GREAT SOUTHERN BANCORP, INC.
For the period ended Dec 31, 2025. Filed Mar 6, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 6, 2026
GSBC$80.76+0.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-07.
0001410578-25-000294
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-06.
0001104659-26-024659
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 272 previous paragraphs and 266 current paragraphs.
124 unchanged; 106 reworded; 28 added; 37 removed; 5 previous and 8 current paragraphs rearranged.
Tables are not compared: 31 previous and 29 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (28)
Current report
The target range decreased in December 2025 to 3.50%-3.75%. The Federal Reserve’s action in December 2025 represented the third consecutive rate cut in the latter part of 2025 and 1.75% in total cuts from September 2024.
Current report
Based on Moody’s U.S. Baseline Outlook and Alternative Scenarios Analysis dated January 2026, real GDP grew in the 3rd quarter of 2025 by 4.3% annualized. The new January outlook on GDP growth for 2026 and 2027 is 2.6% and 1.5%, respectively, which is an increase for 2026 from December’s projection of 2.1% and a decrease for 2027, which was 1.9%.
Current report
According to CoStar, the U.S. apartment market's supply-demand dynamic is ready for a rebalancing. Net deliveries in the fourth quarter of 2025 fell below 100,000 units, a decline of more than 30% from the same period a year earlier. After compressing slightly in the first half of 2025, vacancy increased in the second half of the year to its current rate of 8.6%. This prolonged imbalance signals a combination of cooling renter demand and lingering elevated new construction, which will keep vacancy high in the near term. Vacancy rates increased among quality segments, rising to 11.2% for 4- and 5-Star buildings, 8.1 % among 3 Star buildings and 6.1% for 1- & 2-Star buildings. Absorption in upcoming quarters is expected to slowly chip away at the nation's overall vacancy rate, which is forecast to decline from 8.5% at year-end 2025 to 8.4% by the fourth quarter of 2026. While overall vacancy is expected to decline in 2026, stabilized vacancy is forecast to inch upward through the first quarter of 2027, reflecting ongoing efforts to absorb the supply overhang built up over the past two years. This separation, easing overall vacancy alongside continually elevated stabilized vacancy, suggests rent growth improvement may be gradual, with its pace tempered by softness in stabilized communities.
Current report
Per CoStar, developers pushed supply to a 40-year high in 2024, with annual net deliveries peaking above 700,000 units in the fourth quarter. Annual supply fell by 25% in 2025 to approximately 523,000 units and is expected to decline by more than 36% in 2026 to approximately 333,000 units, the lowest level since 2014. The effect of the slowdown is not symmetrical across the nation. Phoenix, Atlanta, Houston, and Austin are forecasting significant delivery/supply cuts. Under-construction volumes also fell sharply in the fourth quarter of 2025, including declines of nearly 2,000 units in Austin, and notable reductions in Phoenix. On the opposite side of the spectrum, eleven of the largest 50 markets posted year-over-year increases in deliveries in 2025, with Los Angeles, Boston, and Columbus among the markets with rising supply. Miami and Charlotte lead nationally, with more than 8 percent of existing inventory under construction, the highest ratios in the country per CoStar.
Current report
Sale transaction activity, which contracted sharply beginning in 2022, has not only stabilized but accelerated, closing 2025 at approximately $135 billion. The rebound reflects a convergence of easing credit conditions, improved liquidity, and investor expectations after three Federal Reserve rate cuts in 2025. Private investors accounted for more than half of acquisitions in 2025, while institutional managers represented roughly one-quarter. This mixture of buyers illustrates a market where private capital is ample and the most likely to execute value-add and opportunistic strategies, while institutional funding remains selective, favoring cash-flowing strategies in supply constrained submarkets.
Current report
An uncertain economic outlook dampened the office sector’s momentum through 2025. The national vacancy rate remained at its all-time high at 14.1% at December 31, 2025. On an encouraging note, supply growth has diminished to a historically low level. Net absorption turned positive in each of the final two quarters of 2025, offsetting occupancy losses earlier in the year. Given the overall improvement in performance, the CoStar forecast anticipates a vacancy plateau through 2026, followed by a gradual decrease. Rent growth is expected to strengthen in 2026, led by premium and Class A buildings.
Current report
The demand recovery is complex and variable both across and within the country's major cities, according to CoStar. Only about half of major metro areas have posted occupancy gains in the past 12 months, a historically unique occurrence which indicates the fragmented nature of the market. One obstacle to recovery is the stalling out of office using job growth. The hiring slowdown has been mitigated somewhat by a meaningful increase in office attendance. However, much return-to-office momentum seems to be driven by an increase in in-office work by "hybrid" employees. These attendance and employment trends are now interacting with a lack of desirable new supply in many markets to bring availability meaningfully down. The overall national rate has fallen 100 basis points from its peak at 16.5% in early 2024, with four- and five-star buildings seeing even sharper declines. Slowing construction is a major factor, and one result is that there are now approximately 60 fewer Class A buildings in major markets able to accommodate requirements of 100,000 square feet than there were at the start of 2025.
Current report
CoStar reported office asking rents have risen little for approximately the past 5 years. Outside of premium buildings and a few strong warm-weather markets, CoStar projects that effective rents are likely to remain stagnant for the next 12 to 18 months even as nominal rates begin to pick back up.
Current report
Investment activity continued to build during 2025, with sales volume reaching $58 billion, a 26% increase from the prior year. The number of office deals that traded during the year were double digits above last year's pace. Even as fundamentals remain fluid, investors are monitoring a potential change in leasing demand. The latter half of 2025 posted the first positive net absorption since 2021 just as the national vacancy rate reached its projected peak. The next several quarters may prove to be a pivotal time for restoring confidence in the office market. If current projections play out, the market could witness the convergence of peaking vacancies, steady leasing activity, a trough in rent growth, and accelerating capital flows. At the same time, the climb in CMBS delinquency rates in recent years is a good reminder that the office recovery is in early stages and will require a multi-year period of incremental progress to fully regain its footing.
Current report
The U.S. retail market experienced a challenging first half of 2025 with store closures and increased bankruptcy filings since 2020. The sector had a positive turn starting in the third quarter of 2025 that continued into the fourth quarter of 2025 with clear signs of stabilization and renewed momentum. The combination of low space availability, steady demand from a diverse array of areas, and minimal new supply should limit the magnitude of any vacancy expansion. The updated forecast calls for move-ins to rise further in the fourth quarter, supporting a stable to improving outlook for absorption and rents. While the balance of risks remains tilted to the downside, the sector's supply-constrained nature and the ongoing shift toward service and experience-based retail continue to reinforce expectations for steady long-term performance.
Current report
The share of available space leased each quarter remains elevated, and the median time to lease fell to a new historic low of under 7 months in the third quarter of 2025 (down from 7.3 months for the year and 7.5 months in the first quarter of 2025). Store closures, while a drag on net demand, have provided much-needed supply for expanding tenants. Costar market participants reported exceptionally strong backfill demand for spaces as they became available, with some landlords achieving rent increases of 40% or more on newly leased units. Leasing activity remained limited in number but meaningful in square footage. The following notable entities signed for more than 200,000 SF over the course of the year for 2025, demonstrating that well-located, large format space continues to attract demand when available: Crunch Fitness, The Picklr, Burlington, Hobby Lobby, and Academy Sports.
Current report
Rent growth moderated over the course of 2025, reflecting a normalization from the rapid gains seen in the prior two years. Rent performance continues to diverge across markets and segments. Metros in the South and West with strong population and income growth such as Austin, Dallas, and Orlando are outperforming, with annual rent gains of 3–5% or more. In contrast, supply-heavy and slow-growth markets, particularly in the Northeast and Midwest, have lagged, with some even experiencing negative rent growth. High-cost coastal markets are also contending with elevated pass-through costs and slower demand formation, contributing to a performance gap. Looking ahead, rent growth is expected to remain restrained over the next several quarters as the market works through the backlog of space from recent closures. However, much of this space is expected to backfill quickly given the persistent shortage of quality inventory and minimal new construction. As a result, rent growth is forecast to remain in line with recent historical averages. Smaller, well-located spaces and fast-growing metros are expected to continue outperforming, while assets in slower-growth markets face ongoing challenges.
Current report
Current U.S. industrial market performance continues to favor the tenant, reporting a decade-long high vacancy rate of 7.5%. Deliveries continued to outpace net absorption in 2025 and impending supply additions will pressure vacancy higher, in conjunction with pressure from ongoing concerns regarding consumer spending. Assuming the economy continues to expand, although at a reduced pace, vacancy is forecast to increase through 2026, peaking at around 8%, and begin declining into 2027 as deliveries moderate. The forecast for weaker absorption and higher near-term vacancy reflects a projected slowdown in U.S. retail spending growth, which Oxford Economics expects to remain positive but slow in 2026.
Current report
Annual net absorption remains sluggish, measuring 90.1 million SF over the last 12 months; however, it has strengthened in the second half of 2025. Tariffs present a risk to demand for logistics buildings, particularly in major West Coast port-dependent markets, as import traffic and U.S. consumer spending could slow. While industrial building deliveries are set to moderate further as the
Current report
construction pipeline thins, supply growth will still likely outpace net absorption in upcoming quarters. Industrial tenants remain active, but the pace of new available space listings hitting the market continues to rise, outpacing leasing and raising the U.S. industrial availability rate, which, included under construction supply. Availability increased in most markets across the country. However, smaller spaces continue to lease relatively quickly. Spaces under 50,000 SF had a median month to lease of under 5 months in 2025, compared to 6.2 months for 50,000 to 100,000 SF spaces, and 8 months for spaces over 100,000 SF.
Current report
Rents for big-box logistics buildings have declined, while rent growth for small bay buildings remained positive. Rent growth has slowed down from a record gain of over 10% in 2022, diminishing further in 2025 from a 3.2% increase at the end of 2024. Nevertheless, due to the record rent growth achieved from 2021 through 2023, owners in many markets are still able to increase in-place rents when their tenants' long-term leases expire. While concessions were almost nonexistent when the market was booming during 2021 and 2022, three months of free rent are increasingly attainable on 5-to 7-year leases. Elevated vacancy levels will likely continue to restrict landlords' ability to raise rents on large buildings, while weak economic conditions and large rent increases recorded in recent years limit smaller tenants' ability to absorb further sharp increases in rent. Rent growth in 2026 will likely moderate for a third consecutive year due to elevated vacancy, even if net absorption increases gradually. Per CoStar, there is potential for rent growth to accelerate given the limited amount of new supply underway, downside risks to demand from trade disruption and a potential slowdown in U.S. retail spending weigh on the forecast.
