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GS

GREAT SOUTHERN BANCORP, INC. (GSBC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered stable profitability with diluted EPS of $1.56, up 10.6% YoY but down sequentially from $1.72 in Q2; net interest income held firm and NIM expanded to 3.72% as deposit and borrowing costs declined .
  • EPS modestly beat S&P Global consensus ($1.56 vs $1.50; +4.0%); “total revenue” (net interest income + non-interest income) was roughly in line at $57.8M vs $57.4M consensus (+0.8%), reflecting disciplined ALM and lower funding costs; estimates were based on limited coverage (2 EPS, 1 revenue) . Values retrieved from S&P Global*.
  • Asset quality remained a strength: NPA/Assets at 0.14%, non-performing loans 0.04% of loans, and annualized net charge-offs at 0.01%; ACL/loans rose to 1.43% .
  • Forward look: the ~$2M quarterly benefit from the terminated swap ended October 6, 2025, creating a Q4 headwind; management expects effective tax rate of ~18.5–20.0% and expenses around current levels, while time deposit replacement rates have moved lower, which should modestly support NIM .

What Went Well and What Went Wrong

  • What Went Well

    • NIM expansion and lower funding costs: Annualized NIM rose to 3.72% vs 3.42% in Q3’24 and 3.68% in Q2’25, driven by reductions in rates on deposits/borrowings and no interest on redeemed subordinated notes; average spread improved to 3.13% .
    • Credit quality: No loan loss provision expense; NPA/Assets 0.14% and NPL/Loans 0.04% with minimal charge-offs; ACL/loans increased to 1.43% .
    • Capital returns: Repurchased 165,116 shares at $60.33 and raised the quarterly dividend to $0.43; tangible common equity ratio improved to 10.9% .

  • What Went Wrong

    • Sequential earnings pressure: Diluted EPS fell to $1.56 from $1.72 in Q2 as non-interest income declined and non-interest expense increased (legal/professional fees, technology upgrades) .
    • Loan balances contracted: Net loans decreased $66.6M vs Q2 and $222.7M YTD, primarily from construction and multifamily paydowns, reflecting elevated payoff activity .
    • Efficiency ratio worsened: Efficiency ratio rose to 62.45% from 59.16% in Q2 due to higher legal/professional fees and technology spending .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Diluted EPS ($)$1.41 $1.47 $1.72 $1.56
Net Interest Income ($USD Millions)$48.0 $49.3 $51.0 $50.8
Non-Interest Income ($USD Millions)$7.0 $6.6 $8.2 $7.1
“Total Revenue” = NII + Non-Interest ($USD Millions)$55.0 $55.9 $59.2 $57.8
Net Interest Margin (%)3.42% 3.57% 3.68% 3.72%
Efficiency Ratio (%)61.34% 62.27% 59.16% 62.45%
ROAA (%)1.11% 1.15% 1.34% 1.23%
ROACE (%)11.10% 11.30% 12.81% 11.30%

KPIs and Balance Sheet

KPIQ3 2024Q1 2025Q2 2025Q3 2025
Loans Receivable, Net ($USD Billions)—$4.691 $4.534 $4.468
Deposits ($USD Billions)—$4.758 $4.684 $4.528
Brokered Deposits ($USD Millions)—$895.4 $833.3 $680.0
Uninsured Deposits ($USD Millions; % of deposits)—$683.9 (14%) $703.6 (15%) $741.9 (16.4%)
ACL / Loans (%)1.36% 1.36% 1.41% 1.43%
NPA / Assets (%)0.13% 0.16% 0.14% 0.14%
Annualized Net Charge-offs (%)0.13% 0.00% 0.00% 0.01%

Estimates vs Actuals (S&P Global)

MetricConsensusActualSurprise
EPS ($)1.50*1.56 +4.0% (Beat)
“Total Revenue” ($USD Millions)57.358*57.835 +0.8% (Beat)

Values retrieved from S&P Global*.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Effective Tax RateForward~18.0–20.0% ~18.5–20.0% Maintained/Narrowed upward lower bound
Dividend per ShareQ3$0.40 (Q2 declared) $0.43 (Q3 declared) Raised
Time Deposit Replacement RatesNext 12 months~3.35–3.85% (June mkt rates) ~3.10–3.60% (Sept mkt rates) Lower
Terminated Swap BenefitThrough Q3’25~+$2.0M per quarter through Q3’25 Ended Oct 6, 2025 Discontinued (Q4 headwind)
Operating ExpensesNear termModest growth; tech adds, some legal normalization Around ~$36M; tech/merit increases; legal fees may ease Maintained (qualitative)

