Great Southern Bancorp, Inc. (NASDAQ:GSBC), the holding company for
Great Southern Bank, today reported that preliminary earnings for
the three months ended June 30, 2021, were $1.46 per diluted common
share ($20.1 million available to common shareholders) compared to
$0.93 per diluted common share ($13.2 million available to common
shareholders) for the three months ended June 30, 2020.
Preliminary earnings for the six months ended June 30, 2021,
were $2.82 per diluted common share ($39.0 million available to
common shareholders) compared to $1.98 per diluted common share
($28.1 million available to common shareholders) for the six months
ended June 30, 2020.
For the quarter ended June 30, 2021, annualized return on
average common equity was 12.84%, annualized return on average
assets was 1.44%, and annualized net interest margin was 3.35%,
compared to 8.45%, 0.98% and 3.39%, respectively, for the quarter
ended June 30, 2020. For the six months ended June 30, 2021,
annualized return on average common equity was 12.51%, return on
average assets was 1.41%, and annualized net interest margin was
3.38%, compared to 9.18%, 1.08% and 3.61%, respectively, for the
six months ended June 30, 2020.
Great Southern President and CEO Joseph W. Turner commented, “We
are pleased with our second quarter earnings and continued strong
financial position. While overall economic conditions improved in
the second quarter, uncertainty regarding the timing and magnitude
of the recovery remains. Our associates’ continued focus on taking
care of our customers’ lending, deposit and other financial needs
has enabled us to achieve strong operating results. We earned $20.1
million ($1.46 per diluted common share) in the second quarter of
2021, compared to $13.2 million ($0.93 per diluted common share)
for the same period in 2020. Increased earnings were driven by
higher net gains on mortgage loan sales, increased point-of-sale
debit card and ATM fees, and negative credit loss provisions for
both our funded loan portfolio and unfunded commitments.
Importantly, our pre-provision net revenue continues to increase.
Earnings performance ratios improved with an annualized return on
average assets of 1.44%, annualized return on average equity of
12.84%, and efficiency ratio of 55.63%. While our net interest
margin has been somewhat impacted by increased deposits and
resulting changes in asset mix, net interest income was $88.8
million in the first half of 2021, up from $88.4 million in the
first half of 2020. In addition, compared to the 2020 six-month
period, in the 2021 six-month period we had $2.3 million less in
accretion income on FDIC-acquired loans and $2.0 million more in
interest expense as a result of the subordinated notes we issued in
June 2020. Overall, funding costs continued to decline during the
second quarter of 2021 as time deposits continue to reprice lower
upon maturity.
“As we anticipated, overall loan growth decreased from the end
of 2020, which is a reflection of how loan growth has a tendency to
ebb and flow over relatively short periods, dependent on economic
and other factors. So far this year, loan production and activity
in our markets has been vigorous, but repayments, including
customers refinancing or selling stabilized projects that
collateralize loans or completing the process of debt forgiveness
for PPP loans, have created significant headwinds. Our pipeline of
loan commitments and unfunded loans remains strong and increased
from the end of the first quarter of 2021.”
Turner added, “Credit quality metrics remained excellent during
the second quarter. At June 30, 2021, excluding FDIC-acquired
assets, non-performing assets were $5.5 million, a decrease of $1.2
million from March 31, 2021. Non-performing assets to period-end
assets were 0.15% at the end of the second quarter.
Pandemic-related loan modifications totaled $92 million at the end
of June 2021, down from $146 million at the end of March 2021 and
$251 million at December 31, 2020.
“With our favorable credit quality and strong capital position,
we announced that we will redeem $75 million of subordinated notes
in August 2021. These subordinated notes have an interest rate of
5.25% and, since their issuance in 2016, the Company has recorded
annual interest expense of approximately $4.3 million related to
these notes.”
COVID-19 Impact to Our Business and
Response
Great Southern is actively monitoring and responding to the
effects of the COVID-19 pandemic, including the administration of
vaccines in our local markets. As always, the health, safety and
well-being of our customers, associates and communities, while
maintaining uninterrupted service, are the Company’s top
priorities. Centers for Disease Control and Prevention (CDC)
guidelines, as well as directives from federal, state and local
officials, are being closely followed to make informed operational
decisions.
The Company continues to work diligently with its nearly 1,200
associates to enforce the most current health, hygiene and social
distancing practices. A significant number of non-frontline
associates continue to work from home. Teams in nearly every
operational department have been split, with part of each team
working at an off-site disaster recovery facility to promote social
distancing and to avoid service disruptions. To date, there have
been no service disruptions or reductions in staffing. With the
advent of COVID-19 vaccinations in the Company’s markets, plans are
being considered to allow associates working from home or other
sites to return to their normal workplace beginning in the third
quarter of 2021, dependent on health and safety conditions.
As always, customers can conduct their banking business using
the banking center network, online and mobile banking services,
ATMs, Telephone Banking, and online account opening services. As
health conditions in local markets dictate, Great Southern banking
center lobbies are open following social distancing and health
protocols. Great Southern continues to work with customers
experiencing hardships caused by the pandemic. As a resource to
customers, a COVID-19 information center continues to be available
on the Company’s website, www.GreatSouthernBank.com. General
information about the Company’s pandemic response, how to receive
assistance, and how to avoid COVID-19 scams and fraud are
included.
Paycheck Protection Program Loans
Great Southern has actively participated in the PPP through the
SBA. The PPP has been met with very high demand throughout the
country, resulting in a second round of funding in 2021 through an
amendment to the Coronavirus Aid, Relief, and Economic Security Act
(CARES Act). In the earlier round of the PPP, we originated
approximately 1,600 PPP loans totaling approximately $121 million.
As of July 12, 2021, full forgiveness proceeds have been received
from the SBA for 1,578 of these PPP loans totaling approximately
$120 million.
On December 27, 2020, the Economic Aid to Hard-Hit Small
Businesses, Nonprofits and Venues Act authorized the reopening of
the PPP for eligible first-draw and second-draw borrowers which
began on January 19, 2021, and had an original expiration date of
March 31, 2021. On March 30, 2021, the PPP Extension Act of 2021
was signed, extending the PPP an additional two months to May 31,
2021, along with an additional 30-day period for the SBA to process
applications that were still pending as of May 31, 2021. In the
most recent round of the PPP, we funded approximately 1,650 PPP
loans totaling approximately $58 million. As of July 12, 2021, full
forgiveness proceeds have been received from the SBA for 13 of
these PPP loans totaling approximately $2 million.
Great Southern receives fees from the SBA for originating these
loans based on the amount of each loan. At June 30, 2021, remaining
net deferred fees related to PPP loans totaled $3.7 million. The
fees, net of origination costs, are deferred in accordance with
standard accounting practices and will be accreted to interest
income on loans over the contractual life of each loan. These loans
generally have a contractual maturity of two years from origination
date, but may be repaid or forgiven (by the SBA) sooner. If these
loans are repaid or forgiven prior to their contractual maturity
date, the remaining deferred fee for such loan will be accreted to
interest income on loans immediately. We expect a portion of these
remaining net deferred fees will accrete to interest income in the
third and fourth quarters of 2021. In the three and six months
ended June 30, 2021, Great Southern recorded approximately $1.1
million and $2.3 million, respectively, of net deferred fees in
interest income on PPP loans.
Loan Modifications
At June 30, 2021, we had remaining 15 modified commercial loans
with an aggregate principal balance outstanding of $91 million and
30 modified consumer and mortgage loans with an aggregate principal
balance outstanding of $876,000. These balances have decreased from
$233 million and $18 million, respectively, for these loan
categories at December 31, 2020. The loan modifications are within
the guidance provided by the CARES Act, the federal banking
regulatory agencies, the Securities and Exchange Commission and the
Financial Accounting Standards Board (FASB); therefore, they are
not considered troubled debt restructurings. At June 30, 2021, the
largest total modified loans by collateral type were in the
following categories: hotel/motel - $29 million; retail - $22
million; healthcare - $18 million; multifamily - $11 million.
A portion of the loans modified at June 30, 2021, may be further
modified, and new loans may be modified, within the guidance
provided by the CARES Act (and subsequent legislation enacted in
December 2020), the federal banking regulatory agencies, the SEC
and the FASB if a more severe or lengthier deterioration in
economic conditions occurs in future periods.
Selected Financial Data:
(In thousands, except per
share data) |
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
|
2020 |
|
Net interest income |
$ |
44,684 |
|
$ |
43,455 |
|
$ |
88,773 |
|
|
$ |
88,393 |
|
Provision (credit) for credit
losses on loans and unfunded commitments |
|
(1,307 |
) |
|
6,000 |
|
|
(1,681 |
) |
|
|
9,871 |
|
Non-interest income |
|
9,585 |
|
|
8,261 |
|
|
19,321 |
|
|
|
15,627 |
|
Non-interest expense |
|
30,191 |
|
|
29,349 |
|
|
60,512 |
|
|
|
60,163 |
|
Provision for income
taxes |
|
5,271 |
|
|
3,164 |
|
|
10,281 |
|
|
|
5,915 |
|
Net income and net income
available to common shareholders |
$ |
20,114 |
|
$ |
13,203 |
|
$ |
38,982 |
|
|
$ |
28,071 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per diluted common
share |
$ |
1.46 |
|
$ |
0.93 |
|
$ |
2.82 |
|
|
$ |
1.98 |
|
NET INTEREST INCOME
Net interest income for the second quarter of 2021 increased
$1.2 million to $44.7 million, compared to $43.5 million for the
second quarter of 2020. Net interest margin was 3.35%
in the second quarter of 2021, compared to 3.39% in the same period
of 2020, a decrease of four basis points. For the three months
ended June 30, 2021, the net interest margin decreased six basis
points compared to the net interest margin of 3.41% in the three
months ended March 31, 2021. In comparing the 2021 and 2020 second
quarter periods, the average yield on loans decreased 31 basis
points while the average rate on interest-bearing deposits declined
61 basis points. The margin compression resulted from changes in
the asset mix, with average cash equivalents increasing $193
million and average investment securities increasing $27 million.
