Maryland
|
|
43-1524856
|
(State or other jurisdiction of incorporation
or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
1451 E. Battlefield, Springfield, Missouri
|
|
65804
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
|
|
(417) 887-4400
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
Common Stock,
|
||
par value $0.01 per share
|
GSBC
|
The NASDAQ Stock Market LLC
|
Large accelerated filer / /
|
Accelerated filer /X/
|
Non-accelerated filer / /
|
Smaller reporting company / /
|
Emerging growth company / /
|
JUNE 30,
|
DECEMBER 31,
|
|||||||
2019
|
2018
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Cash
|
$
|
99,567
|
$
|
110,108
|
||||
Interest-bearing deposits in other financial institutions
|
81,805
|
92,634
|
||||||
Cash and cash equivalents
|
181,372
|
202,742
|
||||||
Available-for-sale securities
|
305,649
|
243,968
|
||||||
Mortgage loans held for sale
|
11,106
|
1,650
|
||||||
Loans receivable, net of allowance for loan losses of $39,254 – June 2019;
$38,409 - December 2018
|
4,112,455
|
3,989,001
|
||||||
Interest receivable
|
14,351
|
13,448
|
||||||
Prepaid expenses and other assets
|
76,241
|
55,336
|
||||||
Other real estate owned and repossessions, net
|
7,107
|
8,440
|
||||||
Premises and equipment, net
|
143,473
|
132,424
|
||||||
Goodwill and other intangible assets
|
8,675
|
9,288
|
||||||
Federal Home Loan Bank stock
|
11,093
|
12,438
|
||||||
Current and deferred income taxes
|
—
|
7,465
|
||||||
Total Assets
|
$
|
4,871,522
|
$
|
4,676,200
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Liabilities:
|
||||||||
Deposits
|
$
|
3,888,536
|
$
|
3,725,007
|
||||
Securities sold under reverse repurchase agreements with customers
|
98,632
|
105,253
|
||||||
Short-term borrowings and other interest-bearing liabilities
|
168,636
|
192,725
|
||||||
Subordinated debentures issued to capital trust
|
25,774
|
25,774
|
||||||
Subordinated notes
|
74,059
|
73,842
|
||||||
Accrued interest payable
|
4,209
|
3,570
|
||||||
Advances from borrowers for taxes and insurance
|
10,550
|
5,092
|
||||||
Accrued expenses and other liabilities
|
26,499
|
12,960
|
||||||
Current and deferred income taxes
|
2,318
|
—
|
||||||
Total Liabilities
|
4,299,213
|
4,144,223
|
||||||
Stockholders' Equity:
|
||||||||
Capital stock
|
||||||||
Serial preferred stock –$.01 par value; authorized 1,000,000 shares; issued
and outstanding June 2019 and December 2018 - -0- shares |
—
|
—
|
||||||
Common stock, $.01 par value; authorized 20,000,000 shares;
issued and outstanding June 2019 –14,201,616 shares; December 2018 - 14,151,198 shares |
142
|
142
|
||||||
Additional paid-in capital
|
31,603
|
30,121
|
||||||
Retained earnings
|
508,427
|
492,087
|
||||||
Accumulated other comprehensive income
|
32,137
|
9,627
|
||||||
Total Stockholders' Equity
|
572,309
|
531,977
|
||||||
Total Liabilities and Stockholders' Equity
|
$
|
4,871,522
|
$
|
4,676,200
|
THREE MONTHS ENDED
JUNE 30, |
||||||||
2019
|
2018
|
|||||||
(Unaudited)
|
||||||||
INTEREST INCOME
|
||||||||
Loans
|
$
|
55,771
|
$
|
48,219
|
||||
Investment securities and other
|
2,952
|
1,724
|
||||||
TOTAL INTEREST INCOME
|
58,723
|
49,943
|
||||||
INTEREST EXPENSE
|
||||||||
Deposits
|
11,582
|
6,123
|
||||||
Federal Home Loan Bank advances
|
—
|
1,166
|
||||||
Short-term borrowings and repurchase agreements
|
859
|
180
|
||||||
Subordinated debentures issued to capital trust
|
267
|
238
|
||||||
Subordinated notes
|
1,094
|
1,024
|
||||||
TOTAL INTEREST EXPENSE
|
13,802
|
8,731
|
||||||
NET INTEREST INCOME
|
44,921
|
41,212
|
||||||
Provision for Loan Losses
|
1,600
|
1,950
|
||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
43,321
|
39,262
|
||||||
NON-INTEREST INCOME
|
||||||||
Commissions
|
163
|
312
|
||||||
Service charges and ATM fees
|
5,309
|
5,488
|
||||||
Net gains on loan sales
|
376
|
559
|
||||||
Late charges and fees on loans
|
356
|
385
|
||||||
Gain (loss) on derivative interest rate products
|
(44
|
)
|
11
|
|||||
Other income
|
997
|
704
|
||||||
TOTAL NON-INTEREST INCOME
|
7,157
|
7,459
|
||||||
NON-INTEREST EXPENSE
|
||||||||
Salaries and employee benefits
|
15,428
|
14,947
|
||||||
Net occupancy and equipment expense
|
6,449
|
6,298
|
||||||
Postage
|
784
|
834
|
||||||
Insurance
|
662
|
650
|
||||||
Advertising
|
842
|
632
|
||||||
Office supplies and printing
|
226
|
301
|
||||||
Telephone
|
839
|
792
|
||||||
Legal, audit and other professional fees
|
630
|
689
|
||||||
Expense on other real estate and repossessions
|
419
|
2,737
|
||||||
Partnership tax credit investment amortization
|
91
|
91
|
||||||
Acquired deposit intangible asset amortization
|
289
|
412
|
||||||
Other operating expenses
|
1,724
|
1,532
|
||||||
TOTAL NON-INTEREST EXPENSE
|
28,383
|
29,915
|
||||||
INCOME BEFORE INCOME TAXES
|
22,095
|
16,806
|
||||||
Provision for Income Taxes
|
3,720
|
2,967
|
||||||
NET INCOME AND NET INCOME AVAILABLE TO COMMON STOCKHOLDERS
|
$
|
18,375
|
$
|
13,839
|
||||
Basic Earnings Per Common Share
|
$
|
1.29
|
$
|
0.98
|
||||
Diluted Earnings Per Common Share
|
$
|
1.28
|
$
|
0.97
|
||||
Dividends Declared Per Common Share
|
$
|
0.32
|
$
|
0.28
|
SIX MONTHS ENDED
JUNE 30, |
||||||||
2019
|
2018
|
|||||||
(Unaudited)
|
||||||||
INTEREST INCOME
|
||||||||
Loans
|
$
|
110,327
|
$
|
93,384
|
||||
Investment securities and other
|
5,754
|
3,442
|
||||||
TOTAL INTEREST INCOME
|
116,081
|
96,826
|
||||||
INTEREST EXPENSE
|
||||||||
Deposits
|
22,052
|
11,706
|
||||||
Federal Home Loan Bank advances
|
—
|
1,772
|
||||||
Short-term borrowings and repurchase agreements
|
1,780
|
208
|
||||||
Subordinated debentures issued to capital trust
|
534
|
440
|
||||||
Subordinated notes
|
2,189
|
2,049
|
||||||
TOTAL INTEREST EXPENSE
|
26,555
|
16,175
|
||||||
NET INTEREST INCOME
|
89,526
|
80,651
|
||||||
Provision for Loan Losses
|
3,550
|
3,900
|
||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
|
85,976
|
76,751
|
||||||
NON-INTEREST INCOME
|
||||||||
Commissions
|
497
|
560
|
||||||
Service charges and ATM fees
|
10,268
|
10,732
|
||||||
Net gains on loan sales
|
623
|
1,021
|
||||||
Late charges and fees on loans
|
702
|
774
|
||||||
Net realized gains on sales of available-for-sale securities
|
10
|
—
|
||||||
Gain (loss) on derivative interest rate products
|
(68
|
)
|
48
|
|||||
Other income
|
2,575
|
1,259
|
||||||
TOTAL NON-INTEREST INCOME
|
14,607
|
14,394
|
||||||
NON-INTEREST EXPENSE
|
||||||||
Salaries and employee benefits
|
31,068
|
29,570
|
||||||
Net occupancy and equipment expense
|
12,850
|
12,683
|
||||||
Postage
|
1,550
|
1,700
|
||||||
Insurance
|
1,328
|
1,321
|
||||||
Advertising
|
1,368
|
1,303
|
||||||
Office supplies and printing
|
485
|
534
|
||||||
Telephone
|
1,742
|
1,511
|
||||||
Legal, audit and other professional fees
|
1,342
|
1,498
|
||||||
Expense on other real estate and repossessions
|
1,039
|
3,878
|
||||||
Partnership tax credit investment amortization
|
182
|
393
|
||||||
Acquired deposit intangible asset amortization
|
613
|
825
|
||||||
Other operating expenses
|
3,310
|
3,012
|
||||||
TOTAL NON-INTEREST EXPENSE
|
56,877
|
58,228
|
||||||
INCOME BEFORE INCOME TAXES
|
43,706
|
32,917
|
||||||
Provision for Income Taxes
|
7,718
|
5,612
|
||||||
NET INCOME AND NET INCOME AVAILABLE TO COMMON STOCKHOLDERS
|
$
|
35,988
|
$
|
27,305
|
||||
Basic Earnings Per Common Share
|
$
|
2.54
|
$
|
1.93
|
||||
Diluted Earnings Per Common Share
|
$
|
2.52
|
$
|
1.91
|
||||
Dividends Declared Per Common Share
|
$
|
1.39
|
$
|
0.56
|
THREE MONTHS ENDED
JUNE 30, |
||||||||
2019
|
2018
|
|||||||
(Unaudited)
|
||||||||
Net Income
|
$
|
18,375
|
$
|
13,839
|
||||
Unrealized appreciation (depreciation) on available-for-sale securities,
net of taxes (credit) of $1,540 and $(121), for 2019 and 2018, respectively |
5,213
|
(420
|
)
|
|||||
Reclassification adjustment for gains included in net income,
net of taxes of $0 and $0,for 2019 and 2018, respectively |
—
|
—
|
||||||
8,528
|
—
|
|||||||
Comprehensive Income
|
$
|
32,116
|
$
|
13,419
|
SIX MONTHS ENDED
JUNE 30, |
||||||||
2019
|
2018
|
|||||||
(Unaudited)
|
||||||||
Net Income
|
$
|
35,988
|
$
|
27,305
|
||||
Unrealized appreciation (depreciation) on available-for-sale securities,
net of taxes (credit) of $2,419 and $(662), for 2019 and 2018, respectively |
8,190
|
(2,301
|
)
|
|||||
Reclassification adjustment for gains included in net income,
net of taxes of $2 and $0,for 2019 and 2018, respectively |
(8
|
)
|
—
|
|||||
Change in fair value of cash flow hedge, net of taxes of $4,231 and $0,
for 2019 and 2018, respectively |
14,328
|
—
|
||||||
Comprehensive Income
|
$
|
58,498
|
$
|
25,004
|
Accumulated
|
||||||||||||||||||||||||
Other
|
||||||||||||||||||||||||
Common
|
Additional
|
Retained
|
Comprehensive
|
Treasury
|
||||||||||||||||||||
Stock
|
Paid-in Capital
|
Earnings
|
Income (Loss)
|
Stock
|
Total
|
|||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||
Balance, March 31, 2018
|
$
|
141
|
$
|
28,624
|
$
|
451,603
|
$
|
(368
|
)
|
$
|
—
|
$
|
480,000
|
|||||||||||
Net income
|
—
|
—
|
13,839
|
—
|
—
|
13,839
|
||||||||||||||||||
Stock issued under Stock Option
|
||||||||||||||||||||||||
Plan
|
—
|
510
|
—
|
—
|
299
|
809
|
||||||||||||||||||
Common dividends declared,
|
||||||||||||||||||||||||
$0.28 per share
|
—
|
—
|
(3,957
|
)
|
—
|
—
|
(3,957
|
)
|
||||||||||||||||
Other comprehensive gain (loss)
|
—
|
—
|
—
|
(420
|
)
|
—
|
(420
|
)
|
||||||||||||||||
Reclassification of treasury stock
|
||||||||||||||||||||||||
per Maryland law
|
—
|
—
|
299
|
—
|
(299
|
)
|
—
|
|||||||||||||||||
Balance, June 30, 2018
|
$
|
141
|
$
|
29,134
|
$
|
461,784
|
$
|
(788
|
)
|
$
|
—
|
$
|
490,271
|
|||||||||||
Accumulated
|
||||||||||||||||||||||||
Other
|
||||||||||||||||||||||||
Common
|
Additional
|
Retained
|
Comprehensive
|
Treasury
|
||||||||||||||||||||
Stock
|
Paid-in Capital
|
Earnings
|
Income (Loss)
|
Stock
|
Total
|
|||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||
Balance, March 31, 2019
|
$
|
142
|
$
|
30,916
|
$
|
494,181
|
$
|
18,396
|
$
|
—
|
$
|
543,635
|
||||||||||||
Net income
|
—
|
—
|
18,375
|
—
|
—
|
18,375
|
||||||||||||||||||
Stock issued under Stock Option
|
||||||||||||||||||||||||
Plan
|
—
|
687
|
—
|
—
|
415
|
1,102
|
||||||||||||||||||
Common dividends declared,
|
||||||||||||||||||||||||
$0.32 per share
|
—
|
—
|
(4,544
|
)
|
—
|
—
|
(4,544
|
)
|
||||||||||||||||
Purchase of the Company’s
|
||||||||||||||||||||||||
common stock
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Other comprehensive gain
|
—
|
—
|
—
|
13,741
|
—
|
13,741
|
||||||||||||||||||
Reclassification of treasury stock
|
||||||||||||||||||||||||
per Maryland law
|
—
|
—
|
415
|
—
|
(415
|
)
|
—
|
|||||||||||||||||
Balance, June 30, 2019
|
$
|
142
|
$
|
31,603
|
$
|
508,427
|
$
|
32,137
|
$
|
—
|
$
|
572,309
|
||||||||||||
Accumulated
|
||||||||||||||||||||||||
Other
|
||||||||||||||||||||||||
Common
|
Additional
|
Retained
|
Comprehensive
|
Treasury
|
||||||||||||||||||||
Stock
|
Paid-in Capital
|
Earnings
|
Income (Loss)
|
Stock
|
Total
|
|||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||
Balance, January 1, 2018
|
$
|
141
|
$
|
28,203
|
$
|
442,077
|
$
|
1,241
|
$
|
—
|
$
|
471,662
|
||||||||||||
Net income
|
—
|
—
|
27,305
|
—
|
—
|
27,305
|
||||||||||||||||||
Stock issued under Stock Option
|
||||||||||||||||||||||||
Plan
|
—
|
931
|
—
|
—
|
582
|
1,513
|
||||||||||||||||||
Common dividends declared,
|
||||||||||||||||||||||||
$0.56 per share
|
—
|
—
|
(7,908
|
)
|
—
|
—
|
(7,908
|
)
|
||||||||||||||||
Reclassification of stranded tax
|
||||||||||||||||||||||||
effects resulting from change in
|
||||||||||||||||||||||||
Federal income tax rate
|
—
|
—
|
(272
|
)
|
272
|
—
|
—
|
|||||||||||||||||
Other comprehensive gain (loss)
|
—
|
—
|
—
|
(2,301
|
)
|
—
|
(2,301
|
)
|
||||||||||||||||
Reclassification of treasury stock
|
||||||||||||||||||||||||
per Maryland law
|
—
|
—
|
582
|
—
|
(582
|
)
|
—
|
|||||||||||||||||
Balance, June 30, 2018
|
$
|
141
|
$
|
29,134
|
$
|
461,784
|
$
|
(788
|
)
|
$
|
—
|
$
|
490,271
|
|||||||||||
Accumulated
|
||||||||||||||||||||||||
Other
|
||||||||||||||||||||||||
Common
|
Additional
|
Retained
|
Comprehensive
|
Treasury
|
||||||||||||||||||||
Stock
|
Paid-in Capital
|
Earnings
|
Income (Loss)
|
Stock
|
Total
|
|||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||
Balance, January 1, 2019
|
$
|
142
|
$
|
30,121
|
$
|
492,087
|
$
|
9,627
|
$
|
—
|
$
|
531,977
|
||||||||||||
Net income
|
—
|
—
|
35,988
|
—
|
—
|
35,988
|
||||||||||||||||||
Stock issued under Stock Option
|
||||||||||||||||||||||||
Plan
|
—
|
1,482
|
—
|
—
|
892
|
2,374
|
||||||||||||||||||
Common dividends declared,
|
||||||||||||||||||||||||
$1.39 per share
|
—
|
—
|
(19,691
|
)
|
—
|
—
|
(19,691
|
)
|
||||||||||||||||
Purchase of the Company’s
|
||||||||||||||||||||||||
common stock
|
—
|
—
|
—
|
—
|
(849
|
)
|
(849
|
)
|
||||||||||||||||
Other comprehensive gain
|
—
|
—
|
—
|
22,510
|
—
|
22,510
|
||||||||||||||||||
Reclassification of treasury stock
|
||||||||||||||||||||||||
per Maryland law
|
—
|
—
|
43
|
—
|
(43
|
)
|
—
|
|||||||||||||||||
Balance, June 30, 2019
|
$
|
142
|
$
|
31,603
|
$
|
508,427
|
$
|
32,137
|
$
|
—
|
$
|
572,309
|
||||||||||||
SIX MONTHS ENDED
JUNE 30,
|
||||||||
2019
|
2018
|
|||||||
(Unaudited)
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net income
|
$
|
35,988
|
$
|
27,305
|
||||
Proceeds from sales of loans held for sale
|
34,375
|
49,629
|
||||||
Originations of loans held for sale
|
(43,145
|
)
|
(45,218
|
)
|
||||
Items not requiring (providing) cash:
|
||||||||
Depreciation
|
4,631
|
4,569
|
||||||
Amortization
|
1,059
|
1,296
|
||||||
Compensation expense for stock option grants
|
443
|
357
|
||||||
Provision for loan losses
|
3,550
|
3,900
|
||||||
Net gains on loan sales
|
(623
|
)
|
(1,021
|
)
|
||||
Net realized gains on sales of available-for-sale securities
|
(10
|
)
|
—
|
|||||
Net losses on sale of premises and equipment
|
21
|
94
|
||||||
Net losses on sale/write-down of other real estate owned and repossessions
|
161
|
2,184
|
||||||
Accretion of deferred income, premiums, discounts and other
|
(1,990
|
)
|
(1,287
|
)
|
||||
(Gain) loss on derivative interest rate products
|
68
|
(48
|
)
|
|||||
Deferred income taxes
|
578
|
(6,544
|
)
|
|||||
Changes in:
|
||||||||
Interest receivable
|
(903
|
)
|
(111
|
)
|
||||
Prepaid expenses and other assets
|
(2,031
|
)
|
6,084
|
|||||
Accrued expenses and other liabilities
|
4,443
|
1,857
|
||||||
Income taxes refundable/payable
|
2,555
|
7,370
|
||||||
Net cash provided by operating activities
|
39,170
|
50,416
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Net change in loans
|
(83,072
|
)
|
(101,884
|
)
|
||||
Purchase of loans
|
(45,240
|
)
|
(42,179
|
)
|
||||
Purchase of premises and equipment
|
(6,708
|
)
|
(6,054
|
)
|
||||
Proceeds from sale of premises and equipment
|
113
|
23
|
||||||
Proceeds from sale of other real estate owned and repossessions
|
4,537
|
8,856
|
||||||
Capitalized costs on other real estate owned
|
—
|
(143
|
)
|
|||||
Proceeds from sales of available-for-sale securities
|
28,057
|
—
|
||||||
Proceeds from maturities and calls of held-to-maturity securities
|
—
|
130
|
||||||
Proceeds from maturities and calls of available-for-sale securities
|
7,870
|
2,031
|
||||||
Principal reductions on mortgage-backed securities
|
7,402
|
10,530
|
||||||
Purchase of available-for-sale securities
|
(94,558
|
)
|
(6,689
|
)
|
||||
Redemption (purchase) of Federal Home Loan Bank stock
|
1,345
|
(4,496
|
)
|
|||||
Net cash used in investing activities
|
(180,254
|
)
|
(139,875
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Net increase in certificates of deposit
|
139,518
|
13,616
|
||||||
Net increase (decrease) in checking and savings deposits
|
24,040
|
(13,655
|
)
|
|||||
Proceeds from Federal Home Loan Bank advances
|
—
|
1,454,500
|
||||||
Repayments of Federal Home Loan Bank advances
|
—
|
(1,323,000
|
)
|
|||||
Net decrease in short-term borrowings
|
(30,710
|
)
|
(232
|
)
|
||||
Advances from borrowers for taxes and insurance
|
5,458
|
2,638
|
||||||
Dividends paid
|
(19,674
|
)
|
(7,332
|
)
|
||||
Purchase of the Company’s common stock
|
(849
|
)
|
—
|
|||||
Stock options exercised
|
1,931
|
1,156
|
||||||
Net cash provided by financing activities
|
119,714
|
127,691
|
||||||
INCREASES ( DECREASES) IN CASH AND CASH EQUIVALENTS
|
(21,370
|
)
|
38,232
|
|||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
202,742
|
242,253
|
||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
181,372
|
$
|
280,485
|
Three Months Ended June 30,
|
||||||||
2019
|
2018
|
|||||||
(In Thousands, Except Per Share Data)
|
||||||||
Basic:
|
||||||||
Average common shares outstanding
|
14,192
|
14,125
|
||||||
Net income and net income available to common stockholders
|
$
|
18,375
|
$
|
13,839
|
||||
Per common share amount
|
$
|
1.29
|
$
|
0.98
|
||||
Diluted:
|
||||||||
Average common shares outstanding
|
14,192
|
14,125
|
||||||
Net effect of dilutive stock options – based on the treasury
|
||||||||
stock method using average market price
|
122
|
153
|
||||||
Diluted common shares
|
14,314
|
14,278
|
||||||
Net income and net income available to common stockholders
|
$
|
18,375
|
$
|
13,839
|
||||
Per common share amount
|
$
|
1.28
|
$
|
0.97
|
Six Months Ended June 30,
|
||||||||
2019
|
2018
|
|||||||
(In Thousands, Except Per Share Data)
|
||||||||
Basic:
|
||||||||
Average common shares outstanding
|
14,176
|
14,113
|
||||||
Net income and net income available to common stockholders
|
$
|
35,988
|
$
|
27,305
|
||||
Per common share amount
|
$
|
2.54
|
$
|
1.93
|
||||
Diluted:
|
||||||||
Average common shares outstanding
|
14,176
|
14,113
|
||||||
Net effect of dilutive stock options – based on the treasury
|
||||||||
stock method using average market price
|
122
|
153
|
||||||
Diluted common shares
|
14,298
|
14,266
|
||||||
Net income and net income available to common stockholders
|
$
|
35,988
|
$
|
27,305
|
||||
Per common share amount
|
$
|
2.52
|
$
|
1.91
|
June 30, 2019
|
||||||||||||||||||||
Gross
|
Gross
|
Tax
|
||||||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
Equivalent
|
||||||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
Yield
|
||||||||||||||||
(In Thousands)
|
||||||||||||||||||||
AVAILABLE-FOR-SALE SECURITIES:
|
||||||||||||||||||||
Agency mortgage-backed securities
|
$
|
184,302
|
$
|
7,898
|
$
|
623
|
$
|
191,577
|
3.01
|
%
|
||||||||||
Agency collateralized mortgage obligations
|
69,761
|
2,098
|
52
|
71,807
|
3.24
|
|||||||||||||||
States and political subdivisions
|
40,622
|
1,643
|
—
|
42,265
|
4.88
|
|||||||||||||||
$
|
294,685
|
$
|
11,639
|
$
|
675
|
$
|
305,649
|
3.32
|
%
|
December 31, 2018
|
||||||||||||||||||||
Gross
|
Gross
|
Tax
|
||||||||||||||||||
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
Equivalent
|
||||||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
Yield
|
||||||||||||||||
(In Thousands)
|
||||||||||||||||||||
AVAILABLE-FOR-SALE SECURITIES:
|
||||||||||||||||||||
Agency mortgage-backed securities
|
$
|
154,557
|
$
|
1,272
|
$
|
2,571
|
$
|
153,258
|
2.83
|
%
|
||||||||||
Agency collateralized mortgage obligations
|
39,024
|
250
|
14
|
39,260
|
3.18
|
|||||||||||||||
States and political subdivisions
|
50,022
|
1,428
|
—
|
51,450
|
4.81
|
|||||||||||||||
$
|
243,603
|
$
|
2,950
|
$
|
2,585
|
$
|
243,968
|
3.29
|
%
|
Amortized
|
Fair
|
|||||||
Cost
|
Value
|
|||||||
(In Thousands)
|
||||||||
One year or less
|
$
|
—
|
$
|
—
|
||||
After one through five years
|
869
|
947
|
||||||
After five through ten years
|
10,133
|
10,495
|
||||||
After ten years
|
29,620
|
30,823
|
||||||
Securities not due on a single maturity date
|
254,063
|
263,384
|
||||||
$
|
294,685
|
$
|
305,649
|
June 30, 2019
|
||||||||||||||||||||||||
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Description of Securities
|
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||
Agency mortgage-backed securities
|
$
|
1,734
|
$
|
(1
|
)
|
$
|
56,205
|
$
|
(622
|
)
|
$
|
57,939
|
$
|
(623
|
)
|
|||||||||
Agency collateralized mortgage obligations
|
3,624
|
(52
|
)
|
—
|
—
|
3,624
|
(52
|
)
|
||||||||||||||||
$
|
5,358
|
$
|
(53
|
)
|
$
|
56,205
|
$
|
(622
|
)
|
$
|
61,563
|
$
|
(675
|
)
|
December 31, 2018
|
||||||||||||||||||||||||
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Description of Securities
|
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||
Agency mortgage-backed securities
|
$
|
11,255
|
$
|
(82
|
)
|
$
|
74,186
|
$
|
(2,489
|
)
|
$
|
85,441
|
$
|
(2,571
|
)
|
|||||||||
Agency collateralized mortgage obligations
|
9,725
|
(14
|
)
|
—
|
—
|
9,725
|
(14
|
)
|
||||||||||||||||
State and political
|
||||||||||||||||||||||||
subdivisions
|
511
|
—
|
—
|
—
|
511
|
—
|
||||||||||||||||||
$
|
21,491
|
$
|
(96
|
)
|
$
|
74,186
|
$
|
(2,489
|
)
|
$
|
95,677
|
$
|
(2,585
|
)
|
Amounts Reclassified from
Accumulated Other
|
|||||||||
Comprehensive Income
Three Months Ended June 30, |
Affected Line Item in the
|
||||||||
2019
|
2018
|
Statements of Income
|
|||||||
(In Thousands)
|
|||||||||
Unrealized gains on available-
|
Net realized gains on sales of
|
||||||||
for-sale securities
|
$
|
--
|
$
|
--
|
available-for-sale securities
|
||||
(Total reclassified amount before tax)
|
|||||||||
Income Taxes
|
--
|
--
|
Provision for income taxes
|
||||||
Total reclassifications out of accumulated
|
|||||||||
other comprehensive income
|
$
|
--
|
$
|
--
|
Amounts Reclassified from
Accumulated Other
|
|||||||||
Comprehensive Income
Six Months Ended June 30, |
Affected Line Item in the
|
||||||||
2019
|
2018
|
Statements of Income
|
|||||||
(In Thousands)
|
|||||||||
Unrealized gains on available-
|
Net realized gains on sales of
|
||||||||
for-sale securities
|
$
|
10
|
$
|
--
|
available-for-sale securities
|
||||
(Total reclassified amount before tax)
|
|||||||||
Income Taxes
|
(2
|
)
|
--
|
Provision for income taxes
|
|||||
Total reclassifications out of accumulated
|
|||||||||
other comprehensive income
|
$
|
8
|
$
|
--
|
June 30,
|
December 31,
|
|||||||
2019
|
2018
|
|||||||
(In Thousands)
|
||||||||
One- to four-family residential construction
|
$
|
30,255
|
$
|
26,177
|
||||
Subdivision construction
|
12,973
|
13,844
|
||||||
Land development
|
46,032
|
44,492
|
||||||
Commercial construction
|
1,391,158
|
1,417,166
|
||||||
Owner occupied one- to four-family residential
|
322,207
|
276,866
|
||||||
Non-owner occupied one- to four-family residential
|
122,858
|
122,438
|
||||||
Commercial real estate
|
1,446,166
|
1,371,435
|
||||||
Other residential
|
796,341
|
784,894
|
||||||
Commercial business
|
312,965
|
322,118
|
||||||
Industrial revenue bonds
|
13,643
|
13,940
|
||||||
Consumer auto
|
201,061
|
253,528
|
||||||
Consumer other
|
52,077
|
57,350
|
||||||
Home equity lines of credit
|
120,102
|
121,352
|
||||||
Loans acquired and accounted for under ASC 310-30, net of
discounts
|
151,694
|
167,651
|
||||||
5,019,532
|
4,993,251
|
|||||||
Undisbursed portion of loans in process
|
(861,054
|
)
|
(958,441
|
)
|
||||
Allowance for loan losses
|
(39,254
|
)
|
(38,409
|
)
|
||||
Deferred loan fees and gains, net
|
(6,769
|
)
|
(7,400
|
)
|
||||
$
|
4,112,455
|
$
|
3,989,001
|
|||||
Weighted average interest rate
|
5.25
|
%
|
5.16
|
%
|
June 30, 2019
|
||||||||||||||||||||||||||||
Total Loans
|
||||||||||||||||||||||||||||
Total
|
> 90 Days
|
|||||||||||||||||||||||||||
30-59 Days
|
60-89 Days
|
Over
|
Total
|
Loans
|
Past Due and
|
|||||||||||||||||||||||
Past Due
|
Past Due
|
90 Days
|
Past Due
|
Current
|
Receivable
|
Still Accruing
|
||||||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||||||
One- to four-family
|
||||||||||||||||||||||||||||
residential construction
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
30,255
|
$
|
30,255
|
$
|
—
|
||||||||||||||
Subdivision construction
|
44
|
—
|
—
|
44
|
12,929
|
12,973
|
—
|
|||||||||||||||||||||
Land development
|
—
|
72
|
3,556
|
3,628
|
42,404
|
46,032
|
—
|
|||||||||||||||||||||
Commercial construction
|
—
|
—
|
—
|
—
|
1,391,158
|
1,391,158
|
—
|
|||||||||||||||||||||
Owner occupied one- to
|
||||||||||||||||||||||||||||
four-family residential
|
726
|
189
|
999
|
1,914
|
320,293
|
322,207
|
—
|
|||||||||||||||||||||
Non-owner occupied one-
|
||||||||||||||||||||||||||||
to four-family residential
|
170
|
293
|
533
|
996
|
121,862
|
122,858
|
—
|
|||||||||||||||||||||
Commercial real estate
|
1,121
|
