Investment Thesis
Great Southern Bancorp exhibits severe capital efficiency problems with ROE of 2.8% and ROA of 0.3%, well below banking industry standards, compounded by a critical interest coverage ratio of 0.7x indicating inability to cover interest expenses from operations. Despite impressive 56.7% revenue growth, flat net income growth signals margin compression and operational leverage dysfunction that overshadows strong FCF generation.
Strengths
- Strong revenue growth of 56.7% YoY demonstrates top-line expansion
- Solid operating margin of 30.2% and net margin of 24.6% show pricing power
- Zero long-term debt (Debt/Equity 0.00x) provides financial flexibility and downside protection
- Positive free cash flow of $19.9M with 27.9% FCF margin indicates cash generation capability
- Strong cash position of $187.4M provides liquidity buffer
Risks
- Interest coverage ratio of 0.7x is critical red flag—unable to cover interest expenses from operating income, indicating cash burn risk
- ROE of 2.8% and ROA of 0.3% are dangerously low for a bank; industry norms are 10%+ ROE and 1%+ ROA, suggesting severe capital misallocation
- Net income completely flat (0.0% growth) despite 56.7% revenue surge indicates profit margin collapse and operational dysfunction
- Structural inefficiency in capital deployment—$5.7B in assets generating only $17.5M in net income reflects fundamental business model deterioration
- 11 insider Form 4 filings in 90 days may indicate volatility or distressed insider activity
Key Metrics to Watch
- Interest coverage ratio—must improve above 1.5x to indicate sustainable operations
- Return on Equity—monitor for improvement toward 8%+ minimum acceptable threshold
- Net income growth trajectory—verify next quarter shows reversal of stagnation trend
- Net interest margin and provision for loan losses—analyze whether core banking operations are deteriorating
- Asset quality metrics—assess non-performing loan ratios and charge-off trends
Financial Metrics
Revenue
71.2M
Net Income
17.5M
EPS (Diluted)
$1.58
Free Cash Flow
19.9M
Total Assets
5.7B
Cash
187.4M
Profitability Ratios
Gross Margin
N/A
Operating Margin
30.2%
Net Margin
24.6%
ROE
2.8%
ROA
0.3%
FCF Margin
27.9%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
0.00x
Debt/Assets
88.9%
Interest Coverage
0.66x
Long-term Debt
N/A
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-08T06:02:20.632759 |
Data as of: 2026-03-31 |
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