Great Southern Bancorp(GSBC) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported net income of $17.8 million for Q3 2025, up from $16.5 million in Q3 2024, translating to $1.56 per diluted common share compared to $1.41 a year ago [3][8] - Net interest income increased to $50.8 million, a rise of $2.8 million or 5.8% from $48 million in the same period last year [4][9] - The annualized net interest margin improved to 3.72% from 3.42% a year ago, reflecting stable loan yields and effective funding cost control [4][10] - Non-interest expense rose to $36.1 million from $33.7 million in the prior year, primarily due to higher legal and professional fees and technology upgrades [6][12] Business Line Data and Key Metrics Changes - Gross loans totaled $4.54 billion, a decline of $223 million or 4.7% from December 31, 2023, mainly due to elevated commercial real estate and multifamily loan payoffs [4][15] - Construction lending showed solid momentum with total unfunded construction commitments steady at approximately $600 million [5][16] - Non-interest income totaled $7.1 million, slightly up from $7.0 million in Q3 2024, driven by improvements in commissions on annuity sales and fees on loans [11][12] Market Data and Key Metrics Changes - Total deposits decreased by $77.5 million or 1.7% compared to December 31, 2024, primarily due to a decrease in brokered deposits [16][17] - As of September 30, 2025, uninsured deposits totaled approximately $742 million, representing roughly 16% of total deposits [17] Company Strategy and Development Direction - The company emphasized disciplined cost control and operational efficiency while strategically investing in areas that enhance capabilities for sustained growth [15][19] - The Board of Directors approved a new stock repurchase authorization for up to 1 million additional shares, reflecting a commitment to returning value to shareholders [19][20] Management's Comments on Operating Environment and Future Outlook - Management noted that credit quality remains strong, with no significant signs of weakness across the portfolio, despite some idiosyncratic issues in specific projects [24][25] - The company is well-positioned to handle potential future rate cuts, with expectations that moderate cuts will not significantly impact margins [27][28] Other Important Information - The efficiency ratio was reported at 62.45%, up from 61.34% in the prior year, indicating a slight increase in operational costs relative to income [14] - The allowance for credit losses as a percentage of total loans stood at 1.43%, reflecting a slight increase from the previous quarter [18] Q&A Session Summary Question: Loan growth outlook and regional opportunities - Management highlighted opportunities across various regions, including Texas and Atlanta, while noting elevated payoffs [22][23] Question: Signs of weakness in the portfolio - Management stated that there are no broad signs of weakness, with any issues being specific to individual projects [24] Question: Outlook on operating expenses - Management indicated that some operating expenses are expected to stabilize, with potential decreases in legal and professional fees [35][36] Question: Commission income sustainability - Management acknowledged that commission income is at a higher level than historically but could fluctuate based on customer interest [37][38]