954
|
3,675
|
5,750
|
1,440,416
|
1,446,166
|
—
|
|||||||||||||||||||||
Other residential
|
422
|
—
|
—
|
422
|
795,919
|
796,341
|
—
|
|||||||||||||||||||||
Commercial business
|
194
|
36
|
1,359
|
1,589
|
311,376
|
312,965
|
—
|
|||||||||||||||||||||
Industrial revenue bonds
|
—
|
—
|
—
|
—
|
13,643
|
13,643
|
—
|
|||||||||||||||||||||
Consumer auto
|
1,601
|
436
|
661
|
2,698
|
198,363
|
201,061
|
—
|
|||||||||||||||||||||
Consumer other
|
288
|
38
|
252
|
578
|
51,499
|
52,077
|
—
|
|||||||||||||||||||||
Home equity lines of credit
|
284
|
59
|
353
|
696
|
119,406
|
120,102
|
—
|
|||||||||||||||||||||
Loans acquired and accounted for under
|
||||||||||||||||||||||||||||
ASC 310-30,
net of discounts
|
983
|
340
|
6,612
|
7,935
|
143,759
|
151,694
|
—
|
|||||||||||||||||||||
5,833
|
2,417
|
18,000
|
26,250
|
4,993,282
|
5,019,532
|
—
|
||||||||||||||||||||||
Less loans acquired and accounted for under
|
||||||||||||||||||||||||||||
ASC 310-30, net
|
983
|
340
|
6,612
|
7,935
|
143,759
|
151,694
|
—
|
|||||||||||||||||||||
Total
|
$
|
4,850
|
$
|
2,077
|
$
|
11,388
|
$
|
18,315
|
$
|
4,849,523
|
$
|
4,867,838
|
$
|
—
|
December 31, 2018
|
||||||||||||||||||||||||||||
Total Loans
|
||||||||||||||||||||||||||||
Total
|
> 90 Days Past
|
|||||||||||||||||||||||||||
30-59 Days
|
60-89 Days
|
Over 90
|
Total Past
|
Loans
|
Due and
|
|||||||||||||||||||||||
Past Due
|
Past Due
|
Days
|
Due
|
Current
|
Receivable
|
Still Accruing
|
||||||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||||||
One- to four-family
|
||||||||||||||||||||||||||||
residential construction
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
26,177
|
$
|
26,177
|
$
|
—
|
||||||||||||||
Subdivision construction
|
—
|
—
|
—
|
—
|
13,844
|
13,844
|
—
|
|||||||||||||||||||||
Land development
|
13
|
—
|
49
|
62
|
44,430
|
44,492
|
—
|
|||||||||||||||||||||
Commercial construction
|
—
|
—
|
—
|
—
|
1,417,166
|
1,417,166
|
—
|
|||||||||||||||||||||
Owner occupied one- to
|
||||||||||||||||||||||||||||
four-family residential
|
1,431
|
806
|
1,206
|
3,443
|
273,423
|
276,866
|
—
|
|||||||||||||||||||||
Non-owner occupied one-
|
||||||||||||||||||||||||||||
to four-family residential
|
1,142
|
144
|
1,458
|
2,744
|
119,694
|
122,438
|
—
|
|||||||||||||||||||||
Commercial real estate
|
3,940
|
53
|
334
|
4,327
|
1,367,108
|
1,371,435
|
—
|
|||||||||||||||||||||
Other residential
|
—
|
—
|
—
|
—
|
784,894
|
784,894
|
—
|
|||||||||||||||||||||
Commercial business
|
72
|
54
|
1,437
|
1,563
|
320,555
|
322,118
|
—
|
|||||||||||||||||||||
Industrial revenue bonds
|
3
|
—
|
—
|
3
|
13,937
|
13,940
|
—
|
|||||||||||||||||||||
Consumer auto
|
2,596
|
722
|
1,490
|
4,808
|
248,720
|
253,528
|
—
|
|||||||||||||||||||||
Consumer other
|
691
|
181
|
240
|
1,112
|
56,238
|
57,350
|
—
|
|||||||||||||||||||||
Home equity lines of credit
|
229
|
—
|
86
|
315
|
121,037
|
121,352
|
—
|
|||||||||||||||||||||
Loans acquired and accounted for under
|
||||||||||||||||||||||||||||
ASC 310-30,
net of discounts
|
2,195
|
1,416
|
6,827
|
10,438
|
157,213
|
167,651
|
—
|
|||||||||||||||||||||
12,312
|
3,376
|
13,127
|
28,815
|
4,964,436
|
4,993,251
|
—
|
||||||||||||||||||||||
Less loans acquired and accounted for under ASC 310-30, net
|
2,195
|
1,416
|
6,827
|
10,438
|
157,213
|
167,651
|
—
|
|||||||||||||||||||||
Total
|
$
|
10,117
|
$
|
1,960
|
$
|
6,300
|
$
|
18,377
|
$
|
4,807,223
|
$
|
4,825,600
|
$
|
—
|
June 30,
|
December 31,
|
|||||||
2019
|
2018
|
|||||||
(In Thousands)
|
||||||||
One- to four-family residential construction
|
$
|
—
|
$
|
—
|
||||
Subdivision construction
|
—
|
—
|
||||||
Land development
|
3,556
|
49
|
||||||
Commercial construction
|
—
|
—
|
||||||
Owner occupied one- to four-family residential
|
999
|
1,206
|
||||||
Non-owner occupied one- to four-family residential
|
533
|
1,458
|
||||||
Commercial real estate
|
3,675
|
334
|
||||||
Other residential
|
—
|
—
|
||||||
Commercial business
|
1,359
|
1,437
|
||||||
Industrial revenue bonds
|
—
|
—
|
||||||
Consumer auto
|
661
|
1,490
|
||||||
Consumer other
|
252
|
240
|
||||||
Home equity lines of credit
|
353
|
86
|
||||||
Total
|
$
|
11,388
|
$
|
6,300
|
One- to Four-
|
||||||||||||||||||||||||||||
Family
|
||||||||||||||||||||||||||||
Residential and
|
Other
|
Commercial
|
Commercial
|
Commercial
|
||||||||||||||||||||||||
Construction
|
Residential
|
Real Estate
|
Construction
|
Business
|
Consumer
|
Total
|
||||||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||||||
Allowance for loan losses
|
||||||||||||||||||||||||||||
Balance, April 1, 2019
|
$
|
3,036
|
$
|
5,436
|
$
|
20,981
|
$
|
2,515
|
$
|
1,484
|
$
|
5,199
|
$
|
38,651
|
||||||||||||||
Provision (benefit) charged to expense
|
805
|
(1,683
|
)
|
1,382
|
1,145
|
62
|
(111
|
)
|
1,600
|
|||||||||||||||||||
Losses charged off
|
(62
|
)
|
—
|
(7
|
)
|
(189
|
)
|
(25
|
)
|
(1,699
|
)
|
(1,982
|
)
|
|||||||||||||||
Recoveries
|
24
|
—
|
11
|
8
|
157
|
785
|
985
|
|||||||||||||||||||||
Balance, June 30, 2019
|
$
|
3,803
|
$
|
3,753
|
$
|
22,367
|
$
|
3,479
|
$
|
1,678
|
$
|
4,174
|
$
|
39,254
|
||||||||||||||
Balance, January 1, 2019
|
$
|
3,122
|
$
|
4,713
|
$
|
19,803
|
$
|
3,105
|
$
|
1,568
|
$
|
6,098
|
$
|
38,409
|
||||||||||||||
Provision (benefit) charged to expense
|
1,163
|
(960
|
)
|
2,545
|
574
|
(90
|
)
|
318
|
3,550
|
|||||||||||||||||||
Losses charged off
|
(517
|
)
|
—
|
(7
|
)
|
(220
|
)
|
(99
|
)
|
(3,905
|
)
|
(4,748
|
)
|
|||||||||||||||
Recoveries
|
35
|
—
|
26
|
20
|
299
|
1,663
|
2,043
|
|||||||||||||||||||||
Balance, June 30, 2019
|
$
|
3,803
|
$
|
3,753
|
$
|
22,367
|
$
|
3,479
|
$
|
1,678
|
$
|
4,174
|
$
|
39,254
|
||||||||||||||
Ending balance:
|
||||||||||||||||||||||||||||
Individually evaluated for
|
||||||||||||||||||||||||||||
impairment
|
$
|
237
|
$
|
—
|
$
|
555
|
$
|
—
|
$
|
470
|
$
|
155
|
$
|
1,417
|
||||||||||||||
Collectively evaluated for
|
||||||||||||||||||||||||||||
impairment
|
$
|
3,490
|
$
|
3,720
|
$
|
21,645
|
$
|
3,290
|
$
|
1,195
|
$
|
3,992
|
$
|
37,332
|
||||||||||||||
Loans acquired and
|
||||||||||||||||||||||||||||
accounted for under ASC
|
||||||||||||||||||||||||||||
310-30
|
$
|
76
|
$
|
33
|
$
|
167
|
$
|
189
|
$
|
13
|
$
|
27
|
$
|
505
|
||||||||||||||
Loans
|
||||||||||||||||||||||||||||
Individually evaluated for
|
||||||||||||||||||||||||||||
impairment
|
$
|
3,182
|
$
|
—
|
$
|
7,809
|
$
|
3,556
|
$
|
1,451
|
$
|
1,821
|
$
|
17,819
|
||||||||||||||
Collectively evaluated for
|
||||||||||||||||||||||||||||
impairment
|
$
|
485,111
|
$
|
796,341
|
$
|
1,438,357
|
$
|
1,433,634
|
$
|
325,157
|
$
|
371,419
|
$
|
4,850,019
|
||||||||||||||
Loans acquired and
|
||||||||||||||||||||||||||||
accounted for under ASC
|
||||||||||||||||||||||||||||
310-30
|
$
|
84,909
|
$
|
12,448
|
$
|
31,083
|
$
|
4,739
|
$
|
3,674
|
$
|
14,841
|
$
|
151,694
|
One- to Four-
|
||||||||||||||||||||||||||||
Family
|
||||||||||||||||||||||||||||
Residential and
|
Other
|
Commercial
|
Commercial
|
Commercial
|
||||||||||||||||||||||||
Construction
|
Residential
|
Real Estate
|
Construction
|
Business
|
Consumer
|
Total
|
||||||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||||||
Allowance for loan losses
|
||||||||||||||||||||||||||||
Balance April 1, 2018
|
$
|
2,602
|
$
|
3,212
|
$
|
18,062
|
$
|
2,188
|
$
|
3,695
|
$
|
6,551
|
$
|
36,310
|
||||||||||||||
Provision (benefit) charged to expense
|
63
|
364
|
1,297
|
109
|
(454
|
)
|
571
|
1,950
|
||||||||||||||||||||
Losses charged off
|
(27
|
)
|
(75
|
)
|
—
|
(46
|
)
|
(472
|
)
|
(2,112
|
)
|
(2,732
|
)
|
|||||||||||||||
Recoveries
|
89
|
344
|
115
|
144
|
222
|
1,114
|
2,028
|
|||||||||||||||||||||
Balance June 30, 2018
|
$
|
2,727
|
$
|
3,845
|
$
|
19,474
|
$
|
2,395
|
$
|
2,991
|
$
|
6,124
|
$
|
37,556
|
||||||||||||||
Balance January 1, 2018
|
$
|
2,108
|
$
|
2,839
|
$
|
18,639
|
$
|
1,767
|
$
|
3,581
|
$
|
7,558
|
$
|
36,492
|
||||||||||||||
Provision (benefit) charged to expense
|
487
|
969
|
811
|
471
|
28
|
1,134
|
3,900
|
|||||||||||||||||||||
Losses charged off
|
(41
|
)
|
(331
|
)
|
(102
|
)
|
(83
|
)
|
(881
|
)
|
(4,934
|
)
|
(6,372
|
)
|
||||||||||||||
Recoveries
|
173
|
368
|
126
|
240
|
263
|
2,366
|
3,536
|
|||||||||||||||||||||
Balance June 30, 2018
|
$
|
2,727
|
$
|
3,845
|
$
|
19,474
|
$
|
2,395
|
$
|
2,991
|
$
|
6,124
|
$
|
37,556
|
One- to Four-
|
||||||||||||||||||||||||||||
Family
|
||||||||||||||||||||||||||||
Residential and
|
Other
|
Commercial
|
Commercial
|
Commercial
|
||||||||||||||||||||||||
Construction
|
Residential
|
Real Estate
|
Construction
|
Business
|
Consumer
|
Total
|
||||||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||||||
Allowance for loan losses
|
||||||||||||||||||||||||||||
Individually evaluated for
|
||||||||||||||||||||||||||||
impairment
|
$
|
694
|
$
|
—
|
$
|
613
|
$
|
—
|
$
|
309
|
$
|
425
|
$
|
2,041
|
||||||||||||||
Collectively evaluated for
|
||||||||||||||||||||||||||||
impairment
|
$
|
2,392
|
$
|
4,681
|
$
|
18,958
|
$
|
3,029
|
$
|
1,247
|
$
|
5,640
|
$
|
35,947
|
||||||||||||||
Loans acquired and
|
||||||||||||||||||||||||||||
accounted for under ASC
|
||||||||||||||||||||||||||||
310-30
|
$
|
36
|
$
|
32
|
$
|
232
|
$
|
76
|
$
|
12
|
$
|
33
|
$
|
421
|
||||||||||||||
Loans
|
||||||||||||||||||||||||||||
Individually evaluated for
|
||||||||||||||||||||||||||||
impairment
|
$
|
6,116
|
$
|
—
|
$
|
3,501
|
$
|
14
|
$
|
1,844
|
$
|
2,464
|
$
|
13,939
|
||||||||||||||
Collectively evaluated for
|
||||||||||||||||||||||||||||
impairment
|
$
|
433,209
|
$
|
784,894
|
$
|
1,367,934
|
$
|
1,461,644
|
$
|
334,214
|
$
|
429,766
|
$
|
4,811,661
|
||||||||||||||
Loans acquired and
|
||||||||||||||||||||||||||||
accounted for under ASC
|
||||||||||||||||||||||||||||
310-30
|
$
|
93,841
|
$
|
12,790
|
$
|
33,620
|
$
|
4,093
|
$
|
4,347
|
$
|
18,960
|
$
|
167,651
|
• |
The one- to four-family residential and construction segment includes the one- to four-family residential construction,
subdivision construction, owner occupied one- to four-family residential and non-owner occupied one- to four-family residential classes
|
• |
The other residential segment corresponds to the other residential class
|
• |
• |
The commercial construction segment includes the land development and commercial construction classes
|
• |
The commercial business segment corresponds to the commercial business class
|
• |
The consumer segment includes the consumer auto, consumer other and home equity lines of credit classes
|
June 30, 2019
|
||||||||||||
Unpaid
|
||||||||||||
Recorded
|
Principal
|
Specific
|
||||||||||
Balance
|
Balance
|
Allowance
|
||||||||||
(In Thousands) |
||||||||||||
One- to four-family residential construction
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Subdivision construction
|
261
|
261
|
100
|
|||||||||
Land development
|
3,556
|
3,588
|
—
|
|||||||||
Commercial construction
|
—
|
—
|
—
|
|||||||||
Owner occupied one- to four-family residential
|
2,157
|
2,434
|
114
|
|||||||||
Non-owner occupied one- to four-family residential
|
764
|
944
|
22
|
|||||||||
Commercial real estate
|
7,809
|
7,834
|
555
|
|||||||||
Other residential
|
—
|
—
|
—
|
|||||||||
Commercial business
|
1,451
|
1,918
|
470
|
|||||||||
Industrial revenue bonds
|
—
|
—
|
—
|
|||||||||
Consumer auto
|
1,040
|
1,230
|
133
|
|||||||||
Consumer other
|
417
|
651
|
20
|
|||||||||
Home equity lines of credit
|
364
|
380
|
3
|
|||||||||
Total
|
$
|
17,819
|
$
|
19,240
|
$
|
1,417
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30, 2019
|
June 30, 2019
|
|||||||||||||||
Average
|
Average
|
|||||||||||||||
Investment
|
Interest
|
Investment
|
Interest
|
|||||||||||||
in Impaired
|
Income
|
in Impaired
|
Income
|
|||||||||||||
Loans
|
Recognized
|
Loans
|
Recognized
|
|||||||||||||
(In Thousands)
|
||||||||||||||||
One- to four-family residential construction
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||
Subdivision construction
|
280
|
3
|
293
|
5
|
||||||||||||
Land development
|
1,189
|
99
|
601
|
99
|
||||||||||||
Commercial construction
|
—
|
—
|
—
|
—
|
||||||||||||
Owner occupied one- to four-family residential
|
2,839
|
20
|
3,097
|
57
|
||||||||||||
Non-owner occupied one- to four-family residential
|
815
|
6
|
1,296
|
18
|
||||||||||||
Commercial real estate
|
6,349
|
86
|
5,612
|
136
|
||||||||||||
Other residential
|
—
|
—
|
—
|
—
|
||||||||||||
Commercial business
|
1,626
|
26
|
1,700
|
58
|
||||||||||||
Industrial revenue bonds
|
—
|
—
|
—
|
—
|
||||||||||||
Consumer auto
|
1,088
|
18
|
1,240
|
43
|
||||||||||||
Consumer other
|
401
|
11
|
432
|
22
|
||||||||||||
Home equity lines of credit
|
290
|
10
|
254
|
17
|
||||||||||||
Total
|
$
|
14,877
|
$
|
279
|
$
|
14,525
|
$
|
455
|
At or for the Year Ended December 31, 2018
|
||||||||||||||||||||
Average
|
||||||||||||||||||||
Unpaid
|
Investment
|
Interest
|
||||||||||||||||||
Recorded
|
Principal
|
Specific
|
in Impaired
|
Income
|
||||||||||||||||
Balance
|
Balance
|
Allowance
|
Loans
|
Recognized
|
||||||||||||||||
(In Thousands)
|
||||||||||||||||||||
One- to four-family residential construction
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||
Subdivision construction
|
318
|
318
|
105
|
321
|
17
|
|||||||||||||||
Land development
|
14
|
18
|
—
|
14
|
1
|
|||||||||||||||
Commercial construction
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Owner occupied one- to four-family residential
|
3,576
|
3,926
|
285
|
3,406
|
197
|
|||||||||||||||
Non-owner occupied one- to four-family
residential
|
2,222
|
2,519
|
304
|
2,870
|
158
|
|||||||||||||||
Commercial real estate
|
3,501
|
3,665
|
613
|
6,216
|
337
|
|||||||||||||||
Other residential
|
—
|
—
|
—
|
1,026
|
20
|
|||||||||||||||
Commercial business
|
1,844
|
2,207
|
309
|
2,932
|
362
|
|||||||||||||||
Industrial revenue bonds
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||
Consumer auto
|
1,874
|
2,114
|
336
|
2,069
|
167
|
|||||||||||||||
Consumer other
|
479
|
684
|
72
|
738
|
59
|
|||||||||||||||
Home equity lines of credit
|
111
|
128
|
17
|
412
|
28
|
|||||||||||||||
Total
|
$
|
13,939
|
$
|
15,579
|
$
|
2,041
|
$
|
20,004
|
$
|
1,346
|
June 30, 2018
|
||||||||||||
Unpaid
|
||||||||||||
Recorded
|
Principal
|
Specific
|
||||||||||
Balance
|
Balance
|
Allowance
|
||||||||||
(In Thousands) |
||||||||||||
One- to four-family residential construction
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Subdivision construction
|
335
|
357
|
110
|
|||||||||
Land development
|
15
|
18
|
—
|
|||||||||
Commercial construction
|
—
|
—
|
—
|
|||||||||
Owner occupied one- to four-family residential
|
3,261
|
3,579
|
284
|
|||||||||
Non-owner occupied one- to four-family residential
|
3,144
|
3,465
|
343
|
|||||||||
Commercial real estate
|
8,313
|
8,468
|
220
|
|||||||||
Other residential
|
1,015
|
1,015
|
—
|
|||||||||
Commercial business
|
3,350
|
4,754
|
1,422
|
|||||||||
Industrial revenue bonds
|
—
|
—
|
—
|
|||||||||
Consumer auto
|
2,033
|
2,228
|
369
|
|||||||||
Consumer other
|
784
|
1,007
|
118
|
|||||||||
Home equity lines of credit
|
513
|
553
|
154
|
|||||||||
Total
|
$
|
22,763
|
$
|
25,444
|
$
|
3,020
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30, 2018
|
June 30, 2018
|
|||||||||||||||
Average
|
Average
|
|||||||||||||||
Investment
|
Interest
|
Investment
|
Interest
|
|||||||||||||
in Impaired
|
Income
|
in Impaired
|
Income
|
|||||||||||||
Loans
|
Recognized
|
Loans
|
Recognized
|
|||||||||||||
(In Thousands)
|
||||||||||||||||
One- to four-family residential construction
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||
Subdivision construction
|
338
|
2
|
354
|
8
|
||||||||||||
Land development
|
15
|
—
|
15
|
—
|
||||||||||||
Commercial construction
|
—
|
—
|
—
|
—
|
||||||||||||
Owner occupied one- to four-family residential
|
3,272
|
44
|
3,283
|
89
|
||||||||||||
Non-owner occupied one- to four-family residential
|
3,225
|
38
|
3,331
|
92
|
||||||||||||
Commercial real estate
|
7,391
|
145
|
7,328
|
223
|
||||||||||||
Other residential
|
1,017
|
10
|
1,714
|
20
|
||||||||||||
Commercial business
|
3,559
|
258
|
3,625
|
289
|
||||||||||||
Industrial revenue bonds
|
—
|
—
|
—
|
—
|
||||||||||||
Consumer auto
|
2,034
|
40
|
2,247
|
81
|
||||||||||||
Consumer other
|
879
|
18
|
874
|
37
|
||||||||||||
Home equity lines of credit
|
528
|
9
|
548
|
28
|
||||||||||||
Total
|
$
|
22,258
|
$
|
564
|
$
|
23,319
|
$
|
867
|
Three Months Ended June 30, 2019
|
||||||||||||||||
Total
|
||||||||||||||||
Interest Only
|
Term
|
Combination
|
Modification
|
|||||||||||||
(In Thousands)
|
||||||||||||||||
Consumer
|
$
|
—
|
$
|
52
|
$
|
—
|
$
|
52
|
||||||||
Three Months Ended June 30, 2018
|
||||||||||||||||
Total
|
||||||||||||||||
Interest Only
|
Term
|
Combination
|
Modification
|
|||||||||||||
(In Thousands)
|
||||||||||||||||
Consumer
|
$
|
—
|
$
|
287
|
$
|
—
|
$
|
287
|
||||||||
Six Months Ended June 30, 2019
|
||||||||||||||||
Total
|
||||||||||||||||
Interest Only
|
Term
|
Combination
|
Modification
|
|||||||||||||
(In Thousands)
|
||||||||||||||||
Consumer
|
$
|
—
|
$
|
79
|
$
|
—
|
$
|
79
|
||||||||
Six Months Ended June 30, 2018
|
||||||||||||||||
Total
|
||||||||||||||||
Interest Only
|
Term
|
Combination
|
Modification
|
|||||||||||||
(In Thousands)
|
||||||||||||||||
Mortgage loans on real estate:
|
||||||||||||||||
One- to four-family residential
|
$
|
1,348
|
$
|
—
|
$
|
—
|
$
|
1,348
|
||||||||
Consumer
|
—
|
439
|
—
|
439
|
||||||||||||
$
|
1,348
|
$
|
439
|
$
|
—
|
$
|
1,787
|
June 30, 2019
|
||||||||||||||||||||||||
Special
|
||||||||||||||||||||||||
Satisfactory
|
Watch
|
Mention
|
Substandard
|
Doubtful
|
Total
|
|||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||
One- to four-family residential
|
||||||||||||||||||||||||
construction
|
$
|
30,255
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
30,255
|
||||||||||||
Subdivision construction
|
12,973
|
—
|
—
|
—
|
—
|
12,973
|
||||||||||||||||||
Land development
|
42,446
|
30
|
—
|
3,556
|
—
|
46,032
|
||||||||||||||||||
Commercial construction
|
1,391,158
|
—
|
—
|
—
|
—
|
1,391,158
|
||||||||||||||||||
Owner occupied one- to four-
|
||||||||||||||||||||||||
family residential
|
320,368
|
—
|
—
|
1,839
|
—
|
322,207
|
||||||||||||||||||
Non-owner occupied one- to
|
||||||||||||||||||||||||
four-family residential
|
121,952
|
373
|
—
|
533
|
—
|
122,858
|
||||||||||||||||||
Commercial real estate
|
1,407,401
|
31,280
|
—
|
7,485
|
—
|
1,446,166
|
||||||||||||||||||
Other residential
|
796,341
|
—
|
—
|
—
|
—
|
796,341
|
||||||||||||||||||
Commercial business
|
306,808
|
4,762
|
—
|
1,395
|
—
|
312,965
|
||||||||||||||||||
Industrial revenue bonds
|
13,643
|
—
|
—
|
—
|
—
|
13,643
|
||||||||||||||||||
Consumer auto
|
200,146
|
77
|
—
|
838
|
—
|
201,061
|
||||||||||||||||||
Consumer other
|
51,580
|
103
|
—
|
394
|
—
|
52,077
|
||||||||||||||||||
Home equity lines of credit
|
119,650
|
99
|
—
|
353
|
—
|
120,102
|
||||||||||||||||||
Loans acquired and accounted
|
||||||||||||||||||||||||
for under ASC 310-30,
|
||||||||||||||||||||||||
net of discounts
|
151,173
|
—
|
—
|
521
|
—
|
151,694
|
||||||||||||||||||
Total
|
$
|
4,965,894
|
$
|
36,724
|
$
|
—
|
$
|
16,914
|
$
|
—
|
$
|
5,019,532
|
December 31, 2018
|
||||||||||||||||||||||||
Special
|
||||||||||||||||||||||||
Satisfactory
|
Watch
|
Mention
|
Substandard
|
Doubtful
|
Total
|
|||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||
One- to four-family residential
|
||||||||||||||||||||||||
construction
|
$
|
25,803
|
$
|
374
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
26,177
|
||||||||||||
Subdivision construction
|
12,077
|
1,718
|
—
|
49
|
—
|
13,844
|
||||||||||||||||||
Land development
|
39,892
|
4,600
|
—
|
—
|
—
|
44,492
|
||||||||||||||||||
Commercial construction
|
1,417,166
|
—
|
—
|
—
|
—
|
1,417,166
|
||||||||||||||||||
Owner occupied one- to-four-
|
||||||||||||||||||||||||
family residential
|
274,661
|
43
|
—
|
2,162
|
—
|
276,866
|
||||||||||||||||||
Non-owner occupied one- to-
|
||||||||||||||||||||||||
four-family residential
|
119,951
|
941
|
—
|
1,546
|
—
|
122,438
|
||||||||||||||||||
Commercial real estate
|
1,357,987
|
11,061
|
—
|
2,387
|
—
|
1,371,435
|
||||||||||||||||||
Other residential
|
784,393
|
501
|
—
|
—
|
—
|
784,894
|
||||||||||||||||||
Commercial business
|
315,518
|
5,163
|
—
|
1,437
|
—
|
322,118
|
||||||||||||||||||
Industrial revenue bonds
|
13,940
|
—
|
—
|
—
|
—
|
13,940
|
||||||||||||||||||
Consumer auto
|
251,824
|
116
|
—
|
1,588
|
—
|
253,528
|
||||||||||||||||||
Consumer other
|
56,859
|
157
|
—
|
334
|
—
|
57,350
|
||||||||||||||||||
Home equity lines of credit
|
121,134
|
118
|
—
|
100
|
—
|
121,352
|
||||||||||||||||||
Loans acquired and accounted
|
||||||||||||||||||||||||
for under ASC 310-30,
|
||||||||||||||||||||||||
net of discounts
|
167,632
|
—
|
—
|
19
|
—
|
167,651
|
||||||||||||||||||
Total
|
$
|
4,958,837
|
$
|
24,792
|
$
|
—
|
$
|
9,622
|
$
|
—
|
$
|
4,993,251
|
Sun Security
|
||||||||||||||||||||
TeamBank
|
Vantus Bank
|
Bank
|
InterBank
|
Valley Bank
|
||||||||||||||||
(In Thousands)
|
||||||||||||||||||||
June 30, 2019
|
||||||||||||||||||||
Gross loans receivable
|
$
|
9,347
|
$
|
12,096
|
$
|
19,266
|
$
|
73,696
|
$
|
50,488
|
||||||||||
Balance of accretable discount due to change in expected losses
|
(190
|
)
|
(32
|
)
|
(269
|
)
|
(2,691
|
)
|
(1,832
|
)
|
||||||||||
Net carrying value to loans receivable
|
(9,123
|
)
|
(11,834
|
)
|
(18,555
|
)
|
(64,863
|
)
|
(46,769
|
)
|
||||||||||
Expected loss remaining
|
$
|
34
|
$
|
230
|
$
|
442
|
$
|
6,142
|
$
|
1,887
|
||||||||||
December 31, 2018
|
||||||||||||||||||||
Gross loans receivable
|
$
|
10,602
|
$
|
14,097
|
$
|
21,171
|
$
|
85,205
|
$
|
53,470
|
||||||||||
Balance of accretable discount due to change in expected losses
|
(399
|
)
|
(58
|
)
|
(342
|
)
|
(1,695
|
)
|
(169
|
)
|
||||||||||
Net carrying value to loans receivable
|
(10,106
|
)
|
(13,809
|
)
|
(20,171
|
)
|
(74,436
|
)
|
(49,124
|
)
|
||||||||||
Expected loss remaining
|
$
|
97
|
$
|
230
|
$
|
658
|
$
|
9,074
|
$
|
4,177
|
||||||||||
Three Months Ended
|
Three Months Ended
|
|||||||||
June 30, 2019
|
June 30, 2018
|
|||||||||
(In Thousands, Except Per Share Data
|
||||||||||
and Basis Points Data)
|
||||||||||
Impact on net interest income/
|
||||||||||
net interest margin (in basis points)
|
$
|
1,399
|
12 bps
|
$
|
1,070
|
10 bps
|
||||
Net impact to pre-tax income
|
$
|
1,399
|
$
|
1,070
|
||||||
Net impact net of taxes
|
$
|
1,080
|
$
|
831
|
||||||
Impact to diluted earnings per share
|
$
|
0.08
|
$
|
0.06
|
Six Months Ended
|
Six Months Ended
|
|||||||||
June 30, 2019
|
June 30, 2018
|
|||||||||
(In Thousands, Except Per Share Data
|
||||||||||
and Basis Points Data)
|
||||||||||
Impact on net interest income/
|
||||||||||
net interest margin (in basis points)
|
$
|
2,911
|
13 bps
|
$
|
2,227
|
11 bps
|
||||
Net impact to pre-tax income
|
$
|
2,911
|
$
|
2,227
|
||||||
Net impact net of taxes
|
$
|
2,247
|
$
|
1,729
|
||||||
Impact to diluted earnings per share
|
$
|
0.16
|
$
|
0.12
|
Sun Security
|
||||||||||||||||||||
TeamBank
|
Vantus Bank
|
Bank
|
InterBank
|
Valley Bank
|
||||||||||||||||
(In Thousands)
|
||||||||||||||||||||
Balance, April 1, 2019
|
$
|
1,399
|
$
|
1,302
|
$
|
2,444
|
$
|
7,948
|
$
|
4,329
|
||||||||||
Accretion
|
(180
|
)
|
(261
|
)
|
(340
|
)
|
(1,951
|
)
|
(1,132
|
)
|
||||||||||
Change in expected
|
||||||||||||||||||||
accretable yield(1)
|
131
|
186
|
(245
|
)
|
2,468
|
2,347
|
||||||||||||||
Balance, June 30, 2019
|
$
|
1,350
|
$
|
1,227
|
$
|
1,859
|
$
|
8,465
|
$
|
5,544
|
||||||||||
Balance, April 1, 2018
|
$
|
1,827
|
$
|
1,755
|
$
|
2,069
|
$
|
6,904
|
$
|
3,416
|
||||||||||
Accretion
|
(215
|
)
|
(338
|
)
|
(424
|
)
|
(1,827
|
)
|
(1,066
|
)
|
||||||||||
Change in expected
|
||||||||||||||||||||
accretable yield(1)
|
130
|
235
|
410
|
833
|
624
|
|||||||||||||||
Balance, June 30, 2018
|
$
|
1,742
|
$
|
1,652
|
$
|
2,055
|
$
|
5,910
|
$
|
2,974
|
(1)
|
Represents increases (decreases) in estimated cash flows expected to be received from the acquired loan pools, partially
due to lower estimated credit losses. The amounts also include changes in expected accretion of the loan pools for TeamBank, Vantus Bank, Sun Security Bank, InterBank and Valley Bank for the three months ended June 30, 2019, totaling
$68,000, $186,000, $(336,000), $468,000 and $839,000, respectively, and for the three months ended June 30, 2018, totaling $115,000, $235,000, $236,000, $518,000 and $404,000, respectively.
