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SOUTHERN MISSOURI BANCORP REPORTS PRELIMINARY RESULTS FOR THIRD QUARTER OF FISCAL 2017; DECLARES QUARTERLY DIVIDEND OF $0.10 PER COMMON SHARE; Schedules Conference Call to Discuss Results for Tuesday, April 25, at 3:30pm Central Time

Poplar Bluff, April 24, 2017 (GLOBE NEWSWIRE) --



Southern Missouri Bancorp, Inc. (“Company”) (NASDAQ: SMBC), the parent corporation of Southern Bank (“Bank”), today announced preliminary net income available to common stockholders for the third quarter of fiscal 2017 of $4.0 million, an increase of $632,000, or 19.0%, as compared to the same period of the prior fiscal year. The increase was attributable to increases in net interest income and noninterest income, and reductions in provision for loan losses and provision for income taxes, partially offset by an increase in noninterest expense. Preliminary net income available to common stockholders was $.53 per fully diluted common share for the third quarter of fiscal 2017, an increase of $.08, or 17.8%, as compared to the same period of the prior fiscal year.

Highlights for the third quarter of fiscal 2017:

  • Earnings per common share (diluted) were $.53, an increase of $.08, or 17.8%, as compared to the same quarter a year ago, and down $.03, or 5.4%, as compared to the $.56 earned in the second quarter of fiscal 2017, the linked quarter.
  • Annualized return on average assets was 1.07%, while annualized return on average common equity was 11.9%, as compared to 0.99% and 11.0%, respectively, in the same quarter a year ago, and 1.13% and 12.9%, respectively, in the second quarter of fiscal 2017, the linked quarter.
  • Net loan growth for the third quarter of fiscal 2017 was $16.1 million, and net loans are up $90.5 million for the fiscal year to date, an increase of 8.0%. Deposits were up $60.7 million for the third quarter, and $151.8 million, or 13.5%, for the fiscal year to date. Traditional brokered funding accounted for $11.5 million of third quarter deposit growth and $59.7 million of fiscal year to date deposit growth. Public unit deposits accounted for $19.3 million of third quarter deposit growth and $37.6 million of fiscal year to date deposit growth.
  • Net interest margin for the third quarter of fiscal 2017 was 3.64%, down from the 3.72% reported for the year ago period, and down from 3.70% for the second quarter of fiscal 2017, the linked quarter. Reduced discount accretion on acquired loans contributed to the decrease in margin compared to both the year ago and linked quarter periods.
  • Noninterest income (excluding available-for-sale securities gains) was up 34.3% for the third quarter of fiscal 2017, compared to the year ago period, and up 8.3% from the second quarter of fiscal 2017, the linked quarter. The current period includes non-recurring benefits (described in further detail, below) of $343,000, with no comparable benefits in the year ago or linked quarter periods.
  • Noninterest expense was up 15.8% for the third quarter of fiscal 2017, compared to the year ago period, and up 9.9% from the second quarter of fiscal 2017, the linked quarter. The current quarter’s results included charges of $73,000 attributable to the pending acquisition of Tammcorp, Inc. (“Tammcorp”), with no comparable charges in the year ago period, and $100,000 in comparable charges in the linked quarter.
  • Nonperforming assets were $6.5 million, or 0.44% of total assets, at March 31, 2017, as compared to $9.0 million, or 0.60% of total assets, at December 31, 2016.

Dividend Declared:

As the Company noted in a report on Form 8-K filed April 20, 2017, the Board of Directors, on April 18, 2017, declared a quarterly cash dividend on common stock of $0.10, payable May 31, 2017, to stockholders of record at the close of business on May 15, 2017, marking the 92nd consecutive quarterly dividend since the inception of the Company. The Board of Directors and management believe the payment of a quarterly cash dividend enhances stockholder value and demonstrates our commitment to and confidence in our future prospects.

