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]

Financial Performance - Preliminary net income for Q3 fiscal 2025 was $15.7 million, an increase of $4.4 million or 38.7% year-over-year, resulting in earnings per diluted share of $1.39, up $0.40 or 40.4% from the same quarter last year[1][2]. - Annualized return on average assets (ROA) was 1.27% and return on average common equity (ROE) was 12.1%, compared to 0.99% and 9.5% respectively in the same quarter last year[2]. - Noninterest income for the three-month period ended March 31, 2025, was $6.7 million, an increase of $1.1 million, or 19.4%, year-over-year[20]. - Net income available to common shareholders increased to $15,612,000 in Q1 2025, up from $14,592,000 in Q4 2024, representing an increase of 7%[27]. - Basic earnings per common share for Q1 2025 was $1.39, up from $1.30 in Q4 2024, an increase of 6.9%[27]. Asset and Liability Management - Total assets reached $5.0 billion, reflecting an increase of $372.2 million or 8.1% compared to June 30, 2024[6]. - Total liabilities were $4.4 billion, an increase of $332.1 million or 8.1% compared to June 30, 2024[14]. - Total deposits reached $4.3 billion as of March 31, 2025, an increase of $318.3 million, or 8.1%, compared to June 30, 2024[15]. - Total assets increased to $4,976,496 thousand as of March 31, 2025, up from $4,907,674 thousand at December 31, 2024, representing a growth of 1.4%[26]. - Total liabilities increased to $4,447,706 thousand from $4,395,303 thousand, reflecting a growth of 1.2%[26]. Interest Income and Margin - Net interest margin for the quarter was 3.39%, up from 3.15% year-over-year, with net interest income increasing by $5.0 million or 14.4% compared to the same quarter last year[2]. - Net interest income for the three-month period ended March 31, 2025, was $39.5 million, an increase of $5.0 million, or 14.4%, year-over-year[17]. - The net interest margin expanded by 24 basis points to 3.39% compared to the same period last year, driven by a 16 basis point increase in yield on interest-earning assets[17]. - Total interest income for Q1 2025 was $69,925,000, an increase of 0.72% from $69,424,000 in Q4 2024[27]. - Net interest income rose to $39,479,000 in Q1 2025, compared to $38,143,000 in Q4 2024, reflecting a growth of 3.5%[27]. Credit Quality - Nonperforming loans (NPL) were $22.0 million or 0.55% of gross loans, up from $6.7 million or 0.17% at June 30, 2024[11]. - The allowance for credit losses (ACL) totaled $54.9 million, representing 1.37% of gross loans, compared to 1.36% at June 30, 2024[12]. - The provision for credit losses (PCL) was $932,000 for the three-month period ended March 31, 2025, compared to $900,000 in the same period last year[19]. - Nonperforming loans rose significantly to $21,970 thousand from $8,309 thousand in the previous quarter, reflecting an increase of 164.5%[26]. - Total nonperforming assets increased to $23,801 thousand, up from $10,769 thousand, marking a rise of 120.5%[26]. Shareholder Returns - The Board declared a quarterly cash dividend of $0.23 per common share, marking the 124th consecutive quarterly dividend[4]. - Dividends per common share remained stable at $0.23 for both Q1 2025 and Q4 2024[27]. - Stockholders' equity was $528.8 million at March 31, 2025, up $40.0 million, or 8.2%, from June 30, 2024[16]. - Book value per common share increased to $47.01 from $45.62, representing a growth of 3.1%[26]. Efficiency and Cost Management - Noninterest expense for the three-month period ended March 31, 2025, was $25.4 million, an increase of $342,000, or 1.4%, compared to the same period last year[21]. - The efficiency ratio improved to 55.1% for the three-month period ended March 31, 2025, down from 61.2% in the same period last year[22]. - The efficiency ratio improved to 55.1% in Q1 2025, down from 55.3% in Q4 2024, indicating better cost management[28]. Forward-Looking Statements - Forward-looking statements indicate potential risks including economic conditions, interest rate fluctuations, and integration challenges from recent acquisitions[24].

