{"url_path":"/sec/smbc/10-k/2026/item-7","section_key":"item-7","section_title":"Item 7 ​ ​Management’s Discussion and Analysis of Financial Condition and Results of Operations","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-09-11","source_url":"https://www.sec.gov/Archives/edgar/data/916907/0001104659-26-107119-index.html","accession_number":"0001104659-26-107119","cik":"0000916907","ticker":"SMBC","issuer_name":"SOUTHERN MISSOURI BANCORP, INC.","edgar_url":"https://www.sec.gov/Archives/edgar/data/916907/0001104659-26-107119-index.html","primary_entity_key":"0000916907","primary_entity_name":"SOUTHERN MISSOURI BANCORP, INC."},"word_count":10315,"has_tables":true,"body_markdown":"Item 7.​ ​Management’s Discussion and Analysis of Financial Condition and Results of Operations\n\nThis discussion and analysis reviews our consolidated financial statements and other relevant statistical data and is intended to enhance your understanding of our financial condition and results of operations. The information in this section has been derived from the Consolidated Financial Statements and notes thereto, which are included in Item 8 of this Form 10-K. You should read the information in this section in conjunction with the business and financial information regarding us as provided in this Form 10-K.\n\n**SELECTED CONSOLIDATED FINANCIAL INFORMATION**\n\n​\n\nThe following tables set forth selected consolidated financial information and other financial data of the Company. The summary statement of financial condition information and statement of income information are derived from our consolidated financial statements, which have been audited by Forvis Mazars, LLP. See Item 8. “Financial Statements and Supplementary Data.” Results for past periods are not necessarily indicative of results that may be expected for any future period.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n*(Dollars in thousands)*\n\n​\n\nAt June 30, \n\n**Financial Condition Data:**\n\n  ​ ​ ​\n\n**2026**\n\n**  ​ ​ ​**\n\n2025\n\n**  ​ ​ ​**\n\n2024\n\n**  ​ ​ ​**\n\n2023\n\n**  ​ ​ ​**\n\n2022\n\nTotal assets\n\n​\n\n$\n\n5,236,381\n\n​\n\n$\n\n5,019,607\n\n​\n\n$\n\n4,604,316\n\n​\n\n$\n\n4,360,211\n\n​\n\n$\n\n3,214,782\n\nLoans receivable, net\n\n​\n\n \n\n4,336,896\n\n​\n\n \n\n4,048,961\n\n​\n\n \n\n3,797,287\n\n​\n\n \n\n3,571,078\n\n​\n\n \n\n2,686,198\n\nMortgage-backed securities\n\n​\n\n \n\n354,058\n\n​\n\n \n\n359,494\n\n​\n\n \n\n304,861\n\n​\n\n \n\n270,252\n\n​\n\n \n\n170,585\n\nCash, interest-bearing time deposits and debt securities\n\n​\n\n \n\n187,683\n\n​\n\n \n\n294,455\n\n​\n\n \n\n184,437\n\n​\n\n \n\n202,523\n\n​\n\n \n\n156,369\n\nDeposits\n\n​\n\n \n\n4,407,846\n\n​\n\n \n\n4,281,368\n\n​\n\n \n\n3,943,059\n\n​\n\n \n\n3,725,540\n\n​\n\n \n\n2,815,075\n\nSecurities sold under agreement to repurchase\n\n​\n\n​\n\n20,000\n\n​\n\n​\n\n15,000\n\n​\n\n​\n\n9,398\n\n​\n\n​\n\n—\n\n​\n\n​\n\n—\n\nBorrowings\n\n​\n\n \n\n130,424\n\n​\n\n \n\n104,052\n\n​\n\n \n\n102,050\n\n​\n\n \n\n133,514\n\n​\n\n \n\n37,957\n\nSubordinated debt\n\n​\n\n \n\n15,766\n\n​\n\n \n\n23,208\n\n​\n\n \n\n23,156\n\n​\n\n \n\n23,105\n\n​\n\n \n\n23,055\n\nStockholder's equity\n\n​\n\n \n\n590,678\n\n​\n\n \n\n544,692\n\n​\n\n \n\n488,748\n\n​\n\n \n\n446,058\n\n​\n\n \n\n320,772\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n*(Dollars in thousands, except per share data)*\n\n​\n\nFor the Year Ended June 30, \n\n**Operating Data:**\n\n  ​ ​ ​\n\n**2026**\n\n**  ​ ​ ​**\n\n2025\n\n**  ​ ​ ​**\n\n2024\n\n**  ​ ​ ​**\n\n2023\n\n**  ​ ​ ​**\n\n2022\n\nInterest income\n\n​\n\n$\n\n288,986\n\n​\n\n$\n\n277,365\n\n​\n\n$\n\n248,375\n\n​\n\n$\n\n176,416\n\n​\n\n$\n\n116,867\n\nInterest expense\n\n​\n\n \n\n116,137\n\n​\n\n \n\n122,749\n\n​\n\n \n\n108,892\n\n​\n\n \n\n49,671\n\n​\n\n \n\n13,300\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nNet interest income\n\n​\n\n \n\n172,849\n\n​\n\n \n\n154,616\n\n​\n\n \n\n139,483\n\n​\n\n \n\n126,745\n\n​\n\n \n\n103,567\n\nProvision (benefit) for credit losses\n\n​\n\n \n\n11,454\n\n​\n\n \n\n6,523\n\n​\n\n \n\n3,600\n\n​\n\n \n\n17,061\n\n​\n\n \n\n1,487\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nNet interest income after provision (benefit) for credit losses\n\n​\n\n \n\n161,395\n\n​\n\n \n\n148,093\n\n​\n\n \n\n135,883\n\n​\n\n \n\n109,684\n\n​\n\n \n\n102,080\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nNoninterest income\n\n​\n\n \n\n27,797\n\n​\n\n \n\n27,984\n\n​\n\n \n\n24,844\n\n​\n\n \n\n26,204\n\n​\n\n \n\n21,203\n\nNoninterest expense\n\n​\n\n \n\n102,088\n\n​\n\n \n\n102,083\n\n​\n\n \n\n97,617\n\n​\n\n \n\n86,425\n\n​\n\n \n\n63,379\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nIncome before income taxes\n\n​\n\n \n\n87,104\n\n​\n\n \n\n73,994\n\n​\n\n \n\n63,110\n\n​\n\n \n\n49,463\n\n​\n\n \n\n59,904\n\nIncome taxes\n\n​\n\n \n\n15,265\n\n​\n\n \n\n15,416\n\n​\n\n \n\n12,928\n\n​\n\n \n\n10,226\n\n​\n\n \n\n12,735\n\nNet Income\n\n​\n\n$\n\n71,839\n\n​\n\n$\n\n58,578\n\n​\n\n$\n\n50,182\n\n​\n\n$\n\n39,237\n\n​\n\n$\n\n47,169\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nBasic earnings per share available to common stockholders\n\n​\n\n$\n\n6.44\n\n​\n\n$\n\n5.19\n\n​\n\n$\n\n4.42\n\n​\n\n$\n\n3.86\n\n​\n\n$\n\n5.22\n\nDiluted earnings per share available to common stockholders\n\n​\n\n$\n\n6.43\n\n​\n\n$\n\n5.18\n\n​\n\n$\n\n4.42\n\n​\n\n$\n\n3.85\n\n​\n\n$\n\n5.21\n\nDividends per share\n\n​\n\n$\n\n1.00\n\n​\n\n$\n\n0.92\n\n​\n\n$\n\n0.84\n\n​\n\n$\n\n0.84\n\n​\n\n$\n\n0.80\n\n​\n\n59\n\n[Table of Contents](#TOC)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAt June 30, \n\n**Other Data:**\n\n  ​ ​ ​\n\n**2026**\n\n**  ​ ​ ​**\n\n2025\n\n**  ​ ​ ​**\n\n2024\n\n**  ​ ​ ​**\n\n2023\n\n**  ​ ​ ​**\n\n2022\n\nNumber of:\n\n \n\n  ​\n\n \n\n  ​\n\n \n\n  ​\n\n \n\n  ​\n\n \n\n  ​\n\nReal Estate Loans\n\n \n\n10,655\n\n \n\n10,272\n\n \n\n10,073\n\n \n\n9,707\n\n \n\n9,190\n\nDeposit Accounts\n\n \n\n158,725\n\n \n\n156,155\n\n \n\n151,374\n\n \n\n144,219\n\n \n\n107,038\n\nFull service offices\n\n \n\n64\n\n \n\n63\n\n \n\n63\n\n \n\n63\n\n \n\n49\n\nLimited service offices\n\n \n\n2\n\n \n\n2\n\n \n\n3\n\n \n\n3\n\n \n\n2\n\nLoan production offices\n\n​\n\n3\n\n​\n\n2\n\n​\n\n2\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n**  ​ ​ ​**\n\nAt or for the year ended June 30, \n\n \n\n**Key Operating Ratios:**\n\n**  ​ ​ ​**\n\n**2026**\n\n**  ​ ​ ​**\n\n2025\n\n**  ​ ​ ​**\n\n2024\n\n**  ​ ​ ​**\n\n2023\n\n**  ​ ​ ​**\n\n2022\n\n \n\nReturn on assets (net income divided by average assets)\n\n​\n\n1.41\n\n%  \n\n1.21\n\n%  \n\n1.10\n\n%  \n\n1.03\n\n%  \n\n1.59\n\n%\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nReturn on average common equity (net income available to common stockholders divided by average common equity)\n\n​\n\n12.66\n\n \n\n11.37\n\n \n\n10.74\n\n \n\n10.39\n\n \n\n15.44\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAverage equity to average assets\n\n​\n\n11.12\n\n \n\n10.63\n\n \n\n10.25\n\n \n\n9.91\n\n \n\n10.30\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nInterest rate spread (spread between weighted average rate on all interest-earning assets and all interest-bearing liabilities)\n\n​\n\n3.10\n\n \n\n2.84\n\n \n\n2.71\n\n \n\n3.21\n\n \n\n3.61\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nNet interest margin (net interest income as a percentage of average interest-earning assets\n\n​\n\n3.62\n\n \n\n3.40\n\n \n\n3.27\n\n \n\n3.54\n\n \n\n3.72\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nNoninterest expense to average assets\n\n​\n\n2.00\n\n \n\n2.11\n\n \n\n2.14\n\n \n\n2.27\n\n \n\n2.14\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAverage interest-earning assets to average interest-bearing liabilities\n\n​\n\n121.39\n\n \n\n120.71\n\n \n\n121.96\n\n \n\n123.57\n\n \n\n124.20\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAllowance for credit losses to gross loans(1)\n\n​\n\n1.25\n\n \n\n1.26\n\n \n\n1.36\n\n \n\n1.32\n\n \n\n1.22\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nAllowance for credit losses to nonperforming loans(1)\n\n​\n\n198.56\n\n \n\n224.08\n\n \n\n786.17\n\n \n\n624.93\n\n \n\n806.02\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nNet charge-offs (recoveries) to average outstanding loans during the period\n\n​\n\n0.18\n\n \n\n0.17\n\n \n\n0.05\n\n \n\n0.02\n\n \n\n0.00\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nRatio of nonperforming assets to total assets(1)\n\n​\n\n0.64\n\n \n\n0.47\n\n \n\n0.23\n\n \n\n0.26\n\n \n\n0.20\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nDividend payout ratio\n\n​\n\n15.50\n\n \n\n17.72\n\n \n\n18.98\n\n \n\n22.00\n\n \n\n15.25\n\n​\n\n(1)Total loans before ACL and deferred loan fees at end of period.