Without this additional liquidity, the net interest margin would
have been 11 basis points higher. The cost of the subordinated
notes issued in June 2020 also decreased net interest margin by
seven basis points in the quarter ended June 30, 2021 compared to
the quarter ended June 30, 2020. In addition, the yield accretion
on FDIC-acquired loans was eight basis points lower during the
second quarter of 2021 compared to the second quarter of 2020. The
average interest rate spread was 3.18% for the three months ended
June 30, 2021, compared to 3.12% for the three months ended June
30, 2020 and 3.23% for the three months ended March 31, 2021.
Net interest income for the six months ended June 30, 2021
increased $380,000 to $88.8 million compared to $88.4 million for
the six months ended June 30, 2020. Net interest margin was 3.38%
in the six months ended June 30, 2021, compared to 3.61% in the
same period of 2020, a decrease of 23 basis points. The decrease in
the margin comparing the six months ended June 30, 2021 to the six
months ended June 30, 2020, was primarily due to the same factors
as discussed above for the comparison of the current year second
quarter margin to the prior year second quarter margin. The margin
compression primarily resulted from changes in the asset mix, with
average cash equivalents increasing $262 million and average
investment securities increasing $28 million. Without this
additional liquidity, the net interest margin would have been 16
basis points higher. In addition, the yield accretion on
FDIC-acquired loans was 10 basis points lower during the first six
months of 2021 compared to the same period in 2020. The average
interest rate spread was 3.20% for the six months ended June 30,
2021, compared to 3.32% for the six months ended June 30, 2020.
Additionally, the Company’s net interest income included
accretion of net deferred fees related to PPP loans originated in
2020 and 2021. The amount of net deferred fees recognized in
interest income was $1.1 million in the three months ended June 30,
2021 compared to $1.2 million in the three months ended March 31,
2021. The amount of net deferred fees recognized in interest income
was $2.3 million in the six months ended June 30, 2021. No
significant net deferred fees on PPP loans were recognized in
interest income during the six months ended June 30, 2020 as no
loan forgiveness and repayment occurred in that time period.
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 received a payment of $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 interest portion
and net of deferred income taxes, is reflected in the Company’s
stockholders’ equity as Accumulated Other Comprehensive Income and
a portion of it is being accreted to interest income on loans
monthly through the original contractual termination date of
October 6, 2025. The Company recorded interest income related to
the swap of $2.0 million and $2.0 million in the three months ended
June 30, 2021 and 2020, respectively. The Company recorded interest
income related to the swap of $4.0 million and $3.6 million in the
six months ended June 30, 2021 and 2020, respectively. The Company
currently expects to have an amount of eligible variable rate loans
to continue to accrete this interest income 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.
Previously, the Company’s net interest income and margin have
been positively impacted by significant additional yield accretion
recognized in conjunction with updated estimates of the fair value
of the loan pools acquired in its FDIC-assisted transactions. For
each of the loan portfolios acquired, the cash flow estimates
increased during the prior periods, based on payment histories and
reduced credit loss expectations. This resulted in increased income
that has been spread, on a level-yield basis, over the remaining
expected lives of the loan pools (and, therefore, has decreased
over time). Because the balance of these adjustments will be
recognized generally over the remaining lives of the loan pools,
they will impact future periods as well. The remaining accretable
yield adjustment that will affect interest income was $885,000 at
June 30, 2021. Of the remaining adjustments affecting interest
income, we expect to recognize $453,000 of interest income during
the remainder of 2021. As previously noted, we adopted the new
accounting standard related to accounting for credit losses as of
January 1, 2021. With the adoption of this standard, there is no
reclassification of discounts from non-accretable to accretable
subsequent to December 31, 2020. All adjustments made prior to
December 31, 2020 will continue to be accreted to interest
income.
The impact to income of adjustments on all portfolios acquired
in FDIC-assisted transactions for the reporting periods presented
is shown below:
|
Three Months Ended |
|
June 30, 2021 |
|
June 30, 2020 |
|
|
|
(In thousands, except basis points data) |
Impact on net interest income/net interest margin (in basis
points) |
$ |
428 |
4 bps |
|
$ |
1,537 |
12 bps |
|
|
|
Six Months Ended |
|
June 30, 2021 |
|
June 30, 2020 |
|
|
|
(In thousands, except basis points data) |
Impact on net interest income/net interest margin (in basis
points) |
$ |
1,119 |
4 bps |
|
$ |
3,403 |
14 bps |
|
|
For the three months ended June 30, 2021, core net interest
margin, which excludes the impact of the additional yield
accretion, was 3.31%. This was an increase of four basis points
when compared to the core net interest margin of 3.27% for the
three months ended June 30, 2020. For the six months ended June 30,
2021, core net interest margin was 3.34%. This was a decrease of 13
basis points when compared to the core net interest margin of 3.47%
for the six months ended June 30, 2020. The June 30, 2021
three-month and six-month periods includes the full effect of the
interest expense on the subordinated notes issued in June 2020.
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 June 30, 2021, non-interest income
increased $1.3 million to $9.6 million when compared to the quarter
ended June 30, 2020, primarily as a result of the following
items:
- Net gains on loan sales: Net gains on loan sales increased
$772,000 compared to the prior year quarter. The increase was due
to an increase in originations of fixed-rate single-family mortgage
loans during the 2021 period compared to the 2020 period. Fixed
rate single-family mortgage loans originated are generally
subsequently sold in the secondary market. These loan originations
increased substantially when market interest rates decreased to
historically low levels in 2020.
- Point-of-sale and ATM fees: Point-of-sale and ATM fees
increased $967,000 compared to the prior year period. This increase
was primarily due to a reduction in customer usage in the second
quarter of 2020 as the COVID-19 pandemic caused many businesses to
close and large portions of the U. S. population were required to
stay at home for a period of time. In the quarter ended June 30,
2021, debit card and ATM usage by customers was back to normal
levels, and in some cases, increased levels of activity.
- Other income: Other income decreased $740,000 compared to the
prior year quarter. In the 2020 period, the Company recognized
approximately $823,000 of fee income related to newly-originated
interest rate swaps in the Company’s back-to-back swap program with
loan customers and swap counterparties. Fewer of these types of
transactions occurred in the current quarter, resulting in less fee
income.
For the six months ended June 30, 2021, non-interest income
increased $3.7 million to $19.3 million when compared to the six
months ended June 30, 2020, primarily as a result of the following
items:
- Net gains on loan sales: Net gains on loan sales increased $2.9
million compared to the prior year period. The increase was due to
an increase in originations of fixed-rate single-family mortgage
loans during the 2021 period compared to the 2020 period. As noted
above, these loan originations increased substantially when market
interest rates decreased to historically low levels in 2020.
- Point-of-sale and ATM fees: Point-of-sale and ATM fees
increased $1.5 million compared to the prior year period. This
increase was due to the same conditions as noted above.
- Gain (loss) on derivative interest rate products: In the 2021
period, the Company recognized a gain of $295,000 on the change in
fair value of its back-to-back interest rate swaps related to
commercial loans. In the 2020 period, the Company recognized a loss
of $514,000 on the change in fair value of its back-to-back
interest rate swaps related to commercial loans. Generally, as
market interest rates increase, this creates a net increase in the
fair value of these instruments. This is a non-cash item as there
was no required settlement of this amount between the Company and
its swap counterparties.
- Other income: Other income decreased $1.4 million compared to
the prior year period. In the 2020 period, the Company recognized
approximately $1.3 million of fee income related to
newly-originated interest rate swaps in the Company’s back-to-back
swap program with loan customers and swap counterparties, with
fewer of these transactions and related fee income generated in the
current period. The Company also recognized approximately $441,000
in income related to the exit of certain tax credit partnerships
during the six months ended June 30, 2020.
NON-INTEREST EXPENSE
For the quarter ended June 30, 2021, non-interest expense
increased $843,000 to $30.2 million when compared to the quarter
ended June 30, 2020, primarily as a result of the following
item:
- Salaries and employee benefits: Salaries and employee benefits
increased $1.1 million from the prior year quarter. The increase
was primarily due to annual employee compensation merit increases
and increased incentives in the operations and lending areas,
including mortgage lending where new loan originations and sales of
many of these loans increased. In addition, compensation expense
was lower in the 2020 period by approximately $400,000 compared to
the 2021 period as a result of loan origination costs which were
deferred and amortized.
