Core Insights - SMBC Group has appointed Juan (JC) Kreutz as the Head of Structured Finance Solutions for the Americas and Deputy Head for the Americas business [1][3] - JC will manage various structured product businesses, including project finance debt & advisory, real estate finance, leveraged finance, fund finance, transportation, leasing, and global trade finance [2][3] Group 1: Leadership and Experience - JC Kreutz has over 10 years of experience at SMBC, contributing to the bank's strong position in U.S. project finance and expanding its presence in Latin America [3] - Before his current role, JC served as General Manager of Global Structured Finance for SMBC Americas, overseeing multiple industry groups [3][4] - JC has a background in Debt Capital Markets at BBVA Securities and has held positions in energy finance and investment banking at several major financial institutions [4] Group 2: Organizational Context - JC succeeds Carl Adams, who retired after 12 years of leadership at the bank [5] - SMBC Group is a leading global financial institution with a history of 400 years, offering a wide range of financial services across nearly 40 countries [6] - In the Americas, SMBC Group operates in several countries, including the U.S., Canada, Mexico, Brazil, Chile, Colombia, and Peru [7]

Financial Performance - Net income for the first three months of fiscal 2025 was $15.7 million, an increase of $3.2 million, or 25.6%, compared to the same period of the prior fiscal year [177]. - Fully-diluted net income per share increased by $0.28, or 25.5%, to $1.38 for the three-month period ended September 30, 2025 [177]. - Net interest income increased by $5.8 million, or 15.7%, for the first three months of fiscal 2025 [177]. - Noninterest income decreased by $601,000, or 8.4%, to $6.6 million for the three-month period ended September 30, 2025 [181]. - Noninterest expense decreased by $790,000, or 3.1%, to $25.1 million for the three-month period ended September 30, 2025 [183]. - The annualized return on average assets for the three-month period ended September 30, 2025, was 1.24%, up from 1.07% in the same period last year [202]. Asset and Liability Management - Total assets increased by $16.7 million, or 0.3%, to $5.0 billion at September 30, 2025, compared to June 30, 2025 [185]. - Loans, net of the allowance for credit losses, increased by $90.7 million, or 2.2%, to $4.1 billion at September 30, 2025 [187]. - Cash equivalents and time deposits decreased by $68.7 million, or 35.6%, to $124.4 million at September 30, 2025 [186]. - Deposits were $4.3 billion at September 30, 2025, a decrease of $878,000 compared to June 30, 2025, with a notable decline in certificates of deposit by $33.2 million [191]. - Stockholders' equity increased to $560.2 million at September 30, 2025, an increase of $15.5 million or 2.9% from June 30, 2025, primarily due to retained earnings [193]. Credit Quality and Loss Provisions - Provision for Credit Losses (PCL) increased to $4.5 million for the three-month period ended September 30, 2025, compared to $2.2 million in the same period last year, reflecting a $4.1 million provision for loan balances and a $359,000 provision for off-balance sheet credit exposures [206]. - Net charge-offs for the quarter were $3.7 million, with a net charge-off rate of 0.36%, compared to 0.01% in the same quarter last year [216]. - Loans adversely classified increased to $55.1 million, or 1.31% of total loans, as of September 30, 2025, up from $49.6 million, or 1.21%, at June 30, 2025 [219]. - Total past due loans rose from $25.6 million at June 30, 2025, to $29.3 million at September 30, 2025, compared to $13.4 million at September 30, 2024 [219]. - The Allowance for Credit Loss (ACL) at September 30, 2025, totaled $52.1 million, representing 1.24% of gross loans, compared to $51.6 million or 1.26% at June 30, 2025 [214]. Interest Rate Risk Management - The net interest margin increased by 23 basis points to 3.57% during the first three months of fiscal 2026 [179]. - The yield on interest-earning assets increased by one basis point, while the cost of interest-bearing liabilities decreased by 28 basis points, resulting in a net interest margin increase from 3.34% to 3.57% [203]. - The Company aims to manage interest rate sensitivity to maximize net interest income while minimizing excessive interest rate risk exposure [236]. - The Company has utilized longer-term fixed-rate FHLB advances to offset interest rate risk from fixed-rate lending [237]. - The company maintained a $60 million notional amount of pay-fixed/receive-floating interest rate swaps to hedge against rising interest rates [244]. Regulatory