Great Southern Bancorp(GSBC) - 2025 Q2 - Quarterly Report

FORM 10-Q Cover Page This section identifies the report as a Quarterly Report on Form 10-Q for Great Southern Bancorp, Inc., with key registrant details - The report is a Quarterly Report on Form 10-Q for Great Southern Bancorp, Inc. for the period ended June 30, 2025[2] Registrant Information | Field | Value | | :--- | :--- | | Registrant Name | GREAT SOUTHERN BANCORP, INC. | | State of Incorporation | Maryland | | IRS Employer Identification No. | 43-1524856 | | Principal Executive Offices | 1451 E. Battlefield, Springfield, Missouri 65804 | | Telephone Number | (417) 887-4400 | | Trading Symbol | GSBC | | Exchange | The NASDAQ Stock Market LLC | | Filer Status | Accelerated filer | | Common Stock Outstanding (August 5, 2025) | 11.33 million shares | PART I. FINANCIAL INFORMATION This part presents unaudited consolidated financial statements and management's discussion and analysis of financial results Item 1. Financial Statements This section presents the unaudited consolidated financial statements and detailed notes for the specified periods Consolidated Statements of Financial Condition Total assets and liabilities slightly decreased from December 31, 2024, to June 30, 2025, with increased equity Consolidated Statements of Financial Condition (In Millions) | Item | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :--- | :--- | :--- | | ASSETS | | | | Cash and cash equivalents | $245.9 | $195.8 | | Available-for-sale securities | $527.5 | $533.4 | | Held-to-maturity securities | $183.1 | $187.4 | | Loans receivable, net | $4,534.3 | $4,690.4 | | Total Assets | $5,854.7 | $5,981.6 | | LIABILITIES | | | | Deposits | $4,684.1 | $4,605.5 | | Short-term borrowings and other interest-bearing liabilities | $369.9 | $514.2 | | Total Liabilities | $5,232.3 | $5,382.1 | | STOCKHOLDERS' EQUITY | | | | Total Stockholders' Equity | $622.4 | $599.6 | | Total Liabilities and Stockholders' Equity | $5,854.7 | $5,981.6 | Consolidated Statements of Income Net income increased for both the three and six months ended June 30, 2025, driven by higher net interest income and lower interest expense Consolidated Statements of Income (In Millions, Except Per Share Data) | Item | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :--- | :--- | :--- | :--- | :--- | | Total Interest Income | $81.0 | $80.9 | $161.2 | $158.3 | | Total Interest Expense | $30.0 | $34.1 | $60.9 | $66.7 | | Net Interest Income | $51.0 | $46.8 | $100.3 | $91.6 | | Provision for Credit Losses on Loans | $0.0 | $0.0 | $0.0 | $0.5 | | Provision (Credit) for Unfunded Commitments | $(0.1) | $(0.6) | $(0.5) | $(0.5) | | Total Non-Interest Income | $8.2 | $9.8 | $14.8 | $16.6 | | Total Non-Interest Expense | $35.0 | $36.4 | $69.8 | $70.8 | | Income Before Income Taxes | $24.3 | $20.8 | $45.7 | $37.4 | | Provision for Income Taxes | $4.5 | $3.9 | $8.8 | $7.0 | | Net Income | $19.8 | $17.0 | $36.9 | $30.4 | | Basic Earnings Per Common Share | $1.73 | $1.46 | $3.20 | $2.60 | | Diluted Earnings Per Common Share | $1.72 | $1.45 | $3.18 | $2.58 | | Dividends Declared Per Common Share | $0.40 | $0.40 | $0.80 | $0.80 | Consolidated Statements of Comprehensive Income Comprehensive income significantly increased for both periods ended June 30, 2025, driven by unrealized appreciation on available-for-sale securities and cash flow hedges Consolidated Statements of Comprehensive Income (In Millions) | Item | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :--- | :--- | :--- | :--- | :--- | | Net Income | $19.8 | $17.0 | $36.9 | $30.4 | | Unrealized appreciation (depreciation) on available-for-sale securities, net of taxes | $1.8 | $(1.3) | $9.4 | $(6.8) | | Change in value of active cash flow hedges, net of taxes | $2.7 | $(0.0) | $6.9 | $(3.0) | | Comprehensive Income | $22.6 | $14.1 | $50.0 | $17.4 | Consolidated Statements of Stockholders' Equity Stockholders' equity increased for the three and six months ended June 30, 2025, primarily due to net income and positive changes in other comprehensive income Changes in Stockholders' Equity (In Millions) | Item | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :--- | :--- | :--- | :--- | :--- | | Balance, March 31 / January 1 | $613.3 | $565.2 | $599.6 | $571.8 | | Net income | $19.8 | $17.0 | $36.9 | $30.4 | | Common cash dividends declared | $(4.6) | $(4.6) | $(9.2) | $(9.3) | | Change in fair value of cash flow hedges | $1.1 | $(1.6) | $3.7 | $(6.1) | | Change in unrealized gain (loss) on available-for-sale securities | $1.8 | $(1.3) | $9.4 | $(6.8) | | Repurchase of common stock | $(9.8) | $(6.5) | $(20.0) | $(12.4) | | Balance, June 30 | $622.4 | $568.8 | $622.4 | $568.8 | Consolidated Statements of Cash Flows For the six months ended June 30, 2025, operating and investing activities provided cash, while financing activities used cash, leading to a net increase in cash and cash equivalents Consolidated Statements of Cash Flows (In Millions) | Item | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $54.3 | $16.6 | | Net cash provided by (used in) investing activities | $170.9 | $(144.2) | | Net cash provided by (used in) financing activities | $(175.1) | $102.8 | | INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | $50.2 | $(24.9) | | CASH AND CASH EQUIVALENTS, END OF PERIOD | $245.9 | $186.5 | Notes to Consolidated Financial Statements The notes provide detailed disclosures on the Company's accounting policies, financial instruments, loan portfolio, credit losses, and investments NOTE 1: BASIS OF PRESENTATION The interim consolidated financial statements are prepared in accordance with GAAP and SEC rules, reflecting normal recurring adjustments - Unaudited interim consolidated financial statements are prepared in accordance with GAAP for interim financial information and SEC instructions to Form 10-Q and Rule 10-01 of Regulation S-X[19] - Operating results for the three and six months ended June 30, 2025, are not necessarily indicative of the full year's expected results[19] NOTE 2: NATURE OF OPERATIONS AND OPERATING SEGMENTS Great Southern Bancorp, Inc. operates as a one-bank holding