Great Southern Bancorp, Inc. (NASDAQ:GSBC), the holding company for
Great Southern Bank, today reported that preliminary earnings for
the three months ended September 30, 2024, were $1.41 per diluted
common share ($16.5 million net income) compared to $1.33 per
diluted common share ($15.9 million net income) for the three
months ended September 30, 2023.
Preliminary earnings for the nine months ended September 30,
2024, were $3.99 per diluted common share ($46.9 million net
income) compared to $4.52 per diluted common share ($54.7 million
net income) for the nine months ended September 30, 2023.
For the quarter ended September 30, 2024, annualized return on
average common equity was 11.10%, annualized return on average
assets was 1.11%, and annualized net interest margin was 3.42%,
compared to 11.47%, 1.11% and 3.43%, respectively, for the quarter
ended September 30, 2023. For the nine months ended September 30,
2024, annualized return on average common equity was 10.83%,
annualized return on average assets was 1.07%, and annualized net
interest margin was 3.39%, compared to 13.15%, 1.28% and 3.66%,
respectively, for the nine months ended September 30, 2023.
Third Quarter 2024 Key Results:
- Significant or Non-Recurring Items:During the
three months ended September 30, 2024, the Company reduced its
non-performing assets by $12.7 million, primarily through the
resolution by sale of three unrelated non-performing assets. The
Company recorded a gain on the sale of these foreclosed assets of
$459,000 in the quarter ended September 30, 2024.
- Capital: The Company’s
capital position remained strong as of September 30, 2024,
significantly exceeding the thresholds established by regulators.
On a preliminary basis, as of September 30, 2024, the Company’s
Tier 1 Leverage Ratio was 11.0%, Common Equity Tier 1 Capital Ratio
was 12.3%, Tier 1 Capital Ratio was 12.8%, and Total Capital Ratio
was 15.5%. Total stockholders’ equity increased $40.3 million in
the nine months ended September 30, 2024, and the Company’s
tangible common equity to tangible assets ratio was 10.0% at
September 30, 2024. Retained earnings increased $23.6 million
during this same nine-month period. See “Capital” section for
additional information regarding the changes to total stockholders’
equity.
- Liquidity: The Company had
secured borrowing line availability at the FHLBank and Federal
Reserve Bank of $1.12 billion and $305.0 million, respectively, at
September 30, 2024. In addition, at September 30, 2024, the Company
had unpledged securities with a market value totaling $370.0
million, which could be pledged as collateral for additional
borrowing capacity at either the FHLBank or Federal Reserve Bank.
Based partially on the foregoing, the Company believes it has ample
sources of liquidity as of September 30, 2024.
- Net Interest Income: Net
interest income for the third quarter of 2024 increased $1.2
million (or approximately 2.6%) to $48.0 million compared to $46.7
million for the third quarter of 2023. Net interest margin was
3.42% for the quarter ended September 30, 2024, compared to 3.43%
for the quarter ended September 30, 2023. Net interest income and
net interest margin in the second quarter of 2024 were $46.8
million and 3.43%, respectively.
- Total Loans: Total
outstanding loans, excluding mortgage loans held for sale,
increased $121.7 million, or 2.7%, from $4.59 billion at December
31, 2023, to $4.71 billion at September 30, 2024. This increase was
primarily in other residential (multi-family) loans with decreases
in commercial construction loans, commercial business loans and
one- to four-family residential loans. As construction projects are
completed, the loans either pay off or move to their respective
loan categories, primarily multi-family or commercial real
estate.
- Asset Quality: Non-performing
assets and potential problem loans totaled $13.7 million at
September 30, 2024, a decrease of $5.4 million from $19.1 million
at December 31, 2023. At September 30, 2024, non-performing assets
were $7.7 million (0.13% of total assets), a decrease of $4.1
million from $11.8 million (0.20% of total assets) at December 31,
2023. Non-performing assets decreased $12.7 million compared to
June 30, 2024. The decrease in non-performing assets in the three
months ended September 30, 2024, was mainly due to the sale of two
foreclosed assets and the payoff of a $2.4 million non-performing
commercial real estate loan. The Company experienced net
charge-offs of $1.5 million in each of the three and nine months
ended September 30, 2024. See “Asset Quality” section for
additional information regarding the changes to non-performing
assets.
Great Southern President and CEO Joseph W. Turner commented,
“Our third-quarter results reflect solid earnings and a strong
balance sheet, despite ongoing challenges in the broader economic
and banking environment. We reported earnings of $1.41 per diluted
common share, or $16.5 million in net income, for the third quarter
of 2024. This compares to $1.33 per diluted common share, or $15.9
million in net income, for the third quarter of 2023 and $1.45 per
diluted common share, or $17.0 million in net income, for the
second quarter of 2024. These results highlight our ability to
maintain stability and deliver consistent performance over the long
term, even as we face ongoing macro pressures. I'm proud of our
team for their focus on operational excellence and disciplined
approach to managing our business."
He continued, “Net interest income increased $1.2 million, or
approximately 2.6%, to $48.0 million, compared to $46.7 million for
the third quarter of 2023. Our net interest margin was 3.42%, down
slightly from 3.43% for both the second quarter of 2024 and the
third quarter of 2023. While market conditions have increased
deposit costs, we've countered these headwinds with higher yields
on loans and securities. Recent interest rate cuts by the Federal
Reserve may help moderate some of the upward pressure on deposit
costs, though we expect the full effects of these rate changes to
become more apparent in the coming months.”
Turner remarked, “One of our important achievements this quarter
was the significant reduction in non-performing assets, which
decreased by $12.7 million, bringing the total to $7.7 million, or
0.13% of total assets, at September 30, 2024. This reduction
underscores our proactive management of credit risk and reflects
the successful resolution of two key non-performing assets. We did,
however, record a $1.2 million provision for credit losses in the
quarter, as a result of charge-offs and growth in the loan
portfolio. We do not believe this charge is indicative of broader
portfolio concerns, however, and we continue to view the commercial
real estate loan market as a suitable option for potential
growth."
He then noted, "Our total loan portfolio, excluding mortgage
loans held for sale, has increased by $121.7 million, or 2.7%,
since the end of 2023. This increase was driven primarily by growth
in other residential (multi-family) loans, partially offset by
declines in construction loans, commercial business loans, and one-
to-four-family residential loans, as some construction projects
were completed and transferred to other loan categories. At the end
of the third quarter of 2024, our pipeline of loan commitments and
unfunded lines remained solid at more than $1.04 billion, despite a
slight decrease from the previous quarter."
Regarding expenses, Turner noted, "Non-interest expenses
decreased by $1.8 million, to $33.7 million, compared to the third
quarter of 2023. This reduction was primarily due to lower
professional fees and gains from foreclosed asset sales."
In closing, Turner noted, "We view our capital position as very
important and a strength of our Company. Stockholders' equity
increased by $40.3 million year to date, to $612.1 million,
representing a tangible common equity ratio of 10.0%. We continue
to prioritize returning capital to our stockholders through
dividends and strategic share repurchases. These actions reflect
our ongoing commitment to delivering long-term value to
stockholders. Our performance in the third quarter underscores our
ability to navigate the challenges of the current interest rate
environment while maintaining strong liquidity and capital
positions. We remain focused on prudent loan portfolio management,
controlling deposit costs, and leveraging our strengths to deliver
sustainable growth."
Selected Financial Data:
| (In thousands, except per
share data) |
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Net interest income |
$ |
47,975 |
|
|
$ |
46,738 |
|
|
$ |
139,609 |
|
|
$ |
148,068 |
|
| Provision (credit) for credit
losses on loans and unfunded commitments |
|
1,137 |
|
|
|
(1,195 |
) |
|
|
1,160 |
|
|
|
(2,140 |
) |
| Non-interest income |
|
6,992 |
|
|
|
7,852 |
|
|
|
23,631 |
|
|
|
23,510 |
|
| Non-interest expense |
|
33,717 |
|
|
|
35,557 |
|
|
|
104,548 |
|
|
|
104,738 |
|
| Provision for income
taxes |
|
3,623 |
|
|
|
4,349 |
|
|
|
10,647 |
|
|
|
14,325 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income |
$ |
16,490 |
|
|
$ |
15,879 |
|
|
$ |
46,885 |
|
|
$ |
54,655 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings per diluted common
share |
$ |
1.41 |
|
|
$ |
1.33 |
|
|
$ |
3.99 |
|
|
$ |
4.52 |
|
NET INTEREST INCOME
Net interest income for the third quarter of 2024 increased $1.2
million to $48.0 million, compared to $46.7 million for the third
quarter of 2023. Net interest margin was 3.42% in the third quarter
of 2024, compared to 3.43% in the same period of 2023 and the
second quarter of 2024, a decrease of one basis point. In comparing
the 2024 and 2023 third quarter periods, the average yield on loans
increased 52 basis points, the average yield on investment
securities increased 26 basis points and the average yield on other
interest earning assets increased five basis points. The average
rate on interest-bearing demand and savings deposits, time deposits
and brokered deposits increased 34 basis points, 65 basis points
and seven basis points, respectively, in the three months ended
September 30, 2024 compared to the three months ended September 30,
2023. The average interest rate spread was 2.74% for the three
months ended September 30, 2024, compared to 2.79% for the three
months ended September 30, 2023 and 2.77% for the three months
ended June 30, 2024. The ratio of average interest-earning assets
to average interest-bearing liabilities was 126.8% in the three
months ended September 30, 2024, compared to 131.0% in the three
months ended September 30, 2023 and 126.7% in the three months
ended June 30, 2024.
Net interest income for the nine months ended September 30, 2024
decreased $8.5 million to $139.6 million, compared to $148.1
million for the nine months ended September 30, 2023. Net interest
margin was 3.39% in the nine months ended September 30, 2024,
compared to 3.66% in the same period of 2023, a decrease of 27
basis points. The margin contraction primarily resulted from
increasing interest rates on all deposit types due to higher market
interest rates and increased competition for deposits. In comparing
the 2024 and 2023 nine-month periods, the average yield on loans
increased 47 basis points, the average yield on investment
securities increased 21 basis points and the average yield on other
interest earning assets increased 35 basis points. The average rate
on interest-bearing demand and savings deposits, time deposits and
brokered deposits increased 58 basis points, 125 basis points and
31 basis points, respectively, in the nine months ended September
30, 2024, compared to the nine months ended September 30, 2023. The
average interest rate spread was 2.72% for the nine months ended
September 30, 2024, compared to 3.09% for the nine months ended
September 30, 2023.
