What changed in this filing

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Item 1. Business

2023-11-29 compared with 2022-11-23 · 43 added, 23 removed, 195 unchanged (25% of the section changed)

12 unchanged sentences

Deposit balances are influenced by a number of factors, including interest rates paid on competing investment products, the level of personal income, and the personal rate of savings within our market areas.

Lending activities are influenced by the demand for housing and business activity levels, our loan underwriting guidelines compared to those of our competitors, as well as interest rate pricing competition from other lending institutions.

Lending activities are influenced by the demand for housing and business activity levels, our loan underwriting guidelines compared to those of our competitors, as well as the interest rate environment and interest rate pricing competition from other lending institutions.

Management Strategy

4 unchanged sentences

We originate these loans primarily for our own portfolio, and we service the loans we originate.

We also purchase one- to four-family loans from correspondent lenders.

In addition, we offer several commercial lending options and participate in commercial loans with other lenders, both locally and outside our market areas.

Historically, we have purchased one- to four-family loans from correspondent lenders but recently have reduced that activity for balance sheet management purposes.

We offer several commercial lending options and participate in commercial loans with other lenders, both locally and outside our market areas.

We offer both fixed- and adjustable-rate products with various terms to maturity and pricing options.

15 unchanged sentences

The Bank continues to invest in its infrastructure, which can increase costs.

Following the pandemic and with high rates of inflation, there is also pressure to increase compensation for the Bank's staff.

• Asset Quality.

9 unchanged sentences

We continue to generate returns to stockholders through dividend payments.

Total dividends declared and paid during fiscal year 2022 were $103.1 million, including a $0.20 per share, or $27.1 million, True Blue® Capitol Dividend paid in June 2022.

The Company's cash dividend payout policy is reviewed quarterly by management and the Board of Directors, and the ability to pay dividends under the policy depends upon a number of factors, including the Company's financial condition and results of operations, anticipated growth opportunities and market and economic conditions, regulatory capital requirements, regulatory limitations on the Bank's ability to make capital distributions to the Company, and the amount of cash at the holding company level.

For fiscal year 2023, it is the current intention of the Board of Directors to continue the payout of 100% of the Company's earnings to its stockholders through regular quarterly dividends and a true-up dividend.

Stockholder value has also been enhanced through stock repurchases.

Total dividends declared and paid during fiscal year 2023 were $83.2 million.

The Company's cash dividend payout policy is reviewed quarterly by management and the Board of Directors, and the ability to pay dividends under the policy depends upon a number of factors, including the Company's financial condition and results of operations, regulatory capital requirements, regulatory limitations on the Bank's ability to make capital distributions to the Company, and the amount of cash at the holding company level.

For fiscal year 2024, it is the current intention of the Board of Directors to pay out the regular quarterly cash dividend of $0.085 per share.

• Interest Rate Risk Management.

4 unchanged sentences

Our corporate office is located in Topeka, Kansas.

We currently have a network of 54 branches (45 traditional branches and nine in-store branches) located in nine counties throughout Kansas and three counties in Missouri.

We currently have a network of 51 branches (46 traditional branches and five in-store branches) located in nine counties throughout Kansas and three counties in Missouri.

We primarily serve the metropolitan areas of Topeka, Wichita, Lawrence, Manhattan, Emporia, and Salina, Kansas and a portion of the metropolitan area of greater Kansas City.

2 unchanged sentences

This has been achieved through strong relationships with real estate agents and our other marketing efforts, which are based on our reputation and competitive pricing.

Competition in originating one- to four-family loans primarily comes from other savings institutions, commercial banks, credit unions, and mortgage bankers.

Competition in originating one- to four-family loans primarily comes from other savings institutions, commercial banks, credit unions, mortgage brokers, and mortgage bankers.

Available Information

12 unchanged sentences

The investment and lending authority of the Bank is prescribed by federal laws and regulations and the Bank is prohibited from engaging in any activities not permitted by such laws and regulations.

The Bank and Company are required to maintain minimum levels of regulatory capital and the Bank is subject to some limitations on capital distributions to the Company.

