Core Viewpoint - The Federal Reserve is currently holding interest rates steady amid various economic pressures and uncertainties, with expectations of potential rate cuts in 2026, but the timing and extent of these cuts remain uncertain due to mixed economic signals and political influences [1][2][5]. Economic Conditions - The job market is showing signs of weakness, with hiring at its lowest since 2013, despite a current unemployment rate of 4.4% [3][19]. - Inflation remains above the Fed's target of 2%, complicating the decision-making process for rate cuts [5][21]. - The Fed is expected to maintain a restrictive policy to help bring inflation down, with policymakers looking for clear evidence of economic improvement before making any cuts [4][21]. Interest Rate Forecast - Bankrate's annual forecast predicts three cuts totaling 0.75 percentage points in 2026, while investors anticipate two cuts starting in June 2026 [1][10]. - Mortgage rates are projected to fluctuate between 5.7% and 6.5% in 2026, with current averages at 6.25% for 30-year fixed mortgages [9][10]. Labor Market Insights - The labor market is not as robust as desired, with only 584,000 jobs added last year, the lowest since 2003 outside of a recession [19][20]. - Economists predict the unemployment rate may rise to 4.5% by the end of 2026, with an average of 64,500 jobs added monthly [20]. Market Reactions - The stock market is experiencing a rally, with the S&P 500 reaching record highs, but volatility remains a concern for long-term investors [16][17]. - The Fed's decisions on interest rates are closely watched as they impact borrowing costs and overall economic sentiment [5][18].

Loan Portfolio Presentation January 2026 Great Southern Bancorp. Inc (NASDAQ: GSBC) Fourth Quarter Ended December 31, 2025 Loan Portfolio by Category Gross Loans [in thousands] Consumer* $174,448 4% Single Family Real Estate $788,835 18% Multi-family Real Estate $1,387,410 31% Commercial Real Estate $1,556,148 35% Const & Land Dev $349,161 8% Commercial Business $178,514 4% *Includes Home Equity Loans of $128,030 12-31-25 $4,434,516 9-30-25 $4,543,707 Consumer* $171,519 4% Single Family Real Estate $802,384 ...

Core Insights - The Zacks Savings and Loan industry is benefiting from an improving lending environment due to recent Federal Reserve rate cuts, which are expected to stabilize funding costs and enhance net interest income (NII) and net interest margin (NIM) [1][4]. Industry Overview - The Zacks Savings and Loan industry comprises specialized U.S. banks focused on residential mortgage finance, offering various loan products and funding mortgages with FDIC-insured savings [3]. - The industry has seen a shift in regulations, allowing institutions to invest more flexibly, which can enhance their lending capabilities [3]. Trends and Developments - Lower interest rates are anticipated to boost loan demand, with the Federal Reserve cutting rates by 50 basis points this year and a further 100 basis points expected in 2024 [4]. - Recent declines in mortgage rates are improving purchase originations and refinancing activities, which is likely to increase borrower confidence [5]. - The industry is undergoing digital transformation to enhance operational efficiency and competitiveness, despite initial cost increases [6][7]. Asset Quality and Performance - Declining interest rates are helping borrowers maintain timely payments, potentially reducing the need for large reserves against defaults [7]. - However, a slight increase in non-performing loans is expected, with some credit quality metrics remaining elevated compared to pre-pandemic levels [8]. Market Position and Valuation - The Zacks Savings and Loan industry ranks 96 among over 243 Zacks industries, placing it in the top 40% and indicating solid near-term prospects [9][10]. - The industry's current-year earnings estimate has increased by 43.2% over the past year, reflecting growing analyst confidence [11]. - The industry has underperformed the broader Zacks Finance sector and the S&P 500, with a collective decline of 12.2% over the past year [13]. Valuation Metrics - The industry has a trailing 12-month price-to-tangible book (P/TB) ratio of 1.97X, below the five-year median of 2.13X, indicating a discount compared to the broader market [17][19]. - The Zacks Finance sector's P/TB ratio stands at 5.93X, further highlighting the relative valuation attractiveness of the savings and loan industry [19]. Company Highlights - **Northpointe Bancshares Inc. (NPB)**: Focused on mortgage lending, with a 6.8% sequential growth in gross loans in Q3 2025. The bank's total deposits increased by $295.6 million, indicating strong funding stability [20][21][22]. NPB has a Zacks Rank 2 (Buy) with earnings estimates indicating growth of 19.7% and 24.4% for 2025 and 2026, respectively [24]. - **West Bancorporation (WTBA)**: A community bank emphasizing stable funding sources and digital banking enhancements. Total loans increased by 1.4% in Q3 2025, with NII rising around 25% year-over-year [27][28]. WTBA holds a Zacks Rank 1 (Strong Buy) with earnings estimates showing increases of 43.7% and 17.7% for 2025 and 2026, respectively [30]. - **Citizens Community Bancorp, Inc. (CZWI)**: Focuses on organic growth and acquisitions, with a strategy to improve its loan portfolio and deposit mix. As of Q3 2025, non-performing assets were 0.96% of total assets, slightly up from the previous year [33][35]. CZWI has a Zacks Rank 2 with earnings estimates indicating growth of 2.2% and 26.8% for 2025 and 2026, respectively [36].