Core Viewpoint - Southern Missouri Bancorp, Inc. reported a preliminary net income of $15.7 million for the third quarter of fiscal 2025, reflecting a 38.7% increase compared to the same period last year, driven by higher net interest income and noninterest income [1] Financial Performance - Preliminary net income per fully diluted common share was $1.39, up from $0.99 in the same quarter of the previous fiscal year, marking a $0.40 increase [1] - Net interest income for the quarter was $39.5 million, an increase of $5.0 million or 14.4% year-over-year, attributed to a 6.2% rise in average interest-earning assets and a 24 basis point increase in net interest margin [17] - Noninterest income rose to $6.7 million, a 19.4% increase compared to the same quarter last year, primarily due to losses on the sale of available-for-sale securities [20] Balance Sheet Highlights - Total assets reached $5.0 billion, an increase of $372.2 million or 8.1% from June 30, 2024, driven by growth in net loans receivable, cash equivalents, and available-for-sale securities [5] - Total liabilities were $4.4 billion, reflecting an increase of $332.1 million or 8.1% compared to June 30, 2024, mainly due to higher deposits [13] - Deposits increased to $4.3 billion, up $318.3 million or 8.1% from June 30, 2024, with significant growth in certificates of deposit and savings accounts [14] Loan and Deposit Trends - Gross loans were $4.0 billion, a 4.5% increase from June 30, 2024, with notable growth in various loan categories including residential and commercial real estate [8] - Cash equivalents and time deposits totaled $227.1 million, a significant increase of 270.0% compared to June 30, 2024, driven by strong deposit generation [7] Nonperforming Loans and Credit Losses - Nonperforming loans (NPL) were $22.0 million, or 0.55% of gross loans, up from $6.7 million or 0.17% at June 30, 2024, primarily due to new commercial relationships and specific loans becoming nonperforming [11] - The allowance for credit losses (ACL) was $54.9 million, representing 1.37% of gross loans, with a provision for credit loss of $932,000 recorded for the quarter [12][19] Dividend Declaration - The Board of Directors declared a quarterly cash dividend of $0.23 per common share, marking the 124th consecutive quarterly dividend, payable on May 30, 2025 [3]

Financial Data and Key Metrics Changes - Earnings per share for the quarter was $1.39 diluted, up $0.09 from the linked December and up $0.40 from the previous March [5] - 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 [5] - 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 [6][7] - Tangible book value per share increased to $40.37, up $4.86 or almost 14% year over year [8] Business Line Data and Key Metrics Changes - Gross loan balances decreased by $3.5 million compared to December but increased by $252 million year over year, reflecting a growth of almost 7% [6][7] - Deposit balances increased by approximately $51 million in the third quarter and by $275 million or about 7% year over year [7] - Non-interest income decreased by 2.9% compared to the linked quarter, primarily due to lower deposit account fees [20] Market Data and Key Metrics Changes - Adversely classified loans increased to $49 million or 1.2% of total loans, up $9 million during the quarter [9] - Non-performing loans (NPLs) were $22 million, an increase of $14 million compared to the last quarter, totaling 0.55% of gross loans [10] - Total delinquent loans were $24 million, up $11 million from December [11] Company Strategy and Development Direction - The company is focusing on improving credit quality and has redoubled efforts to address recent trends in problem loans [12] - A new qualitative factor in the calculation for allowance for credit losses has been implemented to reserve more for agricultural-related exposure [16] - The company is optimistic about achieving at least mid-single-digit loan growth for the fiscal year, supported by a strong pipeline [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continuing positive trends in earnings and profitability through fiscal year 2025 [25] - The company is monitoring economic conditions closely, particularly