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Southern Missouri Bancorp Reports Preliminary Second Quarter Results, Declares Quarterly Dividend of $0.09 Per Common Share, Schedules Conference Call to Discuss Results for Tuesday, January 26, at 3:30pm Cst

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Poplar Bluff, Missouri, Jan. 25, 2016 (GLOBE NEWSWIRE) -- Southern Missouri Bancorp, Inc. ("Company") (NASDAQ: SMBC), the parent corporation of Southern Bank ("Bank"), today announced preliminary net income available to common shareholders for the second quarter of fiscal 2016 of $4.2 million, an increase of $785,000, or 23.2%, as compared to the same period of the prior fiscal year. The increase was attributable to an increase in noninterest income, a decrease in noninterest expense, and a decrease in provision for loan losses, partially offset by a decrease in net interest income and an increase in provision for income tax. Preliminary net income available to common shareholders was $.56 per fully diluted common share for the second quarter of fiscal 2016, an increase of $0.11, or 24.4%, as compared to the same period of the prior fiscal year, adjusted for the two-for-one common stock split in the form of a 100% common stock dividend paid in January 2015.

Highlights for the second quarter of fiscal 2016:

  • Earnings per common share (diluted) were up $.11, or 24.4%, as compared to $.45 earned in the same quarter a year ago (adjusted for the January 2015 stock split), and up $.08, or 16.7%, as compared to the $.48 earned in the first quarter of fiscal 2016, the linked quarter. Earnings included an after-tax benefit of approximately $510,000 resulting from nonrecurring noninterest income items discussed below.
     
  • Annualized return on average assets was 1.27%, while annualized return on average common equity was 14.0%, as compared to 1.06% and 12.5%, respectively, in the same quarter a year ago, and as compared to  1.12% and 12.6%, respectively, in the first quarter of fiscal 2016, the linked quarter.
     
  • Net loan growth for the first six months of fiscal 2016 was $26.3 million, or 2.5%. Deposits were up $62.0 million, or 5.9%. Loans were impacted negatively and deposits positively by seasonal factors discussed below.
     
  • Net interest margin for the second quarter of fiscal 2016 was 3.88%, down from the 4.03% reported for the year ago period, and up from the net interest margin of 3.87% for the first quarter of fiscal 2016, the linked quarter.
     
  • Noninterest income (excluding available-for-sale securities gains) was up 27.8% for the second quarter of fiscal 2016, compared to the year ago period, and up 26.7% from the first quarter of fiscal 2016, the linked quarter. Nonrecurring items impacted this figure and are discussed below.
     
  • Noninterest expense was down 4.9% for the second quarter of fiscal 2016, compared to the year ago period, and up 2.3% from the first quarter of fiscal 2016, the linked quarter. The year-ago period included $359,000 in noninterest expense related to merger and acquisition activity, with no comparable expenses in the current quarter, or in the linked quarter.
     
  • Nonperforming assets were $7.6 million, or 0.57% of total assets, at December 31, 2015, as compared to $8.6 million, or 0.65% of total assets, at September 30, 2015.

Dividend Declared:

As the Company noted in a report on Form 8-k filed January 21, 2016, the Board of Directors, on January 19, 2016, was pleased to declare its 87th consecutive quarterly dividend on common stock since the inception of the Company. The cash dividend of $.09 per common share will be paid February 29, 2016, to common stockholders of record at the close of business on February 15, 2016. The Board of Directors and management believe the payment of a quarterly cash dividend enhances shareholder value and demonstrates our commitment to and confidence in our future prospects.

Conference Call:

The Company will host a conference call to review the information provided in this press release on Tuesday, January 26, 2016, at 3:30 p.m. central time (4:30 p.m. eastern). The call will be available live to interested parties by calling 1-888-339-0709 in the United States (Canada: 1-855-669-9657, international: 1-412-902-4189). Telephone playback will be available beginning one hour following the conclusion of the call through February 9, 2016. The playback may be accessed by dialing 1-877-344-7529 (Canada: 1-855-669-9658, international: 1-412-317-0088), and using the conference passcode 10079855. Participants should ask to be joined into the Southern Missouri Bancorp (SMBC) call.

