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SOUTHERN MISSOURI BANCORP, INC.

SOUTHERN MISSOURI BANCORP, INC.SMBCEarnings & Financial Report

Nasdaq · Financials · Savings Institutions, Not Federally Chartered

U.S. Bancorp is an American multinational banking institution headquartered in Minneapolis, Minnesota and incorporated in Delaware. It is the 5th-largest bank in the United States as of 2025. As the largest bank in the Midwestern United States, it is considered systemically important by the Financial Stability Board. It is the parent company of its primary operating entity, U.S. Bank National Association, which does business as U.S. Bank. The company provides banking, investment, mortgage, tr...

What changed in SOUTHERN MISSOURI BANCORP, INC.'s 10-K — 2024 vs 2025

Top changes in SOUTHERN MISSOURI BANCORP, INC.'s 2025 10-K

371 paragraphs added · 366 removed · 317 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

158 edited+12 added−19 removed196 unchanged
The important factors we discuss below, as well as other factors discussed under the caption "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and identified in the filing and in our other filings with the SEC and those presented elsewhere by our management from time to time, could cause actual results to differ materially from those indicated by the forward-looking statements made in this document: ● expected cost savings, synergies and other benefits from our merger and acquisition activities, including our recently completed acquisitions, might not be realized within the anticipated time frames, to the extent anticipated, or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention and labor shortages, might be greater than expected and goodwill impairment charges might be incurred; ● potential adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth; ● the strength of the United States economy in general and the strength of the local economies in which we conduct operations; ● fluctuations in interest rates and inflation, including the effects of a potential recession whether caused by Federal Reserve actions or otherwise or slowed economic growth caused by changes in oil prices or supply chain disruptions; ● the impact of monetary and fiscal policies of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) and the U.S.
The important factors we discuss below, as well as other factors discussed under the caption "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and identified in the filing and in our other filings with the SEC and those presented elsewhere by our management from time to time, could cause actual results to differ materially from those indicated by the forward-looking statements made in this document: ● expected cost savings, synergies and other benefits from our merger and acquisition activities, including our recently completed acquisitions, might not be realized within the anticipated time frames, to the extent anticipated, or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention and labor shortages, might be greater than expected and goodwill impairment charges might be incurred; ● potential adverse impacts to economic conditions both nationally and in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth; ● the strength of the United States economy in general and the strength of the local economies in which we conduct operations; ● fluctuations in interest rates and inflation, including the effects of a potential recession whether caused by Federal Reserve actions or otherwise or slowed economic growth caused by changes in oil prices or supply chain disruptions; ● the impact of monetary and fiscal policies of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) and the U.S.
“Risk Factors,” and other documents filed or furnished from time to time by the Company with the SEC (and are available on our website at www.bankwithsouthern.com and on the SEC’s website at www.sec.gov) could affect the Company’s financial performance and cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.
“Risk Factors,” and other documents filed or furnished from time to time by the Company with the SEC (and are available on our website at investors.bankwithsouthern.com and on the SEC’s website at www.sec.gov) could affect the Company’s financial performance and cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.
This increase was primarily from 14 loans, mostly secured by non-owner occupied commercial real estate collateral, which properties were experiencing decreases in cashflow. ​ Allowance for Credit Losses. The Bank’s allowance for credit losses is established through a provision for credit losses based on management’s expectation of lifetime credit losses on financial assets held at amortized cost.
This increase was primarily from 14 loans, mostly secured by non-owner occupied commercial real estate collateral, which properties were experiencing decreases in cashflow. ​ Allowance for Credit Losses. The Bank’s ACL is established through a provision for credit losses based on management’s expectation of lifetime credit losses on financial assets held at amortized cost.
The Bank actively originates loans secured by commercial real estate including farmland, single- and multi-tenant retail properties, restaurants, hotels, nursing homes and other healthcare related facilities, land (improved and unimproved), convenience stores, automobile dealerships, and other automotive-related services, warehouses and distribution centers, and other businesses generally located in the Bank’s market area.
The Bank actively originates loans secured by commercial real estate including single- and multi-tenant retail properties, restaurants, hotels, nursing homes and other healthcare related facilities, land (improved and unimproved), convenience stores, automobile dealerships, and other automotive-related services, warehouses and distribution centers, and other businesses generally located in the Bank’s market area.
Real Estate Owned. Real estate properties acquired through foreclosure or by deed in lieu of foreclosure are recorded at the lower of cost or fair value, less estimated disposition costs, which establishes a new cost basis.
Real estate properties acquired through foreclosure or by deed in lieu of foreclosure are recorded at the lower of cost or fair value, less estimated disposition costs, which establishes a new cost basis.
Further discussion of the methodology used in establishing the allowance is provided in Note 1 and Note 3 of the Notes to the Consolidated Financial Statements contained in Item 8, and in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates – Allowance for Credit Losses” section of Item 7 of this Form 10-K. ​ 20 Table of Contents The following table sets forth an analysis of the Bank’s allowance for credit losses for the periods indicated.
Further discussion of the methodology used in establishing the allowance is provided in Note 1 and Note 3 of the Notes to the Consolidated Financial Statements contained in Item 8, and in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates – Allowance for Credit Losses” section of Item 7 of this Form 10-K. ​ 20 Table of Contents The following table sets forth an analysis of the Bank’s ACL for the periods indicated.
Notably, none of these loans were adversely classified as of that date, and they generally consist of smaller spaces with diverse tenant bases. In addition, the multifamily residential real estate loan portfolio included in commercial real estate typically includes loans secured by properties currently participating in the Low-Income Housing Tax Credit (LIHTC) program or those that have exited the program.
Notably, none of these loans were adversely classified as of that date, and they generally consist of smaller spaces with diverse tenant bases. In addition, the multifamily residential real estate loan portfolio typically includes loans secured by properties currently participating in the Low-Income Housing Tax Credit (LIHTC) program or those that have exited the program.
