Great Southern Bancorp, Inc. Aktie

Good day, and thank you for standing by. Welcome to the Great Southern Bancorp Second Quarter 2026 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker for today, Christina Maldonado. Please go ahead.

Good afternoon, and thank you for joining Great Southern Bancorp's Second Quarter 2026 Earnings Call. Today, we'll be discussing the company's results for the quarter ended June 30, 2026. Before we begin, I'd like to remind everyone that during this call, forward-looking statements may be made regarding the company's future events and financial performance. These statements are subject to various factors that could cause actual results to differ materially from those anticipated or projected.

For a list of these factors, please refer to the forward-looking statements disclosure in the earnings release and other public filings. Joining me today are President and CEO, Joe Turner; and Chief Financial Officer, Rex Copeland.

I'll now turn the call over to Joe.

Okay. Thanks, Christina, and good afternoon to everyone on the call. We appreciate you joining us today. Our second quarter 2026 results reflect the strength and resilience of our core banking franchise despite what remains a highly competitive operating environment. Our operating metrics remain sound, supported by disciplined expense management, careful balance sheet positioning, and our ongoing emphasis on relationship-based banking.

In the second quarter of '26, we reported preliminary net income of $15.8 million or $1.43 per diluted common share compared to $19.8 million or $1.72 per diluted common share in the previous year quarter. These results were negatively impacted by several one-time expenses related to the planned consolidation of 9 banking centers and staffing reductions in other operational areas, which Rex and I will discuss further.

For the first half of '26, preliminary net income totaled $33.3 million or $2.99 per diluted common share compared to $36.9 million or $3.18 per share in the first half of '25. Net interest income in the second quarter totaled $49.5 million, down from $51 million in the year ago quarter. This change from the prior-year period was driven primarily by the absence in '26 of $2 million of interest income from a previously terminated swap.

Despite this headwind, disciplined funding cost management allowed for the expansion of our margin to 3.76% from the year-ago quarter when it was 3.68%. In terms of lending, net loan balances decreased to $148.9 million in the second quarter of '26. This decline is largely reflective of elevated loan payoff activity. The decline was most pronounced in the commercial real estate and construction categories. Compared to December 31, '25, net loan balances decreased $49.1 million to $4.31 billion.

As emphasized in previous communications, period-to-period loan trends are heavily influenced by borrower repayments and remain difficult to forecast. Our focus remains on disciplined originations anchored by conservative underwriting standards. Our broader lending pipeline remains robust with total commitments standing at $1.07 billion at June 30, including $531.5 million in unfunded -- in the unfunded portion of closed construction loans.

On the funding side, total deposits decreased $180.7 million in the first 6 months of '26. The majority of this decline, about $88 million was within broker deposits, reflecting a strategic choice to utilize FHLB borrowings given the pricing pressures within the brokered market. Interest-bearing checking balances decreased about $92 million in the first 6 months of the year, with most of this being in the higher end of the rate of those type of accounts.

Increases in noninterest-bearing checking balances roughly offset decreases in our retail time deposit portfolio. From a credit quality standpoint, our metrics remain excellent. Total nonperforming assets at the end of the second quarter were 0.17% of total assets compared to 0.15% at the end of the year. We did have a charge-off of $909,000 on a multifamily loan transferred to foreclosed assets in the second quarter, which Rex will discuss further.

We view this as sort of an idiosyncratic situation. The borrower had certain circumstances that related just to them, and we don't view it as a migration of any portion of our portfolio. Expense management remains a top priority for our bank. This focus is evident in our decision to consolidate 9 banking centers and eliminate a total of 66 positions across various divisions. Ultimately, we believe this will allow for better alignment with our customers' banking preferences, along with our pursuit of operational efficiencies as technology and services evolve.

Noninterest expense for the quarter was $38.2 million. However, when excluding the one-time costs associated with the branch consolidation and workforce reduction, noninterest expense was $36.1 million. These one-time costs consist of $1.4 million in asset valuations allowance on 4 owned locations and $561,000 in severance costs and $163,000 in remaining lease expense for a loan production office, which will close at the end of July.

As we move through the balance of '26, we remain focused on protecting asset quality, executing thoughtful operational improvements and consistently building long-term value for our stockholders. The lending and funding environments remain competitive, but we are navigating this landscape from a position of strength.

With that, I'll turn the call over to Rex for a more detailed discussion of the financials.

All right. Thank you, Joe, and good afternoon, everyone. I'll now provide a little more detail on our second quarter 2026 financial performance and how it compares to both the prior year quarter and the previous linked quarter. As we mentioned, for the quarter ended June 30, 2026, we reported preliminary net income of $15.8 million or $1.43 per diluted common share compared to $19.8 million or $1.72 per diluted common share in the second quarter of 2025 and $17.5 million or $1.58 per diluted common share in the first quarter of 2026.

Net interest income for the quarter totaled $49.5 million compared to $51 million in the second quarter of 2025 and $48.3 million in the first quarter of 2026. The $1.5 million or 2.9% decline from the second quarter of 2025 was driven primarily by the $2 million reduction in quarterly interest income associated with the previously terminated interest rate swap, which we mentioned and which that amortization ended in October of 2025.

Compared to the prior-year quarter, interest income was also affected by lower loan balances and lower market interest rates, which primarily impacted variable rate loans and newer fixed rate originations. Those items were partially offset by lower interest expense on deposit accounts and borrowings due to disciplined funding cost management and the ongoing downward repricing of rates on liabilities.

In addition, there was no interest expense on subordinated notes in the quarter ended June 30, 2026, as those notes were redeemed in June of 2025. Compared to the first quarter of 2026, net interest income increased $1.2 million. A portion of the increase was due to 1 additional calendar day in the second quarter, along with modest increases in interest income on loans and investments and interest expense, which was nearly unchanged compared to the 2026 first quarter.

Also during the 2026 second quarter, we did record approximately $393,000 of interest income related to the collection of previously unbooked interest on a single relationship. Though this relationship has recently provided interest payments semiannually, the timing and amount of this income may vary going forward.

Our annualized net interest margin for the second quarter of 2026 expanded to 3.76% compared to 3.68% in the second quarter of 2025 and 3.71% in the first quarter of 2026. Noninterest income for the quarter was $7.4 million compared to $8.2 million in the second quarter of 2025 and $7.0 million in the first quarter of 2026.

The year-over-year decrease of $837,000 was driven by an $897,000 decline in other income, primarily due to $1.1 million in one-time income relating to our tax credit partnership investments that we recorded in the 2025 period. Partially offsetting the decline in other income was a $230,000 increase in commissions income compared to the prior year quarter.

Favorable yields on annuity offerings have increased demand from our customer base for this product. Total noninterest expense for the quarter was $38.2 million compared to $35.0 million in the second quarter of 2025 and $34.8 million in the first quarter of 2026. And just as a reminder, in the first quarter of 2026, we did have about $700,000 of items that reduced expense in that first quarter.

As Joe mentioned, our noninterest expense in the quarter is impacted significantly by one-time expenses related to the consolidation of the 9 branches and severance costs related to workforce reductions in those branches and in other operational areas. Excluding these one-time costs, noninterest expense was $36.1 million or $1.1 million higher than the year ago quarter.

This increase was partially due to a $333,000 increase in computer license and support costs given the company's continued investment in core system enhancements and data security projects, along with smaller increases in various other expense categories such as postage and advertising.

The one-time branch consolidation and severance costs totaled $2.1 million. Specifically, they include a $1.4 million valuation allowance, $561,000 in severance costs representing the 66 planned position eliminations, and $163,000 in lease expense obligations for the closing loan production office. Accounting rules require that certain costs and expected losses be recorded immediately, while any expected gains are not recorded until realized.

The $1.4 million valuation allowance is based upon our evaluation of the estimated market value of each affected location relative to their carrying values. We believe 4 of the 9 owned locations may result in a loss upon sale, though we do not expect to realize losses on the sale of the other 5 properties. Further, we expect the eventual aggregate selling price of all affected properties will exceed the combined carrying value of the affected locations.

The banking center consolidations and the workforce reductions are expected to result in approximately $4.4 million to $4.8 million in noninterest expense savings beginning in the fourth quarter of 2026. This savings is expected to be partially offset by a projected amount of customer deposit attrition in the affected locations over time, which will likely be replaced by higher cost alternative funding.

These actions combined are expected to result in approximately $2.3 million to $2.7 million in annual pretax income improvement, again, beginning in Q4 of this year. For income taxes, the company's effective tax rate for the 3 months ended June 30, 2026, was approximately 15.3% compared to 18.5% in the same period for 2025.

For the 6 months ended June 30, 2026, the effective tax rate was 17.1% compared to 19.2% in the prior year period. The lower effective tax rate in the second quarter of 2026 was driven by our usual tax credits and tax-exempt income sources, and also by higher allowable tax deductions resulting from increased levels of employee stock option exercises. Going forward, we continue to expect our combined federal and state effective tax rate range from approximately 18% to 19.5% in future periods.

Turning to the balance sheet. Total assets ended the quarter at approximately $5.52 billion compared to $5.60 billion at the end of December 2025. Gross loans receivable stood at $4.38 billion. Over the first 6 months of the year, net loans decreased by $49.1 million or 1.1%, driven by repayments in commercial real estate, which was down $73.3 million and multifamily, which was down $39.9 million, partially offset by a $53.2 million expansion in construction balances.

Compared to the linked quarter, net loans contracted by $148.9 million from March 31 due to elevated prepayments. As Joe highlighted, these repayments are difficult to predict and may continue to drive volatility in our loan balances in future quarters. On the funding side, total deposits ended the quarter at approximately $4.30 billion, down $143.1 million from March 31, 2026.

Given the loan balance decline, we electively allowed higher cost brokered balances to mature without replacement. Our deposit mix consisted of $2.20 billion in interest-bearing checking, $877.4 million in noninterest-bearing checking, $651.5 million in time deposits, and $575.6 million in brokered deposits at June 30. Uninsured deposits are estimated at $665 million or 15.5% of total deposits.

At June 30, 2026, secured borrowing line availability at the Federal Home Loan Bank and Federal Reserve Bank was $1.23 billion and $319.6 million, respectively, alongside cash and cash equivalents of $180 million. From an asset quality perspective, overall performance remained strong. Nonperforming assets and potential problem loans combined totaled $10.6 million.

Nonperforming assets decreased sequentially by $700,000 to $9.4 million or 0.17% of total assets compared to $10.1 million or 0.18% in the first quarter of 2026, but up from $8.1 million or 0.15% of total assets at December 31, 2025. Potential problem loans were $1.16 million at the end of the 2026 second quarter.

During the quarter, we moved a single $1.8 million multifamily property from nonperforming loans through transfer to foreclosed assets with a charge-off on this loan of $909,000, bringing our net charge-offs in the second quarter to $819,000.

During both the 3 and 6 months ended June 30, 2026, we did not record a provision expense on our outstanding loan portfolio, but recognized a provision for unfunded commitments of $8,000 in the second quarter of 2026. The bank's allowance for credit losses was stable at 1.46% of total loans. Overall, our core credit metrics continue to reflect our long-standing focus on disciplined risk management and a portfolio that is performing well.

Our capital position remained a key strength. Total stockholders' equity at June 30, 2026, was $641.6 million, representing 11.6% of total assets and a book value of $58.95 per common share, up from $636.1 million, or $57.50 per common share at December 31, 2025. Capital increased in the 6-month period by $33.3 million of net income and $11.9 million from stock issued for option exercises, which was mostly offset -- those were mostly offset by $9.4 million in dividends declared on common stock, $24.8 million in common stock buybacks and a $5.5 million increase in unrealized AOCI losses, which would be a decrease to our capital.

In the second quarter, we increased capital by $7.3 million by 125,000 option exercises at an average price of $54.17, while decreasing capital $7.8 million by repurchasing 114,000 shares of common stock at an average price of $68.39, leaving approximately 304,000 shares remaining available under our current repurchase authorization.

Overall, our second quarter results reflect solid execution throughout our business. Our net interest margin expanded, our core deposit mix remained stable and our asset quality trends remain solid. Our capital benchmarks sit at strong levels. We are well positioned for continued operational success and meaningful growth in tangible book value per share. That concludes my remarks, and we are now ready to take your questions.

[Operator Instructions] Our first question comes from the line of Damon DelMonte with KBW.

First question, just wanted to talk a little bit about the margin, kind of how you think about the back half of the year? I know you called out some CDs that are repricing in the next 3 months. And kind of just wondering, do you expect that kind of benefit on the lower repricing to kind of help keep margin stable at a current level? Or I guess, how are you feeling about it directionally from this point?

Yes. So when you look at the first quarter and the second quarter this year, we did expand the margin a little bit. I think we do have some more CD. Obviously, we've got some CD maturities coming up here in the third quarter, a fairly sizable amount. Those are at rates, though, that are probably not where we're going to see a lot of benefit. They've repriced multiple times, I'd say, since the last rate cut.

