Southern Missouri Profit Climbs as Lending Margin Widens
The bank’s net interest margin expanded 20 basis points to 3.67%.
Southern Missouri Bancorp (SMBC), the Missouri-based bank holding company, reported a 28.5% increase in fiscal fourth-quarter net income as stronger lending revenue and lower operating costs outweighed higher credit provisions. Diluted earnings rose 31.7% to $1.83 a share from $1.39 a year earlier and increased 14.4% from the preceding quarter.
The quarter extended the bank’s full-year profit growth while presenting a more mixed credit picture. Fiscal 2026 net income increased 22.6% to $71.8 million, and diluted earnings rose 24.1% to $6.43 a share.
Quarterly net interest income increased 10.1% from a year earlier and 2.9% sequentially to $44.4 million. The annual gain reflected lower funding costs and 4.0% growth in average interest-earning assets. The cost of interest-bearing liabilities declined 29 basis points, partly offsetting a six-basis-point decrease in earning-asset yield.
Profitability measures also strengthened. Return on average assets rose to 1.57% from 1.27% a year earlier, while return on average equity increased to 14.0% from 11.8%. Noninterest expense declined 1.7% to $25.5 million as certain prior-year consulting costs did not recur, helping improve the efficiency ratio to 49.3% from 54.6%.
Gross loans grew $291.2 million, or 7.1%, during the year, compared with deposit growth of $126.5 million, or 3.0%. The average loan-to-deposit ratio consequently increased to 99.7% from 94.5%. Deposit funding shifted toward certificates of deposit, which rose sequentially to $1.740 billion, while nonmaturity deposits fell to $2.668 billion.
Credit costs remained a counterweight to that growth. The provision for credit losses increased to $3.2 million from $2.5 million a year earlier, reflecting higher charge-offs, an annual allowance-model update and loan growth. Nonperforming loans improved sequentially to 0.63% of gross loans, though nonperforming assets rose to 0.64% of assets as foreclosed real estate increased.
Southern Missouri raised its quarterly dividend 8.0% to $0.27 a share. The increase followed a 13.3% annual gain in tangible book value to $47.43 a share, while the widening gap between loan and deposit growth left funding mix and credit performance central to the bank’s next fiscal year.