Risk Factors - SMBC

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$SMBC Risk Factor changes from 00/09/13/23/2023 to 00/09/13/24/2024

Item 1A. Risk Factors and the section captioned “Forward Looking Statements” in this section and other cautionary statements set forth elsewhere in this report. GeneralSouthern Missouri Bancorp, Inc. ("Company") is a bank holding company and the parent company of Southern Bank (“Bank”). The Company changed its state of incorporation to Missouri on April 1, 1999, after originally incorporating in Delaware on December 30, 1993, for the purpose of becoming the holding company for the Bank, which was known as Southern Missouri Savings Bank upon completion of its conversion from a state chartered mutual savings and loan association to a state chartered stock savings bank. The Company’s common stock is quoted on the NASDAQ Global Market under the symbol "SMBC".The Bank was originally chartered by the state of Missouri as a mutual savings and loan association in 1887. On June 4, 2004, Southern Missouri Bank & Trust Co. converted from a Missouri chartered stock savings bank to a Missouri chartered trust company with banking powers ("Charter Conversion"). On June 1, 2009, the institution changed its name to Southern Bank.The primary regulator of the Bank is the Missouri Division of Finance. The Bank is a member of the Federal Reserve, and the Board of Governors of the Federal Reserve System ("Federal Reserve Board" or "FRB") is the Bank’s primary federal regulator. The Bank’s deposits continue to be insured up to applicable limits by the Deposit Insurance Fund ("DIF") of the Federal Deposit Insurance Corporation ("FDIC"). With the Bank’s conversion to a trust company with banking powers, the Company became a bank holding company regulated by the FRB.The principal business of the Bank consists of attracting retail deposits from the general public and using such deposits along with wholesale funding from the Federal Home Loan Bank of Des Moines, ("FHLB"), and brokered deposits, to invest in one- to four-family residential mortgage loans, mortgage loans secured by commercial real estate, commercial non-mortgage business loans, construction loans, and consumer loans. These funds are also used to purchase mortgage-backed and related securities ("MBS"), municipal bonds, and other permissible investments.At June 30, 2024, the Company had total assets of $4.6 billion, total deposits of $4.0 billion and stockholders’ equity of $488.7 million. The Company has not engaged in any significant activity other than holding the stock of the Bank. Accordingly, the information set forth in this report, including financial statements and related data, relates primarily to the Bank. The Company’s revenues are derived principally from interest earned on loans and investment securities, and, to a lesser extent, banking service charges, bank card interchange fees, gains on sales of loans and loan servicing income, loan late charges, increases in the cash surrender value of bank owned life insurance, and other fee income.Acquisitions During The Last Ten YearsOn January 20, 2023, the Company completed its acquisition of Citizens Bancshares, Co. (“Citizens”), the parent company of Citizens Bank & Trust Company (“Citizens Bank”). At closing, before purchase accounting adjustments, Citizens held total assets of $985.7 million, loans, net of $456.0 million, and deposits of $851.0 million. The acquisition resulted in goodwill of $23.5 million, which was attributable to synergies and economies of scale expected to result from combining the operations of the Bank and Citizens Bank. Goodwill from this transaction was recorded at the Company level, and was not deductible for tax purposes.On February 25, 2022, the Company completed its acquisition of Fortune Financial, Inc. (“Fortune”), the parent company of FortuneBank (“FB”) in a stock and cash transaction. At closing, before purchase accounting adjustments, Fortune held total assets of $253.0 million, loans, net of $202.1 million, and deposits of $218.3 million. The acquisition resulted in goodwill of $12.8 million, which was attributable to synergies and economies of scale expected to result from 3 Table of Contentscombining the operations of the Bank and FB.5 million, which was attributable to synergies and economies of scale expected to result from combining the operations of the Bank and the Bank of Thayer. Goodwill from this transaction was recorded at the Company level, and was not deductible for tax purposes. On December 15, 2021, the Company completed its acquisition of the Cairo, Illinois, branch (“Cairo”) of First National Bank, Oldham, South Dakota. The deal resulted in Southern Bank relocating its facility from its prior location in Cairo to the First National Bank location in Cairo. The Company views the acquisition and updates to the new facility as an expression of its continuing commitment to the Cairo community. The acquisition resulted in goodwill of $442,000, which was recorded at the Bank level, and was not deductible for tax purposes.On May 22, 2020, the Company completed its acquisition of Central Federal Bancshares, Inc. (“Central”) and its wholly owned subsidiary, Central Federal Savings & Loan Association of Rolla (“Central Federal”), in an all-cash transaction. At closing, Central held total assets of $70.6 million, loans, net, of $51.4 million, and deposits of $46.7 million. The acquisition resulted in a bargain purchase gain of $123,000, while none of the purchase price was allocated to goodwill.On November 21, 2018, the Company completed its acquisition of Gideon Bancshares Company (“Gideon”) and its wholly owned subsidiary, First Commercial Bank (“First Commercial”), in a stock and cash transaction. At closing, Gideon held total assets of $217 million, loans, net, of $144 million, and deposits of $171 million. The acquisition resulted in goodwill of $1.0 million, which was attributable to synergies and economies of scale expected to result from combining the operations of the Bank and First Commercial. Goodwill from this transaction was recorded at the Bank level, and was not deductible for tax purposes.On February 23, 2018, the Company completed its acquisition of Southern Missouri Bancshares, Inc. (“Bancshares”), and its wholly owned subsidiary, Southern Missouri Bank of Marshfield (“SMB-Marshfield”), in a stock and cash transaction. SMB-Marshfield was merged into the Bank at acquisition. At closing, Bancshares held total assets of $86.2 million, loans, net, of $68.3 million, and deposits of $68.2 million. The acquisition resulted in goodwill of $4.4 million, which was attributable to synergies and economies of scale expected to result from combining the operations of the Bank and SMB-Marshfield. Goodwill from this transaction was recorded at the Company level, and was not deductible for tax purposes.On June 16, 2017, the Company completed its acquisition of Tammcorp, Inc. (Tammcorp), and its subsidiary, Capaha Bank (Capaha), Tamms, Illinois, in a stock and cash transaction. Capaha was merged into the Bank at acquisition. At closing, Tammcorp held total assets of $187 million, loans, net, of $153 million, and deposits of $167 million. A Tammcorp note payable of $3.7 million was contractually required to be repaid in conjunction with the acquisition. The acquisition resulted in goodwill of $4.1 million, which was attributable to synergies and economies of scale expected to result from combining the operations of the Bank and Capaha. Goodwill from this transaction was recorded at the Company level, and was not deductible for tax purposes.On August 5, 2014, the Company completed its acquisition of Peoples Service Company (PSC) and its subsidiaries, Peoples Banking Company (PBC) and Peoples Bank of the Ozarks (Peoples), Nixa, Missouri, in a stock and cash transaction (the “Peoples Acquisition”).4​​ Table of ContentsOn August 5, 2014, the Company completed its acquisition of Peoples Service Company (PSC) and its subsidiaries, Peoples Banking Company (PBC) and Peoples Bank of the Ozarks (Peoples), Nixa, Missouri, in a stock and cash transaction (the “Peoples Acquisition”). Peoples was merged into the Bank in early December, 2014, in connection with the conversion of Peoples’ data system. At closing, PSC held total assets of $267 million, loans, net, of $193 million, and deposits of $221 million. The Company acquired Peoples primarily for the purpose of expanding its commercial banking activities to markets where it believes the Company’s business model will perform well, and for the long-term value of its core deposit franchise. Notes payable of $2.9 million were contractually required to be repaid on the date of acquisition. The acquisition resulted in goodwill of $3.0 million, which was attributable to synergies and economies of scale expected to result from combining the operations of the Bank and Peoples. Goodwill from this transaction was recorded at the Company level, and was not deductible for tax purposes.The Company completed each of the above whole bank acquisitions primarily for the purpose of expanding its commercial banking activities where it believes the Company’s business model will perform well and for the long-term value of its core deposit franchise. The Company completed each of the above whole bank acquisitions primarily for the purpose of expanding its commercial banking activities where it believes the Company’s business model will perform well and for the long-term value of its core deposit franchise. 