Great Southern Bancorp, Inc.: Form 10-Q for the period ended Mar 31, 2026

Forward-looking Statements

When used in this Quarterly Report on Form 10-Q and in other documents filed or furnished by Great Southern Bancorp, Inc. (the “Company”) with or to the Securities and Exchange Commission (the “SEC”), in the Company’s press releases or other public or stockholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases “may,” “might,” “could,” “should,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “believe,” “estimate,” “project,” “intends” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements also include, but are not limited to, statements regarding plans, objectives, expectations or consequences of announced transactions, known trends and statements about future performance, operations, products and services of the Company. The Company’s ability to predict results or the actual effects of future plans or strategies is inherently uncertain, and the Company’s actual results could differ materially from those contained in the forward-looking statements.

Factors that could cause or contribute to such differences include, but are not limited to: (i) expected revenues, cost savings, earnings accretion, synergies and other benefits from the Company’s merger and acquisition activities might not be realized within the anticipated time frames or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected; (ii) changes in economic conditions, either nationally or in the Company’s market areas; (iii) the effects of any new or continuing public health issues on general economic and financial market conditions; (iv) fluctuations in interest rates, the effects of inflation or a potential recession, whether caused by Federal Reserve actions or otherwise; (v) the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; (vi) slower or negative economic growth caused by tariffs, changes in energy prices, supply chain disruptions or other factors; (vii) the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; (viii) the possibility of realized or unrealized losses on securities held in the Company’s investment portfolio; (ix) the Company’s ability to access cost-effective funding and maintain sufficient liquidity; (x) fluctuations in real estate values and both residential and commercial real estate market conditions; (xi) the ability to adapt successfully to technological changes to meet customers’ needs and developments in the marketplace; (xii) the possibility that security measures implemented might not be sufficient to mitigate the risk of a cyber-attack or cyber theft, and that such security measures might not protect against systems failures or interruptions; (xiii) legislative or regulatory changes that adversely affect the Company’s business; (xiv) changes in accounting policies and practices or accounting standards; (xv) results of examinations of the Company and the Bank by their regulators, including the possibility that the regulators may, among other things, require the Company to limit its business activities, change its business mix, increase its allowance for credit losses, write-down assets or increase its capital levels, or affect its ability to borrow funds or maintain or increase deposits, which could adversely affect its liquidity and earnings; (xvi) costs and effects of litigation, including settlements and judgments; (xvii) competition; and (xviii) natural disasters, war, terrorist activities or civil unrest and their effects on economic and business environments in which the Company operates. The Company wishes to advise readers that the factors listed above and other risks described in the Company’s most recent Annual Report on Form 10-K, including, without limitation, those described under “Item 1A. Risk Factors,” subsequent Quarterly Reports on Form 10-Q and other documents filed or furnished from time to time by the Company with the SEC (which are available on our website at www.greatsouthernbank.com (http://www.greatsouthernbank.com) and the SEC’s website at www.sec.gov (http://www.sec.gov)), could affect the Company’s financial performance and cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.

The Company does not undertake-and specifically declines any obligation- to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Critical Accounting Policies, Judgments and Estimates

The accounting and financial reporting policies of the Company conform to accounting principles generally accepted in the United States and general practices within the financial services industry. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates.

Allowance for Credit Losses and Valuation of Foreclosed Assets

The Company believes that the determination of the allowance for credit losses involves a higher degree of judgment and complexity than its other significant accounting policies. The allowance for credit losses is calculated with the objective of maintaining an allowance level believed by management to be sufficient to absorb estimated credit losses. The allowance for credit losses is measured using an average historical loss model that incorporates relevant information about past events (including historical credit loss experience on loans with similar risk characteristics), current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the loans. The allowance for credit losses is measured on a collective (pool) basis. Loans are aggregated into pools based on similar risk characteristics, including borrower type, collateral and repayment types and expected credit loss patterns. Loans that do not share similar risk characteristics, primarily classified loans with a balance of $100,000 or more, are evaluated on an individual basis.

For loans evaluated for credit losses on a collective basis, average historical loss rates are calculated for each pool using the Company’s historical net charge-offs (combined charge-offs and recoveries by observable historical reporting period) and outstanding loan balances during a lookback period. Lookback periods can be different based on the individual pool and represent management’s credit expectations for the pool of loans over the remaining contractual life. In certain loan pools, if the Company’s own historical loss rate is not reflective of the loss expectations, the historical loss rate is augmented by industry and peer data. The calculated average net charge-off rate is then adjusted for current conditions and reasonable and supportable forecasts. These adjustments increase or decrease the average historical loss rate to reflect expectations of future losses given economic forecasts of key macroeconomic variables including, but not limited to, unemployment rate, GDP, commercial real estate price index, consumer sentiment and construction spending. The adjustments are based on results from various regression models projecting the impact of the macroeconomic variables to loss rates. The forecast is used for a reasonable and supportable period before reverting to historical averages using a straight-line method. The forecast-adjusted loss rate is applied to the principal balance over the remaining contractual lives, adjusted for expected prepayments. The contractual term excludes expected extensions, renewals and modifications. Additionally, the allowance for credit losses considers other qualitative factors not included in historical loss rates or macroeconomic forecasts such as changes in portfolio composition, underwriting practices, or significant unique events or conditions.

See *Note 6 “*Loans and Allowance for Credit Losses” in the Notes to Consolidated Financial Statements included in this report for additional information regarding the allowance for credit losses. Inherent in this process is the evaluation and risk assessment of individual credit relationships. From time to time, certain credit relationships may deteriorate due to changes in payment performance, cash flow of the borrower, value of collateral, or other factors. Due to these changing circumstances, management may revise its loss estimates and assumptions for these specific credits. In some cases, losses may be realized; in other instances, the factors that led to the deterioration may improve or the credit may be refinanced elsewhere and allocated allowances may be released from the particular credit.

In addition, the Company considers that the determination of the valuation 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 sale 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 sale of the assets could differ materially from the carrying value reflected in the financial statements, resulting in gains or losses that could materially impact earnings in future periods.

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 March 31, 2026, the Company had one reporting unit to which goodwill has been allocated – the Bank. If the fair value of a reporting unit exceeds its carrying value, then no impairment is recorded. If the carrying value exceeds the fair value of a reporting unit, further testing is completed comparing the implied fair value of the reporting unit’s goodwill to its carrying value to measure the amount of impairment. Intangible assets that are not amortized are tested for impairment at least annually by comparing the fair values of those assets to their carrying values. At March 31, 2026, goodwill consisted of $5.4 million at the Bank reporting unit, which included goodwill of $4.2 million that was recorded during 2016 related to the acquisition of 12 branches and the assumption of related deposits in the St. Louis market. Other identifiable deposit intangible assets that were subject to amortization were amortized on a straight-line basis over a period of seven years and have been fully amortized.

In April 2022, the Company, through its subsidiary Great Southern Bank, entered into a naming rights agreement with Missouri State University related to the main arena on its campus in Springfield, Missouri. The terms of the agreement provide the naming rights to Great Southern Bank for a total cost of $5.5 million, to be paid over a period of seven years. The Company has been amortizing the naming rights intangible assets through non-interest expense over a period not to exceed 15 years.

At March 31, 2026, the amortizable intangible assets included the arena naming rights of $4.2 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. During both the three months ended March 31, 2026 and the three months ended March 31, 2025, the amortization expense of the arena naming rights was $108,000.

For purposes of testing goodwill for impairment, the Company uses a market approach to value its reporting unit. The market approach applies a market multiple, based on observed purchase transactions for each reporting unit, to the metrics appropriate for the valuation of the operating unit. Significant judgment is applied when goodwill is assessed for impairment. This judgment may include developing cash flow projections, selecting appropriate discount rates, identifying relevant market comparables and incorporating general economic and market conditions.

Management does not believe any of the Company’s goodwill or other intangible assets were impaired as of March 31, 2026. While management believes no impairment existed as of March 31, 2026, different conditions or assumptions used to measure fair value of the reporting unit, or changes in cash flows or profitability, if significantly negative or unfavorable, could have a material adverse effect on the outcome of the Company’s impairment evaluation in the future.

A summary of goodwill and intangible assets as of the dates indicated is as follows:

(In Thousands)

Current Economic Conditions

Changes in economic conditions could cause the values of assets and liabilities recorded in the Company’s financial statements to fluctuate rapidly, resulting in material future adjustments to asset values, the allowance for credit losses, or capital that could negatively affect the Company’s ability to meet regulatory capital requirements and maintain sufficient liquidity. Following the housing and mortgage crisis and correction beginning in mid-2007, the United States entered an economic downturn. Unemployment rose from 4.7% in November 2007 to peak at 10.0% in October 2009. Economic conditions improved in the subsequent years, as indicated by higher consumer confidence levels, increased economic activity and low unemployment levels. The U.S. economy continued to operate at historically strong levels until the COVID-19 pandemic in March 2020, which severely affected tourism, labor markets, business travel, immigration, and the global supply chain, among other areas. The economy plunged into recession in the first quarter of 2020, as efforts to contain the spread of the coronavirus forced all but essential business activity, or any work that could not be done from home, to stop, shuttering factories, restaurants, entertainment, sporting events, retail shops, personal services, and more.

More than 22 million jobs were lost in March and April 2020 as businesses closed their doors or reduced their operations, sending employees home on furlough or layoffs. With uncertain incomes and limited buying opportunities, consumer spending plummeted. As a result, gross domestic product (GDP), the broadest measure of the nation’s economic output, plunged. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), a fiscal relief bill passed by Congress and signed by the President in March 2020, injected approximately $3 trillion into the economy through direct payments to individuals and loans to small businesses intended to help keep employees on their payroll, fueling a historic bounce-back in economic activity.

Total fiscal support to the economy throughout the pandemic, including the CARES Act, the American Rescue Plan of March 2021, and several smaller fiscal packages, totaled well over $5 trillion. The amount of this support was equal to almost 25% of pre-pandemic 2019 GDP and approximately three times the level of support provided during the global financial crisis of 2007-2008. Additionally, the Federal Reserve acted decisively by slashing its benchmark interest rate to near zero and ensuring credit availability to businesses, households, and municipal governments. The Federal Reserve’s efforts largely insulated the financial system from the problems in the economy, a significant difference from the financial crisis of 2007-2008. Purchases of Treasury and agency mortgage-backed securities totaling $120 billion each month by the Federal Reserve commenced shortly after the pandemic began. In November 2021, the Federal Reserve began to taper its quantitative easing (QE), winding down its bond purchases with its final open market purchase conducted on March 9, 2022. The federal government deficit was $2.8 trillion in fiscal 2021, close to $1.4 trillion in fiscal 2022, and $1.7 trillion in fiscal 2023. The Federal Reserve aggressively raised the federal funds interest rates from early 2022 through mid - 2023, pushing the federal funds rate to more than 5.50%, its highest level in 22 years. The Federal Reserve’s actions were motivated by surging inflation in 2021 caused by pandemic-fueled spending, which outpaced the ability of producers to supply goods and services after having been impacted by COVID-related shutdowns and clogged transportation systems. The Federal Reserve made some headway in its attempt to force inflation down. The federal funds rate range was between 5.25% to 5.50% until mid-September 2024. The target range decreased in December 2025 to 3.50%-3.75%, which carried over to the first quarter of 2026.

The personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred measure of inflation, eased from its peak of 7.1% in June 2022 to 2.9% in December 2023. At March 31, 2026, Core PCE, which excludes food and energy prices, rose 3.2% from one year ago; the Federal Reserve’s target is 2%.

Based on Moody’s U.S. Baseline Outlook and Alternative Scenarios Analysis dated April 2026, real GDP grew in the fourth quarter of 2025 by 0.7% annualized. The new April outlook on GDP growth for 2026 and 2027 is 2.3% and 1.7%, respectively, which is a decrease for 2026 from January’s projection of 2.6% and an increase for 2027, which was 1.5%.

Employment

The national unemployment rate decreased slightly to 4.3% for March 2026 compared to February 2026 at 4.4%. The number of unemployed individuals was 7.2 million as of March 2026. Healthcare, construction, social assistance, transportation and warehousing contributed 137,000 of the total job gains in March 2026.

As of March 2026, the labor force participation rate (the share of working-age Americans employed or actively looking for a job) remained stable at 61.9%. The unemployment rate for the Midwest, where the Company conducts most of its business, increased from 4.2% for February 2026 to a preliminary 4.6% for March 2026. Unemployment rates for March 2026 in the states where the Company has a branch or a loan production office were Arizona at 4.7%, Arkansas at 4.7%, Colorado at 3.9%, Georgia at 3.5%, Illinois at 5.1%, Iowa at 3.3%, Kansas at 3.9%, Minnesota at 4.5%, Missouri at 3.9%, Nebraska at 3.1%, North Carolina at 3.7%, and Texas at 4.3%. These rates are relatively unchanged for a majority of the states compared to February 2026.

Single Family Housing

Existing-home sales decreased 3.6% in March 2026, compared to February 2026, to a seasonally adjusted annual rate of 3.98 million; year-over-year existing home sales decreased 1.0%. In the Midwest, existing-home sales slowed by 4.2% in March 2026 to an annual rate of $920,000, down 3.2% from one year earlier.

The median existing-home sales price rose 1.4% from March 2025 to $408,800 in March 2026. The median price in the Midwest was $315,500, up 4.9% from March 2025. The South region reported a median price increase when compared to the prior year of 0.8% and the West region reported a median price decrease when compared to the prior year of 1.3%.

Total housing inventory registered at the end of March 2026 was 1.36 million units, up 3.0% from February 2026 and up 2.3% from one year ago. Unsold inventory sat at a 4.1-month supply at the end of March 2026, up from 3.8 months at the end of February 2026 and up from 4.0 months at the end of March 2025.

New home construction dropped precipitously after the financial crisis of 2007-2008 and has yet to fully recover. Issues contributing to the country’s current housing shortage include increasing labor and materials costs, availability of building materials, increased interest rates and tighter lending underwriting standards. Single-family housing starts in March 2026 were at an annual rate of 1,032,000, 9.7% above the revised figure for February 2026 of 941,000.

Sales of new single‐family houses in March 2026 were at a seasonally adjusted annual rate of 682,000 according to the U.S. Census Bureau and the Department of Housing and Urban Development. This was 7.4% above the February 2026 rate of 635,000 and 3.3% above the March 2025 rate of 660,000.

The median sales price of new houses sold in March 2026 was $387,400, 5.3% below the median price of $409,000 in February 2026. The seasonally adjusted estimate of new houses for sale at the end of March 2026 represented a supply of 8.5 months at the current sales rate.

According to Freddie Mac, the average commitment rate for a 30-year, fixed-rate mortgage was 6.30% as of April 21, 2026, down from 6.83% one year ago.

Other Residential (Multi-Family) Housing and Commercial Real Estate

According to CoStar, the U.S. apartment market’s supply-demand is ready for a rebalancing. Net deliveries are projected to marginally exceed absorption later in 2026, resulting in vacancy leveling out across the year. Vacancy rates decreased among quality segments, to 10.9% for 4- and 5-star buildings as absorption outpaced deliveries in this segment. However, 3 Star buildings reported an increase in vacancy to 8.3%, compared to 6.3% for 1- and 2-Star buildings. Absorption in upcoming quarters is expected to be offset by deliveries and lingering supply overhang from prior years. While overall vacancy is expected to plateau in 2026, stabilized vacancy is forecast to inch upward through the second quarter of 2027, reflecting ongoing efforts to absorb the supply overhang built up over the past two years. This separation, with stable overall vacancy alongside continually elevated stabilized vacancy, suggests rent growth improvement may be gradual, with its pace tempered by softness in stabilized communities.

Per CoStar, developers pushed supply to a 40-year high in 2024, with annual net deliveries peaking above 690,000 units in the fourth quarter of that year. Annual supply fell by 24% by year-end 2025, to approximately 529,000 units, and is projected to decline by more than 36% in 2026 to approximately 333,000 units, the lowest level since 2014. The effect of the slowdown is uneven across the nation. Phoenix, Denver, and Austin are forecasting significant delivery/supply cuts. Under-construction volumes also fell sharply in the fourth quarter of 2025, including declines of nearly 1,700 units in Phoenix, and notable reductions in Austin. Conversely, 11 of the 50 largest markets are projected to post year-over-year increases in deliveries in 2025 when these numbers are released, with Los Angeles, Boston, Columbus, and San Diego expected to be among the markets with rising supply. Miami and Charlotte lead nationally, with more than 8% of existing inventory under construction as of December 31, 2025, the highest ratios in the country per CoStar.

Sale transaction activity rose 31% in the first quarter of 2026 based on the trailing four-quarters. This rebound reflects a convergence of easing credit conditions, improved liquidity, and investor expectations after three Federal Reserve rate cuts in 2025. Private investors accounted for more than half of acquisitions in 2025, while institutional managers represented roughly one-quarter. This mixture of buyers illustrates a market where private capital is abundant and the most likely to execute value-add and opportunistic strategies, while institutional funding remains selective, favoring cash-flowing strategies in supply constrained submarkets. However, the level of optimism seen in 2025 may be moderating.

Our market areas reflected the following apartment vacancy levels as of March 2026: Springfield, Missouri at 7.6%, St. Louis 10.5%, Kansas City 8.9%, Minneapolis at 6.6%, Dallas-Fort Worth 12.3%, Chicago 5.1%, Atlanta 11.6%, Phoenix 11.7%, Denver 11.7% and Charlotte, North Carolina 12.9%.

The office sector saw low net deliveries and a demand rebound in the second half of 2025. However, the geographic unevenness of demand and stagnant hiring suggests that downside risks persist in 2026. The national vacancy rate fell to 14.0% as of March 31, 2026 from a record high of 14.2% at midyear 2025. Net absorption turned positive in each of the final two quarters of 2025, offsetting occupancy losses earlier in the year. Given the overall improvement in performance, the forecast anticipates a continued high level of vacancy through 2026, followed by a gradual decrease, driven primarily by an ongoing supply-side adjustment. Dallas and Houston outperformed in absorption, reflecting strong population and economic growth, while Chicago posted occupancy losses exceeding 4 million square feet. Rent growth is expected to remain stagnant in 2026.

The demand recovery is complex and variable both across and within the country’s major cities according to CoStar. Only about half of major metro areas have posted occupancy gains in the past 12 months, a historically unique occurrence which indicates the fragmented nature of the market. One obstacle to recovery is the stalling out of office using job growth. The hiring slowdown has been mitigated somewhat by a meaningful increase in office attendance in some parts of the country. However, much return-to-office momentum seems to be driven by an increase in in-office work by “hybrid” employees. These attendance and employment trends are now interacting with a lack of desirable new supply in many markets to bring availability meaningfully down. Slowing construction is a major factor, and one result is that there are now approximately 60 fewer Class A buildings in major markets able to accommodate requirements of 100,000 square feet than there were at the start of 2025.

CoStar reported office asking rents have risen little for approximately the past five years. Going forward, a lack of new supply is expected to counterbalance generally average demand, allowing overall rent growth to stay nominally positive in 2026 before accelerating to a pace that exceeds inflation by 2028.

First quarter 2026 sales volume posted its strongest performance in four years with more than $13 billion in transactions. After five years of negative net absorption, demand was positive in each of the last three quarters as new construction ground to a halt and headline vacancy ticked slightly lower.

As of March 2026, national office vacancy rates remained stable at 14.0%, while our market areas reflected the following vacancy levels: Springfield, Missouri at 4.3%, St. Louis at 10.8%, Kansas City 10.0%, Minneapolis 11.7%, Dallas-Fort Worth at 17.8%, Chicago at 17.2%, Atlanta at 16.6%, Denver at 18.1%, Phoenix at 16.4% and Charlotte, North Carolina at 14.2%.

The U.S. retail market reported a modest softening in the first quarter of 2026 with net absorption turning negative, reflecting a typical first quarter increase in move-outs that was augmented by several larger batch closures. While discretionary spending has slowed and operating costs have risen, the impact on overall market health has been contained. Strong backfill demand and limited new supply helped keep availability stable, emphasizing the sector’s ongoing supply-constrained nature.

Leasing activity remained a key point of strength in 2025 and early 2026. Estimated leasing volume exceeded 54 million SF in the first quarter of 2026, marking the strongest pace recorded since early 2024 and reinforcing the depth of tenant demand for well-located space. CoStar market participants reported exceptionally strong backfill demand for spaces as they became available, with landlords reporting strong interest and competitive leasing dynamics. Leasing continues to be dominated by smaller-format, freestanding, and in-line spaces. Spaces under 2,500 SF continue to account for a disproportionate share of transactions, reflecting ongoing demand from service-oriented and experience-driven tenants, including food service, fitness, personal care, and wellness concepts. Value-oriented retailers and national fitness operators remain among the most active tenant groups, supporting steady leasing velocity even as broader demand formation becomes more selective. Retailers are prioritizing fewer, higher-quality locations, reinforcing the divergence between top-performing assets and older, less competitive inventory.

Retail rent growth continued to moderate through the first quarter of 2026, with the national average asking rent rising just 2.0% year-over year. While near term rent growth has slowed, longer term spreads remain elevated, providing landlords with meaningful rent roll-up on lease resets. Rent performance continues to vary widely across markets. Several Sun Belt metros, including Phoenix, Orlando, Atlanta, and Charlotte continue to post annual rent gains of 3-5%. This is supported by population growth as well as tenant demand. Simultaneously, multiple Midwestern markets have emerged as relative outperformers, posting above-average gains as rent growth broadens geographically. In contrast, high-cost coastal markets, including Los Angeles and San Francisco, are flat to modestly negative year-over-year. These high-cost coastal markets are also contending with elevated pass-through costs and slower demand formation, contributing to a performance gap. Looking ahead, rent growth is expected to remain restrained, but stable, over the next several quarters. However, much of this space is expected to backfill quickly given the persistent shortage of quality inventory and minimal new construction. As a result, rent growth is forecast to remain in line with recent historical averages. Smaller, well-located spaces and fast-growing metros are expected to continue outperforming, while assets in slower-growth markets face ongoing challenges.

During the first quarter of 2026, national retail vacancy rates remained steady at 4.4% while our market areas reflected the following vacancy levels: Springfield, Missouri at 2.4%, St. Louis at 4%, Kansas City at 4.6%, Minneapolis at 2.8%, Dallas-Fort Worth at 5.1%, Chicago at 4.9%, Atlanta at 4.4%, Phoenix at 4.6%, Denver at 4.5%, and Charlotte, North Carolina at 3.4%.

