GREAT SOUTHERN BANCORP, INC. 10-Q

ITEM 1. FINANCIAL STATEMENTS. GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In Thousands, Except Per Share Data) ​ ​ ​ ​ ​ ​ ​ ​ ​ SEPTEMBER 30, DECEMBER 31, ​ ​ 2023 ​ 2022 ​ ​ (Unaudited) ASSETS ​ ​ ​ ​ ​ ​ Cash $ 92,579 $ 105,262 Interest-bearing deposits in other financial institutions ​ ​ 89,736 ​ ​ 63,258 Cash and cash equivalents ​ ​ 182,315 ​ ​ 168,520 Available-for-sale securities ​ ​ 447,948 ​ ​ 490,592 Held-to-maturity securities ​ ​ 196,716 ​ ​ 202,495 Mortgage loans held for sale ​ ​ 5,678 ​ ​ 4,811 Loans receivable, net of allowance for credit losses of $ 64,753 – September 2023; $ 63,480 – December 2022 ​ ​ 4,564,567 ​ ​ 4,506,836 Interest receivable ​ ​ 19,366 ​ ​ 19,107 Prepaid expenses and other assets ​ ​ 103,441 ​ ​ 69,461 Other real estate owned and repossessions, net ​ ​ 38 ​ ​ 233 Premises and equipment, net ​ ​ 139,893 ​ ​ 141,070 Goodwill and other intangible assets ​ ​ 10,585 ​ ​ 10,813 Federal Home Loan Bank stock and other interest-earning assets ​ ​ 36,038 ​ ​ 30,814 Current and deferred income taxes ​ ​ 41,493 ​ ​ 35,950 Total Assets $ 5,748,078 $ 5,680,702 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ Deposits $ 4,851,548 $ 4,684,910 Securities sold under reverse repurchase agreements with customers ​ ​ 58,172 ​ ​ 176,843 Short-term borrowings and other interest-bearing liabilities ​ ​ 84,110 ​ ​ 89,583 Subordinated debentures issued to capital trust ​ ​ 25,774 ​ ​ 25,774 Subordinated notes ​ ​ 74,504 ​ ​ 74,281 Accrued interest payable ​ ​ 6,619 ​ ​ 3,010 Advances from borrowers for taxes and insurance ​ ​ 10,227 ​ ​ 6,590 Accrued expenses and other liabilities ​ ​ 96,251 ​ ​ 73,808 Liability for unfunded commitments ​ ​ 9,176 ​ ​ 12,816 Total Liabilities ​ ​ 5,216,381 ​ ​ 5,147,615 ​ ​ ​ ​ ​ ​ ​ Stockholders’ Equity: ​ ​ ​ ​ ​ ​ Capital stock ​ ​ ​ ​ ​ ​ Serial preferred stock, $ .01 par value; authorized 1,000,000 shares; issued and outstanding September 2023 and December 2022 - - 0 - shares ​ ​ — ​ ​ — Common stock, $ .01 par value; authorized 20,000,000 shares; issued and outstanding September 2023 – 11,864,363 shares; December 2022 – 12,231,290 shares ​ ​ 119 ​ ​ 122 Additional paid-in capital ​ ​ 43,701 ​ ​ 42,445 Retained earnings ​ ​ 564,658 ​ ​ 543,875 Accumulated other comprehensive income (loss) ​ ​ ( 76,781 ) ​ ​ ( 53,355 ) Total Stockholders’ Equity ​ ​ 531,697 ​ ​ 533,087 Total Liabilities and Stockholders’ Equity $ 5,748,078 $ 5,680,702 ​ 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, ​ ​ 2023 2022 ​ ​ (Unaudited) INTEREST INCOME ​ ​ ​ ​ ​ ​ Loans $ 68,878 $ 54,077 Investment securities and other ​ ​ 6,394 ​ ​ 5,580 TOTAL INTEREST INCOME ​ ​ 75,272 ​ ​ 59,657 ​ ​ ​ ​ ​ ​ ​ INTEREST EXPENSE ​ ​ ​ ​ ​ ​ Deposits ​ ​ 25,233 ​ ​ 4,984 Securities sold under reverse repurchase agreements ​ ​ 308 ​ ​ 45 Short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities ​ ​ 1,433 ​ ​ 377 Subordinated debentures issued to capital trust ​ ​ 454 ​ ​ 248 Subordinated notes ​ ​ 1,106 ​ ​ 1,105 TOTAL INTEREST EXPENSE ​ ​ 28,534 ​ ​ 6,759 ​ ​ ​ ​ ​ ​ ​ NET INTEREST INCOME ​ ​ 46,738 ​ ​ 52,898 PROVISION FOR CREDIT LOSSES ON LOANS ​ ​ — ​ ​ 2,000 PROVISION (CREDIT) FOR UNFUNDED COMMITMENTS ​ ​ ( 1,195 ) ​ ​ 1,315 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES AND PROVISION (CREDIT) FOR UNFUNDED COMMITMENTS ​ ​ 47,933 ​ ​ 49,583 ​ ​ ​ ​ ​ ​ ​ NON-INTEREST INCOME ​ ​ ​ ​ ​ ​ Commissions ​ ​ 232 ​ ​ 226 Overdraft and insufficient funds fees ​ ​ 2,017 ​ ​ 2,077 Point-Of-Sale and ATM fee income and service charges ​ ​ 3,724 ​ ​ 3,874 Net gains on loan sales ​ ​ 784 ​ ​ 601 Net realized gain on sale of available for sale securities ​ ​ — ​ ​ 31 Late charges and fees on loans ​ ​ 149 ​ ​ 206 Gain on derivative interest rate products ​ ​ 55 ​ ​ 88 Other income ​ ​ 891 ​ ​ 881 TOTAL NON-INTEREST INCOME ​ ​ 7,852 ​ ​ 7,984 ​ ​ ​ ​ ​ ​ ​ NON-INTEREST EXPENSE ​ ​ ​ ​ ​ ​ Salaries and employee benefits ​ ​ 19,673 ​ ​ 18,976 Net occupancy and equipment expense ​ ​ 7,729 ​ ​ 7,198 Postage ​ ​ 844 ​ ​ 860 Insurance ​ ​ 1,301 ​ ​ 803 Advertising ​ ​ 950 ​ ​ 953 Office supplies and printing ​ ​ 294 ​ ​ 236 Telephone ​ ​ 657 ​ ​ 832 Legal, audit and other professional fees ​ ​ 1,849 ​ ​ 2,239 Expense on other real estate and repossessions ​ ​ 62 ​ ​ 84 Acquired intangible asset amortization ​ ​ 59 ​ ​ 216 Other operating expenses ​ ​ 2,139 ​ ​ 2,361 TOTAL NON-INTEREST EXPENSE ​ ​ 35,557 ​ ​ 34,758 ​ ​ ​ ​ ​ ​ ​ INCOME BEFORE INCOME TAXES ​ ​ 20,228 ​ ​ 22,809 PROVISION FOR INCOME TAXES ​ ​ 4,349 ​ ​ 4,676 NET INCOME $ 15,879 ​ $ 18,133 ​ ​ ​ ​ ​ ​ ​ Basic Earnings Per Common Share $ 1.33 ​ $ 1.47 Diluted Earnings Per Common Share $ 1.33 ​ $ 1.46 ​ ​ ​ ​ ​ ​ ​ Dividends Declared Per Common Share $ 0.40 ​ $ 0.40 ​ 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, ​ ​ 2023 2022 ​ (Unaudited) INTEREST INCOME ​ ​ ​ ​ ​ ​ Loans ​ $ 201,758 ​ $ 143,906 Investment securities and other ​ 18,595 ​ ​ 15,122 TOTAL INTEREST INCOME ​ 220,353 ​ ​ 159,028 ​ ​ ​ ​ ​ ​ ​ INTEREST EXPENSE ​ ​ ​ ​ ​ Deposits ​ 61,668 ​ ​ 9,516 Securities sold under reverse repurchase agreements ​ 871 ​ ​ 62 Short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities ​ 5,156 ​ ​ 614 Subordinated debentures issued to capital trust ​ 1,273 ​ ​ 525 Subordinated notes ​ ​ 3,317 ​ ​ 3,317 TOTAL INTEREST EXPENSE ​ 72,285 ​ ​ 14,034 ​ ​ ​ ​ ​ ​ ​ NET INTEREST INCOME ​ 148,068 ​ ​ 144,994 PROVISION FOR CREDIT LOSSES ON LOANS ​ 1,500 ​ ​ 2,000 PROVISION (CREDIT) FOR UNFUNDED COMMITMENTS ​ ( 3,640 ) ​ ​ 3,345 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES AND PROVISION (CREDIT) FOR UNFUNDED COMMITMENTS ​ 150,208 ​ ​ 139,649 ​ ​ ​ ​ ​ ​ ​ NON-INTEREST INCOME ​ ​ ​ ​ ​ ​ Commissions ​ 887 ​ ​ 912 Overdraft and insufficient funds fees ​ 5,902 ​ ​ 5,830 Point-Of-Sale and ATM fee income and service charges ​ 11,204 ​ ​ 11,942 Net gains on loan sales ​ 1,882 ​ ​ 2,234 Net realized gain on sale of available-for-sale securities ​ — ​ ​ 38 Late charges and fees on loans ​ 454 ​ ​ 879 Gain (loss) on derivative interest rate products ​ ( 234 ) ​ ​ 385 Other income ​ 3,415 ​ ​ 4,260 TOTAL NON-INTEREST INCOME ​ 23,510 ​ ​ 26,480 ​ ​ ​ ​ ​ ​ ​ NON-INTEREST EXPENSE ​ ​ ​ ​ ​ ​ Salaries and employee benefits ​ 58,554 ​ ​ 56,488 Net occupancy and equipment expense ​ 22,858 ​ ​ 20,884 Postage ​ 2,586 ​ ​ 2,491 Insurance ​ 3,178 ​ ​ 2,383 Advertising ​ 2,500 ​ ​ 2,383 Office supplies and printing ​ 820 ​ ​ 662 Telephone ​ 2,048 ​ ​ 2,513 Legal, audit and other professional fees ​ 5,477 ​ ​ 4,240 Expense on other real estate and repossessions ​ 263 ​ ​ 313 Acquired intangible asset amortization ​ 228 ​ ​ 552 Other operating expenses ​ 6,226 ​ ​ 6,121 TOTAL NON-INTEREST EXPENSE ​ 104,738 ​ ​ 99,030 ​ ​ ​ ​ ​ ​ ​ INCOME BEFORE INCOME TAXES ​ 68,980 ​ ​ 67,099 PROVISION FOR INCOME TAXES ​ 14,325 ​ ​ 13,755 NET INCOME ​ $ 54,655 ​ $ 53,344 ​ ​ ​ ​ ​ ​ ​ Basic Earnings Per Common Share ​ $ 4.53 ​ $ 4.23 Diluted Earnings Per Common Share ​ $ 4.52 ​ $ 4.20 ​ ​ ​ ​ ​ ​ ​ Dividends Declared Per Common Share ​ $ 1.20 ​ $ 1.16 ​ See Notes to Consolidated Financial Statements ​ 3 GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In Thousands, Except Per Share Data) ​ ​ ​ ​ ​ ​ ​ ​ ​ THREE MONTHS ENDED ​ ​ SEPTEMBER 30, ​ 2023 2022 ​ ​ (Unaudited) Net Income ​ $ 15,879 ​ $ 18,133 ​ ​ ​ ​ ​ ​ ​ Unrealized appreciation (depreciation) on available-for-sale securities, net of taxes (credit) of $( 5,420 ) and $( 6,884 ), for 2023 and 2022, respectively ​ ​ ( 16,606 ) ​ ​ ( 23,305 ) ​ ​ ​ ​ ​ ​ ​ Unrealized loss on securities transferred to held-to-maturity, net of taxes of $( 13 ) and $( 65 ) for 2023 and 2022, respectively ​ ​ ( 38 ) ​ ​ ( 220 ) ​ ​ ​ ​ ​ ​ ​ Less: reclassification adjustment for gains included in net income, net of taxes of $( 0 ) and $( 7 ) for 2023 and 2022, respectively ​ ​ — ​ ​ ( 24 ) ​ ​ ​ ​ ​ ​ ​ Amortization of realized gain on termination of cash flow hedge, net of taxes (credit) of $( 468 ) and $( 467 ), for 2023 and 2022, respectively ​ ​ ( 1,580 ) ​ ​ ( 1,580 ) ​ ​ ​ ​ ​ ​ ​ Change in value of active cash flow hedges, net of taxes (credit) of $( 832 ) and $( 5,876 ) for 2023 and 2022, respectively ​ ​ ( 2,547 ) ​ ​ ( 19,898 ) ​ ​ ​ ​ ​ ​ ​ Comprehensive Income (Loss) ​ $ ( 4,892 ) ​ $ ( 26,894 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ NINE MONTHS ENDED ​ ​ SEPTEMBER 30, ​ 2023 2022 ​ (Unaudited) Net Income ​ $ 54,655 ​ $ 53,344 ​ ​ ​ ​ ​ ​ ​ Unrealized appreciation (depreciation) on available-for-sale securities, net of taxes (credit) of $( 5,327 ) and $( 17,965 ), for 2023 and 2022, respectively ​ ( 16,323 ) ​ ( 60,825 ) ​ ​ ​ ​ ​ ​ ​ Unrealized gain (loss) on securities transferred to held-to-maturity, net of taxes (credit) of $( 30 ) and $ 9 for 2023 and 2022, respectively ​ ( 92 ) ​ 30 ​ ​ ​ ​ ​ ​ ​ Less: reclassification adjustment for gains included in net income, net of taxes of $( 0 ) and $( 9 ) for 2023 and 2022, respectively ​ — ​ ( 29 ) ​ ​ ​ ​ ​ ​ ​ Amortization of realized gain on termination of cash flow hedge, net of taxes (credit) of $( 1,387 ) and $( 1,385 ), for 2023 and 2022, respectively ​ ​ ( 4,688 ) ​ ​ ( 4,691 ) ​ ​ ​ ​ ​ ​ ​ Change in value of active cash flow hedges, net of taxes (credit) of $( 758 ) and $( 7,553 ) for 2023 and 2022, respectively ​ ( 2,323 ) ​ ( 25,570 ) ​ ​ ​ ​ ​ ​ ​ Comprehensive Income (Loss) ​ $ 31,229 ​ $ ( 37,741 ) ​ 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, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ Common Additional Retained Comprehensive Treasury ​ ​ ​ ​ Stock Paid-in Capital Earnings Income (Loss) Stock Total ​ (Unaudited) Balance, June 30, 2023 $ 120 $ 43,292 ​ $ 558,927 ​ $ ( 56,010 ) $ — $ 546,329 Net income ​ ​ — ​ ​ — ​ ​ 15,879 ​ ​ — ​ ​ — ​ ​ 15,879 Stock issued under Stock Option Plan ​ ​ — ​ ​ 409 ​ ​ — ​ ​ — ​ ​ 45 ​ ​ 454 Common cash dividends declared, $ 0.40 per share ​ ​ — ​ ​ — ​ ​ ( 4,745 ) ​ ​ — ​ ​ — ​ ​ ( 4,745 ) Change in fair value of cash flow hedges ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 4,127 ) ​ ​ — ​ ​ ( 4,127 ) Change in unrealized gain on held-to-maturity securities ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 38 ) ​ ​ — ​ ​ ( 38 ) Change in unrealized loss on available-for-sale securities ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 16,606 ) ​ ​ — ​ ​ ( 16,606 ) Purchase of the Company’s common stock ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 5,449 ) ​ ​ ( 5,449 ) Reclassification of treasury stock per Maryland law ​ ​ ( 1 ) ​ ​ — ​ ​ ( 5,403 ) ​ ​ — ​ ​ 5,404 ​ ​ — Balance, September 30, 2023 $ 119 $ 43,701 ​ $ 564,658 ​ $ ( 76,781 ) $ — $ 531,697 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ THREE MONTHS ENDED SEPTEMBER 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ Common Additional Retained Comprehensive Treasury ​ ​ ​ ​ Stock Paid-in Capital Earnings Income (Loss) Stock Total ​ (Unaudited) Balance, June 30, 2022 ​ $ 123 ​ $ 40,565 ​ $ 522,255 ​ $ ( 13,299 ) ​ $ — ​ $ 549,644 Net income ​ ​ — ​ ​ — ​ ​ 18,133 ​ ​ — ​ ​ — ​ ​ 18,133 Stock issued under Stock Option Plan ​ — ​ ​ 950 ​ ​ — ​ ​ — ​ ​ 1,355 ​ ​ 2,305 Common cash dividends declared, $ 0.40 per share ​ — ​ ​ — ​ ​ ( 4,906 ) ​ ​ — ​ ​ — ​ ​ ( 4,906 ) Change in fair value of cash flow hedges ​ — ​ ​ — ​ ​ — ​ ​ ( 21,478 ) ​ ​ — ​ ​ ( 21,478 ) Change in unrealized loss on held-to-maturity securities ​ — ​ ​ — ​ ​ — ​ ​ ( 220 ) ​ ​ — ​ ​ ( 220 ) Change in unrealized loss on available-for-sale securities ​ — ​ ​ — ​ ​ — ​ ​ ( 23,329 ) ​ ​ — ​ ​ ( 23,329 ) Purchase of the Company’s common stock ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 8,874 ) ​ ​ ( 8,874 ) Reclassification of treasury stock per Maryland law ​ — ​ ​ — ​ ​ ( 7,519 ) ​ ​ — ​ ​ 7,519 ​ ​ — Balance, September 30, 2022 ​ $ 123 ​ $ 41,515 ​ $ 527,963 ​ $ ( 58,326 ) ​ $ — ​ $ 511,275 ​ 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, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ ​ Common ​ Additional ​ Retained ​ Comprehensive ​ Treasury ​ ​ ​ ​ Stock Paid-in Capital Earnings Income (Loss) Stock Total ​ ​ (Unaudited) Balance, January 1, 2023 ​ $ 122 ​ $ 42,445 ​ $ 543,875 ​ $ ( 53,355 ) ​ $ — ​ $ 533,087 Net income ​ — ​ ​ — ​ ​ 54,655 ​ ​ — ​ ​ — ​ ​ 54,655 Stock issued under Stock Option Plan ​ — ​ ​ 1,256 ​ ​ — ​ ​ — ​ ​ 249 ​ ​ 1,505 Common cash dividends declared, $ 1.20 per share ​ — ​ ​ — ​ ​ ( 14,386 ) ​ ​ — ​ ​ — ​ ​ ( 14,386 ) Change in fair value of cash flow hedges ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 7,011 ) ​ ​ — ​ ​ ( 7,011 ) Change in unrealized gain on held-to-maturity securities ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 92 ) ​ ​ — ​ ​ ( 92 ) Change in unrealized loss on available-for-sale securities ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 16,323 ) ​ ​ — ​ ​ ( 16,323 ) Purchase of the Company’s common stock ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 19,738 ) ​ ​ ( 19,738 ) Reclassification of treasury stock per Maryland law ​ ( 3 ) ​ ​ — ​ ​ ( 19,486 ) ​ ​ — ​ ​ 19,489 ​ ​ — Balance, September 30, 2023 ​ $ 119 ​ $ 43,701 ​ $ 564,658 ​ $ ( 76,781 ) ​ $ — ​ $ 531,697 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NINE MONTHS ENDED SEPTEMBER 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ ​ Common ​ Additional ​ Retained ​ Comprehensive ​ Treasury ​ ​ ​ ​ Stock Paid-in Capital Earnings Income (Loss) Stock Total ​ ​ (Unaudited) Balance, January 1, 2022 ​ $ 131 ​ $ 38,314 ​ $ 545,548 ​ $ 32,759 ​ $ — ​ $ 616,752 Net income ​ ​ — ​ ​ — ​ ​ 53,344 ​ ​ — ​ ​ — ​ ​ 53,344 Stock issued under Stock Option Plan ​ ​ — ​ ​ 3,201 ​ ​ — ​ ​ — ​ ​ 2,773 ​ ​ 5,974 Common cash dividends declared, $ 1.16 per share ​ ​ — ​ ​ — ​ ​ ( 14,455 ) ​ ​ — ​ ​ — ​ ​ ( 14,455 ) Change in fair value of cash flow hedges ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 30,261 ) ​ ​ — ​ ​ ( 30,261 ) Change in unrealized gain on held-to-maturity securities ​ ​ — ​ ​ — ​ ​ — ​ ​ 30 ​ ​ — ​ ​ 30 Change in unrealized loss on available-for-sale securities ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 60,854 ) ​ ​ — ​ ​ ( 60,854 ) Purchase of the Company’s common stock ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 59,255 ) ​ ​ ( 59,255 ) Reclassification of treasury stock per Maryland law ​ ​ ( 8 ) ​ ​ — ​ ​ ( 56,474 ) ​ ​ — ​ ​ 56,482 ​ ​ — Balance, September 30, 2022 ​ $ 123 ​ $ 41,515 ​ $ 527,963 ​ $ ( 58,326 ) ​ $ — ​ $ 511,275 ​ See Notes to Consolidated Financial Statements ​ 6 GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands, Except Per Share Data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NINE MONTHS ENDED ​ SEPTEMBER 30, ​ ​ 2023 2022 ​ ​ (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES ​ ​ ​ ​ ​ ​ Net income $ 54,655 ​ $ 53,344 Proceeds from sales of loans held for sale ​ ​ 126,762 ​ ​ 78,776 Originations of loans held for sale ​ ​ ( 125,845 ) ​ ​ ( 70,073 ) Items not requiring (providing) cash: ​ ​ ​ ​ ​ ​ Depreciation ​ ​ 6,600 ​ ​ 6,369 Amortization ​ ​ 455 ​ ​ 861 Compensation expense for stock option grants ​ ​ 1,195 ​ ​ 1,054 Provision for credit losses on loans ​ ​ 1,500 ​ ​ 2,000 Provision (credit) for unfunded commitments ​ ​ ( 3,640 ) ​ ​ 3,345 Net gain on loan sales ​ ​ ( 1,882 ) ​ ​ ( 2,234 ) Net (gain) loss on sale of premises and equipment ​ ​ 18 ​ ​ ( 1,071 ) Net (gain) loss on sale/write-down of other real estate owned and repossessions ​ ​ 41 ​ ​ ( 125 ) Net gain on sale of available-for-sale investments ​ ​ — ​ ​ ( 38 ) Accretion of deferred income, premiums, discounts and other ​ ​ ( 4,379 ) ​ ​ ( 6,208 ) (Gain) loss on derivative interest rate products ​ ​ 234 ​ ​ ( 385 ) Deferred income taxes ​ ​ 845 ​ ​ ( 536 ) Changes in: ​ ​ ​ ​ ​ ​ Interest receivable ​ ​ ( 259 ) ​ ​ ( 3,082 ) Prepaid expenses and other assets ​ ​ ( 40,559 ) ​ ​ ( 16,534 ) Accrued expenses and other liabilities ​ ​ 23,250 ​ ​ 5,683 Income taxes refundable/payable ​ ​ 1,114 ​ ​ 2,800 Net cash provided by operating activities ​ ​ 40,105 ​ ​ 53,946 ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM INVESTING ACTIVITIES ​ ​ ​ ​ ​ ​ Net change in loans ​ ​ ( 54,526 ) ​ ​ ( 192,105 ) Purchase of loans ​ ​ ( 400 ) ​ ​ ( 294,762 ) Purchase of premises and equipment ​ ​ ( 6,171 ) ​ ​ ( 15,876 ) Proceeds from sale of premises and equipment ​ ​ 233 ​ ​ 3,830 Proceeds from sale of other real estate owned and repossessions ​ ​ 280 ​ ​ 2,192 Proceeds from sale of available-for-sale securities ​ ​ — ​ ​ 10,095 Proceeds from maturities and calls of available-for-sale securities ​ ​ 1,022 ​ ​ 750 Principal reductions on mortgage-backed securities ​ ​ 25,674 ​ ​ 63,539 Purchase of available-for-sale securities ​ ​ — ​ ​ ( 342,010 ) Purchase of Federal Home Loan Bank stock and change in other interest-earning assets ​ ​ ( 5,224 ) ​ ​ ( 24,599 ) Net cash used in investing activities ​ ​ ( 39,112 ) ​ ​ ( 788,946 ) ​ ​ ​ ​ ​ ​ ​ CASH FLOWS FROM FINANCING ACTIVITIES ​ ​ ​ ​ ​ ​ Net increase in certificates of deposit ​ ​ 83,533 ​ ​ 399,587 Net increase (decrease) in checking and savings deposits ​ ​ 83,739 ​ ​ ( 212,570 ) Net increase (decrease) in short-term borrowings ​ ​ ( 124,144 ) ​ ​ 84,351 Advances from borrowers for taxes and insurance ​ ​ 3,637 ​ ​ 3,987 Dividends paid ​ ​ ( 14,535 ) ​ ​ ( 14,281 ) Purchase of the Company’s common stock ​ ​ ( 19,738 ) ​ ​ ( 59,255 ) Stock options exercised ​ ​ 310 ​ ​ 4,920 Net cash provided by financing activities ​ ​ 12,802 ​ ​ 206,739 ​ ​ ​ ​ ​ ​ ​ INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ​ ​ 13,795 ​ ​ ( 528,261 ) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ​ 168,520 ​ ​ 717,267 CASH AND CASH EQUIVALENTS, END OF PERIOD ​ $ 182,315 ​ $ 189,006 ​ 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, 2023 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, 2022, has been derived from the audited consolidated statement of financial condition of the Company as of that date. 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, 2022 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; Charlotte, North Carolina; Chicago; Dallas; Denver; Omaha, Nebraska; Phoenix; and Tulsa, Oklahoma. The Company and the Bank are subject to regulation by certain federal and state agencies and undergo periodic examinations by those regulatory agencies. The Company’s banking operation is its only reportable segment. The banking operation is principally engaged in the business of originating residential and commercial real estate loans, construction loans, commercial business loans and consumer loans and funding these loans by attracting deposits from the general public, accepting brokered deposits and borrowing from the Federal Home Loan Bank and others. The operating results of this segment are regularly reviewed by management to make decisions about resource allocations and to assess performance. Selected information is not presented separately for the Company’s reportable segment, as there is no material difference between that information and the corresponding information in the consolidated financial statements. ​ NOTE 3: RECENT ACCOUNTING PRONOUNCEMENTS In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . ASU 2020-04 provides relief for companies preparing for discontinuation of interest rates such as the London Interbank Offered Rate (“LIBOR”). LIBOR is a benchmark interest rate referenced in a variety of agreements that are used by numerous entities. After 2021, certain LIBOR rates may no longer be published. As a result, LIBOR is expected to be discontinued as a reference rate. Other interest rates used globally could also be discontinued for similar reasons. ASU 2020-04 provides optional expedients and exceptions to contracts, hedging relationships and other transactions affected by reference rate reform. The main provisions for contract modifications include optional relief by allowing the modification as a continuation of the existing contract without additional analysis and other optional expedients regarding embedded features. Optional expedients for hedge accounting permit changes to critical terms of hedging relationships and to the designated benchmark interest rate in a fair value hedge and also provide relief for assessing hedge effectiveness for cash flow hedges. ASU 2020-04 was effective upon issuance; however, the guidance was originally only available generally through December 31, 2022. Based upon amendments provided in ASU 2022-06 discussed below, provisions of ASU 2020-04 can now generally be applied through December 31, 2024. The application of ASU 2020-04 has not had, and is not expected to have, a material impact on the Company’s consolidated financial statements. 8 ​ In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope . ASU 2021-01 clarifies that certain optional expedients and exceptions in ASC 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU 2021-01 also amends the expedients and exceptions in ASC 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. ASU 2021-01 was effective upon issuance; however, the guidance was originally only available generally through December 31, 2022. Based upon amendments provided in ASU 2022-06 discussed below, provisions of ASU 2021-01 can now generally be applied through December 31, 2024. ASU 2021-01 has not had, and is not expected to have, a material impact on the Company’s consolidated financial statements. In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method . ASU 2022-01 further clarifies certain targeted improvements to the optional hedge accounting model that were made under ASU 2017-12. ASU 2022-01 expands the last-of-layer method and renames this method to portfolio layer method to reflect this expansion, as well as expanding the scope of the portfolio layer method to include nonprepayable financial assets. It also specifies eligible hedging instruments and provides additional guidance on the accounting for and disclosure of hedge basis adjustments that are applicable to the portfolio layer method. ASU 2022-01 permits an entity to apply the same portfolio hedging method to both prepayable and nonprepayable financial assets, thereby allowing consistent accounting for similar hedges. ASU 2022-01 became effective for the Company on January 1, 2023. The adoption of ASU 2022-01 did not have a material impact on the Company’s consolidated financial statements. In March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures . ASU 2022-02 eliminates the troubled debt restructuring recognition and measurement guidance and, instead, requires that an entity evaluate whether a loan modification represents a new loan or a continuation of an existing loan. It also enhances existing disclosure requirements and introduces new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU 2022-02 became effective for the Company on January 1, 2023. The adoption of ASU 2022-02 did not have a material impact on the Company’s consolidated financial statements. The adoption of this ASU does, however, require changes in disclosures related to certain loan modifications. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 . ASU 2022-06 extends the period of time entities can utilize the reference rate reform relief guidance provided by ASU 2020-04 and ASU 2021-01, which are discussed above. ASU 2022-06 was effective upon issuance and defers the sunset date of this prior guidance to December 31, 2024, after which entities will no longer be permitted to apply the relief guidance in Topic 848. ASU 2022-06 has not had, and is not expected to have, a material impact on the Company’s consolidated financial statements. In March 2023, the FASB issued ASU 2023-02, Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method . ASU 2023-02 is intended to improve the accounting and disclosures for investments in tax credit structures. ASU 2023-02 allows entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. Previously, this method was only available for qualifying tax equity investments in low-income housing tax credit structures. The Company is evaluating whether or not to use this method for other tax credit structures in which it invests. Currently, the Company does not have a material amount of tax credit structures, other than low-income housing tax credit structures. ASU 2023-02 will be effective for the Company on January 1, 2024, though early adoption is permitted, and its adoption is not expected to have a material impact on the Company’s consolidated financial statements. ​ 9 ​ NOTE 4: EARNINGS PER SHARE ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ ​ 2023 2022 ​ ​ (In Thousands, Except Per Share Data) Basic: ​ ​ ​ ​ ​ ​ Average common shares outstanding ​ 11,935 ​ 12,304 Net income $ 15,879 $ 18,133 Per common share amount $ 1.33 $ 1.47 ​ ​ ​ ​ ​ ​ ​ Diluted: ​ ​ ​ ​ ​ ​ Average common shares outstanding ​ ​ 11,935 ​ ​ 12,304 Net effect of dilutive stock options – based on the treasury stock method using average market price ​ ​ 42 ​ ​ 99 Diluted common shares ​ ​ 11,977 ​ ​ 12,403 Net income $ 15,879 $ 18,133 Per common share amount $ 1.33 $ 1.46 ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, ​ ​ 2023 2022 ​ ​ (In Thousands, Except Per Share Data) Basic: ​ ​ ​ Average common shares outstanding ​ ​ 12,055 ​ 12,616 Net income ​ $ 54,655 ​ $ 53,344 Per common share amount ​ $ 4.53 ​ $ 4.23 ​ ​ ​ ​ ​ ​ ​ Diluted: ​ ​ ​ ​ Average common shares outstanding ​ 12,055 ​ 12,616 Net effect of dilutive stock options – based on the treasury stock method using average market price ​ 49 ​ 94 Diluted common shares ​ 12,104 ​ 12,710 Net income ​ $ 54,655 ​ $ 53,344 Per common share amount ​ $ 4.52 ​ $ 4.20 ​ Options outstanding at September 30, 2023 and 2022, to purchase 758,129 and 364,199 