Capital and Compliance - Total capital to risk-weighted assets ratio was 13.94% for the consolidated entity as of September 30, 2025, exceeding the required minimum of 8.00% [233]. - Tier I capital to risk-weighted assets ratio was 12.51% for the consolidated entity as of September 30, 2025, above the required minimum of 6.00% [233]. - The Bank was categorized as well capitalized under the regulatory framework for prompt corrective action as of September 30, 2025 [231]. Operational Adjustments and Customer Focus - The Company continues to focus on customer retention and satisfaction while offering new products to increase less rate-sensitive deposit accounts [238]. - Modifications to borrowers experiencing financial difficulty totaled $28.7 million as of September 30, 2025, with $1.6 million considered nonperforming [223]. Control Procedures and Limitations - The Company acknowledges that its control procedures cannot guarantee the prevention of all errors and fraud, providing only reasonable assurance [249]. - Inherent limitations in control procedures may lead to undetected misstatements due to error or fraud [249]. - Control procedures can be circumvented by individual acts, collusion, or management override [249]. - The design of control procedures is based on assumptions about future events, which may not hold true [249]. - Over time, controls may become inadequate due to changing conditions or deteriorating compliance [249].

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Financial Data and Key Metrics Changes - The diluted EPS for the current quarter was $1.38, down $0.01 from the linked June 2025 quarter, but up $0.28 from the September quarter a year ago [4] - Net interest margin for the quarter was 3.57%, up from 3.47% for the fourth quarter of fiscal 2025 and from 3.34% in the year-ago quarter [5][18] - Non-interest income was down by 9.7% or $707,000 compared to the linked quarter, but was more than offset by lower non-interest expense of $925,000 or a 3.6% decrease quarter over quarter [5][22] - The allowance for credit losses at September 30, 2025, totaled $52.1 million, representing 1.24% of gross loans [23] Business Line Data and Key Metrics Changes - Gross loan balances increased by $91 million or 2.2% during the first quarter, with a year-over-year increase of $225 million or 5.7% [6] - The growth in the quarter was led by non-owner occupied commercial real estate, one-to-four family residential, commercial & industrial, and multifamily loans [6] - Deposit balances were relatively flat compared to the linked quarter but up $240 million or 5.9% over the last 12 months [7] Market Data and Key Metrics Changes - Strong growth was experienced in the east region, particularly in agricultural activity, while the south region also showed good growth [7] - The loan pipeline anticipated to fund in the next 90 days remains strong, totaling about $195 million at September 30 [7] Company Strategy and Development Direction - The company is optimistic about achieving mid-single-digit loan growth in the fiscal year despite expectations of a slowdown in loan growth due to seasonal factors [7][20] - The company is focusing on improving credit quality and has been proactive in working with borrowers to assess their positions and utilize government programs to mitigate risk [17] - There is a modest uptick in M&A discussions, with the company well-positioned to act when the right partner is ready [27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about performance in the new fiscal year, despite a larger provision for credit losses due to the evolving economic environment [3][24] - The company expects to see continued net interest income growth through the year, despite historical seasonal slowdowns in loan growth [20][21] - Management noted that charge-off activity is expected to drop from the levels of the last two quarters, with current delinquency levels trending back to historical ranges [33] Other Important Information - The company has repurchased just over 8,000 shares at an average price of just under $55, with an average purchase price at 127% of tangible book value [9] - The tangible book value increased by $5.09 or 13.3% over the last 12 months, attributed to earnings retention and improvements in the bank's unrealized loss in the investment portfolio [8][9] Q&A Session Summary Question: Outlook for provision expense and charge-offs - Management expects charge-off activity to drop from the levels of the last two quarters, with current delinquency levels running similar to historical ranges [33] Question: Bank's rate sensitivity and margin expansion - The bank remains overall liability-sensitive, with expectations of being a net beneficiary of rate cuts, estimating a 1% to 3% increase in net interest income per 100 basis points of rate cuts [36] Question: Update on loan pipeline and growth expectations - The loan pipeline remains consistent, with expectations of mid-single-digit growth for the fiscal year, though seasonal slowdowns are anticipated [44] Question: Buyback activity and M&A discussions - Management anticipates being more active in buyback activity given current pricing and is in discussions for potential M&A opportunities, ideally targeting banks in the billion-dollar asset range [50][27]

