Great Southern Bancorp, Inc. Reports Preliminary Third Quarter Earnings of $1.33 Per Diluted Common Share
- The Company's liquidity and capital positions remain strong
- Total outstanding loans increased by $57.7 million
- Net interest margin for Q3 2023 was 3.43%, compared to 3.96% in Q3 2022
- Annualized return on average common equity was 11.47% for Q3 2023
- Annualized return on average assets was 1.11% for Q3 2023
- Net interest income for Q3 2023 decreased $6.2 million compared to Q3 2022
- Non-performing assets increased by $7.2 million
- Net interest income was negatively affected by interest rate swaps
Preliminary Financial Results and Other Matters for the Quarter and Nine Months Ended September 30, 2023:
- Significant Expense Item: During the three months ended September 30, 2023, the Company recorded expenses in Legal and Professional Fees totaling
$904,000 related to training and implementation costs for its upcoming core systems conversion and professional fees to consultants engaged to support the Company in its transition of core and ancillary software and information technology systems. - Liquidity: The Company had secured borrowing line availability at the FHLBank and Federal Reserve Bank of
$1.1 billion and$440 million , respectively, at September 30, 2023. In addition, at September 30, 2023, the Company had unpledged securities with a market value totaling$555 million , which could be pledged as collateral for additional borrowing capacity at either the FHLBank or Federal Reserve Bank, if needed or desired. At September 30, 2023, the Company estimated that its uninsured deposits, excluding deposit accounts of the Company’s consolidated subsidiaries, were approximately$774 million (16% of total deposits). The Company believes it has ample sources of liquidity. - Capital: The Company’s capital position remained strong as of September 30, 2023, significantly exceeding the thresholds established by regulators. On a preliminary basis, as of September 30, 2023, the Company’s Tier 1 Leverage Ratio was
11.0% , Common Equity Tier 1 Capital Ratio was11.5% , Tier 1 Capital Ratio was12.0% , and Total Capital Ratio was14.7% . Total stockholders’ equity decreased$1.4 million in the nine months ended September 30, 2023 and the Company’s tangible common equity ratio was9.1% at September 30, 2023. See “Capital” section for additional information regarding the decrease in total stockholders’ equity. - Net Interest Income: Net interest income for the third quarter of 2023 decreased
$6.2 million (or approximately11.6% ) to$46.7 million compared to$52.9 million for the third quarter of 2022. Net interest margin was3.43% for the quarter ended September 30, 2023, compared to3.96% for the quarter ended September 30, 2022. Net interest income and net interest margin in the second quarter of 2023 were$48.1 million and3.56% , respectively. Competition for deposits and higher market interest rates, along with a shift in the funding mix, resulted in increased funding costs in the third quarter of 2023. - Total Loans: Total outstanding loans, excluding mortgage loans held for sale, increased
$57.7 million , or1.3% , from$4.51 billion at December 31, 2022 to$4.56 billion at September 30, 2023. This increase was primarily in other residential (multi-family) loans and commercial business loans, with a decrease in commercial real estate 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
$11.2 million at September 30, 2023, an increase of$5.9 million from$5.3 million at December 31, 2022. At September 30, 2023, non-performing assets were$10.9 million (0.19% of total assets), an increase of$7.2 million from$3.7 million (0.07% of total assets) at December 31, 2022. The increase in non-performing assets was mainly in the commercial real estate loan category. A single loan relationship collateralized by an office building in Missouri, which totaled$8.6 million , was added to non-performing loans during the second quarter of 2023. The Company experienced net charge offs of$227,000 in the nine months ended September 30, 2023.
SPRINGFIELD, Mo., Oct. 18, 2023 (GLOBE NEWSWIRE) -- 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, 2023, were
Preliminary earnings for the nine months ended September 30, 2023, were
For the quarter ended September 30, 2023, annualized return on average common equity was
Great Southern President and CEO Joseph W. Turner said, “Our third quarter performance was solid, but down a bit, as we continued to navigate through a challenging operating environment. Thanks to the hard work of the Great Southern team, we earned
“Like many banks, we experienced much higher deposit costs during the second quarter of 2023, reflective of increasing market interest rates and significant competition for deposits. Deposit costs again moved higher in the third quarter of 2023, but the pace of increases moderated compared to the second quarter. Higher deposit costs drove a decrease in net interest income – approximately
Turner added, “The Company’s liquidity and capital positions continue to be strong. Our borrowing capacity at the Federal Home Loan Bank remained above
“As expected, total outstanding loan balances modestly grew by
Selected Financial Data:
| (In thousands, except per share data) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||
| Net interest income | $ | 46,738 | $ | 52,898 | $ | 148,068 | $ | 144,994 | ||||||
| Provision (credit) for credit losses on loans and unfunded commitments | (1,195 | ) | 3,315 | (2,140 | ) | 5,345 | ||||||||
| Non-interest income | 7,852 | 7,984 | 23,510 | 26,480 | ||||||||||
| Non-interest expense | 35,557 | 34,758 | 104,738 | 99,030 | ||||||||||
| Provision for income taxes | 4,349 | 4,676 | 14,325 | 13,755 | ||||||||||
| Net income and net income available to common shareholders | $ | 15,879 | $ | 18,133 | $ | 54,655 | $ | 53,344 | ||||||
| Earnings per diluted common share | $ | 1.33 | $ | 1.46 | $ | 4.52 | $ | 4.20 | ||||||
NET INTEREST INCOME
Net interest income for the third quarter of 2023 decreased
Compared to the second quarter of 2023, interest expense increased
Net interest income for the nine months ended September 30, 2023 increased
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
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 is
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
