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

Great Southern Bancorp's 2024 10-K filing highlights a solid financial standing with total assets of $5.98 billion and a focus on strategic lending activities.

Summary

• Great Southern Bancorp's 10-K filing for the fiscal year ended December 31, 2024, reveals key financial details and strategic business activities.
• The company's consolidated total assets reached $5.98 billion, with net loans at $4.69 billion and deposits at $4.61 billion.
• Total stockholders' equity was reported as $599.6 million.
• The bank operates 89 banking centers across southern and central Missouri, Kansas City, St.
• Louis, eastern Kansas, northwestern Arkansas, Minneapolis, and Iowa.
• The company emphasizes commercial real estate loans, construction loans, and other commercial loans, funded primarily through public deposits and borrowings.
• The loan portfolio composition includes $839.7 million in oneto four-family residential loans, $1.55 billion in other residential loans, and $1.56 billion in commercial loans.
• The company's allowance for credit losses stood at $64.8 million.
• The company is subject to regulatory oversight by the Federal Reserve Board, the FDIC, and the Missouri Division of Finance.
• The company is also focusing on managing risks related to macroeconomic conditions, interest rate changes, and cybersecurity.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While the company reports a strong financial position, there are also concerns about competition, economic conditions, and regulatory changes. The decrease in net income and net interest income is a negative factor, but the company's strong capital position and risk management efforts are positive.

Positives

• The company maintains a strong capital position and exceeds regulatory requirements.
• The company actively manages its asset and liability mix to mitigate interest rate risk.
• The company has a diversified loan portfolio across multiple sectors and geographies.
• The company has a strong commitment to quality customer service and community involvement.
• The company has a comprehensive risk management framework in place.

Negatives

• The company faces strong competition in all phases of its operations.
• The company is subject to extensive federal and state legislation, regulation, examination and supervision.
• The company's future success is dependent on its ability to compete effectively in the highly competitive banking industry.
• The company's earnings are largely dependent upon its net interest income.
• The company's loan portfolio possesses increased risk due to its relatively high concentration of commercial and residential construction, commercial real estate, other residential (multi-family) and other commercial loans.

Risks

• Economic conditions could adversely affect the company's business and financial performance.
• Inflationary pressures and rising or sustained high prices may affect the company's results of operations and financial condition.
• Severe weather and other natural disasters, acts of war or terrorism or other adverse external events could harm the company's business.
• Climate change and related legislative and regulatory initiatives may result in operational changes and expenditures that could significantly impact the company's business.
• The company's loan portfolio possesses increased risk due to its relatively high concentration of commercial and residential construction, commercial real estate, other residential (multi-family) and other commercial loans.
• A slowdown in the residential or commercial real estate markets may adversely affect the company's earnings and liquidity position.
• The company's allowance for credit losses may prove to be insufficient to absorb potential losses in its loan portfolio.
• The company may be adversely affected by interest rate changes.
• The fair value of the company's investment securities can fluctuate due to market conditions outside of its control.
• Conditions in the financial markets may limit the company's access to additional funding to meet its liquidity needs.
• The company's operations may depend upon its continued ability to access brokered deposits, Federal Home Loan Bank advances and/or Federal Reserve Bank borrowings.
• The company's strategy of pursuing acquisitions exposes it to financial, execution and operational risks that could adversely affect it.
• The company is subject to significant risk if, in the future, it chooses to convert its core or other operating systems and may encounter significant adverse developments.
• The company is also subject to security-related risks in connection with its use of technology, and its security measures may not be sufficient to mitigate the risk of a cyber-attack or to protect it from systems failures or interruptions.
• The company's controls and procedures may be ineffective.
• The company's accounting policies and methods impact how it reports its financial condition and results of operations.
• Changes in accounting standards could materially impact the company's consolidated financial statements.
• The price of the company's common stock may fluctuate significantly, and this may make it difficult for you to resell the company's common stock when you want or at prices you find attractive.
• There may be future sales of additional shares of common stock or other dilution of the company's equity, which may adversely affect the market price of the company's common stock.
• Regulatory and contractual restrictions may limit or prevent the company from paying dividends on and repurchasing its common stock.
• If the company defers payments of interest on its outstanding junior subordinated debt securities or if certain defaults relating to those debt securities occur, it will be prohibited from declaring or paying dividends or distributions on, and from making liquidation payments with respect to, its common stock.
• The voting limitation provision in the company's charter could limit your voting rights as a holder of its common stock.
• Anti-takeover provisions could adversely impact the company's stockholders.
• Three members of the Turner family may exert substantial influence over the company through their board and management positions and their ownership of the company's stock.

Future Outlook

The company expects to continue originating commercial real estate and construction loans based on economic and market conditions. The company also expects its effective tax rate to be approximately 18.0% to 20.0% in future periods.

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 coming from other commercial and savings banks, credit unions, finance companies, and other financial service firms.

Comparison to Industry Standards

• The document does not provide a direct comparison to industry standards.
• However, it mentions competition from larger banks like UMB Bank, U.S. Bank, and Bank of America, which have greater resources.
• The document also notes competition from smaller and newer competitors who may be more aggressive in pricing loan and deposit products.
• The document mentions that some competitors conduct business primarily over the Internet, which may enable them to realize certain savings and offer products and services at more favorable rates and with greater convenience to certain customers.
• The document does not provide specific details about the performance of comparable companies or projects.

Management Changes

Legal Proceedings

• The company is subject to pending and threatened legal actions in the normal course of business.
• An agreement in principle was reached between Great Southern and a third-party vendor regarding a contractual dispute, with the Master Agreement being terminated and the parties card servicing agreement being continued and expanded.

Stakeholder Impact

• The company's performance impacts shareholders through stock value and dividend payments.
• Employees are affected by compensation, benefits, and job security.
• Customers are impacted by the availability and pricing of financial products and services.
• Suppliers and creditors are affected by the company's financial stability and ability to meet its obligations.

Next Steps

• The company will continue to monitor regional, national, and global economic indicators.
• The company will continue to evaluate and manage its asset and liability mix to mitigate interest rate risk.
• The company will continue to review its banking centers and loan production offices to measure performance and ensure responsiveness to changing customer needs and preferences.

Key Dates