GREAT SOUTHERN BANCORP, INC.
For the period ended Mar 31, 2025. Filed May 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 7, 2025
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-Q
Period ended 2024-09-30; filed 2024-11-06.
0001410578-24-001769
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0001410578-25-001089
Item 2. 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 233 previous paragraphs and 205 current paragraphs.
74 unchanged; 106 reworded; 25 added; 48 removed; 5 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 10 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 (25)
Current report
Net absorption for the office industry turned positive in the fourth quarter of 2024 and has remained stable into the first quarter of 2025. Overall, the vacancy rate has remained unchanged since September 2024 at 13.9%. Despite the demand-side improvement, supply additions have kept the national vacancy rate near a record high. Improvements in demand vary significantly between markets. The supply pipeline is diminishing rapidly, currently representing the lowest supply since 2012, with 64.4 million square feet under construction. Positive absorption across some of the largest office markets, combined with a diminishing pipeline of supply, is expected to continue to hold the national vacancy rate steady. CoStar expects the vacancy rate to rise slightly further for the remainder of the year 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.
Current report
The final settling of property values, which appears imminent, should maximize pressure on asking rates as more buildings transact at significant discounts to prior valuation. With a lower cost basis, some new owners can undercut the competition and still generate acceptable returns, on occasion even with relatively low occupancy. Others may choose to invest capital in their buildings to make them more competitive, keeping rents higher to justify their investment. Transaction volumes, which regained momentum throughout 2024 and surged notably in the fourth quarter of 2024, continued improving in the first quarter of 2025, finishing 39% higher year-over-year. This follows a 22% increase in total sales for 2024 compared to the cyclical lows of 2023.
Current report
As of March 31, 2025, the U.S. retail market witnessed the highest level of store closures and bankruptcy filings since 2020. Significant competition from e-commerce retailers, rising costs, restricted access to capital and multiple years of below-average closures, all contribute to the uptick in store closures. Bankruptcy filings are correlated to low home sales, which have weighed heavily on furniture, retail, appliance and home improvement sales.
Current report
As transaction volumes trended higher, the rise in cap rates has settled 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 in the near term. 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 exceeding the 8% 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. CoStar expects pricing risk to be neutral through the first half of 2025.
Current report
Nationally, year-over-year industrial rent growth slowed to 2.1% in March 2025, its lowest rate since 2012. However, due to record rent growth during the pandemic, many leases are still renewing at higher rates after being marked to market. Leasing activity increased in the first quarter of 2025 ahead of tariff escalations, with some markets increasing leasing volume by 50% above two-year averages. A potential deterioration in goods spending risks derailing the recovery underway in key drivers of logistics leasing, including U.S. imports and inventories, and could cause true net absorption to underperform CoStar’s already relatively conservative forecast for 2025.
Current report
For discussion of the risk factors associated with multi-family and commercial real estate loans, see “Risk Factors – Risks Relating to Lending Activities – Our loan portfolio possesses increased risk due to our relatively high concentration of commercial and residential construction, commercial real estate, other residential (multi-family) and other commercial loans” and “Risk Factors – Risks Relating to Regulation – We currently exceed thresholds defined in interagency guidance on commercial real estate concentrations, and as such, we may incur additional expense or slow the growth of certain categories of commercial real estate lending” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024.
Current report
Available-for-sale Securities. In the three months ended March 31, 2025, available-for-sale securities increased $2.5 million, or 0.5%, from $533.4 million at December 31, 2024, to $535.9 million at March 31, 2025. Monthly principal payments on investment securities were generally offset in the period by increases in market value of the available-for-sale securities. For further information on investment securities, seeNote 5 to the accompanying financial statements contained in this Report.
Current report
In January 2024, the Bank borrowed $180.0 million under the Federal Reserve Bank’s Bank Term Funding Program (BTFP). The borrowing, which had a fixed interest rate of 4.83% and was secured primarily by the Bank’s held-to-maturity investment securities, was repaid in full upon maturity in January 2025.
Current 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. As of May 1, 2025, the parties have executed a settlement agreement whereby, in pertinent part, the parties will jointly stipulate to a dismissal of all legal actions and the termination of the Master Agreement. Contemporaneously with this action, the
Current report
parties’ debit card servicing agreement has been extended. Great Southern had previously recorded an accrued expense for these matters in 2024. No additional material expenses are expected to be incurred in the settlement of this matter.
Current report
Technology updates and advancements continue with the Company’s current core provider. Projects involving a full array of products and services are moving forward, with completions expected beginning in the third quarter of 2025 and continuing into 2026.
Current report
During the three months ended March 31, 2025, the Company installed 10 ITM units in the St. Louis, Mo. market, replacing existing end-of-life ATM units. The ITMs, all located at banking center locations, offer customers live teller services, extended banking hours, and services beyond those traditionally available via an ATM.
Current report
On April 30, 2025, the Company notified holders that it will redeem on June 15, 2025 (the “Redemption Date”) all of the Company’s outstanding 5.50% Fixed-to-Floating Rate Subordinated Notes due June 15, 2030, having an aggregate principal amount of $75,000,000 (the “Subordinated Notes”), in accordance with the terms of the Subordinated Notes. The total redemption price will be 100% of the aggregate principal amount of the Subordinated Notes, plus accrued and unpaid interest to, but excluding, the Redemption Date. The Company will utilize excess cash on hand for the redemption payment. The annual combined interest expense and amortization of deferred issuance costs on the Subordinated Notes has been approximately $4.4 million.
Current report
The Company’s available-for-sale securities increased $2.5 million, or 0.5%, compared to December 31, 2024. The available-for-sale securities portfolio was 8.9% of total assets at March 31, 2025 and December 31, 2024. Monthly principal payments on investment securities were generally offset in the period by increases in market value of the available-for-sale securities.
Current report
Total deposits increased $152.5 million, or 3.3%, from $4.61 billion at December 31, 2024 to $4.76 billion at March 31, 2025. Transaction account balances increased $43.3 million, from $3.06 billion at December 31, 2024 to $3.10 billion at March 31, 2025.
Current report
Total interest-bearing checking accounts and non-interest bearing checking accounts increased $33.6 million and $9.7 million, respectively. Retail certificates of deposit decreased $14.1 million compared to December 31, 2024, to $761.7 million at March 31, 2025, due to competition for these types of deposits.
Current report
Comparison of Results of Operations for the Three Months Ended March 31, 2025 and 2024
Current report
average yield on loans increased from 6.13% during the three months ended March 31, 2024, to 6.23% during the three months ended March 31, 2025. This increase was primarily due to the addition of both fixed rate loans and floating rate loans at higher rates in the latter half of 2024 and the first quarter of 2025.
Current report
Interest expense on demand and savings deposits decreased $1.7 million due to average rates of interest that decreased from 1.71% in the three months ended March 31, 2024 to 1.42% in the three months ended March 31, 2025. Interest rates paid on demand deposits were lower in the 2025 period due to the Company strategically lowering rates throughout 2024 and into early 2025 to align with market rates. Interest expense on demand deposits decreased $10,000, due to a decrease in average balances from $2.224 billion in the three months ended March 31, 2024, to $2.221 billion in the three months ended March 31, 2025.
Current report
Compared to December 31, 2024, non-performing loans decreased $91,000, to $3.5 million at March 31, 2025. Compared to December 31, 2024, foreclosed assets increased $43,000 to $6.0 million at March 31, 2025.