The Company’s net interest income was negatively impacted in the third quarter of 2023 by the high level of competition for deposits due to asset growth across the industry and the liquidity events at a few banks in March 2023. The Company also had a substantial amount of time deposits maturing at relatively low rates in the second quarter of 2023, and these time deposits either renewed at higher rates or left the Company, in turn requiring their replacement with other funding sources at then-current higher market rates. In addition, in the first quarter of 2023 the Company experienced a higher-than-normal reduction in balances of non-interest-bearing deposits. The outflow of non-interest-bearing deposits moderated in the second and third quarter of 2023. Customer balances in both non-interest-bearing checking and interest-bearing checking accounts have fluctuated in the first nine months of 2023. As market interest rates for certain checking account types and time deposit accounts have increased, some customers have chosen to reallocate funds into higher-rate accounts. The Company has significantly more low-rate time deposits maturing in the fourth quarter of 2023 compared to those that matured in the third quarter of 2023. However, the difference in the rate being paid on those time deposits currently versus the expected rate that will be paid upon renewal of those maturing time deposits is not as great as it was in previous periods in 2023. Subsequent to September 30, 2023, time deposit maturities over the next 12 months are as follows: within three months --
If market interest rates remain near their current levels, the Company’s interest rate swaps will continue to have a negative impact on net interest income. Based on the interest rates on these swaps at September 30, 2023, the negative impact of all the interest rate swaps combined in the fourth quarter of 2023 is expected to be approximately
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, 2023, non-interest income decreased
For the nine months ended September 30, 2023, non-interest income decreased
- Other income: Other income decreased
$845,000 compared to the prior year period. In the 2022 period, a gain of$1.1 million was recognized on sales of fixed assets, with no similar transactions occurring in the current year period. - Point-of-sale and ATM fees: Point-of-sale and ATM fees decreased
$738,000 compared to the prior year period. This decrease was 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. - Gain (loss) on derivative interest rate products: In the 2023 period, the Company recognized a loss of
$234,000 on the change in fair value of its back-to-back interest rate swaps related to commercial loans and the change in fair value on interest rate swaps related to brokered time deposits. In the 2022 period, the Company recognized a gain of$385,000 on the change in fair value of its back-to-back interest rate swaps related to commercial loans.
NON-INTEREST EXPENSE
For the quarter ended September 30, 2023, non-interest expense increased
- Salaries and employee benefits: Salaries and employee benefits increased
$697,000 from the prior year quarter. A portion of this increase related to normal annual merit increases in various lending and operations areas. In 2023, some of these increases were larger than in previous years due to the current employment environment. In addition, compensation costs related to originated loans that are deferred under accounting rules decreased by$233,000 in the 2023 period compared to the 2022 period (resulting in higher expense in the 2023 period), as the volume of loans originated in the third quarter of 2023 decreased substantially compared to the third quarter of 2022. - Net occupancy expenses: Net occupancy expenses increased
$531,000 from the prior year period. Various components of computer license and support expenses increased by$333,000 in the 2023 period compared to the 2022 period. In addition, various repairs and maintenance expenses increased by$106,000 in the 2023 period compared to the 2022 period. - Insurance: Insurance expense increased
$498,000 from the prior year quarter. The increase was primarily due to previously announced increases in deposit insurance rates for the FDIC’s Deposit Insurance Fund. - Legal, Audit and Other Professional Fees: Legal, audit and other professional fees decreased
$390,000 from the prior year quarter, to$1.8 million . In the 2022 period, the Company expensed$372,000 in fees related to the interest rate swaps initiated in July 2022, which was not repeated in the 2023 period.
For the nine months ended September 30, 2023, non-interest expense increased
- Salaries and employee benefits: Salaries and employee benefits increased
$2.1 million from the prior year period. A portion of this increase related to normal annual merit increases in various lending and operations areas. In 2023, some of these increases were larger than in previous years due to the current employment environment. In addition, compensation costs related to originated loans that are deferred under accounting rules decreased by$1.2 million in the 2023 period compared to the 2022 period (resulting in higher expense in the 2023 period), as the volume of loans originated in the first nine months of 2023 decreased substantially compared to the same period in 2022. - Net occupancy expenses: Net occupancy expenses increased
$2.0 million from the prior year period. Various components of computer license and support expenses increased by$986,000 in the 2023 period compared to the 2022 period. In addition, various repairs and maintenance expenses increased by$224,000 in the 2023 period compared to the 2022 period. - Legal, Audit and Other Professional Fees: Legal, audit and other professional fees increased
$1.2 million from the prior year period, to$5.5 million . In the 2023 period, the Company expensed a total of$3.1 million , compared to$1.7 expensed in the 2022 period, primarily related to training and implementation costs for the upcoming core systems conversion and professional fees to consultants engaged to support the Company’s transition of core and ancillary software and information technology systems. - Insurance: Insurance expense increased
$795,000 from the prior year period. The increase was primarily due to previously announced increases in deposit insurance rates for the FDIC’s Deposit Insurance Fund.