4 Table of ContentsCapital Raising TransactionsOn June 20, 2017, the Company completed an at-the-market common stock issuance.Capital Raising TransactionsOn June 20, 2017, the Company completed an at-the-market common stock issuance. A total of 794,762 shares of the Company’s common stock were sold at a weighted-average price of approximately $31.46 per share, representing gross proceeds to the Company of approximately $25.0 million. The proceeds from the transaction have been used for general corporate purposes, including working capital to support organic growth at Southern Bank, and to support acquisitions to the extent available.On November 22, 2011, the Company completed an underwritten public offering of 1,150,000 shares of common stock at a price to the public of $19.00 per share, for aggregate gross proceeds of $21.9 million. The proceeds from the offering have been used for general corporate purposes, including the funding of loan growth and the purchase of securities.Forward Looking Statements This document contains statements about the Company and its subsidiaries which we believe are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include, without limitation, statements with respect to anticipated future operating and financial performance, growth opportunities, interest rates, cost savings and funding advantages expected or anticipated to be realized by management. Words such as "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan" and similar expressions are intended to identify these forward-looking statements. Forward-looking statements by the Company and its management are based on beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions of management and are not guarantees of future performance. The important factors we discuss below, as well as other factors discussed under the caption "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and identified in the filing and in our other filings with the SEC and those presented elsewhere by our management from time to time, could cause actual results to differ materially from those indicated by the forward-looking statements made in this document:●expected cost savings, synergies and other benefits from our merger and acquisition activities, including our recently completed acquisitions, might not be realized within the anticipated time frames, to the extent anticipated, or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention and labor shortages, might be greater than expected and goodwill impairment charges might be incurred;●potential adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth;●the strength of the United States economy in general and the strength of the local economies in which we conduct operations;●fluctuations in interest rates and inflation, including the effects of a potential recession whether caused by Federal Reserve actions or otherwise or slowed economic growth caused by changes in oil prices or supply chain disruptions;●the impact of monetary and fiscal policies of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) and the U. The important factors we discuss below, as well as other factors discussed under the caption "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and identified in the filing and in our other filings with the SEC and 5​​ Table of Contentsthose presented elsewhere by our management from time to time, could cause actual results to differ materially from those indicated by the forward-looking statements made in this document:●the remaining effects of the COVID-19 pandemic on general economic conditions, either nationally or in the Company’s market and lending areas;●expected cost savings, synergies and other benefits from our merger and acquisition activities, including our recently completed acquisitions, might not be realized within the anticipated time frames, to the extent anticipated, or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention and labor shortages, might be greater than expected and goodwill impairment charges might be incurred;●the strength of the United States economy in general and the strength of the local economies in which we conduct operations;●fluctuations in interest rates and inflation, including the effects of a potential recession whether caused by Federal Reserve actions or otherwise or slowed economic growth caused by changes in oil prices or supply chain disruptions;●monetary and fiscal policies of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) and the U. S. Government and other governmental initiatives affecting the financial services industry;●the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment;5 Table of Contents●the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses on loans;●our ability to access cost-effective funding and maintain sufficient liquidity;●the timely development of and acceptance of our new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors’ products and services;●fluctuations in real estate values and both residential and commercial real estate markets, as well as agricultural business conditions;●demand for loans and deposits;●the impact of a federal government shutdown;●legislative or regulatory changes that adversely affect our business;●the effects of climate change, severe weather events, other natural disasters, war, terrorist activities or civil unrest and their effects on economic and business environments in which the Company operates;●changes in accounting principles, policies, or guidelines;●results of examinations of us by our regulators, including the possibility that our regulators may, among other things, require an increase in our reserve for credit losses on loans or a write-down of assets;●the impact of technological changes and an inability to keep pace with the rate of technological advances;●cyber threats, such as phishing, ransomware, and insider attacks, can lead to financial loss, reputational damage, and regulatory penalties if sensitive customer data and critical infrastructure are not adequately protected; and●our success at managing the risks involved in the foregoing. Government and other governmental initiatives affecting the financial services industry;●the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment;●the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses;●our ability to access cost-effective funding and maintain sufficient liquidity;●the timely development of and acceptance of our new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors’ products and services;●fluctuations in real estate values and both residential and commercial real estate markets, as well as agricultural business conditions;●demand for loans and deposits;●legislative or regulatory changes that adversely affect our business;●the transition from LIBOR to new interest rate benchmarks; natural disasters, war, terrorist activities or civil unrest and their effects on economic and business environments in which the Company operates;●changes in accounting principles, policies, or guidelines;●results of examinations of us by our regulators, including the possibility that our regulators may, among other things, require an increase in our reserve for loan losses or a write-down of assets;●the impact of technological changes; and6​​ Table of Contents●our success at managing the risks involved in the foregoing. Any forward-looking statements are based upon management’s beliefs and assumptions at the time they are made.

The Company wishes to advise readers that the factors listed above and other risks described in this Annual Report on Form 10-K, including, without limitation, those described under Item 1A. “Risk Factors,” and other documents filed or furnished from time to time by the Company with the SEC (and are available on our website at www.bankwithsouthern.com and on the SEC’s website at www.sec.gov) could affect the Company’s financial performance and cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. We undertake no obligation to publicly update or revise any forward-looking statements or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed might not occur, and you should not put undue reliance on any forward-looking statements.Market AreaThe Bank provides its customers with a full array of community banking services and conducts its business from its headquarters in Poplar Bluff, as well as 62 full service branch offices, three limited service branch offices, and two loan production offices, as of June 30, 2024.​Market AreaThe Bank provides its customers with a full array of community banking services and conducts its business from its headquarters in Poplar Bluff, as well as 62 full service branch offices and three limited service branch offices, as of June 30, 2023. The branch offices are located in Poplar Bluff (4), Van Buren, Dexter (2), Kennett, Doniphan, Sikeston, Qulin, Springfield (3), Thayer (2), West Plains (2), Alton, Clever, Forsyth, Fremont 6 Table of ContentsHills, Kimberling City, Ozark, Nixa, Rogersville, Marshfield, Cape Girardeau (2), Jackson, Gideon, Chaffee, Benton, Advance, Bloomfield, Essex, Rolla, Arnold, Oakville, Kansas City (2), Kearney, Lee’s Summit, Macon, Maryville, Boonville, Brookfield, Chillicothe (2), Smithville, St. The branch offices are located in Poplar Bluff (4), Van Buren, Dexter (2), Kennett, Doniphan, Sikeston, Qulin, Springfield (3), Thayer (2), West Plains (2), Alton, Clever, Forsyth, Fremont Hills, Kimberling City, Ozark, Nixa, Rogersville, Marshfield, Cape Girardeau (2), Jackson, Gideon, Chaffee, Benton, Advance, Bloomfield, Essex, Rolla, Arnold, Oakville, Kansas City (2), Kearney, Lee’s Summit, Macon, Maryville, Boonville, Brookfield, Chillicothe (2), Smithville, St. Joseph (2), and Trenton, Missouri; Jonesboro (2), Paragould, Batesville, Searcy, Bald Knob, Bradford, and Cabot, Arkansas; Anna, Cairo, and Tamms, Illinois; and Leawood, Kansas. In January 2023, the Company completed a merger with Citizens adding fourteen branches in markets in Missouri and Kansas, including the Kansas City and St. Joseph Metropolitan Statistical Areas (MSAs). In fiscal 2024, the bank relocated two loan production offices in Lee’s Summit, Missouri, and Overland Park, Kansas.For purposes of management and oversight of its operations, the Bank has organized its facilities into five regional markets. For purposes of management and oversight of its operations, the Bank has organized its facilities into five regional markets. The Bank’s east region includes 24 of its facilities, one of which is limited service, which are situated in Butler, Cape Girardeau, Carter, New Madrid, Ripley, Scott, and Stoddard counties in Missouri, and Alexander and Union counties in Illinois. These counties have a total population of approximately 244,000, and included within this market area is the Cape Girardeau MSA, which has a population of approximately 98,000. At June 30, 2024 the Bank’s south region includes 13 of its facilities, one of which is limited service, which are situated in Dunklin, Howell, and Oregon counties in Missouri, and Craighead, Greene, Independence, Lonoke, and White counties in Arkansas. These counties have