For the six months ended June 30, 2021, non-interest expense
increased $349,000 to $60.5 million when compared to the six months
ended June 30, 2020, primarily as a result of the following
items:
- Insurance: Insurance expense increased $603,000 compared to the
prior year period. This increase was primarily due to an increase
in FDIC deposit insurance premiums. In 2020, the Company had a
credit with the FDIC for a portion of premiums previously paid to
the deposit insurance fund. The remaining deposit insurance fund
credit was utilized in 2020 in addition to $157,000 in premiums
being due for the six months ended June 30, 2020, while the premium
expense was $713,000 in the six months ended June 30, 2021.
- Expense on other real estate owned and repossessions: Expense
on other real estate owned and repossessions decreased $377,000
compared to the prior year period primarily due to sales of most
foreclosed assets and a smaller amount of repossessed automobiles
in the current period, plus higher valuation write-downs of certain
foreclosed assets during the prior year period. During the 2020
period, sales and valuation write-downs of certain foreclosed
assets totaled a net expense of $142,000, while sales and valuation
write-downs in the 2021 period totaled a net gain of $29,000.
The Company’s efficiency ratio for the quarter ended June 30,
2021, was 55.63% compared to 56.75% for the same quarter in 2020.
The efficiency ratio for the six months ended June 30, 2021, was
55.98% compared to 57.84% for the same period in 2020. In the
three- and six-month periods ended June 30, 2021, the improved
efficiency ratio was due to an increase in net interest income and
an increase in non-interest income, partially offset by an increase
in non-interest expense. The Company’s ratio of non-interest
expense to average assets was 2.16% and 2.19% for the three and six
months ended June 30, 2021, respectively, compared to 2.17% and
2.32% for the three and six months ended June 30, 2020. Average
assets for the three months ended June 30, 2021, increased $181.6
million, or 3.4%, from the three months ended June 30, 2020,
primarily due to increases in investment securities and interest
bearing cash equivalents, offset by a decrease in net loans
receivable. Average assets for the six months ended June 30, 2021,
increased $343.6 million, or 6.6%, from the six months ended June
30, 2020, primarily due to increases in loans receivable,
investment securities and interest bearing cash equivalents.
INCOME TAXES
For the three months ended June 30, 2021 and 2020, the Company's
effective tax rate was 20.8% and 19.3%, respectively. For the six
months ended June 30, 2021 and 2020, the Company's effective tax
rate was 20.9% and 17.4%, 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 to 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. The
higher effective tax rate in the 2021 six-month period was due to
higher overall income, lower levels of low income housing tax
credits and less tax-exempt interest income compared to prior
periods. The Company's effective income tax rate is currently
generally expected to remain at or 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 20.0% to 21.0% in future periods.
CAPITAL
As of June 30, 2021, total stockholders’ equity and common
stockholders’ equity were each $629.6 million (11.3% of total
assets), equivalent to a book value of $46.09 per common share.
Total stockholders’ equity and common stockholders’ equity at
December 31, 2020, were each $629.7 million (11.4% of total
assets), equivalent to a book value of $45.79 per common share. At
June 30, 2021, the Company’s tangible common equity to tangible
assets ratio was 11.2%, compared to 11.3% at December 31, 2020.
Included in stockholders’ equity at June 30, 2021 and December 31,
2020, were unrealized gains (net of taxes) on the Company’s
available-for-sale investment securities totaling $15.5 million and
$23.3 million, respectively. This decrease in unrealized gains
primarily resulted from increasing market interest rates during
2021, which decreased the fair value of investment securities.
Also included in stockholders’ equity at June 30, 2021, were
realized gains (net of taxes) on the Company’s cash flow hedge
(interest rate swap), which was terminated in March 2020, totaling
$26.8 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 June 30, 2021, the remaining pre-tax amount to be
recorded in interest income was $34.7 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).
On a preliminary basis, as of June 30, 2021, the Company’s Tier
1 Leverage Ratio was 11.0%, Common Equity Tier 1 Capital Ratio was
13.0%, Tier 1 Capital Ratio was 13.6%, and Total Capital Ratio was
18.1%. On June 30, 2021, and on a preliminary basis, the Bank’s
Tier 1 Leverage Ratio was 11.7%, Common Equity Tier 1 Capital Ratio
was 14.4%, Tier 1 Capital Ratio was 14.4%, and Total Capital Ratio
was 15.6%.
On June 30, 2021, the Company announced its intention to redeem
on August 15, 2021 all of the Company’s outstanding 5.25%
fixed-to-floating rate subordinated notes due August 15, 2026, with
an aggregate principal balance of $75 million. The total redemption
price will be 100% of the aggregate principal balance of the
subordinated notes plus accrued and unpaid interest. The Company
will utilize excess cash on hand for the redemption payment. The
annual combined interest expense and amortization of deferred
issuance costs on these subordinated notes has been approximately
$4.3 million.
During the three months ended June 30, 2021, the Company
repurchased 67,514 shares of its common stock at an average price
of $54.50 and declared a regular quarterly cash dividend of $0.34
per common share, which reduced stockholders’ equity. During the
six months ended June 30, 2021, the Company repurchased 142,379
shares of its common stock at an average price of $52.39 and
declared regular cash dividends of $0.68 per common
share.
LOANS
Total gross loans (including the undisbursed portion of loans),
excluding FDIC-assisted acquired loans and mortgage loans held for
sale, decreased $40.0 million, or 0.8%, from $5.13 billion at
December 31, 2020, to $5.09 billion at June 30, 2021. This decrease
was primarily in construction loans ($41 million), consumer auto
loans ($23 million), and commercial business loans ($65 million).
The decrease in commercial business loans was the result of
repayment of PPP loans. These decreases were offset by increases in
other residential (multi-family) loans ($18 million), single family
real estate loans ($46 million), and commercial real estate loans
($31 million). The FDIC-assisted acquired loan portfolios had net
decreases totaling $7.6 million and $14.3 million during the three
and six months ended June 30, 2021. Outstanding net loan receivable
balances decreased $82.5 million, from $4.30 billion at December
31, 2020 to $4.21 billion at June 30, 2021. 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):
|
|
June2021 |
|
March2021 |
|
December2020 |
|
December2019 |
|
December2018 |
Closed
non-construction loans with unused available lines |
|
|
|
|
|
|
|
|
|
|
Secured by real estate (one- to four-family) |
$ |
173,644 |
$ |
170,353 |
$ |
164,480 |
$ |
155,831 |
$ |
150,948 |
Secured by real estate (not one- to four-family) |
|
20,269 |
|
25,754 |
|
22,273 |
|
19,512 |
|
11,063 |
Not secured by real estate - commercial business |
|
75,476 |
|
71,132 |
|
77,411 |
|
83,782 |
|
87,480 |
|
|
|
|
|
|
|
|
|
|
|
Closed construction
loans with unused available lines |
|
|
|
|
|
|
|
|
|
|
Secured by real estate (one-to four-family) |
|
63,471 |
|
52,653 |
|
42,162 |
|
48,213 |
|
37,162 |
Secured by real estate (not one-to four-family) |
|
847,486 |
|
812,111 |
|
823,106 |
|
798,810 |
|
906,006 |
|
|
|
|
|
|
|
|
|
|
|
Loan commitments not
closed |
|
|
|
|
|
|
|
|
|
|
Secured by real estate (one-to four-family) |
|
66,037 |
|
93,229 |
|
85,917 |
|
69,295 |
|
24,253 |
Secured by real estate (not one-to four-family) |
|
55,216 |
|
50,883 |
|
45,860 |
|
92,434 |
|
104,871 |
Not secured by real estate - commercial business |
|
— |
|
3,119 |
|
699 |
|
— |
|
405 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,301,599 |
$ |
1,279,234 |
$ |
1,261,908 |
$ |
1,267,877 |
$ |
1,322,188 |
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 replaces 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. Our 2020 financial statements were
prepared under the incurred loss methodology standard. Upon
adoption of the CECL accounting standard, we increased the balance
of our allowance for credit losses related to outstanding loans by
$11.6 million and created a liability for potential losses related
to the unfunded portion of our loans and commitments of
approximately $8.7 million. The after-tax effect reduced our
retained earnings by approximately $14.2 million. The adjustment
was based upon the Company’s analysis of current conditions,
assumptions and economic forecasts at January 1, 2021.
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
environmental conditions, such as changes in the national
unemployment rate, commercial real estate price index, housing
price index and national retail sales index.
Worsening economic conditions from the COVID-19 pandemic, higher
inflation or interest rates, 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 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,
on-going correspondence with borrowers and problem loan work-outs.
Management determines which loans are potentially uncollectible, or
represent a greater risk of loss, and makes additional provisions
to expense, if necessary, to maintain the allowance at a
satisfactory level.
During the quarter ended June 30, 2021, the Company recorded a
negative provision expense of $1.0 million on its portfolio of
outstanding loans, compared to a $6.0 million provision expense
recorded for the quarter ended June 30, 2020. During the six months
ended June 30, 2021, the Company recorded a negative provision
expense of $700,000 on its portfolio of outstanding loans, compared
to a $9.9 million provision expense recorded for the six months
ended June 30, 2020. In the quarter ended June 30, 2021, the
Company experienced net charge-offs of $100,000. Total net
charge-offs were $127,000 for the three months ended June 30, 2020.
