GREAT SOUTHERN BANCORP, INC. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-looking Statements When used in this Quarterly Report on Form 10-Q and in other documents filed or furnished by Great Southern Bancorp, Inc. (the “Company”) with or to the Securities and Exchange Commission (the “SEC”), in the Company’s press releases or other public or stockholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases “may,” “might,” “could,” “should,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “believe,” “estimate,” “project,” “intends” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements also include, but are not limited to, statements regarding plans, objectives, expectations or consequences of announced transactions, known trends and statements about future performance, operations, products and services of the Company. The Company’s ability to predict results or the actual effects of future plans or strategies is inherently uncertain, and the Company’s actual results could differ materially from those contained in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: (i) expected revenues, cost savings, earnings accretion, synergies and other benefits from the Company’s merger and acquisition activities might not be realized within the anticipated time frames or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected; (ii) changes in economic conditions, either nationally or in the Company’s market areas; (iii) the effects of any new or continuing public health issues on general economic and financial market conditions; (iv) fluctuations in interest rates, the effects of inflation or a potential recession, whether caused by Federal Reserve actions or otherwise; (v) the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; (vi) slower or negative economic growth caused by tariffs, changes in energy prices, supply chain disruptions or other factors; (vii) the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; (viii) the possibility of realized or unrealized losses on securities held in the Company’s investment portfolio; (ix) the Company’s ability to access cost-effective funding and maintain sufficient liquidity; (x) fluctuations in real estate values and both residential and commercial real estate market conditions; (xi) the ability to adapt successfully to technological changes to meet customers’ needs and developments in the marketplace; (xii) the possibility that security measures implemented might not be sufficient to mitigate the risk of a cyber-attack or cyber theft, and that such security measures might not protect against systems failures or interruptions; (xiii) legislative or regulatory changes that adversely affect the Company’s business; (xiv) changes in accounting policies and practices or accounting standards; (xv) results of examinations of the Company and the Bank by their regulators, including the possibility that the regulators may, among other things, require the Company to limit its business activities, change its business mix, increase its allowance for credit losses, write-down assets or increase its capital levels, or affect its ability to borrow funds or maintain or increase deposits, which could adversely affect its liquidity and earnings; (xvi) costs and effects of litigation, including settlements and judgments; (xvii) competition; and (xviii) natural disasters, war, terrorist activities or civil unrest and their effects on economic and business environments in which the Company operates. The Company wishes to advise readers that the factors listed above and other risks described in the Company’s most recent Annual Report on Form 10-K, including, without limitation, those described under “Item 1A. Risk Factors,” subsequent Quarterly Reports on Form 10-Q and other documents filed or furnished from time to time by the Company with the SEC (which are available on our website at www.greatsouthernbank.com and the SEC’s website at www.sec.gov), could affect the Company’s financial performance and cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Company does not undertake-and specifically declines any obligation- to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. Critical Accounting Policies, Judgments and Estimates The accounting and financial reporting policies of the Company conform to accounting principles generally accepted in the United States and general practices within the financial services industry. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates. 37 ​ Allowance for Credit Losses and Valuation of Foreclosed Assets On January 1, 2021, the Company adopted the new accounting standard related to the allowance for credit losses. This standard eliminates the probable initial recognition threshold in GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. See Note 6 “Loans and Allowance for Credit Losses” in the Notes to Consolidated Financial Statements included in this report for additional information. The Company believes that the determination of the allowance for credit losses involves a higher degree of judgment and complexity than its other significant accounting policies. The allowance for credit losses is calculated with the objective of maintaining an allowance level believed by management to be sufficient to absorb estimated credit losses. The allowance for credit losses is measured using an average historical loss model that incorporates relevant information about past events (including historical credit loss experience on loans with similar risk characteristics), current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the loans. The allowance for credit losses is measured on a collective (pool) basis. Loans are aggregated into pools based on similar risk characteristics, including borrower type, collateral and repayment types and expected credit loss patterns. Loans that do not share similar risk characteristics, primarily classified loans with a balance of $100,000 or more, are evaluated on an individual basis. For loans evaluated for credit losses on a collective basis, average historical loss rates are calculated for each pool using the Company’s historical net charge-offs (combined charge-offs and recoveries by observable historical reporting period) and outstanding loan balances during a lookback period. Lookback periods can be different based on the individual pool and represent management’s credit expectations for the pool of loans over the remaining contractual life. In certain loan pools, if the Company’s own historical loss rate is not reflective of the loss expectations, the historical loss rate is augmented by industry and peer data. The calculated average net charge-off rate is then adjusted for current conditions and reasonable and supportable forecasts. These adjustments increase or decrease the average historical loss rate to reflect expectations of future losses given economic forecasts of key macroeconomic variables including, but not limited to, unemployment rate, GDP, commercial real estate price index, consumer sentiment and construction spending. The adjustments are based on results from various regression models projecting the impact of the macroeconomic variables to loss rates. The forecast is used for a reasonable and supportable period before reverting to historical averages using a straight-line method. The forecast-adjusted loss rate is applied to the principal balance over the remaining contractual lives, adjusted for expected prepayments. The contractual term excludes expected extensions, renewals and modifications. Additionally, the allowance for credit losses considers other qualitative factors not included in historical loss rates or macroeconomic forecasts such as changes in portfolio composition, underwriting practices, or significant unique events or conditions. See Note 6 “Loans and Allowance for Credit Losses” in the Notes to Consolidated Financial Statements included in this report for additional information regarding the allowance for credit losses. Inherent in this process is the evaluation and risk assessment of individual credit relationships. From time to time, certain credit relationships may deteriorate due to changes in payment performance, cash flow of the borrower, value of collateral, or other factors. Due to these changing circumstances, management may revise its loss estimates and assumptions for these specific credits. In some cases, losses may be realized; in other instances, the factors that led to the deterioration may improve or the credit may be refinanced elsewhere and allocated allowances may be released from the particular credit. In addition, the Company considers that the determination of the valuation of foreclosed assets held for sale involves a high degree of judgment and complexity. The carrying value of foreclosed assets reflects management’s best estimate of the amount to be realized from the sale of the assets. While the estimate is generally based on a valuation by an independent appraiser or recent sales of similar properties, the amount that the Company realizes from the sale of the assets could differ materially from the carrying value reflected in the financial statements, resulting in gains or losses that could materially impact earnings in future periods. 38 ​ Goodwill and Intangible Assets Goodwill and intangible assets that have indefinite useful lives are subject to an impairment test at least annually and more frequently if circumstances indicate their value may not be recoverable. Goodwill is tested for impairment using a process that estimates the fair value of each of the Company’s reporting units compared with its carrying value. The Company defines reporting units as a level below each of its operating segments for which there is discrete financial information that is regularly reviewed. As of June 30 , 2025, the Company had one reporting unit to which goodwill has been allocated – the Bank. If the fair value of a reporting unit exceeds its carrying value, then no impairment is recorded. If the carrying value exceeds the fair value of a reporting unit, further testing is completed comparing the implied fair value of the reporting unit’s goodwill to its carrying value to measure the amount of impairment. Intangible assets that are not amortized are tested for impairment at least annually by comparing the fair values of those assets to their carrying values. At June 30 , 2025, goodwill consisted of $5.4 million at the Bank reporting unit, which included goodwill of $4.2 million that was recorded during 2016 related to the acquisition of 12 branches and the assumption of related deposits in the St. Louis market. Other identifiable deposit intangible assets that are subject to amortization are amortized on a straight-line basis and are now fully amortized. In April 2022, the Company, through its subsidiary Great Southern Bank, entered into a naming rights agreement with Missouri State University related to the main arena on the university’s campus in Springfield, Missouri. The terms of the agreement provide the naming rights to Great Southern Bank for a total cost of $5.5 million, to be paid over a period of seven years. The Company expects to amortize the naming rights intangible assets through non-interest expense over a period not to exceed 15 years. At June 30 , 2025, the amortizable intangible assets included the arena naming rights of $4.5 million, which are reflected in the table below. These amortizable intangible assets are reviewed for impairment if circumstances indicate their value may not be recoverable based on a comparison of fair value. For purposes of testing goodwill for impairment, the Company uses a market approach to value its reporting unit. The market approach applies a market multiple, based on observed purchase transactions for each reporting unit, to the metrics appropriate for the valuation of the operating unit. Significant judgment is applied when goodwill is assessed for impairment. This judgment may include developing cash flow projections, selecting appropriate discount rates, identifying relevant market comparables and incorporating general economic and market conditions. Management does not believe any of the Company’s goodwill or other intangible assets were impaired as of June 30 , 2025. While management believes no impairment existed as of June 30 , 2025, different conditions or assumptions used to measure fair value of the reporting unit, or changes in cash flows or profitability, if significantly negative or unfavorable, could have a material adverse effect on the outcome of the Company’s impairment evaluation in the future. A summary of goodwill and intangible assets as of the dates indicated is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ 2025 2024 ​ ​ (In Thousands) Goodwill – Branch acquisitions ​ $ 5,396 ​ $ 5,396 Arena Naming Rights ​ 4,481 ​ 4,698 ​ ​ $ 9,877 ​ $ 10,094 ​ Current Economic Conditions Changes in economic conditions could cause the values of assets and liabilities recorded in the Company’s financial statements to change rapidly, resulting in material future adjustments to asset values, the allowance for credit losses, or capital that could negatively affect the Company’s ability to meet regulatory capital requirements and maintain sufficient liquidity. Following the housing and mortgage crisis and correction beginning in mid-2007, the United States entered an economic downturn. Unemployment rose from 4.7% in November 2007 to peak at 10.0% in October 2009. Economic conditions improved in the subsequent years, as indicated by higher consumer confidence levels, increased economic activity and low unemployment levels. The U.S. economy continued to operate at historically strong levels until the COVID-19 pandemic in March 2020, which severely affected tourism, labor markets, business travel, immigration, and the global supply chain, among other areas. The economy plunged into recession in the first quarter of 2020, as efforts to contain the spread of the coronavirus forced all but essential business activity, or any work that could not be done from home, to stop, shuttering factories, restaurants, entertainment, sporting events, retail shops, personal services, and more. 39 ​ More than 22 million jobs were lost in March and April 2020 as businesses closed their doors or reduced their operations, sending employees home on furlough or layoffs. With uncertain incomes and limited buying opportunities, consumer spending plummeted. As a result, gross domestic product (GDP), the broadest measure of the nation’s economic output, plunged. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), a fiscal relief bill passed by Congress and signed by the President in March 2020, injected approximately $3 trillion into the economy through direct payments to individuals and loans to small businesses intended to help keep employees on their payroll, fueling a historic bounce-back in economic activity. Total fiscal support to the economy throughout the pandemic, including the CARES Act, the American Rescue Plan of March 2021, and several smaller fiscal packages, totaled well over $5 trillion. The amount of this support was equal to almost 25% of pre-pandemic 2019 GDP and approximately three times the level of support provided during the global financial crisis of 2007-2008. Additionally, the Federal Reserve acted decisively by slashing its benchmark interest rate to near zero and ensuring credit availability to businesses, households, and municipal governments. The Federal Reserve’s efforts largely insulated the financial system from the problems in the economy, a significant difference from the financial crisis of 2007-2008. Purchases of Treasury and agency mortgage-backed securities totaling $120 billion each month by the Federal Reserve commenced shortly after the pandemic began. In November 2021, the Federal Reserve began to taper its quantitative easing (QE), winding down its bond purchases with its final open market purchase conducted on March 9, 2022. The federal government deficit was $2.8 trillion in fiscal 2021, close to $1.4 trillion in fiscal 2022, $1.7 trillion in fiscal 2023 and $1.8 trillion in fiscal 2024. The Federal Reserve aggressively raised the federal funds interest rate from early 2022 through mid - 2023, pushing the federal funds rate to more than 5.50%, its highest level in 22 years. The Federal Reserve’s actions were motivated by surging inflation in 2021 caused by pandemic-fueled spending, which outpaced the ability of producers to supply goods and services after having been impacted by COVID-related shutdowns and clogged transportation systems. The Federal Reserve made some headway in its attempt to force inflation down. The personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred measure of inflation, eased from its peak of 7.1% in June 2022 to 2.9% in December 2023. At June 30, 2025, Core PCE, which excludes food and energy prices, rose 2.8% from one year ago, above the Federal Reserve’s target of 2%. Based on Moody’s U.S. Baseline Outlook and Alternative Scenarios Analysis dated June 2025, real GDP in 2025 is projected to rise 1.5% on an annual average basis; this is an increase to prior GDP forecasts for 2025, which anticipated growth of 1.3%. The new outlook on GDP growth for 2026 and 2027 is 1.4% and 1.8%, respectively, which is a slight decrease from the previous projection of 1.5% and 2.1%. Employment The national unemployment rate decreased slightly to 4.1% for June 2025 compared to 4.2% for March 2025. The number of unemployed individuals was 7.0 million as of June 2025, with 147,000 jobs added during that month. In June 2025, healthcare, social assistance and state and local governments contributed 128,000 of total job gains. As of June 2025, the labor force participation rate (the share of working-age Americans employed or actively looking for a job) remained stable at 62.3%. The unemployment rate for the Midwest, where the Company conducts most of its business, was 4.2% for both the quarter ended June 30, 2025 and the quarter ended March 31, 2025. Unemployment rates for June 2025 in the states where the Company has a branch or a loan production office were: Arizona at 4.1%, Arkansas at 3.7%, Colorado at 4.7%, Georgia at 3.5%, Illinois at 4.6%, Iowa at 3.7%, Kansas at 3.8%, Minnesota at 3.3%, Missouri at 4.0%, Nebraska at 3.0%, North Carolina at 3.7%, and Texas at 4.0%. These rates were relatively unchanged for a majority of the states compared to March 2025. It is unknown whether actions being taken to reduce federal employment levels will impact the unemployment rates in these states. Single Family Housing Existing-home sales decreased 2.7% in June 2025 to a seasonally adjusted annual rate of 3.93 million. No change occurred in year-over-year existing home sales. In the Midwest, existing-home sales slowed to 4% in June 2025 at an annual rate of 950,000, up 2.2% from one year earlier. The median existing-home sales price rose 2% from June 2024 to $435,300 in June 2025. The median price in the Midwest in June 2025 was $337,600, up 3.4% from June 2024. All regions reported median price increases when compared to the prior year. Total housing inventory registered at the end of June 2025 was 1.53 million units, down .6% from May 2025 and up 15.9% from one year ago. Unsold inventory sat at a 4.7-month supply at the end of June 2025, up from 4.6 months at the end of May 2025 and 4.0 months at the end of June 2024. 