In October 2018, the Company entered into an interest rate swap
transaction as part of its ongoing interest rate management
strategies to hedge the risk of its floating rate loans. The
notional amount of the swap was $400 million with a contractual
termination date in October 2025. As previously disclosed by the
Company, on March 2, 2020, the Company and its swap counterparty
mutually agreed to terminate this swap, effective immediately. The
Company was paid $45.9 million, including accrued but unpaid
interest, from its swap counterparty as a result of this
termination. This $45.9 million, less the accrued to date interest
portion and net of deferred income taxes, is reflected in the
Company’s stockholders’ equity as part of Accumulated Other
Comprehensive Income (AOCI) and is being accreted to interest
income on loans monthly through the original contractual
termination date of October 6, 2025. The Company recorded $2.0
million of interest income related to the swap in both the three
months ended September 30, 2024 and the three months ended
September 30, 2023. The Company recorded $6.1 million of interest
income related to the swap in both the nine months ended September
30, 2024 and the nine months ended September 30, 2023. The Company
currently expects to have a sufficient amount of eligible variable
rate loans to continue to accrete this interest income ratably in
future periods. If this expectation changes and the amount of
eligible variable rate loans decreases significantly, the Company
may be required to recognize this interest income more rapidly.
In March 2022, the Company entered into another interest rate
swap transaction as part of its ongoing interest rate management
strategies to hedge the risk of its floating rate loans. The
notional amount of the swap was $300 million, with a contractual
termination date of March 1, 2024. Under the terms of the swap, the
Company received a fixed rate of interest of 1.6725% and paid a
floating rate of interest equal to one-month USD-LIBOR (or the
equivalent replacement USD-SOFR rate once the USD-LIBOR rate ceased
to be available). To the extent that the fixed rate exceeded
one-month USD-LIBOR/SOFR, the Company received net interest
settlements, which were recorded as loan interest income. If
one-month USD-LIBOR/SOFR exceeded the fixed rate of interest, the
Company paid net settlements to the counterparty and recorded those
net payments as a reduction of interest income on loans. As this
interest rate swap has reached its contractual termination date of
March 1, 2024, there have been no further interest income impacts
related to this swap after that date. The Company recorded a
reduction of loan interest income related to this swap transaction
of $1.9 million in the nine months ended September 30, 2024. The
Company recorded a reduction of loan interest income related to
this swap transaction of $2.8 million and $7.5 million,
respectively, in the three and nine months ended September 30,
2023.
In July 2022, the Company entered into two additional interest
rate swap transactions as part of its ongoing interest rate
management strategies to hedge the risk of its floating rate loans.
The notional amount of each swap is $200 million with an effective
date of May 1, 2023 and a termination date of May 1, 2028. Under
the terms of one swap, the Company receives a fixed rate of
interest of 2.628% and pays a floating rate of interest equal to
one-month USD-SOFR OIS. Under the terms of the other swap, the
Company receives a fixed rate of interest of 5.725% and pays a
floating rate of interest equal to one-month USD-Prime. In each
case, the floating rate resets monthly and net settlements of
interest due to/from the counterparty also occur monthly. To the
extent the fixed rate of interest exceeds the floating rate of
interest, the Company receives net interest settlements, which are
recorded as loan interest income. If the floating rate of interest
exceeds the fixed rate of interest, the Company pays net
settlements to the counterparty and records those net payments as a
reduction of interest income on loans. The Company recorded a
reduction of loan interest income related to these swap
transactions of $2.7 million in both the three months ended
September 30, 2024 and the three months ended September 30, 2023.
The Company recorded a reduction of loan interest income related to
these swap transactions of $8.3 million in the nine months ended
September 30, 2024, compared to $4.4 million reduction of interest
income in the 2023 nine-month period. At September 30, 2024, the
USD-Prime rate was 8.00% and the one-month USD-SOFR OIS rate was
5.16334%.
The Company’s net interest income in the third quarter of 2024
increased 2-3% compared to net interest income in both the second
quarter of 2024 and the third quarter of 2023. Net interest margin
was consistent in each of the three periods. The cost of deposits
has been negatively impacted over several quarters by the high
level of competition for deposits across the industry and the
lingering effects of liquidity events at several banks in March and
April 2023. The Company also had a substantial amount of time
deposits maturing at relatively low rates after the second quarter
of 2023, and these time deposits either renewed at higher rates or
left the Company, in the latter case requiring their replacement
with other funding sources at then-current higher market rates.
Market rates for time deposits have recently declined as the FOMC
has cut the federal funds rate by 50 basis points and signaled
further rate cuts may occur. As of September 30, 2024, time deposit
maturities over the next 12 months were as follows: within three
months -- $537 million, with a weighted-average rate of 4.53%;
within three to six months -- $507 million, with a weighted-average
rate of 4.07%; and within six to twelve months -- $145 million,
with a weighted-average rate of 3.20%. Based on time deposit market
rates in September 2024, replacement rates for these maturing time
deposits are likely to be approximately 3.50-4.20%.
For additional information on net interest income components,
see the “Average Balances, Interest Rates and Yields” tables in
this release.
NON-INTEREST INCOME
For the quarter ended September 30, 2024, non-interest income
decreased $860,000 to $7.0 million when compared to the quarter
ended September 30, 2023, primarily as a result of the following
items:
- Overdraft and insufficient funds fees: Overdraft and
insufficient funds fees decreased $710,000 compared to the
prior-year quarter. This decrease was primarily due to the
continuation of a multi-year trend whereby our customers are
choosing to forego authorizing payments of certain items which
exceed their account balances, resulting in fewer overdrafts in
checking accounts and related fees.
- Point-of-sale and ATM fees: Point-of-sale and ATM fees
decreased $257,000 compared to the prior-year quarter primarily due
to a portion of these transactions now being routed through
channels with lower fees to us, which we expect will continue in
future periods.
- Net gains on loan sales: Net gains on loan sales increased
$292,000 compared to the prior-year quarter. The increase was
partially due to an increase in balance of fixed-rate single-family
mortgage loans sold during the third quarter of 2024 compared to
the third quarter of 2023. Fixed-rate single-family mortgage loans
originated are generally subsequently sold in the secondary market.
The Company realized higher premiums on the sale of loans in the
2024 third quarter compared to the 2023 third quarter, as market
interest rates were more stable in the quarter ended September 30,
2024 compared to the quarter ended September 30, 2023.
For the nine months ended September 30, 2024, non-interest
income increased $121,000 to $23.6 million when compared to the
nine months ended September 30, 2023, primarily as a result of the
following items:
- Overdraft and
insufficient funds fees: Overdraft and insufficient funds fees
decreased $2.1 million compared to the prior-year period, for the
same reason noted in the quarterly comparison above.
- Point-of-sale and
ATM fees: Point-of-sale and ATM fees decreased $966,000 compared to
the prior-year period, for the same reason noted in the quarterly
comparison above.
- Net gains on loan
sales: Net gains on loan sales increased $998,000 compared to the
prior-year period, for the same reason noted in the quarterly
comparison above.
- Other income: Other
income increased $1.9 million compared to the prior-year period. In
the second quarter of 2024, the Company recorded $2.7 million of
other income, net of expenses and write-offs, related to the
termination of the Master Agreement between the Company and a
third-party software vendor for the conversion of the Company’s
core banking platform. This termination was previously disclosed in
the Company’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2024. This amount represented the elimination of certain
deferred credits and other liabilities, along with the write-off of
certain capitalized hardware, software and other assets, that
previously had been recorded as part of the preparation to convert
to the new core-banking platform.
NON-INTEREST EXPENSE
For the quarter ended September 30, 2024, non-interest expense
decreased $1.8 million to $33.7 million when compared to the
quarter ended September 30, 2023, primarily as a result of the
following items:
- Legal, Audit and Other Professional Fees: Legal, audit and
other professional fees decreased $1.0 million from the prior-year
quarter, to $809,000. In the quarter ended September 30, 2024, the
Company expensed a total of $39,000, compared to $903,000 expensed
in the quarter ended September 30, 2023, related to training and
implementation costs for the intended core systems conversion and
professional fees to consultants engaged to support the Company’s
proposed transition of core and ancillary software and information
technology systems.
- Expense on Other Real Estate Owned: Expense on other real
estate owned decreased $598,000 from the prior-year quarter, to a
gain of $536,000 in the quarter ended September 30, 2024. In the
third quarter of 2024, the Company recorded a gain on foreclosed
asset sales of $459,000 compared to $22,000 in the third quarter of
2023.
- Net occupancy expenses: Net occupancy expenses increased
$409,000 from the prior-year quarter. Various components of
computer license and support expenses collectively increased by
$369,000 in the third quarter of 2024 compared to the third quarter
of 2023.
For the nine months ended September 30, 2024, non-interest
expense decreased $190,000 to $104.5 million when compared to the
nine months ended September 30, 2023, primarily as a result of the
following items:
- Legal, Audit and Other Professional Fees: Legal, audit and
other professional fees decreased $1.1 million from the prior-year
period, to $4.4 million. In the 2024 period, the Company expensed a
total of $1.9 million, compared to $2.7 million expensed in the
2023 period, related to training and implementation costs for the
intended core systems conversion and professional fees to
consultants engaged to support the Company’s proposed transition of
core and ancillary software and information technology
systems.
- Expense on Other Real Estate Owned: Expense on other real
estate owned decreased $453,000 from the prior-year period, to a
gain of $190,000. In the 2024 period, the Company recorded a gain
on foreclosed loan sales of $491,000 compared to $41,000 in the
2023 period.
- Net occupancy expenses: Net occupancy expenses increased
$960,000 from the prior-year period, for the same reason noted in
the quarterly comparison above.
- Salaries and employee benefits: Salaries and employee benefits
increased $536,000, or 0.9%, from the prior-year period. Much of
this increase related to normal annual merit increases in various
lending and operations areas.
The Company’s efficiency ratio for the quarter ended September
30, 2024, was 61.34% compared to 65.13% for the same quarter in
2023. The Company’s efficiency ratio for the nine months ended
September 30, 2024, was 64.05% compared to 61.04% for the same
period in 2023. The Company’s ratio of non-interest expense to
average assets was 2.27% and 2.38% for the three- and nine-months
ended September 30, 2024, respectively, compared to 2.49% and 2.45%
for the three- and nine-months ended September 30, 2023,
respectively. Average assets for the three months ended September
30, 2024, increased $249.6 million, or 4.4%, compared to the three
months ended September 30, 2023, and average assets for the nine
months ended September 30, 2024, increased $139.6 million, or 2.4%,
compared to the nine months ended September 30, 2023. Both
increases were primarily due to growth in net loans receivable and
available-for-sale securities.
