.97 % 3.96 %
Net interest margin 4.05 % 4.03 %

Ratio of interest-earning assets to Interest-bearing liabilities

 

115.27 % 115.71 %
 
(1) Includes nonaccrual loans.
(2) Includes FHLB and FRB stock.
 
     

BEAR STATE FINANCIAL, INC.

ASSET QUALITY ANALYSIS - UNAUDITED

(Dollars in thousands)

 
March 31, 2017 December 31, 2016
  % Total   % Total Increase
Net (2) Assets Net (2) Assets (Decrease)
Nonaccrual Loans:
One- to four-family residential $ 6,759 0.31 % $ 6,709 0.33 % $ 50
Multifamily 119 0.01 % -- -- 119
Nonfarm nonresidential 5,208 0.23 % 5,177 0.25 % 31
Farmland 1,280 0.06 % 783 0.04 % 497
Construction and land development 439 0.02 % 463 0.02 % (24 )
Commercial 3,841 0.18 % 4,071 0.20 % (230 )
Consumer   211 0.01 %   173 0.01 %   38  
 
Total nonaccrual loans 17,857 0.82 % 17,376 0.85 % 481
 
Accruing loans 90 days or more past due -- -- -- -- --
 
Real estate owned   1,182 0.05 %   1,945 0.09 %   (763 )
 
Total nonperforming assets 19,039 0.87 % 19,321 0.94 % (282 )
Performing restructured loans   4,800 0.22 %   4,804 0.23 %   (4 )
 
Total nonperforming assets and performing restructured loans (1) $ 23,839 1.09 % $ 24,125 1.17 % $ (286 )
   

(1) The table does not include substandard loans which were judged
not to be impaired totaling $24.7 million at March 31, 2017 and
$30.7 million at December 31, 2016 or acquired ASC 310-30
purchased credit impaired loans which are considered performing at
March 31, 2017.

(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
3/31/2017   12/31/2016   9/30/2016   6/30/2016   3/31/2016
Net income available to common stockholders $ 4,917   $ 4,833   $ 4,741   $ 4,542   $ 3,343  
Average common stockholders' equity 236,247 234,339 231,758 226,587 224,416
Less average intangible assets:
Goodwill (40,196 ) (40,196 ) (40,196 ) (40,196 ) (40,196 )
Core deposit intangible, net of accumulated amortization   (10,265 )   (10,519 )   (10,775 )   (11,030 )   (11,284 )
 
Average tangible common stockholders' equity $ 185,786   $ 183,624   $ 180,787   $ 175,361   $ 172,936  
 

Annualized return on average tangible common stockholders' equity

  10.7 %   10.4 %   10.4 %   10.4 %   7.8 %
 
 
 
BEAR STATE FINANCIAL, INC.
CALCULATION OF TANGIBLE BOOK VALUE PER COMMON SHARE - UNAUDITED
(In thousands, except per share data)
For the Quarter Ending
3/31/2017 12/31/2016 9/30/2016 6/30/2016 3/31/2016
Total common stockholder's equity $ 237,912 $ 233,427 $ 232,403 $ 228,534 $ 223,798
Less intangible assets:
Goodwill (40,196 ) (40,196 ) (40,196 ) (40,196 ) (40,196 )
Core deposit intangible, net of accumulated amortization   (10,098 )   (10,353 )   (10,608 )   (10,863 )   (11,119 )
Total intangible assets   (50,294 )   (50,549 )   (50,804 )   (51,059 )   (51,315 )
Total tangible common stockholder's equity $ 187,618   $ 182,878   $ 181,599   $ 177,475   $ 172,483  
 
Common Shares Outstanding   37,690     37,619     37,601     37,590     37,560  
 
Tangible book value per common share $ 4.98   $ 4.86   $ 4.83   $ 4.72   $ 4.59  
 
 
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
2017 2016 2016 2016 2016
Net income $ 4,917 $ 4,833 $ 4,741 $ 4,542 $ 3,343
Adj: Loss (gain) on sale of securities, net (11 ) -- (21 ) -- 2
Adj: Merger, acquisition and integration expenses -- -- -- 137 445
Adj: Branch restructure expense (1) 1,565 41 (323 ) 571 63
Adj: Net provision/loss/(gain) on real estate owned -- -- (444 ) -- --
Adj: Deferred tax asset valuation allowance reversal -- -- -- (897 ) --
Tax effect of adjustments (2)       (608 )     (16 )     302       (271 )     (195 )
Total core earnings (A)   $ 5,863     $ 4,858     $ 4,255     $ 4,082     $ 3,658  
 
Total revenue $ 23,010 $ 21,501 $ 21,168 $ 20,911 $ 20,599
Adj: Loss (gain) on sale of securities, net       (11 )     --       (21 )     --       2  
Total core revenue     $ 22,999     $ 21,501     $ 21,147     $ 20,911     $ 20,601  
 
Total non-interest expense $ 14,444 $ 13,625 $ 13,400 $ 14,989 $ 15,331
Adj: Merger, acquisition and integration expenses -- -- -- (137 ) (445 )
Adj: Branch restructure expense (1) (1,565 ) (41 ) 323 (571 ) (63 )
Adj: Net (provision/loss)/gain on real estate owned       --       --       444       --       --  
Total core noninterest expense     $ 12,879     $ 13,584     $ 14,167     $ 14,281     $ 14,823  
 
Total average assets (B) $ 2,092,022 $ 2,019,792 $ 1,981,582 $ 1,937,722 $ 1,920,833
Total average stockholders' equity (C) 236,247 234,339 231,758 226,587 224,416
Total average tangible stockholders' equity (D) 185,786 183,624 180,787 175,361 172,936
Total tangible stockholders' equity, period end (E) 187,618 182,878 181,599 177,475 172,483
 
Total common shares outstanding, period-end (F) 37,689,939 37,618,597 37,600,986 37,589,543 37,560,031
Average diluted shares outstanding (G) 37,880,022 37,833,124 37,807,419 37,772,959 37,915,503
 
Core earnings per share, diluted (A/G) $ 0.15 $ 0.13 $ 0.11 $ 0.11 $ 0.10
Tangible book value per share, period-end (E/F) $ 4.98 $ 4.86 $ 4.83 $ 4.72 $ 4.59
 
Core return on average assets (A/B) 1.14 % 0.95 % 0.85 % 0.84 % 0.77 %
Core return on average equity (A/C) 10.06 % 8.23 % 7.28 % 7.23 % 6.61 %
Core return on average tangible equity (A/D) 12.80 % 10.50 % 9.34 % 9.34 % 8.58 %
Core efficiency ratio(3)       56.00 %     63.18 %     66.99 %     68.29 %   71.96 %

(1) This adjustment primarily consists of costs associated with
properties disposed or held for sale as a result of branch
restructuring, including net (gains) losses on sales, impairment
charges, and other expenses such as accelerated depreciation. For
the quarter ended March 31,2017, this adjustment also included
severance expense totaling $1.1 million resulting from branch and
other organizational restructure, primarily due to severance of
$0.8 million accrued upon the departure of the former CEO in
January 2017.

(2) The tax effect is calculated at the Company's blended
statutory rate of 39.14% for adjustments that impact taxable
income for periods in 2017 and 38.29% for periods ending in 2016.

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

 

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