Core Insights - Jefferies and SMBC Group have signed a memorandum to enhance their strategic capital and business alliance, focusing on a joint venture in Japan to consolidate their wholesale Japanese equities business [1][9] Group 1: Joint Venture Details - The joint venture, named SMBC Nikko Jefferies Securities, will encompass equity capital markets (ECM), equity sales and trading, and equity research globally, with SMBC Nikko holding the economic and voting majority [2] - SMBC Group plans to increase its economic ownership stake in Jefferies to up to 20% on a fully-diluted basis while keeping voting interests under 5% [3] Group 2: Growth Drivers for Jefferies - The integration of SMBC Nikko's domestic operations with Jefferies' overseas activities will enhance issuer coverage, order flow from global investors, and research capabilities, allowing Jefferies to underwrite Japanese ECM deals starting January 2027 [4] - The $2.5 billion credit facility will enable Jefferies to strengthen its exposure in pre-IPO financing, leveraged lending in EMEA, and structured finance, which are areas with high margin potential [5] Group 3: Financial Expectations - SMBC Group anticipates that by the fifth year of the alliance, profit contributions from the joint venture will reach approximately JPY 50 billion, with JPY 10 billion from the Japanese equities business alone, indicating significant incremental revenues for Jefferies [7] Group 4: Strategic Implications - The partnership offers Jefferies the potential for accelerated growth in Asia through expanded market share, new revenue streams, and more stable capital backing, which could lead to outperforming peers in Japanese ECM and related markets [11]

Core Viewpoint - Jefferies Financial Group and Sumitomo Mitsui Financial Group are significantly expanding their Global Strategic Alliance, which was initially established in 2021 to enhance collaboration in corporate and investment banking [1]. Group 1: Companies Involved - Jefferies Financial Group, Inc. (NYSE: JEF) is a key player in this expanded alliance [1]. - Sumitomo Mitsui Financial Group, Inc. (NYSE: SMFG) is also a major participant in the alliance, along with its subsidiaries, Sumitomo Mitsui Banking Corporation and SMBC Nikko Securities Inc. [1]. Group 2: Strategic Alliance Details - The initial Strategic Alliance was formed in 2021, focusing on collaboration in corporate and investment banking [1]. - The expansion of this alliance indicates a commitment to enhancing services and capabilities in the financial sector [1].

Market Position and Operations - The Bank's market share in Missouri is approximately 1.36%, competing for around $252.2 billion in deposits[32] - The Bank operates 62 full-service branch offices and two loan production offices as of June 30, 2025[27] - The Bank's east region has a total population of approximately 245,000, while the south region has around 433,000[30] - The Bank's northwest region includes 15 facilities with a total population of approximately 1.9 million[30] Loan Portfolio and Lending Activities - As of June 30, 2025, the total loan portfolio amounted to $4,100,768 thousand, representing an increase from $3,850,035 thousand in 2024[41] - Mortgage loans accounted for 82.09% of the total loan portfolio in 2025, up from 83.23% in 2024[41] - The amount of one- to four-family residential mortgage loans reached $992,445 thousand, a 7.25% increase from $925,397 thousand in 2024[41] - Commercial real estate loans decreased to $888,317 thousand, representing 21.94% of the total loan portfolio in 2025, down from 23.70% in 2024[41] - The total amount of other loans, including commercial and industrial loans, was $776,876 thousand, which is 19.19% of the total loan portfolio in 2025[41] - The Bank's lending activities include residential, commercial, and agricultural loans, with oversight by senior lending officers[36][37] - The Senior Loan Committee can approve lending relationships up to $10.0 million[38] Credit Quality and Allowance for Losses - The allowance for credit losses was $51,629 thousand, which is 1.28% of net loans receivable in 2025, compared to 1.38% in 2024[41] - Nonperforming loans totaled $23.04 million as of June 30, 2025, representing 0.57% of net loans, an increase from 0.18% in 2024[96] - The bank's total nonperforming assets reached $23.7 million as of June 30, 2025, compared to $10.6 million in 2024[96] - The total charge-offs for the year ended June 30, 2025, were $6.983 million, significantly higher than $2.055 million in the previous year[108] - The allowance for credit losses (ACL) at June 30, 2025, was $51.6 million, which is 218% of nonperforming assets, down from $52.5 million or 497% at June 30, 2024[103] Deposits and Funding - The Bank's deposits totaled $4.28 billion as of June 30, 2025, with 11.87% in non-interest bearing accounts and 26.45% in NOW accounts[131] - As of June 30, 2025, total deposits reached $4.28 billion, an increase of $338.3 million from the previous year[140] - The bank's net increase in deposits before interest credited was $222.5 million for the year ending June 30, 2025, compared to $115.8 million in 2024[140] - Certificates in excess of $100,000 totaled $1.2 billion as of June 30, 2025, up from $887.9 million in 2024[138] - The bank's savings accounts increased by $144.0 million to $661.1 million, representing a 15.44% share of total deposits[137] Capital Adequacy and Regulatory Compliance - The Bank's CET1 capital ratio must be at least 4.5% of risk-weighted assets to be considered adequately capitalized[179] - The minimum Tier 1 capital ratio required is 6.0% of risk-weighted assets[179] - The total capital ratio must be at least 8.0% of risk-weighted assets[179] - As of June 30, 2025, the Bank was categorized as "well capitalized" under prompt corrective action standards, exceeding the minimum capital ratios[182] - The Bank's capital adequacy is subject to regulatory capital reforms required by the Dodd-Frank Act and Basel III requirements[178] Investment Portfolio - The company's investment portfolio included $460.8 million in available-for-sale (AFS) securities as of June 30, 2025[113] - The debt and other securities portfolio totaled $101.4 million, or 2.0% of total assets, down from $123.0 million, or 2.7% of total assets at June 30, 2024[115] - The total debt and other securities portfolio was valued at $101.35 million as of June 30, 2025, with a weighted average yield of 5.00%[120] Employee and Operational Metrics - The Bank had a total of 739 employees as of June 30, 2025, comprising 696 full-time and 43 part-time employees[155] - The Bank's compliance with FHLB stock requirements was maintained with $9.4 million in stock as of June 30, 2025[168] Miscellaneous - The Bank is subject to a Missouri bank franchise tax imposed on taxable income at a rate of 4.48%[205] - The Company is subject to comprehensive regulation by the FRB under the Bank Holding Company Act[198] - The Company continues to focus on customer retention and satisfaction while offering new products to increase less rate-sensitive deposit accounts[431]

Financial Data and Key Metrics Changes - Earnings for Q4 2025 were $1.39 diluted, unchanged from Q3 but up $0.20 or about 17% year over year [6] - For the full fiscal year 2025, earnings increased to $5.18 from $4.42 in fiscal 2024, driven by stronger interest income and a 7% growth in earning assets [7] - Tangible book value per share increased by $5.19 or just above 14% over the last twelve months to $41.87 [7] - Net interest margin for the quarter was 3.46%, up from 3.39% in the previous quarter [7][23] Business Line Data and Key Metrics Changes - Gross loan balances increased by $76 million or 7.6% annualized during the quarter, and by $250 million or 6.5% compared to the previous year [8] - Noninterest income increased by 9.2% compared to the linked quarter, driven by an additional card network bonus [25] - Noninterest expense was up 2.3% compared to the linked quarter, primarily due to consulting expenses related to a new contract [27] Market Data and Key Metrics Changes - Deposit balances increased by $20 million or about 2% annualized compared to the linked quarter [8] - The agricultural sector is facing rising input costs and expenses, with many farmers drawing more heavily on credit lines [20][18] Company Strategy and Development Direction - The company plans to change its reported quarterly net interest margin calculation to reduce volatility [7] - There is optimism about achieving mid-single-digit loan growth for the upcoming year despite potential prepayment activity [22] - The company is exploring M&A opportunities, with a solid capital base and proven financial performance [31] Management's Comments on Operating Environment and Future Outlook - Management noted that credit quality has deteriorated somewhat but remains relatively strong [9] - There is a cautious outlook regarding the agricultural sector, with many farmers facing difficult margins and potential operational wind-downs [18][20] - The company is focused on driving continued growth and sustaining long-term value creation for shareholders [29] Other Important Information - The company recorded a provision for credit losses of $2.5 million, up from $932,000 in the previous quarter [29] - The allowance for credit losses totaled $51.6 million, representing 1.26% of gross loans [28] Q&A Session Summary Question: Loan growth momentum - Loan growth was steady throughout the quarter, with larger credits indicating plans to pay off in the near term, potentially increasing prepayment activity [35] Question: Margin expectations - The company is neutral to rate movements currently but expects natural net interest margin expansion from loan origination activity [37] Question: Funding growth expectations - The company does not expect growth to be heavily weighted towards CDs this year, given a strong funding position [45] Question: M&A environment - There has been an increase in M&A discussions, with optimism about potential opportunities [48]