Current report
For the three months ended March 31, 2025, non-interest income decreased $216,000, to $6.6 million, when compared to the three months ended March 31, 2024. None of the components of non-interest income experienced increases or decreases exceeding $200,000 in comparing the two periods.
Current report
For the three months ended March 31, 2025, non-interest expense increased $400,000, to $34.8 million, when compared to the three months ended March 31, 2024, primarily as a result of the following items:
Current report
Net occupancy and equipment expenses: Net occupancy and equipment expenses increased $694,000, or 8.9%, from the prior-year period. This increase was primarily related to various components of computer license and support expenses related to upgrades of core systems capabilities and collectively increased by $322,000 in the three months ended March 31, 2025 compared to the same period in 2024. In addition, parking lot maintenance expenses, primarily related to above normal snow removal activity, collectively increased by $232,000 in the three months ended March 31, 2025 compared to the same period in 2024.
Current report
On April 30, 2025, the Company notified holders that it will redeem on June 15, 2025 (the “Redemption Date”) all of the Company’s outstanding 5.50% Fixed-to-Floating Rate Subordinated Notes due June 15, 2030, having an aggregate principal amount of $75,000,000 (the “Subordinated Notes”), in accordance with the terms of the Subordinated Notes. The total redemption price will be 100% of the aggregate principal amount of the Subordinated Notes, plus accrued and unpaid interest to, but excluding, the Redemption Date. The Company will utilize excess cash on hand for the redemption payment. The annual combined interest expense and amortization of deferred issuance costs on the Subordinated Notes has been approximately $4.4 million.
Current report
In April 2025, the Company’s Board of Directors approved a new stock repurchase program, which will succeed the existing repurchase program (authorized in November 2022) following the repurchase of the existing program’s remaining available shares. The new stock repurchase program authorizes the purchase, from time to time in open market or privately negotiated transactions, of up to one million additional shares of the Company’s common stock.
Removed paragraphs (48)
Previous report
Per CoStar, nationally, absorption is accelerating, offering the market an opportunity to stabilize and possibly begin recovering by the end of the year. The third quarter of 2024 saw 152,000 units absorbed, bringing the year to date demand to 450,000 units, which is the strongest since 2021. With supply numbers finally pulling back and demand surging, the large imbalances experienced in 2022 and 2023 appear to be lessening. With the national vacancy rate anticipated to stabilize in the second half of 2024 and projected deliveries dropping almost in half in 2025, overall market conditions appear well-positioned to begin recovery.
Previous report
Absorption for the office industry has been flat for 2024 through September 30, 2024, but the addition of 11 million square feet (“SF”) of net new supply since April 2024 has pushed the vacancy rate up to a record 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. Values for multi-tenanted, investment-grade buildings targeting traditional office tenants have fallen 40-45% from their peak and could dip further as more liquidity leads to a final round of price adjustments.
Previous report
Supply growth has slowed to a decade-low pace in 2024. About 50 million SF in new deliveries is expected in 2024, roughly 60% of which had already been completed as of the beginning of the fourth quarter of 2024 and far below the 10-year average of around 70 million SF. Lower interest rates and the ongoing pricing resets could trigger more renovations and supply reductions, including conversions of office buildings to other uses. The ongoing reset in property values could lead to lower asking rates as more buildings transact at significant discounts to prior valuations.
Previous report
The U.S. retail market is currently 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. There is just 576 million SF of space available for lease across the U.S., which was lower by over 5 million SF on a year-over-year basis and almost 200 million SF (or 26%) below the amount available for lease during the height of the pandemic. Leasing activity remains concentrated in smaller spaces of under 2,500 SF, where activity is being driven by growth from quick-service restaurants and personal services. Tenants such as Starbucks, Crumbl Cookies, Yum Brands, and Restaurant Brands International (owner of BK, Tim Hortons, Popeye’s, and Firehouse Subs) have all signed up for dozens of new locations over the past year. Demand for junior and anchor spaces has been driven by tenants from numerous sectors, including discount, off-price, health and beauty, and discount grocery.
Previous report
Approximately 27.9 million SF of retail space has been absorbed across the U.S. over the past year, approximately 80% of which has flowed into the general retail (20.4 million SF) and neighborhood center (2.5 million SF) segments. Seven of the top 10 markets leading the way in inventory-adjusted demand growth over the past year were in the Sun Belt, including four of the top five (Austin, Orlando, Miami and Phoenix). The other three markets in the top 10 for inventory-adjusted demand growth over the past year were all in the Midwest, with Indianapolis, St. Louis, and Minneapolis each seeing absorption of at least 1.5 million SF over that time.
Previous report
A primary driver of tight conditions within the U.S. retail market has been the limited amount of new development over the past 15 years. Most retail construction activity comprises single-tenant build-to-suits, grocery-anchored neighborhood centers, or smaller ground-floor spaces in mixed-use developments. Given the structural downshift in activity coupled with the fact that over three years of new deliveries have had a tenant in place at delivery, the U.S. retail market has faced virtually no threat from new supply. This looks to continue for the foreseeable future, as retail construction starts fell to new historic lows as continued higher interest rates challenge the feasibility of many new potential retail developments at current rent levels. Rents continue to rise at a healthy rate due to minimal availability and the significant boost in retail sales coming out of the pandemic. Asking rents for retail spaces have increased by 2.1% over the past year to a record high of $25.00 per/SF.
Previous report
More positive signs for tenant demand have been emerging as the year progresses. Led by sales at non-store retailers and general merchandise stores, overall real retail goods spending has been gradually rising since early 2024 as inflation subsides. Declines that carried through last year have leveled off in 2024 for key indicators such as warehousing and storage employment and wholesale trade inventories. Monthly U.S. imports, which also declined last year, have been rising since February 2024, meaning the volume of goods flowing through distribution centers across the U.S. is back on the rise, with the exception being during the October 2024 strikes by dockworkers at major East Coast and Gulf Coast ports.
Previous report
Nationally, year-over-year industrial rent growth has decelerated over the past 24 months to 2.8%, a rate which is 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% to 6% by 2026-2027, given the limited amount of new supply that will likely be on track to complete during those years. 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
Available-for-sale Securities. In the nine months ended September 30, 2024, available-for-sale securities increased $87.0 million, or 18.2%, from $478.2 million at December 31, 2023, to $565.2 million at September 30, 2024. In the three months ended June 30, 2024, the Company elected to purchase some fixed rate securities similar to ones already in its portfolio, to provide interest rate protection if market interest rates should fall in future periods. These securities are expected to yield over 5.00%. SeeNote 5 “Investment Securities” in the Notes to Consolidated Financial Statements included in this report for additional information.
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
Since early 2022, Great Southern had been preparing to convert to a new core banking platform (New System) to be delivered by a third-party vendor. As previously disclosed, the migration to the New System, originally scheduled for the third quarter of 2023, was delayed to mid-2024. In addition, as also previously disclosed, certain contractual disputes arose between Great Southern and the third-party vendor. While discussions were ongoing between the parties for an extended period of time, no meaningful progress was made in resolving the contractual disputes.
