Great Southern Bancorp, Inc.

GSBC

US3909051076

Banks

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Apr. 18	Transcript : Great Southern Bancorp, Inc., Q1 2024 Earnings Call, Apr 18, 2024
Apr. 18	Tranche Update on Great Southern Bancorp, Inc.'s Equity Buyback Plan announced on December 21, 2022.	CI

GREAT SOUTHERN BANCORP : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

August 07, 2020 at 02:46 pm EDT

Forward-looking Statements





When used in this Quarterly 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. The novel coronavirus disease, or COVID-19, pandemic is adversely
affecting the Company, its customers, counterparties, employees, and third-party
service providers, and the ultimate extent of the impacts on the Company's
business, financial position, results of operations, liquidity, and prospects is
uncertain. Continued deterioration in general business and economic conditions,
including further increases in unemployment rates, or turbulence in domestic or
global financial markets could adversely affect the Company's revenues and the
values of its assets and liabilities, reduce the availability of funding, lead
to a tightening of credit, and further increase stock price volatility. In
addition, changes to statutes, regulations, or regulatory policies or practices
as a result of, or in response to, COVID-19, could affect the Company in
substantial and unpredictable ways.



Other 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) fluctuations in interest rates; (iv) 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 loan losses; (v) the possibility of other-than-temporary
impairments of securities held in the Company's securities portfolio; (vi) the
Company's ability to access cost-effective funding; (vii) fluctuations in real
estate values and both residential and commercial real estate market conditions;
(viii) the ability to adapt successfully to technological changes to meet
customers' needs and developments in the marketplace; (ix) 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; (x) legislative or regulatory changes
that adversely affect the Company's business, including, without limitation, the
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and its
implementing regulations, the overdraft protection regulations and customers'
responses thereto and the Tax Cut and Jobs Act; (xi) changes in accounting
policies and practices or accounting standards, including Accounting Standards
Update 2016-13, Credit Losses (Topic 326), "Measurement of Credit Losses on
Financial Instruments," commonly referenced as the Current Expected Credit Loss
model, which, upon adoption, is expected to result in an increase in the
Company's allowance for credit losses; (xii) monetary and fiscal policies of the
Federal Reserve Board and the U.S. Government and other governmental initiatives
affecting the financial services industry; (xiii) results of examinations of the
Company and Great Southern Bank by their regulators, including the possibility
that the regulators may, among other things, require the Company to limit its
business activities, change its business mix, increase its allowance for loan
losses, write-down assets or increase its capital levels, or affect its ability
to borrow funds or maintain or increase deposits, which could adversely affect
its liquidity and earnings; (xiv) costs and effects of litigation, including
settlements and judgments; (xv) competition; (xvi) uncertainty regarding the
future of LIBOR; and (xvii) 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 from time to time in documents filed or
furnished by the Company with the SEC could affect the Company's financial
performance and could 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.

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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.

Critical Accounting Policies, Judgments and Estimates





The accounting and reporting policies of the Company conform to accounting
principles generally accepted in the United States of America 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 Loan Losses and Valuation of Foreclosed Assets





The Company believes that the determination of the allowance for loan losses
involves a higher degree of judgment and complexity than its other significant
accounting policies. The allowance for loan losses is calculated with the
objective of maintaining an allowance level believed by management to be
sufficient to absorb estimated loan losses. Management's determination of the
adequacy of the allowance is based on periodic evaluations of the loan portfolio
and other relevant factors. However, this evaluation is inherently subjective as
it requires material estimates of, among other things, expected default
probabilities, loss once loans default, expected commitment usage, the amounts
and timing of expected future cash flows on impaired loans, value of collateral,
estimated losses, and general amounts for historical loss experience.



The process also considers economic conditions, uncertainties in estimating
losses and inherent risks in the loan portfolio. All of these factors may be
susceptible to significant change. To the extent actual outcomes differ from
management estimates, additional provisions for loan losses may be required
which would adversely impact earnings in future periods. In addition, the Bank's
regulators could require additional provisions for loan losses as part of their
examination process.



See Note 6 "Loans and Allowance for Loan Losses" included in Item 1 for
additional information regarding the allowance for loan 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.  The Company
uses a three-year average of historical losses for the general component of the
allowance for loan loss calculation.  No significant changes were made to
management's overall methodology for evaluating the allowance for loan losses
during the periods presented in the financial statements of this report.



In addition, the Company considers that the determination of the valuations of
foreclosed assets held for sale involves a high degree of judgment and
complexity. The carrying value of foreclosed assets reflects management's best
estimate of the amount to be realized from the sales of the assets.  While the
estimate is generally based on a valuation by an independent appraiser or recent
sales of similar properties, the amount that the Company realizes from the sales
of the assets could differ materially from the carrying value reflected in the
financial statements, resulting in losses that could adversely impact earnings
in future periods.

Carrying Value of Loans Acquired in FDIC-Assisted Transactions





The Company considers that the determination of the carrying value of loans
acquired in the FDIC-assisted transactions involves a high degree of judgment
and complexity. The carrying value of the acquired loans reflects management's
best ongoing estimates of the amounts to be realized on these assets.  The
Company determined initial fair value accounting estimates of the acquired
assets and assumed liabilities in accordance with FASB ASC 805, Business
Combinations. However, the amount that the Company realizes on its acquired loan
assets could differ materially from the carrying value reflected in its
financial statements, based upon the timing of collections on the acquired loans
in future periods. Because of the loss sharing agreements with the FDIC on
certain of these assets, the

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Company did not expect to incur any significant losses related to these assets.


 Subsequent to the initial valuation, the Company continued to monitor
identified loan pools for changes in estimated cash flows projected for the loan
pools, anticipated credit losses and changes in the accretable yield.  Analysis
of these variables requires significant estimates and a high degree of judgment.
 See Note 7 "FDIC-Assisted Acquired Loans" included in Item 1 for additional
information regarding the TeamBank, Vantus Bank, Sun Security Bank, InterBank
and Valley Bank FDIC-assisted transactions.

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 June 30, 2020, the Company had one
reporting unit to which goodwill has been allocated - the Bank.  If the fair
value of a reporting unit exceeds its carrying value, then no impairment is
recorded. If the carrying value exceeds the fair value of a reporting unit,
further testing is completed comparing the implied fair value of the reporting
unit's goodwill to its carrying value to measure the amount of impairment, if
any. Intangible assets that are not amortized must be tested for impairment at
least annually by comparing the fair values of those assets to their carrying
values. At June 30, 2020, 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 from Fifth Third Bank.  Other
identifiable intangible assets that are subject to amortization are amortized on
a straight-line basis over a period of seven years. At June 30, 2020, the
amortizable intangible assets consisted of core deposit intangibles of $2.1
million, which are reflected in the table below.  These amortizable intangible
assets are reviewed for impairment if circumstances indicate their value may not
be recoverable based on a comparison of fair value.



At June 30, 2020, the Company evaluated the current circumstances brought about
by the COVID-19 pandemic and its effect on the valuation of the Company and
other bank holding companies and determined that no triggering event had
occurred requiring an evaluation of goodwill or other intangible asset
impairment. While the Company believes no impairment of its goodwill or other
intangible assets existed at June 30, 2020, different conditions or assumptions
used to measure fair value of reporting units, 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.

A summary of goodwill and intangible assets is as follows:





                                 June 30,     December 31,
                                   2020           2019
                                      (In Thousands)

Goodwill - Branch acquisitions $    5,396   $        5,396
Deposit intangibles
Boulevard Bank                         92              153
Valley Bank                           400              600
Fifth Third Bank                    1,633            1,949
                                    2,125            2,702
                               $    7,521   $        8,098




Current Economic Conditions



Changes in economic conditions could cause the values of assets and liabilities
recorded in the financial statements to change rapidly, resulting in material
future adjustments in asset values, the allowance for loan losses, or capital
that could negatively impact 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.

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Subsequently, economic conditions improved considerably, as indicated by higher
consumer confidence levels, increased economic activity and low unemployment
levels. The US economy continued to operate at historically strong levels until
the impact of COVID-19 began to take its toll in March 2020.  While the severity
and extent of the COVID-19 pandemic on the global, national and regional
economies is still uncertain, it will most likely have a detrimental impact on
the performance of our loan portfolio.  Short-term modifications to loan terms
to help our customers navigate through the current situation were made in
accordance with guidance from the banking regulatory authorities. These
modifications did not result in these loans being classified as troubled debt
restructurings, potential problem loans or non-performing loans. Among the more
severely impacted industries in our portfolio are retail, motels/hotels and
restaurants.



In June 2020, the national unemployment rate declined to 11.1%, down from 13.3%
in May 2020.  Improvements in the labor market during the month of June
reflected the continued resumption of economic activity that had been curtailed
in March and April due to the COVID-19 pandemic and efforts to contain it.
Employment nationally in leisure and hospitality increased by 2.1 million,
mainly in food services and drinking places. Notable job gains also occurred in
retail trade, education and health services, other services, manufacturing, and
professional and business services. Unemployment rates will likely remain
volatile and dependent upon the degree to which the COVID-19 pandemic is
contained.



The unemployment rate for the Midwest, where the Company conducts most of its
business, increased from 4.1% in March 2020 to 11% in June 2020.  Unemployment
rates for June 2020 in the other states where the Company conducts business were
Arkansas at 8.0%, Colorado at 10.5%, Georgia at 7.6%, Illinois at 14.6%, Iowa at
8.0%, Kansas at 7.5%, Minnesota at 8.6%, Missouri at 7.9%, Nebraska at 6.7%,
Oklahoma at 6.6%, and Texas at 8.6%. Of the metropolitan areas in which the
Company does business, the largest year-over-year employment decreases occurred
in the Chicago area with a decrease of 466,800 jobs, ending with an unemployment
rate in June 2020 of 15.6%, the highest among the metropolitan areas in which
the Company does business. Denver had the second highest unemployment rate at
11.1% in the Company's metropolitan footprint. While all of the areas in the
Company's metropolitan footprint had an increase in unemployment due to the
ongoing pandemic, other than Chicago and Denver, their unemployment rates for
June 2020 were below the national unemployment rate of 11.1%.

Housing



Sales of newly built single-family homes for June 2020 were at a seasonally
adjusted annual rate of 776,000 according to U.S. Census Bureau and the
Department of Housing and Urban Development ("HUD") estimates.  This is 13.8%
above the revised May 2020 rate of 682,000, and 6.9% above the June 2019 rate of
726,000.  The median sales price of new houses sold in June 2020 was $329,200 up
slightly from $310,400 a year earlier.  The June 2020 average sales price of
$384,700 was up slightly from $368,600 a year ago.  The inventory of new homes
for sale at the end of June 2020 would support 4.7 months' supply at the current
sales pace, down from 6.3 months in June 2019.



Existing-home sales rebounded at a record pace in June 2020, showing strong
signs of a market turnaround after three straight months of sales declines
caused by the ongoing pandemic, according to the National Association of
Realtors (NAR). Each of the four major regions achieved month-over month growth,
with the West experiencing the greatest sales recovery. Existing-home sales
jumped 20.7% in June 2020 from May 2020; however, sales for June 2020 were down
11.3% from June 2019, according to NAR. Total existing home sales reached a
seasonally adjusted rate of 4.72 million in June 2020. Total housing inventory
at the end of June 2020 was at 1.57 million, up 1.3% from May 2020, but down
18.2% from June 2019. This marks 13 straight months of year-over-year declines.
 It will take 4.0 months to move the current level of inventory at the current
sales pace. It takes approximately 24 days for a home to go from listing to a
contract in the current housing market, equal to 27 days, or 0.3 months, from a
year ago.



The median existing home price for all housing types in June 2020 was $295,300,
up 3.5% from a year ago. This price increase marks the 100th straight month of
year-over-year gains. The Midwest region had the smallest price gain of the four
regions with a median existing home sale price for June 2020 of $236,900, which
is a 3.2% increase from a year ago. First-time buyers nationally accounted for
35% of sales in June 2020, up from 34% in May and about equal to 35% in June
2019.

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According to Freddie Mac, the average commitment rate for a 30-year,
conventional, fixed-rate mortgage increased to 3.16% in June 2020, down from
3.23% in May 2020. The average commitment rate for all of 2019 was 3.94 percent,
down from 4.54 percent for 2018.



The effects of the COVID-19 pandemic on real estate markets are already
appearing in CoStar's multifamily data with daily asking rents for apartment
units declining since March 11, 2020 - just as the prime leasing season began to
unfold. After flattening in May 2020, rents began to rebound in June 2020 as
cities nationwide worked to reopen their economies and the national job market
continued to show signs of recovering.  A $2 trillion+ federal stimulus package
included direct cash payments to renter households of around $85 billion, which
helped mitigate the impact on the apartment sector. Fannie Mae, Freddie Mac, and
HUD all announced prohibitions on evictions in all GSE-financed communities, and
the National Multifamily Housing Council (NMHC) has published guidelines to its
members to avoid evictions and delay rent hikes.  The long-term outlook for
apartment demand may be affected by changes in attitudes regarding working from
home and changes in personal circumstances such as  divorces, marriages, and
births.



As of the end of June 2020, national apartment vacancy rates had increased
slightly to 6.8% while our market areas reflected the following vacancy levels:
Springfield, Mo. at 5.0%, St. Louis at 9.2%, Kansas City at 7.6%, Minneapolis at
5.5%, Tulsa, Okla. at 7.9%, Dallas-Fort Worth at 8.4%, Chicago at 7.0%, Atlanta
at 8.9% and Denver at 8.1%.

Commercial Real Estate Other Than Housing



The full impact of the COVID-19 pandemic on the U.S. office sector remains
unclear, but per CoStar, a steep decline in leasing and transaction volume is
expected to continue beyond the second quarter of 2020.  Demand for U.S. office
space ended the first quarter of 2020 in positive territory, though it was the
lowest quarterly total since 2011 and much of the positive absorption occurred
prior to March 2020. That positive absorption reversed sharply in the second
quarter of 2020, with demand posting the largest negative total since mid-2009.

Annual rent growth has been slowing over the past couple of quarters, but remained positive in the first quarter of 2020. Even before the disruption caused by the COVID-19, the trend of slowing growth was expected to continue in 2020 and beyond.