company, with Great Southern Bank as its sole reportable segment, offering diverse financial services - The Company operates as a one-bank holding company, with Great Southern Bank as its only reportable segment[22][23] - The Bank provides financial services primarily in Missouri, Iowa, Kansas, Minnesota, Nebraska, and Arkansas, and originates commercial loans from offices in several major cities[22] - The banking operation focuses on originating residential and commercial real estate loans, construction loans, commercial business loans, and consumer loans, funded by deposits and borrowings[23] NOTE 3: RECENT ACCOUNTING PRONOUNCEMENTS The Company adopted ASU 2023-02 with an immaterial impact and notes upcoming effectiveness of ASU 2023-07, ASU 2023-09, and ASU 2024-03 - ASU 2023-02 (Investments – Equity Method and Joint Ventures) was adopted on January 1, 2024, resulting in a $223 thousand reduction of retained earnings, with no material impact on consolidated financial statements[24] - ASU 2023-07 (Segment Reporting) became effective for the Company's annual financial statements in 2024, expanding disclosure requirements for significant segment expenses[25] - ASU 2023-09 (Income Taxes) is effective for the fiscal year ending December 31, 2025, requiring additional income tax disclosures[26] - ASU 2024-03 (Expense Disaggregation Disclosures) is effective for annual periods beginning after December 15, 2026, and is not expected to materially impact financial statements but will affect disclosures[27] NOTE 4: EARNINGS PER SHARE Basic and diluted earnings per common share increased for both the three and six months ended June 30, 2025, reflecting higher net income Earnings Per Common Share (In Millions, Except Per Share Data) | Item | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :--- | :--- | :--- | :--- | :--- | | Net income | $19.8 | $17.0 | $36.9 | $30.4 | | Basic Earnings Per Common Share | $1.73 | $1.46 | $3.20 | $2.60 | | Diluted Earnings Per Common Share | $1.72 | $1.45 | $3.18 | $2.58 | | Average common shares outstanding (Basic) | 11.46 | 11.64 | 11.55 | 11.70 | | Diluted common shares | 11.52 | 11.70 | 11.60 | 11.76 | - Options to purchase 835,549 shares (2025) and 741,708 shares (2024) were excluded from diluted EPS calculation as their exercise prices exceeded the average market price[28] NOTE 5: INVESTMENT SECURITIES The investment securities portfolio, comprising AFS and HTM securities, saw a slight decrease in total value, with most unrealized losses on government-sponsored entity securities not considered credit-related - Available-for-sale (AFS) securities are carried at fair value, with unrealized gains and losses recorded in stockholders' equity, net of taxes[29] - Held-to-maturity (HTM) securities are carried at historical cost, adjusted for amortization of premiums and accretion of discounts[30] Investment Securities (In Millions) | Category | June 30, 2025 (Fair Value, Millions) | December 31, 2024 (Fair Value, Millions) | | :--- | :--- | :--- | | Available-for-sale securities | $527.5 | $533.4 | | Held-to-maturity securities | $163.8 | $162.8 | | Total Unrealized Losses (AFS) | $(49.8) | $(61.3) | | Total Unrealized Losses (HTM) | $(19.3) | $(24.7) | - A high percentage of unrealized losses are related to mortgage-backed, collateralized mortgage, and SBA securities issued and guaranteed by U.S. government-sponsored entities, which management believes are not credit-related[33][35][38] NOTE 6: LOANS AND ALLOWANCE FOR CREDIT LOSSES The Company uses the CECL methodology for credit losses, with total loans receivable and nonaccruing loans decreasing, and no provision expense recorded for loans in the current period - The Company measures the allowance for credit losses using the CECL methodology, applicable to financial assets at amortized cost and off-balance sheet credit exposures[41] Loans Receivable and Allowance for Credit Losses (In Millions) | Item | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :--- | :--- | :--- | | Loans receivable | $4,604.9 | $4,761.8 | | Allowance for credit losses | $(64.8) | $(64.8) | | Loans receivable, net | $4,534.3 | $4,690.4 | | Total nonaccruing loans | $2.0 | $3.6 | | Provision for credit losses on loans (3 months ended June 30) | $0.0 | $0.0 | | Provision for credit losses on loans (6 months ended June 30) | $0.0 | $0.5 | - Nonaccruing loans decreased from $3.57 million at December 31, 2024, to $2.04 million at June 30, 2025, with no allowance required for certain collateral-dependent loans[45][46] - The Company uses an internal risk rating system (Satisfactory, Watch, Special Mention, Substandard, Doubtful, Loss) to categorize loans based on perceived risk[55][56][57][58][59][60][61] NOTE 7: INVESTMENTS IN LIMITED PARTNERSHIPS The Company invests in Affordable Housing Partnerships and Community Development Entities, with increased federal tax credit usage and investment amortization for affordable housing - The Company had 21 Affordable Housing Partnerships with a net carrying value of $100.9 million at June 30, 2025, and expects to utilize $99.7 million in federal tax credits through 2034[67][68] Tax Credit Usage and Investment Amortization (In Millions) | Item | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :--- | :--- | :--- | :--- | :--- | | Federal affordable housing tax credits usage | $3.2 | $2.8 | $6.4 | $5.6 | | Affordable housing investment amortization | $2.7 | $2.5 | $5.6 | $5.1 | | Federal new market tax credits usage | $0.0 | $0.0 | $0.1 | $0.1 | | New market investment amortization | $0.0 | $0.0 | $0.1 | $0.1 | | Federal rehabilitation/historic tax credits usage | $0.0 | $0.1 | $0.0 | $0.2 | | Rehabilitation/historic investment amortization | $0.0 | $0.1 | $0.0 | $0.1 | - The Company had one Community Development Entity investment with a net carrying value of $149 thousand at June 30, 2025[71] NOTE 8: OTHER REAL ESTATE OWNED AND REPOSSESSIONS Other real estate owned and repossessions remained stable at $6.04 million, generating income in 2025 compared to expenses in the prior year, primarily from rental income Other Real Estate Owned and Repossessions (In