Earnings call transcript Q4 2022

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Operator

Thank you for standing by, and welcome to the Great Southern Bancorp's Fourth Quarter 2022 Earnings 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] As a reminder, today's program is being recorded.

And now, I'd like to introduce your host for today's program Kelly Polonus, Investor Relations. ahead. go Please

Kelly Polonus

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

today, date forward-looking statements only statements, future that begin Before not remind Please financial which they as about need on place we make call, speak undue events you reliance we are may made. during I performance. this the do and of to forward-looking any

quarter Rex XXXX statements President -- forward-looking use on with fourth call more Turner; in Please me the the release disclosure information. earnings our and and our for Chief Copeland phone Joe CEO, on today. Financial are Officer. are

turn Joe. over to, the now call I'll

Joe Turner

us earnings today All for everybody. Thanks, right. Good joining afternoon call. Kelly. to you We appreciate

quarter were and net our from Southern. another quarter benefited We fourth share course XXXX rates reflected results per rising exceptional. Our interest earnings for Great market and strong income of

macro be basis, appears a macro our a a light other uncertainty ensuring be positioned uncertainty. focused company are interest to of that for as by is forecasted that forward changing environment for deal rate on marked On of in move headwinds We're and this that will XXXX we XXXX. year the great

it on some detail the for our over then questions. turn financial to As Then brief the up remarks usual, more company's results. I'll course, call get will Rex provide about performance open we'll into and Copeland, of who

period and The non-interest which In period diluted $XX.X or common large our million expense quarter some the share diluted the we to -- in net compared reduced interest XXXX per common $X.XX share, fourth XXXX. XXXX, income items, include $X.XX same million EPS. $XX.X did non-recurring earned per or in

as significant few 'XX well. had during We of income and fourth items quarter the expense a

quarterly and Legal between, and XXXX, of all, million first-three our that more of the related be did for the and us we would services having the of with a probably told million little that you quarter. then we $X.X of Professional XXXX, for those during than $XX.X of helping million fees, we and the First remainder actually quarters expense conversion $X.X professional to have expenses

an had rate expense and had the we similar $X.X will tax expect million, more adjustment, we income income an $XXX,XXX it's of reduced previous quarter sale during which quarters. be We or by income expense our in been going loss tax income investment tax to what although, tax forward

were ratios all earnings Our strong.

the was return improved X.XX%, our Our that return equity quarter net quarter and of on X.XX% the in assets from X.XX% on year was in XX.XX%, X.XX% our ago margin was interest XXXX. third

Federal although, slightly like rates muted. the It rising more will times I that a XXXX, interest the does from any going think be rising interest I cycle, look benefit late may couple rates it's at rate think Reserve in help this least raise to in us pretty

loans $XXX the as from far grew 'XX, quarter The end the fourth of loans to $XX go, slowed in million, million. As about XX.X%. growth our almost

the fourth the third flat of commitments from to but the from quarter, pipeline end end beginning the of up of Our the year. the loan basically was was quarter of significantly

So, probably the good loan volume although, lending in fourth quarter. volume flowing

year, extremely Our of non-performing are assets, end $X.X remained of loan very at credit levels low low. the strong, quality metrics very the million delinquencies

the capital little fourth quarter. bit in Our pick up did a

X.XX repurchase Total in We value, paid addition, in our the a Our of we the price $X.XX. TCE dividend during average of XXXX of from efforts to shares went ratio about dividends quarter. XXth stock an year X.X% $XX.XX. did in enhance X.X%. during million to our shareholder And at

shares fourth quarter repurchased. slowdown maybe about did activity repurchase our think the XX,XXX I in

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

Rex Copeland

the of and interest income will little you, I I'll net give talk bit more little just first Thank mentioned bit detail. some margin. there about highlights Joe. Joe a and

to fourth year Our million million the income increased quarter million in XXXX. about compared XX.X% quarter or interest $XX.X versus quarter of for the quarter, XXXX previous fourth in it $XX.X fourth the of 'XX net was $XX.X

third interest And increased from so of 'XX net as we income quarter then, for was million, the that bit $XX.X well. a

the Joe some interest market increasing of growing mentioned, interest in well, As growth throughout and contributed net balances and as some income rates XXXX loan 'XX. investment level to higher

