GREAT SOUTHERN BANCORP, INC. - FORM 10-Q

Attached files

file	filename
EX-32 - GREAT SOUTHERN BANCORP, INC.	ex-32.htm
EX-31.2 - GREAT SOUTHERN BANCORP, INC.	ex31-2.htm
EX-31.1 - GREAT SOUTHERN BANCORP, INC.	ex31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

SECURITIES ACT OF 1934

For the Quarterly Period ended March 31, 2011

Commission File Number 0-18082

GREAT SOUTHERN BANCORP, INC.

(Exact name of registrant as specified in its charter)

Maryland		43-1524856
(State of Incorporation)		(IRS Employer Identification Number)

1451 E. Battlefield, Springfield, Missouri		65804
(Address of Principal Executive Offices)		(Zip Code)

(417) 887-4400
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes /X/ No / /

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

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

(Check one):

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

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

Yes / / No /X/

The number of shares outstanding of each of the registrant's classes of common stock: 13,454,914 shares of common stock, par value $.01, outstanding at May 4, 2011.

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(In thousands, except number of shares)

	MARCH 31,		DECEMBER 31,
	2011		2010
	(Unaudited)
ASSETS
Cash	$	72,836	$	69,756
Interest-bearing deposits in other financial institutions		389,461		360,215
Cash and cash equivalents		462,297		429,971
Available-for-sale securities		838,178		769,546
Held-to-maturity securities (fair value $1,270 – March 2011;
$1,300 - December 2010)		1,125		1,125
Mortgage loans held for sale		7,401		22,499
Loans receivable, net of allowance for loan losses of
$41,834 – March 2011; $41,487 - December 2010		1,888,493		1,876,887
FDIC indemnification asset		87,410		100,878
Interest receivable		11,667		12,628
Prepaid expenses and other assets		50,674		52,390
Foreclosed assets held for sale, net		61,872		60,262
Premises and equipment, net		73,098		68,352
Goodwill and other intangible assets		5,188		5,395
Investment in Federal Home Loan Bank stock		11,524		11,572
Total Assets	$	3,498,927	$	3,411,505

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits	$	2,675,706	$	2,595,893
Federal Home Loan Bank advances		152,261		153,525
Securities sold under reverse repurchase agreements with customers		266,220		257,180
Short-term borrowings		660		778
Structured repurchase agreements		53,129		53,142
Subordinated debentures issued to capital trusts		30,929		30,929
Accrued interest payable		3,558		3,765
Advances from borrowers for taxes and insurance		1,196		1,019
Accounts payable and accrued expenses		9,395		10,395
Current and deferred income taxes		670		870
Total Liabilities		3,193,724		3,107,496
Stockholders' Equity:
Capital stock
Serial preferred stock, $.01 par value; authorized 1,000,000 shares; issued and outstanding 58,000 shares		56,601		56,480
Common stock, $.01 par value; authorized 20,000,000 shares; issued and outstanding March 2011 - 13,454,489 shares;
December 2010 - 13,454,000 shares		134		134
Stock warrants; 909,091 shares		2,452		2,452
Additional paid-in capital		20,818		20,701
Retained earnings		222,653		220,021
Accumulated other comprehensive gain		2,545		4,221
Total Stockholders' Equity		305,203		304,009
Total Liabilities and Stockholders' Equity	$	3,498,927	$	3,411,505

See Notes to Consolidated Financial Statements

GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

	THREE MONTHS ENDED MARCH 31,
	2011			2010
INTEREST INCOME	(Unaudited)
Loans	$	42,084		$	32,194
Investment securities and other		6,956			7,560
TOTAL INTEREST INCOME		49,040			39,754
INTEREST EXPENSE
Deposits		7,486			10,657
Federal Home Loan Bank advances		1,297			1,397
Short-term borrowings and repurchase agreements		756			993
Subordinated debentures issued to capital trusts		140			136
TOTAL INTEREST EXPENSE		9,679			13,183
NET INTEREST INCOME		39,361			26,571
PROVISION FOR LOAN LOSSES		8,200			5,500
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		31,161			21,071

NON-INTEREST INCOME
Commissions		2,437			2,066
Service charges and ATM fees		4,063			4,583
Net realized gains on sales of loans		907			793
Late charges and fees on loans		122			204
Accretion (amortization) of income related to business acquisitions		(9,754	)		900
Other income		453			451
TOTAL NON-INTEREST INCOME		(1,772	)		8,997

NON-INTEREST EXPENSE
Salaries and employee benefits		11,573			11,036
Net occupancy and equipment expense		3,690			3,489
Postage		755			832
Insurance		1,446			1,133
Advertising		275			218
Office supplies and printing		278			463
Telephone		625			542
Legal, audit and other professional fees		762			665
Expense on foreclosed assets		429			2,167
Other operating expenses		1,776			1,598
TOTAL NON-INTEREST EXPENSE		21,609			22,143

INCOME BEFORE INCOME TAXES		7,780			7,925

PROVISION FOR INCOME TAXES		1,887			2,387

NET INCOME		5,893			5,538
PREFERRED STOCK DIVIDENDS AND DISCOUNT ACCRETION		845			839
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	5,048		$	4,699
BASIC EARNINGS PER COMMON SHARE	$	0.38		$	0.35
DILUTED EARNINGS PER COMMON SHARE	$	0.36		$	0.34
DIVIDENDS DECLARED PER COMMON SHARE	$	.18		$	.18

See Notes to Consolidated Financial Statements

GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

	THREE MONTHS ENDED MARCH 31,
	2011			2010
	(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	5,893		$	5,538
Proceeds from sales of loans held for sale		52,100			33,441
Originations of loans held for sale		(36,831	)		(30,154	)
Items not requiring (providing) cash:
Depreciation		1,206			788
Amortization		561			264
Compensation expense for stock option grants		119			112
Provision for loan losses		8,200			5,500
Net gains on loan sales		(907	)		(793	)
Net (gains) losses on sale of premises and equipment		168			(5	)
Loss on sale of foreclosed assets		266			858
Amortization (accretion) of deferred income, premiums and discounts		9,510			(1,326	)
Deferred income taxes		(4,245	)		(285	)
Changes in:
Interest receivable		961			1,100
Prepaid expenses and other assets		4,988			(81	)
Accounts payable and accrued expenses		(1,207	)		(249	)
Income taxes refundable/payable		4,947			(4,583	)
Net cash provided by operating activities		45,729			10,125
CASH FLOWS FROM INVESTING ACTIVITIES
Net (increase) decrease in loans		(27,545	)		19,687
Purchase of loans		--			(11,242	)
Proceeds from sale of student loans		--			17,527
Purchase of additional business units		(2	)		--
Purchase of premises and equipment		(3,537	)		(1,785	)
Proceeds from sale of premises and equipment		86			22
Proceeds from sale of foreclosed assets		4,635			6,852
Capitalized costs on foreclosed assets		(164	)		(267	)
Proceeds from maturing held-to-maturity investment securities		1,202			--
Proceeds from called investment securities		6,645			2,110
Principal reductions on mortgage-backed securities		32,999			38,750
Purchase of available-for-sale securities		(112,823	)		(9,992	)
Redemption of Federal Home Loan Bank stock		48			142
Net cash (used in) provided by investing activities		(98,456	)		61,804
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in certificates of deposit		19,967			30,470
Net increase in checking and savings deposits		60,188			51,656
Repayments of Federal Home Loan Bank advances		(1,059	)		(3,181	)
Net increase (decrease) in short-term borrowings and structured repo		8,922			(26,456	)
Advances from borrowers for taxes and insurance		177			(7	)
Dividends paid		(3,146	)		(3,137	)
Stock options exercised		4			301
Net cash provided by financing activities		85,053			49,646
INCREASE IN CASH AND CASH EQUIVALENTS		32,326			121,575
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		429,971			444,576
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	462,297		$	566,151

See Notes to Consolidated Financial Statements

GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements of Great Southern Bancorp, Inc. (the "Company" or "Great Southern") have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The financial statements presented herein reflect all adjustments which are, in the opinion of management, necessary to fairly present the financial condition, results of operations and cash flows of the Company for the periods presented. Those adjustments consist only of normal recurring adjustments. Operating results for the three months ended March 31, 2011 and 2010 are not necessarily indicative of the results that may be expected for the full year. The consolidated statement of financial condition of the Company as of December 31, 2010, has been derived from the audited consolidated statement of financial condition of the Company as of that date. Certain prior periods' amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on net income.

Certain information and note disclosures normally included in the Company's annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for 2010 filed with the Securities and Exchange Commission.

NOTE 2: OPERATING SEGMENTS

The Company's banking operation is its only reportable segment. The banking operation is principally engaged in the business of originating residential and commercial real estate loans, construction loans, commercial business loans and consumer loans and funding these loans through deposits attracted from the general public and correspondent account relationships, brokered deposits and borrowings from the Federal Home Loan Bank ("FHLBank") and others. The operating results of this segment are regularly reviewed by management to make decisions about resource allocations and to assess performance.

Revenue from segments below the reportable segment threshold is attributable to three operating segments of the Company. These segments include insurance services, travel services and investment services. Selected information is not presented separately for the Company's reportable segment, as there is no material difference between that information and the corresponding information in the consolidated financial statements.

NOTE 3: COMPREHENSIVE INCOME

The FASB’s Accounting Standards Codification (“FASB ASC”) Topic 220 requires the reporting of comprehensive income and its components. Comprehensive income is defined as the change in equity from transactions and other events and circumstances from non-owner sources, and excludes investments by and distributions to owners. Comprehensive income includes net income and other items of comprehensive income meeting the above criteria. The Company's only component of other comprehensive income is the unrealized gains and losses on available-for-sale securities.

	Three Months Ended March 31,
	2011			2010
	(In Thousands)

Net unrealized loss on available-for-sale securities	$	(2,712	)	$	(602	)

Net unrealized gain (loss) on available-for-sale debt securities for which a portion of an other-than-temporary impairment has been recognized		134			(435	)

Other comprehensive loss, before tax effect		(2,578	)		(1,037	)

Tax benefit		(902	)		(363	)

Change in unrealized loss on available-for-sale securities, net of income taxes	$	(1,676	)	$	(674	)

The components of accumulated other comprehensive income, included in stockholders’ equity, are as follows:

	March 31, 2011				December 31, 2010
		(In Thousands)

Net unrealized gain on available-for-sale securities	$		4,567		$	7,279
Net unrealized loss on available-for-sale debt securities for which a portion of an other-than-temporary impairment has been recognized in income			(651	)		(785	)
			3,916			6,494
Tax expense			1,371			2,273

Net-of-tax amount	$		2,545		$	4,221

NOTE 4: RECENT ACCOUNTING PRONOUNCEMENTS

In April 2011, the FASB issued Accounting Standards Update (ASU) No. 2011-03 to amend FASB ASC Topic 860, Transfers and Servicing. ASC 860 outlines when the transfer of financial assets under a repurchase agreement may or may not be accounted for as a sale. Whether the transferring entity maintains effective control over the transferred financial assets provides the basis for such a determination. The previous requirement that the transferor must have the ability to repurchase or redeem the financial assets before the maturity of the agreement is removed from the assessment of effective control by this Update. The Update is effective on a prospective basis for interim and annual reporting periods beginning on or after December 15, 2011, and is not expected to have a material impact on the Company’s financial position or results of operations.

In April 2011, the FASB issued ASU No. 2011-02 to amend FASB ASC Subtopic 310-40, Receivables – Troubled Debt Restructurings by Creditors. The statement clarifies guidance used by creditors to identify troubled debt restructurings and to result in more consistent application of GAAP for debt restructurings. The guidance is effective

for interim and annual reporting periods beginning after June 15, 2011, and is not expected to have a material impact on the Company’s financial position or results of operations.

In December 2010, the FASB issued ASU No. 2010-28, Intangibles – Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts. The update modifies step one of the impairment test for reporting units with zero or negative carrying amounts. Entities with such reporting units must now perform step two of the impairment test when qualitative factors indicate it is more likely than not that impairment exists. The amendment was effective for the Company January 1, 2011. The adoption of this Update did not have a material impact on the Company’s financial position or results of operations.

In July 2010, the FASB issued ASU No. 2010-20, Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowances for Credit Losses. This Update requires expanded disclosures to help financial statement users understand the nature of credit risks inherent in a creditor’s portfolio of financing receivables; how that risk is analyzed and assessed in arriving at the allowance for credit losses; and the changes, and reasons for those changes, in both the receivables and the allowance for credit losses. The disclosures should be prepared on a disaggregated basis and provide a roll-forward schedule of the allowance for credit losses and detailed information on financing receivables including, among other things, recorded balances, nonaccrual status, impairments, credit quality indicators, details for troubled debt restructurings and an aging of past due financing receivables. Disclosures required as of the end of a reporting period were effective for the Company December 31, 2010, while disclosures required for activity occurring during a reporting period were effective for the Company January 1, 2011. The adoption of this Update did not have a material impact on the Company’s financial position or results of operations.

In January 2010, the FASB issued ASU No. 2010-06, Improving Disclosures about Fair Value Measurements (FASB ASU 2010-09), which amends FASB ASC Subtopic 820-10, Fair Value Measurements and Disclosures. This Update requires new disclosures to show significant transfers in and out of Level 1 and Level 2 fair value measurements as well as discussion regarding the reasons for the transfers. It also clarifies existing disclosures requiring fair value measurement disclosures for each class of assets and liabilities. The Update describes a class as being a subset of assets and liabilities within a line item on the statement of financial condition which will require management judgment to designate. Use of the terminology “classes of assets and liabilities” represents an amendment from the previous terminology “major categories of assets and liabilities.” Clarification is also provided for disclosures of Level 2 and Level 3 recurring and nonrecurring fair value measurements requiring discussion about the valuation techniques and inputs used. These provisions of the Update were effective January 1, 2010. Another new disclosure requires an expanded reconciliation of activity in Level 3 fair value measurements to present information about purchases, sales, issuances and settlements on a gross basis rather than netting the amounts in one number. This requirement was effective for the Company January 1, 2011. The adoption of this Update did not have a material impact on the Company’s financial position or results of operations.

NOTE 5: STOCKHOLDERS' EQUITY

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

NOTE 6: EARNINGS PER SHARE

	Three Months Ended
	March 31,
	2011		2010
	(In Thousands, Except Per Share Data)

Basic:
Average shares outstanding		13,454		13,418
Net income available to common shareholders	$	5,048	$	4,699
Per share amount	$	0.38	$	0.35

Diluted:
Average shares outstanding		13,454		13,418
Net effect of dilutive stock options and warrants – based on the treasury
stock method using average market price		569		599
Diluted shares		14,023		14,017
Net income available to common shareholders	$	5,048	$	4,699
Per share amount	$	0.36	$	0.34

Options to purchase 498,535 and 430,695 shares of common stock were outstanding during the three months ended March 31, 2011 and 2010, respectively, but were not included in the computation of diluted earnings per share for each period because the options’ exercise price was greater than the average market price of the common shares.

NOTE 7: INVESTMENT SECURITIES

	March 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Tax Equivalent Yield
	(In Thousands)
AVAILABLE-FOR-SALE SECURITIES:
U.S. government agencies	$	23,943	$	—	$	74	$	23,869	2.56	%
Collateralized mortgage obligations		6,462		157		809		5,810	6.85
Mortgage-backed securities		648,201		9,380		3,352		654,229	3.21
Small Business Administration loan pools		59,557		729		—		60,286	2.02
Corporate bonds		49		120		—		169	41.87
States and political subdivisions		94,820		451		3,846		91,425	6.18
Equity securities		1,230		1,160		—		2,390	0.17
Total available-for-sale securities	$	834,262	$	11,997	$	8,081	$	838,178	3.47	%

HELD-TO-MATURITY SECURITIES:
States and political subdivisions	$	1,125	$	145	$	—	$	1,270	7.31	%

	December 31, 2010
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Tax Equivalent Yield
	(In Thousands)
AVAILABLE-FOR-SALE SECURITIES:
U.S. government agencies	$	4,000	$	—	$	20	$	3,980		2.35	%
Collateralized mortgage obligations		8,311		183		814		7,680		6.48
Mortgage-backed securities		590,085		10,879		1,753		599,211		3.30
Small Business Administration loan pools		60,063		851		—		60,914		1.93
States and political subdivisions		99,314		378		4,075		95,617		6.16
Corporate bonds		49		—		28		21		74.97
Equity securities		1,230		893		—		2,123		0.18
Total available-for-sale securities	$	763,052	$	13,184	$	6,690	$	769,546		3.59	%

HELD-TO-MATURITY SECURITIES:
States and political subdivisions	$	1,125	$	175	$	—	$	1,300		7.31	%

The amortized cost and fair value of available-for-sale securities at March 31, 2011, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized		Fair
	Cost		Value
	(In Thousands)

After one through five years	$	6,214	$	6,221
After five through ten years		9,415		9,481
After ten years		162,740		160,047
Securities not due on a single maturity date		654,663		660,039
Equity securities		1,230		2,390

	$	834,262	$	838,178

The held-to-maturity securities at March 31, 2011, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized		Fair
	Cost		Value
	(In Thousands)

After five through ten years	$	1,125	$	1,270

	$	1,125	$	1,270

Certain investments in debt and marketable equity securities are reported in the financial statements at an amount less than their historical cost. Total fair value of these investments at March 31, 2011 and December 31, 2010, respectively, was approximately $415,011,000 and $298,813,000, which is approximately 49.45% and 38.77% of the Company’s available-for-sale and held-to-maturity investment portfolio, respectively.

Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information and information obtained from regulatory filings, management believes the declines in fair value for these debt securities are temporary at March 31, 2011.

