About Great Southern Bancorp

Great Southern Bancorp, Inc. operates as the bank holding company for Great Southern Bank that offers a variety of banking and banking-related services. As a Maryland corporation, the company is authorized to engage in any activity that is permitted by the Maryland General Corporation Law and not prohibited by law or regulatory policy. The company conducts its business as a financial holding company. The company offers a broad range of banking services through its banking centers located in southern and central Missouri; the Kansas City, Missouri area; the St. Louis area; eastern Kansas; northwestern Arkansas; the Minneapolis area and eastern, western and central Iowa. The company offers commercial real estate, commercial business and commercial construction loans. The company engages in the business of originating commercial real estate loans, construction loans, other commercial loans, multi-family and single-family residential real estate loans and consumer loans and funding these loans by attracting deposits from the general public, obtaining brokered deposits and through borrowings from the Federal Home Loan Bank of Des Moines (the FHLBank) and others. Market Areas The company operates full-service retail banking offices, serving nearly 134,000 households in six states – Missouri, Iowa, Kansas, Minnesota, Arkansas and Nebraska. The company also operates commercial loan production offices in Atlanta; Charlotte; Chicago; Dallas; Denver; Omaha; Phoenix and Tulsa; and a mortgage lending office in Springfield, Missouri. The company regularly evaluates its banking center network and lines of business to ensure that it is serving customers in the best way possible. The banking center network constantly evolves with changes in customer needs and preferences, emerging technology and local market developments. In response to these changes, the company opens banking centers and invests resources where customer demand leads, and from time to time, consolidates banking centers when market conditions dictate. The company’s largest concentrations of deposits and loans are in the Springfield, Missouri, and St. Louis, market areas. In the last several years, the company’s deposit and loan portfolios have become more diversified because of its history of five FDIC-assisted acquisitions and organic growth. The FDIC-assisted acquisitions significantly expanded the company’s geographic footprint, which prior to 2009 was primarily in southwest and central Missouri, by adding significant operations in Iowa, Kansas and Minnesota. Besides the Springfield and St. Louis market areas, the company has deposit and loan concentrations in the following market areas: Kansas City, Missouri; Sioux City, Iowa; Des Moines, Iowa; Northwest Arkansas; Minneapolis; and Eastern Iowa in the area known as the Quad Cities. Deposits and loans are also generated in banking centers in rural markets in Missouri, Iowa, and Kansas. The company has commercial loan production offices in Atlanta, Charlotte, Chicago, Dallas, Denver, Omaha, Phoenix and Tulsa. These offices generate a significant percentage of the company’s commercial loan production. Commercial lending groups in the company’sKansas City, Des Moines, Minneapolis, Springfield, and St. Louis banking offices also generate a significant percentage of the company’s commercial loan production. Lending Activities The company primarily made long-term, fixed-rate residential real estate loans that it retained in its loan portfolio. The company originates short-term and adjustable-rate loans. The company originates commercial real estate and other residential (multi-family) loans, primarily with adjustable rates or shorter-term fixed rates. In addition to originating loans, the company has expanded and enlarged its relationships with other banks of varying asset sizes to purchase participations (at par, generally with no servicing costs) in loans these other banks originate but are unable to retain the entire balance in their portfolios due to capital or borrower relationship size limitations. The company uses the same underwriting guidelines in evaluating these participations as it does in its direct loan originations. One of the principal historical lending activities of the company is the origination of fixed and adjustable-rate conventional residential real estate loans to enable borrowers to purchase or refinance owner-occupied homes. The company originates a variety of conventional residential real estate mortgage loans, principally in compliance with Freddie Mac and Fannie Mae standards for resale in the secondary market. The company promptly sells most of the fixed-rate residential mortgage loans that it originates. Another principal lending activity of The company is the origination of commercial real estate, other residential (multi-family) and multi-family and commercial construction loans. Residential Real Estate Lending The company’s one- to four-family residential real estate loan portfolio. As residential loan rates began to increase significantly along with the increase in market interest rates, much of the company’s one- to four-family loans originated in 2022 were adjustable rate loans which are fixed for a period of a few years, then adjust annually. For many years, other residential (multi-family) loan balances had increased as it emphasized this type of loan. The company is originating one- to four-family adjustable-rate residential mortgage loans primarily with one-year adjustment periods or with rates that are fixed for the first few years of the loan and then adjust annually. The company also is originating other residential (multi-family) mortgage loans with interest rates that are generally either adjustable with changes to the prime rate of interest or fixed for short periods of time (three to seven years). In underwriting one- to four-family residential real estate loans, the company evaluates the borrower’s ability to make monthly payments and the value of the property securing the loan. It is the policy of the company that generally all one- to four-family residential loans in excess of 80% of the appraised value of the property be insured by a private mortgage insurance company approved by it for the amount of the loan in excess of 80% of the appraised value. In addition, the company requires borrowers to obtain title and fire and casualty insurance in an amount not less than the amount of the loan. Real estate loans originated by the company generally contain a due on sale clause allowing it to declare the unpaid principal balance due and payable