Balance Sheet Summary:

The Company experienced balance sheet growth in the first six months of fiscal 2016, with total assets of $1.3 billion at December 31, 2015, reflecting an increase of $37.6 million, or 2.9%, as compared to June 30, 2015. Balance sheet growth was funded primarily through deposit growth.

Available-for-sale (AFS) securities were $129.1 million at December 31, 2015, a decrease of $508,000, or 0.4%, as compared to June 30, 2015. Principal payments received on mortgage-backed securities and U.S. government agency obligations were mostly offset by purchases of municipal securities. Cash equivalents and time deposits were $25.8 million, an increase of $7.1 million, or 37.8%, as compared to June 30, 2015.

Loans, net of the allowance for loan losses, were $1.1 billion at December 31, 2015, an increase of $26.3 million, or 2.5%, as compared to June 30, 2015. The increase was primarily attributable to growth in residential real estate loan, construction loan, and commercial real estate loan balances, partially offset by lower consumer and commercial loan balances. The Company's agricultural loan balances generally trend downward from autumn through late winter and, since September 30, 2015, agricultural operating and equipment loans were down $9.7 million.

Nonperforming loans were $3.9 million, or 0.36% of gross loans, at December 31, 2015, as compared to $3.8 million, or 0.36% of gross loans, at June 30, 2015. Nonperforming assets were $7.6 million, or 0.57% of total assets, at December 31, 2015, as compared to $8.3 million, or 0.64% of total assets, at June 30, 2015. Our allowance for loan losses at December 31, 2015, totaled $13.2 million, representing 1.21% of gross loans and 339% of nonperforming loans, as compared to $12.3 million, or 1.15% of gross loans, and 323% of nonperforming loans, at June 30, 2015. For all impaired loans, the Company has measured impairment under ASC 310-10-35, and management believes the allowance for loan losses at December 31, 2015, is adequate, based on that measurement.

Total liabilities were $1.2 billion at December 31, 2015, an increase of $51.0 million, or 4.4%, as compared to June 30, 2015.

Deposits were $1.1 billion at December 31, 2015, an increase of $62.0 million, or 5.9%, as compared to June 30, 2015. The increase was primarily attributable to growth in interest-bearing and noninterest-bearing transaction accounts, money market deposit accounts, and certificates of deposit, partially offset by declines in statement and passbook savings accounts. The Company's public unit depositors generally hold larger balances around calendar year end, and since September 30, 2015, public unit balances were up $26.5 million. The average loan-to-deposit ratio for the second quarter of fiscal 2016 was 99.2%, as compared to 98.9% for the same period of the prior fiscal year.

FHLB advances were $58.9 million at December 31, 2015, a decrease of $5.9 million, or 9.1%, as compared to June 30, 2015. The decrease was attributable to the Company's reduction in overnight borrowings due to strong deposit growth during the quarter ended December 31, 2015. Securities sold under agreements to repurchase totaled $23.1 million at December 31, 2015, a decrease of $4.3 million, or 15.6%, as compared to June 30, 2015. At both dates, the full balance of repurchase agreements was due to local small business and government counterparties.

The Company's stockholders' equity was $119.2 million at December 31, 2015, a decrease of $13.4 million, or 10.1%, as compared to June 30, 2015. The decrease was attributable to the redemption of the Company's $20.0 million in preferred stock which had been issued in July 2011 under the U.S. Treasury's Small Business Lending Fund program and payment of dividends on common and preferred stock, partially offset by retention of net income and an increase in accumulated other comprehensive income.

Income Statement Summary:

On August 5, 2014, the Company acquired Peoples Service Company and its subsidiaries, Peoples Banking Company and Peoples Bank of the Ozarks (the "Peoples Acquisition"). Beginning in the first quarter of fiscal 2015, the Peoples Acquisition impacted our reported results through a larger average balance sheet, and increased noninterest income and noninterest expense.

The Company's net interest income for the three-month period ended December 31, 2015, was $11.9 million, a decrease of $262,000, or 2.2%, as compared to the same period of the prior fiscal year. The decrease was attributable to a decrease in net interest margin, to 3.88% in the current three-month period, as compared to 4.03% in the three-month period ended December 31, 2014, partially offset by a 1.6% increase in the average balance of interest-earning assets.

