The following is a summary of the Southern Missouri Bancorp, Inc. (SMBC) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Southern Missouri Bancorp reported a net interest margin of 3.25% for the quarter, influenced by 14 basis points gain from fair value discount accretion on acquired loan portfolios.

• The bank's cost of deposits surged by 42 basis points to 2.61%, leading to pressure on the net interest margin.

• Noninterest income rose by nearly 16% YoY and 8% QoQ, excluding a trade loss of $682,000.

• Noninterest expense grew by 35.3% YoY and 0.6% QoQ.

• The quarter saw a diluted earnings of $1.07 per share, down $0.09 from the previous quarter.

• Excluding the $682,000 loss, the bank would have recorded net income of $12.7 million, earnings per diluted share of $1.12, and a return on average assets of 1.12%.

• The bank's book value per share increased by 13.6% over the last 12 months to $41.66 despite high short-term rates.

• Despite a 2.6% QoQ decrease, net interest income grew 22.1% YoY due to larger balance sheet and solid deposit and loan growth.

Business Progress:

• The bank plans to mitigate the factors affecting the net margin with potential actions including rate cuts by the FOMC and changes in deposit competition.

• An increase in staffing levels is expected in the next quarter.

• The bank's credit loss provisioning for the quarter was $900,000, consistent with the previous quarter.

• Southern Missouri Bancorp reported strong asset quality with adversely classified assets at $39 million or just over 1% of total loans.

• The bank saw a gross loan balance growth of $32 million in Q2 and deposit balances surged by $154 million in Q2, attributed mainly to the Citizens merger and significant deposit growth.

• Loans to the agricultural sector remain healthy despite droughts and lower corn prices.

• No major net loan growth is expected in the next quarter due to winter seasonality.

• A loan pipeline of $141 million was reported at the end of the quarter.

• The bank is planning to expand within their metropolitan markets and possibly recruit community bankers in new areas. No further merger activities are currently being pursued.

More details: Southern Missouri Bancorp IR

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