Exhibit 99.1
 | FOR IMMEDIATE RELEASE |
| | |
| 900 S. Shackleford, Suite 401 | FOR FURTHER INFORMATION CONTACT: |
| Little Rock, AR 72211 | Matt Machen | CEO |
| | Sherri Billings | CFO |
| | 501.975.6033 |
Bear State Financial, Inc. Announces Second Quarter 2017 Earnings
FINANCIAL HIGHLIGHTS:
| | ● | Second quarter2017GAAP net income was $6.7million, a 47% increase from $4.5 million for the second quarter of 2016. Diluted earnings per common share for the second quarter of 2017 was$0.18, a 50% increase from $0.12 for thesecond quarter of2016. |
| | ● | Second quarter 2017 core earnings were$6.3 million, a 53% increase from $4.1 million for the second quarter of 2016. Diluted core earnings per common share for the second quarter of 2017 was $0.17, a 55% increase from$0.11forthesecond quarter of 2016. |
| | ● | The Company’s efficiency ratioimprovedto55% in thesecond quarter of 2017 compared to72% in thesecond quarter of 2016.Further, the Company’s core efficiency ratio improved to56% in thesecond quarter of 2017 compared to68% in thesecond quarter of 2016. |
| | ● | Net interest income increased 12% for thesecond quarter of 2017 compared to thesecond quarter of 2016 primarily due to loan portfolio growth of 12% year over year. |
| | ● | The ratio of nonperforming assets to total assets improved to 0.78% at June 30, 2017 compared to 1.08% at June 30, 2016. |
| | ● | Book value per common share was $6.48 atJune 30, 2017, a7% increase from $6.08 atJune 30, 2016.Tangible book value per common share was $5.16 atJune 30, 2017, a9% increase from $4.72 atJune 30, 2016. |
Little Rock, AR– July 27, 2017 – Bear State Financial, Inc. (the “Company,” NASDAQ: BSF), today reported earnings of $6.7 million and earnings per diluted common share of $0.18 in the second quarter of 2017, compared to earnings of $4.5 million or $0.12 per diluted common share in the second quarter of 2016. Core earnings for the second quarter of 2017 were $6.3 million or $0.17 per diluted common share compared to core earnings of $4.1 million or $0.11 per diluted common share in the second quarter of 2016.
The Company experienced record revenue of $23.4 million in the second quarter of 2017, which is an increase of 12% compared to the second quarter of 2016. Net interest income increased 12% for the second quarter of 2017 compared to the second quarter of 2016 primarily due to loan portfolio growth. Noninterest income increased 9% for the second quarter of 2017 compared to the second quarter of 2016 primarily due to increases in earnings on life insurance and deposit fee income.
Along with revenue growth, the Company continued to focus on operational efficiency as evidenced by the decrease in noninterest expense of 15% for the second quarter of 2017 compared to the second quarter of 2016, resulting in an improvement in the Company’s efficiency ratio to 55% in the second quarter of 2017 compared to 72% in the second quarter of 2016. Further, the Company’s core efficiency ratio improved to 56% in the second quarter of 2017 compared to 68% in the second quarter of 2016. During the second quarter of 2017, the Company transitioned two branch locations to operate using personalized technology with Interactive ATMs (“ITMs”) only.
FINANCIAL CONDITION
Total assets were $2.24 billion at June 30, 2017, a 12% increase compared to $1.99 billion at June 30, 2016. The increase in total assets was primarily due to increases in investment securities and loans. Total loans were $1.66 billion at June 30, 2017, an increase of $175.7 million, or 12% compared to June 30, 2016 and investment securities were $254.0 million at June 30, 2017, an increase of $61.4 million, or 32% compared to June 30, 2016. Total deposits were $1.70 billion at June 30, 2017, a 4% increase compared to $1.64 billion at June 30, 2016.
Total stockholders’ equity was $244.5 million at June 30, 2017, a 7% increase from $228.5 million at June 30, 2016. Tangible common stockholders’ equity was $194.5 million at June 30, 2017, a 10% increase from $177.5 million at June 30, 2016. Book value per common share was $6.48 at June 30, 2017, a 7% increase from $6.08 at June 30, 2016. Tangible book value per common share was $5.16 at June 30, 2017, a 9% increase from $4.72 at June 30, 2016. The Company’s ratio of total stockholders’ equity to total assets decreased to 10.92% at June 30, 2017, compared to 11.48% at June 30, 2016. The calculation of the Company’s tangible book value per common share and tangible common stockholders’ equity and the reconciliation of such non-GAAP financial measures to the most comparable GAAP measures are included in the schedules accompanying this release.
RESULTS OF OPERATIONS
The Company recognized second quarter 2017 net income of $6.7 million or $0.18 per diluted common share compared to net income of $4.5 million or $0.12 per diluted common share in the second quarter of 2016, resulting in a return on average assets of 1.22% in the second quarter of 2017, compared to 0.94% in the second quarter of 2016. Calculation of net income in accordance with GAAP includes what the Company considers “non-core” items, which are items that we do not consider indicative of our core operating performance and which are not necessarily comparable from year to year. The Company reports core earnings, which is a non-GAAP financial measure that the Company defines as GAAP net income less non-core items. The reconciliation of GAAP net income to core earnings together with related financial measures and ratios is included in the schedules accompanying this release.
Second quarter 2017 core earnings totaled $6.3 million or $0.17 per diluted common share, compared to core earnings of $4.1 million or $0.11 per diluted common share in the second quarter of 2016. The core return on average assets measured 1.15% and0.84%, core return on average equity measured 10.36% and 7.23% and core return on average tangible equity measured 13.07% and 9.34%, each for the second quarters of 2017 and 2016, respectively. Non-core items during the second quarter of 2017 included a claim on bank owned life insurance of $395,000, gain on sales of investments of $37,000 and branch restructure expenses of $29,000. The effect of non-core items, net of taxes, increased GAAP net income by approximately $400,000 for the second quarter of 2017.
