NASDAQ:SMBC Southern Missouri Bancorp Q4 2025 Earnings Report $56.85 -0.50 (-0.87%) Closing price 04:00 PM EasternExtended Trading$56.80 -0.05 (-0.10%) As of 04:11 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast Southern Missouri Bancorp EPS ResultsActual EPS$1.39Consensus EPS $1.23Beat/MissBeat by +$0.16One Year Ago EPSN/ASouthern Missouri Bancorp Revenue ResultsActual Revenue$47.61 millionExpected Revenue$46.60 millionBeat/MissBeat by +$1.01 millionYoY Revenue GrowthN/ASouthern Missouri Bancorp Announcement DetailsQuarterQ4 2025Date7/23/2025TimeBefore Market OpensConference Call DateThursday, July 24, 2025Conference Call Time10:30AM ETUpcoming EarningsSouthern Missouri Bancorp's Q1 2026 earnings is scheduled for Monday, August 4, 2025Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Earnings HistoryCompany ProfilePowered by Southern Missouri Bancorp Q4 2025 Earnings Call TranscriptProvided by QuartrJuly 24, 2025 ShareLink copied to clipboard.Key Takeaways Positive Sentiment: Southern Missouri Bancorp reported $1.39 diluted EPS for the June quarter, flat sequentially but up 17% year-over-year, or $1.42 on an adjusted basis excluding one-time consulting expenses. Positive Sentiment: The net interest margin expanded to 3.46% from 3.39%, and management expects further margin tailwinds from higher loan origination rates and potential Fed rate cuts. Positive Sentiment: Gross loans grew by 7.6% annualized and deposit balances rose 2% annualized, with a robust $224 million loan pipeline supporting guidance for mid-single-digit growth next fiscal year. Negative Sentiment: Provision for credit losses increased to $2.5 million, nonperforming loans climbed and the bank took a $3.8 million charge-off on a special purpose CRE loan, highlighting emerging asset-quality pressures. Neutral Sentiment: Management noted a modest uptick in M&A discussions and emphasized a strong capital position, which could enable opportunistic acquisitions though timing and targets remain uncertain. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallSouthern Missouri Bancorp Q4 202500:00 / 00:00Speed:1x1.25x1.5x2xThere are 2 speakers on the call. Operator00:00:00Hello, everyone. And thank you for joining the Southern Missouri Bancorp earnings conference call. My name is Sammy, and I'll be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by 2 to remove yourself from question queue. Operator00:00:18I would now like to hand over to our host, Stefan Chukotovich, CFO, to begin. Please go ahead, Stefan. Speaker 100:00:26Thank you, Sammy. Good morning, everyone. This is Stefan Czkotovich, CFO with Southern Missouri Bancorp. Thank you for joining us. The purpose of this call is to review the information and data presented in our quarterly earnings release dated Wednesday, 07/23/2025, and to take your questions. Speaker 100:00:43We may make certain forward looking statements during today's call, and we refer you to our cautionary statement regarding forward looking statements contained in the press release. I'm joined on the call today by Greg Stuffins, our Chairman and CEO and Matt Funke, President and Chief Administrative Officer. Matt will lead off the conversation today with some highlights from our most recent quarter and fiscal year. Thank you, Stefan, and good morning, everyone. This is Matt Funke. Speaker 100:01:10Thanks for joining us. I'll start off with some highlights from our financial results for the June, the final quarter of our fiscal year. Quarter over quarter, earnings were up slightly as we saw our net interest margin and net interest income move higher, along with an increase in noninterest income and a lower provision for income tax expense. This was partially offset by an increase in provision for credit losses. We have seen improvement in the net interest margin this year with continued loan growth and moderate operating expense growth, which improved overall earnings and profitability in fiscal twenty twenty five. Speaker 100:01:45Despite problem credits moving higher during the year off the very low levels we've seen across the industry in the last few years, we do feel we have good momentum and see positive trends going into the next fiscal year. We earned $1.39 diluted in the June, which remained unchanged from the linked March, but up $0.20 from the June or about 17% growth year over year. During the quarter, we realized 425,000 in consulting expenses associated with the negotiation of a large long term business contract, which will begin benefiting results in fiscal 'twenty six. Excluding these costs, we would have earned $1.42 for the quarter. For full year fiscal twenty twenty five, we earned $5.18 compared to $4.42 in fiscal twenty twenty four. Speaker 100:02:37The increase year over year was predominantly driven by stronger interest income, which stemmed from almost 7% earning asset growth and net interest margin expansion as our funding costs declined and the loan portfolio adjusted up with higher market rates. With this earnings growth, tangible book value per share has increased by $5.19 or just above 14% over the last twelve months to $41.87 Due to our strong capital position, with the earnings release, we also announced a $02 or 8.7% increase in our quarterly dividend, bringing it to $0.25 a share. Net interest margin for the quarter was 3.46%, up from 3.39% reported for the third quarter of fiscal twenty twenty five, the linked quarter, as we saw some spread increases, loan yields increased, and we benefited from deploying lower yielding excess earning excess interest earning cash balances into higher yielding loans. Stefan will go over more details, but in fiscal 'twenty six, we do plan to change our reported quarterly NIM calculation to be based off the annualized day count, which should reduce the volatility in the NIM due to the differences in each quarter's total days. If we calculated the net interest margin by annualizing the day count in the fourth quarter, it would have been 3.47% as compared to 3.44% in the linked quarter if calculated similarly. Speaker 100:04:04Gross loan balances increased during the quarter by $76,000,000 or 7.6% annualized and by $250,000,000 or 6.5 as compared to June 30 a year ago. Provision for credit losses was $2,500,000 up $1,600,000 over the linked quarter. The increase was primarily attributable to providing for net charge offs and to support loan growth in addition to an increase in available balances and an increase in the expected funding rate on those available balances. Greg will go into more detail on credit, and Stefan will talk about the allowance for credit losses in a bit. Deposit balances as of June 3025 increased by $20,000,000 or about 2% annualized compared to the linked quarter. Speaker 100:04:52This is a seasonally slower period for deposits due to seasonal outflows from our public units and as our agricultural clients deploy funds for the crop year. I'll hand it over now to Greg for Operator00:05:02some additional discussion. Thanks, Speaker 100:05:05Matt, and good morning, everyone. I'd like to start off talking about credit quality. Consistent with our discussions last quarter, credit quality has deteriorated somewhat from the very low levels of the last several years. It remains relatively strong at June 30 with adversely classified loans totaling $50,000,000 or 1.2% of total loans, an increase of about 830,000 and flat as a percentage of total loans during the quarter. Nonperforming loans were 23,000,000 at