그레이트 사우던 반코프(GSBC) 2026년 3분기 실적발표회: 마진 방어력 및 비용 절감

핵심 요약

• 그레이트 서던 반코프는 2026년 3분기 순이익 1,400만 달러(희석 보통주당 1.27달러)를 기록했습니다. 비현금 헤지 회계 조정을 제외한 비GAAP 순이익은 1,650만 달러(희석 주당 1.50달러)였습니다.
• 순이자이익은 5,030만 달러로, 전년 동기의 5,080만 달러 및 2026년 2분기의 4,950만 달러와 비교됩니다. 순이자마진(NIM)은 3.75%로, 전년 동기의 3.72% 및 전분기의 3.76%와 비교됩니다.
• 순대출금은 상업용 부동산 및 다가구 주택 대출 상환으로 인해 전분기 대비 5,930만 달러 감소하여 42억 5,000만 달러를 기록했습니다. 그러나 미인출 대출 약정액은 이미 체결된 건설 대출 관련 6억 4,080만 달러를 포함해 12억 달러로 증가했습니다.
• 총예금은 이번 분기 동안 2억 3,210만 달러 감소했으며, 이는 주로 GSBC가 2억 1,180만 달러 규모의 고금리 중개예금 만기 도래 시 재유치하지 않고 의도적으로 만기 상환했기 때문입니다.
• 자산 건전성은 견조한 수준을 유지했습니다. 부실자산(NPA)은 총자산의 0.18%였으며, 부실채권(NPL)은 총대출의 0.03%, 연환산 순상각률은 평균 대출의 0.04%였습니다.
• 경영진은 지점 통합 및 인력 감축을 통해 연간 440만~480만 달러의 비이자비용 절감 효과가 발생하여 2026년 4분기부터 연간 230만~270만 달러의 세전이익 개선이 뒷받침될 것으로 예상합니다.

주요 재무 데이터

사업 및 영업 실적

GSBC는 이번 분기 동안 약 4억 달러 규모의 고정금리 정부기관 주택담보증권(MBS) 및 다자산 담보부증권(CMO)을 매수했습니다. 해당 증권의 예상 가중평균 수익률은 4.80%~5.00%이며, 주로 변동금리 연방홈론은행(FHLB) 차입금으로 자금을 조달했습니다.

경영진은 이번 거래가 순이자이익을 늘리고 시장 금리가 크게 하락할 경우 방어 수단을 제공할 것이라고 밝혔습니다. 다만 스프레드가 은행의 핵심 수익 자산보다 좁기 때문에 보고되는 순이자마진 비율을 소폭 낮출 것으로 예상됩니다. 회사는 현재 추가 증권 매수 계획이 없으나 경영진은 상황에 따라 계획이 변경될 수 있음을 덧붙였습니다.

대출 잔액은 상환 및 차환(리파이낸싱)의 영향을 계속 받았습니다. 2026년 첫 9개월 동안 상업용 부동산 대출은 9,580만 달러, 다가구 주택 대출은 1억 560만 달러 감소했으나, 건설 대출 잔액이 8,300만 달러 증가하여 일부 상쇄되었습니다.

경영진은 일부 차주가 더 높은 레버리지, 보증 축소, 낮은 금리 등 GSBC가 수용하기 어려운 조건으로 완공된 프로젝트의 리파이낸싱을 진행했다고 밝혔습니다. 다른 상환 건은 스폰서가 완공된 프로젝트를 매각하면서 발생했습니다.

비중개예금은 비교적 안정적이었습니다. 무이자 당좌예금 잔액은 연초 대비 2,930만 달러 증가했으며, 은행은 만기 도래 중개예금을 조달 비용이 더 저렴한 FHLB 자금으로 대체했습니다. 분기 말 기준 내부 잔액을 제외한 미보호 예금은 6억 8,620만 달러로 총예금의 16.9%를 차지했습니다.

회사는 10월 1일까지 9개 영업점의 통합을 완료하고 66개 직무를 감축했습니다. 기타 소유 부동산(OREO)은 2,040만 달러를 기록했으며, 여기에는 신용 관련 압류 자산이 아닌 매각 목적으로 보유 중인 폐쇄 영업점 부동산 1,110만 달러가 포함되었습니다.

