Southern Missouri Bancorp Reports Preliminary Second Quarter Results, Declares $0.16 Per Share Dividend, Schedules Conference Call To Discuss Results For Wednesday, January 29, At 3:30PM CST

Poplar Bluff, Jan. 27, 2014 (GLOBE NEWSWIRE) -- Highlights:

·         Preliminaryfiscal year 2014 second quarter earnings per common share (diluted)reported at $.73, up from $.72 in the year ago period, as netincome available to common shareholders increased to $2.5 million,compared to $2.4 million in the year ago period. Earnings percommon share (diluted) were down $.01, as compared to the $.74earned in the first quarter of fiscal 2014, the linked quarter.

·         For the secondquarter of fiscal 2014, the Company generated an annualized returnon average assets of 1.09% and an annualized return on averagecommon equity of 11.7%, as compared to 1.32% and 12.5%,respectively, for the same period of the prior fiscal year. In thefirst quarter of fiscal 2014, the linked quarter, the annualizedreturn on average assets was 1.27%, and the annualized return onaverage common equity was 12.2%. Profitability was negativelyimpacted by charges related to the acquisition and data conversionof the Bank of Thayer. The transaction closed in October andsystems conversion was completed in December, 2013.

·         The Companyposted loan growth of $102.3 million, or 15.6%, during the firstsix months of fiscal 2014; deposits increased $97.4 million, or15.4%. Available-for-sale (AFS) securities were up $33.3 million,and cash and time deposit balances were up $7.1 million. TheOctober 2013 acquisition of the Bank of Thayer accounted for $39.4million in loan growth, $68.2 million in deposit growth, and $34.3million in AFS securities growth.

·         Net interestmargin for the second quarter of fiscal 2014 was 3.83%, down fromthe 4.17% reported for the year ago period, and from the netinterest margin of 3.90% for the first quarter of fiscal 2014, thelinked quarter.

·         Noninterestincome was up 49.0% for the second quarter of fiscal 2014, comparedto the year ago period, and up 30.1% from the first quarter offiscal 2014, the linked quarter. The current period's noninterestincome included $109,000 in realized gains on AFS securities.

·         Noninterestexpense was up 40.2% for the second quarter of fiscal 2014,compared to the year ago period, and up 36.3% from the firstquarter of fiscal 2014, the linked quarter. The current period'snoninterest expense included $563,000 attributable to legal anddata conversion charges related to the acquisition of the Bank ofThayer, and $57,000 in legal charges related to the acquisition ofCitizens State Bank.

·         Non-performingassets were $4.8 million, or 0.51% of total assets, at December 31,2013, as compared to $4.6 million, or 0.58% of total assets, atJune 30, 2013. At the previous quarter end, September 30, 2013,non-performing assets were $3.6 million, or 0.43% of totalassets.

Southern Missouri Bancorp, Inc. ("Company") (NASDAQ: SMBC), theparent corporation of Southern Bank ("Bank"), today announcedpreliminary net income available to common shareholders for thesecond quarter of fiscal 2014 of $2.5 million, an increase of$38,000, or 1.6%, as compared to $2.4 million in the same period ofthe prior fiscal year. The increase was attributable to increasesin net interest income and noninterest income, as well asreductions in provisions for loan losses and income taxes, and waspartially offset by an increase in noninterest expense. Preliminarynet income available to common shareholders was $.73 per fullydiluted common share for the second quarter of fiscal 2014, anincrease of 1.4% as compared to the $.72 per fully diluted commonshare earned during the same period of the prior fiscal year.

Preliminary net income available to common shareholders for thefirst six months of fiscal 2014 was announced at $5.0 million, anincrease of $156,000, or 3.2%, as compared to $4.8 million in thesame period of the prior fiscal year. The increase was attributableto increases in net interest income and noninterest income, as wellas reductions in provisions for loan losses and income taxes, andwas partially offset by an increase in noninterest expense.Preliminary net income available to common shareholders was $1.47per fully diluted common share for the first six months of fiscal2014, an increase of 2.8% as compared to the $1.43 per fullydiluted common share earned during the same period of the priorfiscal year.

