GSBC - Earnings call transcript Q1 2018 | Great Southern Bancorp, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to the Great Southern Bancorp Incorporated First Quarter 2018 Earnings Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instruction will follow at that time. [Operator Instructions] And as a reminder, this conference maybe recorded. I would now like to turn the conference over to Ms. Relations. Investor with Polonus, Kelly Ma’am, you begin. may

Kelly Polonus

for Thank Polonus, Investor Serena. this is company’s Good XXXX. March The afternoon Kelly is call results the discuss This welcome. to quarter Relations of ending XX, and purpose you, the for Southern. Great

Before events remind that and performance. course need future during make forward-looking to we this financial call, may I statements we the begin, you of about future

any made. forward-looking the You statements statements, the speak differ should reliance projected. not a of are place materially or only that actual to date subject on they factors could These undue are as from of results anticipated which number results cause to

list Officer, now turn statements CEO, here President a see and I’ll some our Rex please with Turner; me. earnings factors, the disclosure Chief and Joe Copeland, release. For Joe forward-looking to Turner. are Financial of first of the these in quarter over call XXXX

Joe Turner

open statement. give then, to the to chance Copeland release. on bit of Kelly. joining earnings Hopefully, And remarks on performance want turn Thanks, income provide some on for the up to over more has Rex about right. course, for detail little a had a questions. I will call earnings who the I’ll we’ll I’ll everybody quarter everybody quarter. first today it first us during thank And call. All call for then our call And the the review our our

you $X.XX the then we have, first good earned in a you If million We an saw $XX.X that had extremely share, quarter. quarter.

on common XX.XX% average X.XX%. was annualized on our was return return annualized equity Our assets and

was basis which margin and the X.XX%, of points was the during was up margin the think I stated XX – our margin end year. from like core X.XX%, quarter Our

as loan I news far around, portfolio As think. all good goes,

during million on increased outstanding. quarter loan portfolio funded $XX the Our

quarter. but loans, loans And we gross $XX million the would number, our construction the unfunded Our during commercial FDIC-acquired increased was real construction primarily loans this in total gross include exclude total and that which increase from and loans, estate.

loans auto that continue think. quarter, decreased continue end and million As at $XX we’ve would that expect I to in happen decrease. the of They of did through the to year, to least our about talked the at kind level, previously, we

consistent Asset quarter. loans very of low potential I And levels almost good XX – end during think. XXXX. problem overall also end quality – started may I they well decreased pretty with have level Non-performing was level problem the We relatively the by of of consistent, loans with guess, The historically with $XXX,XXX. non-performing the remain assets of our assets. was of

Foreclosed $X.X assets did $X.X rest were charge-offs all commercial. on quarter. consumer during net were million increase that million net three there the to commercial, vintage and charge-offs larger during Of older, then were million $X.X Total amounted that of was was first the charge-offs, project. and the quarter. $XXX,XXX the by those

common ratios. during total be continues capital to Our book XX.X% value strong tangible assets $XX.XX%, share assets. strong. million million, to per $XXX And is XX.X%, – which it strong, quarter $X the to grew of and is so Total capital about very

far I’m to go, entered we our sell Omaha saw West As as an agreement into area business sure you Gate initiatives all to that deposits Bank.

that the million amount our $X.XX to in of to book to interest $X.XX gain would close which we to $X expect When we decrease by annually does will to transaction the it on After $X.X a expect year. close, $XXX,XXX. go-forward that after about expect net income to tax. We third a quarter basis, million, $XXX,XXX transaction, this of

concludes for my $XXX,XXX to to and $X.X $XXX,XXX to $X.X so event positive interest to remarks. it net essentially expense, this as increase non income, a million Rex. prepared million, to well. decrease At operating expect We expect time, expense I’ll – over That turn non-interest we interest by us