\n\n60\n\n[Table of Contents](#TOC)\n\nOVERVIEW\n\nSouthern Missouri Bancorp, Inc., is a Missouri corporation originally organized for the principal purpose of becoming the holding company of Southern Bank. The principal business of Southern Bank consists of attracting deposits from the communities it serves and investing those funds in loans secured by residential and commercial real estate, as well as commercial business and consumer loans. These funds have also been used to purchase municipal, corporate, and asset-backed investment securities, residential and commercial mortgage-backed securities (MBS) and collateralized mortgage obligations (CMOs), U.S. government and federal agency obligations and other permissible securities.\n\nSouthern Bank’s results of operations are primarily dependent on the levels of its net interest margin and noninterest income, and its ability to control operating expenses and net charge-offs. Net interest margin is dependent primarily on the difference or spread between the average yield earned on interest-earning assets (including loans, mortgage-related securities, and investments) and the average rate paid on interest-bearing liabilities (including deposits, securities sold under agreements to repurchase, and borrowings), as well as the relative amounts of these assets and liabilities. Southern Bank is subject to interest rate risk to the degree that its interest-earning assets mature or reprice at different times, or on a varying basis, from its interest-bearing liabilities.\n\nSouthern Bank’s noninterest income consists primarily of fees charged on transaction and loan accounts, interchange income from customer debit and ATM card use, gains on sales of loans, trust and wealth management services, insurance brokerage commissions, and increased cash surrender value of bank owned life insurance (BOLI). Southern Bank’s operating expenses include: employee compensation and benefits, occupancy and data processing expenses, legal and professional fees, federal deposit insurance premiums, amortization of intangible assets, and other general and administrative expenses.\n\nSouthern Bank’s operations are significantly influenced by general economic conditions, including monetary and fiscal policies of the U.S. government and the Federal Reserve Board. Additionally, Southern Bank is subject to policies and regulations issued by financial institution regulatory agencies, including the Federal Reserve, the Missouri Division of Finance, and the Federal Deposit Insurance Corporation. Each of these factors may influence interest rates, loan demand, prepayment rates and deposit flows. Interest rates available on competing investments as well as general market interest rates influence the Bank’s cost of funds. Lending activities are affected by the demand for real estate and other types of loans, which in turn is affected by the interest rates at which such financing may be offered. Lending activities are funded through the attraction of deposit accounts consisting of checking accounts, passbook and statement savings accounts, money market deposit accounts, certificate of deposit accounts with terms of 60 months or less, securities sold under agreements to repurchase, advances from the Federal Home Loan Bank of Des Moines, and brokered deposits. The Bank intends to continue to focus on its lending programs for one- to four-family and multi-family residential real estate, commercial real estate, commercial business, and consumer financing on loans secured by properties or collateral located in its primary lending area or to borrowers who operate within that area.\n\nCRITICAL ACCOUNTING POLICIES AND ESTIMATES\n\nCritical accounting estimates are those estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant, and provide qualitative and quantitative information necessary to understand the estimation uncertainty and the impact the critical accounting estimate has had or is reasonably likely to have on financial condition or results of operations to the extent the information is material and reasonably available. This information should include why each critical accounting estimate is subject to uncertainty and, to the extent the information is material and reasonably available, how much each estimate and/or assumption has changed over a relevant period, and sensitivity of the reported amount to the methods, assumptions and estimates underlying its calculation.\n\nThe Company has established various accounting policies, which govern the application of accounting principles generally accepted in the United States of America in the preparation of our financial statements. Our significant accounting policies are described in Item 8 of this Form 10-K under the Notes to the Consolidated Financial\n\n61\n\n[Table of Contents](#TOC)\n\nStatements. Certain accounting policies involve significant judgments and assumptions by management that have a material impact on the carrying value of certain assets and liabilities; management considers such accounting policies to be critical accounting policies. The judgments and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ from these judgments and estimates that could have a material impact on the carrying values of assets and liabilities and the results of operations of the Company.\n\nAllowance for Credit Losses. The Company's ACL is its estimate of credit losses expected in the loan portfolio, on unfunded lending commitments, and held-to maturity securities over the expected life of those assets or in securities available-for-sale when credit loss is identified, which is limited to the difference in fair value and cost. While these estimates are based on substantive methods for determining the required allowance, actual outcomes may differ significantly from estimated results, especially when determining required allowances for larger, complex commercial credits or unfunded lending commitments to commercial borrowers. Consumer loans, including single family residential real estate, are individually smaller and generally behave in a similar manner, and loss estimates for these credits are considered more predictable. Additionally, the Company estimates the ACL as a calculation of expected lifetime credit losses utilizing a forward-looking forecast of macroeconomic conditions, which may differ significantly from actual results. Further discussion of the methodology used in establishing the allowance is provided in Note 1 and Note 3 to the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K, and in the “Financial Condition – Loans” and “Allowance for Credit Losses” sections of this Item 7.\n\n**FINANCIAL CONDITION**\n\n*General.*The Company experienced balance sheet growth in fiscal 2026, with total assets of $5.2 billion at June 30, 2026, reflecting an increase of $216.8 million, or 4.3%, as compared to June 30, 2025. Growth primarily reflected increases in net loans receivable and investments in tax credits in the other assets category, partially offset by decreases in cash equivalents and time deposits and available-for-sale (AFS) securities.\n\n*Cash equivalents and time deposits.* Cash equivalents and time deposits were $91.0 million at June 30, 2026, a decrease of $102.1 million, or 52.9%, as compared to June 30, 2025. The decrease was primarily utilized to fund loan generation that outpaced deposit growth during the period, which was partially offset by earnings retained after the payment of cash dividends.\n\n*Investments.* AFS securities were $450.8 million at June 30, 2026, down $10.1 million, or 2.2%, as compared to June 30, 2025.\n\n*Loans.* Loans, net of the ACL, were $4.3 billion at June 30, 2026, an increase of $287.9 million, or 7.1%, as compared to June 30, 2025. Gross loan balances increased by $291.2 million, or 7.1%, while the ACL attributable to outstanding loan balances increased $3.3 million, or 6.4%, as compared to June 30, 2025. See “Allowance for Credit Losses” below.\n\nThe Company noted growth primarily in 1-4 family residential real estate, agriculture real estate, multi-family real estate, commercial and industrial, non-owner occupied commercial real estate, owner occupied commercial real estate, and agriculture production loan balances. These increases were partially offset by decreases in construction and land development, and consumer loan balances.