Current report
The Company maintains its focus on technology initiatives and advancements with its current core provider. Several projects to improve customer-facing online services and delivery continue to move forward. These investments in both foundational projects and a heightened customer experience continue to foster an organizational emphasis on innovation and forward progress.
Current report
In October 2018, the Company entered into an interest rate swap transaction which was terminated in March 2020. Upon termination, the Company received $45.9 million, inclusive of accrued but unpaid interest, from its swap counterparty. The net amount, after deducting accrued interest and deferred income taxes, was accreted to interest income on loans monthly until the originally scheduled termination date of October 6, 2025. After this date, the Company no longer had the benefit of that income from the terminated swap. The Company recorded interest income related to the interest rate swap of $6.2 million and $8.1 million in the years ended December 31, 2025 and 2024, respectively.
Current report
Interest income on other interest-earning assets decreased $1.0 million in the year ended December 31, 2025, compared to the year ended December 31, 2024. Average interest rates fell from 5.09% during the year ended December 31, 2024, to 4.10% during the year ended December 31, 2025, resulting in a decrease of $966,000 in interest income. This decrease in rate was due to reductions in market interest rates in late 2024 and late 2025, resulting in lower rates paid on deposits at the FRB. Interest income decreased $73,000 as a result of a decrease in average balances, from $98.6 million during the year ended December 31, 2024, to $97.1 million during the year ended December 31, 2025.
Current report
Interest expense on demand and savings deposits decreased $6.7 million during the year ended December 31, 2025, when compared to the year ended December 31, 2024. Average rates of interest on these accounts decreased from 1.71% in the year ended December 31, 2024 to 1.40% in the year ended December 31, 2025, resulting in a $7.0 million decrease in interest expense. Interest rates paid on demand deposits were lower in 2025 due to the Company strategically lowering rates throughout the year, as market rates decreased. Partially offsetting this decrease, the average balances of demand and savings deposits increased from $2.23 billion in the year ended December 31, 2024 to $2.25 billion in the year ended December 31, 2025, resulting in an increase in interest expense on demand and savings deposits of $283,000.
Current report
Interest expense on short-term borrowings (including overnight borrowings from the FHLBank and BTFP borrowings from FRBSTL) and other interest-bearing liabilities decreased $3.6 million during the year ended December 31, 2025 when compared to the year ended December 31, 2024. The average rate of interest on short-term borrowings and other interest-bearing liabilities decreased from 5.09% for the year ended December 31, 2024 to 4.50% for the year ended December 31, 2025, resulting in a decrease in interest expense of $2.0 million during the year. Interest rates on these borrowings decreased after the federal funds rate was cut in late 2024 and during 2025. Interest expense on short-term borrowings and other interest-bearing liabilities decreased $1.6 million due to lower average balances during the year ended December 31, 2025 when compared to the year ended December 31, 2024. The average balance of short-term borrowings and other interest-bearing liabilities decreased from $358.3 million in the year ended December 31, 2024 to $325.1 million in the year ended December 31, 2025. The Company chose to utilize more brokered deposits versus short-term borrowings in 2025.
Current report
At December 31, 2025, the non-performing one-to four-family residential category included six loans, three of which were added during 2025. The largest relationship in this category, totaling $821,000, was added to nonperforming loans during 2024, and is collateralized by multiple low-income single-family residential properties in New Orleans, La. This relationship was resolved through a sheriff’s sale of the assets in the first quarter of 2026, with no loss anticipated. Collateral for another unrelated loan in this category, a condominium in Florida totaling $614,000, was foreclosed upon in the first quarter of 2026. During 2025, non-performing one- to four-family residential loans experienced four loan pay-offs totaling $1.5 million. The only loan in the non-performing land development category at the beginning of 2025 paid off during the year. Additionally, there were two loans in the non-performing commercial business category at the beginning of 2025. One of these loans paid off and the other was charged off during 2025. The non-performing consumer category included three loans at December 31, 2025.
Current report
At December 31, 2025, the one- to four-family residential category of potential problem loans included 14 loans, seven of which were added during 2025. The largest relationship in this category totaled $262,000 and was added during the current year. It is collateralized by a single-family residential property in the St. Louis area. During 2025, one loan relationship in the one- to four-family residential category ($963,000), which was reclassified from the consumer category, was upgraded from the substandard category to non-classified, removing it from potential problem loan status. During 2025, one loan relationship in the commercial real estate ($4.3 million) and consumer ($784,000) categories was upgraded from the substandard category to the special mention category, removing it from potential problem loan status. This relationship is collateralized by three nursing care facilities located in southwest Missouri. The consumer category of potential problem loans included 15 loans, nine of which were added during 2025.
Current report
Loans classified as “Watch” are being monitored due to indications of potential weaknesses or deficiencies that may require future reclassification as special mention or substandard. Loans classified as “Watch” increased $4.6 million, from $15.9 million at December 31, 2024 to $20.5 million at December 31, 2025, due to the addition of four loans totaling $11.1 million, partially offset by loans totaling $4.8 million being downgraded during 2025 and net payments on “Watch” loans totaling $1.7 million. Of the total loans added to the “Watch” category, one relationship totaled $10.5 million and is collateralized by a senior residential healthcare facility in Florida.
Current report
While loans classified as “Special Mention” are not adversely classified, they are deserving of management’s close attention to ensure repayment prospects or the credit position of the assets does not deteriorate and expose the institution to elevated risk to warrant adverse classification at a future date. In the year ended December 31, 2025, loans classified as “Special Mention” increased $33.3 million, from $1.5 million at December 31, 2024 to $34.8 million at December 31, 2025, due to the addition of three loan relationships totaling $34.7 million, partially offset by payoffs of $1.4 million during 2025. The largest relationship added to the “Special Mention” category totaled $24.8 million and is collateralized by a multi-family housing project in Denver, Colorado. The second relationship totaled $5.2 million and is collateralized by three nursing facilities in the Springfield, Missouri area. This relationship was upgraded from the “Substandard” category. The third relationship totaled $4.8 million and was downgraded from the “Watch” category and is collateralized by a golf course, clubhouse and other amenities in the Springfield, Missouri area.
Current report
Late charges and fees on loans: Late charges and fees on loans increased $681,000 during 2025 compared to 2024. This increase was primarily due to prepayment fees on a few large commercial real estate loans, which paid off in 2025.
Current report
Net occupancy and equipment expense: Net occupancy expenses increased $3.2 million, or 9.9%, in 2025 from 2024. Various components of computer license and support expenses, related to upgrades of core systems capabilities and disaster recovery site, collectively increased by $1.9 million in 2025 compared to 2024. During 2025, the Company recorded expenses totaling $287,000 related to adjustments to asset values for branch closures and certain leased facilities. Also, during 2025, the Company recorded a total of $935,000 of seasonal expenses for snow removal and parking lot repairs, compared to $682,000 in 2024.
Current report
Other operating expenses: Other operating expenses decreased $2.5 million, or 23.9%, from the prior year. In 2024, the Company recorded expenses totaling $600,000 related to the resolution of compliance matters. Also in 2024, the Company expensed $2.0 million due to developments related to a litigation/contract dispute matter. In 2025, there were no similar expenses recorded for these matters.
Removed paragraphs (37)
Previous report
On January 1, 2021, the Company adopted the new accounting standard related to the allowance for credit losses. This standard eliminates the probable initial recognition threshold in GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. SeeNote 3 to the accompanying financial statements contained in Item 8 of this Report for additional information.
Previous report
Based on Moody’s U.S. Baseline Outlook and Alternative Scenarios Analysis dated January 2025, real GDP in 2025 is projected to be 2.2% on an annual average basis, which is unchanged from the projection in December 2024. GDP is projected to grow 1.7% in 2026 and 1.9% in 2027, before returning to trend in 2028. Consumer spending remained an important source of growth, along with exports, nonresidential investment both federal and state, and local spending.
Previous report
The U.S. multi-family market experienced a continued strong recovery in demand through 2024, driven by stable economic growth plus a continued slowing of renter households making the jump to ownership and creating fewer units to backfill. Despite the notable growth in demand in 2024, the influx of new supply continued to saturate the market. The gap closed significantly in the second half of 2024. In the fourth quarter of 2024, the supply/demand gap only totaled 24,000 units, the smallest amount since the end of 2021. Most new supply additions are concentrated at the 4 and 5 Star price point, contributing to the weakest rent growth observed in this level of the market. Consequently, the persistent imbalance between supply and demand stabilized the vacancy rate in the fourth quarter of 2024 at 8%.
Previous report
CoStar reported, nationally, absorption continued to accelerate in the fourth quarter of 2024, offering the market an opportunity to stabilize and possibly begin recovering. The year ended December 31, 2024 saw 553,000 units absorbed, which was the strongest year since 2021. Despite this demand, 677,000 new units were completed in 2024, which completes three years in a row in which supply outpaced demand. Forecasts for 2025 show demand finally outpacing deliveries, which positions the market to see the vacancy rate begin declining. The 4 & 5 Star segment exhibited the weakest performance, at 0.2%, a slight improvement from the negative or zero year-over-year rent growth experienced over the past year due to increasing vacancies.
Previous report
The Midwest and Northeast regions have fared the best over the past two years in terms of rent growth. Deliveries in the Midwest for 2024 were only 22,000 units higher than in 2019. This controlled increase in projected new supply is expected to keep Midwestern markets more balanced, thereby avoiding the oversupply conditions that contributed to weaker rent growth in the Sun Belt. At the market level, projections suggest that all but 2 major markets, Austin and San Antonio, will return to positive rent growth by the end of 2025. Kansas City was one of the metropolitan areas with the most robust rent growth at the end of 2024.
Previous report
Absorption for the office industry was flat for 2024, and the vacancy rate has remained unchanged since September 2024 at 13.9%. CoStar expects the vacancy rate to rise further before plateauing in 2026. Rents are expected to flatten out in the next 12 months before beginning a recovery driven by stabilizing demand and a lack of relevant, competitive supply. Various indicators show office attendance was still trending upward, albeit slowly. But while attendance was rising, office-using job growth had nearly stalled.
Previous report
The stock of office space rose by about 25 million square feet in 2024 with a similar amount forecasted in 2025. The ongoing reset in property values could lead to lower asking rates as more buildings transact at significant discounts to prior valuations. The national trend showed a shrinking pipeline, as some cities, like Austin, TX, faced near-term supply pressure with only 3% of inventory underway.
Previous report
CoStar reported office asking rents have remained steady over the past four years, and said a combination of aggressive discounts by new, low-basis owners, a looming lack of available space in premium new buildings, and an ongoing amount of sublease inventory is expected to keep office asking rents flat for the next 12 to 18 months. With attendance rising only gradually and job growth stagnant, there appears little likelihood of a dramatic change in demand conditions in the next 18-24 months.
