Great Southern Bancorp, Inc. · NASDAQ:GSBC
Great Southern Bancorp — Debt Investor Presentation (June 2020)
33 slides from Great Southern Bancorp's debt investor presentation, Jun 8, 2020
Slide 1: Great Southern Bancorp, Inc. Investor Presentation
GREAT SOUTHERN BANCORP. INC. INVESTOR PRESENTATION
Slide 2: Safe Harbor/Legal Disclaimer
Safe Harbor/Legal Disclaimer This presentation contains statements that are considered forward - looking statements within the meaning of and are intended to b e covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward - looking statements typically are
Slide 3: Terms of the Proposed Offering
Terms of the Proposed Offering 3 Joint Book - Runners: Security: Amount: Rating: Structure: Issuance Type: Term: Call Date: Use of Proceeds: Issuer: Co - Manager: Great Southern Bancorp, Inc. (NASDAQ: GSBC) Subordinated Notes $ 50 million BBB - by Kroll Bond Rating Agency, Inc. Fixed - to - Floating
Slide 4: Proven Leadership Team
Proven Leadership Team 4 Strategy / Financial / Joseph Turner President & CEO • Joined Great Southern Bank in 1991 and became a director of Great Southern in 1997 • B ecame President and CEO of Great Southern in 1999 • Has 29 years of experience at Great Southern Rex Copeland CFO & Treasurer • Joine
Slide 5: Great Southern Snapshot
($ in millions) 2019 1Q2020 Balance Sheet Total Assets $5,015 $5,073 Loans Held for Investment 4,194 4,239 Total Deposits 3,960 4,179 Tangible Common Equity 595 606 Profitability ROAA 1.52% 1.20% ROATCE¹ 13.08% 10.12% Net Interest Margin 3.95% 3.84% Efficiency Ratio² 54.48% 58.91% Capital TCE / TA¹
Slide 6: Investment Thesis
Investment Thesis • Focused on long - term growth and profitability with a 97 year history • Exceptional credit quality • Well capitalized, diversified loan portfolio and low - cost deposit base • Strong core operating earnings power • Diverse retail banking franchise • Experienced management team w
Slide 7: Track Record of Consistent Growth
$392 $417 $461 $523 $595 $606 $0 $700 $4,104 $4,551 $4,415 $4,676 $5,015 $5,073 $0 $6,000 7 Track Record of Consistent Growth Note: Dollar values in millions (1) See appendix for non - GAAP reconciliation of tangible common equity (page 33) Total Assets Gross Loans HFI Tangible Common Equity¹ $3,379
Slide 8: Highly Disciplined Acquisition Strategy
8 Highly Disciplined Acquisition Strategy Note: Dollar values in millions Source: S&P Global Market Intelligence (1) As of March 31, 2020 Acquisition Loans Deposits Number of Target Date County State Acquired Assumed Branches Valley Bank 06/20/2014 Scott IA $193.2 $365.6 13 InterBank 04/27/2012 Henn
Slide 9: Strong Core Earnings Power
9 Strong Core Earnings Power Note: Dollar values in millions, except per share amounts (1) Non - interest expense divided by the sum of net interest income plus non - interest income (2) See appendix for non - GAAP reconciliation of return on tangible common equity (page 33 ) Pre - Provision Net Rev
Slide 10: Stable Net Interest Margin
(1) Excludes impact of FDIC - acquired loan accretion; see appendix for non - GAAP reconciliation of core net interest margin (page 32) 10 Stable Net Interest Margin 5.48% 4.89% 4.63% 5.07% 5.37% 5.15% 4.53% 4.05% 3.74% 3.99% 3.95% 3.84% 0.42% 0.50% 0.57% 0.79% 1.17% 1.07% 4.60% 4.44% 4.50% 4.94% 5.