a total population of approximately 430,000, and included within this market area is the Jonesboro MSA, which has a population of approximately 136,000. The Cabot, Arkansas, branch in Lonoke County, is located in the northeast corner of the Little Rock MSA, which has a population of approximately 764,000. The Cabot, Arkansas, branch in Lonoke County, is located in the northeast corner of the Little Rock MSA. The Bank’s west region includes 12 of its facilities, which are situated in Christian, Greene, Phelps, Stone, Taney, and Webster counties in Missouri. These counties have a total population of approximately 575,000, and included within this market area is the Springfield MSA, which has a population of approximately 491,000. The Bank’s north region includes two of its facilities, which are situated in Jefferson and St. Louis counties. The market area also includes the City of St. Louis. The two counties and the City of St. Louis have a total population of approximately 1.5 million. The north region market area is within the St. Louis MSA, which has a population of approximately 2.8 million. The Bank’s northwest region includes 15 of its facilities, one of which is limited service, which are situated in Buchanan, Clay, Cooper, Grundy, Jackson, Linn, Livingston, Macon, Nodaway, and Platte counties in Missouri, and Johnson county in Kansas. These counties have a total population of approximately 1.3 million, and some counties in this market area are located within the Kansas City MSA, or the St. Joseph MSA, which has a combined population of approximately 2.3 million. Each of these markets may also serve other communities just outside the area described, but without a notable impact on the demographics of the market area.The Bank’s east and south regions, and part of the northwest region. are generally rural in nature with economies supported by manufacturing activity, agriculture (livestock, dairy, poultry, rice, timber, soybeans, wheat, melons, corn, and cotton), healthcare, and education. Large employers include hospitals, manufacturers, school districts, and colleges. Large employers include hospitals, manufacturers, school districts, 7​​ Table of Contentsand colleges. In the west region, the Bank’s operations are generally more concentrated in the Springfield, Missouri, MSA, and major employers include healthcare providers, educational institutions, federal, local, and state government, retailers, transportation and distribution firms, and leisure, entertainment, and hospitality interests. In the north region, major employers include aviation and transportation, healthcare providers, medical research, educational institutions, retailers, manufacturers, energy/utilities, and hospitality. In the portion of the northwest region within the Kansas City MSA, major employers include healthcare providers, manufacturers, medical research, educational institutions, retailers, and hospitality. For purposes of the Bank’s lending policy, the Bank’s primary lending area is considered to be the counties where the Bank has a branch facility, and any contiguous county. CompetitionThe Bank faces strong competition in attracting deposits (its primary source of lendable funds) and originating loans.CompetitionThe Bank faces strong competition in attracting deposits (its primary source of lendable funds) and originating loans. The most recent market share data by the FDIC reflected that the Bank was one of 265 bank or saving association groups located in Missouri competing for approximately $250. The most recent market share data by the FDIC reflected that the Bank was one of 28 bank or saving association groups located in its east region competing for approximately $7. 0 billion in deposits at FDIC-insured institutions. The Bank’s market share was approximately 1.29% in the state of Missouri, where the majority of our deposits reside amongst the 55 locations in the state. Competitors for deposits include commercial banks, credit unions, digital payment applications, money market funds, and other investment alternatives, such as mutual funds, full service and discount broker-dealers, equity markets, brokerage accounts and government securities. The Bank’s competition for loans comes principally from other financial 7 Table of Contentsinstitutions, mortgage banking companies, mortgage brokers and life insurance companies. The Bank’s competition for loans comes principally from other financial institutions, mortgage banking companies, mortgage brokers and life insurance companies. The Bank expects competition to continue to increase in the future as a result of legislative, regulatory and technological changes within the financial services industry. Technological advances, for example, have lowered barriers to market entry, allowed banks to expand their geographic reach by providing services over the Internet and made it possible for non-depository institutions to offer products and services that traditionally have been provided by banks. The Gramm-Leach-Bliley Act, which permits affiliation among banks, securities firms and insurance companies, also has changed the competitive environment in which the Bank conducts business. Lending ActivitiesGeneral.Lending ActivitiesGeneral. The Bank’s lending activities consist of originating loans secured by mortgages on one- to four-family and multi-family residential real estate, commercial and agricultural real estate, construction loans on residential and commercial properties, commercial and agricultural business loans, and consumer loans. The Bank’s lending activities consist of originating loans secured by mortgages on one- to four-family and multi-family residential real estate, commercial and agricultural real estate, construction loans on residential and commercial properties, commercial and agricultural business loans, and consumer loans. The Bank has also occasionally purchased loan participation interests originated by other lenders. At June 30, 2024, the Bank had purchased participation interests in 71 loans with balances outstanding totaling $178.5 million. Supervision of the loan portfolio is the responsibility of our Chief Lending Officer, Rick Windes, Regional President Justin Cox, and our Chief Credit Officer, Mark Hecker (our “Senior Lending and Credit Officers”). The Chief Lending Officer and Regional President are responsible for oversight of loan production. The Chief Credit Officer is responsible for oversight of underwriting, loan policy, and administration. Loan officers have varying amounts of lending authority depending upon experience and types of loans. Loans beyond their authority are presented to the next level of authority, which may include one of five Regional Loan Committees, the Senior Loan Committee, an Agricultural Loan Committee, a Senior Agricultural Loan Committee, an SBA Loan Committee, or a Bank Executive Loan Committee.The Regional Loan Committees each consists of one director appointed by the Board of Directors and lenders selected by our Senior Lending and Credit Officers, and is authorized to approve lending relationships up to $4.0 million. The Senior Loan Committee consists of our Senior Lending and Credit Officers and lenders selected by them that have a higher level of lending experience. The Senior Loan Committee consists of our Senior Lending and Credit Officers and lenders selected by them 8​​ Table of Contentsthat have a higher level of lending experience. The Senior Loan Committee is authorized to approve lending relationships up to $10.0 million. The Bank’s Agricultural Loan Committee consists of several lending officers with agricultural lending experience selected by our Senior Lending and Credit Officers, and is authorized to approve agricultural lending relationships up to $4.0 million. The Senior Agricultural Loan Committee is authorized to approve agricultural lending relationships up to $10.0 million and consists of our Chief Credit Officer, as well as several senior lending officers with agricultural lending experience selected by our Senior Lending and Credit Officers. The Bank Executive Loan Committee consists of our Senior Lending and Credit Officers, plus our Chairman/CEO and our President/Chief Administrative Officer.In addition to the approval of the Senior Loan Committee or the Bank Executive Loan Committee, lending relationships in excess of $10.0 million require the approval of the Directors’ Loan Committee, which is comprised of all Bank directors. All loans are subject to ratification by the full Board of Directors.The aggregate amount of loans that the Bank is permitted to make under applicable federal regulations to any one borrower, including related entities, or the aggregate amount that the Bank could have invested in any one real estate project, is based on the Bank’s capital levels. At June 30, 2024, the maximum amount which the Bank could lend to any one borrower and the borrower’s related entities was approximately $126.4 million.1 million. At June 30, 2024, the Bank’s ten largest credit relationships, as defined by loan to one borrower limitations, ranged from $27.3 million to $76.3 million, or 6. 8 million, net of participation interests sold. As of June 30, 2024, the majority of these credits were commercial real estate, multi-family real estate, or commercial business loans, and all of these relationships were performing in accordance with their terms. 8 Table of ContentsLoan Portfolio Analysis.9​​ Table of ContentsLoan Portfolio Analysis. The following table sets forth the composition of the Bank’s loan portfolio by type of loan and type of security as of the dates indicated.​(1)Commercial real estate loan balances included farmland and other agricultural-related real estate loans of $232.5 million, $238.1 million, $213. 1 million, $213.1 million, $180.1 million, $213. 6 million, and $185.6 million, $185. 3 million, as of June 30, 2024, 2023, 2022, 2021, and 2020, respectively.7 million, as of June 30, 2023, 2022, 2021, 2020, and 2019, respectively. (2)Commercial business loan balances included agricultural equipment and production loans of $176.0 million, $138.1 million, $213. 3 million, $110.3 million, $104.9 million, and $100.9 million, $100. 3 million, as of June 30, 2024, 2023, 2022, 2021, and 2020, respectively.5 million, as of June 30, 2023, 2022, 2021, 2020, and 2019, respectively. (3)Commercial business loan balances included PPP loans of $433,000, $601,000, $3.