Safe and Sound

Great Southern Bank

Reeds Spring, MO
5
Star Rating
Great Southern Bank is a Reeds Spring, MO-based, FDIC-insured bank that opened its doors in 1923. As of December 31, 2017, the bank held equity of $533.2 million on $4.42 billion in assets.

With 1,112 full-time employees in 118 offices in multiple states, the bank has amassed loans and leases worth $3.74 billion, including real estate loans of $3.04 billion. U.S. bank customers currently have $3.64 billion in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, Great Southern Bank exhibited a superior condition, earning a full 5 stars for safety and soundness. Here's an analysis of how the bank fared on the three major criteria Bankrate used to evaluate U.S. banks on safety and soundness.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and affords protection for account holders when a bank is experiencing economic instability. Therefore, when it comes to measuring an an institution's financial resilience, capital is essential. From a safety and soundness perspective, the higher the capital, the better.

Great Southern Bank exceeded the national average of 13.13 points on our test to measure capital adequacy, racking up 14 out of a possible 30 points.

One commonly used measure of this buffer is a bank's Tier 1 capital ratio. Great Southern Bank's Tier 1 capital ratio was 12.30 percent, above the 6 percent level considered adequate by regulators, but under the national average of 25.65 percent. A higher capital ratio means the bank will be better able to weather economic difficulties.

Overall, Great Southern Bank held equity amounting to 12.07 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test's purpose is to estimate how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as unpaid mortgages.

Having large numbers of these kinds of assets may eventually require a bank to use capital to absorb losses, cutting down on its equity cushion. It also means that there are likely to be many assets that are in non-accrual status and no longer earning money, resulting in reduced earnings and potentially more risk of a future failure.

On Bankrate's test of asset quality, Great Southern Bank scored 36 out of a possible 40 points, below the national average of 37.49 points.

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.55 percent of Great Southern Bank's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.01 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . How large that reserve is can be a widely used indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problematic loans. Unfortunately, the FDIC did not provide information on Great Southern Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's profitability has an effect on its safety and soundness. Earnings may be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, potentially making the bank more resilient in tough times. Losses, on the other hand, diminish a bank's ability to do those things.

Great Southern Bank received above-average marks on Bankrate's test of earnings, achieving a score of 20 out of a possible 30.

Return on equity, calculated by dividing net income (profit, essentially) by the total amount of equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for Great Southern Bank was 10.91 percent, above the national average of 8.10 percent.

The bank reported net income of $56.2 million on total equity of $533.2 million for the twelve months ended December 31, 2017. The bank reported an annualized return on average assets, or ROA, of 1.26 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.