Great Southern Bancorp, Inc. (GSBC): 5 FORCES Analysis [Nov-2025 Updated]

You're looking at a regional bank, Great Southern Bancorp, navigating a tricky late-2025 landscape where every basis point on deposits matters. Honestly, for a firm managing about $\mathbf{\$5.85 \text{ billion}}$ in assets, the pressure is real, especially when the net interest margin dips to $\mathbf{3.68\%}$ as we saw in Q2 2025 due to fierce rivalry. To really see where the risk and opportunity lie-from the power of core tech suppliers to the threat posed by nimble FinTechs-we need to map out the competitive terrain. So, let's break down Great Southern Bancorp using Porter's Five Forces to see exactly how its market position holds up against suppliers, customers, rivals, substitutes, and new entrants.

Great Southern Bancorp, Inc. (GSBC) - Porter's Five Forces: Bargaining power of suppliers

When you look at Great Southern Bancorp, Inc.'s suppliers, you're primarily looking at the technology vendors that run the bank and the sources of its wholesale funding. Honestly, the power dynamic here is a bit mixed, leaning toward the vendors in some areas but more balanced in others.

Core banking system providers, like the major players in the industry, definitely hold significant leverage over Great Southern Bancorp, Inc. The industry context shows that the capital costs associated with switching core service providers are increasingly high, which locks many community banks into long-term relationships. This lack of easy exit definitely gives the incumbent supplier more negotiating power, even if satisfaction scores aren't always top-tier; for instance, one industry poll showed respondent depository institutions rated core provider effectiveness at only 2.78 on a 5-point scale.

We saw the complexity and vendor power firsthand when Great Southern Bancorp, Inc. terminated its Master Agreement for a core banking platform conversion in 2024. That decision resulted in the company recording $2.7 million of other income, net of expenses, in the second quarter of 2024. Furthermore, Great Southern Bancorp, Inc. expensed $1.9 million in 2024 related to training and implementation costs for that proposed conversion before deciding to stay with the current provider. That's real money spent navigating vendor lock-in.

Now, let's pivot to funding, which is another critical supplier relationship for Great Southern Bancorp, Inc. The wholesale funding sources-the Federal Home Loan Bank (FHLBank) and the Federal Reserve Bank-offer diverse, large-scale liquidity, which generally limits any single entity's individual power over Great Southern Bancorp, Inc. You can see the substantial capacity available to them:

The total available funding lines were reported at $1.47 billion as of September 30, 2025. This significant, multi-source capacity means Great Southern Bancorp, Inc. has options, which is key for managing funding costs.

Brokered deposits, however, represent a significant, rate-sensitive funding source where the suppliers-the brokers and the ultimate depositors-can exert pressure. While Great Southern Bancorp, Inc. strategically manages these funds, their volume shows their importance. Total deposits stood at $4.53 billion as of September 30, 2025. The shift in reliance is clear; for example, brokered deposits decreased by $92.1 million (or 11.9%) during the third quarter of 2025, which accounted for most of the total deposit decrease that quarter. This volatility and rate sensitivity mean Great Southern Bancorp, Inc. must constantly monitor the market to replace these funds cost-effectively, especially since the average rate paid on interest-bearing liabilities dropped from 3.24% in Q3 2024 to 2.66% in Q3 2025, partly due to managing these maturing deposits.

• Core system switching costs are high, limiting Great Southern Bancorp, Inc.'s leverage.
• Vendor termination cost Great Southern Bancorp, Inc. $1.9 million in 2024 conversion expenses.
• Wholesale funding capacity was $1.47 billion at September 30, 2025.
• Brokered deposits were a $92.1 million smaller component in Q3 2025.
• The average rate paid on interest-bearing liabilities fell 58 basis points year-over-year to 2.66% in Q3 2025.

Finance: draft Q4 2025 liquidity forecast by next Tuesday.

Great Southern Bancorp, Inc. (GSBC) - Porter's Five Forces: Bargaining power of customers

High industry-wide competition for deposits forces Great Southern Bancorp to increase rates. You see this pressure reflected in the cost of funds. For the three months ended September 30, 2025, the average rate paid on total interest-bearing liabilities was 2.66%, down from 3.24% in the 2024 third quarter. Still, the bank is actively managing this dynamic by balancing rate discipline with customer retention. The annualized net interest margin for the third quarter of 2025 stood at 3.72%, an improvement from 3.42% in the third quarter of 2024.