\n\nNonperforming loans (NPLs) were $27.7 million, or 0.63% of gross loans, at June 30, 2026, as compared to $23.0 million, or 0.56% of gross loans, at June 30, 2025. The year-over-year increase in nonaccrual loans was primarily attributable to three borrower relationships: one commercial relationship with a total loan balance of $6.5 million consisting of multiple related loans collateralized by commercial real estate and equipment; a second consisting of two related agricultural production loans totaling $2.2 million secured by crops and equipment; and the third, which was added during the quarter ended June 30, 2026, consisting of several related agricultural production loans totaling $5.9 million secured by crop insurance claims, restricted cash, crops, and equipment. Nonperforming assets (NPAs) were $33.5 million, or 0.64% of total assets, at June 30, 2026, as compared to $23.7 million, or 0.47% of total assets, at June 30, 2025.\n\n62\n\n[Table of Contents](#TOC)\n\n*Allowance for Credit Losses.* The ACL at June 30, 2026, totaled $54.9 million, representing 1.25% of gross loans and 199% of nonperforming loans, as compared to an ACL of $51.6 million, representing 1.26% of gross loans and 224% of nonperforming loans, at June 30, 2025. The Company has estimated its expected credit losses as of June 30, 2026, under ASC 326-20, and management believes the ACL as of that date was adequate based on that estimate. Economic uncertainty continues, including the potential effects of elevated and uncertain interest rates, as inflation remains above the Federal Reserve's long-term target, and evolving labor market and broader economic conditions. The increase in the ACL was primarily attributable to higher reserves required for pooled loans, driven largely by loan growth and the Bank’s annual ACL model update, which reflected an increase in modeled loss drivers compared to the prior assessment as of June 30, 2025, and increased reserves on agriculture loans reflecting ongoing pressure in the agricultural sector. This was partially offset by net charge-offs. In the fiscal year ended June 30, 2026, net charge offs were $10.3 million due primarily to a $2.6 million partial charge-off of the agricultural production loan relationship which was placed on nonaccrual status during the fiscal year, a previously identified nonperforming commercial loan relationship that was transferred to OREO following foreclosure resulting in a charge-off of $1.2 million, and a $1.3 million net charge-off for a special purpose CRE relationship that was reserved for in the prior fiscal year. For fiscal year 2026, net charge-offs as a percentage of average loans were 0.18%, as compared to 0.17% for fiscal year 2025. See also, “Provision for Credit Losses, under Comparison of Operating Results for the Years Ended June 30, 2026 and 2025” and Note 1 and Note 3 of the Notes to Consolidated Financial Statements, “Critical Accounting Policies”, and “Asset Quality” in Item 1 of this Form 10-K.\n\nThe Company regularly reviews its ACL and makes adjustments to its balance based on management’s estimate of (1) the total expected losses included in the Company’s financial assets held at amortized cost, which is limited to the Company’s loan portfolio, and (2) any credit deterioration in the Company’s available-for-sale securities as of the balance sheet date. The Company holds no securities classified as held-to-maturity. Although the Company maintains its ACL at a level that it considers sufficient to provide for losses, there can be no assurance that future losses will not exceed internal estimates. In addition, the amount of the ACL is subject to review by regulatory agencies, which can order the Company to record additional allowances. The required ACL has been estimated based upon the guidelines in ASC Topic 326, Financial Instruments – Credit Losses. For a summary of changes in the ACL during the current and prior fiscal years, and a breakdown of the ACL by loan category as of the current and prior fiscal year end, see Description of Business – Asset Quality, Allowance for Credit Losses, contained within Item 1 of this Form 10-K.\n\nThe estimate involves consideration of quantitative and qualitative factors relevant to the loans as segmented by the Company, and is based on an evaluation, at the reporting date, of historical loss experience and peer data, coupled with qualitative adjustments to address current economic conditions and credit quality, and reasonable and supportable forecasts. Specific qualitative factors considered include, but may not be limited to:\n\n●Changes in lending policies and/or loan review system\n\n●National, regional, and local economic trends and/or conditions\n\n●Changes and/or trends in the nature, volume, or terms of the loan portfolio\n\n●Experience, ability, and depth of lending management and staff\n\n●Levels and/or trends of delinquent, non-accrual, problem assets, or charge-offs and recoveries\n\n●Concentrations of credit\n\n●Changes in collateral values\n\n●Agricultural economic conditions\n\n●Risks from regulatory, legal, or competitive factors\n\n●Quantified supported model adjustments and general imprecision adjustments\n\n​\n\n​\n\n*Premises and Equipment.*Premises and equipment totaled $93.2 million at June 30, 2026, down $2.8 million as compared to $96.0 million at June 30, 2025. An increase in depreciation was partially offset by purchases of premises, furniture, fixtures, equipment, and land.\n\n*BOLI.*The Bank has purchased “key person” life insurance policies (BOLI) on employees at various times since fiscal 2003, and has acquired additional BOLI in connection with certain mergers. At June 30, 2026, the cash surrender value of all such policies was $77.1 million, up $1.4 million, or 1.9%, as compared to June 30, 2025.\n\n63\n\n[Table of Contents](#TOC)\n\n*Intangible Assets.* The July 2009 acquisition of the Southern Bank of Commerce resulted in goodwill of $126,000. The October 2013 acquisition of Ozarks Legacy Community Financial, Inc., resulted in goodwill of $1.5 million. The August 2014 acquisition of Peoples Service Company, Inc., and its subsidiary, Peoples Bank of the Ozarks (the “Peoples Acquisition”) resulted in goodwill of $3.0 million. The June 2017 acquisition of Tammcorp, Inc., and its subsidiary, Capaha Bank (the “Capaha Acquisition”) resulted in goodwill of $4.1 million and a $3.4 million core deposit intangible which was amortized over a seven-year period using the straight-line method. The February 2018 acquisition of SMB-Marshfield resulted in goodwill of $4.4 million and a $1.3 million core deposit intangible which was amortized over a seven-year period using the straight-line method. The November 2019 Gideon acquisition resulted in goodwill of $1.0 million and a $4.1 million core deposit intangible which was amortized over a seven-year period using the straight-line method. The May 2020 Central Federal Acquisition resulted in a bargain purchase gain of $123,000 and a $540,000 core deposit intangible which was amortized over a six-year period using the straight-line method. The December 2021 Cairo acquisition resulted in goodwill of $442,000 and a $168,000 core deposit intangible which is being amortized over a seven-year period using the straight-line method. The February 2022 Fortune acquisition resulted in goodwill of $12.8 million and a $1.6 million core deposit intangible which is being amortized over a seven-year period using the straight-line method. The January 2023 Citizens merger resulted in goodwill of $23.5 million, as well as a $22.1 million core deposit intangible which is being amortized over a ten-year period using the straight-line method, and a $2.6 million intangible related to the acquired trust and wealth management business line which is being amortized over a ten-year period using the straight-line method. Goodwill from these acquisitions is not being amortized, but is tested for impairment at least annually. Mortgage and SBA servicing rights totaling $2.8 million are also included in intangible assets.\n\n*Prepaid expenses and other assets*. Prepaid expenses and other assets totaled $68.1 million at June 30, 2026, an increase of $41.7 million as compared to June 30, 2025. The increase was due primarily to higher low-income housing tax credit equity investments (LIHTCs). The Company records LIHTCs in prepaid expenses and other assets in the consolidated balance sheets and totaled $34.3 million as of June 30, 2026, as compared to $196,000 at June 30, 2025. For all legally binding unfunded equity commitments, the Company increases its recorded investment and recognizes a liability. As of June 30, 2026, the Company had liabilities of $29.4 million and none at June 30, 2025, related to these investments that are included in accounts payable and other liabilities in the consolidated balance sheets.