The Bank and Company are required to maintain minimum levels of regulatory capital and the Bank is subject to limitations on making capital distributions to the Company.

The Company is a unitary savings and loan holding company within the meaning of the Home Owners' Loan Act ("HOLA").

22 unchanged sentences

Regulatory Capital Requirements.

The Bank and Company are required to maintain specified levels of regulatory capital under regulations of the OCC and FRB, respectively.

The Bank and the Company are required to maintain specified levels of regulatory capital under regulations of the OCC and FRB, respectively.

See "Part II, Item 8.

Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 13.

Regulatory Capital Requirements" for additional regulatory capital information, including the Bank's and Company's Community Bank Leverage Ratio (CBLR) as of September 30, 2022.

Regulatory Capital Requirements" for additional regulatory capital information.

At September 30, 2023, the Bank was considered well capitalized under OCC regulations.

The OCC has the ability to establish individual minimum capital requirements for a particular institution which vary from the capital levels that would otherwise be required under the applicable capital regulations based on such factors as concentrations of credit risk, levels of interest rate risk, the risks of non-traditional activities, and other circumstances.

16 unchanged sentences

Under these rules, assessment rates for an institution with total assets of less than $10 billion are determined by weighted average capital adequacy, asset quality, management, earnings, liquidity, and sensitivity (CAMELS) composite ratings and certain financial ratios, and range from 1.5 to 30.0 basis points, subject to certain adjustments.

Assessment rates for an institution with $10 billion or more in total assets are assigned an individual rate based on a scorecard that measures the institution's composite rating, ability to withstand asset-related and funding-related stress and the magnitude of potential losses to the FDIC in the event of failure.

In October 2022, the FDIC adopted a final rule that increased the initial base deposit assessment rate schedule uniformly by two basis points, beginning with the first quarterly assessment period of 2023.

While the Bank exceeded $10 billion in total assets at September 30, 2023, an institution is not considered a large institution under the FDIC assessment regulations until the institution exceeds $10 billion in total assets for four consecutive quarters.

The Bank's total assets were in excess of $10 billion at March 31, 2023, June 30, 2023 and September 30, 2023, but total assets are anticipated to be below $10 billion at December 31, 2023.

For the fiscal year ended September 30, 2023, the Bank paid $4.5 million in FDIC premiums.

Assessment rates are applied to an institution's assessment base, which is its average consolidated total assets minus its average tangible equity during the assessment period.

The FDIC has authority to increase insurance assessments, and any significant increases would have an adverse effect on the operating expenses and results of operations of the Company.

The FDIC has authority to further increase insurance assessments in the future, and any significant increases would have an adverse effect on the operating expenses and results of operations of the Company.

Management cannot predict what assessment rates will be in the future.

In a banking industry emergency, the FDIC may also impose a special assessment.

In October 2022, the FDIC announced that the assessment rate will be increasing from three basis points to five basis points beginning in January 2023.

Insurance of deposits may be terminated by the FDIC upon a finding that an institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.

10 unchanged sentences

The Bank received a satisfactory rating in its most recently completed CRA evaluation.

On October 24, 2023, the federal banking agencies, including the OCC, issued a final rule designed to strengthen and modernize the regulations implementing the CRA.

The changes are designed to encourage banks to expand access to credit, investment and banking services in low- and moderate-income communities, adapt to changes in the banking industry, including mobile and internet banking, provide greater clarity and consistency in the application of the CRA regulations and tailor CRA evaluations and data collection to bank size and type.

Bank Secrecy Act /Anti-Money Laundering Laws.

The Bank is subject to the Bank Secrecy Act and other anti-money laundering laws, including the USA PATRIOT Act of 2001 and regulations thereunder.

These laws and regulations require the Bank to implement policies, procedures, and controls to detect, prevent, and report money laundering and terrorist financing and to verify the identity and source of deposits and wealth of its customers.

These laws and regulations require

the Bank to implement policies, procedures, and controls to detect, prevent, and report money laundering and terrorist financing and to verify the identity and source of deposits and wealth of its customers.

Violations of these laws and regulations can result in substantial civil and criminal sanctions.

4 unchanged sentences

At September 30, 2023, the reserve requirement of zero percent was still in place.