40 ​ New home construction dropped precipitously after the financial crisis of 2007-2008 and has yet to fully recover. Issues contributing to the country’s current housing shortage include increasing labor and materials costs, availability of building materials, increased interest rates and tighter lending underwriting standards. Single-family housing starts in June 2025 were at a rate of 1.3 million, 4.6% above the revised estimate for May 2025 but 0.5% below June 2024. Sales of new single‐family houses in June 2025 were at a seasonally adjusted annual rate of 627,000 according to the U.S. Census Bureau and the Department of Housing and Urban Development. This was 13.3% below the May 2025 rate of 623,000 and 6.6% below the June 2024 rate of 671,000. The median price of new houses sold in June 2025 was $401,800, which is lower than the May 2025 median price of $422,700. The seasonally‐adjusted estimate of new houses for sale at the end of June 2025 represented a supply of 9.8 months at the current sales rate. According to Freddie Mac, the average commitment rate for a 30-year, fixed-rate mortgage was 6.75% as of June 30, 2025, down from 6.77% one year ago. Other Residential (Multi-Family) Housing and Commercial Real Estate The U.S. multi-family market experienced a continued strong recovery in demand through the first half of 2025, driven by stable economic growth plus a continued slowing of renter households making the jump to home ownership and creating fewer units to backfill. Excluding pandemic level absorption, first-quarter 2025 was the strongest absorption period on record with nearly 130,000 units. Large markets in the South and Southwest, such as Dallas and Phoenix, were absorption leaders. Absorption increases are also fueled by generational transitions – older members of Gen Z as well as Baby Boomers are making their way to rental properties rather than home ownership. Overall vacancy in the multi-family market was 8.2% as of June 2025 and is forecasted to fall below this level by the end of 2025. Vacancies among 4 and 5 Star buildings could decline quickly throughout the remainder of the year as recent developments enter the lease-up phase. Market conditions could stimulate an increase in rent growth across all quality segments due to above average wage growth and changes in supply and demand. The Midwest and Northeast regions have fared the best over the past two years in terms of rent growth. Rents are still down year over year as of June 2025 in 14 of the largest 50 markets, primarily in areas where supply significantly outpaced demand. Controlled increase in projected new supply is expected to keep Midwestern markets more balanced, thereby avoiding the oversupply conditions that contributed to weaker rent growth. Kansas City and Chicago continue to lead the nation in rent growth, each displaying 3% growth in the first quarter of 2025. Our market areas reflected the following apartment vacancy levels as of June 2025: Springfield, Missouri at 6.3%, St. Louis at 10.4%, Kansas City at 8.4%, Minneapolis at 6.6%, Dallas-Fort Worth at 11.9%, Chicago at 4.7%, Atlanta at 12.0%, Phoenix at 12.0%, Denver at 11.4% and Charlotte, North Carolina at 12.4%. Preliminary data suggested that net absorption for the office industry remained positive through the second quarter of 2025. Revisions have confirmed that occupancy losses accelerated, though less severely compared to 2023 and 2024. Through the second quarter of 2025, space for lease increased more than 10 million square feet. A decrease in demand combined with a geographically focused increase in leasing drove the vacancy rate up slightly to 14.1% in June 2025, compared to 13.9% in March 2025. The market vacancy rate is the result of multiple factors. The supply pipeline is diminishing faster than previously expected, currently representing the lowest supply since 2012, with 63.5 million square feet under construction. Construction delays led to under 5 million square feet of new supply in the first half of 2025. Positive absorption across some of the largest office markets, combined with a diminishing pipeline of supply, is expected to continue to hold the national vacancy rate steady. Various indicators show office attendance trending upward in the first half of 2025, albeit slowly. But while attendance was rising, office-using job growth nearly stalled. Transaction volume continued to gain positive momentum in the second quarter of 2025, with $13.8 billion in office sales – up 55% from the same period last year. The market still has not returned to its peak, but the year-over-year surge indicates that buyers are willing to engage in transactions even with macro uncertainties. 41 ​ CoStar reported that office asking rents have remained flat over the past four years. A looming lack of available space in premium new buildings and an ongoing minimal amount of sublease inventory is expected to keep office asking-rent growth nominally positive for the near future. As of June 2025, national office vacancy rates remained stable at 14.1%, while our market areas reflected the following vacancy levels: Springfield, Missouri at 4.2%, St. Louis at 9.7%, Kansas City at 11.0%, Minneapolis at 11.5%, Dallas-Fort Worth at 17.9%, Chicago at 16.8%, Atlanta at 16.9%, Denver at 18.0%, Phoenix at 16.8% and Charlotte, North Carolina at 14.5%. As of June 2025, the U.S. retail market witnessed the highest level of store closures and bankruptcy filings since 2020. Significant competition from e-commerce retailers, rising costs, restricted access to capital and multiple years of below-average closures, all contribute to the uptick in store closures. Bankruptcy filings are correlated to low home sales, which have weighed heavily on furniture, retail, appliance and home improvement sales. Increased competition for space has been largely driven by the limited amount of space developed across the U.S. since 2010. From 2000 to 2009, approximately 300 million square feet of retail space was delivered annually, of which nearly 40% was available for lease. Just 81 million square feet of new retail space has been delivered annually since the start of 2020, with the vast majority comprised of build-to suit projects. This has left minimal second-generation space for tenants looking to expand. Per CoStar, most tenants and brokerage reps continue to report substantial competition for quality available space, resulting in availabilities backfilling at the fastest pace in nearly 15 years. During the second quarter of 2025, national retail vacancy rates remained steady at 4.3% while our market areas reflected the following vacancy levels: Springfield, Missouri at 2.5%, St. Louis at 3.4%, Kansas City at 4.1%, Minneapolis at 2.5%, Dallas-Fort Worth at 4.9%, Chicago at 4.9%, Atlanta at 4.2%, Phoenix at 4.5%, Denver at 4.3%, and Charlotte, North Carolina at 3.2%. Current U.S. industrial market performance continues to favor the tenant, reporting a decade-long high vacancy rate of 7.4%. Deliveries continued to outpace net absorption in the first half of 2025 and impending supply additions will pressure vacancy higher, in conjunction with pressure from ongoing concerns regarding consumer spending. Industrial market weakness is directly impacted by 12-year lows in home sales, which lowered sales of furniture, building materials, and appliances, leading to large distribution center closures by tenants including Big Lots, Ashley Furniture, and Home Depot. The forecast is for weaker absorption and higher near-term vacancy reflecting a projected slowdown in U.S. retail spending growth, which Oxford Economics expects to remain positive but slow considerably in 2025. The U.S. industrial market may be nearing the end of a record development surge. Higher interest rates have caused construction starts on new industrial projects to fall over the past two and a half years. Tariffs present a risk to demand for logistics buildings, particularly in major West Coast port-dependent markets, as import traffic and U.S. consumer spending could slow. While industrial building deliveries are set to moderate further as the construction pipeline thins, supply growth will still likely outpace net absorption in upcoming quarters. As of June 30, 2025, the amount of vacant space among existing Phoenix logistics properties 50,000 square feet or larger has increased by 19 million square feet, primarily due to speculative development since 2019 pushing the vacancy rate among these buildings over 20%, while another 8.2 million square feet of unleased space remained under construction. Nationally, year-over-year industrial rent growth slowed to 1.6% in June 2025, its lowest rate since 2012. Leasing activity increased in the first quarter of 2025 ahead of tariff escalations, with some markets increasing leasing volume by 50% above two-year averages. Rents for big-box logistics buildings have declined, while rent growth for small bay buildings remains positive. Due to record rent growth during the pandemic, many leases are still renewing at higher rates after being marked to market. Large industrial buildings in markets most saturated with speculative development, such as Austin, Indianapolis, Greenville/Spartanburg, Phoenix, and San Antonio, may be most at risk. For the second quarter of 2025, national industrial vacancy was 7.4%. Our market areas reflected the following industrial vacancy levels for the second quarter of 2025: Springfield, Missouri at 1.9%, St. Louis at 4.3%, Kansas City at 5.8%, Minneapolis at 4.0%, Dallas-Fort Worth at 9.5%, Chicago at 6.0%, Atlanta at 8.9%, Phoenix at 12.3%, Denver at 8.9% and Charlotte, North Carolina at 9.7%. Our management will continue to monitor regional, national, and global economic indicators such as unemployment, GDP, housing starts and prices, consumer sentiment, commercial real estate price index and commercial real estate occupancy, absorption and rental rates, as these could significantly affect customers in each of our market areas. 42 ​ For discussion of the risk factors associated with multi-family and commercial real estate loans, see “Risk Factors – Risks Relating to Lending Activities – Our loan portfolio possesses increased risk due to our relatively high concentration of commercial and residential construction, commercial real estate, other residential (multi-family) and other commercial loans” and “Risk Factors – Risks Relating to Regulation – We currently exceed thresholds defined in interagency guidance on commercial real estate concentrations, and as such, we may incur additional expense or slow the growth of certain categories of commercial real estate lending” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024. General The profitability of the Company and, more specifically, the profitability of its primary subsidiary, the Bank, depends primarily on its net interest income, as well as provisions for credit losses and the level of non-interest income and non-interest expense. Net interest income is the difference between the interest income the Bank earns on its loans and investment securities, and the interest it pays on interest-bearing liabilities, which consists mainly of interest paid on deposits and borrowings. Net interest income is affected by the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on these balances. When interest-earning assets approximate or exceed interest-bearing liabilities, any positive interest rate spread will generate net interest income. Great Southern’s total assets decreased $127.0 million, or 2.1%, from $5.98 billion at December 31, 2024, to $5.85 billion at June 30, 2025. Details of the current period changes in total assets are provided below, under “Comparison of Financial Condition at June 30, 2025 and December 31, 2024.” Loans. Net outstanding loans decreased $156.1 million from December 31, 2024, to $4.53 billion at June 30, 2025. The decrease was primarily in construction loans, commercial real estate loans, commercial business loans and one- to four- family residential loans, partially offset by increases in other residential (multi-family) loans. As loan demand is affected by a variety of factors, including general economic conditions, and because of the competition we face and our focus on pricing discipline and credit quality, no assurance can be given that our loan growth will match or exceed the average level of growth achieved in prior years. The Company’s strategy continues to be focused on maintaining credit risk and interest rate risk at appropriate levels. Recent growth has occurred in some loan types, primarily other residential (multi-family) loans and in most of Great Southern’s primary lending locations, including Springfield, St. Louis, Kansas City, Des Moines and Minneapolis, as well as our loan production offices in Atlanta, Charlotte, Chicago, Dallas, Denver, Omaha, and Phoenix. Certain minimum underwriting standards and monitoring help assure the Company’s portfolio quality. All new loan originations that exceed lender approval authorities are subject to review and approval by Great Southern’s loan committee. Generally, the Company considers commercial construction, consumer, other residential (multi-family) and commercial real estate loans to involve a higher degree of risk compared to some other types of loans, such as first mortgage loans on one- to four-family, owner-occupied residential properties. For other residential (multi-family), commercial real estate, commercial business and construction loans, the credits are subject to an analysis of the borrower’s and guarantor’s financial condition, credit history, verification of liquid assets, collateral, market analysis and repayment ability. It has been, and continues to be, Great Southern’s practice to verify information from potential borrowers regarding assets, income or payment ability and credit ratings as applicable and as required by the authority approving the loan. To minimize construction risk, projects are monitored as construction draws are requested by comparison to budget and with progress verified through property inspections. The geographic and product diversity of collateral, equity requirements and limitations on speculative construction projects help to mitigate overall risk in these loans. Underwriting standards for all loans also include loan-to-value ratio limitations, which vary depending on collateral type, debt service coverage ratios or debt payment to income ratio guidelines, where applicable, credit histories, use of guaranties and other recommended terms relating to equity requirements, amortization, and maturity. Consumer loans, other than home equity loans, are primarily secured by new or used motor vehicles and these loans are subject to underwriting standards designed to assure portfolio quality. In 2019, the Company discontinued indirect auto loan originations. While our policy allows us to lend up to 90% of the appraised value on one- to four-family residential properties, originations of loans with loan-to-value ratios at that level are minimal. Private mortgage insurance is typically required for loan amounts above the 80% level. Few exceptions occur and would be based on analyses which determined minimal transactional risk to be involved. We consider these lending practices to be consistent with or more conservative than what we believe to be the norm for banks our size. At both June 30, 2025 and December 31, 2024, 0.2% of our owner occupied one- to four-family residential loans had loan-to-value ratios above 100% at origination. At June 30, 2025, 0.3% of our non-owner occupied one- to four-family residential loans had loan-to-value ratios above 100% at origination, compared to 0.4% at December 31, 2024. 