GSBC - Earnings call transcript Q4 2020 | Great Southern Bancorp, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Great Southern Bancorp’s Fourth Quarter 2020 Earnings Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Ms. Kelly Polonus. Please go ahead, ma'am.

Kelly Polonus

Thank you, Catherine. you us thank quarter our and call. earnings afternoon, for for joining fourth Good Polonus, for Investor Inc. Kelly is This Relations Great Bancorp, Southern The December is for call purpose the of results company's to the XXXX. XX, discuss ending quarter this

anticipated cause Before materially to in call, we factors a results. about events number we that These from performance. could statements this and forward-looking of begin, financial to actual make statements you differ need future I the results remind to may are that subject

of and list factors, Financial see Turner; a turn on these For some other call now please I'll are Chief the our Turner. of and the over release public and me. Joe call Officer, Copeland, current CEO, earnings Rex filings. with President Joe to

Joe Turner

good you results operating quarter. Kelly, We to everyone. pleased I'm Thanks, fourth joining today. us that right. XXXX with appreciate report in the All and ended us for strong afternoon,

turn tireless time. associates' Our proud brief care then then unprecedented up questions. and this provide more during our CFO, I'll on and performance the into -- remarks results, of will in our Rex during some about efforts company's underscores I'm our in team. performance customers taking dedication it Copeland, of quarter the really our call over who financial the detail we'll go turn open and to it for our

year, the approximately mainly or the interest average of of write-downs in The share share -- of were compared year. company's higher compensation stock for per per purchased $XXX,XXX XXX,XXX expense, the as or share the stock $XX.X to $X.XX net The per noninterest an period $XX.XX. the as loss mainly mortgage lower decline provisions, the common foreclosed in same during from earnings our income, For common result million the real of a earned a shares of the well reflects sly ago drivers during quarter, fourth million $X.XX year higher loan higher We period expense, at as year slightly increase we repurchases earnings primary $XX.X year area. price estate ago.

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

Our was about ratio efficiency XX.X%. our was X.XX%, margin and

XXXX production surpassed operating in with was historically the of single-family climate. loan in mortgage produced $XXX strong We originations. loan commercial $X.X a million pretty considering low billion rate, loans. we mortgage Our record-setting And

XXXX, loan million, gross million unfunded amounts, total From increased Paycheck million loans, including Our $XXX on which during fourth at the of loans the $XXX balances $XX included but increased $XX.X million end Program books about outstanding our XXXX, from of the were loan quarter. of the XXXX. decreased end left end that Protection

million PPP fourth $XXX During balances quarter, of of those payoffs. million loans. our the $XX decreased About payoffs because loan were about by

our loan be began in customers. accepting to steady from if commitments at of And pipeline XXXX our can small first in Our pretty and shown strong. -- been it, chart, we continues January I you look is been that That's our pipeline fairly pipeline see shown period pipeline On in PPP the business it's December think, is to really release. of has that XX, steady. report, applications you our press

presentation, did want post about our cycle, portfolio loans, million. information portfolio, more about quarterly yesterday. we you our PPP $XXX What out I loan also first the did to During for believe, X,XXX I point that loan to we

net of loans. is XX/XX/XXXX. basis Total points quality asset at charge-offs assets think at $X.X during Nonperforming levels Our the I year. $XXX,XXX maybe were historically million, were X strong

our that I it to our -- really related think was that's or X loans extent about to indirect basis and primarily that in in was point, portfolio. the exclusively

net our rest I recovery loan had of rest portfolios much the of our year. pretty -- the during think the

quality. very credit So strong

modifications loan those total during our of XXXX. modifications, million loan continue down do the to we to were expect trend the as $XXX year. to down far end And at As

strong. very total tangible strong us XX.X%. tangible so very, to lots levels at of remains of XX.X%, assets capital going -- capital Total equity assets to equity Our forward. common of to tangible Common assets give equity flexibility

mentioned, XXX,XXX than of my over -- price at XXX,XXX Copeland prepared that I'll we a full I this That turn concludes XXXX. average fourth the the to purchased call shares stock Rex common As in did of little time. about higher purchase was at the during price. year than shares remarks. quarter obviously

