Southern Missouri Bancorp Inc. (SMBC, Financial) filed Quarterly Report for the period ended 2012-09-30.
Southern Missouri Bancorp Inc has a market cap of $80.4 million; its shares were traded at around $24.31 with a P/E ratio of 8.2 and P/S ratio of 1.9. The dividend yield of Southern Missouri Bancorp Inc stocks is 2.5%. Southern Missouri Bancorp Inc had an annual average earning growth of 10.6% over the past 10 years. GuruFocus rated Southern Missouri Bancorp Inc the business predictability rank of 3.5-star.
Interest rates during the first three months of fiscal 2013 remained near historical lows. Across the yield curve, rates declined in medium-term securities and increased in longer-term securities from June 30, 2012 through September 30, 2012. Our average yield on earning assets increased, primarily due to a lower percentage of earning assets held as cash and cash equivalents (see “Results of Operations: Comparison of the three-month periods ended September 30, 2012 and 2011 – Net Interest Income”). Relative to recent historical norms, the curve remained relatively steep, and a steep curve is generally beneficial to the Company. In December 2008, the Federal Reserve cut the targeted Federal Funds rate to a range of 0.00% to 0.25%, and in March 2009, it detailed its plan to purchase long-term mortgage-backed securities, agency debt, and long-term Treasuries. A second securities purchase program focused on US Treasuries. More recently, the Federal Reserve has continued its quantitative easing program, focused now on lowering real estate borrowing costs through purchases of mortgage-backed securities, and extending the average life of its securities portfolio. It has also indicated that it anticipates continuing its extraordinarily low short-term rate policy through at least mid-2015. In this rate environment, our net interest margin declined when comparing the first three months of fiscal 2013 to the same period of the prior year; however, the decline was attributable to fair value accounting for the Acquisition, whereby the Company acquired loans at a discount. Net interest income resulting from the accretion of that discount (and a smaller premium on acquired time deposits) declined in the first quarter of fiscal 2013 to $529,000, as compared to $1.2 million in the first quarter of fiscal 2012. The decrease of $648,000 equates to 38 basis points impact on the net interest margin. Our core net interest margin, excluding this income, improved to 4.00% in the current quarter, as compared to 3.72% in the year-ago period, primarily as a result of a decline in lower-yielding cash and cash equivalent balances, along with an increase in relatively higher-yielding loan balances. The Company expects that as the acquired loan portfolio continues to pay down, the positive impact on net interest income will continue to be reduced.
Our average net interest rate spread for the three-month period ended September 30, 2012, was 4.11%, as compared to 4.20% for the same period of the prior fiscal year. For the three-month period ended September 30, 2012, the nine basis point decline in the net interest rate spread, compared to the same period a year ago, resulted from a 60 basis point decrease in the average yield on interest-earning assets, partially offset by a 51 basis point decrease in the average cost of interest-bearing liabilities. The decline in net interest spread was attributable to the reduction in net interest income attributable to accretion of fair value discount on acquired loans and amortization of fair value premium on acquired time deposits: this component of net interest income declined from $1.2 million in the first quarter of fiscal 2012 to $529,000 in the first quarter of fiscal 2013. On our average earning asset total of $683.0 million, the decline accounted for a 38 basis point decline in the yield on average earning assets. Our growth initiatives resulted in an increase of $12.9 million, or 1.9% in the average balance of interest-earning assets, when comparing the three-month period ended September 30, 2012, with the same period of the prior fiscal year; however, more importantly, average interest-bearing cash equivalents declined by $32.3 million, while the average balance of other interest-bearing assets increased by $45.3 million.
Interest Income. Total interest income for the three-month period ended September 30, 2012, was $9.4 million, a decrease of $852,000, or 8.3%, as compared to the amount earned in the same period of the prior fiscal year. The decrease was attributed to a 60 basis point decline in the average yield on interest-earning assets, as compared to the same period of the prior fiscal year, as yields on the Company s loan and investment securities portfolios declined with market rates, partially offset by a lower percentage of interest-earning assets held in relatively low-yielding cash equivalents. The decline in the average yield was partially offset by an increase of $12.9 million, or 1.9%, in the average balance of interest-earning assets for current period, as compared to the same period of the prior fiscal year.
Noninterest Expense. Noninterest expense for the three-month period ended September 30, 2012, was $4.1 million, an increase of $355,000, or 9.4%, as compared to the same period of the prior fiscal year. The increase was primarily attributable to higher compensation and occupancy expenses, and reduced gains on the sale of foreclosed real estate, partially offset by a decline in the cost of providing internet and mobile banking services. For the three-month period ended September 30, 2012, our efficiency ratio, determined by dividing total noninterest expense by the sum of net interest income and noninterest income, was 48.8%, as compared to 44.0% for the same period of the prior fiscal year. The deterioration for the three-month period was the result of a 1.3% decrease in revenues, combined with a 9.4% increase in noninterest expense. As the Company continues to grow its balance sheet, non-interest expense will continue to increase due to compensation, expenses related to expansion, and inflation.
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Southern Missouri Bancorp Inc has a market cap of $80.4 million; its shares were traded at around $24.31 with a P/E ratio of 8.2 and P/S ratio of 1.9. The dividend yield of Southern Missouri Bancorp Inc stocks is 2.5%. Southern Missouri Bancorp Inc had an annual average earning growth of 10.6% over the past 10 years. GuruFocus rated Southern Missouri Bancorp Inc the business predictability rank of 3.5-star.
