On Thursday, Great Southern Bancorp (NASDAQ:GSBC) discussed first-quarter financial results during its earnings call. The full transcript is provided below.
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The full earnings call is available at https://edge.media-server.com/mmc/p/i5tsmo6y/
Summary
Great Southern Bancorp reported a solid start to 2026 with net income of $17.5 million or $1.58 per diluted share, up from $17.2 million or $1.47 per share in Q1 2025.
Net interest income was $48.3 million, slightly down from the previous year due to the termination of an interest rate swap, but supported by strategic funding cost management.
Total loans increased by nearly $100 million, driven by growth in construction and commercial real estate lending, despite a decline in multifamily loans.
The company maintained strong asset quality with nonperforming assets at 0.18% of total assets and recorded no credit loss provisions due to lower unfunded balances.
Despite competitive deposit markets, total deposits remained stable, with non-broker deposits down slightly and broker deposits reduced by $11 million.
Non-interest expense was well-managed at $34.8 million, with expectations of slight increases due to deferred IT projects and investments in systems upgrades.
Great Southern Bancorp repurchased 268,664 shares of its stock and declared a quarterly cash dividend of $0.43 per share, with a strong capital position maintained.
Management remains cautious about loan payoffs and future expense levels, with expectations of measured loan origination and disciplined underwriting.
The company remains focused on maintaining credit quality, preserving net interest margin, and strategic capital deployment for shareholder value.
Full Transcript
OPERATOR
Good day and thank you for standing by. Welcome to the Great Southern Bancorp first quarter 2026 earnings call. At this time, all participants are in listen only mode. After this previous presentation, there will be a question and answer session. To ask the question during the session, you will need to press star 11 on your telephone. You will then hear automated messages that your hand is raised. To withdraw your question, please press Star one one again. Please advise that today’s conference is being recorded. I would like to hand conference over to your first speaker today, Cristina Maldonado. Please go ahead.
Cristina Maldonado (Moderator)
Good afternoon and thank you for joining Great Southern Bancorp’s first quarter 2026 earnings call. Today we’ll be discussing the Company’s results for the quarter ended March 31, 2026. Before we begin, I’d like to remind everyone that during the call, forward looking statements may be made regarding the Company’s future events and financial performance. These statements are subject to various factors that could cause actual results to differ materially from those anticipated or projected. For a list of these factors, please refer to the forward looking statements disclosure in the first quarter earnings release and other public filings. Joining me today are President and CEO Joe Turner and Chief Financial Officer Rex Copeland. I’ll now turn the call over to Joe.
Joe Turner (President and CEO)
Okay, thanks Christina and good afternoon to everyone on the call. We appreciate you joining us today. Our first quarter 2026 results reflect a solid start to the year in a continuing competitive operating environment. Both credit and earnings metrics remain strong, allowing for continued progress in our pursuit of meaningful per share tangible book value growth. This progress was underpinned by disciplined expense management, careful balance sheet structuring and a continued emphasis on relationship based banking. In the first quarter of 2026, we reported net income of 17.5 million or $1.58 per diluted common share compared to 17.2 million or $1.47 per share in the year ago quarter. Compared to the fourth quarter of 2025, net income was up from 16.3 million or $1.45 per diluted share. Overall results for the quarter reflected a resilient net interest margin, prudent asset liability management, thoughtful capital allocation and stable loan balances. Net interest income totaled 48.3 million for the quarter. That was down about a million dollars from the first quarter of 2015. Primarily as a result of the absence of the income from our now terminated interest rate swap that was, I think about $2 million in Q1 of 25. Despite this lost income, our ability to strategically manage funding costs while maintaining attractive asset yields allowed for strong net interest income for the quarter. Additionally, we benefited from the collection of 483,000 in unbooked interest this quarter, which further supported our net interest income. Our annualized margin was 3.71% compared to 3.57% in 2025 first quarter and 3.70% in 4Q25. And I think if you pulled out the 483,000 of somewhat unusual interest income, that might have knocked 3 or 4 basis points off the margin number. Total loans increased almost $100 million during the quarter. Loan growth was primarily in construction commercial real estate lending, though that growth was partially offset by a decline in the multifamily category. While this balance sheet growth supported earnings in the quarter period to period, loan trends are influenced significantly by loan repayments from our borrowers in 1Q26. Our loan repayments were less than our quarterly average during 2025 and definitely during the last half of 2025. As such, we remain committed to measured loan origination and disciplined underwriting. From a credit standpoint, we remain mindful of the volatility and the macroeconomic challenges affecting our borrowers. Asset quality metrics in the first quarter of 2026 remained very strong for our bank with nonperforming assets to total assets of 0.18% with virtually no charge offs. But we continue to monitor isolated examples of slower lease ups on projects along with broader credit concerns as markets remain volatile. We did not record a provision for credit losses on outstanding loans in 1Q26. Given lower unfunded balances and mix changes in 1Q26, we we did recognize a negative provision on unfunded commitments of 931,000. On the funding side, total deposits remained generally stable throughout 1Q26. Non broker deposits were down just 26 million from the start of the quarter and broker deposits were down about 11 million. As we used FHLB borrowings to replace certain maturing balances, we saw normal movement across deposit categories. Deposit markets remain competitive across both core and broker channels and we continue to manage our funding mix with a focus on cost, duration and flexibility. Expense management remains a top priority for the bank as well. Non interest expense for the quarter was 34.8 million, down 30,000 from 1Q25. Part of this decline is related to an insurance reimbursement of 261,000 in legal fees recovered through a loan foreclosure in the quarter. Additionally, several projects that would have increased. Hardware and software systems costs expected in 1Q26 have been pushed to later in the year. We continue to invest in systems, infrastructure and personnel to support the franchise over the long term. As we move through the balance of 2026, we remain focused on maintaining strong credit quality, preserving net interest margin, managing expenses carefully, and continuing to build long term value for our stockholders through thoughtful capital deployment. With that, I’ll turn the call over to Rex for a more detailed discussion of the financials.
Rex Copeland (Chief Financial Officer)
Thank you Joe and good afternoon everyone. I’ll now provide a little more detail on our first quarter 2026 financial performance and how it compares to both the prior year and the previously linked quarters. For the quarter ended March 31, 2026, we reported net income of $17.5 million, or $1.58 per diluted common share, compared to $17.2 million, or $1.47 per diluted common share in the first quarter of 2025 and compared to $16.3 million, or $1.45 per diluted common share in the fourth quarter of 2025. We did have a few income and expense items that impacted our results in a positive manner in the quarter. I’ll mention some of those throughout this discussion. Net interest income for the quarter totaled $48.3 million compared to $49.3 million in the first quarter of 2025 and $49.2 million in the fourth quarter of 2025. Compared to the first quarter of 2025, net interest income decreased by about a million dollars as we mentioned were approximately 2%, and as we said, that decrease …
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