Nevertheless, construction and land development lending is generally considered to involve a higher level of credit risk than one- to four-family residential lending due to (i) the concentration of principal among relatively few borrowers and development projects, (ii) the increased difficulty at the time the loan is made of accurately estimating building or development costs and the selling price of the finished product, (iii) the increased difficulty and costs of monitoring and disbursing funds for the loan, (iv) the higher degree of sensitivity to increases in market rates of interest and changes in local economic conditions, and (v) the increased difficulty of working out problem loans.
Nevertheless, construction and land development lending is generally considered to involve a higher level of credit risk than one- to four-family residential lending due to (i) the concentration of principal among relatively few borrowers and development projects, (ii) the increased difficulty at the time the loan is made of accurately estimating building or development costs and the selling price of the finished product, (iii) the increased difficulty and costs of monitoring and disbursing funds 12 Table of Contents for the loan, (iv) the higher degree of sensitivity to increases in market rates of interest and changes in local economic conditions, and (v) the increased difficulty of working out problem loans.
Most properties securing real estate loans made by the Bank during fiscal 2024 had appraisals performed on them by independent fee appraisers approved and qualified by the Board of Directors. The Bank generally requires borrowers to obtain title insurance and fire, property and flood insurance (if indicated) in an amount not less than the amount of the loan.
Most properties securing real estate loans made by the Bank during fiscal 2025 had appraisals performed on them by independent fee appraisers approved and qualified by the Board of Directors. The Bank generally requires borrowers to obtain title insurance and fire, property and flood insurance (if indicated) in an amount not less than the amount of the loan.
Additionally, the Company’s training committee identifies opportunities and paths for development of our staff, and our Company seeks to, whenever possible, fill positions by promotion from within. Among our executive team, market presidents, regional retail officers, and administrative team, 54% of these leaders have been promoted to their position from within.
Additionally, the Company’s training committee identifies opportunities and paths for development of our staff, and our Company seeks to, whenever possible, fill positions by promotion from within. Among our executive team, regional and market presidents, regional retail officers, and administrative team, 55% of these leaders have been promoted to their position from within.
In the west region, the Bank’s operations are generally more concentrated in the Springfield, Missouri, MSA, and major employers include healthcare providers, educational institutions, federal, local, and state government, retailers, transportation and distribution firms, and leisure, entertainment, and hospitality interests.
In the west region, the Bank’s operations are generally more concentrated in the Springfield, Missouri, MSA, and major employers include healthcare providers, educational institutions, federal, local, and state governments, retailers, transportation and distribution firms, and leisure, entertainment, and hospitality interests.
As of June 30, 2024, the majority of these credits were commercial real estate, multi-family real estate, or commercial business loans, and all of these relationships were performing in accordance with their terms. 8 Table of Contents Loan Portfolio Analysis.
As of June 30, 2025, the majority of these credits were commercial real estate, multi-family real estate, or commercial business loans, and all of these relationships were performing in accordance with their terms. 8 Table of Contents Loan Portfolio Analysis.
During fiscal 2024, the Company entered into derivative financial instruments, primarily interest rate swaps, to convert certain long term fixed rate loans to floating rates to manage interest rate risk, facilitate asset/liability management strategies and manage other exposures.
During fiscal 2025, the Company entered into derivative financial instruments, primarily interest rate swaps, to convert certain long term fixed rate loans to floating rates to manage interest rate risk, facilitate asset/liability management strategies and manage other exposures.
Fortune SBA, LLC is an entity acquired in the Fortune acquisition, and was engaged in the origination of SBA guaranteed loans, sale of the guaranteed portion of the loan, and servicing of loans. At June 30, 2024, Fortune SBA, LLC held no assets or liabilities and is currently inactive.
Fortune SBA, LLC is an entity acquired in the Fortune acquisition, and was engaged in the origination of SBA guaranteed loans, sale of the guaranteed portion of the loan, and servicing of loans. At June 30, 2025, Fortune SBA, LLC held no assets or liabilities and is currently inactive.
Fortune Investment Group, LLC is an entity acquired in the Fortune acquisition that was engaged in the brokerage of wealth management products, with no assets or liabilities at June 30, 2024, and is currently inactive.
Fortune Investment Group, LLC is an entity acquired in the Fortune acquisition that was engaged in the brokerage of wealth management products, with no assets or liabilities at June 30, 2025, and is currently inactive.
If fair value at the date of foreclosure is lower than the balance of the related loan, the difference will be charged-off to the allowance for credit losses at the time of transfer. Management periodically updates real estate valuations and if the value declines, a specific provision for losses on such property is established by a charge to noninterest expense.
If fair value at the date of foreclosure is lower than the balance of the related loan, the difference will be charged-off to the ACL at the time of transfer. Management periodically updates real estate valuations and if the value declines, a specific provision for losses on such property is established by a charge to noninterest expense.
Foreclosure may not begin until the loan reaches 120 days delinquency in the case of consumer residential loans. For consumer loans, the Missouri Right-To-Cure Statute 16 Table of Contents is followed, which requires issuance of specifically worded notices at specific time intervals prior to repossession or further collection efforts.
Foreclosure may not begin until the loan reaches 120 days delinquency in the case of consumer residential loans. For consumer loans, the Missouri Right-To-Cure Statute is followed, which requires issuance of specifically worded notices at specific time intervals prior to repossession or further collection efforts.
The particular focus is on exposure to commercial real estate loans that are dependent on the cash flow from the real estate held as collateral and that are likely to be sensitive to conditions in the commercial real estate market (as opposed to real estate collateral held as a secondary source of repayment or as an abundance of caution).
The particular focus is on 33 Table of Contents exposure to commercial real estate loans that are dependent on the cash flow from the real estate held as collateral and that are likely to be sensitive to conditions in the commercial real estate market (as opposed to real estate collateral held as a secondary source of repayment or as an abundance of caution).
The Company completed each of the above whole bank acquisitions primarily for the purpose of expanding its commercial banking activities where it believes the Company’s business model will perform well and for the long-term value of its core deposit franchise. 4 Table of Contents Capital Raising Transactions On June 20, 2017, the Company completed an at-the-market common stock issuance.
The Company completed each of the above whole bank acquisitions primarily for the purpose of expanding its commercial banking activities where it believes the Company’s business model will perform well and for the long-term value of its core deposit franchise. 4 Table of Contents Capital Raising Transactions During the Last Ten Years On June 20, 2017, the Company completed an at-the-market common stock issuance.