in light of potential changes in economic policy that could affect credit losses [24] - Management noted that while there are signs of stress among consumers and small businesses, broader trends in commercial real estate remain stable [50] Other Important Information - The company has initiated performance improvement initiatives to enhance customer service and operational efficiency [26] - There are ongoing discussions regarding potential mergers and acquisitions, although no immediate opportunities are anticipated due to market volatility [26] Q&A Session Summary Question: Inquiry about margin specifics and CD roll-off rates - Management indicated that approximately $215 million in CDs are rolling off at rates averaging around 4.25% over the next three months, with a total of $1.2 billion renewing at an average rate of 4.26% over the next year [30] Question: Assessment of agricultural commodities and tariffs - Management noted limited visibility on the impact of tariffs but indicated that government price supports would kick in if prices remain low [32] Question: Discussion on net interest margin and renewal rates - Management confirmed that the reported net interest margin was around 3.4%, with renewal rates for loans averaging between 7.25% and 7.50% [39] Question: Concerns regarding non-performing loans and collateral - Management acknowledged the increase in NPLs, particularly related to medical lease properties, and indicated that charge-offs are anticipated [41] Question: Capital priorities and potential share buybacks - Management stated that share repurchases would depend on stock price and market conditions, with a target tangible common equity ratio of 8% to 9% [45]

Core Viewpoint - Southern Missouri Bancorp, Inc. has appointed Justin G. Cox as the Chief Banking Officer, effective May 1, 2025, to enhance customer engagement and organizational profitability [1][2]. Group 1: Leadership Changes - Justin G. Cox has been appointed to the newly-created position of Chief Banking Officer, effective May 1, 2025 [1]. - The decision to create this role follows recommendations from a community banking consulting firm aimed at improving customer engagement and team member satisfaction [2]. Group 2: Background of Justin G. Cox - Justin G. Cox has 22 years of experience in the banking industry, with 15 years at Southern Bank, where he has held various leadership roles [4]. - He has successfully led the west region team, contributing to the growth of the loan and deposit business [3]. Group 3: Company Overview - Southern Missouri Bancorp, Inc. operates Southern Bank, which has a total asset base of approximately $4.9 billion, including loans of $4.0 billion and deposits of $4.2 billion [5]. - Southern Bank operates 67 locations across Missouri, Arkansas, Illinois, and Kansas [5].

Financial Performance - Net income for the first six months of fiscal 2025 was $27.1 million, reflecting a 7.0% increase compared to the same period of the prior fiscal year [189]. - Net income for the three-month period ended December 31, 2024, was $14.7 million, an increase of $2.5 million, or 20.2%, compared to the same period last year [219]. - Net income for the six-month period ended December 31, 2024, was $27.1 million, an increase of $1.8 million, or 7.0% compared to the same period of the prior fiscal year [228]. - Fully-diluted net income per share available to common shareholders was $2.40, an increase of $0.17, or 7.6% compared to $2.23 for the same period of the prior fiscal year [229]. - Fully-diluted net income per share available to common shareholders was $1.30, up $0.23, or 21.5%, compared to the same quarter a year ago [220]. Asset Growth - Total assets increased by $303.4 million during the first six months of fiscal 2025, primarily due to a $175.0 million increase in net loans receivable [189]. - Total assets increased to $4.9 billion at December 31, 2024, reflecting a growth of $303.4 million, or 6.6%, compared to June 30, 2024 [198]. - Cash and cash equivalents rose to $145.8 million, an increase of $84.9 million, or 139.4%, from June 30, 2024, driven by strong deposit generation [199]. - Net loans, after accounting for the allowance