Millions) | Category | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :--- | :--- | :--- | | Commercial real estate | $6.0 | $6.0 | | Consumer | $0.0 | $0.0 | | Total | $6.0 | $6.0 | Expenses (Income) on Other Real Estate Owned and Repossessions (In Millions) | Item | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :--- | :--- | :--- | :--- | :--- | | Net loss (gain) on sales | $0.0 | $0.0 | $0.0 | $0.0 | | Operating expenses (income), net of rental income | $(0.2) | $0.3 | $(0.2) | $0.4 | | Total | $(0.2) | $0.3 | $(0.2) | $0.3 | - Residential mortgage loans totaling $70 thousand were in foreclosure process at June 30, 2025[79] NOTE 9: PREMISES AND EQUIPMENT Premises and equipment, net, increased to $134.3 million, with operating lease costs decreasing and income from owned leased facilities increasing Premises and Equipment, Net (In Millions) | Item | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :--- | :--- | :--- | | Land | $39.4 | $39.3 | | Buildings and improvements | $108.6 | $107.5 | | Furniture, fixtures and equipment | $73.1 | $69.9 | | Operating leases right of use asset | $5.9 | $6.4 | | Less: accumulated depreciation | $(92.6) | $(90.7) | | Total Premises and Equipment, net | $134.3 | $132.5 | Operating Lease Costs and Income (In Millions) | Item | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :--- | :--- | :--- | :--- | :--- | | Operating lease costs | $0.4 | $0.4 | $0.8 | $0.9 | | Income from owned leased facilities | $0.4 | $0.3 | $0.7 | $0.7 | - At June 30, 2025, the weighted-average lease term was 6.5 years with a weighted-average discount rate of 3.99%[82] NOTE 10: DEPOSITS Total deposits increased to $4.68 billion at June 30, 2025, driven by brokered deposits and interest-bearing accounts, with approximately 35% of total deposits uninsured Deposits (In Millions, Except Interest Rates) | Category | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :--- | :--- | :--- | | Non-interest-bearing accounts | $859.9 | $842.9 | | Interest-bearing checking and savings accounts | $2,233.2 | $2,214.7 | | Certificate accounts | $757.7 | $775.8 | | Brokered deposits | $833.3 | $772.1 | | Total Deposits | $4,684.1 | $4,605.5 | | Weighted Average Interest Rate (Interest-bearing checking and savings) | 1.41% | 1.39% | | Weighted Average Interest Rate (Brokered deposits) | 4.44% | 4.61% | - Approximately 35% of total deposits were uninsured at June 30, 2025 (including consolidated subsidiaries), or 15% excluding them[87] - Brokered deposits included $300 million of purchased funds through the IntraFi Financial network, with a daily floating interest rate[87] NOTE 11: ADVANCES FROM FEDERAL HOME LOAN BANK The Company had no outstanding term advances from the FHLBank but maintained overnight borrowings, with significant collateral pledged and a substantial line of credit available - No outstanding term advances from the Federal Home Loan Bank (FHLB) of Des Moines at June 30, 2025, or December 31, 2024[88] - Investment securities ($292.5 million) and loans ($2.17 billion) were pledged as collateral for FHLB borrowings at June 30, 2025[89] - The Bank had $1.22 billion remaining available on its line of credit with the FHLB of Des Moines at June 30, 2025[89] NOTE 12: SECURITIES SOLD UNDER REVERSE REPURCHASE AGREEMENTS AND SHORT-TERM BORROWINGS Short-term borrowings and securities sold under reverse repurchase agreements decreased significantly, primarily due to the repayment of Federal Reserve Bank BTFP borrowings Securities Sold Under Reverse Repurchase Agreements and Short-Term Borrowings (In Millions) | Item | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :--- | :--- | :--- | | Notes payable – Community Development Equity Funds | $0.9 | $1.2 | | Securities sold under reverse repurchase agreements | $54.8 | $64.4 | | Short-term borrowings from Federal Reserve Bank | $0.0 | $180.0 | | Overnight borrowings from the Federal Home Loan Bank | $369.0 | $333.0 | | Total | $424.7 | $578.7 | - The $180 million borrowing under the Federal Reserve Bank's Bank Term Funding Program (BTFP) was repaid in full in January 2025[91] - Securities sold under reverse repurchase agreements are treated as financings, with underlying securities held by the Bank and agreements typically maturing in one month or less[92] NOTE 13: SUBORDINATED NOTES The Company redeemed all $75.0 million of its subordinated notes on June 15, 2025, resulting in no outstanding subordinated notes at period end - On June 15, 2025, the Company redeemed all $75.0 million aggregate principal amount of its subordinated notes at 100% of their principal amount plus accrued interest[96] Subordinated Notes (In Millions) | Item | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :--- | :--- | :--- | | Subordinated notes | $0.0 | $75.0 | | Less: unamortized debt issuance costs | $0.0 | $0.1 | | Net subordinated notes | $0.0 | $74.9 | - Amortization of debt issuance costs totaled $50 thousand for the three months and $124 thousand for the six months ended June 30, 2025[97] NOTE 14: INCOME TAXES The Company's effective tax rate remained stable for the three months and increased slightly for the six months ended June 30, 2025, remaining below the statutory federal rate due to tax credits and tax-exempt investments Effective Tax Rates and Provision for Income Taxes (In Millions) | Item | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :--- | :--- | :--- | :--- | :--- | | Provision for Income Taxes | $4.5 | $3.9 | $8.8 | $7.0 | | Effective Tax Rate | 18.5% | 18.5% | 19.2% | 18.8% | | Tax at statutory rate (21.0%) | $5.1 | $4.4 | $9.6 | $7.9 | | U.S. federal tax credits (primarily low-income housing) | $(0.9) | $(0.8) | $(1.7) | $(1.7) | - The effective tax rates are below the statutory federal tax rate of 21% primarily due to U.S. federal tax credits (e.g., low-income housing) and nontaxable interest and dividends[100][303] - The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, and the Company is currently assessing its expected impact on consolidated financial statements[99] NOTE 15: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS The Company categorizes fair value measurements