Total net charge-offs were $36,000 and $365,000 for the six months
ended June 30, 2021 and 2020, respectively. The provision for
losses on unfunded commitments for the three and six months ended
June 30, 2021 was a credit of $307,000 and $981,000, respectively,
as the level and mix of unfunded commitments resulted in a decrease
in the required reserve for such potential losses. General market
conditions and unique circumstances related to specific industries
and individual projects contributed to the level of provisions and
charge-offs. In 2020, due to the COVID-19 pandemic and its effects
on the overall economy and unemployment, the Company increased its
provision for credit losses and increased its allowance for credit
losses, even though actual realized net charge-offs were very
low.
The Bank’s allowance for credit losses as a percentage of total
loans was 1.56%, 1.32% and 1.56% at June 30, 2021, December 31,
2020 and March 31, 2021, respectively. Prior to January 1, 2021,
the ratio excluded the FDIC-assisted acquired loans. Management
considers the allowance for credit losses adequate to cover losses
inherent in the Bank’s loan portfolio at June 30, 2021, 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 loan loss
provisions could be required, thereby adversely affecting the
Company’s future results of operations and financial condition.
ASSET QUALITY
Prior to adoption of the CECL accounting standard on January 1,
2021, FDIC-acquired non-performing assets, including foreclosed
assets and potential problem loans, were not included in the totals
or in the discussion of non-performing loans, potential problem
loans and foreclosed assets. These assets were initially recorded
at their estimated fair values as of their acquisition dates and
accounted for in pools. The loan pools were analyzed rather than
the individual loans. The performance of the loan pools acquired in
each of the Company’s five FDIC-assisted transactions has been
better than expectations as of the acquisition dates. In the tables
below, FDIC-acquired assets are included in their particular
collateral categories and then the total FDIC-acquired assets are
subtracted from the total balances.
At June 30, 2021, non-performing assets, excluding all
FDIC-acquired assets, were $5.5 million, an increase of $1.7
million from $3.8 million at December 31, 2020, and a decrease of
$1.2 million from $6.7 million at March 31, 2021. Non-performing
assets as a percentage of total assets were 0.10% at June 30, 2021,
compared to 0.07% at December 31, 2020 and 0.12% at March 31, 2021.
As a result of changes in balances and composition of the loan
portfolio, 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, 2020 and March 31, 2021, and excluding
all FDIC-acquired loans, non-performing loans increased $2.4
million and decreased $584,000, respectively, to $5.4 million at
June 30, 2021, and foreclosed assets decreased $643,000 and
$570,000, respectively, to $134,000 at June 30, 2021. Including all
FDIC-acquired loans, when compared to December 31, 2020 and March
31, 2021, non-performing loans increased $939,000 and decreased
$1.7 million, respectively, to $7.8 million at June 30, 2021, and
foreclosed assets decreased $474,000 and $570,000, respectively, to
$749,000 at June 30, 2021. Non-performing commercial real estate
loans comprised $3.3 million, or 42.3%, of the total non-performing
loans at June 30, 2021, a decrease of $86,000 from March 31, 2021.
Non-performing one- to four-family residential loans comprised $3.1
million, or 39.4%, of the total non-performing loans at June 30,
2021, a decrease of $1.1 million from March 31, 2021. The majority
of the non-performing FDIC-acquired loans are in the one- to
four-family category. Non-performing consumer loans comprised
$869,000, or 11.1%, of the total non-performing loans at June 30,
2021, a decrease of $147,000 from March 31, 2021. Non-performing
construction and land development loans comprised $468,000, or
6.0%, of the total non-performing loans at June 30, 2021, a
decrease of $154,000 from March 31, 2021. Non-performing commercial
business loans comprised $99,000, or 1.2%, of the total
non-performing loans at June 30, 2021, a decrease of $7,000 from
March 31, 2021.
Compared to December 31, 2020 and March 31, 2021, and excluding
all FDIC-acquired loans, potential problem loans decreased $985,000
and $265,000, respectively, to $3.3 million at June 30, 2021. Due
to the impact on economic conditions from COVID-19, it is possible
that we could experience an increase in potential problem loans in
the remainder of 2021. As noted, we experienced an increased level
of loan modifications in late March through June 2020; however,
total loan modifications were much lower at December 31, 2020, and
decreased further at June 30, 2021. In accordance with the CARES
Act and guidance from the banking regulatory agencies, we made
certain short-term modifications to loan terms to help our
customers navigate through the current pandemic situation. Although
loan modifications were made, they did not automatically result in
these loans being classified as troubled debt restructurings,
potential problem loans or non-performing loans. If more
severe or lengthier negative impacts of the COVID-19 pandemic
occur or the effects of the SBA loan programs and
other loan and stimulus programs do not enable companies and
individuals to completely recover financially, this could
result in additional and/or longer-term modifications, which
may be deemed to be troubled debt restructurings, additional
potential problem loans and/or additional non-performing loans.
Further actions on our part, including additions to the allowance
for credit losses, could result.
Activity in the non-performing loans categories during the
quarter ended June 30, 2021, was as follows:
|
|
BeginningBalance,April
1 |
|
|
Additionsto
Non-Performing |
|
|
Removedfrom
Non-Performing |
|
|
Transfersto
PotentialProblemLoans |
|
|
Transfers
toForeclosedAssets
andRepossessions |
|
|
Charge-Offs |
|
|
Payments |
|
|
EndingBalance,June
30 |
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One- to four-family construction |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
Subdivision construction |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Land development |
|
622 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(154) |
|
|
— |
|
|
468 |
Commercial construction |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
One- to four-family
residential |
|
4,223 |
|
|
142 |
|
|
(528) |
|
|
— |
|
|
— |
|
|
(57) |
|
|
(699) |
|
|
3,081 |
Other residential |
|
185 |
|
|
— |
|
|
(185) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Commercial real estate |
|
3,394 |
|
|
— |
|
|
(86) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
3,308 |
Commercial business |
|
106 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(7) |
|
|
99 |
Consumer |
|
1,016 |
|
|
71 |
|
|
(52) |
|
|
— |
|
|
(32) |
|
|
(52) |
|
|
(82) |
|
|
869 |
Total non-performing
loans |
|
9,546 |
|
|
213 |
|
|
(851) |
|
|
— |
|
|
(32) |
|
|
(263) |
|
|
(788) |
|
|
7,825 |
Less: FDIC-acquired loans |
|
3,576 |
|
|
— |
|
|
(742) |
|
|
— |
|
|
— |
|
|
(29) |
|
|
(366) |
|
|
2,439 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-performing loans net
of FDIC-acquired loans |
$ |
5,970 |
|
$ |
213 |
|
$ |
(109) |
|
$ |
— |
|
$ |
(32) |
|
$ |
(234) |
|
$ |
(422) |
|
$ |
5,386 |
At June 30, 2021, the non-performing one- to four-family
residential category included 52 loans, three of which were added
during the current quarter. The largest relationship in the
category totaled $340,000, or 11.0% of the total category. The
non-performing commercial real estate category included five loans,
none of which were added during the current quarter. The largest
relationship in the category, which totaled $2.4 million, or 71.2%
of the total category, was added during the first quarter of 2021
and is collateralized by an office building in the Chicago, Ill.,
area. The non-performing consumer category included 47 loans, seven
of which were added during the current quarter, and the majority of
which are indirect used automobile loans. The non-performing land
development category consisted of one loan added during the first
quarter of 2021, which totaled $468,000 and is collateralized by
unimproved zoned vacant ground in southern Illinois.
Activity in the potential problem loans category during the
quarter ended June 30, 2021, was as follows:
|
|
BeginningBalance,April
1 |
|
|
Additions
toPotentialProblem |
|
|
RemovedfromPotentialProblem |
|
|
Transfersto
Non-Performing |
|
|
Transfers
toForeclosedAssets
andRepossessions |
|
|
Charge-Offs |
|
|
Payments |
|
|
EndingBalance,June
30 |
|
|
|
|
|
(In thousands) |
|
|
|
One- to four-family construction |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
Subdivision construction |
|
19 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(2) |
|
|
17 |
Land development |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Commercial construction |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
One- to
four-family residential |
|
2,109 |
|
|
— |
|
|
— |
|
|
(52) |
|
|
— |
|
|
— |
|
|
(252) |
|
|
1,805 |
Other residential |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Commercial real estate |
|
2,514 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(37) |
|
|
2,477 |
Commercial business |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Consumer |
|
447 |
|
|
52 |
|
|
— |
|
|
— |
|
|
— |
|
|
(17) |
|
|
(86) |
|
|
396 |
Total potential problem
loans |
|
5,089 |
|
|
52 |
|
|
— |
|
|
(52) |
|
|
— |
|
|
(17) |
|
|
(377) |
|
|
4,695 |
Less: FDIC-acquired loans |
|
1,486 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(129) |
|
|
1,357 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total potential problem loans
net of FDIC-acquired loans |
$ |
3,603 |
|
$ |
52 |
|
$ |
— |
|
$ |
(52) |
|
$ |
— |
|
$ |
(17) |
|
$ |
(248) |
|
$ |
3,338 |
At June 30, 2021, the commercial real estate category of
potential problem loans included three loans, none of which were
added during the current quarter. The largest relationship in this
category (added during 2018), which totaled $1.7 million, or 70.3%
of the total category, is collateralized by a mixed use commercial
retail building. Payments were current on this relationship at June
30, 2021. The one- to four-family residential category of potential
problem loans included 29 loans, none of which were added during
the current quarter. The largest relationship in this category
totaled $314,000, or 17.4% of the total category. The consumer
category of potential problem loans included 32 loans, five of
which were added during the current quarter, and the majority of
which are indirect used automobile loans.