upon the sale of the property securing the loan. The company may enforce these due on sale clauses to the extent permitted by law. Commercial Real Estate and Construction Lending Commercial real estate lending has been a significant part of the company’s business activities. The company engages in commercial real estate lending in order to increase the potential yield on, and the proportion of interest rate sensitive loans in, its portfolio. At December 31, 2008, commercial real estate loans and commercial construction loans each made up about one fourth of the total loan portfolio. The company’s construction loans generally have a term of eighteen months or less. The construction loan agreements for one- to four-family projects generally require principal reductions as individual condominium units or single-family houses are built and sold to a third party. Normally, the company’s commercial real estate and other residential construction loans are made either as the initial stage of a combination loan (i.e., with a commitment from the company to provide permanent financing upon completion of the project) or with a commitment from a third party to provide permanent financing. The company’s commercial real estate and construction loan portfolios consist of loans with diverse collateral types. Commercial real estate lending and construction lending generally affords the company an opportunity to receive interest at rates higher than those obtainable from residential mortgage lending and to receive higher origination and other loan fees. In addition, commercial real estate loans and construction loans are generally made with adjustable rates of interest or, if made on a fixed-rate basis, for relatively short terms. Commercial real estate lending does, however, entail significant additional risks as compared with residential mortgage lending. Commercial real estate loans typically involve large loan balances to single borrowers or groups of related borrowers. In addition, the payment experience on loans secured by commercial properties is typically dependent on the successful operation of the related real estate project and thus may be subject, to a greater extent, to adverse conditions in the real estate market or in the economy generally. The company executes interest rate swaps with certain commercial banking customers to facilitate their respective risk management strategies. The company began offering. Those interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the company executes with a third party, such that it minimizes its net risk exposure resulting from such transactions. As Other Commercial Lending The company’s other commercial lending activities encompass loans with a variety of purposes and security, including loans to finance accounts receivable, inventory and equipment. The company expects to continue to originate loans in this category subject to market conditions and applicable regulatory restrictions. Commercial loans are generally secured by business assets, such as accounts receivable, equipment and inventory. The company’s commercial lending policy emphasizes complete credit file documentation and analysis of the borrower’s character, capacity to repay the loan, the adequacy of the borrower’s capital and collateral, as well as an evaluation of the industry conditions affecting the borrower. Review of the borrower’s past, present and future cash flows is also an important aspect of the company’s credit analysis. In addition, the company generally obtains personal guarantees from the borrowers on these types of loans. Historically, the majority of the company’s commercial loans have been to borrowers in southwestern and central Missouri and the St. Louis, Missouri area. The company has continued its commercial lending in all of these geographic areas, as well as through its loan production offices in Atlanta, Charlotte, Chicago, Dallas, Denver, Omaha, Phoenix and Tulsa. Consumer Lending The company offers a variety of secured consumer loans, including automobile loans, boat loans, home equity loans and loans secured by savings deposits. In addition, the company offers home improvement loans and unsecured consumer loans. The underwriting standards employed by the company for consumer loans include a determination of the applicant’s payment history on other debts and an assessment of ability to meet existing obligations and payments on the proposed loan. Originations, Purchases, Sales and Servicing of Loans The company originates loans through internal loan production personnel located in its main and branch offices, as well as loan production offices. Walk-in customers and referrals from existing customers of the company is also important sources of loan originations. The company may also purchase whole loans and participation interests in loans (generally without recourse, except in cases of breach of representation, warranty or covenant) from other banks, thrift institutions and life insurance companies (originators). The purchase transaction is governed by a participation agreement entered into by the originator and participant (the company) containing guidelines as to ownership, control and servicing rights, among others. The originator may retain all rights with respect to enforcement, collection and administration of the loan. From time to time, the company also sells non-residential loan participations generally without recourse to private investors, such as other banks, thrift institutions and life insurance companies (participants). The sales transaction is governed by a participation agreement entered into by the originator (the company) and participant containing guidelines as to ownership, control and servicing rights, among others. The company generally retains servicing rights for these participations sold. The company also sells whole residential real estate loans without recourse to Freddie Mac and Fannie Mae as well as to private investors, such as other banks, thrift institutions, mortgage companies and life insurance companies. Whole real estate loans are sold with a provision for repurchase upon breach of representation, warranty or covenant. These representations, warranties and covenants include those regarding the compliance of loan originations with all applicable legal requirements, mortgage title insurance policies when applicable, enforceable liens on collateral, collateral type, borrower creditworthiness, private mortgage insurance when required and compliance with all applicable federal regulations. In addition to interest earned on loans and loan origination