So maybe some benefit there, but it's not going to be substantial, I wouldn't think. I think we're going to continue to see repayment in different loan categories, potentially maybe in some of our fixed rate 1 to 4 family that may be at a little bit lower rates, and we can redeploy that into higher. But that's not a large volume typically of monthly payments coming back in.

So I think I would kind of characterize what we've done in the first half of the year. I mean, generally, I think, is going to continue to kind of flow through. I don't really see anything too different at the moment on that.

Got it. Okay. That's helpful. And then on the kind of the outlook for loans, if you look at the average balances versus the end of period, it appears that a lot of these payoffs came in late in the quarter. So just kind of -- Joe, I heard the comment on the size of the pipeline and the unfunded commitments that have yet to fund on the construction side. But I guess as you look out into the back half of the year, do you foresee the pace of the payoffs slowing and you think you can kind of get to a positive growth rate like we saw in the first quarter?

It's just hard to -- I mean that -- and that's why we don't give guidance, Damon. It's just hard to project. You're talking about -- I mean, we -- like we said, we have a high-quality loan portfolio and customers do have other options. We'll compete to keep a lot of it and have been competing to keep a lot of it and competing for new business as well. But it's just -- it's really, really difficult to predict, and that's why we just don't do that.

Got it. Okay. And if I could just squeeze one more in. The announcement to consolidate the 9 locations and have some headcount reduction. I guess what was the thought there? Was there like an evaluation done on these branches and they were kind of underperforming? Or is this just a way to kind of manage the overall earnings outlook for the company with growth being slower, you found some areas where you can maybe make some cost saves. So I guess kind of curious on the thought process behind that. And could we expect additional closures going forward at some point?

Maybe kind of answer both those at the same time. Damon. I mean, I think you guys have asked before, are there any programs for operational improvements or those sorts of things. And we've told you that's kind of an ongoing thing with us. And we're constantly evaluating our system of banking centers. That's highly important delivery channel for us, but also very, very expensive.

So we're constantly kind of analyzing costs, analyzing customer traffic patterns and looking at those. So we've done that historically. I think probably in the last 15 years, we've probably closed 50 or more banking centers. I mean maybe 30% or 40% of our portfolio. So as customer patterns change, we'll continue to do that. So that will be ongoing. And as will -- as technology affects other parts of our business, too, we'll continue to evaluate and try to make our operation as efficient as we possibly can.

Our next question comes from the line of John Rodis with Brean Capital.

Rex, just following back up on your -- on the margin discussion with Damon. I guess, were you sort of implying that do you think you can grow the margin from here? Or do you think it's sort of stable with the second quarter level? And if I look at the second quarter, if I back out that interest recovery, it looks like the margins maybe closer to 3.73%. So were you sort of implying that you think you could maybe hold the margins stable? Or do you think you could still grow it a little bit?

Probably lean more towards stable and where I'm kind of looking at right now. We're going to try to do what we can to reduce some of our funding costs. But the competition on both loans and funding is pretty significant right now. And so we're continuing to see it both in local markets and in more of the national brokered markets where you can get funding, but there's just a lot of competition on pricing to get it.

Yes. As far as if you hold the margin steady, but with loans continuing to decline or obviously continued volatility there, even if you hold the margin steady, net interest income dollars probably trend down from the second quarter level. Is that correct?

I mean if we do have net reduction in loan balances, that would probably start to be that way. We'll reduce -- we've got a lot of wholesale funding through -- either through brokered or through home loan bank advances. So if we have reductions on the loan side, we would reduce our borrowings there, which there is some spread still in that. So we would reduce some spread. We'll keep trying to do everything we can to manage the funding mix. But yes, I mean, that -- we'll have one more actual calendar day in the first quarter versus the second quarter. So we do have one more day of net interest income that we would book from a dollar standpoint. But yes, I mean, you're -- I think you're thinking correctly that if our loan balances do on net continue to trend down, then we would have some pressure on the dollar amount there in the quarter.

Yes. Okay. Joe, just back to you on loans. And obviously, it's hard to predict and a lot of volatility. But can you maybe just talk a little bit about origination activity this quarter versus payoff activity and how that compares to recent past quarters?

I think origination activity in the second quarter was maybe a little lower than, say, the last year. I think certainly, it was definitely lower than the first quarter, I believe. So -- so there was that. I mean I think our -- we're continuing to get looks at things, and we're taking our shot. I can tell you, it is highly competitive out there for the customers and the types of loans and the customers that we're competing for. So we're still out there taking our shot, John. It's just -- it's -- there's a lot of other people doing the same thing.

Kind of the mix of it, too, John, in the first quarter of this year, I think we had more loans that funded day 1. In the second quarter, I think we had more loans that were more toward construction deals that aren't going to fund for a while because the customers putting their equity in the deal first.

Yes. So if origination activity was down this quarter versus first quarter, how would you characterize the level of payoffs this quarter?

I think payoffs were substantially higher this quarter than last quarter. And I would say probably somewhat higher than the trend we've seen over the last year.

Okay. Okay. And I mean, did anything unusual happen this quarter to make them a lot higher? Or is this just sort of...

No. I mean that's the tough thing, John. We really -- I don't think we felt any different about -- from a payoff perspective or from an origination perspective. We didn't feel any different on January 1, 2026, than we did on April 1, 2026. And the results were fairly different. So that's why I'm saying I think it's a fool's errand for us to try to predict payoffs, and originations for that matter.

I get it. Rex, just shifting gears to expenses. So if you back out the $2.1 million, you're roughly $36.1 million for the quarter, and then you start to get the benefits of the consolidation in the fourth quarter. So if give or take, $36 million in the second quarter is sort of a core number, a, is that the right way to look at it? And then b, backing out the cost saves of a little bit over $1 million, you're sort of looking at a $35 million run rate in expenses starting in the fourth quarter. Am I thinking about that correct?

Somewhat. I mean that's how that part of it should flow through. I think you're right, the $36.1 million in the quarter is -- we didn't really have a lot of other noise in there. So that's probably in line with kind of a core operating number. And then we'll start to see those benefits in the fourth quarter, as you said. In the third quarter, we won't really see any benefit from it.

And we are continuing to add some costs related to some technology initiatives and some other initiatives that we have going on. So I think like -- I think we told you last quarter, we'll continue to see quarterly expenses in the noninterest categories moving a little bit higher from those initiatives as well. So I don't know that I would say we are going to save the entire $1 million a quarter as we move ahead but there will be some portion of that that, yes, we should see benefit of.

Okay. Okay. So said another way, that $35 million plus added tech expenses is sort of what you said, right?

Right. Right.

Yes. Okay. Okay. Just as far as the buyback goes, you guys weren't as active what you've got roughly 300,000 shares remaining. All things equal, the stock has had a nice move. Are you -- at this level, does it -- at the $80, high 70s, $80, does it make sense? Or are you sort of on pause regarding the buyback?

I don't know that we want to exactly say, here's what we'll pay. But I mean, I would say it still makes sense. It probably doesn't make as good a sense as it did at $70 or $65 or whatever. So I mean, it's something we're still considering for sure, John. But we have a fairly conservative window, like, our window will open, I think, Monday and we will close the last day of August.

So really about half the quarter, we're only buying stock back under a 10b5-1 plan. And so that -- we sort of set our numbers when stock prices were a lot lower, and we didn't get anything bought, really. So I think that's part of what's going on. But we'll have to sit down and think about -- I mean, I think capital, how we allocate our capital, that's something that's going to be an important topic of discussion at the Board level because we are generating a fair amount of capital, and we have high capital ratios already. So there are different ways we can deploy it, and we'll try to make the best use of it we can.

I guess, since you -- just your last comment, if -- I mean, even if you bought back the remaining 300,000 shares at the current level, your TCE remains well above 11%. But what other -- other than maybe increasing the common dividend, what other alternatives would you potentially be considering, Joe?

I mean I think there's -- I mean, we're -- you know us, we're not going to do like some acquisition crazy kind of -- we're not going to try to lever ourselves that way. So for us, the most likely, I think, are either continued share repurchases, increasing the quarterly dividend, or we have in the past done special dividends. So it would be one of those 3 or some combination thereof.

Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back over to Joe for closing remarks.

Okay. Thanks, everybody. We appreciate your attendance today, and we look forward to talking to you in the fall. Thank you.

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Hello, and welcome to the Annual Meeting of Stockholders of Great Southern Bancorp, Inc. Please note that today's meeting is being recorded. [Operator Instructions]

It is now my pleasure to turn today's meeting over to Bryan Tiede, Corporate Secretary of Great Southern. Bryan, the floor is yours.

Good morning. Thank you for joining us for the 2026 Great Southern Bancorp Annual Meeting of Stockholders. We appreciate your interest and support of our company. We are ready to get started. It is my pleasure to introduce President and CEO, Joe Turner.

Okay. Thanks, Bryan, and I want to welcome everyone to our 2026 Annual Meeting. I'm pleased to be here representing our nearly 1,100 Great Southern associates to report on our company's performance and activity in 2025 and for the first quarter of 2026. Before we get started with our presentation, I want to recognize our Board of Directors.

Each of our directors brings their own unique background and expertise, which contributes to our company's continued success. We appreciate their continued guidance, engagement and support. I'll introduce each Board member who are also joining us virtually -- each of whom are also joining us virtually. First is Bill Turner. Mr. Turner joined the company in 1974 as the President and now serves as the Chairman of the Board. He has been a driving force behind the company's success for more than 5 decades. Kevin Ausburn. Kevin is the retired former Chairman and CEO of SMC Packaging Group and was appointed a Director of both the Bank and Bancorp in 2017. Julie Brown. Julie is an attorney with Carnahan Evans P.C. and was appointed a Director of both the bank and the holding company in 2002. Tom Carlson. Tom is an attorney and real estate developer who founded the Springfield Daily Citizen in 2022. He was appointed a Director of Great Southern Bancorp and the Bank in 2001.

Amelia Counts. Amy is Regional Vice President, Client Success at Wise F&I, which is based in St. Louis, and was appointed a Director of Bancorp and the Bank in 2024. Steve Edwards. Steve is a retired former CEO of CoxHealth and was appointed a Director of Bancorp and Great Southern Bank in 2022. Deborah Hart. Debbie is an attorney and affordable housing developer. She was appointed the Director of both the holding company and the bank in 2017. Doug Pitt. Doug is the owner of Pitt Technology Group LLC and Pitt Development Group, LLC as well as the founder of Care to Learn. Doug was appointed a Director of the bank and the holding company in 2015. And Earl Steiner. Earl is a CPA and Co-owner of EAS Enterprises, Inc. He was appointed a Director of Bancorp and the Bank in 2004.

Joining me today are 4 of my colleagues, our CFO, Rex Copeland; Chief Retail Banking Officer, Laura Smith; Chief Lending Officer, John Bugh; and Corporate Secretary, Bryan Tiede. After my brief comments, I'll turn the meeting over for their presentation. As I said earlier, I'm pleased to be here representing all of our Great Southern associates who are committed to building strong and lasting relationships with the customers and communities we serve.

This slide offers an overview of Great Southern's scale and presence as of March 31, 2026. We are proud of the franchise we have developed over many years, and we recognize that our long-term success depends on continuing to earn, strengthen and expand our customer relationships. Before we discuss our financial performance, I want to begin with the foundation of how we operate as a company. Great Southern has served customers and communities for more than 100 years, and that longevity is rooted in a consistent set of values, which include integrity, respect, teamwork and an unwavering commitment to ethical standards.

Those values matter in every environment, but they are especially important in a period marked by lending and deposit competition, interest rate volatility and economic uncertainty. Our response has not been to chase short-term outcomes. Instead, we've remained focused on fundamentals that have long supported this company, careful balance sheet structuring, disciplined credit practices, prudent expense management and relationship-based banking. I also want to recognize our associates across the organization.

Great Southern's performance is made possible by their daily work, serving customers, supporting one another and carrying our culture forward. Their professionalism and commitment are central to the strength of our franchise, and I am grateful for the role they continue to play in helping us execute with consistency. During 2025 and into the first quarter of 2026, we maintained strong capital and liquidity, preserve solid credit quality and managed expenses carefully while continuing to invest in the people, technology and infrastructure that support our long-term capabilities.

We also continue to return stock -- capital to stockholders through our share repurchases, consistent with our long-term approach to maximize tangible book value growth. As we look ahead, our priorities remain consistent. We will continue to support our customers and communities, manage risk thoughtfully and make decisions with long-term stockholder value in mind. Our core values, experienced team and conservative operating approach remains central to how we manage the business and how we intend to continue building value over time.

I will now turn the meeting over to our CFO, Rex Copeland. Rex?

Thank you, and good morning. Great Southern delivered solid financial results in 2025, supported by resilient net interest income, strong asset quality, disciplined expense management and thoughtful capital allocation. The operating environment remained competitive, particularly with respect to funding costs, loan production and borrower payoffs. At the same time, our balance sheet remained well positioned with strong capital and liquidity levels and a healthy loan portfolio.

