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What changed in GREAT SOUTHERN BANCORP, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of GREAT SOUTHERN BANCORP, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+794 added−812 removedSource: 10-K (2024-03-12) vs 10-K (2023-03-13)

Top changes in GREAT SOUTHERN BANCORP, INC.'s 2023 10-K

794 paragraphs added · 812 removed · 595 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

221 edited+61 added−26 removed235 unchanged
Biggest changeExpected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized ​ Tax-Equivalent ​ ​ ​ Cost Amortized Yield Fair Value ​ ​ (Dollars In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ AVAILABLE-FOR-SALE SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ One year or less $ — — $ — After one through five years ​ 245 5.76 % 245 After five through ten years ​ 919 4.48 % 934 After ten years ​ 59,503 3.84 % 56,316 Securities not due on a single maturity date ​ 492,547 2.56 % 433,097 Total ​ $ 553,214 2.70 % $ 490,592 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized Tax-Equivalent ​ ​ ​ Carrying Value Amortized Yield Fair Value ​ ​ (Dollars In Thousands) HELD-TO-MATURITY SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ One year or less ​ $ — — ​ $ — After one through five years ​ — — ​ — After five through ten years ​ 1,002 5.99 % 900 After ten years ​ 5,226 1.69 % 4,546 Securities not due on a single maturity date ​ 196,268 2.64 % 172,319 Total ​ $ 202,495 2.63 % $ 177,765 ​ ​ 27 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Not Due ​ ​ ​ ​ ​ ​ ​ ​ After One ​ After Five ​ After ​ on a Single ​ ​ ​ ​ ​ One Year ​ Through ​ Through ​ Ten ​ Maturity ​ ​ ​ ​ or Less Five Years Ten Years Years Date Total ​ ​ (In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AVAILABLE-FOR-SALE SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities $ — $ — $ — $ — $ 286,482 $ 286,482 Agency collateralized mortgage obligations ​ — ​ — ​ — ​ — ​ 78,474 ​ 78,474 Small business administration securities ​ — ​ — ​ — ​ — ​ 68,141 ​ 68,141 States and political subdivisions securities ​ — ​ 245 ​ 934 ​ 56,316 ​ — ​ 57,495 ​ ​ $ — ​ $ 245 ​ $ 934 ​ $ 56,316 ​ $ 433,097 ​ $ 490,592 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ HELD-TO-MATURITY SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 76,906 ​ $ 76,906 Agency collateralized mortgage obligations ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 119,362 ​ ​ 119,362 States and political subdivisions securities ​ ​ — ​ ​ — ​ ​ 1,001 ​ ​ 5,226 ​ ​ — ​ ​ 6,227 ​ ​ $ — ​ $ — ​ $ 1,001 ​ $ 5,226 ​ $ 196,268 ​ $ 202,495 ​ The following table shows our investments’ gross unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2022, 2021 and 2020, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ ​ Less than 12 Months ​ 12 Months or More ​ Total ​ ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​ Fair ​ Unrealized Description of Securities Value Losses Value Losses Value Losses ​ ​ (In Thousands) AVAILABLE-FOR-SALE SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities ​ $ 221,562 ​ $ (27,597) ​ $ 64,918 ​ $ (13,187) ​ $ 286,480 ​ $ (40,784) Agency collateralized mortgage obligations ​ 28,537 ​ (3,262) ​ 40,642 ​ (8,469) ​ 69,179 ​ (11,731) Small Business Administration securities ​ 60,473 ​ (5,224) ​ 7,667 ​ (1,711) ​ 68,140 ​ (6,935) States and political subdivisions securities ​ 44,455 ​ (2,913) ​ 3,753 ​ (378) ​ 48,208 ​ (3,291) ​ ​ $ 355,027 ​ $ (38,996) ​ $ 116,980 ​ $ (23,745) ​ $ 472,007 ​ $ (62,741) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ HELD-TO-MATURITY SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities ​ $ 59,218 ​ $ (7,766) ​ $ 7,868 ​ $ (2,054) ​ $ 67,086 ​ $ (9,820) Agency collateralized mortgage obligations ​ ​ 61,055 ​ ​ (6,411) ​ ​ 44,178 ​ ​ (7,718) ​ ​ 105,233 ​ ​ (14,129) States and political subdivisions securities ​ ​ 900 ​ ​ (101) ​ ​ 4,546 ​ ​ (680) ​ ​ 5,446 ​ ​ (781) ​ ​ $ 121,173 ​ $ (14,278) ​ $ 56,592 ​ $ (10,452) ​ $ 177,765 ​ $ (24,730) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 ​ ​ Less than 12 Months ​ 12 Months or More ​ Total ​ ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​ Fair ​ Unrealized Description of Securities Value Losses Value Losses Value Losses ​ ​ (In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AVAILABLE-FOR-SALE SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities ​ $ 47,769 ​ $ (388) ​ $ 10,583 ​ $ (356) ​ $ 58,352 ​ $ (744) Agency collateralized mortgage obligations ​ 92,727 ​ (1,588) ​ 16,298 ​ (910) ​ 109,025 ​ (2,498) States and political subdivisions securities ​ 6,537 ​ (43) ​ — ​ — ​ 6,537 ​ (43) ​ ​ $ 147,033 ​ $ (2,019) ​ $ 26,881 ​ $ (1,266) ​ $ 173,914 ​ $ (3,285) ​ 28 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 ​ ​ Less than 12 Months ​ 12 Months or More ​ Total ​ ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​ Fair ​ Unrealized Description of Securities Value Losses Value Losses Value Losses ​ ​ (In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AVAILABLE-FOR-SALE SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities ​ $ 10,279 ​ $ (831) ​ $ — ​ $ — ​ $ 10,279 ​ $ (831) Agency collateralized mortgage obligations ​ ​ 12,727 ​ ​ (375) ​ ​ — ​ ​ — ​ ​ 12,727 ​ ​ (375) States and political subdivisions securities ​ 1,164 ​ (6) ​ — ​ — ​ 1,164 ​ (6) ​ ​ $ 24,170 ​ $ (1,212) ​ $ — ​ $ — ​ $ 24,170 ​ $ (1,212) ​ Allowance for Credit Losses As of January 1, 2021, the Company began evaluating all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326, Measurement of Credit Losses on Financial Instruments .
Biggest changeExpected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized ​ Tax-Equivalent ​ ​ ​ Cost Amortized Yield Fair Value ​ ​ (Dollars In Thousands) AVAILABLE-FOR-SALE SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ One year or less $ — — $ — After one through five years ​ 1,197 4.74 % 1,226 After five through ten years ​ — — ​ — After ten years ​ 57,944 3.86 % 56,911 Securities not due on a single maturity date ​ 472,751 2.60 % 420,070 Total ​ $ 531,892 2.74 % $ 478,207 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized Tax-Equivalent ​ ​ ​ Carrying Value Amortized Yield Fair Value ​ ​ (Dollars In Thousands) HELD-TO-MATURITY SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ One year or less ​ $ — — ​ $ — After one through five years ​ — — ​ — After five through ten years ​ 1,018 5.99 % 959 After ten years ​ 5,171 1.69 % 4,748 Securities not due on a single maturity date ​ 188,834 2.64 % 165,486 Total ​ $ 195,023 2.63 % $ 171,193 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Not Due ​ ​ ​ ​ ​ ​ ​ ​ After One ​ After Five ​ After ​ on a Single ​ ​ ​ ​ ​ One Year ​ Through ​ Through ​ Ten ​ Maturity ​ ​ ​ ​ or Less Five Years Ten Years Years Date Total ​ ​ (In Thousands) AVAILABLE-FOR-SALE SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities $ — $ — $ — $ — $ 280,231 $ 280,231 Agency collateralized mortgage obligations ​ — ​ — ​ — ​ — ​ 75,946 ​ 75,946 Small business administration securities ​ — ​ — ​ — ​ — ​ 63,893 ​ 63,893 States and political subdivisions securities ​ — ​ 1,226 ​ — ​ 56,911 ​ — ​ 58,137 ​ ​ $ — ​ $ 1,226 ​ $ — ​ $ 56,911 ​ $ 420,070 ​ $ 478,207 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ HELD-TO-MATURITY SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 74,931 ​ $ 74,931 Agency collateralized mortgage obligations ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 113,903 ​ ​ 113,903 States and political subdivisions securities ​ ​ — ​ ​ — ​ ​ 1,018 ​ ​ 5,171 ​ ​ — ​ ​ 6,189 ​ ​ $ — ​ $ — ​ $ 1,018 ​ $ 5,171 ​ $ 188,834 ​ $ 195,023 ​ 28 Table of Contents The following table shows our investments’ gross unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2023, 2022 and 2021, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ ​ Less than 12 Months ​ 12 Months or More ​ Total ​ ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​ Fair ​ Unrealized Description of Securities Value Losses Value Losses Value Losses ​ ​ (In Thousands) AVAILABLE-FOR-SALE SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities ​ $ 4,318 ​ $ (9) ​ $ 274,801 ​ $ (35,881) ​ $ 279,119 ​ $ (35,890) Agency collateralized mortgage obligations ​ 9,080 ​ ​ (216) ​ ​ 66,866 ​ ​ (9,827) ​ ​ 75,946 ​ ​ (10,043) Small Business Administration securities ​ 7,782 ​ ​ (133) ​ ​ 56,111 ​ ​ (6,622) ​ ​ 63,893 ​ ​ (6,755) States and political subdivisions securities ​ — ​ ​ — ​ ​ 37,969 ​ ​ (1,531) ​ ​ 37,969 ​ ​ (1,531) ​ ​ $ 21,180 ​ $ (358) ​ $ 435,747 ​ $ (53,861) ​ $ 456,927 ​ $ (54,219) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ HELD-TO-MATURITY SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities ​ $ — ​ $ — ​ $ 66,245 ​ $ (8,686) ​ $ 66,245 ​ $ (8,686) Agency collateralized mortgage obligations ​ ​ — ​ ​ — ​ ​ 99,241 ​ ​ (14,662) ​ ​ 99,241 ​ ​ (14,662) States and political subdivisions securities ​ ​ — ​ ​ — ​ ​ 5,707 ​ ​ (482) ​ ​ 5,707 ​ ​ (482) ​ ​ $ — ​ $ — ​ $ 171,193 ​ $ (23,830) ​ $ 171,193 ​ $ (23,830) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ ​ Less than 12 Months ​ 12 Months or More ​ Total ​ ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​ Fair ​ Unrealized Description of Securities Value Losses Value Losses Value Losses ​ ​ (In Thousands) AVAILABLE-FOR-SALE SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities ​ $ 221,562 ​ $ (27,597) ​ $ 64,918 ​ $ (13,187) ​ $ 286,480 ​ $ (40,784) Agency collateralized mortgage obligations ​ 28,537 ​ ​ (3,262) ​ ​ 40,642 ​ ​ (8,469) ​ ​ 69,179 ​ ​ (11,731) Small Business Administration securities ​ ​ 60,473 ​ ​ (5,224) ​ ​ 7,667 ​ ​ (1,711) ​ ​ 68,140 ​ ​ (6,935) States and political subdivisions securities ​ 44,455 ​ ​ (2,913) ​ ​ 3,753 ​ ​ (378) ​ ​ 48,208 ​ ​ (3,291) ​ ​ $ 355,027 ​ $ (38,996) ​ $ 116,980 ​ $ (23,745) ​ $ 472,007 ​ $ (62,741) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ HELD-TO-MATURITY SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities ​ $ 59,218 ​ $ (7,766) ​ $ 7,868 ​ $ (2,054) ​ $ 67,086 ​ $ (9,820) Agency collateralized mortgage obligations ​ ​ 61,055 ​ ​ (6,411) ​ ​ 44,178 ​ ​ (7,718) ​ ​ 105,233 ​ ​ (14,129) States and political subdivisions securities ​ 900 ​ ​ (101) ​ ​ 4,546 ​ ​ (680) ​ ​ 5,446 ​ ​ (781) ​ ​ $ 121,173 ​ $ (14,278) ​ $ 56,592 ​ $ (10,452) ​ $ 177,765 ​ $ (24,730) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2021 ​ ​ Less than 12 Months ​ 12 Months or More ​ Total ​ ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​ Fair ​ Unrealized Description of Securities Value Losses Value Losses Value Losses ​ ​ (In Thousands) AVAILABLE-FOR-SALE SECURITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities ​ $ 47,769 ​ $ (388) ​ $ 10,583 ​ $ (356) ​ $ 58,352 ​ $ (744) Agency collateralized mortgage obligations ​ ​ 92,727 ​ ​ (1,588) ​ ​ 16,298 ​ ​ (910) ​ ​ 109,025 ​ ​ (2,498) States and political subdivisions securities ​ 6,537 ​ ​ (43) ​ ​ — ​ ​ — ​ ​ 6,537 ​ ​ (43) ​ ​ $ 147,033 ​ $ (2,019) ​ $ 26,881 ​ $ (1,266) ​ $ 173,914 ​ $ (3,285) ​ 29 Table of Contents Allowance for Credit Losses As of January 1, 2021, the Company began evaluating all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326, Measurement of Credit Losses on Financial Instruments .
During 2022, the Company transferred, at fair value, $226.5 million of securities from the available-for-sale portfolio to the held-to-maturity portfolio after determining that those securities, for various reasons, would likely be held to their maturity or full repayment prior to contractual maturity. See Notes 1 and 2 of the accompanying audited financial statements included in Item 8 of this Report.
During 2022, the Company transferred, at fair value, $226.5 million of securities from the available-for-sale portfolio to the held-to-maturity portfolio after determining that those securities, for various reasons, would likely be held to their maturity or full repayment prior to contractual maturity. See Notes 1 and 2 to the accompanying audited financial statements included in Item 8 of this Report.
Great Southern has continued its commercial lending in all of these geographic areas as well as through our loan production offices in Atlanta, Charlotte, Chicago, Dallas, Denver, Omaha, Phoenix and Tulsa. As part of its commercial lending activities, Great Southern issues letters of credit and receives fees averaging approximately 1% of the amount of the letter of credit per year.
Great Southern has continued its commercial lending in all of these geographic areas as well as through our loan production offices in Atlanta, Charlotte, Chicago, Dallas, Denver, Omaha, and Phoenix. As part of its commercial lending activities, Great Southern issues letters of credit and receives fees averaging approximately 1% of the amount of the letter of credit per year.
Loan fees and certain direct loan origination costs are deferred, and the net fee or cost is recognized in interest income using the level-yield method over the contractual life of the loan. For further discussion of this matter, see Note 1 of the accompanying audited financial statements, included in Item 8 of this Report.
Loan fees and certain direct loan origination costs are deferred, and the net fee or cost is recognized in interest income using the level-yield method over the contractual life of the loan. For further discussion of this matter, see Note 1 to the accompanying audited financial statements, included in Item 8 of this Report.
The allowance for credit losses is measured using an average historical loss model which incorporates relevant information about past events (including historical credit loss experience on loans with similar risk characteristics), current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the loans.
The allowance for credit losses is measured using an average historical loss model that incorporates relevant information about past events (including historical credit loss experience on loans with similar risk characteristics), current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the loans.
The Company also operates commercial loan production offices in Atlanta; Charlotte; Chicago; Dallas; Denver; Omaha; Phoenix and Tulsa; and a mortgage lending office in Springfield, Missouri. The Company regularly evaluates its banking center network and lines of business to ensure that it is serving customers in the best way possible.
The Company also operates commercial loan production offices in Atlanta; Charlotte; Chicago; Dallas; Denver; Omaha; and Phoenix; and a mortgage lending office in Springfield, Missouri. The Company regularly evaluates its banking center network and lines of business to ensure that it is serving customers in the best way possible.
The changes in underwriting guidelines resulted in lower origination volume, and as such, outstanding consumer auto loan balances have decreased significantly since the end of 2016. After a review of the indirect automobile lending model, the decision was made to exit this business line effective March 31, 2019.
The changes in underwriting guidelines resulted in lower origination volume, and as such, outstanding consumer auto loan balances have decreased significantly since the end of 2016. After a review of the indirect automobile lending model, the decision was made to exit this business line effective March 2019.
The availability of funds from loan sales is influenced generally by the level of interest rates, which in turn may impact the volume of originations. Deposits . The Bank attracts both short-term and long-term deposits from the general public by offering a wide variety of accounts and rates and also purchases brokered deposits from time to time.
The availability of funds from loan sales is influenced generally by the level of interest rates, which in turn may impact the volume of originations. Deposits . The Bank attracts both short-term and long-term deposits from the general public by offering a wide variety of accounts and rates and purchases brokered deposits from time to time.
For secured loans originated and held, most lenders have approval authorities of $250,000 or below while twelve Senior Managers have approval authority of varying amounts up to $2 million. Lender approval authorities are also subject to loans-to-one borrower limits of $500,000 or below for most lenders and of varying amounts up to $5 million for fourteen Senior Managers and Underwriters.
For secured loans originated and held, most lenders have approval authorities of $250,000 or below while twelve Senior Managers have approval authority of varying amounts up to $2 million. Lender approval authorities are also subject to loans-to-one borrower limits of $500,000 or below for most lenders and of varying amounts up to $5 million for Senior Managers and Underwriters.
Market and financial forces, including strong rate competition for well-qualified borrowers, have made indirect automobile lending less profitable over the long term. The Company will continue servicing indirect automobile loans made before March 31, 2019, until each loan agreement is satisfied.
Market and financial forces, including strong rate competition for well-qualified borrowers, have made indirect automobile lending less profitable over the long term. The Company will continue servicing indirect automobile loans made before March 2019, until each loan agreement is satisfied.
For the year ended December 31, 2022, gross interest income which would have been recorded had the non-accruing loans been current in accordance with their original terms amounted to $292,000. No interest income was included on these loans for the year ended December 31, 2022.
No interest income was included on these loans for the year ended December 31, 2023. For the year ended December 31, 2022, gross interest income which would have been recorded had the non-accruing loans been current in accordance with their original terms amounted to $292,000. No interest income was included on these loans for the year ended December 31, 2022.
Examples of this could be: (1) the need to fund for late outgoing wires or cash letter settlements, (2) the need to disburse one or several loans but the permanent source of funds will not be available for a few days; (3) a temporary spike in interest rates on other funding sources that are being used; or (4) the need to purchase a security for collateral pledging purposes a few days prior to the funds becoming available on an existing security that is maturing.
Examples of this could be: (1) the need to fund for late outgoing wires or cash letter settlements, (2) the need to disburse one or more loans but the permanent source of funds will not be available for a few days; (3) a temporary spike in interest rates on other funding sources that are being used; or (4) the need to purchase a security for collateral pledging purposes a few days prior to the funds becoming available on an existing security that is maturing.
Paul/Bloomington, MN-WI 4 0.1% ​ 70 US Bank NA ​ Our most direct competition for deposits has historically come from other commercial banks, savings institutions and credit unions located in our market areas. The Bank competes for these deposits by offering a variety of deposit accounts at competitive rates, convenient business hours, and accessible branch, online, mobile and ATM services.
Paul/Bloomington, MN-WI 4 0.1% ​ 71 US Bank NA ​ Our most direct competition for deposits has historically come from other commercial banks, savings institutions and credit unions located in our market areas. The Bank competes for these deposits by offering a variety of deposit accounts at competitive rates, convenient business hours, and accessible branch, online, mobile and ATM services.
GSRE Holding III had net income of $-0- in each of the years ended December 31, 2022 and 2021. GSTC Investments, L.L.C. GSTCLLC was organized in 2016. GSTCLLC is a limited liability company that invests in multiple limited liability entities for the purpose of acquiring state and federal tax credits which are utilized by Great Southern.
GSRE Holding III had net income of $-0- in each of the years ended December 31, 2023 and 2022. GSTC Investments, L.L.C. GSTCLLC was organized in 2016. GSTCLLC is a limited liability company that invests in multiple limited liability entities for the purpose of acquiring state and federal tax credits which are utilized by Great Southern.
The Bank continues to emphasize real estate lending while also expanding and increasing its originations of commercial business loans. The corporate office of Great Southern is located at 218 South Glenstone, Springfield, Missouri, 65802 and its telephone number at that address is (417) 887-4400. Internet Website Bancorp maintains a website at www.greatsouthernbank.com.
The Bank continues to emphasize real estate lending while also expanding and increasing its originations of commercial business loans. The corporate office of Great Southern is located at 218 S. Glenstone, Springfield, Missouri, 65802 and its telephone number at that address is 417-887-4400. Internet Website Bancorp maintains a website at www.greatsouthernbank.com.
GSFC is incorporated under the laws of the State of Missouri, and has not had any business activity since November 30, 2012, when it sold Great Southern Insurance and Great Southern Travel, two divisions of Great Southern that were operated through GSFC. At December 31, 2022, the Bank’s total investment in Great Southern Community Development Company, L.L.C.
GSFC is incorporated under the laws of the State of Missouri, and has not had any business activity since November 30, 2012, when it sold Great Southern Insurance and Great Southern Travel, two divisions of Great Southern that were operated through GSFC. At December 31, 2023, the Bank’s total investment in Great Southern Community Development Company, L.L.C.
CDC had consolidated net income of $-0- in each of the years ended December 31, 2022 and 2021. GS, L.L.C. GSLLC was organized in 2005. GSLLC is a limited liability company that invests in multiple limited liability entities for the purpose of acquiring state and federal tax credits which are utilized by Great Southern.
CDC had consolidated net income of $-0- in each of the years ended December 31, 2023 and 2022. GS, L.L.C. GSLLC was organized in 2005. GSLLC is a limited liability company that invests in multiple limited liability entities for the purpose of acquiring state and federal tax credits which are utilized by Great Southern.
GSRE Holding had net losses of $2,000 in each of the years ended December 31, 2022 and 2021. GSRE Holding II, L.L.C. Generally, the purpose of GSRE Holding II is to hold real estate assets which have been obtained through foreclosure by the Bank and which require ongoing operation of a business or completion of construction.
GSRE Holding had net losses of $2,000 in each of the years ended December 31, 2023 and 2022. GSRE Holding II, L.L.C. Generally, the purpose of GSRE Holding II is to hold real estate assets which have been obtained through foreclosure by the Bank and which require ongoing operation of a business or completion of construction.
As of December 31, 2022, the Company was “well-capitalized.” The federal banking agencies consider concentrations of credit risk and risks from non-traditional activities, as well as an institution’s ability to manage those risks, when determining the adequacy of an institution’s capital. This evaluation is generally made as part of the institution’s regular safety and soundness examination.
As of December 31, 2023, the Company was “well-capitalized.” The federal banking agencies consider concentrations of credit risk and risks from non-traditional activities, as well as an institution’s ability to manage those risks, when determining the adequacy of an institution’s capital. This evaluation is generally made as part of the institution’s regular safety and soundness examination.
Real Estate Development had net income of $-0- in each of the years ended December 31, 2022 and 2021. Great Southern Community Development Company, L.L.C. and Great Southern CDE, L.L.C. Generally, the purpose of CDC is to invest in community development projects that have a public benefit and are permissible under Missouri and Kansas law.
Real Estate Development had net income of $-0- in each of the years ended December 31, 2023 and 2022. Great Southern Community Development Company, L.L.C. and Great Southern CDE, L.L.C. Generally, the purpose of CDC is to invest in community development projects that have a public benefit and are permissible under Missouri and Kansas law.
Generally, the purpose of VFP II is to hold real estate assets which have been obtained through foreclosure by the Bank. The real estate assets obtained through foreclosure were formerly collateral for a participation loan sold by the Bank. The Bank has a 50 percent interest in VFP II and at December 31, 2022 its investment totaled $2.2 million.
Generally, the purpose of VFP II is to hold real estate assets which have been obtained through foreclosure by the Bank. The real estate assets obtained through foreclosure were formerly collateral for a participation loan sold by the Bank. The Bank has a 50 percent interest in VFP II and at December 31, 2023 its investment totaled $2.2 million.
Financial institutions, such as the Bank, are subject, with certain exceptions, to the provisions of the Code generally applicable to corporations. Bad Debt Deduction As of December 31, 2022 and 2021, retained earnings included approximately $17.5 million for which no deferred income tax liability had been recognized.
Financial institutions, such as the Bank, are subject, with certain exceptions, to the provisions of the Code generally applicable to corporations. Bad Debt Deduction As of December 31, 2023 and 2022, retained earnings included approximately $17.5 million for which no deferred income tax liability had been recognized.
Dividends of the Company and the Bank may also be restricted under the capital conservation buffer rules, as discussed below under “—Capital.” Capital The Company and the Bank are subject to capital regulations adopted by the FRB and the FDIC, which established minimum required ratios for common equity Tier 1 (“CET1”) capital, Tier 1 capital and total capital and the minimum leverage ratio; set forth the risk- 41 Table of Contents weightings of assets and certain off-balance sheet items for purposes of the risk-based capital ratios; require an additional capital conservation buffer over the required risk-based capital ratios, and define what qualifies as capital for purposes of meeting the capital requirements.
Dividends of the Company and the Bank may also be restricted under the capital conservation buffer rules, as discussed below under “—Capital.” Capital The Company and the Bank are subject to capital regulations adopted by the FRB and the FDIC, which established minimum required ratios for common equity Tier 1 (“CET1”) capital, Tier 1 capital and total capital and the minimum leverage ratio; set forth the risk-weightings of assets and certain off-balance sheet items for purposes of the risk-based capital ratios; require an additional capital conservation buffer over the required risk-based capital ratios, and define what qualifies as capital for purposes of meeting the capital requirements.
Failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing, or to comply with all of 39 Table of Contents the relevant laws or regulations, could have serious financial, legal and reputational consequences for the institution and could block or substantially delay a merger or other acquisition transaction.
Failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing, or to comply with all of 40 Table of Contents the relevant laws or regulations, could have serious financial, legal and reputational consequences for the institution and could block or substantially delay a merger or other acquisition transaction.
The adjustments are based on results from various regression models projecting the impact of the macroeconomic variables to loss rates. The forecast is used for 22 Table of Contents a reasonable and supportable period before reverting back to historical averages using a straight-line method.
The adjustments are based on results from various regression models projecting the impact of the macroeconomic variables to loss rates. The forecast is used for 23 Table of Contents a reasonable and supportable period before reverting back to historical averages using a straight-line method.
One other entity also has an interest in VFP II as a result of its participation in the loan sold by the Bank. At December 31, 2022, the only asset of VFP II was cash. VFP II had net income of $-0- for each of the years ended December 31, 2022 and 2021.
One other entity also has an interest in VFP II as a result of its participation in the loan sold by the Bank. At December 31, 2023, the only asset of VFP II was cash. VFP II had net income of $-0- for each of the years ended December 31, 2023 and 2022.
In order to be considered adequately capitalized, an institution must have the minimum capital ratios described above. As of December 31, 2022, the Bank was “well-capitalized.” An institution that is not well-capitalized is subject to certain restrictions on brokered deposits and interest rates on deposits.
In order to be considered adequately capitalized, an institution must have the minimum capital ratios described above. As of December 31, 2023, the Bank was “well-capitalized.” An institution that is not well-capitalized is subject to certain restrictions on brokered deposits and interest rates on deposits.
As residential loan rates began to increase significantly along with the increase in market interest rates, much of the Bank’s one- to four-family loans originated in 2022 were adjustable rate loans which are fixed for a period of a few years, then adjust annually.
As residential loan rates began to increase significantly along with the increase in market interest rates, much of the Bank’s one- to four-family loans originated in 2022 and 2023 were adjustable rate loans, which are fixed for a period of a few years, then adjust annually.
Generally, the purpose of GSRE Holding III is to hold real estate assets which have been obtained through foreclosure by the Bank and which require ongoing operation of a business or completion of construction. In 2022 and 2021, GSRE Holding III did not hold any significant real estate assets.
Generally, the purpose of GSRE Holding III is to hold real estate assets which have been obtained through foreclosure by the Bank and which require ongoing operation of a business or completion of construction. In 2023 and 2022, GSRE Holding III did not hold any significant real estate assets.
An institution that is not at least adequately capitalized is: (i) subject to increased monitoring by the appropriate federal banking regulator; (ii) required to submit an acceptable capital restoration plan (including certain guarantees by any company controlling the institution) within 45 days; (iii) subject to asset growth limits; and (iv) required to obtain prior regulatory approval for acquisitions, branching and 42 Table of Contents new lines of business.
An institution that is not at least adequately capitalized is: (i) subject to increased monitoring by the appropriate federal banking regulator; (ii) required to submit an acceptable capital restoration plan (including certain guarantees by any company controlling the institution) within 45 days; (iii) subject to asset growth limits; and (iv) required to obtain prior regulatory approval for acquisitions, branching and new lines of business.
In 2013 through 2022, these delinquencies trended much lower. 12 Table of Contents In underwriting one- to four-family residential real estate loans, Great Southern evaluates the borrower’s ability to make monthly payments and the value of the property securing the loan.
In 2013 through 2023, these delinquencies trended much lower. 12 Table of Contents In underwriting one- to four-family residential real estate loans, Great Southern evaluates the borrower’s ability to make monthly payments and the value of the property securing the loan.
These securities are highly rated by major rating agencies and have a long history of no credit losses. Likewise, the Company has not experienced historical losses on these types of securities. Accordingly, no allowance for credit losses has been recorded for these securities. Sources of Funds General .
These securities are highly rated by major rating agencies and have a long history of no credit losses. Likewise, the Company historically has not experienced losses on these types of securities. Accordingly, no allowance for credit losses has been recorded for these securities. Sources of Funds General .
Our ability to attract and retain customer deposits depends on our ability to generally provide a rate of return, liquidity and risk comparable to that offered by competing investment opportunities. Competition in originating real estate loans comes primarily from other commercial banks, savings institutions and mortgage bankers making loans secured by real estate located in the Bank’s market area.
Our ability to attract and retain customer deposits depends on our ability to generally provide a rate of return, liquidity and risk comparable to that offered by competing investment opportunities. 38 Table of Contents Competition in originating real estate loans comes primarily from other commercial banks, savings institutions and mortgage bankers making loans secured by real estate located in the Bank’s market area.
Headquartered in Springfield, Missouri, Great Southern offers a broad range of banking services through its 92 banking centers located in southern and central Missouri; the Kansas City, Missouri area; the St. Louis area; eastern Kansas; northwestern Arkansas; the Minneapolis area and eastern, western and central Iowa.
Headquartered in Springfield, Missouri, Great Southern offers a broad range of banking services through its 89 banking centers located in southern and central Missouri; the Kansas City, Missouri area; the St. Louis area; eastern Kansas; northwestern Arkansas; the Minneapolis area and eastern, western and central Iowa.
(3) The portfolio composition tables presented in the Bancorp Annual Reports on Form 10-K for the years ended December 31, 2018 - 2020 were divided into legacy loans and loans accounted for under ASC 310-30.
(3) The portfolio composition tables presented in the Bancorp Annual Reports on Form 10-K for the years ended December 31, 2019 and 2020 were divided into legacy loans and loans accounted for under ASC 310-30.
In a year where recoveries exceed charge-offs, the Bank would be required to include the net recoveries in taxable income. 44 Table of Contents Interest Deduction In the case of a financial institution, such as the Bank, no deduction is allowed for the pro rata portion of its interest expense which is allocable to tax-exempt interest on obligations acquired after August 7, 1986.
In a year where recoveries exceed charge-offs, the Bank would be required to include the net recoveries in taxable income. Interest Deduction In the case of a financial institution, such as the Bank, no deduction is allowed for the pro rata portion of its interest expense which is allocable to tax-exempt interest on obligations acquired after August 7, 1986.
At December 31, 2022, the Bank’s total investment in GSSC, L.L.C. (“GSSCLLC”) was $21.1 million. GSSCLLC was formed in 2009 under the laws of the State of Missouri. At December 31, 2022, the Bank’s total investment in GSRE Holding, L.L.C. (“GSRE Holding”) was $2.5 million. GSRE Holding was formed in 2009 under the laws of the State of Missouri.
At December 31, 2023, the Bank’s total investment in GSSC, L.L.C. (“GSSCLLC”) was $21.1 million. GSSCLLC was formed in 2009 under the laws of the State of Missouri. At December 31, 2023, the Bank’s total investment in GSRE Holding, L.L.C. (“GSRE Holding”) was $2.5 million. GSRE Holding was formed in 2009 under the laws of the State of Missouri.
When a customer places a large deposit with an IntraFi Network bank, that bank uses IntraFi to place the funds into deposit accounts issued by 31 Table of Contents other banks in the IntraFi Network. This occurs in increments of less than the standard FDIC insurance maximum, so that both principal and interest are eligible for complete FDIC protection.
When a customer places a large deposit with an IntraFi Network bank, that bank uses IntraFi to place the funds into deposit accounts issued by other banks in the IntraFi Network. This occurs in increments of less than the standard FDIC insurance maximum, so that both principal and interest are eligible for complete FDIC protection.
Federal law also prohibits the FRB 40 Table of Contents from approving such an application if the applicant (and its depository institution affiliates) controls or would control more than 10% of the insured deposits in the United States or if the applicant would control 30% or more of the deposits in any state in which the target bank maintains a branch and in which the applicant or any of its depository institution affiliates controls a depository institution or branch immediately prior to the acquisition of the target bank.
Federal law also prohibits the FRB from approving such an application if the applicant (and its depository institution affiliates) controls or would control more than 10% of the insured deposits in the United States or if the applicant would control 30% or more of the deposits in any state in which the target bank maintains a branch and in which the applicant or any of its depository institution affiliates controls a depository institution or branch immediately prior to the acquisition of the target bank.
Following are the total classified assets at December 31, 2022 and 2021, per the Bank’s internal asset classification list. The allowances for credit losses reflected below are the portions of the Bank’s total allowances for credit losses relating to these classified loans.
Following are the total classified assets at December 31, 2023 and 2022, per the Bank’s internal asset classification list. The allowances for credit losses reflected below are the portions of the Bank’s total allowances for credit losses relating to these classified loans.
Additionally, the allowance for credit losses considers other qualitative factors not included in historical loss rates or macroeconomic forecast such as changes in portfolio composition, underwriting practices, or significant unique events or conditions.
Additionally, the allowance for credit losses considers other qualitative factors not included in historical loss rates or macroeconomic forecasts such as changes in portfolio composition, underwriting practices, or significant unique events or conditions.
Real Estate Development was incorporated and organized in 2003 under the laws of the State of Missouri. At December 31, 2022, the Bank’s total investment in Great Southern Financial Corporation (‘GSFC’) was $6.2 million.
Real Estate Development was incorporated and organized in 2003 under the laws of the State of Missouri. At December 31, 2023, the Bank’s total investment in Great Southern Financial Corporation (“GSFC”) was $6.2 million.
In 2022 and 2021, GSRE Holding II did not hold any significant real estate assets. GSRE Holding II had net losses of $2,000 in each of the years ended December 31, 2022 and 2021. GSRE Holding III, L.L.C.
In 2023 and 2022, GSRE Holding II did not hold any significant real estate assets. GSRE Holding II had net losses of $2,000 in each of the years ended December 31, 2023 and 2022. GSRE Holding III, L.L.C.
At December 31, 2021 and 2022, this information has been consolidated into one table as Great Southern Loan Portfolio Composition. ​ 8 Table of Contents ​ The following table shows the fixed- and adjustable-rate composition of the Bank’s loan portfolio at the dates indicated. The table is based on information prepared in accordance with generally accepted accounting principles.
At December 31, 2021 through 2023, this information has been consolidated into one table as Great Southern Loan Portfolio Composition. ​ 8 Table of Contents The following table shows the fixed- and adjustable-rate composition of the Bank’s loan portfolio at the dates indicated. The table is based on information prepared in accordance with generally accepted accounting principles.
Subsequent to this announcement, the Bank entered into separate definitive agreements to sell two of the 16 banking centers, including all of the associated deposits (totaling approximately $20 million), to separate bank purchasers. One of those sale transactions was completed on February 19, 2016 and the other was completed on March 18, 2016.
Subsequent to this announcement, the Bank entered into separate definitive agreements to sell two of the 16 banking centers, including all of the associated deposits (totaling 3 Table of Contents approximately $20 million), to separate bank purchasers. One of those sale transactions was completed on February 19, 2016 and the other was completed on March 18, 2016.
All loans, regardless of size or type, are required to conform to minimum underwriting standards to assure portfolio quality. These standards and procedures include, but are not limited to, an analysis of the borrower’s financial condition, collateral, repayment ability, verification of liquid assets and credit history as required by loan type.
All loans, regardless of size or type, are required to conform to certain minimum underwriting standards to assure portfolio quality. These standards and procedures include, but are not limited to, an analysis of the borrower’s financial condition, collateral, repayment ability, inquiry and analysis of liquid assets and credit history as required by loan type.
Implementation of CECL reduced retained earnings, and affected other items, in a manner that reduced regulatory capital. The federal banking regulators (the Federal Reserve, the OCC and the FDIC) adopted a rule that gives a banking organization the option to phase in over a three-year period the day-one adverse effects of CECL on its regulatory capital. We elected this option.
Implementation of CECL reduced retained earnings, and affected other items, in a manner that reduced regulatory capital. The federal banking regulators (the Federal Reserve, the OCC and the FDIC) adopted a rule that gives a banking organization the option to phase in over a three-year period the day-one adverse effects of CECL on its regulatory capital.
Agencies, for this purpose, primarily include Freddie Mac, Fannie Mae, Ginnie Mae, Small Business Administration and FHLBank. As of December 31, 2022 and 2021, the Company held approximately $202.5 million and $-0-, respectively, in principal amount of investment securities which the Company classified as held-to-maturity.
Agencies, for this purpose, primarily include Freddie Mac, Fannie Mae, Ginnie Mae, Small Business Administration and FHLBank. As of December 31, 2023 and 2022, the Company held approximately $195.0 million and $202.5 million, respectively, in principal amount of investment securities which the Company classified as held-to-maturity.
The sale amounts generally 16 Table of Contents produce gains to the Bank and allow a margin for servicing income on loans when the servicing is retained by the Bank. However, residential real estate loans sold in recent years have primarily been with Great Southern releasing control of the servicing of the loans.
The sale amounts generally produce gains to the Bank and allow a margin for servicing income on loans when the servicing is retained by the Bank. However, residential real estate loans sold in recent years have primarily been with Great Southern releasing control of the servicing of the loans.
These materials are also available free of charge (other than a user’s regular internet access charges) on the Securities and Exchange Commission’s website at www.sec.gov. Market Areas The Company currently operates 92 full-service retail banking offices, serving nearly 134,000 households in six states – Missouri, Iowa, Kansas, Minnesota, Arkansas and Nebraska.
These materials are also available free of charge (other than a user’s regular internet access charges) on the Securities and Exchange Commission’s website at www.sec.gov. Market Areas The Company currently operates 89 full-service retail banking offices, serving nearly 131,000 households in six states – Missouri, Iowa, Kansas, Minnesota, Arkansas and Nebraska.
Certain investments greater than 5% in companies engaged in activities not permitted for a bank holding company are prohibited. Volcker Rule The federal banking agencies have adopted regulations to implement the provisions of the Dodd-Frank Act known as the Volcker Rule.
Certain investments greater than 5% in companies engaged in activities not permitted for a bank holding company are prohibited. 41 Table of Contents Volcker Rule The federal banking agencies have adopted regulations to implement the provisions of the Dodd-Frank Act known as the Volcker Rule.
These representations, warranties and covenants include those regarding the compliance of loan originations with all applicable legal requirements, mortgage title insurance policies when applicable, enforceable liens on collateral, collateral type, borrower creditworthiness, private mortgage insurance when required and compliance with all applicable federal regulations.
These representations, warranties and covenants include those regarding the compliance of loan originations with all applicable legal requirements, mortgage title insurance policies 16 Table of Contents when applicable, enforceable liens on collateral, collateral type, borrower creditworthiness, private mortgage insurance when required and compliance with all applicable federal regulations.
Furthermore, a bank holding company may be prohibited from paying any dividends if the holding company’s bank subsidiary is not adequately capitalized, and dividends payable by a bank holding company and its depository institutions subsidiaries can be restricted if the capital conservation buffer requirement is not met. See “Capital” below.
Furthermore, a bank holding company may be prohibited from paying any dividends if the holding company’s bank subsidiary is not adequately capitalized, and dividends payable by a bank holding company and its depository institutions subsidiaries can be restricted if the capital conservation buffer requirement is not met.
Under these rules, assessment rates for an institution with total assets of less than $10 billion are determined by weighted average CAMELS composite ratings and certain financial ratios, and range from 3.0 to 30.0 basis points, subject to certain adjustments. In an emergency, the FDIC may also impose a special assessment.
Under these rules, assessment rates for an institution with total assets of less than $10 billion are determined by weighted average CAMELS composite ratings and certain financial ratios, and range from 5.0 to 32.0 basis points, subject to certain adjustments. In an emergency, the FDIC may also impose a special assessment.
Fees from prepayments, commitments, letters of credit and late payments totaled $1.3 million, $1.6 million and $1.6 million for the years ended December 31, 2022, 2021 and 2020, respectively. Loan origination fees, net of related costs, are accounted for in accordance with FASB ASC 310-20, Receivables – Nonrefundable Fees and Other Costs .
Fees from prepayments, commitments, letters of credit and late payments totaled $898,000, $1.3 million and $1.6 million for the years ended December 31, 2023, 2022 and 2021, respectively. Loan origination fees, net of related costs, are accounted for in accordance with FASB ASC 310-20, Receivables – Nonrefundable Fees and Other Costs .
As a Missouri-chartered trust company, Great Southern may invest up to 3%, which was equal to $170.4 million at December 31, 2022, of its assets in service corporations. At December 31, 2022, the Bank’s total investment in Great Southern Real Estate Development Corporation (‘Real Estate Development’) was $2.7 million.
As a Missouri-chartered trust company, Great Southern may invest up to 3%, which was equal to $174.4 million at December 31, 2023, of its assets in service corporations. At December 31, 2023, the Bank’s total investment in Great Southern Real Estate Development Corporation (“Real Estate Development”) was $2.7 million.
Beginning in the early 1980s, Great Southern increased its efforts to originate short-term and adjustable-rate loans. Beginning in the mid-1980s, Great Southern increased its efforts to originate commercial real estate and other residential (multi-family) loans, primarily with adjustable rates or shorter-term fixed rates.
Beginning in the mid-1980s, Great Southern increased its efforts to originate commercial real estate and other residential (multi-family) loans, primarily with adjustable rates or shorter-term fixed rates.
Department of the Treasury, issued the priorities for anti-money laundering and countering the financing of terrorism policy required under the AMLA. The priorities include corruption, cybercrime, terrorist financing, fraud, transnational crime, drug trafficking, human trafficking and proliferation financing.
Department of the Treasury, issued the priorities for anti-money laundering and countering the financing of terrorism policy required under the AMLA. The priorities include corruption, cybercrime, terrorist financing, fraud, transnational crime, drug trafficking, human trafficking and proliferation financing. Privacy Standards and Cybersecurity.
GSRE Holding, L.L.C. Generally, the purpose of GSRE Holding is to hold real estate assets which have been obtained through foreclosure by the Bank and which require ongoing operation of a business or completion of construction. At December 31, 2022, GSRE Holding held cash of $2.5 million and no real estate assets.
Generally, the purpose of GSRE Holding is to hold real estate assets which have been obtained through foreclosure by the Bank and which require ongoing operation of a business or completion of construction. At December 31, 2023, GSRE Holding held cash of $2.5 million and no real estate assets.
The portfolio composition by fixed and adjustable rate tables presented in the Bancorp Annual Reports on Form 10-K for the years ended December 31, 2018 - 2020 was divided into legacy loans and loans accounted for under ASC 310-30. At December 31, 2021 and 2022, this information has been consolidated into one table as Great Southern Loan Portfolio Composition.
The portfolio composition by fixed and adjustable rate tables presented in the Bancorp Annual Reports on Form 10-K for the years ended December 31, 2019 and 2020 was divided into legacy loans and loans accounted for under ASC 310-30. At December 31, 2021 through 2023, this information has been consolidated into one table as Great Southern Loan Portfolio Composition.
No assurance can be given, however, that the Bank will not be adversely affected by environmental contamination. Residential Real Estate Lending At December 31, 2022 and 2021, loans secured by residential real estate, excluding that which is under construction, totaled $1.7 billion and $1.4 billion, respectively, and represented approximately 36.8% and 34.0%, respectively, of the Bank’s total loan portfolio.
No assurance can be given, however, that the Bank will not be adversely affected by environmental contamination. Residential Real Estate Lending At December 31, 2023 and 2022, loans secured by residential real estate, excluding that which is under construction, totaled $1.8 billion and $1.7 billion, respectively, and represented approximately 39.4% and 36.8%, respectively, of the Bank’s total loan portfolio.
GSRE Holding III was formed in 2012 under the laws of the State of Missouri. At December 31, 2022, the Bank’s total investment in GSTC Investments, L.L.C. (“GSTCLLC”) was $19.4 million. GSTCLLC was formed in 2016 under the laws of the State of Missouri. These subsidiaries are primarily engaged in the activities described below.
GSRE Holding III was formed in 2012 under the laws of the State of Missouri. At December 31, 2023, the Bank’s total investment in GSTC Investments, L.L.C. (“GSTCLLC”) was $37.4 million. GSTCLLC was formed in 2016 under the laws of the State of Missouri. These subsidiaries are primarily engaged in the activities described below.
The unrecorded deferred income tax liability on the above amount was approximately $4.3 million and $3.9 million at December 31, 2022 and 2021, respectively. The Bank is required to follow the specific charge-off method which only allows a bad debt deduction equal to actual charge-offs, net of recoveries, experienced during the fiscal year of the deduction.
The unrecorded deferred income tax liability on the above amount was approximately $4.3 million at both December 31, 2023 and December 31, 2022. The Bank is required to follow the specific charge-off method which only allows a bad debt deduction equal to actual charge-offs, net of recoveries, experienced during the fiscal year of the deduction.
The Bank’s one- to four-family residential real estate loan portfolio increased during 2022, due to organic growth. In the first half of 2022, new loan origination volumes were strong and consistent with levels seen in the past couple of years.
The Bank’s one- to four-family residential real estate loan portfolio increased during 2022 due to organic growth and was fairly stable during 2023. In the first half of 2022, new loan origination volumes were strong and consistent with levels seen in the past couple of years.
The following table sets forth loans that were secured by certain types of collateral at December 31, 2022.
The following table sets forth loans that were secured by certain types of collateral at December 31, 2023.
Great Southern subjects these loans to its normal underwriting standards used for originated loans and rejects any credits that do not meet those guidelines. The originating bank generally retains the servicing of these loans. The Bank purchased $361.8 million and $152.8 million of these loans in the fiscal years ended December 31, 2022 and 2021, respectively.
Great Southern subjects these loans to its normal underwriting standards used for originated loans and rejects any credits that do not meet those guidelines. The originating bank generally retains the servicing of these loans. The Bank purchased $400,000 and $361.8 million of these loans in the fiscal years ended December 31, 2023 and 2022, respectively.
The remaining $117.9 million of loans serviced for others related to one- to four-family real estate loans which the Bank had originated and sold, but retained the obligation to service, or had acquired the servicing through various FDIC-assisted transactions.
The remaining $105.3 million of loans serviced for others related to one- to four-family real estate loans which the Bank had originated and sold, but retained the obligation to service, or had acquired the servicing through various FDIC-assisted transactions.
In addition, Great Southern has four other subsidiary companies that are not considered service corporations, GSB One, L.L.C., GSB Two, L.L.C., VFP Conclusion Holding, L.L.C. and VFP Conclusion Holding II, L.L.C. These companies are also described below. Great Southern Real Estate Development Corporation.
In addition, Great Southern has four other subsidiary companies that are not considered service corporations, GSB One, L.L.C., GSB Two, L.L.C., VFP Conclusion Holding, L.L.C. and VFP Conclusion Holding II, L.L.C. These companies are also described below. 36 Table of Contents Great Southern Real Estate Development Corporation.
(Real estate is not included in the definition of “readily marketable collateral.”) As computed on the basis of the Bank’s unimpaired capital and surplus at December 31, 2022, this limit was approximately $180.4 million. See “Government Supervision and Regulation.” At December 31, 2022, the Bank was in compliance with the loans-to-one borrower limit.
Real estate is not included in the definition of “readily marketable collateral.” As computed on the basis of the Bank’s unimpaired capital and surplus at December 31, 2023, this limit was approximately $182 million. See “Government Supervision and Regulation.” At December 31, 2023, the Bank was in compliance with the loans-to-one borrower limit.
The Bank currently is originating one- to four-family adjustable-rate residential mortgage loans primarily with one-year adjustment periods or with rates that are fixed for the first few years of the loan and then adjust annually. Rate adjustments on loans originated prior to July 2001 are based upon changes in prevailing rates for one-year U.S. Treasury securities.
The Bank currently is originating one- to four-family adjustable-rate residential mortgage loans primarily with one-year adjustment periods or with rates that are fixed for the first few years of the loan and then adjust annually. Rate adjustments on these loans are generally based upon changes in prevailing rates for one-year U.S. Treasury securities.
A bank holding company is required to give the FRB prior written notice of any purchase or redemption of its outstanding equity securities if the gross consideration for the purchase or redemption, when combined with the net consideration paid for all such purchases or redemptions during the preceding 12 months, is equal to 10% or more of the company’s consolidated net worth.
See “Capital” below. 42 Table of Contents A bank holding company is required to give the FRB prior written notice of any purchase or redemption of its outstanding equity securities if the gross consideration for the purchase or redemption, when combined with the net consideration paid for all such purchases or redemptions during the preceding 12 months, is equal to 10% or more of the company’s consolidated net worth.
The Bank sold one- to four-family whole real estate loans, SBA-guaranteed loans and loan participations in aggregate amounts of $100.8 million, $341.9 million and $309.1 million during fiscal 2022, 2021, and 2020, respectively. The Bank typically sells long-term fixed rate mortgages.
The Bank sold one- to four-family whole real estate loans, SBA-guaranteed loans and loan participations in aggregate amounts of $154.9 million, $100.8 million and $341.9 million during fiscal 2023, 2022 and 2021, respectively. The Bank typically sells long-term fixed rate mortgages.
The Bank has a 50 percent interest in VFP and at December 31, 2022 its investment totaled $4.2 million. Two other entities also have interests in VFP as a result of their participation in the loan sold by the Bank. At December 31, 2022, the only asset of VFP was cash.
The Bank has a 50 percent interest in VFP and at December 31, 2023 its investment totaled $4.2 million. Two other entities also have interests in VFP as 37 Table of Contents a result of their participation in the loan sold by the Bank. At December 31, 2023, the only asset of VFP was cash.
Employees and Human Capital Resources At December 31, 2022, the Company and its affiliates had a total of 1,124 employees, including 210 part-time employees. None of the Company’s employees are represented by any collective bargaining agreement. Management considers its employee relations to be good. Our human capital objectives include attracting, training, motivating, rewarding and retaining our employees.
Employees and Human Capital Resources At December 31, 2023, the Company and its affiliates had a total of 1,133 employees, including 219 part-time employees. None of the Company’s employees are represented by any collective bargaining agreement. Management considers its employee relations to be good. Our human capital objectives include attracting, training, motivating, rewarding and retaining our employees.