Net interest income for the second quarter of 2017 was $18.7 million compared to $16.6 million for the same period in 2016. Interest income for the second quarter of 2017 was $21.2 million compared to $18.5 million for the same period in 2016. The increase in interest income for the quarter ended June 30, 2017, compared to 2016 was primarily related to an increase in the average balances of loans receivable and investment securities and an increase in the yield earned on investment securities. Interest expense for the second quarter of 2017 was $2.5 million compared to $1.9 million for the same period in 2016. The increase in interest expense for the second quarter of 2017 compared to the same period in 2016 was primarily due to an increase in the average balance of borrowings and an increase in the average rate paid on deposits, partially offset by a decrease in the average rate paid on borrowings.
Net interest margin measured 3.76% for the second quarter of 2017, compared to 3.86% for the same period in 2016. The average yield on interest-earning assets for the second quarter of 2017 was 4.26% compared to 4.31% for the same period in 2016. The average cost of interest-bearing liabilities increased to0.58% for the second quarter of 2017, compared to 0.52% for the same period in 2016.
Noninterest income is generated primarily through deposit account fee income, profit on sale of mortgage loans, and earnings on life insurance policies. Total noninterest income for the three months ended June 30, 2017 increased to $4.7 million from $4.3 million for the same period in 2016, a 9% increase. The increases in the three month comparison period was primarily due to increases in deposit fee income and earnings on bank owned life insurance.
Total noninterest expense decreased $2.2 million, or 15%, for the second quarter of 2017 compared to the second quarter of 2016. The decrease in total noninterest expense for the three month comparative period was primarily related to the Company’s efforts to improve its operational efficiency as well as a decrease in the number of branches and transitioning of three branches to operate solely with ITMs.
Income tax provision increased by $2.2 million, or 263%, for the second quarter of 2017 compared to the second quarter of 2016. The increase in income tax provision was primarily due to an increase in taxable income in the second quarter of 2017 partially offset by the recording of a valuation allowance reversal of $897,000 on deferred tax assets in the second quarter of 2016. The Company’s effective tax rate for the quarter ended June 30, 2017 was 31.6% compared to 15.7% for the quarter ended June 30, 2016.
ASSET QUALITY
The ratio of nonperforming assets to total assets decreased to 0.78% at June 30, 2017, compared to 1.08% at June 30, 2016. The allowance for loan losses represented 1.03% of total loans at June 30, 2017 compared to 0.99% at June 30, 2016. The ratio of the allowance for loan losses to nonperforming loans was 104% at June 30, 2017, compared to 76% at June 30, 2016. Annualized net charge-offs as a percentage of average loans for the quarter ended June 30, 2017 was0.14% compared to 0.17% for the quarter ended June 30, 2016. Provision for loan losses increased from $533,000 for the second quarter of 2016 to $821,000 for the second quarter of 2017. The increase in the provision was primarily attributable to loan originations and migration of acquired loans from the purchased loan portfolio to the originated loan portfolio.
About Bear State Financial, Inc.
Bear State Financial, Inc. is the parent company for Bear State Bank. Bear State Financial, Inc. common stock is traded on the NASDAQ Global Market under the symbol BSF. For more information on Bear State Financial, please visitwww.bearstatefinancial.com. Its principal subsidiary, Bear State Bank, is a community oriented financial institution providing a broad line of financial products to individuals and business customers. Bear State Bank operates 42 branches, three personalized technology centers equipped with interactive teller machines and three loan production offices throughout Arkansas, Southwest Missouri and Southeast Oklahoma.
Non-GAAP Financial Measures
This release contains certain non-GAAP financial measures in addition to results presented in accordance with accounting principles generally accepted in the United States (“GAAP”). These non-GAAP measures provide supplemental perspectives on operating results, performance trends, and financial condition. They are not a substitute for GAAP measures and they should be read and used in conjunction with the Company’s GAAP financial information. In all cases, it should be understood that non-GAAP per share measures do not depict amounts that accrue directly to the benefit of shareholders. The Company utilizes the non-GAAP measure of core earnings, which management believes is useful in evaluating operating trends from period to period, including components of core revenue and core expense. Core earnings and its components exclude amounts that the Company views as unrelated to its normalized operations. Management and the Board of Directors also utilize core earnings or components of core earnings and related ratios in the preparation of the Company’s operating budgets, monthly financial performance reporting and investor presentations of Company performance and in the calculation of annual performance-based incentives for certain members of management. In 2016, the Company modified its definition of core earnings to clarify that a material amount of net gains, losses or impairments to the Company’s real estate owned (“REO”) portfolio during an applicable reporting period will be considered a non-core item and will thus be excluded from core earnings. Immaterial net gains, losses and impairments to the REO portfolio, however, will not be considered a non-core item and will not be excluded from core earnings. The Company believes that while activity within the REO portfolio is a recurring aspect of its core business, material changes to the portfolio are not indicative of the Company’s normalized banking operations.
The Company also reports certain non-GAAP equity measures (including tangible stockholders’ equity, tangible book value per common share and related ratios) that exclude intangible assets from their calculation. Management believes that these non-GAAP tangible measures provide additional useful information about the capital strength of the Company to the investment community, as these measures are widely used by industry analysts for banks and bank holding companies with prior merger and acquisition activity. A reconciliation of non-GAAP financial measures to GAAP measures is included in the accompanying financial tables.
Forward-Looking Statements
This press release contains statements about future events that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements may be identified by reference to a future period or periods, or by the use of forward-looking terminology, such as “may,” “will,” “believe,” “plan,” “intend,” “anticipate,” “expect,” or similar terms or variations of those terms, or the negative of those terms. Forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, those risks previously disclosed in the Company’s filings with the SEC, general economic conditions, changes in interest rates, regulatory considerations, competition, technological developments, retention and recruitment of qualified personnel, and marketacceptance 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.
BEARSTATE FINANCIAL, INC.
