Great Southern Bancorp : First Quarter 2025 Press Release

Published: 2025-04-16 18:37:06 ET GSBC

NEWS RELEASE

Great Southern Bancorp, Inc. Reports Preliminary

First Quarter Earnings of $1.47 Per Diluted Common

2025-04-16

Preliminary Financial Results and Business Update for the Quarter Ended March 31, 2025

SPRINGFIELD, Mo., April 16, 2025 (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 March 31,

2025, were $1.47 per diluted common share ($17.2 million net income) compared to $1.13 per diluted common

share ($13.4 million net income) for the three months ended March 31, 2024.

For the quarter ended March 31, 2025, annualized return on average common equity was 11.30%, annualized

return on average assets was 1.15%, and annualized net interest margin was 3.57%, compared to 9.36%, 0.93% and

3.32%, respectively, for the quarter ended March 31, 2024.

First Quarter 2025 Key Results:

Net Interest Income: Net interest income for the

10.1%) to $49.3 million compared to $44.8 million for the

interest income on loans and lower interest expense on deposit accounts. Annualized net interest margin was

3.57% for the quarter ended March 31, 2025, compared to 3.32% for the quarter ended March 31, 2024, and

3.49% for the quarter ended December 31, 2024. During the quarter ended March 31, 2025, the Company

recorded additional interest income of $744,000 related to recoveries on cash-basis loans and other assets,

positively a

Asset Quality: Non-performing assets and potential problem loans totaled $17.0 million at March 31, 2025, an

increase of $342,000 from $16.6 million at December 31, 2024. At March 31, 2025, non-performing assets

were $9.5 million (0.16% of total assets), a decrease of $48,000 from $9.6 million (0.16% of total assets) at

December 31, 2024.

Liquidity: The Company had secured borrowing line availability at the FHLBank and Federal Reserve Bank of

$1.17 billion and $370.5 million, respectively, at March 31, 2025. In addition, at March 31, 2025, the Company

had unpledged securities with a market value totaling $337.4 million, which could be pledged as collateral for

additional borrowing capacity at either the FHLBank or Federal Reserve Bank.

Capital: The Company's capital position remained strong as of March 31, 2025, signi

thresholds established by regulators. On a preliminary basis, as of March 31, 2025, the Company's Tier 1

Leverage Ratio was 11.3%, Common Equity Tier 1 Capital Ratio was 12.4%, Tier 1 Capital Ratio was 12.9%, and

Total Capital Ratio was 15.6%. The Company's tangible common equity to tangible assets ratio was 10.1% at

March 31, 2025.

Signi: In the quarter ended March 31, 2025, the Company received an annual marketing and card

expense reimbursement for qualifying expenditures from its debit card brand provider of $433,000, which

Stock Purchase Authorization: In April 2025, the Company's Board of Directors approved a new stock

repurchase program of up to one million additional shares of the Company's common stock, which will

succeed the existing repurchase program (authorized in November 2022) following the repurchase of the

existing program's remaining available shares, which were approximately 270,000 shares at March 31, 2025.

Selected Financial Data:

Three Months Ended

March 31,

December 31,

2025

2024

(Dollars in thousands, except per share data)

Net interest income

49,334

44,816

49,534

Provision (credit) for credit losses on loans and unfunded commitments

(348)

630

1,556

Non-interest income

6,590

6,806

6,934

Non-interest expense

34,822

34,422

36,947

Provision for income taxes

4,290

3,163

3,043

Net income

17,160

13,407

14,922

1.47

1.13

1.27

Earnings per diluted common share

Joseph W. Turner, President and CEO of Great Southern, commented, "Our

strength of our underlying strategy and our ability to adapt with discipline amid ongoing economic and

sector challenges. Our core banking fundamentals remain sound, with quarterly pro

higher interest income, disciplined expense management, and favorable contributions from interest income

recoveries and an expense reimbursement. We reported net income of $17.2 million, or $1.47 per diluted common

share, for the

period last year. The increase in net income compared to the prior year quarter was primarily driven by strong

growth in net interest income, which rose $4.5 million, or 10.1%, supported by increases in both loan yields and

average loan balances. Additionally, a negative provision for losses on unfunded commitments of $348,000 in the

signi

He noted, "Despite external economic pressures, our core operations remained strong. Total interest income for

the

income for the quarter remained healthy at $49.3 million, supported by disciplined asset-liability management and

a deliberate strategy to control funding costs through management of our funding mix and duration amid

persistent deposit competition. Importantly, we saw no material deterioration in our core non-time deposit

balances, re

Turner added, "Our balance sheet remains well positioned, with total assets of approximately $5.99 billion at March

31, 2025, and a loan portfolio that has been carefully managed in terms of both growth and risk composition. We

continue to emphasize prudent lending practices, focusing on relationship-based lending and credit quality rather

than volume. Our allowance for credit losses stood at $64.7 million at March 31, 2025, representing 1.36% of total

loans. Our non-performing assets remained at minimal levels consistent with previous quarters, underscoring the

strength of our underwriting standards and ongoing credit monitoring."