The Company’s efficiency ratio for the quarter ended September 30, 2023, was
INCOME TAXES
For the three months ended September 30, 2023 and 2022, the Company's effective tax rate was
CAPITAL
As of September 30, 2023, total stockholders’ equity and common stockholders’ equity were each
In addition, included in stockholders’ equity at September 30, 2023, were realized gains (net of taxes) on the Company’s terminated cash flow hedge (interest rate swap), totaling
Also included in stockholders’ equity at September 30, 2023, was an unrealized loss (net of taxes) on the Company’s three outstanding cash flow hedges (interest rate swaps) totaling
As noted above, total stockholders' equity decreased
The Company also had unrealized losses on its portfolio of held-to-maturity investment securities, which totaled
On a preliminary basis, as of September 30, 2023, the Company’s Tier 1 Leverage Ratio was
On September 30, 2023, and on a preliminary basis, the Bank’s Tier 1 Leverage Ratio was
In December 2022, the Company’s Board of Directors authorized the purchase of one million shares of the Company’s common stock. As of September 30, 2023, a total of approximately 801,000 shares were available in our stock repurchase authorization.
During the three months ended September 30, 2023, the Company repurchased 106,801 shares of its common stock at an average price of
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 management of the 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 particular sources of funds based 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, 2023, the Company had the following available secured lines and on-balance sheet liquidity:
| September 30, 2023 | ||
| Federal Home Loan Bank line | $ | 1,053.1 million |
| Federal Reserve Bank line | $ | 439.8 million |
| Cash and cash equivalents | $ | 182.3 million |
| Unpledged securities – Available-for-sale | $ | 361.6 million |
| Unpledged securities – Held-to-maturity | $ | 193.4 million |
During the three months ended September 30, 2023, the Company’s total deposits increased
During the nine months ended September 30, 2023, the Company’s total deposits increased
LOANS
Total net loans, excluding mortgage loans held for sale, increased
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):
| September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | December 31, 2021 | December 31, 2020 | |||||||
| Closed non-construction loans with unused available lines | ||||||||||||
| Secured by real estate (one- to four-family) | $ | 205,935 | $ | 207,597 | $ | 205,517 | $ | 199,182 | $ | 175,682 | $ | 164,480 |
| Secured by real estate (not one- to four-family) | — | — | — | — | 23,752 | 22,273 | ||||||
| Not secured by real estate - commercial business | 103,434 | 109,135 | 113,186 | 104,452 | 91,786 | 77,411 | ||||||
| Closed construction loans with unused available lines | ||||||||||||
| Secured by real estate (one-to four-family) | 104,666 | 111,491 | 104,045 | 100,669 | 74,501 | 42,162 | ||||||
| Secured by real estate (not one-to four-family) | 921,632 | 1,123,860 | 1,333,596 | 1,444,450 | 1,092,029 | 823,106 | ||||||
| Loan commitments | ||||||||||||
| Secured by real estate (one-to four-family) | 22,123 | 25,571 | 33,221 | 16,819 | 53,529 | 85,917 | ||||||
| Secured by real estate (not one-to four-family) | 56,159 | 50,071 | 78,384 | 157,645 | 146,826 | 45,860 | ||||||
| Not secured by real estate - commercial business | 16,971 | 21,835 | 37,477 | 50,145 | 12,920 | 699 | ||||||
| $ | 1,430,920 | $ | 1,649,560 | $ | 1,905,426 | $ | 2,073,362 | $ | 1,671,025 | $ | 1,261,908 |
PROVISION FOR CREDIT LOSSES AND ALLOWANCE FOR CREDIT LOSSES
The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, effective January 1, 2021. The CECL methodology replaced the incurred loss methodology with a lifetime “expected credit loss” measurement objective for loans, held-to-maturity debt securities and other receivables measured at amortized cost at the time the financial asset is originated or acquired. This standard requires the consideration of historical loss experience and current conditions adjusted for reasonable and supportable economic forecasts.
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 differences 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, housing price index, 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, 2023, the Company did not record a provision expense on its portfolio of outstanding loans, compared to a
The Bank’s allowance for credit losses as a percentage of total loans was
ASSET QUALITY
At September 30, 2023, non-performing assets were
Compared to December 31, 2022, non-performing loans increased
Activity in the non-performing loans categories during the quarter ended September 30, 2023, was as follows:
| Beginning Balance, July 1 | Additions to Non- Performing | Removed from Non- Performing | Transfers to Potential Problem Loans | Transfers to Foreclosed Assets and Repossessions | Charge- Offs | Payments | Ending Balance, September 30 | ||||||||||||
| (In thousands) | |||||||||||||||||||
| One- to four-family construction | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||
| Subdivision construction | — | — | — | — | — | — | — | — | |||||||||||
| Land development | 384 | — | — | — | — | — | — | 384 | |||||||||||
| Commercial construction | — | — | — | — | — | — | — | — | |||||||||||
| One- to four-family residential | 359 | — | — | — | — | — | (118 | ) | 241 | ||||||||||
| Other residential | — | — | — | — | — | — | — | — | |||||||||||
| Commercial real estate | 10,192 | 30 | — | — | — | — | (90 | ) | 10,132 | ||||||||||
| Commercial business | 16 | — | — | — | — | — | (16 | ) | — | ||||||||||
| Consumer | 198 | 9 | — | — | — | (87 | ) | (46 | ) | 74 | |||||||||
| Total non-performing loans | $ | 11,149 | $ | 39 | $ | — | $ | — | $ | — | $ | (87 | ) | $ | (270 | ) | $ | 10,831 | |
