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Mittwoch, 18.10.2017 19:39 von PR Newswire | Aufrufe: 123

Great Southern Bancorp, Inc. Reports Preliminary Third Quarter Earnings of $0.82 Per Diluted Common Share

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PR Newswire

SPRINGFIELD, Mo., Oct. 18, 2017

SPRINGFIELD, Mo., Oct. 18, 2017 /PRNewswire/ --

Great Southern Bancorp logo. (PRNewsFoto/Great Southern Bancorp, Inc.)

Preliminary Financial Results and Other Matters for the Third Quarter and First Nine Months of 2017:

Total Loans: Total gross loans (including the undisbursed portion of loans), excluding FDIC-assisted acquired loans and mortgage loans held for sale, increased $229.4 million, or 5.6%, from December 31, 2016, to September 30, 2017. This increase was primarily in construction loans, other residential (multi-family) real estate loans and commercial real estate loans. These increases were partially offset by decreases in consumer loans and one- to four-family residential loans. The FDIC-acquired loan portfolios had net decreases totaling $56.0 million during the nine months ended September 30, 2017. Outstanding net loans receivable balances increased $41.0 million, from $3.76 billion at December 31, 2016 to $3.80 billion at September 30, 2017, and increased $28.2 million, from $3.77 billion at June 30, 2017.
Asset Quality: Non-performing assets and potential problem loans, excluding those previously covered by FDIC loss sharing agreements and those acquired in the FDIC-assisted transaction with Valley Bank, which are accounted for and analyzed as loan pools rather than individual loans, totaled $40.9 million at September 30, 2017, a decrease of $5.4 million from $46.3 million at December 31, 2016 and an increase of $3.7 million from $37.2 million at June 30, 2017. Non-performing assets at September 30, 2017 were $32.9 million (0.73% of total assets), down $6.4 million from $39.3 million (0.86% of total assets) at December 31, 2016 and down $2.1 million from $35.0 million (0.79% of total assets) at June 30, 2017.
Capital: The capital position of the Company continues to be strong, significantly exceeding the thresholds established by regulators. On a preliminary basis, as of September 30, 2017, the Company's Tier 1 Leverage Ratio was 10.7%, Common Equity Tier 1 Capital Ratio was 10.5%, Tier 1 Capital Ratio was 11.1%, and Total Capital Ratio was 13.7%.
Net Interest Income: Net interest income for the third quarter of 2017 decreased $1.7 million to $39.3 million compared to $41.0 million for the third quarter of 2016. Net interest income was $37.9 million for the second quarter of 2017. Net interest margin was 3.77% for the quarter ended September 30, 2017, compared to 3.98% for the third quarter of 2016 and 3.68% for the quarter ended June 30, 2017. The decrease in the margin from the prior year third quarter was primarily the result of a reduction in the additional yield accretion recognized in conjunction with updated estimates of the fair value of the acquired loan pools compared to the prior periods, partially offset by increased total average loans. Increased average interest rates on deposits and other borrowings also contributed to lower net interest margin compared to the year ago quarter. The increase in the margin from the quarter ended June 30, 2017 to the quarter ended September 30, 2017 was primarily due to increased total average loans and a slightly higher weighted average interest rate on loans, a higher average interest rate on other interest-earning assets, and a decrease in the overall average interest rate on borrowings due to the payoff of the Company's higher rate long-term FHLBank advances at the end of the June quarter, along with the change in funding mix to include more short-term lower rate borrowings in the September quarter. The positive impact on net interest margin from the additional yield accretion on acquired loan pools that was recorded during the period was 9, 38 and 12 basis points for the quarters ended September 30, 2017, September 30, 2016, and June 30, 2017, respectively. For further discussion of the additional yield accretion of the discount on acquired loan pools, see "Net Interest Income."

Great Southern Bancorp, Inc. (NASDAQ:GSBC), the holding company for Great Southern Bank, today reported that preliminary earnings for the three months ended September 30, 2017, were $0.82 per diluted common share ($11.7 million available to common shareholders) compared to $0.80 per diluted common share ($11.2 million available to common shareholders) for the three months ended September 30, 2016.

Preliminary earnings for the nine months ended September 30, 2017, were $2.77 per diluted common share ($39.4 million available to common shareholders) compared to $2.39 per diluted common share ($33.5 million available to common shareholders) for the nine months ended September 30, 2016.

For the quarter ended September 30, 2017, annualized return on average common equity was 10.09%, annualized return on average assets was 1.05%, and annualized net interest margin was 3.77%, compared to 10.92%, 1.01% and 3.98%, respectively, for the quarter ended September 30, 2016. For the nine months ended September 30, 2017, annualized return on average common equity was 11.65%, annualized return on average assets was 1.18%, and net interest margin was 3.75% compared to 10.92%, 1.03% and 4.11%, respectively, for the nine months ended September 30, 2016.

President and CEO Joseph W. Turner commented, "We are pleased with our results in the third quarter, especially in the areas of net interest margin, credit quality and expense containment. Core net interest margin improved compared to the year ago quarter and the previous linked quarter, as a result of higher average loan balances and an increase in yields primarily related to higher market interest rates.