|
Sun Security
|
||||||||||||||||||||
TeamBank
|
Vantus Bank
|
Bank
|
InterBank
|
Valley Bank
|
||||||||||||||||
(In Thousands)
|
||||||||||||||||||||
Balance, January 1, 2019
|
$
|
1,356
|
$
|
1,432
|
$
|
2,242
|
$
|
4,994
|
$
|
3,063
|
||||||||||
Accretion
|
(615
|
)
|
(478
|
)
|
(781
|
)
|
(3,979
|
)
|
(1,985
|
)
|
||||||||||
Change in expected
|
||||||||||||||||||||
accretable yield(1)
|
609
|
273
|
398
|
7,450
|
4,466
|
|||||||||||||||
Balance, June 30, 2019
|
$
|
1,350
|
$
|
1,227
|
$
|
1,859
|
$
|
8,465
|
$
|
5,544
|
||||||||||
Balance, January 1, 2018
|
$
|
2,071
|
$
|
1,850
|
$
|
2,901
|
$
|
5,074
|
$
|
2,695
|
||||||||||
Accretion
|
(442
|
)
|
(617
|
)
|
(854
|
)
|
(3,650
|
)
|
(2,197
|
)
|
||||||||||
Change in expected
|
||||||||||||||||||||
accretable yield(1)
|
113
|
419
|
8
|
4,486
|
2,476
|
|||||||||||||||
Balance, June 30, 2018
|
$
|
1,742
|
$
|
1,652
|
$
|
2,055
|
$
|
5,910
|
$
|
2,974
|
(1)
|
Represents increases in estimated cash flows expected to be received from the acquired loan pools, partially due to lower
estimated credit losses. The amounts also include changes in expected accretion of the loan pools for TeamBank, Vantus Bank, Sun Security Bank, InterBank and Valley Bank for the six months ended June 30, 2019, totaling $546,000, $273,000,
$247,000, $4.6 million and $2.2 million, respectively, and for the six months ended June 30, 2018, totaling $98,000, $419,000, $(167,000), $2.9 million and $1.7 million, respectively.
|
June 30,
|
December 31,
|
|||||||
2019
|
2018
|
|||||||
(In Thousands)
|
||||||||
Foreclosed assets held for sale and repossessions
|
||||||||
One- to four-family construction
|
$
|
—
|
$
|
—
|
||||
Subdivision construction
|
918
|
1,092
|
||||||
Land development
|
2,584
|
3,191
|
||||||
Commercial construction
|
—
|
—
|
||||||
One- to four-family residential
|
—
|
269
|
||||||
Other residential
|
—
|
—
|
||||||
Commercial real estate
|
—
|
—
|
||||||
Commercial business
|
—
|
—
|
||||||
Consumer
|
999
|
928
|
||||||
4,501
|
5,480
|
|||||||
Foreclosed assets acquired through FDIC-assisted
|
||||||||
transactions, net of discounts
|
1,301
|
1,401
|
||||||
Foreclosed assets held for sale and repossessions, net
|
5,802
|
6,881
|
||||||
Other real estate owned not acquired through foreclosure
|
1,305
|
1,559
|
||||||
Other real estate owned and repossessions
|
$
|
7,107
|
$
|
8,440
|
Three Months Ended
|
||||||||
June 30,
|
||||||||
2019
|
2018
|
|||||||
(In Thousands)
|
||||||||
Net gains on sales of other real estate owned and
repossessions
|
$
|
(244
|
)
|
$
|
(977
|
)
|
||
Valuation write-downs
|
197
|
2,757
|
||||||
Operating expenses, net of rental income
|
466
|
957
|
||||||
$
|
419
|
$
|
2,737
|
Six Months Ended
|
||||||||
June 30,
|
||||||||
2019
|
2018
|
|||||||
(In Thousands)
|
||||||||
Net gains on sales of other real estate owned and
repossessions
|
$
|
(410
|
)
|
$
|
(1,449
|
)
|
||
Valuation write-downs
|
444
|
3,373
|
||||||
Operating expenses, net of rental income
|
1,005
|
1,954
|
||||||
$
|
1,039
|
$
|
3,878
|
June 30,
|
December 31,
|
|||||||
2019
|
2018
|
|||||||
(In Thousands)
|
||||||||
Land
|
$
|
40,576
|
$
|
40,508
|
||||
Buildings and improvements
|
95,698
|
95,039
|
||||||
Furniture, fixtures and equipment
|
57,682
|
54,327
|
||||||
Operating leases right of use asset
|
9,106
|
—
|
||||||
203,062
|
189,874
|
|||||||
Less accumulated depreciation
|
59,589
|
57,450
|
||||||
$
|
143,473
|
$
|
132,424
|
At or For the
|
At or For the
|
|||||||
Three Months Ended
|
Six Months Ended
|
|||||||
June 30, 2019
|
June 30, 2019
|
|||||||
(In Thousands)
|
||||||||
Statement of Financial
Condition
|
||||||||
Operating leases right of use asset
|
$
|
9,106
|
$
|
9,106
|
||||
Operating leases liability
|
$
|
9,153
|
$
|
9,153
|
||||
Statement of Income
|
||||||||
Operating lease costs classified as occupancy and equipment expense
|
$
|
371
|
$
|
747
|
||||
(includes short-term lease costs and amortization of right of use asset)
|
||||||||
Supplemental Cash Flow
Information
|
||||||||
Cash paid for amounts included in the measurement of lease liabilities:
|
||||||||
Operating cash flows from operating leases
|
$
|
351
|
$
|
701
|
||||
Right of use assets obtained in exchange for lease obligations:
|
||||||||
Operating leases
|
$
|
9,538
|
||||||
2019
|
$
|
597
|
||
2020
|
1,132
|
|||
2021
|
1,148
|
|||
2022
|
1,131
|
|||
2023
|
1,082
|
|||
2024
|
956
|
|||
Thereafter
|
5,026
|
|||
Future lease payments expected
|
11,072
|
|||
Less interest portion of lease payments
|
(1,919
|
)
|
||
Lease liability
|
$
|
9,153
|
June 30,
|
December 31,
|
|||||||
2019
|
2018
|
|||||||
(In Thousands)
|
||||||||
Time Deposits:
|
||||||||
0.00% - 0.99%
|
$
|
128,479
|
$
|
150,656
|
||||
1.00% - 1.99%
|
269,123
|
511,873
|
||||||
2.00% - 2.99%
|
1,257,086
|
857,973
|
||||||
3.00% - 3.99%
|
75,147
|
69,793
|
||||||
4.00% - 4.99%
|
1,065
|
1,116
|
||||||
Total time deposits (2.25% - 1.98%)
|
1,730,900
|
1,591,411
|
||||||
Non-interest-bearing demand deposits
|
667,732
|
661,061
|
||||||
Interest-bearing demand and savings deposits (0.51% - 0.46%)
|
1,489,904
|
1,472,535
|
||||||
Total Deposits
|
$
|
3,888,536
|
$
|
3,725,007
|
June 30, 2019
|
December 31, 2018
|
|||||||
(In Thousands)
|
||||||||
Notes payable – Community Development Equity Funds
|
$
|
1,316
|
$
|
1,625
|
||||
Other interest-bearing liabilities
|
30,820
|
13,100
|
||||||
Overnight borrowings from the Federal Home Loan Bank
|
136,500
|
178,000
|
||||||
Securities sold under reverse repurchase agreements
|
98,632
|
105,253
|
||||||
$
|
267,268
|
$
|
297,978
|
June 30,
2019 |
December 31,
2018 |
|||||||
Overnight and
|
Overnight and
|
|||||||
Continuous
|
Continuous
|
|||||||
(In Thousands)
|
||||||||
Mortgage-backed securities – GNMA, FNMA, FHLMC
|
$
|
98,632
|
$
|
105,253
|
||||
June 30,
2019 |
December 31,
2018 |
|||||||
(In Thousands)
|
||||||||
Subordinated notes
|
$
|
75,000
|
$
|
75,000
|
||||
Less: unamortized debt issuance costs
|
941
|
1,158
|
||||||
$
|
74,059
|
$
|
73,842
|
Three Months Ended June 30,
|
||||||||
2019
|
2018
|
|||||||
Tax at statutory rate
|
21.0
|
%
|
21.0
|
%
|
||||
Nontaxable interest and dividends
|
(0.5
|
)
|
(0.8
|
)
|
||||
Tax credits
|
(4.2
|
)
|
(3.6
|
)
|
||||
State taxes
|
1.2
|
1.2
|
||||||
Other
|
(0.7
|
)
|
(0.1
|
)
|
||||
16.8
|
%
|
17.7
|
%
|
Six Months Ended June 30,
|
||||||||
2019
|
2018
|
|||||||
Tax at statutory rate
|
21.0
|
%
|
21.0
|
%
|
||||
Nontaxable interest and dividends
|
(0.5
|
)
|
(0.9
|
)
|
||||
Tax credits
|
(4.4
|
)
|
(4.0
|
)
|
||||
State taxes
|
1.3
|
1.2
|
||||||
Other
|
0.3
|
(0.3
|
)
|
|||||
17.7
|
%
|
17.0
|
%
|
• |
Quoted prices in active markets for identical assets or liabilities (Level 1): Inputs that are quoted unadjusted prices
in active markets for identical assets that the Company has the ability to access at the measurement date. An active market for the asset is a market in which transactions for the asset or liability occur with sufficient frequency and
volume to provide pricing information on an ongoing basis.
|
• |
Significant unobservable inputs (Level 3): Inputs that reflect assumptions of a source independent of the reporting entity or the reporting entity's own assumptions that are supported by little or
no market activity or observable inputs.
|
Fair value measurements using
|
||||||||||||||||
Quoted prices
|
||||||||||||||||
in active
|
||||||||||||||||
markets
|
Other
|
Significant
|
||||||||||||||
for identical
|
observable
|
unobservable
|
||||||||||||||
assets
|
inputs
|
inputs
|
||||||||||||||
Fair value
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
(In Thousands)
|
||||||||||||||||
June 30, 2019
|
||||||||||||||||
Agency mortgage-backed securities
|
$
|
191,577
|
$
|
—
|
$
|
191,577
|
$
|
—
|
||||||||
Agency collateralized mortgage obligations
|
71,807
|
—
|
71,807
|
—
|
||||||||||||
States and political subdivisions
|
42,265
|
—
|
42,265
|
—
|
||||||||||||
Interest rate derivative asset
|
31,855
|
—
|
31,855
|
—
|
||||||||||||
Interest rate derivative liability
|
(1,281
|
)
|
—
|
(1,281
|
)
|
—
|
||||||||||
December 31, 2018
|
||||||||||||||||
Agency mortgage-backed securities
|
$
|
153,258
|
$
|
—
|
$
|
153,258
|
$
|
—
|
||||||||
Agency collateralized mortgage obligations
|
39,260
|
—
|
39,260
|
—
|
||||||||||||
States and political subdivisions
|
51,450
|
—
|
51,450
|
—
|
||||||||||||
Interest rate derivative asset
|
12,800
|
—
|
12,800
|
—
|
||||||||||||
Interest rate derivative liability
|
(716
|
)
|
—
|
(716
|
)
|
—
|
Fair Value Measurements Using
|
||||||||||||||||
Quoted prices
|
||||||||||||||||
in active
|
||||||||||||||||
markets
|
Other
|
Significant
|
||||||||||||||
for identical
|
observable
|
unobservable
|
||||||||||||||
assets
|
inputs
|
inputs
|
||||||||||||||
Fair value
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
(In Thousands)
|
||||||||||||||||
June 30, 2019
|
||||||||||||||||
Impaired loans
|
$
|
733
|
$
|
—
|
$
|
—
|
$
|
733
|
||||||||
Foreclosed assets held for sale
|
$
|
851
|
$
|
—
|
$
|
—
|
$
|
851
|
||||||||
December 31, 2018
|
||||||||||||||||
Impaired loans
|
$
|
2,805
|
$
|
—
|
$
|
—
|
$
|
2,805
|
||||||||
Foreclosed assets held for sale
|
$
|
1,776
|
$
|
—
|
$
|
—
|
$
|
1,776
|
June 30, 2019
|
December 31, 2018
|
|||||||||||||||||||||||
Carrying
|
Fair
|
Hierarchy
|
Carrying
|
Fair
|
Hierarchy
|
|||||||||||||||||||
Amount
|
Value
|
Level
|
Amount
|
Value
|
Level
|
|||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||
Financial assets
|
||||||||||||||||||||||||
Cash and cash equivalents
|
$
|
181,372
|
$
|
181,372
|
1
|
$
|
202,742
|
$
|
202,742
|
1
|
||||||||||||||
Mortgage loans held for sale
|
11,106
|
11,106
|
2
|
1,650
|
1,650
|
2
|
||||||||||||||||||
Loans, net of allowance for loan losses
|
4,112,455
|
4,101,133
|
3
|
3,989,001
|
3,955,786
|
3
|
||||||||||||||||||
Accrued interest receivable
|
14,351
|
14,351
|
3
|
13,448
|
13,448
|
3
|
||||||||||||||||||
Investment in FHLBank stock
|
11,093
|
11,093
|
3
|
12,438
|
12,438
|
3
|
||||||||||||||||||
Financial liabilities
|
||||||||||||||||||||||||
Deposits
|
3,888,536
|
3,890,877
|
3
|
3,725,007
|
3,717,899
|
3
|
||||||||||||||||||
Short-term borrowings
|
267,268
|
267,268
|
3
|
297,978
|
297,978
|
3
|
||||||||||||||||||
Subordinated debentures
|
25,774
|
25,774
|
3
|
25,774
|
25,774
|
3
|
||||||||||||||||||
Subordinated notes
|
74,059
|
76,125
|
2
|
73,842
|
75,188
|
2
|
||||||||||||||||||
Accrued interest payable
|
4,209
|
4,209
|
3
|
3,570
|
3,570
|
3
|
||||||||||||||||||
Unrecognized financial instruments (net of contractual
value)
|
||||||||||||||||||||||||
Commitments to originate loans
|
—
|
—
|
3
|
—
|
—
|
3
|
||||||||||||||||||
Letters of credit
|
126
|
126
|
3
|
146
|
146
|
3
|
||||||||||||||||||
Lines of credit
|
—
|
—
|
3
|
—
|
—
|
3
|
Location in
|
Fair Value
|
||||||||
Consolidated Statements
|
June 30,
|
December 31,
|
|||||||
of Financial Condition
|
2019
|
2018
|
|||||||
(In Thousands)
|
|||||||||
Derivatives designated as
|
|||||||||
hedging instruments
|
|||||||||
Interest rate swap
|
Prepaid expenses and other assets
|
$
|
30,665
|
$
|
12,106
|
||||
Total derivatives designated
|
|||||||||
as hedging instruments
|
$
|
30,665
|
$
|
12,106
|
|||||
Derivatives not designated
|
|||||||||
as hedging instruments
|
|||||||||
Asset Derivatives
|
|||||||||
Interest rate products
|
Prepaid expenses and other assets
|
$
|
1,190
|
$
|
694
|
||||
Total derivatives not designated
|
|||||||||
as hedging instruments
|
$
|
1,190
|
$
|
694
|
|||||
Liability Derivatives
|
|||||||||
Interest rate products
|
Accrued expenses and other liabilities
|
$
|
1,281
|
$
|
716
|
||||
Total derivatives not designated
|
|||||||||
as hedging instruments
|
$
|
1,281
|
$
|
716
|
Amount of Gain (Loss)
|
||||||||
Recognized in AOCI
|
||||||||
Three Months Ended June 30,
|
||||||||
Cash Flow Hedges
|
2019
|
2018
|
||||||
(In Thousands)
|
||||||||
Interest rate swap, net of income taxes
|
$
|
8,528
|
$
|
—
|
||||
Amount of Gain (Loss)
|
||||||||
Recognized in AOCI
|
||||||||
Six Months Ended June 30,
|
||||||||
Cash Flow Hedges
|
2019
|
2018
|
||||||
(In Thousands)
|
||||||||
Interest rate swap, net of income taxes
|
$
|
14,328
|
$
|
—
|
||||
Three Months Ended June 30,
|
||||||||||||||||
Cash Flow Hedges
|
2019
|
2018
|
||||||||||||||
Interest Income
|
Interest Expense
|
Interest Income
|
Interest Expense
|
|||||||||||||
(In Thousands)
|
||||||||||||||||
Interest rate swap
|
$
|
568
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||
Six Months Ended June 30,
|
||||||||||||||||
Cash Flow Hedges
|
2019
|
2018
|
||||||||||||||
Interest Income
|
Interest Expense
|
Interest Income
|
Interest Expense
|
|||||||||||||
(In Thousands)
|
||||||||||||||||
Interest rate swap
|
$
|
1,081
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||
June 30,
2019 |
December 31,
2018 |
|||||||
(In Thousands)
|
||||||||
Goodwill – Branch acquisitions
|
$
|
5,396
|
$
|
5,396
|
||||
Deposit intangibles
|
||||||||
InterBank
|
—
|
36
|
||||||
Boulevard Bank
|
214
|
275
|
||||||
Valley Bank
|
800
|
1,000
|
||||||
Fifth Third Bank
|
2,265
|
2,581
|
||||||
3,279
|
3,892
|
|||||||
$
|
8,675
|
$
|
9,288
|
Beginning
Balance, January 1 |
Additions
to Non- Performing |
Removed
from Non- Performing |
Transfers to
Potential Problem Loans |
Transfers to
Foreclosed Assets and Repossessions |
Charge-
Offs |
Payments
|
Ending
Balance, June 30 |
|||||||||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||||||||||
One- to four-family construction
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||||||||
Subdivision construction
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Land development
|
49
|
3,727
|
—
|
—
|
—
|
(220
|
)
|
—
|
3,556
|
|||||||||||||||||||||||
Commercial construction
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
One- to four-family residential
|
2,664
|
926
|
—
|
(87
|
)
|
(1,250
|
)
|
(490
|
)
|
(231
|
)
|
1,532
|
||||||||||||||||||||
Other residential
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Commercial real estate
|
334
|
4,074
|
—
|
—
|
—
|
—
|
(733
|
)
|
3,675
|
|||||||||||||||||||||||
Commercial business
|
1,437
|
50
|
—
|
—
|
—
|
(24
|
)
|
(104
|
)
|
1,359
|
||||||||||||||||||||||
Consumer
|
1,816
|
1,122
|
—
|
(165
|
)
|
(223
|
)
|
(893
|
)
|
(391
|
)
|
1,266
|
||||||||||||||||||||
Total
|
$
|
6,300
|
$
|
9,899
|
$
|
—
|
$
|
(252
|
)
|
$
|
(1,473
|
)
|
$
|
(1,627
|
)
|
$
|
(1,459
|
)
|
$
|
11,388
|
Beginning
Balance, January 1 |
Additions
to Potential Problem |
Removed
from Potential Problem |
Transfers to
Non- Performing |
Transfers to
Foreclosed Assets and Repossessions |
Charge-
Offs |
Payments
|
Ending
Balance, June 30 |
|||||||||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||||||||||
One- to four-family construction
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||||||||
Subdivision construction
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Land development
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Commercial construction
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
One- to four-family residential
|
1,044
|
87
|
—
|
(152
|
)
|
—
|
—
|
(139
|
)
|
840
|
||||||||||||||||||||||
Other residential
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||||||||
Commercial real estate
|
2,053
|
1,931
|
(124
|
)
|
—
|
—
|
—
|
(51
|
)
|
3,809
|
||||||||||||||||||||||
Commercial business
|
—
|
37
|
—
|
—
|
—
|
—
|
—
|
37
|
||||||||||||||||||||||||
Consumer
|
206
|
179
|
—
|
(15
|
)
|
(4
|
)
|
(10
|
)
|
(37
|
)
|
319
|
||||||||||||||||||||
Total
|
$
|
3,303
|
$
|
2,234
|
$
|
(124
|
)
|
$
|
(167
|
)
|
$
|
(4
|
)
|
$
|
(10
|
)
|
$
|
(227
|
)
|
$
|
5,005
|
Beginning
Balance, January 1 |
Additions
|
Sales
|
Capitalized
Costs |
Write-
Downs |
Ending
Balance, June 30 |
|||||||||||||||||||
(In Thousands)
|
||||||||||||||||||||||||
One- to four-family construction
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||||
Subdivision construction
|
1,092
|
—
|
(81
|
)
|
—
|
(93
|
)
|
918
|
||||||||||||||||
Land development
|
3,191
|
—
|
(300
|
)
|
—
|
(307
|
)
|
2,584
|
||||||||||||||||
Commercial construction
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
One- to four-family residential
|
269
|
1,286
|
(1,555
|
)
|
—
|
—
|
—
|
|||||||||||||||||
Other residential
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Commercial real estate
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Commercial business
|
—
|
—
|
—
|
—
|
—
|
—
|
||||||||||||||||||
Consumer
|
928
|
2,318
|
(2,247
|
)
|
—
|
—
|
999
|
|||||||||||||||||
Total
|
$
|
5,480
|
$
|
3,604
|
$
|
(4,183
|
)
|
$
|
—
|
$
|
(400
|
)
|
$
|
4,501
|
June 30,
2019(2)
|
Three Months Ended
June 30, 2019 |
Three Months Ended
June 30, 2018 |
||||||||||||||||||||||||||
Yield/
Rate |
Average
Balance |
Interest
|
Yield/
Rate |
Average
Balance |
Interest
|
Yield/
Rate |
||||||||||||||||||||||
(Dollars in Thousands)
|
||||||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||||||
Loans receivable:
|
||||||||||||||||||||||||||||
One- to four-family residential
|
4.27
|
%
|
$
|
515,749
|
$
|
6,556
|
5.10
|
%
|
$
|
437,856
|
$
|
5,422
|
4.97
|
%
|
||||||||||||||
Other residential
|
5.21
|
819,577
|
11,270
|
5.52
|
744,809
|
9,347
|
5.03
|
|||||||||||||||||||||
Commercial real estate
|
5.02
|
1,414,009
|
18,304
|
5.19
|
1,332,339
|
15,968
|
4.81
|
|||||||||||||||||||||
Construction
|
5.60
|
713,885
|
10,585
|
5.95
|
553,787
|
7,246
|
5.25
|
|||||||||||||||||||||
Commercial business
|
5.33
|
259,779
|
3,358
|
5.18
|
289,895
|
3,560
|
4.93
|
|||||||||||||||||||||
Other loans
|
5.97
|
403,584
|
5,450
|
5.42
|
508,722
|
6,291
|
4.96
|
|||||||||||||||||||||
Industrial revenue bonds(1)
|
4.93
|
14,940
|
248
|
6.67
|
22,667
|
385
|
6.81
|
|||||||||||||||||||||
Total loans receivable
|
5.25
|
4,141,523
|
55,771
|
5.40
|
3,890,075
|
48,219
|
4.97
|
|||||||||||||||||||||
Investment securities(1)
|
3.36
|
309,170
|
2,415
|
3.13
|
188,589
|
1,291
|
2.75
|
|||||||||||||||||||||
Other interest-earning assets
|
2.50
|
88,024
|
537
|
2.45
|
120,688
|
433
|
1.44
|
|||||||||||||||||||||
Total interest-earning assets
|
5.07
|
4,538,717
|
58,723
|
5.19
|
4,199,352
|
49,943
|
4.77
|
|||||||||||||||||||||
Non-interest-earning assets:
|
||||||||||||||||||||||||||||
Cash and cash equivalents
|
92,500
|
97,295
|
||||||||||||||||||||||||||
Other non-earning assets
|
190,416
|
199,003
|
||||||||||||||||||||||||||
Total assets
|
$
|
4,821,633
|
$
|
4,495,650
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||||||
Interest-bearing demand and savings
|
0.51
|
$
|
1,498,795
|
1,930
|
0.52
|
$
|
1,573,936
|
1,435
|
0.37
|
|||||||||||||||||||
Time deposits
|
2.25
|
1,733,163
|
9,652
|
2.23
|
1,284,414
|
4,688
|
1.46
|
|||||||||||||||||||||
Total deposits
|
1.44
|
3,231,958
|
11,582
|
1.44
|
2,858,350
|
6,123
|
0.86
|
|||||||||||||||||||||
Short-term borrowings, repurchase
agreements and other interest-
bearing liabilities
|
1.51
|
244,586
|
859
|
1.41
|
141,268
|
180
|
0.51
|
|||||||||||||||||||||
Subordinated debentures issued to
capital trusts |
4.18
|
25,774
|
267
|
4.16
|
25,774
|
238
|
3.70
|
|||||||||||||||||||||
Subordinated notes
|
5.91
|
74,015
|
1,094
|
5.93
|
73,752
|
1,024
|
5.57
|
|||||||||||||||||||||
FHLBank advances
|
—
|
—
|
—
|
—
|
233,363
|
1,166
|
2.00
|
|||||||||||||||||||||
Total interest-bearing liabilities
|
1.56
|
3,576,333
|
13,802
|
1.55
|
3,332,507
|
8,731
|
1.05
|
|||||||||||||||||||||
Non-interest-bearing liabilities:
|
||||||||||||||||||||||||||||
Demand deposits
|
655,642
|
653,281
|
||||||||||||||||||||||||||
Other liabilities
|
34,504
|
20,744
|
||||||||||||||||||||||||||
Total liabilities
|
4,266,479
|
4,006,532
|
||||||||||||||||||||||||||
Stockholders’ equity
|
555,154
|
489,118
|
||||||||||||||||||||||||||
Total liabilities and stockholders’ equity
|
$
|
4,821,633
|
$
|
4,495,650
|
||||||||||||||||||||||||
Net interest income:
|
||||||||||||||||||||||||||||
Interest rate spread
|
3.51
|
%
|
$
|
44,921
|
3.64
|
%
|
$
|
41,212
|
3.72
|
%
|
||||||||||||||||||
Net interest margin*
|
3.97
|
%
|
3.94
|
%
|
||||||||||||||||||||||||
Average interest-earning assets to
average interest-bearing liabilities |
126.9
|
%
|
126.0
|
%
|
_______________________
|
|
*
|
Defined as the Company’s net interest income divided by total average interest-earning assets.
