Preliminary Financial Results and Business Update for the Quarter and Nine Months Ended September 30, 2024
SPRINGFIELD, Mo., Oct. 16, 2024 (GLOBE NEWSWIRE) -- Great Southern Bancorp, Inc. (NASDAQ:GSBC), the holding company for Great Southern Bank, today reported that preliminary earnings for the three months ended September 30, 2024, were $1.41 per diluted common share ($16.5 million net income) compared to $1.33 per diluted common share ($15.9 million net income) for the three months ended September 30, 2023.
Preliminary earnings for the nine months ended September 30, 2024, were $3.99 per diluted common share ($46.9 million net income) compared to $4.52 per diluted common share ($54.7 million net income) for the nine months ended September 30, 2023.
For the quarter ended September 30, 2024, annualized return on average common equity was 11.10%, annualized return on average assets was 1.11%, and annualized net interest margin was 3.42%, compared to 11.47%, 1.11% and 3.43%, respectively, for the quarter ended September 30, 2023. For the nine months ended September 30, 2024, annualized return on average common equity was 10.83%, annualized return on average assets was 1.07%, and annualized net interest margin was 3.39%, compared to 13.15%, 1.28% and 3.66%, respectively, for the nine months ended September 30, 2023.
Third Quarter 2024 Key Results:
- Significant or Non-Recurring Items:During the three months ended September 30, 2024, the Company reduced its non-performing assets by $12.7 million, primarily through the resolution by sale of three unrelated non-performing assets. The Company recorded a gain on the sale of these foreclosed assets of $459,000 in the quarter ended September 30, 2024.
- Capital: The Company's capital position remained strong as of September 30, 2024, significantly exceeding the thresholds established by regulators. On a preliminary basis, as of September 30, 2024, the Company's Tier 1 Leverage Ratio was 11.0%, Common Equity Tier 1 Capital Ratio was 12.3%, Tier 1 Capital Ratio was 12.8%, and Total Capital Ratio was 15.5%. Total stockholders' equity increased $40.3 million in the nine months ended September 30, 2024, and the Company's tangible common equity to tangible assets ratio was 10.0% at September 30, 2024. Retained earnings increased $23.6 million during this same nine-month period. See "Capital” section for additional information regarding the changes to total stockholders' equity.
- Liquidity: The Company had secured borrowing line availability at the FHLBank and Federal Reserve Bank of $1.12 billion and $305.0 million, respectively, at September 30, 2024. In addition, at September 30, 2024, the Company had unpledged securities with a market value totaling $370.0 million, which could be pledged as collateral for additional borrowing capacity at either the FHLBank or Federal Reserve Bank. Based partially on the foregoing, the Company believes it has ample sources of liquidity as of September 30, 2024.
- Net Interest Income: Net interest income for the third quarter of 2024 increased $1.2 million (or approximately 2.6%) to $48.0 million compared to $46.7 million for the third quarter of 2023. Net interest margin was 3.42% for the quarter ended September 30, 2024, compared to 3.43% for the quarter ended September 30, 2023. Net interest income and net interest margin in the second quarter of 2024 were $46.8 million and 3.43%, respectively.
- Total Loans: Total outstanding loans, excluding mortgage loans held for sale, increased $121.7 million, or 2.7%, from $4.59 billion at December 31, 2023, to $4.71 billion at September 30, 2024. This increase was primarily in other residential (multi-family) loans with decreases in commercial construction loans, commercial business loans and one- to four-family residential loans. As construction projects are completed, the loans either pay off or move to their respective loan categories, primarily multi-family or commercial real estate.
- Asset Quality: Non-performing assets and potential problem loans totaled $13.7 million at September 30, 2024, a decrease of $5.4 million from $19.1 million at December 31, 2023. At September 30, 2024, non-performing assets were $7.7 million (0.13% of total assets), a decrease of $4.1 million from $11.8 million (0.20% of total assets) at December 31, 2023. Non-performing assets decreased $12.7 million compared to June 30, 2024. The decrease in non-performing assets in the three months ended September 30, 2024, was mainly due to the sale of two foreclosed assets and the payoff of a $2.4 million non-performing commercial real estate loan. The Company experienced net charge-offs of $1.5 million in each of the three and nine months ended September 30, 2024. See "Asset Quality” section for additional information regarding the changes to non-performing assets.