Financial Data and Key Metrics Changes - Camden National Corporation reported record third quarter earnings of $21.2 million, a 51% increase over the previous quarter [4][13] - Pretax pre-provision income rose 19% over the prior quarter, reaching $29.5 million [13] - The tangible common equity ratio increased by 32 basis points to 7.09%, and tangible book value grew 6% to $28.42 per share [5] - The net interest margin expanded by 10 basis points to 3.16% [6][14] - The return on average tangible equity was reported at 19.1% for the third quarter [6] Business Line Data and Key Metrics Changes - Annualized loan growth was 4%, reflecting a commitment to organic expansion [6] - Average core deposits grew by 2%, with savings deposit balances increasing by 5% [7] - Noninterest income reached a record high of $14.1 million, an 8% increase over the second quarter [16] Market Data and Key Metrics Changes - The committed loan pipeline totaled $116 million as of September 30 [7] - Credit quality metrics remained solid, with nonperforming assets decreasing by 14 basis points to 12 basis points of total assets [8][17] Company Strategy and Development Direction - The company is focused on executing the Northway financial integration strategy following the acquisition [5] - Investments in digital engagement and automation are aimed at enhancing customer service and operational excellence [10] - The company is strategically expanding its treasury management services into the New Hampshire market [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the overall health of the diversified loan portfolio despite economic uncertainties [8] - The company anticipates continued momentum in loan growth and noninterest income, with a focus on disciplined expense management [11][29] - Future Fed rate cuts are expected to positively impact net interest margin [22][23] Other Important Information - The company recorded a charge-off of $10.7 million related to a syndicated loan participation [8][17] - The company hosted a Community Well-being Day, emphasizing its commitment to community engagement [10] Q&A Session Summary Question: Loan growth and pricing dynamics - Management noted strong momentum in commercial, small business, and home equity loans, with home equity up 54% year over year [20][21] Question: Margin outlook with potential Fed rate cuts - Management indicated expectations for margin expansion of 5-10 basis points in the next quarter, driven by funding costs [22][23] Question: Expense dynamics and growth outlook - Management discussed anticipated increases in operating expenses due to incentives and legacy contracts from the Northway acquisition [33][34] Question: Credit quality and provision outlook - Management expressed comfort with the current allowance for credit losses, indicating confidence in the underlying portfolio [44][45] Question: Loan growth expectations for 2026 - Management projected mid-single-digit loan growth for 2026, with strong performance expected in home equity and commercial loans [52][54] Question: Fee income growth trends - Management highlighted positive trends in fee income, particularly in brokerage and wealth management, with continued investment planned [56][57]

Financial Performance - The company reported earnings per share of $1.03 and operating earnings per share of $1.05[9] - Return on average tangible equity was 17.35% reported and 17.61% operating[9] - Total revenue reached $186 million[9] - Net income was $54.5 million, a 142% increase compared to Q2 2025 and a 43% increase compared to Q3 2024[14] - Diluted earnings per share were $1.03, a 134.1% increase from Q2 2025 and a 28.8% increase from Q3 2024[14] Balance Sheet - Period-end loans totaled $11.60 billion[9] - Period-end deposits amounted to $13.66 billion[9] - Stockholders' equity grew by $327 million, or 21.4%, from December 31, 2024[11] - Total loans increased by $1.63 billion from December 31, 2024[22] - Total deposits increased by $2.11 billion, or 18.3%, from December 31, 2024, including $1.86 billion from the Evans acquisition[29] Net Interest Income and Margin - Net interest income increased by $10.4 million to $135.3 million[36] - Net interest margin increased by 7 bps to 3.66%[36]

