SMBC - Earnings call transcript Q1 2025 | Southern Missouri Bancorp, Inc.

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Operator

Hello, and welcome to the Southern Missouri Bancorp Earnings Conference Call. My name is Alex. I'll be coordinating the call today. [Operator Instructions] I'll now hand it over to your host, Stefan Chkautovich CFO, to begin. Please go ahead.

Stefan Chkautovich

Alex. you, Thank everyone. Good morning, Stefan Chkautovich, Missouri is with CFO Bancorp. This Southern joining Thank us for today. you of to dated The and call your this purpose is in XXXX, to quarterly questions. XX, data review our earnings October release Monday, and take presented information the

make the today's and Officer. We today joined the press refer release. certain recent we forward-looking regarding by statements off cautionary our some with quarter. our lead President will call Administrative our I'm Matt to statement forward-looking and Matt statements may during may today call, you contained Chief from Funke, in on conversation highlights most

Matthew Funke

year. earnings September thanks, Thanks, the off and we you some first as increase in pressure in joining Matt fiscal provision today. everyone. credit noninterest our lower Stefan, the and Funke, with I financial appreciate on and some quarter, Quarter-over-quarter, This is our income highlights quarter losses, start profitability I'll on for us for showed weighed profitability. noninterest an larger a of expense results

of highlights view some and periods. reported which increase further optimistic in and growth expansion. was this us caused several interest an favorably income, margin loan from were underlying there despite net the stemmed earnings, And the net lower future quarter that to interest pressure remain Offsetting about

and diluted figure $X.XX ago. the down quarter the from current year for June quarter the linked was quarter The XXXX EPS from $X.XX, down $X.XX September a

to of the realized cost as performance bank $XXX,XXX the revenues. and project quarter, onetime and bank's legal enhance with the fees associated reported During improvement operations professional the

for we're improving customer value the but forward creating At project, of time, of EPS by early team with quarters the net in after-tax recommendations quarter we're X diluted still this the improvement the $X.XX basis $XXX,XXX, greater Recognition and in member by long-term the of our expense ultimate by reduced during shareholders. and this ROA and goal considering experience future to points. performance stages income looking

interest the to ago X.XX% those from linked up linked costs, from quarter but quarter compared for fourth have performance X.X% review would up 'XX, was for year expense expenses the for onetime Net the excluding fiscal was quarter noninterest of quarter. the the period, Reported margin quarter-over-quarter. the but reported flat X.XX% X.XX% down been

was income about average earning we interest up X.X% Net year-over-year as and balances. X.X% quarter-over-quarter asset grew

and increased On the loan by million the they balance days increased quarter, over September million million Loans X% million first the X.X% fund quarter sheet, months. next million first over or Deposit gross during the $XXX XX balances prior this during XX $XXX totaled or by prior by at $XXX by increased XX. to $XXX XX $XX in anticipated balances the and months.

year prior $X.XX when and units. and over ag and Tangible we the anticipate of XX.X% Due have comparison the in in to by to million million quarter. book attractive of CDs $XX.XX or increase public end In a in seasonal first $XX customers $XX was reflected an markets, the maturing we XX in inflow of total, brokered that funds months. local we calendar CDs value brokered from the pricing utilized

investment That's earnings the both in attributed loss unrealized in decrease improvement bank's and interest the portfolio to retention rates. the in market from

of basis points loans strong over X classified the or a XX, just Our adversely $XXX,XXX September total $XX.X about million quality at about of or at asset with decrease X% during remained quarter. loans,

basis loans. by past from single-family residents. collateralized to gross points to X.XX% at and the loans to days increase and $X million September was Loans one due due June $X.X were XX million June on up XX% up were XX million loans million, XX up loan nonperforming compared in XX loans. of Roughly gross to $X.X XX, $X.X at nonperforming -- Nonperformers on

basis and due XX commercial industrial $X.X on delinquent and Total points increase increase primarily past the loans. X million is an This from loans X-X to increase of compared to quarter. or residences XX linked basis million due loans up an were and points, loans This June. construction, or points basis family by was $XX.X secured