Rex Copeland

Thank with to you, brief CECL. our Joe. of off start today want adoption I a discussion about

the the it period things the deferral a of in for that know, but elected We there was that of initially at implementation. end XXXX of was enacted part things, all optional additional this lot adopt January CECL legislation you to of was XXXX. As of of one it,

will going So so information the incurred of prepared the under adopt that. the methodology CECL prepared under Beginning and loss in the XXXX fourth is year we forward, quarter first quarter is and still the full of here be XXXX, methodology.

that allowance loans that flow through what earnings. be this is add will retained of all beginning an cumulative credit We'll So at losses. or potential will is portion we of year. for will relate losses the look to our and commitments. our also will increase the that net a happen There that have like our going for And unfunded the adjustment of allowance to

to about $XX implementation. balance after-tax -- million. earnings portion $X that $XX think There's the of flow unfunded be earnings. million loan million the to And in retained then And upon to effect decrease million retained $X through about about that, the $XX to the will of million portion of a we allowance so on will million increase outstanding for $XX that the

next the no and area should on the income to on the I income The have statement. So impact adoption margin. interest initial is want touch net

the investment for compared quarter by federal $XXX,XXX affected rate So about and for $XX.X we cash funds June million subordinated XXXX. increased interest XXXX March. $XX.X And the fourth securities of interest Net in equivalents income PPP also the Federal reserves, and of the like in of at related quarter expense million interest interest the our income Bank, additional issued was also the cuts lower-yielding net earning Reserve debt loans, to assets, to decreased fourth XXXX. to that

net XXXX a quarter So as in the also fourth fourth versus X.XX% XXXX. percentage and of X.XX% was interest the the quarter versus in margin quarter X.XX% the of in third

the while So XX versus declined fourth compare points XX points, quarter, deposits -- periods, average the basis quarter about on two if we the about fourth quarter loans basis yield rate decreased year-over-year. on the average

of investment mix, So equivalents compression yield margin fourth the quarter about fourth about cash million. asset equivalents changes the average in The points average increasing XXXX cash the XXX with most basis $XX $XXX quarter increasing resulted actually decreased on and average the XXXX. securities from between and million

for And to mix asset decrease the about of yield on then points about quarter of additional XX addition in basis in portfolio another with accretion change basis X points XXXX. less notes in FDIC issued subordinated basis for the the quarter fourth XX accounting the So that, XXXX, fourth points. was in accounts XXXX our June loan the acquired versus

periods. X.XX% and X.XX% loan of on net of additional and acquired quarter interest yield margin, net little was those deposit primarily for X X.XX% more accretion the quarter a month the costs So third compared quarter related you The costs. XXXX about interest the compared exclude XXXX the between XXXX core in of XXXX. margin to in fourth X -- to Speak was that increased when pools, deposit of quarter lower the fourth the bit to the core third

XX, XX XXXX. deposits lower basis was And X XX, XX XXXX. X ended XXXX, of So our points X points December during it XX, than it interest-bearing cost months the ended than the was September was December the ended was basis during it in months months lower

we'll beyond quite in as further on rates deposits least not maybe progress, and We at albeit XXXX. dramatic, the reducing in throughout maybe make expect interest first half our that

of affect million back were to million $XX impact a compare income, impact fourth here. that $X.X areas had to So versus Noninterest you about We've future the the years I XXXX, fourth that FDIC-acquired for $X of in two X $X.X that now. on XXXX. full in was seek is and when of accretion recognize quarter fourth just income million. about sales. increased year It the this moment And year positive for loans. will main basis increased that to quarter quarter mentioned on a margin. loan the obviously the I'll we of million, yield income remaining many accretable that for our accretion income expect earlier, into many, periods income of The the In fed points the net noninterest 'XX, gains that

secondary the them a So sell them we lot said rate, or which typically in we -- residential we earlier, as of of Many loans. of originated originated fixed are most Joe market.