43 ​ The level of non-performing loans and foreclosed assets affects our net interest income and net income. We generally do not accrue interest income on these loans and do not recognize interest income until the loans are repaid or interest payments have been made for a period of time sufficient to provide evidence of improved repayment ability on the loans. Generally, the higher the level of non-performing assets, the greater the negative impact on interest income and net income. Available-for-sale Securities. In the six months ended June 30, 2025, available-for-sale securities decreased $5.8 million, or 1.1%, from $533.3 million at December 31, 2024, to $527.5 million at June 30, 2025 due to monthly principal payments on investment securities, partially offset by purchases of investment securities and increases in market value of the available-for-sale securities. For further information on investment securities, see Note 5 to the accompanying financial statements contained in this Report. Held-to-maturity Securities. In the six months ended June 30, 2025, held-to-maturity securities decreased $4.3 million, or 2.3%, from $187.4 million at December 31, 2024, to $183.1 million at June 30, 2025, due to principal payments on mortgage-backed securities and collateralized mortgage obligations. Deposits. The Company attracts deposit accounts through its retail branch network, correspondent banking and corporate services areas, internet channels and brokered deposits. The Company then utilizes these deposit funds, along with FHLBank advances and other borrowings, to meet loan demand or otherwise fund its activities. In the six months ended June 30, 2025, total deposit balances increased $78.6 million, or 1.7%. Compared to December 31, 2024, transaction account balances increased $35.5 million, or 1.2%, to $3.09 billion at June 30, 2025, and retail certificates of deposit decreased $18.1 million, or 2.3%, to $757.7 million at June 30, 2025. The increase in transaction accounts was primarily a result of an increase in various money market accounts. Retail time deposits decreased due to a net decrease in retail certificates generated through the banking center network. Competition for time deposits has been, and remains, significant in many of our markets. Brokered deposits, including IntraFi program purchased funds, were $833.3 million and $772.1 million at June 30, 2025 and December 31, 2024, respectively. The Company uses brokered deposits of select maturities from time to time to supplement its various funding channels and to manage interest rate risk. The additional brokered deposits were used to repay some of the Company’s short-term borrowings. Our deposit balances may fluctuate depending on customer preferences and our relative need for funding. We do not consider our retail certificates of deposit to be guaranteed long-term funding because customers can withdraw their funds at any time with minimal interest penalty. When loan demand trends upward, we can increase rates paid on deposits to attract more deposits and utilize brokered deposits to generate additional funding. The level of competition for deposits in our markets is high. It is our goal to gain deposit market share, particularly checking accounts, in our branch footprint. To accomplish this goal, increasing rates to attract deposits may be necessary, which could negatively impact the Company’s net interest margin. Our ability to fund growth in future periods may also depend on our ability to continue to access brokered deposits and FHLBank advances. In times when our loan demand has outpaced our generation of new deposits, we have utilized brokered deposits and FHLBank advances to fund these loans. These funding sources have been attractive to us because we can create either fixed or variable rate funding, as desired, which more closely matches the interest rate nature of much of our loan portfolio. It also gives us greater flexibility in increasing or decreasing the duration of our funding. While we do not currently anticipate that our ability to access these sources will be reduced or eliminated in future periods, if this should happen, the limitation on our ability to fund additional loans could have a material adverse effect on our business, financial condition and results of operations. See “Results of Operations and Comparison for the Three and Six Months Ended June 30 , 2025 and 2024 – Liquidity” below for further information on funding sources. Securities sold under reverse repurchase agreements with customers. Securities sold under reverse repurchase agreements with customers decreased $9.6 million from $64.4 million at December 31, 2024 to $54.8 million at June 30, 2025. These balances fluctuate over time based on customer demand for this product. Short-term borrowings and other interest-bearing liabilities . Short term borrowings and other interest-bearing liabilities decreased $144.3 million from $514.2 million at December 31, 2024 to $369.9 million at June 30, 2025, primarily due to the repayment of borrowings under the Federal Reserve Bank BTFP funding program and the Company’s utilization of brokered deposits as an alternative source of funding. The Company may, from time to time, utilize overnight borrowings, short-term FHLBank advances, and borrowings from the Federal Reserve Bank of St. Louis (FRBSTL), depending on relative interest rates. The Company’s FHLBank term advances were $-0- at both June 30, 2025 and December 31, 2024. At June 30, 2025 and December 31, 2024, there was $369.0 million and $333.0 million, respectively, in overnight borrowings from the FHLBank, which were included in short term borrowings. In January 2024, the Bank borrowed $180.0 million under the Federal Reserve Bank’s Bank Term Funding Program (BTFP). The borrowing, which had a fixed interest rate of 4.83% and was secured primarily by the Bank’s held-to-maturity investment securities, was repaid in full upon maturity in January 2025. 44 ​ Net Interest Income and Interest Rate Risk Management. Our net interest income may be affected positively or negatively by changes in market interest rates. A large portion of our loan portfolio is tied to one-month SOFR, three-month SOFR or the “prime rate” and adjusts immediately or shortly after the index rate adjusts (subject to the effect of contractual interest rate floors on some of the loans, which are discussed below). We monitor our sensitivity to interest rate changes on an ongoing basis (see “Quantitative and Qualitative Disclosures About Market Risk”). The current level and shape of the interest rate yield curve poses challenges for interest rate risk management. Prior to its increase of 0.25% on December 16, 2015, the FRB had last changed interest rates on December 16, 2008. This was the first rate increase since September 29, 2006. The FRB also implemented rate increases of 0.25% on eight additional occasions from December 14, 2016 through December 31, 2018, with the Federal Funds rate reaching as high as 2.50%. After December 2018, the FRB paused its rate increases and, in July, September and October 2019, implemented rate decreases of 0.25% on each of those occasions. At December 31, 2019, the Federal Funds rate stood at 1.75%. In response to the COVID-19 pandemic, the FRB decreased interest rates on two occasions in March 2020, a 0.50% decrease on March 3rd and a 1.00% decrease on March 16th. At December 31, 2021, the Federal Funds rate was 0.25%. In 2022, the FRB implemented rate increases of 0.25%, 0.50%, 0.75%, 0.75%, 0.75%, 0.75% and 0.50% in March, May, June, July, September, November and December 2022, respectively. At December 31, 2022, the Federal Funds rate was 4.50%. In 2023, the FRB implemented rate increases of 0.25%, 0.25%, 0.25% and 0.25% in February, March, May and July 2023, respectively. At December 31, 2023, the Federal Funds rate was 5.50%. In 2024, the FRB implemented rate decreases of 0.50%, 0.25% and 0.25% in September, November, and December, respectively. At December 31, 2024, the Federal Funds rate was 4.50%, and remained at that level at June 30 , 2025. Financial markets now expect the possibility of further decreases in Federal Funds interest rates in 2025 to be likely, but at a methodical pace and with interest rate decisions being made at each FRB meeting based on economic data available at the time. Great Southern’s loan portfolio includes loans ($1.60 billion at June 30, 2025) tied to various SOFR indexes that will be subject to adjustment at least once within 90 days after June 30, 2025. All of these loans have interest rate floors at various rates. Great Southern also has a portfolio of loans ($731.1 million at June 30, 2025) tied to a “prime rate” of interest that will adjust immediately or within 90 days of a change to the “prime rate” of interest. All of these loans had interest rate floors at various rates. In addition, Great Southern has a portfolio of loans ($10.3 million at June 30, 2025) tied to an AMERIBOR index that will adjust immediately or within 90 days of a change to the rate of interest on this index. All of these loans had interest rate floors at various rates. At June 30, 2025, nearly all of these SOFR, “prime rate” and AMERIBOR loans had fully-indexed rates that were at or above their floor rate and so are expected to move fully with future market interest rate increases, and most are expected to move fully with future market interest rate decreases as many of these loans have floor rates well below their current index rate. A rate cut by the FRB generally would be expected to have an immediate negative impact on the Company’s interest income on loans due to the large total balance of loans tied to the SOFR indexes or the “prime rate” index and will be subject to adjustment at least once within 90 days or loans which generally adjust immediately as the Federal Funds rate adjusts. Interest rate floors may at least partially mitigate the negative impact of interest rate decreases. Loans at their floor rates are, however, subject to the risk that borrowers will seek to refinance elsewhere at the lower market rate. There may also be a negative impact on the Company’s net interest income if the Company is unable to significantly lower its funding costs due to a highly competitive rate environment for deposits, although interest rates on assets may decline further. Conversely, market interest rate increases would normally result in increased interest rates on our SOFR-based, prime rate-based and AMERIBOR-based loans. As of June 30 , 2025, Great Southern’s interest rate risk models indicate that, generally, rising interest rates are expected to have a modestly positive impact on the Company’s net interest income, while declining interest rates are expected to have a mostly neutral impact on net interest income. Any negative impact of a falling Federal Funds rate and other market interest rates also falling could be more pronounced if we are not able to decrease non-maturity deposit rates accordingly. We model various interest rate scenarios for rising and falling rates, including both parallel and non-parallel shifts in rates. The results of our modeling indicate that net interest income is not likely to be significantly affected either positively or negatively in the first twelve months following relatively minor changes in interest rates because our portfolios are relatively well matched in a twelve-month horizon. In a situation where market interest rates increase significantly in a short period of time, our net interest margin increase may be more pronounced in the very near term (first one to three months), due to fairly rapid increases in SOFR interest rates and “prime” interest rates. In a situation where market interest rates decrease significantly in a short period of time, as they did in March 2020, our net interest margin decrease may be more pronounced in the very near term (first one to three months), due to fairly rapid decreases in SOFR interest rates and “prime” interest rates. In the subsequent months, we would expect that net interest margin would stabilize and begin to improve, as renewal interest rates on maturing time deposits decrease. 45 ​ Beginning in March 2022, market interest rates, including LIBOR interest rates, SOFR interest rates and “prime” interest rates, began to increase rapidly. This resulted in increasing loan yields and expansion of our net interest income and net interest margin throughout 2022 and into the first three months of 2023. In 2023, market interest rate increases moderated and loan yield increases moderated in line with market rates. However, there has been increased competition for deposits and other sources of funding, resulting in higher costs for those funds. This has been especially true since early March 2023. Deposit and other funding costs moderated a bit in late 2024 as the FRB cut the federal funds rate, but competition for deposits remains significant in 2025. For further discussion of the processes used to manage our exposure to interest rate risk, see “Item 3. Quantitative and Qualitative Disclosures About Market Risk – How We Measure the Risks to Us Associated with Interest Rate Changes.” Non-Interest Income and Non-Interest (Operating) Expenses. The Company’s profitability is also affected by the level of its non-interest income and operating expenses. Non-interest income consists primarily of service charges and ATM fees, POS interchange fees, late charges and prepayment fees on loans, gains on sales of loans and available-for-sale investments and other general operating income. Non-interest income may also be affected by the Company’s interest rate derivative activities. See Note 16 “Derivatives and Hedging Activities” in the Notes to Consolidated Financial Statements included in this report. Operating expenses consist primarily of salaries and employee benefits, occupancy-related expenses, expenses related to foreclosed assets, postage, FDIC deposit insurance, advertising and public relations, telephone, professional fees, office expenses and other general operating expenses. Details of the current period changes in non-interest income and non-interest expense are provided below, under “Results of Operations and Comparison for the Three and Six Months Ended June 30 , 2025 and 2024.” Effect of Federal Laws and Regulations General. Federal legislation and regulation significantly affect the operations of the Company and the Bank, and have increased competition among commercial banks, savings institutions, mortgage banking enterprises and other financial institutions. In particular, the capital requirements and operations of regulated banking organizations such as the Company and the Bank have been and will be subject to changes in applicable statutes and regulations from time to time, which changes could, under certain circumstances, adversely affect the Company or the Bank. Dodd-Frank Act. In 2010, sweeping financial regulatory reform legislation entitled the “Dodd-Frank Wall Street Reform and Consumer Protection Act” (the “Dodd-Frank Act”) was signed into law. The Dodd-Frank Act implemented far-reaching changes across the financial regulatory landscape. Certain aspects of the Dodd-Frank Act have been affected by the more recently enacted Economic Growth Act, as defined and discussed below under “Economic Growth Act.” Capital Rules. The federal banking agencies have adopted regulatory capital rules that substantially amend the risk-based capital rules applicable to the Bank and the Company. The rules implement the “Basel III” regulatory capital reforms and changes required by the Dodd-Frank Act. “Basel III” refers to various documents released by the Basel Committee on Banking Supervision. For the Company and the Bank, the general effective date of the rules was January 1, 2015, and, for certain provisions, various phase-in periods and later effective dates apply. The chief features of these rules are summarized below. The rules refine the definitions of what constitutes regulatory capital and add a new regulatory capital element, common equity Tier 1 capital. The minimum capital ratios are (i) a common equity Tier 1 (“CET1”) risk-based capital ratio of 4.5%; (ii) a Tier 1 risk-based capital ratio of 6%; (iii) a total risk-based capital ratio of 8%; and (iv) a Tier 1 leverage ratio of 4%. In addition to the minimum capital ratios, the rules include a capital conservation buffer, under which a banking organization must have CET1 more than 2.5% above each of its minimum risk-based capital ratios in order to avoid restrictions on paying dividends, repurchasing shares, and paying certain discretionary bonuses. The capital conservation buffer became fully implemented on January 1, 2019. These rules also revised the prompt corrective action framework, which is designed to place restrictions on insured depository institutions if their capital levels show signs of weakness. Under the revised prompt corrective action requirements, insured depository institutions are required to meet the following in order to qualify as “well capitalized:” (i) a common equity Tier 1 risk-based capital ratio of at least 6.5%, (ii) a Tier 1 risk-based capital ratio of at least 8%, (iii) a total risk-based capital ratio of at least 10% and (iv) a Tier 1 leverage ratio of 5%, and must not be subject to an order, agreement or directive mandating a specific capital level. Economic Growth Act. In May 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Economic Growth Act”), was enacted to modify or eliminate certain financial reform rules and regulations, including some implemented under the Dodd-Frank Act. While the Economic Growth Act maintains most of the regulatory structure established by the Dodd-Frank Act, it amends certain aspects of the regulatory framework for small depository institutions with assets of less than $10 billion and for large banks with assets of more than $50 billion. Many of these amendments could result in meaningful regulatory changes. 