Great Southern Bancorp, Inc. Reports Preliminary Fourth Quarter and Annual Earnings of $0.82 and $3.28 Per Diluted Common Share

SPRINGFIELD, Mo., Jan. 20, 2016

Preliminary Financial Results for the Quarter and Year Ended December 31, 2015:

• Total Loans:  Total gross loans, excluding acquired covered loans, acquired non-covered loans and mortgage loans held for sale, increased $397.3 million, or 15.2%, from December 31, 2014, to December 31, 2015, primarily in the areas of commercial real estate loans, consumer loans, construction loans and other residential loans. Net decreases in the acquired loan portfolios totaled $95.7 million in the year ended December 31, 2015.
• Net Interest Income:  Net interest income for the fourth quarter of 2015 decreased $4.8 million to $40.7 million compared to $45.5 million for the fourth quarter of 2014. Net interest margin was 4.34% for the quarter ended December 31, 2015, compared to 5.08% for the fourth quarter of 2014 and 4.43% for the quarter ended September 30, 2015.  The decrease in the margin from the prior year fourth quarter was primarily the result of decreases in average loan yields and 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 year quarter, partially offset by increased total average loans.  The positive impact on net interest margin from the additional yield accretion on acquired loan pools that was recorded during the period was 60, 102 and 71 basis points for the quarters ended December 31, 2015, December 31, 2014 and September 30, 2015, respectively.  For further discussion of the additional yield accretion of the discount on acquired loan pools, see "Net Interest Income."
• Asset Quality:  Non-performing assets and potential problem loans, excluding those currently or previously covered by FDIC loss sharing agreements and those acquired in the FDIC-assisted transaction with Valley Bank, which are not covered by a loss sharing agreement but are accounted for and analyzed as loan pools rather than individual loans, totaled $56.8 million at December 31, 2015, a decrease of $11.9 million from $68.7 million at December 31, 2014 and a decrease of $5.8 million from $62.6 million at September 30, 2015.  Non-performing assets were $44.0 million, or 1.07% of total assets, at December 31, 2015, compared to $43.7 million, or 1.11% of total assets, at December 31, 2014 and $36.5 million, or 0.90% of total assets, at September 30, 2015. 
• Capital:  The capital position of the Company continues to be strong, significantly exceeding the thresholds established by regulators. On a preliminary basis, as of December 31, 2015, the Company's Tier 1 Leverage Ratio was 10.2%, Common Equity Tier 1 Capital Ratio was 10.8%, Tier 1 Capital Ratio was 11.5%, and Total Capital Ratio was 12.6%. 
• Significant Unusual Income or Expense Items:  During the three months ended December 31, 2015, the Company recorded the following unusual items:  the Company sold a non-marketable security at a gain of $300,000, which is included in the Consolidated Statements of Income under "Noninterest Income – Other income;"  the Company made valuation write-downs on foreclosed assets of $350,000, which is included in the Consolidated Statements of Income under "Noninterest Expense – Expense on foreclosed assets;"  the Company incurred additional compensation, legal and other expenses totaling $480,000 related to the previously announced acquisition of certain branches of Fifth Third Bank (see "Business Initiatives" below for further discussion).  The Company made a charitable contribution totaling $200,000 during the quarter that is included in the Consolidated Statements of Income under "Noninterest Expense – Other operating expenses."  This charitable contribution will also create an associated state tax credit for the Company. 

Great Southern Bancorp, Inc. (NASDAQ:GSBC), the holding company for Great Southern Bank, today reported that preliminary earnings for the three months ended December 31, 2015, were $0.82 per diluted common share ($11.5 million available to common shareholders) compared to $0.86 per diluted common share ($11.9 million available to common shareholders) for the three months ended December 31, 2014. 

Preliminary earnings for the year ended December 31, 2015, were $3.28 per diluted common share ($45.9 million available to common shareholders) compared to $3.10 per diluted common share ($43.0 million available to common shareholders) for the year ended December 31, 2014. 

For the quarter ended December 31, 2015, annualized return on average common equity was 11.74%, annualized return on average assets was 1.15%, and net interest margin was 4.34%, compared to 13.43%, 1.23% and 5.08%, respectively, for the quarter ended December 31, 2014.  For the year ended December 31, 2015, return on average common equity was 12.13%; return on average assets was 1.14%; and net interest margin was 4.53% compared to 12.63%, 1.14% and 4.84%, respectively, for the year ended December 31, 2014. 

President and CEO Joseph W. Turner commented, "We were pleased with the Company's performance in the fourth quarter.  Earnings were primarily driven by continued loan growth throughout the Company's market areas and in most loan types.  Total loans, excluding acquired covered and non-covered loans and mortgage loans held for sale, increased $93 million from the end of the third quarter of 2015, and increased $397 million in 2015 (15%).  A large portion of this quarter's loan growth occurred in December, so we did not get the full benefit of this growth for the entire quarter.  The reported net interest margin was 4.34% for the quarter ended December 31, 2015.  The net interest margin, excluding the effects of yield accretion on acquired loans, remained stable at 3.74% for the fourth quarter as compared to the third quarter.  With the increase in the Federal Funds rate in December, a portion of our loan portfolio experienced a rate increase which helped relieve some pressure on average loan yields.  Deposit costs have trended slightly higher because of increased competition and the impact of the Federal Funds rate increase on non-core funds.  Non-performing loans increased significantly in the fourth quarter primarily because of two unrelated relationships which totaled $10.2 million. These two relationships have each been with the Bank for over 15 years and were previously included in classified assets as potential problem loans.  Total classified assets were down nearly $6 million from September 30, 2015, and down nearly $12 million from the end of 2014.  We remain focused on credit quality and are pleased that our level of classified assets decreased in 2015.  Also of note in the fourth quarter, the Company exited the U.S. Treasury's Small Business Lending Fund by redeeming all $57.9 million of associated preferred stock. The Company used internally-generated funds to complete this redemption."

Turner continued, "We are preparing to finalize the purchase of 12 branches and related deposits and certain loans from Fifth Third Bank in the St. Louis-area market.  The completion of the transaction and systems conversions to transfer related acquired accounts to Great Southern is anticipated to occur after close of business on January 29, 2016.  This transaction will more than double our banking center network and double our customer deposit base in the St. Louis area.  As previously announced, we consolidated operations of 14 banking centers on January 8, 2016, as part of our ongoing performance analysis of the entire banking center network.  In addition, agreements to sell two banking centers and related deposits to separate bank purchasers have been signed and these transactions should be completed in the first quarter of 2016."