INCOME TAXES
For the three months ended September 30, 2024 and 2023, the
Company's effective tax rate was 18.0% and 21.5%, respectively. For
the nine months ended September 30, 2024 and 2023, the Company's
effective tax rate was 18.5% and 20.8%, respectively. These
effective rates were at or below the statutory federal tax rate of
21%, due primarily to the utilization of certain investment tax
credits and the Company’s tax-exempt investments and tax-exempt
loans, which reduced the Company’s effective tax rate. The
Company’s effective tax rate may fluctuate in future periods as it
is impacted by the level and timing of the Company’s utilization of
tax credits, the level of tax-exempt investments and loans, the
amount of taxable income in various state jurisdictions and the
overall level of pre-tax income. State tax expense estimates
continually evolve as taxable income and apportionment between
states are analyzed. The Company's effective income tax rate is
currently generally expected to remain below the statutory federal
tax rate due primarily to the factors noted above. The Company
currently expects its effective tax rate (combined federal and
state) will be approximately 18.0% to 20.0% in future periods,
primarily due to additional investment tax credits being utilized
beginning in 2024.
CAPITAL
As of September 30, 2024, total stockholders’ equity was $612.1
million (10.1% of total assets), equivalent to a book value of
$52.40 per common share. Total stockholders’ equity at December 31,
2023, was $571.8 million (9.8% of total assets), equivalent to a
book value of $48.44 per common share. At September 30, 2024, the
Company’s tangible common equity to tangible assets ratio was
10.0%, compared to 9.7% at December 31, 2023. See “Non-GAAP
Financial Measures.”
Included in stockholders’ equity at September 30, 2024 and
December 31, 2023, were unrealized losses (net of taxes) on the
Company’s available-for-sale investment securities totaling $29.1
million and $40.5 million, respectively. This change in net
unrealized losses during the nine months ended September 30, 2024,
primarily resulted from decreasing intermediate-term market
interest rates which generally increased the fair value of
investment securities.
In addition, included in stockholders’ equity at September 30,
2024, were realized gains (net of taxes) on the Company’s
terminated cash flow hedge (interest rate swap), totaling $6.4
million. This amount, plus associated deferred taxes, is expected
to be accreted to interest income over the remaining term of the
original interest rate swap contract, which was to end in October
2025. At September 30, 2024, the remaining pre-tax amount to be
recorded in interest income was $8.3 million. The net effect on
total stockholders’ equity over time will be no impact, as the
reduction of this realized gain will be offset by an increase in
retained earnings (as the interest income flows through pre-tax
income).
Also included in stockholders’ equity at September 30, 2024, was
an unrealized loss (net of taxes) on the Company’s two outstanding
cash flow hedges (interest rate swaps) totaling $6.4 million.
Increases in market interest rates since the inception of these
hedges have caused their fair values to decrease. The unrealized
loss position on these swaps improved substantially in the third
quarter of 2024 due to a decline in market interest rates in the
quarter.
As noted above, total stockholders' equity increased $40.3
million, from $571.8 million at December 31, 2023 to $612.1 million
at September 30, 2024. Stockholders’ equity increased due to net
income of $46.9 million in the nine-month period ended September
30, 2024 and a $6.9 million increase in stockholders’ equity during
that period due to stock option exercises. Accumulated other
comprehensive loss decreased $13.1 million during the nine months
ended September 30, 2024, primarily due to increases in the fair
value of cash flow hedges and available-for-sale investment
securities resulting from decreases in market interest rates.
Partially offsetting these increases were repurchases of the
Company’s common stock during the nine months ended September 30,
2024 totaling $12.5 million and dividends declared on common stock
during that period of $14.0 million.
The Company had unrealized losses on its portfolio of
held-to-maturity investment securities, which totaled $19.2 million
at September 30, 2024, that were not included in its total capital
balance. If these held-to-maturity unrealized losses were included
in capital (net of taxes), they would have decreased total
stockholder’s equity by $14.6 million at September 30, 2024. This
amount was equal to 2.4% of total stockholders’ equity of $612.1
million at September 30, 2024.
On a preliminary basis, as of September 30, 2024, the Company’s
Tier 1 Leverage Ratio was 11.0%, Common Equity Tier 1 Capital Ratio
was 12.3%, Tier 1 Capital Ratio was 12.8%, and Total Capital Ratio
was 15.5%. On September 30, 2024, and on a preliminary basis, the
Bank’s Tier 1 Leverage Ratio was 11.2%, Common Equity Tier 1
Capital Ratio was 12.9%, Tier 1 Capital Ratio was 12.9%, and Total
Capital Ratio was 14.2%.
In December 2022, the Company’s Board of Directors authorized
the purchase of an additional one million shares of the Company’s
common stock. As of September 30, 2024, a total of approximately
488,000 shares were available in our stock repurchase
authorization.
During the three months ended September 30, 2024, the Company
repurchased 2,971 shares of its common stock at an average price of
$53.04, and the Company’s Board of Directors declared a regular
quarterly cash dividend of $0.40 per common share, which, combined,
reduced stockholders’ equity by $4.8 million. During the nine
months ended September 30, 2024, the Company repurchased 239,933
shares of its common stock at an average price of $51.69, and the
Company’s Board of Directors declared regular quarterly cash
dividends totaling $1.20 per common share, which, combined, reduced
stockholders’ equity by $26.5 million.
LIQUIDITY AND DEPOSITS
Liquidity is a measure of the Company’s ability to generate
sufficient cash to meet present and future financial obligations in
a timely manner. Liquid assets include cash, interest-bearing
deposits with financial institutions and certain investment
securities and loans. As a result of the Company’s ability to
generate liquidity primarily through liability funding, management
believes that the Company maintains overall liquidity sufficient to
satisfy its depositors’ requirements and meet its borrowers’ credit
needs.
The Company’s primary sources of funds are customer deposits,
FHLBank advances, other borrowings, loan repayments, unpledged
securities, proceeds from sales of loans and available-for-sale
securities and funds provided from operations. The Company utilizes
some or all of these sources of funds depending on the comparative
costs and availability at the time. The Company has from time to
time chosen not to pay rates on deposits as high as the rates paid
by certain of its competitors and, when believed to be appropriate,
supplements deposits with less expensive alternative sources of
funds.
At September 30, 2024, the Company had the following available
secured lines and on-balance sheet liquidity:
|
|
|
|
|
|
|
|
| |
|
|
September 30, 2024 |
|
| |
Federal Home Loan Bank
line |
|
$ |
1,116.7 million |
|
|
| |
Federal Reserve Bank line |
|
$ |
305.0 million |
|
|
| |
Cash and cash equivalents |
|
$ |
208.4 million |
|
|
| |
Unpledged securities –
Available-for-sale |
|
$ |
344.3 million |
|
|
| |
Unpledged securities –
Held-to-maturity |
|
$ |
25.5 million |
|
|
| |
|
|
|
|
|
|
During the three months ended September 30, 2024, the Company’s
total deposits increased $82.2 million. Interest-bearing checking
balances increased $45.1 million (about 2.1%), primarily in certain
money market accounts, partially offset by decreases in NOW
accounts, while non-interest-bearing checking balances decreased
$13.5 million (about 1.6%). Time deposits generated through the
Company’s banking center and corporate services networks decreased
$87.7 million (about 10.1%). Brokered deposits increased $140.4
million (about 21.0%) through a variety of sources. The brokered
deposits received during the three months ended September 30, 2024
generally have a term of less than three months, so these funds may
be able to be replaced at a lower interest rate upon maturity,
depending on market interest rates at the time.
During the nine months ended September 30, 2024, the Company’s
total deposits decreased $24.2 million. Interest-bearing checking
balances increased $19.7 million (about 0.9%) and
non-interest-bearing checking balances decreased $38.8 million
(about 4.3%). Time deposits generated through the Company’s banking
center and corporate services networks decreased $141.6 million
(about 15.3%). Brokered deposits increased $148.9 million (about
22.5%) through a variety of sources.
At September 30, 2024, the Company had the following deposit
balances:
| |
|
|
September 30, 2024 |
|
|
|
Interest-bearing checking |
|
$ |
2,236.1 million |
|
|
| |
Non-interest-bearing
checking |
|
|
856.7 million |
|
|
| |
Time deposits |
|
|
794.2 million |
|
|
| |
Brokered deposits |
|
|
810.4 million |
|
|
| |
|
|
|
|
|
|
At September 30, 2024, the Company estimated that its uninsured
deposits, excluding deposit accounts of the Company’s consolidated
subsidiaries, were approximately $668 million (14% of total
deposits).
LOANS
Total net loans, excluding mortgage loans held for sale,
increased $121.7 million, or 2.7%, from $4.59 billion at December
31, 2023 to $4.71 billion at September 30, 2024. This increase was
primarily in other residential (multi-family) loans ($628 million
increase), partially offset by decreases in construction loans
($383 million decrease), commercial business loans ($91 million
decrease) and one- to four-family residential loans ($52 million
decrease). The pipeline of loan commitments increased in the third
quarter of 2024. The unfunded portion of construction loans
remained significant, but continued to decline, in the third
quarter of 2024. As construction projects were completed, the
related loans were either moved from the construction category to
the appropriate permanent loan categories or paid off.
For further information about the Company’s loan portfolio,
please see the quarterly loan portfolio presentation available on
the Company’s Investor Relations website under “Presentations.”
Loan commitments and the unfunded portion of loans at the dates
indicated were as follows (in thousands):
|
|
|
September30, 2024 |
|
June 30,2024 |
|
March 31,2024 |
|
December31, 2023 |
|
December31, 2022 |
|
December31, 2021 |
|
Closed non-construction loans with unused available
lines |
|
|
|
|
|
|
|
|
|
|
|
|
| Secured by real estate (one-
to four-family) |
$ |
205,677 |
$ |
200,630 |
$ |
206,992 |
$ |
203,964 |
$ |
199,182 |
$ |
175,682 |
| Secured by real estate (not
one- to four-family) |
|
— |
|
— |
|
— |
|
— |
|
— |
|
23,752 |
| Not secured by real estate –
commercial business |
|
120,847 |
|
122,685 |
|
120,387 |
|
82,435 |
|
104,452 |
|
91,786 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Closed construction
loans with unused available lines |
|
|
|
|
|
|
|
|
|
|
|
|
| Secured by real estate (one-to
four-family) |
|
79,554 |
|
109,153 |
|
103,839 |
|
101,545 |
|
100,669 |
|
74,501 |
| Secured by real estate (not
one-to four-family) |
|
477,741 |
|
570,621 |
|
680,149 |
|
719,039 |
|
1,444,450 |
|
1,092,029 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Loan commitments not
closed |
|
|
|
|
|
|
|
|
|
|
|
|
| Secured by real estate (one-to
four-family) |
|
20,622 |
|
21,698 |
|
20,410 |
|
12,347 |
|
16,819 |
|
53,529 |
| Secured by real estate (not
one-to four-family) |
|
118,046 |
|
33,273 |
|
50,858 |
|
48,153 |
|
157,645 |
|
146,826 |
| Not secured by real estate –
commercial business |
|
17,821 |
|
14,949 |
|
9,022 |
|
11,763 |
|
50,145 |
|
12,920 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
$ |
1,040,308 |
$ |
1,073,009 |
$ |
1,191,657 |
$ |
1,179,246 |
$ |
2,073,362 |
$ |
1,671,025 |
PROVISION FOR CREDIT LOSSES AND ALLOWANCE FOR CREDIT
LOSSES
Management estimates the allowance balance using relevant
available information, from internal and external sources, relating
to past events, current conditions, and reasonable and supportable
forecasts. Historical credit loss experience provides the basis for
the estimation of expected credit losses. Adjustments to historical
loss information are made for differences in current loan-specific
risk characteristics such as changes in underwriting standards,
portfolio mix, delinquency level or term, as well as for changes in
economic conditions, including but not limited to changes in the
national unemployment rate, commercial real estate price index,
consumer sentiment, gross domestic product (GDP) and construction
spending.