ARIVA.DE Börsen-Geflüster

Kurse

Great Southern Bancorp

52,71 $

-0,38%

"Good loan production occurred in the third quarter, resulting in an increase in net outstanding loan balances of approximately $28 million from the end of the second quarter 2017. Loan production occurred in all of our major markets with increases primarily in commercial real estate, multi-family and construction loans. As expected, consumer lending, mainly in the indirect auto segment, declined in light of tightened underwriting standards implemented in the latter half of 2016. Outstanding consumer auto loan balances have declined $100 million (20.2%) in 2017."

Turner continued, "Our level of non-performing assets improved from the end of the second quarter of 2017, with non-performing loans declining from $13.3 million to $9.5 million. In the third quarter of 2017, we continued to experience higher than normal consumer loan charge-offs and we charged down three commercial loans. We also experienced a higher provision for loan losses in the third quarter compared to the second quarter of 2017 and the third quarter of 2016. Two of the commercial charge-offs were loan relationships originated prior to 2008 and the third commercial charge-off was a relationship which was part of the Fifth Third branch acquisition.

"Expense containment continues to be a major focus for the Company. Total non-interest expenses were $28.0 million in the 2017 third quarter, which was less than both the second quarter of 2017 and the third quarter of 2016. Included in the 2017 third quarter amount were expenses related to foreclosed assets totaling $1.3 million, which was approximately $650,000 higher than second quarter 2017 foreclosed asset expense."

Selected Financial Data:

(In thousands, except per share data)	Three Months Ended September 30,		Nine Months Ended September 30,
	2017	2016	2017	2016
Net interest income	$ 39,281	$ 41,028	$ 115,883	$ 122,808
Provision for loan losses	2,950	2,500	7,150	6,901
Non-interest income	7,655	7,090	31,151	20,981
Non-interest expense	28,034	30,657	84,976	91,384
Provision for income taxes	4,289	3,740	15,550	11,956
Net income and net income available to common shareholders	$ 11,663	$ 11,221	$ 39,358	$ 33,548

Earnings per diluted common share	$ 0.82	$ 0.80	$ 2.77	$ 2.39

NET INTEREST INCOME

Net interest income for the third quarter of 2017 decreased $1.7 million to $39.3 million compared to $41.0 million for the third quarter of 2016. Net interest margin was 3.77% in the third quarter of 2017, compared to 3.98% in the same period of 2016, a decrease of 21 basis points. For the three months ended September 30, 2017, the net interest margin increased nine basis points compared to the net interest margin of 3.68% in the three months ended June 30, 2017. The decrease in the margin from the prior year third quarter was primarily the result of a reduction in the additional yield accretion recognized in conjunction with updated estimates of the fair value of the acquired loan pools compared to the prior periods, partially offset by increased total average loans. Increased average interest rates on deposits and other borrowings also contributed to lower net interest margin compared to the year ago quarter. The increase in the margin from the quarter ended June 30, 2017 to the quarter ended September 30, 2017 was primarily due to increased total average loans and a slightly higher weighted average interest rate on loans, a higher average interest rate on other interest-earning assets, and a decrease in the overall average interest rate on borrowings due to the payoff of the Company's higher rate long-term FHLBank advances at the end of the June quarter, along with the change in funding mix to include more short-term lower rate borrowings in the September quarter. The average interest rate spread was 3.60% for the three months ended September 30, 2017, compared to 3.86% for the three months ended September 30, 2016 and 3.53% for the three months ended June 30, 2017.

Net interest income for the nine months ended September 30, 2017 decreased $6.9 million to $115.9 million compared to $122.8 million for the nine months ended September 30, 2016. Net interest margin was 3.75% in the nine months ended September 30, 2017, compared to 4.11% in the same period of 2016, a decrease of 36 basis points. The average interest rate spread was 3.59% for the nine months ended September 30, 2017, compared to 4.00% for the nine months ended September 30, 2016.

The Company's net interest margin has been positively impacted by significant additional yield accretion recognized in conjunction with updated estimates of the fair value of the loan pools acquired in the 2009, 2011, 2012 and 2014 FDIC-assisted transactions. On an on-going basis, the Company estimates the cash flows expected to be collected from the acquired loan pools. For each of the loan portfolios acquired, the cash flow estimates increased during the current and prior periods presented below, based on payment histories and reduced credit loss expectations. This resulted in increased income that has been spread, on a level-yield basis, over the remaining expected lives of the loan pools (and, therefore, has decreased over time). In the prior period, the increases in expected cash flows also reduced the amount of expected reimbursements under the loss sharing agreements with the FDIC (when such agreements were in place), which were recorded as indemnification assets, with such reductions amortized on a comparable basis over the remainder of the loss sharing agreements or the remaining expected lives of the loan pools, whichever was shorter. Additional estimated cash flows totaling approximately $472,000 and $627,000 were recorded in the three and nine months ended September 30, 2017, respectively, related to all of these loan pools.