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, 2023 and 2022, respectively. Options outstanding at September 30, 2023 and 2022, to purchase 675,768 and 366,699 shares of common stock, respectively, were not included in the computation of diluted earnings per common share for each of 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, 2023 and 2022, respectively. ​ NOTE 5: INVESTMENT SECURITIES Held-to-maturity securities (“HTM”), which include any security for which the Company has both the positive intent and ability to hold until maturity, are carried at historical cost adjusted for amortization of premiums and accretion of discounts. Premiums and discounts are amortized and accreted, respectively, to interest income over the security’s estimated life. Prepayments are anticipated for certain mortgage-backed securities. Premiums on callable securities are amortized to their earliest call date. Available-for-sale securities (“AFS”), which include any security for which the Company has no immediate plan to sell but which may be sold in the future, are carried at fair value. Realized gains and losses, based on specifically identified amortized cost of the individual security, are included in non-interest income. Unrealized gains and losses are recorded, net of related income tax effects, in stockholders’ equity. Premiums and discounts are amortized and accreted, respectively, to interest income over the estimated life of the security. Prepayments are anticipated for certain mortgage-backed and Small Business Administration (SBA) securities. Premiums on callable securities are amortized to their earliest call date. 10 ​ The amortized cost and fair values of securities were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2023 ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Fair ​ Cost Gains Losses Value ​ (In Thousands) AVAILABLE-FOR-SALE SECURITIES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities $ 314,632 $ — $ 54,143 $ 260,489 Agency collateralized mortgage obligations ​ ​ 86,687 ​ ​ — ​ ​ 13,553 ​ ​ 73,134 States and political subdivisions ​ ​ 59,273 ​ ​ 10 ​ ​ 6,893 ​ ​ 52,390 Small Business Administration securities ​ ​ 71,628 ​ ​ — ​ ​ 9,693 ​ ​ 61,935 ​ $ 532,220 $ 10 $ 84,282 $ 447,948 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2023 ​ ​ ​ ​ ​ ​ Amortized ​ Gross ​ Gross ​ ​ ​ ​ Amortized ​ Fair Value ​ Carrying ​ Unrealized ​ Unrealized ​ Fair ​ Cost Adjustment Value Gains Losses Value ​ ​ (In Thousands) HELD-TO-MATURITY SECURITIES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities ​ $ 72,927 ​ $ 2,581 ​ $ 75,508 ​ $ — ​ $ 12,340 ​ $ 63,168 Agency collateralized mortgage obligations ​ 117,593 ​ ( 2,583 ) ​ 115,010 ​ — ​ 17,195 ​ 97,815 States and political subdivisions ​ 6,200 ​ ( 2 ) ​ 6,198 ​ — ​ 1,091 ​ 5,107 ​ ​ $ 196,720 ​ $ ( 4 ) ​ $ 196,716 ​ $ — ​ $ 30,626 ​ $ 166,090 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Fair ​ Cost Gains Losses Value ​ (In Thousands) AVAILABLE-FOR-SALE SECURITIES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities $ 327,266 $ — $ 40,784 $ 286,482 Agency collateralized mortgage obligations ​ ​ 90,205 ​ ​ — ​ ​ 11,731 ​ ​ 78,474 States and political subdivisions securities ​ ​ 60,667 ​ ​ 119 ​ ​ 3,291 ​ ​ 57,495 Small Business Administration securities ​ ​ 75,076 ​ ​ — ​ ​ 6,935 ​ ​ 68,141 ​ $ 553,214 $ 119 $ 62,741 $ 490,592 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Amortized ​ Gross ​ Gross ​ ​ ​ ​ ​ Amortized ​ Fair Value ​ Carrying ​ Unrealized ​ Unrealized ​ Fair ​ Cost Adjustment Value Gains Losses Value ​ ​ (In Thousands) HELD-TO-MATURITY SECURITIES: ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities ​ $ 73,891 ​ $ 3,015 ​ $ 76,906 ​ $ — ​ $ 9,820 ​ $ 67,086 Agency collateralized mortgage obligations ​ 122,247 ​ ( 2,885 ) ​ 119,362 ​ — ​ 14,129 ​ 105,233 States and political subdivisions ​ 6,239 ​ ( 12 ) ​ 6,227 ​ — ​ 781 ​ 5,446 ​ ​ $ 202,377 ​ $ 118 ​ $ 202,495 ​ $ — ​ $ 24,730 ​ $ 177,765 ​ 11 ​ The amortized cost and fair value of available-for-sale and held-to-maturity securities at September 30, 2023, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available-for-Sale ​ Held-to-Maturity ​ ​ Amortized ​ Fair ​ Amortized ​ Fair ​ Cost Value Carrying Value Value ​ ​ (In Thousands) One year or less ​ $ — ​ $ — ​ $ — $ — After one through two years ​ ​ — ​ ​ — ​ ​ — ​ ​ — After two through three years ​ ​ — ​ ​ — ​ ​ — ​ ​ — After three through four years ​ ​ 245 ​ ​ 245 ​ ​ — ​ ​ — After four through five years ​ ​ 944 ​ ​ 929 ​ ​ — ​ ​ — After five through fifteen years ​ ​ 9,715 ​ ​ 9,087 ​ ​ 3,249 ​ ​ 2,699 After fifteen years ​ ​ 48,369 ​ ​ 42,129 ​ ​ 2,949 ​ ​ 2,408 Securities not due on a single maturity date ​ ​ 472,947 ​ ​ 395,558 ​ ​ 190,518 ​ ​ 160,983 ​ ​ $ 532,220 ​ $ 447,948 ​ $ 196,716 $ 166,090 ​ Certain available-for-sale investments in debt securities are reported in the financial statements at an amount less than their amortized cost. Total fair value of these investments at September 30, 2023 and December 31, 2022, was approximately $ 446.7 million and $ 472.0 million, respectively, which is approximately 99.7 % and 96.2 % of the Company’s total available-for-sale investment portfolio. A high percentage of the unrealized losses were related to the Company’s mortgage-backed securities, collateralized mortgage obligations and SBA securities, which are issued and guaranteed by U.S. government-sponsored entities and agencies. The Company’s state and political subdivisions securities are investments in insured fixed rate municipal bonds for which the issuers continue to make timely principal and interest payments under the contractual terms of the securities. Held-to-maturity investments in debt securities are reported in the financial statements at their amortized cost at September 30, 2023 and December 31, 2022, which was $ 196.7 million and $ 202.5 million, respectively. Total fair value of these investments at September 30, 2023 and December 31, 2022 was approximately $ 166.1 million and $ 177.8 million, respectively. Held-to-maturity investment securities are evaluated for potential losses under ASU 2016-13. The Company continually assesses its liquidity sources, both on-balance sheet and off-balance sheet, and believes at September 30, 2023, that it has ample liquidity sources to fund its ongoing operations. The Company has the intent and ability to hold these held-to-maturity securities until they are fully repaid. 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 of these debt securities are not credit-related. The following table shows the Company’s available-for-sale and held-to-maturity securities’ 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, 2023 and December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2023 ​ ​ 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) AVAILABLE-FOR-SALE SECURITIES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities $ 1 ​ $ — ​ $ 260,488 ​ $ ( 54,143 ) ​ $ 260,489 ​ $ ( 54,143 ) Agency collateralized mortgage obligations ​ ​ 8,236 ​ ​ ( 1,061 ) ​ ​ 64,898 ​ ​ ( 12,492 ) ​ ​ 73,134 ​ ​ ( 13,553 ) States and political subdivisions securities ​ ​ 14,242 ​ ​ ( 1,387 ) ​ ​ 36,902 ​ ​ ( 5,506 ) ​ ​ 51,144 ​ ​ ( 6,893 ) Small Business Administration securities ​ ​ 7,622 ​ ​ ( 466 ) ​ ​ 54,313 ​ ​ ( 9,227 ) ​ ​ 61,935 ​ ​ ( 9,693 ) ​ $ 30,101 ​ $ ( 2,914 ) ​ $ 416,601 ​ $ ( 81,368 ) ​ $ 446,702 ​ $ ( 84,282 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ HELD-TO-MATURITY SECURITIES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities ​ $ — ​ $ — ​ $ 63,168 ​ $ ( 12,340 ) ​ $ 63,168 ​ $ ( 12,340 ) Agency collateralized mortgage obligations ​ ​ — ​ ​ — ​ ​ 97,815 ​ ​ ( 17,195 ) ​ ​ 97,815 ​ ​ ( 17,195 ) States and political subdivisions securities ​ ​ — ​ ​ — ​ ​ 5,107 ​ ​ ( 1,091 ) ​ ​ 5,107 ​ ​ ( 1,091 ) ​ ​ $ — ​ $ — ​ $ 166,090 ​ $ ( 30,626 ) ​ $ 166,090 ​ $ ( 30,626 ) 12 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ 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) AVAILABLE-FOR-SALE SECURITIES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities $ 221,562 $ ( 27,597 ) $ 64,918 $ ( 13,187 ) $ 286,480 $ ( 40,784 ) Agency collateralized mortgage obligations ​ ​ 28,537 ​ ​ ( 3,262 ) ​ ​ 40,642 ​ ​ ( 8,469 ) ​ ​ 69,179 ​ ​ ( 11,731 ) States and political subdivisions securities ​ ​ 60,473 ​ ​ ( 5,224 ) ​ ​ 7,667 ​ ​ ( 1,711 ) ​ ​ 68,140 ​ ​ ( 6,935 ) Small Business Administration securities ​ ​ 44,455 ​ ​ ( 2,913 ) ​ ​ 3,753 ​ ​ ( 378 ) ​ ​ 48,208 ​ ​ ( 3,291 ) ​ $ 355,027 ​ $ ( 38,996 ) $ 116,980 ​ $ ( 23,745 ) $ 472,007 ​ $ ( 62,741 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ HELD-TO-MATURITY SECURITIES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities ​ $ 59,218 ​ $ ( 7,766 ) ​ $ 7,868 ​ $ ( 2,054 ) ​ $ 67,086 ​ $ ( 9,820 ) Agency collateralized mortgage obligations ​ ​ 61,055 ​ ​ ( 6,411 ) ​ ​ 44,178 ​ ​ ( 7,718 ) ​ ​ 105,233 ​ ​ ( 14,129 ) States and political subdivisions securities ​ ​ 900 ​ ​ ( 101 ) ​ ​ 4,546 ​ ​ ( 680 ) ​ ​ 5,446 ​ ​ ( 781 ) ​ ​ $ 121,173 ​ $ ( 14,278 ) ​ $ 56,592 ​ $ ( 10,452 ) ​ $ 177,765 ​ $ ( 24,730 ) ​ There were no sales of available-for-sale securities during the three or nine months ended September 30, 2023. Available-for-sale securities totaling $ 5.1 million were sold during the three months ended September 30, 2022, resulting in the recognition of a $ 31,000 gain during the period. Available-for-sale securities totaling $ 10.2 million were sold during the nine months ended September 30, 2022, resulting in the recognition of a $ 38,000 gain during the period. Gains and losses on sales of securities are determined on the specific-identification method. 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 as of September 30, 2023 were 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 historically has not experienced losses on these types of securities. Accordingly, no allowance for credit losses has been recorded for these securities. ​ 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 allowance for credit losses is measured using an average historical loss model that incorporates relevant information about past events (including historical credit loss experience on loans with similar risk characteristics), current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the loans. The allowance for credit losses is measured on a collective (pool) basis. Loans are aggregated into pools based on similar risk characteristics, including borrower type, collateral and repayment types and expected credit loss patterns. Loans that do not share similar risk characteristics, primarily classified loans with a balance greater than or equal to $ 100,000 , are evaluated on an individual basis. 13 ​ For loans evaluated for credit losses on a collective basis, average historical loss rates are calculated for each pool using the Company’s historical net charge-offs (combined charge-offs and recoveries by observable historical reporting period) and outstanding loan balances during a lookback period. Lookback periods can be different based on the individual pool and represent management’s credit expectations for the pool of loans over the remaining contractual life. In certain loan pools, if the Company’s own historical loss rate is not reflective of the loss expectations, the historical loss rate is augmented by industry and peer data. The calculated average net charge-off rate is then adjusted for current conditions and reasonable and supportable forecasts. These adjustments increase or decrease the average historical loss rate to reflect expectations of future losses given economic forecasts of key macroeconomic variables including, but not limited to, unemployment rate, gross domestic product (“GDP”), commercial real estate price index, consumer sentiment and construction spending. The adjustments are based on results from various regression models projecting the impact of the macroeconomic variables to loss rates. The forecast is used for a reasonable and supportable period before reverting to historical averages. The forecast-adjusted loss rate is applied to the principal balance over the remaining contractual lives, adjusted for expected prepayments. The contractual term excludes expected extensions, renewals and modifications. Additionally, the allowance for credit losses considers other qualitative factors not included in historical loss rates or macroeconomic forecasts such as changes in portfolio composition, underwriting practices, or significant unique events or conditions. In addition, ASU 2016-13 requires an allowance for off balance sheet credit exposures: unfunded lines of credit, undisbursed portions of loans, written residential and commercial commitments, and letters of credit. To determine the amount needed for allowance purposes, a