The Bank’s market share was approximately 1.29% in the state of Missouri, where the majority of our deposits reside amongst the 55 locations in the state. Competitors for deposits include commercial banks, credit unions, digital payment applications, money market funds, and other investment alternatives, such as mutual funds, full service and discount broker-dealers, equity markets, brokerage accounts and government securities.
The Bank’s market share was approximately 1.36% in the state of Missouri, where the majority of our deposits reside amongst the 53 locations in the state. Competitors for deposits include commercial banks, credit unions, digital payment applications, money market funds, and other investment alternatives, such as mutual funds, full service and discount broker-dealers, equity markets, brokerage accounts and government securities.
The Bank’s competition for loans comes principally from other financial 7 Table of Contents institutions, mortgage banking companies, mortgage brokers and life insurance companies. The Bank expects competition to continue to increase in the future as a result of legislative, regulatory and technological changes within the financial services industry.
The Bank’s competition for loans comes principally from other financial institutions, mortgage banking companies, mortgage brokers and life insurance companies. The Bank expects competition to continue to increase in the future as a result of legislative, regulatory and technological changes within the financial services industry.
Membership stock held in the FHLB of Des Moines, totaling $8.7 million, and in the Federal Reserve Bank of St. Louis, totaling $9.1 million, along with equity stock of $929,000 in various correspondent (bankers’) banks, was not included in the above totals. Mortgage-Backed Securities.
Membership stock held in the FHLB of Des Moines, totaling $9.4 million, and in the Federal Reserve Bank of St. Louis, totaling $9.1 million, along with equity stock of $929,000 in various correspondent (bankers’) banks, was not included in the above totals. Mortgage-Backed Securities.
Market Area The Bank provides its customers with a full array of community banking services and conducts its business from its headquarters in Poplar Bluff, as well as 62 full service branch offices, three limited service branch offices, and two loan production offices, as of June 30, 2024.
Market Area The Bank provides its customers with a full array of community banking services and conducts its business from its headquarters in Poplar Bluff, as well as 62 full service branch offices, two limited service branch offices, and two loan production offices, as of June 30, 2025.
Government and other governmental initiatives affecting the financial services industry; ● the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; 5 Table of Contents ● the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses on loans; ● our ability to access cost-effective funding and maintain sufficient liquidity; ● the timely development of and acceptance of our new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors’ products and services; ● fluctuations in real estate values and both residential and commercial real estate markets, as well as agricultural business conditions; ● demand for loans and deposits; ● the impact of a federal government shutdown; ● legislative or regulatory changes that adversely affect our business; ● the effects of climate change, severe weather events, other natural disasters, war, terrorist activities or civil unrest and their effects on economic and business environments in which the Company operates; ● changes in accounting principles, policies, or guidelines; ● results of examinations of us by our regulators, including the possibility that our regulators may, among other things, require an increase in our reserve for credit losses on loans or a write-down of assets; ● the impact of technological changes and an inability to keep pace with the rate of technological advances; ● cyber threats, such as phishing, ransomware, and insider attacks, can lead to financial loss, reputational damage, and regulatory penalties if sensitive customer data and critical infrastructure are not adequately protected; and ● our success at managing the risks involved in the foregoing.
Government and other governmental initiatives affecting the financial services industry; ● the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; ● the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses (ACL) on loans; ● our ability to access cost-effective funding and maintain sufficient liquidity; 5 Table of Contents ● the timely development of and acceptance of our new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors’ products and services; ● fluctuations in real estate values and both residential and commercial real estate markets, as well as agricultural business conditions; ● fluctuations in the demand for loans and deposits, including our ability to attract and retain deposits; ● the impact of a federal government shutdown; ● legislative or regulatory changes that adversely affect our business; ● the effects of climate change, severe weather events, other natural disasters, war, terrorist activities or civil unrest and their effects on economic and business environments in which the Company operates; ● changes in accounting principles, policies, or guidelines; ● results of examinations of us by our regulators, including the impact on FDIC insurance premiums and the possibility that our regulators may, among other things, require an increase in our reserve for credit losses on loans or a write-down of assets; ● the impact of technological changes and an inability to keep pace with the rate of technological advances; ● the inability of key third party providers to perform their obligations to us; ● cyber threats, such as phishing, ransomware, and insider attacks, can lead to financial loss, reputational damage, and regulatory penalties if sensitive customer data and critical infrastructure are not adequately protected; ● our ability to retain key members of our management team; and ● our success at managing the risks involved in the foregoing.
The 34 Table of Contents phase-in of the capital conservation buffer requirement began on January 1, 2016, when a buffer greater than 0.625% of risk-weighted assets was required, which amount increased by 0.625% each year until the buffer requirement was fully implemented on January 1, 2019.
The phase-in of the capital conservation buffer requirement began on January 1, 2016, when a buffer greater than 0.625% of risk-weighted assets was required, which amount increased by 0.625% each year until the buffer requirement was fully implemented on January 1, 2019.
Home equity lines of credit (HELOCs) are secured with a deed of trust or mortgage and are generally issued for up to 90% of the appraised or assessed value of the property securing the line of credit, less the outstanding balance on the first mortgage.
Home equity lines of credit (HELOCs) are secured with a deed of trust or mortgage and are generally issued for up to 90% of the appraised or assessed value of the property securing the line of credit, less the outstanding balance on the first mortgage for a period of ten years.
Demand loans, loans having no stated schedule of repayments and no stated maturity, and overdrafts are reported as due in one year or less. Mortgage loans that have adjustable rates are shown as maturing at their next repricing date.
Demand loans, loans having no stated schedule of repayments and 14 Table of Contents no stated maturity, and overdrafts are reported as due in one year or less. Mortgage loans that have adjustable rates are shown as maturing at their next repricing date.
These counties have a total population of approximately 1.3 million, and some counties in this market area are located within the Kansas City MSA, or the St. Joseph MSA, which has a combined population of approximately 2.3 million.
These counties have a total population of approximately 1.9 million, and some counties in this market area are located within the Kansas City MSA, or the St. Joseph MSA, which has a combined population of approximately 2.4 million.
