Great Southern Bancorp, Inc.

Hi, and welcome to the Great Southern Bait Corps' fourth quarter 2022 earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Kelly Politis, Investor Relations. Please go ahead.

Thank you, Jonathan. Good afternoon and welcome. The purpose of this call is to discuss the company's results for the quarter ending December 31st, 2022. Before we begin today, I need to remind you that during this call, we may make forward-looking statements about future events and financial performance. Please do not place undue reliance on any forward-looking statements which speak only as of the date they are made. Please use our forward-looking statements disclosure in our fourth quarter 2022 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.

All right. Thanks, Kelly. Good afternoon to everybody. We appreciate you joining us today for our earnings call. Our fourth quarter results reflected another strong quarter for Great Southern. We benefited, of course, from rising market interest rates, and our 2022 net income and earnings per share were exceptional. On a macro basis, 2023 appears to be a year that will be marked by a great deal of uncertainty. We're focused on ensuring that our company is positioned for this uncertainty as we move forward in light of the changing interest rate environment and other macro headwinds that are forecasted for 2023. As usual, 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, of course, we'll open it up for questions. In the fourth quarter of 2022, we earned $22.6 million, or $1.84 for diluted common share, compared to $15.3 million, or $1.14 for diluted common share in the same period in 2021. The 2021 period did include some large non-recurring interest, non-interest expense items, which reduced our net income and APS. We had a few significant income and expense items during the fourth quarter of 22 as well. First of all, legal and professional fees. We told you that for the remainder of 2022 and then probably the first three quarters of 2023, we would be having between $1.1 million and $1.3 million of quarterly expense related to professional services, you know, for helping us with our conversion, and we did have actually a little more than that, $1.4 million of those expenses during the quarter. We had an investment sale loss of $168,000 during the quarter, and we had an income tax adjustment which reduced income tax expense by $1.1 million, although we expect going forward our income tax expense or our income tax rate will be more similar to, you know, what it's been in previous quarters. Our earnings ratios were all strong. Our return on assets was 158. Our return on equity was 17.34. Our net interest margin was 399. That improved from 337 in the year-ago quarter and 396 in the third quarter of 2022. It does look like, you know, At least a couple more times in 2023, the Federal Reserve will raise interest rates. That may help us slightly, although I think this late in the rate rising cycle, I think any benefit from rising interest rates is going to be pretty muted. As far as loans go, from the end of 21, our loans grew almost $500 million, 12.5%. the growth slowed in the fourth quarter to about $10 million. Our pipeline of loan commitments was basically flat from the end of the third quarter to the end of the fourth quarter, but was up significantly from the beginning of the year. So good lending volume, although probably slowing loan volume in the fourth quarter. Our credit quality metrics remained extremely strong, very low levels of non-performing assets, $3.7 million at the end of the year. Loan delinquencies are very low. Our capital did pick up a little bit in the fourth quarter. Our TCE ratio went from 8.8 to 9.2%. We paid a $0.40 dividend in the quarter, total dividends during the year of $1.56. And in addition, in our efforts to enhance shareholder value, we did repurchase about 1.04 million shares of our stock during 2022 at an average price of $59.25. I think our repurchase activity did slow down in the fourth quarter, maybe about 50,000 shares repurchased. That concludes my prepared remarks.