EX-99.1 2 ex99-3rdqtr.htm

October 19, 2006 FOR IMMEDIATE RELEASE

CONTACT: Kelly Polonus, Great Southern, 1.417.895.5242
kpolonus@greatsouthernbank.com

Great Southern Bancorp, Inc. Reports Quarterly Earnings of $.58 Per Share
Quarterly earnings up 11% over prior year quarter excluding previous derivatives accounting change

Springfield, Mo. -- Great Southern Bancorp, Inc. (NASDAQ:GSBC), the holding company for Great Southern Bank, today reported preliminary earnings for the quarter ended September 30, 2006, were $.58 per diluted share ($8,030,000) compared to the $.28 per diluted share ($3,845,000, as restated) the Company earned during the same quarter in the prior year. Excluding the effects of the Company's accounting change for certain interest rate swaps on prior year results, earnings for the quarter ended September 30, 2005, were $.51 per diluted share ($7,147,000). In addition, for the three months ended September 30, 2006, accounting entries required under accounting standards governing the Company's interest rate derivatives increased reported net income by $78,000. Thus, excluding the effects of the Company's accounting for interest rate swaps, earnings per diluted share were $.58 for the quarter ended September 30, 2006. As reported previously, the Company expects all charges related to the restatement of interest rate swaps in 2005 to flow back into income (perhaps unevenly) over the remaining terms of the swaps.

Preliminary earnings for the nine months ended September 30, 2006, were $1.65 per diluted share ($22,750,000) compared to the $1.26 per diluted share ($17,521,000, as restated) the Company earned during the same period in the prior year. Excluding the effects of the Company's accounting change for certain interest rate swaps on prior year results, earnings for the nine months ended September 30, 2005, were $1.48 per diluted share. In addition, for the nine months ended September 30, 2006, accounting entries required under accounting standards governing the Company's interest rate derivatives decreased reported net income by $248,000, or $.01 per diluted share after taxes. Thus, excluding the effects of the Company's accounting for interest rate swaps, earnings per diluted share were $1.66 for the nine months ended September 30, 2006.

"Great Southern's financial performance for the third quarter was very solid in a continuing difficult business environment," said Great Southern President and CEO Joseph W. Turner. "Loans have grown 9% for the first nine months of the year, with growth primarily in commercial and residential construction lending, from customers in both our primary and loan production markets. On an economic basis, our net interest margin continued to improve somewhat in the third quarter after stabilizing during the last half of 2005. Excluding the effects of our previous accounting change for interest rate swaps, our margin was 3.52%, which is up 19 basis points from third quarter 2005 and three basis points from the quarter ended June 30, 2006. Income from account service charges and ATMs fees was also up with a 10% increase over the 2005 comparable quarter."

For the three months ended September 30, 2006, return on average equity (ROAE) was 19.36%; return on average assets (ROAA) was 1.46%; and net interest margin (NIM) was 3.44%. The non-cash amortization of the prepaid broker fee to originate certificates of deposit (which was recorded as part of the accounting change in 2005) reduced net interest margin by 8 basis points (from 3.52%).

For the nine months ended September 30, 2006, return on average equity (ROAE) was 18.65%; return on average assets (ROAA) was 1.39%; and net interest margin (NIM) was 3.39%. The non-cash amortization of the prepaid broker fee to originate certificates of deposit reduced net interest margin by 9 basis points (from 3.48%).

More

Page 2

Stockholders' equity at September 30, 2006, was $169.5 million (7.7% of total assets), equivalent to a book value of $12.38 per share.

Selected Financial Data and Non-GAAP Reconciliation:
      (Dollars in thousands)


Three Months Ended September 30, 2006
 Nine Months Ended September 30, 2006
As Reported Effect of
Hedge Accounting
Entries Recorded		 Excluding
Hedge Accounting
Entries Recorded 		As Reported Effect of
Hedge Accounting
Entries Recorded		 Excluding
Hedge Accounting
Entries Recorded
 
Net interest income $17,865 $ (417) $18,282 $51,620 $(1,401) $53,021
Provision for loan losses 1,350 -- 1,350 4,100 -- 4,100
Non-interest income 7,090 537 6,553 21,654 1,019 20,635
Non-interest expense 12,288 -- 12,288 36,153 -- 36,153
Provision for income taxes 3,287
 (42)
 3,245
 10,271
 134
 10,405
       Net income $ 8,030
 $ 78
 $ 7,952
 $22,750
 $ (248)
 $22,998
 
 
Three Months Ended September 30, 2005
 Nine Months Ended September 30, 2005
As Reported Effect of
Accounting Change
for Int. Rate Swaps		 Excluding
Accounting Change
for Int. Rate Swaps		 As Reported Effect of
Accounting Change
for Int. Rate Swaps		 Excluding
Accounting Change
for Int. Rate Swaps
 