fees, the company receives fees for loan commitments, letters of credit, prepayments, modifications, late payments, transfers of loans due to changes of property ownership and other miscellaneous services. Deposits The company attracts both short-term and long-term deposits from the general public by offering a wide variety of accounts and rates and also purchases brokered deposits from time to time. The company offers regular savings accounts, checking accounts, various money market accounts, fixed-interest rate certificates with varying maturities, certificates of deposit in minimum amounts of $250,000 (Jumbo accounts), brokered certificates and individual retirement accounts. Strategy The company focuses on loan originations through residential, commercial and consumer lending activities in its market areas. The company continues to emphasize real estate lending while also expanding and increasing its originations of commercial business loans. Subsidiaries Great Southern Real Estate Development Corporation: Generally, the purpose of Real Estate Development is to hold real estate assets, which has been obtained through foreclosure by the Bank and which require ongoing operation of a business or completion of construction. Great Southern Community Development Company, L.L.C. and Great Southern CDE, L.L.C: Generally, the purpose of CDC is to invest in community development projects that have a public benefit and are permissible under Missouri and Kansas law. These include activities, such as investing in real estate and investing in other community development entities. CDC also serves as parent to subsidiary CDE, which invests in limited liability entities for the purpose of acquiring federal tax credits to be utilized by the company. GS, L.L.C: GSLLC is a limited liability company that invests in multiple limited liability entities for the purpose of acquiring state and federal tax credits which are utilized by the company. GSSC, L.L.C: GSSCLLC is a limited liability company that invests in multiple limited liability entities for the purpose of acquiring state tax credits which are utilized by the company or sold to third parties. GSRE Holding, L.L.C: Generally, the purpose of GSRE Holding is to hold real estate assets which have been obtained through foreclosure by the bank and which require ongoing operation of a business or completion of construction. GSRE Holding II, L.L.C: Generally, the purpose of GSRE Holding II is to hold real estate assets which have been obtained through foreclosure by the bank and which require ongoing operation of a business or completion of construction. GSRE Holding III, L.L.C: Generally, the purpose of GSRE Holding III is to hold real estate assets which have been obtained through foreclosure by the bank and which require ongoing operation of a business or completion of construction. GSTC Investments, L.L.C: GSTCLLC is a limited liability company that invests in multiple limited liability entities for the purpose of acquiring state and federal tax credits which are utilized by the company. GSB One, L.L.C: As of December 31, 2022, the bank’s total investment in GSB One, L.L.C. (GSB One) and GSB Two, L.L.C. (GSB Two) was $2.24 billion. The capital contribution was made by transferring participations in loans to GSB Two. GSB One is a Missouri limited liability company. The only activity of this company is the ownership of GSB Two. GSB Two, L.L.C: This is a Missouri limited liability company. GSB Two is a real estate investment trust (REIT). It holds interests in real estate mortgages transferred from the bank. The bank continues to service the loans in return for a management and servicing fee from GSB Two. VFP Conclusion Holding, L.L.C: VFP Conclusion Holding, L.L.C. (VFP) is a Missouri limited liability company. Generally, the purpose of VFP is to hold real estate assets which have been obtained through foreclosure by the bank. The real estate assets obtained through foreclosure were formerly collateral for a participation loan sold by the bank. The bank has a 50 percent interest in VFP. Two other entities also have interests in VFP as a result of their participation in the loan sold by the bank. VFP Conclusion Holding II, L.L.C: VFP Conclusion Holding II, L.L.C. (VFP II) is a Missouri limited liability company. Generally, the purpose of VFP II is to hold real estate assets which have been obtained through foreclosure by the bank. The real estate assets obtained through foreclosure were formerly collateral for a participation loan sold by the bank. The bank has a 50 percent interest in VFP II. Government Supervision and Regulation The company is a bank holding company that has elected to be treated as a financial holding company by the Board of Governors of the Federal Reserve System, often referred to as the Federal Reserve Board (the FRB). The company is required to file reports with the FRB and such additional information as the FRB may require; and is subject to regular examinations by the FRB. The FRB also has extensive enforcement authority over financial holding companies, including among other things, the ability to assess civil money penalties, to issue cease and desist or removal orders and to require that a holding company divest subsidiaries (including its bank subsidiaries). Transactions involving the bank and its affiliates are subject to sections 23A and 23B of the Federal Reserve Act, and regulations thereunder, which impose certain quantitative limits and collateral requirements on such transactions, and require all such transactions to be on terms at least as favorable to the bank as are available in transactions with non-affiliates. The company is a member of the Deposit Insurance Fund (the DIF), which is administered by the FDIC. Deposits are insured up to the applicable limits by the FDIC, backed by the full faith and credit of the United States Government. The general deposit insurance limit is $250,000 per deposit relationship. The bank is a member of the FHLBank of Des Moines, which is one of 11 regional FHLBanks. As a member, the company is required to purchase and maintain stock in the FHLBank of Des Moines in an amount equal to the greater of 1% of its outstanding home loans or 5% of its outstanding FHLBank advances. The company’s deposits are insured by the DIF to the maximum levels permitted by the Federal Deposit Insurance Corporation (FDIC). History Great Southern Bancorp, Inc. was founded in 1923. The company was incorporated under the laws of the state of Delaware in 1989. In 2004, the company was reincorporated under the laws of the state of Maryland.