SELECTED CONSOLIDATED FINANCIAL DATA– UNAUDITED
(In thousands)
| | | June | | | March | | | December | | | September | | | June | |
| | | 2017 | | | 2017 | | | 2016 | | | 2016 | | | 2016 | |
Balance sheet data, at quarter end: | | | | | | | | | | | | | | | | | | | | |
Commercial real estate - mortgage loans | | $ | 632,149 | | | $ | 604,888 | | | $ | 587,633 | | | $ | 566,302 | | | $ | 557,612 | |
Consumer real estate - mortgage loans | | | 396,550 | | | | 397,898 | | | | 389,107 | | | | 385,126 | | | | 390,066 | |
Farmland | | | 97,881 | | | | 98,672 | | | | 94,018 | | | | 94,187 | | | | 92,452 | |
Construction and land development | | | 131,046 | | | | 129,078 | | | | 125,785 | | | | 119,433 | | | | 124,369 | |
Commercial and industrial loans | | | 364,194 | | | | 370,961 | | | | 323,096 | | | | 312,957 | | | | 281,874 | |
Consumer and other | | | 36,624 | | | | 36,100 | | | | 36,265 | | | | 36,645 | | | | 36,339 | |
Total loans | | | 1,658,444 | | | | 1,637,597 | | | | 1,555,904 | | | | 1,514,650 | | | | 1,482,712 | |
Loans held for sale | | | 7,470 | | | | 4,735 | | | | 8,954 | | | | 13,995 | | | | 15,168 | |
Allowance for loan losses | | | (17,083 | ) | | | (16,821 | ) | | | (15,584 | ) | | | (15,112 | ) | | | (14,751 | ) |
Investment securities | | | 275,805 | | | | 268,981 | | | | 229,212 | | | | 209,508 | | | | 204,236 | |
Goodwill | | | 40,196 | | | | 40,196 | | | | 40,196 | | | | 40,196 | | | | 40,196 | |
Core deposit intangible, net | | | 9,842 | | | | 10,098 | | | | 10,353 | | | | 10,608 | | | | 10,863 | |
Total assets | | | 2,239,090 | | | | 2,174,041 | | | | 2,053,175 | | | | 2,007,938 | | | | 1,990,715 | |
Noninterest-bearing deposits | | | 255,806 | | | | 221,891 | | | | 223,038 | | | | 239,831 | | | | 255,648 | |
Total deposits | | | 1,703,246 | | | | 1,669,066 | | | | 1,644,080 | | | | 1,653,523 | | | | 1,641,250 | |
Short term borrowings | | | 17,856 | | | | 17,831 | | | | 19,114 | | | | 13,511 | | | | 14,964 | |
FHLB advances | | | 254,928 | | | | 225,072 | | | | 129,992 | | | | 80,138 | | | | 75,282 | |
Other borrowings | | | 11,600 | | | | 13,506 | | | | 22,012 | | | | 22,518 | | | | 22,900 | |
Total stockholders' equity | | | 244,533 | | | | 237,912 | | | | 233,427 | | | | 232,403 | | | | 228,534 | |
| | | | | | | | | | | | | | | | | | | | | |
Balance sheet data, quarterly averages: | | | | | | | | | | | | | | | | | | | | |
Total loans | | $ | 1,659,830 | | | $ | 1,607,892 | | | $ | 1,536,703 | | | $ | 1,522,106 | | | $ | 1,492,504 | |
Investment securities | | | 271,402 | | | | 248,355 | | | | 217,522 | | | | 202,868 | | | | 188,808 | |
Total earning assets | | | 1,990,562 | | | | 1,886,813 | | | | 1,810,802 | | | | 1,768,892 | | | | 1,724,381 | |
Goodwill | | | 40,196 | | | | 40,196 | | | | 40,196 | | | | 40,196 | | | | 40,196 | |
Core deposit intangible, net | | | 10,008 | | | | 10,265 | | | | 10,519 | | | | 10,775 | | | | 11,030 | |
Total assets | | | 2,190,240 | | | | 2,092,022 | | | | 2,019,792 | | | | 1,981,582 | | | | 1,937,722 | |
Noninterest-bearing deposits | | | 220,511 | | | | 213,467 | | | | 229,296 | | | | 239,886 | | | | 215,766 | |
Interest-bearing deposits | | | 1,435,630 | | | | 1,414,137 | | | | 1,416,991 | | | | 1,395,501 | | | | 1,394,262 | |
Total deposits | | | 1,656,141 | | | | 1,627,604 | | | | 1,646,287 | | | | 1,635,387 | | | | 1,610,028 | |
Short term borrowings | | | 15,463 | | | | 15,549 | | | | 17,983 | | | | 13,699 | | | | 11,991 | |
FHLB advances | | | 258,658 | | | | 190,965 | | | | 94,336 | | | | 73,418 | | | | 64,494 | |
Other borrowings | | | 11,898 | | | | 16,247 | | | | 22,161 | | | | 22,634 | | | | 22,982 | |
Total stockholders' equity | | | 242,263 | | | | 236,247 | | | | 234,339 | | | | 231,758 | | | | 226,587 | |
| | | | | | | | | | | | | | | | | | | | | |
| Statement of income data for the three months ended: | | | | | | | | | | | | | | | | | | | | |
Interest income | | $ | 21,153 | | | $ | 21,048 | | | $ | 19,212 | | | $ | 18,849 | | | $ | 18,535 | |
Interest expense | | | 2,496 | | | | 2,214 | | | | 2,105 | | | | 2,014 | | | | 1,935 | |
Net interest income | | | 18,657 | | | | 18,834 | | | | 17,107 | | | | 16,835 | | | | 16,600 | |
Provision for loan losses | | | 821 | | | | 1,349 | | | | 851 | | | | 643 | | | | 533 | |
Net interest income after provision for loan losses | | | 17,836 | | | | 17,485 | | | | 16,256 | | | | 16,192 | | | | 16,067 | |
Noninterest income | | | 4,694 | | | | 4,176 | | | | 4,394 | | | | 4,333 | | | | 4,311 | |
Noninterest expense | | | 12,795 | | | | 14,444 | | | | 13,625 | | | | 13,400 | | | | 14,989 | |
Income before taxes | | | 9,735 | | | | 7,217 | | | | 7,025 | | | | 7,125 | | | | 5,389 | |
Income tax provision | | | 3,078 | | | | 2,300 | | | | 2,192 | | | | 2,384 | | | | 847 | |
Net income | | $ | 6,657 | | | $ | 4,917 | | | $ | 4,833 | | | $ | 4,741 | | | $ | 4,542 | |
BEAR STATE FINANCIAL, INC.
