UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES ACT OF 1934

For the Quarterly Period Ended September 30, 2015

Commission File Number 0-18082

GREAT SOUTHERN BANCORP, INC.

(Exact name of registrant as specified in its charter)

Maryland	43-1524856
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
1451 E. Battlefield, Springfield, Missouri	65804
(Address of principal executive offices)	(Zip Code)
(417) 887-4400

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  

Yes /X/     No /  /

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes/X/   No /  /

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer /  /	Accelerated filer /X/	Non-accelerated filer /  /	Smaller reporting company /  /
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

Yes /  /   No /X/

The number of shares outstanding of each of the registrant's classes of common stock: 13,869,823 shares of common stock, par value $.01, outstanding at November 4, 2015.

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(In thousands, except number of shares)

	SEPTEMBER 30,		DECEMBER 31,
	2015		2014
	(Unaudited)
ASSETS
Cash	$	107,194	$	109,052
Interest-bearing deposits in other financial institutions		125,450		109,595
Cash and cash equivalents		232,644		218,647
Available-for-sale securities		273,245		365,506
Held-to-maturity securities (fair value $389  – September 2015;
$499 - December 2014)		353		450
Mortgage loans held for sale		9,806		14,579
Loans receivable, net of allowance for loan losses of
$39,878 – September 2015; $38,435 - December 2014		3,269,963		3,038,848
FDIC indemnification asset		27,572		44,334
Interest receivable		11,041		11,219
Prepaid expenses and other assets		56,151		60,452
Other real estate owned, net		35,125		45,838
Premises and equipment, net		127,948		124,841
Goodwill and other intangible assets		6,196		7,508
Investment in Federal Home Loan Bank stock		11,444		16,893
Current and deferred income taxes		9,150		2,219
Total Assets	$	4,070,638	$	3,951,334
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits	$	3,246,740	$	2,990,840
Federal Home Loan Bank advances		164,569		271,641
Securities sold under reverse repurchase agreements with customers		148,117		168,993
Short-term borrowings		1,307		42,451
Subordinated debentures issued to capital trusts		25,774		30,929
Accrued interest payable		961		1,067
Advances from borrowers for taxes and insurance		8,007		4,929
Accounts payable and accrued expenses		27,566		20,739
Total Liabilities		3,623,041		3,531,589
Stockholders' Equity:
Capital stock
Serial preferred stock – $.01 par value; authorized 1,000,000 shares; issued      and outstanding September 2015 and December 2014 - 57,943 shares,      $1,000 liquidation amount		57,943		57,943
Common stock, $.01 par value; authorized 20,000,000 shares; issued and outstanding September 2015  – 13,861,037 shares;
December 2014 - 13,754,806 shares		139		138
Additional paid-in capital		24,136		22,345
Retained earnings		359,224		332,283
Accumulated other comprehensive income		6,155		7,036
Total Stockholders' Equity		447,597		419,745
Total Liabilities and Stockholders' Equity	$	4,070,638	$	3,951,334

See Notes to Consolidated Financial Statements

2

GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

	THREE MONTHS ENDED SEPTEMBER 30,
	2015			2014
	(Unaudited)
INTEREST INCOME
Loans	$	44,103		$	44,948
Investment securities and other		1,652			2,659
TOTAL INTEREST INCOME		45,755			47,607
INTEREST EXPENSE
Deposits		3,500			2,884
Federal Home Loan Bank advances		468			461
Short-term borrowings and repurchase agreements		14			13
Subordinated debentures issued to capital trusts		248			143
TOTAL INTEREST EXPENSE		4,230			3,501
NET INTEREST INCOME		41,525			44,106
PROVISION FOR LOAN LOSSES		1,703			945
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		39,822			43,161
NON-INTEREST INCOME
Commissions		400			284
Service charges and ATM fees		5,162			5,168
Net realized gains on sales of loans		1,079			1,543
Net realized gains on sales of available-for-sale securities		2			321
Late charges and fees on loans		371			248
Gain (loss) on derivative interest rate products		(133	)		10
Amortization of income/expense related to business acquisitions		(3,326	)		(6,463	)
Other income		1,565			667
TOTAL NON-INTEREST INCOME		5,120			1,778
NON-INTEREST EXPENSE
Salaries and employee benefits		15,078			14,884
Net occupancy and equipment expense		7,546			6,172
Postage		1,042			935
Insurance		837			940
Advertising		545			522
Office supplies and printing		328			393
Telephone		806			695
Legal, audit and other professional fees		586			1,389
Expense on foreclosed assets		616			982
Partnership tax credit investment amortization		420			420
Other operating expenses		2,210			2,066
TOTAL NON-INTEREST EXPENSE		30,014			29,398
INCOME BEFORE INCOME TAXES		14,928			15,541
PROVISION FOR INCOME TAXES		3,732			3,951
NET INCOME		11,196			11,590
Preferred stock dividends		145			145
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	11,051		$	11,445