Rex Copeland

touched margin. I interest Joe. earlier. speak about on moment to you, a net for Thank want that Joe

last the we’ll borrowings that income rates lot year that sold anticipate first that market other on record a due trends on year one sales. of can that the would normal, in things last to continue One And the kind year. pools, and we that quarter that an residual were year ago to extra decrease We well Non-interest year compared quarter, this that from then move higher, of so core would yield fixed think years for products. secondary and other the the I looking credits, if would of that the effects from pressure a along period. lot funds some first year things excludes basis we’ve loan Also, market. additional kind previous in generated year five beginning effect all interest last deposits, at, expenses, originated basis in income, the the and last ago section, raise net Bank. We’ve we XX year, type this year, a maintained first of as is, loan fees. move That’s rates that bit with income our about a out rather did loan increase, said, note first kind have than We quarter the originating our we $XXX,XXX we’ve and of items. fourth in federal of this in the categories about to this had non-interest adjustable, of have fees rate, saw last I up of is last rates that things our the customer thing year type We deposit better the first payoffs filings and that $XXX,XXX. to so happened that couple the the loan We positive of more and to hybrid-arm year. demand kind are stay which step some in area. on of to expanded driving yields of couple FDIC-acquired non-interest and year a we of quarter from we of our quarter in that loans whole rates. in going will other maintain a quarter we to of we’re And did our certainly to that for we change this what increased have kinds or in X.XX% we’re down quarter But the accretion from I the some us. related in than potentially have last quarter quarter in he of of to rates section is little fixed generated that. loans, contained fourth loans in compared rates and did XXXX, additional fixed thing expansion And yields generally driving in to rising some and of would continue to income whether and tax margin. modestly. in which the also Primarily a portfolio. fixed points were a do last kind did of indicated on things wholesale of have A mortgage XX modestly of become first our we somewhat to do maintain margin, kind the at prepayments quarter speaking, income loans most monitor Federal compared This as quarter three our level profit is quarter as actually those been what well expansion larger was than loan quarter believe, on some or of A was income the That year. will is income, year those the Reserve which quarter as we on the large didn’t for – income higher we points they’re generally Non-interest balances here past raising XXXX. interest – those

total played which in earnings We Our little bit. million $XX.X the listed a expense of a release, quarter. that non-interest this was kind into few items

year. thing, from tax implications other quarter first this It effective rate tax first decreased year quarter the to first was bit. that. the was this that obviously, reform, of the quarter in was our a compared this first XX.X% we quite the last The year, benefited of in in year XX.X% This

investment rate utilized. rate municipal tax the or been year more and has effective tax-exempt also that stated to year tax income, some period both in credits due this below and Our income we so last

here the XX% our so first is And below quarter. stated in rate the tax federal rate

forward. rate our That once this as move statutory available concludes for credits and our would those the how to questions. the now. I’d than would again, be have ask As the less attendees right through we that long as operator, remind queue And like tax we time, XX%, we’ll anticipate the to entertain our in of we us questions. flowing to remarks process, at of effective rate And

Operator

Perito Thank line KBW. you. of will question first the Michael [Operator Instructions] with come And from our

is line open. now Your

Michael Perito

everyone. afternoon for taking Thanks Hey, question. the good

Joe Turner

Mike. Hi,

Michael Perito

internal the quarter authorization the much So perspective, of a seems as models noticed on from seems building. release, press your your start, minutes internal plan outstanding guys a our X.X% to I forward. pretty shares. aggressive about wanted good like that you or about covered so of going perspective, Curious, to capital think I mentioned few have this. you apologize I hop that But if a did of how Obviously, so in I a profitability first you share to utilize couple, kind from and how late, that, purchased be the it it’s we was I generation just first new

Joe Turner

with value. executing Well, in increase and to to availability depend of we’re going the order with it’s stock, repurchase, as long-term shareholder we’re everything, the on obviously share always it

the not value. longer-term a level to and shareholder So to push opportunity over we on focused the current we’re trying their at to stock near represent think price Having term. said repurchased, if shares an represent that, value – the really increase