(3)Commercial business loan balances included PPP loans of $601,000, $3. 1 million, $63.0 million and $132.3 million as of June 30, 2024, 2023, 2022, 2021 and 2020, respectively.7 million, as of June 30, 2023, 2022, 2021, 2020, and 2019, respectively. 9 Table of ContentsThe following table shows the fixed and adjustable rate composition of the Bank’s loan portfolio at the dates indicated.​Residential Mortgage Lending. The Bank actively originates loans for the acquisition or refinance of one- to four-family residences. These loans are originated as a result of customer and real estate agent referrals, existing and walk-in customers, and from responses to the Bank’s marketing campaigns. At June 30, 2024, residential loans secured by one- to four-family residences totaled $907.9 million, or 23.5 million, or 3. 9% of net loans receivable. The Bank currently offers both fixed-rate and adjustable-rate mortgage (“ARM”) loans. During the year ended June 30, 2024, the Bank originated $49.4 million of ARM loans and $97.4 million of ARM loans and $125. 6 million of fixed-rate loans that were secured by one- to four-family residences, for retention in the Bank’s portfolio. An additional $21.9 million in fixed-rate one- to four-family residential loans were originated for sale on the secondary market. Substantially all of the one- to four-family residential mortgage originations in the Bank’s portfolio are secured by property located within the Bank’s market area. Fixed rate one- to four- family loans represented 77.3% of the one- to four- family portfolio with a weighted average maturity of 14.7 years.The Bank generally originates one- to four-family residential mortgage loans for retention in its portfolio in amounts up to 90% of the lower of the purchase price or appraised value of residential property. For loans originated in excess of 80% loan-to-value, the Bank generally charges an additional 25-75 basis points, but does not require private mortgage insurance. At June 30, 2024, the outstanding balance of loans originated with a loan-to-value ratio in excess of 80% was $142.9 million. For fiscal years ended June 30, 2024, 2023, 2022, 2021, and 2020, originations of one- to four-family loans in excess of 80% loan-to-value have totaled $28. For fiscal years ended June 30, 2023, 2022, 2021, 2020, and 2019, originations of one- to four-family loans in excess of 80% loan-to-value have totaled $27. 3 million, $27.3 million, $50. 3 million, $50.8 million, $52.2 million, and $45.3 million, and $95. 9 million, respectively, totaling $204.3 million, respectively, totaling $199. 5 million. The outstanding balance of those loans originated in the last five years at June 30, 2024, was $122. The outstanding balance of those loans at June 30, 2023, was $110. 4 million.1 million. Originating loans with higher loan-to-value ratios presents additional credit risk to the Bank. Consequently, the Bank limits this product to borrowers with a favorable credit history and a demonstrable ability to service the debt. The majority of new residential mortgage loans originated by the Bank for retention in its portfolio conform to secondary market underwriting standards; however, documentation of loan files may not be adequate to allow for immediate sale. The interest rates charged on these loans are competitively priced based on local market conditions, the availability of funding, and anticipated profit margins. Fixed and ARM loans originated by the Bank are amortized over periods as long as 30 years, but typically are repaid over shorter periods.Fixed-rate loans secured by one- to four-family residences have contractual maturities up to 30 years, and are generally fully amortizing with payments due monthly. These loans normally remain outstanding for a substantially shorter period of time because of refinancing and other prepayments. A significant change in the interest rate environment can alter the average life of a residential loan portfolio. A significant change in the interest rate 11​​ Table of Contentsenvironment can alter the average life of a residential loan portfolio. The one- to four-family fixed-rate loans do not 10 Table of Contentscontain prepayment penalties. The one- to four-family fixed-rate loans do not contain prepayment penalties. At June 30, 2024, one- to four-family loans with a fixed rate totaled $622.1 million and had a weighted-average maturity of 176 months.The Bank also originates one- to four-family ARM loans, which adjust annually, after an initial period of one to seven years. Typically, originated ARM loans secured by owner occupied properties reprice at a margin of 2.75% to 3.00% over the weekly average yield on United States Treasury securities adjusted to a constant maturity of one year (“CMT”). Generally, ARM loans secured by non-owner occupied residential properties are tied to the Wall Street Journal prime rate. Owner occupied residential ARM loan originations are subject to annual and lifetime interest rate caps and floors. As a consequence of using interest rate caps, initial rates which may be at a premium or discount, and a "CMT" loan index, the interest earned on the Bank’s ARMs will react differently to changing interest rates than the Bank’s cost of funds. At June 30, 2024, one- to four-family loans tied to the CMT index totaled $103.4 million.1 million. One- to four-family loans tied to other indices totaled $79.2 million. In underwriting one- to four-family residential real estate loans, the Bank evaluates the borrower’s ability to meet debt service requirements at current as well as fully indexed rates for ARM loans, and the value of the property securing the loan. Most properties securing real estate loans made by the Bank during fiscal 2024 had appraisals performed on them by independent fee appraisers approved and qualified by the Board of Directors. The Bank generally requires borrowers to obtain title insurance and fire, property and flood insurance (if indicated) in an amount not less than the amount of the loan. Real estate loans originated by the Bank generally contain a "due on sale" clause allowing the Bank to declare the unpaid principal balance due and payable upon the sale of the security property.The Bank also originates loans secured by multi-family residential properties that are often located outside the Company’s primary market area, but made to borrowers who operate within the primary market area. At June 30, 2024, the Bank had $384. At June 30, 2023, the Bank had $1. 7 million, or 10.1 million, or 1. 1% of net loans receivable, in multi-family residential real estate. Fixed rate loans secured by multi-family residential properties represented 77.5% of the multi-family residential property portfolio with a weighted average maturity of 6.5 years.7 years. The majority of the multi-family residential loans that are originated by the Bank are amortized over periods generally up to 25 years, with balloon maturities up to ten years. Both fixed and adjustable interest rates are offered and it is typical for the Bank to include an interest rate “floor” and “ceiling” in variable-rate loan agreements. Variable rate loans typically adjust daily, monthly, quarterly or annually based on the Wall Street prime interest rate. Generally, multi-family residential loans do not exceed 85% of the lower of the appraised value or purchase price of the secured property. The Bank generally requires a Board-approved independent certified fee appraiser to be engaged in determining the collateral value. As a general rule, the Bank requires the unlimited guaranty of all individuals (or entities) owning (directly or indirectly) 20% or more of the borrowing entity.The primary risk associated with multi-family loans is the ability of the income-producing property that collateralizes the loan to produce adequate cash flow to service the debt. High unemployment or generally weak economic conditions may result in borrowers having to provide rental rate concessions to achieve adequate occupancy rates. In an effort to reduce these risks, the Bank evaluates the guarantor’s ability to inject personal funds as a tertiary source of repayment.Commercial Real Estate Lending. The Bank actively originates loans secured by commercial real estate including farmland, single- and multi-tenant retail properties, restaurants, hotels, nursing homes and other healthcare related facilities, land (improved and unimproved), convenience stores, automobile dealerships, and other automotive-related services, warehouses and distribution centers, and other businesses generally located in the Bank’s market area. At June 30, 2024, the Bank had $1.6 billion in commercial real estate loans, which represented 42.7% of net loans receivable. Of this amount, $232.5 million were loans secured by agricultural properties. Also included in commercial real estate were $25.1 million of non-owner occupied office property, comprised of 35 loans, representing 0.65% of total loans as of June 30, 2024. Notably, none of these loans were adversely classified as of that date, and they generally consist of smaller spaces with diverse tenant bases. In addition, the multifamily residential real estate loan portfolio included in commercial real estate typically includes loans secured by properties currently participating in the Low-Income Housing Tax Credit (LIHTC) program or those that have exited the program. The company continues to closely monitor its commercial real estate concentration and the performance of individual segments to manage risk effectively. The Bank expects to maintain, and may increase, the percentage of commercial real estate loans, inclusive of agricultural 11 Table of Contentsproperties, in its total portfolio. The Bank expects to maintain, and may increase, the percentage of commercial real estate loans, inclusive of agricultural properties, in its total portfolio. Fixed rate commercial real estate loans represented 81.0% of the commercial real estate portfolio with a weighted average maturity of 4.4 years.7 years. Commercial real estate loans originated by the Bank are generally based on amortization schedules of up to 25 years with monthly principal and interest payments.12​​ Table of ContentsCommercial real estate