경영진 가이던스

경영진은 순이자마진 범위가 약 3.65%~3.70% 수준인 것이 "아마도 합리적일 것"이라고 밝혔습니다. 증권 매수에 따른 예상 희석 효과는 헤지 관련 상각 수익으로 일부 상쇄될 것으로 예상됩니다.

2건의 금리스왑 재지정에 따라 GSBC는 2028년 4월까지 월 약 17만 달러의 추가 이자수익을 인식할 것으로 예상합니다. 경영진은 스왑의 잔여 기간 동안 이 수익을 통해 2026년 3분기 헤지 회계 비용을 전액 회수할 수 있을 것으로 기대하고 있습니다.

영업점 통합 및 인력 감축을 통해 연간 440만~480만 달러의 비용 절감이 기대됩니다. 잠재적 예금 이탈과 대체 자금 조달 비용을 고려한 후, 경영진은 2026년 4분기부터 연간 세전이익이 230만~270만 달러 개선될 것으로 예상하고 있습니다.

GSBC는 향후 연방 및 주 통합 실효세율이 대체로 18.0%~19.5% 범위가 될 것으로 예상합니다.

리스크 및 주시 사항

• 경영진은 대출 상환을 예측하기가 여전히 어려우며 분기별 잔액의 변동성을 지속적으로 유발할 수 있다고 밝혔습니다.
• 고금리가 지속되면 리파이낸싱 활동이 둔화되어 대출이 GSBC의 재무상태표에 더 오랫동안 남아있을 수 있으나, 경영진은 가시성이 여전히 제한적이라고 강조했습니다.
• 지점 통합에 따른 비용 절감 효과는 고객 예금 이탈 및 높은 비용의 대체 자금 조달로 인해 일부 상쇄될 수 있습니다.
• 은행이 코어 시스템 및 데이터 보안 플랫폼 업그레이드를 완료하는 과정에서 추가적인 기술 비용이 발생할 수 있습니다.
• 시장 금리 상승은 2026년 첫 9개월 동안 기타포괄손익누계액에 기록된 미실현 손실이 3,320만 달러 증가하는 데 영향을 주었습니다.
• 증권 레버리지 전략은 순이자이익을 늘리지만, 보고되는 순이자마진을 소폭 희석시킬 것으로 예상됩니다.

애널리스트 Q&A 하이라이트

경영진은 4억 달러 규모의 증권 포트폴리오가 7월, 8월, 9월에 걸쳐 구축되었으며 가장 큰 비중은 8월에 매수되었다고 밝혔습니다. 매수 당시 추정 스프레드는 약 100bp 이하였으나 FHLB 차입 비용이 증가함에 따라 축소되었습니다.

대출 유치와 관련해 경영진은 GSBC가 일반적으로 현저히 높은 레버리지, 차주 보증 축소, 대폭 낮아진 금리가 포함된 리파이낸싱 구조는 거절한다고 밝혔습니다. 조기 상환은 특정 지역 시장에 집중되지 않았습니다.

경영진은 폐쇄된 9개 영업점 및 감축된 직무와 관련된 대부분의 비용이 소멸함에 따라 4분기 비용이 감소할 것으로 예상하고 있습니다. 일부 기술 관련 지출이 이를 부분적으로 상쇄할 수 있습니다.

자사주 매입과 관련해 경영진은 현재 주가 수준에서 자사주 매입을 여전히 긍정적으로 보고 있다고 밝혔습니다. GSBC는 2026년 첫 9개월 동안 주당 평균 68.67달러에 542,000주를 매입했으며, 분기 말 기준 기존 승인 한도 내에서 약 145,000주가 남아있습니다.

실적 발표 전화회의 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Thank you. Good day and thank you for standing by. Welcome to the Great Southern Bancorp Third Quarter 2026 Earnings Call.

[Operator Instructions]

Today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Christina Maldonado. Please go ahead.

Unknown Speaker

Thank you. Good afternoon, and thank you for joining Great Southern Bancorp's third quarter 2026 earnings call. Today, we will be discussing the company's results for the quarter ended September 30, 2026. Before we begin, I would like to remind everyone that during this call, forward-looking statements may be made regarding the company's future events and financial performance. These statements are subject to various factors that could cause actual results to differ materially from those anticipated or projected. For a list of these factors, please refer to the forward-looking statements disclosure in the earnings release and other public filings. Joining me today are President and CEO Joe Turner and Chief Financial Officer Rex Copeland. I'll turn the call over to Joe.

