Great Southern Bancorp, Inc.

Ernie's conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question at that time, please press star then 1 on your touchtone telephone. As a reminder, today's conference call is being recorded. I would like to turn the conference to your host, Ms. Kelly Polonis, Investor Relations. You may begin.

Thank you, Valerie. Good afternoon and welcome. The purpose of this call today is to discuss the company's results for the quarter ending June 30th, 2021. Before we begin, I need to remind you that during this call, we may make forward-looking statements about future events and financial performance. You should not place undue reliance on any forward-looking statements which speak only as of the date they are made. Please see our forward-looking statements disclosure in our second quarter 2021 earnings release for more information. President and CEO Joe Turner and Chief Financial Officer Rex Copeland are on the call with me today. I'll now turn the call over to Joe Turner.

Okay. Thanks, Kelly, and good afternoon to everybody. Appreciate you joining us today. We are very pleased with our second quarter earnings and our continued strong operations and financial condition. Our associates continue to focus on taking care of our customers' lending, deposit, and other financial needs, has enabled us to achieve strong operating results. I'll provide some brief remarks about the company's performance and then turn the call over to Rex Copeland, who will get into more detail on our financial results. Then we'll open it up for questions. For the second quarter of 2021, we earned $20.1 million, or $1.46 per share, compared to $13.2 million, or $0.93 per share, in the same period in 20 points. The primary drivers of our higher earnings this year were higher net gains on mortgage loan sales, increased point of sale debit card and ATM fees, paycheck protection program net deferred fee income accretion of $1.1 million, and a negative credit loss provision of $1.3 million related to both our outstanding loan portfolio and the unfunded commitments. The after-tax effect of this on earnings was 7 cents per diluted share. Our earnings performance ratios improved with an annualized return on average assets of 144 and an annualized return on average equity of 1,284 and an efficiency ratio of 55.63%. The net interest margin was down a few basis points from a year ago, but we really believe was greatly improved. Rex will get into more color there. As we anticipated overall loan growth decrease from the end of 2020, which is a reflection of how loan growth has a tendency to ebb and flow over relatively short periods of time and is dependent on economic and competitive factors. Total gross loans, which include unfunded loan amounts, decreased by $40 million from the end of 2020. Outstanding net loan receivable balance decreased $82.5 million from $4.3 billion at December 31 to $4.21 billion at June 30. Our loan pipeline, however, did increase slightly. So far this year, loan production and activity in our markets has been vigorous, but repayments, including forgiveness of PPP loans, have created significant headwinds. As you can see in our news release, as I said earlier, our loan pipeline did grow slightly during the quarter and continues to be very strong. We were busy with the Paycheck Protection Program during the second quarter. Forgiveness, we originated 1,600 loans, totaling approximately $121 million in round one of PPP. Currently, we have received full forgiveness on nearly all those. I think we have 120 million of the 121 and 1,578 of the 1,600 loans that we've received full forgiveness on. As far as the second round goes, we funded 1,650 loans, totaling about $58 million. and we've received full forgiveness on 13 loans, 13 of those loans totaling about $2 million. As far as CARES Act loan modifications, at the end of the quarter we had 15 modified commercial loans with an aggregate outstanding balance of $91 million and 13 modified consumer and mortgage loans with an aggregate balance of $876,000. Asset quality generally has been, you know, continued to be excellent. During the quarter, we had just $100,000 of charge-offs. Our level of non-performing assets, as we always say, will fluctuate, but they're extremely low as of June 30, 2021. At that point, excluding FDIC-acquired assets, our non-performing assets were $5.5 million, which is a decrease of $1.2 million from March 31, 2021. Including FDIC-acquired assets, our non-performing assets were $8.6 million from and our non-performing assets, the period-end assets, were 0.15%. So excellent, excellent credit quality. Our allowance for credit losses as a percentage of the total outstanding loans was 1.56%. Our capital continues to be very strong. From the end of 2020, our total common stockholders' equity decreased slightly by about $100,000 to $629.6 million. Decreases in stockholders' equity included the effects of our adoption of the CECL loan loss standard, regular dividends paid, purchases of our common stock, and a decline in the market value of our available for sale securities portfolio. These decreases were offset by our strong earnings during the first six months of 2021. Our book value did increase from $45.79 per share to $46.10 per share. During the second quarter, we repurchased 67,500 shares of common stock. During the first six months of 2021, we repurchased 142,000 shares of our common stock. With our favorable credit quality and strong capital position, we announced at the end of the quarter that we will redeem our $75 million sub-debt issue that hits its five-year period in August of 2021. These subordinated notes have an interest rate of 5.25%, and since their issuance, the company has recorded annual interest expense of about $4.3 million on these notes. Finally, in July, we were sad to see our Chief Operating Officer of many years, Doug Mars, retire from the company. Doug's been with Great Southern 25 years and had a banking career that spanned 43 years. During his tenure with Great Southern, you know, he was directly responsible for many of the great things we accomplished. And as I say, we're sad to see him go, but glad that he's able to enjoy what will hopefully be a very long and healthy retirement. Doug, as all our managers do, took very seriously his responsibility of making sure his area was positioned to thrive in his absence. And he's been working with a very capable successor, Mark Maples, for well over a year. to ensure a smooth transition, and that's what we're seeing certainly in that area. Mark is also a banking veteran. He's probably a 30-year banking veteran with 16 of those years spent here with Great Southern. That concludes my prepared remarks. At this point, I'll turn the call over to our CFO, Rex Copeland.