The retail sector of commercial real estate remains one of the most vulnerable
to the impact of COVID-19.  Gradual store re-openings throughout the nation and
the relaxation of social distancing restrictions has modestly lifted consumer
confidence and given hope for stabilization in the industry.  However,
increasing infection rates throughout many Southern states threaten the
continued path to stability, creating additional uncertainty for retailers
already struggling with reduced revenues and limited liquidity.  Decline in
sales in apparel, department stores, retail shops and restaurants, those sectors
believed to be among the most hurt by the pandemic, will affect malls, strip
centers and outlet centers by subsequent increases in vacancies. The wave of
retail bankruptcies is expected to continue; however, tenants with
essential-oriented offerings have thus far weathered the storm and arisen as a
modest source of positive demand.



Though the industrial sector may fare best among commercial real estate sectors,
its operating fundamentals will not fully escape the negative impacts of
COVID-19. Dampened aggregate demand and reduced export growth along with
disrupted and curtailed supply chains present a headwind for port markets and
industrial distribution operators. Meanwhile, labor shortages arising from
mandatory construction suspensions place further pressure on industrial
operators, distributors and manufacturers. Negative factors in the industry are
countered somewhat with the increased activity of large tenant groups including
Amazon, third party logistics providers and larger retailers.



Under CoStar's Base Case forecast, the moderation in demand, taking into
consideration a considerable development pipeline, may result in a vacancy rate
in the mid 6% range, which is still well below the peak of 10.6% reached during
the Great Recession of 2007 to 2009.



The degree to which the commercial real estate sector will suffer is yet
unknown, as the path and progression of the pandemic, and the economy's response
to measures taken to control the spread of the virus remains fluid. In addition
to forced and voluntary store closures, many retailers will struggle amid
near-total loss of foot traffic, declining consumer sentiment, lost wages and
restrained consumer spending activity.

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Our management will continue to monitor regional, national, and global economic
indicators such as unemployment, GDP, housing starts and prices, and commercial
real estate occupancy, absorption and rental rates, as these could significantly
affect customers in each of our market areas.

COVID-19 Impact to Our Business and Response





Great Southern is actively monitoring and responding to the effects of the
rapidly-changing COVID-19 pandemic. As always, the health, safety and well-being
of our customers, associates and communities are the Company's top priorities.
Centers for Disease Control and Prevention (CDC) guidelines, as well as
directives from federal, state and local officials, are being closely followed
to make informed operational decisions.



In January 2020, the Company activated its long-established Pandemic Response
Plan.  This plan promotes the health and safety of the Company's constituents
and specifies responsive actions to support continuous service for customers. A
summary of the Company's major COVID-19 responses and actions are highlighted
below.



Great Southern Associates:  During this unprecedented time, the Company is
working diligently with its nearly 1,200 associates to enforce CDC-advised
health, hygiene and social distancing practices.  Approximately 50% of
non-frontline associates are currently working from home. Teams in nearly every
operational department have been split, with part of each team working at an
off-site disaster recovery facility to promote social distancing and to avoid
service disruptions. To date, there have been no service disruptions or
reductions in staffing.



Paid time off and other benefits were enhanced and implemented to support Great
Southern associates. Part-time associates were awarded paid sick benefits for
the first time. Any full-time or part-time associate will receive full pay if
placed under a restrictive quarantine due to COVID-19 infection or direct
exposure to an infected individual. The Company's Employee Assistance Program
(EAP) was enhanced at no cost to associates and family members seeking
counseling services for mental health and emotional support needs.



Great Southern Communities:  To support local COVID-19 relief efforts, in March
2020, Great Southern committed up to $300,000 to Feeding America food banks,
local United Way agencies and other nonprofit organizations to address food
insecurity and support critical health and human services. Throughout the second
quarter of 2020, these funds were distributed to agencies serving Great Southern
local markets across its 11-state franchise.



Great Southern Customers:  During the COVID-19 pandemic, taking care of
customers and providing uninterrupted access to services are top priorities. As
always, customers can conduct their banking business using the banking center
network, online and mobile banking services, ATMs, Telephone Banking, and online
account opening services.  As health conditions in local markets dictate, Great
Southern banking center lobbies are open following strict social distancing
guidance from the CDC and local government officials. If customer lobbies are
closed in a market area, then drive-thru service and in-person service by
appointment are available.



The COVID-19 pandemic is causing a growing number of customers to experience
financial uncertainty and hardships. The Company has been reaching out to
customers and is strongly encouraging customers to call for assistance. Certain
account maintenance and service fees are being waived or refunded for depository
customers. Payment relief options and loan modifications for consumer and
commercial loan customers are available on a case-by-case basis.  See Loan
Modifications below for further details of loan modifications to date.



The Company has been actively utilizing the CARES Act stimulus package to assist
consumers and businesses. The CARES Act made available Small Business
Administration (SBA) lending programs that offer relief for small businesses,
including the Paycheck Protection Program (PPP). Great Southern is participating
in the PPP, which provides emergency financial support to small businesses
(primarily those with less than 500 employees) by offering federally guaranteed
loans through the SBA. These loans may be eligible for forgiveness contingent
upon how the loan proceeds are used by the borrower. Through June 30, 2020,
Great Southern has originated nearly 1,600 PPP loans totaling approximately $120
million.

As a resource to customers, a COVID-19 information center has been made available on the Company's website, www.GreatSouthernBank.com. General information about the Company's pandemic response, how to receive assistance, and how to avoid COVID-19 scams and fraud are included.

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Impacts to Our Business Going Forward:  The magnitude of the impact on the
Company of the COVID-19 pandemic is not yet fully known, and will depend on the
length and severity of the economic downturn brought on by the pandemic. The
Company expects that the COVID-19 pandemic will impact our business in future
periods in one or more of the following ways, among others. Each of these
factors could, individually or collectively, result in reduced net income in
future periods.

·Significantly lower market interest rates will have a negative impact on our variable rate loans indexed to LIBOR and prime

·Certain fees for deposit and loan products may be waived or reduced

·Point-of-sale fee income may decline due to a decrease in spending by our debit card customers as they deal with "Stay at Home" requirements and other restrictions and may be adversely affected by reductions in their personal income and job losses

·Non-interest expenses may increase to deal with the effects of the COVID-19 pandemic, including cleaning costs, supplies, equipment and other items

·Banking center lobbies have now reopened, but could be closed again if the pandemic situation worsens

·Additional loan modifications may occur and borrowers may default on their loans, which may necessitate further increases to the allowance for loan losses

·The contraction in economic activity may reduce demand for our loans and for our other products and services

Paycheck Protection Program Loans

As noted above, Great Southern is actively participating in the PPP through the SBA. The PPP has been met with very high demand throughout the country, resulting in a second round of funding through an amendment to the CARES Act.


 As of June 30, 2020, we originated approximately 1,600 PPP loans totaling
approximately $120 million.  Great Southern has received $4.7 million in fees
from the SBA for originating these loans based on the amount of each loan.  The
fees, net of origination costs, will be deferred in accordance with standard
accounting practices and will be accreted to interest income on loans over the
contractual life of each loan.  These loans generally have a contractual
maturity of two years from origination date, but may be repaid or forgiven (by
the SBA).  If these loans are repaid or forgiven prior to their contractual
maturity date, the remaining deferred fee for such loan will be accreted to
interest income on loans immediately.  We expect a high percentage of these net
deferred fees will accrete to interest income in the remainder of 2020.



Loan Modifications



Through June 30, 2020, we have modified 431 commercial loans with an aggregate
principal balance outstanding of $931 million and 1,702 consumer and mortgage
loans with an aggregate principal balance outstanding of $80 million. The loan
modifications are within the guidance provided by the CARES Act, the federal
banking regulatory agencies, the Securities and Exchange Commission and the
Financial Accounting Standards Board; therefore, they are not considered
troubled debt restructurings or classified assets for regulatory purposes.  The
modified loans are in the following categories (dollars in millions):

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                                                        Interest   Interest     Full       Full   Weighted
                       # of                  Interest     Only       Only     Payment    Payment  Average
                      Loans     $ of Loans     Only       4-6        7-12     Deferral   Deferral Loan to
  Collateral Type    Modified    Modified    3 Months    Months     Months    3 Months   6 Months  Value



Retail                    103 $      261.3 $    239.0 $      4.3 $      8.9 $      5.6 $      3.5      65%
Multifamily                52        190.5      166.1       24.4          -          -          -      69%
Healthcare                 24        143.1       96.5       11.3          -          -       35.3      64%
Hotel/Motel                23        129.8       88.4          -          -       10.2       31.2      65%
Office                     40         80.4       77.4          -        0.3          -        2.7      56%
Warehouse/Other            45         54.3       38.7        0.3        7.8        0.3        7.2      55%
Restaurants                36         36.9       20.6          -          -        1.8       14.5      61%
Commercial Business        92         27.9       14.3        2.0        5.5          -        6.1
Land                       16          6.7        4.3          -        1.0          -        1.4
Total Commercial          431        930.9      745.3       42.3       23.5       17.9      101.9

Residential Mortgage      273         62.5       24.2        1.5          -       36.8          -      70%
Consumer                1,429         17.4          -          -          -       17.4          -
Total Consumer          1,702         79.9       24.2        1.5          -       54.2          -

Total                   2,133 $    1,010.8 $    769.5 $     43.8 $     23.5 $     72.1 $    101.9




During July 1 through September 30, 2020, loans with an aggregate principal
balance outstanding of $724 million were scheduled to return to their normal
payment status.  Based on discussions with the borrowers, we expect a large
portion of these loans to return to normal payments status by the end of August
2020; however, a more severe or lengthier deterioration in economic conditions
could change this outlook.  A portion of these loans may be further modified
within the guidance provided by the CARES Act, the federal banking regulatory
agencies, the Securities and Exchange Commission and the Financial Accounting
Standards Board.



The Company has escalated monitoring activities related to the modified loans
and has also increased review and monitoring activities for certain sectors of
the loan portfolio which may be currently most impacted by the COVID-19
pandemic.  The retail portfolio had an outstanding balance of $418 million at
June 30, 2020, which was 10% of the total loan portfolio.  It is a very granular
portfolio, with an average loan size of $1.4 million.  Most loans are under $5
million, with 26% of the outstanding balance of the retail portfolio represented
by loans in excess of $10 million.  At June 30, 2020, the weighted average
loan-to-value ratio of this portfolio was 64%.



The hotel/motel portfolio had an outstanding balance of $187 million at June 30,
2020, which was 4% of the total loan portfolio.  The average loan size is $4.3
million, with the 20 largest loans comprising approximately 90% of the
portfolio.  These properties are well-diversified geographically, mainly
throughout the Midwest, with most being limited-service properties.

Approximately 90% of the portfolio operates under the flag of major hotel chains. At June 30, 2020, the weighted average loan-to-value ratio of this portfolio was 59%.





The restaurant portfolio had an outstanding balance of $73 million at June 30,
2020, which was 2% of the total loan portfolio.  It is a very granular
portfolio, with the majority of the restaurants operating in Missouri, Illinois,
Iowa and Minnesota.  The majority of these loans are to franchisees of top-tier
quick service brands with national scale that have had the ability to stay open
with delivery and drive-through service throughout the course of the pandemic.

At June 30, 2020, the weighted average loan-to-value ratio of this portfolio was 63%.

--------------------------------------------------------------------------------


Total loans outstanding (excluding FDIC-assisted acquired loans, net of
discount) in the following categories at June 30, 2020, were as follows (dollars
in millions):



                                     Percentage                                Weighted
                                         of                      Percentage    Average
                                        Loans                     of Loans     Loan to
                                     Modified To                  of This      Value of
                     Outstanding     Total Loans   Percentage    Collateral    Loans in
                     Balance of        of This      of Loans      Type to        This
                    Loans of This    Collateral    Modified To     Total      Collateral

Collateral Type Collateral Type Type Total Loans Loans


     Type

Retail           $           418.4           62%            6%          10%          64%
Healthcare                   294.3           49%            3%           7%          63%
Hotel/Motel                  187.3           69%            3%           4%          59%
Multifamily                  991.9           19%            4%          23%          73%
Office                       256.8           31%            2%           6%          61%
Warehouse/Other              263.4           21%            1%           6%          60%
Commercial
Business(1)                  247.9           11%            1%           6%
Restaurants                   73.2           50%            1%           2%          63%
Land                          38.6           17%           <1%           1%
Total Commercial           2,771.8           34%           21%          63%

Residential
Mortgage                     602.2           10%            1%          14%          71%
Consumer                     273.1            6%           <1%           6%
Total Consumer               875.3            9%            2%          20%

Total            $         3,647.1           28%           23%          83%

(1) The Commercial Business outstanding loan balance excludes PPP loans of $121.1 million.






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 loan 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.



Great Southern's total assets increased $551.6 million, or 11.0%, from $5.02
billion at December 31, 2019, to $5.57 billion at June 30, 2020. Full details of
the current period changes in total assets are provided in the "Comparison of
Financial Condition at June 30, 2020 and December 31, 2019" section of this
Quarterly Report on Form 10-Q.



Loans.  Net outstanding loans increased $245.7 million, or 5.9%, from $4.15
billion at December 31, 2019, to $4.40 billion at June 30, 2020.  The net
increase in loans reflects reductions of $16.5 million in the FDIC-assisted
acquired loan portfolios.  This increase was primarily in other residential
(multi-family) loans, commercial business loans, one- to four-family residential
loans and commercial real estate loans.  These increases were partially offset
by decreases in construction loans and consumer auto loans.  The increases were
primarily due to loan growth in our existing banking center network and our
commercial loan production offices, and included approximately $120 million of
PPP loans.  Excluding FDIC-assisted acquired loans and mortgage loans held for
sale, total gross loans increased $241.0 million, or 4.9%, from December 31,
2019 to June 30, 2020.  As loan demand is affected by a variety of factors,
including general economic conditions, and because of the competition we face
and our focus on pricing discipline and credit quality, no assurances can be
made regarding our future loan growth.  We expect minimal loan growth for the
foreseeable future due to deteriorating economic conditions resulting from the
COVID-19 pandemic. The Company's strategy continues to be focused on maintaining
credit risk and interest rate risk at appropriate levels.