The following table shows the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2011 and December 31, 2010:

	March 31, 2011
	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In Thousands)

U.S. government agencies	$	23,869	$	74	$	—	$	—	$	23,869	$	74
Mortgage-backed securities		331,536		3,352		—		—		331,536		3,352
Collateralized mortgage obligations		—		—		1,518		809		1,518		809
State and political subdivisions		52,773		2,085		5,315		1,761		58,088		3,846

	$	408,178	$	5,511	$	6,833	$	2,570	$	415,011	$	8,081

	December 31, 2010
	Less than 12 Months				12 Months or More				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In Thousands)

U.S. government agencies	$	3,980	$	20	$	—	$	—	$	3,980	$	20
Mortgage-backed securities		231,524		1,753		—		—		231,524		1,753
Collateralized mortgage obligations		—		—		1,809		814		1,809		814
State and political subdivisions		56,221		2,328		5,257		1,747		61,478		4,075
Corporate bonds		8		24		14		4		22		28

	$	291,733	$	4,125	$	7,080	$	2,565	$	298,813	$	6,690

No securities were sold during the three months ended March 31, 2011 and 2010, and therefore, no gains or losses were realized. Gains and losses on sales of securities are determined on the specific-identification method.

Other-than-temporary Impairment. Upon acquisition of a security, the Company decides whether it is within the scope of the accounting guidance for beneficial interests in securitized financial assets or will be evaluated for impairment under the accounting guidance for investments in debt and equity securities.

The accounting guidance for beneficial interests in securitized financial assets provides incremental impairment guidance for a subset of the debt securities within the scope of the guidance for investments in debt and equity securities. For securities where the security is a beneficial interest in securitized financial assets, the Company uses the beneficial interests in securitized financial asset impairment model. For securities where the security is not a beneficial interest in securitized financial assets, the Company uses debt and equity securities impairment model. The Company does not currently have securities within the scope of this guidance for beneficial interests in securitized financial assets.

The Company routinely conducts periodic reviews to identify and evaluate each investment security to determine whether an other-than-temporary impairment has occurred. The Company considers the length of time a security has been in an unrealized loss position, the relative amount of the unrealized loss compared to the carrying value of the security, the type of security and other factors. If certain criteria are met, the Company performs additional review and evaluation using observable market values or various inputs in economic models to determine if an unrealized loss is other-than-temporary. The Company uses quoted market prices for marketable equity securities and uses broker pricing quotes based on observable inputs for equity investments that are not traded on a stock exchange. For non-agency collateralized mortgage obligations, to determine if the unrealized loss is other-than-temporary, the Company projects total estimated defaults of the underlying assets (mortgages) and multiplies that calculated amount by an estimate of realizable value upon sale in the marketplace (severity) in order to determine the projected collateral loss.

The Company also evaluates any current credit enhancement underlying these securities to determine the impact on cash flows. If the Company determines that a given security position will be subject to a write-down or loss, the Company records the expected credit loss as a charge to earnings.

Based on evaluations of investment securities during the three months ended March 31, 2011 and 2010, none were determined to be other-than-temporarily impaired.

Credit Losses Recognized on Investments. Certain debt securities have experienced fair value deterioration due to credit losses.

The following table provides information about debt securities for which only a credit loss was recognized in income and other losses are recorded in other comprehensive income.

	Accumulated
	Credit Losses
	(In Thousands)
Credit losses on debt securities held
January 1, 2010	$	2,983
Additions related to other-than-temporary losses not previously recognized		—
Reductions due to sales		—

March 31, 2010	$	2,983

	Accumulated
	Credit Losses
	(In Thousands)
Credit losses on debt securities held
January 1, 2011	$	2,983
Additions related to other-than-temporary losses not previously recognized		—
Reductions due to sales		—

March 31, 2011	$	2,983

NOTE 8: LOANS AND ALLOWANCE FOR LOAN LOSSES

	March 31, 2011			December 31, 2010
	(In Thousands)
One- to four-family residential construction	$	33,315		$	29,102
Subdivision construction		80,510			86,649
Land development		85,939			95,573
Commercial construction		78,559			68,018
Owner occupied one- to four-family residential		99,312			98,099
Non-owner occupied one- to four-family residential		137,301			136,984
Commercial real estate		547,463			530,277
Other residential		230,483			210,846
Commercial business		175,273			185,865
Industrial revenue bonds		63,851			64,641
Consumer auto		52,812			48,992
Consumer other		75,314			77,331
Home equity lines of credit		46,154			46,852
FDIC-supported loans, net of discounts (TeamBank)		142,510			144,633
FDIC-supported loans, net of discounts (Vantus Bank)		154,077			160,163
		2,002,873			1,984,025
Undisbursed portion of loans in process		(69,994	)		(63,108	)
Allowance for loan losses		(41,834	)		(41,487	)
Deferred loan fees and gains, net		(2,552	)		(2,543	)
	$	1,888,493		$	1,876,887
Weighted average interest rate		5.99	%		6.03	%

Classes of loans by aging were as follows:

	March 31, 2011
	30-59 Days Past Due		60-89 Days Past Due		Over 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Still Accruing
	(In Thousands)
One- to four-family residential construction	$	—	$	—	$	637	$	637	$	32,678	$	33,315	$	—
Subdivision construction		1,875		238		3,939		6,052		74,458		80,510		—
Land development		—		—		1,807		1,807		84,132		85,939		—
Commercial construction		—		—		—		—		78,559		78,559		—
Owner occupied one- to four- family residential		3,374		74		3,027		6,475		92,837		99,312		108
Non-owner occupied one- to four-family residential		1,445		397		3,245		5,087		132,214		137,301		—
Commercial real estate		212		30		16,225		16,467		530,996		547,463		—
Other residential		—		—		3,135		3,135		227,348		230,483		—
Commercial business		116		296		1,261		1,673		173,600		175,273		—
Industrial revenue bonds		—		—		2,190		2,190		61,661		63,851		—
Consumer auto		291		19		82		392		52,420		52,812		6
Consumer other		1,041		333		944		2,318		72,996		75,314		302
Home equity lines of credit		26		139		355		520		45,634		46,154		—
FDIC-supported loans, net of discounts (TeamBank)		5,436		34		27,252		32,722		109,788		142,510		—
FDIC-supported loans, net of discounts (Vantus Bank)		4,140		907		7,752		12,799		141,278		154,077		7
		17,956		2,467		71,851		92,274		1,910,599		2,002,873	$	423
Less FDIC-supported loans, net of discounts		9,576		941		35,004		45,521		251,066		296,587

Total	$	8,380	$	1,526	$	36,847	$	46,753	$	1,659,533	$	1,706,286

	December 31, 2010
	30-59 Days Past Due		60-89 Days Past Due		Over 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans > 90 Days and Still Accruing
	(In Thousands)
One- to four-family residential construction	$	261	$	—	$	578	$	839	$	28,263	$	29,102	$	—
Subdivision construction		281		1,015		1,860		3,156		83,493		86,649		—
Land development		2,730		—		5,668		8,398		87,175		95,573		—
Commercial construction		—		—		—		—		68,018		68,018		—
Owner occupied one- to four- family residential		4,856		914		2,724		8,494		89,605		98,099
Non-owner occupied one- to four-family residential		2,085		2,130		2,831		7,046		129,938		136,984		—
Commercial real estate		2,749		8,546		6,074		17,369		512,908		530,277		—
Other residential		—		4,011		4,202		8,213		202,633		210,846		—
Commercial business		350		355		1,642		2,347		183,518		185,865		—
Industrial revenue bonds		—		—		2,190		2,190		62,451		64,641		—
Consumer auto		427		35		94		556		48,436		48,992		22
Consumer other		1,331		318		1,417		3,066		74,265		77,331		565
Home equity lines of credit		152		160		140		452		46,400		46,852		—
FDIC-supported loans, net of discounts (TeamBank)		2,719		3,731		13,285		19,735		124,898		144,633		—
FDIC-supported loans, net of discounts (Vantus Bank)		2,277		1,414		9,399		13,090		147,073		160,163		—
		20,218		22,629		52,104		94,951		1,889,074		1,984,025	$	587
Less FDIC-supported loans, net of discounts		4,996		5,145		22,684		32,825		271,971		304,796

Total	$	15,222	$	17,484	$	29,420	$	62,126	$	1,617,103	$	1,679,229

Nonaccruing loans are summarized as follows:

	March 31,		December 31,
	2011		2010
	(In Thousands)

One- to four-family residential construction	$	637	$	578
Subdivision construction		3,939		1,860
Land development		1,807		5,668
Commercial construction		—		—
Owner occupied one- to four-family residential		2,919		2,724
Non-owner occupied one- to four-family residential		3,245		2,831
Commercial real estate		16,225		6,074
Other residential		3,135		4,202
Commercial business		1,261		1,642
Industrial revenue bonds		2,190		2,190
Consumer auto		76		72
Consumer other		642		852
Home equity lines of credit		355		140

Total	$	36,431	$	28,833

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2011. Also presented are the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of March 31, 2011:

	One- to Four- Family Residential and Construction			Other Residential and Construction			Commercial Real Estate			Commercial Construction			Commercial Business			Consumer			Total
	(In Thousands)
Allowance for loan losses
Balance January 1, 2011	$	11,483		$	3,866		$	14,336		$	5,852		$	3,281		$	2,669		$	41,487
Provision charged to expense		3,238			893			3,212			797			(30	)		90			8,200
Losses charged off		(3,201	)		(962	)		(1,743	)		(1,418	)		(792	)		(890	)		(9,006	)
Recoveries		26			1			2			4			551			569			1,153
Balance March 31, 2011	$	11,546		$	3,798		$	15,807		$	5,235		$	3,010		$	2,438		$	41,834

Ending balance:
Individually evaluated for impairment	$	3,171		$	1,128		$	3,590		$	1,447		$	532		$	54		$	9,922
Collectively evaluated for impairment	$	8,375		$	2,670		$	12,217		$	3,758		$	1,678		$	2,384		$	31,082
Loans acquired and accounted for under ASC 310-30	$	—		$	—		$	—		$	30		$	800		$	—		$	830

Loans
Individually evaluated for impairment	$	43,522		$	27,475		$	75,111		$	37,629		$	9,728		$	870		$	194,335
Collectively evaluated for impairment	$	306,916		$	203,008		$	536,203		$	126,870		$	165,545		$	173,409		$	1,511,951
Loans acquired and accounted for under ASC 310-30	$	70,958		$	23,849		$	124,179		$	26,760		$	14,298		$	36,543		$	296,587

The following table presents the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of December 31, 2010:

	One- to Four Family Residential and Construction		Other Residential and Construction		Commercial Real Estate		Commercial Construction		Other Commercial		Consumer		Total
	(In Thousands)
Allowance for loan losses
Individually evaluated for impairment	$	4,353	$	1,714	$	3,089	$	2,083	$	784	$	37	$	12,060
Collectively evaluated for impairment	$	7,100	$	2,152	$	11,247	$	3,769	$	1,697	$	2,632	$	28,597
Loans acquired and accounted for under ASC 310-30	$	—	$	—	$	—	$	30	$	800	$	—	$	830

Loans
Individually evaluated for impairment	$	40,562	$	25,246	$	72,379	$	45,334	$	8,340	$	622	$	192,483
Collectively evaluated for impairment	$	310,272	$	185,600	$	522,539	$	118,257	$	177,525	$	172,553	$	1,486,746
Loans acquired and accounted for under ASC 310-30	$	75,727	$	23,277	$	128,704	$	22,858	$	15,215	$	39,015	$	304,796

Impaired loans are summarized as follows:

	March 31, 2011
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
	(In Thousands)

One- to four-family residential construction	$	1,840	$	2,268	$	122	$	1,759	$	9
Subdivision construction		8,365		9,327		1,403		9,504		61
Land development		12,928		13,644		1,447		14,436		163
Commercial construction		—		—		—		1,234		—
Owner occupied one- to four-family residential		5,352		5,789		855		5,298		24
Non-owner occupied one- to four-family residential		9,291		10,208		742		10,442		103
Commercial real estate		28,682		30,890		3,480		28,663		256
Other residential		9,901		10,784		1,128		12,364		98
Commercial business		4,691		5,570		532		7,030		49
Industrial revenue bonds		2,190		2,190		110		2,190		—
Consumer auto		124		141		5		414		3
Consumer other		809		918		33		583		4
Home equity lines of credit		400		415		65		351		1

Total	$	84,573	$	92,144	$	9,922	$	94,268	$	771

	December 31, 2010
	Recorded Balance		Unpaid Principal Balance		Specific Allowance		Average Investment in Impaired Loans		Interest Income Recognized
	(In Thousands)

One- to four-family residential construction	$	1,947	$	2,371	$	258	$	1,724	$	83
Subdivision construction		9,894		10,560		2,326		7,850		415
Land development		17,957		21,006		1,925		18,760		534
Commercial construction		1,851		1,851		158		458		31
Owner occupied one- to four-family residential		5,205		5,620		542		3,612		69
Non-owner occupied one- to four-family residential		11,785		12,267		1,227		8,182		386
Commercial real estate		25,782		26,392		3,045		10,615		603
Other residential		9,768		9,869		1,714		8,123		140
Commercial business		9,722		12,495		828		2,630		114
Consumer auto		125		137		4		30		1
Consumer other		429		481		14		93		4
Home equity lines of credit		148		166		19		109		1

Total	$	94,613	$	103,215	$	12,060	$	62,186	$	2,381

Included in certain loan categories in the impaired loans are troubled debt restructurings that were classified as impaired. At March 31, 2011, the Company had $8.3 million of construction loans, $5.6 million of residential mortgage loans, $10.1 million of commercial real estate loans, $133,000 of commercial business loans and $227,000 of consumer loans that were modified in troubled debt restructurings and impaired. At December 31, 2010, the Company had $6.5 million of construction loans, $5.5 million of residential mortgage loans, $8.2 million of commercial real estate loans, $57,000 of other commercial loans and $150,000 of consumer loans that were modified in troubled debt restructurings and impaired.

The company reviews the credit quality of its loan portfolio using an internal grading system that classifies loans as “Satisfactory,” “Watch,” Special Mention” and “Substandard.” Substandard loans are characterized by the distinct possibility that the Bank will sustain some loss if certain deficiencies are not corrected. Special mention loans possess potential weaknesses that deserve management’s close attention but do not expose the Bank to a degree of risk that warrants substandard classification. 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. Loans not meeting any of the criteria previously described are considered satisfactory. The FDIC-covered loans are evaluated using this internal grading system. However, since the loans are accounted for in pools and are currently substantially covered through loss sharing agreements with the FDIC, all of the loan pools were considered satisfactory at March 31, 2011 and December 31, 2010, respectively. See Note 9 for further discussion of the acquired loan pools and loss sharing agreements. The loan grading system is presented by loan class below:

		March 31, 2011
		Satisfactory		Watch		Special Mention		Substandard		Total
	(In Thousands)
One- to four-family residential construction		$	30,520	$	1,887	$	—	$	908	$	33,315
Subdivision construction			62,324		11,380		—		6,806		80,510
Land development			52,982		20,734		—		12,223		85,939
Commercial construction			73,887		4,672		—		—		78,559
Owner occupied one- to four-family residential			93,645		529		—		5,138		99,312
Non-owner occupied one- to four-family residential			120,428		8,804		—		8,069		137,301
Commercial real estate			474,541		45,581		2,590		24,751		547,463
Other residential			203,008		18,774		—		8,701		230,483
Commercial business			165,545		5,117		—		4,611		175,273
Industrial revenue bonds			61,661		—		—		2,190		63,851
Consumer auto			52,706		—		—		106		52,812
Consumer other			74,914		—		—		400		75,314
Home equity lines of credit			45,790		—		—		364		46,154
FDIC-supported loans, net of discounts (TeamBank)			142,510		—		—		—		142,510
FDIC-supported loans, net of discounts (Vantus Bank)			154,077		—		—		—		154,077

Total		$	1,808,538	$	117,478	$	2,590	$	74,267	$	2,002,873

	December 31, 2010
	Satisfactory		Watch		Special Mention		Substandard		Total
	(In Thousands)
One- to four-family residential construction	$	27,620	$	549	$	—	$	933	$	29,102
Subdivision construction		69,907		8,408		—		8,334		86,649
Land development		57,486		20,834		—		17,253		95,573
Commercial construction		60,770		5,397		—		1,851		68,018
Owner occupied one- to four-family residential		92,385		766		—		4,948		98,099
Non-owner occupied one- to four-family residential		120,360		6,471		—		10,153		136,984
Commercial real estate		460,088		46,805		2,574		20,810		530,277
Other residential		185,600		15,478		—		9,768		210,846
Commercial business		177,525		812		—		7,528		185,865
Industrial revenue bonds		62,451		—		—		2,190		64,641
Consumer auto		48,883		—		—		109		48,992
Consumer other		76,966		—		—		365		77,331
Home equity lines of credit		46,704		—		—		148		46,852
FDIC-supported loans, net of discounts (TeamBank)		144,633		—		—		—		144,633
FDIC-supported loans, net of discounts (Vantus Bank)		160,163		—		—		—		160,163

Total	$	1,791,541	$	105,520	$	2,574	$	84,390	$	1,984,025

NOTE 9: LOSS SHARING AGREEMENTS AND FDIC INDEMNIFICATION ASSETS

On March 20, 2009, Great Southern Bank entered into a purchase and assumption agreement with loss share with the Federal Deposit Insurance Corporation (FDIC) to assume all of the deposits (excluding brokered deposits) and acquire certain assets of TeamBank, N.A., a full service commercial bank headquartered in Paola, Kansas. A detailed discussion of this transaction is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, under the section titled “Item 8. Financial Statements and Supplementary Information.”