\n\n*Deposits.*Deposits were $4.4 billion at June 30, 2026, an increase of $126.5 million, or 3.0%, as compared to June 30, 2025. Certificate of deposit growth was relatively balanced between brokered and non-brokered deposits. Nonmaturity deposit growth was primarily attributable to increases in non-interest bearing deposits, savings accounts, and brokered money market deposit accounts, partially offset by declines in NOW accounts and non-brokered money market deposit accounts.\n\nPublic unit balances totaled $517.8 million at June 30, 2026, a decrease of $33.0 million compared to June 30, 2025, primarily due to competitive pricing dynamics on certain time deposits and normal fluctuations in operating account balances. Brokered deposits totaled $290.6 million at June 30, 2026, an increase of $55.6 million as compared to June 30, 2025, primarily attributable to brokered certificates of deposit. The average loan-to-deposit ratio for the fourth quarter of fiscal 2026 was 99.7%, as compared to 94.5% for the same period of the prior fiscal year.\n\n*Borrowings.*FHLB advances were $130.4 million at June 30, 2026, an increase of $26.4 million, or 25.3%, as compared to June 30, 2025. Outstanding FHLB daily reset borrowings were $28.4 million as of June 30, 2026, as compared to none outstanding as of June 30, 2025.\n\n*Subordinated Debt.*In March 2004, $7.0 million of Floating Rate Capital Securities of Southern Missouri Statutory Trust I, with a liquidation value of $1,000 per share were issued. The securities bear interest at a floating rate based on SOFR, are now redeemable at par, and mature in 2034. In connection with its October 2013 acquisition of Ozarks Legacy, the Company assumed $3.1 million in floating rate junior subordinated debt securities. The debt securities had been issued in June 2005 by Ozarks Legacy in connection with the sale of trust preferred securities, bear interest at a floating rate based on SOFR, are redeemable at par, and mature in 2035. The carrying value of these debt securities was approximately $2.8 million at June 30, 2026 and at June 30, 2025. In connection with the Peoples Acquisition, the Company assumed $6.5 million in floating rate junior subordinated debt securities. The debt securities had been issued in 2005 by Peoples, in connection with the sale of trust preferred securities, bear interest at a floating\n\n64\n\n[Table of Contents](#TOC)\n\nrate based on SOFR, are redeemable at par, and mature in 2035. The carrying value of these debt securities was approximately $5.7 million at June 30, 2026, and $5.6 million at June 30, 2025. In connection with the February 2022 Fortune merger, the Company assumed $7.5 million in fixed-to-floating rate subordinated notes. The notes had been issued in May 2021 by Fortune to a multi-lender group, bear interest through May 2026 at a fixed rate of 4.5%, and were to bear interest thereafter at SOFR plus 3.77%. The Company retired this debt in May 2026 when the notes became redeemable. The carrying value of the note was $0 at June 30, 2026 and approximately $7.5 million at June 30, 2025.\n\n*Stockholders’ Equity.*The Company’s stockholders’ equity was $590.7 million at June 30, 2026, an increase of $46.0 million, or 8.4%, as compared to June 30, 2025. The increase was attributable primarily to earnings retained after cash dividends paid, in combination with a $1.6 million reduction in accumulated other comprehensive losses (AOCL) as the market value of the Company’s investments appreciated due to tighter credit spreads and continued principal paydowns within the investment portfolio. The AOCL totaled $9.8 million at June 30, 2026, as compared to $11.4 million at June 30, 2025. The Company does not hold any securities classified as held-to-maturity. The increase in stockholders’ equity was partially offset by $18.6 million utilized to repurchase 317,000 shares of the Company’s common stock during fiscal 2026 at an average price of $58.59 per share.\n\n**COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED JUNE 30, 2026 AND 2025**\n\n*Net Income.* The Company’s net income for the fiscal year ended June 30, 2026, was $71.8 million, an increase of $13.3 million, or 22.6%, as compared to the prior fiscal year.\n\n*Net Interest Income*. Net interest income for fiscal 2026 was $172.8 million, an increase of $18.2 million, or 11.8%, when compared to the prior fiscal year. The increase was attributable to a 4.9% increase in the average balance of interest-earning assets, and an increase in the net interest margin, from 3.40% to 3.62%. Average earning asset balance growth was due primarily to loan growth, partially offset by decreases in investment securities. The decrease in the average cost of funding, primarily attributable to a lower cost of deposits and a decline in the cost of borrowings, more than offset the decrease in earning asset yields, and contributed to the expansion of net interest margin as compared to 2025.\n\n*Interest Income.* Interest income for fiscal 2026 was $289.0 million, an increase of $11.6 million, or 4.2%, when compared to the prior fiscal year. The increase was due to an increase of $222.4 million, or 4.9%, in the average balance of interest-earning assets, partially offset by a four-basis point decrease in the average yield earned on interest-earning assets, from 6.09% in fiscal 2025, to 6.05% in fiscal 2026.\n\nInterest income on loans receivable for fiscal 2026 was $265.2 million, an increase of $14.4 million, or 5.7%, when compared to the prior fiscal year. The increase was due to a $244.3 million, or 6.1%, increase in the average balance of loans receivable, combined with a three-basis point decrease in the average yield earned on loans receivable. The decrease in the average yield was attributed to originations and repricing of loans and borrower refinancings at current lower market interest rates compared to the average loan portfolio rates of the prior fiscal year.\n\nInterest income on the investment portfolio and other interest-earning assets was $23.8 million for fiscal 2026, a decrease of $2.7 million, or 10.3%, when compared to the prior fiscal year. The decrease was attributable to a $22.0 million, or 3.8%, decrease in the average balance of such assets, combined with a 31-basis point decrease in the average yield of this portfolio, to 4.28%, in fiscal 2026. The decrease in these average balances was due to decreases in other investment securities and correspondent balances, partially offset by increases in mortgage-backed and collateralized mortgage obligations. The decrease in yield was primarily attributable to the decrease in the short end of the yield curve compared to the year ago period.\n\n*Interest Expense.* Interest expense was $116.1 million for fiscal 2026, a decrease of $6.6 million, or 5.4%, when compared to the prior fiscal year. The decrease was due to a 30-basis point decrease in the average rate paid on interest-bearing liabilities, to 2.95% in fiscal 2026, from 3.25% in fiscal 2025, partially offset by an increase of $162.0 million, or 4.3%, in the average balance of interest-bearing liabilities.\n\n65\n\n[Table of Contents](#TOC)\n\nInterest expense on deposits was $109.2 million for fiscal 2026, a decrease of $6.6 million, or 5.7%, as compared to the prior fiscal year. The decrease was due to a 30-basis point decrease in the average rate paid on interest-bearing deposits, partially offset by a $155.9 million, or 4.3%, increase in the average balance of those deposits. The decrease in the average rate paid on deposits was attributable primarily to deposits rates, particularly certificates of deposits and savings accounts, adjusting down to lower market interest rates over the course of fiscal 2026, when compared to average rates in fiscal 2025.\n\nInterest expense on securities sold under agreements to repurchase was $806,000 for fiscal 2026, an increase of $40,000, or 5.2%, when compared to the prior fiscal year. The increase was due to a $5.2 million, or 36.2%, increase in the average balance of these securities sold, partially offset by a 122-basis point decrease in the average rate paid.\n\nInterest expense on FHLB advances was $4.7 million for fiscal 2026, an increase of $83,000, or 1.8%, when compared to the prior fiscal year. The increase was due primarily to a $1.8 million, or 1.6%, increase in the average balance of these advances, while the average rate paid on advances was unchanged from the prior year at 4.16%.