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GS

GREAT SOUTHERN BANCORP, INC. (GSBC)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 EPS was $1.72, up 18.6% YoY; materially above Wall Street consensus of $1.34*, driven by stronger net interest margin (NIM) and lower deposit costs *. Values retrieved from S&P Global.
  • Revenue was $59.3M vs consensus $56.0M*, a beat, with net interest income rising 8.9% YoY to $51.0M; NIM expanded to 3.68% (+25 bps YoY, +11 bps QoQ) *. Values retrieved from S&P Global.
  • Credit quality remained strong: non-performing assets fell to $8.1M (0.14% of assets), allowance for credit losses (ACL) rose to 1.41% of loans; net recoveries were $111K .
  • Loan balances contracted $156M QoQ on higher payoffs (including a $30M payoff on the last day of the quarter); brokered deposits decreased $62M QoQ; capital ratios and liquidity remained robust (TCE 10.5%; $1.22B FHLB and $338.9M Fed capacity) .
  • Near-term watch items: the ~$2.0M quarterly benefit from a terminated swap ends after Q3 2025; management expects generally stable margins excluding that headwind and slightly lower renewal rates on maturing time deposits .

What Went Well and What Went Wrong

What Went Well

  • Net interest income up 8.9% YoY to $51.0M; annualized NIM improved to 3.68% on disciplined funding cost management and modest asset yield stability . “Our annualized net interest margin improved to 3.68%,… underpinned by healthy loan yield and prudent funding cost management.” — CFO Rex Copeland .
  • Expense discipline: efficiency ratio improved to 59.16% (from 64.27% LY); legal/professional fees fell 50% YoY; OREO generated $445K rental income vs minimal LY .
  • Asset quality resilience: NPAs down to $8.1M (0.14% of assets), NPLs 0.04% of loans; ACL increased to 1.41% of loans; net recoveries of $111K . “We did not record a provision for credit losses… These results highlight the strength of our portfolio.” — CEO Joe Turner .

What Went Wrong

  • Non-interest income declined $1.6M YoY to $8.2M due to lapping a $2.7M vendor termination gain in Q2 2024; 2025 included a nonrecurring $1.1M tax credit partnership gain .
  • Loan balances contracted $156M QoQ on lumpier-than-usual payoffs; originations remain constrained in a competitive market, limiting near-term growth .
  • The terminated swap benefit (~$2.0M per quarter) ends after Q3 2025, creating a Q4 headwind to NIM and net interest income absent offsetting actions .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Diluted EPS ($)$1.27 $1.47 $1.72
Net Interest Income ($M)$49.5 $49.3 $51.0
Non-Interest Income ($M)$6.9 $6.6 $8.2
Efficiency Ratio (%)65.43 62.27 59.16
Net Interest Margin (%)3.49 3.57 3.68
ROA (Annualized, %)1.00 1.15 1.34
ROE (Annualized, %)9.76 11.30 12.81
Revenue vs EstimatesQ2 2024Q1 2025Q2 2025
Revenue Consensus ($)$53.733M*$55.530M*$56.016M*
Revenue Actual ($)$54.558M*$56.272M*$59.285M*
Surprise ($ / %)$0.825M / 1.5%*$0.742M / 1.3%*$3.269M / 5.8%*
EPS Consensus ($)$1.2067*$1.2667*$1.34*
EPS Actual ($)$1.7421*$1.47*$1.6421*
EPS Surprise ($ / %)$0.5354 / 44.4%*$0.2033 / 16.0%*$0.3021 / 22.5%*
# of EPS Estimates3*3*2*
# of Revenue Estimates2*2*1*

Values retrieved from S&P Global.

Loan Portfolio Mix (Period-End)Q1 2025 ($000)Q2 2025 ($000)
Single-Family Real Estate829,949 815,971
Multi-Family Real Estate1,592,470 1,577,941
Commercial Real Estate1,489,309 1,487,680
Construction & Land Dev.474,831 366,567
Commercial Business217,100 195,082
Consumer (incl. HELOCs)164,576 167,318
Gross Loans4,768,235 4,610,559
KPIs and Balance SheetQ4 2024Q1 2025Q2 2025
Total Assets ($M)$5,981.6 $5,993.8 $5,854.7
Deposits ($M)$4,605.5 $4,758.0 $4,684.1
Brokered Deposits ($M)$772.1 $895.4 $833.3
Interest-Bearing Checking ($M)$2,214.7 $2,248.3 $2,233.2
Non-Interest-Bearing Checking ($M)$842.9 $852.7 $859.9
NPAs ($M / % Assets)$9.6 / 0.16% $9.5 / 0.16% $8.1 / 0.14%
ACL / Loans (%)1.36 1.36 1.41
Tangible Common Equity / Tangible Assets (%)9.87 10.08 10.48
FHLB / Fed Lines ($M)$1,058.8 / $346.4 $1,172.6 / $370.5 $1,216.1 / $338.9