utilization rate is determined either by the model or internally for each pool. Our loss model calculates the reserve on unfunded commitments based upon the utilization rate multiplied by the average loss rate factors in each pool with unfunded and committed balances. The liability for unfunded lending commitments utilizes the same model as the allowance for credit losses on loans; however, the liability for unfunded lending commitments incorporates assumptions for the portion of unfunded commitments that are expected to be funded. Classes of loans at September 30, 2023 and December 31, 2022 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ 2023 ​ 2022 ​ ​ (In Thousands) One- to four-family residential construction $ 29,383 ​ $ 33,849 ​ Subdivision construction ​ ​ 26,412 ​ ​ 32,067 ​ Land development ​ ​ 54,633 ​ ​ 41,613 ​ Commercial construction ​ ​ 750,818 ​ ​ 757,690 ​ Owner occupied one- to four-family residential ​ ​ 773,082 ​ ​ 778,533 ​ Non-owner occupied one- to four-family residential ​ ​ 123,750 ​ ​ 124,870 ​ Commercial real estate ​ ​ 1,503,915 ​ ​ 1,530,663 ​ Other residential ​ ​ 845,373 ​ ​ 781,761 ​ Commercial business ​ ​ 343,648 ​ ​ 293,228 ​ Industrial revenue bonds ​ ​ 12,292 ​ ​ 12,852 ​ Consumer auto ​ ​ 29,329 ​ ​ 37,281 ​ Consumer other ​ ​ 32,941 ​ ​ 33,732 ​ Home equity lines of credit ​ ​ 111,665 ​ ​ 123,242 ​ ​ ​ ​ 4,637,241 ​ ​ 4,581,381 ​ Allowance for credit losses on loans ​ ​ ( 64,753 ) ​ ​ ( 63,480 ) ​ Deferred loan fees and gains, net ​ ​ ( 7,921 ) ​ ​ ( 11,065 ) ​ ​ $ 4,564,567 ​ $ 4,506,836 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average interest rate ​ ​ 6.16 % ​ 5.54 % ​ 14 ​ The following tables present the classes of loans by aging as of the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 $ — ​ $ 12 ​ $ — ​ $ 12 ​ $ 29,371 ​ $ 29,383 ​ $ — Subdivision construction ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 26,412 ​ ​ 26,412 ​ ​ — Land development ​ ​ — ​ ​ — ​ ​ 384 ​ ​ 384 ​ ​ 54,249 ​ ​ 54,633 ​ ​ — Commercial construction ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 750,818 ​ ​ 750,818 ​ ​ — Owner occupied one- to four-family residential ​ ​ 122 ​ ​ 69 ​ ​ 242 ​ ​ 433 ​ ​ 772,649 ​ ​ 773,082 ​ ​ — Non-owner occupied one- to four-family residential ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 123,750 ​ ​ 123,750 ​ ​ — Commercial real estate ​ ​ — ​ ​ 191 ​ ​ 10,131 ​ ​ 10,322 ​ ​ 1,493,593 ​ ​ 1,503,915 ​ ​ — Other residential ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 845,373 ​ ​ 845,373 ​ ​ — Commercial business ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 343,648 ​ ​ 343,648 ​ ​ — Industrial revenue bonds ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 12,292 ​ ​ 12,292 ​ ​ — Consumer auto ​ ​ 45 ​ ​ 3 ​ ​ 9 ​ ​ 57 ​ ​ 29,272 ​ ​ 29,329 ​ ​ — Consumer other ​ ​ 206 ​ ​ 11 ​ ​ 33 ​ ​ 250 ​ ​ 32,691 ​ ​ 32,941 ​ ​ — Home equity lines of credit ​ ​ 123 ​ ​ 54 ​ ​ 32 ​ ​ 209 ​ ​ 111,456 ​ ​ 111,665 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ $ 496 ​ $ 340 ​ $ 10,831 ​ $ 11,667 ​ $ 4,625,574 ​ $ 4,637,241 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 $ — ​ $ — ​ $ — ​ $ — ​ $ 33,849 ​ $ 33,849 ​ $ — Subdivision construction ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 32,067 ​ ​ 32,067 ​ ​ — Land development ​ ​ — ​ ​ — ​ ​ 384 ​ ​ 384 ​ ​ 41,229 ​ ​ 41,613 ​ ​ — Commercial construction ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 757,690 ​ ​ 757,690 ​ ​ — Owner occupied one- to four-family residential ​ ​ 2,568 ​ ​ 462 ​ ​ 722 ​ ​ 3,752 ​ ​ 774,781 ​ ​ 778,533 ​ ​ — Non-owner occupied one- to four-family residential ​ ​ — ​ ​ 63 ​ ​ — ​ ​ 63 ​ ​ 124,807 ​ ​ 124,870 ​ ​ — Commercial real estate ​ ​ 196 ​ ​ — ​ ​ 1,579 ​ ​ 1,775 ​ ​ 1,528,888 ​ ​ 1,530,663 ​ ​ — Other residential ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 781,761 ​ ​ 781,761 ​ ​ — Commercial business ​ ​ 8 ​ ​ — ​ ​ 586 ​ ​ 594 ​ ​ 292,634 ​ ​ 293,228 ​ ​ — Industrial revenue bonds ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 12,852 ​ ​ 12,852 ​ ​ — Consumer auto ​ ​ 100 ​ ​ 34 ​ ​ 14 ​ ​ 148 ​ ​ 37,133 ​ ​ 37,281 ​ ​ — Consumer other ​ ​ 288 ​ ​ 114 ​ ​ 111 ​ ​ 513 ​ ​ 33,219 ​ ​ 33,732 ​ ​ — Home equity lines of credit ​ ​ 234 ​ ​ 38 ​ ​ 274 ​ ​ 546 ​ ​ 122,696 ​ ​ 123,242 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ $ 3,394 ​ $ 711 ​ $ 3,670 ​ $ 7,775 ​ $ 4,573,606 ​ $ 4,581,381 ​ $ — ​ 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. 15 ​ Non-accruing loans are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ 2023 ​ 2022 ​ ​ (In Thousands) One- to four-family residential construction ​ $ — ​ $ — Subdivision construction ​ ​ — ​ ​ — Land development ​ ​ 384 ​ ​ 384 Commercial construction ​ ​ — ​ ​ — Owner occupied one- to four-family residential ​ ​ 242 ​ ​ 722 Non-owner occupied one- to four-family residential ​ ​ — ​ ​ — Commercial real estate ​ ​ 10,131 ​ ​ 1,579 Other residential ​ ​ — ​ ​ — Commercial business ​ ​ — ​ ​ 586 Industrial revenue bonds ​ ​ — ​ ​ — Consumer auto ​ ​ 9 ​ ​ 14 Consumer other ​ ​ 33 ​ ​ 111 Home equity lines of credit ​ ​ 32 ​ ​ 274 Total non-accruing loans ​ $ 10,831 ​ $ 3,670 ​ No interest income was recorded on these loans for the three and nine months ended September 30, 2023 and 2022, respectively. Nonaccrual loans for which there is no related allowance for credit losses as of September 30, 2023 totaled $ 1.7 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 provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty based on the Company’s assessment as of the reporting date. Collateral-dependent loans are identified primarily by a classified risk rating with a loan balance equal to or greater than $ 100,000 , including, but not limited to, any loan in process of foreclosure or repossession. The following table presents the activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2023 and 2022. During the three months ended September 30, 2023, the Company did no t record a provision expense on its portfolio of outstanding loans. During the nine months ended September 30, 2023, the Company recorded provision expense of $ 1.5 million on its portfolio of outstanding loans. During both the three and nine months ended September 30, 2022, the Company recorded provision expense of $ 2.0 million on its portfolio of outstanding loans. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, 2023 ​ $ 11,818 ​ $ 13,189 ​ $ 25,508 ​ $ 2,502 ​ $ 7,827 ​ $ 4,008 ​ $ 64,852 Provision (credit) charged to expense ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Losses charged off ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 498 ) ​ ​ ( 498 ) Recoveries ​ ​ 41 ​ ​ — ​ ​ — ​ ​ — ​ ​ 28 ​ ​ 330 ​ ​ 399 Balance, September 30, 2023 ​ $ 11,859 ​ $ 13,189 ​ $ 25,508 ​ $ 2,502 ​ $ 7,855 ​ $ 3,840 ​ $ 64,753 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, June 30, 2022 ​ $ 9,434 ​ $ 10,612 ​ $ 28,604 ​ $ 2,797 ​ $ 4,365 ​ $ 5,246 ​ $ 61,058 Provision (credit) charged to expense ​ ​ 1,076 ​ ​ 881 ​ ​ ( 1,105 ) ​ ​ 265 ​ ​ 1,302 ​ ​ ( 419 ) ​ ​ 2,000 Losses charged off ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 50 ) ​ ​ ( 571 ) ​ ​ ( 621 ) Recoveries ​ ​ 20 ​ ​ — ​ ​ 1 ​ ​ — ​ ​ 15 ​ ​ 288 ​ ​ 324 Balance, September 30, 2022 ​ $ 10,530 ​ $ 11,493 ​ $ 27,500 ​ $ 3,062 ​ $ 5,632 ​ $ 4,544 ​ $ 62,761 ​ 16 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, January 1, 2023 ​ $ 11,171 ​ $ 12,110 ​ $ 27,096 ​ $ 2,865 ​ $ 5,822 ​ $ 4,416 ​ $ 63,480 Provision (credit) charged to expense ​ ​ 647 ​ ​ 1,079 ​ ​ ( 1,590 ) ​ ​ ( 363 ) ​ ​ 1,851 ​ ​ ( 124 ) ​ ​ 1,500 Losses charged off ​ ​ ( 31 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,409 ) ​ ​ ( 1,440 ) Recoveries ​ ​ 72 ​ ​ — ​ ​ 2 ​ ​ — ​ ​ 182 ​ ​ 957 ​ ​ 1,213 Balance, September 30, 2023 ​ $ 11,859 ​ $ 13,189 ​ $ 25,508 ​ $ 2,502 ​ $ 7,855 ​ $ 3,840 ​ $ 64,753 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, January 1, 2022 ​ $ 9,364 ​ $ 10,502 ​ $ 28,604 ​ $ 2,797 ​ $ 4,142 ​ $ 5,345 ​ $ 60,754 Provision (credit) charged to expense ​ 1,076 ​ ​ 881 ​ ​ ( 1,105 ) ​ ​ 265 ​ ​ 1,302 ​ ​ ( 419 ) ​ ​ 2,000 Losses charged off ​ ( 38 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 50 ) ​ ​ ( 1,403 ) ​ ​ ( 1,491 ) Recoveries ​ 128 ​ ​ 110 ​ ​ 1 ​ ​ — ​ ​ 238 ​ ​ 1,021 ​ ​ 1,498 Balance, September 30, 2022 ​ $ 10,530 ​ $ 11,493 ​ $ 27,500 ​ $ 3,062 ​ $ 5,632 ​ $ 4,544 ​ $ 62,761 ​ The following table presents the activity in the allowance for unfunded commitments by portfolio segment for the three and nine months ended September 30, 2023 and 2022. The provision for losses on unfunded commitments for the three months ended September 30, 2023 was a credit (negative expense) of $ 1.2 million, compared to a provision expense of $ 1.3 million for the three months ended September 30, 2022. The provision for losses on unfunded commitments for the nine months ended September 30, 2023 was a credit (negative expense) of $ 3.6 million, compared to a provision expense of $ 3.3 million for the nine months ended September 30, 2022. The analysis of the level and mix of unfunded commitments resulted in a decrease in the required reserve for such potential losses in the three and nine month periods of 2023 presented below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, 2023 ​ $ 758 ​ $ 6,791 ​ $ 464 ​ $ 871 ​ $ 987 ​ $ 500 ​ $ 10,371 Provision (credit) charged to expense ​ ​ 146 ​ ​ ( 1,412 ) ​ ​ 33 ​ ​ 108 ​ ​ ( 34 ) ​ ​ ( 36 ) ​ ​ ( 1,195 ) Balance, September 30, 2023 ​ $ 904 ​ $ 5,379 ​ $ 497 ​ $ 979 ​ $ 953 ​ $ 464 ​ $ 9,176 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for unfunded commitments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, June 30, 2022 ​ $ 1,138 ​ $ 7,419 ​ $ 501 ​ $ 695 ​ $ 1,406 ​ $ 500 ​ $ 11,659 Provision (credit) charged to expense ​ ( 401 ) ​ ​ 967 ​ ​ 17 ​ ​ 553 ​ ​ 146 ​ ​ 33 ​ ​ 1,315 Balance, September 30, 2022 ​ $ 737 ​ $ 8,386 ​ $ 518 ​ $ 1,248 ​ $ 1,552 ​ $ 533 ​ $ 12,974 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, January 1, 2023 ​ $ 736 ​ $ 8,624 ​ $ 416 ​ $ 802 ​ $ 1,734 ​ $ 504 ​ $ 12,816 Provision (credit) charged to expense ​ 168 ​ ​ ( 3,245 ) ​ ​ 81 ​ ​ 177 ​ ​ ( 781 ) ​ ​ ( 40 ) ​ ​ ( 3,640 ) Balance, September 30, 2023 $ 904 ​ $ 5,379 ​ $ 497 ​ $ 979 ​ $ 953 ​ $ 464 ​ $ 9,176 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for unfunded commitments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, January 1, 2022 $ 687 ​ $ 5,703 ​ $ 367 ​ $ 908 ​ $ 1,582 ​ $ 382 ​ $ 9,629 Provision (credit) charged to expense ​ 50 ​ ​ 2,683 ​ ​ 151 ​ ​ 340 ​ ​ ( 30 ) ​ ​ 151 ​ ​ 3,345 Balance, September 30, 2022 $ 737 ​ $ 8,386 ​ $ 518 ​ $ 1,248 ​ $ 1,552 ​ $ 533 ​ $ 12,974 ​ 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 (multi-family) segment corresponds to the other residential class. ● The commercial real estate segment includes the commercial real estate and industrial revenue bonds classes. 17 ​ ● The commercial construction segment includes the land development and commercial construction classes. ● The commercial business segment corresponds to the commercial business class. ● The consumer segment includes the consumer auto, consumer other and home equity lines of credit classes. The following table presents the collateral-dependent loans by class of loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2023 December 31, 2022 ​ ​ Principal Specific ​ Principal ​ Specific ​ Balance Allowance Balance Allowance ​ ​ (In Thousands) One- to four-family residential construction ​ $ — ​ $ — ​ $ — ​ $ — Subdivision construction ​ — ​ ​ — ​ ​ — ​ ​ — Land development ​ 384 ​ ​ 192 ​ ​ 384 ​ ​ — Commercial construction ​ — ​ ​ — ​ ​ — ​ ​ — Owner occupied one- to four- family residential ​ 151 ​ ​ — ​ ​ 1,637 ​ ​ 40 Non-owner occupied one- to four-family residential ​ — ​ ​ — ​ ​ — ​ ​ — Commercial real estate ​ 10,126 ​ ​ 1,200 ​ ​ 1,571 ​ ​ — Other residential ​ — ​ ​ — ​ ​ — ​ ​ — Commercial business ​ — ​ ​ — ​ ​ 586 ​ ​ 125 Industrial revenue bonds ​ — ​ ​ — ​ ​ — ​ ​ — Consumer auto ​ — ​ ​ — ​ ​ — ​ ​ — Consumer other ​ — ​ ​ — ​ ​ 160 ​ ​ 80 Home equity lines of credit ​ — ​ ​ — ​ ​ 135 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ $ 10,661 ​ $ 1,392 ​ $ 4,473 ​ $ 245 ​ Modified Loans. As indicated in Note 3 , in March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures . ASU 2022-02 eliminates the troubled debt restructuring recognition and measurement guidance and, instead, requires that an entity evaluate whether the loan modification represents a new loan or a continuation of an existing loan. It also enhances existing disclosure requirements and introduces new disclosure requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU 2022-02 became effective for the Company on January 1, 2023. Adoption of this ASU did not have a material impact on the Company’s results of operations, financial position or liquidity, but resulted in additional disclosure requirements related to gross charge offs by vintage year and the removal of troubled debt restructuring (“TDR”) disclosures, replaced by additional disclosures on the types of modifications of loans to borrowers experiencing financial difficulties. The Corporation has adopted this update prospectively. Under ASU 2022-02, loan modifications are reported if concessions have been granted to borrowers that are experiencing financial difficulty. Information on these loan modifications originated after the effective date is presented according to the new accounting guidance. Reporting periods prior to the adoption of ASU 2022-02 present information on TDRs under the previous disclosure requirements. The estimate of lifetime expected losses utilized in the allowance for credit losses model is developed using average historical loss on loans with similar risk characteristics, which includes losses from modifications of loans to borrowers experiencing financial difficulty. As a result, a change to the allowance for credit losses is generally not recorded upon modification. For modifications to loans made to borrowers experiencing financial difficulty that are adversely classified, the Company determines the allowance for credit losses on an individual basis, using the same process that it utilizes for other adversely classified loans. If collection efforts have begun and the modified loan is subsequently deemed collateral-dependent, the loan is placed on non-accrual status and the allowance for credit losses is determined based on an individual evaluation. If necessary, the loan is charged down to fair market value less sales costs. 