Previous report
The system migration efforts were beset by a variety of significant issues, including having missed a second conversion date because of continued operational and system problems. Therefore, Great Southern took the following actions to protect its interests. On April 24, 2024, Great Southern informed the third-party vendor that it was terminating the Master Agreement between Great Southern and the third-party vendor in accordance with Great Southern’s rights under the Master Agreement. In addition, on April 24, 2024, Great Southern initiated legal action against the third-party vendor by filing a complaint in the U.S. District Court for the Western District of Missouri, Southern Division. The complaint seeks to recover damages caused by the third-party vendor’s material breach of the Master Agreement, inability and/or inaction on the part of the third-party vendor to effectively and timely manage the system migration, as well as the third-party vendor’s misrepresentations and omissions. The third-party vendor filed a counterclaim alleging that Great Southern terminated the Master Agreement without cause and that Great Southern must pay an early termination fee in an amount to be proven at trial. Great Southern denies the allegations in the third-party vendor’s counterclaim and will vigorously defend itself. The parties continue informal settlement discussions, but there is no guarantee that the parties will reach a mutually agreed upon settlement to terminate the litigation.
Previous report
Great Southern now expects to continue operations with its current core banking provider, which will allow Great Southern to offer its full array of products and services.
Previous report
Kris Conley, Chief Retail Banking Officer, will retire in December 2024 after a notable career at Great Southern Bank. He joined the Company in 1998 and has led the retail banking division since 2010. During his tenure, Great Southern expanded from 30 banking centers, mainly in southwest Missouri, to 89 banking centers across six states. In early 2023, Conley announced his retirement plans to facilitate a smooth transition, with Laura Smith named as his successor. Smith, who has been with Great Southern since 2003, previously managed the Company’s investment services division.
Previous report
Kelly Polonus, Chief Communications & Marketing Officer, will also retire in December 2024, concluding a distinguished 41-year career in banking, including the last 22 years at Great Southern Bank. She announced her planned retirement in mid-2023 to ensure a seamless management transition. Succeeding Polonus will be Stacy Fender, who joined Great Southern in June 2024 after serving 18 years in communications and marketing roles at a regional healthcare system.
Previous report
The Company’s available-for-sale securities increased $87.0 million, or 18.2%, compared to December 31, 2023. The increase was primarily due to the purchase of several collateralized mortgage obligations and mortgage-backed securities, partially offset by normal monthly payments received related to the portfolio of mortgage-backed securities and collateralized mortgage obligations. The available-for-sale securities portfolio was 9.4% and 8.2% of total assets at September 30, 2024 and December 31, 2023, respectively.
Previous report
Total deposits decreased $24.2 million, or 0.5%, from $4.72 billion at December 31, 2023 to $4.70 billion at September 30, 2024. Transaction account balances decreased $19.1 million, from $3.11 billion at December 31, 2023 to $3.09 billion at September 30, 2024. Total interest-bearing checking accounts increased $19.7 million, while non-interest-bearing checking accounts decreased $38.8 million. Retail certificates of deposit decreased $154.0 million compared to December 31, 2023, to $794.2 million at September 30, 2024, due to competition for deposits.
Previous report
Results of Operations and Comparison for the Three and Nine Months Ended September 30, 2024 and 2023
Previous report
Net income was $46.9 million for the nine months ended September 30, 2024 compared to $54.7 million for the nine months ended September 30, 2023. This decrease of $7.8 million, or 14.2%, was primarily due to a decrease in net interest income of $8.5 million, or 5.7%, and an increase in provision for credit losses on loans and unfunded commitments of $3.3 million, or 154.2%, partially offset by a decrease in income tax expense of $3.7 million, or 25.7%, a decrease in non-interest expense of $190,000, or 0.2%, and an increase in non-interest income of $121,000, or 0.5%.
Previous report
Total interest income increased $21.8 million, or 9.9%, during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was due to a $20.0 million, or 9.9%, increase in interest income on loans and a $1.7 million, or 9.3%, increase in interest income on investment securities and other interest-earning assets. Interest income from loans and from investment securities and other interest-earning assets increased during the nine months ended September 30, 2024 compared to the same period in 2023 due to higher average balances and higher average rates of interest.
Previous report
During the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, interest income on loans increased $16.7 million due to higher average interest rates on loans. The average yield on loans increased from 5.84% during the nine months ended September 30, 2023, to 6.31% during the nine months ended September 30, 2024. This increase was due to the same reasons noted above. Interest income on loans also increased $3.3 million as the result of higher average loan balances, which increased from $4.62 billion during the nine months ended September 30, 2023, to $4.69 billion during the nine months ended September 30, 2024.
Previous report
Interest income on investments increased $1.4 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Interest income increased $1.1 million as a result of higher average interest rates, which rose from 2.89% during the nine months ended September 30, 2023, to 3.10% during the nine month period ended September 30, 2024. Interest income on investments also increased $304,000 as a result of an increase in average balances from $694.7 million during the nine months ended September 30, 2023, to $708.4 million during the nine months ended September 30, 2024. Average balances of securities increased due to the same reasons noted above.
Previous report
Interest income on other interest-earning assets increased $277,000 in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Interest income increased $265,000 as a result of higher average interest rates, which rose from 4.91% during the nine months ended September 30, 2023, to 5.26% during the nine months ended September 30, 2024. Interest income increased $12,000 as a result of an increase in average balances from $97.8 million during the nine months ended September 30, 2023, to $98.2 million during the nine months ended September 30, 2024.
Previous report
Total interest expense increased $30.2 million, or 41.8%, during the nine months ended September 30, 2024, when compared with the nine months ended September 30, 2023, due to an increase in interest expense on deposits of $22.2 million, or 36.1%, an increase in interest expense on short-term borrowings of $7.6 million, or 148.4%, an increase in interest expense on securities sold under reverse repurchase agreements of $241,000, or 27.7%, and an increase in interest expense on subordinated debentures issued to capital trusts of $91,000, or 7.1%.
Previous report
Interest expense on demand and savings deposits increased $1.9 million due to average rates of interest that increased from 1.46% in the three months ended September 30, 2023 to 1.80% in the three months ended September 30, 2024. Interest rates paid on demand deposits were higher in the 2024 period due to significant increases in overall market rates and competition for deposits. Interest expense on demand deposits increased $55,000, due to an increase in average balances from $2.20 billion during the three months ended September 30, 2023, to $2.21 billion during the three months ended September 30, 2024. The Company also experienced increased balances in various types of money market accounts due to the increase in average rates on these accounts.
Previous report
Interest expense on demand and savings deposits increased $9.7 million due to average rates of interest that increased from 1.18% in the nine months ended September 30, 2023 to 1.76% in the nine months ended September 30, 2024. Interest rates paid on demand deposits were higher in the 2024 period due to significant increases in overall market rates and competition for deposits. Interest expense on demand deposits increased $281,000, due to an increase in average balances from $2.19 billion during the nine months ended September 30, 2023, to $2.22 billion during the nine months ended September 30, 2024. The Company also experienced increased balances in various types of money market accounts due to the increase in average rates on these accounts.
Previous report
Interest expense on time deposits increased $8.1 million as a result of an increase in average rates of interest from 2.76% during the nine months ended September 30, 2023, to 4.01% during the nine months ended September 30, 2024. Partially offsetting this increase, interest expense on time deposits decreased $1.9 million due to a decrease in average balances of time deposits from $999.9 million during the nine months ended September 30, 2023 to $896.1 million in the nine months ended September 30, 2024. As noted above, a large portion of the Company’s certificate of deposit portfolio matures within six to twelve months and therefore reprices fairly quickly. Older certificates of deposit that renewed or were replaced with new deposits generally resulted in the Company paying a higher rate of interest compared to the year-ago period due to increases in market interest rates and targeted promotions during 2023 and into 2024.