As we review the key financial trends, I will focus on the areas that most directly shaped our performance. Earnings, net interest income and margin, balance sheet trends, credit quality, expenses and capital management. This slide highlights several key balance sheet trends over the past 5 years as well as our position at March 31, 2026, for total assets, net loans receivable and total deposits.

At year-end 2025, total assets were approximately $5.60 billion compared to approximately $5.98 billion at the end of 2024. At March 31, 2026, total assets increased modestly to approximately $5.69 billion. The movement in total assets was driven primarily by changes in total outstanding loan balances, particularly as we realized elevated loan payoffs in 2025. Net loans receivable was $4.36 billion at December 31, 2025, down $333.5 million or 7.1% from the prior year-end.

Elevated payoff and refinancing activity was most pronounced within multifamily, construction, 1-to-4 family residential and commercial business portfolios. While loan production remained active, borrower repayment activity had a meaningful impact on reported balances, particularly in the second half of 2025. We continue to prioritize disciplined origination, appropriate pricing and strong credit structuring instead of certain production or loan balance targets.

Despite the loan balance decline throughout 2025, in the first quarter of 2026, net loans increased $99.8 million or 2.3% to $4.46 billion at March 31, 2026. This increase was primarily driven by growth in construction and commercial real estate loans, partially offset by declines in multifamily loans. Payoff activity moderated compared to recent quarters, which supported the increase in loan balances in the first quarter of 2026.

Our lending activity continues to reflect our relationship-based approach and conservative credit posture. At year-end, our pipeline of unfunded commitments remained solid, particularly within construction and commercial real estate lending. These unfunded commitments provided a foundation for future loan activity, while efforts to underwrite strong loans with relationship-based borrowers continue simultaneously.

From a funding standpoint, total deposits were $4.48 billion at December 31, 2025, a decrease of $122.8 million from the end of 2024. This decrease was driven primarily by reductions in broker deposits and time deposits, partially offset by growth in interest-bearing checking balances. While nonbrokered deposits declined gradually in 2022 through 2024 following COVID-19 economic stimulus, 2025 generally demonstrated a stabilization of non-brokered deposit balances.

At March 31, 2026, total deposits were $4.5 billion, a modest decline from year-end with deposit balances remaining generally stable during the quarter. Deposit markets remain competitive across both core and broker channels. We continue to manage our funding mix with a focus on cost, duration, liquidity and customer relationships. Brokered deposits, retail time deposits, core transaction accounts and other wholesale funding sources each remain part of our broader liquidity and interest rate risk management strategy, and we evaluate those sources based on relative pricing, desired duration and balance sheet needs.

Overall, the trends on this slide reflect a disciplined approach to balance sheet management. We are focused on maintaining strong capital and liquidity, supporting relationship-based loan growth where pricing and structure are appropriate and managing deposits and other funding sources in a way that supports long-term performance. For the full year 2025, Great Southern reported net income of $71.0 million or $6.19 per diluted common share compared to $61.8 million or $5.26 per diluted common share in 2024.

Return on average assets was 1.22% for 2025 compared to 1.05% in 2024 and return on average tangible common equity was 11.56% for 2025 compared to 10.74% in the prior year. These results reflected solid profitability supported by resilient net interest income, strong asset quality, disciplined expense management and continued capital management. For the first quarter of 2026, we reported net income of $17.5 million or $1.58 per diluted common share compared to $17.2 million or $1.47 per diluted common share in the first quarter of 2025.

While net interest income decreased modestly from the prior year quarter due primarily to the completion of accounting recognition from a previously terminated interest rate swap, earnings benefited from lower interest expense, strong credit quality, disciplined expense control and certain income and expense items that positively impacted the quarter. Our profitability metrics continue to reflect the strength and consistency of the franchise. In 2025, the efficiency ratio also improved to 61.91% from 64.40%.

In the first quarter of 2026, annualized return on average assets was 1.24% compared to 1.15% in the prior year first quarter, and the efficiency ratio remained relatively consistent at 62.85% compared to 62.27% in the first quarter of 2025. Overall, these profitability trends demonstrate our continued focus on disciplined execution, careful balance sheet management and long-term stockholder value creation. While the operating environment remains competitive, we believe our performance reflects the durability of our core banking model and the benefits of maintaining strong credit expense and capital discipline.

For the year ended December 31, 2025, net interest margin was 3.67% compared to 3.42% in 2024. This 25 basis point improvement was enabled through disciplined asset liability management and careful reduction in deposit and borrowing costs. Specifically, upon the Fed's rate cuts in late 2024 and late 2025, we commensurately lowered deposit rates while asset yields only modestly declined with many maturing fixed rate loans repricing at a higher rate. This ultimately led to an improvement in net interest margin.

In the first quarter of 2026, net interest margin was 3.71% compared to 3.57% in the first quarter of 2025 and 3.70% in the fourth quarter of 2025. This reflects continued momentum within the bank's core operations. These trends represent our continued focus on balancing asset pricing, funding costs and liquidity needs in a competitive rate environment. While market conditions continue to influence both loan yields and cost of funds, we remain focused on maintaining a disciplined approach to balance sheet management and long-term profitability.

Liquidity management remains a critical component of how we manage the company, particularly in a competitive banking environment. Our liquidity position continues to be supported by a combination of customer deposits, secured borrowing capacity, cash and cash equivalents, unpledged securities, loan repayments and other available funding sources. At March 31, 2026, our uninsured deposits, excluding deposit accounts of the company's consolidated subsidiaries, were approximately $740.1 million or 16.7% of total deposits. We continue to monitor deposit composition closely and remain focused on maintaining stable customer relationships while managing funding costs, liquidity and balance sheet flexibility.

At March 31, 2026, the company had available secured borrowing capacity of approximately $1.24 billion through the Federal Home Loan Bank and $332.1 million through the Federal Reserve Bank. In addition, we held $187.4 million in cash and cash equivalents as well as $347.1 million of unpledged available-for-sale securities. Taken together, these sources provide meaningful liquidity to support depositors, meet borrowers' credit needs and manage the balance sheet through a range of market conditions. We believe our liquidity position remains strong and reflects our continued emphasis on prudent funding, disciplined balance sheet management and sound risk oversight.

Capital levels remain very strong. Our capital base provides us the ability to absorb changes in the operating environment, evaluate growth opportunities and return capital to stockholders when appropriate. As we manage through 2025 and entered 2026, our capital position continued to support our focus on long-term value creation with a commitment to tangible book value appreciation. At December 31, 2025, the company's total stockholders' equity and common stockholders' equity were $636.1 million, resulting in a book value of $57.50 per common share. This represents a $36.6 million increase in stockholders' equity from the prior year.

The increase was driven by $71.0 million in net income, a decrease in unrealized losses on investment and interest rate swaps and a $6.7 million increase in equity from stock option exercises. These items were partially offset by $18.8 million in cash dividends declared on the company's common stock and $44.5 million in common stock repurchases. During the first quarter of 2026, total stockholders' equity decreased $2.5 million to $633.6 million, while book value per common share increased to $58.27.

The decrease in stockholders' equity from December 31, 2025, was primarily driven by $4.7 million in cash dividends declared, $16.9 million in common stock repurchases and an increase in unrealized losses on investments and interest rate swaps. These items were mostly offset by $17.5 million in net income and a $4.6 million increase in equity from stock option exercises. The increase in unrealized losses during the first quarter reflected changes in market interest rates and their impact on the fair value of available-for-sale securities and interest rate swaps.

Importantly, our regulatory capital ratios continue to significantly exceed well-capitalized thresholds at March 31, 2026, underscoring the strength of our capital position and our continued focus on prudent capital management. This slide provides a historical view of our tangible common equity, or TCE, and our TCE ratio since 2021. The TCE ratio represented by the black line, measures tangible common equity as a percentage of tangible assets. The decline in 2022 was driven primarily by the company's repurchase of a substantial amount of its common stock as well as market-driven unrealized losses on investment securities and interest rate swaps resulting from the significant increase in interest rates in 2022.

Since then, our tangible common equity position has rebounded significantly. At December 31, 2025, the company's TCE ratio was 11.2% and at March 31, 2026, the TCE ratio was 11.0%. Overall, our tangible common equity position continues to reflect meaningful appreciation driven by both strong earnings and opportunistic share repurchases with relatively short tangible book value earn backs. We feel this metric demonstrates the bank's success in generating long-term shareholder returns.

As shareholders of Great Southern, we recognize the significance of dividends as a crucial component of our common stock's total return performance. Since 1989, through varying business cycles, Great Southern has consistently paid quarterly cash dividends to our common shareholders. These dividend declarations are carefully approved by our Board of Directors, considering factors such as quarterly earnings, strategic priorities and the capital requirements of the company. In 2025, we declared total regular cash dividends of $1.66 per common share.

The Board increased the regular quarterly cash dividend to $0.43 per common share from $0.40 per common share during the third quarter of 2025. In the first quarter of 2026, the declared dividend remained at $0.43 per share. Enhancing long-term stockholder value remains a core priority for the company. This slide provides a historical overview beginning in 2021, highlighting net income, regular cash dividends declared, stock repurchase and shares outstanding at the end of each period. Our approach to capital allocation continues to include regular quarterly cash dividends and share repurchases when we believe that they are appropriate based on market conditions, capital levels and the expected impact on long-term stockholder value.

From year-end 2021 through the first quarter of 2026, we reduced our outstanding share count by approximately 2.3 million shares, representing a decrease of approximately 17%. This reduction reflects our continued use of share repurchases as part of a disciplined capital allocation strategy. For the full year 2025, the company reported net income of $71.0 million or $6.19 per diluted common share. During the year, we declared common stock cash dividends totaling $18.8 million or $1.66 per share and repurchased 755,759 shares of common stock at an average price of $58.35 per share, totaling $44.5 million. Book value per common share increased to $57.50 at December 31, '25, compared to $51.14 at December 31, 2024.

During the first quarter of 2026, the company reported net income of $17.5 million or $1.58 per diluted common share. We also repurchased 268,664 shares of common stock at an average price of $62.55 per share, totaling $16.9 million, and the Board declared a regular quarterly cash dividend of $0.43 per common share, totaling $4.7 million. At March 31, 2026, book value per common share increased to $58.27 and approximately 419,000 shares remained available under the current repurchase authorization previously approved by the company's Board of Directors.

Since May 1990, the company has used stock repurchase programs from time to time and management believes repurchases would contribute to the overall growth of stockholder value. Repurchase decisions continue to be based on a range of factors, including market availability, share price, capital levels and the expected impact on earnings per share and long-term value creation. We also continue to evaluate opportunities to responsibly grow the loan portfolio and the balance sheet between loan growth, capital levels and market conditions will help guide future repurchase activity.

That concludes my remarks. It's now my pleasure to turn the meeting over to our Chief Lending Officer, John Bugh.

Thanks, Rex. Today, I'd like to provide an overview of Great Southern's loan portfolio for the year ended December 31, 2025, as well as the first quarter of 2026. Throughout 2025, loan balances were impacted by elevated payoffs. Our loan portfolio decreased by $333 million or 7.1% in 2025. This decrease was primarily attributable to declines in multifamily loans, construction loans, 1-to-4 family residential loans and commercial business loans. In the first quarter of 2026, total net loans increased by $100 million or 2.3% to $4.46 billion, driven primarily by growth in construction and commercial real estate loans. Payoff activity moderated compared to recent quarters, but loan growth will continue to depend on borrower repayment activity, project timing and disciplined origination opportunities.

Turning to the loan portfolio. At March 31, 2026, the 2 graphs on this slide break down Great Southern's portfolio by loan type and by region. As you can see, commercial real estate and multifamily represent 65% of our loan portfolio and Missouri is our largest region, followed by Texas, Minnesota and Iowa. Unfunded commitments remain solid, particularly within construction lending.

As we move through 2026, our lending approach remains consistent. We are focused on relationship-based loan opportunities where the risk profile, pricing and structure align with our standards, while continuing to monitor market conditions and borrower performance closely. This disciplined approach supports both the quality of the portfolio and our long-term shareholder value objectives. Our lending activity is supported by both our commercial loan production offices and our established banking center markets.

We currently operate 7 commercial lending offices located in Atlanta, Charlotte, Chicago, Dallas, Denver, Omaha and Phoenix. These offices remain strategically positioned in attractive commercial lending markets and continue to be an important source of commercial loan activity. In 2025, 41% of our commercial lending production originated from these offices. In addition to these commercial lending offices, a meaningful portion of our commercial loan production is generated through our established banking offices in core markets, including Springfield, St. Louis, Kansas City, Minneapolis and Des Moines.

This combination of regional commercial lending offices and local market team supports a diversified lending platform while allowing us to maintain our emphasis on relationship-based lending, disciplined underwriting and appropriate credit structure. We continue to evaluate our commercial lending footprint based on customer relationships, market dynamics and long-term opportunity. This ongoing review helps ensure that we are allocating resources effectively and maintaining a lending platform that supports quality production across our markets.