High unemployment or generally weak economic conditions may result in borrowers having to provide rental rate concessions to achieve adequate occupancy rates. In an effort to reduce these risks, the Bank evaluates the guarantor’s ability to inject personal funds as a tertiary source of repayment. Commercial Real Estate Lending.
High unemployment or generally weak economic conditions may result in borrowers having to provide rental rate concessions to achieve adequate occupancy rates. In an effort to reduce these risks, the Bank evaluates the guarantor’s ability to inject personal funds as a tertiary source of repayment.
Based on projected prepayment rates, the weighted average life of the fixed rate MBS and CMOs at June 30, 2024, was 61 months. Actual prepayment rates experienced, which often vary due to changes in market interest rates, may cause the anticipated average life of MBS portfolio to extend or shorten as compared to prepayment rates anticipated.
Based on projected prepayment rates, the weighted average life of the fixed rate MBS and CMOs at June 30, 2025, was 56 months. Actual prepayment rates experienced, which often vary due to changes in market interest rates, may cause the anticipated average life of MBS portfolio to extend or shorten as compared to prepayment rates anticipated.
After an account secured by real estate becomes over 60 days past due, the Bank will typically send a demand notice to the customer which, if not cured within the time provided or unless satisfactory arrangements have been made, will lead to foreclosure.
After an account secured by real estate becomes over 60 days past 16 Table of Contents due, the Bank will typically send a demand notice to the customer which, if not cured within the time provided or unless satisfactory arrangements have been made, will lead to foreclosure.
The Bank’s west region includes 12 of its facilities, which are situated in Christian, Greene, Phelps, Stone, Taney, and Webster counties in Missouri. These counties have a total population of approximately 575,000, and included within this market area is the Springfield MSA, which has a population of approximately 491,000.
The Bank’s west region includes 12 of its facilities, which are situated in Christian, Greene, Phelps, Stone, Taney, and Webster counties in Missouri. These counties have a total population of approximately 581,000, and included within this market area is the Springfield MSA, which has a population of approximately 497,000.
Southern Bank Real Estate Investments, LLC is a REIT which is majority-owned by the investment subsidiary, but has other preferred shareholders in order to meet the requirements to be a REIT. At June 30, 2024, SB Real Estate Investments, LLC held assets of approximately $1.4 billion. Southern Bank Real Estate Investments, LLC held assets of approximately $1.3 billion.
Southern Bank Real Estate Investments, LLC is a REIT which is majority-owned by the investment subsidiary, but has other preferred shareholders in order to meet the requirements to be a REIT. At June 30, 2025, SB Real Estate Investments, LLC held assets of approximately $1.5 billion. Southern Bank Real Estate Investments, LLC held assets of approximately $1.3 billion.
The Chief Lending Officer and Regional President are responsible for oversight of loan production. The Chief Credit Officer is responsible for oversight of underwriting, loan policy, and administration. Loan officers have varying amounts of lending authority depending upon experience and types of loans.
The Chief Lending Officer and Chief Banking Officer are responsible for oversight of loan production. The Chief Credit Officer is responsible for oversight of underwriting, loan policy, and administration. Loan officers have varying amounts of lending authority depending upon experience and types of loans.
Of this amount, $176.0 million were loans related to agriculture, including amortizing equipment loans and annual production lines. The Bank expects to maintain, and may increase, the percentage of commercial business loans in its total loan portfolio. The Bank currently offers both fixed and adjustable rate commercial business loans.
Of this amount, $206.1 million were loans related to agriculture, including amortizing equipment loans and annual production lines. The Bank expects to maintain, and may increase, the percentage of commercial business loans in its total loan portfolio. The Bank currently offers both fixed and adjustable rate commercial business loans.
Technological advances, for example, have lowered barriers to market entry, allowed banks to expand their geographic reach by providing services over the Internet and made it possible for non-depository institutions to offer products and services that traditionally have been provided by banks.
Technological advances, for example, have lowered barriers to market entry, allowed 7 Table of Contents banks to expand their geographic reach by providing services over the Internet and made it possible for non-depository institutions to offer products and services that traditionally have been provided by banks.
The branch offices are located in Poplar Bluff (4), Van Buren, Dexter (2), Kennett, Doniphan, Sikeston, Qulin, Springfield (3), Thayer (2), West Plains (2), Alton, Clever, Forsyth, Fremont 6 Table of Contents Hills, Kimberling City, Ozark, Nixa, Rogersville, Marshfield, Cape Girardeau (2), Jackson, Gideon, Chaffee, Benton, Advance, Bloomfield, Essex, Rolla, Arnold, Oakville, Kansas City (2), Kearney, Lee’s Summit, Macon, Maryville, Boonville, Brookfield, Chillicothe (2), Smithville, St.
The branch offices are located in Poplar Bluff (three and headquarters), Van Buren, Dexter (two), Kennett, Doniphan, Sikeston, Qulin, Springfield (three), Thayer (two), West Plains (two), Alton, Clever, Forsyth, Fremont Hills, Kimberling City, Ozark, Nixa, Rogersville, Marshfield, Cape Girardeau (two), 6 Table of Contents Jackson, Gideon, Chaffee, Benton, Advance, Bloomfield, Essex, Rolla, Arnold, Oakville, Kansas City (two), Kearney, Lee’s Summit, Macon, Maryville, Boonville, Brookfield, Chillicothe (two), Smithville, St.
The initial investment in this subsidiary was $1.5 million, and at June 30, 2024, the carrying value of the investment was $365,000. SB Real Estate Investments, LLC is a wholly owned subsidiary of the Bank formed to hold Southern Bank Real Estate Investments, LLC.
The initial investment in this subsidiary was $1.5 million, and at June 30, 2025, the carrying value of the investment was $196,000. SB Real Estate Investments, LLC is a wholly owned subsidiary of the Bank formed to hold Southern Bank Real Estate Investments, LLC.
At June 30, 2024, the Bank was categorized as “well capitalized” under these prompt corrective action standards.
At June 30, 2025, the Bank was categorized as “well capitalized” under these prompt corrective action standards.