That of on profit quarter a to quarter. better of quarter about sales fourth year performance, year $X.X XXXX little increased the fourth fixed some this assets. expense had in compared gains that our related $XXX,XXX income, XXXX. or the in the Also other So We some fourth some of versus previous loss increased to million XXXX. versus sales in a loan about quarter bit

rate We also our recognized a customers. $XX,XXX swaps more -- income on with in about little interest more income

to that salary comparing and we just of fourth and the That year-to-year. quarter had scheduled the quarter. where that normal we tax credit our customers. of loan year increases and prior to expense in are then quarter. partnership loans from income Noninterest were The swaps increase $XX.X $XX,XXX that with $XXX,XXX things And major a to with about -- happen million and on individual That had up fees of compared was exit to from increases quarter it So to also for when million related was do -- increases our about employee with benefits, increased $X.X lot individual these merit payments we an areas activities. the previous just individual the related XXXX. to had of year

And costs increased the costs. those were to because were division, were was more credits they income year premiums. -- had about $XXX,XXX insurance We had our previous previous increased year, mentioned, we insurance increase some to of us prior of had FDIC on there that compared to we costs available the incentives loan We In than the related significantly sales. overfunding I quarter. fund. That related about quarter the quarter. mortgage Insurance more in previous to those in which year $XXX,XXX profit the as the also the

And small in We so owned quarter we write-downs was the took those that Expense other remain. some in due estate December, then the real full in which we to three about and those was a mainly We that down by some prior write-downs that this foreclosed larger year, the some $XXX,XXX fourth we one XXXX of sold we period. to bank quarter, on were the had bit on, the had properties paying in exhausted more. higher the amount. estate year And of those, had had also where real XXXX. ones we on quarter we former little XXXX, fourth repossessions, credits. values two actually then other properties, X the And wrote in write-downs compared about

it So was in total, about $XXX,XXX.

total reduce quarter year ratio, were noninterest quarter. was the mainly compared interest the Our in to for ratio we and XXXX. That down efficiency maintain concludes expense offset in increase prepared quarter assets fourth average X.XX% revenue. XX.XX% efficiency But have. year increases, partially net the or of from able the fourth attributable XXXX to to that those increases was despite X.XX% this previous remarks to The to I in actually expense higher by XX.XX%, some the ratio

time, this you turn over all any have. and entertain it questions back at we'll So may

Operator

our KBW. with comes [Operator Instructions] Michael from first Schiavone And question

Michael Schiavone

capital for? XXXX? you I question, target was levels provide update do guys you your you aiming an And first wondering, priorities in my on are have So deployment can any

Joe Turner

I target have I of we don't level. we think tell plenty capital you, have think we necessarily a would capital.

priority would organically utilize always to capital highest to our be think I grow.

then More repurchases there be I be have our And would we stock rates, have really as -- our capital plenty so couple we came use that of that. utilize use an continues a be growth along, assuming stock, a we've there, And were we capital, could think dividend we'll that -- to it sense, opportunistically, levels. able likely would either plenty times. if handle there. outsized even third -- be made acquisition use From to assuming done could at the through of we of they're to special of at attractive capital

Michael Schiavone

and update income, fee banking service can bit pandemic continue? on kind on do if charges an And strength continue? normalized how you mortgage -- you Okay. the expect strength feel to expect also And -- a lows. the then you from that provide you do And that pipeline of just that to then you expect

Joe Turner

it? you don't why answer Rex,

Rex Copeland

service the they did normalize. things that, like yes, charges So and

bit. those similar of here in and and but kind of of the will some to charges, saw quarter charges, around. fees a with first find again, overdraft stimulus down, yet possibility is that's look because like, may another Unclear round nature, we service but the going may just that anticipate what when little what go So be we we that's that NSF a some checks other went checks first back things stimulus

should think from seem -- be quarter to transactions I that that And that continue. things the sort and be fees of I point-of-sale in normal. that generate nature in have would and of seem stabilized that, fourth we anticipate to

those I fee think of reasonable. so income And should be areas

that perhaps have thing. the number probably think lot, that on mortgage was have and a -- mentioned our kind would The maybe exact loan mortgage have but an ticked rates just up other of I that think you thing picked some. or a don't the but interest not up pipeline income, little, I I on anything, rates

also, people refinance that so of done lot so. And have already probably a could

quarter, quite we'll fairly loan on and brisk. be know fourth level see as sales we will consequently, it still but don't that saw in I of maybe profit same activity think So I maybe the the