loans originated by the Bank are generally based on amortization schedules of up to 25 years with monthly principal and interest payments. Generally, these loans have fixed interest rates and maturities ranging up to ten years, with a balloon payment due at maturity. Alternatively, for some loans, the interest rate adjusts at least annually, based on the Wall Street Journal prime rate, after an initial fixed-rate period up to seven years. The Bank typically includes an interest rate "floor" in the loan agreement. Generally, loans for improved commercial properties do not exceed 80% of the lower of the appraised value or the purchase price of the secured property. Agricultural real estate terms offered differ slightly, with amortization schedules of up to 25 years with an 80% loan-to-value ratio, or 30 years with a 75% loan-to-value ratio. Agricultural real estate loans generally require annual, instead of monthly, payments. Before credit is extended, the Bank analyzes the financial condition of the borrower, the borrower’s credit history, and the reliability and predictability of the cash flow generated by the property and the value of the property itself. Generally, personal guarantees are obtained from the borrower in addition to obtaining the secured property as collateral for such loans. The Bank also generally requires appraisals on properties securing commercial real estate to be performed by a Board-approved independent certified fee appraiser.Generally, loans secured by commercial real estate involve a greater degree of credit risk than one- to four-family residential mortgage loans. These loans typically involve large balances to single borrowers or groups of related borrowers. Because payments on loans secured by commercial real estate are often dependent on the successful operation or management of the secured property, repayment of such loans may be subject to adverse conditions in the real estate market or the economy. See "Asset Quality."Construction Lending. The Bank originates real estate loans secured by property or land that is under construction or development. At June 30, 2024, the Bank had $438. At June 30, 2023, the Bank had $393. 1 million, or 11.5% of net loans receivable in construction loans outstanding and unfunded commitments on construction loans.4% of net loans receivable in construction loans outstanding and loans in process. Construction loans originated by the Bank are generally secured by mortgage loans for the construction of owner occupied residential real estate or to finance speculative construction secured by residential real estate, land development, or owner-occupied or non-owner occupied commercial real estate. At June 30, 2024, $106. At June 30, 2023, $124. 9 million of the Bank’s construction loans outstanding and unfunded commitments on construction loans were secured by one- to four-family residential real estate, $234.7 million of the Bank’s construction loans outstanding and loans in process were secured by one- to four-family residential real estate, $255. 4 million were secured by multi-family residential real estate, and $96.8 million were secured by commercial real estate. During construction, these loans typically require monthly interest-only payments with single-family residential construction loans maturing in nine to twelve months, while multi-family or commercial construction loans typically mature in 12 to 36 months. Once construction is completed, construction loans may be converted to permanent financing, generally with monthly payments using amortization schedules of up to 30 years on residential and up to 25 years on commercial real estate.Speculative construction and land development lending generally affords the Bank an opportunity to receive higher interest rates and fees with shorter terms to maturity than those obtainable from residential lending. Nevertheless, construction and land development lending is generally considered to involve a higher level of credit risk than one- to four-family residential lending due to (i) the concentration of principal among relatively few borrowers and development projects, (ii) the increased difficulty at the time the loan is made of accurately estimating building or development costs and the selling price of the finished product, (iii) the increased difficulty and costs of monitoring and disbursing funds for the loan, (iv) the higher degree of sensitivity to increases in market rates of interest and changes in local economic conditions, and (v) the increased difficulty of working out problem loans. Due in part to these risk factors, the Bank may be required from time to time to modify or extend the terms of some of these types of loans. In an effort to reduce these risks, the application process includes a submission to the Bank of accurate plans, specifications and costs of the project to be constructed. These items are also used as a basis to determine the appraised value of the subject property. Loan amounts are generally limited to 80% of the lesser of current appraised value and/or the cost of construction.At June 30, 2024, construction loans outstanding included 48 loans, totaling $22.0 million, for which a modification had been agreed to. At June 30, 2023, construction loans outstanding included 53 loans, totaling $33. At June 30, 2023, outstanding balances on loan participations purchased totaled $155. 4 million, for which a modification had been agreed to. In general, these modifications were solely for the purpose of 12 Table of Contentsextending the maturity date due to conditions described above, pursuant to the Company’s normal underwriting and monitoring procedures. As these modifications were not executed due to financial difficulty on the part of the borrower, they were not accounted for as modifications to borrowers experiencing financial difficulty.Consumer Lending. The Bank offers a variety of secured consumer loans, including: home equity, automobile, second mortgage, mobile home and deposit-secured loans. The Bank originates substantially all of its consumer loans in its primary market area. Generally, consumer loans are originated with fixed rates for terms of up to approximately 66 months, with the exception of home equity lines of credit, which are variable, tied to the prime rate of interest, and are for a period of ten years. At June 30, 2024, the Bank’s consumer loan portfolio totaled $144.6 million, or 3.8% of net loans receivable.Home equity loans represented 50.5% of the Bank’s consumer loan portfolio at June 30, 2024, and totaled $73.7% of the Bank’s consumer loan portfolio at June 30, 2023, and totaled $65. 1 million, or 1.9% of net loans receivable.Home equity lines of credit (HELOCs) are secured with a deed of trust or mortgage and are generally issued for up to 90% of the appraised or assessed value of the property securing the line of credit, less the outstanding balance on the first mortgage. Interest rates on HELOCs are adjustable and are tied to the current prime interest rate, generally with an interest rate floor in the loan agreement. This rate is obtained from the Wall Street Journal and adjusts on a daily basis. Interest rates are based upon the loan-to-value ratio of the property with better rates given to borrowers with more equity. HELOCs are secured by residential properties, which is generally considered to be stronger collateral than that securing other consumer loans. In addition, because of the adjustable rate structure, HELOCs present less interest rate risk to the Bank.Consumer loans for the purchase of automobiles represented 15.6% of the Bank’s consumer loan portfolio at June 30, 2024, and totaled $22.5 million, or 0.6% of net loans receivable. Of that total, an immaterial amount was originated by auto dealers. Typically, automobile loans are made for terms of up to 66 months for new and used vehicles. Loans secured by automobiles have fixed rates and are generally made in amounts up to 100% of the purchase price of the vehicle.Consumer loan rates and terms vary according to the type of collateral, length of contract and creditworthiness of the borrower, which is evaluated using credit scoring. Consumers with additional qualifying Bank products are eligible for additional pricing discounts. The underwriting standards employed for consumer loans include employment stability, a determination of the applicant’s payment history on other debts, and an assessment of ability to meet existing and proposed obligations. Although creditworthiness of the applicant is a primary consideration, the underwriting process also includes a comparison of the value of the security, if any, in relation to the proposed loan amount.Consumer loans may entail greater credit risk than do residential mortgage loans, because they are generally unsecured or are secured by rapidly depreciable or mobile assets, such as automobiles. In the event of repossession or default, there may be no secondary source of repayment or the underlying value of the collateral could be insufficient to repay the loan. In addition, consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be affected by adverse personal circumstances. Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans. The Bank’s delinquency levels for these types of loans are reflective of these risks. See "Asset Classification."Commercial Business Lending. The Bank’s commercial business lending activities encompass loans with a variety of purposes and security, including loans to finance accounts receivable, inventory, equipment and operating lines of credit. At June 30, 2024, the Bank had $668. At June 30, 2023, the Bank had $1. 3 million in commercial business loans outstanding, or 17.6% of net loans receivable. Of this amount, $176. Of this amount, $138. 