And at increased when about XXXX. timeframe, third interest average versus interest-bearing yield in as you rate the it favorably QX we was said quarter basis a that X.XX%. points our loans deposits, X.XX% net on year margin X.XX% look to on so increased XX then basis the QX back of compared average ago points at quarter. The to earlier The and looking XX then the year rate that 'XX ago on same about

cash year increasing really again, the expansion also And, more and based and margin rates market loans investments was of equivalents and beginning the on the had those and over at throughout the kind into asset of cash mix, the where we in year. changed changes

generally As positive rate the seen have you've a on net those impact we've interest are numbers, before environment, rates and particularly a interest stated should in floating-rate upwards. rising through repriced income as loans as the short-term

if have rate Joe significant case magnitude to this we perhaps and we've the like interest XXXX still rate expectation but throughout that that least this XXXX. anticipate further. not we increases We Federal some will nearly that may rates more mentioned, generally be we the in at point hikes, is Reserve saw the But raises think at seen obviously the rate

time first will reprice there, offset some to that mature may So half through that but and throughout think also have be we of going move that as some we the and higher XXXX that there are beyond. benefits some deposits that of may we

less In balances changes shifted mentioned, The trending our callable I features deposits of some the within and away rate deposit time and deposits, cash retail maturities intermediate-term of As longer loans. are fixed broker increased there's we some mix account are have time some latter in to more from XXXX shorter half non-time -- trending a saw balances equivalents bit a higher. lower rate generally as variable and broker which little XXXX, with they the maybe some to little mix somewhat also deposit XX assets well. month deposits term

we generally from then loan overnight borrowings. time-to-time, and also bank home utilized So,

as So we that tremendously it loan assuming here. into Fed remain just start cuts, XXXX kind but XXXX, head will by think not have some that income may as of points to points. do we will expect reprice XX again, net We that basis if say XXXX, And raises by we we even interest basis rate another or solid, growth. deposits no but XX also rising supported the rates, said, our grow to

rate also today, reduce where believe, of just on impacting swaps have were so that beginning would income a based we position in a where are not net XXXX. of our that impact couple a settlement making are do rates we to be the right And And bit we that in counterparty interest forward May would we anything numbers on net interest will be now I payments that starting a a reminder, our will that.

change, obviously, tied are rates as So rate. Prime those they SOFR and to will change, but interest

we would on today, are have they have that. that would owe where on based a So payment we

income. to on move non-interest I'll

attributed the years quite rates non-interest probably amount on a quarter. that in our we -- down XXXX, first about all market. to obviously, could XXXX in much extent loans, majority, the we typically higher what still all, once were secondary mortgage not origination gain and which previous be the refinancing Obviously For sell mortgage to fixed income bit, purchase was than the sale of of lesser to slowed we the of after had started slowed down moving was $X.X but compared almost million a that loans. years. and the quarter, if big reduced on Really XXXX, couple down of year very rate ago of seeing the rates going at quarter of

are those entire versus fourth the of quarter that, impacted and things part. really last fourth the year So, impacted some for that's this quarter XXXX the most year that year

a that seeing of of on due merchants a to there's places change their half income fairly so of is to non-interest those but in latter not and relates the that hasn't changes. are our sale minor other sure it's point There it's income. a that point some of to different revenue headwind, this not fee provide been XXXX, like and There be changes -- little we're routing thing in seems bit now One this some may settlement route real transactions those. mention and it's to big going at material some of I'll can the we agreements We seeing had thing us a this little on some it some started amount smaller happening. process network and expiring

card the as And a decline then base. with half well that the also overall in 'XX last we of debit our of usage just customer noticed slight year in

we're see So as going card credit monitoring to card if with like continue, customers debit perhaps we some and the so looking were over that of to that feel has to well. we're usage usage we shifted seeing that's our that

year Non-interest expense $X.X for the quarter. about decreased the quarter, million our compared to non-interest prior expense

decrease the about though, the $X.X in activities to of year. and in million to to professional had ago conversion, the the not As $X.X activity, had again year Again, our conversion same type kind last year. net we $X.X legal biggest million of related this fees mentioned from quarter the related had was but a we fourth that fees. but related We million audit Joe one-time decrease

for in that. So, we decline expense did see the a

-- benefits However, quarter, normal year others we employee at of beginning that's are million the of of do in from some the company did there's are of they year, salary increases, their year. that throughout $X.X see the the prior just related lot folks a are our increase increases and about merit in an merit the same

XXXX market, that because job some those particularly of were a than of some increases previous maybe kind little bit in of in thing, had the of years. those Some been larger they in

a year XXXX's the did some XXXX. fourth production year fourth The and we quarter if exclude in that in Then for there that, was the offices efficiency compared extra quarter would was added just XX.XX%, quarter over numbers of the were XX.XX% a have that to also been XX% the ratio to there and same the year you in ago. Charlotte ago -- not Remember 'XX. Phoenix a and loan that ratio for during efficiency add little expense the expense

remain conclude the saw we in higher continue on as seen we've non-interest time, in the a at increase we've with then we 'XX, where we to and increases, may some got of annual salaries laws just year. So, states benefit costs while wage in an tight lot to quite environment bit also labor of expenses, that which And due to happen changes merit market operate. minimum an the beginning and various in happening again the a inflation