Previous report
As of December 31, 2024, the U.S. retail market was in one of its firmest fundamental positions on record thanks to steadily rising demand and limited new supply. However, there has been a sharp uptick in bankruptcies and store closures. At that date, there was just 501 million SF of space available for lease across the U.S., which was almost 125 million SF below the amount available for lease during the height of the pandemic.
Previous report
As transaction volumes trended higher, the rise in cap rates was settling down. Higher exit caps have made it more challenging for developers to meet their proformas and an increasing number are choosing to hold instead of taking their assets to market. The shift in cap rates over the last two years was evident in the trend of single-tenant investment sales of net leased properties. Fewer buyers were in the market, and investment opportunities continued to expand. Unanchored and open-air shopping centers have seen cap rates above 7%, occasionally climbing into the 8% to 9% range, depending on market specifics and the quality of the asset. However, the limited new retail construction and historically low availability rates should limit any potential surge in vacancy rates in the event of a demand pullback.
Previous report
U.S. industrial market performance continued to downshift in the fourth quarter of 2024. While the national vacancy rate is not expected to rise above its 20-year average of 7.0%, forecasts for 2025 could still prove challenging for the market. Net absorption has remained positive but continued to lose steam, with early 2024 registering the lowest first quarter absorption tally since 2012. Net absorption for 2024 was 101 million SF compared to 133 million SF for 2023. This weakness tied partly to recent 12-year lows in home sales, which lowered sales of furniture, building materials, and appliances, leading to large distribution center closures by tenants including Big Lots, Ashley Furniture, and Home Depot.
Previous report
The prospect of escalating tariffs at home and abroad could make retailers hesitant to expand distribution networks until the threat of additional trade barriers dissipates. Significant tariff increases would also force retailers to raise prices, decreasing the volume of goods consumers are able to purchase. During November 2024, the CFO of Walmart, the third largest user of U.S. industrial space, noted that tariffs “are inflationary for customers” and that “there probably will be cases where prices will go up for consumers.”
Previous report
The U.S. industrial market is nearing the end of a record development surge. Higher interest rates have caused construction starts on new industrial projects to fall over the past two years. Quarterly net supply additions are on pace to fall below the pre-pandemic three-year average by mid-2025 and continue declining through at least 2026 when supply growth is set to hit an 11-year low. A gradual but persistent decline in speculative development completions has already begun. As of December 31, 2024, the amount of vacant space among existing Phoenix logistics properties 50,000 SF or larger has increased by 35 million SF, primarily due to speculative development since 2019 pushing the vacancy rate among these buildings over 19%, while another 11 million SF worth of unleased space remained under construction.
Previous report
Nationally, year-over-year industrial rent growth decelerated over the past 12 months to 2.3%, a rate which was below the pre-pandemic five-year average. In the near term, it is expected that rent growth will slow further in both the small bay and big box logistics sectors. If net absorption can gradually increase, there is potential for rent growth to reaccelerate and return to the pre-pandemic three-year average of 5.5% by 2026, given the limited amount of new supply that will likely be on track to be completed during the year. However, big box logistics properties in markets most saturated with speculative development such as Austin, Indianapolis, Greenville/Spartanburg, Phoenix, and San Antonio are most at risk of lagging in any developing rent recovery, either due to slower asking rent increases or lingering, high levels of concessions.
Previous report
During 2020, we experienced some compression of our net interest margin due to Federal Fund rate cuts during the nine-month period of July 2019 through March 2020. 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. 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.
Previous report
Great Southern has previously reported certain issues and contractual disputes regarding its proposed conversion to a new core banking platform to be delivered by a third-party vendor. This ultimately led to Great Southern terminating the Master Agreement with the third-party vendor and initiating litigation against them, with the third-party vendor filing a counterclaim against Great Southern. In December 2024, an agreement in principle was reached between Great Southern and the third-party vendor whereby the Master Agreement would be terminated and the parties’ card servicing agreement would be continued and expanded. Great Southern recorded a $2.0 million accrued expense in 2024 in connection with these developments. However, at this time, no assurance can be given as to when or whether final agreements will be executed and a full settlement of the matter will be achieved.
Previous report
Two long-term executive team members retired from the Company in 2024. Both announced their retirements at least a year in advance to ensure an orderly leadership transition.
Previous report
*Dodd-Frank Act.*In 2010, sweeping financial regulatory reform legislation entitled the “Dodd-Frank Wall Street Reform and Consumer Protection Act” (the “Dodd-Frank Act”) was signed into law. The Dodd-Frank Act implemented far-reaching changes across the financial regulatory landscape. 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.”
Previous report
*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 rules implement the “Basel III” regulatory capital reforms and changes required by the Dodd-Frank Act. “Basel III” refers to various documents released by the Basel Committee on Banking Supervision. For the Company and the Bank, the general effective date of the rules was January 1, 2015, and, for certain provisions, various phase-in periods and later effective dates apply. The chief features of these rules are summarized below.
Previous report
The rules refine the definitions of what constitutes regulatory capital and add a new regulatory capital element, common equity Tier 1 capital. The minimum capital ratios are (i) a common equity Tier 1 (“CET1”) risk-based capital ratio of 4.5%; (ii) a Tier 1 risk-based capital ratio of 6%; (iii) a total risk-based capital ratio of 8%; and (iv) a Tier 1 leverage ratio of 4%. In addition to the minimum capital ratios, the rules include a capital conservation buffer, under which a banking organization must have CET1 more than 2.5% above each of its minimum risk-based capital ratios in order to avoid restrictions on paying dividends, repurchasing shares, and paying certain discretionary bonuses. The capital conservation buffer became fully implemented on January 1, 2019.
Previous report
These rules also revised the prompt corrective action framework, which is designed to place restrictions on insured depository institutions if their capital levels show signs of weakness. Under the revised prompt corrective action requirements, insured depository institutions are required to meet the following in order to qualify as “well capitalized:” (i) a common equity Tier 1 risk-based capital ratio of at least 6.5%, (ii) a Tier 1 risk-based capital ratio of at least 8%, (iii) a total risk-based capital ratio of at least 10% and (iv) a Tier 1 leverage ratio of 5%, and must not be subject to an order, agreement or directive mandating a specific capital level.
Previous report
*Economic Growth Act.*In May 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Economic Growth Act”), was enacted to modify or eliminate certain financial reform rules and regulations, including some implemented under the Dodd-Frank Act. While the Economic Growth Act maintains most of the regulatory structure established by the Dodd-Frank Act, it amends certain aspects of the regulatory framework for small depository institutions with assets of less than $10 billion and for large banks with assets of more than $50 billion. Many of these amendments could result in meaningful regulatory changes.
Previous report
The Economic Growth Act, among other matters, expands the definition of qualified mortgages which may be held by a financial institution and simplifies the regulatory capital rules for financial institutions and their holding companies with total consolidated assets of less than $10 billion by instructing the federal banking regulators to establish a single “Community Bank Leverage Ratio” (“CBLR”) of between 8 and 10 percent. 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%. The Company and the Bank have chosen to not utilize the new CBLR due to the Company’s size and complexity, including its commercial real estate and construction lending concentrations and significant off-balance sheet funding commitments.
Previous report
In addition, the Economic Growth Act includes regulatory relief in the areas of examination cycles, call reports, mortgage disclosures and risk weights for certain high-risk commercial real estate loans.
Previous report
In October 2018, the Company entered into an interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap was $400 million with a contractual termination date in October 2025. As previously disclosed by the Company, in March 2020, the Company and its swap counterparty mutually agreed to terminate this swap, effective immediately. The Company was paid $45.9 million, including accrued but unpaid interest, from its swap counterparty as a result of this termination. This $45.9 million, less the accrued to date interest portion and net of deferred income taxes, is reflected in the Company’s stockholders’ equity as Accumulated Other Comprehensive Income (AOCI) and is being accreted to interest income on loans monthly through the original contractual termination date of October 6, 2025. This has had the effect of reducing AOCI and increasing Net Interest Income and Retained Earnings over the periods. The Company recorded interest income related to the interest rate swap of $8.1 million in each of the years ended December 31, 2024 and December 31, 2023. After October 6, 2025, the Company will no longer have the benefit of that income from the terminated swap. In 2025, the Company anticipates recording approximately $2.0 million in interest income from the terminated swap in each of the first three quarterly periods, after which no further interest income will be realized. At December 31, 2024, the Company expected to have a sufficient amount of eligible variable rate loans to continue to accrete this interest income ratably in 2025. 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.
Previous report
The Company may use interest rate swaps from time to time to manage its interest rate risks from recorded financial liabilities, primarily brokered deposits. These interest rate swaps have allowed the Company to create funding of varying maturities at a variable rate that in the past has approximated three-month SOFR. In February 2023, the Company entered into five new interest rate swap transactions totaling $95.0 million. The Company elected to terminate these swaps in 2024, prior to their contractual termination date in February 2025. The Company received a net settlement payment from the swap counterparty totaling $26,500 upon termination. The Company did not utilize these types of interest rate swaps on brokered deposits in 2024 or 2022.
Previous report
Interest income on other interest-earning assets increased $2.9 million in the year ended December 31, 2023 compared to the year ended December 31, 2022. Interest income increased $3.3 million as a result of higher average interest rates from 1.05% during the year ended December 31, 2022, to 5.04% during the year ended December 31, 2023. Partially offsetting that increase, interest income decreased $436,000 as a result of a decrease in average balances from $195.8 million during the year ended December 31, 2022, to $98.0 million during the year ended December 31, 2023. The increase in average interest rates was due to the increase in the rate paid on funds held at the Federal Reserve Bank. This rate was increased multiple times in 2022 and 2023 in conjunction with the increase in the Federal Funds target interest rate. The decrease in average balances was due to utilization of these funds in loan originations and securities purchases.
Previous report
The Company’s net interest income was negatively impacted in 2023 by the high level of competition for deposits due to asset growth across the industry and the lingering effects of liquidity events at several banks in March 2023. The Company also had a substantial amount of time deposits maturing at relatively low rates in the second quarter of 2023, and these time deposits either renewed at higher rates or left the Company, in turn requiring their replacement with other funding sources at then-current, higher market rates. In addition, sporadically throughout 2023, the Company experienced a higher-than-normal reduction in balances of non-interest-bearing deposits. Customer balances in both non-interest-bearing checking and interest-bearing checking accounts fluctuated during the year ended December 31, 2023. As market interest rates for certain checking account types and time deposit accounts have increased, some customers have chosen to reallocate funds into higher-rate accounts.