June 30, which increased 1,100,000.0 compared to last quarter and totaled point $5.06 percent of gross loans. Speaker 100:05:51In comparison to June 24, NPLs were up about 16,000,000 or 39 basis points higher as a percentage of total loans. Nonperforming assets were about a 100,000 lower compared to a year ago as we sold a parcel of other real estate in the fourth quarter. But the other real estate reduction was mostly offset by additional nonperforming loans. The increase in NPL this quarter was mostly due to a participation that we originated, of which our balance is 5,700,000.0 on the construction loan related to the development of senior living facility in Kansas, which was placed on non accrual status. This loan was acquired through the Citizens merger, and we're currently working through the foreclosure process. Speaker 100:06:48We are still having discussions with the borrower with the hopes to avoid foreclosure as the project included very significant capital investment by them actually exceeding our outstanding balance. As reported last quarter, we are continuing to work with borrowers on two specific purpose non owner occupied CRE properties in different states with guarantors in common and originally leased to a single tenant that has since become installed. Last quarter, these balances totaled 10,000,000 and were placed on nonaccrual. But based on updated appraisals, we took a $3,800,000 debt charge in the quarter on one of the three loans, taking the balance to 6,200,000.0 as of June 30. As of year end in total, we have about 45% specific reserves remaining on the balance of these loans. Speaker 100:07:53Loans past due thirty to eighty nine days were 6,100,000.0, down 9,000,000 from March and 15 basis points on gross profit. This is a decrease of 23 basis points compared to the linked quarter and in line compared to a year ago. Total delinquent loans were 25,600,000.0, up 1,200,000.0 from the March and up 16,400,000.0 from the June 2024. The decrease in loan thirty to eighty nine days past due was primarily due to the special purpose CRE loans mentioned earlier with a partial charge off of migration to ninety days or more past due. Despite the increase in problem loans, these issues remain at modest levels, and asset quality compares favorably to the industry. Speaker 100:08:47In combination with strong underwriting and adequate reserves, we feel comfortable with our ability to work through these credits and any potential wider deterioration that could occur as a byproduct of general economic conditions. So I don't wanna give the impression that we're accepting these trends, and we're redoubling efforts to improve our credit quality results. This quarter, Aggie real estate balances totaled 245,000,000 or 6% of gross loans, and ag production and equipment loans totaled 206,000,000 or 5% of gross loans. As compared to the prior quarter end, ag real estate balances were down 2,000,000, but they were up 12,500,000.0 compared to June 30 a year ago. Ag production loan balances were up 20,000,000 quarter over quarter due to normal seasonality and higher operating costs and up 30,000,000 year over year. Speaker 100:09:51Our ag customers began 2025 with an early planting window due to mild weather. The heavy spring rains soon delayed progress, especially from cotton and soybeans requiring some replanting. Early planted corn and soybeans are progressing well with early corn harvest likely to begin in August and early soybeans in September, both earlier than normal. Later planted crops have improved over the past month. Overall, nearly all of our farmers' acreage were planted. Speaker 100:10:27Crop mix projections for 2025 are 30% soybeans, 30% corn, 20% cotton, 15% rice, and 5% specialty crops. Corn acreage is up slightly and may yield well, but weak pricing could prompt farmers to store grain again this year. Soybean acres rose modestly as pervert producers diverted acres from other crops, especially in rice crops are in good condition, though price pressure is lowering expected returns. Cotton is showing average progress with improvement tied to drier weather conditions. Across the board, farmers face rising input costs and expenses for insurance, labor, and repairs, expenses of which continue to climb. Speaker 100:11:23Dry weather is also pushing up fuel and chemical usage for irrigation and weed control and press. Farmers are drawing more heavily on credit lines with some tapping into preapproved contingency lines. About 95% of our 2,024 profits have been sold and applied to debt. The lower commodity prices this spring have reduced expected profitability for this year. Economic commodity assisted program payments from the government has helped. Speaker 100:11:56Many farmers are anticipating a difficult margin here this year. Future pricing for key crops remains soft relative to underwriting assumptions. Corn rice, soybeans, and cotton, and wheat are each down six to 8%, and many producers remain pessimistic about positive returns for '25 and concerned about entering 2026 in a weakened position. We have seen some instances of farmers deciding to voluntarily wind down their operations earlier this year and could see that trend continue as the profitability outlook. Farm equipment prices fell this spring as dealers moved to clear inventory with lower rates. Speaker 100:12:48So most producers are deferring purchases of equipment. While 2024 was a strong production year, high cost of weak prices left many borrowers with lower working capital positions or in some instances needing restructure. Farmland values remain firm, particularly for irrigated acres. So investor demand, not farmer demand, is driving the market. With equipment values falling and cash flow tight, collateral coverage is weaker. Speaker 100:13:22Lenders are actively inspecting 2025 crop progress and will deliver yield and collateral analysis by October to get an early understanding of the outlook for our borrowers as they enter 02/1926. We are also monitoring the potential for further federal aid under the recently passed big beautiful bill of president Trump, which could be critical in supporting our farmers through what may be another financially challenging year. We are proactively working to address any potential shortfalls by leveraging FSA guaranteed programs or restructuring loans. Despite these challenges, our disciplined lending practices, stress testing of farm flow, cash flows, and deep customer relationships should ensure satisfactory performance of these trends. In addition, due to the prolonged weakness in the agricultural segment, we've heard some increased reserves for watch list bank borrowers in the March in our calculation for our allowance for credit losses. Speaker 100:14:36Looking at the loan portfolio as a whole, gross loans increased 76,000,000 during the quarter. The quarter was led by growth in c and I, multifamily, and ag production loans, with stronger growth out of our Southwest and East regions. It all contributed to a great quarter for loan growth. The fourth and first quarter is seasonally the strongest part of our year for loan growth due to seasonal factors, a. Our pipeline for loans to fund in the next ninety days is strong and totaled 224,000,000 as compared to 163,000,000 in the March and 157,000,000 a year ago. Speaker 100:15:24Despite the strong near term origination pipeline, we expect to have a higher than usual first quarter of prepayment activity that could slow some of the