Activity in foreclosed assets and repossessions during the
quarter ended June 30, 2021, excluding $284,000 in properties which
were not acquired through foreclosure, was as follows:
|
|
BeginningBalance,April
1 |
|
|
Additions |
|
|
ORE
andRepossessionSales |
|
|
CapitalizedCosts |
|
|
ORE
andRepossessionWrite-Downs |
|
|
EndingBalance,June
30 |
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One-to four-family
construction |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
Subdivision construction |
|
169 |
|
|
— |
|
|
(169 |
) |
|
— |
|
|
— |
|
|
— |
Land development |
|
682 |
|
|
— |
|
|
(250 |
) |
|
— |
|
|
— |
|
|
432 |
Commercial construction |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
One- to four-family
residential |
|
293 |
|
|
— |
|
|
(110 |
) |
|
— |
|
|
— |
|
|
183 |
Other residential |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Commercial real estate |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Commercial business |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
Consumer |
|
175 |
|
|
155 |
|
|
(196 |
) |
|
— |
|
|
— |
|
|
134 |
Total foreclosed assets and
repossessions |
|
1,319 |
|
|
155 |
|
|
(725 |
) |
|
— |
|
|
— |
|
|
749 |
Less: FDIC-acquired
assets |
|
615 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total foreclosed assets and
repossessions net of FDIC-acquired assets |
$ |
704 |
|
$ |
155 |
|
$ |
(725 |
) |
$ |
— |
|
$ |
— |
|
$ |
134 |
At June 30, 2021, the land development category of foreclosed
assets consisted of one property in central Iowa (this was an
FDIC-acquired asset), which was added prior to 2021. The one- to
four-family residential category of foreclosed assets consisted of
two properties (both of which were FDIC-acquired assets), both of
which were added during the three months ended March 31, 2021. The
amount of additions and sales in the consumer category are due to
the volume of repossessions of automobiles, which generally are
subject to a shorter repossession process. During the three months
ended June 30, 2021, the Company sold its remaining foreclosed real
estate assets, other than the three FDIC-acquired properties
discussed here.
BUSINESS INITIATIVES
The Company’s banking center network continues to evolve. In the
Joplin, Missouri, market, the Company purchased a banking facility
in the fourth quarter of 2019 vacated by another financial
institution, which included a contractual black-out period that
ended in April 2021. A third party vendor has been engaged by the
Company to redesign this facility as a “bank of the future”
prototype to incorporate evolving customer preferences. Variations
of this prototype design may be utilized in other select banking
centers in the Company’s footprint in the future. The Company
expects the new office in Joplin to open on September 20, 2021,
whereupon the nearby leased banking center at 1710 E. 32nd Street
will be consolidated into this new office. There are two banking
centers currently serving the Joplin market.
On June 30, 2021, the Company notified holders that it will
redeem on August 15, 2021, all of the Company’s outstanding 5.25%
Fixed-to-Floating Rate Subordinated Notes (due August 15, 2026)
having an aggregate principal amount of $75 million, in accordance
with the terms of the Subordinated Notes. The Company will use
excess cash on hand for the redemption payment. For more
information, please see the Capital section of this news
release.
The Company’s Chief Operating Officer, Doug Marrs, retired from
the Company on July 6, 2021. Marrs joined Great Southern in 1996,
with his banking career spanning 43 years. During his tenure at
Great Southern, the Company grew from less than $1 billion in
assets with operations primarily in the southwest Missouri region,
to $5.6 billion in assets with operations in eleven states. Marrs
announced his retirement more than a year ago to ensure a smooth
management transition. His successor, Mark Maples, is a banking
veteran with 39 years of banking experience, 16 years of which have
been with Great Southern.
The Company will host a conference call on Thursday, July 22,
2021, at 2:00 p.m. Central Time to discuss second quarter 2021
preliminary earnings. Individuals interested in listening to the
conference call may dial 1.833.832.5121 and enter the passcode
9585774. The call will be available live or in a recorded version
at the Company’s Investor Relations website,
http://investors.greatsouthernbank.com.
Headquartered in Springfield, Mo., Great Southern offers a broad
range of banking services to customers. The Company operates 94
retail banking centers in Missouri, Iowa, Kansas, Minnesota,
Arkansas and Nebraska and commercial lending offices in Atlanta,
Chicago, Dallas, Denver, Omaha, Neb., and Tulsa, Okla. 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
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. The novel coronavirus
disease, or COVID-19, pandemic has adversely affected the Company,
its customers, counterparties, employees, and third-party service
providers, and the ultimate extent of the impacts on the Company’s
business, financial position, results of operations, liquidity, and
prospects is uncertain. While general business and economic
conditions have recently improved, increases in unemployment rates,
or turbulence in domestic or global financial markets could
adversely affect the Company’s revenues and the values of its
assets and liabilities, reduce the availability of funding, lead to
a tightening of credit, and further increase stock price
volatility. In addition, changes to statutes, regulations, or
regulatory policies or practices as a result of, or in response to,
COVID-19, could affect the Company in substantial and unpredictable
ways.
Other 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) fluctuations in interest
rates; (iv) 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; (v) the possibility of impairments of
securities held in the Company's investment portfolio; (vi) the
Company's ability to access cost-effective funding; (vii)
fluctuations in real estate values and both residential and
commercial real estate market conditions; (viii) the ability to
adapt successfully to technological changes to meet customers'
needs and developments in the marketplace; (ix) 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; (x) legislative or regulatory changes that adversely
affect the Company's business, including, without limitation, the
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
and its implementing regulations, the overdraft protection
regulations and customers' responses thereto and the Tax Cut and
Jobs Act; (xi) changes in accounting policies and practices or
accounting standards; (xii) monetary and fiscal policies of the
Federal Reserve Board and the U.S. Government and other
governmental initiatives affecting the financial services industry;
(xiii) 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; (xiv) costs and effects of litigation, including
settlements and judgments; (xv) competition; (xvi) uncertainty
regarding the future of LIBOR and potential replacement indexes;
and (xvii) 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 from time
to time in documents filed or furnished by the Company with the SEC
could affect the Company's financial performance and could 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 six months ended June 30, 2021 and 2020, and the three months
ended March 31, 2021, are not necessarily indicative of the results
of operations which may be expected for any future period.