SELECTED CONSOLIDATED FINANCIAL DATA– UNAUDITED
| | | June | | | March | | | December | | | September | | | June | |
| | | 2017 | | | 2017 | | | 2016 | | | 2016 | | | 2016 | |
Common stock data: | | | | | | | | | | | | | | | | | | | | |
Net income per share, diluted | | $ | 0.18 | | | $ | 0.13 | | | $ | 0.13 | | | $ | 0.13 | | | $ | 0.12 | |
Core earnings per share, diluted | | $ | 0.17 | | | $ | 0.15 | | | $ | 0.13 | | | $ | 0.11 | | | $ | 0.11 | |
Book value per share | | $ | 6.48 | | | $ | 6.31 | | | $ | 6.21 | | | $ | 6.18 | | | $ | 6.08 | |
Tangible book value per share | | $ | 5.16 | | | $ | 4.98 | | | $ | 4.86 | | | $ | 4.83 | | | $ | 4.72 | |
Diluted weighted average shares outstanding | | | 37,883,264 | | | | 37,880,022 | | | | 37,833,124 | | | | 37,807,419 | | | | 37,772,959 | |
End of period shares outstanding | | | 37,713,171 | | | | 37,689,939 | | | | 37,618,597 | | | | 37,600,986 | | | | 37,589,543 | |
| | | | | | | | | | | | | | | | | | | | | |
Profitability and performance ratios: | | | | | | | | | | | | | | | | | | | | |
Return on average assets | | | 1.22 | % | | | 0.95 | % | | | 0.95 | % | | | 0.95 | % | | | 0.94 | % |
Core return on average assets | | | 1.15 | % | | | 1.14 | % | | | 0.95 | % | | | 0.85 | % | | | 0.84 | % |
Return on average equity | | | 11.02 | % | | | 8.44 | % | | | 8.18 | % | | | 8.12 | % | | | 8.04 | % |
Core return on average equity | | | 10.36 | % | | | 10.06 | % | | | 8.23 | % | | | 7.28 | % | | | 7.23 | % |
Core return on average tangible equity | | | 13.07 | % | | | 12.80 | % | | | 10.50 | % | | | 9.34 | % | | | 9.34 | % |
Net interest margin | | | 3.76 | % | | | 4.05 | % | | | 3.75 | % | | | 3.78 | % | | | 3.86 | % |
Noninterest income to total revenue | | | 20.10 | % | | | 18.15 | % | | | 20.44 | % | | | 20.47 | % | | | 20.62 | % |
Noninterest income to average assets | | | 0.86 | % | | | 0.81 | % | | | 0.86 | % | | | 0.87 | % | | | 0.89 | % |
Noninterest expense to average assets | | | 2.34 | % | | | 2.80 | % | | | 2.68 | % | | | 2.68 | % | | | 3.10 | % |
Efficiency ratio | | | 54.79 | % | | | 62.77 | % | | | 63.37 | % | | | 63.30 | % | | | 71.68 | % |
Core efficiency ratio(1) | | | 55.70 | % | | | 56.00 | % | | | 63.18 | % | | | 66.99 | % | | | 68.29 | % |
Average loans to average deposits | | | 100.22 | % | | | 98.79 | % | | | 93.34 | % | | | 93.07 | % | | | 92.70 | % |
Securities to total assets | | | 12.32 | % | | | 11.52 | % | | | 10.49 | % | | | 9.84 | % | | | 9.67 | % |
| | | | | | | | | | | | | | | | | | | | | |
Asset quality ratios: | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses to total loans | | | 1.03 | % | | | 1.03 | % | | | 1.00 | % | | | 1.00 | % | | | 0.99 | % |
Allowance for loan losses to non-performing loans | | | 104.00 | % | | | 94.20 | % | | | 89.69 | % | | | 86.41 | % | | | 76.42 | % |
Nonperforming loans to total loans | | | 0.99 | % | | | 1.09 | % | | | 1.12 | % | | | 1.15 | % | | | 1.30 | % |
Nonperforming assets to total assets | | | 0.78 | % | | | 0.87 | % | | | 0.94 | % | | | 0.95 | % | | | 1.08 | % |
Annualized net charge offs to average total loans (2) | | | 0.14 | % | | | 0.03 | % | | | 0.10 | % | | | 0.07 | % | | | 0.17 | % |
| | | | | | | | | | | | | | | | | | | | | |
Regulatory capital ratios: | | | | | | | | | | | | | | | | | | | | |
Tier 1 leverage ratio | | | 9.18 | % | | | 9.27 | % | | | 9.47 | % | | | 9.37 | % | | | 9.30 | % |
Common equity tier 1 capital ratio | | | 10.85 | % | | | 10.58 | % | | | 11.04 | % | | | 11.00 | % | | | 10.78 | % |
Tier 1 capital to risk weighted assets | | | 10.85 | % | | | 10.58 | % | | | 11.04 | % | | | 11.00 | % | | | 10.78 | % |
Total capital to risk weighted assets | | | 11.80 | % | | | 11.51 | % | | | 11.96 | % | | | 11.92 | % | | | 11.69 | % |
(1) | Core efficiency ratio is a non-GAAP ratio that is calculated by dividing core noninterest expense by total core revenue (the sum of net interest income and core noninterest income). Other companies may define and calculate this data differently. |
| (2) | The quarter ending June 30, 2016 included a charge-off on a purchased credit impaired loan amounting to 0.13% of average total loans |
BEAR STATE FINANCIAL, INC.
CONDENSEDCONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share data)
(Unaudited)
| | | June 30, 2017 | | | December 31, 2016 | |
ASSETS | | | | | | | | |
Cash and cash equivalents | | $ | 125,153 | | | $ | 78,789 | |
Interest-bearing time deposits in banks | | | 4,324 | | | | 4,571 | |
Investment securities: | | | | | | | | |
Available for sale securities, at fair value | | | 211,038 | | | | 188,476 | |
Held to maturity securities, at amortized cost (fair value of $42,332 and $25,090, respectively) | | | 42,953 | | | | 26,977 | |
Other investment securities, at cost | | | 21,814 | | | | 13,759 | |
Loans receivable, net of allowance of $17,083 and $15,584, respectively | | | 1,641,636 | | | | 1,540,805 | |
Loans held for sale | | | 7,470 | | | | 8,954 | |
Accrued interest receivable | | | 7,469 | | | | 7,006 | |
Real estate owned, net | | | 1,103 | | | | 1,945 | |
Office properties and equipment, net | | | 51,943 | | | | 54,049 | |
Office properties and equipment held for sale | | | 4,948 | | | | 5,337 | |
Cash surrender value of life insurance | | | 58,091 | | | | 57,267 | |
Goodwill | | | 40,196 | | | | 40,196 | |
Core deposit intangibles, net | | | 9,842 | | | | 10,353 | |
Deferred tax asset, net | | | 6,696 | | | | 11,619 | |
Prepaid expenses and other assets | | | 4,414 | | | | 3,072 | |
| | | | | | | | | |
TOTAL | | $ | 2,239,090 | | | $ | 2,053,175 | |
| | | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| | | | | | | | | |
LIABILITIES: | | | | | | | | |
Noninterest bearing deposits | | $ | 255,806 | | | $ | 223,038 | |
Interest bearing deposits | | | 1,447,440 | | | | 1,421,042 | |
Total deposits | | | 1,703,246 | | | | 1,644,080 | |
Securities sold under agreement to repurchase | | | 17,856 | | | | 19,114 | |
Other borrowings | | | 266,528 | | | | 152,004 | |
Other liabilities | | | 6,927 | | | | 4,550 | |
| | | | | | | | | |
Total liabilities | | | 1,994,557 | | | | 1,819,748 | |
| | | | | | | | | |
STOCKHOLDERS’ EQUITY: | | | | | | | | |
Preferred stock, $0.01 par value—5,000,000 shares authorized; none issued at June 30, 2017 or December 31, 2016 | | | -- | | | | -- | |
Common stock, $0.01 par value—100,000,000 shares authorized; 37,713,171 and 37,618,597 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | | | 377 | | | | 376 | |
Additional paid-in capital | | | 209,736 | | | | 209,274 | |
Accumulated other comprehensive loss | | | (106 | ) | | | (1,436 | ) |
Retained earnings | | | 34,526 | | | | 25,213 | |
| | | | | | | | | |
Total stockholders’ equity | | | 244,533 | | | | 233,427 | |
| | | | | | | | | |
TOTAL | | $ | 2,239,090 | | | $ | 2,053,175 | |
BEAR STATE FINANCIAL, INC.
CONDENSEDCONSOLIDATED STATEMENTS OF INCOME
(In thousands, except earnings per share)
(Unaudited)
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, | | | June 30, | | | June 30, | | | June 30, | |
| | | 2017 | | | 2016 | | | 2017 | | | 2016 | |
INTEREST INCOME: | | | | | | | | | | | | | | | | |
Loans receivable | | $ | 19,392 | | | $ | 17,519 | | | $ | 38,871 | | | | 35,205 | |
Investment securities: | | | | | | | | | | | | | | | | |
Taxable | | | 678 | | | | 474 | | | | 1,290 | | | | 1,010 | |
Nontaxable | | | 940 | | | | 462 | | | | 1,823 | | | | 947 | |
Other | | | 143 | | | | 80 | | | | 218 | | | | 164 | |
Total interest income | | | 21,153 | | | | 18,535 | | | | 42,202 | | | | 37,326 | |
| | | | | | | | | | | | | | | | | |
INTEREST EXPENSE: | | | | | | | | | | | | | | | | |
Deposits | | | 1,737 | | | | 1,608 | | | | 3,417 | | | | 3,123 | |
Other borrowings | | | 759 | | | | 327 | | | | 1,293 | | | | 675 | |
Total interest expense | | | 2,496 | | | | 1,935 | | | | 4,710 | | | | 3,798 | |
| | | | | | | | | | | | | | | | | |
NET INTEREST INCOME | | | 18,657 | | | | 16,600 | | | | 37,492 | | | | 33,528 | |
| | | | | | | | | | | | | | | | | |
PROVISION FOR LOAN LOSSES | | | 821 | | | | 533 | | | | 2,171 | | | | 1,022 | |
| | | | | | | | | | | | | | | | | |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | | | 17,836 | | | | 16,067 | | | | 35,321 | | | | 32,506 | |
| | | | | | | | | | | | | | | | | |
NONINTEREST INCOME: | | | | | | | | | | | | | | | | |
Net gain (loss) on sales of investment securities | | | 37 | | | | -- | | | | 48 | | | | (2 | ) |
Deposit fee income | | | 2,513 | | | | 2,236 | | | | 4,990 | | | | 4,387 | |
Earnings on life insurance policies | | | 810 | | | | 421 | | | | 1,219 | | | | 833 | |
Gain on sales of loans | | | 1,073 | | | | 1,291 | | | | 2,068 | | | | 2,086 | |
Other | | | 261 | | | | 363 | | | | 545 | | | | 682 | |
| | | | | | | | | | | | | | | | | |
Total noninterest income | | | 4,694 | | | | 4,311 | | | | 8,870 | | | | 7,986 | |
| | | | | | | | | | | | | | | | | |
NONINTEREST EXPENSES: | | | | | | | | | | | | | | | | |
Salaries and employee benefits | | | 6,771 | | | | 7,857 | | | | 14,854 | | | | 16,107 | |
Net occupancy expense | | | 1,684 | | | | 1,898 | | | | 3,575 | | | | 3,825 | |
Real estate owned, net | | | 101 | | | | (27 | ) | | | 7 | | | | 2 | |
FDIC insurance | | | 276 | | | | 338 | | | | 526 | | | | 646 | |
Amortization of intangible assets | | | 255 | | | | 255 | | | | 511 | | | | 511 | |
Data processing | | | 1,525 | | | | 1,405 | | | | 2,892 | | | | 2,839 | |
Professional fees | | | 418 | | | | 525 | | | | 1,024 | | | | 1,133 | |
Advertising and public relations | | | 256 | | | | 369 | | | | 552 | | | | 865 | |
Postage and supplies | | | 218 | | | | 325 | | | | 424 | | | | 616 | |
Other | | | 1,291 | | | | 2,044 | | | | 2,874 | | | | 3,779 | |
| | | | | | | | | | | | | | | | | |
Total noninterest expenses | | | 12,795 | | | | 14,989 | | | | 27,239 | | | | 30,323 | |
| | | | | | | | | | | | | | | | | |
INCOME BEFORE INCOME TAXES | | | 9,735 | | | | 5,389 | | | | 16,952 | | | | 10,169 | |
| | | | | | | | | | | | | | | | | |
INCOME TAX PROVISION | | | 3,078 | | | | 847 | | | | 5,378 | | | | 2,284 | |
| | | | | | | | | | | | | | | | | |
NET INCOME | | $ | 6,657 | | | $ | 4,542 | | | $ | 11,574 | | | $ | 7,885 | |
| | | | | | | | | | | | | | | | | |
Basic earnings per common share | | $ | 0.18 | | | $ | 0.12 | | | $ | 0.31 | | | $ | 0.21 | |
| | | | | | | | | | | | | | | | | |
Diluted earnings per common share | | $ | 0.18 | | | $ | 0.12 | | | $ | 0.31 | | | $ | 0.21 | |
BEAR STATE FINANCIAL, INC.