into a three-level hierarchy, with recurring measurements primarily Level 2 and nonrecurring measurements including Level 3 collateral-dependent loans - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (other observable inputs), and Level 3 (significant unobservable inputs)[104] Fair Value Measurements of Assets and Liabilities (Recurring, In Millions) | Item | June 30, 2025 (Fair Value, Millions) | Level | | :--- | :--- | :--- | | Agency mortgage-backed securities | $302.2 | 2 | | Agency collateralized mortgage obligations | $116.0 | 2 | | States and political subdivisions securities | $51.8 | 2 | | Small Business Administration securities | $57.6 | 2 | | Interest rate derivative asset | $6.2 | 2 | | Interest rate derivative liability | $(14.1) | 2 | - Collateral-dependent loans are classified as Nonrecurring Level 3, while mortgage loans held for sale are Nonrecurring Level 2[110][111] Estimated Fair Values of Financial Instruments Not Recorded at Fair Value (In Millions) | Item | June 30, 2025 (Carrying Amount, Millions) | June 30, 2025 (Fair Value, Millions) | Hierarchy Level | | :--- | :--- | :--- | :--- | | Held-to-maturity securities | $183.1 | $163.8 | 2 | | Loans, net of allowance for credit losses | $4,534.3 | $4,403.9 | 3 | | Deposits | $4,684.1 | $4,681.2 | 3 | | Subordinated notes | $0.0 | $0.0 | 2 | NOTE 16: DERIVATIVES AND HEDGING ACTIVITIES The Company uses interest rate derivatives for risk management, including nondesignated hedges and cash flow hedges, which impacted AOCI and net interest income - The Company uses derivative financial instruments (primarily interest rate swaps) for interest rate risk management and as a service to qualifying loan customers[122] - Nondesignated hedges (customer swaps and offsetting swaps) resulted in net losses of $28 thousand (three months) and $52 thousand (six months) recognized in non-interest income for June 30, 2025[124] Effect of Cash Flow Hedge Accounting on Statements of Comprehensive Income (In Millions) | Item | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :--- | :--- | :--- | :--- | :--- | | Terminated interest rate swap, net of income taxes | $(1.6) | $(1.6) | $(3.1) | $(3.1) | | Active interest rate swaps, net of income taxes | $2.7 | $(0.0) | $6.9 | $(3.0) | | Total | $1.1 | $(1.6) | $3.7 | $(6.1) | - Active cash flow hedges (two $200 million swaps) resulted in a reduction of loan interest income of $1.8 million (three months) and $3.5 million (six months) for June 30, 2025, as floating rates exceeded fixed rates[130] NOTE 17: OPERATING SEGMENTS The Company's sole operating segment is its banking operation, providing a full range of financial services and loan products, with performance assessed by the chief executive officer - The Company's banking operation is its only operating segment, engaged in originating various loans and funding them through deposits and borrowings[139] - The chief executive officer, as the chief operating decision maker, reviews actual net income versus budgeted net income and comparable periods to assess performance and make resource allocation decisions[140] Banking Segment Financial Results (In Millions) | Item | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $51.0 | $46.8 | $100.3 | $91.6 | | Non-interest Income | $8.2 | $9.8 | $14.8 | $16.6 | | Non-interest Expense | $35.0 | $36.4 | $69.8 | $70.8 | | Net Income | $19.8 | $17.0 | $36.9 | $30.4 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial condition and results of operations, including forward-looking statements, critical accounting policies, economic conditions, and performance comparisons Forward-looking Statements This section identifies forward-looking statements, cautioning that actual results may differ materially due to various factors, and the Company declines any obligation to update them - Forward-looking statements are identified by words like 'may,' 'might,' 'could,' 'should,' 'will likely result,' 'are expected to,' 'will continue,' 'is anticipated,' 'believe,' 'estimate,' 'project,' 'intends' or similar expressions[144] - Actual results could differ materially from forward-looking statements due to factors such as changes in economic conditions, interest rate fluctuations, bank failures, lending risks, liquidity access, real estate values, technological changes, cyber-attacks, legislative/regulatory changes, and competition[145] - The Company does not undertake any obligation to publicly release revisions to forward-looking statements[146] Critical Accounting Policies, Judgments and Estimates Management highlights the allowance for credit losses and valuation of foreclosed assets as critical accounting policies, with goodwill and intangible assets tested annually for impairment - The allowance for credit losses and valuation of foreclosed assets are considered critical accounting policies due to the high degree of judgment and complexity involved[149][152] - The CECL methodology for credit losses uses average historical loss rates, adjusted for current conditions and reasonable and supportable forecasts of macroeconomic variables (e.g., unemployment, GDP, real estate price index)[150] - Goodwill and intangible assets are tested for impairment at least annually; as of June 30, 2025, management believes no impairment existed[153][157] Goodwill and Intangible Assets (In Millions) | Item | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :--- | :--- | :--- | | Goodwill – Branch acquisitions | $5.4 | $5.4 | | Arena Naming Rights | $4.5 | $4.7 | | Total | $9.9 | $10.1 | Current Economic Conditions The U.S. economy shows moderate real GDP growth, easing inflation, stable employment, and mixed housing market signals, while commercial real estate faces varying conditions - Real GDP in 2025 is projected to rise 1.5% annually, an increase from prior forecasts, with 2026 and 2027 projections slightly decreasing[164] - The national unemployment rate slightly decreased to 4.1% in June 2025, with 147 thousand jobs added, primarily in healthcare, social assistance, and government[165] - Existing-home sales decreased 2.7% in June 2025, with total housing inventory up 