Great Southern Bancorp
Annual Report 2023

Plain-text annual report

2023 An nual Report for Stockho l de rs CORPORATE HEADQUARTERS 1451 E. Battlefield Springfield, MO 65804 800-749-7113 MAILING ADDRESS P.O. Box 9009 Springfield, MO 65808 DIVIDEND REINVESTMENT For details on the automatic reinvestment of dividends in common stock of the Company, call Computershare at 800-368-5948, (outside of the U.S. 781-575-4223), or visit computershare.com. FORM 10-K The Annual Report on Form 10-K filed with the Securities and Exchange Commission may be obtained from the Company’s website at GreatSouthernBank.com, the SEC website or without charge by request to: Investor Relations Great Southern Bancorp, Inc. P.O. Box 9009 Springfield, MO 65808 INVESTOR RELATIONS Kelly Polonus Great Southern Bank P.O. Box 9009 Springfield, MO 65808 AUDITORS FORVIS, LLP P.O. Box 1190 Springfield, MO 65801-1190 LEGAL COUNSEL Silver, Freedman, Taff and Tiernan, LLP 3299 K St., N.W., Suite 100 Washington, DC 20007 Carnahan Evans, P.C. P.O. Box 10009 Springfield, MO 65808 TRANSFER AGENT AND REGISTRAR Computershare Stockholder correspondence: Computershare Investor Services P.O. Box 43006 Providence, RI 02940-3006 Overnight correspondence: Computershare Investor Services 150 Royall St., Suite 101 Canton, MA 02021 800-368-5948 781-575-4223 outside of the U.S. Hearing Impaired # TDD: 800-952-9245 Questions and inquiries via the website, computershare.com 35th Annual Meeting of Stockholders May 8, 2024 | Virtual Meeting | 10 am CDT Corporate Profile Great Southern Bank was founded in 1923 with a $5,000 investment, four employees and 936 customers. Today, it has grown to $5.8 billion in total assets, with more than 1,100 dedicated associates serving 131,000 households. Headquartered in Springfield, Missouri, the Company operates offices in 12 states, including 89 retail banking centers in Missouri, Arkansas, Iowa, Kansas, Minnesota and Nebraska and seven loan production offices in the cities of Atlanta, Charlotte, Chicago, Dallas, Denver, Omaha and Phoenix. Great Southern offers one-stop shopping with a comprehensive lineup of financial services that give customers more choices for their money. Customers can choose from a wide variety of checking accounts, savings accounts and lending options. With the understanding that convenient access to banking services is a top priority, customers can access the Bank when, where and how they prefer, whether it is through a banking center, digital banking, an ATM/ITM or by telephone. Stock Information The Company’s common stock is listed on the NASDAQ Global Select Market under the symbol “GSBC.” As of December 31, 2023, there were 11,804,430 total shares of common stock outstanding. The last sale price of the Company's Common Stock on December 31, 2023 was $59.35. High/Low Stock Price First Quarter Second Quarter Third Quarter Fourth Quarter 2023 High $60. 18 56. 00 57. 72 61. 94 Low $49. 04 45. 39 45. 66 46. 60 2022 High $62. 70 61. 17 63. 95 64. 16 Low $56. 94 56. 17 50. 30 57. 15 2021 High $60. 55 58. 48 57. 01 59. 90 Low $47. 22 52. 81 49. 53 55. 00 Regular Dividend Declarations First Quarter Second Quarter Third Quarter Fourth Quarter 2023 2022 2021 $.34 $.36 $.40 .40 .40 .40 .40 .40 .40 .34 .36 .36 At Great Southern, we firmly believe that our associates' dedication to our customers sets us apart in the industry. Their tireless efforts and genuine care shine through in every interaction, reflecting a level of engagement beyond the ordinary. It is this extraordinary capability, combined with an innate desire to make a difference, that defines our corporate culture and propels us forward. Understanding that the caliber of our associates directly impacts our success, we prioritize a culture where every person feels valued, supported, and empowered. This commitment isn't just about doing what's right – it is an investment in our long-term prosperity. By nurturing a talented and engaged workforce, we drive operational excellence and customer satisfaction, which translates into increased stockholder value over the long term. Their dedication, expertise, and commitment to excellence directly impact our operational efficiency, customer satisfaction, and overall financial performance. As we continue to invest in our people and deliver new solutions to our customers, we remain confident in our ability to generate long-term value for all stakeholders. 2023 in Review Going into 2023, the banking industry expected strong headwinds with anticipated ongoing interest rate increases by the Federal Open Market Committee. These continued periodic interest rate increases through July 2023, and three large bank failures in March 2023, drove liquidity concerns leading to mounting deposit pricing pressure and low loan demand. Great Southern, due to significant competition and deposit mix changes, experienced higher deposit costs throughout the year, with the rate of increase tapering off in the fourth quarter. These higher deposit costs and certain expense items (further described in our Annual Report on Form 10-K) played key roles in our earnings of $67.8 million in 2023, down by $8.1 million from 2022. Our net interest margin was 3.57% in 2023 compared to 3.80% for the previous year. For 2023, our return on average assets was 1.19%, and our return on average equity was 12.31%. Importantly, our capital position remained strong and significantly exceeded regulatory well-capitalized thresholds. At the end of 2023, total stockholders' equity was $571.8 million, or 9.8% of total assets, increasing $38.7 million from the end of 2022. Book value increased from $43.58 per common share to $48.44 per common share during 2023. Total dividends of $1.60 per common share were declared during 2023. Additionally, we Throughout 2023, we remained steadfast in our continued to prioritize stock repurchases, commitment to prudent risk management and acquiring approximately 450,000 shares of our strategic loan growth. New loan production and common stock at an average price of $51.38 per general lending activity were down as expected share during the year. These initiatives highlight during the year. Total outstanding loans, our dedication to enhancing shareholder value excluding mortgage loans held for sale, increased while maintaining prudent capital management by $83.8 million, or 1.8%, from $4.51 billion at practices. Amid heightened competition and evolving market dynamics, we remained consistent in our commitment to meeting the diverse banking needs of our customers. Despite the interest rate environment headwinds, we maintained a proactive approach to managing our deposit portfolio, strategically balancing the mix of funding sources to maintain ample liquidity. Our ability to adapt to changing market conditions and effectively deploy funding resources underscores our resilience and agility as a financial institution. As we look to the future, delivering value and stability to our depositors while actively managing the competitive landscape dynamics will continue to be a focus. December 31, 2022, to $4.60 billion at December 31, 2023. Growth primarily came from the multi-family loan and commercial business loan categories, partially offset by a reduction in construction loans and one- to four-family residential loans. Much of the growth from the multi-family loan segment was the movement from unfunded construction line availability to fund construction projects. Credit quality remained exceptional during 2023, with non-performing assets and delinquencies continuing to be maintained at historically low levels. This disciplined approach indicates our commitment to preserving asset quality and ensuring the long-term stability of our loan portfolio, positioning us for sustained growth while effectively managing risk. William V. Turner Chairman of the Board Joseph W. Turner President and Chief Executive Officer To our fellow stockholders: As we reflect on the achievements and challenges of the past year, we are honored to share Great Southern Bank's 2023 annual report. The theme of this year's annual report is "Unchanging values for a changing world." Despite the ever-evolving landscape of the banking industry, we remain grounded in our values, which have been the cornerstone of our enduring success. As we continue our journey, our core values will guide everything we do at Great Southern. Doing what's right is more than just a motto; it is a philosophy that underscores our responsibility to be fair and respectful in all interactions. Our dedication to teamwork fosters an environment where collaboration and support are encouraged and celebrated, driving us toward shared objectives and collective success. Mutual respect is the foundation upon which we build relationships, valuing diversity and treating everyone with dignity. And our uncompromising ethical standards ensure that every decision and action we take is grounded in honesty and integrity. These values are not merely words on a page but define who we are as a company and set the standard for how we conduct ourselves in every aspect of our business. 2 customers and support one another, embodying the true spirit of teamwork and commitment. Their resilience and dedication have been the driving force behind our continued success. I am deeply grateful for their contributions—their work matters and goes beyond being merely a job. We help people and institutions finance and achieve their aspirations, lifting individuals, homeowners, and businesses in every community we serve. Our associates' hard work, passion, and commitment propel us forward, even in the face of uncertainty. We have always placed our trust in the people of Great Southern, and we have never been 2024 and Beyond disappointed. As we navigate the uncertainties presented by the economic and geopolitical landscape, we are focused on ensuring that Great Southern is well-positioned to weather any challenges that may arise. We understand that the decisions we make today will shape the future success of our company, and we stand resolute in our commitment to serving the long-term interests of all our stakeholders.  We recognize that our success hinges not only on our talented workforce but also on effective leadership. At the end of 2024, we expect and have planned for the retirement of a key member of our management team, Chief Retail Banking Officer Kris Conley. Kris has been an integral part of our organization since 1998, assuming the role of Director of Retail Banking in 2010. In early 2023, Kris announced his intent to retire in December of 2024, marking the end of nearly three decades In the coming year, our focus is on deepening our of invaluable contributions to our company. Kris's relationships with our customers, providing them unwavering dedication to excellence and keen with innovative solutions, personalized service, insight into retail banking operations have driven and exceptional experiences. From assisting growth and maximized customer satisfaction. young families in achieving homeownership dreams to supporting businesses in their growth endeavors, we remain dedicated to being their trusted financial partner every step of the way, helping them achieve their goals and aspirations. We are pleased to share that Laura Smith, formerly responsible for managing Investments, will succeed Kris Conley as the new chief retail banking officer. Laura first joined Great Southern Bank in 2003, and her extensive experience and Additionally, we are deeply committed to collaborative approach have positioned her as an strengthening the bonds with the communities ideal candidate to lead our banking centers, we serve, actively engaging in initiatives that which serve as the cornerstone of our network. foster growth, resilience, and prosperity. By With Laura's guidance and expertise, we are partnering with local organizations and investing confident in our ability to maintain operational in community development projects, we aim to excellence and deliver unparalleled service to our create lasting positive change and contribute to customers. the well-being of our neighborhoods, ensuring they thrive. We extend our appreciation to our Board of Directors for their indispensable guidance and We owe a debt of gratitude to our more than 1,100 support. Their talents and extensive knowledge associates who show up daily, ready to serve our continue to enrich our company, steering us toward continued success. In particular, we are delighted to welcome Amelia "Amy" Counts to our Board. Appointed as a Director in December 2023, Amy brings a wealth of experience as the regional vice president of sales at Wise F&I in St. Louis, Missouri. Amy's track record of surpassing sales growth objectives and orchestrating successful negotiations underscores her exceptional leadership.  Finally, with a steadfast focus on delivering sustainable long-term value for our stockholders, we remain committed to prudent financial management, strategic investments, and operational excellence. We understand the trust you have placed in us as stewards of your capital, and we take this responsibility seriously. Your investment allows us to drive strong performance and deliver superior returns, and for that, we extend our sincerest appreciation. Together, we will continue to navigate the ever-changing banking landscape with resilience and determination, creating value for both our stockholders and our communities. From our associates to our customers, our communities to stockholders, we are grateful for your continued support and trust as we embark on this journey together. We welcome your feedback at any time. William V. Turner Joseph W. Turner To our fellow stockholders: As we reflect on the achievements and challenges of the past year, we are honored to share Great Southern Bank's 2023 annual report. The theme of this year's annual report is "Unchanging values for a changing world." Despite the ever-evolving landscape of the banking industry, we remain grounded in our values, which have been the cornerstone of our enduring success. As we continue our journey, our core values will guide everything we do at Great Southern. Doing what's right is more than just a motto; it is a philosophy that underscores our responsibility to be fair and respectful in all interactions. Our dedication to teamwork fosters an environment where collaboration and support are encouraged and celebrated, driving us toward shared objectives and collective success. Mutual respect is the foundation upon which we build relationships, valuing diversity and treating everyone with dignity. And our uncompromising ethical standards ensure that every decision and action we take is grounded in honesty and integrity. These values are not merely words on a page but define who we are as a company and set the standard for how we conduct ourselves in every aspect of our business. At Great Southern, we firmly believe that our associates' dedication to our customers sets us apart in the industry. Their tireless efforts and genuine care shine through in every interaction, reflecting a level of engagement beyond the ordinary. It is this extraordinary capability, combined with an innate desire to make a difference, that defines our corporate culture and propels us forward. Understanding that the caliber of our associates directly impacts our success, we prioritize a culture where every person feels valued, supported, and empowered. This commitment isn't just about doing what's right – it is an investment in our long-term prosperity. By nurturing a talented and engaged workforce, we drive operational excellence and customer satisfaction, which translates into increased stockholder value over the long term. Their dedication, expertise, and commitment to excellence directly impact our operational efficiency, customer satisfaction, and overall financial performance. As we continue to invest in our people and deliver new solutions to our customers, we remain confident in our ability to generate long-term value for all stakeholders. 2023 in Review Going into 2023, the banking industry expected strong headwinds with anticipated ongoing interest rate increases by the Federal Open Market Committee. These continued periodic interest rate increases through July 2023, and three large bank failures in March 2023, drove liquidity concerns leading to mounting deposit pricing pressure and low loan demand. Great Southern, due to significant competition and deposit mix changes, experienced higher deposit costs throughout the year, with the rate of increase tapering off in the fourth quarter. These higher deposit costs and certain expense items (further described in our Annual Report on Form 10-K) played key roles in our earnings of $67.8 million in 2023, down by $8.1 million from 2022. Our net interest margin was 3.57% in 2023 compared to 3.80% for the previous year. For 2023, our return on average assets was 1.19%, and our return on average equity was 12.31%. Importantly, our capital position remained strong and significantly exceeded regulatory well-capitalized thresholds. At the end of 2023, total stockholders' equity was $571.8 million, or 9.8% of total assets, increasing $38.7 million from the end of 2022. Book value increased from $43.58 per common share to $48.44 per common share during 2023. Total dividends of $1.60 per common Doing what’s right Mutual respect Core VALUES Teamwork Uncompromising ethical standards 3 share were declared during 2023. Additionally, Throughout 2023, we remained steadfast in our we continued to prioritize stock repurchases, commitment to prudent risk management and acquiring approximately 450,000 shares of our strategic loan growth. New loan production and common stock at an average price of $51.38 per general lending activity were down as expected share during the year. These initiatives highlight during the year. Total outstanding loans, our dedication to enhancing shareholder value excluding mortgage loans held for sale, increased while maintaining prudent capital management by $83.8 million, or 1.8%, from $4.51 billion at practices. Amid heightened competition and evolving market dynamics, we remained consistent in our commitment to meeting the diverse banking needs of our customers. Despite the interest rate environment headwinds, we maintained a proactive approach to managing our deposit portfolio, strategically balancing the mix of funding sources to maintain ample liquidity. Our ability to adapt to changing market conditions and effectively deploy funding resources underscores our resilience and agility as a financial institution. As we look to the future, delivering value and stability to our depositors while actively managing the competitive landscape dynamics will continue to be a focus. December 31, 2022, to $4.60 billion at December 31, 2023. Growth primarily came from the multi-family loan and commercial business loan categories, partially offset by a reduction in construction loans and one- to four-family residential loans. Much of the growth from the multi-family loan segment was the movement from unfunded construction line availability to fund construction projects. Credit quality remained exceptional during 2023, with non-performing assets and delinquencies continuing to be maintained at historically low levels. This disciplined approach indicates our commitment to preserving asset quality and ensuring the long-term stability of our loan portfolio, positioning us for sustained growth while effectively managing risk. customers and support one another, embodying the true spirit of teamwork and commitment. Their resilience and dedication have been the driving force behind our continued success. We are deeply grateful for their contributions—their work matters and goes beyond being merely a job. We help people and institutions finance and achieve their aspirations, lifting individuals, homeowners, and businesses in every community we serve. Our associates' hard work, passion, and commitment propel us forward, even in the face of uncertainty. We have always placed our trust in the people of Great Southern, and we have never 2024 and Beyond been disappointed. As we navigate the uncertainties presented by the economic and geopolitical landscape, we are focused on ensuring that Great Southern is well-positioned to weather any challenges that may arise. We understand that the decisions we make today will shape the future success of our company, and we stand resolute in our commitment to serving the long-term interests of all our stakeholders.  We recognize that our success hinges not only on our talented workforce but also on effective leadership. At the end of 2024, we expect and have planned for the retirement of a key member of our management team, Chief Retail Banking Officer Kris Conley. Kris has been an integral part of our organization since 1998, assuming the role of Director of Retail Banking in 2010. In early 2023, Kris announced his intent to retire in December of 2024, marking the end of nearly three decades In the coming year, our focus is on deepening our of invaluable contributions to our company. Kris's relationships with our customers, providing them unwavering dedication to excellence and keen with innovative solutions, personalized service, insight into retail banking operations have driven and exceptional experiences. From assisting growth and maximized customer satisfaction. young families in achieving homeownership dreams to supporting businesses in their growth endeavors, we remain dedicated to being their trusted financial partner every step of the way, helping them achieve their goals and aspirations. We are pleased to share that Laura Smith, formerly responsible for managing Investments, will succeed Kris Conley as the new Chief Retail Banking Officer. Laura first joined Great Southern Bank in 2003, and her extensive experience and Additionally, we are deeply committed to collaborative approach have positioned her as an strengthening the bonds with the communities ideal candidate to lead our banking centers, we serve, actively engaging in initiatives that which serve as the cornerstone of our network. foster growth, resilience, and prosperity. By With Laura's guidance and expertise, we are partnering with local organizations and investing confident in our ability to maintain operational in community development projects, we aim to excellence and deliver unparalleled service to create lasting positive change and contribute to our customers. the well-being of our neighborhoods, ensuring they thrive. We extend our appreciation to our Board of Directors for their indispensable guidance and We owe a debt of gratitude to our more than 1,100 support. Their talents and extensive knowledge associates who show up daily, ready to serve our continue to enrich our company, steering us toward continued success. In particular, we are delighted to welcome Amelia "Amy" Counts to our Board. Appointed as a Director in December 2023, Amy brings a wealth of experience as the regional vice president of sales at Wise F&I in St. Louis, Missouri. Amy's track record of surpassing sales growth objectives and orchestrating successful negotiations underscores her exceptional leadership.  Finally, with a steadfast focus on delivering sustainable long-term value for our stockholders, we remain committed to prudent financial management, strategic investments, and operational excellence. We understand the trust you have placed in us as stewards of your capital, and we take this responsibility seriously. Your investment allows us to drive strong performance and deliver superior returns, and for that, we extend our sincerest appreciation. Together, we will continue to navigate the ever-changing banking landscape with resilience and determination, creating value for both our stockholders and our communities. From our associates to our customers, our communities to stockholders, we are grateful for your continued support and trust as we embark on this journey together. We welcome your feedback at any time. William V. Turner Joseph W. Turner At Great Southern, we firmly believe that our associates' dedication to our customers sets us apart in the industry. Their tireless efforts and genuine care shine through in every interaction, reflecting a level of engagement beyond the ordinary. It is this extraordinary capability, combined with an innate desire to make a difference, that defines our corporate culture and propels us forward. Understanding that the caliber of our associates directly impacts our success, we prioritize a culture where every person feels valued, supported, and empowered. This commitment isn't just about doing what's right – it is an investment in our long-term prosperity. By nurturing a talented and engaged workforce, we drive operational excellence and customer satisfaction, which translates into increased stockholder value over the long term. Their dedication, expertise, and commitment to excellence directly impact our operational efficiency, customer satisfaction, and overall financial performance. As we continue to invest in our people and deliver new solutions to our customers, we remain confident in our ability to generate long-term value for all stakeholders. 2023 in Review Going into 2023, the banking industry expected strong headwinds with anticipated ongoing interest rate increases by the Federal Open Market Committee. These continued periodic interest rate increases through July 2023, and three large bank failures in March 2023, drove liquidity concerns leading to mounting deposit pricing pressure and low loan demand. Great Southern, due to significant competition and deposit mix changes, experienced higher deposit costs throughout the year, with the rate of increase tapering off in the fourth quarter. These higher deposit costs and certain expense items (further described in our Annual Report on Form 10-K) played key roles in our earnings of $67.8 million in 2023, down by $8.1 million from 2022. Our net interest margin was 3.57% in 2023 compared to 3.80% for the previous year. For 2023, our return on average assets was 1.19%, and our return on average equity was 12.31%. Importantly, our capital position remained strong and significantly exceeded regulatory well-capitalized thresholds. At the end of 2023, total stockholders' equity was $571.8 million, or 9.8% of total assets, increasing $38.7 million from the end of 2022. Book value increased from $43.58 per common share to $48.44 per common share during 2023. Total dividends of $1.60 per common To our fellow stockholders: As we reflect on the achievements and challenges of the past year, we are honored to share Great Southern Bank's 2023 annual report. The theme of this year's annual report is "Unchanging values for a changing world." Despite the ever-evolving landscape of the banking industry, we remain grounded in our values, which have been the cornerstone of our enduring success. As we continue our journey, our core values will guide everything we do at Great Southern. Doing what's right is more than just a motto; it is a philosophy that underscores our responsibility to be fair and respectful in all interactions. Our dedication to teamwork fosters an environment where collaboration and support are encouraged and celebrated, driving us toward shared objectives and collective success. Mutual respect is the foundation upon which we build relationships, valuing diversity and treating everyone with dignity. And our uncompromising ethical standards ensure that every decision and action we take is grounded in honesty and integrity. These values are not merely words on a page but define who we are as a company and set the standard for how we conduct ourselves in every aspect of our business. share were declared during 2023. Additionally, we continued to prioritize stock repurchases, acquiring approximately 450,000 shares of our common stock at an average price of $51.38 per share during the year. These initiatives highlight our dedication to enhancing shareholder value while maintaining prudent capital management practices. Amid heightened competition and evolving market dynamics, we remained consistent in our commitment to meeting the diverse banking needs of our customers. Despite the interest rate environment headwinds, we maintained a proactive approach to managing our deposit portfolio, strategically balancing the mix of funding sources to maintain ample liquidity. Our ability to adapt to changing market conditions and effectively deploy funding resources underscores our resilience and agility as a financial institution. As we look to the future, delivering value and stability to our depositors while actively managing the competitive landscape dynamics will continue to be a focus. Throughout 2023, we remained steadfast in our commitment to prudent risk management and strategic loan growth. New loan production and general lending activity were down as expected during the year. Total outstanding loans, excluding mortgage loans held for sale, increased by $83.8 million, or 1.8%, from $4.51 billion at December 31, 2022, to $4.60 billion at December 31, 2023. Growth primarily came from the multi-family loan and commercial business loan categories, partially offset by a reduction in construction loans and one- to four-family residential loans. Much of the growth from the multi-family loan segment was the movement from unfunded construction line availability to fund construction projects. Credit quality remained exceptional during 2023, with non-performing assets and delinquencies continuing to be maintained at historically low levels. This disciplined approach indicates our commitment to preserving asset quality and ensuring the long-term stability of our loan portfolio, positioning us for sustained growth while effectively managing risk. Total Assets $5.81 Billion Total Deposits $4.72 Billion Total Loans $4.60 Billion $5B $4B $3B $2B $1B 0 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 4 customers and support one another, embodying the true spirit of teamwork and commitment. Their resilience and dedication have been the driving force behind our continued success. We are deeply grateful for their contributions—their work matters and goes beyond being merely a job. We help people and institutions finance and achieve their aspirations, lifting individuals, homeowners, and businesses in every community we serve. Our associates' hard work, passion, and commitment propel us forward, even in the face of uncertainty. We have always placed our trust in the people of Great Southern, and we have never 2024 and Beyond been disappointed. As we navigate the uncertainties presented by the economic and geopolitical landscape, we are focused on ensuring that Great Southern is well-positioned to weather any challenges that may arise. We understand that the decisions we make today will shape the future success of our company, and we stand resolute in our commitment to serving the long-term interests of all our stakeholders.  We recognize that our success hinges not only on our talented workforce but also on effective leadership. At the end of 2024, we expect and have planned for the retirement of a key member of our management team, Chief Retail Banking Officer Kris Conley. Kris has been an integral part of our organization since 1998, assuming the role of Director of Retail Banking in 2010. In early 2023, Kris announced his intent to retire in December of 2024, marking the end of nearly three decades In the coming year, our focus is on deepening our of invaluable contributions to our company. Kris's relationships with our customers, providing them unwavering dedication to excellence and keen with innovative solutions, personalized service, insight into retail banking operations have driven and exceptional experiences. From assisting growth and maximized customer satisfaction. young families in achieving homeownership dreams to supporting businesses in their growth endeavors, we remain dedicated to being their trusted financial partner every step of the way, helping them achieve their goals and aspirations. We are pleased to share that Laura Smith, formerly responsible for managing Investments, will succeed Kris Conley as the new Chief Retail Banking Officer. Laura first joined Great Southern Bank in 2003, and her extensive experience and Additionally, we are deeply committed to collaborative approach have positioned her as an strengthening the bonds with the communities ideal candidate to lead our banking centers, we serve, actively engaging in initiatives that which serve as the cornerstone of our network. foster growth, resilience, and prosperity. By With Laura's guidance and expertise, we are partnering with local organizations and investing confident in our ability to maintain operational in community development projects, we aim to excellence and deliver unparalleled service to create lasting positive change and contribute to our customers. the well-being of our neighborhoods, ensuring they thrive. We extend our appreciation to our Board of Directors for their indispensable guidance and We owe a debt of gratitude to our more than 1,100 support. Their talents and extensive knowledge associates who show up daily, ready to serve our continue to enrich our company, steering us toward continued success. In particular, we are delighted to welcome Amelia "Amy" Counts to our Board. Appointed as a Director in December 2023, Amy brings a wealth of experience as the regional vice president of sales at Wise F&I in St. Louis, Missouri. Amy's track record of surpassing sales growth objectives and orchestrating successful negotiations underscores her exceptional leadership.  Finally, with a steadfast focus on delivering sustainable long-term value for our stockholders, we remain committed to prudent financial management, strategic investments, and operational excellence. We understand the trust you have placed in us as stewards of your capital, and we take this responsibility seriously. Your investment allows us to drive strong performance and deliver superior returns, and for that, we extend our sincerest appreciation. Together, we will continue to navigate the ever-changing banking landscape with resilience and determination, creating value for both our stockholders and our communities. From our associates to our customers, our communities to stockholders, we are grateful for your continued support and trust as we embark on this journey together. We welcome your feedback at any time. William V. Turner Joseph W. Turner At Great Southern, we firmly believe that our associates' dedication to our customers sets us apart in the industry. Their tireless efforts and genuine care shine through in every interaction, reflecting a level of engagement beyond the ordinary. It is this extraordinary capability, combined with an innate desire to make a difference, that defines our corporate culture and propels us forward. Understanding that the caliber of our associates directly impacts our success, we prioritize a culture where every person feels valued, supported, and empowered. This commitment isn't just about doing what's right – it is an investment in our long-term prosperity. By nurturing a talented and engaged workforce, we drive operational excellence and customer satisfaction, which translates into increased stockholder value over the long term. Their dedication, expertise, and commitment to excellence directly impact our operational efficiency, customer satisfaction, and overall financial performance. As we continue to invest in our people and deliver new solutions to our customers, we remain confident in our ability to generate long-term value for all stakeholders. 2023 in Review Going into 2023, the banking industry expected strong headwinds with anticipated ongoing interest rate increases by the Federal Open Market Committee. These continued periodic interest rate increases through July 2023, and three large bank failures in March 2023, drove liquidity concerns leading to mounting deposit pricing pressure and low loan demand. Great Southern, due to significant competition and deposit mix changes, experienced higher deposit costs throughout the year, with the rate of increase tapering off in the fourth quarter. These higher deposit costs and certain expense items (further described in our Annual Report on Form 10-K) played key roles in our earnings of $67.8 million in 2023, down by $8.1 million from 2022. Our net interest margin was 3.57% in 2023 compared to 3.80% for the previous year. For 2023, our return on average assets was 1.19%, and our return on average equity was 12.31%. Importantly, our capital position remained strong and significantly exceeded regulatory well-capitalized thresholds. At the end of 2023, total stockholders' equity was $571.8 million, or 9.8% of total assets, increasing $38.7 million from the end of 2022. Book value increased from $43.58 per common share to $48.44 per common share during 2023. Total dividends of $1.60 per common share were declared during 2023. Additionally, we Throughout 2023, we remained steadfast in our continued to prioritize stock repurchases, commitment to prudent risk management and acquiring approximately 450,000 shares of our strategic loan growth. New loan production and common stock at an average price of $51.38 per general lending activity were down as expected share during the year. These initiatives highlight during the year. Total outstanding loans, our dedication to enhancing shareholder value excluding mortgage loans held for sale, increased while maintaining prudent capital management by $83.8 million, or 1.8%, from $4.51 billion at practices. Amid heightened competition and evolving market dynamics, we remained consistent in our commitment to meeting the diverse banking needs of our customers. Despite the interest rate environment headwinds, we maintained a proactive approach to managing our deposit portfolio, strategically balancing the mix of funding sources to maintain ample liquidity. Our ability to adapt to changing market conditions and effectively deploy funding resources underscores our resilience and agility as a financial institution. As we look to the future, delivering value and stability to our depositors while actively managing the competitive landscape dynamics will continue to be a focus. December 31, 2022, to $4.60 billion at December 31, 2023. Growth primarily came from the multi-family loan and commercial business loan categories, partially offset by a reduction in construction loans and one- to four-family residential loans. Much of the growth from the multi-family loan segment was the movement from unfunded construction line availability to fund construction projects. Credit quality remained exceptional during 2023, with non-performing assets and delinquencies continuing to be maintained at historically low levels. This disciplined approach indicates our commitment to preserving asset quality and ensuring the long-term stability of our loan portfolio, positioning us for sustained growth while effectively managing risk. To our fellow stockholders: As we reflect on the achievements and challenges of the past year, we are honored to share Great Southern Bank's 2023 annual report. The theme of this year's annual report is "Unchanging values for a changing world." Despite the ever-evolving landscape of the banking industry, we remain grounded in our values, which have been the cornerstone of our enduring success. As we continue our journey, our core values will guide everything we do at Great Southern. Doing what's right is more than just a motto; it is a philosophy that underscores our responsibility to be fair and respectful in all interactions. Our dedication to teamwork fosters an environment where collaboration and support are encouraged and celebrated, driving us toward shared objectives and collective success. Mutual respect is the foundation upon which we build relationships, valuing diversity and treating everyone with dignity. And our uncompromising ethical standards ensure that every decision and action we take is grounded in honesty and integrity. These values are not merely words on a page but define who we are as a company and set the standard for how we conduct ourselves in every aspect of our business. $48.44 Book Value per Common Share $67.80 Million 2023 Total Net Income 40 30 20 10 0 70 60 50 40 30 20 10 0 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 $152.77 Total Return Five Year Cumulative Great Southern Bancorp, Inc. NASDAQ Composite Index S&P U.S. BMI Banks - Midwest Region Index 250 200 150 100 0 2018 2019 2020 2021 2022 2023 The graph above compares the cumulative total stockholder return on GSBC Common Stock to the cumulative total returns on the NASDAQ Composite Index and the S&P U.S. BMI Banks – Midwest Region Index for the period December 31, 2018 through December 31, 2023. The graph assumes that $100 was invested in GSBC Common Stock and in each of the indices on December 31, 2018 and that all dividends were reinvested. Source: S&P Global Market Intelligence © 2024 5 customers and support one another, embodying the true spirit of teamwork and commitment. Their resilience and dedication have been the driving force behind our continued success. I am deeply grateful for their contributions—their work matters and goes beyond being merely a job. We help people and institutions finance and achieve their aspirations, lifting individuals, homeowners, and businesses in every community we serve. Our associates' hard work, passion, and commitment propel us forward, even in the face of uncertainty. We have always placed our trust in the people of Great Southern, and we have never been 2024 and Beyond disappointed. As we navigate the uncertainties presented by the economic and geopolitical landscape, we are focused on ensuring that Great Southern is well-positioned to weather any challenges that may arise. We understand that the decisions we make today will shape the future success of our company, and we stand resolute in our commitment to serving the long-term interests of all our stakeholders.  We recognize that our success hinges not only on our talented workforce but also on effective leadership. At the end of 2024, we expect and have planned for the retirement of a key member of our management team, Chief Retail Banking Officer Kris Conley. Kris has been an integral part of our organization since 1998, assuming the role of Director of Retail Banking in 2010. In early 2023, Kris announced his intent to retire in December of 2024, marking the end of nearly three decades In the coming year, our focus is on deepening our of invaluable contributions to our company. Kris's relationships with our customers, providing them unwavering dedication to excellence and keen with innovative solutions, personalized service, insight into retail banking operations have driven and exceptional experiences. From assisting growth and maximized customer satisfaction. young families in achieving homeownership dreams to supporting businesses in their growth endeavors, we remain dedicated to being their trusted financial partner every step of the way, helping them achieve their goals and aspirations. We are pleased to share that Laura Smith, formerly responsible for managing Investments, will succeed Kris Conley as the new chief retail banking officer. Laura first joined Great Southern Bank in 2003, and her extensive experience and Additionally, we are deeply committed to collaborative approach have positioned her as an strengthening the bonds with the communities ideal candidate to lead our banking centers, we serve, actively engaging in initiatives that which serve as the cornerstone of our network. foster growth, resilience, and prosperity. By With Laura's guidance and expertise, we are partnering with local organizations and investing confident in our ability to maintain operational in community development projects, we aim to excellence and deliver unparalleled service to our create lasting positive change and contribute to customers. the well-being of our neighborhoods, ensuring they thrive. We extend our appreciation to our Board of Directors for their indispensable guidance and We owe a debt of gratitude to our more than 1,100 support. Their talents and extensive knowledge associates who show up daily, ready to serve our continue to enrich our company, steering us toward continued success. In particular, we are delighted to welcome Amelia "Amy" Counts to our Board. Appointed as a Director in December 2023, Amy brings a wealth of experience as the regional vice president of sales at Wise F&I in St. Louis, Missouri. Amy's track record of surpassing sales growth objectives and orchestrating successful negotiations underscores her exceptional leadership.  Finally, with a steadfast focus on delivering sustainable long-term value for our stockholders, we remain committed to prudent financial management, strategic investments, and operational excellence. We understand the trust you have placed in us as stewards of your capital, and we take this responsibility seriously. Your investment allows us to drive strong performance and deliver superior returns, and for that, we extend our sincerest appreciation. Together, we will continue to navigate the ever-changing banking landscape with resilience and determination, creating value for both our stockholders and our communities. From our associates to our customers, our communities to stockholders, we are grateful for your continued support and trust as we embark on this journey together. We welcome your feedback at any time. William V. Turner Joseph W. Turner At Great Southern, we firmly believe that our associates' dedication to our customers sets us apart in the industry. Their tireless efforts and genuine care shine through in every interaction, reflecting a level of engagement beyond the ordinary. It is this extraordinary capability, combined with an innate desire to make a difference, that defines our corporate culture and propels us forward. Understanding that the caliber of our associates directly impacts our success, we prioritize a culture where every person feels valued, supported, and empowered. This commitment isn't just about doing what's right – it is an investment in our long-term prosperity. By nurturing a talented and engaged workforce, we drive operational excellence and customer satisfaction, which translates into increased stockholder value over the long term. Their dedication, expertise, and commitment to excellence directly impact our operational efficiency, customer satisfaction, and overall financial performance. As we continue to invest in our people and deliver new solutions to our customers, we remain confident in our ability to generate long-term value for all stakeholders. 2023 in Review Going into 2023, the banking industry expected strong headwinds with anticipated ongoing interest rate increases by the Federal Open Market Committee. These continued periodic interest rate increases through July 2023, and three large bank failures in March 2023, drove liquidity concerns leading to mounting deposit pricing pressure and low loan demand. Great Southern, due to significant competition and deposit mix changes, experienced higher deposit costs throughout the year, with the rate of increase tapering off in the fourth quarter. These higher deposit costs and certain expense items (further described in our Annual Report on Form 10-K) played key roles in our earnings of $67.8 million in 2023, down by $8.1 million from 2022. Our net interest margin was 3.57% in 2023 compared to 3.80% for the previous year. For 2023, our return on average assets was 1.19%, and our return on average equity was 12.31%. Importantly, our capital position remained strong and significantly exceeded regulatory well-capitalized thresholds. At the end of 2023, total stockholders' equity was $571.8 million, or 9.8% of total assets, increasing $38.7 million from the end of 2022. Book value increased from $43.58 per common share to $48.44 per common share during 2023. Total dividends of $1.60 per common share were declared during 2023. Additionally, Throughout 2023, we remained steadfast in our we continued to prioritize stock repurchases, commitment to prudent risk management and acquiring approximately 450,000 shares of our strategic loan growth. New loan production and common stock at an average price of $51.38 per general lending activity were down as expected share during the year. These initiatives highlight during the year. Total outstanding loans, our dedication to enhancing shareholder value excluding mortgage loans held for sale, increased while maintaining prudent capital management by $83.8 million, or 1.8%, from $4.51 billion at practices. Amid heightened competition and evolving market dynamics, we remained consistent in our commitment to meeting the diverse banking needs of our customers. Despite the interest rate environment headwinds, we maintained a proactive approach to managing our deposit portfolio, strategically balancing the mix of funding sources to maintain ample liquidity. Our ability to adapt to changing market conditions and effectively deploy funding resources underscores our resilience and agility as a financial institution. As we look to the future, delivering value and stability to our depositors while actively managing the competitive landscape dynamics will continue to be a focus. December 31, 2022, to $4.60 billion at December 31, 2023. Growth primarily came from the multi-family loan and commercial business loan categories, partially offset by a reduction in construction loans and one- to four-family residential loans. Much of the growth from the multi-family loan segment was the movement from unfunded construction line availability to fund construction projects. Credit quality remained exceptional during 2023, with non-performing assets and delinquencies continuing to be maintained at historically low levels. This disciplined approach indicates our commitment to preserving asset quality and ensuring the long-term stability of our loan portfolio, positioning us for sustained growth while effectively managing risk. To our fellow stockholders: As we reflect on the achievements and challenges of the past year, we are honored to share Great Southern Bank's 2023 annual report. The theme of this year's annual report is "Unchanging values for a changing world." Despite the ever-evolving landscape of the banking industry, we remain grounded in our values, which have been the cornerstone of our enduring success. As we continue our journey, our core values will guide everything we do at Great Southern. Doing what's right is more than just a motto; it is a philosophy that underscores our responsibility to be fair and respectful in all interactions. Our dedication to teamwork fosters an environment where collaboration and support are encouraged and celebrated, driving us toward shared objectives and collective success. Mutual respect is the foundation upon which we build relationships, valuing diversity and treating everyone with dignity. And our uncompromising ethical standards ensure that every decision and action we take is grounded in honesty and integrity. These values are not merely words on a page but define who we are as a company and set the standard for how we conduct ourselves in every aspect of our business. customers and support one another, embodying the true spirit of teamwork and commitment. Their resilience and dedication have been the driving force behind our continued success. We are deeply grateful for their contributions – their work matters and goes beyond being merely a job. We help people and institutions finance and achieve their aspirations, lifting individuals, homeowners, and businesses in every community we serve. Our associates' hard work, passion, and commitment propel us forward, even in the face of uncertainty. We have always placed our trust in the people of Great Southern, and we have never been disappointed. We recognize that our success hinges not only on our talented workforce but also on effective leadership. At the end of 2024, we expect and have planned for the retirement of a key member of our management team, Chief Retail Banking Officer Kris Conley. Kris has been an integral part of our organization since 1998, assuming the role of Director of Retail Banking in 2010. In early 2023, Kris announced his intent to retire in December of 2024, marking the end of nearly three decades of invaluable contributions to our company. Kris's unwavering dedication to excellence and keen insight into retail banking operations have driven growth and maximized customer satisfaction. We are pleased to share that Laura Smith, formerly responsible for managing Investments, will succeed Kris Conley as the new Chief Retail Banking Officer. Laura first joined Great Southern Bank in 2003, and her extensive experience and collaborative approach have positioned her as an ideal candidate to lead our banking centers, which serve as the cornerstone of our network. With Laura's guidance and expertise, we are confident in our ability to maintain operational excellence and deliver unparalleled service to our customers. We extend our appreciation to our Board of Directors for their indispensable guidance and support. Their talents and extensive knowledge continue to enrich our company, steering us 2024 and Beyond As we navigate the uncertainties presented by the economic and geopolitical landscape, we are focused on ensuring that Great Southern is well-positioned to weather any challenges that may arise. We understand that the decisions we make today will shape the future success of our company, and we stand resolute in our commitment to serving the long-term interests of all our stakeholders.  In the coming year, our focus is on deepening our relationships with our customers, providing them with innovative solutions, personalized service, and exceptional experiences. From assisting young families in achieving homeownership dreams to supporting businesses in their growth endeavors, we remain dedicated to being their trusted financial partner every step of the way, helping them achieve their goals and aspirations. Additionally, we are deeply committed to strengthening the bonds with the communities we serve, actively engaging in initiatives that foster growth, resilience, and prosperity. By partnering with local organizations and investing in community development projects, we aim to create lasting positive change and contribute to the well-being of our neighborhoods, ensuring they thrive. We owe a debt of gratitude to our more than 1,100 associates who show up daily, ready to serve our 6 toward continued success. In particular, we are delighted to welcome Amelia "Amy" Counts to our Board. Appointed as a Director in December 2023, Amy brings a wealth of experience as the regional vice president of sales at Wise F&I in St. Louis, Missouri. Amy's track record of surpassing sales growth objectives and orchestrating successful negotiations underscores her exceptional leadership.  Finally, with a steadfast focus on delivering sustainable long-term value for our stockholders, we remain committed to prudent financial management, strategic investments, and operational excellence. We understand the trust you have placed in us as stewards of your capital, and we take this responsibility seriously. Your investment allows us to drive strong performance and deliver superior returns, and for that, we extend our sincerest appreciation. Together, we will continue to navigate the ever-changing banking landscape with resilience and determination, creating value for both our stockholders and our communities. From our associates to our customers, our communities to stockholders, we are grateful for your continued support and trust as we embark on this journey together. We welcome your feedback at any time. William V. Turner Joseph W. Turner At Great Southern, we firmly believe that our associates' dedication to our customers sets us apart in the industry. Their tireless efforts and genuine care shine through in every interaction, reflecting a level of engagement beyond the ordinary. It is this extraordinary capability, combined with an innate desire to make a difference, that defines our corporate culture and propels us forward. Understanding that the caliber of our associates directly impacts our success, we prioritize a culture where every person feels valued, supported, and empowered. This commitment isn't just about doing what's right – it is an investment in our long-term prosperity. By nurturing a talented and engaged workforce, we drive operational excellence and customer satisfaction, which translates into increased stockholder value over the long term. Their dedication, expertise, and commitment to excellence directly impact our operational efficiency, customer satisfaction, and overall financial performance. As we continue to invest in our people and deliver new solutions to our customers, we remain confident in our ability to generate long-term value for all stakeholders. 2023 in Review Going into 2023, the banking industry expected strong headwinds with anticipated ongoing interest rate increases by the Federal Open Market Committee. These continued periodic interest rate increases through July 2023, and three large bank failures in March 2023, drove liquidity concerns leading to mounting deposit pricing pressure and low loan demand. Great Southern, due to significant competition and deposit mix changes, experienced higher deposit costs throughout the year, with the rate of increase tapering off in the fourth quarter. These higher deposit costs and certain expense items (further described in our Annual Report on Form 10-K) played key roles in our earnings of $67.8 million in 2023, down by $8.1 million from 2022. Our net interest margin was 3.57% in 2023 compared to 3.80% for the previous year. For 2023, our return on average assets was 1.19%, and our return on average equity was 12.31%. Importantly, our capital position remained strong and significantly exceeded regulatory well-capitalized thresholds. At the end of 2023, total stockholders' equity was $571.8 million, or 9.8% of total assets, increasing $38.7 million from the end of 2022. Book value increased from $43.58 per common share to $48.44 per common share during 2023. Total dividends of $1.60 per common share were declared during 2023. Additionally, we Throughout 2023, we remained steadfast in our continued to prioritize stock repurchases, commitment to prudent risk management and acquiring approximately 450,000 shares of our strategic loan growth. New loan production and common stock at an average price of $51.38 per general lending activity were down as expected share during the year. These initiatives highlight during the year. Total outstanding loans, our dedication to enhancing shareholder value excluding mortgage loans held for sale, increased while maintaining prudent capital management by $83.8 million, or 1.8%, from $4.51 billion at practices. Amid heightened competition and evolving market dynamics, we remained consistent in our commitment to meeting the diverse banking needs of our customers. Despite the interest rate environment headwinds, we maintained a proactive approach to managing our deposit portfolio, strategically balancing the mix of funding sources to maintain ample liquidity. Our ability to adapt to changing market conditions and effectively deploy funding resources underscores our resilience and agility as a financial institution. As we look to the future, delivering value and stability to our depositors while actively managing the competitive landscape dynamics will continue to be a focus. December 31, 2022, to $4.60 billion at December 31, 2023. Growth primarily came from the multi-family loan and commercial business loan categories, partially offset by a reduction in construction loans and one- to four-family residential loans. Much of the growth from the multi-family loan segment was the movement from unfunded construction line availability to fund construction projects. Credit quality remained exceptional during 2023, with non-performing assets and delinquencies continuing to be maintained at historically low levels. This disciplined approach indicates our commitment to preserving asset quality and ensuring the long-term stability of our loan portfolio, positioning us for sustained growth while effectively managing risk. To our fellow stockholders: As we reflect on the achievements and challenges of the past year, we are honored to share Great Southern Bank's 2023 annual report. The theme of this year's annual report is "Unchanging values for a changing world." Despite the ever-evolving landscape of the banking industry, we remain grounded in our values, which have been the cornerstone of our enduring success. As we continue our journey, our core values will guide everything we do at Great Southern. Doing what's right is more than just a motto; it is a philosophy that underscores our responsibility to be fair and respectful in all interactions. Our dedication to teamwork fosters an environment where collaboration and support are encouraged and celebrated, driving us toward shared objectives and collective success. Mutual respect is the foundation upon which we build relationships, valuing diversity and treating everyone with dignity. And our uncompromising ethical standards ensure that every decision and action we take is grounded in honesty and integrity. These values are not merely words on a page but define who we are as a company and set the standard for how we conduct ourselves in every aspect of our business. customers and support one another, embodying the true spirit of teamwork and commitment. Their resilience and dedication have been the driving force behind our continued success. I am deeply grateful for their contributions—their work matters and goes beyond being merely a job. We help people and institutions finance and achieve their aspirations, lifting individuals, homeowners, and businesses in every community we serve. Our associates' hard work, passion, and commitment propel us forward, even in the face of uncertainty. We have always placed our trust in the people of Great Southern, and we have never been 2024 and Beyond disappointed. As we navigate the uncertainties presented by the economic and geopolitical landscape, we are focused on ensuring that Great Southern is well-positioned to weather any challenges that may arise. We understand that the decisions we make today will shape the future success of our company, and we stand resolute in our commitment to serving the long-term interests of all our stakeholders.  We recognize that our success hinges not only on our talented workforce but also on effective leadership. At the end of 2024, we expect and have planned for the retirement of a key member of our management team, Chief Retail Banking Officer Kris Conley. Kris has been an integral part of our organization since 1998, assuming the role of Director of Retail Banking in 2010. In early 2023, Kris announced his intent to retire in December of 2024, marking the end of nearly three decades In the coming year, our focus is on deepening our of invaluable contributions to our company. Kris's relationships with our customers, providing them unwavering dedication to excellence and keen with innovative solutions, personalized service, insight into retail banking operations have driven and exceptional experiences. From assisting growth and maximized customer satisfaction. young families in achieving homeownership dreams to supporting businesses in their growth endeavors, we remain dedicated to being their trusted financial partner every step of the way, helping them achieve their goals and aspirations. We are pleased to share that Laura Smith, formerly responsible for managing Investments, will succeed Kris Conley as the new chief retail banking officer. Laura first joined Great Southern Bank in 2003, and her extensive experience and Additionally, we are deeply committed to collaborative approach have positioned her as an strengthening the bonds with the communities ideal candidate to lead our banking centers, we serve, actively engaging in initiatives that which serve as the cornerstone of our network. foster growth, resilience, and prosperity. By With Laura's guidance and expertise, we are partnering with local organizations and investing confident in our ability to maintain operational in community development projects, we aim to excellence and deliver unparalleled service to our create lasting positive change and contribute to customers. the well-being of our neighborhoods, ensuring they thrive. We extend our appreciation to our Board of Directors for their indispensable guidance and We owe a debt of gratitude to our more than 1,100 support. Their talents and extensive knowledge associates who show up daily, ready to serve our continue to enrich our company, steering us toward continued success. In particular, we are delighted to welcome Amelia "Amy" Counts to our Board. Appointed as a Director in December 2023, Amy brings a wealth of experience as the regional vice president of sales at Wise F&I in St. Louis, Missouri. Amy's track record of surpassing sales growth objectives and orchestrating successful negotiations underscores her exceptional leadership.  Finally, with a steadfast focus on delivering sustainable long-term value for our stockholders, we remain committed to prudent financial management, strategic investments, and operational excellence. We understand the trust you have placed in us as stewards of your capital, and we take this responsibility seriously. Your investment allows us to drive strong performance and deliver superior returns, and for that, we extend our sincerest appreciation. Together, we will continue to navigate the ever-changing banking landscape with resilience and determination, creating value for both our stockholders and our communities. From our associates to our customers, our communities to stockholders, we are grateful for your continued support and trust as we embark on this journey together. We welcome your feedback at any time. William V. Turner Joseph W. Turner 7 GREAT SOUTHERN BANCORP, INC. DIRECTORS Kevin R. Ausburn Board Member; Chairman and CEO, SMC Packaging Group Julie Turner Brown Board Member; Shareholder, Carnahan Evans, P.C. Debra Mallonee (Shantz) Hart Board Member; Attorney; Owner, Housing Plus, LLC and Sustainable Housing Solutions Douglas M. Pitt Board Member; Owner, Pitt Technology Group, LLC and Pitt Development Group, LLC and Care to Learn Founder Thomas J. Carlson Board Member; President, Mid America Management, Inc. Earl A. Steinert, Jr. Board Member; Co-owner, EAS Investment Enterprises, Inc.; CPA Amelia A. Counts Board Member; Regional Vice President of Sales, Wise F&I Steven D. Edwards Board Member; Retired – CoxHealth William V. Turner Chairman of the Board Great Southern Bancorp, Inc. Joseph W. Turner President and Chief Executive Officer Great Southern Bancorp, Inc. GREAT SOUTHERN LEADERSHIP TEAM Kevin Baker Chief Credit Officer Tammy Baurichter Controller John Bugh Chief Lending Officer Debbie Flowers Director of Credit Risk Administration Jeff Patrick Director of Physical Operations Laura Smith Managing Director of Retail Banking Henry Heimsoth Director of Commercial Lending Kelly Polonus Chief Communications and Marketing Officer Matt Snyder Chief Human Resources Officer Kris Conley Chief Retail Banking Officer Rex Copeland Chief Financial Officer Eric Johnson Chief Information Officer Mark Maples Chief Operations Officer Ryan Storey Director of Loan Operations Bryan Tiede Chief Risk Officer Joseph W. Turner President and Chief Executive Officer IN MEMORIUM Larry D. Frazier It is with great sadness that we announce that Larry D. Frazier, a valued member of the Board of Directors, passed away on November 21, 2023. Great Southern benefited from Mr. Frazier’s knowledge, insight and trusted guidance for more than 40 years.  We are forever grateful for his dedicated service. Mr. Frazier was elected a director of Great Southern Financial Corporation in 1976. In 1992, he was appointed a director of Great Southern Bank and Great Southern Bancorp, Inc. Mr. Frazier’s legacy of integrity and wisdom will always be remembered, leaving a lasting impact on our company. We honor his memory and the profound influence he had on Great Southern. 8 Selected Financial Data The following sets forth selected consolidated financial information and other financial data of the Company. The summary statement of financial condition information and statement of income information are derived from our consolidated financial statements, which have been audited by FORVIS, LLP. See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Item 8. “Financial Statements and Supplementary Information” in the Company’s Annual Report on Form 10-K.  