Current U.S. industrial market performance continues to favor the tenant, reporting a decade-long high vacancy rate of 7.5% in March 2026. Deliveries continued to outpace net absorption in 2025 and impending supply additions will pressure vacancy higher, in conjunction with pressure from ongoing concerns regarding consumer spending. Assuming the economy continues to expand, although at a reduced pace, vacancy is forecast to increase through 2026, peaking below 8%, and begin declining into 2027 as deliveries moderate. The forecast for moderate absorption and slightly higher near-term vacancy reflects a projected slowdown in U.S. retail spending growth, which Oxford Economics expects to remain positive but slow in 2026. Annual net absorption has slowed, measuring 123 million SF over the last 12 months; however, it strengthened in the second half of 2025. Tariffs present a risk to demand for logistics buildings, particularly in major West Coast port-dependent markets, as import traffic and U.S. consumer spending could slow. While industrial building deliveries are set to moderate further as the construction pipeline thins, supply growth will still likely outpace net absorption in upcoming quarters. Industrial tenants remain active, but the pace of new available space listings hitting the market continues to rise, outpacing leasing and raising the U.S. industrial availability rate, which, included under construction supply. Availability increased in most markets across the country. However, smaller spaces continue to lease relatively quickly. Spaces under 50,000 SF had a median month to lease of under 5 months in 2025, compared to 6.2 months for 50,000 to 100,000-SF spaces, and over 8 months for spaces over 100,000 SF.

Rents for big-box logistics buildings have declined, while rent growth for small bay buildings remained positive. Rent growth has slowed down from a record gain of over 10% in 2022, diminishing further in 2025 to 1.7% from a 3.5% increase at the end of 2024.

Nevertheless, due to the record rent growth achieved from 2021 through 2023, owners in many markets are still able to increase in-place rents when their tenants’ long-term leases expire. While concessions were almost nonexistent when the market was booming during 2021 and 2022, three months of free rent are increasingly attainable on 5-to 7-year leases and property owners are increasingly offering concessions to secure large leases. Elevated vacancy levels will likely continue to restrict landlords’ ability to raise rents on large buildings, while weak economic conditions and large rent increases recorded in recent years limit smaller tenants’ ability to absorb further sharp increases in rent. Rent growth in 2026 will likely moderate for a third consecutive year due to elevated vacancy, even if net absorption increases gradually. Per CoStar, there is potential for rent growth to accelerate given the limited amount of new supply underway, though downside risks to demand from trade disruption and a potential slowdown in U.S. retail spending weigh on the forecast.

For the first quarter of 2026, national industrial vacancy was 7.5% while our market areas reflected the following industrial vacancy: Springfield, Missouri at 1.4%, St. Louis at 5.3%, Kansas City at 5.7%, Minneapolis 4.3%, Dallas-Fort Worth at 8.5%, Chicago at 5.4%, Atlanta at 8.4%, Phoenix at 11.5%, Denver at 9.4% and Charlotte, North Carolina at 10.4%.

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

For discussion of the risk factors associated with multi-family and commercial real estate loans, see “Risk Factors – Risks Relating to Lending Activities – Our loan portfolio possesses increased risk due to our relatively high concentration of commercial and residential construction, commercial real estate, other residential (multi-family) and other commercial loans” and “Risk Factors – Risks Relating to Regulation – We currently exceed thresholds defined in interagency guidance on commercial real estate concentrations, and as such, we may incur additional expense or slow the growth of certain categories of commercial real estate lending” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

General

The profitability of the Company and, more specifically, the profitability of its primary subsidiary, the Bank, depends primarily on its net interest income, as well as provisions for credit losses and the level of non-interest income and non-interest expense. Net interest income is the difference between the interest income the Bank earns on its loans and investment securities, 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 $88.7 million, or 1.6%, from $5.60 billion at December 31, 2025, to $5.69 billion at March 31, 2026. Details of the current period changes in total assets are provided below, under “Comparison of Financial Condition at March 31, 2026 and December 31, 2025.”

Loans. Net outstanding loans increased $99.8 million from December 31, 2025, to $4.46 billion at March 31, 2026. The increase was primarily in construction loans and commercial real estate loans, partially offset by a decrease in other residential (multi-family) loans. As loan demand is affected by a variety of factors, including general economic conditions, and because of the competition we face and our focus on pricing discipline and credit quality, no assurance can be given that our loan growth will match or exceed the average level of growth achieved in prior years. The Company’s strategy continues to be focused on maintaining credit risk and interest rate risk at appropriate levels.

Until 2025, the Company had experienced total loans receivable balances that were stable to growing over the past few years. Total commercial real estate and commercial construction balances were fairly stable over the past five years. One- to four-family loan totals increased in 2022 and have since decreased each year. Recent significant growth occurred in other residential (multi-family) loans up until 2025; however, other residential (multi-family) loan balances decreased in 2025. In the first three months of 2026, total loans receivable balances returned to growth. Most of Great Southern’s loans are generated in its primary lending locations, including Springfield, St. Louis, Kansas City, Des Moines and Minneapolis, as well as our loan production offices in Atlanta, Charlotte, Chicago, Dallas, Denver, Omaha, and Phoenix. Certain minimum underwriting standards and monitoring help assure the Company’s portfolio quality. All new loan originations that exceed lender approval authorities are subject to review and approval by Great Southern’s loan committee. Generally, the Company considers commercial construction, consumer, other residential (multi-family) and commercial real estate loans to involve a higher degree of risk compared to some other types of loans, such as first mortgage loans on one- to four-family, owner-occupied residential properties. For other residential (multi-family), commercial real estate, commercial business and construction loans, the credits are subject to an analysis of the borrower’s and guarantor’s financial condition, credit history, verification of liquid assets, collateral, market analysis and repayment ability. It has been, and continues to be, Great Southern’s practice to verify information from potential borrowers regarding assets, income or payment ability and credit ratings as applicable and as required by the authority approving the loan. To minimize construction risk, projects are monitored as construction draws are requested by comparison to budget and with progress verified through property inspections. The geographic and product diversity of collateral, equity requirements and limitations on speculative construction projects help to mitigate overall risk in these loans. Underwriting standards for all loans also include loan-to-value ratio limitations, which vary depending on collateral type, debt service coverage ratios or debt payment to income ratio guidelines, where applicable, credit histories, use of guaranties and other recommended terms relating to equity requirements, amortization, and maturity. Consumer loans, other than home equity loans, are primarily secured by new or used motor vehicles and these loans are subject to underwriting standards designed to assure portfolio quality. In 2019, the Company discontinued indirect auto loan originations.

While our policy allows us to lend up to 95% of the appraised value on one- to four-family residential properties, originations of loans with loan-to-value ratios at that level are minimal. Private mortgage insurance is typically required for loan amounts above the 80% level. Few exceptions occur and would be based on analyses which determined minimal transactional risk to be involved. We consider these lending practices to be consistent with or more conservative than what we believe to be the norm for banks our size. At both March 31, 2026 and December 31, 2025, 0.2% of our owner occupied one- to four-family residential loans had loan-to-value ratios above 100% at origination. At March 31, 2026 and December 31, 2025, 0.2% and 0.4% of our non-owner occupied one- to four-family residential loans had loan-to-value ratios above 100% at origination, respectively.

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 improved repayment ability 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 three months ended March 31, 2026, available-for-sale securities decreased $10.0 million, or 1.9%, from $523.8 million at December 31, 2025, to $513.8 million at March 31, 2026 due to monthly principal payments on investment securities and decreases in market value of the available-for-sale securities. For further information on investment securities, see Note 5 to the accompanying financial statements contained in this Report.

Held-to-maturity Securities. In the three months ended March 31, 2026, held-to-maturity securities decreased $1.6 million, or 0.9%, from $179.2 million at December 31, 2025, to $177.6 million at March 31, 2026, due to principal payments on mortgage-backed securities and collateralized mortgage obligations.

Deposits. The Company attracts deposit accounts through its retail branch network, correspondent banking and corporate services areas, internet channels and brokered deposits. The Company then utilizes these deposit funds, along with FHLBank advances and other borrowings, to meet loan demand or otherwise fund its activities. In the three months ended March 31, 2026, total deposit balances decreased $37.6 million, or 0.8%. Compared to December 31, 2025, transaction account balances decreased $9.1 million, or 0.3%, to $3.12 billion at March 31, 2026, and retail certificates of deposit decreased $17.0 million, or 2.5%, to $671.4 million at March 31, 2026. The decrease in transaction accounts was primarily a result of a decrease in various money market accounts, as non-interest-bearing checking accounts increased $15.8 million. Retail time deposits decreased due to a decrease in retail certificates generated or maintained through the banking center network. Competition for time deposits has been, and remains, significant in most of our markets. Brokered deposits, including IntraFi program purchased funds, were $652.0 million and $663.4 million at March 31, 2026 and December 31, 2025, respectively. The Company uses brokered deposits of select maturities from time to time to supplement its various funding channels and to manage interest rate risk.

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 generate 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 loan demand has outpaced our generation of new deposits, we have utilized brokered deposits and FHLBank advances to fund these loans. These funding sources have been attractive to us because we can create either fixed or variable rate funding, as desired, which more closely matches the interest rate nature of much of our loan portfolio. It also gives us greater flexibility in increasing or decreasing the duration of our funding. While we do not currently anticipate that our ability to access these sources will be reduced or eliminated in future periods, if this should happen, the limitation on our ability to fund additional loans could have a material adverse effect on our business, financial condition and results of operations. See “Results of Operations and Comparison for the Three Months Ended March 31, 2026 and 2025 – Liquidity” below for further information on funding sources.

Securities sold under reverse repurchase agreements with customers. Securities sold under reverse repurchase agreements with customers decreased $11.3 million from $48.5 million at December 31, 2025 to $37.2 million at March 31, 2026. These balances fluctuate over time based on customer demand for this product.

Short-term borrowings and other interest-bearing liabilities. Short term borrowings and other interest-bearing liabilities increased $139.8 million from $330.9 million at December 31, 2025 to $470.7 million at March 31, 2026. The Company’s FHLBank term advances were $-0- at both March 31, 2026 and December 31, 2025. At March 31, 2026 and December 31, 2025, there was $470.0 million and $330.0 million, respectively, in overnight borrowings from the FHLBank, which were included in short term borrowings.

Net Interest Income and Interest Rate Risk Management. Our net interest income may be affected positively or negatively by changes in market interest rates. A large portion of our loan portfolio is tied to one-month SOFR, three-month SOFR or the “prime rate” and adjusts immediately or shortly after the index rate adjusts (subject to the effect of contractual interest rate floors on some of the loans, which are discussed below). We monitor our sensitivity to interest rate changes on an ongoing basis (see “Quantitative and Qualitative Disclosures About Market Risk”).