Joseph Turner

Okay, thanks, Christina, and good afternoon to everyone on the call. We appreciate you being with us today. Our third quarter results demonstrate the durability of our core banking franchise and the consistency of our operating model. During the quarter, we remained focused on our core disciplines, prioritizing prudent balance sheet management, maintaining strict credit standards, and controlling non-interest expense. In the third quarter of 2026, we reported net income of $14 million, or $1.27 per common share. The results this quarter were impacted by a non-cash hedge accounting adjustment, which Rex will discuss further. Excluding this hedge accounting adjustment, our operating net income was $16.5 million, or $1.50 per diluted common share.

Net interest income in the third quarter remained solid at $50.3 million, down slightly from the $50.8 million in the year-ago quarter. This comparison reflects the absence in 2026 of the approximately $2 million of quarterly interest income from a previously terminated swap that concluded in October 2025. Despite this headwind, disciplined asset management and active pricing on deposits and earning assets allowed for the expansion of our margin to 3.75% from 3.72% in the third quarter of 2025. During the quarter, we also took advantage of higher market yields, adding approximately $400 million of fixed-rate agency mortgage-backed securities and collateralized mortgage obligations. These purchases were funded primarily through variable-rate FHLB borrowings, helping mitigate downside risk from potential future interest rate reductions. While the narrower spread on this balance sheet trade will modestly reduce our overall net interest margin percentage going forward, it is accretive to our net interest income. Net interest income generation remains an ongoing priority, but credit and pricing discipline will continue to govern our approach to growing long-term stockholder value.

Turning to our loan portfolio, period end balances continued to be heavily influenced by borrower repayments and refinancing activity. Elevated payoff activity in commercial real estate and multifamily loans led to a $59.3 million decline in net loans compared to June 30, 2026. Compared to December 31, 2025, net loan balances decreased $108.4 million to $4.25 billion. Despite the loss, our broader lending pipeline remains robust with total commitments expanding to $1.2 billion at September 30, including $641 million of unfunded commitments related to closed construction loans. On the funding side, total deposits decreased $232.1 million during the quarter, primarily reflecting the intentional runoff of $211.8 million in broker deposits. Our core customer relationships remain strong, with non-interest bearing checking expanding by $29.3 million year to date. As loan balances have moderated, we intentionally allowed higher cost broker deposits to run off without replacement, utilizing lower cost FHLB borrowings instead, allowing for reduced interest expense.

From a credit quality standpoint, our metrics remain excellent. Total non-performing assets at the end of the third quarter represented 0.18% of total assets, compared to 0.17% at June 30, and non-performing loans were 0.03% of total loans. Net charge-offs were $397,000 for the quarter, and we did not record a provision for credit losses on our outstanding portfolio. The provision you saw in our income statement related to our unfunded commitments. Other real estate owned increased $20.4 million, primarily reflecting the reclassification of $11.1 million in closed banking center properties for sale following our branch consolidations rather than credit related foreclosures. For our foreclosed properties, independent appraisals continue to support our carrying values, and we do not anticipate any aggregate loss upon their ultimate disposition. Similarly, we do not expect an aggregate loss on the disposition of our former banking centers facilities either at this time.

Expense discipline remains a priority for our bank with non-interest expense decreasing to $36.3 million compared to the $38.2 million in the second quarter of 2026. The second quarter expense amount was more than normal due to the charge for the banking center closures. As of October 1, we completed the consolidation of the nine banking centers and the elimination of 66 positions across various divisions in our company. As affected employees remained in their roles through the end of the third quarter, the associated cost savings will begin to be realized in the fourth quarter. Ultimately, we believe this will allow for better alignment with our customers banking preferences along with our continued pursuit of operational efficiencies as technology and delivery channels evolve. As we move through the remainder of 2026, we remain focused on protecting asset quality, executing thoughtful operational improvements, and consistently building long-term value for our stockholders. The lending and funding environments remain competitive, but we are navigating this landscape from a position of strength.

With that, I will turn the call over to Rex for a more detailed discussion of the financials.