Results for past periods are not necessarily indicative of results that may be expected for any future period. Summary Statement of Financial Condition Information (Dollars in Thousands) December 31, Assets Loans receivable, net Allowance for credit losses on loans Available-for-sale securities Held-to-maturity securities Other real estate and repossessions, net Deposits Total borrowings and other interest-bearing liabilities Stockholders’ equity (retained earnings substantially restricted) Common stockholders’ equity Average loans receivable Average total assets Average deposits Average stockholders’ equity Number of deposit accounts Number of full-service offices 2023 2022 2021 2020 2019 $5,812,402 4,595,469 64,670 478,207 195,023 $5,680,702 4,511,647 63,480 490,592 202,495 $5,449,944 4,016,235 60,754 501,032 — $5,526,420 4,314,584 55,743 414,933 — $5,015,072 4,163,224 40,294 374,175 — 23 4,721,708 233 4,684,910 2,087 4,552,101 1,877 4,516,903 5,525 3,960,106 423,806 366,481 238,713 339,863 412,374 571,829 571,829 4,631,856 5,719,196 4,754,310 550,920 230,697 90 533,087 533,087 4,386,042 5,519,790 4,607,363 565,173 232,688 92 616,752 616,752 4,274,176 5,502,356 4,539,740 627,516 229,942 93 629,741 629,741 4,399,259 5,323,426 4,330,271 622,437 229,470 94 603,066 603,066 4,155,780 4,855,007 3,889,910 571,637 228,247 97 9 Summary Statement of Income Information (in Thousands) Interest income: Loans Investment securities and other Interest expense:  Deposits  Securities sold under reverse repurchase agreements  Short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities   Subordinated debentures issued to capital trust  Subordinated notes  Net interest income  Provision (credit) for credit losses on loans Provision (credit) for unfunded commitments  Net interest income after provision (credit) for credit losses and provision (credit) for unfunded commitments Non-interest income: Commissions  Overdraft and insufficient funds fees  Point-of-sale and ATM fee income and service charges  Net gain on loan sales  Net realized gain (loss) on sales of available-for-sale securities  Late charges and fees on loans  Gain (loss) on derivative interest rate products  Other income  For the Year Ended December 31, 2023 2022 2021 2020 2019 $ 271,952 $ 205,751 $ 186,269 $ 204,964 $ 223,047 24,883 21,226 12,404 12,739   11,947 296,835   226,977 198,673   217,703   234,994 20,676   13,102   32,431   45,570 324   37   31   19 88,757   1,205   7,500   1,736   4,422   103,620 1,066   875   4,422   27,363   193,215   199,614   2,250 (5,329 )  3,000 3,187   —   448   7,165   20,752   177,921   (6,700 ) 939   644   628   6,831   40,565   177,138   15,871 —   3,616 1,019 4,378 54,602 180,392 6,150 —  196,294   193,427   183,682   161,267   174,242 1,153   7,617   14,346   2,354   —   786   (337 )  4,154   30,073 1,208   7,872   15,705   2,584   (130 )  1,182   321   5,399   34,141   1,263   6,686   15,029   9,463   —   1,434   312   4,130   892   6,481   12,203   8,089   78   1,419   (264 )  6,152   889 8,249 12,649 2,607 (62 ) 1,432 (104 ) 5,297 38,317   35,050   30,957 Non-interest expense: Salaries and employee benefits  Net occupancy and equipment expense  Postage  Insurance  Advertising  Office supplies and printing  Telephone  Legal, audit and other professional fees  Expense on other real estate and repossessions  Acquired deposit intangible asset amortization  78,521   30,834   75,300   28,471   70,290   29,163   3,590   4,542   3,396   1,057   2,730   7,086   311   286   3,379   3,197   3,261   867   3,170   6,330   359   768   3,164   3,061   3,072   848   3,458   6,555   627   863   Other operating expenses  8,670   8,264   6,534   70,810   27,582   3,069   2,405   2,631   1,016   3,794   2,378   2,023   1,154   6,363   63,224 26,217 3,198 2,015 2,808 1,077 3,580 2,624 2,184 1,190 7,021 Income before income taxes Provision for income taxes  Net income 141,023 133,366   127,635   123,225   115,138 85,344   17,544   94,202   18,254   94,364   19,737   73,092   13,779   90,061 16,449 $ 67,800 $ 75,948 $ 74,627 $ 59,313 $ 73,61 10                           Performance Data and Ratios (Number of shares in thousands) Per Common Share Data:      Basic earnings per common share     Diluted earnings per common share     Cash dividends declared     Book value per common share     Average shares outstanding     Year-end actual shares outstanding     Average fully diluted shares outstanding Earnings Performance Ratios:     Return on average assets(1)     Return on average stockholders’ equity(2)     Non-interest income to average total assets     Non-interest expense to average total assets     Average interest rate spread(3)     Year-end interest rate spread     Net interest margin(4)     Efficiency ratio(5)     Net overhead ratio(6)     Common dividend pay-out ratio(7) Asset Quality Ratios (8):     Allowance for credit losses/year-end loans     Non-performing assets/year-end loans and foreclosed assets     Allowance for credit losses/non-performing loans     Net charge-offs/average loans     Gross non-performing assets/year end assets     Non-performing loans/year-end loans Balance Sheet Ratios:     Loans to deposits     Average interest-earning assets as a percentage of average         interest-bearing liabilities At or For the Year Ended December 31, 2023 2022 2021 2020 2019 $ 5.65 5.61 1.60   48.44   11,992   11,804   12,080 $ 6.07 6.02 1.56   43.58   12,517   12,231   12,607 $ 5.50 5.46 1.40   46.98   13,558   13,128   13,674 $ 4.22 4.21 2.36   45.79   14,043   13,753   14,104 $ 5.18 5.14 2.07   42.29   14,201   14,261   14,330 1.19 %   12.31 0.53 2.47 2.97 2.78 3.57   63.16 1.94   28.52  1.38 %   13.44 0.62 2.42 3.59 3.63 3.80 57.05 1.80   25.91  1.36 %   11.89 0.70 2.32 3.22 3.20 3.37   59.03 1.62   25.64 1.11 %     9.53   0.66 2.31 3.23 3.08 3.49   58.07 1.66   56.06  1.52 % 12.88 0.64 2.37 3.62 3.28 3.95   54.48 1.73   40.27  1.39 %   0.25   550.48 0.02 0.20 0.25  1.39 %   0.08   1,729.69 0.01 0.07 0.08  1.49 %   0.15   1,120.31 0.00 0.11 0.13  1.32 %     0.09   1,831.86 0.01 0.07 0.07  1.00 % 0.19   891.66 0.10 0.16 0.11 97.33 %   96.30 %    88.23 %    95.52 %    105.13 %   131.11   140.32   139.94   132.49   127.50 Capital Ratios:     Average common stockholders’ equity to average assets     Year-end tangible common stockholders’ equity to tangible assets(9)     Great Southern Bancorp, Inc.:         Tier 1 capital ratio         Total capital ratio         Tier 1 leverage ratio         Common equity Tier 1 ratio     Great Southern Bank:         Tier 1 capital ratio         Total capital ratio         Tier 1 leverage ratio         Common equity Tier 1 ratio  9.6 %   9.7  10.2 %   9.2  11.4 %   11.2  11.7 %   11.3  11.8 % 11.9 12.4 15.2 11.0 11.9 13.1 14.3 11.6 13.1 11.0 13.5 10.6 10.6 11.9 13.1 11.5 11.9 13.4 16.3 11.3 12.9 14.1 15.4 11.9 14.1 12.7 17.2 10.9 12.2 13.7 14.9 11.8 13.7 12.5 15.0 11.8 12.0 13.1 14.0 12.3 13.1 (1) Net income divided by average total assets. (2) Net income divided by average stockholders’ equity. (3) Yield on average interest-earning assets less rate on average (7) Cash dividends per common share divided by earnings per common share. (8) Prior to January 1, 2021, the ratio excluded the FDIC-assisted acquired interest-bearing liabilities. loans. (4) Net interest income divided by average interest-earning assets. (5) Non-interest expense divided by the sum of net interest income plus non-interest income. (6) Non-interest expense less non-interest income divided by (9) Non-GAAP Financial Measure. For additional information, including a reconciliation to GAAP, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures” in the Company’s Annual Report on Form 10-K. average total assets. 11                                                                                                                                                                                                                                                NEW PHOTO TO COME 35 years as a public company Great Southern Bancorp has maintained its status as a publicly traded company since our successful initial public offering in 1989. For over three decades, our shares have been listed on the NASDAQ Global Select Market, allowing investors to participate in our company's growth and success. As a publicly traded entity, we are dedicated to upholding rigorous standards of transparency, accountability, and corporate governance, ensuring the trust and confidence of our shareholders in our operations and financial stewardship. 19,952%* total return since initial public offering For stockholders who invested in a share of Great Southern stock in the 1989 initial public offering, the total return was 19,952% at the end of 2023. One of our guiding principles is to manage Great Southern with a long-term perspective. Our objective is to run our company based on solid banking fundamentals. We adhered to these fundamentals when we went public in 1989 and are just as steadfast today in how we manage our company. This steady, long-term approach has served us well. *Total return of GSBC from December 14, 1989 to December 31, 2023, including price appreciation and the reinvestment of dividends. Source: S&P Global Market Intelligence 2 top bank rankings In the Bank Director’s “RankingBanking” study, which evaluates the top 300 largest publicly traded banks, Great Southern Bancorp secured the sixth spot among the top 25 banks overall and achieved an outstanding third-place ranking within the $5 billion to $50 billion asset category in 2023. These rankings reflect our consistent delivery of exceptional results across key metrics such as return on average equity, return on average assets, capital adequacy, asset quality, and total shareholder return. Additionally, our commitment to excellence has been recognized globally as Great Southern Bank was featured on Forbes’ World’s Best Banks list for the fourth consecutive year. 12  Paying it Forward In commemorating our centennial milestone in 2023, Great Southern Bank embarked on a heartfelt initiative to empower and uplift the communities we proudly serve. Demonstrating our unwavering commitment to nurturing a brighter future for generations to come, we provided each of our offices with $1,000 to donate to a charity of their choice, with a special focus on organizations benefitting children. Nutrition Connection Opportunity Advocacy Self-esteem 100 DAYS of g iving Careers Education Sports Mentors Joy Understanding the Need We entrusted our associates, who know their communities intimately, to select nonprofits that reflect their diverse needs. The impact of 100 Days of Giving was far-reaching, as the receiving nonprofits ranged from organizations providing essential resources and educational opportunities to those breaking down racial barriers and facilitating life-changing experiences. Through this collective effort, we reinforced our dedication to making a meaningful difference in the lives of those we are privileged to serve. The customer The customer Experience Experience We are dedicated to continuously enhancing customer satisfaction through our Customer Experience program, which includes our annual Retail Banking Satisfaction Study in collaboration with industry-leading research firm JD Power. For several years, we've conducted these comprehensive surveys, leveraging JD Power's expertise to gather invaluable insights and refine our services. In our 2023 Retail Banking Satisfaction Study, our net promoter score, a crucial indicator of customer loyalty and satisfaction, was more than double the average for our peer set. Additionally, we surpassed peer set averages across several metrics, including the customization of account offerings to meet customer needs, flexibility in banking options, the expertise of our associates, efficiency in saving time and money, and the level of trust our customers have in us. Our performance underscores our dedication to providing exceptional service and building winning relationships with our customers. Mobile banking improved Our mobile banking app received an upgrade in 2023. This enhanced version brings new features and improvements, including streamlined navigation and enhanced security. Our goal is to provide our customers with a seamless and secure banking experience anytime, anywhere. We're committed to delivering innovative solutions that meet the evolving needs of our customers and reinforce our position as a trusted partner in their financial journey. 14 Express banking launched In September, we proudly welcomed customers to Great Southern Bank Express, a first-of-its-kind facility in Springfield, Mo. This unique facility features four Interactive Teller Machine (ITM) lanes, providing customers with direct access to live tellers. Combining virtual technology with personalized service, our ITM tellers offer extended hours from 7 a.m. to 7 p.m., seven days a week, ensuring greater flexibility for one-on-one assistance. Customers can expect the same level of convenience and support they've come to rely on from our drive-thru lanes. The Express Center represents our commitment to enhancing the banking experience through innovation and accessibility. 2023 Financial Information CONTENTS 16 Management’s Discussion and Analysis of Financial Condition and Results of Operations 52 Quantitative and Qualitative Disclosures About Market Risk 60 Report of Independent Registered Public Accounting Firm 63 Consolidated Statements of Financial Condition 65 Consolidated Statements of Income 67 Consolidated Statements of Comprehensive Income 68 Consolidated Statements of Stockholders’ Equity 70 Consolidated Statements of Cash Flows 72 Notes to Consolidated Financial Statements 15 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-looking Statements When used in this Annual Report and in other documents filed or furnished by Great Southern Bancorp, Inc. (the “Company”) with the Securities and Exchange Commission (the “SEC”), in the Company’s press releases or other public or stockholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases “may,” “might,” “could,” “should,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “believe,” “estimate,” “project,” “intends” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements also include, but are not limited to, statements regarding plans, objectives, expectations or consequences of announced transactions, known trends and statements about future performance, operations, products and services of the Company. The Company’s ability to predict results or the actual effects of future plans or strategies is inherently uncertain, and the Company’s actual results could differ materially from those contained in the forward-looking statements. 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 this report, including, without limitation, those described under “Item 1A. Risk Factors,” subsequent Quarterly Reports on Form 10-Q and other documents filed or furnished from time to time by the Company with the SEC (which are available on our website at www.greatsouthernbank.com and the SEC’s website at www.sec.gov), could affect the Company’s financial performance and cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not undertake-and specifically declines any obligation- to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. 16 Critical Accounting Policies, Judgments and Estimates The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States and general practices within the financial services industry. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates. Allowance for Credit Losses On January 1, 2021, the Company adopted the new accounting standard related to the allowance for credit losses. This standard eliminates the probable initial recognition threshold in GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. See Note 3 to the accompanying financial statements for additional information. The Company believes that the determination of the allowance for credit losses involves a higher degree of judgment and complexity than its other significant accounting policies. The allowance for credit losses is calculated with the objective of maintaining an allowance level believed by management to be sufficient to absorb estimated credit losses. The allowance for credit losses is measured using an average historical loss model that incorporates relevant information about past events (including historical credit loss experience on loans with similar risk characteristics), current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the loans. The allowance for credit losses is measured on a collective (pool) basis. Loans are aggregated into pools based on similar risk characteristics, including borrower type, collateral and repayment types and expected credit loss patterns. Loans that do not share similar risk characteristics, primarily classified loans with a balance greater than or equal to $100,000, are evaluated on an individual basis. For loans evaluated for credit losses on a collective basis, average historical loss rates are calculated for each pool using the Company’s historical net charge-offs (combined charge-offs and recoveries by observable historical reporting period) and outstanding loan balances during a lookback period. Lookback periods can be different based on the individual pool and represent management’s credit expectations for the pool of loans over the remaining contractual life. In certain loan pools, if the Company’s own historical loss rate is not reflective of the loss expectations, the historical loss rate is augmented by industry and peer data. The calculated average net charge-off rate is then adjusted for current conditions and reasonable and supportable forecasts. These adjustments increase or decrease the average historical loss rate to reflect expectations of future losses given economic forecasts of key macroeconomic variables including, but not limited to, unemployment rate, GDP, disposable income and market volatility. The adjustments are based on results from various regression models projecting the impact of the macroeconomic variables to loss rates. The forecast is used for a reasonable and supportable period before reverting to historical averages using a straight-line method. The forecast-adjusted loss rate is applied to the principal balance over the remaining contractual lives, adjusted for expected prepayments. The contractual term excludes expected extensions, renewals and modifications. Additionally, the allowance for credit losses considers other qualitative factors not included in historical loss rates or macroeconomic forecasts such as changes in portfolio composition, underwriting practices, or significant unique events or conditions. See Note 3 “Loans and Allowance for Credit Losses” to the accompanying financial statements for additional information regarding the allowance for credit losses. Inherent in this process is the evaluation of individual significant credit relationships. From time to time, certain credit relationships may deteriorate due to payment performance, cash flow of the borrower, value of collateral, or other factors. In these instances, management may revise its loss estimates and assumptions for these specific credits due to changing circumstances. In some cases, additional losses may be realized; in other instances, the factors that led to the deterioration may improve or the credit may be refinanced elsewhere and allocated allowances may be released from the particular credit. Goodwill and Intangible Assets Goodwill and intangible assets that have indefinite useful lives are subject to an impairment test at least annually and more frequently, if circumstances indicate their value may not be recoverable. Goodwill is tested for impairment using a process that estimates the fair value of each of the Company’s reporting units compared with its carrying value. The Company defines reporting units as a level below each of its operating segments for which there is discrete financial information that is regularly reviewed. As of December 31, 2023, the Company has one reporting unit to which goodwill has been allocated – the Bank. If the fair value of a reporting unit exceeds its carrying value, then no impairment is recorded. If the carrying value amount exceeds the fair value of a reporting unit, further testing is completed comparing the implied fair value of the reporting unit’s goodwill to its carrying value to measure the 17 amount of impairment. Intangible assets that are not amortized will be tested for impairment at least annually by comparing the fair values of those assets to their carrying values. At December 31, 2023, goodwill consisted of $5.4 million at the Bank reporting unit, which included goodwill of $4.2 million that was recorded during 2016 related to the acquisition of 12 branches and related deposits in the St. Louis market. Other identifiable deposit intangible assets that are subject to amortization are amortized on a straight-line basis over a period of seven years. In April 2022, the Company, through its subsidiary Great Southern Bank, entered into a naming rights agreement with Missouri State University related to the main arena on the university’s campus in Springfield, Missouri. 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. At December 31, 2023, the amortizable intangible assets consisted of the arena naming rights of $5.1 million. The amortizable intangible assets are reviewed for impairment if circumstances indicate their value may not be recoverable based on a comparison of fair value. See Note 1 to the accompanying audited financial statements for additional information. Based on the Company’s qualitative goodwill impairment testing, management does not believe any of the Company’s goodwill or other intangible assets were impaired as of December 31, 2023. While management believes no impairment existed at December 31, 2023, different conditions or assumptions used to measure fair value of the reporting unit, or changes in cash flows or profitability, if significantly negative or unfavorable, could have a material adverse effect on the outcome of the Company’s impairment evaluation in the future. Current Economic Conditions Changes in economic conditions could cause the values of assets and liabilities recorded in the Company’s financial statements to change rapidly, resulting in material future adjustments to asset values, the allowance for credit losses, or capital that could negatively affect the Company’s ability to meet regulatory capital requirements and maintain sufficient liquidity. Following the housing and mortgage crisis and correction beginning in mid-2007, the United States entered an economic downturn. Unemployment rose from 4.7% in November 2007 to peak at 10.0% in October 2009. Economic conditions improved in the subsequent years, as indicated by higher consumer confidence levels, increased economic activity and low unemployment levels. The U.S. economy continued to operate at historically strong levels until the COVID-19 pandemic in March 2020, which severely affected tourism, labor markets, business travel, immigration and the global supply chain, among other areas. The economy plunged into recession in the first quarter of 2020, as efforts to contain the spread of the coronavirus forced all but essential business activity, or any work that could not be done from home, to stop, shuttering factories, restaurants, entertainment, sporting events, retail shops, personal services, and more. More than 22 million jobs were lost in March and April 2020 as businesses closed their doors or reduced their operations, sending employees home on furlough or layoffs. With uncertain incomes and limited buying opportunities, consumer spending plummeted. As a result, gross domestic product (GDP), the broadest measure of the nation’s economic output, plunged. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), a fiscal relief bill passed by Congress and signed by the President in March 2020, injected approximately $3 trillion into the economy through direct payments to individuals and loans to small businesses intended to help keep employees on their payroll, fueling a historic bounce-back in economic activity. Total fiscal support to the economy throughout the pandemic, including the CARES Act, the American Rescue Plan of March 2021, and several smaller fiscal packages, totaled well over $5 trillion. The amount of this support was equal to almost 25% of pre-pandemic 2019 GDP and approximately three times the level of support provided during the global financial crisis of 2007-2008. 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 $1.38 trillion in fiscal 2022, and was expected to increase slightly to $1.4 trillion in fiscal 2023. The Federal Reserve aggressively raised the federal funds interest rate from early 2022 through mid-2023, pushing the federal funds rate to more than 5.50%, its highest level in 22 years. The Fed'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 Fed has made some headway in its attempt to force inflation 18 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 2.6% in November 2023, but core PCE, which excludes food and energy prices, has been slower to retreat and still sat at 3.2% at December 2023, well above the Federal Reserve's target of 2.0%. Moody’s is projecting real GDP in 2024 to be slightly higher than previously forecast, but the persistence of high interest rates may slow economic growth. Real GDP is projected to rise 1.9% in 2024 on an annual average basis, an upward revision of 0.2%, and is projected to grow 1.6% in 2025 and 2.1% in 2026. Employment The national unemployment rate remained unchanged for the month at 3.7% as of December 2023, ranging from 3.4% to 3.8% since March 2022. The number of unemployed individuals also remained steady at 6.3 million as of December 2023, with 216,000 jobs added in December 2023. In December 2023, employment in leisure and hospitality and professional changed little, with government, health care, construction and social assistance rising minimally. While the labor market remains strong, there are signs of softening. Wage growth has been moderating and, while layoffs are not rising, departure rates are down to pre-pandemic levels. Employers are cutting back on hours and are hiring fewer temporary workers, an early sign that demand for labor is pulling back. As of December 2023, the labor force participation rate (the share of working-age Americans employed or actively looking for a job) remained stable at 62.5%. The unemployment rate for the Midwest, where the Company conducts most of its business, increased from 3.5% in December 2022 to 3.7% in December 2023. Unemployment rates for December 2023 in the states where the Company has a branch or loan production office were Arizona at 4.3%, Arkansas at 3.4%, Colorado at 3.4%, Georgia at 3.4%, Illinois at 4.8%, Iowa at 3.2%, Kansas at 2.8%, Minnesota at 2.9%, Missouri at 3.3%, Nebraska at 2.3%, North Carolina at 3.5%, Oklahoma at 3.4%, and Texas at 4.0%. Of the metropolitan areas in which the Company does business, most were below the national unemployment rate for December 2023 of 3.7%, except for Chicago at 4.3%. Single Family Housing Existing home sales decreased 1.0% in December 2023 to a seasonally adjusted annual rate of 3.78 million, down 6.2% from the previous year. In the Midwest, existing-home sales retracted 4.3% from November 2023 to an annual rate of 900,000 in December 2023, down 10.9% from one year ago. The median existing-home sales price rose 4.4% from December 2022 to $382,600 in December 2023 – the sixth consecutive month of year-over-year price increases. Among the four major U.S. regions, sales slipped in the Midwest and South, rose in the West and were unchanged in the Northeast. The median price in the Midwest in December 2023 was $275,600, up 5.9% from December 2022. On an annual basis, existing-home sales in 2023 of 4.09 million dropped to the lowest level since 1995, while the median price reached a record high of $389,800 in 2023. Total housing inventory registered at the end of December 2023 was 1.0 million units, down 11.5% from November 2023 and up 4.2% from one year ago of 960,000. Unsold inventory sat at a 3.2 month supply in December 2023, down from 3.5 months in November 2023 but up from 2.9 months in December 2022. Nationally, properties on average remained on the market for 29 days in December 2023, up from 25 days in November 2023 and 26 days in December 2022. Fifty-six percent of homes sold in December 2023 were on the market for less than a month. 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. Sales of new single‐family houses in December 2023 were at a seasonally adjusted annual rate of 664,000, according to the U.S. Census Bureau and the Department of Housing and Urban Development. This is 8.0% above the revised November 2023 rate of 615,000 and 4.4% above the December 2022 rate of 636,000. The median sales price of new houses sold in December 2023 was $413,200, down from $479,500 in December 2022. The average sales price in December 2023 of $487,300 was down from $568,700 in December 2022. The seasonally‐adjusted estimate of new houses for sale at the end of December 2023 was 453,000. This represents a supply of 8.2 months at the current sales rate. 19 First-time buyers accounted for 29% of sales in December 2023, down from 31% in November 2023 and 31% in December 2022. According to Freddie Mac, the average commitment rate for a 30-year, fixed-rate mortgage was 6.60% as of January 18, 2024 which is down from 6.66% the previous week and up from 6.15% one year ago. Multi-Family Housing and Commercial Real Estate Demand has been solid for three consecutive quarters in the multi-family market. Current projections put 2023 new deliveries at a 40- year high of almost 573,000 units, with an additional 443,000 units expected to deliver in 2024. The dramatic rise in Sun Belt development has left the nation with almost one million units under construction, the largest pipeline since the early 1970s. The majority of these units are expected to be delivered at the 4 and 5 Star price points. With supply outpacing demand, the national vacancy rate ended 2023 at 7.6%, which is 100 basis points higher than the pre-pandemic average. The rising interest rate environment, combined with a pullback in construction lending, has seen some developers unable to move forward on proposed projects, suggesting the beginning of a meaningful pause in deliveries towards the end of 2024 and into 2025. Midwest markets have avoided the sharp reversal of rent growth seen in Sun Belt locations as their construction pipelines remained modest during the pandemic. Deliveries in the Midwest in 2023 were only 5,500 units higher than what was delivered in 2019. That limited increase in new supply for the Midwest allowed those markets to be better balanced and avoid the dramatic surge and now pullback in rent growth as experienced in Sun Belt locations. Although factors such as declining household formations, rising supply deliveries, and weakening demand may present temporary obstacles, the long-term issue of a major housing shortage remains in our nation. Thus, rent growth is anticipated to eventually rebound above historical averages. As noted above, as of December 31, 2023, national multi-family market vacancy rates increased to 7.6%. Our market areas reflected the following apartment vacancy levels as of December 2023: Springfield, Missouri at 4.8%, St. Louis at 10.3%, Kansas City at 8.5%, Minneapolis at 7.6%, Tulsa, Oklahoma at 8.3%, Dallas-Fort Worth at 10.4%, Chicago at 5.7%, Atlanta at 11.7%, Phoenix at 10.8%, Denver at 8.3% and Charlotte, North Carolina at 11.6%. The office sector remained weak in 2023 with office vacancy rates continuing their climb to a record 13.6% nationally. Occupiers gave back 65 million of square footage (SF) in 2023, bringing the total to over 180 million since the beginning of 2020. A little over 53 million SF in new office inventory was completed in 2023 with about 15 million SF in obsolete stock being demolished or converted. The resulting 37 million SF in net deliveries was the lowest amount since 2014, though the expected 56 million in 2024 would be the second most over the same period. Thus, with demand still faltering, new supply may exacerbate vacancy rates in the near term. Leasing volume is down nearly 20% from its average in the late 2010s. Office-using employment peaked in May 2023 and has stalled out ever since. Looking ahead, the forecast from Oxford Economics suggests an average growth rate of only 0.4% through 2031, less than half its average since 2000. All these factors are likely contributing to more conservative leasing behavior amid the expiration of leases that were executed at the high rates of the mid- to late 2010s. Should tenants continue adjusting their footprints as expected in the next 24 months, the result would be a further 190 million SF in negative absorption, with vacancy rising to 17.2% by early 2026. As of December 31, 2023, national office vacancy rates increased to 13.6% from 12.7% as of December 31, 2022, while our market areas reflected the following vacancy levels at December 31, 2023: Springfield, Missouri at 4.2%, St. Louis at 10.6%, Kansas City at 12.0%, Minneapolis at 11.2%, Tulsa, Oklahoma at 10.7%, Dallas-Fort Worth at 17.8%, Chicago at 16.6%, Atlanta at 15.7%, Denver at 16.3%, Phoenix at 16.0% and Charlotte, North Carolina at 13.7%. Demand from a diverse array of sectors, coupled with a below-average pace of store closures, and minimal new supply resulted in a resilient year for the U.S. retail sector in 2023. Although a pullback in leasing activity has occurred, a significant slowdown in move-outs has contributed to consistent demand growth across the U.S. retail sector. A near historic low of approximately 52 million SF of new retail space was delivered in 2023, a level that is over 40% lower than the sector's historical average. New construction has primarily focused on build-to-suits, grocery- 20 anchored centers, or smaller retail spaces in large mixed-use projects, which helps explain the above-average leasing rates for new retail properties, as less than 20% of space delivered over the past year was available for lease at the end of 2023. Availabilities are now at record-low levels within small to mid-sized centers and freestanding single-tenant properties. On the other hand, availabilities within the mall segment (which consists of regional and super-regional malls as well as lifestyle centers) have continued to increase since the pandemic. However, there is significant variation in performance across the mall segment, with 4 and 5 Star malls and lifestyle centers seeing fundamentals improve over the past year, while malls rated 3 Star and below continue to see vacancies rise. This difference is likely to persist, as numerous mall-based retailers such as Bath and Body Works, Victoria's Secret, and Macy's have announced plans to move more stores out of the mall and into open-air neighborhood and community centers with stronger foot traffic. Despite longstanding concerns of a softening economy and eventual pullback in consumer spending, retail fundamentals should remain balanced for the near future, as minimal availability and a further pullback in new deliveries offset a minor pullback in demand formation. During the fourth quarter of 2023, national retail vacancy rates remained steady at 4.1% while our market areas reflected the following vacancy levels: Springfield, Missouri at 3.2%, St. Louis at 4.6%, Kansas City at 4.1%, Minneapolis at 2.9%, Tulsa, Oklahoma at 2.8%, Dallas-Fort Worth at 4.5%, Chicago at 4.9%, Atlanta at 3.5%, Phoenix at 4.5%, Denver at 4.0%, and Charlotte, North Carolina at 2.7%. U.S. industrial market performance continues to downshift as 2024 kicks off. Accelerating completions of new industrial developments have caused the U.S. industrial vacancy rate to inch up from a record low of 3.9% in mid-2022, to 5.9% as of fourth quarter 2023. Net absorption has remained positive but continued to lose steam over the past 12 months, with the second half of 2023 registering the lowest third and fourth quarter absorption tallies in 13 years. Overall growth in real consumer goods spending has been re-accelerating since last spring as inflation has subsided and strong wage growth has persisted. If the U.S. economy resilience continues, business inventories will likely soon resume their long-term upward trend as major retailers including Walmart, Target, and Costco have worked through excess merchandise and now have inventory to sales ratios in line with pre-pandemic levels. Sales of warehouse space intensive retail categories like furniture and building materials still remains low. While a potential stagnation in consumer spending poses downside risks in CoStar's absorption forecast for the next 12 months, high- tech manufacturing will likely be a key driver of leasing from 2024–26. The 2022 passage of the CHIPS and Science Act and the Inflation Reduction Act approved over $400 billion worth of incentives for growth in U.S. based high-tech manufacturing. CoStar is tracking more than 30 planned semiconductor, electric vehicle, and battery plants with estimated payrolls of more than 1,000 employees. The majority of these plants are targeting 2024–25 to begin production, with Arizona, Texas, Georgia, and the Carolinas securing the most new operations. New deliveries will likely remain elevated for the next six to nine months, driving the national vacancy rate higher. Higher interest rates have caused construction starts on new industrial projects to halt. Given the average construction time of 14 months for large industrial projects, this recent pullback in starts suggests that by late 2024, the number of new projects completing construction may begin to decline. This may set the stage for vacancies to stabilize or begin tightening again in late 2024, and for rent growth to accelerate thereafter. For the fourth quarter of 2023, national industrial vacancy rates increased to 5.9% from 4.2% as of December 31, 2022. Our market areas reflected the following industrial vacancy levels at December 31, 2023: Springfield, Missouri at 1.8%, St. Louis at 4.7%, Kansas City at 5.2%, Minneapolis at 3.9%, Tulsa, Oklahoma at 2.9%, Dallas-Fort Worth at 8.9%, Chicago at 5.1%, Atlanta at 6.4%, Phoenix at 8.6%, Denver at 7.1% and Charlotte, North Carolina at 6.7%. Our management will continue to monitor regional, national, and global economic indicators such as unemployment, GDP, housing starts and prices, consumer sentiment, commercial real estate price index and commercial real estate occupancy, absorption and rental rates, as these could significantly affect customers in each of our market area. 21 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.” General The profitability of the Company and, more specifically, the profitability of its primary subsidiary, the Bank, depend primarily on its net interest income, as well as provisions for credit losses and the level of non-interest income and non-interest expense. Net interest income is the difference between the interest income the Bank earns on its loans and investment portfolios, and the interest it pays on interest-bearing liabilities, which consists mainly of interest paid on deposits and borrowings. Net interest income is affected by the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on these balances. When interest-earning assets approximate or exceed interest-bearing liabilities, any positive interest rate spread will generate net interest income. The Company’s total assets increased $131.7 million, or 2.3%, from $5.68 billion at December 31, 2022, to $5.81 billion at December 31, 2023. Full details of the current year changes in total assets are provided below, under “Comparison of Financial Condition at December 31, 2023 and December 31, 2022.” Loans. In the year ended December 31, 2023, the Company’s net loans increased $82.8 million, or 1.8%, from $4.51 billion at December 31, 2022, to $4.59 billion at December 31, 2023. This increase was primarily in other residential (multi-family) loans ($160 million increase) and commercial business loans ($25 million increase). These increases were partially offset by decreases in construction loans ($61 million decrease) and one- to four- family residential loans ($13 million decrease). The pipeline of loan commitments and the unfunded portion of construction loans remained strong at the end of 2023, but decreased significantly compared to the end of 2022. As construction projects were completed, the related loans were either paid off or moved from the construction category to the appropriate permanent loan categories. As loan demand is affected by a variety of factors, including general economic conditions, and because of the competition we face and our focus on pricing discipline and credit quality, we cannot be assured 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. Recent growth has occurred in some loan types, primarily other residential (multi-family) and commercial business, and in most of Great Southern’s primary lending locations, including Springfield, St. Louis, Kansas City, Des Moines and Minneapolis, as well as our loan production offices in Atlanta, Charlotte, Chicago, Dallas, Denver, Omaha, Phoenix and Tulsa. Certain minimum underwriting standards and monitoring help assure the Company’s portfolio quality. Great Southern’s loan committee reviews and approves all new loan originations in excess of lender approval authorities. 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 and used motor vehicles and these loans are also subject to certain minimum underwriting standards to assure portfolio quality. In 2019, the Company discontinued indirect auto loan originations. Of the total loan portfolio at December 31, 2023 and 2022, 89.5% and 89.4%, respectively, was secured by real estate, as this is the Bank’s primary focus in its lending efforts. At December 31, 2023 and 2022, commercial real estate and commercial construction loans (excluding multi-family loans) were 36.8% and 39.4% of the Bank’s total loan portfolio, respectively. Commercial real estate and commercial construction loans generally afford the Bank an opportunity to increase the yield on, and the proportion of interest 22 rate sensitive loans in, its portfolio. They do, however, present somewhat greater risk to the Bank because they may be more adversely affected by conditions in the real estate markets or in the economy generally. At December 31, 2023, loans made in the Springfield, Missouri metropolitan statistical area (Springfield MSA) comprised 8% of the Bank’s total loan portfolio, compared to 7% at December 31, 2022. The Company’s headquarters are located in Springfield and we have operated in this market since 1923. Loans made in the St. Louis metropolitan statistical area (St. Louis MSA) comprised 17% of the Bank’s total loan portfolio at December 31, 2023, compared to 18% at December 31, 2022. The Company’s expansion into the St. Louis MSA beginning in May 2009 has provided an opportunity to not only diversify from the Springfield MSA, but also has provided access to a larger economy with increased lending opportunities despite higher levels of competition. Loans made in the St. Louis MSA are primarily commercial real estate, commercial business and other residential (multi-family) loans, which are less likely to be impacted by the higher levels of unemployment rates, as mentioned above under “Current Economic Conditions,” than if the focus were on one- to four-family residential and consumer loans. For further discussions of the Bank’s loan portfolio, and specifically, commercial real estate and commercial construction loans, see “Item 1. Business – Lending Activities.” The percentage of fixed-rate loans in our loan portfolio has been as much as 40% in recent years and was 39% as of December 31, 2023. The majority of the increase in fixed rate loans over the past few years was in commercial real estate, which typically has short durations within our portfolio. Of the total amount of fixed rate loans in our portfolio as of December 31, 2023, approximately 86% mature within the next five years and therefore are not considered to create significant long-term interest rate risk for the Company. Fixed rate loans make up only a portion of our balance sheet and our overall interest rate risk strategy. As of December 31, 2023, our interest rate risk models indicated a one-year interest rate earnings sensitivity position that is modestly positive in an increasing rate environment. For further discussion of our interest rate sensitivity gap and the processes used to manage our exposure to interest rate risk, see “Quantitative and Qualitative Disclosures About Market Risk – How We Measure the Risks to Us Associated with Interest Rate Changes.” For discussion of the risk factors associated with interest rate changes, see “Risk Factors – We may be adversely affected by interest rate changes.” While our policy allows us to lend up to 95% of the appraised value on one-to four-family residential properties, originations of loans with loan-to-value ratios at that level are minimal. Private mortgage insurance is typically required for loan amounts above the 80% level. Few exceptions occur and would be based on analyses which determined minimal transactional risk to be involved. We consider these lending practices to be consistent with or more conservative than what we believe to be the norm for banks our size. At December 31, 2023 and 2022, 0.2% of our owner occupied one- to four-family residential loans had loan-to-value ratios above 100% at origination. At December 31, 2023 and 2022, an estimated 0.4% and 0.2%, respectively, of total non-owner occupied one- to four- family residential loans had loan-to-value ratios above 100% at origination. The level of non-performing loans and foreclosed assets affects our net interest income and net income. We generally do not accrue interest income on these loans and do not recognize interest income until the loans are repaid or interest payments have been made for a period of time sufficient to provide evidence of performance on the loans. Generally, the higher the level of non-performing assets, the greater the negative impact on interest income and net income. The Company prepared for discontinuation of the use of interest rates such as LIBOR. LIBOR is a benchmark interest rate referenced in a variety of agreements used by the Company, but by far the most significant area impacted by LIBOR is related to commercial and residential mortgage loans. With the cessation of all remaining LIBOR indices as of June 30, 2023, the Company implemented its LIBOR fallback plan for all remaining LIBOR-based loans, replacing the LIBOR indices with various SOFR-based indices consistent with the regulations of the Board of Governors of the Federal Reserve System implementing the Adjustable Interest Rate (LIBOR) Act. All impacted customers were notified and the Company’s systems were updated with the applicable indices as of July 1, 2023. Available-for-sale Securities. Available-for-sale securities decreased $12.4 million, or 2.5%, from $490.6 million at December 31, 2022, to $478.2 million at December 31, 2023. For further information on investment securities, see Note 2 to the accompanying audited financial statements contained in this Report. Held-to-maturity Securities. Held-to-maturity securities decreased $7.5 million, or 3.7%, from $202.5 million at December 31, 2022, to $195.0 million at December 31, 2023. Deposits. The Company attracts deposit accounts through its retail branch network, correspondent banking and corporate services areas, internet channels and brokered deposits. The Company then utilizes these deposit funds, along with FHLBank advances and other borrowings, to meet loan demand or otherwise fund its activities. In the year ended December 31, 2023, total deposit balances 23 increased $36.8 million, or 0.8%. Transaction account balances decreased $140.1 million and retail certificates of deposit decreased $73.1 million compared to December 31, 2022. The decrease in transaction accounts was primarily a result of decreased balances in non-interest accounts and certain NOW account types. In addition, holders of some accounts that carried higher balances may have chosen to move funds into different checking account types or time deposits that now have a higher rate of interest. Retail certificates of deposit decreased due to a decrease in retail certificates generated through the banking center network and time deposits initiated through internet channels, which experienced a planned decrease as part of the Company’s balance sheet management between funding sources. Brokered deposits, including IntraFi program purchased funds, were $661.5 million at December 31, 2023, an increase of $250.0 million from $411.5 million at December 31, 2022. The Company uses brokered deposits of select maturities and interest rate characteristics from time to time to supplement its various funding channels and to manage interest rate risk. Our deposit balances may fluctuate depending on customer preferences and our relative need for funding. We do not consider our retail certificates of deposit to be guaranteed long-term funding because customers can withdraw their funds at any time with minimal interest penalty. When loan demand trends upward, we can increase rates paid on deposits to attract more deposits and utilize brokered deposits to provide additional funding. The level of competition for deposits in our markets is high. It is our goal to gain deposit market share, particularly checking accounts, in our branch footprint. To accomplish this goal, increasing rates to attract deposits may be necessary, which could negatively impact the Company’s net interest margin. 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. Securities sold under reverse repurchase agreements with customers. Securities sold under reverse repurchase agreements with customers decreased $106.0 million from $176.8 million at December 31, 2022 to $70.8 million at December 31, 2023. These balances fluctuate over time based on customer demand for this product. Short-Term Borrowings and Other Interest-bearing Liabilities. The Company’s FHLBank term advances were $-0- at both December 31, 2023 and December 31, 2022. At December 31, 2023 and 2022, overnight borrowings from the FHLBank were $251.0 million and $88.5 million, respectively, which are included in short-term borrowings. Short-term borrowings and other interest-bearing liabilities increased $163.0 million from $89.6 million at December 31, 2022 to $252.6 million at December 31, 2023. The Company may utilize overnight borrowings, short-term FHLBank advances, and BTFP borrowings from FRBSTL depending on relative interest rates. Net Interest Income and Interest Rate Risk Management. Our net interest income may be affected positively or negatively by changes in market interest rates. A large portion of our loan portfolio is tied to one-month SOFR, three-month SOFR or the “prime rate” and adjusts immediately or shortly after the index rate adjusts (subject to the effect of contractual interest rate floors on some of the loans, which are discussed below). We monitor our sensitivity to interest rate changes on an ongoing basis (see “Quantitative and Qualitative Disclosures About Market Risk”). 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 change increases of 0.25% on eight additional occasions beginning December 14, 2016 and through December 31, 2018, with the Federal Funds rate reaching as high as 2.50%. After December 2018, the FRB paused its rate increases and, in July, September and October 2019, implemented rate decreases of 0.25% on each of those occasions. At December 31, 2019, the Federal Funds rate stood at 1.75%. In response to the COVID-19 pandemic, the FRB decreased interest rates on two occasions in March 2020, a 0.50% decrease on March 3 and a 1.00% decrease on March 16. At December 31, 2021, the Federal Funds rate was 0.25%. In 2022, the FRB implemented rate increases of 0.25%, 0.50%, 0.75%, 0.75%, 0.75%, 0.75% and 0.50% in March, May, June, July, September, November and December 2022, respectively. At December 31, 2022, the Federal Funds rate was 4.50%. In 2023, the FRB implemented rate increases of 0.25%, 0.25%, 0.25% and 0.25% in February, March, May and July 2023, respectively. At December 31, 2023 the Federal Funds rate was 5.50%. Financial markets now expect the possibility of 24 significant further increases in Federal Funds interest rates in early 2024 to be unlikely, with interest rate decisions being made at each FRB meeting based on economic data available at the time. However, the FRB has further indicated, and financial markets now have begun to price in, that it is likely that the Federal Funds interest rate will remain near this peak level for several months before any rate cuts occur. Great Southern’s loan portfolio includes loans ($1.29 billion at December 31, 2023) tied to various SOFR indices that will be subject to adjustment at least once within 90 days after December 31, 2023. All of these loans have interest rate floors at various rates. Great Southern also has a portfolio of loans ($788.9 million at December 31, 2023) tied to a “prime rate” of interest that will adjust immediately or within 90 days of a change to the “prime rate” of interest. All of these loans had interest rate floors at various rates. Great Southern also has a portfolio of loans ($6.7 million at December 31, 2023) tied to an AMERIBOR index that will adjust immediately or within 90 days of a change to the “prime rate” of interest. All of these loans had interest rate floors at various rates. At December 31, 2023, nearly all of these SOFR and “prime rate” loans had fully indexed rates that were at or above their floor rate and so are expected to move fully with future market interest rate increases. A rate cut by the FRB generally would have an anticipated immediate negative impact on the Company’s net interest income due to the large total balance of loans tied to the SOFR indices or the “prime rate” index and will be subject to adjustment at least once within 90 days or loans which generally adjust immediately as the Federal Funds rate adjusts. 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, 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. As of December 31, 2023, Great Southern’s interest rate risk models indicate that, generally, rising interest rates are expected to have a modestly positive impact on the Company’s net interest income, while declining interest rates are expected to have a modestly negative impact on net interest income. We model various interest rate scenarios for rising and falling rates, including both parallel and non-parallel shifts in rates. The results of our modeling indicate that net interest income is not likely to be significantly affected either positively or negatively in the first twelve months following relatively minor changes in market interest rates because our portfolios are relatively well-matched in a twelve-month horizon. In a situation where market interest rates increase significantly in a short period of time, our net interest margin increase may be more pronounced in the very near term (first one to three months), due to fairly rapid increases in SOFR interest rates and “prime” interest rates. In a situation where market interest rates decrease significantly in a short period of time, as they did in March 2020, our net interest margin decrease may be more pronounced in the very near term (first one to three months), due to fairly rapid decreases in SOFR interest rates and “prime” interest rates. In the subsequent months, we would expect that net interest margin would stabilize and begin to improve, as renewal interest rates on maturing time deposits decrease. During 2020, we experienced some compression of our net interest margin percentage 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. 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 “Quantitative and Qualitative Disclosures About Market Risk – How We Measure the Risks to Us Associated with Interest Rate Changes.” Non-Interest Income and Operating Expenses. The Company’s profitability is also affected by the level of its non-interest income and operating expenses. Non-interest income consists primarily of service charges and ATM fees, POS interchange fees, late charges and prepayment fees on loans, gains on sales of loans and available-for-sale investments and other general operating income. 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 25 general operating expenses. Details of the current period changes in non-interest income and non-interest expense are provided under “Results of Operations and Comparison for the Years Ended December 31, 2023 and 2022.” Business Initiatives The Company’s banking centers and loan production offices are consistently reviewed to measure performance and ensure responsiveness to changing customer needs and preferences. As such, the Company may open banking centers and loan production offices and invest resources where customer demand leads, and from time to time, consolidate offices or even exit markets when conditions dictate. The following changes were initiated in 2023 and early 2024:     In March 2023, a leased retail banking center office at 1232 S. Rangeline Road in Joplin, Missouri, was consolidated into a nearby office at 2801 E. 32nd Street. One banking center now serves the Joplin market. In September 2023, in Springfield, Missouri, the Company opened Great Southern Express, a modern four-lane drive-through center using only interactive teller machine (ITM) technology to serve customers. This new facility at 1615 W. Sunshine replaced a small banking center on the same property. ITMs, also known as video remote tellers, offer an ATM-like interface, but with the enhancement of a video screen that allows customers to speak directly to a service representative in real time and in a highly personal manner during extended business hours seven days a week. Nearly any teller transaction that can be performed in the traditional drive-thru can be performed at an ITM, including cashing a check to the penny. ITMs provide convenience and enhanced access for customers, while creating greater operational efficiencies for the Bank. In January 2024, in Springfield, Missouri, a retail banking center at 600 W. Republic Road was consolidated into another banking center at 2945 W. Republic Road, a short distance away. For customers’ convenience, an on-site ITM is currently available at the closed facility. Effective February 16, 2024, the Company closed its loan production office in Tulsa, Oklahoma after an analysis of lending priorities and operational efficiencies. Loan clients served through this office have been reassigned to other relationship managers. In November 2023, the Company launched a new and improved digital mobile banking application for its customers, available through the Apple App Store and Google Play Store. With more than 54,000 active mobile banking users, the application upgrade provides an improvement in overall functionality, including a better user experience, additional layers of security and faster loading times. Since early 2022, Great Southern has 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, has been delayed to mid-2024. As also previously disclosed, certain contractual disputes have arisen between Great Southern and the third-party vendor. While discussions are ongoing between the parties, to date, there has been no meaningful progress in resolving the contractual disputes. There is no assurance that a resolution with the vendor will be achieved, or that a migration to the New System can be successfully completed, which may prompt Great Southern to take action to protect its interests. In the meantime, Great Southern expects to continue operations with its current core banking provider, which will allow Great Southern to offer its full array of products and services. Effect of Federal Laws and Regulations General. Federal legislation and regulation significantly affect the operations of the Company and the Bank, and have increased competition among commercial banks, savings institutions, mortgage banking enterprises and other financial institutions. In particular, the capital requirements and operations of regulated banking organizations such as the Company and the Bank have been and will be subject to changes in applicable statutes and regulations from time to time, which changes could, under certain circumstances, adversely affect the Company or the Bank. 26 Dodd-Frank Act. In 2010, sweeping financial regulatory reform legislation entitled the “Dodd-Frank Wall Street Reform and Consumer Protection Act” (the “Dodd-Frank Act”) was signed into law. The Dodd-Frank Act implemented far-reaching changes across the financial regulatory landscape. Certain aspects of the Dodd-Frank Act have been affected by the more recently enacted Economic Growth Act, as defined and discussed below under “-Economic Growth Act.” Capital Rules. The federal banking agencies have adopted regulatory capital rules that substantially amend the risk-based capital rules applicable to the Bank and the Company. The rules implement the “Basel III” regulatory capital reforms and changes required by the Dodd-Frank Act. “Basel III” refers to various documents released by the Basel Committee on Banking Supervision. For the Company and the Bank, the general effective date of the rules was January 1, 2015, and, for certain provisions, various phase-in periods and later effective dates apply. The chief features of these rules are summarized below. The rules refine the definitions of what constitutes regulatory capital and add a new regulatory capital element, common equity Tier 1 capital. The minimum capital ratios are (i) a common equity Tier 1 (“CET1”) risk-based capital ratio of 4.5%; (ii) a Tier 1 risk-based capital ratio of 6%; (iii) a total risk-based capital ratio of 8%; and (iv) a Tier 1 leverage ratio of 4%. In addition to the minimum capital ratios, the rules include a capital conservation buffer, under which a banking organization must have CET1 more than 2.5% above each of its minimum risk-based capital ratios in order to avoid restrictions on paying dividends, repurchasing shares, and paying certain discretionary bonuses. The capital conservation buffer became fully implemented on January 1, 2019. These rules also revised the prompt corrective action framework, which is designed to place restrictions on insured depository institutions if their capital levels show signs of weakness. Under the revised prompt corrective action requirements, insured depository institutions are required to meet the following in order to qualify as “well capitalized:” (i) a common equity Tier 1 risk-based capital ratio of at least 6.5%, (ii) a Tier 1 risk-based capital ratio of at least 8%, (iii) a total risk-based capital ratio of at least 10% and (iv) a Tier 1 leverage ratio of 5%, and must not be subject to an order, agreement or directive mandating a specific capital level. Economic Growth Act. In May 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Economic Growth Act”), was enacted to modify or eliminate certain financial reform rules and regulations, including some implemented under the Dodd- Frank Act. While the Economic Growth Act maintains most of the regulatory structure established by the Dodd-Frank Act, it amends certain aspects of the regulatory framework for small depository institutions with assets of less than $10 billion and for large banks with assets of more than $50 billion. Many of these amendments could result in meaningful regulatory changes. The Economic Growth Act, among other matters, expands the definition of qualified mortgages which may be held by a financial institution and simplifies the regulatory capital rules for financial institutions and their holding companies with total consolidated assets of less than $10 billion by instructing the federal banking regulators to establish a single “Community Bank Leverage Ratio” (“CBLR”) of between 8 and 10 percent. Upon election, any qualifying depository institution or its holding company that exceeds the CBLR will be considered to have met generally applicable leverage and risk-based regulatory capital requirements and any qualifying depository institution that exceeds the new ratio will be considered “well-capitalized” under the prompt corrective action rules. Currently, the CBLR is 9.0%. The Company and the Bank have chosen to not utilize the new CBLR due to the Company’s size and complexity, including its commercial real estate and construction lending concentrations and significant off-balance sheet funding commitments. In addition, the Economic Growth Act includes regulatory relief in the areas of examination cycles, call reports, mortgage disclosures and risk weights for certain high-risk commercial real estate loans. Recent Accounting Pronouncements See Note 1 to the accompanying audited financial statements for a description of recent accounting pronouncements including the respective dates of adoption and expected effects on the Company’s financial position and results of operations. Comparison of Financial Condition at December 31, 2023 and December 31, 2022 During the year ended December 31, 2023, total assets increased by $131.7 million, or 2.3%, to $5.81 billion. The increase was primarily attributable to increases in loans receivable and cash and cash equivalents, partially offset by decreases in investment securities. 27 Cash and cash equivalents were $211.3 million at December 31, 2023, an increase of $42.8 million, or 25.4%, from $168.5 million at December 31, 2022. This increase was primarily due to a $43.5 million increase in interest-bearing deposits in the FRBSTL. The Company’s available-for-sale securities decreased $12.4 million, or 2.5%, compared to December 31, 2022. The decrease was primarily due to normal monthly payments received related to the portfolio of mortgage-backed securities and collateralized mortgage obligations. The available-for-sale securities portfolio was 8.2% and 8.6% of total assets at December 31, 2023 and December 31, 2022, respectively. The Company’s held-to-maturity securities decreased $7.5 million, or 3.7%, compared to December 31, 2022. The decrease was primarily due to normal monthly payments received related to the portfolio of mortgage-backed securities and collateralized mortgage obligations. The held-to-maturity securities portfolio was 3.4% and 3.6% of total assets at December 31, 2023 and December 31, 2022, respectively. Net loans increased $82.8 million, or 1.8%, from December 31, 2022, to $4.59 billion at December 31, 2023. This increase was primarily in other residential (multi-family) loans ($160 million increase) and commercial business loans ($25 million increase). These increases were partially offset by decreases in construction loans ($61 million decrease) and one- to four- family residential loans ($13 million decrease). The pipeline of loan commitments and the unfunded portion of construction loans remained strong in the fourth quarter of 2023, but decreased significantly compared to the end of 2022. As construction projects were completed, the related loans were either paid off or moved from the construction category to the appropriate permanent loan categories. Total liabilities increased $93.0 million from $5.15 billion at December 31, 2022 to $5.24 billion at December 31, 2023. The increase was primarily due to increases in short-term borrowings from FHLBank and increases in brokered deposits, partially offset by the decrease in reverse repurchase agreements with customers. Total deposits increased $36.8 million, or 0.8%, from $4.68 billion at December 31, 2022 to $4.72 billion at December 31, 2023. Transaction account balances decreased $140.1 million, from $3.25 billion at December 31, 2022 to $3.11 billion at December 31, 2023. Retail certificates of deposit decreased $73.1 million compared to December 31, 2022, to $948.2 million at December 31, 2023. Decreases in transaction account balances were primarily in certain NOW account types and non-interest-bearing checking accounts. Total interest-bearing checking increased $27.9 million and non-interest-bearing demand deposit accounts decreased $168.1 million, respectively. Customer retail time deposits initiated through our banking center network decreased $34.6 million and time deposits initiated through our national internet network decreased $34.9 million. Customer deposits at December 31, 2023 and December 31, 2022 totaling $8.8 million and $12.4 million, respectively, were part of the IntraFi Network Deposits program, which allows customers to maintain balances in an insured manner that would otherwise exceed the FDIC deposit insurance limit. Brokered deposits increased $250.0 million to $661.5 million at December 31, 2023, compared to $411.5 million at December 31, 2022. Brokered deposits were utilized to fund growth in outstanding loans and to offset reductions in balances in other deposit categories. The Company has the capacity to further expand its use of brokered deposits if it chooses to do so. Of the total brokered deposits at December 31, 2023, $300.0 million were floating rate deposits which adjust daily based on the effective federal funds rate index. The Company’s term Federal Home Loan Bank advances were $-0- at both December 31, 2023 and 2022. At December 31, 2023 and 2022, there were no borrowings from the FHLBank, other than overnight borrowings, which are included in the short-term borrowings category. The Company maintains the flexibility to utilize both overnight borrowings and short-term FHLBank advances depending on relative interest rates. Short-term borrowings and other interest-bearing liabilities increased $163.0 million, or 182.0%, from $89.6 million at December 31, 2022 to $252.6 million at December 31, 2023. The short-term borrowings included overnight FHLBank borrowings of $251.0 million at December 31, 2023, compared to $88.5 million at December 31, 2022. In January 2024, the Bank borrowed $180.0 million under the Federal Reserve Bank’s Bank Term Funding Program (BTFP). The borrowing, which matures in January 2025 and has a fixed interest rate of 4.83%, may be repaid in full or in part without penalty prior to its stated maturity date. The line is secured primarily by the Bank’s held-to-maturity investment securities, with total amount of assets pledged totaling approximately $191 million. These funds were primarily used to repay a portion of the Bank’s overnight borrowings from the FHLBank. Securities sold under reverse repurchase agreements with customers decreased $106.0 million, or 59.9%, from $176.8 million at December 31, 2022 to $70.8 million at December 31, 2023. These balances fluctuate over time based on customer demand for this product. 