3

	THREE MONTHS ENDED SEPTEMBER 30,
	2015			2014
BASIC EARNINGS PER COMMON SHARE		$	0.80		$	0.84
DILUTED EARNINGS PER COMMON SHARE		$	0.79		$	0.83
DIVIDENDS DECLARED PER COMMON SHARE		$	0.22		$	0.20

See Notes to Consolidated Financial Statements

4

GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

	NINE MONTHS ENDED SEPTEMBER 30,
	2015			2014
	(Unaudited)
INTEREST INCOME
Loans	$	133,999		$	125,669
Investment securities and other		5,396			8,617
TOTAL INTEREST INCOME		139,395			134,286
INTEREST EXPENSE
Deposits		9,794			8,297
Federal Home Loan Bank advances		1,331			2,446
Short-term borrowings and repurchase agreements		51			1,082
Subordinated debentures issued to capital trusts		560			418
TOTAL INTEREST EXPENSE		11,736			12,243
NET INTEREST INCOME		127,659			122,043
PROVISION FOR LOAN LOSSES		4,303			4,099
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		123,356			117,944
NON-INTEREST INCOME
Commissions		981			910
Service charges and ATM fees		14,833			14,064
Net realized gains on sales of loans		3,078			2,700
Net realized gains on sales of available-for-sale securities		2			963
Late charges and fees on loans		1,482			827
Gain (loss) on derivative interest rate products		(112	)		(223	)
Initial gain recognized on business acquisition		—			10,805
Amortization of income/expense related to business acquisitions		(15,380	)		(20,061	)
Other income		3,638			3,347
TOTAL NON-INTEREST INCOME		8,522			13,332
NON-INTEREST EXPENSE
Salaries and employee benefits		44,261			41,371
Net occupancy and equipment expense		19,715			16,786
Postage		2,843			2,572
Insurance		2,672			2,820
Advertising		1,728			1,690
Office supplies and printing		1,043			1,050
Telephone		2,338			2,112
Legal, audit and other professional fees		1,873			3,230
Expense on foreclosed assets		1,319			3,173
Partnership tax credit investment amortization		1,260			1,300
Other operating expenses		6,153			13,585
TOTAL NON-INTEREST EXPENSE		85,205			89,689
INCOME BEFORE INCOME TAXES		46,673			41,587
PROVISION FOR INCOME TAXES		11,821			10,125
NET INCOME		34,852			31,462
Preferred stock dividends		435			435
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	34,417		$	31,027

5

	NINE MONTHS ENDED SEPTEMBER 30,
	2015			2014
BASIC EARNINGS PER COMMON SHARE		$	2.49		$	2.27
DILUTED EARNINGS PER COMMON SHARE		$	2.46		$	2.25
DIVIDENDS DECLARED PER COMMON SHARE		$	0.64		$	0.60