| FDIC-assisted acquired loans included above | $ | 101 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (10 | ) | $ | 91 | ||
At September 30, 2023, the non-performing commercial real estate category included four loans, none of which were added during the current quarter. The largest relationship in the category, which totaled
Compared to December 31, 2022, potential problem loans decreased
Activity in the potential problem loans category during the quarter ended September 30, 2023, was as follows:
| Beginning Balance, July 1 | Additions to Potential Problem | Removed from Potential Problem | Transfers to Non- Performing | Transfers to Foreclosed Assets and Repossessions | Charge- Offs | Loan Advances (Payments) | Ending Balance, September 30 | ||||||||||||
| (In thousands) | |||||||||||||||||||
| One- to four-family construction | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||
| Subdivision construction | — | — | — | — | — | — | — | — | |||||||||||
| Land development | — | — | — | — | — | — | — | — | |||||||||||
| Commercial construction | — | — | — | — | — | — | — | — | |||||||||||
| One- to four-family residential | 382 | — | — | — | — | — | (146 | ) | 236 | ||||||||||
| Other residential | — | — | — | — | — | — | — | — | |||||||||||
| Commercial real estate | — | — | — | — | — | — | — | — | |||||||||||
| Commercial business | — | — | — | — | — | — | — | — | |||||||||||
| Consumer | 109 | 6 | — | (3 | ) | — | — | (11 | ) | 101 | |||||||||
| Total potential problem loans | $ | 491 | $ | 6 | $ | — | $ | (3 | ) | $ | — | $ | — | $ | (157 | ) | $ | 337 | |
| FDIC-assisted acquired loans included above | $ | 178 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (1 | ) | $ | 177 | ||
At September 30, 2023, the one- to four-family residential category of potential problem loans included three loans, none of which were added during the current quarter. The largest relationship in this category totaled
Activity in foreclosed assets and repossessions during the quarter ended September 30, 2023 was as follows:
| Beginning Balance, July 1 | Additions | ORE and Repossession Sales | Capitalized Costs | ORE and Repossession Write-Downs | Ending Balance, September 30 | ||||||||
| (In thousands) | |||||||||||||
| One-to four-family construction | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |
| Subdivision construction | — | — | — | — | — | — | |||||||
| Land development | — | — | — | — | — | — | |||||||
| Commercial construction | — | — | — | — | — | — | |||||||
| One- to four-family residential | 21 | — | (21 | ) | — | — | — | ||||||
| Other residential | — | — | — | — | — | — | |||||||
| Commercial real estate | — | — | — | — | — | — | |||||||
| Commercial business | — | — | — | — | — | — | |||||||
| Consumer | 14 | 35 | (11 | ) | — | — | 38 | ||||||
| Total foreclosed assets and repossessions | $ | 35 | $ | 35 | $ | (32 | ) | $ | — | $ | — | $ | 38 |
| FDIC-assisted acquired loans included above | $ | 21 | $ | — | $ | (21 | ) | $ | — | $ | — | $ | — |
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.
BUSINESS INITIATIVES
Since early 2022, Great Southern has 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, has been delayed to mid-2024. Certain contractual disputes have arisen between Great Southern and the third-party vendor. While discussions are ongoing between the parties, there is no assurance that a resolution will be achieved. In the meantime, Great Southern 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 September 2023, in Springfield, Missouri, the Company opened Great Southern Express, a modern four-lane drive-through center using only interactive teller machine (ITM) technology to serve customers. ITMs, also known as video remote tellers, offer an ATM-like interface, but with the enhancement of a video screen that allows customers to speak directly to a service representative in real time and in a highly personal manner during extended business hours seven days a week. Nearly any teller transaction that can be performed in the traditional drive-thru can be performed at an ITM, including cashing a check to the penny. ITMs provide convenience and enhanced access for customers, while creating greater operational efficiencies for the Bank.
Also in the Springfield market, a banking center is slated to be consolidated into a nearby banking center at the close of business on January 12, 2024. After a thorough evaluation, the banking center at 600 West Republic Road will be consolidated into the Great Southern banking center located at 2945 W. Republic Road, a short distance away. After the West Republic Road location closes, an on-site ITM will be available there indefinitely for customers’ convenience.
The Company will host a conference call on Thursday, October 19, 2023, at 2:00 p.m. Central Time to discuss third quarter 2023 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/BIdab4697736124b7795f0adfcf27a948a.
Headquartered in Springfield, Missouri, Great Southern offers a broad range of banking services to customers. The Company operates 90 retail banking centers in Missouri, Iowa, Kansas, Minnesota, Arkansas and Nebraska and commercial lending offices in Atlanta; Charlotte, North Carolina; Chicago; Dallas; Denver; Omaha, Nebraska; Phoenix and Tulsa, Oklahoma. The common stock of Great Southern Bancorp, Inc. is listed on the Nasdaq Global Select Market under the symbol "GSBC."
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 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; (xviii) the transition from LIBOR to new interest rate benchmarks; and (xix) 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, 2023 and 2022, and the three months ended June 30, 2023, are not necessarily indicative of the results of operations which may be expected for any future period.