28 Total stockholders’ equity increased $38.7 million, or 7.3%, from $533.1 million at December 31, 2022 to $571.8 million at December 31, 2023. The Company recorded net income of $67.8 million for the year ended December 31, 2023. In addition, total stockholders’ equity increased $2.5 million due to the issuance of the Company’s common stock upon stock option exercises. Accumulated other comprehensive income increased $10.9 million due to increases in the fair value of investment securities and the fair value of cash flow hedges, as a result of decreased market interest rate expectations. Total stockholders’ equity decreased $23.3 million due to repurchases of the Company’s common stock. Dividends declared on common stock, which also decreased total stockholders’ equity, were $19.1 million. Results of Operations and Comparison for the Years Ended December 31, 2023 and 2022 General Net income decreased $8.1 million, or 10.7%, during the year ended December 31, 2023, compared to the year ended December 31, 2022. Net income was $67.8 million for the year ended December 31, 2023 compared to $75.9 million for the year ended December 31, 2022. This decrease was primarily due to an increase in non-interest expense of $7.7 million, or 5.7%, a decrease in net interest income of $6.4 million, or 3.2%, and a decrease in non-interest income of $4.1 million, or 11.9%, partially offset by a decrease in provision for credit losses on loans and unfunded commitments of $9.3 million, and a decrease in provision for income taxes of $710,000, or 3.9%. Total Interest Income Total interest income increased $69.9 million, or 30.8%, during the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was due to a $66.2 million increase in interest income on loans and a $3.7 million increase in interest income on investment securities and other interest-earning assets. Interest income on loans increased for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to higher average rates of interest on loans and higher average loan balances. Interest income from investment securities and other interest-earning assets increased during the year ended December 31, 2023 compared to the year ended December 31, 2022, due to higher average balances of investment securities combined with higher average rates of interest on investment securities and other interest-earning assets, partially offset by a decrease in the average balance on other interest-earning assets. Interest Income – Loans During the year ended December 31, 2023 compared to the year ended December 31, 2022, interest income on loans increased $54.1 million as the result of higher average interest rates on loans. The average yield on loans increased from 4.69% during the year ended December 31, 2022 to 5.87% during the year ended December 31, 2023. This increase was primarily due to the repricing of floating rate loans in 2023 as market interest rates increased significantly and the origination of new fixed-rate loans at higher market interest rates. In addition, interest income on loans increased $12.1 million as a result of higher average loan balances, which increased from $4.39 billion during the year ended December 31, 2022, to $4.63 billion during the year ended December 31, 2023. The Company continued to originate loans at a pace similar to prior periods through the end of 2022, and overall loan repayments slowed in 2022 and 2023 compared to the level of repayments in 2021. Since the end of 2022, loan originations and net loan growth have been muted; however, some loan growth has come as a result of the funding of previously approved but unfunded balances on construction loans and the slowed loan repayments in 2023. In October 2018, the Company entered into an interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap was $400 million with a contractual termination date in October 2025. As previously disclosed by the Company, on March 2, 2020, the Company and its swap counterparty mutually agreed to terminate this swap, effective immediately. The Company was paid $45.9 million, including accrued but unpaid interest, from its swap counterparty as a result of this termination. This $45.9 million, less the accrued to date interest portion and net of deferred income taxes, is reflected in the Company’s stockholders’ equity as Accumulated Other Comprehensive Income and is being accreted to interest income on loans monthly through the original contractual termination date of October 6, 2025. This has had the effect of reducing Accumulated Other Comprehensive Income and increasing Net Interest Income and Retained Earnings over the periods. The Company recorded interest income related to the interest rate swap of $8.1 million in each of the years ended December 31, 2023 and December 31, 2022. At December 31, 2023, the Company expected to have a sufficient amount of eligible variable rate loans to 29 continue to accrete this interest income ratably in future periods. If this expectation changes and the amount of eligible variable rate loans decreases significantly, the Company may be required to recognize this interest income more rapidly. In March 2022, the Company entered into another interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap is $300 million with a contractual termination date of March 1, 2024. Under the terms of the swap, the Company received a fixed rate of interest of 1.6725% and paid a floating rate of interest equal to one-month USD-LIBOR (now the equivalent replacement USD-SOFR rate since USD-LIBOR rate is no longer available). The floating rate reset monthly and net settlements of interest due to/from the counterparty also occurred monthly. To the extent that the fixed rate exceeded one-month USD-SOFR, the Company received net interest settlements, which were recorded as loan interest income. If one-month USD-SOFR exceeded the fixed rate of interest, the Company paid net settlements to the counterparty and recorded those net payments as a reduction of interest income on loans. The Company recorded a reduction of loan interest income related to this swap transaction of $10.4 million in the year ended December 31, 2023, compared to a reduction of loan interest income related to this swap transaction of $941,000 in the year ended December 31, 2022. Based on market rates of interest in January 2024, the Company expects to record a reduction of loan interest income related to this swap of $1.9 million in the three months ending March 31, 2024, prior to the contractual termination date of March 1, 2024. In July 2022, the Company entered into two additional interest rate swap transactions as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of each swap is $200 million with an effective date of May 1, 2023 and a termination date of May 1, 2028. Under the terms of one swap, the Company receives a fixed rate of interest of 2.628% and pays a floating rate of interest equal to one-month USD-SOFR OIS. Under the terms of the other swap, the Company receives a fixed rate of interest of 5.725% and pays a floating rate of interest equal to one-month USD-Prime. In each case, the floating rate resets monthly and net settlements of interest due to/from the counterparty also occur monthly. To the extent the fixed rate of interest exceeds the floating rate of interest, the Company receives net interest settlements, which are recorded as loan interest income. If the floating rate of interest exceeds the fixed rate of interest, the Company pays net settlements to the counterparty and records those net payments as a reduction of interest income on loans. The Company recorded a reduction of loan interest income related to these swap transactions of $7.2 million in the year ended December 31, 2023. At December 31, 2023, the USD-Prime rate was 8.50% and the one-month USD-SOFR OIS rate was 5.34446%. If market interest rates remain near their current levels, the Company’s interest rate swaps will continue to have a negative impact on net interest income. Interest Income – Investments and Other Interest-earning Assets Interest income on investments increased $772,000 in the year ended December 31, 2023 compared to the year ended December 31, 2022. Interest income increased $488,000 due to an increase in average interest rates from 2.84% during the year ended December 31, 2022 to 2.91% during the year ended December 31, 2023. At December 31, 2023, the investment portfolio did not include a material amount of adjustable rate securities. Interest income increased $284,000 as a result of an increase in average balances from $675.6 million during the year ended December 31, 2022, to $685.5 million during the year ended December 31, 2023. Average balances of securities increased primarily due to purchases of agency multi-family mortgage-backed securities that have a fixed rate of interest with expected lives of four to ten years, which fits with the Company’s current asset/liability management strategies, partially offset by normal monthly payments received related to the portfolio of U.S. Government agency mortgage-backed securities and collateralized mortgage obligations. Interest income on other interest-earning assets increased $2.9 million in the year ended December 31, 2023 compared to the year ended December 31, 2022. Interest income increased $3.3 million as a result of higher average interest rates from 1.05% during the year ended December 31, 2022, to 5.04% during the year ended December 31, 2023. Partially offsetting that increase, interest income decreased $436,000 as a result of a decrease in average balances from $195.8 million during the year ended December 31, 2022, to $98.0 million during the year ended December 31, 2023. The increase in average interest rates was due to the increase in the rate paid on funds held at the Federal Reserve Bank. This rate was increased multiple times in 2022 and 2023 in conjunction with the increase in the Federal Funds target interest rate. The decrease in average balances was due to utilization of these funds in loan originations and securities purchases. 30 Total Interest Expense Total interest expense increased $76.3 million, or 278.7%, during the year ended December 31, 2023, when compared with the year ended December 31, 2022, due to an increase in interest expense on deposits of $68.1 million, or 329.3%, an increase in interest expense on short-term borrowings of $6.4 million, or 603.6%, an increase in interest expense on securities sold under reverse repurchase agreements of $881,000, or 271.9%, and an increase in interest expense on subordinated debentures issued to capital trusts of $861,000, or 98.4%. Interest Expense – Deposits Interest expense on demand deposits increased $22.9 million due to an increase in average rates from 0.26% during the year ended December 31, 2022, to 1.30% during the year ended December 31, 2023. Interest rates paid on demand deposits were higher in 2023 due to significant increases in overall market rates in the latter half of 2022 and all of 2023. Partially offsetting that increase, interest on demand deposits decreased $293,000 due to a decrease in average balances from $2.32 billion in the year ended December 31, 2022, to $2.20 billion in the year ended December 31, 2023. The Company also experienced decreased balances in certain types of NOW accounts and IntraFi Network Reciprocal Deposits, mostly offset by increases in money market accounts, which generally have higher rates of interest than NOW accounts. Interest expense on time deposits increased $19.8 million as a result of an increase in average rates of interest from 0.96% during the year ended December 31, 2022, to 2.97% during the year ended December 31, 2023. Interest expense on time deposits increased $1.1 million due to an increase in the average balance of time deposits from $890.5 million during the year ended December 31, 2022, to $991.2 million during the year ended December 31, 2023. A large portion of the Company’s certificate of deposit portfolio matures within six to twelve months and therefore reprices fairly quickly; this is consistent with the portfolio over the past several years. Older certificates of deposit that renewed or were replaced with new deposits generally resulted in the Company paying a higher rate of interest due to increases in market interest rates in the latter half of 2022 and throughout 2023 and targeted rate promotions during 2023. Interest expense on brokered deposits increased $14.1 million, due to an increase in average balances from $252.3 million during the year ended December 31, 2022 to $611.8 million during the year ended December 31, 2023. Interest expense on brokered deposits also increased $10.4 million due to average rates of interest that increased from 2.44% in the year ended December 31, 2022 to 5.02% in the year ended December 31, 2023. Brokered deposits added during 2023 were at higher market rates than brokered deposits previously issued. The Company uses brokered deposits of select maturities and interest rate structures from time to time to supplement its various funding channels and to manage interest rate risk. The Company may use interest rate swaps from time to time to manage its interest rate risks from recorded financial liabilities, primarily brokered deposits. These interest rate swaps have allowed the Company to create funding of varying maturities at a variable rate that in the past has approximated three-month SOFR. In February 2023, the Company entered into five new interest rate swap transactions. At December 31, 2023, the Company had $95.0 million in interest rate swaps on brokered deposits, which were accounted for as fair value hedges. Subsequent to December 31, 2023, the Company elected to terminate these swaps prior to their contractual termination date in 2025. The Company received a net settlement payment from the swap counterparty totaling $26,500 upon termination. The Company did not utilize these types of interest rate swaps on brokered deposits in 2022 or 2021. The Company’s net interest income was negatively impacted in 2023 by the high level of competition for deposits due to asset growth across the industry and the lingering effects of liquidity events at several banks in March 2023. The Company also had a substantial amount of time deposits maturing at relatively low rates in the second quarter of 2023, and these time deposits either renewed at higher rates or left the Company, in turn requiring their replacement with other funding sources at then-current, higher market rates. In addition, sporadically throughout 2023, the Company experienced a higher-than-normal reduction in balances of non-interest-bearing deposits. Customer balances in both non-interest-bearing checking and interest-bearing checking accounts fluctuated during the year ended December 31, 2023. As market interest rates for certain checking account types and time deposit accounts have increased, some customers have chosen to reallocate funds into higher-rate accounts. As of December 31, 2023, time deposit maturities over the next 12 months were as follows: within three months -- $394 million with a weighted-average rate of 3.82%; within three to six months -- $324 million with a weighted-average rate of 4.32%; and within six to twelve months -- $371 million with a weighted-average rate of 4.08%. Based on time deposit market rates in January 2024, replacement rates for these maturing time deposits are likely to be approximately 4.00-4.50%. 31 Interest Expense – FHLBank Advances; Short-term Borrowings, Repurchase Agreements and Other Interest-bearing Liabilities; Subordinated Debentures Issued to Capital Trust and Subordinated Notes FHLBank term advances were not utilized during the years ended December 31, 2023 and 2022. FHLBank overnight borrowings were utilized in 2023 and 2022. Interest expense on reverse repurchase agreements increased $953,000 due to an increase in average rates during the year ended December 31, 2023 when compared to the year ended December 31, 2022. The average rate of interest was 1.47% for the year ended December 31, 2023, compared to 0.24% during the year ended December 31, 2022. The average balance of repurchase agreements decreased $50.4 million from $132.6 million in the year ended December 31, 2022 to $82.2 million in the year ended December 31, 2023, which was due to changes in customers’ desire for this product, which can fluctuate. Interest expense on short-term borrowings (including overnight borrowings from the FHLBank) and other interest-bearing liabilities increased $3.8 million due to an increase in average balances from $48.5 million during the year ended December 31, 2022, to $142.9 million during the year ended December 31, 2023, which was primarily due to changes in the Company’s funding needs and the mix of funding, which can fluctuate. Most of this increase was due to the increased utilization of overnight borrowings from the FHLBank. In addition to this increase, interest expense on short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities increased $2.7 million due to average rates that increased from 2.20% in the year ended December 31, 2022, to 5.25% in the year ended December 31, 2023. Short-term market interest rates increased sharply in the latter half of 2022 and throughout 2023. During the year ended December 31, 2023, compared to the year ended December 31, 2022, interest expense on subordinated debentures issued to capital trusts increased $861,000 due to higher average interest rates. The average interest rate was 3.40% in 2022, compared to 6.74% in 2023. The subordinated debentures are variable-rate debentures, as stated above. There was no change in the average balance of the subordinated debentures between 2022 and 2023. In June 2020, the Company issued $75.0 million of 5.50% fixed-to-floating rate subordinated notes due June 15, 2030. The notes were sold at par, resulting in net proceeds, after underwriting discounts and commissions and other issuance costs, of approximately $73.5 million. These issuance costs are amortized over the expected life of the notes, which is five years from the issuance date, impacting the overall interest expense on the notes. Interest expense on subordinated notes increased $18,000 due to an increase in average balances from $74.1 million during the year ended December 31, 2022 to $74.4 million during the year ended December 31, 2023 due to this issuance cost amortization. Net Interest Income Net interest income for the year ended December 31, 2023 decreased $6.4 million, or 3.2%, to $193.2 million, compared to $199.6 million for the year ended December 31, 2022. Net interest margin was 3.57% for the year ended December 31, 2023, compared to 3.80% for the year ended December 31, 2022, a decrease of 23 basis points. The Company experienced increases in interest income on both loans and investment securities. The Company experienced increases in interest expense on deposits, short-term borrowings, subordinated debentures issued to capital trust and repurchase agreements. The Company’s overall interest rate spread decreased 62 basis points, or 17.1%, from 3.59% during the year ended December 31, 2022, to 2.97% during the year ended December 31, 2023. The decrease was due to a 178 basis point increase in the weighted average rate paid on interest-bearing liabilities, partially offset by a 116 basis point increase in the weighted average yield on interest-earning assets. In comparing the two years, the yield on loans increased 118 basis points, the yield on investment securities increased 7 basis points and the yield on other interest-earning assets increased 399 basis points. The rate paid on deposits increased 173 basis points, the rate paid on short-term borrowings and other interest-bearing liabilities increased 305 basis points, the rate paid on subordinated debentures issued to capital trusts increased 334 basis points and the rate paid on reverse repurchase agreements increased 123 basis points. Interest rates earned on loans and paid on deposits are affected by the mix of the loan and deposit portfolios, the stated maturity of loans and time deposits, the amount of fixed-rate and variable-rate loans and other repricing characteristics. Throughout 2022, competition for deposits was not as intense and market rates on deposits moved higher at a slower pace. In 2023, overall competition for deposits intensified as a few banks experienced significant liquidity issues in March 2023 and market rates moved higher more rapidly. Also, as market interest rates moved higher, some deposit holders chose to move funds into non-deposit investment products. 32 For additional information on net interest income components, refer to the “Average Balances, Interest Rates and Yields” table in this Report. Provision for and Allowance for Credit Losses The Company adopted ASU 2016 13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, effective January 1, 2021. The CECL methodology replaced the incurred loss methodology with a lifetime “expected credit loss” measurement objective for loans, held-to-maturity debt securities and other receivables measured at amortized cost at the time the financial asset is originated or acquired. This standard requires the consideration of historical loss experience and current conditions adjusted for reasonable and supportable economic forecasts. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level or term, as well as for changes in economic conditions, including but not limited to, changes in the national unemployment rate, commercial real estate price index, housing price index, consumer sentiment, gross domestic product (GDP) and construction spending. Challenging or worsening economic conditions from higher inflation or interest rates, COVID-19 and subsequent variant outbreaks or similar events, global unrest or other factors may lead to increased losses in the portfolio and/or requirements for an increase in provision expense. Management maintains various controls in an attempt to identify and limit future losses, such as a watch list of problem loans and potential problem loans, documented loan administration policies and loan review staff to review the quality and anticipated collectability of the portfolio. Additional procedures provide for frequent management review of the loan portfolio based on loan size, loan type, delinquencies, financial analysis, ongoing correspondence with borrowers and problem loan workouts. Management determines which loans are collateral-dependent, evaluates risk of loss and makes additional provisions to expense, if necessary, to maintain the allowance at a satisfactory level. During the year ended December 31, 2023, the Company recorded a provision expense of $2.3 million on its portfolio of outstanding loans, compared to a provision expense of $3.0 million for the year ended December 31, 2022. The Company experienced net charge offs of $1.1 million for the year ended December 31, 2023 compared to net charge offs of $274,000 for the year ended December 31, 2022. The Company recorded a negative provision for losses on unfunded commitments of $5.3 million for the year ended December 31, 2023, compared to provision expense of $3.2 million for the year ended December 31, 2022. General market conditions and unique circumstances related to specific industries and individual projects contribute to the level of provisions and charge-offs. The Bank’s allowance for credit losses as a percentage of total loans was 1.39% at both December 31, 2023 and 2022. Management considers the allowance for credit losses adequate to cover losses inherent in the Bank’s loan portfolio at December 31, 2023, based on recent reviews of the Bank’s loan portfolio and current economic conditions. If challenging economic conditions were to last longer than anticipated or deteriorate further or management’s assessment of the loan portfolio were to change, additional credit loss provisions could be required, thereby adversely affecting the Company’s future results of operations and financial condition. Non-performing Assets As a result of changes in balances and composition of the loan portfolio, changes in economic and market conditions and other factors specific to a borrower’s circumstances, the level of non-performing assets will fluctuate. Non-performing assets at December 31, 2023, were $11.8 million, an increase of $8.1 million from $3.7 million at December 31, 2022. Non-performing assets as a percentage of total assets were 0.20% at December 31, 2023, compared to 0.07% at December 31, 2022. Compared to December 31, 2022, non-performing loans increased $8.1 million to $11.7 million at December 31, 2023, and foreclosed assets decreased $27,000, to $23,000 at December 31, 2023. The majority of the increase in non-performing loans was in the non- performing commercial real estate loans category, which increased $9.0 million from December 31, 2022, primarily due to one loan relationship being added to the category in 2023. 33 Non-performing Loans. Activity in the non-performing loans category during the year ended December 31, 2023, was as follows: Removed Beginning Additions Balance, from Non- to Non- January 1 Performing Performing Transfers to Transfers to Foreclosed Assets and Repossessions Potential Problem Loans (In Thousands) Charge- Offs Ending Balance, Payments December 31 One- to four-family construction Subdivision construction Land development Commercial construction One- to four-family residential Other residential Commercial real estate Commercial business Consumer Total non-performing loans $ — $ — 384 — 722 — 1,579 586 399 — $ — — — 716 — 10,991 47 204 $ 3,670 $ 11,958 $ — $ — — — — — — — (11) (11) $ — $ — — — — — — — — — $ — — $ — $ — — 384 — — — 722 (21) — — 10,552 — 31 — — 59 (21) $ (154) $ (3,694) $ 11,748 — $ — — — (664) — (2,018) (602) (410) — — — (31) — — — (123) FDIC-assisted acquired loans included above $ 428 $ 2,298 $ — $ — $ (21) $ (31) $ (412) $ 2,262 At December 31, 2023, the non-performing commercial real estate category included four loans, two of which were added during the year ended December 31, 2023. The largest relationship in this category, which totaled $8.1 million, or 76.4% of the total category, was added to non-performing loans during the three months ended June 30, 2023 and is collateralized by an office building in Missouri. The loan was classified due to a decline in occupancy resulting in a stressed cash flow. Occupancy has improved somewhat and lease income from the building has continued, and the Company has received some principal paydowns from the borrower. Another significant relationship was added to the commercial real estate category in the three months ended December 31, 2023. This relationship totaled $2.2 million and is collateralized by an assisted living facility in Wisconsin. The non-performing one- to four- family residential category included three loans. The largest relationship in this category, which was added during 2023 and is collateralized by a single-family home in the Kansas City metro area, totaled $543,000, or 75.2% of the total category. The non- performing land development category consisted of one loan added in 2021, which totaled $384,000 and is collateralized by unimproved zoned vacant ground in southern Illinois. The non-performing commercial business category consisted of two loans that totaled $31,000 to a single borrower, both of which were added during 2023. The non-performing consumer category included six loans, three of which were added during 2023. Other Real Estate Owned and Repossessions. All of the total $23,000 of other real estate owned and repossessions at December 31, 2023 were acquired through foreclosure. 34 Activity in foreclosed assets and repossessions during the year ended December 31, 2023, was as follows: One- to four-family construction Subdivision construction Land development Commercial construction One- to four-family residential Other residential Commercial real estate Commercial business Consumer Total foreclosed assets and repossessions FDIC-assisted acquired assets included above Beginning Balance, January 1 Additions Sales Capitalized Costs Write- Downs (In Thousands) Ending Balance, December 31 $ $ $ — $ — — — — — — — 50 50 $ — $ — — — 21 — — — 88 109 $ — $ — — — (21) — — — (115) (136) $ — $ — — — — — — — — — $ — $ — — — — — — — — — $ — — — — — — — — 23 23 — $ 21 $ (21) $ — $ — $ — The additions and sales in the consumer category were due to the volume of repossessions of automobiles, which generally are subject to a shorter repossession process. Potential Problem Loans. Potential problem loans increased $5.8 million during the year ended December 31, 2023, from $1.6 million at December 31, 2022 to $7.4 million at December 31, 2023. Potential problem loans are loans which management has identified through routine internal review procedures as having possible credit problems that may cause the borrowers difficulty in complying with current repayment terms. These loans are not reflected in non-performing assets. Activity in the potential problem loans category during the year ended December 31, 2023, was as follows: Beginning Additions Balance, to Potential Problem January 1 Removed from Potential Problem Transfers to Non- Transfers to Foreclosed Assets and Performing Repossessions (In Thousands) Charge- Offs Ending Balance, Payments December 31 One- to four-family construction Subdivision construction Land development Commercial construction One- to four-family residential Other residential Commercial real estate Commercial business Consumer Total potential problem loans $ — $ — $ — $ — — — 167 7,162 — — 60 $ 1,578 $ 7,389 $ (1,159) $ — — — (1,016) — — — (143) — — — 1,348 — — — 230 — $ — — — (105) — — — (6) (111) $ — $ — — — — — — — (15) — $ — — — — — — — (5) (5) $ (15) $ (303) $ — $ — — — (236) — — — (67) — — — — 158 7,162 — — 54 7,374 FDIC-assisted acquired loans included above $ 743 $ — $ (639) $ — $ — $ — $ (4) $ 100 At December 31, 2023, the other residential (multi-family) category of potential problem loans included one loan, which totaled $7.2 million, and was added in 2023. This loan is collateralized by an apartment and retail project in Oklahoma City, OK. This loan was added to potential problems loans due to a decline in occupancy resulting in a stressed cash flow. The borrower continues to make schedule interest payments. At December 31, 2023, the one- to four-family residential category of potential problem loans included 35 two loans. The largest relationship in this category totaled $99,000, or 62.5% of the total category. The consumer category of potential problem loans included six loans. Loans Categorized as “Watch” and “Special Mention” The Company reviews the credit quality of its loan portfolio using an internal grading system that classifies loans as “Satisfactory,” “Watch,” “Special Mention,” “Substandard” and “Doubtful.” Multiple loan reviews take place on a continuous basis by credit risk and lending management. Reviews are focused on financial performance, occupancy trends, delinquency status, covenant compliance, collateral support, economic considerations and various other factors. Loans classified as “Watch” are being monitored due to indications of potential weaknesses or deficiencies that may require future reclassification as special mention or substandard. Loans classified as “Watch” decreased $20.4 million, from $28.7 million at December 31, 2022 to $8.3 million at December 31, 2023, primarily due to the combination of one large loan being upgraded to “Satisfactory,” one unrelated large loan being downgraded to “Substandard” and added to non-performing loans, and one unrelated loan being downgraded to “Special Mention.” While loans classified as “Special Mention” are not adversely classified, they are deserving of management’s close attention to ensure repayment prospects or the credit position of the assets does not deteriorate and expose the institution to elevated risk to warrant adverse classification at a future date. In the year ended December 31, 2023, loans classified as “Special Mention” increased $26.7 million as four loan relationships were downgraded from “Satisfactory.” In the year ended December 31, 2023, four loan relationships were downgraded from “Satisfactory.” The largest relationship consisted of four commercial business loans totaling $9.9 million at December 31, 2023 and is secured by business assets, equipment, accounts receivable and real estate. The relationship was added to the “Special Mention” category during 2023 due to stressed cash flow associated with business expansion. Since that time, the borrower has reduced debt by restructuring business operations, resulting in improved business cash flow and collateral margins. Monthly payments continue to amortize the loan balance. At December 31, 2023, a $9.6 million relationship was also included in the “Special Mention” category. The balance represents a participation in a loan collateralized by a student housing project in Texas. The Company is not the lead lender for this relationship. The project has suffered from rising debt service requirements and a decline in occupancy. A relationship totaling $4.4 million at December 31, 2023 was added to the “Special Mention” category in 2023. This relationship is collateralized by three assisted care facilities located in southwest Missouri. Business cash flow was negatively impacted by a labor shortage and a decrease in Medicaid reimbursement during 2022-2023. Monthly payments continue to amortize the loan balance. See Note 3 to the accompanying audited financial statements for further discussion of the Company’s loan grading system. Non-Interest Income Non-interest income for the year ended December 31, 2023 was $30.1 million compared to $34.1 million for the year ended December 31, 2022. The decrease of $4.0 million, or 11.9%, was primarily as a result of the following items: Point-of-sale and ATM fees: Point-of-sale and ATM fees decreased $1.4 million compared to the prior year. This decrease was primarily due to a portion of these transactions now being routed through channels with lower fees to the Company, which is expected to continue in future periods, and certain increases in related processing costs during the transition to a new debit card processor. Other income: Other income decreased $1.2 million compared to the prior year. In 2022, a gain of $1.1 million was recognized on sales of fixed assets, with no similar transactions occurring in the current year. Gain (loss) on derivative interest rate products: In 2023, the Company recognized a loss of $337,000 on the change in fair value of its back-to-back interest rate swaps related to commercial loans and the change in fair value on interest rate swaps related to brokered time deposits. In 2022, the Company recognized a gain of $321,000 on the change in fair value of its back-to-back interest rate swaps related to commercial loans. Non-Interest Expense Total non-interest expense increased $7.6 million, or 5.7%, from $133.4 million in the year ended December 31, 2022, to $141.0 million in the year ended December 31, 2023. The Company’s efficiency ratio for the year ended December 31, 2023 was 63.16%, compared to 57.05% for 2022. In the year ended December 31, 2023, the change in the efficiency ratio was primarily due to an increase in non-interest expense, and decreases non-interest income and net interest income. The Company’s ratio of non-interest expense to average assets was 2.47% for the year ended December 31, 2023 compared to 2.42% for the year ended December 31, 36 2022. Average assets for the year ended December 31, 2023, increased $199.4 million, or 3.6%, from the year ended December 31, 2022, primarily due to increases in average net loans receivable. The following were significant items related to the increase in non-interest expense for the year ended December 31, 2023 as compared to the year ended December 31, 2022: Salaries and employee benefits: Salaries and employee benefits increased $3.2 million from the prior year. A portion of this increase related to normal annual merit increases in various lending and operations areas. In 2023, some of these increases were larger than in previous years due to the current employment environment. Also, in the fourth quarter of 2023, the Company recorded expense totaling $441,000 related to discretionary bonuses awarded to various associates who have been involved significantly in the software and systems transition. In addition, compensation costs related to originated loans that are deferred under accounting rules decreased by $1.3 million in 2023 compared to 2022 (resulting in higher expense in 2023), as the volume of loans originated in 2023 decreased substantially compared to 2022. Net occupancy expenses: Net occupancy expenses increased $2.4 million from the prior year. Various components of computer license and support expenses increased by $1.4 million in 2023 compared to 2022. In addition, various repairs and maintenance expenses increased by $252,000 in 2023 compared to 2022. Insurance: Insurance expense increased $1.3 million from the prior year. The increase was primarily due to previously announced increases in deposit insurance rates for the FDIC’s Deposit Insurance Fund. Legal, Audit and Other Professional Fees: Legal, audit and other professional fees increased $756,000 from the prior year, to $7.1 million. In 2023, the Company expensed a total of $4.0 million, primarily related to training and implementation costs for the upcoming core systems conversion and professional fees to consultants engaged to support the Company’s transition of core and ancillary software and information technology systems, compared to $3.1 million expensed in 2022. In addition, in 2022, the Company expensed $372,000 in fees related to the interest rate swaps initiated in July 2022, which was not repeated in 2023. Provision for Income Taxes For the years ended December 31, 2023 and 2022, the Company’s effective tax rate was 20.6% and 19.4%, respectively. These effective rates were near or below the statutory federal tax rate of 21%, due primarily to the utilization of certain investment tax credits and the Company’s tax-exempt investments and tax-exempt loans, which reduced the Company’s effective tax rate. The Company’s effective tax rate may fluctuate in future periods as it is impacted by the level and timing of the Company’s utilization of tax credits, the level of tax-exempt investments and loans, the amount of taxable income in various state jurisdictions and the overall level of pre-tax income. State tax expense estimates continually evolve as taxable income and apportionment between states are analyzed. The Company’s effective income tax rate is currently generally expected to remain near the statutory federal tax rate due primarily to the factors noted above. The Company currently expects its effective tax rate (combined federal and state) will be approximately 20.5% to 21.5% in future periods. Average Balances, Interest Rates and Yields The following table presents, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates, and the net interest margin. Average balances of loans receivable include the average balances of non-accrual loans for each period. Interest income on loans includes interest received on non-accrual loans on a cash basis. Interest income on loans includes the amortization of net loan fees, which were deferred in accordance with accounting standards. Net fees included in interest income were $5.7 million, $6.3 million and $11.2 million for 2023, 2022 and 2021, respectively. Tax-exempt income was not calculated on a tax equivalent basis. The table does not reflect any effect of income taxes. 37 Interest-earning assets: Loans receivable: One- to four-family residential Other residential Commercial real estate Construction Commercial business Other loans Industrial revenue bonds (1) Dec. 31, 2023 Yield/ Rate Year Ended December 31, 2023 Year Ended December 31, 2022 Year Ended December 31, 2021 Average Balance Interest Yield/ Rate Average Balance Interest Yield/ Rate Average Balance Interest Yield/ Rate (Dollars In Thousands) 3.88 % $ 7.15 6.10 7.90 6.50 6.70 6.10 905,102 822,955 1,493,130 908,558 308,049 181,649 12,413 $ 33,693 56,274 87,670 65,999 18,310 9,125 881 3.72 % $ 6.84 5.87 7.26 5.94 5.02 7.10 811,896 837,582 1,551,541 679,524 292,825 199,336 13,338 $ 27,853 43,174 73,164 37,370 14,615 8,864 711 3.43 % $ 678,900 922,739 5.15 1,541,095 4.72 616,899 5.50 279,232 4.99 220,783 4.45 14,528 5.33 $ 25,251 40,998 65,811 27,696 15,403 10,347 763 3.72 % 4.44 4.27 4.49 5.52 4.69 5.25 Total loans receivable 6.25 4,631,856 271,952 5.87 4,386,042 205,751 4.69 4,274,176 186,269 4.36 Investment securities (1) Interest-earning deposits in other banks 2.77 5.34 685,496 98,049 19,942 4,941 2.91 5.04 675,571 195,817 19,170 2,056 2.84 1.05 447,943 552,094 11,689 715 2.61 0.13 Total interest-earning assets Non-interest-earning assets: Cash and cash equivalents Other non-earning assets Total assets Interest-bearing liabilities: Interest-bearing demand and savings Time deposits Brokered deposits Total deposits Securities sold under reverse repurchase agreements Short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities Subordinated debentures issued to capital trust Subordinated notes Total interest-bearing liabilities Non-interest-bearing liabilities: Demand deposits Other liabilities Total liabilities Stockholders’ equity Total liabilities and stockholders’ equity Net interest income: Interest rate spread Net interest margin* Average interest-earning assets to average interest- bearing liabilities 5.81 5,415,401 296,835 5.48 5,257,430 226,977 4.32 5,274,213 198,673 3.77 90,881 212,914 $ 5,719,196 $ 2,202,242 991,202 611,821 3,805,265 82,218 142,866 25,774 74,430 1.67 3.79 5.20 2.80 1.66 5.64 7.24 5.92 96,353 166,007 $ 5,519,790 $ 2,322,915 890,507 252,281 3,465,703 132,595 48,530 25,774 74,131 28,579 29,459 30,719 88,757 1,205 7,500 1,736 4,422 1.30 2.97 5.02 2.33 1.47 5.25 6.74 5.94 96,989 131,154 $ 5,502,356 5,968 8,546 6,162 20,676 324 1,066 875 4,422 0.26 $ 2,316,890 1,076,446 0.96 84,688 2.44 3,478,024 0.60 143,757 0.24 2.20 3.40 5.97 1,529 25,774 119,780 4,023 8,090 989 13,102 37 — 448 7,165 0.17 0.75 1.17 0.38 0.03 — 1.74 5.98 3.03 4,130,553 103,620 2.51 3,746,733 27,363 0.73 3,768,864 20,752 0.55 949,045 88,678 5,168,276 550,920 $ 5,719,196 1,141,660 66,224 4,954,617 565,173 $ 5,519,790 1,061,716 44,260 4,874,840 627,516 $ 5,502,356 2.78 % $ 193,215 2.97 % 3.57 % $ 199,614 3.59 % 3.80 % $ 177,921 3.22 % 3.37 % 131.1 % 140.3 % 139.9 % * Defined as the Company’s net interest income divided by total interest-earning assets. (1) Of the total average balance of investment securities, average tax-exempt investment securities were $56.0 million, $54.0 million and $42.3 million for 2023, 2022 and 2021, respectively. In addition, average tax-exempt industrial revenue bonds were $13.9 million, $16.4 million and $17.9 million in 2023, 2022 and 2021, respectively. Interest income on tax-exempt assets included in this table was $2.4 million, $2.2 million and $1.6 million for 2023, 2022 and 2021, respectively. Interest income net of disallowed interest expense related to tax-exempt assets was $2.1 million, $2.1 million and $1.6 million for 2023, 2022 and 2021, respectively. 38 Rate/Volume Analysis The following table presents the dollar amount of changes in interest income and interest expense for major components of interest- earning assets and interest-bearing liabilities for the periods shown. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) changes in rate (i.e., changes in rate multiplied by old volume) and (ii) changes in volume (i.e., changes in volume multiplied by old rate). For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately to volume and rate. Tax-exempt income was not calculated on a tax equivalent basis. Interest-earning assets: Loans receivable Investment securities Interest-earning deposits in other banks Total interest-earning assets Interest-bearing liabilities: Demand deposits Time deposits Brokered Deposits Total deposits Securities sold under reverse repurchase agreements Short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities Subordinated debentures issued to capital trust Subordinated notes Total interest-bearing liabilities Net interest income Year Ended December 31, 2023 vs. December 31, 2022 Year Ended December 31, 2022 vs. December 31, 2021 Increase (Decrease) Due to Rate Volume Total Increase (Decrease) Increase (Decrease) Due to Rate Volume Total Increase (Decrease) (In Thousands) $ $ 54,141 488 3,321 57,950 22,904 19,843 10,449 53,196 953 2,684 861 (18) 57,676 274 $ $ 12,060 284 (436) 11,908 (293) 1,070 14,108 14,885 (72) 3,750 — 18 18,581 (6,673) $ $ 66,201 772 2,885 69,858 22,611 20,913 24,557 68,081 881 6,434 861 — 76,257 (6,399) $ $ 14,512 1,098 1,475 17,085 1,935 1,212 1,839 4,986 290 390 427 (20) 6,073 11,012 $ $ 4,970 6,383 (134) 11,219 10 (756) 3,334 2,588 (3) 676 — (2,723) 538 10,681 $ $ 19,482 7,481 1,341 28,304 1,945 456 5,173 7,574 287 1,066 427 (2,743) 6,611 21,693 Results of Operations and Comparison for the Years Ended December 31, 2022 and 2021 General Net income increased $1.3 million, or 1.8%, during the year ended December 31, 2022, compared to the year ended December 31, 2021. Net income was $75.9 million for the year ended December 31, 2022 compared to $74.6 million for the year ended December 31, 2021. This increase was primarily due to an increase in net interest income of $21.7 million, or 12.2%, and a decrease in income tax expense of $1.5 million, or 7.5%, partially offset by an increase in provision for credit losses on loans and unfunded commitments of $11.9 million, or 207.4%, an increase in non-interest expense of $5.7 million, or 4.5%, and a decrease in non-interest income of $4.2 million, or 10.9%. Total Interest Income Total interest income increased $28.3 million, or 14.2%, during the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase was due to a $19.5 million increase in interest income on loans and an $8.8 million increase in interest income on investment securities and other interest-earning assets. Interest income on loans increased for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to higher average rates of interest on loans and higher average loan balances. Interest income from investment securities and other interest-earning assets increased during the year ended December 31, 2022 compared to the year ended December 31, 2021, due to higher average balances of investment securities combined with higher average rates of interest on investment securities and other interest-earning assets. Interest Income – Loans During the year ended December 31, 2022 compared to the year ended December 31, 2021, interest income on loans increased due to higher average balances and average interest rates. Interest income increased $14.5 million as the result of higher average interest rates on loans. The average yield on loans increased from 4.36% during the year ended December 31, 2021 to 4.69% during the year ended December 31, 2022. This increase was primarily due to the repricing of floating rates and the origination of new loans at current 39 market rates in 2022 as market interest rates began to increase significantly. In addition, interest income on loans increased $5.0 million as a result of higher average loan balances, which increased from $4.27 billion during the year ended December 31, 2021, to $4.39 billion during the year ended December 31, 2022. The Company continued to originate loans at a pace similar to prior periods, but overall loan repayments slowed in 2022 compared to the level of repayments in 2021. Additionally, the Company’s interest income on loans included accretion of net deferred fees related to Paycheck Protection Program (PPP) loans originated in 2020 and 2021. Net deferred fees recognized in interest income were $502,000 and $5.5 million in the years ended December 31, 2022 and December 31, 2021, respectively. In October 2018, the Company entered into an interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap was $400 million with a contractual termination date in October 2025. As previously disclosed by the Company, in March 2020, the Company and its swap counterparty mutually agreed to terminate this swap prior to its contractual maturity. The Company was paid $45.9 million from its swap counterparty as a result of this termination. This $45.9 million, less the accrued to date interest portion and net of deferred income taxes, is reflected in the Company’s stockholders’ equity as Accumulated Other Comprehensive Income and is being accreted to interest income on loans monthly through the original contractual termination date of October 6, 2025. This has the effect of reducing Accumulated Other Comprehensive Income and increasing Net Interest Income and Retained Earnings over the periods. The Company recorded interest income related to the interest rate swap of $8.1 million in each of the years ended December 31, 2022 and December 31, 2021. At December 31, 2022, the Company expected to have a sufficient amount of eligible variable rate loans to continue to accrete this interest income ratably in future periods. If this expectation changes and the amount of eligible variable rate loans decreases significantly, the Company may be required to recognize this interest income more rapidly. In March 2022, the Company entered into an interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap is $300 million with a contractual termination date of March 1, 2024. Under the terms of the swap, the Company received a fixed rate of interest of 1.6725% and paid a floating rate of interest equal to one-month USD-LIBOR (or the equivalent replacement rate if USD-LIBOR rate is not available). The floating rate reset monthly and net settlements of interest due to/from the counterparty also occurred monthly. The initial floating rate of interest was set at 0.2414%. To the extent that the fixed rate of interest exceeded one-month USD-LIBOR, the Company received net interest settlements, which were recorded as loan interest income. If one-month USD-LIBOR exceeded the fixed rate of interest, the Company was required to pay net settlements to the counterparty and recorded those net payments as a reduction of interest income on loans. The Company recorded a reduction of loan interest income related to this swap transaction of $941,000 in the year ended December 31, 2022. In July 2022, the Company entered into two additional interest rate swap transactions as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of each swap is $200 million with an effective date of May 1, 2023 and a termination date of May 1, 2028. Under the terms of one swap, beginning in May 2023, the Company will receive a fixed rate of interest of 2.628% and will pay a floating rate of interest equal to one-month USD-SOFR OIS. Under the terms of the other swap, beginning in May 2023, the Company will receive a fixed rate of interest of 5.725% and will pay a floating rate of interest equal to one-month USD-Prime. In each case, the floating rate will be reset monthly and net settlements of interest due to/from the counterparty will also occur monthly. To the extent the fixed rate of interest exceeds the floating rate of interest, the Company will receive net interest settlements, which will be recorded as loan interest income. If the floating rate of interest exceeds the fixed rate of interest, the Company will be required to pay net settlements to the counterparty and will record those net payments as a reduction of interest income on loans. At December 31, 2022, the USD-Prime rate was 7.50% and the one-month USD-SOFR OIS rate was 4.06173%. Interest Income – Investments and Other Interest-earning Assets Interest income on investments increased $7.5 million in the year ended December 31, 2022 compared to the year ended December 31, 2021. Interest income increased $6.4 million as a result of an increase in average balances from $447.9 million during the year ended December 31, 2021, to $675.6 million during the year ended December 31, 2022. Interest income increased $1.1 million due to an increase in average interest rates from 2.61% during the year ended December 31, 2021 to 2.84% during the year ended December 31, 2022, due to higher market rates of interest on investment securities purchased during 2022 compared to securities already in the portfolio. At December 31, 2022, the investment portfolio did not include a material amount of adjustable rate securities. 40 Interest income on other interest-earning assets increased $1.3 million in the year ended December 31, 2022 compared to the year ended December 31, 2021. Interest income increased $1.5 million as a result of higher average interest rates from 0.13% during the year ended December 31, 2021, to 1.05% during the year ended December 31, 2022. Interest income decreased $134,000 as a result of a decrease in average balances from $552.1 million during the year ended December 31, 2021, to $195.8 million during the year ended December 31, 2022. The increase in the average interest rate was primarily due to the increase in the rate paid on funds held at the Federal Reserve Bank. This rate was increased multiple times in 2022 in conjunction with the increase in the Federal Funds target interest rate. Total Interest Expense Total interest expense increased $6.6 million, or 31.9%, during the year ended December 31, 2022, when compared with the year ended December 31, 2021, due to an increase in interest expense on deposits of $7.6 million, or 57.8%, an increase in interest expense on short-term borrowings of $1.1 million, or 100.0%, an increase in interest expense on subordinated debentures issued to capital trusts of $427,000, or 95.3%, and an increase in interest expense on securities sold under reverse repurchase agreements of $287,000, or 775.7%, partially offset by a decrease in interest expense on subordinated notes of $2.7 million, or 31.9%. Interest Expense – Deposits Interest expense on demand deposits increased $1.9 million due to an increase in average rates from 0.17% during the year ended December 31, 2021, to 0.26% during the year ended December 31, 2022. In addition, interest on demand deposits increased $10,000 due to an increase of $6.0 million in average balances to $2.32 billion in the year ended December 31, 2022, when compared to the year ended December 31, 2021. Interest rates paid on demand deposits increased due to increases in the federal funds rate of interest and other market interest rates during 2022. Interest expense on time deposits increased $1.2 million due to an increase in average rates of interest from 0.75% during the year ended December 31, 2021, to 0.96% during the year ended December 31, 2022. Partially offsetting that increase, interest expense on time deposits decreased $756,000 due to a decrease in the average balance of time deposits from $1.08 billion during the year ended December 31, 2021, to $891.5 million during the year ended December 31, 2022. A large portion of the Company’s certificate of deposit portfolio matures within six to twelve months and therefore reprices fairly quickly; this is consistent with the portfolio over the past several years. Older certificates of deposit that renewed or were replaced with new deposits in the latter half of 2022 generally resulted in the Company paying a higher rate of interest due to market interest rate increases during 2022. The decrease in average balances of time deposits was a result of decreases in retail time deposits obtained through the Company’s banking center network and time deposits obtained through on-line channels. On-line channel time deposits were actively reduced by the Company as other deposit sources increased. The Company reduced its rates on these types of time deposits and allowed these deposits to mature without replacement during 2021 and 2022. Interest expense on brokered deposits increased $3.3 million, due to an increase in average balances from $84.7 million during the year ended December 31, 2021 to $252.3 million during the year ended December 31, 2022. Interest expense on brokered deposits also increased $1.8 million due to average rates of interest that increased from 1.17% in the year ended December 31, 2021 to 2.44% in the year ended December 31, 2022. Brokered deposits added during 2022 were at higher market rates than brokered deposits previously issued. The Company uses brokered deposits of select maturities and interest rate structures from time to time to supplement its various funding channels and to manage interest rate risk. Interest Expense – FHLBank Advances, Short-term Borrowings, Repurchase Agreements and Other Interest-bearing Liabilities; Subordinated Debentures Issued to Capital Trust and Subordinated Notes FHLBank term advances were not utilized during the years ended December 31, 2022 and 2021. FHLBank overnight borrowings were utilized in 2022, but were not utilized in 2021. Interest expense on reverse repurchase agreements increased $290,000 due to an increase in average rates during the year ended December 31, 2022 when compared to the year ended December 31, 2021. The average rate of interest was 0.24% for the year ended December 31, 2022, compared to 0.03% during the year ended December 31, 2021. The average balances of repurchase agreements decreased $11.2 million from $143.8 million in the year ended December 31, 2021, to $132.6 million in the year ended December 31, 2022, resulting in little change in interest expense. 41 Interest expense on short-term borrowings and other interest-bearing liabilities increased $676,000 due to an increase in average balances from $1.5 million during the year ended December 31, 2021, to $48.5 million during the year ended December 31, 2022, which was primarily due to changes in the Company’s funding needs and the mix of funding, which can fluctuate. Most of this increase was due to the utilization of overnight borrowings from the FHLBank. In addition to this increase, interest expense on short- term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities increased $390,000 due to average rates that increased from 0.02% in the year ended December 31, 2021, to 2.20% in the year ended December 31, 2022. During the year ended December 31, 2022, compared to the year ended December 31, 2021, interest expense on subordinated debentures issued to capital trusts increased $427,000 due to higher average interest rates. The average interest rate was 1.74% in 2021, compared to 3.40% in 2022. The interest rate on subordinated debentures is a floating rate indexed to the three-month LIBOR interest rate. There was no change in the average balance of the subordinated debentures between 2022 and 2021. In August 2016, the Company issued $75 million of 5.25% fixed-to-floating rate subordinated notes due August 15, 2026. The notes were sold at par, resulting in net proceeds, after underwriting discounts and commissions and other issuance costs, of approximately $73.5 million. In June 2020, the Company issued $75.0 million of 5.50% fixed-to-floating rate subordinated notes due June 15, 2030. The notes were sold at par, resulting in net proceeds, after underwriting discounts and commissions and other issuance costs, of approximately $73.5 million. In both cases, the issuance costs are amortized over the expected life of the notes, which is five years from the issuance date, and therefore impact the overall interest expense on the notes. In August 2021, the Company completed the redemption of all of its 5.25% subordinated notes due August 15, 2026. The notes were redeemed for cash by the Company at 100% of their principal amount, plus accrued and unpaid interest. Interest expense on subordinated notes decreased $2.7 million due to a decrease in average balances from $119.8 million during the year ended December 31, 2021 to $74.1 million during the year ended December 31, 2022, due to lower average balances resulting from the redemption of the subordinated notes maturing in 2026. Net Interest Income Net interest income for the year ended December 31, 2022 increased $21.7 million, or 12.2%, to $199.6 million, compared to $177.9 million for the year ended December 31, 2021. Net interest margin was 3.80% for the year ended December 31, 2022, compared to 3.37% for the year ended December 31, 2021, an increase of 43 basis points. The Company experienced increases in interest income on both loans and investment securities. The Company experienced increases in interest expense on deposits, short-term borrowings, subordinated debentures issued to capital trust and repurchase agreements, partially offset by a decrease in interest expense on subordinated notes. The Company’s overall interest rate spread increased 37 basis points, or 11.5%, from 3.22% during the year ended December 31, 2021, to 3.59% during the year ended December 31, 2022. The increase was due to a 55 basis point increase in the weighted average yield on interest-earning assets and an 18 basis point increase in the weighted average rate paid on interest-bearing liabilities. In comparing the two years, the yield on loans increased 33 basis points, the yield on investment securities increased 23 basis points and the yield on other interest-earning assets increased 92 basis points. The rate paid on deposits increased 22 basis points, the rate paid on subordinated debentures issued to capital trusts increased 166 basis points, the rate paid on reverse repurchase agreements increased 21 basis points and the rate paid on subordinated notes decreased one basis point. In addition, the Company had outstanding overnight borrowings in the 2022 period, which had an average interest rate of 220 basis points compared to none in the 2021 period. During the year ended December 31, 2022, the mix of the Company’s assets shifted somewhat, with net increases in outstanding loan balances and investment securities. The Company used excess funds that were previously held on account at the Federal Reserve Bank to fund the increases in loans and investments. Loans increased $499.3 million and investment securities increased $192.1 million, while cash and cash equivalents decreased $548.7 million. Also, in the latter half of 2022, the mix of deposits changed somewhat, with non-time account balances trending lower and time deposit balances trending higher. The increased time deposits are a mix of shorter- term retail deposits, fixed-rate brokered deposits callable at the Company’s discretion and variable-rate brokered deposits. From time to time, the Company also utilized overnight borrowings from the FHLBank. For additional information on net interest income components, refer to the “Average Balances, Interest Rates and Yields” table in this Report. 42 Provision for and Allowance for Credit Losses During the year ended December 31, 2022, the Company recorded a provision expense of $3.0 million on its portfolio of outstanding loans, compared to a negative provision of $6.7 million for the year ended December 31, 2021. The negative provision for credit losses in 2021 reflected decreased outstanding total loans and continued positive trends in asset quality metrics, combined with an improved economic forecast. In 2021, the national unemployment rate continued to decrease and many measures of economic growth improved. The Company experienced net charge offs of $274,000 for the year ended December 31, 2022 compared to net recoveries of $116,000 for the year ended December 31, 2021. The provision for losses on unfunded commitments for the year ended December 31, 2022 was $3.2 million, compared to $939,000 for the year ended December 31, 2021. General market conditions and unique circumstances related to specific industries and individual projects contributed to the level of provisions and charge-offs. Collateral and repayment evaluations of all assets categorized as potential problem loans, non-performing loans or foreclosed assets were completed with corresponding charge-offs or reserve allocations made as appropriate. The Bank’s allowance for credit losses as a percentage of total loans was 1.39% and 1.49% at December 31, 2022 and 2021, respectively. Non-performing Assets Non-performing assets at December 31, 2022, were $3.7 million, a decrease of $2.3 million from $6.0 million at December 31, 2021. Non-performing assets as a percentage of total assets were 0.07% at December 31, 2022, compared to 0.11% at December 31, 2021. Compared to December 31, 2021, non-performing loans decreased $1.7 million to $3.7 million at December 31, 2022, and foreclosed assets decreased $538,000 to $50,000 at December 31, 2022. Non-performing commercial real estate loans were $1.6 million, or 43.0%, of total non-performing loans at December 31, 2022. Nonperforming one-to four-family residential loans were $722,000, or 19.6%, of the total non-performing loans at December 31, 2022. Non-performing commercial business loans were $586,000, or 16.0%, of total non-performing loans at December 31, 2022. Non-performing land development loans were $384,000, or 10.5%, of total nonperforming loans at December 31, 2022. Non-performing consumer loans were $399,000, or 10.9%, of the total non- performing loans at December 31, 2022. Non-performing Loans. Activity in the non-performing loans category during the year ended December 31, 2022, was as follows: Beginning Additions to Removed Balance, from Non- Non- Performing Performing January 1 Transfers to Transfers to Foreclosed Assets and Repossessions Potential Problem Loans Charge- Offs Ending Balance, Payments December 31 One- to four-family construction Subdivision construction Land development Commercial construction One- to four-family residential Other residential Commercial real estate Commercial business Consumer Total non-performing loans $ — $ — 468 — 2,216 — 2,006 — 733 — $ — — — 519 — 238 586 168 $ 5,423 $ 1,511 $ — $ — — — (90) — — — — (90) $ (In Thousands) — $ — — — (279) — — — (74) (353) $ — $ — $ — — — — — — — (9) (9) $ (213) $ (2,599) $ — $ — — — (1,607) — (665) — (327) — (84) — (37) — — — (92) — — 384 — 722 — 1,579 586 399 3,670 FDIC-assisted acquired loans included above $ 1,736 $ 272 $ — $ — $ — $ — $ (1,580) $ 428 At December 31, 2022, the non-performing commercial real estate category included three loans, one of which was added during 2022. The largest relationship in this category, which totaled $1.3 million, or 83.3% of the total category, was transferred from potential problem loans in 2021 and is collateralized by a mixed use commercial retail building. The non-performing one- to four- family residential category included 23 loans, four of which were added during 2022. The largest relationship in this category, totaled $158,000, or 21.8% of the total category. The non-performing land development category consisted of one loan, which totaled 43 $384,000 and is collateralized by unimproved zoned vacant ground in southern Illinois. The non-performing commercial business category consisted of two loans that totaled $586,000 to a single borrower, both of which were added during the fourth quarter of 2022 and subsequently paid off with no loss in the first quarter of 2023. The non-performing consumer category included 23 loans, 11 of which were added during 2022. Other Real Estate Owned and Repossessions. Of the total $233,000 of other real estate owned and repossessions at December 31, 2022, $183,000 represents properties which were not acquired through foreclosure. Activity in foreclosed assets and repossessions during the year ended December 31, 2022, was as follows: One- to four-family construction Subdivision construction Land development Commercial construction One- to four-family residential Other residential Commercial real estate Commercial business Consumer Total foreclosed assets and repossessions FDIC-assisted acquired assets included above Beginning Balance, January 1 Additions Sales Capitalized Costs (In Thousands) Ending Balance, Write-Downs December 31 $ $ $ — $ — 315 — 183 — — — 90 588 $ — $ — — — — — — — 344 344 $ — $ — (300) — (175) — — — (384) (859) $ — $ — — — — — — — — — $ — $ — (15) — (8) — — — — (23) $ 498 $ — $ (475) $ — $ (23) $ — — — — — — — — 50 50 — The Company sold its three remaining foreclosed real estate properties in 2022. The additions and sales in the consumer category were due to the volume of repossessions of automobiles, which generally are subject to a shorter repossession process. Potential Problem Loans. Potential problem loans decreased $402,000 during the year ended December 31, 2022, from $2.0 million at December 31, 2021 to $1.6 million at December 31, 2022. Potential problem loans are loans which management has identified through routine internal review procedures as having possible credit problems that may cause the borrowers difficulty in complying with current repayment terms. These loans are not reflected in non-performing assets. 44 Activity in the potential problem loans category during the year ended December 31, 2022, was as follows: Beginning Additions Balance, January 1 Problem to Potential Potential Problem Removed from Transfers to Non- Performing Transfers to Foreclosed Assets and Ending Balance, Repossessions Charge-Offs Payments December 31 (In Thousands) One- to four-family construction Subdivision construction Land development Commercial construction One- to four-family residential Other residential Commercial real estate Commercial business Consumer Total potential problem loans $ — $ 15 — — 1,432 — 210 — 323 $ 1,980 $ — $ — — — 279 — — — 161 440 $ — $ — — — (275) — — — (58) (333) $ — $ — — — — — — — (37) (37) $ — $ — — — — — — — (27) (27) $ — $ (15) — — (88) — (166) — (123) — $ — — — — — (44) — (9) (53) $ (392) $ — — — — 1,348 — — — 230 1,578 FDIC-assisted acquired loans included above $ 1,004 $ — $ — $ — $ — $ (44) $ (217) $ 743 At December 31, 2022, the one- to four-family residential category of potential problem loans included 22 loans, one of which was added during the year ended December 31, 2022. The largest relationship in this category totaled $159,000, or 11.8% of the total category. The consumer category of potential problem loans included 26 loans, 17 of which were added during the year ended December 31, 2022. Loans Classified “Watch” The Company reviews the credit quality of its loan portfolio using an internal grading system that classifies loans as “Satisfactory,” “Watch,” “Special Mention,” “Substandard” and “Doubtful.” Loans classified as “Watch” are being monitored because of indications of potential weaknesses or deficiencies that may require future classification as special mention or substandard. In the year ended December 31, 2022, loans classified as “Watch” decreased $2.0 million, from $30.7 million at December 31, 2021 to $28.7 million at December 31, 2022 primarily due to loans being upgraded out of the “Watch” category, partially offset by loans being downgraded to the “Watch” category. See Note 3 to the accompanying audited financial statements for further discussion of the Company’s loan grading system. Non-Interest Income Non-interest income for the year ended December 31, 2022 was $34.1 million compared with $38.3 million for the year ended December 31, 2021. The decrease of $4.2 million, or 10.9%, was primarily as a result of the following items: Net gains on loan sales: Net gains on loan sales decreased $6.9 million compared to the prior year. The decrease was due to a decrease in originations of fixed-rate single-family mortgage loans during 2022 compared to 2021. Fixed-rate single-family mortgage loans originated are generally subsequently sold in the secondary market. These loan originations increased substantially when market interest rates decreased to historically low levels in 2020 and 2021. As a result of the significant volume of refinance activity in 2022 and 2021, and as market interest rates moved higher beginning in the second quarter of 2022, mortgage refinance volume decreased and fixed rate loan originations and related gains on sales of these loans decreased substantially. Other income: Other income increased $1.3 million compared to the prior year. In 2022, a gain of $1.0 million was recognized on sales of fixed assets. Also in 2022, the Company recorded a one-time bonus of $500,000 from its card processor for achieving certain benchmarks related to debit card activity. Overdraft and Insufficient funds fees: Overdraft and Insufficient funds fees increased $1.2 million compared to the prior year. It appears that consumers continued to spend significantly in 2022, but some may have lower account balances as prices for goods and services increased and government stimulus payments received by consumers in 2020 and 2021 were exhausted. 