18 ​ The following tables show the composition of loan modifications made to borrowers experiencing financial difficulty by the loan portfolio and type of concessions granted during the three and nine months ended September 30, 2023. Each of the types of concessions granted comprised 2 % or less of their respective classes of loan portfolios at September 30, 2023. During the three and nine months ended September 30, 2023, principal forgiveness of $ 13,000 and $ 52,000 , respectively, was completed on consumer loans. A commercial real estate loan modified in the three months ended March 31, 2023, which totaled $ 21.6 million, was paid in full during the three months ended June 30, 2023. Additionally, a one- to four-family residential loan of $ 143,000 and a commercial business loan of $ 16,000 were paid in full during the three months ended September 30, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2023 ​ ​ Interest Rate ​ Term ​ ​ ​ Total ​ Reduction Extension Combination Modifications ​ ​ ​ (In Thousands) Construction and land development $ — ​ $ — ​ $ — ​ $ — One- to four-family residential ​ — ​ ​ — ​ ​ — ​ ​ — Other residential ​ — ​ ​ — ​ ​ — ​ ​ — Commercial real estate ​ — ​ ​ — ​ ​ — ​ ​ — Commercial business ​ — ​ ​ — ​ ​ — ​ ​ — Consumer ​ — ​ ​ 8 ​ ​ — ​ ​ 8 ​ $ — ​ $ 8 ​ $ — ​ $ 8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2023 ​ ​ Interest Rate ​ Term ​ ​ ​ Total ​ Reduction Extension Combination Modifications ​ ​ ​ (In Thousands) Construction and land development $ — ​ $ — ​ $ 1,673 ​ $ 1,673 One- to four-family residential ​ — ​ ​ — ​ ​ — ​ ​ — Other residential ​ — ​ ​ — ​ ​ — ​ ​ — Commercial real estate ​ — ​ ​ 77 ​ ​ 20,895 ​ ​ 20,972 Commercial business ​ — ​ ​ — ​ ​ — ​ ​ — Consumer ​ 6 ​ ​ 8 ​ ​ — ​ ​ 14 ​ $ 6 ​ $ 85 ​ $ 22,568 ​ $ 22,659 ​ The Company closely monitors the performance of loans to borrowers experiencing financial difficulty that are modified to understand the effectiveness of its modification efforts. The following table depicts the performance (under modified terms) at September 30, 2023 of loans that were modified during the nine months ended September 30, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2023 ​ ​ ​ ​ 30-89 Days ​ Over 90 Days ​ ​ ​ Current ​ Past Due ​ Past Due ​ Total ​ ​ ​ (In Thousands) Construction and land development $ 1,673 ​ $ — ​ $ — ​ $ 1,673 One- to four-family residential ​ — ​ ​ — ​ ​ — ​ ​ — Other residential ​ — ​ ​ — ​ ​ — ​ ​ — Commercial real estate ​ 12,433 ​ ​ — ​ ​ 8,539 ​ ​ 20,972 Commercial business ​ — ​ ​ — ​ ​ — ​ ​ — Consumer ​ 14 ​ ​ — ​ ​ — ​ ​ 14 ​ $ 14,120 ​ $ — ​ $ 8,539 ​ $ 22,659 ​ 19 ​ TDRs by class are presented below as of December 31, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ Accruing TDR Loans ​ Non-accruing TDR Loans ​ Total TDR Loans ​ Number Balance Number Balance Number Balance ​ ​ (In Thousands) Construction and land development — ​ $ — ​ — ​ $ — ​ — ​ $ — One- to four-family residential 13 ​ ​ 1,028 ​ 3 ​ ​ 98 ​ 16 ​ ​ 1,126 Other residential — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — Commercial real estate — ​ ​ — ​ 2 ​ ​ 1,571 ​ 2 ​ ​ 1,571 Commercial business — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — Consumer 13 ​ ​ 210 ​ 5 ​ ​ 42 ​ 18 ​ ​ 252 ​ 26 ​ $ 1,238 ​ 10 ​ $ 1,711 ​ 36 ​ $ 2,949 ​ The following table presents newly restructured loans, which were considered TDRs, during the three and nine months ended September 30, 2022, by type of modification: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ Interest Only Term Combination Modifications ​ (In Thousands) Commercial real estate ​ $ — ​ $ — ​ $ — ​ $ — Consumer ​ ​ — ​ ​ — ​ — ​ — ​ ​ $ — ​ $ — ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, 2022 ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ Interest Only Term Combination Modifications ​ ​ (In Thousands) Commercial real estate ​ $ — ​ $ — ​ $ 247 ​ $ 247 Consumer ​ — ​ 4 ​ 3 ​ 7 ​ ​ $ — ​ $ 4 ​ $ 250 ​ $ 254 ​ At December 31, 2022, of the $ 2.9 million in TDRs, $ 1.7 million were classified as substandard using the Company’s internal grading system. The Company had no TDRs that were modified in the previous 12 months and subsequently defaulted during the year ended December 31, 2022. During the three and nine months ended September 30, 2022, $ 66,000 and $ 578,000 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. Loan Risk Ratings . The nature and extent of impairments of modified loans, including those which have experienced a subsequent payment default, are considered in the determination of an appropriate level of the allowance for credit losses. The Company utilizes an internal risk rating system comprised of a series of grades to categorize loans according to perceived risk associated with the expectation of debt repayment. The analysis of the borrower’s ability to repay considers specific information, including but not limited to current financial information, historical payment experience, industry information, collateral levels and collateral types. A risk rating is assigned at loan origination and then monitored throughout the contractual term for possible risk rating changes. Satisfactory loans range from Excellent to Moderate Risk, but generally are loans supported by strong recent financial statements. The character and capacity of the borrower are strong, including reasonable project performance, good industry experience, liquidity and/or net worth. The probability of financial deterioration seems unlikely. Repayment is expected from approved sources over a reasonable period of time. Watch loans are identified when the borrower has capacity to perform according to terms; however, elements of uncertainty exist. Margins of debt service coverage may be narrow, historical patterns of financial performance may be erratic, collateral margins may be diminished and the borrower may be a new and/or thinly capitalized company. Some management weakness may also exist, the borrower may have somewhat limited access to other financial institutions, and that access may diminish in difficult economic times. 20 ​ Special Mention loans have weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of repayment prospects or the Bank’s credit position at some future date. It is a transitional grade that is closely monitored for improvement or deterioration. The Substandard rating is applied to loans where the borrower exhibits well-defined weaknesses that jeopardize its continued performance and are of a severity that the distinct possibility of default exists. Loans are placed on “non-accrual” when management does not expect to collect payments consistent with acceptable and agreed upon terms of repayment. Doubtful loans have all the weaknesses inherent to those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable. The Loss category is used when loans are considered uncollectable and no longer included as an asset. All loans are analyzed for risk rating updates regularly. For larger loans, rating assessments may be more frequent if relevant information is obtained earlier through debt covenant monitoring or overall relationship management. Smaller loans are monitored as identified by the loan officer based on the risk profile of the individual borrower or if the loan becomes past due related to credit issues. Loans rated Watch, Special Mention, Substandard or Doubtful are subject to quarterly review and monitoring processes. In addition to the regular monitoring performed by the lending personnel and credit committees, loans are subject to review by the credit review department, which verifies the appropriateness of the risk ratings for the loans chosen as part of its risk-based review plan. 21 ​ The following table presents a summary of loans by category and risk rating separated by origination and loan class as of September 30, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Term Loans by Origination Year ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ ​ ​ 2023 YTD 2022 2021 2020 2019 Prior Loans Total ​ ​ (In Thousands) One- to four-family residential construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ $ 13,022 ​ $ 10,877 ​ $ 835 ​ $ — ​ $ — ​ $ — ​ $ 4,649 ​ $ 29,383 Watch (5) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Special Mention (6) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Classified (7-9) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total ​ 13,022 ​ ​ 10,877 ​ ​ 835 ​ ​ — ​ ​ — ​ ​ — ​ ​ 4,649 ​ ​ 29,383 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Subdivision construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ 363 ​ ​ 1,097 ​ ​ 24,424 ​ ​ 50 ​ ​ 65 ​ ​ 413 ​ ​ — ​ ​ 26,412 Watch (5) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Special Mention (6) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Classified (7-9) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total ​ 363 ​ ​ 1,097 ​ ​ 24,424 ​ ​ 50 ​ ​ 65 ​ ​ 413 ​ ​ — ​ ​ 26,412 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Construction and land development ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ 16,283 ​ ​ 15,588 ​ ​ 5,649 ​ ​ 3,693 ​ ​ 7,389 ​ ​ 4,788 ​ ​ 859 ​ ​ 54,249 Watch (5) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Special Mention (6) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Classified (7-9) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 384 ​ ​ 384 Total ​ 16,283 ​ ​ 15,588 ​ ​ 5,649 ​ ​ 3,693 ​ ​ 7,389 ​ ​ 4,788 ​ ​ 1,243 ​ ​ 54,633 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ 35,953 ​ ​ 368,118 ​ ​ 319,605 ​ ​ 27,142 ​ ​ — ​ ​ — ​ ​ — ​ ​ 750,818 Watch (5) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Special Mention (6) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Classified (7-9) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total ​ 35,953 ​ ​ 368,118 ​ ​ 319,605 ​ ​ 27,142 ​ ​ — ​ ​ — ​ ​ — ​ ​ 750,818 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One- to four-family residential ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ 55,875 ​ ​ 335,152 ​ ​ 208,093 ​ ​ 110,425 ​ ​ 62,448 ​ ​ 122,613 ​ ​ 476 ​ ​ 895,082 Watch (5) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 173 ​ ​ 1,050 ​ ​ 49 ​ ​ 1,272 Special Mention (6) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Classified (7-9) ​ — ​ ​ — ​ ​ — ​ ​ 150 ​ ​ — ​ ​ 328 ​ ​ — ​ ​ 478 Total ​ 55,875 ​ ​ 335,152 ​ ​ 208,093 ​ ​ 110,575 ​ ​ 62,621 ​ ​ 123,991 ​ ​ 525 ​ ​ 896,832 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other residential ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ 13,533 ​ ​ 72,663 ​ ​ 276,593 ​ ​ 218,514 ​ ​ 109,017 ​ ​ 141,056 ​ ​ 3,574 ​ ​ 834,950 Watch (5) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 10,423 ​ ​ — ​ ​ 10,423 Special Mention (6) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Classified (7-9) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total ​ 13,533 ​ ​ 72,663 ​ ​ 276,593 ​ ​ 218,514 ​ ​ 109,017 ​ ​ 151,479 ​ ​ 3,574 ​ ​ 845,373 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ 27,510 ​ ​ 253,867 ​ ​ 226,811 ​ ​ 106,019 ​ ​ 162,782 ​ ​ 669,086 ​ ​ 37,931 ​ ​ 1,484,006 Watch (5) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 5,377 ​ ​ — ​ ​ 5,377 Special Mention (6) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 4,400 ​ ​ — ​ ​ 4,400 Classified (7-9) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 10,132 ​ ​ — ​ ​ 10,132 Total ​ 27,510 ​ ​ 253,867 ​ ​ 226,811 ​ ​ 106,019 ​ ​ 162,782 ​ ​ 688,995 ​ ​ 37,931 ​ ​ 1,503,915 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial business ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ 54,327 ​ ​ 85,991 ​ ​ 41,400 ​ ​ 30,971 ​ ​ 10,636 ​ ​ 61,420 ​ ​ 52,548 ​ ​ 337,293 Watch (5) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,376 ​ ​ — ​ ​ 1,376 Special Mention (6) ​ — ​ ​ 1,230 ​ ​ 4,841 ​ ​ — ​ ​ — ​ ​ — ​ ​ 11,200 ​ ​ 17,271 Classified (7-9) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total ​ 54,327 ​ ​ 87,221 ​ ​ 46,241 ​ ​ 30,971 ​ ​ 10,636 ​ ​ 62,796 ​ ​ 63,748 ​ ​ 355,940 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ 14,008 ​ ​ 13,726 ​ ​ 7,170 ​ ​ 3,374 ​ ​ 1,161 ​ ​ 13,268 ​ ​ 120,640 ​ ​ 173,347 Watch (5) ​ — ​ ​ — ​ ​ 23 ​ ​ — ​ ​ 4 ​ ​ 160 ​ ​ 227 ​ ​ 414 Special Mention (6) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Classified (7-9) ​ — ​ ​ — ​ ​ 1 ​ ​ 12 ​ ​ — ​ ​ 129 ​ ​ 32 ​ ​ 174 Total ​ 14,008 ​ ​ 13,726 ​ ​ 7,194 ​ ​ 3,386 ​ ​ 1,165 ​ ​ 13,557 ​ ​ 120,899 ​ ​ 173,935 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Combined ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ 230,874 ​ ​ 1,157,079 ​ ​ 1,110,580 ​ ​ 500,188 ​ ​ 353,498 ​ ​ 1,012,644 ​ ​ 220,677 ​ ​ 4,585,540 Watch (5) ​ — ​ ​ — ​ ​ 23 ​ ​ — ​ ​ 177 ​ ​ 18,386 ​ ​ 276 ​ ​ 18,862 Special Mention (6) ​ — ​ ​ 1,230 ​ ​ 4,841 ​ ​ — ​ ​ — ​ ​ 4,400 ​ ​ 11,200 ​ ​ 21,671 Classified (7-9) ​ — ​ ​ — ​ ​ 1 ​ ​ 162 ​ ​ — ​ ​ 10,589 ​ ​ 416 ​ ​ 11,168 Total ​ $ 230,874 ​ $ 1,158,309 ​ $ 1,115,445 ​ $ 500,350 ​ $ 353,675 ​ $ 1,046,019 ​ $ 232,569 ​ $ 4,637,241 ​ 22 ​ The following table presents a summary of loans by category and risk rating separated by origination and loan class as of December 31, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Term Loans by Origination Year ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving ​ ​ ​ 2022 2021 2020 2019 2018 Prior Loans Total ​ ​ (In Thousands) One- to four-family residential construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ $ 21,885 ​ $ 7,265 ​ $ 1,391 ​ $ — ​ $ — ​ $ — ​ $ 3,308 ​ $ 33,849 Watch (5) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Special Mention (6) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Classified (7-9) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total ​ ​ 21,885 ​ ​ 7,265 ​ ​ 1,391 ​ ​ — ​ ​ — ​ ​ — ​ ​ 3,308 ​ ​ 33,849 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Subdivision construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ ​ 4,478 ​ ​ 25,864 ​ ​ 800 ​ ​ 203 ​ ​ 134 ​ ​ 588 ​ ​ — ​ ​ 32,067 Watch (5) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Special Mention (6) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Classified (7-9) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total ​ ​ 4,478 ​ ​ 25,864 ​ ​ 800 ​ ​ 203 ​ ​ 134 ​ ​ 588 ​ ​ — ​ ​ 32,067 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Construction and land development ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ ​ 16,746 ​ ​ 6,914 ​ ​ 4,866 ​ ​ 7,338 ​ ​ 762 ​ ​ 3,990 ​ ​ 613 ​ ​ 41,229 Watch (5) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Special Mention (6) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Classified (7-9) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 384 ​ ​ 384 Total ​ ​ 16,746 ​ ​ 6,914 ​ ​ 4,866 ​ ​ 7,338 ​ ​ 762 ​ ​ 3,990 ​ ​ 997 ​ ​ 41,613 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ ​ 113,512 ​ ​ 446,125 ​ ​ 176,340 ​ ​ 21,713 ​ ​ — ​ ​ — ​ ​ — ​ ​ 757,690 Watch (5) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Special Mention (6) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Classified (7-9) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total ​ 113,512 ​ ​ 446,125 ​ ​ 176,340 ​ ​ 21,713 ​ ​ — ​ ​ — ​ ​ — ​ ​ 757,690 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ One- to four-family residential ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ ​ 340,886 ​ ​ 219,504 ​ ​ 128,509 ​ ​ 73,162 ​ ​ 39,685 ​ ​ 97,236 ​ ​ 687 ​ ​ 899,669 Watch (5) ​ ​ — ​ ​ — ​ ​ — ​ ​ 179 ​ ​ 88 ​ ​ 1,341 ​ ​ 57 ​ ​ 1,665 Special Mention (6) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Classified (7-9) ​ ​ — ​ ​ — ​ ​ 158 ​ ​ — ​ ​ — ​ ​ 1,832 ​ ​ 79 ​ ​ 2,069 Total ​ ​ 340,886 ​ ​ 219,504 ​ ​ 128,667 ​ ​ 73,341 ​ ​ 39,773 ​ ​ 100,409 ​ ​ 823 ​ ​ 903,403 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other residential ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ ​ 83,822 ​ ​ 133,648 ​ ​ 168,232 ​ ​ 142,630 ​ ​ 122,614 ​ ​ 123,538 ​ ​ 3,939 ​ ​ 778,423 Watch (5) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 3,338 ​ ​ — ​ ​ 3,338 Special Mention (6) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Classified (7-9) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total ​ 83,822 ​ ​ 133,648 ​ ​ 168,232 ​ ​ 142,630 ​ ​ 122,614 ​ ​ 126,876 ​ ​ 3,939 ​ ​ 781,761 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ ​ 221,341 ​ ​ 171,484 ​ ​ 109,939 ​ ​ 203,426 ​ ​ 185,682 ​ ​ 577,216 ​ ​ 36,658 ​ ​ 1,505,746 Watch (5) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 23,338 ​ ​ — ​ ​ 23,338 Special Mention (6) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Classified (7-9) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,579 ​ ​ — ​ ​ 1,579 Total ​ ​ 221,341 ​ ​ 171,484 ​ ​ 109,939 ​ ​ 203,426 ​ ​ 185,682 ​ ​ 602,133 ​ ​ 36,658 ​ ​ 1,530,663 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial business ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ ​ 45,349 ​ ​ 66,258 ​ ​ 39,645 ​ ​ 15,505 ​ ​ 9,309 ​ ​ 65,307 ​ ​ 64,088 ​ ​ 305,461 Watch (5) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 34 ​ ​ — ​ ​ 34 Special Mention (6) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Classified (7-9) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 394 ​ ​ 191 ​ ​ 585 Total ​ ​ 45,349 ​ ​ 66,258 ​ ​ 39,645 ​ ​ 15,505 ​ ​ 9,309 ​ ​ 65,735 ​ ​ 64,279 ​ ​ 306,080 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ ​ 21,309 ​ ​ 11,168 ​ ​ 5,711 ​ ​ 2,708 ​ ​ 3,263 ​ ​ 16,380 ​ ​ 132,792 ​ ​ 193,331 Watch (5) ​ ​ — ​ ​ 28 ​ ​ — ​ ​ 7 ​ ​ — ​ ​ 160 ​ ​ 100 ​ ​ 295 Special Mention (6) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Classified (7-9) ​ ​ — ​ ​ 11 ​ ​ 9 ​ ​ — ​ ​ 2 ​ ​ 248 ​ ​ 359 ​ ​ 629 Total ​ ​ 21,309 ​ ​ 11,207 ​ ​ 5,720 ​ ​ 2,715 ​ ​ 3,265 ​ ​ 16,788 ​ ​ 133,251 ​ ​ 194,255 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Combined ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Satisfactory (1-4) ​ ​ 869,328 ​ ​ 1,088,230 ​ ​ 635,433 ​ ​ 466,685 ​ ​ 361,449 ​ ​ 884,255 ​ ​ 242,085 ​ ​ 4,547,465 Watch (5) ​ — ​ ​ 28 ​ ​ — ​ ​ 186 ​ ​ 88 ​ ​ 28,211 ​ ​ 157 ​ ​ 28,670 Special Mention (6) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Classified (7-9) ​ — ​ ​ 11 ​ ​ 167 ​ ​ — ​ ​ 2 ​ ​ 4,053 ​ ​ 1,013 ​ ​ 5,246 Total ​ $ 869,328 ​ $ 1,088,269 ​ $ 635,600 ​ $ 466,871 ​ $ 361,539 ​ $ 916,519 ​ $ 243,255 ​ $ 4,581,381 ​ 23 ​ ​ ​ 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. The following table presents the balances of acquired loans related to the various FDIC-assisted transactions at September 30, 2023 and December 31, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sun Security ​ ​ ​ ​ ​ TeamBank Vantus Bank Bank InterBank Valley Bank ​ ​ (In Thousands) September 30, 2023 ​ ​ ​ ​ ​ Carrying value of loans receivable ​ $ 2,225 ​ $ 3,188 ​ $ 6,417 ​ $ 20,804 ​ $ 11,139 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ ​ Carrying value of loans receivable ​ $ 2,703 ​ $ 3,983 ​ $ 7,221 ​ $ 24,402 ​ $ 12,750 ​ ​ ​ 24 ​ NOTE 8: OTHER REAL ESTATE OWNED AND REPOSSESSIONS Major classifications of other real estate owned were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ 2023 ​ 2022 ​ ​ (In Thousands) Foreclosed assets held for sale and repossessions ​ ​ One- to four-family construction ​ $ — ​ $ — Subdivision construction ​ — ​ — Land development ​ — ​ — Commercial construction ​ — ​ — One- to four-family residential ​ — ​ — Other residential ​ — ​ — Commercial real estate ​ — ​ — Commercial business ​ — ​ — Consumer ​ 38 ​ 50 ​ ​ ​ ​ ​ Foreclosed assets held for sale and repossessions ​ 38 ​ 50 ​ ​ ​ ​ ​ ​ ​ Other real estate owned not acquired through foreclosure ​ — ​ 183 ​ ​ ​ ​ ​ ​ ​ Other real estate owned and repossessions ​ $ 38 ​ $ 233 ​ At September 30, 2023, there was no other real estate owned not acquired through foreclosure, as two properties were sold during the nine months ended September 30, 2023. At December 31, 2022, other real estate owned not acquired through foreclosure included two properties, both of which were branch locations that were closed and held for sale. At September 30, 2023 and December 31, 2022, residential mortgage loans totaling $ 27,000 and $ 173,000 , respectively, were in the process of foreclosure. Expenses applicable to other real estate owned and repossessions included the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ September 30, ​ ​ 2023 2022 ​ ​ (In Thousands) Net gains on sales of other real estate owned and repossessions ​ $ ( 22 ) ​ $ ( 5 ) Valuation write-downs ​ — ​ ​ — Operating expenses, net of rental income ​ 84 ​ ​ 89 ​ ​ $ 62 ​ $ 84 ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended ​ ​ September 30, ​ ​ 2023 2022 ​ ​ (In Thousands) Net gains on sales of other real estate owned and repossessions ​ $ ( 41 ) ​ $ ( 148 ) Valuation write-downs ​ 82 ​ ​ 23 Operating expenses, net of rental income ​ 222 ​ ​ 438 ​ ​ $ 263 ​ $ 313 ​ ​ 25 ​ NOTE 9: PREMISES AND EQUIPMENT Major classifications of premises and equipment, stated at cost, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ 2023 2022 ​ ​ (In Thousands) Land ​ $ 39,617 ​ $ 39,622 Buildings and improvements ​ 106,988 ​ 105,096 Furniture, fixtures and equipment ​ 70,035 ​ 67,505 Operating leases right of use asset ​ 6,900 ​ 7,397 ​ ​ 223,540 ​ 219,620 Less: accumulated depreciation ​ 83,647 ​ 78,550 ​ $ 139,893 ​ $ 141,070 ​ Leases. In 2019, the Company adopted ASU 2016-02, Leases (Topic 842). Adoption of this ASU resulted in the Company initially recognizing a right of use asset and corresponding lease liability of $ 9.5 million. The amount of the right of use asset and corresponding lease liability will fluctuate based on the Company’s lease terminations, new leases and lease modifications and renewals. As of September 30, 2023, the lease right of use asset value was $ 6.9 million and the corresponding lease liability was $ 7.1 million. As of December 31, 2022, the lease right of use asset value was $ 7.4 million and the corresponding lease liability was $ 7.6 million. At September 30, 2023, expected lease terms ranged from 0.6 years to 15.2 years with a weighted-average lease term of 7.0 years. The weighted-average discount rate at September 30, 2023 was 3.76 %. For the three months ended September 30, 2023 and 2022, lease expense was $ 446,000 and $ 408,000 , respectively. For the nine months ended September 30, 2023 and 2022, lease expense was $ 1.3 million and $ 1.2 million, respectively. The Company’s short-term leases related to offsite ATMs have both fixed and variable lease payment components, based on the number of transactions at the various ATMs. The variable portion of these lease payments is not material and the total lease expense related to ATMs for the three months ended September 30, 2023 and 2022 was $ 84,000 and $ 80,000 , respectively. The total lease expense related to ATMs for the nine months ended September 30, 2023 and 2022 was $ 234,000 and $ 228,000 , respectively. 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, 2023 and 2022, income recognized from these lease agreements was $ 326,000 and $ 300,000 , respectively, and was included in occupancy and equipment expense. In the nine months ended September 30, 2023 and 2022, income recognized from these lease agreements was $ 975,000 and $ 890,000 , respectively, and was included in occupancy and equipment expense. ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2023 December 31, 2022 ​ ​ (In Thousands) Statement of Financial Condition ​ ​ ​ ​ ​ ​ Operating leases right of use asset ​ $ 6,900 ​ $ 7,397 Operating leases liability ​ $ 7,146 ​ $ 7,599 ​ ​ ​ ​ ​ ​ ​ ​ For the Three Months Ended ​ ​ September 30, 2023 September 30, 2022 ​ ​ (In Thousands) Statement of Income ​ ​ ​ ​ ​ ​ Operating lease costs classified as occupancy and equipment expense (includes short-term lease costs and amortization of right of use asset) ​ $ 446 ​ $ 408 ​ ​ ​ ​ ​ ​ ​ Supplemental Cash Flow Information ​ ​ ​ ​ ​ ​ Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ ​ ​ ​ Operating cash flows from operating leases ​ $ 439 ​ $ 400 Right of use assets obtained in exchange for lease obligations: ​ ​ ​ ​ ​ ​ Operating leases ​ — ​ ​ 618 ​ 26 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Nine Months Ended ​ September 30, 2023 September 30, 2022 ​ ​ (In Thousands) Statement of Income ​ ​ ​ ​ Operating lease costs classified as occupancy and equipment expense (includes short-term lease costs and amortization of right of use asset) ​ $ 1,289 ​ $ 1,166 ​ ​ ​ ​ ​ ​ ​ Supplemental Cash Flow Information ​ ​ ​ ​ ​ Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ ​ ​ Operating cash flows from operating leases ​ $ 1,234 ​ $ 1,141 Right of use assets obtained in exchange for lease obligations: ​ ​ ​ ​ ​ Operating leases ​ ​ 296 ​ ​ 618 ​ At September 30, 2023, future expected lease payments for leases with terms exceeding one year were as follows (In Thousands): ​ ​ ​ ​ ​ 2023 $ 356 2024 ​ 1,313 2025 ​ 1,297 2026 ​ 1,241 2027 ​ 1,173 2028 ​ ​ 900 Thereafter ​ 1,899 ​ ​ ​ ​ Future lease payments expected ​ 8,179 ​ ​ ​ ​ Less: interest portion of lease payments ​ ( 1,033 ) ​ ​ ​ ​ Lease liability ​ $ 7,146 ​ ​ NOTE 10: DEPOSITS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ 2023 2022 ​ ​ (In Thousands) Time Deposits: ​ ​ ​ ​ ​ ​ 0.00 % - 0.99 % ​ $ 112,109 ​ $ 280,784 1.00 % - 1.99 % ​ 26,604 ​ ​ 125,951 2.00 % - 2.99 % ​ 48,463 ​ ​ 381,547 3.00 % - 3.99 % ​ 176,880 ​ ​ 228,131 4.00 % - 4.99 % ​ ​ 624,054 ​ ​ 4,883 5.00 % and above ​ ​ 8,270 ​ ​ — Total time deposits (weighted average rate 3.53 % and 1.93 %) ​ 996,380 ​ ​ 1,021,296 Non-interest-bearing demand deposits ​ 942,177 ​ ​ 1,063,588 Interest-bearing demand and savings deposits (weighted average rate 1.54 % and 0.65 %) ​ 2,243,684 ​ ​ 2,188,535 Brokered deposits (weighted average rate 5.06 % and 4.03 %) ​ ​ 669,307 ​ ​ 411,491 Total Deposits ​ $ 4,851,548 ​ $ 4,684,910 ​ The Bank utilizes brokered deposits as an additional funding source. The aggregate amount of brokered deposits was approximately $ 669.3 million and $ 411.5 million at September 30, 2023 and December 31, 2022, respectively. At September 30, 2023 and December 31, 2022, brokered deposits included $ 300.0 million and $ 150.0 million, respectively, of purchased funds through the IntraFi Financial network. These IntraFi Financial deposits have a rate of interest that floats daily with an index of effective federal funds rate plus a spread. At September 30, 2023, there were additional brokered deposits totaling $ 133.4 million that had variable rates of interest that reset monthly or quarterly and there were other brokered deposits totaling $ 185.5 million that had fixed rates of interest but are callable at the Bank’s discretion. At September 30, 2023, approximately 35 % of the Company’s total deposits were uninsured, when including deposit accounts of consolidated subsidiaries of the Company and collateralized deposits of unaffiliated entities. Excluding deposit accounts of the Company’s consolidated subsidiaries, approximately 16 % of the Company’s total deposits were uninsured at September 30, 2023. ​ 27 ​ ​ NOTE 11: ADVANCES FROM FEDERAL HOME LOAN BANK At September 30, 2023 and December 31, 2022, there were no outstanding term advances from the Federal Home Loan Bank of Des Moines. At September 30, 2023 and December 31, 2022, there were outstanding overnight borrowings from the Federal Home Loan Bank of Des Moines, which are included in Short-Term Borrowings below in Note 12 . NOTE 12: SECURITIES SOLD UNDER REVERSE REPURCHASE AGREEMENTS AND SHORT-TERM BORROWINGS ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, December 31, ​ ​ 2023 ​ 2022 ​ ​ (In Thousands) Notes payable – Community Development Equity Funds $ 1,610 $ 1,083 Securities sold under reverse repurchase agreements ​ 58,172 ​ 176,843 Overnight borrowings from the Federal Home Loan Bank ​ ​ 82,500 ​ ​ 88,500 ​ ​ $ 142,282 ​ $ 266,426 ​ 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, 2023 ​ December 31, 2022 ​ ​ Overnight and ​ Overnight and ​ Continuous Continuous ​ ​ (In Thousands) Mortgage-backed securities – GNMA, FNMA, FHLMC ​ $ 58,172 ​ $ 176,843 ​ NOTE 13: SUBORDINATED NOTES On June 10, 2020, the Company completed the public offering and sale of $ 75.0 million of its subordinated notes. The notes are due June 15, 2030, and have a fixed interest rate of 5.50 % until June 15, 2025, at which time the rate becomes floating at a rate expected to be equal to three-month term Secured Overnight Financing Rate (SOFR) plus 5.325 %. The Company may call the notes at par beginning on June 15, 2025, and on any scheduled interest payment date thereafter. The notes were sold at par, resulting in net proceeds, after underwriting discounts and commissions, legal, accounting and other professional fees, of approximately $ 73.5 million. Total debt issuance costs of approximately $ 1.5 million were deferred and are being amortized over the expected life of the notes, which is five years . Amortization of the debt issuance costs totaled $ 74,000 during each of the three months ended September 30, 2023 and 2022. Amortization of the debt issuance costs totaled $ 223,000 during each of the nine months ended September 30, 2023 and 2022. 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 5.93 %. At September 30, 2023 and December 31, 2022, subordinated notes are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2023 December 31, 2022 ​ ​ (In Thousands) Subordinated notes ​ $ 75,000 ​ $ 75,000 Less: unamortized debt issuance costs ​ 496 ​ ​ 719 ​ ​ $ 74,504 ​ $ 74,281 ​ 28 ​ 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, ​ ​ 2023 ​ 2022 Tax at statutory rate 21.0 % 21.0 % Nontaxable interest and dividends ( 0.5 ) ​ ( 0.6 ) ​ Tax credits ( 2.8 ) ​ ( 1.7 ) ​ State taxes 2.5 ​ 1.6 ​ Other 1.3 ​ 0.2 ​ ​ 21.5 % 20.5 % ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, ​ ​ 2023 ​ 2022 Tax at statutory rate ​ 21.0 % 21.0 % Nontaxable interest and dividends ( 0.5 ) ​ ( 0.5 ) ​ Tax credits ( 2.5 ) ​ ( 1.7 ) ​ State taxes 1.9 ​ 1.7 ​ Other 0.9 ​ — ​ ​ 20.8 % 20.5 % ​ 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, 2018 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 (MAHC), which has special jurisdiction to hear tax matters and is similar to a trial court, to continue defending the Company’s rights and associated tax position. The Company 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 a total of $ 4.0 million for these tax years and additional amounts could be levied for subsequent tax years. The MAHC has received documents from each party but no hearings have occurred to date. ​ 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. 29 ​ 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, 2023 and December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, 2023 ​ ​ ​ ​ ​ ​ ​ ​ Available-for-sale securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities ​ $ 260,489 ​ $ — ​ $ 260,489 ​ $ — Agency collateralized mortgage obligations ​ 73,134 ​ ​ — ​ ​ 73,134 ​ ​ — States and political subdivisions securities ​ 52,390 ​ ​ — ​ ​ 52,390 ​ ​ — Small Business Administration securities ​ 61,935 ​ ​ — ​ ​ 61,935 ​ ​ — Interest rate derivative asset ​ 10,619 ​ ​ — ​ ​ 10,619 ​ ​ — Interest rate derivative liability ​ ( 45,502 ) ​ ​ — ​ ​ ( 45,502 ) ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available-for-sale securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Agency mortgage-backed securities ​ $ 286,482 ​ $ — ​ $ 286,482 ​ $ — Agency collateralized mortgage obligations ​ 78,474 ​ ​ — ​ ​ 78,474 ​ ​ — States and political subdivisions securities ​ 57,495 ​ ​ — ​ ​ 57,495 ​ ​ — Small Business Administration securities ​ 68,141 ​ ​ — ​ ​ 68,141 ​ ​ — Interest rate derivative asset ​ 11,061 ​ ​ — ​ ​ 11,061 ​ ​ — Interest rate derivative liability ​ ( 42,097 ) ​ ​ — ​ ​ ( 42,097 ) ​ ​ — ​ 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, 2023 and December 31, 2022 as well as the general classification of such assets pursuant to the valuation hierarchy. There were no significant changes in the valuation techniques during the nine-month period ended September 30, 2023. 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, SOFR 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, 2023 or December 31, 2022. 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. 30 ​ 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 hierarchy in which such measurements fell at September 30, 2023 and December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, 2023 ​ ​ ​ ​ ​ ​ ​ ​ Collateral-dependent loans ​ $ 7,531 ​ $ — ​ $ — ​ $ 7,531 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ ​ Collateral-dependent loans ​ $ 785 ​ $ — ​ $ — ​ $ 785 ​ 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, 2023 and December 31, 2022, the aggregate fair value of mortgage loans held for sale was not materially different than their cost. Accordingly, no mortgage loans held for sale were marked down and reported at fair value. Collateral-Dependent Loans . The Company records collateral-dependent loans as Nonrecurring Level 3. If a loan’s fair value as estimated by the Company is less than its carrying value, the Company either records a charge-off of the portion of the loan that exceeds the fair value or establishes a reserve within the allowance for credit losses specific to the loan. Loans for which such charge-offs or reserves were recorded during the nine -months ended September 30, 2023 or the year ended December 31, 2022, are shown in the table above (net of reserves). 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. 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. Held-to-Maturity Securities. Fair values for held-to-maturity securities are estimated based on quoted market prices of similar securities. For these securities, the Company obtains fair value measurements from an independent pricing service, which represent either quoted market prices for the identical asset or fair values determined by pricing models, or other model-based valuation techniques, that consider observable market data, such as interest rate volatilities, SOFR yield curve, credit spreads and prices from market makers and live trading systems. These securities include U.S. government agency securities, mortgage-backed securities, state and municipal bonds and certain other investments. 31 ​ 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. 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 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, 2023 ​ December 31, 2022 ​ ​ Carrying ​ Fair ​ Hierarchy ​ Carrying ​ Fair ​ Hierarchy ​ Amount Value Level Amount Value Level ​ ​ (In Thousands) Financial assets ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 182,315 ​ $ 182,315 1 ​ $ 168,520 ​ $ 168,520 1 Held-to-maturity securities ​ ​ 196,716 ​ ​ 166,090 ​ 2 ​ ​ 202,495 ​ ​ 177,765 ​ 2 Mortgage loans held for sale ​ 5,678 ​ ​ 5,678 2 ​ 4,811 ​ 4,811 2 Loans, net of allowance for credit losses ​ 4,564,567 ​ ​ 4,388,425 3 ​ 4,506,836 ​ 4,391,084 3 Interest receivable ​ 19,366 ​ ​ 19,366 3 ​ 19,107 ​ 19,107 3 Investment in FHLBank stock and other assets ​ 36,038 ​ ​ 36,038 3 ​ 30,814 ​ 30,814 3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ 4,851,548 ​ ​ 4,839,018 3 ​ 4,684,910 ​ 4,672,913 3 Short-term borrowings ​ 142,282 ​ ​ 142,282 3 ​ 266,426 ​ 266,426 3 Subordinated debentures ​ 25,774 ​ ​ 25,774 3 ​ 25,774 ​ 25,774 3 Subordinated notes ​ 74,504 ​ ​ 70,500 2 ​ 74,281 ​ 72,000 2 Interest payable ​ 6,619 ​ ​ 6,619 3 ​ 3,010 ​ 3,010 3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrecognized financial instruments (net of contractual value) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commitments to originate loans ​ — ​ ​ — 3 ​ — ​ — 3 Letters of credit ​ 79 ​ ​ 79 3 ​ 73 ​ 73 3 Lines of credit ​ — ​ ​ — 3 ​ — ​ — 3 ​ ​ ​ 32 ​ 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. At September 30, 2023, the Company had six interest rate swaps and one interest rate cap totaling $ 109.9 million in notional amount with commercial customers, and six interest rate swaps and one interest rate cap with the same aggregate notional amount with third parties related to its program. In addition, the Company has one participation loan purchased totaling $ 8.7 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, 2022, the Company had six interest rate swaps and one interest rate cap totaling $ 107.0 million in notional amount with commercial customers, and six interest rate swaps and one interest rate cap with the same notional amount with third parties related to its program. In addition, at December 31, 2022, the Company had one participation loan purchased totaling $ 8.8 million, in which the lead institution has an interest rate swap with their customer and the economics of the counterparty swap are passed along to the Company through the loan participation. During the three months ended September 30, 2023 and 2022, the Company recognized net gains of $ 55,000 and $ 88,000 , respectively, in non-interest income related to changes in the fair value of these swaps. During the nine months ended September 30, 2023 and 2022, the Company recognized net losses of $ 234,000 and net gains of $ 385,000 , respectively, in non-interest income related to changes in the fair value of these swaps. Fair Value Hedges Interest Rate Swaps . As a strategy to maintain acceptable levels of exposure to the risk of changes in future cash flows due to interest rate fluctuations, in February 2023, the Company entered into interest rate swap transactions as part of its ongoing interest rate management strategies to hedge the risk of certain of its fixed rate brokered deposits. The total notional amount of the swaps was $ 95 million with a termination date of February 28, 2025. Under the terms of the swaps, the Company receives a fixed rate of interest of 4.65 % and pays a floating rate of interest equal to USD-SOFR-COMPOUND plus a spread. The floating rate resets monthly and net settlements of interest due to/from the counterparty also occurs monthly. To the extent that the fixed rate of interest exceeds USD-SOFR-COMPOUND plus the spread, the Company receives net interest settlements which are recorded as a reduction of deposit interest expense. If USD-SOFR-COMPOUND plus the spread exceeds the fixed rate of interest, the Company is required to pay net settlements to the counterparty and record those net payments as interest expense on deposits. 