Our consistent focus on credit fundamentals and disciplined risk management remains central to our performance in 2025 and into the first quarter of 2026. We continued to emphasize prudent underwriting, active portfolio monitoring and timely credit actions, all of which support the overall quality of loan portfolio. This slide provides an overview of our key asset quality trends since 2021.

At year-end 2025, nonperforming assets were $8.1 million or 0.15% of total assets compared to $9.6 million or 0.1% of total assets at year-end 2024. Nonperforming assets and potential problem loans totaled $9.5 million at year-end 2025, a decrease of $7.1 million from the prior year-end. At March 31, 2026, nonperforming assets increased to $10.1 million or 0.18% of total assets. Nonperforming assets and potential problem loans totaled $11.3 million at quarter end, an increase of $1.8 million from December 31, 2025.

While these balances increased modestly during the quarter, overall asset quality metrics remain very strong. Net charge-offs were negligible for the full year 2025. In the first quarter of 2026, the company recorded net recoveries of $13,000. We also did not record a provision for credit losses on outstanding loans during 2025 or in the first quarter of 2026. The allowance for credit losses as a percentage of total loans was 1.46% at December 31, 2025, and 1.43% at March 31, 2026. Management continues to consider the allowance adequate based on recent portfolio reviews and current economic conditions, while recognizing that changing economic conditions or portfolio trends could require additional provisions in future periods.

Overall, our asset quality trends continue to reflect our conservative credit culture, relationship-based lending approach and ongoing credit monitoring practices. We remain mindful of broader economic uncertainty and continue to monitor borrower performance closely, including isolated examples of slower lease-up activity in certain multifamily projects. For more information about our loan portfolio, we file quarterly loan portfolio presentations that are available on our Investor Relations website under the Presentations link.

And with that, I will hand the meeting over to our Chief Retail Banking Officer, Laura Smith.

Thank you, John. This slide provides a breakdown of our deposit mix at March 31, 2026. A stable and diversified deposit base remains important to our funding strategy, liquidity management and overall balance sheet flexibility. At March 31, 2026, total deposits were approximately $4.45 billion, a decrease of $37.6 million from December 31, 2025. Non-brokered deposits declined by approximately $26 million during the quarter, while brokered deposits declined by approximately $11 million.

Deposit competition remains elevated, and we continue to manage our funding mix with a focus on cost, duration, liquidity and customer relationships. This includes evaluating retail deposits, broker deposits, FHL bank borrowings and other available funding sources based on relative pricing and balance sheet needs. At March 31, 2026, estimated uninsured deposits, excluding deposit accounts of the company's consolidated subsidiaries were approximately $740 million or 16.7% of total deposits.

We continue to monitor our deposit composition closely and remain focused on maintaining stable customer relationships and prudent liquidity management. Our banking centers remain an important source of stability for the bank. At March 31, 2026, Great Southern operated 87 retail banking centers across Missouri, Iowa, Kansas, Minnesota, Arkansas and Nebraska. While digital services provide customers with greater flexibility, our physical locations continue to play an important role in customer relationships by providing a place to receive trusted support, open accounts, discuss lending needs and access a broader range of financial services.

As customer preferences and market conditions evolve, we will continue to evaluate our banking center network to ensure our resources are aligned with long-term opportunity and customer demand. Since 2013, we have closed 34 locations as part of this ongoing review, allowing us to reduce costs, reallocate resources and continue investing in offices and capabilities that best support customer needs. That same disciplined approach also guides how we modernize the network.

During 2025 and early 2026, we completed several initiatives, including converting the Sioux City main drive-thru to live teller ATM, opening our new next-generation banking center at Benton Avenue in Springfield, consolidating our Edina, Minnesota banking center with our Lakeville location and transitioning our Cottleville location to our second drive-thru Express Center. The Cottleville transition also represents our first Express Center in the St. Louis market.

Looking ahead, we expect to continue investing selectively in our banking center network, including the planned remodel of our Indian Hills banking center in Sioux City in 2026. We will continue to evaluate opportunities across the network based on customer needs, market dynamics and long-term opportunity while maintaining the relationship-based service that has long defined for Great Southern. Throughout 2025 and into 2026, we have continued to invest in technology initiatives that support customer experience, business banking capabilities and operational strength.

These efforts include visible customer-facing improvements as well as foundational projects that are essential to how we operate, including data management, system reliability, security and long-term scalability. We have completed or are nearing completion on several projects designed to enhance services for our business banking customers, including improvements to our treasury management capabilities. We also launched a new public-facing website and are beginning a project to update the online banking experience.

Together, these initiatives are intended to make banking with Great Southern more efficient, accessible and responsive to customer needs. As banking technology continues to evolve, we remain focused on advancing our systems in a thoughtful and controlled manner with strong attention to data protection, reliability and customer trust. This approach supports our broader goal of improving the customer experience while maintaining the disciplined operating practices that have long guided Great Southern.

Great Southern was again recognized by respected national organizations, including Bank Director and Forbes. While we do not manage this company for rankings or rewards, we appreciate this recognition because it reflects the consistency of our performance, the strength of our organization and the dedication of our associates. Bank Directors ranking banking study and Forbes' America Best Banks list evaluate banks using financial performance measures such as profitability, capital strength, credit quality, growth and stock performance.

Being included in these reviews is meaningful because these are areas where we have remained focused over time. We take pride in the commitment of our team and the consistency with which they serve customers, support our communities and execute the fundamentals of our business. The Community Matters program reflects our commitment to supporting the communities where we live and work. Through this program, we focus on areas where Great Southern can make a practical difference, including community development, volunteer service, charitable giving and financial education.

In 2025, Great Southern contributed approximately $1.94 million through corporate donations and sponsorships, supported more than 800 nonprofit and student-specific organizations and associates donated approximately $56,300 through United Way campaigns and community giving day contributions. Our associates also contributed 6,290 volunteer hours to 340 organizations. These efforts reflect the way our team brings our core values to life beyond the bank's day-to-day operations. Community matters is also an extension of our relationship-based approach to banking.

Our associates live and work in the markets we serve and many support local organizations as volunteers, mentors, Board members and advisers. Program helps us support initiatives that strengthen local economies and access to education, promote affordable housing and improve quality of life in our communities. Additional information about community matters is available on the Great Southern Bank Community Matters website, where visitors can learn more about the organizations and initiatives supported through the program.

We are proud of the impact our associates and community partners made in 2025, and we remain committed to supporting the people and places that have supported Great Southern for more than a century. Great Southern has long believed that service to our communities is an important part of who we are as a company. This year, we recognized one associate through the Bill and Ann Turner Distinguished Community Service Award, which honors the legacy of Bill and Ann Turner and their example of leadership, generosity and commitment to improving the lives of others.

This year, we are pleased to recognize Harlie Oost, Banking Center Manager in Kimberling City as the 2026 award recipient. Harlie's commitment to giving back reflects the spirit of this award and the important role our associates play in strengthening the communities we serve. Part of this recognition, Great Southern made a donation on Harlie's behalf to her preferred organization, [indiscernible] society. Congratulations to Harlie, and thank you for representing Great Southern with care, commitment and a strong sense of community. Thank you for your attention.

I'll turn the meeting back over to Joe Turner for closing remarks.

All right. Thanks, Laura. As we move through 2026, we continue to operate in a competitive and evolving banking environment. Interest rates, deposit competition, borrower performance and customer expectations all remain important consideration. At the same time, Great Southern's priorities remain consistent, maintaining strong capital and liquidity, preserving credit quality, managing expenses carefully and serving our customers and communities well. Our approach has always been grounded in prudent risk management and long-term decision-making. We do not manage the company for short-term outcomes. Instead, we focus on cultivating durable customer relationships, maintaining conservative credit standards and adapting thoughtfully as market conditions change.

That approach served us well in 2025 and continues to guide how we are managing the business today. We also recognize that banking continues to evolve. Customer preferences are changing. Technology is advancing and the way people interact with financial institutions continues to shift. We are investing thoughtfully in our systems, banking centers, digital capabilities and associates so we can improve the customer experience, strengthen operational capabilities and maintain the relationship-focused service that has long defined Great Southern.

Looking ahead, we believe our experienced team, strong financial position and disciplined operating culture position us well to navigate the changing conditions. Our focus remains on supporting our customers, strengthening our communities and creating long-term value for our stockholders through adaptability, consistent execution and prudent risk management.

Before concluding today's meeting, I want to review our stock's total return since going public in 1989. Given our commitment to long-term shareholder value creation, over more than 3 decades as a public company, despite challenging and evolving times, our long-term strategic commitment has sustained driving meaningful returns to our stockholders. We remain committed to continuing to sustained success in the years to come.

As we close today's meeting, I want to return to the foundation of Great Southern's success. For more than a century, this company has been guided by consistent core values, serving customers well, supporting our communities, managing risk prudently and making decisions with the long term in mind. The banking environment will continue to change. Interest rates, technology, customer expectations and competitive dynamics will all evolve, but our approach remains steady. We will continue to focus on strong relationships, disciplined execution and sound credit practices and careful capital management.

What gives me confidence is the strength of our people and the culture they carry forward every day. Our associates are the connection between Great Southern and the customers and communities we serve. Their commitment, professionalism and service mindset are central to who we are as a company. As we look ahead, we remain focused on investing thoughtfully in our team, our technology and our customer experience while preserving the conservative operating approach that has served us well over time.

We believe this balance of consistency and adaptability positions Great Southern to support our customers, strengthen our communities and create long-term value for our stockholders. That concludes our formal presentation. Do we have any questions at this time? Okay. It looks like there are no questions. So we will begin the business portion of the meeting, and I'll turn it over to our Corporate Secretary, Bryan Tiede, to conduct that. Bryan?

Thank you, Joe. Turning to the business portion of this meeting. We have determined that a quorum is present, so voting on the proposals before this meeting may occur. The first item of business is to vote on the proposals set forth in the notice of this meeting and the proxy statement, which were made available to stockholders commencing on or about March 31, 2026. No other proposals may properly come before this meeting.

Only stockholders of record as of the close of business on March 3, 2026, are entitled to notice of and to vote at this meeting. If you are a stockholder entitled to vote and have not yet voted or if you want to change your vote previously cast by proxy, please do so via the website used to access this meeting. Please remember that if you have already voted by proxy, it is not necessary to vote again. After voting has been completed on all matters, we will provide a preliminary report of the results. The polls for voting will remain open for a short time as I formally present the proposals.

The first proposal is the election of 4 directors. The Board of Directors is divided into 3 classes, the terms of which are staggered to expire in different years. Mr. Kevin A. Ausburn, Mrs. Amelia A. Counts, Mr. Stephen D. Edwards and Mr. Douglas M. Pitt are in the class of directors whose term expires this year. Mr. Ausburn, Mrs. Counts, Mr. Edwards and Mr. Pitt are willing to serve the 3-year term for which they have been nominated. Since no other nominations may be made at this meeting, I declare the nominations closed. Are there any questions regarding the election of directors? If there are no questions, we will proceed.

The second proposal for your consideration is an advisory nonbinding vote on executive compensation as described in the company's proxy statement for the annual meeting. Are there any questions on this proposal?

The third proposal for your consideration is the approval of the Great Southern Bancorp 2026 Omnibus Incentive Plan as described in the company's proxy statement for the annual meeting. Are there any questions on this proposal?

The final proposal for your consideration is to ratify the Audit Committee's appointment of Forvis Mazars LLP to serve as Great Southern's independent registered public accounting firm for the fiscal year ending December 31, 2026. Are there any questions on this proposal?

The polls are about to close. So if you are a stockholder of record and wish to vote during this meeting but have not yet done so, please do so now. As previously noted, if you have already voted by proxy, it is not necessary to vote again. I will pause briefly.

The proposals have been presented to you in the notice and proxy statement and at this meeting. Proxies have been made available and returned and any stockholders of record wishing to vote during this meeting have had an opportunity to do so. The polls are now closed. The preliminary results are as follows: Mr. Ausburn, Mrs. Counts, Mr. Edwards and Mr. Pitt have been elected as directors, each for a 3-year term. The advisory vote on executive compensation has been approved.

The Great Southern Bancorp 2026 Omnibus Incentive Plan has been approved. And the appointment of Forvis Mazars LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2026, has been ratified. The final results will be contained in a Form 8-K to be filed by the company with the Securities and Exchange Commission. Are there any further questions? If not, we are now ready to adjourn the meeting. Seeing no questions, I declare the 2026 Annual Meeting of Stockholders is now adjourned. We thank you for attending and for your continued support of Great Southern.

This concludes the meeting. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Great Southern Bancorp's First Quarter 2026 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Christina Molonato. Please go ahead.

Good afternoon, and thank you for joining Great Southern Bancorp's First Quarter 2026 Earnings Call. Today, we'll be discussing the company's results for the quarter ended March 31, 2026.