Challenging or worsening economic conditions from higher
inflation or interest rates, COVID-19 and subsequent variant
outbreaks or similar events, global unrest or other factors may
lead to increased losses in the portfolio and/or requirements for
an increase in provision expense. Management maintains various
controls in an attempt to identify and limit future losses, such as
a watch list of problem loans and potential problem loans,
documented loan administration policies and loan review staff to
review the quality and anticipated collectability of the portfolio.
Additional procedures provide for frequent management review of the
loan portfolio based on loan size, loan type, delinquencies,
financial analysis, ongoing correspondence with borrowers and
problem loan workouts. Management determines which loans are
collateral-dependent, evaluates risk of loss and makes additional
provisions to expense, if necessary, to maintain the allowance at a
satisfactory level.
During the quarter ended September 30, 2024, the Company
recorded provision expense of $1.2 million on its portfolio of
outstanding loans. During the quarter ended September 30, 2023, the
Company did not record a provision expense on its portfolio of
outstanding loans. During the nine months ended September 30, 2024,
the Company recorded provision expense of $1.7 million on its
portfolio of outstanding loans, compared to $1.5 million in the
nine months ended September 30, 2023. Total net charge-offs were
$1.5 million for the three months ended September 30, 2024,
compared to net charge-offs of $99,000 in the three months ended
September 30, 2023. Total net charge-offs were $1.5 million for the
nine months ended September 30, 2024, compared to net charge-offs
of $227,000 in the nine months ended September 30, 2023. For the
three months ended September 30, 2024, the Company recorded a
negative provision for losses on unfunded commitments of $63,000,
compared to a negative provision of $1.2 million for the three
months ended September 30, 2023. For the nine months ended
September 30, 2024, the Company recorded a negative provision for
losses on unfunded commitments of $540,000, compared to a negative
provision of $3.6 million for the nine months ended September 30,
2023. General market conditions and unique circumstances related to
specific industries and individual projects contribute to the
determination of the level of provisions and charge-offs in each
period.
The Bank’s allowance for credit losses as a percentage of total
loans was 1.36%, 1.39% and 1.39% at September 30, 2024, December
31, 2023 and June 30, 2024, respectively. Management considers the
allowance for credit losses adequate to cover losses inherent in
the Bank’s loan portfolio at September 30, 2024, based on recent
reviews of the Bank’s loan portfolio and current economic
conditions. If challenging economic conditions were to last longer
than anticipated or deteriorate further or management’s assessment
of the loan portfolio were to change, additional credit loss
provisions could be required, thereby adversely affecting the
Company’s future results of operations and financial condition.
ASSET QUALITY
At September 30, 2024, non-performing assets were $7.7 million,
a decrease of $4.1 million from $11.8 million at December 31, 2023,
and a decrease of $12.7 million from $20.4 million at June 30,
2024. Non-performing assets as a percentage of total assets were
0.13% at September 30, 2024, compared to 0.20% at December 31,
2023. One loan relationship, totaling $9.3 million, was transferred
from non-performing loans to foreclosed assets held for sale in the
three months ended June 30, 2024 and was sold during the three
months ended September 30, 2024. Another non-performing loan
totaling $2.4 million was also resolved in the three months ended
September 30, 2024. As a result of changes in loan portfolio
composition, changes in economic and market conditions and other
factors specific to a borrower’s circumstances, the level of
non-performing assets will fluctuate.
Compared to December 31, 2023, non-performing loans decreased
$4.3 million to $7.5 million at September 30, 2024. The majority of
this decrease was in the non-performing commercial real estate
loans category, which decreased $4.4 million from December 31,
2023. Compared to June 30, 2024, non-performing loans decreased
$3.5 million.
Compared to December 31, 2023, foreclosed assets increased
$240,000 to $263,000 at September 30, 2024. The majority of this
increase was in the commercial real estate loans category, which
increased $230,000 from December 31, 2023. Compared to June 30,
2024, foreclosed assets decreased $9.2 million, primarily due to
the sale of one asset noted previously.
Activity in the non-performing loans categories during the
quarter ended September 30, 2024, was as follows:
| |
|
BeginningBalance,July
1 |
|
Additionsto
Non-Performing |
|
Removedfrom
Non-Performing |
|
Transfersto
PotentialProblemLoans |
|
Transfers
toForeclosedAssets
andRepossessions |
|
Charge-Offs |
|
Payments |
|
EndingBalance,September
30 |
| |
|
(In thousands) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One- to four-family construction |
$ |
— |
$ |
— |
$ |
— |
|
$ |
— |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
| Subdivision construction |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
| Land development |
|
— |
|
553 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
553 |
| Commercial construction |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
| One- to four-family
residential |
|
1,147 |
|
41 |
|
(524 |
) |
|
— |
|
— |
|
|
— |
|
|
(71 |
) |
|
593 |
| Other residential
(multi-family) |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
| Commercial real estate |
|
9,764 |
|
287 |
|
— |
|
|
— |
|
(230 |
) |
|
(1,368 |
) |
|
(2,351 |
) |
|
6,102 |
| Commercial business |
|
— |
|
139 |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
139 |
| Consumer |
|
73 |
|
73 |
|
— |
|
|
— |
|
— |
|
|
(15 |
) |
|
(35 |
) |
|
96 |
|
Total non-performing loans |
$ |
10,984 |
$ |
1,093 |
$ |
(524 |
) |
$ |
— |
$ |
(230 |
) |
$ |
(1,383 |
) |
$ |
(2,457 |
) |
$ |
7,483 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September 30, 2024, the non-performing commercial real estate
category included three loans, none of which was added during the
current quarter. The largest relationship in the category, which
totaled $6.0 million, or 98.6% of the total category, was added to
non-performing loans during the second quarter of 2023 and is
collateralized by an office building in Missouri. The balance of
this relationship was reduced by a charge-off of $1.2 million
during the three months ended September 30, 2024. Another loan,
totaling $2.4 million, which was a purchased participation loan
originally obtained through an FDIC-assisted acquisition, was
collateralized by a low-income assisted living facility in
Wisconsin. During the third quarter of 2024, the Company initiated
foreclosure on this collateral through a sheriff’s sale. The
Company was outbid at the sale by another party. Under the sale
process in the State of Wisconsin, the buyer has a short period of
time to provide the balance of the sales proceeds to the court (10%
of the sales price was placed with the court as non-refundable
funds and would be remitted to the Company should the buyer fail to
complete the purchase). The judge has signed the order confirming
the sheriff’s sale, and we expect this transaction will be
completed in October 2024. The non-performing one- to four-family
residential category included four loans. The largest relationship
in the category totaled $525,000, or 88.6% of the category, and was
added in the second quarter of 2024. The land development category
consisted of one loan added during the current quarter. This loan
is collateralized by improved commercial land in the Omaha, Neb.
area. The non-performing consumer category included six loans,
three of which were added during the current quarter.
Potential problem loans decreased $1.4 million, to $6.0 million
at September 30, 2024 from $7.4 million at December 31, 2023.
Compared to June 30, 2024, potential problem loans increased
$385,000. The increase during the quarter was primarily due to
multiple loans totaling $502,000 being added to potential problem
loans, partially offset by $51,000 in loan payments, $32,000 in
loans moved to non-performing, $28,000 in charge-offs and $6,000 in
loans removed from the potential problem category.
Activity in the potential problem loans category during the
quarter ended September 30, 2024, was as follows:
| |
|
BeginningBalance,July
1 |
|
Additions
toPotentialProblem |
|
RemovedfromPotentialProblem |
|
Transfersto
Non-Performing |
|
Transfers
toForeclosedAssets
andRepossessions |
|
Charge-Offs |
|
LoanAdvances(Payments) |
|
EndingBalance,September
30 |
| |
|
(In thousands) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One- to four-family construction |
$ |
— |
$ |
— |
$ |
— |
|
$ |
— |
|
$ |
— |
$ |
— |
|
$ |
— |
|
$ |
— |
| Subdivision construction |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
| Land development |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
| Commercial construction |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
| One- to four-family
residential |
|
326 |
|
378 |
|
— |
|
|
(32 |
) |
|
— |
|
— |
|
|
(4 |
) |
|
668 |
| Other residential
(multi-family) |
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
| Commercial real estate |
|
4,358 |
|
— |
|
— |
|
|
— |
|
|
— |
|
— |
|
|
(19 |
) |
|
4,339 |
| Commercial business |
|
208 |
|
— |
|
— |
|
|
— |
|
|
— |
|
— |
|
|
(15 |
) |
|
193 |
| Consumer |
|
713 |
|
124 |
|
(6 |
) |
|
— |
|
|
— |
|
(28 |
) |
|
(13 |
) |
|
790 |
|
Total potential problem loans |
$ |
5,605 |
$ |
502 |
$ |
(6 |
) |
$ |
(32 |
) |
$ |
— |
$ |
(28 |
) |
$ |
(51 |
) |
$ |
5,990 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September 30, 2024, the commercial real estate category of
potential problem loans included three loans, all of which are part
of one relationship and were added during the second quarter of
2024. This relationship is collateralized by three nursing care
facilities located in southwest Missouri. The borrower’s business
cash flow was negatively impacted by a labor shortage and a
decrease in Medicaid reimbursement during 2022-2023. Monthly
payments were timely made prior to the transfer to this category
and have continued to be paid. The one- to four-family residential
category of potential problem loans included seven loans, three of
which were added during the current quarter. The largest
relationship in this category totaled $154,000, or 23.0% of the
total category. The commercial business category of potential
problem loans included two loans. The largest relationship in this
category totaled $191,000, or 99.0% of the total category, and was
added during the second quarter of 2024. The consumer category of
potential problem loans included 13 loans, five of which were added
during the current quarter, including one home equity loan totaling
$598,000 that is related to the nursing care facility relationship
noted above.
