GREAT SOUTHERN BANCORP, INC. – 10-Q – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-looking Statements

When used in this Quarterly Report and in other documents filed or furnished by
Great Southern Bancorp, Inc. (the "Company") with the Securities and Exchange
Commission (the "SEC"), in the Company's press releases or other public or
stockholder communications, and in oral statements made with the approval of an
authorized executive officer, the words or phrases "may," "might," "could,"
"should," "will likely result," "are expected to," "will continue," "is
anticipated," "believe," "estimate," "project," "intends" or similar expressions
are intended to identify "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
also include, but are not limited to, statements regarding plans, objectives,
expectations or consequences of announced transactions, known trends and
statements about future performance, operations, products and services of the
Company. The Company's ability to predict results or the actual effects of
future plans or strategies is inherently uncertain, and the Company's actual
results could differ materially from those contained in the forward-looking
statements.

Factors that could cause or contribute to such differences include, but are not
limited to: (i) expected revenues, cost savings, earnings accretion, synergies
and other benefits from the Company's merger and acquisition activities might
not be realized within the anticipated time frames 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; (ii) changes in economic conditions, either nationally or in the
Company's market areas; (iii) the remaining effects of the COVID-19 pandemic,
including on our credit quality and business operations, as well as its impact
on general economic and financial market conditions and other uncertainties
resulting from the COVID-19 pandemic; (iv) fluctuations in interest rates and
the effects of inflation, a potential recession or slower economic growth caused
by changes in energy prices or supply chain disruptions; (v) 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; (vi) the possibility of realized or unrealized
losses on securities held in the Company's investment portfolio; (vii) the
Company's ability to access cost-effective funding and maintain sufficient
liquidity; (viii) fluctuations in real estate values and both residential and
commercial real estate market conditions; (ix) the ability to adapt successfully
to technological changes to meet customers' needs and developments in the
marketplace; (x) the possibility that security measures implemented might not be
sufficient to mitigate the risk of a cyber-attack or cyber theft, and that such
security measures might not protect against systems failures or interruptions;
(xi) legislative or regulatory changes that adversely affect the Company's
business; (xii) changes in accounting policies and practices or accounting
standards; (xiii) results of examinations of the Company and Great Southern Bank
by their regulators, including the possibility that the regulators may, among
other things, require the Company to limit its business activities, change its
business mix, increase its allowance for credit losses, write-down assets or
increase its capital levels, or affect its ability to borrow funds or maintain
or increase deposits, which could adversely affect its liquidity and earnings;
(xiv) costs and effects of litigation, including settlements and judgments; (xv)
competition; (xvi) uncertainty regarding the future of LIBOR and potential
replacement indexes; and (xvii) natural disasters, war, terrorist activities or
civil unrest and their effects on economic and business environments in which
the Company operates. The Company wishes to advise readers that the factors
listed above and other risks described from time to time in documents filed or
furnished by the Company with the SEC could affect the Company's financial
performance and could 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.

The Company does not undertake-and specifically declines any obligation- to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events.

Critical Accounting Policies, Judgments and Estimates

The accounting and reporting policies of the Company conform to accounting
principles generally accepted in the United States of America and general
practices within the financial services industry. The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and the
accompanying notes. Actual results could differ from those estimates.

Allowance for Credit Losses and Valuation of Foreclosed Assets

The Company believes that the determination of the allowance for credit losses
involves a higher degree of judgment and complexity than its other significant
accounting policies. The allowance for credit losses is calculated with the
objective of maintaining an allowance level believed by management to be
sufficient to absorb estimated credit losses. The allowance for credit losses is
measured using an average historical loss model that incorporates relevant
information about past events (including historical credit loss

                                       31

experience on loans with similar risk characteristics), current conditions, and
reasonable and supportable forecasts that affect the collectability of the
remaining cash flows over the contractual term of the loans. The allowance for
credit losses is measured on a collective (pool) basis. Loans are aggregated
into pools based on similar risk characteristics, including borrower type,
collateral and repayment types and expected credit loss patterns. Loans that do
not share similar risk characteristics, primarily classified loans with a
balance greater than or equal to $100,000, are evaluated on an individual basis.

For loans evaluated for credit losses on a collective basis, average historical
loss rates are calculated for each pool using the Company's historical net
charge-offs (combined charge-offs and recoveries by observable historical
reporting period) and outstanding loan balances during a lookback period.
Lookback periods can be different based on the individual pool and represent
management's credit expectations for the pool of loans over the remaining
contractual life. In certain loan pools, if the Company's own historical loss
rate is not reflective of the loss expectations, the historical loss rate is
augmented by industry and peer data. The calculated average net charge-off rate
is then adjusted for current conditions and reasonable and supportable
forecasts. These adjustments increase or decrease the average historical loss
rate to reflect expectations of future losses given economic forecasts of key
macroeconomic variables including, but not limited to, unemployment rate, GDP,
disposable income and market volatility. The adjustments are based on results
from various regression models projecting the impact of the macroeconomic
variables to loss rates. The forecast is used for a reasonable and supportable
period before reverting back to historical averages using a straight-line
method. The forecast adjusted loss rate is applied to the amortized cost of
loans over the remaining contractual lives, adjusted for expected prepayments.
The contractual term excludes expected extensions, renewals and modifications.
Additionally, the allowance for credit losses considers other qualitative
factors not included in historical loss rates or macroeconomic forecast such as
changes in portfolio composition, underwriting practices, or significant unique
events or conditions.

See Note 6 "Loans and Allowance for Credit Losses" of the accompanying financial
statements for additional information regarding the allowance for credit losses.
Inherent in this process is the evaluation of individual significant credit
relationships. From time to time certain credit relationships may deteriorate
due to payment performance, cash flow of the borrower, value of collateral, or
other factors. In these instances, management may revise its loss estimates and
assumptions for these specific credits due to changing circumstances. In some
cases, additional losses may be realized; in other instances, the factors that
led to the deterioration may improve or the credit may be refinanced elsewhere
and allocated allowances may be released from the particular credit.

On January 1, 2021, the Company adopted the new accounting standard related to
the allowance for credit losses. For assets held at amortized cost basis, this
standard eliminates the probable initial recognition threshold in GAAP and,
instead, requires an entity to reflect its current estimate of all expected
credit losses. See Note 6 of the accompanying financial statements for
additional information.

In addition, the Company considers that the determination of the valuations of
foreclosed assets held for sale involves a high degree of judgment and
complexity. The carrying value of foreclosed assets reflects management's best
estimate of the amount to be realized from the sales of the assets. While the
estimate is generally based on a valuation by an independent appraiser or recent
sales of similar properties, the amount that the Company realizes from the sales
of the assets could differ materially from the carrying value reflected in the
financial statements, resulting in losses that could adversely impact earnings
in future periods.

Goodwill and Intangible Assets

Goodwill and intangible assets that have indefinite useful lives are subject to
an impairment test at least annually and more frequently if circumstances
indicate their value may not be recoverable. Goodwill is tested for impairment
using a process that estimates the fair value of each of the Company's reporting
units compared with its carrying value. The Company defines reporting units as a
level below each of its operating segments for which there is discrete financial
information that is regularly reviewed. As of March 31, 2023, the Company had
one reporting unit to which goodwill has been allocated - the Bank. If the fair
value of a reporting unit exceeds its carrying value, then no impairment is
recorded. If the carrying value exceeds the fair value of a reporting unit,
further testing is completed comparing the implied fair value of the reporting
unit's goodwill to its carrying value to measure the amount of impairment, if
any. Intangible assets that are not amortized will be tested for impairment at
least annually by comparing the fair values of those assets to their carrying
values. At March 31, 2023, goodwill consisted of $5.4 million at the Bank
reporting unit, which included goodwill of $4.2 million that was recorded during
2016 related to the acquisition of 12 branches and the assumption of related
deposits in the St. Louis market from Fifth Third Bank. Other identifiable
deposit intangible assets that are subject to amortization are amortized on a
straight-line basis over a period of seven years.

In April 2022, the Company, through its subsidiary Great Southern Bank, entered
into a naming rights agreement with Missouri State University related to the
main arena on the university's campus in Springfield, Missouri. The terms of the
agreement provide the naming rights to Great Southern Bank for a total cost of
$5.5 million, to be paid over a period of seven years. The Company expects to
amortize the intangible asset through non-interest expense over a period not to
exceed 15 years.

                                       32

At March 31, 2023, the amortizable intangible assets included the arena naming
rights of $5.3 million, which are reflected in the table below. These
amortizable intangible assets are reviewed for impairment if circumstances
indicate their value may not be recoverable based on a comparison of fair value.

For purposes of testing goodwill for impairment, the Company uses a market
approach to value its reporting unit. The market approach applies a market
multiple, based on observed purchase transactions for each reporting unit, to
the metrics appropriate for the valuation of the operating unit. Significant
judgment is applied when goodwill is assessed for impairment. This judgment may
include developing cash flow projections, selecting appropriate discount rates,
identifying relevant market comparables and incorporating general economic and
market conditions.

Management does not believe any of the Company's goodwill or other intangible
assets were impaired as of March 31, 2023. While management believes no
impairment existed at March 31, 2023, different conditions or assumptions used
to measure fair value of the reporting unit, or changes in cash flows or
profitability, if significantly negative or unfavorable, could have a material
adverse effect on the outcome of the Company's impairment evaluation in the
future.

A summary of goodwill and intangible assets is as follows:

                                     March 31,      December 31,
                                       2023             2022

                                           (In Thousands)

Goodwill - Branch acquisitions $ 5,396 $ 5,396
Deposit intangibles
Fifth Third Bank (January 2016)

               -                53
Arena Naming Rights (April 2022)          5,306             5,364
Goodwill - Branch acquisitions            5,306             5,417
                                    $    10,702    $       10,813


Current Economic Conditions

Changes in economic conditions could cause the values of assets and liabilities
recorded in the financial statements to change rapidly, resulting in material
future adjustments in asset values, the allowance for credit losses, or capital
that could negatively affect the Company's ability to meet regulatory capital
requirements and maintain sufficient liquidity. Following the housing and
mortgage crisis and correction beginning in mid-2007, the United States entered
an economic downturn. Unemployment rose from 4.7% in November 2007 to peak at
10.0% in October 2009. Economic conditions improved in the subsequent years, as
indicated by higher consumer confidence levels, increased economic activity and
low unemployment levels. The U.S. economy continued to operate at historically
strong levels until the COVID-19 pandemic in March 2020, which severely affected
tourism, labor markets, business travel, immigration and the global supply chain
among other areas. The economy plunged into recession in the first quarter of
2020, as efforts to contain the spread of the coronavirus forced all but
essential business activity, or any work that could not be done from home, to
stop, shuttering factories, restaurants, entertainment, sporting events, retail
shops, personal services, and more. The pandemic has not been disruptive to the
U.S. and global economies for several months now, with governments, households
and businesses increasingly adept at making adjustments for the virus.

More than 22 million jobs were lost in March and April 2020 as businesses closed
their doors or reduced their operations, sending employees home on furlough or
layoffs. Hunkered down at home with uncertain incomes and limited buying
opportunities, consumer spending plummeted. As a result, gross domestic product
(GDP), the broadest measure of the nation's economic output, plunged. The
Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), a fiscal
relief bill passed by Congress and signed by the President in March 2020,
injected approximately $3 trillion into the economy through direct payments to
individuals and loans to small businesses that would help keep employees on
their payroll, fueling a historic bounce-back in economic activity.

Total fiscal support to the economy throughout the pandemic, including the CARES
Act, the American Rescue Plan of 2021, and several smaller fiscal packages,
totaled well over $5 trillion. The amount of this support was equal to almost
25% of pre-pandemic 2019 GDP and approximately three times that provided during
the global financial crisis of 2007-2008.

Additionally, the Federal Reserve acted decisively by slashing its benchmark
interest rate to near zero and ensuring credit availability to businesses,
households, and municipal governments. The Federal Reserve's efforts largely
insulated the financial system from the problems in the economy, a significant
difference from the financial crisis of 2007-2008. Purchases of Treasury and
agency mortgage-backed securities totaling $120 billion each month by the
Federal Reserve commenced shortly after the pandemic began. In November

                                       33

2021, the Federal Reserve began to taper its quantitative easing (QE), winding
down its bond purchases with its final open market purchase conducted on March
9, 2022.

The Federal Reserve continues to aggressively tighten monetary policy by
increasing rates and allowing its balance sheet to shrink through quantitative
tightening. The federal government deficit was $2.8 trillion in fiscal 2021,
close to $1.38 trillion in fiscal 2022, and is expected to be $1.4 trillion in
fiscal 2023. The publicly traded debt-to-GDP ratio is near 95%, up from 80%
prior to the pandemic and 35% prior to the global financial crisis. Lawmakers
were appropriately not focused on deficits during the pandemic, but as the
pandemic fades, addressing the fragile fiscal situation becomes critical. Real
gross domestic product (GDP) increased at an annual rate of 2.9% in the fourth
quarter of 2022 according to the "advance" estimate released by the Bureau of
Economic Analysis. In the third quarter of 2022, real GDP increased 3.2%. The
fourth quarter 2022 increase primarily reflected increases in inventory
investment and consumer spending that were partly offset by a decrease in
housing investment.

