GSBC Q2 earnings fall 20% to $1.43/share on $2.1M in branch consolidation charges

The company announced preliminary financial results for the second quarter of 2026. The 8-K references a press release (Exhibit 99.1) containing unaudited financial information, but the filing body does not disclose specific figures such as earnings, revenue, or key metrics. Investors should review the attached exhibit for the actual results.

Great Southern announced the consolidation of nine banking centers and elimination of 66 positions across various divisions, resulting in $2.1 million in non-recurring Q2 2026 expenses: $1.4 million in property valuation allowances, $561,000 in severance costs, and $163,000 in lease termination costs. Management expects these actions to produce over $2 million in annual pre-tax income improvement beginning in Q4 2026, with $4.4 to $4.8 million in annual expense savings partially offset by deposit attrition and reduced fee income.

Great Southern Bancorp reported second-quarter 2026 net income of $15.8 million, or $1.43 per diluted share, down 20.2% from $19.8 million ($1.72 per share) in the prior-year quarter. The decline was primarily due to one-time expenses for branch consolidations and workforce reductions. These charges included a $1.4 million asset valuation allowance on four owned banking facilities slated for consolidation, a $163,000 lease termination charge, and $561,000 in severance costs.

Non-performing assets totaled $9.4 million, or 0.17% of total assets, at June 30, 2026. This represents a $1.3 million increase from year-end 2025 but a sequential improvement of $676,000 from the first quarter of 2026. The allowance for credit losses remained stable at 1.46% of total loans. Net charge-offs were $819,000 for the quarter, or 0.07% of average loans on an annualized basis.

Stockholders' equity rose to $641.6 million at June 30, 2026, up $5.5 million from $636.1 million at year-end 2025. The tangible common equity to tangible assets ratio stood at 11.47%. For the six months ended June 30, 2026, the company generated $33.3 million in net income, received $11.9 million from stock option exercises, paid $9.4 million in cash dividends, and repurchased $24.8 million in common stock.

Total deposits declined to $91.8M at June 30, 2026, from $35.9M at year-end 2025. Interest-bearing deposits fell $91.8 million (4.0%), primarily in money market accounts, while non-interest-bearing deposits grew $35.9 million (4.3%). Time deposits decreased $36.9 million (5.4%), and brokered deposits fell $87.8 million (13.2%), reflecting a shift in funding mix and reduced reliance on wholesale funding.

The bank's gross loan portfolio totaled $4.385 billion as of June 30, 2026, down from $4.4M at March 31, 2026. The portfolio is concentrated in commercial real estate (34%), multi-family real estate (31%), and single-family real estate (18%), with smaller exposures to construction & land development (9%) and commercial business (4%).

The bank disclosed detailed metrics for its office ($166.1M across 97 loans, 45% weighted average LTV) and retail/restaurant ($410.4M across 259 loans, 59% weighted average LTV) commercial real estate portfolios. All office and retail loans are pass-rated, indicating no current credit concerns in these segments.

The bank's $1.347 billion multi-family portfolio is conservatively positioned, with 92% of loans at 75% LTV or below. Only 3% of the portfolio has LTV ratios of 86% or higher, suggesting limited downside risk from potential property value declines.

Non-performing loans declined sharply to $1.0 million at June 30, 2026, from $3.5 million at March 31, 2026. The Q2 non-performing portfolio consisted primarily of single-family real estate ($991K) with minimal consumer ($6K) and agriculture ($36K) exposure, representing a substantial improvement in asset quality.

The loan portfolio is geographically diversified across 18 markets. St. Louis represents the largest single-market concentration at 17%, followed by Springfield (9%) and Minnesota (7%). The Midwest and Southern regions each account for 6-7% of total loans, with no other single market exceeding 5%.