Highlight of Business Operations:
Net income for the first three months of fiscal 2013 decreased 9.1% to $2.6 million, as compared to $2.9 million earned during the same period of the prior year. After accounting for dividends on preferred stock of $195,000, net earnings available to common shareholders were $2.4 million in the three-month period ended September 30, 2012, a decrease of 8.6% as compared to the same period of the prior fiscal year. The decrease in net income compared to the year-ago period was attributable to higher noninterest expense, higher provisions for loan losses, lower net interest income, and lower noninterest income, partially offset by a lower provision for income taxes. Diluted net income available to common shareholders was $0.71 per share for the first three months of fiscal 2013, as compared to $1.21 per share for the same period of the prior year. The decrease was primarily due to the additional average shares outstanding as a result of the common offering completed in November 2011, as well as the lower net income available to common shareholders. For the first three months of fiscal 2013, noninterest expense increased $355,000, or 9.4%; provision for loan losses increased $94,000, or 18.2%; net interest income decreased $58,000, or 0.8%; noninterest income decreased $57,000, or 5.1%; and provision for income taxes decreased $303,000, or 21.0%, as compared to the same period of the prior fiscal year. For more information see “Results of Operations.”Interest rates during the first three months of fiscal 2013 remained near historical lows. Across the yield curve, rates declined in medium-term securities and increased in longer-term securities from June 30, 2012 through September 30, 2012. Our average yield on earning assets increased, primarily due to a lower percentage of earning assets held as cash and cash equivalents (see “Results of Operations: Comparison of the three-month periods ended September 30, 2012 and 2011 – Net Interest Income”). Relative to recent historical norms, the curve remained relatively steep, and a steep curve is generally beneficial to the Company. In December 2008, the Federal Reserve cut the targeted Federal Funds rate to a range of 0.00% to 0.25%, and in March 2009, it detailed its plan to purchase long-term mortgage-backed securities, agency debt, and long-term Treasuries. A second securities purchase program focused on US Treasuries. More recently, the Federal Reserve has continued its quantitative easing program, focused now on lowering real estate borrowing costs through purchases of mortgage-backed securities, and extending the average life of its securities portfolio. It has also indicated that it anticipates continuing its extraordinarily low short-term rate policy through at least mid-2015. In this rate environment, our net interest margin declined when comparing the first three months of fiscal 2013 to the same period of the prior year; however, the decline was attributable to fair value accounting for the Acquisition, whereby the Company acquired loans at a discount. Net interest income resulting from the accretion of that discount (and a smaller premium on acquired time deposits) declined in the first quarter of fiscal 2013 to $529,000, as compared to $1.2 million in the first quarter of fiscal 2012. The decrease of $648,000 equates to 38 basis points impact on the net interest margin. Our core net interest margin, excluding this income, improved to 4.00% in the current quarter, as compared to 3.72% in the year-ago period, primarily as a result of a decline in lower-yielding cash and cash equivalent balances, along with an increase in relatively higher-yielding loan balances. The Company expects that as the acquired loan portfolio continues to pay down, the positive impact on net interest income will continue to be reduced.
Our average net interest rate spread for the three-month period ended September 30, 2012, was 4.11%, as compared to 4.20% for the same period of the prior fiscal year. For the three-month period ended September 30, 2012, the nine basis point decline in the net interest rate spread, compared to the same period a year ago, resulted from a 60 basis point decrease in the average yield on interest-earning assets, partially offset by a 51 basis point decrease in the average cost of interest-bearing liabilities. The decline in net interest spread was attributable to the reduction in net interest income attributable to accretion of fair value discount on acquired loans and amortization of fair value premium on acquired time deposits: this component of net interest income declined from $1.2 million in the first quarter of fiscal 2012 to $529,000 in the first quarter of fiscal 2013. On our average earning asset total of $683.0 million, the decline accounted for a 38 basis point decline in the yield on average earning assets. Our growth initiatives resulted in an increase of $12.9 million, or 1.9% in the average balance of interest-earning assets, when comparing the three-month period ended September 30, 2012, with the same period of the prior fiscal year; however, more importantly, average interest-bearing cash equivalents declined by $32.3 million, while the average balance of other interest-bearing assets increased by $45.3 million.
Interest Income. Total interest income for the three-month period ended September 30, 2012, was $9.4 million, a decrease of $852,000, or 8.3%, as compared to the amount earned in the same period of the prior fiscal year. The decrease was attributed to a 60 basis point decline in the average yield on interest-earning assets, as compared to the same period of the prior fiscal year, as yields on the Company s loan and investment securities portfolios declined with market rates, partially offset by a lower percentage of interest-earning assets held in relatively low-yielding cash equivalents. The decline in the average yield was partially offset by an increase of $12.9 million, or 1.9%, in the average balance of interest-earning assets for current period, as compared to the same period of the prior fiscal year.
Noninterest Expense. Noninterest expense for the three-month period ended September 30, 2012, was $4.1 million, an increase of $355,000, or 9.4%, as compared to the same period of the prior fiscal year. The increase was primarily attributable to higher compensation and occupancy expenses, and reduced gains on the sale of foreclosed real estate, partially offset by a decline in the cost of providing internet and mobile banking services. For the three-month period ended September 30, 2012, our efficiency ratio, determined by dividing total noninterest expense by the sum of net interest income and noninterest income, was 48.8%, as compared to 44.0% for the same period of the prior fiscal year. The deterioration for the three-month period was the result of a 1.3% decrease in revenues, combined with a 9.4% increase in noninterest expense. As the Company continues to grow its balance sheet, non-interest expense will continue to increase due to compensation, expenses related to expansion, and inflation.
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