45 Point-of-sale and ATM fees: Point-of-sale and ATM fees increased $676,000 compared to the prior year. This increase was mainly due to increased customer debit card transactions in 2022 compared to 2021. In the latter half of 2021 and through 2022, debit card usage by customers rebounded and was back to historical levels, and in many cases, increased levels of activity. However, during the three months ended December 31, 2022, debit card usage and revenue to Great Southern decreased a bit compared to recent quarterly periods. It appears that debit card transaction volumes may have decreased and customers may be using credit cards for more transactions instead. Non-Interest Expense Total non-interest expense increased $5.7 million, or 4.5%, from $127.7 million in the year ended December 31, 2021, to $133.4 million in the year ended December 31, 2022. The Company’s efficiency ratio for the year ended December 31, 2022 was 57.05%, compared to 59.03% for 2021. The higher efficiency ratio in 2021 was primarily due to an increase in non-interest expense (primarily from the significant IT consulting expense and related contract termination liability incurred in December 2021), partially offset by an increase in total revenue. Excluding this consulting expense and contract termination liability, the Company’s efficiency ratio was 56.57% in 2021. In the year ended December 31, 2022, the improvement in the efficiency ratio was primarily due to an increase in net interest income, as a result of increased loan and investment balances and increased market interest rates compared to the year ended December 31, 2021, partially offset by increased non-interest expense. The Company’s ratio of non-interest expense to average assets was 2.42% for the year ended December 31, 2022 compared to 2.32% for the year ended December 31, 2021. Average assets for the year ended December 31, 2022, increased $17.4 million, or 0.3%, from the year ended December 31, 2021, primarily due to increases in net loans receivable and investment securities, partially offset by a decrease interest-bearing cash equivalents. The following were key items related to the increase in non-interest expense for the year ended December 31, 2022 as compared to the year ended December 31, 2021: Salaries and employee benefits: Salaries and employee benefits increased $5.0 million from the prior year. A portion of this increase related to normal annual merit increases in various lending and operations areas. In 2022, many of these increases were larger than in previous years due to the employment environment. Also, in the second quarter of 2022, the Company paid a special cash bonus to all employees totaling $1.1 million in response to the rapid and significant increases in prices for many goods and services. In addition, the Phoenix and Charlotte, North Carolina loan offices were opened in 2022, with the operation of these offices adding approximately $727,000 of salaries and benefits expense in the 2022 year. Other operating expenses: Other operating expenses increased $1.7 million from the prior year, to $8.3 million. Of this increase, $443,000 related to deposit account fraud losses and $219,000 related to charitable contributions. Provision for Income Taxes For the years ended December 31, 2022 and 2021, the Company’s effective tax rate was 19.4% and 20.9%, respectively. These effective rates were at or below the statutory federal tax rate of 21%, due primarily to the utilization of certain investment tax credits and the Company’s tax-exempt investments and tax-exempt loans, which reduced the Company’s effective tax rate. Liquidity Liquidity is a measure of the Company’s ability to generate sufficient cash to meet present and future financial obligations in a timely manner through either the sale or maturity of existing assets or the acquisition of additional funds through liability management. These obligations include the credit needs of customers, funding deposit withdrawals, and the day-to-day operations of the Company. Liquid assets include cash, interest-bearing deposits with financial institutions and certain investment securities and loans. As a result of the Company’s management of the ability to generate liquidity primarily through liability funding, management believes that the Company maintains overall liquidity sufficient to satisfy its depositors’ requirements and meet its borrowers’ credit needs. At December 31, 2023, the Company had commitments of approximately $14.0 million to fund loan originations, $1.21 billion of unused lines of credit and unadvanced loans, and $16.5 million of outstanding letters of credit. 46 Loan commitments and the unfunded portion of loans at the dates indicated were as follows (in thousands): December 31, 2023 December 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 Closed non-construction loans with unused available lines Secured by real estate (one- to four-family) Secured by real estate (not one- to four-family) Not secured by real estate - commercial business Closed construction loans with unused available lines Secured by real estate (one-to four-family) Secured by real estate (not one-to four-family) Loan commitments not closed Secured by real estate (one-to four-family) Secured by real estate (not one-to four-family) Not secured by real estate - commercial business $ 203,964 $ 199,182 $ 175,682 $ 164,480 $ 155,831 19,512 83,782 — 104,452 23,752 91,786 22,273 77,411 — 82,435 101,545 719,039 100,669 1,444,450 74,501 1,092,029 42,162 823,106 48,213 798,810 12,347 48,153 11,763 16,819 157,645 50,145 53,529 146,826 12,920 85,917 45,860 699 69,295 92,434 — $ 1,179,246 $ 2,073,362 $ 1,671,025 $ 1,261,908 $ 1,267,877 The following table summarizes the Company’s fixed and determinable contractual obligations by payment date as of December 31, 2023. Additional information regarding these contractual obligations is discussed further in Notes 6, 8, 9, 10, 11, 12, 13 and 18 of the accompanying audited financial statements. Deposits without a stated maturity Time and brokered certificates of deposit Short-term borrowings Subordinated debentures Subordinated notes Operating leases Dividends declared but not paid Payments Due In: One Year or Less Over One to Five Years Over Five Years Total (In Thousands) $ 3,111,978 1,188,266 323,453 — — 1,313 4,722 $ — 420,406 — — — 4,610 — $ — 1,058 — 25,774 74,579 1,899 — $ 3,111,978 1,609,730 323,453 25,774 74,579 7,822 4,722 $ 4,629,732 $ 425,016 $ 103,310 $ 5,158,058 The Company’s primary sources of funds are customer deposits, brokered deposits, short-term borrowings at the FHLBank, other borrowings, loan repayments, unpledged securities, proceeds from sales of loans and available-for-sale securities, and funds provided from operations. The Company utilizes various sources of funds based on the comparative costs and availability at the time. The Company has from time to time chosen not to pay rates on deposits as high as the rates paid by certain of its competitors and, when believed to be appropriate, supplements deposits with less expensive alternative sources of funds. Since mid-2022, the Company has increased the interest rates it pays on many deposit products. The Company has also utilized both fixed-rate and floating-rate brokered deposits of varying terms, as well as overnight FHLBank borrowings. At December 31, 2023 and 2022, the Company had these available secured lines and on-balance sheet liquidity: Federal Home Loan Bank line Federal Reserve Bank line Cash and cash equivalents Unpledged securities – Available-for-sale Unpledged securities – Held-to-maturity $ December 31, 2023 919.1 million 448.7 million 211.3 million 352.8 million 191.7 million December 31, 2022 $ 1,005.1 million 397.0 million 168.5 million 371.8 million 202.5 million 47 Statements of Cash Flows. During the years ended December 31, 2023, 2022 and 2021, the Company had positive cash flows from operating activities. The Company experienced negative cash flows from investing activities during the years ended December 31, 2023 and 2022, and positive cash flows from investing activities during the year ended December 31, 2021. The Company experienced positive cash flows from financing activities during the years ended December 31, 2023 and 2022, and negative cash flows from financing activities during the year ended December 31, 2021. Cash flows from operating activities for the periods covered by the Statements of Cash Flows have been primarily related to changes in accrued and deferred assets, credits and other liabilities, the provision for credit losses, realized gains on the sale of investment securities and loans, depreciation and amortization and the amortization of deferred loan origination fees and discounts (premiums) on loans and investments, all of which are non-cash or non-operating adjustments to operating cash flows. Net income adjusted for non- cash and non-operating items and the origination and sale of loans held-for-sale were the primary sources of cash flows from operating activities. Operating activities provided cash flows of $80.7 million, $84.8 million and $93.7 million during the years ended December 31, 2023, 2022 and 2021, respectively. During the years ended December 31, 2023, 2022 and 2021, investing activities used cash of $88.2 million, used cash of $819.5 million and provided cash of $181.9 million, respectively, primarily due to the net increases and purchases of loans (2023 and 2022) and investment securities (2022 and 2021), partially offset by cash received from the proceeds of repayments from investment securities in each year. During 2021, investing activities provided cash as net loan repayments exceeded the purchase of loans and investment securities. Changes in cash flows from financing activities during the periods covered by the Statements of Cash Flows are primarily due to changes in deposits after interest credited, changes in short-term borrowings, redemption of subordinated notes, purchases of the Company’s common stock and dividend payments to stockholders. Financing activities provided cash flows of $50.3 million and $186.0 million during the years ended December 31, 2023 and 2022, respectively, primarily due to net increases in customer deposit balances and net increases or decreases in various borrowings, partially offset by dividend payments to stockholders and purchases of the Company’s common stock. Financing activities used cash flows of $122.2 million during the year ended December 31, 2021, as dividend payments to stockholders, redemption of subordinated notes and purchases of the Company’s common stock exceeded the net increase in deposits. Capital Resources Management continuously reviews the capital position of the Company and the Bank to ensure compliance with minimum regulatory requirements, as well as to explore ways to increase capital either by retained earnings or other means. As of December 31, 2023, total stockholders’ equity and common stockholders’ equity were each $571.8 million, or 9.8% of total assets, equivalent to a book value of $48.44 per common share. As of December 31, 2022, total stockholders’ equity and common stockholders’ equity were each $533.1 million, or 9.4% of total assets, equivalent to a book value of $43.58 per common share. At December 31, 2023, the Company’s tangible common equity to tangible assets ratio was 9.7%, compared to 9.2% at December 31, 2022. Included in stockholders’ equity at December 31, 2023 and 2022, were unrealized losses (net of taxes) on the Company’s available-for-sale investment securities totaling $40.5 million and $47.2 million, respectively. This change in net unrealized loss during 2023 primarily resulted from decreasing intermediate-term market interest rates (which generally increased the fair value of investment securities) during the first three months of 2023, followed by increasing intermediate-term market interest rates (which generally decreased the fair value of investment securities) during the period from March 31, 2023 through September 30, 2023. In the three months ended December 31, 2023, intermediate-term market interest rates decreased significantly (which once again generally increased the fair value of investment securities). In addition, included in stockholders’ equity at December 31, 2023, were realized gains (net of taxes) on the Company’s cash flow hedge (interest rate swap), which was terminated in March 2020, totaling $11.1 million. This amount, plus associated deferred taxes, is expected to be accreted to interest income over the remaining term of the original interest rate swap contract, which was to end in October 2025. At December 31, 2023, the remaining pre-tax amount to be recorded in interest income was $14.4 million. The net effect on total stockholders’ equity over time will be no impact as the reduction of this realized gain will be offset by an increase in retained earnings (as the interest income flows through pre-tax income). 48 Also included in stockholders’ equity at December 31, 2023, were unrealized losses (net of taxes) on the Company’s three outstanding cash flow hedges (three interest rate swaps) totaling $13.0 million. Significant increases in market interest rates since the inception of these hedges have caused their fair values to decrease; however, market interest rates decreased in the three months ended December 31, 2023, causing the fair values of these swaps to increase in that period. As noted above, total stockholders' equity increased $38.7 million, from $533.1 million at December 31, 2022 to $571.8 million at December 31, 2023. Stockholders’ equity increased due to the Company recording net income of $67.8 million for the year ended December 31, 2023 and increased by $2.5 million due to stock option exercises during 2023. AOCI (loss) decreased $10.9 million (increase to stockholders’ equity) during the year ended December 31, 2023, primarily due to changes in the market value of available-for-sale securities and changes in the fair value of cash flow hedges. Partially offsetting these increases were repurchases of the Company’s common stock totaling $23.3 million and dividends declared on common stock of $19.1 million. The Company also had unrealized losses on its portfolio of held-to-maturity investment securities, which totaled $23.8 million at December 31, 2023, that were not included in its total capital balance. If these held-to-maturity unrealized losses were included in capital (net of taxes), this would have decreased total stockholder’s equity by $18.0 million at December 31, 2023. This amount was equal to 3.1% of total stockholders’ equity of $571.8 million at that date. Banks are required to maintain minimum risk-based capital ratios. These ratios compare capital, as defined by the risk-based regulations, to assets adjusted for their relative risk as defined by the regulations. Under current guidelines, which became effective January 1, 2015, banks must have a minimum common equity Tier 1 capital ratio of 4.50%, a minimum Tier 1 risk-based capital ratio of 6.00%, a minimum total risk-based capital ratio of 8.00%, and a minimum Tier 1 leverage ratio of 4.00%. To be considered “well capitalized,” banks must have a minimum common equity Tier 1 capital ratio of 6.50%, a minimum Tier 1 risk-based capital ratio of 8.00%, a minimum total risk-based capital ratio of 10.00%, and a minimum Tier 1 leverage ratio of 5.00%. On December 31, 2023, the Bank’s common equity Tier 1 capital ratio was 13.1%, its Tier 1 capital ratio was 13.1%, its total capital ratio was 14.3% and its Tier 1 leverage ratio was 11.6%. As a result, as of December 31, 2023, the Bank was well capitalized, with capital ratios in excess of those required to qualify as such. On December 31, 2022, the Bank’s common equity Tier 1 capital ratio was 11.9%, its Tier 1 capital ratio was 11.9%, its total capital ratio was 13.1% and its Tier 1 leverage ratio was 11.5%. As a result, as of December 31, 2022, the Bank was well capitalized, with capital ratios in excess of those required to qualify as such. The FRB has established capital regulations for bank holding companies that generally parallel the capital regulations for banks. On December 31, 2023, the Company’s common equity Tier 1 capital ratio was 11.9%, its Tier 1 capital ratio was 12.4%, its total capital ratio was 15.2% and its Tier 1 leverage ratio was 11.0%. On December 31, 2022, the Company’s common equity Tier 1 capital ratio was 10.6%, its Tier 1 capital ratio was 11.0%, its total capital ratio was 13.5% and its Tier 1 leverage ratio was 10.6%. In addition to the minimum common equity Tier 1 capital ratio, Tier 1 risk-based capital ratio and total risk-based capital ratio, the Company and the Bank have to maintain a capital conservation buffer consisting of additional common equity Tier 1 capital greater than 2.5% of risk-weighted assets above the required minimum levels in order to avoid limitations on paying dividends, repurchasing shares, and paying discretionary bonuses. Both the Company and the Bank had a capital conservation buffer that exceeded the required minimum levels at December 31, 2023 and 2022. Dividends. During the year ended December 31, 2023, the Company declared common stock cash dividends of $1.60 per share (28.5% of net income per common share) and paid common stock cash dividends of $1.60 per share. During the year ended December 31, 2022, the Company declared common stock cash dividends of $1.56 per share (25.9% of net income per common share) and paid common stock cash dividends of $1.52 per share. The Board of Directors meets regularly to consider the level and the timing of dividend payments. The $0.40 per share dividend declared but unpaid as of December 31, 2023, was paid to stockholders in January 2024. 49 Common Stock Repurchases and Issuances. The Company has been in various buy-back programs since May 1990. During the years ended December 31, 2023 and 2022, the Company repurchased 449,622 shares of its common stock at an average price of $51.38 per share and 1,043,804 shares of its common stock at an average price of $59.25 per share, respectively. During the years ended December 31, 2023 and 2022, the Company issued 22,762 shares of stock at an average price of $38.83 per share and 146,601 shares of stock at an average price of $42.69 per share, respectively, to cover stock option exercises. In December 2022, the Company’s Board of Directors authorized the purchase of up to one million shares of the Company’s outstanding common stock, under a program of open market purchases or privately negotiated transactions. As of December 31, 2023, a total of approximately 728,000 shares remained available in the Company’s stock repurchase authorization. Management has historically utilized stock buy-back programs from time to time as long as management believed that repurchasing the Company’s common stock would contribute to the overall growth of stockholder value. The number of shares that will be repurchased at any particular time and the prices that will be paid are subject to many factors, several of which are outside of the control of the Company. The primary factors typically include the number of shares available in the market from sellers at any given time, the market price of the stock and the projected impact on the Company’s earnings per share and capital. Non-GAAP Financial Measures This document contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United State (“GAAP”). These non-GAAP financial measures include the efficiency ratio excluding consulting expense and related contract termination liability and the tangible common equity to tangible assets ratio. We calculate the efficiency ratio excluding consulting expense and related contract termination liability by subtracting from the non- interest expense component of the ratio the consulting expense and contract termination fee we incurred during 2021 in connection with the evaluation of our core and ancillary software and information technology systems. We had no such expenses or fees during 2022 or 2023. Management believes the efficiency ratio calculated in this manner better reflects our core operating performance and makes this ratio more meaningful when comparing our operating results to different periods. In calculating the ratio of tangible common equity to tangible assets, we subtract period-end intangible assets from common equity and from total assets. Management believes that the presentation of this measure excluding the impact of intangible assets provides useful supplemental information that is helpful in understanding our financial condition and results of operations, as it provides a method to assess management’s success in utilizing our tangible capital as well as our capital strength. Management also believes that providing a measure that excludes balances of intangible assets, which are subjective components of valuation, facilitates the comparison of our performance with the performance of our peers. In addition, management believes that this is a standard financial measure used in the banking industry to evaluate performance. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Because not all companies use the same calculation of non-GAAP measures, this presentation may not be comparable to other similarly titled measures as calculated by other companies. Non-GAAP Reconciliation: Efficiency Ratio Excluding Consulting Expense and Related Contract Termination Liability Reported non-interest expense/ efficiency ratio Less: Impact of one-time consulting expense and related contract termination liability Core non-interest expense/ efficiency ratio $ $ 127,635 5,318 122,317 59.03 % 2.46 56.57 % There were no non-GAAP adjustments to the efficiency ratio for years other than 2021. Year Ended December 31, 2021 (Dollars in Thousands) 50 Non-GAAP Reconciliation: Ratio of Tangible Common Equity to Tangible Assets December 31, December 31, December 31, December 31, December 31, 2021 (Dollars In Thousands) 2022 2023 2019 2020 Common equity at period end Less: Intangible assets at period end Tangible common equity at period end (a) $ 571,829 10,527 $ 561,302 $ 533,087 10,813 $ 522,274 $ 616,752 6,081 $ 610,671 $ 629,741 6,944 $ 622,797 $ 603,066 8,098 $ 594,968 Total assets at period end Less: Intangible assets at period end Tangible assets at period end (b) $ 5,812,402 10,527 $ 5,801,875 $ 5,680,702 10,813 $ 5,669,889 $ 5,449,944 6,081 $ 5,443,863 $ 5,526,420 6,944 $ 5,519,476 $ 5,015,072 8,098 $ 5,006,974 Tangible common equity to tangible assets (a) / (b) 9.67 % 9.21 % 11.22 % 11.28 % 11.88 % 51 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Asset and Liability Management and Market Risk A principal operating objective of the Company is to produce stable earnings by achieving a favorable interest rate spread that can be sustained during fluctuations in prevailing interest rates. The Company has sought to reduce its exposure to adverse changes in interest rates by attempting to achieve a closer match between the periods in which its interest-bearing liabilities and interest-earning assets can be expected to reprice through the origination of adjustable-rate mortgages and loans with shorter terms to maturity and the purchase of other shorter term interest-earning assets. Our Risk When Interest Rates Change The rates of interest we earn on assets and pay on liabilities generally are established contractually for a period of time. Market interest rates change over time. Accordingly, our results of operations, like those of other financial institutions, are impacted by changes in interest rates and the interest rate sensitivity of our assets and liabilities. The risk associated with changes in interest rates and our ability to adapt to these changes is known as interest rate risk and is our most significant market risk. How We Measure the Risk to Us Associated with Interest Rate Changes In an attempt to manage our exposure to changes in interest rates and comply with applicable regulations, we monitor Great Southern’s interest rate risk. In monitoring interest rate risk, we regularly analyze and manage assets and liabilities based on their payment streams and interest rates, the timing of their maturities and their sensitivity to actual or potential changes in market interest rates. The ability to maximize net interest income is largely dependent upon the achievement of a positive interest rate spread that can be sustained despite fluctuations in prevailing interest rates. Interest rate sensitivity is a measure of the difference between amounts of interest-earning assets and interest-bearing liabilities which either reprice or mature within a given period of time. The difference, or the interest rate repricing “gap,” provides an indication of the extent to which an institution’s interest rate spread will be affected by changes in interest rates. A gap is considered positive when the amount of interest-rate sensitive assets exceeds the amount of interest- rate sensitive liabilities repricing during the same period, and is considered negative when the amount of interest-rate sensitive liabilities exceeds the amount of interest-rate sensitive assets during the same period. Generally, during a period of rising interest rates, a negative gap within shorter repricing periods would adversely affect net interest income, while a positive gap within shorter repricing periods would result in an increase in net interest income. During a period of falling interest rates, the opposite would be true. As of December 31, 2023, Great Southern’s interest rate risk models indicate that, generally, rising interest rates are expected to have a modestly positive impact on the Company’s net interest income within the next twelve months, while declining interest rates are expected to have a slightly negative impact on net interest income within the next twelve months. The negative impact of a falling Federal Funds rate and other market interest rates also falling could be more pronounced if we are not able to decrease non-maturity deposit rates accordingly. We model various interest rate scenarios for rising and falling rates, including both parallel and non-parallel shifts in rates. The results of our modeling indicate that net interest income is not likely to be significantly affected either positively or negatively in the first twelve months following relatively minor changes in interest rates because our portfolios are relatively well matched in a twelve-month horizon. In a situation where market interest rates increase significantly in a short period of time, our net interest margin increase may be more pronounced in the very near term (first one to three months), due to fairly rapid increases in SOFR interest rates (or their replacement rates) and “prime” interest rates. In a situation where market interest rates decrease significantly in a short period of time, as they did in March 2020, our net interest margin decrease may be more pronounced in the very near term (first one to three months), due to fairly rapid decreases in SOFR interest rates (or their replacement rates) and “prime” interest rates. In the subsequent months we would expect that net interest margin would stabilize and begin to improve, as renewal interest rates on maturing time deposits decrease compared to the then-current rates paid on those products. During 2020, we experienced some compression of our net interest margin percentage due to the Federal Fund rate being cut by a total of 2.25% from July 2019 through March 2020. 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/SOFR interest rates decreased significantly in 2020 and remained very low in 2021 and into the first three months of 2022, putting pressure on loan yields, and strong pricing competition for loans and deposits remained in most of our markets. Since March 2022, market interest rates have increased fairly rapidly. This increased loan yields and expanded our net interest income and net interest margin in the latter half of 2022 and the first three months of 2023. While market interest rate increases are expected to 52 result in increases to loan yields, we expect that much of this benefit will be offset by increased funding costs, including changes in the funding mix, as experienced in the year ended December 31, 2023. As of December 31, 2023, time deposit maturities over the next 12 months are as follows: within three months -- $394 million with a weighted-average rate of 3.82%; within three to six months -- $324 million with a weighted-average rate of 4.32%; and within six to twelve months -- $371 million with a weighted-average rate of 4.08%. Based on time deposit market rates in January 2024, replacement rates for these maturing time deposits are likely to be approximately 4.00-4.50%. The current level and shape of the interest rate yield curve poses challenges for interest rate risk management. 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 change increases of 0.25% on eight additional occasions beginning December 14, 2016 and through December 31, 2018, with the Federal Funds rate reaching as high as 2.50%. After December 2018, the FRB paused its rate increases and, in July, September and October 2019, implemented rate decreases of 0.25% on each of those occasions. At December 31, 2019, the Federal Funds rate stood at 1.75%. In response to the COVID-19 pandemic, the FRB decreased interest rates on two occasions in March 2020, a 0.50% decrease on March 3 and a 1.00% decrease on March 16. At December 31, 2021, the Federal Funds rate was 0.25%. In 2022, the FRB implemented rate increases of 0.25%, 0.50%, 0.75%, 0.75%, 0.75%, 0.75% and 0.50% in March, May, June, July, September, November and December 2022, respectively. At December 31, 2022, the Federal Funds rate was 4.50%. In 2023, the FRB implemented rate increases of 0.25%, 0.25%, 0.25% and 0.25% in February, March, May and July 2023, respectively. At December 31, 2023 the Federal Funds rate was 5.50%. Financial markets now expect the possibility of significant further increases in Federal Funds interest rates in 2024 to be unlikely, with interest rate decisions being made at each FRB meeting based on economic data available at the time. However, the FRB has further indicated, and financial markets now have begun to price in, that it is likely that the Federal Funds interest rate will remain near this peak level for several months before any rate cuts occur. Great Southern’s loan portfolio includes loans ($1.29 billion at December 31, 2023) tied to various SOFR indices that will be subject to adjustment at least once within 90 days after December 31, 2023. These loans had interest rate floors at various rates. Great Southern also has a portfolio of loans ($788.9 million at December 31, 2023) tied to a “prime rate” of interest that will adjust immediately or within 90 days of a change to the “prime rate” of interest. These loans had interest rate floors at various rates. Great Southern also has a portfolio of loans ($6.7 million at December 31, 2023) tied to an AMERIBOR index that will adjust immediately or within 90 days of a change to the “prime rate” of interest. These loans had interest rate floors at various rates. At December 31, 2023, nearly all of these SOFR and “prime rate” loans had fully indexed rates that were at or above their floor rate and so are expected to move fully if there are future market interest rate increases. Interest rate risk exposure estimates (the sensitivity gap) are not exact measures of an institution’s actual interest rate risk. They are only indicators of interest rate risk exposure produced in a simplified modeling environment designed to allow management to gauge the Bank’s sensitivity to changes in interest rates. They do not necessarily indicate the impact of general interest rate movements on the Bank’s net interest income because the repricing of certain categories of assets and liabilities is subject to competitive and other factors beyond the Bank’s control. As a result, certain assets and liabilities indicated as maturing or otherwise repricing within a stated period may in fact mature or reprice at different times and in different amounts and cause a change, which potentially could be material, in the Bank’s interest rate risk. In order to minimize the potential for adverse effects of material and prolonged increases and decreases in interest rates on Great Southern’s results of operations, Great Southern has adopted asset and liability management policies to better match the maturities and repricing terms of Great Southern’s interest-earning assets and interest-bearing liabilities. Management recommends and the Board of Directors sets the asset and liability policies of Great Southern which are implemented by the Asset and Liability Committee. The Asset and Liability Committee is chaired by the Chief Financial Officer and is comprised of members of Great Southern’s senior management. The purpose of the Asset and Liability Committee is to communicate, coordinate and control asset/liability management consistent with Great Southern’s business plan and board-approved policies. The Asset and Liability Committee establishes and monitors the volume and mix of assets and funding sources taking into account relative costs and spreads, interest rate sensitivity and liquidity needs. The objectives are to manage assets and funding sources to produce results that are consistent with liquidity, capital adequacy, growth, risk and profitability goals. The Asset and Liability Committee meets on a monthly basis to review, among other things, economic conditions and interest rate outlook, current and projected liquidity needs and capital positions and anticipated changes in the volume and mix of assets and liabilities. At each meeting, the Asset and Liability Committee recommends appropriate strategy changes based on this review. The Chief Financial Officer or his designee is responsible for reviewing and reporting on the effects of the policy implementations and strategies to the Board of Directors at their monthly meetings. 53 In order to manage its assets and liabilities and achieve the desired liquidity, credit quality, interest rate risk, profitability and capital targets, Great Southern has focused its strategies on originating adjustable rate loans or loans with fixed rates that mature in less than five years, and managing its deposits and borrowings to establish stable relationships with both retail customers and wholesale funding sources. At times, depending on the level of general interest rates, the relationship between long- and short-term interest rates, market conditions and competitive factors, we may determine to increase our interest rate risk position somewhat in order to maintain or increase our net interest margin. The Asset and Liability Committee regularly reviews interest rate risk by forecasting the impact of alternative interest rate environments on net interest income and market value of portfolio equity, which is defined as the net present value of an institution’s existing assets, liabilities and off-balance sheet instruments, and evaluating such impacts against the maximum potential changes in net interest income and market value of portfolio equity that are authorized by the Board of Directors of Great Southern. In the normal course of business, the Company may use derivative financial instruments (primarily interest rate swaps) from time to time to assist in its interest rate risk management. In 2011, the Company began executing interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. Because the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. These interest rate derivatives result from a service provided to certain qualifying customers and, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. The Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions. In October 2018, the Company entered into an interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap was $400 million with a contractual termination date of October 6, 2025. Under the terms of the swap, the Company received a fixed rate of interest of 3.018% and paid a floating rate of interest equal to one-month USD-LIBOR (now SOFR). The floating rate reset monthly and net settlements of interest due to/from the counterparty also occurred monthly. Due to lower market interest rates, the Company received net interest settlements which were recorded as loan interest income. If USD-SOFR exceeded the fixed rate of interest, the Company was required to pay net settlements to the counterparty and record those net payments as a reduction of interest income on loans. The effective portion of the gain or loss on the derivative was reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affected earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. In March 2020, the Company and its swap counterparty mutually agreed to terminate the $400 million interest rate swap prior to its contractual maturity. The Company was paid $45.9 million from its swap counterparty as a result of this termination. In March 2022, the Company entered into another interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap is $300 million with an effective date of March 1, 2022 and a termination date of March 1, 2024. Under the terms of the swap, the Company received a fixed rate of interest of 1.6725% and paid a floating rate of interest equal to one-month USD-LIBOR (now SOFR). The floating rate reset monthly and net settlements of interest due to/from the counterparty also occurred monthly. The initial floating rate of interest was set at 0.24143%. The Company received net interest settlements, which were recorded as loan interest income, to the extent that the fixed rate of interest exceeded one-month USD-SOFR. If the USD-SOFR rate exceeded the fixed rate of interest (as it does currently), the Company paid net settlements to the counterparty and recorded those net payments as a reduction of interest income on loans. In July 2022, the Company entered into two interest rate swap transactions as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of each swap is $200 million with an effective date of May 1, 2023 and a termination date of May 1, 2028. Under the terms of one swap, beginning in May 2023, the Company receives a fixed rate of interest of 2.628% and pays a floating rate of interest equal to one-month USD-SOFR OIS. Under the terms of the other swap, beginning in May 2023, the Company receives a fixed rate of interest of 5.725% and pays a floating rate of interest equal to one-month USD- Prime. In each case, the floating rate resets monthly and net settlements of interest due to/from the counterparty also occur monthly. To the extent the fixed rate of interest exceeds the floating rate of interest, the Company receives net interest settlements, which are 54 recorded as loan interest income. If the floating rate of interest exceeds the fixed rate of interest (as it does currently), the Company pays net settlements to the counterparty and records those net payments as a reduction of interest income on loans. In February 2023, the Company entered into interest rate swap transactions as part of its ongoing interest rate management strategies to hedge the risk of certain of its fixed rate brokered deposits. The total notional amount of the swaps was $95 million with a termination date of February 28, 2025. Under the terms of the swaps, the Company received a fixed rate of interest of 4.65% and paid a floating rate of interest equal to USD-SOFR-COMPOUND plus a spread. The floating rate reset monthly and net settlements of interest due to/from the counterparty also occurred monthly. To the extent that the fixed rate of interest exceeded USD-SOFR- COMPOUND plus the spread, the Company received net interest settlements which were recorded as a reduction of deposit interest expense. If USD-SOFR-COMPOUND plus the spread exceeded the fixed rate of interest, the Company was required to pay net settlements to the counterparty and record those net payments as interest expense on deposits. In January 2024, the Company elected to terminate the swaps related to brokered deposits prior to their contractual termination date in 2025. The Company received a net settlement payment from the swap counterparty totaling $26,500 upon termination. At the time of the early termination, the Company had recorded a market value adjustment to the brokered deposit of $163,000, which will be amortized as a reduction of interest expense from January 2024 through February 2025. The Company’s interest rate derivatives and hedging activities are discussed further in Note 16 of the accompanying audited financial statements. 55 Federal Home Loan Bank stock and other interest earning assets Federal Home Loan Bank stock and other interest earning assets $ $ 26,313 26,313 6.39 % 6.39 % — — — — — — — — $ $ 26,313 26,313 $ $ 26,313 26,313 64.39 % 64.39 % $ $ 2,621,489 2,621,489 $ $ 396,652 396,652 $ $ 453,565 453,565 $ $ 384,530 384,530 $ $ 316,266 316,266 $ $ 938,653 938,653 $ $ 364,389 364,389 $ 5,475,544 $ 5,475,544 Financial Assets: Financial Assets: Interest bearing deposits Interest bearing deposits Weighted average rate Weighted average rate Available-for-sale debt securities(1) Available-for-sale debt securities(1) Weighted average rate Weighted average rate Held-to-maturity securities (2) Held-to-maturity securities (2) Weighted average rate Weighted average rate Adjustable rate loans Adjustable rate loans Weighted average rate Weighted average rate Fixed rate loans Fixed rate loans Weighted average rate Weighted average rate Weighted average rate Weighted average rate Total financial assets Total financial assets Financial Liabilities: Financial Liabilities: Time deposits Time deposits Weighted average rate Weighted average rate Brokered funds Brokered funds Weighted average rate Weighted average rate Interest-bearing demand Interest-bearing demand Weighted average rate Weighted average rate Weighted average rate Weighted average rate Weighted average rate Weighted average rate Subordinated notes Subordinated notes Weighted average rate Weighted average rate Subordinated debentures Subordinated debentures Weighted average rate Weighted average rate Total financial liabilities Total financial liabilities Periodic repricing GAP Periodic repricing GAP 2024 2024 2025 2025 2026 2026 2027 2027 2028 2028 2029-2038 2029-2038 Thereafter Thereafter Total Total Fair Value Fair Value (Dollars In Thousands) (Dollars In Thousands) December 31, December 31, December 31, December 31, 2023 2023 $ $ 108,804 108,804 $ $ 5.35 % 5.35 % 1,247 1,247 $ $ 5.87 % 5.87 % — — — — — — — — 7,053 7,053 $ $ 4.13 % 4.13 % $ $ — — — — — — — — 1.99 % 1.99 % 523 523 1.58 % 1.58 % — — — — — — — — — — $ $ 108,804 108,804 $ $ 108,804 108,804 — — 5.35 % 5.35 % 3,007 3,007 $ $ 19,909 19,909 $ $ 9,835 9,835 $ $ 196,806 196,806 $ $ 240,350 240,350 $ $ 478,207 478,207 $ $ 478,207 478,207 1.48 % 1.48 % 3.73 % 3.73 % 2.76 % 2.76 % 2.74 % 2.74 % 2.74 % 2.74 % $ $ 32,594 32,594 $ $ 73,839 73,839 $ $ 88,067 88,067 $ $ 195,023 195,023 $ $ 171,193 171,193 3.51 % 3.51 % 2.50 % 2.50 % 2.42 % 2.42 % 2.63 % 2.63 % $ $ 2,223,657 2,223,657 $ $ 42,062 42,062 $ $ 27,934 27,934 $ $ 63,170 63,170 $ $ 49,042 49,042 $ $ 444,081 444,081 $ 2,849,946 $ 2,849,946 $ 2,764,145 $ 2,764,145 8.00 % 8.00 % 3.93 % 3.93 % 3.33 % 3.33 % 3.79 % 3.79 % 3.99 % 3.99 % 3.72 % 3.72 % 7.06 % 7.06 % $ $ 261,468 261,468 $ $ 347,537 347,537 $ $ 422,101 422,101 $ $ 301,451 301,451 $ $ 224,795 224,795 $ $ 223,927 223,927 $ $ 35,972 35,972 $ 1,817,251 $ 1,817,251 $ 1,713,626 $ 1,713,626 5.00 % 5.00 % 4.83 % 4.83 % 4.54 % 4.54 % 4.63 % 4.63 % 5.12 % 5.12 % 4.04 % 4.04 % 4.53 % 4.53 % 4.69 % 4.69 % — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — $ $ 895,496 895,496 $ $ 895,496 895,496 $ $ 895,496 895,496 $ $ 948,202 948,202 $ $ 948,202 948,202 $ $ 661,528 661,528 $ $ 661,528 661,528 $ 2,216,482 $ 2,216,482 $ 2,216,482 $ 2,216,482 3.79 % 3.79 % 5.20 % 5.20 % 1.67 % 1.67 % — — 1.66 % 1.66 % 5.64 % 5.64 % 5.92 % 5.92 % 7.24 % 7.24 % $ $ 70,843 70,843 $ $ 70,843 70,843 $ $ 252,610 252,610 $ $ 252,610 252,610 $ $ 75,000 75,000 $ $ 71,625 71,625 $ $ 25,774 25,774 $ $ 25,774 25,774 $ $ 921,485 921,485 $ $ 19,250 19,250 $ $ 3,067 3,067 $ $ 2,394 2,394 $ $ 3.87 % 3.87 % 0.94 % 0.94 % 0.69 % 0.69 % 0.76 % 0.76 % 948 948 $ $ 0.68 % 0.68 % 1,058 1,058 1.51 % 1.51 % $ $ 466,781 466,781 $ $ 146,552 146,552 $ $ 48,195 48,195 5.42 % 5.42 % 4.59 % 4.59 % 4.90 % 4.90 % $ $ 2,216,482 2,216,482 1.67 % 1.67 % — — — — 1.66 % 1.66 % 5.64 % 5.64 % — — — — 7.24 % 7.24 % — — — — — — — — — — — — — — — — — — — — $ $ 75,000 75,000 5.92 % 5.92 % $ $ 25,774 25,774 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — $ $ 3,953,975 3,953,975 $ $ 240,802 240,802 $ $ 51,262 51,262 $ $ 2,394 2,394 $ $ 948 948 $ $ 1,058 1,058 $ $ 895,496 895,496 $ 5,145,935 $ 5,145,935 $ (1,332,486) $ (1,332,486) $ $ 155,850 155,850 $ $ 402,303 402,303 $ $ 382,136 382,136 $ $ 315,318 315,318 $ $ 937,595 937,595 $ $ (531,107) (531,107) $ $ 329,609 329,609 The following tables illustrate the expected maturities and repricing, respectively, of the Bank’s financial instruments at December 31, 2023. These schedules do not reflect the effects of possible prepayments or enforcement of due-on-sale clauses. The tables are based on information prepared in accordance with generally accepted accounting principles. Repricing Repricing Maturities Financial Assets: Interest bearing deposits Weighted average rate Available-for-sale debt securities (1) Weighted average rate Held-to-maturity securities (2) Weighted average rate Adjustable rate loans Weighted average rate Fixed rate loans Weighted average rate Federal Home Loan Bank stock and other interest earning assets Weighted average rate December 31, 2024 2025 2026 2027 2028 2029-2038 Thereafter Total (Dollars In Thousands) December 31, 2023 Fair Value $ 108,804 5.35 % 1,247 5.87 % — — 775,311 $ $ $ — — 7,053 $ 4.13 % — $ — $ 595,740 8.36 % 8.23 % 5.00 % $ 11,590 5.33 % 4.83 % — — — — 3,007 $ 1.99 % 523 1.58 % $ 8.18 % $ 4.54 % — — — — 19,909 $ 1.48 % $ — — 210,012 $ 8.02 % 4.63 % — — 32,594 — — 9,835 $ 3.73 % $ 3.51 % $ 8.07 % $ 5.12 % — — 56,111 — — 196,806 — — 240,350 $ $ $ 108,804 $ 108,804 5.35 % 478,207 $ 478,207 2.76 % 2.74 % 2.74 % 73,839 $ 88,067 $ 195,023 $ 171,193 2.50 % 2.42 % 2.63 % 194,308 $ 670,565 $ 2,849,946 $ 2,764,145 7.03 % 3.57 % 7.06 % 223,927 $ 35,972 $ 1,817,251 $ 1,713,626 4.04 % — — $ 4.53 % 4.69 % 14,723 $ 26,313 $ 26,313 7.23 % 6.39 % $ 261,468 $ 347,537 $ 422,101 301,451 $ 224,795 $ 347,899 Total financial assets $ 1,158,420 $ 950,330 $ 773,530 $ 531,372 $ 323,335 $ 688,880 $ 1,049,677 $ 5,475,544 921,485 $ 3.87 % 19,250 266,781 $ 296,552 5.28 % $ 2,216,482 $ $ Financial Liabilities: Time deposits Weighted average rate Brokered funds Weighted average rate Interest-bearing demand Weighted average rate Non-interest-bearing demand Weighted average rate Securities sold under reverse repurchase agreements Weighted average rate Short-term borrowings, overnight FHLB borrowings, and other liabilities $ Weighted average rate Subordinated notes Weighted average rate Subordinated debentures Weighted average rate $ $ 1.67 % 895,496 — 70,843 1.66 % 252,610 5.64 % — — — — $ 0.94 % $ 5.11 % — — — — — — — — — — — — 3,067 $ 0.69 % 98,195 5.25 % — — — — — — — — — — — — 2,394 $ 0.76 % — — — — — — — — — — — — — — $ 948 0.68 % — — — — — — — — — — — — — — $ 1,058 1.51 % — — — — — — — — — — 75,000 5.92 % — — $ — — — — — — — — — — — — — — 25,774 $ $ 948,202 $ 948,202 3.79 % 661,528 $ 661,528 5.20 % $ 2,216,482 $ 2,216,482 Non-interest-bearing demand (3) Non-interest-bearing demand (3) Weighted average rate Weighted average rate Securities sold under reverse repurchase agreements Securities sold under reverse repurchase agreements $ $ 70,843 70,843 Short-term borrowings, overnight FHLB borrowings, and other liabilities Short-term borrowings, overnight FHLB borrowings, and other liabilities $ $ 252,610 252,610 1.67 % 895,496 — 70,843 $ $ 1.66 % 252,610 5.64 % 75,000 $ $ 5.92 % 895,496 70,843 252,610 71,625 25,774 $ 25,774 Cumulative repricing GAP Cumulative repricing GAP $ $ $ $ $ 7.24 % 7.24 % $ (1,332,486) $ (1,332,486) $ (1,176,636) $ (1,176,636) $ $ (774,333) (774,333) $ (392,197) $ (392,197) $ $ (76,879) (76,879) $ $ 860,716 860,716 $ $ 329,609 329,609 Total financial liabilities $ 4,623,697 $ 315,802 $ 101,262 $ 2,394 $ 948 $ 76,058 $ 25,774 $ 5,145,935 (1) Available-for-sale debt securities include approximately $420.1 million of mortgage-backed securities and collateralized mortgage obligations which pay interest and principal monthly to the Company. This table does not show the effect of these monthly repayments of principal. (2) Held-to-maturity debt securities include approximately $188.8 million of mortgage-backed securities and collateralized mortgage obligations which pay interest and principal monthly to the Company. This table does not show the effect of these monthly repayments of principal. (1) Available-for-sale debt securities include approximately $420.1 million of mortgage-backed securities and collateralized (1) Available-for-sale debt securities include approximately $420.1 million of mortgage-backed securities and collateralized mortgage obligations which pay interest and principal monthly to the Company. This table does not show the effect of these mortgage obligations which pay interest and principal monthly to the Company. This table does not show the effect of these (2) Held-to-maturity debt securities include approximately $188.8 million of mortgage-backed securities and collateralized mortgage (2) Held-to-maturity debt securities include approximately $188.8 million of mortgage-backed securities and collateralized mortgage obligations which pay interest and principal monthly to the Company. This table does not show the effect of these monthly obligations which pay interest and principal monthly to the Company. This table does not show the effect of these monthly monthly repayments of principal. monthly repayments of principal. repayments of principal. repayments of principal. (3) Non-interest-bearing demand deposits are included in this table in the column labeled “Thereafter” since there is no interest rate (3) Non-interest-bearing demand deposits are included in this table in the column labeled “Thereafter” since there is no interest rate related to these liabilities and therefore there is nothing to reprice. related to these liabilities and therefore there is nothing to reprice. 56 57 57 Repricing Repricing Financial Assets: Financial Assets: Interest bearing deposits Interest bearing deposits Weighted average rate Weighted average rate Available-for-sale debt securities(1) Available-for-sale debt securities(1) Weighted average rate Weighted average rate Held-to-maturity securities (2) Held-to-maturity securities (2) Weighted average rate Weighted average rate Adjustable rate loans Adjustable rate loans Weighted average rate Weighted average rate Fixed rate loans Fixed rate loans Weighted average rate Weighted average rate Federal Home Loan Bank stock and other interest earning assets Federal Home Loan Bank stock and other interest earning assets Weighted average rate Weighted average rate December 31, December 31, 2024 2024 2025 2025 2026 2026 2027 2027 2028 2028 (Dollars In Thousands) (Dollars In Thousands) 2029-2038 2029-2038 Thereafter Thereafter Total Total December 31, December 31, 2023 2023 Fair Value Fair Value $ $ 108,804 108,804 $ $ $ $ $ $ 5.35 % 5.35 % 1,247 $ 1,247 $ 5.87 % 5.87 % — — — — 2,223,657 2,223,657 $ $ 8.00 % 8.00 % $ $ 5.00 % 5.00 % 261,468 261,468 $ $ 26,313 26,313 6.39 % 6.39 % — — — — 7,053 $ $ 7,053 4.13 % 4.13 % $ — — $ — — 42,062 42,062 $ $ 3.93 % 3.93 % 347,537 347,537 $ $ 4.83 % 4.83 % — — — — — — — — 3,007 3,007 1.99 % 1.99 % 523 523 1.58 % 1.58 % $ $ 27,934 27,934 $ $ 3.33 % 3.33 % 422,101 422,101 $ $ 4.54 % 4.54 % — — — — — — — — 19,909 19,909 $ $ 1.48 % 1.48 % $ $ — — — — 63,170 63,170 $ $ 3.79 % 3.79 % 301,451 301,451 $ $ 4.63 % 4.63 % — — — — 32,594 32,594 — — — — $ $ 9,835 9,835 3.73 % 3.73 % $ $ 3.51 % 3.51 % $ $ 3.99 % 3.99 % $ $ 5.12 % 5.12 % — — — — 49,042 49,042 224,795 224,795 — — — — 196,806 196,806 $ $ 2.76 % 2.76 % $ $ 2.50 % 2.50 % 73,839 73,839 444,081 444,081 223,927 223,927 3.72 % 3.72 % $ $ 4.04 % 4.04 % — — — — — — — — 240,350 240,350 88,067 88,067 $ 2.74 % 2.74 % $ 2.42 % 2.42 % — — — — 35,972 35,972 $ $ $ 478,207 108,804 $ 5.35 % $ 2.74 % $ 2.63 % 108,804 5.35 % 478,207 2.74 % 195,023 2.63 % $ 2,849,946 195,023 $ 2,849,946 $ $ $ $ 7.06 % 7.06 % 4.53 % 4.53 % — — $ — — $ 1,817,251 $ 1,817,251 4.69 % 4.69 % 26,313 26,313 $ 64.39 % 64.39 % $ $ 108,804 108,804 478,207 478,207 171,193 171,193 $ 2,764,145 $ 2,764,145 $ 1,713,626 $ 1,713,626 $ 2,216,482 $ 2,216,482 26,313 26,313 948,202 948,202 661,528 661,528 895,496 895,496 70,843 70,843 252,610 252,610 71,625 71,625 25,774 25,774 Total financial assets Total financial assets $ $ 2,621,489 2,621,489 $ $ 396,652 396,652 $ $ 453,565 453,565 $ $ 384,530 384,530 $ $ 316,266 316,266 $ $ 938,653 938,653 $ $ 364,389 364,389 $ 5,475,544 $ 5,475,544 Financial Liabilities: Financial Liabilities: Time deposits Time deposits Weighted average rate Weighted average rate Brokered funds Brokered funds Weighted average rate Weighted average rate Interest-bearing demand Interest-bearing demand Weighted average rate Weighted average rate Non-interest-bearing demand (3) Non-interest-bearing demand (3) Weighted average rate Weighted average rate Securities sold under reverse repurchase agreements Securities sold under reverse repurchase agreements Weighted average rate Weighted average rate Short-term borrowings, overnight FHLB borrowings, and other liabilities Short-term borrowings, overnight FHLB borrowings, and other liabilities Weighted average rate Weighted average rate Subordinated notes Subordinated notes Weighted average rate Weighted average rate Subordinated debentures Subordinated debentures Weighted average rate Weighted average rate Total financial liabilities Total financial liabilities $ $ $ $ $ $ $ $ $ $ 921,485 921,485 $ $ 3.87 % 3.87 % $ $ 5.42 % 5.42 % 466,781 466,781 $ $ 2,216,482 2,216,482 1.67 % 1.67 % — — — — 70,843 70,843 1.66 % 1.66 % 252,610 252,610 5.64 % 5.64 % — $ — $ — — 25,774 25,774 7.24 % 7.24 % 146,552 146,552 19,250 19,250 $ $ 0.94 % 0.94 % $ $ 4.59 % 4.59 % — — — — — — — — — — — — — — — — 75,000 75,000 5.92 % 5.92 % — — — — 3,067 3,067 0.69 % 0.69 % $ $ 48,195 48,195 4.90 % 4.90 % — — — — — — — — — — — — — — — — — — — — — — — — $ $ 2,394 2,394 0.76 % 0.76 % — — — — — — — — — — — — — — — — — — — — — — — — — — — — 948 $ $ 948 0.68 % 0.68 % — — — — — — — — — — — — — — — — — — — — — — — — — — — — $ $ 1,058 1,058 1.51 % 1.51 % — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 895,496 895,496 — — — — — — — — — — — — — — — — — — $ $ $ $ $ $ 2,216,482 $ $ 661,528 948,202 $ 3.79 % $ 5.20 % 948,202 3.79 % 661,528 5.20 % $ 2,216,482 1.67 % 895,496 895,496 — — 70,843 70,843 1.66 % 252,610 1.67 % $ 252,610 $ $ $ $ $ $ $ $ 1.66 % $ $ 5.64 % 5.64 % $ 75,000 $ 5.92 % 5.92 % 25,774 $ 7.24 % 7.24 % $ 25,774 75,000 $ $ $ $ Periodic repricing GAP Periodic repricing GAP Cumulative repricing GAP Cumulative repricing GAP $ $ 3,953,975 3,953,975 $ $ 240,802 240,802 $ $ 51,262 51,262 $ $ 2,394 2,394 $ $ 948 948 $ $ 1,058 1,058 $ $ 895,496 895,496 $ 5,145,935 $ 5,145,935 $ (1,332,486) $ (1,332,486) $ $ 155,850 155,850 $ $ 402,303 402,303 $ $ 382,136 382,136 $ $ 315,318 315,318 $ $ 937,595 937,595 $ $ (531,107) (531,107) $ $ 329,609 329,609 $ (1,332,486) $ (1,332,486) $ (1,176,636) $ (1,176,636) $ $ (774,333) (774,333) $ (392,197) $ (392,197) $ $ (76,879) (76,879) $ $ 860,716 860,716 $ $ 329,609 329,609 (1) Available-for-sale debt securities include approximately $420.1 million of mortgage-backed securities and collateralized (1) Available-for-sale debt securities include approximately $420.1 million of mortgage-backed securities and collateralized mortgage obligations which pay interest and principal monthly to the Company. This table does not show the effect of these mortgage obligations which pay interest and principal monthly to the Company. This table does not show the effect of these monthly repayments of principal. monthly repayments of principal. (2) Held-to-maturity debt securities include approximately $188.8 million of mortgage-backed securities and collateralized mortgage (2) Held-to-maturity debt securities include approximately $188.8 million of mortgage-backed securities and collateralized mortgage obligations which pay interest and principal monthly to the Company. This table does not show the effect of these monthly obligations which pay interest and principal monthly to the Company. This table does not show the effect of these monthly repayments of principal. repayments of principal. (3) Non-interest-bearing demand deposits are included in this table in the column labeled “Thereafter” since there is no interest rate (3) Non-interest-bearing demand deposits are included in this table in the column labeled “Thereafter” since there is no interest rate related to these liabilities and therefore there is nothing to reprice. related to these liabilities and therefore there is nothing to reprice. 57 5757 Great Southern Bancorp, Inc. Auditor’s Report and Consolidated Financial Statements December 31, 2023 and 2022 58 Great Southern Bancorp, Inc. Auditor’s Report and Consolidated Financial Statements December 31, 2023 and 2022 59 Stockholders, Board of Directors, and Audit Committee Great Southern Bancorp, Inc. Page 2 Critical Audit Matter The critical audit matter communicated below is a matter arising from the audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involves our especially challenging, subjective, or complex judgments. The communication of this critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Allowance for Credit Losses on Loans The Company’s loan portfolio totaled $4.7 billion as of December 31, 2023, and the allowance for credit losses (ACL) on loans was $64.7 million. The ACL on loans as defined by Topic 326 is an estimate of lifetime expected credit losses on loans. The ACL on loans is measured on a collective basis based on pools of loans with similar risk characteristics. Average historical loss rates over a defined lookback period are analyzed for the segmented loan pools, and adjusted for significant factors that, in management’s judgment, reflect the impact of any current conditions and reasonable and supportable forecasts. Qualitative factors such as changes in economic conditions, concentrations of risk, and changes in portfolio risk are considered in determining the adequacy of the level of the ACL on loans. The Company discloses that this determination involves a high degree of judgment and complexity and is inherently subjective. We identified the valuation of the ACL on loans as a critical audit matter. Auditing the ACL on loans involves a high degree of subjectivity in evaluating management’s estimates, such as evaluating management’s assessment of economic conditions and other qualitative or environmental factors, evaluating the adequacy of specifically identified losses on individually evaluated loans, and assessing the appropriateness of loan credit ratings. The primary procedures we performed to address this critical audit matter included:  Obtaining an understanding of the Company’s process for establishing the ACL on loans;      Testing the design and operating effectiveness of controls, including those related to technology, over the ACL on loans including data completeness and accuracy, classifications of loans by loan segment, verification of historical net loss data and calculated net loss rates, the establishment of qualitative adjustments, credit ratings, and risk classification of loans and establishment of specific reserves on individually evaluated loans, and management’s review and disclosure controls over the ACL on loans; Testing of completeness and accuracy of the information utilized in the ACL on loans; Testing the mathematical accuracy of the calculation of the ACL on loans; Evaluating the qualitative adjustments, including assessing the basis for the adjustments and the reasonableness of significant assumptions; Testing the loan review function and evaluating the accuracy of loan credit ratings; Report of Independent Registered Public Accounting Firm Stockholders, Board of Directors, and Audit Committee Great Southern Bancorp, Inc. Springfield, Missouri Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated statements of financial condition of Great Southern Bancorp, Inc. (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 11, 2024, expressed an unqualified opinion thereon. internal control over the Company’s (“PCAOB”), financial Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. 