• Net Income: $16.5 million for the third quarter of 2024.
• Earnings Per Share (EPS): $1.41 per diluted common share.
• Return on Average Assets (ROA): 1.11% annualized for the quarter.
• Return on Average Equity (ROE): 11.1% annualized for the quarter.
• Net Interest Income: $48 million, up $1.2 million or 2.6% from the same period last year.
• Net Interest Margin: 3.42%, stable compared to 3.43% in the third quarter of 2023.
• Loan Growth: Increased by $121.7 million year-to-date, with $70 million growth in the quarter.
• Nonperforming Assets: Decreased by $12.7 million to $7.7 million, or 0.13% of total assets.
• Net Charge-offs: $1.5 million for the quarter.
• Provision for Credit Losses: $1.2 million recorded in the quarter.
• Stockholders' Equity: Increased by $40.3 million since December 31, 2023.
• Tangible Common Equity Ratio: 10%, up from 9.7% at the end of 2023.
• Book Value Per Share: Over $52, up from about $49 in the previous quarter.
• Deposits: Total deposits at $4.7 billion at the end of September 2024.
• Non-interest Income: $7.0 million, down $860,000 from the same period in 2023.
• Non-interest Expense: $33.7 million, down $1.8 million compared to the prior-year quarter.
• Efficiency Ratio: Improved to 61.34% from 65.3% in Q3 2023.
• Effective Tax Rate: 18.0% for the quarter.

• Warning! GuruFocus has detected 4 Warning Sign with GSBC.

Release Date: October 17, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Great Southern Bancorp Inc (NASDAQ:GSBC) reported a net income of $16.5 million for the third quarter of 2024, with earnings per diluted common share increasing to $1.41 from $1.33 in the same quarter last year.
• The company surpassed the $6 billion asset mark, demonstrating strong balance sheet growth.
• Net interest income increased by 2.6% to $48 million compared to the year-ago quarter, driven by higher loan yields.
• Nonperforming assets decreased significantly by $12.7 million, improving credit quality metrics.
• The tangible common equity ratio improved to 10.0%, reflecting a strong capital position and disciplined capital management.

Negative Points

• Net interest margin remained stable but slightly decreased to 3.42% from 3.43% in the previous year, indicating pressure from elevated deposit costs.
• Non-interest income declined by $860,000 compared to the same period in 2023, primarily due to reduced overdraft and insufficient fund fees.
• Year-to-date net interest income decreased to $139.6 million from $148.1 million in the same period in 2023, reflecting margin compression.
• Deposit costs increased, with interest-bearing demand deposit costs rising by 34 basis points compared to the third quarter of 2023.
• Loan growth was moderate, with some declines in construction and commercial business loans due to ongoing economic uncertainties.

Q & A Highlights

Q: Can you provide insights on the net interest margin and potential for expansion in the fourth quarter? A: Rex Copeland, CFO, explained that the company has worked to moderate its asset-sensitive position to a more neutral stance. They have matched variable rate loans with interest rate swaps and floating rate broker deposits. While they don't expect liabilities to reprice faster than assets, they anticipate maintaining a neutral position in the near term.

Q: What is the outlook for expenses moving forward? A: Rex Copeland noted that expenses were lower than expected in Q3, partly due to the absence of costs related to a proposed system conversion. While some other favorable factors contributed to the lower expenses, they anticipate expenses to be slightly higher in future quarters.

Q: How do you view the current reserve levels given the recent cleanup of non-performing assets? A: Joseph Turner, CEO, stated that the current reserve ratios are satisfactory and do not anticipate significant reductions in reserves. Rex Copeland added that reserve levels will also depend on loan growth, as reserves must be maintained for new loans.

Q: What are your expectations for loan growth for the remainder of the year? A: Joseph Turner mentioned that while they do not provide specific guidance on loan growth, the growth observed in the first nine months of the year could be indicative of what to expect for the remainder of the year, acknowledging that some factors are beyond their control.

Q: Can you discuss the company's approach to share buybacks and capital management? A: Joseph Turner explained that the limited share buybacks in the quarter were due to higher share prices. However, with an improved book value, there may be more opportunities for buybacks. Rex Copeland added that they are also focused on building capital for potential uses, such as paying off subordinated debt.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.