Previous report
Interest expense on brokered deposits increased $4.5 million, due to an increase in average balances from $588.9 million during the nine months ended September 30, 2023 to $706.0 million during the nine months ended September 30, 2024. Interest expense on brokered deposits increased $1.4 million due to average rates of interest that increased from 4.93% in the nine months ended September 30, 2023 to 5.24% in the nine months ended September 30, 2024. As noted above, brokered deposits added during 2023 and 2024 were at higher market rates than brokered deposits previously issued.
Previous report
Interest expense on reverse repurchase agreements increased $326,000 due to higher average interest rates during the nine months ended September 30, 2024 when compared to the nine months ended September 30, 2023. The average rate of interest was 1.36% for the nine months ended September 30, 2023 compared to 1.95% for the nine months ended September 30, 2024, due to higher market interest rates. Partially offsetting this increase, interest expense on reverse repurchase agreements decreased $85,000 due to lower average balances. The average balance of repurchase agreements decreased $9.8 million from $85.8 million in the nine months ended September 30, 2023 to $76.0 million in the nine months ended September 30, 2024, due to changes in customers’ desire for this product.
Previous report
Interest expense on short-term borrowings (including overnight borrowings from the FHLBank and BTFP borrowings from FRBSTL) and other interest-bearing liabilities increased $7.6 million during the nine months ended September 30, 2024 when compared to the nine months ended September 30, 2023 due to higher average balances. The average balance of short-term borrowings and other interest-bearing liabilities increased $195.6 million from $134.6 million in the nine months ended September 30, 2023 to $330.2 million in the nine months ended September 30, 2024, primarily due to the same reasons discussed above. Interest expense on short-term borrowings (including overnight borrowings from the FHLBank and BTFP borrowings from FRBSTL) and other interest-bearing liabilities increased $60,000 during the nine months ended September 30, 2024 when compared to the nine months ended September 30, 2023 due to higher average rates of interest. The average rate of interest was 5.12% for the nine months ended September 30, 2023, compared to 5.18% for the nine months ended September 30, 2024.
Previous report
During the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, interest expense on subordinated debentures issued to capital trusts increased $91,000 due to higher average interest rates. The average interest rate was 7.07% in the nine months ended September 30, 2024 compared to 6.61% in the nine months ended September 30, 2023. The subordinated debentures are variable-rate debentures, as stated above. There was no change in the average balance of the subordinated debentures between the 2023 and 2024 nine-month periods.
Previous report
Net interest income for the nine months ended September 30, 2024 decreased $8.5 million to $139.6 million compared to $148.1 million for the nine months ended September 30, 2023. Net interest margin was 3.39% in the nine months ended September 30, 2024, compared to 3.66% in the nine months ended September 30, 2023, a decrease of 27 basis points, or 7.4%. The Company experienced increases in interest income on both loans and investment securities and increases in interest expense on deposits, short-term borrowings, subordinated debentures issued to capital trust and securities sold under reverse repurchase agreements with customers.
Previous report
Compared to December 31, 2023, non-performing loans decreased $4.3 million, to $7.5 million at September 30, 2024. The majority of this decrease was in the non-performing commercial real estate loans category, which decreased $4.4 million from December 31, 2023. Compared to December 31, 2023, foreclosed assets increased $240,000 to $263,000 at September 30, 2024.
Previous report
For the three months ended September 30, 2024, non-interest income decreased $860,000 to $7.0 million when compared to the three months ended September 30, 2023, primarily as a result of the following items:
Previous report
Overdraft and insufficient funds fees: Overdraft and insufficient funds fees decreased $710,000 compared to the same period in 2023. This decrease was primarily due to the continuation of a multi-year trend whereby our customers are choosing to forego authorizing payments of certain items which exceed their account balances, resulting in fewer overdrafts in checking accounts and related fees. We expect this trend to continue in future periods.
Previous report
Point-of-sale and ATM fees: Point-of-sale and ATM fees decreased $257,000 compared to the same period in 2023 primarily due to a portion of these transactions now being routed through channels with lower fees to us, which we expect will continue in future periods.
Previous report
Net gains on loan sales: Net gains on loan sales increased $292,000 compared to the same period in 2023. The increase was partially due to an increase in balance of fixed-rate single-family mortgage loans sold during the three months ended September 30, 2024 compared to the same period in 2023. Fixed-rate single-family mortgage loans originated are generally subsequently sold in the secondary market. The Company realized higher premiums on the sale of loans in the 2024 period compared to the 2023 period, as market interest rates were more stable in the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Previous report
For the nine months ended September 30, 2024, non-interest income increased $121,000 to $23.6 million when compared to the nine months ended September 30, 2023, primarily as a result of the following items:
Previous report
Overdraft and insufficient funds fees: Overdraft and insufficient funds fees decreased $2.1 million compared to the same period in 2023, for the same reason noted above.
Previous report
Point-of-sale and ATM fees: Point-of-sale and ATM fees decreased $966,000 compared to the same period in 2023, for the same reason noted above.
Showing the first 40 of 48 passages. Open the source sections for the rest.
Reworded paragraphs (106)
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 remaining effects of the COVID-19 pandemic on general economic and financial market conditions and on public health; (iv) fluctuations in interest rates, the effects of inflation or a potential recession, whether caused by Federal Reserve actions or otherwise; (v) the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; (vi) slower economic growth caused by changes in energy prices, supply chain disruptions or other factors; (vii) the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; (viii) the possibility of realized or unrealized losses on securities held in the Company’s investment portfolio; (ix) the Company’s ability to access cost-effective funding and maintain sufficient liquidity; (x) fluctuations in real estate values and both residential and commercial real estate market conditions; (xi) the ability to adapt successfully to technological changes to meet customers’ needs and developments in the marketplace; (xii) the possibility that security measures implemented might not be sufficient to mitigate the risk of a cyber-attack or cyber theft, and that such security measures might not protect against systems failures or interruptions; (xiii) legislative or regulatory changes that adversely affect the Company’s business; (xiv) changes in accounting policies and practices or accounting standards; (xv) results of examinations of the Company and Great Southern Bank by their regulators, including the possibility that the regulators may, among other things, require the Company to limit its business activities, change its business mix, increase its allowance for credit losses, write-down assets or increase its capital levels, or affect its ability to borrow funds or maintain or increase deposits, which could adversely affect its liquidity and earnings; (xvi) costs and effects of litigation, including settlements and judgments; (xvii) competition; and (xviii) natural disasters, war, terrorist activities or civil unrest and their effects on economic and business environments in which the Company operates. 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-…
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 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 …
Excerpt shortened here; the source contains the full paragraph.
Previous wording
In April 2022, the Company, through its subsidiary Great Southern Bank, entered into a naming rights agreement with Missouri State University related to the main arena on the university’s campus in Springfield, Missouri. The terms of the agreement provide the naming rights to Great Southern Bank for a total cost of $5.5 million, to be paid over a period of seven years. The Company expects to amortize the intangible asset through non-interest expense over a period not to exceed 15 years.