He further noted, "On the expense side, we continued to demonstrate operating discipline. Noninterest expense

totaled $34.8 million for the

pressures, with reductions in legal and professional fees o

technology investments. Noninterest income totaled $6.6 million for the

consistent with the prior-year

Turner continued, "As we look ahead, our priorities remain unchanged. We will continue to manage costs tightly,

safeguard credit quality, and strive to optimize our funding mix to ensure long-term

2025, our capital and liquidity positions were solid, with a tangible common equity ratio of 10.1% and

approximately $2 billion of secured available lines and on-balance sheet liquid assets, providing us with ample

shareholders through dividends and share repurchases. In the

shares of our common stock."

"Great Southern's Q1 2025 results underscore the consistency of our business model and our track record of

delivering sustainable returns, supported by strong core fundamentals and disciplined execution. We remain

focused on long-term value creation and are con

continuing to serve our customers, communities, and shareholders," Turner concluded.

NET INTEREST INCOME

Three Months Ended

March 31,

December 31,

2025

2024

(Dollars in thousands)

Interest Income

80,243

77,390

82,585

Interest Expense

30,909

32,574

33,051

Net Interest Income

49,334

44,816

49,534

Net interest margin

3.57%

3.32%

3.49%

Average interest-earning assets to average interest-bearing liabilities

125.5%

127.4%

127.0%

Net interest income for the

for the

income and improved overall yields, as well as the strategic management of maturing/repricing brokered deposits

and interest-bearing demand deposits. Net interest margin was 3.57% in the

3.32% in the same period of 2024 and 3.49% in the fourth quarter of 2024. The additional interest income items

outlined above, under "First Quarter 2025 Key Results - Net Interest Income," contributed 5 basis points to net

interest margin in the

increased 10 basis points, the average yield on investment securities increased 33 basis points and the average

yield on other interest earning assets decreased 99 basis points. The average rate paid on interest-bearing demand

and savings deposits, time deposits and brokered deposits decreased 29 basis points, 40 basis points and 67 basis

points, respectively, in the three months ended March 31, 2025 compared to the three months ended March 31,

2024. The average interest rate spread was 3.00% for the three months ended March 31, 2025, compared to 2.66%

for the three months ended March 31, 2024, and 2.87% for the three months ended December 31, 2024.

The average rates paid on deposits and borrowings decreased compared to the prior-year

interest rates, primarily the federal funds rate and SOFR rates, declined in the fourth quarter of 2024. Yields on the

Company's portfolio of investment securities increased compared to the prior-year

yielding securities purchased in the second quarter of 2024. While market interest rates decreased compared to the

were redeployed into loans with comparably higher rates of interest.

To mitigate exposure to the risk of

(primarily related to falling interest rates), the Company has, from time to time, strategically utilized derivative

The following table presents the e

consolidated statements of income:

Three Months Ended

March 31,

December 31,

2025

2024

(In thousands)

Terminated interest rate swaps

2,003

2,025

2,047

Active interest rate swaps

(1,742)

(4,653)

(2,116)

Increase (decrease) to interest income

261

(2,628)

(69)

The Company entered into an interest rate swap in October 2018, which was terminated in March 2020. Upon

termination, the Company received $45.9 million, inclusive of accrued but unpaid interest, from its swap

counterparty. The net amount, after deducting accrued interest and deferred income taxes, is being accreted to

interest income on loans monthly until the original termination date of October 6, 2025. After this date, the

Company will no longer have the bene

anticipates recording approximately $2.0 million in interest income from the terminated swap in each of the

three quarters, after which no further interest income will be realized.