| September 30, | December 31, | ||||
| 2023 | 2022 | ||||
| Selected Financial Condition Data: | (In thousands) | ||||
| Total assets | $ | 5,748,078 | $ | 5,680,702 | |
| Loans receivable, gross | 4,637,241 | 4,581,381 | |||
| Allowance for credit losses on loans | 64,753 | 63,480 | |||
| Other real estate owned, net | 38 | 233 | |||
| Available-for-sale securities, at fair value | 447,948 | 490,592 | |||
| Held-to-maturity securities, at amortized cost | 196,716 | 202,495 | |||
| Deposits | 4,851,548 | 4,684,910 | |||
| Total borrowings | 242,560 | 366,481 | |||
| Total stockholders’ equity | 531,697 | 533,087 | |||
| Non-performing assets | 10,869 | 3,720 | |||
| Three Months Ended | Nine Months Ended | Three Months Ended | |||||||||||||||
| September 30, | September 30, | June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | |||||||||||||
| (In thousands) | |||||||||||||||||
| Selected Operating Data: | |||||||||||||||||
| Interest income | $ | 75,272 | $ | 59,657 | $ | 220,353 | $ | 159,028 | $ | 73,618 | |||||||
| Interest expense | 28,534 | 6,759 | 72,285 | 14,034 | 25,480 | ||||||||||||
| Net interest income | 46,738 | 52,898 | 148,068 | 144,994 | 48,138 | ||||||||||||
| Provision (credit) for credit losses on loans and unfunded commitments | (1,195 | ) | 3,315 | (2,140 | ) | 5,345 | (1,619 | ) | |||||||||
| Non-interest income | 7,852 | 7,984 | 23,510 | 26,480 | 7,769 | ||||||||||||
| Non-interest expense | 35,557 | 34,758 | 104,738 | 99,030 | 34,718 | ||||||||||||
| Provision for income taxes | 4,349 | 4,676 | 14,325 | 13,755 | 4,488 | ||||||||||||
| Net income | $ | 15,879 | $ | 18,133 | $ | 54,655 | $ | 53,344 | $ | 18,320 | |||||||
| At or For the Three Months Ended | At or For the Nine Months Ended | At or For the Three Months Ended | |||||||||||||||
| September 30, | September 30, | June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | |||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||
| Per Common Share: | |||||||||||||||||
| Net income (fully diluted) | $ | 1.33 | $ | 1.46 | $ | 4.52 | $ | 4.20 | $ | 1.52 | |||||||
| Book value | $ | 44.81 | $ | 41.75 | $ | 44.81 | $ | 41.75 | $ | 45.64 | |||||||
| Earnings Performance Ratios: | |||||||||||||||||
| Annualized return on average assets | 1.11 | % | 1.30 | % | 1.28 | % | 1.30 | % | 1.28 | % | |||||||
| Annualized return on average common stockholders’ equity | 11.47 | % | 13.01 | % | 13.15 | % | 12.26 | % | 13.11 | % | |||||||
| Net interest margin | 3.43 | % | 3.96 | % | 3.66 | % | 3.73 | % | 3.56 | % | |||||||
| Average interest rate spread | 2.79 | % | 3.76 | % | 3.09 | % | 3.58 | % | 2.96 | % | |||||||
| Efficiency ratio | 65.13 | % | 57.09 | % | 61.04 | % | 57.75 | % | 62.10 | % | |||||||
| Non-interest expense to average total assets | 2.49 | % | 2.49 | % | 2.45 | % | 2.42 | % | 2.43 | % | |||||||
| Asset Quality Ratios: | |||||||||||||||||
| Allowance for credit losses to period-end loans | 1.40 | % | 1.38 | % | 1.40 | % | 1.38 | % | 1.41 | % | |||||||
| Non-performing assets to period-end assets | 0.19 | % | 0.06 | % | 0.19 | % | 0.06 | % | 0.20 | % | |||||||
| Non-performing loans to period-end loans | 0.23 | % | 0.07 | % | 0.23 | % | 0.07 | % | 0.24 | % | |||||||
| Annualized net charge-offs (recoveries) to average loans | 0.01 | % | 0.03 | % | 0.01 | % | 0.00 | % | 0.01 | % | |||||||
| Great Southern Bancorp, Inc. and Subsidiaries Consolidated Statements of Financial Condition (In thousands, except number of shares) | |||||||||
| September 30, 2023 | December 31, 2022 | June 30, 2023 | |||||||
| Assets | |||||||||
| Cash | $ | 92,579 | $ | 105,262 | $ | 105,859 | |||
| Interest-bearing deposits in other financial institutions | 89,736 | 63,258 | 98,080 | ||||||
| Cash and cash equivalents | 182,315 | 168,520 | 203,939 | ||||||
| Available-for-sale securities | 447,948 | 490,592 | 476,911 | ||||||
| Held-to-maturity securities | 196,716 | 202,495 | 198,387 | ||||||
| Mortgage loans held for sale | 5,678 | 4,811 | 10,442 | ||||||
| Loans receivable, net of allowance for credit losses of | 4,564,567 | 4,506,836 | 4,516,613 | ||||||
| Interest receivable | 19,366 | 19,107 | 17,178 | ||||||
| Prepaid expenses and other assets | 103,441 | 69,461 | 76,194 | ||||||
| Other real estate owned and repossessions (1), net | 38 | 233 | 35 | ||||||
| Premises and equipment, net | 139,893 | 141,070 | 140,556 | ||||||
| Goodwill and other intangible assets | 10,585 | 10,813 | 10,644 | ||||||
| Federal Home Loan Bank stock and other interest-earning assets | 36,038 | 30,814 | 32,758 | ||||||
| Current and deferred income taxes | 41,493 | 35,950 | 35,973 | ||||||
