Southern Missouri Bancorp Reports Preliminary Fiscal 2013 First Quarter Results, Declares Dividend Of $0.15 Per Common Share

Poplar Bluff, Oct. 22, 2012 (GLOBE NEWSWIRE) -- Highlights:
  • Preliminary first quarter earnings per common share (diluted)reported at $.72, down from $1.21 in the year ago period, asaverage fully-diluted common shares outstanding increased from 2.2million in the year ago period to 3.3 million in the currentquarter, and net income available to common shareholders decreasedto $2.4 million, as compared to $2.6 million in the year agoperiod.  The increase in average shares outstanding was aresult of the common stock offering completed in November2011.  Earnings per common share (diluted) were up $.04, fromthe $.68 reported for the fourth quarter of fiscal 2012, the linkedquarter.
  • For the first quarter, the Company generated an annualizedreturn on average assets of 1.42% and an annualized return onaverage common equity of 12.6%, as compared to 1.62% and 22.0%,respectively, for the same period of the prior year.  In thefourth quarter of fiscal 2012, the linked quarter, the annualizedreturn on average assets was 1.29%, and the annualized return onaverage common equity was 12.4%. 
  • Net interest margin for the first quarter was 4.30%, down fromthe 4.42% reported for the year ago period, but up from the netinterest margin of 3.94% for the fourth quarter of fiscal 2012, thelinked quarter.
  • Noninterest income was down 5.1% for the first quarter,compared to the year ago period, and down 3.0% from the fourthquarter of fiscal 2012, the linked quarter.
  • Noninterest expense was up 9.4% for the first quarter, comparedto the year ago period, and up 1.6% from the fourth quarter offiscal 2012, the linked quarter.
  • The Company posted net loan growth of $25.2 million, or 4.3%,during the first quarter; deposits decreased $12.9 million, or2.2%, as we utilized cash and brought down our cost offunds. 
  • Non-performing assets and non-performing loans increased duringthe period, as the Company worked through the resolution process ofseveral previously classified credits.

Southern Missouri Bancorp, Inc. ("Company") (NASDAQ: SMBC), theparent corporation of Southern Bank ("Bank"), today announcedpreliminary net income available to common shareholders for thefirst quarter of fiscal 2013 of $2.4 million, a decrease of$225,000, or 8.6%, as compared to $2.6 million in net incomeavailable to common shareholders earned during the same period ofthe prior fiscal year.  The decrease was attributableprimarily to an increase in noninterest expense, an increase inprovision for loan losses, and decreases in net interest income andnoninterest income.  Preliminary net income available tocommon shareholders was $.72 per fully diluted common share for thefirst quarter of fiscal 2013, a decrease of 40.4%, as compared tothe $1.21 per fully diluted common share earned during the sameperiod of the prior fiscal year.  The decrease was primarilythe result of higher average fully diluted common sharesoutstanding following the common stock offering completed inNovember 2011.  Before the dividend on preferred shares of$195,000, preliminary net income for the first quarter of fiscal2013 was $2.6 million, a decrease of $260,000, or 9.1%, as comparedto the same period of the prior fiscal year. 

Dividend Declared:

The Company is pleased to announce that the Board of Directors,on October 16, 2012, declared its 74 th consecutivequarterly dividend on common stock since the inception of theCompany.  The cash dividend of $.15 per common share will bepaid on November 30, 2012, to common stockholders of record at theclose of business on November 15 , 2012.  TheBoard of Directors and management believe the payment of aquarterly cash dividend enhances shareholder value and demonstratesour commitment to and confidence in our future prospects.

Balance Sheet Summary:

The Company experienced balance sheet growth in the firstquarter of fiscal 2013, with total assets increasing $4.4 million,or 0.6%, to $743.6 million at September 30, 2012, as compared to$739.2 million at June 30, 2012.  Balance sheet growth wasprimarily due to growth in loan balances, funded by reductions incash and available-for-sale investment balances, and by increasesin borrowings, partially offset by lower deposit balances.

Available-for-sale investments decreased $3.2 million, or 4.2%,to $72.0 million at September 30, 2012, as compared to $75.1million at June 30, 2012.  Decreases in US agency obligationsand mortgage-backed securities, partially offset by an increase inmunicipal obligations, accounted for the reduction.  Cash andequivalents were down $24.4 million, or 73.1%.

Loans, net of the allowance for loan losses, increased $25.2million, or 4.3%, to $608.7 million at September 30, 2012, ascompared to $583.5 million at June 30, 2012.  Loan balanceswere up due primarily to increases in commercial real estate andresidential real estate loans.

