Southern Missouri Bancorp, Inc. Q3 FY2026 earnings call

Highlights from Q3: Earnings down slightly but ROA above 140 in last two quarters. Loan growth: $96M increase in Q3, YTD loan growth 5.4%. Deposit growth: $33M in Q3, YOY $80M. Credit quality: Adverse and classified loans improved, non-performing assets increased but manageable. Ag segment: Balances up, producers managing costs. NIM details: Improvement driven by cost of funds, loan yields flat. Non-interest income: Up due to various items. Non-interest expense: Up due to compensation, other expenses. ACL: Increased for pooled loans, especially ag.

Loan balances: Gross loan balances increased by $96 million in the third quarter, with real estate collateralized loans up, except construction and land development; ag real estate balances $279 million (6% of gross loans), ag production and equipment loans $204 million (5% of gross loans). Deposit balances: Increased by about $33 million in Q3, up $80 million YOY. Net interest income: Up just under 1% QoQ and over 9% YOY due to average earning asset balances and NIM expansion. NIM: 3.67% in Q3, up from prior periods.

Forward guidance: Optimistic about continuing trends into Q4. Anticipate muted loan growth in Q4 due to payoffs, but YTD loan growth 5.4% puts us in mid-single-digit range. Effective tax rate expected in 19.5%-20% range. Expect NIM limited expansion in Q4, but benefits in new fiscal year. Expect improvement in non-performer numbers in current and following quarters.

Risks: Economic conditions could impact problem assets. Ag sector challenges with depressed prices. NIM pressure if no further rate cuts. CRE concentration ratios increased.

Question and Answer: Q: Loan-to-deposit ratio and deposit gathering?

A: Deposit growth is key, focus on low-cost deposits.

Q: Capital allocation and buybacks?

A: Buyback activity affected by market volatility, price determinant.

Q: Pipeline strength?

A: Increased due to staff performance.

Q: Income outlook and fee income?

A: Tax credit gains not core, focus on wealth management.

Q: Margin trend?

A: Limited NIM expansion in Q4, benefits in new fiscal year.

Q: Non-performer resolutions?

A: Expect improvement in current and following quarters.

Q: Expenses?

A: Current quarter run rate good for forward looking.