[Executive Summary & Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Financial%20Highlights) This section highlights the company's strong financial performance, with increased net income and improved profitability for Q4 and FY2025 [Preliminary Results (Q4 & FY2025)](index=1&type=section&id=Preliminary%20Results%20%28Q4%20%26%20FY2025%29) Southern Missouri Bancorp reported a significant increase in net income for both Q4 and the full fiscal year 2025, driven primarily by higher net interest income and lower income tax provision, despite increases in provision for credit loss and noninterest expense Net Income and Diluted EPS (Q4 & FY2025) | Metric | Q4 FY2025 | Q4 FY2024 | Change ($) | Change (%) | | :-------------------------------- | :-------- | :-------- | :--------- | :--------- | | Net Income | $15.8 million | $13.5 million | $2.3 million | 16.7% | | Diluted EPS | $1.39 | $1.19 | $0.20 | - | | Metric | FY2025 | FY2024 | Change ($) | Change (%) | | :-------------------------------- | :------- | :------- | :--------- | :--------- | | Net Income | $58.6 million | $50.2 million | $8.4 million | 16.7% | | Diluted EPS | $5.18 | $4.42 | $0.76 | - | - The increase in **net income** was primarily due to higher **net interest income** and lower **provision for income taxes**, partially offset by higher **provision for credit loss (PCL)**, **noninterest expense**, and lower **noninterest income**[1](index=1&type=chunk) [Key Performance Indicators (Q4 FY2025)](index=1&type=section&id=Key%20Performance%20Indicators%20%28Q4%20FY2025%29) The company demonstrated strong performance in Q4 FY2025 with improved profitability ratios and net interest margin, alongside significant loan growth. Noninterest income saw a decrease year-over-year due to accounting changes for tax credits but increased linked-quarter due to card network fees Key Performance Indicators (Q4 FY2025) | Metric | Q4 FY2025 | Q4 FY2024 | QoQ (Q3 FY2025) | YoY Change | QoQ Change | | :-------------------------------- | :-------- | :-------- | :-------------- | :--------- | :--------- | | Diluted EPS | $1.39 | $1.19 | $1.39 | Up $0.20 (16.8%) | Unchanged | | Annualized ROA | 1.27% | 1.17% | 1.27% | Up 0.10% | Unchanged | | Annualized ROE | 11.8% | 11.2% | 12.1% | Up 0.6% | Down 0.3% | | Net Interest Margin | 3.46% | 3.25% | 3.39% | Up 0.21% | Up 0.07% | | Net Interest Income | $40.3 million | $35.1 million | $39.5 million | Up $5.2 million (14.9%) | Up $854,000 (2.2%) | | Noninterest Income | $7.3 million | $7.8 million | $6.7 million | Down 6.3% | Up 9.2% | | Gross Loan Balances Increase (Q4) | $76.2 million | - | - | - | - | | Gross Loan Balances Increase (FY2025) | $249.9 million | - | - | 6.5% | - | - The decrease in **noninterest income** compared to the prior year was primarily due to a change in accounting for **tax credit benefits** (ASU 2023-02), which are now recognized as a direct reduction from the **provision for income taxes**, and a negative adjustment to **mortgage servicing rights**[2](index=2&type=chunk)[22](index=22&type=chunk) - The increase in **non-interest income** compared to the linked quarter was largely due to additional **card network fees** based on volume incentives totaling **$537,000**[2](index=2&type=chunk) [Dividend Declaration](index=3&type=section&id=Dividend%20Declaration) The Board of Directors declared a quarterly cash dividend of $0.25 per common share, marking the 125th consecutive quarterly dividend and an 8.7% increase from the previous payment Quarterly Dividend Details | Metric | Value | | :-------------------- | :---- | | Quarterly Dividend | $0.25 per share | | Increase from Previous | $0.02 per share (8.7%) | | Payable Date | August 29, 2025 | | Record Date | August 15, 2025 | - This is the **125th consecutive quarterly dividend** since the Company's inception, reflecting confidence in future prospects and commitment to stockholder value[3](index=3&type=chunk) [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) Southern Missouri Bancorp will host a conference call on July 24, 2025, to discuss the preliminary results, with details provided for live access and telephone playback - A conference call is scheduled for **Thursday, July 24, 2025, at 9:30 a.m. Central Time** to review the press release information[4](index=4&type=chunk) - Dial-in details: **1-833-470-1428 (US)** with participant access code **617584**. Playback available until **July 29, 2025**, by dialing **1-866-813-9403** with passcode **612450**[4](index=4&type=chunk) [Balance Sheet Analysis](index=3&type=section&id=Balance%20Sheet%20Analysis) This section analyzes the balance sheet, detailing asset, loan, and deposit growth, credit quality, and stockholders' equity changes [Asset Growth](index=3&type=section&id=Asset%20Growth) The Company experienced significant balance sheet growth in fiscal 2025, with total assets increasing by 9.0% to $5.0 billion, primarily driven by increases in net loans receivable, cash equivalents, and available-for-sale (AFS) securities Asset Growth (June 30, 2025 vs. June 30, 2024) | Asset Category | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :--------- | :--------- | | Total Assets | $5.0 billion | $4.6 billion | $415.3 million | 9.0% | | Cash Equivalents & Time Deposits | $193.1 million | $61.4 million | $131.7 million | 214.5% | | AFS Securities | $460.8 million | $427.9 million | $32.9 million | 7.7% | - **Cash equivalents** decreased by **$34.0 million (15.0%)** linked-quarter (compared to March 31, 2025), primarily used to fund loan growth, partially offset by deposit growth and earnings retention[6](index=6&type=chunk) [Loan Portfolio](index=3&type=section&id=Loan%20Portfolio) Net loans receivable grew by 6.6% to $4.0 billion in FY2025, with growth across various loan types, particularly residential real estate and commercial and industrial loans. The bank maintains a significant concentration in non-owner occupied commercial real estate Loans, Net of ACL (June 30, 2025 vs. June 30, 2024) | Metric | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :--------- | :--------- | | Loans, net of ACL | $4.0 billion | $3.8 billion | $250.8 million | 6.6% | | Gross Loans Increase (FY2025) | $249.9 million | - | - | - | | ACL attributable to loans | $51.6 million | $52.5 million | -$887,000 | -1.7% | - **Loan growth** was primarily in residential real estate, commercial and industrial loans, drawn construction loan balances, multi-family real estate loans, and agricultural production draws, partially offset by payoffs in non-owner occupied commercial real estate and consumer loans[7](index=7&type=chunk)[9](index=9&type=chunk) Summary Loan Data (in thousands) | Loan Type | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | | 1-4 residential real estate | $991,553 | $925,397 | | Non-owner occupied commercial real estate | $888,317 | $899,770 | | Owner occupied commercial real estate | $442,984 | $427,476 | | Multi-family real estate | $422,758 | $384,564 | | Construction and land development | $332,405 | $290,541 | | Agriculture real estate | $244,983 | $232,520 | | Commercial and industrial | $510,259 | $450,147 | | Agriculture production | $206,128 | $175,968 | | Consumer | $55,387 | $59,671 | | Total Gross Loans | $4,099,698 | $3,849,803 | - Loans anticipated to fund in the next 90 days totaled **$224.1 million** at June 30, 2025, up from **$157.1 million** at June 30, 2024[9](index=9&type=chunk) [Loan Composition](index=4&type=section&id=Loan%20Composition) - Concentration in **non-owner occupied commercial real estate loans** was **301.9% of Tier 1 capital and ACL** at June 30, 2025, down from **317.5%** a year prior, representing **40.1% of total loans**[10](index=10&type=chunk) - Common collateral types within non-owner occupied commercial real estate include multi-family residential, hospitality, care facilities, strip centers, retail stand-alone, and storage units[10](index=10&type=chunk) - Non-owner occupied office property types comprised **33 loans** totaling **$24.3 million (0.59% of total loans)** at June 30, 2025, with none adversely classified[10](index=10&type=chunk) [Nonperforming Assets & Credit Quality](index=4&type=section&id=Nonperforming%20Assets%20%26%20Credit%20Quality) Nonperforming Assets (June 30, 2025 vs. June 30, 2024) | Metric | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :-------------------------------- | :------------ | :------------ | :--------- | :--------- | | Nonperforming Loans (NPLs) | $23.0 million | $6.7 million | $16.3 million | 243.3% | | NPLs as % of Gross Loans | 0.56% | 0.17% | - | - | | Nonperforming Assets (NPAs) | $23.7 million | $10.6 million | $13.1 million | 123.6% | | NPAs as % of Total Assets | 0.47% | 0.23% | - | - | - The year-over-year increase in **NPLs** was primarily due to several commercial relationships added in Q3 and Q4 FY2025, including a **$5.7 million construction loan** for a senior living facility and three commercial loans totaling **$6.2 million** (after charge-offs) secured by vacant special-purpose commercial properties[11](index=11&type=chunk)[12](index=12&type=chunk) - Compared to March 31, 2025, **NPAs** declined by **$104,000**[11](index=11&type=chunk) [Allowance for Credit Losses](index=6&type=section&id=Allowance%20for%20Credit%20Losses) Allowance