Earnings for Bear State Financial rose 8% in the third quarter as interest income increased from average balances, loans and investment securities. Profit was $5.132 million, or 14 cents per share, in the quarter that ended Sept. 30, up from $4.741 million, or 13 cents per share, in the same period in 2016.
Over the past three quarters, earnings for the Little Rock-based bank have risen to $16.706 million, or 44 cents per share, from $12.626 million, or 34 cents per share, over the same period in 2016.
The company’s efficiency ratio, the measure of a bank’s ability to turn assets into revenue, improved to 61%, from 63% in the same quarter in 2016. Average return on assets was 0.91%, compared to 0.95% in the same quarter in 2016. Net interest income rose 14% to $19.136 million. Total interest income rose 17% to $22.094 million.
Over the past three quarters, net interest income rose 12% to $56.627 million. Total interest income increased 14% to $64.295 million. Interest income has risen as a result of “increases in the average balances of and the yields earned on loans receivable and investment securities,” according to a news release.
In the third quarter, non-interest income, which includes earnings on deposits, mortgages and life insurance policies, fell 3% to $4.191 million largely because of a decline “in gain on sales of loans” because of a “decrease in the number of loans sold” in the quarter, the release shows. The decline was “slightly offset by an increase in deposit fee income.” Over the past three quarters, non-interest income has risen 6% to $13.061 million because of increases in deposit fee income and earnings on bank-owned life insurance, “offset by a decrease in gain on sales of loans.”
On Aug. 22, Bear State agreed to merge with Fayetteville-chartered Arvest Bank, purchasing the bank in an all-cash transaction. The merger is expected to close in the fourth quarter of 2017 or the first quarter of 2018, and shareholders have the option to receive $10.28 per share in cash when the deal closes. In the third quarter, the bank spent $1.3 million in connection to the deal with Arvest, $279,000 in branch restructuring expenses and a deferred tax asset adjustment of $186,000.
Total assets rose 12% to $2.24 billion in the third quarter as a result of increases in investments securities and loans. Loans increased 13% to $1.71 billion, and investment securities rose 26% to $248.3 million. Total deposits fell 4% to $1.59 billion.
Shares of Bear State (NASDAQ: BSF) were trading at $10.27, up 2 cents or 0.20% at mid-morning Thursday. In the past 52 weeks, shares have ranged between $10.95 and $8.65.