Southern Missouri Bancorp, Inc.

Southern Missouri Bancorp reported June-quarter diluted EPS of $1.83, up $0.23, or about 14%, from the linked quarter and up $0.44, or about 32%, from the June 2025 quarter. Full-year fiscal 2026 EPS was $6.43 versus $5.18 in fiscal 2025, a 24% increase. Net interest margin was 3.67% in the quarter, unchanged sequentially and up from 3.47% a year ago; net interest income was up almost 3% quarter over quarter and about 10% year over year. Provision for credit loss was $3.2 million, compared with $2.1 million in the March quarter. Gross loans increased by $69 million in the quarter and were up $291 million, or 7.1%, from a year ago. Deposits increased about $67 million in the quarter and about $126 million, or 3%, year over year. Tangible book value per share was $47.43, up $5.56, or 13%, from a year ago. For fiscal 2027, management expects mid-single-digit loan growth, sees some near-term pressure on core margin, expects operating expenses to re-accelerate into mid-single-digit to low/high-single-digit growth, and does not expect tax benefits of this magnitude to repeat; normalized tax rate guidance remains 19%-20%.

Greg Steffens said the company is benefiting from its fiscal 2024 performance-improvement work and from investments in commercial lenders, insurance, and wealth management/trust, which he believes will diversify revenue and support sustainable growth. His tone was constructive but disciplined: he emphasized prudent risk management, saying the bank is not satisfied with current problem asset levels and is tightening credit oversight, while also noting that M&A discussions remain active and the bank is well positioned to act if the right partner emerges.

Stefan Chkautovich highlighted that the quarter’s 3.67% NIM was helped by about three basis points of fair value discount accretion and premium amortization, but was hurt by a $603,000 reversal of accrued interest income that reduced NIM by about five basis points. He pointed to $54.9 million of ACL, or 1.25% of gross loans, versus $55.9 million, or 1.29%, in March, and said net charge-offs were $4.3 million and provision for credit loss was $3.2 million. He also warned that roughly 25% of deposits are indexed to the 91-day T-bill, so recent short-term rate increases and deposit competition could pressure funding costs, while operating expenses should re-accelerate in fiscal 2027 as the company reinvests in people and technology.

Analysts focused on near-term margin pressure, credit costs, fee income growth, expense growth, and whether M&A is now more attractive than buybacks. Management said the next quarter could see margin compression because indexed deposits are repricing higher and there are more CDs rolling than fixed-rate loans maturing, though the loan side may provide only a small offset. On credit, Stefan said the annual ACL methodology update alone increases expense, and Greg said they expect charge-offs to improve from the 17-18 basis points seen in the last two fiscal years, moving partway back toward a historical 3-5 basis point range. On fees and expenses, Matt said new hires and initiatives should take time to contribute, while Stefan guided to operating expense growth in the mid-single digits to low/high single digits; Greg also said M&A offers a quicker return than buybacks at current valuation.