Rex Copeland

All right, thank you, Joe, and good afternoon, everyone. I will provide a little more detail on our third quarter 2026 financial performance and how it compares to both prior year quarter and the linked second quarter. As we mentioned, for the quarter ended September 30, 2026, we reported preliminary net income of $14.0 million, or $1.27 per diluted common share, compared to $17.8 million, or $1.56 per diluted common share, in the third quarter of 2025, and $15.8 million, or $1.43 per diluted common share, in the linked second quarter of 2025. Excluding the non-cash hedge accounting adjustment, non-GAAP net income was $16.5 million, or $1.50 per diluted common share. During the third quarter of 2026, the company identified historical periods in which variable rate loan balances, meeting the original cash flow hedge designation criteria, were insufficient to support the full designated notional amount of its interest rate swaps. Accordingly, portions of the swaps were not eligible to receive hedge accounting during the third quarter of 2026 during those periods.

Consequently, historical fair value changes and settlements previously recorded and accumulated other comprehensive income were reclassified to earnings. These historical adjustments resulted in a one-time non-cash charge to the income statement of approximately $3.5 million pre-tax, comprised of a $4.1 million reduction in non-interest income and a $504,000 increase in interest income. Including a benefit to interest income described below, the net pre-tax impact of $3.3 million, approximately $2.5 million after tax, or $0.23 per diluted share, had zero impact on total stockholders' equity or cash balances in the third quarter of 2026. Subsequent to the $3.5 million earnings reclassification that we just talked about, the company adopted ASU-2025-09, allowing for the redesignation of its two existing interest rate swaps. This redesignation resulted in an offsetting increase in interest income of $279,000 in the third quarter of 2026. An approximately $170,000 per month increase in interest income will be realized through April 2028. Consequently, the $3.5 million charge to income in the third quarter of 2026 will be entirely recovered through interest income over the remaining life of the redesignated interest rate swaps. Net interest income for the quarter totaled $50.3 million compared to $50.8 million in the third quarter of 2025 and $49.5 million in the second quarter of 2026. Compared to the prior year quarter, net interest income declined by $504,000, driven primarily by the absence in 2026 of approximately $2 million of quarterly interest income from a previously terminated swap that concluded in October 2025.

Additionally, lower average loan balances and lower market interest rates, which impacted yields on variable rate loans, were mostly offset by lower interest expense on deposits, disciplined funding cost management, and additional interest income from investment securities purchased during the quarter. As Joe mentioned, we purchased approximately $400 million of fixed rate agency mortgage backed securities and collateralized mortgage obligations in the third quarter. These securities have an expected effective duration of approximately five to six years with final maturities primarily in 2032 and 2033 for about $150 million of these securities and in 2028 for about $100 million of these securities. These securities have an expected weighted average yield between 4.80% and 5%. While this leverage trade generates positive net interest income, the spread is narrower than our core earning assets and is expected to modestly reduce our overall reported net interest margin percentage in future quarters, while providing meaningful downside protection should market interest rates decline significantly. Compared to the linked second quarter of 2026, net interest income increased $776,000. A portion of this increase was aided by one additional calendar day in the third quarter and investment portfolio additions alongside the initial interest income accretion recognized from our redesignated interest rate swaps.

Net interest margin was 3.75% for the third quarter compared to 3.72% in the prior year quarter and 3.76% in the second quarter of 2026. Non-interest income for the quarter was $3.4 million compared to $7.1 million in the third quarter of 2025 and $7.4 million in the second quarter of 2026. The year-over-year decrease was driven by the $4.1 million hedge accounting adjustment discussed previously. Partially offsetting this was a $240,000 increase in late charges and fees on loans totaling $429,000, primarily due to $282,000 in prepayment penalties collected on two commercial loans that paid off during the quarter. Other income also included $116,000 in origination fees for a back-to-back interest rate swap on a new commercial real estate loan. Commission income totaled $486,000 in the 2026 third quarter, reflecting continued customer demand for fixed annuity products. Total non-interest expense was $36.3 million compared to $36.1 million in the third quarter of 2025 and down $1.9 million from $38.2 million in the second quarter of 2026.

