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

November 15, 2010 | About:

Southern Missouri Bancorp Inc. (NASDAQ:SMBC) filed Quarterly Report for the period ended 2010-09-30.

Southern Missouri Bancorp Inc. has a market cap of $32.57 million; its shares were traded at around $15.6 with and P/S ratio of 1.06. The dividend yield of Southern Missouri Bancorp Inc. stocks is 3.08%. Southern Missouri Bancorp Inc. had an annual average earning growth of 9.6% over the past 10 years. GuruFocus rated Southern Missouri Bancorp Inc. the business predictability rank of 4-star.

Highlight of Business Operations:

During the first three months of fiscal 2011, we grew our balance sheet by $13.2 million; this growth reflected a $17.0 million increase in net loans; a $2.0 million decrease in available-for-sale investments; and a $1.7 million decrease in cash and cash equivalents. Deposits increased $13.0 million, securities sold under agreements to repurchase were down $1.2 million, and Federal Home Loan Bank (FHLB) advances were unchanged. Growth in loans was primarily comprised of commercial real estate and commercial loans. Deposit growth was primarily in certificates of deposit and interest-bearing transaction 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. Treasury created the CPP to build capital at 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. In the 22 months since the issuance of the preferred stock to the Treasury, the Company has increased loan balances by approximately $87.8 million, or 24.9%. Additionally, the Company has contributed to the accomplishment of Treasury s objective by leveraging the investment to support the purchase of U.S. government agency bonds and mortgage-backed securities, and municipal debt, helping to improve the availability of credit in two markets that experienced distress in the financial market downturn. Since the preferred stock issuance, the Company has increased its securities portfolio balance by $23.4 million, or 57.9%. Much of these securities purchases likely would not 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 approximately $111.2 million, or 28.3%, since the preferred stock issuance.

Net income for the first three months of fiscal 2011 increased 9.5% to $1.3 million, as compared to $1.2 million earned during the same period of the prior year. After accounting for preferred stock dividends of $128,000 in the first three months of the fiscal year, net earnings available to common shareholders increased 10.6%, to $1.2 million. The increase in net income compared to the year-ago period was primarily due to a $443,000, or 10.9%, increase in net interest income, attributable

to growth in interest-earning assets; a $115,000, or16.4%, increase in noninterest income, attributable to increased NSF activity and income generated from ATM network transactions; and a decrease of $237,000, or 7.4% in noninterest expense, attributable to a recovery of provisions for off-balance sheet credit exposures, lower operating expenses (the comparable quarter of the prior fiscal year included additional expenses relating to the acquisition of the Southern Bank of Commerce), and inclusion in the prior year period of charges to write down the carrying value of fixed assets. These improvements were partially offset by an increase of $433,000, or 206.0%, in provisions for loan losses, and an increase in income tax provisions of $250,000, or 129.4%, attributable primarily to the inclusion in the prior year period of tax benefits resulting from the Southern Bank of Commerce (SBOC) acquisition. Diluted net income per common share available to common stockholders for the first three months of fiscal 2011 totaled $0.56, as compared to $0.51 for the first three months of fiscal 2010.

The Company s total assets increased by $13.2 million, or 2.4%, to $565.3 million at September 30, 2010, as compared to $552.1 million at June 30, 2010. Loans, net of the allowance for loan losses, increased $17.0 million, or 4.1%, to $435.7 million at September 30, 2010, as compared to $418.7 million at June 30, 2010. Commercial real estate loans grew $10.0 million, commercial loans grew $7.7 million, and construction loans grew $3.2 million; residential real estate loans were down $687,000. Available-for-sale investment balances decreased by $2.0 million, or 3.0%, to $65.0 million at September 30, 2010, as compared to $67.0 million at June 30, 2010.

Asset growth during the first three months of fiscal 2011 has been funded with deposit growth, which totaled $13.0 million, or 3.1%, bringing deposit balances to $435.9 million at September 30, 2010, as compared to $422.9 million at June 30, 2010. Growth was attributed to continued strong growth in the Company s reward checking product, and use of the State of Missouri s linked-deposit program. The increase reflected growth of $11.1 million in certificates of deposit and a $6.9 million increase in interest-bearing checking accounts; passbook and statement savings were down $3.8 million, and money market deposit accounts were down $1.1 million. Certificate of deposit growth included just $294,000 in new brokered CD funding, which totaled $7.3 million at September 30, 2010. Public unit deposits were up $6.2 million, due primarily to the linked deposit program noted above. Net retail, non-brokered deposits were up $6.5 million. FHLB advances remained at $43.5 million at September 30, 2010, unchanged from June 30, 2010. Securities sold under agreements to repurchase totaled $29.1 million at September 30, 2010, a decrease of $1.2 million, or 4.1%, compared to $30.4 million at June 30, 2010.

Read the The complete Report

About the author:

Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

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