Prompting the Fed to take such a hawkish policy stance is the painfully high
inflation, resulting largely from pandemic-related disruptions to global supply
chains and labor markets, and Russia's invasion of Ukraine, which pushed up oil
and other commodity prices. Adding to the pressure to act is the resilient
growth in jobs, low unemployment in the mid-3s (consistent with full
employment), and overly strong wage growth. The unemployment rate returned to
its post-pandemic low of 3.5%, and it did so even as the labor force expanded by
439,000 and the participation rate edged higher to 62.3%. The unemployment rate
was down or unchanged across most major demographic groups. However, the least
educated workers saw an increase in joblessness from 4.4% to 5%. The Fed
increased the fed funds rate by 50 basis points at the December 2022 meeting of
the Federal Open Market Committee and 25 basis points in each of February 2023
and March 2023. This brings the funds rate target to 5.00%. The Fed also
continues to allow the assets on its balance sheet, including more than $8.3
trillion remaining in Treasury and mortgage-backed securities, to mature and
prepay.

The Inflation Reduction Act was enacted in August 2022, which raises nearly $750
billion over the next decade through higher taxes on large corporations and
wealthy individuals and lower Medicare prescription drug costs, to pay for
nearly $450 billion in tax credits and deductions and additional government
spending to address climate change and lower health insurance premiums for
Americans who benefit from the Affordable Care Act. The remaining more than $300
billion goes to reducing future budget deficits.

In April 2023, global oil prices hovered near $80 per barrel. This reflects the
graceful implementation of the European Union's sanctions on Russian oil and a
price cap on Russian oil imposed by Western nations led by the U.S. Chinese oil
demand has picked up with its economy, but there has been enough supply, at
least so far. The estimated long-run equilibrium price of oil is near $70 per
barrel.

Ten-year Treasury yields have fallen back to near 3.5% given the angst created
by recent bank failures and global investors' flight to quality. Yields are
consistent with Moody's Analytics' estimate of nominal potential GDP growth of
4% (2% long-run inflation plus 2% real potential GDP growth). Moody's expects
yields to hover near 4% for the foreseeable future.

Employment

The national unemployment rate remained unchanged at 3.5% in March 2023. The
number of unemployed individuals increased slightly to 5.8 million in March
2023. Both measures have shown little net movement since early 2022. Total
employment increased by 236,000 in March 2023, compared with the average monthly
gain of 334,000 over the prior 6 months. In March 2023, employment continued to
trend up in leisure and hospitality, government, professional and business
services, and health care. Unemployment levels have recovered to pre-pandemic
levels as of February 2020 when the unemployment rate registered at 3.5% and
there were 5.8 million unemployed individuals.

Job cuts occurred in technology, warehousing and storage, building material,
garden equipment, supplies dealers, furniture, home furnishings, electronics,
and appliance retailers.

As of March 2023, the labor force participation rate (the share of working-age
Americans employed or actively looking for a job) remained little changed at
62.6%. Based on March 2023 information, the unemployment rate for the Midwest,
where the Company conducts most of its business, has decreased from 3.6% in
March 2022 to 3.4% in March 2023. Unemployment rates for March 2023 in the
states where the Company has a branch or a loan production office were Arizona
at 3.5%, Arkansas at 3.0%, Colorado at 2.8%, Georgia at 3.1%, Illinois at 4.4%,
Iowa at 2.8%, Kansas at 2.9%, Minnesota at 2.8%, Missouri at 2.5%, Nebraska at
2.1%, North Carolina at 3.5%, Oklahoma at 3.0%, and Texas at 4.0%. Of the
metropolitan areas in which the Company does business, most are below the
national unemployment rate of 3.5% for March 2023, with the major outlier being
Chicago at 4.4%.

                                       34

Single Family Housing

Sales of new single-family houses in March 2023 were at a seasonally adjusted
annual rate of 683,000, according to the estimates released jointly by the U.S.
Census Bureau and Department of Housing and Urban Development. This is 9.6%
above the revised February 2023 rate of 623,000 but is 3.4% below the March 2022
estimate of 707,000.

The median sales price of new houses sold in March 2023 was $449,800, up from
$435,900 in March 2022. The average sales price in March 2023 of $511,800 was up
from $540,000 in March 2022. The seasonally­adjusted estimate of new houses for
sale at the end of March was 432,000. This represents a supply of 7.6 months at
the current sales rate.

National existing-home sales fell 2.4% in March 2023 to a seasonally adjusted
annual rate of 4.44 million. Year-over-year, sales waned 22.0% (down from 5.69
million in March 2022). Existing-home sales in the Midwest retracted 5.5% from
Febraury 2023 to an annual rate of 1.03 million in March 2023, falling 17.6%
from the previous year.

The median existing-home sales price nationally as of March 2023 was $375,700, a
decline of 0.9% from March 2022 ($379,300). The median price in the Midwest was
$273,400, up 1.7% from March 2022.

Nationally, properties on average remained on the market for 29 days in March
2023, down from 34 days in February 2023 but up from 17 days in March 2022.
Sixty-five percent of homes sold in March 2023 were on the market for less than
a month.

Unsold inventory sits at a 2.6-month supply at the current sales pace for March
2023, unchanged from February 2023 but up from 2.0 months in March 2022.

Once overall consumer price inflation calms and rents decelerate from robust
apartment construction, the Federal Reserve's monetary policy may shift from
tightening to neutral to possibly loosening over the next 12 months.

First-time homebuyers accounted for 28% of sales in March 2023, up from 27% in
February 2023 but down from 30% in March 2022.

According to Freddie Mac, the average commitment rate for a 30-year, fixed-rate
mortgage was 6.27% as of April 13, 2023 which is down from 6.28% from the prior
week but up from 5% one year ago.

Other Residential (Multi-Family) Housing and Commercial Real Estate

The multi-family trend of supply outpacing demand continued for the sixth
quarter in a row to start off 2023. Net absorption rebounded into positive
territory after turning negative at the end of 2022, with 42,000 units absorbed.
However, with 109,000 new units delivered during the first quarter of 2023, rent
growth nationally decelerated once again, going from 3.8% at the end of 2022 to
2.2% at March 2023.

Midwest and Northeast markets fared the best over the past 12 months, with rent
growth down marginally. Sun Belt markets have seen significant pull back in
rents over the past 12 months. Phoenix has gone from rent growth rates of 17% to
-1.9%. The downward movement of rents nationally is expected to continue for the
rest of 2023, as the risk of recession hangs over the economy and many markets
are experiencing oversupply conditions.

The supply/demand imbalance has pushed the national vacancy rate up 200 basis
points from an all-time low of 4.7% in the third quarter of 2021 to 6.7% as of
March 31, 2023. CoStar's current forecast is for the national vacancy rate to
finish this year in the mid 7% range, which would be 100 basis points higher
than pre-pandemic levels. As indicated above, absorption in the first quarter of
2023 registered just 42,000 units, which is well below the five-year
pre-pandemic average of 82,000. Tempering of multi-family demand has come from
higher costs due to elevated inflation. Significant rent increases in 2021 and
2022 also are forcing some renter households to find alternative housing
situations, such as returning home to their parents or finding a roommate. Plus,
economic uncertainty continues to hold back household formation, which is
dampening middle market demand.

When demand in the multi-family market spiked in the first year of the pandemic,
developers accelerated plans for new projects. Now two years later, a good
number of those developments are set to deliver in 2023. The national forecast
sits at 519,000 new units to be delivered in 2023, the most new supply to hit
the market since the mid-1980s.

The rising interest rate environment, combined with a pullback in construction
lending, has led some developers nationwide to not move forward on proposed
projects. With fewer projects moving forward, there could be a meaningful pause
in deliveries towards the

                                       35

end of 2024 and into 2025. This pause would be very helpful in allowing many
overbuilt Sun Belt markets to soak up the current supply overhang and return to
equilibrium quicker.

Multi-family continued to be the most sought-after asset type in 2022 despite a
pullback in transaction activity. On the heels of a record-breaking 2021, sales
decreased to $227 billion, representing the second-best year on record. However,
this activity occurred primarily in the first half of 2022 with the second half
of 2022 weakening, posting a 25% decline over the prior six months.

As of March 31, 2023, national multi-family market vacancy rates increased to
6.7%. Our market areas reflected the following apartment vacancy levels as of
March 2023: Springfield, Missouri at 3.7%, St. Louis at 8.9%, Kansas City at
7.8%, Minneapolis at 7.3%, Tulsa, Oklahoma at 8.2%, Dallas-Fort Worth at 8.7 %,
Chicago at 5.6%, Atlanta at 9.6%, Phoenix at 9.1%, Denver at 7.4% and Charlotte,
North Carolina at 9.4%.

Demand for office market space continues its decline. Tenants gave back another
20 million square feet during the first quarter, bringing total net absorption
since the end of 2019 to a staggering -140 million square feet. This propelled
vacancy to a record 12.9%, eclipsing its peak from the Great Recession. There is
every indication that vacancies will continue to rise, especially with 60
million square feet of new supply-the most in a calendar year since
2009-projected to come online by the end of 2023.

As of March 31, 2023, national office vacancy rates increased to 12.8% from
12.7% as of December 31, 2022, while our market areas reflected the following
vacancy levels at March 31, 2023: Springfield, Missouri at 4.2%, St. Louis at
10.2%, Kansas City at 11.6%, Minneapolis at 11.0%, Tulsa, Oklahoma at 11.8%,
Dallas-Fort Worth at 18.0%, Chicago at 15.4%, Atlanta at 14.1%, Denver at 14.8%,
Phoenix at 15.2% and Charlotte, North Carolina at 12.6%.

U.S. retail tenants signed for over 230 million square feet (SF) of retail space
in 2022, which was the second-highest total for any year since 2017. At the same
time, tenants closed just 20 million SF of retail space during 2022, which was
the lowest total recorded since before the Great Recession and a fraction of the
prior five-year average for retail space closed of 114.6 million SF. The
combination of strong leasing volumes and the significant reduction in move-outs
drove net absorption to its highest level in six years in 2022, at 74 million
SF.

Fundamental tightening and rising retail sales pushed retail asking rents upward
at their fastest clip in over a decade in 2022 at 4.1%, with average triple net
asking rents across the U.S. finishing the year at a record high of $24.00/SF.
However, growth has slowed in each of the past two quarters and is forecast to
decelerate further over the coming quarters, while above-average inflation is
expected to continue to weigh on the real rate of rent growth, keeping it below
historical norms for the foreseeable future.

During the first quarter of 2023, national retail vacancy rates remained steady
at 4.2% while our market areas reflected the following vacancy levels:
Springfield, Missouri at 3.4%, St. Louis at 5.0%, Kansas City at 4.2%,
Minneapolis at 3.1%, Tulsa, Oklahoma at 3.0%, Dallas-Fort Worth at 4.6%, Chicago
at 5.4%, Atlanta at 3.7%, Phoenix at 5.0%, Denver at 4.1%, and Charlotte, North
Carolina at 3.2%.

U.S. industrial market performance is slowing down heading into mid-2023. While
the national vacancy rate is expected to remain below its 20-year average of
7.3%, the next six to 12 months could still prove to be one of the more
challenging periods for the market over the next five years.

Oncoming new supply is all but certain to push the national vacancy rate up
during 2023. CoStar is tracking 619 million SF of projects under construction,
most of which are unleased and set to be completed in 2023. The national vacancy
rate has already begun to inch up in recent quarters and rent growth is slowing
from the peak of 3% quarterly growth reached in mid-2022. Further deceleration
in rent growth seems unavoidable in 2023, given that landlords will be
contending with a record amount of speculative development, at a time when
2022's sharp interest rate increases will likely still be weighing on the macro
economy.

At March 31, 2023, national industrial vacancy rates increased to 4.5% from 4.2%
as of December 31, 2022. Our market areas reflected the following vacancy
levels: Springfield, Missouri at 1.2%, St. Louis at 4.4%, Kansas City at 3.8%,
Minneapolis at 2.9%, Tulsa, Oklahoma at 4.0%, Dallas-Fort Worth at 6.4%, Chicago
at 4.0%, Atlanta at 4.3%, Phoenix at 4.1%, Denver at 6.7% and Charlotte, North
Carolina at 4.8%.

Our management will continue to monitor regional, national, and global economic
indicators such as unemployment, GDP, housing starts and prices, consumer
sentiment, commercial real estate price index and commercial real estate
occupancy, absorption and rental rates, as these could significantly affect
customers in each of our market areas.

                                       36

COVID-19 Impact to Our Business and Response

Great Southern continues to monitor and respond to the effects of the COVID-19
pandemic. As always, the health, safety and well-being of our customers,
associates and communities, while maintaining uninterrupted service, are the
Company's top priorities. Centers for Disease Control and Prevention (CDC)
guidelines, as well as directives from federal, state and local officials, are
being closely followed to make informed operational decisions, if necessary.