net loan growth. Although there remains some uncertainty surrounding the economy due to our strong pipeline as we look into fiscal twenty six, we feel optimistic about achieving another year of mid single digit loan growth for the upcoming year. Our non owner occupied CRE concentrations at bank level was approximately 302% of tier one capital and allowance at June 30, down about two percentage points compared to the March due to almost 9,000,000 in net pay downs of non owner occupied CRE and growth into account. On a consolidated basis, our c rate CRE ratio was 291% at the end of the fourth. During the year, we would expect our CRE ratio to increase somewhat, but should stay in the 300 to 325% range. Speaker 100:16:39Stefan? Thanks, Greg. Matt hit some of the key financial items already, but I wanted to share a few details. Looking at this quarter's net interest margin of 3.46% included about five basis points of fair value discount accretion on acquired loan portfolios and premium amortization on assumed deposits compared to the linked quarter of 13 basis points and 10 basis points in the prior year's June. The net interest margin expanded as the yield on interest earning assets increased four basis points, primarily due to loan yield expansion, while the cost of interest bearing liabilities decreased one basis point. Speaker 100:17:20Although the Fed funds rate hasn't been reduced further this calendar year, we are seeing opportunities to lower our CD specials as local deposit competition eased during the fourth quarter. With this, in addition to our loan portfolio still repricing up to current market rates and originating loans at a higher than the portfolio rate, we're optimistic we could see more margin expansion in fiscal twenty twenty six. As of June, our average loan origination rate was about 7.3% compared to the average loans we have maturing over the next twelve months of 6.3%. If the FOMC does cut rates later this year, we believe there is further opportunity for net interest margin expansion as our deposit pricing strategy leaves us well positioned to reduce funding costs if further rate cuts do occur. Looking at noninterest income, we're up about 9.2% compared to the linked quarter. Speaker 100:18:21This increase was largely driven by an additional card network bonus, which is based on annual buying incentives. The total bonus received in the fourth quarter was 537,000. In fiscal twenty twenty six, the estimated fee income for these annual bonuses will be accrued through the year. This item was partially offset by a $108,000 charge to reduce the fair value of our mortgage servicing rights, which stems from the decrease in market rates and associated expectations of increased prepayments. As noted in the release, we have adopted ASU 2020 three-two to now account for renewable energy tax credit benefits through a direct reduction to income taxes. Speaker 100:19:08This has resulted in lower fee income for fiscal twenty twenty five of $701,000 as it was moved to reduce tax provisions. Noninterest expense was up 2.3% compared to the linked quarter. This was primarily attributable to 425,000 consulting expense captured in legal and professional fees to negotiate a new contract with our debit card network. In addition, we saw increased expenses in data processing due to third party ancillary product expense. This is an area where we're trying to manage to stay commensurate with our earnings growth. Speaker 100:19:44Investment in new systems could be a net benefit in the longer term as we work to create more efficient processes and manage the growing complexities of the business and customer expectations. The ACL of 06/30/2025 totaled 51,600,000.0, representing 1.26% of gross loans and 224% of nonperforming loans as compared to an ACL of 54,900,000.0 or $1.37 of gross loans and 250% of nonperforming $5,300,000 of net charge offs were realized in the quarter, with $4,200,000 of the increase from the linked quarter primarily due to the special purpose CRE relationship mentioned previously and $742,000 C and I credit related to a commercial contractor. Despite the increase in charge offs for the quarter and overall year, our net charge off ratio for fiscal twenty twenty five was only 17 basis points and still compares well versus bank under $10,000,000,000 The decrease in the ACL was primarily attributable to net charge offs, which reduced the required reserve for individually evaluated loans as well as a decline in current qualitative adjustments relative to assessing expected credit losses. This decrease was partially offset by higher model losses following our annual methodology update for pooled loans, reflecting management's updated view of a deteriorating economic outlook compared to the linked quarter's assessment. Speaker 100:21:23Due to these drivers, the company recorded a provision for credit losses of 2,500,000.0 compared to 932,000 in the March. Given where we see the economic cycle and our asset quality trends, we would expect to see an uptick in the normal quarterly provision. Despite some additional credit charges during fiscal twenty twenty five, we delivered strong earnings growth for the year, increasing profitability to a 1.21% return on average assets and 11.4% return on average equity. Looking back over the past five years, even with the margin pressure experienced in 2024, we have compounded tangible book value by 10% annually while returning an average of 17% of earnings to shareholders through cash dividends. With this track record, we remain focused on driving continued growth in fiscal twenty twenty six and sustaining long term value creation for our shareholders. Speaker 100:22:25Craig, any closing thoughts? Yes, sir. We're proud of our accomplishments in fiscal twenty five, highlighted by the progress on our performance and improvement initiatives, a key project that is already beginning to show positive results. Thanks to the dedication of our exceptional team. We have continued to reinvest in the company, adding new talent to support our legacy of growth with the goal of translating these investments into sustained earnings strength and improved profitability in the years ahead. Speaker 100:23:01Since the last quarter, we've seen a modest uptick in M and A discussions, while market conditions have stabilized somewhat. We remain optimistic about the potential for attractive opportunities with our solid capital base and proven financial performance. Believe we are well positioned to act when the right transaction rises. Notably, there are approximately 50 banks headquartered in Missouri and 24 in Arkansas with assets between 500,000,000 and 2,000,000,000, along with a meaningful number of others in adjacent markets, providing a broad landscape for potential for potential partnerships. Thank you, Greg. Speaker 100:23:47At this time, Sammy, we're ready to take questions from our participants. So if you would, please remind folks that they may queue for questions at this time. Operator00:23:59Thank you very much. To ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by 2. And preparing to ask your question, please ensure your device is unmuted locally. Our first question comes from Matt Olney from Stephens. Operator00:24:16Your line Speaker 100:24:17is open. Please go ahead. Hey. Great. Thanks. Speaker 100:24:21Good morning. Appreciate you taking my question. Wanna start on the loan growth. Really good results we just saw. I'm curious just as the loan