So with get going we’re it. excited to

Michael Perito

XX% was, guys, room the the discussed mean, kind pace. consumer at you for as still think hope grow the board, But that of is quarter? growth is with maybe mean, show, down. – almost the can – a loan help As pretty eventually, a you move the I Obviously, I the today. to rapid loan you’ve us some will bit book which let good just again, TCE more commercial the will that ratio about presumably there’s capital, of in portfolio

that that makes in XX.X% what to XX% M&A if dividend to then, range of of rather the keep down is this So building? some level ratio obviously, the sense, growth buyback kind the can next there than increases and And that’s future hope you maybe level? find organic you gets TCE some

Joe Turner

Right.

that’s think I assumption. reasonable

Michael Perito

NPL I obviously, quarter. And the credit of I on Okay. detail commercial overall, was some any the was – fine. went And particular or of noticed the gave really if the credits, pretty line in seem more Just noticed metrics curious you handful guys was where credit or just there’s maybe, seeing good they’re just I release. a I there were asset area still what think, update in the weakness, is, specifically. that that quality just – I widespread? curious you’re the

Joe Turner

that Very, specific would create of customers, nothing different with issues No. sort concern. that – systemic sort a of, was

haven’t credits. the really. point I other thing with vintage any older, and problems generated had is out, to post credits they’re really crisis, to – So mean, speak we Mike, commercial all

older-level all cases. and be happen there in the happened just or of something each credits, So customers to those older-vintage to

Michael Perito

last The pretty And trended has Joe. core last or just one Thanks, quarters. the margin helpful. three well margin. one on four for the Okay, over Rex

of banks Just auto, curious, from challenging. lot real a hearing estate, the the pricing competitively, that commercial is we’re getting consumer larger

the your also, of on asset margin of and curious there Just today. just on kind thoughts pricing, core near-term seeing what out market you’re margin

Rex Copeland

loan as to portfolio, Joe, as But can think, tied have, I LIBOR. as think of well do asset the can. to probably And competitive. about really portfolio is that $X.X-or-so in Well, you our billion I we as it’s far our pricing, I

loans as they mean… six know you been so newer have ago. higher I on I the that up, – we’ve rates been mean, say, coming generally that most been repricing at And than higher. are that portfolio months LIBOR rates moving were originating I’d has generally, of

Joe Turner

real tighter seem roughly to probably, is I spreads LIBOR, estate those competitive. Yes, seems be say, commercial the X.XX% spreads loans on the for would echo much to kind Mike, that, than the get can X.XX%, I’d of to seem most construction equal. part. it spreads that. longer-term deals spread Fixed-rate for –

both So on that be does deposit I side that seems up on on would agree that be the the asset well, heating the matter, to to for side competition – seem sides.

deals, – a reasonable feel like that’s and you we’ve we we’re as selective, still crediting be so why of like on have told have to producing And number can because offices again, on and growth we more we rates. pricing before,

Rex Copeland

of And deposits. variety to some draw to, selectively, we not do can wholesale-type reliant our We locations. a on or types may, don’t if deposit funding. need have we rates generate all some we’re increase in of we up so funds have completely that we to deposit various But raising on rates reprice

as to do we we and a have we variety can. and utilize those try So as of sources, efficiently effectively

Michael Perito

color, the Appreciate you for my for questions. taking guys. much very you thank Great,

Joe Turner

Mike. right, All thanks,

Operator

of Liesch from the come Thank with you. And O’Neill. will the next line Sandler question Andrew

open. now is line Your

Andrew Liesch

Hey, guys.

