Southern Missouri Bancorp(US:SMBC)2021-07-28 03:25Financial Data and Key Metrics Changes - The company earned $1.53 diluted in the June quarter, up $0.26 from the linked March quarter and up $0.77 from the $0.76 diluted earned in the June 2020 quarter [15] - Net interest margin in June was 3.74%, which included about 7 basis points from fair value accretion on acquired loans [16] - Noninterest income was up $0.5 million compared to the June quarter a year ago, driven by improved loan servicing income [20] - Noninterest expenses were down $1.3 million compared to the year-ago quarter, primarily due to the absence of M&A charges [21] Business Line Data and Key Metrics Changes - Agricultural production loans were up nearly $15 million in the quarter, while ag real estate balances were down $1.5 million for the quarter [11] - Loan growth was stronger in the current quarter, with gross loan balances up $63 million in the June quarter [25] - The largest category of growth in the quarter was multifamily, which grew $48 million [31] Market Data and Key Metrics Changes - The company reported a decline in nonperforming loans and past due loans, with past due loans totaling only $3.8 million, which is 18 basis points of total loans outstanding [9] - The allowance as a percentage of gross loans declined by 13 basis points to 1.49% at June 30 [27] Company Strategy and Development Direction - The company is optimistic about M&A opportunities and has had more in-depth discussions with several bids outstanding [35] - The outlook for the September quarter remains strong, with a loan pipeline of $141 million at June 30, which is about 60% higher than the same time last year [32] Management's Comments on Operating Environment and Future Outlook - Management expressed a positive outlook on credit quality and borrower performance, despite the uptick in COVID cases [6] - The company is budgeting for about 4% growth outside of PPP forgiveness, expecting growth to decline in the latter parts of the year [32] Other Important Information - The company completed a repurchase plan for 450,000 shares and announced a new plan for 445,000 shares [36] - The company has implemented various security protocols and training to protect against cyber threats [46] Q&A Session Summary Question: Loan pipeline mix - The loan pipeline remains similar to the previous quarter, with a lot of multifamily loans and a drop in residential loans [39] Question: Core margin expansion trend - Management is optimistic about near-term margin trends, expecting cash to make up a lower percentage of average earning assets [41] Question: Provision and reserve level - The current reserve level is appropriate based on modeled economic conditions, with no specific target in mind [43] Question: Cybersecurity measures - The company conducts quarterly testing and has various security protocols in place to protect against cyber threats [46] Question: Mobile banking app success - There has been significant adoption of the mobile banking app, with increasing numbers of mobile deposits and utilization [47]