GSBC - Earnings call transcript Q1 2022 | Great Southern Bancorp, Inc.

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Operator

Good day and thank you for standing by. Welcome to the Great Southern Bancorp Incorporated First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to our speaker today, Ms. Polonus. Kelly

begin. may You

Kelly Polonus

Good this welcome discuss call the XX, results Tanya. The the our purpose for XXXX. March ending of today quarter afternoon. you, to And call. company’s Thank is to

to need make only these Please forward-looking any may about do I begin, place statements are the we remind that date undue call, forward-looking financial during and events speak of any statements as you they future not which we this performance. disclosure on Before Chief in today. for on statements first Rex made. quarter and over release Please forward-looking with I’ll see are earnings our more call the CEO, to XXXX our me Copeland, turn call the Joe Financial Joe President now information. Turner. Turner; and Officer, reliance

Joe Turner

Kelly as to said, for a were off and We afternoon, great there we to joining remain appreciate very us be and needs, the long going for of first is productive Good expect Kelly. view call solid. there’s what Thanks, our with are word operate quarter societal all us to start Overall, on uncertainty, mindset. you today. recognize our our earnings get really They Okay. economic always, -- and year. and focused customer’s continued another a economic if continued certainly as that we

to I’ll $XX $X.XX then compared diluted results, questions. XXXX, we Copeland, CFO financial of to our it $X.XX on As million $XX.X the more the share. Rex per to million about diluted the or per company’s open provide the In remarks typical, some brief quarter up turn go is over performance earned or and share, first call then we’ll detail for into

$X.X and about QX that’s were XXXX think from by million $XXX,XXX our entirely PPP on about result fees $X.X pretax down the I was million. our sales down XXXX earnings think lower of and profit loan I by almost QX about

very Our were performance ratios, earnings solid. performance ratios

assets average return on sorry, or, and $X equity. -- quarter, on $X.XX I’m share per the XX.XX% During X.XX% return

was rates X.XX% follow the there’s to The believe for reason the positive Federal significantly obviously suit, quarter. XXXX, raising Reserve should in assuming margin be would. is pretty rates no us, Our which LIBOR which talking about they for

million. quarter Our loans by $XXX increase the in first about did

production Our continues about up open office midway production XXXX. end $XX strong. did pipeline from loan Phoenix commercial XXXX. hoping office to and to loan expecting commercial more be open open of to the commitments during That’s at -- through are we are of office least million our quarter loan production We new in -- the one

model market hire experienced and of two number to have our an number that from them or case -- for well. you a Phoenix is the in we our we course will lender hired follow of the we in hire market Of into organization then we’re as within team will a going sometimes

make assets basis our end with from $X.X assets period quality points to the million, to end metrics In assets a $XXX,XXX quarter. non-performing XXXX. at Asset -- non-performing of of end of was continue be the the extremely first at XX decrease strong,

that completely almost a I will out we’re think, of I the which time first happening negligible, So, remember ORE, long time. be long, in

million. continues the brief of common you decrease give be go end total stockholders’ capital just the Rex very I’ll equity about our From this. Our XXXX, by to did over $XX snapshot. strong. may

ops capital, the million $XX and million earnings, basically think I we from exercises. from $X had increases

be additional decreases quarter our the large mark-to-market purchases, in Decreases probably, then $XX the result were the increases and and our $XX million the of of on capital decrease were or during total So swap about dividends. million our $XX million million. securities the were stock will $XX about

do. ratios the to we opportunity afforded still really want and capital do our whatever are -- strong to we’re So extremely

Rex. with that, think to call turn over I So that, I’ll the

Rex Copeland

add and just first Joe still shares a quarter I’ll our says, we program. almost about have under fair stock in stock Joe. XXX,XXX on the of buy we Thanks, yet did amount to repurchase authorized what about of back Okay. shares our available XXX,XXX

briefly The I’ll compared net had $XXX,XXX first interest couple the of talk to in we quarter total last net income and XXXX quarter gave about decreased quarter margin The this interest quarter the interest then Joe in net versus million interest of was highlights first on also net and first margin. XXXX. a of in loans $XX.X first income fees quarter So in million this about $XX.X year earlier the first quarter deferred that, XXXX, of pretty quarter you think this to Joe I was million. Year, this million first fourth quarter XXX,XXX $XX.X the significantly of income PPP dropped related of net fees Previous mentioned, deferred last had net We income was of our so year quarter. compare $X.X of -- fourth to year. million those. and $X.X that. accretive

the or to from million we’re fees $XX less down of PPP So, fees. much net so obviously, and about help there deferred positive

there’ll forward. So very flows into little income be going now that

Our quarter net compared X.XX% this were year in to interest last that quarter the of first and X.XX% the fourth in said, margin, of as in X.XX% XXXX. quarter year, Joe the first

our investments $XXX months mix us. and I $XXX loans the million During net under million the or just before so this the three grew about in did grew period we year have XXst that period. March some in mentioned in XXXX, asset ended shifts helped