Generally, the purpose of Real Estate Development is to hold real estate assets which have been obtained through foreclosure by the Bank and which require ongoing operation of a business or completion of 35 Table of Contents construction. During 2022 and 2021, Real Estate Development did not hold any real estate assets related to foreclosed property.
Generally, the purpose of Real Estate Development is to hold real estate assets which have been obtained through foreclosure by the Bank and which require ongoing operation of a business or completion of construction. During 2023 and 2022, Real Estate Development did not hold any real estate assets related to foreclosed property.
For the year ended December 31, 2020, gross interest income which would have been recorded had the non-accruing loans been current in accordance with their original terms amounted to $579,000.
For the year ended December 31, 2021, gross interest income which would have been recorded had the non-accruing loans been current in accordance with their original terms amounted to $432,000.
The ability of the Bank to attract and maintain deposits, and the rates paid on these deposits, has been and will continue to be significantly affected by money market conditions. 30 Table of Contents The following table sets forth the time remaining until maturity of the Bank’s time deposits as of December 31, 2022.
The Bank’s ability to attract and maintain deposits, and the rates paid on these deposits, has been and will continue to be significantly affected by money market conditions. The following table sets forth the time remaining until maturity of the Bank’s time deposits as of December 31, 2023.
Other Commercial Lending At December 31, 2022 and 2021, Great Southern had $293 million and $281 million, respectively, in other commercial loans outstanding, or 6.4% and 6.9%, respectively, of the Bank’s total loan portfolio. Great Southern’s other commercial lending activities encompass loans with a variety of purposes and security, including loans to finance accounts receivable, inventory and equipment.
Other Commercial Lending At December 31, 2023 and 2022, Great Southern had $318 million and $293 million, respectively, in other commercial loans outstanding, or 6.8% and 6.4%, respectively, of the Bank’s total loan portfolio. Great Southern’s other commercial lending activities encompass loans with a variety of purposes and security, including loans to finance accounts receivable, inventory and equipment.
Direct consumer lending through the Company’s banking center network is expected to continue as normal. 15 Table of Contents At December 31, 2022 and 2021, the Bank had $70.2 million and $86.1 million, respectively, of direct and indirect auto, boat, modular home and recreational vehicle loans in its portfolio.
Direct consumer lending through the Company’s banking center network is expected to continue as normal. 15 Table of Contents At December 31, 2023 and 2022, the Bank had $57.5 million and $70.2 million, respectively, of direct and indirect auto, boat, modular home and recreational vehicle loans in its portfolio.
GSB Two is a real estate investment trust (“REIT”). It holds interests in real estate mortgages transferred from the Bank. The Bank continues to service the loans in return for a management and servicing fee from GSB Two. GSB Two had net income of $58.3 million and $57.4 million in the years ended December 31, 2022 and 2021, respectively.
GSB Two is a real estate investment trust (“REIT”). It holds interests in real estate mortgages transferred from the Bank. The Bank continues to service the loans in return for a management and servicing fee from GSB Two. GSB Two had net income of $72.6 million and $58.3 million in the years ended December 31, 2023 and 2022, respectively.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

61 edited+11 added−24 removed121 unchanged
Biggest changeIn addition, the availability of brokered deposits and the rates paid on these brokered deposits may be volatile as the balance of the supply of and the demand for brokered deposits changes. Market credit and liquidity concerns may also impact the availability and cost of brokered deposits. Similarly, FHLBank advances are only available to borrowers that meet certain conditions.
Biggest changeMarket credit and liquidity concerns may also impact the availability and cost of brokered deposits. Similarly, FHLBank advances are only available to borrowers that meet certain conditions. If Great Southern were to cease meeting these conditions, our access to FHLBank advances could be significantly reduced or eliminated.
This can lead to significant price swings even when a relatively small number of shares are being traded. There may be future sales of additional common stock or other dilution of our equity, which may adversely affect the market price of our common stock.
This can lead to significant price swings even when a relatively small number of shares are being traded. There may be future sales of additional shares of common stock or other dilution of our equity, which may adversely affect the market price of our common stock.
In addition, larger competitors (including certain nationwide banks that have a significant presence in our market areas) may be able to price loans and deposits more aggressively than we do, and smaller and newer competitors may also be more aggressive in terms of pricing loan and deposit products than us in order to obtain a larger share of the market.
In addition, larger competitors (including certain nationwide banks that have a significant presence in our market areas) may be able to price loans and deposits more aggressively than we do, and smaller and newer competitors may be more aggressive in terms of pricing loan and deposit products than us in order to obtain a larger share of the market.
The COVID-19 pandemic has adversely impacted the global and national economy and certain industries and geographies in which our customers reside and operate. Because of its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 pandemic on the Company and its customers, employees and third-party service providers.
The COVID-19 pandemic adversely impacted the global and national economy and certain industries and geographies in which our customers reside and operate. Because of its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 pandemic on the Company and its customers, employees and third-party service providers.
Our board of directors is authorized to cause us to issue additional common stock, as well as classes or series of preferred stock, generally without any action on the part of the stockholders.
Our board of directors is authorized to cause us to issue additional shares of common stock, as well as classes or series of preferred stock, generally without any action on the part of the stockholders.
If any of these risks occur, it could result in material adverse consequences for us. 53 Table of Contents We continually encounter technological change, and we may have fewer resources than many of our competitors to continue to invest in technological improvements. The financial services industry is undergoing rapid technological changes, with frequent introductions of new technology-driven products and services.
If any of these risks occur, it could result in material adverse consequences for us. 55 Table of Contents We continually encounter technological change, and we may have fewer resources than many of our competitors to continue to invest in technological improvements. The financial services industry is undergoing rapid technological changes, with frequent introductions of new technology-driven products and services.
The market value of our common stock will likely continue to fluctuate in response to a number of factors including the following, most of which are beyond our control, as well as the other factors described in this “Risk Factors” section: ● actual or anticipated quarterly fluctuations in our operating and financial results; ● developments related to investigations, proceedings or litigation that involve us; ● changes in financial estimates and recommendations by financial analysts; ● dispositions, acquisitions and financings; ● actions of our current stockholders, including sales of common stock by existing stockholders and our directors and executive officers; ● fluctuations in the stock price and operating results of our competitors; ● regulatory developments; and ● other developments related to the financial services industry.
The market value of our common stock will likely continue to fluctuate in response to a number of factors including the following, most of which are beyond our control, as well as the other factors described in this “Risk Factors” section: ● actual or anticipated quarterly fluctuations in our operating and financial results; ● developments related to investigations, proceedings or litigation that involve us; ● changes in financial estimates and recommendations by financial analysts; ● dispositions, acquisitions and financings; 57 Table of Contents ● actions of our current stockholders, including sales of common stock by existing stockholders and our directors and executive officers; ● fluctuations in the stock price and operating results of our competitors; ● regulatory developments; and ● other developments related to the financial services industry.
Threats to information security also exist in the processing of client information through various other vendors and their personnel. 54 Table of Contents The occurrence of any systems failure or interruption could damage our reputation and result in a loss of clients and business, or could expose us to legal liability.
Threats to information security also exist in the processing of client information through various other vendors and their personnel. 56 Table of Contents The occurrence of any systems failure or interruption could damage our reputation and result in a loss of clients and business, or could expose us to legal liability.
As of December 31, 2022, we had outstanding $25.8 million aggregate principal amount of junior subordinated debt securities issued in connection with the sale of trust preferred securities by one of our subsidiaries that is a statutory business trust. We have also guaranteed those trust preferred securities.
As of December 31, 2023, we had outstanding $25.8 million aggregate principal amount of junior subordinated debt securities issued in connection with the sale of trust preferred securities by one of our subsidiaries that is a statutory business trust. We have also guaranteed those trust preferred securities.
In addition to the Turner family members, we are aware of other beneficial owners of more than five percent of the outstanding shares of our common stock. One of these beneficial owners is also a director of the Company. As of December 31, 2022, one of the Company’s directors, Earl A.
In addition to the Turner family members, we are aware of other beneficial owners of more than five percent of the outstanding shares of our common stock. One of these beneficial owners is also a director of the Company. As of December 31, 2023, one of the Company’s directors, Earl A.
Any increase in our allowance for credit losses or loan charge-offs as required by these regulatory authorities might have a material adverse effect on our financial condition and results of operations. 49 Table of Contents Risks Relating to Market Interest Rates We may be adversely affected by interest rate changes. Our earnings are largely dependent upon our net interest income.
Any increase in our allowance for credit losses or loan charge-offs as required by these regulatory authorities might have a material adverse effect on our financial condition and results of operations. Risks Relating to Market Interest Rates We may be adversely affected by interest rate changes. Our earnings are largely dependent upon our net interest income.
This integration process is complicated and time consuming and can also be disruptive to the customers of the acquired business.
This integration process is complicated and time consuming and can be disruptive to the customers of the acquired business.
We have experienced times during which acquisitions could not be made in specific markets at prices our management considered acceptable and expect that we will experience this condition in the future in one or more markets; ● The acquisition of other entities generally requires integration of systems, procedures and personnel of the acquired entity in order to make the transaction economically feasible.
We have experienced times during which acquisitions could not be made in specific markets at prices our management considered acceptable and expect that we will experience this condition in the future in one or more markets; 53 Table of Contents ● The acquisition of other entities generally requires integration of systems, procedures and personnel of the acquired entity in order to make the transaction economically feasible.
Management has established underwriting and monitoring criteria to help minimize the inherent risks of commercial real estate construction lending. However, there is no guarantee that these controls and procedures will reduce losses on this type of lending.
Management has established underwriting and monitoring criteria to help minimize the inherent risks of commercial real estate construction lending. However, there is no guarantee that these criteria will reduce losses on this type of lending.
Commercial and other residential (multi-family) lending typically involves higher loan principal amounts and the repayment of these loans generally is dependent, in large part, on the successful operation of the property securing the loan or the business conducted on the property securing the loan.
Commercial real estate and other residential (multi-family) lending typically involves higher loan principal amounts and the repayment of these loans generally is dependent, in large part, on the successful operation of the property securing the loan or the business conducted on the property securing the loan.
These alternative funding sources may include the utilization of existing lines of credit with third party banks or the Federal Reserve Bank along with seeking other lines of credit, borrowing under repurchase agreement lines, increasing deposit rates to attract additional funds, accessing additional brokered deposits, or selling loans or investment 51 Table of Contents securities in order to maintain adequate levels of liquidity.
These alternative funding sources may include the utilization of existing lines of credit with third party banks or the Federal Reserve Bank along with seeking other lines of credit, borrowing under repurchase agreement lines, increasing deposit rates to attract additional funds, accessing additional brokered deposits, or selling loans or investment securities in order to maintain adequate levels of liquidity.
For example, using their collective voting power, these stockholders may be able to affect the outcome of director elections or block significant transactions, such as a merger or acquisition, or any other matter that might otherwise be favored by other stockholders. ​ ITEM 1B. UNRESOLVED STAFF COMMENTS None. ​ 58 Table of Contents
For example, using their collective voting power, these stockholders may be able to affect the outcome of director elections or block significant transactions, such as a merger or acquisition, or any other matter that might otherwise be favored by other stockholders. ​ ITEM 1B. UNRESOLVED STAFF COMMENTS None. ​
Accordingly, if you acquire beneficial ownership of more than 10.0% of the outstanding shares of our common stock, your voting rights with respect to the common stock will not be commensurate with your economic interest in the Company. 57 Table of Contents Anti-takeover provisions could adversely impact our stockholders.
Accordingly, if you acquire beneficial ownership of more than 10.0% of the outstanding shares of our common stock, your voting rights with respect to the common stock will not be commensurate with your economic interest in the Company. Anti-takeover provisions could adversely impact our stockholders.
Any of these occurrences could have a material adverse effect on our results of operations. Our controls and procedures may be ineffective. We regularly review and update our internal controls, disclosure controls and procedures and corporate governance policies and procedures. As a result, we may incur increased costs to maintain and improve our controls and procedures.
Any of these occurrences could have a material adverse effect on our business, financial condition and results of operations. Our controls and procedures may be ineffective. We regularly review and update our internal controls, disclosure controls and procedures and corporate governance policies and procedures. As a result, we may incur increased costs to maintain and improve our controls and procedures.
Real estate values can also be affected by governmental rules or policies and, as noted in the next risk factor, natural disasters. Inflationary pressures and rising prices may affect our results of operations and financial condition. Inflation has risen sharply since the end of 2021 to levels not seen in more than 40 years.
Real estate values can also be affected by governmental rules or policies and, as noted below, natural disasters. Inflationary pressures and rising prices may affect our results of operations and financial condition. Inflation has risen sharply since the end of 2021 to levels not seen in more than 40 years.
If we cannot raise additional capital when needed or desired, our ability to further expand our operations through internal growth and acquisitions could be materially impaired and our financial condition and liquidity could be materially adversely affected. 52 Table of Contents Risks Relating to Competition Our future success is dependent on our ability to compete effectively in the highly competitive banking industry.
If we cannot raise additional capital when needed or desired, our ability to further expand our operations through internal growth and acquisitions could be materially impaired and our financial condition and liquidity could be materially adversely affected. Risks Relating to Competition Our future success is dependent on our ability to compete effectively in the highly competitive banking industry.
Furthermore, a prolonged period of inflation could cause wages and other costs to the Company to increase, which could adversely affect our results of operations and financial condition. The economic impact of the COVID-19 pandemic could continue to adversely affect us.
Furthermore, a prolonged period of inflation could cause wages and other costs to the Company to increase, which could adversely affect our results of operations and financial condition. The economic impact of the COVID-19 pandemic, or similar crises, could continue to adversely affect us.
Because of the increased risks related to these types of loans, we may determine it necessary to increase the level of our provision for credit losses. Increased provisions for credit losses would adversely impact our operating results. See “Item 1.
Because of the increased risks related to 50 Table of Contents these types of loans, we may determine it necessary to increase the level of our provision for credit losses. Increased provisions for credit losses would adversely impact our operating results. See “Item 1.
Our ability to borrow could also be impaired by factors that are not specific to us, such as severe disruption of the financial markets or negative news and expectations about the prospects for the financial services industry as a whole. Our operations may depend upon our continued ability to access brokered deposits and Federal Home Loan Bank advances.
Our ability to borrow could also be impaired by factors that are not specific to us, such as severe disruption of the financial markets or negative news and expectations about the prospects for the financial services industry as a whole. ​ 52 Table of Contents Our operations may depend upon our continued ability to access brokered deposits, Federal Home Loan Bank advances and Federal Reserve Bank borrowings.
Should we be required by regulatory authorities or otherwise elect to raise additional capital, we may seek to do so through the issuance of, among other things, our common stock or securities convertible into our common stock, which could dilute your ownership interest in the Company.
Should we be required by regulatory authorities or otherwise elect to raise additional capital, we may seek to do so through the issuance of, among other things, our common stock or securities convertible into our common stock, which could dilute an existing stockholder’s ownership interest in the Company.
Steinert, beneficially owned 939,596 shares of our common stock (excluding 5,000 shares underlying stock options exercisable as of or within 60 days after that date), representing approximately 7.7% of total shares outstanding.
Steinert, beneficially owned 939,596 shares of our common stock (excluding 7,000 shares underlying stock options exercisable as of or within 60 days after that date), representing approximately 8.0% of total shares outstanding.
Since our business is primarily concentrated in Missouri, Iowa, Kansas and Minnesota, a significant downturn in these state or local economies, particularly in the St. Louis and Springfield, Missouri areas, may adversely affect our business. We also have originated a significant dollar amount of loans in Texas and Oklahoma from our commercial loan offices in Dallas and Tulsa.
Since our business is primarily concentrated in Missouri, Iowa, Kansas and Minnesota, a significant downturn in these state or local economies, particularly in the St. Louis and Springfield, Missouri areas, may adversely affect our business. We also have originated a significant dollar amount of loans in Texas from our commercial loan production office in Dallas.
With a population of approximately 475,000, the Greater Springfield area is the third largest metropolitan area in Missouri.
With a population of approximately 485,000, the greater Springfield area is the third largest metropolitan area in Missouri.
We could be subject to a number of risks as the result of the COVID-19 pandemic, any of which could have a material adverse effect on our business, financial condition, liquidity and results of operations.
We could be subject to a number of risks as the result of the COVID-19 pandemic, or other similar crises, any of which could have a material adverse effect on our business, financial condition, liquidity and results of operations.
Our commercial and other residential (multi-family) construction, commercial real estate, other residential (multi-family) and other commercial loans accounted for approximately 76.0% of our total loan portfolio as of December 31, 2022. Generally, we consider these types of loans to involve a higher degree of risk compared to first mortgage loans on one- to four-family, owner-occupied residential properties.
Our commercial and other residential (multi-family) construction, commercial real estate, other residential (multi-family) and other commercial loans accounted for approximately 77.1% of our total loan portfolio as of December 31, 2023. Generally, we consider these types of loans to involve a higher degree of risk compared to first mortgage loans on one- to four-family, owner-occupied residential properties.
Recently enacted, proposed and future legislation and regulations have had, will continue to have, or may have an adverse effect on our business and operations. Our success depends on our continued ability to maintain compliance with the various regulations to which we are subject.
We are subject to extensive federal and state legislation, regulation, examination and supervision. Recently enacted, proposed and future legislation and regulations have had, will continue to have, or may have an adverse effect on our business and operations. Our success depends on our continued ability to maintain compliance with the various regulations to which we are subject.
A significant downturn in these states’ economies may adversely affect our business. ​ Our lending and deposit gathering activities historically were concentrated primarily in the Springfield and southwest Missouri areas. Our success continues to depend heavily on general economic conditions in Springfield and the surrounding areas.
A significant downturn in that state’s economy may adversely affect our business. ​ Our lending and deposit gathering activities historically were concentrated primarily in the Springfield and southwest Missouri areas. Our success continues to depend heavily on general economic conditions in Springfield and the surrounding areas.
In more recent years, we opened commercial loan production offices in Atlanta, Chicago and Denver, and in 2022 we opened commercial loan production offices in Phoenix and Charlotte, North Carolina. We expect loan growth in these offices to result in significant loan balances secured by properties located in Georgia, Illinois, Colorado, Arizona and North Carolina.
In recent years, we have opened commercial loan production offices in Atlanta, Chicago and Denver, and in 2022 we opened commercial loan production offices in Phoenix and Charlotte, North Carolina. We expect loans originated through these offices to result in significant loan balances secured by properties located in Georgia, Illinois, Colorado, Arizona and North Carolina.
As of December 31, 2022, they also collectively beneficially owned approximately 2,106,096 shares of the Company’s common stock (excluding 69,250 shares underlying stock options exercisable as of or within 60 days after that date), representing approximately 17.2% of total shares outstanding, though they are subject to the voting limitation provision in our charter which precludes any person or group with beneficial ownership in excess of 10% of total shares outstanding from voting shares in excess of that threshold.
As of December 31, 2023, they also collectively beneficially owned approximately 2,108,835 shares of the Company’s common stock (excluding 85,876 shares underlying stock options exercisable as of or within 60 days after that date), representing approximately 17.9% of total shares outstanding, though they are subject to the voting limitation provision in our charter which precludes any person or group with beneficial ownership in excess of 10% of total shares outstanding from voting shares in excess of that threshold.
In addition, a substantial portion of our loans (approximately 63% of our total loan portfolio as of December 31, 2022) have adjustable rates of interest.
In addition, a substantial portion of our loans (approximately 61% of our total loan portfolio as of December 31, 2023) have adjustable rates of interest.
Our brokered deposits and term FHLBank advances totaled $411.5 million and $-0- at December 31, 2022, compared with $67.4 million and $-0- at December 31, 2021. We had overnight borrowings from the FHLBank of $88.5 million and $-0- at December 31, 2022 and 2021, respectively.
Our brokered deposits and term FHLBank advances totaled $661.5 million and $-0- at December 31, 2023, compared with $411.5 million and $-0- at December 31, 2022. We had overnight borrowings from the FHLBank of $251.0 million and $88.5 million at December 31, 2023 and 2022, respectively.
At December 31, 2022, approximately $327.5 million of our loan portfolio consisted of loans to borrowers in or secured by properties in the Springfield metropolitan area. ​ In addition to the concentrations in the southwest Missouri area, we now have our largest concentration of loans to borrowers in or secured by properties in the St. Louis metropolitan area.
At December 31, 2023, approximately $354.8 million, or 7.6%, of our loan portfolio consisted of loans to borrowers in or secured by properties in the Springfield metropolitan area. ​ In addition to the concentrations in the southwest Missouri area, we now have our largest concentration of loans to borrowers in or secured by properties in the St. Louis metropolitan area.
At December 31, 2022, including completed projects and those under construction, we had $1.32 billion of loans secured by apartments, $328.6 million of loans secured by retail-related projects, $306.8 million of loans secured by warehouse facilities, $282.9 million of loans secured by healthcare facilities, $275.2 million of loans secured by motels/hotels and $256.6 million of loans secured by office facilities, which are particularly sensitive to certain risks, including the following: ● large loan balances owed by a single borrower; ● payments that are dependent on the successful operation of the project; and ● loans that are more directly impacted by adverse conditions in the real estate market or the economy generally.
At December 31, 2023, including completed projects and those under construction, we had $1.50 billion of loans secured by apartments, $319.2 million of loans secured by retail-related projects, $291.8 million of loans secured by warehouse facilities, $287.3 million of loans secured by healthcare facilities, $254.6 million of loans secured by motels/hotels and $215.0 million of loans secured by office facilities, which are particularly sensitive to certain risks, including the following: ● large loan balances owed by a single borrower; ● payments that are dependent on the successful operation of the project; and ● loans that are more directly impacted by adverse conditions in the real estate market or the economy generally.
We continually monitor changes in key regional and national economic factors because changes in these factors can impact our residential and commercial construction loan portfolio and the ability of our borrowers to repay their loans.
The overall credit quality of our construction loan portfolio is impacted by trends in real estate values. We continually monitor changes in key regional and national economic factors because changes in these factors can impact our residential and commercial construction loan portfolio and the ability of our borrowers to repay their loans.
At December 31, 2022, approximately $392.8 million and $175.2 million of our loan portfolio consisted of loans primarily for various types of commercial real estate in the States of Texas and Oklahoma, respectively. 46 Table of Contents With the FDIC-assisted transactions that were completed in 2009-2014, we now have additional concentrations of loans in Western, Eastern and Central Iowa and in the Minneapolis metropolitan area.
At December 31, 2023, approximately $502.0 million, or 10.8%, of our loan portfolio consisted of loans primarily for various types of commercial real estate in Texas. With the FDIC-assisted transactions that were completed in 2009-2014, we have additional concentrations of loans in the Minneapolis metropolitan area and in Western, Eastern and Central Iowa.
At December 31, 2022, approximately $814.1 million of our loan portfolio consisted of loans for apartments, industrial revenue bonds and other types of commercial properties in the St. Louis metropolitan area. Also, we have a significant amount of loans to borrowers in or secured by properties in Texas and Oklahoma.
At December 31, 2023, approximately $788.6 million, or 16.9%, of our loan portfolio consisted of loans for apartments and other types of commercial real estate properties in the St. Louis metropolitan area. Also, we have a significant amount of loans to borrowers in or secured by properties in Texas.
The shares that can be voted by the Turner family members (1,223,129 shares as of December 31, 2022, per the ten percent voting limitation in our charter) and the shares beneficially owned by Mr. Steinert (939,596) total 2,162,725, representing approximately 17.7% of total shares outstanding.
The shares that can be voted by the Turner family members (1,180,443 shares as of December 31, 2023, per the ten percent voting limitation in our charter) and the shares beneficially owned by Mr. Steinert (939,596) total 2,120,039, representing approximately 18.0% of total shares outstanding.
If we issue preferred stock in the future that has a preference over the common stock with respect to the payment of dividends or upon liquidation, dissolution or winding-up, or if we issue preferred stock with voting rights that dilute the voting power of the common stock, the rights of holders of the common stock or the market value of the common stock could be adversely affected. 56 Table of Contents Regulatory and contractual restrictions may limit or prevent us from paying dividends on and repurchasing our common stock.
If we issue preferred stock in the future that has a preference over the common stock with respect to the payment of dividends or upon liquidation, dissolution or winding-up, or if we issue preferred stock with voting rights that dilute the voting power of the common stock, the rights of holders of the common stock or the market value of the common stock could be adversely affected.
Small to medium-sized businesses may be impacted more during periods of high inflation, as they are not able to leverage economics of scale to mitigate cost pressures compared to larger businesses.
In the second half of 2023, inflation measures moderated but are still higher than levels targeted by the FRB. Small to medium-sized businesses may be impacted more during periods of high inflation, as they are not able to leverage economics of scale to mitigate cost pressures compared to larger businesses.
Great Southern Bancorp, Inc. is an entity separate and distinct from its principal subsidiary, Great Southern Bank, and derives substantially all of its revenue in the form of dividends from that subsidiary.
Regulatory and contractual restrictions may limit or prevent us from paying dividends on and repurchasing our common stock. Great Southern Bancorp, Inc. is an entity separate and distinct from its principal subsidiary, Great Southern Bank, and derives substantially all of its revenue in the form of dividends from that subsidiary.
For example, if the Bank’s regulatory capital ratios declined below the “well-capitalized” status, banking regulators would require the Bank to obtain their approval prior to obtaining or renewing brokered deposits. The regulators might not approve our acceptance of brokered deposits in amounts that we desire or at all.
Bank regulators can restrict our access to these sources of funds in certain circumstances. For example, if the Bank’s regulatory capital ratios declined below the “well-capitalized” status, banking regulators would require the Bank to obtain their approval prior to obtaining or renewing brokered deposits.