Net interest income $15,100 $(914) $16,014 $42,444 $(4,225) $46,669
Provision for loan losses 975 -- 975 2,850 -- 2,850
Non-interest income 2,695 (4,166) 6,861 18,688 (457) 19,145
Non-interest expense 11,390 -- 11,390 32,723 -- 32,723
Provision for income taxes 1,585
 1,778
 3,363
 8,038
 1,639
 9,677
       Net income $3,845
 $(3,302)
 $ 7,147
 $17,521
 $(3,043)
 $20,564



Three Months Ended September 30, 2006
 Nine Months Ended September 30, 2006
2006
 2005
 2006
 2005
Dollars
(000)
 Earnings
Per Share
 Dollars
(000)
 Earnings
Per Share
 Dollars
(000)
 Earnings
Per Share
 Dollars
(000)
 Earnings
Per Share
Reported Earnings $8,030 $.58 $3,845 $.28 $22,750 $1.65 $17,521 $1.26
 
Amortization of deposit broker
  origination fees (net of taxes)		 271 .02 175 .01 910 .06 555 .04
 
Net change in fair value of interest
  rate swaps and related deposits
  (net of taxes)

(349)

(.02)

3,127

.22

(662)

(.05)

2,488

.18
 
Earnings excluding impact
  of hedge accounting entries
$7,952
$.58
$7,147
$.51
$22,998
$1.66
$20,564
$1.48

NET INTEREST INCOME

Including the impact of the accounting change for certain interest rate swaps (2005 results restated), net interest income for the third quarter of 2006 increased $2.8 million to $17.9 million compared to $15.1 million for the third quarter of 2005. Net interest margin was 3.44% in the quarter ended September 30, 2006, compared to 3.14% in the same period in 2005, an increase of 30 basis points.

More

Page 3

Excluding the impact of the accounting change for certain interest rate swaps, economically, net interest income for the third quarter of 2006 increased $2.3 million to $18.3 million compared to $16.0 million for the third quarter of 2005. Net interest margin excluding the effects of the accounting change was 3.52% in the quarter ended September 30, 2006, compared to 3.33% in the quarter ended September 30, 2005.

Including the impact of the accounting change for certain interest rate swaps (2005 results restated), net interest income for the first nine months of 2006 increased $9.2 million to $51.6 million compared to $42.4 million for the first nine months of 2005. Net interest margin was 3.39% in the nine months ended September 30, 2006, compared to 3.08% in the same period in 2005, an increase of 31 basis points.

Excluding the impact of the accounting change for certain interest rate swaps, economically, net interest income for the first nine months of 2006 increased $6.3 million to $53.0 million compared to $46.7 million for the first nine months of 2005. Net interest margin excluding the effects of the accounting change was 3.48% in the nine months ended September 30, 2006, compared to 3.38% in the nine months ended September 30, 2005.

Non-GAAP Reconciliation
(Dollars in Thousands)


Three Months Ended September 30, 2006
 Nine Months Ended September 30, 2006
2006
 2005
 2006
 2005
Dollars
(000)
 %
 Dollars
(000)
 %
 Dollars
(000)
 %
 Dollars
(000)
 %
Net Interest Income/ Margin $17,865 3.44% $15,100 3.14% $51,620 3.39% $42,444 3.08%
 
Amortization of deposit broker
  origination fees
417
.08
270
.06
1,401
.09
854
.06
 
Interest rate swap net settlements --
 --
 644
 .13
 --
 --
 3,371
 .24
 
Net interest income/margin excluding
  impact of hedge accounting entries
$18,282
3.52%
$16,014
3.33%
$53,021
3.48%
$46,669
3.38%

For additional information on net interest income components, refer to "Average Balances, Interest Rates and Yields" table in this release. This table is prepared including the impact of the accounting changes for interest rate swaps.

NON-INTEREST INCOME

Including the effects of the Company's restatement in 2005 for certain interest rate swaps, non-interest income for the third quarter of 2006 was $7.1 million compared with $2.7 million for the third quarter 2005. The $4.4 million increase in non-interest income is primarily attributable to the effects of the accounting change for interest rate swaps on the prior period results. Non-interest income decreased $4.8 million in the three months ended September 30, 2005, and increased $537,000 in the three months ended September 30, 2006, as a result of the change in the fair value of certain interest rate swaps. In addition, non-interest income for the third quarter of 2005 was also impacted by the reclassification of the net interest settlements on these swaps from net interest income to non-interest income. While this had no effect on total net income, non-interest income was increased by $644,000 in the three months ended September 30, 2005. There was no reclassification of net interest settlements in the three months ended September 30, 2006. Excluding the effects of interest rate swap-related entries, non-interest income decreased $308,000, or 4%, in the three months ended September 30, 2006, compared to September 30, 2005.

