SMBC - Earnings call 1 2024 | Southern Missouri Bancorp, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning or good afternoon, and welcome to the Southern Missouri Bank Quarterly Earnings Conference Call. My name is Adam, and I'll be your operator for today. [Operator Instructions] I will now hand the call over to CFO, Stefan Chkautovich to begin. Stefan, please go ahead, and you are ready.

Stefan Chkautovich

Thank you, Adam. everyone. morning, Good Chkautovich, Stefan Southern Bancorp. Missouri This CFO is with Thank you us. joining for October to this quarterly information Monday, to of purpose review your earnings XXXX, questions. take call dated our The in is the and presented and release XX, data statements make forward-looking and regarding we today's may in contained the to We during cautionary you our call forward-looking certain statement statements refer press release. Matt Officer. on Steffens, our CEO; and Greg call Administrative Chairman Chief with Funke, today the and I'm joined President and with today some from will lead conversation Matt our recent most highlights quarter. off our

Matthew Funke

well Thank Funke. cost fees as show as noninterest environment, you, quarter Offsetting other accounts first our quarter, I'll pressure some expenses lower pressure funds mortgage with weighed and this and is operating Stefan, September of well relatively was results. good morning, at did the loans, some on Thanks pleased start of quarter. transaction in This the profitability everyone. to current merger-related our highlights But financial Matt the in costs is with us. results fiscal from from those. lower for this for we're lower year. on higher September as joining which tied of expense we as off reported Quarter-over-quarter,

ago EPS credit $X.XX was for challenges, September year quarter, but for losses due increase the in posted linked primarily $X.XX June report September Despite diluted figure bank from still provision $X.XX, an down in the XXXX. from EPS, the quarter. current from to to able XX.X% up diluted That larger the year-over-year quarter a was of the reduction

in average XX.X% was compared linked XX.X%. ago June the assets quarter ROE to X.XX% a XX.X% on on quarter. X.XX% return annualized X.X%, was while ROE and and average Those ROA annualized and same the year in ROA equity Our common return

we up of fiscal margin for X.XX% linked down 'XX, and for quarter interest X.XX% the was average was current to interest compared year XX% basis from and quarter income asset of reported the amount on but margin year-over-year was non-core the X.XX%, from down margin quarter. reported by reported as a Net items XXXX. had the compared down We similar the the ago balances. fourth year-over-year to September earning for quarter quarter-over-quarter impact linked our Net the in improved non-core from quarter, the period as the a of items X%

fund first the a million increased Deposit 'XX. outside balance value of 'XX $XXX the the the quarter next third $XXX.X XX loan balances fiscal had the Citizens the of by included September of merger, million increase over prior during On Loans first in to by were XX XX the at by balances fiscal XX. quarter months, which attributable the were million the increased quarter million third to merger months attributable the gross closed they and in $XXX $XXX inclusive 'XX. quarter million million increased $XXX anticipated million almost -- of days of which during $XXX by Citizens including to figure, sheet, XX-month $XX over that prior fair and during with adjustments

are in funding the now decrease our deposits some to for million increase XX, $XX FHLB million. We under by million overnight borrowings during reliance of growth quarter, discussion offered year on Greg $XX and over FHLB $XXX all credit. down savings a September a did hand as from Solid non-core were on compared to $XXX special well-received of just FHLB CD a rates the utilize account increases quarter. was June advances at brokered the and term net repaid in in from bank's took this borrowings our during I'll million the about some quarter. lowered ago, and balances funding. it But of we we quarter the result early XX,

Greg Steffens

Matt. around morning, remained classified a assets September with Overall, at or decrease strong standing $X.X million were adversely good at which total million XX down gross $X.X XX, of Thank during Non asset XX And X.XX% basis quality $X the points our performing represents of everyone. decreasing to or to quarter. million and loans, XX, you, at $XX.X million loans. loans X.XX% September of compared June

compared days nonperforming In million $XX.X million, from up loans. comparison basis is XX $X.X past an XX basis increase, at total this up increase are points to a to a loans. that relationship timely to of single notes past increased on with to maturity linked basis XX September year to renewed quarter not among and XX points partnership, million and group XX% X loans This June relates of XX and to are were due XXXX, Of compared due points are dispute points the gross Loans a prevented renewal. which $XX.X basis the ago. borrower