Before we begin, I'd like to remind everyone that during the call, forward-looking statements may be made regarding the company's future events and financial performance. These statements are subject to various factors that could cause actual results to differ materially from those anticipated or projected. For a list of these factors, please refer to the forward-looking statements disclosure in the first quarter earnings release and other public filings. Joining me today are President and CEO, Joe Turner; and Chief Financial Officer, Rex Copeland.

I'll now turn the call over to Joe.

Okay. Thanks, Christina, and good afternoon to everyone on the call. We appreciate you joining us today. Our first quarter 2026 results reflect a solid start to the year in a continuing competitive operating environment. Both credit and earnings metrics remain strong, allowing for continued progress in our pursuit of meaningful per share tangible book value growth. This progress was underpinned by disciplined expense management, careful balance sheet structuring and a continued emphasis on relationship-based banking.

In the first quarter of 2026, we reported net income of $17.5 million or $1.58 per diluted common share compared to $17.2 million or $1.47 per share in the year ago quarter. Compared to the fourth quarter of 2025, net income was up from $16.3 million or $1.45 per diluted share. Overall, results for the quarter reflected a resilient net interest margin prudent asset liability management, thoughtful capital allocation and stable loan balances.

Net interest income totaled $48.3 million for the quarter. That was down about $1 million from the first quarter of '25, primarily as a result of the absence of the income from our now terminated interest rate swap. That was, I think, about $2 million in Q1 of '25. Despite this lost income, our ability to strategically manage funding costs while maintaining attractive asset yields allowed for strong net interest income for the quarter. Additionally, we benefited from the collection of $483,000 in unbooked interest this quarter, which further supported our net interest income.

Our annual loss margin was 3.71% compared to 3.57% in 2025 first quarter and 3.70% in the fourth quarter of '25. And I think the -- if you pulled out the $483,000 of somewhat unusual interest income that might have knocked 3 or 4 basis points [indiscernible] of the margin number. Total loans increased almost $100 million during the quarter. Loan growth was primarily in construction, commercial real estate lending, though that growth was partially offset by a decline in the multifamily category. While this balance sheet growth supported earnings in the quarter period-to-period loan trends are influenced significantly by loan repayments from our borrowers.

In the first quarter of '26, our loan repayments were less than our quarterly average during the -- during 2025 and definitely during the last half of 2025. As such, we remain committed to measured loan origination and disciplined underwriting. From a credit standpoint, we remain mindful of the volatility and the macroeconomic challenges affecting our borrowers. Asset quality metrics in the first quarter of '26 remain very strong for our bank with nonperforming assets to total assets of 0.18% with virtually no charge-offs. But we continue to monitor isolated examples of slower lease ups on projects, along with broader credit concerns as markets remain volatile.

We did not report a provision for credit losses on outstanding loans in the first quarter '26. Given lower unfunded balances and mix changes in the first quarter of '26, we did recognize a negative provision on unfunded commitments of $931,000. On the funding side, total deposits remained generally stable throughout the first quarter of '26. Non-broker deposits were down just $26 million from the start of the quarter and broker deposits were down about $11 million as we use FHLB borrowings to replace serve maturing balances. We saw normal movement across deposit categories. Deposit markets remain competitive across both core and broker channels and we continue to manage our funding mix with a focus on cost, duration and flexibility.

Expense management remains a top priority for the bank as well. Noninterest expense for the quarter was $34.8 million, down $30,000 from the first quarter of '25. Part of this decline is related to an insurance reimbursement of $261,000 in legal fees recovered through a loan foreclosure in the quarter. Additionally, several projects that would have increased hardware and software systems costs expected in the first quarter of '26 have been pushed to later in the year. We continue to invest in systems, infrastructure and personnel to support the franchise over the long term.

As we move through the balance of '26, we remain focused on maintaining strong credit quality, preserving net interest margin managing expenses carefully and continuing to build long-term value for our stockholders through thoughtful capital deployment. With that, I'll turn the call over to Rex for a more detailed discussion of the financials.

Thank you, Joe, and good afternoon, everyone. I'll now provide a little more detail on our first quarter 2026 financial performance. and how it compares to both the prior year and the previously linked quarters. For the quarter ended March 31, 2026, we reported net income of $17.5 million or $1.58 per diluted common share compared to $17.2 million or $1.47 per diluted common share in the first quarter of 2025 and compared to $16.3 million or $1.45 per diluted common share in the fourth quarter of 2025. We did have a few income and expense items that impacted our results in a positive manner in the quarter. I'll mention some of those throughout this discussion.

Net interest income for the quarter totaled $48.3 million compared to $49.3 million in the first quarter of 2025 and $49.2 million in the fourth quarter of 2025. Compared to the first quarter of 2025, net interest income decreased by about $1 million, as we mentioned, or approximately 2%. And as we said, that decrease was driven primarily by the reduction in quarterly interest income associated with the previously terminated interest rate swap, which ended in October of 2025.

Additionally, compared to the prior year quarter, interest income declined due to lower loan balances and lower market rates which primarily impacted variable rate loans and some newer fixed rate loan originations. Those items were mostly offset by lower interest expense on deposit accounts and borrowings due to disciplined funding cost management and the ongoing repricing of deposits and other liabilities. In addition, there was no interest expense on subordinated notes in the quarter ended March 31, 2026, and since those notes were redeemed in June of 2025.

As Joe mentioned, we have recorded approximately $483,000 of additional interest income related to collection of unbooked interest on 3 separate relationships, 2 of these relationships have recently provided interest payments on a semiannual basis, though we do not have assurance of future payments or amounts going forward. I'll note that we did record additional interest income totaling $744,000, in the first quarter of 2025 on similar circumstances as those in this quarter. These types of cash basis interest recoveries can occur sporadically.

Our effective loan pricing and disciplined focus on interest expense resulted in annual net interest margin for the first quarter of '26 of 3.71% compared to 3.57% in the first quarter of 2025 and 3.70% in the fourth quarter of 2025. Noninterest income for the quarter was $7.0 million compared to $6.6 million in the first quarter of 2025. The increase of $439,000 was driven primarily by stronger commissions from annuity sales. We also benefited from other income in the quarter, $421,000 of which was related to a fee on a newly originated loan with an interest rate swap as part of the transaction and unrelated and exit of a tax credit limited partnership. Those types of fees and payment curve sporadically as part of our operations.

Total interest expense for the quarter was $34.8 million, a decrease of approximately $30,000 compared to the first quarter of 2025. As mentioned, part of this decrease related to the reimbursement in legal fees. Further, we noted several projects that were deferred in the quarter due to scheduling limitations, so we expect additional expense will come online in future quarters, and we expect these projects to begin throughout the remainder of 2026. Our regular reimbursement related to qualifying expenses under our debit card program was also recognized in the first quarter, reducing noninterest expense by $453,000.

Given our continued investment in upgrades of long-term capabilities and the expense reimbursement as noted above, we do expect noninterest expense levels will increase a bit throughout the year. Our efficiency ratio for the quarter ended March 31, 2026, was 62.85% compared to 62.27% for the same quarter in 2025. The company's ratio of noninterest expense to average assets was 2.47% for the 3 months ended March 31, 2026, compared to 2.34% for the 3 months ended March 31, 2025.

Turning to the balance sheet. Total assets ended the quarter at approximately $5.69 billion compared to $5.60 billion at December 31, 2025. Total net loans, excluding mortgage loans held for sale, increased approximately $99.8 million or 2.3% from $4.36 billion at December 31, '25 to $4.46 billion at March 31, 2026. The increase in loans, as mentioned, was driven primarily by increases in construction loans and commercial real estate loans and partially offset by a decrease in multifamily loans. The overall increase in our loan portfolio balances primarily reflect a reflection of lighter loan repayments in the 2026 first quarter. Had loan payoffs remain consistent with levels in the second half of 2025, our loan balances would likely have ended up $100 million or more lower.

Given the continued uncertainty with loan payoffs, we remain committed to measured loan originations with disciplined underwriting. On the funding side, total deposits ended the quarter at approximately $4.45 billion, a decrease of approximately $37.6 million from December 31, 2025. Noninterest and interest-bearing checking combined decreased $9 million in the quarter. Retail time deposits decreased $17 million and brokered deposits decreased $11 million. Though deposit competition remains strong our deposit balances have continued to stabilize throughout the last several quarters.

As of March 31, 2026, we estimated an uninsured deposits, excluding deposit accounts of the company's consolidated subsidiaries were approximately $740 million or 16.7% of total deposits. From an asset quality perspective, the bank's credit metrics remain excellent. Nonperforming assets and potential problem loans totaled approximately $11.3 million at March 31, 2026, an increase of about $1.8 million from $9.5 million at December 31, 2025. At March 31, 2026, nonperforming assets were approximately $10.1 million or roughly 0.18% of total assets compared to $8.1 million or 0.15% of total assets at December 31, 2025.

During the 3 months ended March 31, 2026 and 2025, the company did not record a provision expense on its portfolio of outstanding loans. Total net recoveries were approximately $13,000 for the 3 months ended March 31, 2026, compared to total net charge-offs of $56,000 during the same period in 2025. Additionally, for the quarter ended March 31, 2026, the company recorded a negative provision on unfunded commitments of approximately $931,000 compared to a negative provision of unfunded commitments of $348,000 for the first quarter of 2025. This negative provision on unfunded commitments resulted from the decline in unfunded commitments, primarily in unfunded construction balances.

Our capital position remained a key strength in the quarter. Total stockholders' equity at March 31, 2026, was approximately $633.6 million, representing 11.1% of total assets and a book value of approximately of $58.27 per common share. This compares to total stockholders' equity of $636.1 million or 11.4% of total assets and a book value of $57.50 per common share at December 31, 2025. The slight decrease in stockholders' equity in the quarter was driven by $16.9 million in common stock repurchases, $4.7 million in cash dividends declared and a $2.9 million increase in unrealized losses on investments and interest rate swaps, partially offset by $17.5 million in net income and $4.6 million in increased capital due to stock option exercises.

During the 3 months ended March 31, 2026, the company repurchased 268,664 pairs of its common stock at an average price of approximately $62.55 per share. and the company's Board of Directors declared a regular quarterly cash dividend of $0.43 per common share. Also during the first quarter, the company experienced stock option exercises of just over 80,000 shares at an average price of approximately $50.90 per share. As of March 31, 2026, approximately 419,000 shares remained available under the current repurchase authorization, and our outstanding shares were approximately 10,874,000 shares at the end of March. Overall, our balance sheet remains well positioned for sustained success driven by strong capital levels, ample liquidity, solid credit fundamentals and a balanced earning asset and funding profile. That concludes my remarks.

We are now ready to take your questions.

[Operator Instructions] And our first question comes from the line of Damon DelMonte of KBW.

First question on expenses and kind of the outlook from this point going forward. I know you guys noted that there are some projects that will be underway shortly and continue throughout the year. Could you give a little bit of guidance as to maybe help us quantify what that expense rate would be going forward?

Well, first, obviously, the items that we called out in the first quarter, the couple of different things that reduced our expenses. We don't anticipate those are going to repeat in -- and then it's just going to be a matter of how quickly some of these projects get going throughout the rest of the year. So I don't really have a great firm answer for you on that. I mean it's not going to be huge amounts of money. I don't think in any given quarter, but it's going to build on itself probably over the course of the year a little bit.

Yes. I think that's right.

Can you give a little color on some of the projects?

I think in total, we're primarily talking about IT projects and they involve data security. They involve some customer-facing technologies. There's some substantial upgrade in our systems that we're investing in. And so I think when it's all fully baked in. And as Rex said, we're not sure exactly when that will be, but that will probably happen over the next 3 to 6 quarters, I think it's going to -- I think it could add a $200,000 to $250,000 a month to our expense levels.

Got it. Okay. Okay. That's helpful. All right. And then I guess with regards to the margin, obviously, I think you quantified a 3 or 4 basis point impact from the interest payments this quarter. But as we kind of think about the core margin going forward, if we do see one rate cut later in the year, could you just kind of remind us how you're positioned for the coming quarters?

Yes. I mean we're pretty balanced, we think, on that. If it's a rate but down the road of 25 basis points in the near term, it shouldn't be that impactful. It might be a bit impactful for a couple of months or something if we have some of our variable rate loans that were repriced down, most of our liability funding is pretty short. So we've got a lot of overnight advances from the home loan bank. Other items, we got interest rate swaps that would presumably come down in that H2. So we've got a lot of things on the liability side that are fairly short and would reprice pretty quickly. So we don't really anticipate that is going to -- it would negatively impact us very much or for very long. So I think we're pretty well matched. If rates stay where they are, we don't we don't anticipate there will be a lot of movement in our net interest margin. And even if they only moved by 25 basis points up or down, probably isn't going to move the needle too much on that even.

Okay. Great. If I could squeeze one more in on loan growth. You highlighted that the paydowns were slower this quarter. Any visibility into expected pace of pay downs as we progress through the year? Do you have a little bit more optimism that you could kind of get a little bit more consistent with positive growth versus kind of the trends we've seen recently?