March, able purchased we Federal in account loans So have Reserve funds that we securities securities, put significant which as had investments work to those and of of rates at higher. to were amount the most a in and were Bank in moved take those

quarter. a the be didn’t we to we the is But of on those what X.XX%. purchased expect first benefit to going in be of So yield around get lot we

also swap fixed into month as about rate it’s rate Federal well the rate agreement, we short, excess interest So LIBOR. first of X.XX% fairly quarter but and we a a one receive a did pay two-year and what of enter in of floating in were earning Reserve. an agreement We only the so we

profit been beginning. that was and so our doing about of as last a as sell we become sales said, for net the Federal originating loans. those will expect the increases some million the so of now was that a Joe we that the settlements though variable then or to longer in year the be from in of a related us obviously, at quarter interest we and a that, Non-interest origination offset increase is at that owe gain they exceeds Most those down down longer a two income do would rate I variable if before, the where net would point, we be $XXX,XXX on that by month positive to mentioned from sale are originate then time ago March, first fixed year. second the of compared fixed too, was lot in $X.X for of that see was income the loans a secondary that it interest X.XX% those in to is, point. rates income of loans we raise anticipate month term quarter and period as if And that one think on clearly to loans thing the us. well that comparing What declined We Reserve was $XXX,XXX volume and term for have typically periods. fixed And market rate LIBOR and we’ll

And we residential about first so compared in our were the increased year. to loans books $XX the net on the we that single-family of at quarter million where hold beginning

debit card quarter in income we and that entirely of a the year to transaction a our was of $XXX,XXX debit and bit first payment first was customers we bonus. latter and increase in That’s benchmark that. we point-of-sale on actually levels quarter so area earn by is $XXX,XXX non-interest due previous We $XXX,XXX fees. all increase of quarter. transaction this for then or a fees was last activity. -- extra year the compared achieved, usage in debit little so with increase had earning in Another of continued achieved activity we mostly we additional did year. to far about Other last a That it, one-time were levels fees income in card receive up to on see compared the half of we’re to year that almost ATM and that up the pretty about significant those. the Most also We’ve the cards

mostly included little where when of and about and benefits. and that’s most year so few quarter of year, defer of but bit there. we this certain things a but PPP more first into had impact income. had loans, this general thing to whole there that costs we That up an you did year. things. was that quarter this amortize this compared those another about Last earn incurred a costs have interest That And from year categories, that -- XX.XX% $XXX,XXX there annual you our efficiency so versus and being technical really, had significant change costs other that new last was that resulting higher normal portfolio. lower, The that accounting, we that we have credit fees really with of higher was last, first quarter, lot year really a opened for originate loan nature, quarter our Phoenix quarter year. quarter And year will non-interest well. bonus. up fixed was didn’t we loan we were in XX.XX%. this not market were related The defer in of, loans in on really versus in general we ratio was lastly, mentioned first the offset a of of things thing, originations, differed and increase any quarter. cross a and lot employment Also, just originate the that and with had recurring the but cost on well, last some that were kind expenses LPO things fees a did or primarily just would you We deferred the first higher losses, was have in That were raises, not ratio $XXX,XXX. this they in first associated also And why over nature there benchmarks year. first higher first to outstanding expense then, for salaried employee The quarter, provision last Non-interest than the efficiency as there. -- happening expense was the variety with lot a Joe or Provision those a that quarter versus year $XXX,XXX be the and first

a last there. think year, provision $XXX,XXX had I we

Operator provision -- relate forward that our So entertain a quarter unfunded to pick the $XXX,XXX in rate that loans again in for level investments year. Income this and quarter commitments the some on our of year we ask just negative prepared have and in Last you first year remind effective This our unfunded that let a that tax first going relates year. effective that we run taxes, and moving for slight to the difference on -- between that our exempt will quarter XX.X% how was That attendees the questions XX.X%. around our ago. last have $XXX,XXX was think provision from through to the a probably We portion year. and and last time based rate think had first have. the concludes tax utilization tax credit loans we year remarks XX.X% questions. and the we in here me to we tax negative is effective rates we probably XX% It be will once of

Operator

question from first Sandler. Piper of Liesch Certainly. our [Operator comes Instructions] Andrew And

Your open. line is

Andrew Liesch

Hey. Good everyone. afternoon,

Joe Turner

Hi, Andrew.