\n\nInterest expense on subordinated debt was $1.5 million for fiscal year 2026, a decrease of $171,000, or 10.5%, when compared to the prior fiscal year. The decrease was due to a 49-basis point decrease in the average rate paid on subordinated debt, attributable to lower market interest rates over the course of the fiscal year, which impacted adjustable-rate debt.\n\n*Provision for Credit Losses*. The Company recorded a provision for credit losses (PCL) of $11.5 million for fiscal 2026, as compared to a PCL of $6.5 million for the prior fiscal year. In fiscal 2026, the Company had an $11.0 million PCL for on-balance sheet exposure and a $482,000 PCL for off-balance sheet exposures. The increase was primarily attributable to providing for net charge-offs and to support loan growth, in addition to an increase in unfunded balances and an increase in the expected funding rate on available credit. The factors considered when estimating a required ACL and PCL for loan balances outstanding is detailed below in “Note 3: Loans and Allowance for Credit Losses”.\n\n​\n\n*Noninterest Income.* Noninterest income was $27.8 million for fiscal 2026, a decrease of $187,000, or 0.7%, when compared to the prior fiscal year. The decrease was primarily attributable to a decrease in other loan fees, reflecting a refinement of our fee recognition under ASC 310-20, Receivables – Nonrefundable Fees and Other Costs, with a greater portion now recognized in interest income over the life of the loan. Partially offsetting that decrease were increases in deposit account charges, bank card interchange income, BOLI earnings, wealth management fees, and insurance brokerage commissions. Increased deposit account charges and related fees were primarily attributable to an increase in non-sufficient fund activity and increased wire fee income primarily due to an increase of our wire fee rates and elevated wire activity.\n\n*Noninterest Expense.* Noninterest expense was $102.1 million for fiscal 2026, relatively unchanged when compared to the prior fiscal year. Increases in data processing costs for new systems, software licensing costs, occupancy expenses from higher building maintenance expenses, advertising expenses and IT equipment purchases, were offset by decreases in compensation expenses recognized in recent periods as a result of our refined accounting for loan origination expenses under ASC 310-20, and by decreases in legal and professional fees, and intangible amortization.\n\n*Provision for Income Taxes.* The Company recorded an income tax provision of $15.3 million for fiscal 2026, a decrease of $151,000, or 1.0%, as compared to the prior fiscal year, which was attributable to benefits recognized on tax credit investments, partially offset by tax provisions on higher pretax income. The effective tax rate was 17.5% for fiscal 2026, as compared to 20.8% for fiscal 2025.\n\n66\n\n[Table of Contents](#TOC)\n\n**COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED JUNE 30, 2025 AND 2024**\n\n*Net Income.* The Company’s net income for the fiscal year ended June 30, 2025, was $58.6 million, an increase of $8.4 million, or 16.7%, as compared to the prior fiscal year.\n\n*Net Interest Income*. Net interest income for fiscal 2025 was $154.6 million, an increase of $15.1 million, or 10.8%, when compared to the prior fiscal year. The increase was attributable to a 6.7% increase in the average balance of interest-earning assets, and an increase in the net interest margin, from 3.27% to 3.40%. Average earning asset balance growth was due primarily to loan growth, increases in investment securities, and funds held with correspondent banks. The increase in earning asset yields, primarily attributable to the increase in loan yields, more than offset the increase in average cost of funding, contributed to the expansion in net interest margin as compared to 2024.\n\n*Interest Income.* Interest income for fiscal 2025 was $277.4 million, an increase of $29.0 million, or 11.7%, when compared to the prior fiscal year. The increase was due to an increase of $286.1 million, or 6.7%, in the average balance of interest-earning assets, combined with a 27-basis point increase in the average yield earned on interest-earning assets, from 5.82% in fiscal 2024, to 6.09% in fiscal 2025.\n\nInterest income on loans receivable for fiscal 2025 was $250.8 million, an increase of $28.3 million, or 12.7%, when compared to the prior fiscal year. The increase was due to a $257.3 million, or 6.9%, increase in the average balance of loans receivable, combined with a 33-basis point increase in the average yield earned on loans receivable. The increase in the average yield was attributed to originations and repricing of loans and borrower refinancings at current higher market interest rates compared to the average loan portfolio rates of the prior fiscal year.\n\nInterest income on the investment portfolio and other interest-earning assets was $26.5 million for fiscal 2025, an increase of $656,000, or 2.5%, when compared to the prior fiscal year. This increase was attributable to a $28.8 million, or 5.2%, increase in the average balance of such assets. The increase in these average balances were due to increases in mortgage-backed and collateralized mortgage obligations, and correspondent balances. This was partially offset by decreases in other investment securities and FHLB stock, and a decrease in the average yield of this portfolio of 12 basis points, to 4.59%, in fiscal 2025. The decrease in yield was primarily attributable to the decrease in the short end of the yield curve compared to the year ago.\n\n*Interest Expense.* Interest expense was $122.7 million for fiscal 2025, an increase of $13.9 million, or 12.7%, when compared to the prior fiscal year. The increase was due to a 14-basis point increase in the average rate paid on interest-bearing liabilities, to 3.25% in fiscal 2025, from 3.11% in fiscal 2024, combined with an increase of $273.4 million, or 7.8%, in the average balance of interest-bearing liabilities.\n\nInterest expense on deposits was $115.8 million for fiscal 2025, an increase of $14.1 million, or 13.8%, as compared to the prior fiscal year. The increase was due to a 15-basis point increase in the average rate paid on interest-bearing deposits, combined with the $282.2 million, or 8.4%, increase in the average balance of those deposits. The increase in the average rate paid on deposits was attributable primarily to deposits rates, particularly certificates of deposit and savings accounts, adjusting up to higher market interest rates over the course of fiscal 2025, when compared to average rates in fiscal 2024.\n\nInterest expense on securities sold under agreements to repurchase was $766,000 for fiscal 2025, an increase of $315,000, or 69.8%, when compared to the prior fiscal year. The increase was due primarily to a $4.9 million, or 52.5%, increase in the average balance of these securities sold and a 55-basis point increase in the average rate paid on advances. The increase in the average rate paid was attributable primarily to the term advances being made in a rate environment with higher market interest rates, compared to the portfolio of term advances in the prior year.\n\nInterest expense on FHLB advances was $4.6 million for fiscal 2025, a decrease of $411,000, or 8.2%, when compared to the prior fiscal year. The decrease was due primarily to a $13.7 million, or 11.1%, decrease in the average balance of these advances, which was partially offset by a 13-basis point increase in the average rate paid on advances. The increase in the average rate paid was attributable primarily to the maturity of term advances with interest rates below the portfolio’s average rate.\n\n67\n\n[Table of Contents](#TOC)\n\nInterest expense on subordinated debt was $1.6 million for fiscal year 2025, a decrease of $114,000, or 6.5%, when compared to the prior fiscal year. The decrease was due primarily to a 51-basis point decrease in the average rate paid on subordinated debt. The decrease in the average rate paid was attributable primarily to lower market interest rates over the course of the fiscal year, which impacted adjustable-rate debt.\n\n*Provision for Credit Losses*. The Company recorded a provision for credit losses (PCL) of $6.5 million for fiscal 2025, as compared to a PCL of $3.6 million for the prior fiscal year. In fiscal 2025, the Company had a $5.8 million PCL for on-balance sheet exposure and a $676,000 PCL for off-balance sheet exposures. The increase was primarily attributable to providing for net charge-offs and to support loan growth, in addition to an increase in unfunded balances of loans and an increase in the expected funding rate on available credit.