So retain as XXXX sure in we assistance especially make we conversion, people to roles. system to this our seasoned move with need provide forward lot core these a of throughout we that

growth in for and about The loan a expense. expense XXXX. Talk provision loan a an provision then $X to was to $XXX,XXX $X fourth a a $X.X related we net little fourth and quarter, related net on was the year, million of $X.X commitments. million have provision credit expense had reduction continued expense unfunded of to and in of bit provision our provision the in that fourth quarter related outstanding negative we unfunded recorded that to million provision quarter million $X.X was portfolio some losses, negative loan about outstanding million the portfolio last we in And

charge-offs of in quarter fourth recoveries fourth $XXX,XXX XXXX. the quarter compared of to were in $XXX,XXX the Net 'XX

around or full the think, $XXX,XXX were year, that. like For net I something charge-offs our

low again, So, pretty charge-off year.

to of do economy and we year. low rates XXXX pretty as problem are and assets go interest levels we the do of begin we higher mindful market While have into delinquencies, uncertain

thing wanted on taxes. income touch I is, to Last

For the quarter XXXX, the XX, ended tax In three was our rate last XX.X%. months fourth December year, XX.X%. effective was it

that interest rate other or tax or statutory of we due have effective some things that tax typically rate lower the at to Federal below Our some we have XX% that. and that produce credits tax-exempt is

or and by we where affected specific expense also we those operate tax is in liabilities liability driven in rates income and by tax states. various Our have of the states the level

tend overall do little a those up bump So bit. to tax rate our

a XXXX. an quarter of earlier, mentioned bit unusual in we had the adjustment of Joe fourth So,

to year taxes XXXX. some in in So, filed when various carryback our some the returns place rate related quarter balances we of updated our items its put deferred Federal and also state for into tax applied combined were receivable, payable in tax fourth income tax to the adjustments company and up XXXX claims and finished we the tax made 'XX, that

our made the we a fourth reduction, in final $X.X for million reduced adjustments quarter. those tax expense So

something not that effective that tax to little XX% the all that's give said, going either going be our a But good forward be to think about. somewhere in take Joe in think rates As that time. expect we to We or think side. bit will that on a ballpark probably level, around number XX%, somewhere overall

remarks we the that prepared concludes I today. That think, have,

this operator for to and time, it how in over questions. our we'll turn at reminding to So once questions again queue ask attendees for

Operator

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

please. question Your

Andrew Liesch

funding Hey, margin. It afternoon. pressure Question Good everyone. certainly upward sounds the the some on on like costs.

kick more (ph) opportunities here in? do at you expansion X.XX% think So might or the little be before there do think topped flaps a for margin you is the out

Joe Turner

pretty out, down. swaps as when well they guest. in, Rex though be I'd mentioned close topped so I mean, get tick the kick obviously, my it's say, to the

So, of no I out think topped it's out. kind

Andrew Liesch

And of the the reduction otherwise, of to am just basis up calculating maybe the this I'm wrong? on you. my Got coming margin back points direct XX with envelope I please I'm on or here swaps numbers, the me but -- off then maybe

Joe Turner

it $XXX,XXX think, I is about month? a

Rex Copeland

Yeah.

like Something that.

Joe Turner

probably our and million. million $X.X saying -- are XX That points leaves -- that is you sounds was that So, margin basis right. about $XXX now

how Our are interest-bearing Rex? assets much,

Rex Copeland

X $X.X million. points. quarter, In the they were fourth

Joe Turner

Yeah.

over be that. Yeah. So points, $X million would XX something basis a like little

Andrew Liesch

plateauing about declining your Got sounds year or correct that XXXX interest that Joe, quarter run you. on the release like Thank the right. fourth possibly not then in income you. rate, is net All the And just full comment number.

Joe Turner

Right.

Rex Copeland

Yeah. our was the rates of than XXXX, net was in second it half, year. And rise the half in obviously, interest because income immediately the didn't lower in

last a got quarters more the we year. lot and in benefit fourth so And third

to So, we're fourth talking compared about quarter. that's what

Andrew Liesch

questions. Got Thanks I'll you. much. my back. so All right. That covers step

Joe Turner

Andrew. Thanks,

Operator

Thank you. Damon of DelMonte [Operator Instructions] KBW. our the line question from next And comes from

please? question Your

Damon DelMonte

guys. doing today. afternoon, well Good Hey. Hope you're both

you're So quick perspective just Can in what you early how of give little about be pipelines this on question and kind quarters your feeling your loan for the year growth. on of a expectations growth. a might of the the coming just in part kind like-for-like

Rex Copeland

think I of like mean construction think, part -- Damon, thing the first growth I our un-funded our billion something at commitments, Well, year. $X.XX of from which -- I the loan to I think comes end the we’re or the

going were and be the to at of that's going substantially be end that's continue year, some to So, growth than so they some to the higher now. going to fund and loan that's that's

definitely I will is the Fed goes, as much not done, what origination estate commercial tell there real activity as think you as at there least was. far as has loan I have slowed down, nearly

and the as booking to the commitment an line, loans adding a we So, of issue be is could that's line. but loans I -- line probably bit see could I to going for unfunded construction far commitment see funding we're mean we as little what think off we not because are new unfunded more drop, is, commitment that

we don't I going forecast of guys have to loan to growth year own in would again, come your numbers, sort you up in this, But not mean like it's with XXXX. had we but say I be

Damon DelMonte

it. Got

Okay.