Activity in foreclosed assets and repossessions during the
quarter ended September 30, 2024 was as follows:
| |
|
BeginningBalance,July
1 |
|
Additions |
|
ORE
andRepossessionSales |
|
CapitalizedCosts |
|
ORE
andRepossessionWrite-Downs |
|
EndingBalance,September
30 |
| |
|
(In thousands) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to four-family construction |
$ |
— |
$ |
— |
$ |
— |
|
$ |
— |
$ |
— |
$ |
— |
| Subdivision construction |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
— |
| Land development |
|
133 |
|
— |
|
(133 |
) |
|
— |
|
— |
|
— |
| Commercial construction |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
— |
| One- to four-family
residential |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
— |
| Other residential
(multi-family) |
|
9,279 |
|
— |
|
(9,279 |
) |
|
— |
|
— |
|
— |
| Commercial real estate |
|
— |
|
230 |
|
— |
|
|
— |
|
— |
|
230 |
| Commercial business |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
— |
| Consumer |
|
17 |
|
35 |
|
(19 |
) |
|
— |
|
— |
|
33 |
|
Total foreclosed assets and repossessions |
$ |
9,429 |
$ |
265 |
$ |
(9,431 |
) |
$ |
— |
$ |
— |
$ |
263 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
At September 30, 2024, the commercial real estate category of
foreclosed assets consisted of one property which was transferred
from non-performing loans during the three months ended September
30, 2024, as indicated above, and was subsequently sold in October
2024. The additions and sales in the consumer category were due to
the volume of repossessions of automobiles, which generally are
subject to a shorter repossession process. The other residential
(multi-family) category of foreclosed assets previously included
one property consisting of student housing in Texas, which was
added during the three months ended June 30, 2024, as indicated
above. This property was sold in the three months ended September
30, 2024, with the Company realizing a gain of $300,000.
BUSINESS INITIATIVES
Since early 2022, Great Southern had been preparing to convert
to a new core banking platform (New System) to be delivered by a
third-party vendor. As previously disclosed, the migration to
the New System, originally scheduled for the third quarter of 2023,
was delayed to mid-2024. In addition, as also previously
disclosed, certain contractual disputes arose between Great
Southern and the third-party vendor. While discussions were
ongoing between the parties for an extended period of time, no
meaningful progress was made in resolving the contractual
disputes.
The system migration efforts were beset by a variety of
significant issues, including having missed a second conversion
date because of continued operational and system problems.
Therefore, Great Southern took the following actions to protect its
interests. On April 24, 2024, Great Southern informed the
third-party vendor that it was terminating the Master Agreement
between Great Southern and the third-party vendor in accordance
with Great Southern’s rights under the Master Agreement. In
addition, on April 24, 2024, Great Southern initiated legal action
against the third-party vendor by filing a complaint in the U.S.
District Court for the Western District of Missouri, Southern
Division. The complaint seeks to recover damages caused by the
third-party vendor’s material breach of the Master Agreement,
inability and/or inaction on the part of the third-party vendor to
effectively and timely manage the system migration, as well as the
third-party vendor’s misrepresentations and omissions. The
third-party vendor filed a counterclaim alleging that Great
Southern terminated the Master Agreement without cause and that
Great Southern must pay an early termination fee in an amount to be
proven at trial. Great Southern denies the allegations in the
third-party vendor's counterclaim and will vigorously defend
itself. The parties continue informal settlement discussions, but
there is no guarantee that the parties will reach a mutually agreed
upon settlement to terminate the litigation.
Great Southern now expects to continue operations with its
current core banking provider, which will allow Great Southern to
offer its full array of products and services.
In 2025, the banking center at Benton and Chestnut in
Springfield, Mo. will be replaced with a newly-constructed building
on the same property at 723 N. Benton. Construction on the new
building is anticipated to begin in the first quarter of 2025, with
completion in the fourth quarter of 2025. During construction,
customers will be served in a temporary facility on the property.
The Company also has 11 other banking centers and an Express Center
in Springfield.
Kris Conley, Chief Retail Banking Officer, will retire in
December 2024 after a notable career at Great Southern Bank. He
joined the company in 1998 and has led the retail banking division
since 2010. During his tenure, Great Southern expanded from 30
banking centers, mainly in southwest Missouri, to 89 banking
centers across six states. In early 2023, Conley announced his
retirement plans to facilitate a smooth transition, with Laura
Smith named as his successor. Smith, who has been with Great
Southern since 2003, previously managed the Company’s investment
services division.
Kelly Polonus, Chief Communications & Marketing Officer,
will also retire in December 2024, concluding a distinguished
41-year career in banking, including the last 22 years at Great
Southern Bank. She announced her retirement in mid-2023 to ensure a
seamless management transition. Succeeding Polonus will be Stacy
Fender, who joined Great Southern in June 2024 after serving 18
years in communications and marketing roles at a regional
healthcare system.
The Company will host a conference call on Thursday, October 17,
2024, at 2:00 p.m. Central Time to discuss third quarter 2024
preliminary earnings. The call will be available live or in a
recorded version at the Company’s Investor Relations website,
http://investors.greatsouthernbank.com. Participants may register
for the call at
https://register.vevent.com/register/BIcf52d5fdfdb24c6383d492e9d4e7b00b.
Headquartered in Springfield, Missouri, Great Southern offers a
broad range of banking services to customers. The Company operates
89 retail banking centers in Missouri, Iowa, Kansas, Minnesota,
Arkansas and Nebraska and commercial lending offices in Atlanta,
Charlotte, Chicago, Dallas, Denver, Omaha, and Phoenix. The common
stock of Great Southern Bancorp, Inc. is listed on the Nasdaq
Global Select Market under the symbol “GSBC.”
www.GreatSouthernBank.com
Forward-Looking Statements
When used in this press release and in other documents filed or
furnished by Great Southern Bancorp, Inc. (the “Company”) with the
Securities and Exchange Commission (the “SEC”), in the Company's
other press releases or other public or stockholder communications,
and in oral statements made with the approval of an authorized
executive officer, the words or phrases “may,” “might,” “could,”
“should,” "will likely result," "are expected to," "will continue,"
"is anticipated," “believe,” "estimate," "project," "intends" or
similar expressions are intended to identify "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements also include, but
are not limited to, statements regarding plans, objectives,
expectations or consequences of announced transactions, known
trends and statements about future performance, operations,
products and services of the Company. The Company’s ability to
predict results or the actual effects of future plans or strategies
is inherently uncertain, and the Company’s actual results could
differ materially from those contained in the forward-looking
statements.
Factors that could cause or contribute to such differences
include, but are not limited to: (i) expected revenues, cost
savings, earnings accretion, synergies and other benefits from the
Company's merger and acquisition activities might not be
realized within the anticipated time frames or at all, and costs or
difficulties relating to integration matters, including but not
limited to customer and employee retention, might be greater than
expected; (ii) changes in economic conditions, either nationally or
in the Company's market areas; (iii) the remaining effects of the
COVID-19 pandemic on general economic and financial market
conditions and on public health; (iv) fluctuations in interest
rates, the effects of inflation or a potential recession, whether
caused by Federal Reserve actions or otherwise; (v) the impact of
bank failures or adverse developments at other banks and related
negative press about the banking industry in general on investor
and depositor sentiment; (vi) slower economic growth caused by
changes in energy prices, supply chain disruptions or other
factors; (vii) the risks of lending and investing activities,
including changes in the level and direction of loan delinquencies
and write-offs and changes in estimates of the adequacy of the
allowance for credit losses; (viii) the possibility of realized or
unrealized losses on securities held in the Company's investment
portfolio; (ix) the Company's ability to access cost-effective
funding and maintain sufficient liquidity; (x) fluctuations in real
estate values and both residential and commercial real estate
market conditions; (xi) the ability to adapt successfully to
technological changes to meet customers' needs and developments in
the marketplace; (xii) the possibility that security measures
implemented might not be sufficient to mitigate the risk of a
cyber-attack or cyber theft, and that such security measures might
not protect against systems failures or interruptions; (xiii)
legislative or regulatory changes that adversely affect the
Company's business; (xiv) changes in accounting policies and
practices or accounting standards; (xv) results of examinations of
the Company and Great Southern Bank by their regulators, including
the possibility that the regulators may, among other things,
require the Company to limit its business activities, change its
business mix, increase its allowance for credit losses, write-down
assets or increase its capital levels, or affect its ability to
borrow funds or maintain or increase deposits, which could
adversely affect its liquidity and earnings; (xvi) costs and
effects of litigation, including settlements and judgments; (xvii)
competition; and (xviii) natural disasters, war, terrorist
activities or civil unrest and their effects on economic and
business environments in which the Company operates. The Company
wishes to advise readers that the factors listed above and other
risks described in the Company’s most recent Annual Report on Form
10-K, including, without limitation, those described under “Item
1A. Risk Factors,” subsequent Quarterly Reports on Form 10-Q and
other documents filed or furnished from time to time by the Company
with the SEC (which are available on our website at
www.greatsouthernbank.com and the SEC’s website at www.sec.gov),
could affect the Company's financial performance and cause the
Company's actual results for future periods to differ materially
from any opinions or statements expressed with respect to future
periods in any current statements.
The Company does not undertake-and specifically declines any
obligation- to publicly release the result of any revisions which
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.
The following tables set forth selected consolidated financial
information of the Company at the dates and for the periods
indicated. Financial data at all dates and for all periods is
unaudited. In the opinion of management, all adjustments, which
consist only of normal recurring accrual adjustments, necessary for
a fair presentation of the results at and for such unaudited dates
and periods have been included. The results of operations and other
data for the three and nine months ended September 30, 2024 and
2023, and the three months ended June 30, 2024, are not necessarily
indicative of the results of operations which may be expected for
any future period.