|
|
June 30, |
|
|
December 31, |
|
|
2021 |
|
|
2020 |
Selected Financial Condition Data: |
(In thousands) |
|
|
|
|
|
|
Total assets |
$ |
5,577,582 |
|
$ |
5,526,420 |
Loans receivable, gross |
|
4,291,648 |
|
|
4,361,807 |
Allowance for credit losses |
|
66,602 |
|
|
55,743 |
Other real estate owned, net |
|
1,033 |
|
|
1,877 |
Available-for-sale securities, at fair value |
|
450,840 |
|
|
414,933 |
Deposits |
|
4,566,353 |
|
|
4,516,903 |
Total borrowings |
|
334,087 |
|
|
339,863 |
Total common stockholders’ equity |
|
629,557 |
|
|
629,741 |
Non-performing assets, excluding FDIC-acquired assets |
|
5,520 |
|
|
3,820 |
Non-performing FDIC-acquired assets |
|
3,054 |
|
|
4,289 |
|
|
Three Months Ended |
|
Six Months Ended |
|
|
Three MonthsEnded |
|
|
June 30, |
|
|
June 30, |
|
|
March 31, |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
(In thousands) |
Selected Operating
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
$ |
50,452 |
|
$ |
54,011 |
|
$ |
101,085 |
|
$ |
111,485 |
|
$ |
50,633 |
|
Interest expense |
|
5,768 |
|
|
10,556 |
|
|
12,312 |
|
|
23,092 |
|
|
6,544 |
|
Net interest income |
|
44,684 |
|
|
43,455 |
|
|
88,773 |
|
|
88,393 |
|
|
44,089 |
|
Provision (credit) for credit losses on loans and unfunded
commitments |
|
(1,307 |
) |
|
6,000 |
|
|
(1,681 |
) |
|
9,871 |
|
|
(374 |
) |
Non-interest income |
|
9,585 |
|
|
8,261 |
|
|
19,321 |
|
|
15,627 |
|
|
9,736 |
|
Non-interest expense |
|
30,191 |
|
|
29,349 |
|
|
60,512 |
|
|
60,163 |
|
|
30,321 |
|
Provision for income taxes |
|
5,271 |
|
|
3,164 |
|
|
10,281 |
|
|
5,915 |
|
|
5,010 |
|
Net income and net income available to common shareholders |
$ |
20,114 |
|
$ |
13,203 |
|
$ |
38,982 |
|
$ |
28,071 |
|
$ |
18,868 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At or For the ThreeMonths
Ended |
|
At or For the SixMonths
Ended |
|
At or For the Three Months Ended |
|
June 30, |
|
June 30, |
|
March 31, |
|
|
2021 |
|
|
2020 |
|
|
|
2021 |
|
|
2020 |
|
|
|
2021 |
|
|
(Dollars in thousands, except per share data) |
Per Common
Share: |
|
|
|
|
|
|
|
Net income (fully diluted) |
$ |
1.46 |
|
$ |
0.93 |
|
|
$ |
2.82 |
|
$ |
1.98 |
|
|
$ |
1.36 |
|
Book value |
$ |
46.09 |
|
$ |
44.50 |
|
|
$ |
46.09 |
|
$ |
44.50 |
|
|
$ |
44.65 |
|
|
|
|
|
|
|
|
|
Earnings Performance Ratios: |
|
|
|
|
|
|
|
Annualized return on average assets |
|
1.44 |
% |
|
0.98 |
% |
|
|
1.41 |
% |
|
1.08 |
% |
|
|
1.38 |
% |
Annualized return on average common stockholders’ equity |
|
12.84 |
% |
|
8.45 |
% |
|
|
12.51 |
% |
|
9.18 |
% |
|
|
12.18 |
% |
Net interest margin |
|
3.35 |
% |
|
3.39 |
% |
|
|
3.38 |
% |
|
3.61 |
% |
|
|
3.41 |
% |
Average interest rate spread |
|
3.18 |
% |
|
3.12 |
% |
|
|
3.20 |
% |
|
3.32 |
% |
|
|
3.23 |
% |
Efficiency ratio |
|
55.63 |
% |
|
56.75 |
% |
|
|
55.98 |
% |
|
57.84 |
% |
|
|
56.33 |
% |
Non-interest expense to average total assets |
|
2.16 |
% |
|
2.17 |
% |
|
|
2.19 |
% |
|
2.32 |
% |
|
|
2.22 |
% |
|
|
|
|
|
|
|
|
Asset Quality
Ratios: |
|
|
|
|
|
|
|
Allowance for credit losses to period-end loans (1) |
|
1.56 |
% |
|
1.14 |
% |
|
|
1.56 |
% |
|
1.14 |
% |
|
|
1.56 |
% |
Non-performing assets to period-end assets (1) |
|
0.15 |
% |
|
0.14 |
% |
|
|
0.15 |
% |
|
0.14 |
% |
|
|
0.19 |
% |
Non-performing loans to period-end loans (1) |
|
0.18 |
% |
|
0.12 |
% |
|
|
0.18 |
% |
|
0.12 |
% |
|
|
0.22 |
% |
Annualized net charge-offs (recoveries) to average loans |
|
0.01 |
% |
|
0.01 |
% |
|
|
0.00 |
% |
|
0.02 |
% |
|
|
(0.01 |
)% |
__________________ |
|
|
|
|
|
|
|
(1) Prior to January
1, 2021, these ratios excluded the FDIC-assisted acquired
loans. |
|
Great Southern Bancorp, Inc. and
SubsidiariesConsolidated Statements of Financial
Condition(In thousands, except number of
shares)
|
|
June 30,2021 |
|
|
December 31,2020 |
|
|
March 31,2021 |
|
|
|
(In thousands) |
|
Assets |
|
|
|
|
|
|
|
|
|
Cash |
$ |
98,869 |
|
$ |
92,403 |
|
$ |
95,102 |
|
Interest-bearing deposits in other financial institutions |
|
582,935 |
|
|
471,326 |
|
|
517,454 |
|
Cash and cash equivalents |
|
681,804 |
|
|
563,729 |
|
|
612,556 |
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale securities |
|
450,840 |
|
|
414,933 |
|
|
457,668 |
|
Mortgage loans held for sale |
|
18,870 |
|
|
17,780 |
|
|
30,492 |
|
Loans receivable (1), net of allowance for credit losses of $66,602
– June 2021; $55,743 – December 2020; $67,702 – March 2021 |
|
4,214,267 |
|
|
4,296,804 |
|
|
4,285,737 |
|
Interest receivable |
|
11,966 |
|
|
12,793 |
|
|
13,027 |
|
Prepaid expenses and other assets |
|
42,327 |
|
|
58,889 |
|
|
43,009 |
|
Other real estate owned and repossessions (2), net |
|
1,033 |
|
|
1,877 |
|
|
1,851 |
|
Premises and equipment, net |
|
136,246 |
|
|
139,170 |
|
|
137,684 |
|
Goodwill and other intangible assets |
|
6,397 |
|
|
6,944 |
|
|
6,655 |
|
Federal Home Loan Bank stock and other interest earning assets |
|
6,755 |
|
|
9,806 |
|
|
6,655 |
|
Current and deferred income taxes |
|
7,077 |
|
|
3,695 |
|
|
8,436 |
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
$ |
5,577,582 |
|
$ |
5,526,420 |
|
$ |
5,603,770 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Deposits |
$ |
4,566,353 |
|
$ |
4,516,903 |
|
$ |
4,626,936 |
|
Securities sold under reverse repurchase agreements with
customers |
|
158,367 |
|
|
164,174 |
|
|
140,666 |
|
Short-term borrowings |
|
1,183 |
|
|
1,518 |
|
|
2,636 |
|
Subordinated debentures issued to capital trust |
|
25,774 |
|
|
25,774 |
|
|
25,774 |
|
Subordinated notes |
|
148,763 |
|
|
148,397 |
|
|
148,580 |
|
Accrued interest payable |
|
2,256 |
|
|
2,594 |
|
|
2,444 |
|
Advances from borrowers for taxes and insurance |
|
8,728 |
|
|
7,536 |
|
|
7,909 |
|
Accounts payable and accrued expenses |
|
28,892 |
|
|
29,783 |
|
|
29,351 |
|
Liability for unfunded commitments |
|
7,709 |
|
|
— |
|
|
8,017 |
|
Total Liabilities |
|
4,948,025 |
|
|
4,896,679 |
|
|
4,992,313 |
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
Equity |
|
|
|
|
|
|
|
|
|
Capital stock |
|
|
|
|
|
|
|
|
|
Preferred stock, $.01 par value; authorized 1,000,000 shares;
issued and outstanding June 2021, December 2020 and March 2021 -0-
shares |
|
— |
|
|
— |
|
|
— |
|
Common stock, $.01 par value; authorized 20,000,000 shares; issued
and outstanding June 2021 – 13,659,357 shares; December 2020 –
13,752,605 shares; March 2021 – 13,693,644 shares |
|
137 |
|
|
138 |
|
|
137 |
|
Additional paid-in capital |
|
36,880 |
|
|
35,004 |
|
|
35,661 |
|
Retained earnings |
|
550,301 |
|
|
541,448 |
|
|
537,969 |
|
Accumulated other comprehensive gain |
|
42,239 |
|
|
53,151 |
|
|
37,690 |
|
Total Stockholders’ Equity |
|
629,557 |
|
|
629,741 |
|
|
611,457 |
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders’ Equity |
$ |
5,577,582 |
|
$ |
5,526,420 |
|
$ |
5,603,770 |
|
(1) |
At June 30, 2021, December 31, 2020 and March 31, 2021, includes
loans totaling $84.4 million, $98.6 million and $91.9 million,
respectively, which were acquired in FDIC-assisted transactions and
were accounted for under ASC 310-30 prior to January 1, 2021. |
(2) |
At June 30, 2021, December 31, 2020 and March 31, 2021, includes
foreclosed assets, net of discounts, totaling $615,000, $446,000
and $615,000, respectively, which were acquired in FDIC-assisted
transactions. In addition, June 30, 2021, December 31, 2020 and
March 31, 2021, includes $284,000, $654,000 and $532,000,
respectively, of properties which were not acquired through
foreclosure, but are held for sale. |
|
|