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Recent loan growth has occurred in several loan types, primarily commercial real
estate loans, other residential (multi-family) loans and one- to four-family
residential mortgage loans and in most of Great Southern's primary lending
locations, including Springfield, St. Louis, Kansas City, Des Moines and
Minneapolis, as well as our loan production offices in Atlanta, Chicago, Dallas,
Denver, Omaha 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, 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 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 are primarily secured by new and used motor vehicles and these loans are
also subject to certain minimum underwriting standards to assure portfolio
quality.  While Great Southern's consumer underwriting and pricing standards
have been fairly consistent in recent years, the Company tightened its
underwriting guidelines on automobile lending beginning in the latter part of
2016.  Management took this step in an effort to improve credit quality in the
portfolio and reduce delinquencies and charge-offs.  The underwriting standards
employed by Great Southern for consumer loans include a determination of the
applicant's payment history on other debts, credit scores, employment history
and an assessment of ability to meet existing obligations and payments on the
proposed loan.  In 2019, the Company discontinued indirect auto loan
originations.  See "Item 1. Business - Lending Activities - General,
- Commercial Real Estate and Construction Lending, and - Consumer Lending" in
the Company's December 31, 2019 Annual Report on Form 10-K.



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 June 30, 2020 and
December 31, 2019, none of our owner occupied one- to four-family residential
loans had loan-to-value ratios above 100% at origination.  At both June 30, 2020
and December 31, 2019, an estimated 0.6% of total non-owner occupied one- to
four-family residential loans had loan-to-value ratios above 100% at
origination.



At June 30, 2020, troubled debt restructurings totaled $861,000, or 0.02% of
total loans, down $1.1 million from $1.9 million, or 0.05% of total loans, at
December 31, 2019.  Concessions granted to borrowers experiencing financial
difficulties may include a reduction in the interest rate on the loan, payment
extensions, forgiveness of principal, forbearance or other actions intended to
maximize collection.  For troubled debt restructurings occurring during the six
months ended June 30, 2020, seven loans totaling $156,000 were restructured into
multiple new loans.  For troubled debt restructurings occurring during the year
ended December 31, 2019, five loans totaling $34,000 were restructured into
multiple new loans.  For further information on troubled debt restructurings,
see Note 6 of the Notes to Consolidated Financial Statements contained in this
report.  In accordance with the CARES Act and guidance from the banking
regulatory agencies, we made certain short-term modifications to loan terms to
help our customers navigate through the current pandemic situation. Although
loan modifications were made, they did not result in these loans being
classified as troubled debt restructurings, potential problem loans or
non-performing loans. If more severe or lengthier negative impacts of the
COVID-19 pandemic occur or the effects of the SBA loan programs and other loan
and stimulus programs do not enable companies and individuals to completely
recover financially, this could result in longer-term modifications, which may
be deemed to be troubled debt restructurings, additional potential problem loans
and/or additional non-performing loans.

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Loans that were acquired through FDIC-assisted transactions, which are accounted
for in pools, are currently included in the analysis and estimation of the
allowance for loan losses.  If expected cash flows to be received on any given
pool of loans decreases from previous estimates, then a determination is made as
to whether the loan pool should be charged down or the allowance for loan losses
should be increased (through a provision for loan losses).  Acquired loans are
described in Note 7 of the Notes to Consolidated Financial Statements contained
in this report.  For acquired loan pools, the Company may allocate, and at June
30, 2020, has allocated, a portion of its allowance for loan losses related to
these loan pools in a manner similar to how it allocates its allowance for loan
losses to those loans which are collectively evaluated for impairment.



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.



Available-for-sale Securities.  In the six months ended June 30, 2020,
available-for-sale securities increased $72.7 million, or 19.4%, from $374.2
million at December 31, 2019, to $446.9 million at June 30, 2020.  The increase
was primarily due to the purchase of FNMA and GNMA fixed-rate multi-family
mortgage-backed securities and collateralized mortgage obligations and
short-term municipal securities, partially offset by calls of municipal
securities and normal monthly payments received related to the portfolio of
mortgage-backed securities.  The Company used increased deposits to fund this
increase in investment securities.



Deposits.  The Company attracts deposit accounts through its retail branch
network, correspondent banking and corporate services areas, 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 six months ended June 30, 2020, total deposit balances
increased $552.1 million, or 13.9%.  Transaction account balances increased
$566.0 million to $2.81 billion at June 30, 2020, while retail certificates of
deposit decreased $50.1 million, to $1.30 billion at June 30, 2020.  The
increases in transaction accounts were primarily a result of increased customers
in the CDARS reciprocal program, money market accounts and NOW deposit accounts.
 Retail certificates of deposit decreased due to a decrease in retail
certificates generated through the banking center network, partially offset by
increases in customer deposits in the CDARS reciprocal program.  Customer
deposits at June 30, 2020 and December 31, 2019, totaling $51.6 million and
$35.3 million, respectively, were part of the CDARS program, which allows
customers to maintain balances in an insured manner that would otherwise exceed
the FDIC deposit insurance limit. Brokered deposits, including CDARS program
purchased funds, were $407.8 million at June 30, 2020, an increase of $36.1
million from $371.7 million at December 31, 2019.



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.

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Federal Home Loan Bank Advances and Short-Term Borrowings.  The Company had no
Federal Home Loan Bank advances outstanding at both June 30, 2020 and December
31, 2019.  At June 30, 2020, there were also no overnight borrowings from the
FHLBank.  At December 31, 2019, there were no borrowings from the FHLBank other
than overnight advances, which are included in the short term borrowings
category.



Short term borrowings and other interest-bearing liabilities decreased $226.9
million from $228.2 million at December 31, 2019 to $1.3 million at June 30,
2020.  The short term borrowings included overnight FHLBank borrowings of $-0-
and $196.0 million at June 30, 2020 and December 31, 2019, respectively. The
Company utilizes both overnight borrowings and short-term FHLBank advances
depending on relative interest rates.



Securities sold under reverse repurchase agreements with customers. Securities
sold under reverse repurchase agreements with customers increased $107.5 million
from $84.2 million at December 31, 2019 to $191.6 million at June 30, 2020.

These balances fluctuate over time based on customer demand for this product. A large portion of this increase is related to two customers who placed additional funds in these account types.





Subordinated notes. Subordinated notes increased $73.8 million from $74.2
million at December 31, 2019 to $148.0 million at June 30, 2020.  The Company
issued $75.0 million of subordinated notes in June 2020, receiving net proceeds
of $73.5 million.



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 LIBOR, three-month
LIBOR 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 "Item 3. Quantitative and Qualitative
Disclosures About Market Risk").  In addition, our net interest income has been
impacted by changes in the cash flows expected to be received from acquired loan
pools.  As described in Note 7 of the Notes to the Consolidated Financial
Statements contained in this report, the Company's evaluation of cash flows
expected to be received from acquired loan pools has been on-going and increases
in cash flow expectations have been recognized as increases in accretable yield
through interest income.  Decreases in cash flow expectations have been
recognized as impairments through the allowance for loan losses.



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 change 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 June 30, 2020, the Federal Funds rate stood at 0.25%.  A
substantial portion of Great Southern's loan portfolio ($2.09 billion at June
30, 2020) is tied to the one-month or three-month LIBOR index and will be
subject to adjustment at least once within 90 days after June 30, 2020.  Of
these loans, $1.97 billion had interest rate floors.  Great Southern also has a
portfolio of loans ($227 million at June 30, 2020) tied to a "prime rate" of
interest and will adjust immediately with changes to the "prime rate" of
interest.  A rate cut by the FRB generally would have an anticipated immediate
negative impact on the Company's net interest income due to the large total
balance of loans tied to the one-month or three-month LIBOR index 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.  Because
the Federal Funds rate is again very low, there may also be a negative impact on
the Company's net interest income due to the Company's inability to
significantly lower its funding costs in the current competitive rate
environment, although interest rates on assets may decline further. Conversely,
interest rate increases would normally result in increased interest rates on our
LIBOR-based and prime-based loans.  As of June 30, 2020, Great Southern's
interest rate risk models indicate that, generally, rising interest rates are
expected to have a positive impact on the Company's net interest income, while
declining interest rates are expected to have a negative impact on net interest
income. 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

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interest income is not likely to be significantly affected either positively or
negatively in the first twelve months following a rate change, regardless of any
changes in interest rates, because our portfolios are relatively well-matched in
a twelve-month horizon. In a situation where market interest rates decrease
significantly in a short period of time, as they did in March 2020, our net
interest margin decrease may be more pronounced in the very near term (first one
to three months), due to fairly rapid decreases in LIBOR interest rates. In the
subsequent months we expect that the net interest margin would stabilize and
begin to improve, as renewal interest rates on maturing time deposits are
expected to decrease compared to the current rates paid on those products.
 During the latter half of 2019 and the six months ended June 30, 2020, we did
experience some compression of our net interest margin percentage due to 2.25%
of Federal Fund rate cuts over that time period.  Margin compression primarily
resulted from generally slower changing average interest rates on deposits and
borrowings and lower yields on loans and other interest-earning assets.  LIBOR
interest rates have recently decreased, putting pressure on loan yields, and
strong pricing competition for loans and deposits remains in most of our
markets.  For further discussion of the processes used to manage our exposure to
interest rate risk, see "Item 3.  Quantitative and Qualitative Disclosures About
Market Risk - How We Measure the Risks to Us Associated with Interest Rate
Changes."



Non-Interest Income and Non-Interest (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, late charges and prepayment fees on loans, gains on sales of loans
and available-for-sale investments and other general operating income.
Non-interest income may also be affected by the Company's interest rate
derivative activities, if the Company chooses to implement derivatives.  See
Note 16 "Derivatives and Hedging Activities" in the Notes to Consolidated
Financial Statements included in this report.



Operating expenses consist primarily of salaries and employee benefits,
occupancy-related expenses, expenses related to foreclosed assets, postage, FDIC
deposit insurance, advertising and public relations, telephone, professional
fees, office expenses and other general operating expenses.  Details of the
current period changes in non-interest income and non-interest expense are
provided in the "Results of Operations and Comparison for the Three and Six
Months Ended June 30, 2020 and 2019" section of this report.

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.



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 recently 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 requirement began phasing in on January 1, 2016 when
a buffer greater

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                                       53

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than 0.625% of risk-weighted assets was required, which amount increased an equal amount each year until the buffer requirement of greater than 2.5% of risk-weighted assets became fully implemented on January 1, 2019.





Effective January 1, 2015, 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" of between 8 and 10 percent. Any qualifying depository institution or its
holding company that exceeds the "Community Bank Leverage Ratio" 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. Effective January 1, 2020, the Community Bank Leverage Ratio was
9.0%. In April 2020, pursuant to the CARES Act, the federal bank regulatory
agencies announced the issuance of two interim final rules, effective
immediately, to provide temporary relief to community banking organizations.
 Under the interim final rules, the Community Bank Leverage Ratio requirement is
a minimum of 8% for the remainder of calendar year 2020, 8.5% for calendar year
2021, and 9% thereafter.  The Company and the Bank have chosen to not utilize
the new Community Bank Leverage Ratio, 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.





It is difficult at this time to predict when or how any new standards under the
Economic Growth Act will ultimately be applied to us or what specific impact the
Economic Growth Act and the forthcoming implementing rules and regulations will
have on us.



Business Initiatives



The banking center network continues to evolve. In early April 2020, the Company
was notified by its landlord that the Great Southern banking centers located
inside the Hy-Vee stores at 2900 Devils Glen Rd in Bettendorf, Iowa, and 2351 W.
Locust St. in Davenport, Iowa, must permanently cease operations due to store
infrastructure changes. These offices have been closed to the public since late
March 2020 due to the COVID-19 pandemic. Bank customers were previously informed
and the Hy-Vee banking centers were permanently closed on July 21, 2020, with
customer accounts transferring to nearby offices. Great Southern now operates
three banking centers in the Quad Cities market area - two in Davenport and one
in Bettendorf.



During the second quarter 2020, remodeling of the downtown office at 1900 Main
in Parsons, Kansas, continued, which includes the addition of drive-thru banking
lanes. Remodeling is expected to be completed in mid-August, whereupon the
nearby drive-thru facility will be consolidated into the downtown office,
leaving one location serving the Parsons market.



In June 2020, the Company completed the public offering and sale of $75 million
of its 5.50% Fixed-to-Floating Rate Subordinated Notes due June 15, 2030. The
Notes were sold at par, resulting in net proceeds, after

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underwriting discounts, commissions and other expenses, of approximately $73.5
million. The Notes are intended to qualify as Tier 2 capital for regulatory
purposes. The Company intends to use the net proceeds of the offering for
general corporate purposes, which may include repayment or redemption of
outstanding indebtedness, the payment of dividends, providing capital to support
its organic growth or growth through strategic acquisitions, capital
expenditures, financing investments, repurchasing shares of its common stock and
for investments in the Bank as regulatory capital.



On June 17, 2020, the Company announced that Douglas Marrs, Vice President and
Director of Operations of the Bank and Secretary of the Company, intends to
retire in June 2021.  Mr. Marrs is primarily responsible for general bank
operations and facilities management.  He announced his intention to retire well
in advance to assure an orderly leadership transition over the next year. With
more than 40 years in the banking industry, Mr. Marrs joined Great Southern in
1996. He has been an integral part of the Bank's growth and success for the last
24 years. During that time period, the Bank has grown from approximately $700
million in assets with operations primarily in the southwest Missouri region, to
approximately $5.6 billion in assets and offices in 11 states, as of June 30,
2020.



Great Southern Bank has been recognized as part of Forbes' annual list of the
World's Best Banks 2020. Great Southern was ranked as the sixth best bank in the
United States. The World's Best Banks list is comprised of the financial
institutions that differentiate their services and build trustworthy
relationships with their customers. 450 banks around the world are featured on
the list, which was announced online on May 14, 2020, and can currently be
viewed on the Forbes website. The study involved 40,000 bank customers from 23
countries to rate banks they are involved with on general satisfaction and key
attributes like trust, fees, digital services and financial advice.

Comparison of Financial Condition at June 30, 2020 and December 31, 2019





During the six months ended June 30, 2020, the Company's total assets increased
by $551.6 million to $5.57 billion.  The increase was primarily attributable to
an increase in loans receivable, available-for-sale investment securities, and
cash equivalents.



Cash and cash equivalents were $473.6 million at June 30, 2020, an increase of
$253.4 million, or 115.1%, from $220.2 million at December 31, 2019. This
increase was primarily related to excess funds held at the Federal Reserve Bank
after repayment of FHLBank overnight borrowings.



