Great Southern Bancorp (GSBC) Q2 Earnings call transcript Jul 17, 2024
AInvestThursday, Jul 18, 2024 11:28 am ET
2min read
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Great Southern Bancorp, Inc. recently held its second quarter 2024 earnings call, where it reported a strong performance, despite navigating a challenging economic environment. The bank earned $1.45 per diluted common share or $17 million, marking a slight decrease from the same period in 2023 but an improvement compared to the first quarter of 2024. These results, excluding non-recurring items, indicate a resilient financial position.

Strong Capital and Liquidity Positions

The company's capital and liquidity positions remain robust, with a total stockholders' equity of $568.8 million as of June 30, 2024. Although there was a slight decrease from the end of 2023 due to unrealized losses on available-for-sale securities and interest rate swaps, the company's capital remains well above regulatory thresholds. Its TCE ratio stood at 9.4% at the end of the second quarter. The company also reported a $0.40 per common share dividend and continued share repurchases, signaling confidence in its financial health.

Earnings and Operational Highlights

The bank's net interest income for the second quarter was $46.8 million, reflecting improved performance compared to the first quarter of 2024. This improvement was largely due to the termination of an interest rate swap. Despite a moderate increase in deposit interest expenses, the bank's net interest margin remained at 3.43%, showing a slight contraction from the same period in 2023. The bank's loan portfolio continued to perform well, with modest growth in the multifamily category, driven by construction loans. Credit quality metrics remained strong, with non-performing assets increasing to $20.4 million, primarily due to increases in multifamily construction loans.

Key Themes and Challenges

During the earnings call, management discussed key themes and challenges facing the bank. These included modest increases in overall funding costs, continued significant competition for deposits, lower loan origination volume, and the impact of interest rate swaps. Despite these challenges, the bank's leadership expressed confidence in its performance and its ability to navigate the economic environment.

Investor Insights

During the call, key shareholders and investors asked insightful questions, revealing their concerns and priorities. Andrew Liesch of Piper Sandler questioned the bank's securities book and the potential impact on margins. Damon DelMonte of KBW focused on the margin outlook and the bank's compliance matters. These interactions provide valuable insights into the investors' perception of the bank's financial health and its strategic direction.

Looking Ahead

As Great Southern Bancorp, Inc. moves forward, it will continue to face challenges and opportunities in the economic environment. Its strong capital and liquidity positions, coupled with a diverse loan portfolio, position it well for the future. The bank's leadership remains confident in its ability to navigate these challenges and capitalize on opportunities, as it seeks to create value for its shareholders and customers.

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