Customers can easily switch to high-yield savings or money market accounts from competitors. This ease of switching is evident in the deposit flow. Total deposits as of September 30, 2025, were $4.53 billion, representing a decrease of $77.5 million or 1.7% compared to December 31, 2024. The interest expense for the third quarter of 2025 was $28.3 million.

Commercial borrowers in 8 major metro markets have many lending options. Great Southern Bancorp, Inc.'s gross loans totaled $4,543,707 thousand as of September 30, 2025. The bank maintains commercial lending offices in Atlanta, Charlotte, Chicago, Dallas, Denver, Omaha, and Phoenix. The commercial real estate loan portfolio alone was $1,530,990 thousand at that date.

The bank's deposit base includes rate-sensitive brokered deposits. The strategic management of these funds directly impacts interest expense. Brokered deposits saw a decrease of $92.1 million between December 31, 2024, and September 30, 2025. However, in the first quarter of 2025, brokered deposits had actually increased by $123.3 million, or 16.0%, showing their responsiveness to market conditions and the bank's use of them as a funding lever.

Here's a quick look at how funding costs have shifted:

The pressure on Great Southern Bancorp, Inc. from customers demanding competitive rates is clear from the following:

• Average rate paid on brokered deposits fell 72 basis points year-over-year in Q3 2025.
• Average rate paid on time deposits fell 68 basis points year-over-year in Q3 2025.
• Core deposits held steady during the third quarter of 2025.
• The company redeemed subordinated notes in June 2025, eliminating that interest expense.

Great Southern Bancorp, Inc. (GSBC) - Porter's Five Forces: Competitive rivalry

You're looking at the competitive rivalry for Great Southern Bancorp, Inc. (GSBC), and honestly, it's a grind, especially on the funding side. Management has explicitly reported high competition for deposits across the industry, which definitely pressures funding costs. For instance, in the first quarter of 2025, they noted the lingering effects of that high competition on deposit costs, even as they worked to control their funding mix amid persistent deposit competition.

The rivalry is intense, and you see that reflected in the margins. For the quarter ending June 30, 2025, the annualized net interest margin (NIM) settled at 3.68%. This figure came despite management's disciplined balance sheet strategy and proactive funding cost management, which helped improve the margin by 25 basis points from the year-ago quarter. Still, even as the NIM ticked up to 3.72% by the third quarter of 2025, management continued to cite 'ongoing competition and elevated funding costs' as a factor they closely monitor.

Great Southern Bancorp, Inc. operates a physical footprint of 89 retail centers spread across six states-Missouri, Iowa, Kansas, Minnesota, Arkansas, and Nebraska. This puts them in direct competition with both the massive national banks that have deep pockets and the smaller community banks that often have hyper-local deposit advantages. Their mid-sized status, with total assets around $5.85 billion as of June 30, 2025, means they don't always have the same scale to absorb funding cost shocks as the super-regional players might.

Here's a quick look at how some key metrics shifted across the mid-year reporting period, showing the ongoing dynamic:

The slight drop in total deposits from $4.68 billion at the end of Q2 to $4.53 billion by the end of Q3 2025, despite the improved NIM, underscores the constant need to manage the funding mix. They are actively managing this, for example, by redeeming subordinated notes in June 2025 to avoid a rate step-up, which helped lower interest expense.

The competitive rivalry manifests in several ways you need to watch:

• Intense pricing pressure on deposit gathering.
• Need to maintain strong customer relationships for deposit stability.
• Scale limitations versus larger national rivals.
• Constant need for disciplined asset-liability management.

Finance: draft 13-week cash view by Friday.

Great Southern Bancorp, Inc. (GSBC) - Porter's Five Forces: Threat of substitutes

You're looking at how Great Southern Bancorp, Inc. (GSBC) is holding up against alternatives that can do what a bank does, but differently. The threat of substitutes is real, and it's driven by technology that lets customers move money or get credit without ever stepping into a banking center.

FinTech firms offer substitutes for payments and lending, eroding traditional revenue. Honestly, the sheer scale of the FinTech sector shows how much ground they're covering. Established scaled fintechs-those making over $500 million in annual revenue-grab about $231 billion, which is 60%, of the global fintech industry's total revenue. While fintechs have only penetrated about 3% of banking and insurance revenues, they're growing at a pace three times more quickly than incumbent banks. For Great Southern Bancorp, Inc., this means pressure on fee income from payments and competition for loan origination. As of September 30, 2025, Great Southern Bancorp, Inc.'s total net loans stood at $4.47 billion, and total deposits were $4.53 billion. The competition isn't just about lower rates; it's about speed and user experience, especially as the AI in the fintech market is valued at $30 billion in 2025.