were a resolved loans be from million resulting June production real this the for The while be the quarter to total to up resolved at million year loans $XX.X September or quarter compared quarter. bank Overall, the and $XX.X anticipate prior year. million the during is from criticized quarter and December increased $XX.X the ago We million, same do agricultural estate Ag not and classified $XX.X Guarantor's $X.X delinquent substantial strength we provides balances over million loss liquidity. the relationship over expect and June. dispute were million the to delinquency $XX.X From XX to dispute. not this XX, any up network and up

see and rice their and Very borrowers harvested more have their in dry corn and October their Our month end, 'XX and perhaps with fall allowed customers harvest, we'll great cotton conditions a forward mid-November. normal finish amount into significant their by progress agricultural harvest than continue of to them on likely many quickly harvest. move of soybeans make our this have to crop

seed, year's through part, on drought face most conditions, [ average ground. crops fuel, get and drive season. Farmers farm our higher the ] However, most higher. growing irrigated chemical expenses that average fertilizer on farmers their yields reporting this this are and to costs For our this continue did were we lenders to above feel to able

And to prior hauling unlike they the year above trended storage more have be river that a fulfill delayed grain levels on-farm last stages their not prices contracts due likely crops. Farmers River the levels have lower return until received year, normal level. to will terminal for to Mississippi

they CCC borrowing down marketed. to can farmers the least utilize stored lines loans the can pay get program Fortunately, that a at be so portion USDA's traditional grain of grain on can until loan

anticipate see smaller portion some and may our paydowns corn a December. quarter good their spring, normal borrowing on soybean in than farmers holding The of we for of the crops lines until we ending

may rice For year XX% the spot and the rate corn, soybeans, crops. dropped for year. Mississippi end cotton back slippings strong XX% about and come specialty prices up River it's to barge and lower project was other pricing stay they the X% since up earlier especially how Rice have levels banking traffic. crop XX% until full Corn has this crop will this market, on mix too year, early

their may be positions. year lower our farmers XXXX meet suffered payments. capital of farm some and lines to struggle anticipate working we Generally, this pay losses out that small that dry term a number of on may yield will There for farms their land expect

successfully payments, be will able should have most sufficient any equity However, restructure they to their all to term not shortfall. meet

grew the net a X.X% the or loan of Speaking during on as the whole, ACL million portfolio quarter. portfolio $XX.X annualized

growth where was by region bunch loan a led East our This our of have we agricultural activity.

markets. just East good was those growth in with region South the behind Our

paying focus making to to December quarter, continuing construction ag to line lines our are We see that on between available expect will credit fund drops. core we even we loan much in net down, clients wouldn't and though growth seasonal to continue the

million for fund totaled days one compared June quarter in XX XX $XXX at pipeline at and to Our loans year to ago. million million $XXX end next as the $XXX

originations Our million the in the $XXX of $XX was volume September loan A decrease compared to million quarter. quarter. of as June approximately

year commercial, production. The for this In and $XXX loans. leading in real production estate ag originated ago, million quarter a the nonresidential with categories we quarter loan September

at percentage CRE as Tier to capital September June concentration level at the XXX% Stefan? bank XX. nonowner-occupied approximately the and was points credit levels losses compared XX, X Our by allowance for X of down

Stefan Chkautovich

Greg. Thanks,

little detail margin the of on statement. income mentioned more our Matt Going X.XX%. into a

net basis interest XX liquidity, quarter to period interest offset million, a a an to interest-earning same the increase we ago. income of net in margin improve a work of in compared year funds. as was XX.X% the balance $XX.X increase sheet the to point by assets of compared for quarter cost or Our was higher the leading balance decrease ago a to increase on The partially a same $X.X year as XX.X% million average to attributable

in as net fourth of the contribution sequentially. deposit amortization ago. and basis Net loan Unchanged a company's of current margin basis the interest contributed from and quarter. the X on immaterial basis across XX XX then these June, about fees points X XX-day was down Compared PPP periods. helped deferred the loans we and to we to a quarter XXXX, from from in what accretion add quarter year-over-year margin XX the year in of down core Recognition in same points margin. point reported origination acquisitions discount basis linked up On points income from view resulting see the the quarter interest quarter fiscal impact September points basis