He continued, "Net interest income increased $1.2 million, or approximately 2.6%, to $48.0 million, compared to $46.7 million for the third quarter of 2023. Our net interest margin was 3.42%, down slightly from 3.43% for both the second quarter of 2024 and the third quarter of 2023. While market conditions have increased deposit costs, we've countered these headwinds with higher yields on loans and securities. Recent interest rate cuts by the Federal Reserve may help moderate some of the upward pressure on deposit costs, though we expect the full effects of these rate changes to become more apparent in the coming months.”
Turner remarked, "One of our important achievements this quarter was the significant reduction in non-performing assets, which decreased by $12.7 million, bringing the total to $7.7 million, or 0.13% of total assets, at September 30, 2024. This reduction underscores our proactive management of credit risk and reflects the successful resolution of two key non-performing assets. We did, however, record a $1.2 million provision for credit losses in the quarter, as a result of charge-offs and growth in the loan portfolio. We do not believe this charge is indicative of broader portfolio concerns, however, and we continue to view the commercial real estate loan market as a suitable option for potential growth."
He then noted, "Our total loan portfolio, excluding mortgage loans held for sale, has increased by $121.7 million, or 2.7%, since the end of 2023. This increase was driven primarily by growth in other residential (multi-family) loans, partially offset by declines in construction loans, commercial business loans, and one- to-four-family residential loans, as some construction projects were completed and transferred to other loan categories. At the end of the third quarter of 2024, our pipeline of loan commitments and unfunded lines remained solid at more than $1.04 billion, despite a slight decrease from the previous quarter."
Regarding expenses, Turner noted, "Non-interest expenses decreased by $1.8 million, to $33.7 million, compared to the third quarter of 2023. This reduction was primarily due to lower professional fees and gains from foreclosed asset sales."
In closing, Turner noted, "We view our capital position as very important and a strength of our Company. Stockholders' equity increased by $40.3 million year to date, to $612.1 million, representing a tangible common equity ratio of 10.0%. We continue to prioritize returning capital to our stockholders through dividends and strategic share repurchases. These actions reflect our ongoing commitment to delivering long-term value to stockholders. Our performance in the third quarter underscores our ability to navigate the challenges of the current interest rate environment while maintaining strong liquidity and capital positions. We remain focused on prudent loan portfolio management, controlling deposit costs, and leveraging our strengths to deliver sustainable growth."
Selected Financial Data:
| (In thousands, except per share data) | Three Months Ended September 30, | Nine Months Ended
September 30, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net interest income | $ | 47,975 | $ | 46,738 | $ | 139,609 | $ | 148,068 | |||||||
| Provision (credit) for credit losses on loans and unfunded commitments | 1,137 | (1,195 | ) | 1,160 | (2,140 | ) | |||||||||
| Non-interest income | 6,992 | 7,852 | 23,631 | 23,510 | |||||||||||
| Non-interest expense | 33,717 | 35,557 | 104,548 | 104,738 | |||||||||||
| Provision for income taxes | 3,623 | 4,349 | 10,647 | 14,325 | |||||||||||
| Net income | $ | 16,490 | $ | 15,879 | $ | 46,885 | $ | 54,655 | |||||||
| Earnings per diluted common share | $ | 1.41 | $ | 1.33 | $ | 3.99 | $ | 4.52 | |||||||
NET INTEREST INCOME
Net interest income for the third quarter of 2024 increased $1.2 million to $48.0 million, compared to $46.7 million for the third quarter of 2023. Net interest margin was 3.42% in the third quarter of 2024, compared to 3.43% in the same period of 2023 and the second quarter of 2024, a decrease of one basis point. In comparing the 2024 and 2023 third quarter periods, the average yield on loans increased 52 basis points, the average yield on investment securities increased 26 basis points and the average yield on other interest earning assets increased five basis points. The average rate on interest-bearing demand and savings deposits, time deposits and brokered deposits increased 34 basis points, 65 basis points and seven basis points, respectively, in the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The average interest rate spread was 2.74% for the three months ended September 30, 2024, compared to 2.79% for the three months ended September 30, 2023 and 2.77% for the three months ended June 30, 2024. The ratio of average interest-earning assets to average interest-bearing liabilities was 126.8% in the three months ended September 30, 2024, compared to 131.0% in the three months ended September 30, 2023 and 126.7% in the three months ended June 30, 2024.