The current level and shape of the interest rate yield curve poses challenges for interest rate risk management. Prior to its increase of 0.25% in December 2015, the FRB had last changed interest rates in December 2008. This was the first rate increase since September 2006. The FRB also implemented rate increases of 0.25% on eight additional occasions beginning in December 2016 through December 2018, with the Federal Funds rate reaching as high as 2.50%. After December 2018, the FRB paused its rate increases and, in July, September and October 2019, implemented rate decreases of 0.25% on each of those occasions. At December 31, 2019, the Federal Funds rate stood at 1.75%. In response to the COVID-19 pandemic, the FRB decreased interest rates on two occasions in March 2020, a 0.50% decrease on March 3rd and a 1.00% decrease on March 16th. At December 31, 2021, the Federal Funds rate was 0.25%. In 2022, the FRB implemented rate increases of 0.25%, 0.50%, 0.75%, 0.75%, 0.75%, 0.75% and 0.50% in March, May, June, July, September, November and December 2022, respectively. At December 31, 2022, the Federal Funds rate was 4.50%. In 2023, the FRB implemented rate increases of 0.25%, 0.25%, 0.25% and 0.25% in February, March, May and July 2023, respectively. At December 31, 2023, the Federal Funds rate was 5.50%. In 2024, the FRB implemented rate decreases of 0.50%, 0.25% and 0.25% in September, November, and December, respectively. At December 31, 2024, the Federal Funds rate was 4.50%. In 2025, the FRB implemented a rate decrease of 0.25% in each of September, October, and December 2025, respectively. At December 31, 2025, the Federal Funds rate was 3.75%. During the first three months of 2026, there were no changes to the Federal Funds rate. The Federal Funds rate remained at 3.75% at March 31, 2026. Financial markets currently expect the possibility of further decreases in Federal Funds interest rates in 2026 to be mixed, if any, with financial markets now pricing in zero to one potential cut of only 0.25% for the remainder of 2026.

Great Southern’s loan portfolio includes loans ($1.71 billion at March 31, 2026) tied to various SOFR indexes that will be subject to adjustment at least once within 90 days after March 31, 2026. Nearly all of these loans have interest rate floors at various rates. Great Southern also has a portfolio of loans ($601.8 million at March 31, 2026) tied to a “prime rate” of interest that will adjust immediately or within 90 days of a change to the “prime rate” of interest. Nearly all of these loans had interest rate floors at various rates. At March 31, 2026, nearly all of these SOFR, and “prime rate” loans had fully-indexed rates that were at or above their floor rate and in most cases well above the floor rate.

A rate cut by the FRB generally would be expected to have an immediate negative impact on the Company’s interest income on loans due to the large total balance of loans tied to the SOFR indexes or the “prime rate” index that will be subject to adjustment at least once within 90 days or loans which generally adjust immediately as the Federal Funds rate adjusts. Interest rate floors may at least partially mitigate the negative impact of interest rate decreases. Loans at their floor rates are, however, subject to the risk that borrowers will seek to refinance elsewhere at the lower market rate. There may also be a negative impact on the Company’s net interest income if the Company is unable to significantly lower its funding costs due to a highly competitive rate environment for deposits, although interest rates on assets may decline further. Conversely, market interest rate increases would normally result in increased interest rates on our SOFR-based and prime-based loans.

As of March 31, 2026, Great Southern’s interest rate risk models indicate that, generally, rising interest rates are expected to have a modestly positive impact on the Company’s net interest income, while declining interest rates are expected to have a mostly neutral impact on net interest income. Any negative impact of a falling Federal Funds rate and other market interest rates also falling could be more pronounced if we are not able to decrease non-maturity deposit rates accordingly. We model various interest rate scenarios for rising and falling rates, including both parallel and non-parallel shifts in rates. The results of our modeling indicate that net interest income is not likely to be significantly affected either positively or negatively in the first twelve months following relatively minor changes in interest rates because our portfolios are relatively well matched in a twelve-month horizon.

In a situation where market interest rates increase significantly in a short period of time, our net interest margin increase may be more pronounced in the very near term (first one to three months), due to fairly rapid increases in SOFR interest rates and “prime” interest rates. In a situation where market interest rates decrease significantly in a short period of time, as they did in March 2020, our net interest margin decrease may be more pronounced in the very near term (first one to three months), due to fairly rapid decreases in SOFR interest rates and “prime” interest rates. In the subsequent months, we would expect that net interest margin would stabilize and begin to improve, as renewal interest rates on maturing time deposits decrease.

Beginning in March 2022, market interest rates, including LIBOR interest rates, SOFR interest rates and “prime” interest rates, began to increase rapidly. This resulted in increasing loan yields and expansion of our net interest income and net interest margin throughout 2022 and into the first three months of 2023. In 2023, market interest rate increases moderated and loan yield increases moderated in line with market rates. However, there has been increased competition for deposits and other sources of funding, resulting in higher costs for those funds. This has been especially true since early March 2023. Deposit and other funding costs moderated a bit in late 2024 as the FRB cut the federal funds rate. Deposit and other funding costs further moderated in late 2025 as the FRB cut the federal funds rate three times, but competition for deposits remained significant into the first three months of 2026. 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, POS interchange fees, late charges and prepayment fees on loans, gains on sales of loans and available-for-sale investments and other general operating income. Non-interest income may also be affected by the Company’s interest rate derivative activities. 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 below, under “Results of Operations and Comparison for the Three Months Ended March 31, 2026 and 2025.”

Effect of Federal Laws and Regulations

Federal legislation and regulation significantly affect the operations of the Company and the Bank, and have increased competition among commercial banks, savings institutions, mortgage banking enterprises and other financial institutions. In particular, the capital requirements and operations of regulated banking organizations such as the Company and the Bank have been and will be subject to changes in applicable statutes and regulations from time to time, which changes could, under certain circumstances, adversely affect the Company or the Bank. For additional information, see “Item 1. Business—Government Supervision and Regulation” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Business Initiatives

The Company maintains its focus on technology initiatives and advancements with its current core provider. These investments in both foundational projects and a heightened customer experience continue to foster an organizational emphasis on innovation and forward progress.

The Company’s banking centers and loan production offices are continually reviewed to measure performance and ensure responsiveness to changing customer needs and preferences. As such, the Company may open banking centers and loan production offices and invest resources where customer demand leads, and from time to time, consolidate offices or even exit markets when conditions dictate.

The Company transitioned its banking center located at 4700 Mid Rivers Mall Dr. in Cottleville, Mo., to its second drive-thru Express Center location in April 2026. This is the Company’s first Express Center in the St. Louis, Mo., area. In addition to the Cottleville location, the Company operates 17 other locations in the St. Louis metro region.

Headquartered in Springfield, Missouri, Great Southern offers a broad range of banking services to customers. The Company operates 87 retail banking centers in Missouri, Iowa, Kansas, Minnesota, Arkansas and Nebraska and commercial lending offices in Atlanta,

Charlotte, Chicago, Dallas, Denver, Omaha, and Phoenix. The common stock of Great Southern Bancorp, Inc. is listed on the Nasdaq Global Select Market under the symbol “GSBC.”

Comparison of Financial Condition at March 31, 2026 and December 31, 2025

During the three months ended March 31, 2026, the Company’s total assets increased by $88.7 million to $5.69 billion. The increase was primarily due to an increase in net loans.

Cash and cash equivalents were $187.4 million at March 31, 2026, a decrease of $2.2 million, or 1.1%, from $189.6 million at December 31, 2025.

The Company’s available-for-sale securities decreased $10.0 million, or 1.9%, compared to December 31, 2025. This decrease is related to monthly principal payments on investment securities and decreases in market value of the available-for-sale securities. The available-for-sale securities portfolio was 9.0% of total assets at March 31, 2026 and 9.4% of total assets at December 31, 2025.

The Company’s held-to-maturity securities decreased $1.6 million, or 0.9%, compared to December 31, 2025. This decrease was primarily due to monthly payments received related to the portfolio of mortgage-backed securities and collateralized mortgage obligations. The held-to-maturity securities portfolio was 3.1% of total assets at March 31, 2026 and 3.2% of total assets at December 31, 2025.

Net loans increased $99.8 million from December 31, 2025, to $4.46 billion at March 31, 2026. This increase was primarily in construction loans ($83.0 million increase) and commercial real estate loans ($27.0 million increase), partially offset by a decrease in other residential (multi-family) loans ($18.1 million decrease). The increase in construction loans primarily related to draws to fund work in progress on existing multi-family and commercial real estate projects. The decrease in other residential (multi-family) loans was primarily related to a few large loan payoffs in 2026. The pipeline of the unfunded portion of loans and formal loan commitments remained strong at March 31, 2026, with the largest portion of these unfunded balances represented by the unfunded portion of outstanding construction loans ($529.2 million).

Total liabilities increased $91.2 million from December 31, 2025, to $5.05 billion at March 31, 2026. This increase was primarily due to an increase in overnight borrowings from the Federal Home Loan Bank, partially offset by a decrease in the balance of time deposits and transaction account deposits.

Total deposits decreased $37.6 million, or 0.8%, from $4.48 billion at December 31, 2025 to $4.45 billion at March 31, 2026. Transaction account balances decreased $9.1 million, from $3.13 billion at December 31, 2025 to $3.12 billion at March 31, 2026. Total interest-bearing checking accounts decreased $25.0 million and total non-interest-bearing checking accounts increased $15.8 million. Retail certificates of deposit decreased $17.0 million compared to December 31, 2025, to $671.4 million at March 31, 2026, due to increased competition for these types of deposits.

Brokered deposits decreased $11.4 million to $652.0 million at March 31, 2026, compared to $663.4 million at December 31, 2025. The Company elected to utilize FHLBank borrowings as interest rates on new brokered deposits increased because of a high level of competition for those funds. The Company has the capacity to further expand its use of brokered deposits if it chooses to do so. Of the total brokered deposits at March 31, 2026, $300.0 million were floating rate deposits, which adjust daily, based on the effective federal funds rate index. The Company has also utilized brokered deposits with maturities within six months as part of its interest rate risk management strategies.

The Company’s term FHLBank advances were $-0- at both March 31, 2026 and December 31, 2025. At March 31, 2026 and December 31, 2025, there were no borrowings from the FHLBank, other than overnight borrowings, which are included in the short-term borrowings category. The Company may utilize both overnight borrowings and short-term FHLBank advances depending on relative interest rates.

Short-term borrowings and other interest-bearing liabilities increased $139.8 million from $330.9 million at December 31, 2025 to $470.7 million at March 31, 2026. At March 31, 2026, $470.0 million of this total represented overnight borrowings from the FHLBank, which were used to fund loans and to offset decreases in time deposits and brokered deposits, compared to $330.0 million of overnight borrowings from the FHLBank at December 31, 2025.

Securities sold under reverse repurchase agreements with customers decreased $11.3 million, or 23.3%, from $48.5 million at December 31, 2025 to $37.2 million at March 31, 2026. These balances fluctuate over time based on customer demand for this product.

Total stockholders’ equity decreased $2.5 million, or 0.4%, from $636.1 million at December 31, 2025 to $633.6 million at March 31, 2026. Stockholders’ equity decreased due to repurchases of the Company’s common stock totaling $16.9 million and dividends declared on common stock of $4.7 million. Additionally, accumulated other comprehensive loss (a reduction in equity) increased $2.9 million during the three months ended March 31, 2026 (thereby decreasing total stockholders’ equity), primarily due to decreases in the fair value of available-for-sale investment securities and the fair value of cash flow hedges, as a result of increased market interest rates. Partially offsetting these changes were net income of $17.5 million for the three months ended March 31, 2026 and a $4.6 million increase in stockholders’ equity due to stock option exercises during the period.