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2024 |
|
|
2023 |
|
Selected Financial Condition Data: |
(In thousands) |
| |
|
|
|
|
|
|
Total assets |
$ |
6,036,521 |
|
$ |
5,812,402 |
|
Loans receivable, gross |
|
4,781,953 |
|
|
4,661,348 |
|
Allowance for credit losses |
|
64,915 |
|
|
64,670 |
|
Other real estate owned, net |
|
263 |
|
|
23 |
|
Available-for-sale securities, at fair value |
|
565,225 |
|
|
478,207 |
|
Held-to-maturity securities, at amortized cost |
|
189,257 |
|
|
195,023 |
|
Deposits |
|
4,697,460 |
|
|
4,721,708 |
|
Total borrowings |
|
618,651 |
|
|
423,806 |
|
Total stockholders’ equity |
|
612,090 |
|
|
571,829 |
|
Non-performing assets |
|
7,746 |
|
|
11,771 |
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Three MonthsEnded |
| |
|
September 30, |
|
|
September 30, |
|
|
June 30, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
| |
|
(In thousands) |
| Selected Operating
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
$ |
83,796 |
|
|
$ |
75,272 |
|
|
$ |
242,113 |
|
|
$ |
220,353 |
|
|
$ |
80,927 |
|
|
Interest expense |
|
35,821 |
|
|
|
28,534 |
|
|
|
102,504 |
|
|
|
72,285 |
|
|
|
34,109 |
|
|
Net interest income |
|
47,975 |
|
|
|
46,738 |
|
|
|
139,609 |
|
|
|
148,068 |
|
|
|
46,818 |
|
|
Provision (credit) for credit losses on loans and unfunded
commitments |
|
1,137 |
|
|
|
(1,195 |
) |
|
|
1,160 |
|
|
|
(2,140 |
) |
|
|
(607 |
) |
|
Non-interest income |
|
6,992 |
|
|
|
7,852 |
|
|
|
23,631 |
|
|
|
23,510 |
|
|
|
9,833 |
|
|
Non-interest expense |
|
33,717 |
|
|
|
35,557 |
|
|
|
104,548 |
|
|
|
104,738 |
|
|
|
36,409 |
|
|
Provision for income taxes |
|
3,623 |
|
|
|
4,349 |
|
|
|
10,647 |
|
|
|
14,325 |
|
|
|
3,861 |
|
|
Net income |
$ |
16,490 |
|
|
$ |
15,879 |
|
|
$ |
46,885 |
|
|
$ |
54,655 |
|
|
$ |
16,988 |
|
|
|
At or For the ThreeMonths
Ended |
|
At or For the Nine Months
Ended |
|
At or For the ThreeMonths Ended |
| |
September 30, |
|
September 30, |
|
June 30, |
|
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
| |
(Dollars in thousands, except per share data) |
| Per Common
Share: |
|
|
|
|
|
|
|
|
Net income (fully diluted) |
$ |
1.41 |
|
$ |
1.33 |
|
|
$ |
3.99 |
|
$ |
4.52 |
|
|
$ |
1.45 |
|
|
Book value |
$ |
52.40 |
|
$ |
44.81 |
|
|
$ |
52.40 |
|
$ |
44.81 |
|
|
$ |
49.11 |
|
| |
|
|
|
|
|
|
|
|
Earnings Performance Ratios: |
|
|
|
|
|
|
|
|
Annualized return on average assets |
|
1.11% |
|
|
1.11% |
|
|
|
1.07% |
|
|
1.28% |
|
|
|
1.17% |
|
|
Annualized return on average common stockholders’ equity |
|
11.10% |
|
|
11.47% |
|
|
|
10.83% |
|
|
13.15% |
|
|
|
12.03% |
|
|
Net interest margin |
|
3.42% |
|
|
3.43% |
|
|
|
3.39% |
|
|
3.66% |
|
|
|
3.43% |
|
|
Average interest rate spread |
|
2.74% |
|
|
2.79% |
|
|
|
2.72% |
|
|
3.09% |
|
|
|
2.77% |
|
|
Efficiency ratio |
|
61.34% |
|
|
65.13% |
|
|
|
64.05% |
|
|
61.04% |
|
|
|
64.27% |
|
|
Non-interest expense to average total assets |
|
2.27% |
|
|
2.49% |
|
|
|
2.38% |
|
|
2.45% |
|
|
|
2.50% |
|
| |
|
|
|
|
|
|
|
| Asset Quality
Ratios: |
|
|
|
|
|
|
|
|
Allowance for credit losses to period-end loans |
|
1.36% |
|
|
1.40% |
|
|
|
1.36% |
|
|
1.40% |
|
|
|
1.39% |
|
|
Non-performing assets to period-end assets |
|
0.13% |
|
|
0.19% |
|
|
|
0.13% |
|
|
0.19% |
|
|
|
0.34% |
|
|
Non-performing loans to period-end loans |
|
0.16% |
|
|
0.23% |
|
|
|
0.16% |
|
|
0.23% |
|
|
|
0.23% |
|
|
Annualized net charge-offs (recoveries) to average loans |
|
0.13% |
|
|
0.01% |
|
|
|
0.03% |
|
|
0.01% |
|
|
|
(0.01)% |
|
| |
|
|
|
|
|
|
|
| |
| Great
Southern Bancorp, Inc. and
SubsidiariesConsolidated Statements of Financial
Condition(In thousands, except number of
shares) |
| |
| |
|
September 30,2024 |
|
December 31,2023 |
|
June 30,2024 |
| |
|
|
|
|
|
|
| Assets |
|
|
|
|
|
|
|
Cash |
$ |
105,098 |
|
$ |
102,529 |
|
$ |
109,639 |
|
|
Interest-bearing deposits in other financial institutions |
|
103,267 |
|
|
108,804 |
|
|
76,830 |
|
|
Cash and cash equivalents |
|
208,365 |
|
|
211,333 |
|
|
186,469 |
|
| |
|
|
|
|
|
|
|
Available-for-sale securities |
|
565,225 |
|
|
478,207 |
|
|
549,084 |
|
|
Held-to-maturity securities |
|
189,257 |
|
|
195,023 |
|
|
191,224 |
|
|
Mortgage loans held for sale |
|
9,959 |
|
|
5,849 |
|
|
13,116 |
|
|
Loans receivable, net of allowance for credit losses of $64,915 –
September 2024; $64,670 – December 2023; $65,255 – June 2024 |
|
4,711,276 |
|
|
4,589,620 |
|
|
4,633,628 |
|
|
Interest receivable |
|
22,262 |
|
|
21,206 |
|
|
22,420 |
|
|
Prepaid expenses and other assets |
|
142,685 |
|
|
106,225 |
|
|
144,552 |
|
|
Other real estate owned and repossessions, net |
|
263 |
|
|
23 |
|
|
9,429 |
|
|
Premises and equipment, net |
|
133,311 |
|
|
138,591 |
|
|
134,527 |
|
|
Goodwill and other intangible assets |
|
10,202 |
|
|
10,527 |
|
|
10,310 |
|
|
Federal Home Loan Bank stock and other interest-earning assets |
|
17,912 |
|
|
26,313 |
|
|
30,052 |
|
|
Current and deferred income taxes |
|
25,804 |
|
|
29,485 |
|
|
33,955 |
|
| |
|
|
|
|
|
|
|
Total Assets |
$ |
6,036,521 |
|
$ |
5,812,402 |
|
$ |
5,958,766 |
|
| |
|
|
|
|
|
|
| Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Deposits |
$ |
4,697,460 |
|
$ |
4,721,708 |
|
$ |
4,615,295 |
|
|
Securities sold under reverse repurchase agreements with
customers |
|
75,829 |
|
|
70,843 |
|
|
74,155 |
|
|
Short-term borrowings |
|
442,246 |
|
|
252,610 |
|
|
476,347 |
|
|
Subordinated debentures issued to capital trust |
|
25,774 |
|
|
25,774 |
|
|
25,774 |
|
|
Subordinated notes |
|
74,802 |
|
|
74,579 |
|
|
74,727 |
|
|
Accrued interest payable |
|
12,002 |
|
|
6,225 |
|
|
9,006 |
|
|
Advances from borrowers for taxes and insurance |
|
9,625 |
|
|
4,946 |
|
|
8,240 |
|
|
Accounts payable and accrued expenses |
|
79,746 |
|
|
76,401 |
|
|
99,420 |
|
|
Liability for unfunded commitments |
|
6,947 |
|
|
7,487 |
|
|
7,010 |
|
|
Total Liabilities |
|
5,424,431 |
|
|
5,240,573 |
|
|
5,389,974 |
|
| |
|
|
|
|
|
|
| Stockholders’
Equity |
|
|
|
|
|
|
|
Capital stock |
|
|
|
|
|
|
|
Preferred stock, $.01 par value; authorized 1,000,000 shares;
issued and outstanding September 2024, December 2023 and June 2024
-0- shares |
|
— |
|
|
— |
|
|
— |
|
|
Common stock, $.01 par value; authorized 20,000,000 shares; issued
and outstanding September 2024 – 11,680,968 shares; December 2023 –
11,804,430 shares; June 2024 – 11,582,606 shares |
|
117 |
|
|
118 |
|
|
116 |
|
|
Additional paid-in capital |
|
47,914 |
|
|
44,320 |
|
|
45,321 |
|
|
Retained earnings |
|
593,422 |
|
|
569,872 |
|
|
578,800 |
|
|
Accumulated other comprehensive gain (loss) |
|
(29,363 |
) |
|
(42,481 |
) |
|
(55,445 |
) |
|
Total Stockholders’ Equity |
|
612,090 |
|
|
571,829 |
|
|
568,792 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders’ Equity |
$ |
6,036,521 |
|
$ |
5,812,402 |
|
$ |
5,958,766 |
|
| |
|
Great Southern Bancorp, Inc. and
SubsidiariesConsolidated Statements of
Income(In thousands, except per share
data) |
| |
| |
|
Three Months Ended |
|
|
Nine Months Ended |
|
Three Months Ended |
| |
|
September 30, |
|
|
September 30, |
|
June 30, |
| |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
| Interest
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
$ |
76,425 |
|
|
$ |
68,878 |
|
|
$ |
221,796 |
|
|
$ |
201,758 |
|
|
$ |
74,295 |
|
|
Investment securities and other |
|
7,371 |
|
|
|
6,394 |
|
|
|
20,317 |
|
|
|
18,595 |
|
|
|
6,632 |
|
| |
|
83,796 |
|
|
|
75,272 |
|
|
|
242,113 |
|
|
|
220,353 |
|
|
|
80,927 |
|
| Interest
Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
28,486 |
|
|
|
25,233 |
|
|
|
83,906 |
|
|
|
61,668 |
|
|
|
27,783 |
|
|
Securities sold under reverse repurchase agreements |
|
385 |
|
|
|
308 |
|
|
|
1,112 |
|
|
|
871 |
|
|
|
394 |
|
|
Short-term borrowings, overnight FHLBank borrowings and other
interest-bearing liabilities |
|
5,388 |
|
|
|
1,433 |
|
|
|
12,805 |
|
|
|
5,156 |
|
|
|
4,373 |
|
|
Subordinated debentures issued to capital trust |
|
456 |
|
|
|
454 |
|
|
|
1,364 |
|
|
|
1,273 |
|
|
|
454 |
|
|
Subordinated notes |
|
1,106 |
|
|
|
1,106 |
|
|
|
3,317 |
|
|
|
3,317 |
|
|
|
1,105 |
|
| |
|
35,821 |
|
|
|
28,534 |
|
|
|
102,504 |
|
|
|
72,285 |
|
|
|
34,109 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Interest
Income |
|
47,975 |
|
|
|
46,738 |
|
|
|
139,609 |
|
|
|
148,068 |
|
|
|
46,818 |
|
| Provision for Credit
Losses on Loans |
|
1,200 |
|
|
|
— |
|
|
|
1,700 |
|
|
|
1,500 |
|
|
|
— |
|
| Provision (Credit) for
Unfunded Commitments |
|
(63 |
) |
|
|