15.9% year-over-year, and the median existing-home sales price rose 2% to $435.3 thousand[167][168] - U.S. multi-family market experienced strong demand recovery in H1 2025, with overall vacancy at 8.2% in June 2025[174][177] - Office market vacancy rose slightly to 14.1%, while retail market vacancy remained steady at 4.3%[184][185] - Industrial market vacancy reached a decade-long high of 7.4%[188] General (Overview of Financial Performance) The Company's profitability is driven by net interest income, credit loss provisions, and non-interest income/expense, with total assets decreasing by 2.1% to $5.85 billion due to reduced net outstanding loans - Profitability depends primarily on net interest income, provisions for credit losses, and the level of non-interest income and non-interest expense[191] - Total assets decreased $127.0 million (2.1%) from $5.98 billion at December 31, 2024, to $5.85 billion at June 30, 2025[192] - Net outstanding loans decreased $156.1 million to $4.53 billion at June 30, 2025, primarily in construction, commercial real estate, commercial business, and one- to four-family residential loans, partially offset by other residential (multi-family) loans[192] - The Company's strategy focuses on maintaining credit risk and interest rate risk at appropriate levels through underwriting standards, monitoring, and geographic/product diversity[193] Comparison of Financial Condition at June 30, 2025 and December 31, 2024 Total assets decreased by $127.0 million, primarily due to reduced net loans and short-term borrowings, while stockholders' equity increased due to net income and improved fair values of securities and hedges - Total assets decreased by $127.0 million to $5.85 billion at June 30, 2025, primarily due to a decrease in loans[226] Key Balance Sheet Changes (June 30, 2025 vs. December 31, 2024, In Millions) | Item | June 30, 2025 (Millions) | December 31, 2024 (Millions) | Change (Millions) | % Change | | :--- | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $245.9 | $195.8 | $50.1 | 25.6% | | Available-for-sale securities | $527.5 | $533.3 | $(5.8) | (1.1%) | | Held-to-maturity securities | $183.1 | $187.4 | $(4.3) | (2.3%) | | Net loans | $4,534.3 | $4,690.4 | $(156.1) | (3.3%) | | Total deposits | $4,684.1 | $4,605.5 | $78.6 | 1.7% | | Short-term borrowings and other interest-bearing liabilities | $369.9 | $514.2 | $(144.3) | (28.1%) | | Total stockholders' equity | $622.4 | $599.6 | $22.8 | 3.8% | - The decrease in short-term borrowings was primarily due to the repayment of BTFP borrowings in January 2025 and subordinated notes in June 2025, partially offset by an increase in brokered deposits[231][235] - Stockholders' equity increased due to net income, stock option exercises, and a decrease in accumulated other comprehensive loss (driven by increased fair value of AFS securities and cash flow hedges), partially offset by common stock repurchases and dividends[237] Comparison of Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024 Net income increased for both the three and six months ended June 30, 2025, driven by higher net interest income and lower non-interest expenses, despite a decrease in non-interest income Total Interest Income Total interest income remained stable for the three months ended June 30, 2025, but increased for the six-month period, driven by higher interest income from investment securities and other interest-earning assets Total Interest Income (In Millions) | Period | 2025 (Millions) | 2024 (Millions) | Change (Millions) | % Change | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $81.0 | $80.9 | $0.0 | 0.1% | | Six Months Ended June 30 | $161.2 | $158.3 | $2.9 | 1.8% | - The increase in interest income on investment securities and other interest-earning assets was due to higher average balances and average rates[240][241] - Interest income from loans decreased for the three-month period due to lower average rates, partially offset by higher average balances[240] Interest Income – Loans Loan interest income decreased for the three months ended June 30, 2025, due to lower average yields, but increased for the six-month period due to higher average loan balances, with active interest rate swaps reducing income Interest Income on Loans (In Millions) | Period | 2025 (Millions) | 2024 (Millions) | Change (Millions) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $73.8 | $74.3 | $(0.5) | | Six Months Ended June 30 | $146.9 | $145.4 | $1.5 | - Average yield on loans decreased from 6.37% (Q2 2024) to 6.26% (Q2 2025), primarily due to a reduction in the federal funds rate in late 2024[242] - A terminated interest rate swap (March 2020) contributed $2.0 million (three months) and $4.0 million (six months) to interest income in 2025, expected to continue until October 2025[244] - Active interest rate swaps (July 2022) reduced loan interest income by $1.8 million (three months) and $3.5 million (six months) in 2025, as floating rates exceeded fixed rates[247] Interest Income – Investments and Other Interest-earning Assets Interest income from investments increased due to higher average balances and rates, while interest income from other interest-earning assets decreased due to lower average interest rates Interest Income on Investments and Other Interest-earning Assets (In Millions) | Item | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :--- | :--- | :--- | :--- | :--- | | Investment securities | $6.1 | $5.3 | $12.2 | $10.4 | | Interest-earning deposits in other banks | $1.0 | $1.3 | $2.1 | $2.6 | | Total | $7.1 | $6.6 | $14.3 | $12.9 | - Interest income on investments increased by $752 thousand (three months) and $1.8 million (six months) in 2025, driven by higher average balances and rates from new purchases[249][250] - Interest income on other interest-earning assets decreased by $239 thousand (three months) and $445 thousand (six months) in 2025, primarily due to a decline in average interest rates following federal funds rate cuts[251][252] Total Interest Expense Total interest expense decreased for both the three and six months ended June 30, 2025, primarily due to lower interest expense