See Notes to Consolidated Financial Statements

6

GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

	THREE MONTHS ENDED SEPTEMBER 30,
	2015			2014
	(Unaudited)
Net Income	$	11,196		$	11,590
Unrealized appreciation on available-for-sale securities, net
of taxes of $160 and $127, for 2015 and 2014, respectively		281			236
Reclassification adjustment for gains included in net income,
net of taxes of $(1) and $(112), for 2015 and 2014, respectively		(1	)		(209	)
Change in fair value of cash flow hedge, net of taxes of $6
and $29, for 2015 and 2014, respectively		10			53
Comprehensive Income	$	11,486		$	11,670

	NINE MONTHS ENDED SEPTEMBER 30,
	2015			2014
	(Unaudited)
Net Income	$	34,852		$	31,462
Unrealized appreciation (depreciation) on available-for-sale securities, net
of taxes (credit) of $(221) and $2,805, for 2015 and 2014, respectively		(785	)		5,209
Reclassification adjustment for gains included in net income,
net of taxes of $(1) and $(337), for 2015 and 2014, respectively		(1	)		(626	)
Change in fair value of cash flow hedge, net of taxes (credit) of $(59)
and $(67), for 2015 and 2014, respectively		(95	)		(90	)
Comprehensive Income	$	33,971		$	35,955

See Notes to Consolidated Financial Statements

7

GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	NINE MONTHS ENDED SEPTEMBER 30,
	2015			2014
	(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	34,852		$	31,462
Proceeds from sales of loans held for sale		126,859			101,872
Originations of loans held for sale		(122,166	)		(122,252	)
Items not requiring (providing) cash:
Depreciation		8,088			6,410
Amortization of other assets		2,572			2,385
Compensation expense for stock option grants		395			409
Provision for loan losses		4,303			4,099
Net gains on loan sales		(3,078	)		(2,700	)
Net gains on sale of available-for-sale investment securities		(2	)		(963	)
Net gains on sale of premises and equipment		(561	)		(46	)
(Gain) loss on sale of foreclosed assets		(694	)		1,360
Gain on redemption of trust preferred securities		(1,115	)		—
Initial gain recognized on business acquisition		—			(10,805	)
Amortization of deferred income, premiums, discounts
and fair value adjustments		8,711			17,023
Loss on derivative interest rate products		112			223
Deferred income taxes		(7,357	)		(4,370	)
Changes in:
Interest receivable		178			1,232
Prepaid expenses and other assets		8,370			4,187
Accounts payable and accrued expenses		4,781			2,685
Income taxes refundable/payable		707			1,744
Net cash provided by operating activities		64,955			33,955
CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in loans		(139,782	)		(243,837	)
Purchase of loans		(95,720	)		(73,244	)
Cash received from acquisitions		—			189,437
Cash received from FDIC loss sharing reimbursements		2,390			7,532
Purchase of premises and equipment		(12,839	)		(11,598	)
Proceeds from sale of premises and equipment		2,205			198
Proceeds from sale of foreclosed assets		17,888			17,661
Capitalized costs on foreclosed assets		(20	)		(95	)
Proceeds from sales of available-for-sale investment securities		56,167			179,204
Proceeds from maturing investment securities		110			110
Proceeds from called investment securities		6,143			6,235
Principal reductions on mortgage-backed securities		48,137			78,228
Purchase of available-for-sale securities		(21,339	)		(40,661	)
Redemption (purchase) of Federal Home Loan Bank stock		5,449			(2,191	)
Net cash provided by (used in) investing activities		(131,211	)		106,979
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in certificates of deposit		199,842			(89,219	)
Net increase (decrease) in checking and savings deposits		56,502			(106,924	)
Proceeds from Federal Home Loan Bank advances		5,277,500			2,517,000
Repayments of Federal Home Loan Bank advances		(5,384,548	)		(2,450,300	)
Net increase (decrease) in short-term borrowings		(62,020	)		36,307
Repayments of structured repurchase agreements		—			(50,000	)
Advances from borrowers for taxes and insurance		3,078			3,395
Redemption of trust preferred securities		(3,885	)		—
Dividends paid		(8,976	)		(8,371	)
Purchase of company stock		—			(512	)
Stock options exercised		2,760			1,151
Net cash provided by (used in) financing activities		80,253			(147,473	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		13,997			(6,539	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		218,647			227,925
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	232,644		$	221,386

See Notes to Consolidated Financial Statements

8

GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements of Great Southern Bancorp, Inc. (the "Company" or "Great Southern") have been prepared in accordance with accounting principles generally accepted in the United States of America 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 and cash flows of the Company for the periods presented. Those adjustments consist only of normal recurring adjustments. Operating results for the three and nine months ended September 30, 2015 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, 2014, 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 2014 filed with the Securities and Exchange Commission.