The loans, commitments and foreclosed assets purchased in the TeamBank transaction are covered by a loss sharing agreement between the FDIC and Great Southern Bank which affords the Bank significant protection. Under the loss sharing agreement, the Bank will share in the losses on assets covered under the agreement (referred to as covered assets). On losses up to $115.0 million, the FDIC has agreed to reimburse the Bank for 80% of the losses. On losses exceeding $115.0 million, the FDIC has agreed to reimburse the Bank for 95% of the losses. Realized losses covered by the loss sharing agreement include loan contractual balances (and related unfunded commitments that were acquired), accrued interest on loans for up to 90 days, the book value of foreclosed real estate acquired, and certain direct costs, less cash or other consideration received by the Bank. This agreement extends for ten years for 1-4 family real estate loans and for five years for other loans. The value of this loss sharing agreement was considered in determining fair values of loans and foreclosed assets acquired. The loss sharing agreement is subject to the Bank following servicing procedures as specified in the agreement with the FDIC. The expected reimbursements under the loss sharing agreement were recorded as an indemnification asset at their preliminary estimated fair value on the acquisition date. A discount was recorded in conjunction with the fair value of the acquired loans and the amount accreted to yield during the three months ended March 31, 2011 was $748,000 and $300,000, respectively.

On September 4, 2009, Great Southern Bank entered into a purchase and assumption agreement with loss share with the FDIC to assume all of the deposits and acquire certain assets of Vantus Bank, a full service thrift headquartered in Sioux City, Iowa. A detailed discussion of this transaction is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, under the section titled “Item 8. Financial Statements and Supplementary Information.”

The loans, commitments and foreclosed assets purchased in the Vantus Bank transaction are covered by a loss sharing agreement between the FDIC and Great Southern Bank which affords the Bank significant protection. Under the loss

sharing agreement, the Bank will share in the losses on assets covered under the agreement (referred to as covered assets). On losses up to $102.0 million, the FDIC has agreed to reimburse the Bank for 80% of the losses. On losses exceeding $102.0 million, the FDIC has agreed to reimburse the Bank for 95% of the losses. Realized losses covered by the loss sharing agreement include loan contractual balances (and related unfunded commitments that were acquired), accrued interest on loans for up to 90 days, the book value of foreclosed real estate acquired, and certain direct costs, less cash or other consideration received by the Bank. This agreement extends for ten years for 1-4 family real estate loans and for five years for other loans. The value of this loss sharing agreement was considered in determining fair values of loans and foreclosed assets acquired. The loss sharing agreement is subject to the Bank following servicing procedures as specified in the agreement with the FDIC. The expected reimbursements under the loss sharing agreement were recorded as an indemnification asset at their preliminary estimated fair value on the acquisition date. A discount was recorded in conjunction with the fair value of the acquired loans and the amount accreted to yield during the three months ended March 31, 2011 was $276,000 and $250,000, respectively.

Fair Value and Expected Cash Flows. At the time of these acquisitions, the Company determined the fair value of the loan portfolios based on several assumptions. Factors considered in the valuations were projected cash flows for the loans, type of loan and related collateral, classification status, fixed or variable interest rate, term of loan, current discount rates and whether or not the loan was amortizing. Loans were grouped together according to similar characteristics and were treated in the aggregate when applying various valuation techniques. Management also estimated the amount of credit losses that were expected to be realized for the loan portfolios. The discounted cash flow approach was used to value each pool of loans. For non-performing loans, fair value was estimated by calculating the present value of the recoverable cash flows using a discount rate based on comparable corporate bond rates. This valuation of the acquired loans is a significant component leading to the valuation of the loss sharing assets recorded.

The amount of the estimated cash flows expected to be received from the acquired loan pools in excess of the fair values recorded for the loan pools is referred to as the accretable yield. The accretable yield is recognized as interest income over the estimated lives of the loans. The Company continues to evaluate the fair value of the loans including cash flows expected to be collected. Increases in the Company’s cash flow expectations are recognized as increases to the accretable yield while decreases are recognized as impairments through the allowance for loan losses. During the quarter ended March 31, 2011, an increase in expected cash flows related to both acquired loan portfolios resulted in a $1.7 million adjustment to the accretable yield to be spread over the estimated remaining lives of the loans on a level-yield basis. During the year-ended December 31, 2010, similar such adjustments totaling $58.9 million were made to the accretable yield. The total impact of all accretable yield adjustments on the three months ended March 31, 2011 was an increase in interest income of $12.7 million. The current period increase in expected cash flows also reduced the amount of expected reimbursements under the loss sharing agreements. This resulted in a corresponding $1.4 million adjustment to the indemnification assets to be amortized on a level-yield basis over the remainder of the loss sharing agreements or the remaining expected lives of the loan pools, whichever is shorter. During the year-ended December 31, 2010, similar such adjustments totaling $51.8 million were made to the indemnification assets. The total amount of all indemnification asset adjustments impacting the three months ended March 31, 2011 was $11.3 million of amortization expense recorded in non-interest income as a reduction in income. The net impact of the two adjustments was an increase of approximately$1.4 million to pre-tax income, approximately $913,000 to net income and approximately $0.07 to diluted earnings per common share. Because these adjustments will be recognized over the estimated remaining lives of the loan pools, they will impact future periods as well. The majority of the remaining $30.2 million of accretable yield adjustment affecting interest income and $(26.3) million of adjustment to the indemnification assets affecting non-interest income is expected to be recognized over the next year, with $21.8 million of interest income and $(19.3) million of non-interest income (expense) expected to be recognized in the remainder of 2011. Additional adjustments may be recorded in future periods as the Company continues to estimate expected cash flows from the acquired loan pools.

The loss sharing asset is measured separately from the loan portfolio because it is not contractually embedded in the loans and is not transferable with the loans should the Bank choose to dispose of them. Fair value was estimated using projected cash flows available for loss sharing based on the credit adjustments estimated for each loan pool (as discussed above) and the loss sharing percentages outlined in the Purchase and Assumption Agreement with the FDIC. These cash flows were discounted to reflect the uncertainty of the timing and receipt of the loss sharing reimbursement from the FDIC. The loss sharing asset is also separately measured from the related foreclosed real estate.

TeamBank FDIC Indemnification Asset. The following tables present the balances of the FDIC indemnification asset related to the TeamBank transaction at March 31, 2011 and December 31, 2010. Gross loan balances (due from the borrower) were reduced approximately $229.6 million since the transaction date through repayments by the borrower, transfers to foreclosed assets or charge-offs to customer loan balances.

	March 31, 2011
	Loans			Foreclosed Assets
	(In Thousands)
Initial basis for loss sharing determination, net of activity since acquisition date	$	206,203		$	16,635
Non-credit premium/(discount), net of activity since acquisition date		(3,127	)		—
Reclassification from nonaccretable discount to accretable discount due to change in expected losses (net of accretion to date)		(14,368	)		—
Original estimated fair value of assets, net of activity since acquisition date		(142,510	)		(6,359	)

Expected loss remaining		46,198			10,276
Assumed loss sharing recovery percentage		85	%		78	%

Estimated loss sharing value		39,294			8,058
Indemnification asset to be amortized resulting from change in expected losses		13,641			—
Accretable discount on FDIC indemnification asset		(5,078	)		—
FDIC indemnification asset	$	47,857		$	8,058

	December 31, 2010
	Loans			Foreclosed Assets
	(In Thousands)
Initial basis for loss sharing determination, net of activity since acquisition date	$	219,289		$	15,921
Non-credit premium/(discount), net of activity since acquisition date		(3,875	)		—
Reclassification from nonaccretable discount to accretable discount due to change in expected losses (net of accretion to date)		(21,071	)		—
Original estimated fair value of assets, net of activity since acquisition date		(144,633	)		(5,463	)

Expected loss remaining		49,710			10,458
Assumed loss sharing recovery percentage		85	%		78	%

Estimated loss sharing value		42,275			8,204
Indemnification asset to be amortized resulting from change in expected losses		20,011			—
Accretable discount on FDIC indemnification asset		(6,077	)		—
FDIC indemnification asset	$	56,209		$	8,204

Vantus Bank Indemnification Asset. The following tables present the balances of the FDIC indemnification asset related to the Vantus Bank transaction at March 31, 2011 and December 31, 2010. Gross loan balances (due from the borrower) were reduced approximately $136.6 million since the transaction date through repayments by the borrower, transfers to foreclosed assets or charge-downs to customer loan balances.

	March 31, 2011
	Loans			Foreclosed Assets
	(In Thousands)
Initial basis for loss sharing determination, net of activity since acquisition date	$	194,919		$	9,745
Non-credit premium/(discount), net of activity since acquisition date		(1,155	)		—
Reclassification from nonaccretable discount to accretable discount due to change in expected losses (net of accretion to date)		(15,864	)		—
Original estimated fair value of assets, net of activity since acquisition date		(154,076	)		(5,793	)

Expected loss remaining		23,824			3,952
Assumed loss sharing recovery percentage		80	%		80	%

Estimated loss sharing value		19,059			3,162
Indemnification asset to be amortized resulting from change in expected losses		12,691			—
Accretable discount on FDIC indemnification asset		(3,308	)		(109	)
FDIC indemnification asset	$	28,442		$	3,053

	December 31, 2010
	Loans			Foreclosed Assets
	(In Thousands)
Initial basis for loss sharing determination, net of activity since acquisition date	$	208,080		$	9,944
Non-credit premium/(discount), net of activity since acquisition date		(1,431	)		—
Reclassification from nonaccretable discount to accretable discount due to change in expected losses (net of accretion to date)		(18,428	)		—
Original estimated fair value of assets, net of activity since acquisition date		(160,163	)		(5,899	)

Expected loss remaining		28,058			4,045
Assumed loss sharing recovery percentage		80	%		80	%

Estimated loss sharing value		22,445			3,236
Indemnification asset to be amortized resulting from change in expected losses		14,743			—
Accretable discount on FDIC indemnification asset		(3,850	)		(109	)
FDIC indemnification asset	$	33,338		$	3,127

Changes in the accretable yield for acquired loan pools were as follows for the three months ended March 31, 2011 and 2010:

	TeamBank			Vantus Bank
	(In Thousands)

Balance, January 1, 2010	$	31,300		$	39,023
Accretion		(3,619	)		(4,193	)

Balance, March 31, 2010	$	27,681		$	34,830

Balance, January 1, 2011	$	36,765		$	35,796
Accretion		(10,669	)		(8,146	)
Reclassification from nonaccretable difference(1)		1,191			4,232

Balance, March 31, 2011	$	27,287		$	31,882

(1) Represents increases in estimated cash flows expected to be received from the acquired loan pools, primarily due to lower estimated credit losses. The numbers also include changes in expected accretion of the loan pools totaling $391,000 and $1.6 million for TeamBank and Vantus Bank, respectively.

NOTE 10: FORECLOSED ASSETS HELD FOR SALE

Major classifications of foreclosed assets were as follows:

	March 31,		December 31,
	2011		2010
	(In Thousands)
One-to four-family construction	$	1,349	$	2,510
Subdivision construction		18,986		19,816
Land development		13,809		10,620
Commercial construction		3,997		3,997
One-to four-family residential		3,040		2,896
Other residential		4,178		4,178
Commercial real estate		4,043		4,565
Consumer		318		318
		49,720		48,900
FDIC-supported foreclosed assets, net of discounts		12,152		11,362
	$	61,872	$	60,262

Expenses applicable to foreclosed assets included the following:

	Three Months Ended March 31,
	2011			2010
	(In Thousands)
Net (gain) loss on sales of real estate	$	(317	)	$	1,244
Operating expenses, net of rental income		746			923

	$	429		$	2,167

NOTE 11: DEPOSITS

	March 31, 2011		December 31, 2010
	(In Thousands)
Time Deposits:
0.00% - 1.99%	$	994,022	$	838,619
2.00% - 2.99%		207,734		298,029
3.00% - 3.99%		23,012		28,398
4.00% - 4.99%		86,509		126,001
5.00% - 5.99%		7,746		8,346
6.00% - 6.99%		306		311
Total time deposits (1.58% - 1.85%)		1,319,329		1,299,704
Non-interest-bearing demand deposits		260,077		257,569
Interest-bearing demand and savings deposits (0.74% - 0.83%)		1,096,300		1,038,620
Total Deposits	$	2,675,706	$	2,595,893

NOTE 12: FAIR VALUE MEASUREMENT

ASC Topic 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Topic 820 also specifies a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Quoted prices in active markets for identical assets or liabilities (Level 1): Inputs that are quoted unadjusted prices in active markets for identical assets that the Company has the ability to access at the measurement date. An active market for the asset is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Other observable inputs (Level 2): Inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity including quoted prices for similar assets, quoted prices for securities in inactive markets and inputs derived principally from or corroborated by observable market data by correlation or other means.

·	Significant unobservable inputs (Level 3): Inputs that reflect assumptions of a source independent of the reporting entity or the reporting entity's own assumptions that are supported by little or no market activity or observable inputs.

Financial instruments are broken down as follows by recurring or nonrecurring measurement status. Recurring assets are initially measured at fair value and are required to be remeasured at fair value in the financial statements at each reporting date. Assets measured on a nonrecurring basis are assets that, due to an event or circumstance, were required to be remeasured at fair value after initial recognition in the financial statements at some time during the reporting period.

The following is a description of inputs and valuation methodologies used for assets recorded at fair value on a recurring basis and recognized in the accompanying balance sheets at March 31, 2011, as well as the general classification of such assets pursuant to the valuation hierarchy.

Securities Available for Sale. Investment securities available for sale are recorded at fair value on a recurring basis. The fair values used by the Company are obtained from an independent pricing service, which represent either quoted market prices for the identical asset or fair values determined by pricing models, or other model-based valuation techniques, that consider observable market data, such as interest rate volatilities, LIBOR yield curve, credit spreads and prices from market makers and live trading systems. Recurring Level 1 securities include exchange traded equity securities. Recurring Level 2 securities include U.S. government agency securities, mortgage-backed securities, collateralized mortgage obligations, Small Business Administration (SBA) loan pools, state and municipal bonds, corporate bonds and equity securities. Inputs used for valuing Level 2 securities include observable data that may include dealer quotes, benchmark yields, market spreads, live trading levels and market consensus prepayment speeds,

among other things. Additional inputs include indicative values derived from the independent pricing service’s proprietary computerized models. No securities were included in the category of Recurring Level 3 securities at or for the three months ended March 31, 2011.

Mortgage Servicing Rights. Mortgage servicing rights do not trade in an active, open market with readily observable prices. Accordingly, fair value is estimated using discounted cash flow models. Due to the nature of the valuation inputs, mortgage servicing rights are classified within Level 3 of the hierarchy.

			Fair value measurements at March 31, 2011, using
	Fair value March 31,		Quoted prices in active markets for identical assets		Other observable inputs		Significant unobservable inputs
	2011		(Level 1)		(Level 2)		(Level 3)
	(In Thousands)
U. S. government agencies	$	23,869	$	—	$	23,869	$	—
Collateralized mortgage obligations		5,810		—		5,810		—
Mortgage-backed securities		654,229		—		654,229		—
Small Business Administration loan pools		60,286		—		60,286		—
Corporate bonds		169		—		169		—
States and political subdivisions		91,425		—		91,425		—
Equity securities		2,390		653		1,737		—
Mortgage servicing rights		542		—		—		542

The Company considers transfers between the levels of the hierarchy to be recognized at the end of related reporting periods. From December 31, 2010 to March 31, 2011, no assets for which fair value is measured on a recurring basis transferred between any levels of the hierarchy.

The following is a reconciliation of the beginning and ending balances of recurring fair value measurements recognized in the accompanying balance sheet using significant unobservable (Level 3) inputs.

	Mortgage Servicing Rights
	2011			2010
	(In Thousands)
Balance, January 1	$	637		$	1,132
Additions		8			36
Amortization		(103	)		(108	)
Balance, March 31	$	542		$	1,060

The following is a description of valuation methodologies used for assets measured at fair value on a nonrecurring basis at March 31, 2011, as well as the general classification of such assets pursuant to the valuation hierarchy.

Impaired Loans. A loan is considered to be impaired when it is probable that all of the principal and interest due may not be collected according to its contractual terms. Generally, when a loan is considered impaired, the amount of reserve required under FASB ASC 310, Receivables, is measured based on the fair value of the underlying collateral. The Company makes such measurements on all material loans deemed impaired using the fair value of the collateral for collateral dependent loans. The fair value of collateral used by the Company is determined by obtaining an observable market price or by obtaining an appraised value from an independent, licensed or certified appraiser, using observable market data. This data includes information such as selling price of similar properties and capitalization rates of similar properties sold within the market, expected future cash flows or earnings of the subject property based on current market expectations, and other relevant factors. In addition, management may apply selling and other discounts to the underlying collateral value to determine the fair value. If an appraised value is not available, the fair value of the impaired loan is determined by an adjusted appraised value including unobservable cash flows.

The Company records impaired loans as Nonrecurring Level 3. If a loan’s fair value as estimated by the Company is less than its carrying value, the Company either records a charge-off of the portion of the loan that exceeds the fair value or establishes a reserve within the allowance for loan losses specific to the loan. Loans for which such charge-offs or reserves were recorded during the three months ended March 31, 2011 are shown in the table below (net of reserves).

Foreclosed Assets Held for Sale. Foreclosed assets held for sale are initially recorded at fair value less estimated cost to sell at the date of foreclosure. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less estimated cost to sell. Foreclosed assets held for sale are classified within Level 3 of the fair value hierarchy. The foreclosed assets represented in the table below were re-measured during the three months ended March 31, 2011, subsequent to their initial transfer to foreclosed assets.