Financial Data and Key Metrics Changes - The diluted EPS for the current quarter was $1.38, down $0.01 from the linked June 2025 quarter, but up $0.28 from the September quarter a year ago [4] - Net interest margin for the quarter was 3.57%, up from 3.47% for the fourth quarter of fiscal 2025 and from 3.34% in the year-ago quarter [5][18] - Non-interest income was down by 9.7% or $707,000 compared to the linked quarter, but was more than offset by lower non-interest expense of $925,000 or a 3.6% decrease quarter over quarter [5][21] - The allowance for credit losses at September 30, 2025, totaled $52.1 million, representing 1.24% of gross loans and 200% of non-performing loans [22] Business Line Data and Key Metrics Changes - Gross loan balances increased by $91 million or 2.2% during the first quarter, which would be 8.8% annualized [6] - Loan balances increased by $225 million or 5.7% over the last 12 months, led by non-owner occupied CRE, one-to-four family residential, C&I, and multifamily loans [6][7] - Deposit balances were relatively flat compared to the linked quarter, but up $240 million or 5.9% over the last 12 months [7] Market Data and Key Metrics Changes - Strong growth was experienced in the east region, where much of the agricultural activity is concentrated, with the south region following closely [7] - The loan pipeline anticipated to fund in the next 90 days remains strong, totaling about $195 million at September 30 [7] Company Strategy and Development Direction - The company is optimistic about achieving mid-single-digit loan growth in the fiscal year despite expectations of a slowdown in loan growth in the upcoming quarters [7][20] - The company is focusing on improving credit quality and has been proactive in working with borrowers to assess their positions and utilize government programs to mitigate risk [17] - There is a modest uptick in M&A discussions, with the company well-positioned to act when the right partner is ready [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the performance in the new fiscal year, despite a larger provision for credit losses due to the evolving economic environment [3][23] - The company expects to remain liability-sensitive and a net beneficiary of rate cuts over the next four years [20] - Management noted that while charge-offs and non-performing loans have remained elevated, they are comparable to national averages for banks under $10 million [25] Other Important Information - The company repurchased just over 8,000 shares at an average price of just under $55 for a total of $447,000 [9] - Tangible book value increased by $5.09 or 13.3% over the last 12 months, attributed to earnings retention and improvement in the bank's unrealized loss in the investment portfolio [8][9] Q&A Session Summary Question: Outlook for provision expense and charge-offs - Management expects charge-off activity to drop from the levels of the last two quarters, with current delinquency levels running similar to historical ranges [32][33] Question: Bank's rate sensitivity and margin expansion - The bank remains overall liability-sensitive and expects to be a net beneficiary of rate cuts, estimating a 1%-3% increase in net interest income per 100 basis points of rate cuts [34][35] Question: Update on loan pipeline and growth expectations - The loan pipeline remains consistent, with expectations for mid-single-digit growth for the fiscal year, though seasonal slowdowns are anticipated [41][43] Question: Appetite for buybacks and M&A activity - Management anticipates being more active in buybacks given current pricing and is exploring M&A opportunities, ideally targeting banks in the billion-dollar asset range [48][49]