46 ​ The Economic Growth Act, among other matters, expands the definition of qualified mortgages which may be held by a financial institution and simplifies the regulatory capital rules for financial institutions and their holding companies with total consolidated assets of less than $10 billion by instructing the federal banking regulators to establish a single “Community Bank Leverage Ratio” (“CBLR”) of between 8 and 10 percent. Upon election, any qualifying depository institution or its holding company that exceeds the CBLR will be considered to have met generally applicable leverage and risk-based regulatory capital requirements and any qualifying depository institution that exceeds the CBLR will be considered “well-capitalized” under the prompt corrective action rules. Currently, the CBLR is 9.0%. To date, the Company and the Bank have chosen to not utilize the CBLR due to the Company’s size and complexity, including its commercial real estate and construction lending concentrations and significant off-balance sheet funding commitments. In addition, the Economic Growth Act includes regulatory relief in the areas of examination cycles, call reports, mortgage disclosures and risk weights for certain high-risk commercial real estate loans. One Big Beautiful Bill Act . On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing its expected impact on our consolidated financial statements. Business Initiatives Technology updates and advancements continue with the Company’s current core provider. Projects involving a full array of products and services are moving forward, with completions expected beginning in the third quarter of 2025 and continuing into 2026. The Company installed 10 ITM units in the St. Louis, Mo. market, replacing existing end-of-life ATM units. The ITMs, all located at banking center locations, offer customers live teller services, extended banking hours, and services beyond those traditionally available via an ATM. Construction of the Company’s new banking center at 723 N. Benton in Springfield, Mo., to replace the existing facility at that location, began in March 2025 and is on schedule for completion in the fourth quarter of 2025. The new facility, designed as a next-generation banking center, will allow for flexibility in testing new designs, processes, technology and tools, balanced with customer convenience. The Company has 11 other banking centers and an Express Center in Springfield. Headquartered in Springfield, Missouri, Great Southern offers a broad range of banking services to customers. The Company operates 89 retail banking centers in Missouri, Iowa, Kansas, Minnesota, Arkansas and Nebraska and commercial lending offices in Atlanta, Charlotte, Chicago, Dallas, Denver, Omaha, and Phoenix. The common stock of Great Southern Bancorp, Inc. is listed on the Nasdaq Global Select Market under the symbol “GSBC.” Comparison of Financial Condition at June 30, 2025 and December 31, 2024 During the six months ended June 30, 2025, the Company’s total assets decreased by $127.0 million to $5.85 billion. The decrease was primarily in loans, partially offset by an increase in cash and cash equivalents. Cash and cash equivalents were $245.9 million at June 30, 2025, an increase of $50.2 million, or 25.6%, from $195.8 million at December 31, 2024. The Company’s available-for-sale securities decreased $5.8 million, or 1.1%, compared to December 31, 2024. This decrease is related to monthly principal payments on investment securities, partially offset by purchases of investment securities and increases in market value of the available-for-sale securities. The available-for-sale securities portfolio was 9.0% of total assets at June 30, 2025 and 8.9% of total assets at December 31, 2024. The Company’s held-to-maturity securities decreased $4.3 million, or 2.3%, compared to December 31, 2024. The decrease was primarily due to normal monthly payments received related to the portfolio of mortgage-backed securities and collateralized mortgage obligations. The held-to-maturity securities portfolio was 3.1% of total assets at both June 30, 2025 and December 31, 2024. 47 ​ Net loans decreased $156.1 million from December 31, 2024, to $4.53 billion at June 30, 2025. This decrease was primarily in construction loans ($79.1 million decrease), commercial real estate loans ($56.1 million decrease), commercial business loans ($25.2 million decrease) and one- to four-family residential loans ($23.0 million decrease), partially offset by an increase in other residential (multi-family) loans ($28.7 million increase). The decrease in construction loans primarily related to the completion of projects, with the loans then being paid off or retained by the Bank and moving to other loan categories. The decrease in commercial real estate loans was primarily related to a few large loan payoffs in 2025. The pipeline of the unfunded portion of loans and formal loan commitments remained strong at June 30, 2025, with the largest portion of these unfunded balances represented by the unfunded portion of outstanding construction loans ($626.0 million). Total liabilities decreased $149.8 million from December 31, 2024, to $5.23 billion at June 30, 2025. This decrease was primarily due to the repayment of the BTFP borrowings in January 2025 and the repayment of subordinated notes in June 2025, partially offset by an increase in transaction account deposits and brokered deposits. Total deposits increased $78.6 million, or 1.7%, from $4.61 billion at December 31, 2024 to $4.68 billion at June 30, 2025. Transaction account balances increased $35.5 million, from $3.06 billion at December 31, 2024 to $3.09 billion at June 30, 2025. Total interest-bearing checking accounts and non-interest bearing checking accounts increased $18.5 million and $17.0 million, respectively. Retail certificates of deposit decreased $18.1 million compared to December 31, 2024, to $757.7 million at June 30, 2025, due to competition for these types of deposits. Brokered deposits increased $61.2 million to $833.3 million at June 30, 2025, compared to $772.1 million at December 31, 2024. Brokered deposits were utilized to offset reductions in other deposit categories and to repay BTFP borrowings. The Company has the capacity to further expand its use of brokered deposits if it chooses to do so. Of the total brokered deposits at June 30, 2025, $300.0 million were floating rate deposits, which adjust daily, based on the effective federal funds rate index. The Company also utilized brokered deposits with maturities within six months as part of its interest rate risk management strategies. The Company’s term FHLBank advances were $-0- at both June 30, 2025 and December 31, 2024. At June 30, 2025 and December 31, 2024, there were no borrowings from the FHLBank, other than overnight borrowings, which are included in the short-term borrowings category. The Company may utilize both overnight borrowings and short-term FHLBank advances depending on relative interest rates. Short-term borrowings and other interest-bearing liabilities decreased $144.3 million from $514.2 million at December 31, 2024 to $369.9 million at June 30, 2025. At June 30, 2025, $369.0 million of this total was in overnight borrowings from the FHLBank, which were used to purchase investment securities and to redeem the subordinated notes, compared to $333.0 million of overnight borrowings from the FHLBank at December 31, 2024. At June 30, 2025 and December 31, 2024, there was $-0- and $180.0 million, respectively, in BTFP borrowings. The BTFP borrowing, which had a fixed interest rate of 4.83%, was repaid in full upon maturity in January 2025. Securities sold under reverse repurchase agreements with customers decreased $9.6 million, or 15.0%, from $64.4 million at December 31, 2024 to $54.8 million at June 30, 2025. These balances fluctuate over time based on customer demand for this product. Total stockholders’ equity increased $22.8 million, from $599.6 million at December 31, 2024 to $622.4 million at June 30, 2025. Stockholders’ equity increased due to net income of $36.9 million for the six months ended June 30, 2025 and rose by $2.0 million due to stock option exercises during the period. Accumulated other comprehensive loss (a reduction in equity) decreased $13.0 million during the six months ended June 30, 2025 (thereby increasing total stockholders’ equity), primarily due to increases in the fair value of available-for-sale investment securities and the fair value of cash flow hedges, as a result of decreased market interest rates. Partially offsetting these changes were repurchases of the Company’s common stock totaling $20.0 million and dividends declared on common stock of $9.2 million. Comparison of Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024 General Net income was $19.8 million for the three months ended June 30, 2025 compared to $17.0 million for the three months ended June 30, 2024. This increase of $2.8 million, or 16.5%, was primarily due to an increase in net interest income of $4.2 million, or 8.9%, and a decrease in non-interest expense of $1.4 million, or 3.9%, partially offset by a decrease in non-interest income of $1.6 million, or 16.5%, an increase in income tax expense of $633,000, or 16.4%, and an increase in provisions for credit losses and unfunded commitments of $497,000, or 81.9%. 48 ​ Net income was $36.9 million for the six months ended June 30, 2025 compared to $30.4 million for the six months ended June 30, 2024. This increase of $6.5 million, or 21.6%, was primarily due to an increase in net interest income of $8.7 million, or 9.5%, a decrease in non-interest expense of $1.0 million, or 1.4%, and decreases in provisions for credit losses and unfunded commitments of $481,000, partially offset by an increase in income tax expense of $1.8 million, or 25.1%, and a decrease in non-interest income of $1.8 million, or 11.0%. Total Interest Income Total interest income increased $48,000, or 0.1%, during the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was due to a $513,000, or 7.7%, increase in interest income on investment securities and other interest-earning assets, mostly offset by a $465,000, or 0.6%, decrease in interest income on loans. Interest income from investment securities and other interest-earning assets increased during the three months ended June 30, 2025 compared to the same period in 2024 due to higher average balances and average rates of interest. Interest income from loans decreased during the three months ended June 30, 2025 compared to the same period in 2024 due to lower average rates of interest, partially offset by higher average balances. Total interest income increased $2.9 million, or 1.8%, during the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was due to a $1.5 million, or 1.1%, increase in interest income on loans and a $1.4 million, or 10.6%, increase in interest income on investment securities and other interest-earning assets. These increases were due to higher average balances for both loans and investment securities, along with higher average rates of interest on investment securities. Interest Income – Loans During the three months ended June 30, 2025 compared to the three months ended June 30, 2024, interest income on loans decreased $465,000. Interest income on loans decreased $943,000 due to a decrease in average yield on loans from 6.37% during the three months ended June 30, 2024 to 6.26% during the three months ended June 30, 2025. This decrease was primarily due to a reduction in the federal funds rate in the latter portion of 2024. Partially offsetting this decrease, interest income on loans increased $478,000 due to higher average balances, which grew from $4.69 billion during the three months ended June 30, 2024, to $4.73 billion during the three months ended June 30, 2025. Since the end of 2022, loan originations and net loan growth have been muted; however, some loan growth has come as a result of the funding of previously approved but unfunded balances on construction loans and a slowdown in loan prepayments since 2023, due to higher market interest rates. During the six months ended June 30, 2025, compared to the six months ended June 30, 2024, interest income on loans increased $1.5 million. Higher average loan balances, which grew from $4.68 billion during the six months ended June 30, 2024, to $4.74 billion during the six months ended June 30, 2025, accounted for $1.6 million of the increase in interest income on loans. Partially offsetting that increase, interest income on loans decreased $95,000 due to a decrease in average interest rates on loans from 6.25% during the six months ended June 30, 2024, to 6.24% during the six months ended June 30, 2025. In October 2018, the Company entered into an interest rate swap transaction which was terminated in March 2020. Upon termination, the Company received $45.9 million, inclusive of accrued but unpaid interest, from its swap counterparty. The net amount, after deducting accrued interest and deferred income taxes, is being accreted to interest income on loans monthly until the originally scheduled termination date of October 6, 2025. After this date, the Company will no longer have the benefit of that income from the terminated swap. The Company recorded interest income related to the interest rate swap of $2.0 million in each of the three months ended June 30, 2025 and 2024. The Company recorded interest income related to the interest rate swap of $4.0 million and $4.1 million during the six months ended June 30, 2025 and 2024, respectively. At June 30, 2025, the Company expected to have a sufficient amount of eligible variable rate loans to continue to accrete this interest income ratably in future periods through October 6, 2025, after which no further interest income will be realized. In March 2022, the Company entered into another 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 $300 million, with a contractual termination date of March 1, 2024. Under the terms of the swap, the Company received a fixed rate of interest of 1.6725% and paid a floating rate of interest equal to one-month USD-LIBOR (or the equivalent replacement USD-SOFR rate once the USD-LIBOR rate ceased to be available). 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 exceeded one-month USD-LIBOR/SOFR, the Company received net interest settlements, which were recorded as loan interest income. If one-month USD-LIBOR/SOFR exceeded the fixed rate of interest, the Company paid net settlements to the counterparty and recorded those net payments as a reduction of interest income on loans. The Company recorded a reduction of loan interest income related to this swap transaction of $1.9 million in the six months ended June 30, 2024. Since reaching its contractual termination date on March 1, 2024, there has been no further interest income impact related to this swap. 49 ​ In July 2022, the Company entered into two additional interest rate swap transactions as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of each swap is $200 million with an effective date of May 1, 2023 and a termination date of May 1, 2028. Under the terms of one swap, the Company receives a fixed rate of interest of 2.628% and pays a floating rate of interest equal to one-month USD-SOFR OIS. Under the terms of the other swap, the Company receives a fixed rate of interest of 5.725% and pays a floating rate of interest equal to one-month USD-Prime. In each case, the floating rate resets monthly and net settlements of interest due to/from the counterparty also occur monthly. To the extent the fixed rate of interest exceeds the floating rate of interest, the Company receives net interest settlements, which are recorded as loan interest income. If the floating rate of interest exceeds the fixed rate of interest, the Company pays net settlements to the counterparty and records those net payments as a reduction of interest income on loans. The Company recorded a reduction of loan interest income related to these swap transactions of $1.8 million and $2.8 million in the three months ended June 30, 2025 and 2024, respectively. The Company recorded a reduction of loan interest income related to these swap transactions of $3.5 million and $5.5 million in the six months ended June 30, 2025 and 2024, respectively. At June 30, 2025, the USD-Prime rate was 7.50% and the one-month USD-SOFR OIS rate was 4.31926%. If market interest rates remain near or above their current levels, the Company’s interest rate swaps will continue to have a negative impact on net interest income. Interest Income – Investments and Other Interest-earning Assets Interest income on investments increased $752,000 in the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Average balances increased from $696.2 million during the three months ended June 30, 2024, to $727.3 million during the three months ended June 30, 2025 resulting in an increase in interest income of $251,000. Average balances of securities increased primarily due to investment securities purchases in 2024 and 2025, partially offset by normal monthly payments received related to the portfolio of U.S. Government agency mortgage-backed securities and collateralized mortgage obligations. Interest income on investments also increased $501,000 as a result of higher average interest rates, from 3.09% during the three months ended June 30, 2024, to 3.36% during the three months ended June 30, 2025. The securities purchased in 2024 and 2025 had higher interest rates than the rest of the portfolio. Interest income on investments increased $1.8 million in the six months ended June 30, 2025 compared to the six months ended June 30, 2024. Average balances increased from $683.0 million during the six months ended June 30, 2024, to $732.7 million during the six months ended June 30, 2025, resulting in an increase in interest income of $772,000. Average balances of securities increased primarily due to investment securities purchases in 2024 and 2025, partially offset by normal monthly payments received related to the portfolio of U.S. Government agency mortgage-backed securities and collateralized mortgage obligations. Interest income on investments also increased $1.0 million as a result of higher average interest rates, from 3.05% during the six months ended June 30, 2024, to 3.35% during the six months ended June 30, 2025. Interest income on other interest-earning assets decreased $239,000 in the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Average interest rates decreased from 5.31% during the three months ended June 30, 2024, to 4.30% during the three months ended June 30, 2025 resulting in a decrease in interest income of $241,000. The decline in the average interest rate was directly attributable to the decrease in the federal funds rate in the latter portion of 2024. Interest income increased $2,000 as a result of an increase in average balances from $97.3 million during the three months ended June 30, 2024, to $97.5 million during the three months ended June 30, 2025. Interest income on other interest-earning assets decreased $445,000 in the six months ended June 30, 2025 compared to the six months ended June 30, 2024. Average interest rates fell from 5.26% during the six months ended June 30, 2024, to 4.27% during the six months ended June 30, 2025, resulting in a decrease of $508,000 in interest income. Partially offsetting this decrease, interest income increased $63,000 as a result of an increase in average balances, from $98.9 million during the six months ended June 30, 2024, to $101.2 million during the six months ended June 30, 2025. 