The following table presents the fair value measurements of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2011:

			Fair Value Measurements Using
	Fair Value March 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
		(In Thousands)
Impaired loans	$	38,240	$	—	$	—	$	38,240
Foreclosed assets held for sale		700		—		—		700

The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying balance sheet at amounts other than fair value:

Cash and Cash Equivalents and Federal Home Loan Bank Stock. The carrying amount approximates fair value.

Loans and Interest Receivable. The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans with similar characteristics are aggregated for purposes of the calculations. The carrying amount of accrued interest receivable approximates its fair value.

Deposits and Accrued Interest Payable. The fair value of demand deposits and savings accounts is the amount payable on demand at the reporting date, i.e., their carrying amounts. The fair value of fixed maturity certificates of deposit is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities. The carrying amount of accrued interest payable approximates its fair value.

Federal Home Loan Bank Advances. Rates currently available to the Company for debt with similar terms and remaining maturities are used to estimate fair value of existing advances.

Short-Term Borrowings. The carrying amount approximates fair value.

Subordinated Debentures Issued to Capital Trusts. The subordinated debentures have floating rates that reset quarterly. The Company can redeem these instruments at par on a quarterly basis beginning in February (with respect to $25.8 million of the subordinated debentures) and October (with respect to the $5.2 million of subordinated debentures) 2012, respectively. The carrying amount of these debentures approximates their fair value.

Structured Repurchase Agreements. Structured repurchase agreements are collateralized borrowings from counterparties. In addition to the principal amount owed, the counterparty also determines an amount that would be owed by either party in the event the agreement is terminated prior to maturity by the Company. The fair values of the structured repurchase agreements are estimated based on the amount the Company would be required to pay to terminate the agreement at the balance sheet date.

Commitments to Originate Loans, Letters of Credit and Lines of Credit. The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the

agreements and the present creditworthiness of the counterparties. For fixed rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of letters of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date.

The following table presents estimated fair values of the Company’s financial instruments. The fair values of certain of these instruments were calculated by discounting expected cash flows, which method involves significant judgments by management and uncertainties. Fair value is the estimated amount at which financial assets or liabilities could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Because no market exists for certain of these financial instruments and because management does not intend to sell these financial instruments, the Company does not know whether the fair values shown below represent values at which the respective financial instruments could be sold individually or in the aggregate.

	March 31, 2011				December 31, 2010
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(In Thousands)
Financial assets
Cash and cash equivalents	$	462,297	$	462,297	$	429,971	$	429,971
Available-for-sale securities		838,178		838,178		769,546		769,546
Held-to-maturity securities		1,125		1,270		1,125		1,300
Mortgage loans held for sale		7,401		7,401		22,499		22,499
Loans, net of allowance for loan losses		1,888,493		1,890,008		1,876,887		1,878,345
Accrued interest receivable		11,667		11,667		12,628		12,628
Investment in FHLB stock		11,524		11,524		11,572		11,572
Mortgage servicing rights		542		542		637		637

	March 31, 2011				December 31, 2010
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(In Thousands)
Financial liabilities
Deposits	$	2,675,706	$	2,679,180	$	2,595,893	$	2,603,440
FHLB advances		152,261		156,618		153,525		158,052
Short-term borrowings		266,880		266,880		257,958		257,958
Structured repurchase agreements		53,129		59,172		53,142		61,007
Subordinated debentures		30,929		30,929		30,929		30,929
Accrued interest payable		3,558		3,558		3,765		3,765
Unrecognized financial instruments (net of contractual value)
Commitments to originate loans		—		—		—		—
Letters of credit		36		36		50		50
Lines of credit		—		—		—		—

The following disclosure relates to financial assets for which it is not practicable for the Company to estimate the fair value at March 31, 2011.

FDIC Indemnification Asset: As part of the 2009 Purchase and Assumption Agreements, the Bank and the FDIC entered into loss sharing agreements. These agreements cover realized losses on loans and foreclosed real estate.

Under the first agreement (TeamBank), the FDIC will reimburse the Bank for 80% of the first $115 million in realized losses. The FDIC will reimburse the Bank 95% on realized losses that exceed $115 million. This agreement extends for ten years for 1-4 family real estate loans and for five years for other loans. This loss sharing asset is measured separately from the loan portfolio because it is not contractually embedded in the loans and is not transferable with the loans or foreclosed assets should the Bank choose to dispose of them. Fair value at the acquisition date (March 20, 2009) was estimated using projected cash flows available for loss sharing based on the credit adjustments estimated for each loan pool and the loss sharing percentages. These cash flows were discounted to reflect the uncertainty of the timing and receipt of the loss sharing reimbursement from the FDIC. This loss sharing asset is also separately

measured from the related foreclosed real estate. At March 31, 2011, the carrying value of the FDIC indemnification asset was $55.9 million, with $13.6 million of this amount scheduled to be amortized against non-interest income over future periods as a result of the changes in expected losses recognized in the quarter ended March 31, 2011 and in previous periods. Although this asset is a contractual receivable from the FDIC, there is no effective interest rate. The Bank will collect this asset over the next several years. The amount ultimately collected will depend on the timing and amount of collections and charge-offs on the acquired assets covered by the loss sharing agreement. While this asset was recorded at its estimated fair value at March 20, 2009, it is not practicable to complete a fair value analysis of the entire portfolio of loans and foreclosed assets covered by the loss sharing agreement on a quarterly or annual basis in order to estimate the fair value of the FDIC indemnification asset.

Under the second agreement (Vantus Bank), the FDIC will reimburse the Bank for 80% of the first $102 million in realized losses. The FDIC will reimburse the Bank 95% on realized losses that exceed $102 million. This agreement extends for ten years for 1-4 family real estate loans and for five years for other loans. This loss sharing asset is measured separately from the loan portfolio because it is not contractually embedded in the loans and is not transferable with the loans or foreclosed assets should the Bank choose to dispose of them. Fair value at the acquisition date (September 4, 2009) was estimated using projected cash flows available for loss sharing based on the credit adjustments estimated for each loan pool and the loss sharing percentages. These cash flows were discounted to reflect the uncertainty of the timing and receipt of the loss sharing reimbursement from the FDIC. This loss sharing asset is also separately measured from the related foreclosed real estate. At March 31, 2011, the carrying value of the FDIC indemnification asset was $31.5 million, with $12.7 million of this amount scheduled to be amortized against non-interest income over future periods as a result of the changes in expected losses recognized in the quarter ended March 31, 2011 and in previous periods. Although this asset is a contractual receivable from the FDIC, there is no effective interest rate. The Bank will collect this asset over the next several years. The amount ultimately collected will depend on the timing and amount of collections and charge-offs on the acquired assets covered by the loss sharing agreement. While this asset was recorded at its estimated fair value at September 4, 2009, it is not practicable to complete a fair value analysis of the entire portfolio of loans and foreclosed assets covered by the loss sharing agreement on a quarterly or annual basis in order to estimate the fair value of the FDIC indemnification asset.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-looking Statements

When used in this Quarterly Report on Form 10-Q and in other filings by the Company with the Securities and Exchange Commission (the "SEC"), in the Company's press releases or other public or shareholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "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. Such statements are subject to certain risks and uncertainties, including, among other things, (i) expected cost savings, 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, might be greater than expected; (ii) changes in economic conditions, either nationally or in the Company’s market areas; (iii) fluctuations in interest rates; (iv) the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; (v) the possibility of other-than-temporary impairments of securities held in the Company’s securities portfolio; (vi) the Company’s ability to access cost-effective funding; (vii) fluctuations in real estate values and both residential and commercial real estate market conditions; (viii) demand for loans and deposits in the Company’s market areas; (ix) legislative or regulatory changes that adversely affect the Company’s business, including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act and its implementing regulations, and the new overdraft protection regulations and customers’ responses thereto; (x) monetary and fiscal policies of the Federal Reserve Board and the U.S. Government and other governmental initiatives affecting the financial services industry; (xi) results of examinations of the Company and the Bank by their regulators, including the possibility that the regulators may, among other things, require the Company to increase its allowance for loan losses or to write-down assets; (xii) the uncertainties arising from the Company’s participation in the TARP Capital Purchase Program, including impacts on employee recruitment and retention and other business and practices, uncertainties concerning the potential redemption by us of the U.S. Treasury’s preferred stock investment under the program, including the timing of, regulatory approvals for, and conditions placed upon, any such redemption and uncertainties associated with our possible participation in the U.S. Treasury’s Small Business Lending Fund; (xiii)

costs and effects of litigation, including settlements and judgments; and (xiv) competition. The Company wishes to advise readers that the factors listed above 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 with accounting principles generally accepted in the United States 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 Loan Losses and Valuation of Foreclosed Assets

The Company believes that the determination of the allowance for loan losses involves a higher degree of judgment and complexity than its other significant accounting policies. The allowance for loan losses is calculated with the objective of maintaining an allowance level believed by management to be sufficient to absorb estimated loan losses. Management's determination of the adequacy of the allowance is based on periodic evaluations of the loan portfolio and other relevant factors. However, this evaluation is inherently subjective as it requires material estimates of, including, among others, expected default probabilities, loss once loans default, expected commitment usage, the amounts and timing of expected future cash flows on impaired loans, value of collateral, estimated losses, and general amounts for historical loss experience.

The process also considers economic conditions, uncertainties in estimating losses and inherent risks in the loan portfolio. All of these factors may be susceptible to significant change. To the extent actual outcomes differ from management estimates, additional provisions for loan losses may be required that would adversely impact earnings in future periods. In addition, the Bank’s regulators could require additional provisions for loan losses as part of their examination process.

Additional discussion of the allowance for loan losses is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010, under the section titled "Item 1. Business - Allowances for Losses on Loans and Foreclosed Assets." 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 have to 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. For the periods included in these financial statements, management's overall methodology for evaluating the allowance for loan losses has not changed significantly.

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.

Carrying Value of FDIC-covered Loans and Indemnification Asset

The Company considers that the determination of the carrying value of loans acquired in the March 20, 2009 and September 4, 2009, FDIC-assisted transactions and the carrying value of the related FDIC indemnification assets involve a high degree of judgment and complexity. The carrying value of the acquired loans and the FDIC indemnification assets reflect management’s best ongoing estimates of the amounts to be realized on each of these assets. The Company determined initial fair value accounting estimates of the assumed assets and liabilities in accordance with FASB ASC 805, Business Combinations. However, the amount that the Company realizes on these assets could differ materially from the carrying value reflected in its financial statements, based upon the timing of collections on the acquired loans in future periods. Because of the loss sharing agreements with the FDIC on these assets, the Company should not incur any significant losses. To the extent the actual values realized for the acquired loans are different from the estimates, the indemnification asset will generally be impacted in an offsetting manner due to the loss sharing support from the FDIC. Subsequent to the initial valuation, the Company continues to monitor identified loan pools and related loss sharing assets for changes in estimated cash flows projected for the loan pools, anticipated credit losses and changes in the accretable yield. Analysis of these variables requires significant estimates and a high degree of judgment. See Note 9 “Loss Sharing Agreements and FDIC Indemnification Assets” included in Item 1 for additional information.

Goodwill and Intangible Assets

Goodwill and intangibles 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, 2011, the Company has two reporting units to which goodwill has been allocated – the Bank and the Travel division (which is a division of a subsidiary of the Bank). If the fair value of a reporting unit exceeds its carrying value, then no impairment is recorded. If the carrying value amount 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. Intangible assets that are not amortized will be tested for impairment at least annually by comparing the fair values to those assets to their carrying values. At March 31, 2011, goodwill consisted of $379,000 at the Bank reporting unit and $877,500 at the Travel reporting unit. Other identifiable intangible assets that are subject to amortization are amortized on a straight-line basis over periods ranging from three to seven years. At March 31, 2011, the amortizable intangible assets consisted of core deposit intangibles of $3.9 million at the Bank reporting unit and $25,000 of non-compete agreements at the Travel reporting unit. These amortizable intangible assets are reviewed for impairment if circumstances indicate their value may not be recoverable based on a comparison of fair value.

While the Company believes no impairment existed at March 31, 2011, different conditions or assumptions used to measure fair value of reporting units, 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.

Current Economic Conditions

The current economic environment presents financial institutions with unprecedented circumstances and challenges which in some cases have resulted in large declines in the fair values of investments and other assets, constraints on liquidity and significant credit quality problems, including severe volatility in the valuation of real estate and other collateral supporting loans. The Company's financial statements have been prepared using values and information currently available to the Company.

Given the volatility of current economic conditions, the values of assets and liabilities recorded in the financial statements could change rapidly, resulting in material future adjustments in asset values, the allowance for loan losses, or capital that could negatively impact the Company’s ability to meet regulatory capital requirements and maintain sufficient liquidity.

General

The profitability of the Company and, more specifically, the profitability of its primary subsidiary, Great Southern Bank (the "Bank"), depends primarily on its net interest income, as well as provisions for loan 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 portfolio, 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.

In the three months ended March 31, 2011, Great Southern's net loans increased $11.6 million, or 0.6%, from $1.88 billion at December 31, 2010, to $1.89 billion at March 31, 2011. The increase was primarily due to increases in multi-family residential mortgage loans of $19.6 million, or 9.3%, and commercial real estate loans of $17.2 million, or 3.2%. Partially offsetting these increases were decreases in commercial business loans of $10.6 million, or 5.7%, and net loans acquired through the 2009 FDIC-assisted transactions of $8.2 million, or 2.7%. 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 level of increases achieved in prior years. Based upon the current lending environment and economic conditions, the Company does not expect to grow the overall loan portfolio significantly, if at all, at this time and the loan portfolio could shrink due to net loan repayments. The Company's strategy continues to be focused on maintaining credit risk and interest rate risk at appropriate levels.

The level of non-performing loans and foreclosed assets may affect our net interest income and net income. While we did not have an overall high level of charge-offs on our non-performing loans prior to 2008, 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. We expect the loan loss provision, non-performing assets and foreclosed assets will generally remain elevated and will fluctuate from period to period. In addition, expenses related to the credit resolution process could also remain elevated.

In the three months ended March 31, 2011, Great Southern's available-for-sale securities increased $68.7 million, or 8.9%, from $769.5 million at December 31, 2010, to $838.2 million at March 31, 2011. The increase was primarily due to purchases of mortgage-backed securities and U.S. government agency securities which increased $55.0 million, or 9.2%, and $19.9 million, or 499.7%, respectively. These securities were purchased for pledging to secure public-fund deposits.

Great Southern had cash and cash equivalents of $462.3 million at March 31, 2011 compared to $430.0 million at December 31, 2010. During 2011, cash and cash equivalents continued to increase because of deposit growth, loan repayments and lower overall loan demand.

The Company attracts deposit accounts through its retail branch network, correspondent banking and corporate services areas, and brokered deposits. The Company then utilizes these deposit funds, along with Federal Home Loan Bank (FHLBank) advances and other borrowings, to meet loan demand or otherwise fund its activities. In the three months ended March 31, 2011, total deposit balances increased $79.8 million, or 3.1%. Transaction accounts and retail certificates of deposit increased $60.2 million and $3.8 million, respectively, while total brokered deposits (excluding CDARS accounts) decreased $50.1 million. Great Southern Bank customer deposits totaling $284.8 million and $218.8 million, at March 31, 2011 and December 31, 2010, respectively, were part of the CDARS program which allows bank customers to maintain balances in an insured manner that would otherwise exceed the FDIC deposit insurance limit. The FDIC considers these customer accounts to be brokered deposits due to the fees paid in the CDARS program. The increase in CDARS customer deposits at March 31, 2011 of $66.0 million was primarily due to additions to an existing deposit relationship. The level of competition for deposits in our markets is high. While it is our goal to gain checking account and retail certificate of deposit market share in our branch footprint, we cannot be assured of this in future periods.

Total brokered deposits, excluding the CDARS accounts discussed above, were $94.4 million at March 31, 2011, down from $144.5 million at December 31, 2010. The decrease was the result of $50.1 million of brokered deposits that matured or were called by the Company during the quarter and were not replaced due to high liquidity levels. No interest rate swaps were associated with the remaining brokered certificates. The majority of the Company’s brokered certificates of deposit have fixed rates of interest and mature in 2011.

Our ability to fund growth in future periods may also be dependent 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 variable rate funding, if desired, which more closely matches the variable rate nature of much of our loan portfolio. 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 would adversely affect our business, financial condition and results of operations.

Our net interest income may be affected positively or negatively by market interest rate changes. A large portion of our loan portfolio is tied to the "prime rate" and adjusts immediately when this rate adjusts (subject to the effect of loan interest rate floors, which are discussed below). We monitor our sensitivity to interest rate changes on an ongoing basis (see "Item III. Quantitative and Qualitative Disclosures About Market Risk"). In addition, our net interest income may be impacted by changes in the cash flows expected to be received from acquired loan pools. As previously described in Note 9, the Company’s evaluation of cash flows expected to be received from acquired loan pools is on-going and increases in cash flow expectations are recognized as increases in accretable yield through interest income. Decreases in cash flow expectations are recognized as impairments through the allowance for loan losses.

The current level and shape of the interest rate yield curve poses challenges for interest rate risk management. The FRB last cut interest rates on December 16, 2008. Great Southern has a significant portfolio of loans which are tied to a "prime rate" of interest. Some of these loans are tied to some national index of "prime," while most are indexed to "Great Southern prime." The Company has elected to leave its “Great Southern prime rate” of interest at 5.00%. This does not affect a large number of customers, as a majority of the loans indexed to “Great Southern prime” are already at interest rate floors which are provided for in individual loan documents. But for the interest rate floors, 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 which generally adjust immediately as the Federal Funds rate adjusts. Loans at their floor rates are subject to the risk that borrowers will seek to refinance elsewhere at the lower market rate, however. Because the Federal Funds rate is already very low, there may also be a negative impact on the Company's net interest income due to the Company's inability to lower its funding costs significantly in the current environment, although interest rates on assets may decline further. Conversely, interest rate increases would normally result in increased interest rates on our prime-based loans. The interest rate floors in effect may limit the immediate increase in interest rates on these loans, until such time as rates rise above the floors. However, the Company may have to increase rates paid on deposits to maintain deposit balances.