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Effective Tax Rate (%)FY 2025+~18–20% ~18–20% Maintained
Time Deposit Replacement RatesNext 12 months3.50–4.00% (as of Mar-25) ~3.35–3.85% (as of Jun-25) Lowered (slightly)
Terminated Swap BenefitQ3–Q4 2025~$2.0M per quarter through Q3 2025 ~$2.0M in Q3 2025; none thereafter Ends after Q3
Quarterly DividendQ2 2025$0.40/share $0.40/share declared Maintained
Share Repurchase AuthorizationOngoingRemaining ~270K shares in Nov-2022 program; new 1M shares approved Apr-2025 Remaining ~94K shares in old program; new 1M shares follows Increased capacity

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
Margin and Funding CostsMargin up; deposit costs elevated; swap benefit expected in 2025 NIM 3.68%; deposit costs down; swap adds ~3 bps; ends after Q3 Improving near-term, headwind in Q4
Loan GrowthPipeline robust but growth modest; construction unfunded portion large Loans -$156M QoQ; competitive market; payoffs lumpy ($30M EoQ) Near-term constrained
Asset QualityNPAs minimal; ACL stable NPAs down to 0.14% of assets; net recoveries; ACL to 1.41% Strong/stable
OREO / Rental IncomeOREO office building added Q4; minor activity Q1 OREO rental income $445K; may persist barring lease roll-offs Positive offset to expense
Technology/Core SystemsLitigation resolved in principle; focus on current core; upgrades into 2025–2026 Continued upgrades; ITMs installed; next-gen branch build Execution progressing

Management Commentary

  • “Our annualized net interest margin improved to 3.68%,… underpinned by healthy loan yield and prudent funding cost management.” — CFO Rex Copeland .
  • “Given our emphasis on balancing loan growth with appropriate pricing and loan structure, we saw a $156 million net loan reduction… including a $30 million loan payoff at the end of the quarter.” — CEO Joe Turner .
  • “We redeemed all of the Company’s outstanding 5.50% fixed-to-floating rate subordinated notes… thereby avoiding a significant increase in interest cost.” — CEO Joe Turner .
  • “Non-interest expense… improved… with reductions in legal and professional fees and expense on other real estate owned, partially offset by modest increases in technology investments.” — CEO Joe Turner .

Q&A Highlights

  • Loan growth outlook: Management sees a competitive market with limited near-term origination upside; payoffs remain lumpy and hard to predict .
  • Expense trajectory: Generally consistent; modest technology-related spend and potential minor wage adjustments in certain states, no dramatic change expected .
  • Margin sustainability: Core margin around ~3.65% after backing out recoveries; slight tailwind from sub-debt redemption in Q3; swap termination a Q4 headwind; overall bias neutral to slightly positive ex-swap .
  • OREO rental income: Q2 rental income not a catch-up; could continue while property remains, subject to lease roll-offs .

Estimates Context

  • Q2 2025 EPS beat: Actual $1.6421 vs consensus $1.34 (22.5% surprise); revenue beat: Actual $59.285M vs consensus $56.016M (5.8% surprise). Coverage is limited (# of EPS estimates: 2; revenue: 1), implying potential for forecast dispersion*. Values retrieved from S&P Global.
  • With deposit costs trending lower and NIM higher, as well as ongoing expense discipline, Street models likely move up near-term; however, the Q4 swap headwind should temper full-year run-rate assumptions .

Key Takeaways for Investors

  • Core profitability improved: NIM up 25 bps YoY and 11 bps QoQ, efficiency ratio at 59.16% — a constructive setup into Q3 as time deposits reprice lower .
  • Watch Q4: The ~$2.0M quarterly swap benefit ends after Q3; absent offsets, expect modest NIM/NII pressure in Q4 2025 .
  • Credit remains a differentiator: NPAs at 0.14% of assets, ACL at 1.41% of loans; net recoveries underscore conservative underwriting .
  • Balance sheet levers intact: Strong liquidity ($1.216B FHLB/$338.9M Fed; $349M unpledged securities) and capital (TCE 10.5%) support flexibility in funding mix and shareholder returns .
  • Loan growth subdued near term: Competitive environment and elevated payoffs reduced balances; monitor construction unfunded pipeline ($626M) for conversion timing .
  • Shareholder returns continue: $0.40 dividend and active buybacks (176K shares in Q2; new 1M-share authorization) provide support while growth normalizes .
  • Trading implications: Expect estimate revisions higher for Q3, then cautious into Q4; stock may react positively to margin/expense prints and any signs of origination momentum, but discount the Q4 swap cliff in valuation multiples .

Notes: All S&P Global estimate values marked with an asterisk are Values retrieved from S&P Global.