Economic Overview - The U.S. Treasury reported a $345 billion budget deficit in August 2025, marking the largest monthly deficit of the year and the second-worst August on record, up from a $291 billion deficit in July [1] - Government spending reached $689 billion for August, contributing to a total deficit of $1.97 trillion for the first 11 months of FY2025, which is on track to be the third-largest annual deficit in history [1] Mortgage Market Insights - Eris SOFR Swap futures provide mortgage lenders and servicers with tools to manage interest rate risk effectively, particularly for Mortgage Servicing Rights (MSR) holders [2] - The use of Eris SOFR allows lenders to hedge non-QM loans, enhancing execution and expanding delivery options as they transition away from Best Efforts [2] Compliance and Quality Control - The rise in Home Equity Lines of Credit (HELOCs) and Home Equity Loans (HELOANs) has increased the need for lenders and servicers to ensure compliance and quality control, especially for loans retained in portfolios [3] Government Program Updates - The FHA announced the adoption of the modernized Uniform Appraisal Dataset (UAD) 3.6, set to begin in early Spring 2026, aimed at improving collateral risk management [7] - FHA updated its Electronic Data Interchange (EDI) file layout for Mortgage Loan Default Status, adding nine new reporting elements while removing 24 fields related to Personally Identifiable Information [8] - FHA's Mortgagee Letter 2025-21 includes minor changes to facilitate servicing and loss mitigation requirements, aligning with the administration's priorities [9] - A new phishing-resistant multi-factor authentication system for FHA Connection is to be implemented by October 27, 2025, enhancing data security [10] Capital Markets and Interest Rates - The ongoing government shutdown has limited the release of key economic data, with Fed officials expressing caution regarding policy adjustments [13] - Mortgage rates fell for the first time in three weeks, with the 30-year and 15-year rates decreasing to 6.30% and 5.53%, respectively [14]

Financial Data and Key Metrics Changes - Adjusted revenue reached $1,340,000,000, exceeding the high end of guidance and achieving 9% year-over-year growth [7][32] - Net rate lock volume increased to over $28,000,000,000, a 13% increase year-over-year [32] - Adjusted EBITDA was $172,000,000, representing a 13% margin, with adjusted diluted EPS at $4 [7][32] Business Line Data and Key Metrics Changes - Home equity loan volume nearly doubled year-over-year, hitting a new record for units and volume [10][32] - Refinance volume showed strong growth quarter-over-quarter and year-over-year, particularly when the thirty-year mortgage rate dipped to 6.6% [10][32] Market Data and Key Metrics Changes - June existing home sales were 2.7% lower than May, and over 20% below pre-pandemic levels, indicating a challenging housing market [8] - Home price growth is moderating, with signs of softening prices in several major markets, suggesting a gradual shift in favor of buyers [33] Company Strategy and Development Direction - The company is focused on integrating Redfin and Mr. Cooper to enhance its homeownership platform, aiming for a simpler, faster, and more affordable experience [27][26] - The acquisition of Redfin is expected to create significant synergies, with anticipated total synergies of $200,000,000, including $140,000,000 in expenses and $60,000,000 in revenue [35][81] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the home buying season extending beyond the traditional Labor Day slowdown, supported by a strong approval letter pipeline [41][56] - The company is cautiously optimistic about the summer home buying season, with expectations for continued strong activity [41][56] Other Important Information - The company has taken steps to streamline operations, including shutting down Rocket Mortgage Canada and the Rocket Visa Signature Card program, expected to yield $80,000,000 in annualized savings [40][62] - The integration planning for Mr. Cooper is progressing well, with a target close in Q4 [26][101] Q&A Session Summary Question: Outlook for 3Q and cost run rate - Management indicated that the home buying season is expected to extend, with a guidance increase of 6% year-over-year [53][54] Question: Thoughts on Redfin integration and synergy guidance - Management expressed excitement about the integration, noting early positive results and high-quality traffic from Redfin [72][81] Question: Agent count expansion at Redfin - Management highlighted the potential for expanding the agent network through collaboration with Rocket Homes and Redfin [86][92] Question: Synergies from Mr. Cooper acquisition - Management confirmed confidence in achieving synergy targets, with ongoing progress toward closing the deal [100][102] Question: Early trends in attach rates for Redfin - Management reported positive early trends in traffic and recapture rates since the acquisition [104][105]

