GREAT SOUTHERN BANCORP, INC. 10-Q

ITEM 1. FINANCIAL STATEMENTS. GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In thousands, except number of shares) ​ ​ ​ ​ ​ ​ ​ ​ ​ SEPTEMBER 30, DECEMBER 31, ​ ​ 2021 ​ 2020 ​ ​ (Unaudited) ASSETS ​ ​ ​ ​ ​ ​ Cash $ 89,263 $ 92,403 Interest-bearing deposits in other financial institutions ​ ​ 679,929 ​ ​ 471,326 Cash and cash equivalents ​ ​ 769,192 ​ ​ 563,729 Available-for-sale securities ​ ​ 432,938 ​ ​ 414,933 Mortgage loans held for sale ​ ​ 10,809 ​ ​ 17,780 Loans receivable, net of allowance for credit losses of $ 63,629 – September 2021; net of allowance for loan losses of $ 55,743 - December 2020 ​ ​ 4,025,686 ​ ​ 4,296,804 Interest receivable ​ ​ 11,290 ​ ​ 12,793 Prepaid expenses and other assets ​ ​ 43,120 ​ ​ 58,889 Other real estate owned and repossessions, net ​ ​ 1,242 ​ ​ 1,877 Premises and equipment, net ​ ​ 134,813 ​ ​ 139,170 Goodwill and other intangible assets ​ ​ 6,239 ​ ​ 6,944 Federal Home Loan Bank stock and other interest-earning assets ​ ​ 6,655 ​ ​ 9,806 Current and deferred income taxes ​ ​ 9,851 ​ ​ 3,695 Total Assets $ 5,451,835 $ 5,526,420 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ Deposits $ 4,510,196 $ 4,516,903 Securities sold under reverse repurchase agreements with customers ​ ​ 167,295 ​ ​ 164,174 Short-term borrowings and other interest-bearing liabilities ​ ​ 1,673 ​ ​ 1,518 Subordinated debentures issued to capital trust ​ ​ 25,774 ​ ​ 25,774 Subordinated notes ​ ​ 73,910 ​ ​ 148,397 Accrued interest payable ​ ​ 1,730 ​ ​ 2,594 Advances from borrowers for taxes and insurance ​ ​ 8,896 ​ ​ 7,536 Accrued expenses and other liabilities ​ ​ 29,368 ​ ​ 29,783 Liability for unfunded commitments ​ ​ 8,352 ​ ​ — Total Liabilities ​ ​ 4,827,194 ​ ​ 4,896,679 ​ ​ ​ ​ ​ ​ ​ Stockholders’ Equity: ​ ​ ​ ​ ​ ​ Capital stock ​ ​ ​ ​ ​ ​ Serial preferred stock - $ .01 par value; authorized 1,000,000 shares; issued and outstanding September 2021 and December 2020 - - 0 - shares ​ ​ — ​ ​ — Common stock, $ .01 par value; authorized 20,000,000 shares; issued and outstanding September 2021 – 13,366,737 shares; December 2020 – 13,752,605 shares ​ ​ 134 ​ ​ 138 Additional paid-in capital ​ ​ 37,468 ​ ​ 35,004 Retained earnings ​ ​ 549,800 ​ ​ 541,448 Accumulated other comprehensive income ​ ​ 37,239 ​ ​ 53,151 Total Stockholders’ Equity ​ ​ 624,641 ​ ​ 629,741 Total Liabilities and Stockholders’ Equity $ 5,451,835 $ 5,526,420 ​ See Notes to Consolidated Financial Statements ​ 1 GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ THREE MONTHS ENDED ​ ​ SEPTEMBER 30, ​ ​ 2021 2020 ​ ​ (Unaudited) INTEREST INCOME ​ ​ ​ ​ ​ ​ Loans $ 46,536 $ 50,476 Investment securities and other ​ ​ 3,104 ​ ​ 3,123 TOTAL INTEREST INCOME ​ ​ 49,640 ​ ​ 53,599 ​ ​ ​ ​ ​ ​ ​ INTEREST EXPENSE ​ ​ ​ ​ ​ ​ Deposits ​ ​ 2,925 ​ ​ 7,094 Short-term borrowings and repurchase agreements ​ ​ 10 ​ ​ 8 Subordinated debentures issued to capital trust ​ ​ 111 ​ ​ 128 Subordinated notes ​ ​ 1,671 ​ ​ 2,201 TOTAL INTEREST EXPENSE ​ ​ 4,717 ​ ​ 9,431 ​ ​ ​ ​ ​ ​ ​ NET INTEREST INCOME ​ ​ 44,923 ​ ​ 44,168 PROVISION (CREDIT) FOR CREDIT LOSSES ON LOANS ​ ​ ( 3,000 ) ​ ​ 4,500 PROVISION FOR UNFUNDED COMMITMENTS ​ ​ 643 ​ ​ — NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR CREDIT LOSSES AND PROVISION FOR UNFUNDED COMMITMENTS ​ ​ 47,280 ​ ​ 39,668 ​ ​ ​ ​ ​ ​ ​ NON-INTEREST INCOME ​ ​ ​ ​ ​ ​ Commissions ​ ​ 325 ​ ​ 318 Overdraft and insufficient funds fees ​ ​ 1,845 ​ ​ 1,635 Point-Of-Sale and ATM fee income and service charges ​ ​ 3,714 ​ ​ 3,057 Net gains on loan sales ​ ​ 2,341 ​ ​ 2,878 Late charges and fees on loans ​ ​ 481 ​ ​ 352 Gain on derivative interest rate products ​ ​ 45 ​ ​ 89 Other income ​ ​ 1,047 ​ ​ 1,137 TOTAL NON-INTEREST INCOME ​ ​ 9,798 ​ ​ 9,466 ​ ​ ​ ​ ​ ​ ​ NON-INTEREST EXPENSE ​ ​ ​ ​ ​ ​ Salaries and employee benefits ​ ​ 17,834 ​ ​ 18,701 Net occupancy and equipment expense ​ ​ 7,244 ​ ​ 7,147 Postage ​ ​ 759 ​ ​ 748 Insurance ​ ​ 775 ​ ​ 753 Advertising ​ ​ 997 ​ ​ 757 Office supplies and printing ​ ​ 200 ​ ​ 271 Telephone ​ ​ 848 ​ ​ 987 Legal, audit and other professional fees ​ ​ 636 ​ ​ 582 Expense on other real estate and repossessions ​ ​ 103 ​ ​ 199 Acquired deposit intangible asset amortization ​ ​ 158 ​ ​ 289 Other operating expenses ​ ​ 1,785 ​ ​ 1,554 TOTAL NON-INTEREST EXPENSE ​ ​ 31,339 ​ ​ 31,988 ​ ​ ​ ​ ​ ​ ​ INCOME BEFORE INCOME TAXES ​ ​ 25,739 ​ ​ 17,146 PROVISION FOR INCOME TAXES ​ ​ 5,375 ​ ​ 3,692 NET INCOME AND NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 20,364 $ 13,454 ​ ​ ​ ​ ​ ​ ​ Basic Earnings Per Common Share $ 1.50 $ 0.96 Diluted Earnings Per Common Share $ 1.49 $ 0.96 ​ ​ ​ ​ ​ ​ ​ Dividends Declared Per Common Share $ 0.36 $ 0.34 ​ See Notes to Consolidated Financial Statements ​ 2 GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ NINE MONTHS ENDED ​ ​ SEPTEMBER 30, ​ ​ 2021 2020 ​ (Unaudited) INTEREST INCOME ​ ​ ​ ​ ​ ​ Loans ​ $ 141,605 ​ $ 155,453 Investment securities and other ​ 9,120 ​ 9,631 TOTAL INTEREST INCOME ​ 150,725 ​ 165,084 ​ ​ ​ ​ ​ ​ ​ INTEREST EXPENSE ​ ​ ​ Deposits ​ 10,604 ​ 26,712 Short-term borrowings and repurchase agreements ​ 29 ​ 667 Subordinated debentures issued to capital trust ​ 337 ​ 511 Subordinated notes ​ 6,060 ​ 4,633 TOTAL INTEREST EXPENSE ​ 17,030 ​ 32,523 ​ ​ ​ ​ ​ ​ ​ NET INTEREST INCOME ​ 133,695 ​ 132,561 PROVISION (CREDIT) FOR CREDIT LOSSES ON LOANS ​ ( 3,700 ) ​ 14,371 CREDIT FOR UNFUNDED COMMITMENTS ​ ( 338 ) ​ — NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR CREDIT LOSSES AND CREDIT FOR UNFUNDED COMMITMENTS ​ 137,733 ​ 118,190 ​ ​ ​ ​ ​ ​ ​ NON-INTEREST INCOME ​ ​ ​ ​ ​ ​ Commissions ​ 977 ​ 760 Overdraft and insufficient funds fees ​ 4,817 ​ 4,712 Point-Of-Sale and ATM fee income and service charges ​ 11,043 ​ 8,878 Net gains on loan sales ​ 7,643 ​ 5,308 Late charges and fees on loans ​ 1,141 ​ 1,175 Gain (loss) on derivative interest rate products ​ 340 ​ ( 424 ) Net realized gains on sales of available-for-sale securities ​ — ​ 78 Other income ​ 3,159 ​ 4,606 TOTAL NON-INTEREST INCOME ​ 29,120 ​ 25,093 ​ ​ ​ ​ ​ ​ ​ NON-INTEREST EXPENSE ​ ​ ​ ​ ​ ​ Salaries and employee benefits ​ 52,887 ​ 53,699 Net occupancy and equipment expense ​ 21,013 ​ 20,619 Postage ​ 2,387 ​ 2,294 Insurance ​ 2,294 ​ 1,668 Advertising ​ 2,187 ​ 1,814 Office supplies and printing ​ 639 ​ 806 Telephone ​ 2,597 ​ 2,904 Legal, audit and other professional fees ​ 1,814 ​ 1,844 Expense on other real estate and repossessions ​ 473 ​ 946 Acquired deposit intangible asset amortization ​ 705 ​ 866 Other operating expenses ​ 4,856 ​ 4,691 TOTAL NON-INTEREST EXPENSE ​ 91,852 ​ 92,151 ​ ​ ​ ​ ​ ​ ​ INCOME BEFORE INCOME TAXES ​ 75,001 ​ 51,132 PROVISION FOR INCOME TAXES ​ 15,655 ​ 9,607 NET INCOME AND NET INCOME AVAILABLE TO COMMON STOCKHOLDERS ​ $ 59,346 ​ $ 41,525 ​ ​ ​ ​ ​ ​ ​ Basic Earnings Per Common Share ​ $ 4.35 ​ $ 2.94 Diluted Earnings Per Common Share ​ $ 4.32 ​ $ 2.93 ​ ​ ​ ​ ​ ​ ​ Dividends Declared Per Common Share ​ $ 1.04 ​ $ 2.02 ​ See Notes to Consolidated Financial Statements 3 GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ THREE MONTHS ENDED ​ ​ SEPTEMBER 30, ​ ​ 2021 2020 ​ ​ (Unaudited) Net Income ​ $ 20,364 ​ $ 13,454 ​ ​ ​ ​ ​ ​ ​ Unrealized depreciation on available-for-sale securities, net of taxes (credit) of $( 1,011 ) and $( 531 ), for 2021 and 2020, respectively ​ ​ ( 3,420 ) ​ ​ ( 1,796 ) ​ ​ ​ ​ ​ ​ ​ Amortization of realized gain on termination of cash flow hedge, net of taxes (credit) of $( 468 ) and $( 467 ), for 2021 and 2020, respectively ​ ​ ( 1,580 ) ​ ​ ( 1,581 ) ​ ​ ​ ​ ​ ​ ​ Comprehensive Income ​ $ 15,364 ​ $ 10,077 ​ ​ ​ ​ ​ ​ ​ ​ ​ NINE MONTHS ENDED ​ ​ SEPTEMBER 30, ​ 2021 2020 ​ (Unaudited) Net Income ​ $ 59,346 ​ $ 41,525 ​ ​ ​ ​ ​ ​ ​ Unrealized appreciation (depreciation) on available-for-sale securities, net of taxes (credit) of $( 3,314 ) and $ 4,482 , for 2021 and 2020, respectively ​ ( 11,222 ) ​ 15,177 ​ ​ ​ ​ ​ ​ ​ Reclassification adjustment for gains included in net income, net of taxes of $ 0 and $ 18 , for 2021 and 2020, respectively ​ — ​ ( 60 ) ​ ​ ​ ​ ​ ​ ​ Change in fair value of cash flow hedge, net of taxes of $ 0 and $ 3,519 , for 2021 and 2020, respectively ​ — ​ 11,914 ​ ​ ​ ​ ​ ​ ​ Amortization of realized gain on termination of cash flow hedge, net of taxes (credit) of $( 1,386 ) and $( 1,075 ), for 2021 and 2020, respectively ​ ( 4,690 ) ​ ( 3,643 ) ​ ​ ​ ​ ​ ​ ​ Comprehensive Income ​ $ 43,434 ​ $ 64,913 ​ See Notes to Consolidated Financial Statements ​ 4 GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ THREE MONTHS ENDED SEPTEMBER 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ Common Additional Retained Comprehensive Treasury ​ ​ ​ ​ Stock Paid-in Capital Earnings Income (Loss) Stock Total ​ (Unaudited) Balance, June 30, 2020 $ 141 $ 34,230 $ 533,346 $ 59,011 $ — $ 626,728 Net income ​ ​ — ​ ​ — ​ ​ 13,454 ​ ​ — ​ ​ — ​ ​ 13,454 Stock issued under Stock Option Plan ​ ​ — ​ ​ 309 ​ ​ — ​ ​ — ​ ​ 37 ​ ​ 346 Common dividends declared, $ 0.34 per share ​ ​ — ​ ​ — ​ ​ ( 4,790 ) ​ ​ — ​ ​ — ​ ​ ( 4,790 ) Other comprehensive loss ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 3,377 ) ​ ​ — ​ ​ ( 3,377 ) Purchase of the Company’s common stock ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 7,718 ) ​ ​ ( 7,718 ) Reclassification of treasury stock per Maryland law ​ ​ ( 2 ) ​ ​ — ​ ​ ( 7,679 ) ​ ​ — ​ ​ 7,681 ​ ​ — Balance, September 30, 2020 $ 139 $ 34,539 $ 534,331 $ 55,634 $ — $ 624,643 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ THREE MONTHS ENDED SEPTEMBER 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ Common Additional Retained Comprehensive Treasury ​ ​ ​ ​ Stock Paid-in Capital Earnings Income (Loss) Stock Total ​ (Unaudited) Balance, June 30, 2021 ​ $ 137 ​ $ 36,880 ​ $ 550,301 ​ $ 42,239 ​ $ — ​ $ 629,557 Net income ​ — ​ — ​ 20,364 ​ — ​ — ​ 20,364 Stock issued under Stock Option Plan ​ — ​ 588 ​ — ​ — ​ 257 ​ 845 Common dividends declared, $ 0.36 per share ​ — ​ — ​ ( 4,812 ) ​ — ​ — ​ ( 4,812 ) Other comprehensive loss ​ — ​ — ​ — ​ ( 5,000 ) ​ — ​ ( 5,000 ) Purchase of the Company’s common stock ​ — ​ — ​ — ​ — ​ ( 16,313 ) ​ ( 16,313 ) Reclassification of treasury stock per Maryland law ​ ( 3 ) ​ — ​ ( 16,053 ) ​ — ​ 16,056 ​ — Balance, September 30, 2021 ​ $ 134 ​ $ 37,468 ​ $ 549,800 ​ $ 37,239 ​ $ — ​ $ 624,641 ​ See Notes to Consolidated Financial Statements ​ 5 GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands, except per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NINE MONTHS ENDED SEPTEMBER 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ ​ Common ​ Additional ​ Retained ​ Comprehensive ​ Treasury ​ ​ ​ ​ Stock Paid-in Capital Earnings Income (Loss) Stock Total ​ ​ (Unaudited) Balance, January 1, 2020 ​ $ 143 ​ $ 33,510 ​ $ 537,167 ​ $ 32,246 ​ $ — ​ $ 603,066 Net income ​ — ​ — ​ 41,525 ​ — ​ — ​ 41,525 Stock issued under Stock Option Plan ​ — ​ 1,029 ​ — ​ — ​ 133 ​ 1,162 Common dividends declared, $ 2.02 per share ​ — ​ — ​ ( 28,631 ) ​ — ​ — ​ ( 28,631 ) Other comprehensive gain ​ — ​ — ​ — ​ 23,388 ​ — ​ 23,388 Purchase of the Company’s common stock ​ — ​ — ​ — ​ — ​ ( 15,867 ) ​ ( 15,867 ) Reclassification of treasury stock per Maryland law ​ ( 4 ) ​ — ​ ( 15,730 ) ​ — ​ 15,734 ​ — Balance, September 30, 2020 ​ $ 139 ​ $ 34,539 ​ $ 534,331 ​ $ 55,634 ​ $ — ​ $ 624,643 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NINE MONTHS ENDED SEPTEMBER 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ ​ Common ​ Additional ​ Retained ​ Comprehensive ​ Treasury ​ ​ ​ ​ Stock Paid-in Capital Earnings Income (Loss) Stock Total ​ ​ (Unaudited) Balance, January 1, 2021 ​ $ 138 ​ $ 35,004 ​ $ 541,448 ​ $ 53,151 ​ $ — ​ $ 629,741 Net income ​ — ​ — ​ 59,346 ​ — ​ — ​ 59,346 Impact of ASU 2016-13 adoption ​ — ​ — ​ ( 14,175 ) ​ — ​ — ​ ( 14,175 ) Stock issued under Stock Option Plan ​ — ​ 2,464 ​ — ​ — ​ 1,074 ​ 3,538 Common dividends declared, $ 1.04 per share ​ — ​ — ​ ( 14,124 ) ​ — ​ — ​ ( 14,124 ) Other comprehensive loss ​ — ​ — ​ — ​ ( 15,912 ) ​ — ​ ( 15,912 ) Purchase of the Company’s common stock ​ — ​ — ​ — ​ — ​ ( 23,773 ) ​ ( 23,773 ) Reclassification of treasury stock per Maryland law ​ ( 4 ) ​ — ​ ( 22,695 ) ​ — ​ 22,699 ​ — Balance, September 30, 2021 ​ $ 134 ​ $ 37,468 ​ $ 549,800 ​ $ 37,239 ​ $ — ​ $ 624,641 ​ See Notes to Consolidated Financial Statements ​ 6 GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NINE MONTHS ENDED ​ SEPTEMBER 30, ​ ​ 2021 2020 ​ ​ (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES ​ ​ ​ ​ ​ ​ Net income $ 59,346 ​ $ 41,525 Proceeds from sales of loans held for sale ​ ​ 280,764 ​ ​ 220,910 Originations of loans held for sale ​ ​ ( 265,557 ) ​ ​ ( 228,836 ) Items not requiring (providing) cash: ​ ​ ​ ​ ​ ​ Depreciation ​ ​ 7,288 ​ ​ 7,478 Amortization ​ ​ 1,330 ​ ​ 1,344 Compensation expense for stock option grants ​ ​ 895 ​ ​ 837 Provision (credit) for credit losses on loans ​ ​ ( 3,700 ) ​ ​ 14,371 Provision (credit) for unfunded commitments ​ ​ ( 338 ) ​ ​ — Net gains on loan sales ​ ​ ( 7,643 ) ​ ​ ( 5,308 ) Net realized gains on sales of available-for-sale securities ​ ​ — ​ ​ ( 78 ) Net (gains) losses on sale of premises and equipment ​ ​ ( 7 ) ​ ​ 19 Net (gains) losses on sale/write-down of other real estate owned and repossessions ​ ​ ( 86 ) ​ ​ 31 Accretion of deferred income, premiums, discounts and other ​ ​ ( 7,515 ) ​ ​ ( 4,076 ) Loss (gain) on derivative interest rate products ​ ​ ( 341 ) ​ ​ 424 Deferred income taxes ​ ​ 1,998 ​ ​ ( 12,400 ) Changes in: ​ ​ ​ ​ ​ ​ Interest receivable ​ ​ 1,503 ​ ​ ( 984 ) Prepaid expenses and other assets ​ ​ 8,263 ​ ​ 311 Accrued expenses and other liabilities ​ ​ 842 ​ ​ ( 1,912 ) Income taxes refundable/payable ​ ​ 705 ​ ​ 2,124 Net cash provided by operating activities ​ ​ 77,747 ​ ​ 35,780 ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM INVESTING ACTIVITIES ​ ​ ​ ​ ​ ​ Net change in loans ​ ​ 350,917 ​ ​ ( 268,313 ) Purchase of loans and loan participations ​ ​ ( 79,403 ) ​ ​ ( 3,675 ) Purchase of premises and equipment ​ ​ ( 3,976 ) ​ ​ ( 6,609 ) Proceeds from sale of premises and equipment ​ ​ 453 ​ ​ 527 Proceeds from sale of other real estate owned and repossessions ​ ​ 1,723 ​ ​ 3,461 Capitalized costs on other real estate owned ​ ​ — ​ ​ ( 126 ) Proceeds from termination of interest rate derivative ​ ​ — ​ ​ 45,864 Proceeds from sales of available-for-sale securities ​ ​ — ​ ​ 19,236 Proceeds from maturities and calls of available-for-sale securities ​ ​ 6,330 ​ ​ 26,940 Principal reductions on mortgage-backed securities ​ ​ 41,615 ​ ​ 19,650 Purchase of available-for-sale securities ​ ​ ( 80,905 ) ​ ​ ( 118,296 ) Redemption of Federal Home Loan Bank stock and change in other interest-earning assets ​ ​ 3,151 ​ ​ 2,437 Net cash provided by (used in) investing activities ​ ​ 239,905 ​ ​ ( 278,904 ) ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM FINANCING ACTIVITIES ​ ​ ​ ​ ​ ​ Net decrease in certificates of deposit ​ ​ ( 335,031 ) ​ ​ ( 210,626 ) Net increase in checking and savings deposits ​ ​ 328,324 ​ ​ 694,288 Net increase (decrease) in short-term borrowings ​ ​ 3,276 ​ ​ ( 156,064 ) Advances from borrowers for taxes and insurance ​ ​ 1,360 ​ ​ 4,357 Proceeds from issuance of subordinated notes ​ ​ — ​ ​ 73,513 Redemption of subordinated notes ​ ​ ( 75,000 ) ​ ​ — Dividends paid ​ ​ ( 13,988 ) ​ ​ ( 28,691 ) Purchase of the Company’s common stock ​ ​ ( 23,773 ) ​ ​ ( 15,867 ) Stock options exercised ​ ​ 2,643 ​ ​ 325 Net cash provided by (used in) financing activities ​ ​ ( 112,189 ) ​ ​ 361,235 ​ ​ ​ ​ ​ ​ ​ INCREASES IN CASH AND CASH EQUIVALENTS ​ ​ 205,463 ​ ​ 118,111 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ​ 563,729 ​ ​ 220,155 CASH AND CASH EQUIVALENTS, END OF PERIOD ​ $ 769,192 ​ $ 338,266 ​ See Notes to Consolidated Financial Statements ​ 7 ​ GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: BASIS OF PRESENTATION The accompanying unaudited interim consolidated financial statements of Great Southern Bancorp, Inc. (the “Company” or “Great Southern”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The financial statements presented herein reflect all adjustments which are, in the opinion of management, necessary to fairly present the financial condition, results of operations, changes in stockholders’ equity and cash flows of the Company as of the dates and for the periods presented. Those adjustments consist only of normal recurring adjustments. Operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the full year. The consolidated statement of financial condition of the Company as of December 31, 2020, has been derived from the audited consolidated statement of financial condition of the Company as of that date. Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on net income. Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (the “SEC”). ​ NOTE 2: NATURE OF OPERATIONS AND OPERATING SEGMENTS The Company operates as a one-bank holding company. The Company’s business primarily consists of the operations of Great Southern Bank (the “Bank”), which provides a full range of financial services to customers primarily located in Missouri, Iowa, Kansas, Minnesota, Nebraska and Arkansas. The Bank also originates commercial loans from lending offices in Atlanta, Ga., Chicago, Ill., Dallas, Texas, Denver, Colo., Omaha, Neb. and Tulsa, Okla. The Company and the Bank are subject to regulation by certain federal and state agencies and undergo periodic examinations by those regulatory agencies. The Company’s banking operation is its only reportable segment. The banking operation is principally engaged in the business of originating residential and commercial real estate loans, construction loans, commercial business loans and consumer loans and funding these loans by attracting deposits from the general public, accepting brokered deposits and borrowing from the Federal Home Loan Bank and others. The operating results of this segment are regularly reviewed by management to make decisions about resource allocations and to assess performance. Selected information is not presented separately for the Company’s reportable segment, as there is no material difference between that information and the corresponding information in the consolidated financial statements. ​ NOTE 3: RECENT ACCOUNTING PRONOUNCEMENTS In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (ASU) No. 2016-13, Financial Instruments – Credit Losses (Topic 326) . The Update amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The Update affects entities holding financial assets and net investments in leases that are not accounted for at fair value through net income. The Update affects loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The Update was set to be effective for the Company on January 1, 2020. During March 2020, pursuant to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and guidance from the SEC and FASB, we elected to delay adoption of the new accounting standard under the Update, which is referred to as the current expected credit loss (“CECL”) methodology. In December 2020, additional legislation was enacted that amended certain provisions of the CARES Act. One of the provisions that was affected by this additional legislation allowed for the election to further delay the adoption of the CECL accounting standard to January 1, 2022. An adoption date of January 1, 2021, was also an acceptable option and we elected January 1, 2021 as our adoption date for the CECL standard. As a result, our 2020 financial statements were prepared under the incurred loss methodology standard for accounting for loan losses. 8 ​ The adoption of the CECL model during the first quarter of 2021 required us to recognize a one-time cumulative adjustment to our allowance for credit losses and a liability for potential losses related to the unfunded portion of our loans and commitments in order to fully transition from the incurred loss model to the CECL model. Upon initial adoption, we increased the balance of our allowance for credit losses related to outstanding loans by $ 11.6 million and created a liability for potential losses related to the unfunded portion of our loans and commitments of $ 8.7 million. The after-tax effect of these adjustments decreased our retained earnings by $ 14.2 million. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . ASU 2020-04 provides relief for companies preparing for discontinuation of interest rates such as the London Interbank Offered Rate (“LIBOR”). LIBOR is a benchmark interest rate referenced in a variety of agreements that are used by numerous entities. After 2021, certain LIBOR rates may no longer be published. As a result, LIBOR is expected to be discontinued as a reference rate. Other interest rates used globally could also be discontinued for similar reasons. ASU 2020-04 provides optional expedients and exceptions to contracts, hedging relationships and other transactions affected by reference rate reform. The main provisions for contract modifications include optional relief by allowing the modification as a continuation of the existing contract without additional analysis and other optional expedients regarding embedded features. Optional expedients for hedge accounting permits changes to critical terms of hedging relationships and to the designated benchmark interest rate in a fair value hedge and also provides relief for assessing hedge effectiveness for cash flow hedges. Companies are able to apply ASU 2020-04 immediately; however, the guidance will only be available for a limited time (generally through December 31, 2022). The application of ASU 2020-04 has not had, and is not expected to have, a material impact on the Company’s consolidated financial statements. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope . ASU 2021-01 clarifies that certain optional expedients and exceptions in ASC 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU 2021-01 also amends the expedients and exceptions in ASC 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. ASU 2021-01 was effective upon issuance and generally can be applied through December 31, 2022. ASU 2021-01 has not had, and is not expected to have, a material impact on the Company’s consolidated financial statements. ​ NOTE 4: EARNINGS PER SHARE ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ ​ 2021 2020 ​ ​ (In Thousands, Except Per Share Data) Basic: ​ ​ ​ ​ ​ ​ Average common shares outstanding ​ 13,534 ​ 14,053 Net income and net income available to common stockholders $ 20,364 $ 13,454 Per common share amount $ 1.50 $ 0.96 ​ ​ ​ ​ ​ ​ ​ Diluted: ​ ​ ​ ​ ​ ​ Average common shares outstanding ​ ​ 13,534 ​ ​ 14,053 Net effect of dilutive stock options – based on the treasury stock method using average market price ​ ​ 92 ​ ​ 32 Diluted common shares ​ ​ 13,626 ​ ​ 14,085 Net income and net income available to common stockholders $ 20,364 $ 13,454 Per common share amount $ 1.49 $ 0.96 ​ 9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, ​ ​ 2021 2020 ​ ​ (In Thousands, Except Per Share Data) Basic: ​ ​ ​ Average common shares outstanding ​ ​ 13,652 ​ 14,119 Net income and net income available to common stockholders ​ $ 59,346 ​ $ 41,525 Per common share amount ​ $ 4.35 ​ $ 2.94 ​ ​ ​ ​ ​ ​ ​ Diluted: ​ ​ Average common shares outstanding ​ 13,652 ​ 14,119 Net effect of dilutive stock options – based on the treasury stock method using average market price ​ 92 ​ 46 Diluted common shares ​ 13,744 ​ 14,165 Net income and net income available to common stockholders ​ $ 59,346 ​ $ 41,525 Per common share amount ​ $ 4.32 ​ $ 2.93 ​ Options outstanding at September 30, 2021 and 2020, to purchase 448,256 and 654,369 shares of common stock, respectively, were not included in the computation of diluted earnings per common share for each of the three month periods because the exercise prices of such options were greater than the average market prices of the common stock for the three months ended September 30, 2021 and 2020, respectively. Options outstanding at September 30, 2021 and 2020, to purchase 448,256 and 650,869 shares of common stock, respectively, were not included in the computation of diluted earnings per common share for the nine month periods because the exercise prices of such options were greater than the average market prices of the common stock for the nine months ended September 30, 2021 and 2020, respectively. ​ NOTE 5: INVESTMENT SECURITIES The amortized cost and fair values of securities classified as available-for-sale were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2021 ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Fair ​ Cost Gains Losses Value ​ (In Thousands) AVAILABLE-FOR-SALE SECURITIES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities $ 157,316 $ 12,402 $ 898 $ 168,820 Agency collateralized mortgage obligations ​ ​ 203,680 ​ ​ 3,688 ​ ​ 1,637 ​ ​ 205,731 States and political subdivisions ​ ​ 38,571 ​ ​ 1,582 ​ ​ 116 ​ ​ 40,037 Small Business Administration securities ​ ​ 17,781 ​ ​ 569 ​ ​ — ​ ​ 18,350 ​ $ 417,348 $ 18,241 $ 2,651 $ 432,938 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Fair ​ Cost Gains Losses Value ​ (In Thousands) AVAILABLE-FOR-SALE SECURITIES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities $ 151,106 $ 19,665 $ 831 $ 169,940 Agency collateralized mortgage obligations ​ ​ 168,472 ​ ​ 8,524 ​ ​ 375 ​ ​ 176,621 States and political subdivisions ​ ​ 45,196 ​ ​ 2,135 ​ ​ 6 ​ ​ 47,325 Small Business Administration securities ​ ​ 20,033 ​ ​ 1,014 ​ ​ — ​ ​ 21,047 ​ $ 384,807 $ 31,338 $ 1,212 $ 414,933 ​ 10 ​ The amortized cost and fair value of available-for-sale securities at September 30, 2021, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized Fair ​ ​ Cost ​ Value ​ ​ (In Thousands) One year or less $ — $ — After one through five years ​ ​ 1,002 ​ ​ 1,045 After five through ten years ​ ​ 9,202 ​ ​ 9,882 After ten years ​ ​ 28,367 ​ ​ 29,110 Securities not due on a single maturity date ​ ​ 378,777 ​ ​ 392,901 ​ $ 417,348 $ 432,938 ​ There were no securities classified as held to maturity at September 30, 2021 or December 31, 2020. Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at September 30, 2021 and December 31, 2020, was approximately $ 99.0 million and $ 24.2 million, respectively, which is approximately 22.9 % and 5.8 % of the Company’s available-for-sale investment portfolio, respectively. Based on an evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes any declines in fair value for these debt securities are temporary. The following table shows the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2021 and December 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2021 ​ ​ Less than 12 Months ​ 12 Months or More ​ Total ​ ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​ Fair ​ Unrealized Description of Securities Value Losses Value Losses Value Losses ​ (In Thousands) Agency mortgage-backed securities $ 10,084 $ ( 898 ) $ — $ — $ 10,084 $ ( 898 ) Agency collateralized mortgage obligations ​ ​ 67,941 ​ ​ ( 963 ) ​ ​ 12,418 ​ ​ ( 674 ) ​ ​ 80,359 ​ ​ ( 1,637 ) States and political subdivisions securities ​ ​ 8,578 ​ ​ ( 116 ) ​ ​ — ​ ​ — ​ ​ 8,578 ​ ​ ( 116 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 86,603 $ ( 1,977 ) $ 12,418 $ ( 674 ) $ 99,021 $ ( 2,651 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ Less than 12 Months ​ 12 Months or More ​ Total ​ ​ Fair ​ Unrealized ​ Fair ​ Unrealized ​ Fair ​ Unrealized Description of Securities Value Losses Value Losses Value Losses ​ (In Thousands) Agency mortgage-backed securities $ 10,279 $ ( 831 ) $ — $ — $ 10,279 $ ( 831 ) Agency collateralized mortgage obligations ​ ​ 12,727 ​ ​ ( 375 ) ​ ​ — ​ ​ — ​ ​ 12,727 ​ ​ ( 375 ) Small Business Administration securities ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — States and political subdivisions securities ​ ​ 1,164 ​ ​ ( 6 ) ​ ​ — ​ ​ — ​ ​ 1,164 ​ ​ ( 6 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 24,170 $ ( 1,212 ) $ — $ — $ 24,170 $ ( 1,212 ) ​ There were no sales of available-for-sale securities during the three or nine months ended September 30, 2021. There were no sales of available-for-sale securities during the three months ended September 30, 2020.Gross gains of $ 78,000 resulting from sales of available-for-sale securities were realized during the nine months ended September 30, 2020. Gains and losses on sales of securities are determined on the specific-identification method. 