on deposits and subordinated notes Total Interest Expense (In Millions) | Period | 2025 (Millions) | 2024 (Millions) | Change (Millions) | % Change | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $30.0 | $34.1 | $(4.1) | (12.0%) | | Six Months Ended June 30 | $60.9 | $66.7 | $(5.8) | (8.6%) | - Interest expense on deposits decreased by $3.4 million (three months) and $6.5 million (six months) in 2025[253][254] - Interest expense on subordinated notes decreased by $196 thousand for both periods due to redemption[253][254] Interest Expense – Deposits Interest expense on demand, savings, and time deposits decreased due to lower average rates and balances, while brokered deposits interest expense increased due to higher average balances Interest Expense on Deposits (In Millions) | Category | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :--- | :--- | :--- | :--- | :--- | | Demand and savings deposits | $7.8 | $9.8 | $15.6 | $19.3 | | Time deposits | $6.5 | $9.1 | $13.2 | $18.2 | | Brokered deposits | $10.1 | $8.9 | $20.1 | $17.9 | | Total Deposits | $24.4 | $27.8 | $49.0 | $55.4 | - Interest expense on demand and savings deposits decreased by $2.0 million (three months) and $3.7 million (six months) in 2025 due to lower average rates[255][256] - Interest expense on time deposits decreased by $2.6 million (three months) and $5.0 million (six months) in 2025, driven by lower average balances and rates as older CDs repriced[257][258] - Interest expense on brokered deposits increased by $1.1 million (three months) and $2.2 million (six months) in 2025, primarily due to higher average balances, despite lower average rates on newly issued brokered deposits[259][261] 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, while interest expense on short-term borrowings and reverse repurchase agreements showed mixed changes, and subordinated debentures and notes interest expense decreased - FHLBank term advances were not utilized during the three or six months ended June 30, 2025 and 2024[262] - Interest expense on short-term borrowings (including overnight FHLBank and BTFP borrowings) decreased by $399 thousand (three months) but increased by $1.0 million (six months) in 2025, reflecting lower average rates but higher average balances for the six-month period[265][266] - Interest expense on subordinated debentures decreased by $65 thousand (three months) and $137 thousand (six months) in 2025 due to lower average interest rates[267][268] - Interest expense on subordinated notes decreased by $196 thousand for both periods due to the redemption of the $75.0 million notes on June 15, 2025[269] Net Interest Income Net interest income increased for both the three and six months ended June 30, 2025, driven by an expanded net interest margin Net Interest Income and Margin | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net interest income (Millions) | $51.0 | $46.8 | $100.3 | $91.6 | | Net interest margin | 3.68% | 3.43% | 3.63% | 3.38% | | Interest rate spread | 3.09% | 2.77% | 3.05% | 2.71% | - The net interest margin increased by 25 basis points for both the three-month and six-month periods[270][271] - The overall average interest rate spread increased by 32 basis points (three months) and 34 basis points (six months), primarily due to a decrease in the weighted average rate paid on interest-bearing liabilities[272][273] Provision for and Allowance for Credit Losses No provision expense for outstanding loans was recorded for the three or six months ended June 30, 2025, with the allowance for credit losses remaining stable and deemed adequate - No provision expense was recorded on the portfolio of outstanding loans for the three or six months ended June 30, 2025[278] - Net recoveries were $111 thousand (three months) and $55 thousand (six months) for June 30, 2025, lower than the prior year[278] - The allowance for credit losses as a percentage of total loans was 1.41% at June 30, 2025, compared to 1.36% at December 31, 2024, and is considered adequate by management[279] Non-performing Assets Non-performing assets decreased to $8.1 million at June 30, 2025, primarily due to a decrease in non-performing loans, while potential problem loans slightly increased Non-performing Assets (In Millions) | Item | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :--- | :--- | :--- | | Non-performing assets | $8.1 | $9.6 | | Non-performing loans | $2.0 | $3.5 | | Foreclosed assets | $6.0 | $6.0 | - Non-performing assets as a percentage of total assets decreased to 0.14% at June 30, 2025, from 0.16% at December 31, 2024[280] - Potential problem loans increased slightly to $7.2 million at June 30, 2025, from $7.1 million at December 31, 2024[283] - Loans classified as 'Watch' increased to $26.4 million at June 30, 2025, primarily due to one $11.0 million loan secured by a nursing care facility[289] Non-interest Income Non-interest income decreased for both the three and six months ended June 30, 2025, primarily due to a reduction in 'other income' and lower net gains on loan sales Non-interest Income (In Millions) | Item | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :--- | :--- | :--- | :--- | :--- | | Total Non-Interest Income | $8.2 | $9.8 | $14.8 | $16.6 | | Other income | $1.9 | $3.5 | $2.9 | $4.6 | | Net gains on loan sales | $0.9 | $1.1 | $1.5 | $1.8 | | Late charges and fees on loans | $0.3 | $0.1 | $0.6 | $0.3 | - Other income decreased by $1.6 million (three months) and $1.7 million (six months) in 2025, mainly because the prior year included a $2.7 million gain from a terminated software vendor agreement[290][292] - Net gains on loan sales decreased by $234 thousand (three months) and $310 thousand (six months) due to fewer fixed-rate single-family mortgage loans originated and sold[291][293] - Late charges and fees on loans increased by $204 thousand (three months) and $280 thousand (six months), primarily due to prepayment fees on a large commercial real estate loan[292][293] Non-interest Expense Non-interest expense decreased for both the three and six months ended June 30, 2025, driven by reductions in legal, audit, and other professional