Current wording
In April 2022, the Company, through its subsidiary Great Southern Bank, entered into a naming rights agreement with Missouri State University related to the main arena on the university’s campus in Springfield, Missouri. The terms of the agreement provide the naming rights to Great Southern Bank for a total cost of $5.5 million, to be paid over a period of seven years. The Company expects to amortize the naming rights intangible assets through non-interest expense over a period not to exceed 15 years.
Previous wording
At September 30, 2024, the amortizable intangible assets included the arena naming rights of $4.8 million, which are reflected in the table below. These amortizable intangible assets are reviewed for impairment if circumstances indicate their value may not be recoverable based on a comparison of fair value.
Current wording
At March 31, 2025, the amortizable intangible assets included the arena naming rights of $4.6 million, which are reflected in the table below. These amortizable intangible assets are reviewed for impairment if circumstances indicate their value may not be recoverable based on a comparison of fair value.
Previous wording
Our regular annual impairment assessment occurs in the third quarter of each year. The Company performed this annual review as of September 30, 2024 and concluded that no impairment of its goodwill or other intangible assets had occurred as of that date. While management believes no impairment existed as of September 30, 2024, different conditions or assumptions used to measure fair value of the reporting unit, or changes in cash flows or profitability, if significantly negative or unfavorable, could have a material adverse effect on the outcome of the Company’s impairment evaluation in the future.
Current wording
Management does not believe any of the Company’s goodwill or other intangible assets were impaired as of March 31, 2025. While management believes no impairment existed as of March 31, 2025, different conditions or assumptions used to measure fair value of the reporting unit, or changes in cash flows or profitability, if significantly negative or unfavorable, could have a material adverse effect on the outcome of the Company’s impairment evaluation in the future.
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.
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.
Previous wording
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 has 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 2.7% at September 30, 2024, above the Federal Reserve’s target of 2%.
Current 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 2.6% at March 31, 2025, above the Federal Reserve’s target of 2%.
Previous wording
Based on Moody’s U.S. Baseline Outlook and Alternative Scenarios Analysis dated October 2024, real GDP in 2024 is projected to be slightly higher than previously forecast. Real GDP is projected to rise 2.7% in 2024 on an annual average basis, and is projected to grow 2.3% in 2025 and 2.1% in 2026. Higher consumer spending and business investment drove the upward revisions to the outlook in those years.
Current wording
Based on Moody’s U.S. Baseline Outlook and Alternative Scenarios Analysis dated March 2025, real GDP in 2025 is projected to rise 1.9% on an annual average basis; this is a reduction to prior GDP forecasts for 2025, which anticipated growth of 2.3%. GDP is projected to grow 1.7% in 2026 and 2.3% in 2027, before returning to trend in 2028. The downward revision to GDP growth for 2025 is a result of widespread economic uncertainty; key components to the revision resulted from weaker growth overseas and anticipated tariffs impacting imports and increases in federal spending due to changes in defense and immigration spending.
Previous wording
The national unemployment rate changed little for the month of September 2024 at 4.1%, ranging from 3.4% to 4.1% since September 2022. The number of unemployed individuals was 6.8 million as of September 2024 with 254,000 jobs added in September 2024. In September 2024, the healthcare, government, social assistance, food services, and construction sectors contributed to 170,000 of the total job gains.
Current wording
The national unemployment rate increased slightly to 4.2% for March 2025 compared to the previous quarter end at 4.1% for December 2024. However, the unemployment rate for March 2025 is 0.2 basis points higher than the year prior. The number of unemployed individuals was 7.1 million as of March 2025 with 228,000 jobs added. In March 2025, the healthcare, retail trade, social assistance, transportation and warehousing areas contributed to the 125,000 of total job gains.
Previous wording
As of September 2024, the labor force participation rate (the share of working-age Americans employed or actively looking for a job) remained stable at 62.7%. The unemployment rate for the Midwest, where the Company conducts most of its business, increased from 3.6% in September 2023 to 4.1% in September 2024. Unemployment rates for September 2024 in the states where the Company has a branch or a loan production office were: Arizona at 3.5%, Arkansas at 3.3%, Colorado at 4.0%, Georgia at 3.6%, Illinois at 5.3%, Iowa at 2.9%, Kansas at 3.3%, Minnesota at 3.4%, Missouri at 3.9%, Nebraska at 2.7%, North Carolina at 3.8%, Oklahoma at 3.4%, and Texas at 4.1%. The rates above are slightly higher for a majority of these states compared to June 2024. Of the metropolitan areas in which the Company does business, most are below the national unemployment rate for September 2024 of 4.1%.
Current wording
As of March 2025, 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 4.1% in December 2024 to 4.2% in March 2025. Unemployment rates for March 2025 in the states where the Company has a branch or a loan production office were: Arizona at 4.1%, Arkansas at 3.7%, Colorado at 4.8%, Georgia at 3.6%, Illinois at 4.8%, Iowa at 3.4%, Kansas at 3.8%, Minnesota at 3.1%, Missouri at 3.8%, Nebraska at 2.9%, North Carolina at 3.7%, and Texas at 4.1%. These rates are slightly higher for a majority of the states compared to December 2024. It is unknown at this time if actions being taken to reduce federal employment will impact the unemployment rates in these states.
Previous wording
Existing-home sales decreased 1.0% in September 2024 to a seasonally adjusted annual rate of 3.84 million, down 3.5% from the previous year. In the Midwest, existing-home sales fell 2.2% in September 2024 to an annual rate of 900,000, down 5.3% from one year ago.
Current wording
Existing-home sales slipped 5.9% in March 2025 to a seasonally adjusted annual rate of 4.02 million; year-over-year sales fell 2.4%. In the Midwest, existing-home sales slowed to 5% in March 2025 at an annual rate of 950,000, down 3.1% from one year earlier.
Previous wording
The median existing-home sales price rose 3.0% from September 2023 to $404,500 in September 2024, which is the 15th consecutive month of year-over-year price increases. The median price in the Midwest was $306,600, up 5.0% from September 2023. All regions reported median price increases when compared to the prior year.
Current wording
The median existing-home sales price rose 2.7% from March 2024 to $403,700 in March 2025. The median price in the Midwest was $302,100, up 3.5% from March 2024. All regions reported median price increases when compared to the prior year.
Previous wording
Total housing inventory registered at the end of September 2024 was 1.39 million units, up 1.5% from August 2024 and up 23% from 1.13 million one year ago. Unsold inventory sat at a 4.3-month supply in September 2024, up from 4.2 months in August 2024 and 3.4 months in September 2023.
Current wording
Total housing inventory registered at the end of March 2025 was 1.33 million units, up 8.1% from February 2025 and 19.8% from one year ago. Unsold inventory sat at a 4-month supply at the end of March 2025, up from 3.5 months at the end of February 2025 and 3.2 months at the end of March 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.
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 March 2025 were at a rate of 1.3 million; 11.4% below the revised estimate for February 2025 but 1.9% higher than March 2024.
Previous wording
Sales of new single‐family houses in September 2024 were at a seasonally adjusted annual rate of 738,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4.1% above the August 2024 rate of 709,000 and 6.3% above the September 2023 rate of 694,000.
Current wording
Sales of new single‐family houses in March 2025 were at a seasonally adjusted annual rate of 724,000 according to the U.S. Census Bureau and the Department of Housing and Urban Development. This was 7.4% above the February 2025 rate of 674,000 and 6.0% above the March 2024 rate of 683,000.