(1,195 |
) |
|
|
(540 |
) |
|
|
(3,640 |
) |
|
|
(607 |
) |
| Net Interest Income
After Provision for Credit Losses and Provision (Credit) for
Unfunded Commitments |
|
46,838 |
|
|
|
47,933 |
|
|
|
138,449 |
|
|
|
150,208 |
|
|
|
47,425 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noninterest
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions |
|
360 |
|
|
|
232 |
|
|
|
1,010 |
|
|
|
887 |
|
|
|
269 |
|
|
Overdraft and Insufficient funds fees |
|
1,307 |
|
|
|
2,017 |
|
|
|
3,826 |
|
|
|
5,902 |
|
|
|
1,230 |
|
|
POS and ATM fee income and service charges |
|
3,467 |
|
|
|
3,724 |
|
|
|
10,238 |
|
|
|
11,204 |
|
|
|
3,588 |
|
|
Net gains on loan sales |
|
1,076 |
|
|
|
784 |
|
|
|
2,880 |
|
|
|
1,882 |
|
|
|
1,127 |
|
|
Late charges and fees on loans |
|
77 |
|
|
|
149 |
|
|
|
380 |
|
|
|
454 |
|
|
|
136 |
|
|
Gain (loss) on derivative interest rate products |
|
(37 |
) |
|
|
55 |
|
|
|
(57 |
) |
|
|
(234 |
) |
|
|
(7 |
) |
|
Other income |
|
742 |
|
|
|
891 |
|
|
|
5,354 |
|
|
|
3,415 |
|
|
|
3,490 |
|
| |
|
6,992 |
|
|
|
7,852 |
|
|
|
23,631 |
|
|
|
23,510 |
|
|
|
9,833 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noninterest
Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
19,548 |
|
|
|
19,673 |
|
|
|
59,090 |
|
|
|
58,554 |
|
|
|
19,886 |
|
|
Net occupancy and equipment expense |
|
8,138 |
|
|
|
7,729 |
|
|
|
23,818 |
|
|
|
22,858 |
|
|
|
7,841 |
|
|
Postage |
|
861 |
|
|
|
844 |
|
|
|
2,445 |
|
|
|
2,586 |
|
|
|
777 |
|
|
Insurance |
|
1,052 |
|
|
|
1,301 |
|
|
|
3,459 |
|
|
|
3,178 |
|
|
|
1,263 |
|
|
Advertising |
|
928 |
|
|
|
950 |
|
|
|
2,169 |
|
|
|
2,500 |
|
|
|
891 |
|
|
Office supplies and printing |
|
232 |
|
|
|
294 |
|
|
|
735 |
|
|
|
820 |
|
|
|
236 |
|
|
Telephone |
|
669 |
|
|
|
657 |
|
|
|
2,075 |
|
|
|
2,048 |
|
|
|
685 |
|
|
Legal, audit and other professional fees |
|
809 |
|
|
|
1,849 |
|
|
|
4,398 |
|
|
|
5,477 |
|
|
|
1,864 |
|
|
Expense on other real estate and repossessions |
|
(536 |
) |
|
|
62 |
|
|
|
(190 |
) |
|
|
263 |
|
|
|
285 |
|
|
Acquired intangible asset amortization |
|
108 |
|
|
|
59 |
|
|
|
325 |
|
|
|
228 |
|
|
|
109 |
|
|
Other operating expenses |
|
1,908 |
|
|
|
2,139 |
|
|
|
6,224 |
|
|
|
6,226 |
|
|
|
2,572 |
|
| |
|
33,717 |
|
|
|
35,557 |
|
|
|
104,548 |
|
|
|
104,738 |
|
|
|
36,409 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income Before Income
Taxes |
|
20,113 |
|
|
|
20,228 |
|
|
|
57,532 |
|
|
|
68,980 |
|
|
|
20,849 |
|
| Provision for Income
Taxes |
|
3,623 |
|
|
|
4,349 |
|
|
|
10,647 |
|
|
|
14,325 |
|
|
|
3,861 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net
Income |
$ |
16,490 |
|
|
$ |
15,879 |
|
|
$ |
46,885 |
|
|
$ |
54,655 |
|
|
$ |
16,988 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings Per Common
Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.41 |
|
|
$ |
1.33 |
|
|
$ |
4.01 |
|
|
$ |
4.53 |
|
|
$ |
1.46 |
|
|
Diluted |
$ |
1.41 |
|
|
$ |
1.33 |
|
|
$ |
3.99 |
|
|
$ |
4.52 |
|
|
$ |
1.45 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends Declared Per
Common Share |
$ |
0.40 |
|
|
$ |
0.40 |
|
|
$ |
1.20 |
|
|
$ |
1.20 |
|
|
$ |
0.40 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Balances, Interest Rates and
Yields
The following table presents, for the periods indicated, the
total dollar amounts of interest income from average
interest-earning assets and the resulting yields, as well as the
interest expense on average interest-bearing liabilities, expressed
both in dollars and rates, and the net interest margin. Average
balances of loans receivable include the average balances of
non-accrual loans for each period. Interest income on loans
includes interest received on non-accrual loans on a cash basis.
Interest income on loans includes the amortization of net loan
fees, which were deferred in accordance with accounting standards.
Net fees included in interest income were $1.1 million and $1.5
million for the three months ended September 30, 2024 and 2023,
respectively. Net fees included in interest income were $3.4
million and $4.4 million for the nine months ended September 30,
2024 and 2023, respectively. Tax-exempt income was not calculated
on a tax equivalent basis. The table does not reflect any effect of
income taxes.
| |
September30, 2024 |
|
|
|
Three Months EndedSeptember 30,
2024 |
|
|
|
Three Months EndedSeptember 30, 2023 |
|
|
|
Yield/ |
|
|
|
Average |
|
|
|
|
Yield/ |
|
|
|
Average |
|
|
|
|
Yield/ |
|
| |
Rate |
|
|
|
Balance |
|
|
Interest |
|
Rate |
|
|
|
Balance |
|
|
Interest |
|
Rate |
|
| |
(Dollars in thousands) |
|
| Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loans receivable: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One- to four-family residential |
4.07 |
% |
|
$ |
859,737 |
|
$ |
8,781 |
|
4.06 |
% |
|
$ |
903,147 |
|
$ |
8,594 |
|
3.78 |
% |
|
Other residential |
7.32 |
|
|
|
1,291,490 |
|
|
24,208 |
|
7.46 |
|
|
|
829,520 |
|
|
14,702 |
|
7.03 |
|
|
Commercial real estate |
6.20 |
|
|
|
1,515,949 |
|
|
24,115 |
|
6.33 |
|
|
|
1,466,739 |
|
|
21,730 |
|
5.88 |
|
|
Construction |
7.33 |
|
|
|
644,620 |
|
|
12,633 |
|
7.80 |
|
|
|
911,731 |
|
|
16,691 |
|
7.26 |
|
|
Commercial business |
6.36 |
|
|
|
230,956 |
|
|
3,827 |
|
6.59 |
|
|
|
313,909 |
|
|
4,812 |
|
6.08 |
|
|
Other loans |
6.23 |
|
|
|
169,172 |
|
|
2,648 |
|
6.23 |
|
|
|
178,030 |
|
|
2,128 |
|
4.74 |
|
|
Industrial revenue bonds |
6.13 |
|
|
|
11,663 |
|
|
213 |
|
7.26 |
|
|
|
12,322 |
|
|
221 |
|
7.11 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans receivable |
6.30 |
|
|
|
4,723,587 |
|
|
76,425 |
|
6.44 |
|
|
|
4,615,398 |
|
|
68,878 |
|
5.92 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities |
3.06 |
|
|
|
758,793 |
|
|
6,092 |
|
3.19 |
|
|
|
678,564 |
|
|
5,018 |
|
2.93 |
|
|
Other interest-earning assets |
4.85 |
|
|
|
96,641 |
|
|
1,279 |
|
5.27 |
|
|
|
104,546 |
|
|
1,376 |
|
5.22 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning assets |
5.85 |
|
|
|
5,579,021 |
|
|
83,796 |
|
5.98 |
|
|
|
5,398,508 |
|
|
75,272 |
|
5.53 |
|
|
Non-interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
104,409 |
|
|
|
|
|
|
|
|
91,860 |
|
|
|
|
|
|
|
Other non-earning assets |
|
|
|
|
269,972 |
|
|
|
|
|
|
|
|
213,411 |
|
|
|
|
|
|
|
Total assets |
|
|
|
$ |
5,953,402 |
|
|
|
|
|
|
|
$ |
5,703,779 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand and savings |
1.62 |
|
|
$ |
2,210,988 |
|
|
10,030 |
|
1.80 |
|
|
$ |
2,195,848 |
|
|
8,064 |
|
1.46 |
|
|
Time deposits |
3.77 |
|
|
|
856,418 |
|
|
8,664 |
|
4.02 |
|
|
|
996,220 |
|
|
8,450 |
|
3.37 |
|
|
Brokered deposits |
4.91 |
|
|
|
745,373 |
|
|
9,792 |
|
5.23 |
|
|
|
669,829 |
|
|
8,719 |
|
5.16 |
|
|
Total deposits |
2.76 |
|
|
|
3,812,779 |
|
|
28,486 |
|
2.97 |
|
|
|
3,861,897 |
|
|
25,233 |
|
2.59 |
|
|
Securities sold under reverse repurchase agreements |
1.79 |
|
|
|
76,572 |
|
|
385 |
|
2.00 |
|
|
|
56,152 |
|
|
308 |
|
2.18 |
|
|
Short-term borrowings, overnight FHLBank borrowings and other
interest-bearing liabilities |
4.99 |
|
|
|
408,739 |
|
|
5,388 |
|
5.24 |
|
|
|
103,828 |
|
|
1,433 |
|
5.47 |
|
|
Subordinated debentures issued to capital trust |
7.11 |
|
|
|
25,774 |
|
|
456 |
|
7.04 |
|
|
|
25,774 |
|
|
454 |
|
7.00 |
|
|
Subordinated notes |
5.91 |
|
|
|
74,770 |
|
|
1,106 |
|
5.88 |
|
|
|
74,462 |
|
|
1,106 |
|
5.89 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing liabilities |
3.04 |
|
|
|
4,398,634 |
|
|
35,821 |
|
3.24 |
|
|
|
4,122,113 |
|
|
28,534 |
|
2.74 |
|
|
Non-interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
|
|
|
862,170 |
|
|
|
|
|
|
|
|
938,076 |
|
|
|
|
|
|
|
Other liabilities |
|
|
|
|
98,590 |
|
|
|
|
|
|
|
|
89,970 |
|
|
|
|
|
|
|
Total liabilities |
|
|
|
|
5,359,394 |
|
|
|
|
|
|
|
|
5,150,159 |
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
594,008 |
|
|
|
|
|
|
|
|
553,620 |
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
|
|
$ |
5,953,402 |
|
|
|
|
|
|
|
$ |
5,703,779 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income: |
|
|
|
|
|
|
$ |
47,975 |
|
|
|
|
|
|
|
$ |
46,738 |
|
|
|
|
Interest rate spread |
2.81 |
% |
|
|
|
|
|
|
|
2.74 |
% |
|
|
|
|
|
|
|
2.79 |
% |
|
Net interest margin* |
|
|
|
|
|
|
|
|
|
3.42 |
% |
|
|
|
|
|
|
|
3.43 |
% |
|
Average interest-earning assets to average interest-bearing
liabilities |
|
|
|
|
126.8 |
% |
|
|
|
|
|
|
|
131.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Defined as the Company’s net interest income divided by average
total interest-earning assets.