growth developed throughout the quarter, did it strengthen throughout the quarter? Speaker 100:24:36Or was it steady? Just trying to get a better idea about the momentum you guys have into the upcoming October. And then Greg mentioned, I think, potentially higher prepayments in the near term. Just wanna dig into that statement. And is that something that you're already seeing early on in the quarter or something that borrowers have indicated that they could do? Speaker 100:24:59Just give me any color. Thanks. Our loan growth was pretty steady over the entire quarter, and loans in the pipeline were steadily added over the quarter. In regard to prepayment expectations, they have not occurred yet, but we do have several larger credits that have indicated that they plan to pay off in the very near term, which would increase our prepayment activity, and they're primarily in our non owner occupied commercial real estate. Okay. Speaker 100:25:41So I missed that thing. Right. No. I think you hit on that. I appreciate it. Speaker 100:25:48And I guess changing gears over towards the margin, it sounds like, Steph, in the margin got some nice tailwinds from here. More color you can provide about kind of expectations more near term within the margin? And then if we do get those Fed cuts that you mentioned, kind of what the impact should look like for the bank? Yeah. I guess starting with the Fed cuts, we are a bit more neutral to rate movements right now due to the higher levels of excess cash compared to prior years. Speaker 100:26:22But as that cash is deployed through loan growth, we do become a little more liability sensitive again. And part of the sort of driving forces is on just the natural NIM expansion that we could see is just from the loan origination activity on renewals repricing at higher rates than our current portfolio. Yeah. Okay. And it sounds like within the deposit competition, it sounds like you have you felt good enough this quarter. Speaker 100:26:53I think you've mentioned you recently took down some promotional offerings. So it sounds like the overall competitive levels on the deposit side remain remains reasonable. It's it's been more reasonable over the last, you know, six to nine months. We did see a little bit of a tick up in competition in July, so that might might stall out a bit, but it's still not at the relatively high level compared to Fed funds that we were seeing a year ago at this Operator00:27:19time. Okay. Speaker 100:27:24And then on on the credit front, I think you covered the the charge off this quarter, and it sounds like that's the same loan that we discussed on the last quarter. And I think I heard on the prepared remarks that the appraisal on one of the properties came in came in lower. Just wanna dig in on that appraisal and just trying to appreciate just the the collateral behind that and and just kinda why it experienced the deterioration that it did. And then I think you mentioned that was just one of the appraisals. Are there still other appraisals on the other remaining loans from the same borrower that we're still we're still waiting on? Speaker 100:28:04We have we wrote down the balance on one of them after the appraisal came in. And with it being a special purpose entity that was operating it, we had a much higher than normal advanced rate or lease lease rates that we advanced on that was more above market conditions with that specialty provider going away from that market, term market rents to replace that tenant are much lower than what our original balance was resulting in the large charge off. It would not surprise me if we would have additional charge off on the other remaining building. And we're still doing some negotiation with the guarantors on that on where we end up. But it would not surprise me to have an additional right. Speaker 100:29:13And, Greg, on the potential for those additional appraisals coming in, is there any specific provision or or reserve already allocated towards that, or would that be incremental from what you have now as far as the allowance? We have 42% of the balance in specific reserve. Got it. Okay. Great. Speaker 100:29:38I'll step back. Thanks for your help. Thanks, Matt. Thank you, Matt. Operator00:29:45As a reminder, to ask a question, please press star followed by one on your telephone keypad. Our next question comes from Kelly Moffer from KBW. Alright. Your line is open. Please go ahead. Speaker 100:29:59Good morning. This is Charlie on for Kelly. Thanks for the question. Just high level on the funding side. I know you mentioned a seasonally slow quarter for deposits. Speaker 100:30:09Do you still expect to fund near term growth with CDs mainly or, like, anything you expect from clients on on the deposit list? We wouldn't expect growth to be as heavily weighted towards CDs this year as what it's been over the last couple of years. Also, just given the strong funding position we're entering the year with, we'll probably be able to be a little less aggressive on the CD side. So that might drive a little bit slower growth on the CD side relative to the nonmaturity side. Okay. Speaker 100:30:43Thank you. And then could you give some specifics on the CDs you have rolling off this quarter and the rates that are gonna be replaced at? Yeah. So about on average over the next twelve months, the CD rates that we have are about four twenty four. And on average, we're replacing at about 4%. Speaker 100:31:09Anything materially different in the next three months? I guess more towards the first half of our fiscal year. We have some higher rates rolling off. And then towards the back end, those become more in line with the current market rate. Okay. Speaker 100:31:28Thank you. That's great. And then just on the m and a environment kind of picking up, are you guys seeing the pace of conversations increase at all? How are you viewing kind of the buyback here in this environment and then with prices where they're at? We are having you know, there are more calls according to investment bankers. Speaker 100:31:51We haven't really seen a big uptick in actual items, but I think that that that could be coming up here over the next quarter. And then buyback? And on the stock buyback, it's just going to depend upon where we are trading at relative to our tangible book value. At this time, we believe that a potential m and a transaction could have a shorter earn back period than if we were repurchasing for shares. Okay. Speaker 100:32:33That's great. Thank you. I'll step back. Operator00:32:41We currently have no further questions. So I'd like to hand back to Matt Funke for closing remarks. Speaker 100:32:47Thank you, Sammy, and thank you everyone for your interest and attendance today. We appreciate the chance to visit with you, and we'll talk again in three months. Have a good day. Operator00:33:00This concludes today's call. Thank you everyone for joining. You may now disconnect your lines.Read morePowered by Earnings DocumentsPress Release(8-K) Southern Missouri Bancorp Earnings HeadlinesSouthern Missouri Bancorp, Inc. (SMBC) Q4 2025 Earnings Call TranscriptJuly 25 at 12:12 PM | seekingalpha.comSouthern Missouri raises quarterly dividend by 8.7% to $0.25/shareJuly 24 at 4:39 PM | msn.comI was wrong about TrumpI made a mistake. A mistake I feel very foolish about. After speaking with Donald Trump and some of his advisors, I believed him. I believed the promise that he would finally confront the single most dangerous threat to American life. That he would fix the ticking time bomb I’ve been warning about for 15 years. But I was wrong.July 25 at 2:00 AM | Porter & Company (Ad)SOUTHERN MISSOURI BANCORP REPORTS PRELIMINARY RESULTS FOR FOURTH QUARTER OF FISCAL 2025; DECLARES QUARTERLY DIVIDEND OF $0.25 PER COMMON SHARE; CONFERENCE CALL SCHEDULED FOR THURSDAY, JULY 24, AT 9:30 AM CENTRAL TIMEJuly 23 at 4:30 PM | globenewswire.comSouthern Missouri Bancorp, Inc. (NASDAQ:SMBC) Q3 2025 Earnings Call TranscriptApril 27, 2025 | insidermonkey.comSouthern Missouri Bancorp, Inc. (SMBC) Q3 2025 Earnings Call TranscriptApril 25, 2025 | seekingalpha.comSee More Southern Missouri Bancorp Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Southern Missouri Bancorp? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Southern Missouri Bancorp and other key companies, straight to your email. Email Address About Southern Missouri BancorpSouthern Missouri Bancorp (NASDAQ:SMBC) operates as the bank holding company for Southern Bank that provides banking and financial services to individuals and corporate customers in the United States. The company offers deposits products, including interest-bearing and noninterest-bearing transaction accounts, saving accounts, certificates of deposit, retirement savings plans, and money market deposit accounts. It also provides loans, such as residential mortgage, commercial real estate, construction, and commercial business loans; and consumer loans comprising home equity, direct and indirect automobile loans, second mortgages, mobile home loans, and loans secured by deposits. In addition, the company offers fiduciary and investment management services; commercial and consumer insurance; online and mobile banking services; and debit or credit cards. The company was founded in 1887 and is headquartered in Poplar Bluff, Missouri.View Southern Missouri Bancorp ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Is Former Dividend Aristocrat AT&T a Buy After Q2 Earnings?Why Freeport-McMoRan Stock May Hit a New High After Earnings BeatMicrosoft’s AI Bet Faces a Major Test This Earnings SeasonAmazon Stock Rally Hits New Highs: Buy Into Earnings?TSLA Earnings Week: Can Tesla Break Through $350?Netflix Q2 2025 Earnings: What Investors Need to KnowHow Goldman Sachs Earnings Help You Strategize Your Portfolio Upcoming Earnings Cadence Design Systems (7/28/2025)Enterprise Products Partners (7/28/2025)Welltower (7/28/2025)Waste Management (7/28/2025)AstraZeneca (7/29/2025)Booking (7/29/2025)Mondelez International (7/29/2025)PayPal (7/29/2025)Starbucks (7/29/2025)American Tower (7/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
There are 2 speakers on the call. Operator00:00:00Hello, everyone. And thank you for joining the Southern Missouri Bancorp earnings conference call. My name is Sammy, and I'll be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by 2 to remove yourself from question queue. Operator00:00:18I would now like to hand over to our host, Stefan Chukotovich, CFO, to begin. Please go ahead, Stefan. Speaker 100:00:26Thank you, Sammy. Good morning, everyone. This is Stefan Czkotovich, CFO with Southern Missouri Bancorp. Thank you for joining us. The purpose of this call is to review the information and data presented in our quarterly earnings release dated Wednesday, 07/23/2025, and to take your questions. Speaker 100:00:43We may make certain forward looking statements during today's call, and we refer you to our cautionary statement regarding forward looking statements contained in the press release. I'm joined on the call today by Greg Stuffins, our Chairman and CEO and Matt Funke, President and Chief Administrative Officer. Matt will lead off the conversation today with some highlights from our most recent quarter and fiscal year. Thank you, Stefan, and good morning, everyone. This is Matt Funke. Speaker 100:01:10Thanks for joining us. I'll start off with some highlights from our financial results for the June, the final quarter of our fiscal year. Quarter over quarter, earnings were up slightly as we saw our net interest margin and net interest income move higher, along with an increase in noninterest income and a lower provision for income tax expense. This was partially offset by an increase in provision for credit losses. We have seen improvement in the net interest margin this year with continued loan growth and moderate operating expense growth, which improved overall earnings and profitability in fiscal twenty twenty five. Speaker 100:01:45Despite problem credits moving higher during the year off the very low levels we've seen across the industry in the last few years, we do feel we have good momentum and see positive trends going into the next fiscal year. We earned $1.39 diluted in the June, which remained unchanged from the linked March, but up $0.20 from the June or about 17% growth year over year. During the quarter, we realized 425,000 in consulting expenses associated with the negotiation of a large long term business contract, which will begin benefiting results in fiscal 'twenty six. Excluding these costs, we would have earned $1.42 for the quarter. For full year fiscal twenty twenty five, we earned $5.18 compared to $4.42 in fiscal twenty twenty four. Speaker 100:02:37The increase year over year was predominantly driven by stronger interest income, which stemmed from almost 7% earning asset growth and net interest margin expansion as our funding costs declined and the loan portfolio adjusted up with higher market rates. With this earnings growth, tangible book value per share has increased by $5.19 or just above 14% over the last twelve months to $41.87 Due to our strong capital position, with the earnings release, we also announced a $02 or 8.7% increase in our quarterly dividend, bringing it to $0.25 a share. Net interest margin for the quarter was 3.46%, up from 3.39% reported for the third quarter of fiscal twenty twenty five, the linked quarter, as we saw some spread increases, loan yields increased, and we benefited from deploying lower yielding excess earning excess interest earning cash balances into higher yielding loans. Stefan will go over more details, but in fiscal 'twenty six, we do plan to change our reported quarterly NIM calculation to be based off the annualized day count, which should reduce the volatility in the NIM due to the differences in each quarter's total days. If we calculated the net interest margin by annualizing the day count in the fourth quarter, it would have been 3.47% as compared to 3.44% in the linked quarter if calculated similarly. Speaker 100:04:04Gross loan balances increased during the quarter by $76,000,000 or 7.6% annualized and by $250,000,000 or 6.5 as compared to June 30 a year ago. Provision for credit losses was $2,500,000 up $1,600,000 over the linked quarter. The increase was primarily attributable to providing for net charge offs and to support loan growth in addition to an increase in available balances and an increase in the expected funding rate on those available balances. Greg will go into more detail on credit, and Stefan will talk about the allowance for credit losses in a bit. Deposit balances as of June 3025 increased by $20,000,000 or about 2% annualized compared to the linked quarter. Speaker 100:04:52This is a seasonally slower period for deposits due to seasonal outflows from our public units and as our agricultural clients deploy funds for the crop year. I'll hand it over now to Greg for Operator00:05:02some