The Bank is authorized to borrow from the Federal Reserve Bank "discount window." An eligible institution need not exhaust other sources of funds before going to the discount window, nor are there restrictions on the purposes for which the

institution can use primary credit.

At September 30, 2023, the Bank had no outstanding borrowings from the discount window.

In March 2023, the FRB created a Bank Term Funding Program ("BTFP") to make additional funding available to eligible depository institutions.

The BTFP offers loans up to one year in length that can be prepaid without penalty.

The amount that can be borrowed under the BTFP is based upon the par value of the securities pledged as collateral to the FRB.

Advances can be requested under the BTFP until at least March 11, 2024.

At September 30, 2023, the Bank had $500.0 million of BTFP borrowings.

In October 2023, the Bank paid off the $500.0 million of BTFP borrowings.

Federal Home Loan Bank System.

1 unchanged sentence

The Federal Home Loan Banks make loans, called advances, to members and provide access to a line of credit in accordance with policies and procedures established by the Board of Directors of FHLB, which are subject to the oversight of the Federal Housing Finance Agency.

At September 30, 2023, the Bank had $2.38 billion of FHLB advances, at par.

See "Part II, Item 8.

Financial Statements and Supplementary Data – Notes to Financial Statements – Note 8.

Deposits and Borrowed Funds" for additional information regarding FHLB advances.

As a member, the Bank is required to purchase and maintain capital stock in FHLB.

13 unchanged sentences

Transactions with Affiliates.

Transactions between the Bank and its affiliates are required to be on terms as favorable to the institution as transactions with non-affiliates, and certain of these transactions are restricted to a percentage of the Bank's capital, and, in the case of loans, require eligible collateral in specified amounts.

capital, and, in the case of loans, require eligible collateral in specified amounts.

In addition, the Bank may not lend to any affiliate engaged in activities not permissible for a bank holding company or purchase or invest in the securities of affiliates.

2 unchanged sentences

The Company files a consolidated federal income tax return.

The Company is no longer subject to federal income tax examination for fiscal years prior to 2019.

The Company has not received notification from the IRS of any potential tax liability for any years still subject to audit.

For federal income tax purposes, the Bank currently reports its income and expenses on the accrual method of accounting and uses a fiscal year ending on September 30 for filing its federal income tax return.

12 unchanged sentences

At September 30, 2023, we had a total of 649 employees, including 57 part-time employees.

The full-time equivalent of our total employees at September 30, 2022 was 707.

The full-time equivalent of our total employees at September 30, 2023 was 632, a decrease from 707 at September 30, 2022.

The decrease was largely attributable to the Bank's improved ability to provide a comprehensive digital experience as a result of its implementation of a new core processing system ("the digital transformation").

A large majority of our customers became comfortable carrying out daily transactions through the adoption of our technology efforts, resulting in decreased walk-in traffic and management's ability to more efficiently staff our branches.

Our new staffing model includes officer-level decision makers at each of our locations, as well as narrowly focused efforts to hire and develop a more universal employee who can not only execute basic teller transactions, but also participate in consumer loan activity.

The overall decrease in headcount was not achieved through layoffs, but rather management's decision to not backfill non-essential employees through natural attrition.

We believe the new staffing model comprised of decision makers and well-rounded employees will add an elevated customer experience for those who still choose to bank with us in-person.

Our employees are not represented by any collective bargaining group.

6 unchanged sentences

Our Company respects, values and encourages diversity in our employees and customers.

We seek to recognize and develop the unique contributions which each individual brings to our Company, and we are fully committed to supporting a culture of diversity as a pillar of our values and our success.

We seek to recognize and develop the unique contributions each individual brings to our Company, and we are fully committed to maintaining a culture of diversity as a pillar of our values and our success.

These efforts are supported by our Board of Directors.

5 unchanged sentences

Leadership development is supported through our Leadership Forum services, on a biannual basis, for mid-level leaders within the organization.

Education for this program is provided by Washburn University's Center for Leadership.

Education for this program is currently provided by Banktastic.

Annual employee educational requirements include targeted diversity, equity and inclusion training for all managers.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business