Due to its loan activity and the acquisitions of Arkansas banks in recent periods, the Bank is subject to an Arkansas income tax. The tax is imposed on the Bank’s apportioned taxable income at a rate of 6.2%. Illinois Taxation General.
Due to its loan activity and the acquisitions of Arkansas banks in recent periods, the Bank is subject to an Arkansas income tax. The tax is imposed on the Bank’s apportioned taxable income at a rate of 4.3%. Illinois Taxation General.
See "REGULATION – The Bank – Federal Home Loan Bank System." Although deposits are the Bank’s primary and preferred source of funds, the Bank has actively used FHLB advances.
See "REGULATION – The Bank – Federal Home Loan Bank System." Although deposits are the Bank’s primary and preferred source of funds, the Bank has actively used FHLB advances as a source of funds as well.
Adversely classified loans are so designated due to concerns regarding the borrower’s ability to generate sufficient cash flows to service the debt. Adversely classified loans totaling $5.5 million had been placed on nonaccrual status at June 30, 2024, of which $3.3 million were more than 30 days delinquent.
Adversely classified loans are so designated due to concerns regarding the borrower’s ability to generate sufficient cash flows to service the debt. Adversely classified loans totaling $18.5 million had been placed on nonaccrual status at June 30, 2025, of which $18.1 million were more than 30 days delinquent.
Under applicable capital regulations, the minimum capital ratios are: (1) a CET1 capital ratio of 4.5% of risk-weighted assets; (2) a Tier 1 capital ratio of 6.0% of risk-weighted assets; (3) a total capital ratio of 8.0% of risk-weighted assets; and (4) a leverage ratio (the ratio of Tier 1 capital to average total adjusted assets) of 4.0%.
Under applicable capital regulations, the minimum capital ratios to be considered adequately capitalized are: (1) a CET1 capital ratio of 4.5% of risk-weighted assets; (2) a Tier 1 capital ratio of 6.0% of risk-weighted assets; (3) a total capital ratio of 8.0% of risk-weighted assets; and (4) a leverage ratio (the ratio of Tier 1 capital to average total adjusted assets) of 4.0%.
At June 30, 2024 the Bank’s south region includes 13 of its facilities, one of which is limited service, which are situated in Dunklin, Howell, and Oregon counties in Missouri, and Craighead, Greene, Independence, Lonoke, and White counties in Arkansas.
The Bank’s south region includes 13 of its facilities, one of which is limited service, which are situated in Dunklin, Howell, and Oregon counties in Missouri, and Craighead, Greene, Independence, Lonoke, and White counties in Arkansas.
Due to its loan activity and the acquisitions of Kansas banks in the most recent period, the Bank is subject to a Kansas privilege tax. The tax is imposed on the Bank’s apportioned taxable income at a rate of 3.95%.
Due to its loan activity and the acquisitions of Kansas banks in the most recent period, the Bank is subject to a Kansas privilege tax. The tax is imposed on the Bank’s apportioned taxable income at a rate of 4.065%.
Increases in originations over recent periods is attributed to increased lending activity, increased borrower refinancing, and an expanded market area and customer base following recent mergers. From time to time, the Bank has purchased loan participations consistent with its loan underwriting standards. During fiscal 2024, the Bank committed to purchase $29.8 million of new loan participations.
Increases in originations over recent periods is attributed to increased lending activity, borrower refinancing, and an expanded market area and customer base following recent mergers. From time to time, the Bank has purchased loan participations consistent with its loan underwriting standards. During fiscal 2025, the Bank committed to purchase $54.4 million of new loan participations.
At June 30, 2024, the Bank had additional borrowing capacity on its reported residential and commercial real estate loans pledged to the FHLB of approximately $742.5 million, as compared to $541.3 million at June 30, 2023. Additionally, the Bank is approved to borrow from the Federal Reserve Bank’s discount window on a primary credit basis.
At June 30, 2025, the Bank had additional borrowing capacity on its reported residential and commercial real estate loans pledged to the FHLB of approximately $752.6 million, as compared to $742.5 million at June 30, 2024. Additionally, the Bank is approved to borrow from the Federal Reserve Bank’s discount window on a primary credit basis.
The division has traditionally offered investment management services, and in fiscal 2024, as part of the Citizens merger, added fiduciary services including trust management and employee benefits. Assets under management were $575.9 million at June 30, 2024, as compared to $566.2 million at June 30, 2023.
The division has traditionally offered investment management services, and in fiscal 2023, as part of the Citizens merger, added fiduciary services including trust management and employee benefits. Assets under management were $645.8 million at June 30, 2025, as compared to $575.9 million at June 30, 2024.
These loans continued to perform according to contractual terms as of June 30, 2024, but were identified as having elevated risk due to concerns regarding the borrower’s ability to continue to generate sufficient cash flows to service the debt. At June 30, 2024, these other loans of concern totaled $48.2 million, as compared to $27.9 million at June 30, 2023.
These loans continued to perform according to contractual terms as of June 30, 2025, but were identified as having elevated risk due to concerns regarding the borrower’s ability to continue to generate sufficient cash flows to service the debt. At June 30, 2025, these other loans of concern totaled $77.0 million, as compared to $48.2 million at June 30, 2024.
Of the available credit, in addition to the amount advanced, $461,000 is encumbered 28 Table of Contents in relation to residential real estate loans sold onto the secondary market through the FHLB, while there were no letters of credit issued to secure public unit deposits.
Of the available credit, in addition to the amount advanced, $612,000 is encumbered in relation to residential real estate loans sold onto the secondary market through the FHLB, while there were no letters of credit issued to secure public unit deposits.
These funds are also used to purchase mortgage-backed and related securities ("MBS"), municipal bonds, and other permissible investments. At June 30, 2024, the Company had total assets of $4.6 billion, total deposits of $4.0 billion and stockholders’ equity of $488.7 million. The Company has not engaged in any significant activity other than holding the stock of the Bank.
These funds are also used to purchase mortgage-backed and related securities ("MBS"), municipal bonds, and other permissible investments. At June 30, 2025, the Company had total assets of $5.0 billion, total deposits of $4.3 billion and stockholders’ equity of $544.7 million. The Company has not engaged in any significant activity other than holding the stock of the Bank.