additional discussion. Thanks, Speaker 100:05:05Matt, and good morning, everyone. I'd like to start off talking about credit quality. Consistent with our discussions last quarter, credit quality has deteriorated somewhat from the very low levels of the last several years. It remains relatively strong at June 30 with adversely classified loans totaling $50,000,000 or 1.2% of total loans, an increase of about 830,000 and flat as a percentage of total loans during the quarter. Nonperforming loans were 23,000,000 at June 30, which increased 1,100,000.0 compared to last quarter and totaled point $5.06 percent of gross loans. Speaker 100:05:51In comparison to June 24, NPLs were up about 16,000,000 or 39 basis points higher as a percentage of total loans. Nonperforming assets were about a 100,000 lower compared to a year ago as we sold a parcel of other real estate in the fourth quarter. But the other real estate reduction was mostly offset by additional nonperforming loans. The increase in NPL this quarter was mostly due to a participation that we originated, of which our balance is 5,700,000.0 on the construction loan related to the development of senior living facility in Kansas, which was placed on non accrual status. This loan was acquired through the Citizens merger, and we're currently working through the foreclosure process. Speaker 100:06:48We are still having discussions with the borrower with the hopes to avoid foreclosure as the project included very significant capital investment by them actually exceeding our outstanding balance. As reported last quarter, we are continuing to work with borrowers on two specific purpose non owner occupied CRE properties in different states with guarantors in common and originally leased to a single tenant that has since become installed. Last quarter, these balances totaled 10,000,000 and were placed on nonaccrual. But based on updated appraisals, we took a $3,800,000 debt charge in the quarter on one of the three loans, taking the balance to 6,200,000.0 as of June 30. As of year end in total, we have about 45% specific reserves remaining on the balance of these loans. Speaker 100:07:53Loans past due thirty to eighty nine days were 6,100,000.0, down 9,000,000 from March and 15 basis points on gross profit. This is a decrease of 23 basis points compared to the linked quarter and in line compared to a year ago. Total delinquent loans were 25,600,000.0, up 1,200,000.0 from the March and up 16,400,000.0 from the June 2024. The decrease in loan thirty to eighty nine days past due was primarily due to the special purpose CRE loans mentioned earlier with a partial charge off of migration to ninety days or more past due. Despite the increase in problem loans, these issues remain at modest levels, and asset quality compares favorably to the industry. Speaker 100:08:47In combination with strong underwriting and adequate reserves, we feel comfortable with our ability to work through these credits and any potential wider deterioration that could occur as a byproduct of general economic conditions. So I don't wanna give the impression that we're accepting these trends, and we're redoubling efforts to improve our credit quality results. This quarter, Aggie real estate balances totaled 245,000,000 or 6% of gross loans, and ag production and equipment loans totaled 206,000,000 or 5% of gross loans. As compared to the prior quarter end, ag real estate balances were down 2,000,000, but they were up 12,500,000.0 compared to June 30 a year ago. Ag production loan balances were up 20,000,000 quarter over quarter due to normal seasonality and higher operating costs and up 30,000,000 year over year. Speaker 100:09:51Our ag customers began 2025 with an early planting window due to mild weather. The heavy spring rains soon delayed progress, especially from cotton and soybeans requiring some replanting. Early planted corn and soybeans are progressing well with early corn harvest likely to begin in August and early soybeans in September, both earlier than normal. Later planted crops have improved over the past month. Overall, nearly all of our farmers' acreage were planted. Speaker 100:10:27Crop mix projections for 2025 are 30% soybeans, 30% corn, 20% cotton, 15% rice, and 5% specialty crops. Corn acreage is up slightly and may yield well, but weak pricing could prompt farmers to store grain again this year. Soybean acres rose modestly as pervert producers diverted acres from other crops, especially in rice crops are in good condition, though price pressure is lowering expected returns. Cotton is showing average progress with improvement tied to drier weather conditions. Across the board, farmers face rising input costs and expenses for insurance, labor, and repairs, expenses of which continue to climb. Speaker 100:11:23Dry weather is also pushing up fuel and chemical usage for irrigation and weed control and press. Farmers are drawing more heavily on credit lines with some tapping into preapproved contingency lines. About 95% of our 2,024 profits have been sold and applied to debt. The lower commodity prices this spring have reduced expected profitability for this year. Economic commodity assisted program payments from the government has helped. Speaker 100:11:56Many farmers are anticipating a difficult margin here this year. Future pricing for key crops remains soft relative to underwriting assumptions. Corn rice, soybeans, and cotton, and wheat are each down six to 8%, and many producers remain pessimistic about positive returns for '25 and concerned about entering 2026 in a weakened position. We have seen some instances of farmers deciding to voluntarily wind down their operations earlier this year and could see that trend continue as the profitability outlook. Farm equipment prices fell this spring as dealers moved to clear inventory with lower rates. Speaker 100:12:48So most producers are deferring purchases of equipment. While 2024 was a strong production year, high cost of weak prices left many borrowers with lower working capital positions or in some instances needing restructure. Farmland values remain firm, particularly for irrigated acres. So investor demand, not farmer demand, is driving the market. With equipment values falling and cash flow tight, collateral coverage is weaker. Speaker 100:13:22Lenders are actively inspecting 2025 crop progress and will deliver yield and collateral analysis by October to get an early understanding of the outlook for our borrowers as they enter 02/1926. We are also monitoring the potential for further federal aid under the recently passed big beautiful bill of president Trump, which could be critical in supporting our farmers through what may be another financially challenging year. We are proactively working to address any potential shortfalls by leveraging FSA guaranteed programs or restructuring loans. Despite these challenges, our disciplined lending practices, stress testing of farm flow, cash flows, and deep customer relationships should ensure satisfactory performance of these trends. In addition, due to the prolonged weakness in the agricultural segment, we've heard some increased reserves for watch list bank borrowers in the March in our calculation for our allowance for credit losses. Speaker 100:14:36Looking at the loan portfolio as a whole, gross loans increased 76,000,000 during the quarter. The quarter was led by growth in c and I, multifamily, and ag production loans, with stronger growth out of our