Non-performing loans were $5.5 million, or 0.89% of gross loans,at September 30, 2012, as compared to $2.4 million, or 0.41% ofgross loans, at June 30, 2012; non-performing assets were $6.8million, or 0.91% of total assets, at September 30, 2012, ascompared to $4.0 million, or 0.54% of total assets, at June 30,2012. Our allowance for loan losses at September 30, 2012, totaled$8.1 million, representing 1.31% of gross loans and 147% ofnon-performing loans, as compared to $7.5 million, or 1.27% ofgross loans, and 312% of non-performing loans, at June 30,2012.  The increase in non-performing loans was due a singlerelationship, previously classified, for which $2.6 million wasmoved to nonaccrual status during the quarter ended September 30,2012.  The loans were secured by commercial real estate and asingle family residence.  For these loans (and all otherimpaired loans), the Company has measured impairment under ASC310-10-35, and management believes the allowance for loan losses atSeptember 30, 2012, is adequate, based on that measurement.

Total liabilities increased $2.1 million to $646.6 million atSeptember 30, 2012, an increase of 0.3% as compared to $644.5million at June 30, 2012.  This growth was primarily theresult of an increase in Federal Home Loan Bank (FHLB) advances,partially offset by a decline in the balance of deposit accountsand securities sold under agreements to repurchase. 

Deposits decreased $12.9 million, or 2.2%, to $571.9 million atSeptember 30, 2012, as compared to $584.8 million at June 30,2012.  Decreased balances were noted primarily in certificateof deposit and interest-bearing transaction accounts.  Theaverage loan-to-deposit ratio for the first quarter of fiscal 2013was 105.3%, as compared to 99.5% for the same period of the priorfiscal year. 

FHLB advances were $42.5 million at September 30, 2012, up $18.0million, or 73.5%, from $24.5 million at June 30, 2012.  AtSeptember 30, 2012, FHLB borrowings included $18.0 million inshort-term borrowings; no short-term borrowings were outstanding atJune 30, 2012.  Securities sold under agreements to repurchasetotaled $22.9 million at September 30, 2012, as compared to $25.6million at June 30, 2012, a decrease of 10.5%.  At both dates,the full balance of repurchase agreements was held by local smallbusiness and government counterparties. 

The Company's stockholders' equity increased $2.3 million, or2.4%, to $97.0 million at September 30, 2012, from $94.7 million atJune 30, 2012.  The increase was due primarily to retention ofnet income, partially offset by cash dividends paid on common andpreferred stock.

Income Statement Summary:

The Company's net interest income for the three-month periodended September 30, 2012, was $7.4 million, a decrease of $58,000,or 0.8%, as compared to the same period of the prior fiscalyear.  The decrease was attributable to a lower net interestmargin, as we saw this measure decline to 4.30% in the currentquarter, as compared to 4.42% in the year ago period.  Thedecrease in net interest margin was partially offset by an increasein our average interest-earning asset balances, which were up 1.9%as compared to the same period of the prior fiscal year.  InDecember 2010, the Company acquired from the FDIC, as receiver,most of the assets and substantially all of the liabilities of theformer First Southern Bank (the Acquisition).  Accretion offair value discount on loans and amortization of fair valuepremiums on time deposits related to the Acquisition declined from$1.2 million in the first quarter of fiscal 2012 to $528,000 in thefirst quarter of fiscal 2013.  The change in this componentreduced net interest income by $648,000 and net interest margin by38 basis points for the current quarter as compared to the year agoperiod.  The Company expects the impact of the fair valuediscount accretion to continue to decline, over time, as the assetsacquired at a discount continue to mature or prepay.

The provision for loan losses for the three-month period endedSeptember 30, 2012, was $611,000, as compared to $517,000 in thesame period of the prior fiscal year.  As a percentage ofaverage loans outstanding, provision for the current three-monthperiod represents an annualized charge of 0.41%, as compared to0.37% for the same period of the prior fiscal year.  Theincrease in provision for the first quarter of fiscal 2013, ascompared to the same period of the prior fiscal year, wasattributed to strong loan growth, slight increases in classifiedcredits, and an increase in past-due and nonperformingcredits.  Net charge offs for the three-month period endedSeptember 30, 2012, were 0.01% of average loans, as compared to0.14% for the same period of the prior fiscal year.