Previous report
During the year ended December 31, 2023, the Company recorded a provision expense of $2.3 million on its portfolio of outstanding loans, compared to a provision expense of $3.0 million for the year ended December 31, 2022. The Company experienced net charge offs of $1.1 million for the year ended December 31, 2023 compared to net charge offs of $274,000 for the year ended December 31, 2022. The Company recorded a negative provision for losses on unfunded commitments of $5.3 million for the year ended December 31, 2023, compared to provision expense of $3.2 million for the year ended December 31, 2022. General market conditions and unique circumstances related to specific industries and individual projects contribute to the level of provisions and charge-offs.
Previous report
Compared to December 31, 2022, non-performing loans increased $8.1 million to $11.7 million at December 31, 2023, and foreclosed assets decreased $27,000, to $23,000 at December 31, 2023. The majority of the increase in non-performing loans was in the non-performing commercial real estate loans category, which increased $9.0 million from December 31, 2022, primarily due to one loan relationship being added to the category in 2023.
Previous report
At December 31, 2023, the non-performing commercial real estate category included four loans, two of which were added during the year ended December 31, 2023. The largest relationship in this category, which totaled $8.1 million, or 76.4% of the total category, was added to non-performing loans during the three months ended June 30, 2023 and was collateralized by an office building in Missouri. The loan was classified due to a decline in occupancy resulting in a stressed cash flow. In 2023, occupancy improved somewhat and lease income from the building continued, and the Company received some principal paydowns from the borrower. Another significant relationship was added to the commercial real estate category in the three months ended December 31, 2023. This relationship totaled $2.2 million and was collateralized by an assisted living facility in Wisconsin. The non-performing one- to four-family residential category included three loans. The largest relationship in this category, which was added during 2023 and was collateralized by a single-family home in the Kansas City metro area, totaled $543,000, or 75.2% of the total category. The non-performing land development category consisted of one loan added in 2021, which totaled $384,000 and was collateralized by unimproved zoned vacant ground in southern Illinois. The non-performing commercial business category consisted of two loans that totaled $31,000 to a single borrower, both of which were added during 2023. The non-performing consumer category included six loans, three of which were added during 2023.
Previous report
At December 31, 2023, the other residential (multi-family) category of potential problem loans included one loan, which totaled $7.2 million, and was added in 2023. This loan was collateralized by an apartment and retail project in Oklahoma City, OK. This loan was added to potential problems loans due to a decline in occupancy resulting in a stressed cash flow. At December 31, 2023, the one- to four-family residential category of potential problem loans included two loans. The largest relationship in this category totaled $99,000, or 62.5% of the total category. The consumer category of potential problem loans included six loans.
Previous report
Loans classified as “Watch” decreased $20.4 million, from $28.7 million at December 31, 2022 to $8.3 million at December 31, 2023, primarily due to the combination of one large loan being upgraded to “Satisfactory,” one unrelated large loan being downgraded to “Substandard” and added to non-performing loans, and one unrelated loan being downgraded to “Special Mention.” While loans classified as “Special Mention” are not adversely classified, they are deserving of management’s close attention to ensure repayment prospects or the credit position of the assets does not deteriorate and expose the institution to elevated risk to warrant adverse classification at a future date. In the year ended December 31, 2023, loans classified as “Special Mention” increased $26.7 million as four loan relationships were downgraded from “Satisfactory.” The largest relationship consisted of four commercial business loans totaling $9.9 million at December 31, 2023 and were secured by business assets, equipment, accounts receivable and real estate. The relationship was added to the “Special Mention” category during 2023 due to stressed cash flow associated with business expansion. At December 31, 2023, a $9.6 million relationship was included in the “Special Mention” category. The balance represented a participation in a loan collateralized by a student housing project in Texas. The Company was not the lead lender for this relationship. The project suffered from rising debt service requirements and a decline in occupancy. A relationship totaling $4.4 million at December 31, 2023 was added to the “Special Mention” category in 2023. This relationship was collateralized by three assisted care facilities located in southwest Missouri. Business cash flow was negatively impacted by a labor shortage and a decrease in Medicaid reimbursement during 2022-2023. Monthly payments continue to amortize the loan balance. SeeNote 3 for further discussion of the Company’s loan grading system.
Previous report
Other income: Other income decreased $1.2 million compared to the prior year. In 2022, a gain of $1.1 million was recognized on sales of fixed assets, with no similar transactions occurring in the current year.
Previous report
Gain (loss) on derivative interest rate products: In 2023, the Company recognized a loss of $337,000 on the change in fair value of its back-to-back interest rate swaps related to commercial loans and the change in fair value on interest rate swaps related to brokered time deposits. In 2022, the Company recognized a gain of $321,000 on the change in fair value of its back-to-back interest rate swaps related to commercial loans.
Previous report
Insurance: Insurance expense increased $1.3 million from the prior year. The increase was primarily due to previously announced increases in deposit insurance rates for the FDIC’s Deposit Insurance Fund.
Previous report
In addition, included in stockholders’ equity at December 31, 2024, were realized gains (net of taxes) on the Company’s cash flow hedge (interest rate swap), which was terminated in March 2020, totaling $4.8 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, 2024, the remaining pre-tax amount to be recorded in interest income was $6.2 million. The net effect on total stockholders’ equity over time will be no impact as the reduction of this realized gain will be offset by an increase in retained earnings (as the interest income flows through pre-tax income).
Reworded paragraphs (106)
Previous wording
When used in this Annual Report and in other documents filed or furnished by Great Southern Bancorp, Inc. (the “Company”) with the Securities and Exchange Commission (the “SEC”), in the Company’s press releases or other public or stockholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases “may,” “might,” “could,” “should,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “believe,” “estimate,” “project,” “intends” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements also include, but are not limited to, statements regarding plans, objectives, expectations or consequences of announced transactions, known trends and statements about future performance, operations, products and services of the Company. The Company’s ability to predict results or the actual effects of future plans or strategies is inherently uncertain, and the Company’s actual results could differ materially from those contained in the forward-looking statements.
Current wording
When used in this Annual Report and in other documents filed or furnished by Great Southern Bancorp, Inc. (the “Company”) with or to the Securities and Exchange Commission (the “SEC”), in the Company’s press releases or other public or stockholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases “may,” “might,” “could,” “should,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “believe,” “estimate,” “project,” “intends” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements also include, but are not limited to, statements regarding plans, objectives, expectations or consequences of announced transactions, known trends and statements about future performance, operations, products and services of the Company. The Company’s ability to predict results or the actual effects of future plans or strategies is inherently uncertain, and the Company’s actual results could differ materially from those contained in the forward-looking statements.
Previous wording
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 effects of any new or continuing public health issues on general economic and financial market conditions; (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. The Company wishes to advise readers that the factors listed above and other risks described in the Company’s most recent Annual Report on Form 10-K, includi…
Excerpt shortened here; the source contains the full paragraph.
Current wording
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 effects of any new or continuing public health issues on general economic and financial market conditions; (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 or negative economic growth caused by tariffs,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 the 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. The Company wishes to advise readers that the factors listed above and other risks described in this Annual Report on Form 10-K, including, without …
Excerpt shortened here; the source contains the full paragraph.
Previous wording
SeeNote 3 “Loans and Allowance for Credit Losses” to the accompanying financial statements for additional information regarding the allowance for credit losses. Inherent in this process is the evaluation and risk assessment of individual credit relationships. From time to time, certain credit relationships may deteriorate due to changes in payment performance, cash flow of the borrower, value of collateral, or other factors. Due to these changing circumstances, management may revise its loss estimates and assumptions for these specific credits. In some cases, losses may be realized; in other instances, the factors that led to the deterioration may improve or the credit may be refinanced elsewhere and allocated allowances may be released from the particular credit.
Current wording
The Company measures the allowance for credit losses under ASU 2016-13,Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, referred to as the CECL methodology. SeeNote 3 to the accompanying financial statements contained in Item 8 of this Report for additional information. Inherent in this process is the evaluation and risk assessment of individual credit relationships. From time to time, certain credit relationships may deteriorate due to changes in payment performance, cash flow of the borrower, value of collateral, or other factors. Due to these changing circumstances, management may revise its loss estimates and assumptions for these specific credits. In some cases, losses may be realized; in other instances, the factors that led to the deterioration may improve or the credit may be refinanced elsewhere and allocated allowances may be released from the particular credit.
Previous wording
Goodwill and intangible assets that have indefinite useful lives are subject to an impairment test at least annually and more frequently if circumstances indicate their value may not be recoverable. Goodwill is tested for impairment using a process that estimates the fair value of each of the Company’s reporting units compared with its carrying value. 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, 2024, the Company had one reporting unit to which goodwill has been allocated – the Bank. If the fair value of a reporting unit exceeds its carrying value, then no impairment is recorded. If the carrying value 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. Intangible assets that are not amortized are tested for impairment at least annually by comparing the fair values of those assets to their carrying values. At December 31, 2024, 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 the assumption of related deposits in the St. Louis market. Other identifiable deposit intangible assets that are subject to amortization are amortized on a straight-line basis over a period of seven years and have been fully amortized.
Current wording
Goodwill and intangible assets that have indefinite useful lives are subject to an impairment test at least annually and more frequently if circumstances indicate their value may not be recoverable. Goodwill is tested for impairment using a process that estimates the fair value of each of the Company’s reporting units compared with its carrying value. 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, 2025, the Company had one reporting unit to which goodwill has been allocated – the Bank. If the fair value of a reporting unit exceeds its carrying value, then no impairment is recorded. If the carrying value 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. Intangible assets that are not amortized are tested for impairment at least annually by comparing the fair values of those assets to their carrying values. At December 31, 2025, 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 the assumption of related deposits
Previous wording
At December 31, 2024, the amortizable intangible assets consisted of the arena naming rights of $4.7 million. The amortizable intangible assets are reviewed for impairment if circumstances indicate their value may not be recoverable based on a comparison of fair value. SeeNote 1 to the accompanying audited financial statements for additional information.
Current wording
At December 31, 2025, the amortizable intangible assets consisted of the arena naming rights of $4.3 million. The amortizable intangible assets are reviewed for impairment if circumstances indicate their value may not be recoverable based on a comparison of fair value. SeeNote 1 to the accompanying audited financial statements for additional information.
Previous wording
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. Following the housing and mortgage crisis and correction beginning in mid-2007, the United States entered an economic downturn. Unemployment rose from 4.7% in November 2007 to peak at 10.0% in October 2009. Economic conditions improved in the subsequent years, as indicated by higher consumer confidence levels, increased economic activity and low unemployment levels. The U.S. economy continued to operate at historically strong levels until the COVID-19 pandemic in March 2020, which severely affected tourism, labor markets, business travel, immigration, and the global supply chain, among other areas. 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.