|
(1)
|
Of the total average balances of investment securities, average tax-exempt investment securities were $43.5 million and
$53.7 million for the three months ended June 30, 2019 and 2018, respectively. In addition, average tax-exempt loans and industrial revenue bonds were $21.0 million and $25.2 million for the three months ended June 30, 2019 and 2018,
respectively. Interest income on tax-exempt assets included in this table was $614,000 and $693,000 for the three months ended June 30, 2019 and 2018, respectively. Interest income net of disallowed interest expense related to tax-exempt
assets was $553,000 and $656,000 for the three months ended June 30, 2019 and 2018, respectively.
|
(2)
|
The yield on loans at June 30, 2019 does not include the impact of the accretable yield (income) on loans acquired in the
FDIC-assisted transactions. See “Net Interest Income” for a discussion of the effect on results of operations for the three months ended June 30, 2019.
|
June 30,
2019(2)
|
Six Months Ended
June 30, 2019 |
Six Months Ended
June 30, 2018 |
||||||||||||||||||||||||||
Yield/
Rate |
Average
Balance |
Interest
|
Yield/
Rate |
Average
Balance |
Interest
|
Yield/
Rate |
||||||||||||||||||||||
(Dollars in Thousands)
|
||||||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||||||
Loans receivable:
|
||||||||||||||||||||||||||||
One- to four-family residential
|
4.27
|
%
|
$
|
506,490
|
$
|
12,944
|
5.15
|
%
|
$
|
434,507
|
$
|
10,605
|
4.92
|
%
|
||||||||||||||
Other residential
|
5.21
|
815,354
|
22,260
|
5.51
|
741,782
|
18,186
|
4.94
|
|||||||||||||||||||||
Commercial real estate
|
5.02
|
1,400,789
|
36,000
|
5.18
|
1,289,141
|
30,326
|
4.74
|
|||||||||||||||||||||
Construction
|
5.60
|
690,883
|
20,758
|
6.06
|
536,478
|
13,734
|
5.16
|
|||||||||||||||||||||
Commercial business
|
5.33
|
261,967
|
6,750
|
5.20
|
287,329
|
6,904
|
4.85
|
|||||||||||||||||||||
Other loans
|
5.97
|
420,190
|
11,154
|
5.35
|
524,995
|
12,887
|
4.95
|
|||||||||||||||||||||
Industrial revenue bonds(1)
|
4.93
|
15,072
|
461
|
6.17
|
23,188
|
742
|
6.45
|
|||||||||||||||||||||
Total loans receivable
|
5.25
|
4,110,745
|
110,327
|
5.41
|
3,837,420
|
93,384
|
4.91
|
|||||||||||||||||||||
Investment securities(1)
|
3.36
|
293,937
|
4,666
|
3.20
|
187,803
|
2,601
|
2.79
|
|||||||||||||||||||||
Other interest-earning assets
|
2.50
|
91,182
|
1,088
|
2.41
|
109,944
|
841
|
1.54
|
|||||||||||||||||||||
Total interest-earning assets
|
5.07
|
4,495,864
|
116,081
|
5.21
|
4,135,167
|
96,826
|
4.72
|
|||||||||||||||||||||
Non-interest-earning assets:
|
||||||||||||||||||||||||||||
Cash and cash equivalents
|
91,657
|
99,818
|
||||||||||||||||||||||||||
Other non-earning assets
|
185,672
|
198,226
|
||||||||||||||||||||||||||
Total assets
|
$
|
4,773,193
|
$
|
4,433,211
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||||||
Interest-bearing demand and savings
|
0.51
|
$
|
1,485,948
|
3,693
|
0.50
|
$
|
1,569,299
|
2,745
|
0.35
|
|||||||||||||||||||
Time deposits
|
2.25
|
1,703,087
|
18,359
|
2.17
|
1,307,814
|
8,961
|
1.38
|
|||||||||||||||||||||
Total deposits
|
1.44
|
3,189,035
|
22,052
|
1.39
|
2,877,113
|
11,706
|
0.82
|
|||||||||||||||||||||
Short-term borrowings, repurchase
agreements and other interest-
bearing liabilities
|
1.51
|
251,347
|
1,780
|
1.43
|
120,494
|
208
|
0.35
|
|||||||||||||||||||||
Subordinated debentures issued to
capital trusts |
4.18
|
25,774
|
534
|
4.18
|
25,774
|
440
|
3.44
|
|||||||||||||||||||||
Subordinated notes
|
5.91
|
73,958
|
2,189
|
5.97
|
73,733
|
2,049
|
5.60
|
|||||||||||||||||||||
FHLBank advances
|
—
|
—
|
—
|
—
|
189,682
|
1,772
|
1.88
|
|||||||||||||||||||||
Total interest-bearing liabilities
|
1.56
|
3,540,114
|
26,555
|
1.52
|
3,286,796
|
16,175
|
0.99
|
|||||||||||||||||||||
Non-interest-bearing liabilities:
|
||||||||||||||||||||||||||||
Demand deposits
|
657,018
|
641,969
|
||||||||||||||||||||||||||
Other liabilities
|
30,011
|
19,788
|
||||||||||||||||||||||||||
Total liabilities
|
4,227,143
|
3,948,553
|
||||||||||||||||||||||||||
Stockholders’ equity
|
546,050
|
484,658
|
||||||||||||||||||||||||||
Total liabilities and stockholders’ equity
|
$
|
4,773,193
|
$
|
4,433,211
|
||||||||||||||||||||||||
Net interest income:
|
||||||||||||||||||||||||||||
Interest rate spread
|
3.51
|
%
|
$
|
89,526
|
3.69
|
%
|
$
|
80,651
|
3.73
|
%
|
||||||||||||||||||
Net interest margin*
|
4.02
|
%
|
3.93
|
%
|
||||||||||||||||||||||||
Average interest-earning assets to
average interest-bearing liabilities |
127.0
|
%
|
125.8
|
%
|
_______________________
|
|
*
|
Defined as the Company’s net interest income divided by total average interest-earning assets.
|
(1)
|
Of the total average balances of investment securities, average tax-exempt investment securities were $45.7 million and
$54.6 million for the six months ended June 30, 2019 and 2018, respectively. In addition, average tax-exempt loans and industrial revenue bonds were $21.4 million and $26.2 million for the six months ended June 30, 2019 and 2018,
respectively. Interest income on tax-exempt assets included in this table was $1.2 million and $1.6 million for the six months ended June 30, 2019 and 2018, respectively. Interest income net of disallowed interest expense related to
tax-exempt assets was $1.1 million and $1.5 million for the six months ended June 30, 2019 and 2018, respectively.
|
(2)
|
The yield on loans at June 30, 2019 does not include the impact of the accretable yield (income) on loans acquired in the
FDIC-assisted transactions. See “Net Interest Income” for a discussion of the effect on results of operations for the six months ended June 30, 2019.
|
Three Months Ended June 30,
|
||||||||||||
2019 vs. 2018
|
||||||||||||
Increase
|
||||||||||||
(Decrease)
|
Total
|
|||||||||||
Due to
|
Increase
|
|||||||||||
Rate
|
Volume
|
(Decrease)
|
||||||||||
(Dollars in Thousands)
|
||||||||||||
Interest-earning assets:
|
||||||||||||
Loans receivable
|
$
|
4,320
|
$
|
3,232
|
$
|
7,552
|
||||||
Investment securities
|
203
|
921
|
1,124
|
|||||||||
Other interest-earning assets
|
169
|
(65
|
)
|
104
|
||||||||
Total interest-earning assets
|
4,692
|
4,088
|
8,780
|
|||||||||
Interest-bearing liabilities:
|
||||||||||||
Demand deposits
|
560
|
(65
|
)
|
495
|
||||||||
Time deposits
|
2,983
|
1,981
|
4,964
|
|||||||||
Total deposits
|
3,543
|
1,916
|
5,459
|
|||||||||
Short-term borrowings
|
479
|
200
|
679
|
|||||||||
Subordinated debentures issued to capital trust
|
29
|
—
|
29
|
|||||||||
Subordinated notes
|
66
|
4
|
70
|
|||||||||
FHLBank advances
|
—
|
(1,166
|
)
|
(1,166
|
)
|
|||||||
Total interest-bearing liabilities
|
4,117
|
954
|
5,071
|
|||||||||
Net interest income
|
$
|
575
|
$
|
3,134
|
$
|
3,709
|
Six Months Ended June 30,
|
||||||||||||
2019 vs. 2018
|
||||||||||||
Increase
|
||||||||||||
(Decrease)
|
Total
|
|||||||||||
Due to
|
Increase
|
|||||||||||
Rate
|
Volume
|
(Decrease)
|
||||||||||
(Dollars in Thousands)
|
||||||||||||
Interest-earning assets:
|
||||||||||||
Loans receivable
|
$
|
10,012
|
$
|
6,931
|
$
|
16,943
|
||||||
Investment securities
|
424
|
1,641
|
2,065
|
|||||||||
Other interest-earning assets
|
355
|
(108
|
)
|
247
|
||||||||
Total interest-earning assets
|
10,791
|
8,464
|
19,255
|
|||||||||
Interest-bearing liabilities:
|
||||||||||||
Demand deposits
|
1,085
|
(137
|
)
|
948
|
||||||||
Time deposits
|
6,153
|
3,245
|
9,398
|
|||||||||
Total deposits
|
7,238
|
3,108
|
10,346
|
|||||||||
Short-term borrowings
|
1,164
|
408
|
1,572
|
|||||||||
Subordinated debentures issued to capital trust
|
94
|
—
|
94
|
|||||||||
Subordinated notes
|
138
|
2
|
140
|
|||||||||
FHLBank advances
|
—
|
(1,772
|
)
|
(1,772
|
)
|
|||||||
Total interest-bearing liabilities
|
8,634
|
1,746
|
10,380
|
|||||||||
Net interest income
|
$
|
2,157
|
$
|
6,718
|
$
|
8,875
|
June 30,
2019
|
March 31,
2019
|
December 31,
2018
|
December 31,
2017
|
December 31,
2016
|
||||||||||||||||
Closed loans with unused available lines
|
||||||||||||||||||||
Secured by real estate (one- to four-family)
|
$
|
153,871
|
$
|
154,400
|
$
|
150,948
|
$
|
133,587
|
$
|
123,433
|
||||||||||
Secured by real estate (not one- to four-family)
|
13,237
|
10,450
|
11,063
|
10,836
|
26,062
|
|||||||||||||||
Not secured by real estate - commercial business
|
80,887
|
83,520
|
87,480
|
113,317
|
79,937
|
|||||||||||||||
Closed construction loans with unused
available lines
|
||||||||||||||||||||
Secured by real estate (one-to four-family)
|
28,023
|
33,818
|
37,162
|
20,919
|
10,047
|
|||||||||||||||
Secured by real estate (not one-to four-family)
|
818,047
|
831,155
|
906,006
|
718,277
|
542,326
|
|||||||||||||||
Loan Commitments not closed
|
||||||||||||||||||||
Secured by real estate (one-to four-family)
|
49,694
|
36,945
|
24,253
|
23,340
|
15,884
|
|||||||||||||||
Secured by real estate (not one-to four-family)
|
110,647
|
134,607
|
104,871
|
156,658
|
119,126
|
|||||||||||||||
Not secured by real estate - commercial business
|
4,535
|
—
|
405
|
4,870
|
7,022
|
|||||||||||||||
$
|
1,258,941
|
$
|
1,284,895
|
$
|
1,322,188
|
$
|
1,181,804
|
$
|
923,837
|
Federal Home Loan Bank line
|
$868.6 million
|
|
Federal Reserve Bank line
|
$407.4 million
|
|
Cash and cash equivalents
|
$181.4 million
|
|
Unpledged securities
|
$141.2 million
|
|
June 30,
|
December 31,
|
|||||||
2019
|
2018
|
|||||||
(Dollars in Thousands)
|
||||||||
Common equity at period end
|
$
|
572,309
|
$
|
531,977
|
||||
Less: Intangible assets at period end
|
8,675
|
9,288
|
||||||
Tangible common equity at period end (a)
|
$
|
563,634
|
$
|
522,689
|
||||
Total assets at period end
|
$
|
4,871,522
|
$
|
4,676,200
|
||||
Less: Intangible assets at period end
|
8,675
|
9,288
|
||||||
Tangible assets at period end (b)
|
$
|
4,862,847
|
$
|
4,666,912
|
||||
Tangible common equity to tangible assets (a) / (b)
|
11.59
|
%
|
11.20
|
%
|
Total Number
of Shares
Purchased
|
Average
Price
Per Share
|
Total Number
of Shares
Purchased
As Part of
Publicly
Announced
Plan
|
Maximum
Number of
Shares that
May Yet Be
Purchased
Under the
Plan(1)
|
|||||||||||||
April 1, 2019 – April 30, 2019
|
--
|
$
|
--
|
--
|
466,418
|
|||||||||||
May 1, 2019 – May 31, 2019
|
--
|
--
|
--
|
466,418
|
||||||||||||
June 1, 2019 – June 30, 2019
|
--
|
--
|
--
|
466,418
|
||||||||||||
--
|
$
|
--
|
--
|
______________________
|
|
(1)
|
Amount represents the number of shares available to be repurchased under the April 2018 plan as of the last calendar day
of the month shown.
|
a)
|
Exhibits
|
Exhibit No. |
DESCRIPTION |
|
(2)
|
Plan of acquisition, reorganization, arrangement, liquidation, or succession
|
|
(i)
|
The Purchase and Assumption Agreement, dated as of
March 20, 2009, among Federal Deposit Insurance Corporation, Receiver of TeamBank, N.A., Paola, Kansas, Federal Deposit Insurance Corporation and Great Southern Bank, previously filed with the Commission (File no. 000-18082) as Exhibit
2.1 to the Registrant's Current Report on Form 8-K filed on March 26, 2009 is incorporated herein by reference as Exhibit 2.1(i).
|
|
(ii)
|
The Purchase and Assumption Agreement, dated as of
September 4, 2009, among Federal Deposit Insurance Corporation, Receiver of Vantus Bank, Sioux City, Iowa, Federal Deposit Insurance Corporation and Great Southern Bank, previously filed with the Commission (File no. 000-18082) as Exhibit
2.1 to the Registrant's Current Report on Form 8-K filed on September 11, 2009 is incorporated herein by reference as Exhibit 2.1(ii).
|
|
(iii)
|
The Purchase and Assumption Agreement, dated as of
October 7, 2011, among Federal Deposit Insurance Corporation, Receiver of Sun Security Bank, Ellington, Missouri, Federal Deposit Insurance Corporation and Great Southern Bank, previously filed with the Commission (File no.
000-18082) as Exhibit 2.1(iii) to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 is incorporated herein by reference as Exhibit 2(iii).
|
|
(iv)
|
The Purchase and Assumption Agreement, dated as of April 27, 2012, among Federal Deposit Insurance Corporation, Receiver
of Inter Savings Bank, FSB, Maple Grove, Minnesota, Federal Deposit Insurance Corporation and Great Southern Bank, previously filed with the Commission (File no. 000-18082) as Exhibit 2.1(iv) to the Registrant's Quarterly Report on Form
10-Q for the quarter ended March 31, 2012 is incorporated herein by reference as Exhibit
2(iv).
|
|
(v)
|
The Purchase and Assumption Agreement All Deposits, dated as of June 20, 2014, among Federal Deposit Insurance
Corporation, Receiver of Valley Bank, Moline, Illinois, Federal Deposit Insurance Corporation and Great Southern Bank, previously filed with the Commission (File no. 000-18082) as Exhibit 2.1(v) to the Registrant's Quarterly Report on Form
10-Q for the quarter ended June 20, 2014 is incorporated herein by reference as Exhibit
2(v).
|
|
(3)
|
Articles of incorporation and Bylaws
|
|
(i)
|
The Registrant's Charter previously filed with the
Commission as Appendix D to the Registrant's Definitive Proxy Statement on Schedule 14A filed on March 31, 2004 (File No. 000-18082), is incorporated herein by reference as Exhibit 3.1.
|
|
(iA)
|
The Articles Supplementary to the Registrant's
Charter setting forth the terms of the Registrant's Senior Non-Cumulative Perpetual Preferred Stock, Series A, previously filed with the Commission (File no. 000-18082) as Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed
on August 18, 2011, are incorporated herein by reference as Exhibit 3(i).
|
|
(ii)
|
The Registrant's Bylaws, previously filed with the
Commission (File no. 000-18082) as Exhibit 3(ii) to the Registrant's Current Report on Form 8-K filed on October 19, 2007, is incorporated herein by reference as Exhibit 3.2.
|
|
(4)
|
Instruments defining the rights of security holders, including indentures
|
|
The Company hereby agrees to furnish the SEC upon request, copies of the instruments defining the rights of the holders of
each issue of the Registrant's long-term debt.
|
(9)
|
Voting trust agreement
|
|
Inapplicable.
|
||
(10)
|
Material contracts
|
|
The Registrant's 2003 Stock Option and Incentive
Plan previously filed with the Commission (File No. 000-18082) as Annex A to the Registrant's Definitive Proxy Statement on Schedule 14A filed on April 14, 2003, is incorporated herein by reference as Exhibit 10.2.
|
||
The employment agreement dated September 18, 2002
between the Registrant and William V. Turner previously filed with the Commission (File no. 000-18082) as Exhibit 10.2 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2003, is incorporated herein by
reference as Exhibit 10.3.
|
||
The employment agreement dated September 18, 2002
between the Registrant and Joseph W. Turner previously filed with the Commission (File no. 000-18082) as Exhibit 10.4 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2003, is incorporated herein by
reference as Exhibit 10.4.
|
||
The form of incentive stock option agreement under
the Registrant's 2003 Stock Option and Incentive Plan previously filed with the Commission as Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File no. 000-18082) filed on February 24, 2005 is incorporated herein by reference
as Exhibit 10.5.
|
||
The form of non-qualified stock option agreement
under the Registrant's 2003 Stock Option and Incentive Plan previously filed with the Commission as Exhibit 10.2 to the Registrant's Current Report on Form 8-K (File no. 000-18082) filed on February 24, 2005 is incorporated herein by
reference as Exhibit 10.6.
|
||
A description of the current salary and bonus
arrangements for 2019 for the Registrant's executive officers previously filed with the Commission as Exhibit 10.7 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2018 is incorporated herein by
reference as Exhibit 10.7.
|
||
A description of the current fee arrangements for
the Registrant's directors previously filed with the Commission as Exhibit 10.8 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2018 is incorporated herein by reference as Exhibit 10.8.
|
||
Small Business Lending Fund – Securities Purchase Agreement, dated August 18, 2011, between the Registrant and the
Secretary of the United States Department of the Treasury, previously filed with the Commission as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on August 18, 2011, is incorporated herein by reference as Exhibit 10.9.
|
||
The Registrant's 2013 Equity Incentive Plan
previously filed with the Commission (File No. 000-18082) as Annex A to the Registrant's Definitive Proxy Statement on Schedule 14A filed on April 4, 2013, is incorporated herein by reference as Exhibit 10.10.
|
||
The form of incentive stock option award agreement
under the Registrant's 2013 Equity Incentive Plan previously filed with the Commission as Exhibit 10.2 to the Registrant's Registration Statement on Form S-8 (File no. 333-189497) filed on June 20, 2013 is incorporated herein by reference
as Exhibit 10.11.
|
||
The form of non-qualified stock option award
agreement under the Registrant's 2013 Equity Incentive Plan previously filed with the Commission as Exhibit 10.3 to the Registrant's Registration Statement on Form S-8 (File no. 333-189497) filed on June 20, 2013 is incorporated herein by
reference as Exhibit 10.12.
|
||
The form of stock appreciation right award agreement
under the Registrant's 2013 Equity Incentive Plan previously filed with the Commission as Exhibit 10.4 to the Registrant's Registration Statement on Form S-8 (File no. 333-189497) filed on June 20, 2013 is incorporated herein by reference
as Exhibit 10.13.
|
||
The form of restricted stock award agreement under
the Registrant's 2013 Equity Incentive Plan previously filed with the Commission as Exhibit 10.5 to the Registrant's Registration Statement on Form S-8 (File no. 333-189497) filed on June 20, 2013 is incorporated herein by reference as
Exhibit 10.14.
|
The Registrant's 2018 Omnibus Incentive Plan previously filed with the Commission (File No. 000-18082) as Appendix A to
the Registrant's Definitive Proxy Statement on Schedule 14A filed on March 27, 2018, is incorporated herein by reference as Exhibit 10.15.
|
||
The form of incentive stock option award agreement under the Registrant's 2018 Omnibus Incentive Plan previously filed
with the Commission as Exhibit 10.2 to the Registrant's Registration Statement on Form S-8 (File no. 333-225665) filed on June 15, 2018 is incorporated herein by reference as Exhibit 10.16.
|
||
The form of non-qualified stock option award agreement under the Registrant's 2018 Omnibus Incentive Plan previously filed
with the Commission as Exhibit 10.3 to the Registrant's Registration Statement on Form S-8 (File no. 333-225665) filed on June 15, 2018 is incorporated herein by reference as Exhibit 10.17.
|
||
(15)
|
Letter re unaudited interim financial information
|
|
Inapplicable.
|
||
(18)
|
Letter re change in accounting principles
|
|
Inapplicable.
|
||
(23)
|
Consents of experts and counsel
|
|
Inapplicable.
|
||
(24)
|
Power of attorney
|
|
None.
|
||
(31.1)
|
Rule 13a-14(a) Certification of Chief Executive Officer
|
|
Attached as Exhibit 31.1
|
||
(31.2)
|
Rule 13a-14(a) Certification of Treasurer
|
|
Attached as Exhibit 31.2
|
||
(32)
|
Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
|
|
Attached as Exhibit 32.
|
||
(99)
|
Additional Exhibits
|
|
None.
|
||
(101)
|
Attached as Exhibit 101 are the following financial
statements from the Great Southern Bancorp, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, formatted in Extensive Business Reporting
Language (XBRL): (i) consolidated statements of financial condition, (ii) consolidated statements of income, (iii) consolidated statements of comprehensive income, (iv) consolidated statements of cash flows and (v) notes to consolidated
financial statements.
|
Great Southern Bancorp, Inc.
|
|
Registrant
|
|
Date: August 7, 2019
|
/s/ Joseph W. Turner
|
Joseph W. Turner
President and Chief Executive Officer
(Principal Executive Officer)
|
|
Date: August 7, 2019
|
/s/ Rex A. Copeland
|
Rex A. Copeland
Treasurer
(Principal Financial and Accounting Officer)
|
I, Joseph W. Turner, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Great Southern Bancorp, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over
financial reporting.
|
Date: August 7, 2019
/s/ Joseph W.
