SPRINGFIELD, MO (STL.News) Great Southern Bancorp, Inc. (NASDAQ:GSBC), the holding company for Great Southern Bank, Monday reported that preliminary earnings for the three months ended June 30, 2020, were $0.93 per diluted common share ($13.2 million available to common shareholders) compared to $1.28 per diluted common share ($18.4 million available to common shareholders) for the three months ended June 30, 2019.
Preliminary earnings for the six months ended June 30, 2020, were $1.98 per diluted common share ($28.1 million available to common shareholders) compared to $2.52 per diluted common share ($36.0 million available to common shareholders) for the six months ended June 30, 2019.
For the quarter ended June 30, 2020, annualized return on average common equity was 8.45%, annualized return on average assets was 0.98%, and annualized net interest margin was 3.39%, compared to 13.24%, 1.52% and 3.97%, respectively, for the quarter ended June 30, 2019. For the six months ended June 30, 2020, annualized return on average common equity was 9.18%, return on average assets was 1.08%, and annualized net interest margin was 3.61%, compared to 13.18%, 1.51% and 4.02%, respectively, for the six months ended June 30, 2019.
Great Southern President and CEO Joseph W. Turner commented, “As we continue to manage through the pandemic, our primary concern is for the well-being of our associates, customers and communities. Our thoughts are with those directly affected by COVID-19. We remain steadfast in following CDC health guidelines, while providing our customers ready access to our products and services. Some of our customers unfortunately are facing financial hardships, and we are actively working with them to assist with whatever difficulty they may be experiencing.
“The duration and severity of the pandemic remains unknown, creating great uncertainty and challenges to the U. S. economy. As when the crisis started, we remain ready to respond to the challenges produced by these uncertain times and are in a position of strength regarding capital, earnings and liquidity.
“As expected in this operating climate, our earnings declined in the second quarter as compared to the year ago quarter, and such decline was primarily driven by loan loss provision expense, which was $4.4 million higher than the second quarter a year ago. Still, we achieved earnings of $0.93 per diluted common share. Pre-tax, pre-provision earnings were down $1.3 million, or 5.6%, due mainly to lower net interest income during the second quarter. Net interest income was affected by the Federal Reserve’s significant interest rate cuts in March, additional lower earning assets (SBA’s Paycheck Protection Program loans, investment securities and cash balances held at the Federal Reserve Bank), and interest expense related to the subordinated debt offering completed in mid-June. The rate cuts negatively affected our net interest margin in the near term as a large portion of our loan portfolio is indexed to one-month LIBOR rates, with those rates declining almost immediately. Most of our deposit portfolio will reprice lower, although not as quickly, as time deposits will primarily mature over the next year. On June 30, 2020, our cost of deposits was 29 basis points lower than it was on March 31, 2020.”
Turner continued, “Total gross loans (including the undisbursed portion of loans), increased $241 million, or 4.9%, from the end of 2019 to June 30, 2020, and increased $187 million during the second quarter of 2020. The increase during the last six months was primarily in other residential (multi-family) loans, commercial business loans, one- to four-family residential loans and commercial real estate loans.
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