AVERAGE CONSOLIDATED BALANCE SHEETS and NET INTEREST ANALYSIS - UNAUDITED
(Dollars in thousands)
| | | Three MonthsEndedJune 30, | |
| | | 2017 | | | 2016 | |
| | | Average Balance | | | Interest | | | Average Yield/ Cost | | | Average Balance | | | Interest | | | Average Yield/ Cost | |
| | | (Dollars in Thousands) | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | | | | | |
Loans receivable(1) | | $ | 1,659,830 | | | $ | 19,392 | | | | 4.69 | % | | $ | 1,492,504 | | | $ | 17,519 | | | | 4.71 | % |
Investment securities(2) | | | 271,402 | | | | 1,618 | | | | 2.39 | | | | 188,808 | | | | 936 | | | | 1.99 | |
Other interest-earning assets | | | 59,330 | | | | 143 | | | | 0.97 | | | | 43,069 | | | | 80 | | | | 0.75 | |
Total interest-earning assets | | | 1,990,562 | | | | 21,153 | | | | 4.26 | | | | 1,724,381 | | | | 18,535 | | | | 4.31 | |
Noninterest-earning assets | | | 199,678 | | | | | | | | | | | | 213,341 | | | | | | | | | |
Total assets | | $ | 2,190,240 | | | | | | | | | | | $ | 1,937,722 | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits | | $ | 1,435,630 | | | | 1,737 | | | | 0.49 | | | $ | 1,394,262 | | | | 1,608 | | | | 0.46 | |
Other borrowings | | | 286,019 | | | | 759 | | | | 1.06 | | | | 99,467 | | | | 327 | | | | 1.32 | |
Total interest-bearing liabilities | | | 1,721,649 | | | | 2,496 | | | | 0.58 | | | | 1,493,729 | | | | 1,935 | | | | 0.52 | |
Noninterest-bearing deposits | | | 220,511 | | | | | | | | | | | | 215,766 | | | | | | | | | |
Noninterest-bearing liabilities | | | 5,817 | | | | | | | | | | | | 1,640 | | | | | | | | | |
Total liabilities | | | 1,947,977 | | | | | | | | | | | | 1,711,135 | | | | | | | | | |
Stockholders' equity | | | 242,263 | | | | | | | | | | | | 226,587 | | | | | | | | | |
Total liabilities andstockholders' equity | | $ | 2,190,240 | | | | | | | | | | | $ | 1,937,722 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income | | | | | | $ | 18,657 | | | | | | | | | | | $ | 16,600 | | | | | |
Net earning assets | | $ | 268,913 | | | | | | | | | | | $ | 230,652 | | | | | | | | | |
Interest rate spread | | | | | | | | | | | 3.68 | % | | | | | | | | | | | 3.79 | % |
Net interest margin | | | | | | | | | | | 3.76 | % | | | | | | | | | | | 3.86 | % |
Ratio of interest-earning assets toInterest-bearing liabilities | | | | | | | | | | | 115.62 | % | | | | | | | | | | | 115.44 | % |
| | | Six MonthsEndedJune 30, | |
| | | 2017 | | | 2016 | |
| | | Average Balance | | | Interest | | | Average Yield/ Cost | | | Average Balance | | | Interest | | | Average Yield/ Cost | |
| | | (Dollars in Thousands) | |
Interest-earning assets: | | | | | | | | | | | | | | | | | | | | | | | | |
Loans receivable(1) | | $ | 1,634,005 | | | $ | 38,871 | | | | 4.80 | % | | $ | 1,476,798 | | | $ | 35,205 | | | | 4.81 | % |
Investment securities(2) | | | 259,942 | | | | 3,113 | | | | 2.41 | | | | 197,533 | | | | 1,957 | | | | 2.00 | |
Other interest-earning assets | | | 45,029 | | | | 218 | | | | 0.98 | | | | 39,319 | | | | 164 | | | | 0.84 | |
Total interest-earning assets | | | 1,938,976 | | | | 42,202 | | | | 4.39 | | | | 1,713,650 | | | | 37,326 | | | | 4.39 | |
Noninterest-earning assets | | | 202,427 | | | | | | | | | | | | 215,630 | | | | | | | | | |
Total assets | | $ | 2,141,403 | | | | | | | | | | | $ | 1,929,280 | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits | | $ | 1,424,943 | | | | 3,417 | | | | 0.48 | | | $ | 1,382,011 | | | | 3,123 | | | | 0.46 | |
Other borrowings | | | 254,565 | | | | 1,293 | | | | 1.02 | | | | 100,736 | | | | 675 | | | | 1.35 | |
Total interest-bearing liabilities | | | 1,679,508 | | | | 4,710 | | | | 0.57 | | | | 1,482,747 | | | | 3,798 | | | | 0.52 | |
Noninterest-bearing deposits | | | 217,009 | | | | | | | | | | | | 218,837 | | | | | | | | | |
Noninterest-bearing liabilities | | | 5,615 | | | | | | | | | | | | 2,214 | | | | | | | | | |
Total liabilities | | | 1,902,132 | | | | | | | | | | | | 1,703,798 | | | | | | | | | |
Stockholders' equity | | | 239,271 | | | | | | | | | | | | 225,482 | | | | | | | | | |
Total liabilities andstockholders' equity | | $ | 2,141,403 | | | | | | | | | | | $ | 1,929,280 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Net interest income | | | | | | $ | 37,492 | | | | | | | | | | | $ | 33,528 | | | | | |
Net earning assets | | $ | 259,468 | | | | | | | | | | | $ | 230,903 | | | | | | | | | |
Interest rate spread | | | | | | | | | | | 3.82 | % | | | | | | | | | | | 3.87 | % |
Net interest margin | | | | | | | | | | | 3.90 | % | | | | | | | | | | | 3.95 | % |
Ratio of interest-earning assets toInterest-bearing liabilities | | | | | | | | | | | 115.45 | % | | | | | | | | | | | 115.57 | % |
(1) | Includes nonaccrual loans. |
| (2) | Includes FHLB and FRB stock. |
BEAR STATE FINANCIAL, INC.
