• Net Income (Q4 2024): $14.9 million or $1.27 per diluted common share.
• Net Interest Margin (Q4 2024): 3.49%, up from 3.3% in Q4 2023.
• Annualized Return on Average Assets (Q4 2024): 1%.
• Annualized Return on Average Common Equity (Q4 2024): 9.76%.
• Net Interest Income (Q4 2024): $49.5 million, a 9.7% increase from Q4 2023.
• Total Deposits (End of 2024): $4.61 billion, down $91.9 million from the previous quarter.
• Gross Loans Growth (2024): Increased by $100.5 million.
• Nonperforming Assets (End of 2024): 0.16% of total assets.
• Allowance for Credit Losses (End of 2024): 1.36% of total loans.
• Stockholders' Equity Increase (2024): $27.7 million.
• Effective Tax Rate (2024): 18.1%.

• Warning! GuruFocus has detected 7 Warning Sign with GSBC.

Release Date: January 22, 2025

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 interest margin improvement to 3.49% in Q4 2024, up from 3.3% in the same quarter last year.
• The company achieved a significant increase in net interest income for Q4 2024, reaching $49.5 million, a 9.7% increase compared to the same quarter in 2023.
• Asset quality remained strong with nonperforming assets at 0.16% of total assets, and nonperforming loans to period-end loans fell to 0.07%.
• The company strengthened its capital position by increasing stockholders' equity by $27.7 million and strategically repurchasing stock.
• Loan portfolio growth was driven by a $100.5 million increase in gross loans, with multifamily residential loans showing robust growth.

Negative Points

• Net income for Q4 2024 was $14.9 million, reflecting a decline from the previous year due to rising funding costs and competition for deposits.
• The company's financial results were negatively impacted by a nonrecurring, noninterest expense item, reducing annualized return on average common equity by 103 basis points.
• Total deposits decreased by $91.9 million from the previous quarter, driven by reductions across multiple deposit categories.
• The allowance for credit losses as a percentage of total loans remained at 1.36%, indicating ongoing credit risk concerns.
• The company anticipates losing the benefit of a terminated interest rate swap after Q3 2025, which will impact future interest income.

Q & A Highlights

Q: Can you provide more insight into the net interest margin outlook given recent rate cuts? A: Rex Copeland, CFO, explained that while there might be some benefit from CD maturities and repricing of fixed-rate loans, the overall net interest margin is not expected to move significantly from the fourth quarter level. The deposit and funding mix will play a crucial role in any changes.

Q: What is the current competitive landscape for deposits, and how is it affecting your funding costs? A: Rex Copeland noted that the deposit market remains competitive, with some banks keeping rates higher. Great Southern has been able to reduce some rates prudently and expects to continue doing so with further rate cuts from the Federal Reserve.

Q: Could you discuss the loan growth outlook and the funding of unfunded commitments? A: Joseph Turner, CEO, mentioned that unfunded commitments typically fund between $50 million and $70 million monthly. While there is a strong pipeline, the loan portfolio may not grow significantly in 2025 due to repayments.

Q: What are the expectations for non-interest expenses in the upcoming quarters? A: Rex Copeland indicated that excluding the $2 million non-recurring expense, the fourth quarter's expenses are a reasonable baseline. Seasonal payroll taxes and merit increases will impact the first quarter.

Q: Can you provide details on the office property in Missouri that moved to other real estate owned (OREO)? A: Joseph Turner explained that the property is an office building in Clayton, St. Louis. Although the office market is generally weak, Clayton is a strong area. The property is generating cash flow, and the bank is not in a hurry to sell it.

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