Current wording
Changes in economic conditions could cause the values of assets and liabilities recorded in the Company’s financial statements to fluctuate 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. Following the housing and mortgage crisis and correction beginning in mid-2007, the United States entered an economic downturn. Unemployment rose from 4.7% in November 2007 to peak at 10.0% in October 2009. Economic conditions improved in the subsequent years, as indicated by higher consumer confidence levels, increased economic activity and low unemployment levels. The U.S. economy continued to operate at historically strong levels until the COVID-19 pandemic in March 2020, which severely affected tourism, labor markets, business travel, immigration, and the global supply chain, among other areas. 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.
Previous wording
Additionally, the Federal Reserve acted decisively by slashing its benchmark interest rate to near zero and ensuring credit availability to businesses, households, and municipal governments. The Federal Reserve’s efforts largely insulated the financial system from the problems in the economy, a significant difference from the financial crisis of 2007-2008. Purchases of Treasury and agency mortgage-backed securities totaling $120 billion each month by the Federal Reserve commenced shortly after the pandemic began. In November 2021, the Federal Reserve began to taper its quantitative easing (QE), winding down its bond purchases with its final open market purchase conducted on March 9, 2022. The federal government deficit was $2.8 trillion in fiscal 2021, close to $1.4 trillion in fiscal 2022, and $1.7 trillion in fiscal 2023. The Federal Reserve aggressively raised the federal funds interest rates from early 2022 through mid-2023, pushing the federal funds rate to more than 5.50%, its highest level in 22 years.
Current wording
Additionally, the Federal Reserve acted decisively by slashing its benchmark interest rate to near zero and ensuring credit availability to businesses, households, and municipal governments. The Federal Reserve’s efforts largely insulated the financial system from the problems in the economy, a significant difference from the financial crisis of 2007-2008. Purchases of Treasury and agency mortgage-backed securities totaling $120 billion each month by the Federal Reserve commenced shortly after the pandemic began. In November 2021, the Federal Reserve began to taper its quantitative easing (QE), winding down its bond purchases with its final open market purchase conducted on March 9, 2022. The federal government deficit was $2.8 trillion in fiscal 2021, close to $1.4 trillion in fiscal 2022, and $1.7 trillion in fiscal 2023. The Federal Reserve aggressively raised the federal funds interest rates from early 2022 through mid - 2023, pushing the federal funds rate to more than 5.50%, its highest level in 22 years. The Federal Reserve’s actions were motivated by surging inflation in 2021 caused by pandemic-fueled spending, which outpaced the ability of producers to supply goods and services after having been impacted by COVID-related shutdowns and clogged transportation systems. The Federal Reserve made some headway in its attempt to force inflation down. The federal funds rate range was between 5.25% to 5.50% until mid-September
Previous wording
The Federal Reserve’s actions were motivated by surging inflation in 2021 caused by pandemic-fueled spending, which outpaced the ability of producers to supply goods and services after having been impacted by COVID-related shutdowns and clogged transportation systems. The Federal Reserve made some headway in its attempt to force inflation down. The personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred measure of inflation, eased from its peak of 7.1% in June 2022 to 2.9% in December 2023. Core PCE, which excludes food and energy prices, was 2.8% at December 31, 2024, above the Federal Reserve’s target of 2%.
Current wording
The personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred measure of inflation, eased from its peak of 7.1% in June 2022 to 2.9% in December 2023. At December 31, 2025, Core PCE, which excludes food and energy prices, rose 3.0% from one year ago, above the Federal Reserve’s target of 2%.
Previous wording
The national unemployment rate was unchanged compared to the previous quarter end at 4.1% for both December 2024 and September 2024. The number of unemployed individuals was 6.9 million as of December 2024 with 256,000 jobs added in December 2024. In December 2024, the healthcare, retail trade, government, social assistance, and leisure and hospitality areas contributed to the 188,000 of total job gains.
Current wording
The national unemployment rate decreased slightly to 4.4% for December 2025 compared to 4.6% for November 2025. The number of unemployed individuals was 7.5 million as of December 2025. Healthcare, social assistance, food services and drinking places and nonfarm payroll employment contributed 115,000 of total job gains in December 2025.
Previous wording
As of December 2024, the labor force participation rate (the share of working-age Americans employed or actively looking for a job) remained stable at 62.5%. The unemployment rate for the Midwest, where the Company conducts most of its business, increased from 3.6% in December 2023 to 4.1% in December 2024. Unemployment rates for December 2024 in the states where the Company has a branch or a loan production office were: Arizona at 3.8%, Arkansas at 3.4%, Colorado at 4.4%, Georgia at 3.7%, Illinois at 5.2%, Iowa at 3.2%, Kansas at 3.6%, Minnesota at 3.3%, Missouri at 3.7%, Nebraska at 2.8%, North Carolina at 3.7%, and Texas at 4.2%. These rates are slightly higher for a majority of the states compared to September 2024.
Current wording
As of December 2025, the labor force participation rate (the share of working-age Americans employed or actively looking for a job) remained stable at 62.4%. The unemployment rate for the Midwest, where the Company conducts most of its business, was unchanged from November 2025 to December 2025 at 4.1 %. Unemployment rates for December 2025 in the states where the Company has a branch or a loan production office were: Arizona at 4.3%, Arkansas at 4.2%, Colorado at 3.8%, Georgia at 3.6%, Illinois at 4.6%, Iowa at 3.5%, Kansas at 3.8%, Minnesota at 4.1%, Missouri at 3.9%, Nebraska at 3.0%, North Carolina at 3.9%, and Texas at 4.3%. These rates were relatively unchanged for a majority of the states compared to November 2025.
Previous wording
Existing-home sales increased by 2.2% in December 2024 to a seasonally adjusted annual rate of 4.24 million, up 9.3% from the previous year. In the Midwest, existing-home sales fell 1.0% in December 2024 to an annual rate of 990,000, up 6.5% from one year earlier.
Current wording
Existing-home sales increased 5.1% in December 2025, compared to November 2025, to a seasonally adjusted annual rate of 4.35 million; year-over-year existing home sales increased 1.4%. In the Midwest, existing-home sales slowed to 2.0% in December 2025 at an annual rate of 2.02 million, up 3.6% from one year earlier.
Previous wording
The median existing-home sales price rose 6.0% from December 2023 to $404,400 in December 2024, which is the 18th consecutive month of year-over-year price increases. The median price in the Midwest was $298,600, up 9.0% from December 2023. All regions reported median price increases when compared to the prior year.
Current wording
The median existing-home sales price rose 0.4% from December 2024 to $405,400 in December 2025. The median price in the Midwest was $306,000, up 3.1% from December 2024. The South and West regions reported median price decreases when compared to the prior year of 0.3% and 1.4%, respectively.
Previous wording
Total housing inventory registered at the end of December 2024 was 1.15 million units, down 13.5% from November 2024 and up 16.2% from 1.0 million at the end of December 2023. Unsold inventory sat at a 3.3-month supply at the end of December 2024, up from 3.1 months at the end of December 2023.
Current wording
Total housing inventory registered at the end of December 2025 was 1.18 million units, down 18.1% from November 2025 and up 3.5% from one year ago. Unsold inventory sat at a 3.3-month supply at the end of December 2025, down from 4.2 months in November 2025 and up 3.2 months in December 2024.
Previous wording
New home construction dropped precipitously after the financial crisis of 2007-2008 and has yet to fully recover. Issues contributing to the country’s current housing shortage include increasing labor and materials costs, availability of building materials, increased interest rates and tighter lending underwriting standards. Single-family housing starts in December 2024 were at a rate of 1.05 million; 3.3% above the revised November 2024 figure of 1.02 million.
Current wording
New home construction dropped precipitously after the financial crisis of 2007-2008 and has yet to fully recover. Issues contributing to the country’s current housing shortage include increasing labor and materials costs, availability of building materials, increased interest rates and tighter lending underwriting standards. Single-family housing starts in December 2025 were at a rate of 981,000, 4.1% above the revised figure for November 2025 of $942,000.
Previous wording
Sales of new single‐family houses in December 2024 were at a seasonally adjusted annual rate of 698,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development. This was 3.6% above the November 2024 rate of 674,000 and 6.7% above the December 2023 rate of 654,000.
Current wording
Sales of new single‐family houses in December 2025 were at a seasonally adjusted annual rate of 745,000 according to the U.S. Census Bureau and the Department of Housing and Urban Development. This was 1.7% below the November 2025 rate of 758,000 and 3.8% above the December 2024 rate of 718,000.
Previous wording
The median sales price of new houses sold in December 2024 was $427,000, in line with the $428,600 reported in December 2023. The average sales price in December 2024 of $513,600 was down from $514,000 in December 2023. The seasonally‐adjusted estimate of new houses for sale at the end of December 2024 was 494,000. This represented a supply of 8.5 months at the current sales rate.
Current wording
The median sales price of new houses sold in December 2025 was $414,400. This is 4.2% above the November 2025 median price of $397,600. The seasonally‐adjusted estimate of new houses for sale at the end of December 2025 represented a supply of 7.6 months at the current sales rate.
Previous wording
According to Freddie Mac, the average commitment rate for a 30-year, fixed-rate mortgage was 6.95% as of January 31, 2025 which was up from 6.63% one year ago.
Current wording
According to Freddie Mac, the average commitment rate for a 30-year, fixed-rate mortgage was 6.09% as of January 22, 2026, down from 6.96% one year ago.
Previous wording
The December 2024 national multi-family market vacancy rates were slightly higher than the previous quarter at 8%. Our market areas reflected the following apartment vacancy levels as of December 2024: Springfield, Missouri at 5.9%, St. Louis at 9.9%, Kansas City at 8.1%, Minneapolis at 7.6%, Dallas-Fort Worth at 11.2%, Chicago at 5.1%, Atlanta at 12.4%, Phoenix at 11.7%, Denver at 11.1% and Charlotte, North Carolina at 12.6%.
Current wording
Our market areas reflected the following apartment vacancy levels as of December 2025: Springfield, Missouri at 7.0%, St. Louis at 10.4%, Kansas City at 9.1%, Minneapolis at 6.5%, Dallas-Fort Worth at 12.1%, Chicago at 5%, Atlanta at 11.6%, Phoenix at 12.4%, Denver at 12.1% and Charlotte, North Carolina at 12.1%.
Previous wording
As of December 2024, national office vacancy rates remained stable at 13.9% compared to September 2024, while our market areas reflected the following vacancy levels: Springfield, Missouri at 4.2%, St. Louis at 9.7%, Kansas City at 11.2%, Minneapolis at 11.5%, Dallas-Fort Worth at 18%, Chicago at 16.7%, Atlanta at 16.7%, Denver at 17.2%, Phoenix at 16.7% and Charlotte, North Carolina at 14.5%.
