Great Southern Bancorp Inc. (NASDAQ:GSBC) Q3 2019 Earnings Conference Call Transcript

Oct 17, 2019 • 03:00 pm ET

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Great Southern Bancorp Inc. (NASDAQ:GSBC) Q3 2019 Earnings Conference Call Transcript

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Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Great Southern Bancorp, Inc. Third Quarter 2019 Earnings Conference Call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Kelly Polonus. Thank you. Please go ahead.

Executive
Kelly Polonus

Thank you, Valerie. Good afternoon and welcome. This is Kelly Polonus with Investor Relations for Great Southern Bancorp. The purpose of our call today is discuss the Company's results for the quarter ending September 30, 2019.

Before begin, I need to remind you that during the course of this call, we may make forward-looking statements about future events and future financial performance. You should not place undue reliance on any forward-looking statements, which speak only as of the date they are made. These statements are subject to a number of factors that could cause actual results to differ materially from the results anticipated or projected. For a list of some of these factors, please see the forward-looking statements disclosure in our third quarter 2019 earnings release.

President and CEO, Joe Turner; and Chief Financial Officer, Rex Copeland are here with me. I'll now turn the call over to Joe Turner.

Executive
Joseph W. Turner

All right. Thanks, Kelly, and good afternoon to everyone who is on the call. I want to thank you for joining us for our third-quarter earnings call. As usual, I'll provide some introductory remarks, some high-level remarks and then Rex -- turn it over to Rex to talk a little bit more in detail about the income statement.

Overall, our third quarter results were very good. Hopefully, you've had a chance to read the earnings release, and if you have, you've seen that we earned $1.38 a share or $19.7 million. We saw good loan growth during the quarter, and we further improved our operational efficiency. While net income dollars did grow, we experienced some net interest margin compression during the quarter. And Rex will provide some color around that.

Our performance metrics were all strong, return on common equity 13.46%, return on assets 1.61%, net interest margin was 3.95%, I think 3.75% core, and our efficiency ratio was 52.63%.

Loan production during the third quarter was pretty solid. We had growth both in outstanding loans in our pipeline during the quarter, both when compared to the end of the year and when compared to the linked quarter. The increase in our outstanding loans was primarily due to increases in commercial real estate, owner-occupied, one-to-four family and multi-family loan. That was partially offset by decreases in the consumer auto loan portfolio, which we've talked to you guys about before.

We do continue to believe that the market is slowing. We've seen lower deal flow I think, and typically when rates start reducing, it's as a result of the economy slowing and maybe lenders are getting scared, so you'll see increased credit spread. Right now, we're seeing decrease in credit spreads, higher levels of competition for lower deal flow. So I think it's a challenging environment from a