60 Stockholders, Board of Directors, and Audit Committee Great Southern Bancorp, Inc. Page 2 Critical Audit Matter The critical audit matter communicated below is a matter arising from the audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involves our especially challenging, subjective, or complex judgments. The communication of this critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Allowance for Credit Losses on Loans The Company’s loan portfolio totaled $4.7 billion as of December 31, 2023, and the allowance for credit losses (ACL) on loans was $64.7 million. The ACL on loans as defined by Topic 326 is an estimate of lifetime expected credit losses on loans. The ACL on loans is measured on a collective basis based on pools of loans with similar risk characteristics. Average historical loss rates over a defined lookback period are analyzed for the segmented loan pools, and adjusted for significant factors that, in management’s judgment, reflect the impact of any current conditions and reasonable and supportable forecasts. Qualitative factors such as changes in economic conditions, concentrations of risk, and changes in portfolio risk are considered in determining the adequacy of the level of the ACL on loans. The Company discloses that this determination involves a high degree of judgment and complexity and is inherently subjective. We identified the valuation of the ACL on loans as a critical audit matter. Auditing the ACL on loans involves a high degree of subjectivity in evaluating management’s estimates, such as evaluating management’s assessment of economic conditions and other qualitative or environmental factors, evaluating the adequacy of specifically identified losses on individually evaluated loans, and assessing the appropriateness of loan credit ratings. The primary procedures we performed to address this critical audit matter included:  Obtaining an understanding of the Company’s process for establishing the ACL on loans;      Testing the design and operating effectiveness of controls, including those related to technology, over the ACL on loans including data completeness and accuracy, classifications of loans by loan segment, verification of historical net loss data and calculated net loss rates, the establishment of qualitative adjustments, credit ratings, and risk classification of loans and establishment of specific reserves on individually evaluated loans, and management’s review and disclosure controls over the ACL on loans; Testing of completeness and accuracy of the information utilized in the ACL on loans; Testing the mathematical accuracy of the calculation of the ACL on loans; Evaluating the qualitative adjustments, including assessing the basis for the adjustments and the reasonableness of significant assumptions; Testing the loan review function and evaluating the accuracy of loan credit ratings; 61 Stockholders, Board of Directors, and Audit Committee Great Southern Bancorp, Inc. Page 3  Evaluating the reasonableness of specific allowances on individually evaluated loans;  Evaluating the overall reasonableness of assumptions used by management considering the past performance of the Company and evaluating trends identified within peer groups;  Evaluating the disclosures in the consolidated financial statements. FORVIS, LLP We have served as the Company’s auditor since 1975. Interest-bearing deposits in other financial institutions Interest-bearing deposits in other financial institutions 108,804 108,804 63,258 63,258 Springfield, Missouri March 11, 2024 Cash and cash equivalents Cash and cash equivalents 211,333 211,333 168,520 168,520 Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Consolidated Statements of Financial Condition Consolidated Statements of Financial Condition December 31, 2023 and 2022 December 31, 2023 and 2022 (In Thousands, Except Per Share Data) (In Thousands, Except Per Share Data) Assets Assets Cash Cash Available-for-sale securities Available-for-sale securities Held-to-maturity securities Held-to-maturity securities Mortgage loans held for sale Mortgage loans held for sale Interest receivable Interest receivable Prepaid expenses and other assets Prepaid expenses and other assets Other real estate owned and repossessions, net Other real estate owned and repossessions, net Premises and equipment, net Premises and equipment, net Goodwill and other intangible assets Goodwill and other intangible assets 2023 2023 2022 2022 $ $ 102,529 102,529 $ $ 105,262 105,262 478,207 478,207 490,592 490,592 195,023 195,023 202,495 202,495 5,849 5,849 4,811 4,811 21,206 21,206 19,107 19,107 106,225 106,225 69,461 69,461 23 23 233 233 138,591 138,591 141,070 141,070 10,527 10,527 10,813 10,813 Loans receivable, net of allowance for credit losses of $64,670 and $63,480 at Loans receivable, net of allowance for credit losses of $64,670 and $63,480 at December 31, 2023 and 2022, respectively December 31, 2023 and 2022, respectively 4,589,620 4,589,620 4,506,836 4,506,836 Federal Home Loan Bank stock and other interest earning assets Federal Home Loan Bank stock and other interest earning assets 26,313 26,313 30,814 30,814 Current and deferred income taxes Current and deferred income taxes 29,485 29,485 35,950 35,950 Total assets Total assets $ $ 5,812,402 5,812,402 $ $ 5,680,702 5,680,702 62 See Notes to Consolidated Financial Statements See Notes to Consolidated Financial Statements Stockholders, Board of Directors, and Audit Committee Great Southern Bancorp, Inc. Page 3  Evaluating the reasonableness of specific allowances on individually evaluated loans;  Evaluating the overall reasonableness of assumptions used by management considering the past performance of the Company and evaluating trends identified within peer groups;  Evaluating the disclosures in the consolidated financial statements. FORVIS, LLP Springfield, Missouri March 11, 2024 We have served as the Company’s auditor since 1975. Interest-bearing deposits in other financial institutions Interest-bearing deposits in other financial institutions 108,804 108,804 63,258 63,258 Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Consolidated Statements of Financial Condition Consolidated Statements of Financial Condition December 31, 2023 and 2022 December 31, 2023 and 2022 (In Thousands, Except Per Share Data) (In Thousands, Except Per Share Data) Assets Assets Cash Cash 2023 2023 2022 2022 $ $ 102,529 102,529 $ $ 105,262 105,262 Cash and cash equivalents Cash and cash equivalents 211,333 211,333 168,520 168,520 Available-for-sale securities Available-for-sale securities Held-to-maturity securities Held-to-maturity securities Mortgage loans held for sale Mortgage loans held for sale 478,207 478,207 490,592 490,592 195,023 195,023 202,495 202,495 5,849 5,849 4,811 4,811 Loans receivable, net of allowance for credit losses of $64,670 and $63,480 at Loans receivable, net of allowance for credit losses of $64,670 and $63,480 at December 31, 2023 and 2022, respectively December 31, 2023 and 2022, respectively 4,589,620 4,589,620 4,506,836 4,506,836 Interest receivable Interest receivable Prepaid expenses and other assets Prepaid expenses and other assets Other real estate owned and repossessions, net Other real estate owned and repossessions, net Premises and equipment, net Premises and equipment, net Goodwill and other intangible assets Goodwill and other intangible assets 21,206 21,206 19,107 19,107 106,225 106,225 69,461 69,461 23 23 233 233 138,591 138,591 141,070 141,070 10,527 10,527 10,813 10,813 Federal Home Loan Bank stock and other interest earning assets Federal Home Loan Bank stock and other interest earning assets 26,313 26,313 30,814 30,814 Current and deferred income taxes Current and deferred income taxes 29,485 29,485 35,950 35,950 Total assets Total assets $ $ 5,812,402 5,812,402 $ $ 5,680,702 5,680,702 See Notes to Consolidated Financial Statements See Notes to Consolidated Financial Statements 63 Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Consolidated Statements of Financial Condition Consolidated Statements of Financial Condition December 31, 2023 and 2022 December 31, 2023 and 2022 (In Thousands, Except Per Share Data) (In Thousands, Except Per Share Data) Great Southern Bancorp, Inc. Consolidated Statements of Income Years Ended December 31, 2023, 2022 and 2021 (In Thousands, Except Per Share Data) Liabilities and Stockholders’ Equity Liabilities and Stockholders’ Equity Liabilities Liabilities Deposits Deposits Securities sold under reverse repurchase agreements with customers Securities sold under reverse repurchase agreements with customers Short-term borrowings and other interest-bearing liabilities Short-term borrowings and other interest-bearing liabilities Subordinated debentures issued to capital trust Subordinated debentures issued to capital trust Subordinated notes Subordinated notes Accrued interest payable Accrued interest payable Advances from borrowers for taxes and insurance Advances from borrowers for taxes and insurance Accrued expenses and other liabilities Accrued expenses and other liabilities Liability of unfunded commitments Liability of unfunded commitments Total liabilities Total liabilities Commitments and Contingencies Commitments and Contingencies $ $ 2023 2023 2022 2022 $ $ 4,721,708 4,721,708 70,843 70,843 252,610 252,610 25,774 25,774 74,579 74,579 6,225 6,225 4,946 4,946 76,401 76,401 7,487 7,487 4,684,910 4,684,910 176,843 176,843 89,583 89,583 25,774 25,774 74,281 74,281 3,010 3,010 6,590 6,590 73,808 73,808 12,816 12,816 5,240,573 5,240,573 5,147,615 5,147,615 — — — — Stockholders’ Equity Stockholders’ Equity Capital stock Capital stock Serial preferred stock, $.01 par value; authorized 1,000,000 shares; Serial preferred stock, $.01 par value; authorized 1,000,000 shares; issued and outstanding 2023 and 2022 – -0- shares issued and outstanding 2023 and 2022 – -0- shares Common stock, $.01 par value; authorized 20,000,000 shares; Common stock, $.01 par value; authorized 20,000,000 shares; issued and outstanding 2023 – 11,804,430 shares, 2022 – 12,231,290 shares issued and outstanding 2023 – 11,804,430 shares, 2022 – 12,231,290 shares Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss), net of income taxes Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss), net of income taxes — — — — 118 118 44,320 44,320 569,872 569,872 122 122 42,445 42,445 543,875 543,875 of $(14,211) and $(17,948) at December 31, 2023 and 2022, respectively of $(14,211) and $(17,948) at December 31, 2023 and 2022, respectively (42,481) (42,481) (53,355) (53,355) Total stockholders’ equity Total stockholders’ equity 571,829 571,829 533,087 533,087 Total liabilities and stockholders’ equity Total liabilities and stockholders’ equity $ $ 5,812,402 5,812,402 $ $ 5,680,702 5,680,702 See Notes to Consolidated Financial Statements See Notes to Consolidated Financial Statements See Notes to Consolidated Financial Statements 64 Losses and Provision (Credit) for Unfunded Commitments 196,294 193,427 183,682 Interest Income Loans Investment securities and other Interest Expense Deposits Securities sold under reverse repurchase agreements Short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities Subordinated debentures issued to capital trust Subordinated notes Net Interest Income Provision (Credit) for Credit Losses on Loans Provision (Credit) for Unfunded Commitments Net Interest Income After Provision (Credit) for Credit Non-interest Income Commissions Overdraft and insufficient funds fees Point-of-sale and ATM fee income and service charges Net gain on loan sales Net realized loss on sales of available-for-sale securities Late charges and fees on loans Gain (loss) on derivative interest rate products Other income Non-interest Expense Salaries and employee benefits Net occupancy and equipment expense Postage Insurance Advertising Telephone Office supplies and printing Legal, audit and other professional fees Expense on other real estate and repossessions Acquired deposit intangible asset amortization Other operating expenses 2023 2022 2021 $ $ $ 205,751 21,226 226,977 186,269 12,404 198,673 271,952 24,883 296,835 88,757 1,205 7,500 1,736 4,422 103,620 193,215 2,250 (5,329) 1,153 7,617 14,346 2,354 — 786 (337) 4,154 30,073 78,521 30,834 3,590 4,542 3,396 1,057 2,730 7,086 311 286 8,670 141,023 20,676 324 1,066 875 4,422 27,363 199,614 3,000 3,187 1,208 7,872 15,705 2,584 (130) 1,182 321 5,399 34,141 75,300 28,471 3,379 3,197 3,261 867 3,170 6,330 359 768 8,264 133,366 13,102 37 — 448 7,165 20,752 177,921 (6,700) 939 1,263 6,686 15,029 9,463 — 1,434 312 4,130 38,317 70,290 29,163 3,164 3,061 3,072 848 3,458 6,555 627 863 6,534 127,635 Great Southern Bancorp, Inc. Consolidated Statements of Income Years Ended December 31, 2023, 2022 and 2021 (In Thousands, Except Per Share Data) Interest Income Loans Investment securities and other Interest Expense Deposits Securities sold under reverse repurchase agreements Short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities Subordinated debentures issued to capital trust Subordinated notes Net Interest Income Provision (Credit) for Credit Losses on Loans Provision (Credit) for Unfunded Commitments Net Interest Income After Provision (Credit) for Credit 2023 2022 2021 $ 271,952 24,883 296,835 88,757 1,205 7,500 1,736 4,422 103,620 193,215 2,250 (5,329) $ $ 205,751 21,226 226,977 186,269 12,404 198,673 20,676 324 1,066 875 4,422 27,363 199,614 3,000 3,187 13,102 37 — 448 7,165 20,752 177,921 (6,700) 939 Losses and Provision (Credit) for Unfunded Commitments 196,294 193,427 183,682 Non-interest Income Commissions Overdraft and insufficient funds fees Point-of-sale and ATM fee income and service charges Net gain on loan sales Net realized loss on sales of available-for-sale securities Late charges and fees on loans Gain (loss) on derivative interest rate products Other income Non-interest Expense Salaries and employee benefits Net occupancy and equipment expense Postage Insurance Advertising Office supplies and printing Telephone Legal, audit and other professional fees Expense on other real estate and repossessions Acquired deposit intangible asset amortization Other operating expenses 1,153 7,617 14,346 2,354 — 786 (337) 4,154 30,073 78,521 30,834 3,590 4,542 3,396 1,057 2,730 7,086 311 286 8,670 141,023 1,208 7,872 15,705 2,584 (130) 1,182 321 5,399 34,141 75,300 28,471 3,379 3,197 3,261 867 3,170 6,330 359 768 8,264 133,366 1,263 6,686 15,029 9,463 — 1,434 312 4,130 38,317 70,290 29,163 3,164 3,061 3,072 848 3,458 6,555 627 863 6,534 127,635 See Notes to Consolidated Financial Statements 65 Great Southern Bancorp, Inc. Consolidated Statements of Income Years Ended December 31, 2023, 2022 and 2021 (In Thousands, Except Per Share Data) Great Southern Bancorp, Inc. Consolidated Statements of Comprehensive Income Years Ended December 31, 2023, 2022 and 2021 (In Thousands) Income Before Income Taxes $ 85,344 $ 94,202 $ 94,364 Net Income $ 67,800 $ 75,948 $ 74,627 2023 2022 2021 2023 2022 2021 Provision for Income Taxes 17,544 18,254 19,737 Net Income Earnings Per Common Share Basic Diluted $ $ $ 67,800 $ 75,948 $ 74,627 5.65 $ 6.07 $ 5.61 $ 6.02 $ 5.50 5.46 Unrealized appreciation (depreciation) on available-for- sale securities, net of taxes (credit) of $2,199, $(18,106) and $(4,171) for 2023, 2022 and 2021, respectively Unrealized loss (gain) on securities transferred to held- to-maturity, net of taxes (credit) of $(45), $29 and $-0- for 2023, 2022 and 2021, respectively Less: reclassification adjustment for loss included in net income, net of taxes (credit) of $-0-, $32 and $-0- for 2023, 2022 and 2021, respectively Amortization of realized gain on termination of cash flow hedge, net of taxes (credit) of $(1,855), $(1,852) and $(1,852), for 2023, 2022, and 2021, respectively Change in value of active cash flow hedges, net of taxes (credit) of $3,441, $(7,695) and $-0- for 2023, 2022 and 2021, respectively 6,738 (56,448) (14,121) (138) — 89 98 — — (6,267) (6,271) (6,271) 10,541 (23,582) — Other comprehensive income (loss) 10,874 (86,114) (20,392) Comprehensive Income (Loss) $ 78,674 $ (10,166) $ 54,235 See Notes to Consolidated Financial Statements See Notes to Consolidated Financial Statements 66 Great Southern Bancorp, Inc. Consolidated Statements of Comprehensive Income Years Ended December 31, 2023, 2022 and 2021 (In Thousands) Net Income $ 67,800 $ 75,948 $ 74,627 2023 2022 2021 Unrealized appreciation (depreciation) on available-for- sale securities, net of taxes (credit) of $2,199, $(18,106) and $(4,171) for 2023, 2022 and 2021, respectively Unrealized loss (gain) on securities transferred to held- to-maturity, net of taxes (credit) of $(45), $29 and $-0- for 2023, 2022 and 2021, respectively Less: reclassification adjustment for loss included in net income, net of taxes (credit) of $-0-, $32 and $-0- for 2023, 2022 and 2021, respectively Amortization of realized gain on termination of cash flow hedge, net of taxes (credit) of $(1,855), $(1,852) and $(1,852), for 2023, 2022, and 2021, respectively Change in value of active cash flow hedges, net of taxes (credit) of $3,441, $(7,695) and $-0- for 2023, 2022 and 2021, respectively 6,738 (56,448) (14,121) (138) — 89 98 — — (6,267) (6,271) (6,271) 10,541 (23,582) — Other comprehensive income (loss) 10,874 (86,114) (20,392) Comprehensive Income (Loss) $ 78,674 $ (10,166) $ 54,235 See Notes to Consolidated Financial Statements 67 Great Southern Bancorp, Inc. Consolidated Statements of Stockholders’ Equity Years Ended December 31, 2023, 2022 and 2021 (In Thousands, Except Per Share Data) Common Stock Balance, January 1, 2021 $ Net income Stock issued under Stock Option Plan Common dividends declared, $1.40 per share Impact of ASU 2016-13 adoption Purchase of the Company’s common stock Other comprehensive loss Reclassification of treasury stock per Maryland law Balance, December 31, 2021 Net income Stock issued under Stock Option Plan Common dividends declared, $1.56 per share Purchase of the Company’s common stock Other comprehensive loss Reclassification of treasury stock per Maryland law Balance, December 31, 2022 Net income Stock issued under Stock Option Plan Common dividends declared, $1.60 per share Purchase of the Company’s common stock Other comprehensive income Reclassification of treasury stock per Maryland law Balance, December 31, 2023 $ 138 — — — — — — (7) 131 — — — — — (9) 122 — — — — — (4) 118 See Notes to Consolidated Financial Statements 68 Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total $ 35,004 $ $ 53,151 $ $ 629,741 — 3,310 — — — — — — — — — — — — — 38,314 — 4,131 42,445 — 1,875 541,448 74,627 — (18,851) (14,175) — — (37,501) 545,548 75,948 (19,347) — — — (58,274) 543,875 67,800 (19,111) — — — (22,692) (20,392) 32,759 (86,114) (53,355) — — — — — — — — — — — — — — — — 10,874 1,615 — — — — — (39,123) 37,508 — — 3,564 — (61,847) — 58,283 — — 630 — (23,326) — 22,696 74,627 4,925 (18,851) (14,175) (39,123) (20,392) — 616,752 75,948 7,695 (19,347) (61,847) (86,114) — 533,087 67,800 2,505 (19,111) (23,326) 10,874 — $ 44,320 $ 569,872 $ (42,481) $ — $ 571,829 Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total $ $ $ 35,004 — 3,310 — — — — — 38,314 — 4,131 — — — — 42,445 — 1,875 — — — — 541,448 74,627 — (18,851) (14,175) — — (37,501) 545,548 75,948 — (19,347) — — (58,274) 543,875 67,800 — (19,111) — — (22,692) $ 53,151 — — — — — (20,392) — 32,759 — — — — (86,114) — (53,355) — — — — 10,874 — $ — — 1,615 — — (39,123) — 37,508 — — 3,564 — (61,847) — 58,283 — — 630 — (23,326) — 22,696 629,741 74,627 4,925 (18,851) (14,175) (39,123) (20,392) — 616,752 75,948 7,695 (19,347) (61,847) (86,114) — 533,087 67,800 2,505 (19,111) (23,326) 10,874 — $ 44,320 $ 569,872 $ (42,481) $ — $ 571,829 69 Great Southern Bancorp, Inc. Consolidated Statements of Cash Flows Years Ended December 31, 2023, 2022 and 2021 (In Thousands) Great Southern Bancorp, Inc. Consolidated Statements of Cash Flows Years Ended December 31, 2023, 2022 and 2021 (In Thousands) 2023 2022 2021 2023 2022 2021 Operating Activities Net income Proceeds from sales of loans held for sale Originations of loans held for sale Items not requiring (providing) cash Depreciation Amortization Compensation expense for stock option grants Provision (credit) for credit losses Provision (credit) for unfunded commitments Net gain on loan sales Net realized (gain) loss on available-for-sale securities Loss (gain) on sale of premises and equipment Loss (gain) on sale/write-down of other real estate and repossessions Accretion of deferred income, premiums, discounts and other Loss (gain) on derivative interest rate products Deferred income taxes Changes in Interest receivable Prepaid expenses and other assets Accrued expenses and other liabilities Income taxes refundable/payable $ 67,800 157,213 (155,995) $ 75,948 103,347 (95,007) $ 74,627 351,391 (332,289) 8,723 589 1,621 2,250 (5,329) (2,354) — 26 39 (13,774) 337 2,985 (2,099) (4,543) 23,470 (259) 8,498 1,179 1,437 3,000 3,187 (2,584) 130 (1,023) (126) (15,842) (321) 2,485 (8,402) 2,141 5,637 1,162 9,555 1,583 1,225 (6,700) 939 (9,463) — (1) (71) (18,385) (312) 3,712 2,088 20,146 (2,495) (1,808) Net cash provided by operating activities 80,700 84,846 93,742 Net cash provided by (used in) investing activities (88,208) (819,546) 181,947 4,501 (24,159) 3,151 Investing Activities Net change in loans Purchase of loans Purchase of premises and equipment Proceeds from sale of premises and equipment Proceeds from sale of other real estate and repossessions Proceeds from sale of available-for-sale securities Proceeds from repayments of held-to-maturity securities Proceeds from maturities, calls and repayments of available-for-sale securities Purchase of available-for-sale securities Investment in tax credit partnerships Redemption (purchase) of Federal Home Loan Bank stock and other interest-earning assets Financing Activities Net increase (decrease) in certificates of deposit Net increase (decrease) in checking and savings accounts Net increase (decrease) in short-term borrowings and other interest-bearing liabilities Advances from (to) borrowers for taxes and insurance Redemption of subordinated notes Purchase of the company’s common stock Dividends paid Stock options exercised $ (79,096) $ $ (134,344) (361,817) (20,110) 3,980 2,351 18,375 23,821 51,348 (360,725) (18,266) 448,599 (152,797) (5,739) 586 2,230 72,149 (177,466) (8,766) — — 321,718 (188,909) 127,471 443 (61,847) (19,181) 6,258 (429,723) 464,921 (26,737) (1,389) (75,000) (39,123) (18,800) 3,700 (400) (7,300) 254 313 — 7,228 26,888 (5,436) (35,160) 26,806 9,856 57,027 (1,644) (23,326) (19,282) 884 50,321 42,813 — — Net cash provided by (used in) financing activities 185,953 (122,151) Increase (Decrease) in Cash and Cash Equivalents (548,747) 153,538 Cash and Cash Equivalents, Beginning of Year 168,520 717,267 563,729 Cash and Cash Equivalents, End of Year $ 211,333 $ 168,520 $ 717,267 See Notes to Consolidated Financial Statements See Notes to Consolidated Financial Statements 70 Great Southern Bancorp, Inc. Consolidated Statements of Cash Flows Years Ended December 31, 2023, 2022 and 2021 (In Thousands) Investing Activities Net change in loans Purchase of loans Purchase of premises and equipment Proceeds from sale of premises and equipment Proceeds from sale of other real estate and repossessions Proceeds from sale of available-for-sale securities Proceeds from repayments of held-to-maturity securities Proceeds from maturities, calls and repayments of available-for-sale securities Purchase of available-for-sale securities Investment in tax credit partnerships Redemption (purchase) of Federal Home Loan Bank stock and other interest-earning assets 2023 2022 2021 $ $ (79,096) (400) (7,300) 254 313 — 7,228 26,888 (5,436) (35,160) (134,344) (361,817) (20,110) 3,980 2,351 18,375 23,821 51,348 (360,725) (18,266) $ 448,599 (152,797) (5,739) 586 2,230 — — 72,149 (177,466) (8,766) 4,501 (24,159) 3,151 Net cash provided by (used in) investing activities (88,208) (819,546) 181,947 Financing Activities Net increase (decrease) in certificates of deposit Net increase (decrease) in checking and savings accounts Net increase (decrease) in short-term borrowings and other interest-bearing liabilities Advances from (to) borrowers for taxes and insurance Redemption of subordinated notes Purchase of the company’s common stock Dividends paid Stock options exercised 26,806 9,856 321,718 (188,909) 57,027 (1,644) — (23,326) (19,282) 884 127,471 443 — (61,847) (19,181) 6,258 (429,723) 464,921 (26,737) (1,389) (75,000) (39,123) (18,800) 3,700 Net cash provided by (used in) financing activities Increase (Decrease) in Cash and Cash Equivalents 50,321 42,813 185,953 (122,151) (548,747) 153,538 Cash and Cash Equivalents, Beginning of Year 168,520 717,267 563,729 Cash and Cash Equivalents, End of Year $ 211,333 $ 168,520 $ 717,267 See Notes to Consolidated Financial Statements 71 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Note 1: Nature of Operations and Summary of Significant Accounting Policies Securities Nature of Operations and Operating Segments Great Southern Bancorp, Inc. (“GSBC” or the “Company”) operates as a one-bank holding company. GSBC’s business primarily consists of the operations of Great Southern Bank (the “Bank”), which provides a full range of financial services to customers primarily located in Missouri, Iowa, Kansas, Minnesota, Nebraska and Arkansas. The Bank also originates commercial loans from lending offices in Atlanta; Charlotte, North Carolina; Chicago; Dallas; Denver; Omaha, Nebraska; Phoenix; and Tulsa, Oklahoma. The Company and the Bank are subject to regulation by certain federal and state agencies and undergo periodic examinations by those regulatory agencies. The Company’s banking operation is its only reportable segment. The banking operation is principally engaged in the business of originating residential and commercial real estate loans, construction loans, commercial business loans and consumer loans and funding these loans by attracting deposits from the general public, accepting brokered deposits and borrowing from the Federal Home Loan Bank and others. The operating results of this segment are regularly reviewed by management to make decisions about resource allocations and to assess performance. Selected information is not presented separately for the Company’s reportable segment, as there is no material difference between that information and the corresponding information in the consolidated financial statements. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses and the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans and fair values of financial instruments. In connection with the determination of the allowance for credit losses and the valuation of foreclosed assets held for sale, management obtains independent appraisals for significant properties. In addition, the Company considers that the determination of the carrying value of goodwill and intangible assets involves a high degree of judgment and complexity. Principles of Consolidation The consolidated financial statements include the accounts of Great Southern Bancorp, Inc., its wholly owned subsidiary, the Bank, and the Bank’s wholly owned subsidiaries, Great Southern Real Estate Development Corporation, GSB One LLC (including its wholly owned subsidiary, GSB Two LLC), Great Southern Financial Corporation, Great Southern Community Development Company, LLC (including its wholly owned subsidiary, Great Southern CDE, LLC), GS, LLC, GSSC, LLC, GSTC Investments, LLC, GS-RE Holding, LLC (including its wholly owned subsidiary, GS RE Management, LLC), GS-RE Holding II, LLC, GS-RE Holding III, LLC, VFP Conclusion Holding, LLC and VFP Conclusion Holding II, LLC. All significant intercompany accounts and transactions have been eliminated in consolidation. Federal Home Loan Bank Stock Federal Home Loan Bank common stock is a required investment for institutions that are members of the Federal Home Loan Bank system. The required investment in common stock is based on a predetermined formula, carried at cost and evaluated for impairment. 72 Available-for-sale securities, which include any security for which the Company has no immediate plan to sell but which may be sold in the future, are carried at fair value. Unrealized gains and losses are recorded, net of related income tax effects, in other comprehensive income. Held-to-maturity securities, which include any security for which the Company has the positive intent and ability to hold until maturity, are carried at historical cost adjusted for amortization of premiums and accretion of discounts. Amortization of premiums and accretion of discounts are recorded as interest income from securities. Realized gains and losses are recorded as net security gains (losses). Gains and losses on sales of securities are determined on the specific-identification method. The Company evaluates all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326, Measurement of Credit Losses on Financial Instruments. The Company’s consolidated statements of income reflect the full impairment (that is, the difference between the security’s amortized cost basis and fair value) on debt securities that the Company intends to sell or would more likely than not be required to sell before the expected recovery of the amortized cost basis. For available-for-sale and held-to-maturity debt securities that management has no intent to sell and believes that it more likely than not will not be required to sell prior to recovery, only the credit loss component of the impairment is recognized in earnings, while the noncredit loss is recognized in accumulated other comprehensive income for available-for-sale securities. The credit loss component recognized in earnings through a provision for credit loss is identified as the amount of principal cash flows not expected to be received over the remaining term of the security based on cash flow projections. Mortgage Loans Held for Sale Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or fair value in the aggregate. Write-downs to fair value are recognized as a charge to earnings at the time the decline in value occurs. Nonbinding forward commitments to sell individual mortgage loans are generally obtained to reduce market risk on mortgage loans in the process of origination and mortgage loans held for sale. Gains and losses resulting from sales of mortgage loans are recognized when the respective loans are sold to investors. Fees received from borrowers to guarantee the funding of mortgage loans held for sale and fees paid to investors to ensure the ultimate sale of such mortgage loans are recognized as income or expense when the loans are sold or when it becomes evident that the commitment will not be used. Loans Originated by the Company Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding principal balances adjusted for any charge-offs, the allowance for credit losses, any deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans. Interest income is reported on the interest method and includes amortization of net deferred loan fees and costs over the loan term. Past due status is based on the contractual terms of a loan. Generally, loans are placed on nonaccrual status at 90 days past due and interest is considered a loss, unless the loan is well secured and in the process of collection. Payments received on nonaccrual loans are applied to principal until the loans are returned to accrual status. Loans are returned to accrual status when all payments contractually due are brought current, payment performance is sustained for a period of time, generally six months, and future payments are reasonably assured. With the exception of consumer loans, charge-offs on loans are recorded when available information indicates a loan is not fully collectible and the loss is reasonably quantifiable. Consumer loans are charged-off at specified delinquency dates consistent with regulatory guidelines. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Securities Available-for-sale securities, which include any security for which the Company has no immediate plan to sell but which may be sold in the future, are carried at fair value. Unrealized gains and losses are recorded, net of related income tax effects, in other comprehensive income. Held-to-maturity securities, which include any security for which the Company has the positive intent and ability to hold until maturity, are carried at historical cost adjusted for amortization of premiums and accretion of discounts. Amortization of premiums and accretion of discounts are recorded as interest income from securities. Realized gains and losses are recorded as net security gains (losses). Gains and losses on sales of securities are determined on the specific-identification method. The Company evaluates all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326, Measurement of Credit Losses on Financial Instruments. The Company’s consolidated statements of income reflect the full impairment (that is, the difference between the security’s amortized cost basis and fair value) on debt securities that the Company intends to sell or would more likely than not be required to sell before the expected recovery of the amortized cost basis. For available-for-sale and held-to-maturity debt securities that management has no intent to sell and believes that it more likely than not will not be required to sell prior to recovery, only the credit loss component of the impairment is recognized in earnings, while the noncredit loss is recognized in accumulated other comprehensive income for available-for-sale securities. The credit loss component recognized in earnings through a provision for credit loss is identified as the amount of principal cash flows not expected to be received over the remaining term of the security based on cash flow projections. Mortgage Loans Held for Sale Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or fair value in the aggregate. Write-downs to fair value are recognized as a charge to earnings at the time the decline in value occurs. Nonbinding forward commitments to sell individual mortgage loans are generally obtained to reduce market risk on mortgage loans in the process of origination and mortgage loans held for sale. Gains and losses resulting from sales of mortgage loans are recognized when the respective loans are sold to investors. Fees received from borrowers to guarantee the funding of mortgage loans held for sale and fees paid to investors to ensure the ultimate sale of such mortgage loans are recognized as income or expense when the loans are sold or when it becomes evident that the commitment will not be used. Loans Originated by the Company Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding principal balances adjusted for any charge-offs, the allowance for credit losses, any deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans. Interest income is reported on the interest method and includes amortization of net deferred loan fees and costs over the loan term. Past due status is based on the contractual terms of a loan. Generally, loans are placed on nonaccrual status at 90 days past due and interest is considered a loss, unless the loan is well secured and in the process of collection. Payments received on nonaccrual loans are applied to principal until the loans are returned to accrual status. Loans are returned to accrual status when all payments contractually due are brought current, payment performance is sustained for a period of time, generally six months, and future payments are reasonably assured. With the exception of consumer loans, charge-offs on loans are recorded when available information indicates a loan is not fully collectible and the loss is reasonably quantifiable. Consumer loans are charged-off at specified delinquency dates consistent with regulatory guidelines. 73 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Allowance for Credit Losses The allowance for credit losses is measured using an average historical loss model that incorporates relevant information about past events (including historical credit loss experience on loans with similar risk characteristics), current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the loans. The allowance for credit losses is measured on a collective (pool) basis. Loans are aggregated into pools based on similar risk characteristics, including borrower type, collateral and repayment types and expected credit loss patterns. Loans that do not share similar risk characteristics, primarily classified loans with a balance greater than or equal to $100,000, are evaluated on an individual basis. For loans evaluated for credit losses on a collective basis, average historical loss rates are calculated for each pool using the Company’s historical net charge-offs (combined charge-offs and recoveries by observable historical reporting period) and outstanding loan balances during a lookback period. Lookback periods can be different based on the individual pool and represent management’s credit expectations for the pool of loans over the remaining contractual life. In certain loan pools, if the Company’s own historical loss rate is not reflective of the loss expectations, the historical loss rate is augmented by industry and peer data. The calculated average net charge-off rate is then adjusted for current conditions and reasonable and supportable forecasts. These adjustments increase or decrease the average historical loss rate to reflect expectations of future losses given economic forecasts of key macroeconomic variables including, but not limited to, unemployment rate, gross domestic product (“GDP”), commercial real estate price index, consumer sentiment and construction spending. The adjustments are based on results from various regression models projecting the impact of the macroeconomic variables to loss rates. The forecast is used for a reasonable and supportable period before reverting to historical averages. The forecast-adjusted loss rate is applied to the principal balance over the remaining contractual lives, adjusted for expected prepayments. The contractual term excludes expected extensions, renewals and modifications. Additionally, the allowance for credit losses considers other qualitative factors not included in historical loss rates or macroeconomic forecasts such as changes in portfolio composition, underwriting practices, or significant unique events or conditions. In addition, ASU 2016-13 requires an allowance for off balance sheet credit exposures: unfunded lines of credit, undisbursed portions of loans, written residential and commercial commitments, and letters of credit. To determine the amount needed for allowance purposes, a utilization rate is determined either by the model or internally for each pool. Our loss model calculates the reserve on unfunded commitments based upon the utilization rate multiplied by the average loss rate factors in each pool with unfunded and committed balances. The liability for unfunded lending commitments utilizes the same model as the allowance for credit losses on loans; however, the liability for unfunded lending commitments incorporates assumptions for the portion of unfunded commitments that are expected to be funded. Loans Acquired in Business Combinations Loans acquired in business combinations under ASC Topic 805, Business Combinations, required the use of the acquisition method of accounting. Therefore, such loans were initially recorded at fair value in accordance with the fair value methodology prescribed in ASC Topic 820, Fair Value Measurements and Disclosures. The Company’s historical acquisitions all occurred under previous US GAAP prior to the Company’s adoption of ASU 2016-13. No allowance for credit losses related to the acquired loans was recorded on the acquisition date as the fair value of the loans acquired incorporates assumptions regarding credit risk. Loans acquired are recorded at fair value in accordance with the fair value methodology prescribed in ASC Topic 820. The fair value estimates associated with the loans include estimates related to expected prepayments and the amount and timing of undiscounted expected principal, interest and other cash flows. For acquired loans not acquired in conjunction with an FDIC-assisted transaction that were not considered to be purchased credit-impaired loans, the Company evaluated those loans acquired in accordance with the provisions of ASC Topic 310-20, Nonrefundable Fees and Other Costs. The fair value discount on these loans is accreted into interest income over the weighted average life of the loans using a constant yield method. These loans are not 74 considered impaired loans. The Company’s historical acquisitions all occurred under previous US GAAP prior to the Company’s adoption of ASU 2016-13. The Company evaluated purchased credit-impaired loans in accordance with the provisions of ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. Loans acquired in business combinations with evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected were considered to be credit impaired. Evidence of credit quality deterioration as of the purchase dates may include information such as past-due and nonaccrual status, borrower credit scores and recent loan to value percentages. Acquired credit-impaired loans that are accounted for under the accounting guidance for loans acquired with deteriorated credit quality are initially measured at fair value, which includes estimated future credit losses expected to be incurred over the life of the loans. At the date of CECL adoption, the Company did not reassess whether purchased credit impaired (PCI) loans met the criteria of purchased with credit deterioration (PCD) loans. The Company evaluated all of its loans acquired in conjunction with its FDIC-assisted transactions in accordance with the provisions of ASC Topic 310-30. For purposes of applying ASC 310-30, loans acquired in FDIC-assisted business combinations are aggregated into pools of loans with common risk characteristics. All loans acquired in the FDIC transactions, both covered and not covered by loss sharing agreements, were deemed to be purchased credit-impaired loans as there is general evidence of credit deterioration since origination in the pools and there is some probability that not all contractually required payments will be collected. As a result, related discounts are recognized subsequently through accretion based on changes in the expected cash flows of these acquired loans. Prior to the adoption of ASU 2016-13, the expected cash flows of the acquired loan pools in excess of the fair values recorded, referred to as the accretable yield, was recognized in interest income over the remaining estimated lives of the loan pools for impaired loans accounted for under ASC Topic 310-30. Subsequent to acquisition date, the Company estimated cash flows expected to be collected on pools of loans sharing common risk characteristics, which are treated in the aggregate when applying various valuation techniques. Increases in the Company’s cash flow expectations have been recognized as increases to the accretable yield while decreases have been recognized as impairments through the allowance for credit losses. Other Real Estate Owned and Repossessions Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less estimated cost to sell at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less estimated cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net expense on foreclosed assets. Other real estate owned also includes bank premises formerly, but no longer, used for banking activities, as well as property originally acquired for future expansion but no longer intended to be used for that purpose. Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation. Depreciation is charged to expense using the straight-line and accelerated methods over the estimated useful lives of the assets. Leasehold improvements are capitalized and amortized using the straight-line and accelerated methods over the terms of the respective leases or the estimated useful lives of the improvements, whichever is shorter. Material lease obligations consist of leases for various loan offices and banking centers. All of our leases are classified as operating leases (as they were prior to January 1, 2019), and therefore were previously not recognized on the Company’s consolidated statements of financial condition. With the adoption of ASU 2016-02, these operating leases are now included as a right of use asset in the premises and equipment line item on the Company’s consolidated statements of financial condition. The corresponding lease liability is included in the accrued expenses and other liabilities line item on the Company’s consolidated statements of financial condition. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 considered impaired loans. The Company’s historical acquisitions all occurred under previous US GAAP prior to the Company’s adoption of ASU 2016-13. The Company evaluated purchased credit-impaired loans in accordance with the provisions of ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. Loans acquired in business combinations with evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected were considered to be credit impaired. Evidence of credit quality deterioration as of the purchase dates may include information such as past-due and nonaccrual status, borrower credit scores and recent loan to value percentages. Acquired credit-impaired loans that are accounted for under the accounting guidance for loans acquired with deteriorated credit quality are initially measured at fair value, which includes estimated future credit losses expected to be incurred over the life of the loans. At the date of CECL adoption, the Company did not reassess whether purchased credit impaired (PCI) loans met the criteria of purchased with credit deterioration (PCD) loans. The Company evaluated all of its loans acquired in conjunction with its FDIC-assisted transactions in accordance with the provisions of ASC Topic 310-30. For purposes of applying ASC 310-30, loans acquired in FDIC-assisted business combinations are aggregated into pools of loans with common risk characteristics. All loans acquired in the FDIC transactions, both covered and not covered by loss sharing agreements, were deemed to be purchased credit-impaired loans as there is general evidence of credit deterioration since origination in the pools and there is some probability that not all contractually required payments will be collected. As a result, related discounts are recognized subsequently through accretion based on changes in the expected cash flows of these acquired loans. Prior to the adoption of ASU 2016-13, the expected cash flows of the acquired loan pools in excess of the fair values recorded, referred to as the accretable yield, was recognized in interest income over the remaining estimated lives of the loan pools for impaired loans accounted for under ASC Topic 310-30. Subsequent to acquisition date, the Company estimated cash flows expected to be collected on pools of loans sharing common risk characteristics, which are treated in the aggregate when applying various valuation techniques. Increases in the Company’s cash flow expectations have been recognized as increases to the accretable yield while decreases have been recognized as impairments through the allowance for credit losses. Other Real Estate Owned and Repossessions Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less estimated cost to sell at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less estimated cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net expense on foreclosed assets. Other real estate owned also includes bank premises formerly, but no longer, used for banking activities, as well as property originally acquired for future expansion but no longer intended to be used for that purpose. Premises and Equipment Premises and equipment are stated at cost less accumulated depreciation. Depreciation is charged to expense using the straight-line and accelerated methods over the estimated useful lives of the assets. Leasehold improvements are capitalized and amortized using the straight-line and accelerated methods over the terms of the respective leases or the estimated useful lives of the improvements, whichever is shorter. Material lease obligations consist of leases for various loan offices and banking centers. All of our leases are classified as operating leases (as they were prior to January 1, 2019), and therefore were previously not recognized on the Company’s consolidated statements of financial condition. With the adoption of ASU 2016-02, these operating leases are now included as a right of use asset in the premises and equipment line item on the Company’s consolidated statements of financial condition. The corresponding lease liability is included in the accrued expenses and other liabilities line item on the Company’s consolidated statements of financial condition. 75 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 The calculated amounts of the right of use assets and lease liabilities are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew for an extended term in the calculation of the right of use asset and lease liability. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right of use asset and lease liability. Regarding the discount rate, the Company uses the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception over a similar term. The discount rate utilized is the FHLBank borrowing rate for the term corresponding to the expected term of the lease. Long-Lived Asset Impairment The Company evaluates the recoverability of the carrying value of long-lived assets whenever events or circumstances indicate the carrying amount may not be recoverable. If a long-lived asset is tested for recoverability and the undiscounted estimated future cash flows expected to result from the use and eventual disposition of the asset is less than the carrying amount of the asset, the asset cost is adjusted to fair value and an impairment loss is recognized as the amount by which the carrying amount of a long-lived asset exceeds its fair value. No material asset impairment was recognized during the years ended December 31, 2023, 2022 and 2021. Goodwill and Intangible Assets Goodwill is evaluated annually for impairment or more frequently if impairment indicators are present. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount and an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company still may perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Deposit intangible assets are amortized on the straight-line basis generally over a period of seven years. Arena naming rights intangible assets are being amortized on the straight-line basis generally over a period of fifteen years. Such assets are periodically evaluated as to the recoverability of their carrying value. A summary of goodwill and intangible assets is as follows: December 31, 2023 2022 (In Thousands) $ 5,396 $ 5,396 — 5,131 5,131 53 5,364 5,417 $ 10,527 $ 10,813 Goodwill – Branch acquisitions Deposit intangibles Fifth Third Bank (January 2016) Arena Naming Rights (April 2022) 76 Loan Servicing and Origination Fee Income Loan servicing income represents fees earned for servicing real estate mortgage loans owned by various investors. The fees are generally calculated on the outstanding principal balances of the loans serviced and are recorded as income when earned. Loan origination fees, net of direct loan origination costs, are recognized as income using the level-yield method over the contractual life of the loan. The Company is incorporated in the State of Maryland. Under Maryland law, there is no concept of “Treasury Shares.” Instead, shares purchased by the Company constitute authorized but unissued shares under Maryland law. Accounting principles generally accepted in the United States of America state that accounting for treasury stock shall conform to state law. The cost of shares purchased by the Company has been allocated to common Stockholders’ Equity stock and retained earnings balances. Earnings Per Common Share Basic earnings per common share are computed based on the weighted average number of common shares outstanding during each year. Diluted earnings per common share are computed using the weighted average common shares and all potential dilutive common shares outstanding during the year. Earnings per common share (EPS) were computed as follows: 2023 2022 2021 (In Thousands, Except Per Share Data) Net income and net income available to common shareholders $ 67,800 $ 75,948 $ 74,627 Average common shares outstanding 11,992 12,516 13,558 Average common share stock options outstanding 88 91 116 Average diluted common shares 12,080 12,607 13,674 Earnings per common share – basic Earnings per common share – diluted $ $ 5.65 5.61 $ $ 6.07 6.02 $ $ 5.50 5.46 Options outstanding at December 31, 2023, 2022 and 2021, to purchase 749,833, 559,484 and 383,338 shares of common stock, respectively, were not included in the computation of diluted earnings per common share for each of the years because the exercise prices of such options were greater than the average market prices of the common stock for the years ended December 31, 2023, 2022 and 2021, respectively. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Loan Servicing and Origination Fee Income Loan servicing income represents fees earned for servicing real estate mortgage loans owned by various investors. The fees are generally calculated on the outstanding principal balances of the loans serviced and are recorded as income when earned. Loan origination fees, net of direct loan origination costs, are recognized as income using the level-yield method over the contractual life of the loan. Stockholders’ Equity The Company is incorporated in the State of Maryland. Under Maryland law, there is no concept of “Treasury Shares.” Instead, shares purchased by the Company constitute authorized but unissued shares under Maryland law. Accounting principles generally accepted in the United States of America state that accounting for treasury stock shall conform to state law. The cost of shares purchased by the Company has been allocated to common stock and retained earnings balances. Earnings Per Common Share Basic earnings per common share are computed based on the weighted average number of common shares outstanding during each year. Diluted earnings per common share are computed using the weighted average common shares and all potential dilutive common shares outstanding during the year. Earnings per common share (EPS) were computed as follows: 2021 2022 2023 (In Thousands, Except Per Share Data) Net income and net income available to common shareholders $ 67,800 $ 75,948 $ 74,627 Average common shares outstanding 11,992 12,516 13,558 Average common share stock options outstanding 88 91 116 Average diluted common shares 12,080 12,607 13,674 Earnings per common share – basic Earnings per common share – diluted $ $ 5.65 5.61 $ $ 6.07 6.02 $ $ 5.50 5.46 Options outstanding at December 31, 2023, 2022 and 2021, to purchase 749,833, 559,484 and 383,338 shares of common stock, respectively, were not included in the computation of diluted earnings per common share for each of the years because the exercise prices of such options were greater than the average market prices of the common stock for the years ended December 31, 2023, 2022 and 2021, respectively. 77 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Stock Compensation Plans The Company has stock-based employee compensation plans, which are described more fully in Note 20. In accordance with FASB ASC 718, Compensation – Stock Compensation, compensation cost related to share-based payment transactions is recognized in the Company’s consolidated financial statements based on the grant-date fair value of the award using the modified prospective transition method. For the years ended December 31, 2023, 2022 and 2021, share-based compensation expense totaling $1.6 million, $1.4 million and $1.2 million, respectively, was included in salaries and employee benefits expense in the consolidated statements of income. Cash Equivalents The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. At December 31, 2023 and 2022, cash equivalents consisted of interest-bearing deposits in other financial institutions. At December 31, 2023, nearly all of the interest-bearing deposits were uninsured and held at the Federal Home Loan Bank or the Federal Reserve Bank. Income Taxes The Company accounts for income taxes in accordance with income tax accounting guidance (FASB ASC 740, Income Taxes). The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term “more likely than not” means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to management’s judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized. At December 31, 2023 and 2022, no valuation allowance was established. The Company recognizes interest and penalties on income taxes as a component of income tax expense. The Company files consolidated income tax returns with its subsidiaries. Derivatives and Hedging Activities FASB ASC 815, Derivatives and Hedging, provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how the entity accounts for derivative instruments and related hedged items and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. For detailed disclosures on derivatives and hedging activities, see Note 16. 78 As required by FASB ASC 815, the Company records all derivatives in the statement of financial condition at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Recent Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides relief for companies preparing for discontinuation of interest rates such as the London Interbank Offered Rate (“LIBOR”). LIBOR is a benchmark interest rate referenced in a variety of agreements that are used by numerous entities. After 2021, certain LIBOR rates may no longer be published. As a result, LIBOR is expected to be discontinued as a reference rate. Other interest rates used globally could also be discontinued for similar reasons. ASU 2020-04 provides optional expedients and exceptions to contracts, hedging relationships and other transactions affected by reference rate reform. The main provisions for contract modifications include optional relief by allowing the modification as a continuation of the existing contract without additional analysis and other optional expedients regarding embedded features. Optional expedients for hedge accounting permit changes to critical terms of hedging relationships and to the designated benchmark interest rate in a fair value hedge and also provide relief for assessing hedge effectiveness for cash flow hedges. ASU 2020-04 was effective upon issuance; however, the guidance was originally only available generally through December 31, 2022. Based upon amendments provided in ASU 2022-06 discussed below, provisions of ASU 2020-04 can now generally be applied through December 31, 2024. The application of ASU 2020-04 has not had, and is not expected to have, a material impact on the Company’s consolidated financial statements. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope. ASU 2021-01 clarifies that certain optional expedients and exceptions in ASC 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU 2021-01 also amends the expedients and exceptions in ASC 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. ASU 2021-01 was effective upon issuance; however, the guidance was originally only available generally through December 31, 2022. Based upon amendments provided in ASU 2022-06 discussed below, provisions of ASU 2021-01 can now generally be applied through December 31, 2024. ASU 2021-01 has not had, and is not expected to have, a material impact on the Company’s consolidated financial statements. In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method. ASU 2022-01 further clarifies certain targeted improvements to the optional hedge accounting model that were made under ASU 2017-12. ASU 2022-01 expands the last-of-layer method and renames this method to portfolio layer method to reflect this expansion, as well as expanding the scope of the portfolio layer method to include nonprepayable financial assets. It also specifies eligible hedging instruments and provides additional guidance on the accounting for and disclosure of hedge basis adjustments that are applicable to the portfolio layer method. ASU 2022-01 permits an entity to apply the same portfolio hedging method to both prepayable and nonprepayable financial assets, thereby allowing consistent accounting for similar hedges. ASU 2022-01 became effective for the Company on January 1, 2023. The adoption of ASU 2022-01 did not have a material impact on the Company’s consolidated financial statements. In March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 eliminates the troubled debt restructuring recognition and measurement guidance and, instead, requires that an entity evaluate whether a loan modification represents a new loan or a continuation of an existing loan. It also enhances existing disclosure requirements and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU 2022-02 became effective for the Company on January 1, 2023. The adoption of ASU 2022-02 did not have a material impact on the Company’s consolidated financial statements. The adoption of this ASU does, however, require changes in disclosures related to certain loan modifications. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 As required by FASB ASC 815, the Company records all derivatives in the statement of financial condition at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Recent Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides relief for companies preparing for discontinuation of interest rates such as the London Interbank Offered Rate (“LIBOR”). LIBOR is a benchmark interest rate referenced in a variety of agreements that are used by numerous entities. After 2021, certain LIBOR rates may no longer be published. As a result, LIBOR is expected to be discontinued as a reference rate. Other interest rates used globally could also be discontinued for similar reasons. ASU 2020-04 provides optional expedients and exceptions to contracts, hedging relationships and other transactions affected by reference rate reform. The main provisions for contract modifications include optional relief by allowing the modification as a continuation of the existing contract without additional analysis and other optional expedients regarding embedded features. Optional expedients for hedge accounting permit changes to critical terms of hedging relationships and to the designated benchmark interest rate in a fair value hedge and also provide relief for assessing hedge effectiveness for cash flow hedges. ASU 2020-04 was effective upon issuance; however, the guidance was originally only available generally through December 31, 2022. Based upon amendments provided in ASU 2022-06 discussed below, provisions of ASU 2020-04 can now generally be applied through December 31, 2024. The application of ASU 2020-04 has not had, and is not expected to have, a material impact on the Company’s consolidated financial statements. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope. ASU 2021-01 clarifies that certain optional expedients and exceptions in ASC 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU 2021-01 also amends the expedients and exceptions in ASC 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. ASU 2021-01 was effective upon issuance; however, the guidance was originally only available generally through December 31, 2022. Based upon amendments provided in ASU 2022-06 discussed below, provisions of ASU 2021-01 can now generally be applied through December 31, 2024. ASU 2021-01 has not had, and is not expected to have, a material impact on the Company’s consolidated financial statements. In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method. ASU 2022-01 further clarifies certain targeted improvements to the optional hedge accounting model that were made under ASU 2017-12. ASU 2022-01 expands the last-of-layer method and renames this method to portfolio layer method to reflect this expansion, as well as expanding the scope of the portfolio layer method to include nonprepayable financial assets. It also specifies eligible hedging instruments and provides additional guidance on the accounting for and disclosure of hedge basis adjustments that are applicable to the portfolio layer method. ASU 2022-01 permits an entity to apply the same portfolio hedging method to both prepayable and nonprepayable financial assets, thereby allowing consistent accounting for similar hedges. ASU 2022-01 became effective for the Company on January 1, 2023. The adoption of ASU 2022-01 did not have a material impact on the Company’s consolidated financial statements. In March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 eliminates the troubled debt restructuring recognition and measurement guidance and, instead, requires that an entity evaluate whether a loan modification represents a new loan or a continuation of an existing loan. It also enhances existing disclosure requirements and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU 2022-02 became effective for the Company on January 1, 2023. The adoption of ASU 2022-02 did not have a material impact on the Company’s consolidated financial statements. The adoption of this ASU does, however, require changes in disclosures related to certain loan modifications. 79 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. ASU 2022-06 extends the period of time entities can utilize the reference rate reform relief guidance provided by ASU 2020-04 and ASU 2021-01, which are discussed above. ASU 2022-06 was effective upon issuance and defers the sunset date of this prior guidance to December 31, 2024, after which entities will no longer be permitted to apply the relief guidance in Topic 848. ASU 2022-06 has not had, and is not expected to have, a material impact on the Company’s consolidated financial statements. In March 2023, the FASB issued ASU 2023-02, Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method. ASU 2023-02 is intended to improve the accounting and disclosures for investments in tax credit structures. ASU 2023-02 allows entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. Previously, this method was only available for qualifying tax equity investments in low-income housing tax credit structures. Currently, the Company does not have a material amount of tax credit structures, other than low-income housing tax credit structures. ASU 2023-02 became effective for the Company on January 1, 2024. The early adoption of ASU 2023-02 did not have a material impact on the Company’s consolidated financial statements. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 expands reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. ASU 2023-07 implements a new requirement to disclose significant segment expenses regularly provided to the chief operating decision maker, expands certain annual disclosures to interim periods, clarifies that single reportable segment entities must apply Topic 280 in its entirety and permits more than one measure of segment profit or loss to be reported under certain conditions. ASU 2023-07 is effective for the Company for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the requirements of the expanded segment disclosures but does not currently expect the additional disclosures to have a material impact on the Company’s consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 is focused on additional income tax disclosures and requires public business entities, on an annual basis, to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income by the applicable statutory income tax rate). ASU 2023-09 is effective for the Company for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2024, with early adoption permitted. While the Company is currently assessing the impact applying this standard will have on its income tax disclosures, the adoption of ASU 2023-09 is currently not expected to have a material impact on the Company’s consolidated financial statements. Correction of an Immaterial Error in Prior Period Financial Statements Certain prior period amounts in the Consolidated Statements of Cash Flows have been corrected as discussed below. No other financial statements or notes thereto were impacted by these corrections. The Company has corrected its 2022 and 2021 Consolidated Statements of Cash Flows presentation for an error in classification within the operating activities section of the statements of cash flows regarding amortization of terminated hedging transactions and for an error in classification regarding investments in tax credit partnerships between the operating activities and investing activities sections of the statements of cash flows. For the item related to the terminated hedging transactions, the Company is now including the amortization from accumulated other comprehensive income and related deferred taxes recognized in interest income as an item not providing cash in accretion of deferred income, premiums, discounts and other. This was previously included in net changes in prepaid expenses and other assets. For the item related to investments in tax credit partnerships, the 80 Company is now including the amounts invested as an item using cash in the investing activities section. This was previously included in net changes in prepaid expenses and other assets in the operating activities section. The Company assessed the materiality of this change in presentation on prior period consolidated financial statements in accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” (ASC Topic 250, Accounting Changes and Error Corrections). Based on this assessment, the Company concluded that these error corrections in its statements of cash flows are not material to any previously presented financial statements. The corrections had no impact on the Consolidated Statements of Financial Condition, Consolidated Statements of Income, Consolidated Statements of Comprehensive Income or Consolidated Statements of Stockholders’ Equity, or notes to these financial statements, for any previously presented interim or annual financial statements. Accordingly, the Company corrected the previously reported immaterial errors for the years ended December 31, 2022 and 2021. A summary of corrections reflecting the prior period impacts to the Company’s Consolidated Statements of Cash Flows are shown below (in thousands of dollars): For the Year Ended December 31, 2022 As Previously Presented Net Change As Corrected $ (7,719) $ (8,123) $ (24,248) 66,580 26,389 18,266 (15,842) 2,141 84,846 — (801,280) (18,266) (18,266) (18,266) (819,546) For the Year Ended December 31, 2021 As Previously Presented Net Change As Corrected $ (10,262) $ (8,123) $ 3,257 84,976 — 190,713 16,889 8,766 (8,766) (8,766) (18,385) 20,146 93,742 (8,766) 181,947 Operating Activities Accretion of deferred income, premiums, discounts and other Prepaid expenses and other assets Net cash provided by operating activities Investing Activities Investment in tax credit partnerships Net cash used in investing activities Operating Activities Accretion of deferred income, premiums, discounts and other Prepaid expenses and other assets Net cash provided by operating activities Investing Activities Investment in tax credit partnerships Net cash provided by investing activities Reclassifications presentation. Prior period consolidated financial statements are reclassified whenever necessary to conform to the current period Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Company is now including the amounts invested as an item using cash in the investing activities section. This was previously included in net changes in prepaid expenses and other assets in the operating activities section. The Company assessed the materiality of this change in presentation on prior period consolidated financial statements in accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” (ASC Topic 250, Accounting Changes and Error Corrections). Based on this assessment, the Company concluded that these error corrections in its statements of cash flows are not material to any previously presented financial statements. The corrections had no impact on the Consolidated Statements of Financial Condition, Consolidated Statements of Income, Consolidated Statements of Comprehensive Income or Consolidated Statements of Stockholders’ Equity, or notes to these financial statements, for any previously presented interim or annual financial statements. Accordingly, the Company corrected the previously reported immaterial errors for the years ended December 31, 2022 and 2021. A summary of corrections reflecting the prior period impacts to the Company’s Consolidated Statements of Cash Flows are shown below (in thousands of dollars): Operating Activities Accretion of deferred income, premiums, discounts and other Prepaid expenses and other assets Net cash provided by operating activities Investing Activities Investment in tax credit partnerships Net cash used in investing activities Operating Activities Accretion of deferred income, premiums, discounts and other Prepaid expenses and other assets Net cash provided by operating activities Investing Activities For the Year Ended December 31, 2022 As Previously Presented Net Change As Corrected $ $ (7,719) (24,248) 66,580 $ (8,123) 26,389 18,266 (15,842) 2,141 84,846 — (801,280) (18,266) (18,266) (18,266) (819,546) For the Year Ended December 31, 2021 As Previously Presented Net Change As Corrected $ $ (10,262) 3,257 84,976 $ (8,123) 16,889 8,766 (18,385) 20,146 93,742 Investment in tax credit partnerships Net cash provided by investing activities — 190,713 (8,766) (8,766) (8,766) 181,947 Reclassifications Prior period consolidated financial statements are reclassified whenever necessary to conform to the current period presentation. 81 Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 December 31, 2023, 2022 and 2021 Note 2: Investments in Securities Note 2: Investments in Securities Held-to-maturity securities (“HTM”), which include any security for which the Company has both the positive intent Held-to-maturity securities (“HTM”), which include any security for which the Company has both the positive intent and ability to hold until maturity, are carried at historical cost adjusted for amortization of premiums and accretion of and ability to hold until maturity, are carried at historical cost adjusted for amortization of premiums and accretion of discounts. Premiums and discounts are amortized and accreted, respectively, to interest income over the security’s discounts. Premiums and discounts are amortized and accreted, respectively, to interest income over the security’s estimated life. Prepayments are anticipated for certain mortgage-backed securities. Premiums on callable securities are estimated life. Prepayments are anticipated for certain mortgage-backed securities. Premiums on callable securities are amortized to their earliest call date. amortized to their earliest call date. Available-for-sale securities (“AFS”), which include any security for which the Company has no immediate plan to Available-for-sale securities (“AFS”), which include any security for which the Company has no immediate plan to sell but which may be sold in the future, are carried at fair value. Realized gains and losses, based on specifically sell but which may be sold in the future, are carried at fair value. Realized gains and losses, based on specifically identified amortized cost of the individual security, are included in non-interest income. Unrealized gains and losses identified amortized cost of the individual security, are included in non-interest income. Unrealized gains and losses are recorded, net of related income tax effects, in stockholders’ equity. Premiums and discounts are amortized and are recorded, net of related income tax effects, in stockholders’ equity. Premiums and discounts are amortized and accreted, respectively, to interest income over the estimated life of the security. Prepayments are anticipated for certain accreted, respectively, to interest income over the estimated life of the security. Prepayments are anticipated for certain mortgage-backed and Small Business Administration (SBA) securities. Premiums on callable securities are amortized mortgage-backed and Small Business Administration (SBA) securities. Premiums on callable securities are amortized to their earliest call date. to their earliest call date. During the three months ended March 31, 2022, the Company transferred, at fair value, $226.5 million of During the three months ended March 31, 2022, the Company transferred, at fair value, $226.5 million of securities from the available-for-sale portfolio to the held-to-maturity portfolio. The related net unrealized gross securities from the available-for-sale portfolio to the held-to-maturity portfolio. The related net unrealized gross gains were $1.0 million; $775,000 (net of income taxes) remained in accumulated other comprehensive income gains were $1.0 million; $775,000 (net of income taxes) remained in accumulated other comprehensive income are being amortized over the remaining life of the securities. No gains or losses on these securities were are being amortized over the remaining life of the securities. No gains or losses on these securities were recognized at the time of transfer. As of December 31, 2023, the net unrealized gross losses remaining were recognized at the time of transfer. As of December 31, 2023, the net unrealized gross losses remaining were $65,000; net of income taxes, these unrealized losses were $49,000. $65,000; net of income taxes, these unrealized losses were $49,000. The amortized cost and fair values of securities were as follows: The amortized cost and fair values of securities were as follows: Amortized Cost Amortized Cost December 31, 2023 December 31, 2023 Gross Gross Unrealized Unrealized Gains Gains Gross Gross Unrealized Unrealized Losses Losses (In Thousands) (In Thousands) Fair Fair Value Value AVAILABLE-FOR-SALE SECURITIES: AVAILABLE-FOR-SALE SECURITIES: Agency mortgage-backed securities Agency mortgage-backed securities Agency collateralized mortgage obligations Agency collateralized mortgage obligations States and political subdivisions securities States and political subdivisions securities Small Business Administration securities Small Business Administration securities $ $ 316,114 316,114 85,989 85,989 59,141 59,141 70,648 70,648 $ $ 7 7 — — 527 527 — — $ $ 35,890 35,890 10,043 10,043 1,531 1,531 6,755 6,755 $ $ 280,231 280,231 75,946 75,946 58,137 58,137 63,893 63,893 $ $ 531,892 531,892 $ $ 534 534 $ $ 54,219 54,219 $ $ 478,207 478,207 Amortized Cost Amortized Cost Fair Value Fair Value Adjustment Adjustment December 31, 2023 December 31, 2023 Gross Gross Unrealized Unrealized Gains Gains Amortized Amortized Cost Cost (In Thousands) (In Thousands) Gross Gross Unrealized Unrealized Losses Losses Fair Fair Value Value HELD-TO-MATURITY SECURITIES: HELD-TO-MATURITY SECURITIES: Agency mortgage-backed securities Agency mortgage-backed securities Agency collateralized mortgage obligations Agency collateralized mortgage obligations States and political subdivisions securities States and political subdivisions securities $ 72,495 $ 72,495 116,405 116,405 6,188 6,188 $ $ 2,436 2,436 (2,502) (2,502) 1 1 $ 74,931 $ 74,931 113,903 113,903 6,189 6,189 $ $ — — — — — — $ 8,686 $ 8,686 14,662 14,662 482 482 $ 66,245 $ 66,245 99,241 99,241 5,707 5,707 $ 195,088 $ 195,088 $ $ (65) (65) $ 195,023 $ 195,023 $ $ $ 23,830 $ 23,830 $ 171,193 $ 171,193 82 December 31, 2022 December 31, 2022 Gross Gross Gross Gross Amortized Amortized Unrealized Unrealized Unrealized Unrealized Cost Cost Gains Gains Losses Losses Fair Fair Value Value (In Thousands) (In Thousands) AVAILABLE-FOR-SALE SECURITIES: AVAILABLE-FOR-SALE SECURITIES: Agency mortgage-backed securities Agency mortgage-backed securities $ $ 327,266 327,266 $ $ $ $ 40,784 40,784 $ $ 286,482 286,482 Agency collateralized mortgage obligations Agency collateralized mortgage obligations States and political subdivisions securities States and political subdivisions securities Small Business Administration securities Small Business Administration securities 90,205 90,205 60,667 60,667 75,076 75,076 — — — — 119 119 — — 11,731 11,731 3,291 3,291 6,935 6,935 78,474 78,474 57,495 57,495 68,141 68,141 $ $ 553,214 553,214 $ $ 119 119 $ $ 62,741 62,741 $ 490,592 $ 490,592 December 31, 2022 December 31, 2022 Gross Gross Gross Gross Amortized Amortized Fair Value Fair Value Amortized Unrealized Amortized Unrealized Unrealized Unrealized Cost Cost Adjustment Adjustment Cost Cost Gains Gains Losses Losses Fair Fair Value Value (In Thousands) (In Thousands) HELD-TO-MATURITY SECURITIES: HELD-TO-MATURITY SECURITIES: Agency mortgage-backed securities Agency mortgage-backed securities $ 73,891 $ 73,891 $ $ 3,015 3,015 $ 76,906 $ 76,906 $ $ Agency collateralized mortgage obligations 122,247 Agency collateralized mortgage obligations 122,247 States and political subdivisions securities States and political subdivisions securities 6,239 6,239 (2,885) 119,362 (2,885) 119,362 (12) (12) 6,227 6,227 — — — — — — $ 9,820 $ 9,820 $ 67,086 $ 67,086 14,129 14,129 105,233 105,233 781 781 5,446 5,446 $ 202,377 $ 202,377 $ $ 118 118 $ 202,495 $ 202,495 $ $ $ 24,730 $ 24,730 $ 177,765 $ 177,765 At December 31, 2023, the Company’s available-for-sale agency mortgage-backed securities portfolio consisted At December 31, 2023, the Company’s available-for-sale agency mortgage-backed securities portfolio consisted of FNMA securities totaling $190.9 million, FHLMC securities totaling $86.4 million and GNMA securities of FNMA securities totaling $190.9 million, FHLMC securities totaling $86.4 million and GNMA securities totaling $2.9 million. At December 31, 2022, available-for-sale agency mortgage-backed securities portfolio totaling $2.9 million. At December 31, 2022, available-for-sale agency mortgage-backed securities portfolio consisted of FNMA securities totaling $196.4 million, FHLMC securities totaling $90.1 million and GNMA consisted of FNMA securities totaling $196.4 million, FHLMC securities totaling $90.1 million and GNMA securities totaling $78.5 million. At December 31, 2023 and 2022, all of the Company’s agency mortgage-backed securities totaling $78.5 million. At December 31, 2023 and 2022, all of the Company’s agency mortgage-backed securities totaled $280.2 million and $286.5 million, respectively, and had fixed rates of interest. securities totaled $280.2 million and $286.5 million, respectively, and had fixed rates of interest. At December 31, 2023, the Company’s available-for-sale agency collateralized mortgage-backed securities At December 31, 2023, the Company’s available-for-sale agency collateralized mortgage-backed securities portfolio consisted of FNMA securities totaling $4.1 million, FHLMC securities totaling $66.5 million and portfolio consisted of FNMA securities totaling $4.1 million, FHLMC securities totaling $66.5 million and GNMA securities totaling $5.3 million. At December 31, 2022, available-for-sale agency collateralized mortgage- GNMA securities totaling $5.3 million. At December 31, 2022, available-for-sale agency collateralized mortgage- backed securities portfolio consisted of FNMA securities totaling $3.9 million, FHLMC securities totaling $67.8 backed securities portfolio consisted of FNMA securities totaling $3.9 million, FHLMC securities totaling $67.8 million and GNMA securities totaling $6.7 million. At December 31, 2023 and 2022, all of the Company’s million and GNMA securities totaling $6.7 million. At December 31, 2023 and 2022, all of the Company’s agency collateralized mortgage-backed securities totaled $75.9 million and $78.4 million, respectively, and had agency collateralized mortgage-backed securities totaled $75.9 million and $78.4 million, respectively, and had fixed rates of interest. fixed rates of interest. Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 December 31, 2023, 2022 and 2021 Amortized Cost Amortized Cost December 31, 2022 December 31, 2022 Gross Gross Unrealized Unrealized Gains Gains Gross Gross Unrealized Unrealized Losses Losses (In Thousands) (In Thousands) Fair Fair Value Value AVAILABLE-FOR-SALE SECURITIES: AVAILABLE-FOR-SALE SECURITIES: Agency mortgage-backed securities Agency mortgage-backed securities Agency collateralized mortgage obligations Agency collateralized mortgage obligations States and political subdivisions securities States and political subdivisions securities Small Business Administration securities Small Business Administration securities $ $ 327,266 327,266 90,205 90,205 60,667 60,667 75,076 75,076 $ $ $ $ — — — — 119 119 — — $ $ 40,784 40,784 11,731 11,731 3,291 3,291 6,935 6,935 286,482 286,482 78,474 78,474 57,495 57,495 68,141 68,141 $ $ 553,214 553,214 $ $ 119 119 $ $ 62,741 62,741 $ 490,592 $ 490,592 Amortized Cost Amortized Cost Fair Value Fair Value Adjustment Adjustment December 31, 2022 December 31, 2022 Gross Gross Amortized Unrealized Amortized Unrealized Cost Cost (In Thousands) (In Thousands) Gains Gains Gross Gross Unrealized Unrealized Losses Losses Fair Fair Value Value HELD-TO-MATURITY SECURITIES: HELD-TO-MATURITY SECURITIES: $ 73,891 $ 73,891 Agency mortgage-backed securities Agency mortgage-backed securities Agency collateralized mortgage obligations 122,247 Agency collateralized mortgage obligations 122,247 6,239 6,239 States and political subdivisions securities States and political subdivisions securities $ $ $ 76,906 $ 76,906 3,015 3,015 (2,885) 119,362 (2,885) 119,362 6,227 6,227 (12) (12) $ $ — — — — — — $ 9,820 $ 9,820 14,129 14,129 781 781 $ 67,086 $ 67,086 105,233 105,233 5,446 5,446 $ 202,377 $ 202,377 $ $ 118 118 $ 202,495 $ 202,495 $ $ $ 24,730 $ 24,730 $ 177,765 $ 177,765 At December 31, 2023, the Company’s available-for-sale agency mortgage-backed securities portfolio consisted At December 31, 2023, the Company’s available-for-sale agency mortgage-backed securities portfolio consisted of FNMA securities totaling $190.9 million, FHLMC securities totaling $86.4 million and GNMA securities of FNMA securities totaling $190.9 million, FHLMC securities totaling $86.4 million and GNMA securities totaling $2.9 million. At December 31, 2022, available-for-sale agency mortgage-backed securities portfolio totaling $2.9 million. At December 31, 2022, available-for-sale agency mortgage-backed securities portfolio consisted of FNMA securities totaling $196.4 million, FHLMC securities totaling $90.1 million and GNMA consisted of FNMA securities totaling $196.4 million, FHLMC securities totaling $90.1 million and GNMA securities totaling $78.5 million. At December 31, 2023 and 2022, all of the Company’s agency mortgage-backed securities totaling $78.5 million. At December 31, 2023 and 2022, all of the Company’s agency mortgage-backed securities totaled $280.2 million and $286.5 million, respectively, and had fixed rates of interest. securities totaled $280.2 million and $286.5 million, respectively, and had fixed rates of interest. At December 31, 2023, the Company’s available-for-sale agency collateralized mortgage-backed securities At December 31, 2023, the Company’s available-for-sale agency collateralized mortgage-backed securities portfolio consisted of FNMA securities totaling $4.1 million, FHLMC securities totaling $66.5 million and portfolio consisted of FNMA securities totaling $4.1 million, FHLMC securities totaling $66.5 million and GNMA securities totaling $5.3 million. At December 31, 2022, available-for-sale agency collateralized mortgage- GNMA securities totaling $5.3 million. At December 31, 2022, available-for-sale agency collateralized mortgage- backed securities portfolio consisted of FNMA securities totaling $3.9 million, FHLMC securities totaling $67.8 backed securities portfolio consisted of FNMA securities totaling $3.9 million, FHLMC securities totaling $67.8 million and GNMA securities totaling $6.7 million. At December 31, 2023 and 2022, all of the Company’s million and GNMA securities totaling $6.7 million. At December 31, 2023 and 2022, all of the Company’s agency collateralized mortgage-backed securities totaled $75.9 million and $78.4 million, respectively, and had agency collateralized mortgage-backed securities totaled $75.9 million and $78.4 million, respectively, and had fixed rates of interest. fixed rates of interest. 83 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 The amortized cost and fair value of available-for-sale and held-to-maturity securities at December 31, 2023, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these available-for-sale debt securities are not credit related. The following table shows the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2023 and 2022: Less than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses 2023 (In Thousands) securities $ 4,318 $ (9) $ 274,801 $ (35,881) $ 279,119 $ (35,890) (216) 66,866 (9,827) 75,946 (10,043) (133) 56,111 (6,622) 63,893 (6,755) — 37,969 (1,531) 37,969 (1,531) $ 21,180 $ (358) $ 435,747 $ (53,861) $ 456,927 $ (54,219) Description of Securities AVAILABLE-FOR-SALE SECURITIES: Agency mortgage-backed Agency collateralized mortgage obligations Small Business Administration securities States and political subdivisions securities HELD-TO-MATURITY SECURITIES: Agency mortgage-backed securities Agency collateralized mortgage obligations States and political subdivisions securities 9,080 7,782 — — — — $ $ — $ 66,245 $ (8,686) $ 66,245 $ (8,686) — — 99,241 (14,662) 99,241 (14,662) 5,707 (482) 5,707 (482) $ — $ — $ 171,193 $ (23,830) $ 171,193 $ (23,830) Available-for-Sale Held-to-Maturity Amortized Cost Fair Value Amortized Carrying Value Fair Value (In Thousands) $ One year or less After one through two years After two through three years After three through four years After four through five years After five through fifteen years After fifteen years Securities not due on a single maturity date — — — 245 952 9,682 48,262 472,751 $ — — — 245 981 9,634 47,277 420,070 $ — — — — — 3,247 2,942 188,834 $ — — — — — 2,986 2,721 165,486 $ 531,892 $ 478,207 $ 195,023 $ 171,193 The amortized cost and fair values of securities pledged as collateral were as follows at December 31, 2023 and 2022: 2023 2022 Amortized Cost Fair Value Amortized Cost Fair Value (In Thousands) Public deposits Collateralized borrowing accounts Other $ 17,412 123,220 3,815 $ 15,225 109,660 3,507 $ 15,402 210,330 4,018 $ 13,489 186,170 3,764 $ 144,447 $ 128,392 $ 229,750 $ 203,423 Available-for-sale investments in debt securities are reported in the financial statements at their fair value, which was $478.2 million and $490.6 million at December 31, 2023 and 2022, respectively. Total fair value of these investments for which the amortized cost exceeded the fair value at December 31, 2023 and 2022, was $456.9 million and $472.0 million, respectively, which is approximately 95.5% and 96.2%, respectively, of the Company’s available-for-sale investment portfolio. A high percentage of the unrealized losses were related to the Company’s mortgage-backed securities, collateralized mortgage obligations and Small Business Administration (SBA) securities, which are issued and guaranteed by U.S. government-sponsored entities and agencies. The Company’s state and political subdivisions securities are investments in insured fixed rate municipal bonds for which the issuers continue to make timely principal and interest payments under the contractual terms of the securities. Held-to-maturity investments in debt securities are reported in the financial statements at their amortized cost, which was $195.0 million and $202.5 million at December 31, 2023 and 2022, respectively. Total fair value of these investments at December 31, 2023 and 2022 was approximately $171.2 million and $177.8 million, respectively. Total fair value of these investments for which the amortized cost exceeded the fair value at December 31, 2023 and 2022, was $171.2 million and $177.8 million, which is 100.0% of the Company’s held-to- maturity investment portfolio. Held-to-maturity investment securities are evaluated for potential losses under ASU 2016-13. 84 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these available-for-sale debt securities are not credit related. The following table shows the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2023 and 2022: Less than 12 Months Fair Value Unrealized Losses 2023 12 Months or More Fair Value Unrealized Losses (In Thousands) Total Fair Value Unrealized Losses Description of Securities AVAILABLE-FOR-SALE SECURITIES: Agency mortgage-backed securities $ 4,318 $ (9) $ 274,801 $ (35,881) $ 279,119 $ (35,890) Agency collateralized mortgage obligations Small Business Administration securities States and political subdivisions securities 9,080 7,782 — (216) 66,866 (9,827) 75,946 (10,043) (133) 56,111 (6,622) 63,893 (6,755) — 37,969 (1,531) 37,969 (1,531) $ 21,180 $ (358) $ 435,747 $ (53,861) $ 456,927 $ (54,219) HELD-TO-MATURITY SECURITIES: Agency mortgage-backed securities Agency collateralized mortgage obligations States and political subdivisions securities $ — — — $ — $ 66,245 $ (8,686) $ 66,245 $ (8,686) — — 99,241 (14,662) 99,241 (14,662) 5,707 (482) 5,707 (482) $ — $ — $ 171,193 $ (23,830) $ 171,193 $ (23,830) 85 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Note 3: Loans and Allowance for Credit Losses The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, effective January 1, 2021. The guidance replaces the incurred loss methodology with an expected loss methodology that is referred to as the CECL methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables. It also applies to off-balance sheet credit exposures not accounted for as insurance, including loan commitments, standby letters of credits, financial guarantees, and other similar instruments. The Company adopted ASC 326 using the modified retrospective method for loans and off-balance sheet credit exposures. The Company recorded a one-time cumulative-effect adjustment to the allowance for credit losses on loans of $11.6 million. This adjustment brought the balance of the allowance for credit losses on loans to $67.3 million as of January 1, 2021. In addition, the Company recorded an $8.7 million liability for unfunded commitments as of January 1, 2021. The after-tax effect decreased retained earnings by $14.2 million. The adjustment was based upon the Company’s analysis of then-current conditions, assumptions and economic forecasts at January 1, 2021. Classes of loans at December 31, 2023 and 2022, included: One- to four-family residential construction $ $ Owner occupied one- to four-family residential Non-owner occupied one- to four-family residential 1,521,032 1,530,663 Subdivision construction Land development Commercial construction Commercial real estate Other residential Commercial business Industrial revenue bonds Consumer auto Consumer other Home equity lines of credit Allowance for credit losses Deferred loan fees and gains, net 2023 2022 (In Thousands) 29,628 23,359 48,015 703,407 769,260 121,275 942,071 318,050 12,047 28,343 28,978 33,849 32,067 41,613 757,690 778,533 124,870 781,761 293,228 12,852 37,281 33,732 123,242 115,883 4,661,348 (64,670) (7,058) 4,581,381 (63,480) (11,065) $ 4,589,620 $ 4,506,836 Description of Securities AVAILABLE-FOR-SALE SECURITIES: Agency mortgage-backed securities Agency collateralized mortgage obligations Small Business Less than 12 Months Fair Value Unrealized Losses 2022 12 Months or More Fair Value Unrealized Losses (In Thousands) Total Fair Value Unrealized Losses $ 221,562 $ (27,597) $ 64,918 $ (13,187) $ 286,480 $ (40,784) 28,537 (3,262) 40,642 (8,469) 69,179 (11,731) Administration securities 60,473 (5,224) States and political subdivisions securities 44,455 (2,913) 7,667 3,753 (1,711) 68,140 (6,935) (378) 48,208 (3,291) $ 355,027 $ (38,996) $ 116,980 $ (23,745) $ 472,007 $ (62,741) HELD-TO-MATURITY SECURITIES: Agency mortgage-backed securities Agency collateralized mortgage obligations States and political subdivisions securities $ 59,218 $ (7,766) $ 7,868 $ (2,054) $ 67,086 $ (9,820) 61,055 (6,411) 44,178 (7,718) 105,233 (14,129) 900 (101) 4,546 (680) 5,446 (781) $ 121,173 $ (14,278) $ 56,592 $ (10,452) $ 177,765 $ (24,730) Allowance for Credit Losses On January 1, 2021, the Company began evaluating all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326, Measurement of Credit Losses on Financial Instruments. All of the mortgage-backed, collateralized mortgage, and SBA securities held by the Company are issued by U.S. government-sponsored entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. Likewise, the Company has not experienced historical losses on these types of securities. Accordingly, no allowance for credit losses has been recorded for these securities. Regarding securities issued by state and political subdivisions, management considers the following when evaluating these securities: (i) current issuer bond ratings, (ii) historical loss rates for given bond ratings, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, (iv) updated financial information of the issuer, (v) internal forecasts and (vi) whether such securities provide insurance or other credit enhancement or are pre-refunded by the issuers. These securities are highly rated by major rating agencies and have a long history of no credit losses. Likewise, the Company has not experienced historical losses on these types of securities. Accordingly, no allowance for credit losses has been recorded for these securities. 86 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Note 3: Loans and Allowance for Credit Losses The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, effective January 1, 2021. The guidance replaces the incurred loss methodology with an expected loss methodology that is referred to as the CECL methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables. It also applies to off-balance sheet credit exposures not accounted for as insurance, including loan commitments, standby letters of credits, financial guarantees, and other similar instruments. The Company adopted ASC 326 using the modified retrospective method for loans and off-balance sheet credit exposures. The Company recorded a one-time cumulative-effect adjustment to the allowance for credit losses on loans of $11.6 million. This adjustment brought the balance of the allowance for credit losses on loans to $67.3 million as of January 1, 2021. In addition, the Company recorded an $8.7 million liability for unfunded commitments as of January 1, 2021. The after-tax effect decreased retained earnings by $14.2 million. The adjustment was based upon the Company’s analysis of then-current conditions, assumptions and economic forecasts at January 1, 2021. Classes of loans at December 31, 2023 and 2022, included: 2023 2022 (In Thousands) $ 33,849 32,067 41,613 757,690 778,533 124,870 1,530,663 781,761 293,228 12,852 37,281 33,732 123,242 4,581,381 (63,480) (11,065) 4,506,836 $ $ 29,628 23,359 48,015 703,407 769,260 121,275 1,521,032 942,071 318,050 12,047 28,343 28,978 115,883 4,661,348 (64,670) (7,058) 4,589,620 $ One- to four-family residential construction Subdivision construction Land development Commercial construction Owner occupied one- to four-family residential Non-owner occupied one- to four-family residential Commercial real estate Other residential Commercial business Industrial revenue bonds Consumer auto Consumer other Home equity lines of credit Allowance for credit losses Deferred loan fees and gains, net 87 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 December 31, 2022 30-59 Days 60-89 Days Days Total Past Over 90 Past Due Past Due Past Due Due Current Receivable Still Accruing (In Thousands) Total Loans Total Loans > 90 Days Past Due and $ $ $ $ — $ 33,849 $ 33,849 $ 2,568 — — — — — 196 — 8 — 100 288 234 — — — — 462 63 — — — — 34 114 38 — — 384 — 722 — — 586 — 14 111 274 — 384 — 32,067 41,229 32,067 41,613 757,690 757,690 3,752 774,781 778,533 1,579 1,775 1,528,888 1,530,663 63 124,807 124,870 — 594 — 148 513 546 781,761 781,761 292,634 293,228 12,852 37,133 33,219 12,852 37,281 33,732 122,696 123,242 — — — — — — — — — — — — — — One- to four-family residential construction Subdivision construction Land development Commercial construction Owner occupied one- to four- family residential Non-owner occupied one- to four-family residential Commercial real estate Other residential Commercial business Industrial revenue bonds Consumer auto Consumer other Home equity lines of credit Total $ 3,394 $ 711 $ 3,670 $ 7,775 $ 4,573,606 $ 4,581,381 $ Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 December 31, 2023, 2022 and 2021 Classes of loans by aging were as follows as of the dates indicated: Classes of loans by aging were as follows as of the dates indicated: December 31, 2023 December 31, 2023 30-59 Days 60-89 Days 30-59 Days 60-89 Days Past Due Past Due Past Due Past Due Past Due Past Due Over 90 Over 90 Days Days Total Past Total Past Due Due Total Loans Total Loans > 90 Days Past Total > 90 Days Past Total Due and Loans Due and Loans Current Receivable Still Accruing Current Receivable Still Accruing One- to four-family One- to four-family residential construction residential construction Subdivision construction Subdivision construction Land development Land development Commercial construction Commercial construction Owner occupied one- to four- Owner occupied one- to four- family residential family residential Non-owner occupied one- to Non-owner occupied one- to four-family residential four-family residential Commercial real estate Commercial real estate Other residential Other residential Commercial business Commercial business Industrial revenue bonds Industrial revenue bonds Consumer auto Consumer auto Consumer other Consumer other Home equity lines of credit Home equity lines of credit Total Total $ $ $ $ — — — — — — — — $ $ — — — — — — — — 2,778 2,778 125 125 — — — — 384 384 — — 722 722 — — 187 187 9,572 9,572 — — — — 116 116 137 137 335 335 — 92 — — — 65 — 26 — 92 — — — 65 — 26 — — 10,552 10,552 — — 31 31 — — 8 8 42 42 9 9 (In Thousands) (In Thousands) $ $ $ $ — — — — 384 384 — — 29,628 $ 29,628 $ 23,359 23,359 47,631 47,631 703,407 703,407 29,628 $ 29,628 $ 23,359 23,359 48,015 48,015 703,407 703,407 3,625 3,625 — — 10,831 10,831 9,572 9,572 31 31 — — 189 189 179 179 370 370 765,635 765,635 769,260 769,260 121,275 121,275 1,510,201 1,510,201 932,499 932,499 318,019 318,019 12,047 12,047 28,154 28,154 28,799 28,799 115,513 115,513 121,275 121,275 1,521,032 1,521,032 942,071 942,071 318,050 318,050 12,047 12,047 28,343 28,343 28,978 28,978 115,883 115,883 — — — — — — — — — — — — — — — — — — — — — — — — — — $ 13,125 $ 13,125 $ $ 308 308 $ 11,748 $ 11,748 $ 25,181 $ 25,181 $ 4,636,167 $ 4,661,348 $ $ 4,636,167 $ 4,661,348 $ — — 88 Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 December 31, 2023, 2022 and 2021 December 31, 2022 December 31, 2022 30-59 Days 60-89 Days 30-59 Days 60-89 Days Past Due Past Due Past Due Past Due Past Due Past Due Over 90 Over 90 Days Days Total Past Total Past Due Due Total Loans Total Loans > 90 Days Past Total > 90 Days Past Total Due and Loans Loans Due and Current Receivable Still Accruing Current Receivable Still Accruing One- to four-family One- to four-family residential construction residential construction Subdivision construction Subdivision construction Land development Land development Commercial construction Commercial construction Owner occupied one- to four- Owner occupied one- to four- family residential family residential Non-owner occupied one- to Non-owner occupied one- to four-family residential four-family residential Commercial real estate Commercial real estate Other residential Other residential Commercial business Commercial business Industrial revenue bonds Industrial revenue bonds Consumer auto Consumer auto Consumer other Consumer other Home equity lines of credit Home equity lines of credit $ $ $ $ — — — — — — — — $ $ — — — — — — — — 2,568 2,568 462 462 — — — — 384 384 — — 722 722 — 196 — 8 — 100 288 234 — 196 — 8 — 100 288 234 63 63 — — — — — — — — 34 34 114 114 38 38 — — 1,579 1,579 — — 586 586 — — 14 14 111 111 274 274 (In Thousands) (In Thousands) $ $ $ $ — — — — 384 384 — — 33,849 $ 33,849 $ 32,067 32,067 41,229 41,229 757,690 757,690 33,849 $ 33,849 $ 32,067 32,067 41,613 41,613 757,690 757,690 3,752 3,752 63 63 1,775 1,775 — — 594 594 — — 148 148 513 513 546 546 774,781 774,781 778,533 778,533 124,807 124,807 1,528,888 1,528,888 781,761 781,761 292,634 292,634 12,852 12,852 37,133 37,133 33,219 33,219 122,696 122,696 124,870 124,870 1,530,663 1,530,663 781,761 781,761 293,228 293,228 12,852 12,852 37,281 37,281 33,732 33,732 123,242 123,242 — — — — — — — — — — — — — — — — — — — — — — — — — — Total Total $ $ 3,394 3,394 $ $ 711 711 $ 3,670 $ 3,670 $ $ 7,775 7,775 $ 4,573,606 $ 4,581,381 $ $ 4,573,606 $ 4,581,381 $ — — 89 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Loans are placed on nonaccrual status at 90 days past due and interest is considered a loss unless the loan is well secured and in the process of collection. Payments received on nonaccrual loans are applied to principal until the loans are returned to accrual status. Loans are returned to accrual status when all payments contractually due are brought current, payment performance is sustained for a period of time, generally six months, and future payments are reasonably assured. With the exception of consumer loans, charge-offs on loans are recorded when available information indicates a loan is not fully collectible and the loss is reasonably quantifiable. Consumer loans are charged-off at specified delinquency dates consistent with regulatory guidelines. Non-accruing loans are summarized as follows: December 31, 2023 2022 (In Thousands) $ One- to four-family residential construction Subdivision construction Land development Commercial construction Owner occupied one- to four-family residential Non-owner occupied one- to four-family residential Commercial real estate Other residential Commercial business Industrial revenue bonds Consumer auto Consumer other Home equity lines of credit $ — — 384 — 722 — 10,552 — 31 — 8 42 9 — — 384 — 722 — 1,579 — 586 — 14 111 274 Total non-accruing loans $ 11,748 $ 3,670 No interest income was recorded on these loans for the years ended December 31, 2023 and 2022, respectively. Nonaccrual loans for which there is no related allowance for credit losses as of December 31, 2023 had an amortized cost of $792,000. These loans are individually assessed and do not require an allowance due to being adequately collateralized under the collateral-dependent valuation method. A collateral-dependent loan is a financial asset for which the repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty based on the Company’s assessment as of the reporting date. Collateral- dependent loans are identified primarily by a classified risk rating with a loan balance equal to or greater than $100,000, including, but not limited to, any loan in process of foreclosure or repossession. 90 The following table presents the activity in the allowance for credit losses by portfolio segment for the years ended December 31, 2023, 2022 and 2021. On January 1, 2021, the Company adopted the CECL methodology, which added $11.6 million to the total Allowance for Credit Loss, including $1.9 million of remaining discount on loans that were previously accounted for as PCI. One- to Four- Family Residential December 31, 2023 and Other Commercial Commercial Commercial Construction Residential Real Estate Construction Business Consumer Total (In Thousands) Balance, January 1, 2023 $ 11,171 $ 12,110 $ 27,096 $ 2,865 $ 5,822 $ 4,416 $ 63,480 (1,390) (31) 70 1,260 — — 930 — 145 (27) — 6 1,909 (1,037) 241 (432) (1,754) 1,300 2,250 (2,822) 1,762 Allowance for Credit Losses Provision (credit) charged to expense Losses charged off Recoveries Balance, December 31, 2023 $ 9,820 $ 13,370 $ 28,171 $ 2,844 $ 6,935 $ 3,530 $ 64,670 One- to Four- Family Residential December 31, 2022 and Other Commercial Commercial Commercial Construction Residential Real Estate Construction Business Consumer Total (In Thousands) Balance, January 1, 2022 $ 9,364 $ 10,502 $ 28,604 $ 2,797 $ 4,142 $ 5,345 $ 60,754 1,652 (40) 195 1,498 — 110 (1,465) 152 (44) 1 (84) — 1,491 (51) 240 (328) (1,950) 1,349 3,000 (2,169) 1,895 Allowance for Credit Losses Provision (credit) charged to expense Losses charged off Recoveries Balance, December 31, 2022 $ 11,171 $ 12,110 $ 27,096 $ 2,865 $ 5,822 $ 4,416 $ 63,480 One- to Four- Family Residential December 31, 2021 and Other Commercial Commercial Commercial Construction Residential Real Estate Construction Business Consumer Total (In Thousands) 4,536 4,533 9,069 $ 9,375 5,832 $ 15,207 $ 33,707 (2,531) 31,176 $ 3,521 (1,165) 2,356 $ 2,390 1,499 3,889 $ 2,214 3,427 5,641 55,743 11,595 67,338 — (190) 485 (4,797) (2,478) 575 — 92 (142) 48 (154) 20 — (81) 334 — (2,054) 1,758 (6,700) (2,621) 2,737 Allowance for Credit Losses Balance, December 31, 2020 $ CECL adoption Balance, January 1, 2021 Provision (credit) charged to expense Losses charged off Recoveries Balance, December 31, 2021 $ 9,364 $ 10,502 $ 28,604 $ 2,797 $ 4,142 $ 5,345 $ 60,754 Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 December 31, 2023, 2022 and 2021 The following table presents the activity in the allowance for credit losses by portfolio segment for the years The following table presents the activity in the allowance for credit losses by portfolio segment for the years ended December 31, 2023, 2022 and 2021. On January 1, 2021, the Company adopted the CECL methodology, ended December 31, 2023, 2022 and 2021. On January 1, 2021, the Company adopted the CECL methodology, which added $11.6 million to the total Allowance for Credit Loss, including $1.9 million of remaining discount on which added $11.6 million to the total Allowance for Credit Loss, including $1.9 million of remaining discount on loans that were previously accounted for as PCI. loans that were previously accounted for as PCI. December 31, 2023 December 31, 2023 One- to Four- One- to Four- Family Family Residential Residential and and Other Other Commercial Commercial Commercial Commercial Commercial Commercial Construction Residential Real Estate Construction Business Construction Residential Real Estate Construction Business Consumer Consumer Total Total (In Thousands) (In Thousands) Allowance for Credit Losses Allowance for Credit Losses Balance, January 1, 2023 Balance, January 1, 2023 Provision (credit) charged Provision (credit) charged to expense to expense Losses charged off Losses charged off Recoveries Recoveries $ $ 11,171 11,171 $ 12,110 $ 12,110 $ 27,096 $ 27,096 $ $ 2,865 2,865 $ $ 5,822 5,822 $ $ 4,416 4,416 $ $ 63,480 63,480 (1,390) (1,390) (31) (31) 70 70 1,260 1,260 — — — — 930 930 — — 145 145 (27) (27) — — 6 6 1,909 1,909 (1,037) (1,037) 241 241 (432) (432) (1,754) (1,754) 1,300 1,300 2,250 2,250 (2,822) (2,822) 1,762 1,762 Balance, December 31, 2023 Balance, December 31, 2023 $ $ 9,820 9,820 $ 13,370 $ 13,370 $ 28,171 $ 28,171 $ $ 2,844 2,844 $ $ 6,935 6,935 $ $ 3,530 3,530 $ $ 64,670 64,670 December 31, 2022 December 31, 2022 One- to Four- One- to Four- Family Family Residential Residential and and Other Other Commercial Commercial Commercial Commercial Commercial Commercial Construction Residential Real Estate Construction Business Construction Residential Real Estate Construction Business Consumer Consumer Total Total (In Thousands) (In Thousands) Allowance for Credit Losses Allowance for Credit Losses Balance, January 1, 2022 Balance, January 1, 2022 Provision (credit) charged Provision (credit) charged to expense to expense Losses charged off Losses charged off Recoveries Recoveries $ $ 9,364 9,364 $ 10,502 $ 10,502 $ $ 28,604 28,604 $ $ 2,797 2,797 $ $ 4,142 4,142 $ $ 5,345 5,345 $ $ 60,754 60,754 1,652 1,652 (40) (40) 195 195 1,498 1,498 — — 110 110 (1,465) (1,465) (44) (44) 1 1 152 152 (84) (84) — — 1,491 1,491 (51) (51) 240 240 (328) (328) (1,950) (1,950) 1,349 1,349 3,000 3,000 (2,169) (2,169) 1,895 1,895 Balance, December 31, 2022 Balance, December 31, 2022 $ $ 11,171 11,171 $ 12,110 $ 12,110 $ 27,096 $ 27,096 $ $ 2,865 2,865 $ $ 5,822 5,822 $ $ 4,416 4,416 $ $ 63,480 63,480 December 31, 2021 December 31, 2021 One- to Four- One- to Four- Family Family Residential Residential and and Other Other Commercial Commercial Commercial Commercial Commercial Commercial Construction Residential Real Estate Construction Business Construction Residential Real Estate Construction Business Consumer Consumer Total Total (In Thousands) (In Thousands) Allowance for Credit Losses Allowance for Credit Losses Balance, December 31, 2020 $ Balance, December 31, 2020 $ CECL adoption CECL adoption Balance, January 1, 2021 Balance, January 1, 2021 Provision (credit) charged Provision (credit) charged to expense to expense Losses charged off Losses charged off Recoveries Recoveries 4,536 4,533 9,069 4,536 4,533 9,069 — — (190) (190) 485 485 $ $ 9,375 9,375 5,832 5,832 15,207 15,207 $ $ $ $ 33,707 33,707 (2,531) (2,531) 31,176 31,176 3,521 3,521 (1,165) (1,165) 2,356 2,356 $ $ $ $ 2,390 2,390 1,499 1,499 3,889 3,889 $ $ 2,214 2,214 3,427 3,427 5,641 5,641 55,743 55,743 11,595 11,595 67,338 67,338 (4,797) (4,797) — — 92 92 (2,478) (2,478) (142) (142) 48 48 575 575 (154) (154) 20 20 — — (81) (81) 334 334 — — (2,054) (2,054) 1,758 1,758 (6,700) (6,700) (2,621) (2,621) 2,737 2,737 Balance, December 31, 2021 Balance, December 31, 2021 $ $ 9,364 9,364 $ 10,502 $ 10,502 $ 28,604 $ 28,604 $ $ 2,797 2,797 $ $ 4,142 4,142 $ $ 5,345 5,345 $ $ 60,754 60,754 91 Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 The following table presents the activity in the allowance for unfunded commitments by portfolio segment for the The following table presents the activity in the allowance for unfunded commitments by portfolio segment for the years ended December 31, 2023, 2022 and 2021. On January 1, 2021, the Company adopted the CECL years ended December 31, 2023, 2022 and 2021. On January 1, 2021, the Company adopted the CECL methodology, which created an $8.7 million allowance for unfunded commitments. methodology, which created an $8.7 million allowance for unfunded commitments. December 31, 2023 December 31, 2023 One- to Four- One- to Four- Family Family Residential Residential and and Commercial Commercial Commercial Commercial Commercial Commercial Construction Residential Real Estate Construction Business Construction Residential Real Estate Construction Business Other Other Consumer Consumer Total Total classes. Allowance for Unfunded Commitments Balance, January 1, 2023 Allowance for Unfunded Commitments Balance, January 1, 2023 Provision (credit) charged Provision (credit) charged to expense to expense (In Thousands) (In Thousands) $ $ 736 736 $ $ 8,624 8,624 $ 416 $ 416 $ $ 802 802 $ $ 1,734 1,734 $ $ 504 504 $ $ 12,816 12,816 (30) (30) (4,618) (4,618) 203 203 (61) (61) (775) (775) (48) (48) (5,329) (5,329) respectively. Balance, December 31, 2023 Balance, December 31, 2023 $ $ 706 706 $ $ 4,006 4,006 $ 619 $ 619 $ $ 741 741 $ $ 959 959 $ $ 456 456 $ $ 7,487 7,487 December 31, 2022 December 31, 2022 The portfolio segments used in the preceding tables correspond to the loan classes used in all other tables in Note 3 as follows:  The one- to four-family residential and construction segment includes the one- to four-family residential construction, subdivision construction, owner occupied one- to four-family residential and non-owner occupied one- to four-family residential classes.  The other residential (multi-family) segment corresponds to the other residential (multi-family) class.  The commercial real estate segment includes the commercial real estate and industrial revenue bonds  The commercial construction segment includes the land development and commercial construction classes.  The commercial business segment corresponds to the commercial business class.  The consumer segment includes the consumer auto, consumer other and home equity lines of credit classes. The weighted average interest rate on loans receivable at December 31, 2023 and 2022, was 6.25% and 5.54%, Loans serviced for others are not included in the accompanying consolidated statements of financial condition. The unpaid principal balance of loans serviced for others at December 31, 2023, was $439.9 million, consisting of $334.6 million of commercial loan participations sold to other financial institutions and $105.3 million of residential mortgage loans sold. The unpaid principal balance of loans serviced for others at December 31, 2022, was $540.2 million, consisting of $422.3 million of commercial loan participations sold to other financial institutions and $117.9 million of residential mortgage loans sold. In addition, available lines of credit on these loans were $123.6 million and $104.1 million at December 31, 2023 and 2022, respectively. One- to Four- One- to Four- Family Family Residential Residential and and Commercial Commercial Commercial Commercial Commercial Commercial Construction Residential Real Estate Construction Business Construction Residential Real Estate Construction Business Other Other Consumer Consumer Total Total Allowance for Unfunded Commitments Balance, January 1, 2022 Allowance for Unfunded Commitments Balance, January 1, 2022 Provision (credit) charged Provision (credit) charged to expense to expense (In Thousands) (In Thousands) $ $ 687 687 $ $ 5,703 5,703 $ $ 367 367 $ $ 908 908 $ $ 1,582 1,582 $ $ 382 382 $ $ 9,629 9,629 49 49 2,921 2,921 49 49 (106) (106) 152 152 122 122 3,187 3,187 Balance, December 31, 2022 Balance, December 31, 2022 $ $ 736 736 $ $ 8,624 8,624 $ 416 $ 416 $ $ 802 802 $ $ 1,734 1,734 $ $ 504 504 $ $ 12,816 12,816 December 31, 2021 December 31, 2021 One- to Four- One- to Four- Family Family Residential Residential and and Commercial Commercial Commercial Commercial Commercial Commercial Construction Residential Real Estate Construction Business Construction Residential Real Estate Construction Business Other Other Consumer Consumer Total Total Allowance for Unfunded Commitments Allowance for Unfunded Commitments Balance, December 31, 2020 $ Balance, December 31, 2020 $ CECL adoption CECL adoption Balance, January 1, 2021 Balance, January 1, 2021 Provision (credit) charged Provision (credit) charged to expense to expense (In Thousands) (In Thousands) $ $ — — 917 917 917 917 — — 5,227 5,227 5,227 5,227 $ $ (230) (230) 476 476 $ $ — — 354 354 354 354 13 13 $ $ — — 910 910 910 910 (2) (2) $ $ — — 935 935 935 935 647 647 $ $ — — 347 347 347 347 35 35 — — 8,690 8,690 8,690 8,690 939 939 Balance, December 31, 2021 Balance, December 31, 2021 $ $ 687 687 $ $ 5,703 5,703 $ 367 $ 367 $ $ 908 908 $ $ 1,582 1,582 $ $ 382 382 $ $ 9,629 9,629 92 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 The portfolio segments used in the preceding tables correspond to the loan classes used in all other tables in Note 3 as follows:  The one- to four-family residential and construction segment includes the one- to four-family residential construction, subdivision construction, owner occupied one- to four-family residential and non-owner occupied one- to four-family residential classes.  The other residential (multi-family) segment corresponds to the other residential (multi-family) class.  The commercial real estate segment includes the commercial real estate and industrial revenue bonds classes.  The commercial construction segment includes the land development and commercial construction classes.  The commercial business segment corresponds to the commercial business class.  The consumer segment includes the consumer auto, consumer other and home equity lines of credit classes. The weighted average interest rate on loans receivable at December 31, 2023 and 2022, was 6.25% and 5.54%, respectively. Loans serviced for others are not included in the accompanying consolidated statements of financial condition. The unpaid principal balance of loans serviced for others at December 31, 2023, was $439.9 million, consisting of $334.6 million of commercial loan participations sold to other financial institutions and $105.3 million of residential mortgage loans sold. The unpaid principal balance of loans serviced for others at December 31, 2022, was $540.2 million, consisting of $422.3 million of commercial loan participations sold to other financial institutions and $117.9 million of residential mortgage loans sold. In addition, available lines of credit on these loans were $123.6 million and $104.1 million at December 31, 2023 and 2022, respectively. 93 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 The following tables present the amortized cost basis of collateral-dependent loans by class of loans at the dates indicated: Modified Loans December 31, 2023 Principal Balance Specific Allowance (In Thousands) $ $ One- to four-family residential construction Subdivision construction Land development Commercial construction Owner occupied one- to four-family residential Non-owner occupied one- to four-family residential Commercial real estate Other residential Commercial business Industrial revenue bonds Consumer auto Consumer other Home equity lines of credit — — 384 — 691 — 10,548 7,162 — — — — — — — — — 29 — 1,200 — — — — — — Total $ 18,785 $ 1,229 December 31, 2022 Principal Balance Specific Allowance (In Thousands) $ $ One- to four-family residential construction Subdivision construction Land development Commercial construction Owner occupied one- to four-family residential Non-owner occupied one- to four-family residential Commercial real estate Other residential Commercial business Industrial revenue bonds Consumer auto Consumer other Home equity lines of credit — — 384 — 1,637 — 1,571 — 586 — — 160 135 Total $ 4,473 $ — — — — 40 — — — 125 — — 80 — 245 For loans that were non-accruing, interest of approximately $509,000, $292,000 and $432,000 would have been recognized on an accrual basis during the years ended December 31, 2023, 2022 and 2021, respectively. 94 As indicated in Note 1, in March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 eliminates the troubled debt restructuring (TDR) recognition and measurement guidance and, instead, requires that an entity evaluate whether the loan modification represents a new loan or a continuation of an existing loan. It also enhances existing disclosure requirements and introduces new disclosure requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU 2022-02 became effective for the Company on January 1, 2023. Adoption of this ASU did not have a material impact on the Company’s results of operations, financial position or liquidity, but resulted in additional disclosure requirements related to gross charge offs by vintage year and the removal of TDR disclosures, replaced by additional disclosures on the types of modifications of loans to borrowers experiencing financial difficulties. The Company has adopted this update prospectively. Under ASU 2022-02, loan modifications are reported if concessions have been granted to borrowers that are experiencing financial difficulty. Information on these loan modifications originated after the effective date is presented according to the new accounting guidance. Reporting periods prior to the adoption of ASU 2022-02 present information on TDRs under the previous disclosure requirements. The estimate of lifetime expected losses utilized in the allowance for credit losses model is developed using average historical loss on loans with similar risk characteristics, which includes losses from modifications of loans to borrowers experiencing financial difficulty. As a result, a change to the allowance for credit losses is generally not recorded upon modification. For modifications to loans made to borrowers experiencing financial difficulty that are adversely classified, the Company determines the allowance for credit losses on an individual basis, using the same process that it utilizes for other adversely classified loans. If collection efforts have begun and the modified loan is subsequently deemed collateral-dependent, the loan is placed on non-accrual status and the allowance for credit losses is determined based on an individual evaluation. If necessary, the loan is charged down to fair market value less estimated sales costs. The following table shows the composition of loan modifications made to borrowers experiencing financial difficulty by the loan portfolio and type of concessions granted during the year ended December 31, 2023. Each of the types of concessions granted comprised 2% or less of their respective classes of loan portfolios at December 31, 2023. During the year ended December 31, 2023, principal forgiveness of $563,000 was completed on commercial business loans and consumer loans Construction and land development $ $ $ 1,553 $ Year Ended December 31, 2023 Interest Rate Term Total Reduction Extension Combination Modifications (In Thousands) 2,750 — — 77 — 7 20,365 — — — — 1,553 — 2,750 20,442 — 12 — — — — — 5 5 $ $ 2,834 $ 21,918 $ 24,757 One- to four-family residential Other residential Commercial real estate Commercial business Consumer Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Modified Loans As indicated in Note 1, in March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. ASU 2022-02 eliminates the troubled debt restructuring (TDR) recognition and measurement guidance and, instead, requires that an entity evaluate whether the loan modification represents a new loan or a continuation of an existing loan. It also enhances existing disclosure requirements and introduces new disclosure requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU 2022-02 became effective for the Company on January 1, 2023. Adoption of this ASU did not have a material impact on the Company’s results of operations, financial position or liquidity, but resulted in additional disclosure requirements related to gross charge offs by vintage year and the removal of TDR disclosures, replaced by additional disclosures on the types of modifications of loans to borrowers experiencing financial difficulties. The Company has adopted this update prospectively. Under ASU 2022-02, loan modifications are reported if concessions have been granted to borrowers that are experiencing financial difficulty. Information on these loan modifications originated after the effective date is presented according to the new accounting guidance. Reporting periods prior to the adoption of ASU 2022-02 present information on TDRs under the previous disclosure requirements. The estimate of lifetime expected losses utilized in the allowance for credit losses model is developed using average historical loss on loans with similar risk characteristics, which includes losses from modifications of loans to borrowers experiencing financial difficulty. As a result, a change to the allowance for credit losses is generally not recorded upon modification. For modifications to loans made to borrowers experiencing financial difficulty that are adversely classified, the Company determines the allowance for credit losses on an individual basis, using the same process that it utilizes for other adversely classified loans. If collection efforts have begun and the modified loan is subsequently deemed collateral-dependent, the loan is placed on non-accrual status and the allowance for credit losses is determined based on an individual evaluation. If necessary, the loan is charged down to fair market value less estimated sales costs. The following table shows the composition of loan modifications made to borrowers experiencing financial difficulty by the loan portfolio and type of concessions granted during the year ended December 31, 2023. Each of the types of concessions granted comprised 2% or less of their respective classes of loan portfolios at December 31, 2023. During the year ended December 31, 2023, principal forgiveness of $563,000 was completed on commercial business loans and consumer loans Year Ended December 31, 2023 Interest Rate Reduction Term Extension Combination Total Modifications Construction and land development One- to four-family residential Other residential Commercial real estate Commercial business Consumer $ $ — — — — — 5 5 (In Thousands) — — 2,750 77 — 7 2,834 $ $ 1,553 — — 20,365 — — 21,918 $ $ 1,553 — 2,750 20,442 — 12 24,757 $ $ 95 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 The Company closely monitors the performance of loans to borrowers experiencing financial difficulty that are modified to understand the effectiveness of its modification efforts. The following table depicts the performance (under modified terms) at December 31, 2023 of loans that were modified during the year ended December 31, 2023: Construction and land development One- to four-family residential Other residential Commercial real estate Commercial business Consumer Current $ $ 1,553 — 2,750 12,384 — 12 16,699 December 31, 2023 30-89 Days Past Due Over 90 Days Past Due (In Thousands) $ $ — — — — — — — $ $ — — — 8,058 — — 8,058 Total 1,553 — 2,750 20,442 — 12 24,757 $ $ TDRs by class are presented below as of December 31, 2022. December 31, 2022 The following tables present newly restructured loans during the years ended December 31, 2022 and 2021 by type of modification: Interest Only Term Combination Modification Residential one-to-four family Commercial real estate Commercial business Consumer $ $ — — — — — $ $ Interest Only Term Combination Modification Residential one-to-four family $ 31 $ Commercial real estate Commercial business Consumer 1,768 — — $ 1,799 $ At December 31, 2022, of the $2.9 million in TDRs, $1.7 million were classified as substandard using the Company’s internal grading system. The Company had no TDRs that were modified in the previous 12 months and subsequently defaulted during the year ended December 31, 2022. 2022 (In Thousands) — — — 4 4 202 — — 259 461 $ $ $ $ 2021 (In Thousands) 32 247 — 3 282 $ $ Total 32 247 — 7 286 Total 134 $ — — 11 145 $ 367 1,768 — 270 2,405 Accruing TDR Loans Non-accruing TDR Loans Number Balance Balance Number Total TDR Loans Number Balance — 16 — 2 — 18 36 $ $ — 1,126 — 1,571 — 252 2,949 Construction and land development One- to four-family residential Other residential Commercial real estate Commercial business Consumer — 13 — — — 13 26 $ $ — 1,028 — — — 210 1,238 (In Thousands) — 3 — 2 — 5 10 $ $ — 98 — 1,571 — 42 1,711 96 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 The following tables present newly restructured loans during the years ended December 31, 2022 and 2021 by type of modification: 2022 Interest Only Term Combination (In Thousands) Total Modification Residential one-to-four family Commercial real estate Commercial business Consumer $ $ — — — — — $ $ 32 247 — 3 282 $ $ 32 247 — 7 286 — — — 4 4 $ $ 2021 Interest Only Term Combination (In Thousands) Total Modification Residential one-to-four family Commercial real estate Commercial business Consumer $ $ 31 1,768 — — 1,799 $ $ 202 — — 259 461 $ $ 134 — — 11 145 $ $ 367 1,768 — 270 2,405 At December 31, 2022, of the $2.9 million in TDRs, $1.7 million were classified as substandard using the Company’s internal grading system. The Company had no TDRs that were modified in the previous 12 months and subsequently defaulted during the year ended December 31, 2022. 97 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Loan Risk Ratings The nature and extent of impairments of modified loans, including those which have experienced a subsequent payment default, are considered in the determination of an appropriate level of the allowance for credit losses. The Company utilizes an internal risk rating system comprised of a series of grades to categorize loans according to perceived risk associated with the expectation of debt repayment. The analysis of the borrower’s ability to repay considers specific information, including but not limited to current financial information, historical payment experience, industry information, collateral levels and collateral types. A risk rating is assigned at loan origination and then monitored throughout the contractual term for possible risk rating changes. Satisfactory loans range from Excellent to Moderate Risk, but generally are loans supported by strong recent financial statements. The character and capacity of the borrower are strong, including reasonable project performance, good industry experience, liquidity and/or net worth. The probability of financial deterioration seems unlikely. Repayment is expected from approved sources over a reasonable period of time. Watch loans are identified when the borrower has capacity to perform according to terms; however, elements of uncertainty exist. Margins of debt service coverage may be narrow, historical patterns of financial performance may be erratic, collateral margins may be diminished and the borrower may be a new and/or thinly capitalized company. Some management weakness may also exist, the borrower may have somewhat limited access to other financial institutions, and that access may diminish in difficult economic times. Special Mention loans have weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of repayment prospects or the Bank’s credit position at some future date. It is a transitional grade that is closely monitored for improvement or deterioration. The Substandard rating is applied to loans where the borrower exhibits well-defined weaknesses that jeopardize its continued performance and are of a severity that the distinct possibility of default exists. Loans are placed on “non- accrual” when management does not expect to collect payments consistent with acceptable and agreed upon terms of repayment. Doubtful loans have all the weaknesses inherent to those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable. The Loss category is used when loans are considered uncollectable and no longer included as an asset. All loans are analyzed for risk rating updates regularly. For larger loans, rating assessments may be more frequent if relevant information is obtained earlier through debt covenant monitoring or overall relationship management. Smaller loans are monitored as identified by the loan officer based on the risk profile of the individual borrower or if the loan becomes past due related to credit issues. Loans rated Watch, Special Mention, Substandard or Doubtful are subject to quarterly review and monitoring processes. In addition to the regular monitoring performed by the lending personnel and credit committees, loans are subject to review by the credit review department, which verifies the appropriateness of the risk ratings for the loans chosen as part of its risk-based review plan. 98 The following tables present a summary of loans by category and risk rating separated by origination and loan class as of December 31, 2023 and 2022. Term Loans by Origination Year 2023 2022 2021 2020 2019 Prior Loans Total Revolving (In Thousands) $ 12,528 $ 9,878 $ 41 $ — $ — $ — $ 7,181 $ 29,628 Current Period Gross Charge Offs 14,860 12,564 14,860 12,564 5,658 3,682 5,458 4,531 — — — 3,682 — — — — 5,458 — — — — 4,531 — One- to four-family residential construction Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Current Period Gross Charge Offs Subdivision construction Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Current Period Gross Charge Offs Construction and land development — — — — 12,528 532 — — — 532 — Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Other construction Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Current Period Gross Charge Offs One- to four-family residential Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Other residential Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total — — — — — — — — — — — — — — — — 1,022 21,333 — — — 9,878 — — — — 1,022 — — — — — — — — — — — — — — — — — — — — 41 — — — — — 21,333 — — — 5,658 — — — — — — — 543 — — — — — — — — — — 43 — — — 43 — — — — — — — 148 — — — — — — — — — — 64 — — — 64 — — — — — — — 171 — — — — — — — — — — — — 365 — — — 365 — — — — — — — 862 — 189 11 — — — 7,181 — — — — — — — 878 — — 384 1,262 — — — — — — — 483 46 — — 529 20 — 12,322 7,163 130,947 — — — — 3,335 — — — — 29,628 — 23,359 — — — 23,359 — 47,631 — — 384 48,015 — 703,407 — — — — 703,407 888,576 1,079 — 880 890,535 31 — 12,322 7,163 942,071 — 60,895 422,727 203,918 15,867 60,895 422,727 203,918 15,867 66,733 330,489 203,781 108,232 60,288 118,570 Current Period Gross Charge Offs 66,733 330,489 204,324 108,380 60,459 119,621 18,795 108,389 391,516 180,916 108,173 111,462 3,335 922,586 Current Period Gross Charge Offs 18,795 108,389 391,516 180,916 108,173 Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 December 31, 2023, 2022 and 2021 The following tables present a summary of loans by category and risk rating separated by origination and loan class as of December 31, 2023 and 2022. The following tables present a summary of loans by category and risk rating separated by origination and loan class as of December 31, 2023 and 2022. Term Loans by Origination Year Term Loans by Origination Year 2023 2023 2022 2022 2021 2021 2020 2019 2019 2020 (In Thousands) (In Thousands) Prior Prior Revolving Revolving Loans Loans Total Total One- to four-family residential One- to four-family residential construction construction Satisfactory (1-4) Satisfactory (1-4) Watch (5) Watch (5) Special Mention (6) Special Mention (6) Classified (7-9) Classified (7-9) Total Total $ Current Period Gross Charge Offs Current Period Gross Charge Offs Subdivision construction Subdivision construction Satisfactory (1-4) Satisfactory (1-4) Watch (5) Watch (5) Special Mention (6) Special Mention (6) Classified (7-9) Classified (7-9) Total Total Current Period Gross Charge Offs Current Period Gross Charge Offs $ 12,528 $ 12,528 $ — — — — — — 12,528 12,528 — — 9,878 $ 9,878 $ — — — — — — 9,878 9,878 — — 41 $ 41 $ — — — — — — 41 41 — — 532 — — — 532 — 532 — — — 532 — 1,022 1,022 — — — — — — 1,022 1,022 — — Construction and land development Construction and land development Satisfactory (1-4) Satisfactory (1-4) Watch (5) Watch (5) Special Mention (6) Special Mention (6) Classified (7-9) Classified (7-9) Total Total Current Period Gross Charge Offs Current Period Gross Charge Offs 14,860 14,860 — — — — — — 14,860 14,860 — — 12,564 12,564 — — — — — — 12,564 12,564 — — Other construction Other construction Satisfactory (1-4) Satisfactory (1-4) Watch (5) Watch (5) Special Mention (6) Special Mention (6) Classified (7-9) Classified (7-9) Total Total Current Period Gross Charge Offs Current Period Gross Charge Offs One- to four-family residential One- to four-family residential Satisfactory (1-4) Satisfactory (1-4) Watch (5) Watch (5) Special Mention (6) Special Mention (6) Classified (7-9) Classified (7-9) Total Total Current Period Gross Charge Offs Current Period Gross Charge Offs Other residential Other residential Satisfactory (1-4) Satisfactory (1-4) Watch (5) Watch (5) Special Mention (6) Special Mention (6) Classified (7-9) Classified (7-9) Total Total Current Period Gross Charge Offs Current Period Gross Charge Offs 60,895 60,895 — — — — — — 60,895 60,895 — — 422,727 422,727 — — — — — — 422,727 422,727 — — 66,733 66,733 — — — — — — 66,733 66,733 — — 330,489 330,489 — — — — — — 330,489 330,489 — — 18,795 18,795 — — — — — — 18,795 18,795 — — 108,389 108,389 — — — — — — 108,389 108,389 — — (Table continues on page 100) 21,333 21,333 — — — — — — 21,333 21,333 — — 5,658 5,658 — — — — — — 5,658 5,658 — — 203,918 203,918 — — — — — — 203,918 203,918 — — 203,781 203,781 — — — — 543 543 204,324 204,324 — — 391,516 391,516 — — — — — — 391,516 391,516 — — 99 — $ — $ — — — — — — — — — — 43 43 — — — — — — 43 43 — — 3,682 3,682 — — — — — — 3,682 3,682 — — 15,867 15,867 — — — — — — 15,867 15,867 — — 108,232 108,232 — — — — 148 148 108,380 108,380 — — 180,916 180,916 — — — — — — 180,916 180,916 — — — $ — $ — — — — — — — — — — — $ — $ — — — — — — — — — — 7,181 $ 7,181 $ — — — — — — 7,181 7,181 — — 29,628 29,628 — — — — — — 29,628 29,628 — — 64 64 — — — — — — 64 64 — — 5,458 5,458 — — — — — — 5,458 5,458 — — — — — — — — — — — — — — 365 365 — — — — — — 365 365 — — — — — — — — — — — — — — 23,359 23,359 — — — — — — 23,359 23,359 — — 4,531 4,531 — — — — — — 4,531 4,531 — — 878 878 — — — — 384 384 1,262 1,262 — — 47,631 47,631 — — — — 384 384 48,015 48,015 — — — — — — — — — — — — — — — — — — — — — — — — — — 703,407 703,407 — — — — — — 703,407 703,407 — — 60,288 60,288 171 171 — — — — 60,459 60,459 — — 118,570 118,570 862 862 — — 189 189 119,621 119,621 11 11 483 46 — — 529 20 483 46 — — 529 20 888,576 888,576 1,079 1,079 — — 880 880 890,535 890,535 31 31 108,173 108,173 — — — — — — 108,173 108,173 — — 111,462 111,462 — — 12,322 12,322 7,163 7,163 130,947 130,947 — — 3,335 3,335 — — — — — — 3,335 3,335 — — 922,586 922,586 — — 12,322 12,322 7,163 7,163 942,071 942,071 — — Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Revolving Loans 2019 Total Total Prior Term Loans by Origination Year (Table continued from page 99) 624,515 5,348 4,396 10,552 644,811 — 624,515 5,348 — $ 4,396 55,044 — 10,552 1,369 — — 644,811 — — — — 56,413 — 1,030 Commercial real estate Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Commercial real estate Current Period Gross Charge Offs One- to four-family residential Satisfactory (1-4) construction Commercial business Watch (5) Satisfactory (1-4) Special Mention (6) Satisfactory (1-4) Watch (5) Classified (7-9) Watch (5) Special Mention (6) Special Mention (6) Total Classified (7-9) Classified (7-9) Current Period Gross Charge Offs Total Current Period Gross Charge Offs The following tables present a summary of loans by category and risk rating separated by origination and loan Great Southern Bancorp, Inc. class as of December 31, 2023 and 2022. 53,158 161,680 237,822 284,738 Notes to Consolidated Financial Statements 154 — — — December 31, 2023, 2022 and 2021 — — — — — — — — 2021 2022 2023 237,822 284,738 161,834 53,158 — — — — 53,158 161,680 284,738 154 — — $ — $ 9,878 $ 12,528 $ — — — 58,551 10,043 92,224 — — — — — — — — — — — — — 1,186 — 161,834 284,738 53,158 — — — — — — — — — — 9,878 12,528 10,043 93,410 58,551 — — — — 7 — 58,551 10,043 92,224 — — — 532 64 1,022 — 1,186 — 828 12,010 16,629 — — — — — — 3 3 — — — — — — — 10,043 93,410 58,551 — — — — 42 — — 7 — 64 1,022 532 831 12,055 16,629 — — — 18 135 4 828 12,010 16,629 3 3 — 5,458 12,564 14,860 — — — 346,534 1,274,041 302,681 — — — — 42 — 328 3 — — — — — 1,186 — 831 12,055 16,629 — — — — 42 — 18 135 4 5,458 12,564 14,860 346,862 $ 1,275,272 $ $ 302,681 $ — — — 18 $ 142 $ 4 $ 1,274,041 302,681 3 — 422,727 60,895 1,186 — — — 42 — — — 1,275,272 $ $ 302,681 $ — — 422,727 60,895 142 $ 4 $ — — 103,393 — — — 2020 103,393 (In Thousands) — 103,393 — — $ — 15,371 — — — — — 103,393 — 27 — — 15,398 — — 15,371 — 43 — 2,811 — 27 6 — — 15,398 — — — 43 2,817 — 3 2,811 6 3,682 — 430,315 — — 6 — — 2,817 — 175 3 3,682 430,496 $ — 3 $ 237,822 — 41 $ — 30,361 — — — — 3,840 237,822 — 4 — 41 34,205 — — 30,361 — 21,333 3,840 6,163 — 4 21 — — 34,205 — 12 — 21,333 6,196 — 24 6,163 21 5,658 — 1,100,593 — 12 21 — 3,840 6,196 — 559 24 5,658 1,105,013 $ — 24 $ Commercial business Current Period Gross Charge Offs Satisfactory (1-4) Subdivision construction Watch (5) Consumer Satisfactory (1-4) Special Mention (6) Satisfactory (1-4) Watch (5) Classified (7-9) Watch (5) Special Mention (6) Special Mention (6) Total Classified (7-9) Classified (7-9) Current Period Gross Charge Offs Total Current Period Gross Charge Offs Current Period Gross Charge Offs Consumer Satisfactory (1-4) Watch (5) Combined Satisfactory (1-4) Special Mention (6) Satisfactory (1-4) Watch (5) Classified (7-9) Watch (5) Special Mention (6) Special Mention (6) Total Classified (7-9) Classified (7-9) Current Period Gross Charge Offs Total Current Period Gross Charge Offs Combined Satisfactory (1-4) Other construction Watch (5) Satisfactory (1-4) Special Mention (6) Watch (5) Classified (7-9) Special Mention (6) Classified (7-9) Current Period Gross Charge Offs $ Current Period Gross Charge Offs 12,089 201 4,531 — 926,576 — 49 7,780 — 16,718 12,339 — 17,953 1,493 4,531 969,027 $ — 2,534 $ 1,100,593 21 203,918 3,840 — 559 — 1,105,013 $ — 203,918 24 $ — 346,534 328 — — — — — 346,862 $ — — 18 $ — 430,315 6 15,867 — — 175 — 430,496 $ — 15,867 3 $ — 926,576 7,780 — 16,718 — 17,953 — 969,027 $ — — 2,534 $ — 55,044 1,369 365 — 12,089 — — 201 — — 56,413 — 49 1,030 365 12,339 — 1,493 Current Period Gross Charge Offs $ Construction and land development Total Total Total Total 35,276 — — — 35,276 — 35,276 — 7,181 $ — 57,177 — — — — 4,900 35,276 — — — 7,181 62,077 — — 57,177 — — 4,900 122,166 — — 154 — 8 62,077 — 9 — — 122,337 — 97 172,696 122,166 388 154 47,631 878 8 8 4,607,236 226,496 — — 112 9 8,338 200 — — 26,652 4,908 173,204 122,337 384 384 19,122 393 1,754 97 48,015 1,262 231,997 $ 4,661,348 — — 2,822 97 $ 226,496 200 — 4,908 — 393 — — — 97 $ — 4,607,236 8,338 703,407 26,652 — 19,122 — 231,997 $ 4,661,348 — 703,407 2,822 — 1,500,582 5,502 4,396 10,552 1,521,032 — Total 1,500,582 5,502 29,628 4,396 318,771 — 10,552 1,369 — 9,926 1,521,032 — 31 — 29,628 330,097 — 1,037 318,771 1,369 23,359 9,926 172,696 — 31 388 — 8 330,097 — 112 1,037 23,359 173,204 — 1,754 One- to four-family residential Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Current Period Gross Charge Offs Other residential Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Current Period Gross Charge Offs 66,733 — — — 66,733 — 18,795 — — — 18,795 — 330,489 — — — 330,489 — 108,389 — — — 108,389 — 203,781 — — 543 204,324 — 391,516 — — — 391,516 — 100 108,232 — — 148 108,380 — 180,916 — — — 180,916 — 60,288 171 — — 60,459 — 108,173 — — — 108,173 — 118,570 862 — 189 119,621 11 111,462 — 12,322 7,163 130,947 — 483 46 — — 529 20 3,335 — — — 3,335 — 888,576 1,079 — 880 890,535 31 922,586 — 12,322 7,163 942,071 — One- to four-family residential construction Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Current Period Gross Charge Offs Subdivision construction Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Current Period Gross Charge Offs Construction and land development Current Period Gross Charge Offs Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Other construction Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Current Period Gross Charge Offs One- to four-family residential Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Other residential Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Term Loans by Origination Year 2022 2021 2020 2019 2018 Prior Loans Total Revolving (In Thousands) $ 21,885 $ 7,265 $ 1,391 $ — $ 3,308 $ 33,849 — — — 21,885 — — — — 7,265 — — — — 1,391 — 4,478 25,864 — — — 4,478 — — — — 25,864 — 800 — — — 800 — — $ — — — — — 203 — — — 203 — — — — — — 588 — — — 588 — 3,308 33,849 — — — — — — — — — — — — — — 32,067 — — — 32,067 — 16,746 6,914 4,866 7,338 3,990 613 41,229 — — — 16,746 — — — — 6,914 — — — — 4,866 — — — — 7,338 — — — — 3,990 — — — 384 997 84 — — 384 41,613 84 340,886 219,504 128,509 73,162 39,685 113,512 446,125 176,340 21,713 113,512 446,125 176,340 — — — — — — — — — — — 83,822 — — — — — — — — — — — — — — — — — — — 158 — — — — — — — — 21,713 — 179 — — 73,341 — — — — — — — — — — — 97,236 1,341 — 1,832 39 123,538 3,338 — — — — — — — — — 687 57 — 79 823 1 — — — — 757,690 — — — — 757,690 899,669 1,665 — 2,069 903,403 40 3,338 — — — 83,822 133,648 168,232 142,630 122,614 3,939 778,423 — $ — — — — — 134 — — — 134 — 762 — — — 762 — — — — — — — 88 — — — — — — — Current Period Gross Charge Offs 133,648 168,232 142,630 122,614 126,876 3,939 781,761 Current Period Gross Charge Offs 340,886 219,504 128,667 39,773 100,409 Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 December 31, 2023, 2022 and 2021 Term Loans by Origination Year Term Loans by Origination Year 2022 2022 2021 2021 2020 2020 2019 2019 (In Thousands) (In Thousands) 2018 2018 Prior Prior Revolving Revolving Loans Loans Total Total One- to four-family residential One- to four-family residential construction Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) construction Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) $ Total Total Current Period Gross Charge Offs Current Period Gross Charge Offs 21,885 $ $ 21,885 $ — — — — — — 21,885 21,885 — — 7,265 $ 7,265 $ — — — — — — 7,265 7,265 — — 1,391 $ 1,391 $ — — — — — — 1,391 1,391 — — Subdivision construction Subdivision construction Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Total Current Period Gross Charge Offs Current Period Gross Charge Offs 4,478 4,478 — — — — — — 4,478 4,478 — — 25,864 25,864 — — — — — — 25,864 25,864 — — 800 800 — — — — — — 800 800 — — Construction and land development Construction and land development — $ — $ — — — — — — — — — — 203 203 — — — — — — 203 203 — — Current Period Gross Charge Offs Current Period Gross Charge Offs Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Total Other construction Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Other construction Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Total Current Period Gross Charge Offs Current Period Gross Charge Offs One- to four-family residential One- to four-family residential Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Total Current Period Gross Charge Offs Current Period Gross Charge Offs 16,746 16,746 — — — — — — 16,746 16,746 — — 113,512 113,512 — — — — — — 113,512 113,512 — — 340,886 340,886 — — — — — — 340,886 340,886 — — 6,914 6,914 — — — — — — 6,914 6,914 — — 4,866 4,866 — — — — — — 4,866 4,866 — — 7,338 7,338 — — — — — — 7,338 7,338 — — 446,125 446,125 — — — — — — 446,125 446,125 — — 176,340 176,340 — — — — — — 176,340 176,340 — — 219,504 219,504 — — — — — — 219,504 219,504 — — 128,509 128,509 — — — — 158 158 128,667 128,667 — — 21,713 21,713 — — — — — — 21,713 21,713 — — 73,162 73,162 179 179 — — — — 73,341 73,341 — — — $ — $ — — — — — — — — — — — $ — — — — — — $ — — — — — 3,308 $ 3,308 $ — — — — — — 3,308 3,308 — — 33,849 33,849 — — — — — — 33,849 33,849 — — 134 134 — — — — — — 134 134 — — 762 762 — — — — — — 762 762 — — — — — — — — — — — — — — 588 588 — — — — — — 588 588 — — — — — — — — — — — — — — 32,067 32,067 — — — — — — 32,067 32,067 — — 3,990 3,990 — — — — — — 3,990 3,990 — — — — — — — — — — — — — — 613 — — 384 997 84 613 — — 384 997 84 41,229 41,229 — — — — 384 384 41,613 41,613 84 84 — — — — — — — — — — — — 757,690 757,690 — — — — — — 757,690 757,690 — — 39,685 39,685 88 88 — — — — 39,773 39,773 — — 97,236 97,236 1,341 1,341 — — 1,832 1,832 100,409 100,409 39 39 687 687 57 57 — — 79 79 823 823 1 1 899,669 899,669 1,665 1,665 — — 2,069 2,069 903,403 903,403 40 40 Other residential Other residential Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Total Current Period Gross Charge Offs Current Period Gross Charge Offs 83,822 83,822 — — — — — — 83,822 83,822 — — 133,648 133,648 — — — — — — 133,648 133,648 — — 168,232 168,232 — — — — — — 168,232 168,232 — — 142,630 142,630 — — — — — — 142,630 142,630 — — 122,614 122,614 — — — — — — 122,614 122,614 — — 123,538 123,538 3,338 3,338 — — — — 126,876 126,876 — — 3,939 3,939 — — — — — — 3,939 3,939 — — 778,423 778,423 3,338 3,338 — — — — 781,761 781,761 — — (Table continues on page 102) 101 (Table continued from page 101) 2018 Term Loans by Origination Year Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements Great Southern Bancorp, Inc. December 31, 2023, 2022 and 2021 Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. 