Current wording
As of December 2025, national office vacancy rates remained stable at 14.1%, while our market areas reflected the following vacancy levels: Springfield, Missouri at 4.0%, St. Louis at 10.7%, Kansas City at 10.5%, Minneapolis at 11.8%, Dallas-Fort Worth at 17.9%, Chicago at 17.3%, Atlanta at 16.8%, Denver at 18.1%, Phoenix at 16.4% and Charlotte, North Carolina at 14.2%.
Previous wording
During the fourth quarter of 2024, national retail vacancy rates remained steady at 4.1% while our market areas reflected the following vacancy levels: Springfield, Missouri at 2.0%, St. Louis at 4.2%, Kansas City at 3.8%, Minneapolis at 2.5%, Dallas-Fort Worth at 4.5%, Chicago at 4.6%, Atlanta at 3.8%, Phoenix at 4.9%, Denver at 3.8%, and Charlotte, North Carolina at 3.1%.
Current wording
During the fourth quarter of 2025, national retail vacancy rates remained steady at 4.3% while our market areas reflected the following vacancy levels: Springfield, Missouri at 2.4%, St. Louis at 4%, Kansas City at 4.3%, Minneapolis at 2.7%, Dallas-Fort Worth at 4.9%, Chicago at 4.9%, Atlanta at 4.3%, Phoenix at 4.6%, Denver at 4.2%, and Charlotte, North Carolina at 3.2%.
Previous wording
For the fourth quarter of 2024, national industrial vacancy rates increased to 6.9%, from 6.8% for the third quarter of 2024. Our market areas reflected the following industrial vacancy levels for the fourth quarter of 2024: Springfield, Missouri at 1.6%, St. Louis at 4.0%, Kansas City at 5.2%, Minneapolis at 4.0%, Dallas-Fort Worth at 9.6%, Chicago at 5.5%, Atlanta at 8.1%, Phoenix at 12%, Denver at 7.9% and Charlotte, North Carolina at 9.2%.
Current wording
For the fourth quarter of 2025, national industrial vacancy was 7.5% while our market areas reflected the following industrial vacancy: Springfield, Missouri at 1.5%, St. Louis at 5.4%, Kansas City at 6%, Minneapolis 4.1%, Dallas-Fort Worth at 8.8%, Chicago at 5.5%, Atlanta at 8.1%, Phoenix at 12.1%, Denver at 8.9% and Charlotte, North Carolina at 9.8%.
Previous wording
The Company’s total assets increased $169.2 million, or 2.9%, from $5.81 billion at December 31, 2023, to $5.98 billion at December 31, 2024. Full details of the current year changes in total assets are provided below, under “Comparison of Financial Condition at December 31, 2024 and December 31, 2023.”
Current wording
The Company’s total assets decreased $383.0 million, or 6.4%, from $5.98 billion at December 31, 2024, to $5.60 billion at December 31, 2025. Full details of the current year changes in total assets are provided below, under “Comparison of Financial Condition at December 31, 2025 and December 31, 2024.”
Previous wording
Loans. In the year ended December 31, 2024, the Company’s net loans increased $100.8 million, or 2.2%, from $4.59 billion at December 31, 2023, to $4.69 billion at December 31, 2024. This increase was primarily in other residential (multi-family) loans ($607.2 million increase), which was partially offset by decreases in construction loans ($358.7 million decrease), commercial business loans ($109.1 million decrease), and one- to four- family residential loans ($57.2 million decrease). The pipeline of loan commitments remained strong at the end of 2024 and increased slightly compared to the end of 2023. The pipeline of the unfunded portion of construction loans remained strong at the end of 2024 and decreased slightly compared to the end of 2023. As construction projects were completed, the related loans were either paid off or moved from the construction category to the appropriate permanent loan categories. As loan demand is affected by a variety of factors, including general economic conditions, and because of the competition we face and our focus on pricing discipline and credit quality, no assurance can be given that our loan growth will match or exceed the average level of growth achieved in prior years. The Company’s strategy continues to be focused on maintaining credit risk and interest rate risk at appropriate levels.
Current wording
Loans. In the year ended December 31, 2025, the Company’s net loans decreased $333.5 million, or 7.1%, from $4.69 billion at December 31, 2024, to $4.36 billion at December 31, 2025. This decrease was primarily in other residential (multi-family) loans ($161.8 million decrease), construction loans ($96.5 million decrease), one- to four- family residential loans ($51.3 million decrease), and commercial business loans ($41.8 million decrease). The pipeline of loan commitments remained strong at the end of 2025 and decreased slightly compared to the end of 2024. The pipeline of the unfunded portion of construction loans remained strong at the end of 2025 and decreased slightly compared to the end of 2024. As construction projects were completed, the related loans were either paid off or moved from the construction category to the appropriate permanent loan categories. As loan demand is affected by a variety of factors, including general economic conditions, and because of the competition we face and our focus on pricing discipline
Previous wording
Recent growth has occurred in some loan types, primarily other residential (multi-family) loans and in most of Great Southern’s primary lending locations, including Springfield, St. Louis, Kansas City, Des Moines and Minneapolis, as well as our loan production offices in Atlanta, Charlotte, Chicago, Dallas, Denver, Omaha, and Phoenix. Certain minimum underwriting standards and monitoring help assure the Company’s portfolio quality. All new loan originations that exceed lender approval authorities are subject to review and approval by Great Southern’s loan committee. Generally, the Company considers commercial construction, consumer, other residential (multi-family) and commercial real estate loans to involve a higher degree of risk compared to some other types of loans, such as first mortgage loans on one- to four-family, owner-occupied residential properties. For other residential (multi-family), commercial real estate, commercial business and construction loans, the credits are subject to an analysis of the borrower’s and guarantor’s financial condition, credit history, verification of liquid assets, collateral, market analysis and repayment ability. It has been, and continues to be, Great Southern’s practice to verify information from potential borrowers regarding assets, income or payment ability and credit ratings as applicable and as required by the authority approving the loan. To minimize construction risk, projects are monitored as construction draws are requested by comparison to budget and with progress verified through property inspections. The geographic and product diversity of collateral, equity requirements and limitations on speculative construction projects help to mitigate overall risk in these loans. Underwriting standards for all loans also include loan-to-value ratio limitations, which vary depending on collateral type, debt service coverage ratios or debt payment to income ratio guidelines, where applicable, credit histories, use of guaranties and other recommended terms relating to equity requirements, amortization, and maturity. Consumer loans, other than home equity loans, are primarily secured by new or used motor vehicles and these loans are subject to underwriting standards designed to assure portfolio quality. In 2019, the Company discontinued indirect auto loan originations.
Current wording
Until 2025, the Company had experienced total loans receivable balances that were stable to growing over the past few years. Total commercial real estate and commercial construction balances were fairly stable over the past five years. One- to four-family loan totals increased in 2022 and have since decreased each year. Recent significant growth occurred in other residential (multi-family) loans up until 2025; however, other residential (multi-family) loan balances decreased in 2025. Most of Great Southern’s loans are generated in its primary lending locations, including Springfield, St. Louis, Kansas City, Des Moines and Minneapolis, as well as our loan production offices in Atlanta, Charlotte, Chicago, Dallas, Denver, Omaha, and Phoenix. Certain minimum underwriting standards and monitoring help assure the Company’s portfolio quality. All new loan originations that exceed lender approval authorities are subject to review and approval by Great Southern’s loan committee. Generally, the Company considers commercial construction, consumer, other residential (multi-family) and commercial real estate loans to involve a higher degree of risk compared to some other types of loans, such as first mortgage loans on one- to four-family, owner-occupied residential properties. For other residential (multi-family), commercial real estate, commercial business and construction loans, the credits are subject to an analysis of the borrower’s and guarantor’s financial condition, credit history, verification of liquid assets, collateral, market analysis and repayment ability. It has been, and continues to be, Great Southern’s practice to verify information from potential borrowers regarding assets, income or payment ability and credit ratings as applicable and as required by the authority approving the loan. To minimize construction risk, projects are monitored as construction draws are requested by comparison to budget and with progress verified through property inspections. The geographic and product diversity of collateral, equity requirements and limitations on speculative construction projects help to mitigate overall risk in these loans. Underwriting standards for all loans also include loan-to-value ratio limitations, which vary depending on collateral type, debt service coverage ratios or debt payment to income ratio guidelines, where applicable, credit histories, use of guaranties and other recommended terms relating to equity requirements, amortization, and maturity. Consumer loans, other than home equity loans, are primarily secured by new or used motor vehicles and these loans are subject to underwriting standards designed to assure portfolio quality. In 2019, the Company discontinued indirect auto loan originations.
Previous wording
Of the total loan portfolio at December 31, 2024 and 2023, 92.1% and 89.5%, respectively, was secured by real estate, as this is the Bank’s primary focus in its lending efforts. At December 31, 2024 and 2023, commercial real estate and commercial construction loans (excluding multi-family loans) were 36.1% and 36.8% of the Bank’s total loan portfolio, respectively. Commercial real estate and commercial construction loans generally afford the Bank an opportunity to increase the yield on, and the proportion of interest rate sensitive loans in, its portfolio. They do, however, present somewhat greater risk to the Bank because they may be more adversely affected by conditions in the real estate markets or in the economy generally. At both December 31, 2024 and 2023, loans made in the Springfield, Missouri metropolitan statistical area (Springfield MSA) comprised 8% of the Bank’s total loan portfolio. The Company’s headquarters are located in Springfield and we have operated in this market since 1923. Loans made in the St. Louis metropolitan statistical area (St. Louis MSA) comprised 17% of the Bank’s total loan portfolio at both December 31, 2024 and 2023. The Company’s expansion into the St. Louis MSA, beginning in May 2009, has provided an opportunity to not only diversify from the Springfield MSA, but also has provided access to a larger economy with increased lending opportunities despite higher levels of competition. Loans made in the St. Louis MSA are primarily commercial real estate, commercial business and other residential (multi-family) loans, which are less likely to be impacted by the higher levels of unemployment rates, as mentioned above under “Current Economic Conditions,” than if the focus were on one- to four-family residential and consumer loans. For further discussions of the Bank’s loan portfolio, and specifically, commercial real estate and commercial construction loans, see “Item 1. Business – Lending Activities.”