Slide 11: COVID-19 Response: Associates, Customers, Communities
Associates Customers Communities • Paid Time Off • Part - time associates – paid sick leave • Quarantine – full pay • Special Bonus - all associates • Mental Health Support – enhanced Employee Assistance Program • Personal Protective Equipment – available to all onsite associates • • Work from Home
Slide 12: Highly Disciplined Credit Management
Highly Disciplined Credit Management Asset Quality Trends¹ 12 (1) Excludes FDIC - acquired assets 1.07% 0.86% 0.63% 0.25% 0.16% 0.16% 0.00% 3.00% 2015 2016 2017 2018 2019 1Q2020 0.20% 0.29% 0.26% 0.13% 0.10% 0.02% 0.00% 1.00% 2015 2016 2017 2018 2019 1Q2020 Annual. 1.20% 1.04% 1.01% 0.98% 1.00% 1.06
Slide 13: Operating in Stable Midwest Markets
Operating in Stable Midwest Markets Unemployment Rate by State 13 Source: US Bureau of Labor Statistics Rank State April 2020 Preliminary Unemployment Rate Depository Branch Locations Commercial LPO Rank State April 2020 Preliminary Unemployment Rate Depository Branch Locations Commercial LPO 1 Conn
Slide 14: Diversified Loan Portfolio
14 Note: Financial data as of March 31, 2020 (1) Includes Home Equity Loans of $121.6 million Diversified Loan Portfolio $4.2 Billion Consumer ¹ 7.3% Single Family Real Estate 14.8% Multifamily Real Estate 21.9% Commercial Real Estate 36.0% Const. & Land Dev 13.6% Commercial Business/Bonds 6.4% Kans
Slide 15: High Quality Loan Portfolio
High Quality Loan Portfolio Conservative Underwriting & Limited Concentrations 15 Note: Financial data as of March 31, 2020; Dollar values in thousands One-to Four-Family Residential Construction $17,238 $0 0 $0 0 $17,238 Subdivision Construction 6,249 25 0 0 0 6,274 Land Development 38,507 0 0 0 0
Slide 16: COVID-19 Loan Modifications
COVID - 19 Loan Modifications 1 6 Collateral Type # of Loans Modified $ of Loans Modified Interest Only 3 Months Interest Only 4 - 6 Months Interest Only 7 - 12 Months Full Payment Deferral 3 Months Full Payment Deferral 6 Months Weighted Average Loan to Value of Loans Modified¹ Retail 98 $ 249.8 $
Slide 17: Hotel/Motel Portfolio
Hilton $81M 38% Marriott $79M 37% Wyndham $4M 2% Choice $8M 4% IHG $23M 11% Independent $18M 8% Minneapolis 20.1% Chicago 11.8% Branson 3.6% Other Missouri 9.8% Tulsa 6.2% Springfield 4.9% Iowa 3.9% St. Louis 7.4% Other Regions 32.2% 17 Note: Financial data as of March 31, 2020 Sectors with Escalate
Slide 18: Restaurant Portfolio
Over $5M $9M 11% $2.5 to $5M $17M 22% $1M to $2.5M $25M 32% Under $1M $26M 35% • $77 million, or 2% of the total loan portfolio • $ 3 5 million, or 45 %, of the loans have secured a payment modification as of May 31 , 2020 • Weighted average LTVs of 60% • Top tier quick service restaurant brands wit
Slide 19: Retail Portfolio
Missouri 25.9% Texas 12.3% Kansas 11.6% Oklahoma 11.5% Illinois 6.3% Minnesota 5.4% Ohio 4.4% Iowa 4.4% Pennsylvania 2.6% Nebraska 2.5% Michigan 2.4% Nevada 2.2% Other States (20) 8.6% • $459 million or 11 % of the total loan portfolio • Granular portfolio with average loan size of $1.4 million , wi
Slide 20: Favorable Deposit Mix
20 Favorable Deposit Mix $4.2 Billion Cost of Total Deposits = 1.07% CDARS Customer 1.6% Checking & Savings 54.9% Brokered CDs 11.9% CDs 31.6% Minnesota 5.4% Springfield MO Metro 46.7% All Other Missouri 13.4% St. Louis Metro 11.8% Kansas City Metro 3.9% All Other Kansas 3.9% Sioux City IA Metro 6.5
Slide 21: Deposit Market Share
Deposit Market Share 21 Metropolitan Statistical Area Springfield, MO 19 16.0% 1 Sioux City, IA-NE-SD 6 7.0% 4 Davenport/Moline/Rock Island, IA-IL 5 1.2% 21 Des Moines/West Des Moines, IA 5 0.8% 21 St. Louis, MO-IL 19 0.6% 27 Kansas City, MO-KS 8 0.3% 34 Fayetteville/Springdale/Rogers, AR-MO 1 0.2%