Turner
Joseph W. Turner
President and Chief Executive Officer
|
I, Rex A. Copeland, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Great Southern Bancorp, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over
financial reporting.
|
Date: August 7, 2019
/s/ Rex A. Copeland
Rex A. Copeland
Treasurer
|
Dated: August 7, 2019
|
/s/ Joseph W.
Turner
Joseph W. Turner
President and Chief Executive Officer
|
|
|
Dated: August 7, 2019
|
/s/ Rex A.
Copeland
Rex A. Copeland
Treasurer
|
Consolidated Statements of Financial Condition - Parenthetical - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Details | ||
Loans and Leases Receivable, Allowance | $ 39,254 | $ 38,409 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 20,000,000 | 20,000,000 |
Common Stock, Shares, Issued | 14,201,616 | 14,151,198 |
Common Stock, Shares, Outstanding | 14,201,616 | 14,151,198 |
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Details | ||||
Net Income | $ 18,375 | $ 13,839 | $ 35,988 | $ 27,305 |
Unrealized Appreciation (Depreciation) on Available for Sale Securities, Net | 5,213 | (420) | 8,190 | (2,301) |
Reclassification adjustment for gains included in net income, net of taxes of $2 and $0, for 2019 and 2018, respectively | 0 | 0 | (8) | 0 |
Change in Fair Value of Cash Flow Hedge, Net | 8,528 | 0 | 14,328 | 0 |
Comprehensive Income | $ 32,116 | $ 13,419 | $ 58,498 | $ 25,004 |
Consolidated Statements of Comprehensive Income (Unaudited) - Parenthetical - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Details | ||||
Tax effect of unrealized appreciation (depreciation) on available-for-sale securities, taxes (credit) | $ 1,540 | $ (121) | $ 2,419 | $ (662) |
Tax Effect Reclassification Adjustment for Gains Included in Net Income Taxes Credit, Taxes | 2 | 0 | 2 | 0 |
Tax effect of change in fair value of cash flow hedge, taxes | $ 2,519 | $ 0 | $ 4,231 | $ 0 |
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands |
Stockholders' Equity, Total |
Common Stock |
Additional Paid-in Capital |
Retained Earnings |
Other Comprehensive Income (Loss) |
Treasury Stock |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity Balance at Dec. 31, 2017 | $ 471,662 | $ 141 | $ 28,203 | $ 442,077 | $ 1,241 | $ 0 | |||||||||
Net Income | 27,305 | 0 | 0 | 27,305 | 0 | 0 | |||||||||
Stock issued under Stock Option Plan | 1,513 | 0 | 931 | 0 | 0 | 582 | |||||||||
Common dividends declared, | [1] | (7,908) | 0 | 0 | (7,908) | 0 | 0 | ||||||||
Other comprehensive gain (loss) | (2,301) | 0 | 0 | 0 | (2,301) | 0 | |||||||||
Reclassification of Treasury Stock per Maryland Law | 0 | 0 | 0 | 582 | 0 | (582) | |||||||||
Equity Balance at Jun. 30, 2018 | 490,271 | 141 | 29,134 | 461,784 | (788) | 0 | |||||||||
Reclassification of stranded tax effects resulting from change in Federal income tax rate | 0 | 0 | 0 | (272) | 272 | 0 | |||||||||
Equity Balance at Mar. 31, 2018 | 480,000 | 141 | 28,624 | 451,603 | (368) | 0 | |||||||||
Net Income | 13,839 | 0 | 0 | 13,839 | 0 | 0 | |||||||||
Stock issued under Stock Option Plan | 809 | 0 | 510 | 0 | 0 | 299 | |||||||||
Common dividends declared, | [2] | (3,957) | 0 | 0 | (3,957) | 0 | 0 | ||||||||
Other comprehensive gain (loss) | (420) | 0 | 0 | 0 | (420) | 0 | |||||||||
Reclassification of Treasury Stock per Maryland Law | 0 | 0 | 0 | 299 | 0 | (299) | |||||||||
Equity Balance at Jun. 30, 2018 | 490,271 | 141 | 29,134 | 461,784 | (788) | 0 | |||||||||
Equity Balance at Dec. 31, 2018 | 531,977 | 142 | 30,121 | 492,087 | 9,627 | 0 | |||||||||
Net Income | 35,988 | 0 | 0 | 35,988 | 0 | 0 | |||||||||
Stock issued under Stock Option Plan | 2,374 | 0 | 1,482 | 0 | 0 | 892 | |||||||||
Common dividends declared, | [3] | (19,691) | 0 | 0 | (19,691) | 0 | 0 | ||||||||
Other comprehensive gain (loss) | 22,510 | 0 | 0 | 0 | 22,510 | 0 | |||||||||
Reclassification of Treasury Stock per Maryland Law | 0 | 0 | 0 | 43 | 0 | (43) | |||||||||
Equity Balance at Jun. 30, 2019 | 572,309 | 142 | 31,603 | 508,427 | 32,137 | 0 | |||||||||
Purchase of the Company's common stock | (849) | 0 | 0 | 0 | 0 | (849) | |||||||||
Equity Balance at Mar. 31, 2019 | 543,635 | 142 | 30,916 | 494,181 | 18,396 | 0 | |||||||||
Net Income | 18,375 | 0 | 0 | 18,375 | 0 | 0 | |||||||||
Stock issued under Stock Option Plan | 1,102 | 0 | 687 | 0 | 0 | 415 | |||||||||
Common dividends declared, | [4] | (4,544) | 0 | 0 | (4,544) | 0 | 0 | ||||||||
Other comprehensive gain (loss) | 13,741 | 0 | 0 | 0 | 13,741 | 0 | |||||||||
Reclassification of Treasury Stock per Maryland Law | 0 | 0 | 0 | 415 | 0 | (415) | |||||||||
Equity Balance at Jun. 30, 2019 | 572,309 | 142 | 31,603 | 508,427 | 32,137 | 0 | |||||||||
Purchase of the Company's common stock | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||
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NOTE 1: BASIS OF PRESENTATION |
6 Months Ended |
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Jun. 30, 2019 | |
Notes | |
NOTE 1: BASIS OF PRESENTATION | NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements of Great Southern Bancorp, Inc. (the "Company" or "Great Southern") have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The financial statements presented herein reflect all adjustments which are, in the opinion of management, necessary to fairly present the financial condition, results of operations, changes in stockholders equity and cash flows of the Company as of the dates and for the periods presented. Those adjustments consist only of normal recurring adjustments. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the full year. The consolidated statement of financial condition of the Company as of December 31, 2018, has been derived from the audited consolidated statement of financial condition of the Company as of that date. Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on net income.
Certain information and note disclosures normally included in the Company's annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for 2018 filed with the Securities and Exchange Commission.
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NOTE 2: NATURE OF OPERATIONS AND OPERATING SEGMENTS |
6 Months Ended |
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Jun. 30, 2019 | |
Notes | |
NOTE 2: NATURE OF OPERATIONS AND OPERATING SEGMENTS | NOTE 2: NATURE OF OPERATIONS AND OPERATING SEGMENTS
The Company operates as a one-bank holding company. The Companys business primarily consists of the operations of Great Southern Bank (the Bank), which provides a full range of financial services to customers primarily located in Missouri, Iowa, Kansas, Minnesota, Nebraska and Arkansas. The Bank also originates commercial loans from lending offices in Dallas, Texas, Tulsa, Okla., Chicago, Ill., Atlanta, Ga., Denver, Colo. and Omaha, Neb. The Company and the Bank are subject to regulation by certain federal and state agencies and undergo periodic examinations by those regulatory agencies.
The Companys banking operation is its only reportable segment. The banking operation is principally engaged in the business of originating residential and commercial real estate loans, construction loans, commercial business loans and consumer loans and funding these loans by attracting deposits from the general public, accepting brokered deposits and borrowing from the Federal Home Loan Bank and others. The operating results of this segment are regularly reviewed by management to make decisions about resource allocations and to assess performance. Selected information is not presented separately for the Companys reportable segment, as there is no material difference between that information and the corresponding information in the consolidated financial statements.
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NOTE 3: RECENT ACCOUNTING PRONOUNCEMENTS |
6 Months Ended |
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Jun. 30, 2019 | |
Notes | |
NOTE 3: RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 3: RECENT ACCOUNTING PRONOUNCEMENTS
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and in July 2018 FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases. The amendments in this Update revise the accounting related to lessee accounting. Under the new guidance, lessees are required to recognize a lease liability and a right-of-use asset for all leases. The Update became effective for the Company on January 1, 2019. Adoption of the standard required the use of a modified retrospective transition approach for all periods presented at the time of adoption. Based on the Companys leases outstanding at December 31, 2018, which totaled less than 20 leased properties and no significant leased equipment, the adoption of the new standard did not have a material impact on our consolidated statements of financial condition or our consolidated statements of income, although an increase to assets and liabilities occurred at the time of adoption. In the first quarter of 2019, the Company recognized a lease liability and a corresponding right-of-use asset for all leases of $9.5 million based on the lease portfolio at that time. Subsequent to December 31, 2018, the Companys lease terminations, new leases and lease modifications and renewals will impact the amount of lease liability and a corresponding right-of-use asset recognized. The Companys leases are currently all operating leases as defined in the Update; therefore, no material change in the income statement presentation of lease expense occurred in the three and six months ended June 30, 2019. The Companys lease activities are discussed further in Note 9 of the Notes to Consolidated Financial Statements contained in this report.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments Credit Losses (Topic 326). The Update amends guidance on reporting credit losses for assets held at amortized cost and available for sale debt securities. For assets held at amortized cost, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. This Update affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. For public companies, the update is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. An entity will apply the amendments in this update on a modified retrospective basis, through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company previously formed a cross-functional committee to oversee the system, data, reporting and other considerations for purposes of meeting the requirements of this standard. Data and system needs were assessed. As a result, third-party software was acquired and implemented to manage the data. We have completed the upload of the necessary historical loan data to the software that will be used in meeting certain requirements of this standard. Our loss data covers multiple credit cycles back to 2003. Parallel testing of the new methodology compared to the current methodology has been performed throughout 2019 and the Company continues to evaluate the impact of adopting the new guidance. We have engaged a third party to perform validation of the accuracy of our inputs into the model. This review is currently in process. We expect to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective for us (the three-month period ending March 31, 2020), but cannot yet determine the exact amount of any such one-time adjustment, or the overall impact of the new guidance on the Companys consolidated financial statements. Based on the current modeling results, we anticipate that the one-time cumulative effect adjustment will be less than five percent of total stockholders equity.
In January 2017, the FASB issued ASU No. 2017-04, Intangibles: Goodwill and Other: Simplifying the Test for Goodwill Impairment (Topic 350). To simplify the subsequent measurement of goodwill, the amendments eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test should be performed by comparing the fair value of a reporting unit with its carrying amount and an impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting units fair value. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the qualitative impairment test is necessary. The nature of and reason for the change in accounting principle should be disclosed upon transition. The amendments in this update should be adopted for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted on testing dates after January 1, 2017. We are currently evaluating the impact of adopting the new guidance, including consideration of early adoption, on the consolidated financial statements, but it is not expected to have a material impact.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820. The amendments in this update remove disclosures that no longer are considered cost beneficial, modify/clarify the specific requirements of certain disclosures, and add disclosure requirements identified as relevant. ASU 2018-13 is effective for periods beginning after December 15, 2019, with early adoption permitted for certain removed and modified disclosures, and is not expected to have a significant impact on our financial statements.
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NOTE 4: EARNINGS PER SHARE |
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NOTE 4: EARNINGS PER SHARE | NOTE 4: EARNINGS PER SHARE
Options outstanding at June 30, 2019 and 2018, to purchase 309,000 and 161,400 shares of common stock, respectively, were not included in the computation of diluted earnings per common share for each of the three and six month periods because the exercise prices of such options were greater than the average market prices of the common stock for the three and six months ended June 30, 2019 and 2018, respectively.
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NOTE 5: INVESTMENT SECURITIES |
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NOTE 5: INVESTMENT SECURITIES | NOTE 5: INVESTMENT SECURITIES The amortized cost and fair values of securities classified as available-for-sale were as follows:
The amortized cost and fair value of available-for-sale securities at June 30, 2019, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at June 30, 2019 and December 31, 2018, was approximately $61.6 million and $95.7 million, respectively, which is approximately 20.1% and 39.2% of the Companys available-for-sale investment portfolio, respectively.
Based on an evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these debt securities are temporary.
The following table shows the Companys gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2019 and December 31, 2018:
There were no sales of available-for-sale securities during the three months ended June 30, 2019. Gross gains of $226,000 and gross losses of $216,000 resulting from sales of available-for-sale securities were realized during the six months ended June 30, 2019. There were no sales of available-for-sale securities during the three and six months ended June 30, 2018. Gains and losses on sales of securities are determined on the specific-identification method.
Other-than-temporary Impairment. Upon acquisition of a security, the Company decides whether it is within the scope of the accounting guidance for beneficial interests in securitized financial assets or will be evaluated for impairment under the accounting guidance for investments in debt and equity securities.
The accounting guidance for beneficial interests in securitized financial assets provides incremental impairment guidance for a subset of the debt securities within the scope of the guidance for investments in debt and equity securities. For securities where the security is a beneficial interest in securitized financial assets, the Company uses the beneficial interests in securitized financial asset impairment model. For securities where the security is not a beneficial interest in securitized financial assets, the Company uses the debt and equity securities impairment model. The Company does not currently have securities within the scope of this guidance for beneficial interests in securitized financial assets.
The Company routinely conducts periodic reviews to identify and evaluate each investment security to determine whether an other-than-temporary impairment has occurred. The Company considers the length of time a security has been in an unrealized loss position, the relative amount of the unrealized loss compared to the carrying value of the security, the type of security and other factors. If certain criteria are met, the Company performs additional review and evaluation using observable market values or various inputs in economic models to determine if an unrealized loss is other-than-temporary. The Company uses quoted market prices for marketable equity securities and uses broker pricing quotes based on observable inputs for equity investments that are not traded on a stock exchange. For non-agency collateralized mortgage obligations, to determine if the unrealized loss is other than temporary, the Company projects total estimated defaults of the underlying assets (mortgages) and multiplies that calculated amount by an estimate of realizable value upon sale in the marketplace (severity) in order to determine the projected collateral loss. The Company also evaluates any current credit enhancement underlying these securities to determine the impact on cash flows. If the Company determines that a given security position will be subject to a write-down or loss, the Company records the expected credit loss as a charge to earnings.
During the three and six months ended June 30, 2019 and 2018, respectively, no securities were determined to have impairment that had become other-than-temporary.
Credit Losses Recognized on Investments. During the three months ended June 30, 2019 and 2018, respectively, there were no debt securities that had experienced fair value deterioration due to credit losses, or due to other market factors, but were not otherwise other-than-temporarily impaired.
Amounts Reclassified Out of Accumulated Other Comprehensive Income. Amounts reclassified from accumulated other comprehensive income and the affected line items in the statements of income during the three and six months ended June 30, 2019 and 2018, are shown below. The FASB previously issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220). The amendment allows an entity to elect to reclassify the stranded tax effects resulting from the change in income tax rate from H.R.1, originally known as the Tax Cuts and Jobs Act (the Tax Act), from accumulated other comprehensive income to retained earnings. The Company chose to early adopt ASU 2018-02 effective January 1, 2018. The stranded tax amount related to unrealized gains and losses on available for sale securities, which was reclassified from accumulated other comprehensive income to retained earnings at the time of adoption, was $272,000. There were no other income tax effects related to the application of the Tax Act to be reclassified from AOCI to retained earnings.
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NOTE 6: LOANS AND ALLOWANCE FOR LOAN LOSSES |
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NOTE 6: LOANS AND ALLOWANCE FOR LOAN LOSSES | NOTE 6: LOANS AND ALLOWANCE FOR LOAN LOSSES
Classes of loans at June 30, 2019 and December 31, 2018 were as follows:
Classes of loans by aging were as follows:
Nonaccruing loans (excluding FDIC-assisted acquired loans, net of discount) are summarized as follows:
The following table presents the activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2019. Also presented are the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of June 30, 2019:
The following table presents the activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2018:
The following table presents the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of December 31, 2018:
The portfolio segments used in the preceding three tables correspond to the loan classes used in all other tables in Note 6 as follows: · The one- to four-family residential and construction segment includes the one- to four-family residential construction, subdivision construction, owner occupied one- to four-family residential and non-owner occupied one- to four-family residential classes · The other residential segment corresponds to the other residential class · The commercial real estate segment includes the commercial real estate and industrial revenue bonds classes · The commercial construction segment includes the land development and commercial construction classes · The commercial business segment corresponds to the commercial business class · The consumer segment includes the consumer auto, consumer other and home equity lines of credit classes
A loan is considered impaired, in accordance with the impairment accounting guidance (FASB ASC 310-10-35-16), when based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include not only nonperforming loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties.
Impaired loans (excluding FDIC-assisted loans, net of discount), are summarized as follows:
At June 30, 2019, $6.2 million of impaired loans had specific valuation allowances totaling $1.4 million. At December 31, 2018, $8.4 million of impaired loans had specific valuation allowances totaling $2.0 million.
Included in certain loan categories in the impaired loans are troubled debt restructurings that were classified as impaired. Troubled debt restructurings are loans that are modified by granting concessions to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. The types of concessions made are factored into the estimation of the allowance for loan losses for troubled debt restructurings primarily using a discounted cash flow or collateral adequacy approach.
The following tables present newly restructured loans during the three and six months ended June 30, 2019 and 2018, respectively, by type of modification:
At June 30, 2019, the Company had $2.0 million of loans that were modified in troubled debt restructurings and impaired, as follows: $261,000 of construction and land development loans, $787,000 of one- to four-family and other residential mortgage loans, $428,000 of commercial real estate loans, $178,000 of commercial business loans and $391,000 of consumer loans. Of the total troubled debt restructurings at June 30, 2019, $1.5 million were accruing interest and $619,000 were classified as substandard using the Companys internal grading system, which is described below. The Company had no troubled debt restructurings which were modified in the previous 12 months and subsequently defaulted during the six months ended June 30, 2019. When loans modified as troubled debt restructurings have subsequent payment defaults, the defaults are factored into the determination of the allowance for loan losses to ensure specific valuation allowances reflect amounts considered uncollectible. At December 31, 2018, the Company had $6.9 million of loans that were modified in troubled debt restructurings and impaired, as follows: $283,000 of construction and land development loans, $3.9 million of one- to four-family and other residential mortgage loans, $1.3 million of commercial real estate loans, $548,000 of commercial business loans and $803,000 of consumer loans. Of the total troubled debt restructurings at December 31, 2018, $4.7 million were accruing interest and $2.5 million were classified as substandard using the Companys internal grading system. The Company had no troubled debt restructurings which were modified in the previous 12 months and subsequently defaulted during the year ended December 31, 2018.
During the three and six months ended June 30, 2019, $14,000 and $63,000 of loans, respectively, all of which consisted of consumer loans, designated as troubled debt restructurings met the criteria for placement back on accrual status. The criteria is generally a minimum of six months of consistent and timely payment performance under original or modified terms. During the three and six months ended June 30, 2018, loans designated as troubled debt restructurings totaling $16,000 and $39,000, respectively, all of which consisted of one- to four-family loans, met the criteria for placement back on accrual status.
The Company reviews the credit quality of its loan portfolio using an internal grading system that classifies loans as Satisfactory, Watch, Special Mention, Substandard and Doubtful. Loans classified as watch are being monitored because of indications of potential weaknesses or deficiencies that may require future classification as special mention or substandard. Special mention loans possess potential weaknesses that deserve managements close attention but do not expose the Bank to a degree of risk that warrants substandard classification. Substandard loans are characterized by the distinct possibility that the Bank will sustain some loss if certain deficiencies are not corrected. Doubtful loans are those having all the weaknesses inherent to those classified Substandard with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Loans not meeting any of the criteria previously described are considered satisfactory. The FDIC-assisted acquired loans are evaluated using this internal grading system. These loans are accounted for in pools. Minimal adverse classification in these acquired loan pools was identified as of June 30, 2019 and December 31, 2018, respectively. See Note 7 for further discussion of the acquired loan pools and the termination of the loss sharing agreements.
The Company evaluates the loan risk internal grading system definitions and allowance for loan loss methodology on an ongoing basis. The general component of the allowance for loan losses is affected by several factors, including, but not limited to, average historical losses, average life of the loans, the current composition of the loan portfolio, current and expected economic conditions, collateral values and internal risk ratings. Management considers all these factors in determining the adequacy of the Companys allowance for loan losses. In early 2018, we expanded our loan risk rating system to allow for further segregation of satisfactory credits. No significant changes were made to the allowance for loan loss methodology during the past year.
The loan grading system is presented by loan class below:
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NOTE 7: ACQUIRED LOANS, LOSS SHARING AGREEMENTS AND FDIC INDEMNIFICATION ASSETS |
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NOTE 7: ACQUIRED LOANS, LOSS SHARING AGREEMENTS AND FDIC INDEMNIFICATION ASSETS | NOTE 7: FDIC-ACQUIRED LOANS
On March 20, 2009, Great Southern Bank entered into a purchase and assumption agreement with loss share with the Federal Deposit Insurance Corporation (FDIC) to assume all of the deposits (excluding brokered deposits) and acquire certain assets of TeamBank, N.A., a full service commercial bank headquartered in Paola, Kansas.
The loans, commitments and foreclosed assets purchased in the TeamBank transaction were covered by a loss sharing agreement between the FDIC and Great Southern Bank. This agreement originally was to extend for ten years for 1-4 family real estate loans and for five years for other loans. The five-year period ended March 31, 2014 and the ten-year period was terminated early, effective April 26, 2016, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded.
On September 4, 2009, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Vantus Bank, a full service thrift headquartered in Sioux City, Iowa.
The loans, commitments and foreclosed assets purchased in the Vantus Bank transaction were covered by a loss sharing agreement between the FDIC and Great Southern Bank. This agreement originally was to extend for ten years for 1-4 family real estate loans and for five years for other loans. The five year period ended September 30, 2014 and the ten-year period was terminated early, effective April 26, 2016, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded.
On October 7, 2011, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Sun Security Bank, a full service bank headquartered in Ellington, Missouri.
The loans and foreclosed assets purchased in the Sun Security Bank transaction were covered by a loss sharing agreement between the FDIC and Great Southern Bank. This agreement originally was to extend for ten years for 1-4 family real estate loans and for five years for other loans but was terminated early, effective April 26, 2016, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded.
On April 27, 2012, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Inter Savings Bank, FSB (InterBank), a full service bank headquartered in Maple Grove, Minnesota.
The loans and foreclosed assets purchased in the InterBank transaction were covered by a loss sharing agreement between the FDIC and Great Southern Bank. This agreement originally was to extend for ten years for 1-4 family real estate loans and for five years for other loans but was terminated early, effective June 9, 2017, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded.
On June 20, 2014, Great Southern Bank entered into a purchase and assumption agreement with the FDIC to purchase a substantial portion of the loans and investment securities, as well as certain other assets, and assume all of the deposits, as well as certain other liabilities, of Valley Bank, a full-service bank headquartered in Moline, Illinois, with significant operations in Iowa. This transaction did not include a loss sharing agreement. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded.
Loss Sharing Agreements. The termination of the loss sharing agreements for the TeamBank, Vantus Bank, Sun Security Bank and InterBank transactions has no impact on the yields for the loans that were previously covered under these agreements. All post-termination recoveries, gains, losses and expenses related to these previously covered assets are recognized entirely by Great Southern Bank since the FDIC no longer shares in such gains or losses. Accordingly, the Companys earnings are positively impacted to the extent the Company recognizes gains on any sales or recoveries in excess of the carrying value of such assets. Similarly, the Companys earnings are negatively impacted to the extent the Company recognizes expenses, losses or charge-offs related to such assets.
The following table presents the balances of the acquired loans related to the various FDIC-assisted transactions at June 30, 2019 and December 31, 2018.
Fair Value and Expected Cash Flows. At the time of these acquisitions, the Company determined the fair value of the loan portfolios based on several assumptions. Factors considered in the valuations were projected cash flows for the loans, type of loan and related collateral, classification status, fixed or variable interest rate, term of loan, current discount rates and whether or not the loan was amortizing. Loans were grouped together according to similar characteristics and were treated in the aggregate when applying various valuation techniques. Management also estimated the amount of credit losses that were expected to be realized for the loan portfolios. The discounted cash flow approach was used to value each pool of loans. For non-performing loans, fair value was estimated by calculating the present value of the recoverable cash flows using a discount rate based on comparable corporate bond rates. This valuation of the acquired loans is a significant component leading to the valuation of the loss sharing assets recorded.
The amount of the estimated cash flows expected to be received from the acquired loan pools in excess of the fair values recorded for the loan pools is referred to as the accretable yield. The accretable yield is recognized as interest income over the estimated lives of the loans. The Company continues to evaluate the fair value of the loans including cash flows expected to be collected. Increases in the Companys cash flow expectations are recognized as increases to the accretable yield while decreases are recognized as impairments through the allowance for loan losses. During the three months ended June 30, 2019 and 2018, improvements in expected cash flows (reclassification of discounts from non-accretable to accretable) related to the acquired loan portfolios resulted in adjustments of $3.7 million and $725,000, respectively, to the accretable yield to be spread over the estimated remaining lives of the loans on a level-yield basis. During the six months ended June 30, 2019 and 2018, improvements in expected cash flows (reclassification of discounts from non-accretable to accretable) related to the acquired loan portfolios resulted in adjustments of $5.3 million and $2.5 million, respectively, to the accretable yield to be spread over the estimated remaining lives of the loans on a level-yield basis.
Because the balance of these adjustments to accretable yield will be recognized generally over the remaining lives of the loan pools, they will impact future periods as well. As of June 30, 2019, the remaining accretable yield adjustment that will affect interest income is $5.1 million. Of the remaining adjustments affecting interest income, we expect to recognize $2.0 million of interest income during the remainder of 2019. Additional adjustments to accretable yield may be recorded in future periods from the FDIC-assisted transactions, as the Company continues to estimate expected cash flows from the acquired loan pools.
The impact to income of adjustments on the Companys financial results is shown below:
Changes in the accretable yield for acquired loan pools were as follows for the three and six months ended June 30, 2019 and 2018:
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Note 8: Other Real Estate Owned |
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Note 8: Other Real Estate Owned | NOTE 8: OTHER REAL ESTATE OWNED AND REPOSSESSIONS
Major classifications of other real estate owned were as follows:
At June 30, 2019, other real estate owned not acquired through foreclosure included eight properties, seven of which were branch locations that were closed and are held for sale, and one of which is land acquired for a potential branch location.
