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Southern Missouri Bancorp Inc. Reports Operating Results (10-Q)

May 15, 2009 | About:

Southern Missouri Bancorp Inc. (SMBC) filed Quarterly Report for the period ended 2009-03-31.

SOUTHERN MO BANCORP INC. is a bank holding company. Southern Missouri Bancorp Inc. has a market cap of $20.7 million; its shares were traded at around $9.9 with a P/E ratio of 6.6 and P/S ratio of 0.8. The dividend yield of Southern Missouri Bancorp Inc. stocks is 4.9%. Southern Missouri Bancorp Inc. had an annual average earning growth of 15.8% over the past 5 years.

Highlight of Business Operations:

During the first nine months of fiscal 2009, we grew our balance sheet by $37.8 million; this growth was partially due to the leveraged use of $9.6 million in preferred capital invested by the U.S. Treasury Department under the terms of their Capital Purchase Program. Growth reflected an $18.6 million increase in available-for-sale investments, a $15.4 million increase in total net loans, a $14.4 million increase in deposits, an $8.5 million increase in advances from the Federal Home Loan Bank (FHLB), and a $4.4 million increase in securities sold under agreements to repurchase. The growth in available-for-sale investments was primarily in the form of collateralized mortgage obligations (CMOs) and municipal bonds. The growth in loans was primarily due to commercial real estate, residential real estate, and commercial loan growth. Deposit growth was primarily in interest-bearing checking and certificates of deposit, partially offset by decreases in money market passbook savings and money market deposit accounts.

In December 2008, the Company announced its participation in the U.S. Treasury Department s Capital Purchase Program (CPP), which is one component of its Troubled Asset Relief Program (TARP). The Treasury invested $9.6 million in perpetual preferred stock carrying a dividend of 5% for the first five years, increasing to 9% thereafter. The Treasury Department created the CPP with the intention of building capital at healthy U.S. financial institutions in order to increase the flow of financing to U.S. businesses and consumers, and to support the U.S. economy. As of March 31, 2009, the Company has increased loan balances by $15.4 million in the current fiscal year, and by $28.5 million over the last twelve months. Additionally, the Company has contributed to the accomplishment of Treasury s objective by leveraging the investment to support the purchase of $15.1 million in agency-backed collateralized mortgage obligations (CMOs) and $5.6 million in municipal debt, helping to improve the availability of credit in two distressed markets. The majority of these securities purchases would not likely have been made by the Company, absent the Treasury investment. Including both securities and direct loans, the Company has increased its investment in credit markets by $44.7 million over the last twelve months.

Net income for the third quarter of fiscal 2009 increased 9.6% to $984,000, as compared to $898,000 earned during the same period of the prior year. After accounting for preferred stock dividends of $119,000 in the third quarter of fiscal 2009, net earnings available to common shareholders decreased 3.7%, to $865,000. The increase in net income compared to the year-ago period was primarily due to a 16.2% increase in net interest income, partially offset by a 17.8% increase in noninterest expense and a 17.1% increase in provisions for loan losses. Diluted earnings per common share for the third quarter of fiscal 2009 were $0.42, as compared to $0.40 for the third quarter of fiscal 2008. For the first nine months of fiscal 2009, net income increased 8.3% to $2.8 million, as compared to $2.6 million earned during the same period of the prior year. After accounting for preferred stock dividends of $154,000, net earnings available to common shareholders increased 2.3%, to $2.6 million. The increase in net income compared to the year-ago period was primarily due to a 23.7% increase in net interest income, partially offset by a 35.3% decrease in non-interest income – the result of charges to record the other-than-temporary impairment of Company investments – an 83.6% increase in loan loss provisions, and a 12.3% increase in non-interest expense. For both the third quarter and first nine months of fiscal 2009, our increase in net interest income was due primarily to an increase in average interest-earning assets, as well as an increase in net interest rate spread.

The Company s total assets increased by $37.8 million, or 9.0%, to $455.6 million at March 31, 2009, as compared to $417.8 million at June 30, 2008. Available-for-sale investment balances increased by $18.6 million, or 46.7%, to $58.5 million, as compared to $39.9 million at June 30, 2008. This growth was attributed to the Company s leveraged use of the investment by the U.S. Treasury Department of $9.6 million under its Capital Purchase Program. Loans, net of the allowance for loan losses, increased $15.4 million, or 4.5%, to $358.4 million at March 31, 2009, as compared to $343.1 million at June 30, 2008. Commercial real estate loan balances grew by $8.0 million, while commercial loans were up $2.2 million, as the Company continues to focus on developing this business. Residential real estate loans were up $2.7 million.

Asset growth during the first nine months of fiscal 2009 has been funded primarily with deposit growth, which totaled $14.4 million, or 4.9%, bringing deposit balances to $306.7 million at March 31, 2009, as compared to $292.3 million at June 30, 2008. The increase in deposits was due primarily to a $23.3 million increase in interest-bearing checking accounts, a $2.9 million increase in non-interest checking accounts, and a $6.1 million increase in certificates of deposit, partially offset by a $15.3 million decrease in combined money market passbook savings and money market deposit accounts, and a $2.7 million decrease in statement savings accounts. Included in those figures is a decrease in public unit funds of $13.4 million, and an increase in brokered CDs of $4.2 million, meaning that retail, non-brokered deposits were up $23.7 million since June 30, 2008. The Company attributes strong deposit growth to introduction of its new “rewards checking” product, which provides the depositor an above-market yield on their checking account when the customer meets certain conditions such as debit card use and receipt of electronic monthly statements. Deposit outflows from money market passbook savings, money market deposit accounts, and statement savings accounts are attributed to scheduled withdrawals of public unit funds, and customer preference for products offering higher yields, including our own reward checking and certificate of deposit products. The Company also used FHLB advances, which increased $8.5 million, or 13.2%, to $72.5 million at March 31, 2009, as compared to $64.1 million at June 30, 2008. Securities sold under agreements to repurchase totaled $26.2 million at March 31, 2009, an increase of $4.4 million, or 20.3%, compared to $21.8 million at June 30, 2008.

Total stockholders equity increased $10.7 million, or 35.0%, to $41.1 million at March 31, 2009, as compared to $30.5 million at June 30, 2008. The increase was primarily due to the $9.6 million investment in preferred equity by the U.S. Treasury Department under the terms of its Capital Purchase Program. Additionally, capital increased due to retention of net income, an increase in the market value of the Company s available-for-sale investment portfolio, and the exercise of stock options outstanding, partially offset by stock repurchases and cash dividends paid on both common and preferred shares.

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Rating: 2.5/5 (2 votes)

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