Other News:

As the Company noted in a report on Form 8-K filed January 13, 2017, we entered into an Agreement and Plan of Merger on January 11, 2017, with Tammcorp, Inc. (“Tammcorp”), which is the 91% owner of Capaha Bank (“Capaha”). The agreement provides that Tammcorp will merge with and into the Company and Capaha will merge with and into the Bank. Approval for the mergers has been received from the Federal Reserve Bank of St. Louis, and remains pending from the Missouri Division of Finance and the Illinois Department of Financial and Professional Regulation. The Company expects the acquisition to close late in the June 2017 quarter.

Conference Call:

The Company will host a conference call to review the information provided in this press release on Tuesday, April 25, 2017, 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 May 8, 2017. 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 10106074. 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 nine months of fiscal 2017, with total assets of $1.5 billion at March 31, 2017, reflecting an increase of $92.1 million, or 6.6%, as compared to June 30, 2016. Balance sheet growth was funded through deposit growth.

Available-for-sale (“AFS”) securities were $134.0 million at March 31, 2017, an increase of $4.8 million, or 3.7%, as compared to June 30, 2016. The increase was attributable primarily to purchases of mortgage-backed securities. Cash equivalents and time deposits were $21.5 million, a decrease of $1.8 million, or 7.6%, as compared to June 30, 2016.

Loans, net of the allowance for loan losses, were $1.2 billion at March 31, 2017, an increase of $90.5 million, or 8.0%, as compared to June 30, 2016. The increase was primarily attributable to growth in commercial real estate and residential real estate loan balances, partially offset by a decline in drawn construction loan balances. The increase in commercial real estate loans was attributable primarily to growth in loans secured by nonresidential properties and agricultural real estate, the increase in residential real estate loans was attributable to multifamily loan originations, and the decline in construction loan balances was primarily attributable to construction loan balances which were retained and moved to permanent financing. Loans anticipated to fund in the next 90 days stood at $43.0 million at March 31, 2017, as compared to $40.9 million at December 31, 2016, and $59.4 million at March 31, 2016.

Nonperforming loans were $3.2 million, or 0.26% of gross loans, at March 31, 2017, as compared to $5.7 million, or 0.50% of gross loans, at June 30, 2016. The decrease was attributable primarily to the restoration to accrual status of several purchased credit-impaired loans which have performed according to terms for a reasonable period and for which collateral analysis indicates the Company can be reasonably assured of collection of all principal and interest due, net of any purchase accounting adjustments. Nonperforming assets were $6.5 million, or 0.44% of total assets, at March 31, 2017, as compared to $9.0 million, or 0.64% of total assets, at June 30, 2016. The decrease in nonperforming assets primarily reflected the decrease in nonperforming loans. Our allowance for loan losses at March 31, 2017, totaled $15.2 million, representing 1.22% of gross loans and 474% of nonperforming loans, as compared to $13.8 million, or 1.20% of gross loans, and 244% of nonperforming loans, at June 30, 2016. For all impaired loans, the Company has measured impairment under ASC 310-10-35. Management believes the allowance for loan losses at March 31, 2017, is adequate, based on that measurement.

Total liabilities were $1.4 billion at March 31, 2017, an increase of $84.1 million, or 6.6%, as compared to June 30, 2016.

Deposits were $1.3 billion at March 31, 2017, an increase of $151.8 million, or 13.5%, as compared to June 30, 2016. The increase was primarily attributable to growth in interest-bearing transaction accounts and certificates of deposit. Specifically, the Company’s public unit deposits have increased $37.6 million, brokered certificates of deposit increased $49.7 million, and brokered nonmaturity deposits increased $10.0 million since June 30, 2016, excluding brokered deposits originated through reciprocal arrangements (our reciprocal brokered deposits are primarily originated by our public unit depositors and utilized as an alternative to pledging securities against those deposits). The average loan-to-deposit ratio for the third quarter of fiscal 2017 was 98.7%, as compared to 96.9% for the same period of the prior fiscal year.