Previous wording
The median sales price of new houses sold in September 2024 was $426,300, in line with $426,100 reported in September 2023. The average sales price in September 2024 of $501,000 was down from $515,000 in September 2023. The seasonally‐adjusted estimate of new houses for sale at the end of September 2024 was 470,000. This represents a supply of 7.6 months at the current sales rate.
Current wording
The median sales price of new houses sold in March 2025 was $403,600, slightly lower than the $411,500 reported in February 2025. The seasonally‐adjusted estimate of new houses for sale at the end of March 2025 represented a supply of 8.3 months at the current sales rate.
Previous wording
According to Freddie Mac, the average commitment rate for a 30-year, fixed-rate mortgage was 6.44% as of October 18, 2024 which was up from 6.32% the previous week and down from 7.63% one year ago.
Current wording
According to Freddie Mac, the average commitment rate for a 30-year, fixed-rate mortgage was 6.65% as of March 31, 2025, down from 6.74% one year ago.
Previous wording
The U.S. multi-family market experienced a continued strong recovery in demand through the first nine months of 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. During the second quarter of 2024, 190,000 units were completed, with approximately 154,000 units delivered in the first two months of the third quarter. Most new supply additions are concentrated at the 4 and 5 Star price point, contributing to the weakest rent growth observed in this market. Consequently, the persistent imbalance between supply and demand stabilized the vacancy rate in the third quarter of 2024 at 7.9%.
Current wording
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. Q4 2024 represented the strongest fourth-quarter absorption total on record. Absorption for the first quarter of 2025 was 130,000 (preliminary figure) units, which is the strongest first-quarter total on record besides first-quarter 2021. Most new supply additions are concentrated at the 4 and 5 star price point, which initially contributed to the weakest rent growth observed in this level of the market. However, as of first-quarter 2025, the 4 and 5 star segment accounted for 77% of total absorption. Due to the stronger absorption within the 4 and 5 star units, demand finally outpaced supply and lowered vacancy to 11.3% in that segment. Overall vacancy in the multi-family market was 8% for the first quarter of 2025 and is forecasted to fall below this level by year-end and lower still in 2026.
Previous wording
The Midwest and Northeast regions have fared the best over the past two years in terms of rent growth. Projected deliveries in the Midwest for 2024 are only 11,000 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. The Sun Belt market rent growth has been sluggish, with numerous markets reporting negative year-over-year rent growth. Austin, Texas and Raleigh, North Carolina have experienced the steepest rent declines over the past four quarters, with year-over-year rent growth of negative 5.7% and negative 2.9%, respectively. The vacancy rate is also climbing for 4 & 5 Star properties in Austin, Texas from 10.4% in the second quarter of 2023 to 14.1% by the end of the second quarter of 2024.
Current wording
The Midwest and Northeast regions have fared the best over the past two years in terms of rent growth. Rents are still down year over year as of March 2025 in 14 of the largest markets, primarily in markets where supply significantly outpaced demand. 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 major markets will return to positive rent growth by the end of 2025. Kansas City and Chicago continue to lead the nation in rent growth, each displaying 3% growth in the first quarter of 2025.
Previous wording
The September 2024 national multi-family market vacancy rates remained consistent with the previous quarter at 7.9%. Our market areas reflected the following apartment vacancy levels as of September 2024: Springfield, Missouri at 4.8%, St. Louis at 9.6%, Kansas City at 7.5%, Minneapolis at 7.4%, Dallas-Fort Worth at 11%, Chicago at 5.3%, Atlanta at 12.5%, Phoenix at 11%, Denver at 10.5% and Charlotte, North Carolina at 12.2%.
Current wording
The March 2025 national multi-family market vacancy rate remained unchanged at 8% compared to the prior quarter-end. Our market areas reflected the following apartment vacancy levels as of March 2025: Springfield, Missouri at 5.8%, St. Louis at 9.7%, Kansas City at 8.6%, Minneapolis at 7.0%, Dallas-Fort Worth at 11.5%, Chicago at 4.8%, Atlanta at 12.3%, Phoenix at 11.9%, Denver at 11.5% and Charlotte, North Carolina at 12.9%.
Previous wording
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.
Current wording
CoStar reported office asking rents have remained steady over the past four years. 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 months. With attendance rising only gradually and job growth stagnant, there appears little likelihood of a dramatic change in demand conditions over the next 12 months.
Previous wording
As of September 2024, national office vacancy rates remained stable at 13.9% compared to June 2024, while our market areas reflected the following vacancy levels: Springfield, Missouri at 4.3%, St. Louis at 10.4%, Kansas City at 11.9%, Minneapolis at 11.5%, Dallas-Fort Worth at 18.2%, Chicago at 16.3%, Atlanta at 16.4%, Denver at 17.2%, Phoenix at 16.8% and Charlotte, North Carolina at 14.3%.
Current wording
As of March 2025, national office vacancy rates remained stable at 13.9%, while our market areas reflected the following vacancy levels: Springfield, Missouri at 2.0%, St. Louis at 9.6%, Kansas City 10.9%, Minneapolis 11.2%, Dallas-Fort Worth at 17.9%, Chicago at 16.4%, Atlanta at 16.6%, Denver at 17.5%, Phoenix at 16.8% and Charlotte, North Carolina at 14.7%.
Previous wording
During the third quarter of 2024, national retail vacancy rates remained steady at 4.1% while our market areas reflected the following vacancy levels: Springfield, Missouri at 2.2%, St. Louis at 4.2%, Kansas City at 3.7%, Minneapolis at 2.6%, Dallas-Fort Worth at 4.5%, Chicago at 4.7%, Atlanta at 3.8 %, Phoenix at 4.8%, Denver at 3.7%, and Charlotte, North Carolina at 2.9%.
Current wording
During the first quarter of 2025, national retail vacancy rates remained steady at 4.2% while our market areas reflected the following vacancy levels: Springfield, Missouri at 2.2%, St. Louis at 4.2%, Kansas City at 3.9%, Minneapolis at 2.6%, Dallas-Fort Worth at 4.6%, Chicago at 4.7%, Atlanta at 3.9%, Phoenix at 4.8%, Denver at 4.2%, and Charlotte, North Carolina at 3.2%.
Previous wording
U.S. industrial market performance continued to downshift in the third quarter of 2024. While the national vacancy rate is not expected to rise above its 20-year average of 7.0%, the next 6-12 months 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. This weakness ties partly to recent 12-year lows in home sales, which has lowered sales of furniture, building materials, and appliances, leading to large distribution center closures by tenants including Big Lots, Ashley Furniture, and Home Depot.
Current wording
Current U.S. industrial market performance continues to favor the tenant, reporting the 11 th consecutive quarter of vacancy rate increases in the first quarter of 2025. 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 125 million SF compared to 133 million SF for 2023. This weakness was 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 wording
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. The volume of projects completing construction each quarter is expected to remain elevated through late 2024 or early 2025 but has already begun to decline and is expected to hit 10-year lows by late 2025. Gradual but persistent decline in speculative development completions has already begun. The amount of vacant space among existing Phoenix logistics properties 50,000 SF or larger has increased by 29 million SF, primarily due to speculative development since 2019 pushing the current vacancy rate among these buildings over 17%, while another 16.6 million SF worth of unleased space remains under construction.