ASSET QUALITY ANALYSIS - UNAUDITED
(Dollars in thousands)
| | | June 30, 2017 | | | December 31, 2016 | | | | | |
| | | Net (2) | | | % Total Assets | | | Net (2) | | | % Total Assets | | | Increase (Decrease) | |
Nonaccrual Loans: | | | | | | | | | | | | | | | | | | | | |
One- to four-family residential | | $ | 6,866 | | | | 0.30 | % | | $ | 6,709 | | | | 0.33 | % | | $ | 157 | |
Multifamily | | | 119 | | | | 0.01 | % | | | -- | | | | -- | | | | 119 | |
Nonfarm nonresidential | | | 7,172 | | | | 0.31 | % | | | 5,177 | | | | 0.25 | % | | | 1,995 | |
Farmland | | | 1,023 | | | | 0.05 | % | | | 783 | | | | 0.04 | % | | | 240 | |
Construction and land development | | | 212 | | | | 0.01 | % | | | 463 | | | | 0.02 | % | | | (251 | ) |
Commercial | | | 844 | | | | 0.04 | % | | | 4,071 | | | | 0.20 | % | | | (3,227 | ) |
Consumer | | | 190 | | | | 0.01 | % | | | 173 | | | | 0.01 | % | | | 17 | |
| | | | | | | | | | | | | | | | | | | | | |
Total nonaccrual loans | | | 16,426 | | | | 0.73 | % | | | 17,376 | | | | 0.85 | % | | | (950 | ) |
| | | | | | | | | | | | | | | | | | | | | |
Accruing loans 90 days or more past due | | | -- | | | | -- | | | | -- | | | | -- | | | | -- | |
| | | | | | | | | | | | | | | | | | | | | |
Real estate owned | | | 1,103 | | | | 0.05 | % | | | 1,945 | | | | 0.09 | % | | | (842 | ) |
| | | | | | | | | | | | | | | | | | | | | |
Total nonperforming assets | | | 17,529 | | | | 0.78 | % | | | 19,321 | | | | 0.94 | % | | | (1,792 | ) |
Performing restructured loans | | | 1,194 | | | | 0.05 | % | | | 4,804 | | | | 0.23 | % | | | (3,610 | ) |
| | | | | | | | | | | | | | | | | | | | | |
Total nonperforming assets and performing restructured loans (1) | | $ | 18,723 | | | | 0.83 | % | | $ | 24,125 | | | | 1.17 | % | | $ | (5,402 | ) |
| | (1) | The table does not include substandard loans which were judged not to be impaired totaling $22.8 million at June 30, 2017 and $30.7 million at December 31, 2016 or acquired ASC 310-30 purchased credit impaired loans which are considered performing. |
| | (2) | Loan balances are presented net of undisbursed loan funds, partial charge-offs and interest payments recorded as reductions in principal balances for financial reporting purposes. |
BEAR STATE FINANCIAL, INC.
CALCULATION OF RETURN ON AVERAGE TANGIBLE COMMON STOCKHOLDERS' EQUITY– UNAUDITED
(Dollars in thousands)
| | | For the Quarter Ending | |
| | | 6/30/2017 | | | 3/31/2017 | | | 12/31/2016 | | | 9/30/2016 | | | 6/30/2016 | |
Net income available to common stockholders | | $ | 6,657 | | | $ | 4,917 | | | $ | 4,833 | | | $ | 4,741 | | | $ | 4,542 | |
Average common stockholders' equity | | | 242,263 | | | | 236,247 | | | | 234,339 | | | | 231,758 | | | | 226,587 | |
Less average intangible assets: | | | | | | | | | | | | | | | | | | | | |
Goodwill | | | (40,196 | ) | | | (40,196 | ) | | | (40,196 | ) | | | (40,196 | ) | | | (40,196 | ) |
Core deposit intangible, net of accumulated amortization | | | (10,008 | ) | | | (10,265 | ) | | | (10,519 | ) | | | (10,775 | ) | | | (11,030 | ) |
| | | | | | | | | | | | | | | | | | | | | |
Average tangible common stockholders' equity | | $ | 192,059 | | | $ | 185,786 | | | $ | 183,624 | | | $ | 180,787 | | | $ | 175,361 | |
| | | | | | | | | | | | | | | | | | | | | |
Annualized return on average tangible common stockholders' equity | | | 13.9 | % | | | 10.7 | % | | | 10.4 | % | | | 10.4 | % | | | 10.4 | % |
BEAR STATE FINANCIAL, INC.
CALCULATION OF TANGIBLE BOOK VALUE PER COMMON SHARE - UNAUDITED
(In thousands, except per share data)
| | | For theQuarter Ending | |
| | | 6/30/2017 | | | 3/31/2017 | | | 12/31/2016 | | | 9/30/2016 | | | 6/30/2016 | |
Total common stockholder's equity | | $ | 244,533 | | | $ | 237,912 | | | $ | 233,427 | | | $ | 232,403 | | | $ | 228,534 | |
Less intangible assets: | | | | | | | | | | | | | | | | | | | | |
Goodwill | | | (40,196 | ) | | | (40,196 | ) | | | (40,196 | ) | | | (40,196 | ) | | | (40,196 | ) |
Core deposit intangible, net of accumulated amortization | | | (9,842 | ) | | | (10,098 | ) | | | (10,353 | ) | | | (10,608 | ) | | | (10,863 | ) |
Total intangible assets | | | (50,038 | ) | | | (50,294 | ) | | | (50,549 | ) | | | (50,804 | ) | | | (51,059 | ) |
Total tangible common stockholder's equity | | $ | 194,495 | | | $ | 187,618 | | | $ | 182,878 | | | $ | 181,599 | | | $ | 177,475 | |
| | | | | | | | | | | | | | | | | | | | | |
Common Shares Outstanding | | | 37,713 | | | | 37,690 | | | | 37,619 | | | | 37,601 | | | | 37,590 | |
| | | | | | | | | | | | | | | | | | | | | |
Tangible book value per common share | | $ | 5.16 | | | $ | 4.98 | | | $ | 4.86 | | | $ | 4.83 | | | $ | 4.72 | |
BEAR STATE FINANCIAL, INC.