That sequential decrease reflects the non-recurrence of the $2.1 million charge in branch consolidation and severance recorded in the second quarter of 2026. Salaries and employee benefits decreased $565,000 compared to the prior year quarter to $19.6 million, reflecting lower incentive accruals, staffing adjustments in some lending areas, and lower expected severance payouts. Net occupancy and equipment expense increased $428,000 compared to the prior year quarter to $9.3 million, primarily due to a $434,000 increase in computer licensing and core support expenses as our planned investments in core systems and data security continue to cycle online. As Joe noted earlier, our consolidation of nine banking centers and the elimination of other positions across the company were completed by October 1st. The Banking Center consolidations and workforce reductions are expected to result in approximately $4.4 million to $4.8 million in non-interest expense savings beginning in the fourth quarter of 2026. These savings are expected to be partially offset by some customer deposit attrition in the affected locations over time, which will likely be replaced by higher cost alternative funding sources. These actions combined are expected to result in approximately $2.3 million to $2.7 million in annual pre-tax income improvement beginning in the fourth quarter of this year.

Our efficiency ratio for the quarter was 67.57%, and normalized to 63.69% when excluding the hedge accounting adjustment. For income taxes, the company's effective tax rate for the three months ended September 30, 2026 was approximately 16.3% compared to 19.7% in the same period in 2025. Through the first nine months of 2026, the effective tax rate was 16.9% compared to 19.4% in the prior year period. The lower effective tax rate in the third quarter was driven by our usual tax credits and higher allowable tax deductions resulting from employee stock option exercises. Going forward, we continue to expect our combined federal and state effective tax rate to range generally from 18% to 19.5% in future periods. Moving on to the balance sheet, total assets ended the quarter at approximately $5.82 billion, up from $5.52 billion at June 30, primarily reflecting the $400 million investment portfolio increase. Gross loans receivable stood at $4.32 billion.

Total net loans, excluding mortgages loans held for sale, were $4.25 billion, down $59.3 million sequentially, and down $108.4 million from December 31, 2025. Over the first nine months of the year, net loans decreased by 2.5%, driven by repayments in commercial real estate, which was down $95.8 million net, and multifamily, which was down $105.6 million net, partially offset by an $83 million expansion in construction balances. As Joe highlighted, repayments on our loan portfolio are difficult to predict and may continue to drive volatility in our loan balances in future quarters. However, our origination activity remains healthy as our pipeline of unfunded loan commitments expanded to $1.20 billion, led by $640.8 million in unfunded construction commitments on loans already closed. On the funding side, total deposits ended the quarter at approximately $4.07 billion, down $232.1 million from June 30, 2026. Given the pricing and term advantage of FHLB borrowings, we intentionally allowed higher cost broker balances to mature without replacement. These brokered maturities constituted $211.8 million of the $232.1 million deposit reduction in the third quarter.

Excluding this planned runoff, non-brokered deposits remained relatively stable during the quarter. Our deposit mix consisted of $2.22 billion in interest bearing checking, $870.8 million in non-interest bearing checking, $618.6 million in time deposits, and $363.8 million in broker deposits at September 30. Uninsured deposits, excluding our internal deposit balances, are estimated at $686.2 million, or 16.9% of total deposits. At September 30, 2026, secured borrowing line availability at the Federal Home Loan Bank and Federal Reserve Bank was $1.10 billion and $370.9 million, respectively, alongside cash and cash equivalents of $161.7 million. From asset quality perspective, overall performance remained strong. Non-performing assets and potential problem loans combined totaled $11.9 million. Non-performing assets were $10.5 million, or 0.18% of total assets, compared to $9.4 million, or 0.17% of assets, at June 30, 2026, and $8.1 million, or 0.15% of total assets, at December 31, 2025.

Non-performing loans were $1.19 million, or 0.03% of total loans, while potential problem loans closed the quarter at $1.43 million. Net charge-offs were $397,000 in the third quarter of 2026, or an annualized rate of 0.04% of average loans. During both the three and nine months ended September 30, 2026, we did not record a provision expense on our outstanding loan portfolio, but recognized a provision for unfunded commitments of $674,000 in the third quarter of 2026 due to growth in the commitment pipeline. The bank's allowance for credit losses was stable at 1.47% of total loans. Overall, our core credit metrics continue to reflect our long-standing focus on discipline risk management and a portfolio that is performing well. Other real estate owned increased $14.4 million from December 31, 2025 to $20.4 million at September 30. As Joe highlighted, $11.1 million of this increase represented the nine closed retail banking centers held for sale now following our branch consolidations.