Comparison of Results of Operations for the Three Months Ended March 31, 2026 and 2025

General

Net income was $17.5 million for the three months ended March 31, 2026 compared to $17.2 million for the three months ended March 31, 2025. This increase of $316,000, or 1.8%, was primarily due to an increase in negative provision for credit losses on unfunded commitments of $583,000, or 167.5%, an increase in non-interest income of $439,000, or 6.7%, a decrease in income tax expense of $270,000, or 6.3%, and a decrease in non-interest expense of $30,000, or 0.1%, partially offset by a decrease in net interest income of $1.0 million, or 2.0%.

Total Interest Income

Total interest income decreased $9.1 million, or 11.3%, during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease was due to an $8.4 million, or 11.5%, decrease in interest income on loans and a $667,000, or 9.3%, decrease in interest income on investment securities and other interest-earning assets. Interest income from loans, investment securities and other interest-earning assets decreased during the three months ended March 31, 2026 compared to the same period in 2025 due to lower average balances and average rates of interest.

Interest Income – Loans

During the three months ended March 31, 2026 compared to the three months ended March 31, 2025, interest income on loans decreased $8.4 million. Of the $8.4 million decrease in interest income on loans, $4.2 million was due to a decrease in average yield on loans, from 6.23% during the three months ended March 31, 2025 to 5.86% during the three months ended March 31, 2026. This decrease was primarily because of a reduction in the federal funds rate in the latter portion of 2025. The remaining decrease in interest income on loans of $4.2 million was due to lower average loan balances, which fell from $4.76 billion during the three months ended March 31, 2025, to $4.47 billion during the three months ended March 31, 2026. In 2025, loan originations were somewhat muted, and net loan payoffs were significantly higher, resulting in a much lower average balance of loans receivable since the three months ended March 31, 2025. In 2026, some loan growth has resumed as a result of the funding of previously approved but unfunded balances on construction loans, new loan originations, and much lower net loan payoffs compared to the average loan payoff in 2025.

In October 2018, the Company entered into an interest rate swap transaction, which was terminated early, at the Company’s election, in March 2020. Upon termination, the Company received $45.9 million, inclusive of accrued but unpaid interest, from its swap counterparty. The net amount, after deducting accrued interest and deferred income taxes, was accreted to interest income on loans monthly until the originally scheduled termination date of October 6, 2025, at which point these accretions ceased. There was no further interest income impact related to this swap after that date. The Company recorded interest income related to the interest rate swap of $2.0 million in the three months ended March 31, 2025.

In July 2022, the Company entered into two additional interest rate swap transactions as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of each swap is $200 million with an effective date of May 1, 2023 and a termination date of May 1, 2028. Under the terms of one swap, the Company receives a fixed rate of interest of 2.628% and pays a floating rate of interest equal to one-month USD-SOFR OIS. Under the terms of the other swap, the Company receives a fixed rate of interest of 5.725% and pays a floating rate of interest equal to one-month USD-Prime. In each case, the floating rate resets monthly and net settlements of interest due to/from the counterparty also occur monthly. To the extent the fixed rate of interest exceeds the floating rate of interest, the Company receives net interest settlements, which are recorded as loan interest income. If the floating rate of interest exceeds the fixed rate of interest, the Company pays net settlements to the counterparty and records those net payments as a reduction of interest income on loans. The Company recorded a reduction of loan interest income related to these swap transactions of $1.0 million and $1.7 million in the three months ended March 31, 2026 and 2025, respectively. At March 31, 2026, the USD-Prime rate was 6.75% and the one-month USD-SOFR OIS rate was 3.65221%.

If market interest rates remain near or above their current levels, the Company’s interest rate swaps will continue to have a negative impact on net interest income. Market interest rate decreases will reduce the negative impact of these swaps.

Interest Income – Investments and Other Interest-earning Assets

Interest income on investments decreased $342,000 in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Average balances decreased from $738.1 million during the three months ended March 31, 2025, to $722.9 million during the three months ended March 31, 2026, reducing interest income by $124,000. Average balances of securities decreased primarily due to normal monthly payments received related to the portfolio of U.S. Government agency mortgage-backed securities and collateralized mortgage obligations. Interest income on investments decreased $218,000 as a result of lower average interest rates, from 3.34% during the three months ended March 31, 2025, to 3.22% during the three months ended March 31, 2026. The decrease in the average rate was due to decreases in market interest rates compared to the prior year period.

Interest income on other interest-earning assets decreased $325,000 in the three months ended March 31, 2026, compared to the three months ended March 31, 2025. Average interest rates decreased from 4.23% during the three months ended March 31, 2025, to 3.50% during the three months ended March 31, 2026, reducing interest income by $173,000. The decline in the average interest rate was directly attributable to the decrease in the federal funds rate in the latter portion of 2025. Interest income decreased $152,000 as a result of a decrease in average balances from $105.3 million during the three months ended March 31, 2025, to $89.5 million during the three months ended March 31, 2026, due mainly to the Company’s maintaining modestly lower average balances in its account at the Federal Reserve Bank.

Total Interest Expense

Total interest expense decreased $8.1 million, or 26.1%, during the three months ended March 31, 2026, when compared with the three months ended March 31, 2025. Interest expense on deposits decreased $6.3 million, or 25.5%, interest expense on short-term borrowings decreased $388,000, or 8.7%, interest expense on securities sold under reverse repurchase agreements decreased $275,000, or 74.1%, and interest expense on subordinated debentures issued to capital trusts decreased $40,000, or 10.5%. In addition, interest expense on subordinated notes decreased $1.1 million, or 100.0%, as the notes were fully redeemed in June 2025.

Interest Expense – Deposits

Interest expense on demand and savings deposits decreased $1.1 million during the three months ended March 31, 2026, when compared to the three months ended March 31, 2025. Average rates of interest decreased from 1.42% in the three months ended March 31, 2025 to 1.21% in the three months ended March 31, 2026, resulting in a $1.2 million decrease in interest expense. Interest rates paid on demand deposits were lower in the 2026 period due to the Company strategically lowering rates throughout the second half of 2025, as market rates decreased. Partially offsetting this decrease, the average balance of demand and savings deposits increased from $2.22 billion in the three months ended March 31, 2025 to $2.25 billion in the three months ended March 31, 2026, resulting in an increase in interest expense on demand and savings deposits of $105,000.

Interest expense on time deposits decreased $1.6 million during the three months ended March 31, 2026 when compared to the three months ended March 31, 2025. The average rates of interest on time deposits decreased from 3.53% in the three months ended March 31, 2025, to 3.01% in the three months ended March 31, 2026, resulting in a decrease in interest expense of $929,000. The average balances of time deposits decreased from $772.1 million during the three months ended March 31, 2025 to $687.2 million in the three months ended March 31, 2026, resulting in a decrease in interest expense of $691,000. A large portion of the Company’s certificate of deposit portfolio matures within six months and therefore reprices fairly quickly; this is consistent with the portfolio term over the past several years. Competition for time deposits remains significant in our market areas, and upon maturity, a portion of these deposits may be redeemed by customers.

Interest expense on brokered deposits decreased $3.6 million during the three months ended March 31, 2026 when compared to the three months ended March 31, 2025. The average balance of brokered deposits decreased from $892.6 million during the three months ended March 31, 2025 to $681.0 million during the three months ended March 31, 2026, resulting in a decrease in interest expense of $2.2 million during the period. The Company elected to utilize FHLBank borrowings as interest rates on new brokered deposits increased because of a high level of competition for those funds. Interest expense on brokered deposits decreased $1.4 million due to average rates of interest that decreased from 4.58% in the three months ended March 31, 2025 to 3.88% in the three months ended March 31, 2026. The Company uses brokered deposits of select maturities and interest rate structures from time to time to supplement its various funding channels and to manage interest rate risk. A portion of the Company’s brokered deposits are floating rate, and the rate resets with changes to the effective federal funds rate.

Interest Expense – FHLBank Advances; Short-term Borrowings, Repurchase Agreements and Other Interest-bearing Liabilities; Subordinated Debentures Issued to Capital Trusts and Subordinated Notes

FHLBank term advances were not utilized during the three months ended March 31, 2026 and 2025. FHLBank overnight borrowings were utilized in the three months ended March 31, 2026 and 2025 and are included in short-term borrowings.

Interest expense on reverse repurchase agreements decreased $275,000 during the three months ended March 31, 2026 when compared to the three months ended March 31, 2025. The average balance of repurchase agreements decreased from $82.4 million in the three months ended March 31, 2025 to $38.2 million in the three months ended March 31, 2026, due to fluctuations in customers’ desire for this product, resulting in a decrease in interest expense of $151,000 during the period. Interest expense on reverse repurchase agreements decreased $124,000 due to lower average interest rates during the three months ended March 31, 2026 when compared to the three months ended March 31, 2025. The average rate of interest was 1.83% for the three months ended March 31, 2025 compared to 1.02% for the three months ended March 31, 2026, due to changes in the mix of customer balances in these products and overall reductions in market interest rates.

Interest expense on short-term borrowings (including overnight borrowings from the FHLBank) and other interest-bearing liabilities decreased $388,000 during the three months ended March 31, 2026 when compared to the three months ended March 31, 2025. Interest expense on short-term borrowings (including overnight borrowings from the FHLBank) and other interest-bearing liabilities decreased $726,000 due to lower average rates of interest. The average rate of interest on short-term borrowings and other interest-bearing liabilities decreased from 4.60% for the three months ended March 31, 2025 to 3.93% for the three months ended March 31, 2026. Interest rates on borrowings decreased after the federal funds rate was cut by 75 basis points from September to December 2025. Partially offsetting this decrease, interest expense on short-term borrowings (including overnight borrowings from the FHLBank) and other interest-bearing liabilities increased $338,000 due to higher average balances during the three months ended March 31, 2026 when compared to the three months ended March 31, 2025. The average balance of short-term borrowings and other interest-bearing liabilities increased from $392.6 million in the three months ended March 31, 2025 to $419.2 million in the three months ended March 31, 2026. The Company chose to utilize more short-term borrowings versus brokered deposits in the 2026 period.

During the three months ended March 31, 2026, compared to the three months ended March 31, 2025, interest expense on subordinated debentures issued to capital trusts decreased $40,000 due to lower average interest rates. The average interest rate was 6.01% in the three months ended March 31, 2025, compared to 5.38% in the three months ended March 31, 2026. The subordinated debentures are variable-rate debentures bearing interest at a rate of three-month SOFR (originally LIBOR), plus 1.60%, adjusted quarterly, which was 5.53% at March 31, 2026. There was no change in the average balance of the subordinated debentures between the 2025 and 2026 three-month periods.

In June 2020, the Company issued $75.0 million of 5.50% fixed-to-floating rate subordinated notes due June 15, 2030. The notes were sold at par, resulting in net proceeds, after underwriting discounts and commissions and other issuance costs, of approximately $73.5 million. These issuance costs were amortized over the expected life of the notes, which was five years from the issuance date, impacting the overall interest expense on the notes. On June 15, 2025, the Company redeemed all $75.0 million aggregate principal amount of these subordinated notes. Interest expense on subordinated notes decreased $1.1 million, when compared to the prior-year three-month periods, due to the redemption of the subordinated notes.

