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Category: Stock Market and Great Southern Bancorp
Date: 18 October 2019 Stock Price: $59.40 We take a look at the 3rd quarter earnings release of their 2019 fiscal year of Great Southern Bank, a US bank headquartered in Missouri with 97 banking centres across 6 states.
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About Great Southern Bancorp
Great Southern Bank was founded in 1923, with a $5,000 investment, four employees and 936 customers. Today, it has grown to $5.0 billion in total assets, nearly 1,200 dedicated associates serving 154,000 households.
Headquartered in Springfield, Mo., the Company operates 97 retail banking centers in Missouri, Arkansas, Iowa, Kansas, Minnesota and Nebraska, and commercial loan production offices in Atlanta, Chicago, Dallas, Denver, Omaha, Neb., and Tulsa, Okla. Customers can choose from a wide variety of checking accounts, savings accounts and lending options and can access the bank when, where and how they prefer, whether it's through a banking center, online or mobile banking services, ATMs, or telephone banking.
Great Southern Bancorp, Inc., the holding company for Great Southern Bank, is a public company and its common stock (ticker: GSBC) is listed on the NASDAQ Global Select stock exchange.
Headquartered in Springfield, Mo., the Company operates 97 retail banking centers in Missouri, Arkansas, Iowa, Kansas, Minnesota and Nebraska, and commercial loan production offices in Atlanta, Chicago, Dallas, Denver, Omaha, Neb., and Tulsa, Okla. Customers can choose from a wide variety of checking accounts, savings accounts and lending options and can access the bank when, where and how they prefer, whether it's through a banking center, online or mobile banking services, ATMs, or telephone banking.
Great Southern Bancorp, Inc., the holding company for Great Southern Bank, is a public company and its common stock (ticker: GSBC) is listed on the NASDAQ Global Select stock exchange.
Overview of Great Southern Bancorp's latest earnings report
The data provided below refers to the latest quarter's data unless specified otherwise
- Net interest income: $45.924 million (down from $42.985 million from the same quarter of the previous year)
- Net interest increased by 6.8% over the last 12 months
- Non interest expenses: $28.725 million (down from $28.309 million for the same quarter of the previous year)
- Non interest increased by 1.4% over the last 12 months
- Net income: $19.723 million (down from $22.516 million for the same quarter of the previous year)
- Diluted earnings per share: $1.38 (down from $1.57 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 14.3 million (unchanged from 14.3 million for the same quarter of the previous year)
- Book value per share: $41.98 (up from $35,90 per share for the same quarter of the previous year)
- Cash and cash equivalents: 190.877 million
- Cash and cash equivalents per share: $13.34
- Cash and cash equivalents makes up 22.45% of Great Southern Bancorp's market capital
- Cash and cash equivalents makes up 2.1% of Great Southern Bancorp's total assets
Great Southern Bancorp's management commentary on the results and earnings guidance
SPRINGFIELD, Mo., Oct. 16, 2019 (GLOBE NEWSWIRE) -- 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, 2019, were $1.38 per diluted common share ($19.7 million available to common shareholders) compared to $1.57 per diluted common share ($22.5 million available to common shareholders) for the three months ended September 30, 2018. During the three months ended September 30, 2018, the Company sold its branches and related deposits in Omaha, Neb., resulting in pretax income of $7.25 million ($7.4 million gain less $165,000 of transaction expenses for that period. The impact of this item, after the effect of the full tax rate for the Company, increased earnings per common share by approximately $0.39 in the 2018 period.
President and CEO Joseph W. Turner commented, “Overall third quarter results were solid. Return on average assets and return on common equity were very favorable at 1.61% and 13.46%, respectively. Our efficiency ratio of 52.63% improved from the second quarter of 2019, reflecting net interest income increases and our sustained focus on expense containment. Capital remains strong and our book value per share continues to grow. We were pleased to increase the third quarter dividend by two cents to $0.34 per share.
“Reported net interest margin was 3.95% in the third quarter of 2019, compared to 3.97% in the second quarter of 2019 and 4.02% in the 2018 third quarter. Compared to the 2019 second quarter, compression in our margin was caused primarily by unchanged average interest rates on deposits and borrowings and slightly lower yields on investment securities and other interest-earning assets. LIBOR interest rates continue to decrease and that puts some pressure on our loan yields. We continue to see strong pricing competition for loans and deposits in most of our markets.”
Turner continued, “We experienced moderate loan growth during the quarter. Outstanding net loan receivable balances grew by $168 million from the end of 2018, and increased $44 million from June 30, 2019. Total gross loan balances, which include unfunded loans, increased $65 million from the end of 2018, and grew $23 million from the end of the second quarter of 2019. Loan growth was primarily in commercial real estate loans, one- to four-family residential loans and multi-family loans. Our loan pipeline continues to be strong across the franchise. Asset quality metrics remain very sound and classified assets are at low levels. In the June 30, 2019, quarter, we reported a small spike in non-performing loans related to one borrower relationship. During the third quarter, this matter was mostly resolved after all collateral was obtained and approximately 90% of it was sold.”
President and CEO Joseph W. Turner commented, “Overall third quarter results were solid. Return on average assets and return on common equity were very favorable at 1.61% and 13.46%, respectively. Our efficiency ratio of 52.63% improved from the second quarter of 2019, reflecting net interest income increases and our sustained focus on expense containment. Capital remains strong and our book value per share continues to grow. We were pleased to increase the third quarter dividend by two cents to $0.34 per share.