0 million were loans related to agriculture, including amortizing equipment loans and annual production lines. The Bank expects to maintain, and may increase, the percentage of commercial business loans in its total loan portfolio. The Bank currently offers both fixed and adjustable rate commercial business loans. At fiscal year end, fixed rate commercial loans represented 55.6% of the commercial loan portfolio with a weighted average maturity of 2.3 13 Table of Contentsyears. The adjustable rate business loans typically reprice daily, monthly, quarterly, or annually, in accordance with the Wall Street prime rate of interest. The Bank typically includes an interest rate "floor" in the loan agreement.Commercial business loan terms vary according to the type and value of collateral, length of contract and creditworthiness of the borrower. Generally, commercial loans secured by fixed assets are amortized over periods up to five years, while commercial operating lines of credit or agricultural production lines are generally for a one year period. The Bank’s commercial business loans are evaluated based on the loan application, a determination of the applicant’s payment history on other debts, business stability and an assessment of ability to meet existing obligations and payments on the proposed loan. The Bank’s commercial business loans are evaluated based on the loan application, a determination of the applicant’s 14​​ Table of Contentspayment history on other debts, business stability and an assessment of ability to meet existing obligations and payments on the proposed loan. Although creditworthiness of the applicant is a primary consideration, the underwriting process also includes a comparison of the value of the collateral, if any, in relation to the proposed loan amount.Unlike residential mortgage loans, which generally are made on the basis of the borrower’s ability to make repayment from his or her employment and other income, and which are secured by real property whose value tends to be more easily ascertainable, commercial business loans are of higher risk and typically are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business. As a result, the availability of funds for the repayment of commercial business loans may be substantially dependent on the success of the business itself. Further, the collateral securing the loans may depreciate over time, may be difficult to appraise and may fluctuate in value based on the success of the business.Small Business Administration (SBA) Lending. The Bank’s commercial and construction business lending activity includes some loans guaranteed by the SBA. In fiscal 2024, $1. In fiscal 2023, $6. 4 million in originations was guaranteed by the SBA, and as of June 30, 2024, the Company held balances of $14.4 million in its portfolio representing the unguaranteed portion of SBA loans it had originated. The Company had sold and was servicing $49.8 million of the guaranteed portion of SBA loans as of June 30, 2024.Contractual Obligations and Commitments, Including Off-Balance Sheet Arrangements. The following table discloses our fixed and determinable contractual obligations and commercial commitments by payment date as of June 30, 2024. Commitments to extend credit totaled $898.6 million at June 30, 2024.0 million at June 30, 2023. ​​​Loan Maturity and RepricingThe following table sets forth certain information at June 30, 2024, regarding the dollar amount of loans maturing or repricing in the Bank’s portfolio based on their contractual terms to maturity or repricing, but does not include scheduled payments or potential prepayments. Demand loans, loans having no stated schedule of repayments and no stated maturity, and overdrafts are reported as due in one year or less. Mortgage loans that have adjustable rates are shown as maturing at their next repricing date. Listed loan balances are shown before deductions for undisbursed loan proceeds, unearned discounts, unearned income and allowance for credit losses.​14 Table of Contents ​​As of June 30, 2024, loans with a maturity date after June 30, 2025, with fixed interest rates totaled $2.​15​​ Table of Contents ​​As of June 30, 2023, loans with a maturity date after June 30, 2024, with fixed interest rates totaled $2. 4 billion, and loans with a maturity date after June 30, 2025, with adjustable rates totaled $288.4 million.1 million. Loan Originations, Sales and PurchasesGenerally, loans are originated by the Bank’s staff, who are salaried loan officers. All loan officers are eligible for bonuses based on production, market performance, and credit quality. Certain lenders, in particular those originating higher volume of residential loans for sale on the secondary market, may earn a relatively higher percentage of their total compensation through bonuses. Loans are originated both to be held for investment and to be sold into the secondary market. Loan applications are generally taken and processed at each of the Bank’s full-service locations and online for single-family residential loans.While the Bank originates both adjustable-rate and fixed-rate loans, the ability to originate loans is dependent upon the relative customer demand for loans in its market. In fiscal 2024, the Bank originated $917.3 million of loans, compared to $1.2 billion and $1.1 billion and $971. 1 billion, respectively, in fiscal 2023 and 2022.8 million, respectively, in fiscal 2022 and 2021. Of these loans, mortgage loan originations were $691.5 million, $1.1 million, $213. 0 billion, and $970.0 billion, $970. 1 million in fiscal 2024, 2023, and 2022, respectively.2 million in fiscal 2023, 2022, and 2021, respectively. Increases in originations over recent periods is attributed to increased lending activity, increased borrower refinancing, and an expanded market area and customer base following recent mergers.From time to time, the Bank has purchased loan participations consistent with its loan underwriting standards. During fiscal 2024, the Bank committed to purchase $29.8 million of new loan participations. At June 30, 2024, outstanding balances on loan participations purchased totaled $178.5 million, or 4.7% of net loans receivable. An additional $97. An additional $21. 7 million is available to be drawn on these purchased participation loans. At June 30, 2024, all of these participations were performing in accordance with their respective terms. The Bank evaluates additional loan participations on an ongoing basis, based in part on local loan demand, liquidity, portfolio and capital levels.​15 Table of ContentsThe following table shows total loans originated, purchased, sold and repaid during the periods indicated.​(1)Amount reported in fiscal 2023 includes the Company’s acquisition of loans from the Citizens merger recorded at a fair value of $447.4 million.1 million. (2)Amount reported in fiscal 2022 includes the Company’s acquisition of loans from the Fortune and Cairo mergers recorded at fair values of $202.(2)Amount reported in fiscal 2022 includes the Company’s acquisitions of loans from the Fortune and Cairo mergers recorded at a $202. 1 million and $408,000, respectively.1 million and $408,000 fair values, respectively. ​Loan CommitmentsThe Bank issues commitments for single- and multi-family residential mortgage loans, commercial real estate loans, operating or working capital lines of credit, and standby letters-of-credit. Such commitments may be oral or in writing with specified terms, conditions and at a specified rate of interest. The Bank had outstanding net loan commitments of approximately $898.6 million at June 30, 2024.0 million at June 30, 2023. See Note 12 of Notes to the Consolidated Financial Statements contained in Item 8.Loan FeesIn addition to interest earned on loans, the Bank receives income from fees in connection with loan originations, loan modifications, late payments and for miscellaneous services related to its loans. Income from these activities varies from period to period depending upon the volume and type of loans made and competitive conditions.Asset QualityDelinquent Loans. Generally, when a borrower fails to make a required payment, the Bank begins the collection process by mailing a computer generated notice to the customer. If the delinquency is not cured promptly, the customer is contacted again by notice or telephone. After an account secured by real estate becomes over 60 days past due, the Bank will typically send a demand notice to the customer which, if not cured within the time provided or unless satisfactory arrangements have been made, will lead to foreclosure. Foreclosure may not begin until the loan reaches 120 days delinquency in the case of consumer residential loans. Foreclosure may not begin until the loan reaches 17​​ Table of Contents120 days delinquency in the case of consumer residential loans. For consumer loans, the Missouri Right-To-Cure Statute 16 Table of Contentsis followed, which requires issuance of specifically worded notices at specific time intervals prior to repossession or further collection efforts. For consumer loans, the Missouri Right-To-Cure Statute is followed, which requires issuance of specifically worded notices at specific time intervals prior to repossession or further collection efforts. The following table sets forth the Bank’s loan delinquencies by type and by amount at June 30, 2024.​​Non-Performing Assets. The table below sets forth the amounts and categories of non-performing assets in the Bank’s loan portfolio. Loans are placed on non-accrual status when the collection of principal and/or interest becomes doubtful, and as a result, previously accrued interest income on the loan is removed from current income. The Bank has no reserves for uncollected interest and does not accrue interest on non-accrual loans. A loan may be transferred back to accrual status once a satisfactory repayment history has been restored. Foreclosed assets held for sale include assets acquired in settlement of loans and are shown net of reserves.The decrease in nonperforming assets in fiscal 2024 was attributed primarily to a decrease in nonaccrual loans.The increase in nonperforming assets in fiscal 2023 was attributed primarily to nonaccrual loans and other real estate owned acquired in the Citizens merger. For information regarding accrual of interest on loans, see Note 1 of Notes to the Consolidated Financial Statements contained in Item 8.For information regarding accrual of interest on loans, see Note 1 of Notes to the Consolidated Financial Statements contained in Item 8. The Company may treat purchased credit deteriorated loans as an accruing asset because these loans are recorded at acquisition at fair value, which includes an accretable discount recorded as interest income over the expected life of the obligation.​17 Table of ContentsThe following table sets forth information with respect to the Bank’s non-performing assets as of the dates indicated.