221,341 185,682 109,939 Notes to Consolidated Financial Statements — — — — — — December 31, 2023, 2022 and 2021 — — — 2020 2022 109,939 185,682 221,341 — — — 221,341 185,682 109,939 — — — — $ 1,391 $ 21,885 $ $ 45,349 9,309 39,645 — — — — — — — — — — — — — — — — — — — — — 185,682 109,939 221,341 — — — — — — — 1,391 21,885 9,309 39,645 45,349 — — — — — — 45,349 9,309 39,645 — — — 134 800 4,478 3,263 5,711 21,309 — — — — — — — — — — — — — — — — — — — — — 45,349 9,309 39,645 — 2 9 — — — 134 800 4,478 3,265 5,720 21,309 — — — 59 7 19 3,263 5,711 21,309 — — — 762 4,866 16,746 361,449 635,433 869,328 — — — — — — 88 — — — 9 2 — — — — — — 5,720 21,309 3,265 — — — 2 167 — 59 7 19 762 4,866 16,746 361,539 $ 635,600 $ $ 869,328 $ — — — 59 $ 7 $ 19 $ 869,328 — 113,512 — — — — — $ 869,328 $ 113,512 19 $ — 171,484 — — — 2021 171,484 — 171,484 — 7,265 $ 66,258 — — — — — — — 171,484 — — 7,265 66,258 — — 66,258 — 25,864 11,168 — — 28 — — — — 66,258 11 — 25,864 11,207 — 66 11,168 28 6,914 1,088,230 — — 28 11 — — 11,207 — 11 66 6,914 1,088,269 $ — 66 $ 1,088,230 28 446,125 — — 11 — — 1,088,269 $ 446,125 66 $ — 203,426 — — — 2019 203,426 (In Thousands) — 203,426 — — $ 15,505 — — — — — — — 203,426 — — — 15,505 — — 15,505 — 203 2,708 — — 7 — — — — 15,505 — — 203 2,715 — 49 2,708 7 7,338 466,685 — — 186 — — — 2,715 — — 49 7,338 466,871 $ — 49 $ 361,449 88 — — — 2 — — 361,539 $ — 59 $ — 635,433 — 176,340 — — 167 — — 635,600 $ 176,340 7 $ — 466,685 186 21,713 — — — — — 466,871 $ 21,713 49 $ — Commercial real estate Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Current Period Gross Charge Offs Commercial real estate One- to four-family residential Satisfactory (1-4) construction Commercial business Watch (5) Satisfactory (1-4) Satisfactory (1-4) Special Mention (6) Watch (5) Watch (5) Classified (7-9) Special Mention (6) Special Mention (6) Classified (7-9) Total Classified (7-9) Current Period Gross Charge Offs Total Current Period Gross Charge Offs Total Total Current Period Gross Charge Offs Construction and land development Consumer Satisfactory (1-4) Watch (5) Special Mention (6) Total Classified (7-9) Total Current Period Gross Charge Offs Commercial business Satisfactory (1-4) Subdivision construction Watch (5) Satisfactory (1-4) Special Mention (6) Watch (5) Classified (7-9) Special Mention (6) Classified (7-9) Current Period Gross Charge Offs Current Period Gross Charge Offs Consumer Satisfactory (1-4) Watch (5) Satisfactory (1-4) Special Mention (6) Watch (5) Classified (7-9) Special Mention (6) Classified (7-9) Current Period Gross Charge Offs Current Period Gross Charge Offs Combined Satisfactory (1-4) Other construction Watch (5) Satisfactory (1-4) Special Mention (6) Watch (5) Classified (7-9) Special Mention (6) Classified (7-9) Current Period Gross Charge Offs $ Current Period Gross Charge Offs Combined Satisfactory (1-4) Watch (5) Special Mention (6) Total Classified (7-9) Total Current Period Gross Charge Offs $ Total Total Total 577,216 23,338 — 1,579 602,133 44 36,658 — — Revolving — Loans 36,658 — 1,505,746 23,338 — 1,579 1,530,663 44 Total Prior 577,216 23,338 — $ 65,307 — — 34 1,579 — — — 602,133 394 44 — 65,735 — — 65,307 34 588 16,380 — — 160 394 — — — 65,735 248 — 588 16,788 — 1,594 36,658 — 3,308 $ 64,088 — — — — — — — 36,658 191 — 3,308 64,279 — 51 1,505,746 23,338 33,849 305,461 — — 34 1,579 — — — 1,530,663 585 44 33,849 306,080 — 51 64,088 — — 132,792 — — 100 191 — — — 64,279 359 51 — 133,251 — 156 305,461 34 32,067 193,331 — — 295 585 — — — 306,080 629 51 32,067 194,255 — 1,950 193,331 16,380 132,792 295 100 160 41,229 613 3,990 4,547,465 242,085 884,255 — — — — — — 28,670 157 28,211 629 359 248 — — — — — — 194,255 16,788 133,251 384 384 — 4,053 5,246 1,013 1,950 156 1,594 41,613 997 3,990 916,519 $ 243,255 $ 4,581,381 84 84 — 2,169 1,677 $ 292 $ 884,255 28,211 — — — 4,053 — — — 1,677 $ — 4,547,465 242,085 28,670 157 757,690 — — — — — 5,246 1,013 — — — — 916,519 $ 243,255 $ 4,581,381 757,690 — 292 $ 2,169 — — One- to four-family residential Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Current Period Gross Charge Offs 340,886 — — — 340,886 — Other residential Satisfactory (1-4) Watch (5) Special Mention (6) Classified (7-9) Total Current Period Gross Charge Offs 83,822 — — — 83,822 — 219,504 — — — 219,504 — 133,648 — — — 133,648 — 128,509 — — 158 128,667 — 168,232 — — — 168,232 — 73,162 179 — — 73,341 — 142,630 — — — 142,630 — 39,685 88 — — 39,773 — 122,614 — — — 122,614 — 97,236 1,341 — 1,832 100,409 39 123,538 3,338 — — 126,876 — 687 57 — 79 823 1 3,939 — — — 3,939 — 899,669 1,665 — 2,069 903,403 40 778,423 3,338 — — 781,761 — 102 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Certain of the Bank’s real estate loans are pledged as collateral for borrowings as set forth in Notes 9 and 11. Certain directors and executive officers of the Company and the Bank, and their affiliates, are customers of and had transactions with the Bank in the ordinary course of business. Except for the interest rates on loans secured by personal residences, in the opinion of management, all loans included in such transactions were made on substantially the same terms as those prevailing at the time for comparable transactions with unrelated parties. Generally, residential first mortgage loans and home equity lines of credit to all employees and directors have been granted at interest rates equal to the Bank’s cost of funds, subject to annual adjustments in the case of residential first mortgage loans and monthly adjustments in the case of home equity lines of credit. At December 31, 2023 and 2022, loans outstanding to these directors and executive officers, and their related interests, are summarized as follows: 2023 2022 (In Thousands) Balance, beginning of year New loans Payments Balance, end of year $ $ 7,950 10,694 (2,618) 16,026 $ $ 10,097 3,079 (5,226) 7,950 Note 4: FDIC-Assisted Acquired Loans On March 20, 2009, Great Southern Bank entered into a purchase and assumption agreement with loss share with the Federal Deposit Insurance Corporation (FDIC) to assume all of the deposits (excluding brokered deposits) and acquire certain assets of TeamBank, N.A., a full service commercial bank headquartered in Paola, Kansas. The related loss sharing agreement was terminated early, effective April 26, 2016, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. On September 4, 2009, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Vantus Bank, a full service thrift headquartered in Sioux City, Iowa. The related loss sharing agreement was terminated early, effective April 26, 2016, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. On October 7, 2011, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Sun Security Bank, a full service bank headquartered in Ellington, Missouri. The related loss sharing agreement was terminated early, effective April 26, 2016, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. On April 27, 2012, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Inter Savings Bank, FSB (“InterBank”), a full service bank headquartered in Maple Grove, Minnesota. The related loss sharing agreement was terminated early, effective June 9, 2017, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Certain of the Bank’s real estate loans are pledged as collateral for borrowings as set forth in Notes 9 and 11. Certain directors and executive officers of the Company and the Bank, and their affiliates, are customers of and had transactions with the Bank in the ordinary course of business. Except for the interest rates on loans secured by personal residences, in the opinion of management, all loans included in such transactions were made on substantially the same terms as those prevailing at the time for comparable transactions with unrelated parties. Generally, residential first mortgage loans and home equity lines of credit to all employees and directors have been granted at interest rates equal to the Bank’s cost of funds, subject to annual adjustments in the case of residential first mortgage loans and monthly adjustments in the case of home equity lines of credit. At December 31, 2023 and 2022, loans outstanding to these directors and executive officers, and their related interests, are summarized as follows: 2023 2022 (In Thousands) Balance, beginning of year New loans Payments Balance, end of year $ $ 7,950 10,694 (2,618) 16,026 $ $ 10,097 3,079 (5,226) 7,950 Note 4: FDIC-Assisted Acquired Loans On March 20, 2009, Great Southern Bank entered into a purchase and assumption agreement with loss share with the Federal Deposit Insurance Corporation (FDIC) to assume all of the deposits (excluding brokered deposits) and acquire certain assets of TeamBank, N.A., a full service commercial bank headquartered in Paola, Kansas. The related loss sharing agreement was terminated early, effective April 26, 2016, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. On September 4, 2009, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Vantus Bank, a full service thrift headquartered in Sioux City, Iowa. The related loss sharing agreement was terminated early, effective April 26, 2016, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. On October 7, 2011, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Sun Security Bank, a full service bank headquartered in Ellington, Missouri. The related loss sharing agreement was terminated early, effective April 26, 2016, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. On April 27, 2012, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Inter Savings Bank, FSB (“InterBank”), a full service bank headquartered in Maple Grove, Minnesota. The related loss sharing agreement was terminated early, effective June 9, 2017, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. 103 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 On June 20, 2014, Great Southern Bank entered into a purchase and assumption agreement with the FDIC to purchase a substantial portion of the loans and investment securities, as well as certain other assets, and assume all of the deposits, as well as certain other liabilities, of Valley Bank, a full-service bank headquartered in Moline, Illinois, with significant operations in Iowa. This transaction did not include a loss sharing agreement. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. At December 31, 2022, other real estate owned not acquired through foreclosure included two properties, both of which were branch locations that were closed and held for sale; these were sold during the year ended December 31, 2023, as indicated above. During the year ended December 31, 2022, two former branch location were sold. During the year ended December 31, 2022, no additional valuation write-downs were recorded on branch locations that were closed and held for sale. The following table presents the balances of the acquired loans related to the various FDIC-assisted transactions at December 31, 2023 and 2022. At December 31, 2023 and 2022, residential mortgage loans totaling $-0- and $173,000, respectively, were in the process of foreclosure. TeamBank Vantus Bank Sun Security Bank (In Thousands) InterBank Valley Bank Expenses applicable to other real estate owned and repossessions for the years ended December 31, 2023, 2022 and 2021, included the following: December 31, 2023 Carrying value of loans receivable December 31, 2022 Carrying value of loans receivable $ 2,191 $ 3,052 $ 6,263 $ 19,727 $ 10,323 Net gains on sales of other real estate owned and repossessions $ (42) $ (149) $ Valuation write-downs Operating expenses, net of rental income $ 2,703 $ 3,983 $ 7,221 $ 24,402 $ 12,750 Note 5: Other Real Estate Owned and Repossessions Note 6: Premises and Equipment Major classifications of other real estate owned at December 31, 2023 and 2022, were as follows: Major classifications of premises and equipment at December 31, 2023 and 2022, stated at cost, were as follows: Foreclosed assets held for sale and repossessions One- to four-family construction Subdivision construction Land development Commercial construction One- to four-family residential Other residential Commercial real estate Commercial business Consumer Foreclosed assets held for sale and repossessions Other real estate owned not acquired through foreclosure Other real estate owned and repossessions 2023 2022 (In Thousands) — — — — — — — — 23 23 — 23 $ $ — — — — — — — — 50 50 183 233 $ $ At December 31, 2023, there was no other real estate owned not acquired through foreclosure, as two former branch locations were sold during the year. 104 2023 2022 2021 (In Thousands) 81 272 23 485 (282) 211 698 $ 311 $ 359 $ 627 2023 2022 (In Thousands) $ $ 39,617 107,602 70,162 6,621 224,002 85,411 39,622 105,096 67,505 7,397 219,620 78,550 $ 138,591 $ 141,070 Land Buildings and improvements Furniture, fixtures and equipment Operating leases right of use asset Less accumulated depreciation Leases. In 2019, the Company adopted ASU 2016-02, Leases (Topic 842). Adoption of this ASU resulted in the Company initially recognizing a right of use asset and corresponding lease liability of $9.5 million. The amount of the right of use asset and corresponding lease liability will fluctuate based on the Company’s lease terminations, new leases and lease modifications and renewals. As of December 31, 2023, the lease right of use asset value was $6.6 million and the corresponding lease liability was $6.9 million. As of December 31, 2022, the lease right of use asset value was $7.4 million and the corresponding lease liability was $7.6 million. At December 31, 2023, expected lease terms ranged from 0.3 years to 14.9 years with a weighted-average lease term of 6.9 years. The weighted-average discount rate was 3.79%. For the years ended December 31, 2023, 2022 and 2021, lease expense was $1.7 million, $1.6 million and $1.5 million, respectively. The Company’s short-term leases related to offsite ATMs have both fixed and variable lease payment components, based on the number of transactions at the various ATMs. The variable portion of these lease payments is not material and the total lease expense related to ATMs was $ 317,000, $ 307,000 and $ 307,000 for the years ended December 31, 2023, 2022 and 2021, respectively. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 At December 31, 2022, other real estate owned not acquired through foreclosure included two properties, both of which were branch locations that were closed and held for sale; these were sold during the year ended December 31, 2023, as indicated above. During the year ended December 31, 2022, two former branch location were sold. During the year ended December 31, 2022, no additional valuation write-downs were recorded on branch locations that were closed and held for sale. At December 31, 2023 and 2022, residential mortgage loans totaling $-0- and $173,000, respectively, were in the process of foreclosure. Expenses applicable to other real estate owned and repossessions for the years ended December 31, 2023, 2022 and 2021, included the following: 2023 2022 (In Thousands) 2021 Net gains on sales of other real estate owned and repossessions Valuation write-downs Operating expenses, net of rental income $ (42) $ 81 272 (149) $ 23 485 (282) 211 698 $ 311 $ 359 $ 627 Note 6: Premises and Equipment Major classifications of premises and equipment at December 31, 2023 and 2022, stated at cost, were as follows: Land Buildings and improvements Furniture, fixtures and equipment Operating leases right of use asset Less accumulated depreciation 2023 2022 (In Thousands) $ $ 39,617 107,602 70,162 6,621 224,002 85,411 39,622 105,096 67,505 7,397 219,620 78,550 $ 138,591 $ 141,070 Leases. In 2019, the Company adopted ASU 2016-02, Leases (Topic 842). Adoption of this ASU resulted in the Company initially recognizing a right of use asset and corresponding lease liability of $9.5 million. The amount of the right of use asset and corresponding lease liability will fluctuate based on the Company’s lease terminations, new leases and lease modifications and renewals. As of December 31, 2023, the lease right of use asset value was $6.6 million and the corresponding lease liability was $6.9 million. As of December 31, 2022, the lease right of use asset value was $7.4 million and the corresponding lease liability was $7.6 million. At December 31, 2023, expected lease terms ranged from 0.3 years to 14.9 years with a weighted-average lease term of 6.9 years. The weighted-average discount rate was 3.79%. For the years ended December 31, 2023, 2022 and 2021, lease expense was $1.7 million, $1.6 million and $1.5 million, respectively. The Company’s short-term leases related to offsite ATMs have both fixed and variable lease payment components, based on the number of transactions at the various ATMs. The variable portion of these lease payments is not material and the total lease expense related to ATMs was $ 317,000, $ 307,000 and $ 307,000 for the years ended December 31, 2023, 2022 and 2021, respectively. 105 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 The Company does not sublease any of its leased facilities; however, it does lease to other third parties portions of facilities that it owns. In terms of being the lessor in these circumstances, all of these lease agreements are classified as operating leases. In the years ended December 31, 2023, 2022 and 2021, income recognized from these lease agreements was $1.3 million, $1.2 million, and $1.2 million respectively, and was included in occupancy and equipment expense. Note 7: Investments in Limited Partnerships Investments in Affordable Housing Partnerships Statement of Financial Condition Operating leases right of use asset Operating leases liability Statement of Income Operating lease costs classified as occupancy and equipment expense (includes short-term lease costs and amortization of right of use asset) Supplemental Cash Flow Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases Right of use assets obtained in exchange for lease obligations: At or For the Year Ended December 31, 2023 December 31, 2022 (In Thousands) $ $ 6,621 6,870 $ $ 7,397 7,599 $ 1,740 $ 1,579 $ 1,681 $ 1,547 Operating leases $ 296 $ 618 At December 31, 2023, future expected lease payments for leases with terms exceeding one year were as follows (in thousands): 2024 2025 2026 2027 2028 Thereafter Future lease payments expected $ 1,313 1,297 1,241 1,172 900 1,899 7,822 Less interest portion of lease payments (952) Lease liability $ 6,870 106 The Company has invested in certain limited partnerships that were formed to develop and operate apartments and single-family houses designed as high-quality affordable housing for lower income tenants throughout Missouri and contiguous states. At December 31, 2023, the Company had 22 such investments, with a net carrying value of $66.3 million. At December 31, 2022, the Company had 19 such investments, with a net carrying value of $38.4 million. Due to the Company’s inability to exercise any significant influence over any of the investments in Affordable Housing Partnerships, they all are accounted for using the proportional amortization method. Each of the partnerships must meet the regulatory requirements for affordable housing for a minimum 15-year compliance period to fully utilize the tax credits. If the partnerships cease to qualify during the compliance period, the credits may be denied for any period in which the projects are not in compliance and a portion of the credits previously taken may be subject to recapture with interest. The remaining federal affordable housing tax credits to be utilized through 2034 were $75.9 million as of December 31, 2023, assuming no tax credit recapture events occur and all projects currently under construction are completed as planned. Amortization of the investments in partnerships is expected to be approximately $68.9 million, assuming all projects currently under construction are completed and funded as planned. The Company’s usage of federal affordable housing tax credits approximated $7.7 million, $4.9 million and $4.9 million during 2023, 2022 and 2021, respectively. Investment amortization was $7.2 million, $4.4 million and $4.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. Investments in Community Development Entities The Company has invested in certain limited partnerships that were formed to develop and operate business and real estate projects located in low-income communities. At December 31, 2023 the Company had one such investment, with a net carrying value of $361,000. At December 31, 2022, the Company had one such investment, with a net carrying value of $465,000. Due to the Company’s inability to exercise any significant influence over any of the investments in qualified Community Development Entities, they are all accounted for using the cost method. Each of the partnerships provides federal New Market Tax Credits over a seven-year credit allowance period. In each of the first three years, credits totaling five percent of the original investment are allowed on the credit allowance dates and for the final four years, credits totaling six percent of the original investment are allowed on the credit allowance dates. Each of the partnerships must be invested in a qualified Community Development Entity on each of the credit allowance dates during the seven-year period to utilize the tax credits. If the Community Development Entities cease to qualify during the seven-year period, the credits may be denied for any credit allowance date and a portion of the credits previously taken may be subject to recapture with interest. The investments in the Community Development Entities cannot be redeemed before the end of the seven-year period. The Company’s usage of federal New Market Tax Credits approximated $100,000, $100,000 and $100,000 during 2023, 2022 and 2021, respectively. Investment amortization amounted to $83,000, $83,000 and $86,000 for the years ended December 31, 2023, 2022 and 2021, respectively. Investments in Limited Partnerships for Federal Rehabilitation/Historic Tax Credits From time to time, the Company has invested in certain limited partnerships that were formed to provide certain federal rehabilitation/historic tax credits. At December 31, 2023 the Company had one such investment, with a net carrying value of $415,000. At December 31, 2022 the Company had one such investment, with a net carrying value of $629,000. Under prior tax law, the Company utilized these credits in their entirety in the year the project was placed in service and the impact to the Consolidated Statements of Income has not been material. Currently, such partnerships provide federal rehabilitation/historic tax credits over a five-year credit allowance period. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Note 7: Investments in Limited Partnerships Investments in Affordable Housing Partnerships The Company has invested in certain limited partnerships that were formed to develop and operate apartments and single-family houses designed as high-quality affordable housing for lower income tenants throughout Missouri and contiguous states. At December 31, 2023, the Company had 22 such investments, with a net carrying value of $66.3 million. At December 31, 2022, the Company had 19 such investments, with a net carrying value of $38.4 million. Due to the Company’s inability to exercise any significant influence over any of the investments in Affordable Housing Partnerships, they all are accounted for using the proportional amortization method. Each of the partnerships must meet the regulatory requirements for affordable housing for a minimum 15-year compliance period to fully utilize the tax credits. If the partnerships cease to qualify during the compliance period, the credits may be denied for any period in which the projects are not in compliance and a portion of the credits previously taken may be subject to recapture with interest. The remaining federal affordable housing tax credits to be utilized through 2034 were $75.9 million as of December 31, 2023, assuming no tax credit recapture events occur and all projects currently under construction are completed as planned. Amortization of the investments in partnerships is expected to be approximately $68.9 million, assuming all projects currently under construction are completed and funded as planned. The Company’s usage of federal affordable housing tax credits approximated $7.7 million, $4.9 million and $4.9 million during 2023, 2022 and 2021, respectively. Investment amortization was $7.2 million, $4.4 million and $4.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. Investments in Community Development Entities The Company has invested in certain limited partnerships that were formed to develop and operate business and real estate projects located in low-income communities. At December 31, 2023 the Company had one such investment, with a net carrying value of $361,000. At December 31, 2022, the Company had one such investment, with a net carrying value of $465,000. Due to the Company’s inability to exercise any significant influence over any of the investments in qualified Community Development Entities, they are all accounted for using the cost method. Each of the partnerships provides federal New Market Tax Credits over a seven-year credit allowance period. In each of the first three years, credits totaling five percent of the original investment are allowed on the credit allowance dates and for the final four years, credits totaling six percent of the original investment are allowed on the credit allowance dates. Each of the partnerships must be invested in a qualified Community Development Entity on each of the credit allowance dates during the seven-year period to utilize the tax credits. If the Community Development Entities cease to qualify during the seven-year period, the credits may be denied for any credit allowance date and a portion of the credits previously taken may be subject to recapture with interest. The investments in the Community Development Entities cannot be redeemed before the end of the seven-year period. The Company’s usage of federal New Market Tax Credits approximated $100,000, $100,000 and $100,000 during 2023, 2022 and 2021, respectively. Investment amortization amounted to $83,000, $83,000 and $86,000 for the years ended December 31, 2023, 2022 and 2021, respectively. Investments in Limited Partnerships for Federal Rehabilitation/Historic Tax Credits From time to time, the Company has invested in certain limited partnerships that were formed to provide certain federal rehabilitation/historic tax credits. At December 31, 2023 the Company had one such investment, with a net carrying value of $415,000. At December 31, 2022 the Company had one such investment, with a net carrying value of $629,000. Under prior tax law, the Company utilized these credits in their entirety in the year the project was placed in service and the impact to the Consolidated Statements of Income has not been material. Currently, such partnerships provide federal rehabilitation/historic tax credits over a five-year credit allowance period. 107 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Investments in Limited Partnerships for State Tax Credits At December 31, 2023, scheduled maturities of certificates of deposit and brokered deposits were as follows: From time to time, the Company has invested in certain limited partnerships that were formed to provide certain state tax credits. The Company has primarily syndicated these tax credits and the impact to the Consolidated Statements of Income has not been material. Note 8: Deposits Deposits at December 31, 2023 and 2022, are summarized as follows: Weighted Average Interest Rate 2023 2022 (In Thousands, Except Interest Rates) — $ 895,496 $ 1,063,588 Non-interest-bearing accounts Interest-bearing checking and savings accounts 1.67% and 0.65% Certificate accounts 0% - 0.99% 1% - 1.99% 2% - 2.99% 3% - 3.99% 4% - 4.99% 5% and above Brokered deposits 5.20% and 4.03% 2,216,482 3,111,978 86,831 22,485 44,354 46,304 739,645 8,583 948,202 661,528 661,528 2,188,535 3,252,123 280,784 125,951 381,547 228,131 4,883 — 1,021,296 411,491 411,491 $ 4,721,708 $ 4,684,910 The weighted average interest rate on certificates of deposit was 3.79% and 1.93% at December 31, 2023 and 2022, respectively. The Bank utilizes brokered deposits as an additional funding source. The aggregate amount of brokered deposits was approximately $661.5 million and $411.5 million at December 31, 2023 and December 31, 2022, respectively. At December 31, 2023 and December 31, 2022, brokered deposits included $300.0 million and $150.0 million, respectively, of purchased funds through the IntraFi Financial network. These IntraFi Financial deposits have a rate of interest that floats daily with an index of effective federal funds rate plus a spread. At December 31, 2023, there were additional brokered deposits totaling $95.0 million that had variable rates of interest that reset monthly or quarterly and there were other brokered deposits totaling $185.3 million that had fixed rates of interest but are callable at the Bank’s discretion. At December 31, 2023, approximately 28% of the Company’s total deposits were uninsured, when including deposit accounts of consolidated subsidiaries of the Company and collateralized deposits of unaffiliated entities. Excluding deposit accounts of the Company’s consolidated subsidiaries, approximately 13% of the Company’s total deposits were uninsured at December 31, 2023. 108 2024 2025 2026 2027 2028 Thereafter Retail Brokered (In Thousands) Total $ $ $ 1,188,266 921,485 19,250 3,067 2,394 948 1,058 266,781 296,552 98,195 — — — 315,802 101,262 2,394 948 1,058 $ 948,202 $ 661,528 $ 1,609,730 A summary of interest expense on deposits for the years ended December 31, 2023, 2022 and 2021, is as follows: Checking and savings accounts $ $ $ Certificate accounts Brokered deposits Early withdrawal penalties 2023 2022 (In Thousands) 2021 28,579 29,796 30,719 (337) 5,968 8,788 6,162 (242) 4,023 8,150 989 (60) $ 88,757 $ 20,676 $ 13,102 Note 9: Advances From Federal Home Loan Bank At December 31, 2023 and 2022, there were no outstanding term advances from the Federal Home Loan Bank of Des Moines. At December 31, 2023, there were outstanding overnight borrowings from the Federal Home Loan Bank of Des Moines, which are included in Short-Term Borrowings. The Bank has pledged FHLB stock, investment securities and first mortgage loans free of other pledges, liens and encumbrances as collateral for outstanding advances. No investment securities were specifically pledged as collateral for FHLB borrowings at December 31, 2023 and 2022. Loans with carrying values of approximately $1.74 billion and $1.62 billion were pledged as collateral for outstanding advances at December 31, 2023 and 2022, respectively. The Bank had $919.1 million remaining available on its line of credit under a borrowing arrangement with the FHLB of Des Moines at December 31, 2023. Note 10: Short-Term Borrowings Short-term borrowings at December 31, 2023 and 2022, are summarized as follows: Notes payable – Community Development Equity Funds $ $ Securities sold under reverse repurchase agreements Overnight borrowings from the Federal Home Loan Bank 2023 2022 (In Thousands) 1,610 70,843 251,000 1,083 176,843 88,500 $ 323,453 $ 266,426 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 At December 31, 2023, scheduled maturities of certificates of deposit and brokered deposits were as follows: 2024 2025 2026 2027 2028 Thereafter Retail Brokered (In Thousands) Total $ 921,485 19,250 3,067 2,394 948 1,058 $ 266,781 296,552 98,195 — — — $ 1,188,266 315,802 101,262 2,394 948 1,058 $ 948,202 $ 661,528 $ 1,609,730 A summary of interest expense on deposits for the years ended December 31, 2023, 2022 and 2021, is as follows: 2023 2022 (In Thousands) 2021 Checking and savings accounts Certificate accounts Brokered deposits Early withdrawal penalties $ $ 28,579 29,796 30,719 (337) $ 5,968 8,788 6,162 (242) 4,023 8,150 989 (60) $ 88,757 $ 20,676 $ 13,102 Note 9: Advances From Federal Home Loan Bank At December 31, 2023 and 2022, there were no outstanding term advances from the Federal Home Loan Bank of Des Moines. At December 31, 2023, there were outstanding overnight borrowings from the Federal Home Loan Bank of Des Moines, which are included in Short-Term Borrowings. The Bank has pledged FHLB stock, investment securities and first mortgage loans free of other pledges, liens and encumbrances as collateral for outstanding advances. No investment securities were specifically pledged as collateral for FHLB borrowings at December 31, 2023 and 2022. Loans with carrying values of approximately $1.74 billion and $1.62 billion were pledged as collateral for outstanding advances at December 31, 2023 and 2022, respectively. The Bank had $919.1 million remaining available on its line of credit under a borrowing arrangement with the FHLB of Des Moines at December 31, 2023. Note 10: Short-Term Borrowings Short-term borrowings at December 31, 2023 and 2022, are summarized as follows: 2023 2022 (In Thousands) Notes payable – Community Development Equity Funds Securities sold under reverse repurchase agreements Overnight borrowings from the Federal Home Loan Bank $ $ 1,610 70,843 251,000 1,083 176,843 88,500 $ 323,453 $ 266,426 109 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 The Bank enters into sales of securities under agreements to repurchase (reverse repurchase agreements). Reverse repurchase agreements are treated as financings, and the obligations to repurchase securities sold are reflected as a liability in the statements of financial condition. The dollar amount of securities underlying the agreements remains in the asset accounts. Securities underlying the agreements are being held by the Bank during the agreement period. All agreements are written on a term of one-month or less. Short-term borrowings had weighted average interest rates of 4.76% at December 31, 2023, compared to 2.16% at December 31, 2022. Short-term borrowings averaged approximately $225.1 million and $181.1 million for the years ended December 31, 2023 and 2022, respectively. The maximum amounts outstanding at any month end were $410.6 million and $317.7 million, respectively, during those same years. The following table represents the Company’s securities sold under reverse repurchase agreements, which contractually mature daily, at December 31, 2023 and 2022: 2023 2022 (In Thousands) Mortgage-backed securities – GNMA, FNMA, FHLMC $ 70,843 $ 176,843 Note 11: Federal Reserve Bank Borrowings At December 31, 2023 and 2022, the Bank had $452.0 million and $397.0 million, respectively, available under a primary line-of-credit borrowing arrangement with the Federal Reserve Bank. The line is secured primarily by consumer and commercial loans. There were no amounts borrowed under this arrangement at December 31, 2023 or 2022. Subsequent to December 31, 2023, in January 2024 the Bank borrowed $180.0 million under the Federal Reserve Bank’s Bank Term Funding Program (BTFP). The borrowing, which matures in January 2025 and has a fixed interest rate of 4.83%, may be repaid in full or in part without penalty prior to its stated maturity date. The line is secured primarily by the Bank’s held-to-maturity investment securities, with total amount of assets pledged totaling approximately $191 million. These funds were primarily used to repay a portion of the Bank’s overnight borrowings from the FHLB. Note 12: Subordinated Debentures Issued to Capital Trusts In November 2006, Great Southern Capital Trust II (Trust II), a statutory trust formed by the Company for the purpose of issuing the securities, issued a $25.0 million aggregate liquidation amount of floating rate cumulative trust preferred securities. The Trust II securities bore a floating distribution rate equal to 90-day LIBOR plus 1.60% through June 30, 2023. After June 30, 2023, the Trust II securities bear a floating distribution rate equal to three-month CME Term SOFR, plus a spread adjustment for the change from LIBOR, plus 1.60%. The Trust II securities became redeemable at the Company’s option in February 2012, and if not sooner redeemed, mature on February 1, 2037. The Trust II securities were sold in a private transaction exempt from registration under the Securities Act of 1933, as amended. The gross proceeds of the offering were used to purchase Junior Subordinated Debentures from the Company totaling $25.8 million and bearing an interest rate identical to the distribution rate on the Trust II securities. The initial interest rate on the Trust II debentures was 6.98%. The interest rate was 7.24% and 6.04% at December 31, 2023 and 2022, respectively. 110 At December 31, 2023 and 2022, subordinated debentures issued to capital trusts were as follows: 2023 2022 (In Thousands) Subordinated debentures $ 25,774 $ 25,774 Note 13: Subordinated Notes On June 10, 2020, the Company completed the public offering and sale of $75.0 million of its subordinated notes. The notes are due June 15, 2030, and have a fixed interest rate of 5.50% until June 15, 2025, at which time the rate becomes floating at a rate expected to be equal to three-month term Secured Overnight Financing Rate (SOFR) plus 5.325%. The Company may call the notes at par beginning on June 15, 2025, and on any scheduled interest payment date thereafter. The notes were sold at par, resulting in net proceeds, after underwriting discounts and commissions, legal, accounting and other professional fees, of approximately $73.5 million. Total debt issuance costs of approximately $1.5 million were deferred and are being amortized over the expected life of the notes, which is five years. Amortization of the debt issuance costs during the years ended December 31, 2023 and 2022, totaled $297,000 and $293,000, respectively, and is included in interest expense on subordinated notes in the consolidated statements of income, resulting in an imputed interest rate of 5.92% and 5.95%, respectively. At December 31, 2023 and 2022, subordinated notes are summarized as follows: Subordinated notes Less: unamortized debt issuance costs Note 14: Income Taxes 2023 2022 (In Thousands) $ $ 75,000 421 74,579 $ $ 75,000 719 74,281 The Company files a consolidated federal income tax return. As of December 31, 2023 and 2022, retained earnings included approximately $17.5 million for which no deferred income tax liability had been recognized. This amount represents an allocation of income to bad debt deductions for tax purposes only for tax years prior to 1988. If the Bank were to liquidate, the entire amount would have to be recaptured and would create income for tax purposes only, which would be subject to the then-current corporate income tax rate. The unrecorded deferred income tax liability on the above amount was approximately $4.3 million and $4.3 million at December 31, 2023 and 2022, respectively. components: During the years ended December 31, 2023, 2022 and 2021, the provision for income taxes included these 2023 2022 (In Thousands) 2021 Taxes currently payable Deferred income taxes 14,559 2,985 $ 15,769 2,485 $ 16,025 3,712 Income taxes 17,544 $ 18,254 $ 19,737 $ $ Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 At December 31, 2023 and 2022, subordinated debentures issued to capital trusts were as follows: 2023 2022 (In Thousands) Subordinated debentures $ 25,774 $ 25,774 Note 13: Subordinated Notes On June 10, 2020, the Company completed the public offering and sale of $75.0 million of its subordinated notes. The notes are due June 15, 2030, and have a fixed interest rate of 5.50% until June 15, 2025, at which time the rate becomes floating at a rate expected to be equal to three-month term Secured Overnight Financing Rate (SOFR) plus 5.325%. The Company may call the notes at par beginning on June 15, 2025, and on any scheduled interest payment date thereafter. The notes were sold at par, resulting in net proceeds, after underwriting discounts and commissions, legal, accounting and other professional fees, of approximately $73.5 million. Total debt issuance costs of approximately $1.5 million were deferred and are being amortized over the expected life of the notes, which is five years. Amortization of the debt issuance costs during the years ended December 31, 2023 and 2022, totaled $297,000 and $293,000, respectively, and is included in interest expense on subordinated notes in the consolidated statements of income, resulting in an imputed interest rate of 5.92% and 5.95%, respectively. At December 31, 2023 and 2022, subordinated notes are summarized as follows: Subordinated notes Less: unamortized debt issuance costs Note 14: Income Taxes 2023 2022 (In Thousands) $ $ 75,000 421 74,579 $ $ 75,000 719 74,281 The Company files a consolidated federal income tax return. As of December 31, 2023 and 2022, retained earnings included approximately $17.5 million for which no deferred income tax liability had been recognized. This amount represents an allocation of income to bad debt deductions for tax purposes only for tax years prior to 1988. If the Bank were to liquidate, the entire amount would have to be recaptured and would create income for tax purposes only, which would be subject to the then-current corporate income tax rate. The unrecorded deferred income tax liability on the above amount was approximately $4.3 million and $4.3 million at December 31, 2023 and 2022, respectively. During the years ended December 31, 2023, 2022 and 2021, the provision for income taxes included these components: 2023 2022 (In Thousands) 2021 Taxes currently payable Deferred income taxes Income taxes 14,559 2,985 $ 15,769 2,485 $ 16,025 3,712 17,544 $ 18,254 $ 19,737 $ $ 111 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 The tax effects of temporary differences related to deferred taxes shown on the statements of financial condition were: $ Deferred tax assets Allowance for credit losses Liability for unfunded commitments Interest on nonperforming loans Accrued expenses and other Capital loss carryforward Unrealized loss on available-for-sale securities Unrealized loss on securities transferred to held-to- maturity securities Unrealized loss on active cash flow derivatives Income recognized for tax in excess of book related to terminated cash flow derivatives Deferred income Difference in basis for acquired assets and liabilities Deferred tax liabilities Tax depreciation in excess of book depreciation FHLB stock dividends Partnership tax credits Prepaid expenses Unrealized gain on securities transferred to held-to- maturity securities Unrealized gain on terminated cash flow derivatives Other December 31, 2023 2022 (In Thousands) 15,911 1,842 71 1,676 150 13,208 16 4,255 3,532 124 353 41,138 (7,697) (337) (998) (1,373) — (3,532) (277) (14,214) $ 15,618 3,153 66 1,341 67 15,407 — 7,695 5,530 290 686 49,853 (8,210) (337) (668) (1,196) (29) (5,530) (235) (16,205) Net deferred tax asset $ 26,924 $ 33,648 Reconciliations of the Company’s effective tax rates, for the years indicated, from continuing operations to the statutory corporate tax rates were as follows: Tax at statutory rate Nontaxable interest and dividends Tax credits State taxes Deferred tax rate change benefit Other 2023 2022 2021 21.0% (0.5) (2.7) 1.7 — 1.1 20.6% 21.0% (0.5) (1.6) 1.8 (0.6) (0.7) 19.4% 21.0% (0.3) (1.8) 1.3 — 0.7 20.9% The Company and its consolidated subsidiaries have not been audited recently by the Internal Revenue Service (IRS). As a result, federal tax years through December 31, 2019 are now closed. 112 The Company was previously under State of Missouri income and franchise tax examinations for its 2014 and 2015 tax years. The examinations concluded with one unresolved issue related to the exclusion of certain income in the calculation of Missouri income tax. The Missouri Department of Revenue denied the Company’s administrative protest regarding the 2014 and 2015 tax years’ examinations. In June 2021, the Company filed a formal protest with the Missouri Administrative Hearing Commission (MAHC), which has special jurisdiction to hear tax matters and is similar to a trial court, to continue defending the Company’s rights and associated tax position. The Company previously filed a motion for summary decision with the MAHC and, on January 26, 2024, the MAHC granted the motion in favor of the Company, upholding its position related to the exclusion of certain income in the calculation of Missouri income tax. In February 2024, the Missouri Department of Revenue confirmed to the Company in writing that it would not exercise its right to appeal the decision to the Missouri State Supreme Court. Note 15: Disclosures About Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Topic 820 also specifies a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:  Quoted prices in active markets for identical assets or liabilities (Level 1): Inputs that are quoted unadjusted prices in active markets for identical assets that the Company has the ability to access at the measurement date. An active market for the asset is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.  Other observable inputs (Level 2): Inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity including quoted prices for similar assets, quoted prices for securities in inactive markets and inputs derived principally from or corroborated by observable market data by correlation or other means.  Significant unobservable inputs (Level 3): Inputs that reflect assumptions of a source independent of the reporting entity or the reporting entity’s own assumptions that are supported by little or no market activity or observable inputs. Financial instruments are broken down by recurring or nonrecurring measurement status. Recurring assets are initially measured at fair value and are required to be remeasured at fair value in the financial statements at each reporting date. Assets measured on a nonrecurring basis are assets that, due to an event or circumstance, were required to be remeasured at fair value after initial recognition in the financial statements at some time during the reporting period. The Company considers transfers between the levels of the hierarchy to be recognized at the end of related reporting periods. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 The Company was previously under State of Missouri income and franchise tax examinations for its 2014 and 2015 tax years. The examinations concluded with one unresolved issue related to the exclusion of certain income in the calculation of Missouri income tax. The Missouri Department of Revenue denied the Company’s administrative protest regarding the 2014 and 2015 tax years’ examinations. In June 2021, the Company filed a formal protest with the Missouri Administrative Hearing Commission (MAHC), which has special jurisdiction to hear tax matters and is similar to a trial court, to continue defending the Company’s rights and associated tax position. The Company previously filed a motion for summary decision with the MAHC and, on January 26, 2024, the MAHC granted the motion in favor of the Company, upholding its position related to the exclusion of certain income in the calculation of Missouri income tax. In February 2024, the Missouri Department of Revenue confirmed to the Company in writing that it would not exercise its right to appeal the decision to the Missouri State Supreme Court. Note 15: Disclosures About Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Topic 820 also specifies a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:  Quoted prices in active markets for identical assets or liabilities (Level 1): Inputs that are quoted unadjusted prices in active markets for identical assets that the Company has the ability to access at the measurement date. An active market for the asset is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.  Other observable inputs (Level 2): Inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity including quoted prices for similar assets, quoted prices for securities in inactive markets and inputs derived principally from or corroborated by observable market data by correlation or other means.  Significant unobservable inputs (Level 3): Inputs that reflect assumptions of a source independent of the reporting entity or the reporting entity’s own assumptions that are supported by little or no market activity or observable inputs. Financial instruments are broken down by recurring or nonrecurring measurement status. Recurring assets are initially measured at fair value and are required to be remeasured at fair value in the financial statements at each reporting date. Assets measured on a nonrecurring basis are assets that, due to an event or circumstance, were required to be remeasured at fair value after initial recognition in the financial statements at some time during the reporting period. The Company considers transfers between the levels of the hierarchy to be recognized at the end of related reporting periods. 113 Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 December 31, 2023, 2022 and 2021 December 31, 2023, 2022 and 2021 Recurring Measurements Recurring Measurements Recurring Measurements The following table presents the fair value measurements of assets recognized in the accompanying balance sheets The following table presents the fair value measurements of assets recognized in the accompanying balance sheets The following table presents the fair value measurements of assets recognized in the accompanying balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2023 and 2022: measurements fall at December 31, 2023 and 2022: measurements fall at December 31, 2023 and 2022: Fair Value Measurements Using Fair Value Measurements Using Fair Value Measurements Using Quoted Prices Quoted Prices Quoted Prices in Active in Active in Active Markets Markets Markets for Identical for Identical for Identical Assets Assets Assets (Level 1) (Level 1) (Level 1) Other Other Other Observable Observable Observable Inputs Inputs Inputs (Level 2) (Level 2) (Level 2) Significant Significant Significant Unobservable Unobservable Unobservable Inputs Inputs Inputs (Level 3) (Level 3) (Level 3) (In Thousands) (In Thousands) (In Thousands) Fair Value Fair Value Fair Value December 31, 2023 December 31, 2023 December 31, 2023 Available-for-sale securities Available-for-sale securities Available-for-sale securities Agency mortgage-backed securities Agency mortgage-backed securities Agency mortgage-backed securities Agency collateralized mortgage obligations Agency collateralized mortgage obligations Agency collateralized mortgage obligations States and political subdivisions securities States and political subdivisions securities States and political subdivisions securities Small Business Administration securities Small Business Administration securities Small Business Administration securities Interest rate derivative asset Interest rate derivative asset Interest rate derivative asset Interest rate derivative liability Interest rate derivative liability Interest rate derivative liability December 31, 2022 December 31, 2022 December 31, 2022 Available-for-sale securities Available-for-sale securities Available-for-sale securities $ $ $ $ 280,231 $ 280,231 $ 280,231 75,946 75,946 75,946 58,137 58,137 58,137 63,893 63,893 63,893 8,205 8,205 8,205 (25,336) (25,336) (25,336) Agency mortgage-backed securities Agency mortgage-backed securities Agency mortgage-backed securities Agency collateralized mortgage obligations Agency collateralized mortgage obligations Agency collateralized mortgage obligations States and political subdivisions securities States and political subdivisions securities States and political subdivisions securities Small Business Administration securities Small Business Administration securities Small Business Administration securities Interest rate derivative asset Interest rate derivative asset Interest rate derivative asset Interest rate derivative liability Interest rate derivative liability Interest rate derivative liability $ $ $ $ 286,482 $ 286,482 $ 286,482 78,474 78,474 78,474 57,495 57,495 57,495 68,141 68,141 68,141 11,061 11,061 11,061 (42,097) (42,097) (42,097) $ $ $ $ $ $ — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — $ $ $ 280,231 280,231 280,231 75,946 75,946 75,946 58,137 58,137 58,137 63,893 63,893 63,893 8,205 8,205 8,205 (25,336) (25,336) (25,336) $ $ $ 286,482 286,482 286,482 78,474 78,474 78,474 57,495 57,495 57,495 68,141 68,141 68,141 11,061 11,061 11,061 (42,097) (42,097) (42,097) — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — The following is a description of inputs and valuation methodologies used for assets recorded at fair value on a The following is a description of inputs and valuation methodologies used for assets recorded at fair value on a The following is a description of inputs and valuation methodologies used for assets recorded at fair value on a recurring basis and recognized in the accompanying statements of financial condition at December 31, 2023 and recurring basis and recognized in the accompanying statements of financial condition at December 31, 2023 and recurring basis and recognized in the accompanying statements of financial condition at December 31, 2023 and 2022, as well as the general classification of such assets pursuant to the valuation hierarchy. There were no 2022, as well as the general classification of such assets pursuant to the valuation hierarchy. There were no 2022, as well as the general classification of such assets pursuant to the valuation hierarchy. There were no significant changes in the valuation techniques during the year ended December 31, 2023. significant changes in the valuation techniques during the year ended December 31, 2023. significant changes in the valuation techniques during the year ended December 31, 2023. Available-for-Sale Securities Available-for-Sale Securities Available-for-Sale Securities Investment securities available-for-sale are recorded at fair value on a recurring basis. The fair values used by the Investment securities available-for-sale are recorded at fair value on a recurring basis. The fair values used by the Investment securities available-for-sale are recorded at fair value on a recurring basis. The fair values used by the Company are obtained from an independent pricing service, which represent either quoted market prices for the Company are obtained from an independent pricing service, which represent either quoted market prices for the Company are obtained from an independent pricing service, which represent either quoted market prices for the identical asset or fair values determined by pricing models, or other model-based valuation techniques, that identical asset or fair values determined by pricing models, or other model-based valuation techniques, that identical asset or fair values determined by pricing models, or other model-based valuation techniques, that consider observable market data, such as interest rate volatilities, SOFR yield curve, credit spreads and prices consider observable market data, such as interest rate volatilities, SOFR yield curve, credit spreads and prices consider observable market data, such as interest rate volatilities, SOFR yield curve, credit spreads and prices from market makers and live trading systems. Recurring Level 2 securities include U.S. government agency from market makers and live trading systems. Recurring Level 2 securities include U.S. government agency from market makers and live trading systems. Recurring Level 2 securities include U.S. government agency securities, mortgage-backed securities, state and municipal bonds and certain other investments. Inputs used for securities, mortgage-backed securities, state and municipal bonds and certain other investments. Inputs used for securities, mortgage-backed securities, state and municipal bonds and certain other investments. Inputs used for valuing Level 2 securities include observable data that may include dealer quotes, benchmark yields, market valuing Level 2 securities include observable data that may include dealer quotes, benchmark yields, market valuing Level 2 securities include observable data that may include dealer quotes, benchmark yields, market spreads, live trading levels and market consensus prepayment speeds, among other things. Additional inputs include indicative values derived from the independent pricing service’s proprietary computerized models. There spreads, live trading levels and market consensus prepayment speeds, among other things. Additional inputs spreads, live trading levels and market consensus prepayment speeds, among other things. Additional inputs were no recurring Level 3 securities at December 31, 2023 or December 31, 2022. include indicative values derived from the independent pricing service’s proprietary computerized models. There include indicative values derived from the independent pricing service’s proprietary computerized models. There were no recurring Level 3 securities at December 31, 2023 or December 31, 2022. were no recurring Level 3 securities at December 31, 2023 or December 31, 2022. 114 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 The fair value is estimated using forward-looking interest rate curves and is determined using observable market rates and, therefore, are classified within Level 2 of the valuation hierarchy. Interest Rate Derivatives Nonrecurring Measurements The following tables present the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2023 and 2022: Fair Value Measurements Using Quoted Prices in Active Markets Assets (Level 1) Fair Value for Identical Observable Unobservable Other Significant Inputs (Level 2) Inputs (Level 3) (In Thousands) 7,372 $ — $ — $ 7,372 785 $ — $ — $ 785 December 31, 2023 Collateral-dependent loans December 31, 2022 Collateral-dependent loans $ $ Following is a description of the valuation methodologies used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying statements of financial condition, as well as the general classification of such assets pursuant to the valuation hierarchy. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below. Loans Held for Sale Mortgage loans held for sale are recorded at the lower of carrying value or fair value. The fair value of mortgage loans held for sale is based on what secondary markets are currently offering for portfolios with similar characteristics. As such, the Company classifies mortgage loans held for sale as Nonrecurring Level 2. Write- downs to fair value typically do not occur as the Company generally enters into commitments to sell individual mortgage loans at the time the loan is originated to reduce market risk. The Company typically does not have commercial loans held for sale. At December 31, 2023 and 2022, the aggregate fair value of mortgage loans held for sale was not materially different than their cost. Accordingly, no mortgage loans held for sale were marked down and reported at fair value. Collateral-Dependent Loans The Company records collateral-dependent loans as Nonrecurring Level 3. If a loan’s fair value as estimated by the Company is less than its carrying value, the Company either records a charge-off of the portion of the loan that exceeds the fair value or establishes a reserve within the allowance for credit losses specific to the loan. Loans for which such charge-offs or reserves were recorded during the years ended December 31, 2023 and December 31, 2022, are shown in the table above (net of reserves). Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Interest Rate Derivatives The fair value is estimated using forward-looking interest rate curves and is determined using observable market rates and, therefore, are classified within Level 2 of the valuation hierarchy. Nonrecurring Measurements The following tables present the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2023 and 2022: Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets (Level 1) Fair Value Other Significant Observable Unobservable Inputs (Level 2) Inputs (Level 3) (In Thousands) 7,372 $ — $ — $ 7,372 785 $ — $ — $ 785 December 31, 2023 Collateral-dependent loans December 31, 2022 Collateral-dependent loans $ $ Following is a description of the valuation methodologies used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying statements of financial condition, as well as the general classification of such assets pursuant to the valuation hierarchy. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below. Loans Held for Sale Mortgage loans held for sale are recorded at the lower of carrying value or fair value. The fair value of mortgage loans held for sale is based on what secondary markets are currently offering for portfolios with similar characteristics. As such, the Company classifies mortgage loans held for sale as Nonrecurring Level 2. Write- downs to fair value typically do not occur as the Company generally enters into commitments to sell individual mortgage loans at the time the loan is originated to reduce market risk. The Company typically does not have commercial loans held for sale. At December 31, 2023 and 2022, the aggregate fair value of mortgage loans held for sale was not materially different than their cost. Accordingly, no mortgage loans held for sale were marked down and reported at fair value. Collateral-Dependent Loans The Company records collateral-dependent loans as Nonrecurring Level 3. If a loan’s fair value as estimated by the Company is less than its carrying value, the Company either records a charge-off of the portion of the loan that exceeds the fair value or establishes a reserve within the allowance for credit losses specific to the loan. Loans for which such charge-offs or reserves were recorded during the years ended December 31, 2023 and December 31, 2022, are shown in the table above (net of reserves). 115 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Foreclosed Assets Held for Sale Foreclosed assets held for sale are initially recorded at fair value less estimated cost to sell at the date of foreclosure. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less estimated cost to sell. Foreclosed assets held for sale are classified within Level 3 of the fair value hierarchy. There were no foreclosed assets held for sale at December 31, 2023 or 2022. Fair Value of Financial Instruments The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying statements of financial condition at amounts other than fair value. Cash and Cash Equivalents and Federal Home Loan Bank Stock the reporting date. The carrying amount approximates fair value. Held-to-Maturity Securities Fair values for held-to-maturity securities are estimated based on quoted market prices of similar securities. For these securities, the Company obtains fair value measurements from an independent pricing service, which represent either quoted market prices for the identical asset or fair values determined by pricing models, or other model-based valuation techniques, that consider observable market data, such as interest rate volatilities, SOFR yield curve, credit spreads and prices from market makers and live trading systems. These securities include U.S. government agency securities, mortgage-backed securities, state and municipal bonds and certain other investments. Loans and Interest Receivable The fair value of loans is estimated on an exit price basis incorporating contractual cash flows, prepayment discount spreads, credit loss and liquidity premiums. Loans with similar characteristics are aggregated for purposes of the calculations. The carrying amount of accrued interest receivable approximates its fair value. Deposits and Accrued Interest Payable The fair value of demand deposits and savings accounts is the amount payable on demand at the reporting date, i.e., their carrying amounts. The fair value of fixed maturity certificates of deposit is estimated based on a discounted cash flow calculation using the average advances yield curve from 11 districts of the FHLB for the as of date. The carrying amount of accrued interest payable approximates its fair value. Short-Term Borrowings The carrying amount approximates fair value. Subordinated Debentures Issued to Capital Trusts The subordinated debentures have floating rates that reset quarterly. The carrying amount of these debentures approximates their fair value. 116 Subordinated Notes similar characteristics. The fair values used by the Company are obtained from independent sources and are derived from quoted market prices of the Company’s subordinated notes and quoted market prices of other subordinated debt instruments with Commitments to Originate Loans, Letters of Credit and Lines of Credit The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at The following table presents estimated fair values of the Company’s financial instruments not recorded at fair value in the financial statements. The fair values of certain of these instruments were calculated by discounting expected cash flows, which method involves significant judgments by management and uncertainties. Fair value is the estimated amount at which financial assets or liabilities could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Because no market exists for certain of these financial instruments and because management does not intend to sell these financial instruments, the Company does not know whether the fair values shown below represent values at which the respective financial instruments could be sold individually or in the aggregate. December 31, 2023 December 31, 2022 Carrying Amount Fair Value Hierarchy Level Carrying Amount Fair Value Hierarchy Level (Dollars in Thousands) Financial assets Cash and cash equivalents Held-to-maturity securities Mortgage loans held for sale Loans, net of allowance for credit losses Interest receivable Investment in FHLB stock and other assets Financial liabilities Deposits Short-term borrowings Subordinated debentures Subordinated notes Interest payable Unrecognized financial instruments (net of contractual value) Commitments to originate loans Letters of credit Lines of credit $ 211,333 $ 211,333 $ 168,520 $ 168,520 195,023 5,849 171,193 5,849 202,495 4,811 177,765 4,811 4,589,620 21,206 4,402,314 21,206 4,506,836 19,107 4,391,084 19,107 26,313 26,313 30,814 30,814 4,721,708 4,714,624 4,684,910 4,672,913 323,453 25,774 74,579 6,225 323,453 25,774 71,625 6,225 266,426 25,774 74,281 3,010 266,426 25,774 72,000 3,010 — 78 — — 78 — — 73 — — 73 — 1 2 2 3 3 3 3 3 3 2 3 3 3 3 1 2 2 3 3 3 3 3 3 2 3 3 3 3 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Subordinated Notes The fair values used by the Company are obtained from independent sources and are derived from quoted market prices of the Company’s subordinated notes and quoted market prices of other subordinated debt instruments with similar characteristics. Commitments to Originate Loans, Letters of Credit and Lines of Credit The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date. The following table presents estimated fair values of the Company’s financial instruments not recorded at fair value in the financial statements. The fair values of certain of these instruments were calculated by discounting expected cash flows, which method involves significant judgments by management and uncertainties. Fair value is the estimated amount at which financial assets or liabilities could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Because no market exists for certain of these financial instruments and because management does not intend to sell these financial instruments, the Company does not know whether the fair values shown below represent values at which the respective financial instruments could be sold individually or in the aggregate. December 31, 2023 December 31, 2022 Carrying Amount Fair Value Hierarchy Level (Dollars in Thousands) Carrying Amount Fair Value Hierarchy Level Financial assets Cash and cash equivalents Held-to-maturity securities Mortgage loans held for sale Loans, net of allowance for credit losses Interest receivable Investment in FHLB stock and other assets $ 211,333 195,023 5,849 $ 211,333 171,193 5,849 4,589,620 21,206 4,402,314 21,206 26,313 26,313 Financial liabilities Deposits Short-term borrowings Subordinated debentures Subordinated notes Interest payable 4,721,708 323,453 25,774 74,579 6,225 4,714,624 323,453 25,774 71,625 6,225 Unrecognized financial instruments (net of contractual value) Commitments to originate loans Letters of credit Lines of credit — 78 — — 78 — 117 1 2 2 3 3 3 3 3 3 2 3 3 3 3 $ 168,520 202,495 4,811 $ 168,520 177,765 4,811 4,506,836 19,107 4,391,084 19,107 30,814 30,814 4,684,910 266,426 25,774 74,281 3,010 4,672,913 266,426 25,774 72,000 3,010 — 73 — — 73 — 1 2 2 3 3 3 3 3 3 2 3 3 3 3 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Note 16: Derivatives and Hedging Activities Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its assets and liabilities. In the normal course of business, the Company may use derivative financial instruments (primarily interest rate swaps) from time to time to assist in its interest rate risk management. The Company has interest rate derivatives that result from a service provided to certain qualifying loan customers that are not used to manage interest rate risk in the Company’s assets or liabilities and are not designated in a qualifying hedging relationship. The Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions. In addition, the Company has interest rate derivatives that were designated in a qualified hedging relationship. Nondesignated Hedges The Company has interest rate swaps that are not designated in a qualifying hedging relationship. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain loan customers. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. At December 31, 2023, the Company had six interest rate swaps, totaling $82.2 million in notional amount, with commercial customers, and six interest rate swaps with the same notional amount with third parties related to its program. In addition, at December 31, 2023, the Company had one participation loan purchased totaling $8.6 million, in which the lead institution has an interest rate swap with their customer and the economics of the counterparty swap are passed along to the Company through the loan participation. At December 31, 2022, the Company had six interest rate swaps and one interest rate cap totaling $107.0 million in notional amount with commercial customers, and six interest rate swaps and one interest rate cap with the same notional amount with third parties related to its program. In addition, at December 31, 2022, the Company had one participation loan purchased totaling $8.8 million, in which the lead institution has an interest rate swap with their customer and the economics of the counterparty swap are passed along to the Company through the loan participation. During the years ended December 31, 2023, 2022 and 2021, the Company recognized net gains (losses) of $(337,000), $321,000 and $312,000, respectively, in non-interest income related to changes in the fair value of these swaps. Fair Value Hedges Interest Rate Swaps. As a strategy to maintain acceptable levels of exposure to the risk of changes in future cash flows due to interest rate fluctuations, in February 2023, the Company entered into interest rate swap transactions as part of its ongoing interest rate management strategies to hedge the risk of certain of its fixed rate brokered deposits. The total notional amount of the swaps was $95 million with a termination date of February 28, 2025. Under the terms of the swaps, the Company receives a fixed rate of interest of 4.65% and pays a floating rate of interest equal to USD-SOFR- COMPOUND plus a spread. The floating rate resets monthly and net settlements of interest due to/from the counterparty also occurs monthly. To the extent that the fixed rate of interest exceeds USD-SOFR-COMPOUND plus the spread, the Company receives net interest settlements which are recorded as a reduction of deposit interest expense. If USD-SOFR-COMPOUND plus the spread exceeds the fixed rate of interest, the Company is required to pay net settlements to the counterparty and record those net payments as interest expense on deposits. 118 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Subsequent to December 31, 2023, the Company elected to terminate these swaps prior to their contractual termination date in 2025. The Company received a net settlement payment from the swap counterparty totaling $26,500 upon termination. At the time of the early termination, the Company had recorded a market value adjustment to the brokered deposit of $163,000, which will now be amortized as a reduction of interest expense beginning in January 2024 through February 2025. Cash Flow Hedges Interest Rate Swap. As a strategy to maintain acceptable levels of exposure to the risk of changes in future cash flows due to interest rate fluctuations, in October 2018, the Company entered into an interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap was $400 million with a termination date of October 6, 2025. Under the terms of the swap, the Company received a fixed rate of interest of 3.018% and paid a floating rate of interest equal to one-month USD-LIBOR. The floating rate was reset monthly and net settlements of interest due to/from the counterparty also occurred monthly. To the extent that the fixed rate of interest exceeded one-month USD-LIBOR, the Company received net interest settlements which were recorded as loan interest income. If USD-LIBOR exceeded the fixed rate of interest, the Company was required to pay net settlements to the counterparty and record those net payments as a reduction of interest income on loans. In March 2020, the Company and its swap counterparty mutually agreed to terminate the $400 million interest rate swap prior to its contractual maturity. The Company was paid $45.9 million from its swap counterparty as a result of this termination. This $45.9 million, less the accrued interest portion and net of deferred income taxes, was reflected in the Company’s stockholders’ equity as part of Accumulated Other Comprehensive Income (AOCI) and a portion of it is being accreted to interest income on loans monthly through the original contractual termination date of October 6, 2025. This has the effect of reducing Accumulated Other Comprehensive Income and increasing Net Interest Income and Retained Earnings over the period. The Company recorded interest income of $8.1 million, $8.1 million and $8.1 million on this interest rate swap during the years ended December 31, 2023, 2022 and 2021, respectively. At December 31, 2023, the Company expected to have a sufficient amount of eligible variable rate loans to continue to accrete this interest income in future periods. If this expectation changes and the amount of eligible variable rate loans decreases significantly, the Company may be required to recognize this interest income more rapidly. In March 2022, the Company entered into an interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap was $300 million, with a termination date of March 1, 2024. Under the terms of the swap, the Company received a fixed rate of interest of 1.6725% and paid a floating rate of interest equal to one-month USD-LIBOR (or the equivalent replacement rate if USD-LIBOR rate is not available). The floating rate reset monthly and net settlements of interest due to/from the counterparty also occurred monthly. The floating rate of interest was 5.456% as of December 31, 2023. To the extent the floating rate of interest exceeded the fixed rate of interest, the Company was required to pay net settlements to the counterparty and record those net payments as a reduction of interest income on loans. If the fixed rate of interest exceeded the floating rate of interest, the Company received net interest settlements, which were recorded as loan interest income. The Company recorded a reduction of loan interest income related to this swap transaction of $10.4 million and $941,000 for the years ended December 31, 2023 and December 31, 2022, respectively. In July 2022, the Company entered into two additional interest rate swap transactions as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of each swap is $200 million with an effective date of May 1, 2023 and a termination date of May 1, 2028. Under the terms of one swap, the Company receives a fixed rate of interest of 2.628% and pays a floating rate of interest equal to one-month USD- SOFR OIS. Under the terms of the other swap, beginning in May 2023, the Company receives a fixed rate of interest of 5.725% and pays a floating rate of interest equal to one-month USD-Prime. In each case, the floating rate is reset monthly and net settlements of interest due to/from the counterparty also occur monthly. To the extent the fixed rate of interest exceeds the floating rate of interest, the Company receives net interest settlements, which is recorded as loan interest income. If the floating rate of interest exceeds the fixed rate of interest, the Company pays net settlements to the counterparty and records those net payments as a reduction of interest income on loans. At December 31, 2023, the Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Subsequent to December 31, 2023, the Company elected to terminate these swaps prior to their contractual termination date in 2025. The Company received a net settlement payment from the swap counterparty totaling $26,500 upon termination. At the time of the early termination, the Company had recorded a market value adjustment to the brokered deposit of $163,000, which will now be amortized as a reduction of interest expense beginning in January 2024 through February 2025. Cash Flow Hedges Interest Rate Swap. As a strategy to maintain acceptable levels of exposure to the risk of changes in future cash flows due to interest rate fluctuations, in October 2018, the Company entered into an interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap was $400 million with a termination date of October 6, 2025. Under the terms of the swap, the Company received a fixed rate of interest of 3.018% and paid a floating rate of interest equal to one-month USD-LIBOR. The floating rate was reset monthly and net settlements of interest due to/from the counterparty also occurred monthly. To the extent that the fixed rate of interest exceeded one-month USD-LIBOR, the Company received net interest settlements which were recorded as loan interest income. If USD-LIBOR exceeded the fixed rate of interest, the Company was required to pay net settlements to the counterparty and record those net payments as a reduction of interest income on loans. In March 2020, the Company and its swap counterparty mutually agreed to terminate the $400 million interest rate swap prior to its contractual maturity. The Company was paid $45.9 million from its swap counterparty as a result of this termination. This $45.9 million, less the accrued interest portion and net of deferred income taxes, was reflected in the Company’s stockholders’ equity as part of Accumulated Other Comprehensive Income (AOCI) and a portion of it is being accreted to interest income on loans monthly through the original contractual termination date of October 6, 2025. This has the effect of reducing Accumulated Other Comprehensive Income and increasing Net Interest Income and Retained Earnings over the period. The Company recorded interest income of $8.1 million, $8.1 million and $8.1 million on this interest rate swap during the years ended December 31, 2023, 2022 and 2021, respectively. At December 31, 2023, the Company expected to have a sufficient amount of eligible variable rate loans to continue to accrete this interest income in future periods. If this expectation changes and the amount of eligible variable rate loans decreases significantly, the Company may be required to recognize this interest income more rapidly. In March 2022, the Company entered into an interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap was $300 million, with a termination date of March 1, 2024. Under the terms of the swap, the Company received a fixed rate of interest of 1.6725% and paid a floating rate of interest equal to one-month USD-LIBOR (or the equivalent replacement rate if USD-LIBOR rate is not available). The floating rate reset monthly and net settlements of interest due to/from the counterparty also occurred monthly. The floating rate of interest was 5.456% as of December 31, 2023. To the extent the floating rate of interest exceeded the fixed rate of interest, the Company was required to pay net settlements to the counterparty and record those net payments as a reduction of interest income on loans. If the fixed rate of interest exceeded the floating rate of interest, the Company received net interest settlements, which were recorded as loan interest income. The Company recorded a reduction of loan interest income related to this swap transaction of $10.4 million and $941,000 for the years ended December 31, 2023 and December 31, 2022, respectively. In July 2022, the Company entered into two additional interest rate swap transactions as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of each swap is $200 million with an effective date of May 1, 2023 and a termination date of May 1, 2028. Under the terms of one swap, the Company receives a fixed rate of interest of 2.628% and pays a floating rate of interest equal to one-month USD- SOFR OIS. Under the terms of the other swap, beginning in May 2023, the Company receives a fixed rate of interest of 5.725% and pays a floating rate of interest equal to one-month USD-Prime. In each case, the floating rate is reset monthly and net settlements of interest due to/from the counterparty also occur monthly. To the extent the fixed rate of interest exceeds the floating rate of interest, the Company receives net interest settlements, which is recorded as loan interest income. If the floating rate of interest exceeds the fixed rate of interest, the Company pays net settlements to the counterparty and records those net payments as a reduction of interest income on loans. At December 31, 2023, the 119 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 USD-Prime rate was 8.50% and the one-month USD-SOFR OIS rate was 5.34446%. The Company recorded a reduction of loan interest income related to the two July 2022 interest rate swaps of $7.2 million for the year ended December 31, 2023. Net settlements on these two interest rate swaps began in May 2023. The effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affected earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. During each of the three months and year ended December 31, 2023 and 2022, the Company recognized no non-interest income related to changes in the fair value of these derivatives. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Statements of Financial Condition: Location in Consolidated Statements of Financial Condition Fair Value December 31, December 31, 2023 2022 (In Thousands) Derivatives designated as hedging instruments Derivative Liability Active interest rate swap Accrued expenses and other liabilities $ 17,296 $ 31,277 Total derivatives designated as hedging instruments Derivatives not designated as hedging instruments Derivative Assets Interest rate products Total derivatives not designated as hedging instruments Derivative Liabilities Interest rate products Total derivatives not designated as hedging instruments $ 17,296 $ 31,277 Agreements with Derivative Counterparties Prepaid expenses and other assets $ 8,205 $ 11,061 $ 8,205 $ 11,061 Accrued expenses and other liabilities $ 8,040 $ 10,820 $ 8,040 $ 10,820 120 The following table presents the effect of cash flow hedge accounting on the statements of comprehensive income: Cash Flow Hedges 2023 2022 2021 Amount of Gain (Loss) Recognized in AOCI Year Ended December 31 (In Thousands) Terminated interest rate swaps, net of income taxes Active interest rate swaps, net of income taxes $ $ (6,267) 10,541 4,274 $ $ (6,271) (23,582) (29,853) $ $ (6,271) — (6,271) The following table presents the effect of cash flow hedge accounting on the statements of income: Cash Flow Hedges 2023 2022 2021 Year Ended December 31 Interest Income Interest Expense Interest Income Interest Expense Interest Income Interest Expense (In Thousands) Terminated interest rate swaps Active interest rate swaps $ 8,122 $ — $ 8,123 $ — $ 8,123 $ — (17,618) — (941) — — — $ (9,496) $ — $ 7,182 $ — $ 8,123 $ — The Company has agreements with its derivative counterparties. If the Company defaults on any of its indebtedness, including a default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. If the Bank fails to maintain its status as a well-capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements. Similarly, the Company could be required to settle its obligations under certain of its agreements if certain regulatory events occur, such as the issuance of a formal directive, or if the Company’s credit rating is downgraded below a specified level. At December 31, 2023, the termination value of derivatives with our derivative dealer counterparties (related to loan level swaps with commercial lending customers and an active interest rate swap to hedge risk related to the Company’s variable rate loans) in an overall net asset position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $137,000. The Company has minimum collateral posting thresholds with its derivative dealer counterparties. At December 31, 2023, the Company had given cash collateral to one derivative counterparty of $11.6 million to cover its net fair value position. This counterparty position included collateral from the counterparty of $8.2 million for commercial lending swaps, collateral from the Company of $19.2 million for interest rate swaps related to variable rate loans and collateral from the Company of $44,000 for swaps related to brokered deposits. At December 31, 2022, the termination value of derivatives with our derivative dealer counterparties (related to loan level swaps with commercial lending customers) in a net asset position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $242,000. Additionally, the Company’s activity with one of its derivative counterparties met the level at which the minimum collateral posting thresholds take effect (collateral to be given by the Company) and the Company had posted collateral of $20.7 million to the derivative counterparty. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 The following table presents the effect of cash flow hedge accounting on the statements of comprehensive income: Cash Flow Hedges 2023 Amount of Gain (Loss) Recognized in AOCI Year Ended December 31 2022 (In Thousands) 2021 Terminated interest rate swaps, net of income taxes Active interest rate swaps, net of income taxes $ $ (6,267) 10,541 4,274 $ $ (6,271) (23,582) (29,853) $ $ (6,271) — (6,271) The following table presents the effect of cash flow hedge accounting on the statements of income: Cash Flow Hedges 2023 Year Ended December 31 2022 2021 Interest Income Interest Expense Interest Income (In Thousands) Interest Expense Interest Income Interest Expense Terminated interest rate swaps Active interest rate swaps $ 8,122 $ — $ 8,123 $ — $ 8,123 $ — (17,618) — (941) — — — $ (9,496) $ — $ 7,182 $ — $ 8,123 $ — Agreements with Derivative Counterparties The Company has agreements with its derivative counterparties. If the Company defaults on any of its indebtedness, including a default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. If the Bank fails to maintain its status as a well-capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements. Similarly, the Company could be required to settle its obligations under certain of its agreements if certain regulatory events occur, such as the issuance of a formal directive, or if the Company’s credit rating is downgraded below a specified level. At December 31, 2023, the termination value of derivatives with our derivative dealer counterparties (related to loan level swaps with commercial lending customers and an active interest rate swap to hedge risk related to the Company’s variable rate loans) in an overall net asset position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $137,000. The Company has minimum collateral posting thresholds with its derivative dealer counterparties. At December 31, 2023, the Company had given cash collateral to one derivative counterparty of $11.6 million to cover its net fair value position. This counterparty position included collateral from the counterparty of $8.2 million for commercial lending swaps, collateral from the Company of $19.2 million for interest rate swaps related to variable rate loans and collateral from the Company of $44,000 for swaps related to brokered deposits. At December 31, 2022, the termination value of derivatives with our derivative dealer counterparties (related to loan level swaps with commercial lending customers) in a net asset position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $242,000. Additionally, the Company’s activity with one of its derivative counterparties met the level at which the minimum collateral posting thresholds take effect (collateral to be given by the Company) and the Company had posted collateral of $20.7 million to the derivative counterparty. 121 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 If the Company had breached any of these provisions at December 31, 2023 or December 31, 2022, it could have been required to settle its obligations under the agreements at the termination value. Under the collateral agreements between the parties, either party may choose to provide cash or securities to satisfy its collateral requirements. At December 31, 2023, the Bank had granted unused lines of credit to borrowers aggregating approximately $1.0 billion and $204.0 million for commercial lines and open-end consumer lines, respectively. At December 31, 2022, the Bank had granted unused lines of credit to borrowers aggregating approximately $1.8 billion and $199.2 million for commercial lines and open-end consumer lines, respectively. Note 17: Commitments and Credit Risk Commitments to Originate Loans Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since a significant portion of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property and equipment, commercial real estate and residential real estate. At December 31, 2023 and 2022, the Bank had outstanding commitments to originate loans and fund commercial construction loans aggregating approximately $1.6 million and $97.1 million, respectively. The commitments extend over varying periods of time with the majority being disbursed within a 30- to 180-day period. Mortgage loans in the process of origination represent amounts that the Bank plans to fund within a normal period of 60 to 90 days, many of which are intended for sale to investors in the secondary market. Total mortgage loans in the process of origination amounted to approximately $12.3 million and $16.8 million at December 31, 2023 and 2022, respectively. Letters of Credit Standby letters of credit are irrevocable conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Financial standby letters of credit are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. Performance standby letters of credit are issued to guarantee performance of certain customers under nonfinancial contractual obligations. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loans to customers. Fees for letters of credit issued are initially recorded by the Bank as deferred revenue and are included in earnings at the termination of the respective agreements. Should the Bank be obligated to perform under the standby letters of credit, the Bank may seek recourse from the customer for reimbursement of amounts paid. The Company had total outstanding standby letters of credit amounting to approximately $16.5 million and $16.7 million at December 31, 2023 and 2022, respectively, with no letters of credit having terms over five years. Lines of Credit Lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Lines of credit generally have fixed expiration dates. Since a portion of the line may expire without being drawn upon, the total unused lines do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case by case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property and equipment, commercial real estate and residential real estate. The Bank uses the same credit policies in granting lines of credit as it does for on-balance-sheet instruments. 122 Credit Risk The Bank grants collateralized commercial, real estate and consumer loans primarily to customers in its market areas. Although the Bank has a diversified portfolio, loans (including FDIC-assisted acquired loans) aggregating approximately $788.6 million and $814.1 million at December 31, 2023 and 2022, respectively, were secured primarily by apartments, condominiums, residential and commercial land developments, industrial revenue bonds and other types of commercial properties in the St. Louis area. Note 18: Additional Cash Flow Information Noncash Investing and Financing Activities Real estate acquired in settlement of loans Transfer of available-for-sale securities to held-to-maturity Conversion of premises and equipment to foreclosed assets Dividends declared but not paid Additional Cash Payment Information Interest paid Income taxes paid Note 19: Employee Benefits Year Ended December 31, 2023 2022 2021 (In Thousands) $ 142 — — 4,722 $ 371 226,500 — 4,893 $ 1,154 — 1,215 4,727 100,405 7,888 24,999 10,258 22,700 12,959 The Company participates in the Pentegra Defined Benefit Plan for Financial Institutions (Pentegra DB Plan), a multiemployer defined benefit pension plan covering all employees who have met minimum service requirements. Effective July 1, 2006, this plan was closed to new participants. Employees already in the plan continue to accrue benefits. The Pentegra DB Plan’s Employer Identification Number is 13-5645888 and the Plan Number is 333. The Company’s policy is to fund pension cost accrued. Employer contributions charged to expense for this plan for the years ended December 31, 2023, 2022 and 2021, were approximately $1.7 million, $1.5 million and $2.1 million, respectively. The Company’s contributions to the Pentegra DB Plan were not more than 5% of the total contributions to the plan. The funded status of the plan as of July 1, 2023 and 2022, was 94.4% and 100.0%, respectively. The funded status was calculated by taking the market value of plan assets, which reflected contributions received through June 30, 2023 and 2022, respectively, divided by the funding target. No collective bargaining agreements are in place that require contributions to the Pentegra DB Plan. The Company has a defined contribution retirement plan covering substantially all employees. The Company matches 100% of the employee’s contribution on the first 3% of the employee’s compensation and also matches an additional 50% of the employee’s contribution on the next 2% of the employee’s compensation. Employer contributions charged to expense for this plan for the years ended December 31, 2023, 2022 and 2021, were approximately $1.8 million, $1.7 million and $1.7 million, respectively. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 At December 31, 2023, the Bank had granted unused lines of credit to borrowers aggregating approximately $1.0 billion and $204.0 million for commercial lines and open-end consumer lines, respectively. At December 31, 2022, the Bank had granted unused lines of credit to borrowers aggregating approximately $1.8 billion and $199.2 million for commercial lines and open-end consumer lines, respectively. Credit Risk The Bank grants collateralized commercial, real estate and consumer loans primarily to customers in its market areas. Although the Bank has a diversified portfolio, loans (including FDIC-assisted acquired loans) aggregating approximately $788.6 million and $814.1 million at December 31, 2023 and 2022, respectively, were secured primarily by apartments, condominiums, residential and commercial land developments, industrial revenue bonds and other types of commercial properties in the St. Louis area. Note 18: Additional Cash Flow Information 2023 Year Ended December 31, 2022 (In Thousands) 2021 Noncash Investing and Financing Activities Real estate acquired in settlement of loans Transfer of available-for-sale securities to held-to-maturity Conversion of premises and equipment to foreclosed assets Dividends declared but not paid $ 142 — — 4,722 $ 371 226,500 — 4,893 $ 1,154 — 1,215 4,727 Additional Cash Payment Information Interest paid Income taxes paid Note 19: Employee Benefits 100,405 7,888 24,999 10,258 22,700 12,959 The Company participates in the Pentegra Defined Benefit Plan for Financial Institutions (Pentegra DB Plan), a multiemployer defined benefit pension plan covering all employees who have met minimum service requirements. Effective July 1, 2006, this plan was closed to new participants. Employees already in the plan continue to accrue benefits. The Pentegra DB Plan’s Employer Identification Number is 13-5645888 and the Plan Number is 333. The Company’s policy is to fund pension cost accrued. Employer contributions charged to expense for this plan for the years ended December 31, 2023, 2022 and 2021, were approximately $1.7 million, $1.5 million and $2.1 million, respectively. The Company’s contributions to the Pentegra DB Plan were not more than 5% of the total contributions to the plan. The funded status of the plan as of July 1, 2023 and 2022, was 94.4% and 100.0%, respectively. The funded status was calculated by taking the market value of plan assets, which reflected contributions received through June 30, 2023 and 2022, respectively, divided by the funding target. No collective bargaining agreements are in place that require contributions to the Pentegra DB Plan. The Company has a defined contribution retirement plan covering substantially all employees. The Company matches 100% of the employee’s contribution on the first 3% of the employee’s compensation and also matches an additional 50% of the employee’s contribution on the next 2% of the employee’s compensation. Employer contributions charged to expense for this plan for the years ended December 31, 2023, 2022 and 2021, were approximately $1.8 million, $1.7 million and $1.7 million, respectively. 123 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Note 20: Stock Compensation Plans The table below summarizes transactions under the Company’s stock compensation plans, all of which related to stock options granted under such plans: The Company established the 2013 Equity Incentive Plan (the “2013 Plan”) for employees and directors of the Company and its subsidiaries. Under the plan, stock options or other awards could be granted with respect to 700,000 shares of common stock. On May 9, 2018, the Company’s stockholders approved the Great Southern Bancorp, Inc. 2018 Omnibus Incentive Plan (the “2018 Plan”). Upon the stockholders’ approval of the 2018 Plan, the 2013 Plan was frozen. As a result, no new stock options or other awards may be granted under the 2013 Plan; however, existing outstanding awards under the 2013 Plan were not affected. At December 31, 2023, 215,394 options were outstanding under the 2013 Plan. The Company established the 2018 Plan for employees and directors of the Company and its subsidiaries. Under the plan, stock options or other awards could be granted with respect to 800,000 shares of common stock. On May 11, 2022, the Company’s stockholders approved the Great Southern Bancorp, Inc. 2022 Omnibus Incentive Plan (the “2022 Plan”). Upon the stockholders’ approval of the 2022 Plan, the 2018 Plan was frozen. As a result, no new stock options or other awards may be granted under the 2018 Plan; however, existing outstanding awards under the 2018 Plan were not affected. At December 31, 2023, 612,511 options were outstanding under the 2018 Plan. The 2022 Plan provides for the grant from time to time to directors, emeritus directors, officers, employees and advisory directors of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units. The number of shares of common stock available for awards under the 2022 Plan is 900,000 (the “2022 Plan Limit”). Shares utilized for awards other than stock options and stock appreciation rights will be counted against the 2022 Plan Limit on a 2.5-to-1 basis. At December 31, 2023, 412,400 options were outstanding under the 2022 Plan. Stock options may be either incentive stock options or nonqualified stock options, and the option price must be at least equal to the fair value of the Company’s common stock on the date of grant. Options generally are granted for a 10-year term and generally become exercisable in four cumulative annual installments of 25% commencing two years from the date of grant. The Compensation Committee has discretion to accelerate a participant’s right to exercise an option. Stock awards may be granted upon terms and conditions determined solely at the discretion of the Compensation Committee. 124 Available to Shares Under Average Grant Option Exercise Price Weighted Balance, January 1, 2021 Granted from 2018 Plan Exercised Forfeited from terminated plan(s) Forfeited from current plan(s) Balance, December 31, 2021 Granted from 2018 Plan Forfeited from terminated plan(s) Termination of 2018 Plan Available to Grant from 2022 Plan Granted from 2022 Plan Exercised 245,350 (202,700 ) — — 971,107 $ 202,700 (91,285 ) (5,197 ) 44,022 (44,022 ) 86,672 1,033,303 (2,500 ) 39,235 (123,407 ) 900,000 (205,900 ) — 2,500 (39,235 ) — — 205,900 (136,801 ) Forfeited from current plan(s) 750 (750 ) Balance, December 31, 2022 Forfeited from terminated plan(s) Granted from 2022 Plan Exercised 694,850 1,064,917 (210,300 ) — — (9,100 ) 210,300 (22,762 ) Forfeited from current plan(s) 3,050 (3,050 ) Balance, December 31, 2023 487,600 1,240,305 $ 48.079 57.980 40.532 44.563 52.256 50.528 61.550 52.523 — — 61.505 42.149 61.550 53.671 51.123 53.166 38.830 61.550 53.857 The Company’s stock option grants contain terms that provide for a graded vesting schedule whereby portions of the options vest in increments over the requisite service period. These options typically vest one-fourth at the end of each of years two, three, four and five from the grant date. As provided for under FASB ASC 718, the Company has elected to recognize compensation expense for options with graded vesting schedules on a straight- line basis over the requisite service period for the entire option grant. In addition, ASC 718 requires companies to recognize compensation expense based on the estimated number of stock options for which service is expected to be rendered. The Company’s historical forfeitures of its share-based awards have not been significant. Forfeitures are estimated annually based on historical information. The fair value of each option award is estimated on the date of the grant using the Black-Scholes option pricing model with the following assumptions for the years ended December 31, 2023, 2022 and 2021: Expected dividends per share Risk-free interest rate Expected life of options Expected volatility Weighted average fair value of options granted during year 2023 2022 2021 $ 1.60 4.51% 6 years 23.69% $ 1.60 3.77% 6 years 23.70% $ 1.44 1.24% 5 years 28.33% $ 11.69 $ 13.46 $ 11.56 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 The table below summarizes transactions under the Company’s stock compensation plans, all of which related to stock options granted under such plans: Available to Grant Shares Under Option Weighted Average Exercise Price Balance, January 1, 2021 Granted from 2018 Plan Exercised Forfeited from terminated plan(s) Forfeited from current plan(s) Balance, December 31, 2021 Granted from 2018 Plan Forfeited from terminated plan(s) Termination of 2018 Plan Available to Grant from 2022 Plan Granted from 2022 Plan Exercised Forfeited from current plan(s) Balance, December 31, 2022 Forfeited from terminated plan(s) Granted from 2022 Plan Exercised Forfeited from current plan(s) 245,350 (202,700 ) — — 44,022 86,672 (2,500 ) 39,235 (123,407 ) 900,000 (205,900 ) — 750 694,850 — (210,300 ) — 3,050 971,107 $ 202,700 (91,285 ) (5,197 ) (44,022 ) 1,033,303 2,500 (39,235 ) — — 205,900 (136,801 ) (750 ) 1,064,917 (9,100 ) 210,300 (22,762 ) (3,050 ) Balance, December 31, 2023 487,600 1,240,305 $ 48.079 57.980 40.532 44.563 52.256 50.528 61.550 52.523 — — 61.505 42.149 61.550 53.671 51.123 53.166 38.830 61.550 53.857 The Company’s stock option grants contain terms that provide for a graded vesting schedule whereby portions of the options vest in increments over the requisite service period. These options typically vest one-fourth at the end of each of years two, three, four and five from the grant date. As provided for under FASB ASC 718, the Company has elected to recognize compensation expense for options with graded vesting schedules on a straight- line basis over the requisite service period for the entire option grant. In addition, ASC 718 requires companies to recognize compensation expense based on the estimated number of stock options for which service is expected to be rendered. The Company’s historical forfeitures of its share-based awards have not been significant. Forfeitures are estimated annually based on historical information. The fair value of each option award is estimated on the date of the grant using the Black-Scholes option pricing model with the following assumptions for the years ended December 31, 2023, 2022 and 2021: Expected dividends per share Risk-free interest rate Expected life of options Expected volatility Weighted average fair value of options granted during year 2023 2022 $ 1.60 4.51% 6 years 23.69% $ 1.60 3.77% 6 years 23.70% 2021 $ 1.44 1.24% 5 years 28.33% $ 11.69 $ 13.46 $ 11.56 125 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Expected volatilities are based on the historical volatility of the Company’s stock price over the measured period. The expected life of options granted is based on actual historical exercise behavior of all employees and directors and approximates the graded vesting period of the options. Expected dividends are based on the annualized dividends declared at the time of the option grant. For 2023 and 2022, the risk-free interest rate is based on the average of the five-year treasury rate and the seven-year treasury rate on the grant date of the options. For 2021, the risk-free interest rate is based on the five-year treasury rate on the grant date of the options. The following table presents the activity related to options under all plans for the year ended December 31, 2023: Options outstanding, January 1, 2023 Granted Exercised Forfeited Options outstanding, December 31, 2023 Weighted Average Exercise Price $ 53.671 53.166 38.830 53.741 53.857 Options 1,064,917 210,300 (22,762) (12,150) 1,240,305 Options exercisable, December 31, 2023 571,490 $ 51.688 Weighted Average Remaining Contractual Term 7.13 years 6.74 years 4.64 years For the years ended December 31, 2023, 2022 and 2021, options granted were 210,300, 208,400, and 202,700, respectively. The total intrinsic value (amount by which the fair value of the underlying stock exceeds the exercise price of an option on exercise date) of options exercised during the years ended December 31, 2023, 2022 and 2021, was $354,000, $2.6 million and $1.4 million, respectively. Cash received from the exercise of options for the years ended December 31, 2023, 2022 and 2021, was $884,000, $6.3 million and $3.7 million, respectively. The actual tax benefit realized for the tax deductions from option exercises totaled $212,000 million, $2.3 million and $1.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. The total intrinsic value of options outstanding at December 31, 2023, 2022 and 2021, was $7.4 million, $6.7 million and $9.2 million, respectively. The total intrinsic value of options exercisable at December 31, 2023, 2022 and 2021, was $4.5 million, $4.1 million and $5.3 million, respectively. The following table presents the activity related to nonvested options under all plans for the year ended December 31, 2023. Nonvested options, January 1, 2023 Granted Vested this period Nonvested options forfeited Weighted Average Exercise Price $ 56.073 53.166 53.882 56.347 Weighted Average Grant Date Fair Value $ 11.117 11.681 9.755 11.299 Options 636,844 210,300 (169,592) (8,737) For the years ended December 31, 2023, 2022 and 2021, compensation expense for stock option grants was $1.6 million, $1.4 million and $1.2 million, respectively. At December 31, 2023, there was $7.0 million of total unrecognized compensation cost related to nonvested options granted under the Company’s plans. This compensation cost is expected to be recognized through 2029, with the majority of this expense recognized in 2024 and 2025. The following table further summarizes information about stock options outstanding at December 31, 2023: Options Outstanding Weighted Average Weighted Remaining Average Options Exercisable Weighted Average Exercise Range of Number Contractual Exercise Number Exercise Prices Outstanding Term Price Exercisable Price $32.590 to 38.610 $41.300 to 41.740 $50.250 to 59.750 $60.150 to 62.010 26,906 200,538 668,327 344,534 0.96 years 5.71 years 6.87 years 7.55 years $ 33.317 41.628 54.686 60.971 26,906 119,930 316,725 107,929 $ 33.317 41.552 54.194 60.176 1,240,305 6.74 years $ 53.857 571,490 $ 51.688 Note 21: Significant Estimates and Concentrations GAAP requires disclosure of certain significant estimates and current vulnerabilities due to certain concentrations. Estimates related to the allowance for credit losses are reflected in Note 3. Current vulnerabilities due to certain concentrations of credit risk are discussed in the footnotes on loans, deposits and on commitments and credit risk. Note 22: Accumulated Other Comprehensive Income The components of accumulated other comprehensive income (AOCI), included in stockholders’ equity, are as follows: 2023 2022 (In Thousands) Net unrealized gain (loss) on available-for-sale securities $ (53,685) $ (62,622) Net unrealized gain (loss) on held-to-maturity securities (65) 118 Net unrealized gain (loss) on active derivatives used for cash flow hedges (17,296) (31,277) Net unrealized gain on terminated derivatives used for cash flow hedges 14,354 (56,692) 22,478 (71,303) 14,211 17,948 Tax effect Nonvested options, December 31, 2023 668,815 $ 55.711 $ 11.640 Net-of-tax amount $ (42,481) $ (53,355) 126 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 For the years ended December 31, 2023, 2022 and 2021, compensation expense for stock option grants was $1.6 million, $1.4 million and $1.2 million, respectively. At December 31, 2023, there was $7.0 million of total unrecognized compensation cost related to nonvested options granted under the Company’s plans. This compensation cost is expected to be recognized through 2029, with the majority of this expense recognized in 2024 and 2025. The following table further summarizes information about stock options outstanding at December 31, 2023: Range of Exercise Prices Number Outstanding Remaining Contractual Term Options Outstanding Weighted Average Weighted Average Exercise Options Exercisable Weighted Average Exercise Number Price Exercisable Price $32.590 to 38.610 $41.300 to 41.740 $50.250 to 59.750 $60.150 to 62.010 26,906 200,538 668,327 344,534 0.96 years 5.71 years 6.87 years 7.55 years $ 33.317 41.628 54.686 60.971 26,906 119,930 316,725 107,929 $ 33.317 41.552 54.194 60.176 1,240,305 6.74 years $ 53.857 571,490 $ 51.688 Note 21: Significant Estimates and Concentrations GAAP requires disclosure of certain significant estimates and current vulnerabilities due to certain concentrations. Estimates related to the allowance for credit losses are reflected in Note 3. Current vulnerabilities due to certain concentrations of credit risk are discussed in the footnotes on loans, deposits and on commitments and credit risk. Note 22: Accumulated Other Comprehensive Income The components of accumulated other comprehensive income (AOCI), included in stockholders’ equity, are as follows: 2023 2022 (In Thousands) Net unrealized gain (loss) on available-for-sale securities $ (53,685) $ (62,622) Net unrealized gain (loss) on held-to-maturity securities (65) 118 Net unrealized gain (loss) on active derivatives used for cash flow hedges (17,296) (31,277) Net unrealized gain on terminated derivatives used for cash flow hedges Tax effect 14,354 (56,692) 22,478 (71,303) 14,211 17,948 Net-of-tax amount $ (42,481) $ (53,355) 127 Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 December 31, 2023, 2022 and 2021 December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Amounts reclassified from AOCI and the affected line items in the statements of income during the years ended Amounts reclassified from AOCI and the affected line items in the statements of income during the years ended December 31, 2023, 2022 and 2021, were as follows: December 31, 2023, 2022 and 2021, were as follows: Amounts reclassified from AOCI and the affected line items in the statements of income during the years ended December 31, 2023, 2022 and 2021, were as follows: The Company’s and the Bank’s actual capital amounts and ratios are presented in the following table. No amount was deducted from capital for interest-rate risk. Amounts Reclassified Amounts Reclassified Amounts Reclassified from AOCI from AOCI from AOCI 2022 2022 2022 (In Thousands) (In Thousands) (In Thousands) 2023 2023 2023 2021 2021 2021 Affected Line Item in the Affected Line Item in the Affected Line Item in the Statements of Income Statements of Income Statements of Income Unrealized loss on available-for-sale Unrealized loss on available-for-sale Unrealized loss on available-for-sale securities securities securities $ $ $ — — — $ $ $ (130) $ (130) $ (130) $ — — — Net realized gains (losses) on available- Net realized gains (losses) on available- Net realized gains (losses) on available- for-sale securities (total reclassified for-sale securities (total reclassified for-sale securities (total reclassified amount before tax) amount before tax) amount before tax) Change in fair value of cash Change in fair value of cash Change in fair value of cash flow hedge flow hedge flow hedge 8,122 8,122 8,122 8,123 8,123 8,123 8,123 8,123 8,123 Amortization of realized gain on Amortization of realized gain on Amortization of realized gain on termination of cash flow hedge (total termination of cash flow hedge (total termination of cash flow hedge (total reclassification amount before tax) reclassification amount before tax) reclassification amount before tax) Income taxes Income taxes Income taxes (1,855) (1,855) (1,855) (1,820) (1,820) (1,820) (1,852) Tax (expense) benefit (1,852) Tax (expense) benefit (1,852) Tax (expense) benefit Total reclassifications out of AOCI Total reclassifications out of AOCI Total reclassifications out of AOCI $ $ $ 6,267 6,267 6,267 $ $ $ 6,173 6,173 6,173 $ $ $ 6,271 6,271 6,271 Note 23: Regulatory Matters Note 23: Regulatory Matters Note 23: Regulatory Matters The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct and material effect on the Company’s discretionary actions by regulators that, if undertaken, could have a direct and material effect on the Company’s discretionary actions by regulators that, if undertaken, could have a direct and material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and the Bank’s assets, liabilities and certain off-balance-sheet items as calculated under GAAP, regulatory reporting the Bank’s assets, liabilities and certain off-balance-sheet items as calculated under GAAP, regulatory reporting the Bank’s assets, liabilities and certain off-balance-sheet items as calculated under GAAP, regulatory reporting practices, and regulatory capital standards. The Company’s and the Bank’s capital amounts and classification are also practices, and regulatory capital standards. The Company’s and the Bank’s capital amounts and classification are also practices, and regulatory capital standards. The Company’s and the Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. subject to qualitative judgments by the regulators about components, risk weightings and other factors. subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulatory reporting standards to ensure capital adequacy require the Bank to Quantitative measures established by regulatory reporting standards to ensure capital adequacy require the Bank to Quantitative measures established by regulatory reporting standards to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below as of December 31, 2023) of Total and Tier I maintain minimum amounts and ratios (set forth in the table below as of December 31, 2023) of Total and Tier I maintain minimum amounts and ratios (set forth in the table below as of December 31, 2023) of Total and Tier I Capital (as defined) to risk-weighted assets (as defined), of Tier I Capital (as defined) to adjusted tangible assets (as Capital (as defined) to risk-weighted assets (as defined), of Tier I Capital (as defined) to adjusted tangible assets (as Capital (as defined) to risk-weighted assets (as defined), of Tier I Capital (as defined) to adjusted tangible assets (as defined) and of Common Equity Tier 1 Capital (as defined) to risk-weighted assets (as defined). Management defined) and of Common Equity Tier 1 Capital (as defined) to risk-weighted assets (as defined). Management defined) and of Common Equity Tier 1 Capital (as defined) to risk-weighted assets (as defined). Management believes, as of December 31, 2023, that the Bank met all capital adequacy requirements to which it was then subject. believes, as of December 31, 2023, that the Bank met all capital adequacy requirements to which it was then subject. believes, as of December 31, 2023, that the Bank met all capital adequacy requirements to which it was then subject. As of December 31, 2023, the most recent notification from the Bank’s regulators categorized the Bank as well As of December 31, 2023, the most recent notification from the Bank’s regulators categorized the Bank as well As of December 31, 2023, the most recent notification from the Bank’s regulators categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized as of capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized as of capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized as of December 31, 2023, the Bank must have maintained minimum Total capital, Tier I capital, Tier 1 Leverage capital and December 31, 2023, the Bank must have maintained minimum Total capital, Tier I capital, Tier 1 Leverage capital and December 31, 2023, the Bank must have maintained minimum Total capital, Tier I capital, Tier 1 Leverage capital and Common Equity Tier 1 capital ratios as set forth in the table. There are no conditions or events since that notification Common Equity Tier 1 capital ratios as set forth in the table. There are no conditions or events since that notification Common Equity Tier 1 capital ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank’s category. that management believes have changed the Bank’s category. that management believes have changed the Bank’s category. The Company and the Bank are subject to certain restrictions on the amount of dividends that may be declared The Company and the Bank are subject to certain restrictions on the amount of dividends that may be declared The Company and the Bank are subject to certain restrictions on the amount of dividends that may be declared without prior regulatory approval. At December 31, 2023 and 2022, the Company and the Bank exceeded their without prior regulatory approval. At December 31, 2023 and 2022, the Company and the Bank exceeded their without prior regulatory approval. At December 31, 2023 and 2022, the Company and the Bank exceeded their minimum capital requirements then in effect. The entities may not pay dividends which would reduce capital minimum capital requirements then in effect. The entities may not pay dividends which would reduce capital minimum capital requirements then in effect. The entities may not pay dividends which would reduce capital below the minimum requirements shown below. In addition to the minimum capital ratios, the capital rules below the minimum requirements shown below. In addition to the minimum capital ratios, the capital rules below the minimum requirements shown below. In addition to the minimum capital ratios, the capital rules include a capital conservation buffer, under which a banking organization must have Common Equity Tier 1 include a capital conservation buffer, under which a banking organization must have Common Equity Tier 1 include a capital conservation buffer, under which a banking organization must have Common Equity Tier 1 capital more than 2.5% above each of its minimum risk-based capital ratios in order to avoid restrictions on capital more than 2.5% above each of its minimum risk-based capital ratios in order to avoid restrictions on capital more than 2.5% above each of its minimum risk-based capital ratios in order to avoid restrictions on paying dividends, repurchasing shares, and paying certain discretionary bonuses. The net unrealized gain or loss paying dividends, repurchasing shares, and paying certain discretionary bonuses. The net unrealized gain or loss paying dividends, repurchasing shares, and paying certain discretionary bonuses. The net unrealized gain or loss on securities is not included in computing regulatory capital. on securities is not included in computing regulatory capital. on securities is not included in computing regulatory capital. 128 Actual Adequacy Purposes Amount Ratio Amount Ratio For Capital (Dollars In Thousands) To Be Well Capitalized Under Prompt Corrective Action Provisions Amount Ratio As of December 31, 2023 Total capital Tier I capital Tier I leverage capital Common equity Tier I capital Great Southern Bancorp, Inc. Great Southern Bank As of December 31, 2022 Total capital Tier I capital Tier I leverage capital Great Southern Bancorp, Inc. Great Southern Bank $ 770,885 15.2% $ $ 728,113 14.3% $ 406,994 406,744 8.0% N/A N/A 8.0% $ 508,430 10.0% Great Southern Bancorp, Inc. Great Southern Bank $ 632,279 12.4% $ $ 664,545 13.1% $ 305,246 305,058 6.0% N/A 6.0% $ 406,744 N/A 8.0% Great Southern Bancorp, Inc. Great Southern Bank $ 632,279 11.0% $ $ 664,545 11.6% $ 229,992 229,692 4.0% N/A 4.0% $ 287,115 N/A 5.0% $ 607,279 11.9% $ $ 664,545 13.1% $ 228,934 228,794 4.5% N/A 4.5% $ 330,480 N/A 6.5% Great Southern Bancorp, Inc. Great Southern Bank $ 746,287 13.5% $ $ 721,616 13.1% $ 440,767 440,683 8.0% N/A N/A 8.0% $ 550,854 10.0% Great Southern Bancorp, Inc. Great Southern Bank $ 607,807 11.0% $ $ 658,136 11.9% $ 330,575 330,512 6.0% N/A 6.0% $ 440,683 N/A 8.0% Great Southern Bancorp, Inc. Great Southern Bank $ 607,807 10.6% $ $ 658,136 11.5% $ 228,673 228,511 4.0% N/A 4.0% $ 285,638 N/A 5.0% Common equity Tier I capital Great Southern Bancorp, Inc. Great Southern Bank $ 582,807 10.6% $ $ 658,136 11.9% $ 247,932 247,884 4.5% N/A 4.5% $ 358,055 N/A 6.5% Note 24: Litigation Matters In the normal course of business, the Company and its subsidiaries are subject to pending and threatened legal actions, some of which seek substantial relief or damages. While the ultimate outcome of such legal proceedings cannot be predicted with certainty, after reviewing pending and threatened litigation with counsel, management believes at this time that the outcome of such litigation will not have a material adverse effect on the Company’s business, financial condition or results of operations. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Amounts reclassified from AOCI and the affected line items in the statements of income during the years ended December 31, 2023, 2022 and 2021, were as follows: The Company’s and the Bank’s actual capital amounts and ratios are presented in the following table. No amount was deducted from capital for interest-rate risk. Amounts Reclassified from AOCI 2023 2022 2021 (In Thousands) Affected Line Item in the Statements of Income Unrealized loss on available-for-sale securities $ — $ (130) $ — amount before tax) Net realized gains (losses) on available- for-sale securities (total reclassified Change in fair value of cash flow hedge 8,122 8,123 8,123 reclassification amount before tax) Amortization of realized gain on termination of cash flow hedge (total Income taxes (1,855) (1,820) (1,852) Tax (expense) benefit Total reclassifications out of AOCI $ 6,267 $ 6,173 $ 6,271 Note 23: Regulatory Matters The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct and material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and the Bank’s assets, liabilities and certain off-balance-sheet items as calculated under GAAP, regulatory reporting practices, and regulatory capital standards. The Company’s and the Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulatory reporting standards to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below as of December 31, 2023) of Total and Tier I Capital (as defined) to risk-weighted assets (as defined), of Tier I Capital (as defined) to adjusted tangible assets (as defined) and of Common Equity Tier 1 Capital (as defined) to risk-weighted assets (as defined). Management believes, as of December 31, 2023, that the Bank met all capital adequacy requirements to which it was then subject. As of December 31, 2023, the most recent notification from the Bank’s regulators categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized as of December 31, 2023, the Bank must have maintained minimum Total capital, Tier I capital, Tier 1 Leverage capital and Common Equity Tier 1 capital ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank’s category. The Company and the Bank are subject to certain restrictions on the amount of dividends that may be declared without prior regulatory approval. At December 31, 2023 and 2022, the Company and the Bank exceeded their minimum capital requirements then in effect. The entities may not pay dividends which would reduce capital below the minimum requirements shown below. In addition to the minimum capital ratios, the capital rules include a capital conservation buffer, under which a banking organization must have Common Equity Tier 1 capital more than 2.5% above each of its minimum risk-based capital ratios in order to avoid restrictions on paying dividends, repurchasing shares, and paying certain discretionary bonuses. The net unrealized gain or loss on securities is not included in computing regulatory capital. Actual Amount Ratio Adequacy Purposes Ratio Amount For Capital (Dollars In Thousands) To Be Well Capitalized Under Prompt Corrective Action Provisions Amount Ratio As of December 31, 2023 Total capital Great Southern Bancorp, Inc. Great Southern Bank $ 770,885 15.2% $ $ 728,113 14.3% $ 406,994 406,744 8.0% 8.0% $ N/A 508,430 N/A 10.0% Tier I capital Great Southern Bancorp, Inc. Great Southern Bank $ 632,279 12.4% $ $ 664,545 13.1% $ 305,246 305,058 6.0% 6.0% $ N/A 406,744 N/A 8.0% Tier I leverage capital Great Southern Bancorp, Inc. Great Southern Bank $ 632,279 11.0% $ $ 664,545 11.6% $ 229,992 229,692 4.0% 4.0% $ N/A 287,115 N/A 5.0% Common equity Tier I capital Great Southern Bancorp, Inc. Great Southern Bank As of December 31, 2022 Total capital $ 607,279 11.9% $ $ 664,545 13.1% $ 228,934 228,794 4.5% 4.5% $ N/A 330,480 N/A 6.5% Great Southern Bancorp, Inc. Great Southern Bank $ 746,287 13.5% $ $ 721,616 13.1% $ 440,767 440,683 8.0% 8.0% $ N/A 550,854 N/A 10.0% Tier I capital Great Southern Bancorp, Inc. Great Southern Bank $ 607,807 11.0% $ $ 658,136 11.9% $ 330,575 330,512 6.0% 6.0% $ N/A 440,683 N/A 8.0% Tier I leverage capital Great Southern Bancorp, Inc. Great Southern Bank $ 607,807 10.6% $ $ 658,136 11.5% $ 228,673 228,511 4.0% 4.0% $ N/A 285,638 N/A 5.0% Common equity Tier I capital Great Southern Bancorp, Inc. Great Southern Bank $ 582,807 10.6% $ $ 658,136 11.9% $ 247,932 247,884 4.5% 4.5% $ N/A 358,055 N/A 6.5% Note 24: Litigation Matters In the normal course of business, the Company and its subsidiaries are subject to pending and threatened legal actions, some of which seek substantial relief or damages. While the ultimate outcome of such legal proceedings cannot be predicted with certainty, after reviewing pending and threatened litigation with counsel, management believes at this time that the outcome of such litigation will not have a material adverse effect on the Company’s business, financial condition or results of operations. 129 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 December 31, 2023, 2022 and 2021 Note 25: Summary of Unaudited Quarterly Operating Results Note 26: Condensed Parent Company Statements Note 26: Condensed Parent Company Statements Following is a summary of unaudited quarterly operating results for the years 2023, 2022 and 2021: 2023 Three Months Ended March 31 June 30 September 30 December 31 (In Thousands, Except Per Share Data) Interest income Interest expense Provision for credit losses on loans Provision (credit) for unfunded commitments Net realized gain (loss) on available-for-sale securities Non-interest income Non-interest expense Provision for income taxes Net income available to common shareholders Earnings per common share – diluted $ 71,463 18,271 1,500 (826) — 7,889 34,463 5,488 20,456 1.67 $ 73,618 25,480 — (1,619) — 7,769 34,718 4,488 18,320 1.52 $ 75,272 28,534 — (1,195) — 7,852 35,557 4,349 15,879 1.33 $ 76,482 31,335 750 (1,689) — 6,563 36,285 3,219 13,145 1.11 2022 Three Months Ended March 31 June 30 September 30 December 31 (In Thousands, Except Per Share Data) Interest income Interest expense Provision for credit losses on loans Provision (credit) for unfunded commitments Net realized gain (loss) on available-for-sale securities Non-interest income Non-interest expense Provision for income taxes Net income available to common shareholders Earnings per common share – diluted $ 46,673 3,407 — (193) 7 9,176 31,268 4,380 16,987 1.30 $ 52,698 3,687 — 2,223 — 9,319 33,004 4,699 18,224 1.44 $ 59,657 6,759 2,000 1,315 31 7,984 34,758 4,676 18,133 1.46 $ 67,949 13,330 1,000 (159) (168) 7,661 34,336 4,499 22,604 1.84 2021 Three Months Ended March 31 June 30 September 30 December 31 (In Thousands, Except Per Share Data) Interest income Interest expense Provision (credit) for credit losses on loans Provision (credit) for unfunded commitments Net realized gain (loss) on available-for-sale securities Non-interest income Non-interest expense Provision for income taxes Net income available to common shareholders Earnings per common share – diluted $ 50,633 6,544 300 — (674) 9,736 30,321 5,010 18,868 1.36 130 $ 50,452 5,768 (1,000) — (307) 9,585 30,191 5,271 20,114 1.46 $ 49,640 4,717 (3,000) — 643 9,798 31,339 5,375 20,364 1.49 $ 47,948 3,723 (3,000) — 1,277 9,198 35,784 4,081 15,281 1.14 The condensed statements of financial condition at December 31, 2023 and 2022, and statements of income, The condensed statements of financial condition at December 31, 2023 and 2022, and statements of income, comprehensive income and cash flows for the years ended December 31, 2023, 2022 and 2021, for the parent comprehensive income and cash flows for the years ended December 31, 2023, 2022 and 2021, for the parent company, Great Southern Bancorp, Inc., were as follows: company, Great Southern Bancorp, Inc., were as follows: Statements of Financial Condition Statements of Financial Condition Assets Assets Cash Cash Investment in subsidiary bank Investment in subsidiary bank Deferred and accrued income taxes Deferred and accrued income taxes Prepaid expenses and other assets Prepaid expenses and other assets Liabilities and Stockholders’ Equity Liabilities and Stockholders’ Equity Accounts payable and accrued expenses Accounts payable and accrued expenses Subordinated debentures issued to capital trust Subordinated debentures issued to capital trust Subordinated notes Subordinated notes Common stock Common stock Additional paid-in capital Additional paid-in capital Retained earnings Retained earnings Accumulated other comprehensive income (loss) Accumulated other comprehensive income (loss) December 31, December 31, 2023 2023 2022 2022 (In Thousands) (In Thousands) $ $ $ $ 47,048 47,048 629,096 629,096 641 641 877 877 29,097 29,097 608,416 608,416 148 148 882 882 $ $ 677,662 677,662 $ $ 638,543 638,543 $ $ $ $ 5,480 5,480 25,774 25,774 74,579 74,579 118 118 44,320 44,320 569,872 569,872 (42,481) (42,481) 5,401 5,401 25,774 25,774 74,281 74,281 122 122 42,445 42,445 543,875 543,875 (53,355) (53,355) $ $ 677,662 677,662 $ $ 638,543 638,543 Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 December 31, 2023, 2022 and 2021 Note 26: Condensed Parent Company Statements Note 26: Condensed Parent Company Statements The condensed statements of financial condition at December 31, 2023 and 2022, and statements of income, The condensed statements of financial condition at December 31, 2023 and 2022, and statements of income, comprehensive income and cash flows for the years ended December 31, 2023, 2022 and 2021, for the parent comprehensive income and cash flows for the years ended December 31, 2023, 2022 and 2021, for the parent company, Great Southern Bancorp, Inc., were as follows: company, Great Southern Bancorp, Inc., were as follows: Statements of Financial Condition Statements of Financial Condition Assets Assets Cash Cash Investment in subsidiary bank Investment in subsidiary bank Deferred and accrued income taxes Deferred and accrued income taxes Prepaid expenses and other assets Prepaid expenses and other assets Liabilities and Stockholders’ Equity Liabilities and Stockholders’ Equity Accounts payable and accrued expenses Accounts payable and accrued expenses Subordinated debentures issued to capital trust Subordinated debentures issued to capital trust Subordinated notes Subordinated notes Common stock Common stock Additional paid-in capital Additional paid-in capital Retained earnings Retained earnings Accumulated other comprehensive income (loss) Accumulated other comprehensive income (loss) December 31, December 31, 2023 2023 2022 2022 (In Thousands) (In Thousands) $ $ $ $ 47,048 47,048 629,096 629,096 641 641 877 877 29,097 29,097 608,416 608,416 148 148 882 882 $ $ 677,662 677,662 $ $ 638,543 638,543 $ $ $ $ 5,480 5,480 25,774 25,774 74,579 74,579 118 118 44,320 44,320 569,872 569,872 (42,481) (42,481) 5,401 5,401 25,774 25,774 74,281 74,281 122 122 42,445 42,445 543,875 543,875 (53,355) (53,355) $ $ 677,662 677,662 $ $ 638,543 638,543 131 Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 December 31, 2023, 2022 and 2021 Statements of Income Income Dividends from subsidiary bank Other income $ Expense Operating expenses Interest expense Income before income tax and equity in undistributed earnings of subsidiaries Credit for income taxes Income before equity in earnings of subsidiaries Equity in undistributed earnings of subsidiaries Net income 2023 2022 (In Thousands) 2021 65,000 — 65,000 2,780 6,158 8,938 $ 60,000 — 60,000 2,550 5,298 7,848 $ 74,000 — 74,000 2,121 7,613 9,734 56,062 (1,932) 52,152 (1,608) 64,266 (1,850) 57,994 53,760 66,116 2023 2023 2022 2022 (In Thousands) (In Thousands) 2021 2021 Statements of Cash Flows Statements of Cash Flows Operating Activities Operating Activities Net income Net income Items not requiring (providing) cash Items not requiring (providing) cash Equity in undistributed earnings of subsidiary Equity in undistributed earnings of subsidiary Compensation expense for stock option grants Compensation expense for stock option grants Amortization of interest rate derivative and deferred Amortization of interest rate derivative and deferred costs on subordinated notes costs on subordinated notes Changes in Changes in Prepaid expenses and other assets Prepaid expenses and other assets Accounts payable and accrued expenses Accounts payable and accrued expenses Income taxes Income taxes Net cash provided by operating activities Net cash provided by operating activities $ $ 67,800 67,800 $ $ 75,948 75,948 $ $ 74,627 74,627 (9,806) (9,806) 1,621 1,621 298 298 5 5 250 250 (493) (493) 59,675 59,675 (22,188) (22,188) 1,437 1,437 297 297 (14) (14) 69 69 (54) (54) 55,495 55,495 (8,511) (8,511) 1,225 1,225 587 587 15 15 (1,661) (1,661) 63 63 66,345 66,345 Investing Activities Investing Activities Net cash provided by investing activities Net cash provided by investing activities — — — — — — Financing Activities Financing Activities Purchases of the Company’s common stock Purchases of the Company’s common stock Redemption of subordinated notes Redemption of subordinated notes Dividends paid Dividends paid Stock options exercised Stock options exercised (23,326) (23,326) — — (19,282) (19,282) 884 884 (41,724) (41,724) (61,847) (61,847) — — (19,181) (19,181) 6,258 6,258 (74,770) (74,770) (39,123) (39,123) (75,000) (75,000) (18,800) (18,800) 3,700 3,700 (129,223) (129,223) Cash, Beginning of Year Cash, Beginning of Year Cash, End of Year Cash, End of Year Additional Cash Payment Information Additional Cash Payment Information Interest paid Interest paid 29,097 29,097 48,372 48,372 111,250 111,250 $ $ 47,048 47,048 $ $ 29,097 29,097 $ $ 48,372 48,372 $ $ 6,107 6,107 $ $ 5,115 5,115 $ $ 9,103 9,103 Statements of Comprehensive Income Statements of Comprehensive Income 2023 2023 2022 2022 2021 2021 (In Thousands) (In Thousands) Net Income Net Income $ 67,800 $ 67,800 $ 75,948 $ 75,948 $ 74,627 $ 74,627 Comprehensive income (loss) of subsidiaries Comprehensive income (loss) of subsidiaries 10,874 10,874 (86,114) (86,114) (20,392) (20,392) Comprehensive Income Comprehensive Income $ $ 78,674 78,674 $ $ (10,166) (10,166) $ $ 54,235 54,235 9,806 22,188 8,511 Net cash used in financing activities Net cash used in financing activities $ 67,800 $ 75,948 $ 74,627 Increase (Decrease) in Cash Increase (Decrease) in Cash (17,951) (17,951) (19,275) (19,275) (62,878) (62,878) 132 Great Southern Bancorp, Inc. Great Southern Bancorp, Inc. Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements December 31, 2023, 2022 and 2021 December 31, 2023, 2022 and 2021 Statements of Cash Flows Statements of Cash Flows Operating Activities Operating Activities Net income Items not requiring (providing) cash Net income Items not requiring (providing) cash Equity in undistributed earnings of subsidiary Equity in undistributed earnings of subsidiary Compensation expense for stock option grants Compensation expense for stock option grants Amortization of interest rate derivative and deferred Amortization of interest rate derivative and deferred costs on subordinated notes costs on subordinated notes Changes in Changes in Prepaid expenses and other assets Accounts payable and accrued expenses Income taxes Prepaid expenses and other assets Accounts payable and accrued expenses Income taxes Net cash provided by operating activities Net cash provided by operating activities Investing Activities Investing Activities 2023 2023 2022 (In Thousands) 2022 (In Thousands) 2021 2021 $ $ 67,800 67,800 $ $ 75,948 75,948 $ $ 74,627 74,627 (9,806) 1,621 (9,806) 1,621 298 298 5 5 250 250 (493) (493) 59,675 59,675 (22,188) (22,188) 1,437 1,437 297 297 (14) (14) 69 69 (54) (54) 55,495 55,495 (8,511) 1,225 (8,511) 1,225 587 587 15 15 (1,661) (1,661) 63 63 66,345 66,345 Net cash provided by investing activities Net cash provided by investing activities — — — — — — Financing Activities Financing Activities Purchases of the Company’s common stock Redemption of subordinated notes Dividends paid Stock options exercised Purchases of the Company’s common stock Redemption of subordinated notes Dividends paid Stock options exercised Net cash used in financing activities Net cash used in financing activities (23,326) (23,326) — — (19,282) (19,282) 884 884 (41,724) (41,724) (61,847) (61,847) — — (19,181) (19,181) 6,258 6,258 (74,770) (74,770) (39,123) (39,123) (75,000) (75,000) (18,800) (18,800) 3,700 3,700 (129,223) (129,223) Increase (Decrease) in Cash Increase (Decrease) in Cash (17,951) (17,951) (19,275) (19,275) (62,878) (62,878) Cash, Beginning of Year Cash, Beginning of Year Cash, End of Year Cash, End of Year 29,097 29,097 48,372 48,372 111,250 111,250 $ $ 47,048 47,048 $ $ 29,097 29,097 $ $ 48,372 48,372 Additional Cash Payment Information Additional Cash Payment Information Interest paid Interest paid $ $ 6,107 6,107 $ $ 5,115 5,115 $ $ 9,103 9,103 2023 2023 2022 (In Thousands) 2022 (In Thousands) 2021 2021 Statements of Comprehensive Income Statements of Comprehensive Income Net Income Net Income $ 67,800 $ 67,800 $ 75,948 $ 75,948 $ 74,627 $ 74,627 Comprehensive income (loss) of subsidiaries Comprehensive income (loss) of subsidiaries 10,874 10,874 (86,114) (86,114) (20,392) (20,392) Comprehensive Income Comprehensive Income $ $ 78,674 78,674 $ $ (10,166) (10,166) $ $ 54,235 54,235 133 134 GreatSouth ern Ban k.com Please recycle. 002CSNE681 Annual Report 

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