Dividend Declared:

The Company is pleased to announce that the Board of Directors,on January 21, 2014, declared its 79 th consecutivequarterly dividend on common stock since the inception of theCompany. The cash dividend of $.16 per common share will be paid onFebruary 28, 2014 to common stockholders of record at the close ofbusiness on February 14, 2014. The Board of Directors andmanagement believe the payment of a quarterly cash dividendenhances shareholder value and demonstrates our commitment to andconfidence in our future prospects.

Recent Developments:

The Company previously announced on November 7, 2013, thesigning of a definitive merger agreement whereby Citizens StateBankshares of Bald Knob, Inc., and its subsidiary, Citizens StateBank, Bald Knob, Arkansas, will be acquired in an all-cashtransaction.  The acquired financial institution will bemerged with and into Southern Bank.  The transaction isexpected to close in April, 2014.

Conference Call:

The Company will host a conference call to review theinformation provided in this press release on Wednesday, January29, 2014, at 3:30 p.m., CST (4:30 p.m., EST). 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, through February 13, 2014.The playback may be accessed by dialing 1-877-344-7529 (Canada:1-855-669-9658, international: 1-412-317-0088), and using theconference passcode 10040314.

Balance Sheet Summary:

The Company experienced balance sheet growth in the first sixmonths of fiscal 2014, with total assets increasing $153.8 million,or 19.3%, to $950.2 million at December 31, 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 and increases in deposit balances. Balance sheet growth was attributable primarily to organic loangrowth and the October acquisition of the Bank of Thayer, whichaccounted for approximately $74.9 million in asset growth.

Available-for-sale investments increased $33.3 million, or41.6%, to $113.3 million at December 31, 2013, as compared to $80.0million at June 30, 2013. The increase was primarily attributableto the October acquisition of the Bank of Thayer, which included$34.3 million in securities balances.  The increase consistedof investments in mortgage-backed securities and municipal bonds.Cash equivalents and time deposits increased $7.1 million, or51.5%, as compared to June 30, 2013.

Loans, net of the allowance for loan losses, increased $101.6million, or 15.7%, to $748.7 million at December 31, 2013, ascompared to $647.2 million at June 30, 2013. The increase wasprimarily attributable to organic growth and the Octoberacquisition of the Bank of Thayer, which included $39.4 million inloans, at fair value.  The increase consisted of residentialreal estate and commercial real estate loans.  The increase inresidential real estate loans was split roughly equally between1-to-4 family and multi-family collateral.

Non-performing loans were $1.7 million, or 0.22% of gross loans,at December 31, 2013, as compared to $1.4 million, or 0.22% ofgross loans, at June 30, 2013; non-performing assets were $4.8million, or 0.51% of total assets, at December 31, 2013, ascompared to $4.6 million, or 0.58% of total assets, at June 30,2013. Our allowance for loan losses at December 31, 2013, totaled$9.1 million, representing 1.20% of gross loans and 548% 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 increase in non-performing assets was attributable primarily toforeclosed real estate obtained in the October acquisition of theBank of Thayer, consisting mostly of commercial real estate, andwas partially offset by sales of legacy foreclosed real estate. Forone relationship, which accounted for $2.1 million in foreclosedreal estate balances at June 30, 2013, the sale of certainproperties reduced the carrying amount to $1.7 million at December31, 2013, with that remaining balance comprised entirely ofcommercial real estate. For all impaired loans, the Company hasmeasured impairment under ASC 310-10-35, and management believesthe allowance for loan losses at December 31, 2013, is adequate,based on that measurement.

Total liabilities increased $150.7 million to $845.2 million atDecember 31, 2013, an increase of 21.7% as compared to $694.6million at June 30, 2013. This growth was attributable to theOctober acquisition of the Bank of Thayer, organic deposit growth,and the use of FHLB advances to fund organic loan growth.

Deposits increased $97.4 million, or 15.4%, to $729.8 million atDecember 31, 2013, as compared to $632.4 million at June 30, 2013.The increase was primarily attributable to the October acquisitionof the Bank of Thayer, which included $68.2 million in deposits, atfair value, and organic growth. The increase consisted ofinterest-bearing checking, certificates of deposit,noninterest-bearing checking accounts, money market depositaccounts, and savings accounts.  The average loan-to-depositratio for the second quarter of fiscal 2014 was 103.6%, as comparedto 105.8% for the same period of the prior fiscal year.