See Business - Deposit Activities and Other Sources of Funds - Borrowings. 32 Table of Contents As a member, the Bank is required to purchase and maintain stock in the FHLB of Des Moines. At June 30, 2024, the Bank had $8.7 million in FHLB stock, which was in compliance with this requirement.
See Business - Deposit Activities and Other Sources of Funds - Borrowings. 32 Table of Contents As a member, the Bank is required to purchase and maintain stock in the FHLB of Des Moines. At June 30, 2025, the Bank had $9.4 million in FHLB stock, which was in compliance with this requirement.
Due to its loan activity and the acquisition of Kansas City banks in the most recent period, the Bank is subject to a Kansas City earnings tax. The tax is imposed on the Bank’s apportioned taxable income at a rate of 1.0%. Arkansas Taxation General.
Due to its loan activity and the acquisition of Kansas City banks in fiscal 2023, the Bank is subject to a Kansas City earnings tax. The tax is imposed on the Bank’s apportioned taxable income at a rate of 1.0%. Arkansas Taxation General.
These counties have a total population of approximately 244,000, and included within this market area is the Cape Girardeau MSA, which has a population of approximately 98,000.
These counties have a total population of approximately 245,000, and included within this market area is the Cape Girardeau MSA, which has a population of approximately 99,000.
As of June 30, 2024, the Bank had $102.1 million in outstanding FHLB advances, including $102.1 million in fixed-rate long term advances, and no overnight borrowings.
As of June 30, 2025, the Bank had $104.1 million in outstanding FHLB advances, including $104.1 million in fixed-rate long term advances, and no overnight borrowings.
On the basis of management’s review of the assets of the Company, at June 30, 2024, adversely classified assets totaled $44.7 million, or 0.96% of total assets as compared to $50.0 million, or 1.15% of total assets at June 30, 2023.
On the basis of management’s review of the assets of the Company, at June 30, 2025, adversely classified assets totaled $50.3 million, or 1.00% of total assets as compared to $44.7 million, or 0.96% of total assets at June 30, 2024.
These counties have a total population of approximately 430,000, and included within this market area is the Jonesboro MSA, which has a population of approximately 136,000. The Cabot, Arkansas, branch in Lonoke County, is located in the northeast corner of the Little Rock MSA, which has a population of approximately 764,000.
These counties have a total population of approximately 433,000, and included within this market area is the Jonesboro MSA, which has a population of approximately 138,000. The Cabot, Arkansas, branch in Lonoke County, is located in the northeast corner of the Little Rock MSA, which has a population of approximately 769,000.
At June 30, 2024, the maximum amount which the Bank could lend to any one borrower and the borrower’s related entities was approximately $126.4 million. At June 30, 2024, the Bank’s ten largest credit relationships, as defined by loan to one borrower limitations, ranged from $27.3 million to $76.8 million, net of participation interests sold.
At June 30, 2025, the maximum amount which the Bank could lend to any one borrower and the borrower’s related entities was approximately $138.9 million. At June 30, 2025, the Bank’s ten largest credit relationships, as defined by loan to one borrower limitations, ranged from $27.2 million to $76.8 million, net of participation interests sold.
These items are also used as a basis to determine the appraised value of the subject property. Loan amounts are generally limited to 80% of the lesser of current appraised value and/or the cost of construction. At June 30, 2024, construction loans outstanding included 48 loans, totaling $22.0 million, for which a modification had been agreed to.
These items are also used as a basis to determine the appraised value of the subject property. Loan amounts are generally limited to 80% of the lesser of current appraised value and/or the cost of construction. At June 30, 2025, construction loans outstanding included 59 loans, totaling $29.5 million, for which a modification had been agreed.
The securities had been issued in June 2005 by Ozarks Legacy in connection with the sale of trust preferred securities, bear interest at a floating rate based on SOFR, and mature in 2035. At June 30, 2024, the carrying value was $2.8 million, and bore interest at a current coupon rate of 8.05% and an effective rate of 9.98%.
The securities had been issued in June 2005 by Ozarks Legacy in connection with the sale of trust preferred securities, bear interest at a floating rate based on SOFR, and mature in 2035. At June 30, 2025, the carrying value was $2.8 million, and bore interest at a current coupon rate of 7.03% and an effective rate of 8.77%.
In response to the COVID -19 pandemic, effective March 26, 2020, the FRB reduced the reserve requirement ratio to 0% for all account types, eliminating reserve requirements for all depository institutions, to support lending to households and businesses.
In response to the COVID -19 pandemic, effective March 26, 2020, the FRB reduced the reserve requirement ratio to 0% for all account types, eliminating reserve requirements for all depository institutions, to support lending to households and businesses. At June 30, 2025 the reserve requirement continued to be 0%.
During the year ended June 30, 2024, the Bank originated $49.4 million of ARM loans and $97.6 million of fixed-rate loans that were secured by one- to four-family residences, for retention in the Bank’s portfolio. An additional $21.9 million in fixed-rate one- to four-family residential loans were originated for sale on the secondary market.
During the year ended June 30, 2025, the Bank originated $58.4 million of ARM loans and $119.8 million of fixed-rate loans that were secured by one- to four-family residences, for retention in the Bank’s portfolio. An additional $21.6 million in fixed-rate one- to four-family residential loans were originated for sale on the secondary market.
SMS Financial Services, Inc. is a wholly owned subsidiary of the Bank, which had no assets or liabilities at June 30, 2024, and is currently inactive. Employees and Human Capital Resources As of June 30, 2024, the Company had 693 full-time employees and 41 part-time employees for a total of 734 employees (collectively, our “Team Members”).
SMS Financial Services, Inc. is a wholly owned subsidiary of the Bank, which had no assets or liabilities at June 30, 2025, and is currently inactive. Employees and Human Capital Resources As of June 30, 2025, the Company had 696 full-time employees and 43 part-time employees for a total of 739 employees (collectively, our “Team Members”).
The most recent market share data by the FDIC reflected that the Bank was one of 265 bank or saving association groups located in Missouri competing for approximately $250.0 billion in deposits at FDIC-insured institutions.
