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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