fees, and a shift to income in other real estate owned Non-interest Expense (In Millions) | Item | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :--- | :--- | :--- | :--- | :--- | | Total Non-Interest Expense | $35.0 | $36.4 | $69.8 | $70.8 | | Legal, audit and other professional fees | $0.9 | $1.9 | $2.0 | $3.6 | | Expense (income) on other real estate owned | $(0.2) | $0.3 | $(0.2) | $0.3 | | Other operating expenses | $2.1 | $2.6 | $3.9 | $4.3 | | Net occupancy and equipment expense | $8.4 | $7.8 | $17.0 | $15.7 | | Salaries and employee benefits | $20.0 | $19.9 | $40.1 | $39.5 | - Legal, audit and other professional fees decreased by $935 thousand (three months) and $1.6 million (six months) in 2025, due to lower costs related to core systems conversion[294][298] - Expense on other real estate owned shifted to income of $168 thousand (three months) and $238 thousand (six months) in 2025, primarily due to rental income from a newly acquired office building[295][299] - Net occupancy and equipment expenses increased by $594 thousand (three months) and $1.3 million (six months) in 2025, mainly due to computer license and support expenses for core systems upgrades[297][301] Provision for Income Taxes The Company's effective tax rate remained stable for the three months and increased slightly for the six months ended June 30, 2025, staying below the statutory federal rate due to tax credits and tax-exempt investments Effective Tax Rates | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three Months Ended June 30 | 18.5% | 18.5% | | Six Months Ended June 30 | 19.2% | 18.8% | - Effective tax rates are below the 21% statutory federal tax rate due to utilization of investment tax credits and tax-exempt investments/loans[303] - The Company expects its effective tax rate (combined federal and state) to be approximately 18.0% to 20.0% in future periods[303] Average Balances, Interest Rates and Yields This section details average balances, interest income/expense, and yields/rates for interest-earning assets and interest-bearing liabilities, showing an increase in net interest income and margin Average Balances, Interest Income/Expense, and Yields/Rates (Three Months Ended June 30, In Millions) | Item | Average Balance (2025, Millions) | Interest (2025, Millions) | Yield/Rate (2025) | Average Balance (2024, Millions) | Interest (2024, Millions) | Yield/Rate (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total loans receivable | $4,732.7 | $73.8 | 6.26% | $4,690.2 | $74.3 | 6.37% | | Total interest-earning assets | $5,557.5 | $81.0 | 5.84% | $5,483.7 | $80.9 | 5.94% | | Total deposits | $3,878.9 | $24.4 | 2.52% | $3,812.6 | $27.8 | 2.93% | | Total interest-bearing liabilities | $4,380.2 | $30.0 | 2.75% | $4,329.3 | $34.1 | 3.17% | | Net interest income | | $51.0 | | | $46.8 | | | Net interest margin | | | 3.68% | | | 3.43% | Average Balances, Interest Income/Expense, and Yields/Rates (Six Months Ended June 30, In Millions) | Item | Average Balance (2025, Millions) | Interest (2025, Millions) | Yield/Rate (2025) | Average Balance (2024, Millions) | Interest (2024, Millions) | Yield/Rate (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total loans receivable | $4,744.3 | $146.9 | 6.24% | $4,678.0 | $145.4 | 6.25% | | Total interest-earning assets | $5,578.2 | $161.2 | 5.83% | $5,459.9 | $158.3 | 5.83% | | Total deposits | $3,882.5 | $49.0 | 2.54% | $3,831.5 | $55.4 | 2.91% | | Total interest-bearing liabilities | $4,420.8 | $60.9 | 2.78% | $4,298.1 | $66.7 | 3.12% | | Net interest income | | $100.3 | | | $91.6 | | | Net interest margin | | | 3.63% | | | 3.38% | - Net loan fees included in interest income were $1.1 million for both three-month periods and $2.1 million (2025) vs. $2.3 million (2024) for the six-month periods[305] Rate/Volume Analysis This analysis attributes changes in net interest income primarily to changes in interest rates for both the three and six months ended June 30, 2025 Rate/Volume Analysis (Three Months Ended June 30, 2025 vs. 2024, In Millions) | Item | Change Due to Rate (Millions) | Change Due to Volume (Millions) | Total Increase (Decrease) (Millions) | | :--- | :--- | :--- | :--- | | Loans receivable | $(0.9) | $0.5 | $(0.5) | | Investment securities | $0.5 | $0.3 | $0.8 | | Total interest-earning assets | $(0.7) | $0.7 | $0.0 | | Total deposits | $(4.2) | $0.8 | $(3.4) | | Total interest-bearing liabilities | $(4.7) | $0.6 | $(4.1) | | Net interest income | $4.1 | $0.1 | $4.1 | Rate/Volume Analysis (Six Months Ended June 30, 2025 vs. 2024, In Millions) | Item | Change Due to Rate (Millions) | Change Due to Volume (Millions) | Total Increase (Decrease) (Millions) | | :--- | :--- | :--- | :--- | | Loans receivable | $(0.1) | $1.6 | $1.5 | | Investment securities | $1.0 | $0.8 | $1.8 | | Total interest-earning assets | $0.4 | $2.5 | $2.9 | | Total deposits | $(7.6) | $1.2 | $(6.5) | | Total interest-bearing liabilities | $(8.4) | $2.6 | $(5.8) | | Net interest income | $8.8 | $(0.2) | $8.7 | Liquidity The Company maintains strong liquidity through diverse funding sources, with significant cash provided by operating and investing activities, while financing activities used cash for debt repayments and stock repurchases - Primary sources of funds include customer deposits, brokered deposits, FHLBank advances, other borrowings, loan repayments, and unpledged securities[313] Available Secured Lines and On-Balance Sheet Liquidity (In Millions) | Item | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :--- | :--- | :--- | | Federal Home Loan Bank line | $1,216.1 | $1,058.8 | | Federal Reserve Bank line | $338.9 | $346.4 | | Cash and cash equivalents | $245.9 | $195.8 | | Unpledged securities – Available-for-sale | $325.3 | $329.9 | | Unpledged securities – Held-to-maturity | $24.0 | $25.0 | - Operating activities provided $54.3 million (2025) and $16.6 million (2024) in cash for the six months ended June 30[316] - Financing activities used $175.1 million in cash (2025) primarily due to repayments of FRB borrowings and subordinated notes, and stock repurchases[318] Capital Resources The Company and Bank maintain strong