FHLB advances were $80.9 million at December 31, 2013, anincrease of $56.4 million, or 230.2%, as compared to $24.5 millionat June 30, 2013. The increase was attributable primarily to theuse of overnight borrowings to fund asset growth. Securities soldunder agreements to repurchase totaled $21.8 million at December31, 2013, as compared to $27.8 million at June 30, 2013, a decreaseof 21.5%. At both dates, the full balance of repurchase agreementswas due 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 $3.2 million, or3.1%, to $105.0 million at December 31, 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, as a result of a generalincrease in market interest rates.

Income Statement Summary:

The Company's net interest income for the three-month andsix-month periods ended December 31, 2013, was $8.3 million and$15.7 million, respectively, increases of $1.0 million, or 13.6%,and $954,000, or 6.5%, respectively, as compared to the sameperiods of the prior fiscal year. The increase in the three-monthperiod was attributable to a 23.6% increase in the average balanceof interest-earning assets, partially offset by a decrease in netinterest margin, from 4.17% to 3.83%. The increase in the six-monthperiod was attributable to a 16.7% increase in the average balanceof interest-earning assets, partially offset by a decrease in thenet interest margin, from 4.23% to 3.86%.

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, Batesville, Arkansas(the Acquisition). Accretion of fair value discount on loans andamortization of fair value premiums on time deposits related to theAcquisition declined to $168,000 and $372,000, respectively, forthe three- and six-month periods ended December 31, 2013, ascompared to $366,000 and $895,000, respectively, in the sameperiods of the prior fiscal year.  This component of netinterest income contributed eight and nine basis points,respectively, to net interest margin in the three- and six-monthperiods ended December 31, 2013, as compared to 21 and 26 basispoints, respectively, in the same periods of the prior fiscalyear.  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- and six-monthperiods ended December 31, 2013, was $295,000 and $794,000,respectively, as compared to $462,000 and $1.1 million,respectively, in the same period of the prior fiscal year. As apercentage of average loans outstanding, provision for loan lossesin the current three- and six-month periods represented anannualized charge of .16% and .23%, respectively, as compared to.30% and .35%, respectively, for the same periods of the priorfiscal year. The decrease in the provision was attributed primarilyto low levels of net charge offs, as well as low classified anddelinquent loan balances, partially offset by an increase in loanbalances. Net charge offs for the three-month period ended December31, 2013, were immaterial, and net charge offs for the six-monthperiod ended December 31, 2013, were an annualized .03% of averageloans, as compared to 0.13% for both fiscal year 2012 and fiscalyear 2013.

The Company's noninterest income for the three- and six-monthperiods ended December 31, 2013, was $1.7 million and $2.9 million,respectively, increases of $548,000, or 49.0%, and $768,000, or35.3%, respectively, as compared to the same periods of the priorfiscal year. The increases were attributed primarily to increaseddeposit account charges and fees (resulting from the October 2013acquisition of the Bank of Thayer, transaction account growth andincreased NSF activity), $109,000 in gains realized on AFSsecurities, gains on sales of residential loans into the secondarymarket, increased loan fees, and increased bank card interchangeincome.

Noninterest expense for the three- and six-month periods endedDecember 31, 2013, was $6.2 million and $10.8 million,respectively, increases of $1.8 million, or 40.2%, and $2.2million, or 25.8%, respectively, as compared to the same periods ofthe prior fiscal year. The increases included $620,000 and$745,000, respectively, in merger-related charges recognized in thethree- and six-month periods ended December 31, 2013, related tothe completed acquisition of Bank of Thayer and the pendingacquisition of Citizens State Bank, Bald Knob, and wereattributable primarily to legal and professional fees, employeecompensation and benefits, occupancy, advertising,telecommunications, bank card interchange expense, internet bankingcharges, and additional amortization of a core deposit intangibleresulting from the acquisition of the Bank of Thayer. Theefficiency ratio, excluding securities gains or losses, for thethree- and six-month periods ended December 31, 2013, was 63.0% and58.2%, respectively, as compared to 52.6% and 50.7%, respectively,for the same periods of the prior fiscal year. The deteriorationresulted from increases of 40.2% and 25.8%, respectively, innoninterest expense, partially offset by combined 17.0% and 9.5%increases, respectively, in net interest income and noninterestincome, and was attributable primarily to merger-related chargesand the decreased accretion of fair value discount on loansresulting from the acquisition.