The most recent market share data by the FDIC reflected that the Bank was one of 263 bank or saving association groups located in Missouri competing for approximately $252.2 billion in deposits at FDIC-insured institutions.
Such commitments may be oral or in writing with specified terms, conditions and at a specified rate of interest. The Bank had outstanding net loan commitments of approximately $898.6 million at June 30, 2024. See Note 12 of Notes to the Consolidated Financial Statements contained in Item 8.
Such commitments may be oral or in writing with specified terms, conditions and at a specified rate of interest. The Bank had outstanding net loan commitments of approximately $944.0 million at June 30, 2025. See Note 13 of Notes to the Consolidated Financial Statements contained in Item 8.
Substantially all of the one- to four-family residential mortgage originations in the Bank’s portfolio are secured by property located within the Bank’s market area. Fixed rate one- to four- family loans represented 77.3% of the one- to four- family portfolio with a weighted average maturity of 14.7 years.
Substantially all of the one- to four-family residential mortgage originations in the Bank’s portfolio are secured by property located within the Bank’s market area. Fixed rate one- to four- family loans represented 67.6% of the one- to four- family portfolio with a weighted average maturity of 13.6 years.
The Bank’s commercial business lending activities encompass loans with a variety of purposes and security, including loans to finance accounts receivable, inventory, equipment and operating lines of credit. At June 30, 2024, the Bank had $668.3 million in commercial business loans outstanding, or 17.6% of net loans receivable.
The Bank’s commercial business lending activities encompass loans with a variety of purposes and security, including loans to finance accounts receivable, inventory, equipment and operating lines of credit. At June 30, 2025, the Bank had $716.4 million in commercial business loans outstanding, or 17.7% of net loans receivable.
In fiscal 2024, the Bank originated $917.3 million of loans, compared to $1.2 billion and $1.1 billion, respectively, in fiscal 2023 and 2022. Of these loans, mortgage loan originations were $691.5 million, $1.0 billion, and $970.1 million in fiscal 2024, 2023, and 2022, respectively.
In fiscal 2025, the Bank originated $988.3 million of loans, compared to $917.3 million and $1.2 billion, respectively, in fiscal 2024 and 2023. Of these loans, mortgage loan originations were $774.6 million, $691.5 million, and $1.0 billion million in fiscal 2025, 2024, and 2023, respectively.
Substandard assets must have one or more defined weaknesses and are characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected.
There are three classifications for problem assets: substandard, doubtful and loss. Substandard assets must have one or more defined weaknesses and are characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected.
At June 30, 2024, the Company’s debt and other securities portfolio totaled $123.0 million, or 2.7% of total assets as compared to $147.3 million, or 3.4% of total assets at June 30, 2023. During fiscal 2024, the Bank had $3.6 million in maturities, $16.6 million in sales, and $9.0 million in purchases of these securities.
At June 30, 2025, the Company’s debt and other securities portfolio totaled $101.4 million, or 2.0% of total assets as compared to $123.0 million, or 2.7% of total assets at June 30, 2024. During fiscal 2025, the Bank had $6.9 million in maturities, $72,000 in sales, and $6.2 million in purchases of these securities.
Investment Securities Analysis The following table sets forth the Company’s debt and other securities portfolio, at carrying value, and membership stock, at cost, at the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At June 30, ​ ​ ​ 2024 ​ 2023 ​ ​ 2022 ​ ​ ​ Fair ​ Percent of ​ Fair ​ Percent of ​ ​ Fair ​ Percent of ​ ​ Value Portfolio ​ Value Portfolio ​ ​ Value Portfolio ​ ​ ​ (Dollars in thousands) ​ State and political subdivisions ​ $ 27,753 ​ ​ 22.56 % ​ $ 42,568 ​ ​ 28.90 % ​ $ 44,479 ​ ​ 68.63 % Corporate obligations ​ ​ 31,277 ​ ​ 25.42 ​ ​ ​ 32,538 ​ ​ 22.09 ​ ​ ​ 19,887 ​ ​ 30.69 ​ Asset-backed securities ​ ​ 58,679 ​ ​ 47.69 ​ ​ ​ 68,626 ​ ​ 46.59 ​ ​ ​ — ​ ​ — ​ Other securities ​ 5,333 ​ ​ 4.33 ​ ​ 3,570 ​ ​ 2.42 ​ ​ 443 ​ ​ 0.68 ​ Total ​ $ 123,042 ​ ​ 100.00 % ​ $ 147,302 ​ ​ 100.00 % ​ $ 64,809 ​ ​ 100.00 % 23 Table of Contents At June 30, 2024, the Company did not have any debt securities that were not carried at fair value. ​ The following table sets forth the maturities and weighted average yields of AFS debt securities in the Company’s investment securities portfolio and membership stock at June 30, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available for Sale Securities ​ ​ June 30, 2024 ​ ​ Amortized ​ Fair ​ Tax-Equiv. ​ Cost Value Wtd.-Avg.
Investment Securities Analysis The following table sets forth the Company’s debt and other securities portfolio, at carrying value, and membership stock, at cost, at the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At June 30, ​ ​ ​ 2025 ​ 2024 ​ ​ 2023 ​ ​ ​ Fair ​ Percent of ​ Fair ​ Percent of ​ ​ Fair ​ Percent of ​ ​ Value Portfolio ​ Value Portfolio ​ ​ Value Portfolio ​ ​ ​ (Dollars in thousands) ​ State and political subdivisions ​ $ 24,263 ​ ​ 23.94 % ​ $ 27,753 ​ ​ 22.56 % ​ $ 42,568 ​ ​ 28.90 % Corporate obligations ​ ​ 30,642 ​ ​ 30.23 ​ ​ ​ 31,277 ​ ​ 25.42 ​ ​ ​ 32,538 ​ ​ 22.09 ​ Asset-backed securities ​ ​ 42,481 ​ ​ 41.92 ​ ​ ​ 58,679 ​ ​ 47.69 ​ ​ ​ 68,626 ​ ​ 46.59 ​ Other securities ​ 3,964 ​ ​ 3.91 ​ ​ 5,333 ​ ​ 4.33 ​ ​ 3,570 ​ ​ 2.42 ​ Total ​ $ 101,350 ​ ​ 100.00 % ​ $ 123,042 ​ ​ 100.00 % ​ $ 147,302 ​ ​ 100.00 % 23 Table of Contents At June 30, 2025, the Company did not have any debt securities that were not carried at fair value. ​ The following table sets forth the maturities and weighted average yields of AFS debt securities in the Company’s investment securities portfolio and membership stock at June 30, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available for Sale Securities ​ ​ June 30, 2025 ​ ​ Amortized ​ Fair ​ Tax-Equiv. ​ Cost Value Wtd.-Avg.