Southwest and East regions. It all contributed to a great quarter for loan growth. The fourth and first quarter is seasonally the strongest part of our year for loan growth due to seasonal factors, a. Our pipeline for loans to fund in the next ninety days is strong and totaled 224,000,000 as compared to 163,000,000 in the March and 157,000,000 a year ago. Speaker 100:15:24Despite the strong near term origination pipeline, we expect to have a higher than usual first quarter of prepayment activity that could slow some of the net loan growth. Although there remains some uncertainty surrounding the economy due to our strong pipeline as we look into fiscal twenty six, we feel optimistic about achieving another year of mid single digit loan growth for the upcoming year. Our non owner occupied CRE concentrations at bank level was approximately 302% of tier one capital and allowance at June 30, down about two percentage points compared to the March due to almost 9,000,000 in net pay downs of non owner occupied CRE and growth into account. On a consolidated basis, our c rate CRE ratio was 291% at the end of the fourth. During the year, we would expect our CRE ratio to increase somewhat, but should stay in the 300 to 325% range. Speaker 100:16:39Stefan? Thanks, Greg. Matt hit some of the key financial items already, but I wanted to share a few details. Looking at this quarter's net interest margin of 3.46% included about five basis points of fair value discount accretion on acquired loan portfolios and premium amortization on assumed deposits compared to the linked quarter of 13 basis points and 10 basis points in the prior year's June. The net interest margin expanded as the yield on interest earning assets increased four basis points, primarily due to loan yield expansion, while the cost of interest bearing liabilities decreased one basis point. Speaker 100:17:20Although the Fed funds rate hasn't been reduced further this calendar year, we are seeing opportunities to lower our CD specials as local deposit competition eased during the fourth quarter. With this, in addition to our loan portfolio still repricing up to current market rates and originating loans at a higher than the portfolio rate, we're optimistic we could see more margin expansion in fiscal twenty twenty six. As of June, our average loan origination rate was about 7.3% compared to the average loans we have maturing over the next twelve months of 6.3%. If the FOMC does cut rates later this year, we believe there is further opportunity for net interest margin expansion as our deposit pricing strategy leaves us well positioned to reduce funding costs if further rate cuts do occur. Looking at noninterest income, we're up about 9.2% compared to the linked quarter. Speaker 100:18:21This increase was largely driven by an additional card network bonus, which is based on annual buying incentives. The total bonus received in the fourth quarter was 537,000. In fiscal twenty twenty six, the estimated fee income for these annual bonuses will be accrued through the year. This item was partially offset by a $108,000 charge to reduce the fair value of our mortgage servicing rights, which stems from the decrease in market rates and associated expectations of increased prepayments. As noted in the release, we have adopted ASU 2020 three-two to now account for renewable energy tax credit benefits through a direct reduction to income taxes. Speaker 100:19:08This has resulted in lower fee income for fiscal twenty twenty five of $701,000 as it was moved to reduce tax provisions. Noninterest expense was up 2.3% compared to the linked quarter. This was primarily attributable to 425,000 consulting expense captured in legal and professional fees to negotiate a new contract with our debit card network. In addition, we saw increased expenses in data processing due to third party ancillary product expense. This is an area where we're trying to manage to stay commensurate with our earnings growth. Speaker 100:19:44Investment in new systems could be a net benefit in the longer term as we work to create more efficient processes and manage the growing complexities of the business and customer expectations. The ACL of 06/30/2025 totaled 51,600,000.0, representing 1.26% of gross loans and 224% of nonperforming loans as compared to an ACL of 54,900,000.0 or $1.37 of gross loans and 250% of nonperforming $5,300,000 of net charge offs were realized in the quarter, with $4,200,000 of the increase from the linked quarter primarily due to the special purpose CRE relationship mentioned previously and $742,000 C and I credit related to a commercial contractor. Despite the increase in charge offs for the quarter and overall year, our net charge off ratio for fiscal twenty twenty five was only 17 basis points and still compares well versus bank under $10,000,000,000 The decrease in the ACL was primarily attributable to net charge offs, which reduced the required reserve for individually evaluated loans as well as a decline in current qualitative adjustments relative to assessing expected credit losses. This decrease was partially offset by higher model losses following our annual methodology update for pooled loans, reflecting management's updated view of a deteriorating economic outlook compared to the linked quarter's assessment. Speaker 100:21:23Due to these drivers, the company recorded a provision for credit losses of 2,500,000.0 compared to 932,000 in the March. Given where we see the economic cycle and our asset quality trends, we would expect to see an uptick in the normal quarterly provision. Despite some additional credit charges during fiscal twenty twenty five, we delivered strong earnings growth for the year, increasing profitability to a 1.21% return on average assets and 11.4% return on average equity. Looking back over the past five years, even with the margin pressure experienced in 2024, we have compounded tangible book value by 10% annually while returning an average of 17% of earnings to shareholders through cash dividends. With this track record, we remain focused on driving continued growth in fiscal twenty twenty six and sustaining long term value creation for our shareholders. Speaker 100:22:25Craig, any closing thoughts? Yes, sir. We're proud of our accomplishments in fiscal twenty five, highlighted by the progress on our performance and improvement initiatives, a key project that is already beginning to show positive results. Thanks to the dedication of our exceptional team. We have continued to reinvest in the company, adding new talent to support our legacy of growth with the goal of translating these investments into sustained earnings strength and improved profitability in the years ahead. Speaker 100:23:01Since the last quarter, we've seen a modest uptick in M and A discussions, while market conditions have stabilized somewhat. We remain optimistic about the potential for attractive opportunities with our solid capital base and proven financial performance. Believe we are well positioned to act when the right transaction rises. Notably, there are approximately 50 banks headquartered in Missouri and 24 in Arkansas with assets between 500,000,000 and 2,000,000,000, along with a meaningful number of others in adjacent markets, providing a broad landscape for potential for potential partnerships. Thank you, Greg. Speaker 100:23:47At this time, Sammy, we're ready to take questions from our participants. So if you would, please remind folks that