Specifically, under regulations adopted by the Federal Reserve Board, (a) any other bank holding company may be required to obtain the approval of the Federal Reserve Board to acquire or retain 5% or more of our common stock and (b) any person other than a bank holding company may be required to obtain the approval of the Federal Reserve Board to acquire or retain 10% or more of our common stock.
Specifically, under regulations adopted by the Federal Reserve Board, (a) any other bank holding company may be required to obtain the approval of the Federal Reserve Board to acquire or retain 5% or more of our common stock and (b) any person other than a bank holding company may be required to obtain the approval of the Federal Reserve Board to acquire or retain 10% or more of our common stock. 59 Table of Contents These provisions may discourage potential takeover attempts, discourage bids for our common stock at a premium over market price or adversely affect the market price of, and the voting and other rights of the holders of, our common stock.
If we defer payments of interest on our outstanding junior subordinated debt securities or if certain defaults relating to those debt securities occur, we will be prohibited from declaring or paying dividends or distributions on, and from making liquidation payments with respect to, our common stock.
Although we have historically paid cash dividends on our common stock, we are not required to do so and our board of directors could reduce, suspend or eliminate our common stock cash dividend in the future. 58 Table of Contents If we defer payments of interest on our outstanding junior subordinated debt securities or if certain defaults relating to those debt securities occur, we will be prohibited from declaring or paying dividends or distributions on, and from making liquidation payments with respect to, our common stock.
In recent years, governments 47 Table of Contents across the world have entered into international agreements relating to climate change. The U.S. Congress, state legislatures and federal and state regulatory agencies have continued to propose and advance numerous legislative and regulatory initiatives seeking to mitigate the effects of climate change.
Congress, state legislatures and federal and state regulatory agencies have continued to propose and advance numerous legislative and regulatory initiatives seeking to mitigate the effects of climate change.
If Great Southern were to cease meeting these conditions, our access to FHLBank advances could be significantly reduced or eliminated. Certain Federal Home Loan Banks, including the Federal Home Loan Bank of Des Moines, have experienced lower earnings from time to time and paid out lower dividends to their members.
Certain Federal Home Loan Banks, including the Federal Home Loan Bank of Des Moines, have experienced lower earnings from time to time and paid out lower dividends to their members.
Factors beyond our control can significantly influence the fair value of securities in our investment securities portfolio and can cause potential adverse changes to the fair value of these securities.
For additional information, see Item 7A. “Quantitative and Qualitative Disclosures About Market Risk.” The fair value of our investment securities can fluctuate due to market conditions outside of our control. Factors beyond our control can significantly influence the fair value of securities in our investment securities portfolio and can cause potential adverse changes to the fair value of these securities.
There is no assurance that our business continuity and disaster recovery program can adequately mitigate these risks. Such events could also affect the stability of our deposit base, cause significant property damage, adversely affect our employees, adversely impact the values of collateral securing our loans and/or interfere with our borrowers’ abilities to repay their debt obligations to us.
Such events could also affect the stability of our deposit base, cause significant property damage, adversely affect our employees, adversely impact the values of collateral securing our loans and/or interfere with our borrowers’ abilities to repay their debt obligations to us. ​ 49 Table of Contents Climate change and related legislative and regulatory initiatives may result in operational changes and expenditures that could significantly impact our business.
If we are required to materially increase our allowance for credit losses, it may negatively impact our financial condition and results of operations. 55 Table of Contents Risks Relating to our Common Stock The price of our common stock may fluctuate significantly, and this may make it difficult for you to resell our common stock when you want or at prices you find attractive.
Risks Relating to our Common Stock The price of our common stock may fluctuate significantly, and this may make it difficult for you to resell our common stock when you want or at prices you find attractive. We cannot predict how our common stock will trade in the future.
Management’s Discussion of Financial Condition and Results of Operations – Non-performing Assets” in this Report. 48 Table of Contents A slowdown in the residential or commercial real estate markets may adversely affect our earnings and liquidity position. The overall credit quality of our construction loan portfolio is impacted by trends in real estate values.
Business-The Company-Lending Activities-Commercial Real Estate and Construction Lending,” “-Other Commercial Lending,” “-Residential Real Estate Lending” and “-Allowance for Losses on Loans and Foreclosed Assets” and “Item 7. Management’s Discussion of Financial Condition and Results of Operations – Non-performing Assets” in this Report. A slowdown in the residential or commercial real estate markets may adversely affect our earnings and liquidity position.
Climate change and related legislative and regulatory initiatives may result in operational changes and expenditures that could significantly impact our business. The current and anticipated effects of climate change are creating an increasing level of concern for the state of the global environment. As a result, political and social attention to the issue of climate change has increased.
The current and anticipated effects of climate change are creating an increasing level of concern for the state of the global environment. As a result, political and social attention to the issue of climate change has increased. In recent years, governments across the world have entered into international agreements relating to climate change. The U.S.
We also experience competition from a variety of institutions outside of our market areas. Some of these institutions conduct business primarily over the Internet and may thus be able to realize certain cost savings and offer products and services at more favorable rates and with greater convenience to the customer.
Some of these institutions conduct business primarily over the Internet and may thus be able to realize certain cost savings and offer products and services at more favorable rates and with greater convenience to the customer. 54 Table of Contents Risks Relating to Regulation Our business may be adversely affected by the highly regulated environment in which we operate, including the various capital adequacy guidelines we are required to meet.
At December 31, 2022, the Bank owned $10.1 million of stock in the FHLBank of Des Moines, which declared and paid an annualized dividend approximating 7.25% during the fourth quarter of 2022. The FHLBank of Des Moines may eliminate or reduce dividend payments at any time in the future in order for it to maintain or restore its retained earnings.
At December 31, 2023, the Bank owned $14.7 million of stock in the FHLBank of Des Moines, which declared and paid an annualized dividend approximating 8.50% during the fourth quarter of 2023.
In addition, bank regulators periodically review our allowance for credit losses and may require us to increase our provision for credit losses or recognize further loan charge-offs.
Additionally, the allowance for credit losses considers other qualitative factors not included in historical loss rates or macroeconomic forecast such as changes in portfolio composition, underwriting practices, or significant unique events or conditions. 51 Table of Contents In addition, bank regulators periodically review our allowance for credit losses and may require us to increase our provision for credit losses or recognize further loan charge-offs.
Risks Relating to Future Growth Our strategy of pursuing acquisitions exposes us to financial, execution and operational risks that could adversely affect us.
The FHLBank of Des Moines may eliminate or reduce dividend payments at any time in the future in order for it to maintain or restore its retained earnings, which would negatively affect our results of operations. Risks Relating to Future Growth Our strategy of pursuing acquisitions exposes us to financial, execution and operational risks that could adversely affect us.
We expect to continue to utilize FHLBank advances and overnight borrowings and brokered deposits from time to time as a supplemental funding source. Bank regulators can restrict our access to these sources of funds in certain circumstances.
We expect to continue to utilize FHLBank advances and overnight borrowings and brokered deposits from time to time as a supplemental funding source. Additionally, we have approved collateralized borrowing lines with the FRBSTL. In January 2024, the Bank borrowed $180.0 million under the Federal Reserve Bank’s BTFP.
The contractual term excludes expected extensions, renewals and modifications unless there is a reasonable expectation that a troubled debt restructuring will be executed. Additionally, the allowance for credit losses considers other qualitative factors not included in historical loss rates or macroeconomic forecast such as changes in portfolio composition, underwriting practices, or significant unique events or conditions.
The contractual term excludes expected extensions, renewals and modifications unless there is a reasonable expectation that a modification will be executed.
Removed
Business-The Company-Lending Activities-Commercial Real Estate and Construction Lending,” “-Other Commercial Lending,” “-Residential Real Estate Lending” and “-Allowance for Losses on Loans and Foreclosed Assets” and “Item 7.
Added
At December 31, 2023, approximately $401.1 million, or 8.6%, and $279.2 million, or 6.0%, of our loan portfolio consisted of loans primarily for various types of commercial real estate in Minnesota 48 Table of Contents and Iowa, respectively.
Removed
For additional information, see Item 7A. “Quantitative and Qualitative Disclosures About Market Risk.” The replacement of the LIBOR benchmark interest rate may adversely affect us. Certain loans made by us and financing extended to us are made at variable rates that use LIBOR as a benchmark for establishing the interest rate.
Added
There is no assurance that our business continuity and disaster recovery program can adequately mitigate these risks.
Removed
We also have investments, interest rate derivatives and borrowings that reference LIBOR. On July 27, 2017, the United Kingdom’s Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021.
Added
The borrowing, which matures in January 2025 and has a fixed interest rate of 4.83%, may be repaid in full or in part without penalty prior to its stated maturity date. The line is secured primarily by the Bank’s held-to-maturity investment securities, with assets pledged totaling approximately $191 million.
Removed
On November 30, 2020, the ICE Benchmark Administration announced its plan to extend the date most U.S. dollar LIBOR values would cease being computed to June 30, 2023.
Added
The regulators might not approve our acceptance of brokered deposits in amounts that we desire or at all. In addition, the availability of brokered deposits and the rates paid on these brokered deposits may be volatile as the balance of the supply of and the demand for brokered deposits changes.
Removed
On the same date, the FRB, FDIC and OCC issued a joint statement encouraging banks to cease entering into new contracts that use U.S. dollar LIBOR as a reference rate and no later than December 31, 2021. U.S. banking regulators subsequently said that use of U.S.
Added
We also experience competition from a variety of institutions outside of our market areas.
Removed
Dollar LIBOR as a reference rate in new contracts after December 31, 2021 would create safety and soundness risks, including litigation, operational and consumer protection risks. Since 2019, the Company has included robust fallback language in its loan documents that allow for an orderly transition from LIBOR to another specified index upon cessation of the LIBOR indices.
Added
We currently exceed thresholds defined in interagency guidance on commercial real estate concentrations, and as such, we may incur additional expense or slow the growth of certain categories of commercial real estate lending. The federal banking agencies have issued guidance on sound risk management practices for concentrations in commercial real estate lending (see “Item 1.
Removed
Some loans remaining that were originated before 2019 do not contain this robust fallback language. At December 31, 2022, the Company had approximately 29 commercial loans totaling approximately $49 million of such loans tied to LIBOR indices; however, only 24 of those loans, totaling $40 million, mature after June 2023.
Added
Business-- Government Supervision and Regulation-Guidance on Commercial Real Estate Concentrations”). For purposes of this guidance, “commercial real estate” includes, among other types, other residential (multi-family) loans and non-owner occupied nonresidential loans, two categories which have been a source of loan growth for the Company.
Removed
The Company also has a portfolio of residential mortgage loans tied to LIBOR indices with standard index replacement language included (approximately $359 million at December 31, 2022), and that portfolio is being monitored for potential changes that may be facilitated by the mortgage industry.
Added
A bank that has experienced rapid growth in commercial real estate lending, has notable exposure to a specific type of commercial real estate loan, or is approaching or exceeding the following supervisory criteria may be identified for further supervisory analysis with respect to real estate concentration risk: total loans for construction land development and other land representing 100% or more of the bank’s tier 1 regulatory capital plus the allowance for loan losses includable in total regulatory capital; or total commercial real estate loans (as defined in the guidance) that exceed 300% of the bank’s tier 1 regulatory capital plus the allowance for loan losses includable in total regulatory capital and the bank’s commercial real estate portfolio has increased by 50% or more during the prior 36 months.
Removed
In the United States, efforts to identify a set of alternative U.S. dollar reference interest rates have progressed, and the Alternative Reference Rates Committee (ARRC) has recommended the use of a Secured Overnight Funding Rate (SOFR). SOFR is different from LIBOR in that it is a backward-looking secured rate rather than a forward-looking unsecured rate.
Added
Our total commercial real estate loans exceeded the 300% threshold at December 31, 2023. We may see our non-owner occupied commercial real estate lending grow as a percentage of total regulatory capital, or we may slow the growth of this type of lending activity.
Removed
These differences could lead to a greater disconnect between our costs to raise funds for SOFR as compared to LIBOR.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe aggregate net book value of the Company’s premises and equipment was $141.1 million and $132.7 million at December 31, 2022 and 2021, respectively. See also Note 6 of the accompanying audited financial statements, which are included in Item 8 of this Report. ​
Biggest changeThe aggregate net book value of the Company’s premises and equipment was $138.6 million and $141.1 million at December 31, 2023 and 2022, respectively. See also Note 6 of the accompanying audited financial statements, which are included in Item 8 of this Report. ​
Louis and Kansas City, Missouri metropolitan areas. The ATMs are located at various banking centers and primarily convenience stores and retail centers located throughout southwest and central Missouri. At December 31, 2022, the Company also operated eight commercial loan production offices and one mortgage loan production office.
Louis and Kansas City, Missouri metropolitan areas. The ATMs are located at various banking centers and primarily convenience stores and retail centers located throughout southwest and central Missouri. At December 31, 2023, the Company also operated eight commercial loan production offices and one mortgage loan production office.
Of the 92 banking centers, the Company owns 87 of its locations and five were leased for various terms. The majority of our banking center locations are in southwest and central Missouri, including the Springfield, Missouri metropolitan area, with additional concentrations in the Sioux City, Iowa; Des Moines, Iowa; Quad Cities, Iowa; Minneapolis; St.
Of the 91 banking centers, the Company owns 87 of its locations and four were leased for various terms. The majority of our banking center locations are in southwest and central Missouri, including the Springfield, Missouri metropolitan area, with additional concentrations in the Sioux City, Iowa; Des Moines, Iowa; Quad Cities, Iowa; Minneapolis; St.
ITEM 2. PROPERTIES. ​ The Company’s corporate offices and operations center are located in Springfield, Missouri. At December 31, 2022, the Company operated 92 retail banking centers and over 200 automated teller machines (“ATMs”) in Missouri, Iowa, Minnesota, Kansas, Nebraska and Arkansas.
ITEM 2. PROPERTIES. ​ The Company’s corporate offices and operations center are located in Springfield, Missouri. At December 31, 2023, the Company operated 90 retail banking centers and over 200 automated teller machines (“ATMs”) in Missouri, Iowa, Minnesota, Kansas, Nebraska and Arkansas.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile the ultimate outcome of such legal proceedings cannot be predicted with certainty, after reviewing pending and threatened litigation with counsel, management currently believes that the outcome of such litigation will not have a material adverse effect on the Company’s business, financial condition or results of operations. ​ ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ​
Biggest changeWhile the ultimate outcome of such legal proceedings cannot be predicted with certainty, after reviewing pending and threatened litigation with counsel, management currently believes that the outcome of such litigation will not have a material adverse effect on the Company’s business, financial condition or results of operations. ​ ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ​ 61 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs indicated below, the Company repurchased the following shares of its common stock during the three months ended December 31, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number Maximum ​ ​ ​ ​ ​ ​ ​ of Shares ​ Number of ​ ​ Total Number ​ ​ Average ​ Purchased as ​ Shares that May ​ ​ of Shares ​ ​ Price ​ Part of Publicly ​ Yet Be Purchased ​ ​ Purchased ​ ​ Per Share ​ Announced Program ​ Under the Program (1) October 1, 2022 – October 31, 2022 44,218 $ 58.592 44,218 177,334 November 1, 2022 – November 30, 2022 — ​ — — 177,334 December 1, 2022 – December 31, 2022 — ​ — — 177,334 ​ 44,218 ​ 58.592 44,218 ​ ​ (1) Amount represents the number of shares available to be repurchased under the then-current program as of the last calendar day of the month shown. 60 Table of Contents ITEM 6.
Biggest changeAs indicated below, the Company repurchased the following shares of its common stock during the three months ended December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Number Maximum ​ ​ ​ ​ ​ ​ ​ of Shares ​ Number of ​ ​ Total Number ​ ​ Average ​ Purchased as ​ Shares that May ​ ​ of Shares ​ ​ Price ​ Part of Publicly ​ Yet Be Purchased ​ ​ Purchased ​ ​ Per Share ​ Announced Program ​ Under the Program (1) October 1, 2023 – October 31, 2023 69,400 $ 48.308 69,400 731,812 November 1, 2023 – November 30, 2023 4,100 ​ 49.979 4,100 727,712 December 1, 2023 – December 31, 2023 — ​ — — 727,712 ​ 73,500 ​ 48.402 73,500 ​ ​ (1) Amount represents the number of shares available to be repurchased under the then-current program as of the last calendar day of the month shown. 63 Table of Contents ITEM 6.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information The Company’s common stock is listed on The NASDAQ Global Select Market under the symbol “GSBC.” As of December 31, 2022, there were 12,231,290 total shares of common stock outstanding and approximately 2,000 stockholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information The Company’s common stock is listed on The NASDAQ Global Select Market under the symbol “GSBC.” As of December 31, 2023, there were 11,804,430 total shares of common stock outstanding and approximately 2,000 stockholders of record.
Business – Government Supervision and Regulation – Dividends.” Stock Repurchases On October 21, 2020, the Company’s Board of Directors authorized management to repurchase up to 1,000,000 shares of the Company’s outstanding common stock, under a program of open market purchases or privately negotiated transactions. The Company completed this repurchase program in the first quarter of 2022.
Business – Government Supervision and Regulation – Dividends.” Stock Repurchases On January 19, 2022, the Company’s Board of Directors authorized management to repurchase up to 1,000,000 shares of the Company’s outstanding common stock, under a program of open market purchases or privately negotiated transactions.
On January 19, 2022, the Company’s Board of Directors authorized management to repurchase up to 1,000,000 shares of the Company’s outstanding common stock, under a program of open market purchases or privately negotiated transactions. This program does not have an expiration date.
The Company completed this repurchase program in the second quarter of 2023. 62 Table of Contents On December 21, 2022, the Company’s Board of Directors authorized management to repurchase up to 1,000,000 shares of the Company’s outstanding common stock, under a program of open market purchases or privately negotiated transactions. This program does not have an expiration date.
This program does not have an expiration date. The authorization of this program will become effective upon completion of the repurchase program authorized in January 2022 discussed above. From time to time, the Company may utilize a pre-arranged trading plan pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934 to repurchase its shares under its repurchase programs.
The authorization of this program became effective in April 2023, upon completion of the previously authorized repurchase program. From time to time, the Company may utilize a pre-arranged trading plan pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934 to repurchase its shares under its repurchase programs.
Removed
The authorization of this program became effective upon completion of the repurchase program authorized in October 2020 discussed above. On December 21, 2022, the Company’s Board of Directors authorized management to repurchase up to 1,000,000 shares of the Company’s outstanding common stock, under a program of open market purchases or privately negotiated transactions.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeITEM 6. ​ [RESERVED] ​ 61 ITEM 7. ​ MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ​ 61 ITEM 7A. ​ QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ​ 101 ITEM 8. ​ FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ​ 106
Biggest changeITEM 6. ​ [RESERVED] ​ 64 ITEM 7. ​ MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ​ 64 ITEM 7A. ​ QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ​ 103 ITEM 8. ​ FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ​ 108

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest change“Financial Statements and Supplementary Information.” Results for past periods are not necessarily indicative of results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2022 2021 2020 2019 2018 ​ (Dollars In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Summary Statement of Financial Condition Information: ​ ​ ​ ​ ​ Assets ​ $ 5,680,702 ​ $ 5,449,944 ​ $ 5,526,420 ​ $ 5,015,072 ​ $ 4,676,200 Loans receivable, net ​ 4,511,647 ​ 4,016,235 ​ 4,314,584 ​ 4,163,224 ​ 3,990,651 Allowance for credit losses on loans ​ 63,480 ​ 60,754 ​ 55,743 ​ 40,294 ​ 38,409 Available-for-sale securities ​ 490,592 ​ 501,032 ​ 414,933 ​ 374,175 ​ 243,968 Held-to-maturity securities ​ ​ 202,495 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Other real estate and repossessions, net ​ 233 ​ 2,087 ​ 1,877 ​ 5,525 ​ 8,440 Deposits ​ 4,684,910 ​ 4,552,101 ​ 4,516,903 ​ 3,960,106 ​ 3,725,007 Total borrowings and other interest- bearing liabilities ​ 366,481 ​ 238,713 ​ 339,863 ​ 412,374 ​ 397,594 Stockholders’ equity (retained earnings substantially restricted) ​ 533,087 ​ 616,752 ​ 629,741 ​ 603,066 ​ 531,977 Common stockholders’ equity ​ 533,087 ​ 616,752 ​ 629,741 ​ 603,066 ​ 531,977 Average loans receivable ​ 4,386,042 ​ 4,274,176 ​ 4,399,259 ​ 4,155,780 ​ 3,910,819 Average total assets ​ 5,519,790 ​ 5,502,356 ​ 5,323,426 ​ 4,855,007 ​ 4,503,326 Average deposits ​ 4,607,363 ​ 4,539,740 ​ 4,330,271 ​ 3,889,910 ​ 3,556,240 Average stockholders’ equity ​ 565,173 ​ 627,516 ​ 622,437 ​ 571,637 ​ 498,508 Number of deposit accounts ​ 232,688 ​ 229,942 ​ 229,470 ​ 228,247 ​ 227,240 Number of full-service offices ​ 92 ​ 93 ​ 94 ​ 97 ​ 99 ​ 61 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2022 2021 2020 2019 2018 ​ ​ (In Thousands) Summary Statement of Income Information: ​ ​ ​ ​ ​ Interest income: ​ ​ ​ ​ ​ Loans ​ $ 205,751 ​ $ 186,269 ​ $ 204,964 ​ $ 223,047 ​ $ 198,226 Investment securities and other ​ 21,226 ​ 12,404 ​ 12,739 ​ 11,947 ​ 7,723 ​ ​ 226,977 ​ 198,673 ​ 217,703 ​ 234,994 ​ 205,949 Interest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ 20,676 ​ 13,102 ​ 32,431 ​ 45,570 ​ 27,957 Federal Home Loan Bank advances ​ — ​ — ​ — ​ — ​ 3,985 Securities sold under reverse repurchase agreements ​ 324 ​ 37 ​ 31 ​ 19 ​ 31 Short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities ​ 1,066 ​ — ​ 644 ​ 3,616 ​ 734 Subordinated debentures issued to capital trust ​ 875 ​ 448 ​ 628 ​ 1,019 ​ 953 Subordinated notes ​ 4,422 ​ 7,165 ​ 6,831 ​ 4,378 ​ 4,097 ​ ​ 27,363 ​ 20,752 ​ 40,565 ​ 54,602 ​ 37,757 Net interest income ​ 199,614 ​ 177,921 ​ 177,138 ​ 180,392 ​ 168,192 Provision (credit) for credit losses on loans ​ ​ 3,000 ​ ​ (6,700) ​ ​ 15,871 ​ ​ 6,150 ​ ​ 7,150 Provision for unfunded commitments ​ 3,187 ​ 939 ​ — ​ — ​ — Net interest income after provision (credit) for credit losses and provision for unfunded commitments ​ 193,427 ​ 183,682 ​ 161,267 ​ 174,242 ​ 161,042 Non-interest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commissions ​ 1,208 ​ 1,263 ​ 892 ​ 889 ​ 1,137 Overdraft and insufficient funds fees ​ 7,872 ​ 6,686 ​ 6,481 ​ 8,249 ​ 8,688 Point-of-sale and ATM fee income and service charges ​ 15,705 ​ 15,029 ​ 12,203 ​ 12,649 ​ 13,007 Net gain on loan sales ​ 2,584 ​ 9,463 ​ 8,089 ​ 2,607 ​ 1,788 Net realized gain (loss) on sales of available-for-sale securities ​ (130) ​ — ​ 78 ​ (62) ​ 2 Late charges and fees on loans ​ 1,182 ​ 1,434 ​ 1,419 ​ 1,432 ​ 1,622 Gain (loss) on derivative interest rate products ​ 321 ​ 312 ​ (264) ​ (104) ​ 25 Gain recognized on sale of business units ​ — ​ — ​ — ​ — ​ 7,414 Other income ​ 5,399 ​ 4,130 ​ 6,152 ​ 5,297 ​ 2,535 ​ ​ 34,141 ​ 38,317 ​ 35,050 ​ 30,957 ​ 36,218 Non-interest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Salaries and employee benefits ​ 75,300 ​ 70,290 ​ 70,810 ​ 63,224 ​ 60,215 Net occupancy and equipment expense ​ 28,471 ​ 29,163 ​ 27,582 ​ 26,217 ​ 25,628 Postage ​ 3,379 ​ 3,164 ​ 3,069 ​ 3,198 ​ 3,348 Insurance ​ 3,197 ​ 3,061 ​ 2,405 ​ 2,015 ​ 2,674 Advertising ​ 3,261 ​ 3,072 ​ 2,631 ​ 2,808 ​ 2,460 Office supplies and printing ​ 867 ​ 848 ​ 1,016 ​ 1,077 ​ 1,047 Telephone ​ 3,170 ​ 3,458 ​ 3,794 ​ 3,580 ​ 3,272 Legal, audit and other professional fees ​ 6,330 ​ 6,555 ​ 2,378 ​ 2,624 ​ 3,423 Expense on other real estate and repossessions ​ 359 ​ 627 ​ 2,023 ​ 2,184 ​ 4,919 Acquired deposit intangible asset amortization ​ 768 ​ 863 ​ 1,154 ​ 1,190 ​ 1,562 Other operating expenses ​ 8,264 ​ 6,534 ​ 6,363 ​ 7,021 ​ 6,762 ​ ​ 133,366 ​ 127,635 ​ 123,225 ​ 115,138 ​ 115,310 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ 94,202 ​ 94,364 ​ 73,092 ​ 90,061 ​ 81,950 Provision for income taxes ​ 18,254 ​ 19,737 ​ 13,779 ​ 16,449 ​ 14,841 Net income ​ $ 75,948 ​ $ 74,627 ​ $ 59,313 ​ $ 73,612 ​ $ 67,109 ​ 62 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or For the Year Ended December 31, ​ 2022 2021 2020 2019 2018 ​ ​ (Number of Shares In Thousands) Per Common Share Data: ​ ​ ​ ​ ​ ​ Basic earnings per common share ​ $ 6.07 ​ $ 5.50 ​ $ 4.22 ​ $ 5.18 ​ $ 4.75 ​ Diluted earnings per common share ​ 6.02 ​ 5.46 ​ 4.21 ​ 5.14 ​ 4.71 ​ Cash dividends declared ​ 1.56 ​ 1.40 ​ 2.36 ​ 2.07 ​ 1.20 ​ Book value per common share ​ 43.58 ​ 46.98 ​ 45.79 ​ 42.29 ​ 37.59 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average shares outstanding ​ 12,517 ​ 13,558 ​ 14,043 ​ 14,201 ​ 14,132 ​ Year-end actual shares outstanding ​ 12,231 ​ 13,128 ​ 13,753 ​ 14,261 ​ 14,151 ​ Average fully diluted shares outstanding ​ 12,607 ​ 13,674 ​ 14,104 ​ 14,330 ​ 14,260 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings Performance Ratios: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on average assets(1) ​ 1.38 % 1.36 % 1.11 % 1.52 % 1.49 % Return on average stockholders’ equity(2) ​ 13.44 ​ 11.89 ​ 9.53 ​ 12.88 ​ 13.46 ​ Non-interest income to average total assets ​ 0.62 ​ 0.70 ​ 0.66 ​ 0.64 ​ 0.80 ​ Non-interest expense to average total assets ​ 2.42 ​ 2.32 ​ 2.31 ​ 2.37 ​ 2.56 ​ Average interest rate spread(3) ​ 3.59 ​ 3.22 ​ 3.23 ​ 3.62 ​ 3.75 ​ Year-end interest rate spread ​ 3.63 ​ 3.20 ​ 3.08 ​ 3.28 ​ 3.60 ​ Net interest margin(4) ​ 3.80 ​ 3.37 ​ 3.49 ​ 3.95 ​ 3.99 ​ Efficiency ratio(5) ​ 57.05 ​ 59.03 ​ 58.07 ​ 54.48 ​ 56.41 ​ Net overhead ratio(6) ​ 1.80 ​ 1.62 ​ 1.66 ​ 1.73 ​ 1.76 ​ Common dividend pay-out ratio(7) ​ 25.91 ​ 25.64 ​ 56.06 ​ 40.27 ​ 25.48 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Asset Quality Ratios (8): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses/year-end loans ​ 1.39 % 1.49 % 1.32 % 1.00 % 0.98 % Non-performing assets/year-end loans and foreclosed assets ​ 0.08 ​ 0.15 ​ 0.09 ​ 0.19 ​ 0.29 ​ Allowance for credit losses/non-performing loans ​ 1,729.69 ​ 1,120.31 ​ 1,831.86 ​ 891.66 ​ 609.67 ​ Net charge-offs/average loans ​ 0.01 ​ 0.00 ​ 0.01 ​ 0.10 ​ 0.13 ​ Gross non-performing assets/year end assets ​ 0.07 ​ 0.11 ​ 0.07 ​ 0.16 ​ 0.25 ​ Non-performing loans/year-end loans ​ 0.08 ​ 0.13 ​ 0.07 ​ 0.11 ​ 0.16 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance Sheet Ratios: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans to deposits ​ 96.30 % 88.23 % 95.52 % 105.13 % 107.13 % Average interest-earning assets as a percentage of average interest-bearing liabilities ​ 140.32 ​ 139.94 ​ 132.49 ​ 127.50 ​ 126.47 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital Ratios: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average common stockholders’ equity to average assets ​ 10.2 % 11.4 % 11.7 % 11.8 % 11.1 % Year-end tangible common stockholders’ equity to tangible assets(9) ​ 9.2 ​ 11.2 ​ 11.3 ​ 11.9 ​ 11.2 ​ Great Southern Bancorp, Inc.: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 capital ratio ​ 11.0 ​ 13.4 ​ 12.7 ​ 12.5 ​ 11.9 ​ Total capital ratio ​ 13.5 ​ 16.3 ​ 17.2 ​ 15.0 ​ 14.4 ​ Tier 1 leverage ratio ​ 10.6 ​ 11.3 ​ 10.9 ​ 11.8 ​ 11.7 ​ Common equity Tier 1 ratio ​ 10.6 ​ 12.9 ​ 12.2 ​ 12.0 ​ 11.4 ​ Great Southern Bank: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 capital ratio ​ 11.9 ​ 14.1 ​ 13.7 ​ 13.1 ​ 12.4 ​ Total capital ratio ​ 13.1 ​ 15.4 ​ 14.9 ​ 14.0 ​ 13.3 ​ Tier 1 leverage ratio ​ 11.5 ​ 11.9 ​ 11.8 ​ 12.3 ​ 12.2 ​ Common equity Tier 1 ratio ​ 11.9 ​ 14.1 ​ 13.7 ​ 13.1 ​ 12.4 ​ (1) Net income divided by average total assets.