The Company's noninterest income for the three-month periodended September 30, 2012, was $1.1 million, a decrease of $57,000,or 5.1%, as compared to the same period of the prior fiscalyear.  The decrease was attributed primarily to inclusion inthe prior period's result of the settlement of a legal claimobtained in the Acquisition.  Apart from that item, increaseddeposit account charges and fees (resulting from transactionaccount growth and increased NSF activity), increases in the cashvalue of bank-owned life insurance (resulting from an additionalinvestment in such policies in March 2012), and higher bank cardnetwork interchange revenues (resulting from additional bank cardtransaction volume) were partially offset by lower gains onsecondary market loan sales.    

Noninterest expense for the three-month period ended September30, 2012, was $4.1 million, an increase of $355,000, or 9.4%, ascompared to the same period of the prior fiscal year.  Theincrease was primarily attributable to higher compensation andoccupancy expenses, and reduced gains on the sale of foreclosedreal estate, and was partially offset by a decline in the cost ofproviding internet and mobile banking services.  Theefficiency ratio for the three-month period ended September 30,2012, was 48.8%, as compared to 44.0% for the same period of theprior fiscal year.  The deterioration for the three-monthperiod was the result of a 1.3% decrease in revenues, combined witha 9.4% increase in noninterest expense. 

The income tax provision for the three-month period endedSeptember 30, 2012, was $1.1 million, a decrease of $303,000, or21.0%, as compared to the same period of the prior fiscalyear.  The decline was attributed primarily to a decrease inpre-tax income, as well as a decline in the effective tax rate,from 33.6% in the first quarter of fiscal 2012, to 30.6% in thefirst quarter of fiscal 2013.  The decrease in the effectivetax rate was attributed to continued investments in tax-advantagedassets, and the lower level of pre-tax income.  

Forward-Looking Information:

Except for the historical information contained herein, thematters discussed in this press release may be deemed to beforward-looking statements that are subject to known and unknownrisks, uncertainties, and other factors that could cause the actualresults to differ materially from the forward-looking statements,including: the strength of the United States economy in general andthe strength of the local economies in which we conduct operations;fluctuations in interest rates and in real estate values; monetaryand fiscal policies of the Board of Governors of the FederalReserve System and the U.S. Government and other governmentalinitiatives affecting the financial services industry; the risks oflending and investing activities, including changes in the leveland direction of loan delinquencies and write-offs and changes inestimates of the adequacy of the allowance for loan losses; ourability to access cost-effective funding; the timely development ofand acceptance of our new products and services and the perceivedoverall value of these products and services by users, includingthe features, pricing and quality compared to competitors' productsand services; expected cost savings, synergies and other benefitsfrom the Company's merger and acquisition activities might not berealized within the anticipated time frames or at all, and costs ordifficulties relating to integration matters, including but notlimited to customer and employee retention, might be greater thanexpected; fluctuations in real estate values and both residentialand commercial real estate market conditions; demand for loans anddeposits in our market area; legislative or regulatory changes thatadversely affect our business; results of examinations of us by ourregulators, including the possibility that our regulators may,among other things, require us to increase our reserve for loanlosses or to write-down assets; the impact of technologicalchanges; and our success at managing the risks involved in theforegoing. Any forward-looking statements are based uponmanagement's beliefs and assumptions at the time they are made. Weundertake no obligation to publicly update or revise anyforward-looking statements or to update the reasons why actualresults 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, theforward-looking statements discussed might not occur, and youshould not put undue reliance on any forward-lookingstatements.
Southern MissouriBancorp, Inc.
UNAUDITED CONDENSEDCONSOLIDATED FINANCIAL INFORMATION
             
Summary Balance Sheet Data asof:          September 30,2012  June 30, 2012
             
Cash and equivalents          $              11,160,000  $              34,694,000
Available for sale securities                          71,974,000                  75,127,000
Membership stock                            3,820,000                    3,019,000
Loans receivable, net                        608,689,000                583,465,000
Bank-owned life insurance                          16,083,000                  15,957,000
Intangible assets                            1,353,000                    1,458,000
Premises and equipment                          13,086,000                  11,347,000
Other assets                          17,427,000                  14,122,000
   Total assets          $            743,592,000  $            739,189,000
             
Deposits          $            571,884,000  $            584,814,000
Securities sold under agreements torepurchase                          22,941,000                  25,642,000
FHLB advances                          42,500,000                  24,500,000
Other liabilities                            2,038,000                    2,288,000
Subordinated debt                            7,217,000                    7,217,000
   Total liabilities                        646,580,000                644,461,000
             