Current wording
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 and a quarter 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 expected to hit an 11-year low. A gradual but persistent decline in speculative development completions has already begun. As of March 31, 2025, the amount of vacant space among existing Phoenix logistics properties 50,000 SF or larger has increased by 19 million SF, primarily due to speculative development since 2019 pushing the vacancy rate among these buildings over 20%, while another 8.2 million SF worth of unleased space remained under construction.
Previous wording
For the third quarter of 2024, national industrial vacancy rates increased to 6.8%, from 6.6% for the second quarter of 2024. Our market areas reflected the following industrial vacancy levels for the third quarter of 2024: Springfield, Missouri at 1.6%, St. Louis at 4.2%, Kansas City at 5.6%, Minneapolis at 4.1%, Dallas-Fort Worth at 9.8%, Chicago at 5.4%, Atlanta at 7.4%, Phoenix at 11.7%, Denver at 7.6% and Charlotte, North Carolina at 8.6%.
Current wording
For the first quarter of 2025, national industrial vacancy was 7.0%. Our market areas reflected the following industrial vacancy levels for the fourth quarter of 2024: Springfield, Missouri at 2%, St. Louis at 4.0%, Kansas City at 4.8%, Minneapolis 3.8%, Dallas-Fort Worth at 9.1%, Chicago at 5.6%, Atlanta at 8.1%, Phoenix at 12.4%, Denver at 8.1% and Charlotte, North Carolina at 9.7%.
Previous wording
Great Southern’s total assets increased $224.1 million, or 3.9%, from $5.81 billion at December 31, 2023, to $6.04 billion at September 30, 2024. Details of the current period changes in total assets are provided below, under “Comparison of Financial Condition at September 30, 2024 and December 31, 2023.”
Current wording
Great Southern’s total assets increased $12.2 million, or 0.2%, from $5.98 billion at December 31, 2024, to $5.99 billion at March 31, 2025. Details of the current period changes in total assets are provided below, under “Comparison of Financial Condition at March 31, 2025 and December 31, 2024.”
Previous wording
Loans. Net outstanding loans increased $121.7 million, or 2.7%, from $4.59 billion at December 31, 2023, to $4.71 billion at September 30, 2024. The increase was primarily in other residential (multi-family) loans, partially offset by decreases in construction loans, commercial business loans, and one-to four- family residential loans. 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. Net outstanding loans increased $243,000 from December 31, 2024, to $4.69 billion at March 31, 2025. The increase was primarily in other residential (multi-family) loans and construction loans, partially offset by decreases in commercial real estate loan and one-to four- family residential loans. 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.
Previous wording
Recent growth has occurred in some loan types, primarily other residential (multi-family), 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. Underwriting standards and monitoring procedures utilized by the Company are designed to 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
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.
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 or above 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 September 30, 2024 and December 31, 2023, 0.2% of our owner occupied one-to four-family residential loans had loan-to-value ratios above 100% at origination and an estimated 0.4% of our 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 March 31, 2025 and December 31, 2024, 0.2% of our owner occupied one-to four-family residential loans had loan-to-value ratios above 100% at origination and an estimated 0.4% of our non-owner occupied one- to four-family residential loans had loan-to-value ratios above 100% at origination.
Previous wording
Held-to-maturity Securities. In the nine months ended September 30, 2024, held-to-maturity securities decreased $5.8 million, or 3.0%, from $195.0 million at December 31, 2023, to $189.3 million at September 30, 2024. SeeNote 5 “Investment Securities” in the Notes to Consolidated Financial Statements included in this report for additional information.
Current wording
Held-to-maturity Securities. In the three months ended March 31, 2025, held-to-maturity securities decreased $1.5 million, or 0.8%, from $187.4 million at December 31, 2024, to $185.9 million at March 31, 2025, due to principal repayments.
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 nine months ended September 30, 2024, total deposit balances decreased $24.2 million, or 0.5%. Compared to December 31, 2023, transaction account balances decreased $19.1 million, or 0.6%, to $3.09 billion at September 30, 2024, and retail certificates of deposit decreased $154.0 million, or 16.2%, to $794.2 million at September 30, 2024. 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 time deposits decreased due to a decrease in retail certificates generated through the banking center network. Competition for time deposits has been, and remains, significant in many of our markets. Brokered deposits, including IntraFi program purchased funds, were $810.4 million and $661.5 million at September 30, 2024 and December 31, 2023, respectively. The Company uses brokered deposits of select maturities 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 three months ended March 31, 2025, total deposit balances increased $152.5 million, or 3.3%. Compared to December 31, 2024, transaction account balances increased $43.3 million, or 1.4%, to $3.10 billion at March 31, 2025, and retail certificates of deposit decreased $14.1 million, or 1.8%, to $761.7 million at March 31, 2025. The increase in transaction accounts was primarily a result of an increase in various money market accounts. Retail time deposits decreased due to a net decrease in retail certificates generated through the banking center network. Competition for time deposits has been, and remains, significant in many of our markets. Brokered deposits, including IntraFi program purchased funds, were $895.4 million and $772.1 million at March 31, 2025 and December 31, 2024, respectively. The Company uses brokered deposits of select maturities from time to time to supplement its various funding channels and to manage interest rate risk. The additional brokered deposits were used to repay some of the Company’s short-term borrowings.
Previous wording
Our ability to fund growth in future periods may also depend on our ability to continue to access brokered deposits and FHLBank advances. In times when our loan demand has outpaced our generation of new deposits, we have utilized brokered deposits and FHLBank advances to fund these loans. These funding sources have been attractive to us because we can create either fixed or variable rate funding, as desired, which more closely matches the interest rate nature of much of our loan portfolio. It also gives us greater flexibility in increasing or decreasing the duration of our funding. While we do not currently anticipate that our ability to access these sources will be reduced or eliminated in future periods, if this should happen, the limitation on our ability to fund additional loans could have a material adverse effect on our business, financial condition and results of operations. See “Results of Operations and Comparison for the Three and Nine Months Ended September 30, 2024 and 2023 – Liquidity” below for further information on funding sources.
Current wording
Our ability to fund growth in future periods may also depend on our ability to continue to access brokered deposits and FHLBank advances. In times when our loan demand has outpaced our generation of new deposits, we have utilized brokered deposits and FHLBank advances to fund these loans. These funding sources have been attractive to us because we can create either fixed or variable rate funding, as desired, which more closely matches the interest rate nature of much of our loan portfolio. It also gives us greater flexibility in increasing or decreasing the duration of our funding. While we do not currently anticipate that our ability to access these sources will be reduced or eliminated in future periods, if this should happen, the limitation on our ability to fund additional loans could have a material adverse effect on our business, financial condition and results of operations. See “Results of Operations and Comparison for the Three Months Ended March 31, 2025 and 2024 – Liquidity” below for further information on funding sources.
Previous wording
Securities sold under reverse repurchase agreements with customers. Securities sold under reverse repurchase agreements with customers increased $5.0 million from $70.8 million at December 31, 2023 to $75.8 million at September 30, 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 increased $10.9 million from $64.4 million at December 31, 2024 to $75.3 million at March 31, 2025. These balances fluctuate over time based on customer demand for this product.
