10-K: Great Southern Bancorp Reports Solid Financial Position in 2023 Annual Filing

Great Southern Bancorp's 2023 annual report highlights a stable financial position with total assets of $5.81 billion and a focus on strategic lending and deposit activities.

Summary

• Great Southern Bancorp's consolidated total assets reached $5.81 billion, with net loans at $4.59 billion, deposits at $4.72 billion, and total stockholders equity at $571.8 million as of December 31, 2023.
• The bank operates 89 banking centers across six states, serving approximately 131,000 households.
• The company's loan portfolio is primarily composed of real estate loans, with commercial real estate, other residential (multi-family), and construction loans representing significant portions.
• The company has increased its emphasis on commercial business loans and has expanded its commercial loan production offices.
• The company's loan portfolio is diversified by loan type, industry and market area, with the largest concentrations in Springfield and St. Louis, Missouri.
• The company's total deposits were $4.72 billion, with $3.48 billion in Missouri, $696 million in Iowa, $339 million in Kansas, $149 million in Minnesota, $22 million in Nebraska and $34 million in Arkansas.
• The company's allowance for credit losses was $64.7 million, with $1.2 million allocated to specific loans.
• The company's non-performing assets totaled $11.8 million, representing 0.20% of average total assets.
• The company sold $154.9 million in oneto four-family whole real estate loans, SBA-guaranteed loans and loan participations during fiscal 2023.
• The company's net interest income was $193.2 million, and net income was $67.8 million for the year ended December 31, 2023.

Sentiment

Score: 5

Explanation: The document presents a mixed picture, with some positive aspects like asset growth and a diversified loan portfolio, but also negative aspects like decreased net income and increased non-performing assets. The overall sentiment is neutral.

Positives

• The company has a diversified loan portfolio by loan type, industry and market area.
• The company has expanded its commercial loan production offices.
• The company has a strong commitment to quality customer service, competitive products and pricing, convenient local branches, online and mobile capabilities, and active community involvement.
• The company's capital ratios exceed regulatory requirements.

Negatives

• The company's net income decreased by $8.1 million compared to the previous year.
• The company's non-performing assets increased by $8.1 million compared to the previous year.
• The company's net interest margin decreased by 23 basis points compared to the previous year.
• The company's efficiency ratio increased from 57.05% to 63.16% compared to the previous year.

Risks

• The company is exposed to risks related to macroeconomic conditions, including economic downturns, inflation, and the impact of the COVID-19 pandemic.
• The company's loan portfolio has a high concentration of commercial and residential construction, commercial real estate, other residential (multi-family) and other commercial loans.
• The company is exposed to interest rate risk, which could impact net interest income.
• The company's access to funding sources could be impaired by factors affecting the financial services industry.
• The company's strategy of pursuing acquisitions exposes it to financial, execution and operational risks.
• The company faces strong competition in the banking industry.
• The company is subject to extensive federal and state legislation, regulation, examination and supervision.
• The company is exposed to operational risks, including cybersecurity threats and systems failures.

Future Outlook

The company regularly evaluates its banking center network and lines of business to ensure that it is serving customers in the best way possible. The banking center network constantly evolves with changes in customer needs and preferences, emerging technology and local market developments. In response to these changes, the Company opens banking centers and invests resources where customer demand leads, and from time to time, consolidates banking centers when market conditions dictate.

Management Comments

• Management believes the Company will continue to be competitive because of its strong commitment to quality customer service, competitive products and pricing, convenient local branches, online and mobile capabilities, and active community involvement.

Industry Context

The banking industry in the company's market areas is highly competitive, with competition from other commercial and savings banks, credit unions, finance companies, leasing companies, mortgage companies, insurance companies, brokerage and investment banking firms, financial technology fintech companies, and many other financial service firms.

Comparison to Industry Standards

• The company's market share in its primary metropolitan statistical areas was as follows at June 30, 2023: Springfield, MO (13.6%, rank 1), Sioux City, IA-NE-SD (7.0%, rank 4), Davenport/Moline/Rock Island, IA-IL (1.3%, rank 20), Des Moines/West Des Moines, IA (0.7%, rank 21), St. Louis, MO-IL (0.5%, rank 35), Kansas City, MO-KS (0.4%, rank 34), Fayetteville/Springdale/Rogers, AR-MO (0.2%, rank 32), Minneapolis/St. Paul/Bloomington, MN-WI (0.1%, rank 71).
• The company's total market share in Missouri at June 30, 2023, was 1.4%, or tenth in the state (based on FDIC market share deposits).
• The financial institutions with the top three market share positions in Missouri at June 30, 2023, were U.S. Bank, UMB Bank, and Bank of America, which had a combined market share of 29.9% (based on FDIC market share deposits).

Stakeholder Impact

• Shareholders may be concerned about the decrease in net income and the increase in non-performing assets.
• Employees may be affected by changes in compensation and benefits.
• Customers may be affected by changes in interest rates and the availability of credit.
• Suppliers and creditors may be affected by changes in the company's financial condition.

Next Steps

• The company plans to continue to evaluate its banking center network and lines of business.
• The company plans to continue to monitor regional, national, and global economic indicators.
• The company plans to continue to monitor its loan portfolio and make adjustments as needed.

Key Dates

Keywords

financial services, banking, loans, deposits, real estate, commercial lending, credit risk, interest rate risk, capital, regulation