It's just -- this is one of the reasons, Damon, that we don't give guidance is just very difficult to predict. The -- as Rex alluded to, our levels of prepayments, which is really what moves the needle for us. They were probably, I don't know, $180 million less than the first quarter of '26 than they averaged in the last half of '25. So that's a pretty significant number. And so you have to ask yourself, okay, is there may be a reason? Is it a list favorable refinancing market, Mayo, but we're just not comfortable. It's -- it's too volatile to really give guidance, and that's why we choose not to.

Our next question comes from the line of John Rodis of Brean Capital.

Joe, I think you -- I just want to make sure I heard you correctly on expenses. You said IT could add roughly $200,000 to $250,000 a month. Is that right? Or was it a month or a quarter?

No, that was right. That's right. .

A month?

Yes. Yes.

Not necessarily immediately, but over...

Not necessarily. I mean, when it's all -- when all these projects are fully operational, which I think will happen over the next 3 to 6 quarters.

Okay. Okay. Okay. So I mean, I guess, just back to expenses real quick. I mean when you back out the 2 reimbursements in the quarter, that gets you to like $35.5 million. So it sounds like you're sort of moving closer to that $36 million level, give or take, on a quarterly basis. Am I thinking about that right?

I think you are, yes. .

Okay. Okay. Joe, just on the buyback, you've got, what, give or take, 400,000 shares remaining. The stock's moved up a little bit versus your average in the quarter. Are you still a buyer at the current levels?

I mean I don't want to like exactly say what we would pay or whatever. But I mean, we do still think our stock at an attractive level whatever measurement you choose to sort of value it at. If it's -- if you're in a tangible book value earn back or whatever, yes, I mean we still think it makes sense.

And we look at it kind of in a total package to our total capital. We got to factor in if we have continued loan growth and things of that nature. So all those things play into making our termination from time to time whether we'll buy our stock back more aggressively or less aggressively, I can think.

Right. Within fee income, the commissions number, you talked about higher annuity sales, is that something that you think is going to continue? Or sort of what happened this quarter to make them higher?

They've been higher now for maybe 2, 3, 4 quarters than they typically have run. I don't know if there's anything in particular that's driving it necessarily. I think we've just got some of our customers are interested in that product. And we've got some folks that are well trained in it. And so it may continue on. It's just hard to know for sure if that's going to be something that people will continue to be interested in over the long haul. But I think in the near term, at least, I don't know that it's going to be all that different.

Yes. It's sort of an alternative to CDs. So has something to do with interest rates and the -- what interest rates are on comparable CDs versus what they can get on the annuity product.

Okay. Rex, just on the balance sheet, the securities portfolio was down a little bit. Would you expect the securities portfolio to sort of be flat to down a little bit going forward, sort of stable?

Yes, I think it will go down kind of slowly. I mean we've got a lot of product in there that has monthly payments. But they're not like large amounts in total compared to the whole portfolio. So I think for the near term in the next couple of years, unless rates went down substantially. We probably aren't going to see a huge amount of runoff in that portfolio. We do have some things that 3 to 5 years out, probably have some maturities in there and some things that will start to ramp that up a little bit more. But -- but in the near term, I don't think there's going to be a lot of change in the portfolio, probably not much in the way of added to the portfolio. And as far as the payments go, I mean, you're not looking at a big percentage of the portfolio running off in the next couple of quarters here.

Okay. And Joe, just one more question, sort of big picture. I think in the press release, you -- you talked about, I guess, moving one location here in St. Louis or to an updated location. Are there any other plans throughout the footprint for new locations or maybe to close some locations or anything like that you're contemplating right now?

That's something we're always doing, John. We're always looking at customer patterns and usage levels of banking centers, and we got to make sure that every dollar we have deployed is being best utilized. And so -- and the banking centers are -- they're our best delivery channel, but they're also our most expensive delivery channel. So we have to make sure that every dollar we're spending there is wisely spent. So that's something that we're always looking at.

And looking at some technology as well. So the one location in St. Louis, we were talking about the traffic pattern and everything there and the usage of the location. There's still some folks that will use it, we think. And so we're going to have ITMs there on site, and we've done that in a couple of other locations as well. So we're going to continue to be able to serve our customers with an interactive experience there. There just won't be an inside lobby present.

Thank you. I'm showing no further questions at this time. I'll now turn it back to Joe Turner for closing remarks.

All right. Thanks again everybody, for joining us today, and we look forward to talking to you after this -- after our second quarter earnings come out. Thank you.

Thank you for your participation in today's conference. This concludes the program. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Great Southern Bancorp's Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Christina Maldonado.

Good afternoon, and thank you for joining Great Southern Bancorp's Fourth Quarter 2025 Earnings Call. Today, we'll be discussing the company's results for the quarter and year ended December 31, 2025.

Before we begin, I'd like to remind everyone that during this call, forward-looking statements may be made regarding the company's future events and financial performance. These statements are subject to various factors that could cause actual results to differ materially from those anticipated or projected. For a list of these factors, please refer to the forward-looking statements disclosure in the fourth quarter earnings release and other public filings.

Joining me today are [indiscernible] Joseph Turner and Chief Financial Officer, Rex Copeland, I'll now turn the call over to Joe.

Okay. Thanks, Christina, and good afternoon to everybody on the call. We appreciate you joining us today. Our fourth quarter and full year 2025 results reflect the sustained success of our core banking operations and our commitment to long-term tangible book value appreciation despite a volatile economic environment.

Throughout the year, we remain focused on preserving net interest margin, protecting credit quality, controlling noninterest expense and opportunistically repurchasing our stock. For the fourth quarter, we reported net income of $16.3 million or $1.45 per diluted common share compared to $14.9 million or $1.27 per diluted common share in the year ago quarter.

For the full year, net interest income totaled $71 million, net income, I'm sorry, totaled $71 million or $6.19 per diluted common share. These results happen because of resilient net interest income, strong asset quality, improved asset liability management despite ongoing loan and deposit competition and fundamental economic pressures.

Net interest income for the 2025 fourth quarter totaled $49.2 million, which was a decrease of $371,000 or 0.7% compared to the prior year quarter. As you'll recall, we did lose the income from our terminated swap during the fourth quarter. We lost most of that income and the quarterly income had been $2 million. So that's the primary reason for the small decline.

Additionally, we have lower loan balances, which resulted in some lower interest income. But despite those factors, effective management of funding costs, reduced interest expense and mostly offset the decrease in interest income. This resulted in net interest margin expansion. Our margin grew from 370 this quarter, 3.7% to 3.49% in the year ago quarter. Core deposits remained relatively stable, reflecting continued customer engagement and the underlying strength of our relationship-based banking model.

Net loans receivable totaled $4.36 billion at year-end, representing a decline of $333.5 million or 7.1% from where they were a year ago. We had declines in multifamily residential, commercial construction, 1-4 family and commercial business. The decrease primarily reflects elevated payoff activity as capital markets have eased during the year. The loan production remained active, we continue to maintain a conservative underwriting posture focusing on pricing structure and borrower stream.

Additionally, construction lending remained steady through the quarter and the full year into 2025, supported by a solid level of unfunded commitments. On the funding side, total deposits decreased $122.8 million or 2.7%. This really was almost exclusively in the brokered category that category declined $108.7 million. We did have a decline of $87.3 million in our core CDs or the CDs originated through our system of banking centers, but that was almost completely offset by the growth in our interest-bearing checking accounts, that was $75 million.

Deposit markets remain competitive across both core and brokered sales and we continue to balance pricing discipline with customer retention. We will continue to monitor repricing opportunities as interest rates and competitive dynamics develop and utilize nondeposit funding sources when appropriate. Credit quality remains a clear area of strength at year-end. Nonperforming assets for the fourth quarter totaled $8.1 million, representing 0.15% of assets.

Compared to the linked quarter, nonperforming assets increased $319,000. We did not record a provision for credit losses on outstanding loans in the fourth quarter of 2025. We also recorded net recoveries of of $22,000 for the quarter compared to net charge-offs of $155,000 during the same quarter a year ago. For all of 2025, we recorded recoveries of $11,000.

These results reflect stable borrower performance and the effectiveness of our underwriting and portfolio monitoring practices. Expense management remained a focus for the company during the year. Noninterest expense for the fourth quarter of 2025 was $36 million, down about $947,000 or 2.6% from the year ago quarter. The year-over-year decline was really exclusively a result -- in the year ago quarter, we had a $2 million charge associated with the settlement of a contract matter. And obviously, that did not recur this quarter.

We did have some higher net occupancy and equipment expense that's driven by investment in facilities and really primarily driven by investments in technology. For the fourth quarter of 2025, we reported an efficiency ratio of 63.89.

Looking forward, our priorities remain centered on maintaining strong capital and liquidity, supporting our customers and communities, maintaining strong credit metrics and deploying capital thoughtfully. The loan growth may remain challenging and economic conditions fluid, we believe our conservative approach and sound balance sheet management will continue delivering long-term value for our stockholders.

With that, I'll turn the call over to Rex for a more detailed review of our financial results.

Thank you, Joe, and good afternoon, everyone. I'll now provide a more detailed review on our fourth quarter and full year 2025 financial performance and how it compares to both the prior year period and the linked quarter. For the quarter ended December 31, 2025, we reported net income of $16.3 million or $1.45 per diluted common share compared to $14.9 million or $1.27 per diluted common share in the fourth quarter of 2024 and $17.8 million or $1.56 per diluted common share in the third quarter of 2025.

For the full year, net income was $71.0 million or $6.19 per diluted common share compared to $61.8 million or $5.26 per diluted common share in the prior year. Net interest income totaled $49.2 million for the fourth quarter of 2025 compared to $49.5 million in the prior year quarter and $50.8 million in the third quarter of 2025.

Interest income totaled $73.4 million for the fourth quarter of 2025 compared to $82.6 million in the fourth quarter of 2024 and $79.1 million in the third quarter of 2025. The year-over-year change primarily reflects the discontinuation of the previously terminated interest rate swap that Joe mentioned earlier, which was providing $2 million roughly in quarterly income prior to the fourth quarter.

Also, along with that, we had lower average loan balances and lower average market interest rates in the fourth quarter of '25 compared to the fourth quarter of 2024. While market rates move lower, the impact on loan yields was somewhat moderated as cash flows from lower rate -- fixed rate loans originated in prior years were redeployed into loans with comparatively higher rates. Interest expense totaled $24.3 million in the 2025 fourth quarter, reflecting continued reductions in deposit and borrowing costs as repricing dynamics moderated and wholesale funding remained well managed.

In addition, we repaid $75 million in subordinated debt in June of 2025, which resulted in $1.1 million in lower interest expense in the fourth quarter 2025 compared to the fourth quarter of 2024. These reductions in funding costs mostly offset the downward pressure we saw on interest income. Our proactive loan pricing in conjunction with disciplined management of funding costs resulted in net interest margin expansion as we realized an annualized net interest margin of 3.70% in the 2025 fourth quarter compared to 3.49% annualized in the year ago quarter.

Noninterest income totaled $7.2 million for the fourth quarter of 2025 compared to $6.9 million in the prior year quarter and $7.1 million in the third quarter of 2025. The small increase in noninterest income was due primarily to a $289,000 increase in late charges and fees on loans resulting from the early payoff of really primarily 1 commercial real estate loan in the 2025 fourth quarter. Total noninterest expense for the fourth quarter of 2025 was $36.0 million compared to $36.9 million in the fourth quarter of 2024 and $36.1 million in the third quarter of 2025.

The year-over-year decline primarily reflects, as Joe mentioned earlier, the $2 million decrease in other operating expenses, which resulted from the litigation and contract matter that we spoke of earlier. These reductions were partially offset by a $1.2 million increase in net occupancy and equipment expense driven primarily by higher computer license and support costs related to core systems and disaster recovery enhancements, charges associated with branch closures and lease facility asset adjustments and seasonal expenses related to things like snow removal and some adjustments to real estate taxes.

Our efficiency ratio was 63.89% in the fourth quarter of 2025 compared to 65.43% in the fourth quarter of 2024 and 62.45% in the third quarter of 2025.

Turning to the balance sheet items now. Total assets ended the year at $5.60 billion down from $5.98 billion at the end of 2024 and $5.74 billion at September 30, 2025. Total net loans, excluding mortgage loans held for sale, totaled $4.36 billion at December 31, 2025, down from $4.69 billion at December 31, 2024, driven by primarily declines, as Joe mentioned, in multifamily construction, 1:4 family residential and commercial business loans. And while the loan demand remains selective, the pipeline of unfunded loan commitments remain solid with the largest portion related to the unfunded portion of booked construction loans.

Liquidity remained strong at year-end with cash and cash equivalents totaling $189.6 million. In addition, the company maintained access to approximately $1.63 billion of additional borrowing capacity through the Home Loan Bank and the Federal Reserve Bank.