No formal revenue/NIM guidance provided; management commentary indicates neutral-to-slight tailwind from lower deposit costs, offset by loss of swap benefit in Q4 .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Margin & Rate SensitivityNeutral posture to rate cuts; minor spaced cuts not harmful; ~+$2M swap benefit through Q3 NIM 3.72%; swap benefit ended Oct 6; minor additional rate cuts seen as manageable Neutral-to-slight tailwind; Q4 headwind from swap end
Loan Growth OutlookCompetitive market; limited growth; elevated payoffs; strong unfunded construction pipeline Balances expected steady near-term; payoffs remain lumpy; unfunded construction ~$582M Muted originations; payoff drag persists
Deposit Competition & PricingLower rates on non-time accounts; significant CD maturities with slightly lower replacement rates Deposit costs declining; brokered deposits reduced; replacement rates ~3.10–3.60% Improving funding costs; brokered mix down
Credit Quality/OREONPA minimal; rental income from OREO office building supports expenses NPA 0.14% of assets; negligible charge-offs; OREO office building stable Stable/strong
Technology InitiativesCore system enhancements; ITM deployments; treasury mgmt upgrades underway Core upgrades continue; treasury mgmt overhaul moving to trials; new banking center opening Ongoing execution

Management Commentary

  • “Our third quarter results reflect continued stability in our core operations… Net interest income… increased to $50.8 million compared to $48.0 million… demonstrating the continued resilience of our margin and disciplined asset-liability management…” — Joseph W. Turner, CEO .
  • “The funding costs of deposits and other borrowings continued to decrease, bolstering net interest income… Core deposits remained stable during the quarter…” — Joseph W. Turner, CEO .
  • “We did not record provision for credit losses… The allowance… stood at 1.43%… Our capital position remains strong… book value of $56.18 per common share.” — Rex Copeland, CFO .
  • On margin outlook: “Minor and spaced-out rate cuts shouldn’t be harmful… we know we’re going to have the $2 million per quarter… now over.” — Rex Copeland, CFO .
  • On expenses: “Higher… legal fees… hopefully… come back down… technology/occupancy increases are kind of built in.” — Rex Copeland, CFO .

Q&A Highlights

  • Loan growth: Management sees opportunities across Texas, Atlanta, St. Louis, Kansas City, but elevated payoffs keep balances steady; production partially offsets payoffs .
  • Provision outlook: Expect minimal provisioning absent charge-offs; ACL coverage maintained .
  • Rate sensitivity/NIM: Minor, spaced rate cuts expected to be manageable; swap benefit ended in early Q4; deposit repricing may add slight tailwind .
  • Operating expenses: Around current ~$36M level; technology upgrades and merit increases embedded; legal fees expected to normalize .
  • Commission income: Elevated vs history but customer-driven and not part of a big program; sustainability uncertain .

Estimates Context

  • EPS beat: $1.56 actual vs $1.50 consensus (+4.0%), driven by lower funding costs and solid credit (no loan provision) . Values retrieved from S&P Global*.
  • Revenue in line/beat: “Total revenue” ~$57.8M vs $57.4M consensus (+0.8%), reflecting steady NII and recurring fee income despite lower non-interest income sequentially . Values retrieved from S&P Global*.
  • Limited analyst coverage (2 EPS estimates; 1 revenue estimate), which may increase post-quarter; swap termination likely to drive modest estimate reductions for Q4 . Values retrieved from S&P Global*.

Key Takeaways for Investors

  • EPS and “total revenue” slightly beat consensus; the more meaningful driver was NIM expansion from lower funding costs; watch for Q4 step-down as ~$2M quarterly swap benefit ends .
  • Asset quality remains exceptional, supporting lower provision needs and stable returns; ACL/loans at 1.43% provides cushion .
  • Balance sheet optimization continues: brokered deposits reduced by ~$153M in Q3 and time deposit replacement rates lower, aiding NIM; liquidity capacity remains robust (FHLB $1.11B, Fed $356M; unpledged AFS $344M, HTM $25.6M) .
  • Capital deployment: dividend raised to $0.43 and continued buybacks (165K shares in Q3; 514K YTD), with ~929K shares remaining under authorization—supportive for TBV and EPS accretion .
  • Loan balances declined from payoffs, but unfunded construction commitments remain strong (~$582M); expect flattish balances near term amid competitive market .
  • Expense control remains a focus; technology investments and merit increases embedded, while legal fees may ease; monitor efficiency ratio trajectory .
  • Near-term trading: potential NIM resilience from lower deposit costs partially offsets swap headwind; medium-term thesis grounded in credit strength, disciplined ALM, and shareholder returns.