Customers can conduct their banking business using our banking center network,
online and mobile banking services, ATMs, Telephone Banking, and online account
opening services.

COVID-19 infection rates currently are relatively low in our markets and the CDC
has relaxed most restrictions that were previously in place. In some cases those
restrictions have been replaced with recommendations. Also, states and local
municipalities may restrict certain activities from time to time. Our business
is currently operating normally, similar to operations prior to the onset of the
COVID-19 pandemic. We continue to monitor infection rates and other health and
economic indicators to ensure we are prepared to respond to future challenges,
should they arise.

General

The profitability of the Company and, more specifically, the profitability of
its primary subsidiary, the Bank, depends primarily on its net interest income,
as well as provisions for credit losses and the level of non-interest income and
non-interest expense. Net interest income is the difference between the interest
income the Bank earns on its loans and investment portfolios, and the interest
it pays on interest-bearing liabilities, which consists mainly of interest paid
on deposits and borrowings. Net interest income is affected by the relative
amounts of interest-earning assets and interest-bearing liabilities and the
interest rates earned or paid on these balances. When interest-earning assets
approximate or exceed interest-bearing liabilities, any positive interest rate
spread will generate net interest income.

Great Southern's total assets increased $88.0 million, or 1.5%, from $5.68
billion at December 31, 2022, to $5.77 billion at March 31, 2023. Details of the
current period changes in total assets are provided below, under "Comparison of
Financial Condition at March 31, 2023 and December 31, 2022."

Loans. Net outstanding loans increased $62.5 million, or 1.4%, from $4.51
billion at December 31, 2022, to $4.57 billion at March 31, 2023. The increase
was primarily in other residential (multi-family) loans and commercial real
estate loans. These increases were partially offset by a decrease in
construction loans. As loan demand is affected by a variety of factors,
including general economic conditions, and because of the competition we face
and our focus on pricing discipline and credit quality, we cannot be assured
that our loan growth will match or exceed the average level of growth achieved
in prior years. The Company's strategy continues to be focused on maintaining
credit risk and interest rate risk at appropriate levels.

Recent growth has occurred in some loan types, primarily other residential
(multi-family), commercial real estate and one- to four family residential real
estate, and in most of Great Southern's primary lending locations, including
Springfield, St. Louis, Kansas City, Des Moines and Minneapolis, as well as our
loan production offices in Atlanta, Charlotte, Chicago, Dallas, Denver, Omaha,
Phoenix and Tulsa. Certain minimum underwriting standards and monitoring help
assure the Company's portfolio quality. All new loan originations that exceed
lender approval authorities are subject to review and approval by Great
Southern's loan committee. Generally, the Company considers commercial
construction, consumer, other residential (multi-family) and commercial real
estate loans to involve a higher degree of risk compared to some other types of
loans, such as first mortgage loans on one- to four-family, owner-occupied
residential properties. For other residential (multi-family), commercial real
estate, commercial business and construction loans, the credits are subject to
an analysis of the borrower's and guarantor's financial condition, credit
history, verification of liquid assets, collateral, market analysis and
repayment ability. It has been, and continues to be, Great Southern's practice
to verify information from potential borrowers regarding assets, income or
payment ability and credit ratings as applicable and as required by the
authority approving the loan. To minimize construction risk, projects are
monitored as construction draws are requested by comparison to budget and with
progress verified through property inspections. The geographic and product
diversity of collateral, equity requirements and limitations on speculative
construction projects help to mitigate overall risk in these loans. Underwriting
standards for all loans also include loan-to-value ratio limitations which vary
depending on collateral type, debt service coverage ratios or debt payment to
income ratio guidelines, where applicable, credit histories, use of guaranties
and other recommended terms relating to equity requirements, amortization, and
maturity. Consumer loans, other than home equity loans, are primarily secured by
new or used motor vehicles and these loans are also subject to certain minimum
underwriting standards to assure portfolio quality. In 2019, the Company
discontinued indirect auto loan originations.

                                       37

While our policy allows us to lend up to 95% of the appraised value on one-to
four-family residential properties, originations of loans with loan-to-value
ratios at that level are minimal. Private mortgage insurance is typically
required for loan amounts above the 80% level. Few exceptions occur and would be
based on analyses which determined minimal transactional risk to be involved. We
consider these lending practices to be consistent with or more conservative than
what we believe to be the norm for banks our size. At both March 31, 2023 and
December 31, 2022, 0.2% of our owner occupied one-to four-family residential
loans had loan-to-value ratios above 100% at origination and an estimated 0.2%
of total non-owner occupied one- to four-family residential loans had
loan-to-value ratios above 100% at origination.

The level of non-performing loans and foreclosed assets affects our net interest
income and net income. We generally do not accrue interest income on these loans
and do not recognize interest income until the loans are repaid or interest
payments have been made for a period of time sufficient to provide evidence of
performance on the loans. Generally, the higher the level of non-performing
assets, the greater the negative impact on interest income and net income.

The Company continues its preparation for discontinuation of use of interest
rates such as LIBOR. LIBOR is a benchmark interest rate referenced in a variety
of agreements used by the Company, but by far the most significant area impacted
by LIBOR is related to commercial and residential mortgage loans. Certain LIBOR
rates are no longer published and it is expected that all LIBOR rates will be
discontinued as reference rates by June 30, 2023. Other interest rates used
globally could be discontinued for similar reasons.

The Company has been regularly monitoring its portfolio of loans tied to LIBOR
since 2019, with specific groups of loans identified. The Company implemented
LIBOR fallback language for all commercial loan transactions near the end of
2018, with such language utilized for all commercial loan originations and
renewals/modifications since that time. The Company is monitoring the remaining
group of loans that were originated prior to the fourth quarter of 2018, and
have not been renewed or modified since that time. At March 31, 2023, this
represented approximately 23 commercial loans totaling approximately $21
million; however, only 14 of those loans, totaling $860 thousand, mature after
June 2023 (the date upon which the LIBOR indices used by the Company are
expected to no longer be available). The Company also has a portfolio of
residential mortgage loans tied to LIBOR indices with standard index replacement
language included (approximately $351 million at March 31, 2023), and that
portfolio is being monitored for potential changes that may be facilitated by
the mortgage industry. The vast majority of the loan portfolio tied to LIBOR now
includes LIBOR replacement language that identifies "trigger" events for the
cessation of LIBOR and the steps that the Company will take upon the occurrence
of one or more of those events, including adjustments to any rate margin to
ensure that the replacement interest rate on the loan is substantially similar
to the previous LIBOR-based rate.

Available-for-sale Securities. In the three months ended March 31, 2023,
available-for-sale securities increased $2.7 million, or 0.6%, from $490.6
million at December 31, 2022, to $493.3 million at March 31, 2023.

Held-to-maturity Securities. In the three months ended March 31, 2023,
held-to-maturity securities decreased $2.1 million, or 1.0%, from $202.5 million
at December 31, 2022, to $200.4 million at March 31, 2023.

Deposits. The Company attracts deposit accounts through its retail branch
network, correspondent banking and corporate services areas, internet channels
and brokered deposits. The Company then utilizes these deposit funds, along with
FHLBank advances and other borrowings, to meet loan demand or otherwise fund its
activities. In the three months ended March 31, 2023, total deposit balances
increased $114.2 million, or 2.4%. Compared to December 31, 2022, transaction
account balances decreased $26.3 million, or 0.8%, to $3.23 billion at March 31,
2023, while retail certificates of deposit increased $14.9 million, or 1.5%, to
$1.04 billion at March 31, 2023. The decrease in transaction accounts was
primarily a result of a decrease in non-interest-bearing accounts and various
NOW accounts, as small businesses and individuals appear to be drawing down
their balances to pay for goods and services, or are seeking a higher-yielding
alternative. Retail time deposits increased due to an increase in retail
certificates generated through the banking center network, partially offset by
decreases in national time deposits initiated through internet channels. Time
deposits initiated through internet channels are no longer a significant part of
the Company's total deposits. Brokered deposits, including IntraFi program
purchased funds, were $537.0 million and $411.5 million at March 31, 2023 and
December 31, 2022, respectively. The Company uses brokered deposits of select
maturities from time to time to supplement its various funding channels and to
manage interest rate risk.

Our deposit balances may fluctuate depending on customer preferences and our
relative need for funding. We do not consider our retail certificates of deposit
to be guaranteed long-term funding because customers can withdraw their funds at
any time with minimal interest penalty. When loan demand trends upward, we can
increase rates paid on deposits to attract more deposits and utilize brokered
deposits to obtain additional funding. The level of competition for deposits in
our markets is high. It is our goal to gain deposit market share, particularly
checking accounts, in our branch footprint. To accomplish this goal, increasing
rates to attract deposits may be necessary, which could negatively impact the
Company's net interest margin.

                                       38

Our ability to fund growth in future periods may also depend on our ability to
continue to access brokered deposits and FHLBank advances. In times when our
loan demand has outpaced our generation of new deposits, we have utilized
brokered deposits and FHLBank advances to fund these loans. These funding
sources have been attractive to us because we can create either fixed or
variable rate funding, as desired, which more closely matches the interest rate
nature of much of our loan portfolio. It also gives us greater flexibility in
increasing or decreasing the duration of our funding. While we do not currently
anticipate that our ability to access these sources will be reduced or
eliminated in future periods, if this should happen, the limitation on our
ability to fund additional loans could have a material adverse effect on our
business, financial condition and results of operations. See "Results of
Operations and Comparison for the Three Months Ended March 31, 2023 and 2022 -
Liquidity" below for further information on funding sources.

Securities sold under reverse repurchase agreements with customers. Securities
sold under reverse repurchase agreements with customers decreased $106.1 million
from $176.8 million at December 31, 2022 to $70.7 million at March 31, 2023.
These balances fluctuate over time based on customer demand for this product.

Short-term borrowings and other interest-bearing liabilities. The Company's
FHLBank term advances were $-0- at both March 31, 2023 and December 31, 2022. At
March 31, 2023 there were $154.5 million in overnight borrowings from the
FHLBank, which are included in short term borrowings. At December 31, 2022 there
were $88.5 million in overnight borrowings from the FHLBank.

Short term borrowings and other interest-bearing liabilities increased $66.1
million from $89.6 million at December 31, 2022 to $155.7 million at March 31,
2023. The Company may utilize both overnight borrowings and short-term FHLBank
advances depending on relative interest rates.

Net Interest Income and Interest Rate Risk Management. Our net interest income
may be affected positively or negatively by changes in market interest rates. A
large portion of our loan portfolio is tied to one-month LIBOR/SOFR, three-month
LIBOR or the "prime rate" and adjusts immediately or shortly after the index
rate adjusts (subject to the effect of contractual interest rate floors on some
of the loans, which are discussed below). We monitor our sensitivity to interest
rate changes on an ongoing basis (see "Item 3. Quantitative and Qualitative
Disclosures About Market Risk").

The current level and shape of the interest rate yield curve poses challenges
for interest rate risk management. Prior to its increase of 0.25% on December
16, 2015, the FRB had last changed interest rates on December 16, 2008. This was
the first rate increase since September 29, 2006. The FRB also implemented rate
change increases of 0.25% on eight additional occasions beginning December 14,
2016 and through December 31, 2018, with the Federal Funds rate reaching as high
as 2.50%. After December 2018, the FRB paused its rate increases and, in July,
September and October 2019, implemented rate decreases of 0.25% on each of those
occasions. At December 31, 2019, the Federal Funds rate stood at 1.75%. In
response to the COVID-19 pandemic, the FRB decreased interest rates on two
occasions in March 2020, a 0.50% decrease on March 3 and a 1.00% decrease on
March 16. At December 31, 2021, the Federal Funds rate was 0.25%. In 2022, the
FRB implemented rate increases of 0.25%, 0.50%, 0.75%, 0.75%, 0.75%, 0.75% and
0.50% in March, May, June, July, September, November and December 2022,
respectively. At December 31, 2022, the Federal Funds rate was 4.50%. In 2023,
the FRB implemented rate increases of 0.25% and 0.25% in February and March
2023, respectively. At March 31, 2023 the Federal Funds rate was 5.00%.
Financial markets expect the possibility of further increases in Federal Funds
interest rates in the first half of 2023, with 0.25-0.50% of additional
cumulative rate hikes currently anticipated. A substantial portion of Great
Southern's loan portfolio ($868.8 million at March 31, 2023) is tied to the
one-month or three-month LIBOR index and will be subject to adjustment at least
once within 90 days after March 31, 2023. Of these loans, $868.5 million had
interest rate floors. Great Southern's loan portfolio also includes loans
($693.4 million at March 31, 2023) tied to various SOFR indexes that will be
subject to adjustment at least once within 90 days after March 31, 2023. Of
these loans, $693.4 million had interest rate floors. Great Southern also has a
portfolio of loans ($738.6 million at March 31, 2023) tied to a "prime rate" of
interest that will adjust immediately or within 90 days of a change to the
"prime rate" of interest. Of these loans, $725.8 million had interest rate
floors at various rates. Great Southern also has a portfolio of loans ($6.7
million at March 31, 2023) tied to an AMERIBOR index that will adjust
immediately or within 90 days of a change to the "prime rate" of interest. Of
these loans, $6.7 million had interest rate floors at various rates. At March
31, 2023, nearly all of these LIBOR/SOFR and "prime rate" loans had
fully-indexed rates that were at or above their floor rate and so are expected
to move fully with future market interest rate increases.