for credit losses, reached $4.0 billion, up $175.0 million, or 4.6%, compared to June 30, 2024 [200]. - Deposits totaled $4.2 billion, an increase of $267.6 million, or 6.8%, from June 30, 2024, with significant growth in certificates of deposit and savings accounts [202]. Income and Expenses - Net interest income increased by $4.9 million, or 7.0%, while provision for credit losses rose by $1.3 million, or 71.7% [189]. - Noninterest income for the six-month period ended December 31, 2024, was $14.0 million, an increase of $2.5 million, or 22.2% [194]. - Noninterest expense increased by $3.2 million, or 6.6%, primarily due to higher compensation and benefits, legal and professional fees, and occupancy expenses [195]. - Noninterest income for the three-month period ended December 31, 2024, was $6.9 million, an increase of $1.2 million, or 21.7%, compared to the same period last year [224]. - Noninterest expense for the three-month period ended December 31, 2024, was $24.9 million, an increase of $1.0 million, or 4.3%, compared to the same period last year [225]. Credit Quality - Provision for credit losses was $932,000 for the three-month period ended December 31, 2024, compared to $900,000 in the same period last year [223]. - The allowance for credit losses at December 31, 2024, totaled $54.7 million, representing 1.36% of gross loans [240]. - The Company recorded net charge-offs of two basis points (annualized) during the current period, compared to seven basis points during the same period of the prior fiscal year [240]. - Total past due loans increased to $13.4 million at December 31, 2024, up from $9.2 million at June 30, 2024, primarily due to loans collateralized by 1-4 family real estate and agricultural real estate [245]. - Nonperforming assets totaled $10.8 million as of December 31, 2024, compared to $10.6 million at June 30, 2024, and $9.8 million at December 31, 2023 [248]. Capital and Liquidity - Stockholders' equity increased to $512.4 million, a rise of $23.6 million, or 4.8%, compared to June 30, 2024, primarily due to retained earnings [205]. - Total capital to risk-weighted assets ratio for the Company was 13.29% as of December 31, 2024, exceeding the required minimum of 8.00% [257]. - Tier 1 capital to average assets ratio for the Company was 10.42% as of December 31, 2024, above the required minimum of 4.00% [257]. - The Company believes its liquid resources will be sufficient to meet its liquidity needs [250]. Loan Origination and Portfolio - The Company originated $67.8 million in fixed-rate 1-to-4 family residential loans during the first six months of fiscal year 2025, compared to $62.5 million in the same period of the prior fiscal year, representing an increase of 4.2% [262]. - The fixed-rate 1-4 family residential loan portfolio was $631.3 million at December 31, 2024, up from $606.5 million at December 31, 2023, indicating a growth of 4.1% [262]. - The Company originated $197.5 million in fixed-rate commercial and commercial real estate loans during the six-month period ended December 31, 2024, compared to $151.4 million in the same period of the prior fiscal year, reflecting a significant increase of 30.5% [262]. - Adjustable-rate home equity lines of credit increased to $82.1 million at December 31, 2024, compared to $69.8 million at December 31, 2023, marking a growth of 17.0% [262]. Interest Rate Management - The interest rate spread improved to 2.79% for the three-month period ended December 31, 2024, compared to 2.69% for the same period in the prior fiscal year [207]. - The net interest margin increased to 3.36% for the three-month period ended December 31, 2024, up from 3.25% for the same period in the prior fiscal year [207]. - The average balance of interest-earning assets increased by 6.7%, and the net interest margin improved by 11 basis points, from 3.25% to 3.36% [221]. - The Company has focused on increasing originations of higher-yielding commercial loans while managing interest rate risk through various strategies [261]. - The Asset/Liability Committee meets monthly to review interest rate risk and trends, ensuring effective management of the Company's asset and liability policies [268].