“Reported net interest margin was 3.95% in the third quarter of 2019, compared to 3.97% in the second quarter of 2019 and 4.02% in the 2018 third quarter. Compared to the 2019 second quarter, compression in our margin was caused primarily by unchanged average interest rates on deposits and borrowings and slightly lower yields on investment securities and other interest-earning assets. LIBOR interest rates continue to decrease and that puts some pressure on our loan yields. We continue to see strong pricing competition for loans and deposits in most of our markets.”
Turner continued, “We experienced moderate loan growth during the quarter. Outstanding net loan receivable balances grew by $168 million from the end of 2018, and increased $44 million from June 30, 2019. Total gross loan balances, which include unfunded loans, increased $65 million from the end of 2018, and grew $23 million from the end of the second quarter of 2019. Loan growth was primarily in commercial real estate loans, one- to four-family residential loans and multi-family loans. Our loan pipeline continues to be strong across the franchise. Asset quality metrics remain very sound and classified assets are at low levels. In the June 30, 2019, quarter, we reported a small spike in non-performing loans related to one borrower relationship. During the third quarter, this matter was mostly resolved after all collateral was obtained and approximately 90% of it was sold.”
Great Southern Bancorp (NASDAQ: GSBC) stock price history
The image below, obtained from Google, shows the stock price history of Great Southern Bank (Nasdaq: GSBC) for the last 5 years. And it's been a decent time for Great Southern Bank stockholders. 5 years ago Great Southern Bank was trading at around $34.50 and its currently trading at $59.40. So the stock has provided Great Southern Bancorp' stockholders with a return of 72.2% over the last 5 years.
While the return provided by Great Southern Bancorp is pretty good, the opportunity cost of holding the stock is pretty high when one looks as the strong growth over the last 5 years some of the other stocks we valued recently showed, with a large number of companies having grown by well over 100% over a 5 year period, for example Netflix that increased by over 300% over the last 5 years.
The stock of Great Southern Bancorp's is trading at very close to its 52 week high of $60.94 and far away from its 52 week low of $43.30, which is a clear indication that the short term sentiment and momentum of Great Southern Bancorp's stock is very positive.
While the return provided by Great Southern Bancorp is pretty good, the opportunity cost of holding the stock is pretty high when one looks as the strong growth over the last 5 years some of the other stocks we valued recently showed, with a large number of companies having grown by well over 100% over a 5 year period, for example Netflix that increased by over 300% over the last 5 years.
The stock of Great Southern Bancorp's is trading at very close to its 52 week high of $60.94 and far away from its 52 week low of $43.30, which is a clear indication that the short term sentiment and momentum of Great Southern Bancorp's stock is very positive.
Recent coverage of Great Southern Bancorp
The extract below discusses Great Southern Bancorp in more detail as obtained from Zacks.com
Great Southern Bancorp (GSBC - Free Report) came out with quarterly earnings of $1.38 per share, beating the Zacks Consensus Estimate of $1.19 per share. This compares to earnings of $1.57 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 15.97%. A quarter ago, it was expected that this bank holding company would post earnings of $1.13 per share when it actually produced earnings of $1.28, delivering a surprise of 13.27%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times. Great Southern Bancorp, which belongs to the Zacks Financial - Savings and Loan industry, posted revenues of $54.58 million for the quarter ended September 2019, surpassing the Zacks Consensus Estimate by 4.56%. This compares to year-ago revenues of $57.59 million. The company has topped consensus revenue estimates four times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Read the full article here
Great Southern Bancorp (GSBC - Free Report) came out with quarterly earnings of $1.38 per share, beating the Zacks Consensus Estimate of $1.19 per share. This compares to earnings of $1.57 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 15.97%. A quarter ago, it was expected that this bank holding company would post earnings of $1.13 per share when it actually produced earnings of $1.28, delivering a surprise of 13.27%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times. Great Southern Bancorp, which belongs to the Zacks Financial - Savings and Loan industry, posted revenues of $54.58 million for the quarter ended September 2019, surpassing the Zacks Consensus Estimate by 4.56%. This compares to year-ago revenues of $57.59 million. The company has topped consensus revenue estimates four times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Read the full article here
Great Southern Bancorp (NASDAQ: GSBC) latest stock valuation
So based on the 3rd quarter 2019 earnings report of Great Southern Bancorp what do we value Great Southern Bancorp's stock at? Based on the earnings report released by the group our valuation model provides a target (full value) price for Great Southern Bancorp at $71.10 a stock. We therefore believe the stock of Great Southern Bancorp is undervalued.
We suggest long term fundamental and value investors look to enter the stock at least 10% below our current target (full value) price of $71.10. Therefore we believe a good entry point into Great Southern Bancorp is at $64 or below. Since Great Southern Bancorp is trading at well below our recommended entry point into the group we rate the stock of Great Southern Bancorp as a buy.
We suggest long term fundamental and value investors look to enter the stock at least 10% below our current target (full value) price of $71.10. Therefore we believe a good entry point into Great Southern Bancorp is at $64 or below. Since Great Southern Bancorp is trading at well below our recommended entry point into the group we rate the stock of Great Southern Bancorp as a buy.
Next earnings release of Great Southern Bancorp
It is expected that the 4th quarter earnings release of Great Southern Bancorp will be released in early January 2020