50 ​ Total Interest Expense Total interest expense decreased $4.1 million, or 12.0%, during the three months ended June 30, 2025, when compared with the three months ended June 30, 2024. Interest expense on deposits decreased $3.4 million, or 12.3%, interest expense on short-term borrowings decreased $399,000, or 9.1%, interest expense on subordinated notes decreased $196,000, or 17.7%, interest expense on subordinated debentures issued to capital trusts decreased $65,000, or 14.3%, and interest expense on securities sold under reverse repurchase agreements decreased $22,000, or 5.6%. Total interest expense decreased $5.8 million, or 8.6%, during the six months ended June 30, 2025, when compared with the six months ended June 30, 2024. Interest expense on deposits decreased $6.5 million, or 11.6%, interest expense on subordinated notes decreased $196,000, or 8.9%, interest expense on subordinated debentures issued to capital trusts decreased $137,000, or 15.1%, interest expense on short-term borrowings increased $1.0 million, or 13.6%, and interest expense on securities sold under reverse repurchase agreements increased $16,000, or 2.2%. Interest Expense – Deposits Interest expense on demand and savings deposits decreased $2.0 million during the three months ended June 30, 2025 when compared to the three months ended June 30, 2024. Average rates of interest decreased from 1.76% in the three months ended June 30, 2024 to 1.40% in the three months ended June 30, 2025, resulting in a $2.0 million decrease in interest expense. Interest rates paid on demand deposits were lower in the 2025 period due to the Company strategically lowering rates throughout the second half of 2024 and all of 2025, as market rates decreased. The average balances of demand and savings deposits decreased from $2.23 billion in the three months ended June 30, 2024 to $2.22 billion in the three months ended June 30, 2025, resulting in a decrease in interest expense on demand and savings deposits of $39,000. Interest expense on demand and savings deposits decreased $3.7 million during the six months ended June 30, 2025 when compared to the six months ended June 30, 2024. The average rates of interest decreased from 1.74% in the six months ended June 30, 2024 to 1.41% in the six months ended June 30, 2025, resulting in a $3.6 million decrease in interest expense. The average balances of demand and savings deposits decreased from $2.23 billion in the six months ended June 30, 2024, to $2.22 billion in the six months ended June 30, 2025, resulting in a decrease of $48,000 in interest expense. Interest expense on time deposits decreased $2.6 million during the three months ended June 30, 2025 when compared to the three months ended June 30, 2024. The average balances of time deposits decreased from $894.5 million during the three months ended June 30, 2024 to $757.6 million in the three months ended June 30, 2025, resulting in a decrease in interest expense of $1.3 million. The average rates of interest on time deposits decreased from 4.08% in the three months ended June 30, 2024, to 3.45% in the three months ended June 30, 2025, resulting in a decrease in interest expense of $1.3 million. A large portion of the Company’s certificate of deposit portfolio matures within six months and therefore reprices fairly quickly; this is consistent with the portfolio term over the past several years. Market interest rates decreased in the second half of 2024 and into 2025 as the FOMC reduced the federal funds rate. Competition for time deposits remains significant in our market areas, and upon maturity, a portion of these deposits may be redeemed by customers. Interest expense on time deposits decreased $5.0 million during the six months ended June 30, 2025 when compared to the six months ended June 30, 2024. The average balances of time deposits decreased from $916.1 million during the six months ended June 30, 2024 to $764.8 million in the six months ended June 30, 2025, resulting in a decrease in interest expense of $2.8 million during the period. Interest expense on time deposits decreased $2.2 million as a result of a decrease in average rates of interest from 4.00% in the six months ended June 30, 2024, to 3.49% in the six months ended June 30, 2025. As noted above, a large portion of the Company’s certificate of deposit portfolio matures within six months and therefore reprices fairly quickly. Older certificates of deposit that renewed or were replaced with new deposits generally resulted in the Company paying a lower rate of interest compared to the year-ago period. Interest expense on brokered deposits increased $1.1 million during the three months ended June 30, 2025 when compared to the three months ended June 30, 2024. The average balance of brokered deposits increased from $683.3 million during the three months ended June 30, 2024 to $895.3 million during the three months ended June 30, 2025, resulting in an increase in interest expense of $2.1 million during the period. Partially offsetting this increase, interest expense on brokered deposits decreased $957,000 due to average rates of interest that decreased from 5.25% in the three months ended June 30, 2024 to 4.50% in the three months ended June 30, 2025. Brokered deposits added in the second half of 2024 and the first half of 2025 were at lower market rates than brokered deposits previously issued. The Company uses brokered deposits of select maturities and interest rate structures from time to time to supplement its various funding channels and to manage interest rate risk. A portion of the Company’s brokered deposits are floating rate, and the rate resets with changes to the effective federal funds rate. 51 ​ Interest expense on brokered deposits increased $2.2 million during the six months ended June 30, 2025 when compared to the six months ended June 30, 2024. Interest expense on brokered deposits increased $4.0 million due to an increase in average balances from $686.1 million during the six months ended June 30, 2024 to $894.0 million during the six months ended June 30, 2025. Partially offsetting this increase, interest expense on brokered deposits decreased $1.8 million due to average rates of interest that decreased from 5.25% in the six months ended June 30, 2024 to 4.54% in the six months ended June 30, 2025. As noted above, brokered deposits added during 2024 and 2025 were at lower market rates than brokered deposits previously issued. Interest Expense – FHLBank Advances; Short-term Borrowings, Repurchase Agreements and Other Interest-bearing Liabilities; Subordinated Debentures Issued to Capital Trusts and Subordinated Notes FHLBank term advances were not utilized during the three or six months ended June 30, 2025 and 2024. Interest expense on reverse repurchase agreements decreased $22,000 during the three months ended June 30, 2025 when compared to the three months ended June 30, 2024. The average balance of repurchase agreements decreased from $77.0 million in the three months ended June 30, 2024 to $65.6 million in the three months ended June 30, 2025, due to changes in customers’ desire for this product, which can fluctuate, resulting in a decrease in interest expense of $75,000 during the period. Interest expense on reverse repurchase agreements increased $53,000 due to higher average interest rates during the three months ended June 30, 2025 when compared to the three months ended June 30, 2024. The average rate of interest was 2.06% for the three months ended June 30, 2024 compared to 2.27% for the three months ended June 30, 2025, due to changes in the mix of customer balances in these products. Interest expense on reverse repurchase agreements increased $16,000 during the six months ended June 30, 2025 when compared to the six months ended June 30, 2024. Interest expense on reverse repurchase agreements increased $21,000 due to higher average interest rates during the six months ended June 30, 2025 when compared to the six months ended June 30, 2024. The average rate of interest was 1.93% for the six months ended June 30, 2024 compared to 2.03% for the six months ended June 30, 2025, due to changes in the mix of customer balances in these products. The average balance of repurchase agreements decreased from $75.7 million in the six months ended June 30, 2024 to $74.0 million in the six months ended June 30, 2025, due to changes in customers’ desire for this product, which can fluctuate, resulting in a decrease in interest expense of $5,000. Interest expense on short-term borrowings (including overnight borrowings from the FHLBank and BTFP borrowings from FRBSTL) and other interest-bearing liabilities decreased $399,000 during the three months ended June 30, 2025 when compared to the three months ended June 30, 2024. The average rate of interest on short-term borrowings and other interest-bearing liabilities decreased from 5.18% for the three months ended June 30, 2024 to 4.59% for the three months ended June 30, 2025, resulting in a decrease in interest expense of $502,000 during the period. Interest rates on borrowings decreased in the latter portion of 2024 after the federal funds rate was cut by 100 basis points from September to December 2024. Partially offsetting this decrease, interest expense on short-term borrowings (including overnight borrowings from the FHLBank and BTFP borrowings from FRBSTL) and other interest-bearing liabilities increased $103,000 due to higher average balances during the three months ended June 30, 2025 when compared to the three months ended June 30, 2024. The average balance of short-term borrowings and other interest-bearing liabilities increased from $339.3 million in the three months ended June 30, 2024 to $347.3 million in the three months ended June 30, 2025. Interest expense on short-term borrowings (including overnight borrowings from the FHLBank and BTFP borrowings from FRBSTL) and other interest-bearing liabilities increased $1.0 million during the six months ended June 30, 2025 when compared to the six months ended June 30, 2024. The average balance of short-term borrowings and other interest-bearing liabilities increased from $290.4 million in the six months ended June 30, 2024 to $369.8 million in the six months ended June 30, 2025, resulting in an increase in interest expense of $1.6 million during the period. Partially offsetting this increase, interest expense on short-term borrowings (including overnight borrowings from the FHLBank and BTFP borrowings from FRBSTL) and other interest-bearing liabilities decreased $634,000 due to lower average rates of interest during the six months ended June 30, 2025 when compared to the six months ended June 30, 2024. The average rate of interest was 5.14% for the six months ended June 30, 2024, compared to 4.59% for the six months ended June 30, 2025. 52 ​ During the three months ended June 30, 2025, compared to the three months ended June 30, 2024, interest expense on subordinated debentures issued to capital trusts decreased $65,000 due to lower average interest rates. The average interest rate was 6.05% in the three months ended June 30, 2025 compared to 7.08% in the three months ended June 30, 2024. The subordinated debentures are variable-rate debentures, which bear interest at an average rate of three-month SOFR (originally LIBOR), plus 1.60%, adjusted quarterly, which was 6.14% at June 30, 2025. There was no change in the average balance of the subordinated debentures between the 2024 and 2025 three-month periods. During the six months ended June 30, 2025, compared to the six months ended June 30, 2024, interest expense on subordinated debentures issued to capital trusts decreased $137,000 due to lower average interest rates. The average interest rate was 6.03% in the six months ended June 30, 2025 compared to 7.08% in the six months ended June 30, 2024. The subordinated debentures are variable-rate debentures, as stated above. There was no change in the average balance of the subordinated debentures between the 2024 and 2025 six-month periods. In June 2020, the Company issued $75.0 million of 5.50% fixed-to-floating rate subordinated notes due June 15, 2030. The notes were sold at par, resulting in net proceeds, after underwriting discounts and commissions and other issuance costs, of approximately $73.5 million. These issuance costs were amortized over the expected life of the notes, which was five years from the issuance date, impacting the overall interest expense on the notes. On June 15, 2025, the Company redeemed all $75.0 million aggregate principal amount of these subordinated notes. Interest expense on subordinated notes decreased $196,000 when compared to the prior-year three and six month periods, primarily due to the redemption of the subordinated notes. Net Interest Income Net interest income for the three months ended June 30, 2025 increased $4.2 million to $51.0 million, compared to $46.8 million for the three months ended June 30, 2024. Net interest margin was 3.68% in the three months ended June 30, 2025, compared to 3.43% in the three months ended June 30, 2024, an increase of 25 basis points, or 7.3%. The Company experienced an increase in interest income on investment securities, a decrease in interest income on loans, a decrease in interest expense on deposits, a decrease in interest expense on short-term borrowings, a decrease in interest expense on subordinated notes, a decrease in interest expense on subordinated debentures issued to capital trust and a decrease in interest expense on securities sold under reverse repurchase agreements with customers. Net interest income for the six months ended June 30, 2025 increased $8.7 million to $100.3 million, compared to $91.6 million for the six months ended June 30, 2024. Net interest margin was 3.63% in the six months ended June 30, 2025, compared to 3.38% in the six months ended June 30, 2024, an increase of 25 basis points, or 7.4%. The Company experienced an increase in interest income on loans, an increase in interest income on investment securities, a decrease in interest expense on deposits, a decrease in interest expense on subordinated notes, a decrease in interest expense on subordinated debentures issued to capital trust, an increase in interest expense on short-term borrowings and an increase in interest expense on securities sold under reverse repurchase agreements with customers. The Company’s overall average interest rate spread increased 32 basis points, or 11.5%, from 2.77% during the three months ended June 30, 2024 to 3.09% during the three months ended June 30, 2025, due to a 42 basis point decrease in the weighted average rate paid on interest-bearing liabilities, partially offset by a 10 basis point decrease in the weighted average yield earned on interest-earning assets. In comparing the two periods, the yield on loans decreased 11 basis points, the yield on investment securities increased 27 basis points and the yield on other interest-earning assets decreased 101 basis points. The rate paid on deposits decreased 41 basis points, the rate paid on reverse repurchase agreements increased 21 basis points, the rate paid on short-term borrowings and other interest-bearing liabilities decreased 59 basis points and the rate paid on subordinated debentures issued to capital trust decreased 103 basis points. Interest rates earned on loans and paid on deposits are affected by the mix of the loan and deposit portfolios, the duration of loans and time deposits, the amount of fixed-rate and variable-rate loans and other repricing characteristics. In 2023, overall competition for deposits intensified as a few banks experienced significant liquidity issues in March and April 2023 and market rates moved higher more rapidly. Overall competition for deposits remained elevated in 2024 and market interest rates were higher in 2024, until the federal funds rate was reduced in late 2024. This resulted in lower market interest rates into the first half of 2025. The Company’s overall average interest rate spread increased 34 basis points, or 12.5%, from 2.71% during the six months ended June 30, 2024 to 3.05% during the six months ended June 30, 2025. The increase was due to a 34 basis point decrease in the weighted average rate paid on interest-bearing liabilities. The weighted average yield earned on interest-earning assets was 5.83% in both periods. In comparing the two periods, the yield on loans decreased one basis point, the yield on investment securities increased 30 basis points and the yield on other interest-earning assets decreased 99 basis points. The rate paid on deposits decreased 37 basis points, the rate paid on reverse repurchase agreements increased 10 basis points, the rate paid on short-term borrowings and other interest-bearing liabilities decreased 55 basis points and the rate paid on subordinated debentures issued to capital trust decreased 105 basis points. 