| |
September30, 2024 |
|
|
|
Nine Months EndedSeptember 30,
2024 |
|
|
Nine Months EndedSeptember 30, 2023 |
|
|
|
Yield/ |
|
|
|
Average |
|
|
|
|
Yield/ |
|
|
|
Average |
|
|
|
|
Yield/ |
|
| |
Rate |
|
|
|
Balance |
|
|
Interest |
|
Rate |
|
|
|
Balance |
|
|
Interest |
|
Rate |
|
| |
(Dollars in thousands) |
|
| Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loans receivable: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One- to four-family residential |
4.07 |
% |
|
$ |
875,829 |
|
$ |
26,247 |
|
4.00 |
% |
|
$ |
907,990 |
|
$ |
25,124 |
|
3.70 |
% |
|
Other residential |
7.32 |
|
|
|
1,108,548 |
|
|
60,699 |
|
7.31 |
|
|
|
824,453 |
|
|
41,767 |
|
6.77 |
|
|
Commercial real estate |
6.20 |
|
|
|
1,505,200 |
|
|
70,179 |
|
6.23 |
|
|
|
1,495,186 |
|
|
65,508 |
|
5.86 |
|
|
Construction |
7.33 |
|
|
|
767,772 |
|
|
44,001 |
|
7.66 |
|
|
|
899,026 |
|
|
48,544 |
|
7.22 |
|
|
Commercial business |
6.36 |
|
|
|
253,086 |
|
|
12,382 |
|
6.54 |
|
|
|
296,605 |
|
|
13,153 |
|
5.93 |
|
|
Other loans |
6.23 |
|
|
|
171,085 |
|
|
7,646 |
|
5.97 |
|
|
|
183,679 |
|
|
7,001 |
|
5.10 |
|
|
Industrial revenue bonds |
6.13 |
|
|
|
11,792 |
|
|
642 |
|
7.27 |
|
|
|
12,493 |
|
|
661 |
|
7.08 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans receivable |
6.30 |
|
|
|
4,693,312 |
|
|
221,796 |
|
6.31 |
|
|
|
4,619,432 |
|
|
201,758 |
|
5.84 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Investment securities |
3.06 |
|
|
|
708,422 |
|
|
16,450 |
|
3.10 |
|
|
|
694,727 |
|
|
15,005 |
|
2.89 |
|
| Other interest-earning
assets |
4.85 |
|
|
|
98,156 |
|
|
3,867 |
|
5.26 |
|
|
|
97,829 |
|
|
3,590 |
|
4.91 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning assets |
5.85 |
|
|
|
5,499,890 |
|
|
242,113 |
|
5.88 |
|
|
|
5,411,988 |
|
|
220,353 |
|
5.44 |
|
| Non-interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
96,546 |
|
|
|
|
|
|
|
|
91,515 |
|
|
|
|
|
|
|
Other non-earning assets |
|
|
|
|
252,076 |
|
|
|
|
|
|
|
|
205,415 |
|
|
|
|
|
|
|
Total assets |
|
|
|
$ |
5,848,512 |
|
|
|
|
|
|
|
$ |
5,708,918 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand and savings |
1.62 |
|
|
$ |
2,223,153 |
|
|
29,306 |
|
1.76 |
|
|
$ |
2,191,827 |
|
|
19,281 |
|
1.18 |
|
|
Time deposits |
3.77 |
|
|
|
896,059 |
|
|
26,902 |
|
4.01 |
|
|
|
999,856 |
|
|
20,658 |
|
2.76 |
|
|
Brokered deposits |
4.91 |
|
|
|
705,988 |
|
|
27,698 |
|
5.24 |
|
|
|
588,862 |
|
|
21,729 |
|
4.93 |
|
|
Total deposits |
2.76 |
|
|
|
3,825,200 |
|
|
83,906 |
|
2.93 |
|
|
|
3,780,545 |
|
|
61,668 |
|
2.18 |
|
| Securities sold under reverse
repurchase agreements |
1.79 |
|
|
|
76,005 |
|
|
1,112 |
|
1.95 |
|
|
|
85,811 |
|
|
871 |
|
1.36 |
|
| Short-term borrowings,
overnight FHLBank borrowings and other interest-bearing
liabilities |
4.99 |
|
|
|
330,155 |
|
|
12,805 |
|
5.18 |
|
|
|
134,595 |
|
|
5,156 |
|
5.12 |
|
| Subordinated debentures
issued to capital trust |
7.11 |
|
|
|
25,774 |
|
|
1,364 |
|
7.07 |
|
|
|
25,774 |
|
|
1,273 |
|
6.61 |
|
| Subordinated notes |
5.91 |
|
|
|
74,696 |
|
|
3,317 |
|
5.93 |
|
|
|
74,392 |
|
|
3,317 |
|
5.96 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing liabilities |
3.04 |
|
|
|
4,331,830 |
|
|
102,504 |
|
3.16 |
|
|
|
4,101,117 |
|
|
72,285 |
|
2.36 |
|
| Non-interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
|
|
|
856,877 |
|
|
|
|
|
|
|
|
965,403 |
|
|
|
|
|
|
|
Other liabilities |
|
|
|
|
82,516 |
|
|
|
|
|
|
|
|
88,309 |
|
|
|
|
|
|
|
Total liabilities |
|
|
|
|
5,271,223 |
|
|
|
|
|
|
|
|
5,154,829 |
|
|
|
|
|
|
| Stockholders’ equity |
|
|
|
|
577,289 |
|
|
|
|
|
|
|
|
554,089 |
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
|
|
$ |
5,848,512 |
|
|
|
|
|
|
|
$ |
5,708,918 |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net interest income: |
|
|
|
|
|
|
$ |
139,609 |
|
|
|
|
|
|
|
$ |
148,068 |
|
|
|
| Interest rate spread |
2.81 |
% |
|
|
|
|
|
|
|
2.72 |
% |
|
|
|
|
|
|
|
3.09 |
% |
| Net interest margin* |
|
|
|
|
|
|
|
|
|
3.39 |
% |
|
|
|
|
|
|
|
3.66 |
% |
| Average interest-earning
assets to average interest-bearing liabilities |
|
|
|
|
127.0 |
% |
|
|
|
|
|
|
|
132.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Defined as the Company’s net interest income divided by average
total interest-earning assets.
NON-GAAP FINANCIAL MEASURES
This document contains certain financial information determined
by methods other than in accordance with accounting principles
generally accepted in the United States (“GAAP”). This non-GAAP
financial information includes the tangible common equity to
tangible assets ratio.
In calculating the ratio of tangible common equity to tangible
assets, we subtract period-end intangible assets from common equity
and from total assets. Management believes that the presentation of
this measure excluding the impact of intangible assets provides
useful supplemental information that is helpful in understanding
our financial condition and results of operations, as it provides a
method to assess management’s success in utilizing our tangible
capital as well as our capital strength. Management also believes
that providing a measure that excludes balances of intangible
assets, which are subjective components of valuation, facilitates
the comparison of our performance with the performance of our
peers. In addition, management believes that this is a standard
financial measure used in the banking industry to evaluate
performance.
This non-GAAP financial measurement is supplemental and is not a
substitute for any analysis based on GAAP financial measures.
Because not all companies use the same calculation of non-GAAP
measures, this presentation may not be comparable to other
similarly titled measures as calculated by other companies.
Non-GAAP Reconciliation: Ratio of Tangible Common Equity
to Tangible Assets
|
|
|
|
September 30, |
|
|
|
December 31, |
|
| |
|
|
2024 |
|
|
|
2023 |
|
| |
|
|
(Dollars in thousands) |
|
| |
|
|
|
|
| |
Common equity at period
end |
$ |
612,090 |
|
|
$ |
571,829 |
|
| |
Less: Intangible assets at
period end |
|
10,202 |
|
|
|
10,527 |
|
| |
Tangible common equity at
period end (a) |
$ |
601,888 |
|
|
$ |
561,302 |
|
| |
|
|
|
|
|
|
|
|
| |
Total assets at period
end |
$ |
6,036,521 |
|
|
$ |
5,812,402 |
|
| |
Less: Intangible assets at
period end |
|
10,202 |
|
|
|
10,527 |
|
| |
Tangible assets at period end
(b) |
$ |
6,026,319 |
|
|
$ |
5,801,875 |
|
| |
|
|
|
|
|
|
|
|
| |
Tangible common equity to
tangible assets (a) / (b) |
|
9.99 |
% |
|
|
9.67 |
% |
CONTACT:
Kelly Polonus, Great Southern Bank, (417)
895-5242kpolonus@greatsouthernbank.com
Zack Mukewa, Investor Relations,(616)
233-0500GSBC@lambert.com
Great Southern Bancorp (NASDAQ:GSBC)
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