Great Southern Bancorp(US:GSBC)2020-07-22 00:26Financial Data and Key Metrics Changes - Earnings declined in Q2 2020 compared to the same quarter last year, primarily due to a loan loss provision expense increase of $4.4 million, resulting in earnings of $0.93 per diluted common share [8] - Annualized return on common equity was 8.45%, return on assets was 0.98%, net interest margin was 3.39%, and efficiency ratio was 56.75% [9][35] Business Line Data and Key Metrics Changes - Loan production was solid, with outstanding loan balances increasing by $246 million from the end of the previous year to $4.4 billion, with $120 million attributed to PPP loans [10] - Loan modifications totaled $1 billion, with 431 commercial loans and 1,702 mortgage and consumer loans modified [13][14] Market Data and Key Metrics Changes - The committed pipeline decreased to $1.3 billion, down $91 million from the end of the last quarter [11] - The company experienced a significant increase in self-service channel usage, with mobile check deposits up 28% and P2P service transactions up 21% since March [21][22] Company Strategy and Development Direction - The company is focused on optimizing its banking center network and investing in digital channels, having closed or consolidated more than 36 offices in the last six years [22][23] - An in-depth study of the banking center network is underway to assess demographics, market potential, and technology integration [23][48] Management's Comments on Operating Environment and Future Outlook - The management expressed concerns about the ongoing pandemic's impact on the economy and acknowledged an increase in watch customers from $34 million to $74 million [6][12] - The management expects a substantial portion of modified loans to return to normal payment terms by the end of summer [14][65] Other Important Information - The company declared a regular cash dividend of $0.34 per common share and anticipates maintaining this dividend for the foreseeable future [17] - The liquidity position remains strong, with deposits at the Federal Reserve Bank and Home Loan Bank totaling about $580 million [36] Q&A Session Summary Question: Loan book growth and business development plans - Management indicated that loan growth is driven more by slower repayments than new origination activity, with less refinancing occurring compared to the previous year [40] Question: Outlook on PPP loans - Management expects most PPP loans to be paid off sooner rather than later, with many loans under $150,000 potentially expedited for forgiveness [41][43] Question: Branch network study updates - Management stated it is too early to share conclusions from the branch network study, which is examining various factors including demographics and market potential [44][48] Question: Liquidity and securities portfolio - Management expects liquidity levels to decrease over time but remain solid, with a focus on selective growth in the investment portfolio [61][62] Question: Interest income from PPP loans - The estimated impact of PPP loans on interest income was between $500,000 and $600,000 for the quarter [64] Question: Update on modified loans - Some modified loans have matured and rolled off, with expectations that a substantial portion will return to normal payment terms [65] Question: Opportunistic M&A thoughts - Management indicated a focus on organic growth rather than acquisitions, although they would consider opportunities if they arise [66][67]