Michael Schiavone

years? question. you out bank little on. of wondering if of that can guys working the roll Okay. last over how provide you are future the And prototype just a And was to I color the those then many expect my you on

Joe Turner

build think to we we're -- going have center construction. under or one banking I

our think in I of that. rollout be to we're modest going

I a X year going we maybe like out then Once this, that, with plan that. would or think after work go we're to a the kinks. think something have X I

Operator

Liesch Piper Our Sandler. from with comes next question Andrew

Andrew Liesch

volume you're amount number here, participating. you're on PPP, what of said dollar so early indications Just on or far? the the seeing you latest round Any replications

Joe Turner

that it We've we -- got be numbers the our -- as overall, expect first Andrew, I not would I the totals be think not would significant mean, as round. would

$XXX the did reminder, about first a million we As in round.

about XX% the XX% I that about In maybe the customers other think and are participate of draw customers that million in then those are spring. received applications. request. did in we've of rest or so first far, words, spring, And $XX participate didn't the back

spring. think say, probably level we some yes, to But was obviously right be the So going I it think now, interest. there's the I that it's would not at in

Andrew Liesch

Got it.

balance seeing then just that good And pretty here of looking quarter, are interest-earning sheet? liquidity I'm here at out Or at of quarter. cash? trying high deposit going the growth to sense held going a year-end. -- in that Okay. the What some flown is any where Has in in just to you Or get shake cash was off pretty there? trend to early be the is just

Joe Turner

end we a but another had lot of right then of the We've it December. at had year, the of Yes. of entire kind big influx throughout growth

earlier, this I'll now. mention didn't but opportunity I So take the

the point to net Fed have X.XX% XX, looked do that at the do balance, rate if negatively of and that table, column year the at December first earnings we end significant impacted interest That in right couldn't average had kind -- was time anything didn't -- our in -- of at because an park anything So interest the you at it with in release looked the equivalents to we average influx rate cash funds of as it we is by table at a you the moment. fairly spread. that

all. of some it, of not ton but seen a at here, deposits roll say out of we've those would So I

got that turned And We and had things things faucet like and a have. little we've bit, deposit a other on -- brokered of a national we've some kind maturing that we some that, utilizing we've and deposits out. rolling different been so off they're the

are with the So staying of nontime eating little or maturing into we're with the us. balances nature. that bit sticky that some DDA with But of pretty a our deposits

continuing next eating the X. kind through into excess levels high as Fed there, we're pretty or of funds go month but kind see so we at And are of we to the that

Andrew Liesch

Got it.

Okay.

first on it? you're So the not you another kind bit -- fourth before quarter, that, but -- recognition, that reasonable it the think way but maybe a here to then in be get maybe you're maybe of about roll of higher I maybe this good higher bit maybe liquidly lower? some PPP the just away, a also basis but guess, margin here that Is rolling quarter have funds what renewing together, or overall, little trending was a not funding quarter all the reported a higher, little cost letting weighing in benefit's

Rex Copeland

there that going Well, mean, replaced is I kind to they're replaced happen maturities about be thing that are time would not are be replaced to whatever -- the of deposit to that quarter have much rates -- today. what the going at or lower be anticipate we we're in know the at or things than either we that first going

like benefit see on balances And we've X continue move deposits, so move -- seen we'll point some month a which or to balance, significant a maybe basis I'm sorry, something down, that. are that. the average, The those from nontime rates

And going rates down more, to it little bit will to work basis be It's anticipate incremental continue be to so try big we not a big, but changes. those we'll points.