The income tax provision for the three- and six-month periodsended December 31, 2013, was $957,000, and $2.0 million, decreasesof $107,000, or 10.1%, and $225,000, or 10.2%, as compared to thesame period of the prior fiscal year. The decreases were attributedto lower pre-tax income, as well as a decline in the effective taxrate, to 27.5% and 28.0%, respectively, in the current three- andsix-month periods, as compared to 30.0% and 30.3%, respectively, inthe same periods of the prior fiscal year. The decline in theeffective tax rate was attributed to continued additionalinvestments 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:         December 31, 2013 June 30, 2013
             
Cash equivalents and time deposits          $             20,865,000  $             13,769,000
Available for sale (AFS) securities                       113,298,000                 80,004,000
Membership stock                           5,273,000                   3,011,000
Loans receivable, gross                       757,815,000               655,552,000
   Allowance for loan losses                           9,085,000                   8,386,000
Loans receivable, net                       748,730,000               647,166,000
Bank-owned life insurance                         16,726,000                 16,467,000
Intangible assets                           3,667,000                   1,040,000
Premises and equipment                         19,843,000                 17,516,000
Other assets                         21,809,000                 17,418,000
   Total assets          $           950,211,000  $           796,391,000
             
Interest-bearing deposits          $           671,531,000  $           586,937,000
Noninterest-bearing deposits                         58,260,000                 45,442,000
Securities sold under agreements torepurchase                         21,801,000                 27,788,000
FHLB advances                         80,888,000                 24,500,000
Other liabilities                           3,022,000                   2,678,000
Subordinated debt                           9,714,000                   7,217,000
   Total liabilities                       845,216,000               694,562,000
Preferred stock                         20,000,000                 20,000,000
Common stockholders' equity                         84,995,000                 81,829,000
   Total stockholders' equity                       104,995,000               101,829,000
   Total liabilities andstockholders' equity          $           950,211,000  $           796,391,000
             
Equity to assets ratio         11.05% 12.79%
             
Common shares outstanding                           3,300,000                   3,294,000
   Less: Restricted common sharesnot vested                                32,000                        32,000
Common shares for book valuedetermination                           3,268,000                   3,262,000
             
Book value per common share          $                      26.01  $                      25.09
Closing market price                                  33.27                          25.67
             
Nonperforming asset data asof:         December 31, 2013 June 30, 2013
             
Nonaccrual loans          $               1,659,000  $               1,437,000
Accruing loans 90 days or more past due                                        -                                  -  
Nonperforming troubled debt restructurings(1)                                        -                                  -  
   Total nonperforming loans                           1,659,000                   1,437,000
Other real estate owned (OREO)                           3,004,000                   3,030,000
Personal property repossessed                                48,000                        46,000
Nonperforming investment securities                              125,000                      125,000
   Total nonperforming assets          $               4,836,000  $               4,638,000
             
Total nonperforming assets to totalassets         0.51% 0.58%
Total nonperforming loans to gross loans         0.22% 0.22%
Allowance for loan losses to nonperformingloans         547.62% 583.58%
Allowance for loan losses to gross loans         1.20% 1.28%
Performing troubled debt restructurings         $               4,756,000  $               4,883,000
             
(1) reported here onlyif not otherwise listed as nonperforming (i.e., nonaccrual or 90+days past due)  
   For thethree-month period ended  For the six-monthperiod ended
Average Balance SheetData:  December 31,2013  December 31,2012  December 31,2013  December 31,2012
         
