Bear State’s 2Q profit jumps 50%, loan portfolio and asset base continues double-digit growth
Fast-growing Bear State Financial Inc. saw second-quarter profits spike nearly 50% as the community bank’s strong loan and investment portfolio continued to grow the company’s asset base.
The earnings were released Thursday (July 27) before the markets opened.
For the period ended June 30, Bear State reported second-quarter earnings of $6.7 million, or 18 cents per share, compared to earnings of $4.5 million, or 12 cents per share, in the second quarter of 2016. The former First Federal Bank of Harrison experienced record revenue of $23.4 during the quarter, which is an increase of 12% from a year ago, bank officials said.
Bear State has continued its loan, asset and deposit growth even as the Little Rock-based bank has made several changes in its executive ranks in 2017. In early January, Bear State’s board of directors named 35-year old Matt Machen as the community bank’s president and CEO, replacing Mark McFatridge, who stepped down at the same time.
Machen formerly served as president of Bear State Bank under McFatridge. Machen joined Bear State following a $46.3 million recapitalization of the former First Federal Bank of Harrison in 2011 by Bear State Financial Holdings.
Under McFatridge’s leadership, Bear State reached the $2 billion asset mark at the end of the third quarter. Company officials said Machen successfully led the bank’s turnaround efforts in Northwest Arkansas before relocating to Little Rock to become CFO of the Little Rock-based financial concern.
In late April 2016, Machen and Sherri Billings were first promoted to bulk up the company’s executive ranks. Billings, the bank’s former chief accounting officer, took over as CFO after Machen was promoted to president. Machen was unanimously elected to the chief executive’s post by the board following McFatridge’s decision to step down.
Bear State’s 11-person board also includes former Alltel Corp. executives Rick Massey and Scott Ford. Massey served as general counsel for Alltel before the Little Rock wireless giant was purchased by Verizon Wireless in January 2009 for $28 billion. Ford was the Little Rock wireless giant’s CEO at the time.
Following are other financial highlights of Bear State’s second quarter.
• Total loans were $1.66 billion in the second quarter of 2016, an increase of $176.7 million, or 12% compared to the same period a year ago.
• Bear State’s assets rose 12% to $2.24 billion for the quarter ended June 30, compared to $1.99 billion a year ago. Total deposits were $1.7 billion in the quarterly period, up 4% increase compared to $1.64 billion in 2016.
• Total stockholders’ equity was $244.5 million in the second quarter, a 7% increase from $228.5 million in 2016. Book value per common share was $6.48 at the end of the second quarter, a 6% increase from $4.72 a year ago.
• Net interest income for the second quarter of 2017 was $18.7 million compared to $16.6 million for the same period in 2016.
At Wednesday’s session close, Bear State’s thinly traded shares (NASDAQ: BSF) were down 11 cents at $9.18 per share. Nearly 68% of the Arkansas banking holding company’s shares are held by company insiders, according to Thomson Reuters.