                                       39

A rate cut by the FRB generally would have an anticipated immediate negative
impact on the Company's net interest income due to the large total balance of
loans tied to the one-month or three-month LIBOR index, SOFR indices or the
"prime rate" index and will be subject to adjustment at least once within 90
days or loans which generally adjust immediately as the Federal Funds rate
adjusts. Interest rate floors may at least partially mitigate the negative
impact of interest rate decreases. Loans at their floor rates are, however,
subject to the risk that borrowers will seek to refinance elsewhere at the lower
market rate. There may also be a negative impact on the Company's net interest
income if the Company is unable to significantly lower its funding costs due to
a highly competitive rate environment, although interest rates on assets may
decline further. Conversely, market interest rate increases would normally
result in increased interest rates on our LIBOR-based, SOFR-based and
prime-based loans.

As of March 31, 2023, Great Southern's interest rate risk models indicate that,
generally, rising interest rates are expected to have a positive impact on the
Company's net interest income, while declining interest rates are expected to
have a negative impact on net interest income. We model various interest rate
scenarios for rising and falling rates, including both parallel and non-parallel
shifts in rates. The results of our modeling indicate that net interest income
is not likely to be significantly affected either positively or negatively in
the first twelve months following relatively minor changes in market interest
rates because our portfolios are relatively well-matched in a twelve-month
horizon.

In a situation where market interest rates increase significantly in a short
period of time, our net interest margin increase may be more pronounced in the
very near term (first one to three months), due to fairly rapid increases in
LIBOR interest rates, SOFR interest rates and "prime" interest rates. In a
situation where market interest rates decrease significantly in a short period
of time, as they did in March 2020, our net interest margin decrease may be more
pronounced in the very near term (first one to three months), due to fairly
rapid decreases in LIBOR interest rates, SOFR interest rates and "prime"
interest rates. In the subsequent months, we expect that the net interest margin
would stabilize and begin to improve, as renewal interest rates on maturing time
deposits are expected to decrease compared to the current rates paid on those
products.

During 2020, we did experience some compression of our net interest margin
percentage due to 2.25% of Federal Fund rate cuts during the nine month period
of July 2019 through March 2020. Margin compression primarily resulted from
changes in the asset mix, mainly the addition of lower-yielding assets and the
issuance of subordinated notes during 2020 and the net interest margin remained
lower than our historical average in 2021. LIBOR interest rates decreased
significantly in 2020 and remained very low in 2021, putting pressure on loan
yields, and strong pricing competition for loans and deposits remains in most of
our markets.

Beginning in March 2022, market interest rates, including LIBOR interest rates,
SOFR interest rates and "prime" interest rates, began to increase rapidly. This
has resulted in increasing loan yields and expansion of our net interest income
and net interest margin. In 2023, market interest rate increases have moderated
and loan yield increases have also moderated in line with market rates. However,
there has been increased competition for deposits and other sources of funding,
resulting in higher costs for those funds. This has been especially true since
early March 2023. For further discussion of the processes used to manage our
exposure to interest rate risk, see "Item 3. Quantitative and Qualitative
Disclosures About Market Risk - How We Measure the Risks to Us Associated with
Interest Rate Changes."

Non-Interest Income and Non-Interest (Operating) Expenses. The Company's
profitability is also affected by the level of its non-interest income and
operating expenses. Non-interest income consists primarily of service charges
and ATM fees, POS interchange fees, late charges and prepayment fees on loans,
gains on sales of loans and available-for-sale investments and other general
operating income. Non-interest income may also be affected by the Company's
interest rate derivative activities, if the Company chooses to implement
derivatives. See Note 16 "Derivatives and Hedging Activities" in the Notes to
Consolidated Financial Statements included in this report.

Operating expenses consist primarily of salaries and employee benefits,
occupancy-related expenses, expenses related to foreclosed assets, postage, FDIC
deposit insurance, advertising and public relations, telephone, professional
fees, office expenses and other general operating expenses. Details of the
current period changes in non-interest income and non-interest expense are
provided below, under "Results of Operations and Comparison for the Three Months
Ended March 31, 2023 and 2022."

Effect of Federal Laws and Regulations

General. Federal legislation and regulation significantly affect the operations
of the Company and the Bank, and have increased competition among commercial
banks, savings institutions, mortgage banking enterprises and other financial
institutions. In particular, the capital requirements and operations of
regulated banking organizations such as the Company and the Bank have been and
will be subject to changes in applicable statutes and regulations from time to
time, which changes could, under certain circumstances, adversely affect the
Company or the Bank.

                                       40

Dodd-Frank Act. In 2010, sweeping financial regulatory reform legislation
entitled the "Dodd-Frank Wall Street Reform and Consumer Protection Act" (the
"Dodd-Frank Act") was signed into law. The Dodd-Frank Act implemented
far-reaching changes across the financial regulatory landscape. Certain aspects
of the Dodd-Frank Act have been affected by the more recently enacted Economic
Growth Act, as defined and discussed below under "-Economic Growth Act."

Capital Rules. The federal banking agencies have adopted regulatory capital
rules that substantially amend the risk-based capital rules applicable to the
Bank and the Company. The rules implement the "Basel III" regulatory capital
reforms and changes required by the Dodd-Frank Act. "Basel III" refers to
various documents released by the Basel Committee on Banking Supervision. For
the Company and the Bank, the general effective date of the rules was January 1,
2015, and, for certain provisions, various phase-in periods and later effective
dates apply. The chief features of these rules are summarized below.

The rules refine the definitions of what constitutes regulatory capital and add
a new regulatory capital element, common equity Tier 1 capital. The minimum
capital ratios are (i) a common equity Tier 1 ("CET1") risk-based capital ratio
of 4.5%; (ii) a Tier 1 risk-based capital ratio of 6%; (iii) a total risk-based
capital ratio of 8%; and (iv) a Tier 1 leverage ratio of 4%. In addition to the
minimum capital ratios, the rules include a capital conservation buffer, under
which a banking organization must have CET1 more than 2.5% above each of its
minimum risk-based capital ratios in order to avoid restrictions on paying
dividends, repurchasing shares, and paying certain discretionary bonuses. The
capital conservation buffer became fully implemented on January 1, 2019.

These rules also revised the prompt corrective action framework, which is
designed to place restrictions on insured depository institutions if their
capital levels show signs of weakness. Under the revised prompt corrective
action requirements, insured depository institutions are required to meet the
following in order to qualify as "well capitalized:" (i) a common equity Tier 1
risk-based capital ratio of at least 6.5%, (ii) a Tier 1 risk-based capital
ratio of at least 8%, (iii) a total risk-based capital ratio of at least 10% and
(iv) a Tier 1 leverage ratio of 5%, and must not be subject to an order,
agreement or directive mandating a specific capital level.

Economic Growth Act. In May 2018, the Economic Growth, Regulatory Relief, and
Consumer Protection Act (the "Economic Growth Act"), was enacted to modify or
eliminate certain financial reform rules and regulations, including some
implemented under the Dodd-Frank Act.

The Economic Growth Act, among other matters, expands the definition of
qualified mortgages which may be held by a financial institution and simplifies
the regulatory capital rules for financial institutions and their holding
companies with total consolidated assets of less than $10 billion by instructing
the federal banking regulators to establish a single "Community Bank Leverage
Ratio" ("CBLR") of between 8 and 10 percent. Any qualifying depository
institution or its holding company that exceeds the CBLR will be considered to
have met generally applicable leverage and risk-based regulatory capital
requirements and any qualifying depository institution that exceeds the new
ratio will be considered "well-capitalized" under the prompt corrective action
rules. Currently, the CBLR is 9.0%. The Company and the Bank have chosen to not
utilize the new CBLR due to the Company's size and complexity, including its
commercial real estate and construction lending concentrations and significant
off-balance sheet funding commitments.

In addition, the Economic Growth Act includes regulatory relief in the areas of
examination cycles, call reports, mortgage disclosures and risk weights for
certain high-risk commercial real estate loans.

Business Initiatives

In January 2023, a high-transaction-volume banking center located at 1615 West
Sunshine Street in Springfield, Missouri, was razed to make way for a new
Express Center, which will use only interactive teller machine (ITM) technology
to serve customers. The modern four-lane drive-up center is expected to open
during the third quarter of 2023 and will be the first-of-its-kind in the
Springfield market. ITMs, also known as video remote tellers, offer an ATM-like
interface, but with the enhancement of a video screen that allows customers to
speak directly to a service representative in real time and in a highly personal
manner. Nearly any teller transaction that can be performed in the traditional
drive-thru can be performed at an ITM, including cashing a check to the penny.
ITMs provide convenience and enhanced access for customers, while creating
greater operational efficiencies for the Bank.

A leased banking center office at 1232 S. Rangeline Road in Joplin, Missouri,
was consolidated into a nearby office at 2801 E. 32nd Street. The leased office
was closed at the end of the business day on March 17, 2023, leaving one banking
center serving the Joplin market.

During 2023, the Great Southern team is preparing to convert to a new core
banking platform and ancillary systems, delivered by a third party vendor. This
upgrade in the operational platform is expected to provide new and advanced
tools and access to more meaningful information to better serve customers. The
migration to the new system is expected to occur in mid-2024. As significant
preliminary work was completed in 2022 and early 2023, it was determined to
extend the conversion timeline from third quarter 2023

                                       41

to allow for further system testing related to some of our more
highly-customized applications and products and to accommodate certain
functionality enhancements to the platform.

The Company announced that its 2023 Annual Meeting of Stockholders, to be held
at 10 a.m. Central Time on May 10, 2023, will be a virtual meeting over the
internet and will not be held at a physical location. Stockholders will be able
to attend the Annual Meeting via a live webcast. Holders of record of Great
Southern Bancorp, Inc. common stock at the close of business on the record date,
March 1, 2023, may vote during the live webcast of the Annual Meeting or by
proxy. Please see the Company's Notice of Annual Meeting and Proxy Statement
available on the Company's website, www.GreatSouthernBank.com, (click "About"
then "Investor Relations") for additional information about the virtual meeting.

Comparison of Financial Condition at March 31, 2023 and December 31, 2022

During the three months ended March 31, 2023, the Company's total assets
increased by $88.0 million to $5.77 billion. The increase was primarily in loans
and interest-bearing deposits in other financial institutions.

Cash and cash equivalents were $184.7 million at March 31, 2023, an increase of
$16.2 million, or 9.6%, from $168.5 million at December 31, 2022.

The Company's available-for-sale securities increased $2.7 million, or 0.6%,
compared to December 31, 2022. The increase was primarily due to an increase in
the market value of these available-for-sale securities, partially offset by
normal monthly payments received related to the portfolio of mortgage-backed
securities and collateralized mortgage obligations. The available-for-sale
securities portfolio was 8.6% of total assets at both March 31, 2023 and
December 31, 2022.

Held-to-maturity securities were $200.4 million at March 31, 2023, a decrease of
$2.1 million, or 1.0%, from $202.5 million at December 31, 2022. The
held-to-maturity securities portfolio was 3.5% and 3.6% of total assets at March
31, 2023 and December 31, 2022, respectively.

Net loans increased $62.5 million from December 31, 2022, to $4.57 billion at
March 31, 2023. This increase was primarily in other residential (multi-family)
loans ($104 million increase) and commercial real estate loans ($30 million
increase). These increases were partially offset by a decrease in commercial
construction loans ($61 million decrease). Loan origination volume in the three
months ended March 31, 2023 significantly decreased compared to the origination
volume that occurred in 2021 and most of 2022; however, the pace of loan payoffs
prior to maturity has slowed in the latter half of 2022 and into 2023 due to the
significant increase in market rates of interest.

Total liabilities increased $65.6 million, from $5.15 billion at December 31,
2022 to $5.21 billion at March 31, 2023, primarily due to increases in brokered
deposits and short-term borrowings from FHLBank. This was partially offset by a
reduction in non-interest bearing checking accounts and national time deposits
initiated through internet channels. Time deposits initiated through internet
channels experienced a planned decrease as part of the Company's balance sheet
management between funding sources. In addition, securities sold under reverse
repurchase agreements decreased $106 million in the three months ended March 31,
2023.