Financial Data and Key Metrics Changes - The diluted EPS for the current quarter was $1.38, down $0.01 from the linked June quarter, but up $0.28 from the same quarter a year ago [5] - Net interest margin for the quarter was 3.57%, up from 3.47% in the linked quarter and from 3.34% in the year-ago quarter [7] - Non-interest income decreased by 9.7% or $707,000 compared to the linked quarter, but was offset by a 3.6% decrease in non-interest expense [6][25] Business Line Data and Key Metrics Changes - Gross loan balances increased by $91 million or 2.2% during the first quarter, with a year-over-year increase of $225 million or 5.7% [8] - The growth in loans was led by non-owner occupied commercial real estate, one to four family residential, commercial and industrial, and multifamily loans [8] - Deposit balances were relatively flat compared to the linked quarter but increased by $240 million or 5.9% over the last twelve months [9] Market Data and Key Metrics Changes - The company experienced strong growth in its East Region, particularly in agricultural activity, with the South Region also showing good growth [8] - The loan pipeline anticipated to fund in the next ninety days remains strong, totaling about $195 million as of September 30 [8] Company Strategy and Development Direction - The company is optimistic about achieving mid-single-digit loan growth in the fiscal year despite expectations of a slowdown in loan growth due to seasonal factors [9] - The management is focusing on improving credit quality and has been proactive in working with borrowers to assess their positions and plan for restructuring where necessary [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the performance in the new fiscal year, citing good momentum on pre-provision net revenue [5] - The company is monitoring economic conditions closely and has increased reserves for watch list agricultural borrowers due to prolonged weakness in the agricultural segment [20] Other Important Information - Tangible book value increased to $43.35 per share, up $5.9 or 13.3% over the last twelve months, attributed to earnings retention and improvements in the bank's unrealized loss in the investment portfolio [10] - The company repurchased just over 8,000 shares at an average price of just under $55, totaling $447,000 [10] Q&A Session Summary Question: Outlook for provision expense and charge-offs - Management expects charge-off activity to drop from the levels of the last two quarters, indicating a return to more historical delinquency levels [36][37] Question: Bank's rate sensitivity and margin expansion - The bank remains overall liability sensitive but anticipates a net benefit of 1% to 3% net interest income per 100 basis points of rate cuts [39] Question: Update on loan pipeline and growth expectations - The loan pipeline remains consistent, with expectations for mid-single-digit growth for the fiscal year, though seasonal slowdowns are anticipated [47] Question: Buyback activity and M&A discussions - Management anticipates being more aggressive in share buybacks given current pricing and has ongoing discussions regarding potential M&A opportunities [53]

Financial Data and Key Metrics Changes - The diluted EPS for the current quarter was $1.38, down $0.01 from the linked June 2025 quarter, but up $0.28 from the September quarter a year ago [4] - Net interest margin for the quarter was 3.57%, up from 3.47% for the fourth quarter of fiscal 2025 and from 3.34% in the year-ago quarter [5][6] - Reported non-interest income was down by 9.7% or $707,000 compared to the linked quarter, but was more than offset by lower non-interest expense of $925,000 or a 3.6% decrease quarter over quarter [5][21] Business Line Data and Key Metrics Changes - Gross loan balances increased by $91 million or 2.2% during the first quarter, which would be 8.8% annualized, with significant growth in non-owner occupied commercial real estate, one-to-four family residential, commercial & industrial, and multifamily loans [6][7] - Deposit balances were relatively flat compared to the linked quarter, but up $240 million or 5.9% over the last 12 months [7][8] - The allowance for credit losses at September 30, 2025, totaled $52.1 million, representing 1.24% of gross loans and 200% of non-performing loans [23] Market Data and Key Metrics Changes - The company experienced strong growth in its east region, particularly in agricultural activity, while the south region also showed good growth [7] - The loan pipeline anticipated to fund in the next 90 days remains strong, totaling about $195 million at September 30 [7] Company Strategy and Development Direction - The company is optimistic about achieving mid-single-digit loan growth in the fiscal year despite expectations of a slowdown in loan growth due to seasonal factors [7][20] - The management highlighted a modest uptick in M&A discussions, indicating a potential for attractive opportunities in the market [26][27] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's