More

Page 4

Third quarter 2006 income from commissions from the Company's travel, insurance and investment divisions decreased $61,000, or 3%, compared to the same period in 2005. Service charges on deposit accounts and ATM fees increased $341,000, or 10%, compared to the same period in 2005. Late charges and fees on loans decreased by $419,000, or 60%, compared to the same period in 2005 due to significantly more loan prepayment fees collected in the 2005 period.

Including the effects of the Company's restatement in 2005, non-interest income for the nine months ended September 30, 2006 was $21.7 million compared with $18.7 million for the nine months ended September 30, 2005. The $3.0 million increase in non-interest income is primarily attributable to the effects of the accounting change for interest rate swaps on the prior period results. Non-interest income decreased $3.8 million in the nine months ended September 30, 2005, and increased $1.0 million in the nine months ended September 30, 2006, as a result of the change in the fair value of certain interest rate swaps. In addition, non-interest income for the first six months of 2005 was also impacted by the reclassification of the net interest settlements on these swaps from net interest income to non-interest income. While this had no effect on total net income, non-interest income increased by $3.4 million in the nine months ended September 30, 2005. There was no reclassification of net interest settlements in the nine months ended September 30, 2006. Excluding the effects of interest rate swap-related entries, non-interest income increased $1.5 million, or 8%, in the nine months ended September 30, 2006, compared to September 30, 2005.

For the nine months ended September 30, 2006, income from commissions from the Company's travel, insurance and investment divisions increased $403,000, or 6%, compared to the same period in 2005. Service charges on deposit accounts and ATM fees increased $959,000, or 10%, compared to the same period in 2005.

NON-INTEREST EXPENSE

Non-interest expense for the quarter ended September 30, 2006 was $12.3 million compared with $11.4 million for the third quarter of 2005. Non-interest expense increased $173,000 when comparing the third quarter 2006 to second quarter 2006 expenses of $12.1 million. The Company's efficiency ratio for the quarter ended September 30, 2006, was 49.24% compared to 64.01% in the same quarter in 2005. These efficiency ratios include the impact of the accounting change for certain interest rate swaps. Excluding the effects of accounting for interest rate swaps, the efficiency ratio for the third quarter 2006 was 49.48% compared to 49.79% in the same period in 2005. The Company's ratio of non-interest expense to average assets has remained very constant over these recent periods at approximately 2.20%.

Non-interest expense for the first nine months of 2006 was $36.2 million compared with $32.7 million for the first nine months of 2005. The Company's efficiency ratio for the nine months ended September 30, 2006, was 49.34% compared to 53.53% in the same period in 2005. These efficiency ratios include the impact of the accounting change for certain interest rate swaps. Excluding the effects of accounting for interest rate swaps, the efficiency ratio for the first nine months of 2006 was 49.08% compared to 49.72% in the same period in 2005.

More

Page 5

Non-GAAP Reconciliation
(Dollars in Thousands)

Three Months Ended September 30,
2006
 2005
Non-Interest
Expense
(000)
 Revenue
Dollars*
(000)
 %
 Non-Interest
Expense
(000)
 Revenue
Dollars*
(000)
 %
Efficiency Ratio $12,288 $24,955 49.24% $11,390 $17,795 64.01%
 
Amortization of deposit broker
  origination fees
--
417
(.81)
--
270
(.76)
 
Net change in fair value of interest
  rate swaps and related deposits
--
(537)
1.05
--
4,810
(13.46)
 
Efficiency ratio excluding impact
  of hedge accounting entries
$12,288
$24,835
49.48%
$11,390
$22,875
49.79%
 
* Net interest income plus non-interest income.


Nine Months Ended September 30,
2006
 2005
Non-Interest
Expense
(000)
 Revenue
Dollars*
(000)
 %
 Non-Interest
Expense
(000)
 Revenue
Dollars*
(000)
 %
Efficiency Ratio $36,153 $73,274 49.34% $32,723 $61,132 53.53%
 
Amortization of deposit broker
  origination fees
--
1,401
(.95)
--
854
(.69)
 
Net change in fair value of interest
  rate swaps and related deposits
--
(1,019)
.69
--
3,828
(3.12)
 
Efficiency ratio excluding impact
  of hedge accounting entries
$36,153
$73,656
49.08%
$32,723
$65,814
49.72%
* Net interest income plus non-interest income.