Biggest change“Financial Statements and Supplementary Information.” Results for past periods are not necessarily indicative of results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 2021 2020 2019 ​ (Dollars In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Summary Statement of Financial Condition Information: ​ ​ ​ ​ ​ Assets ​ $ 5,812,402 ​ $ 5,680,702 ​ $ 5,449,944 ​ $ 5,526,420 ​ $ 5,015,072 Loans receivable, net ​ 4,595,469 ​ 4,511,647 ​ 4,016,235 ​ 4,314,584 ​ 4,163,224 Allowance for credit losses on loans ​ 64,670 ​ 63,480 ​ 60,754 ​ 55,743 ​ 40,294 Available-for-sale securities ​ 478,207 ​ 490,592 ​ 501,032 ​ 414,933 ​ 374,175 Held-to-maturity securities ​ ​ 195,023 ​ ​ 202,495 ​ ​ — ​ ​ — ​ ​ — Other real estate and repossessions, net ​ 23 ​ 233 ​ 2,087 ​ 1,877 ​ 5,525 Deposits ​ 4,721,708 ​ 4,684,910 ​ 4,552,101 ​ 4,516,903 ​ 3,960,106 Total borrowings and other interest- bearing liabilities ​ 423,806 ​ 366,481 ​ 238,713 ​ 339,863 ​ 412,374 Stockholders’ equity (retained earnings substantially restricted) ​ 571,829 ​ 533,087 ​ 616,752 ​ 629,741 ​ 603,066 Common stockholders’ equity ​ 571,829 ​ 533,087 ​ 616,752 ​ 629,741 ​ 603,066 Average loans receivable ​ 4,631,856 ​ 4,386,042 ​ 4,274,176 ​ 4,399,259 ​ 4,155,780 Average total assets ​ 5,719,196 ​ 5,519,790 ​ 5,502,356 ​ 5,323,426 ​ 4,855,007 Average deposits ​ 4,754,310 ​ 4,607,363 ​ 4,539,740 ​ 4,330,271 ​ 3,889,910 Average stockholders’ equity ​ 550,920 ​ 565,173 ​ 627,516 ​ 622,437 ​ 571,637 Number of deposit accounts ​ 230,697 ​ 232,688 ​ 229,942 ​ 229,470 ​ 228,247 Number of full-service offices ​ 90 ​ 92 ​ 93 ​ 94 ​ 97 ​ 64 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2023 2022 2021 2020 2019 ​ ​ (In Thousands) Summary Statement of Income Information: ​ ​ ​ ​ ​ Interest income: ​ ​ ​ ​ ​ Loans ​ $ 271,952 ​ $ 205,751 ​ $ 186,269 ​ $ 204,964 ​ $ 223,047 Investment securities and other ​ 24,883 ​ 21,226 ​ 12,404 ​ 12,739 ​ 11,947 ​ ​ 296,835 ​ 226,977 ​ 198,673 ​ 217,703 ​ 234,994 Interest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ 88,757 ​ 20,676 ​ 13,102 ​ 32,431 ​ 45,570 Securities sold under reverse repurchase agreements ​ 1,205 ​ 324 ​ 37 ​ 31 ​ 19 Short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities ​ 7,500 ​ 1,066 ​ — ​ 644 ​ 3,616 Subordinated debentures issued to capital trust ​ 1,736 ​ 875 ​ 448 ​ 628 ​ 1,019 Subordinated notes ​ 4,422 ​ 4,422 ​ 7,165 ​ 6,831 ​ 4,378 ​ ​ 103,620 ​ 27,363 ​ 20,752 ​ 40,565 ​ 54,602 Net interest income ​ 193,215 ​ 199,614 ​ 177,921 ​ 177,138 ​ 180,392 Provision (credit) for credit losses on loans ​ 2,250 ​ 3,000 ​ (6,700) ​ 15,871 ​ 6,150 Provision (credit) for unfunded commitments ​ ​ (5,329) ​ ​ 3,187 ​ ​ 939 ​ ​ — ​ ​ — Net interest income after provision (credit) for credit losses and provision (credit) for unfunded commitments ​ 196,294 ​ 193,427 ​ 183,682 ​ 161,267 ​ 174,242 Non-interest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commissions ​ 1,153 ​ 1,208 ​ 1,263 ​ 892 ​ 889 Overdraft and insufficient funds fees ​ 7,617 ​ 7,872 ​ 6,686 ​ 6,481 ​ 8,249 Point-of-sale and ATM fee income and service charges ​ 14,346 ​ 15,705 ​ 15,029 ​ 12,203 ​ 12,649 Net gain on loan sales ​ 2,354 ​ 2,584 ​ 9,463 ​ 8,089 ​ 2,607 Net realized gain (loss) on sales of available-for-sale securities ​ — ​ (130) ​ — ​ 78 ​ (62) Late charges and fees on loans ​ 786 ​ 1,182 ​ 1,434 ​ 1,419 ​ 1,432 Gain (loss) on derivative interest rate products ​ (337) ​ 321 ​ 312 ​ (264) ​ (104) Other income ​ 4,154 ​ 5,399 ​ 4,130 ​ 6,152 ​ 5,297 ​ ​ 30,073 ​ 34,141 ​ 38,317 ​ 35,050 ​ 30,957 Non-interest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Salaries and employee benefits ​ 78,521 ​ 75,300 ​ 70,290 ​ 70,810 ​ 63,224 Net occupancy and equipment expense ​ 30,834 ​ 28,471 ​ 29,163 ​ 27,582 ​ 26,217 Postage ​ 3,590 ​ 3,379 ​ 3,164 ​ 3,069 ​ 3,198 Insurance ​ 4,542 ​ 3,197 ​ 3,061 ​ 2,405 ​ 2,015 Advertising ​ 3,396 ​ 3,261 ​ 3,072 ​ 2,631 ​ 2,808 Office supplies and printing ​ 1,057 ​ 867 ​ 848 ​ 1,016 ​ 1,077 Telephone ​ 2,730 ​ 3,170 ​ 3,458 ​ 3,794 ​ 3,580 Legal, audit and other professional fees ​ 7,086 ​ 6,330 ​ 6,555 ​ 2,378 ​ 2,624 Expense on other real estate and repossessions ​ 311 ​ 359 ​ 627 ​ 2,023 ​ 2,184 Acquired deposit intangible asset amortization ​ 286 ​ 768 ​ 863 ​ 1,154 ​ 1,190 Other operating expenses ​ 8,670 ​ 8,264 ​ 6,534 ​ 6,363 ​ 7,021 ​ ​ 141,023 ​ 133,366 ​ 127,635 ​ 123,225 ​ 115,138 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ 85,344 ​ 94,202 ​ 94,364 ​ 73,092 ​ 90,061 Provision for income taxes ​ 17,544 ​ 18,254 ​ 19,737 ​ 13,779 ​ 16,449 Net income ​ $ 67,800 ​ $ 75,948 ​ $ 74,627 ​ $ 59,313 ​ $ 73,612 ​ 65 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or For the Year Ended December 31, ​ 2023 2022 2021 2020 2019 ​ ​ (Number of Shares In Thousands) Performance Data and Ratios: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Per Common Share Data: ​ ​ ​ ​ ​ ​ Basic earnings per common share ​ $ 5.65 ​ $ 6.07 ​ $ 5.50 ​ $ 4.22 ​ $ 5.18 ​ Diluted earnings per common share ​ 5.61 ​ 6.02 ​ 5.46 ​ 4.21 ​ 5.14 ​ Cash dividends declared ​ 1.60 ​ 1.56 ​ 1.40 ​ 2.36 ​ 2.07 ​ Book value per common share ​ 48.44 ​ 43.58 ​ 46.98 ​ 45.79 ​ 42.29 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average shares outstanding ​ 11,992 ​ 12,517 ​ 13,558 ​ 14,043 ​ 14,201 ​ Year-end actual shares outstanding ​ 11,804 ​ 12,231 ​ 13,128 ​ 13,753 ​ 14,261 ​ Average fully diluted shares outstanding ​ 12,080 ​ 12,607 ​ 13,674 ​ 14,104 ​ 14,330 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings Performance Ratios: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on average assets(1) ​ 1.19 % 1.38 % 1.36 % 1.11 % 1.52 % Return on average stockholders’ equity(2) ​ 12.31 ​ 13.44 ​ 11.89 ​ 9.53 ​ 12.88 ​ Non-interest income to average total assets ​ 0.53 ​ 0.62 ​ 0.70 ​ 0.66 ​ 0.64 ​ Non-interest expense to average total assets ​ 2.47 ​ 2.42 ​ 2.32 ​ 2.31 ​ 2.37 ​ Average interest rate spread(3) ​ 2.97 ​ 3.59 ​ 3.22 ​ 3.23 ​ 3.62 ​ Year-end interest rate spread ​ 2.78 ​ 3.63 ​ 3.20 ​ 3.08 ​ 3.28 ​ Net interest margin(4) ​ 3.57 ​ 3.80 ​ 3.37 ​ 3.49 ​ 3.95 ​ Efficiency ratio(5) ​ 63.16 ​ 57.05 ​ 59.03 ​ 58.07 ​ 54.48 ​ Net overhead ratio(6) ​ 1.94 ​ 1.80 ​ 1.62 ​ 1.66 ​ 1.73 ​ Common dividend pay-out ratio(7) ​ 28.52 ​ 25.91 ​ 25.64 ​ 56.06 ​ 40.27 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Asset Quality Ratios (8): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses/year-end loans ​ 1.39 % 1.39 % 1.49 % 1.32 % 1.00 % Non-performing assets/year-end loans and foreclosed assets ​ 0.25 ​ 0.08 ​ 0.15 ​ 0.09 ​ 0.19 ​ Allowance for credit losses/non-performing loans ​ 550.48 ​ 1,729.69 ​ 1,120.31 ​ 1,831.86 ​ 891.66 ​ Net charge-offs/average loans ​ 0.02 ​ 0.01 ​ 0.00 ​ 0.01 ​ 0.10 ​ Gross non-performing assets/year end assets ​ 0.20 ​ 0.07 ​ 0.11 ​ 0.07 ​ 0.16 ​ Non-performing loans/year-end loans ​ 0.25 ​ 0.08 ​ 0.13 ​ 0.07 ​ 0.11 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance Sheet Ratios: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans to deposits ​ 97.33 % 96.30 % 88.23 % 95.52 % 105.13 % Average interest-earning assets as a percentage of average interest-bearing liabilities ​ 131.11 ​ 140.32 ​ 139.94 ​ 132.49 ​ 127.50 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital Ratios: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average common stockholders’ equity to average assets ​ 9.6 % 10.2 % 11.4 % 11.7 % 11.8 % Year-end tangible common stockholders’ equity to tangible assets(9) ​ 9.7 ​ 9.2 ​ 11.2 ​ 11.3 ​ 11.9 ​ Great Southern Bancorp, Inc.: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 capital ratio ​ 12.4 ​ 11.0 ​ 13.4 ​ 12.7 ​ 12.5 ​ Total capital ratio ​ 15.2 ​ 13.5 ​ 16.3 ​ 17.2 ​ 15.0 ​ Tier 1 leverage ratio ​ 11.0 ​ 10.6 ​ 11.3 ​ 10.9 ​ 11.8 ​ Common equity Tier 1 ratio ​ 11.9 ​ 10.6 ​ 12.9 ​ 12.2 ​ 12.0 ​ Great Southern Bank: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 capital ratio ​ 13.1 ​ 11.9 ​ 14.1 ​ 13.7 ​ 13.1 ​ Total capital ratio ​ 14.3 ​ 13.1 ​ 15.4 ​ 14.9 ​ 14.0 ​ Tier 1 leverage ratio ​ 11.6 ​ 11.5 ​ 11.9 ​ 11.8 ​ 12.3 ​ Common equity Tier 1 ratio ​ 13.1 ​ 11.9 ​ 14.1 ​ 13.7 ​ 13.1 ​ (1) Net income divided by average total assets.
Current Economic Conditions Changes in economic conditions could cause the values of assets and liabilities recorded in the financial statements to change rapidly, resulting in material future adjustments in asset values, the allowance for credit losses, or capital that could negatively affect the Company’s ability to meet regulatory capital requirements and maintain sufficient liquidity.
Current Economic Conditions Changes in economic conditions could cause the values of assets and liabilities recorded in the Company’s financial statements to change rapidly, resulting in material future adjustments to asset values, the allowance for credit losses, or capital that could negatively affect the Company’s ability to meet regulatory capital requirements and maintain sufficient liquidity.
Margin compression primarily resulted from changes in the asset mix, mainly the addition of lower-yielding assets and the issuance of subordinated notes during 2020 and the net interest margin remained lower than our historical average in 2021.
Margin compression primarily resulted from changes in the asset mix, mainly the addition of lower-yielding assets and the issuance of subordinated notes during 2020, and net interest margin remained lower than our historical average in 2021.
Activity in the non-performing loans category during the year ended December 31, 2022, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transfers to Transfers to ​ ​ ​ ​ ​ Beginning ​ Additions ​ Removed ​ Potential ​ Foreclosed ​ ​ ​ ​ ​ ​ ​ Ending ​ ​ Balance, ​ to Non- ​ from Non- ​ Problem ​ Assets and ​ Charge- ​ ​ ​ ​ Balance, ​ January 1 Performing Performing Loans Repossessions Offs Payments December 31 ​ ​ (In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One- to four-family construction ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Subdivision construction ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Land development ​ 468 ​ — ​ — ​ — ​ — ​ (84) ​ — ​ 384 Commercial construction ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — One- to four-family residential ​ 2,216 ​ 519 ​ (90) ​ (279) ​ — ​ (37) ​ (1,607) ​ 722 Other residential ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Commercial real estate ​ 2,006 ​ 238 ​ — ​ — ​ — ​ — ​ (665) ​ 1,579 Commercial business ​ — ​ 586 ​ — ​ — ​ — ​ — ​ — ​ 586 Consumer ​ 733 ​ 168 ​ — ​ (74) ​ (9) ​ (92) ​ (327) ​ 399 Total non-performing loans ​ $ 5,423 ​ $ 1,511 ​ $ (90) ​ $ (353) ​ $ (9) ​ $ (213) ​ $ (2,599) ​ $ 3,670 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ FDIC-assisted acquired loans included above ​ $ 1,736 ​ $ 272 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ (1,580) ​ $ 428 ​ At December 31, 2022, the non-performing commercial real estate category included three loans, one of which was added during 2022.
Activity in the non-performing loans category during the year ended December 31, 2022, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transfers to Transfers to ​ ​ ​ ​ ​ Beginning ​ Additions to ​ Removed ​ Potential ​ Foreclosed ​ ​ ​ ​ ​ ​ ​ Ending ​ ​ Balance, ​ Non- ​ from Non- ​ Problem ​ Assets and ​ Charge- ​ ​ ​ ​ Balance, ​ January 1 Performing Performing Loans Repossessions Offs Payments December 31 ​ ​ (In Thousands) One- to four-family construction ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Subdivision construction ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Land development ​ 468 ​ — ​ — ​ — ​ — ​ (84) ​ — ​ 384 Commercial construction ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — One- to four-family residential ​ 2,216 ​ 519 ​ (90) ​ (279) ​ — ​ (37) ​ (1,607) ​ 722 Other residential ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Commercial real estate ​ 2,006 ​ 238 ​ — ​ — ​ — ​ — ​ (665) ​ 1,579 Commercial business ​ — ​ 586 ​ — ​ — ​ — ​ — ​ — ​ 586 Consumer ​ 733 ​ 168 ​ — ​ (74) ​ (9) ​ (92) ​ (327) ​ 399 Total non-performing loans ​ $ 5,423 ​ $ 1,511 ​ $ (90) ​ $ (353) ​ $ (9) ​ $ (213) ​ $ (2,599) ​ $ 3,670 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ FDIC-assisted acquired loans included above ​ $ 1,736 ​ $ 272 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ (1,580) ​ $ 428 ​ At December 31, 2022, the non-performing commercial real estate category included three loans, one of which was added during 2022.
Activity in the potential problem loans category during the year ended December 31, 2022, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Removed ​ Transfers to ​ ​ ​ ​ ​ Beginning ​ Additions ​ from ​ Transfers to ​ Foreclosed ​ ​ ​ ​ ​ ​ ​ Ending ​ ​ Balance, ​ to Potential ​ Potential ​ Non- ​ Assets and ​ Charge- ​ ​ ​ ​ Balance, ​ January 1 Problem Problem Performing Repossessions Offs Payments December 31 ​ ​ (In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One- to four-family construction ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Subdivision construction ​ 15 ​ — ​ — ​ — ​ — ​ — ​ (15) ​ — Land development ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Commercial construction ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — One- to four-family residential ​ 1,432 ​ 279 ​ (275) ​ — ​ — ​ — ​ (88) ​ 1,348 Other residential ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Commercial real estate ​ 210 ​ — ​ — ​ — ​ — ​ (44) ​ (166) ​ — Commercial business ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Consumer ​ 323 ​ 161 ​ (58) ​ (37) ​ (27) ​ (9) ​ (123) ​ 230 Total potential problem loans ​ $ 1,980 ​ $ 440 ​ $ (333) ​ $ (37) ​ $ (27) ​ $ (53) ​ $ (392) ​ $ 1,578 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ FDIC-assisted acquired loans included above ​ $ 1,004 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ (44) ​ $ (217) ​ $ 743 ​ At December 31, 2022, the one- to four-family residential category of potential problem loans included 22 loans, one of which was added during the year ended December 31, 2022.
Activity in the potential problem loans category during the year ended December 31, 2022, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Removed ​ Transfers to ​ ​ ​ ​ ​ Beginning ​ Additions ​ from ​ Transfers ​ Foreclosed ​ ​ ​ ​ ​ ​ ​ Ending ​ ​ Balance, ​ to Potential ​ Potential ​ to Non- ​ Assets and ​ ​ ​ ​ ​ ​ Balance, ​ January 1 Problem Problem Performing Repossessions Charge-Offs Payments December 31 ​ ​ (In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One- to four-family construction ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Subdivision construction ​ 15 ​ — ​ — ​ — ​ — ​ — ​ (15) ​ — Land development ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Commercial construction ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — One- to four-family residential ​ 1,432 ​ 279 ​ (275) ​ — ​ — ​ — ​ (88) ​ 1,348 Other residential ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Commercial real estate ​ 210 ​ — ​ — ​ — ​ — ​ (44) ​ (166) ​ — Commercial business ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Consumer ​ 323 ​ 161 ​ (58) ​ (37) ​ (27) ​ (9) ​ (123) ​ 230 Total potential problem loans ​ $ 1,980 ​ $ 440 ​ $ (333) ​ $ (37) ​ $ (27) ​ $ (53) ​ $ (392) ​ $ 1,578 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ FDIC-assisted acquired loans included above ​ $ 1,004 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ (44) ​ $ (217) ​ $ 743 ​ At December 31, 2022, the one- to four- family residential category of potential problem loans included 22 loans, one of which was added during the year ended December 31, 2022.
A large portion of the Company’s certificate of deposit portfolio matures within six to twelve months and therefore reprices fairly quickly; this is consistent with the portfolio over the past several years.
A large portion of the Company’s certificate of deposit portfolio matures within six to twelve months and therefore reprices fairly quickly; this is consistent with the portfolio over the past several years.
Other identifiable intangible assets that are subject to amortization are amortized on a straight-line basis over a period of seven years. In April 2022, the Company, through its subsidiary Great Southern Bank, entered into a naming rights agreement with Missouri State University related to the main arena on the university’s campus in Springfield, Missouri.
Other identifiable deposit intangible assets that are subject to amortization are amortized on a straight-line basis over a period of seven years. In April 2022, the Company, through its subsidiary Great Southern Bank, entered into a naming rights agreement with Missouri State University related to the main arena on the university’s campus in Springfield, Missouri.
We calculate the efficiency ratio excluding consulting expense and related contract termination liability by subtracting from the non-interest expense component of the ratio the consulting expense and contract termination fee we incurred during 2021 in connection with the evaluation of our core and ancillary software and information technology systems. We had no such expenses or fees during 2022.
We calculate the efficiency ratio excluding consulting expense and related contract termination liability by subtracting from the non-interest expense component of the ratio the consulting expense and contract termination fee we incurred during 2021 in connection with the evaluation of our core and ancillary software and information technology systems. We had no such expenses or fees during 2022 or 2023.
In a situation where market interest rates decrease significantly in a short period of time, as they did in March 2020, our net interest margin decrease may be more pronounced in the very near term (first one to three months), due to fairly rapid decreases in LIBOR interest rates, SOFR interest rates and “prime” interest rates.
In a situation where market interest rates decrease significantly in a short period of time, as they did in March 2020, our net interest margin decrease may be more pronounced in the very near term (first one to three months), due to fairly rapid decreases in SOFR interest rates and “prime” interest rates.