FHLB advances were $51.6 million at March 31, 2017, a decrease of $58.6 million, or 53.2%, as compared to June 30, 2016, as the Company prepaid $16.5 million in term advances during the first quarter of fiscal 2017, and decreased overnight funding, from $69.8 million at June 30, 2016, to $27.9 million at March 31, 2017. The decrease in FHLB advances was attributable to the increase in deposit balances, including brokered funding and public unit deposits, partially offset by loan demand in the first nine months of fiscal 2017. Securities sold under agreements to repurchase totaled $17.9 million at March 31, 2017, a decrease of $9.2 million, or 33.9%, as compared to June 30, 2016. The decrease was attributable to a large public unit customer migrating from this product to a reciprocal brokered deposit arrangement. At both dates, the full balance of repurchase agreements was due to local small business and government counterparties.

The Company’s stockholders’ equity was $134.0 million at March 31, 2017, an increase of $8.0 million, or 6.4%, as compared to June 30, 2016. The increase was attributable to retention of net income, partially offset by a decrease in accumulated other comprehensive income and payment of dividends on common stock.

Income Statement Summary:

The Company’s net interest income for the three-month period ended March 31, 2017, was $12.4 million, an increase of $924,000, or 8.0%, as compared to the same period of the prior fiscal year. The increase was attributable to a 10.4% increase in the average balance of interest-earning assets, partially offset by a decrease in net interest margin to 3.64% in the current three-month period, as compared to 3.72% in the three-month period ended March 31, 2016.

Accretion of fair value discount on acquired loans and amortization of fair value premiums on assumed time deposits related to the Company’s acquisition of Peoples Service Company and its subsidiary, Peoples Bank of the Ozarks in August 2014 (the “Peoples Acquisition”), decreased to $216,000 for the three-month period ended March 31, 2017, as compared to $322,000 for the same period of the prior fiscal year. This component of net interest income contributed six basis points to net interest margin in the three-month period ended March 31, 2017, as compared to a contribution of ten basis points for the same period of the prior fiscal year. For the linked quarter, ended December 31, 2016, discount accretion on loans and premium amortization on time deposits related to the Peoples Acquisition amounted to $267,000, contributing eight basis points to net interest margin. 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.

The provision for loan losses for the three-month period ended March 31, 2017, was $376,000, as compared to $563,000 in the same period of the prior fiscal year. Decreased provisioning was attributed to the reduction in nonperforming loans. As a percentage of average loans outstanding, the provision for loan losses in the current three-month period represented a charge of 0.12% (annualized), while the Company recorded net charge offs during the period of 0.06% (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 0.21% (annualized), while the Company recorded net charge offs of 0.02% (annualized).

The Company’s noninterest income for the three-month period ended March 31, 2017, was $2.9 million, an increase of $747,000, or 34.3%, as compared to the same period of the prior fiscal year. The increase was attributable in part to a nonrecurring benefit in the current period of $302,000 related to bank-owned life insurance and $41,000 due to the Company’s sale of a partnership interest in state low-income housing tax credits, as well as increases resulting from loan fees, deposit account service charges, bank card interchange income, and recurring increases in the cash value of bank-owned life insurance. The bank-owned life insurance benefit was not subject to income tax.

Noninterest expense for the three-month period ended March 31, 2017, was $9.6 million, an increase of $1.3 million, or 15.8%, as compared to the same period of the prior fiscal year. The increase was attributable to higher compensation expenses, occupancy expenses, advertising, and legal expenses. Higher compensation expense was attributable to calendar year 2017 wage and salary increases, addition of key personnel, and the filling of several vacancies. Included in noninterest expenses were charges totaling $73,000 related to the pending Tammcorp acquisition. The efficiency ratio for the three-month period ended March 31, 2017, was 62.3%, as compared to 60.3% in the same period of the prior fiscal year.

The income tax provision for the three-month period ended March 31, 2017, was $1.5 million, a decrease of $81,000, or 5.2%, as compared to the same period of the prior fiscal year, attributable primarily to a decrease in the effective tax rate, to 27.0% from 31.7%, mostly offset by an increase in pre-tax income. The lower effective tax rate was attributed primarily to formation by the Company’s bank subsidiary of a Real Estate Investment Trust (“REIT”) to hold certain qualified assets in order to minimize state tax liability, combined with the inclusion in the current period’s results of the tax advantaged bank-owned life insurance benefit.