At December 31, 2018, other real estate owned not acquired through foreclosure included nine properties, eight of which were branch locations that were closed and are held for sale, and one of which is land acquired for a potential branch location.
At June 30, 2019, residential mortgage loans totaling $511,000 were in the process of foreclosure, $501,000 of which were acquired loans. Of the $501,000 of acquired loans, $243,000 were previously covered by loss sharing agreements and $258,000 were acquired in the Valley Bank transaction.
At December 31, 2018, residential mortgage loans totaling $1.3 million were in the process of foreclosure, $1.0 million of which were acquired loans. Of the $1.0 million of acquired loans, $873,000 were previously covered by loss sharing agreements and $171,000 were acquired in the Valley Bank transaction.
Expenses applicable to other real estate owned and repossessions included the following:
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Note 9: Premises and Equipment |
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Note 9: Premises and Equipment | NOTE 9: PREMISES AND EQUIPMENT
Major classifications of premises and equipment, stated at cost, were as follows:
Leases. The Company adopted ASU 2016-02, Leases (Topic 842), on January 1, 2019, using the modified retrospective transition approach whereby comparative periods were not restated. The Company also elected certain relief options under the ASU, including the option not to recognize right of use asset and lease liabilities that arise from short-term leases (leases with terms of twelve months or less). The Company has 17 total lease agreements in which it is the lessee, with lease terms exceeding twelve months, substantially all of which are for branch locations and commercial loan production offices. All of our lease agreements where we have offsite ATMs are for terms not exceeding twelve months. Adoption of this ASU resulted in the Company initially recognizing a right of use asset and corresponding lease liability of $9.5 million during the three months ended June 30, 2019. The amount of the right of use asset and corresponding lease liability will fluctuate based on the Companys lease terminations, new leases and lease modifications and renewals, and were both $9.1 million as of June 30, 2019.
All of our leases are classified as operating leases (as they were prior to January 1, 2019), and therefore were previously not recognized on the Companys consolidated statements of financial condition. With the adoption of ASU 2016-02, these operating leases are now included as a right of use asset in the premises and equipment line item on the Companys consolidated statements of financial condition. The corresponding lease liability is included in the accrued expenses and other liabilities line item on the Companys consolidated statements of financial condition. Because these leases are classified as operating leases, the adoption of the new standard did not have a material effect on lease expense on the Companys consolidated statements of income.
ASU 2016-02 provides a number of optional practical expedients in transition. The Company has elected the package of practical expedients, which permits the Company not to reassess under the new standard the prior conclusions about lease identification, lease classification and initial direct costs. The Company also elected the use of the hindsight, a practical expedient which permits the use of information available after lease inception to determine the lease term via the knowledge of renewal options exercised not available as of the leases inception. The practical expedient pertaining to land easements is not applicable to the Company.
ASU 2016-02 also requires certain other accounting elections. The Company elected the short-term lease recognition exemption for all leases that qualify, meaning those with terms under twelve months. Right of use assets or lease liabilities are not to be recognized for short-term leases. The Company also elected the practical expedient to not separate lease and non-lease components for all leases. The Companys short-term leases related to offsite ATMs have both fixed and variable lease payment components, based on the number of transactions at the various ATMs. The variable portion of these lease payments is not material and the total lease expense related to ATMs for the three and six months ended June 30, 2019, was $76,000 and $149,000, respectively.
The calculated amounts of the right of use assets and lease liabilities in the table below are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Companys lease agreements often include one or more options to renew at the Companys discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right of use asset and lease liability. Regarding the discount rate, the ASU requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception over a similar term. The discount rate utilized was the FHLBank borrowing rate for the term corresponding to the expected term of the lease. The expected lease terms range from 3.3 years to 19.9 years with a weighted-average lease term of 11.1 years. The weighted-average discount rate was 3.40%.
For the three months ended June 30, 2019 and 2018, lease expense was $371,000 and $323,000, respectively. For the six months ended June 30, 2019 and 2018, lease expense was $747,000 and $654,000, respectively. At June 30, 2019, future expected lease payments for leases with terms exceeding one year were as follows (in thousands):
The Company does not sublease any of its leased facilities; however, it does lease to other third parties portions of facilities that it owns. In terms of being the lessor in these circumstances, all of these lease agreements are classified as operating leases. In the three and six months ended June 30, 2019, income recognized from these lessor agreements was $285,000 and $561,000, respectively, and was included in occupancy and equipment expense.
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Note 10: Deposits |
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Note 10: Deposits | NOTE 10: DEPOSITS
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Note 11: Advances From Federal Home Loan Bank |
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Note 11: Advances From Federal Home Loan Bank | NOTE 11: ADVANCES FROM FEDERAL HOME LOAN BANK
At June 30, 2019 and December 31, 2018, there were no outstanding term advances from the Federal Home Loan Bank of Des Moines (FHLBank advances). There were overnight borrowings from the Federal Home Loan Bank of Des Moines, which are included below in Note 12.
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Note 12: Securities Sold Under Reverse Repurchase Agreements and Short-term Borrowings |
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Note 12: Securities Sold Under Reverse Repurchase Agreements and Short-term Borrowings | NOTE 12: SECURITIES SOLD UNDER REVERSE REPURCHASE AGREEMENTS AND SHORT-TERM BORROWINGS
The Bank enters into sales of securities under agreements to repurchase (reverse repurchase agreements). Reverse repurchase agreements are treated as financings, and the obligations to repurchase securities sold are reflected as a liability in the statements of financial condition. The dollar amount of securities underlying the agreements remains in the asset accounts. Securities underlying the agreements are being held by the Bank during the agreement period. All agreements are written on a term of one month or less.
At both June 30, 2019 and December 31, 2018, other interest-bearing liabilities consisted of cash collateral held by the Company to satisfy minimum collateral posting thresholds with its derivative dealer counterparties representing the termination value of derivatives, which at such time were in a net asset position. Under the collateral agreements between the parties, either party may choose to provide cash or securities to satisfy its collateral requirements.
The following table represents the Companys securities sold under reverse repurchase agreements, by collateral type and remaining contractual maturity.
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Note 13: Subordinated Notes |
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Note 13: Subordinated Notes | NOTE 13: SUBORDINATED NOTES
On August 8, 2016, the Company completed the public offering and sale of $75.0 million of its subordinated notes. The notes are due August 15, 2026, and have a fixed interest rate of 5.25% until August 15, 2021, at which time the rate becomes floating at a rate equal to three-month LIBOR plus 4.087%. The Company may call the notes at par beginning on August 15, 2021, and on any scheduled interest payment date thereafter. The notes were sold at par, resulting in net proceeds, after underwriting discounts and commissions, legal, accounting and other professional fees, of approximately $73.5 million. Total debt issuance costs of approximately $1.5 million were deferred and are being amortized over the expected life of the notes, which is five years. Amortization of the debt issuance costs during the three months ended June 30, 2019 and 2018, totaled $108,000 and $38,000, respectively, and is included in interest expense on subordinated notes in the consolidated statements of income, resulting in an imputed interest rate of 5.91%. Amortization of the debt issuance costs during the six months ended June 30, 2019 and 2018, totaled $217,000 and $78,000, respectively, and is included in interest expense on subordinated notes in the consolidated statements of income, resulting in an imputed interest rate of 5.91%.
At June 30, 2019 and December 31, 2018, subordinated notes are summarized as follows:
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Note 14: Income Taxes |
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Note 14: Income Taxes | NOTE 14: INCOME TAXES
Reconciliations of the Companys effective tax rates to the statutory corporate tax rates were as follows:
The Tax Act was signed into law on December 22, 2017, making several changes to U. S. corporate income tax laws, including reducing the corporate Federal income tax rate from 35% to 21% effective for tax years beginning on or after January 1, 2018. U. S. GAAP requires that the impact of the provisions of the Tax Act be accounted for in the period of enactment. The Company recognized the income tax effects of the Tax Act in its 2017 financial statements. The Tax Act is complex and required significant detailed analysis. During the preparation of the Companys 2017 income tax returns in 2018, no additional adjustments related to enactment of the Tax Act were identified.
The Company and its consolidated subsidiaries have not been audited recently by the Internal Revenue Service (IRS) and, as such, tax years through December 31, 2005, have been closed without audit. The Company, through one of its subsidiaries, is a partner in two partnerships which have been under Internal Revenue Service examination for 2006 and 2007. As a result, the Companys 2006 and subsequent tax years remain open for examination. The examinations of these partnerships advanced during 2016, 2017, and 2018. One of the partnerships has advanced to Tax Court and has entered a Motion for Entry of Decision with an agreed upon settlement. The other partnership examination was recently completed by the IRS with no change impacting the Companys tax positions. The Company does not currently expect significant adjustments to its financial statements from the partnership matter at the Tax Court.
The Company is currently under State of Missouri income and franchise tax examinations for its 2014 through 2015 tax years. The Company does not currently expect significant adjustments to its financial statements from this state examination.
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Note 15: Disclosures About Fair Value of Financial Instruments |
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Note 15: Disclosures About Fair Value of Financial Instruments | NOTE 15: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
ASC Topic 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Topic 820 also specifies a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
· Quoted prices in active markets for identical assets or liabilities (Level 1): Inputs that are quoted unadjusted prices in active markets for identical assets that the Company has the ability to access at the measurement date. An active market for the asset is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
· Other observable inputs (Level 2): Inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity including quoted prices for similar assets, quoted prices for securities in inactive markets and inputs derived principally from or corroborated by observable market data by correlation or other means.
· Significant unobservable inputs (Level 3): Inputs that reflect assumptions of a source independent of the reporting entity or the reporting entity's own assumptions that are supported by little or no market activity or observable inputs.
Financial instruments are broken down as follows by recurring or nonrecurring measurement status. Recurring assets are initially measured at fair value and are required to be remeasured at fair value in the financial statements at each reporting date. Assets measured on a nonrecurring basis are assets that, due to an event or circumstance, were required to be remeasured at fair value after initial recognition in the financial statements at some time during the reporting period.
The Company considers transfers between the levels of the hierarchy to be recognized at the end of related reporting periods. From December 31, 2018 to June 30, 2019, no assets for which fair value is measured on a recurring basis transferred between any levels of the hierarchy.
Recurring Measurements
The following table presents the fair value measurements of assets recognized in the accompanying statements of financial condition measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fell at June 30, 2019 and December 31, 2018:
The following is a description of inputs and valuation methodologies used for assets recorded at fair value on a recurring basis and recognized in the accompanying statements of financial condition at June 30, 2019 and December 31, 2018, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the six-month period ended June 30, 2019. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.
Available-for-Sale Securities. Investment securities available for sale are recorded at fair value on a recurring basis. The fair values used by the Company are obtained from an independent pricing service, which represent either quoted market prices for the identical asset or fair values determined by pricing models, or other model-based valuation techniques, that consider observable market data, such as interest rate volatilities, LIBOR yield curve, credit spreads and prices from market makers and live trading systems. Recurring Level 2 securities include U.S. government agency securities, mortgage-backed securities, state and municipal bonds and certain other investments. Inputs used for valuing Level 2 securities include observable data that may include dealer quotes, benchmark yields, market spreads, live trading levels and market consensus prepayment speeds, among other things. Additional inputs include indicative values derived from the independent pricing services proprietary computerized models. There were no recurring Level 3 securities at June 30, 2019 or December 31, 2018.
Interest Rate Derivatives. The fair value is estimated using forward-looking interest rate curves and is determined using observable market rates and, therefore, are classified within Level 2 of the valuation hierarchy.
Nonrecurring Measurements
The following tables present the fair value measurements of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2019 and December 31, 2018:
The following is a description of valuation methodologies used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying statements of financial condition, as well as the general classification of such assets pursuant to the valuation hierarchy. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.
Loans Held for Sale. Mortgage loans held for sale are recorded at the lower of carrying value or fair value. The fair value of mortgage loans held for sale is based on what secondary markets are currently offering for portfolios with similar characteristics. As such, the Company classifies mortgage loans held for sale as Nonrecurring Level 2. Write-downs to fair value typically do not occur as the Company generally enters into commitments to sell individual mortgage loans at the time the loan is originated to reduce market risk. The Company typically does not have commercial loans held for sale. At June 30, 2019 and December 31, 2018, the aggregate fair value of mortgage loans held for sale exceeded their cost. Accordingly, no mortgage loans held for sale were marked down and reported at fair value.
Impaired Loans. A loan is considered to be impaired when it is probable that all of the principal and interest due may not be collected according to its contractual terms. Generally, when a loan is considered impaired, the amount of reserve required under FASB ASC 310, Receivables, is measured based on the fair value of the underlying collateral. The Company makes such measurements on all material loans deemed impaired using the fair value of the collateral for collateral dependent loans. The fair value of collateral used by the Company is determined by obtaining an observable market price or by obtaining an appraised value from an independent, licensed or certified appraiser, using observable market data. This data includes information such as property sales comparisons and capitalization rates of similar properties sold within the market, expected future cash flows or earnings of the subject property based on current market expectations, and other relevant factors. All appraised values are adjusted for market-related trends based on the Companys experience in sales and other appraisals of similar property types as well as estimated selling costs. Each quarter management reviews all collateral dependent impaired loans on a loan-by-loan basis to determine whether updated appraisals are necessary based on loan performance, collateral type and guarantor support. At times, the Company measures the fair value of collateral dependent impaired loans using appraisals with dates prior to one year from the date of review. These appraisals are discounted by applying current, observable market data about similar property types such as sales contracts, estimations of value by individuals familiar with the market, other appraisals, sales or collateral assessments based on current market activity until updated appraisals are obtained. Depending on the length of time since an appraisal was performed and the data provided through our reviews, these appraisals are typically discounted 10-40%. The policy described above is the same for all types of collateral dependent impaired loans secured by real estate.
The Company records impaired loans as Nonrecurring Level 3. If a loans fair value as estimated by the Company is less than its carrying value, the Company either records a charge-off of the portion of the loan that exceeds the fair value or establishes a reserve within the allowance for loan losses specific to the loan. Loans for which such charge-offs or reserves were recorded during the six months ended June 30, 2019 or the year ended December 31, 2018, are shown in the table above (net of reserves).
Foreclosed Assets Held for Sale. Foreclosed assets held for sale are initially recorded at fair value less estimated cost to sell at the date of foreclosure. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less estimated cost to sell. Foreclosed assets held for sale are classified within Level 3 of the fair value hierarchy. The foreclosed assets represented in the table above have been re-measured during the six months ended June 30, 2019 or the year ended December 31, 2018, subsequent to their initial transfer to foreclosed assets.
Fair Value of Financial Instruments
The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying statements of financial condition at amounts other than fair value.
Cash and Cash Equivalents and Federal Home Loan Bank Stock. The carrying amount approximates fair value.
Loans and Interest Receivable. The fair value of loans is estimated on an exit price basis incorporating contractual cash flows, prepayments discount spreads, credit losses and liquidity premiums. Loans with similar characteristics were aggregated for purposes of the calculations. The carrying amount of accrued interest receivable approximates its fair value.
Deposits and Accrued Interest Payable. The fair value of demand deposits and savings accounts is the amount payable on demand at the reporting date, i.e., their carrying amounts. The fair value of fixed maturity certificates of deposit is estimated using a discounted cash flow calculation using the average advances yield curve from 11 districts of the FHLB for the as of date. The carrying amount of accrued interest payable approximates its fair value.
Short-Term Borrowings. The carrying amount approximates fair value.
Subordinated Debentures Issued to Capital Trusts. The subordinated debentures have floating rates that reset quarterly. The carrying amount of these debentures approximates their fair value.
Subordinated Notes. The fair values used by the Company are obtained from independent sources and are derived from quoted market prices of the Companys subordinated notes and quoted market prices of other subordinated debt instruments with similar characteristics.
Commitments to Originate Loans, Letters of Credit and Lines of Credit. The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date.
The following table presents estimated fair values of the Companys financial instruments not recorded at fair value on the statements of financial condition. The fair values of certain of these instruments were calculated by discounting expected cash flows, which method involves significant judgments by management and uncertainties. Fair value is the estimated amount at which financial assets or liabilities could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Because no market exists for certain of these financial instruments and because management does not intend to sell these financial instruments, the Company does not know whether the fair values shown below represent values at which the respective financial instruments could be sold individually or in the aggregate.
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Note 16: Derivatives and Hedging Activities |
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Note 16: Derivatives and Hedging Activities | NOTE 16: DERIVATIVES AND HEDGING ACTIVITIES
Risk Management Objective of Using Derivatives
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its assets and liabilities. In the normal course of business, the Company may use derivative financial instruments (primarily interest rate swaps) from time to time to assist in its interest rate risk management. The Company has interest rate derivatives that result from a service provided to certain qualifying loan customers that are not used to manage interest rate risk in the Companys assets or liabilities and are not designated in a qualifying hedging relationship. The Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions. In addition, the Company has interest rate derivatives that are designated in a qualified hedging relationship.
Nondesignated Hedges
The Company has interest rate swaps that are not designated as qualifying hedging relationships. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain loan customers, which the Company began offering during 2011. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings.
As part of the Valley Bank FDIC-assisted acquisition, the Company acquired seven loans with related interest rate swaps. Valleys swap program differed from the Companys in that Valley did not have back to back swaps with the customer and a counterparty. Five of the seven acquired loans with interest rate swaps have paid off. The aggregate notional amount of the two remaining Valley swaps was $736,000 at June 30, 2019. At June 30, 2019, excluding the Valley Bank swaps, the Company had 18 interest rate swaps totaling $69.6 million in notional amount with commercial customers, and 18 interest rate swaps with the same aggregate notional amount with third parties related to its program. In addition, the Company has three participation loans purchased totaling $30.7 million, in which the lead institution has an interest rate swap with its customer and the economics of the counterparty swap are passed along to the Company through the loan participation. At December 31, 2018, excluding the Valley Bank swaps, the Company had 18 interest rate swaps totaling $78.5 million in notional amount with commercial customers, and 18 interest rate swaps with the same aggregate notional amount with third parties related to its program. During the three months ended June 30, 2019 and 2018, the Company recognized net gains (losses) of $(44,000) and $11,000, respectively, in noninterest income related to changes in the fair value of these swaps. During the six months ended June 30, 2019 and 2018, the Company recognized net gains (losses) of $(68,000) and $48,000, respectively, in noninterest income related to changes in the fair value of these swaps.
Cash Flow Hedges
Interest Rate Swap. As a strategy to maintain acceptable levels of exposure to the risk of changes in future cash flows due to interest rate fluctuations, in October 2018, the Company entered into an interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap is $400 million with a termination date of October 6, 2025. Under the terms of the swap, the Company receives a fixed rate of interest of 3.018% and pays a floating rate of interest equal to one-month USD-LIBOR. The floating rate resets monthly and net settlements of interest due to/from the counterparty also occur monthly. The floating rate of interest was 2.4185% as of June 30, 2019. Therefore, in the near term, the Company will receive net interest settlements which will be recorded as loan interest income, to the extent that the fixed rate of interest continues to exceed one-month USD-LIBOR. If one-month USD-LIBOR exceeds the fixed rate of interest in future periods, the Company will be required to pay net settlements to the counterparty and will record those net payments as a reduction of interest income on loans. The Company recorded interest income related to this swap transaction of $568,000 and $1.1 million during the three and six months ended June 30, 2019, respectively. The effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affected earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. During both the three and six months ended June 30, 2019, the Company recognized $-0- in noninterest income related to changes in the fair value of this derivative.
The table below presents the fair value of the Companys derivative financial instruments as well as their classification on the Consolidated Statements of Financial Condition:
The following table presents the effect of cash flow hedge accounting on the statements of comprehensive income:
The following table presents the effect of cash flow hedge accounting on the statements of operations:
Agreements with Derivative Counterparties
The Company has agreements with its derivative counterparties. If the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. If the Bank fails to maintain its status as a well-capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements. Similarly, the Company could be required to settle its obligations under certain of its agreements if certain regulatory events occur, such as the issuance of a formal directive, or if the Companys credit rating is downgraded below a specified level.
As of June 30, 2019, the termination value of derivatives with our derivative dealer counterparties (related to loan level swaps with commercial lending customers) in a net liability position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $1.1 million. In addition, as of June 30, 2019, the termination value of derivatives with our derivative dealer counterparty (related to the balance sheet hedge commenced in October 2018) in a net asset position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $30.7 million. The Company has minimum collateral posting thresholds with its derivative dealer counterparties. At June 30, 2019, the Companys activity with one of its derivative counterparties met the level at which the minimum collateral posting thresholds take effect (collateral to be received by the Company) and the derivative counterparties had posted collateral of $30.8 million to the Company to satisfy the balance sheet hedge. Additionally, the Companys activity with one of its derivative counterparties met the level at which the minimum collateral posting thresholds take effect (collateral to be given by the Company) and the Company had posted collateral of $686,000 to the derivative counterparties to satisfy the loan level agreements. As of December 31, 2018, the termination value of derivatives with our derivative dealer counterparties (related to loan level swaps with commercial lending customers) in a net asset position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $396,000. In addition, as of December 31, 2018, the termination value of derivatives with our derivative dealer counterparty (related to the balance sheet hedge commenced in October 2018) in a net asset position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $12.3 million. The Company has minimum collateral posting thresholds with its derivative dealer counterparties. At December 31, 2018, the Companys activity with certain of its derivative counterparties met the level at which the minimum collateral posting thresholds take effect (collateral to be received by the Company) and the derivative counterparties had posted collateral of $704,000 to the Company to satisfy the loan level agreements and collateral of $12.8 million to the Company to satisfy the balance sheet hedge.
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NOTE 1: BASIS OF PRESENTATION: Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Policies | |
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies | The accompanying unaudited interim consolidated financial statements of Great Southern Bancorp, Inc. (the "Company" or "Great Southern") have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The financial statements presented herein reflect all adjustments which are, in the opinion of management, necessary to fairly present the financial condition, results of operations, changes in stockholders equity and cash flows of the Company as of the dates and for the periods presented. Those adjustments consist only of normal recurring adjustments. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the full year. The consolidated statement of financial condition of the Company as of December 31, 2018, has been derived from the audited consolidated statement of financial condition of the Company as of that date. Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on net income.
Certain information and note disclosures normally included in the Company's annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for 2018 filed with the Securities and Exchange Commission. |
NOTE 2: NATURE OF OPERATIONS AND OPERATING SEGMENTS: Segment Reporting, Policy (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Policies | |
Segment Reporting, Policy | The Companys banking operation is its only reportable segment. The banking operation is principally engaged in the business of originating residential and commercial real estate loans, construction loans, commercial business loans and consumer loans and funding these loans by attracting deposits from the general public, accepting brokered deposits and borrowing from the Federal Home Loan Bank and others. The operating results of this segment are regularly reviewed by management to make decisions about resource allocations and to assess performance. Selected information is not presented separately for the Companys reportable segment, as there is no material difference between that information and the corresponding information in the consolidated financial statements. |
NOTE 4: EARNINGS PER SHARE: Earnings Per Share, Policy (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Policies | |
Earnings Per Share, Policy | Options outstanding at June 30, 2019 and 2018, to purchase 309,000 and 161,400 shares of common stock, respectively, were not included in the computation of diluted earnings per common share for each of the three and six month periods because the exercise prices of such options were greater than the average market prices of the common stock for the three and six months ended June 30, 2019 and 2018, respectively. |
NOTE 5: INVESTMENT SECURITIES: Investment, Policy (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Policies | |
Investment, Policy | Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at June 30, 2019 and December 31, 2018, was approximately $61.6 million and $95.7 million, respectively, which is approximately 20.1% and 39.2% of the Companys available-for-sale investment portfolio, respectively.
Based on an evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these debt securities are temporary. |
NOTE 6: LOANS AND ALLOWANCE FOR LOAN LOSSES: Loan Portfolio Credit Quality Internal Grading System Policy (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Policies | |
Loan Portfolio Credit Quality Internal Grading System Policy | The Company reviews the credit quality of its loan portfolio using an internal grading system that classifies loans as Satisfactory, Watch, Special Mention, Substandard and Doubtful. Loans classified as watch are being monitored because of indications of potential weaknesses or deficiencies that may require future classification as special mention or substandard. Special mention loans possess potential weaknesses that deserve managements close attention but do not expose the Bank to a degree of risk that warrants substandard classification. Substandard loans are characterized by the distinct possibility that the Bank will sustain some loss if certain deficiencies are not corrected. Doubtful loans are those having all the weaknesses inherent to those classified Substandard with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Loans not meeting any of the criteria previously described are considered satisfactory. The FDIC-assisted acquired loans are evaluated using this internal grading system. These loans are accounted for in pools. Minimal adverse classification in these acquired loan pools was identified as of June 30, 2019 and December 31, 2018, respectively. See Note 7 for further discussion of the acquired loan pools and the termination of the loss sharing agreements.
The Company evaluates the loan risk internal grading system definitions and allowance for loan loss methodology on an ongoing basis. The general component of the allowance for loan losses is affected by several factors, including, but not limited to, average historical losses, average life of the loans, the current composition of the loan portfolio, current and expected economic conditions, collateral values and internal risk ratings. Management considers all these factors in determining the adequacy of the Companys allowance for loan losses. In early 2018, we expanded our loan risk rating system to allow for further segregation of satisfactory credits. No significant changes were made to the allowance for loan loss methodology during the past year. |
NOTE 7: ACQUIRED LOANS, LOSS SHARING AGREEMENTS AND FDIC INDEMNIFICATION ASSETS: Business Combinations Policy (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
TeamBank | |
Business Combinations Policy | On March 20, 2009, Great Southern Bank entered into a purchase and assumption agreement with loss share with the Federal Deposit Insurance Corporation (FDIC) to assume all of the deposits (excluding brokered deposits) and acquire certain assets of TeamBank, N.A., a full service commercial bank headquartered in Paola, Kansas.
The loans, commitments and foreclosed assets purchased in the TeamBank transaction were covered by a loss sharing agreement between the FDIC and Great Southern Bank. This agreement originally was to extend for ten years for 1-4 family real estate loans and for five years for other loans. The five-year period ended March 31, 2014 and the ten-year period was terminated early, effective April 26, 2016, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. |
Vantus Bank | |
Business Combinations Policy | On September 4, 2009, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Vantus Bank, a full service thrift headquartered in Sioux City, Iowa.
The loans, commitments and foreclosed assets purchased in the Vantus Bank transaction were covered by a loss sharing agreement between the FDIC and Great Southern Bank. This agreement originally was to extend for ten years for 1-4 family real estate loans and for five years for other loans. The five year period ended September 30, 2014 and the ten-year period was terminated early, effective April 26, 2016, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. |
Sun Security Bank | |
Business Combinations Policy | On October 7, 2011, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Sun Security Bank, a full service bank headquartered in Ellington, Missouri.
The loans and foreclosed assets purchased in the Sun Security Bank transaction were covered by a loss sharing agreement between the FDIC and Great Southern Bank. This agreement originally was to extend for ten years for 1-4 family real estate loans and for five years for other loans but was terminated early, effective April 26, 2016, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. |
InterBank | |
Business Combinations Policy | On April 27, 2012, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Inter Savings Bank, FSB (InterBank), a full service bank headquartered in Maple Grove, Minnesota.