Total deposits were $4.48 billion at December 31, 2025, reflecting a decrease of $122.8 million or 2.7% compared to December 31, 2024. The reduction was primarily driven by a decrease in brokered deposits of $109 million and a decrease in time deposits of $87 million. Those are retail time deposits, not brokered. This was partially offset, as Joe mentioned before, by increases in interest-bearing checking deposits, which totaled about $75 million.

As of December 31, 2025, we estimated that uninsured deposits, excluding deposit accounts of the company's consolidated subsidiaries were approximately $720 million, representing roughly 16.1% of total deposits. Asset quality remained excellent with nonperforming assets representing 0.15% of total assets at year-end, consistent with both the linked quarter and prior year quarter.

During the fourth quarter of 2025, we recorded net recoveries of $22,000, an improvement from $155,000 in total net charge-offs recorded in the fourth quarter of 2024. For the full year 2025, we recorded net recoveries of $11,000. For the year ended December 31, 2025, we did not record a provision for credit losses on the portfolio of outstanding loans compared to a provision of $1.7 million recorded in 2024. In the fourth quarter of both 2024 and 2025, we did not record a provision for credit losses on the portfolio of outstanding loans. However, as a result of increased unfunded commitment balances, we recorded a provision for unfunded commitments of $882,000 in the 2025 fourth quarter, down from $1.6 million provision recorded in the fourth quarter of 2024.

Capital levels remained a key strength at year-end. Stockholders' equity was $636.1 million at December 31, 2025, an increase of $36.6 million from $599.6 million at the end of 2024. Stockholders' equity represented 11.4% of total assets and book value per common share was $57.50 at year-end 2025. The increase in stockholders' equity over the prior year was driven primarily by full year earnings, improvements in unrealized losses on investment securities and interest rate swaps and proceeds from stock option exercises, partially offset by cash dividends declared and common stock repurchased throughout the year.

Tangible common equity increased to 11.2% at December 31, 2025, compared to 9.9% at year-end 2024, reflecting the combined impact of retained earnings and improved market valuations within the securities portfolio. We ended the year with capital levels well in excess of regulatory requirements, providing flexibility to support the balance sheet, return capital to shareholders and navigate changing economic conditions.

During the fourth quarter of 2025, we repurchased 241,000 shares of our common stock at an average price of $59.33. And during the full year 2025, we repurchased 755,000 shares of our common stock at an average price of $58.35. In the fourth quarter of 2025, our Board of Directors also declared a regular quarterly cash dividend of $0.43 per common share, consistent with the previous quarter. For the full year ended December 31, 2025, the Board declared regular quarterly cash dividends totaling $1.66 per common share.

Overall, our balance sheet remains well positioned, supported by strong capital levels, ample liquidity and a healthy loan portfolio. That concludes my remarks. We are now ready to take your questions.

[Operator Instructions] Our first question is going to come from the line of Damon DelMonte with KBW.

First question, just regarding the margin. A pleasant surprise this quarter. I think given the impact from the swap, we're expecting the margin to come down pretty substantially, but you're able to offset that, it looks like with some lower funding costs. So just kind of curious as to how you think about the margin here as we start off 2026.

I think so far, we -- as you said, we performed a little better than we thought we might in the fourth quarter with that. We were able to bring some of our funding costs down, we're trying to manage that pretty proactively with the different avenues that we have to provide funding whether it's deposits or wholesale funds, et cetera. So we're trying to work through that and manage those -- the cost side of it.

I think what we're seeing, too, on the interest income side, we are seeing some of our loans, which were put on the books maybe a few years ago at maybe some lower short-term fixed rates, and some of those are renewing or we're just getting repayments on those and we're able to redeploy those funds in a little bit higher rate -- the current market rate than we had on the books before. So it's a combination of a few of those things.

Obviously, the first quarter, there's fewer calendar days. That shouldn't affect the margin percentage as much per se, but dollar-wise, we'll expect to be down some because of just a number of days in the quarter.

So do you think you're able to manage it. So there's just a modest amount of compression? Or I mean, do you think you can make -- have it go higher from here? .

I don't know that -- I mean you can jump in Joe. I don't know if we could expect to see it go higher necessarily.

Yes. I think, Damon, until the Fed take some action. I think we've -- we will see our maybe our core CD portfolio since that's sort of a lagging portfolio, maybe some of that will reprice and we'll see some interest expense go down there, but that's not a very big portion of our deposits. Most of our deposits reprice pretty well immediately. And so I think we probably gotten about all we can done on the part of the portfolio, so there won't -- there probably won't be any more improvement there.

The loan portfolio, as Rex said, I guess, if there is a bias, it would be a slight bias to go maybe a little bit higher, but it's not very meaningful in the overall scope of our level of net interest income. So I mean, as we said, we don't give guidance. But I think looking at the fourth quarter, I don't see anything that would make it be a whole lot different than that.

Okay. Got it. And then with respect to the outlook for loan growth, it sounds like you're continuing to have good production pipelines are healthy, but you continue to face elevated payoffs. Do you expect those payoffs to slow down at all were to a point where we can get some net growth here in 2026?

Yes. I think it's still going to be a challenging loan growth market for us because there's just -- while there's good activity, it's not great. And there still is outsized loan portfolio or loan payoffs. So I think that's going to be our challenge going forward.

In the fourth quarter, we did have 1 or 2 kind of unique loans. They were short-term loans and they paid off, and we knew that was going to happen. So that was one sizable one for sure. And we did generate new loans and had some growth. Some of the loans are construction deals where they are not going to fund immediately, but others were ones where they were existing projects, and so we did fund those day 1. I think it will just be like Joe said, there will be some more continuation of that. But I don't know that I see that -- I don't have a lot of clarity as far as what might pay off.

We do have a pretty sizable multifamily portfolio. And I think that was where we saw quite a bit of the repayment with the exception of the one loan I mentioned was in that multifamily. So it's hard to know exactly the timing and magnitude of how that's going to go.

Yes. It really is hard, Damon. I mean we try to keep track of it. We try to guess, but it's sort of -- it's sort of for the borrowers. Some of them choose to maybe pay us off with the debt fund, some of them choose to take a sale that's maybe at a lower price than they would be able to sell it for maybe a year or two down the road. So it's sort of the balls and the borrower's court to a big extent. So it's really hard to give you any guidance on that.

Got it. And then if I could just ask one more question on expenses. Fourth quarter came in much better than what we were looking for. Should we kind of expect an uptick off of this quarter's level, just kind of given a reset with salaries and benefits and things of that nature?

Yes. I mean, I think that's fair. We do have a lot of our employee base does have annual normal increases and a lot of those happened at the beginning of the year. Payroll taxes will reset. And generally, there will be some increase in that compared to the fourth quarter, there are some factors, as you say there that play into that.

Our next question is going to come from the line of John Rodis with Janney..

Hope you're doing well. Joe, just sort of back to the loan question from before, loans were down 7% this year. I know payoffs are hard to predict, so I appreciate that. But do you think maybe you've seen at least the worst of it? Or do you think loans could be down a similar amount in '26.

It's just really hard to say, John. Obviously, I hope we've seen kind of the worst of it. We really like our loan portfolio. And we're working hard to originate stuff. So I hope that's kind of like a high watermark for paydowns. But because loan repayments is such a big part of the calculation, it's just hard to kind of guarantee that one way or the other. .

Continue to originate and -- but we are also maintaining some pricing discipline, obviously, term credit term discipline. So we're going to continue that. We want to maintain credit quality obviously. So there's been growth, new loan originations in 2025. We just had payoffs that were outpacing a bit.

Okay. That's helpful, Rex. Rex, just on the securities portfolio, how should we think about that going forward? It was down a little bit this year? What sort of cash flows do you expect for the year?

Yes. I mean, the portfolio is about the same now as it has been for most of the year. So nothing really different about it. So probably similar type assuming rates don't change a whole lot, probably similar type of payments. Maybe these rates are lower now than they were to start 2025. Maybe there'll be a little bit more repayment. But the portfolio is mostly, as you can see from our filings, it's mostly mortgage-backed. It's all agency stuff, some SBAs,some municipality stuff, but by and large, the bulk of it is going to be some sort of an agency pass-through types and things of that nature.

So we do get some monthly payment stream from it, but it's not large amounts necessarily the portfolio is fixed rate stuff. So it's not changing around based on rates from that standpoint as far as our yields and such go. So I don't know that -- I mean it's not probably going to be dramatically different in '26. I wouldn't think unless the rates move down enough that there's a kind of a larger amount of prepayments to go on.

Okay. And as far as the cash flows, you're not really reinvesting right now, are you?

No, we've pretty much been taking the cash flows and reinvesting in loans.

Yes. Okay. Okay. Just one more question on the buybacks. You guys have been fairly active. And I think for the press release, you leave almost 700,000 shares currently. All things equal, would you expect to repurchase most of that this year? .

I mean, we're -- Yes, we like where our stock is trading at, John. Obviously, it's a little bit higher than it was in 2024, but I mean, our book value is a little higher, too. So I mean I think even with the recent run-up in stock price, we're still trading at less than 115% of book. So we see that as a good value. And particularly while we're not growing a lot, a good use of capital. .

Yes. you've definitely got the capital to support it.

Thanks, John.

And I'm showing no further questions at this time. And I would like to hand the conference back over to Joseph Turner for closing remarks. .

All right. We appreciate everybody being on the call today, and we'll look forward to talking to you in April. Thank you. .

This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.

Good day, and thank you for standing by. Welcome to the Great Southern Bancorp Third Quarter 2025 Earnings Call. [Operator Instructions]. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, [Christina Maldonado]. Please go ahead.

Good afternoon, and thank you for joining Great Southern Bancorp's Third Quarter 2025 Earnings Call. Today, we'll be discussing the company's results for the quarter ending September 30, 2025.

Before we begin, I'd like to remind everyone that during this call, forward-looking statements may be made regarding the company's future events and financial performance. These statements are subject to various factors that could cause actual results to differ materially from those anticipated or projected. For a list of these factors, please refer to the forward-looking statements disclosure in the third quarter earnings release and other public filings.

Joining me today are President and CEO, Joe Turner; and Chief Financial Officer, Rex Copeland. I'll now turn the call over to Joe.

All right. Thanks, Christina, and good afternoon to everyone. Thank you for joining us today. Our third quarter results reflect the continued strength and consistency of our core banking fundamentals and a solid earnings performance in what remains a competitive and dynamic environment. Core credit and operating results remained strong, supported by disciplined expense management, prudent loan underwriting and a stable deposit base.

We reported net income of $17.8 million for the quarter or $1.56 per diluted common share. That was up from $16.5 million or $1.41 in the same period a year ago. The year-over-year increase in net income primarily reflects improved net interest income, no provision for credit losses and continued management of noninterest expense. These results demonstrate our ability to deliver consistent profitability while carefully structuring the balance sheet and maintaining a conservative risk profile.

Net interest income totaled $50.8 million for the third quarter, an increase of $2.8 million or 5.8% compared to the $48 million reported in the same period a year ago. Our annualized net interest margin improved to 3.72% from 3.42% a year ago, reflecting stable loan yields, disciplined asset liability management and effective funding cost control in a highly competitive deposit environment.

Core deposits held steady during the quarter, underscoring the strength of our customer relationships and the value of our community banking business. On the lending side, gross loans totaled $4.54 billion, which was a decline of $223 million or 4.7% from December 31, 2024. The decrease primarily reflects elevated commercial real estate and multifamily loan payoff, along with a reduction in outstanding construction loans as many projects were completed. Given our emphasis on balancing loan growth with appropriate pricing and loan structure, loan production in the quarter only partially offset the heightened payoff activity.

Construction lending continues to show solid momentum with total unfunded construction commitments steady at approximately $600 million and monthly fundings of $30 million to $40 million. We remain focused on maintaining sound underwriting standards and disciplined credit practices demonstrated through exceptional assets, sound underwriting standards and disciplined credit practices, which have resulted in exceptional asset quality and negligible loan charge-offs.

On the funding side, total deposits decreased $77.5 million almost exclusively in the broker deposit area. The deposit market remains highly competitive with sustained rate pressure in both core and broker deposit segments. We are proactively managing this dynamic by balancing rate discipline with customer retention, choosing to prioritize certain funding sources over others at times. Future repricing opportunities will be closely monitored as market rates and deposit competition continue to evolve.

At September 30, 2025, nonperforming assets were $7.8 million, representing 0.14% of total assets and a $273,000 decrease from June 30, 2025. We did not record provision for credit losses on outstanding loans in the third quarter of 2025. These results highlight the continued strength of our loan portfolio and judicious risk management practices.

Expense management remains a top priority as well. Noninterest expense for the third quarter of 2025 was $36.1 million, up from $33.7 million in the year ago quarter. The year-over-year increase primarily was a result of higher legal and professional fees, upgrades in our core technologies and upgrades in our core technology system.

