Great Southern Bancorp, Inc. Q4 FY2025 earnings call

• Net income improved in Q4 and full year despite economic challenges.
• Net interest income affected by terminated swap and lower loan balances, but margin expanded due to managed funding costs.
• Loan balances declined due to elevated payoff activity, but conservative underwriting was maintained.
• Core deposits remained stable, with brokered deposits down. Credit quality was strong with no provision for credit losses.
• Noninterest expense decreased y/y except for increases in net occupancy and equipment expense related to technology investments.

For the fourth quarter of 2025, net income was $16.3 million or $1.45 per diluted common share, compared to $14.9 million or $1.27 per diluted common share in the prior year quarter. Full-year net income totaled $71 million or $6.19 per diluted common share. Net interest income for Q4 2025 was $49.2 million, a decrease of $371,000 or 0.7% y/y, primarily due to the terminated swap and lower loan balances, but net interest margin expanded to 3.70% from 3.49% in the prior year. Net loans receivable totaled $4.36 billion at year-end, a decline of $333.5 million or 7.1% y/y. Total deposits decreased $122.8 million or 2.7%, mostly in brokered deposits. Credit quality was strong, with nonperforming assets at 0.15% of assets. Noninterest expense for Q4 2025 was $36 million, down 2.6% y/y.

• Margin expected to have modest compression until Fed action, with core CD portfolio not a major driver of deposit costs.
• Loan growth remains challenging due to ongoing payoffs, and timing/magnitude of payoffs is hard to predict.
• Expenses likely to uptick in 2026 due to annual employee increases and payroll tax resets.

• Economic volatility posing challenges to loan and deposit competition.
• Unpredictable loan payoffs impacting loan growth prospects.
• Potential margin compression if Federal Reserve actions do not provide significant relief.

Q: Regarding the margin outlook for 2026, how is it expected to play out?

A: Proactive funding management and loan redeployment are in place, but modest compression is expected until the Fed takes action.

Q: What is the outlook for loan growth in 2026?

A: Loan growth remains challenging due to ongoing payoffs, and the timing and magnitude of payoffs are difficult to predict.

Q: What can be expected for expenses in 2026?

A: Expenses are likely to uptick in 2026 due to annual employee increases and payroll tax resets.

Q: Do you think the worst of the loan decline in 2025 has been seen?

A: It's hard to say, but there is hope that the worst may be past, though uncertainty remains.

Q: What about the securities portfolio cash flows and reinvestment?

A: The securities portfolio is mostly mortgage-backed and fixed rate, with cash flows typically reinvested in loans.

Q: What are the plans for stock buybacks?

A: Buybacks are likely to continue as the stock is seen as good value below 115% of book value.