Net interest income for the nine months ended September 30, 2024 decreased $8.5 million to $139.6 million, compared to $148.1 million for the nine months ended September 30, 2023. Net interest margin was 3.39% in the nine months ended September 30, 2024, compared to 3.66% in the same period of 2023, a decrease of 27 basis points. The margin contraction primarily resulted from increasing interest rates on all deposit types due to higher market interest rates and increased competition for deposits. In comparing the 2024 and 2023 nine-month periods, the average yield on loans increased 47 basis points, the average yield on investment securities increased 21 basis points and the average yield on other interest earning assets increased 35 basis points. The average rate on interest-bearing demand and savings deposits, time deposits and brokered deposits increased 58 basis points, 125 basis points and 31 basis points, respectively, in the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The average interest rate spread was 2.72% for the nine months ended September 30, 2024, compared to 3.09% for the nine months ended September 30, 2023.
In October 2018, the Company entered into an interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap was $400 million with a contractual termination date in October 2025. As previously disclosed by the Company, on March 2, 2020, the Company and its swap counterparty mutually agreed to terminate this swap, effective immediately. The Company was paid $45.9 million, including accrued but unpaid interest, from its swap counterparty as a result of this termination. This $45.9 million, less the accrued to date interest portion and net of deferred income taxes, is reflected in the Company's stockholders' equity as part of Accumulated Other Comprehensive Income (AOCI) and is being accreted to interest income on loans monthly through the original contractual termination date of October 6, 2025. The Company recorded $2.0 million of interest income related to the swap in both the three months ended September 30, 2024 and the three months ended September 30, 2023. The Company recorded $6.1 million of interest income related to the swap in both the nine months ended September 30, 2024 and the nine months ended September 30, 2023. The Company currently expects to have a sufficient amount of eligible variable rate loans to continue to accrete this interest income ratably in future periods. If this expectation changes and the amount of eligible variable rate loans decreases significantly, the Company may be required to recognize this interest income more rapidly.
In March 2022, the Company entered into another interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap was $300 million, with a contractual termination date of March 1, 2024. Under the terms of the swap, the Company received a fixed rate of interest of 1.6725% and paid a floating rate of interest equal to one-month USD-LIBOR (or the equivalent replacement USD-SOFR rate once the USD-LIBOR rate ceased to be available). To the extent that the fixed rate exceeded one-month USD-LIBOR/SOFR, the Company received net interest settlements, which were recorded as loan interest income. If one-month USD-LIBOR/SOFR exceeded the fixed rate of interest, the Company paid net settlements to the counterparty and recorded those net payments as a reduction of interest income on loans. As this interest rate swap has reached its contractual termination date of March 1, 2024, there have been no further interest income impacts related to this swap after that date. The Company recorded a reduction of loan interest income related to this swap transaction of $1.9 million in the nine months ended September 30, 2024. The Company recorded a reduction of loan interest income related to this swap transaction of $2.8 million and $7.5 million, respectively, in the three and nine months ended September 30, 2023.
In July 2022, the Company entered into two additional interest rate swap transactions as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of each swap is $200 million with an effective date of May 1, 2023 and a termination date of May 1, 2028. Under the terms of one swap, the Company receives a fixed rate of interest of 2.628% and pays a floating rate of interest equal to one-month USD-SOFR OIS. Under the terms of the other swap, the Company receives a fixed rate of interest of 5.725% and pays a floating rate of interest equal to one-month USD-Prime. In each case, the floating rate resets monthly and net settlements of interest due to/from the counterparty also occur monthly. To the extent the fixed rate of interest exceeds the floating rate of interest, the Company receives net interest settlements, which are recorded as loan interest income. If the floating rate of interest exceeds the fixed rate of interest, the Company pays net settlements to the counterparty and records those net payments as a reduction of interest income on loans. The Company recorded a reduction of loan interest income related to these swap transactions of $2.7 million in both the three months ended September 30, 2024 and the three months ended September 30, 2023. The Company recorded a reduction of loan interest income related to these swap transactions of $8.3 million in the nine months ended September 30, 2024, compared to $4.4 million reduction of interest income in the 2023 nine-month period. At September 30, 2024, the USD-Prime rate was 8.00% and the one-month USD-SOFR OIS rate was 5.16334%.