53 ​ For additional information on net interest income components, refer to the “Average Balances, Interest Rates and Yields” tables in this Quarterly Report on Form 10-Q. Provision for and Allowance for Credit Losses Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as changes in underwriting standards, portfolio mix and delinquency level or term, as well as for changes in economic conditions, including but not limited to, changes in the national unemployment rate, commercial real estate price index, consumer sentiment, gross domestic product (GDP) and construction spending. Challenging or worsening economic conditions from higher inflation or interest rates, COVID-19 and subsequent variant outbreaks or similar events, global unrest or other factors may lead to increased losses in the portfolio and/or requirements for an increase in provision expense. Management maintains various controls in an attempt to identify and limit future losses, such as a watch list of problem loans and potential problem loans, documented loan administration policies and loan review staff to review the quality and anticipated collectability of the portfolio. Additional procedures provide for frequent management review of the loan portfolio based on loan size, loan type, delinquencies, financial analysis, ongoing correspondence with borrowers and problem loan workouts. Management determines which loans are non-homogeneous or collateral-dependent, evaluates risk of loss and makes additional provisions to expense, if necessary, to maintain the allowance at a satisfactory level. During the three months ended June 30, 2025 and June 30, 2024, the Company did not record a provision expense on its portfolio of outstanding loans. During the six months ended June 30, 2025, the Company did not record a provision expense on its portfolio of outstanding loans. During the six months ended June 30, 2024, the Company recorded provision expense of $500,000 on its portfolio of outstanding loans. Net recoveries were $111,000 for the three months ended June 30, 2025, compared to net recoveries of $168,000 in the three months ended June 30, 2024. Net recoveries were $55,000 for the six months ended June 30, 2025, compared to net recoveries of $85,000 in the six months ended June 30, 2024. The provision for losses on unfunded commitments for the three months ended June 30, 2025 was a negative provision of $110,000, compared to a negative provision of $607,000 for the three months ended June 30, 2024. The provision for losses on unfunded commitments for the six months ended June 30, 2025 was a negative provision of $458,000, compared to a negative provision of $477,000 for the six months ended June 30, 2024. General market conditions and unique circumstances related to specific industries and individual projects contribute to the determination of the levels of provisions and charge-offs in each period. The Bank’s allowance for credit losses as a percentage of total loans was 1.41% and 1.36% at June 30, 2025 and December 31, 2024, respectively. Management considers the allowance for credit losses adequate to cover losses inherent in the Bank’s loan portfolio at June 30, 2025, based on recent reviews of the Bank’s loan portfolio and current economic conditions. However, if challenging economic conditions persist or worsen, or if management’s assessment of the loan portfolio changes, additional provisions for credit loss may be required, which could adversely impact the Company’s future results of operations and financial condition. Non-performing Assets As a result of changes in loan portfolio composition, changes in economic and market conditions and other factors specific to a borrower’s circumstances, the level of non-performing assets will fluctuate. At June 30, 2025, non-performing assets were $8.1 million, a decrease of $1.5 million from $9.6 million at December 31, 2024. Non-performing assets as a percentage of total assets were 0.14% and 0.16% at June 30, 2025 and December 31, 2024, respectively. Compared to December 31, 2024, non-performing loans decreased $1.5 million, to $2.0 million at June 30, 2025. Compared to December 31, 2024, foreclosed assets increased $47,000 to $6.0 million at June 30, 2025. 54 ​ Non-performing Loans . Activity in the non-performing loans category during the six months ended June 30, 2025 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Transfers to ​ Transfers to ​ ​ ​ ​ ​ ​ ​ ​ Beginning ​ Additions ​ Removed ​ Potential ​ Foreclosed ​ ​ ​ ​ ​ Ending ​ ​ Balance, ​ to Non- ​ from Non- ​ Problem ​ Assets and ​ Charge- ​ ​ ​ Balance, ​ January 1 Performing Performing Loans Repossessions Offs Payments June 30 ​ (In Thousands) One- to four-family construction ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Subdivision construction ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Land development ​ 464 ​ — ​ — ​ — ​ — ​ — ​ (464) ​ — Commercial construction ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — One- to four-family residential ​ 2,631 ​ 628 ​ — ​ — ​ — ​ — ​ (1,233) ​ 2,026 Other residential (multi-family) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Commercial real estate ​ 77 ​ — ​ — ​ — ​ (77) ​ — ​ — ​ — Commercial business ​ 384 ​ — ​ — ​ — ​ — ​ (135) ​ (249) ​ — Consumer ​ 17 ​ 31 ​ — ​ — ​ — ​ — ​ (30) ​ 18 Total non-performing loans ​ $ 3,573 ​ $ 659 ​ $ — ​ $ — ​ $ (77) ​ $ (135) ​ $ (1,976) ​ $ 2,044 ​ At June 30, 2025, the non-performing one- to four-family residential category included eight loans, three of which were added in the six months ended June 30, 2025. The largest relationship in the category totaled $614,000, or 30.3% of the category, and was added to non-performing loans in 2024. It is collateralized by a single-family residential property in the Sarasota, Florida area. During the six months ended June 30, 2025, one- to four-family residential loans experienced two loan pay-offs totaling $896,000 and another loan had a principal pay-down totaling $320,000. Additionally, the only loan in the non-performing land development category at the beginning of the period paid off. The non-performing consumer category included three loans at June 30, 2025. Potential Problem Loans. Potential problem loans increased $144,000, to $7.2 million at June 30, 2025 from $7.1 million at December 31, 2024. Potential problem loans are loans which management has identified through routine internal review procedures as having possible credit problems that may cause the borrowers difficulty in complying with the current repayment terms. These loans are not reflected in non-performing assets. Activity in the potential problem loans category during the six months ended June 30, 2025 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Removed ​ Transfers to ​ ​ ​ ​ ​ Beginning ​ Additions ​ from ​ Transfers to ​ Foreclosed ​ ​ ​ Loan ​ Ending ​ ​ Balance, ​ to Potential ​ Potential ​ Non- ​ Assets and ​ Charge- ​ Advances ​ Balance, ​ January 1 Problem Problem Performing Repossessions Offs (Payments) June 30 ​ ​ (In Thousands) One- to four-family construction ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Subdivision construction ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Land development ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Commercial construction ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — One- to four-family residential ​ 1,202 ​ 1,133 ​ (459) ​ — ​ — ​ (9) ​ (28) ​ 1,839 Other residential (multi-family) ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Commercial real estate ​ 4,331 ​ — ​ — ​ — ​ — ​ — ​ (34) ​ 4,297 Commercial business ​ — ​ 33 ​ — ​ — ​ — ​ — ​ — ​ 33 Consumer ​ 1,529 ​ 188 ​ (642) ​ — ​ (2) ​ (11) ​ (25) ​ 1,037 Total potential problem loans ​ $ 7,062 ​ $ 1,354 ​ $ (1,101) ​ $ — ​ $ (2) ​ $ (20) ​ $ (87) ​ $ 7,206 ​ At June 30, 2025, the commercial real estate category of potential problem loans included three loans, all of which are part of one relationship and were added to potential problem loans in 2024. This relationship is collateralized by three nursing care facilities located in southwest Missouri. The borrower’s business cash flow was negatively impacted by a reduction in available labor and increased operating costs, as well as ongoing changes to the Missouri Medicaid reimbursement rate. Monthly payments were timely made prior to the transfer to this category and have continued to be paid timely. At June 30, 2025, the one- to four-family residential category of potential problem loans included ten loans, three of which were added to potential problem loans in the six months ended June 30, 2025. The largest relationship in the one- to four-family category, which was reclassified from the consumer category earlier in 2025, totaled $963,000 and is collateralized by multiple single-family residential properties in Indiana and Florida. The consumer category of potential problem loans included 14 loans, eight of which were added during the six months ended June 30, 2025. The largest loan in the consumer category of potential problem loans is a home equity loan, totaling $784,000, related to the nursing care facility relationship, noted above. 55 ​ Other Real Estate Owned and Repossessions. All of the $6.0 million of other real estate owned and repossessions at June 30, 2025 were acquired through foreclosure. Activity in foreclosed assets and repossessions during the six months ended June 30, 2025 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning ​ ​ ​ ORE and ​ ​ ​ ORE and ​ Ending ​ ​ Balance, ​ ​ ​ Repossession ​ Capitalized ​ Repossession ​ Balance, ​ ​ January 1 ​ Additions ​ Sales ​ Costs ​ Write-Downs ​ June 30 ​ (In Thousands) One- to four-family construction $ — $ — $ — $ — $ — $ — Subdivision construction ​ — ​ — ​ — ​ — ​ — ​ — Land development ​ — ​ — ​ — ​ — ​ — ​ — Commercial construction ​ — ​ — ​ — ​ — ​ — ​ — One- to four-family residential ​ — ​ — ​ — ​ — ​ — ​ — Other residential (multi-family) ​ — ​ — ​ — ​ — ​ — ​ — Commercial real estate ​ 5,960 ​ 76 ​ — ​ — ​ — ​ 6,036 Commercial business ​ — ​ — ​ — ​ — ​ — ​ — Consumer ​ 33 ​ 8 ​ (37) ​ — ​ — ​ 4 Total foreclosed assets and repossessions ​ $ 5,993 ​ $ 84 ​ $ (37) ​ $ — ​ $ — ​ $ 6,040 ​ At June 30, 2025, the commercial real estate category of foreclosed assets consisted of two foreclosed properties, the largest of which, totaling $6.0 million, was an office building located in Clayton, Mo. This asset was foreclosed upon in the fourth quarter of 2024.The additions and sales in the consumer category were due to the volume of repossessions of automobiles, which generally are subject to a shorter repossession process. Loans Classified “Watch” and “Special Mention” The Company reviews the credit quality of its loan portfolio using an internal grading system that classifies loans as “Satisfactory,” “Watch,” “Special Mention,” “Substandard” and “Doubtful.” Multiple loan reviews take place on a continuous basis by credit risk and lending management. Reviews are focused on financial performance, occupancy trends, delinquency status, covenant compliance, collateral support, economic considerations and various other factors. Loans classified as “Watch” are being monitored due to indications of potential weaknesses or deficiencies that may require future reclassification as special mention or substandard. Loans classified as “Watch” increased $10.5 million, from $15.9 million at December 31, 2024 to $26.4 million at June 30, 2025, primarily due to the addition of one loan totaling $11.0 million that is secured by a nursing care facility located in southwest Florida. The loan was downgraded due to the borrower’s financial performance and delinquent taxes (which have since been paid). While loans classified as “Special Mention” are not adversely classified, they are deserving of management’s close attention to ensure repayment prospects and that the credit positions of the assets do not deteriorate and expose the institution to elevated risk, which might warrant adverse classification at a future date. In the six months ended June 30, 2025, loans classified as “Special Mention” decreased $1.4 million, to $32,000, primarily due to the repayment in full of two loans totaling $1.4 million. See Note 6 “Loans and Allowance for Credit Losses” in the Notes to Consolidated Financial Statements included in this report for further discussion of the Company’s loan grading system. Non-interest Income For the three months ended June 30, 2025, non-interest income decreased $1.6 million, to $8.2 million, when compared to the three months ended June 30, 2024, primarily as a result of the following items: Other income : Other income decreased $1.6 million compared to the prior-year period. In the 2024 three-month period, the Company recorded $2.7 million of other income, net of expenses and write-offs, related to the termination of the master agreement between the Company and a third-party software vendor for the intended conversion of the Company’s core banking platform. Separately, in the three months ended June 30, 2025, the Company recorded income of $1.1 million related to exits from, and other activities of, its investments in tax credit partnerships. Net gains on loan sales : Net gains on loan sales decreased $234,000 compared to the prior-year period. The decrease was due to a decrease in balance of fixed-rate single-family mortgage loans originated and sold during the 2025 period compared to the 2024 period. Fixed rate single-family mortgage loans originated are generally subsequently sold in the secondary market. 56 ​ Late charges and fees on loans : Late charges and fees on loans increased $204,000 compared to the prior-year period. This increase was primarily due to prepayment fees on one large commercial real estate loan which paid off in the 2025 period. For the six months ended June 30, 2025, non-interest income decreased $1.8 million, to $14.8 million, when compared to the six months ended June 30, 2024, primarily as a result of the following items: Other income : Other income decreased $1.7 million, or 36.1%, compared to the prior-year period, for the same reasons noted above. Net gains on loan sales : Net gains on loan sales decreased $310,000, or 17.2%, compared to the prior-year period, for the same reason noted above. Late charges and fees on loans : Late charges and fees on loans increased $280,000 compared to the prior-year period, for the same reason noted above. Non-interest Expense For the three months ended June 30, 2025, non-interest expense decreased $1.4 million, to $35.0 million, when compared to the three months ended June 30, 2024, primarily as a result of the following items: Legal, audit and other professional fees : Legal, audit and other professional fees decreased $935,000, or 50.2%, from the prior-year period, to $929,000. In the three months ended June 30, 2024, the Company expensed a total of $902,000 related to training and implementation costs for the intended core systems conversion and professional fees to consultants engaged to support the Company’s proposed transition of core and ancillary software and information technology systems, compared to $46,000 expensed in the three months ended June 30, 2025. Expense (income) on other real estate owned : Expenses on other real estate owned decreased $453,000, or 158.9%, to income of $168,000 compared to the prior-year period. In the three months ended June 30, 2025, the Company collected a total of $445,000 in rental income from other real estate owned, compared to $24,000 collected for the three months ended June 30, 2024. The 2025 period included rental income from the $6.0 million office building asset that was added to other real estate owned in late 2024. Other operating expenses : Other operating expenses decreased $444,000, or 17.3%, from the prior-year period. In the 2024 period, the Company recorded expenses totaling $600,000 related to the resolution of compliance matters, with no similar expenses recorded in the current-year period. Net occupancy and equipment expenses : Net occupancy and equipment expenses increased $594,000, or 7.6%, from the prior-year period. Various components of computer license and support expenses related to upgrades of core systems capabilities collectively increased by $502,000 in the 2025 period compared to the 2024 period. For the six months ended June 30, 2025, non-interest expense decreased $1.0 million, to $69.8 million, when compared to the six months ended June 30, 2024, primarily as a result of the following items: Legal, audit and other professional fees : Legal, audit and other professional fees decreased $1.6 million, or 45.2%, from the prior-year period, to $2.0 million. In the 2024 period, the Company expensed a total of $2.0 million related to training and implementation costs for the intended core systems conversion and professional fees to consultants engaged to support the Company’s proposed transition of core and ancillary software and information technology systems, compared to $105,000 expensed in the 2025 period. Expense (income) on other real estate owned : Expenses on other real estate owned decreased $584,000, or 168.8%, to income of $238,000 compared to the prior-year period, for the same reason noted above. 