Great Southern Bancorp, Inc. and
SubsidiariesConsolidated Statements of
Income(In thousands, except per share
data)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
Three Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
March 31, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
Interest
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans |
$ |
47,360 |
|
$ |
50,848 |
|
$ |
95,069 |
|
$ |
104,978 |
|
$ |
47,709 |
|
Investment securities and other |
|
3,092 |
|
|
3,163 |
|
|
6,016 |
|
|
6,507 |
|
|
2,924 |
|
|
|
50,452 |
|
|
54,011 |
|
|
101,085 |
|
|
111,485 |
|
|
50,633 |
|
Interest
Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
3,457 |
|
|
9,041 |
|
|
7,679 |
|
|
19,618 |
|
|
4,222 |
|
Short-term borrowings and repurchase agreements |
|
10 |
|
|
10 |
|
|
19 |
|
|
659 |
|
|
9 |
|
Subordinated debentures issued to capital trust |
|
113 |
|
|
167 |
|
|
226 |
|
|
383 |
|
|
113 |
|
Subordinated notes |
|
2,188 |
|
|
1,338 |
|
|
4,388 |
|
|
2,432 |
|
|
2,200 |
|
|
|
5,768 |
|
|
10,556 |
|
|
12,312 |
|
|
23,092 |
|
|
6,544 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest
Income |
|
44,684 |
|
|
43,455 |
|
|
88,773 |
|
|
88,393 |
|
|
44,089 |
|
Provision (Credit) for
Credit Losses on Loans |
|
(1,000 |
) |
|
6,000 |
|
|
(700 |
) |
|
9,871 |
|
|
300 |
|
Provision (Credit) for
Unfunded Commitments |
|
(307 |
) |
|
— |
|
|
(981 |
) |
|
— |
|
|
(674 |
) |
Net Interest Income
After Provision (Credit) for Credit Losses and Provision (Credit)
for Unfunded Commitments |
|
45,991 |
|
|
37,455 |
|
|
90,454 |
|
|
78,522 |
|
|
44,463 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions |
|
370 |
|
|
176 |
|
|
652 |
|
|
442 |
|
|
282 |
|
Overdraft and Insufficient funds fees |
|
1,528 |
|
|
1,136 |
|
|
2,972 |
|
|
3,077 |
|
|
1,444 |
|
POS and ATM fee income and service charges |
|
3,971 |
|
|
3,004 |
|
|
7,329 |
|
|
5,821 |
|
|
3,358 |
|
Net gains on loan sales |
|
2,613 |
|
|
1,841 |
|
|
5,301 |
|
|
2,430 |
|
|
2,688 |
|
Late charges and fees on loans |
|
358 |
|
|
468 |
|
|
659 |
|
|
824 |
|
|
301 |
|
Net realized gains on sales of available-for-sale securities |
|
— |
|
|
78 |
|
|
— |
|
|
78 |
|
|
— |
|
Gain (loss) on derivative interest rate products |
|
(179 |
) |
|
(106 |
) |
|
295 |
|
|
(514 |
) |
|
474 |
|
Other income |
|
924 |
|
|
1,664 |
|
|
2,113 |
|
|
3,469 |
|
|
1,189 |
|
|
|
9,585 |
|
|
8,261 |
|
|
19,321 |
|
|
15,627 |
|
|
9,736 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest
Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
17,934 |
|
|
16,830 |
|
|
35,054 |
|
|
34,999 |
|
|
17,120 |
|
Net occupancy and equipment expense |
|
6,706 |
|
|
6,707 |
|
|
13,768 |
|
|
13,473 |
|
|
7,062 |
|
Postage |
|
750 |
|
|
777 |
|
|
1,628 |
|
|
1,546 |
|
|
878 |
|
Insurance |
|
759 |
|
|
534 |
|
|
1,519 |
|
|
916 |
|
|
760 |
|
Advertising |
|
605 |
|
|
437 |
|
|
1,190 |
|
|
1,057 |
|
|
585 |
|
Office supplies and printing |
|
161 |
|
|
301 |
|
|
438 |
|
|
535 |
|
|
277 |
|
Telephone |
|
868 |
|
|
1,005 |
|
|
1,749 |
|
|
1,917 |
|
|
881 |
|
Legal, audit and other professional fees |
|
531 |
|
|
664 |
|
|
1,178 |
|
|
1,262 |
|
|
647 |
|
Expense on other real estate and repossessions |
|
102 |
|
|
268 |
|
|
370 |
|
|
747 |
|
|
268 |
|
Partnership tax credit investment amortization |
|
25 |
|
|
— |
|
|
50 |
|
|
— |
|
|
25 |
|
Acquired deposit intangible asset amortization |
|
258 |
|
|
289 |
|
|
547 |
|
|
577 |
|
|
289 |
|
Other operating expenses |
|
1,492 |
|
|
1,537 |
|
|
3,021 |
|
|
3,134 |
|
|
1,529 |
|
|
|
30,191 |
|
|
29,349 |
|
|
60,512 |
|
|
60,163 |
|
|
30,321 |
|
Income Before Income
Taxes |
|
25,385 |
|
|
16,367 |
|
|
49,263 |
|
|
33,986 |
|
|
23,878 |
|
Provision for Income
Taxes |
|
5,271 |
|
|
3,164 |
|
|
10,281 |
|
|
5,915 |
|
|
5,010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income and Net
Income Available to Common
Shareholders |
$ |
20,114 |
|
$ |
13,203 |
|
$ |
38,982 |
|
$ |
28,071 |
|
$ |
18,868 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Common
Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.47 |
|
$ |
0.94 |
|
$ |
2.84 |
|
$ |
1.99 |
|
$ |
1.38 |
|
Diluted |
$ |
1.46 |
|
$ |
0.93 |
|
$ |
2.82 |
|
$ |
1.98 |
|
$ |
1.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends Declared Per
Common Share |
$ |
0.34 |
|
$ |
0.34 |
|
$ |
0.68 |
|
$ |
1.68 |
|
$ |
0.34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 $2.5 million and $1.5
million for the three months ended June 30, 2021 and 2020,
respectively. Net fees included in interest income were $5.0
million and $2.6 million for the six months ended June 30, 2021 and
2020, respectively. Tax-exempt income was not calculated on a tax
equivalent basis. The table does not reflect any effect of income
taxes.
|
June 30, 2021(1) |
|
|
|
Three Months EndedJune 30,
2021 |
|
|
Three Months EndedJune 30,
2020 |
|
|
|
|
|
|
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 |
3.44 |
% |
|
$ |
675,562 |
|
$ |
6,361 |
|
3.78 |
% |
|
$ |
652,281 |
|
$ |
7,432 |
|
4.58 |
% |
Other residential |
4.23 |
|
|
|
1,017,578 |
|
|
11,216 |
|
4.42 |
|
|
|
936,541 |
|
|
10,940 |
|
4.70 |
|
Commercial real estate |
4.23 |
|
|
|
1,580,335 |
|
|
16,857 |
|
4.28 |
|
|
|
1,533,078 |
|
|
17,390 |
|
4.56 |
|
Construction |
4.18 |
|
|
|
580,277 |
|
|
6,529 |
|
4.51 |
|
|
|
636,914 |
|
|
7,612 |
|
4.81 |
|
Commercial business |
3.87 |
|
|
|
291,902 |
|
|
3,545 |
|
4.87 |
|
|
|
340,872 |
|
|
3,361 |
|
3.97 |
|
Other loans |
4.93 |
|
|
|
222,004 |
|
|
2,644 |
|
4.78 |
|
|
|
293,432 |
|
|
3,891 |
|
5.33 |
|
Industrial revenue bonds |
4.45 |
|
|
|
14,509 |
|
|
208 |
|
5.74 |
|
|
|
9,757 |
|
|
222 |
|
9.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans receivable |
4.34 |
|
|
|
4,382,167 |
|
|
47,360 |
|
4.33 |
|
|
|
4,402,875 |
|
|
50,848 |
|
4.64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities |
2.65 |
|
|
|
459,959 |
|
|
2,961 |
|
2.58 |
|
|
|
433,410 |
|
|
3,082 |
|
2.86 |
|
Other interest-earning
assets |
0.15 |
|
|
|
514,681 |
|
|
131 |
|
0.10 |
|
|
|
321,414 |
|
|
81 |
|
0.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning assets |
3.73 |
|
|
|
5,356,807 |
|
|
50,452 |
|
3.78 |
|
|
|
5,157,699 |
|
|
54,011 |
|
4.21 |
|
Non-interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
99,333 |
|
|
|
|
|
|
|
|
97,468 |
|
|
|
|
|
|
Other non-earning assets |
|
|
|
|
128,702 |
|
|
|
|
|
|
|
|
148,031 |
|
|
|
|
|
|
Total assets |
|
|
|
$ |
5,584,842 |
|
|
|
|
|
|
|
$ |
5,403,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand and savings |
0.14 |
|
|
$ |
2,312,284 |
|
|
1,038 |
|
0.18 |
|
|
$ |
1,838,077 |
|
|
1,862 |
|
0.41 |
|
Time deposits |
0.74 |
|
|
|
1,212,900 |
|
|
2,419 |
|
0.80 |
|
|
|
1,789,349 |
|
|
7,179 |
|
1.61 |
|
Total deposits |
0.34 |
|
|
|
3,525,184 |
|
|
3,457 |
|
0.39 |
|
|
|
3,627,426 |
|
|
9,041 |
|
1.00 |
|
Short-term borrowings and repurchase agreements |
0.03 |
|
|
|
143,571 |
|
|
10 |
|
0.03 |
|
|
|
162,346 |
|
|
10 |
|
0.03 |
|
Subordinated debentures issued to capital trust |
1.78 |
|
|
|
25,774 |
|
|
113 |
|
1.76 |
|
|
|
25,774 |
|
|
167 |
|
2.60 |
|
Subordinated notes |
5.91 |
|
|
|
148,676 |
|
|
2,188 |
|
5.90 |
|
|
|
89,840 |
|
|
1,338 |
|
5.99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing liabilities |
0.56 |
|
|
|
3,843,205 |
|
|
5,768 |
|
0.60 |
|
|
|
3,905,386 |
|
|
10,556 |
|
1.09 |
|
Non-interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
|
|
|
1,071,441 |
|
|
|
|
|
|
|
|
833,251 |
|
|
|
|
|
|
Other liabilities |
|
|
|
|
43,402 |
|
|
|
|
|
|
|
|
39,824 |
|
|
|
|
|
|
Total liabilities |
|
|
|
|