The loans and foreclosed assets purchased in the InterBank transaction were covered by a loss sharing agreement between the FDIC and Great Southern Bank. This agreement originally was to extend for ten years for 1-4 family real estate loans and for five years for other loans but was terminated early, effective June 9, 2017, by mutual agreement of Great Southern Bank and the FDIC. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. |
Valley Bank | |
Business Combinations Policy | On June 20, 2014, Great Southern Bank entered into a purchase and assumption agreement with the FDIC to purchase a substantial portion of the loans and investment securities, as well as certain other assets, and assume all of the deposits, as well as certain other liabilities, of Valley Bank, a full-service bank headquartered in Moline, Illinois, with significant operations in Iowa. This transaction did not include a loss sharing agreement. Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. |
NOTE 7: ACQUIRED LOANS, LOSS SHARING AGREEMENTS AND FDIC INDEMNIFICATION ASSETS: Loss Sharing Agreement Policy (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Policies | |
Loss Sharing Agreement Policy | Loss Sharing Agreements. The termination of the loss sharing agreements for the TeamBank, Vantus Bank, Sun Security Bank and InterBank transactions has no impact on the yields for the loans that were previously covered under these agreements. All post-termination recoveries, gains, losses and expenses related to these previously covered assets are recognized entirely by Great Southern Bank since the FDIC no longer shares in such gains or losses. Accordingly, the Companys earnings are positively impacted to the extent the Company recognizes gains on any sales or recoveries in excess of the carrying value of such assets. Similarly, the Companys earnings are negatively impacted to the extent the Company recognizes expenses, losses or charge-offs related to such assets. |
NOTE 7: ACQUIRED LOANS, LOSS SHARING AGREEMENTS AND FDIC INDEMNIFICATION ASSETS: Business Acquisition Fair Value and Expected Cash Flows Policy (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Policies | |
Business Acquisition Fair Value and Expected Cash Flows Policy | Fair Value and Expected Cash Flows. At the time of these acquisitions, the Company determined the fair value of the loan portfolios based on several assumptions. Factors considered in the valuations were projected cash flows for the loans, type of loan and related collateral, classification status, fixed or variable interest rate, term of loan, current discount rates and whether or not the loan was amortizing. Loans were grouped together according to similar characteristics and were treated in the aggregate when applying various valuation techniques. Management also estimated the amount of credit losses that were expected to be realized for the loan portfolios. The discounted cash flow approach was used to value each pool of loans. For non-performing loans, fair value was estimated by calculating the present value of the recoverable cash flows using a discount rate based on comparable corporate bond rates. This valuation of the acquired loans is a significant component leading to the valuation of the loss sharing assets recorded.
The amount of the estimated cash flows expected to be received from the acquired loan pools in excess of the fair values recorded for the loan pools is referred to as the accretable yield. The accretable yield is recognized as interest income over the estimated lives of the loans. The Company continues to evaluate the fair value of the loans including cash flows expected to be collected. Increases in the Companys cash flow expectations are recognized as increases to the accretable yield while decreases are recognized as impairments through the allowance for loan losses. During the three months ended June 30, 2019 and 2018, improvements in expected cash flows (reclassification of discounts from non-accretable to accretable) related to the acquired loan portfolios resulted in adjustments of $3.7 million and $725,000, respectively, to the accretable yield to be spread over the estimated remaining lives of the loans on a level-yield basis. During the six months ended June 30, 2019 and 2018, improvements in expected cash flows (reclassification of discounts from non-accretable to accretable) related to the acquired loan portfolios resulted in adjustments of $5.3 million and $2.5 million, respectively, to the accretable yield to be spread over the estimated remaining lives of the loans on a level-yield basis.
Because the balance of these adjustments to accretable yield will be recognized generally over the remaining lives of the loan pools, they will impact future periods as well. As of June 30, 2019, the remaining accretable yield adjustment that will affect interest income is $5.1 million. Of the remaining adjustments affecting interest income, we expect to recognize $2.0 million of interest income during the remainder of 2019. Additional adjustments to accretable yield may be recorded in future periods from the FDIC-assisted transactions, as the Company continues to estimate expected cash flows from the acquired loan pools.
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Note 9: Premises and Equipment: Lessee, Operating Lease, Disclosure (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Policies | |
Lessee, Operating Lease, Disclosure | Leases. The Company adopted ASU 2016-02, Leases (Topic 842), on January 1, 2019, using the modified retrospective transition approach whereby comparative periods were not restated. The Company also elected certain relief options under the ASU, including the option not to recognize right of use asset and lease liabilities that arise from short-term leases (leases with terms of twelve months or less). The Company has 17 total lease agreements in which it is the lessee, with lease terms exceeding twelve months, substantially all of which are for branch locations and commercial loan production offices. All of our lease agreements where we have offsite ATMs are for terms not exceeding twelve months. Adoption of this ASU resulted in the Company initially recognizing a right of use asset and corresponding lease liability of $9.5 million during the three months ended June 30, 2019. The amount of the right of use asset and corresponding lease liability will fluctuate based on the Companys lease terminations, new leases and lease modifications and renewals, and were both $9.1 million as of June 30, 2019.
All of our leases are classified as operating leases (as they were prior to January 1, 2019), and therefore were previously not recognized on the Companys consolidated statements of financial condition. With the adoption of ASU 2016-02, these operating leases are now included as a right of use asset in the premises and equipment line item on the Companys consolidated statements of financial condition. The corresponding lease liability is included in the accrued expenses and other liabilities line item on the Companys consolidated statements of financial condition. Because these leases are classified as operating leases, the adoption of the new standard did not have a material effect on lease expense on the Companys consolidated statements of income.
ASU 2016-02 provides a number of optional practical expedients in transition. The Company has elected the package of practical expedients, which permits the Company not to reassess under the new standard the prior conclusions about lease identification, lease classification and initial direct costs. The Company also elected the use of the hindsight, a practical expedient which permits the use of information available after lease inception to determine the lease term via the knowledge of renewal options exercised not available as of the leases inception. The practical expedient pertaining to land easements is not applicable to the Company.
ASU 2016-02 also requires certain other accounting elections. The Company elected the short-term lease recognition exemption for all leases that qualify, meaning those with terms under twelve months. Right of use assets or lease liabilities are not to be recognized for short-term leases. The Company also elected the practical expedient to not separate lease and non-lease components for all leases. The Companys short-term leases related to offsite ATMs have both fixed and variable lease payment components, based on the number of transactions at the various ATMs. The variable portion of these lease payments is not material and the total lease expense related to ATMs for the three and six months ended June 30, 2019, was $76,000 and $149,000, respectively.
The calculated amounts of the right of use assets and lease liabilities in the table below are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Companys lease agreements often include one or more options to renew at the Companys discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the right of use asset and lease liability. Regarding the discount rate, the ASU requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is rarely determinable, the Company utilizes its incremental borrowing rate at lease inception over a similar term. The discount rate utilized was the FHLBank borrowing rate for the term corresponding to the expected term of the lease. The expected lease terms range from 3.3 years to 19.9 years with a weighted-average lease term of 11.1 years. The weighted-average discount rate was 3.40%. |
Note 14: Income Taxes: Income Tax, Policy (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Policies | |
Income Tax, Policy | The Tax Act was signed into law on December 22, 2017, making several changes to U. S. corporate income tax laws, including reducing the corporate Federal income tax rate from 35% to 21% effective for tax years beginning on or after January 1, 2018. U. S. GAAP requires that the impact of the provisions of the Tax Act be accounted for in the period of enactment. The Company recognized the income tax effects of the Tax Act in its 2017 financial statements. The Tax Act is complex and required significant detailed analysis. During the preparation of the Companys 2017 income tax returns in 2018, no additional adjustments related to enactment of the Tax Act were identified.
The Company and its consolidated subsidiaries have not been audited recently by the Internal Revenue Service (IRS) and, as such, tax years through December 31, 2005, have been closed without audit. The Company, through one of its subsidiaries, is a partner in two partnerships which have been under Internal Revenue Service examination for 2006 and 2007. As a result, the Companys 2006 and subsequent tax years remain open for examination. The examinations of these partnerships advanced during 2016, 2017, and 2018. One of the partnerships has advanced to Tax Court and has entered a Motion for Entry of Decision with an agreed upon settlement. The other partnership examination was recently completed by the IRS with no change impacting the Companys tax positions. The Company does not currently expect significant adjustments to its financial statements from the partnership matter at the Tax Court.
The Company is currently under State of Missouri income and franchise tax examinations for its 2014 through 2015 tax years. The Company does not currently expect significant adjustments to its financial statements from this state examination. |
Note 15: Disclosures About Fair Value of Financial Instruments: Fair Value Measurement, Policy (Policies) |
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Fair Value Measurement, Policy | ASC Topic 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Topic 820 also specifies a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
· Quoted prices in active markets for identical assets or liabilities (Level 1): Inputs that are quoted unadjusted prices in active markets for identical assets that the Company has the ability to access at the measurement date. An active market for the asset is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
· Other observable inputs (Level 2): Inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity including quoted prices for similar assets, quoted prices for securities in inactive markets and inputs derived principally from or corroborated by observable market data by correlation or other means.
· Significant unobservable inputs (Level 3): Inputs that reflect assumptions of a source independent of the reporting entity or the reporting entity's own assumptions that are supported by little or no market activity or observable inputs.
Financial instruments are broken down as follows by recurring or nonrecurring measurement status. Recurring assets are initially measured at fair value and are required to be remeasured at fair value in the financial statements at each reporting date. Assets measured on a nonrecurring basis are assets that, due to an event or circumstance, were required to be remeasured at fair value after initial recognition in the financial statements at some time during the reporting period.
The Company considers transfers between the levels of the hierarchy to be recognized at the end of related reporting periods. From December 31, 2018 to June 30, 2019, no assets for which fair value is measured on a recurring basis transferred between any levels of the hierarchy.
Recurring Measurements
The following table presents the fair value measurements of assets recognized in the accompanying statements of financial condition measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fell at June 30, 2019 and December 31, 2018:
The following is a description of inputs and valuation methodologies used for assets recorded at fair value on a recurring basis and recognized in the accompanying statements of financial condition at June 30, 2019 and December 31, 2018, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the six-month period ended June 30, 2019. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.
Available-for-Sale Securities. Investment securities available for sale are recorded at fair value on a recurring basis. The fair values used by the Company are obtained from an independent pricing service, which represent either quoted market prices for the identical asset or fair values determined by pricing models, or other model-based valuation techniques, that consider observable market data, such as interest rate volatilities, LIBOR yield curve, credit spreads and prices from market makers and live trading systems. Recurring Level 2 securities include U.S. government agency securities, mortgage-backed securities, state and municipal bonds and certain other investments. Inputs used for valuing Level 2 securities include observable data that may include dealer quotes, benchmark yields, market spreads, live trading levels and market consensus prepayment speeds, among other things. Additional inputs include indicative values derived from the independent pricing services proprietary computerized models. There were no recurring Level 3 securities at June 30, 2019 or December 31, 2018.
Interest Rate Derivatives. The fair value is estimated using forward-looking interest rate curves and is determined using observable market rates and, therefore, are classified within Level 2 of the valuation hierarchy.
Nonrecurring Measurements
The following tables present the fair value measurements of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2019 and December 31, 2018:
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Note 15: Disclosures About Fair Value of Financial Instruments: Fair Value Loans Held for Sale Policy (Policies) |
6 Months Ended |
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Jun. 30, 2019 | |
Policies | |
Fair Value Loans Held for Sale Policy | Loans Held for Sale. Mortgage loans held for sale are recorded at the lower of carrying value or fair value. The fair value of mortgage loans held for sale is based on what secondary markets are currently offering for portfolios with similar characteristics. As such, the Company classifies mortgage loans held for sale as Nonrecurring Level 2. Write-downs to fair value typically do not occur as the Company generally enters into commitments to sell individual mortgage loans at the time the loan is originated to reduce market risk. The Company typically does not have commercial loans held for sale. At June 30, 2019 and December 31, 2018, the aggregate fair value of mortgage loans held for sale exceeded their cost. Accordingly, no mortgage loans held for sale were marked down and reported at fair value. |
Note 15: Disclosures About Fair Value of Financial Instruments: Fair Value Impaired Loans Policy (Policies) |
6 Months Ended |
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Jun. 30, 2019 | |
Policies | |
Fair Value Impaired Loans Policy | Impaired Loans. A loan is considered to be impaired when it is probable that all of the principal and interest due may not be collected according to its contractual terms. Generally, when a loan is considered impaired, the amount of reserve required under FASB ASC 310, Receivables, is measured based on the fair value of the underlying collateral. The Company makes such measurements on all material loans deemed impaired using the fair value of the collateral for collateral dependent loans. The fair value of collateral used by the Company is determined by obtaining an observable market price or by obtaining an appraised value from an independent, licensed or certified appraiser, using observable market data. This data includes information such as property sales comparisons and capitalization rates of similar properties sold within the market, expected future cash flows or earnings of the subject property based on current market expectations, and other relevant factors. All appraised values are adjusted for market-related trends based on the Companys experience in sales and other appraisals of similar property types as well as estimated selling costs. Each quarter management reviews all collateral dependent impaired loans on a loan-by-loan basis to determine whether updated appraisals are necessary based on loan performance, collateral type and guarantor support. At times, the Company measures the fair value of collateral dependent impaired loans using appraisals with dates prior to one year from the date of review. These appraisals are discounted by applying current, observable market data about similar property types such as sales contracts, estimations of value by individuals familiar with the market, other appraisals, sales or collateral assessments based on current market activity until updated appraisals are obtained. Depending on the length of time since an appraisal was performed and the data provided through our reviews, these appraisals are typically discounted 10-40%. The policy described above is the same for all types of collateral dependent impaired loans secured by real estate.
The Company records impaired loans as Nonrecurring Level 3. If a loans fair value as estimated by the Company is less than its carrying value, the Company either records a charge-off of the portion of the loan that exceeds the fair value or establishes a reserve within the allowance for loan losses specific to the loan. Loans for which such charge-offs or reserves were recorded during the six months ended June 30, 2019 or the year ended December 31, 2018, are shown in the table above (net of reserves). |
Note 15: Disclosures About Fair Value of Financial Instruments: Fair Value Foreclosed Assets Held for Sale Policy (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Policies | |
Fair Value Foreclosed Assets Held for Sale Policy | Foreclosed Assets Held for Sale. Foreclosed assets held for sale are initially recorded at fair value less estimated cost to sell at the date of foreclosure. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less estimated cost to sell. Foreclosed assets held for sale are classified within Level 3 of the fair value hierarchy. The foreclosed assets represented in the table above have been re-measured during the six months ended June 30, 2019 or the year ended December 31, 2018, subsequent to their initial transfer to foreclosed assets. |
Note 15: Disclosures About Fair Value of Financial Instruments: Fair Value Financial Instruments Policy (Policies) |
6 Months Ended |
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Jun. 30, 2019 | |
Policies | |
Fair Value Financial Instruments Policy | Fair Value of Financial Instruments
The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying statements of financial condition at amounts other than fair value. |
Note 15: Disclosures About Fair Value of Financial Instruments: Fair Value Cash and Cash Equivalents and Federal home Loan Bank Stock Policy (Policies) |
6 Months Ended |
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Jun. 30, 2019 | |
Policies | |
Fair Value Cash and Cash Equivalents and Federal home Loan Bank Stock Policy | Cash and Cash Equivalents and Federal Home Loan Bank Stock. The carrying amount approximates fair value. |
Note 15: Disclosures About Fair Value of Financial Instruments: Fair Value Loans and Interest Receivable Policy (Policies) |
6 Months Ended |
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Jun. 30, 2019 | |
Policies | |
Fair Value Loans and Interest Receivable Policy | Loans and Interest Receivable. The fair value of loans is estimated on an exit price basis incorporating contractual cash flows, prepayments discount spreads, credit losses and liquidity premiums. Loans with similar characteristics were aggregated for purposes of the calculations. The carrying amount of accrued interest receivable approximates its fair value. |
Note 15: Disclosures About Fair Value of Financial Instruments: Fair Value Deposits and Accrued Interest Payable Policy (Policies) |
6 Months Ended |
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Jun. 30, 2019 | |
Policies | |
Fair Value Deposits and Accrued Interest Payable Policy | Deposits and Accrued Interest Payable. The fair value of demand deposits and savings accounts is the amount payable on demand at the reporting date, i.e., their carrying amounts. The fair value of fixed maturity certificates of deposit is estimated using a discounted cash flow calculation using the average advances yield curve from 11 districts of the FHLB for the as of date. The carrying amount of accrued interest payable approximates its fair value. |
Note 15: Disclosures About Fair Value of Financial Instruments: Fair Value Short Term Borrowings Policy (Policies) |
6 Months Ended |
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Jun. 30, 2019 | |
Policies | |
Fair Value Short Term Borrowings Policy | Short-Term Borrowings. The carrying amount approximates fair value. |
Note 15: Disclosures About Fair Value of Financial Instruments: Fair Value Subordinated Debentures Policy (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Policies | |
Fair Value Subordinated Debentures Policy | Subordinated Debentures Issued to Capital Trusts. The subordinated debentures have floating rates that reset quarterly. The carrying amount of these debentures approximates their fair value. |
Note 15: Disclosures About Fair Value of Financial Instruments: Subordinated Notes Policy (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Policies | |
Subordinated Notes Policy | Subordinated Notes. The fair values used by the Company are obtained from independent sources and are derived from quoted market prices of the Companys subordinated notes and quoted market prices of other subordinated debt instruments with similar characteristics. |
Note 15: Disclosures About Fair Value of Financial Instruments: Fair Value Commitments to Originate Loans, Letters of Credit and Lines of Credit Policy (Policies) |
6 Months Ended |
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Jun. 30, 2019 | |
Policies | |
Fair Value Commitments to Originate Loans, Letters of Credit and Lines of Credit Policy | Commitments to Originate Loans, Letters of Credit and Lines of Credit. The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date. |
Note 16: Derivatives and Hedging Activities: Risk Management Objective of Using Derivatives (Policies) |
6 Months Ended |
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Jun. 30, 2019 | |
Policies | |
Risk Management Objective of Using Derivatives | The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its assets and liabilities. In the normal course of business, the Company may use derivative financial instruments (primarily interest rate swaps) from time to time to assist in its interest rate risk management. The Company has interest rate derivatives that result from a service provided to certain qualifying loan customers that are not used to manage interest rate risk in the Companys assets or liabilities and are not designated in a qualifying hedging relationship. The Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions. In addition, the Company has interest rate derivatives that are designated in a qualified hedging relationship. |
Note 16: Derivatives and Hedging Activities: Nondesignated Hedges (Policies) |
6 Months Ended |
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Jun. 30, 2019 | |
Policies | |
Nondesignated Hedges | The Company has interest rate swaps that are not designated as qualifying hedging relationships. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain loan customers, which the Company began offering during 2011. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting interest rate swaps that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings.
As part of the Valley Bank FDIC-assisted acquisition, the Company acquired seven loans with related interest rate swaps. Valleys swap program differed from the Companys in that Valley did not have back to back swaps with the customer and a counterparty. Five of the seven acquired loans with interest rate swaps have paid off. The aggregate notional amount of the two remaining Valley swaps was $736,000 at June 30, 2019. At June 30, 2019, excluding the Valley Bank swaps, the Company had 18 interest rate swaps totaling $69.6 million in notional amount with commercial customers, and 18 interest rate swaps with the same aggregate notional amount with third parties related to its program. In addition, the Company has three participation loans purchased totaling $30.7 million, in which the lead institution has an interest rate swap with its customer and the economics of the counterparty swap are passed along to the Company through the loan participation. At December 31, 2018, excluding the Valley Bank swaps, the Company had 18 interest rate swaps totaling $78.5 million in notional amount with commercial customers, and 18 interest rate swaps with the same aggregate notional amount with third parties related to its program. During the three months ended June 30, 2019 and 2018, the Company recognized net gains (losses) of $(44,000) and $11,000, respectively, in noninterest income related to changes in the fair value of these swaps. During the six months ended June 30, 2019 and 2018, the Company recognized net gains (losses) of $(68,000) and $48,000, respectively, in noninterest income related to changes in the fair value of these swaps. |
Note 16: Derivatives and Hedging Activities: Cash Flow Hedges (Policies) |
6 Months Ended |
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Jun. 30, 2019 | |
Policies | |
Cash Flow Hedges | Interest Rate Swap. As a strategy to maintain acceptable levels of exposure to the risk of changes in future cash flows due to interest rate fluctuations, in October 2018, the Company entered into an interest rate swap transaction as part of its ongoing interest rate management strategies to hedge the risk of its floating rate loans. The notional amount of the swap is $400 million with a termination date of October 6, 2025. Under the terms of the swap, the Company receives a fixed rate of interest of 3.018% and pays a floating rate of interest equal to one-month USD-LIBOR. The floating rate resets monthly and net settlements of interest due to/from the counterparty also occur monthly. The floating rate of interest was 2.4185% as of June 30, 2019. Therefore, in the near term, the Company will receive net interest settlements which will be recorded as loan interest income, to the extent that the fixed rate of interest continues to exceed one-month USD-LIBOR. If one-month USD-LIBOR exceeds the fixed rate of interest in future periods, the Company will be required to pay net settlements to the counterparty and will record those net payments as a reduction of interest income on loans. The Company recorded interest income related to this swap transaction of $568,000 and $1.1 million during the three and six months ended June 30, 2019, respectively. The effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affected earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. During both the three and six months ended June 30, 2019, the Company recognized $-0- in noninterest income related to changes in the fair value of this derivative. |
Note 16: Derivatives and Hedging Activities: Agreements with Derivative Counterparties (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Policies | |
Agreements with Derivative Counterparties | The Company has agreements with its derivative counterparties. If the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. If the Bank fails to maintain its status as a well-capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements. Similarly, the Company could be required to settle its obligations under certain of its agreements if certain regulatory events occur, such as the issuance of a formal directive, or if the Companys credit rating is downgraded below a specified level.
As of June 30, 2019, the termination value of derivatives with our derivative dealer counterparties (related to loan level swaps with commercial lending customers) in a net liability position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $1.1 million. In addition, as of June 30, 2019, the termination value of derivatives with our derivative dealer counterparty (related to the balance sheet hedge commenced in October 2018) in a net asset position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $30.7 million. The Company has minimum collateral posting thresholds with its derivative dealer counterparties. At June 30, 2019, the Companys activity with one of its derivative counterparties met the level at which the minimum collateral posting thresholds take effect (collateral to be received by the Company) and the derivative counterparties had posted collateral of $30.8 million to the Company to satisfy the balance sheet hedge. Additionally, the Companys activity with one of its derivative counterparties met the level at which the minimum collateral posting thresholds take effect (collateral to be given by the Company) and the Company had posted collateral of $686,000 to the derivative counterparties to satisfy the loan level agreements. As of December 31, 2018, the termination value of derivatives with our derivative dealer counterparties (related to loan level swaps with commercial lending customers) in a net asset position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $396,000. In addition, as of December 31, 2018, the termination value of derivatives with our derivative dealer counterparty (related to the balance sheet hedge commenced in October 2018) in a net asset position, which included accrued interest but excluded any adjustment for nonperformance risk, related to these agreements was $12.3 million. The Company has minimum collateral posting thresholds with its derivative dealer counterparties. At December 31, 2018, the Companys activity with certain of its derivative counterparties met the level at which the minimum collateral posting thresholds take effect (collateral to be received by the Company) and the derivative counterparties had posted collateral of $704,000 to the Company to satisfy the loan level agreements and collateral of $12.8 million to the Company to satisfy the balance sheet hedge. |
NOTE 4: EARNINGS PER SHARE: Schedule of Earnings Per Share, Basic and Diluted (Tables) |
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Schedule of Earnings Per Share, Basic and Diluted |
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NOTE 5: INVESTMENT SECURITIES: Investment Securities (Tables) |
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Investment Securities | The amortized cost and fair values of securities classified as available-for-sale were as follows:
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NOTE 5: INVESTMENT SECURITIES: Investments Classified by Contractual Maturity Date (Tables) |
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Investments Classified by Contractual Maturity Date | The amortized cost and fair value of available-for-sale securities at June 30, 2019, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.
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NOTE 5: INVESTMENT SECURITIES: Unrealized Gain (Loss) on Investments (Tables) |
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Unrealized Gain (Loss) on Investments | The following table shows the Companys gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2019 and December 31, 2018:
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NOTE 5: INVESTMENT SECURITIES: Reclassification out of Accumulated Other Comprehensive Income (Tables) |
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Reclassification out of Accumulated Other Comprehensive Income |
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NOTE 6: LOANS AND ALLOWANCE FOR LOAN LOSSES: Schedule of Accounts, Notes, Loans and Financing Receivable (Tables) |
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Schedule of Accounts, Notes, Loans and Financing Receivable |
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NOTE 6: LOANS AND ALLOWANCE FOR LOAN LOSSES: Schedule of Loans Classified by Aging Analysis (Tables) |
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Schedule of Loans Classified by Aging Analysis |
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NOTE 6: LOANS AND ALLOWANCE FOR LOAN LOSSES: Financing Receivable, Nonaccrual (Tables) |
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Financing Receivable, Nonaccrual | Nonaccruing loans (excluding FDIC-assisted acquired loans, net of discount) are summarized as follows:
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NOTE 6: LOANS AND ALLOWANCE FOR LOAN LOSSES: Financing Receivable, Allowance for Credit Loss (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing Receivable, Allowance for Credit Loss | The following table presents the activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2019. Also presented are the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of June 30, 2019:
The following table presents the activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2018:
The following table presents the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of December 31, 2018:
|
NOTE 6: LOANS AND ALLOWANCE FOR LOAN LOSSES: Impaired Financing Receivables (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impaired Financing Receivables |
Impaired loans (excluding FDIC-assisted loans, net of discount), are summarized as follows:
|
NOTE 6: LOANS AND ALLOWANCE FOR LOAN LOSSES: Financing Receivable, Troubled Debt Restructuring (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing Receivable, Troubled Debt Restructuring | The following tables present newly restructured loans during the three and six months ended June 30, 2019 and 2018, respectively, by type of modification:
|
NOTE 6: LOANS AND ALLOWANCE FOR LOAN LOSSES: Financing Receivable Credit Quality Indicators (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing Receivable Credit Quality Indicators | The loan grading system is presented by loan class below:
|
NOTE 7: ACQUIRED LOANS, LOSS SHARING AGREEMENTS AND FDIC INDEMNIFICATION ASSETS: FDIC Indemnification Asset Policy (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FDIC Indemnification Asset Policy |
|
NOTE 7: ACQUIRED LOANS, LOSS SHARING AGREEMENTS AND FDIC INDEMNIFICATION ASSETS: Schedule of Impact of Adjustments of Acquired Loans on Financial Results (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Impact of Adjustments of Acquired Loans on Financial Results | The impact to income of adjustments on the Companys financial results is shown below:
|
NOTE 7: ACQUIRED LOANS, LOSS SHARING AGREEMENTS AND FDIC INDEMNIFICATION ASSETS: Schedule of Accretable Yield Changes for Acquired Loans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accretable Yield Changes for Acquired Loans | Changes in the accretable yield for acquired loan pools were as follows for the three and six months ended June 30, 2019 and 2018:
|
Note 8: Other Real Estate Owned: Schedule of Major Classifications of Foreclosed Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Major Classifications of Foreclosed Assets |
Major classifications of other real estate owned were as follows:
|
Note 8: Other Real Estate Owned: Schedule of Expenses Applicable to Foreclosed Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Expenses Applicable to Foreclosed Assets | Expenses applicable to other real estate owned and repossessions included the following:
|
Note 9: Premises and Equipment: Property, Plant and Equipment (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment |
|
Note 9: Premises and Equipment: Calculated Amount of Right of Use Assets and Lease Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculated Amount of Right of Use Assets and Lease Liabilities |
|
Note 9: Premises and Equipment: Schedule of Future Minimum Rental Payments for Operating Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases |
|
Note 10: Deposits: Schedule of Deposit Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deposit Liabilities |
|
Note 11: Advances From Federal Home Loan Bank: Federal Home Loan Bank, Advances (Tables) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Tables/Schedules | |
Federal Home Loan Bank, Advances |
At June 30, 2019 and December 31, 2018, there were no outstanding term advances from the Federal Home Loan Bank of Des Moines (FHLBank advances). There were overnight borrowings from the Federal Home Loan Bank of Des Moines, which are included below in Note 12.