for Credit Losses (June 30, 2025 vs. June 30, 2024) | Metric | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :-------------------------------- | :------------ | :------------ | :--------- | :--------- | | ACL | $51.6 million | $52.5 million | -$0.9 million | -1.7% | | ACL as % of Gross Loans | 1.26% | 1.36% | - | - | | ACL as % of Nonperforming Loans | 224% | 786% | - | - | | Annualized Net Charge-offs (Q4) | 0.53% | 0.06% | - | - | | Net Charge-offs (Q4) | $5.3 million | - | - | - | | Annualized Net Charge-offs (FY2025) | 0.17% | 0.05% | - | - | - The decrease in **ACL** was primarily due to net charge-offs (including a **$3.8 million special-purpose CRE charge-off** and a **$742,000 commercial and industrial charge-off**) and a decline in certain qualitative adjustments, partially offset by higher required reserves for pooled loans reflecting a deteriorating economic outlook and increased modeled loss drivers[13](index=13&type=chunk) - Management believes the **ACL** was adequate as of June 30, 2025, despite significant uncertainty as borrowers adjust to relatively high market interest rates[13](index=13&type=chunk) [Liabilities](index=6&type=section&id=Liabilities) Total liabilities increased by 8.7% in fiscal 2025, primarily driven by growth in total deposits, which saw increases in certificates of deposit and savings accounts due to the higher rate environment Total Liabilities (June 30, 2025 vs. June 30, 2024) | Metric | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :--------- | :--------- | | Total Liabilities | $4.5 billion | $4.1 billion | $359.3 million | 8.7% | | Total Deposits | $4.3 billion | $3.9 billion | $338.3 million | 8.6% | | FHLB Advances | $104.1 million | $102.1 million | $2.0 million | 2.0% | - Growth in liabilities also reflected increases in other liabilities, accrued interest and income taxes payable, and securities sold under agreement to repurchase[14](index=14&type=chunk) [Deposit Growth & Composition](index=6&type=section&id=Deposit%20Growth%20%26%20Composition) - Deposit portfolio increases were seen in **certificates of deposit** and **savings accounts**, as customers moved balances into special rate time deposits and high yield savings accounts[15](index=15&type=chunk) Summary Deposit Data (in thousands) | Deposit Type | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | | Non-interest bearing deposits | $508,110 | $514,107 | | NOW accounts | $1,132,298 | $1,239,663 | | MMDAs - non-brokered | $329,837 | $334,774 | | Brokered MMDAs | $1,414 | $2,025 | | Savings accounts | $661,115 | $517,084 | | Certificates of deposit - non-brokered | $1,414,945 | $1,163,650 | | Brokered certificates of deposit | $233,649 | $171,756 | | Total Deposits | $4,281,368 | $3,943,059 | | Public unit deposits | $550,836 | $594,589 | | Brokered deposits (total) | $233.6 million | $171.8 million | | Average Loan-to-Deposit Ratio (Q4) | 94.5% | 96.3% | | Period End Loan-to-Deposit Ratio | 97.6% | 95.8% | - **Public unit balances** decreased by **$43.8 million** due to losing a bid to retain a larger local public unit depositor[15](index=15&type=chunk) [Stockholders' Equity](index=7&type=section&id=Stockholders%27%20Equity) Stockholders' equity increased by 11.4% to $544.7 million, primarily due to retained earnings and a reduction in accumulated other comprehensive losses (AOCL) as investment market values appreciated Stockholders' Equity (June 30, 2025 vs. June 30, 2024) | Metric | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :--------- | :--------- | | Stockholders' Equity | $544.7 million | $488.7 million | $55.9 million | 11.4% | | AOCL | $11.4 million | $17.5 million | -$6.1 million | -34.9% | | Tangible Book Value per Share | $41.87 | $36.68 | $5.19 | 14.1% | - The reduction in **AOCL** was due to the appreciation of the Company's investments as market interest rates decreased[17](index=17&type=chunk) - The Company does not hold any securities classified as held-to-maturity[17](index=17&type=chunk) [Income Statement Analysis (Quarterly)](index=7&type=section&id=Income%20Statement%20Analysis%20%28Quarterly%29) This section analyzes quarterly income statement performance, covering net interest income, credit loss provision, noninterest items, and income taxes [Net Interest Income & Margin](index=7&type=section&id=Net%20Interest%20Income%20%26%20Margin) Net interest income increased by 14.9% year-over-year, driven by a 21 basis point expansion in net interest margin, primarily due to a decrease in the cost of interest-bearing liabilities Net Interest Income and Margin (Q4 FY2025 vs. Q4 FY2024) | Metric | Q4 FY2025 | Q4 FY2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :--------- | :--------- | | Net Interest Income | $40.3 million | $35.1 million | $5.2 million | 14.9% | | Net Interest Margin | 3.46% | 3.25% | Up 21 bps | - | | Cost of Interest-Bearing Liabilities | - | - | Down 20 bps | - | | Yield on Interest-Earning Assets | - | - | Up 7 bps | - | | Average Interest-Earning Assets Growth | 7.9% | - | - | - | - Acquisition-related loan discount accretion and deposit premium amortization contributed **5 basis points** to net interest margin in Q4 FY2025, down from **10 basis points** in the prior year and **13 basis points** in the linked quarter[19](index=19&type=chunk) [Provision for Credit Losses](index=7&type=section&id=Provision%20for%20Credit%20Losses) The provision for credit losses significantly increased year-over-year, primarily to cover higher net charge-offs and support loan growth, as well as increased unfunded balances and expected funding rates Provision for Credit Losses (Q4 FY2025 vs. Q4 FY2024) | Metric | Q4 FY2025 | Q4 FY2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :--------- | :--------- | | Provision for Credit Losses | $2.5 million | $0.9 million | $1.6 million | 177.8% | | Provision for ACL (loans) | $2.0 million | - | - | - | | Provision for Off-Balance Sheet Exposures | $0.475 million | - | - | - | - The increase was primarily attributable to providing for **net charge-offs** and to support **loan growth**, in addition to an increase in unfunded balances and an increase in the expected funding rate on available credit[20](index=20&type=chunk)[21](index=21&type=chunk) [Noninterest Income](index=9&type=section&id=Noninterest%20Income) Noninterest income decreased year-over-year due to accounting changes for tax credits and negative adjustments to mortgage servicing rights, partially offset by increases in other loan fees and deposit account charges Noninterest Income (Q4 FY2025 vs. Q4 FY2024) | Metric | Q4 FY2025 | Q4 FY2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :--------- | :--------- | | Total Noninterest Income | $7.3 million | $7.8 million | -$0.487 million | -6.3% | | Tax Credit Benefit (Q4 FY2024) | - | $0.675 million | - | - | | Mortgage Servicing Rights Adjustment (Q4 FY2025) | -$0.108 million | - | - | - | | Mortgage Servicing Rights Benefit (Q4 FY2024) | - | $0.131 million | - | - | - The decrease was primarily due to the adoption of **ASU 2023-02**, which now recognizes **tax credit benefits** as a direct reduction to income tax provision instead of noninterest income, and a negative fair value adjustment to **mortgage servicing rights**[22](index=22&type=chunk) - These decreases were partially offset by higher other loan fees from increased originations and increased deposit account charges due to higher non-sufficient fund activity and maintenance fees[22](index=22&type=chunk) [Noninterest Expense & Efficiency](index=9&type=section&id=Noninterest%20Expense%20%26%20Efficiency) Noninterest expense increased year-over-year due to higher legal and professional fees, data processing expense, and other noninterest expenses, but the efficiency ratio improved due to faster net interest income growth Noninterest Expense and Efficiency Ratio (Q4 FY2025 vs. Q4 FY2024) | Metric | Q4 FY2025 | Q4 FY2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :--------- | :--------- | | Total Noninterest Expense | $26.0 million | $25.0 million | $0.974 million | 3.9% | | Efficiency Ratio | 54.6% | 58.3% | Down 3.7% | - | - Key drivers of expense increase included elevated **legal and professional fees ($425,000)** for vendor contract negotiation, **data processing expense** (third-party software), and other noninterest expense (card fraud losses, deposit product expenses)[23](index=23&type=chunk) - These increases were partially offset by decreases in intangible amortization expense (due to full amortization of an older merger's core deposit intangible) and reduced telecommunication expenses[23](index=23&type=chunk) [Income Taxes](index=9&type=section&id=Income%20Taxes) The income tax provision remained flat year-over-year, but the effective tax rate decreased significantly due to a tax benefit from recognizing tax credits under the proportional amortization method (ASC 2023-02) Income Tax Provision and Effective Tax Rate (Q4 FY2025 vs. Q4 FY2024) | Metric | Q4 FY2025 | Q4 FY2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :------------ | :--------- | :--------- | | Income Tax Provision | $3.4 million | $3.4 million | $0 | 0% | | Effective Tax Rate | 17.5% | 20.2% | Down 2.7% | - | | Income Tax Benefit from Tax Credits | $0.701 million | - | - | - | - The decrease in the **effective tax rate** was primarily attributable to a **$701,000 income tax benefit** from the recognition of tax credits utilizing the proportional amortization method under **ASC 2023-02**[25](index=25&type=chunk) - In the prior fiscal year, similar benefits were recognized through noninterest income[25](index=25&type=chunk) [Forward-Looking