they may queue for questions at this time. Operator00:23:59Thank you very much. To ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by 2. And preparing to ask your question, please ensure your device is unmuted locally. Our first question comes from Matt Olney from Stephens. Operator00:24:16Your line Speaker 100:24:17is open. Please go ahead. Hey. Great. Thanks. Speaker 100:24:21Good morning. Appreciate you taking my question. Wanna start on the loan growth. Really good results we just saw. I'm curious just as the loan growth developed throughout the quarter, did it strengthen throughout the quarter? Speaker 100:24:36Or was it steady? Just trying to get a better idea about the momentum you guys have into the upcoming October. And then Greg mentioned, I think, potentially higher prepayments in the near term. Just wanna dig into that statement. And is that something that you're already seeing early on in the quarter or something that borrowers have indicated that they could do? Speaker 100:24:59Just give me any color. Thanks. Our loan growth was pretty steady over the entire quarter, and loans in the pipeline were steadily added over the quarter. In regard to prepayment expectations, they have not occurred yet, but we do have several larger credits that have indicated that they plan to pay off in the very near term, which would increase our prepayment activity, and they're primarily in our non owner occupied commercial real estate. Okay. Speaker 100:25:41So I missed that thing. Right. No. I think you hit on that. I appreciate it. Speaker 100:25:48And I guess changing gears over towards the margin, it sounds like, Steph, in the margin got some nice tailwinds from here. More color you can provide about kind of expectations more near term within the margin? And then if we do get those Fed cuts that you mentioned, kind of what the impact should look like for the bank? Yeah. I guess starting with the Fed cuts, we are a bit more neutral to rate movements right now due to the higher levels of excess cash compared to prior years. Speaker 100:26:22But as that cash is deployed through loan growth, we do become a little more liability sensitive again. And part of the sort of driving forces is on just the natural NIM expansion that we could see is just from the loan origination activity on renewals repricing at higher rates than our current portfolio. Yeah. Okay. And it sounds like within the deposit competition, it sounds like you have you felt good enough this quarter. Speaker 100:26:53I think you've mentioned you recently took down some promotional offerings. So it sounds like the overall competitive levels on the deposit side remain remains reasonable. It's it's been more reasonable over the last, you know, six to nine months. We did see a little bit of a tick up in competition in July, so that might might stall out a bit, but it's still not at the relatively high level compared to Fed funds that we were seeing a year ago at this Operator00:27:19time. Okay. Speaker 100:27:24And then on on the credit front, I think you covered the the charge off this quarter, and it sounds like that's the same loan that we discussed on the last quarter. And I think I heard on the prepared remarks that the appraisal on one of the properties came in came in lower. Just wanna dig in on that appraisal and just trying to appreciate just the the collateral behind that and and just kinda why it experienced the deterioration that it did. And then I think you mentioned that was just one of the appraisals. Are there still other appraisals on the other remaining loans from the same borrower that we're still we're still waiting on? Speaker 100:28:04We have we wrote down the balance on one of them after the appraisal came in. And with it being a special purpose entity that was operating it, we had a much higher than normal advanced rate or lease lease rates that we advanced on that was more above market conditions with that specialty provider going away from that market, term market rents to replace that tenant are much lower than what our original balance was resulting in the large charge off. It would not surprise me if we would have additional charge off on the other remaining building. And we're still doing some negotiation with the guarantors on that on where we end up. But it would not surprise me to have an additional right. Speaker 100:29:13And, Greg, on the potential for those additional appraisals coming in, is there any specific provision or or reserve already allocated towards that, or would that be incremental from what you have now as far as the allowance? We have 42% of the balance in specific reserve. Got it. Okay. Great. Speaker 100:29:38I'll step back. Thanks for your help. Thanks, Matt. Thank you, Matt. Operator00:29:45As a reminder, to ask a question, please press star followed by one on your telephone keypad. Our next question comes from Kelly Moffer from KBW. Alright. Your line is open. Please go ahead. Speaker 100:29:59Good morning. This is Charlie on for Kelly. Thanks for the question. Just high level on the funding side. I know you mentioned a seasonally slow quarter for deposits. Speaker 100:30:09Do you still expect to fund near term growth with CDs mainly or, like, anything you expect from clients on on the deposit list? We wouldn't expect growth to be as heavily weighted towards CDs this year as what it's been over the last couple of years. Also, just given the strong funding position we're entering the year with, we'll probably be able to be a little less aggressive on the CD side. So that might drive a little bit slower growth on the CD side relative to the nonmaturity side. Okay. Speaker 100:30:43Thank you. And then could you give some specifics on the CDs you have rolling off this quarter and the rates that are gonna be replaced at? Yeah. So about on average over the next twelve months, the CD rates that we have are about four twenty four. And on average, we're replacing at about 4%. Speaker 100:31:09Anything materially different in the next three months? I guess more towards the first half of our fiscal year. We have some higher rates rolling off. And then towards the back end, those become more in line with the current market rate. Okay. Speaker 100:31:28Thank you. That's great. And then just on the m and a environment kind of picking up, are you guys seeing the pace of conversations increase at all? How are you viewing kind of the buyback here in this environment and then with prices where they're at? We are having you know, there are more calls according to investment bankers. Speaker 100:31:51We haven't really seen a big uptick in actual items, but I think that that that could be coming up here over the next quarter. And then buyback? And on the stock buyback, it's just going to depend upon where we are trading at relative to our tangible book value. At this time, we believe that a potential m and a transaction could have a shorter earn back period than if we were repurchasing for shares. Okay. Speaker 100:32:33That's great. Thank you. I'll step back. Operator00:32:41We currently have no further questions. So I'd like to hand back to Matt Funke for closing remarks. Speaker 100:32:47Thank you, Sammy, and thank you everyone for your interest and attendance today. We appreciate the chance to visit with you, and we'll talk again in three months. Have a good day. Operator00:33:00This concludes today's call. Thank you everyone for joining. You may now disconnect your lines.Read morePowered by