Accretion of fair value discount on loans and amortization of fair value premiums on time deposits related to the Peoples Acquisition decreased to $557,000 for the three-month period ended December 31, 2015, as compared to $722,000 in the same period of the prior fiscal year. This component of net interest income contributed 19 basis points to net interest margin in the three-month period ended December 31, 2015, as compared to a contribution of 24 basis points in the same period of the prior fiscal year. The dollar impact of this component of net interest income has generally been declining each sequential quarter as assets from the Peoples Acquisition mature or prepay, but the quarter ended December 31, 2015, saw an increase as compared to the quarter ended September 30, 2015, primarily as a result of the resolution of a purchased credit-impaired loan with a carrying value less than the payoff realized.

The provision for loan losses for the three-month period ended December 31, 2015, was $496,000, as compared to $862,000 in the same period of the prior fiscal year. As a percentage of average loans outstanding, provision for loan losses in the current three-month period represented a charge of .18% (annualized), while the Company recorded net charge offs during the period of .05% (annualized). During the same period of the prior fiscal year, provision for loan losses as a percentage of average loans outstanding represented a charge of .33% (annualized), while the Company recorded net charge offs of .01% (annualized).

The Company's noninterest income for the three-month period ended December 31, 2015, was $2.8 million, an increase of $604,000, or 27.6%, as compared to the same period of the prior fiscal year. The increase included nonrecurring items of $323,000 related to bank-owned life insurance and $301,000 related to the Company's ownership of stock in Ozark Trust and Investment Corporation, the acquisition of which by Simmons First National Corporation closed during the quarter ended December 31, 2015. The bank-owned life insurance benefit is not subject to income tax. Other noninterest income categories were down slightly, in total, as decreases in deposit account service charges and gains realized on secondary market loan originations were partially offset by increases in bank card interchange income and loan fees.

Noninterest expense for the three-month period ended December 31, 2015, was $8.2 million, a decrease of $422,000, or 4.9%, as compared to the same period of the prior fiscal year. Included in noninterest expense for the three-month period ended December 31, 2014, was $359,000 in merger-related charges, with no comparable expenses in the current period. Other noninterest expense categories were down slightly, in total, as lower compensation and benefits, intangible amortization, legal and professional fees, and deposit insurance premiums were partially offset by higher occupancy expenses and charges related to the liquidation of foreclosed real estate. The efficiency ratio for the three-month period ended December 31, 2015, was 55.6%, as compared to 59.9% for the same period of the prior fiscal year. The improvement resulted from the increase in noninterest income and the decrease in noninterest expense, partially offset by the decrease in net interest income.

The income tax provision for the three-month period ended December 31, 2015, was $1.8 million, an increase of $360,000, or 24.7%, as compared to the same period of the prior fiscal year, attributable to higher pre-tax income, as well as an increase in the effective tax rate, from 30.2% to 29.8%. The general trend in the effective tax rate has been upward, as the Company's taxable income has grown at a rate faster than its investments in tax advantaged assets; however, the increase was less pronounced in the current period, primarily as a result of the nonrecurring tax-free income related to bank-owned life insurance.

Forward-Looking Information:

Except for the historical information contained herein, the matters discussed in this press release may be deemed to be forward-looking statements that are subject to known and unknown risks, uncertainties, and other factors that could cause the actual results to differ materially from the forward-looking statements, including: the strength of the United States economy in general and the strength of the local economies in which we conduct operations; fluctuations in interest rates and in real estate values; monetary and fiscal policies of the Board of Governors of the Federal Reserve System and the U.S. Government and other governmental initiatives affecting the financial services industry; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses; our ability to access cost-effective funding; the timely development of and acceptance of our new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors' products and services; expected cost savings, synergies and other benefits from the Company's merger and acquisition activities might not be realized to the extent anticipated or within the anticipated time frames, if at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in our market area; legislative or regulatory changes that adversely affect our business; results of examinations of us by our regulators, including the possibility that our regulators may, among other things, require us to increase our reserve for loan losses or to write-down assets; the impact of technological changes; and our success at managing the risks involved in the foregoing. Any forward-looking statements are based upon management's beliefs and assumptions at the time they are made. We undertake no obligation to publicly update or revise any forward-looking statements or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed might not occur, and you should not put undue reliance on any forward-looking statements.