Preferred stock                          20,000,000                  20,000,000
Common stockholders' equity                          77,012,000                  74,728,000
   Total stockholders' equity                          97,012,000                  94,728,000
             
   Total liabilities andstockholders' equity          $            743,592,000  $            739,189,000
             
Equity to assets ratio         13.05% 12.82%
Common shares outstanding                            3,251,000                    3,248,000
Book value per common share          $                        23.69  $                        23.01
Closing market price                                   24.08                           21.50
             
Nonperforming asset data asof:          September 30,2012  June 30, 2012
             
Nonaccrual loans          $                5,495,000  $                2,398,000
Accruing loans 90 days or more past due                                         -                                   -  
Nonperforming troubled debt restructurings(1)                                         -                                   -  
   Total nonperforming loans                            5,495,000                    2,398,000
Other real estate owned (OREO)                            1,112,000                    1,426,000
Personal property repossessed                                 26,000                           9,000
Nonperforming investment securities                               125,000                       125,000
   Total nonperforming assets          $                6,758,000  $                3,958,000
             
Total nonperforming assets to totalassets         0.91% 0.54%
Total nonperforming loans to gross loans         0.89% 0.41%
Allowance for loan losses to nonperformingloans         147.06% 312.43%
Allowance for loan losses to gross loans         1.31% 1.27%
             
Performing troubled debt restructurings          $                3,271,000  $                3,138,000
             
     (1) reported here only if not otherwise listed asnonperforming (i.e., nonaccrual or 90+ days past due)
         For thethree-month period ended
Average Balance SheetData:          September 30,2012  September 30,2011
             
Interest-bearing cash equivalents          $              11,908,000  $              44,281,000
Available for sale securities and membershipstock                          75,048,000                  66,778,000
Loans receivable, gross                        602,995,000                565,966,000
   Total interest-earningassets                        689,951,000                677,025,000
Other assets                          45,010,000                  27,856,000
   Total assets          $            734,961,000  $            704,881,000
             
Interest-bearing deposits          $            520,761,000  $            532,049,000
Securities sold under agreements torepurchase                          24,567,000                  25,790,000
FHLB advances                          34,129,000                  33,500,000
Subordinated debt                            7,217,000                    7,217,000
   Total interest-bearingliabilities                        586,674,000                598,556,000
Noninterest-bearing deposits                          52,114,000                  36,968,000
Other noninterest-bearing liabilities                               367,000                    4,415,000
   Total liabilities                        639,155,000                639,939,000
             
Preferred stock                          20,000,000                  17,364,000
Common stockholders' equity                          75,806,000                  47,578,000
   Total stockholders' equity                          95,806,000                  64,942,000
             
   Total liabilities andstockholders' equity          $            734,961,000  $            704,881,000
             
         For thethree-month period ended
Summary Income StatementData:          September 30,2012  September 30,2011
             
Interest income:            
   Cash equivalents          $                     19,000  $                     29,000
   Available for salesecurities and membership stock                             489,000                       630,000
   Loans receivable                            8,854,000                    9,555,000
      Total interestincome                            9,362,000                  10,214,000
Interest expense:            
   Deposits                            1,580,000                    2,283,000
   Securities sold under agreementsto repurchase                                 48,000                         60,000
   FHLB advances                               255,000                       339,000
   Subordinated debt                                 59,000                         54,000
      Total interestexpense                            1,942,000                    2,736,000
Net interest income                            7,420,000                    7,478,000
Provision for loan losses                               611,000                       517,000
Noninterest income                            1,060,000                    1,116,000
Noninterest expense                            4,138,000                    3,783,000
Income taxes                            1,141,000                    1,444,000
Net income                            2,590,000                    2,850,000
   Less: effective dividend onpreferred shares                               195,000                       230,000
      Net incomeavailable to common shareholders          $                2,395,000  $                2,620,000
             
Basic earnings per common share          $                         0.74  $                         1.25
Diluted earnings per common share                                     0.72                             1.21
Dividends per common share                                     0.15                             0.12
Average common shares outstanding:            
   Basic                            3,248,000                    2,096,000
   Diluted                            3,343,000                    2,167,000
             
Return on average assets         1.41% 1.62%
Return on average common shareholders'equity         12.6% 22.0%
             
Net interest margin         4.30% 4.42%
Net interest spread         4.11% 4.20%
             
Efficiency ratio         48.8% 44.0%
CONTACT: Matt Funke, CFO          Greg Steffens, President/CEO          573-778-1800

Lorna Brannum

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