Southern Missouri Bancorp Reports Preliminary First Quarter Results, Declares $0.16 Per Share Dividend, Schedules Conference Call To Discuss Results For Wednesday, October 23, At 3:30PM CDT

Poplar Bluff, Oct. 21, 2013 (GLOBE NEWSWIRE) -- Highlights:

·         Preliminaryfiscal year 2014 first quarter earnings per common share (diluted)reported at $.74, up from $.71 in the year ago period, as netincome available to common shareholders increased to $2.5 million,as compared to $2.4 million in the year ago period. Earnings percommon share (diluted) were up $.01, as compared to the $.73 earnedin the fourth quarter of fiscal 2013, the linked quarter.

·         For the firstquarter of fiscal 2014, the Company generated an annualized returnon average assets of 1.27% and an annualized return on averagecommon equity of 12.2%, as compared to 1.41% and 12.6%,respectively, for the same period of the prior fiscal year. In thefourth quarter of fiscal 2013, the linked quarter, the annualizedreturn on average assets was 1.28%, and the annualized return onaverage common equity was 12.2%.

·         The Companyposted loan growth of $31.1 million, or 4.8%, during the firstquarter of fiscal 2014; deposits increased $3.3 million, or 0.5%.Available-for-sale investments were up 4.8%, and cash and timedeposit balances declined 16.7%.

·         Net interestmargin for the first quarter of fiscal 2014 was 3.90%, down fromthe 4.30% reported for the year ago period, but up from the netinterest margin of 3.86% for the fourth quarter of fiscal 2013, thelinked quarter.

·         Noninterestincome was up 20.8% for the first quarter of fiscal 2014, comparedto the year ago period, and up 11.6% from the fourth quarter offiscal 2013, the linked quarter.

·         Noninterestexpense was up 10.4% for the first quarter of fiscal 2014, comparedto the year ago period, and up 1.4% from the fourth quarter offiscal 2013, the linked quarter.

·         Non-performingassets decreased to $3.6 million at September 30, 2013, as comparedto $4.6 million at June 30, 2013. At September 30, 2013,non-performing assets were 0.43% of total assets, as compared to0.58% at June 30, 2013.

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 2014 of $2.5 million, an increase of$118,000, or 4.9%, as compared to $2.4 million in net incomeavailable to common shareholders earned during the same period ofthe prior fiscal year. The increase was attributable to an increasein noninterest income and reductions in provision for income taxand provision for loan losses, partially offset by an increase innoninterest expense and a decrease in net interest income.Preliminary net income available to common shareholders was $.74per fully diluted common share for the first quarter of fiscal2014, an increase of 4.2% as compared to the $.71 per fully dilutedcommon share earned during the same period of the prior fiscalyear. Before the dividend on preferred shares of $50,000,preliminary net income for the first quarter of fiscal 2014 was$2.6 million, a decrease of $27,000, or 1.0%, as compared to thesame period of the prior fiscal year.

Dividend Declared:

The Company is pleased to announce that the Board of Directors,on October 15, 2013, declared its 78 th consecutivequarterly dividend on common stock since the inception of theCompany. The cash dividend of $.16 per common share will be paid onNovember 29, 2013, to common stockholders of record at the close ofbusiness on November 15 , 2013. The Board ofDirectors and management believe the payment of a quarterly cashdividend enhances shareholder value and demonstrates our commitmentto and confidence in our future prospects.

Recent Developments:

The Company previously announced on October 4 the completion ofits acquisition of Ozarks Legacy Community Financial, Inc. ("OzarksLegacy"), and its subsidiary, Bank of Thayer, in an all-cashtransaction. The acquired financial institution was merged with andinto the Company's subsidiary, Southern Bank. The first quarterresults do not reflect this acquisition.

Conference Call:

The Company will host a conference call to review theinformation provided in this press release on Wednesday, October23, 2013, at 3:30 p.m., CDT (4:30 p.m., EDT). The call will beavailable live to interested parties by calling 1-888-317-6016 inthe United States (Canada: 1-855-669-9657, international:1-412-317-6016). Telephone playback will be available one hourfollowing the conclusion of the call, until 8:00 a.m., CST, onNovember 7, 2013. The playback may be accessed by dialing1-877-344-7529 (Canada: 1-855-669-9658, international:1-412-317-0088), and using the conference passcode 10036064.