The negative impact of declining loan interest rates has been mitigated by the positive effects of the Company’s loans which have interest rate floors. At March 31, 2011, the Company had a portfolio (excluding the loans acquired in the FDIC-assisted transactions) of prime-based loans totaling approximately $684 million with rates that change immediately with changes to the prime rate of interest. Of this total, $604 million also had interest rate floors. These floors were at varying rates, with $94 million of these loans having floor rates of 7.0% or greater and another $466 million of these loans having floor rates between 5.0% and 7.0%. At March 31, 2011, all of these loans were at their floor rates. Because of these interest rate floors, the loan yield for the portfolio was approximately 274 basis points higher than the national “prime rate of interest” at March 31, 2011. While interest rate floors have had an overall positive effect on the Company’s results during this period, they do subject the Company to the risk that borrowers will elect to refinance their loans with other lenders. To the extent economic conditions improve, the likelihood that borrowers will seek to refinance their loans increases.

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, commissions earned by our travel, insurance and investment divisions, accretion income (net of amortization) related to the FDIC-assisted acquisitions, late charges and prepayment fees on loans, gains on sales of loans and available-for-sale investments and other general operating income. In 2011 and 2010, increases in the cash flows expected to be collected from the FDIC-covered loan portfolios resulted in amortization (expense) recorded relating to reductions of expected reimbursements under the loss sharing agreements with the FDIC, which are recorded as indemnification assets. Non-interest income may also be affected by the Company's interest rate hedging activities, if the Company chooses to implement hedges. On July 1, 2010, a federal rule went into effect which prohibits a financial institution from automatically enrolling customers in overdraft protection programs, on ATM and one-time debit card transactions, unless a consumer consents, or opts in, to the overdraft service. As expected, this recent federal rule has had an adverse affect on the amount of non-interest income we generate. 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 in the “Results of Operations and Comparison for the Three Months Ended March 31, 2011 and 2010” section of this Quarterly Report on Form 10-Q.

Effect of Federal Laws and Regulations

General. Federal legislation and regulation significantly affect the banking 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 depository institutions 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.

Recent Legislation Impacting the Financial Services Industry. On July 21, 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 implements far-reaching changes across the financial regulatory landscape, including provisions that, among other things, will provide increased consumer financial protection, amend capital requirements for financial institutions, change the assessment base for federal deposit insurance, repeal the federal prohibitions on the payment of interest on demand deposits, amend the account balance limit for federal deposit insurance protection, and increase the authority of the Federal Reserve Board.

Many aspects of the Dodd-Frank Act are subject to rulemaking and will take effect over several years, making it difficult to anticipate the overall financial impact on the Company and the financial services industry more generally. Provisions in the legislation that affect deposit insurance assessments, and payment of interest on demand deposits could increase the costs associated with deposits. Provisions in the legislation that require revisions to the capital requirements of the Company and the Bank could require the Company and the Bank to seek additional sources of capital in the future.

In December 2010 and January 2011, the Basel Committee on Banking Supervision published the final texts of reforms on capital and liquidity generally referred to as “Basel III.” Although Basel III is intended to be implemented by participating countries for large, internationally active banks, its provisions are likely to be considered by United States banking regulators in developing new regulations applicable to other banks in the United States, including Great Southern. For banks in the United States, among the provisions concerning capital are: (i) a minimum ratio of common equity to risk-weighted assets reaching 4.5%, plus an additional 2.5% as a capital conservation buffer, by 2019 after a phase-in period; (ii) a minimum ratio of Tier 1 capital to risk-weighted assets reaching 6.0% by 2019 after a phase-in period; (iii) a minimum ratio of total capital to risk-weighted assets, plus the additional 2.5% capital conservation buffer, reaching 10.5% by 2019 after a phase -in period; (iv) an additional countercyclical capital buffer to be imposed by applicable national banking regulators periodically at their discretion, with advance notice; and (v) restrictions on capital distributions and discretionary bonuses applicable when capital ratios fall within the buffer zone.

Although Basel III is described as a “final text,” it is subject to the resolution of certain issues and to further guidance and modification, as well as to adoption by United States banking regulators, including decisions as to whether and to what extent it will apply to United States banks that are not large, internationally active banks.

Business Initiatives

In 2011, the Company anticipates opening two to three banking centers, or relocating banking centers when another location is more advantageous, as a part of its long-term strategic plan. Three locations have been selected to accomplish this plan. The first banking center is located at 8235 Forsyth Boulevard in Clayton, Mo. The banking center is expected to open in May 2011. In addition, the Company’s Creve Coeur loan production office plans to relocate to this office complex at the same time. Clayton is a major business center of metropolitan St. Louis and the St. Louis County seat.

The second location is in Springfield, Mo. A new full-service banking center is under construction on South Campbell Avenue. The banking center will replace a current office on South Campbell, which is less than a mile from the new site. The new, larger office will offer better access for customers and is expected to open during the third quarter of 2011.

The third site is in Olathe, Kan. The Company has purchased property on West 135th Street in an established retail business district. Plans are to relocate the current banking center at 11120 South Lone Elm Road, which is located in a lesser developed area of Olathe. Great Southern Travel also expects to move its current Olathe office to the new site. A first quarter 2012 opening is anticipated.

Expansion of the Company’s Operation Center in Springfield was completed during the first quarter of 2011. A 20,000 sq. ft. addition was constructed to accommodate the Company’s growth and provide for potential future growth.

In February 2011, the Great Southern Residential Lending team moved to a stand-alone building the Company purchased in south Springfield. The facility, named the Great Southern Home Loan Center, houses residential lending originators and support staff. The Home Loan Center creates greater visibility for the lending team and provides needed space in light of the Company’s recent expansion and anticipated growth in its five-state franchise.

In March 2011, Great Southern submitted its application to possibly participate in the U.S. Treasury’s Small Business Lending Fund (SBLF). Enacted into law in 2010 as part of the Small Business Jobs Act, the SBLF is a $30 billion fund that encourages lending to small businesses by providing Tier 1 capital to qualified community banks with assets of less than $10 billion. The SBLF provides an option for eligible community banks to refinance CPP funds. As noted above, the Company received $58.0 million in CPP funds from the Treasury through the sale of preferred stock. If CPP funds were transferred to the SBLF, the 5% CPP dividend rate could potentially be reduced for a period of time, depending on the level of small business lending. While the Company did submit an application, there is no obligation to participate if accepted by the Treasury.

Comparison of Financial Condition at March 31, 2011 and December 31, 2010

During the three months ended March 31, 2011, the Company increased total assets by $87.4 million to $3.50 billion. Most of the increase was attributable to increases in securities available for sale, cash and cash equivalents and net loans, partially offset by decreases in mortgage loans held for sale and the FDIC indemnification asset. Securities available for sale increased $68.7 million as compared to December 31, 2010. The increase was primarily due to purchases of mortgage-backed securities and U.S. government agency securities which increased $55.0 million, or 9.2%, and $19.9 million, or 499.7%, respectively. While there is no specifically stated goal, the available-for-sale securities portfolio has in recent quarters been approximately 15% to 25% of total assets. The available-for-sale securities portfolio was 24.0% and 22.6% of total assets at March 31, 2011 and December 31, 2010, respectively. These levels are on the high end of recent averages because of the Company’s efforts to maintain excess liquidity during uncertain economic times as discussed below in regard to cash and cash equivalents. Cash and cash equivalents increased $32.3 million as compared to December 31, 2010 due to deposit growth, repayments of loans and lower overall loan demand. In some instances, the Company invested these excess funds in short-term cash equivalents that caused the Company to earn a small positive or a negative spread relative to the cost of funds. While the Company generally earned a positive spread on securities purchased, it was often much smaller than the Company's overall net interest spread, having the effect of increasing net interest income but negatively affecting net interest margin in 2010 and 2011. The Company expects to maintain a higher level of cash and cash equivalents for the time being as excess liquidity in these uncertain times for the U.S. economy and the banking industry, subject to funding activities which are discussed below, and recognizing that this could potentially have the effect of suppressing net interest margin and net interest income. Net loans increased $11.6 million from December 31, 2010, to $1.89 billion at March 31, 2011. The increase was primarily due to increases in multi-family residential mortgage loans of $19.6 million, or 9.3%, and commercial real estate loans of $17.2 million, or 3.2%. Partially offsetting these increases were decreases in commercial business loans of $10.6 million, or 5.7%, and net loans acquired through the 2009 FDIC-assisted transactions of $8.2 million, or 2.7%. The Company's strategy continues to be focused on maintaining credit risk and interest rate risk at appropriate levels given the current credit and economic environments. Aside from any potential future acquisitions, of which none are currently contemplated, the Company does not expect to grow the loan portfolio significantly at this time. Mortgage loans held for sale decreased $15.1 million from December 31, 2010. The Company generally sells fixed-rate one- to four-family residential loans in the secondary market and the decrease was primarily due to the timing of those sales. Somewhat lower customer demand for this type of loan during the current period also contributed to the decrease. The FDIC indemnification asset decreased $13.5 million from December 31, 2010 due to amortization relating to the reduction in expected reimbursements under the loss sharing agreements previously discussed in Note 9 of the Notes to Consolidated Financial Statements.

Total liabilities increased $86.2 million from December 31, 2010 to $3.19 billion at March 31, 2011. The increase was primarily attributable to increases in deposits and securities sold under repurchase agreements with customers. Total deposits increased $79.8 million from December 31, 2010. Checking account balances totaled $1.36 billion at March 31, 2011, up from $1.30 billion at December 31, 2010. Interest-bearing checking accounts increased $57.7 million and non-interest bearing checking accounts increased $2.5 million. Total brokered deposits (excluding CDARS customer account balances) were $94.4 million at March 31, 2011, compared to $144.5 million at December

31, 2010. The decrease was the result of $50.1 million of brokered deposits that matured or were called by the Company during the quarter and were not replaced due to the Company’s existing high liquidity levels. In addition, at March 31, 2011 and December 31, 2010, Great Southern Bank customer deposits totaling $284.8 million and $218.8 million, respectively, were part of the CDARS program which allows bank customers to maintain balances in an insured manner that would otherwise exceed the FDIC deposit insurance limit. The FDIC counts these deposits as brokered, but these are deposit accounts that we generate with customers in our local markets. The increase in CDARS customer deposits at March 31, 2011 of $66.0 million was primarily due to additions to an existing deposit relationship. Securities sold under reverse repurchase agreements with customers increased $9.0 million from December 31, 2010 as these balances fluctuate over time. FHLBank advances decreased slightly from the December 31, 2010 level. The level of FHLBank advances also fluctuates depending on growth in the Company's loan portfolio and other funding needs and sources available to the Company. Most of the Company’s FHLBank advances are fixed-rate advances that cannot be repaid prior to maturity without incurring significant penalties.

Total stockholders' equity increased $1.2 million from $304.0 million at December 31, 2010 to $305.2 million at March 31, 2011. The Company recorded net income of $5.9 million for the three months ended March 31, 2011, common and preferred dividends declared were $3.1 million and accumulated other comprehensive gain decreased $1.7 million. The decrease in accumulated other comprehensive gain resulted from decreases in the fair value of the Company's available-for-sale investment securities. In addition, total stockholders’ equity increased $119,000 due to stock option exercises.

Our participation in the Capital Purchase Program ("CPP") of the U.S. Department of the Treasury (the "Treasury") currently precludes us from purchasing shares of the Company’s stock without the Treasury's consent until the earlier of December 5, 2011, or our repayment of the CPP funds or the transfer by the Treasury to third parties of all of the shares of preferred stock we issued to the Treasury pursuant to the CPP. The Company has historically utilized stock buy-back programs from time to time as long as it believed that repurchasing the stock contributed to the overall growth of shareholder value. The number of shares of stock repurchased and the price paid is the result of many factors, several of which are outside of the control of the Company. The primary factors, however, are the number of shares available in the market from sellers at any given time and the price of the stock within the market as determined by the market.

Results of Operations and Comparison for the Three Months Ended March 31, 2011 and 2010

General

Net income was $5.9 million for the three months ended March 31, 2011 compared to net income of $5.5 million for the three months ended March 31, 2010. This increase of $355,000, or 6.4%, was primarily due to an increase in net interest income of $12.8 million, or 48.1%, a decrease in non-interest expense of $534,000, or 2.4%, and a decrease in provision for income taxes of $500,000, or 21.0%, partially offset by a decrease in non-interest income of $10.8 million, or 119.7%, and an increase in provision for loan losses of $2.7 million, or 49.1%. Net income available to common shareholders was $5.0 million and $4.7 million for the quarters ended March 31, 2011 and 2010, respectively.

Total Interest Income

Total interest income increased $9.3 million, or 23.4%, during the three months ended March 31, 2011 compared to the three months ended March 31, 2010. The increase was due to a $9.9 million increase in interest income on loans partially offset by a $604,000 decrease in interest income on investments and other interest-earning assets. Interest income on loans increased primarily due to increases in expected cash flows to be received from the FDIC-acquired loan pools and the resulting adjustment to accretable yield which were previously discussed in Note 9 of the Notes to Consolidated Financial Statements. Interest income from investment securities and other interest-earning assets decreased due to lower average rates of interest, partially offset by higher average balances. The lower average investment yields were primarily a result of lower yields on mortgage-backed securities as interest rates reset downward. Prepayments on the mortgages underlying these securities resulted in amortization of premiums which also reduced yields. An increase in the amount of SBA loan pools held, which earn lower average rates than the overall securities portfolio, contributed to lower investment yields as well. SBA loan pools are held for their variable interest rate characteristics and guarantee by the federal government, which makes them relatively low-risk investments.

Interest Income – Loans

During the three months ended March 31, 2011 compared to the three months ended March 31, 2010, interest income on loans increased due to higher average interest rates partially offset by lower average balances. Interest income increased $13.0 million as a result of higher average interest rates on loans. The average yield on loans increased from 6.18% during the three months ended March 31, 2010, to 8.86% during the three months ended March 31, 2011. This increase was due to additional yield accretion recognized in conjunction with the fair value of the loan pools acquired in the 2009 FDIC-assisted transactions as previously discussed in Note 9 of the Notes to Consolidated Financial Statements. On an on-going basis the Company estimates the cash flows expected to be collected from the acquired loan pools. This cash flows estimate has increased each quarter beginning with the third quarter of 2010, based on the payment histories and reduced loss expectations of the loan pools, resulting in a total of $62.4 million of adjustments to be spread on a level-yield basis over the remaining expected lives of the loan pools. The increases in expected cash flows also reduced the amount of expected reimbursements under the loss sharing agreements with the FDIC, which are recorded as indemnification assets. Therefore, the expected indemnification assets have also been reduced each quarter since the third quarter of 2010, resulting in a total of $54.7 million of adjustments to be amortized on a comparable basis over the remainder of the loss sharing agreements or the remaining expected life of the loan pools, whichever is shorter. The adjustments increased interest income by $12.7 million and decreased non-interest income by $11.3 million during the quarter ended March 31, 2011, for a net impact of $1.4 million to pre-tax income. Because the adjustments will be recognized over the estimated remaining lives of the loan pools and the remainder of the loss sharing agreements, respectively, they will impact future periods as well. As of March 31, 2011, the remaining accretable yield adjustment that will affect interest income is $30.2 million and the remaining adjustment to the indemnification assets that will affect non-interest income is $(26.3) million. Of the remaining adjustments, we expect to recognize $21.8 million of interest income and $(19.3) million of non-interest income (expense) in the remainder of 2011.

Apart from the yield accretion discussed above, average loan rates were very similar for the quarter ended March 31, 2011 compared to the same period in 2010, as a result of market rates of interest, primarily the "prime rate" of interest, remaining flat during these periods. During 2008, the “prime rate” decreased 4.00% to a rate of 3.25% at December 31, 2008, where the prime rate has remained. A large portion of the Bank's loan portfolio adjusts with changes to the "prime rate" of interest. The Company has a portfolio of prime-based loans which have interest rate floors. Beginning in 2008, the declining interest rates put these loan rate floors in effect and established a loan rate which was higher than the contractual rate would have otherwise been. Great Southern has a significant portfolio of loans which are tied to a “prime rate” of interest. Some of these loans are tied to some national index of “prime,” while most are indexed to “Great Southern prime.” The Company has elected to leave its “prime rate” of interest at 5.00% in light of the current highly competitive funding environment for deposits and wholesale funds. This does not affect a large number of customers, as a majority of the loans indexed to “Great Southern prime” are already at interest rate floors, which are provided for in individual loan documents. In the three months ended March 31, 2011, the average yield on loans was 8.86% (including the yield accretion discussed above) versus an average prime rate for the period of 3.25%, or a difference of a positive 561 basis points. In the three months ended March 31, 2010, the average yield on loans was 6.18% versus an average prime rate for the period of 3.25%, or a difference of a positive 293 basis points.

Interest income decreased $3.1 million as the result of lower average loan balances which decreased from $2.11 billion during the quarter ended March 31, 2010, to $1.93 billion during the quarter ended March 31, 2011. The lower average balance resulted primarily from decreases in outstanding construction loans and commercial real estate loans. Outstanding construction loans decreased as many projects were completed and demand for new construction loans has declined. Commercial real estate loans decreased due to a higher level of loan repayments than loan originations as a result of weak loan demand.

