GSBC - Earnings call transcript Q4 2019 | Great Southern Bancorp, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Great Southern Bancorp Incorporated Fourth Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]. today's recorded. that advised be conference maybe Please

I to with your like to Investor conference over hand the speaker Please ahead, would go now Relations. ma'am. today, Kelly Polonus

Kelly Polonus

Good to discuss company's call. Sydney. Thank XX, to ending the the and XXXX. this is of results our you, call The afternoon quarter purpose December for welcome

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

any forward-looking should which place not reliance on date made. You as only are the statements, of undue speak they

subject that projected. are materially results statements from to cause differ These a number factors to or could of the anticipated results actual

list Officer, statements CEO, on President a see and today. some our Rex please the Turner; call earnings factors, the disclosure Chief and Copeland release. For Joe forward-looking are Financial of fourth of these in quarter XXXX

call the Joe. turn now I’ll over to And

Joe Turner

call. joining you Alright. our fourth Thanks, to like Kelly. earnings thank would Good I on us also for afternoon. quarter

go high As Rex, I at turn into it will call and up over we'll on income then level and performance for statement a is then go the will our who more to company's open detail the usual, over little questions. a

glance had our a you've at least chance to release. Hopefully, earnings at

share. full share and and common If common at $XX.X we during rate especially achieved given the ever and net have had of seen the year, you’ve income you diluted highest a annual quarter have million. $X.XX interest $X.XX our earned competitive we that solid million the In per we quarter -- environment. the $XX.X per We

X.XX%. common return equity during metrics XX.XX%, return were performance Our assets on quarter on the

ratio fourth was quarter pretty Loan in margin production X.XX% XX.XX%. Our was and efficiency solid. was our the

unfunded $X loan million. construction balances that commitments, $XX balances noticed loan include million which our about probably You’ve were balances about gross our loan up but down were net

$XXX were balances about loan were up loan balances full million up and $XX XXXX the gross million. net during Our year

lending to quarter accurate. are little be more maybe it still getting bit seems environment and does think And shrinking that’s last we think The spreads previous products. difficult. seem -- our that loan all on to a little be credit a competitive. getting said I I spreads quarters Maybe bit more

dramatic though. not It's a thing,

a estate non-real look estate then $X like were the higher our look of earnings sections on disbursed that and pertinent the release years, the year-end loan construction can the or of loans, at And proceeds was and end table and have two two and other you real table, was over like most chance, a you not the but unfunded we last commitments maybe unfunded one that, than $X.XX our loan commitments. Those significantly, If include you X be billion. XXXX, unfunded billion construction are at $X.XX that show year billion, at our sections slightly previous Page XXXX. what total something XXXX where a then to on which and of slightly really and commitments just they remain $X are if year billion

down still robust relatively are but slightly, demand. we So have loan

the be history. Our best continues really to pristine, asset quality in our

non-performing Our million down million. $X.X during balances the year asset to went $X.X

something points I or So on basis XX assets. guess

the increased by Our exceeding equity end strong $XX continues threshold. XXXX, stockholders’ about common significantly, regulatory our capital be From XXXX to total of to million.

just on swap, balance retained $XXX million our portfolio value result sheet and on unrealized related of that appreciation or swap, that but security of earnings. sale as our $XX -- I was of that the our -- securities for available appreciation think is million increased rest about a of to

during and of XXXX. end the $XX.XX increased share from $XX.XX per to value the from $XX.XX at quarter last Book

at tangible common tangible strong to ratio is asset Our also very equity

XX.X%.

paid recently you've month. $X.XX fourth And this special sure I'm earlier quarter just we in announced our declared and share $X per we dividend another And noticed per common that dividend. share obviously

I'll turn to this prepared over my concludes the Rex That call remarks. at time.