Interest-bearing cash equivalents  $               6,897,000  $               8,350,000  $               6,453,000  $             10,129,000
AFS securities and membership stock               124,617,000                 77,466,000               105,669,000                 76,257,000
Loans receivable, gross               737,502,000               617,495,000               700,499,000               610,245,000
   Total interest-earningassets               869,016,000               703,311,000               812,621,000               696,631,000
Other assets                 55,904,000                 50,471,000                 52,061,000                 47,714,000
   Total assets  $           924,920,000  $           753,782,000  $           864,682,000  $           744,345,000
         
Interest-bearing deposits  $           654,865,000  $           527,902,000  $           622,098,000  $           524,331,000
Securities sold under agreements torepurchase                 23,478,000                 26,858,000                 23,173,000                 25,713,000
FHLB advances                 73,950,000                 37,918,000                 55,348,000                 36,024,000
Subordinated debt                   9,388,000                   7,217,000                   8,302,000                   7,217,000
   Total interest-bearingliabilities               761,681,000               599,895,000               708,921,000               593,285,000
Noninterest-bearing deposits                 56,739,000                 55,519,000                 50,989,000                 53,816,000
Other noninterest-bearing liabilities                   2,102,000                      358,000                   1,476,000                      336,000
   Total liabilities               820,522,000               655,772,000               761,386,000               647,437,000
         
Preferred stock                 20,000,000                 20,000,000                 20,000,000                 20,000,000
Common stockholders' equity                 84,398,000                 78,010,000                 83,296,000                 76,908,000
   Total stockholders' equity               104,398,000                 98,010,000               103,296,000                 96,908,000
         
   Total liabilities andstockholders' equity  $           924,920,000  $           753,782,000  $           864,682,000  $           744,345,000
   For thethree-month period ended  For the six-monthperiod ended
Summary Income StatementData:  December 31,2013  December 31,2012  December 31,2013  December 31,2012
         
   Interest income:        
Cash equivalents  $                      3,000  $                    11,000  $                      6,000  $                    30,000
AFS securities and membership stock                      723,000                      457,000                   1,220,000                      945,000
Loans receivable                   9,512,000                   8,730,000                 18,177,000                 17,584,000
      Total interestincome                 10,238,000                   9,198,000                 19,403,000                 18,559,000
   Interest expense:        
Deposits                   1,505,000                   1,497,000                   2,954,000                   3,077,000
Securities sold under agreements torepurchase                        31,000                        54,000                        63,000                      102,000
FHLB advances                      286,000                      259,000                      541,000                      513,000
Subordinated debt                        85,000                        58,000                      141,000                      117,000
      Total interestexpense                   1,907,000                   1,868,000                   3,699,000                   3,809,000
Net interest income                   8,331,000                   7,330,000                 15,704,000                 14,750,000
Provision for loan losses                      295,000                      462,000                      794,000                   1,073,000
Securities gains                      109,000                                -                        109,000                                -  
Noninterest income                   1,557,000                   1,118,000                   2,837,000                   2,178,000
Noninterest expense                   6,226,000                   4,441,000                 10,793,000                   8,578,000
Income taxes                      957,000                   1,065,000                   1,981,000                   2,206,000
Net income                   2,519,000                   2,480,000                   5,082,000                   5,071,000
   Less: effective dividend onpreferred shares                        50,000                        50,000                      100,000                      245,000
Net income available to commonshareholders  $               2,469,000  $               2,430,000  $               4,982,000  $               4,826,000
         
Basic earnings per common share  $                         0.75  $                         0.74  $                         1.51  $                         1.47
Diluted earnings per common share                            0.73                            0.72                            1.47                            1.43
Dividends per common share                            0.16                            0.15                            0.32                            0.30
Average common shares outstanding:        
   Basic                   3,297,000                   3,289,000                   3,295,000                   3,289,000
   Diluted                   3,402,000                   3,384,000                   3,389,000                   3,382,000
         
Return on average assets 1.09% 1.32% 1.18% 1.36%
Return on avg. common shareholders'equity 11.7% 12.5% 12.0% 12.6%
Net interest margin 3.83% 4.17% 3.87% 4.23%
Net interest spread 3.71% 3.98% 3.74% 4.05%
Efficiency ratio, excluding AFS gains orlosses 63.0% 52.6% 58.2% 50.7%
CONTACT: Matt Funke         573.778.1800

Lorna Brannum

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