performance in the new fiscal year, citing good momentum on pre-provision net revenue [3] - The company is focused on improving credit quality and has been proactive in working with borrowers to mitigate risks [13][17] Other Important Information - The company repurchased just over 8,000 shares at an average price of just under $55 for a total of $447,000, with plans for more buybacks given current pricing [9][48] - The company has seen a general increase in agricultural production line utilization due to increased input costs, impacting the agricultural loan portfolio [15][16] Q&A Session Summary Question: Outlook for provision expense and charge-offs - Management expects charge-off activity to drop from the levels of the last two quarters, with current delinquency levels trending back to historical ranges [32][33] Question: Bank's rate sensitivity and margin expansion - Management indicated that the bank remains liability-sensitive but expects to benefit from net interest income growth with potential rate cuts [34][35] Question: Update on loan pipeline and growth expectations - The company has a consistent pipeline and anticipates mid-single-digit growth for the fiscal year, with seasonal slowdowns expected [41][43] Question: Buyback activity and M&A discussions - Management anticipates being more active in buybacks due to current pricing and is exploring M&A opportunities, ideally targeting banks with assets around $1 billion [48][49]

Financial Performance - Preliminary net income for Q1 fiscal 2026 was $15.7 million, an increase of $3.2 million or 25.6% year-over-year[1] - Earnings per diluted common share were $1.38, up $0.28 or 25.5% compared to the same quarter last year[2] - Net interest income for the quarter ended September 30, 2025, was $42.4 million, an increase of $5.8 million or 15.7% year-over-year, attributed to an 8.1% rise in average interest-earning assets and a 23 basis point increase in net interest margin[18] - Noninterest income decreased to $6.6 million, down $601,000 or 8.4% year-over-year, primarily due to lower loan fees and net realized gains on loan sales[21] - Net income for Q3 2025 was $15,650,000, slightly down from $15,786,000 in Q2 2025[32] Asset and Loan Growth - Gross loan balances increased by $91.2 million or 2.2% during Q1 fiscal 2026[2] - Total assets reached $5.0 billion, reflecting an increase of $16.7 million or 0.3% from June 30, 2025[5] - Total assets increased to $5,036,332 thousand as of September 30, 2025, compared to $4,729,200 thousand a year earlier, reflecting a growth of 6.5%[31] - Loans receivable, gross rose to $4,191,743 thousand, up from $3,966,518 thousand year-over-year, representing an increase of 5.7%[31] Credit Quality - Provision for credit loss (PCL) was $4.5 million, an increase of $2.3 million from the prior year[2] - Nonperforming loans (NPLs) were $26.0 million, or 0.62% of gross loans, up from $23.0 million or 0.56% at June 30, 2025[11] - The allowance for credit losses stood at $52,081 thousand, with a coverage ratio of 200.07% for nonperforming loans as of September 30, 2025[31] - Nonperforming assets totaled $27,082 thousand, which is 0.54% of total assets, compared to 0.26% a year ago, indicating a deterioration in asset quality[31] - Total nonperforming loans increased to $26,031 thousand, up from $8,206 thousand a year earlier, indicating a significant rise in credit risk[31] Dividends and Stockholder Equity - The company declared a quarterly cash dividend of $0.25 per common share, marking the 126th consecutive quarterly dividend[3] - Stockholders' equity increased to $560.2 million at September 30, 2025, up $15.5 million or 2.9% from June 30, 2025, driven by retained earnings and a decrease in accumulated other comprehensive losses[16] - Total stockholders' equity reached $560,221 thousand, an increase from $505,629 thousand year-over-year, marking a growth of 10.8%[31] - Book value per common share increased to $49.83, up from $45.06 a year earlier, reflecting a growth of 6.1%[31] Efficiency and Cost Management - Noninterest expense for the quarter was $25.1 million, a decrease of $790,000 or 3.1% compared to the prior year, mainly due to lower compensation and benefits[22] - The efficiency ratio improved to 51.1% for the quarter, compared to 59.0% in the same period last year, driven by increased net interest income and a modest decline in noninterest expenses[23] - Efficiency ratio improved to 51.1% in Q3 2025 from 54.6% in Q2 2025, indicating better cost management[33] Interest Income and Margin - Net interest margin increased to 3.57%, up from 3.34% a year ago, with net interest income rising by $5.8 million or 