Rex Copeland

Okay, thank about you, Joe. margin. net start out I'll talking interest

did in fourth a quarter this mentioned the the X.XX% quarter of little of see in earlier, X.XX% quarter third quarter margin and the compared X.XX% -- compression in bit third As versus Fourth year quarter. we last the third to fourth year Joe was 'XX. the in

our in borrowing. on in point with experienced other interest the loan paid A quarter basis portfolio XXXX. rates our partially And to interest and offset of decreases to assets. related average that of was deposits, on about earning compared some lot we that XX third yield average the So also decrease other decrease we and

you as tied in year lot in primarily LIBOR rates affected Reserve those and the latter part which know short-term couple the cut September we are to of rates, times short-term a a cuts Federal that of So October, rates index. rate have loans and of that

from additional was fourth similar yield quarter the points quarter fourth The to on in net XX in fourth of net continued been this and where margin of positive we've the income impact or knock third in year, that accretion margin increase net quarter and had quarter basis of XXXX. interest yield the the 'XX have of interest about interest we

XXXX year of net third the up down little quarter Our quarter dollars but ago income a interest a were bit. from from

dollars compression down margin continuing as the bit are but of here interest net Joe recently. bit percentage a pretty little a little our seen a we’ve income as been as good has see, to most have So, mentioned, we come

transaction interest into. too balance note million of rate record to I'll thing $X.X swap One interest about fourth the entered we did we've in the income related that is sheet quarter

of a income enabled particular bit of interest keep to that part level has the loan to portfolio. us higher related little that So

for of a here, $XXX,XXX income, really fourth moment in The couple about a ago. I'll increase income non-interest had to talk a Other year couple income, about by a quarter Non-interest increased the things. categories. the we compared of was

had income program. into and our that entered $XXX,XXX from related about in swap about certain tax that rate we to the that, our swaps of then XXXX. we've $XXX,XXX customers and fee So related with back-to-back income exit credit of the some had to interest partnerships We

sale of We a loans, in some of more charge service versus rate ATM compared also Offsetting sell origination was bit secondary XXXX fourth we fees some that the XXXX. gain loans, of saw XXXX. loans primarily market, fixed decrease quarter period SBA and our the of in loans, single-family which little on the a in and to

in well mentioned Non-interest year quarter up on ago. we're earlier and employee our about a still operational expense $XXX,XXX the expense, increases Joe biggest drivers Non-interest the expenses fourth tracking in efficiency. loan ratio The and primarily containment incentives annual employee compared to Denver also efficiency some compensation, and some but we were to in salary lending Atlanta staffing operations XXXX. lending, the incentives, new in then including areas, increases in merit late include opened offices will related areas, which were and benefits additions

little operating We to on and upgraded new expenses to related system. and mainly also occupancy then depreciation bit a increased our also some on had equipment higher software ATM related ATM/ITMs years

did in credit this the to FDIC continue have there. a continue We insurance quarter also did premiums. to We have

FDIC XXXX. So, fourth insurance in we to the expense didn't quarter of have book

just mention One CECL. is implementation of last that the thing I'll

here We we're will a probably X% and primarily quarter in have continue been I will we some X% reflected equity, on do -- think that. that that to decrease expect first time CECL working we about implementation implementation be know have or that finalizing said quite our based of in for You finalized last our quarter and gone for the our just or accountants are of first this and XXXX, pretty review with finalizing through that on of everything quarter much auditors in year. have the we of all we now the

So how for with concludes my to prepared our queue up again that, ask questions. over it me and attendees remarks, and back questions I'll let do remind to to operator that turn

Operator

And Andrew Liesh proceed from Piper our with first your Instructions]. [Operator Sandler. question with Please question. comes

Andrew Liesh

Hi.

a here, maybe Just benefiting million. start -- base? next a $XX.X FDIC bit going the to about up of what’s year, to lack -- expenses creeping you expense insurance. run view with towards the But this do little from guys into good wanted look How at run is million rate the $XX from

Joe Turner

Rex?

Rex Copeland

try Rex. is that to bit take This little a I'll Yes. here.

of things we a that We going are there think to highlight really -- that is new quarter. tried have ordinary implemented that and of the mentioned on. anything out the was things I couple there that we in

give not think lot do I -- of we materially there’s guidance a forward don't So, on not necessarily anything I sure mean in really unusual it I'm but quarter. the

Andrew Liesh

Got you.

line salaries item? employee Okay. increase or that benefits, The anything and course business of is was normal sequential in unique a in just that

Joe Turner

the -- that. on commission the profit the on originators essentially we're loan think increased along paying with sales, a I

increases. And So, to that's then I would related chunk merit Andrew a normal as of kind it big that. Rex said, just say of

to have some we related increases We LPOs had opened. staffing

it. of So, be that probably rest the would

Andrew Liesh

going just think helpful. similar under is have that’s see or you of do what CECL, to how Well, been be Okay. guys And back it to play then switching you new doing the kind you what out to ahead? differences modeling. Should provisioning