Slide 22: Balance Sheet Repricing
Balance Sheet Repricing - - As of March 31, 2020 22 • The results of our modeling indicate that net interest income is not likely to be significantly affected either positively or ne gatively in the first twelve months following a rate change • Our portfolios are relatively well matched in a twelve
Slide 23: Liquidity Sources
Liquidity Sources 23 Note: Financial data as of March 31, 2020; Dollar values in millions (1) Does not include additional capacity to add brokered and national rateline CDs Cash and Cash Equivalents $ 240.5 Unpledged Securities 249.8 On - balance Sheet Liquidity 490.3 Available to Borrow on Secured
Slide 24: Securities Portfolio
Securities Portfolio 24 Note: Financial data as of March 31, 2020; There were no held - to - maturity sec urities at March 31, 2020; Dollar values in millions Fair Value of Securities Portfolio Agency MBS $181 45.6% Agency CMOs $160 40.5% States & Political Subdivisions $33 8.4% SBA Securities $22 5
Slide 25: Consistently Strong Capital and TBV Growth
Consistently Strong Capital and TBV¹ Growth 25 $28.26 $29.88 $32.71 $36.94 $41.72 $43.06 9.58% 9.20% 10.46% 11.20% 11.88% 11.97% 5.00% 15.00% $15.00 $45.00 2015 2016 2017 2018 2019 1Q2020 TBVPS TCE Ratio (1) See appendix for non - GAAP reconciliation of tangible common equity to tangible assets (pag
Slide 26: Holding Company Capitalization
Holding Company Capitalization 26 Note: Financial data as of March 31, 2020; Assumes $ 50 million subordinated debt issuance, a 1.45% underwriting fee, $350K other offering expenses, 20% risk weighting on net procee ds and $0 down - streamed to the bank (1) See appendix for non - GAAP reconciliation
Slide 27: Historical Interest Coverage
Historical Interest Coverage 27 Note: Assumes $50 million subordinated debt issuance, a 1.45% underwriting fee, $350K other offering expenses, 20% risk weigh tin g on net proceeds and $0 down - streamed to the bank (Dollars in thousands) For the Quarter Ended, 12/31/2018 3/31/2019 6/30/2019 9/30/201
Slide 28: A Long-Term View: Dividends
A Long - Term View 28 Regular Quarterly Cash Dividends Declared on Common Stock $0.00 $0.35 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Q1 Q2 Q3 Q4 Special Cash Dividends Declared on Common Stock • January 2019 – $0.75 per common share • January 2020 – $1.00
Slide 29: Thank You
Thank You • For more information: x Visit our Web site: www.GreatSouthernBank.com x Sign up for e - mail notification to get the latest Great Southern news x Call us with questions: 417.895.5242 29
Slide 30: Appendix
Appendix 30
Slide 31: Incurred Loss Model vs. CECL
$40,294 $43,928 $65,928 (3) $3,634 $11,000 to $14,000 $7,000 to $12,000 12/31/19 ALLL Reserve Build Under Incurred Loss 3/31/20 Incurred Loss Reserve "As If" Day 1 CECL Reserve "As If" Incremental 3/31 CECL Reserve Build 3/31/20 "As If" ACL Incurred Loss Build • Pursuant to the recently - enacted Co
Slide 32: Non-GAAP Reconciliation
Non - GAAP Reconciliation 32 This presentation contains certain financial information determined by methods other than in accordance with accounting princ ipl es generally accepted in the United States (“GAAP”). These non - GAAP financial measures include core net interest income, core net interest
Slide 33: Non-GAAP Reconciliation (cont.)
Non - GAAP Reconciliation (cont.) 33 Non - GAAP Reconciliation : Return on Average Tangible Common Equity, Tangible Common Equity, Tangible Assets and Ratio of Tangible Common Equity to Tangible Assets (Dollars in thousands) FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 03/31/2020 Net Income Available to
Great Southern Bancorp — Debt Investor Presentation (June 2020) on 6ix