Previous wording
Short-term borrowings and other interest-bearing liabilities. Short term borrowings and other interest-bearing liabilities increased $189.6 million from $252.6 million at December 31, 2023 to $442.2 million at September 30, 2024. The Company may, from time to time, utilize overnight borrowings, short-term FHLBank advances, and BTFP borrowings from the Federal Reserve Bank of St. Louis (FRBSTL), depending on relative interest rates. The Company’s FHLBank term advances were $-0- at both September 30, 2024 and December 31, 2023. At September 30, 2024 and December 31, 2023, there was $261.0 million and $251.0 million, respectively, in overnight borrowings from the FHLBank, which were included in short term borrowings. In January 2024, the Bank borrowed $180.0 million under the BTFP program. The BTFP borrowing, which matures in January 2025 and has a fixed interest rate of 4.83%, may be repaid in full or in part without penalty prior to its stated maturity date. The line is secured primarily by the Bank’s held-to-maturity investment securities, with assets pledged totaling approximately $189.5 million at September 30, 2024. The proceeds from these borrowings were primarily used to repay a portion of the Bank’s overnight borrowings from the FHLBank.
Current wording
Short-term borrowings and other interest-bearing liabilities. Short term borrowings and other interest-bearing liabilities decreased $154.3 million from $514.2 million at December 31, 2024 to $359.9 million at March 31, 2025, primarily due to the Company’s utilization of brokered deposits as an alternative source of funding. The Company may, from time to time, utilize overnight borrowings, short-term FHLBank advances, and borrowings from the Federal Reserve Bank of St. Louis (FRBSTL), depending on relative interest rates. The Company’s FHLBank term advances were $-0- at both March 31, 2025 and December 31, 2024. At March 31, 2025 and December 31, 2024, there was $359.0 million and $333.0 million, respectively, in overnight borrowings from the FHLBank, which were included in short term borrowings.
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 3rd and a 1.00% decrease on March 16th. 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 a rate decrease of 0.50% in September. At September 30, 2024, the Federal Funds rate was 5.00%. Financial markets expect the possibility of further decreases in Federal Funds interest rates in 2024 and 2025 to be likely, but 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% 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 from December 14, 2016 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 3rd and a 1.00% decrease on March 16th. 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%, and remained at that level at March 31, 2025. Financial markets now expect the possibility of further decreases in Federal Funds interest rates in 2025 to be likely, but 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 ($1.54 billion at September 30, 2024) tied to various SOFR indexes that will be subject to adjustment at least once within 90 days after September 30, 2024. All of these loans have interest rate floors at various rates. Great Southern also has a portfolio of loans ($782 million at September 30, 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. All of these loans had interest rate floors at various rates. In addition, Great Southern has a portfolio of loans ($8.0 million at September 30, 2024) tied to an AMERIBOR index that will adjust immediately or within 90 days of a change to the rate on this index. All of these loans had interest rate floors at various rates. At September 30, 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. The current rates are such that a significant majority of these loans will also move fully with moderate future market interest rate decreases.
Current wording
Great Southern’s loan portfolio includes loans ($1.64 billion at March 31, 2025) tied to various SOFR indexes that will be subject to adjustment at least once within 90 days after March 31, 2025. All of these loans have interest rate floors at various rates. Great Southern also has a portfolio of loans ($760.4 million at March 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. All of these loans had interest rate floors at various rates. In addition, Great Southern has a portfolio of loans ($9.7 million at March 31, 2025) tied to an AMERIBOR index that will adjust immediately or within 90 days of a change to the rate on this index. All of these loans had interest rate floors at various rates. At March 31, 2025, 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.
Previous wording
A rate cut by the FRB generally would have an anticipated 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 and 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 and 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.
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. For further discussion of the processes used to manage our exposure to interest rate risk, see “Item 3. 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, but competition for deposits still remains significant in 2025. For further discussion of the processes used to manage our exposure to interest rate risk, see “Item 3. Quantitative and Qualitative Disclosures About Market Risk – How We Measure the Risks to Us Associated with Interest Rate Changes.”
Previous wording
Operating expenses consist primarily of salaries and employee benefits, occupancy-related expenses, expenses related to foreclosed assets, postage, FDIC deposit insurance, advertising and public relations, telephone, professional fees, office expenses and other general operating expenses. Details of the current period changes in non-interest income and non-interest expense are provided below, under “Results of Operations and Comparison for the Three and Nine Months Ended September 30, 2024 and 2023.”
Current wording
Operating expenses consist primarily of salaries and employee benefits, occupancy-related expenses, expenses related to foreclosed assets, postage, FDIC deposit insurance, advertising and public relations, telephone, professional fees, office expenses and other general operating expenses. Details of the current period changes in non-interest income and non-interest expense are provided below, under “Results of Operations and Comparison for the Three Months Ended March 31, 2025 and 2024.”
Previous wording
In 2025, the banking center at Benton and Chestnut in Springfield, Mo. will be replaced with a newly-constructed building on the same property at 723 N. Benton. Construction on the new building is anticipated to begin in the first quarter of 2025, with completion in the fourth quarter of 2025. During construction, customers will be serviced from a temporary facility on the property. The Company also has 11 other banking centers and an Express Center in Springfield.
Current wording
In March 2025, the Company began construction of a new banking center at 723 N. Benton in Springfield, Mo., to replace the existing facility at that location. The new construction, designed as a next-generation banking center, will allow for flexibility in testing new designs, processes, technology and tools balanced with customer convenience. Construction is expected to be completed in the fourth quarter of 2025. During construction, customers are being served by a temporary facility on the property. The Company has 11 other banking centers and an Express Center in Springfield.
Showing the first 40 of 106 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
The Company’s overall average interest rate spread decreased 37 basis points, or 11.9%, from 3.09% during the nine months ended September 30, 2023 to 2.72% during the nine months ended September 30, 2024. The decrease was due to an 80 basis point increase in the weighted average rate paid on interest-bearing liabilities, partially offset by a 44 basis point increase in the weighted average yield earned on interest-earning assets. In comparing the two periods, the yield on loans increased 47 basis points, the yield on investment securities increased 21 basis points and the yield on other interest-earning assets increased 35 basis points. The rate paid on deposits increased 75 basis points, the rate paid on reverse repurchase agreements increased 59 basis points, the rate paid on short-term borrowings and other interest-bearing liabilities increased 6 basis points and the rate paid on subordinated debentures issued to capital trust increased 46 basis points.
Previous report — wording carried elsewhere
The provision for losses on unfunded commitments for the three months ended September 30, 2024 was a negative provision of $63,000, compared to a negative provision of $1.2 million for the three months ended September 30, 2023. The provision for losses on unfunded commitments for the nine months ended September 30, 2024 was a negative provision of $540,000, compared to a negative provision of $3.6 million for the nine months ended September 30, 2023. General market conditions and unique circumstances related to specific industries and individual projects contribute to the determination of the level of provisions and charge-offs in each period.
Previous report — wording carried elsewhere
Legal, audit and other professional fees: Legal, audit and other professional fees decreased $1.1 million from the same period in 2023, to $4.4 million. In the 2024 period, the Company expensed a total of $1.9 million, compared to $2.7 million expensed in the 2023 period, related to training and implementation costs for the intended core systems conversion and professional fees to consultants engaged to support the Company’s proposed transition of core and ancillary software and information technology systems, which was terminated in April 2024.
Previous report — wording carried elsewhere
Defined as the Company’s net interest income divided by total average interest-earning assets.
Previous report — wording carried elsewhere
the Company’s common stock during the nine months ended September 30, 2024 totaling $12.5 million and dividends declared on common stock during that period of $14.0 million.