Balance Sheet Summary:

The Company experienced balance sheet growth in the firstquarter of fiscal 2014, with total assets increasing $35.2 million,or 4.4%, to $831.6 million at September 30, 2013, as compared to$796.4 million at June 30, 2013. Balance sheet growth was primarilydue to growth in loan and available-for-sale securities balances.Balance sheet growth was funded primarily with Federal Home LoanBank (FHLB) advances, increases in deposit balances, and retentionof net income.

Available-for-sale investments increased $3.9 million, or 4.8%,to $83.9 million at September 30, 2013, as compared to $80.0million at June 30, 2013. The increase was primarily attributableto investments in mortgage-backed securities and agencybonds.  Cash equivalents and time deposits were down $2.3million, or 16.7%, as compared to June 30, 2013.

Loans, net of the allowance for loan losses, increased $31.1million, or 4.8%, to $678.2 million at September 30, 2013, ascompared to $647.2 million at June 30, 2013. Increases incommercial real estate, residential, and commercial lending werepartially offset by decreases in construction loan balances.Residential real estate loan growth was primarily attributable toloans secured by multi-family housing.

Non-performing loans were $1.2 million, or 0.17% of gross loans,at September 30, 2013, as compared to $1.4 million, or 0.22% ofgross loans, at June 30, 2013; non-performing assets were $3.6million, or 0.43% of total assets, at September 30, 2013, ascompared to $4.6 million, or 0.58% of total assets, at June 30,2013. Our allowance for loan losses at September 30, 2013, totaled$8.8 million, representing 1.28% of gross loans and 763% ofnon-performing loans, as compared to $8.4 million, or 1.28% ofgross loans, and 584% of non-performing loans, at June 30, 2013.The decrease in non-performing assets was attributable primarily tothe sale of foreclosed real estate.  For one relationshipwhich accounted for $2.1 million in foreclosed real estate balancesat June 30, 2013, the sale of certain properties reduced thecarrying amount to $1.7 million at September 30, 2013, with thatremaining balance comprised entirely of commercial real estate. Forall impaired loans, the Company has measured impairment under ASC310-10-35, and management believes the allowance for loan losses atSeptember 30, 2013, is adequate, based on that measurement.

Total liabilities increased $33.9 million to $728.4 million atSeptember 30, 2013, an increase of 4.9% as compared to $694.6million at June 30, 2013. This growth was primarily the result ofan increase in FHLB advances.   

Deposits increased $3.3 million, or 0.5%, to $635.7 million atSeptember 30, 2013, as compared to $632.4 million at June 30, 2013.Increased balances were noted in certificates of deposit andinterest-bearing checking accounts, and were partially offset bydecreases in noninterest-bearing checking, savings, and moneymarket deposit accounts. The average loan-to-deposit ratio for thefirst quarter of fiscal 2014 was 104.6%, as compared to 105.3% forthe same period of the prior fiscal year.

FHLB advances were $61.9 million at September 30, 2013, anincrease of $37.4 million, or 152.5%, as compared to $24.5 millionat June 30, 2013. The increase was attributable to the use ofovernight borrowings to fund asset growth. Securities sold underagreements to repurchase totaled $21.4 million at September 30,2013, as compared to $27.8 million at June 30, 2013, a decrease of23.0%. At both dates, the full balance of repurchase agreements wasdue to local small business and government counterparties. TheCompany has encouraged these counterparties to migrate to a sweptdeposit product that places their funds in other FDIC-insureddepositories, while providing funding to our institution under areciprocal arrangement, in order to improve the Company'sliquidity.

The Company's stockholders' equity increased $1.3 million, or1.3%, to $103.2 million at September 30, 2013, from $101.8 millionat June 30, 2013. The increase was due primarily to retention ofnet income, partially offset by cash dividends paid on common andpreferred stock, and by a decrease in accumulated othercomprehensive income, as the market value of the available-for-saleinvestment portfolio declined, net of tax, the result of a generalincrease in market interest rates.

Income Statement Summary:

The Company's net interest income for the three-month periodended September 30, 2013, was $7.4 million, a decrease of $47,000,or 0.6%, as compared to the same period of the prior fiscal year.The decrease was attributable to a 40-basis point decrease in netinterest margin, from 4.30% to 3.90%, partially offset by a 9.6%increase in the average balance of interest-earning assets.