Andrew Liesch

margin upcycles, rate rates on Quest in lag based Question trends? us how right here out has been all, acted the your it on playing away? you hi. of just gotten see margin margin just cadence a there -- that a you hikes, can guys effect the at has do and remind benefit historical following you have prior How

Rex Copeland

though, would I It fast happened how depends moves, from tremendous late in hike, March market and quarter. how increments, rate Fed moves quick I that the loan positive the That there loans hike be a much on the LIBOR month We’ve would some we activity the and see would fairly side. got moving first didn’t impact say. have rate XX-basis-point We on XX-basis-point resetting the Fed rates that prime based in loans. that, in if one think would also that starts

LIBOR that rates prime based first of would month period. loans obviously, XX-day their they’re in So rate within the four anticipation immediately would And have too. extent move the and rate the above to sometime LIBOR moving move that already loans one been hikes, federal

already. things to kind starting happen of those are So

the… On

Andrew Liesch

it. Got

Rex Copeland

On is the pretty $X through us so some less checking much we’ve and and accounts, the billion deposits days, of through, level accounts of of got most funding all interest-bearing our and anyway then, funding at funded bank side, these non-interest-bearing than CDs.

So, those rate. to slower increasing probably be will

Joe Turner

Yeah.

have, loans rate floors we like like, than that Andrew, think that about market or I billion adjust something probably, monthly or often Rex, of a are… frequently, and million that, adjustable reasonably $X.X of more $XXX

Rex Copeland

going are That Yeah. to be…

Joe Turner

that … money, so immediately. the adjust are might not they in

we of So would you And probably adjust yourself. for loans increases. $X.X rate can then, pretty probably that or -- decide there’s would have I billion so or with rapidly adjust mean,

sort. really most a the As prime our accounts, are some transactional accounts Rex said, -- low of of reasonably got we’ve level

written think and a been industry been, you factors beta probably, probably those. a so of question what and how it’s our I move, amount they some of will factors the I quickly could beta were fair think last in there’s can they analysis cycle, there’s rate about So of just review

Andrew Liesch

Certainly.

thought that. on, Thanks book then, you that, Okay. do done are place feel securities to for you what obviously, what’s I How enough? more the purchases at process forward? we you’ve do that like the should in of looked took is going securities on March, the guess, looking And

Joe Turner

we’ve probably on be the But share a to I most do There we we’re the that. quarter. anticipated would done going in second done bit could of more say to generally, we’ve of little what I what lion’s do. probably think,

-- So should full the see now. we benefit that in second of the quarter we’ll

Andrew Liesch

right. questions. I’ll All taking so Good back. step know. much to Thanks for the

Joe Turner

Thanks, Andrew.

Operator

And our comes from KBW. next of Damon question DelMonte

open. is line Your

Damon DelMonte

Hey. Good afternoon, everyone. Hope everybody’s doing today. well

Joe Turner

Hi, Damon.

Rex Copeland

Hi.

Damon DelMonte

and keep guys estate kind of you’ve been I it’s pace and know been talk maybe outlook. acceleration particularly, seems origination is, growth bit loan you of want the and prolonged growth question come of able has you like your challenges I about It for loans. the commercial in one for been and to little a prepayments, that to about real slowed and first really guys. of bit So a positive producing strong your

rest up just can the kind guys? dynamics and a those how talk little of about couple shaping year you of So you for the bit is

Joe Turner

Yeah. hard of larger cases. $XX It’s just Damon. a we commercial real a I estate on loans, do make lot loans of mean, that, million have visibility to in lot the --

repayment little happen might have next have And so they you quarter. bit many, but six one can or first lumpy, following a can quarter, be they maybe though, a in little five be month of -- that the the the don’t quarter, then you

So, repayment know. I’m don’t slowed. say that activity not I permanently ready have to

As credit or deals the curve. the we of said our top like the near feel before, at are top of we

they So of attractive different to are lenders. a lot

you… slowed repayment we’ll be nice, And to would headwinds, Logic so, fight sure bit. be it through tell if I’m though, it’s continuing would little a

Damon DelMonte

Okay.

Joe Turner

those it’s it point. big gets that slow call moving as … as little up, But to rates aren’t our hard deals, go this rate at bit. to quite into a -- in be going the interested customers so

Rex Copeland

And getting have complete running them that we projects, sell… do and up then and customers

Joe Turner

Perfect. That’s right.

Rex Copeland

probably that’s get …so paid off.

going of continue that So go regardless to there’s probably on just of… some to

Damon DelMonte

Yeah.

Rex Copeland

rates … looking what the like. interest are

Damon DelMonte

Got it.