Current wording
Of the total loan portfolio at December 31, 2025 and 2024, 92.3% and 92.0%, respectively, was secured by real estate, as this is the Bank’s primary focus in its lending efforts. At December 31, 2025 and 2024, commercial real estate and commercial construction loans (excluding multi-family loans) were 38.3% and 36.1% of the Bank’s total loan portfolio, respectively. Commercial real estate and commercial construction loans generally afford the Bank an opportunity to increase the yield on, and the proportion of interest rate sensitive loans in, its portfolio. They do, however, present somewhat greater risk to the Bank because they may be more adversely affected by conditions in the real estate markets or in the economy generally. At both December 31, 2025 and 2024, loans made in the Springfield, Missouri metropolitan statistical area (Springfield MSA) comprised 8% of the Bank’s total loan portfolio. The Company’s headquarters are located in Springfield and we have operated in this market since 1923. Loans made in the St. Louis metropolitan statistical area (St. Louis MSA) comprised 16% and 17% of the Bank’s total loan portfolio at December 31, 2025 and 2024, respectively. The Company’s expansion into the St. Louis MSA, beginning in May 2009, has provided an opportunity to not only diversify from the Springfield MSA, but also has provided access to a larger economy with increased lending opportunities despite higher levels of competition. Loans made in the St. Louis MSA are primarily commercial real estate, commercial business and other residential (multi-family) loans, which are less likely to be impacted by the higher levels of unemployment rates, as mentioned above under “Current Economic Conditions,” than if the focus were on one- to four-family residential and consumer loans. For further discussions of the Bank’s loan portfolio, and specifically, commercial real estate and commercial construction loans, see “Item 1. Business – Lending Activities.”
Previous wording
The percentage of fixed-rate loans in our loan portfolio has been as much as 40% in recent years and was 37% as of December 31, 2024. The majority of the increase in fixed rate loans over the past few years was in commercial real estate, which typically has short durations within our portfolio. Of the total amount of fixed rate loans in our portfolio as of December 31, 2024, approximately 90% 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. As of December 31, 2024, our interest rate risk models indicated a one-year interest rate earnings sensitivity position that is modestly positive in an increasing rate environment. For further discussion of our interest rate sensitivity gap and the processes used to manage our exposure to interest rate risk, see “Quantitative and Qualitative Disclosures About Market Risk – How We Measure the Risks to Us Associated with Interest Rate Changes.” For discussion of the risk factors associated with interest rate changes, see “Risk Factors – We may be adversely affected by interest rate changes.”
Current wording
The percentage of fixed-rate loans in our loan portfolio has been as much as 39% in recent years and was 34% as of December 31, 2025. The majority of the increase in fixed rate loans over the past few years was in commercial real estate, which typically has short durations within our portfolio. Of the total amount of fixed rate loans in our portfolio as of December 31, 2025, approximately 80% mature within the next five years and therefore are not considered to create significant long-term interest rate risk for the Company. The majority of the loans within the portfolio that mature in over five years are one- to four- family residential loans. Fixed rate loans make up only a portion of our balance sheet and our overall interest rate risk strategy. As of December 31, 2025, our interest rate risk models indicated a one-year interest rate earnings sensitivity position that is generally balanced to modestly positive in an increasing rate environment. For further discussion of our interest rate sensitivity gap and the processes used to manage our exposure to interest rate risk, see “Quantitative and Qualitative Disclosures About Market Risk – How We Measure the Risks to Us Associated with Interest Rate Changes.” For discussion of the risk factors associated with interest rate changes, see “Risk Factors – We may be adversely affected by interest rate changes.”
Previous wording
While our policy allows us to lend up to 95% of the appraised value on one-to four-family residential properties, originations of loans with loan-to-value ratios at that level are minimal. Private mortgage insurance is typically required for loan amounts above the 80% level. Few exceptions occur and would be based on analyses which determined minimal transactional risk to be involved. We consider these lending practices to be consistent with or more conservative than what we believe to be the norm for banks our size. At December 31, 2024 and 2023, 0.2% of our owner occupied one- to four-family residential loans had loan-to-value ratios above 100% at origination. At December 31, 2024 and 2023, an estimated 0.4%, of total non-owner occupied one- to four-family residential loans had loan-to-value ratios above 100% at origination.
Current wording
While our policy allows us to lend up to 95% of the appraised value on one-to four-family residential properties, originations of loans with loan-to-value ratios at that level are minimal. Private mortgage insurance is typically required for loan amounts above the 80% level. Few exceptions occur and would be based on analyses which determined minimal transactional risk to be involved. We consider these lending practices to be consistent with or more conservative than what we believe to be the norm for banks our size. At both December 31, 2025 and 2024, 0.2% of our owner occupied one- to four-family residential loans had loan-to-value ratios above 100% at origination. At both December 31, 2025 and 2024, an estimated 0.4%, of total non-owner occupied one- to four-family residential loans had loan-to-value ratios above 100% at origination.
Previous wording
Available-for-sale Securities. Available-for-sale securities increased $55.2 million, or 11.5%, from $478.2 million at December 31, 2023, to $533.4 million at December 31, 2024. The Company purchased some agency mortgage-backed securities in 2024 with expected yields significantly in excess of the overall portfolio yield. For further information on investment securities, seeNote 2 to the accompanying financial statements contained in this Report.
Current wording
Available-for-sale Securities. Available-for-sale securities decreased $9.6 million, or 1.8%, from $533.4 million at December 31, 2024, to $523.8 million at December 31, 2025. For further information on investment securities, seeNote 2 to the accompanying financial statements contained in this Report.
Previous wording
Held-to-maturity Securities. Held-to-maturity securities decreased $7.6 million, or 3.9%, from $195.0 million at December 31, 2023, to $187.4 million at December 31, 2024. For further information on investment securities, seeNote 2 to the accompanying financial statements contained in this Report.
Current wording
Held-to-maturity Securities. Held-to-maturity securities decreased $8.2 million, or 4.4%, from $187.4 million at December 31, 2024, to $179.2 million at December 31, 2025. For further information on investment securities, seeNote 2 to the accompanying financial statements contained in this Report.
Previous wording
Deposits. 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, 2024, total deposit balances decreased $116.2 million, or 2.5%. Compared to December 31, 2023, transaction account balances decreased $54.3 million and retail certificates of deposit decreased $172.4 million. The decrease in transaction accounts was primarily a result of a decrease in non-interest-bearing accounts and various NOW accounts, as small businesses and individuals appear to be drawing down their balances to pay for goods and services, or are seeking a higher-yielding alternative. 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. Brokered deposits, including IntraFi program purchased funds, were $772.1 million at December 31, 2024, an increase of $110.6 million from $661.5 million at December 31, 2023. The Company uses brokered deposits of select maturities and interest rate characteristics from time to time to supplement its various funding channels and to manage interest rate risk.
Current wording
Deposits. 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, 2025, total deposit balances decreased $122.8 million, or 2.7%. Compared to December 31, 2024, transaction account balances increased $73.2 million and retail certificates of deposit decreased $87.3 million. The increase in transaction accounts was primarily a result of an increase in various money market accounts, as small businesses and individuals appear to be seeking a higher-yielding alternative. 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. Brokered deposits, including IntraFi program purchased funds, were $663.4 million at December 31, 2025, a decrease of $108.7 million from $772.1 million at December 31, 2024. The Company uses brokered deposits of select maturities and interest rate characteristics from time to time to supplement its various funding channels and to manage interest rate risk.
Previous wording
Securities sold under reverse repurchase agreements with customers*.* Securities sold under reverse repurchase agreements with customers decreased $6.4 million, or 9.0%, from $70.8 million at December 31, 2023 to $64.4 million at December 31, 2024. These balances fluctuate over time based on customer demand for this product.
Current wording
Securities sold under reverse repurchase agreements with customers*.* Securities sold under reverse repurchase agreements with customers decreased $15.9 million, or 24.8%, from $64.4 million at December 31, 2024 to $48.5 million at December 31, 2025. These balances fluctuate over time based on customer demand for this product.
Previous wording
Short-Term Borrowings and Other Interest-bearing Liabilities. The Company’s FHLBank term advances were $-0- at both December 31, 2024 and December 31, 2023. At December 31, 2024 and 2023, overnight borrowings from the FHLBank were $333.0 million and $251.0 million, respectively, which are included in short-term borrowings.
Current wording
Short-Term Borrowings and Other Interest-bearing Liabilities. The Company’s FHLBank term advances were $-0- at both December 31, 2025 and December 31, 2024. At December 31, 2025 and 2024, overnight borrowings from the FHLBank were $330.0 million and $333.0 million, respectively, which are included in short-term borrowings.
Previous wording
Short-term borrowings and other interest-bearing liabilities increased $261.6 million from $252.6 million at December 31, 2023 to $514.2 million at December 31, 2024. The Company may utilize overnight borrowings and short-term FHLBank advances, depending on relative interest rates. In addition, in 2024, the Company utilized BTFP borrowings from FRBSTL.
Current wording
Short-term borrowings and other interest-bearing liabilities decreased $183.3 million from $514.2 million at December 31, 2024 to $330.9 million at December 31, 2025. The Company may utilize overnight borrowings and short-term FHLBank advances, depending on relative interest rates. In addition, as of December 31, 2024, the Company had utilized BTFP borrowings of $180.0 million from FRBSTL, which were repaid in full in 2025.
Previous wording
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. This was the first rate increase since September 29, 2006. The FRB also implemented rate 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. 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%. 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. At December 31, 2023 the Federal Funds rate was 5.50%. In 2024, the FRB implemented rate decreases of 0.50%, 0.25%, and 0.25% in September, November and December, respectively. At December 31, 2024, the Federal Funds rate was 4.50%. Financial markets now expect the possibility of further decreases in Federal Funds interest rates in 2025 to be likely, but possibly cuts of only 0.50% at a methodical pace and with interest rate decisions being made at each FRB meeting based on economic data available at the time.
Current wording
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% in December 2015, the FRB had last changed interest rates in December 2008. This was the first rate increase since September 2006. The FRB also implemented rate increases of 0.25% on eight additional occasions beginning in December 2016 through December 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. 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%. 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. At December 31, 2023 the Federal Funds rate was 5.50%. In 2024, the FRB implemented rate decreases of 0.50%, 0.25%, and 0.25% in September, November and December, respectively. At December 31, 2024, the Federal Funds rate was 4.50%. In 2025, the FRB implemented rate decreases of 0.25% in each of September, October, and December 2025, respectively. At December 31, 2025 the Federal Funds rate was 3.75%. Financial markets now expect the possibility of further decreases in Federal Funds interest rates in 2026 to be mixed, if any, with potential cuts of only 0.25% at a methodical pace and with interest rate decisions being made at each FRB meeting based on economic data available at the time.
Previous wording
Great Southern’s loan portfolio includes loans ($1.57 billion at December 31, 2024) tied to various SOFR indices that will be subject to adjustment at least once within 90 days after December 31, 2024. All of these loans have interest rate floors at various rates. Great Southern also has a portfolio of loans ($748.0 million at December 31, 2024) tied to a “prime rate” of interest that will adjust immediately or within 90 days of a change to the “prime rate” of interest. Nearly all of these loans had interest rate floors at various rates. In addition, Great Southern has a portfolio of loans ($8.6 million at December 31, 2024) tied to an AMERIBOR index that will adjust immediately or within 90 days of a change to the rate of interest on this index. All of these loans had interest rate floors at various rates. At December 31, 2024, nearly all of these SOFR, AMERIBOR 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, and most are expected to move fully with future market interest rate decreases as many of these loans have floor rates well below their current index rate.
