GREAT SOUTHERN BANCORP, INC. Income Taxes Disclosure
Note 13: Income Taxes
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. Provisions effective in 2025 did not have a significant impact on the Company’s operations or financial statements.
The Company files a consolidated federal income tax return. As of December 31, 2025 and 2024, retained earnings included approximately $17.5 million for which no deferred income tax liability had been recognized. This amount represents an allocation of income to bad debt deductions for tax purposes only for tax years prior to 1988. If the Bank were to liquidate, the entire amount would have to be recaptured and would create income for tax purposes only, which would be subject to the then-current corporate income tax rate. The unrecorded deferred income tax liability on the above amount was approximately $4.3 million at both December 31, 2025 and 2024.
All income is from continuing operations and is from a single country, the United States of America. During the years ended December 31, 2025, 2024 and 2023, the provision for income taxes included these components:
| 2025 | | 2024 | | 2023 | ||||
(In Thousands) | |||||||||
Current federal income tax expense | $ | 16,016 | $ | 11,392 | $ | 12,825 | |||
Current state income tax expense |
| 1,623 |
| 1,841 |
| 1,734 | |||
Deferred income tax expense |
| (1,315) |
| 457 |
| 2,985 | |||
Income tax expense | $ | 16,324 | $ | 13,690 | $ | 17,544 | |||
The tax effects of temporary differences related to deferred taxes shown on the statements of financial condition were:
December 31, | ||||||
| 2025 | | 2024 | |||
(In Thousands) | ||||||
Deferred tax assets |
| |
| | ||
Allowance for credit losses | $ | 15,935 | $ | 15,933 | ||
Liability for unfunded commitments | 2,103 | 2,092 | ||||
Interest on nonperforming loans |
| 39 |
| 93 | ||
Accrued expenses and other |
| 1,479 |
| 2,123 | ||
Capital loss carryforward |
| 240 |
| 158 | ||
Tax credit carryforward | 3,047 | — | ||||
Unrealized loss on available-for-sale securities | 9,005 | 15,055 | ||||
Unrealized loss on securities transferred to held-to-maturity securities | 127 | 64 | ||||
Unrealized loss on active cash flow derivatives | 1,375 | 4,186 | ||||
Income recognized for tax in excess of book related to terminated cash flow derivatives |
| — |
| 1,528 | ||
Deferred income |
| 75 |
| 100 | ||
| 33,425 |
| 41,332 | |||
Deferred tax liabilities |
| |
| | ||
Tax depreciation in excess of book depreciation |
| (7,256) |
| (6,654) | ||
Partnership tax credits |
| (333) |
| (1,899) | ||
Prepaid expenses |
| (1,035) |
| (781) | ||
Difference in basis for acquired assets and liabilities | (346) | (31) | ||||
Unrealized gain on terminated cash flow derivatives |
| — |
| (1,528) | ||
Other |
| (353) |
| (263) | ||
| (9,323) |
| (11,156) | |||
Net deferred tax asset | $ | 24,102 | $ | 30,176 | ||
Reconciliations of the Company’s effective tax rates to the statutory corporate tax rates were as follows:
| 2025 | | 2024 | | 2023 |
| ||||||||||
(Dollars In Thousands) | ||||||||||||||||
Tax at statutory rate |
| $ | 18,332 | 21.0 | % | $ | 15,854 | 21.0 | % | $ | 17,922 | 21.0 | % | |||
Nontaxable interest and dividends |
| (205) | (0.2) |
| (378) | (0.5) |
| (433) | (0.5) | |||||||
U.S. federal tax credits, net (predominantly low-income housing) |
| (3,853) | (4.4) |
| (3,319) | (4.4) |
| (2,290) | (2.7) | |||||||
State income/franchise taxes, net of federal benefit |
| 1,354 | 1.6 |
| 1,279 | 1.7 |
| 1,467 | 1.7 | |||||||
| 696 | 0.7 |
| 254 | 0.3 |
| 878 | 1.1 | ||||||||
| $ | 16,324 | 18.7 | % | $ | 13,690 | 18.1 | % | $ | 17,544 | 20.6 | % | ||||
The Company and its consolidated subsidiaries have not been audited recently by the Internal Revenue Service (IRS). As a result, federal tax years through December 31, 2021 are now closed. In addition, there were no pending audits by any state jurisdiction at December 31, 2025.
During the years ended December 31, 2025, 2024 and 2023, the Company paid U.S. federal income taxes totaling $3.0 million, $1.8 million and $6.3 million, respectively, and paid taxes to various state jurisdictions totaling $1.3 million, $1.9 million and $1.6 million, respectively. In addition, in 2025, the Company received a refund of $19,000 from one state jurisdiction and federal income tax refunds totaling $65,000. In 2024, the Company received federal income tax refunds totaling $218,000. In 2023, the Company received federal income tax refunds totaling $485,000.
Tax payments made to individual state jurisdictions representing five percent or more of total income taxes paid (net of refunds) in the years ended December 31, 2025, 2024 and 2023, respectively, included: for 2025, Illinois $345,000 and Colorado $390,000; for 2024, Minnesota $622,000, Colorado $313,000, Kansas $287,000 and Illinois $192,000; for 2023, Minnesota $703,000.
During the years ended December 31, 2025 and 2024, the state and local jurisdictions that contribute to the majority (totaling greater than 50%) of the effect of the state and local income tax expense included Minnesota, Colorado, and Illinois. During the year ended December 31, 2023, the state and local jurisdictions that contribute to the majority (totaling greater than 50%) of the effect of the state and local income tax expense included and Illinois.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 6, 2026 | Showing above |
| 2024 | Mar 7, 2025 | |
| 2023 | Mar 12, 2024 | |
| 2022 | Mar 13, 2023 | |
| 2021 | Mar 7, 2022 | |
| 2020 | Mar 5, 2021 | |
| 2019 | Mar 6, 2020 | |
| 2018 | Mar 7, 2019 | |
| 2017 | Mar 6, 2018 | |
| 2016 | Mar 3, 2017 | |
| 2015 | Mar 3, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.