Total deposits increased $114.2 million, or 2.4%, to $4.80 billion at March 31,
2023. Transaction account balances decreased $26.3 million, from $3.25 billion
at December 31, 2022 to $3.23 billion at March 31, 2023. Retail certificates of
deposit increased $14.9 million compared to December 31, 2022, to $1.04 billion
at March 31, 2023. Total interest-bearing checking accounts increased $45.8
million while non-interest-bearing checking accounts decreased $72.1 million.
Customer retail time deposits initiated through our banking center network
increased $36.7 million and time deposits initiated through our national
internet network decreased $19.8 million. The increase in customer retail time
deposits initiated through the banking center network was primarily due to
targeted promotions that started in late June 2022 and continued from time to
time into the first three months of 2023. Brokered deposits increased $125.5
million to $537.0 million at March 31, 2023, compared to $411.5 million at
December 31, 2022. Brokered deposits were utilized to fund growth in outstanding
loans and to offset reductions in balances in other deposit categories. The
Company has the capacity to further expand its use of brokered deposits if it
chooses to do so.

The Company's term Federal Home Loan Bank advances were $-0- at both March 31,
2023 and December 31, 2022. At March 31, 2023 and December 31, 2022 there were
overnight borrowings from the FHLBank, which are included in the short term
borrowings category.

Securities sold under reverse repurchase agreements with customers decreased
$106.1 million from $176.8 million at December 31, 2022 to $70.7 million at
March 31, 2023. These balances fluctuate over time based on customer demand

for
this product. In March

                                       42

2023, some customers elected to move funds from these repurchase accounts into
other types of deposit accounts that included deposit insurance coverage through
the IntraFi deposit program.

Short-term borrowings and other interest-bearing liabilities increased $66.1
million from $89.6 million at December 31, 2022 to $155.7 million at March 31,
2023. At March 31, 2023, $154.5 million of this total was overnight borrowings
from the FHLBank, which was used to fund increases in outstanding loans.

Total stockholders' equity increased $22.4 million, from $533.1 million at
December 31, 2022 to $555.5 million at March 31, 2023. Accumulated other
comprehensive loss decreased $11.9 million during the three months ended March
31, 2023, primarily due to increases in the fair value of available-for-sale
investment securities and the fair value of cash flow hedges, as a result of
decreased market interest rates. Stockholders'equity also increased due to net
income of $20.5 million for the three months ended March 31, 2023 and a $470,000
increase in stockholders' equity due to stock option exercises. Partially
offsetting these increases were repurchases of the Company's common stock
totaling $5.6 million and dividends declared on common stock of $4.9 million.

Results of Operations and Comparison for the Three Months Ended March 31, 2023
and 2022

General

Net income was $20.5 million for the three months ended March 31, 2023 compared
to $17.0 million for the three months ended March 31, 2022. This increase of
$3.5 million, or 20.4%, was primarily due to an increase in net interest income
of $9.9 million, or 22.9%, partially offset by an increase in non-interest
expense of $3.2 million, or 10.2%, a decrease in non-interest income of $1.3
million, or 14.0%, an increase in income tax expense of $1.1 million, or 25.3%,
and an increase in provision for credit losses on loans and unfunded commitments
of $867,000, or 449.2%.

Total Interest Income

Total interest income increased $24.8 million, or 53.1%, during the three months
ended March 31, 2023 compared to the three months ended March 31, 2022. The
increase was due to a $22.4 million increase in interest income on loans and a
$2.4 million increase in interest income on investment securities and other
interest-earning assets. Interest income from loans, investment securities and
other interest-earning assets increased during the three months ended March 31,
2023 compared to the same period in 2022 due to higher average balances and
higher average rates of interest.

Interest Income - Loans

During the three months ended March 31, 2023 compared to the three months ended
March 31, 2022, interest income on loans increased $16.9 million due to higher
average interest rates on loans. The average yield on loans increased from 4.23%
during the three months ended March 31, 2022, to 5.76% during the three months
ended March 31, 2023. This increase was primarily due to the repricing of
floating rate loans in the second half of 2022 and into 2023 as market interest
rates increased significantly. Interest income on loans also increased $5.5
million as the result of higher average loan balances, which increased from
$4.13 billion during the three months ended March 31, 2022, to $4.61 billion
during the three months ended March 31, 2023. The Company continued to originate
loans at a pace similar to prior periods through the first nine months of 2022,
and overall loan repayments slowed in 2022 and 2023 compared to the level of
repayments in 2021.

In October 2018, the Company entered into an interest rate swap transaction as
part of its ongoing interest rate management strategies to hedge the risk of its
floating rate loans. The notional amount of the swap was $400 million with a
contractual termination date in October 2025. As previously disclosed by the
Company, in March 2020, the Company and its swap counterparty mutually agreed to
terminate the $400 million notional interest rate swap prior to its contractual
maturity. The Company was paid $45.9 million from its swap counterparty as a
result of this termination. This $45.9 million, less the accrued to date
interest portion and net of deferred income taxes, is reflected in the Company's
stockholders' equity as Accumulated Other Comprehensive Income and is being
accreted to interest income on loans monthly through the original contractual
termination date of October 6, 2025. This has the effect of reducing Accumulated
Other Comprehensive Income and increasing Net Interest Income and Retained
Earnings over the periods. The Company recorded interest income related to the
interest rate swap of $2.0 million in each of the three months ended March 31,
2023 and 2022. At March 31, 2023, the Company expected to have a sufficient
amount of eligible variable rate loans to continue to accrete this interest
income ratably in future periods. If this expectation changes and the amount of
eligible variable rate loans decreases significantly, the Company may be
required to recognize this interest income more rapidly.

In March 2022, the Company entered into an interest rate swap transaction as
part of its ongoing interest rate management strategies to hedge the risk of its
floating rate loans. The notional amount of the swap is $300 million with an
effective date of March 1, 2022 and a

                                       43

termination date of March 1, 2024. Under the terms of the swap, the Company will
receive a fixed rate of interest of 1.6725% and will pay a floating rate of
interest equal to one-month USD-LIBOR (or the equivalent replacement rate if
USD-LIBOR rate is not available). The floating rate resets monthly and net
settlements of interest due to/from the counterparty also occur monthly. The
initial floating rate of interest was set at 0.2414%. To the extent that the
fixed rate of interest exceeds one-month USD-LIBOR, the Company will receive net
interest settlements, which will be recorded as loan interest income. If
one-month USD-LIBOR exceeds the fixed rate of interest, the Company will be
required to pay net settlements to the counterparty and will record those net
payments as a reduction of interest income on loans. The Company recorded a
reduction in loan interest income related to this swap transaction of $2.2
million in the three months ended March 31, 2023 and loan interest income
related to this swap transaction of $370,000 in the three months ended March 31,
2022. At April 1, 2023, the one-month USD-LIBOR rate on this interest rate swap
was 4.85771%.

In July 2022, the Company entered into two interest rate swap transactions as
part of its ongoing interest rate management strategies to hedge the risk of its
floating rate loans. The notional amount of each swap is $200 million with an
effective date of May 1, 2023 and a termination date of May 1, 2028. Under the
terms of one swap, beginning in May 2023, the Company will receive a fixed rate
of interest of 2.628% and will pay a floating rate of interest equal to
one-month USD-SOFR OIS. Under the terms of the other swap, beginning in May
2023, the Company will receive a fixed rate of interest of 5.725% and will pay a
floating rate of interest equal to one-month USD-Prime. In each case, the
floating rate will be reset monthly and net settlements of interest due to/from
the counterparty will also occur monthly. To the extent the fixed rate of
interest exceeds the floating rate of interest, the Company will receive net
interest settlements, which will be recorded as loan interest income. If the
floating rate of interest exceeds the fixed rate of interest, the Company will
be required to pay net settlements to the counterparty and will record those net
payments as a reduction of interest income on loans. At March 31, 2023, the
USD-Prime rate was 8.00% and the one-month USD-SOFR OIS rate was 4.62101%.

Interest Income - Investments and Other Interest-earning Assets

Interest income on investments increased $1.6 million in the three months ended
March 31, 2023 compared to the three months ended March 31, 2022. Interest
income increased $1.2 million as a result of an increase in average balances
from $534.0 million during the three months ended March 31, 2022, to $706.9
million during the three months ended March 31, 2023. Average balances of
securities increased primarily due to purchases of agency multi-family
mortgage-backed securities which have a fixed rate of interest with expected
lives of four to ten years, which fits with the Company's current
asset/liability management strategies. Interest income increased $400,000 as a
result of higher average interest rates from 2.59% during the three months ended
March 31, 2022, to 2.87% during the three month period ended March 31, 2023.

Interest income on other interest-earning assets increased $823,000 in the three
months ended March 31, 2023 compared to the three months ended March 31, 2022.
Interest income increased $850,000 as a result of higher average interest rates
from 0.18% during the three months ended March 31, 2022, to 4.51% during the
three months ended March 31, 2023. Partially offsetting that increase, interest
income decreased $27,000 as a result of a decrease in average balances from
$458.6 million during the three months ended March 31, 2022, to $91.8 million
during the three months ended March 31, 2023. The increase in the average
interest rates was due to the increase in the rate paid on funds held at the
Federal Reserve Bank. This rate was increased multiple times in 2022 and 2023 in
conjunction with the increase in the Federal Funds target interest rate. The
decrease in average balances was due to utilization of these funds in loan
originations and securities purchases.

Total Interest Expense

Total interest expense increased $14.9 million, or 436.3%, during the three
months ended March 31, 2023, when compared with the three months ended March 31,
2022, due to an increase in interest expense on deposits of $12.5 million, or
574.2%, an increase in interest expense on short-term borrowings of $1.8
million, an increase in interest expense on securities sold under reverse
repurchase agreements of $332,000, or 3320.0%, an increase in interest expense
on subordinated debentures issued to capital trusts of $275,000, or 233.1%, and
an increase in interest expense on subordinated notes of $1,000, or 0.1%.

Interest Expense - Deposits

Interest expense on demand and savings deposits increased $3.6 million due to
average rates of interest that increased from 0.13% in the three months ended
March 31, 2022 to 0.81% in the three months ended March 31, 2023. Interest rates
paid on demand deposits were higher in the 2023 period due to significant
increases in overall market rates. Partially offsetting this increase, interest
expense on demand deposits decreased $57,000, due to a decrease in average
balances from $2.38 billion during the three months ended March 31, 2022 to
$2.18 billion during the three months ended March 31, 2023. The Company
experienced decreased balances in various types of money market accounts,
certain types of NOW accounts and IntraFi Network Reciprocal Deposits.

                                       44

Interest expense on time deposits increased $3.7 million as a result of an
increase in average rates of interest from 0.56% during the three months ended
March 31, 2022, to 2.07% during the three months ended March 31, 2023. Interest
expense on time deposits increased $247,000 due to an increase in average
balances of time deposits from $863.7 million during the three months ended
March 31, 2022 to $1.02 billion in the three months ended March 31, 2023. A
large portion of the Company's certificate of deposit portfolio matures within
six to twelve months and therefore reprices fairly quickly; this is consistent
with the portfolio over the past several years. Older certificates of deposit
that renewed or were replaced with new deposits generally resulted in the
Company paying a higher rate of interest due to increases in market interest
rates throughout 2022 and targeted promotions during the latter half of 2022 and
the first three months of 2023.

Interest expense on brokered deposits increased $3.3 million, due to an increase
in average balances from $67.4 million during the three months ended March 31,
2022 to $456.8 million during the three months ended March 31, 2023. Interest
expense on brokered deposits increased $1.6 million due to average rates of
interest that increased from 1.17% in the three months ended March 31, 2022 to
4.53% in the three months ended March 31, 2023. Brokered deposits added during
the three months ended March 31, 2023 were at higher market rates than brokered
deposits previously issued. The Company uses brokered deposits of select
maturities from time to time to supplement its various funding channels and to
manage interest rate risk.

Interest Expense - FHLBank Advances; Short-term Borrowings, Repurchase
Agreements and Other Interest-bearing Liabilities; Subordinated Debentures
Issued to Capital Trusts and Subordinated Notes

FHLBank term advances were not utilized during the three months ended March 31,
2023 and 2022.

Interest expense on reverse repurchase agreements increased $330,000 due to
higher average interest rates during the three months ended March 31, 2023 when
compared to the three months ended March 31, 2022. The average rate of interest
was 0.94% for the three months ended March 31, 2023 compared to 0.03% for the
three months ended March 31, 2022. The average balance of repurchase agreements
increased $18.7 million from $128.3 million in the three months ended March 31,
2022 to $147.0 million in the three months ended March 31, 2023, which was due
to changes in customers' desire for this product, which can fluctuate.