\n\n​\n\n*Noninterest Income.* Noninterest income was $28.0 million for fiscal 2025, an increase of $3.1 million, or 12.6%, when compared to the prior fiscal year. In the prior year, $1.5 million net realized losses on AFS securities were recognized, compared to a net realized gain of $48,000 in fiscal 2025. In addition, the increase was attributable to increased other loan fees and deposit account charges and related fees. The increase in other loan fees was primarily due to an increase in loan origination volume, in both commercial and residential real estate loans. Increased deposit account charges and related fees were primarily attributable to an increase in non-sufficient fund activity and an increase in maintenance and activity fees collected. These increases were partially offset by lower other income, loan late charges, and loan servicing fees. The decrease in other noninterest income was associated with the change in accounting for realization of tax credits, as the Company has adopted the proportional amortization method under ASU 2023-02, which results in a direct reduction to the provision for income taxes in fiscal 2025. This has resulted in lower other fee income for fiscal 2025 of $701,000, as current year tax credit amortization for investments accounted for under proportional amortization reduces tax provisions. Loan servicing fees were negatively impacted by the recognition of a change in the fair value of mortgage servicing rights, which resulted in a negative adjustment of $108,000 in fiscal 2025, as compared to a benefit of $131,000 in fiscal 2024, due to changes in market rates and prepayment assumptions.\n\n*Noninterest Expense.* Noninterest expense was $102.1 million for fiscal 2025, an increase of $4.5 million, or 4.6%, when compared to the prior fiscal year. The increase was primarily attributable to increases in compensation and benefits and legal and professional fees. The increase in compensation and benefits as compared to the prior year period was primarily due to increased headcount, as well as annual merit increases and inflation adjustments. The Company experienced elevated legal and professional fees associated with consulting costs related to a performance improvement project with one-time cost for this review totaling $840,000 and consulting expenses to negotiate a new contract with a large vendor totaling $425,000. These increases as compared to the prior year were partially offset by decreases in intangible amortization expense, as the core deposit intangible recognized in an older merger was fully amortized in the second quarter of fiscal 2025, and by reduced telecommunication expenses.\n\n*Provision for Income Taxes.* The Company recorded an income tax provision of $15.4 million for fiscal 2025, an increase of $2.5 million, or 19.2%, as compared to the prior fiscal year, which was attributable to higher pre-tax income and an adjustment of tax accruals of $650,000 attributable to completed merger activity. This was partially offset by the change in accounting for recognition of tax credits accounted for under proportional amortization, as mentioned above. The effective tax rate was 20.8% for fiscal 2025, as compared to 20.5% for fiscal 2024.\n\n​\n\nLIQUIDITY AND CAPITAL RESOURCES\n\nThe Bank’s primary potential sources of funds include deposit growth, FHLB advances, amortization and prepayment of loan principal, investment maturities and sales, and capital generated from ongoing operations. While scheduled repayments on loans and securities as well as the maturity of short-term investments are a relatively predictable source of funding, deposit flows and loan and security prepayment rates are significantly influenced by factors outside of the Bank’s control, including general economic conditions and market competition. The Bank has relied on FHLB advances as a stable source for funding cash or liquidity needs, particularly for longer maturities.\n\nThe Bank uses its liquid assets as well as other funding sources to meet ongoing commitments, to fund loan demand, to repay maturing certificates of deposit and FHLB advances, to make investments, to fund other deposit\n\n68\n\n[Table of Contents](#TOC)\n\nwithdrawals, and to meet operating expenses. At June 30, 2026, the Bank had outstanding commitments to extend credit of $948.5 million (including $692.5 million in unused lines of credit). Total commitments to originate fixed-rate loans with terms in excess of one year were $182.4 million at rates ranging from 4.65% to 8.25%, with a weighted-average rate of 6.59%. Management anticipates that current funding sources will be adequate to meet foreseeable liquidity needs.\n\nFor the fiscal year ended June 30, 2026, Southern Missouri increased deposits by $126.5 million and FHLB advances by $26.4 million. During the prior fiscal year, the Bank increased deposits by $338.3 million, and increased FHLB advances by $2.0 million. At June 30, 2026, the Bank reported $1.6 billion of its single-family residential, home equity, and commercial real estate loan portfolios as eligible collateral to the FHLB for available credit of approximately $1.0 billion, of which $130.4 million was advanced, while $656,000 was encumbered in relation to residential real estate loans sold onto the secondary market through the FHLB. The Bank had also pledged $409.1 million of its agricultural real estate and agricultural operating and equipment loans to the Federal Reserve Bank of St. Louis’s discount window for available credit of approximately $355.4 million, as of June 30, 2026, none of which was advanced. In addition, as of June 30, 2026, the Bank had other assets available to pledge to the FHLB and Federal Reserve to access additional liquidity. In total, FHLB borrowings are limited to 45% of Bank assets, or approximately $2.3 billion as most recently reported by the FHLB as of June 30, 2026, which means that an amount up to $2.2 billion may still be eligible to be borrowed from the FHLB, subject to available collateral. Along with the ability to borrow from the FHLB and Federal Reserve Bank of St. Louis, management believes its liquid resources will be sufficient to meet the Company’s liquidity needs.\n\nLiquidity management is an ongoing responsibility of the Bank’s management. The Bank adjusts its investment in liquid assets based upon a variety of factors including (i) expected loan demand and deposit flows, (ii) anticipated investment and FHLB advance maturities, (iii) the impact on profitability, and (iv) asset/liability management objectives.\n\nAt June 30, 2026, the Bank had $1.4 billion in CDs maturing within one year and $2.7 billion in non-maturity deposits, as compared to $1.2 billion in CDs maturing within one year and $2.6 billion in non-maturity deposits as of June 30, 2025. Management believes that most maturing interest-bearing liabilities will be retained or replaced by new interest-bearing liabilities. Also, at June 30, 2026, the Bank had $28.4 million in overnight advances from the FHLB, $37.0 million in term FHLB advances maturing within one year, and $65.0 million in FHLB advances with a maturity date in excess of one year. Of the advances with maturity dates in excess of one year, none was eligible for early redemption by the lender within one year.\n\nWe also incur capital expenditures on an ongoing basis to expand and improve our product offerings, enhance and modernize our technology infrastructure, and to introduce new technology-based products to compete effectively in our markets. We evaluate capital expenditure projects based on a variety of factors, including expected strategic impacts (such as forecasted impact on revenue growth, productivity, expenses, service levels and customer retention) and our expected return on investment. The amount of capital investment is influenced by, among other things, current and projected demand for our services and products, cash flow generated by operating activities, cash required for other purposes and regulatory considerations. At June 30, 2026, we had other future obligations and accrued expenses of $53.9 million. Based on our current capital allocation objectives, during fiscal 2026 we project expending approximately $8.0 million to $11.0 million of cash for capital investment in technology, property, plant and equipment. In addition, for the fiscal year ending June 30, 2026, we project that our fixed commitments will include (i) $1.0 million of operating and finance lease and other fixed payments and (ii) $1.1 million of scheduled interest payments on subordinate notes. We believe that our liquid assets combined with the available lines of credit provide adequate liquidity to meet our current financial obligations for at least the next 12 months.