| Total Assets | $ | 5,748,078 | $ | 5,680,702 | $ | 5,719,630 | |||
| Liabilities and Stockholders’ Equity | |||||||||
| Liabilities | |||||||||
| Deposits | $ | 4,851,548 | $ | 4,684,910 | $ | 4,824,571 | |||
| Securities sold under reverse repurchase agreements with customers | 58,172 | 176,843 | 59,257 | ||||||
| Short-term borrowings | 84,110 | 89,583 | 72,110 | ||||||
| Subordinated debentures issued to capital trust | 25,774 | 25,774 | 25,774 | ||||||
| Subordinated notes | 74,504 | 74,281 | 74,430 | ||||||
| Accrued interest payable | 6,619 | 3,010 | 5,026 | ||||||
| Advances from borrowers for taxes and insurance | 10,227 | 6,590 | 9,342 | ||||||
| Accounts payable and accrued expenses | 96,251 | 73,808 | 92,420 | ||||||
| Liability for unfunded commitments | 9,176 | 12,816 | 10,371 | ||||||
| Total Liabilities | 5,216,381 | 5,147,615 | 5,173,301 | ||||||
| Stockholders’ Equity | |||||||||
| Capital stock | |||||||||
| Preferred stock, $.01 par value; authorized 1,000,000 shares; issued and outstanding September 2023, December 2022 and June 2023 -0- shares | — | — | — | ||||||
| Common stock, $.01 par value; authorized 20,000,000 shares; issued and outstanding September 2023 – 11,864,363 shares; December 2022 – 12,231,290 shares; June 2023 – 11,969,524 shares | 119 | 122 | 120 | ||||||
| Additional paid-in capital | 43,701 | 42,445 | 43,292 | ||||||
| Retained earnings | 564,658 | 543,875 | 558,927 | ||||||
| Accumulated other comprehensive gain (loss) | (76,781 | ) | (53,355 | ) | (56,010 | ) | |||
| Total Stockholders’ Equity | 531,697 | 533,087 | 546,329 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 5,748,078 | $ | 5,680,702 | $ | 5,719,630 | |||
(1) At September 30, 2023, December 31, 2022 and June 30, 2023, includes
| Great Southern Bancorp, Inc. and Subsidiaries Consolidated Statements of Income (In thousands, except per share data) | |||||||||||||||||
| Three Months Ended | Nine Months Ended | Three Months Ended | |||||||||||||||
| September 30, | September 30, | June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | |||||||||||||
| Interest Income | |||||||||||||||||
| Loans | $ | 68,878 | $ | 54,077 | $ | 201,758 | $ | 143,906 | $ | 67,442 | |||||||
| Investment securities and other | 6,394 | 5,580 | 18,595 | 15,122 | 6,176 | ||||||||||||
| 75,272 | 59,657 | 220,353 | 159,028 | 73,618 | |||||||||||||
| Interest Expense | |||||||||||||||||
| Deposits | 25,233 | 4,984 | 61,668 | 9,516 | 21,785 | ||||||||||||
| Securities sold under reverse repurchase agreements | 308 | 45 | 871 | 62 | 221 | ||||||||||||
| Short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities | 1,433 | 377 | 5,156 | 614 | 1,943 | ||||||||||||
| Subordinated debentures issued to capital trust | 454 | 248 | 1,273 | 525 | 426 | ||||||||||||
| Subordinated notes | 1,106 | 1,105 | 3,317 | 3,317 | 1,105 | ||||||||||||
| 28,534 | 6,759 | 72,285 | 14,034 | 25,480 | |||||||||||||
| Net Interest Income | 46,738 | 52,898 | 148,068 | 144,994 | 48,138 | ||||||||||||
| Provision for Credit Losses on Loans | — | 2,000 | 1,500 | 2,000 | — | ||||||||||||
| Provision (Credit) for Unfunded Commitments | (1,195 | ) | 1,315 | (3,640 | ) | 3,345 | (1,619 | ) | |||||||||
| Net Interest Income After Provision for Credit Losses and Provision (Credit) for Unfunded Commitments | 47,933 | 49,583 | 150,208 | 139,649 | 49,757 | ||||||||||||
| Noninterest Income | |||||||||||||||||
| Commissions | 232 | 226 | 887 | 912 | 228 | ||||||||||||
| Overdraft and Insufficient funds fees | 2,017 | 2,077 | 5,902 | 5,830 | 1,989 | ||||||||||||
| POS and ATM fee income and service charges | 3,724 | 3,874 | 11,204 | 11,942 | 3,779 | ||||||||||||
| Net gains on loan sales | 784 | 601 | 1,882 | 2,234 | 709 | ||||||||||||
| Net realized gain (loss) on sale of available-for-sale securities | — | 31 | — | 38 | — | ||||||||||||
| Late charges and fees on loans | 149 | 206 | 454 | 879 | 125 | ||||||||||||
| Gain (loss) on derivative interest rate products | 55 | 88 | (234 | ) | 385 | 2 | |||||||||||
| Other income | 891 | 881 | 3,415 | 4,260 | 937 | ||||||||||||
| 7,852 | 7,984 | 23,510 | 26,480 | 7,769 | |||||||||||||
| Noninterest Expense | |||||||||||||||||
| Salaries and employee benefits | 19,673 | 18,976 | 58,554 | 56,488 | 19,678 | ||||||||||||
| Net occupancy and equipment expense | 7,729 | 7,198 | 22,858 | 20,884 | 7,409 | ||||||||||||
| Postage | 844 | 860 | 2,586 | 2,491 | 914 | ||||||||||||
| Insurance | 1,301 | 803 | 3,178 | 2,383 | 1,010 | ||||||||||||
| Advertising | 950 | 953 | 2,500 | 2,383 | 903 | ||||||||||||