From the quarter, for XX $XX.X while and to increased year-over-year. June balances about ag real up the September were for estate $X ag year our production up XX, our compared million but $XX million loan they're flat million balances a ago, quarter,

increase We line have input production to seen ag a costs. increased in utilization due general

rice cotton. reported are fall weather as progress planting making minimal above drought with impact and irrigated experienced average to Early the favorable quicker to into average. completed harvest, good and harvest, while led a crops and Our their farmers have having some start had on and corn dry soybeans yields strong with

remains Corn a pound. contracted for about profitability mostly there. hovering low. pricing yields prices and around stable, with price hopeful weather irrigated We're levels. will are yields especially are optimistic strong, better so the yields farmers the promising but some offset Rice $X.XX farms, optimistic we're prices despite impacts low are that are Cotton

vary point the farmers helped this yields XXXX. loans USDA on and assist can benefit fluctuating Soybean input who with but year, costs at storage with the from of savings farmers flow higher with in some may until in holding prices may faced Overall, the fuel crop stored this cash year. planting late grain early

storage. allow credit generally preparing restructure Equipment loans to farmers lenders help quarter withstand paid tough less due positions our on period. strong are to to them are have down values to distressed any softening, this equity and see could crop as We lines next farmers

challenging to stressed assumed costs, commodity year. will navigate Due anticipate including borrowers to we operating stringent higher be that our our pricing underwriting, this and generally able

portfolio as ag to loans. construction, and lines loan equate by Speaking production led would annualized, X-X a to earlier XX% family mentioned growth whole, the the

growth winter line have growth, pace general historically paydowns our ag new experienced the as strongest much expect The South receiving behind slowing September months. loan those quarter a strong our this we and quarter in our start of markets, and region period we was of growth in is in next where ag and see would good to with in projects East slow activity our We just we region too.

optimistic That mid-single-digit the of you great know that I year. achieving said, we least some a level fiscal Stefan, for and about growth at feel thoughts of growth, discussed we've have loan performance. on we the had quarter our loan

Stefan Chkautovich

Matt. Thanks,

on income little Going statement. detail into the a more

this year accretion quarter's quarter. margin basis linked points quarter net up portfolios XX premium assumed points and Looking of points X.XX%, to on included at of Compared acquired interest amortization it fair basis the XX June deposits. September basis the prior points discount basis and loan X about in value XX and quarter-over-quarter of on

the levels yield of The see lower discount interest basis that liabilities merger, past yield are Now primarily going margin of forward. well the accretion to Citizens assets we would while as cost interest-earning increased due net the basis loan expansion, interest-bearing we XX expanded XX points. to points, increased expect these on

in In an loan-to-deposit addition, the ratio. benefited net increase the from interest margin

basis the it, benefited by X quarter. linked compared due count the annualize higher we the as NIM quarter Also the points to day to in XX

our that in company, slowdown through the asset and interest and continued to growth the an see expect the deposits will a loan we Recall quarter historically of the With base, growth from in margin. earning improvement December that we growth the see on margin, net the in weigh year. increase income

overall. interest in improvement positive net expect still we income But

interest we As NIM due cuts benefit XX September. our see should in funds expect indicated quarter net and Fed prior basis on to next this income calls, we liability-sensitive sheet to balance point cut benefit have the and in the from rate

the to treasury impacts, Looking tied compared mostly the month, we of to at XX% indexed of XX-day Prime. within million near-term to $XXX deposits to the to about million close our loans drivers have $XXX or adjust tied close to of

a XX% XXXX, deposit compared Although our sheet rate about to quantification, was about for balance the little interest looking loan XX%. has beta better last cycle beta cutting changed in our of at

beta With expect slightly then, in increase cycle. index the I since deposits deposit a the higher would

but additional XX.X% up to benefits compared fourth X.X% to payouts increase primarily in seasonal fee noninterest compared volume at The Looking network linked quarter. to quarter we card down recognized the period, for have and income, due to the the is the ago incentives. income credit card in tax year linked decrease compared tied historically the quarter to we're

these was The the deposit realized expense fiscal fees other fees items charges the quarter. was and an higher to gain as Noninterest in up increase the period related ago X.X% will X% SBA through loan associated account be increase to and year. fees In up due and with the loans. on XXXX, from compared of year-over-year primarily more evenly linked sale year

have for the and has and would the Excluding year-over-year quarter. increases. open The to a trend also as has increase in with due X.X% in year-over-year success to the from less the experienced well increase over comparison flat review, benefits merit this the as been expenses stems performance associated and primarily up in expense positions. linked operating employee turnover year compensation headcount $XXX,XXX The bank had filling annual increase compared

losses small in linked for fiscal as credit this June Our quarter provision The was the million expected XXXX, and both reserves in uptick ended September We period prior compared the a quarter. in increase due a year the in of PCL provision same $XXX,XXX to growth exposure line our to sheet off-balance increase loan modest had in and in provision a an expectations increase in slight calculated credit the to to individually attributable due for losses. modeled utilization. for evaluated increase XX, the was the $X.X of a quarter loans,

this of as quarter allowance collateralized which nonperforming representing and reviewed loans XX, are totaled nonperforming individually The of that an hotels. million, credit $XX.X XXX% represented of $XX.X The million, gross of reserves X.XX% by XXXX, and primarily as XXX% for ACL require additional metro loss gross loans of loans September to loans of compared X loans. X.XX%