Joe Turner

well, away? seeing fee What amortized you're decline seeing the go -- loan the on margin PPP Andrew, the because probably -- will you're

Andrew Liesch

then time it will higher will on, as goes that here obviously, quarter. be this And Well, [indiscernible]. drift

Joe Turner

$X quarter, was the in annualizes fourth million. $X about I think about Yes. million I so to that mean, it

X%. I but really guess those yield about just us also giving loans, we're that's X% about earning So on PPP a

So maybe X%. it's

a fee. with huge not moneymaking yield big the -- proposition. portfolio So that even It's not a it's amortized

other X.X% able rolls typically in off, they're the would X.XX%. They to X.X% we're to to portfolio with loans. be X% to the probably X% replacement, closer to it to So would range, but be replace be X% if probably going that

So on other the there's PPP we're not a big yield making. yield between on loans loans and difference the

Operator

question with Our John comes Rodis from next Janney.

John Rodis

could the any and guess, under Those X specifically, that you hotel, portfolio. more provide still the I or deferral? maybe Rex, biggest guess, are buckets. Joe maybe your then on the motel the I loans color retail are

Or year? said is that a out quarter? throughout You expect you improvement, think that you continued plays but do the

Joe Turner

No.

sort happen would thought think there credit on I -- will those of loans, I -- be see whatever, And think classification, those obviously, look comment my million first with classified. whatever probably those on mean, at the impaired those those. year would loan I classified. ratably throughout rest John, we it you total -- of of of I the really if none mean, we our was don't We loans $X levels it was, loans see classification, are or don't

our see only. Generally, So credit. we to customers. They're just with paying impaired don't making just work a principal payment. they're continuing not We're interest

we'll So exchange cases, additional cash up. we've comment. that collateral would In pledged certainly, my be put first in interest-only to And for -- or some maybe they work payments, continue with continued yes, people.

there's but an table. customers been shown still in So faith, ongoing negotiation, this good and remain our have they

we is of the expectation total total of current Our year. would expect. see ratably decline that $XXX million That's throughout the what you'll sort

John Rodis

do the X.X%. core as this 'XX, that better Joe, of Do helpful, about PPP, at look PPP? up excluding you are than -- you do if look you were you loan growth How you for think X.X%? about loan just you loans can the on think to growth year, feeling sort That's Okay. excluding Joe.

Joe Turner

there's of when in the parts at -- years. down looks about have kind pipeline X tell. we it's that deal been, up. it for look X will year origination or speeds -- points said, I so hard the -- hard but and And -- fairly that our visibility I consistent our years, or totals, just X they've slows great so think you just -- it don't as to of a good. It's There be mean I so of

we know just we in that. have don't going So do is have the and have a position strong this, intentionally portfolio. -- ourselves a loan I doing. pretty feel We be where good put know And to about what I very competition

lots loan rates a things. than or the to of are for books money lots to what have at have them loan We what that's customers' eliminate lenders of portfolio attractive and -- less on limit our are long-term we guarantee, willing who we do

is an So think to which we've good does but it up. got thing, make portfolio, keep loan balances tougher I attractive it our a

saying, doing, I So I may. we're they continue think let to mean, where of doing the that's we're and way chips a long-winded John, fall what just going

John Rodis

And specifically portfolio, correct? Or of as runoff do -- the most indirect that far expect the has [indiscernible]? occurred, as you

Joe Turner

Yes.

that now. think million like I $XX portfolio is

John Rodis

Yes. Right.

The Okay. Guys, just under the question. buyback? buyback, what's final remaining currently one

Joe Turner

X just we Yes, approved a share John. million new buyback,

maybe like XXX,XXX. there's shares mean, I So something probably that, XXX,XXX left, around

Operator

And the there turn to for back to are closing I'd Joe no in the Turner Mr. queue. call like remarks. other questions

Joe Turner

the earnings us today, Okay. Well, we quarter after with appreciate and on April everybody talking to our call first being to forward in release. you we'll look

call. If Thank give Polonus you in a don't have Kelly meantime, questions hesitate please you. the to

Operator

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

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

Great Southern Bancorp (GSBC) 27 Jan 212020 Q4 Earnings call transcript