| Office supplies and printing | 294 | 236 | 820 | 662 | 258 | ||||||||||||
| Telephone | 657 | 832 | 2,048 | 2,513 | 688 | ||||||||||||
| Legal, audit and other professional fees | 1,849 | 2,239 | 5,477 | 4,240 | 1,647 | ||||||||||||
| Expense on other real estate and repossessions | 62 | 84 | 263 | 313 | 47 | ||||||||||||
| Acquired intangible asset amortization | 59 | 216 | 228 | 552 | 58 | ||||||||||||
| Other operating expenses | 2,139 | 2,361 | 6,226 | 6,121 | 2,106 | ||||||||||||
| 35,557 | 34,758 | 104,738 | 99,030 | 34,718 | |||||||||||||
| Income Before Income Taxes | 20,228 | 22,809 | 68,980 | 67,099 | 22,808 | ||||||||||||
| Provision for Income Taxes | 4,349 | 4,676 | 14,325 | 13,755 | 4,488 | ||||||||||||
| Net Income | $ | 15,879 | $ | 18,133 | $ | 54,655 | $ | 53,344 | $ | 18,320 | |||||||
| Earnings Per Common Share | |||||||||||||||||
| Basic | $ | 1.33 | $ | 1.47 | $ | 4.53 | $ | 4.23 | $ | 1.52 | |||||||
| Diluted | $ | 1.33 | $ | 1.46 | $ | 4.52 | $ | 4.20 | $ | 1.52 | |||||||
| Dividends Declared Per Common Share | $ | 0.40 | $ | 0.40 | $ | 1.20 | $ | 1.16 | $ | 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
| September 30, 2023 | Three Months Ended September 30, 2023 | Three Months Ended September 30, 2022 | ||||||||||||||||||
| Average | Yield/ | Average | Yield/ | |||||||||||||||||
| Yield/Rate | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||
| Loans receivable: | ||||||||||||||||||||
| One- to four-family residential | 3.79 | % | $ | 903,147 | $ | 8,594 | 3.78 | % | $ | 872,243 | $ | 7,532 | 3.43 | % | ||||||
| Other residential | 7.07 | 829,520 | 14,702 | 7.03 | 885,883 | 11,836 | 5.30 | |||||||||||||
| Commercial real estate | 6.01 | 1,466,739 | 21,730 | 5.88 | 1,584,249 | 19,368 | 4.85 | |||||||||||||
| Construction | 7.89 | 911,731 | 16,691 | 7.26 | 635,811 | 9,116 | 5.69 | |||||||||||||
| Commercial business | 6.36 | 313,909 | 4,812 | 6.08 | 293,529 | 3,734 | 5.05 | |||||||||||||
| Other loans | 6.45 | 178,030 | 2,128 | 4.74 | 197,070 | 2,309 | 4.65 | |||||||||||||
| Industrial revenue bonds | 6.01 | 12,322 | 221 | 7.11 | 13,100 | 182 | 5.52 | |||||||||||||
| Total loans receivable | 6.16 | 4,615,398 | 68,878 | 5.92 | 4,481,885 | 54,077 | 4.79 | |||||||||||||
| Investment securities | 2.72 | 678,564 | 5,018 | 2.93 | 734,518 | 5,129 | 2.77 | |||||||||||||
| Other interest-earning assets | 5.33 | 104,546 | 1,376 | 5.22 | 84,797 | 451 | 2.11 | |||||||||||||
| Total interest-earning assets | 5.77 | 5,398,508 | 75,272 | 5.53 | 5,301,200 | 59,657 | 4.46 | |||||||||||||
| Non-interest-earning assets: | ||||||||||||||||||||
| Cash and cash equivalents | 91,860 | 101,307 | ||||||||||||||||||
| Other non-earning assets | 213,411 | 176,768 | ||||||||||||||||||
| Total assets | $ | 5,703,779 | $ | 5,579,275 | ||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Interest-bearing demand and savings | 1.54 | $ | 2,195,848 | 8,064 | 1.46 | $ | 2,303,579 | 1,320 | 0.23 | |||||||||||
| Time deposits | 3.53 | 996,220 | 8,450 | 3.37 | 872,269 | 1,811 | 0.82 | |||||||||||||
| Brokered deposits | 5.06 | 669,829 | 8,719 | 5.16 | 324,183 | 1,853 | 2.27 | |||||||||||||
| Total deposits | 2.65 | 3,861,897 | 25,233 | 2.59 | 3,500,031 | 4,984 | 0.56 | |||||||||||||
| Securities sold under reverse repurchase agreements | 2.42 | 56,152 | 308 | 2.18 | 134,917 | 45 | 0.13 | |||||||||||||
| Short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities | 5.57 | 103,828 | 1,433 | 5.47 | 69,956 | 377 | 2.14 | |||||||||||||
| Subordinated debentures issued to capital trust | 7.23 | 25,774 | 454 | 7.00 | 25,774 | 248 | 3.82 | |||||||||||||
| Subordinated notes | 5.93 | 74,462 | 1,106 | 5.89 | 74,165 | 1,105 | 5.91 | |||||||||||||
| Total interest-bearing liabilities | 2.79 | 4,122,113 | 28,534 | 2.74 | 3,804,843 | 6,759 | 0.70 | |||||||||||||
| Non-interest-bearing liabilities: | ||||||||||||||||||||
| Demand deposits | 938,076 | 1,146,542 | ||||||||||||||||||
| Other liabilities | 89,970 | 70,566 | ||||||||||||||||||
| Total liabilities | 5,150,159 | 5,021,951 | ||||||||||||||||||
| Stockholders’ equity | 553,620 | 557,324 | ||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 5,703,779 | $ | 5,579,275 | ||||||||||||||||
| Net interest income: | $ | 46,738 | $ | 52,898 | ||||||||||||||||
| Interest rate spread | 2.98 | % | 2.79 | % | 3.76 | % | ||||||||||||||
| Net interest margin* | 3.43 | % | 3.96 | % | ||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 131.0 | % | 139.3 | % | ||||||||||||||||
*Defined as the Company’s net interest income divided by average total interest-earning assets.