See Note 3 of the accompanying audited financial statements, which are included in Item 8 of this report, for further discussion of the Company’s loan grading system. Non-Interest Income Non-interest income for the year ended December 31, 2022 was $34.1 million compared with $38.3 million for the year ended December 31, 2021.
See Note 3 to the accompanying audited financial statements, which are included in Item 8 of this report, for further discussion of the Company’s loan grading system. Non-Interest Income Non-interest income for the year ended December 31, 2022 was $34.1 million compared with $38.3 million for the year ended December 31, 2021.
LIBOR interest rates decreased significantly in 2020 and remained very low in 2021, putting pressure on loan yields, and strong pricing competition for loans and deposits remains in most of our markets. Beginning in March 2022, market interest rates, including LIBOR interest rates, SOFR interest rates and “prime” interest rates, began to increase rapidly.
LIBOR interest rates decreased significantly in 2020 and remained very low in 2021, putting pressure on loan yields, and strong pricing competition for loans and deposits remained in most of our markets. Beginning in March 2022, market interest rates, including LIBOR interest rates, SOFR interest rates and “prime” interest rates, began to increase rapidly.
A large portion of our loan portfolio is tied to one-month LIBOR or SOFR, three-month LIBOR or SOFR or the “prime rate” and adjusts immediately or shortly after the index rate adjusts (subject to the effect of contractual interest rate floors on some of the loans, which are discussed below).
A large portion of our loan portfolio is tied to one-month SOFR, three-month SOFR or the “prime rate” and adjusts immediately or shortly after the index rate adjusts (subject to the effect of contractual interest rate floors on some of the loans, which are discussed below).
Activity in foreclosed assets and repossessions during the year ended December 31, 2022, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning ​ ​ ​ ​ ​ Ending ​ ​ Balance, ​ ​ ​ ​ ​ ​ ​ Capitalized ​ Write- ​ Balance, ​ January 1 Additions Sales Costs Downs December 31 ​ ​ (In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One- to four-family construction ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Subdivision construction ​ — ​ — ​ — ​ — ​ — ​ — Land development ​ 315 ​ — ​ (300) ​ — ​ (15) ​ — Commercial construction ​ — ​ — ​ — ​ — ​ — ​ — One- to four-family residential ​ 183 ​ — ​ (175) ​ — ​ (8) ​ — Other residential ​ — ​ — ​ — ​ — ​ — ​ — Commercial real estate ​ — ​ — ​ — ​ — ​ — ​ — Commercial business ​ — ​ — ​ — ​ — ​ — ​ — Consumer ​ 90 ​ 344 ​ (384) ​ — ​ — ​ 50 Total foreclosed assets and repossessions ​ $ 588 ​ $ 344 ​ $ (859) ​ $ — ​ $ (23) ​ $ 50 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ FDIC-assisted acquired assets included above ​ $ 498 ​ $ — ​ $ (475) ​ $ — ​ $ (23) ​ $ — ​ 84 Table of Contents The Company sold its three remaining foreclosed real estate properties in 2022.
Activity in foreclosed assets and repossessions during the year ended December 31, 2022, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning ​ ​ ​ ​ ​ Ending ​ ​ Balance, ​ ​ ​ ​ ​ ​ ​ Capitalized ​ ​ ​ Balance, ​ January 1 Additions Sales Costs Write-Downs December 31 ​ ​ (In Thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One- to four-family construction ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Subdivision construction ​ — ​ — ​ — ​ — ​ — ​ — Land development ​ 315 ​ — ​ (300) ​ — ​ (15) ​ — Commercial construction ​ — ​ — ​ — ​ — ​ — ​ — One- to four-family residential ​ 183 ​ — ​ (175) ​ — ​ (8) ​ — Other residential ​ — ​ — ​ — ​ — ​ — ​ — Commercial real estate ​ — ​ — ​ — ​ — ​ — ​ — Commercial business ​ — ​ — ​ — ​ — ​ — ​ — Consumer ​ 90 ​ 344 ​ (384) ​ — ​ — ​ 50 Total foreclosed assets and repossessions ​ $ 588 ​ $ 344 ​ $ (859) ​ $ — ​ $ (23) ​ $ 50 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ FDIC-assisted acquired assets included above ​ $ 498 ​ $ — ​ $ (475) ​ $ — ​ $ (23) ​ $ — ​ 96 Table of Contents The Company sold its three remaining foreclosed real estate properties in 2022.
In a situation where market interest rates increase significantly in a short period of time, our net interest margin increase may be more pronounced in the very near term (first one to three months), due to fairly rapid increases in LIBOR interest rates, SOFR interest rates and “prime” interest rates.
In a situation where market interest rates increase significantly in a short period of time, our net interest margin increase may be more pronounced in the very near term (first one to three months), due to fairly rapid increases in SOFR interest rates and “prime” interest rates.
The Company experienced negative cash flows from financing activities during the year ended December 31, 2021, and positive cash flows from financing activities during the years ended December 31, 2022 and 2020. ​ Cash flows from operating activities for the periods covered by the Statements of Cash Flows have been primarily related to changes in accrued and deferred assets, credits and other liabilities, the provision for credit losses, realized gains on the sale of investment securities and loans, depreciation and amortization and the amortization of deferred loan origination fees and discounts (premiums) on loans and investments, all of which are non-cash or non-operating adjustments to operating cash flows.
The Company experienced positive cash flows from financing activities during the years ended December 31, 2023 and 2022, and negative cash flows from financing activities during the year ended December 31, 2021. ​ Cash flows from operating activities for the periods covered by the Statements of Cash Flows have been primarily related to changes in accrued and deferred assets, credits and other liabilities, the provision for credit losses, realized gains on the sale of investment securities and loans, depreciation and amortization and the amortization of deferred loan origination fees and discounts (premiums) on loans and investments, all of which are non-cash or non-operating adjustments to operating cash flows.
A portion of this increase related to normal annual merit increases in various lending and operations areas. In 2022, many of these increases were larger than in previous years due to the current employment environment.
A portion of this increase related to normal annual merit increases in various lending and operations areas. In 2022, many of these increases were larger than in previous years due to the employment environment.
The Company does not undertake-and specifically declines any obligation- to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. 64 Table of Contents Critical Accounting Policies, Judgments and Estimates The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States and general practices within the financial services industry.
The Company does not undertake-and specifically declines any obligation- to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. ​ 67 Table of Contents Critical Accounting Policies, Judgments and Estimates The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States and general practices within the financial services industry.
The number of shares of stock that will be repurchased at any particular time and the prices that will be paid are subject to many factors, several of which are outside of the control of the Company.
The number of shares that will be repurchased at any particular time and the prices that will be paid are subject to many factors, several of which are outside of the control of the Company.
The economy plunged into recession in the first quarter of 2020, as efforts to contain the spread of the coronavirus forced all but essential business activity, or any work that could not be done from home, to stop, shuttering factories, restaurants, entertainment, sports events, retail shops, personal services, and more.
The economy plunged into recession in the first quarter of 2020, as efforts to contain the spread of the coronavirus forced all but essential business activity, or any work that could not be done from home, to stop, shuttering factories, restaurants, entertainment, sporting events, retail shops, personal services, and more.
While management believes no impairment existed at December 31, 2022, different conditions or assumptions used to measure fair value of the reporting unit, or changes in cash flows or profitability, if significantly negative or unfavorable, could have a material adverse effect on the outcome of the Company’s impairment evaluation in the future.
While management believes no impairment existed at December 31, 2023, different conditions or assumptions used to measure fair value of the reporting unit, or changes in cash flows or profitability, if significantly negative or unfavorable, could have a material adverse effect on the outcome of the Company’s impairment evaluation in the future.
Any qualifying depository institution or its holding company that exceeds the CBLR will be considered to have met generally applicable leverage and risk-based regulatory capital requirements and any qualifying depository institution that exceeds the new ratio will be considered “well-capitalized” under the prompt corrective action rules. Currently, the CBLR is 9.0%.
Upon election, any qualifying depository institution or its holding company that exceeds the CBLR will be considered to have met generally applicable leverage and risk-based regulatory capital requirements and any qualifying depository institution that exceeds the new ratio will be considered “well-capitalized” under the prompt corrective action rules. Currently, the CBLR is 9.0%.
Great Southern also has a portfolio of loans ($6.7 million at December 31, 2022) tied to an AMERIBOR index that will adjust immediately or within 90 days of a change to the “prime rate” of interest. All of these loans had interest rate floors at various rates.
Great Southern also has a portfolio of loans ($6.7 million at December 31, 2023) tied to an AMERIBOR index that will adjust immediately or within 90 days of a change to the “prime rate” of interest. All of these loans had interest rate floors at various rates.
The Company utilizes particular sources of funds based 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.
The Company utilizes various sources of funds based 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.
The $0.40 per share dividend declared but unpaid as of December 31, 2022, was paid to stockholders in January 2023. Common Stock Repurchases and Issuances . The Company has been in various buy-back programs since May 1990.
The $0.40 per share dividend declared but unpaid as of December 31, 2023, was paid to stockholders in January 2024. Common Stock Repurchases and Issuances . The Company has been in various buy-back programs since May 1990.
The Company defines reporting units as a level below each of its operating segments for which there is discrete financial information that is regularly reviewed. As of December 31, 2022, the Company has one reporting unit to which goodwill has been allocated – the Bank.
The Company defines reporting units as a level below each of its operating segments for which there is discrete financial information that is regularly reviewed. As of December 31, 2023, the Company has one reporting unit to which goodwill has been allocated – the Bank.
The terms of the agreement provide the naming rights to Great Southern Bank for a total cost of $5.5 million, to be paid over a period of seven years. The Company expects to amortize the intangible asset through non-interest expense over a period not to exceed 15 years.
The terms of the agreement provide the naming rights to Great Southern Bank for a total cost of $5.5 million, to be paid over a period of seven years. The Company expects to amortize the naming rights intangible assets through non-interest expense over a period not to exceed 15 years.
Non-GAAP Reconciliation: Efficiency Ratio Excluding Consulting Expense and Related Contract Termination Liability ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, 2021 ​ ​ (Dollars in Thousands) ​ ​ ​ ​ ​ ​ ​ Reported non-interest expense/ efficiency ratio ​ $ 127,635 59.03 % Less: Impact of one-time consulting expense and related contract termination liability ​ 5,318 2.46 ​ Core non-interest expense/ efficiency ratio ​ $ 122,317 56.57 % ​ There were no non-GAAP adjustments to the efficiency ratio for years other than 2021.
Non-GAAP Reconciliation: Efficiency Ratio Excluding Consulting Expense and Related Contract Termination Liability ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, 2021 ​ ​ (Dollars in Thousands) ​ ​ ​ ​ ​ ​ ​ Reported non-interest expense/ efficiency ratio ​ $ 127,635 59.03 % Less: Impact of one-time consulting expense and related contract termination liability ​ 5,318 2.46 ​ Core non-interest expense/ efficiency ratio ​ $ 122,317 56.57 % ​ 102 Table of Contents There were no non-GAAP adjustments to the efficiency ratio for years other than 2021.
At December 31, 2022, goodwill consisted of $5.4 million at the Bank reporting unit, which included goodwill of $4.2 million that was recorded during 2016 related to the acquisition of 12 branches and related deposits in the St. Louis market.
At December 31, 2023, goodwill consisted of $5.4 million at the Bank reporting unit, which included goodwill of $4.2 million that was recorded during 2016 related to the acquisition of 12 branches and related deposits in the St. Louis market.
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), a fiscal relief bill passed by Congress and signed by the President in March 2020, injected approximately $3 trillion into the economy through direct payments to individuals and loans to small businesses that would help keep employees on their payroll, fueling a historic bounce-back in economic activity.
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), a fiscal relief bill passed by Congress and signed by the President in March 2020, injected approximately $3 trillion into the economy through direct payments to individuals and loans to small businesses intended to help keep employees on their payroll, fueling a historic bounce-back in economic activity.
There may also be a negative impact on the Company’s net interest income if the Company’s is unable to significantly lower its funding costs due to a highly competitive rate environment, although interest rates on assets may decline further. Conversely, market interest rate increases would normally result in increased interest rates on our LIBOR-based, SOFR-based and prime-based loans.
There may also be a negative impact on the Company’s net interest income if the Company is unable to significantly lower its funding costs due to a highly competitive rate environment, although interest rates on assets may decline further. Conversely, market interest rate increases would normally result in increased interest rates on our SOFR-based, AMERIBOR-based and prime-based loans.
After December 2018, the FRB paused its rate increases and, in July, September and October 2019, implemented rate decreases of 0.25% on each of those occasions. At December 31, 2019, the Federal Funds rate was 1.75%.
After December 2018, the FRB paused its rate increases and, in July, September and October 2019, implemented rate decreases of 0.25% on each of those occasions. At December 31, 2019, the Federal Funds rate stood at 1.75%.
When loan demand trends upward, we can increase rates paid on deposits to attract more deposits and utilize brokered deposits to provide additional funding. The level of competition for deposits in our markets is high. It is our goal to gain deposit 73 Table of Contents market share, particularly checking accounts, in our branch footprint.
When loan demand trends upward, we can increase rates paid on deposits to attract more deposits and utilize brokered deposits to provide additional funding. The level of competition for deposits in our markets is high. It is our goal to gain deposit market share, particularly checking accounts, in our branch footprint.
In addition, the Company had outstanding overnight borrowings in the 2022 period, which had an average interest rate of 220 basis points compared to none in the 2021 period. During the year ended December 31, 2022, the mix of the Company’s assets shifted somewhat, with net increases in outstanding loan balances and investment securities.
In addition, the Company had outstanding overnight borrowings in the 2022 period, which had an average interest rate of 220 basis points compared to none in the 2021 period. 94 Table of Contents During the year ended December 31, 2022, the mix of the Company’s assets shifted somewhat, with net increases in outstanding loan balances and investment securities.
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.
These effective rates were near 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.
Certain aspects of the Dodd-Frank Act have been affected by the more recently enacted Economic Growth Act, as defined and discussed below under “-Economic Growth Act.” 76 Table of Contents Capital Rules. The federal banking agencies have adopted regulatory capital rules that substantially amend the risk-based capital rules applicable to the Bank and the Company.
Certain aspects of the Dodd-Frank Act have been affected by the more recently enacted Economic Growth Act, as defined and discussed below under “-Economic Growth Act.” Capital Rules. The federal banking agencies have adopted regulatory capital rules that substantially amend the risk-based capital rules applicable to the Bank and the Company.
The Company continued to originate loans at a pace similar to prior periods, but overall loan repayments slowed in 2022 compared to the level of repayments in 2021. Additionally, the Company’s interest income on loans included accretion of net deferred fees related to PPP loans originated in 2020 and 2021.
The Company continued to originate loans at a pace similar to prior periods, but overall loan repayments slowed in 2022 compared to the level of repayments in 2021. Additionally, the Company’s interest income on loans included accretion of net deferred fees related to Paycheck Protection Program (PPP) loans originated in 2020 and 2021.
At December 31, 2022, the Company expected to have a sufficient amount of eligible variable rate loans to continue to accrete this 79 Table of Contents 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.
At December 31, 2022, the Company expected 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.
Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in economic conditions, such as changes in the national unemployment rate, commercial real estate price index, housing price index, consumer sentiment, gross domestic product (GDP) and construction spending.
Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level or term, as well as for changes in economic conditions, including but not limited to, changes in the national unemployment rate, commercial real estate price index, housing price index, consumer sentiment, gross domestic product (GDP) and construction spending.
Management also believes that providing a measure that excludes balances of intangible assets, which are subjective components of valuation, facilitates the 100 Table of Contents comparison of our performance with the performance of our peers. In addition, management believes that this is a standard financial measure used in the banking industry to evaluate performance.
Management also believes that providing a measure that excludes balances of intangible assets, which are subjective components of valuation, facilitates the comparison of our performance with the performance of our peers. In addition, management believes that this is a standard financial measure used in the banking industry to evaluate performance.
At December 31, 2022, nearly all of these LIBOR/SOFR and “prime rate” loans had fully-indexed rates that were at or above their floor rate and so are expected to move fully with future market interest rate increases.
At December 31, 2023, nearly all of these SOFR and “prime rate” loans had fully indexed rates that were at or above their floor rate and so are expected to move fully with future market interest rate increases.
Details of the current period changes in non-interest income and non-interest expense are provided under “Results of Operations and Comparison for the Years Ended December 31, 2022 and 2021.” Business Initiatives The Company’s 92 banking centers and its loan production offices are consistently reviewed to measure performance and to ensure responsiveness to changing customer needs and preferences.
Details of the current period changes in non-interest income and non-interest expense are provided under “Results of Operations and Comparison for the Years Ended December 31, 2023 and 2022.” Business Initiatives The Company’s banking centers and loan production offices are consistently reviewed to measure performance and ensure responsiveness to changing customer needs and preferences.
Worsening economic conditions from COVID-19 and subsequent variant outbreaks or similar events, higher inflation or interest rates, or other factors may lead to increased losses in the portfolio and/or requirements for an increase in provision expense.
Challenging or worsening economic conditions from higher inflation or interest rates, COVID-19 and subsequent variant outbreaks or similar events, global unrest or other factors may lead to increased losses in the portfolio and/or requirements for an increase in provision expense.
The decrease in average balances of time deposits was a result of decreases in retail customer time deposits obtained through the banking center network, retail customer time deposits obtained through on-line channels and decreases in brokered deposits. Brokered and on-line channel deposits were actively reduced by the Company as other deposit sources increased.
The decrease in average balances of time deposits was a result of decreases in retail time deposits obtained through the Company’s banking center network and time deposits obtained through on-line channels. On-line channel time deposits were actively reduced by the Company as other deposit sources increased.
Since mid-2022, the Company has increased the interest rates it pays on many deposit products. The Company has also utilized both fixed-rate and floating-rate brokered deposits of varying terms, as well as overnight FHLBank borrowings.
Since mid-2022, the Company has 99 Table of Contents increased the interest rates it pays on many deposit products. The Company has also utilized both fixed-rate and floating-rate brokered deposits of varying terms, as well as overnight FHLBank borrowings.
Of the total amount of fixed rate loans in our portfolio as of December 31, 2022, approximately 78% mature within the next five years and therefore are not considered to create significant long-term interest rate risk for the Company. Fixed rate loans make up only a portion of our balance sheet and our overall interest rate risk strategy.
Of the total amount of fixed rate loans in our portfolio as of December 31, 2023, approximately 86% mature within the next five years and therefore are not considered to create significant long-term interest rate risk for the Company. Fixed rate loans make up only a portion of our balance sheet and our overall interest rate risk strategy.
During the years ended December 31, 2022, 2021 and 2020, the Company had positive cash flows from operating activities. The Company experienced positive cash flows from investing activities during the year ended December 31, 2021, and negative cash flows from investing activities during the years ended December 31, 2022 and 2020.
During the years ended December 31, 2023, 2022 and 2021, the Company had positive cash flows from operating activities. The Company experienced negative cash flows from investing activities during the years ended December 31, 2023 and 2022, and positive cash flows from investing activities during the year ended December 31, 2021.
As of December 31, 2022, Great Southern’s interest rate risk models indicate that, generally, rising interest rates are expected to have a positive impact on the Company’s net interest income, while declining interest rates are expected to have a negative impact on net interest income.
As of December 31, 2023, Great Southern’s interest rate risk models indicate that, generally, rising interest rates are expected to have a modestly positive impact on the Company’s net interest income, while declining interest rates are expected to have a modestly negative impact on net interest income.
During 2021, investing activities provided cash as net loan repayments exceeded the purchase of loans and investment securities. ​ 98 Table of Contents Changes in cash flows from financing activities during the periods covered by the Statements of Cash Flows are primarily due to changes in deposits after interest credited, changes in short-term borrowings, proceeds from the issuance of subordinated notes, redemption of subordinated notes, purchases of the Company’s common stock and dividend payments to stockholders.
During 2021, investing activities provided cash as net loan repayments exceeded the purchase of loans and investment securities. ​ Changes in cash flows from financing activities during the periods covered by the Statements of Cash Flows are primarily due to changes in deposits after interest credited, changes in short-term borrowings, redemption of subordinated notes, purchases of the Company’s common stock and dividend payments to stockholders.
In August 2016, the Company issued $75 million of 5.25% fixed-to-floating rate subordinated notes due August 15, 2026. The notes were sold at par, resulting in net proceeds, after underwriting discounts and commissions and other issuance costs, of approximately $73.5 million. In June 2020, the Company issued $75.0 million of 5.50% fixed-to-floating rate subordinated notes due June 15, 2030.
The notes were sold at par, resulting in net proceeds, after underwriting discounts and commissions and other issuance costs, of approximately $73.5 million. In June 2020, the Company issued $75.0 million of 5.50% fixed-to-floating rate subordinated notes due June 15, 2030.
Additional procedures provide for frequent management review of the loan portfolio based on loan size, loan type, delinquencies, financial analysis, on-going correspondence with borrowers and problem loan work-outs. Management determines which loans are collateral-dependent, evaluates risk of loss and makes additional provisions to expense, if necessary, to maintain the allowance at a satisfactory level.
Additional procedures provide for frequent management review of the loan portfolio based on loan size, loan type, delinquencies, financial analysis, ongoing correspondence with borrowers and problem loan workouts. Management determines which loans are collateral-dependent, evaluates risk of loss and makes additional provisions to expense, if necessary, to maintain the allowance at a satisfactory level.
If the fair value of a reporting unit exceeds its carrying value, then no impairment is recorded. If the carrying value amount exceeds the fair value of a reporting unit, further testing is completed comparing the implied fair value of the reporting unit’s goodwill to its carrying value to measure the amount of impairment.
If the fair value of a reporting unit exceeds its carrying value, then no impairment is recorded. If the carrying value amount exceeds the fair value of a reporting unit, 68 Table of Contents further testing is completed comparing the implied fair value of the reporting unit’s goodwill to its carrying value to measure the amount of impairment.
Non-interest income consists primarily of service charges and ATM fees, POS interchange fees, late charges and prepayment fees on loans, gains on sales of loans and available-for-sale investments and other general operating income.
Non-interest income consists primarily of service charges and ATM fees, POS interchange fees, late charges 76 Table of Contents and prepayment fees on loans, gains on sales of loans and available-for-sale investments and other general operating income.
The Company’s strategy continues to be focused on maintaining credit risk and interest rate risk at appropriate levels. Recent growth has occurred in some loan types, primarily other residential (multi-family), commercial real estate and one- to four family residential real estate, and in most of Great Southern’s primary lending locations, including Springfield, St.
The Company’s strategy continues to be focused on maintaining credit risk and interest rate risk at appropriate levels. Recent growth has occurred in some loan types, primarily other residential (multi-family) and commercial business, and in most of Great Southern’s primary lending locations, including Springfield, St.
Interest income on loans increased for the year ended December 31, 2022 compared to the same period in 2021, primarily due to higher average rates of interest on loans and higher average loan balances.
Interest income on loans increased for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to higher average rates of interest on loans and higher average loan balances.
Of the total brokered deposits at December 31, 2022, $150.0 million were floating rate deposits which adjust daily based on the effective federal funds rate index. The Company’s term Federal Home Loan Bank advances were $-0- at both December 31, 2022 and 2021.
Of the total brokered deposits at December 31, 2023, $300.0 million were floating rate deposits which adjust daily based on the effective federal funds rate index. The Company’s term Federal Home Loan Bank advances were $-0- at both December 31, 2023 and 2022.
This $45.9 million, less the accrued interest portion and net of deferred income taxes, is reflected in the Company’s stockholders’ equity as Accumulated Other Comprehensive Income and a portion of it will be accreted to interest income on loans monthly through the original contractual termination date of October 6, 2025.
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 Accumulated Other Comprehensive Income and is being accreted to interest income on loans monthly through the original contractual termination date of October 6, 2025.
Customer deposits at December 31, 2022 and December 31, 2021 totaling $12.4 million and $41.7 million, respectively, were part of the IntraFi Network Deposits program, which allows customers to maintain balances in an insured manner that would otherwise exceed the FDIC deposit insurance limit.
Customer deposits at December 31, 2023 and December 31, 2022 totaling $8.8 million and $12.4 million, respectively, were part of the IntraFi Network Deposits program, which allows customers to maintain balances in an insured manner that would otherwise exceed the FDIC deposit insurance limit.
A rate cut by the FRB generally would have an anticipated immediate negative impact on the Company’s net interest income due to the large total balance of loans tied to the one-month or three-month LIBOR index, SOFR indices or the “prime rate” index and will 74 Table of Contents be subject to adjustment at least once within 90 days or loans which generally adjust immediately as the Federal Funds rate adjusts.
A rate cut by the FRB generally would have an anticipated immediate negative impact on the Company’s net interest income due to the large total balance of loans tied to the SOFR indices or the “prime rate” index and will be subject to adjustment at least once within 90 days or loans which generally adjust immediately as the Federal Funds rate adjusts.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following table sets forth selected consolidated financial information and other financial data of the Company. The summary statement of financial condition information and statement of income information are derived from our consolidated financial statements, which have been audited by FORVIS, LLP, formerly BKD, LLP.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following sets forth selected consolidated financial information and other financial data of the Company. The summary statement of financial condition information and statement of income information are derived from our consolidated financial statements, which have been audited by FORVIS, LLP. See Item 8.
The Bank’s allowance for credit losses as a percentage of total loans was 1.39% and 1.49% at December 31, 2022 and 2021, respectively. Management considers the allowance for credit losses adequate to cover losses inherent in the Bank’s loan portfolio at December 31, 2022, based on recent reviews of the Bank’s loan portfolio and current economic conditions.