Statements](index=10&type=section&id=Forward-Looking%20Statements) This section outlines various known and unknown risks and uncertainties that could cause actual results to differ materially from forward-looking statements, including economic conditions, merger integration, interest rate fluctuations, regulatory changes, and technological impacts - Forward-looking statements are subject to risks and uncertainties, including potential adverse impacts to economic conditions, challenges in realizing merger benefits, fluctuations in interest rates, and governmental policies[27](index=27&type=chunk) - Other risks include changes in loan delinquencies, ability to access funding, acceptance of new products, real estate value fluctuations, legislative/regulatory changes, accounting principle changes, and results of regulatory examinations[27](index=27&type=chunk) - The Company undertakes no obligation to publicly update or revise any forward-looking statements[27](index=27&type=chunk) [Unaudited Condensed Consolidated Financial Information](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Information) This section provides unaudited condensed consolidated financial data, including balance sheets, nonperforming assets, income statements, and key ratios [Summary Balance Sheet Data](index=11&type=section&id=Summary%20Balance%20Sheet%20Data) This section provides a detailed breakdown of the Company's balance sheet at various quarter-ends, highlighting asset and liability composition, equity, and key per-share metrics Summary Balance Sheet Data (dollars in thousands, except per share data) | Item | June 30, 2025 | Mar. 31, 2025 | Dec. 31, 2024 | Sep. 30, 2024 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | :------------ | :------------ | :------------ | | Cash equivalents and time deposits | $193,105 | $227,136 | $146,078 | $75,591 | $61,395 | | AFS securities | $460,844 | $462,930 | $468,060 | $420,209 | $427,903 | | Loans receivable, gross | $4,099,698 | $4,023,509 | $4,026,979 | $3,966,518 | $3,849,803 | | Allowance for credit losses | $51,629 | $54,940 | $54,740 | $54,437 | $52,516 | | Loans receivable, net | $4,048,069 | $3,968,569 | $3,972,239 | $3,912,081 | $3,797,287 | | Total assets | $5,019,607 | $4,976,496 | $4,907,674 | $4,729,200 | $4,604,316 | | Interest-bearing deposits | $3,773,258 | $3,747,964 | $3,696,428 | $3,536,933 | $3,428,952 | | Noninterest-bearing deposits | $508,110 | $513,418 | $514,199 | $503,209 | $514,107 | | Total liabilities | $4,474,915 | $4,447,706 | $4,395,303 | $4,223,571 | $4,115,568 | | Total stockholders' equity | $544,692 | $528,790 | $512,371 | $505,629 | $488,748 | | Equity to assets ratio | 10.85% | 10.63% | 10.44% | 10.69% | 10.61% | | Book value per common share | $48.42 | $47.01 | $45.62 | $45.06 | $43.56 | | Tangible book value per common share | $41.87 | $40.37 | $38.91 | $38.26 | $36.68 | [Nonperforming Asset Data](index=11&type=section&id=Nonperforming%20Asset%20Data) This table provides a detailed view of nonperforming assets, including nonaccrual loans, other real estate owned, and their ratios to total assets and gross loans, showing a significant increase in nonperforming loans year-over-year Nonperforming Asset Data (dollars in thousands) | Item | June 30, 2025 | Mar. 31, 2025 | Dec. 31, 2024 | Sep. 30, 2024 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | :------------ | :------------ | :------------ | | Nonaccrual loans | $23,040 | $21,970 | $8,309 | $8,206 | $6,680 | | Total nonperforming loans | $23,040 | $21,970 | $8,309 | $8,206 | $6,680 | | Other real estate owned (OREO) | $625 | $1,775 | $2,423 | $3,842 | $3,865 | | Total nonperforming assets | $23,697 | $23,801 | $10,769 | $12,069 | $10,568 | | Total nonperforming assets to total assets | 0.47% | 0.48% | 0.22% | 0.26% | 0.23% | | Total nonperforming loans to gross loans | 0.56% | 0.55% | 0.21% | 0.21% | 0.17% | | Allowance for credit losses to nonperforming loans | 224.08% | 250.07% | 658.80% | 663.38% | 786.17% | | Allowance for credit losses to gross loans | 1.26% | 1.37% | 1.36% | 1.37% | 1.36% | | Performing modifications to borrowers experiencing financial difficulty | $26,642 | $23,304 | $24,083 | $24,340 | $24,602 | [Quarterly Summary Income Statement Data](index=12&type=section&id=Quarterly%20Summary%20Income%20Statement%20Data) This table presents a detailed quarterly breakdown of the Company's income statement, including interest income and expense, net interest income, provision for credit losses, noninterest income, noninterest expense, and net income Quarterly Summary Income Statement Data (dollars in thousands, except per share data) | Item | June 30, 2025 | Mar. 31, 2025 | Dec. 31, 2024 | Sep. 30, 2024 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | :------------ | :------------ | :------------ | | Total interest income | $70,638 | $69,925 | $69,424 | $67,378 | $64,667 | | Total interest expense | $30,305 | $30,446 | $31,281 | $30,717 | $29,572 | | Net interest income | $40,333 | $39,479 | $38,143 | $36,661 | $35,095 | | Provision for credit losses | $2,500 | $932 | $932 | $2,159 | $900 | | Total noninterest income | $7,280 | $6,666 | $6,865 | $7,174 | $7,767 | | Total noninterest expense | $25,976 | $25,391 | $24,876 | $25,841 | $25,002 | | Net income before income taxes | $19,137 | $19,822 | $19,200 | $15,835 | $16,960 | | Income taxes | $3,351 | $4,139 | $4,547 | $3,377 | $3,430 | | Net income | $15,786 | $15,683 | $14,653 | $12,458 | $13,530 | | Diluted earnings per common share | $1.39 | $1.39 | $1.30 | $1.10 | $1.19 | | Dividends per common share | $0.23 | $0.23 | $0.23 | $0.23 | $0.21 | [Quarterly Average Balance Sheet Data & Key Ratios](index=13&type=section&id=Quarterly%20Average%20Balance%20Sheet%20Data%20%26%20Key%20Ratios) This section provides average balance sheet data for key interest-earning assets and interest-bearing liabilities, along with critical performance ratios such as return on average assets, return on average common stockholders' equity, net interest margin, net interest spread, and efficiency ratio Quarterly Average Balance Sheet Data (dollars in thousands) | Item | June 30, 2025 | Mar. 31, 2025 | Dec. 31, 2024 | Sep. 30, 2024 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | :------------ | :------------ | :------------ | | Total interest-earning assets | $4,668,640 | $4,655,400 | $4,534,252 | $4,355,474 | $4,324,839 | | Total assets | $4,967,857 | $4,946,139 | $4,825,469 | $4,638,530 | $4,610,795 | | Total interest-bearing liabilities | $3,870,090 | $3,882,225 | $3,760,996 | $3,575,958 | $3,552,664 | | Total liabilities | $4,431,964 | $4,426,664 | $4,317,316 | $4,141,641 | $4,127,499 | | Total stockholders' equity | $535,893 | $519,475 | $508,153 | $496,889 | $483,296 | Key Ratios | Ratio | June 30, 2025 | Mar. 31, 2025 | Dec. 31, 2024 | Sep. 30, 2024 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | :------------ | :------------ | :------------ | | Return on average assets | 1.27% | 1.27% | 1.21% | 1.07% | 1.17% | | Return on average common stockholders' equity | 11.8% | 12.1% | 11.5% | 10.0% | 11.2% | | Net interest margin | 3.46% | 3.39% | 3.36% | 3.37% | 3.25% | | Net interest spread | 2.92% | 2.87% | 2.79% | 2.75% | 2.65% | | Efficiency ratio | 54.6% | 55.1% | 55.3% | 59.0% | 58.3% |

Core Viewpoint - Southern Missouri Bancorp, Inc. reported a preliminary net income of $15.8 million for Q4 fiscal 2025, marking a 16.7% increase year-over-year, driven by higher net interest income and lower tax provisions [1][2]. Financial Performance - Preliminary net income for fiscal year 2025 was $58.6 million, an increase of $8.4 million compared to fiscal 2024, with diluted earnings per share rising to $5.18 from $4.42 [1]. - Earnings per diluted common share for Q4 fiscal 2025 were $1.39, up $0.20 or 16.8% from the same quarter last year [3]. - The annualized return on average assets (ROA) was 1.27%, and the return on average common equity (ROE) was 11.8%, compared to 1.17% and 11.2% respectively in the same quarter last year [3]. Income and Expenses - Net interest income for Q4 fiscal 2025 was $40.3 million, a 14.9% increase from the previous year, attributed to a 7.9% rise in average interest-earning assets and a 21 basis point increase in net interest margin [16]. - Noninterest income decreased by 6.3% to $7.3 million, primarily due to lower loan servicing fees and changes in tax credit accounting [19]. - Noninterest expenses rose by 3.9% to $26.0 million, driven by increased legal fees and data processing expenses [20]. Balance Sheet Highlights - Total assets reached $5.0 billion, reflecting a 9.0% increase year-over-year, primarily due to growth in net loans and cash equivalents [6]. - Gross loan balances increased by $76.2 million in Q4 and by $249.9 million or 6.5% for the entire fiscal year [3][8]. - Deposit balances increased by $19.9 million in Q4 and by $338.3 million or 8.6% for the fiscal year [3][14]. Credit Quality - The provision for credit losses (PCL) was $2.5 million in Q4, up from $900,000 in the same period last year, driven by higher net charge-offs [18]. - Nonperforming loans (NPLs) increased to $23.0 million, or 0.56% of gross loans, compared to $6.7 million or 0.17% a year earlier [11]. - The allowance for credit losses (ACL) totaled $51.6 million, representing 1.26% of gross loans, down from 1.36% a year ago [12]. Dividends and Shareholder Returns - A quarterly cash dividend of $0.25 per share was declared, marking the 125th consecutive quarterly dividend, representing an 8.7% increase from the previous dividend [4][3]. - The tangible book value per share increased to $41.87, a 14.1% rise compared to the previous year [3].

