GREAT SOUTHERN BANCORP, INC. Q4 FY2024 earnings call

Key Points

• 2024 was a year of resilience despite economic challenges, with net income of $61.8 million or $5.26 a share, though slightly down from prior year.
• Fourth quarter net income was $14.9 million or $1.27 per diluted common share, with net interest margin improving to 3.49%.
• Loan portfolio grew by over $100 million, led by multifamily residential loans. Asset quality was strong with nonperforming assets at 0.16% of total assets.
• Strengthened capital position with stockholders' equity increasing by $27.7 million, and $15 million spent on stock repurchases and $18 million on dividends.
• Rex Copeland discussed net interest income, margin, deposit management (replacing brokered deposits, managing funding costs), loan growth, asset quality, noninterest income/expenses, tax rate, and capital/stockholders' return.

For the fourth quarter, net income was $14.9 million or $1.27 per diluted common share. Net interest margin was 3.49%, an improvement from prior quarters. Total net loans increased over $100 million to $4.69 billion at year-end, with multifamily residential loans leading growth at $607.2 million. Asset quality remained strong with nonperforming assets at 0.16% of total assets. Annual net interest income for the full year was $189.1 million, a slight decline due to elevated deposit costs. Loan growth was 2.2% year-over-year to $4.69 billion.

Forward-Looking Statements

• Focus on disciplined growth, balance sheet management, and sustainable value delivery for shareholders.
• No specific forward guidance on loan growth, but mentioned margin outlook influenced by deposit and funding mix, and CD maturities.
• Anticipated easing of funding cost pressures due to declining time deposit market rates.

Risks Discussed

• Intense deposit competition impacting funding costs.
• Interest rate environment changes affecting funding mix and loan repricing.
• Potential fluctuations in loan repayments and refinancing activities impacting loan portfolio growth.

Q: Just want to talk on the margin commentary here. Kind of surprised that it's not a little more optimistic just given that we had a couple of rate cuts...

A: There's a couple of things going on with it. I don't know that -- like I said, I think we said in here, we don't really see a big catalyst moving the number tremendously from the fourth quarter number...

Q: Just wanted to start off a little bit about loan growth. There was no provision for loans this quarter, it was for unfunded commitments. So just wondering if you could talk a little bit about the closing activity during the quarter and kind of how you see that funding over the next four quarters or so?

A: I think, generally, our unfunded funds may be between $50 million and $70 million a month. So, there will be $150 million or so of that fund, but we generally will have repayments at that level or pretty close to it...

Q: And then, as far as kind of circling back to the margin. I think you had mentioned, Rex, about some fixed rate loans that would be repricing during the course of the year. Roughly, how much in the way of fixed rate loans would be repricing? And what's kind of the pickup between current yields on those and then the reprice levels?

A: Some of it will be repriced. I don't really have a good breakdown of the dollar amount on that off the top of my head...

Q: I guess most of my questions have been asked and answered. But just on the fee income side, the other line item was up, I guess, $200,000, $300,000 linked quarter. Anything unusual in that other line item?

A: Yes, John, I think we mentioned in there that we had a -- we do some program where we have back-to-back swaps with loan customers. In some of those cases, if we do those, and the customer wants to do a swap that we initiate that and then we get an upfront fee on that...

Q: And then either Joe or Rex, just can you add any more color the one property here in Missouri that went to other real estate OREO, what market, anything like that?

A: Yes. We've covered that before, haven't we? It's an office property in Clayton, Missouri. It's a decent property, but it's going to take us a little while to sell it.