​​​The Company adopted ASU 2022-02, “Financial Instruments – Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures,” effective July 1, 2023. The amendments in ASU 2022-02 eliminated the recognition and measurement of TDRs and enhanced disclosures for loan modifications to borrowers experiencing financial difficulty. At June 30, 2024, modifications totaled $25.5 million. During the year ended June 30, 2024, modifications made totaled $895,000, of which all were considered nonperforming and was included in the nonaccrual loan total above. The remaining $24.6 million in modifications have complied with the modified terms for a reasonable period of time and are therefore considered by the Company to be accrual status loans.8 million in TDRs have complied with the modified terms for a reasonable period of time and are therefore considered by the Company to be accrual status loans. At June 30, 2023, Troubled Debt Restructurings (“TDRs”) totaled $30.​​​At June 30, 2023, Troubled Debt Restructurings (“TDRs”) totaled $30. 5 million, of which $727,000 was considered nonperforming and was included in the nonaccrual loan total above. In general, these loans were subject to classification as TDRs at June 30, 2023, on the basis of guidance under ASU 2011-02 “Receivables: A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring”, which indicated that the Company may not consider the borrower’s effective borrowing rate on the old debt immediately before the restructuring in determining whether a concession has been granted. In general, these loans were subject to classification as TDRs at June 30, 2023 and 2022, on the basis of guidance under ASU 2011-02 “Receivables: A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring”, which indicates that the Company may not consider the borrower’s effective borrowing rate on the old debt immediately before the restructuring in determining whether a concession has been granted. Real Estate Owned. Real estate properties acquired through foreclosure or by deed in lieu of foreclosure are recorded at the lower of cost or fair value, less estimated disposition costs, which establishes a new cost basis. If fair value at the date of foreclosure is lower than the balance of the related loan, the difference will be charged-off to the allowance for credit losses at the time of transfer. Management periodically updates real estate valuations and if the value declines, a specific provision for losses on such property is established by a charge to noninterest expense. At June 30, 2024, the Company’s balance of real estate owned totaled $3.9 million, and included $74,000 in reseidntial properties and $3.8 million in non-residential properties.6 million, all in non-residential properties. 18 Table of ContentsAsset Classification. Applicable regulations require that each insured institution review and classify its assets on a regular basis. In addition, in connection with examinations of insured institutions, regulatory examiners have authority to identify problem assets and, if appropriate, require them to be classified. In addition, in connection with examinations of insured institutions, regulatory examiners have 19​​ Table of Contentsauthority to identify problem assets and, if appropriate, require them to be classified. There are three classifications for problem assets: substandard, doubtful and loss. Substandard assets must have one or more defined weaknesses and are characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected. Doubtful assets have the weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions and values questionable, and there is a high possibility of loss. An asset classified loss is considered uncollectible and of such little value that continuance as an asset of the institution is not warranted. When an insured institution classifies problem assets as loss, it charges off the balance of the assets. Assets which do not currently expose the Bank to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses, may be designated as special mention. The Bank’s determination as to the classification of its assets and the amount of its valuation allowances is subject to review by the FRB and the Missouri Division of Finance, which can order the establishment of additional loss allowances.On the basis of management’s review of the assets of the Company, at June 30, 2024, adversely classified assets totaled $44.7 million, or 0.96% of total assets as compared to $50.2%, of total assets, as compared to $170. 0 million, or 1.15% of total assets at June 30, 2023. Of the amount adversely classified as of June 30, 2024, $44.7 million was considered substandard, and none was considered doubtful. Included in adversely classified assets at June 30, 2024, were various loans totaling $40. Included in adversely classified assets at June 30, 2023, were various loans totaling $46. 9 million (see Note 3 of Notes to the Consolidated Financial Statements contained in Item 8 for more information on adversely classified loans) and foreclosed real estate and repossessed assets totaling $3.8 million. Adversely classified loans are so designated due to concerns regarding the borrower’s ability to generate sufficient cash flows to service the debt. Adversely classified loans totaling $5.5 million had been placed on nonaccrual status at June 30, 2024, of which $3.3 million were more than 30 days delinquent. Of the remaining $35.4 million of adversely classified loans, $99,000 were more than 30 days delinquent.7 million of adversely classified loans, $2. Other Loans of Concern. In addition to the adversely classified assets above, there were also other loans with respect to which management has concerns as to the ability of the borrowers to continue to comply with present loan terms, which may ultimately result in the adverse classification of such assets. These loans continued to perform according to contractual terms as of June 30, 2024, but were identified as having elevated risk due to concerns regarding the borrower’s ability to continue to generate sufficient cash flows to service the debt. At June 30, 2024, these other loans of concern totaled $48.2 million, as compared to $27.9 million at June 30, 2023. This increase was primarily from 14 loans, mostly secured by non-owner occupied commercial real estate collateral, which properties were experiencing decreases in cashflow.​Allowance for Credit Losses. ​Allowance for Credit Losses. The Bank’s allowance for credit losses is established through a provision for credit losses based on management’s expectation of lifetime credit losses on financial assets held at amortized cost. Management estimates the ACL using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Adjustments may be made to historical loss information for differences identified in current loan-specific risk characteristics, such as differences in underwriting standards or terms; lending review systems; experience, ability, or depth of lending management and staff; portfolio growth and mix; delinquency levels and trends; as well as for changes in environmental conditions, such as changes in economic activity or employment, agricultural economic conditions, property values, or other relevant factors. These provisions for credit losses are charged against earnings in the year they are established. The Bank had an allowance for credit losses at June 30, 2024, of $52.5 million, which represented 497% of nonperforming assets as compared to an allowance of $47.8 million, which represented 424% of nonperforming assets at June 30, 2023.2 million, which represented 526% of nonperforming assets at June 30, 2022. At June 30, 2024, the Bank also had an allowance for credit losses on off-balance sheet credit exposures of $3.3 million, as compared to $6.3 million at June 30, 2023. This amount is maintained as a separate liability account to cover estimated credit losses associated with off-balance sheet credit instruments such as off-balance sheet loan commitments, standby letters of credit, and guarantees. The decrease was attributable primarily to a decrease in unfunded commitments.Although management believes that it uses the best information available to determine the allowance, unforeseen market conditions could result in adjustments and net earnings could be significantly affected if 19 Table of Contentscircumstances differ substantially from assumptions used in making the final determination.20​​ Table of ContentsAlthough management believes that it uses the best information available to determine the allowance, unforeseen market conditions could result in adjustments and net earnings could be significantly affected if circumstances differ substantially from assumptions used in making the final determination. Future additions to the allowance will likely be the result of periodic loan, property and collateral reviews and thus cannot be predicted with certainty in advance.

Further discussion of the methodology used in establishing the allowance is provided in Note 1 and Note 3 of the Notes to the Consolidated Financial Statements contained in Item 8, and in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates – Allowance for Credit Losses” section of Item 7 of this Form 10-K. Further discussion of the methodology used in establishing the allowance is provided in Note 1 and Note 3 of the Notes to the Consolidated Financial Statements contained in Item 8, and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies – Allowance for Credit Losses” in section of Item 7 of this Form 10-K. ​20 Table of ContentsThe following table sets forth an analysis of the Bank’s allowance for credit losses for the periods indicated.​21​​ Table of ContentsThe following table sets forth an analysis of the Bank’s allowance for loan losses for the periods indicated. Where specific loan loss reserves have been established, any difference between the loss reserve and the amount of loss realized has been charged or credited to current income. ​21 Table of ContentsThe following table sets forth the breakdown of the allowance for credit losses by loan category for the periods indicated. ​22​​ Table of ContentsThe following table sets forth the breakdown of the allowance for loan losses by loan category for the periods indicated.