Core Points - The American Camp Association (ACA) has launched a $500,000 grant initiative supported by the Sumitomo Mitsui Banking Corporation (SMBC) Global Foundation to fund nonprofit camps through the Camp-School Partnership Project [1][2] - The initiative aims to enhance camp capacity for high-quality programming in collaboration with schools and community partners, focusing on increasing access for youth in underserved communities [2][3] - For summer 2025, ACA will distribute $280,000 to eight organizations, selected from nearly 120 applications, to support programming for approximately 550 campers from lower socio-economic backgrounds [3][4] Grant Details - The grants will be awarded for one year, covering the summers of 2025 and 2026, with the next application window opening in fall 2025 [1][4] - Priority will be given to camps serving youth in specific states where SMBC employees are located, including New York, New Jersey, Arizona, California, Florida, North Carolina, and Texas [4][5] About ACA - The American Camp Association serves over 15,000 camps in the US, providing quality camp experiences for 26 million campers annually [6] - ACA is the only independent national accrediting body for organized camps, ensuring health, safety, and overall well-being of campers and staff [6] About SMBC Group - SMBC Group is a leading global financial institution with a history of 400 years, offering a wide range of financial services and operating in nearly 40 countries [9][10] - The group has a significant presence in the Americas, providing commercial and investment banking services to a diverse client base [10]

PART I. Financial Information [Item 1. Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents Southern Missouri Bancorp, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, income statements, comprehensive income statements, stockholders' equity statements, and cash flow statements, along with detailed notes explaining the basis of presentation, significant accounting policies, and specific financial instrument details for the periods ended March 31, 2025, and June 30, 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and stockholders' equity at specific dates Table: Condensed Consolidated Balance Sheets (dollars in thousands) | (dollars in thousands) | March 31, 2025 | June 30, 2024 | | :--------------------- | :------------- | :------------ | | **Assets** | | | | Cash and cash equivalents | $226,891 | $60,904 | | Loans receivable, net | $3,968,569 | $3,797,287 | | Total assets | $4,976,496 | $4,604,316 | | **Liabilities** | | | | Deposits | $4,261,382 | $3,943,059 | | Total liabilities | $4,447,706 | $4,115,568 | | **Stockholders' Equity** | | | | Total stockholders' equity | $528,790 | $488,748 | - Total assets increased by **$372.2 million (8.1%)** from June 30, 2024, to March 31, 2025, primarily driven by increases in net loans receivable, cash equivalents, and available-for-sale securities[9](index=9&type=chunk)[183](index=183&type=chunk)[194](index=194&type=chunk) - Total liabilities increased by **$332.1 million**, mainly due to a **$318.3 million** increase in deposits[9](index=9&type=chunk)[183](index=183&type=chunk)[199](index=199&type=chunk) [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) This section details the company's revenues, expenses, and net income over specific reporting periods Table: Condensed Consolidated Statements of Income (dollars in thousands except per share data) | (dollars in thousands except per share data) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | Nine months ended March 31, 2025 | Nine months ended March 31, 2024 | | :------------------------------------------- | :-------------------------------- | :-------------------------------- | :------------------------------- | :------------------------------- | | Total interest income | $69,925 | $64,025 | $206,728 | $183,707 | | Total interest expense | $30,446 | $29,516 | $92,444 | $79,319 | | Net Interest Income | $39,479 | $34,509 | $114,284 | $104,388 | | Provision for Credit Losses | $932 | $900 | $4,023 | $2,700 | | Total noninterest income | $6,666 | $5,584 | $20,705 | $17,077 | | Total noninterest expense | $25,391 | $25,049 | $76,109 | $72,616 | | Net Income | $15,683 | $11,307 | $42,792 | $36,652 | | Basic earnings per share | $1.39 | $1.00 | $3.79 | $3.23 | | Diluted earnings per share | $1.39 | $0.99 | $3.79 | $3.22 | | Dividends paid per share | $0.23 | $0.21 | $0.69 | $0.63 | - Net income for the three months ended March 31, 2025, increased by **$4.4 million (38.7%)** YoY, and for the nine months, it increased by **$6.1 million (16.8%)** YoY[10](index=10&type=chunk)[216](index=216&type=chunk)[226](index=226&type=chunk) - Diluted EPS for the three months ended March 31, 2025, was **$1.39**, up from **$0.99** YoY, and for the nine months, it was **$3.79**, up from **$3.22** YoY[10](index=10&type=chunk)[217](index=217&type=chunk)[227](index=227&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents net income and other comprehensive income components, reflecting total changes in equity from non-owner sources Table: Condensed Consolidated Statements of Comprehensive Income (dollars in thousands) | (dollars in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | Nine months ended March 31, 2025 | Nine months ended March 31, 2024 | | :--------------------- | :-------------------------------- | :-------------------------------- | :------------------------------- | :------------------------------- | | Net Income | $15,683 | $11,307 | $42,792 | $36,652 | | Unrealized gains (losses) on securities available-for-sale | $3,175 | $(1,130) | $4,488 | $2,195 | | Total other comprehensive income (loss) | $2,439 | $(251) | $3,463 | $2,874 | | Comprehensive Income | $18,122 | $11,056 | $46,255 | $39,526 | - Comprehensive income for the three months ended March 31, 2025, increased to **$18.1 million** from **$11.1 million** YoY, primarily due to positive unrealized gains on available-for-sale securities[12](index=12&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section details changes in the company's equity, including net income, other comprehensive income, and dividends Table: Condensed Consolidated Statements of Stockholders' Equity (dollars in thousands) | (dollars in thousands) | March 31, 2025 | June 30, 2024 | | :--------------------- | :------------- | :------------ | | Total Stockholders' Equity | $528,790 | $488,748 | | Net Income | $42,792 | $36,652 | | Change in unrealized loss on available for sale securities | $3,463 | $2,874 | | Dividends paid on common stock | $(7,783) | $(7,145) | - Total stockholders' equity increased by **$40.0 million (8.2%)** from June 30, 2024, to March 31, 2025, driven by retained earnings and a **$3.5 million** reduction in accumulated other comprehensive losses due to appreciating investment values[13](index=13&type=chunk)[202](index=202&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes cash inflows and outflows from operating, investing, and financing activities over specific periods Table: Condensed Consolidated Statements of Cash Flows (dollars in thousands) | (dollars in thousands) | Nine months ended March 31, 2025 | Nine months ended March 31, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | | Net cash provided by operating activities | $54,234 | $55,047 | | Net cash used in investing activities | $(206,367) | $(172,261) | | Net cash provided by financing activities | $318,120 | $231,508 | | Increase in cash and cash equivalents | $165,987 | $114,294 | | Cash and cash equivalents at end of period | $226,891 | $168,273 | - Cash and cash equivalents increased by **$166.0 million** during the nine months ended March 31, 2025, reaching **$226.9 million**, primarily due to strong financing activities[14](index=14&type=chunk)[195](index=195&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements [Note 1: Basis of Presentation](index=10&type=section&id=Note%201:%20Basis%20of%20Presentation) This note outlines the accounting principles and conventions used in preparing the interim financial statements - The interim financial statements are prepared in accordance with GAAP for interim financial information and SEC Regulation S-X, Rule 10-01, and do not include all disclosures required for complete annual financial statements[15](index=15&type=chunk) - An immaterial error in prior period financial statements was corrected, reclassifying 'securities sold under agreements to repurchase' from 'deposits' to a separate line item on the balance sheet and income statement, with no material impact on previously presented financial statements[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) [Note 2: Organization and Summary of Significant Accounting Policies](index=12&type=section&id=Note%202:%20Organization%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note describes the company's structure, business activities, and key accounting policies, including significant estimates and new pronouncements - Southern Missouri Bancorp, Inc. is the parent company of Southern Bank, which provides banking and financial services, and controls SB Real Estate Investments, LLC, a REIT with approximately **$1.3 billion** in assets[22](index=22&type=chunk) - The Company faces economic risks (interest rate, credit, market) and regulatory risks, with material estimates particularly susceptible to change relating to the allowance for credit losses (ACL)[24](index=24&type=chunk)[27](index=27&type=chunk) - New accounting pronouncements, including ASU 2021-01, ASU 2023-07, ASU 2023-02, ASU 2023-09, and ASU 2024-03, are being evaluated, with most not expected to have a material impact on consolidated financial statements, though ASU 2024-03 will impact disclosures[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) [Note 3: Available for Sale Securities](index=27&type=section&id=Note%203:%20Available%20for%20Sale%20Securities) This note provides details on the company's available-for-sale securities, including fair values and unrealized gains or losses Table: Available for Sale Securities Fair Value (dollars in thousands) | (dollars in thousands) | March 31, 2025 Fair Value | June 30, 2024 Fair Value | | :--------------------- | :------------------------ | :----------------------- | | Total debt securities | $100,904 | $123,042 | | Total MBS and CMOs | $362,026 | $304,861 | | Total AFS securities | $462,930 | $427,903 | Table: Available for Sale Securities Gross Unrealized Losses (dollars in thousands) | (dollars in thousands) | March 31, 2025 Gross Unrealized Losses | June 30, 2024 Gross Unrealized Losses | | :--------------------- | :------------------------------------- | :------------------------------------ | | Obligations of state and political subdivisions | $1,918 | $2,211 | | Corporate obligations | $877 | $1,781 | | Asset-backed securities | $180 | $249 | | Other securities | $66 | $74 | | MBS and CMOs | $17,407 | $20,705 | | Total AFS securities | $20,448 | $25,020 | - The Company does not believe any individual unrealized loss on AFS securities as of March 31, 2025, is due to credit loss, as the securities are performing and of high credit quality, with losses primarily caused by increases in market interest rates[78](index=78&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) [Note 4: Loans and Allowance for Credit Losses](index=30&type=section&id=Note%204:%20Loans%20and%20Allowance%20for%20Credit%20Losses) This note details the composition of the loan portfolio and the methodology and balances of the allowance for credit losses Table: Loans and Allowance for Credit Losses (dollars in thousands) | (dollars in thousands) | March 31, 2025 | June 30, 2024 | | :--------------------- | :------------- | :------------ | | 1-4 residential real estate | $978,908 | $925,397 | | Non-owner occupied commercial real estate | $897,125 | $899,770 | | Owner occupied commercial real estate | $440,282 | $427,476 | | Multi-family real estate | $405,445 | $384,564 | | Construction and land development | $323,499 | $290,541 | | Agriculture real estate | $247,027 | $232,520 | | Commercial and industrial | $488,116 | $450,147 | | Agriculture