In the third quarter of 2025, we achieved an efficiency ratio of 62.45%. As we look ahead to the remainder of 2025, we remain focused on maintaining strong positions related to credit quality, capital and liquidity. Even amidst ongoing competition and elevated funding costs, we are committed to delivering consistent long-term value for our shareholders.

Let me now turn the call over to Rex Copeland for a detailed discussion of our financials. Rex?

All right. Thank you, Joe, and good afternoon, everyone. I'll provide a little more detailed review of our third quarter 2025 financial performance and how it compares to both the prior year period and the previous quarter.

As mentioned, we reported net income of $17.8 million or $1.56 per diluted common share in the third quarter of this year compared to $16.5 million or $1.41 per diluted common share in the third quarter of 2024 and $19.8 million or $1.72 per diluted common share in the second quarter of 2025. The decline compared to the prior quarter was primarily the result of a decrease in noninterest income and a modest increase in noninterest expense.

A couple of things in the second quarter this year, we had some significant nonrecurring income in the noninterest income category and also about $450,000, I believe, of interest income that was on some unbooked items. And so we did have those good news items in Q2.

Net interest income was $50.8 million compared to $48 million in the third quarter of 2024 and $51.0 million in the second quarter of 2025. The annualized net interest margin was 3.72% compared to 3.42% in the year ago quarter and 3.68% for Q2 of 2025. Interest income totaled $79.1 million compared to $83.8 million in the third quarter of 2024 and $81.0 million in the second quarter of 2025.

The year-over-year decrease reflects a slightly lower interest-earning asset base, mainly due to a decrease in average loan balances, along with lower prime and SOFR market rates, which impacted interest rates on variable rate loans. The average yield on loans decreased 23 basis points to 6.21% from 6.44% in the prior year period.

Interest expense for the third quarter of 2025 was $28.3 million compared to $35.8 million in the prior year period and $30.0 million in the linked quarter. The decrease from last year primarily reflects a lower cost of interest-bearing deposits and various borrowings as a result of FOMC rate cuts in late 2024 and September 2025. Interest expense also benefited from the absence of any interest on subordinated notes during the current quarter as those loans -- as those notes were redeemed in June 2025.

The average rate paid on total interest-bearing liabilities decreased to 2.66% in the 2025 third quarter, down from 3.24% in the 2024 third quarter. The company recognized approximately $2 million in interest income related to the terminated interest rate swap during the third quarter of 2025. And as a reminder, this benefit has now concluded following the swaps originally scheduled maturity date of October 6, 2025.

For the third quarter of 2025, noninterest income totaled $7.1 million compared to $7.0 million in the third quarter of 2024 and $8.2 million in the second quarter of 2025. The improvement from the prior year period was primarily driven by improvements in commissions on annuity sales and fees on loans but was partially offset by reductions in debit card and ATM fee income.

The largest individual change in the various noninterest income categories compared to the year ago quarter was a $206,000 increase in commission income. Total noninterest expense was $36.1 million compared to $33.7 million in the third quarter of 2024 and $35.0 million in the second quarter of 2025. The year-over-year increase of $2.4 million was primarily attributable to higher net occupancy and equipment expense, salaries and employee benefits, professional fees and expenses related to other real estate owned.

A couple more comments on those things. Net occupancy and equipment expense increased $735,000 from the prior year quarter, largely due to higher computer licensing and support costs associated with enhancements to our core systems and disaster recovery infrastructure, which collectively increased by $637,000 compared to the third quarter of 2024.

Salaries and employee benefits rose $636,000 year-over-year reflecting annual merit increases and staffing adjustments within our lending and operations areas.

Legal, audit and other professional fees increased $439,000 from the third quarter of 2024, primarily due to higher legal expenses related to corporate matters and loan collection activities.

Expenses on other real estate owned increased $394,000 from the prior year quarter primarily reflecting lower gains on sales of other real estate owned in the 2025 third quarter compared to some gains that we had in the 2024 period.

Also, the prior period benefited from the gains on the property sales. Current quarter reflected net rental income from the office building added to foreclosed assets in the fourth quarter of 2024.

Our efficiency ratio was 62.45% in the third quarter of 2025 compared to 61.34% in the third quarter of 2024 and 59.16% in the second quarter of 2025.

We continue to emphasize disciplined cost control and operational efficiency, while strategically investing in areas that enhance our capabilities and position the company for sustained growth in the future.

Turning now to the balance sheet. Total assets ended the quarter at $5.74 billion, down from $5.98 billion at the end of 2024 and $5.85 billion at June 30, 2025. Total net loans, excluding mortgage loans held for sale, decreased to $4.47 billion at September 30, 2025, compared to $4.69 billion at December 31, 2024, at $4.53 billion at June 30, 2025. The decrease compared to the previous year-end was primarily driven by decreases in construction loans, many of which were completed and moved to multifamily or commercial real estate categories. Multifamily loans and 1-to-4 family residential loans. While overall loan balances are expected to remain relatively stable through year-end, the unfunded portion of construction and commercial loan commitments remain strong and reflecting steady borrower activity within our markets.

The bank's on-balance sheet liquidity remains consistent with cash and cash equivalents totaling $196.2 million at September 30, 2025. The company also has access to additional funding lines through the Federal Home Loan Bank and Federal Reserve pay totaling $1.47 billion. This availability reflects, disciplined liquidity management amidst evolving market conditions and challenging funding cost dynamics.

Total deposits were $4.53 billion as of September 30, 2025, reflecting a decrease of $77.5 million or 1.7% compared to December 31, 2024. The decrease was primarily driven by a decrease in brokered deposits of $92.1 million and non-brokered time deposits, which decreased by $52.1 million. This was partially offset by a $54.3 million increase in interest-bearing checking deposits and an increase of $12.4 million in noninterest-bearing checking deposits.

As of September 30, 2025, we estimated an uninsured deposits, excluding those of our consolidated subsidiaries, totaled approximately $742 million, representing roughly 16% of total deposits. Asset quality remained healthy in the third quarter with nonperforming assets representing 0.14% of total assets and nonperforming loans representing 0.04% of period-end loans. Both ratios were generally consistent with the prior quarter and the year ago period.

During the quarter ended September 30, 2025, the company did not record a provision for credit losses on its portfolio of outstanding loans compared to a provision expense of $1.2 million recorded in the third quarter of 2024. The company recorded a negative provision for unfunded commitments of $379,000 in the third quarter of 2025 compared to a negative provision of $63,000 in the same quarter last year. The allowance for credit losses as a percentage of total loans stood at 1.43% as of September 30, 2025, a slight increase from 1.41% at June 30.

Our capital position remains strong, with total stockholders' equity increasing to $632.9 million at September 30, 2025, compared to $599.6 million at December 31, 2024. This represents 11% of total assets and a book value of $56.18 per common share. The $33.3 million increase from year-end 2024 was primarily driven by a $54.7 million in net income and a $4.2 million increase from stock option exercises, partially offset by $14.0 million in cash dividends declared and $30.0 million in common stock repurchases.

The increase in stockholders' equity was also aided by an $18.5 million improvement in accumulated comprehensive losses on our available-for-sale investments and interest rate swaps. Our tangible common equity ratio improved to 10.9% at the end of the third quarter, up from 9.9% at December 31, 2024, reflecting the combined benefit of retained earnings and reduced unrealized losses on available for sale investment securities and interest rate swaps. We continue to operate from a position of strength, maintaining capital levels that are well in excess of regulatory requirements and supportive of our long-term growth and shareholder return objectives.

As we shared on our last quarter's call, our Board of Directors approved a new stock repurchase authorization for up to 1 million additional shares, which became effective during the third quarter following the completion of our previous program. As of September 30, 2025, approximately 929,000 shares remain available for purchase under this most recent authorization. During the third quarter of 2025, we repurchased 165,000 shares of our common stock at an average price of $60.33 per share. Through the first 9 months of 2025, we repurchased 514,000 shares of our common stock at an average price of $57.89.

Our Board of Directors also declared a regular quarterly cash dividend of $0.43 per common share representing an increase of $0.03 from the previous quarter. For the 9 months ended September 30, 2025, the Board declared regular quarterly dividends totaling $1.23 per common share. Overall, our balance sheet remains strong and well positioned for the current environment, underpinned by solid capital levels, healthy liquidity and consistent credit performance, providing support for long-term shareholder value.

That concludes my remarks today. We are now ready to take your questions.

[Operator Instructions] Our first question comes from Damon DelMonte with KBW.

First question is kind of on the loan growth outlook. I think the comment was you hope to keep balances steady for the remainder of the year. Could you guys just talk a little bit about where you're seeing the best opportunities across your footprint? Maybe which regions are showing the most optimism for growth and maybe compare that against some of the slower ones?

Damon, I mean, I think there's opportunity really in kind of every pocket of our footprint. We're still seeing opportunities in Texas, Atlanta, certainly our St. Louis, Kansas City, our core markets, those would be some that I would highlight, although I think we're having origination requests kind of across the franchise. It's just that payoffs are elevated as well.

Got it. Okay. And then your credit quality has been exceptional. Kind of more broadly speaking in the industry, we've seen some kind of one-offs apparently that are, they are popping up for a bunch of folks. Are there any segments of your portfolio where you might be seeing some signs of weakness?

No, I don't really -- I couldn't say that we're seeing anything that broadly enough that you would say we're seeing general weakness. I mean, we do, from time to time, see a project, maybe it's a multifamily, maybe it's a retail that leases up slowly. So -- but I would say -- I would call that more idiosyncratic to that specific project as opposed to broader weakness.

The 2 events that I saw, I don't know if that's what you're talking about, but a company that has significant factoring relationships and then a subprime lender and we're not involved in those sectors at all. We sort of stick to our knitting on the credit side.

Got it. Okay. Appreciate that color. And then kind of along the lines of credit and outlook and we talk about provision a little bit. With the modest outlook for loan growth, it's probably fair to assume just a minimal provision just to kind of provide for any net growth that you do have, is that a reasonable way to look at it, correct?

I think so, and I guess if there was a net charge-off of some sort, we would probably cover that as well.

Right.

Got it. Okay. I guess if I squeeze one more in there, just kind of on the rate sensitivity. We just -- we saw a rate cut last month and just kind of kind of your thoughts on if we see another 25 basis points or a couple of 25 basis point cuts going into the latter part of the year, kind of how the margin is positioned for that?

I mean from a margin perspective, I think we feel like we're pretty well positioned with that. The rate cut that happened in September has not so far really impacted us. I mean we've been pretty steady on net interest income and margin since that. Rate cuts generally, if they're pretty moderate and spaced out a little bit. Shouldn't be harmful. I don't think. If you recall back several years ago when rates fell dramatically and went way down, that's when everybody, including us, kind of had some issues, maybe with losing some margin there for a while, took a while to gain it back. But overall, I don't think that minor and spaced out rate cuts would really be too impactful probably.

Now remember, we know we're going to have the $2 million per quarter that we had been enjoying for a long time on that terminated swap is now over. So we obviously have that factored into the fourth quarter here and beyond.

Our next question comes from John Rodis with Janney.

Rex, just on operating expenses, net interest -- yes, operating expenses. Do you think you can sort of keep them around this $36 million level? Or how should we sort of think about that?

Yes. I mean I think some of the things in the occupancy category and equipment category that I mentioned, those are probably kind of built in now as we've made some enhancements to systems and things of that nature. Some of the other things related to maybe the legal and professional fees. Hopefully, those are kind of peak there and maybe come back down a little bit in future periods.

Yes. I think you're -- we try to highlight, John, anything that we think is unusual. And as Rex said, the we did kind of have a higher level than normal of legal fees. I mean, I don't think we would characterize any of the higher spend in equipment expense, occupancy expense. We wouldn't characterize any of that as unusual. So I mean, I think it was a pretty normal quarter from a noninterest expense standpoint. We will have normal merit increases and so forth for employees kind of throughout the year. And those are usually a couple of percent. So that's going to be probably decent growth.

Okay. Okay. That makes sense. I don't know, Joe or Rex, just -- you guys sort of highlighted in your comments the commission line item in fee income. I've never seen that commission line item that high before. Just is this a new level? Or how should we think about commissions going forward?

Yes. I mean it's not a huge dollar amount. I mean, it's, what, $566,000 in the quarter. So it's not a super large item. But it is larger than we kind of have historically been. And we've had -- it's been elevated maybe a little bit here in the last couple of quarters. So I -- it's hard to know for sure, John, because it's just kind of individual customer related kind of stuff.

So to the extent that people are interested in the products, maybe it stays at that level. But I don't know -- there's not like any kind of big program per se, that we're like focused on that to try to drive additional income or anything there. So I would say we're sort of at a higher level, like you said, than we've been for a while and whether that can be sustained, I can't honestly tell you for sure.

I'm not showing any further questions at this time. I'd like to turn the call back over to Joe for any further remarks.

All right. Thanks, everybody. Thanks for being on our call today, and we look forward to talking to you again in January. Thank you.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.