The impact of adjustments on all portfolios acquired in FDIC-assisted transactions for the reporting periods presented is shown below:

	Three Months Ended
	September 30, 2017		September 30, 2016
	(In thousands, except basis points data)
Impact on net interest income/ net interest margin (in basis points)	$ 975	9 bps	$ 4,010	38 bps
Non-interest income	—		(1,310)
Net impact to pre-tax income	$ 975		$ 2,700

	Nine Months Ended
	September 30, 2017		September 30, 2016
	(In thousands, except basis points data)
Impact on net interest income/ net interest margin (in basis points)	$ 4,237	14 bps	$ 13,251	44 bps
Non-interest income	(634)		(6,019)
Net impact to pre-tax income	$ 3,603		$ 7,232

Because these adjustments will be recognized generally over the remaining lives of the loan pools, they will impact future periods as well. The remaining accretable yield adjustment that will affect interest income is $2.7 million. As there is no longer, nor will there be in the future, indemnification asset amortization related to Team Bank, Vantus Bank, Sun Security Bank or InterBank due to the termination or expiration of the related loss sharing agreements for those transactions, there is no remaining indemnification asset or related adjustments that will affect non-interest income (expense). Of the remaining adjustments affecting interest income, we expect to recognize $576,000 of interest income during the remainder of 2017. Additional adjustments may be recorded in future periods from the FDIC-assisted transactions, as the Company continues to estimate expected cash flows from the acquired loan pools.

Excluding the impact of the additional yield accretion, net interest margin for the three and nine months ended September 30, 2017, increased eight and decreased six basis points, respectively, when compared to the year-ago periods. The decrease in net interest margin in the nine month period is primarily due to the interest expense associated with the issuance of $75.0 million of subordinated notes in the third quarter of 2016 and an increase in the average interest rate on deposits and other borrowings.

For additional information on net interest income components, see the "Average Balances, Interest Rates and Yields" tables in this release.

NON-INTEREST INCOME

For the quarter ended September 30, 2017, non-interest income increased $565,000 to $7.7 million when compared to the quarter ended September 30, 2016, primarily as a result of the following items:

Amortization of income related to business acquisitions: Because of the termination of the loss sharing agreements in previous periods, the net amortization expense related to business acquisitions was $-0- for the quarter ended September 30, 2017, compared to $1.2 million for the quarter ended September 30, 2016, which reduced non-interest income by that amount.
Net gains on loan sales: Net gains on loan sales decreased $498,000 compared to the prior year quarter. The decrease was due to a decrease in originations of fixed-rate loans in the 2017 period compared to the 2016 period. Fixed rate single-family loans originated are generally subsequently sold in the secondary market.
Net realized gains on sales of available-for-sale securities: During the 2016 quarter the Company sold certain investment securities for a net gain of $144,000. There were no gains on sales of investments in the current quarter.

For the nine months ended September 30, 2017, non-interest income increased $10.2 million to $31.2 million when compared to the nine months ended September 30, 2016, primarily as a result of the following items:

Gain on early termination of FDIC loss sharing agreement for Inter Savings Bank: As previously disclosed in the Company's Current Report on Form 8-K filed on June 9, 2017, the Company's loss sharing agreement with the FDIC related to Inter Savings Bank was terminated early and the Company received a payment of $15.0 million to settle all outstanding items related to the terminated agreement. The Company recognized a one-time gross gain of $7.7 million related to the termination, which was recorded in the accretion of income related to business acquisitions line item of the consolidated statements of income during the nine months ended September 30, 2017.
Amortization of income related to business acquisitions: Because of the termination of the loss sharing agreements in previous periods, the net amortization expense related to business acquisitions was $486,000 for the nine months ended September 30, 2017, compared to $5.5 million for the nine months ended September 30, 2016. The amortization expense for the nine months ended September 30, 2017, consisted of the following items: $504,000 of amortization expense related to the changes in cash flows expected to be collected from the FDIC-covered loan portfolios acquired from InterBank and $140,000 of amortization of the clawback liability. Partially offsetting the expense was income from the accretion of the discount related to the indemnification asset for the InterBank acquisition of $158,000.
Late charges and fees on loans: Late charges and fees on loans increased $607,000 compared to the prior year period. The increase was primarily due to fees on loan payoffs totaling $632,000 received on four loan relationships.
Net gains on loan sales: Net gains on loan sales decreased $719,000 compared to the prior year period. The decrease was due to a decrease in originations of fixed-rate loans in the 2017 period compared to the 2016 period. Fixed rate single-family loans originated are generally subsequently sold in the secondary market.
Other income: Other income decreased $399,000 compared to the prior year period. During the 2016 period, the Company recognized a $257,000 gain on the sale of the Thayer, Mo., branch and deposits and a $110,000 gain on the sale of the Buffalo, Mo., branch and deposits. In addition, a gain of $238,000 was recognized on sales of fixed assets unrelated to the branch sales during the 2016 period. There were no similar transactions during the 2017 period.
Net realized gains on sales of available-for-sale securities: During the 2016 period the Company sold an investment held by Bancorp for a gain of $2.7 million and sold other investment securities for a net gain of $144,000. There were no gains on sales of investments in the current year period.

NON-INTEREST EXPENSE

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