point portfolio regulatory nonowner A XXXX, percentage at by linked at XX, bank our to our X compared in increased growth. lending basis loan the first An uptick concentration of the in CRE charge-offs year-end. June decrease other X by level our defined basis the quarter points. remained quarter-over-quarter XXX% our guidance our points At in low construction of regulatory partially to Net CRE offset quarter multifamily capital. as fiscal X.X

was consolidated XX. a XXX.X% CRE On September basis, our ratio at

hold line Our quarters this capital, with CRE little construction but may loans. a with intent over would next few the in steady uptick on relatively measure grow bit we and it be expect to somewhat

we depositor. As lost about while strong earlier, in increased loan first deposits broker growth of Matt total public million quarter fund to a on the unit the larger level $XX touched

remained rate a local though local competition and markets decreased sorry. And since on results in cuts has a In addition, I'm to move the markets Since more that rates not to of quarter rates us cut seen decrease local led in the we deposit attractive broker during have in CDs pricing FOMC better decrease growth pricing FOMC our deposit pricing. we compared bit -- local see did and little our expect in to the swiftly. the September, bit

fiscal thoughts? strong To the up, a Matt, loan good profitability and with for optimistic we're growth both and we fiscal the wrap foot year. started any cuts, off closing with XXXX year the earnings about rate on September

Matthew Funke

Thank about visit hear from get across about Last activities results we Stefan. our leadership we're our you, our feedback project. improve performance great administrative efforts beginning the with was functions. to on from week, from our market improvement It within footprint on and leaders held organizational to initial culture meeting to annual to a our work them their and

but results. excited for better entire yield improving development this about the setting good that customers' historical a They've we because strong in can and continued professional that represents markets, opportunity project by business will our remains provide with and needs, not optimistic pretty standards, our a the the because performance We're quality effectively slope, our all our that embraced only industry of for across quickly make activity curve meeting process team. really credit at think We're strong improvement, great 'XX enthusiasm. fiscal it us also but

that Finally, so in from sellers year. for do improved regional incremental far to M&A preliminary it's think potential say but calendar pretty reasonable see conversation continuing we'd look to for us. bank small this significantly We as we're remains still interest pickup more have everything valuations

Stefan Chkautovich

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

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

Operator

Olney go Please Stephens. [Operator comes Instructions] for Our from first from Matt question today ahead.

Matt Olney

made ask a to of your the competition deposits in want I minutes some about a deposit and the down. just move footprint, pricing start Stefan, few you the ago local side. about you seeing there comment competition on And just

lower some much Just lowering and you've able more how about pricing promotional how in the some for been competition general, successfully your commentary well is to looking of rates?

Stefan Chkautovich

Matt.

as of rate prior swift. were them midpoint But cuts, So our I our curve end. guess when were down. markets not local started in and were FOMC able treasury sort to and cuts, yield to rates the them to after longer we lower We decrease move seeing the

drop more been competitive little line time. So able over became we've of with with have them. where But in a rates sort gone to in line treasuries our bit them

Matt Olney

the competitive pressures? then Okay. the notable side. appreciate And on data that. far as I Any pricing as what of the there loan points other about on kind side,

Matthew Funke

I the high with asking the us little would the bit market say end job recently. that to end being seeing really it adjusted were curve. of our uptick though of the longer treasury on X a even loans rate right we X commentary rates with probably for We're months back now ago. some better that to come on the our we're the some Heard of lenders haven't competitive here doing from a sheet we

a on to reason ratio be than rate whole a where not what demand, we're lot the But to everything, and now. aggressive try right loan really of on side pretty strong with lot us we are there's at for our loan-to-deposit more

Matt Olney

the growth in and quarter. but I build just in seasonally sounds to typically commentary, It guess that quarter Okay. margin could December move sounds like make kind understand just the down guidance I we and here. a sideways continued Matt, like want see the I then from NII it end, that NII liquidity on the the of or expect you sure margin

But so. outside grow there rates, sounds lower got of the to reasonable? continue that, the year like next NII margin the or over with that some and you've tailwinds maybe Is nice it to

Matthew Funke

pretty at December would the quarter worse way. that we're there. yes, see. we I'm in sideways continue But be term, what hopeful that optimistic should long Trajectory

Stefan Chkautovich

Yes, sort of of for December end deposit been the reference, quarter-over-quarter. of of to the Matt, growth our frame just a sort uptick in lower quarter mid-single-digit low