​For additional information regarding our allowance for credit losses, see Note 3 “Loans and Allowance for Credit Losses” of the Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K.​​For additional information regarding our allowance for loan losses, see Note 3 “Loans and Allowance for Credit Losses” of the Notes to Consolidated Financial Statements contained in Item 8 of this Form 10-K. Investment ActivitiesGeneral. Under Missouri law, the Bank is permitted to invest in various types of liquid assets, including U.S. Government and State of Missouri obligations, securities of various federal agencies, certain certificates of deposit of insured banks and savings institutions, banker’s acceptances, repurchase agreements, federal funds, commercial paper, investment grade corporate debt securities and obligations of States and their political sub-divisions. Generally, the investment policy of the Company is to invest funds among various categories of investments and repricing characteristics based upon the Bank’s need for liquidity, to provide collateral for borrowings and public unit deposits, to help reach financial performance targets and to help maintain asset/liability management objectives.The Company’s investment portfolio is managed in accordance with the Bank’s investment policy which was adopted by the Board of Directors of the Bank and is implemented by members of the asset/liability management committee which consists of the Chairman of the Board, the President/Chief Administrative Officer, the Chief Financial Officer, the Chief Operations Officer, the Chief Lending Officer, and four outside directors. Investment purchases and/or sales must be authorized by the asset/liability management committee or an authorized executive officer, depending on the aggregate size of the investment transaction, prior to any investment transaction. The Board of Directors of the Bank reviews all investment transactions. All investment purchases are identified as available-for-sale ("AFS") at the time of purchase. The Company has not classified any investment securities as held-to-maturity over the last five years. Securities classified as AFS must be reported at fair value with unrealized gains and losses, net of tax, recorded as a separate component of stockholders’ equity. At June 30, 2024, AFS securities totaled $427.9 million (not including FHLB and Federal Reserve Bank membership stock, or other equity securities without readily-determinable fair values). For information regarding the amortized cost and market values of the Company’s investments, see Note 2 of Notes to the Consolidated Financial Statements contained in Item 8.During fiscal 2024, the Company entered into derivative financial instruments, primarily interest rate swaps, to convert certain long term fixed rate loans to floating rates to manage interest rate risk, facilitate asset/liability management strategies and manage other exposures. As of June 30, 2024, the Company had executed two interest rate swaps, designated as fair value hedges, with original notional amounts of $20.0 million each, for a total of $40.0 million.22 Table of ContentsDebt and Other Securities. At June 30, 2024, the Company’s debt and other securities portfolio totaled $123.0 million, or 2.7% of total assets as compared to $147.2%, of total assets, as compared to $170. 3 million, or 3.4% of total assets at June 30, 2023. During fiscal 2024, the Bank had $3. During fiscal 2023, the Bank had $3. 6 million in maturities, $16.3 million in maturities and $87. 6 million in sales, and $9.3 million in maturities and $87. 0 million in purchases of these securities. Of the securities that matured, $800,000 was called for early redemption. Of the securities that matured, $2. At June 30, 2024, the investment securities portfolio included $27.8 million in municipal bonds, and $31.6 million in municipal bonds, of which $38. 3 million in corporate obligations.7 million of new loan participations. Municipal bonds and corporate obligations totaling $56.3 million are subject to early redemption at the option of the issuer.8 million is subject to early redemption at the option of the issuer, and $32. The investment portfolio also included $58.7 million of asset-backed securities at June 30, 2024, all of which are subject to early redemption.6 million of asset backed securities at June 30, 2023, all of which are subject to early redemption. The remaining portfolio consists of $5.3 million in other securities, primarily SBA pools. Based on projected maturities, the weighted average life of the debt and other securities portfolio at June 30, 2024, was 51 months. Membership stock held in the FHLB of Des Moines, totaling $8.7 million, and in the Federal Reserve Bank of St. Louis, totaling $9.1 million, along with equity stock of $929,000 in various correspondent (bankers’) banks, was not included in the above totals.Mortgage-Backed Securities. At June 30, 2024, mortgage-backed securities (“MBS”) totaled $304.9 million, or 6.6%, of total assets, as compared to $270.3 million, or 6.2%, of total assets at June 30, 2023. During fiscal 2024, the Bank had maturities and prepayments of $38.8 million, $15.6 million in sales, and $70.3 million in maturities and $87. 8 million in purchases of MBS. At June 30, 2024, the MBS portfolio included $104.8 million in fixed-rate residential MBS issued by government-sponsored enterprises (GSEs), $59.7 million in fixed-rate commercial MBS issued by GSEs, and $140.4 million in fixed rate collateralized mortgage obligations (“CMOs”) issued by GSEs generally consisting of underlying residential property loans, all of which passed the Federal Financial Institutions Examination Council’s sensitivity test. Based on projected prepayment rates, the weighted average life of the fixed rate MBS and CMOs at June 30, 2024, was 61 months. Based on projected prepayment rates, the weighted average life of the MBS and CMOs at June 30, 2023, was 68 months. Actual prepayment rates experienced, which often vary due to changes in market interest rates, may cause the anticipated average life of MBS portfolio to extend or shorten as compared to prepayment rates anticipated. Investment Securities AnalysisThe following table sets forth the Company’s debt and other securities portfolio, at carrying value, and membership stock, at cost, at the dates indicated.23 Table of ContentsAt June 30, 2024, the Company did not have any debt securities that were not carried at fair value.​The following table sets forth the maturities and weighted average yields of AFS debt securities in the Company’s investment securities portfolio and membership stock at June 30, 2024. ​​The following table sets forth certain information at June 30, 2024 regarding the dollar amount of MBS and CMOs at amortized cost due, based on their contractual terms to maturity, but does not include scheduled payments or potential prepayments. MBS and CMOs that have adjustable rates are shown at amortized cost as maturing at their next repricing date.​​24 Table of ContentsThe following table sets forth the dollar amount of all MBS and CMOs at amortized cost due, based on their contractual terms to maturity, one year after June 30, 2024, which have fixed, floating, or adjustable interest rates.​​The following table sets forth the dollar amount of all MBS and CMOs at amortized cost due, based on their contractual terms to maturity, one year after June 30, 2023, which have fixed, floating, or adjustable interest rates. ​​The following table sets forth certain information with respect to each MBS and CMO security at the dates indicated.​​Deposit Activities and Other Sources of FundsGeneral. The Company’s primary sources of funds are deposits, borrowings, payments of principal and interest on loans, MBS and CMOs, interest and principal received on investment securities and other short-term investments, and funds provided from operating results. Loan repayments are a relatively stable source of funds, while deposit inflows and outflows and loan prepayments are significantly influenced by general market interest rates and overall economic conditions.Borrowings, including FHLB advances, have been used at times to provide additional liquidity. Borrowings are used on an overnight or short-term basis to compensate for periodic fluctuations in cash flows, and are used on a longer term basis to fund loan growth and to help manage the Company’s sensitivity to fluctuating interest rates.Deposits. The Bank’s depositors are generally residents and entities located in the States of Missouri, Arkansas, or Illinois. Deposits are attracted from within the Bank’s market area through the offering of a broad selection of deposit instruments, including interest-bearing and noninterest-bearing transaction accounts, money market deposit accounts, saving accounts, certificates of deposit and retirement savings plans. At times, the Company will utilize brokered deposits in lieu of borrowings, subject to market pricing and availability. For larger depositors, such as public units, the Company often utilizes a reciprocal deposit program to provide additional FDIC coverage to our customer through other financial institutions while conveniently allowing management of the deposit relationship through our institution. For larger depositors, such as public units, the Company often utilizes a reciprocal deposit program to provide additional FDIC coverage to our customer through other 26​​ Table of Contentsfinancial institutions while conveniently allowing management of the deposit relationship through our institution. Deposit account terms vary according to the minimum balance required, the time periods the funds may remain on deposit and the interest rate, among other factors. In determining the terms of its deposit accounts, the Bank considers current market interest rates, profitability to the Bank, managing interest rate sensitivity and its customer preferences and concerns. The Bank’s Asset/Liability Committee regularly reviews its deposit mix and pricing.The Bank will periodically promote a particular deposit product as part of its overall marketing plan. Deposit products have been promoted through various mediums, which include digital and social media, television, radio and newspaper advertisements, as well as “grassroots” marketing techniques, such as sponsorship of – or activity at – community events. The emphasis of these campaigns is to increase consumer a