Financial Data and Key Metrics Changes - Adjusted revenue reached $1,340,000,000, exceeding the high end of guidance and achieving 9% year-over-year growth [7][32] - Net rate lock volume increased by 13% year-over-year, exceeding $28,000,000,000 [32] - Adjusted EBITDA was $172,000,000, representing a 13% margin, with adjusted diluted EPS at $0.04 [7][32] Business Line Data and Key Metrics Changes - Home equity loan volume nearly doubled year-over-year, hitting a new record for units and volume [11] - Refinance volume showed strong growth quarter-over-quarter and year-over-year, particularly benefiting from a brief dip in the thirty-year mortgage rate to 6.6% [11][33] Market Data and Key Metrics Changes - June existing home sales were 2.7% lower than May, and over 20% below pre-pandemic levels, indicating a challenging housing market [8] - Home price growth is moderating, with signs of softening prices in several major U.S. metro areas, suggesting a gradual market shift in favor of buyers [34] Company Strategy and Development Direction - The company is focused on integrating Redfin and Mr. Cooper to enhance its homeownership platform, aiming for a simpler, faster, and more affordable experience [27][26] - The acquisition of Redfin is expected to create significant synergies, with anticipated total synergies of $200,000,000, including $140,000,000 in expenses and $60,000,000 in revenue [36][82] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the summer home buying season, expecting it to extend beyond the traditional Labor Day slowdown [43] - The company is focused on operational efficiency and has taken steps to streamline operations, including shutting down Rocket Mortgage Canada and the Rocket Visa Signature Card program [41][42] Other Important Information - The company reported a strong capital position with $6,000,000,000 in available cash and $7,600,000,000 in mortgage servicing rights, totaling $13,600,000,000 in balance sheet value [40] - The company is building an integrated homeownership platform that leverages AI to enhance client experiences and operational efficiency [28][19] Q&A Session Summary Question: Outlook for 3Q and cost run rate - Management indicated that the home buying season is expected to extend, with a guidance increase of 6% year-over-year [54][58] Question: Thoughts on Redfin integration and synergy guidance - Management expressed excitement about the integration with Redfin, highlighting early positive results and a strong cultural fit [82][80] Question: Update on Mr. Cooper transaction and synergy expectations - Management confirmed that the Mr. Cooper transaction is on track for a Q4 close, with increasing conviction in synergy numbers [102][103] Question: Market share growth and MSR acquisitions - Management noted a significant decrease in overall transfers in the market, indicating a cautious approach to MSR acquisitions while waiting for the deal to close [110]

Financial Data and Key Metrics Changes - Operating ROTCE for the quarter was 17.2%, an increase from 16.8% in the previous quarter, within the guidance range of 16% to 20% [3] - Net income was reported at $198 million, including $269 million in pretax operating income, with adjustments totaling $15 million [18][19] - The capital ratio ended at 26.6%, up from 24.4% at year-end, attributed to strong earnings and the suspension of stock repurchases [23][24] Business Line Data and Key Metrics Changes - Servicing generated $332 million in pretax income, a 15% year-over-year increase, while originations produced $64 million despite high rates [7][12] - The servicing portfolio remained steady at approximately $1.5 trillion, with a slight decline in UPB due to a single client changing strategy [10] - The company expects to board about $20 billion in MSR acquisitions in the third quarter [11] Market Data and Key Metrics Changes - The company noted persistent high mortgage rates leading to affordability challenges and sluggish home sales, with home prices under pressure in some markets [5] - The DTC channel saw a 40% sequential increase in volumes, with home equity and cash-out refinances making up nearly 60% of the mix [14] Company Strategy and Development Direction - The company is focused on integrating with Rocket and enhancing its platform, with a strong emphasis on AI to improve customer experiences and operational efficiencies [5][9] - A maiden MSR fund was launched with $200 million in initial commitments, aiming to scale rapidly [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance despite a challenging environment, highlighting the strength of its scale platform and balanced business model [5][6] - The company anticipates continued consistent performance in the third quarter, supported by strong operating cash flow [24] Other Important Information - The company was recognized as one of the best places to work in Texas, reflecting its commitment to creating an inclusive environment [6] - Delinquencies in the portfolio declined to 1%, with a focus on maintaining high asset quality [20][21] Q&A Session Summary - Due to the pending merger with Rocket, no questions were taken during the call [2]

Financial Data and Key Metrics Changes - Operating ROTCE for the quarter was 17.2%, an increase from 16.8% in the previous quarter, within the guidance range of 16% to 20% [3] - Net income for the quarter was $198 million, including $269 million in pretax operating income [17] - The capital ratio ended at 26.6%, up from 24.4% at year-end, attributed to strong earnings and the suspension of stock repurchases [22] Business Line Data and Key Metrics Changes - Servicing generated $332 million in pretax income, a 15% year-over-year increase, while originations produced $64 million despite high rates [7][12] - The servicing portfolio remained steady at approximately $1.5 trillion following the acquisition of Flagstar [9] - The company completed two home equity securitizations during the quarter, indicating strong momentum in home equity loans [13] Market Data and Key Metrics Changes - The company noted persistent high mortgage rates leading to affordability challenges and sluggish home sales, with home prices under pressure in some markets [5] - Delinquencies in the portfolio declined to 1%, reflecting strong asset quality [6][20] Company Strategy and Development Direction - The company is focused on integrating with Rocket and enhancing its platform, which includes launching a maiden MSR fund with $200 million in initial commitments [7][8] - Continued investment in AI solutions is aimed at optimizing operations and improving customer experiences [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance despite a challenging environment, highlighting consistent double-digit returns over the past two and a half years [5] - The company anticipates continued strong operating cash flow and robust liquidity throughout the remainder of the year [22] Other Important Information - The company was recognized as one of the best places to work in Texas, emphasizing its commitment to a purposeful and inclusive environment [6] - The corporate segment incurred $48 million in expenses, expected to remain at this level due to ongoing IT investments [18] Q&A Session Summary - No questions were taken during the call due to the pending merger with Rocket [2]