Rex Copeland

would This obviously to slightly going charge-offs. be is impacted by it’s it's to differently, going I maybe impacted again. Rex be or -- say still

charge-offs So, that will impact the then we our up moves the portfolio. allowance in or Also, have level of growth just where down.

you books. more a growth those coming would provide new are that need loans that your have, the you presumably more to So on for

or to the think negative like economic future. we to that's So, look activity more economic I periods going factor we to have done also economic that into we piece going be we've in because the is our the do quarters, outlook positive different next currently. of before -- the for what out in And forecast a or be terribly than forecasting it what economic not is that more the to last think it's see starts the than is outlook the change, if we and few

Operator

question Michael next our with Perito And from KBW. comes

Michael Perito

last impact if wondering your the kind question. kind hoping comment that your specifically guys they are what I the you Initiatives customer with reading was guess, have kind of you kind expand you learn to analyze might vendor third-party that two, bit And you like engaged to analyzing any you learn experience, bottom how your where wanted making that the a that have facilities in-branch of have forward? on guys I release, analysis do decision can want you section, or and part through Business what of expectations then night. that going of it customer I of at Joe of two to to I of in-branch experience? little regards think from you're start additional what your and last And kind One,

Joe Turner

Kelly start I'll to here me to then it. and Well, Polonus able be and add with she may in is

built expectations customer that sure to make meet banking base. we understand I think and center changing mainly a the that among it demographics a want expectations. is, have And changing kind system, to those and just of is we our maybe network we structured branch

I So serve the centers, make identify better. able help think most changes focus we'll they'll those to them maybe like to resources think what be to And then physical we centers, have banking feel where our potential. is might us to we banking the do we customers that untapped center banking on and

are thing, that? Kelly, -- we so some that have The us some that help interested do add some to you may ideas have second there. in in they would expanding markets to anything

We Second probably don't work your first kind to let before bit I concrete second little that know them would some but have saying that. Mike, more get call, expectations for rather -- or maybe I then on this on and quarter part on a anything mean quarter of our have this something back we call, little I of might question, a we

Michael Perito

there you're little to other and good for higher where of you kind And I thought recently. bit was if businesses of guys Joe, little growth about then bit us? you still that just -- could the obviously are curious I true and was opportunities. kind expand been of about that more a of optimistic was I competitive And cautious, being as curious dynamics for think flyer lends opportunities. lines on velocity if just a growth maybe the all think of a market I the or construction was curious, you there's equally business certain on that’s a wondering

Joe Turner

so. wouldn't No. say I really

what I think to having is benefit relatively and Denver offices, they is the going us are Atlanta new.

to be those to grow. we as balances I we be They're we -- cross-product commercial loans paying and mean made out have hope don't of be are offices, offices, to off that's about able going big but as going be to kind line. to So don't we a real hopefully going lot construction of some before, have a estate of those think of that certainly I some well. talked out

to City Kansas And mean too. a City to try from area. hopeful of the to we're our have time grow things we're not grow We're -- a We not in in -- officers also hired next we balances Office we over able going to this way in going there million, C&I $XXX we will try C&I C&I to a by Kansas do couple million do that not competitor That's profitably. I in time $XXX be and area but think year. the

Michael Perito

payout, you the maybe to stimulate Okay. this today. you materially too in Is that would flexibility else capital your dividend you us refresher special then obviously like a on what beyond some on the pump fair you drive expand where at to the the give on that capital, of wondering capital special to of row. years and and a on prepared let I up just I and kind to way summarize growth seems you mentioned about And view I based upon lastly it is just [hook] it that’s organic just think mid-single-digit kind anything And on low then mean a are just there two give if said? was remarks in dividend could maybe to point. the not but payout Board's you

Joe Turner

No, a I of fair it. pretty think summary that's

Michael Perito

near current then and just authorization? on term us Okay. the can your for repurchases remind And share what's just you appetite left

Joe Turner

have Rex, that? do you

Rex Copeland

left I right. exact it's something are it's like number authorization. shares on and that the That's over don't have but the still -- XXX,XXX

Michael Perito

selectively view with preference a of as the method your on and dividend the this on to still point? or And that in of just deployment opportunistically capital kind based any market use at change conditions for

Joe Turner

on we for the the I as preference -- think depending and and do dividend another returns capital at then just of this a do use so forth. point, potential we repurchases view view share

