Southern Missouri Bancorp(US:SMBC)2025-10-23 15:30Financial Data and Key Metrics Changes - The diluted EPS for the current quarter was $1.38, down $0.01 from the linked June 2025 quarter, but up $0.28 from the September quarter a year ago [4] - Net interest margin for the quarter was 3.57%, up from 3.47% for the fourth quarter of fiscal 2025 and from 3.34% in the year-ago quarter [5][6] - Reported non-interest income was down by 9.7% or $707,000 compared to the linked quarter, but was more than offset by lower non-interest expense of $925,000 or a 3.6% decrease quarter over quarter [5][21] Business Line Data and Key Metrics Changes - Gross loan balances increased by $91 million or 2.2% during the first quarter, which would be 8.8% annualized, with significant growth in non-owner occupied commercial real estate, one-to-four family residential, commercial & industrial, and multifamily loans [6][7] - Deposit balances were relatively flat compared to the linked quarter, but up $240 million or 5.9% over the last 12 months [7][8] - The allowance for credit losses at September 30, 2025, totaled $52.1 million, representing 1.24% of gross loans and 200% of non-performing loans [23] Market Data and Key Metrics Changes - The company experienced strong growth in its east region, particularly in agricultural activity, while the south region also showed good growth [7] - The loan pipeline anticipated to fund in the next 90 days remains strong, totaling about $195 million at September 30 [7] Company Strategy and Development Direction - The company is optimistic about achieving mid-single-digit loan growth in the fiscal year despite expectations of a slowdown in loan growth due to seasonal factors [7][20] - The management highlighted a modest uptick in M&A discussions, indicating a potential for attractive opportunities in the market [26][27] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's performance in the new fiscal year, citing good momentum on pre-provision net revenue [3] - The company is focused on improving credit quality and has been proactive in working with borrowers to mitigate risks [13][17] Other Important Information - The company repurchased just over 8,000 shares at an average price of just under $55 for a total of $447,000, with plans for more buybacks given current pricing [9][48] - The company has seen a general increase in agricultural production line utilization due to increased input costs, impacting the agricultural loan portfolio [15][16] Q&A Session Summary Question: Outlook for provision expense and charge-offs - Management expects charge-off activity to drop from the levels of the last two quarters, with current delinquency levels trending back to historical ranges [32][33] Question: Bank's rate sensitivity and margin expansion - Management indicated that the bank remains liability-sensitive but expects to benefit from net interest income growth with potential rate cuts [34][35] Question: Update on loan pipeline and growth expectations - The company has a consistent pipeline and anticipates mid-single-digit growth for the fiscal year, with seasonal slowdowns expected [41][43] Question: Buyback activity and M&A discussions - Management anticipates being more active in buybacks due to current pricing and is exploring M&A opportunities, ideally targeting banks with assets around $1 billion [48][49]