The Company's net interest income in the third quarter of 2024 increased 2-3% compared to net interest income in both the second quarter of 2024 and the third quarter of 2023. Net interest margin was consistent in each of the three periods. The cost of deposits has been negatively impacted over several quarters by the high level of competition for deposits across the industry and the lingering effects of liquidity events at several banks in March and April 2023. The Company also had a substantial amount of time deposits maturing at relatively low rates after the second quarter of 2023, and these time deposits either renewed at higher rates or left the Company, in the latter case requiring their replacement with other funding sources at then-current higher market rates. Market rates for time deposits have recently declined as the FOMC has cut the federal funds rate by 50 basis points and signaled further rate cuts may occur. As of September 30, 2024, time deposit maturities over the next 12 months were as follows: within three months -- $537 million, with a weighted-average rate of 4.53%; within three to six months -- $507 million, with a weighted-average rate of 4.07%; and within six to twelve months -- $145 million, with a weighted-average rate of 3.20%. Based on time deposit market rates in September 2024, replacement rates for these maturing time deposits are likely to be approximately 3.50-4.20%.
For additional information on net interest income components, see the "Average Balances, Interest Rates and Yields” tables in this release.
NON-INTEREST INCOME
For the quarter ended September 30, 2024, non-interest income decreased $860,000 to $7.0 million when compared to the quarter ended September 30, 2023, primarily as a result of the following items:
- Overdraft and insufficient funds fees: Overdraft and insufficient funds fees decreased $710,000 compared to the prior-year quarter. This decrease was primarily due to the continuation of a multi-year trend whereby our customers are choosing to forego authorizing payments of certain items which exceed their account balances, resulting in fewer overdrafts in checking accounts and related fees.
- Point-of-sale and ATM fees: Point-of-sale and ATM fees decreased $257,000 compared to the prior-year quarter primarily due to a portion of these transactions now being routed through channels with lower fees to us, which we expect will continue in future periods.
- Net gains on loan sales: Net gains on loan sales increased $292,000 compared to the prior-year quarter. The increase was partially due to an increase in balance of fixed-rate single-family mortgage loans sold during the third quarter of 2024 compared to the third quarter of 2023. Fixed-rate single-family mortgage loans originated are generally subsequently sold in the secondary market. The Company realized higher premiums on the sale of loans in the 2024 third quarter compared to the 2023 third quarter, as market interest rates were more stable in the quarter ended September 30, 2024 compared to the quarter ended September 30, 2023.
- Overdraft and insufficient funds fees: Overdraft and insufficient funds fees decreased $2.1 million compared to the prior-year period, for the same reason noted in the quarterly comparison above.
- Point-of-sale and ATM fees: Point-of-sale and ATM fees decreased $966,000 compared to the prior-year period, for the same reason noted in the quarterly comparison above.
- Net gains on loan sales: Net gains on loan sales increased $998,000 compared to the prior-year period, for the same reason noted in the quarterly comparison above.
- Other income: Other income increased $1.9 million compared to the prior-year period. In the second quarter of 2024, the Company recorded $2.7 million of other income, net of expenses and write-offs, related to the termination of the Master Agreement between the Company and a third-party software vendor for the conversion of the Company's core banking platform. This termination was previously disclosed in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024. This amount represented the elimination of certain deferred credits and other liabilities, along with the write-off of certain capitalized hardware, software and other assets, that previously had been recorded as part of the preparation to convert to the new core-banking platform.
For the quarter ended September 30, 2024, non-interest expense decreased $1.8 million to $33.7 million when compared to the quarter ended September 30, 2023, primarily as a result of the following items:
- Legal, Audit and Other Professional Fees: Legal, audit and other professional fees decreased $1.0 million from the prior-year quarter, to $809,000. In the quarter ended September 30, 2024, the Company expensed a total of $39,000, compared to $903,000 expensed in the quarter ended September 30, 2023, related to training and implementation costs for the intended core systems conversion and professional fees to consultants engaged to support the Company's proposed transition of core and ancillary software and information technology systems.
- Expense on Other Real Estate Owned: Expense on other real estate owned decreased $598,000 from the prior-year quarter, to a gain of $536,000 in the quarter ended September 30, 2024. In the third quarter of 2024, the Company recorded a gain on foreclosed asset sales of $459,000 compared to $22,000 in the third quarter of 2023.
- Net occupancy expenses: Net occupancy expenses increased $409,000 from the prior-year quarter. Various components of computer license and support expenses collectively increased by $369,000 in the third quarter of 2024 compared to the third quarter of 2023.
- Legal, Audit and Other Professional Fees: Legal, audit and other professional fees decreased $1.1 million from the prior-year period, to $4.4 million. In the 2024 period, the Company expensed a total of $1.9 million, compared to $2.7 million expensed in the 2023 period, related to training and implementation costs for the intended core systems conversion and professional fees to consultants engaged to support the Company's proposed transition of core and ancillary software and information technology systems.