Southern Missouri Bancorp, Inc.
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION
      
Summary Balance Sheet Data as of: December 31,  September 30,  June 30,  March 31,  December 31,
  (dollars in thousands, except per share data)   2015    2015    2015    2015    2014  
      
Cash equivalents and time deposits$  25,794 $  20,250 $   18,719 $  23,496 $  40,018 
Available for sale securities   129,085    127,485    129,593    133,637    146,030 
FHLB/FRB membership stock   6,238    7,162    6,467    6,475    5,384 
Loans receivable, gross   1,092,599    1,081,899     1,065,443    1,061,267    1,025,447 
  Allowance for loan losses   13,172    12,812    12,297    11,743    10,958 
Loans receivable, net   1,079,427    1,069,087    1,053,146    1,049,524    1,014,489 
Bank-owned life insurance   19,754    19,836    19,692     19,549    19,409 
Intangible assets   8,238    8,470    8,757    9,007    9,289 
Premises and equipment    45,505    42,788    39,726    37,490    35,982 
Other assets   23,631     24,715     23,964     23,680     25,650  
  Total assets$  1,337,672  $  1,319,793  $  1,300,064  $  1,302,858  $  1,296,251  
      
Interest-bearing deposits$  990,103 $   935,375 $  937,771 $  935,347 $  937,273 
Noninterest-bearing deposits   127,118    122,341    117,471    121,647    125,603 
Securities sold under agreements
  to repurchase
   23,066    24,429    27,332    27,960    21,385 
FHLB advances   58,929     82,110    64,794    65,080    62,966 
Other liabilities   4,543    4,981    5,395    5,232     4,472 
Subordinated debt   14,705     14,682     14,658     14,635     14,617  
  Total liabilities   1,218,464     1,183,918      1,167,421     1,169,901     1,166,316  
      
Preferred stock   -     20,000    20,000    20,000    20,000 
Common stockholders' equity   119,208     115,875     112,643     112,957     109,935  
  Total stockholders' equity   119,208     135,875      132,643     132,957     129,935  
      
  Total liabilities and
  stockholders' equity
$  1,337,672  $  1,319,793  $  1,300,064  $  1,302,858  $  1,296,251  
      
Equity to assets ratio 8.91% 10.30% 10.20% 10.21% 10.02%
Common shares outstanding   7,428,416    7,424,666    7,419,666    7,413,666    7,411,666 
  Less: Restricted common
  shares not vested
   53,150     54,800     55,600     73,200     71,200  
Common shares for
  book value determination
   7,375,266     7,369,866    7,364,066    7,340,466    7,340,466 
      
Book value per common share$  16.16 $  15.72 $  15.30 $  15.39 $   14.98 
Closing market price   23.90    20.72    18.85    18.87    18.99 
      
Nonperforming asset data as of: December 31,  September 30,  June 30,  March 31,  December 31,
  (dollars in thousands)   2015    2015    2015    2015    2014  
      
Nonaccrual loans$  3,803 $  4,021 $  3,758 $   4,200 $  4,665 
Accruing loans 90 days or more past due   79    50    45    137    15 
Nonperforming troubled
  debt restructurings (1)
   -      -      -      -      -   
  Total nonperforming loans    3,882    4,071    3,803    4,337    4,680 
Other real estate owned (OREO)   3,617    4,392    4,440    4,291    4,099 
Personal property repossessed   118     109     64     36     29  
  Total nonperforming assets$  7,617  $  8,572  $  8,307  $  8,664  $  8,808  
      
Total nonperforming assets to total assets 0.57% 0.65% 0.64% 0.66% 0.68%
Total nonperforming loans to gross loans 0.36% 0.38% 0.36% 0.41% 0.46%
Allowance for loan losses
  to nonperforming loans
 339.31% 314.71% 323.35% 270.76% 234.15%
Allowance for loan losses to gross loans 1.21% 1.18% 1.15% 1.11% 1.07%
      
Performing troubled debt restructurings$  5,548 $  6,949 $  6,548 $  3,620 $  3,503 
      
  (1) reported here only if not otherwise listed as nonperforming (i.e., nonaccrual or 90+ days past due)  



  For the three-month period ended
Quarterly Average Balance Sheet Data: December 31,  September 30,  June 30,  March 31,  December 31,
  (dollars in thousands)   2015    2015    2015    2015    2014  
      
