Bear State Turns Profit, Now Operates Under Single Banking Charter

Bear State Financial Inc., which consolidated its three subsidiary banks into a single charter in the first quarter, turned around its fortune and made a tidy profit for the first three months of the year after falling into the red a year ago.

The former First Federal Bancshares of Harrison on Friday reported earnings of $2.3 million, or seven cents per share, compared to losses of $277,000, or a penny per share, in the first quarter of fiscal 2014.

Core earnings for the first quarter, which does not include expenses and revenues from marginal business operations, came in at $2.8 million, or eight cents per share. That compares to losses of $96,000 a year ago.

Now based in Little Rock, Bear State officials said in the earnings statement that the bank is experiencing “significant operational and organizational improvements” as a result of the charter consolidation, which will likely be accretive in the second quarter. In trading Friday, the Arkansas bank’s shares were moving higher at $9.95, up two cents.

Last summer, Bear State completed its merger of First National Security Co. in Hot Springs and Heritage Bank headquartered in Jonesboro, Arkansas. The Harrison financial institution, whose board of directors includes former Alltel Corp. officers Rick Massey and Scott Ford, has improved its balance sheet over the past year and said this summer that it “expects further public announcements regarding its management and key operations as the (bank’s) integration project nears completion.”

For the quarter, Bear State’s total assets were $1.48 billion at March 31, 2015, a 160% improved from $569 million a year ago. Total deposits jumped 153% to $1.24 billion versus $489 million in the first quarter of 2014. The increase in both assets and deposits was primarily due to the merger with First National Security, officials said.

Total loans for the bank grew to $1.04 billion, compared to $643 million in the same period in 2014. Total stockholders’ equity was $173 million for the three-month period, a 142% increase from $72 million a year ago. Common stockholders’ equity was $140 million at the end of the first quarter, a 94% increase from $72 million on March 31, 2014.

Net interest income for the first quarter of 2015 was $12.6 million compared to $3.9 million for the same period in 2014. Interest income for the first quarter of 2015 was $14.1 million compared to $4.8 million for the same period in 2014.

According to the bank’s quarterly 10Q filing with the Securities and Exchange Commission, Bear State now operates 43 branches and three loan production offices throughout Arkansas and Southeast Oklahoma. Securities filings also show that the bank has experienced significant changes in its executive management team and board over the past six months.

Longtime board member and former chairman John Hendrix stepped down from his post in November 2014. Former Bear State Executive Vice President and COO Christopher Wewers resigned from the bank in early March, SEC filings show, filings show.

Former Arkansas Congressman John P. Hammerschmidt, who passed away on April 1, was also a longtime member of the bank holding company’s board of directors. Massey, Alltel’s former legal counsel, now serves as the bank’s chairman, CEO and president of the Little Rock-based community bank.