the to the ago up we reduction back in Noninterest but NSF little we more to down year as compared quarter. charges seasonal quarter. down level than Bank policy items. the some income compared in period, saw fees on X% how benefits linked assess was to income a normalized a for after We interchange card XX.X% a significant was more change

show charges in as related headwind. the from activity banking NSF the will nonrecurring be a application some back a also quarter remains income low. to charges bounce offset well. lending Mortgage but fee those, We'll So

as that compensation otherwise. into in markets. coming in also in personnel year-ago amount beginning uptick XX.X% year as better some the There to bit from as the position January, have we Noninterest little quarters period, newer consider as offices cost merger unusual in compared compared up included the quarter modest increase in $XXX,XXX. we nonrecurring expense a lot metro dropped a our a charges We'll an of the $XXX,XXX M&A The of X.X% $XXX,XXX in was down and linked linked but see quarter relocate will charges wasn't to quarter. the to ago we quarter at occupancy

September was by was XXXX, as PCL substantial quarter Our of linked quarter, was loan as fiscal of did in XXXX, to XX, as reduced PCL economic company's outlook The slightly the million of it our of year. provision decline of quarter the loans. $XXX,XXX XXXX. was The of adjustments $XXX,XXX. XX, decreased the the in a year losses based well assessment outlook. September change the June a period growth, modeled increase on as Qualitative ago to the that but a were the period we $X.X impacted the little during same credit June small XX, for in to In in compared hotel growth assessment group loan compared relative ended a prior model modest classified adjustments economic at in pace ACL the

as net Net during low our which X of and level with loans at the loans XXXX, losses of year-end. loans The X.XX% at of charge-offs gross running loans to of points. remained $XX.X compared million, nonperforming representing June $XX.X XXX% basis fiscal gross ACL a charge-offs million, XX, XXXX, XX-month in for credit XX, an at of nonperforming XXX% September X.XX% represented totaled and quarter, our allowance trailing

release table brokered of funds, we a total detailed deposit included trends for over growth. a had On exclusive deposits, last the solid more basis year. of earnings Our quarterly

and received a seasonal September did Matt as while noted noninterest-bearing position at the demand reduction quarter demand and our quarter. deposits specials well We're for quarter position year during It's we to the this so in FHLB the reducing on more loan meet This funding to deposit are especially in pleased overnight that was levels. the calendar. use rate our primarily currently brokered core CDs. peak we reliance funding earlier, also stable savings We on ran see in due to growth ago borrowings. trough of and elimination funding in notable from FHLB loan

we which public cycles, are cycle based which our quarter, in Going further see the funds, areas. tax business growth calendar fourth from ag, general period we deposit a is on and the entering the into

trends to current While hold, non-core want outlook the may at such in in further liquidity cautious the look if remain funding, normal we broker about reductions quarter, deposits. as we

closing trough next We're optimistic the increases we XXXX, margin Fed's Looking should rate solid hikes into anticipate a is levels that rate Greg, will full or any lag over over of the though period effect year with fiscal done X over significant Fed of we quarters. quarter the see continued pressure next prior still saw if the profitability, the we the thoughts? so.

Greg Steffens

months in we're those team and Thanks, and systems have with Stefan. Bancshares months integrating Right quarter conversion. operations the merger job. now, improvements focused remain we're and We past deposit now those retention X into X past Citizens our markets how fine steady our a seen procedures. members on and The elsewhere over and doing team the is last

we We had of our to as the we repositioning are also new have we some anticipated merger. here community achieved And of our and looking are office bankers cost markets. forward, savings some the in Stefan in recoup locations, from noted,

So be incremental there upticks could noninterest expense. modest in

middle communities excellent than to very banks the potential for in area. to interest bit I would addition the We're added services unique eventually providing longer. pursuing the uptick we partners. lead factors circumstances, more a an could additional stay Kansas macroeconomic Citizens expect and to market of not actively that with opportunities regulatory other partnership rural under and committed merger XXX% City We pressuring on are currently said, we'll in continued sidelines That metro in our to our

Matthew Funke

Thank you, take Greg. participants. ready At questions this our time, we're Adam, to from

for you would, make questions folks they queue please this if time. So how remind at

Operator

our from today Piper from [Operator first And Instructions] Andrew question Sandler. Liesch comes

Andrew Liesch

and The ongoing on and -- are that were some Stefan. you here terms quarter? running, the Welcome, details those was what any into rates were specials you more the this of those what CD