Interest Income – Investments and Other Interest-earning Assets

Interest income on investments and other interest-earning assets decreased in the three months ended March 31, 2011 compared to the three months ended March 31, 2010. Interest income decreased $1.2 million as a result of a decrease in average interest rates from 3.08% during the three months ended March 31, 2010, to 2.29% during the three months ended March 31, 2011. The majority of the Company’s securities in the 2010 and 2011 periods were mortgage-backed securities which are backed by hybrid ARMs that have fixed rates of interest for a period of time (generally one to ten years) and then adjust annually. The actual amount of securities that will reprice and the actual interest rate changes on these securities are subject to the level of prepayments on these securities and the changes that actually occur in market interest rates (primarily treasury rates and LIBOR rates). Mortgage-backed securities are also subject to reduced yields due to more rapid prepayments in the underlying mortgages. As a result, premiums on these securities

may be amortized against interest income more quickly, thereby reducing the yield recorded. An increase in the amount of SBA loan pools held contributed to the decrease in average interest rates as well because these securities earn lower yields than the overall securities portfolio. Interest income increased $591,000 as a result of an increase in average balances from $994 million during the three months ended March 31, 2010, to $1.23 billion during the three months ended March 31, 2011. This increase was primarily in interest-earning deposits because of deposit growth, loan repayments and lower overall loan demand.

In 2010 and 2011, the Company had increased interest-earning deposits and non-interest-earning cash equivalents, as additional liquidity was maintained due to uncertainty in the economy and low loan demand. These deposits and cash equivalents earn very low (or no) yield and therefore negatively impact the Company’s net interest margin. At March 31, 2011, the Company had cash and cash equivalents of $462.3 million compared to $430.0 million at December 31, 2010. See "Net Interest Income" for additional information on the impact of this interest activity.

Total Interest Expense

Total interest expense decreased $3.5 million, or 26.6%, during the three months ended March 31, 2011, when compared with the three months ended March 31, 2010, primarily due to a decrease in interest expense on deposits of $3.2 million, or 29.8%, a decrease in interest expense on short-term and structured repo borrowings of $237,000, or 23.9%, and a decrease in interest expense on FHLBank advances of $100,000, or 7.2%, partially offset by an increase in interest expense on subordinated debentures issued to capital trusts of $4,000, or 2.9%.

Interest Expense – Deposits

Interest expense on demand deposits increased $522,000 due to an increase in average balances from $849 million during the three months ended March 31, 2010, to $1.09 billion during the three months ended March 31, 2011. The increase in average balances of demand deposits was primarily a result of customer preference to transition from time deposits to demand deposits as well as organic growth in the Company’s deposit base, particularly in interest-bearing checking accounts. Interest expense on demand deposits decreased $473,000 due to a decrease in average rates from 0.98% during the three months ended March 31, 2010, to 0.78% during the three months ended March 31, 2011. The average interest rates decreased due to lower overall market rates of interest since March 31, 2010 and because the Company chose to pay lower rates during the three months ended March 31, 2011 when compared to the same period in 2010. Market rates of interest on checking and money market accounts have been decreasing since late 2007 when the FRB began reducing short-term interest rates.

Interest expense on deposits decreased $1.7 million due to a decrease in average balances of time deposits from $1.68 billion during the three months ended March 31, 2010, to $1.32 billion during the three months ended March 31, 2011. As previously mentioned, the decrease in average balances of time deposits was primarily a result of customer preference to transition from time deposits to demand deposits. In the latter quarters of 2010 and the first quarter of 2011, the Company redeemed brokered deposits and very few were replaced due to the Company’s existing high liquidity levels. Interest expense on deposits decreased $1.6 million as a result of a decrease in average rates of interest on time deposits from 2.08% during the three months ended March 31, 2010, to 1.66% during the three months ended March 31, 2011. A large portion of the Company’s certificate of deposit portfolio matures within one year and so reprices fairly quickly; this is consistent with the portfolio over the past several years.

The Dodd-Frank Act repealed the federal prohibitions on the payment of interest on demand deposits, thereby permitting depository institutions to pay interest on business transaction and other accounts beginning July 21, 2011. Although the ultimate impact of this legislation on the Company has not yet been determined, the Company expects interest costs associated with demand deposits may increase as a result of competitor responses to this change.

Interest Expense – FHLBank Advances, Short-term Borrowings and Structured Repo Borrowings and Subordinated Debentures Issued to Capital Trusts

During the three months ended March 31, 2011 compared to the three months ended March 31, 2010, interest expense on FHLBank advances decreased due to lower average balances, partially offset by higher average interest rates. Interest expense on FHLBank advances decreased $132,000 due to a decrease in average balances from $169 million during the three months ended March 31, 2010, to $153 million during the three months ended March 31, 2011. Interest expense on FHLBank advances increased $32,000 due to an increase in average interest rates from 3.36% in the three months ended March 31, 2010, to 3.44% in the three months ended March 31, 2011. Most of the remaining advances are fixed-rate and are subject to penalty if paid off prior to maturity.

Interest expense on short-term and structured repo borrowings decreased $137,000 due to a decrease in average balances from $377 million during the three months ended March 31, 2010, to $322 million during the three months ended March 31, 2011. The decrease in balances of short-term borrowings was primarily due to decreases in average securities sold under repurchase agreements with the Company's deposit customers which tend to fluctuate. Interest expense on short-term and structured repo borrowings decreased $100,000 due to a decrease in average rates on short-term borrowings from 1.07% in the three months ended March 31, 2010, to 0.95% in the three months ended March 31, 2011. The average interest rates decreased because the Company paid lower rates on securities sold under repurchase agreements during the three months ended March 31, 2011 when compared to the same period in 2010.

Interest expense on subordinated debentures issued to capital trusts increased $4,000 due to an increase in average rates from 1.79% in the three months ended March 31, 2010, to 1.84% in the three months ended March 31, 2011. As LIBOR rates increased slightly from the same period a year ago, the interest rates on these instruments also adjusted upward. The average rate of interest on these subordinated debentures increased in 2011 as these liabilities pay a variable rate of interest that is indexed to LIBOR. These debentures are not subject to an interest rate swap; however, they are variable-rate debentures and bear interest at an average rate of three-month LIBOR plus 1.57%, adjusting quarterly.

Net Interest Income

Net interest income for the three months ended March 31, 2011 increased $12.8 million to $39.4 million compared to $26.6 million for the three months ended March 31, 2010. Net interest margin was 5.05% in the three months ended March 31, 2011, compared to 3.47% in the three months ended March 31, 2010, an increase of 158 basis points, or 45.5%. The Company’s margin was positively impacted primarily by the increase in expected cash flows to be received from the FDIC-acquired loan pools and the resulting increase to accretable yield which was previously discussed in Note 9 of the Notes to Consolidated Financial Statements. The impact of this change on the three months ended March 31, 2011 was an increase in interest income of $12.7 million and an increase in net interest margin of 162 basis points. Excluding the positive impact of the additional yield accretion, net interest margin decreased slightly due to a decrease in yields earned on investment securities when compared to the year-ago quarter. The majority of the Company’s portfolio is made up of adjustable-rate mortgage-backed securities which have both repriced down and have experienced higher prepayments resulting in increased amortization of related premiums that offset interest earned. Partially offsetting the decrease in yields on investment securities was a change in the deposit mix over the last year. Since March 31, 2010, customer preference transitioned from time deposits to transaction deposits as lower-cost checking accounts increased while higher-cost CDARS accounts decreased. CDARS deposits increased again in the first quarter of 2011, compared to December 31, 2010, primarily due to additions to one existing deposit relationship. Retail certificates of deposit continued to decrease, and those that were renewed or replaced generally had lower market rates of interest. In the latter quarters of 2010 and the first quarter of 2011, the Company redeemed brokered deposits and very few were replaced due to the Company’s existing high liquidity levels. Traditional brokered deposits decreased $50.1 million since December 31, 2010. Excluding the yield accretion income discussed above, the yield on loans was relatively consistent when comparing the quarters ended March 31, 2011, and 2010.

The Company's overall interest rate spread increased 148 basis points, or 42.7%, from 3.47% during the three months ended March 31, 2010, to 4.95% during the three months ended March 31, 2011. The gross change was due to a 111 basis point increase in the weighted average yield on interest-earning assets and a 37 basis point decrease in the weighted average rate paid on interest-bearing liabilities. In comparing the two periods, the yield on loans increased 268 basis points while the yield on investment securities and other interest-earning assets decreased 79 basis points. The rate paid on deposits decreased 45 basis points, the rate paid on short-term borrowings decreased 12 basis points, the rate paid on FHLBank advances increased eight basis points and the rate paid on subordinated debentures issued to capital trusts increased five basis points.

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

Provision for Loan Losses and Allowance for Loan Losses

The provision for loan losses increased $2.7 million, from $5.5 million during the three months ended March 31, 2010, to $8.2 million during the three months ended March 31, 2011. At March 31, 2011, the allowance for loan losses was $41.8 million, an increase of $347,000 from December 31, 2010. Net charge-offs were $7.9 million in the three months ended March 31, 2011, versus $5.0 million in the three months ended March 31, 2010. Six relationships accounted for $7.2 million of the net charge-off total for the three months ended March 31, 2011. General market

conditions, and more specifically, housing supply, absorption rates and unique circumstances related to individual borrowers and projects contributed to increased provisions and charge-offs. As properties were categorized as potential problem loans, non-performing loans or foreclosed assets, evaluations were made of the value of these assets with corresponding charge-offs as appropriate.

Management records a provision for loan losses in an amount it believes sufficient to result in an allowance for loan losses that will cover current net charge-offs as well as risks believed to be inherent in the loan portfolio of the Bank. The amount of provision charged against current income is based on several factors, including, but not limited to, past loss experience, current portfolio mix, actual and potential losses identified in the loan portfolio, economic conditions, regular reviews by internal staff and regulatory examinations.

Weak economic conditions, higher inflation or interest rates, or other factors may lead to increased losses in the portfolio and/or requirements for an increase in loan loss provision expense. Management long ago established various controls in an attempt to limit future losses, such as a watch list of possible problem loans, documented loan administration policies and a loan review staff to review the quality and anticipated collectability of the portfolio. More recently, additional procedures have been implemented to provide for more frequent management review of the loan portfolio based on loan size, loan type and delinquencies. Management determines which loans are potentially uncollectible, or represent a greater risk of loss, and makes additional provisions to expense, if necessary, to maintain the allowance at a satisfactory level.

Loans acquired in the March 20, 2009 and September 4, 2009, FDIC-assisted transactions are covered by loss sharing agreements between the FDIC and Great Southern Bank which afford Great Southern Bank significant protection from losses in the acquired portfolio of loans. The acquired loans were grouped into pools based on common characteristics and were recorded at their estimated fair values, which incorporated estimated credit losses at the acquisition dates. These loan pools are systematically reviewed by the Company to determine the risk of losses that may exceed those identified at the time of the acquisition. Techniques used in determining risk of loss are similar to the legacy Great Southern Bank portfolio, with most focus being placed on those loan pools which include the larger loan relationships and those loan pools which exhibit higher risk characteristics. Review of the acquired loan portfolio also includes meetings with customers, review of financial information and collateral valuations to determine if any additional losses are apparent. At March 31, 2011, two loan pools exhibiting risks of loss had allowances for loan losses totaling $830,000. These loan pools were acquired through the Vantus Bank FDIC-assisted transaction and because of the loss sharing agreement, only 20% of the anticipated $830,000 loss would be ultimately borne by the Bank.

The Bank's allowance for loan losses as a percentage of total loans, excluding loans covered by the FDIC loss sharing agreements, was 2.49% and 2.48% at March 31, 2011 and December 31, 2010, respectively. Management considers the allowance for loan losses adequate to cover losses inherent in the Company's loan portfolio at March 31, 2011, based on recent reviews of the Company's loan portfolio and current economic conditions. If economic conditions remain weak or deteriorate significantly, it is possible that additional loan loss provisions would be required, thereby adversely affecting future results of operations and financial condition.

Non-performing Assets

Former TeamBank and Vantus Bank non-performing assets, including foreclosed assets, are not included in the totals and in the discussion of non-performing loans, potential problem loans and foreclosed assets below because losses from these assets are substantially covered under loss sharing agreements with the FDIC. In addition, FDIC-covered assets were recorded at their estimated fair values as of March 20, 2009, and September 4, 2009, respectively. The overall performance of FDIC-covered loan pools has been consistent with, or better than, original expectations as of the acquisition dates.

As a result of changes in balances and composition of the loan portfolio, changes in economic and market conditions that occur from time to time, and other factors specific to a borrower's circumstances, the level of non-performing assets will fluctuate. Non-performing assets, excluding FDIC-covered non-performing assets, at March 31, 2011, were $86.6 million, an increase of $8.3 million from $78.3 million at December 31, 2010. Non-performing assets, excluding FDIC-covered assets, as a percentage of total assets were 2.47% at March 31, 2011, compared to 2.30% at December 31, 2010. Compared to December 31, 2010, non-performing loans increased $7.5 million to $36.9 million and foreclosed assets increased $820,000 to $49.7 million. Construction and land development loans comprised $6.4 million, or 17.3%, of the total $36.8 million of non-performing loans at March 31, 2011, compared with $8.1 million or 27.6% of the total $29.4 million of non-performing loans at December 31, 2010. Non-performing commercial real estate loans increased $10.2 million since December 31, 2010, and were $16.2 million, or 44.0%, of the total non-

performing loans at March 31, 2011, compared with $6.1 million, or 20.7%, at December 31, 2010.

Non-performing Loans. Activity in the non-performing loans category during the three months ended March 31, 2011 was as follows:

	Beginning Balance, January 1		Additions to Non- Performing		Removed from Non- Performing			Transfers to Potential Problem Loans			Transfers to Foreclosed Assets			Charge- Offs			Payments			Ending Balance, March 31
	(In Thousands)
One- to four-family construction	$	578	$	261	$	—		$	—		$	—		$	—		$	(202	)	$	637
Subdivision construction		1,860		3,029		(26	)		—			(715	)		(210	)		—			3,938
Land development		5,668		97					(667	)		(2,474	)		(767	)		(51	)		1,806
Commercial construction		—		—		—			—			—			—			—			—
One- to four-family residential		5,555		2,173		—			—			(1,061	)		(219	)		(301	)		6,147
Other residential		4,203		—		—			—			(183	)		(883	)		—			3,137
Commercial real estate		6,074		13,600		—			(1,764	)		—			(1,628	)		(58	)		16,224
Commercial business		3,832		502		—			—			—			(92	)		(793	)		3,449
Consumer		1,650		414		(90	)		(97	)		(14	)		(43	)		(311	)		1,509

Total	$	29,420	$	20,076	$	(116	)	$	(2,528	)	$	(4,447	)	$	(3,842	)	$	(1,716	)	$	36,847

At March 31, 2011, the commercial real estate category of non-performing loans included 18 loans. The largest two relationships in this category totaled $5.1 million and $3.4 million, respectively, or 52.8% of the total category, and were collateralized by properties in St. Louis, Mo. and Rogers, Ark., respectively. Both relationships were added during the quarter ended March 31, 2011, because of unexpected downturns in the borrowers’ respective businesses that were providing the cash flow for the loans.

Potential Problem Loans. Compared to December 31, 2010, potential problem loans decreased $17.9 million, or 32.1%. This decrease included $11.2 million of loans transferred to non-performing loans or foreclosed assets categories and $7.0 million received in principal reductions from customers. 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, but are considered in determining the adequacy of the allowance for loan losses. Activity in the potential problem loans category during the three months ended March 31, 2011 was as follows:

	Beginning Balance, January 1		Additions to Potential Problem		Removed from Potential Problem			Transfers to Non- Performing			Transfers to Foreclosed Assets			Charge- Offs			Payments			Ending Balance, March 31
	(In Thousands)
One- to four-family construction	$	714	$	213	$	(196	)	$	(261	)	$	—		$	—		$	(37	)	$	433
Subdivision construction		6,473		391		—			(1,876	)		—			(861	)		(1,260	)		2,867
Land development		11,476		742		—			—			—			—			(1,907	)		10,311
Commercial construction		1,851		—		(1,200	)		—			—			(651	)		—			—
One- to four-family residential		8,786		—		(419	)		(862	)		—			(599	)		(419	)		6,487
Other residential		5,674		—		—			—			—			—			(2	)		5,672
Commercial real estate		14,729		2,934		(1,160	)		(5,068	)		(2,669	)		—			(240	)		8,526
Commercial business		5,934		2,191		(413	)		(503	)		—			(684	)		(3,128	)		3,397
Consumer		12		99		—			(11	)		—			—			(1	)		99

Total	$	55,649	$	6,570	$	(3,388	)	$	(8,581	)	$	(2,669	)	$	(2,795	)	$	(6,994	)	$	37,792

At March 31, 2011, the commercial real estate category of potential problem loans included 10 loans, the largest of which had a balance of $3.5 million, or 41.6% of the total category, and was collateralized by a hotel in Kansas City, Mo. The land development category of potential problem loans included 8 loans, the largest of which had a balance of $3.8 million, or 37.0% of the total category, and was collateralized by commercial land in southwest Missouri.