The Company's available-for-sale securities increased $72.7 million, or 19.4%,
compared to December 31, 2019.  The increase was primarily due to the purchase
of FNMA and GNMA fixed-rate multi-family mortgage-backed securities and
short-term municipal securities, partially offset by calls of municipal
securities and normal monthly payments received related to the portfolio of
mortgage-backed securities.  The available-for-sale securities portfolio was
8.0% and 7.5% of total assets at June 30, 2020 and December 31, 2019,
respectively.



Net loans increased $245.7 million from December 31, 2019, to $4.40 billion at
June 30, 2020.  Excluding FDIC-assisted acquired loans and mortgage loans held
for sale, total gross loans (including the undisbursed portion of loans)
increased $241.0 million, or 4.9%, from December 31, 2019 to June 30, 2020. This
increase was primarily in other residential (multi-family) loans ($158.6
million), commercial business loans ($128.1 million), and one- to four-family
residential loans ($76.5 million).  These increases were partially offset by
decreases in construction loans ($115.4 million) and consumer auto loans ($37.9
million).



Total liabilities increased $527.9 million, from $4.41 billion at December 31,
2019 to $4.94 billion at June 30, 2020.  The increase was primarily attributable
to an increase in deposits, securities sold under reverse repurchase agreements
and subordinated notes, primarily offset by a decrease in short term borrowings.



Total deposits increased $552.1 million, or 13.9%, to $4.51 billion at June 30,
2020.  Transaction account balances increased $566.0 million to $2.81 billion at
June 30, 2020, while retail certificates of deposit decreased $50.1 million
compared to December 31, 2019, to $1.30 billion at June 30, 2020.  The increase
in transaction accounts was primarily a result of increases in NOW deposit
accounts, money market accounts and Insured Cash Sweep (ICS) reciprocal
accounts.  Retail certificates of deposit decreased due to a net decrease in
retail certificates generated through the banking center network, partially
offset by increases in customer deposits in the CDARS reciprocal program.

Customer deposits at June 30, 2020 and December 31, 2019 totaling $51.6 million and $35.3 million,

--------------------------------------------------------------------------------


respectively, were part of the CDARS program, which allows customers to maintain
balances in an insured manner that would otherwise exceed the FDIC deposit
insurance limit. Brokered deposits, including CDARS program purchased funds,
were $407.8 million at June 30, 2020, an increase of $36.1 million from $371.7
million at December 31, 2019.

The Company had no FHLBank advances outstanding at both June 30, 2020 and December 31, 2019. At December 31, 2019, there were no borrowings from the FHLBank other than overnight advances, which are included in the short term borrowings category. There were no borrowings from FHLBank outstanding at June 30, 2020.





Short term borrowings and other interest-bearing liabilities decreased $226.9
million from $228.2 million at December 31, 2019 to $1.3 million at June 30,
2020.  Short term borrowings at June 30, 2020 and December 31, 2019, included
overnight FHLBank borrowings of $-0- million and $196.0 million, respectively.
The Company utilizes both overnight borrowings and short term FHLBank advances
depending on relative interest rates.



Securities sold under reverse repurchase agreements with customers increased
$107.5 million from $84.2 million at December 31, 2019 to $191.6 million at June
30, 2020.  These balances fluctuate over time based on customer demand for this
product.



Subordinated notes increased $73.8 million from $74.2 million at December 31,
2019 to $148.0 million at June 30, 2020.  The Company issued $75.0 million of
subordinated notes in June 2020, receiving net proceeds of $73.5 million.



Total stockholders' equity increased $23.6 million from $603.1 million at
December 31, 2019 to $626.7 million at June 30, 2020.  The Company recorded net
income of $28.1 million for the six months ended June 30, 2020.   Accumulated
other comprehensive income increased $26.8 million due to increases in the fair
value of available-for-sale investment securities and the termination value of
the cash flow hedge.  In addition, total stockholders' equity increased $817,000
due to stock option exercises. These increases were partially offset by
dividends declared on common stock of $23.8 million and repurchases of the
Company's common stock totaling $8.1 million.

Results of Operations and Comparison for the Three and Six Months Ended June 30, 2020 and 2019





General



Net income was $13.2 million for the three months ended June 30, 2020 compared
to $18.4 million for the three months ended June 30, 2019.  This decrease of
$5.2 million, or 28.1%, was primarily due to an increase in provision for loan
losses of $4.4 million, or 275.0%, a decrease in net interest income of $1.5
million or 3.3%, and an increase in noninterest expense of $966,000, or 3.4%,
partially offset by an increase in noninterest income of $1.1 million, or 15.4%,
and a decrease in income tax expense of $556,000, or 14.9%.



Net income was $28.1 million for the six months ended June 30, 2020 compared to
$36.0 million for the six months ended June 30, 2019.  This decrease of $7.9
million, or 22.0%, was primarily due to an increase in provision for loan losses
of $6.3 million, or 178.1%, an increase in noninterest expense of $3.3 million,
or 5.8%, and a decrease in net interest income of $1.1 million, or 1.3%,
partially offset by a decrease in income tax expense of $1.8 million, or 23.4%,
and an increase in noninterest income of $1.0 million, or 7.0%.



Total Interest Income



Total interest income decreased $4.7 million, or 8.0%, during the three months
ended June 30, 2020 compared to the three months ended June 30, 2019.  The
decrease was due to a $4.9 million decrease in interest income on loans,
partially offset by an increase in interest income on investments and other
interest-earning assets of $211,000.  Interest income on loans decreased for the
three months ended June 30, 2020 compared to the same period in 2019, due to
lower average rates of interest on loans, partially offset by higher average
balances.  Interest income from investment securities and other interest-earning
assets increased during the three months ended June 30, 2020 compared to the
same period in 2019 primarily due to higher average balances of investment
securities and other interest-earning assets, significantly offset by lower
average rates of interest.

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Total interest income decreased $4.6 million, or 4.0%, during the six months
ended June 30, 2020 compared to the six months ended June 30, 2019.  The
decrease was due to a $5.3 million decrease in interest income on loans,
partially offset by a $753,000 increase in interest income on investments and
other interest-earning assets. Interest income on loans decreased for the six
months ended June 30, 2020 compared to the same period in 2019, due to lower
average rates of interest on loans, partially offset by higher average balances.
 Interest income from investment securities and other interest-earning assets
increased during the six months ended June 30, 2020 compared to the same period
in 2019 primarily due to higher average balances of investment securities and
other interest-earning assets, significantly offset by lower average rates of
interest.



Interest Income - Loans



During the three months ended June 30, 2020 compared to the three months ended
June 30, 2019, interest income on loans decreased $8.2 million as a result of
lower average interest rates on loans.  The average yield on loans decreased
from 5.40% during the three months ended June 30, 2019, to 4.64% during the
three months ended June 30, 2020.  This decrease was primarily due to decreased
yields in most loan categories as a result of decreased LIBOR and Federal Funds
interest rates.  In addition in the 2020 period, the Company originated $120
million of PPP loans, which have a much lower yield compared to the overall loan
portfolio. Interest income on loans increased $3.3 million as the result of
higher average loan balances, which increased from $4.14 billion during the
three months ended June 30, 2019, to $4.40 billion during the three months ended
June 30, 2020.  The higher average balances were primarily due to organic loan
growth in commercial business loans (including the PPP loans), other residential
(multi-family), and one- to four-family residential loans, partially offset by
decreases in outstanding construction and consumer loans.



During the six months ended June 30, 2020 compared to the six months ended June
30, 2019, interest income on loans decreased $10.8 million as a result of lower
average interest rates on loans.  The average yield on loans decreased from
5.41% during the six months ended June 30, 2019, to 4.89% during the six months
ended June 30, 2020.  This decrease was primarily due to decreased yields in
most loan categories as a result of decreased LIBOR and Federal Funds interest
rates during the six months ended June 30, 2020. This decrease also includes PPP
loans, which have a much lower yields compared to the overall loan portfolio.
Interest income on loans increased $5.4 million as the result of higher average
loan balances, which increased from $4.11 billion during the six months ended
June 30, 2019, to $4.31 billion during the six months ended June 30, 2020.  The
higher average balances were primarily due to organic loan growth in commercial
business loans (including the PPP loans), other residential (multi-family), and
one- to four-family residential loans, partially offset by decreases in
outstanding construction and consumer loans.



On an on-going basis, the Company has estimated the cash flows expected to be
collected from the acquired loan pools. For each of the loan portfolios
acquired, the cash flow estimates have increased, based on the payment histories
and the collection of certain loans, thereby reducing loss expectations of
certain loan pools, resulting in adjustments to be spread on a level-yield basis
over the remaining expected lives of the loan pools.  For the three months ended
June 30, 2020 and 2019, the adjustments increased interest income by $1.5
million and $1.4 million, respectively. For the six months ended June 30, 2020
and 2019, the adjustments increased interest income by $3.4 million and $2.9
million, respectively.



As of June 30, 2020, the remaining accretable yield adjustment that will affect
interest income was $4.2 million.  Of the remaining adjustments affecting
interest income, we expect to recognize $2.2 million of interest income during
the remainder of 2020.  Apart from the yield accretion, the average yield on
loans was 4.50% during the three months ended June 30, 2020, compared to 5.27%
during the three months ended June 30, 2019, as a result of lower current market
rates on adjustable rate loans and new loans originated during the year. Apart
from the yield accretion, the average yield on loans was 4.73% during the six
months ended June 30, 2020, compared to 5.27% during the six months ended June
30, 2019.



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.  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 reset monthly and net
settlements of interest due to/from the counterparty also occurred monthly.

the extent

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that the fixed rate exceeded one-month USD-LIBOR, the Company received net interest settlements, which were recorded as interest income on loans. If one-month 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. The Company recorded interest income related to the swap of $2.0 million and $3.6 million, respectively, in the three and six months ended June 30, 2020. The Company recorded interest income related to the swap of $568,000 and $1.1 million, respectively, in the three and six months ended June 30, 2019.





On March 2, 2020, the Company and its swap counterparty mutually agreed to
terminate the swap, effective immediately.  The Company received a payment of
$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 interest
portion and net of deferred income taxes, is reflected in the Company's
stockholders' equity as Accumulated Other Comprehensive Income and a portion of
it will be accreted to interest income on loans monthly through the original
contractual termination date of October 6, 2025. This will have the effect of
reducing Accumulated Other Comprehensive Income and increasing Interest Income
and Retained Earnings over the period. In each quarterly period, commencing with
the quarter ended June 30, 2020, until the original termination date, the
Company expects to record loan interest income related to this swap transaction
of approximately $2.0 million, based on the termination values of the swap.

Interest Income - Investments and Other Interest-earning Assets





Interest income on investments increased $667,000 in the three months ended June
30, 2020 compared to the three months ended June 30, 2019.  Interest income
increased $893,000 as a result of an increase in average balances from $309.2
million during the three months ended June 30, 2019, to $433.4 million during
the three months ended June 30, 2020.  Average balances of securities increased
primarily due to purchases of agency multi-family mortgage-backed securities
which have a fixed rate of interest with expected lives of six to twelve years.
 These purchased securities fit with the Company's current asset/liability
management strategies. Interest income decreased $226,000 as a result of lower
average interest rates from 3.13% during the three months ended June 30, 2019,
to 2.86% during the three month period ended June 30, 2020.



Interest income on investments increased in the six months ended June 30, 2020
compared to the six months ended June 30, 2019.  Interest income increased $1.8
million as a result of an increase in average balances from $293.9 million
during the six months ended June 30, 2019, to $409.2 million during the six
months ended June 30, 2020.  Average balances of securities increased primarily
due to purchases of agency multi-family mortgage-backed securities which have a
fixed rate of interest with expected lives of six to twelve years.  As noted
above, these purchased securities fit with the Company's current asset/liability
management strategies. Interest income decreased $261,000 as a result of lower
average interest rates from 3.20% during the six months ended June 30, 2019, to
3.03% during the six month period ended June 30, 2020.

Interest income on other interest-earning assets decreased $456,000 in the three months ended June 30, 2020 compared to the three months ended June 30, 2019.


 Interest income decreased $875,000, primarily as a result of the decrease in
average interest rates to 0.10% during the three months ended June 30, 2020
compared to 2.45% during the three months ended June 30, 2019.  Market interest
rates earned on balances held at the Federal Reserve Bank were significantly
lower in the 2020 period due to significant reductions in the federal funds rate
of interest. Partially offsetting this decrease, interest income increased
$419,000, primarily as a result of the increase in average balances from $88.0
million during the three months ended June 30, 2019, to $321.4 million during
the three months ended June 30, 2020. Excess liquidity, after repayments of
FHLBank borrowings, was maintained at the Federal Reserve Bank as a result of
the significant increase in deposits during the six months ended June 30, 2020.

Interest income on other interest-earning assets decreased $746,000 in the six months ended June 30, 2020 compared to the six months ended June 30, 2019.


 Interest income decreased $1.4 million, primarily as a result of the decrease
in average interest rates to 0.33% during the six months ended June 30, 2020
compared to 2.41% during the six months ended June 30, 2019.  Market interest
rates earned on balances held at the Federal Reserve Bank were significantly
lower in the 2020 period due to significant reductions in the federal funds rate
of interest. Partially offsetting this decrease, interest income increased
$672,000, primarily as a result of the increase in average balances from $91.2
million during the six months ended June 30, 2019, to $205.8 million during the
six months ended June 30, 2020.

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                                       58

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Total Interest Expense





Total interest expense decreased $3.2 million, or 23.5%, during the three months
ended June 30, 2020, when compared with the three months ended June 30, 2019,
due to a decrease in interest expense on deposits of $2.5 million, or 21.9%, a
decrease in interest expense on short-term borrowings and repurchase agreements
of $849,000, or 98.8%, and a decrease in interest expense on subordinated
debentures issued to capital trust of $100,000, or 37.5%, partially offset by an
increase in interest expense on subordinated notes of $244,000, or 22.3%.



Total interest expense decreased $3.5 million, or 13.0%, during the six months
ended June 30, 2020, when compared with the six months ended June 30, 2019, due
to a decrease in interest expense on deposits of $2.4 million, or 11.0%, a
decrease in interest expense on short-term borrowings and repurchase agreements
of $1.1 million, or 63.0%, and a decrease in interest expense on subordinated
debentures issued to capital trust of $151,000, or 28.3%, partially offset by an
increase in interest expense on subordinated notes of $243,000, or 11.1%.