Net Interest Income

Net interest income for the three months ended March 31, 2026 decreased $1.0 million to $48.3 million, compared to $49.3 million for the three months ended March 31, 2025. Net interest margin was 3.71% in the three months ended March 31, 2026, compared to 3.57% in the three months ended March 31, 2025, an increase of 14 basis points, or 3.9%. The Company experienced decreases in all interest income and interest expense categories, with the decreases in interest income outpacing the declines in interest expense, primarily due to decreases in market interest rates. Interest income also decreased $2.0 million due to the terminated interest rate swap income, which impacted interest income positively in the 2025 period but did not impact the 2026 period.

The Company’s overall average interest rate spread increased 20 basis points, or 6.7%, from 3.00% during the three months ended March 31, 2025 to 3.20% during the three months ended March 31, 2026, due to a 55 basis point decrease in the weighted average rate paid on interest-bearing liabilities, partially offset by a 35 basis point decrease in the weighted average yield earned on interest-earning assets. In comparing the two periods, the yield on loans decreased 37 basis points, the yield on investment securities decreased 12 basis points and the yield on other interest-earning assets decreased 73 basis points. The rate paid on deposits decreased 52 basis points, the rate paid on reverse repurchase agreements decreased 81 basis points, the rate paid on short-term borrowings and other interest-bearing liabilities decreased 67 basis points and the rate paid on subordinated debentures issued to capital trust decreased 63 basis points. Average interest rates earned on loans and paid on deposits are affected by the mix of the loan and deposit portfolios, the duration of loans and time deposits, the amount of fixed-rate and variable-rate loans and other repricing characteristics.

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 and Allowance for Credit Losses

Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as changes in underwriting standards, portfolio mix and delinquency level or term, as well as for changes in economic conditions, including but not limited to, changes in the national unemployment rate, commercial real estate price index, consumer sentiment, gross domestic product (GDP) and construction spending.

Challenging or worsening economic conditions from higher inflation or interest rates, COVID-19 and subsequent variant outbreaks or similar events, global unrest or other factors may lead to increased losses in the portfolio and/or requirements for an increase in provision expense. Management maintains various controls in an attempt to identify and limit future losses, such as a watch list of problem loans and potential problem loans, documented loan administration policies and loan review staff to review the quality and anticipated collectability of the portfolio. Additional procedures provide for frequent management review of the loan portfolio based on loan size, loan type, delinquencies, financial analysis, ongoing correspondence with borrowers and problem loan workouts. Management determines which loans are non-homogeneous or collateral-dependent, evaluates risk of loss and makes additional provisions to expense, if necessary, to maintain the allowance at a satisfactory level.

During the three months ended March 31, 2026 and 2025, the Company did not record a provision expense on its portfolio of outstanding loans. Net recoveries were $13,000 for the three months ended March 31, 2026, compared to net charge-offs of $56,000 in the three months ended March 31, 2025. The provision for losses on unfunded commitments for the three months ended March 31, 2026 was a negative provision of $931,000, compared to a negative provision of $348,000 for the three months ended March 31, 2025. General market conditions and unique circumstances related to specific industries and individual projects contribute to the determination of the levels of provisions and charge-offs in each period.

The Bank’s allowance for credit losses as a percentage of total loans was 1.43% and 1.46% at March 31, 2026 and December 31, 2025, respectively. Management considers the allowance for credit losses adequate to cover losses inherent in the Bank’s loan portfolio at March 31, 2026, based on recent reviews of the Bank’s loan portfolio and current economic conditions. If challenging economic conditions were to last longer than anticipated or deteriorate further or management’s assessment of the loan portfolio were to change, additional credit loss provisions could be required, thereby adversely affecting the Company’s future results of operations and financial condition.

Non-performing Assets

As a result of changes in loan portfolio composition, changes in economic and market conditions and other factors specific to a borrower’s circumstances, the level of non-performing assets will fluctuate.

At March 31, 2026, non-performing assets were $10.1 million, an increase of $2.0 million from $8.1 million at December 31, 2025. Non-performing assets as a percentage of total assets were 0.18% and 0.15% at March 31, 2026 and December 31, 2025, respectively.

Compared to December 31, 2025, non-performing loans increased $1.4 million, to $3.5 million at March 31, 2026. Compared to December 31, 2025, foreclosed assets increased $579,000 to $6.6 million at March 31, 2026.

Non-performing Loans. Activity in the non-performing loans category during the three months ended March 31, 2026 was as follows:

(In Thousands)

At March 31, 2026, the non-performing one- to four-family residential category included five loans, one of which was added in the three months ended March 31, 2026. The largest relationship in the one- to four-family residential category totaled $386,000, or 54.9% of the category, at March 31, 2026. This relationship was added to non-performing loans in 2024 and is collateralized by a single-family residential property in southern Iowa. During the three months ended March 31, 2026, non-performing one- to four-family residential loans experienced a loan pay-off of $821,000 and one relationship totaling $643,000 was transferred to foreclosed assets. At March 31, 2026, the non-performing other residential (multi-family) category consisted of one loan, which was added during the three months ended March 31, 2026, and is collateralized by an apartment building in eastern Iowa. Scheduled monthly payments have not been made recently, causing the loan to become delinquent. The guarantor is involved in legal issues, not related to the subject property, that are causing stress on the financial condition of the guarantor. Subsequent to March 31, 2026, the Company acquired this apartment property through a deed in lieu of foreclosure. The Company expects that an updated valuation of the asset will be completed soon. The non-performing consumer category included three loans at March 31, 2026.

Potential Problem Loans. Potential problem loans decreased $152,000, to $1.2 million at March 31, 2026 from $1.4 million at December 31, 2025. 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.

Activity in the potential problem loans category during the three months ended March 31, 2026 was as follows:

(In Thousands)

At March 31, 2026, the one- to four-family residential category of potential problem loans included 12 loans, two of which were added to potential problem loans in the three months ended March 31, 2026. The largest relationship in this category totaled $259,000, or 27.5% of the total category. The consumer category of potential problem loans included 16 loans, four of which were added during the three months ended March 31, 2026.

Other Real Estate Owned and Repossessions. All of the $6.6 million of other real estate owned and repossessions at March 31, 2026 were acquired through foreclosure.

Activity in foreclosed assets and repossessions during the three months ended March 31, 2026 was as follows:

(In Thousands)

At March 31, 2026, the commercial real estate category of foreclosed assets consisted of one foreclosed property totaling $6.0 million, which is an office building located in Clayton, Missouri and was foreclosed upon in the fourth quarter of 2024. Recently, a portion of the building was vacated by tenants whose leases expired, and the Bank initiated an independent appraisal to determine the current condition value and an estimated value upon completion of proposed significant improvements. Such improvements are expected to cost approximately $3 million and take several months to complete. The majority of this expenditure represents the addition of fire suppression sprinklers throughout the building and other significant improvements. Based on the independent valuation (which utilized sales and current market rents in the area for similarly improved buildings), Bank management does not currently anticipate any loss on this asset and decided to move forward with implementing these improvements. Costs for these improvements are expected to be capitalized over the remainder of 2026 and will increase the carrying value of this foreclosed asset, with approximately $800,000 of expenditures expected to be incurred during the second quarter of 2026. At March 31, 2026, the one- to four-family residential category, totaling $643,000, consisted of one relationship that was transferred from non-performing loans in the three months ended March 31, 2026. This asset consisted of a condominium in the Sarasota, Fla. area. The borrower was no longer in compliance with their loan agreement and, ultimately, the property was placed into foreclosure. Subsequent to March 31, 2026, the Bank entered into a contract to sell the property at a sales price that will result in no material loss to the Bank. The additions and sales in the consumer category were due to the volume of repossessions of automobiles, which generally are subject to a shorter repossession process.

Loans Categorized as “Watch” and “Special Mention”

The Company reviews the credit quality of its loan portfolio using an internal grading system that classifies loans as “Satisfactory,” “Watch,” “Special Mention,” “Substandard” and “Doubtful.” Multiple loan reviews take place on a continuous basis by credit risk and lending management. Reviews are focused on financial performance, occupancy trends, delinquency status, covenant compliance, collateral support, economic considerations and various other factors. See Note 6 for further discussion of the Company’s loan grading system.

Loans classified as “Watch” are being monitored due to indications of potential weaknesses or deficiencies that may require future reclassification as special mention or substandard. Loans classified as “Watch” decreased due to net payments totaling $599,000, from $20.5 million at December 31, 2025 to $19.9 million at March 31, 2026. Of the total loans included in the “Watch” category, the largest relationship totaled $10.1 million and is collateralized by a senior residential healthcare facility in Florida.

While loans classified as “Special Mention” are not adversely classified, they are deserving of management’s close attention to ensure repayment prospects or the credit position of the assets do not deteriorate and expose the institution to elevated risk to warrant adverse classification at a future date. In the three months ended March 31, 2026, loans classified as “Special Mention” increased $7.0 million, to $41.8 million, primarily due to the repurchase of one participated loan relationship after a significant payment was made by the borrower. The Company now holds the entire relationship balance of $31.5 million. This relationship is collateralized by a multi-family housing project in Denver, Colorado.

Non-interest Income

For the three months ended March 31, 2026, non-interest income increased $439,000, to $7.0 million, compared to the three months ended March 31, 2025, primarily as a result of the following item:

Commissions: Commissions income increased $353,000, or 134.7%, from the prior-year period. The increase was due to annuity sales that were approximately 160% higher in the 2026 period compared to the 2025 period. Some customers have recently had a preference for this product, but it is unknown if this trend will continue throughout the remainder of 2026.

Non-interest Expense

For the three months ended March 31, 2026, non-interest expense decreased $30,000, to $34.8 million, compared to the three months ended March 31, 2025, primarily as a result of the following items:

Legal, audit and other professional fees: Legal, audit and other professional fees decreased $348,000, or 33.5%, from the prior-year period, to $690,000. In the three months ended March 31, 2026, the Company recovered $261,000 in previously expensed legal fees pursuant to an insurance reimbursement, related to a multi-family residential loan.

Net occupancy and equipment expenses: Net occupancy and equipment expenses increased $331,000, or 3.9%, from the prior-year period. Various components of computer license and support expenses, primarily related to upgrades of core systems capabilities and the Company’s disaster recovery site, collectively increased by $339,000 in the 2026 period compared to the 2025 period.

The Company’s efficiency ratio for the three months ended March 31, 2026, was 62.85% compared to 62.27% for the same period in 2025. The Company’s ratio of non-interest expense to average assets was 2.47% for the three months ended March 31, 2026, compared to 2.34% for the three months ended March 31, 2025. Average assets for the three months ended March 31, 2026, decreased $332.9 million, or 5.6%, compared to the three months ended March 31, 2025, primarily due to the decline in the average balance of net loans.

Provision for Income Taxes

For the three months ended March 31, 2026 and 2025, the Company’s effective tax rate was 18.7% and 20.0%, respectively. These effective rates were below the statutory federal tax rate of 21.0%, due primarily to the utilization of certain investment tax credits and the Company’s tax-exempt investments and tax-exempt loans. The Company’s effective tax rate may fluctuate in future periods as it is impacted by the level and timing of the Company’s utilization of tax credits, the level of tax-exempt investments and loans, the amount of taxable income in various state jurisdictions and the overall level of pre-tax income. State tax expense estimates continually evolve as taxable income and apportionment between states are analyzed. The Company currently expects its effective tax rate (combined federal and state) will be approximately 18.5% to 19.5% in future periods.