The Bank’s allowance for credit losses as a percentage of total loans was 1.39% at both December 31, 2023 and 2022. Management considers the allowance for credit losses adequate to cover losses inherent in the Bank’s loan portfolio at December 31, 2023, based on recent reviews of the Bank’s loan portfolio and current economic conditions.
As a result of the significant volume of refinance activity in 2020 85 Table of Contents and 2021, and as market interest rates moved higher beginning in the second quarter of 2022, mortgage refinance volume has decreased and fixed rate loan originations and related gains on sales of these loans have decreased substantially.
As a result of the significant volume of refinance activity in 2022 97 Table of Contents and 2021, and as market interest rates moved higher beginning in the second quarter of 2022, mortgage refinance volume decreased and fixed rate loan originations and related gains on sales of these loans decreased substantially.
During the year ended December 31, 2022, the Company recorded a provision expense of $3.0 million on its portfolio of outstanding loans, compared to a negative provision of $6.7 million provision expense recorded for the year ended December 31, 2021.
Provision for and Allowance for Credit Losses During the year ended December 31, 2022, the Company recorded a provision expense of $3.0 million on its portfolio of outstanding loans, compared to a negative provision of $6.7 million for the year ended December 31, 2021.
The Company attracts deposit accounts through its retail branch network, correspondent banking and corporate services areas, internet channels and brokered deposits. The Company then utilizes these deposit funds, along with FHLBank advances and other borrowings, to meet loan demand or otherwise fund its activities. In the year ended December 31, 2022, total deposit balances increased $132.8 million, or 2.9%.
The Company attracts deposit accounts through its retail branch network, correspondent banking and corporate services areas, internet channels and brokered deposits. The Company then utilizes these deposit funds, along with FHLBank advances and other borrowings, to meet loan demand or otherwise fund its activities. In the year ended December 31, 2023, total deposit balances increased $36.8 million, or 0.8%.
Total Interest Expense Total interest expense increased $6.6 million, or 31.9%, during the year ended December 31, 2022, when compared with the year ended December 31, 2021, due to an increase in interest expense on deposits of $7.6 million, or 57.8%, an increase in interest expense on short-term borrowings of $1.1 million, or 100.0%, an increase in interest expense on subordinated debentures issued to capital trusts of $427,000, or 95.3%, and an increase in interest expense on securities sold under reverse repurchase agreements of $287,000, or 775.7%, partially offset by a decrease in interest expense on subordinated notes of $2.7 million, or 31.9%. 80 Table of Contents Interest Expense - Deposits Interest expense on demand deposits increased $2.9 million due to an increase in average rates from 0.17% during the year ended December 31, 2021, to 0.30% during the year ended December 31, 2022.
Total Interest Expense Total interest expense increased $6.6 million, or 31.9%, during the year ended December 31, 2022, when compared with the year ended December 31, 2021, due to an increase in interest expense on deposits of $7.6 million, or 57.8%, an increase in interest expense on short-term borrowings of $1.1 million, or 100.0%, an increase in interest expense on subordinated debentures issued to capital trusts of $427,000, or 95.3%, and an increase in interest expense on securities sold under reverse repurchase agreements of $287,000, or 775.7%, partially offset by a decrease in interest expense on subordinated notes of $2.7 million, or 31.9%.
In 2022, the FRB implemented rate increases of 0.25%, 0.50%, 0.75%, 0.75%, 0.75%, 0.75% and 0.50% in March, May, June, July, September, November and December 2022, respectively. At December 31, 2022, the Federal Funds rate was 4.50%, and currently is 4.75%.
In 2022, the FRB implemented rate increases of 0.25%, 0.50%, 0.75%, 0.75%, 0.75%, 0.75% and 75 Table of Contents 0.50% in March, May, June, July, September, November and December 2022, respectively. At December 31, 2022, the Federal Funds rate was 4.50%.
If one-month USD-LIBOR exceeds the fixed rate of interest, the Company will be required to pay net settlements to the counterparty and will record those net payments as a reduction of interest income on loans. The Company recorded a reduction of loan interest income related to this swap transaction of $941,000 in the year ended December 31, 2022.
If one-month USD-LIBOR exceeded the fixed rate of interest, the Company was required to pay net settlements to the counterparty and recorded those net payments as a reduction of interest income on loans. The Company recorded a reduction of loan interest income related to this swap transaction of $941,000 in the year ended December 31, 2022.
Net fees included in interest income were $6.3 million, $11.2 million and $6.6 million for 2022, 2021 and 2020, respectively. Tax-exempt income was not calculated on a tax equivalent basis.
Net fees included in interest income were $5.7 million, $6.3 million and $11.2 million for 2023, 2022 and 2021, respectively. Tax-exempt income was not calculated on a tax equivalent basis.
The notes were sold at par, resulting in net proceeds, after underwriting discounts and commissions and other issuance costs, of approximately $73.5 million. In both cases, the issuance costs are amortized over the expected life of the notes, which is five years from the issuance date, and therefore impact the overall interest expense on the notes.
The notes were sold at par, resulting in net proceeds, after underwriting discounts and commissions and other issuance costs, of approximately $73.5 million. These issuance costs are amortized over the expected life of the notes, which is five years from the issuance date, impacting the overall interest expense on the notes.
For further discussions of the Bank’s loan portfolio, and specifically, commercial real estate and commercial construction loans, see “Item 1. Business – Lending Activities.” The percentage of fixed-rate loans in our loan portfolio has been as much as 44% in recent years and was 38% as of December 31, 2022.
For further discussions of the Bank’s loan portfolio, and specifically, commercial real estate and commercial construction loans, see “Item 1. Business – Lending Activities.” The percentage of fixed-rate loans in our loan portfolio has been as much as 40% in recent years and was 39% as of December 31, 2023.
Retail certificates of deposit increased due to retail certificates generated through the banking center network. Time deposits initiated through internet channels experienced a planned decrease as part of the Company’s balance sheet management between funding sources.
Retail certificates of deposit decreased due to a decrease in retail certificates generated through the banking center network and time deposits initiated through internet channels, which experienced a planned decrease as part of the Company’s balance sheet management between funding sources.
Factors that could cause or contribute to such differences include, but are not limited to: (i) expected revenues, cost savings, earnings accretion, synergies and other benefits from the Company’s merger and acquisition activities might not be realized within the anticipated time frames or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, and labor shortages might be greater than expected; (ii) changes in economic conditions, either nationally or in the Company’s market areas; (iii) the remaining effects of the COVID-19 pandemic, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions and other uncertainties resulting from the COVID-19 pandemic; (iv) fluctuations in interest rates and the effects of inflation, a potential recession or slower economic growth caused by changes in energy prices or supply chain disruptions; (v) the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; (vi) the possibility of realized or unrealized losses on securities held in the Company’s investment portfolio; (vii) the Company’s ability to access cost-effective funding; (viii) fluctuations in real estate values and both residential and commercial real estate market conditions; (ix) the ability to adapt successfully to technological changes to meet customers’ needs and developments in the marketplace; (x) the possibility that security measures implemented might not be sufficient to mitigate the risk of a cyber-attack or cyber theft, and that such security measures might not protect against systems failures or interruptions; (xi) legislative or regulatory changes that adversely affect the Company’s business; (xii) changes in accounting policies and practices or accounting standards; (xiii) results of examinations of the Company and Great Southern Bank by their regulators, including the possibility that the regulators may, among other things, require the Company to limit its business activities, change its business mix, increase its allowance for credit losses, write-down assets or increase its capital levels, or affect its ability to borrow funds or maintain or increase deposits, which could adversely affect its liquidity and earnings; (xiv) costs and effects of litigation, including settlements and judgments; (xv) competition; (xvi) uncertainty regarding the future of LIBOR and potential replacement indexes; and (xvii) natural disasters, war, terrorist activities or civil unrest and their effects on economic and business environments in which the Company operates.
Factors that could cause or contribute to such differences include, but are not limited to: (i) expected revenues, cost savings, earnings accretion, synergies and other benefits from the Company’s merger and acquisition activities might not be realized within the anticipated time frames or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected; (ii) changes in economic conditions, either nationally or in the Company’s market areas; (iii) the remaining effects of the COVID-19 pandemic on general economic and financial market conditions and on public health; (iv) fluctuations in interest rates, the effects of inflation or a potential recession, whether caused by Federal Reserve actions or otherwise; (v) the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; (vi) slower economic growth caused by changes in energy prices, supply chain disruptions or other factors; (vii) the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; (viii) the possibility of realized or unrealized losses on securities held in the Company’s investment portfolio; (ix) the Company’s ability to access cost-effective funding and maintain sufficient liquidity; (x) fluctuations in real estate values and both residential and commercial real estate market conditions; (xi) the ability to adapt successfully to technological changes to meet customers’ needs and developments in the marketplace; (xii) the possibility that security measures implemented might not be sufficient to mitigate the risk of a cyber-attack or cyber theft, and that such security measures might not protect against systems failures or interruptions; (xiii) legislative or regulatory changes that adversely affect the Company’s business; (xiv) changes in accounting policies and practices or accounting standards; (xv) results of examinations of the Company and Great Southern Bank by their regulators, including the possibility that the regulators may, among other things, require the Company to limit its business activities, change its business mix, increase its allowance for credit losses, write-down assets or increase its capital levels, or affect its ability to borrow funds or maintain or increase deposits, which could adversely affect its liquidity and earnings; (xvi) costs and effects of litigation, including settlements and judgments; (xvii) competition; and (xviii) natural disasters, war, terrorist activities or civil unrest and their effects on economic and business environments in which the Company operates.
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 December 31, 2022, the remaining pre-tax amount to be recorded in interest income was $22.5 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 December 31, 2023, the remaining pre-tax amount to be recorded in interest income was $14.4 million.
As of December 31, 2022, our interest rate risk models indicated a one-year interest rate earnings sensitivity position that is moderately positive in an increasing rate environment.
As of December 31, 2023, our interest rate risk models indicated a one-year interest rate earnings sensitivity position that is modestly positive in an increasing rate environment.
Management has historically utilized stock buy-back programs from time to time as long as management believed that repurchasing the stock would contribute to the overall growth of shareholder value.
Management has historically utilized stock buy-back programs from time to time as long as management believed that repurchasing the Company’s common stock would contribute to the overall growth of stockholder value.
Unemployment rates for December 2022 in the states where the Company has a branch or loan production offices were Arizona at 4.0%, Arkansas at 3.6%, Colorado at 3.3%, Georgia at 3.0%, Illinois at 4.7%, Iowa at 3.1%, Kansas at 2.9%, Minnesota at 2.5%, Missouri at 2.8%, Nebraska at 2.6%, North Carolina at 3.9%, Oklahoma at 3.4%, and Texas at 3.9%.
Unemployment rates for December 2023 in the states where the Company has a branch or loan production office were Arizona at 4.3%, Arkansas at 3.4%, Colorado at 3.4%, Georgia at 3.4%, Illinois at 4.8%, Iowa at 3.2%, Kansas at 2.8%, Minnesota at 2.9%, Missouri at 3.3%, Nebraska at 2.3%, North Carolina at 3.5%, Oklahoma at 3.4%, and Texas at 4.0%.
(2) Net income divided by average stockholders’ equity. 63 Table of Contents (3) Yield on average interest-earning assets less rate on average interest-bearing liabilities. (4) Net interest income divided by average interest-earning assets. (5) Non-interest expense divided by the sum of net interest income plus non-interest income. (6) Non-interest expense less non-interest income divided by average total assets.
(2) Net income divided by average stockholders’ equity. (3) Yield on average interest-earning assets less rate on average interest-bearing liabilities. (4) Net interest income divided by average interest-earning assets. (5) Non-interest expense divided by the sum of net interest income plus non-interest income.
The decrease was due to a 52 basis point decrease in the weighted average yield on interest-earning assets, partially offset by a 51 basis point decrease in the weighted average rate paid on interest-bearing liabilities.
The decrease was due to a 178 basis point increase in the weighted average rate paid on interest-bearing liabilities, partially offset by a 116 basis point increase in the weighted average yield on interest-earning assets.
Brokered deposits increased $344.1 million to $411.5 million at December 31, 2022, compared to $67.4 million at December 31, 2021. Brokered deposits were utilized to fund growth in outstanding loans and to offset reductions in balances in other deposit categories. The Company has the capacity to further expand its use of brokered deposits if it chooses to do so.
Brokered deposits increased $250.0 million to $661.5 million at December 31, 2023, compared to $411.5 million at December 31, 2022. Brokered deposits were utilized to fund growth in outstanding loans and to offset reductions in balances in other deposit categories. The Company has the capacity to further expand its use of brokered deposits if it chooses to do so.
To the extent that the fixed rate of interest exceeded one-month USD-LIBOR, the Company received net interest settlements which were recorded as loan interest income. If USD-LIBOR exceeded the fixed rate of interest, the Company was required to pay net settlements to the counterparty and record those net payments as a reduction of interest income on loans.
To the extent that the fixed rate exceeded one-month USD-SOFR, the Company received net interest settlements, which were recorded as loan interest income. If one-month USD-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.
Under the terms of the swap, the Company receives a fixed rate of interest of 1.6725% and pays a floating rate of interest equal to one-month USD-LIBOR (or the equivalent replacement rate if USD-LIBOR rate is not available). The floating rate resets monthly and net settlements of interest due to/from the counterparty also occur monthly.
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 rate if USD-LIBOR rate is not available). The floating rate reset monthly and net settlements of interest due to/from the counterparty also occurred monthly.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAt December 31, 2022, the weighted average interest rates on these various cumulative maturities were 1.42%, 1.87% and 2.09%, respectively. The current level and shape of the interest rate yield curve poses challenges for interest rate risk management. Prior to its increase of 0.25% on December 16, 2015, the FRB had last changed interest rates on December 16, 2008.
Biggest changePrior to its increase of 0.25% on December 16, 2015, the FRB had last changed interest rates on December 16, 2008. This was the first rate increase since September 29, 2006.
Margin compression primarily resulted from changes in the asset mix, mainly the addition of lower-yielding assets and the issuance of subordinated notes during 2020 and the net interest margin remained lower than our historical average in 2021.
Margin compression primarily resulted from changes in the asset mix, mainly the addition of lower-yielding assets and the issuance of subordinated notes during 2020 and net interest margin remained lower than our historical average in 2021.
In a situation where market interest rates decrease significantly in a short period of time, as they did in March 2020, our net interest margin decrease may be more pronounced in the very near term (first one to three months), due to fairly rapid decreases in LIBOR/SOFR interest rates (or their replacement rates) and “prime” interest rates.
In a situation where market interest rates decrease significantly in a short period of time, as they did in March 2020, our net interest margin decrease may be more pronounced in the very near term (first one to three months), due to fairly rapid decreases in SOFR interest rates (or their replacement rates) and “prime” interest rates.
In a situation where market interest rates increase significantly in a short period of time, our net interest margin increase may be more pronounced in the very near term (first one to three months), due to fairly rapid increases in LIBOR/SOFR interest rates (or their replacement rates) and “prime” interest rates.
In a situation where market interest rates increase significantly in a short period of time, our net interest margin increase may be more pronounced in the very near term (first one to three months), due to fairly rapid increases in SOFR interest rates (or their replacement rates) and “prime” interest rates.
The results of our modeling indicate that net interest income is not likely to be significantly affected either positively or negatively in the first twelve months following relatively minor changes in market interest rates because our portfolios are relatively well-matched in a twelve-month horizon.
The results of our modeling indicate that net interest income is not likely to be significantly affected either positively or negatively in the first twelve months following relatively minor changes in interest rates because our portfolios are relatively well matched in a twelve-month horizon.
The Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions. 103 Table of Contents 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 Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions. 105 Table of Contents 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.
Great Southern also has a portfolio of loans ($6.7 million at December 31, 2022) tied to an AMERIBOR index that will adjust immediately or within 90 days of a change to the “prime rate” of interest. Of these loans, $6.7 million had interest rate floors at various rates.
Great Southern also has a portfolio of loans ($6.7 million at December 31, 2023) tied to an AMERIBOR index that will adjust immediately or within 90 days of a change to the “prime rate” of interest. These loans had interest rate floors at various rates.
The notional amount of the swap was $400 million with a contractual termination date of October 6, 2025. Under the terms of the swap, the Company received a fixed rate of interest of 3.018% and paid a floating rate of interest equal to one-month USD-LIBOR.
The notional amount of the swap was $400 million with a contractual termination date of October 6, 2025. Under the terms of the swap, the Company received a fixed rate of interest of 3.018% and paid a floating rate of interest equal to one-month USD-LIBOR (now SOFR).
In the subsequent months we expect that the net interest margin would stabilize and begin to improve, as renewal interest rates on maturing time deposits are expected to decrease compared to the then-current rates paid on those products.
In the subsequent months we would expect that net interest margin would stabilize and begin to improve, as renewal interest rates on maturing time deposits decrease compared to the then-current rates paid on those products.
If USD-LIBOR exceeded the fixed rate of interest, the Company was required to pay net settlements to the counterparty and record those net payments as a reduction of interest income on loans.
If USD-SOFR exceeded the fixed rate of interest, the Company was required to pay net settlements to the counterparty and record those net payments as a reduction of interest income on loans.
The Company’s interest rate derivatives and hedging activities are discussed further in Note 16 of the accompanying audited financial statements, which are included in Item 8 of this Report. 104 Table of Contents The following tables illustrate the expected maturities and repricing, respectively, of the Bank’s financial instruments at December 31, 2022.
The Company’s interest rate derivatives and hedging activities are discussed further in Note 16 of the accompanying audited financial statements, which are included in Item 8 of this Report. 106 Table of Contents The following tables illustrate the expected maturities and repricing, respectively, of the Bank’s financial instruments at December 31, 2023.
During 2020, we did experience some compression of our net interest margin percentage due to the Federal Fund rate being cut by a total of 2.25% from July 2019 through March 2020.
During 2020, we experienced some compression of our net interest margin percentage due to the Federal Fund rate being cut by a total of 2.25% from July 2019 through March 2020.
This table does not show the effect of these monthly repayments of principal. (2) Held-to-maturity debt securities include approximately $196.3 million of mortgage-backed securities and collateralized mortgage obligations which pay interest and principal monthly to the Company.
This table does not show the effect of these monthly repayments of principal. (2) Held-to-maturity debt securities include approximately $188.8 million of mortgage-backed securities and collateralized mortgage obligations, which pay interest and principal monthly to the Company.
This table does not show the effect of these monthly repayments of principal. (2) Held-to-maturity debt securities include approximately $196.3 million of mortgage-backed securities and collateralized mortgage obligations which pay interest and principal monthly to the Company. This table does not show the effect of these monthly repayments of principal.
This table does not show the effect of these monthly repayments of principal. (2) Held-to-maturity debt securities include approximately $188.8 million of mortgage-backed securities and collateralized mortgage obligations, which pay interest and principal monthly to the Company. This table does not show the effect of these monthly repayments of principal.
At December 31, 2022, nearly all of these LIBOR/SOFR and “prime rate” loans had fully-indexed rates that were at or above their floor rate and so are expected to move fully with future market interest rate increases. Interest rate risk exposure estimates (the sensitivity gap) are not exact measures of an institution’s actual interest rate risk.
At December 31, 2023, nearly all of these SOFR and “prime rate” loans had fully indexed rates that were at or above their floor rate and so are expected to move fully if there are future market interest rate increases. Interest rate risk exposure estimates (the sensitivity gap) are not exact measures of an institution’s actual interest rate risk.
In 2022, the FRB implemented rate increases of 0.25%, 0.50%, 0.75%, 0.75%, 0.75%, 0.75% and 0.50% in March, May, June, July, September, November and December 2022, respectively. At December 31, 2022, the Federal Funds rate was 4.50%, and is 4.75% currently.
In 2022, the FRB implemented rate increases of 0.25%, 0.50%, 0.75%, 0.75%, 0.75%, 0.75% and 0.50% in March, May, June, July, September, November and December 2022, respectively. At December 31, 2022, the Federal Funds rate was 4.50%. In 2023, the FRB implemented rate increases of 0.25%, 0.25%, 0.25% and 0.25% in February, March, May and July 2023, respectively.
How We Measure the Risk to Us Associated with Interest Rate Changes 101 Table of Contents In an attempt to manage our exposure to changes in interest rates and comply with applicable regulations, we monitor Great Southern’s interest rate risk.
How We Measure the Risk to Us Associated with Interest Rate Changes In an attempt to manage our exposure to changes in interest rates and comply with applicable regulations, we monitor Great Southern’s interest rate risk.
Under the terms of one swap, beginning in May 2023, the Company will receive a fixed rate of interest of 2.628% and will pay a floating rate of interest equal to one-month USD-SOFR OIS.
Under the terms of one swap, beginning in May 2023, 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.
The notional amount of the swap is $300 million with an effective date of March 1, 2022 and a termination date of March 1, 2024. Under the terms of the swap, the Company will receive a fixed rate of interest of 1.6725% and will pay a floating rate of interest equal to one-month USD-LIBOR.
The notional amount of the swap is $300 million with an effective date of March 1, 2022 and a 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 (now SOFR).
In response to the COVID-19 pandemic, the FRB decreased interest rates on two occasions in March 2020, a 0.50% decrease on March 3rd and a 1.00% decrease on March 16th. At December 31, 2021, the Federal Funds rate was 0.25%.
At December 31, 2019, the Federal Funds rate stood at 1.75%. In response to the COVID-19 pandemic, the FRB decreased interest rates on two occasions in March 2020, a 0.50% decrease on March 3 and a 1.00% decrease on March 16. At December 31, 2021, the Federal Funds rate was 0.25%.
Under the terms of the other swap, beginning in May 2023, the Company will receive a fixed rate of interest of 5.725% and will pay a floating rate of interest equal to one-month USD-Prime. In each case, the floating rate will be reset monthly and net settlements of interest due to/from the counterparty will also occur monthly.
Under the terms of the other swap, beginning in May 2023, 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.
Great Southern also has a portfolio of loans ($747.6 million at December 31, 2022) tied to a “prime rate” of interest that will adjust 102 Table of Contents immediately or within 90 days of a change to the “prime rate” of interest. Of these loans, $734.6 million had interest rate floors at various rates.
Great Southern also has a portfolio of loans ($788.9 million at December 31, 2023) tied to a “prime rate” of interest that will adjust 104 Table of Contents immediately or within 90 days of a change to the “prime rate” of interest. These loans had interest rate floors at various rates.
As of December 31, 2022, Great Southern’s interest rate risk models indicate that, generally, rising interest rates are expected to have a positive impact on the Company’s net interest income, while declining interest rates are expected to have a negative impact on net interest income.
As of December 31, 2023, Great Southern’s interest rate risk models indicate that, generally, rising interest rates are expected to have a modestly positive impact on the Company’s net interest income within the next twelve months, while declining interest rates are expected to have a slightly negative impact on net interest income within the next twelve months.
LIBOR interest rates decreased significantly in 2020 and remained very low in 2021 and into the first three months of 2022, putting pressure on loan yields, and strong pricing competition for loans and deposits remains in most of our markets.
LIBOR/SOFR interest rates decreased significantly in 2020 and remained very low in 2021 and into the first three months of 2022, putting pressure on loan yields, and strong pricing competition for loans and deposits remained in most of our markets. Since March 2022, market interest rates have increased fairly rapidly.
To the extent the fixed rate of interest exceeds the floating rate of interest, the Company will receive net interest settlements, which will be recorded as loan interest income.
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.
The floating rate will be reset monthly and net settlements of interest due to/from the counterparty will also occur monthly. The initial floating rate of interest was set at 0.24143%. The Company will receive net interest settlements which will be recorded as loan interest income, to the extent that the fixed rate of interest exceeds one-month USD-LIBOR.
The floating rate reset monthly and net settlements of interest due to/from the counterparty also occurred monthly. The initial floating rate of interest was set at 0.24143%. The Company received net interest settlements, which were recorded as loan interest income, to the extent that the fixed rate of interest exceeded one-month USD-SOFR.
Great Southern’s loan portfolio also includes loans ($501.2 million at December 31, 2022) tied to various SOFR indexes that will be subject to adjustment at least once within 90 days after December 31, 2022. Of these loans, $501.2 million had interest rate floors.
Great Southern’s loan portfolio includes loans ($1.29 billion at December 31, 2023) tied to various SOFR indices that will be subject to adjustment at least once within 90 days after December 31, 2023. These loans had interest rate floors at various rates.
If the floating rate of interest exceeds the fixed rate of interest, the Company will be required to pay net settlements to the counterparty and will record those net payments as a reduction of interest income on loans.
If the floating rate of interest exceeds the fixed rate of interest (as it does currently), the Company pays net settlements to the counterparty and records those net payments as a reduction of interest income on loans.
This was the first rate increase since September 29, 2006. The FRB also implemented rate change increases of 0.25% on eight additional occasions beginning December 14, 2016 and through December 31, 2018, with the Federal Funds rate reaching as high as 2.50%.
The FRB also implemented rate change increases of 0.25% on eight additional occasions beginning December 14, 2016 and through December 31, 2018, with the Federal Funds rate reaching as high as 2.50%. After December 2018, the FRB paused its rate increases and, in July, September and October 2019, implemented rate decreases of 0.25% on each of those occasions.
The difference, or the interest rate repricing “gap,” provides an indication of the extent to which an institution’s interest rate spread will be affected by changes in interest rates.
Interest rate sensitivity is a measure of the difference between amounts of interest-earning assets and interest-bearing liabilities which either reprice or mature within a given period of time. The difference, or the interest rate repricing “gap,” provides an indication of the extent to which an institution’s interest rate spread will be affected by changes in interest rates.
In monitoring interest rate risk, we regularly analyze and manage assets and liabilities based on their payment streams and interest rates, the timing of their maturities and their sensitivity to actual or potential changes in market interest rates.