The Company's net interest income in the

the

of competition for deposits across the industry and the lingering e

March and April 2023. After the second quarter of 2023, the Company had a signi

maturing at relatively low interest rates. These deposits were either renewed at higher rates or withdrawn,

requiring the Company to replace the withdrawn deposits with other funding sources at the prevailing higher

market rates. Market rates for time deposits for much of 2024 remained elevated, but have recently declined as the

FOMC cut the federal funds rate by 100 basis points in late 2024 and signaled that further rate cuts may occur in

2025. As of March 31, 2025, time deposit maturities over the next 12 months were as follows: within three months -

- $669 million, with a weighted-average rate of 4.10%; within three to six months -- $495 million, with a weighted-

average rate of 3.74%; and within six to twelve months -- $133 million, with a weighted-average rate of 3.23%.

Based on time deposit market rates in March 2025, replacement rates for these maturing time deposits are likely to

be approximately 3.50-4.00%.

NON-INTEREST INCOME

For the quarter ended March 31, 2025, non-interest income decreased $216,000 to $6.6 million when compared to

the quarter ended March 31, 2024. None of the components of non-interest income experienced increases or

decreases exceeding $200,000 in comparing the two periods.

NON-INTEREST EXPENSE

For the quarter ended March 31, 2025, non-interest expense increased $400,000 to $34.8 million when compared

to the quarter ended March 31, 2024, primarily as a result of the following items:

Net occupancy and equipment expenses: Net occupancy and equipment expenses increased $694,000, or

8.9%, from the prior-year quarter. Various components of computer license and support expenses related to

upgrades of core systems capabilities collectively increased by $322,000 in the

to the

removal activity, collectively increased by $232,000 in the

of 2024.

Salaries and employee bene

year quarter. Much of this increase related to normal annual merit increases in various lending and

operations areas.

Legal, audit and other professional fees: Legal, audit and other professional fees decreased $687,000 from

the prior-year quarter, to $1.0 million. In the quarter ended March 31, 2024, the Company expensed a total of

$929,000 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, with no such costs expensed in the quarter ended March 31,

2025.

The Company's e

same quarter in 2024. The Company's ratio of non-interest expense to average assets was 2.34% for the three

months ended March 31, 2025, compared to 2.39% for the three months ended March 31, 2024. Average assets for

the three months ended March 31, 2025, increased $200.2 million, or 3.5%, compared to the three months ended

March 31, 2024, primarily due to growth in average balances of net loans receivable and investment securities.

INCOME TAXES

For the three months ended March 31, 2025 and 2024, the Company's e

respectively. These e

of certain investment tax credits and the Company's tax-exempt investments and tax-exempt loans, which reduced

the Company's e

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 currently expects its e

in future periods.

CAPITAL

March 31,

December 31,

2025

2024

Consolidated Regulatory Capital Ratios

(Preliminary)

Tier 1 Leverage Ratio

11.3%

11.4%

Common Equity Tier 1 Capital Ratio

12.4%

12.3%

Tier 1 Capital Ratio

12.9%

12.8%

Total Capital Ratio

15.6%

15.4%

Tangible Common Equity Ratio

10.1%

9.9%

As of March 31, 2025, total stockholders' equity was $613.3 million, representing 10.2% of total assets and a book

value of $53.03 per common share. This compares to total stockholders' equity of $599.6 million, or 10.0% of total

assets, and a book value of $51.14 per common share at December 31, 2024. The $13.7 million increase in

stockholders' equity was primarily driven by $17.2 million in net income and a $1.2 million increase from stock

option exercises, partially o

$10.2 million in common stock repurchases.

Decreased unrealized losses on the Company's available-for-sale investment securities and interest rate swaps,

which totaled $44.1 million (net of taxes) at March 31, 2025, also increased stockholders' equity by $10.2 million

during the quarter. These net unrealized losses primarily resulted from increased intermediate-term market

interest rates in prior periods, which generally decreased the fair value of the investment securities and interest

rate swaps.

The Company had unrealized losses on its portfolio of held-to-maturity investment securities, which totaled $20.6

million and $24.7 million at March 31, 2025 and December 31, 2024, respectively, that were not included in its total

capital balance. If held-to-maturity unrealized losses were included in capital (net of taxes) at March 31, 2025, they

would have decreased total stockholder's equity at that date by $15.6 million. This amount was equal to 2.5% of

total stockholders' equity of $613.3 million at March 31, 2025, compared to 3.1% of total stockholders' equity at

December 31, 2024.

In November 2022, the Company's Board of Directors authorized the purchase of an additional one million shares

of the Company's common stock. As of March 31, 2025, approximately 270,000 shares remained available in this

stock repurchase authorization.