The Company's increase in non-interest expense in the third quarter of 2006 compared to the same period in 2005 related to the continued growth of the Company. During the latter half of 2005, Great Southern completed its acquisition of three bank branches in central Missouri, acquired a Columbia, Mo.-based travel agency, and opened a banking center in Republic, Mo. In the first half of 2006, Great Southern acquired a travel agency in Lee's Summit, Mo., and established a new loan production office in Columbia, Mo. In September 2006, Great Southern opened new banking centers in Lee's Summit, Mo., and Ozark, Mo. As a result, in the three months ended September 30, 2006, compared to the three months ended September 30, 2005, non-interest expense increased $545,000 related to the ongoing operations of these new offices referenced above. For the nine months ended September 30, 2006, compared to the nine months ended September 30, 2005, expenses for these offices increased $1.4 million. In addition to these acquisitions and new offices, the Company expanded the loan production offices in St. Louis and Rogers, Ark., and added lending and lending support personnel in the Springfield market.

Consistent with many other employers, the cost of health insurance premiums and other benefits for the Company continues to rise and added $215,000 in expenses in the third quarter of 2006 compared to the same quarter in 2005. In the first nine months of 2006, these benefit-related expenses increased by $800,000 compared to the same period in 2005.

During the quarter ended September 30, 2006, the Company also recorded expenses of $114,000, or $.01 per diluted share, related to the cost of stock options previously granted by the Company. During the nine months ended September 30, 2006, this recorded expense was $343,000, or $.02 per diluted share.

More

Page 6

INCOME TAXES

For the three months and nine months ended September 30, 2006, the Company's effective tax rate was 29% and 31%, respectively, which was slightly lower than historical levels of approximately 32%. This lower effective tax rate related primarily to tax credits for 2005 and 2006.

ASSET QUALITY

As a result of continued growth in 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 at September 30, 2006, were $28.3 million, up $11.5 million from December 31, 2005, and up $2.1 million from June 30, 2006. Non-performing assets as a percentage of total assets were 1.28% at September 30, 2006. Compared to December 31, 2005, non-performing loans increased $10.2 million to $26.4 million while foreclosed assets increased $1.3 million to $1.9 million. Commercial real estate, construction and business loans comprised $25.3 million, or 96%, of the total $26.4 million of non-performing loans at September 30, 2006. The increase in non-performing loans during the quarter ended September 30, 2006, was primarily due to the addition of one $3.1 million loan relationship and one $1.8 million loan relationship to the non-performing category, partially offset by the repayment of one loan relationship secured by two restaurant locations totaling $1.4 million and the repayment of one loan relationship secured by a motel near Branson, Mo., totaling $879,000. Other increases in non-performing loans during the nine months ended September 30, 2006, were primarily due to the addition of one $1.3 million loan relationship, one $3.1 million loan relationship and the increase by $3.8 million of one loan relationship (now totaling $5.2 million) to the non-performing category. This increase was partially offset by the repayment of one $640,000 relationship which was included in non-performing assets at December 31, 2005, and the reduction of another relationship by $1.1 million through the sale of a portion of the assets securing the debt, resulting in a remaining relationship total of $910,000 at September 30, 2006. Three additional significant loan relationships were previously included in Non-performing Loans and remained there at September 30, 2006. These relationships are described more fully in the December 31, 2005, Annual Report on Form 10-K.

The $3.1 million loan relationship was placed in the Non-performing Loans category during the quarter ended September 30, 2006. This relationship is primarily secured by a townhome/apartment development in the Kansas City, Mo., area, and was included in the Potential Problem Loans category at June 30, 2006.

The $1.8 million loan relationship was placed in the Non-performing Loans category during the quarter ended September 30, 2006. This relationship is primarily secured by a motel in Branson, Mo., and was included in the Potential Problem Loans category at June 30, 2006.

Originally included in non-performing loans as $3.7 million (now totaling $5.3 million), $1.6 million was added to the Non-performing Loans category from the Potential Problem Loans category during the three months ended June 30, 2006. The $3.7 million portion of this relationship is secured by a nursing home in Missouri that has had cash flow problems. The additional $1.6 million is secured by a second nursing home in the Springfield, Mo., area. This second nursing home has performed satisfactorily; however, due to the performance issues of the other property, the entire relationship has now been categorized as non-performing.

The $3.1 million loan relationship was placed in the Non-performing Loans category during the quarter ended March 31, 2006. At December 31, 2005, this relationship was included in the Potential Problem Loans category and was described more fully in the December 31, 2005, Annual Report on Form 10-K. This relationship is secured by a motel and additional real estate collateral.