capital positions, exceeding regulatory minimums, with total stockholders' equity increasing to $622.4 million due to net income and improved fair values of securities and hedges Capital Ratios (June 30, 2025) | Ratio | Bank | Company | | :--- | :--- | :--- | | Common equity Tier 1 capital ratio | 13.1% | 13.0% | | Tier 1 capital ratio | 13.1% | 13.5% | | Total capital ratio | 14.4% | 14.7% | | Tier 1 leverage ratio | 11.2% | 11.5% | - Both the Company and the Bank were 'well capitalized' at June 30, 2025, exceeding all minimum regulatory capital ratios[326] - Total stockholders' equity increased $22.8 million to $622.4 million at June 30, 2025, due to net income, stock option exercises, and a $13.0 million decrease in accumulated other comprehensive loss[324] - The Company redeemed $75.0 million of subordinated notes on June 15, 2025, using FHLB overnight borrowings for replacement funds[329] Non-GAAP Financial Measures This section presents the non-GAAP tangible common equity to tangible assets ratio, used by management to assess capital strength and facilitate peer comparison by excluding intangible assets - The tangible common equity to tangible assets ratio is a non-GAAP financial measure used to assess capital strength and facilitate peer comparison by excluding intangible assets[338] Non-GAAP Reconciliation: Ratio of Tangible Common Equity to Tangible Assets (In Millions) | Item | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :--- | :--- | :--- | | Common equity at period end | $622.4 | $599.6 | | Less: Intangible assets at period end | $9.9 | $10.1 | | Tangible common equity at period end (a) | $612.5 | $589.5 | | Total assets at period end | $5,854.7 | $5,981.6 | | Less: Intangible assets at period end | $9.9 | $10.1 | | Tangible assets at period end (b) | $5,844.8 | $5,971.5 | | Tangible common equity to tangible assets (a) / (b) | 10.48% | 9.87% | Item 3. Quantitative and Qualitative Disclosures About Market Risk This section details the Company's management of interest rate risk, its most significant market risk, using models and interest rate swaps to forecast impacts on net interest income and market value of portfolio equity - Interest rate risk is the Company's most significant market risk, managed by monitoring asset and liability sensitivity to market interest rate changes[342][343] - Models indicate that rising interest rates are expected to have a modestly positive impact on net interest income, while declining rates are expected to have a mostly neutral impact in the first twelve months following minor changes[344] - The Federal Funds rate was 4.50% at June 30, 2025, after decreases in late 2024, with expectations of further methodical decreases in 2025[345] - The loan portfolio includes $1.60 billion tied to SOFR indexes, $731.1 million to prime rate, and $10.3 million to AMERIBOR, nearly all of which are at or above their floor rates and expected to move with future market rate changes[346] - The Company uses interest rate swaps for interest rate risk management, including customer-facing swaps hedged by offsetting third-party swaps, and cash flow hedges for floating rate loans[353][354][356][357] Item 4. Controls and Procedures As of June 30, 2025, the Company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - Disclosure controls and procedures were effective as of June 30, 2025, ensuring accurate and timely reporting of information required under the Exchange Act[361] - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[362] - Internal control over financial reporting provides only reasonable, not absolute, assurance against errors and fraud due to inherent limitations such as faulty judgments, breakdowns, circumvention by individuals, or management override[363] PART II. OTHER INFORMATION Item 1. Legal Proceedings The Company and its subsidiaries are subject to various legal actions in the normal course of business, with management believing current litigation will not have a material adverse effect - The Company is subject to pending and threatened legal actions in the normal course of business[364] - Management believes the outcome of current litigation will not have a material adverse effect on the Company's business, financial condition, or results of operations[364] - One litigation matter alleging breach of fiduciary duty is set for trial in Q3 2025, where the Bank believes it will prevail or be indemnified[365] Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the risk factors set forth in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2024[366] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The Company continued its common stock repurchase program, repurchasing 175,998 shares during the three months ended June 30, 2025, and approved a new program for up to one million additional shares - The Company repurchased 175,998 shares of common stock at an average price of $55.11 per share during the three months ended June 30, 2025[371] - Approximately 94 thousand shares remained available under the November 2022 stock repurchase authorization at June 30, 2025[334] - A new stock repurchase program authorizing the purchase of up to one million additional shares was approved in April 2025, to become effective upon completion of the existing program[335][368] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities during the reported period - None[372] Item 4. Mine Safety Disclosures This item is not applicable to the Company - Not applicable[373] Item 5. Other Information No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[373] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including plans of acquisition, articles of incorporation, bylaws, material contracts, certifications, and XBRL financial statements - Exhibits include plans of acquisition, articles of incorporation, bylaws, instruments defining security holders' rights, material contracts, certifications (CEO, Treasurer, Sarbanes-Oxley Act), and XBRL financial statements[374][375][376][378] SIGNATURES - The report was signed on August 7, 2025, by Joseph W. Turner, President and Chief Executive Officer, and Rex A. Copeland, Treasurer[382]