In April 2025, the Company's Board of Directors approved a new stock repurchase program, which will succeed the

existing repurchase program (authorized in November 2022) following the repurchase of the existing program's

remaining available shares. The new stock repurchase program authorizes the purchase, from time to time, of up

to one million additional shares of the Company's common stock.

During the three months ended March 31, 2025, the Company repurchased 173,344 shares of its common stock at

an average price of $58.38, 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 $14.8 million.

LIQUIDITY AND DEPOSITS

Liquidity is a measure of the Company's ability to generate su

obligations in a timely manner. 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. Management believes that the Company

maintains overall liquidity su

At March 31, 2025, the Company had the following available secured lines and on-balance sheet liquidity:

March 31, 2025

Federal Home Loan Bank line

$1,172.6 million

Federal Reserve Bank line

370.5 million

Cash and cash equivalents

217.2 million

Unpledged securities - Available-for-sale

312.9 million

Unpledged securities - Held-to-maturity

24.5 million

During the three months ended March 31, 2025, the Company's total deposits increased $152.5 million. Interest-

bearing checking balances increased $33.5 million (1.5%), primarily in certain money market accounts, and non-

interest-bearing checking balances increased $9.7 million (1.2%). Time deposits generated through the Company's

banking center and corporate services networks decreased $14.1 million (1.8%). Brokered deposits increased

$123.3 million (16.0%) through a variety of sources.

At March 31, 2025, the Company had the following deposit balances:

March 31, 2025

Interest-bearing checking

$2,248.3 million

Non-interest-bearing checking

852.7 million

Time deposits

761.7 million

Brokered deposits

895.4 million

At March 31, 2025, the Company estimated that its uninsured deposits, excluding deposit accounts of the

Company's consolidated subsidiaries, were approximately $683.9 million (14% of total deposits).

LOANS

Total net loans, excluding mortgage loans held for sale, were generally

compared to December 31, 2024. Increases in other residential (multi-family) loans of $43.2 million and

construction loans of $29.1 million were o

residential loans of $54.4 million and $10.3 million, respectively.

The pipeline of unfunded loan commitments decreased in the

related to construction loans. The unfunded portion of construction loans remained signi

this decline.

For additional details about the Company's loan portfolio, please refer to 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):

March 31,

December 31,

Closed non-construction loans with unused available lines

2025

2024

2023

2022

Secured by real estate (one- to four-family)

211,119

205,599

203,964

199,182

Secured by real estate (not one- to four-family)

Not secured by real estate - commercial business

106,211

106,621

82,435

104,452

Closed construction loans with unused available lines

Secured by real estate (one-to four-family)

96,807

94,501

101,545

100,669

Secured by real estate (not one-to four-family)

657,828

703,947

719,039

1,444,450

Loan commitments not closed

Secured by real estate (one-to four-family)

19,264

14,373

12,347

16,819

Secured by real estate (not one-to four-family)

50,296

53,660

48,153

157,645

Not secured by real estate - commercial business

18,484

22,884

11,763

50,145

1,160,009

1,201,585

1,179,246

2,073,362

PROVISION FOR CREDIT LOSSES AND ALLOWANCE FOR CREDIT LOSSES

During the quarter ended March 31, 2025, the Company did not record a provision expense on its portfolio of

outstanding loans, compared to a provision expense of $500,000 in the same period in 2024. Total net charge-o

were $56,000 for the three months ended March 31, 2025, compared to net charge-o

period in the prior year. Additionally, for the quarter ended March 31, 2025, the Company recorded a negative

provision for losses on unfunded commitments of $348,000, compared to a provision expense of $130,000 for the

same period in 2024.

The Bank's allowance for credit losses as a percentage of total loans was 1.36% at March 31, 2025, consistent with

1.36% at December 31, 2024. Management considers the allowance for credit losses adequate to cover losses

inherent in the Bank's loan portfolio at March 31, 2025, based on recent reviews of the portfolio and current

economic conditions. However, if challenging economic conditions persist or worsen, or if management's

assessment of the loan portfolio changes, additional provisions for credit losses may be required, which could

adversely impact the Company's future

ASSET QUALITY

At March 31, 2025, non-performing assets were $9.5 million, a decrease of $48,000 from $9.6 million at December

31, 2024. Non-performing assets as a percentage of total assets were 0.16% at both March 31, 2025 and December

31, 2024.

Activity in the non-performing loans categories during the quarter ended March 31, 2025, was as follows:

Disclaimer

Great Southern Bancorp Inc. published this content on April 16, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 16, 2025 at 22:36 UTC.