More

Page 7

The $5.2 million relationship was discussed in the December 31, 2005 Annual Report on Form 10-K, where $1.5 million was included in the Non-performing Loans category and $6.2 million was included in the Potential Problem Loans category. This relationship is secured by an office building, vacant land, developed and undeveloped residential subdivisions, houses under construction and houses used as rental property. The Company previously determined that the transfer of this portion of the relationship to the Non-performing Loans category was warranted due to continued deterioration of payment performance. During the three months ended March 31, 2006, the Company recorded a charge-off of $283,000 on this relationship. In addition, during the three months ended June 30, 2006, the borrower sold some of the commercial real estate and subdivision lots. The proceeds of these sales were used to reduce loan balances from $6.2 million to $5.3 million.

Potential problem loans decreased $6.3 million during the nine months ended September 30, 2006, from $18.4 million at December 31, 2005, to $12.1 million at September 30, 2006. Potential problem loans are loans which management has identified through routine internal review procedures as having possible credit problems which may cause the borrowers difficulty in complying with current repayment terms. These loans are not reflected in the non-performing assets. Potential problem loans decreased primarily due to the transfer to the non-performing loan category of the loan relationships previously described, partially offset by the addition of other unrelated loan relationships to the Potential Problem Loans category.

BUSINESS INITIATIVES

In the third quarter of 2006, the Company expanded its retail banking center network from 35 to 37 offices. Great Southern opened a banking center in early September in Lee's Summit, Mo., a growing Kansas City-area community. This banking center marks the Company's first retail banking presence in the region and complements services already provided in the area: a Great Southern Travel office in Lee's Summit and an Overland Park, Kan.-based loan production office serving the metropolitan Kansas City market. In early September, the company also opened a banking center near Springfield in Ozark, Mo., the second Great Southern location in this growing southwest Missouri community.

Loan production offices (LPO) in Overland Park, Kan., Rogers, Ark., St. Louis and Columbia, Mo., continued to grow in the first nine months of 2006. The following figures represent loan originations for the first nine months of 2006 and outstanding loan balances as of September 30, 2006: the Overland Park LPO originated $39.0 million in loans with outstanding loan balances of $186.0 million; the Rogers LPO had $64.7 million in loan originations and $146.9 in outstanding loan balances; and the St. Louis LPO had loan originations of $185.9 million and $187.6 million in outstanding loan balances. The Columbia LPO, which began operating in March 2006 and serves the Columbia, Jefferson City, and Lake of the Ozarks, Mo., region, had loan originations of $21.2 million and $15.6 million in outstanding loan balances.

The common stock of Great Southern Bancorp, Inc., is quoted on the Nasdaq Global Select Market System under the symbol "GSBC". The last reported sale of GSBC stock in the quarter ended September 30, 2006, was at $28.10.

Great Southern offers a broad range of banking, investment, insurance and travel services to customers and clients. Headquartered in Springfield, Mo., Great Southern operates 37 banking centers and 170 ATMs throughout southwest and central Missouri. The Company also serves lending needs through loan production offices in Overland Park, Kan., Rogers, Ark., Columbia, Mo., and St. Louis.

www.greatsouthernbank.com

More

Page 8

When used in this press release, 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, changes in economic conditions in Great Southern Bancorp's ("Company") market area, changes in policies by regulatory agencies, fluctuations in interest rates, the credit risks of lending 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, the Company's ability to access cost-effective funding, demand for loans and deposits in the Company's market area and competition, that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. 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.

The following tables set forth certain selected consolidated financial information of the company at and for the periods indicated. Financial data for all periods is unaudited. In the opinion of management, all adjustments, which consist only of normal recurring accruals, necessary for a fair presentation of the results for and at such unaudited periods have been included. The results of operations and other data for the three and nine months ended September 30, 2006 and 2005 are not necessarily indicative of the results of operations, which may be expected for any future period.

Selected Financial Condition Data: September 30,
2006
 December 31,
2005
(Dollars in thousands)
 
    Total assets $2,208,533 $2,081,155
    Loans receivable, gross 1,680,839 1,536,595
    Allowance for loan losses 26,122 24,549
    Foreclosed assets, net 1,883 595
    Available-for-sale securities, at fair value 347,880 369,316
    Held-to-maturity securities, at amortized cost 1,470 1,510
    Deposits 1,735,727 1,550,253
    Total borrowings 276,047 355,052
    Stockholders' equity 169,542 152,802
    Non-performing assets 28,258 16,805


Three Months Ended
September 30,		 Nine Months Ended
September 30,		 Three Months Ended
June 30,
2006
 2005
 2006
 2005
 2006
Selected Operating Data: (Dollars in thousands)
 
