MyState has reported a "normalised" after-tax profit for the year to June 2013 of A$28.5 million. This was an increase of 11.8 per cent on the 2011/12 year, after adding back $2.1 million in costs for the acquisition of The Rock Building Society, in  Rockhampton, central Queensland.The Rock's integration with Tasmania's MyState, which started in December 2011, is now complete. The deal has enabled the group to diversify its banking business through exposure to two different economies, according to John Gilbert, MyState's managing director.Return on equity for the year was 10.2 per cent, while the group's tier-one capital, as at 30 June 2013, was 13.7 per cent.In what Gilbert conceded was a flat year, revenue rose by 2.8 per cent across the group, while its largest business, MyState Financial, saw the loan portfolio in its home market of Tasmania increase by four per cent, to $2.1 billion. With flat revenue figures, the management team said a drop in the group's cost-to-income ratio, down from 70.3 per cent, in 2011/12, to 68.3 per cent, after adjusting for The Rock's acquisition, was largely due to cost-cutting measures."These ratios are still higher than we want them to be, but if we get the revenue lines growing faster it will help us out," said Gilbert. The group has some way to go in this area, he conceded. When MyState took over The Rock it was at a time of aggressive sales of fixed income loans in central Queensland, not the type of loan products the Tasmanians had on offer, according to Gilbert."This was a market where the brokers were really wanting to write [business], so we saw a fair bit of churn," he said.Since then, MyState has added the types of mortgages to its portfolio that The Rock's external brokers wanted, primarily fixed-rate loans at the short end of the curve. Relationships with third-party brokers still have a way to go though, with volumes down by 9.7 per cent. Gilbert also explained that the MyState strategy for The Rock is to move its branches away from "pure transaction business", where customers just deposit their weekly pay and then withdraw it, to offer more complex products, such as home loans and term deposits, as well as cross-selling other products such as insurance."All the branches have been reconfigured to allow customers to sit and talk to branch staff," Gilbert said, adding that a focus on cost-cutting had meant two out of the nine branches in Rockhampton were now closed.He also expects the $6.7 million upgrade to the group's core banking system, which will come online later this year, to generate further cost savings.MyState will pay dividends for the year of 28 cents per share fully franked. This is unchanged from 2011/12 and means its pay-out ratio has declined slightly in contrast to that of the larger banks.