57 ​ Other operating expenses : Other operating expenses decreased $462,000, or 10.7%, from the prior-year period, for the same reason noted above. Salaries and employee benefits : Salaries and employee benefits increased $592,000, or 1.5%, in the six months ended June 30, 2025 compared to the prior-year period. Much of this increase related to normal annual merit increases in various lending and operations areas. Net occupancy and equipment expenses : Net occupancy and equipment expenses increased $1.3 million, or 8.2%, from the prior-year period. This increase was primarily related to various components of computer license and support expenses in connection with upgrades of core systems capabilities and collectively increased by $824,000 in the six months ended June 30, 2025 compared to the same period in 2024. In addition, parking lot maintenance expenses, primarily related to above-normal snow removal activity, collectively increased by $242,000 in the six months ended June 30, 2025 compared to the same period in 2024. The Company’s efficiency ratio for the three months ended June 30, 2025, was 59.16% compared to 64.27% for the same period in 2024. The Company’s efficiency ratio for the six months ended June 30, 2025, was 60.67% compared to 65.42% for the same period in 2024. The Company’s ratio of non-interest expense to average assets was 2.37% and 2.35% for the three- and six-months ended June 30, 2025, respectively, compared to 2.50% and 2.44% for the three- and six-months ended June 30, 2024, respectively. Average assets for the three months ended June 30, 2025, increased $86.0 million, or 1.5%, compared to the three months ended June 30, 2024, and average assets for the six months ended June 30, 2025, increased $143.0 million, or 2.5%, compared to the six months ended June 30, 2024. The increases in average assets were primarily due to growth in average balances of net loans receivable and investment securities. Provision for Income Taxes For each of the three months ended June 30, 2025 and 2024, the Company’s effective tax rate was 18.5%. For the six months ended June 30, 2025 and 2024, the Company’s effective tax rate was 19.2% and 18.8%, respectively. These effective rates were below the statutory federal tax rate of 21%, due primarily to the utilization of certain investment tax credits and the Company’s tax-exempt investments and tax-exempt loans. The Company’s effective tax rate may fluctuate in future periods as it is impacted by the level and timing of the Company’s utilization of tax credits, the level of tax-exempt investments and loans, the amount of taxable income in various state jurisdictions and the overall level of pre-tax income. State tax expense estimates continually evolve as taxable income and apportionment between states are analyzed. The Company currently expects its effective tax rate (combined federal and state) will be approximately 18.0% to 20.0% in future periods. 58 ​ Average Balances, Interest Rates and Yields ​ The following tables present, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates, and the net interest margin. Average balances of loans receivable include the average balances of nonaccrual loans for each period. Interest income on loans includes interest received on nonaccrual loans on a cash basis. Interest income on loans also includes the amortization of net loan fees, which were deferred in accordance with accounting standards. Net loan fees included in interest income were $1.1 million for both the three months ended June 30, 2025 and the three months ended June 30, 2024. Net loan fees included in interest income were $2.1 million and $2.3 million for the six months ended June 30, 2025 and 2024, respectively. Tax-exempt income was not calculated on a tax equivalent basis. The tables do not reflect any effect of income taxes. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ Three Months Ended ​ Three Months Ended ​ ​ 2025 ​ June 30, 2025 ​ June 30, 2024 ​ ​ Yield/ ​ Average ​ ​ ​ ​ Yield/ ​ Average ​ ​ ​ Yield/ ​ Rate Balance Interest Rate Balance Interest Rate ​ ​ (Dollars in Thousands) Interest-earning assets: ​ ​ ​ ​ ​ Loans receivable: ​ ​ ​ ​ ​ One- to four-family residential 4.24 % $ 822,283 ​ $ 8,750 4.27 % $ 877,957 ​ $ 8,769 4.02 % Other residential (multi-family) 6.91 ​ 1,565,447 ​ 27,281 6.99 ​ 1,072,168 ​ 19,633 7.36 ​ Commercial real estate 6.19 ​ 1,489,015 ​ 23,082 6.22 ​ 1,499,893 ​ 23,296 6.25 ​ Construction 7.07 ​ 480,254 ​ 8,617 7.20 ​ 803,478 ​ 15,525 7.77 ​ Commercial business(1) 5.93 ​ 208,119 ​ 3,517 6.78 ​ 266,187 ​ 4,375 6.61 ​ Other loans 6.39 ​ 167,548 ​ 2,583 ​ 6.18 ​ 170,467 ​ 2,697 6.36 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans receivable 6.16 ​ 4,732,666 ​ 73,830 6.26 ​ 4,690,150 ​ 74,295 6.37 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Investment securities(1) 3.17 ​ 727,336 ​ 6,099 3.36 ​ 696,239 ​ 5,347 3.09 ​ Interest-earning deposits in other banks 4.37 ​ 97,463 ​ 1,046 4.30 ​ 97,340 ​ 1,285 5.31 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total interest-earning assets 5.74 ​ 5,557,465 ​ 80,975 5.84 ​ 5,483,729 ​ 80,927 5.94 ​ Non-interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ ​ ​ 100,289 ​ ​ ​ ​ 94,669 ​ ​ ​ ​ Other non-earning assets ​ ​ ​ 256,923 ​ ​ ​ ​ 250,244 ​ ​ ​ ​ Total assets ​ ​ ​ $ 5,914,677 ​ ​ ​ ​ $ 5,828,642 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing demand and savings 1.41 ​ $ 2,225,933 ​ 7,791 1.40 ​ $ 2,234,824 ​ 9,794 ​ 1.76 ​ Time deposits 3.42 ​ 757,608 ​ 6,521 3.45 ​ 894,475 ​ 9,073 ​ 4.08 ​ Brokered deposits ​ 4.44 ​ ​ 895,340 ​ ​ 10,056 ​ 4.50 ​ ​ 683,337 ​ ​ 8,916 ​ 5.25 ​ Total deposits 2.47 ​ 3,878,881 ​ 24,368 2.52 ​ 3,812,636 ​ 27,783 ​ 2.93 ​ Securities sold under reverse repurchase agreements ​ 2.33 ​ ​ 65,607 ​ ​ 372 ​ 2.27 ​ ​ 76,969 ​ ​ 394 ​ 2.06 ​ Short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities 4.55 ​ 347,303 ​ 3,974 4.59 ​ 339,270 ​ 4,373 ​ 5.18 ​ Subordinated debentures issued to capital trusts 6.14 ​ 25,774 ​ 389 6.05 ​ 25,774 ​ 454 ​ 7.08 ​ Subordinated notes — ​ 62,631 ​ 909 5.82 ​ 74,699 ​ 1,105 ​ 5.95 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total interest-bearing liabilities 2.66 ​ 4,380,196 ​ 30,012 2.75 ​ 4,329,348 ​ 34,109 ​ 3.17 ​ Non-interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Demand deposits ​ ​ ​ 849,862 ​ ​ ​ ​ 853,555 ​ ​ ​ ​ Other liabilities ​ ​ ​ 66,585 ​ ​ ​ ​ 80,905 ​ ​ ​ ​ Total liabilities ​ ​ ​ 5,296,643 ​ ​ ​ ​ 5,263,808 ​ ​ ​ ​ Stockholders’ equity ​ ​ ​ 618,034 ​ ​ ​ ​ 564,834 ​ ​ ​ ​ Total liabilities and stockholders’ equity ​ ​ ​ $ 5,914,677 ​ ​ ​ ​ $ 5,828,642 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income: ​ ​ ​ ​ $ 50,963 ​ ​ ​ ​ $ 46,818 ​ ​ Interest rate spread 3.08 % ​ ​ ​ ​ ​ 3.09 % ​ ​ ​ ​ ​ 2.77 % Net interest margin* ​ ​ ​ ​ ​ ​ ​ ​ 3.68 % ​ ​ ​ 3.43 % Average interest-earning assets to average interest-bearing liabilities ​ ​ ​ 126.9 % ​ ​ ​ 126.7 % ​ ​ ​ * Defined as the Company’s net interest income divided by total average interest-earning assets. (1) Of the total average balances of investment securities, average tax-exempt investment securities were $51.9 million and $56.3 million for the three months ended June 30, 2025 and 2024, respectively. In addition, average tax-exempt loans and industrial revenue bonds were $9.7 million and $10.7 million for the three months ended June 30, 2025 and 2024, respectively. Interest income on tax-exempt assets included in this table was $610,000 and $589,000 for the three months ended June 30, 2025 and 2024, respectively. Interest income net of disallowed interest expense related to tax-exempt assets was $523,000 and $481,000 for the three months ended June 30, 2025 and 2024, respectively. ​ 59 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ Six Months Ended ​ Six Months Ended ​ ​ 2025 ​ June 30, 2025 ​ June 30, 2024 ​ ​ Yield/ ​ Average ​ ​ ​ ​ Yield/ ​ Average ​ ​ ​ ​ Yield/ ​ Rate Balance Interest Rate Balance Interest Rate ​ (Dollars in Thousands) ​ Interest-earning assets: ​ Loans receivable: ​ ​ ​ ​ ​ One- to four-family residential 4.24 % $ 826,426 $ 17,318 4.23 % $ 883,963 $ 17,466 3.97 % Other residential (multi-family) 6.91 ​ ​ 1,555,881 ​ ​ 53,731 6.96 ​ ​ 1,016,071 ​ ​ 36,491 7.22 ​ Commercial real estate 6.19 ​ ​ 1,499,665 ​ ​ 46,096 6.20 ​ ​ 1,499,767 ​ ​ 46,064 6.18 ​ Construction 7.07 ​ ​ 485,392 ​ ​ 17,270 7.17 ​ ​ 830,025 ​ ​ 31,368 7.60 ​ Commercial business(1) 5.93 ​ ​ 209,944 ​ ​ 7,339 7.05 ​ ​ 276,131 ​ ​ 8,984 6.54 ​ Other loans 6.39 ​ ​ 166,989 ​ ​ 5,147 6.22 ​ ​ 172,051 ​ ​ 4,998 5.84 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans receivable 6.16 ​ ​ 4,744,297 ​ ​ 146,901 6.24 ​ ​ 4,678,008 ​ ​ 145,371 6.25 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Investment securities(1) 3.17 ​ ​ 732,699 ​ ​ 12,173 3.35 ​ ​ 682,960 ​ ​ 10,357 3.05 ​ Interest-earning deposits in other banks 4.37 ​ ​ 101,238 ​ ​ 2,144 4.27 ​ ​ 98,922 ​ ​ 2,589 5.26 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total interest-earning assets 5.74 ​ ​ 5,578,234 ​ ​ 161,218 5.83 ​ ​ 5,459,890 ​ ​ 158,317 5.83 ​ Non-interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ ​ ​ ​ 100,537 ​ ​ ​ ​ ​ ​ ​ 92,572 ​ ​ ​ ​ ​ ​ Other non-earning assets ​ ​ ​ ​ 259,692 ​ ​ ​ ​ ​ ​ ​ 243,029 ​ ​ ​ ​ ​ ​ Total assets ​ ​ $ 5,938,463 ​ ​ ​ ​ ​ $ 5,795,491 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing demand and savings 1.41 $ 2,223,716 ​ ​ 15,588 1.41 $ 2,229,302 ​ ​ 19,276 1.74 ​ Time deposits 3.42 ​ ​ 764,791 ​ ​ 13,235 3.49 ​ ​ 916,098 ​ ​ 18,238 4.00 ​ Brokered deposits 4.44 ​ ​ 893,983 ​ ​ 20,145 4.54 ​ ​ 686,079 ​ ​ 17,906 5.25 ​ Total deposits 2.47 ​ ​ 3,882,490 ​ ​ 48,968 2.54 ​ ​ 3,831,479 ​ ​ 55,420 2.91 ​ Securities sold under reverse repurchase agreements 2.33 ​ ​ 73,957 ​ ​ 743 2.03 ​ ​ 75,718 ​ ​ 727 1.93 ​ Short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities 4.55 ​ ​ 369,849 ​ ​ 8,424 4.59 ​ ​ 290,431 ​ ​ 7,417 5.14 ​ Subordinated debentures issued to capital trusts 6.14 ​ ​ 25,774 ​ ​ 771 6.03 ​ ​ 25,774 ​ ​ 908 7.08 ​ Subordinated notes — ​ ​ 68,741 ​ ​ 2,015 5.91 ​ ​ 74,659 ​ ​ 2,211 5.96 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total interest-bearing liabilities 2.66 ​ ​ 4,420,811 ​ ​ 60,921 2.78 ​ ​ 4,298,061 ​ ​ 66,683 3.12 ​ Non-interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Demand deposits ​ ​ ​ ​ 835,888 ​ ​ ​ ​ ​ ​ ​ 854,202 ​ ​ ​ ​ ​ ​ Other liabilities ​ ​ ​ ​ 68,961 ​ ​ ​ ​ ​ ​ ​ 74,391 ​ ​ ​ ​ ​ ​ Total liabilities ​ ​ ​ ​ 5,325,660 ​ ​ ​ ​ ​ ​ ​ 5,226,654 ​ ​ ​ ​ ​ ​ Stockholders’ equity ​ ​ ​ ​ 612,803 ​ ​ ​ ​ ​ ​ ​ 568,837 ​ ​ ​ ​ ​ ​ Total liabilities and stockholders’ equity ​ ​ $ 5,938,463 ​ ​ ​ ​ ​ $ 5,795,491 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income: ​ ​ ​ ​ ​ $ 100,297 ​ ​ ​ ​ ​ $ 91,634 ​ ​ ​ Interest rate spread 3.08 % ​ ​ ​ ​ ​ 3.05 % ​ ​ ​ ​ ​ 2.71 % Net interest margin* ​ ​ ​ ​ ​ ​ ​ ​ 3.63 % ​ ​ ​ ​ ​ 3.38 % Average interest-earning assets to average interest-bearing liabilities ​ ​ ​ ​ 126.2 % ​ ​ ​ ​ ​ ​ 127.0 % ​ ​ ​ ​ ​ * Defined as the Company’s net interest income divided by total average interest-earning assets. (1) Of the total average balances of investment securities, average tax-exempt investment securities were $53.5 million and $56.9 million for the six months ended June 30, 2025 and 2024, respectively. In addition, average tax-exempt loans and industrial revenue bonds were $9.8 million and $11.1 million for the six months ended June 30, 2025 and 2024, respectively. Interest income on tax-exempt assets included in this table was $1.2 million for each of the six months ended June 30, 2025 and 2024, respectively. Interest income net of disallowed interest expense related to tax-exempt assets was $981,000 and $941,000 for the six months ended June 30, 2025 and 2024, respectively. 60 ​ Rate/Volume Analysis The following tables present the dollar amounts of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities for the periods shown. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) changes in rate (i.e., changes in rate multiplied by old volume) and (ii) changes in volume (i.e., changes in volume multiplied by old rate). For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately to volume and rate. Tax-exempt income was not calculated on a tax equivalent basis. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ 2025 vs. 2024 ​ ​ Increase (Decrease) Total ​ ​ Due to ​ Increase ​ ​ Rate Volume ​ (Decrease) ​ ​ (Dollars in Thousands) Interest-earning assets: ​ ​ ​ Loans receivable ​ $ (943) ​ $ 478 ​ $ (465) Investment securities ​ 501 ​ 251 ​ 752 Interest-earning deposits in other banks ​ (241) ​ 2 ​ (239) Total interest-earning assets ​ (683) ​ 731 ​ 48 Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ Demand deposits ​ (1,964) ​ (39) ​ (2,003) Time deposits ​ (1,279) ​ (1,273) ​ (2,552) Brokered deposits ​ ​ (957) ​ ​ 2,097 ​ ​ 1,140 Total deposits ​ (4,200) ​ 785 ​ (3,415) Securities sold under reverse repurchase agreements ​ ​ 53 ​ ​ (75) ​ ​ (22) Short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities ​ (502) ​ 103 ​ ​ (399) Subordinated debentures issued to capital trust ​ (65) ​ — ​ (65) Subordinated notes ​ (25) ​ (171) ​ (196) Total interest-bearing liabilities ​ (4,739) ​ 642 ​ (4,097) Net interest income ​ $ 4,056 ​ $ 89 ​ $ 4,145 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ 2025 vs. 2024 ​ ​ Increase (Decrease) ​ Total ​ ​ Due to ​ Increase ​ Rate Volume (Decrease) ​ (Dollars in Thousands) Interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans receivable $ (95) $ 1,625 $ 1,530 Investment securities ​ ​ 1,044 ​ ​ 772 ​ ​ 1,816 Interest-earning deposits in other banks ​ ​ (508) ​ ​ 63 ​ ​ (445) Total interest-earning assets ​ ​ 441 ​ ​ 2,460 ​ ​ 2,901 Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Demand deposits ​ ​ (3,640) ​ ​ (48) ​ ​ (3,688) Time deposits ​ ​ (2,188) ​ ​ (2,815) ​ ​ (5,003) Brokered deposits ​ ​ (1,780) ​ ​ 4,019 ​ ​ 2,239 Total deposits ​ ​ (7,608) ​ ​ 1,156 ​ ​ (6,452) Securities sold under reverse repurchase agreements ​ ​ 21 ​ ​ (5) ​ ​ 16 Short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities ​ ​ (634) ​ ​ 1,641 ​ ​ 1,007 Subordinated debentures issued to capital trust ​ ​ (137) ​ ​ — ​ ​ (137) Subordinated notes ​ ​ (16) ​ ​ (180) ​ ​ (196) Total interest-bearing liabilities ​ ​ (8,374) ​ ​ 2,612 ​ ​ (5,762) Net interest income $ 8,815 $ (152) $ 8,663 ​ 61 ​ Liquidity Liquidity is a measure of the Company’s ability to generate sufficient cash to meet present and future financial obligations in a timely manner through either the sale or maturity of existing assets or the acquisition of additional funds through liability management. These obligations include the credit needs of customers, funding deposit withdrawals, and the day-to-day operations of the Company. Liquid assets include cash, interest-bearing deposits with financial institutions and certain investment securities and loans. As a result of the Company’s ability to generate liquidity primarily through liability funding, management believes that the Company maintains overall liquidity sufficient to satisfy its depositors’ requirements and meet its borrowers’ credit needs. At June 30, 2025, the Company had commitments of approximately $20.0 million to fund loan originations, $1.14 billion of unused lines of credit and unadvanced loans, and $17.0 million of outstanding letters of credit. Loan commitments and the unfunded portion of loans at the dates indicated were as follows (In Thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ March 31, December 31, December 31, December 31, December 31, ​ 2025 2025 2024 2023 ​ 2022 2021 Closed non-construction loans with unused available lines ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Secured by real estate (one- to four-family) ​ $ 211,453 ​ $ 211,119 ​ $ 205,599 ​ $ 203,964 ​ $ 199,182 ​ $ 175,682 Secured by real estate (not one- to four-family) ​ ​ — ​ ​ — ​ ​ — ​ — ​ — ​ 23,752 Not secured by real estate - commercial business ​ ​ 102,891 ​ ​ 106,211 ​ ​ 106,621 ​ 82,435 ​ 104,452 ​ 91,786 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Closed construction loans with unused available lines ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Secured by real estate (one- to four-family) ​ ​ 96,935 ​ ​ 96,807 ​ ​ 94,501 ​ 101,545 ​ 100,669 ​ 74,501 Secured by real estate (not one- to four-family) ​ ​ 644,427 ​ ​ 657,828 ​ ​ 703,947 ​ 719,039 ​ 1,444,450 ​ 