    Interest income $39,204 $29,924 $110,629 $82,463 $37,228
    Interest expense 21,339
 14,824
 59,009
 40,019
 20,105
    Net interest income 17,865 15,100 51,620 42,444 17,123
    Provision for loan losses 1,350 975 4,100 2,850 1,425
    Non-interest income 7,090 2,695 21,654 18,688 7,441
    Non-interest expense 12,288 11,390 36,153 32,723 12,115
    Provision for income taxes 3,287
 1,585
 10,271
 8,038
 3,500
        Net income $8,030
 $3,845
 $22,750
 $17,521
 $7,524
 
 
Three Months Ended
September 30,		 Nine Months Ended
September 30,		 Three Months Ended
June 30,
2006
 2005
 2006
 2005
 2006
Per Common Share:
    Net income (fully diluted) $.58    $.28    $1.65    $1.26    $.54   
    Book value $12.38    $11.03    $12.38    $11.03    $11.67   
Earnings Performance Ratios:
    Annualized return on average assets 1.46% .76% 1.39% 1.19% 1.38%
    Annualized return on average stockholders' equity 19.36% 10.06% 18.65% 15.80% 19.02%
    Net interest margin 3.44% 3.14% 3.39% 3.08% 3.35%
    Average interest rate spread 2.81% 2.73% 2.84% 2.70% 2.82%
    Efficiency ratio 49.24% 64.01% 49.34% 53.53% 49.32%
    Non-interest expense to average total assets 2.21% 2.23% 2.21% 2.20% 2.21%

Asset Quality Ratios:

    Allowance for loan losses to period-end loans 1.55% 1.59% 1.55% 1.59% 1.52%
    Non-performing assets to period-end assets 1.28% .77% 1.28% .77% 1.17%
    Non-performing loans to period-end loans 1.57% .91% 1.57% .91% 1.50%
    Annualized net charge-offs to average loans .18% .34% .21% .21% .27%

GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except number of shares)

September 30,
2006
 December 31,
2005
 June 30,
2006
(Unaudited) (Unaudited)
ASSETS
Cash $ 116,200 $ 116,578 $ 137,349
Interest-bearing deposits in other financial institutions 1,857
 1,154
 1,634
      Cash and cash equivalents 118,057 117,732 138,983

Available-for-sale securities 347,880 369,316 367,686
Held-to-maturity securities (fair value $1,565 - September 2006;
   $1,603 - December 2005)		 1,470 1,510 1,470
Mortgage loans held for sale 4,320 2,124 2,469
Loans receivable, net of allowance for loan losses of
   $26,122 - September 2006; $24,549 - December 2005		 1,654,717 1,512,046 1,651,447
Interest receivable 13,394 10,841 12,263
Prepaid expenses and other assets 16,129 13,266 13,759
Foreclosed assets held for sale, net 1,883 595 1,081
Premises and equipment, net 26,170 27,265 25,887
Goodwill and other intangible assets 1,433 1,402 1,353
Investment in Federal Home Loan Bank stock 10,009 11,857 12,772
Deferred income taxes 13,071
 13,201
 14,990
        Total Assets $ 2,208,533
 $ 2,081,155
 $ 2,244,160
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 1,735,727 $ 1,550,253 $ 1,709,331
Federal Home Loan Bank advances 148,400 203,435 192,754
Short-term borrowings 109,770 133,558 132,316
Subordinated debentures issued to capital trust 17,877 18,059 17,663
Accrued interest payable 5,589 4,615 5,287
Advances from borrowers for taxes and insurance 1,193 233 877
Accounts payable and accrued expenses 18,576 17,494 25,626
Income taxes payable 1,859
 706
 829
       Total Liabilities 2,038,991
 1,928,353
 2,084,683
Stockholders' Equity:
Capital stock
  Serial preferred stock, $.01 par value;
    authorized 1,000,000 shares; none issued		 -- -- --
  Common stock, $.01 par value; authorized 20,000,000 shares; issued and
    Outstanding September 2006 - 13,691,239 shares; December 2005 -
    13,722,801 shares		 137 137 137
Additional paid-in capital 18,278 17,781 18,076
Retained earnings 153,797 138,921 147,531
Accumulated other comprehensive income (loss) (2,670)
 (4,037)
 (6,267)
        Total Stockholders' Equity 169,542
 152,802
 159,477
        Total Liabilities and Stockholders' Equity $ 2,208,533
 $ 2,081,155
 $ 2,244,160

GREAT SOUTHERN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)