Average Balances, Interest Rates and Yields

The following table presents, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates, and the net interest margin. Average balances of loans receivable include the average balances of nonaccrual loans for each period. Interest income on loans includes interest received on nonaccrual loans on a cash basis. Interest income on loans also includes the amortization of net loan fees, which were deferred in accordance with accounting standards. Net loan fees included in interest income were $879,000 and $970,000 for the three months ended March 31, 2026 and 2025, respectively. Tax-exempt income was not calculated on a tax equivalent basis. The tables do not reflect any effect of income taxes.

(Dollars in Thousands)

* 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 $51.7 million and $55.0 million for the three months ended March 31, 2026 and 2025, respectively. In addition, average tax-exempt loans and industrial revenue bonds were $9.3 million and $10.0 million for the three months ended March 31, 2026 and 2025, respectively. Interest income on tax-exempt assets included in this table was $505,000 and $547,000 for the three months ended March 31, 2026 and 2025, respectively. Interest income net of disallowed interest expense related to tax-exempt assets was $248,000 and $458,000 for the three months ended March 31, 2026 and 2025, respectively.

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.

(Dollars in Thousands)

Liquidity

Liquidity is a measure of the Company’s ability to generate sufficient cash to meet present and future financial obligations in a timely manner through either the sale or maturity of existing assets or the acquisition of additional funds through liability management. These obligations include the credit needs of customers, funding deposit withdrawals, and the day-to-day operations of the Company. Liquid assets include cash, interest-bearing deposits with financial institutions and certain investment securities and loans. As a result of the Company’s ability to generate liquidity primarily through liability funding, management believes that the Company maintains overall liquidity sufficient to satisfy its depositors’ withdrawals and meet its borrowers’ credit needs. At March 31, 2026, the Company had commitments of approximately $33.2 million to fund loan originations, $1.06 billion of unused lines of credit and unadvanced loans, and $13.9 million of outstanding letters of credit.

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

The Company’s primary sources of funds are customer deposits, brokered deposits, short-term borrowings at the FHLBank, other borrowings, loan repayments, unpledged securities, proceeds from sales of loans and available-for-sale securities, and funds provided from operations. The Company utilizes some or all these sources of funds depending on the comparative costs and availability at the time. The Company has from time to time chosen not to pay rates on deposits as high as the rates paid by certain of its competitors and, when believed to be appropriate, supplements deposits with less expensive alternative sources of funds. The Company has also utilized both fixed-rate and floating-rate brokered deposits of varying terms, as well as overnight FHLBank borrowings.

At March 31, 2026 and December 31, 2025, the Company had the following available secured lines and on-balance sheet liquidity:

Statements of Cash Flows. The Company had positive cash flows from operating activities during the three months ended March 31, 2026 and 2025. The Company had negative cash flows from investing activities during the three months ended March 31, 2026, and positive cash flows from investing activities during the three months ended March 31, 2025. The Company had positive cash flows from financing activities during the three months ended March 31, 2026, and negative cash flows from financing activities during the three months ended March 31, 2025.

Cash flows from operating activities for the periods covered by the Statements of Cash Flows were primarily related to changes in accrued and deferred assets, credits and other liabilities, the provision for credit 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 sale of loans originated for sale were the primary sources of cash flows from operating activities. Operating activities provided cash of $21.2 million and $15.0 million during the three months ended March 31, 2026 and 2025, respectively.

During the three months ended March 31, 2026 and 2025, investing activities used cash of $99.8 million and provided cash of $9.4 million, respectively. Investing activities in the 2026 period used cash primarily due to net originations of loans and the purchase of Federal Home Loan Bank stock, partially offset by principal payments received on investment securities. Investing activities in the 2025 period provided cash primarily due to principal payments received on investment securities.

Changes in cash flows from financing activities during the periods covered by the Statements of Cash Flows were due primarily to changes in deposits after interest credited and changes in short-term borrowings, as well as advances from borrowers for taxes and insurance, dividend payments to stockholders and repurchases of the Company’s common stock. During the three months ended March 31, 2026 and 2025, financing activities provided cash of $76.5 million and used cash of $3.0 million, respectively. In the 2026 period, financing activities provided cash primarily as a result of net increases in short-term borrowings, partially offset by decreases in checking, time, and brokered deposits, repurchases of the Company’s common stock and dividends paid to stockholders. In the

2025 period, financing activities used cash primarily as a result of repayments of FRB borrowings, repurchases of the Company’s common stock and dividends paid to stockholders, partially offset by net increases in brokered deposits and checking and savings deposits and net increases in short-term borrowings.

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 March 31, 2026, the Company’s total stockholders’ equity was $633.6 million, or 11.1% of total assets, equivalent to a book value of $58.27 per common share. As of December 31, 2025, total stockholders’ equity was $636.1 million, or 11.4% of total assets, equivalent to a book value of $57.50 per common share. At March 31, 2026, the Company’s tangible common equity to tangible assets ratio was 11.0%, compared to 11.2% at December 31, 2025 (See Non-GAAP Financial Measures below).

Included in stockholders’ equity at March 31, 2026 and December 31, 2025, were unrealized losses (net of taxes) on the Company’s available-for-sale investment securities totaling $29.1 million and $27.6 million, respectively. This change in net unrealized losses primarily resulted from increases in short-term market interest rates during the three months ended March 31, 2026, which generally decreased the fair value of the Company’s investment securities.

Also included in stockholders’ equity at March 31, 2026, was an unrealized loss (net of taxes) on the Company’s two outstanding cash flow hedges (interest rate swaps) totaling $5.6 million. This change in net unrealized losses during the three months ended March 31, 2026, primarily resulted from increased short-term market interest rates, which generally decrease the fair value of these cash flow hedges.

As noted above, total stockholders’ equity decreased $2.5 million, from $636.1 million at December 31, 2025 to $633.6 million at March 31, 2026. Total stockholders’ equity decreased due to repurchases of the Company’s common stock during the three months ended March 31, 2026 totaling $16.9 million and dividends declared on common stock during that period of $4.7 million. Stockholders’ equity also decreased due to an increase in accumulated other comprehensive loss of $2.9 million primarily due to decreases in the fair value of cash flow hedges and available-for-sale investment securities mainly because of an increase in market interest rates during the 2026 period. Partially offsetting these decreases were net income of $17.5 million in the three months ended March 31, 2026 and a $4.6 million increase in stockholders’ equity during that period due to stock option exercises.

The Company had unrealized losses on its portfolio of held-to-maturity investment securities, which totaled $17.1 million and $16.6 million at March 31, 2026 and December 31, 2025 respectively, that were not included in its total capital balance. If held-to-maturity unrealized losses were included in capital (net of taxes), at March 31, 2026 and December 31, 2025, they would have decreased total stockholder’s equity at those dates by $12.9 million and $12.5 million, respectively. These amounts were equal to 2.0% of total stockholders’ equity of $633.6 million at March 31, 2026 and $636.1 million at December 31, 2025.

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 March 31, 2026, the Bank’s common equity Tier 1 capital ratio was 13.0%, its Tier 1 risk-based capital ratio was 13.0%, its total risk-based capital ratio was 14.2% and its Tier 1 leverage ratio was 11.3%. As a result, as of March 31, 2026, the Bank was well capitalized, with capital ratios in excess of those required to qualify as such. On December 31, 2025, the Bank’s common equity Tier 1 capital ratio was 13.0%, its Tier 1 capital ratio was 13.0%, its total capital ratio was 14.3% and its Tier 1 leverage ratio was 11.3%. As a result, as of December 31, 2025, the Bank was well capitalized, with capital ratios in excess of those required to qualify as such.

The FRB has established capital regulations for bank holding companies that generally parallel the capital regulations for banks. On March 31, 2026, the Company’s common equity Tier 1 capital ratio was 13.5%, its Tier 1 capital ratio was 14.0%, its total capital ratio was 15.2% and its Tier 1 leverage ratio was 12.2%. On December 31, 2025, the Company’s common equity Tier 1 capital ratio was 13.6%, its Tier 1 capital ratio was 14.1%, its total capital ratio was 15.3% and its Tier 1 leverage ratio was 12.2%.

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. At March 31, 2026 and December 31, 2025, both the Company and the Bank had a capital conservation buffer that exceeded the required minimum levels.

Dividends. During the three months ended March 31, 2026, the Company declared a common stock cash dividend of $0.43 per share, or 27% of net income per diluted common share for that three-month period and paid a common stock cash dividend of $0.43 per share (which was declared in December 2025). During the three months ended March 31, 2025, the Company declared a common stock cash dividend of $0.40 per share, or 27% of net income per diluted common share for that three-month period and paid a common stock cash dividend of $0.40 per share (which was declared in December 2024). The Board of Directors meets regularly to consider the level and timing of dividend payments. The $0.43 per share dividend declared but unpaid as of March 31, 2026, was paid to stockholders in April 2026.

Common Stock Repurchases and Issuances. The Company has been in various buy-back programs since May 1990. During the three months ended March 31, 2026, the Company repurchased 268,664 shares of its common stock at an average price of $62.55 per share and issued 80,259 shares of common stock at an average price of $50.90 per share to cover stock option exercises. During the three months ended March 31, 2025, the Company repurchased 173,344 shares of its common stock at an average price of $58.38 per share and issued 15,007 shares of common stock at an average price of $48.22 per share to cover stock option exercises.

In April 2025, the Company’s Board of Directors approved a new program to repurchase shares of the Company’s outstanding common stock. The stock repurchase program authorizes the purchase, from time to time in open market or privately negotiated transactions, of up to one million additional shares of the Company’s common stock. This program does not have an expiration date. At March 31, 2026, approximately 419,000 shares remained available under the latest stock repurchase authorization.

Management has utilized stock buy-back programs from time to time when it believed that doing so would contribute to the overall growth of stockholder value. The number of shares that will be repurchased at any particular time and the prices that will be paid are subject to many factors, several of which are outside of the control of the Company. The primary factors typically include the number of shares available in the market from sellers at any given time, the market price of the stock and the projected impact on the Company’s earnings per share and capital.

Non-GAAP Financial Measures

This document contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (“GAAP”), specifically, the ratio of tangible common equity to tangible assets.

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 measurement 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 other similarly titled measures as calculated by other companies.

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

(Dollars in Thousands)

Asset and Liability Management and Market Risk

A principal operating objective of the Company is to produce stable earnings by achieving a favorable interest rate spread that can be sustained during fluctuations in prevailing interest rates. The Company has sought to reduce its exposure to adverse changes in interest rates by attempting to achieve a closer match between the periods in which its interest-bearing liabilities and interest-earning assets can be expected to reprice through the origination of adjustable-rate mortgages and loans with shorter terms to maturity and the purchase of other short-term interest-earning assets.

Our Risk When Interest Rates Change

The rates of interest we earn on assets and pay on liabilities generally are established contractually for a period of time. Market interest rates change over time. Accordingly, our results of operations, like those of other financial institutions, are impacted by changes in interest rates and the interest rate sensitivity of our assets and liabilities. The risk associated with changes in interest rates and our ability to adapt to these changes is known as interest rate risk and is our most significant market risk.