1,092,029 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loan commitments not closed ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Secured by real estate (one- to four-family) ​ ​ 17,148 ​ ​ 19,264 ​ ​ 14,373 ​ 12,347 ​ 16,819 ​ 53,529 Secured by real estate (not one- to four-family) ​ ​ 13,002 ​ ​ 50,296 ​ ​ 53,660 ​ 48,153 ​ 157,645 ​ 146,826 Not secured by real estate - commercial business ​ ​ 27,003 ​ ​ 18,484 ​ ​ 22,884 ​ 11,763 ​ 50,145 ​ 12,920 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 1,112,859 ​ $ 1,160,009 ​ $ 1,201,585 ​ $ 1,179,246 ​ $ 2,073,362 ​ $ 1,671,025 ​ The Company’s primary sources of funds are customer deposits, brokered deposits, short-term borrowings at the FHLBank, other borrowings, loan repayments, unpledged securities, proceeds from sales of loans and available-for-sale securities, and funds provided from operations. The Company utilizes some or all these sources of funds depending on the comparative costs and availability at the time. The Company has from time to time chosen not to pay rates on deposits as high as the rates paid by certain of its competitors and, when believed to be appropriate, supplements deposits with less expensive alternative sources of funds. In mid-2022, the Company steadily began increasing the interest rates it paid on many deposit products until September 2024 when the Company decreased the interest rates it paid on certain deposit products. The Company has also utilized both fixed-rate and floating-rate brokered deposits of varying terms, as well as overnight FHLBank borrowings. At June 30 , 2025 and December 31, 2024, the Company had the following available secured lines and on-balance sheet liquidity: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, December 31, ​ ​ 2025 ​ 2024 Federal Home Loan Bank line $ 1,216.1 million ​ $ 1,058.8 million Federal Reserve Bank line ​ ​ 338.9 million ​ ​ 346.4 million Cash and cash equivalents ​ ​ 245.9 million ​ ​ 195.8 million Unpledged securities – Available-for-sale ​ ​ 325.3 million ​ ​ 329.9 million Unpledged securities – Held-to-maturity ​ ​ 24.0 million ​ ​ 25.0 million ​ Statements of Cash Flows. The Company had positive cash flows from operating activities during the six months ended June 30, 2025 and 2024. The Company had positive cash flows from investing activities during the six months ended June 30, 2025, and negative cash flows from investing activities during the six months ended June 30, 2024. The Company had negative cash flows from financing activities during the six months ended June 30, 2025, and positive cash flows from financing activities during the six months ended June 30, 2024. 62 ​ Cash flows from operating activities for the periods covered by the Statements of Cash Flows have been primarily related to changes in accrued and deferred assets, credits and other liabilities, the provision for credit losses, depreciation and amortization, realized gains on sales of loans and the amortization of deferred loan origination fees and discounts (premiums) on loans and investments, all of which are non-cash or non-operating adjustments to operating cash flows. Net income adjusted for non-cash and non-operating items and the origination and sale of loans held for sale were the primary source of cash flows from operating activities. Operating activities provided cash of $54.3 million and $16.6 million during the six months ended June 30, 2025 and 2024, respectively. During the six months ended June 30, 2025 and 2024, investing activities provided cash of $170.9 million and used cash of $144.2 million, respectively. Investing activities in the 2025 period provided cash primarily due to net decreases in outstanding loan balances and principal payments received on investment securities. Investing activities in the 2024 period used cash primarily due to net increases in outstanding loan balances and principal purchases of investment securities. Changes in cash flows from financing activities during the periods covered by the Statements of Cash Flows were due primarily to changes in deposits after interest credited and changes in short-term borrowings, as well as advances from borrowers for taxes and insurance, dividend payments to stockholders and repurchases of the Company’s common stock. During the six months ended June 30, 2025 and 2024, financing activities used cash of $175.1 million and provided cash of $102.8 million, respectively. In the 2025 period, financing activities used cash primarily as a result of repayments of FRB borrowings and subordinated notes, repurchases of the Company’s common stock and dividends paid to stockholders, partially offset by net increases in time deposits, checking deposits and short-term borrowings. In the 2024 period, financing activities provided cash primarily as a result of increases in FRB borrowings and net increases in short-term borrowings, partially offset by repurchases of the Company’s common stock, dividends paid to stockholders and net decreases in checking and time deposits. Capital Resources Management continuously reviews the capital position of the Company and the Bank to ensure compliance with minimum regulatory requirements, as well as to explore ways to increase capital either by retained earnings or other means. At June 30, 2025, the Company’s total stockholders’ equity was $622.4 million, or 10.6% of total assets, equivalent to a book value of $54.61 per common share. As of December 31, 2024, total stockholders’ equity was $599.6 million, or 10.0% of total assets, equivalent to a book value of $51.14 per common share. At June 30, 2025, the Company’s tangible common equity to tangible assets ratio was 10.5%, compared to 9.9% at December 31, 2024 (See Non-GAAP Financial Measures below). Included in stockholders’ equity at June 30, 2025 and December 31, 2024, were unrealized losses (net of taxes) on the Company’s available-for-sale investment securities totaling $36.7 million and $46.1 million, respectively. This change in net unrealized losses primarily resulted from decreased intermediate-term market interest rates in the six months ended June 30, 2025, which generally increased the Company’s fair value of the investment securities. In addition, included in stockholders’ equity at June 30, 2025, were realized gains (net of taxes) on the Company’s terminated cash flow hedge (interest rate swap), totaling $1.7 million. This amount, plus associated deferred taxes, is expected to be accreted to interest income over the remaining term of the original interest rate swap contract, which was to end in October 2025. At June 30, 2025, the remaining pre-tax amount to be recorded in interest income was $2.2 million. The net effect on total stockholders’ equity over time will be no impact, as the reduction of this realized gain will be offset by an increase in retained earnings (as the interest income flows through pre-tax income). Also included in stockholders’ equity at June 30, 2025, was an unrealized loss (net of taxes) on the Company’s two outstanding cash flow hedges (interest rate swaps) totaling $6.0 million. Increases in market interest rates since the inception of these hedges have caused their fair values to decrease. The unrealized loss position on these swaps improved substantially in the six months ended June 30, 2025, due to a decline in market interest rates in that period. As noted above, total stockholders’ equity increased $22.8 million, from $599.6 million at December 31, 2024 to $622.4 million at June 30, 2025. Total stockholders’ equity increased due to net income of $36.9 million in the six months ended June 30, 2025, a $2.0 million increase in stockholders’ equity during that period due to stock option exercises and a decrease in accumulated other comprehensive loss of $13.0 million during that period primarily due to increases in the fair value of cash flow hedges and available-for-sale investment securities mainly because of a decrease in market interest rates. Partially offsetting these changes were repurchases of the Company’s common stock during the six months ended June 30, 2025 totaling $20.0 million and dividends declared on common stock during that period of $9.2 million. 63 ​ The Company had unrealized losses on its portfolio of HTM investment securities, which totaled $19.3 million and $24.7 million at June 30, 2025 and December 31, 2024 respectively, that were not included in its total capital balance. If HTM unrealized losses were included in capital (net of taxes), at June 30, 2025, they would have decreased total stockholder’s equity at that date by $14.6 million. This amount was equal to 2.3% of total stockholders’ equity of $622.4 million at June 30, 2025, compared to 3.1% of total stockholders’ equity of $599.6 million at December 31, 2024. Banks are required to maintain minimum risk-based capital ratios. These ratios compare capital, as defined by the risk-based regulations, to assets adjusted for their relative risk as defined by the regulations. Under current guidelines, banks must have a minimum common equity Tier 1 capital ratio of 4.50%, a minimum Tier 1 risk-based capital ratio of 6.00%, a minimum total risk-based capital ratio of 8.00%, and a minimum Tier 1 leverage ratio of 4.00%. To be considered “well capitalized,” banks must have a minimum common equity Tier 1 capital ratio of 6.50%, a minimum Tier 1 risk-based capital ratio of 8.00%, a minimum total risk-based capital ratio of 10.00%, and a minimum Tier 1 leverage ratio of 5.00%. On June 30, 2025, the Bank’s common equity Tier 1 capital ratio was 13.1%, its Tier 1 capital ratio was 13.1%, its total capital ratio was 14.4% and its Tier 1 leverage ratio was 11.2%. As a result, as of June 30, 2025, the Bank was well capitalized, with capital ratios in excess of those required to qualify as such. On December 31, 2024, the Bank’s common equity Tier 1 capital ratio was 12.6%, its Tier 1 capital ratio was 12.6%, its total capital ratio was 13.9% and its Tier 1 leverage ratio was 11.0%. As a result, as of December 31, 2024, the Bank was well capitalized, with capital ratios in excess of those required to qualify as such. The FRB has established capital regulations for bank holding companies that generally parallel the capital regulations for banks. On June 30, 2025, the Company’s common equity Tier 1 capital ratio was 13.0%, its Tier 1 capital ratio was 13.5%, its total capital ratio was 14.7% and its Tier 1 leverage ratio was 11.5%. On December 31, 2024, the Company’s common equity Tier 1 capital ratio was 12.3%, its Tier 1 capital ratio was 12.8%, its total capital ratio was 15.4% and its Tier 1 leverage ratio was 11.2%. In addition to the minimum common equity Tier 1 capital ratio, Tier 1 risk-based capital ratio and total risk-based capital ratio, the Company and the Bank have to maintain a capital conservation buffer consisting of additional common equity Tier 1 capital greater than 2.5% of risk-weighted assets above the required minimum levels in order to avoid limitations on paying dividends, repurchasing shares, and paying discretionary bonuses. At June 30, 2025 and December 31, 2024, both the Company and the Bank had a capital conservation buffer that exceeded the required minimum levels. On June 15, 2025, the Company redeemed all of its outstanding 5.50% fixed-to-floating rate subordinated notes due June 15, 2030, with an aggregate principal balance of $75 million. The total redemption price was 100% of the aggregate principal balance of the subordinated notes plus accrued and unpaid interest. The Company utilized FHLB overnight borrowings to replace the funds used by the Company for the redemption payment. The annual combined interest expense and amortization of deferred issuance costs on the subordinated notes had been approximately $4.4 million. Dividends . During the three months ended June 30, 2025, the Company declared a common stock cash dividend of $0.40 per share, or 23% of net income per diluted common share for that three-month period, and paid a common stock cash dividend of $0.40 per share (which was declared in March 2025). During the three months ended June 30, 2024, the Company declared a common stock cash dividend of $0.40 per share, or 28% of net income per diluted common share for that three-month period, and paid a common stock cash dividend of $0.40 per share (which was declared in March 2024). During the six months ended June 30, 2025, the Company declared common stock cash dividends totaling $0.80 per share, or 25% of net income per diluted common share for that six-month period, and paid common stock cash dividends totaling $0.80 per share. During the six months ended June 30, 2024, the Company declared common stock cash dividends totaling $0.80 per share, or 31% of net income per diluted common share for that six-month period, and paid common stock cash dividends totaling $0.80 per share. The Board of Directors meets regularly to consider the level and timing of dividend payments. The $0.40 per share dividend declared but unpaid as of June 30, 2025, was paid to stockholders in July 2025. Common Stock Repurchases and Issuances . The Company has been in various buy-back programs since May 1990. During the three months ended June 30, 2025, the Company repurchased 175,998 shares of its common stock at an average price of $55.11 per share and issued 7,320 shares of common stock at an average price of $45.67 per share to cover stock option exercises. During the three months ended June 30, 2024, the Company repurchased 124,600 shares of its common stock at an average price of $51.88 per share and issued 7,850 shares of common stock at an average price of $38.77 per share to cover stock option exercises. During the six months ended June 30, 2025, the Company repurchased 349,342 shares of its common stock at an average price of $56.73 per share and issued 22,327 shares of common stock at an average price of $47.38 per share to cover stock option exercises. During the six months ended June 30, 2024, the Company repurchased 236,962 shares of its common stock at an average price of $51.67 per share and issued 15,138 shares of common stock at an average price of $37.15 per share to cover stock option exercises. 64 ​ In November 2022, the Company’s Board of Directors authorized the purchase of up to one million shares of the Company’s outstanding common stock, under a program of open market purchases or privately negotiated transactions. At June 30, 2025, approximately 94,000 shares remained available under this stock repurchase authorization. In April 2025, the Company’s Board of Directors approved a new stock repurchase program, which will succeed the existing repurchase program (authorized in November 2022) following the repurchase of the existing program’s remaining available shares. The new stock repurchase program authorizes the purchase, from time to time in open market or privately negotiated transactions, of up to one million additional shares of the Company’s common stock. Management has historically utilized stock buy-back programs from time to time as long as management believed that repurchasing the Company’s common stock would contribute to the overall growth of stockholder value. The number of shares that will be repurchased at any particular time and the prices that will be paid are subject to many factors, several of which are outside of the control of the Company. The primary factors typically include the number of shares available in the market from sellers at any given time, the market price of the stock and the projected impact on the Company’s earnings per share and capital. Non-GAAP Financial Measures This document contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (“GAAP”). This non-GAAP financial information includes the tangible common equity to tangible assets ratio. In calculating the ratio of tangible common equity to tangible assets, we subtract period-end intangible assets from common equity and from total assets. Management believes that the presentation of this measure excluding the impact of intangible assets provides useful supplemental information that is helpful in understanding our financial condition and results of operations, as it provides a method to assess management’s success in utilizing our tangible capital as well as our capital strength. Management also believes that providing a measure that excludes balances of intangible assets, which are subjective components of valuation, facilitates the comparison of our performance with the performance of our peers. In addition, management believes that this is a standard financial measure used in the banking industry to evaluate performance. This non-GAAP financial measurement is supplemental and is not a substitute for any analysis based on GAAP financial measures. Because not all companies use the same calculation of non-GAAP measures, this presentation may not be comparable to other similarly titled measures as calculated by other companies. Non-GAAP Reconciliation: Ratio of Tangible Common Equity to Tangible Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, December 31, ​ ​ 2025 ​ 2024 ​ ​ ​ (Dollars in Thousands) Common equity at period end ​ $ 622,368 ​ $ 599,568 ​ Less: Intangible assets at period end ​ 9,877 ​ 10,094 ​ Tangible common equity at period end (a) ​ $ 612,491 ​ $ 589,474 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets at period end ​ $ 5,854,672 ​ $ 5,981,628 ​ Less: Intangible assets at period end ​ 9,877 ​ 10,094 ​ Tangible assets at period end (b) ​ $ 5,844,795 ​ $ 5,971,534 ​ ​ ​ ​ ​ ​ ​ ​ ​ Tangible common equity to tangible assets (a) / (b) ​ 10.48 % 9.87 % ​ ​