Three Months Ended
September 30,		 Nine Months Ended
September 30,		 Three Months Ended
June 30,
2006
 2005
 2006
 2005
 2006
(Unaudited) (Unaudited) (Unaudited)
INTEREST INCOME
  Loans $ 34,905 $ 25,944 $ 97,620 $ 70,125 $ 32,914
  Investment securities and other 4,299
 3,980
 13,009
 12,338
 4,314
    TOTAL INTEREST INCOME 39,204
 29,924
 110,629
 82,463
 37,228
INTEREST EXPENSE
  Deposits 17,814 11,264 47,593 29,899 16,022
  Federal Home Loan Bank advances 1,854 1,957 6,238 5,812 2,352
  Short-term borrowings 1,320 1,348 4,225 3,609 1,414
  Subordinated debentures issued to capital trust 351
 255
 953
 699
 317
    TOTAL INTEREST EXPENSE 21,339
 14,824
 59,009
 40,019
 20,105
NET INTEREST INCOME 17,865 15,100 51,620 42,444 17,123
PROVISION FOR LOAN LOSSES 1,350
 975
 4,100
 2,850
 1,425
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 16,515
 14,125
 47,520
 39,594
 15,698
NONINTEREST INCOME
  Commissions 1,989 2,050 7,013 6,610 2,482
  Service charges and ATM fees 3,826 3,485 10,859 9,900 3,720
  Net realized gains on sales of loans 233 319 707 758 260
  Net realized gains (losses) on sales of
    available-for-sale securities		 28 89 (2) 66 (29)
  Net gain (loss) on sales of fixed assets 9 (16) 165 (25) 8
  Late charges and fees on loans 275 694 1,291 1,147 237
  Change in interest rate swap fair value net of change
   in hedged deposit fair value		 438 -- 721 -- 460
  Change in interest rate swap fair value -- (4,810) -- (3,828) --
  Interest rate swap net settlements -- 644 -- 3,371 --
  Other income 292
 240
 900
 689
 303
    TOTAL NONINTEREST INCOME 7,090
 2,695
 21,654
 18,688
 7,441
NONINTEREST EXPENSE
  Salaries and employee benefits 7,297 6,517 21,447 18,872 7,169
  Net occupancy and equipment expense 1,864 1,911 5,683 5,377 1,888
  Postage 554 504 1,634 1,447 552
  Insurance 223 220 658 663 222
  Advertising 251 232 776 782 273
  Office supplies and printing 264 240 692 675 215
  Telephone 381 260 1,037 783 316
  Legal, audit and other professional fees 297 348 866 1,026 328
  Expense (income) on foreclosed assets 89 88 110 336 56
  Other operating expenses 1,068
 1,070
 3,250
 2,762
 1,096
    TOTAL NONINTEREST EXPENSE 12,288
 11,390
 36,153
 32,723
 12,115
INCOME BEFORE INCOME TAXES 11,317 5,430 33,021 25,559 11,024
PROVISION FOR INCOME TAXES 3,287
 1,585
 10,271
 8,038
 3,500
NET INCOME $ 8,030
 $ 3,845
 $ 22,750
 $ 17,521
 $ 7,524
BASIC EARNINGS PER COMMON SHARE $.59
 $.28
 $1.66
 $1.28
 $.55
DILUTED EARNINGS PER COMMON SHARE $.58
 $.28
 $1.65
 $1.26
 $.54
DIVIDENDS DECLARED PER COMMON SHARE $.15
 $.13
 $.44
 $.38
 $.15

Average Balances, Interest Rates and Yields

    The following table presents, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates, and the net interest margin. Average balances of loans receivable include the average balances of non-accrual loans for each period. Interest income on loans includes interest received on non-accrual loans on a cash basis. Interest income on loans includes the amortization of net loan fees, which were deferred in accordance with accounting standards. Fees included in interest income were $757,000 and $582,000 for the three months ended September 30, 2006 and 2005, respectively. Fees included in interest income were $2.1 million and $1.5 million for the nine months ended September 30, 2006 and 2005, respectively. Tax-exempt income was not calculated on a tax equivalent basis. The table does not reflect any effect of income taxes.

Three Months Ended
September 30, 2006		 Three Months Ended
September 30, 2005
Average
Balance		 Interest Yield/
Rate		 Average
Balance		 Interest Yield/
Rate
(Dollars in thousands)
Interest-earning assets:
   Loans receivable:
     One- to four-family
        residential
$ 177,044
$ 3,039
6.81%
$ 177,936
$ 2,708
6.04%
     Other residential 76,794 1,583 8.18    124,657 2,330 7.41   
     Commercial real estate 479,374 10,184 8.43    489,145 8,545 6.93   
     Construction 601,888 13,331 8.79    404,133 7,232 6.96   
     Commercial business 115,103 2,483 8.56    108,886 1,911 7.10   
     Other loans 141,814 2,710 7.58    141,802 2,382 6.66   
     Industrial revenue bonds 86,610
 1,575
 7.21   
 54,880
 836
 6.05   
 