Interest expense on short-term borrowings (including overnight borrowings from
the FHLBank) and other interest-bearing liabilities increased $1.1 million
during the three months ended March 31, 2023 when compared to the three months
ended March 31, 2022 due to higher average rates of interest. The average rate
of interest was 4.75% for the three months ended March 31, 2023, compared to
0.08% for the three months ended March 31, 2022. Short-term market interest
rates increased sharply throughout 2022 and into 2023. Interest expense on
short-term borrowings (including overnight borrowings from the FHLBank) and
other interest-bearing liabilities increased $722,000 during the three months
ended March 31, 2023 when compared to the three months ended March 31, 2022 due
to higher average balances. The average balance of short-term borrowings and
other interest-bearing liabilities increased $148.2 million from $3.6 million in
the three months ended March 31, 2022 to $151.8 million in the three months
ended March 31, 2023, which was primarily due to changes in the Company's
funding needs and the mix of funding, which can fluctuate. Most of this increase
was due to the utilization of overnight borrowings from the FHLBank.

During the three months ended March 31, 2023, compared to the three months ended
March 31, 2022, interest expense on subordinated debentures issued to capital
trusts increased $275,000 due to higher average interest rates. The average
interest rate was 6.18% in the three months ended March 31, 2023 compared to
1.86% in the three months ended March 31, 2022. The subordinated debentures are
variable-rate debentures which bear interest at an average rate of three-month
LIBOR plus 1.60%, adjusting quarterly, which was 6.41% at March 31, 2023. There
was no change in the average balance of the subordinated debentures between the
2022 and 2023 periods.

In June 2020, the Company issued $75.0 million of 5.50% fixed-to-floating rate
subordinated notes due June 15, 2030. The notes were sold at par, resulting in
net proceeds, after underwriting discounts and commissions and other issuance
costs, of approximately $73.5 million. These issuance costs are amortized over
the expected life of the notes, which is five years from the issuance date,
impacting the overall interest expense on the notes. During the three months
ended March 31, 2023, compared to the three months ended March 31, 2022,
interest expense on subordinated notes increased $1,000.

                                       45

Net Interest Income

Net interest income for the three months ended March 31, 2023 increased $9.9
million to $53.2 million compared to $43.3 million for the three months ended
March 31, 2022. Net interest margin was 3.99% in the three months ended March
31, 2023, compared to 3.43% in the three months ended March 31, 2022, an
increase of 56 basis points, or 16.3%. The Company experienced increases in
interest income on both loans and investment securities. The Company experienced
increases in interest expense on deposits, short-term borrowings and
subordinated debentures issued to capital trust.

The Company's overall average interest rate spread increased 22 basis points, or
6.6%, from 3.31% during the three months ended March 31, 2022 to 3.53% during
the three months ended March 31, 2023. The increase was due to a 166 basis point
increase in the weighted average yield on interest-earning assets, partially
offset by a 144 basis point increase in the weighted average rate paid on
interest-bearing liabilities. In comparing the two periods, the yield on loans
increased 153 basis points, the yield on investment securities increased 28
basis points and the yield on other interest-earning assets increased 433 basis
points. The rate paid on deposits increased 135 basis points, the rate paid on
reverse repurchase agreements increased 91 basis points, the rate paid on
short-term borrowings and other interest-bearing liabilities increased 467 basis
points the rate paid on subordinated debentures issued to capital trusts
increased 432 basis points.

For additional information on net interest income components, refer to the
"Average Balances, Interest Rates and Yields" tables in this Quarterly Report on
Form 10-Q.

Provision for and Allowance for Credit Losses

The Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic
326): Measurement of Credit Losses on Financial Instruments, effective January
1, 2021. The CECL methodology replaced the incurred loss methodology with a
lifetime "expected credit loss" measurement objective for loans,
held-to-maturity debt securities and other receivables measured at amortized
cost at the time the financial asset is originated or acquired. This standard
requires the consideration of historical loss experience and current conditions
adjusted for reasonable and supportable economic forecasts.

Management estimates the allowance balance using relevant available information,
from internal and external sources, relating to past events, current conditions,
and reasonable and supportable forecasts. Historical credit loss experience
provides the basis for the estimation of expected credit losses. Adjustments to
historical loss information are made for differences in current loan-specific
risk characteristics such as differences in underwriting standards, portfolio
mix, delinquency level, or term as well as for changes in economic conditions,
such as changes in the national unemployment rate, commercial real estate price
index, housing price index, consumer sentiment, gross domestic product (GDP) and
construction spending.

Continued challenging or worsening economic conditions from COVID-19 and
subsequent variant outbreaks or similar events, higher inflation or interest
rates, or other factors may lead to increased losses in the portfolio and/or
requirements for an increase in provision expense. Management maintains various
controls in an attempt to identify and limit future losses, such as a watch list
of problem loans and potential problem loans, documented loan administration
policies and loan review staff to review the quality and anticipated
collectability of the portfolio. Additional procedures provide for frequent
management review of the loan portfolio based on loan size, loan type,
delinquencies, financial analysis, on-going correspondence with borrowers and
problem loan work-outs. Management determines which loans are
collateral-dependent, evaluates risk of loss and makes additional provisions to
expense, if necessary, to maintain the allowance at a satisfactory level.

During the three months ended March 31, 2023, the Company recorded provision
expense of $1.5 million on its portfolio of outstanding loans. During the three
months ended March 31, 2022, the Company did not record a provision expense on
its portfolio of outstanding loans. The provision recorded during the three
months ended March 31, 2023 was primarily due to increases in outstanding loan
balances, combined with a modestly worsening economic forecast. In the three
months ended March 31, 2023 and 2022, the Company experienced net recoveries of
$7,000 and $43,000, respectively. The provision for losses on unfunded
commitments for the three months ended March 31, 2023 and March 31, 2022 was a
negative provision of $826,000 and $193,000, respectively. The level and mix of
unfunded commitments resulted in a decrease in the required reserve for such
potential losses. General market conditions and unique circumstances related to
specific industries and individual projects contribute to the level of
provisions and charge-offs.

The Bank's allowance for credit losses as a percentage of total loans was 1.40%
and 1.39% at March 31, 2023 and December 31, 2022, respectively. Management
considers the allowance for credit losses adequate to cover losses inherent in
the Bank's loan portfolio at March 31, 2023, based on recent reviews of the
Bank's loan portfolio and current economic conditions. If challenging

                                       46

economic conditions were to continue or deteriorate, or if management's
assessment of the loan portfolio were to change, additional loan loss provisions
could be required, thereby adversely affecting the Company's future results of
operations and financial condition.

Non-performing Assets

As a result of changes in balances and composition of the loan portfolio,
changes in economic and market conditions and other factors specific to a
borrower's circumstances, the level of non-performing assets will fluctuate.

At March 31, 2023, non-performing assets were $3.0 million, a decrease of
$693,000 from $3.7 million at December 31, 2022. Non-performing assets as a
percentage of total assets were 0.05% at March 31, 2023, compared to 0.07% at
December 31, 2022.

Compared to December 31, 2022, non-performing loans decreased $688,000, to $3.0
million at March 31, 2023, and foreclosed and repossessed assets decreased
$5,000, to $45,000 at March 31, 2023. The majority of the decrease in
non-performing loans was in the commercial business loans category, which
decreased $570,000 from December 31, 2022.

Non-performing Loans. Activity in the non-performing loans category during the
three months ended March 31, 2023 was as follows:

                                                                                        Transfers to       Transfers to
                                        Beginning      Additions        Removed          Potential          Foreclosed                                    Ending
                                        Balance,        to Non-        from Non-          Problem           Assets and        Charge-                    Balance,
                                        January 1     Performing       Performing          Loans          Repossessions        Offs        Payments      March 31

                                                                                             (In thousands)
One- to four-family construction       $         -    $         -    $     

      -    $            -    $              -    $       -    $        -    $        -
Subdivision construction                         -              -                 -                 -                   -            -             -             -
Land development                               384              -                 -                 -                   -            -             -           384
Commercial construction                          -              -                 -                 -                   -            -             -             -

One- to four-family residential                722              -          

      -                 -                   -         (30)          (67)           625
Other residential                                -              -                 -                 -                   -            -             -             -
Commercial real estate                       1,579             38                 -                 -                   -            -          (91)         1,526
Commercial business                            586             16                 -                 -                   -            -         (586)            16
Consumer                                       399             89                 -                 -                   -         (23)          (34)           431
Total non-performing loans             $     3,670    $       143    $            -    $            -    $              -    $    (53)    $    (778)    $    2,982

FDIC-assisted acquired loans
included above                         $       428    $         -    $            -    $            -    $              -    $    (31)    $     (50)    $      347


At March 31, 2023, the non-performing commercial real estate category included
three loans, none of which were added during the current period. The largest
relationship in the category, which totaled $1.3 million, or 82.8% of the total
category, was transferred from potential problem loans during 2021, and is
collateralized by a mixed-use commercial retail building. Although considered
non-performing, periodic payments have been received on this relationship. The
non-performing one- to four-family residential category included 20 loans, none
of which were added during the current period. The largest relationship in the
category totaled $155,000, or 24.8% of the category. The non-performing land
development category consisted of one loan added during 2021, which totaled
$384,000 and is collateralized by unimproved zoned vacant ground in southern
Illinois. The non-performing commercial business category consisted of one loan,
which was added during the current period. The balance in this category was
reduced by $586,000 due to the repayment in full of the one existing
relationship at the beginning of the current period. The non-performing consumer
category included 21 loans, five of which were added during the current period.

                                       47

Potential Problem Loans. Compared to December 31, 2022, potential problem loans
decreased $961,000, or 60.9%, to $617,000 at March 31, 2023. The decrease during
the period was primarily due to multiple loans totaling $1.0 million that were
upgraded to a satisfactory risk rating, $117,000 in loan payments and $12,000 in
charge offs, partially offset by $174,000 in loans added to potential problem
loans. Potential problem loans are loans which management has identified through
routine internal review procedures as having possible credit problems that may
cause the borrowers difficulty in complying with the current repayment terms.
These loans are not reflected in non-performing assets.

Activity in the potential problem loans categories during the three months ended
March 31, 2023, was as follows:

                                                                         Removed                         Transfers to
                                        Beginning       Additions          from       Transfers to        Foreclosed                       Loan         Ending
                                        Balance,       to Potential     Potential         Non-            Assets and        Charge-      Advances      Balance,
                                        January 1        Problem         Problem       Performing       Repossessions        Offs       (Payments)     March 31

                                                                                            (In thousands)
One- to four-family construction       $         -    $            -    $  

     -    $           -    $              -    $       -    $         -    $       -
Subdivision construction                         -                 -             -                -                   -            -              -            -
Land development                                 -                 -             -                -                   -            -              -            -
Commercial construction                          -                 -             -                -                   -            -              -            -

One- to four-family residential              1,348               167       

 (939)                -                   -            -           (86)          490
Other residential                                -                 -             -                -                   -            -              -            -
Commercial real estate                           -                 -             -                -                   -            -              -            -
Commercial business                              -                 -             -                -                   -            -              -            -
Consumer                                       230                 7          (64)              (3)                   -         (12)           (31)          127

Total potential problem loans $ 1,578 $ 174 $ (1,003) $ (3) $

              -    $    (12)    $     (117)    

$ 617

FDIC-assisted acquired loans
included above                         $       743    $            -    $    (562)    $           -    $              -    $       -    $       (1)    $     180


At March 31, 2023, the one- to four-family residential category of potential
problem loans included five loans, two of which were added during the current
period. The largest relationship in this category totaled $143,000, or 29.2% of
the total category. During the three months ending March 31, 2023, 17 loans,
totaling $939,000, met the criteria to be upgraded to a satisfactory risk
rating. The consumer category of potential problem loans included 13 loans, one
of which was added during the current period.

Other Real Estate Owned and Repossessions. Of the total $154,000 of other real
estate owned and repossessions at March 31, 2023, $109,000 represents properties
which were not acquired through foreclosure.

Activity in foreclosed assets and repossessions during the three months ended
March 31, 2023, was as follows:

                                             Beginning                      ORE and                           ORE and         Ending
                                              Balance,                   Repossession      Capitalized     Repossession      Balance,
                                             January 1     Additions         Sales            Costs         Write-Downs      March 31

                                                                                  (In thousands)

One-to four-family construction              $        -    $        -    $ 

         -    $           -    $           -    $        -
Subdivision construction                              -             -                -                -                -             -
Land development                                      -             -                -                -                -             -
Commercial construction                               -             -                -                -                -             -

One- to four-family residential                       -             -      

         -                -                -             -
Other residential                                     -             -                -                -                -             -
Commercial real estate                                -             -                -                -                -             -
Commercial business                                   -             -                -                -                -             -
Consumer                                             50            28             (33)                -                -            45

Total foreclosed assets and repossessions    $       50    $       28    $        (33)    $           -    $           -    $       45

The additions and sales in the consumer category were due to the volume of
repossessions of automobiles, which generally are subject to a shorter
repossession process.

                                       48

Loans Classified "Watch"

The Company reviews the credit quality of its loan portfolio using an internal
grading system that classifies loans as "Satisfactory," "Watch," "Special
Mention," "Substandard" and "Doubtful." Loans classified as "Watch" are being
monitored because of indications of potential weaknesses or deficiencies that
may require future classification as special mention or substandard. In the
three months ended March 31, 2023, loans classified as "Watch" decreased $10.3
million, from $28.7 million at December 31, 2022 to $18.4 million at March 31,
2023, primarily due to loans being upgraded out of the "Watch" category. See
Note 6 for further discussion of the Company's loan grading system.

