Great Southern Bancorp, Inc. Reports Preliminary First Quarter Earnings of $0.81 Per Diluted Common Share

Our loan quality of the loan portfolio continues to be good; however, fluctuations in non-performing assets, loan loss provision and net charge-offs may occur from period to period. At March 31, 2017, non-performing assets and potential problem loans, excluding FDIC-acquired loans, totaled $46.0, a decrease of $0.3 million from December 31, 2016. Non-performing loans increased primarily as a result of moving one $3.8 million loan from the potential problem category to non-performing loans.  Non-performing assets as a percentage of total assets were 0.92% at March 31, 2017, as compared to 0.86% at December 31, 2016."

Turner continued, "Our core net interest margin, which excludes the effects of additional yield accretion on loan pools from FDIC-assisted transactions, continues to be relatively stable. The core net interest margin was 3.60% for the quarter ended March 31, 2017, as compared to 3.70% and 3.57% for the quarters ended March 31, 2016, and December 31, 2016, respectively.  Most of the decrease in the margin from the year ago quarter was due to the interest expense and deferred issuance costs on the $75 million subordinated debt offering completed in August 2016. The increase of three basis points from the prior year fourth quarter in part reflected the interest rate increases implemented by the Federal Reserve Bank. The recent increases in the prime rate and LIBOR rates should modestly benefit our core net interest margin over time."

Selected Financial Data:

NET INTEREST INCOME

Net interest income for the first quarter of 2017 decreased $2.4 million to $38.7 million compared to $41.1 million for the first quarter of 2016.  Net interest margin was 3.78% in the first quarter of 2017, compared to 4.26% in the same period of 2016, a decrease of 48 basis points.  For the three months ended March 31, 2017, the net interest margin decreased nine basis points compared to the net interest margin of 3.87% in the three months ended December 31, 2016.  The average interest rate spread was 3.63% for the three months ended March 31, 2017, compared to 4.16% for the three months ended March 31, 2016 and 3.74% for the three months ended December 31, 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 have increased, based on payment histories and reduced credit loss expectations. This has 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). The increases in expected cash flows also reduced the amount of expected reimbursements under the loss sharing agreements with the FDIC (to the extent such agreements were in place), which were recorded as indemnification assets.  Therefore, the indemnification assets have also been reduced each quarter since the fourth quarter of 2010, 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 is shorter.  Since the early termination of all other loss sharing agreements on April 26, 2016, only the loans and other real estate owned acquired in the InterBank transaction have been covered by a loss sharing agreement and have indemnification assets remaining.  Additional estimated cash flows totaling approximately $155,000 were recorded in the three months ended March 31, 2017, 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:

Because these adjustments will be recognized generally over the remaining lives of the loan pools and the remainder of the loss sharing agreement (unless the loss sharing period ends earlier), respectively, they will impact future periods as well.  The remaining accretable yield adjustment that will affect interest income is $4.5 million and the remaining adjustment to the indemnification assets related to InterBank, including the effects of the clawback liability, that will affect non-interest income (expense) is $(1.9) million.  The $4.5 million of accretable yield adjustment relates to Team Bank, Vantus Bank, Sun Security Bank, InterBank and Valley Bank.  The amortization of indemnification asset, as noted, is only related to InterBank, as there is no longer, nor will there be in the future, indemnification asset amortization related to Team Bank, Vantus Bank, or Sun Security Bank due to the early termination of the remaining related loss sharing agreements for those transactions in April 2016.  Of the remaining adjustments, we expect to recognize $2.5 million of interest income and $(1.0) million of non-interest income (expense) 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 months ended March 31, 2017 decreased ten basis points when compared to the year-ago quarter.  The decrease in net interest margin 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 March 31, 2017, non-interest income increased $2.7 million to $7.7 million when compared to the quarter ended March 31, 2016, primarily as a result of the following items:

• Amortization of income related to business acquisitions:  The net amortization expense related to business acquisitions was $489,000 for the quarter ended March 31, 2017, compared to $3.3 million for the quarter ended March 31, 2016.  The amortization expense for the quarter ended March 31, 2017, consisted of the following items:  $507,000 of amortization expense related to the changes in cash flows expected to be collected from the FDIC-covered loan portfolio 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 $301,000 compared to the prior year quarter.  The increase was primarily due to fees on loan payoffs totaling $502,000 received on two large commercial loans, partially offset by a lower amount of additional fees received on loan payoffs in the prior year quarter.   
• Other income:  Other income decreased $539,000 compared to the prior year quarter.  During the 2016 quarter, 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 quarter.

NON-INTEREST EXPENSE

For the quarter ended March 31, 2017, non-interest expense decreased $2.3 million to $28.6 million when compared to the quarter ended March 31, 2016, primarily as a result of the following items:

• Net occupancy and equipment expense:  Net occupancy expense decreased $526,000 in the quarter ended March 31, 2017 compared to the same quarter in 2016.  Computer license and support expense decreased $170,000 from the prior year quarter, which was primarily due to one-time expenses of $279,000 in the 2016 first quarter related to the Fifth Third Bank acquisition.  Repair and maintenance expenses decreased $150,000 from the prior year quarter, due to unusually high expenses in the 2016 quarter, as was noted in the Company's 2016 first quarter earnings release.  Rent expense decreased $100,000 from the prior year quarter.  
• Other operating expenses:  Other operating expenses decreased $531,000 in the quarter ended March 31, 2017 compared to the same period in 2016.  This decrease was primarily due to one-time expenses in the 2016 quarter of $436,000 in charges to replace former Fifth Third Bank customer checks with Great Southern Bank checks. 
• Legal, audit and other professional fees:  Legal, audit and other professional fees decreased $521,000 from the prior year quarter.  In the 2016 quarter, the Company incurred $319,000 of legal, audit and other professional fees expense related to the acquisition of Fifth Third Bank branches.  In the 2017 quarter, the Company received some large recoveries of legal fees on loans totaling $72,000.  In addition, the Company had higher overall legal fees related to loan collection in the 2016 quarter compared to the 2017 quarter, due to a higher level of activity. 
• Expense on foreclosed assets:  Expense on foreclosed assets decreased $336,000 in the quarter ended March 31, 2017 compared to the same quarter in 2016.  The decrease was primarily due to valuation write-downs of foreclosed assets during the 2016 quarter totaling approximately $407,000 primarily on two properties, and other expenses related to the maintenance and resolution of foreclosed properties.  
• Insurance expense:  Insurance expense decreased $154,000 in the quarter ended March 31, 2017 compared to the prior year quarter primarily due to a reduction in FDIC insurance premiums resulting from a change in the FDIC insurance assessment rates, which went into effect during the fourth quarter of 2016.  Because the FDIC's deposit insurance fund hit a predetermined threshold, deposit insurance rates for many banks, including ours, have been reduced.
• Office supplies and printing:  Office supplies and printing expense increased $232,000 from the prior year quarter due to supplies, printing and other costs totaling $373,000 related to the replacement of the remaining portion of the Bank's existing debit cards with chip-enabled cards.

The Company's efficiency ratio for the quarter ended March 31, 2017, was 61.58% compared to 67.08% for the same quarter in 2016.  The improvement in the ratio in the 2017 three month period was primarily due to the increase in non-interest income and the decrease in non-interest expense, partially offset by the decrease in net interest income.  The Company's ratio of non-interest expense to average assets decreased from 2.93% for the three months ended March 31, 2016, to 2.55% for the three months ended March 31, 2017.  The decrease in the current three month period ratio was due to the decrease in non-interest expense and the increase in average assets in the 2017 period compared to the 2016 period.  Average assets for the quarter ended March 31, 2017, increased $259.4 million, or 6.1%, from the quarter ended March 31, 2016, primarily due to organic loan growth, partially offset by decreases in investment securities and other interest-earning assets. 

INCOME TAXES

For the three months ended March 31, 2017 and 2016, the Company's effective tax rate was 26.1% and 25.1%, respectively.  These effective rates were lower than the statutory federal tax rate of 35%, due primarily to the utilization of certain investment tax credits and to tax-exempt investments and tax-exempt loans which reduced the Company's effective tax rate.  In future periods, the Company expects its effective tax rate typically will be 26-28% of pre-tax net income, assuming it continues to maintain or increase its use of investment tax credits and maintain or increase its pre-tax net income. The Company's effective tax rate may fluctuate as it is impacted by the level and timing of the Company's utilization of tax credits and the level of tax-exempt investments and loans and the overall level of pre-tax income. 

CAPITAL

As of March 31, 2017, total stockholders' equity and common stockholders' equity were $439.9 million (9.9% of total assets), equivalent to a book value of $31.40 per common share.  Total stockholders' equity and common stockholders' equity at December 31, 2016, were $429.8 million (9.4% of total assets), equivalent to a book value of $30.77 per common share.  At March 31, 2017, the Company's tangible common equity to tangible assets ratio was 9.7%, compared to 9.2% at December 31, 2016.   

On a preliminary basis, as of March 31, 2017, the Company's Tier 1 Leverage Ratio was 10.1%, Common Equity Tier 1 Capital Ratio was 10.4%, Tier 1 Capital Ratio was 11.1%, and Total Capital Ratio was 13.8%.  On March 31, 2017, and on a preliminary basis, the Bank's Tier 1 Leverage Ratio was 11.0%, Common Equity Tier 1 Capital Ratio was 12.0%, Tier 1 Capital Ratio was 12.0%, and Total Capital Ratio was 12.9%. 

LOANS

Total gross loans (including the undisbursed portion of loans), excluding previously acquired covered and non-covered loans and mortgage loans held for sale, but including the loans acquired from Fifth Third Bank, increased $38.3 million, or 0.9%, from December 31, 2016, to March 31, 2017.  This increase was primarily in commercial real estate loans ($39 million), construction loans ($52 million) and other residential (multi-family) real estate loans ($6 million).  These increases were partially offset by decreases in consumer loans ($35 million), one- to four-family residential loans ($17 million) and commercial business loans ($5 million).  The FDIC-acquired loan portfolios had net decreases totaling $24.1 million during the three months ended March 31, 2017.  

Loan commitments and the unfunded portion of loans at the dates indicated were as follows (in thousands):

	March 31, 2017	December 31, 2016	December 31, 2015	December 31, 2014
Closed loans with unused available lines
Secured by real estate (one- to four-family)	$         127,527	$         123,433	$       105,390	$          92,286
Secured by real estate (not one- to four-family)	22,234	26,062	21,857	23,909
Not secured by real estate - commercial business	93,541	79,937	63,865	63,381
Closed construction loans with unused available lines
Secured by real estate (one-to four-family)	8,419	10,047 Werbung Mehr Nachrichten zur Great Southern Bancorp Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 15:46 - dpa-AFX Rüstungsfirmen gründen Projektgesellschaft für neues Kampfpanzersystem 15:02 - dpa-AFX Correspondents' Dinner: Witze über Trump, Proteste vor der Tür 14:10 - dpa-AFX US-Justiz stellt Diesel-Ermittlungen gegen Mercedes-Benz ein Biotech-Einhorn!    Ist das die nächste Milliarden-CBD-Übernahmestory? weiterlesen» Anzeige wo-site-teaser-box-16782_site-teaser-box_2024-04-28_09%253A00%253A00_2024-04-29_09%253A00%253A59