Interest Expense - Deposits



Interest expense on demand deposits decreased $453,000 due to average rates of
interest that decreased from 0.52% in the three months ended June 30, 2019 to
0.41% in the three months ended June 30, 2020.  Partially offsetting this
decrease, interest expense on demand deposits increased $385,000, due to an
increase in average balances from $1.50 billion during the three months ended
June 30, 2019 to $1.84 billion during the three months ended June 30, 2020.

The

Company experienced increased balances in ICS reciprocal balances, money market accounts and certain types of NOW accounts.





Interest expense on demand deposits increased $533,000 due to an increase in
average balances from $1.49 billion for the six months ended June 30, 2019 to
$1.71 billion for the six months ended June 30, 2020. Partially offsetting this
increase, interest expense on demand deposits decreased $247,000 due to average
rates of interest that decreased from 0.50% in the six months ended June 30,
2019 compared to 0.47% in the six months ended June 30, 2020.



Interest expense on time deposits decreased $2.8 million as a result of a
decrease in average rates of interest from 2.23% during the three months ended
June 30, 2019, to 1.61% during the three months ended June 30, 2020.  Interest
expense on time deposits increased $300,000 due to an increase in average
balances of time deposits from $1.73 billion during the three months ended June
30, 2019 to $1.79 billion in the three months ended June 30, 2020.  A large
portion of the Company's certificate of deposit portfolio matures within six to
eighteen 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 lower rate of interest due to market interest rate decreases during the
latter portion of 2019 and through the first half of 2020.  In the three months
ended June 30, 2020, the increase in average balances of time deposits was a
result of increases in both retail customer time deposits obtained through
on-line channels and brokered deposits, which were mainly added in the three
months ended March 31, 2020.



Interest expense on time deposits decreased $3.2 million as a result of a
decrease in average rates of interest from 2.17% during the six months ended
June 30, 2019, to 1.80% during the six months ended June 30, 2020.  Interest
expense on time deposits increased $514,000 due to an increase in average
balances of time deposits from $1.70 billion during the six months ended June
30, 2019 to $1.75 billion in the six months ended June 30, 2020.  A large
portion of the Company's certificate of deposit portfolio matures within six to
eighteen 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 lower rate of interest due to market interest rate decreases during the
latter portion of 2019 and through the first half of 2020.  In the six months
ended June 30, 2020, the increase in average balances of time deposits was a
result of increases in retail customer time deposits obtained through on-line
channels and increases in brokered deposits including those added through the
CDARS program purchased funds.

Interest Expense - FHLBank Advances, Short-term Borrowings and Repurchase Agreements, Subordinated Debentures Issued to Capital Trusts and Subordinated Notes

--------------------------------------------------------------------------------


FHLBank advances were not utilized during the three months ended June 30, 2020
and 2019.  Overnight borrowings from the FHLBank were utilized during the three
and six months ended June 30, 2019 and are included in short-term borrowings.



Interest expense on short-term borrowings and repurchase agreements decreased
$632,000 due to a decrease in average rates from 1.41% in the three months ended
June 30, 2019 to 0.03% in the three months ended June 30, 2020.  The decrease
was due to a decrease in market interest rates during the period and the lower
interest rate charged on overnight FHLBank borrowings.  Interest expense on
short-term borrowings and repurchase agreements also decreased $217,000 due to a
decrease in average balances from $244.6 million during the three months ended
June 30, 2019 to $162.3 million during the three months ended June 30, 2020,
which was primarily due to changes in the Company's funding needs and the mix of
funding, which can fluctuate.



Interest expense on short-term borrowings and repurchase agreements decreased
$886,000 due to a decrease in average rates from 1.43% in the six months ended
June 30, 2019 to 0.62% in the six months ended June 30, 2020.  The decrease was
due to a decrease in market interest rates during the period and the lower
interest rate charged on overnight FHLBank borrowings.  Interest expense on
short-term borrowings and repurchase agreements also decreased $235,000 due to a
decrease in average balances from $251.3 million during the six months ended
June 30, 2019 to $213.7 million during the six months ended June 30, 2020, which
was primarily due to changes in the Company's funding needs and the mix of
funding, which can fluctuate.



During the three months ended June 30, 2020, compared to the three months ended
June 30, 2019, interest expense on subordinated debentures issued to capital
trusts decreased $100,000 due to lower average interest rates.  The average
interest rate was 4.16% in the three months ended June 30, 2019 compared to
2.60% in the three months ended June 30, 2020.  The subordinated debentures are
variable-rate debentures which bear interest at an average rate of three-month
LIBOR plus 1.60%, adjusting quarterly, which was 2.29% at June 30, 2020.  There
was no change in the average balance of the subordinated debentures between the
2020 and the 2019 periods.



During the six months ended June 30, 2020, compared to the six months ended June
30, 2019, interest expense on subordinated debentures issued to capital trusts
decreased $151,000 due to lower average interest rates.  The average interest
rate was 4.18% in the six months ended June 30, 2019 compared to 2.99% in the
six months ended June 30, 2020.  There was no change in the average balance of
the subordinated debentures between the 2020 and the 2019 periods.



In August 2016, the Company issued $75.0 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, these 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. During the three months ended
June 30, 2020, compared to the three months ended June 30, 2019, interest
expense on subordinated notes increased $244,000 primarily due to the higher
average balances due to the issuance of new notes in the three months ended June
30, 2020.  The increase of $243,000 in the six-month period was for the same
reason as stated for the three-month period.



Net Interest Income



Net interest income for the three months ended June 30, 2020 decreased $1.4
million to $43.5 million compared to $44.9 million for the three months ended
June 30, 2019.  Net interest margin was 3.39% in the three months ended June 30,
2020, compared to 3.97% in the three months ended June 30, 2019, a decrease of
58 basis points, or 14.6%.  In both three month periods, the Company's net
interest income and margin were positively impacted by the increases in expected
cash flows from the FDIC-assisted acquired loan pools and the resulting increase
to accretable yield, which were previously discussed in Note 7 of the Notes to
Consolidated Financial Statements.  The positive impact of these changes in the
three months ended June 30, 2020 and 2019 were increases in interest income of
$1.5 million and $1.4 million, respectively, and increases in net interest
margin of 12 basis points and 12 basis points, respectively.  Excluding the
positive impact of the additional yield accretion, in the three months ended
June 30,

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                                       60

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2020, net interest margin decreased 58 basis points when compared to the
year-ago three month period.  The decrease was partially due to lower market
interest rates, which caused lower LIBOR interest rates and generally resulted
in lower yields on loans and other interest-earning assets. The margin decrease
also resulted from an increase in average interest-earning assets that were
primarily at rates that were much lower than the current portfolio rates.
 Increases included $260 million in loans ($120 million of which were PPP
loans), $230 million of interest-earning cash equivalents and $125 million of
investment securities. In addition, the subordinated notes issued in June 2020
reduced net interest income by approximately $244,000 in the second quarter of
2020.



Net interest income for the six months ended June 30, 2020 decreased $1.1
million to $88.4 million compared to $89.5 million for the six months ended June
30, 2019.  Net interest margin was 3.61% in the six months ended June 30, 2020,
compared to 4.02% in the six months ended June 30, 2019, a decrease of 41 basis
points, or 10.2%.  In both six month periods, the Company's net interest income
and margin were positively impacted by the increases in expected cash flows from
the FDIC-assisted acquired loan pools and the resulting increase to accretable
yield, which were previously discussed in Note 7 of the Notes to Consolidated
Financial Statements.  The positive impact of these changes in the six months
ended June 30, 2020 and 2019 were increases in interest income of $3.4 million
and $2.9 million, respectively, and increases in net interest margin of 14 basis
points and 13 basis points, respectively.  Excluding the positive impact of the
additional yield accretion, in the six months ended June 30, 2020, net interest
margin decreased 42 basis points when compared to the year-ago six month period.
 The decrease was partially due to lower market interest rates, which caused
lower LIBOR interest rates and generally resulted in lower yields on loans and
other interest-earning assets. The margin decrease also resulted from an
increase in average interest-earning assets that were primarily at rates that
were much lower than the current portfolio rates, as described above.



The Company's overall average interest rate spread decreased 52 basis points, or
14.3%, from 3.64% during the three months ended June 30, 2019 to 3.12% during
the three months ended June 30, 2020.  The decrease was due to a 98 basis point
decrease in the weighted average yield on interest-earning assets, partially
offset by a 46 basis point decrease in the weighted average rate paid on
interest-bearing liabilities. In comparing the two periods, the yield on loans
decreased 76 basis points, the yield on investment securities decreased 27 basis
points and the yield on other interest-earning assets decreased 235 basis
points. The rate paid on deposits decreased 44 basis points, the rate paid on
short-term borrowings and repurchase agreements decreased 138 basis points, the
rate paid on subordinated debentures issued to capital trusts decreased 156
basis points, and the rate paid on subordinated notes increased six basis
points.



The Company's overall average interest rate spread decreased 37 basis points, or
10.0%, from 3.69% during the six months ended June 30, 2019 to 3.32% during the
six months ended June 30, 2020.  The decrease was due to a 66 basis point
decrease in the weighted average yield on interest-earning assets, partially
offset by a 29 basis point decrease in the weighted average rate paid on
interest-bearing liabilities. In comparing the two periods, the yield on loans
decreased 52 basis points, the yield on investment securities decreased 17 basis
points and the yield on other interest-earning assets decreased 208 basis
points. The rate paid on deposits decreased 25 basis points, the rate paid on
short-term borrowings and repurchase agreements decreased 81 basis points, the
rate paid on subordinated debentures issued to capital trusts decreased 119
basis points, and the rate paid on subordinated notes decreased one basis point.

For additional information on net interest income components, refer to the "Average Balances, Interest Rates and Yields" tables in this Quarterly Report on Form 10-Q.

Provision for Loan Losses and Allowance for Loan Losses





In the first quarter of 2020, pursuant to the recently-enacted CARES Act and
guidance from the SEC and FASB, we elected to delay adoption of the new
accounting standard (CECL) related to accounting for credit losses.  Our
financial statements for the three and six months ended June 30, 2020, are
prepared under the existing incurred loss methodology standard for accounting
for loan losses.



Management records a provision for loan losses in an amount it believes is
sufficient to result in an allowance for loan losses that will cover current net
charge-offs as well as risks believed to be inherent in the loan portfolio of
the Bank. The amount of provision charged against current income is based on
several factors, including, but not limited to, past loss experience, current
portfolio mix, actual and potential losses identified in the loan portfolio,
economic

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conditions, and internal as well as external reviews. The levels of non-performing assets, potential problem loans, loan loss provisions and net charge-offs fluctuate from period to period and are difficult to predict.





Worsening economic conditions from the COVID-19 pandemic, higher inflation or
interest rates, or other factors may lead to increased losses in the portfolio
and/or requirements for an increase in loan loss provision expense. Management
maintains various controls in an attempt to limit future losses, such as a watch
list of possible 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,
on-going correspondence with borrowers and problem loan work-outs. Management
determines which loans are potentially uncollectible, or represent a greater
risk of loss, and makes additional provisions to expense, if necessary, to
maintain the allowance at a satisfactory level.



The provision for loan losses for the three months ended June 30, 2020 was $6.0
million compared with $1.6 million for the three months ended June 30, 2019. The
provision for loan losses for the six months ended June 30, 2020 was $9.9
million compared with $3.6 million for the six months ended June 30, 2019. Total
net charge-offs were $127,000 and $997,000 for the three months ended June 30,
2020 and 2019, respectively.  During the three months ended June 30, 2020,
$115,000 of the $127,000 of net charge-offs were in the consumer category. Total
net charge-offs were $365,000 and $2.7 million for the six months ended June 30,
2020 and 2019, respectively. During the six months ended June 30, 2020, $382,000
of the $365,000 of net charge-offs were in the consumer category. The Company
experienced net recoveries in some of the other loan categories. We have seen
and expect to continue to see rapid reductions in the automobile loan
outstanding balance as we determined in February 2019 to cease providing
indirect lending services to automobile dealerships.  At June 30, 2020, indirect
automobile loans totaled approximately $74 million.  We expect this balance will
be largely paid off in the next two years. General market conditions and unique
circumstances related to individual borrowers and 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.



All FDIC-acquired loans were grouped into pools based on common characteristics
and were recorded at their estimated fair values, which incorporated estimated
credit losses at the acquisition date.  These loan pools have been
systematically reviewed by the Company to determine the risk of losses that may
exceed those identified at the time of the acquisition.  Techniques used in
determining risk of loss are similar to those used to determine the risk of loss
for the legacy Great Southern Bank portfolio, with most focus being placed on
those loan pools which include the larger loan relationships and those loan
pools which exhibit higher risk characteristics.  Review of the acquired loan
portfolio also includes review of financial information, collateral valuations
and customer interaction to determine if additional reserves are warranted.



The Bank's allowance for loan losses as a percentage of total loans, excluding
FDIC-assisted acquired loans, was 1.14% and 1.00% at June 30, 2020 and December
31, 2019, respectively.  Management considers the allowance for loan losses
adequate to cover losses inherent in the Bank's loan portfolio at June 30, 2020,
based on recent reviews of the Bank's loan portfolio and current economic
conditions. If economic conditions were to deteriorate further or management's
assessment of the loan portfolio were to change, it is expected that additional
loan loss provisions would be required, thereby adversely affecting the
Company's future results of operations and financial condition.



Non-performing Assets



Non-performing assets acquired through FDIC-assisted transactions, including
foreclosed assets and potential problem loans, are not included in the totals or
in the discussion of non-performing loans, potential problem loans and
foreclosed assets below.  These assets were initially recorded at their
estimated fair values as of their acquisition dates and are accounted for in
pools.  Therefore, these loan pools are analyzed rather than the individual
loans. The overall performance of the loan pools acquired in each of the five
FDIC-assisted transactions has been better than original expectations as of the
acquisition dates.

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, excluding all FDIC-assisted acquired assets, at June 30,
2020 were $7.6 million, a decrease of $542,000 from $8.2 million at December 31,
2019.  Non-performing assets, excluding all FDIC-assisted acquired assets, as a
percentage of total assets were 0.14% at June 30, 2020 and 0.16% at December 31,
2019.