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: March 31 December 31, September 30, June 30, March 31,
(dollars in thousands, except per share data) 2017 2016 2016 2016 2016
Cash equivalents and time deposits$ 21,508 $ 30,865 $ 21,978 $ 23,277 $ 18,517
Available for sale securities 134,048 132,116 124,249 129,224 128,735
FHLB/FRB membership stock 6,220 8,256 9,121 8,352 5,886
Loans receivable, gross 1,241,120 1,224,828 1,218,228 1,149,244 1,108,452
Allowance for loan losses 15,190 14,992 14,456 13,791 13,693
Loans receivable, net 1,225,930 1,209,836 1,203,772 1,135,453 1,094,759
Bank-owned life insurance 30,147 30,491 30,282 30,071 19,897
Intangible assets 7,287 7,478 7,657 7,851 8,027
Premises and equipment 46,624 46,371 46,615 46,943 46,670
Other assets 24,220 26,936 26,138 22,739 21,981
Total assets$ 1,495,984 $ 1,492,349 $ 1,469,812 $ 1,403,910 $ 1,344,472
Interest-bearing deposits$ 1,133,405 $ 1,075,792 $ 1,032,810 $ 988,696 $ 997,110
Noninterest-bearing deposits 139,095 136,024 134,540 131,997 125,033
Securities sold under agreements to repurchase 17,900 22,542 25,450 27,085 31,575
FHLB advances 51,619 107,502 129,184 110,216 48,647
Other liabilities 5,156 5,336 4,156 5,197 5,131
Subordinated debt 14,824 14,800 14,776 14,753 14,729
Total liabilities 1,361,999 1,361,996 1,340,916 1,277,944 1,222,225
Preferred stock - - - - -
Common stockholders' equity 133,985 130,353 128,896 125,966 122,247
Total stockholders' equity 133,985 130,353 128,896 125,966 122,247
Total liabilities and stockholders' equity$ 1,495,984 $ 1,492,349 $ 1,469,812 $ 1,403,910 $ 1,344,472
Equity to assets ratio 8.96% 8.73% 8.77% 8.97% 9.09%
Common shares outstanding 7,450,041 7,450,041 7,436,866 7,437,616 7,437,616
Less: Restricted common shares not vested 33,175 33,175 36,000 36,800 52,750
Common shares for book value determination 7,416,866 7,416,866 7,400,866 7,400,816 7,384,866
Book value per common share$ 18.06 $ 17.58 $ 17.42 $ 17.02 $ 16.55
Closing market price 35.52 35.38 24.90 23.53 24.02
Nonperforming asset data as of: March 31 December 31, September 30, June 30, March 31,
(dollars in thousands) 2017 2016 2016 2016 2016
Nonaccrual loans$ 3,069 $ 5,572 $ 4,969 $ 5,624 $ 4,890
Accruing loans 90 days or more past due 134 85 54 36 70
Total nonperforming loans 3,203 5,657 5,023 5,660 4,960
Other real estate owned (OREO) 3,296 3,310 3,182 3,305 3,244
Personal property repossessed 37 39 45 61 90
Total nonperforming assets$ 6,536 $ 9,006 $ 8,250 $ 9,026 $ 8,294
Total nonperforming assets to total assets 0.44% 0.60% 0.56% 0.64% 0.62%
Total nonperforming loans to gross loans 0.26% 0.47% 0.42% 0.50% 0.45%
Allowance for loan losses to nonperforming loans 474.24% 265.02% 287.80% 243.66% 276.07%
Allowance for loan losses to gross loans 1.22% 1.22% 1.19% 1.20% 1.24%
Performing troubled debt restructurings (1)$ 8,649 $ 7,673 $ 7,853 $ 6,078 $ 5,871
(1) Nonperforming troubled debt restructurings are included with nonaccrual loans or accruing loans 90 days or more past due.