Okay. But quarters? growth good in of should -- payback, acceleration the you’re you an be coming absent that showing that feel you

Joe Turner

we don’t dependent the all It’s competition hard forecast things. why we that’s because of -- so just It’s on thing. growth, those hard to mean, of say, its -- it’s sorts much I -- of and loan level

we’re just Phoenix LPO far going have engine try have same the try as the improve continue over do things allowed years going to last and added to comments, our origination the and substantial forecasting us can’t to many one least things we’re add I in even year. try to as the to we my mentioned we to or origination by, going we loan at as do same do LPO, to more We’re this But to that volume -- that. totals,

Damon DelMonte

it. Got

Fair the to just continue it you expect this higher here level? side, you have guys from captured wage do of that Okay. inflation you Rex, kind then expense enough. or move this And up quarter do to first and salary costs feel on in

Rex Copeland

captured would throughout in lot it year. raises get Many though, staff, the think their of our I beginning A lot get the we’ve year. the of a raises of annual probably. -- at Yeah. employees also of the our

So kind about the wage been that’s there’ll wage is so say, be as in lot, would I competing that some some of would you we’re minimum that. a it, captured that, think, on of first same their read going of and But thing, certain such for happened hopefully, we’ve of company most would and I say be of so such that some and every for those the well. quarter, in I ways. can’t different articles and inflation all raising day because people in

So I surely But up picked can’t a big of it I I think. say done. first the chunk that quarter, in it’s here totally think we’ve

Joe Turner

August employers agree is, with a we to… a that going said tough are expect still it’s but in could through could Would consultants do expense, market additional will and us employee our quarter add for -- expense there than some to Rex necessarily Not we I occur expense. be others $XXX,XXX to a or process, are conversion maybe that that easily that And systems so employee XXXX. so through helping be that what that close for base. Yeah. of

Rex Copeland

Yeah.

Joe Turner

… yeah. really, that ballpark

Rex Copeland

Yeah. That…

Damon DelMonte

Okay.

August? So that’s or happening next this August

Joe Turner

of now with that next as that have result until -- to conversion. next August, by number, This expenses probably from a on that’s respect we Yeah. might $XXX,XXX August. going happening activity But increased

Rex Copeland

Yeah.

already We’re conversion. starting for that work preparation some

Joe Turner

Yeah.

Rex Copeland

here way of lot we’re it’ll long different already and working a in for it’s be future, And a no stuff. the it seems on like but

Joe Turner

will those drop the once conversion obviously, that, occurs, off. But expenses so

Damon DelMonte

it. Got

level release trending would like very we’ve then obviously time? reserve in more do you that -- likely forecast that healthy that call you one into reserve final or at, seen with Where of over strong just another maybe it, guys credits it’s very you question, see last to And Okay. -- pretty would you of you and you that kind you’re over quarters? XXX -- do you grow loans. for reserve think the And few like

Joe Turner

of and take Again, set a I and -- I let at loan stab think, portfolio. the I’ll is it size the it. mean, take appropriately reserve our our Rex at size then stab a composition of for

So, loan would think, in in assume would it increases to we our portfolio, as be saw allowance increases if right? fair the I substantial there be well,

Rex Copeland

Yeah. We’ve already adopted CECL.

will analysis losses. the we for we credit those out think we if set levels the down XXXX? that out think under so appropriate is factors and allowance numbers We there’ll CECL methodology nature. going got as lot and there. some we’re recession be So to be levels our level The level unemployment we loan things. it’s and into the back lots year issues next there’s And of to what that are then portfolio portfolio going to of talk things things economic think watched are that or I and be shrinks we also, to of things so with in employment that factor A the composition employment of it and and to impact, types really there’s be figure try of well those play grows that. things in an our we going thing. is outlook having kind into to factor will some in And of that that about of losses different a know will sometime our

amount see that, the do and depending other that like of portion unfunded it out and we unfunded also there. up commitments loans things fluctuates is the some part that of and on have bouncing that construction the we The unfunded and down and

that it. So on some to the of we’re anticipate does, a would into there’s don’t that like course, situation Depending few doesn’t thing be loan healthy different looking last a going year. our happen where I factors We that’s a year. doing reserve at of… portfolio would pretty be seem that lot play but it had this released necessarily

Damon DelMonte

it. Got

Okay.

Rex Copeland

years we to is of had into that net would last really least as the well. indicate allowance. If lot and at then we again, -- it we’ve the of if jobs have wouldn’t Hard for you said, that three play benign fluctuation level a probably a charge-off that like probably continues now in

Damon DelMonte

it. Got Right.

All right. that That’s much. That’s you had. Thank helpful. I very Okay. all

Joe Turner

you. All right. Thank

Operator

Okay. I to conference turn back remarks. now the would for like closing Kelly to Polonus

Kelly Polonus

look forward next Okay. joining Well, call us quarter. to take Everyone we we everyone appreciate today our care. and

Operator

This concludes conference Thank participating. for today’s you call.

may You now disconnect.

Great Southern Bancorp (GSBC) 21 Apr 222022 Q1 Earnings call transcript