Joe Turner

Andrew. Hi,

Andrew Liesch

securities just Is Question level there margin, Feds’ here? from around down getting percentage pretty target liquidity and here, of assets. the that a funds a balance mix sheet to low asset earning your the

Rex Copeland

have where that I fund of portfolio off-balance-sheet is things Not what we – some a of I on-balance quite level. your do to capacity, to But We we liquidity. got target. observation do off-balance said, ability we sheet are some sheet. securities like probably actually, We’ve our some necessarily think, But low that a gotten to and are we bit down fairly it’s with accurate things. mindful

are correct, fairly So a you percentage. low it’s

Joe Turner

is it now. I trying too from would together lower it you’re say, put wouldn’t if I where see a Yes. Andrew, much to model, drifting

Andrew Liesch

just driven the clarify, been Okay. anything the Or improvement LIBOR? else that And is in besides is across types, that by most the yields loan improvement really in that? to behind then there

Joe Turner

increasing, rates No, I market think just generally. it’s

Rex Copeland

$XXX-and-something We’ve that tied million prime. also. got and to LIBOR are probably prime

loan to rates. the between $X.X in So are fairly tied short-term billion of adjustments two, billion, portfolio $X.X our

Andrew Liesch

Okay. Great. That my Thanks. questions. covers

Joe Turner

Andrew. right. All Thanks

Operator

come the [Operator Rodis of Instructions] And FIG line you. question will Thank our John with Partners. from next

Your line is now open.

John Rodis

Good afternoon, guys.

Joe Turner

John. Hi,

John Rodis

the Joe, buyback. just back to

it your that this to intention hearing? use what actively is it So year, I’m is

Joe Turner

Yes, I so. think

like price as think like we – for shareholders. is – the a I the trading, we like we at our stock our long-term investments our it

yes, so. So say I would

trading given like think we’re opportunity. I of that where we as level and the we’d an have, capital Given

John Rodis

of similar of rest as Or would throughout think – run-up Joe, we quarter, then, And far we of offset as you, about think that? growth and we growth should probably sort the see of look, of, the auto in this construction how a level do year? you sort the sort the

Joe Turner

of It’s the that I so guidance, to as growth forward don’t that’s – it’s far hard just we payoffs give to hard and so those good, on visibility predict. mean is not we goes. sorts as – John, and things why just

really commitments, earnings comments strongest the I are think, our you the to this would mean I release point in respect with I and in commitments, unfunded presentation been. ever strong, to they’ve the

offices. most pretty origination to I think would all strong be we in you have our activity good. continue or tell So volumes would can you that – would

– just I good have opportunities. you, So growth and you because tell do for exactly the a we do attractive on well don’t to very what visibility will great customers about it’s I can like be payoffs feel portfolio our a that. we me and our have loan structured I of that’s lots downs. pay hard And have tell just

John Rodis

I’m – I you can, any deal yesterday that you one about other That you Joe, had look can just did question. There in the extent sure, by you deal? add? something a just a Springfield announced to guess, Was it. saw think makes was color at, that sense. you what

Joe Turner

not of studied parameters the much. that have I that,

it on probably it. I wouldn’t comfortable be opining on or So commenting

John Rodis

against you Do sure. compete I’m not that bank? Okay.

Joe Turner

QCR the we do some. mean… you – Yes, They’re

John Rodis

Bank. Springfield The

Joe Turner

The they’re good and we as hope think we but competitors Springfield we do. bank, our It for a local just I mean, so specifically, typically not bad first. that and create good, general, Not this them in merge, thing – I we a think solid opportunity, do does when found I about a us. Yes, have does well. job. consolidation talking about it’s

John Rodis

Make sense.

guys. thanks Okay,

Operator

Ms. questions Thank over you. Polonus further I’d at to no And remarks. the for back to showing I’m turn further like Kelly conference time. this any

Kelly Polonus

any try and thank Well, I not, for forward we joining quarter. free to anyone have that. If please questions, to If you can does further me, us next assist meeting to you look today. feel again you with contact with

Operator

thank for Ladies does and today’s gentlemen, you participating conference. in This conclude program. your

You may have a disconnect. Everyone, great all day.

Great Southern Bancorp (GSBC) 19 Apr 182018 Q1 Earnings call transcript