33 ​ Cash Flow Hedges Interest Rate Swaps . As a strategy to maintain acceptable levels of exposure to the risk of changes in future cash flows due to interest rate fluctuations, in October 2018, the Company entered into an interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap was $ 400 million with a termination date of October 6, 2025. Under the terms of the swap, the Company received a fixed rate of interest of 3.018 % and paid a floating rate of interest equal to one-month USD-LIBOR. The floating rate was reset monthly and net settlements of interest due to/from the counterparty also occurred monthly. To the extent that the fixed rate of interest exceeded one-month USD-LIBOR, the Company received net interest settlements which were recorded as loan interest income. If USD-LIBOR exceeded the fixed rate of interest, the Company was required to pay net settlements to the counterparty and record those net payments as a reduction of interest income on loans. In March 2020, the Company and its swap counterparty mutually agreed to terminate the $ 400 million interest rate swap prior to its contractual maturity. The Company was paid $ 45.9 million from its swap counterparty as a result of this termination. This $ 45.9 million, less the accrued interest portion and net of deferred income taxes, is reflected in the Company’s stockholders’ equity as Accumulated Other Comprehensive Income and a portion of it will be accreted to interest income on loans monthly through the original contractual termination date of October 6, 2025. This has the effect of reducing Accumulated Other Comprehensive Income and increasing Net Interest Income and Retained Earnings over the period. At September 30, 2023, the Company expected to have a sufficient amount of eligible variable rate loans to continue to accrete this interest income on the terminated swap in future periods. If this expectation changes and the amount of eligible variable rate loans decreases significantly, the Company may be required to recognize this interest income more rapidly. In March 2022, the Company entered into an interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap is $ 300 million, with a termination date of March 1, 2024. Under the terms of the swap, the Company receives a fixed rate of interest of 1.6725 % and pays a floating rate of interest equal to one-month USD-LIBOR (or the equivalent replacement rate if USD-LIBOR rate is not available). The floating rate resets monthly and net settlements of interest due to/from the counterparty also occur monthly. The floating rate of interest was 5.431 % as of September 30, 2023. To the extent the floating rate of interest exceeds the fixed rate of interest, the Company is required to pay net settlements to the counterparty and records those net payments as a reduction of interest income on loans. If the fixed rate of interest exceeds the floating rate of interest, the Company receives net interest settlements, which are recorded as loan interest income. In July 2022, the Company entered into two additional interest rate swap transactions as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of each swap is $ 200 million with an effective date of May 1, 2023 and a termination date of May 1, 2028. Under the terms of one swap, beginning in May 2023, the Company receives a fixed rate of interest of 2.628 % and pays a floating rate of interest equal to one-month USD-SOFR OIS. Under the terms of the other swap, beginning in May 2023, the Company receives a fixed rate of interest of 5.725 % and pays a floating rate of interest equal to one-month USD-Prime. In each case, the floating rate is reset monthly and net settlements of interest due to/from the counterparty also occur monthly. To the extent the fixed rate of interest exceeds the floating rate of interest, the Company receives net interest settlements, which is recorded as loan interest income. If the floating rate of interest exceeds the fixed rate of interest, the Company pays net settlements to the counterparty and records those net payments as a reduction of interest income on loans. At September 30, 2023, the USD-Prime rate was 8.50 % and the one-month USD-SOFR OIS rate was 5.31663 %. The Company recorded loan interest income of $ 2.0 million on the terminated interest rate swap during each of the three months ended September 30, 2023 and 2022. The Company recorded loan interest income of $ 6.1 million on the terminated interest rate swap during each of the nine months ended September 30, 2023 and 2022. The Company recorded negative loan interest income related to the March 2022 interest rate swap of $ 2.8 million in the three months ended September 30, 2023 and recorded negative loan interest income of $ 428,000 in the three months ended September 30, 2022. The Company recorded negative loan interest income related to the March 2022 interest rate swap of $ 7.5 million in the nine months ended September 30, 2023 and recorded loan interest income of $ 610,000 in the nine months ended September 30, 2022. The Company recorded negative loan interest income related to the two July 2022 interest rate swaps of $ 2.7 million and $ 4.4 million in the three and nine months ended September 30, 2023, respectively. Net settlements on these two interest rate swaps began in May 2023. The effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affected earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. During each of the three and nine months ended September 30, 2023 and 2022, the Company recognized no non-interest income related to changes in the fair value of these derivatives. 34 ​ 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 ​ 2023 ​ 2022 ​ ​ ​ ​ (In Thousands) Derivatives designated as hedging instruments ​ ​ ​ ​ ​ ​ ​ ​ Active interest rate swaps ​ Accrued expenses and other liabilities ​ $ 34,357 ​ $ 31,277 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivatives designated as hedging instruments ​ ​ ​ $ 34,357 ​ $ 31,277 ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivatives not designated as hedging instruments ​ ​ ​ ​ ​ ​ ​ ​ Asset Derivatives ​ ​ ​ ​ ​ ​ ​ Interest rate products Prepaid expenses and other assets ​ $ 10,619 ​ $ 11,061 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivatives not designated as hedging instruments ​ ​ ​ $ 10,619 ​ $ 11,061 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liability Derivatives ​ ​ ​ ​ ​ ​ ​ Interest rate products ​ Accrued expenses and other liabilities ​ $ 11,145 ​ $ 10,820 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivatives not designated as hedging instruments ​ ​ ​ $ 11,145 ​ $ 10,820 ​ The following table presents the effect of cash flow hedge accounting through accumulated other comprehensive income on the statements of comprehensive income: ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount of Gain (Loss) ​ ​ Recognized in AOCI ​ ​ Three Months Ended September 30, Cash Flow Hedges 2023 2022 ​ (In Thousands) Terminated interest rate swap, net of income taxes ​ $ ( 1,580 ) ​ $ ( 1,580 ) Active interest rate swaps, net of income taxes ​ ​ ( 2,547 ) ​ ​ ( 19,898 ) ​ ​ $ ( 4,127 ) ​ $ ( 21,478 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amount of Gain (Loss) ​ ​ Recognized in AOCI ​ ​ Nine Months Ended September 30, Cash Flow Hedges 2023 2022 ​ (In Thousands) Terminated interest rate swap, net of income taxes ​ $ ( 4,688 ) ​ $ ( 4,691 ) Active interest rate swaps, net of income taxes ​ ​ ( 2,323 ) ​ ​ ( 25,570 ) ​ ​ $ ( 7,011 ) ​ $ ( 30,261 ) ​ 35 ​ The following table presents the effect of cash flow hedge accounting on the statements of income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, Cash Flow Hedges 2023 2022 ​ Interest Interest Interest Interest ​ Income Expense Income Expense ​ (In Thousands) Total Interest Income ​ $ 75,272 ​ $ — ​ $ 59,657 ​ $ — Total Interest Expense ​ ​ — ​ ​ 28,534 ​ ​ — ​ ​ 6,759 ​ ​ $ 75,272 ​ $ 28,534 ​ $ 59,657 ​ $ 6,759 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Terminated interest rate swap ​ $ 2,047 ​ $ — ​ $ 2,047 ​ $ — Active interest rate swaps ​ ​ ( 5,545 ) ​ ​ — ​ ​ ( 428 ) ​ ​ — ​ ​ $ ( 3,498 ) ​ $ — ​ $ 1,619 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine Months Ended September 30, Cash Flow Hedges ​ 2023 ​ 2022 ​ ​ Interest ​ Interest ​ Interest ​ Interest ​ Income Expense Income Expense ​ ​ (In Thousands) Total Interest Income ​ $ 220,353 ​ $ — ​ $ 159,028 ​ $ — Total Interest Expense ​ ​ — ​ ​ 72,285 ​ ​ — ​ ​ 14,034 ​ ​ $ 220,353 ​ $ 72,285 ​ $ 159,028 ​ $ 14,034 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Terminated interest rate swap ​ $ 6,076 ​ $ — ​ $ 6,076 ​ $ — Active interest rate swaps ​ ​ ( 11,925 ) ​ ​ — ​ ​ 610 ​ ​ — ​ ​ $ ( 5,849 ) ​ $ — ​ $ 6,686 ​ $ — ​ Agreements with Derivative Counterparties The Company has agreements with its derivative counterparties. If the Company defaults on any of its indebtedness, including a default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. If the Bank fails to maintain its status as a well-capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements. Similarly, the Company could be required to settle its obligations under certain of its agreements if certain regulatory events occur, such as the issuance of a formal directive, or if the Company’s credit rating is downgraded below a specified level. At September 30, 2023, the termination value of derivatives with our derivative dealer counterparties (related to loan level swaps with commercial lending customers and an active interest rate swap to hedge risk related to the Company’s variable rate loans) in an overall net asset position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $ 240,000 . The Company has minimum collateral posting thresholds with its derivative dealer counterparties. At September 30, 2023, the Company had given cash collateral to one derivative counterparty of $ 25.9 million to cover its net fair value position. This counterparty position included collateral from the counterparty of $ 11.3 million for commercial lending swaps, collateral from the Company of $ 36.2 million for interest rate swaps related to variable rate loans and collateral from the Company of $ 834,000 for swaps related to brokered deposits. At December 31, 2022, the termination value of derivatives with our derivative dealer counterparties (related to loan level swaps with commercial lending customers) in a net asset position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $ 242,000 . Additionally, the Company’s activity with one of its derivative counterparties met the level at which the minimum collateral posting thresholds take effect (collateral to be given by the Company) and the Company had posted collateral of $ 20.7 million to the derivative counterparty. If the Company had breached any of these provisions at September 30, 2023 or December 31, 2022, it could have been required to settle its obligations under the agreements at the termination value. Under the collateral agreements between the parties, either party may choose to provide cash or securities to satisfy its collateral requirements. ​ 36 ​