NOTE 2: NATURE OF OPERATIONS AND OPERATING SEGMENTS

The Company operates as a one-bank holding company.  The Company's business primarily consists of the operations of Great Southern Bank (the "Bank"), which provides a full range of financial services to customers primarily located in Missouri, Iowa, Kansas, Minnesota, Nebraska and Arkansas.  In addition, the Company operates commercial loan production offices in Dallas, Texas and Tulsa, Oklahoma.  The Company and the Bank are subject to the regulation of certain federal and state agencies and undergo periodic examinations by those regulatory agencies.

The Company's banking operation is its only reportable segment.  The banking operation is principally engaged in the business of originating residential and commercial real estate loans, construction loans, commercial business loans and consumer loans and funding these loans through attracting deposits from the general public, accepting brokered deposits and borrowing from the Federal Home Loan Bank and others.  The operating results of this segment are regularly reviewed by management to make decisions about resource allocations and to assess performance.  Selected information is not presented separately for the Company's reportable segment, as there is no material difference between that information and the corresponding information in the consolidated financial statements.

NOTE 3: RECENT ACCOUNTING PRONOUNCEMENTS

In January 2014, the FASB issued ASU No. 2014-04 to amend FASB ASC Topic 310, Receivables – Troubled Debt Restructurings by Creditors.  The objective of the amendments in this Update is to reduce diversity by clarifying when an in substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized.  The amendments in this Update clarify that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction.  The Update was effective for the Company beginning January 1, 2015, and did not have a material impact on the Company's financial position or results of operations.

9

In June 2014, the FASB issued ASU No. 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures. The guidance in this Update changes the accounting for repurchase-to-maturity transactions and repurchase financing arrangements. It also requires enhanced disclosures about repurchase agreements and similar transactions. The accounting changes in this Update are effective for public companies for the first interim or annual period beginning after December 15, 2014. In addition, for public companies, the disclosure for certain transactions accounted for as a sale is effective for the first interim or annual period beginning on or after December 15, 2014, and the disclosure for transactions accounted for as secured borrowings is required to be presented for annual periods beginning after December 15, 2014, and interim periods beginning after March 15, 2015. Early application is not permitted for public companies. The adoption of this Update did not have a material effect on the Company's consolidated financial statements.

In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606):  Deferral of the Effective Date, which deferred the effective date of ASU 2014-09.  In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606): Summary and Amendments that Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs—Contracts with Customers (Subtopic 340-40). The guidance in this Update supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the industry topics of the codification. For public companies, the original Update was to be effective for interim and annual periods beginning after December 15, 2016.  The current ASU states that the provisions of ASU 2014-09 should be applied to annual reporting periods, including interim periods, beginning after December 15, 2017.  The Company is currently assessing the impact that this guidance will have on its consolidated financial statements.

In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis.  The update changes the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIE) or voting interest entities (VOE), and consolidation conclusions could change for entities that are already considered VIEs.  The update also eliminates both the consolidation model specific to limited partnerships and the current presumption that a general partner controls a limited partnership.  The Company is currently assessing the impact that this guidance may have, if any, on its consolidated financial statements.

In May 2015, the FASB issued ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities that Calculate Net Asset Value Per Share.  The guidance in this update removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient. The new authoritative guidance is effective for interim and annual periods beginning after December 15, 2015 and is not expected to have a material effect on the Company's consolidated financial statements.