Compared to December 31, 2019, non-performing loans increased $770,000 to $5.3
million at June 30, 2020, and foreclosed assets decreased $1.3 million to $2.3
million at June 30, 2020.  Non-performing one- to four-family residential loans
comprised $2.4 million, or 45.2%, of the total non-performing loans at June 30,
2020, an increase of $911,000 from December 31, 2019. Non-performing commercial
business loans comprised $1.2 million, or 22.3%, of the total non-performing
loans at June 30, 2020, a decrease of $53,000 from December 31, 2019.
 Non-performing consumer loans comprised $1.0 million, or 18.8%, of the total
non-performing loans at June 30, 2020, a decrease of $183,000 from December 31,
2019.  Non-performing commercial real estate loans comprised $727,000, or 13.7%,
of the total non-performing loans at June 30, 2020, an increase of $95,000 from
December 31, 2019.

Non-performing Loans. Activity in the non-performing loans category during the six months ended June 30, 2020 was as follows:







                                                                   Transfers to     Transfers to
                      Beginning     Additions        Removed        Potential        Foreclosed                                 Ending
                      Balance,       to Non-        from Non-        Problem         Assets and       Charge-                  Balance,
                      January 1     Performing      Performing        Loans


        Repossessions      Offs       Payments     June 30
                                                                       (In Thousands)
One- to four-family
construction        $         -   $          -    $          -   $            -   $            -    $      -    $       -    $        -
Subdivision
construction                  -              -               -                -                -           -            -             -
Land development              -              -               -                -                -           -            -             -
Commercial
construction                  -              -               -                -                -           -            -             -
One- to four-family
residential               1,477          1,104               -                -                -           -         (193)        2,388
Other residential             -              -               -                -                -           -            -             -
Commercial real
estate                      632            107               -                -                -           -          (12)          727
Commercial business       1,235              -               -                -                -           -          (53)        1,182
Consumer                  1,175            276               -                -              (72)       (148)        (239)          992

Total               $     4,519   $      1,487    $          -   $            -   $          (72)   $   (148)   $    (497)   $    5,289






At June 30, 2020, the non-performing commercial business category included three
loans, none of which were added during 2020.  The largest relationship in this
category, which was added during 2018, totaled $1.0 million, or 87.5% of the
total category.  This relationship is collateralized by an assignment of an
interest in a real estate project.  The non-performing one- to four-family
residential category included 35 loans, 13 of which were added during the six
months ended June 30, 2020.  The largest relationship in the category totaled
$276,000, or 11.5% of the total category.  The non-performing commercial real
estate category included three loans, one of which was added during the six
months ended June 30, 2020.  The largest relationship in the category totaled
$530,000, or 72.9% of the total category, and is primarily related to a
multi-tenant building in Arkansas.  The non-performing consumer category
included 94 loans, 24 of which were added during the six months ended June 30,
2020, and the majority of which are indirect used automobile loans.



Potential Problem Loans.  Compared to December 31, 2019, potential problem loans
decreased $387,000, or 8.8%, to $4.0 million at June 30, 2020.  This decrease
was primarily due to payments of $377,000 on potential problem loans, $119,000
in loans transferred to non-performing loans, $52,000 in loans transferred to
foreclosed assets and repossessions, and $70,000 in loan write-downs, partially
offset by $231,000 in loans added to potential problem loans. 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 the current repayment terms.  These loans are not
reflected in non-performing assets, but are considered in determining the
adequacy of the allowance for loan losses.

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                                       63

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Due to the deteriorating economic conditions from COVID-19, it is possible that
we could experience an increase in potential problem loans in the remainder of
2020.  As noted, we experienced an increased level of loan modifications in late
March through June 2020.  In accordance with the CARES Act and guidance from the
banking regulatory agencies, we made certain short-term modifications to loan
terms to help our customers navigate through the current pandemic situation.
 Although loan modifications were made, they did not result in these loans being
classified as troubled debt restructurings, potential problem loans or
non-performing loans.  If more severe or lengthier negative impacts of the
COVID-19 pandemic occur or the effects of the SBA loan programs and other loan
and stimulus programs do not enable companies and individuals to completely
recover financially, this could result in longer-term modifications, which may
be deemed to be troubled debt restructurings, additional potential problem loans
and/or additional non-performing loans.  Further actions on our part, including
additions to the allowance for loan losses, could result.

Activity in the potential problem loans categories during the six months ended June 30, 2020, was as follows:







                                                       Removed                        Transfers to
                      Beginning      Additions          from        Transfers to       Foreclosed                                 Ending
                      Balance,      to Potential      Potential         Non-           Assets and       Charge-                  Balance,
                      January 1       Problem          Problem       Performing       Repossessions      Offs       Payments     June 30
                                                                        (In Thousands)
One- to four-family
 construction       $         -   $            -    $         -   $           -     $            -    $      -    $       -    $        -
Subdivision
 construction                 -               24              -               -                  -           -            -            24
Land development              -                -              -               -                  -           -            -             -
Commercial
 construction                 -                -              -               -                  -           -            -             -
One- to four-family
  residential               791                -              -             (83)                 -           -         (128)          580
Other residential             -                -              -               -                  -           -            -             -
Commercial real
 estate                   3,078                -              -               -                  -           -         (131)        2,947
Commercial
 business                     -                -              -               -                  -           -            -             -
Consumer                    512              207              -             (36)               (52)        (70)        (118)          443

Total               $     4,381   $          231    $         -   $        (119)    $          (52)   $    (70)   $    (377)   $    3,994






At June 30, 2020, the commercial real estate category of potential problem loans
included two loans, neither of which was added during 2020.  The largest
relationship in this category (added during 2018), which totaled $1.8 million,
or 61.6% of the total category, is collateralized by a mixed use commercial
retail building.  Payments were current on this relationship at June 30, 2020.
The other relationship in the category (added during 2019), which totaled $1.1
million, or 38.4% of the total category, is collateralized by a commercial
retail building.  Payments were also current on this relationship at June 30,
2020. The one- to four-family residential category of potential problem loans
included 14 loans, none of which were added during the six months ended June 30,
2020. The consumer category of potential problem loans included 56 loans, 22 of
which were added during the six months ended June 30, 2020.



Other Real Estate Owned and Repossessions.  Of the total $4.4 million of other
real estate owned and repossessions at June 30, 2020, $1.2 million represents
the fair value of foreclosed and repossessed assets related to loans acquired in
FDIC-assisted transactions and $860,000 represents properties which were not
acquired through foreclosure. The foreclosed and other assets acquired in the
FDIC-assisted transactions and the properties not acquired through foreclosure
are not included in the following table and discussion of other real estate
owned and repossessions.

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                                       64

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Activity in other real estate owned and repossessions during the six months ended June 30, 2020, was as follows:





                          Beginning                                                            Ending
                          Balance,                                Capitalized     Write-      Balance,
                          January 1     Additions      Sales         Costs         Downs      June 30
                                                         (In Thousands)
One- to four-family
construction            $         -   $         -   $      -    $           -   $      -    $        -
Subdivision
construction                    689             -       (455)             126        (10)          350
Land development              1,816             -       (315)               -       (143)        1,358
Commercial construction           -             -          -                -          -             -
One- to four-family
residential                     601             -       (310)               -          -           291
Other residential                 -             -          -                -          -             -
Commercial real estate            -             -          -                -          -             -
Commercial business               -             -          -                -          -             -
Consumer                        545           684       (889)               -          -           340

Total                   $     3,651   $       684   $ (1,969)   $         126   $   (153)   $    2,339




At June 30, 2020, the land development category of foreclosed assets included
three properties, the largest of which was located in the Branson, Mo. area and
had a balance of $768,000, or 56.5% of the total category.  Of the total dollar
amount in the land development category of foreclosed assets, 60.2% was located
in the Branson, Mo. area, including the largest property previously mentioned. A
portion of a land development property located in the Branson, Mo. area was sold
during the three months ending March 31, 2020 for $315,000, which resulted in a
write-down of $143,000.  The subdivision construction category of foreclosed
assets included one property located in the Branson, Mo. area and had a balance
of $350,000. One property in the Branson, Mo. area was sold during the three
months ended March 31, 2020, which reduced the foreclosed assets balance by
$69,000 and another property in the Branson, Mo. area was sold during the three
months ended June 30, 2020, which reduced the foreclosed assets balance by
$260,000.  The one- to four-family residential category of foreclosed assets
included one property in Springfield, Mo and had a balance of $291,000.  A one-
to four-family residential property located in Lake Ozark, Mo. was sold during
the three months ended March 31, 2020 for $380,000, resulting in a gain of
$70,000.  The amount of additions and sales in the consumer category are due to
the volume of repossessions of automobiles, which generally are subject to a
shorter repossession process.  The Company experienced increased levels of
delinquencies and repossessions in indirect and used automobile loans throughout
2016 and 2017.  The level of delinquencies and repossessions in indirect and
used automobile loans generally decreased in 2018 through 2020.



Non-interest Income



For the three months ended June 30, 2020, non-interest income increased $1.1
million to $8.3 million when compared to the three months ended June 30, 2019,
primarily as a result of the following items:

Net gains on loan sales: Net gains on loan sales increased $1.5 million compared to the prior year period. The increase was due to an increase in originations of fixed-rate loans during the 2020 period compared to the 2019 period. Fixed rate single-family mortgage loans originated are generally subsequently sold in the secondary market.

Other income: Other income increased $667,000 compared to the prior year period. In the 2020 period, the Company recognized approximately $823,000 of fee income related to newly-originated interest rate swaps in the Company's back-to-back swap program with loan customers and swap counterparties.





Service charges and ATM fees:  Service charges and ATM fees decreased $1.2
million compared to the prior year period.  This decrease was primarily due to a
decrease in overdraft and insufficient funds fees on customer accounts. This was
due to both a reduction in usage by customers and a decision near the end of the
first quarter of 2020 to waive certain fees for customers in response to the
COVID-19 pandemic, with the effects of that decision felt primarily during the
three months ended June 30, 2020.

For the six months ended June 30, 2020, non-interest income increased $1.0 million to $15.6 million when compared to the six months ended June 30, 2019, primarily as a result of the following items:

--------------------------------------------------------------------------------


Net gains on loan sales:  Net gains on loan sales increased $1.8 million
compared to the prior year period.  The increase was due to an increase in
originations of fixed-rate loans during the 2020 period compared to the 2019
period.  As noted above, fixed rate single-family mortgage loans originated are
generally subsequently sold in the secondary market.



Other income:  Other income increased $894,000 compared to the prior year
period. In the 2020 period, the Company recognized approximately $1.3 million of
fee income related to newly-originated interest rate swaps in the Company's
back-to-back swap program with loan customers and swap counterparties.  The
Company also recognized approximately $441,000 in income related to the exit of
certain tax credit partnerships during the six months ended June 30, 2020. In
the 2019 period, the Company recognized gains totaling $677,000 from the sale
of, or recovery of, receivables and assets that were acquired several years
prior in FDIC-assisted transactions, with no similar sales or recoveries in the
current period.



Service charges and ATM fees:  Service charges and ATM fees decreased $1.4
million compared to the prior year period. This decrease was primarily due to a
decrease in overdraft and insufficient funds fees on customer accounts. As noted
above, a decision to waive certain fees for customers was made in response to
the COVID-19 pandemic during the first quarter 2020 and customer usage decreased
in the 2020 period. Also during the first quarter of 2020, $200,000 in
additional expenses netted into ATM fee income during the conversion to a new
debit card processing system.



Gain (loss) on derivative interest rate products:  The net loss on derivative
interest rate products increased $446,000 compared to the net loss in the prior
year period. In the 2020 period, the Company recognized a $514,000 decrease in
the net fair value related to interest rate swaps in the Company's back-to-back
swap program with loan customers and swap counterparties.  As market interest
rates fall this generally decreases the net fair value of these back-to-back
swaps.  This is a non-cash item as there was no required settlement of this
amount between the Company and its swap counterparties.



Non-interest Expense

For the three months ended June 30, 2020, non-interest expense increased $966,000 to $29.3 million when compared to the three months ended June 30, 2019, primarily as a result of the following items:





Salaries and employee benefits:  Salaries and employee benefits increased $1.4
million from the prior year period.  The increase was primarily due to annual
employee compensation merit increases and increased incentives in lending and
operations areas. Approximately half of the compensation increase was in the
mortgage division where we have added staff and variable compensation increased
due to significant increases in new mortgage loan originations, much of which is
sold in the secondary market as noted above



Net occupancy expense:  Net occupancy expense increased $258,000 compared to the
prior year period.  This was primarily related to increased depreciation on new
ATM/ITMs and ATM operating software upgrades implemented during the fourth
quarter of 2019. Also included in net occupancy expense for the 2020 quarter are
COVID-19-related expenses for various items such as cleaning services,
equipment, costs to set up remote work sites and other items.



Advertising:  Advertising expense decreased $405,000 compared to the prior year
period. This decrease was primarily due to activities related to sponsorship
agreements being halted as a result of the COVID-19 pandemic.



Other operating expenses: Other operating expenses decreased $187,000 from the
prior year period. This decrease was primarily due to travel restrictions during
the 2020 period. Total travel and entertainment for the three months ended June
30, 2020 was $77,000 compared to $462,000 during the prior year period. This
decrease was partially offset with small increases in other expense categories.
In response to the COVID-19 pandemic, the Company made contributions of $48,000
during the current year period to various organizations that assist the
communities the Company serves.



Insurance:  Insurance expense decreased $128,000 compared to the prior year
period. This decrease was primarily due to a decrease in FDIC deposit insurance
premiums.  The Bank had a credit with the FDIC for a portion of premiums
previously paid to the deposit insurance fund. The remaining credit offset a
portion of the deposit insurance premium due for the three months ended June 30,
2020.

For the six months ended June 30, 2020, non-interest expense increased $3.3 million to $60.2 million when compared to the six months ended June 30, 2019, primarily as a result of the following items:

--------------------------------------------------------------------------------


Salaries and employee benefits:  Salaries and employee benefits increased $3.9
million in the six months ended June 30, 2020 compared to the prior year period.
The increase was primarily due to annual employee compensation merit increases
and increased incentives in lending, including mortgage lending activities as
noted above, and operations areas. Additionally, in March 2020, the Company
approved a special cash bonus to all employees totaling $1.1 million in response
to the COVID-19 pandemic.



Net occupancy expense:  Net occupancy expense increased $623,000 in the six
months ended June 30, 2020 compared to the six months ended June 30, 2019.  This
was primarily related to increased depreciation on new ATM/ITMs and ATM
operating software upgrades implemented during the fourth quarter of 2019. Also
included in net occupancy expense for the 2020 period are COVID-19-related
expenses for various items such as cleaning services, equipment, costs to set up
remote work sites and other items.