Joe Turner

which longer, think that projects The the got in, other are staying payouts with I thing. you is to mean, do I have us slowed thing factor positive

Damon DelMonte

it. Got

credit Thank figure in provision out Okay. kind with minimal charge-offs. obviously of very strong And That's trends helpful. net credit here, respect the to you. then underlying to trying

like quarter. do where the You X.XX level in or you you feel kind $X.X then XQ viewing XQ middle they How for think the today kind reserves this reserve and kind had the need of at maybe are how and and is where fourth million of about more and picture do at the tailed it quarters of $X.X and in we off had a here of couple like you're comfortable like XXXX, macro you level? build to million of

Joe Turner

seeing Well, to based we're comfortable. now, economy we're right turn, take what But if at we the level address have I were mean a to this that. think on we're I would comfortable

Damon DelMonte

Okay.

Rex Copeland

-- loan second was on that I quarter think the XXXX third a and of last provision based growth was that timeframe you in early the on on. going like saw the lot provisioning

if adding and move how were how might XXXX point see -- starts forward to to look we're that the impact. at we now now our economic grow recession. said it like kind like reserves didn't we as outstanding we're but if much So balances of bad to we in and quarter, Joe so looking that at our as into And fourth factors

Damon DelMonte

it. Got

margin just then, when forward June? swaps. on the repeat those you circle when know but to just in the And are do the you or -- May said of kick back I do in, and Could swaps, Okay. those impact they

Rex Copeland

'XX, first would settlement I on I we it's -- believe believe those. May the is of month that have a

Damon DelMonte

today, Okay. being math based happen And to the hit points, on Then around? basis if would margin XX was those thrown by get that were the right? like

Joe Turner

Yeah.

pretty that's think think I -- close. I that's

we when about ago, weeks it think month. a then I a was I few calculated think XXX,XXX it

Rex Copeland

ballpark. in Somewhere that

Damon DelMonte

Okay. And duration what's those the of swaps?

Rex Copeland

Out to XXXX.

Damon DelMonte

all That's had. I Thank Okay. that you.

Operator

John question the our [Operator from Instructions] And Janney. you. from Thank line next of comes Rodis

please? question Your

John Rodis

afternoon. Good guys. Hey,

Joe Turner

John. Hi,

John Rodis

Hope well. you're doing

Just, question buyback. just quick the Joe, on maybe one

the plan, XXXX did 'XX? about obviously active How of you buyback You fourth we slow new sort quarter. a in and announced for fairly pace but guys were should activity you think in the

Joe Turner

as it mean, of It right aggressive, where on at certainly sense. makes will than it we think have probably don't think we price. higher trading of be be we're kind like bought it, the -- sense, makes think price depends obviously we quite We I -- I sort may been a don't so now,

John Rodis

you'll somewhat as but aggressive, think active? still probably be But not Okay. you

Joe Turner

the -- full we XXXX. as were aggressive as in year Not during the

we sense we're capitalized it. handle still like definitely and to plenty and feel we well buyback So, able makes

Rex Copeland

takes, a depends little the too. It what on bit turn of kind obviously, economy

So we got into. to factor that

Joe Turner

Yeah.

Rex Copeland

it. at look we As

John Rodis

capital -- you other or any read Rex. Any thoughts redeploying any our Joe as other management, Just capital dividend, forth? the far and so as on sort know, than of

Joe Turner

I No, mean, stock not really, buyback. or would dividend be it

John Rodis

I today. where guess thoughts just Okay. I'm or that is M&A your going like anything

Joe Turner

Nothing the really horizon. on

John Rodis

you. Thank Okay.

Joe Turner

All right. John. Thanks,

Operator

question-and-answer This Joe hand today's back any the like for conclude further remarks. Turner program. of I'd the you. program to Thank session does to

Joe Turner

you. a right. everybody to call April. on Have being talking forward you we'll All Thank the appreciate look we in Well, day. and good to

Operator

program. Thank you, does ladies and gentlemen conclude the This for in conference. participation today's your

You Good may day. disconnect. now

Great Southern Bancorp (GSBC) 24 Jan 232022 Q4 Earnings call transcript