4,958,048 |
|
|
|
|
|
|
|
|
4,778,461 |
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
626,794 |
|
|
|
|
|
|
|
|
624,737 |
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
|
|
$ |
5,584,842 |
|
|
|
|
|
|
|
$ |
5,403,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread |
3.17 |
% |
|
|
|
|
$ |
44,684 |
|
3.18 |
% |
|
|
|
|
$ |
43,455 |
|
3.12 |
% |
Net interest margin* |
|
|
|
|
|
|
|
|
|
3.35 |
% |
|
|
|
|
|
|
|
3.39 |
% |
Average interest-earning
assets to average interest-bearing liabilities |
|
|
|
|
139.4 |
% |
|
|
|
|
|
|
|
132.1 |
% |
|
|
|
|
|
______________ |
*Defined as the Company’s net interest income divided by average
total interest-earning assets. |
(1) |
The yield on loans at June 30, 2021, does not include the impact of
the adjustments to the accretable yield (income) on loans acquired
in the FDIC-assisted transactions. See “Net Interest Income” for a
discussion of the effect on results of operations for the three
months ended June 30, 2021. |
|
June 30, 2021(1) |
|
|
|
Six Months EndedJune 30,
2021 |
|
|
Six Months EndedJune 30,
2020 |
|
|
|
|
|
|
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 |
3.44 |
% |
|
$ |
670,092 |
|
$ |
12,878 |
|
3.88 |
% |
|
$ |
628,076 |
|
$ |
14,570 |
|
4.67 |
% |
Other residential |
4.23 |
|
|
|
1,008,387 |
|
|
22,143 |
|
4.43 |
|
|
|
881,486 |
|
|
21,696 |
|
4.95 |
|
Commercial real estate |
4.23 |
|
|
|
1,571,561 |
|
|
33,441 |
|
4.29 |
|
|
|
1,511,434 |
|
|
35,970 |
|
4.79 |
|
Construction |
4.18 |
|
|
|
592,263 |
|
|
13,259 |
|
4.51 |
|
|
|
673,444 |
|
|
17,335 |
|
5.18 |
|
Commercial business |
3.87 |
|
|
|
307,579 |
|
|
7,433 |
|
4.87 |
|
|
|
305,016 |
|
|
6,552 |
|
4.32 |
|
Other loans |
4.93 |
|
|
|
229,709 |
|
|
5,535 |
|
4.86 |
|
|
|
305,435 |
|
|
8,424 |
|
5.55 |
|
Industrial revenue bonds |
4.45 |
|
|
|
14,715 |
|
|
380 |
|
5.21 |
|
|
|
10,015 |
|
|
431 |
|
8.65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans receivable |
4.34 |
|
|
|
4,394,306 |
|
|
95,069 |
|
4.36 |
|
|
|
4,314,906 |
|
|
104,978 |
|
4.89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment securities |
2.65 |
|
|
|
437,452 |
|
|
5,778 |
|
2.66 |
|
|
|
409,206 |
|
|
6,165 |
|
3.03 |
|
Other interest-earning
assets |
0.15 |
|
|
|
467,317 |
|
|
238 |
|
0.10 |
|
|
|
205,768 |
|
|
342 |
|
0.33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning assets |
3.73 |
|
|
|
5,299,075 |
|
|
101,085 |
|
3.85 |
|
|
|
4,929,880 |
|
|
111,485 |
|
4.55 |
|
Non-interest-earning
assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
96,786 |
|
|
|
|
|
|
|
|
94,124 |
|
|
|
|
|
|
Other non-earning assets |
|
|
|
|
131,059 |
|
|
|
|
|
|
|
|
159,353 |
|
|
|
|
|
|
Total assets |
|
|
|
$ |
5,526,920 |
|
|
|
|
|
|
|
$ |
5,183,357 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand and savings |
0.14 |
|
|
$ |
2,250,972 |
|
|
2,232 |
|
0.20 |
|
|
$ |
1,706,794 |
|
|
3,979 |
|
0.47 |
|
Time deposits |
0.74 |
|
|
|
1,262,220 |
|
|
5,447 |
|
0.87 |
|
|
|
1,751,125 |
|
|
15,639 |
|
1.80 |
|
Total deposits |
0.34 |
|
|
|
3,513,192 |
|
|
7,679 |
|
0.44 |
|
|
|
3,457,919 |
|
|
19,618 |
|
1.14 |
|
Short-term borrowings and repurchase agreements |
0.03 |
|
|
|
144,852 |
|
|
19 |
|
0.03 |
|
|
|
213,700 |
|
|
659 |
|
0.62 |
|
Subordinated debentures issued to capital trust |
1.78 |
|
|
|
25,774 |
|
|
226 |
|
1.77 |
|
|
|
25,774 |
|
|
383 |
|
2.99 |
|
Subordinated notes |
5.91 |
|
|
|
148,595 |
|
|
4,388 |
|
5.95 |
|
|
|
82,087 |
|
|
2,432 |
|
5.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing liabilities |
0.56 |
|
|
|
3,832,413 |
|
|
12,312 |
|
0.65 |
|
|
|
3,779,480 |
|
|
23,092 |
|
1.23 |
|
Non-interest-bearing
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
|
|
|
1,027,525 |
|
|
|
|
|
|
|
|
754,618 |
|
|
|
|
|
|
Other liabilities |
|
|
|
|
43,645 |
|
|
|
|
|
|
|
|
37,385 |
|
|
|
|
|
|
Total liabilities |
|
|
|
|
4,903,583 |
|
|
|
|
|
|
|
|
4,571,483 |
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
623,337 |
|
|
|
|
|
|
|
|
611,874 |
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
|
|
$ |
5,526,920 |
|
|
|
|
|
|
|
$ |
5,183,357 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate spread |
3.17 |
% |
|
|
|
|
$ |
88,773 |
|
3.20 |
% |
|
|
|
|
$ |
88,393 |
|
3.32 |
% |
Net interest margin* |
|
|
|
|
|
|
|
|
|
3.38 |
% |
|
|
|
|
|
|
|
3.61 |
% |
Average interest-earning
assets to average interest-bearing liabilities |
|
|
|
|
138.3 |
% |
|
|
|
|
|
|
|
130.4 |
% |
|
|
|
|
|
______________ |
*Defined as the Company’s net interest income divided by average
total interest-earning assets. |
(1) |
The yield on loans at June 30, 2021, does not include the impact of
the adjustments to the accretable yield (income) on loans acquired
in the FDIC-assisted transactions. See “Net Interest Income” for a
discussion of the effect on results of operations for the three
months ended June 30, 2021. |
|
|
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”). These non-GAAP
financial measures include core net interest income, core net
interest margin and the tangible common equity to tangible assets
ratio.
We calculate core net interest income and core net interest
margin by subtracting the impact of adjustments regarding changes
in expected cash flows related to pools of loans we acquired
through FDIC-assisted transactions from reported net interest
income and net interest margin. Management believes that core net
interest income and core net interest margin are useful in
assessing the Company’s core performance and trends, in light of
the fluctuations that can occur related to updated estimates of the
fair value of the loan pools acquired in the 2009, 2011, 2012 and
2014 FDIC-assisted transactions.
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.
These non-GAAP financial measures are supplemental and are 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: Core Net Interest Income and
Core Net Interest Margin
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
|
June 30, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
(Dollars in thousands) |
|
|
|
|
|
Reported net interest income/margin |
$ |
44,684 |
|
3.35 |
% |
|
$ |
43,455 |
|
3.39 |
% |
|
$ |
88,773 |
|
3.38 |
% |
|
$ |
88,393 |
|
3.61 |
% |
Less: Impact of FDIC-assisted
acquired loan accretion adjustments |
|
428 |
|
0.04 |
|
|
|
1,537 |
|
0.12 |
|
|
|
1,119 |
|
0.04 |
|
|
|
3,403 |
|
0.14 |
|
Core net interest
income/margin |
$ |
44,256 |
|
3.31 |
% |
|
$ |
41,918 |
|
3.27 |
% |
|
$ |
87,654 |
|
3.34 |
% |
|
$ |
84,990 |
|
3.47 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Reconciliation: Ratio of Tangible Common Equity
to Tangible Assets
|
|
June 30, |
|
|
|
December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
(Dollars in thousands) |
|
|
|
|
|
Common equity at period
end |
$ |
629,557 |
|
|
$ |
629,741 |
|
Less: Intangible assets at
period end |
|
6,397 |
|
|
|
6,944 |
|
Tangible common equity at
period end (a) |
$ |
623,160 |
|
|
$ |
622,797 |
|
|
|
|
|
|
|
|
|
Total assets at period
end |
$ |
5,577,582 |
|
|
$ |
5,526,420 |
|
Less: Intangible assets at
period end |
|
6,397 |
|
|
|
6,944 |
|
Tangible assets at period end
(b) |
$ |
5,571,185 |
|
|
$ |
5,519,476 |
|
|
|
|
|
|
|
|
|
Tangible common equity to
tangible assets (a) / (b) |
|
11.19 |
% |
|
|
11.28 |
% |
CONTACT: Kelly Polonus, Great Southern, (417) 895-5242
kpolonus@greatsouthernbank.com
Great Southern Bancorp (NASDAQ:GSBC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Great Southern Bancorp (NASDAQ:GSBC)
Historical Stock Chart
From Apr 2023 to Apr 2024