Total foreclosed properties stood at $9.3 million, consisting primarily of an office building at $7.0 million, where we capitalized $479,000 in safety and fire suppression upgrades in the quarter, and a multifamily property at $2.3 million, where we capitalized $490,000 in property improvements. Independent appraisals continue to support these carrying values on both assets. Our capital position remained a key strength. Total stockholders' equity at September 30, 2026 was $612.5 million, representing 10.5% of total assets and a book value of $56.97 per common share, compared to $636.1 million, or $55.85 per common share, at December 31, 2025. The decline in stockholders' equity was primarily a function of higher market interest rates, resulting in a $33.2 million increase in the unrealized losses captured in our AOCI portion of equity. Outside of the AOCI impact, capital in the nine-month period was supported by $47.3 million of net income and $13.8 million from stock issued for option exercises, partially offset by $14.0 million in dividends declared on common stock and $37.5 million in common stock buybacks. Throughout the first nine months of the year, we have repurchased 542,000 shares of common stock at an average price of $68.67.

Approximately 145,000 shares remained available under our current stock repurchase authorization at quarter end, and this month our board approved a new $1 million share repurchase authorization to succeed the existing program once completed. Our board of directors also declared our regular quarterly cash dividend of $0.40 per common share in September. Overall, our third quarter results reflect solid execution throughout our business. Our net interest margin remains resilient, our core deposit mix remains stable, and our asset quality trends remain solid. Our capital benchmarks sit at strong levels, and we are well positioned for continued operational success. That concludes my remarks, and now we are ready to take questions.

Operator

Thank you. At this time, we will conduct the question and answer session.

[Operator Instructions]

Our first question comes from the line of John Rawlings of Bring Capital. Your line is now open.

Joseph Turner

Hey, good afternoon, guys.

Unknown Speaker

Hey, John. Hey, Rex, the investment in the securities portfolio, so you bought, I think you said roughly $400 million, and you said average yield around 4.9%, give or take, in the rate. It'll vary slightly, but 4.8% to 5% is what it should. So 4.9% is sort of an average in there, yes. And so what was the net spread roughly? So what were you paying initially in the quarter? And what was the timing? When did you buy them in the quarter? Did you get a full quarter's impact? It does not look like it based on the average balances.

Rex Copeland

So we bought a little bit of it in July, more in August, and some more in September.

Unknown Speaker

I think the biggest chunk of it was probably in August, John, but we did some in July and September as well. And so I would say at the time we started buying, of course, the Fed had not raised rates. So just overnight borrowing costs at the home loan bank were probably a little less than 3.90%, 3.95%, something like that maybe. Yes. Okay. So your net spread on this with the higher rates, I mean, it is 100 basis points or less, give or take, correct? Right. Right. And now that, I mean, the borrowing cost at the home loan bank is, give or take, you know, 4.25% now. So, yes, that is sort of like the spread would be the difference between that and the yield. Yes, interest income but dilutive to the margin. Any plans to purchase any more securities? Not really at this time, I do not think so. You know, plans can change, but we think we got what we wanted to do there.

Okay. So, and then I just want to make sure I am looking at it right as far as the, I guess, puts and takes with the net interest income dollars and then the hedging treatment. So, it looks like all things equal. You had a one-time benefit of the $500,000 roughly and then a benefit, I guess, into 2028. This quarter was roughly $300,000, and then going forward, you will pick up another $100,000 a quarter. Am I thinking about that right?

Rex Copeland

It will be more than that. The first quarter, yes, I think you are right. We had an initial call it $500,000 added to interest income, and then we had another $279,000 of this accretion income that we took in. And then it should be about another roughly $170,000 a month of accretion income that would go back into interest income. To recapture that $3.5 million that was the one time hit to non-interest income in this quarter.

Unknown Speaker

Yes, so I will just try asking this, but any, I mean, as far as the margin goes, I mean, it seems like direct, it is probably down a little bit, especially with the securities, but do you think like 3.65% to 3.70% range is reasonable? Or?

Rex Copeland

Well, that is probably reasonable. I mean, so yes, we will see, we would see a decrease in the margin itself for the securities purchase, which would be fairly modest, but there would be some decrease there. And then partially offsetting that, or maybe offsetting a fair amount, is going to be this accretion income basically for the next six quarters is when that accretion income is going to come back in, John.

Unknown Speaker

Yes, but I am just trying to put it all together. It seems like the margin maybe in that range seems reasonable. Yes. I think so. Okay. Joe, maybe a question for you just, you know, portfolio continue to trend down. Any thoughts on what we see over the next quarter or two?