|
Note 12: Securities Sold Under Reverse Repurchase Agreements and Short-term Borrowings: Schedule of Short-term Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||
Schedule of Short-term Debt |
|
Note 12: Securities Sold Under Reverse Repurchase Agreements and Short-term Borrowings: Schedule of Repurchase Agreements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||
Schedule of Repurchase Agreements |
|
Note 13: Subordinated Notes: Schedule of Subordinated Borrowing (Tables) |
6 Months Ended | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||
Schedule of Subordinated Borrowing | At June 30, 2019 and December 31, 2018, subordinated notes are summarized as follows:
|
Note 14: Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | Reconciliations of the Companys effective tax rates to the statutory corporate tax rates were as follows:
|
Note 15: Disclosures About Fair Value of Financial Instruments: Fair Value Measurement, Policy: Fair Value, Assets Measured on Recurring Basis (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets Measured on Recurring Basis |
|
Note 15: Disclosures About Fair Value of Financial Instruments: Fair Value Measurement, Policy: Fair Value, Assets and Liabilities Measured on Nonrecurring Basis (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis | The following tables present the fair value measurements of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2019 and December 31, 2018:
|
Note 15: Disclosures About Fair Value of Financial Instruments: Schedule Of Financial Instruments Fair Value (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Financial Instruments Fair Value |
|
Note 16: Derivatives and Hedging Activities: Schedule of Derivative Instruments in Statement of Financial Position, Fair Value (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The table below presents the fair value of the Companys derivative financial instruments as well as their classification on the Consolidated Statements of Financial Condition:
|
Note 16: Derivatives and Hedging Activities: Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The following table presents the effect of cash flow hedge accounting on the statements of comprehensive income:
|
Note 16: Derivatives and Hedging Activities: Schedule of Derivative Instruments, Effect on Statements of Operations (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments, Effect on Statements of Operations |
|
NOTE 4: EARNINGS PER SHARE: Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Details | ||||
Weighted Average Number of Shares Outstanding, Basic | 14,192 | 14,125 | 14,176 | 14,113 |
Net Income (Loss) Available to Common Stockholders, Basic | $ 18,375 | $ 13,839 | $ 35,988 | $ 27,305 |
Earnings Per Share, Basic | $ 1.29 | $ 0.98 | $ 2.54 | $ 1.93 |
Weighted Average Number of Shares Outstanding, Diluted | 14,192 | 14,125 | 14,176 | 14,113 |
Net effect of dilutive stock options - based on the treasurystock method using average market price | 122 | 153 | 122 | 153 |
Weighted Average Number Diluted Shares Outstanding Adjustment | 14,314 | 14,278 | 14,298 | 14,266 |
Net Income (Loss) Available to Common Stockholders, Diluted | $ 18,375 | $ 13,839 | $ 35,988 | $ 27,305 |
Earnings Per Share, Diluted | $ 1.28 | $ 0.97 | $ 2.52 | $ 1.91 |
NOTE 4: EARNINGS PER SHARE: Earnings Per Share, Policy (Details) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Details | ||||
Options to purchase shares of common stock outstanding not included in computation of diluted earnings per share because exercise price greater than average market price | 309,000 | 161,400 | 309,000 | 161,400 |
NOTE 5: INVESTMENT SECURITIES: Investment, Policy (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Details | ||
Fair Value of Debt Securities Reported Less Than Their Historical Cost | $ 61,600 | $ 95,700 |
Debt Securities Reported Less Than Their Historical Cost Percent of Investment Portfolio | 20.10% | 39.20% |
NOTE 5: INVESTMENT SECURITIES: Sales of Available for Sale Securities (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Details | ||||
Proceeds from Sale of Available-for-sale Securities | $ 0 | $ 0 | $ 28,057 | $ 0 |
Available-for-sale Securities, Gross Realized Gains | 226 | |||
Available-for-sale Securities, Gross Realized Losses | $ 216 |
NOTE 5: INVESTMENT SECURITIES: Other than temporary impairment securities (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 9 Months Ended | |
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Details | ||||
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities | $ 0 | $ 0 | $ 0 | $ 0 |
NOTE 5: INVESTMENT SECURITIES: Credit Losses Recognized on Investments (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Details | ||
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Reductions, Securities Sold | $ 0 | $ 0 |
NOTE 5: INVESTMENT SECURITIES (Details) $ in Thousands |
3 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
| |
Details | |
Stranded tax amount related to unrealized gains and losses on available for sale securities | $ 272 |
NOTE 5: INVESTMENT SECURITIES: Reclassification out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Reclassifications out of accumulated other comprehensive income | $ 0 | $ 0 | $ 8 | $ 0 |
Reclassification out of Accumulated Other Comprehensive Income | Net Realized Gains on Sales of Available for Sale Securities Reclassified Amount Before Tax | ||||
Available-for-sale Securities, Gross Unrealized Gain | 0 | 0 | 10 | 0 |
Reclassification out of Accumulated Other Comprehensive Income | Provision for Income Taxes | ||||
Income Taxes Paid | $ 0 | $ 0 | $ (2) | $ 0 |
NOTE 6: LOANS AND ALLOWANCE FOR LOAN LOSSES: Impaired Loans Specific Valuation Allowance (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Details | ||
Impaired Loans With Specific Valuation Allowance | $ 6,200 | $ 8,400 |
Impaired Loans Valuation Allowance | $ 1,400 | $ 2,000 |
NOTE 6: LOANS AND ALLOWANCE FOR LOAN LOSSES: Financing Receivable, Troubled Debt Restructuring (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Consumer | ||||
Troubled Debt Restructuring Loans Interest Only | $ 0 | $ 0 | $ 0 | $ 0 |
Troubled Debt Restructuring Loans Modified Term | 52 | 287 | 79 | 439 |
Troubled Debt Restructuring Loans Modified Combination | 0 | 0 | 0 | 0 |
Troubled Debt Restructurings Total New Modifications | $ 52 | $ 287 | $ 79 | 439 |
One-to-Four-Family Residential | ||||
Troubled Debt Restructuring Loans Interest Only | 1,348 | |||
Troubled Debt Restructuring Loans Modified Term | 0 | |||
Troubled Debt Restructuring Loans Modified Combination | 0 | |||
Troubled Debt Restructurings Total New Modifications | 1,348 | |||
Newly Restructured Modified Loans | ||||
Troubled Debt Restructuring Loans Interest Only | 1,348 | |||
Troubled Debt Restructuring Loans Modified Term | 439 | |||
Troubled Debt Restructuring Loans Modified Combination | 0 | |||
Troubled Debt Restructurings Total New Modifications | $ 1,787 |
NOTE 6: LOANS AND ALLOWANCE FOR LOAN LOSSES: Loans Modified in Troubled Debt Restructurings by Segment (Details) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Troubled Debt Restructurings Total Modifications | $ 2,000 | $ 6,900 |
Troubled Debt Restructurings Accruing Interest | $ 1,500 | $ 4,700 |
Financing Receivable, Troubled Debt Restructuring, Subsequent Default, Number of Contracts | 0 | 0 |
Substandard | ||
Troubled Debt Restructurings Accruing Interest | $ 619 | $ 2,500 |
Construction and Land Development | ||
Troubled Debt Restructured Loans and Impaired | 261 | 283 |
One- to Four-Family and Other Residential | ||
Troubled Debt Restructured Loans and Impaired | 787 | 3,900 |
Commercial Real Estate | ||
Troubled Debt Restructured Loans and Impaired | 428 | 1,300 |
Commercial Business | ||
Troubled Debt Restructured Loans and Impaired | 178 | 548 |
Consumer | ||
Troubled Debt Restructured Loans and Impaired | $ 391 | $ 803 |
NOTE 6: LOANS AND ALLOWANCE FOR LOAN LOSSES: Troubled Debt Restructured Loans Returned to Accrual Status (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Consumer | ||||
Troubled Debt Restructurings Returned to Accrual Status | $ 14 | $ 63 | ||
One- to Four-Family and Other Residential | ||||
Troubled Debt Restructurings Returned to Accrual Status | $ 16 | $ 39 |
NOTE 7: ACQUIRED LOANS, LOSS SHARING AGREEMENTS AND FDIC INDEMNIFICATION ASSETS: Schedule of Impact of Adjustments of Acquired Loans on Financial Results (Details) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019
USD ($)
$ / shares
|
Jun. 30, 2018
USD ($)
$ / shares
|
Jun. 30, 2019
USD ($)
$ / shares
|
Jun. 30, 2018
USD ($)
$ / shares
|
|
Details | ||||
Impact of acquired loan pools on net interest income | $ 1,399 | $ 1,070 | $ 2,911 | $ 2,227 |
Impact of acquired loan pools on net interest margin (in basis points) | 12 | 10 | 13 | 11 |
Net impact of acquired loan pools to pre-tax income | $ 1,399 | $ 1,070 | $ 2,911 | $ 2,227 |
Net impact of acquired loan pools to net of taxes | $ 1,080 | $ 831 | $ 2,247 | $ 1,729 |
Impact of acquired loan pools to diluted earnings per common share | $ / shares | $ 0.08 | $ 0.06 | $ 0.16 | $ 0.12 |
Note 8: Other Real Estate Owned: Schedule of Major Classifications of Foreclosed Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Foreclosed Assets Held For Sale | One-to-Four-Family Residential Construction | ||
Foreclosed Assets | $ 0 | $ 0 |
Foreclosed Assets Held For Sale | Subdivision Construction | ||
Foreclosed Assets | 918 | 1,092 |
Foreclosed Assets Held For Sale | Land Development | ||
Foreclosed Assets | 2,584 | 3,191 |
Foreclosed Assets Held For Sale | Commercial Construction | ||
Foreclosed Assets | 0 | 0 |
Foreclosed Assets Held For Sale | One-to-Four-Family Residential | ||
Foreclosed Assets | 0 | 269 |
Foreclosed Assets Held For Sale | Other Residential | ||
Foreclosed Assets | 0 | 0 |
Foreclosed Assets Held For Sale | Commercial Real Estate | ||
Foreclosed Assets | 0 | 0 |
Foreclosed Assets Held For Sale | Commercial Business | ||
Foreclosed Assets | 0 | 0 |
Foreclosed Assets Held For Sale | Consumer Loan | ||
Foreclosed Assets | 999 | 928 |
Foreclosed Assets Held For Sale | Foreclosed Assets Before FDIC-Assisted Acquired Assets | ||
Foreclosed Assets | 4,501 | 5,480 |
Foreclosed Assets Held For Sale | Foreclosed Assets Acquired Through FDIC-Assisted Transactions, Net of Discount | ||
Foreclosed Assets | 1,301 | 1,401 |
Foreclosed Assets Held For Sale, Net | ||
Foreclosed Assets | 5,802 | 6,881 |
Other Real Estate Owned Not Acquired Through Foreclosure | ||
Foreclosed Assets | 1,305 | 1,559 |
Other real estate owned | ||
Foreclosed Assets | $ 7,107 | $ 8,440 |
Note 8: Other Real Estate Owned: Loans in Process of Foreclosure (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Acquired Loans | Previously Covered by Loss Sharing Agreements | ||
Mortgage Loans in Process of Foreclosure, Amount | $ 243 | $ 873 |
Acquired Loans | Previously Covered by Loss Sharing Agreements | Valley Bank | ||
Mortgage Loans in Process of Foreclosure, Amount | 258 | 171 |
Residential Mortgage | ||
Mortgage Loans in Process of Foreclosure, Amount | 511 | 1,300 |
Residential Mortgage | Acquired Loans | ||
Mortgage Loans in Process of Foreclosure, Amount | $ 501 | $ 1,000 |
Note 8: Other Real Estate Owned: Schedule of Expenses Applicable to Foreclosed Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Details | ||||
Net (gain) loss on sales of other real estate owned | $ (244) | $ (977) | $ (410) | $ (1,449) |
Valuation write-downs on foreclosed assets | 197 | 2,757 | 444 | 3,373 |
Operating expenses, net of rental income | 466 | 957 | 1,005 | 1,954 |
Total foreclosed assets expenses | $ 419 | $ 2,737 | $ 1,039 | $ 3,878 |
Note 9: Premises and Equipment: Property, Plant and Equipment (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Details | ||
Land | $ 40,576 | $ 40,508 |
Buildings and improvements | 95,698 | 95,039 |
Furniture, fixtures and equipment | 57,682 | 54,327 |
Operating leases right of use asset | 9,106 | 0 |
Property, Plant and Equipment, Gross | 203,062 | 189,874 |
Less accumulated depreciation | 59,589 | 57,450 |
Premises and equipment, net | $ 143,473 | $ 132,424 |
Note 9: Premises and Equipment: Lessee, Operating Lease, Disclosure: Lease Agreements (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Details | |
Number of Lessee Lease Agreements | 17 |
Initial Leases and Lease Modifications and Renewals | $ 9,500 |
Right of use asset and corresponding lease liability | $ 9,100 |
Note 9: Premises and Equipment: Lessee, Operating Lease, Disclosure: Lease Expense Related to ATMs (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Details | ||
Lease expense related to ATMs | $ 76 | $ 149 |
Note 9: Premises and Equipment: Lessee, Operating Lease, Disclosure: Expected Lease Terms (Details) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Weighted-average lease term | 11.1 years |
Operating Lease, Weighted Average Discount Rate, Percent | 3.40% |
Minimum | |
Lessee Expected Lease Terms | 3.3 years |
Maximum | |
Lessee Expected Lease Terms | 19.9 years |
Note 9: Premises and Equipment: Calculated Amount of Right of Use Assets and Lease Liabilities (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|||
Statement of Financial Condition | ||||
Right of Use Asset, Operating Leases | $ 9,106 | $ 9,106 | ||
Liability, Operating Leases | 9,153 | 9,153 | ||
Statement of Income | ||||
Operating Lease Costs Classified as Occupancy and Equipment Expense | [1] | 371 | 747 | |
Supplemental Cash Flow Information | Right of use assets obtained in exchange for lease obligations | ||||
Operating leases | 9,538 | |||
Supplemental Cash Flow Information | Cash paid for amounts included in the measurement of lease liabilities | ||||
Operating Cash Flows from Operating Leases | $ 351 | $ 701 | ||
|
Note 9: Premises and Equipment: Operating Lease Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Details | ||||
Operating Lease, Expense | $ 371 | $ 323 | $ 747 | $ 654 |
Note 9: Premises and Equipment: Schedule of Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
---|---|
Details | |
Operating Leases, Future Minimum Payments, Remainder of Fiscal Year | $ 597 |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | 1,132 |
Operating Leases, Future Minimum Payments, Due in Two Years | 1,148 |
Operating Leases, Future Minimum Payments, Due in Three Years | 1,131 |
Operating Leases, Future Minimum Payments, Due in Four Years | 1,082 |
Operating Leases, Future Minimum Payments, Due in Five Years | 956 |
Operating Leases, Future Minimum Payments, Due Thereafter | 5,026 |
Operating Lease, Payments | 11,072 |
Interest portion of lease payments | (1,919) |
Operating Lease, Liability | $ 9,153 |
Note 9: Premises and Equipment: Lessor Agreements (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Details | ||
Income Recognized From Lessor Agreements | $ 285 | $ 561 |
Note 10: Deposits: Schedule of Deposit Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|||||
---|---|---|---|---|---|---|---|
Deposits | $ 3,888,536 | $ 3,725,007 | |||||
0.00% - 0.99% | |||||||
Deposits | 128,479 | 150,656 | |||||
1.00% - 1.99% | |||||||
Deposits | 269,123 | 511,873 | |||||
2.00% - 2.99% | |||||||
Deposits | 1,257,086 | 857,973 | |||||
3.00% - 3.99% | |||||||
Deposits | 75,147 | 69,793 | |||||
4.00% - 4.99% | |||||||
Deposits | 1,065 | 1,116 | |||||
Total Time Deposits | |||||||
Deposits | [1] | 1,730,900 | 1,591,411 | ||||
Non-Interest Bearing Demand Deposits | |||||||
Deposits | 667,732 | 661,061 | |||||
Interest Bearing Demand and Savings Deposits | |||||||
Deposits | [2] | 1,489,904 | 1,472,535 | ||||
Total Deposits | |||||||
Deposits | $ 3,888,536 | $ 3,725,007 | |||||
|
Note 11: Advances From Federal Home Loan Bank: Federal Home Loan Bank, Advances (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Details | ||
Advances from Federal Home Loan Banks | $ 0 | $ 0 |
Note 12: Securities Sold Under Reverse Repurchase Agreements and Short-term Borrowings: Schedule of Short-term Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Details | ||
Notes payable - Community Development Equity Funds | $ 1,316 | $ 1,625 |
Other interest-bearing liabilities | 30,820 | 13,100 |
Other Short-term Borrowings | 136,500 | 178,000 |
Securities for Reverse Repurchase Agreements | 98,632 | 105,253 |
Short-term debt recorded value | $ 267,268 | $ 297,978 |
Note 12: Securities Sold Under Reverse Repurchase Agreements and Short-term Borrowings: Schedule of Repurchase Agreements (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Maturity Overnight and on Demand | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises | ||
Securities Sold under Agreements to Repurchase, Fair Value of Collateral | $ 98,632 | $ 105,253 |
Note 13: Subordinated Notes: Subordinated Notes Details (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Aug. 08, 2016 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Debt Instrument, Interest Rate Terms | The notes are due August 15, 2026, and have a fixed interest rate of 5.25% until August 15, 2021, at which time the rate becomes floating at a rate equal to three-month LIBOR plus 4.087%. | ||||
Amortization of Debt Discount (Premium) | $ 108 | $ 38 | $ 217 | $ 78 | |
Subordinated Borrowing, Interest Rate | 5.91% | 5.91% | |||
Senior Subordinated Notes | |||||
Proceeds from Issuance of Senior Long-term Debt | $ 73,500 | ||||
Payment of Financing and Stock Issuance Costs | $ 1,500 |
Note 13: Subordinated Notes: Schedule of Subordinated Borrowing (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Details | ||
Subordinated Notes Before Costs | $ 75,000 | $ 75,000 |
Unamortized Debt Issuance Expense | 941 | 1,158 |
Subordinated Debt | $ 74,059 | $ 73,842 |
Note 14: Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Details | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | 21.00% | 21.00% |
Effective Income Tax Rate Reconciliation, Tax Exempt Income, Percent | (0.50%) | (0.80%) | (0.50%) | (0.90%) |
Effective Income Tax Rate Reconciliation, Tax Credit, Percent | (4.20%) | (3.60%) | (4.40%) | (4.00%) |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent | 1.20% | 1.20% | 1.30% | 1.20% |
Effective Income Tax Rate Reconciliation, Other Adjustments, Percent | (0.70%) | (0.10%) | 0.30% | (0.30%) |
Effective Income Tax Rate Reconciliation, Percent | 16.80% | 17.70% | 17.70% | 17.00% |
Note 15: Disclosures About Fair Value of Financial Instruments: Fair Value Measurement, Policy: Fair Value, Assets Measured on Recurring Basis (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises | ||
Recurring Assets, Fair Value Disclosure | $ 191,577 | $ 153,258 |
Collateralized Mortgage Obligations | ||
Recurring Assets, Fair Value Disclosure | 71,807 | 39,260 |
US States and Political Subdivisions Debt Securities | ||
Recurring Assets, Fair Value Disclosure | 42,265 | 51,450 |
Interest rate derivative asset | ||
Recurring Assets, Fair Value Disclosure | 31,855 | 12,800 |
Interest rate derivative liability | ||
Recurring Assets, Fair Value Disclosure | (1,281) | (716) |
Fair Value, Inputs, Level 1 | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises | ||
Recurring Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 1 | Collateralized Mortgage Obligations | ||
Recurring Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 1 | US States and Political Subdivisions Debt Securities | ||
Recurring Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 1 | Interest rate derivative asset | ||
Recurring Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 1 | Interest rate derivative liability | ||
Recurring Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 2 | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises | ||
Recurring Assets, Fair Value Disclosure | 191,577 | 153,258 |
Fair Value, Inputs, Level 2 | Collateralized Mortgage Obligations | ||
Recurring Assets, Fair Value Disclosure | 71,807 | 39,260 |
Fair Value, Inputs, Level 2 | US States and Political Subdivisions Debt Securities | ||
Recurring Assets, Fair Value Disclosure | 42,265 | 51,450 |
Fair Value, Inputs, Level 2 | Interest rate derivative asset | ||
Recurring Assets, Fair Value Disclosure | 31,855 | 12,800 |
Fair Value, Inputs, Level 2 | Interest rate derivative liability | ||
Recurring Assets, Fair Value Disclosure | (1,281) | (716) |
Fair Value, Inputs, Level 3 | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises | ||
Recurring Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 | Collateralized Mortgage Obligations | ||
Recurring Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 | US States and Political Subdivisions Debt Securities | ||
Recurring Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 | Interest rate derivative asset | ||
Recurring Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 | Interest rate derivative liability | ||
Recurring Assets, Fair Value Disclosure | $ 0 | $ 0 |
Note 15: Disclosures About Fair Value of Financial Instruments: Fair Value Measurement, Policy: Fair Value, Assets and Liabilities Measured on Nonrecurring Basis (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Foreclosed Assets Held For Sale | ||
Non-recurring Assets, Fair Value Disclosure | $ 851 | $ 1,776 |
Loans Receivable Impaired | ||
Non-recurring Assets, Fair Value Disclosure | 733 | 2,805 |
Fair Value, Inputs, Level 1 | Foreclosed Assets Held For Sale | ||
Non-recurring Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 1 | Loans Receivable Impaired | ||
Non-recurring Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 2 | Foreclosed Assets Held For Sale | ||
Non-recurring Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 2 | Loans Receivable Impaired | ||
Non-recurring Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Inputs, Level 3 | Foreclosed Assets Held For Sale | ||
Non-recurring Assets, Fair Value Disclosure | 851 | 1,776 |
Fair Value, Inputs, Level 3 | Loans Receivable Impaired | ||
Non-recurring Assets, Fair Value Disclosure | $ 733 | $ 2,805 |
Note 15: Disclosures About Fair Value of Financial Instruments: Schedule Of Financial Instruments Fair Value (Details) $ in Thousands |
Jun. 30, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
---|---|---|
Financial Assets | Loans Receivable | ||
Financial Instruments Owned Carrying Amount | $ 4,112,455 | $ 3,989,001 |
Financial Instruments, Owned, at Fair Value | $ 4,101,133 | $ 3,955,786 |
Fair Value Hierarchy Level | 3 | 3 |
Financial Assets | Mortgage Loans Held for Sale | ||
Financial Instruments Owned Carrying Amount | $ 11,106 | $ 1,650 |
Financial Instruments, Owned, at Fair Value | $ 11,106 | $ 1,650 |
Fair Value Hierarchy Level | 2 | 2 |
Financial Assets | Accrued Interest Receivable | ||
Financial Instruments Owned Carrying Amount | $ 14,351 | $ 13,448 |
Financial Instruments, Owned, at Fair Value | $ 14,351 | $ 13,448 |
Fair Value Hierarchy Level | 3 | 3 |
Financial Assets | Cash and Cash Equivalents | ||
Financial Instruments Owned Carrying Amount | $ 181,372 | $ 202,742 |
Financial Instruments, Owned, at Fair Value | $ 181,372 | $ 202,742 |
Fair Value Hierarchy Level | 1 | 1 |
Financial Assets | Investment in Federal Home Loan Bank Stock | ||
Financial Instruments Owned Carrying Amount | $ 11,093 | $ 12,438 |
Financial Instruments, Owned, at Fair Value | $ 11,093 | $ 12,438 |
Fair Value Hierarchy Level | 3 | 3 |
Financial Liabilities | Junior Subordinated Debt | ||
Financial Instruments Owned Carrying Amount | $ 25,774 | $ 25,774 |
Financial Instruments, Owned, at Fair Value | $ 25,774 | $ 25,774 |
Fair Value Hierarchy Level | 3 | 3 |
Financial Liabilities | Subordinated Debt | ||
Financial Instruments Owned Carrying Amount | $ 74,059 | $ 73,842 |
Financial Instruments, Owned, at Fair Value | $ 76,125 | $ 75,188 |
Fair Value Hierarchy Level | 2 | 2 |
Financial Liabilities | Deposits | ||
Financial Instruments Owned Carrying Amount | $ 3,888,536 | $ 3,725,007 |
Financial Instruments, Owned, at Fair Value | $ 3,890,877 | $ 3,717,899 |
Fair Value Hierarchy Level | 3 | 3 |
Financial Liabilities | Short-term Debt | ||
Financial Instruments Owned Carrying Amount | $ 267,268 | $ 297,978 |
Financial Instruments, Owned, at Fair Value | $ 267,268 | $ 297,978 |
Fair Value Hierarchy Level | 3 | 3 |
Financial Liabilities | Accrued Interest Payable | ||
Financial Instruments Owned Carrying Amount | $ 4,209 | $ 3,570 |
Financial Instruments, Owned, at Fair Value | $ 4,209 | $ 3,570 |
Fair Value Hierarchy Level | 3 | 3 |
Unrecognized Financial Instruments Net of Contractual Value | Letter of Credit | ||
Financial Instruments Owned Carrying Amount | $ 126 | $ 146 |
Financial Instruments, Owned, at Fair Value | $ 126 | $ 146 |
Fair Value Hierarchy Level | 3 | 3 |
Unrecognized Financial Instruments Net of Contractual Value | Line of Credit | ||
Financial Instruments Owned Carrying Amount | $ 0 | $ 0 |
Financial Instruments, Owned, at Fair Value | $ 0 | $ 0 |
Fair Value Hierarchy Level | 3 | 3 |
Unrecognized Financial Instruments Net of Contractual Value | Loan Origination Commitments | ||
Financial Instruments Owned Carrying Amount | $ 0 | $ 0 |
Financial Instruments, Owned, at Fair Value | $ 0 | $ 0 |
Fair Value Hierarchy Level | 3 | 3 |
Note 16: Derivatives and Hedging Activities: Nondesignated Hedges: Loans With Interest Rate Swap (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Gain (Loss) on Fair Value Hedges Recognized in Earnings | $ (44) | $ 11 | $ (68) | $ 48 | |
Interest Rate Swap | Commercial Customers | |||||
Derivative Asset, Notional Amount | $ 69,600 | $ 69,600 | $ 78,500 |
Note 16: Derivatives and Hedging Activities: Cash Flow Hedges (Details) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Details | |
Derivative, Type of Interest Rate Paid on Swap | Under the terms of the swap, the Company receives a fixed rate of interest of 3.018% and pays a floating rate of interest equal to one-month USD-LIBOR. The floating rate resets monthly and net settlements of interest due to/from the counterparty also occur monthly. The floating rate of interest was 2.4185% as of June 30, 2019. |
Note 16: Derivatives and Hedging Activities: Schedule of Derivative Instruments in Statement of Financial Position, Fair Value (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Derivatives Designated as Hedging Instruments | $ 30,665 | $ 12,106 |
Derivative Asset | ||
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | 1,190 | 694 |
Derivative Liability | ||
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | 1,281 | 716 |
Interest Rate Swap | Prepaid Expenses and Other Current Assets | ||
Derivatives Designated as Hedging Instruments | 30,665 | 12,106 |
Interest rate products | Prepaid Expenses and Other Current Assets | ||
Derivative Asset | ||
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value | 1,190 | 694 |
Interest rate products | Accrued expenses and other liabilities | ||
Derivative Liability | ||
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value | $ 1,281 | $ 716 |
Note 16: Derivatives and Hedging Activities: Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income | Interest Rate Swap | ||||
Effect of derivative instruments on the statements of comprehensive income | $ 8,528 | $ 0 | $ 14,328 | $ 0 |
Note 16: Derivatives and Hedging Activities: Schedule of Derivative Instruments, Effect on Statements of Operations (Details) - Interest Rate Swap - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Interest Income | ||||
Effect of cash flow hedge accounting on the statements of operations | $ 568 | $ 0 | $ 1,081 | $ 0 |
Interest Expense | ||||
Effect of cash flow hedge accounting on the statements of operations | $ 0 | $ 0 | $ 0 | $ 0 |
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