Matthew Funke

to months latter early we quarter, added the where summed They are quarter, to longer-term that XX were in X.X% primarily out have with which some and brokered rates in would Andrew. taken up We try shorter-term CDs, broker funding there. marketing had up funding the ongoing, some to we this prior balance in

Andrew Liesch

Got it.

continuing. are And campaigns so both

you to this the that margin the with to near So CD guidance in And compression growth talked more see we is that here that expect leading of quarter? kind term? about

Matthew Funke

continued pricing Yes, at will position. has to continue be relative we We've little it need certainly into contributed bit. has just to continue on this It We'll back funding to look it quarter. how that to and there. aggressive a contribute dialed our

Andrew Liesch

Got like you. What you sort and certainly and then out rate what it year are fiscal the expect? needs pipeline growth your you rest clients for next looking their is XX down growth And the telling year, do to of But on compared the for growth sounds decent a And like ago. to loan for the here. months? demand of credit

Greg Steffens

uptick growth really We're quarters, at for a our draw activity traditionally final month the draws balances the next growth amount lowest of current about the our a as current quarter months. have will again, lines of million year, we $XX Ag X in fiscal grow then following construction maintain of a that looking quarter we'll in and the are our muted and in again fair which for quarter, lot

Matthew Funke

Andrew, the for in mid-single year, the percentage for growth. digits Overall probably

Andrew Liesch

makes sense. it. Got Yes,

Operator

Kelly question Motta comes from KBW. Kelly. from The next

Kelly Motta

on both always, Greg could Nice us. how get of are portfolio of comes coming as can and you, lift due we us bit to the have that can where much a side? from hoping Welcome. might on joining we year? see what yield portfolio to I repricing so Stefan provide loan Matt refresh on and you of just sense further nice this about loans was new a hear you And loan

Greg Steffens

is million average, would have that anticipate, X.XX%, and for be month on a repricing link higher. I we would primarily coming Loan roughly production monthly, production $XX X.X% on would maturing

Matthew Funke

that Kelly. Prepayments could to add

Kelly Motta

that kind there opportunity That's Greg, any I talented to through particular markets in new certain or where you're teams and production. growth, you're add of in remarks, it. are particular organic that through greatest you to to teams you looking are think you mentioned new -- your prepared Can markets. And looking the the of either seeing addition for add provide then helpful. Got current

Greg Steffens

When not teams are there area Kansas place. lending outstate several that markets rural have did we outside partnered City of other any Citizens, in with they were

several those rural personnel lending We in of more are markets. looking for

would are that talent, looking would those looking present, at in for but fill Chilicothe, So Trenton, markets, Boonville potentially all We just Macon, for we're Missouri. or not we the someone in Brookfield, include probably stage. but

Kelly Motta

capital, pretty And That's are it. levels helpful. in solid Got then mean, terms I of here.

Is walk organic appetite to lie may In like here? terms idea buyback of not is dry capital? Or what powder priorities, us priorities for capital for seems it deals there there be although opportunities M&A you Can really may any your that ahead just save to in many might term, addition growth? for looking. there you're the near through any

Greg Steffens

not future buyback. really to capital us building I would in a would to for test, of speak, anticipate more deployment type initiate so us acquisitions. of I any work see

Kelly Motta

last Got it. for That's Maybe me. question helpful.

these, -- kind last I It last back repricing your of quarter. the as that just there looks like of area it should a kind on to kind sense is of have have service that to there of Was side pulled if full that's drove off at deposit Looking a quarters was charges. Just back both that was where was good basis prior one know if function snapping may to that a core -- you any or that on a had of X lower? year. we in nonrecurring get or activity number start of trying benefit your

Matthew Funke

that some on the would those we would that last charge than for. couple adopted changes probably Kelly. to do items what of We lower policy quarters expect move We've

that run the rate be in downtick there. will So

Kelly Motta

it. Got

Operator

to concluding back for call Instructions] [Operator management I'll any As further questions, no remarks. the have hand the we team

Matthew Funke

appreciate good X Have speak day. everyone, thank for interest, your again Adam. joining months. and Thank you, a we'll us. We you, And in

Operator

for you much today's call. This very attendance. Thank your concludes

You lines. may now your disconnect

Southern Missouri Bancorp (SMBC) 24 Oct 232024 Q1 Earnings call transcript