| September 30, 2023 | Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 | ||||||||||||||||||
| Average | Yield/ | Average | Yield/ | |||||||||||||||||
| Yield/Rate | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||
| Loans receivable: | ||||||||||||||||||||
| One- to four-family residential | 3.79 | % | $ | 907,990 | $ | 25,124 | 3.70 | % | $ | 782,592 | $ | 20,107 | 3.44 | % | ||||||
| Other residential | 7.07 | 824,453 | 41,767 | 6.77 | 832,641 | 29,890 | 4.80 | |||||||||||||
| Commercial real estate | 6.01 | 1,495,186 | 65,508 | 5.86 | 1,550,445 | 51,834 | 4.47 | |||||||||||||
| Construction | 7.89 | 899,026 | 48,544 | 7.22 | 642,264 | 24,367 | 5.07 | |||||||||||||
| Commercial business | 6.36 | 296,605 | 13,153 | 5.93 | 290,420 | 10,431 | 4.80 | |||||||||||||
| Other loans | 6.45 | 183,679 | 7,001 | 5.10 | 200,014 | 6,770 | 4.53 | |||||||||||||
| Industrial revenue bonds | 6.01 | 12,493 | 661 | 7.08 | 13,472 | 507 | 5.03 | |||||||||||||
| Total loans receivable | 6.16 | 4,619,432 | 201,758 | 5.84 | 4,311,848 | 143,906 | 4.46 | |||||||||||||
| Investment securities | 2.72 | 694,727 | 15,005 | 2.89 | 670,700 | 14,260 | 2.84 | |||||||||||||
| Other interest-earning assets | 5.33 | 97,829 | 3,590 | 4.91 | 218,263 | 862 | 0.53 | |||||||||||||
| Total interest-earning assets | 5.77 | 5,411,988 | 220,353 | 5.44 | 5,200,811 | 159,028 | 4.09 | |||||||||||||
| Non-interest-earning assets: | ||||||||||||||||||||
| Cash and cash equivalents | 91,515 | 95,943 | ||||||||||||||||||
| Other non-earning assets | 205,415 | 156,577 | ||||||||||||||||||
| Total assets | $ | 5,708,918 | $ | 5,453,331 | ||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Interest-bearing demand and savings | 1.54 | $ | 2,191,827 | 19,281 | 1.18 | $ | 2,355,937 | 2,927 | 0.17 | |||||||||||
| Time deposits | 3.53 | 999,856 | 20,658 | 2.76 | 839,286 | 3,375 | 0.54 | |||||||||||||
| Brokered deposits | 5.06 | 588,862 | 21,729 | 4.93 | 175,717 | 3,214 | 2.45 | |||||||||||||
| Total deposits | 2.65 | 3,780,545 | 61,668 | 2.18 | 3,370,940 | 9,516 | 0.38 | |||||||||||||
| Securities sold under reverse repurchase agreements | 2.42 | 85,811 | 871 | 1.36 | 132,930 | 62 | 0.06 | |||||||||||||
| Short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities | 5.57 | 134,595 | 5,156 | 5.12 | 49,217 | 614 | 1.67 | |||||||||||||
| Subordinated debentures issued to capital trust | 7.23 | 25,774 | 1,273 | 6.61 | 25,774 | 525 | 2.72 | |||||||||||||
| Subordinated notes | 5.93 | 74,392 | 3,317 | 5.96 | 74,094 | 3,317 | 5.99 | |||||||||||||
| Total interest-bearing liabilities | 2.79 | 4,101,117 | 72,285 | 2.36 | 3,652,955 | 14,034 | 0.51 | |||||||||||||
| Non-interest-bearing liabilities: | ||||||||||||||||||||
| Demand deposits | 965,403 | 1,165,125 | ||||||||||||||||||
| Other liabilities | 88,309 | 55,287 | ||||||||||||||||||
| Total liabilities | 5,154,829 | 4,873,367 | ||||||||||||||||||
| Stockholders’ equity | 554,089 | 579,964 | ||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 5,708,918 | $ | 5,453,331 | ||||||||||||||||
| Net interest income: | $ | 148,068 | $ | 144,994 | ||||||||||||||||
| Interest rate spread | 2.98 | % | 3.09 | % | 3.58 | % | ||||||||||||||
| Net interest margin* | 3.66 | % | 3.73 | % | ||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 132.0 | % | 142.4 | % | ||||||||||||||||
*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”), specifically, 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, | ||||||
| 2023 | 2022 | ||||||
| (Dollars in thousands) | |||||||
| Common equity at period end | $ | 531,697 | $ | 533,087 | |||
| Less: Intangible assets at period end | 10,585 | 10,813 | |||||
| Tangible common equity at period end (a) | $ | 521,112 | $ | 522,274 | |||
| Total assets at period end | $ | 5,748,078 | $ | 5,680,702 | |||
| Less: Intangible assets at period end | 10,585 | 10,813 | |||||
| Tangible assets at period end (b) | $ | 5,737,493 | $ | 5,669,889 | |||
| Tangible common equity to tangible assets (a) / (b) | 9.08 | % | 9.21 | % | |||
CONTACT: Kelly Polonus, Great Southern, (417) 895-5242
kpolonus@greatsouthernbank.com
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