How We Measure the Risk to Us Associated with Interest Rate Changes

In an attempt to manage our exposure to changes in interest rates and comply with applicable regulations, we monitor Great Southern’s interest rate risk. In monitoring interest rate risk, we regularly analyze and manage assets and liabilities based on their payment streams and interest rates, the timing of their maturities and their sensitivity to actual or potential changes in market interest rates.

The ability to maximize net interest income is largely dependent upon the achievement of a positive interest rate spread that can be sustained despite fluctuations in prevailing interest rates. Interest rate sensitivity is a measure of the difference between amounts of interest-earning assets and interest-bearing liabilities which either reprice or mature within a given period of time. The difference, or the interest rate repricing “gap,” provides an indication of the extent to which an institution’s interest rate spread will be affected by changes in interest rates. A gap is considered positive when the amount of interest-rate sensitive assets exceeds the amount of interest-rate sensitive liabilities repricing during the same period and is considered negative when the amount of interest-rate sensitive liabilities exceeds the amount of interest-rate sensitive assets during the same period. Generally, during a period of rising interest rates, a negative gap within shorter repricing periods would adversely affect net interest income, while a positive gap within shorter repricing periods would result in an increase in net interest income. During a period of falling interest rates, the opposite would be true. As of March 31, 2026, Great Southern’s interest rate risk models indicated that, generally, rising interest rates are expected to have a modestly positive impact on the Company’s net interest income, while declining interest rates are expected to have a mostly neutral impact on net interest income. Any negative impact of a falling Federal Funds rate and other market interest rates also falling could be more pronounced if we are not able to decrease non-maturity deposit rates accordingly. We model various interest rate scenarios for rising and falling rates, including both parallel and non-parallel shifts in rates. The results of our modeling indicate that net interest income is not likely to be significantly affected either positively or negatively in the first twelve months following relatively minor changes in interest rates because our portfolios are relatively well matched in a twelve-month horizon. In a situation where market interest rates increase significantly in a short period of time, our net interest margin increase may be more pronounced in the very near term (first one to three months), due to fairly rapid increases in SOFR interest rates (which replaced LIBOR interest rates) and “prime” interest rates. In a situation where market interest rates decrease significantly in a short period of time, as they did in March 2020, our net interest margin decrease may be more pronounced in the very near term (first one to three months), due to fairly rapid decreases in SOFR interest rates and “prime” interest rates. In the subsequent months, we would expect that net interest margin would stabilize and begin to recover, as renewal interest rates on maturing time deposits decrease compared to the then-current rates paid on those products. During 2020, we experienced some compression of our net interest margin due to the Federal Funds rate being cut by 2.25% from July 2019 through March 2020. Margin compression primarily resulted from changes in the asset mix, mainly the addition of lower-yielding assets and the issuance of subordinated notes during 2020, and net interest margin remained lower than our historical average in 2021. LIBOR/SOFR interest rates decreased significantly in 2020 and remained very low in 2021 and into the first three months of 2022, putting pressure on loan yields, and strong pricing competition for loans and deposits remained in most of our markets. After March 2022, market interest rates increased fairly rapidly. This increased loan yields and expanded our net interest income and net interest margin in the latter half of 2022 and the first three months of 2023. While market interest rate increases are expected to result in increases in loan yields, we expect that much of this benefit will be offset by increased funding costs, including changes in the funding mix, as experienced in 2023 and much of 2024. Market interest rate decreases began in late 2024, with a short series of Federal Funds rate cuts. Another short series of Federal Funds rate cuts followed in late 2025. These rate cuts have not had a material negative impact on our net interest margin through March 31, 2026.

As of March 31, 2026, time deposit maturities (including brokered time deposits) over the next 12 months were as follows: within three months — $647.0 million, with a weighted-average rate of 3.48%; within three to six months — $338.5 million, with a weighted-average rate of 3.04%; and within six to twelve months — $29.2 million, with a weighted-average rate of 1.41%. Based on time deposit market rates in March 2026, replacement rates for maturing time deposits originated through our retail branch system are likely to be approximately 2.70-3.10%, depending on term. Brokered time deposit rates were generally at or above 3.75% in March 2026.

The current level and shape of the interest rate yield curve pose challenges for interest rate risk management. Prior to its increase of 0.25% on December 16, 2015, the FRB had last changed interest rates on December 16, 2008. This was the first rate increase since September 29, 2006. The FRB also implemented rate increases of 0.25% on eight additional occasions between December 2016 and December 2018, with the Federal Funds rate reaching as high as 2.50%. After December 2018, the FRB paused its rate increases and, in July, September and October 2019, implemented rate decreases of 0.25% on each of those occasions. At December 31, 2019, the Federal Funds rate stood at 1.75%. In response to the COVID-19 pandemic, the FRB decreased interest rates on two occasions in March 2020, a 0.50% decrease on March 3, 2020 and a 1.00% decrease on March 16, 2020. At December 31, 2021, the Federal Funds rate was 0.25%. In 2022, the FRB implemented rate increases of 0.25%, 0.50%, 0.75%, 0.75%, 0.75%, 0.75% and 0.50% in March, May, June, July, September, November and December 2022, respectively. At December 31, 2022, the Federal Funds rate was 4.50%. In 2023, the FRB implemented rate increases of 0.25%, 0.25%, 0.25% and 0.25% in February, March, May and July 2023, respectively. At December 31, 2023 the Federal Funds rate was 5.50%. In 2024, the FRB implemented rate decreases of 0.50%, 0.25%, and 0.25% in September, November and December, respectively. At December 31, 2024, the Federal Funds rate was 4.50%. In 2025, the FRB implemented rate decreases of 0.25% in each of September, October and December, respectively. At December 31, 2025, the Federal Funds rate was 3.75%, and remained there at March 31, 2026. Financial markets now expect the possibility of further decreases in Federal Funds interest rates in 2026 to be modest, if any, with the number of potential cuts now expected to be only zero to one by the end of 2026.

Great Southern’s loan portfolio includes loans ($1.71 billion at March 31, 2026) tied to various SOFR indexes that will be subject to adjustment at least once within 90 days after March 31, 2026. Nearly all of these loans have interest rate floors at various rates. Great Southern also has a portfolio of loans ($601.8 million at March 31, 2026) tied to a “prime rate” of interest that will adjust immediately or within 90 days of a change to the “prime rate” of interest. Nearly all of these loans had interest rate floors at various rates. At March 31, 2026, nearly all of these SOFR, and “prime rate” loans had fully-indexed rates that were at or above their floor rate and in most cases well above the floor rate.

Interest rate risk exposure estimates (the sensitivity gap) are not exact measures of an institution’s actual interest rate risk. They are only indicators of interest rate risk exposure produced in a simplified modeling environment designed to allow management to gauge the Bank’s sensitivity to changes in interest rates. They do not necessarily indicate the impact of general interest rate movements on the Bank’s net interest income because the repricing of certain categories of assets and liabilities is subject to competitive and other factors beyond the Bank’s control. As a result, certain assets and liabilities indicated as maturing or otherwise repricing within a stated period may in fact mature or reprice at different times and in different amounts and cause a change, which could be material, in the Bank’s interest rate risk.

In order to minimize the potential for adverse effects of material and prolonged increases and decreases in interest rates on Great Southern’s results of operations, Great Southern has adopted asset and liability management policies to better match the maturities and repricing terms of Great Southern’s interest-earning assets and interest-bearing liabilities. Management recommends and the Board of Directors sets the asset and liability policies of Great Southern, which are implemented by the Asset and Liability Committee. The Asset and Liability Committee is chaired by the Chief Financial Officer and is comprised of members of Great Southern’s senior management. The purpose of the Asset and Liability Committee is to communicate, coordinate and control asset/liability management consistent with Great Southern’s business plan and board-approved policies. The Asset and Liability Committee establishes and monitors the volume and mix of assets and funding sources, taking into account relative costs and spreads, interest rate sensitivity and liquidity needs. The objectives are to manage assets and funding sources to produce results that are consistent with liquidity, capital adequacy, growth, risk and profitability goals. The Asset and Liability Committee meets on a monthly basis to review, among other things, economic conditions and interest rate outlook, current and projected liquidity needs and capital positions and anticipated changes in the volume and mix of assets and liabilities. At each meeting, the Asset and Liability Committee recommends appropriate strategy changes based on this review. The Chief Financial Officer or his designee is responsible for reviewing and reporting on the effects of the policy implementations and strategies to the Board of Directors at their monthly meetings.

In order to manage its assets and liabilities and achieve the desired liquidity, credit quality, interest rate risk, profitability and capital targets, Great Southern has focused its strategies on originating loans with adjustable rates or loans with fixed rates that mature in less than five years, and managing its deposits and borrowings to establish stable relationships with both retail customers and wholesale funding sources.

At times, depending on the level of general interest rates, the relationship between long- and short-term interest rates, market conditions and competitive factors, we may determine to increase our interest rate risk position somewhat in order to maintain or increase our net interest margin.

The Asset and Liability Committee regularly reviews interest rate risk by forecasting the impact of alternative interest rate environments on net interest income and market value of portfolio equity, which is defined as the net present value of an institution’s existing assets, liabilities and off-balance sheet instruments, and evaluating such impacts against the maximum potential changes in net interest income and market value of portfolio equity that are authorized by the Board of Directors of Great Southern.

In the normal course of business, the Company may use derivative financial instruments (primarily interest rate swaps) from time to time to assist in its interest rate risk management. In 2011, the Company began executing interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. Because the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. These interest rate derivatives result from a service provided to certain qualifying customers and, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. The Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions.

In July 2022, the Company entered into two interest rate swap transactions as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of each swap is $200 million with an effective date of May 1, 2023 and a termination date of May 1, 2028. Under the terms of one swap, the Company receives a fixed rate of interest of 2.628% and pays a floating rate of interest equal to one-month USD-SOFR OIS. Under the terms of the other swap, the Company receives a fixed rate of interest of 5.725% and pays a floating rate of interest equal to one-month USD-Prime. In each case, the floating rate resets monthly and net settlements of interest due to/from the counterparty also occur monthly. To the extent the fixed rate of interest exceeds the floating rate of interest, the Company receives net interest settlements, which are recorded as loan interest income. If the floating rate of interest exceeds the fixed rate of interest (as it does currently), the Company pays net settlements to the counterparty and records those net payments as a reduction of interest income on loans.

We maintain a system of disclosure controls and procedures (as defined in Rule 13(a)-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) that is designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file under the Exchange Act is recorded, processed, summarized and reported accurately and within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate. An evaluation of our disclosure controls and procedures was carried out as of March 31, 2026, under the supervision and with the participation of our principal executive officer, principal financial officer and several other members of our senior management. Our principal executive officer and principal financial officer concluded that, as of March 31, 2026, our disclosure controls and procedures were effective in ensuring that the information we are required to disclose in the reports we file or submit under the Act is (i) accumulated and communicated to our management (including the principal executive officer and principal financial officer) to allow timely decisions regarding required disclosure, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We do not expect that our internal control over financial reporting will prevent all errors and all fraud. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control procedure are met. Because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns in controls or procedures can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any control procedure also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control procedure, misstatements due to error or fraud may occur and not be detected.

There have been no material changes to the risk factors set forth in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.