Insurance:  Insurance expense decreased $412,000 compared to the prior year
period. This decrease was primarily due to a decrease in FDIC deposit insurance
premiums.  The Bank had a credit with the FDIC for a portion of premiums
previously paid to the deposit insurance fund leaving no premium being due for
the three months ended March 31, 2020. The remaining credit mostly offset the
deposit insurance premium due during the three months ended June 30, 2020.



Advertising:  Advertising expense decreased $311,000 compared to the prior year
period. This decrease was primarily due to activities related to sponsorship
agreements being halted as a result of the COVID-19 pandemic.



Expense on other real estate owned and repossessions:  Expense on other real
estate owned and repossessions decreased $292,000 compared to the prior year
period primarily due to sales of other assets and higher valuation write-downs
of certain foreclosed assets during the prior year period. During the 2019
period, valuation write-downs of certain foreclosed assets totaled approximately
$444,000, while valuation write-downs in the 2020 period totaled approximately
$213,000.



The Company's efficiency ratio for the three months ended June 30, 2020, was
56.75% compared to 54.50% for the same period in 2019.  The efficiency ratio for
the six months ended June 30, 2020, was 57.84% compared to 54.62% for the same
period in 2019.  The higher efficiency ratio in the 2020 three and six month
periods were primarily due to an increase in non-interest expense. Despite this
increase in non-interest expense, the Company's ratio of non-interest expense to
average assets was 2.17% and 2.32% for the three and six months ended June 30,
2020, respectively, compared to 2.35% and 2.38% for the three and six months
ended June 30, 2019, respectively.  The decreases in the current three and six
month ratios were primarily due to an increase in average assets in the 2020
periods compared to the 2019 periods.  Average assets for the three months ended
June 30, 2020, increased $581.6 million, or 12.1%, from the three months ended
June 30, 2019, primarily due to increases in loans receivable, investment
securities and interest bearing cash balances at the Federal Reserve Bank.

Average assets for the six months ended June 30, 2020, increased $410.2 million, or 8.6%, from the six months ended June 30, 2019, primarily due to increases in loans receivable, investment securities and interest bearing cash balances at the Federal Reserve Bank.





Provision for Income Taxes



For the three months ended June 30, 2020 and 2019, the Company's effective tax
rate was 19.3% and 16.8%, respectively. For the six months ended June 30, 2020
and 2019, the Company's effective tax rate was 17.4% and 17.7%, respectively.
 These effective rates were lower than the statutory federal tax rate of 21%,
due primarily to the utilization of certain investment tax credits and to
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 and the level of tax-exempt investments and loans and the overall
level of pre-tax income.  The Company's effective income tax rate is currently
expected to remain below the statutory rate due primarily to the factors noted
above. The Company currently expects its effective tax rate (combined federal
and state) to be approximately 16.0% to 17.5% for the full year of 2020 and in
future years.

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                                       67

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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 $1.5 million and $1.0
million for the three months ended June 30, 2020 and 2019, respectively.  Net
fees included in interest income were $2.6 million and $2.1 million for the six
months ended June 30, 2020 and 2019, respectively.  Tax-exempt income was not
calculated on a tax equivalent basis. The table does not reflect any effect of
income taxes.

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                                       68

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                     June 30,             Three Months Ended                       Three Months Ended
                      2020(2)               June 30, 2020                             June 30, 2019
                      Yield/        Average                  Yield/        Average                    Yield/
                       Rate         Balance      Interest     Rate         Balance       Interest      Rate
                                                     (Dollars in Thousands)
Interest-earning
assets:
Loans receivable:
 One- to four-family

residential 3.84% $ 652,281 $ 7,432 4.58% $

515,749 $ 6,556 5.10%

Other residential 4.29 936,541 10,940 4.70

819,577 11,270 5.52


 Commercial real
estate                 4.23        1,533,078        17,390   4.56

1,414,009 18,304 5.19

Construction 4.34 636,914 7,612 4.81

713,885 10,585 5.95

Commercial business 3.72 340,872 3,361 3.97

259,779 3,358 5.18


 Other loans           5.32          293,432         3,891   5.33

403,584 5,450 5.42


 Industrial revenue
bonds(1)               4.44            9,757           222   9.16             14,940           248    6.67

Total loans
receivable             4.34        4,402,875        50,848   4.64          4,141,523        55,771    5.40

Investment
securities(1)          2.97          433,410         3,082   2.86            309,170         2,415    3.13
Other
interest-earning
assets                 0.24          321,414            81   0.10             88,024           537    2.45

Total
interest-earning
assets                 3.91        5,157,699        54,011   4.21          4,538,717        58,723    5.19
Non-interest-earning
assets:
 Cash and cash
equivalents                           97,468                                  92,500
 Other non-earning
assets                               148,031                                 190,416
Total assets                     $ 5,403,198                            $  4,821,633

Interest-bearing
liabilities:
Interest-bearing
demand
 and savings           0.34      $ 1,838,077         1,862   0.41       $  1,498,795         1,930    0.52
Time deposits          1.44        1,789,349         7,179   1.61          1,733,163         9,652    2.23
Total deposits         0.86        3,627,426         9,041   1.00          3,231,958        11,582    1.44
Short-term
borrowings,
 repurchase
agreements
 and other
interest-bearing
 liabilities           0.02          162,346            10   0.03            244,586           859    1.41

Subordinated

debentures


 issued to capital
trusts                 2.29           25,774           167   2.60             25,774           267    4.16
Subordinated notes     5.86           89,840         1,338   5.99

74,015 1,094 5.93

Total

interest-bearing


 liabilities           1.01        3,905,386        10,556   1.09          3,576,333        13,802    1.55
Non-interest-bearing
 liabilities:
 Demand deposits                     833,251                                 655,642
 Other liabilities                    39,824                                  34,504
Total liabilities                  4,778,461                               4,266,479
Stockholders' equity                 624,737                                 555,154
Total liabilities
and
 stockholders'
equity                           $ 5,403,198                            $  4,821,633

Net interest income:
 Interest rate
spread                 2.90%                     $  43,455   3.12%

$  44,921    3.64%
 Net interest
margin*                                                      3.39%                                    3.97%
Average
interest-earning
 assets to average
interest-
 bearing liabilities                  132.1%                                  126.9%

* Defined as the Company's net interest income divided by total average

interest-earning assets. (1) Of the total average balances of investment securities, average tax-exempt

investment securities were $64.0 million and $43.5 million for the three

months ended June 30, 2020 and 2019, respectively. In addition, average

tax-exempt loans and industrial revenue bonds were $20.0 million and $21.0

million for the three months ended June 30, 2020 and 2019, respectively.

Interest income on tax-exempt assets included in this table was $538,000 and

$614,000 for the three months ended June 30, 2020 and 2019, respectively.

Interest income net of disallowed interest expense related to tax-exempt

assets was $493,000 and $553,000 for the three months ended June 30, 2020 and


    2019, respectively.
(2) The yield on loans at June 30, 2020 does not include the impact of the

accretable yield (income) on loans acquired in the FDIC-assisted

transactions. See "Net Interest Income" for a discussion of the effect on

results of operations for the three months ended June 30, 2020.

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                     June 30,              Six Months Ended                         Six Months Ended
                      2020(2)               June 30, 2020                             June 30, 2019
                      Yield/        Average                  Yield/        Average                    Yield/
                       Rate         Balance      Interest     Rate         Balance       Interest      Rate
                                                     (Dollars in Thousands)
Interest-earning
assets:
Loans receivable:
 One- to four-family

residential 3.84% $ 628,076 $ 14,570 4.67% $

506,490 $ 12,944 5.15%

Other residential 4.29 881,486 21,696 4.95

815,354 22,260 5.51


 Commercial real
estate                 4.23        1,511,434        35,970   4.79

1,400,789 36,000 5.18

Construction 4.34 673,444 17,335 5.18

690,883 20,758 6.06

Commercial business 3.72 305,016 6,552 4.32

261,967 6,750 5.20


 Other loans           5.32          305,435         8,424   5.55

420,190 11,154 5.35


 Industrial revenue
bonds(1)               4.44           10,015           431   8.65             15,072           461    6.17

Total loans
receivable             4.34        4,314,906       104,978   4.89          4,110,745       110,327    5.41

Investment
securities(1)          2.97          409,206         6,165   3.03            293,937         4,666    3.20
Other
interest-earning
assets                 0.24          205,768           342   0.33

91,182 1,088 2.41

Total

interest-earning


assets                 3.91        4,929,880       111,485   4.55          4,495,864       116,081    5.21
Non-interest-earning
assets:
 Cash and cash
equivalents                           94,124                                  91,657
 Other non-earning
assets                               159,353                                 185,672
Total assets                     $ 5,183,357                             $ 4,773,193

Interest-bearing
liabilities:
Interest-bearing
demand
 and savings           0.34      $ 1,706,794         3,979   0.47        $ 1,485,948         3,693    0.50
Time deposits          1.44        1,751,125        15,639   1.80          1,703,087        18,359    2.17
Total deposits         0.86        3,457,919        19,618   1.14          3,189,035        22,052    1.39
Short-term
borrowings,
 repurchase
agreements
 and other
interest-bearing
 liabilities           0.02          213,700           659   0.62            251,347         1,780    1.43
Subordinated
debentures
 issued to capital
trusts                 2.29           25,774           383   2.99             25,774           534    4.18
Subordinated notes     5.86           82,087         2,432   5.96

73,958 2,189 5.97

Total

interest-bearing


 liabilities           1.01        3,779,480        23,092   1.23          3,540,114        26,555    1.52
Non-interest-bearing
 liabilities:
 Demand deposits                     754,618                                 657,018
 Other liabilities                    37,385                                  30,011
Total liabilities                  4,571,483                               4,227,143
Stockholders' equity                 611,874                                 546,050
Total liabilities
and
 stockholders'
equity                           $ 5,183,357                             $ 4,773,193

Net interest income:
 Interest rate
spread                 2.90%                     $  88,393   3.32%

$  89,526    3.69%
 Net interest
margin*                                                      3.61%                                    4.02%
Average
interest-earning
 assets to average
interest-
 bearing liabilities                  130.4%                                  127.0%

* Defined as the Company's net interest income divided by total average

interest-earning assets. (1) Of the total average balances of investment securities, average tax-exempt

investment securities were $48.3 million and $45.7 million for the six months

ended June 30, 2020 and 2019, respectively. In addition, average tax-exempt

loans and industrial revenue bonds were $20.7 million and $21.4 million for

the six months ended June 30, 2020 and 2019, respectively. Interest income on

tax-exempt assets included in this table was $1.1 million and $1.2 million

for the six months ended June 30, 2020 and 2019, respectively. Interest

income net of disallowed interest expense related to tax-exempt assets was

$971,000 and $1.1 million for the six months ended June 30, 2020 and 2019,

respectively.

(2) The yield on loans at June 30, 2020 does not include the impact of the

accretable yield (income) on loans acquired in the FDIC-assisted

transactions. See "Net Interest Income" for a discussion of the effect on

results of operations for the six months ended June 30, 2020.

--------------------------------------------------------------------------------

Rate/Volume Analysis





The following tables present the dollar amounts 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.



                                                     Three Months Ended June 30,
                                                            2020 vs. 2019
                                                  Increase (Decrease)         Total
                                                         Due to              Increase
                                                   Rate          Volume     (Decrease)
                                                        (Dollars in Thousands)
Interest-earning assets:
Loans receivable                               $   (8,233)       3,310    $    (4,923)
Investment securities                                (226)         893            667
Other interest-earning assets                        (875)         419

(456)


Total interest-earning assets                      (9,334)       4,622

(4,712)


Interest-bearing liabilities:
Demand deposits                                      (453)         385            (68)
Time deposits                                      (2,773)         300         (2,473)
Total deposits                                     (3,226)         685         (2,541)
Short-term borrowings                                (632)        (217)          (849)
Subordinated debentures issued to capital
trust                                                (100)           -

(100)


Subordinated notes                                     11          233

244


Total interest-bearing liabilities                 (3,947)         701         (3,246)
Net interest income                            $   (5,387)       3,921    $    (1,466)




                                                      Six Months Ended June 30,
                                                            2020 vs. 2019
                                                  Increase (Decrease)         Total
                                                         Due to              Increase
                                                    Rate         Volume     (Decrease)
                                                        (Dollars in Thousands)
Interest-earning assets:
Loans receivable                               $   (10,768)    $ 5,419    $    (5,349)
Investment securities                                 (261)      1,760          1,499
Other interest-earning assets                       (1,418)        672

(746)


Total interest-earning assets                      (12,447)      7,851

(4,596)


Interest-bearing liabilities:
Demand deposits                                       (247)        533            286
Time deposits                                       (3,234)        514         (2,720)
Total deposits                                      (3,481)      1,047         (2,434)
Short-term borrowings                                 (886)       (235)        (1,121)
Subordinated debentures issued to capital
trust                                                 (151)          -

(151)


Subordinated notes                                      (4)        247

243


Total interest-bearing liabilities                  (4,522)      1,059         (3,463)
Net interest income                            $    (7,925)    $ 6,792    $    (1,133)




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

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                                       71

--------------------------------------------------------------------------------


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 June 30, 2020,
the Company had commitments of approximately $186.7 million to fund loan
originations, $1.12 billion of unused lines of credit and unadvanced loans, and
$16.6 million of outstanding letters of credit.



Loan commitments and the unfunded portion of loans at the dates indicated were
as follows (in thousands):



                                 June 30,      March 31,     December 31,     December 31,     December 31,
                                   2020          2020            2019             2018             2017
Closed non-construction loans
with unused
available lines
 Secured by real estate (one-
to four-family)                $   158,687   $   156,381   $      155,831

$ 150,948 $ 133,587


 Secured by real estate (not
one- to four-family)                16,124        16,832           19,512           11,063           10,836
 Not secured by real estate -
commercial business                105,071        79,117           83,782

87,480 113,317



Closed construction loans with
unused

available lines


 Secured by real estate
(one-to four-family)                37,789        50,101           48,213           37,162           20,919
 Secured by real estate (not
one-to four-family)                753,589       809,436          798,810

906,006 718,277

Loan Commitments not closed


 Secured by real estate
(one-to four-family)               112,769       141,432           69,295           24,253           23,340
 Secured by real estate (not
one-to four-family)                 73,103        95,652           92,434

104,871 156,658


 Not secured by real estate -
commercial business                    800             -                -              405            4,870

                               $ 1,257,932   $ 1,348,951   $    1,267,877   $    1,322,188   $    1,181,804




The Company's primary sources of funds are customer deposits, FHLBank advances,
other borrowings, loan repayments, unpledged securities, proceeds from sales of
loans and available-for-sale securities and funds provided from operations. The
Company utilizes particular sources of funds based on the comparative costs and
availability at the time. The Company has from time to time chosen not to pay
rates on deposits as high as the rates paid by certain of its competitors and,
when believed to be appropriate, supplements deposits with less expensive
alternative sources of funds.