production | $186,058 | $175,968 | | Consumer | $54,022 | $59,671 | | Gross loans | $4,023,698 | $3,850,035 | | Allowance for credit losses | $(54,940) | $(52,516) | | Net loans | $3,968,569 | $3,797,287 | Table: Provision for Credit Losses on Loans (dollars in thousands) | (dollars in thousands) | Nine months ended March 31, 2025 | Nine months ended March 31, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | | Provision for credit losses on loans | $3,822 | $4,850 | | Net charge offs | $(1,398) | $(1,334) | | ACL, end of period | $54,940 | $51,336 | - Past due loans increased significantly to **$24.4 million (0.61% of total loans)** at March 31, 2025, from **$9.2 million (0.24%)** at June 30, 2024, primarily due to **$10.0 million** in non-owner occupied commercial real estate loans with an insolvent tenant[117](index=117&type=chunk)[121](index=121&type=chunk) - Nonaccrual loans increased to **$22.0 million** at March 31, 2025, from **$6.7 million** at June 30, 2024, with no nonaccrual loans individually evaluated for which no ACL was recorded[123](index=123&type=chunk) - Four loan modifications totaling **$22.3 million** were made for borrowers experiencing financial difficulty during the nine months ended March 31, 2025, primarily involving changes to interest-only payments[125](index=125&type=chunk)[126](index=126&type=chunk) [Note 5: Premises and Equipment](index=55&type=section&id=Note%205:%20Premises%20and%20Equipment) This note provides details on the company's premises and equipment, including net book values and operating lease obligations Table: Premises and Equipment, Net (dollars in thousands) | (dollars in thousands) | March 31, 2025 | June 30, 2024 | | :--------------------- | :------------- | :------------ | | Total Premises and Equipment, net | $95,987 | $95,952 | | Operating leases ROU asset | $6,855 | $6,669 | | Operating leases liability | $6,855 | $6,669 | - The Company's operating lease costs classified as occupancy and equipment expense were **$886,000** for the nine months ended March 31, 2025, with future lease payments totaling **$11.5 million**[135](index=135&type=chunk) [Note 6: Deposits](index=57&type=section&id=Note%206:%20Deposits) This note details the composition of the company's deposit accounts, including interest-bearing and non-interest-bearing categories Table: Total Deposit Accounts (dollars in thousands) | (dollars in thousands) | March 31, 2025 | June 30, 2024 | | :--------------------- | :------------- | :------------ | | Non-interest bearing accounts | $513,418 | $514,107 | | NOW accounts | $1,167,296 | $1,239,663 | | Money market deposit accounts | $347,823 | $336,799 | | Savings accounts | $626,175 | $517,084 | | Certificates | $1,606,670 | $1,335,406 | | Total Deposit Accounts | $4,261,382 | $3,943,059 | - Total deposits increased by **$318.3 million (8.1%)** from June 30, 2024, to March 31, 2025, driven by increases in certificates of deposit and savings accounts[136](index=136&type=chunk)[199](index=199&type=chunk) - Brokered certificates increased to **$233.6 million** at March 31, 2025, from **$171.8 million** at June 30, 2024[136](index=136&type=chunk) [Note 7: Repurchase Agreements](index=59&type=section&id=Note%207:%20Repurchase%20Agreements) This note provides information on the company's securities sold under agreements to repurchase, including balances and interest rates Table: Repurchase Agreements (dollars in thousands) | (dollars in thousands) | March 31, 2025 | June 30, 2024 | | :--------------------- | :------------- | :------------ | | Period-end balance | $15,000 | $9,398 | | Average interest during the period | 5.43 % | 5.39 % | | Period-end interest rate | 5.11 % | 5.39 % | - Securities sold under agreements to repurchase increased by **$5.6 million** to **$15.0 million** at March 31, 2025, from **$9.4 million** at June 30, 2024[137](index=137&type=chunk) [Note 8: Earnings Per Share](index=59&type=section&id=Note%208:%20Earnings%20Per%20Share) This note details the calculation of basic and diluted earnings per share, including the impact of anti-dilutive securities Table: Earnings Per Share (dollars in thousands except per share data) | (dollars in thousands except per share data) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | Nine months ended March 31, 2025 | Nine months ended March 31, 2024 | | :------------------------------------------- | :-------------------------------- | :-------------------------------- | :------------------------------- | :------------------------------- | | Net income available to common shareholders | $15,612 | $11,249 | $42,599 | $36,464 | | Basic earnings per share | $1.39 | $1.00 | $3.79 | $3.23 | | Diluted earnings per share | $1.39 | $0.99 | $3.79 | $3.22 | - Certain stock options and restricted stock awards were excluded from diluted EPS computation due to their anti-dilutive nature, totaling **56,000 shares** for the three-month period and **63,500 shares** for the nine-month period ended March 31, 2025[139](index=139&type=chunk) [Note 9: Income Taxes](index=60&type=section&id=Note%209:%20Income%20Taxes) This note provides information on the company's income tax provision and deferred tax assets and liabilities Table: Total Income Tax Provision (dollars in thousands) | (dollars in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | Nine months ended March 31, 2025 | Nine months ended March 31, 2024 | | :--------------------- | :-------------------------------- | :-------------------------------- | :------------------------------- | :------------------------------- | | Total income tax provision | $4,139 | $2,837 | $12,065 | $9,497 | Table: Net Deferred Tax Asset (dollars in thousands) | (dollars in thousands) | March 31, 2025 | June 30, 2024 | | :--------------------- | :------------- | :------------ | | Net deferred tax asset | $10,210 | $11,187 | - The income tax provision for the nine months ended March 31, 2025, increased by **$2.6 million (27.0%)** YoY, primarily due to higher pre-tax income and a **$380,000** adjustment to tax accruals from merger and acquisition activity[141](index=141&type=chunk)[235](index=235&type=chunk) [Note 10: 401(k) Retirement Plan](index=62&type=section&id=Note%2010:%20401(k)%20Retirement%20Plan) This note describes the company's 401(k) retirement plan, including employer contributions and related expenses Table: Retirement Plan Expenses (dollars in thousands) | (dollars in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | Nine months ended March 31, 2025 | Nine months ended March 31, 2024 | | :--------------------- | :-------------------------------- | :-------------------------------- | :------------------------------- | :------------------------------- | | Retirement plan expenses | $521 | $683 | $1,900 | $2,100 | - The Bank maintains a 401(k) retirement plan with safe harbor matching contributions up to **4%** of eligible compensation and expects to continue discretionary profit-sharing contributions for fiscal 2025[145](index=145&type=chunk) [Note 11: Subordinated Debt](index=62&type=section&id=Note%2011:%20Subordinated%20Debt) This note provides details on the company's subordinated debt instruments, including carrying values, interest rates, and maturities Table: Subordinated Debt Carrying Value (dollars in thousands) | (dollars in thousands) | March 31, 2025 Carrying Value | June 30, 2024 Carrying Value | | :--------------------- | :---------------------------- | :--------------------------- | | Southern Missouri Statutory Trust I Debentures | $7,200 | $7,200 | | OLCF junior subordinated debt securities | $2,800 | $2,800 | | PSC junior subordinated debt securities | $5,600 | $5,600 | | Fortune fixed-to-floating rate subordinated notes | $7,600 | $7,600 | | Total Subordinated Debt | $23,195 | $23,156 | - The Company has various subordinated debt instruments, primarily assumed through mergers, with floating interest rates based on SOFR and maturities ranging from 2031 to 2035[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk)[151](index=151&type=chunk) [Note 12: Fair Value Measurements](index=64&type=section&id=Note%2012:%20Fair%20Value%20Measurements) This note explains the fair value hierarchy and provides fair value measurements for various financial instruments and assets Table: Fair Value Measurements (dollars in thousands) | (dollars in thousands) | March 31, 2025 Fair Value | June 30, 2024 Fair Value | | :--------------------- | :------------------------ | :----------------------- | | **Recurring Measurements** | | | | Total AFS securities | $462,930 | $427,903 | | Mortgage servicing rights | $2,388 | $2,448 | | Derivative financial instruments (assets) | $605 | $20 | | Derivative financial instruments (liabilities) | $578 | $15 | | **Nonrecurring Measurements** | | | | Foreclosed and repossessed assets held for sale | $625 | $759 | | Collateral dependent loans | $25,288 | $12,994 | - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (significant other observable inputs), and Level 3 (significant unobservable inputs), with mortgage servicing rights, foreclosed assets, and collateral-dependent loans classified as Level 3[152](index=152&type=chunk)[156](index=156&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk) - Losses recognized on assets measured on a non-recurring basis for the nine months ended March 31, 2025, totaled **$80,000**, a decrease from **$687,000** in the prior year[158](index=158&type=chunk) [Note 13: Derivative Financial Instruments](index=69&type=section&id=Note%2013:%20Derivative%20Financial%20Instruments) This note describes the company's use of derivative financial instruments, primarily interest rate swaps, for managing interest rate risk Table: 1-4 Family Interest Rate Swaps Notional Amount (dollars in thousands) | (dollars in thousands) | March 31, 2025 Notional Amount | June 30, 2024 Notional Amount | | :--------------------- | :----------------------------- | :---------------------------- | | 1-4 Family interest rate swaps | $50,000 | $40,000 | - The Company uses interest rate swaps, primarily designated as fair value hedges, to convert long-term fixed-rate loans to floating rates and manage interest rate risk, with the notional amount increasing to **$50.0 million** in fiscal 2025[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=71&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, highlighting key performance drivers, balance sheet changes, and operational results for the three- and nine-month periods ended March 31, 2025, compared to prior periods. It also discusses forward-looking statements, critical accounting policies, credit loss activity, nonperforming assets, liquidity, and regulatory capital [General](index=71&type=section&id=General) This section provides an overview of Southern Missouri Bancorp, Inc.'s operations and its wholly-owned subsidiary, Southern Bank - Southern Missouri Bancorp, Inc. operates through its wholly-owned subsidiary, Southern Bank, which has **62 full-service branches**, two limited-service branches, and two loan production offices[171](index=171&type=chunk) - The Company's earnings are primarily dependent on the Bank's operations, with deposit accounts insured up to **$250,000** by the FDIC[171](index=171&type=chunk) [Forward Looking Statements](index=71&type=section&id=Forward%20Looking%20Statements) This section highlights the inherent uncertainties and risks associated with the company's future operating and financial performance - The document contains forward-looking statements regarding future operating and financial performance, growth, interest rates, and cost savings, which are subject to various risks and uncertainties[175](index=175&type=chunk) - Key risk factors include integration challenges from mergers, adverse economic conditions (inflation, recession), interest rate fluctuations, monetary/fiscal policies, bank failures, lending risks, liquidity access, real estate values, regulatory changes, cyber threats, and climate change[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) [Critical Accounting Policies](index=75&type=section&id=Critical%20Accounting%20Policies) This section discusses the accounting policies that require