Online lenders and peer-to-peer platforms bypass the bank's physical branch network. This is a direct challenge to the traditional brick-and-mortar model. As of August 2022, Great Southern Bancorp, Inc. operated 93 retail banking centers across six states. Compare that to the global expectation that real-time payments transaction value will hit $60 trillion in 2025. Customers expect instant settlement, which is what these digital channels push for. Also, the fact that only about 16% of clients worldwide are comfortable with a branchless, fully digital bank as their primary relationship shows there's still a segment to protect, but the trend is clear.

Investment firms and money market funds substitute for traditional deposit accounts. When rates are attractive, customers move cash out of low-yielding bank accounts into higher-yielding, liquid alternatives. Great Southern Bancorp, Inc. is managing a deposit base of $4.53 billion as of September 30, 2025. The pressure on deposits is evident in their own data; time deposits generated through their banking center and corporate services networks decreased by $172.4 million (or 18.2%) during the year ended December 31, 2024. To give you a sense of the scale of alternatives, net global sustainable open-end and exchange-traded funds recorded $4.9 billion in Q2 2025.

Here's a quick look at how the scale of Great Southern Bancorp, Inc. compares to the scale of the substitute market elements we're discussing. What this estimate hides is that direct comparisons are tough, but it shows the relative size of the players.

The bank's adoption of the Fiserv DNA platform is a direct response to this threat. You see, Great Southern Bancorp, Inc. selected the Fiserv DNA Bank Platform back in 2023 to modernize core banking processes. This move, initiated earlier in 2022, was explicitly to enhance digital banking and enable the integration of new innovations from fintechs. The DNA platform is designed with an open architecture, which makes it easier to integrate third-party solutions and bring new products online quickly. It also provides a 360-degree view of accountholder relationships, which is key for the personalized service that substitutes often excel at delivering. The goal is to have a technology foundation with the flexibility to meet future needs, which is a direct countermeasure to the speed of digital disruption.

Finance: draft a sensitivity analysis on deposit migration risk based on the $670.3 million uninsured deposit base as of year-end 2024 by next Tuesday.

Great Southern Bancorp, Inc. (GSBC) - Porter's Five Forces: Threat of new entrants

When you look at banking, the threat of new entrants is usually kept in check by heavy regulation. Honestly, setting up a new bank from scratch is a massive undertaking, primarily because of the capital you need just to get your doors open and stay compliant. Regulators set high hurdles for a reason, and that acts as a defintely strong barrier for anyone thinking about starting up a traditional bank today.

Great Southern Bancorp, Inc. uses its strong balance sheet to make this barrier even higher for potential rivals. You see this clearly when you check their capital position. Maintaining these ratios shows they are well-capitalized, which is a huge signal of stability to depositors and regulators alike. Here's a quick look at how their key capital metrics stacked up at the start of 2025 compared to the end of 2024:

That 11.3% Tier 1 Leverage Ratio in Q1 2025 is solid. It means Great Southern Bancorp, Inc. has a substantial cushion above the minimum regulatory requirements, making it harder for a new, less capitalized entity to compete on stability alone.

Beyond capital, a new entrant has to build a physical footprint to compete with an established regional player. Great Southern Bancorp, Inc. maintains a physical presence across 6 states, which means new competition needs significant investment in infrastructure and local market knowledge to match that reach. Their retail banking centers are spread across Missouri, Iowa, Kansas, Minnesota, Arkansas, and Nebraska.

Still, the landscape is shifting because of technology. FinTechs are increasingly bypassing the traditional de novo (starting from scratch) bank route by obtaining their own charters, which lowers the non-bank barrier to entry. This trend is significant because it allows tech-forward companies to access the payments and settlement rails directly, avoiding reliance on sponsor banks.

The pace of this charter activity in 2025 is notable. We saw a surge in licensing applications from these non-traditional players. Consider these developments from 2025:

• 20 such filings were submitted through October 3rd, 2025, an all-time high.
• Stripe accepted an application for a Merchant Acquirer Limited Purpose Bank (MALPB) charter in April 2025.
• Fiserv processed its first transactions under its MALPB charter in April 2025.
• Nubank applied for a U.S. national bank charter in October 2025.
• Circle, Ripple, and Wise all filed for national trust bank charters mid-2025.

These moves show that while regulatory capital is a high initial hurdle, sophisticated FinTechs are finding pathways to become direct competitors, not just partners. Finance: draft a memo on the competitive implications of the MALPB charter trend by next Tuesday.