11 ​ Allowance for Credit Losses On January 1, 2021, the Company began evaluating all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326, Measurement of Credit Losses on Financial Instruments . All of the mortgage-backed, collateralized mortgage, and SBA securities held by the Company are issued by U.S. government-sponsored entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. Likewise, the Company has not experienced historical losses on these types of securities. Accordingly, no allowance for credit losses has been recorded for these securities. Regarding securities issued by state and political subdivisions, management considers the following when evaluating these securities: (i) current issuer bond ratings, (ii) historical loss rates for given bond ratings, (iii) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities, (iv) updated financial information of the issuer, (v) internal forecasts and (vi) whether such securities provide insurance or other credit enhancement or are pre-refunded by the issuers. These securities are highly rated by major rating agencies and have a long history of no credit losses. Likewise, the Company has not experienced historical losses on these types of securities. Accordingly, no allowance for credit losses has been recorded for these securities. Amounts Reclassified Out of Accumulated Other Comprehensive Income. There were no amounts reclassified from accumulated other comprehensive income during the three or nine months ended September 30, 2021 and 2020. ​ NOTE 6: LOANS AND ALLOWANCE FOR CREDIT LOSSES The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , effective January 1, 2021. The guidance replaces the incurred loss methodology with an expected loss methodology that is referred to as the CECL methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables. It also applies to off-balance sheet credit exposures not accounted for as insurance, including loan commitments, standby letters of credits, financial guarantees, and other similar instruments. The Company adopted ASC 326 using the modified retrospective method for loans and off-balance sheet credit exposures. The Company recorded a one-time cumulative-effect adjustment to the allowance for credit losses of $ 11.6 million. This adjustment brought the balance of the allowance for credit losses to $ 67.3 million as of January 1, 2021. In addition, the Company recorded an $ 8.7 million liability for unfunded commitments as of January 1, 2021. The after-tax effect decreased retained earnings by $ 14.2 million. The adjustment was based upon the Company’s analysis of then-current conditions, assumptions and economic forecasts at January 1, 2021. The Company adopted ASC 326 using the prospective transition approach for financial assets purchased with credit deterioration (PCD) that were previously classified as purchased credit impaired (PCI) and accounted for under ASC 310-30. In accordance with the standard, management did not reassess whether PCI assets met the criteria of PCD assets as of the date of adoption. On January 1, 2021, the amortized cost basis of the PCD assets were adjusted to reflect the addition of $ 1.9 million of the allowance for credit losses. Results for reporting periods after December 31, 2020 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. Under the incurred loss model, the Company delayed recognition of losses until it was probable that a loss was incurred. The allowance for loan losses was established as losses were estimated to have occurred through a provision for loan losses charged to earnings. Loan losses were charged against the allowance when management believed the uncollectability of a loan balance was confirmed. The allowance for loan losses was evaluated on a regular basis by management and was based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. The allowance consisted of allocated and general components. The allocated component relates to loans that are classified as impaired. For loans classified as impaired, an allowance is established when the present value of expected future cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. The general component covers non-classified loans and is based on historical charge-off experience and expected loss given default derived from the Company’s internal risk rating process. Results for reporting periods after December 31, 2020 include loans acquired and accounted for under ASC 310-30 net of discount within the loan classes, while for reporting periods prior to January 1, 2021 the loans acquired and accounted for under ASC 310-30 are separate. 12 ​ Beginning on January 1, 2021, the allowance for credit losses is measured using an average historical loss model which 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 and/or TDR loans with a balance greater than or equal to $ 100,000 , are evaluated on an individual basis. For loans evaluated for credit losses on a collective basis, average historical loss rates are calculated for each pool using the Company’s historical net charge-offs (combined charge-offs and recoveries by observable historical reporting period) and outstanding loan balances during a lookback period. Lookback periods can be different based on the individual pool and represent management’s credit expectations for the pool of loans over the remaining contractual life. In certain loan pools, if the Company’s own historical loss rate is not reflective of the loss expectations, the historical loss rate is augmented by industry and peer data. The calculated average net charge-off rate is then adjusted for current conditions and reasonable and supportable forecasts. These adjustments increase or decrease the average historical loss rate to reflect expectations of future losses given economic forecasts of key macroeconomic variables including, but not limited to, unemployment rate, GDP, disposable income and market volatility. The adjustments are based on results from various regression models projecting the impact of the macroeconomic variables to loss rates. The forecast is used for a reasonable and supportable period before reverting to historical averages using a straight-line method. The forecast-adjusted loss rate is applied to the amortized cost of loans over the remaining contractual lives, adjusted for expected prepayments. The contractual term excludes expected extensions, renewals and modifications unless there is a reasonable expectation that a troubled debt restructuring (“TDR”) will be executed. 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. ASU 2016-13 requires an allowance for off balance sheet credit exposures; unfunded lines of credit, undisbursed portions of loans, written residential and commercial commitments, and letters of credit. To determine the amount needed for allowance purposes, a utilization rate is determined either by the model or internally for each pool. Our loss model calculates the reserve on unfunded commitments based upon the utilization rate multiplied by the average loss rate factors in each pool with unfunded and committed balances. The liability for unfunded lending commitments utilizes the same model as the allowance for credit losses on loans; however, the liability for unfunded lending commitments incorporates assumptions for the portion of unfunded commitments that are expected to be funded. 13 ​ Classes of loans at September 30, 2021 and December 31, 2020 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ 2021 ​ 2020 ​ ​ (In Thousands) One- to four-family residential construction $ 47,317 $ 42,793 ​ Subdivision construction ​ ​ 9,532 ​ ​ 30,894 ​ Land development ​ ​ 47,857 ​ ​ 54,010 ​ Commercial construction ​ ​ 1,371,227 ​ ​ 1,212,837 ​ Owner occupied one- to four-family residential ​ ​ 554,886 ​ ​ 470,436 ​ Non-owner occupied one- to four-family residential ​ ​ 120,275 ​ ​ 114,569 ​ Commercial real estate ​ ​ 1,528,425 ​ ​ 1,553,677 ​ Other residential ​ ​ 794,572 ​ ​ 1,021,145 ​ Commercial business ​ ​ 295,696 ​ ​ 370,898 ​ Industrial revenue bonds ​ ​ 14,369 ​ ​ 14,003 ​ Consumer auto ​ ​ 55,294 ​ ​ 86,173 ​ Consumer other ​ ​ 39,012 ​ ​ 40,762 ​ Home equity lines of credit ​ ​ 117,977 ​ ​ 114,689 ​ Loans acquired and accounted for under ASC 310-30, net of discounts (1) ​ ​ — ​ ​ 98,643 ​ ​ ​ ​ 4,996,439 ​ ​ 5,225,529 ​ Undisbursed portion of loans in process ​ ​ ( 898,005 ) ​ ​ ( 863,722 ) ​ Allowance for credit losses ​ ​ ( 63,629 ) ​ ​ ( 55,743 ) ​ Deferred loan fees and gains, net ​ ​ ( 9,119 ) ​ ​ ( 9,260 ) ​ ​ $ 4,025,686 $ 4,296,804 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average interest rate ​ ​ 4.30 % ​ 4.29 % (1) Loans acquired and accounted for under ASC 310-30 of $ 79.5 million have been included in the totals by loan class as of September 30, 2021. At the date of CECL adoption, the Company did not reassess whether PCI loans met the criteria of PCD loans. ​ The following tables present the classes of loans by aging. Loans originally acquired and accounted for under ASC 310-30 of $ 79.5 million have been included in the totals by loan class as of September 30, 2021. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Loans ​ ​ ​ ​ ​ ​ ​ ​ Over 90 ​ ​ ​ ​ ​ ​ ​ Total ​ > 90 Days Past ​ ​ 30-59 Days ​ 60-89 Days ​ Days ​ Total Past ​ ​ ​ ​ Loans ​ Due and ​ ​ Past Due Past Due Past Due Due Current Receivable Still Accruing ​ ​ (In Thousands) One- to four-family residential construction $ 1 $ — $ — $ 1 $ 47,316 $ 47,317 $ — Subdivision construction ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 9,532 ​ ​ 9,532 ​ ​ — Land development ​ ​ 16 ​ ​ — ​ ​ 468 ​ ​ 484 ​ ​ 47,373 ​ ​ 47,857 ​ ​ — Commercial construction ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,371,227 ​ ​ 1,371,227 ​ ​ — Owner occupied one- to four-family residential ​ ​ 223 ​ ​ 49 ​ ​ 2,946 ​ ​ 3,218 ​ ​ 551,668 ​ ​ 554,886 ​ ​ — Non-owner occupied one- to four-family residential ​ ​ — ​ ​ — ​ ​ 59 ​ ​ 59 ​ ​ 120,216 ​ ​ 120,275 ​ ​ — Commercial real estate ​ ​ — ​ ​ — ​ ​ 2,598 ​ ​ 2,598 ​ ​ 1,525,827 ​ ​ 1,528,425 ​ ​ — Other residential ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 794,572 ​ ​ 794,572 ​ ​ — Commercial business ​ ​ 114 ​ ​ — ​ ​ 111 ​ ​ 225 ​ ​ 295,471 ​ ​ 295,696 ​ ​ — Industrial revenue bonds ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 14,369 ​ ​ 14,369 ​ ​ — Consumer auto ​ ​ 306 ​ ​ 45 ​ ​ 58 ​ ​ 409 ​ ​ 54,885 ​ ​ 55,294 ​ ​ — Consumer other ​ ​ 188 ​ ​ 19 ​ ​ 72 ​ ​ 279 ​ ​ 38,733 ​ ​ 39,012 ​ ​ — Home equity lines of credit ​ ​ — ​ ​ 39 ​ ​ 669 ​ ​ 708 ​ ​ 117,269 ​ ​ 117,977 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 848 ​ ​ 152 ​ ​ 6,981 ​ ​ 7,981 ​ ​ 4,988,458 ​ ​ 4,996,439 ​ ​ — Less: FDIC-assisted acquired loans ​ ​ 218 ​ 41 ​ 1,938 ​ 2,197 ​ 77,336 ​ 79,533 ​ — Total $ 630 $ 111 $ 5,043 $ 5,784 $ 4,911,122 $ 4,916,906 $ — ​ 14 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Loans ​ ​ ​ ​ ​ ​ Over 90 ​ ​ ​ ​ ​ Total ​ > 90 Days Past ​ ​ 30-59 Days ​ 60-89 Days ​ Days ​ Total Past ​ ​ ​ ​ Loans ​ Due and ​ ​ Past Due Past Due Past Due Due Current Receivable Still Accruing ​ ​ (In Thousands) One- to four-family residential construction $ 1,365 $ — $ — $ 1,365 $ 41,428 $ 42,793 $ — Subdivision construction ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 30,894 ​ ​ 30,894 ​ ​ — Land development ​ ​ 20 ​ ​ — ​ ​ — ​ ​ 20 ​ ​ 53,990 ​ ​ 54,010 ​ ​ — Commercial construction ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,212,837 ​ ​ 1,212,837 ​ ​ — Owner occupied one- to four-family residential ​ ​ 1,379 ​ ​ 113 ​ ​ 1,502 ​ ​ 2,994 ​ ​ 467,442 ​ ​ 470,436 ​ ​ — Non-owner occupied one- to four-family residential ​ ​ — ​ ​ — ​ ​ 69 ​ ​ 69 ​ ​ 114,500 ​ ​ 114,569 ​ ​ — Commercial real estate ​ ​ — ​ ​ 79 ​ ​ 587 ​ ​ 666 ​ ​ 1,553,011 ​ ​ 1,553,677 ​ ​ — Other residential ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,021,145 ​ ​ 1,021,145 ​ ​ — Commercial business ​ ​ — ​ ​ — ​ ​ 114 ​ ​ 114 ​ ​ 370,784 ​ ​ 370,898 ​ ​ — Industrial revenue bonds ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 14,003 ​ ​ 14,003 ​ ​ — Consumer auto ​ ​ 364 ​ ​ 119 ​ ​ 169 ​ ​ 652 ​ ​ 85,521 ​ ​ 86,173 ​ ​ — Consumer other ​ ​ 443 ​ ​ 7 ​ ​ 94 ​ ​ 544 ​ ​ 40,218 ​ ​ 40,762 ​ ​ — Home equity lines of credit ​ ​ 153 ​ ​ 111 ​ ​ 508 ​ ​ 772 ​ ​ 113,917 ​ ​ 114,689 ​ ​ — Loans acquired and accounted for under ASC 310-30, net of discounts ​ ​ 1,662 ​ ​ 641 ​ ​ 3,843 ​ ​ 6,146 ​ ​ 92,497 ​ ​ 98,643 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 5,386 ​ ​ 1,070 ​ ​ 6,886 ​ ​ 13,342 ​ ​ 5,212,187 ​ ​ 5,225,529 ​ ​ — Less: Loans acquired and accounted for under ASC 310-30, net of discounts ​ ​ 1,662 ​ ​ 641 ​ ​ 3,843 ​ ​ 6,146 ​ ​ 92,497 ​ ​ 98,643 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ 3,724 ​ $ 429 $ 3,043 $ 7,196 $ 5,119,690 $ 5,126,886 $ — ​ Loans are placed on nonaccrual status at 90 days past due and interest is considered a loss unless the loan is well secured and in the process of collection. Payments received on nonaccrual loans are applied to principal until the loans are returned to accrual status. Loans are returned to accrual status when all payments contractually due are brought current, payment performance is sustained for a period of time, generally six months, and future payments are reasonably assured. With the exception of consumer loans, charge-offs on loans are recorded when available information indicates a loan is not fully collectible and the loss is reasonably quantifiable. Consumer loans are charged-off at specified delinquency dates consistent with regulatory guidelines. Non-accruing loans as of December 31, 2020 shown below exclude $ 3.8 million in loans acquired and accounted for under ASC 310-30, while the non-accruing loans as of September 30, 2021 shown below include $ 1.9 million in loans acquired through various FDIC-assisted transactions in the loan classes listed. ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ 2021 ​ 2020 ​ ​ (In Thousands) One- to four-family residential construction ​ $ — ​ $ — Subdivision construction ​ ​ — ​ ​ — Land development ​ ​ 468 ​ ​ — Commercial construction ​ ​ — ​ ​ — Owner occupied one- to four-family residential ​ ​ 2,946 ​ ​ 1,502 Non-owner occupied one- to four-family residential ​ ​ 59 ​ ​ 69 Commercial real estate ​ ​ 2,598 ​ ​ 587 Other residential ​ ​ — ​ ​ — Commercial business ​ ​ 111 ​ ​ 114 Industrial revenue bonds ​ ​ — ​ ​ — Consumer auto ​ ​ 58 ​ ​ 169 Consumer other ​ ​ 72 ​ ​ 94 Home equity lines of credit ​ ​ 669 ​ ​ 508 Total non-accruing loans ​ ​ 6,981 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less: FDIC-assisted acquired loans ​ ​ 1,938 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total non-accruing loans net of FDIC-assisted acquired loans $ 5,043 $ 3,043 ​ No interest income was recorded on these loans for the three and nine months ended September 30, 2021 and 2020, respectively. Nonaccrual loans for which there is no related allowance for credit losses as of September 30, 2021 had an amortized cost of $ 2.7 million. These loans are individually assessed and do not require an allowance due to being adequately collateralized under the collateral-dependent valuation method. A collateral-dependent loan is a financial asset for which the repayment is expected to be 15 ​ provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty based on the Company’s assessment as of the reporting date. Collateral-dependent loans are identified by either a classified risk rating or TDR status and a loan balance equal to or greater than $ 100,000 , including, but not limited to, any loan in process of foreclosure or repossession. The following tables present the activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2021. On January 1, 2021, the Company adopted the CECL methodology, which added $ 11.6 million to the total Allowance for Credit Loss, including $ 1.9 million of remaining discount on loans that were previously accounted for as PCI. During the three months ended September 30, 2021, the Company recorded a credit (negative expense) of $ 3.0 million on its portfolio of outstanding loans, compared to a $ 4.5 million provision expense recorded for the quarter ended September 30, 2020. During the nine months ended September 30, 2021, the Company recorded a credit (negative expense) of $ 3.7 million on its portfolio of outstanding loans, compared to a $ 14.4 million provision expense recorded for the nine months ended September 30, 2020. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One- to Four- ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Family ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential and ​ Other ​ Commercial ​ Commercial ​ Commercial ​ ​ ​ ​ ​ ​ ​ Construction ​ Residential ​ Real Estate ​ Construction ​ Business ​ Consumer ​ Total ​ ​ (In Thousands) Allowance for credit losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, June 30, 2021 ​ $ 9,209 ​ $ 15,299 ​ $ 30,507 ​ $ 2,215 ​ $ 3,932 ​ $ 5,440 ​ $ 66,602 Provision (credit) charged to expense ​ ​ — ​ ​ — ​ ​ ( 3,000 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 3,000 ) Losses charged off ​ ​ ( 37 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 3 ) ​ ​ ( 446 ) ​ ​ ( 486 ) Recoveries ​ ​ 45 ​ ​ — ​ ​ 6 ​ ​ 6 ​ ​ 52 ​ ​ 404 ​ ​ 513 Balance, September 30, 2021 ​ $ 9,217 ​ $ 15,299 ​ $ 27,513 ​ $ 2,221 ​ $ 3,981 ​ $ 5,398 ​ $ 63,629 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, December 31, 2020 ​ $ 4,536 ​ $ 9,375 ​ $ 33,707 ​ $ 3,521 ​ $ 2,390 ​ $ 2,214 ​ $ 55,743 CECL adoption ​ ​ 4,533 ​ ​ 5,832 ​ ​ ( 2,531 ) ​ ​ ( 1,165 ) ​ ​ 1,499 ​ ​ 3,427 ​ ​ 11,595 Balance, January 1, 2021 ​ ​ 9,069 ​ ​ 15,207 ​ ​ 31,176 ​ ​ 2,356 ​ ​ 3,889 ​ ​ 5,641 ​ ​ 67,338 Provision (credit) charged to expense ​ ​ — ​ ​ — ​ ​ ( 3,700 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 3,700 ) Losses charged off ​ ​ ( 179 ) ​ ​ — ​ ​ — ​ ​ ( 154 ) ​ ​ ( 60 ) ​ ​ ( 1,647 ) ​ ​ ( 2,040 ) Recoveries ​ ​ 327 ​ ​ 92 ​ ​ 37 ​ ​ 19 ​ ​ 152 ​ ​ 1,404 ​ ​ 2,031 Balance, September 30, 2021 ​ $ 9,217 ​ $ 15,299 ​ $ 27,513 ​ $ 2,221 ​ $ 3,981 ​ $ 5,398 ​ $ 63,629 ​ The following table presents the activity in the allowance for unfunded commitments by portfolio segment for the three and nine months ended September 30, 2021. On January 1, 2021, the Company adopted the CECL methodology, which created an $ 8.7 million allowance for unfunded commitments. The provision for losses on unfunded commitments for the three and nine months ended September 30, 2021 was a provision expense of $ 643,000 and a credit (negative expense) of $ 338,000 , respectively, as the level and mix of unfunded commitments resulted in a decrease in the required reserve for such potential losses in the nine-month period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One- to Four- ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Family ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential and ​ Other ​ Commercial ​ Commercial ​ Commercial ​ ​ ​ ​ ​ Construction ​ Residential ​ Real Estate ​ Construction ​ Business ​ Consumer ​ Total ​ ​ (In Thousands) Allowance for unfunded commitments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, June 30, 2021 ​ $ 760 ​ $ 4,972 ​ $ 417 ​ $ 354 ​ $ 821 ​ $ 385 ​ $ 7,709 Provision (credit) charged to expense ​ ​ 5 ​ ​ 188 ​ ​ ( 79 ) ​ ​ — ​ ​ 534 ​ ​ ( 5 ) ​ ​ 643 Balance, September 30, 2021 ​ $ 765 ​ $ 5,160 ​ $ 338 ​ $ 354 ​ $ 1,355 ​ $ 380 ​ $ 8,352 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for unfunded commitments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, December 31, 2020 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — CECL adoption ​ 917 ​ ​ 5,227 ​ ​ 354 ​ ​ 910 ​ ​ 935 ​ ​ 347 ​ ​ 8,690 Balance, January 1, 2021 ​ 917 ​ ​ 5,227 ​ ​ 354 ​ ​ 910 ​ ​ 935 ​ ​ 347 ​ ​ 8,690 Provision (credit) charged to expense ​ ( 152 ) ​ ​ ( 67 ) ​ ​ ( 16 ) ​ ​ ( 556 ) ​ ​ 420 ​ ​ 33 ​ ​ ( 338 ) Balance, September 30, 2021 ​ $ 765 ​ $ 5,160 ​ $ 338 ​ $ 354 ​ $ 1,355 ​ $ 380 ​ $ 8,352 ​ 16 ​ The following table presents the activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2020, prepared using the previous GAAP incurred loss method prior to the adoption of ASU 2016-13. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One- to Four- ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Family ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential and ​ Other ​ Commercial ​ Commercial ​ Commercial ​ ​ ​ ​ ​ Construction Residential Real Estate Construction Business Consumer Total ​ (In Thousands) Allowance for loan losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, July 1, 2020 ​ $ 4,492 ​ $ 9,064 ​ $ 28,905 ​ $ 2,793 ​ $ 1,817 ​ $ 2,730 ​ $ 49,801 Provision (credit) charged to expense ​ ​ ( 127 ) ​ ​ ( 344 ) ​ ​ 3,686 ​ ​ 1,222 ​ ​ 55 ​ ​ 8 ​ ​ 4,500 Losses charged off ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1 ) ​ ​ ( 685 ) ​ ​ ( 686 ) Recoveries ​ ​ 67 ​ ​ 11 ​ ​ 2 ​ ​ 12 ​ ​ 35 ​ ​ 496 ​ ​ 623 Balance, September 30, 2020 ​ $ 4,432 ​ $ 8,731 ​ $ 32,593 ​ $ 4,027 ​ $ 1,906 ​ $ 2,549 ​ $ 54,238 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for loan losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, January 1, 2020 ​ $ 4,339 ​ $ 5,153 ​ $ 24,334 ​ $ 3,076 ​ $ 1,355 ​ $ 2,037 ​ $ 40,294 Provision charged to expense ​ 17 ​ ​ 3,401 ​ ​ 8,217 ​ ​ 918 ​ ​ 424 ​ ​ 1,394 ​ ​ 14,371 Losses charged off ​ ( 40 ) ​ ​ — ​ ​ — ​ ​ ( 1 ) ​ ​ ( 10 ) ​ ​ ( 2,538 ) ​ ​ ( 2,589 ) Recoveries ​ 116 ​ ​ 177 ​ ​ 42 ​ ​ 34 ​ ​ 137 ​ ​ 1,656 ​ ​ 2,162 Balance, September 30, 2020 ​ $ 4,432 ​ $ 8,731 ​ $ 32,593 ​ $ 4,027 ​ $ 1,906 ​ $ 2,549 ​ $ 54,238 ​ The following table presents the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of December 31, 2020, prepared using the previous GAAP incurred loss method prior to the adoption of ASU 2016-13. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One- to Four- ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Family ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential and ​ Other ​ Commercial ​ Commercial ​ Commercial ​ ​ ​ ​ Construction Residential Real Estate Construction Business Consumer Total ​ ​ (In Thousands) Allowance for loan losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Individually evaluated for impairment $ 90 ​ $ — ​ $ 445 ​ $ — ​ $ 14 ​ $ 164 ​ $ 713 Collectively evaluated for impairment $ 4,382 ​ $ 9,282 ​ $ 32,937 ​ $ 3,378 ​ $ 2,331 ​ $ 2,040 ​ $ 54,350 Loans acquired and accounted for under ASC 310-30 $ 64 ​ $ 93 ​ $ 325 ​ $ 143 ​ $ 45 ​ $ 10 ​ $ 680 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans ​ ​ ​ ​ ​ ​ Individually evaluated for impairment $ 3,546 ​ $ — ​ $ 3,438 ​ $ — ​ $ 167 ​ $ 1,897 ​ $ 9,048 Collectively evaluated for impairment $ 655,146 ​ $ 1,021,145 ​ $ 1,550,239 ​ $ 1,266,847 ​ $ 384,734 ​ $ 239,727 ​ $ 5,117,838 Loans acquired and accounted for under ASC 310-30 $ 57,113 ​ $ 6,150 ​ $ 24,613 ​ $ 2,551 ​ $ 2,549 ​ $ 5,667 ​ $ 98,643 ​ The portfolio segments used in the preceding tables correspond to the loan classes used in all other tables in Note 6 as follows: ● The one- to four-family residential and construction segment includes the one- to four-family residential construction, subdivision construction, owner occupied one- to four-family residential and non-owner occupied one- to four-family residential classes. ● The other residential segment corresponds to the other residential class. ● The commercial real estate segment includes the commercial real estate and industrial revenue bonds classes. ● The commercial construction segment includes the land development and commercial construction classes. ● The commercial business segment corresponds to the commercial business class. ● The consumer segment includes the consumer auto, consumer other and home equity lines of credit classes. 17 ​ The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of September 30, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2021 ​ ​ Principal Specific ​ ​ Balance ​ Allowance ​ ​ (In Thousands) One- to four-family residential construction ​ $ — ​ $ — Subdivision construction ​ — ​ — Land development ​ 468 ​ — Commercial construction ​ — ​ — Owner occupied one- to four- family residential ​ 2,732 ​ 21 Non-owner occupied one- to four-family residential ​ — ​ — Commercial real estate ​ 4,481 ​ 1,440 Other residential ​ — ​ — Commercial business ​ — ​ — Industrial revenue bonds ​ — ​ — Consumer auto ​ — ​ — Consumer other ​ — ​ — Home equity lines of credit ​ 381 ​ — ​ ​ ​ ​ ​ ​ ​ Total ​ $ 8,062 ​ $ 1,461 ​ The following table presents information pertaining to impaired loans as of December 31, 2020, in accordance with previous GAAP prior to the adoption of ASU 2016-13. A loan is considered impaired, in accordance with the impairment accounting guidance (FASB ASC 310-10-35-16), when based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include not only nonperforming loans or classified loans, but also loans modified in TDRs where concessions have been granted to borrowers experiencing financial difficulties. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or for the Year Ended December 31, 2020 ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ Unpaid ​ ​ ​ Investment ​ Interest ​ ​ Recorded ​ Principal ​ Specific ​ in Impaired ​ Income ​ Balance Balance Allowance Loans Recognized ​ ​ (In Thousands) One- to four-family residential construction ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Subdivision construction ​ 20 ​ 20 ​ — ​ 115 ​ 3 Land development ​ — ​ — ​ — ​ — ​ — Commercial construction ​ — ​ — ​ — ​ — ​ — Owner occupied one- to four- family residential ​ 3,457 ​ 3,776 ​ 90 ​ 2,999 ​ 169 Non-owner occupied one- to four-family residential ​ 69 ​ 106 ​ — ​ 309 ​ 18 Commercial real estate ​ 3,438 ​ 3,472 ​ 445 ​ 3,736 ​ 135 Other residential ​ — ​ — ​ — ​ — ​ — Commercial business ​ 166 ​ 551 ​ 14 ​ 800 ​ 34 Industrial revenue bonds ​ — ​ — ​ — ​ — ​ — Consumer auto ​ 865 ​ 964 ​ 140 ​ 932 ​ 91 Consumer other ​ 403 ​ 552 ​ 19 ​ 298 ​ 47 Home equity lines of credit ​ 630 ​ 668 ​ 5 ​ 550 ​ 36 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ $ 9,048 ​ $ 10,109 ​ $ 713 ​ $ 9,739 ​ $ 533 ​ 18 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2020 ​ ​ ​ ​ Unpaid ​ ​ ​ ​ Recorded ​ Principal ​ Specific ​ Balance Balance Allowance ​ ​ (In Thousands) One- to four-family residential construction ​ $ — ​ $ — ​ $ — Subdivision construction ​ 22 ​ 22 ​ — Land development ​ — ​ — ​ — Commercial construction ​ — ​ — ​ — Owner occupied one- to four- family residential ​ 3,342 ​ 3,460 ​ 78 Non-owner occupied one- to four-family residential ​ 238 ​ 238 ​ — Commercial real estate ​ 3,056 ​ 3,056 ​ 466 Other residential ​ — ​ — ​ — Commercial business ​ 197 ​ 210 ​ 15 Industrial revenue bonds ​ — ​ — ​ — Consumer auto ​ 1,024 ​ 1,040 ​ 166 Consumer other ​ 333 ​ 355 ​ 17 Home equity lines of credit ​ 553 ​ 558 ​ 4 Total ​ $ 8,765 ​ $ 8,939 ​ $ 746 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Nine Months Ended ​ ​ September 30, 2020 ​ September 30, 2020 ​ ​ Average ​ ​ Average ​ ​ ​ Investment ​ Interest ​ Investment ​ Interest ​ ​ in Impaired ​ Income ​ in Impaired ​ Income ​ ​ Loans ​ Recognized ​ Loans ​ Recognized ​ (In Thousands) One- to four-family residential construction ​ $ — ​ $ — ​ $ — ​ $ — Subdivision construction ​ 22 ​ — ​ 147 ​ 3 Land development ​ — ​ — ​ — ​ — Commercial construction ​ — ​ — ​ — ​ — Owner occupied one- to four-family residential ​ 3,146 ​ 44 ​ 2,850 ​ 124 Non-owner occupied one- to four-family residential ​ 267 ​ — ​ 372 ​ 11 Commercial real estate ​ 3,829 ​ 30 ​ 3,946 ​ 97 Other residential ​ — ​ — ​ — ​ — Commercial business ​ 538 ​ 5 ​ 1,008 ​ 30 Industrial revenue bonds ​ — ​ — ​ — ​ — Consumer auto ​ 889 ​ 37 ​ 945 ​ 77 Consumer other ​ 293 ​ 17 ​ 281 ​ 33 Home equity lines of credit ​ 528 ​ 7 ​ 535 ​ 26 Total ​ $ 9,512 ​ $ 140 ​ $ 10,084 ​ $ 401 ​ At December 31, 2020, $ 4.8 million of impaired loans had specific valuation allowances totaling $ 713,000 . 19 ​ TDRs by class are presented below as of September 30, 2021 and December 31, 2020. The December 31, 2020 table excludes $ 1.7 million of FDIC-assisted acquired loans accounted for under ASC 310-30, while the September 30, 2021 table includes the loans acquired through various FDIC-assisted transactions in the loan classes listed. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2021 ​ ​ Accruing TDR Loans ​ Non-accruing TDR Loans ​ Total TDR Loans ​ Number Balance Number Balance Number Balance ​ ​ (In Thousands) Construction and land development 1 ​ $ 16 — ​ $ — 1 ​ $ 16 One- to four-family residential 8 ​ 546 10 ​ 1,052 18 ​ 1,598 Other residential — ​ — — ​ — — ​ — Commercial real estate 2 ​ 1,813 — ​ — 2 ​ 1,813 Commercial business — ​ — 1 ​ 52 1 ​ 52 Consumer 29 ​ 212 15 ​ 78 44 ​ 290 ​ 40 ​ $ 2,587 26 ​ $ 1,182 66 ​ $ 3,769 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ Restructured ​ ​ ​ ​ ​ ​ Troubled Debt ​ Accruing ​ Restructured ​ Non-accruing Interest Troubled Debt ​ ​ (In Thousands) Commercial real estate ​ $ — ​ $ 646 ​ $ 646 One- to four-family residential ​ 778 ​ 1,121 ​ 1,899 Other residential ​ — ​ — ​ — Construction ​ — ​ 20 ​ 20 Commercial ​ 75 ​ 52 ​ 127 Consumer ​ 118 ​ 511 ​ 629 ​ ​ $ 971 ​ $ 2,350 ​ $ 3,321 ​ The following tables present newly restructured loans, which were considered TDRs, during the three and nine months ended September 30, 2021 and 2020, respectively, by type of modification: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ Interest Only Term Combination Modification ​ ​ (In Thousands) One- to four-family residential ​ $ — ​ $ — ​ $ 134 ​ $ 134 Consumer ​ — ​ — ​ 10 ​ 10 ​ ​ $ — ​ $ — ​ $ 144 ​ $ 144 ​ 20 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Interest Only Term Combination Modification ​ (In Thousands) One- to four-family residential ​ $ — ​ $ — ​ $ 647 ​ $ 647 Commercial real estate ​ ​ — ​ ​ — ​ ​ 559 ​ ​ 559 Commercial business ​ ​ — ​ ​ — ​ ​ 22 ​ ​ 22 Consumer ​ ​ — ​ ​ — ​ ​ 1,771 ​ ​ 1,771 ​ ​ $ — ​ $ — ​ $ 2,999 ​ $ 2,999 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Interest Only Term Combination Modification ​ ​ (In Thousands) Commercial real estate ​ $ 1,768 ​ $ — ​ $ — ​ $ 1,768 One- to four-family residential ​ ​ — ​ ​ 157 ​ ​ 134 ​ ​ 291 Consumer ​ — ​ 100 ​ 10 ​ 110 ​ ​ $ 1,768 ​ $ 257 ​ $ 144 ​ $ 2,169 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2020 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Interest Only Term Combination Modification ​ ​ (In Thousands) One- to four-family residential ​ $ — ​ $ — ​ $ 777 ​ $ 777 Commercial real estate ​ ​ — ​ ​ — ​ ​ 559 ​ ​ 559 Commercial business ​ ​ — ​ ​ — ​ ​ 22 ​ ​ 22 Consumer ​ — ​ 16 ​ 1,847 ​ 1,863 ​ ​ $ — ​ $ 16 ​ $ 3,205 ​ $ 3,221 ​ At September 30, 2021, of the $ 3.8 million in TDRs, $ 2.9 million were classified as substandard using the Company’s internal grading system, which is described below. The Company had no TDRs that were modified in the previous 12 months and subsequently defaulted during the nine months ended September 30, 2021. At December 31, 2020, of the $ 3.3 million in TDRs, $ 1.6 million were classified as substandard using the Company’s internal grading system. The Company had no TDRs that were modified in the previous 12 months and subsequently defaulted during the year ended December 31, 2020. During the three and nine months ended September 30, 2021, $ 96,000 and $ 433,000 of loans, respectively, met the criteria for placement back on accrual status. The criteria are generally a minimum of six months of consistent and timely payment performance under original or modified terms. During the three and nine months ended September 30, 2020, one $ 155,000 one- to four-family loan designated as a TDR met the criteria for placement back on accrual status. In addition to the above loans considered TDRs, at September 30, 2021, the Company had remaining eight modified commercial loans with an aggregate principal balance outstanding of $ 38.2 million and 16 modified consumer and mortgage loans with an aggregate principal balance outstanding of $ 1.6 million. At September 30, 2021, the largest total modified loans by collateral type were in the following categories: healthcare - $ 11.6 million; hotel/motel - $ 10.9 million; retail - $ 7.7 million; office - $ 6.9 million. At December 31, 2020, the Company had remaining 65 modified commercial loans with an aggregate principal balance outstanding of $ 232.4 million and 581 modified consumer and mortgage loans with an aggregate principal balance outstanding of $ 18.2 million. The loan modifications discussed in the preceding two paragraphs are within the guidance provided by the CARES Act and subsequent legislation, the federal banking regulatory agencies, the SEC and the FASB; therefore, they are not considered TDRs. A portion of the loans modified at September 30, 2021, may be further modified, and new loans may be modified, within the guidance provided by the CARES Act (and subsequent legislation enacted in December 2020), the federal banking regulatory agencies, the SEC and the FASB if a more severe or lengthier deterioration in economic conditions occurs in future periods. The Company utilizes an internal risk rating system comprised of a series of grades to categorize loans according to perceived risk associated with the expectation of debt repayment. The analysis of the borrower’s ability to repay considers specific information, 21 ​ including but not limited to current financial information, historical payment experience, industry information, collateral levels and collateral types. A risk rating is assigned at loan origination and then monitored throughout the contractual term for possible risk rating changes. Satisfactory loans range from Excellent to Moderate Risk, but generally are loans supported by strong recent financial statements. Character and capacity of borrower are strong, including reasonable project performance, good industry experience, liquidity and/or net worth. Probability of financial deterioration seems unlikely. Repayment is expected from approved sources over a reasonable period of time. Watch loans are identified when the borrower has capacity to perform according to terms; however, elements of uncertainty exist. Margins of debt service coverage may be narrow, historical patterns of financial performance may be erratic, collateral margins may be diminished and the borrower may be a new and/or thinly capitalized company. Some management weakness may also exist, the borrower may have somewhat limited access to other financial institutions, and that ability may diminish in difficult economic times. Special Mention loans have weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of repayment prospects or the Bank’s credit position at some future date. It is a transitional grade that is closely monitored for improvement or deterioration. The Substandard rating is applied to loans where the borrower exhibits well-defined weaknesses that jeopardize its continued performance and are of a severity that the distinct possibility of default exists. Loans are placed on “non-accrual” when management does not expect to collect payments consistent with acceptable and agreed upon terms of repayment. Doubtful loans have all the weaknesses inherent to those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable. Loans considered loss are uncollectable and no longer included as an asset. All loans are analyzed for risk rating updates regularly. For larger loans, rating assessments may be more frequent if relevant information is obtained earlier through debt covenant monitoring or overall relationship management. Smaller loans are monitored as identified by the loan officer based on the risk profile of the individual borrower or if the loan becomes past due related to credit issues. Loans rated Watch, Special Mention, Substandard or Doubtful are subject to quarterly review and monitoring processes. In addition to the regular monitoring performed by the lending personnel and credit committees, loans are subject to review by the credit review department, which verifies the appropriateness of the risk ratings for the loans chosen as part of its risk-based review plan. 22 ​ The following tables present a summary of loans by risk category and past due status separated by origination and loan class as of September 30, 2021. The first table, which is as of September 30, 2021, was prepared using the CECL methodology and includes $ 79.5 million in FDIC-assisted acquired loans included in the loan class categories. The remaining accretable discount of $ 606,000 has not been included in this table. See Note 7 for further discussion of the FDIC-assisted acquired loans and related discount. The undisbursed portions of loans in process have been netted against the gross loan balances for presentation in this table. The second table, which is as of December 31, 2020, was prepared using the previous GAAP incurred loss methodology prior to the adoption of ASU 2016-13. The $ 98.6 million in FDIC-assisted acquired loans are shown as a total, not within the loan class categories. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Term Loans by Origination Year ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ ​ ​ 2021 YTD 2020 2019 2018 2017 Prior Loans Total ​ ​ (In Thousands) One- to four-family residential construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ $ 16,340 ​ $ 6,655 ​ $ 724 ​ $ — ​ $ — ​ $ 5 ​ $ — ​ $ 23,724 Watch (5) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Special Mention (6) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Classified (7-9) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Total ​ 16,340 ​ 6,655 ​ 724 ​ — ​ — ​ 5 ​ — ​ 23,724 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Subdivision construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ 4,928 ​ 1,005 ​ 237 ​ 193 ​ 791 ​ 1,018 ​ — ​ 8,172 Watch (5) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Special Mention (6) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Classified (7-9) ​ — ​ — ​ — ​ — ​ — ​ 16 ​ — ​ 16 Total ​ 4,928 ​ 1,005 ​ 237 ​ 193 ​ 791 ​ 1,034 ​ — ​ 8,188 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Land development construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ 4,139 ​ 19,792 ​ 11,203 ​ 2,609 ​ 3,025 ​ 6,069 ​ 555 ​ 47,392 Watch (5) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Special Mention (6) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Classified (7-9) ​ — ​ — ​ — ​ — ​ — ​ — ​ 468 ​ 468 Total ​ 4,139 ​ 19,792 ​ 11,203 ​ 2,609 ​ 3,025 ​ 6,069 ​ 1,023 ​ 47,860 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other Construction ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ 74,248 ​ 304,277 ​ 161,445 ​ 41,036 ​ — ​ — ​ — ​ 581,006 Watch (5) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Special Mention (6) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Classified (7-9) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Total ​ 74,248 ​ 304,277 ​ 161,445 ​ 41,036 ​ — ​ — ​ — ​ 581,006 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One- to four-family residential ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ 186,774 ​ 183,093 ​ 104,687 ​ 56,016 ​ 15,203 ​ 123,625 ​ 1,745 ​ 671,143 Watch (5) ​ — ​ — ​ 1,364 ​ 132 ​ — ​ 270 ​ 72 ​ 1,838 Special Mention (6) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Classified (7-9) ​ — ​ — ​ 136 ​ — ​ 195 ​ 1,740 ​ 89 ​ 2,160 Total ​ 186,774 ​ 183,093 ​ 106,187 ​ 56,148 ​ 15,398 ​ 125,635 ​ 1,906 ​ 675,141 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other residential ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ 30,316 ​ 59,009 ​ 174,613 ​ 289,348 ​ 137,820 ​ 80,015 ​ 8,707 ​ 779,828 Watch (5) ​ — ​ — ​ — ​ — ​ — ​ 3,457 ​ — ​ 3,457 Special Mention (6) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Classified (7-9) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Total ​ 30,316 ​ 59,009 ​ 174,613 ​ 289,348 ​ 137,820 ​ 83,472 ​ 8,707 ​ 783,285 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ 48,732 ​ 136,508 ​ 229,604 ​ 233,465 ​ 216,067 ​ 573,099 ​ 27,692 ​ 1,465,167 Watch (5) ​ — ​ 379 ​ 582 ​ — ​ 11,555 ​ 25,666 ​ — ​ 38,182 Special Mention (6) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Classified (7-9) ​ — ​ — ​ — ​ — ​ — ​ 4,266 ​ — ​ 4,266 Total ​ 48,732 ​ 136,887 ​ 230,186 ​ 233,465 ​ 227,622 ​ 603,031 ​ 27,692 ​ 1,507,615 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial business ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ 58,592 ​ 26,976 ​ 27,366 ​ 16,937 ​ 25,110 ​ 58,475 ​ 46,223 ​ 259,679 Watch (5) ​ — ​ — ​ — ​ — ​ — ​ 77 ​ — ​ 77 Special Mention (6) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Classified (7-9) ​ — ​ — ​ — ​ — ​ — ​ 52 ​ 59 ​ 111 Total ​ 58,592 ​ 26,976 ​ 27,366 ​ 16,937 ​ 25,110 ​ 58,604 ​ 46,282 ​ 259,867 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ 16,323 ​ 13,106 ​ 8,724 ​ 11,403 ​ 5,349 ​ 28,451 ​ 128,133 ​ 211,489 Watch (5) ​ — ​ — ​ — ​ 22 ​ 6 ​ 15 ​ 29 ​ 72 Special Mention (6) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Classified (7-9) ​ — ​ 17 ​ — ​ 14 ​ 59 ​ 327 ​ 377 ​ 794 Total ​ 16,323 ​ 13,123 ​ 8,724 ​ 11,439 ​ 5,414 ​ 28,793 ​ 128,539 ​ 212,355 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Combined ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ 440,392 ​ 750,421 ​ 718,603 ​ 651,007 ​ 403,365 ​ 870,757 ​ 213,055 ​ 4,047,600 Watch (5) ​ — ​ 379 ​ 1,946 ​ 154 ​ 11,561 ​ 29,485 ​ 101 ​ 43,626 Special Mention (6) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Classified (7-9) ​ — ​ 17 ​ 136 ​ 14 ​ 254 ​ 6,401 ​ 993 ​ 7,815 Total ​ $ 440,392 ​ $ 750,817 ​ $ 720,685 ​ $ 651,175 ​ $ 415,180 ​ $ 906,643 ​ $ 214,149 ​ $ 4,099,041 ​ 23 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ ​ ​ ​ ​ Special ​ ​ ​ ​ ​ ​ ​ Satisfactory Watch Mention Substandard Doubtful Total ​ ​ (In Thousands) One- to four-family residential construction ​ $ 41,428 ​ $ 1,365 ​ $ — ​ $ — ​ $ — ​ $ 42,793 Subdivision construction ​ 30,874 ​ — ​ — ​ 20 ​ — ​ 30,894 Land development ​ 54,010 ​ — ​ — ​ — ​ — ​ 54,010 Commercial construction ​ 1,212,837 ​ — ​ — ​ — ​ — ​ 1,212,837 Owner occupied one- to-four-family residential ​ 467,855 ​ 216 ​ — ​ 2,365 ​ — ​ 470,436 Non-owner occupied one- to-four-family residential ​ 114,176 ​ 324 ​ — ​ 69 ​ — ​ 114,569 Commercial real estate ​ 1,498,031 ​ 52,208 ​ — ​ 3,438 ​ — ​ 1,553,677 Other residential ​ 1,017,648 ​ 3,497 ​ — ​ — ​ — ​ 1,021,145 Commercial business ​ 363,681 ​ 7,102 ​ — ​ 115 ​ — ​ 370,898 Industrial revenue bonds ​ 14,003 ​ — ​ — ​ — ​ — ​ 14,003 Consumer auto ​ 85,657 ​ 5 ​ — ​ 511 ​ — ​ 86,173 Consumer other ​ 40,514 ​ 2 ​ — ​ 246 ​ — ​ 40,762 Home equity lines of credit ​ 114,049 ​ 39 ​ — ​ 601 ​ — ​ 114,689 Loans acquired and accounted for under ASC 310‑30, net of discounts ​ 98,633 ​ — ​ — ​ 10 ​ — ​ 98,643 Total ​ $ 5,153,396 ​ $ 64,758 ​ $ — ​ $ 7,375 ​ $ — ​ $ 5,225,529 ​ ​ ​ NOTE 7: FDIC-ASSISTED ACQUIRED LOANS On March 20, 2009, Great Southern Bank entered into a purchase and assumption agreement with loss share with the Federal Deposit Insurance Corporation (FDIC) to assume all of the deposits (excluding brokered deposits) and acquire certain assets of TeamBank, N.A., a full service commercial bank headquartered in Paola, Kansas. The related loss sharing agreement was terminated early, effective April 26, 2016, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. On September 4, 2009, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Vantus Bank, a full service thrift headquartered in Sioux City, Iowa. The related loss sharing agreement was terminated early, effective April 26, 2016, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. On October 7, 2011, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Sun Security Bank, a full service bank headquartered in Ellington, Missouri. The related loss sharing agreement was terminated early, effective April 26, 2016, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. On April 27, 2012, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Inter Savings Bank, FSB (“InterBank”), a full service bank headquartered in Maple Grove, Minnesota. The related loss sharing agreement was terminated early, effective June 9, 2017, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. On June 20, 2014, Great Southern Bank entered into a purchase and assumption agreement with the FDIC to purchase a substantial portion of the loans and investment securities, as well as certain other assets, and assume all of the deposits, as well as certain other liabilities, of Valley Bank, a full-service bank headquartered in Moline, Illinois, with significant operations in Iowa. This transaction did not include a loss sharing agreement. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. 24 ​ The following table presents the balances of the acquired loans related to the various FDIC-assisted transactions at September 30, 2021 and December 31, 2020. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sun Security ​ ​ ​ ​ ​ TeamBank Vantus Bank Bank InterBank Valley Bank ​ ​ (In Thousands) September 30, 2021 ​ ​ ​ ​ ​ Gross loans receivable ​ $ 4,273 ​ $ 5,972 ​ $ 9,760 ​ $ 34,812 ​ $ 25,322 Balance of accretable discount due to change in expected losses ​ ( 71 ) ​ ​ ( 22 ) ​ ​ ( 80 ) ​ ​ ( 157 ) ​ ​ ( 276 ) Net carrying value of loans receivable ​ $ 4,202 ​ $ 5,950 ​ $ 9,680 ​ $ 34,655 ​ $ 25,046 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ ​ ​ ​ Gross loans receivable ​ $ 5,393 ​ $ 8,052 ​ $ 13,395 ​ $ 44,215 ​ $ 31,515 Balance of accretable discount due to change in expected losses ​ ( 97 ) ​ ( 35 ) ​ ( 180 ) ​ ( 1,079 ) ​ ( 612 ) Expected loss remaining ​ ( 30 ) ​ ( 13 ) ​ ( 104 ) ​ ( 1,079 ) ​ ( 699 ) Net carrying value of loans receivable ​ $ 5,266 ​ $ 8,004 ​ $ 13,111 ​ $ 42,057 ​ $ 30,204 ​ Fair Value and Expected Cash Flows . At the times of these acquisitions, the Company determined the fair value of the loan portfolios based on several assumptions. Factors considered in the valuations were projected cash flows for the loans, type of loan and related collateral, classification status, fixed or variable interest rate, term of loan, current discount rates and whether or not the loan was amortizing. Loans were grouped together according to similar characteristics and were treated in the aggregate when applying various valuation techniques. Management also estimated the amount of credit losses that were expected to be realized for the loan portfolios. The discounted cash flow approach was used to value each pool of loans. For non-performing loans, fair value was estimated by calculating the present value of the recoverable cash flows using a discount rate based on comparable corporate bond rates. The amount of the estimated cash flows expected to be received from the acquired loan pools in excess of the fair values recorded for the loan pools is referred to as the accretable yield. The accretable yield is recognized as interest income over the estimated lives of the loans. Because the balance of these adjustments to accretable yield will be recognized generally over the remaining lives of the loan pools, they will impact future periods as well. As of January 1, 2021, we adopted the new accounting standard related to accounting for credit losses. With the adoption of this standard, discounts are no longer reclassified from non-accretable to accretable. All adjustments made prior to January 1, 2021 will continue to be accreted to interest income. As of September 30, 2021, the remaining accretable yield adjustment that will affect interest income was $ 606,000 . Of the remaining adjustments affecting interest income, we expect to recognize approximately $ 178,000 of interest income during the remainder of 2021. The impact of these adjustments on the Company’s financial results is shown below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Three Months Ended ​ ​ September 30, 2021 ​ September 30, 2020 ​ ​ (In Thousands, Except Per Share Data and Basis Points Data) Impact on net interest income/ ​ ​ net interest margin (in basis points) ​ $ 279 2 bps ​ $ 1,229 9 bps Net impact to pre-tax income ​ $ 279 ​ ​ ​ $ 1,229 Net impact net of taxes ​ $ 215 ​ ​ ​ $ 949 Impact to diluted earnings per share ​ $ 0.02 ​ ​ ​ $ 0.07 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended Nine Months Ended ​ ​ September 30, 2021 ​ September 30, 2020 ​ ​ (In Thousands, Except Per Share Data and Basis Points Data) Impact on net interest income/ ​ ​ net interest margin (in basis points) ​ $ 1,398 3 bps ​ $ 4,632 12 bps Net impact to pre-tax income ​ $ 1,398 ​ $ 4,632 Net impact net of taxes ​ $ 1,079 ​ $ 3,576 Impact to diluted earnings per share ​ $ 0.08 ​ $ 0.25 ​ ​ 25 ​ NOTE 8: OTHER REAL ESTATE OWNED AND REPOSSESSIONS Major classifications of other real estate owned were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ 2021 ​ 2020 ​ ​ (In Thousands) Foreclosed assets held for sale and repossessions ​ ​ One- to four-family construction ​ $ — ​ $ — Subdivision construction ​ — ​ 263 Land development ​ — ​ 250 Commercial construction ​ — ​ — One- to four-family residential ​ — ​ 111 Other residential ​ — ​ — Commercial real estate ​ — ​ — Commercial business ​ — ​ — Consumer ​ 152 ​ 153 ​ ​ 152 ​ 777 Foreclosed assets acquired through FDIC-assisted transactions, net of discounts ​ 805 ​ 446 ​ ​ ​ ​ ​ ​ ​ Foreclosed assets held for sale and repossessions, net ​ 957 ​ 1,223 ​ ​ ​ ​ ​ ​ ​ Other real estate owned not acquired through foreclosure ​ 285 ​ 654 ​ ​ ​ ​ ​ ​ ​ Other real estate owned and repossessions ​ $ 1,242 ​ $ 1,877 ​ At September 30, 2021 other real estate owned not acquired through foreclosure included three properties, all of which were branch locations that were closed and held for sale. At December 31, 2020, other real estate owned not acquired through foreclosure included seven properties, all of which were branch locations that were closed and held for sale. At September 30, 2021, residential mortgage loans totaling $ 39,000 were in the process of foreclosure, none of which were acquired loans related to FDIC-assisted transactions. Pursuant to Section 4022 of the CARES Act, the Company suspended all foreclosure proceedings. Under this provision, no mortgage servicer of any federally-backed mortgage loan was permitted to initiate any foreclosure process, whether judicial or non-judicial, move for a foreclosure judgment or order of sale, or execute a foreclosure- related eviction or foreclosure sale for a 60-day period, beginning March 18, 2020. This provision’s foreclosure moratorium was subsequently extended through July 31, 2021, and its eviction moratorium was subsequently extended through September 30, 2021. At December 31, 2020, residential mortgage loans totaling $ 602,000 were in the process of foreclosure, $ 518,000 of which were acquired loans related to FDIC-assisted transactions. Expenses applicable to other real estate owned and repossessions included the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ September 30, ​ 2021 2020 ​ ​ (In Thousands) Net gains on sales of other real estate owned and repossessions ​ $ ( 1 ) $ ( 348 ) Valuation write-downs ​ — ​ 269 Operating expenses, net of rental income ​ 104 ​ 278 ​ ​ $ 103 ​ $ 199 ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended ​ ​ September 30, ​ ​ 2021 2020 ​ ​ (In Thousands) Net gains on sales of other real estate owned and repossessions ​ $ ( 169 ) ​ $ ( 450 ) Valuation write-downs ​ 83 ​ 482 Operating expenses, net of rental income ​ 559 ​ 914 ​ ​ $ 473 ​ $ 946 ​ 26 ​ ​ NOTE 9: PREMISES AND EQUIPMENT Major classifications of premises and equipment, stated at cost, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ 2021 2020 ​ ​ (In Thousands) Land $ 40,224 ​ $ 40,652 Buildings and improvements ​ 101,318 ​ 100,187 Furniture, fixtures and equipment ​ 58,129 ​ 59,226 Operating leases right of use asset ​ 7,937 ​ 8,536 ​ ​ 207,608 ​ 208,601 Less accumulated depreciation ​ 72,795 ​ 69,431 ​ ​ $ 134,813 ​ $ 139,170 ​ Leases. The Company adopted ASU 2016-02, Leases (Topic 842) , on January 1, 2019, using the modified retrospective transition approach whereby comparative periods were not restated. The Company also elected certain relief options under the ASU, including the option not to recognize right of use asset and lease liabilities that arise from short-term leases (leases with terms of twelve months or less). Adoption of this ASU resulted in the Company initially recognizing a right of use asset and corresponding lease liability of $ 9.5 million as of January 1, 2019. The amount of the right of use asset and corresponding lease liability will fluctuate based on the Company’s lease terminations, new leases and lease modifications and renewals. As of September 30, 2021, the lease right of use asset value was $ 7.9 million and the corresponding lease liability was $ 8.1 million. As of December 31, 2020, the lease right of use asset value was $ 8.5 million and the corresponding lease liability was $ 8.7 million. All of our leases are classified as operating leases (as they were prior to January 1, 2019), and therefore were previously not recognized on the Company’s consolidated statements of financial condition. With the adoption of ASU 2016-02, these operating leases are now included as a right of use asset in the premises and equipment line item on the Company’s consolidated statements of financial condition. The corresponding lease liability is included in the accrued expenses and other liabilities line item on the Company’s consolidated statements of financial condition. Because these leases are classified as operating leases, the adoption of the new standard did not have a material effect on lease expense on the Company’s consolidated statements of income. ASU 2016-02 provides a number of optional practical expedients in transition. The Company has elected the “package of practical expedients,” which permits the Company not to reassess under the new standard the prior conclusions about lease identification, lease classification and initial direct costs. The Company also elected the use of the hindsight, a practical expedient which permits the use of information available after lease inception to determine the lease term via the knowledge of renewal options exercised not available as of the lease’s inception. The practical expedient pertaining to land easements is not applicable to the Company. ASU 2016-02 also requires certain other accounting elections. The Company elected the short-term lease recognition exemption for all leases that qualify, meaning those with terms under twelve months. Right of use assets or lease liabilities are not to be recognized for short-term leases. The Company also elected the practical expedient to not separate lease and non-lease components for all leases. The Company’s short-term leases related to offsite ATMs have both fixed and variable lease payment components, based on the number of transactions at the various ATMs. The variable portion of these lease payments is not material and the total lease expense related to ATMs for the three months ended September 30, 2021 and 2020 was $ 79,000 and $ 76,000 , respectively. The total lease expense related to ATMs for the nine months ended September 30, 2021 and 2020, was $ 230,000 and $ 202,000 , respectively. 27 ​ The calculated amounts of the right of use assets and lease liabilities in the table below are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew the extended term in the calculation of the right of use asset and lease liability. Regarding the discount rate, the ASU requires the use of the rate implicit in the lease at the Company’s discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right of use asset and lease liability. Regarding the discount rate, the ASU requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception over a similar term. The discount rate utilized was the FHLBank borrowing rate for the term corresponding to the expected term of the lease. The remaining expected lease terms range from 1.5 years to 17.2 years with a weighted-average lease term of 9.5 years . The weighted-average discount rate was 3.44 %. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or For the Three Months Ended ​ September 30, 2021 September 30, 2020 ​ ​ (In Thousands) Statement of Financial Condition ​ ​ ​ Operating leases right of use asset ​ $ 7,937 ​ $ 8,758 Operating leases liability ​ $ 8,098 ​ $ 8,869 ​ ​ ​ ​ ​ ​ ​ Statement of Income ​ ​ ​ ​ Operating lease costs classified as occupancy and equipment expense (includes short-term lease costs and amortization of right of use asset) ​ $ 386 ​ $ 397 ​ ​ ​ ​ ​ ​ ​ Supplemental Cash Flow Information ​ ​ ​ ​ Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ ​ Operating cash flows from operating leases ​ $ 375 ​ $ 391 Right of use assets obtained in exchange for lease obligations: ​ ​ ​ ​ Operating leases ​ ​ 74 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or For the Nine Months Ended ​ ​ September 30, 2021 September 30, 2020 ​ ​ (In Thousands) Statement of Financial Condition ​ ​ ​ ​ ​ Operating leases right of use asset ​ $ 7,937 ​ $ 8,758 Operating leases liability ​ $ 8,098 ​ $ 8,869 ​ ​ ​ ​ ​ ​ ​ Statement of Income ​ ​ ​ ​ ​ ​ Operating lease costs classified as occupancy and equipment expense (includes short-term lease costs and amortization of right of use asset) ​ $ 1,153 ​ $ 1,182 ​ ​ ​ ​ ​ ​ ​ Supplemental Cash Flow Information ​ ​ ​ ​ ​ Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ ​ ​ Operating cash flows from operating leases ​ $ 1,117 ​ $ 1,149 Right of use assets obtained in exchange for lease obligations: ​ ​ ​ ​ ​ Operating leases ​ 74 ​ $ 972 ​ 28 ​ For the three months ended September 30, 2021 and 2020, lease expense was $ 386,000 and $ 397,000 , respectively. For both the nine months ended September 30, 2021 and 2020, lease expense was $ 1.2 million. At September 30, 2021, future expected lease payments for leases with terms exceeding one year were as follows (In Thousands): ​ ​ ​ ​ ​ 2021 ​ $ 284 2022 ​ 1,116 2023 ​ 1,088 2024 ​ 1,005 2025 ​ 979 2026 ​ ​ 912 Thereafter ​ 4,015 ​ ​ ​ ​ Future lease payments expected ​ 9,399 ​ ​ ​ ​ Less interest portion of lease payments ​ ( 1,301 ) ​ ​ ​ ​ Lease liability ​ $ 8,098 ​ The Company does not sublease any of its leased facilities; however, it does lease to other parties portions of facilities that it owns. In terms of being the lessor in these circumstances, all of these lease agreements are classified as operating leases. In the three months ended September 30, 2021 and 2020, income recognized from these lessor agreements was $ 323,000 and $ 294,000 , respectively, and was included in occupancy and equipment expense. In the nine months ended September 30, 2021 and 2020, income recognized from these lessor agreements was $ 903,000 and $ 864,000 , respectively, and was included in occupancy and equipment expense. ​ NOTE 10: DEPOSITS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ 2021 2020 ​ ​ (In Thousands) Time Deposits: ​ ​ ​ 0.00 % - 0.99 % ​ $ 881,699 ​ $ 803,737 1.00 % - 1.99 % ​ 97,480 ​ 425,061 2.00 % - 2.99 % ​ 64,392 ​ 143,417 3.00 % and above ​ 12,189 ​ 18,577 Total time deposits (weighted average rate 0.66 % and 1.00 %) ​ 1,055,760 ​ 1,390,792 Non-interest-bearing demand deposits ​ 1,055,640 ​ 984,798 Interest-bearing demand and savings deposits (Weighted average rate 0.13 % and 0.22 %) ​ 2,398,796 ​ 2,141,313 Total Deposits ​ $ 4,510,196 ​ $ 4,516,903 ​ ​ ​ NOTE 11: ADVANCES FROM FEDERAL HOME LOAN BANK At September 30, 2021 and December 31, 2020, there were no outstanding term advances from the Federal Home Loan Bank of Des Moines (FHLBank advances). There were no overnight funds from the Federal Home Loan Bank of Des Moines as of September 30, 2021 or December 31, 2020. NOTE 12: SECURITIES SOLD UNDER REVERSE REPURCHASE AGREEMENTS AND SHORT-TERM BORROWINGS ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ 2021 ​ 2020 ​ ​ (In Thousands) Notes payable – Community Development Equity Funds $ 1,183 $ 1,518 Other interest bearing liabilities ​ 490 ​ — Securities sold under reverse repurchase agreements ​ 167,295 ​ 164,174 ​ ​ $ 168,968 ​ $ 165,692 ​ 29 ​ The Bank enters into sales of securities under agreements to repurchase (reverse repurchase agreements). Reverse repurchase agreements are treated as financings, and the obligations to repurchase securities sold are reflected as a liability in the statements of financial condition. The dollar amount of securities underlying the agreements remains in the asset accounts. Securities underlying the agreements are being held by the Bank during the agreement period. All agreements are written on a term of one month or less. The following table represents the Company’s securities sold under reverse repurchase agreements, by collateral type and remaining contractual maturity. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2021 ​ December 31, 2020 ​ ​ Overnight and ​ Overnight and ​ Continuous Continuous ​ ​ (In Thousands) Mortgage-backed securities – GNMA, FNMA, FHLMC ​ $ 167,295 $ 164,174 ​ ​ ​ NOTE 13: SUBORDINATED NOTES On August 8, 2016, the Company completed the public offering and sale of $ 75.0 million of its subordinated notes. The notes were due August 15, 2026 and had a fixed interest rate of 5.25 % until August 15, 2021, at which time the rate was to become floating at a rate equal to three-month LIBOR plus 4.087 %. The notes were sold at par, resulting in net proceeds, after underwriting discounts and commissions, legal, accounting and other professional fees, of approximately $ 73.5 million. Total debt issuance costs of approximately $ 1.5 million were deferred and amortized over the five-year expected life of the notes. On August 15, 2021, in accordance with the terms of the notes, the Company redeemed all $ 75.0 million aggregate principal amount of the notes at a redemption price equal to 100 % of their principal amount, plus accrued and unpaid interest. On June 10, 2020, the Company completed the public offering and sale of $ 75.0 million of its subordinated notes. The notes are due June 15, 2030, and have a fixed interest rate of 5.50 % until June 15, 2025, at which time the rate becomes floating at a rate expected to be equal to three-month term Secured Overnight Financing Rate (SOFR) plus 5.325 %. The Company may call the notes at par beginning on June 15, 2025, and on any scheduled interest payment date thereafter. The notes were sold at par, resulting in net proceeds, after underwriting discounts and commissions, legal, accounting and other professional fees, of approximately $ 73.5 million. Total debt issuance costs of approximately $ 1.5 million were deferred and are being amortized over the expected life of the notes, which is five years . Amortization of the debt issuance costs during the three months ended September 30, 2021 and 2020 of both subordinated notes offerings totaled $ 146,000 and $ 186,000 , respectively. Amortization of the debt issuance costs during the nine months ended September 30, 2021 and 2020 totaled $ 512,000 and $ 428,000 , respectively. Amortization of the debt issuance costs is included in interest expense on subordinated notes in the consolidated statements of income, resulting in an imputed interest rate of 5.98 %. At September 30, 2021 and December 31, 2020, subordinated notes are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2021 December 31, 2020 ​ ​ (In Thousands) Subordinated notes ​ $ 75,000 ​ $ 150,000 Less: unamortized debt issuance costs ​ 1,090 ​ 1,603 ​ ​ $ 73,910 ​ $ 148,397 ​ ​ ​ 30 ​ NOTE 14: INCOME TAXES Reconciliations of the Company’s effective tax rates to the statutory corporate tax rates were as follows: ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ ​ 2021 ​ 2020 Tax at statutory rate ​ 21.0 % 21.0 % Nontaxable interest and dividends ( 0.3 ) ​ ( 0.6 ) ​ Tax credits ( 1.5 ) ​ ( 3.8 ) ​ State taxes 1.4 ​ 5.0 ​ Other 0.3 ​ 0.1 ​ ​ 20.9 % 21.5 % ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, ​ ​ 2021 ​ 2020 Tax at statutory rate 21.0 % 21.0 % Nontaxable interest and dividends ( 0.3 ) ( 0.5 ) ​ Tax credits ( 1.6 ) ( 3.9 ) ​ State taxes 1.5 1.6 ​ Other 0.3 0.6 ​ ​ 20.9 % 18.8 % ​ The Company and its consolidated subsidiaries have not been audited recently by the Internal Revenue Service (IRS). As a result, federal tax years through December 31, 2016 are now closed. The Company was previously under State of Missouri income and franchise tax examinations for its 2014 and 2015 tax years. The examinations concluded with one unresolved issue related to the exclusion of certain income in the calculation of Missouri income tax. The Missouri Department of Revenue denied the Company’s administrative protest regarding the 2014 and 2015 tax years’ examinations. In June 2021, the Company filed a formal protest with the Missouri Administrative Hearing Commission, which has special jurisdiction to hear tax matters and is similar to a trial court, to continue defending the Company’s rights and associated tax position. The Company has engaged legal and tax advisors and continues to believe it will ultimately prevail on the issue; however, if the Company does not prevail, the tax obligation to the State of Missouri could be up to $ 4.0 million. ​ NOTE 15: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS ASC Topic 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Topic 820 also specifies a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: ● Quoted prices in active markets for identical assets or liabilities (Level 1): Inputs that are quoted unadjusted prices in active markets for identical assets that the Company has the ability to access at the measurement date. An active market for the asset is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. ● Other observable inputs (Level 2): Inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity including quoted prices for similar assets, quoted prices for securities in inactive markets and inputs derived principally from or corroborated by observable market data by correlation or other means. ● Significant unobservable inputs (Level 3): Inputs that reflect assumptions of a source independent of the reporting entity or the reporting entity’s own assumptions that are supported by little or no market activity or observable inputs. 31 ​ Financial instruments are broken down by recurring or nonrecurring measurement status. Recurring assets are initially measured at fair value and are required to be remeasured at fair value in the financial statements at each reporting date. Assets measured on a nonrecurring basis are assets that, due to an event or circumstance, were required to be remeasured at fair value after initial recognition in the financial statements at some time during the reporting period. Recurring Measurements The following table presents the fair value measurements of assets recognized in the accompanying statements of financial condition measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fell at September 30, 2021 and December 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair value measurements using ​ ​ ​ ​ ​ Quoted prices ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ in active ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ markets ​ Other ​ Significant ​ ​ ​ ​ ​ for identical ​ observable ​ unobservable ​ ​ ​ ​ ​ assets ​ inputs ​ inputs ​ Fair value (Level 1) (Level 2) (Level 3) ​ ​ (In Thousands) September 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities ​ $ 168,820 ​ $ — ​ $ 168,820 ​ $ — Agency collateralized mortgage obligations ​ 205,731 ​ — ​ 205,731 ​ — States and political subdivisions securities ​ 40,037 ​ — ​ 40,037 ​ — Small Business Administration securities ​ 18,350 ​ — ​ 18,350 ​ — Interest rate derivative asset ​ 3,707 ​ — ​ 3,707 ​ — Interest rate derivative liability ​ ( 3,758 ) ​ — ​ ( 3,758 ) ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ ​ ​ Agency mortgage-backed securities ​ $ 169,940 ​ $ — ​ $ 169,940 ​ $ — Agency collateralized mortgage obligations ​ 176,621 ​ — ​ 176,621 ​ — States and political subdivisions securities ​ 47,325 ​ — ​ 47,325 ​ — Small Business Administration securities ​ 21,047 ​ — ​ 21,047 ​ — Interest rate derivative asset ​ 5,062 ​ — ​ 5,062 ​ — Interest rate derivative liability ​ ( 5,454 ) ​ — ​ ( 5,454 ) ​ — ​ The following is a description of inputs and valuation methodologies used for assets recorded at fair value on a recurring basis and recognized in the accompanying statements of financial condition at September 30, 2021 and December 31, 2020, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the nine-month period ended September 30, 2021. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below. Available-for-Sale Securities. Investment securities available for sale are recorded at fair value on a recurring basis. The fair values used by the Company are obtained from an independent pricing service, which represent either quoted market prices for the identical asset or fair values determined by pricing models, or other model-based valuation techniques, that consider observable market data, such as interest rate volatilities, LIBOR yield curve, credit spreads and prices from market makers and live trading systems. Recurring Level 2 securities include U.S. government agency securities, mortgage-backed securities, state and municipal bonds and certain other investments. Inputs used for valuing Level 2 securities include observable data that may include dealer quotes, benchmark yields, market spreads, live trading levels and market consensus prepayment speeds, among other things. Additional inputs include indicative values derived from the independent pricing service’s proprietary computerized models. There were no recurring Level 3 securities at September 30, 2021 or December 31, 2020. Interest Rate Derivatives. The fair value is estimated using forward-looking interest rate curves and is determined using observable market rates and, therefore, are classified within Level 2 of the valuation hierarchy. 32 ​ Nonrecurring Measurements The following table presents the fair value measurements of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at September 30, 2021 and December 31, 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements Using ​ ​ ​ ​ ​ Quoted prices ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ in active ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ markets ​ Other ​ Significant ​ ​ ​ ​ ​ for identical ​ observable ​ unobservable ​ ​ ​ ​ ​ assets ​ inputs ​ inputs ​ Fair value (Level 1) (Level 2) (Level 3) ​ ​ (In Thousands) September 30, 2021 ​ ​ ​ ​ ​ ​ ​ ​ Collateral-dependent loans ​ $ — ​ $ — ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreclosed assets held for sale ​ $ — ​ $ — ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2020 ​ ​ ​ ​ Impaired loans ​ $ 1,759 ​ $ — ​ $ — ​ $ 1,759 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreclosed assets held for sale ​ $ 945 ​ $ — ​ $ — ​ $ 945 ​ The following is a description of valuation methodologies used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying statements of financial condition, as well as the general classification of such assets pursuant to the valuation hierarchy. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below. Loans Held for Sale. Mortgage loans held for sale are recorded at the lower of carrying value or fair value. The fair value of mortgage loans held for sale is based on what secondary markets are currently offering for portfolios with similar characteristics. As such, the Company classifies mortgage loans held for sale as Nonrecurring Level 2. Write-downs to fair value typically do not occur as the Company generally enters into commitments to sell individual mortgage loans at the time the loan is originated to reduce market risk. The Company typically does not have commercial loans held for sale. At September 30, 2021 and December 31, 2020, the aggregate fair value of mortgage loans held for sale was not materially different than their cost. Accordingly, no mortgage loans held for sale were marked down and reported at fair value. Impaired Loans . Prior to January 1, 2021, a loan was considered to be impaired when it was probable that all of the principal and interest due may not be collected according to its contractual terms. Generally, when a loan was considered impaired, the amount of reserve required under FASB ASC 310, Receivables , was measured based on the fair value of the underlying collateral. The Company made such measurements on all material loans deemed impaired using the fair value of the collateral for collateral-dependent loans. The fair value of collateral used by the Company was determined by obtaining an observable market price or by obtaining an appraised value from an independent, licensed or certified appraiser, using observable market data. This data included information such as selling price of similar properties and capitalization rates of similar properties sold within the market, expected future cash flows or earnings of the subject property based on current market expectations, and other relevant factors. All appraised values were adjusted for market-related trends based on the Company’s experience in sales and other appraisals of similar property types as well as estimated selling costs. Each quarter, management reviewed all collateral-dependent impaired loans on a loan-by-loan basis to determine whether updated appraisals were necessary based on loan performance, collateral type and guarantor support. At times, the Company measured the fair value of collateral-dependent impaired loans using appraisals with dates more than one year prior to the date of review. These appraisals were discounted by applying current, observable market data about similar property types such as sales contracts, estimations of value by individuals familiar with the market, other appraisals, sales or collateral assessments based on current market activity until updated appraisals are obtained. Depending on the length of time since an appraisal was performed and the data provided through our reviews, these appraisals were typically discounted 10 - 40 %. The policy described above was the same for all types of collateral-dependent impaired loans. Subsequent to December 31, 2020, these loans are no longer considered impaired. The Company records collateral-dependent loans as Nonrecurring Level 3. If a loan’s fair value as estimated by the Company is less than its carrying value, the Company either records a charge-off of the portion of the loan that exceeds the fair value or establishes a reserve within the allowance for credit losses specific to the loan. Loans for which such charge-offs or reserves were recorded during the year ended December 31, 2020, are shown in the table above (net of reserves). 