For the three-month period ended
Quarterly Average Balance Sheet Data: March 31 December 31, September 30, June 30, March 31,
(dollars in thousands) 2017 2016 2016 2016 2016
Interest-bearing cash equivalents$ 1,896 $ 1,599 $ 7,730 $ 8,883 $ 14,475
Available for sale securities and membership stock 141,223 139,183 135,188 134,823 132,913
Loans receivable, gross 1,221,642 1,216,607 1,178,067 1,126,630 1,088,833
Total interest-earning assets 1,364,761 1,357,389 1,320,985 1,270,336 1,236,221
Other assets 119,436 123,287 115,277 109,506 100,507
Total assets$ 1,484,197 $ 1,480,676 $ 1,436,262 $ 1,379,842 $ 1,336,728
Interest-bearing deposits$ 1,099,319 $ 1,043,542 $ 994,518 $ 996,760 $ 995,555
Securities sold under agreements to repurchase 24,053 24,323 26,723 29,305 29,496
FHLB advances 71,405 124,834 132,107 80,155 41,987
Subordinated debt 14,812 14,788 14,765 14,741 14,717
Total interest-bearing liabilities 1,209,589 1,207,487 1,168,113 1,120,961 1,081,755
Noninterest-bearing deposits 138,667 137,468 133,601 127,687 128,284
Other noninterest-bearing liabilities 3,479 5,874 7,082 7,091 5,765
Total liabilities 1,351,735 1,350,829 1,308,796 1,255,739 1,215,804
Preferred stock - - - - -
Common stockholders' equity 132,462 129,847 127,466 124,103 120,924
Total stockholders' equity 132,462 129,847 127,466 124,103 120,924
Total liabilities and stockholders' equity$ 1,484,197 $ 1,480,676 $ 1,436,262 $ 1,379,842 $ 1,336,728
For the three-month period ended
Quarterly Summary Income Statement Data: March 31 December 31, September 30, June 30, March 31,
(dollars in thousands, except per share data) 2017 2016 2016 2016 2016
Interest income:
Cash equivalents$ 13 $ 4 $ 4 $ 7 $ 12
Available for sale securities and membership stock 875 848 851 849 853
Loans receivable 14,067 14,229 14,250 13,405 12,984
Total interest income 14,955 15,081 15,105 14,261 13,849
Interest expense:
Deposits 2,111 2,043 1,932 1,903 1,872
Securities sold under agreements to repurchase 25 25 27 30 32
FHLB advances 224 282 418 341 293
Subordinated debt 163 160 152 149 144
Total interest expense 2,523 2,510 2,529 2,423 2,341
Net interest income 12,432 12,571 12,576 11,838 11,508
Provision for loan losses 376 656 925 817 563
Securities gains - - - 5 -
Other noninterest income 2,925 2,702 2,575 2,582 2,178
Noninterest expense 9,564 8,706 9,159 8,273 8,257
Income taxes 1,463 1,735 1,358 1,653 1,544
Net income 3,954 4,176 3,709 3,682 3,322
Less: effective dividend on preferred shares - - - - -
Net income available to common stockholders$ 3,954 $ 4,176 $ 3,709 $ 3,682 $ 3,322
Basic earnings per common share$ 0.53 $ 0.56 $ 0.50 $ 0.50 $ 0.45
Diluted earnings per common share 0.53 0.56 0.50 0.49 0.45
Dividends per common share 0.10 0.10 0.10 0.09 0.09
Average common shares outstanding:
Basic 7,450,000 7,441,000 7,437,000 7,438,000 7,435,000
Diluted 7,479,000 7,467,000 7,466,000 7,468,000 7,464,000
Return on average assets 1.07% 1.13% 1.03% 1.07% 0.99%
Return on average common stockholders' equity 11.9% 12.9% 11.6% 11.9% 11.0%
Net interest margin 3.64% 3.70% 3.81% 3.73% 3.72%
Net interest spread 3.55% 3.61% 3.70% 3.63% 3.61%
Efficiency ratio 62.3% 57.0% 60.5% 57.4% 60.3%

Matt Funke, CFO 573-778-1800

Source:Southern Missouri Bancorp, Inc.