Foreclosed Assets. Of the total $61.9 million of foreclosed assets at March 31, 2011, $12.2 million represents the fair value of foreclosed assets acquired in the FDIC-assisted transactions in 2009. These acquired foreclosed assets are subject to the loss sharing agreements with the FDIC and, therefore, are not included in the following table and discussion of foreclosed assets. Activity in foreclosed assets during the three months ended March 31, 2011 was as follows:

	Beginning Balance, January 1		Additions		Proceeds from Sales			Capitalized Costs		ORE Expense Write-Downs			Ending Balance, March 31
	(In Thousands)
One- to four-family construction	$	2,510	$	—	$	(1,275	)	$	114	$	—		$	1,349
Subdivision construction		19,816		—		(805	)		—		(25	)		18,986
Land development		10,620		3,189		—			—		—			13,809
Commercial construction		3,997		—		—			—		—			3,997
One- to four-family residential		2,896		1,238		(970	)		—		(124	)		3,040
Other residential		4,178		183		(193	)		—		10			4,178
Commercial real estate		4,565		2,669		(3,057	)		—		(134	)		4,043
Consumer		318		237		(237	)		—		—			318

Total	$	48,900	$	7,516	$	(6,537	)	$	114	$	(273	)	$	49,720

At March 31, 2011, the subdivision construction category of foreclosed assets included 51 properties, the largest of which was located in the St. Louis, Mo. metropolitan area and had a balance of $5.2 million, or 27.2% of the total category. Of the total dollar amount in the subdivision construction category, 19.4% is located in Branson, Mo. The land development category of foreclosed assets included 23 properties, the largest of which had a balance of $4.3 million, or 31.1% of the total category. Of the total dollar amount in the land development category, 54.9% is located in northwest Arkansas, including the largest property previously mentioned. Included in the proceeds from sales for the commercial real estate category was an industrial building located in Springfield, Mo. that the Company capitalized as a fixed asset at $2.7 million. The Company plans to use this facility for operational storage and a disaster recovery site, consolidating its storage from other space.

Non-interest Income

For the three months ended March 31, 2011, non-interest income decreased $10.8 million, or 119.7%, to a negative $1.8 million when compared to the three months ended March 31, 2010, primarily as a result of the following items:

Amortization of indemnification asset: As previously described in Note 9 of the Notes to Consolidated Financial Statements, due to the increase in cash flows expected to be collected from the FDIC-covered loan portfolios, $11.3 million of amortization (expense) was recorded in the 2011 period relating to reductions of expected reimbursements under the loss sharing agreements with the FDIC, which are recorded as indemnification assets.

Service charges and ATM fees: Overdraft regulations on ATM and certain debit card transactions became effective during the third quarter of 2010. These overdraft regulations were expected to adversely affect overdraft fees and this expectation has proven accurate. Compared to the quarter ended March 31, 2010, income related to total service charges and ATM fees decreased $520,000 during the quarter ended March 31, 2011.

Partially offsetting the above decreases in non-interest income was a $370,000 increase in commission income during the quarter ended March 31, 2011, compared to the same period in 2010, primarily due to increased activity for Great Southern Travel.

Non-interest Expense

For the three months ended March 31, 2011, non-interest expense decreased $534,000, or 2.4%, to $21.6 million, when compared to the quarter ended March 31, 2010. The decrease was primarily due to a decrease in foreclosure-related expenses of $1.7 million during the three months ended March 31, 2011 when compared to the same period in 2010 because of fewer write-downs of foreclosed assets and fewer foreclosures during the current period. During the first quarter of 2010, $20.6 million in property was foreclosed upon while $7.5 million in property was foreclosed upon during the first quarter of 2011.

Partially offsetting the above decrease in non-interest expense were the following items:

Amortization of low-income housing tax credits: The Company has invested in certain federal low-income housing tax credits. These credits are typically purchased at 70-90% of the amount of the credit and are generally utilized to offset taxes payable over a 10-year period. A portion of these credits totaling $452,000 were used in the current quarter to reduce the Company’s tax expense which resulted in corresponding amortization of $352,000 to reduce the investment in these credits. The net result of these transactions is an increase to non-interest expense and a decrease to income tax expense, which positively impacted the Company’s effective tax rate.

New banking centers: Continued internal growth of the Company since the quarter ended March 31, 2010 caused an increase in non-interest expense during the quarter ended March 31, 2011. The Company opened its first retail banking center in Rogers, Ark., in May 2010. New banking centers were also opened in Des Peres, Mo. in September 2010 and in Forsyth, Mo. in December 2010, both of which complement existing banking centers in their respective market areas. In the three months ended March 31, 2011, non-interest expenses associated with the operation of these locations increased $210,000 over the same period in 2010. For additional information on the Company’s growth, see the “Business Initiatives” section of this Quarterly Report on Form 10-Q.

Salaries and benefits: As a result of integrating the operations of TeamBank and Vantus Bank and the administration of the loss sharing portfolios as well as overall growth, the number of associates employed by the Company in operational and lending areas increased 5.3% from March 31, 2010 to March 31, 2011. This led to a large portion of the salaries and benefits increase of $537,000 in the three months ended March 31, 2011 when compared with the three months ended March 31, 2010.

FDIC insurance premiums: In the first quarter of 2011, deposit insurance premiums increased $313,000 over the first quarter of 2010 due to an increase in the Company’s insured deposits.

The Company’s efficiency ratio for the three months ended March 31, 2011, was 57.49% compared to 62.26% for the same quarter in 2010. The difference in the ratios from the current to prior periods was primarily due to the increased accretable yield and additional amortization of the FDIC indemnification assets noted above, as well as the reduced non-interest expense. The Company’s ratio of non-interest expense to average assets increased from 2.17% for the three months ended March 31, 2010, to 2.48% for the three months ended March 31, 2011, as a result of lower average assets in the 2011 quarter. Average assets decreased $190.7 million, or 5.2%.

Provision for Income Taxes

The Company’s effective tax rate (as compared to the statutory federal tax rate of 35.0%) was 24.3% for the three ended March 31, 2011, due to the effects of the tax credits noted above and to tax-exempt investments and tax-exempt loans which reduced the Company’s effective tax rate. The Company’s effective tax rate was 30.1% for the three months ended March 31, 2010, due to the effects tax-exempt investments and tax-exempt loans. In future periods, the Company expects its effective tax rate will be approximately 25%-28%. The Company’s effective tax rate may fluctuate as it is impacted by the level and timing of its utilization of tax credits.

Average Balances, Interest Rates and Yields

The following tables present, for the periods indicated, the total dollar amounts 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 includes the amortization of net loan fees, which were deferred in accordance with accounting standards. Fees included in interest income were $575,000 and $423,000 for the three months ended March 31, 2011 and 2010, respectively. Tax-exempt income was not calculated on a tax equivalent basis. The table does not reflect any effect of income taxes.

		March 31, 2011(2)			Three Months Ended March 31, 2011							Three Months Ended March 31, 2010
		Yield/ Rate			Average Balance			Interest		Yield/ Rate		Average Balance			Interest		Yield/ Rate
					(Dollars in thousands)
	Interest-earning assets:
	Loans receivable:
	One- to four-family residential		5.49	%	$	313,738		$	5,888	7.61	%	$	347,039		$	5,148	6.02	%
	Other residential		5.48			236,898			3,549	6.08			216,743			3,285	6.14
	Commercial real estate		5.98			644,737			12,901	8.12			714,677			11,208	6.36
	Construction		5.61			273,228			9,824	11.32			353,785			4,867	5.58
	Commercial business		5.51			175,412			4,895	14.58			169,149			2,870	6.88
	Other loans		7.28			209,475			3,996	7.74			239,636			3,752	6.35
	Industrial revenue bonds (1)		6.05			72,364			1,031	5.78			70,573			1,064	6.11

	Total loans receivable		5.99			1,925,852			42,084	8.86			2,111,602			32,194	6.18

	Investment securities (1)		3.48			831,129			6,790	3.31			776,646			7,436	3.88
	Other interest-earning assets		0.22			401,359			166	0.17			217,811			124	0.23

	Total interest-earning assets		4.64			3,158,340			49,040	6.30			3,106,059			39,754	5.19
	Non-interest-earning assets:
	Cash and cash equivalents					73,348							302,663
	Other non-earning assets					256,783							270,460
	Total assets				$	3,488,471						$	3,679,182

	Interest-bearing liabilities:
	Interest-bearing demand and savings		0.74		$	1,090,280			2,107	0.78		$	849,029			2,058	0.98
	Time deposits		1.58			1,316,443			5,379	1.66			1,675,336			8,599	2.08
	Total deposits		1.20			2,406,723			7,486	1.26			2,524,365			10,657	1.71
	Short-term borrowings and structured repurchase agreements		0.97			322,104			756	0.95			377,453			993	1.07
	Subordinated debentures issued to capital trusts		1.87			30,929			140	1.84			30,929			136	1.79
	FHLB advances		3.48			153,011			1,297	3.44			168,517			1,397	3.36

	Total interest-bearing liabilities		1.30			2,912,767			9,679	1.35			3,101,264			13,183	1.72
	Non-interest-bearing liabilities:
	Demand deposits					251,866							249,052
	Other liabilities					15,862							23,017
	Total liabilities					3,180,495							3,373,333
	Stockholders’ equity					307,976							305,849
	Total liabilities and stockholders’ equity				$	3,488,471						$	3,679,182

	Net interest income:
	Interest rate spread		3.34	%				$	39,361	4.95	%				$	26,571	3.47	%
	Net interest margin*									5.05	%						3.47	%
	Average interest-earning assets to average interest-bearing liabilities					108.4	%						100.2	%
_____________________
*	Defined as the Company’s net interest income divided by total interest-earning assets.

(1)		Of the total average balances of investment securities, average tax-exempt investment securities were $94.6 million and $63.2 million for the three months ended March 31, 2011 and 2010, respectively. In addition, average tax-exempt loans and industrial revenue bonds were $43.6 million and $46.7 million for the three months ended March 31, 2011 and 2010, respectively. Interest income on tax-exempt assets included in this table was $1.8 million and $1.3 million for the three months ended March 31, 2011 and 2010, respectively. Interest income net of disallowed interest expense related to tax-exempt assets was $1.6 million and $1.1 million for the three months ended March 31, 2011 and 2010, respectively.
(2)		The yield/rate on loans at March 31, 2011 does not include the impact of the accretable yield (income) on loans acquired in the 2009 FDIC-assisted transactions. See “Net Interest Income” for a discussion of the effect on results of operations for the quarter ended March 31, 2011.

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,
	2011 vs. 2010
	Increase (Decrease) Due to

							Total Increase (Decrease)
	Rate			Volume			Total Increase (Decrease)
	(Dollars in thousands)
Interest-earning assets:
Loans receivable	$	12,994		$	(3,104	)	$	9,890
Investment securities		(1,153	)		507			(646	)
Other interest-earning assets		(42	)		84			42
Total interest-earning assets		11,799			(2,513	)		9,286
Interest-bearing liabilities:
Demand deposits		(473	)		522			49
Time deposits		(1,570	)		(1,650	)		(3,220	)
Total deposits		(2,043	)		(1,128	)		(3,171	)
Short-term borrowings and structured repo		(100	)		(137	)		(237	)
Subordinated debentures issued to capital trust		4			--			4
FHLBank advances		32			(132	)		(100	)
Total interest-bearing liabilities		(2,107	)		(1,397	)		(3,504	)
Net interest income	$	13,906		$	(1,116	)	$	12,790

Liquidity and Capital Resources

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. The Company manages its ability to generate liquidity primarily through liability funding in such a way that it believes it maintains overall liquidity sufficient to satisfy its depositors' requirements and meet its customers' credit needs. At March 31, 2011, the Company had commitments of approximately $89.7 million to fund loan originations, $205.0 million of unused lines of credit and unadvanced loans, and $16.5 million of outstanding letters of credit.

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, 2011, the Company's total stockholders' equity was $305.2 million, or 8.7%, of total assets. At March 31, 2011, common stockholders' equity was $248.6 million, or 7.1%, of total assets, equivalent to a book value of $18.48 per common share. Total stockholders’ equity at December 31, 2010, was $304.0 million, or 8.9%, of total assets. At December 31, 2010, common stockholders' equity was $247.5 million, or 7.3%, of total assets, equivalent to a book value of $18.40 per common share.

At March 31, 2011 and December 31, 2010, the Company’s tangible common equity to total assets ratio was 7.0% and 7.1%, respectively. The Company’s tangible common equity to total risk-weighted assets ratio was 12.6% at March 31, 2011, compared to 12.4% at December 31, 2010.

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. Guidelines require banks to have a minimum Tier 1 risk-based capital ratio, as defined, of 4.00%, a minimum total risk-based capital ratio of 8.00%, and a minimum 4.00% Tier 1 leverage ratio. To be considered "well capitalized," banks must have a minimum Tier 1 risk-based capital ratio, as defined, of 6.00%, a minimum total risk-based capital ratio of 10.00%, and a minimum Tier 1 leverage ratio of 5.00%. On March 31, 2011, the Bank's Tier 1 risk-based capital ratio was 14.7%, total risk-based capital ratio was 16.0% and the Tier 1 leverage ratio was 8.2%. As of March 31, 2011, the Bank was "well capitalized" as defined by the Federal banking agencies' capital-related regulations. The Federal Reserve Board has established capital regulations for bank holding companies that generally parallel the capital regulations for banks. On March 31, 2011, the Company's Tier 1 risk-based capital ratio was 16.9%, total risk-based capital ratio was 18.2% and the Tier 1 leverage ratio was 9.4%. As of March 31, 2011, the Company was "well capitalized" under the capital ratios described above.

On December 5, 2008, the Company completed a transaction to participate in the U.S. Treasury's voluntary Capital Purchase Program (CPP). The CPP, a part of the Emergency Economic Stabilization Act of 2009, was designed to provide capital to healthy financial institutions, thereby increasing confidence in the banking industry and increasing the flow of financing to businesses and consumers. At the time the Company was approved to participate in the CPP in December 2008, it exceeded all “well-capitalized” regulatory benchmarks and, as indicated above, it continues to exceed these benchmarks. The Company received $58.0 million from the U.S. Treasury through the sale of 58,000 shares of the Company's newly authorized Fixed Rate Cumulative Perpetual Preferred Stock, Series A. The Company also issued to the U.S. Treasury a warrant to purchase 909,091 shares of common stock at $9.57 per share. The amount of preferred shares sold represents approximately 3% of the Company's risk-weighted assets as of September 30, 2008. Through its preferred stock investment, the Treasury will receive a cumulative dividend of 5% per year for the first five years, or $2.9 million per year, and 9% per year thereafter. The preferred shares are callable by the Company at 100% of the issue price, subject to consultation by the U.S. Treasury with the Company's primary federal regulator. In addition, for a period of the earlier of three years or until these preferred shares have been redeemed by the Company or divested by the Treasury, the Company has certain limitations on dividends that may be declared on its common or preferred stock and is prohibited from repurchasing shares of its common or other capital stock or any trust preferred securities issued by the Company without the Treasury’s consent.

As previously mentioned, the Company submitted an application to possibly participate in the U.S. Treasury’s Small Business Lending Fund (SBLF) but is not obligated to participate upon acceptance by the Treasury. Enacted into law

in 2010 as part of the Small Business Jobs Act, the SBLF is a $30 billion fund that encourages lending to small businesses by providing Tier 1 capital to qualified community banks with assets of less than $10 billion. The SBLF provides an option for eligible community banks to refinance preferred stock issued to the Treasury through the CPP. As noted above, the Company received $58.0 million through its participation in the CPP from the Treasury through the sale of preferred stock. If CPP funds were transferred to the SBLF, the 5% CPP dividend rate could potentially be reduced for a period of time, depending on the level of small business lending. Under the SBLF, the interest rate is variable for the first nine quarters. The initial rate is 5%, but could be as low as 1% depending on the level of small business lending. If lending does not increase in the first two years, however, the rate will increase to 7%. After 4.5 years (late 2015), the rate will increase to 9% if the bank has not repaid the SBLF funding.

At March 31, 2011, the held-to-maturity investment portfolio included $145,000 of gross unrealized gains and no gross unrealized losses.

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, 2011, the Company had these available secured lines and on-balance sheet liquidity:

Federal Home Loan Bank line	$247.5 million
Federal Reserve Bank line	$270.3 million
Interest-Bearing and Non-Interest-Bearing Deposits	$462.3 million
Unpledged Securities	$86.9 million

Statements of Cash Flows. During the three months ended March 31, 2011 and 2010, respectively, the Company had positive cash flows from operating and financing activities. Cash flows from investing activities were negative for the three months ended March 31, 2011 and were positive for the three months ended March 31, 2010.

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 loan losses, depreciation, impairments of investment securities, gains on sales of investment securities 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 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 $45.7 million and $10.1 million during the three months ended March 31, 2011 and 2010, respectively.

During the three months ended March 31, 2011, investing activities used cash of $98.5 million primarily due to the purchases of investment securities and the net increase in loans for the period. During the three months ended March 31, 2010, investing activities provided cash of $61.8 million primarily due to the net decrease of investment securities and loans for the period.

Changes in cash flows from financing activities during the periods covered by the Statements of Cash Flows are due to changes in deposits after interest credited, changes in FHLBank advances, changes in short-term borrowings, and changes in structured repurchase agreements, as well as dividend payments to stockholders. Financing activities provided cash of $85.1 million and $49.6 million during the three months ended March 31, 2011 and 2010, respectively. Financing activities in the future are expected to primarily include changes in deposits, changes in FHLBank advances, changes in short-term borrowings and dividend payments to stockholders.

Dividends. During the three months ended March 31, 2011, the Company declared a common stock cash dividend of $0.18 per share, or 50% of net income per common diluted share for that three month period, and paid a common stock cash dividend of $0.18 per share (which was declared in December 2010). During the three months ended March 31, 2010, the Company declared a common stock cash dividend of $0.18 per share (which was paid in April 2010), or 53% of net income per common diluted share for that three month period, and paid a common stock cash dividend of $0.18 per share (which was declared in December 2009). The Board of Directors meets regularly to consider the level

and the timing of dividend payments. The dividend declared but unpaid as of March 31, 2011, was paid to shareholders on April 13, 2011. In addition, the Company paid preferred dividends as described below.