In December 2010, the Company acquired from the FDIC, asreceiver, most of the assets and assumed substantially all of theliabilities of the former First Southern Bank (the Acquisition).Accretion of fair value discount on loans and amortization of fairvalue premiums on time deposits related to the Acquisition declinedfrom $529,000 in the first quarter of fiscal 2013 to $204,000 inthe first quarter of fiscal 2014. This component of net interestincome contributed 11 basis points to net interest margin in thefirst quarter of fiscal 2014, as compared to 30 basis points in thefirst quarter of fiscal 2013. The Company expects the impact of thefair value discount accretion to continue to decline, over time, asthe assets acquired at a discount continue to mature or prepay.

The provision for loan losses for the three-month period endedSeptember 30, 2013, was $500,000, as compared to $611,000 in thesame period of the prior fiscal year. As a percentage of averageloans outstanding, provision for loan losses in the currentthree-month period represented an annualized charge of 0.30%, ascompared to 0.41% for the same period of the prior fiscal year. Thedecrease in the provision was attributed primarily to the low levelof classified and delinquent loans, partially offset by an increasein loan balances. Net charge offs for the first quarter of fiscal2014 were 0.05% of average loans, annualized, as compared to 0.13%for both fiscal year 2012 and fiscal year 2013.

The Company's noninterest income for the three-month periodended September 30, 2013, was $1.3 million, an increase of$220,000, or 20.8%, as compared to the same period of the priorfiscal year. The increase was attributed primarily to increaseddeposit account charges and fees (resulting from transactionaccount growth and increased NSF activity), gains on sales ofresidential loans into the secondary market, and increased bankcard interchange income.

Noninterest expense for the three-month period ended September30, 2013, was $4.6 million, an increase of $429,000, or 10.4%, ascompared to the same period of the prior fiscal year. The increasewas attributable primarily to increases in employee compensationand benefits, legal and professional fees, occupancy, andadvertising.  Legal fees in the current period included$125,000 related to the October 4 acquisition of Ozarks Legacy. Theefficiency ratio for the three-month period ended September 30,2013, was 52.8%, as compared to 48.8% for the same period of theprior fiscal year. The deterioration resulted from an increase of10.4% in noninterest expense, partially offset by a combined 2.0%increase in net interest income and noninterest income. Exclusiveof the reduction in the accretion of fair value discount on loansand amortization of fair value premiums on time deposits related tothe Acquisition, discussed above, the Company would have seen acombined increase in net interest income and noninterest income of5.9% in the three-month period ended September 30, 2013, ascompared to the same period of the prior fiscal year.

The income tax provision for the three-month period endedSeptember 30, 2013, was $1.0 million, a decrease of $117,000, or10.3%, as compared to the same period of the prior fiscal year. Thedecrease was attributed to lower pre-tax income, as well as adecline in the effective tax rate, to 28.5% in the current period,as compared to 30.6% in the same period of the prior fiscal year.The decline in the effective tax rate was attributed to continuedadditional investments in tax-advantaged assets.

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 30,2013  June 30, 2013
             
Cash equivalents and time deposits          $                11,469,000  $                13,769,000
Available for sale securities                            83,850,000                    80,004,000
Membership stock                              4,396,000                      3,011,000
Loans receivable, gross                          687,036,000                  655,552,000
   Allowance for loan losses                              8,795,000                      8,386,000
Loans receivable, net                          678,241,000                  647,166,000
Bank-owned life insurance                            16,596,000                    16,467,000
Intangible assets                                 936,000                      1,040,000
Premises and equipment                            18,629,000                    17,516,000
Other assets                            17,491,000                    17,418,000
   Total assets          $              831,608,000  $              796,391,000
             
Interest-bearing deposits          $              592,388,000  $              586,937,000
Noninterest-bearing deposits                           43,291,000                     45,442,000
Securities sold under agreements torepurchase                            21,390,000                    27,788,000
FHLB advances                            61,870,000                    24,500,000
Other liabilities                              2,282,000                      2,678,000
Subordinated debt                              7,217,000                      7,217,000
   Total liabilities                          728,438,000                  694,562,000
             
Preferred stock                            20,000,000                    20,000,000
Common stockholders' equity                            83,170,000                    81,829,000
   Total stockholders' equity                          103,170,000                  101,829,000
             