significant judgment and estimates, which are crucial to the company's financial reporting - The Company's critical accounting policies involve significant judgments, assumptions, and estimates, particularly susceptible to change, and are reviewed with the Audit Committee[180](index=180&type=chunk) [Executive Summary](index=75&type=section&id=Executive%20Summary) This section provides a high-level overview of the company's financial performance and key changes in its financial condition - Net income for the first nine months of fiscal 2025 increased by **$6.1 million (16.8%)** to **$42.8 million**, with diluted EPS of **$3.79**, up from **$3.22** in the prior year[183](index=183&type=chunk) - Total assets grew by **$372.2 million**, primarily due to increases in net loans receivable, cash equivalents, and available-for-sale securities, while liabilities increased mainly from deposits[183](index=183&type=chunk) - Net interest margin expanded by **nine basis points** to **3.37%** for the first nine months of fiscal 2025, driven by higher yields on earning assets and eased pressure on interest expense due to federal funds rate cuts[187](index=187&type=chunk) [Comparison of Financial Condition at March 31, 2025 and June 30, 2024](index=79&type=section&id=Comparison%20of%20Financial%20Condition%20at%20March%2031,%202025%20and%20June%2030,%202024) This section analyzes the changes in the company's balance sheet items between March 31, 2025, and June 30, 2024 Table: Comparison of Financial Condition (dollars in thousands) | (dollars in thousands) | March 31, 2025 | June 30, 2024 | Change (Amount) | Change (%) | | :--------------------- | :------------- | :------------ | :-------------- | :--------- | | Total Assets | $4,976,496 | $4,604,316 | $372,180 | 8.1% | | Cash equivalents and time deposits | $227,136 | $61,395 | $165,741 | 270.0% | | AFS securities | $462,930 | $427,903 | $35,027 | 8.2% | | Loans, net of ACL | $3,968,569 | $3,797,287 | $171,282 | 4.5% | | Deposits | $4,261,382 | $3,943,059 | $318,323 | 8.1% | | FHLB advances | $104,072 | $102,050 | $2,022 | 2.0% | | Stockholders' Equity | $528,790 | $488,748 | $40,042 | 8.2% | - Gross loans increased by **$173.7 million**, with growth in 1-4 family residential, commercial and industrial, construction and land development, multi-family real estate, agriculture real estate, owner occupied commercial real estate, and agricultural production loans[196](index=196&type=chunk) - The Bank's concentration in non-owner occupied commercial real estate loans was **304.0%** of Tier 1 capital and ACL at March 31, 2025, down from **317.5%** at June 30, 2024[198](index=198&type=chunk) [Average Balance Sheet, Interest, and Average Yields and Rates for the Three- and Nine- Month Periods Ended March 31, 2025 and 2024](index=82&type=section&id=Average%20Balance%20Sheet,%20Interest,%20and%20Average%20Yields%20and%20Rates%20for%20the%20Three-%20and%20Nine-%20Month%20Periods%20Ended%20March%2031,%202025%20and%202024) This section presents average balance sheet data, interest income and expense, and corresponding yields and rates for specified periods Table: Average Yields and Rates (%) | (dollars in thousands) | 3 Months Ended Mar 31, 2025 Yield/Cost (%) | 3 Months Ended Mar 31, 2024 Yield/Cost (%) | 9 Months Ended Mar 31, 2025 Yield/Cost (%) | 9 Months Ended Mar 31, 2024 Yield/Cost (%) | | :--------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | :----------------------------------------- | | Total net loans | 6.26 | 6.01 | 6.31 | 5.93 | | TOTAL INTEREST-EARNING ASSETS | 6.01 | 5.84 | 6.10 | 5.77 | | TOTAL INTEREST-BEARING DEPOSITS | 3.08 | 3.20 | 3.24 | 2.96 | | TOTAL INTEREST-BEARING LIABILITIES | 3.14 | 3.25 | 3.30 | 3.04 | | Net interest spread | 2.87 | 2.59 | 2.80 | 2.73 | | Net interest margin | 3.39 | 3.15 | 3.37 | 3.28 | - For the nine months ended March 31, 2025, the average yield on earning assets increased by **33 basis points**, while the cost of interest-bearing liabilities increased by **26 basis points**, leading to an increase in net interest spread and net interest margin[187](index=187&type=chunk) [Rate/Volume Analysis](index=85&type=section&id=Rate/Volume%20Analysis) This section analyzes the impact of changes in interest rates and asset/liability volumes on net interest income Table: Net Change in Net Interest Income (dollars in thousands) | (dollars in thousands) | 3 Months Ended Mar 31, 2025 vs 2024 Net Change | 9 Months Ended Mar 31, 2025 vs 2024 Net Change | | :--------------------- | :--------------------------------------------- | :--------------------------------------------- | | Total net change in income on interest-earning assets | $5,900 | $23,021 | | Total net change in expense on interest-bearing liabilities | $930 | $13,125 | | Net change in net interest income | $4,970 | $9,896 | - For the nine months ended March 31, 2025, the increase in net interest income was primarily driven by a **$9.8 million** increase, with rate changes contributing **$5.6 million** and volume changes contributing **$6.0 million**[214](index=214&type=chunk) [Results of Operations – Comparison of the three-month periods ended March 31, 2025 and 2024](index=86&type=section&id=Results%20of%20Operations%20%E2%80%93%20Comparison%20of%20the%20three-month%20periods%20ended%20March%2031,%202025%20and%202024) This section compares the company's financial performance for the three-month periods ended March 31, 2025, and 2024 Table: Results of Operations (dollars in thousands) | (dollars in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | Change (Amount) | Change (%) | | :--------------------- | :-------------------------------- | :-------------------------------- | :-------------- | :--------- | | Net Income | $15,683 | $11,307 | $4,376 | 38.7% | | Diluted EPS | $1.39 | $0.99 | $0.40 | 40.4% | | Net Interest Income | $39,479 | $34,509 | $4,970 | 14.4% | | Noninterest Income | $6,666 | $5,584 | $1,082 | 19.4% | | Noninterest Expense | $25,391 | $25,049 | $342 | 1.4% | | Income Tax Provision | $4,139 | $2,837 | $1,302 | 45.9% | | PCL | $932 | $900 | $32 | 3.6% | - Net interest margin expanded by **24 basis points** to **3.39%**, driven by a **17 basis point** increase in the yield on interest-earning assets and an **11 basis point** decrease in the cost of interest-bearing liabilities[218](index=218&type=chunk) - Noninterest income increased due to the absence of AFS securities sale losses (**$807,000** in prior year) and higher deposit account charges, partially offset by lower loan late charges and servicing fees[221](index=221&type=chunk) - Noninterest expense increased due to card fraud losses, deposit product expenses, higher occupancy and equipment costs, and legal/professional fees, partially offset by lower telecommunication, intangible amortization, and advertising expenses[222](index=222&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk) [Results of Operations – Comparison of the nine-month periods ended March 31, 2025 and 2024](index=88&type=section&id=Results%20of%20Operations%20%E2%80%93%20Comparison%20of%20the%20nine-month%20periods%20ended%20March%2031,%202025%20and%202024) This section compares the company's financial performance for the nine-month periods ended March 31, 2025, and 2024 Table: Results of Operations (dollars in thousands) | (dollars in thousands) | Nine months ended March 31, 2025 | Nine months ended March 31, 2024 | Change (Amount) | Change (%) | | :--------------------- | :------------------------------- | :------------------------------- | :-------------- | :--------- | | Net Income | $42,792 | $36,652 | $6,140 | 16.8% | | Diluted EPS | $3.79 | $3.22 | $0.57 | 17.7% | | Net Interest Income | $114,284 | $104,388 | $9,896 | 9.5% | | Noninterest Income | $20,705 | $17,077 | $3,628 | 21.2% | | Noninterest Expense | $76,109 | $72,616 | $3,493 | 4.8% | | Income Tax Provision | $12,065 | $9,497 | $2,568 | 27.0% | | PCL | $4,023 | $2,700 | $1,323 | 49.0% | - Net interest margin increased to **3.37%** from **3.28%** YoY, driven by a **6.3%** increase in average interest-earning assets and a higher interest-earning asset yield[228](index=228&type=chunk) - Noninterest income increased primarily due to the absence of a net realized loss on AFS securities sales and increases in other loan fees, deposit account charges, bank card interchange income, wealth management fees, and BOLI earnings[231](index=231&type=chunk)[232](index=232&type=chunk) - Noninterest expense increased due to higher compensation and benefits (employee headcount, merit increases), legal and professional fees (performance improvement project, audit accruals), and occupancy and equipment expenses (depreciation, maintenance)[234](index=234&type=chunk) [Allowance for Credit Loss Activity](index=90&type=section&id=Allowance%20for%20Credit%20Loss%20Activity) This section details the changes and adequacy of the allowance for credit losses, including key ratios and qualitative adjustments Table: Allowance for Credit Loss Activity (dollars in thousands) | (dollars in thousands) | March 31, 2025 | June 30, 2024 | | :--------------------- | :------------- | :------------ | | ACL on loans | $54,940 | $52,516 | | ACL as % of gross loans | 1.37% | 1.36% | | ACL as % of nonperforming loans | 250% | 786% | | Allowance for off-balance sheet credit exposures | $3,464 | $3,263 | - The ACL totaled **$54.9 million** at March 31, 2025, representing **1.37%** of gross loans and **250%** of nonperforming loans. Management believes the ACL is adequate based on current estimates, despite significant uncertainty from high market interest rates[240](index=240&type=chunk) - Qualitative adjustments in the ACL model increased compared to June 30, 2024, due to various factors relevant to expected credit collectability, including loan net charge-offs and reserves for overdrafts[240](index=240&type=chunk) [Nonperforming Assets](index=94&type=section&id=Nonperforming%20Assets) This section provides an overview of the company's nonperforming assets, including nonaccrual loans and foreclosed assets Table: Nonperforming Assets (dollars in thousands) | (dollars in thousands) | March 31, 2025 | June 30, 2024 | March 31, 2024 | | :--------------------- | :------------- | :------------ | :------------- | | Total nonperforming loans | $21,970 | $6,680 | $7,410 | | Foreclosed assets held for sale | $1,775 | $3,865 | $3,791 | | Total nonperforming assets | $23,801 | $10,568 | $11,261 | - Total nonperforming assets increased to **$23.8 million** at March 31, 2025, from **$10.6 million** at June 30, 2024, primarily due to an increase in nonperforming loans, partially offset by a reduction in other real estate owned[248](index=248&type=chunk) - The increase in nonperforming loans was largely attributable to several commercial relationships added in Q3 2025, including **$10 million** in loans secured by two non-owner occupied commercial properties with an insolvent tenant[248](index=248&type=chunk) [Liquidity Resources](index=96&type=section&id=Liquidity%20Resources) This section describes the company's sources of liquidity and its ability to meet financial obligations - Primary funding sources include deposit growth, FHLB advances, brokered deposits, loan principal amortization, investment maturities, and operations[249](index=249&type=chunk) - At March 31, 2025, the Company had **$901.4 million** in outstanding commitments to extend credit. The Bank had **$863.8 million** in available credit from FHLB (with **$1.5 billion** pledged collateral) and **$324.6 million** from the Federal Reserve's discount window (with **$377.1 million** pledged collateral)[251](index=251&type=chunk) [Regulatory Capital](index=96&type=section&id=Regulatory%20Capital) This section outlines the company's regulatory capital ratios and compliance with capital adequacy requirements Table: Regulatory Capital Ratios (%) | (dollars in thousands) | March 31, 2025 Actual Ratio | June 30, 2024 Actual Ratio | | :--------------------- | :-------------------------- | :------------------------- | | Consolidated Total Capital (to RWA) | 13.86% | 13.23% | | Southern Bank Total Capital (to RWA) | 13.22% | 12.68% | | Consolidated Tier I