At June 30, 2020, the Company had these available secured lines and on-balance sheet liquidity:





Federal Home Loan Bank line $  1,135.6 million
Federal Reserve Bank line    $   426.9 million
Cash and cash equivalents    $   473.6 million
Unpledged securities         $   219.5 million




Statements of Cash Flows. During both the six months ended June 30, 2020 and
2019, the Company had positive cash flows from operating activities, negative
cash flows from investing activities and positive cash flows from financing
activities.



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 loan losses,
depreciation and amortization, realized gains on sales of loans 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 source of
cash flows from operating activities. Operating activities provided cash flows
of $35.4 million and $39.2 million during the six months ended June 30, 2020 and
2019, respectively.



During the six months ended June 30, 2020, investing activities used cash of
$259.5 million, primarily due to the net origination of loans, the purchase of
investment securities and the purchase of equipment, partially offset by cash
proceeds from the termination of interest rate derivatives, the sale of other
real estate owned and payments received on investment securities. Investing
activities in the 2019 period used cash of $180.3 million, primarily due to the

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purchase of loans and the net origination of loans, the purchase of investment
securities and the purchase of equipment, partially offset by the sale of other
real estate owned, the sale of investment securities and payments received on
investment securities.



Changes in cash flows from financing activities during the periods covered by
the Statements of Cash Flows are due to changes in deposits after interest
credited, changes in FHLBank advances and changes in short-term borrowings, as
well as advances from borrowers for taxes and insurance, dividend payments to
stockholders, purchases of the Company's common stock and the exercise of common
stock options.  Financing activities provided cash of $477.6 million and $119.7
million during the six months ended June 30, 2020 and 2019, respectively.  In
the 2020 six-month period, financing activities provided cash primarily as a
result of net increases in checking account balances, partially offset by
decreases in short-term borrowings, dividends paid to stockholders and the
purchase of the Company's common stock. Also in the 2020 period, cash was
provided by the issuance of subordinated notes. In the 2019 six-month period,
financing activities provided cash primarily as a result of net increases in
checking account balances and certificates of deposit, partially offset by
decreases in short-term borrowings and dividends paid to stockholders.



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.



At June 30, 2020, the Company's total stockholders' equity and common
stockholders' equity were each $626.7 million, or 11.3% of total assets,
equivalent to a book value of $44.50 per common share. As of December 31, 2019,
total stockholders' equity and common stockholders' equity were each $603.1
million, or 12.0% of total assets, equivalent to a book value of $42.29 per
common share.  At June 30, 2020, the Company's tangible common equity to
tangible assets ratio was 11.1%, compared to 11.9% at December 31, 2019 (See
Non-GAAP Financial Measures below).



Included in stockholders' equity at June 30, 2020 and December 31, 2019, were
unrealized gains (net of taxes) on the Company's available-for-sale investment
securities totaling $26.0 million and $9.0 million, respectively.  This increase
in unrealized gains primarily resulted from lower market interest rates which
increased the fair value of the investment securities.



Also included in stockholders' equity at June 30, 2020, were realized gains (net
of taxes) on the Company's cash flow hedge (interest rate swap), which was
terminated in March 2020, totaling $33.1 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 June 30, 2020, the remaining pre-tax amount to be recorded in interest
income was $42.8 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).



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
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 June 30, 2020, 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 14.2% and
its Tier 1 leverage ratio was 11.5%. As a result, as of June 30, 2020, the Bank
was well capitalized, with capital ratios in excess of those required to qualify
as such.  On December 31, 2019, 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 14.0%
and its Tier 1 leverage ratio was 12.3%. As a result, as of December 31, 2019,
the Bank was well capitalized, with capital ratios in excess of those required
to qualify as such.

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                                       73

--------------------------------------------------------------------------------


The FRB has established capital regulations for bank holding companies that
generally parallel the capital regulations for banks. On June 30, 2020, the
Company's common equity Tier 1 capital ratio was 12.5%, its Tier 1 capital ratio
was 13.0%, its total capital ratio was 17.2% and its Tier 1 leverage ratio was
11.4%. To be considered well capitalized, a bank holding company must have a
Tier 1 risk-based capital ratio of at least 6.00% and a total risk-based capital
ratio of at least 10.00%.  As of June 30, 2020, the Company was considered well
capitalized, with capital ratios in excess of those required to qualify as
such.  On December 31, 2019, the Company's common equity Tier 1 capital ratio
was 12.0%, its Tier 1 capital ratio was 12.5%, its total capital ratio was 15.0%
and its Tier 1 leverage ratio was 11.8%.  As of December 31, 2019, the Company
was considered well capitalized, with capital ratios in excess of those required
to qualify as such.



In June 2020, the Company further enhanced its regulatory capital position with
the issuance of $75.0 million of 5.50% fixed-to-floating rate subordinated notes
due June 15, 2030, which count as Tier 2 Capital in the calculation of the Total
Capital Ratio.  The notes will accrue interest at the fixed rate of 5.50% to but
excluding June 15, 2025. From and including June 15, 2025 to but excluding the
maturity date of June 15, 2030, if not redeemed by the Company, the notes will
accrue interest at a floating rate.



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.



For additional information, see "Item 1. Business--Government Supervision and
Regulation-Capital" in the Company's Annual Report on Form 10-K for the year
ended December 31, 2019.



Dividends. During the three months ended June 30, 2020, the Company declared
common stock cash dividends of $0.34 per share, or 37% of net income per diluted
common share for that three month period, and paid common stock cash dividends
of $0.34 per share (which was declared in March 2020).  During the three months
ended June 30, 2019, the Company declared a common stock cash dividend of $0.32
per share, or 25% of net income per diluted common share for that three month
period, and paid a common stock cash dividend of $0.32 per share (which was
declared in March 2019).  During the six months ended June 30, 2020, the Company
declared common stock cash dividends of $1.68 per share, or 85% of net income
per diluted common share for that six month period, and paid common stock cash
dividends of $1.68 per share ($0.34 of which was declared in December 2019). The
total dividends declared during the six months ended June 30, 2020, consisted of
regular cash dividends of $0.68 per share and a special cash dividend of $1.00
per share.  During the six months ended June 30, 2019, the Company declared
common stock cash dividends of $1.39 per share, or 55% of net income per diluted
common share for that six month period, and paid a common stock cash dividend of
$1.39 per share. The total dividends declared during the six months ended June
30, 2019, consisted of regular cash dividends of $0.64 per share and a special
cash dividend of $0.75 per share. The Board of Directors meets regularly to
consider the level and the timing of dividend payments.  The $0.34 per share
dividend declared but unpaid as of June 30, 2020, was paid to stockholders in
July 2020.



Common Stock Repurchases and Issuances. The Company has been in various buy-back
programs since May 1990. During the three months ended June 30, 2020, the
Company issued 600 shares of stock at an average price of $23.19 per share to
cover stock option exercises and did not repurchase any shares of its common
stock. During the three months ended June 30, 2019, the Company issued 30,858
shares of stock at an average price of $28.50 per share to cover stock option
exercises and did not repurchase any shares of its common stock. During the six
months ended June 30, 2020, the Company issued 7,075 shares of stock at an
average price of $36.36 per share to cover stock option exercises and
repurchased 183,707 shares of its common stock at an average price of $44.36 per
share.  During the six months ended June 30, 2019, the Company issued 66,458
shares of stock at an average price of $29.06 per share to cover stock option
exercises and repurchased 16,040 shares of its common stock at an average price
of $52.93 per share.



On April 18, 2018, the Company's Board of Directors authorized management to
repurchase up to 500,000 shares of the Company's outstanding common stock, under
a program of open market purchases or privately negotiated transactions. The
program does not have an expiration date.  Management has historically utilized
stock buy-back programs from time to time as long as management believed that
repurchasing the stock would contribute to the

--------------------------------------------------------------------------------


                                       74

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overall growth of shareholder value. The number of shares of stock that will be
repurchased at any particular time and the prices that will be paid are subject
to many factors, several of which are outside of the control of the Company. The
primary factors, however, are the number of shares available in the market from
sellers at any given time, the price of the stock within the market as
determined by the market and the projected impact on the Company's earnings per
share and capital. As of June 30, 2020, there were 282,771 shares still
available to be repurchased under the program.



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
States ("GAAP"), consisting of the tangible common equity to tangible assets
ratio.

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.



This non-GAAP financial measure is supplemental and is 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 similarly titled measures as calculated by other companies.



Non-GAAP Reconciliation:  Ratio of Tangible Common Equity to Tangible Assets



                                                      June 30,        December 31,
                                                        2020              2019
                                                         (Dollars in Thousands)

Common equity at period end                         $   626,728     $      603,066
Less:  Intangible assets at period end                    7,521

8,098


Tangible common equity at period end (a)            $   619,207     $

594,968



Total assets at period end                          $ 5,566,650     $

5,015,072


Less:  Intangible assets at period end                    7,521

8,098


Tangible assets at period end (b)                   $ 5,559,129     $

5,006,974

Tangible common equity to tangible assets (a) / (b) 11.14 %

11.88 %

--------------------------------------------------------------------------------

Latest news about Great Southern Bancorp, Inc.

Transcript : Great Southern Bancorp, Inc., Q1 2024 Earnings Call, Apr 18, 2024	Apr. 18
Tranche Update on Great Southern Bancorp, Inc.'s Equity Buyback Plan announced on December 21, 2022.	Apr. 18	CI
Earnings Flash (GSBC) GREAT SOUTHERN BANCORP Reports Q1 EPS $1.13, vs. Street Est of $1.04	Apr. 17	MT
Great Southern Bancorp, Inc. Reports Net Charge-Offs for the First Quarter Ended March 31, 2024	Apr. 17	CI
Great Southern Bancorp, Inc. Reports Earnings Results for the First Quarter Ended March 31, 2024	Apr. 17	CI
North American Morning Briefing : Stock Futures -2-	Apr. 17	DJ
Constantinople Operating Company Pty Ltd announced that it has received AUD 50 million in funding from Prosus Ventures N.V., Square Peg Capital Pty. Ltd., AirTree Ventures Pty Ltd, Great Southern Bancorp, Inc.	Apr. 01	CI
Great Southern Bancorp Keeps Quarterly Dividend at $0.40 a Share, Payable April 16 to Shareholders as of April 2	Mar. 20	MT
Great Southern Bancorp, Inc. Announces Dividend for the First Quarter of the Calendar Year Ending December 31, 2024, Payable on April 16, 2024	Mar. 20	CI
Keefe Bruyette & Woods Adjusts Great Southern Bancorp's Price Target to $58 From $59, Keeps Market Perform Rating	Jan. 25	MT
Piper Sandler Trims Price Target on Great Southern Bancorp to $57 From $58, Maintains Neutral Rating	Jan. 24	MT
Transcript : Great Southern Bancorp, Inc., Q4 2023 Earnings Call, Jan 23, 2024	Jan. 23
Great Southern Bancorp, Inc. Reports Earnings Results for the Fourth Quarter and Full Year Ended December 31, 2023	Jan. 22	CI
North American Morning Briefing : S&P 500 Seen Extending Record	Jan. 22	DJ
Tranche Update on Great Southern Bancorp, Inc.'s Equity Buyback Plan announced on December 21, 2022.	Jan. 21	CI
Great Southern Bancorp, Inc. Announces the Appointment of Amelia Counts to Boards of Directors, Effective January 1, 2024	Dec. 21	CI
Great Southern Bancorp Maintains Quarterly Dividend at $0.40 a Share, Payable on Jan. 17 to Shareholders as of Jan. 2	Dec. 20	MT
Great Southern Bancorp, Inc. Announces Quarterly Dividend, Payable on January 17, 2024	Dec. 20	CI
Great Southern Bancorp, Inc. Announces Demise of Larry D. Frazier, Member of the Board of Directors	Nov. 24	CI
Transcript : Great Southern Bancorp, Inc., Q3 2023 Earnings Call, Oct 19, 2023	23-10-19
Tranche Update on Great Southern Bancorp, Inc.'s Equity Buyback Plan announced on December 21, 2022.	23-10-19	CI
Earnings Flash (GSBC) GREAT SOUTHERN BANCORP Reports Q3 EPS $1.33, vs. Street Est of $1.21	23-10-18	MT
Great Southern Bancorp, Inc. Reports Earnings Results for the Third Quarter and Nine Months Ended September 30, 2023	23-10-18	CI
North American Morning Briefing : Geopolitical -2-	23-10-18	DJ
Great Southern Bancorp Retains Quarterly Dividend of $0.40/Share, Payable Oct. 17 to Stockholders of Record Oct. 2	23-09-20	MT

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Company Profile

Great Southern Bancorp, Inc. is a bank holding company of Great Southern Bank (the Bank). The Company conducts its business as a financial holding company. Through the Bank and subsidiaries of the Bank, the Company primarily offers a variety of banking and banking-related services. The Bank offers a range of banking services through its 89 banking centers located in southern and central Missouri; the Kansas City, Missouri area; the St. Louis area; eastern Kansas; northwestern Arkansas; the Minneapolis area and eastern, western and central Iowa. The Company operates through a single segment, banking operation. The banking operation segment 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.

Sector

Banks

Calendar

2024-05-08 - Annual General Meeting

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Russell 2000

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Income Statement Evolution

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Ratings for Great Southern Bancorp, Inc.

Trading Rating

Investor Rating

ESG Refinitiv

C-

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Analysts' Consensus

Sell

Buy

Mean consensus

HOLD

Number of Analysts

Last Close Price

53.66 USD

Average target price

55 USD

Spread / Average Target

+2.50%

Consensus

EPS Revisions

Estimates Revisions

Quarterly earnings - Rate of surprise

Company calendar

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Great Southern Bancorp, Inc.

Equities

GSBC

US3909051076

Banks

GREAT SOUTHERN BANCORP : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)

EPS Revisions