- Expense on Other Real Estate Owned: Expense on other real estate owned decreased $453,000 from the prior-year period, to a gain of $190,000. In the 2024 period, the Company recorded a gain on foreclosed loan sales of $491,000 compared to $41,000 in the 2023 period.
- Net occupancy expenses: Net occupancy expenses increased $960,000 from the prior-year period, for the same reason noted in the quarterly comparison above.
- Salaries and employee benefits: Salaries and employee benefits increased $536,000, or 0.9%, from the prior-year period. Much of this increase related to normal annual merit increases in various lending and operations areas.
INCOME TAXES
For the three months ended September 30, 2024 and 2023, the Company's effective tax rate was 18.0% and 21.5%, respectively. For the nine months ended September 30, 2024 and 2023, the Company's effective tax rate was 18.5% and 20.8%, respectively. These effective rates were at or below the statutory federal tax rate of 21%, due primarily to the utilization of certain investment tax credits and the Company's tax-exempt investments and tax-exempt loans, which reduced the Company's effective tax rate. The Company's effective tax rate may fluctuate in future periods as it is impacted by the level and timing of the Company's utilization of tax credits, the level of tax-exempt investments and loans, the amount of taxable income in various state jurisdictions and the overall level of pre-tax income. State tax expense estimates continually evolve as taxable income and apportionment between states are analyzed. The Company's effective income tax rate is currently generally expected to remain below the statutory federal tax rate due primarily to the factors noted above. The Company currently expects its effective tax rate (combined federal and state) will be approximately 18.0% to 20.0% in future periods, primarily due to additional investment tax credits being utilized beginning in 2024.
CAPITAL
As of September 30, 2024, total stockholders' equity was $612.1 million (10.1% of total assets), equivalent to a book value of $52.40 per common share. Total stockholders' equity at December 31, 2023, was $571.8 million (9.8% of total assets), equivalent to a book value of $48.44 per common share. At September 30, 2024, the Company's tangible common equity to tangible assets ratio was 10.0%, compared to 9.7% at December 31, 2023. See "Non-GAAP Financial Measures.”
Included in stockholders' equity at September 30, 2024 and December 31, 2023, were unrealized losses (net of taxes) on the Company's available-for-sale investment securities totaling $29.1 million and $40.5 million, respectively. This change in net unrealized losses during the nine months ended September 30, 2024, primarily resulted from decreasing intermediate-term market interest rates which generally increased the fair value of investment securities.
In addition, included in stockholders' equity at September 30, 2024, were realized gains (net of taxes) on the Company's terminated cash flow hedge (interest rate swap), totaling $6.4 million. This amount, plus associated deferred taxes, is expected to be accreted to interest income over the remaining term of the original interest rate swap contract, which was to end in October 2025. At September 30, 2024, the remaining pre-tax amount to be recorded in interest income was $8.3 million. The net effect on total stockholders' equity over time will be no impact, as the reduction of this realized gain will be offset by an increase in retained earnings (as the interest income flows through pre-tax income).
Also included in stockholders' equity at September 30, 2024, was an unrealized loss (net of taxes) on the Company's two outstanding cash flow hedges (interest rate swaps) totaling $6.4 million. Increases in market interest rates since the inception of these hedges have caused their fair values to decrease. The unrealized loss position on these swaps improved substantially in the third quarter of 2024 due to a decline in market interest rates in the quarter.
As noted above, total stockholders' equity increased $40.3 million, from $571.8 million at December 31, 2023 to $612.1 million at September 30, 2024. Stockholders' equity increased due to net income of $46.9 million in the nine-month period ended September 30, 2024 and a $6.9 million increase in stockholders' equity during that period due to stock option exercises. Accumulated other comprehensive loss decreased $13.1 million during the nine months ended September 30, 2024, primarily due to increases in the fair value of cash flow hedges and available-for-sale investment securities resulting from decreases in market interest rates. Partially offsetting these increases were repurchases of the Company's common stock during the nine months ended September 30, 2024 totaling $12.5 million and dividends declared on common stock during that period of $14.0 million.