NOTE 4: STOCKHOLDERS' EQUITY

Previously, the Company's stockholders approved the Company's reincorporation to the State of Maryland. Under Maryland law, there is no concept of "Treasury Shares." Instead, shares purchased by the Company constitute authorized but unissued shares under Maryland law. Accounting principles generally accepted in the United States of America state that accounting for treasury stock shall conform to state law. The cost of shares purchased by the Company has been allocated to Common Stock and Retained Earnings balances.

NOTE 5: EARNINGS PER SHARE

	Three Months Ended September 30,
	2015		2014
	(In Thousands, Except Per Share Data)
Basic:
Average shares outstanding		13,840		13,696
Net income available to common stockholders	$	11,051	$	11,445
Per common share amount	$	0.80	$	0.84
Diluted:
Average shares outstanding		13,840		13,696
Net effect of dilutive stock options – based on the treasury
stock method using average market price		178		89
Diluted shares		14,018		13,785
Net income available to common stockholders	$	11,051	$	11,445
Per common share amount	$	0.79	$	0.83

10

	Nine Months Ended September 30,
	2015		2014
	(In Thousands, Except Per Share Data)
Basic:
Average shares outstanding		13,815		13,693
Net income available to common stockholders	$	34,417	$	31,027
Per common share amount	$	2.49	$	2.27
Diluted:
Average shares outstanding		13,815		13,693
Net effect of dilutive stock options – based on the treasury
stock method using average market price		178		75
Diluted shares		13,993		13,768
Net income available to common stockholders	$	34,417	$	31,027
Per common share amount	$	2.46	$	2.25

Options outstanding at September 30, 2015 and 2014, to purchase 7,250 and 118,600 shares of common stock, respectively, were not included in the computation of diluted earnings per common share for each of the three and nine month periods because such options' exercise prices were greater than the average market prices of the common shares for the three and nine months ended September 30, 2015 and 2014, respectively.

NOTE 6: INVESTMENT SECURITIES

	September 30, 2015
			Gross		Gross				Tax
	Amortized		Unrealized		Unrealized		Fair		Equivalent
	Cost		Gains		Losses		Value		Yield
	(In Thousands)
AVAILABLE-FOR-SALE SECURITIES:
U.S. government agencies	$	20,000	$	—	$	17	$	19,983		2.00	%
Mortgage-backed securities		169,293		2,756		119		171,930		1.97
States and political subdivisions		72,984		4,876		7		77,853		5.71
Equity securities		847		2,632		—		3,479		—
	$	263,124	$	10,264	$	143	$	273,245		3.00	%
HELD-TO-MATURITY SECURITIES:
States and political subdivisions	$	353	$	36	$	—	$	389		7.37	%

	December 31, 2014
			Gross		Gross				Tax
	Amortized		Unrealized		Unrealized		Fair		Equivalent
	Cost		Gains		Losses		Value		Yield
	(In Thousands)
AVAILABLE-FOR-SALE SECURITIES:
U.S. government agencies	$	20,000	$	—	$	486	$	19,514		2.00	%
Mortgage-backed securities		254,294		4,325		821		257,798		1.97
States and political subdivisions		79,237		5,810		7		85,040		5.76
Equity securities		847		2,307		—		3,154		—
	$	354,378	$	12,442	$	1,314	$	365,506		2.82	%
HELD-TO-MATURITY SECURITIES:
States and political subdivisions	$	450	$	49	$	—	$	499		7.37	%

11

The amortized cost and fair value of available-for-sale securities at September 30, 2015, 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.

	Amortized		Fair
	Cost		Value
	(In Thousands)
One year or less	$	—	$	—
After one through five years		616		652
After five through ten years		3,290		3,455
After ten years		89,078		93,729
Securities not due on a single maturity date		169,293		171,930
Equity securities		847		3,479
	$	263,124	$	273,245

The held-to-maturity securities at September 30, 2015, by contractual maturity, are shown below.  Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized		Fair
	Cost		Value
	(In Thousands)
After one through five years	$	353	$	389

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 September 30, 2015 and December 31, 2014, respectively, was approximately $32.0 million and $106.0 million, which is approximately 11.7% and 29.0% of the Company's combined available-for-sale and held-to-maturity 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 at September 30, 2015.