Capital (to RWA) | 12.43% | 11.79% | | Southern Bank Tier I Capital (to RWA) | 11.97% | 11.43% | | Consolidated Tier I Capital (to Average Assets) | 10.30% | 10.19% | | Southern Bank Tier I Capital (to Average Assets) | 9.82% | 9.79% | | Consolidated Common Equity Tier I Capital (to RWA) | 12.04% | 11.39% | | Southern Bank Common Equity Tier I Capital (to RWA) | 11.97% | 11.43% | - The Company and Bank met all capital adequacy requirements as of March 31, 2025, with the Bank categorized as 'well capitalized' under regulatory frameworks[255](index=255&type=chunk)[257](index=257&type=chunk) - The Company and Bank elected a five-year transition period to recognize the estimated impact of the CECL standard adoption on regulatory capital[256](index=256&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=101&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section details the Company's strategies for managing market risk, particularly interest rate sensitivity, through asset/liability management, and provides an interest rate sensitivity analysis using Net Portfolio Value (NPV) projections under various hypothetical rate changes [Asset and Liability Management and Market Risk](index=101&type=section&id=Asset%20and%20Liability%20Management%20and%20Market%20Risk) This section describes the company's approach to managing interest rate risk through its asset and liability management strategies - The Company's asset/liability management strategy aims to maximize net interest income by matching repricing intervals of interest-earning assets and interest-bearing liabilities, while managing interest rate risk[261](index=261&type=chunk) - Strategies include using longer-term fixed-rate FHLB advances, increasing originations of higher-yielding loans with shorter repricing periods, limiting investment portfolio price volatility, and actively soliciting less rate-sensitive deposits[262](index=262&type=chunk) - At March 31, 2025, the fixed-rate residential loan portfolio was **$634.2 million** with a weighted average maturity of **167 months**, and the investment portfolio had an expected weighted-average life of **4.7 years**[263](index=263&type=chunk) [Interest Rate Sensitivity Analysis](index=102&type=section&id=Interest%20Rate%20Sensitivity%20Analysis) This section presents an analysis of the company's Net Portfolio Value (NPV) sensitivity to hypothetical changes in interest rates Table: Interest Rate Sensitivity Analysis - NPV Change (%) | Change in Rates | March 31, 2025 NPV Change (%) | June 30, 2024 NPV Change (%) | | :-------------- | :---------------------------- | :--------------------------- | | +300 bp | (13)% | (23)% | | +200 bp | (7)% | (15)% | | +100 bp | (3)% | (7)% | | 0 bp | — | — | | -100 bp | 2% | 6% | | -200 bp | 1% | 9% | | -300 bp | (2)% | 8% | - The Company's Net Portfolio Value (NPV) sensitivity to rising rates improved at March 31, 2025, compared to June 30, 2024, with a smaller percentage decrease in NPV for upward rate shocks[265](index=265&type=chunk) - The improved NPV sensitivity is attributed to decreased market interest rates at the mid-point of the curve, an overall increase in earning asset yields, increased cash balances, a slight decrease in fixed-rate loans, and an increase in variable-rate securities, along with an increase in interest rate swaps to **$50 million**[267](index=267&type=chunk)[268](index=268&type=chunk) [Item 4. Controls and Procedures](index=105&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures as of March 31, 2025, based on an evaluation by senior management, and states that there have been no material changes to internal control over financial reporting during the quarter. It also acknowledges the inherent limitations of control procedures - The Company's disclosure controls and procedures were deemed effective as of March 31, 2025, ensuring timely and accurate reporting of required information[272](index=272&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended March 31, 2025[272](index=272&type=chunk) - The Company acknowledges that control procedures provide only reasonable, not absolute, assurance and have inherent limitations, such as faulty judgments, simple errors, circumvention by individuals or collusion, and management override[273](index=273&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=106&type=section&id=Item%201.%20Legal%20Proceedings) Management believes the Company is not a party to any pending claims or lawsuits that are expected to have a material effect on its financial condition or operations, beyond those incident to ordinary business - No material legal proceedings are pending against the Company that would significantly impact its financial condition or operations[276](index=276&type=chunk) [Item 1a. Risk Factors](index=106&type=section&id=Item%201a.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended June 30, 2024 - No material changes to previously reported risk factors were identified[277](index=277&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=106&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company has an ongoing stock repurchase program, authorized to repurchase up to 445,000 shares, but reported no repurchase activity during the three months ended March 31, 2025 - The Company has an authorized stock repurchase program for up to **445,000 shares**, with **213,580 shares** remaining available for purchase as of March 31, 2025[278](index=278&type=chunk)[280](index=280&type=chunk) - No shares were repurchased during the three months ended March 31, 2025[280](index=280&type=chunk) [Item 3. Defaults upon Senior Securities](index=106&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) This item is not applicable to the Company for the reporting period - This item is not applicable[281](index=281&type=chunk) [Item 4. Mine Safety Disclosures](index=106&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company for the reporting period - This item is not applicable[281](index=281&type=chunk) [Item 5. Other Information](index=106&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended March 31, 2025 - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the quarter[281](index=281&type=chunk) [Item 6. Exhibits](index=108&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including articles of incorporation, bylaws, material contracts, certifications, and financial information in iXBRL format - The exhibits include corporate governance documents, various incentive and retirement plans, employment and change-in-control agreements, tax sharing agreements, and certifications[283](index=283&type=chunk)[284](index=284&type=chunk) - Financial and related information for the quarter ended March 31, 2025, is provided in Inline Extensible Business Reporting Language (iXBRL) format[284](index=284&type=chunk) [Signature Page](index=111&type=section&id=Signature%20Page) The report is duly signed on behalf of Southern Missouri Bancorp, Inc. by its Chairman & Chief Executive Officer, President & Chief Administrative Officer, and Executive Vice President & Chief Financial Officer - The report is signed by Greg A. Steffens (Chairman & CEO), Matthew T. Funke (President & CAO), and Stefan Chkautovich (EVP & CFO) on May 12, 2025[287](index=287&type=chunk)

Financial Data and Key Metrics Changes - Earnings per share for the March quarter was $1.39, an increase of $0.09 from the linked December quarter and up $0.40 from the March 2024 quarter [7] - Net interest margin for the quarter was 3.39%, compared to 3.15% for the same period last year and up from 3.36% in the previous quarter [7] - Net interest income increased by 3.5% quarter-over-quarter and 14.4% year-over-year due to higher average earning asset balances and net interest margin expansion [10] - Tangible book value per share rose to $40.37, an increase of $4.86 or nearly 14% year-over-year [13] Business Line Data and Key Metrics Changes - Gross loan balances decreased by $3.5 million compared to the December quarter but increased by $252 million year-over-year, reflecting almost 7% growth [11] - Deposit balances increased by approximately $51 million in the third quarter and rose by $275 million or about 7% year-over-year [11] - Nonperforming loans (NPLs) increased to $22 million, up $14 million from the previous quarter, totaling 0.55% of gross loans [14] Market Data and Key Metrics Changes - The agricultural segment showed signs of stress with farmers facing income pressures from declining commodity prices and higher input costs [21] - The company noted a shift in crop planning strategies among farmers, with a decline in corn acreage in favor of soybeans and rice due to market conditions [22] Company Strategy and Development Direction - The company is focusing on enhancing customer experience and business development through a newly created Chief Banking Officer position [41] - There are ongoing evaluations for performance improvement initiatives aimed at meeting customer needs more effectively [40] - The company remains open to M&A opportunities but anticipates a need for market stabilization before pursuing significant transactions [43] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continuing positive trends in earnings and profitability through fiscal year 2025 [38] - The company is proactively addressing potential credit quality issues, particularly in the agricultural sector, by adjusting its allowance for credit losses [25][38] - Management acknowledged the potential for economic uncertainty impacting credit losses and reserves in future quarters [38] Other Important Information - The company has seen strong deposit growth primarily from core CDs, which have been renewed at lower rates, benefiting the net interest margin [12] - The allowance for credit losses was $54.9 million or 1.37% of gross loans, reflecting a slight increase from the previous quarter [36] Q&A Session Summary Question: What specifics can you provide on CDs rolling off and their replacement rates? - The company has about $215 million in CDs rolling off at a rate of 4.25%, to be replaced by current renewal rates averaging around 4.10% [48] Question: Are CDs the primary source of growth for funding in the coming months? - CDs are expected to increase as a percentage of the portfolio, especially as non-maturity deposit accounts roll off [51] Question: How are tariffs affecting commodity exports? - Management indicated that effective tariffs would negatively impact prices, but government price supports would mitigate exposure [54] Question: Can you provide insights on the net interest margin and renewal rates? - The run rate for net interest margin is around 3.40%, with renewal rates averaging between 7.25% to 7.50% [60][62] Question: What is the outlook on credit quality and borrower stress? - There are signs of stress among lower-end consumers and small businesses, but no broad-based deterioration is observed in the commercial real estate portfolio [72][74]

分组1 - Southern Missouri Bancorp (SMBC) reported quarterly earnings of $1.39 per share, exceeding the Zacks Consensus Estimate of $1.31 per share, and up from $0.99 per share a year ago, representing an earnings surprise of 6.11% [1][2] - The company achieved revenues of $46.15 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.50%, compared to $40.09 million in the same quarter last year [2] - Over the last four quarters, Southern Missouri Bancorp has exceeded consensus EPS estimates three times and topped consensus revenue estimates four times [2] 分组2 - The stock has underperformed the market, losing about 14.2% since the beginning of the year, while the S&P 500 declined by 10.2% [3] - The company's earnings outlook is mixed, with a current Zacks Rank of 3 (Hold), indicating expected performance in line with the market in the near future [6] - The current consensus EPS estimate for the upcoming quarter is $1.29 on revenues of $45.86 million, and for the current fiscal year, it is $5.06 on revenues of $179.72 million [7] 分组3 - The Financial - Savings and Loan industry, to which Southern Missouri Bancorp belongs, is currently in the top 30% of Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]