The Company had unrealized losses on its portfolio of held-to-maturity investment securities, which totaled $19.2 million at September 30, 2024, that were not included in its total capital balance. If these held-to-maturity unrealized losses were included in capital (net of taxes), they would have decreased total stockholder's equity by $14.6 million at September 30, 2024. This amount was equal to 2.4% of total stockholders' equity of $612.1 million at September 30, 2024.
On a preliminary basis, as of September 30, 2024, the Company's Tier 1 Leverage Ratio was 11.0%, Common Equity Tier 1 Capital Ratio was 12.3%, Tier 1 Capital Ratio was 12.8%, and Total Capital Ratio was 15.5%.
On September 30, 2024, and on a preliminary basis, the Bank's Tier 1 Leverage Ratio was 11.2%, Common Equity Tier 1 Capital Ratio was 12.9%, Tier 1 Capital Ratio was 12.9%, and Total Capital Ratio was 14.2%.
In December 2022, the Company's Board of Directors authorized the purchase of an additional one million shares of the Company's common stock. As of September 30, 2024, a total of approximately 488,000 shares were available in our stock repurchase authorization.
During the three months ended September 30, 2024, the Company repurchased 2,971 shares of its common stock at an average price of $53.04, and the Company's Board of Directors declared a regular quarterly cash dividend of $0.40 per common share, which, combined, reduced stockholders' equity by $4.8 million. During the nine months ended September 30, 2024, the Company repurchased 239,933 shares of its common stock at an average price of $51.69, and the Company's Board of Directors declared regular quarterly cash dividends totaling $1.20 per common share, which, combined, reduced stockholders' equity by $26.5 million.
LIQUIDITY AND DEPOSITS
Liquidity is a measure of the Company's ability to generate sufficient cash to meet present and future financial obligations in a timely manner. Liquid assets include cash, interest-bearing deposits with financial institutions and certain investment securities and loans. As a result of the Company's ability to generate liquidity primarily through liability funding, management believes that the Company maintains overall liquidity sufficient to satisfy its depositors' requirements and meet its borrowers' credit needs.
The Company's primary sources of funds are customer deposits, FHLBank advances, other borrowings, loan repayments, unpledged securities, proceeds from sales of loans and available-for-sale securities and funds provided from operations. The Company utilizes some or all of these sources of funds depending on the comparative costs and availability at the time. The Company has from time to time chosen not to pay rates on deposits as high as the rates paid by certain of its competitors and, when believed to be appropriate, supplements deposits with less expensive alternative sources of funds.
At September 30, 2024, the Company had the following available secured lines and on-balance sheet liquidity:
| September 30, 2024 | ||||||
| Federal Home Loan Bank line | $ | 1,116.7 million | ||||
| Federal Reserve Bank line | $ | 305.0 million | ||||
| Cash and cash equivalents | $ | 208.4 million | ||||
| Unpledged securities - Available-for-sale | $ | 344.3 million | ||||
| Unpledged securities - Held-to-maturity | $ | 25.5 million | ||||
During the nine months ended September 30, 2024, the Company's total deposits decreased $24.2 million. Interest-bearing checking balances increased $19.7 million (about 0.9%) and non-interest-bearing checking balances decreased $38.8 million (about 4.3%). Time deposits generated through the Company's banking center and corporate services networks decreased $141.6 million (about 15.3%). Brokered deposits increased $148.9 million (about 22.5%) through a variety of sources.
At September 30, 2024, the Company had the following deposit balances:
| September 30, 2024 | ||||||
| Interest-bearing checking | $ | 2,236.1 million | ||||
| Non-interest-bearing checking | 856.7 million | |||||
| Time deposits | 794.2 million | |||||
| Brokered deposits | 810.4 million | |||||
LOANS
Total net loans, excluding mortgage loans held for sale, increased $121.7 million, or 2.7%, from $4.59 billion at December 31, 2023 to $4.71 billion at September 30, 2024. This increase was primarily in other residential (multi-family) loans ($628 million increase), partially offset by decreases in construction loans ($383 million decrease), commercial business loans ($91 million decrease) and one- to four-family residential loans ($52 million decrease). The pipeline of loan commitments increased in the third quarter of 2024. The unfunded portion of construction loans remained significant, but continued to decline, in the third quarter of 2024. As construction projects were completed, the related loans were either moved from the construction category to the appropriate permanent loan categories or paid off.
For further information about the Company's loan portfolio, please see the quarterly loan portfolio presentation available on the Company's Investor Relations website under "Presentations.”
Loan commitments and the unfunded portion of loans at the dates indicated were as follows (in thousands):
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