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 quarter, but up $0.28 from the same quarter a year ago [5] - Net interest margin for the quarter was 3.57%, up from 3.47% in the linked quarter and from 3.34% in the year-ago quarter [7] - Non-interest income decreased by 9.7% or $707,000 compared to the linked quarter, but was offset by a 3.6% decrease in non-interest expense [6][25] Business Line Data and Key Metrics Changes - Gross loan balances increased by $91 million or 2.2% during the first quarter, with a year-over-year increase of $225 million or 5.7% [8] - The growth in loans was led by non-owner occupied commercial real estate, one to four family residential, commercial and industrial, and multifamily loans [8] - Deposit balances were relatively flat compared to the linked quarter but increased by $240 million or 5.9% over the last twelve months [9] Market Data and Key Metrics Changes - The company experienced strong growth in its East Region, particularly in agricultural activity, with the South Region also showing good growth [8] - The loan pipeline anticipated to fund in the next ninety days remains strong, totaling about $195 million as of September 30 [8] 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 [9] - The management is focusing on improving credit quality and has been proactive in working with borrowers to assess their positions and plan for restructuring where necessary [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the performance in the new fiscal year, citing good momentum on pre-provision net revenue [5] - The company is monitoring economic conditions closely and has increased reserves for watch list agricultural borrowers due to prolonged weakness in the agricultural segment [20] Other Important Information - Tangible book value increased to $43.35 per share, up $5.9 or 13.3% over the last twelve months, attributed to earnings retention and improvements in the bank's unrealized loss in the investment portfolio [10] - The company repurchased just over 8,000 shares at an average price of just under $55, totaling $447,000 [10] 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, indicating a return to more historical delinquency levels [36][37] Question: Bank's rate sensitivity and margin expansion - The bank remains overall liability sensitive but anticipates a net benefit of 1% to 3% net interest income per 100 basis points of rate cuts [39] Question: Update on loan pipeline and growth expectations - The loan pipeline remains consistent, with expectations for mid-single-digit growth for the fiscal year, though seasonal slowdowns are anticipated [47] Question: Buyback activity and M&A discussions - Management anticipates being more aggressive in share buybacks given current pricing and has ongoing discussions regarding potential M&A opportunities [53]