In monitoring interest rate risk, we regularly analyze and manage assets and liabilities based on their payment streams and interest rates, the timing of their maturities and their sensitivity to actual or potential changes in market interest rates. ​ 103 Table of Contents The ability to maximize net interest income is largely dependent upon the achievement of a positive interest rate spread that can be sustained despite fluctuations in prevailing interest rates.
If USD-LIBOR exceeds the fixed rate of interest in future periods, the Company will be required to pay net settlements to the counterparty and will record those net payments as a reduction of interest income on loans.
If the USD-SOFR rate exceeded the fixed rate of interest (as it does currently), the Company paid net settlements to the counterparty and recorded those net payments as a reduction of interest income on loans.
Since March 2022, market interest rates have increased fairly rapidly and are expected to increase further in the first half of 2023. This increased loan yields and expanded our net interest income and net interest margin in 2022.
This increased loan yields and expanded our net interest income and net interest margin in the latter half of 2022 and the first three months of 2023.
While market interest rate increases are expected to result in increases to loan yields, we expect that much of this benefit will be offset by increased funding costs. Subsequent to December 31, 2022, cumulative time deposit maturities are as follows: within three months --$237 million; within six months -- $733 million; and within twelve months -- $1.07 billion.
While market interest rate increases are expected to result in increases to loan yields, we expect that much of this benefit will be offset by increased funding costs, including changes in the funding mix, as experienced in the year ended December 31, 2023.
We model various interest rate scenarios for rising and falling rates, including both parallel and non-parallel shifts in rates.
The negative impact of a falling Federal Funds rate and other market interest rates also falling could be more pronounced if we are not able to decrease non-maturity deposit rates accordingly. We model various interest rate scenarios for rising and falling rates, including both parallel and non-parallel shifts in rates.
Removed
The ability to maximize net interest income is largely dependent upon the achievement of a positive interest rate spread that can be sustained despite fluctuations in prevailing interest rates. Interest rate sensitivity is a measure of the difference between amounts of interest-earning assets and interest-bearing liabilities which either reprice or mature within a given period of time.
Added
As of December 31, 2023, time deposit maturities over the next 12 months are as follows: within three months -- $394 million with a weighted-average rate of 3.82%; within three to six months -- $324 million with a weighted-average rate of 4.32%; and within six to twelve months -- $371 million with a weighted-average rate of 4.08%.
Removed
After December 2018, the FRB paused its rate increases and, in July, September and October 2019, implemented rate decreases of 0.25% on each of those occasions. At December 31, 2019, the Federal Funds rate stood at 1.75%.
Added
Based on time deposit market rates in January 2024, replacement rates for these maturing time deposits are likely to be approximately 4.00-4.50%. The current level and shape of the interest rate yield curve poses challenges for interest rate risk management.
Removed
Financial markets expect further increases in Federal Funds interest rates in the first half of 2023, with 0.50-1.00% of additional cumulative rate hikes currently anticipated.
Added
At December 31, 2023 the Federal Funds rate was 5.50%. Financial markets now expect the possibility of significant further increases in Federal Funds interest rates in 2024 to be unlikely, with interest rate decisions being made at each FRB meeting based on economic data available at the time.
Removed
A substantial portion of Great Southern’s loan portfolio ($958.8 million at December 31, 2022) is tied to the one-month or three-month LIBOR index and will be subject to adjustment at least once within 90 days after December 31, 2022. Of these loans, $958.4 million had interest rate floors.
Added
However, the FRB has further indicated, and financial markets now have begun to price in, that it is likely that the Federal Funds interest rate will remain near this peak level for several months before any rate cuts occur.
Removed
Maturities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2023 2024 2025 2026 2027 2028-2037 Thereafter Total Fair Value ​ (Dollars In Thousands) Financial Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest bearing deposits ​ $ 63,258 ​ — ​ — ​ — ​ — ​ — ​ ​ — ​ $ 63,258 ​ $ 63,258 Weighted average rate ​ 4.34 % ​ — ​ — ​ — ​ — ​ — ​ ​ — ​ 4.34 % ​ Available-for-sale debt securities (1) ​ $ 2,253 ​ ​ — ​ $ 6,906 ​ $ 3,667 ​ $ 20,770 ​ $ 184,690 ​ $ 272,306 ​ $ 490,592 ​ $ 490,592 Weighted average rate ​ 4.55 % — ​ 4.10 % 1.76 % 1.43 % 2.75 % 2.73 % 2.70 % ​ Held-to-maturity securities (2) ​ ​ — ​ ​ — ​ ​ — ​ $ 532 ​ ​ — ​ $ 107,437 ​ $ 94,526 ​ $ 202,495 ​ $ 177,765 Weighted average rate ​ ​ — ​ ​ — ​ ​ — ​ ​ 1.58 % ​ — ​ ​ 2.81 % ​ 2.43 % ​ 2.63 % ​ ​ Adjustable rate loans ​ $ 897,043 ​ $ 465,012 ​ $ 279,450 ​ $ 215,533 ​ $ 99,157 ​ $ 218,402 ​ $ 688,853 ​ $ 2,863,450 ​ $ 2,817,381 Weighted average rate ​ ​ 7.24 % ​ 7.07 % ​ 6.90 % ​ 7.10 % ​ 6.63 % ​ 5.83 % ​ 3.24 % ​ 4.23 % ​ ​ Fixed rate loans ​ $ 210,435 ​ $ 185,784 ​ $ 291,763 ​ $ 377,044 ​ $ 271,921 ​ $ 352,586 ​ $ 33,209 ​ $ 1,722,742 ​ $ 1,653,061 Weighted average rate ​ ​ 4.61 % 4.33 % 4.54 % 3.92 % 4.55 % ​ 3.91 % ​ 4.30 % ​ 4.26 % ​ ​ Federal Home Loan Bank stock and other interest earning assets ​ $ 20,710 ​ — ​ — ​ — ​ — ​ — ​ $ 10,104 ​ $ 30,814 ​ $ 30,814 Weighted average rate ​ ​ 4.33 % ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 4.49 % ​ 4.38 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total financial assets ​ $ 1,193,699 ​ $ 650,796 ​ $ 578,119 ​ $ 596,776 ​ $ 391,848 ​ $ 863,115 ​ $ 1,098,998 ​ $ 5,373,351 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Time deposits ​ $ 1,070,939 ​ $ 139,060 ​ $ 65,454 ​ $ 2,967 ​ $ 3,532 ​ $ 835 ​ ​ — ​ $ 1,282,787 ​ $ 1,270,790 Weighted average rate ​ 2.09 % 3.31 % 3.75 % 0.72 % 0.71 % 3.75 % — ​ 2.30 % ​ Interest-bearing demand ​ $ 2,338,535 ​ — ​ — ​ — ​ — ​ — ​ — ​ $ 2,338,535 ​ $ 2,338,535 Weighted average rate ​ 0.90 % — ​ — ​ — ​ — ​ — ​ — ​ 0.90 % ​ Non-interest-bearing demand ​ $ 1,063,588 ​ — ​ — ​ — ​ — ​ ​ — ​ ​ — ​ $ 1,063,588 ​ $ 1,063,588 Weighted average rate ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ Securities sold under reverse repurchase agreements ​ $ 176,843 ​ — ​ — ​ — ​ — ​ — ​ — ​ $ 176,843 ​ $ 176,843 Weighted average rate ​ 0.94 % — ​ — ​ — ​ — ​ — ​ — ​ 0.94 % ​ Short-term borrowings, overnight FHLB borrowings, and other liabilities ​ $ 89,583 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ $ 89,583 ​ $ 89,583 Weighted average rate ​ ​ 4.60 % ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 4.60 % ​ ​ Subordinated notes ​ — ​ — ​ — ​ — ​ — ​ $ 75,000 ​ ​ — ​ $ 75,000 ​ $ 72,000 Weighted average rate ​ — ​ — ​ — ​ — ​ — ​ 5.95 % — ​ 5.95 % ​ Subordinated debentures ​ — ​ — ​ — ​ — ​ — ​ ​ — ​ $ 25,774 ​ $ 25,774 ​ $ 25,774 Weighted average rate ​ — ​ — ​ — ​ — ​ — ​ — ​ 6.04 % 6.04 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total financial liabilities ​ $ 4,739,488 ​ $ 139,060 ​ $ 65,454 ​ $ 2,967 ​ $ 3,532 ​ $ 75,835 ​ $ 25,774 ​ $ 5,052,110 ​ ​ (1) Available-for-sale debt securities include approximately $417.5 million of mortgage-backed securities and collateralized mortgage obligations which pay interest and principal monthly to the Company.
Added
In February 2023, the Company entered into interest rate swap transactions as part of its ongoing interest rate management strategies to hedge the risk of certain of its fixed rate brokered deposits. The total notional amount of the swaps was $95 million with a termination date of February 28, 2025.
Removed
This table does not show the effect of these monthly repayments of principal. ​ 105 Table of Contents Repricing ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2023 2024 2025 2026 2027 2028-2037 Thereafter Total Fair Value ​ (Dollars In Thousands) Financial Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest bearing deposits ​ $ 63,258 ​ — ​ — ​ — ​ — ​ ​ — ​ — ​ $ 63,258 ​ $ 63,258 Weighted average rate ​ 4.34 % ​ — ​ — ​ — ​ — ​ ​ — ​ — ​ 4.34 % ​ Available-for-sale debt securities(1) ​ $ 2,253 ​ ​ — ​ $ 6,906 ​ $ 3,667 ​ $ 20,770 ​ $ 184,690 ​ $ 272,306 ​ $ 490,592 ​ $ 490,592 Weighted average rate ​ 4.55 % — ​ 4.10 % 1.76 % 1.43 % 2.75 % 2.73 % 2.70 % ​ Held-to-maturity securities (2) ​ ​ — ​ ​ — ​ ​ — ​ $ 532 ​ ​ — ​ $ 107,437 ​ $ 94,526 ​ $ 202,495 ​ $ 177,765 Weighted average rate ​ — ​ — ​ — ​ 1.58 % — ​ 2.81 % 2.43 % 2.63 % ​ Adjustable rate loans ​ $ 2,198,489 ​ $ 23,333 ​ $ 45,734 ​ $ 32,935 ​ $ 69,629 ​ $ 493,330 ​ ​ — ​ $ 2,863,450 ​ $ 2,817,381 Weighted average rate ​ ​ 3.84 % ​ 4.01 % ​ 3.91 % ​ 3.32 % ​ 3.72 % ​ 3.50 % ​ — ​ ​ 6.08 % ​ ​ Fixed rate loans ​ $ 210,435 ​ $ 185,784 ​ $ 291,763 ​ $ 377,044 ​ $ 271,921 ​ $ 352,586 ​ $ 33,209 ​ $ 1,722,742 ​ $ 1,653,061 Weighted average rate ​ 4.61 % 4.33 % 4.54 % 3.92 % 4.55 % 3.91 % 4.30 % 4.26 % ​ Federal Home Loan Bank stock and other interest earning assets ​ $ 30,814 ​ — ​ — ​ — ​ — ​ ​ — ​ — ​ $ 30,814 ​ $ 30,814 Weighted average rate ​ 4.38 % — ​ — ​ — ​ — ​ — ​ — ​ 4.38 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total financial assets ​ $ 2,505,249 ​ $ 209,117 ​ $ 344,403 ​ $ 414,178 ​ $ 362,320 ​ $ 1,138,043 ​ $ 400,041 ​ $ 5,373,351 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Time deposits ​ $ 1,082,139 ​ $ 127,860 ​ $ 65,454 ​ $ 2,967 ​ $ 3,532 ​ $ 835 ​ ​ — ​ $ 1,282,787 ​ $ 1,270,790 Weighted average rate ​ 2.09 % 3.34 % 3.75 % 0.72 % 0.71 % 3.75 % — ​ 2.30 % ​ Interest-bearing demand ​ $ 2,338,535 ​ — ​ — ​ — ​ — ​ — ​ — ​ $ 2,338,535 ​ $ 2,338,535 Weighted average rate ​ 0.90 % — ​ — ​ — ​ — ​ — ​ — ​ 0.90 % ​ Non-interest-bearing demand (3) ​ — ​ — ​ — ​ — ​ — ​ ​ — ​ $ 1,063,588 ​ $ 1,063,588 ​ $ 1,063,588 Weighted average rate ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ Securities sold under reverse repurchase agreements ​ $ 176,843 ​ — ​ — ​ — ​ — ​ — ​ — ​ $ 176,843 ​ $ 176,843 Weighted average rate ​ 0.94 % — ​ — ​ — ​ — ​ — ​ — ​ 0.94 % ​ Short-term borrowings, overnight FHLB borrowings, and other liabilities ​ $ 89,583 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ $ 89,583 ​ $ 89,583 Weighted average rate ​ ​ 4.60 % ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 4.60 % ​ ​ Subordinated notes ​ — ​ — ​ $ 75,000 ​ ​ — ​ — ​ ​ — ​ ​ — ​ $ 75,000 ​ $ 72,000 Weighted average rate ​ — ​ — ​ 5.95 % — ​ — ​ — ​ — ​ 5.95 % ​ Subordinated debentures ​ $ 25,774 ​ — ​ — ​ — ​ — ​ ​ — ​ — ​ $ 25,774 ​ $ 25,774 Weighted average rate ​ 6.04 % — ​ — ​ — ​ — ​ — ​ — ​ 6.04 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total financial liabilities ​ $ 3,712,874 ​ $ 127,860 ​ $ 140,454 ​ $ 2,967 ​ $ 3,532 ​ $ 835 ​ $ 1,063,588 ​ $ 5,052,110 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Periodic repricing GAP ​ $ (1,207,625) ​ $ 81,257 ​ $ 203,949 ​ $ 411,211 ​ $ 358,788 ​ $ 1,137,208 ​ $ (663,547) ​ $ 321,241 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cumulative repricing GAP ​ $ (1,207,625) ​ $ (1,126,368) ​ $ (922,419) ​ $ (511,208) ​ $ (152,420) ​ $ 984,788 ​ $ 321,241 ​ ​ (1) Available-for-sale debt securities include approximately $417.5 million of mortgage-backed securities and collateralized mortgage obligations which pay interest and principal monthly to the Company.
Added
Under the terms of the swaps, the Company received a fixed rate of interest of 4.65% and paid a floating rate of interest equal to USD-SOFR-COMPOUND plus a spread. The floating rate reset monthly and net settlements of interest due to/from the counterparty also occurred monthly.
Added
To the extent that the fixed rate of interest exceeded USD-SOFR-COMPOUND plus the spread, the Company received net interest settlements, which were recorded as a reduction of deposit interest expense.
Added
If USD-SOFR-COMPOUND plus the spread exceeded the fixed rate of interest, the Company was required to pay net settlements to the counterparty and record those net payments as interest expense on deposits. In January 2024, the Company elected to terminate the swaps related to brokered deposits prior to their contractual termination date in 2025.
Added
The Company received a net settlement payment from the swap counterparty totaling $26,500 upon termination. At the time of the early termination, the Company had recorded a market value adjustment to the brokered deposit of $163,000, which will be amortized as a reduction of interest expense from January 2024 through February 2025.
Added
Maturities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2024 2025 2026 2027 2028 2029-2038 Thereafter Total Fair Value ​ (Dollars In Thousands) Financial Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest bearing deposits ​ $ 108,804 ​ — ​ — ​ — ​ — ​ — ​ ​ — ​ $ 108,804 ​ $ 108,804 Weighted average rate ​ 5.35 % ​ — ​ — ​ — ​ — ​ — ​ ​ — ​ 5.35 % ​ Available-for-sale debt securities (1) ​ $ 1,247 ​ $ 7,053 ​ $ 3,007 ​ $ 19,909 ​ $ 9,835 ​ $ 196,806 ​ $ 240,350 ​ $ 478,207 ​ $ 478,207 Weighted average rate ​ 5.87 % 4.13 % 1.99 % 1.48 % 3.73 % 2.76 % 2.74 % 2.74 % ​ Held-to-maturity securities (2) ​ ​ — ​ ​ — ​ $ 523 ​ ​ — ​ $ 32,594 ​ $ 73,839 ​ $ 88,067 ​ $ 195,023 ​ $ 171,193 Weighted average rate ​ ​ — ​ ​ — ​ ​ 1.58 % ​ — ​ ​ 3.51 % ​ 2.50 % ​ 2.42 % ​ 2.63 % ​ ​ Adjustable rate loans ​ $ 775,311 ​ $ 595,740 ​ $ 347,899 ​ $ 210,012 ​ $ 56,111 ​ $ 194,308 ​ $ 670,565 ​ $ 2,849,946 ​ $ 2,764,145 Weighted average rate ​ ​ 8.36 % ​ 8.23 % ​ 8.18 % ​ 8.02 % ​ 8.07 % ​ 7.03 % ​ 3.57 % ​ 7.06 % ​ ​ Fixed rate loans ​ $ 261,468 ​ $ 347,537 ​ $ 422,101 ​ $ 301,451 ​ $ 224,795 ​ $ 223,927 ​ $ 35,972 ​ $ 1,817,251 ​ $ 1,713,626 Weighted average rate ​ ​ 5.00 % 4.83 % 4.54 % 4.63 % 5.12 % ​ 4.04 % ​ 4.53 % ​ 4.69 % ​ ​ Federal Home Loan Bank stock and other interest earning assets ​ $ 11,590 ​ — ​ — ​ — ​ — ​ — ​ $ 14,723 ​ $ 26,313 ​ $ 26,313 Weighted average rate ​ ​ 5.33 % ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 7.23 % ​ 6.39 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total financial assets ​ $ 1,158,420 ​ $ 950,330 ​ $ 773,530 ​ $ 531,372 ​ $ 323,335 ​ $ 688,880 ​ $ 1,049,677 ​ $ 5,475,544 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Time deposits ​ $ 921,485 ​ $ 19,250 ​ $ 3,067 ​ $ 2,394 ​ $ 948 ​ $ 1,058 ​ ​ — ​ $ 948,202 ​ $ 948,202 Weighted average rate ​ 3.87 % 0.94 % 0.69 % 0.76 % 0.68 % 1.51 % — ​ 3.79 % ​ Brokered funds ​ $ 266,781 ​ $ 296,552 ​ $ 98,195 ​ — ​ — ​ — ​ — ​ $ 661,528 ​ $ 661,528 Weighted average rate ​ 5.28 % 5.11 % 5.25 % — ​ — ​ — ​ — ​ 5.20 % ​ Interest-bearing demand ​ $ 2,216,482 ​ — ​ — ​ — ​ — ​ ​ — ​ ​ — ​ $ 2,216,482 ​ $ 2,216,482 Weighted average rate ​ 1.67 % — ​ — ​ — ​ — ​ — ​ — ​ 1.67 % ​ Non-interest-bearing demand ​ $ 895,496 ​ — ​ — ​ — ​ — ​ — ​ — ​ $ 895,496 ​ $ 895,496 Weighted average rate ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ Securities sold under reverse repurchase agreements ​ $ 70,843 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ $ 70,843 ​ $ 70,843 Weighted average rate ​ ​ 1.66 % ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1.66 % ​ ​ Short-term borrowings, overnight FHLB borrowings, and other liabilities ​ $ 252,610 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ $ 252,610 ​ $ 252,610 Weighted average rate ​ 5.64 % — ​ — ​ — ​ — ​ ​ — ​ ​ — ​ ​ 5.64 % ​ ​ Subordinated notes ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ $ 75,000 ​ ​ — ​ $ 75,000 ​ $ 71,625 Weighted average rate ​ — ​ — ​ — ​ — ​ — ​ 5.92 % — ​ 5.92 % ​ Subordinated debentures ​ — ​ — ​ — ​ — ​ — ​ ​ — ​ $ 25,774 ​ $ 25,774 ​ $ 25,774 Weighted average rate ​ — ​ — ​ — ​ — ​ — ​ — ​ 7.24 % 7.24 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total financial liabilities ​ $ 4,623,697 ​ $ 315,802 ​ $ 101,262 ​ $ 2,394 ​ $ 948 ​ $ 76,058 ​ $ 25,774 ​ $ 5,145,935 ​ ​ (1) Available-for-sale debt securities include approximately $420.1 million of mortgage-backed securities and collateralized mortgage obligations, which pay interest and principal monthly to the Company.
Added
This table does not show the effect of these monthly repayments of principal. ​ 107 Table of Contents Repricing ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2024 2025 2026 2027 2028 2029-2038 Thereafter Total Fair Value ​ (Dollars In Thousands) Financial Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest bearing deposits ​ $ 108,804 ​ — ​ — ​ — ​ — ​ ​ — ​ — ​ $ 108,804 ​ $ 108,804 Weighted average rate ​ 5.35 % ​ — ​ — ​ — ​ — ​ ​ — ​ — ​ 5.35 % ​ Available-for-sale debt securities(1) ​ $ 1,247 ​ $ 7,053 ​ $ 3,007 ​ $ 19,909 ​ $ 9,835 ​ $ 196,806 ​ $ 240,350 ​ $ 478,207 ​ $ 478,207 Weighted average rate ​ 5.87 % 4.13 % ​ 1.99 % 1.48 % 3.73 % 2.76 % 2.74 % 2.74 % ​ Held-to-maturity securities (2) ​ ​ — ​ ​ — ​ $ 532 ​ ​ — ​ $ 32,594 ​ $ 73,839 ​ $ 88,067 ​ $ 195,023 ​ $ 171,193 Weighted average rate ​ — ​ — ​ 1.58 % — ​ 3.51 % 2.50 % 2.42 % 2.63 % ​ Adjustable rate loans ​ $ 2,223,657 ​ $ 42,062 ​ $ 27,934 ​ $ 63,170 ​ $ 49,042 ​ $ 444,081 ​ ​ — ​ $ 2,849,946 ​ $ 2,764,145 Weighted average rate ​ ​ 8.00 % ​ 3.93 % ​ 3.33 % ​ 3.79 % ​ 3.99 % ​ 3.72 % ​ — ​ ​ 7.06 % ​ ​ Fixed rate loans ​ $ 261,468 ​ $ 347,537 ​ $ 422,101 ​ $ 301,451 ​ $ 224,795 ​ $ 223,927 ​ $ 35,972 ​ $ 1,817,251 ​ $ 1,713,626 Weighted average rate ​ ​ 5.00 % ​ 4.83 % ​ 4.54 % ​ 4.63 % ​ 5.12 % ​ 4.04 % ​ 4.53 % ​ 4.69 % ​ ​ Federal Home Loan Bank stock and other interest earning assets ​ $ 26,313 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ $ 26,313 ​ $ 26,313 Weighted average rate ​ 6.39 % — ​ — ​ — ​ — ​ — ​ — ​ 64.39 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total financial assets ​ $ 2,621,489 ​ $ 396,652 ​ $ 453,565 ​ $ 384,530 ​ $ 316,266 ​ $ 938,653 ​ $ 364,389 ​ $ 5,475,544 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Time deposits ​ $ 921,485 ​ $ 19,250 ​ $ 3,067 ​ $ 2,394 ​ $ 948 ​ $ 1,058 ​ ​ — ​ $ 948,202 ​ $ 948,202 Weighted average rate ​ 3.87 % 0.94 % 0.69 % 0.76 % 0.68 % 1.51 % — ​ 3.79 % ​ Brokered funds ​ $ 466,781 ​ $ 146,552 ​ $ 48,195 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ $ 661,528 ​ $ 661,528 Weighted average rate ​ 5.42 % 4.59 % 4.90 % — ​ — ​ — ​ — ​ 5.20 % ​ Interest-bearing demand ​ $ 2,216,482 ​ — ​ — ​ — ​ — ​ — ​ — ​ $ 2,216,482 ​ $ 2,216,482 Weighted average rate ​ 1.67 % — ​ — ​ — ​ — ​ — ​ — ​ 1.67 % ​ Non-interest-bearing demand (3) ​ — ​ — ​ — ​ — ​ — ​ ​ — ​ $ 895,496 ​ $ 895,496 ​ $ 895,496 Weighted average rate ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ Securities sold under reverse repurchase agreements ​ $ 70,843 ​ — ​ — ​ — ​ — ​ — ​ — ​ $ 70,843 ​ $ 70,843 Weighted average rate ​ 1.66 % — ​ — ​ — ​ — ​ — ​ — ​ 1.66 % ​ Short-term borrowings, overnight FHLB borrowings, and other liabilities ​ $ 252,610 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ $ 252,610 ​ $ 252,610 Weighted average rate ​ ​ 5.64 % ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 5.64 % ​ ​ Subordinated notes ​ — ​ $ 75,000 ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ $ 75,000 ​ $ 71,625 Weighted average rate ​ — ​ 5.92 % — ​ — ​ — ​ — ​ — ​ 5.92 % ​ Subordinated debentures ​ $ 25,774 ​ — ​ — ​ — ​ — ​ ​ — ​ — ​ $ 25,774 ​ $ 25,774 Weighted average rate ​ 7.24 % — ​ — ​ — ​ — ​ — ​ — ​ 7.24 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total financial liabilities ​ $ 3,953,975 ​ $ 240,802 ​ $ 51,262 ​ $ 2,394 ​ $ 948 ​ $ 1,058 ​ $ 895,496 ​ $ 5,145,935 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Periodic repricing GAP ​ $ (1,332,486) ​ $ 155,850 ​ $ 402,303 ​ $ 382,136 ​ $ 315,318 ​ $ 937,595 ​ $ (531,107) ​ $ 329,609 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cumulative repricing GAP ​ $ (1,332,486) ​ $ (1,176,636) ​ $ (774,333) ​ $ (392,197) ​ $ (76,879) ​ $ 860,716 ​ $ 329,609 ​ ​ (1) Available-for-sale debt securities include approximately $420.1 million of mortgage-backed securities and collateralized mortgage obligations, which pay interest and principal monthly to the Company.

Other GSBC 10-K year-over-year comparisons