Operator

you. Thank

Jenny. proceed Our your comes with next question with Rodis from question. Please John

John Rodis

in mentioned like you Is flat fourth in bit. in there Rex, last your quarter seemed unusual service the fourth remarks, a from and little charges few drop to quarter big years. anything pretty they're up third through a service charges quarter in were the typically down It the there? the

Rex Copeland

not charges. all there’s that know service I if Yes, that much it’s don't -- is related to

I it ATM think -- maybe it is is fees.

probably of we So one that that But ATM net together line group kind say on all in it’s item. I fee. would

netted there, income. fee are as that well just as gross expenses some there's So in the

are and And so, we saw higher bit to then a little bit related a it. little less that expenses income

So the of was net all that whole on. rolling

Joe Turner

going conversion -- and between some current we're it guess vendor. describe vendor net numbers. have that way a that our And there from Yes, been in that's related a to in ATM to system through And those fees the converting of I the conversion new the is systems vendor fees, we're kind of to additional best us.

-- think So much I probably conversion as and -- that anything. explains it that as of

John Rodis

makes Okay. sense. That

Joe Turner

conversion to hopefully during kind that -- completed quarter. this We expect of this during be quarter

that able to should of quarter XXXX point line be our the second item. So, quarter on

John Rodis

If year, think sort fed Okay. on hold is a just you've think seen pricing quarter question forth and there's the more do you loan you or pressure the in X.XX%. another do so on given this bottom about? of that the Rex, talked still you margin core And margin, some of

Rex Copeland

Yes, of couple play there's -- into pieces it, a obviously. it's that

that. from billion to see of reset tied LIBOR get month LIBOR we'll So any month down if that pressure are We every little bit a loans of month. $X.X about and further, one goes got one

been our back lot. may we're down our run on. that may We are rates be or allowing loans at -- business higher auto One maturing also we've new not the given be loans have to they within consumer might any quite example putting or be, a whatever that paying than may period,

And a X% of lot type maybe those so are X% rates. to loan

different probably And categories higher those as so in as not product are. rate we're putting maybe back on

could of Now, play anymore thing only that's kind million there's not big that that's as left, dollar that because the amount well. but it a into of $XXX something

do the accounts. and over maybe the months. rate. on those Also time they a have to the happen are or been Then we year more, months on several maturities accounts on next what books seeing lower side, CDs higher rates have several as for can Those we'll non-time on in or liability we the a

with think renew affect we whether that those it. going or exactly will of those presumably we out. rates benefit drivers see CDs lower replace on hard new all those. So to I the predict they it's some to play It's are will how But

John Rodis

quarter this guess down is I something. basis what I think mean, or already I like LIBOR XX points

compression which lines, Maybe the of more So I equal. pace we just last sounds quarter, things probably like a sort pace maybe it not bit all between quarter? the not this mean, saw little reading -- the

Joe Turner

Yes, as I the to margin loan bit. credit forward our X.XX of variable should versus over replace repricing said, rate difficult It's things Rex next loans, we Rex of of portfolio rate should obviously the a improve spread. going rate -- to But the so year the lose repricing predict. two many said, over lot CD be rate our thing fixed big like variable X.XX with over a And going little course us portfolio. think as to are of that for of spreads. LIBOR If LIBOR predict loans variable the we you difficult drivers the our are

sorts So, some you should moving. to to LIBOR of point is tend to regardless whether opposed index as the be we loans out, prime, the helpful. now. our X% over paying right of move things as to that an We fed And things where have -- things. competitive hard CDs pressures of kind those have in-town for we It's do think competitor I predict since

feel certainly. we quarter some impact the LIBOR crept down of So, are and that to has going this

John Rodis

win is Bowl? do Super Well, question. is think to you Okay. going Who the easy here an

Joe Turner

business. obvious an that's Well,

John Rodis

Are you Miami? to going

Joe Turner

No, watch the going I'm from not comfort I'm own of going. it my to home.

Operator

any you. for back Kelly Polonus not to any questions further I'm it And further like at to time. I'd turn Thank showing this remarks.

Kelly Polonus

Well, this and want to We the your everyone concludes conference quarterly you. day. rest of us for today enjoy our call. thank joining Thank

Operator

concludes Thank and you gentlemen, today's conference. this Ladies for participating.

may now You disconnect.

Great Southern Bancorp (GSBC) 22 Jan 202019 Q4 Earnings call transcript