Southern Missouri Bancorp (NasdaqGM:SMBC) Q2 2026 Earnings call January 22, 2026 10:30 AM ET Company ParticipantsMatt Olney - Managing DirectorCharles Driscoll - Equity Research AssociateNathan Race - Managing DirectorGreg Steffens - Chairman and CEOStefan Chkautovich - CFOMatthew T. Funke - President and Chief Administrative OfficerOperatorThe conference call will now start, and I'll hand it over to our host, Chief Financial Officer of Southern Missouri Bancorp, Stephen. Please go ahead.Stefan ChkautovichT ...

Core Insights - KeyCorp reported better-than-expected earnings for Q3, with adjusted earnings of 41 cents per share, surpassing market estimates of 38 cents per share [1] - Quarterly sales reached $1.895 billion, exceeding expectations of $1.881 billion [1] Financial Performance - Adjusted revenue increased by 17% year-over-year [2] - The company achieved over 1,000 basis points of operating leverage in the quarter [2] - Revenue growth was attributed to net interest income tailwinds and an 8% increase in adjusted noninterest income, which outpaced expense growth [2] - Tangible book value per share grew by 4% sequentially and 14% year-over-year [2] Stock Performance - KeyCorp shares rose by 0.6%, trading at $16.88 following the earnings announcement [2] Analyst Ratings - Truist Securities analyst Brian Foran maintained a Hold rating and lowered the price target from $20 to $19 [5] - DA Davidson analyst Peter Winter maintained a Buy rating and reduced the price target from $22 to $21 [5]

Financial Data and Key Metrics Changes - The company reported a fully diluted EPS of $0.38, a 65% increase over the prior year [4] - Net income for the quarter was $0.38 per diluted share, up 65% over the prior year [8] - Return on average assets was 1.19% and return on average equity was 14.15% [9] - Net interest margin (NIM) was 3.1%, down slightly from the prior quarter [9] - The efficiency ratio improved to 52.79% [9] - Tangible book value per share increased by $0.42 to $11.23 [9] Business Line Data and Key Metrics Changes - Average loans increased by $205.3 million or 11.5% compared to Q1 2024 [5] - Average deposits grew by $166.6 million or 8.1% compared to the same quarter last year [5] - The loan pipeline remains robust and diversified, with expectations for high single-digit to low double-digit loan and deposit growth in Q2 [6] Market Data and Key Metrics Changes - The Florida economy is forecasted to grow steadily in 2025, with a growing labor force and low unemployment [5] - The company surpassed the $2 billion loan mark, achieving a significant milestone [8] Company Strategy and Development Direction - The company emphasizes relationship-driven organic growth and has onboarded additional senior bankers to support business lending and deposit production [6][29] - The strategic focus is on maintaining credit quality and carefully vetting new loan production amid economic uncertainties [4][29] - The company plans for disciplined expense control to improve operating leverage [29] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the economic environment, particularly in light of recent trade deal progress [4] - The company anticipates continued growth in loans and deposits, tempered by economic uncertainties related to trade policies [29] - The management team is focused on maintaining a strong balance sheet while returning capital to investors through dividends [6][28] Other Important Information - The Board of Directors declared a cash dividend of $0.10 per share, to be paid on June 5, 2025 [6] - Noninterest income was 16.3% of total revenue, consistent with prior quarters [25] Q&A Session Summary Question: What drove the deposit growth in the quarter? - Management noted positive growth in Correspondent Banking and business banking, contributing to balanced deposit growth [36] Question: What is the outlook for NIM given the current conditions? - Management expects NIM to be flat to slightly up, anticipating potential rate cuts that could benefit deposit costs [38][40] Question: What is the impact of specialty verticals on deposits? - New hires in various verticals are expected to enhance deposit growth, particularly in HOA and business banking [46][48] Question: How should the expense base be viewed moving forward? - The expense base is expected to gradually increase due to new hires and performance-based bonuses [50] Question: What is the focus regarding capital growth? - The focus remains on organic growth rather than buybacks, given solid growth prospects [52]