RECONCILIATION OF NON-GAAP SELECTED CONSOLIDATED FINANCIAL DATA - UNAUDITED
(In thousands, except share data)
| | | | | | | For the Quarter Ending | |
| | | | | | | June | | | March | | | December | | | September | | | June | |
| | | | | | | 2017 | | | 2017 | | | 2016 | | | 2016 | | | 2016 | |
Net income | | | | | | $ | 6,657 | | | $ | 4,917 | | | $ | 4,833 | | | $ | 4,741 | | | $ | 4,542 | |
Adj: Loss (gain) on sale of securities, net | | | | | | | (37 | ) | | | (11 | ) | | | -- | | | | (21 | ) | | | -- | |
Adj: Claim on bank owned life insurance | | | | | | | (395 | ) | | | -- | | | | -- | | | | -- | | | | -- | |
Adj: Merger, acquisition and integration expenses | | | | | | | -- | | | | -- | | | | -- | | | | -- | | | | 137 | |
Adj: Branch restructure expense (1) | | | | | | | 29 | | | | 1,565 | | | | 41 | | | | (323 | ) | | | 571 | |
Adj: Net provision/loss/(gain) on real estate owned | | | | -- | | | | -- | | | | -- | | | | (444 | ) | | | -- | |
Adj: Deferred tax asset valuation allowance reversal | | | | | | | -- | | | | -- | | | | -- | | | | -- | | | | (897 | ) |
Tax effect of adjustments (2) | | | | | | | 3 | | | | (608 | ) | | | (16 | ) | | | 302 | | | | (271 | ) |
Total core earnings | | (A) | | | $ | 6,257 | | | $ | 5,863 | | | $ | 4,858 | | | $ | 4,255 | | | $ | 4,082 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total revenue | | | | | | $ | 23,351 | | | $ | 23,010 | | | $ | 21,501 | | | $ | 21,168 | | | $ | 20,911 | |
Adj: Loss (gain) on sale of securities, net | | | | | | | (37 | ) | | | (11 | ) | | | -- | | | | (21 | ) | | | -- | |
Adj: Claim on bank owned life insurance | | | | | | | (395 | ) | | | -- | | | | -- | | | | -- | | | | -- | |
Total core revenue | | | | | | $ | 22,919 | | | $ | 22,999 | | | $ | 21,501 | | | $ | 21,147 | | | $ | 20,911 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total non-interest expense | | | | | | $ | 12,795 | | | $ | 14,444 | | | $ | 13,625 | | | $ | 13,400 | | | $ | 14,989 | |
Adj: Merger, acquisition and integration expenses | | | | | | | -- | | | | -- | | | | -- | | | | -- | | | | (137 | ) |
Adj: Branch restructure expense (1) | | | | | | | (29 | ) | | | (1,565 | ) | | | (41 | ) | | | 323 | | | | (571 | ) |
Adj: Net (provision/loss)/gain on real estate owned | | | | -- | | | | -- | | | | -- | | | | 444 | | | | -- | |
Total core noninterest expense | | | | | | $ | 12,766 | | | $ | 12,879 | | | $ | 13,584 | | | $ | 14,167 | | | $ | 14,281 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total average assets | | (B) | | | $ | 2,190,240 | | | $ | 2,092,022 | | | $ | 2,019,792 | | | $ | 1,981,582 | | | $ | 1,937,722 | |
Total average stockholders' equity | | (C) | | | | 242,263 | | | | 236,247 | | | | 234,339 | | | | 231,758 | | | | 226,587 | |
Total average tangible stockholders' equity | | (D) | | | | 192,059 | | | | 185,786 | | | | 183,624 | | | | 180,787 | | | | 175,361 | |
Total tangible stockholders' equity, period end | | (E) | | | | 194,495 | | | | 187,618 | | | | 182,878 | | | | 181,599 | | | | 177,475 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total common shares outstanding, period-end | | (F) | | | | 37,713,171 | | | | 37,689,939 | | | | 37,618,597 | | | | 37,600,986 | | | | 37,589,543 | |
Diluted weighted average shares outstanding | | (G) | | | | 37,883,264 | | | | 37,880,022 | | | | 37,833,124 | | | | 37,807,419 | | | | 37,772,959 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Core earnings per share, diluted | | (A/G) | | | $ | 0.17 | | | $ | 0.15 | | | $ | 0.13 | | | $ | 0.11 | | | $ | 0.11 | |
Tangible book value per share, period-end | | (E/F) | | | $ | 5.16 | | | $ | 4.98 | | | $ | 4.86 | | | $ | 4.83 | | | $ | 4.72 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Core return on average assets | | (A/B) | | | | 1.15 | % | | | 1.14 | % | | | 0.95 | % | | | 0.85 | % | | | 0.84 | % |
Core return on average equity | | (A/C) | | | | 10.36 | % | | | 10.06 | % | | | 8.23 | % | | | 7.28 | % | | | 7.23 | % |
Core return on average tangible equity | | (A/D) | | | | 13.07 | % | | | 12.80 | % | | | 10.50 | % | | | 9.34 | % | | | 9.34 | % |
Core efficiency ratio(3) | | | | | | | 55.70 | % | | | 56.00 | % | | | 63.18 | % | | | 66.99 | % | | | 68.29 | % |
| (1) This adjustment primarily consists of costs associated with properties disposed or held for sale as a result of branch restructuring, including net (gains) losses on sales, impairment charges, and other expenses such as accelerated depreciation. For the quarter ended March 31,2017, this adjustment also included severance expense totaling $1.1 million resulting from branch and other organizational restructure, primarily due to severance of $0.8 million accrued upon the departure of the former CEO in January 2017. |
| (2) The tax effect is calculated at the Company’s blended statutory rate of 39.14% for adjustments that impact taxable income for periods in 2017 and 38.29% for periods ending in 2016. |
| (3) Core efficiency ratio is a non-GAAP ratio that is calculated by dividing core noninterest expense by total core revenue (the sum of net interest income and core noninterest income). Other companies may define and calculate this data differently. |
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