Financial Data and Key Metrics Changes - Earnings per share for Q2 2025 was $1.30, an increase of $0.20 from the previous quarter and $0.23 from the same quarter last year [5] - Net interest margin for the quarter was 3.36%, up from 3.25% year-over-year and relatively flat compared to Q1 2025 [5] - Net interest income increased by 4% quarter-over-quarter and approximately 10.5% year-over-year [5][6] - Deposit balances increased by about $170 million in Q2 and $225 million or about 5.5% compared to the previous year [6] Business Line Data and Key Metrics Changes - Gross loan balances increased by over $60 million during Q2 and were up $295 million or just under 8% year-over-year [6] - Non-performing loan balances slightly increased to $8 million, representing 21 basis points of total loans, up 5 basis points from the prior year [8] - Total delinquent loans remained flat at $13 million, with net charge-offs at a benign 2 basis points annualized [9] Market Data and Key Metrics Changes - Strong deposit growth was attributed to seasonal inflows from agricultural customers and public unit depositors [6] - Agricultural real estate loan balances were stable, while ag production and equipment loan balances decreased by $12 million quarter-over-quarter [10] - The bank experienced growth in construction, commercial and industrial, and residential real estate loans, particularly in the South region and new markets [12] Company Strategy and Development Direction - The company is optimistic about the remainder of fiscal 2025, citing improving yield curve slope and strong business activity in its markets [20] - A performance improvement initiative is underway to enhance customer service and operational efficiency, with full adoption expected over several years [19][20] - The company is expanding its talent pool, particularly in newer markets, to support growth and service improvements [20] Management's Comments on Operating Environment and Future Outlook - Management expects some modest increases in problem loans and net charge-offs but believes they will remain manageable and below industry averages [9] - The effective tax rate for Q2 was elevated due to adjustments related to merger activity, but it is expected to return to normal ranges in the second half of the fiscal year [18][19] - Management anticipates stable to slightly higher loan balances in the upcoming quarter, with potential for mid to higher single-digit growth by the end of the fiscal year [39] Other Important Information - The company’s tangible book value per share increased by $4.26 or 12% over the last 12 months, reaching $38.91 [7] - Non-interest income decreased by 4.3% compared to the linked quarter, primarily due to reduced gains on loan sales and lower interchange income [16] - The provision for credit losses was $932,000, down from $2.2 million in the previous quarter, reflecting a more stable credit environment [17] Q&A Session Summary Question: What are the trends in deposit competition across different markets? - Management noted a mixed bag in deposit competition, with a decrease in the fight for funds compared to the previous year, but some outliers with high rates still exist [25][26] Question: Can you provide more details on the decision to buy securities? - The company took advantage of higher market rates to purchase about $50 million in securities, primarily in variable and fixed-rate options [27][30] Question: What should be expected regarding expenses in the coming quarters? - Management indicated that seasonal compensation adjustments will occur in March, but overall expenses are expected to remain stable [31] Question: What is the outlook for loan growth in the upcoming quarters? - Management anticipates stable to slightly higher loan balances, with potential for mid to higher single-digit growth depending on agricultural planting conditions [39] Question: How does the company view its current concentration in commercial real estate? - The company’s internal limit for commercial real estate concentration is higher than current levels, and they expect to maintain a stable ratio moving forward [49]

Core Viewpoint - Southern Missouri Bancorp (SMBC) reported quarterly earnings of $1.30 per share, exceeding the Zacks Consensus Estimate of $1.23 per share, and showing an increase from $1.07 per share a year ago, indicating a positive earnings surprise of 5.69% [1][2] Group 1: Earnings Performance - The company has surpassed consensus EPS estimates three times over the last four quarters [2] - For the quarter ended December 2024, SMBC posted revenues of $45.01 million, which is 4.16% above the Zacks Consensus Estimate and an increase from $40.13 million year-over-year [2] - The company has topped consensus revenue estimates four times over the last four quarters [2] Group 2: Stock Performance and Outlook - SMBC shares have declined approximately 0.3% since the beginning of the year, while the S&P 500 has gained 3.7% [3] - The current consensus EPS estimate for the upcoming quarter is $1.20 on revenues of $43.75 million, and for the current fiscal year, it is $4.75 on revenues of $175.77 million [7] Group 3: Industry Context - The Financial - Savings and Loan industry, to which SMBC belongs, is currently ranked in the top 11% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact SMBC's stock performance [5][6]