The following table shows the Company's gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2015 and December 31, 2014:

	September 30, 2015
	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)
U.S. government agencies	$	20,000	$	(17	)	$	—	$	—		$	20,000	$	(17	)
Mortgage-backed securities		1,402		(19	)		9,693		(100	)		11,095		(119	)
State and political
subdivisions		—		—			913		(7	)		913		(7	)
	$	21,402	$	(36	)	$	10,606	$	(107	)	$	32,008	$	(143	)

12

	December 31, 2014
	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)
U.S. government agencies	$	—		—		$	20,000	$	(486	)	$	20,000	$	(486	)
Mortgage-backed securities		40,042		(328	)		45,056		(493	)		85,098		(821	)
State and political
subdivisions		—		—			925		(7	)		925		(7	)
	$	40,042	$	(328	)	$	65,981	$	(986	)	$	106,023	$	(1,314	)

Gross gains of $503,000 and $503,000 and gross losses of $501,000 and $501,000 resulting from sales of available-for-sale securities were realized for the three and nine months ended September 30, 2015.  Gross gains of $656,000 and $1.3 million and gross losses of $335,000 and $335,000 resulting from sales of available-for-sale securities were realized for the three and nine months ended September 30, 2014.  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.  Where the security is a beneficial interest in securitized financial assets, the Company uses the beneficial interests in securitized financial asset impairment model.  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 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 nine months ended September 30, 2015, no securities were determined to have impairment that was other than temporary.

Credit Losses Recognized on Investments.  There were no debt securities that have experienced fair value deterioration due to credit losses, as well as due to other market factors, but are not otherwise other-than-temporarily impaired.

13

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 nine months ended September 30, 2015 and 2014, were as follows:

	Amounts Reclassified from Other Comprehensive Income Three Months Ended September 30,						Affected Line Item in the Statements of Income
	2015			2014
	(In Thousands)
Unrealized gains on available-							Net realized gains on available-
for-sale securities	$	2		$	321		for-sale securities
							(Total reclassified amount before tax)
Income Taxes		(1	)		(112	)	Provision for income taxes
Total reclassifications out of accumulated
other comprehensive income	$	1		$	209

	Amounts Reclassified from Other Comprehensive Income Nine Months Ended September 30,						Affected Line Item in the Statements of Income
	2015			2014
	(In Thousands)
Unrealized gains on available-							Net realized gains on available-
for-sale securities	$	2		$	963		for-sale securities
							(Total reclassified amount before tax)
Income Taxes		(1	)		(337	)	Provision for income taxes
Total reclassifications out of accumulated
other comprehensive income	$	1		$	626

14

NOTE 7: LOANS AND ALLOWANCE FOR LOAN LOSSES

	September 30,			December 31,
	2015			2014
	(In Thousands)
One- to four-family residential construction	$	39,160		$	40,361
Subdivision construction		44,008			28,593
Land development		47,165			52,096
Commercial construction		448,571			392,929
Owner occupied one- to four-family residential		99,730			87,549
Non-owner occupied one- to four-family residential		150,410			143,051
Commercial real estate		1,041,645			945,876
Other residential		407,945			392,414
Commercial business		411,258			354,012
Industrial revenue bonds		38,241			41,061
Consumer auto		403,677			323,353
Consumer other		76,647			78,029
Home equity lines of credit		75,768			66,272
Acquired FDIC-covered loans, net of discounts		249,544			286,608
Acquired loans no longer covered by FDIC loss sharing agreements,
net of discounts		36,642			49,945
Acquired non-covered loans, net of discounts		100,345			121,982
		3,670,756			3,404,131
Undisbursed portion of loans in process		(357,789	)		(323,572	)
Allowance for loan losses		(39,878	)		(38,435	)
Deferred loan fees and gains, net		(3,126	)		(3,276	)
	$	3,269,963		$	3,038,848
Weighted average interest rate		4.54	%		4.66	%

