Southern Missouri Bancorp(US:SMBC)2025-07-24 15:30Financial 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]