          Total loans receivable 1,678,627 34,905 8.25    1,501,439 25,944 6.86   
Investment securities and other
  interest-earning assets
382,957
4,299
4.45   
405,547
3,980
3.89   
 
Total interest-earning assets 2,061,584 39,204
 7.54   
 1,906,986 29,924
 6.23   
Non-interest-earning assets:
     Cash and cash equivalents 98,693 93,629
     Other non-earning assets 42,958
 28,510
          Total assets $2,203,235
 $2,029,125
 
Interest-bearing liabilities:
     Interest-bearing demand and
       savings
$   412,475
3,191
3.07   
$   377,261
2,136
2.25   
     Time deposits 1,075,292
 14,623
 5.40   
 940,597
 9,128
 3.85   
          Total deposits 1,487,767 17,814 4.75    1,317,858 11,264 3.39   
Short-term borrowings 114,088 1,320 4.59    156,883 1,348 3.41   
Subordinated debentures issued
  to capital trust
17,768
351
7.84   
18,256
255
5.54   
FHLB advances 168,721
 1,854
 4.36   
 188,883
 1,957
 4.11   
 
          Total interest-bearing
             Liabilities		 1,788,344 21,339
 4.73   
 1,681,880 14,824
 3.50   
Non-interest-bearing liabilities:
     Demand deposits 200,712 182,005
     Other liabilities 48,253
 12,321
          Total liabilities 2,037,309 1,876,206
Stockholders' equity 165,926
 152,919
          Total liabilities and
             stockholders' equity
$2,203,235
$2,029,125
 
     Net interest income:
     Interest rate spread $17,865
 2.81%
 $15,100
 2.73%
     Net interest margin* 3.44%
 3.14%
Average interest-earning assets
  to average interest-bearing
  liabilities		 115.3%
 113.4%

_______________

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

Nine Months Ended
September 30, 2006		 Nine Months Ended
September 30, 2005
Average
Balance		 Interest Yield/
Rate		 Average
Balance		 Interest Yield/
Rate
(Dollars in thousands)
Interest-earning assets:
   Loans receivable:
     One- to four-family
        residential		 $   176,781 $ 8,913 6.74% $   178,234 $ 7,571 5.68%
     Other residential 89,878 5,493 8.17    120,754 6,395 7.08   
     Commercial real estate 467,178 28,071 8.03    472,107 23,347 6.61   
     Construction 579,724 36,404 8.40    368,540 18,378 6.67   
     Commercial business 109,272 6,918 8.46    104,469 5,215 6.67   
     Other loans 140,037 7,799 7.45    136,117 6,830 6.71   
     Industrial revenue bonds 75,853
 4,022
 7.09   
 51,561
 2,389
 6.19   
 
          Total loans receivable 1,638,723 97,620 7.96    1,431,782 70,125 6.55   
 
Investment securities and other
  interest-earning assets		 399,963
 13,009
 4.35   
 412,775
 12,338
 4.00   
 
Total interest-earning assets 2,038,686 110,629
 7.26   
 1,844,557 82,463
 5.98   
Non-interest-earning assets:
     Cash and cash equivalents 98,990 91,454
     Other non-earning assets 40,921
 25,474
          Total assets $2,178,597
 $1,961,485
 
Interest-bearing liabilities:
     Interest-bearing demand and
       savings
$   427,998
9,469
2.96   
$   379,159
5,639
1.99   
     Time deposits 1,015,550
 38,124
 5.02   
 866,889
 24,260
 3.74   
          Total deposits 1,443,548 47,593 4.41    1,246,048 29,899 3.21   
Short-term borrowings 131,468 4,225 4.30    163,547 3,609 2.95   
Subordinated debentures issued
  to capital trust
17,847
953
7.14   
18,397
699
5.08   
FHLB advances 192,422
 6,238
 4.33   
 206,673
 5,812
 3.76   
 
          Total interest-bearing
             liabilities
1,785,285
59,009
4.42   
1,634,665
40,019
3.28   
Non-interest-bearing liabilities:
     Demand deposits 191,073 167,342
     Other liabilities 39,614
 11,600
          Total liabilities 2,015,972 1,813,607
Stockholders' equity 162,625
 147,878
          Total liabilities and
             stockholders' equity
$2,178,597
$1,961,485
 
     Net interest income:
     Interest rate spread $51,620
 2.84%
 $42,444
 2.70%
     Net interest margin* 3.39%
 3.08%
Average interest-earning assets
  to average interest-bearing
  liabilities

114.2%

112.8%

_______________

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