Current wording
Great Southern’s loan portfolio includes loans ($1.58 billion at December 31, 2025) tied to various SOFR indices that will be subject to adjustment at least once within 90 days after December 31, 2025. All of these loans have interest rate floors at various rates. Great Southern also has a portfolio of loans ($654.1 million at December 31, 2025) tied to a “prime rate” of interest that will adjust immediately or within 90 days of a change to the “prime rate” of interest. Nearly all of these loans had interest rate floors at various rates. At December 31, 2025, nearly all of these SOFR and “prime rate” loans had fully-indexed rates that were at or above their floor rate. We expect the majority of these SOFR and “prime rate” loans to move fully with future market interest rate decreases, as many of these loans have floor rates well below their current index rate.
Previous wording
A rate cut by the FRB generally would be expected to have an immediate negative impact on the Company’s interest income on loans due to the large total balance of loans tied to the SOFR indexes or the “prime rate” index that will be subject to adjustment at least once within 90 days or loans which generally adjust immediately as the Federal Funds rate adjusts. Interest rate floors may at least partially mitigate the negative impact of interest rate decreases. Loans at their floor rates are, however, subject to the risk that borrowers will seek to refinance elsewhere at the lower market rate. 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 for deposits, 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.
Current wording
A rate cut by the FRB generally would be expected to have an immediate negative impact on the Company’s interest income on loans due to the large total balance of loans tied to the SOFR indexes or the “prime rate” index that will be subject to adjustment at least once within 90 days or loans which generally adjust immediately as the Federal Funds rate adjusts. Interest rate floors may at least partially mitigate the negative impact of interest rate decreases. Loans at their floor rates are, however, subject to the risk that borrowers will seek to refinance elsewhere at the lower market rate. 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 for deposits, although interest rates on assets may decline further. Conversely, market interest rate increases would normally result in increased interest rates on our SOFR-based and prime-based loans.
Previous wording
Beginning in March 2022, market interest rates, including LIBOR interest rates, SOFR interest rates and “prime” interest rates, began to increase rapidly. This resulted in increasing loan yields and expansion of our net interest income and net interest margin throughout 2022 and into the first three months of 2023. In 2023, market interest rate increases moderated and loan yield increases moderated in line with market rates. However, there has been increased competition for deposits and other sources of funding, resulting in higher costs for those funds. This has been especially true since early March 2023. Deposit and other funding costs moderated a bit in late 2024 as the FRB cut the federal funds rate, but competition for deposits remains significant. For further discussion of the processes used to manage our exposure to interest rate risk, see “Quantitative and Qualitative Disclosures About Market Risk – How We Measure the Risks to Us Associated with Interest Rate Changes.”
Current wording
Beginning in March 2022, market interest rates, including LIBOR interest rates, SOFR interest rates and “prime” interest rates, began to increase rapidly. This resulted in increasing loan yields and expansion of our net interest income and net interest margin throughout 2022 and into the first three months of 2023. In 2023, market interest rate increases moderated and loan yield increases moderated in line with market rates. However, there has been increased competition for deposits and other sources of funding, resulting in higher costs for those funds. This has been especially true since early March 2023. Deposit and other funding costs moderated a bit in late 2024 as the FRB cut the federal funds rate. Deposit and other funding costs further moderated in late 2025 as the FRB cut the federal funds rate three times, but competition for deposits remains significant. For further discussion of the processes used to manage our exposure to interest rate risk, see “Quantitative and Qualitative Disclosures About Market Risk – How We Measure the Risks to Us Associated with Interest Rate Changes.”
Previous wording
*General.*Federal legislation and regulation significantly affect the operations of the Company and the Bank, and have increased competition among commercial banks, savings institutions, mortgage banking enterprises and other financial institutions. In particular, the capital requirements and operations of regulated banking organizations such as the Company and the Bank have been and will be subject to changes in applicable statutes and regulations from time to time, which changes could, under certain circumstances, adversely affect the Company or the Bank.
Current wording
Federal legislation and regulation significantly affect the operations of the Company and the Bank, and have increased competition among commercial banks, savings institutions, mortgage banking enterprises and other financial institutions. In particular, the capital requirements and operations of regulated banking organizations such as the Company and the Bank have been and will be subject to changes in applicable statutes and regulations from time to time, which changes could, under certain circumstances, adversely affect the Company or the Bank. For additional information, see “Item 1. Business—Government Supervision and Regulation.”
Previous wording
During the year ended December 31, 2024, total assets increased by $169.2 million, or 2.9%, to $5.98 billion. The increase was primarily attributable to increases in loans receivable and investment securities.
Current wording
During the year ended December 31, 2025, total assets decreased by $383.0 million, or 6.4%, to $5.60 billion. The decrease was primarily attributable to decreases in net loans receivable, which are further described below.
Previous wording
Cash and cash equivalents were $195.8 million at December 31, 2024, a decrease of $15.5 million, or 7.4%, from $211.3 million at December 31, 2023. This decrease was primarily due to a $20.7 million decrease in interest-bearing deposits in the FRBSTL. In 2024, these excess funds were used to purchase new investment securities and originate loans.
Current wording
Cash and cash equivalents were $189.6 million at December 31, 2025, a decrease of $6.2 million, or 3.2%, from $195.8 million at December 31, 2024. This decrease was primarily due to a $12.9 million decrease in interest-bearing deposits at the FRBSTL.
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Current report — wording carried from elsewhere
in the St. Louis market. Other identifiable deposit intangible assets that are subject to amortization are amortized on a straight-line basis over a period of seven years and have been fully amortized.
Current report — wording carried from elsewhere
and credit quality, no assurance can be given that our loan growth will match or exceed the average level of growth achieved in prior years. The Company’s strategy continues to be focused on maintaining credit risk and interest rate risk at appropriate levels.
Current report — wording carried from elsewhere
During the year ended December 31, 2025, the Company did not record a provision expense on its portfolio of outstanding loans, compared to a provision expense of $1.7 million for the year ended December 31, 2024. The Company experienced net recoveries of $11,000 for the year ended December 31, 2025 compared to net charge offs of $1.6 million for the year ended December 31, 2024.
Current report — wording carried from elsewhere
The Company recorded a provision for losses on unfunded commitments of $45,000 for the year ended December 31, 2025, compared to a provision of $1.0 million for the year ended December 31, 2024. The level of provisions for unfunded commitments is primarily related to the increases and decreases in the balance of unfunded commitments.
Current report — wording carried from elsewhere
At December 31, 2025, the commercial real estate category of foreclosed assets consisted of two foreclosed properties, the largest of which, totaling $6.0 million, consisted of an office building located in Clayton, Mo and was foreclosed upon in 2024. The additions and sales in the consumer category were due to the volume of repossessions of automobiles, which generally are subject to a shorter repossession process.
Current report — wording carried from elsewhere
The Company reviews the credit quality of its loan portfolio using an internal grading system that classifies loans as “Satisfactory,” “Watch,” “Special Mention,” “Substandard” and “Doubtful.” Multiple loan reviews take place on a continuous basis by credit risk and lending management. Reviews are focused on financial performance, occupancy trends, delinquency status, covenant compliance, collateral support, economic considerations and various other factors. SeeNote 3 for further discussion of the Company’s loan grading system.
Current report — wording carried from elsewhere
Other income: Other income decreased $1.7 million compared to the prior year. In 2024, the Company recorded $2.7 million of other income, net of expenses and write-offs, related to the termination of the Master Agreement between the Company and a third-party software vendor for the proposed conversion of the Company’s core banking platform. This amount represented the elimination of certain deferred credits and other liabilities, along with the write-off of certain capitalized hardware, software and other assets, that previously had been recorded as part of the preparation to convert to the intended new core-banking platform, with no similar activity in 2025. In 2025, the Company recorded income of $1.1 million related to exits from, and other activities of, its investments in tax credit partnerships, with no similar activity in 2024.
Current report — wording carried from elsewhere
Net gains on loan sales: Net gains on loan sales decreased $507,000 during 2025 compared to 2024. The decrease was due to a decrease in the balance of fixed-rate single-family mortgage loans originated and sold in 2025 compared to 2024. Fixed rate single-family mortgage loans originated are generally subsequently sold in the secondary market.
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Previous report — wording carried elsewhere
Interest expense on demand deposits increased $22.9 million due to an increase in average rates from 0.26% during the year ended December 31, 2022, to 1.30% during the year ended December 31, 2023. Interest rates paid on demand deposits were higher in 2023 due to significant increases in overall market rates in the latter half of 2022 and all of 2023. Partially offsetting that increase, interest on demand deposits decreased $293,000 due to a decrease in average balances from $2.32 billion in the year ended December 31, 2022, to $2.20 billion in the year ended December 31, 2023. The Company also experienced decreased balances in certain types of NOW accounts and IntraFi Network Reciprocal Deposits, mostly offset by increases in money market accounts, which generally have higher rates of interest than NOW accounts.
Previous report — wording carried elsewhere
Interest expense on short-term borrowings (including overnight borrowings from the FHLBank) and other interest-bearing liabilities increased $3.8 million due to an increase in average balances from $48.5 million during the year ended December 31, 2022, to $142.9 million during the year ended December 31, 2023, which was primarily due to changes in the Company’s funding needs and the mix of funding, which can fluctuate. Most of this increase was due to the increased utilization of overnight borrowings from the FHLBank. In addition to this increase, interest expense on short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities increased $2.7 million due to average rates that increased from 2.20% in the year ended December 31, 2022, to 5.25% in the year ended December 31, 2023. Short-term market interest rates increased sharply in the latter half of 2022 and throughout 2023.
Previous report — wording carried elsewhere
The additions and sales in the consumer category were due to the volume of repossessions of automobiles, which generally are subject to a shorter repossession process.
Previous report — wording carried elsewhere
Point-of-sale and ATM fees: Point-of-sale and ATM fees decreased $1.4 million compared to the prior year. This decrease was primarily due to a portion of these transactions now being routed through channels with lower fees to the Company, which is expected to continue in future periods, and certain increases in related processing costs during the transition to a new debit card processor.
Previous report — wording carried elsewhere
Net occupancy expenses: Net occupancy expenses increased $2.4 million from the prior year. Various components of computer license and support expenses increased by $1.4 million in 2023 compared to 2022. In addition, various repairs and maintenance expenses increased by $252,000 in 2023 compared to 2022.