Non-interest Income

For the three months ended March 31, 2023, non-interest income decreased $1.3
million to $7.9 million when compared to the three months ended March 31, 2022,
primarily as a result of the following items:

Net gains on loan sales: Net gains on loan sales decreased $745,000 compared to
the prior year period. The decrease was due to a decrease in originations of
fixed-rate single-family mortgage loans during the 2023 period compared to the
2022 period. Fixed rate single-family mortgage loans originated are generally
subsequently sold in the secondary market. These loan originations increased
substantially when market interest rates decreased to historically low levels in
2020 and 2021. As a result of the significant volume of refinance activity in
2020 and 2021, and as market interest rates moved higher beginning in the second
quarter of 2022, mortgage refinance volume decreased and fixed rate loan
originations and related gains on sales of these loans decreased substantially.
The lower level of originations is expected to continue as long as market rates
remain elevated.

Gain (loss) on derivative interest rate products: In the 2023 period, the
Company recognized a loss of $291,000 on the change in fair value of its
back-to-back interest rate swaps related to commercial loans and the change in
fair value on interest rate swaps related to brokered time deposits. In the 2022
period, the Company recognized a gain of $152,000 on the change in fair value of
its back-to-back interest rate swaps related to commercial loans. Changes in the
fair value of these types of swaps generally relate to movements in market
interest rates during the period and the cumulative changes in these fair values
will ultimately total zero at maturity of the swaps.

Non-interest Expense

For the three months ended March 31, 2023, non-interest expense increased $3.2
million to $34.5 million when compared to the three months ended March 31, 2022,
primarily as a result of the following items:

Legal, Audit and Other Professional Fees: Legal, audit and other professional
fees increased $1.2 million from the prior year period, to $2.0 million. In the
2023 period, the Company expensed a total of $1.3 million related to training
and implementation costs for the upcoming core systems conversion and
professional fees to consultants engaged to support the Company's transition of
core and ancillary software and information technology systems.

Salaries and employee benefits: Salaries and employee benefits increased $1.1
million from the prior year period. A portion of this increase related to normal
annual merit increases in various lending and operations areas. In the 2023
period, some of these increases were larger than in previous periods due to the
current employment environment. In addition, the Charlotte commercial loan
office was opened in the second quarter of 2022 and therefore had no expense in
the first quarter of 2022. The operation of this office added approximately
$85,000 of salaries and benefits expense in the three months ended March 31,
2023. In addition, compensation costs related to originated loans which are
deferred under accounting rules, decreased by $350,000 in the 2023 period
compared to the 2022 period, due to lower origination volumes.

Net occupancy expenses: Net occupancy expenses increased $842,000 from the prior
year period. Various components of computer license and support increased by
$500,000 in the 2023 period compared to the 2022 period. In addition, repairs
and maintenance on various buildings and ATMs increased by $250,000 in the 2023
period compared to the 2022 period.

                                       49

The Company's efficiency ratio for the three months ended March 31, 2023, was
56.42% compared to 59.62% for the same period in 2022. The improved efficiency
ratio was primarily due to an increase in net interest income, partially offset
by an increase in non-interest expense. The Company's ratio of non-interest
expense to average assets was 2.42% and 2.34% for the three months ended March
31, 2023 and 2022, respectively. Average assets for the three months ended March
31, 2023, increased $358.0 million, or 6.7%, from the three months ended March
31, 2022, primarily due to an increase in net loans receivable and investment
securities, partially offset by a decrease in interest bearing cash equivalents.

Provision for Income Taxes

For the three months ended March 31, 2023 and 2022, the Company's effective tax
rate was 21.2% and 20.5%, respectively. These effective rates were near or below
the statutory federal tax rate of 21%, due primarily to the utilization of
certain investment tax credits and the Company's tax-exempt investments and
tax-exempt loans, which reduced the Company's effective tax rate. The Company's
effective tax rate may fluctuate in future periods as it is impacted by the
level and timing of the Company's utilization of tax credits, the level of
tax-exempt investments and loans, the amount of taxable income in various state
jurisdictions and the overall level of pre-tax income. State tax expense
estimates continually evolve as taxable income and apportionment between states
is analyzed. The Company's effective income tax rate is currently generally
expected to remain near the statutory federal tax rate due primarily to the
factors noted above. The Company currently expects its effective tax rate
(combined federal and state) will be approximately 20.5% to 21.5% in future
periods.

                                       50

Average Balances, Interest Rates and Yields

The following tables present, for the periods indicated, the total dollar amount
of interest income from average interest-earning assets and the resulting
yields, as well as the interest expense on average interest-bearing liabilities,
expressed both in dollars and rates, and the net interest margin. Average
balances of loans receivable include the average balances of non-accrual loans
for each period. Interest income on loans includes interest received on
non-accrual loans on a cash basis. Interest income on loans also includes the
amortization of net loan fees which were deferred in accordance with accounting
standards. Net loan fees included in interest income were $1.3 million and $1.7
million for the three months ended March 31, 2023 and 2022, respectively.
Tax-exempt income was not calculated on a tax equivalent basis. The table does
not reflect any effect of income taxes.

                                                       March 31,              Three Months Ended                        Three Months Ended
                                                         2023                   March 31, 2023                            March 31, 2022
                                                        Yield/        Average                      Yield/       Average                      Yield/
                                                         Rate         Balance       Interest        Rate        Balance       Interest        Rate

                                                                                          (Dollars in Thousands)
Interest-earning assets:
Loans receivable:
One- to four-family residential                             3.55 %  $   909,672    $     8,165        3.64 %  $   701,330    $     6,041        3.49 %
Other residential                                           6.57        785,126         12,684        6.55        759,622          8,417        4.49
Commercial real estate                                      5.83      1,510,516         21,535        5.78      1,489,762         15,346        4.18
Construction                                                7.37        920,020         16,206        7.14        668,220          7,529        4.57
Commercial business                                         6.01        283,251          4,118        5.90        289,230          3,326        4.66
Other loans                                                 6.05       

189,688 2,506 5.36 204,510 2,244 4.45
Industrial revenue bonds(1)

                                 5.91         12,734            224        7.15         13,983            162        4.69

Total loans receivable                                      5.81      

4,611,007 65,438 5.76 4,126,657 43,065 4.23

Investment securities(1)                                    2.72        

706,894 5,004 2.87 533,976 3,410 2.59
Interest-earning deposits in other banks

                    4.83         91,821          1,021        4.51        458,643            198        0.18

Total interest-earning assets                               5.42      5,409,722         71,463        5.36      5,119,276         46,673        3.70
Non-interest-earning assets:
Cash and cash equivalents                                                93,586                                    90,586
Other non-earning assets                                                201,236                                   136,701
Total assets                                                        $ 5,704,544                               $ 5,346,563

Interest-bearing liabilities:
Interest-bearing demand and savings                         1.09    $ 2,184,966          4,359        0.81    $ 2,375,943            777        0.13
Time deposits                                               2.31      1,016,042          5,185        2.07        863,684          1,201        0.56
Brokered deposits                                           4.69        456,817          5,106        4.53         67,401            195        1.17
Total deposits                                              1.93     

3,657,825 14,650 1.62 3,307,028 2,173 0.27
Securities sold under reverse repurchase agreements 1.32 147,025

            342        0.94        128,264             10        

0.03

Short-term borrowings, overnight FHLBank borrowings
and other interest-bearing liabilities

                      5.05        151,847          1,780        4.75          3,628              1        

0.08

Subordinated debentures issued to capital trusts            6.41         25,774            393        6.18         25,774            118        1.86
Subordinated notes                                          5.95         74,319          1,106        6.04         74,019          1,105        6.06

Total interest-bearing liabilities                          2.14      4,056,790         18,271        1.83      3,538,713          3,407        0.39
Non-interest-bearing liabilities:
Demand deposits                                                       1,008,006                                 1,160,013
Other liabilities                                                        89,974                                    37,907
Total liabilities                                                     5,154,770                                 4,736,633
Stockholders' equity                                                    549,774                                   609,930
Total liabilities and stockholders' equity                          $ 5,704,544                               $ 5,346,563

Net interest income:
Interest rate spread                                        3.28 %                 $    53,192        3.53 %                 $    43,266        3.31 %
Net interest margin*                                                                                  3.99 %                                    3.43 %
Average interest-earning assets to average
interest- bearing liabilities                                             133.3 %                                   144.7 %

* Defined as the Company's net interest income divided by total average
interest-earning assets.

Of the total average balances of investment securities, average tax-exempt

investment securities were $57.8 million and $37.2 million for the three

months ended March 31, 2023 and 2022, respectively. In addition, average

tax-exempt loans and industrial revenue bonds were $10.7 million and $16.9
(1) million for the three months ended March 31, 2023 and 2022, respectively.

Interest income on tax-exempt assets included in this table was $637,000 and

$459,000 for the three months ended March 31, 2023 and 2022, respectively.

Interest income net of disallowed interest expense related to tax-exempt

    assets was $569,000 and $452,000 for the three months ended March 31, 2023
    and 2022, respectively.


                                       51

Rate/Volume Analysis

The following tables present the dollar amounts of changes in interest income
and interest expense for major components of interest-earning assets and
interest-bearing liabilities for the periods shown. For each category of
interest-earning assets and interest-bearing liabilities, information is
provided on changes attributable to (i) changes in rate (i.e., changes in rate
multiplied by old volume) and (ii) changes in volume (i.e., changes in volume
multiplied by old rate). For purposes of this table, changes attributable to
both rate and volume, which cannot be segregated, have been allocated
proportionately to volume and rate. Tax-exempt income was not calculated on a
tax equivalent basis.

                                                                                                   Three Months Ended March 31,
                                                                                                           2023 vs. 2022
                                                                                                Increase (Decrease)         Total
                                                                                                      Due to               Increase
                                                                                                 Rate         Volume      (Decrease)

                                                                                                      (Dollars in Thousands)

Interest-earning assets:
Loans receivable                                                                              $   16,871     $  5,502    $     22,373
Investment securities                                                                                400        1,194           1,594

Interest-earning deposits in other banks                                                             850         (27)             823
Total interest-earning assets                                                                     18,121        6,669          24,790
Interest-bearing liabilities:
Demand deposits                                                                                    3,639         (57)           3,582
Time deposits                                                                                      3,737          247           3,984
Brokered deposits                                                                                  1,628        3,283           4,911
Total deposits                                                                                     9,004        3,473          12,477

Securities sold under reverse repurchase agreements                                                  330            2             332

Short-term borrowings, overnight FHLBank borrowings and other interest-bearing liabilities 1,057 722

           1,779
Subordinated debentures issued to capital trust                                                      275            -             275
Subordinated notes                                                                                   (4)            5               1
Total interest-bearing liabilities                                         

                      10,662        4,202          14,864
Net interest income                                                                           $    7,459     $  2,467    $      9,926


                                       52

Liquidity

Liquidity is a measure of the Company's ability to generate sufficient cash to
meet present and future financial obligations in a timely manner through either
the sale or maturity of existing assets or the acquisition of additional funds
through liability management. These obligations include the credit needs of
customers, funding deposit withdrawals, and the day-to-day operations of the
Company. Liquid assets include cash, interest-bearing deposits with financial
institutions and certain investment securities and loans. As a result of the
Company's management of its ability to generate liquidity primarily through
liability funding, management believes that the Company maintains overall
liquidity sufficient to satisfy its depositors' requirements and meet its
borrowers' credit needs. At March 31, 2023, the Company had commitments of
approximately $60.2 million to fund loan originations, $1.89 billion of unused
lines of credit and unadvanced loans, and $16.6 million of outstanding letters
of credit.

Loan commitments and the unfunded portion of loans at the dates indicated were
as follows (In Thousands):

                                March 31,      December 31,      December 

31, December 31, December 31,

                                  2023             2022              2021              2020              2019
Closed non-construction loans
with unused available lines
Secured by real estate (one-       205,517
to four-family)                $              $      199,182    $      175,682    $      164,480    $      155,831
Secured by real estate (not              -
one- to four-family)                                       -            23,752            22,273            19,512
Not secured by real estate -       113,186
commercial business                                  104,452            91,786            77,411            83,782

Closed construction loans with
unused available lines
Secured by real estate (one-to     104,045
four-family)                                         100,669            74,501            42,162            48,213
Secured by real estate (not      1,333,596
one-to four-family)                                1,444,450         1,092,029           823,106           798,810

Loan commitments not closed
Secured by real estate (one-to      33,221
four-family)                                          16,819            53,529            85,917            69,295
Secured by real estate (not         78,384
one-to four-family)                                  157,645           146,826            45,860            92,434
Not secured by real estate -        37,477
commercial business                                   50,145            12,920               699                 -

                               $ 1,905,426    $    2,073,362    $    1,671,025    $    1,261,908    $    1,267,877


The Company's primary sources of funds are customer deposits, FHLBank advances,
other borrowings, loan repayments, unpledged securities, proceeds from sales of
loans and available-for-sale securities and funds provided from operations. The
Company utilizes particular sources of funds based on the comparative costs and
availability at the time. The Company has from time to time chosen not to pay
rates on deposits as high as the rates paid by certain of its competitors and,
when believed to be appropriate, supplements deposits with less expensive
alternative sources of funds.