15

Classes of loans by aging were as follows:

	September 30, 2015
													Total Loans
					Past Due								> 90 Days
	30-59 Days		60-89 Days		90 Days		Total Past				Total Loans		Past Due and
	Past Due		Past Due		or More		Due		Current		Receivable		Still Accruing
	(In Thousands)
One- to four-family
residential construction	$	—	$	—	$	—	$	—	$	39,160	$	39,160	$	—
Subdivision construction		—		—		—		—		44,008		44,008		—
Land development		4,028		—		113		4,141		43,024		47,165		—
Commercial construction		—		—		—		—		448,571		448,571		—
Owner occupied one- to four-
family residential		198		394		769		1,361		98,369		99,730		127
Non-owner occupied one- to
four-family residential		103		96		559		758		149,652		150,410		254
Commercial real estate		6,590		—		3,955		10,545		1,031,100		1,041,645		—
Other residential		—		—		—		—		407,945		407,945		—
Commercial business		238		—		287		525		410,733		411,258		—
Industrial revenue bonds		—		—		—		—		38,241		38,241		—
Consumer auto		2,566		612		632		3,810		399,867		403,677		—
Consumer other		1,040		115		528		1,683		74,964		76,647		—
Home equity lines of credit		182		87		261		530		75,238		75,768		—
Acquired FDIC-covered
loans, net of discounts		837		1,539		13,119		15,495		234,049		249,544		761
Acquired loans no longer
covered by loss sharing
agreements, net of
discounts		117		—		38		155		36,487		36,642		—
Acquired non-covered loans,
net of discounts		405		450		5,756		6,611		93,734		100,345		74
		16,304		3,293		26,017		45,614		3,625,142		3,670,756		1,216
Less FDIC-supported loans,
and acquired non-covered
loans, net of discounts		1,359		1,989		18,913		22,261		364,270		386,531		835
Total	$	14,945	$	1,304	$	7,104	$	23,353	$	3,260,872	$	3,284,225	$	381

16

	December 31, 2014
													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	$	—	$	—	$	—	$	—	$	40,361	$	40,361	$	—
Subdivision construction		109		—		—		109		28,484		28,593		—
Land development		110		—		255		365		51,731		52,096		—
Commercial construction		—		—		—		—		392,929		392,929		—
Owner occupied one- to four-
family residential		2,037		441		1,029		3,507		84,042		87,549		170
Non-owner occupied one- to
four-family residential		583		—		296		879		142,172		143,051		—
Commercial real estate		6,887		—		4,699		11,586		934,290		945,876		187
Other residential		—		—		—		—		392,414		392,414		—
Commercial business		59		—		411		470		353,542		354,012		—
Industrial revenue bonds		—		—		—		—		41,061		41,061		—
Consumer auto		1,801		244		316		2,361		320,992		323,353		—
Consumer other		1,301		260		801		2,362		75,667		78,029		397
Home equity lines of credit		89		—		340		429		65,843		66,272		22
Acquired FDIC-covered loans,      net of discounts		6,236		1,062		16,419		23,717		262,891		286,608		194
Acquired loans no longer covered by FDIC loss sharing agreements,
net of discounts		754		46		243		1,043		48,902		49,945		—
Acquired non-covered loans, net of discounts		2,638		640		11,248		14,526		107,456		121,982		—
		22,604		2,693		36,057		61,354		3,342,777		3,404,131		970
Less FDIC-supported loans,
and acquired non-covered loans, net of discounts		9,628		1,748		27,910		39,286		419,249		458,535		194
Total	$	12,976	$	945	$	8,147	$	22,068	$	2,923,528	$	2,945,596	$	776

Nonaccruing loans (excluding FDIC-supported loans, net of discount and acquired non-covered loans, net of discount) are summarized as follows:

	September 30,		December 31,
	2015		2014
	(In Thousands)
One- to four-family residential construction	$	—	$	—
Subdivision construction		—		—
Land development		113		255
Commercial construction		—		—
Owner occupied one- to four-family residential		642		859
Non-owner occupied one- to four-family residential		305		296
Commercial real estate		3,955		4,512
Other residential		—		—
Commercial business		287		411
Industrial revenue bonds		—		—
Consumer auto		632		316
Consumer other		528		404
Home equity lines of credit		261		318
Total	$	6,723	$	7,371

17

The following table presents the activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2015.  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 September 30, 2015:

	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 July 1, 2015	$	3,886		$	3,342		$	20,191		$	3,288		$	3,992		$	4,999		$	39,698
Provision (benefit) charged to expense		515			162			(284	)		(158	)		728			740			1,703
Losses charged off		—			—			(803	)		(132	)		(193	)		(1,312	)		(2,440	)
Recoveries		36			12			32			81			45			711			917
Balance September 30, 2015	$	4,437		$	3,516		$	19,136		$	3,079		$	4,572		$	5,138		$	39,878
Balance January 1, 2015	$	3,455		$	2,941		$	19,773		$	3,562		$	3,679		$	5,025		$	38,435
Provision (benefit) charged to expense		961			546			(45	)		(348	)		1,618			1,571			4,303
Losses charged off		(66	)		(2	)		(807	)		(329	)		(968	)		(3,394	)		(5,566	)
Recoveries		87			31			215			194			243			1,936			2,706
Balance September 30, 2015	$	4,437		$	3,516		$	19,136		$	3,079		$	4,572		$	5,138		$	39,878
Ending balance:
Individually evaluated for
impairment	$	763		$	—		$	3,340		$	1,405		$	473		$	311		$	6,292
Collectively evaluated for
impairment	$	2,907		$	3,497		$	15,398		$	1,491		$	3,943		$	4,509		$	31,745
Loans acquired and
accounted for under ASC
310-30	$	767		$	19		$	398		$	183		$	156		$	318		$	1,841
Loans
Individually evaluated for
impairment	$	8,558		$	9,567		$	32,232		$	7,416		$	2,701		$	2,016		$	62,490
Collectively evaluated for
impairment	$	324,750		$	398,378		$	1,009,413		$	488,320		$	446,798		$	554,076		$	3,221,735
Loans acquired and
accounted for under ASC
310-30	$	199,047		$	43,268		$	81,832		$	6,149		$	11,617		$	44,618		$	386,531

The following table presents the activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2014:

	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 July 1, 2014	$	5,073		$	1,723		$	16,476		$	8,249		$	2,582		$	3,979		$	38,082
Provision (benefit) charged to expense		(1,647	)		545			2,838			(2,499	)		632			1,076			945
Losses charged off		(106	)		—			(520	)		(1	)		(50	)		(1,107	)		(1,784	)
Recoveries		120			14			170			24			—			510			838
Balance September 30, 2014	$	3,440		$	2,282		$	18,964		$	5,773		$	3,164		$	4,458		$	38,081
Balance January 1, 2014	$	6,235		$	2,678		$	16,939		$	4,464		$	6,451		$	3,349		$	40,116
Provision (benefit) charged to expense		(1,280	)		(423	)		2,704			1,263			(619	)		2,454			4,099
Losses charged off		(1,803	)		(2	)		(1,239	)		(131	)		(2,737	)		(2,891	)		(8,803	)
Recoveries		288			29			560			177			69			1,546			2,669
Balance September 30, 2014	$	3,440		$	2,282		$	18,964		$	5,773		$	3,164		$	4,458		$	38,081

18

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, 2014:

	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	$	829	$	—	$	1,751	$	1,507	$	823	$	232	$	5,142
Collectively evaluated for
impairment	$	2,532	$	2,923	$	16,671	$	1,905	$	2,805	$	4,321	$	31,157
Loans acquired and
accounted for under ASC
310-30	$	94	$	18	$	1,351	$	150	$	51	$	472	$	2,136
Loans
Individually evaluated for
impairment	$	11,488