Interest-bearing cash equivalents$  10,352 $  9,488 $  12,398 $  16,148 $  20,542 
Available for sale securities
  and membership stock
   135,044    135,706    136,063    147,433    155,506 
Loans receivable, gross   1,080,526     1,063,851     1,050,087     1,040,371     1,030,821  
  Total interest-earning assets   1,225,922    1,209,045    1,198,548    1,203,952    1,206,869 
Other assets   96,411      91,437     91,493     92,966     90,682  
  Total assets$  1,322,333  $  1,300,482  $  1,290,041  $  1,296,918  $  1,297,551  
      
Interest-bearing deposits$  963,510 $  935,089 $  933,444 $  943,035 $  920,566 
Securities sold under
  agreements to repurchase
   24,861    25,885    27,442    26,256    23,475 
FHLB advances   70,107    68,844    56,377    57,596    88,642 
Subordinated debt   14,694     14,670     14,647     14,626     14,606  
  Total interest-bearing liabilities   1,073,172    1,044,488     1,031,910    1,041,513    1,047,289 
Noninterest-bearing deposits   125,759    120,283    124,436    123,033    121,280 
Other noninterest-bearing liabilities   755     1,472     802     754     658  
  Total liabilities   1,199,686     1,166,243     1,157,148     1,165,300     1,169,227  
      
Preferred stock   3,261    20,000    20,000    20,000    20,000 
Common stockholders' equity   119,386     114,239     112,893     111,618     108,324  
  Total stockholders' equity   122,647     134,239      132,893     131,618     128,324  
      
  Total liabilities and
  stockholders' equity
$  1,322,333  $  1,300,482  $  1,290,041  $  1,296,918  $  1,297,551  
      
  For the three-month period ended
Quarterly Summary Income Statement Data: December 31,  September 30,  June 30,  March 31,  December 31,
  (dollars in thousands, except per share data)   2015    2015    2015    2015    2014  
      
Interest income:     
  Cash equivalents$  9 $  7 $  18 $  16 $  49 
  Available for sale securities
   and membership stock
   864    865    843    918    948 
  Loans receivable   13,362     13,098     12,955     12,975     13,361  
  Total interest income   14,235     13,970     13,816     13,909      14,358  
Interest expense:     
  Deposits   1,847    1,785    1,800    1,756    1,703 
  Securities sold under
  agreements to repurchase
   29    29    32    30    27 
  FHLB advances   320    317     304    301    333 
  Subordinated debt   139     135     134     125      133  
  Total interest expense   2,335     2,266     2,270     2,212     2,196  
Net interest income   11,900     11,704    11,546    11,697    12,162 
Provision for loan losses   496    618    659     837    862 
Securities gains   -     -     -     3    3 
Other noninterest income   2,791    2,202    2,398    2,091    2,184 
Noninterest expense   8,168    7,988    8,002    8,091    8,590 
Income taxes   1,820     1,665     1,718     1,497     1,460  
Net income    4,207    3,635    3,565    3,366    3,437 
  Less: effective dividend
  on preferred shares
   35     50     50     50     50  
  Net income available
  to common shareholders
$  4,172  $  3,585  $  3,515  $   3,316  $  3,387  
      
Basic earnings per common share (2)$  0.56 $  0.48 $  0.47 $  0.45 $  0.46 
Diluted earnings per common share (2)   0.56    0.48    0.47    0.44    0.45 
Dividends per common share (2)   0.090     0.090    0.085    0.085    0.085 
Average common shares outstanding (2):     
  Basic   7,425,000    7,422,000    7,418,000     7,413,000    7,404,000 
  Diluted   7,460,000    7,454,000    7,524,000    7,604,000    7,593,000 
      
Return on average assets 1.27% 1.12% 1.11% 1.04% 1.06%
Return on average
  common shareholders' equity
 14.0% 12.6% 12.5% 11.9% 12.5%
      
Net interest margin 3.88% 3.87% 3.85% 3.89% 4.03%
Net interest spread 3.77% 3.75% 3.73% 3.77% 3.92%
      
Efficiency ratio 55.6% 57.4% 57.4% 58.7% 59.9%
      
  (2) adjusted to reflect the 2-for-1 stock split in the form of a 100% stock dividend paid January 30, 2015  




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