At March 31, 2023 and December 31, 2022, the Company had the following available
secured lines and on-balance sheet liquidity:

                                             March 31, 2023     December 31, 2022
Federal Home Loan Bank line                  $ 850.0 million    $  1,005.1 million
Federal Reserve Bank line                    $ 418.4 million    $    397.0 million
Cash and cash equivalents                    $ 184.7 million    $    168.5 million

Unpledged securities - Available-for-sale $ 376.3 million $ 371.8 million
Unpledged securities - Held-to-maturity $ 176.7 million $ 202.5 million

Statements of Cash Flows. During the three months ended March 31, 2023 and 2022,
the Company had positive cash flows from operating activities. The Company had
negative cash flows from investing activities during the three months ended
March 31, 2023 and 2022. The Company had positive cash flows from financing
activities during the three months ended March 31, 2023 and negative cash flows
from financing activities during the three months ended March 31, 2022.

Cash flows from operating activities for the periods covered by the Statements
of Cash Flows have been primarily related to changes in accrued and deferred
assets, credits and other liabilities, the provision for credit losses,
depreciation and amortization, realized gains on sales of loans and the
amortization of deferred loan origination fees and discounts (premiums) on loans
and investments, all of which are non-cash or non-operating adjustments to
operating cash flows. Net income adjusted for non-cash and non-operating items

                                       53

and the origination and sale of loans held for sale were the primary source of
cash flows from operating activities. Operating activities provided cash flows
of $5.4 million and $31.4 million during the three months ended March 31, 2023
and 2022, respectively.

During the three months ended March 31, 2023 and 2022, investing activities used
cash of $53.4 million and $318.4 million, respectively. Investing activities in
the 2023 period used cash primarily due to the net originations of loans.
Investing activities in the 2022 period used cash primarily due to the purchase
of investment securities, the purchases of loans and the net origination of
loans, partially offset by payments received on investment securities.

Changes in cash flows from financing activities during the periods covered by
the Statements of Cash Flows were due to changes in deposits after interest
credited and changes in short-term borrowings, as well as advances from
borrowers for taxes and insurance, dividend payments to stockholders,
repurchases of the Company's common stock and the exercise of common stock
options. During the three months ended March 31, 2023 and 2022, financing
activities provided cash of $64.1 million and used cash of $77.2 million,
respectively. In the 2023 period, financing activities provided cash primarily
as a result of net increases in time deposits and checking and savings deposits,
partially offset by decreases in short-term borrowings, the repurchase of the
Company's common stock and dividends paid to stockholders. In the 2022 period,
financing activities used cash primarily as a result of net decreases in time
deposits, dividends paid to stockholders and the purchase of the Company's
common stock, partially offset by net increases in short-term borrowings.

Capital Resources

Management continuously reviews the capital position of the Company and the Bank
to ensure compliance with minimum regulatory requirements, as well as to explore
ways to increase capital either by retained earnings or other means.

At March 31, 2023, the Company's total stockholders' equity and common
stockholders' equity were each $555.5 million, or 9.6% of total assets,
equivalent to a book value of $45.78 per common share. As of December 31, 2022,
total stockholders' equity and common stockholders' equity were each $533.1
million, or 9.4% of total assets, equivalent to a book value of $43.58 per
common share. At March 31, 2023, the Company's tangible common equity to
tangible assets ratio was 9.5%, compared to 9.2% at December 31, 2022 (See
Non-GAAP Financial Measures below).

Included in stockholders' equity at March 31, 2023 and December 31, 2022, were
unrealized losses (net of taxes) on the Company's available-for-sale investment
securities totaling $40.3 million and $47.2 million, respectively. This change
in net unrealized loss during the three months ended March 31, 2023, primarily
resulted from decreasing intermediate-term market interest rates, which
generally increased the fair value of investment securities. Also included in
stockholders' equity at March 31, 2023, were unrealized gains (net of taxes)
totaling $72,000 on the Company's investment securities that were transferred to
the held-to-maturity category. Approximately $227 million of investment
securities previously included in available-for-sale were transferred to
held-to-maturity during the first quarter of 2022.

In addition, included in stockholders' equity at March 31, 2023, were realized
gains (net of taxes) on the Company's terminated cash flow hedge (interest rate
swap), totaling $15.8 million. This amount, plus associated deferred taxes, is
expected to be accreted to interest income over the remaining term of the
original interest rate swap contract, which was to end in October 2025. At March
31, 2023, the remaining pre-tax amount to be recorded in interest income was
$20.5 million. The net effect on total stockholders' equity over time will be no
impact, as the reduction of this realized gain will be offset by an increase in
retained earnings (as the interest income flows through pre-tax income).

Also included in stockholders' equity at March 31, 2023, was an unrealized loss
(net of taxes) on the Company's outstanding cash flow hedges (interest rate
swaps) totaling $17.0 million. Increases in market interest rates since the
inception of these hedges have caused their fair values to decrease. However,
during the three months ended March 31, 2023, decreasing forward swap rates
resulted in increasing fair values of these hedges.

As noted above, total stockholders' equity increased $22.4 million, from $533.1
million at December 31, 2022 to $555.5 million at March 31, 2023. Accumulated
other comprehensive income increased $11.9 million during the three months ended
March 31, 2023, primarily due to increases in the fair value of
available-for-sale investment securities and the fair value of cash flow hedges.
Stockholders' equity also increased due to net income of $20.5 million for the
three months ended March 31, 2023 and a $470,000 increase due to stock option
exercises. Partially offsetting these increases were repurchases of the
Company's common stock totaling $5.6 million and dividends declared on common
stock of $4.9 million.

The Company also had unrealized losses on its portfolio of held-to-maturity
investment securities, which totaled $20.6 million at March 31, 2023, that were
not included in its total capital balance. If these held-to-maturity unrealized
losses were included in capital

                                       54

(net of taxes) it would have decreased total stockholder's equity by $15.5
million at March 31, 2023. This amount was equal to 2.8% of total stockholders'
equity of $555.5 million.

Banks are required to maintain minimum risk-based capital ratios. These ratios
compare capital, as defined by the risk-based regulations, to assets adjusted
for their relative risk as defined by the regulations. Under current guidelines,
which became effective January 1, 2015, banks must have a minimum common equity
Tier 1 capital ratio of 4.50%, a minimum Tier 1 risk-based capital ratio of
6.00%, a minimum total risk-based capital ratio of 8.00%, and a minimum Tier 1
leverage ratio of 4.00%. To be considered "well capitalized," banks must have a
minimum common equity Tier 1 capital ratio of 6.50%, a minimum Tier 1 risk-based
capital ratio of 8.00%, a minimum total risk-based capital ratio of 10.00%, and
a minimum Tier 1 leverage ratio of 5.00%. On March 31, 2023, the Bank's common
equity Tier 1 capital ratio was 12.3%, its Tier 1 risk-based capital ratio was
12.3%, its total risk-based capital ratio was 13.5% and its Tier 1 leverage
ratio was 11.7%. As a result, as of March 31, 2023, the Bank was well
capitalized, with capital ratios in excess of those required to qualify as such.
On December 31, 2022, the Bank's common equity Tier 1 capital ratio was 11.9%,
its Tier 1 risk-based capital ratio was 11.9%, its total risk-based capital
ratio was 13.1% and its Tier 1 leverage ratio was 11.5%. As a result, as of
December 31, 2022, the Bank was well capitalized, with capital ratios in excess
of those required to qualify as such.

The FRB has established capital regulations for bank holding companies that
generally parallel the capital regulations for banks. On March 31, 2023, the
Company's common equity Tier 1 capital ratio was 10.9%, its Tier 1 risk-based
capital ratio was 11.3%, its total risk-based capital ratio was 13.9% and its
Tier 1 leverage ratio was 10.8%. To be considered well capitalized, a bank
holding company must have a Tier 1 risk-based capital ratio of at least 6.00%
and a total risk-based capital ratio of at least 10.00%. As of March 31, 2023,
the Company was considered well capitalized, with capital ratios in excess of
those required to qualify as such. On December 31, 2022, the Company's common
equity Tier 1 capital ratio was 10.6%, its Tier 1 risk-based capital ratio was
11.0%, its total risk-based capital ratio was 13.5% and its Tier 1 leverage
ratio was 10.6%. As of December 31, 2022, the Company was considered well
capitalized, with capital ratios in excess of those required to qualify as such.

In addition to the minimum common equity Tier 1 capital ratio, Tier 1 risk-based
capital ratio and total risk-based capital ratio, the Company and the Bank have
to maintain a capital conservation buffer consisting of additional common equity
Tier 1 capital greater than 2.5% of risk-weighted assets above the required
minimum levels in order to avoid limitations on paying dividends, repurchasing
shares, and paying discretionary bonuses. At March 31, 2023, the Company and the
Bank both had additional common equity Tier 1 capital in excess of the buffer
amount.

Dividends. During the three months ended March 31, 2023, the Company declared a
common stock cash dividend of $0.40 per share, or 24% of net income per diluted
common share for that three month period, and paid a common stock cash dividend
of $0.40 per share (which was declared in December 2022). During the three
months ended March 31, 2022, the Company declared a common stock cash dividend
of $0.36 per share, or 28% of net income per diluted common share for that three
month period, and paid a common stock cash dividend of $0.36 per share (which
was declared in December 2021). The Board of Directors meets regularly to
consider the level and the timing of dividend payments. The $0.40 per share
dividend declared but unpaid as of March 31, 2023, was paid to stockholders in
April 2023.

Common Stock Repurchases and Issuances. The Company has been in various buy-back
programs since May 1990. During the three months ended March 31, 2023, the
Company repurchased 99,121 shares of its common stock at an average price of
$55.70 per share and issued 1,717 shares of common stock at an average price of
$43.05 per share to cover stock option exercises. During the three months ended
March 31, 2022, the Company repurchased 419,215 shares of its common stock at an
average price of $60.40 per share and issued 51,694 shares of common stock at an
average price of $47.49 per share to cover stock option exercises.

In January 2022, the Company's Board of Directors authorized management to
purchase up to one million shares of the Company's outstanding common stock,
under a program of open market purchases or privately negotiated transactions.
At March 31, 2023, there were approximately 78,000 shares which could still be
purchased under this authorization. In December 2022, the Company's Board of
Directors authorized the purchase of up to an additional one million shares of
the Company's outstanding common stock, under a program of open market purchases
or privately negotiated transactions, resulting in a total of approximately 1.1
million shares available in our stock repurchase authorization as of March 31,
2023.

Management has historically utilized stock buy-back programs from time to time
as long as management believed that repurchasing the Company's common stock
would contribute to the overall growth of shareholder value. The number of
shares that will be repurchased at any particular time and the prices that will
be paid are subject to many factors, several of which are outside of the control
of the Company. The primary factors typically include the number of shares
available in the market from sellers at any given time, the market price of the
stock and the projected impact on the Company's earnings per share and capital.

                                       55

Non-GAAP Financial Measures

This document contains certain financial information determined by methods other
than in accordance with accounting principles generally accepted in the United
States ("GAAP"), specifically, the ratio of tangible common equity to tangible
assets.

In calculating the ratio of tangible common equity to tangible assets, we
subtract period-end intangible assets from common equity and from total assets.
Management believes that the presentation of this measure excluding the impact
of intangible assets provides useful supplemental information that is helpful in
understanding our financial condition and results of operations, as it provides
a method to assess management's success in utilizing our tangible capital as
well as our capital strength. Management also believes that providing a measure
that excludes balances of intangible assets, which are subjective components of
valuation, facilitates the comparison of our performance with the performance of
our peers. In addition, management believes that this is a standard financial
measure used in the banking industry to evaluate performance.

This non-GAAP financial measurement is supplemental and is not a substitute for
any analysis based on GAAP financial measures. Because not all companies use the
same calculation of non-GAAP measures, this presentation may not be comparable
to similarly titled measures as calculated by other companies.

Non-GAAP Reconciliation: Ratio of Tangible Common Equity to Tangible Assets

                                                 March 31, 2023      December 31, 2022

                                                        (Dollars in Thousands)

Common equity at period end                     $        555,511    $           533,087

Less: Intangible assets at period end                     10,702           

10,813

Tangible common equity at period end (a) $ 544,809 $

522,274

Total assets at period end                      $      5,768,720    $      

5,680,702

Less: Intangible assets at period end                     10,702           

10,813

Tangible assets at period end (b)               $      5,758,018    $      

5,669,889

Tangible common equity to tangible assets
(a) / (b)                                                   9.46 %         

9.21 %