15.7% year-over-year[2] - Total interest income for Q3 2025 reached $73,030,000, an increase of 3.3% from $70,638,000 in Q2 2025[32] - Net interest income for Q3 2025 was $42,418,000, up 5.2% from $40,333,000 in Q2 2025[32] - The company recorded $876,000 in net interest income from loan discount accretion and liability premium amortization related to previous acquisitions, contributing seven basis points to net interest margin[19] Deposits and Cash Management - Total deposits were $4.3 billion as of September 30, 2025, a decrease of $878,000 compared to June 30, 2025, primarily due to declines in certificates of deposit and NOW accounts[15] - Brokered deposits totaled $220.5 million at September 30, 2025, a decrease of $14.6 million from June 30, 2025, with short-term brokered money market accounts partially replacing outflows[15] - Cash equivalents and time deposits decreased by $68.7 million or 35.6% compared to June 30, 2025[6] Taxation - The income tax provision increased by 12.2% to $3.8 million, with an effective tax rate of 19.5%, down from 21.3% in the prior year[24]

Core Insights - Southern Missouri Bancorp, Inc. reported preliminary net income of $15.7 million for Q1 fiscal 2026, a 25.6% increase from the previous year, driven by higher net interest income and lower non-interest expenses [2][3][18] - The company declared a quarterly cash dividend of $0.25, marking the 126th consecutive quarterly dividend [4] - The company will host a conference call on October 23, 2025, to discuss the financial results [5] Financial Performance - Earnings per diluted share increased to $1.38, up $0.28 or 25.5% year-over-year [5][18] - Annualized return on average assets (ROA) was 1.24%, and return on average common equity (ROE) was 11.3%, compared to 1.07% and 9.9% respectively in the same quarter last year [5][18] - Net interest margin improved to 3.57%, up from 3.34% a year ago [5][18] Balance Sheet Highlights - Total assets reached $5.0 billion, reflecting a 0.3% increase from the previous quarter [7] - Gross loan balances increased by $91.2 million or 2.2% during the quarter, and by $225.2 million or 5.7% year-over-year [9] - Deposit balances decreased slightly by $878,000 during the quarter but increased by $240.3 million or 5.9% over the last twelve months [15] Loan and Credit Quality - Provision for credit losses (PCL) was $4.5 million, an increase of $2.3 million from the previous year [20][13] - Nonperforming loans (NPLs) rose to $26.0 million, or 0.62% of gross loans, compared to $23.0 million or 0.56% in the prior quarter [12][33] - The allowance for credit losses (ACL) was $52.1 million, representing 1.24% of gross loans [13][33] Non-Interest Income and Expenses - Non-interest income decreased by $601,000 or 8.4% year-over-year, primarily due to lower loan fees and net realized gains on loan sales [21] - Non-interest expenses decreased by $790,000 or 3.1% compared to the same period last year, driven by lower compensation and benefits [22] - The efficiency ratio improved to 51.1%, down from 59.0% in the same quarter last year [23] Tax and Equity - The income tax provision increased by 12.2% to $3.8 million, with an effective tax rate of 19.5% [24] - Stockholders' equity rose to $560.2 million, a 2.9% increase from the previous quarter [17]

Core Insights - The primary focus for income investors is generating consistent cash flow from liquid investments, which can come from various sources including dividends [1][2] Company Overview - Southern Missouri Bancorp (SMBC) is a bank holding company in the Finance sector, with shares experiencing a price change of -16.59% this year [3] - The company currently pays a dividend of $0.25 per share, resulting in a dividend yield of 2.09%, which is lower than the Financial - Savings and Loan industry's yield of 2.84% and the S&P 500's yield of 1.52% [3] Dividend Performance - SMBC's current annualized dividend of $1.00 represents an 8.7% increase from the previous year, with an average annual increase of 8.50% over the last five years [4] - The company's current payout ratio is 18%, indicating that it paid out 18% of its trailing 12-month earnings per share as dividends [4] Earnings Outlook - For the fiscal year, SMBC anticipates solid earnings growth, with the Zacks Consensus Estimate for 2025 at $5.61 per share, reflecting an expected increase of 8.30% from the previous year [5] Investment Considerations - SMBC is considered a compelling investment opportunity due to its strong dividend profile, despite the challenges faced by high-yielding stocks during periods of rising interest rates [6] - The stock currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [6]