Joseph Turner

You know, I mean, same comment we always make, John. It is really difficult to predict, you know, based on, you know, a lot of it is based on just payoffs. I mean, it is possible that with rates being up a little bit, payoff activity could be down, which would be a bullish thing for loan growth. But, you know, it is just the reason we do not give guidance is we just do not feel like, I mean, we have some visibility, but it is probably a whole lot more limited than what you guys think. So, you know, I mean, yeah, I could see how higher interest rates could slow down, you know, refinancing activity, and, you know, the way that we are doing it, we could have loans on our books longer, which would be positive. But it is just, you know, kind of time will tell.

Unknown Speaker

Yes, yes. As far as the new buybacks, so you authorized another $1 million shares, all things equal, I assume you sort of continue to do what you have been doing, you know, maybe buying back 100,000 shares a quarter? Yes.

Joseph Turner

Yeah, I mean, we are kind of in and out from time to time. Obviously, you can see from our activity that we do think it is a positive thing for our shareholders at these levels, at these price levels. I do not see anything right now that would change our opinion about that.

Unknown Speaker

Yes. Okay. Okay. Thanks, guys.

Operator

Thank you. One moment for our next question. Our next question comes from the line of Damon DelMonte of KBW. Your line is now open.

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Damon Del Monte

Hey, good afternoon, guys. Hope you are doing well. Joe, just a question on the loans in the payoffs. I mean, obviously, payoffs and refinancings are happening all over the industry. But I was just wondering, is there anything different with your approach of lending which allows you or which results in you guys having more payoffs than origination activity? Like, are these more like transactional accounts where you do not have an established relationship with the borrower where you can maybe work with them and, you know, offer them a more, you know, a competitive rate that would keep them with you guys. I am just looking for any, any color on that.

Joseph Turner

No, I mean, like usually when we see a payoff, Damon, it is coming on terms that are, you know, from the borrower's perspective, just, you know, terms that we would not be interested in. I mean, usually, you know, I mean, we are involved in the construction part of the project. And so, you know, just as an example, maybe a $30 million apartment project, we are doing, you know, two-thirds of the cost, $20 million with a loan. When they go to refinance that, they are looking at borrowing substantially more than what we have loaned and either significantly limiting or maybe removing their guarantees and lessening the rate a lot. So it is just not a structure that we would be interested in.

Rex Copeland

And other things are just projects get completed and the sponsor sells the project.

Joseph Turner

Yeah, right.

Damon Del Monte

Yes, there is both, refinancing into a permanent mortgage and, you know, sales. Got you, okay. And are these payoffs and refinancing happening anywhere in particular in your footprint? Is it like a different, you know, is it down in Texas or more like in the northern Midwest or anything? No, not really. I mean, I think they happen all over.

Joseph Turner

No, not really. I mean, I think they happen all over.

Damon Del Monte

Okay. Okay. And then I guess my next question on expenses with the cost saves kind of coming in here in the fourth quarter, you know, can we assume that this quarter's level will go down because of those savings or is there some, you know, already preplanned growth in expenses that would kind of neutralize the impact.

Rex Copeland

I do not think there is really – I mean, I think there could be some increases, but they will not be of the magnitude – it should not be of the magnitude of what we are talking about dropping as far as the costs go. We will still have a little bit of the cost, I mean, there will be a little bit of the cost still probably in there in October, but most of the quarter will be free of those costs and charges. So I think we should see a little bit expenses as we outlined in the fourth quarter, generally speaking. Could be a little bit of offset to it, but not.

Joseph Turner

Yes, we have talked a bit on these calls, Damon, about we are in the process of upgrading our system technology platform primarily with Jack Henry, and as more of those products roll out, and I think we are substantially through that, but there may be, there could be another one or two of those roll out, and that could be some additional expense. I do not have off the top of my head what that would be, but that would be the only caveat I would give.

Damon Del Monte

Got it. Okay, great. That is all that I had. Thank you.

Joseph Turner

All right. Thanks, Damon.

Operator

Thank you. I am showing no further questions at this time. I will now turn it back to Joe for closing remarks.

Joseph Turner

All right. I appreciate everybody being with us, and we will look forward to talking to you again after the first year. Thank you.

Operator

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

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