33 ​ Foreclosed Assets Held for Sale. Foreclosed assets held for sale are initially recorded at fair value less estimated cost to sell at the date of foreclosure. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less estimated cost to sell. Foreclosed assets held for sale are classified within Level 3 of the fair value hierarchy. The foreclosed assets represented in the table above have been re-measured during the nine months ended September 30, 2021 or the year ended December 31, 2020, subsequent to their initial transfer to foreclosed assets. Fair Value of Financial Instruments The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying statements of financial condition at amounts other than fair value. Cash and Cash Equivalents and Federal Home Loan Bank Stock. The carrying amount approximates fair value. Loans and Interest Receivable. The fair value of loans is estimated on an exit price basis incorporating contractual cash flows, prepayments, discount spreads, credit losses and liquidity premiums. Loans with similar characteristics were aggregated for purposes of the calculations. The carrying amount of accrued interest receivable approximates its fair value. Deposits and Accrued Interest Payable. The fair value of demand deposits and savings accounts is the amount payable on demand at the reporting date, i.e., their carrying amounts. The fair value of fixed maturity certificates of deposit is estimated through a discounted cash flow calculation using the average advances yield curve from 11 districts of the FHLB for the as of date. The carrying amount of accrued interest payable approximates its fair value. Short-Term Borrowings. The carrying amount approximates fair value. Subordinated Debentures Issued to Capital Trusts. The subordinated debentures have floating rates that reset quarterly. The carrying amount of these debentures approximates their fair value. Subordinated Notes. The fair values used by the Company are obtained from independent sources and are derived from quoted market prices of the Company’s subordinated notes and quoted market prices of other subordinated debt instruments with similar characteristics. Commitments to Originate Loans, Letters of Credit and Lines of Credit. The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date. 34 ​ The following table presents estimated fair values of the Company’s financial instruments not recorded at fair value on the statements of financial condition. The fair values of certain of these instruments were calculated by discounting expected cash flows, which method involves significant judgments by management and uncertainties. Fair value is the estimated amount at which financial assets or liabilities could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Because no market exists for certain of these financial instruments and because management does not intend to sell these financial instruments, the Company does not know whether the fair values shown below represent values at which the respective financial instruments could be sold individually or in the aggregate. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2021 December 31, 2020 ​ ​ Carrying ​ Fair ​ Hierarchy ​ Carrying ​ Fair ​ Hierarchy ​ Amount Value Level Amount Value Level ​ ​ (In Thousands) Financial assets ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 769,192 ​ $ 769,192 1 ​ $ 563,729 ​ $ 563,729 1 Mortgage loans held for sale ​ 10,809 ​ 10,809 2 ​ 17,780 ​ 17,780 2 Loans, net of allowance for credit losses ​ 4,025,686 ​ 4,023,358 3 ​ 4,296,804 ​ 4,303,909 3 Interest receivable ​ 11,290 ​ 11,290 3 ​ 12,793 ​ 12,793 3 Investment in FHLBank stock and other interest-earning assets ​ 6,655 ​ 6,655 3 ​ 9,806 ​ 9,806 3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ 4,510,196 ​ 4,512,586 3 ​ 4,516,903 ​ 4,523,586 3 Short-term borrowings ​ 168,968 ​ 168,968 3 ​ 165,692 ​ 165,692 3 Subordinated debentures ​ 25,774 ​ 25,774 3 ​ 25,774 ​ 25,774 3 Subordinated notes ​ 73,910 ​ 81,563 2 ​ 148,397 ​ 157,032 2 Interest payable ​ 1,730 ​ 1,730 3 ​ 2,594 ​ 2,594 3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrecognized financial instruments (net of contractual value) ​ ​ ​ ​ ​ ​ ​ ​ ​ Commitments to originate loans ​ — ​ — 3 ​ — ​ — 3 Letters of credit ​ 64 ​ 64 3 ​ 84 ​ 84 3 Lines of credit ​ — ​ — 3 ​ — ​ — 3 ​ ​ ​ NOTE 16: DERIVATIVES AND HEDGING ACTIVITIES Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its assets and liabilities. In the normal course of business, the Company may use derivative financial instruments (primarily interest rate swaps) from time to time to assist in its interest rate risk management. The Company has interest rate derivatives that result from a service provided to certain qualifying loan customers that are not used to manage interest rate risk in the Company’s assets or liabilities and are not designated in a qualifying hedging relationship. The Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions. In addition, the Company has interest rate derivatives that are designated in a qualified hedging relationship. Nondesignated Hedges The Company has interest rate swaps that are not designated as qualifying hedging relationships. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain loan customers, which the Company began offering during 2011. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. 35 ​ As part of the Valley Bank FDIC-assisted acquisition, the Company acquired seven loans with related interest rate swaps. Valley’s swap program differed from the Company’s in that Valley did not have back to back swaps with the customer and a counterparty. Five of the seven acquired loans with interest rate swaps have paid off. The aggregate notional amount of the two remaining Valley swaps was $ 508,000 and $ 584,000 at September 30, 2021 and December 31, 2020, respectively. At September 30, 2021, excluding the Valley Bank swaps, the Company had 15 interest rate swaps totaling $ 124.0 million in notional amount with commercial customers, and 15 interest rate swaps with the same aggregate notional amount with third parties related to its program. In addition, the Company has four participation loans purchased totaling $ 27.3 million, in which the lead institution has an interest rate swap with its customer and the economics of the counterparty swap are passed along to the Company through the loan participation. At December 31, 2020, excluding the Valley Bank swaps, the Company had 19 interest rate swaps totaling $ 142.8 million in notional amount with commercial customers, and 19 interest rate swaps with the same notional amount with third parties related to its program. During the three months ended September 30, 2021, the Company recognized net gains of $ 45,000 , compared to net gains of $ 89,000 during the three months ended September 30, 2020, in noninterest income related to changes in the fair value of these swaps. During the nine months ended September 30, 2021, the Company recognized net gains of $ 340,000 , compared to net losses of $ 424,000 during the nine months ended September 30, 2020, in noninterest income related to changes in the fair value of these swaps. Cash Flow Hedges Interest Rate Swap . As a strategy to maintain acceptable levels of exposure to the risk of changes in future cash flows due to interest rate fluctuations, in October 2018, the Company entered into an interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap was $ 400 million with a termination date of October 6, 2025. Under the terms of the swap, the Company received a fixed rate of interest of 3.018 % and paid a floating rate of interest equal to one-month USD-LIBOR. The floating rate reset monthly and net settlements of interest due to/from the counterparty also occurred monthly. To the extent that the fixed rate of interest exceeded one-month USD-LIBOR, the Company received net interest settlements which were recorded as loan interest income. If USD-LIBOR exceeded the fixed rate of interest in future periods, the Company was required to pay net settlements to the counterparty and recorded those net payments as a reduction of interest income on loans. On March 2, 2020, the Company and its swap counterparty mutually agreed to terminate the swap, effective on that date. The Company received a payment of $ 45.9 million, including accrued but unpaid interest, from its swap counterparty as a result of this termination. This $ 45.9 million, less the accrued interest portion and net of deferred income taxes, was reflected in the Company’s stockholders’ equity as Accumulated Other Comprehensive Income and a portion of it is being accreted to interest income on loans monthly through the original contractual termination date of October 6, 2025. This has the effect of reducing Accumulated Other Comprehensive Income and increasing Net Interest Income and Retained Earnings over the period. In each quarterly period, commencing with the quarter ended June 30, 2020, until the original contract termination date, the Company expects to record loan interest income related to this swap transaction of approximately $ 2.0 million, based on the termination value of the swap. As such, the Company recorded loan interest income of $ 2.0 million and $ 2.0 million on this interest rate swap during the three months ended September 30, 2021 and 2020, respectively. The Company recorded loan interest income of $ 6.1 million and $ 5.6 million on this interest rate swap during the nine months ended September 30, 2021 and 2020, respectively. The effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affected earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. During each of the three and nine months ended September 30, 2021 and 2020, the Company recognized no noninterest income related to changes in the fair value of this derivative. The Company currently expects to have an amount of eligible variable rate loans to continue to accrete this interest income in future periods. If this expectation changes and the amount of eligible variable rate loans decreases significantly, the Company may be required to recognize this interest income more rapidly. 36 ​ The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Statements of Financial Condition: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Location in Fair Value ​ ​ Consolidated Statements ​ September 30, ​ December 31, ​ ​ of Financial Condition ​ 2021 ​ 2020 ​ ​ ​ ​ ​ (In Thousands) Derivatives not designated as hedging instruments ​ ​ ​ ​ ​ ​ ​ ​ Asset Derivatives ​ ​ Interest rate products Prepaid expenses and other assets ​ $ 3,707 ​ $ 5,062 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivatives not designated as hedging instruments ​ ​ ​ $ 3,707 ​ $ 5,062 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liability Derivatives ​ ​ ​ ​ Interest rate products ​ Accrued expenses and other liabilities ​ $ 3,758 ​ $ 5,454 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivatives not designated as hedging instruments ​ ​ ​ $ 3,758 ​ $ 5,454 ​ The following table presents the effect of cash flow hedge accounting on the statements of comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount of Gain (Loss) ​ ​ Recognized in AOCI ​ ​ Three Months Ended September 30, Cash Flow Hedges 2021 2020 ​ (In Thousands) Interest rate swap, net of income taxes ​ $ ( 1,580 ) ​ $ ( 1,581 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount of Gain (Loss) ​ ​ Recognized in AOCI ​ ​ Nine Months Ended September 30, Cash Flow Hedges 2021 2020 ​ (In Thousands) Interest rate swap, net of income taxes ​ $ ( 4,690 ) ​ $ 8,271 ​ The following table presents the effect of cash flow hedge accounting on the statements of income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, Cash Flow Hedges ​ 2021 ​ 2020 ​ ​ Interest ​ Interest ​ Interest ​ Interest ​ Income Expense Income Expense ​ ​ (In Thousands) Interest rate swap ​ $ 2,048 ​ $ — ​ $ 2,047 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, Cash Flow Hedges 2021 2020 ​ Interest Interest Interest Interest ​ Income Expense Income Expense ​ (In Thousands) Interest rate swap ​ $ 6,076 ​ $ — ​ $ 5,629 ​ $ — ​ Agreements with Derivative Counterparties The Company has agreements with its derivative counterparties. If the Company defaults on any of its indebtedness, including a default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. If the Bank fails to maintain its status as a well-capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements. Similarly, the Company could be required to settle its obligations under certain of its agreements if certain regulatory events occurred, such as the issuance of a formal directive, or if the Company’s credit rating is downgraded below a specified level. 37 ​ At September 30, 2021, the termination value of derivatives with our derivative dealer counterparties (related to loan level swaps with commercial lending customers) in an overall net liability position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $ 689,000 . The Company has minimum collateral posting thresholds with its derivative dealer counterparties. At September 30, 2021, the Company’s activity with one of its derivative counterparties met the level at which the minimum collateral posting thresholds take effect (collateral to be given by the Company) and the Company had posted collateral totaling $ 1.2 million to the derivative counterparty to satisfy the loan level agreements. In addition, as of September 30, 2021, the activity with one of its derivative counterparties met the level at which the minimum collateral posting thresholds take effect (collateral to be received by the Company) and the derivative counterparty had given cash collateral of $ 490,000 to the Company to satisfy the loan level agreements. At December 31, 2020, the termination value of derivatives with our derivative dealer counterparties (related to loan level swaps with commercial lending customers) in a net liability position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $ 391,000 . Additionally, the Company’s activity with two of its derivative counterparties met the level at which the minimum collateral posting thresholds take effect (collateral to be given by the Company) and the Company had posted collateral of $ 5.3 million to the derivative counterparties to satisfy the loan level agreements. If the Company had breached any of these provisions at September 30, 2021 or December 31, 2020, it could have been required to settle its obligations under the agreements at the termination value. ​ ​ 38 ​