Southern Missouri Bancorp(SMBC) - 2025 Q1 - Quarterly Report

Financial Performance - Net income for the first three months of fiscal 2025 was $12.5 million, a decrease of$ 693,000, or 5.3% compared to the same period of the prior fiscal year[195]. - Net interest income increased by $1.3 million, or 3.6%, while provision for credit losses increased by$ 1.3 million, or 139.9% compared to the same period last year[195]. - Noninterest income for the three-month period ended September 30, 2024, was $7.2 million, an increase of$ 1.3 million, or 22.6% compared to the same period of the prior fiscal year[199]. - Noninterest expense for the three-month period ended September 30, 2024, was $25.8 million, an increase of$ 2.1 million, or 9.0% compared to the same period of the prior fiscal year[200]. - Basic and fully-diluted net income per share was $1.10, down from$ 1.16, representing a decrease of $0.06 or 5.2%[215]. Asset Growth - Total assets increased by$ 124.9 million during the first three months of fiscal 2025, primarily due to a $114.8 million increase in loans, net of the allowance for credit losses[195]. - Total assets increased to$ 4.7 billion at September 30, 2024, reflecting a growth of $124.9 million, or 2.7%, compared to June 30, 2024[203]. - Cash equivalents rose to$ 75.3 million, an increase of $14.4 million, or 23.7%, from June 30, 2024[204]. - Net loans, after accounting for the allowance for credit losses, reached$ 3.9 billion, up by $114.8 million, or 3.0%, compared to June 30, 2024[205]. - Deposits totaled$ 4.0 billion, an increase of $97.1 million, or 2.5%, from June 30, 2024, with significant growth in certificates of deposit and savings accounts[207]. Credit Quality - Provision for credit losses (PCL) was$ 2.2 million, up from $900,000 in the same period of the prior fiscal year[219]. - The allowance for credit losses (ACL) at September 30, 2024, totaled$ 54.4 million, representing 1.37% of gross loans[224]. - The Company recorded net charge-offs of 0.01% (annualized) during the current period, compared to 0.03% (annualized) for the same period of the prior fiscal year[227]. - Total past due loans increased to $13.4 million at September 30, 2024, up from$ 9.2 million at June 30, 2024, and $28.4 million at September 30, 2023[231]. - Nonperforming loans totaled$ 8.2 million as of September 30, 2024, compared to $6.68 million at June 30, 2024, and$ 5.74 million at September 30, 2023[233]. Capital Ratios - Total capital to risk-weighted assets ratio was 13.12% as of September 30, 2024, exceeding the required minimum of 8.00%[243]. - Tier 1 capital to risk-weighted assets ratio was 12.53% as of September 30, 2024, above the required minimum of 8.00%[243]. - Common equity Tier 1 capital to risk-weighted assets ratio was 9.92% as of September 30, 2024, surpassing the required minimum of 4.00%[243]. - The Company had $534.5 million in total capital as of September 30, 2024, which is well above the capital adequacy requirements[243]. Loan Production and Portfolio - For the first three months of fiscal year 2025, fixed-rate 1-to-4 family residential loan production was$ 31.1 million, down from $36.4 million in the same period of the prior fiscal year[248]. - The fixed-rate 1-4 family residential loan portfolio increased to$ 624.1 million as of September 30, 2024, compared to $599.6 million a year earlier[248]. - The Company originated$ 95.2 million in fixed-rate commercial and commercial real estate loans during the three-month period ended September 30, 2024, compared to $60.8 million in the same period of the prior fiscal year[248]. - Adjustable-rate home equity lines of credit rose to$ 77.4 million as of September 30, 2024, up from $67.0 million at the same time in 2023[248]. Investment Portfolio - The Company's investment portfolio had a weighted-average life of 4.8 years as of September 30, 2024, down from 5.2 years a year earlier[248]. - The effective duration of the investment portfolio declined to 2.4% per 100 basis points movement in market rates as of September 30, 2024, compared to 2.7% at September 30, 2023[248]. - The notional amount of pay-fixed/receive-floating interest rate swaps increased to$ 50 million at September 30, 2024, compared to $40 million at June 30, 2024[254]. - The Company’s net portfolio value (NPV) decreased by 20% with a +300 basis point increase in rates, reflecting a change of$ (103,891) thousand[250]. Strategic Initiatives - The company plans to continue growing assets through loan origination and investment securities purchases, primarily funded by deposits from retail and commercial clients[202]. - Management's asset/liability strategy includes increasing originations of commercial loans, which typically provide higher yields and shorter repricing periods[247]. - The Company continues to focus on customer retention and satisfaction to increase less rate-sensitive deposit accounts[248].