\n\n**REGULATORY CAPITAL**\n\nFederally insured financial institutions are required to maintain minimum levels of regulatory capital. Federal Reserve regulations establish capital requirements, including a tier 1 leverage (or core capital) requirement and risk-based capital requirements. The Federal Reserve Board is also authorized to impose capital requirements in excess of these standards on individual institutions on a case-by-case basis.\n\n69\n\n[Table of Contents](#TOC)\n\nAt June 30, 2026, the Bank exceeded regulatory capital requirements with tier 1 capital, total risk-based capital, and common equity tier 1 capital of $536.9 million, $592.4 million and $536.9 million, respectively. The Bank’s tier 1 capital represented 10.45% of total adjusted assets and 12.12% of total risk-weighted assets, while total risk-based capital was 13.37% of total risk-weighted assets, and common equity tier 1 capital was 12.12% of total risk-weighted assets. To be considered adequately capitalized under the FDIC Prompt Corrective Action (PCA) guidelines, the Bank must maintain tier 1 capital levels of at least 4.0% of adjusted total assets and 6.0% of risk-weighted assets, total risk-based capital of 8.0% of risk-weighted assets, and common equity tier 1 capital of 4.5% of risk-weighted assets. To be considered well capitalized, the Bank must maintain tier 1 capital levels of at least 5.0% of adjusted total assets and 8.0% of risk-weighted assets, total risk-based capital of 10.0% of risk-weighted assets, and common equity tier 1 capital of 6.5% of risk-weighted assets.\n\nAt June 30, 2026, the Company exceeded regulatory capital requirements with tier 1 capital, total risk-based capital, and common equity tier 1 capital of $562.9 million, $619.0 million and $547.2 million, respectively. The Company’s tier 1 capital represented 11.03% of total adjusted assets and 12.56% of total risk-weighted assets, while total risk-based capital was 13.81% of total risk-weighted assets, and common equity tier 1 capital was 12.20% of total risk-weighted assets. Under 12 CFR Part 217 – Capital Adequacy of Bank Holding Companies, Savings and Loan Holding Companies, and State Member Banks (Regulation Q), the Company is subject to the following minimum regulatory capital requirements: common equity tier 1 capital ratio of 4.5%, tier 1 capital ratio of 6%, total capital ratio of 8% of risk-weighted assets, and leverage ratio of 4%.\n\nSee Item 1 – Business – Regulation, and Note 12 of the Notes to the Consolidated Financial Statements contained in Item 8 of this Form 10-K for additional detail on the Company’s capital requirements.\n\n**IMPACT OF INFLATION**\n\nThe consolidated financial statements and related data presented herein have been prepared in accordance with U.S. generally accepted accounting principles, which require the measurement of financial position and operating results in historical dollars without considering changes in the relative purchasing power of money over time due to inflation. The primary impact of inflation on the operations of the Company is reflected in increased operating costs. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, changes in interest rates generally have a more significant impact on a financial institution’s performance than does inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services. In the current interest rate environment, liquidity and maturity structure of the Company’s assets and liabilities are critical to the maintenance of acceptable performance levels.\n\nAVERAGE BALANCE, INTEREST AND AVERAGE YIELDS AND RATES\n\nThe following table sets forth certain information relating to the Company’s average interest-earning assets and interest-bearing liabilities and reflects the average yield on assets and the average cost of liabilities for the periods indicated. These yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the years indicated. Nonaccrual loans are included with other noninterest-earning assets.\n\nThe table also presents information with respect to the difference between the weighted-average yield earned on interest-earning assets and the weighted-average rate paid on interest-bearing liabilities, or interest rate spread, which financial institutions have traditionally used as an indicator of profitability. Another indicator of an institution’s net interest income is its net yield (or net interest margin) on interest-earning assets, which is its net interest income divided by the average balance of interest-earning assets. Net interest income is affected by the interest rate spread and by the relative amounts of interest-earning assets and interest-bearing liabilities. When interest-earning assets approximate or exceed interest-bearing liabilities, any positive interest rate spread will generate net interest income.\n\n​\n\n70\n\n[Table of Contents](#TOC)\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nYears Ended June 30, \n\n \n\n​\n\n​\n\n**2026**\n\n​\n\n2025\n\n​\n\n2024\n\n \n\n*(dollars in thousands)*\n\n  ​ ​ ​\n\nAverage\n\n  ​ ​ ​\n\nInterest and \n\n  ​ ​ ​\n\nYield/\n\n \n\nAverage\n\n  ​ ​ ​\n\nInterest and \n\n  ​ ​ ​\n\nYield/\n\n \n\nAverage\n\n  ​ ​ ​\n\nInterest and \n\n  ​ ​ ​\n\nYield/\n\n \n\n​\n\n​\n\nBalance\n\n​\n\nDividends\n\n​\n\n Cost \n\n \n\nBalance\n\n​\n\nDividends\n\n​\n\n Cost\n\n \n\nBalance\n\n​\n\nDividends\n\n​\n\n Cost \n\n \n\nInterest-earning assets:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nMortgage loans (1)\n\n​\n\n$\n\n3,326,871\n\n​\n\n$\n\n202,141\n\n​\n\n6.08\n\n%\n\n$\n\n3,175,179\n\n​\n\n$\n\n190,062\n\n​\n\n5.99\n\n%\n\n$\n\n3,009,263\n\n​\n\n$\n\n168,894\n\n​\n\n5.61\n\n%\n\nOther loans (1)\n\n​\n\n​\n\n892,896\n\n​\n\n​\n\n63,067\n\n​\n\n7.06\n\n​\n\n​\n\n800,247\n\n​\n\n​\n\n60,784\n\n​\n\n7.60\n\n​\n\n​\n\n708,881\n\n​\n\n​\n\n53,618\n\n​\n\n7.56\n\n​\n\nTotal net loans\n\n​\n\n \n\n4,219,767\n\n​\n\n \n\n265,208\n\n \n\n6.28\n\n​\n\n \n\n3,975,426\n\n​\n\n \n\n250,846\n\n \n\n6.31\n\n​\n\n \n\n3,718,144\n\n​\n\n \n\n222,512\n\n \n\n5.98\n\n​\n\nMortgage-backed securities\n\n​\n\n​\n\n361,359\n\n​\n\n​\n\n15,554\n\n​\n\n4.30\n\n​\n\n​\n\n356,293\n\n​\n\n​\n\n16,567\n\n​\n\n4.65\n\n​\n\n​\n\n304,778\n\n​\n\n​\n\n14,631\n\n​\n\n4.80\n\n​\n\nInvestment securities (2)\n\n​\n\n​\n\n117,339\n\n​\n\n​\n\n4,962\n\n​\n\n4.23\n\n​\n\n​\n\n130,445\n\n​\n\n​\n\n5,808\n\n​\n\n4.45\n\n​\n\n​\n\n165,307\n\n​\n\n​\n\n6,877\n\n​\n\n4.16\n\n​\n\nOther interest-earning assets\n\n​\n\n​\n\n77,350\n\n​\n\n​\n\n3,262\n\n​\n\n4.22\n\n​\n\n​\n\n91,278\n\n​\n\n​\n\n4,144\n\n​\n\n4.54\n\n​\n\n​\n\n79,116\n\n​\n\n​\n\n4,355\n\n​\n\n5.50\n\n​\n\nTOTAL INTEREST- EARNING ASSETS (1)\n\n​\n\n \n\n4,775,815\n\n​\n\n \n\n288,986\n\n \n\n6.05\n\n​\n\n \n\n4,553,442\n\n​\n\n \n\n277,365\n\n \n\n6.09\n\n​\n\n \n\n4,267,345\n\n​\n\n \n\n248,375\n\n \n\n5.82\n\n​\n\nOther noninterest-earning assets (3)\n\n​\n\n​\n\n325,627\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n291,057\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n290,952\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\nTOTAL ASSETS\n\n​\n\n$\n\n5,101,442\n\n​\n\n​\n\n288,986\n\n \n\n—\n\n​\n\n$\n\n4,844,499\n\n​\n\n​\n\n277,365\n\n \n\n—\n\n​\n\n$\n\n4,558,297\n\n​\n\n​\n\n248,375\n\n \n\n—\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nInterest-bearing liabilities:\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n \n\n  ​\n\n​\n\nSavings accounts\n\n​\n\n$\n\n697,532\n\n​\n\n​\n\n16,275\n\n​\n\n2.33\n\n​\n\n$\n\n584,185\n\n​\n\n​\n\n15,733\n\n​\n\n2.69\n\n​\n\n$\n\n382,713\n\n​\n\n​\n\n8,176\n\n​\n\n2.14\n\n​\n\nNOW accounts\n\n​\n\n​\n\n1,129,614\n\n​\n\n​\n\n19,905\n\n​\n\n1.76\n\n​\n\n​\n\n1,153,650\n\n​\n\n​\n\n22,249\n\n​\n\n1.93\n\n​\n\n​\n\n1,265,325\n\n​\n\n​\n\n26,528\n\n​\n\n2.10\n\n​\n\nMoney market accounts\n\n​\n\n​\n\n330,678\n\n​\n\n​\n\n8,549\n\n​\n\n2.59\n\n​\n\n​\n\n338,132\n\n​\n\n​\n\n9,735\n\n​\n\n2.88\n\n​\n\n​\n\n403,170\n\n​\n\n​\n\n12,596\n\n​\n\n3.12\n\n​\n\nCertificates of deposit\n\n​\n\n​\n\n1,622,647\n\n​\n\n​\n\n64,480\n\n​\n\n3.97\n\n​\n\n​\n\n1,548,584\n\n​\n\n​\n\n68,056\n\n​\n\n4.39\n\n​\n\n​\n\n1,291,163\n\n​\n\n​\n\n54,406\n\n​\n\n4.21\n\n​\n\nTOTAL INTEREST- BEARING DEPOSITS\n\n​\n\n \n\n3,780,471\n\n​\n\n \n\n109,209\n\n \n\n2.89\n\n​\n\n \n\n3,624,551\n\n​\n\n \n\n115,773\n\n \n\n3.19\n\n​\n\n \n\n3,342,371\n\n​\n\n \n\n101,706\n\n \n\n3.04\n\n​\n\nBorrowings:\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n \n\n  ​\n\n​\n\nSecurities sold under agreements to repurchase\n\n​\n\n​\n\n19,511\n\n​\n\n​\n\n806\n\n​\n\n4.13\n\n​\n\n​\n\n14,330\n\n​\n\n​\n\n766\n\n​\n\n5.35\n\n​\n\n​\n\n9,398\n\n​\n\n​\n\n451\n\n​\n\n4.80\n\n​\n\nFHLB advances\n\n​\n\n​\n\n112,026\n\n​\n\n​\n\n4,665\n\n​\n\n4.16\n\n​\n\n​\n\n110,254\n\n​\n\n​\n\n4,582\n\n​\n\n4.16\n\n​\n\n​\n\n123,986\n\n​\n\n​\n\n4,993\n\n​\n\n4.03\n\n​\n\nJunior subordinated debt\n\n​\n\n​\n\n22,298\n\n​\n\n​\n\n1,457\n\n​\n\n6.53\n\n​\n\n​\n\n23,182\n\n​\n\n​\n\n1,628\n\n​\n\n7.02\n\n​\n\n​\n\n23,130\n\n​\n\n​\n\n1,742\n\n​\n\n7.53\n\n​\n\nTOTAL INTEREST- BEARING LIABILITIES\n\n​\n\n \n\n3,934,306\n\n​\n\n \n\n116,137\n\n \n\n2.95\n\n​\n\n \n\n3,772,317\n\n​\n\n \n\n122,749\n\n \n\n3.25\n\n​\n\n \n\n3,498,885\n\n​\n\n \n\n108,892\n\n \n\n3.11\n\n​\n\nNoninterest-bearing demand deposits\n\n​\n\n​\n\n539,313\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n523,710\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n561,004\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\nOther liabilities\n\n​\n\n​\n\n60,582\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n33,370\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\n​\n\n31,366\n\n​\n\n​\n\n—\n\n​\n\n—\n\n​\n\nTOTAL LIABILITIES\n\n​\n\n \n\n4,534,201\n\n​\n\n \n\n116,137\n\n \n\n—\n\n​\n\n \n\n4,329,397\n\n​\n\n \n\n122,749\n\n \n\n—\n\n​\n\n \n\n4,091,255\n\n​\n\n \n\n108,892\n\n \n\n—\n\n​\n\nStockholders’ equity\n\n​\n\n \n\n567,241\n\n​\n\n \n\n—\n\n \n\n—\n\n​\n\n \n\n515,102\n\n​\n\n \n\n—\n\n \n\n—\n\n​\n\n \n\n467,042\n\n​\n\n \n\n—\n\n \n\n—\n\n​\n\nTOTAL LIABLITIES AND STOCKHOLDERS’ EQUITY\n\n​\n\n$\n\n5,101,442\n\n​\n\n​\n\n116,137\n\n \n\n—\n\n​\n\n$\n\n4,844,499\n\n​\n\n​\n\n122,749\n\n \n\n—\n\n​\n\n$\n\n4,558,297\n\n​\n\n​\n\n108,892\n\n \n\n—\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nNet interest income\n\n​\n\n \n\n  ​\n\n​\n\n$\n\n172,849\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n$\n\n154,616\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n$\n\n139,483\n\n \n\n  ​\n\n​\n\nInterest rate spread (4)\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n \n\n3.10\n\n%\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n \n\n2.84\n\n%\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n \n\n2.71\n\n%\n\nNet interest margin (5)\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n \n\n3.62\n\n%\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n \n\n3.40\n\n%\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n \n\n3.27\n\n%\n\nRatio of average interest-earning assets to average interest-bearing liabilities\n\n​\n\n \n\n121.39\n\n%  \n\n \n\n  ​\n\n \n\n  ​\n\n​\n\n \n\n120.71\n\n%  \n\n \n\n  ​\n\n \n\n  ​\n\n​\n\n \n\n123.57\n\n%  \n\n \n\n  ​\n\n \n\n  ​\n\n​\n\n(1)Calculated net of deferred loan fees and loan discounts. Nonaccrual loans are not included in average loans.\n\n(2)Includes FHLB membership stock, Federal Reserve membership stock, and related cash dividends.\n\n(3)Includes equity securities and related cash dividends.\n\n(4)Represents the difference between the average rate on interest-earning assets and the average cost of interest-bearing liabilities.\n\n(5)Represents net interest income divided by average interest-earning assets.\n\n​\n\n71\n\n[Table of Contents](#TOC)\n\nYIELDS EARNED AND RATES PAID\n\nThe following table sets forth for the periods and as of the dates indicated, the weighted average yields earned on the Company’s assets, the weighted average interest rates paid on the Company’s liabilities, together with the net yield on interest-earning assets.\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nFor The Year Ended June 30, \n\n \n\n​\n\n**  ​ ​ ​**\n\n**2026**\n\n**  ​ ​ ​**\n\n2025\n\n**  ​ ​ ​**\n\n2024\n\n \n\nWeighted-average yield on loan portfolio\n\n \n\n6.28\n\n%  \n\n6.31\n\n%  \n\n5.98\n\n%\n\nWeighted-average yield on mortgage-backed securities\n\n \n\n4.30\n\n \n\n4.65\n\n \n\n4.80\n\n​\n\nWeighted-average yield on investment securities (1)\n\n \n\n4.23\n\n \n\n4.45\n\n \n\n4.16\n\n​\n\nWeighted-average yield on other interest-earning assets\n\n \n\n4.22\n\n \n\n4.54\n\n \n\n5.50\n\n​\n\nWeighted-average yield on all interest-earning assets\n\n \n\n6.05\n\n \n\n6.09\n\n \n\n5.82\n\n​\n\nWeighted-average rate paid on interest-bearing deposits\n\n \n\n2.89\n\n \n\n3.19\n\n \n\n3.04\n\n​\n\nWeighted-average rate paid on securities sold under agreements to repurchase\n\n \n\n4.13\n\n \n\n5.35\n\n \n\n4.80\n\n​\n\nWeighted-average rate paid on FHLB advances\n\n \n\n4.16\n\n \n\n4.16\n\n \n\n4.03\n\n​\n\nWeighted-average rate paid on subordinated debt\n\n \n\n6.53\n\n \n\n7.02\n\n \n\n7.53\n\n​\n\nWeighted-average rate paid on all interest-bearing liabilities\n\n \n\n2.95\n\n \n\n3.25\n\n \n\n3.11\n\n​\n\nInterest rate spread (spread between weighted average rate on all interest-earning assets and all interest- bearing liabilities)\n\n \n\n3.10\n\n \n\n2.84\n\n \n\n2.71\n\n​\n\nNet interest margin (net interest income as a percentage of average interest-earning assets)\n\n \n\n3.62\n\n \n\n3.40\n\n \n\n3.27\n\n​\n\n(1)Includes Federal Home Loan Bank and Federal Reserve Bank stock.\n\nRATE/VOLUME ANALYSIS\n\nThe following table sets forth the effects of changing rates and volumes on net interest income of the Company. Information is provided with respect to (i) effects on interest income attributable to changes in volume (changes in volume multiplied by prior rate), (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) changes in rate/volume (change in rate multiplied by change in volume).\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nYears Ended June 30, \n\n​\n\nYears Ended June 30, \n\n​\n\n​\n\n2026 Compared to 2025\n\n​\n\n2025 Compared to 2024\n\n​\n\n​\n\nIncrease (Decrease) Due to\n\n​\n\nIncrease (Decrease) Due to\n\n​\n\n​\n\n​\n\n​\n\n  ​ ​ ​\n\n​\n\n​\n\n  ​ ​ ​\n\nRate/\n\n  ​ ​ ​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n  ​ ​ ​\n\n​\n\n​\n\n  ​ ​ ​\n\nRate/\n\n  ​ ​ ​\n\n​\n\n​\n\n*(dollars in thousands)*\n\n  ​ ​ ​\n\nRate\n\n​\n\nVolume\n\n​\n\nVolume\n\n​\n\nNet\n\n  ​ ​ ​\n\nRate\n\n​\n\nVolume\n\n​\n\nVolume\n\n​\n\nNet\n\nInterest-earning assets:\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nLoans receivable (1)\n\n​\n\n$\n\n(1,399)\n\n​\n\n$\n\n16,117\n\n​\n\n$\n\n(356)\n\n​\n\n$\n\n14,362\n\n​\n\n$\n\n11,463\n\n​\n\n$\n\n16,223\n\n​\n\n$\n\n648\n\n​\n\n$\n\n28,334\n\nMortgage-backed securities\n\n​\n\n \n\n(1,231)\n\n​\n\n \n\n236\n\n​\n\n \n\n(18)\n\n​\n\n \n\n(1,013)\n\n​\n\n \n\n(460)\n\n​\n\n \n\n2,473\n\n​\n\n \n\n(77)\n\n​\n\n \n\n1,936\n\nInvestment securities (2)\n\n​\n\n \n\n(378)\n\n​\n\n \n\n(592)\n\n​\n\n \n\n124\n\n​\n\n \n\n(846)\n\n​\n\n \n\n707\n\n​\n\n \n\n(1,450)\n\n​\n\n \n\n(326)\n\n​\n\n \n\n(1,069)\n\nOther interest-earning deposits\n\n​\n\n \n\n(294)\n\n​\n\n \n\n(632)\n\n​\n\n \n\n44\n\n​\n\n \n\n(882)\n\n​\n\n \n\n(762)\n\n​\n\n \n\n669\n\n​\n\n \n\n(118)\n\n​\n\n \n\n(211)\n\nTotal net change in income on interest-earning assets\n\n​\n\n \n\n(3,302)\n\n​\n\n \n\n15,129\n\n​\n\n \n\n(206)\n\n​\n\n \n\n11,621\n\n​\n\n \n\n10,948\n\n​\n\n \n\n17,915\n\n​\n\n \n\n127\n\n​\n\n \n\n28,990\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\n​\n\nInterest-bearing liabilities:\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\n​\n\n \n\n  ​\n\nDeposits\n\n​\n\n \n\n(11,740)\n\n​\n\n \n\n5,668\n\n​\n\n \n\n(492)\n\n​\n\n \n\n(6,564)\n\n​\n\n \n\n1,299\n\n​\n\n \n\n10,789\n\n​\n\n \n\n1,979\n\n​\n\n \n\n14,067\n\nSecurities sold under agreements to repurchase\n\n​\n\n​\n\n(174)\n\n​\n\n​\n\n277\n\n​\n\n​\n\n(63)\n\n​\n\n​\n\n40\n\n​\n\n​\n\n51\n\n​\n\n​\n\n237\n\n​\n\n​\n\n27\n\n​\n\n​\n\n315\n\nFHLB advances\n\n​\n\n \n\n9\n\n​\n\n​\n\n74\n\n​\n\n \n\n—\n\n​\n\n \n\n83\n\n​\n\n \n\n159\n\n​\n\n​\n\n(553)\n\n​\n\n \n\n(17)\n\n​\n\n \n\n(411)\n\nSubordinated debt\n\n​\n\n \n\n(113)\n\n​\n\n \n\n(62)\n\n​\n\n \n\n4\n\n​\n\n \n\n(171)\n\n​\n\n \n\n(118)\n\n​\n\n \n\n4\n\n​\n\n \n\n—\n\n​\n\n \n\n(114)\n\nTotal net change in expense on interest-bearing liabilities\n\n​\n\n \n\n(12,018)\n\n​\n\n \n\n5,957\n\n​\n\n \n\n(551)\n\n​\n\n \n\n(6,612)\n\n​\n\n \n\n1,391\n\n​\n\n \n\n10,477\n\n​\n\n \n\n1,989\n\n​\n\n \n\n13,857\n\nNet change in net interest income\n\n​\n\n$\n\n8,716\n\n​\n\n$\n\n9,172\n\n​\n\n$\n\n345\n\n​\n\n$\n\n18,233\n\n​\n\n$\n\n9,557\n\n​\n\n$\n\n7,438\n\n​\n\n$\n\n(1,862)\n\n​\n\n$\n\n15,133\n\n(1)Does not include interest on loans placed on nonaccrual status.\n\n(2)Does not include dividends earned on equity securities.\n\n72\n\n[Table of Contents](#TOC)"}