Our participation in the CPP currently precludes us from increasing our common stock cash dividend above $0.18 per share per quarter without the consent of the Treasury until the earlier of December 5, 2011 or our repayment of the CPP funds or the transfer by the Treasury to third parties of all of the shares of preferred stock we issued to the Treasury pursuant to the CPP. As a result of the issuance of preferred stock to the Treasury pursuant to the CPP in December 2008, during the three months ended March 31, 2011, the Company paid preferred stock cash dividends of $725,000 on February 15, 2011. During the three months ended March 31, 2010, the Company paid preferred stock cash dividends of $725,000 on February 16, 2010. Quarterly payments of $725,000 will be due through February 15, 2014, as long as the preferred stock is outstanding. Thereafter, for as long as the preferred stock remains outstanding, the preferred stock quarterly dividend payment will increase to $1.3 million.

Common Stock Repurchases and Issuances. The Company has been in various buy-back programs since May 1990. During the three months ended March 31, 2011 and 2010, respectively, the Company did not repurchase any shares of its common stock. During the three months ended March 31, 2011, the Company issued 489 shares of stock at an average price of $8.45 per share to cover stock option exercises. During the three months ended March 31, 2010, the Company issued 21,947 shares of stock at an average price of $13.72 per share to cover stock option exercises.

Our participation in the CPP currently precludes us from purchasing shares of the Company’s stock without the Treasury's consent until the earlier of December 5, 2011 or our repayment of the CPP funds or the transfer by the Treasury to third parties of all of the shares of preferred stock we issued to the Treasury pursuant to the CPP. Management has historically utilized stock buy-back programs from time to time as long as repurchasing the stock contributed to the overall growth of shareholder value. The number of shares of stock repurchased and the price paid is the result of many factors, several of which are outside of the control of the Company. The primary factors, however, are the number of shares available in the market from sellers at any given time and the price of the stock within the market as determined by the market.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Asset and Liability Management and Market Risk

A principal operating objective of the Company is to produce stable earnings by achieving a favorable interest rate spread that can be sustained during fluctuations in prevailing interest rates. The Company has sought to reduce its exposure to adverse changes in interest rates by attempting to achieve a closer match between the periods in which its interest-bearing liabilities and interest-earning assets can be expected to reprice through the origination of adjustable-rate mortgages and loans with shorter terms to maturity and the purchase of other shorter term interest-earning assets. Since the Company uses laddered brokered deposits and FHLBank advances to fund a portion of its loan growth, the Company's assets tend to reprice more quickly than its liabilities.

Our Risk When Interest Rates Change

The rates of interest we earn on assets and pay on liabilities generally are established contractually for a period of time. Market interest rates change over time. Accordingly, our results of operations, like those of other financial institutions, are impacted by changes in interest rates and the interest rate sensitivity of our assets and liabilities. The risk associated with changes in interest rates and our ability to adapt to these changes is known as interest rate risk and is our most significant market risk.

How We Measure the Risk to Us Associated with Interest Rate Changes

In an attempt to manage our exposure to changes in interest rates and comply with applicable regulations, we monitor Great Southern's interest rate risk. In monitoring interest rate risk we regularly analyze and manage assets and liabilities based on their payment streams and interest rates, the timing of their maturities and their sensitivity to actual or potential changes in market interest rates.

The ability to maximize net interest income is largely dependent upon the achievement of a positive interest rate spread that can be sustained despite fluctuations in prevailing interest rates. Interest rate sensitivity is a measure of the difference between amounts of interest-earning assets and interest-bearing liabilities which either reprice or mature

within a given period of time. The difference, or the interest rate repricing "gap," provides an indication of the extent to which an institution's interest rate spread will be affected by changes in interest rates. A gap is considered positive when the amount of interest-rate sensitive assets exceeds the amount of interest-rate sensitive liabilities repricing during the same period, and is considered negative when the amount of interest-rate sensitive liabilities exceeds the amount of interest-rate sensitive assets during the same period. Generally, during a period of rising interest rates, a negative gap within shorter repricing periods would adversely affect net interest income, while a positive gap within shorter repricing periods would result in an increase in net interest income. During a period of falling interest rates, the opposite would be true. As of March 31, 2011, Great Southern's internal interest rate risk models indicate a one-year interest rate sensitivity gap that is slightly positive. Generally, a rate increase by the FRB (which does not appear likely in the very near term based on current economic conditions and recent comments by FRB officials) would be expected to have an immediate negative impact on Great Southern’s net interest income. As the Federal Funds rate is now very low, the Company’s interest rate floors have been reached on most of its “prime rate” loans. In addition, Great Southern has elected to leave its “Great Southern Prime Rate” at 5.00% for those loans that are indexed to “Great Southern Prime” rather than “Wall Street Journal Prime.” While these interest rate floors and prime rate adjustments have helped keep the rate on our loan portfolio higher in this very low interest rate environment, they will also reduce the positive effect to our loan rates when market interest rates, specifically the “prime rate,” begin to increase. The interest rate on these loans will not increase until the loan floors are reached and the “Wall Street Journal Prime” interest rate exceeds 5.00%. If rates remain generally unchanged in the short-term, we expect that our cost of funds will continue to decrease somewhat as we continue to redeem some of our wholesale funds. In addition, a significant portion of our retail certificates of deposit mature in the next few months and we expect that they will be replaced with new certificates of deposit at somewhat lower interest rates.

Interest rate risk exposure estimates (the sensitivity gap) are not exact measures of an institution's actual interest rate risk. They are only indicators of interest rate risk exposure produced in a simplified modeling environment designed to allow management to gauge the Bank's sensitivity to changes in interest rates. They do not necessarily indicate the impact of general interest rate movements on the Bank's net interest income because the repricing of certain categories of assets and liabilities is subject to competitive and other factors beyond the Bank's control. As a result, certain assets and liabilities indicated as maturing or otherwise repricing within a stated period may in fact mature or reprice at different times and in different amounts and cause a change, which potentially could be material, in the Bank's interest rate risk.

In order to minimize the potential for adverse effects of material and prolonged increases and decreases in interest rates on Great Southern's results of operations, Great Southern has adopted asset and liability management policies to better match the maturities and repricing terms of Great Southern's interest-earning assets and interest-bearing liabilities. Management recommends and the Board of Directors sets the asset and liability policies of Great Southern which are implemented by the asset and liability committee. The asset and liability committee is chaired by the Chief Financial Officer and is comprised of members of Great Southern's senior management. The purpose of the asset and liability committee is to communicate, coordinate and control asset/liability management consistent with Great Southern's business plan and board-approved policies. The asset and liability committee establishes and monitors the volume and mix of assets and funding sources taking into account relative costs and spreads, interest rate sensitivity and liquidity needs. The objectives are to manage assets and funding sources to produce results that are consistent with liquidity, capital adequacy, growth, risk and profitability goals. The asset and liability committee meets on a monthly basis to review, among other things, economic conditions and interest rate outlook, current and projected liquidity needs and capital positions and anticipated changes in the volume and mix of assets and liabilities. At each meeting, the asset and liability committee recommends appropriate strategy changes based on this review. The Chief Financial Officer or his designee is responsible for reviewing and reporting on the effects of the policy implementations and strategies to the Board of Directors at their monthly meetings.

In order to manage its assets and liabilities and achieve the desired liquidity, credit quality, interest rate risk, profitability and capital targets, Great Southern has focused its strategies on originating adjustable rate loans, and managing its deposits and borrowings to establish stable relationships with both retail customers and wholesale funding sources.

At times, depending on the level of general interest rates, the relationship between long- and short-term interest rates, market conditions and competitive factors, we may determine to increase our interest rate risk position somewhat in order to maintain or increase our net interest margin.

The asset and liability committee regularly reviews interest rate risk by forecasting the impact of alternative interest

rate environments on net interest income and market value of portfolio equity, which is defined as the net present value of an institution's existing assets, liabilities and off-balance sheet instruments, and evaluating such impacts against the maximum potential changes in net interest income and market value of portfolio equity that are authorized by the Board of Directors of Great Southern.

ITEM 4. CONTROLS AND PROCEDURES

We maintain a system of disclosure controls and procedures (as defined in Rule 13(a)-15(e) under the Securities Exchange Act (the "Exchange Act")) that is designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file under the Exchange Act is recorded, processed, summarized and reported accurately and within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate. An evaluation of our disclosure controls and procedures was carried out as of March 31, 2011, under the supervision and with the participation of our principal executive officer, principal financial officer and several other members of our senior management. Our principal executive officer and principal financial officer concluded that, as of March 31, 2011, our disclosure controls and procedures were effective in ensuring that the information we are required to disclose in the reports we file or submit under the Act is (i) accumulated and communicated to our management (including the principal executive officer and principal financial officer) to allow timely decisions regarding required disclosure, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.

There were no changes in our internal control over financial reporting (as defined in Rule 13(a)-15(f) under the Act) that occurred during the quarter ended March 31, 2011, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We do not expect that our internal control over financial reporting will prevent all errors and all fraud. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control procedure are met. Because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns in controls or procedures can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any control procedure also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control procedure, misstatements due to error or fraud may occur and not be detected.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

In the normal course of business, the Company and its subsidiaries are subject to pending and threatened legal actions, some for which the relief or damages sought are substantial. After reviewing pending and threatened litigation with counsel, management believes at this time that, except as noted below, the outcome of such litigation will not have a material adverse effect on the results of operations or stockholders' equity. We are not able to predict at this time whether the outcome of such actions may or may not have a material adverse effect on the results of operations in a particular future period as the timing and amount of any resolution of such actions and its relationship to the future results of operations are not known.

On November 22, 2010, a suit was filed against the Bank in Missouri state court in Springfield by a customer alleging that the fees associated with the Bank’s automated overdraft program in connection with its debit card and ATM cards constitute unlawful interest in violation of Missouri’s usury laws. The suit seeks class-action status for Bank customers who have paid overdraft fees on their checking accounts. The Bank has filed for a motion to dismiss the suit. At this early stage of the litigation, it is not possible for management of the Bank to determine the probability of a material adverse outcome or reasonably estimate the amount of any potential loss.

Item 1A. Risk Factors

There have been 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, 2010.

Item 2. Issuer Purchases of Equity Securities

On November 15, 2006, the Company's Board of Directors authorized management to repurchase up to 700,000 shares of the Company's outstanding common stock, under a program of open market purchases or privately negotiated transactions. The plan does not have an expiration date. However, our participation in the CPP precludes us from purchasing shares of the Company’s stock without the prior consent of the Treasury until the earlier of December 5, 2011 or our repayment of the CPP funds or the transfer by the Treasury to third parties of all of the shares of preferred stock we issued to the Treasury pursuant to the CPP. As indicated below, no shares were purchased during the first quarter of 2011.

	Total Number of Shares Purchased		Average Price Per Share		Total Number of Shares Purchased As Part of Publicly Announced Plan		Maximum Number of Shares that May Yet Be Purchased Under the Plan(1)

January 1, 2011 – January 31, 2011		---	$	----		---		396,562
February 1, 2011 – February 28, 2011		---	$	----		---		396,562
March 1, 2011 – March 31, 2011		---	$	----		---		396,562
		---	$	----		---

_______________________
(1)	Amount represents the number of shares available to be repurchased under the plan as of the last calendar day of the month shown.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Removed and Reserved

Item 5. Other Information

None.

Item 6. Exhibits and Financial Statement Schedules

	a)	Exhibits
		See Exhibit Index.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Great Southern Bancorp, Inc.
	Registrant
Date: May 6, 2011	/s/ Joseph W. Turner
	Joseph W. Turner President and Chief Executive Officer (Principal Executive Officer)
Date: May 6, 2011	/s/ Rex A. Copeland
	Rex A. Copeland Treasurer (Principal Financial and Accounting Officer)

EXHIBIT INDEX

Exhibit No. Description

(2)

Plan of acquisition, reorganization, arrangement, liquidation, or succession

(i)

The Purchase and Assumption Agreement, dated as of March 20, 2009, among Federal Deposit Insurance Corporation, Receiver of TeamBank, N.A., Paola, Kansas, Federal Deposit Insurance Corporation and Great Southern Bank, previously filed with the Commission (File no. 000-18082) as Exhibit 2.1 to the Registrant's Current Report on Form 8-K filed on March 26, 2010 is incorporated herein by reference as Exhibit 2.1.

(ii)

The Purchase and Assumption Agreement, dated as of September 4, 2009, among Federal Deposit Insurance Corporation, Receiver of Vantus Bank, Sioux City, Iowa, Federal Deposit Insurance Corporation and Great Southern Bank, previously filed with the Commission (File no. 000-18082) as Exhibit 2.1 to the Registrant's Current Report on Form 8-K filed on September 11, 2010 is incorporated herein by reference as Exhibit 2.1.

(3)

Articles of incorporation and Bylaws

(i)

The Registrant's Charter previously filed with the Commission as Appendix D to the Registrant's Definitive Proxy Statement on Schedule 14A filed on March 31, 2004 (File No. 000-18082), is incorporated herein by reference as Exhibit 3.1.

(iA)

The Articles Supplementary to the Registrant's Charter setting forth the terms of the Registrant's Fixed Rated

Cumulative Perpetual Preferred Stock, Series A, previously filed with the Commission (File no. 000-18082) as Exhibit 3.1 to the Registrant's Current Report on Form 8-K filed on December 9, 2008, are incorporated herein by reference as Exhibit 3(i).

(ii)

The Registrant's Bylaws, previously filed with the Commission (File no. 000-18082) as Exhibit 3(ii) to the Registrant's Current Report on Form 8-K filed on October 23, 2007, is incorporated herein by reference as Exhibit 3.2.

(4)	Instruments defining the rights of security holders, including indentures

The Company hereby agrees to furnish the SEC upon request, copies of the instruments defining the rights of the holders of each issue of the Registrant's long-term debt.

The warrant to purchase shares of the Registrant's common stock dated December 5, 2008, previously filed with the Commission (File no. 000-18082) as Exhibit 4.2 to the Registrant's Current Report on Form 8-K filed on December 9, 2008, is incorporated herein by reference as Exhibit 4(i).

(9)	Voting trust agreement

Inapplicable.

(10)	Material contracts

The Registrant's 1989 Stock Option and Incentive Plan previously filed with the Commission (File no. 000-18082) as Exhibit 10.2 to the Registrant's Annual Report on Form 10-K for the fiscal year ended March 31, 1990, is incorporated herein by reference as Exhibit 10.1.

The Registrant's 1997 Stock Option and Incentive Plan previously filed with the Commission (File no. 000-18082) as Annex A to the Registrant's Definitive Proxy Statement on Schedule 14A filed on September 18, 1997 is incorporated herein by reference as Exhibit 10.2.

The Registrant's 2003 Stock Option and Incentive Plan previously filed with the Commission (File No. 000-18082) as Annex A to the Registrant's Definitive Proxy Statement on Schedule 14A filed on April 14, 2003, is incorporated herein by reference as Exhibit 10.3.

The employment agreement dated September 18, 2002 between the Registrant and William V. Turner previously filed with the Commission (File no. 000-18082) as Exhibit 10.2 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2003, is incorporated herein by reference as Exhibit 10.4.

The employment agreement dated September 18, 2002 between the Registrant and Joseph W. Turner previously filed with the Commission (File no. 000-18082) as Exhibit 10.4 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2003, is incorporated herein by reference as Exhibit 10.5.

The form of incentive stock option agreement under the Registrant's 2003 Stock Option and Incentive Plan previously filed with the Commission as Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File no. 000-18082) filed on February 24, 2005 is incorporated herein by reference as Exhibit 10.6.

The form of non-qualified stock option agreement under the Registrant's 2003 Stock Option and Incentive Plan previously filed with the Commission as Exhibit 10.2 to the Registrant's Current Report on Form 8-K (File no. 000-18082) filed on February 24, 2005 is incorporated herein by reference as Exhibit 10.7.

A description of the current salary and bonus arrangements for 2011 for the Registrant's named executive officers previously filed with the Commission as Exhibit 10.8 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 is incorporated herein by reference as Exhibit 10.8.

A description of the current fee arrangements for the Registrant's directors previously filed with the Commission as Exhibit 10.9 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 is incorporated herein by reference as Exhibit 10.9.

The Letter Agreement, including Schedule A, and Securities Purchase Agreement, dated December 5, 2008, between the Registrant and the United States Department of the Treasury, previously filed with the Commission (File no. 000-18082) as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on December 8, 2008, is incorporated herein by reference as Exhibit 10.10.

The form of Compensation Modification Agreement and Waiver, executed by each of William V. Turner, Joseph W. Turner, Rex A. Copeland, Steven G. Mitchem, Douglas W. Marrs and Linton J. Thomason, previously filed with the Commission (File no. 000-18082) as Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed on December 8, 2008, is incorporated herein by reference as Exhibit 10.11.

(11)	Statement re computation of per share earnings

Included in Note 6 to the Consolidated Financial Statements.

(15)	Letter re unaudited interim financial information

Inapplicable.

(18)	Letter re change in accounting principles

Inapplicable.

(19)	Report furnished to securityholders.

Inapplicable.

(22)	Published report regarding matters submitted to vote of security holders

Inapplicable.

(23)	Consents of experts and counsel

Inapplicable.

(24)	Power of attorney

None.

(31.1)

Rule 13a-14(a) Certification of Chief Executive Officer

Attached as Exhibit 31.1

(31.2)

Rule 13a-14(a) Certification of Treasurer

Attached as Exhibit 31.2

(32)	Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)

Attached as Exhibit 32.

(99)	Additional Exhibits

None.

Attached files

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GREAT SOUTHERN BANCORP, INC. Reports