   Total liabilities andstockholders' equity          $              831,608,000  $              796,391,000
             
Equity to assets ratio         12.41% 12.79%
Common shares outstanding                              3,297,000                      3,294,000
   Less: Restricted common sharesnot vested                                   32,000                           32,000
Common shares for book valuedetermination                              3,265,000                      3,262,000
Book value per common share          $                         25.47  $                         25.09
Closing market price                                     26.60                             25.67
             
Nonperforming asset data asof:          September 30,2013  June 30, 2013
             
Nonaccrual loans          $                  1,153,000  $                  1,437,000
Accruing loans 90 days or more past due                                           -                                     -  
Nonperforming troubled debt restructurings(1)                                           -                                     -  
   Total nonperforming loans                              1,153,000                      1,437,000
Other real estate owned (OREO)                              2,292,000                      3,030,000
Personal property repossessed                                   44,000                           46,000
Nonperforming investment securities                                 125,000                         125,000
   Total nonperforming assets          $                  3,614,000  $                  4,638,000
             
Total nonperforming assets to totalassets         0.43% 0.58%
Total nonperforming loans to gross loans         0.17% 0.22%
Allowance for loan losses to nonperformingloans         762.79% 583.58%
Allowance for loan losses to gross loans         1.28% 1.28%
             
Performing troubled debt restructurings          $                  4,735,000  $                  4,883,000
 
     (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 30,2013  September 30,2012
             
Interest-bearing cash equivalents          $                  6,010,000  $                11,908,000
Available for sale securities and membershipstock                            86,721,000                    75,048,000
Loans receivable, gross                          663,495,000                  602,995,000
   Total interest-earningassets                          756,226,000                  689,951,000
Other assets                            47,916,000                    44,957,000
   Total assets          $              804,142,000  $              734,908,000
             
Interest-bearing deposits          $              589,331,000  $              520,761,000
Securities sold under agreements torepurchase                            22,868,000                    24,567,000
FHLB advances                            36,745,000                    34,129,000
Subordinated debt                              7,217,000                      7,217,000
   Total interest-bearingliabilities                          656,161,000                  586,674,000
Noninterest-bearing deposits                            45,238,000                    52,114,000
Other noninterest-bearing liabilities                                 549,000                         314,000
   Total liabilities                          701,948,000                  639,102,000
             
Preferred stock                            20,000,000                    20,000,000
Common stockholders' equity                            82,194,000                    75,806,000
   Total stockholders' equity                          102,194,000                    95,806,000
             
   Total liabilities andstockholders' equity          $              804,142,000  $              734,908,000
         For thethree-month period ended
Summary Income StatementData:          September 30,2013  September 30,2012
             
Interest income:            
   Cash equivalents          $                         3,000  $                       19,000
   Available for sale securitiesand membership stock                                 497,000                         489,000
   Loans receivable                              8,665,000                      8,854,000
      Total interestincome                              9,165,000                      9,362,000
Interest expense:            
   Deposits                              1,449,000                      1,580,000
   Securities sold under agreementsto repurchase                                   31,000                           48,000
   FHLB advances                                 256,000                         255,000
   Subordinated debt                                   56,000                           59,000
      Total interestexpense                              1,792,000                      1,942,000
Net interest income                              7,373,000                      7,420,000
Provision for loan losses                                 500,000                         611,000
Noninterest income                              1,280,000                      1,060,000
Noninterest expense                              4,567,000                      4,138,000
Income taxes                              1,023,000                      1,141,000
Net income                              2,563,000                      2,590,000
   Less: effective dividend onpreferred shares                                   50,000                         195,000
      Net incomeavailable to common shareholders          $                  2,513,000  $                  2,395,000
             
Basic earnings per common share          $                           0.76  $                           0.73
Diluted earnings per common share                                       0.74                               0.71
Dividends per common share                                       0.16                               0.15
Average common shares outstanding:            
   Basic                              3,295,000                      3,288,000
   Diluted                              3,389,000                      3,383,000
             
Return on average assets         1.27% 1.41%
Return on average common stockholders'equity         12.2% 12.6%
             
Net interest margin         3.90% 4.30%
Net interest spread         3.76% 4.11%
             
Efficiency ratio         52.8% 48.8%

Lorna Brannum

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