So could normalized looking that's at of expect. what a period, we sort

Matt Olney

just the consultants in improvement Okay. lastly you sounds are in performance earnings kind mentioned appreciate And are maybe expectations release, it's into But to the project. detail. picture, for what the That's It still big commentary kind to early we'd love of just like the much parts and me, your helpful. the what too of prepared that of maybe and reviewing? bank go

what kind review? a the the goal maybe then are And from financial the of of standpoint,

Matthew Funke

audit, really is compliance, they're risk serve Yes, just about reviewing to the them. But internal are everything, customers for some do we on but everything management. table

for percentage the would the I than itself in so. course better term Stefan? is would the rate, a Longer short a about or our be really to Our goal expense noninterest pay that about do right, on little we to spend. think talking of Is run low over hope of year term, single-digit but what they're that

get the the just customer. next operations, serve able our about for positioned effectively better merger and play. the satisfied be -- decide we'll implement We not improve we'll the giving member be to them the that tools want as whether opportunity, far this use to really as everything financial there, to it's as see team we'll Whether to recommendations, just a we're feasible keep

Operator

Our Motta comes Kelly of from question KBW. next

Kelly Motta

pretty ahead good the I September really the recoveries number we looks guys margin, the yields yields gave all run reported ever significantly. outsized last popped like though any Following included normalizing thinking look up ahead. loan just in what as wondering is for that And I color nonaccrual fees if there, pretty the helpful that quarter moving you the was you appreciate if a loan loan interest the or to or remarks. in rate prepared on quarter? That's about forecast it

Matthew Funke

seen with don't quarters. from basis the There over at nonaccrual, the that it comment we points quarter-over-quarter thought what yields loan should but enough X we've significant really in couple of X, wasn't on repricing of the to last, might know, have look release, I a it impact we been

pricing continue If anything, some we'll maintaining out The down we've have, to expectations improvement loan in see the improvement. it's by hopefully, begun sequential little we've been But as little We'd trending yield a just turn to expect we bit. a trend and quarter-over-quarter topped bit. continue that Stefan? now to December. since around

Stefan Chkautovich

the Kelly, may from material next here are of big. there quarter, in but a our of This to rate material increase there March repriced too yields looking on upside when fixed but be nothing there, a little looking sort really around Yes, quarter, wouldn't at repricing it benefit corner. I that front. that expect loans some isn't the a

Kelly Motta

it. Got

You answered one preemptively my commentary didn't from on prepared the on hear follow-up Maybe last a M&A remark. me. question. I any

-- here? on of color there's update provide here your guys past if Wondering landscape if improved has the you currency on have Your a wondering been any any couple could and pretty just acquirer deals. skillful you in

Matthew Funke

Yes. think that's pick nothing little few it up beyond more do We a We've but will a place, seen likely Still bit. taking nothing preliminary conversations. it's conversations imminent.

Kelly Motta

step I'll Understood. Nice back. quarter.

Operator

Sandler. Instructions] comes Piper of next Liesch Andrew from [Operator question Our

Andrew Liesch

Just then mature wanted have guess, million you the what next the have matures I to the of those that if are be you -- And with? to runoff $XX you are ask what quarter replaced what or mentioned brokered this those -- any two? quarter, going rate in handy, and think do of numbers you

Matthew Funke

Yes.

As came did far as forward those with handle sort that yields, of them, structure. they we a on around a

Andrew Liesch

plus. X

Matthew Funke

range. they Yes,

end, longer So higher coming we off Xs. bridge these of of end, the are probably but some shorter

up after we $XX bucket the -- is term. here have million in biggest the that And of the then that near coming sort

to overall. I we maybe bucket, it -- in another million think million, XX-month have after $XX we the that, looks X- $XX like

Stefan Chkautovich

brokered. we're seasonal without going took to us mature it to expecting without inflows allow when we back does that to it -- because Andrew, repay to

Matthew Funke

Yes, -- Matt. rate this what's that the that rate quarter looks on due And average X.XX%. like it is coming

Andrew Liesch

the million, with begin place income. This But million more fee this on smoothed It year. number. in throughout this have just Then to into $X $X.X helpful. Very quarter? here some right. seems going of be the second out is All to you. items Got like

Matthew Funke

guideline here. that to think $X from as a I run we that million gave of sort rate still a use good

Andrew Liesch

Great. Great.

my step questions. back. I'll all covered other You've

Matthew Funke

Thanks, Andrew.

Operator

[Operator further Okay, have questions. Instructions] we at currently no this time,

So I'll remarks. hand to for back Matt any further Funke

Matthew Funke

interest Thanks, We again we'll Alex, speak appreciate Have for your us. thanks, joining good company, in the and everyone, and in a January. day.

Operator

Thank joining today's you call. for all

disconnect You may lines. now your

Southern Missouri Bancorp (SMBC) 29 Oct 242025 Q1 Earnings call transcript