Included in adversely classified assets at June 30, 2024, were various loans totaling $40.9 million (see Note 3 of Notes to the Consolidated Financial Statements contained in Item 8 for more information on adversely classified loans) and foreclosed real estate and repossessed assets totaling $3.8 million.
Included in adversely classified assets at June 30, 2025, were various loans totaling $49.6 million (see Note 3 of Notes to the Consolidated Financial Statements contained in Item 8 for more information on adversely classified loans) and foreclosed real estate and repossessed assets totaling $657,000.
At June 30, 2024, the carrying value was $5.6 million and bore interest at a current coupon rate of 7.40% and an effective rate of 10.05%. In the February 2022 acquisition of Fortune Financial Corporation (Fortune), the Company assumed $7.5 million in fixed-to-floating rate subordinated notes.
At June 30, 2025, the carrying value was $5.6 million and bore interest at a current coupon rate of 6.38% and an effective rate of 8.75%. In the February 2022 acquisition of Fortune Financial Corporation (Fortune), the Company assumed $7.5 million in fixed-to-floating rate subordinated notes.
We cannot predict what assessment rates will be in the future. Insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.
Insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.
The Bank also originates loans secured by multi-family residential properties that are often located outside the Company’s primary market area, but made to borrowers who operate within the primary market area. At June 30, 2024, the Bank had $384.7 million, or 10.1% of net loans receivable, in multi-family residential real estate.
The Bank also originates loans secured by multi-family residential properties that are often located outside the Company’s primary market area, but made to borrowers who operate within the primary market area. At June 30, 2025, the Bank had $422.8 million, or 10.4% of net loans receivable, secured by multi-family residential real estate.
At June 30, 2024, the Bank had purchased participation interests in 71 loans with balances outstanding totaling $178.5 million. Supervision of the loan portfolio is the responsibility of our Chief Lending Officer, Rick Windes, Regional President Justin Cox, and our Chief Credit Officer, Mark Hecker (our “Senior Lending and Credit Officers”).
At June 30, 2025, the Bank had purchased participation interests in 71 loans with balances outstanding totaling $188.0 million. Supervision of the loan portfolio is the responsibility of our Chief Lending Officer, Rick Windes, Chief Banking Officer Justin Cox, and our Chief Credit Officer, Mark Hecker (our “Senior Lending and Credit Officers”).
On October 18, 2022, the FDIC adopted a final rule to increase its initial base insurance assessment rate schedules by two basis points to improve the likelihood that the reserve ratio of the DIF would be restored to at least 1.35 percent by September 30, 2028.
The Bank’s FDIC premiums are based on its supervisory ratings and certain financial ratios. On October 18, 2022, the FDIC adopted a final rule to increase its initial base insurance assessment rate schedules by two basis points to improve the likelihood that the reserve ratio of the DIF would be restored to at least 1.35 percent by September 30, 2028.
Under the prompt corrective action (PCA) standards of the FRB, in order to be considered well-capitalized, the Bank must have a ratio of CET1 capital to risk-weighted assets of at least 6.5%, a ratio of Tier 1 capital to risk-weighted assets of at least 8%, a ratio of total capital to risk-weighted assets of at least 10%, and a leverage ratio of at least 5%; and in order to be considered adequately capitalized, it must have the minimum capital ratios described above.
At June 30, 2025, the Bank reported risk-based capital ratios meeting the capital conservation buffer. 34 Table of Contents Under the prompt corrective action (PCA) standards of the FRB, in order to be considered well-capitalized, the Bank must have a ratio of CET1 capital to risk-weighted assets of at least 6.5%, a ratio of Tier 1 capital to risk-weighted assets of at least 8%, a ratio of total capital to risk-weighted assets of at least 10%, and a leverage ratio of at least 5%; and in order to be considered adequately capitalized, it must have the minimum capital ratios described above.
The investment portfolio also included $58.7 million of asset-backed securities at June 30, 2024, all of which are subject to early redemption. The remaining portfolio consists of $5.3 million in other securities, primarily SBA pools. Based on projected maturities, the weighted average life of the debt and other securities portfolio at June 30, 2024, was 51 months.
The investment portfolio also included $42.5 million of asset-backed securities at June 30, 2025, all of which are subject to early redemption. The remaining portfolio consists of $4.0 million in other securities, primarily SBA pools. Based on projected maturities, the weighted average life of the debt and other securities portfolio at June 30, 2025, was 50 months.
In order for the Bank to borrow from the FHLB, it has reported $1.4 billion of its residential, multi-family, and commercial real estate loans to the FHLB as eligible collateral for available credit of approximately $845.1 million, and has purchased $8.7 million in membership stock in the FHLB of Des Moines.
In order for 28 Table of Contents the Bank to borrow from the FHLB, it has reported $1.5 billion of its residential, multi-family, and commercial real estate loans to the FHLB as eligible collateral for available credit of approximately $857.3 million, and has purchased $9.4 million in membership stock in the FHLB of Des Moines.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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The amount of this allowance is determined by our management through a periodic review and consideration of several factors, including, but not limited to: ● historical default and loss experience; ● historical recovery experience; ● economic conditions; ● evaluation of non-performing loans; ● the amount and quality of collateral, including guarantees, securing the loans. ● risk characteristics of the various classifications of loans; and ● the rate of growth, quality, size and diversity of the loan portfolio; 40 Table of Contents If actual credit losses exceed the projections modeled in arriving at our estimate of the allowance for credit losses, our business, financial condition and profitability may suffer.
The amount of this allowance is determined by our management through a periodic review and consideration of several factors, including, but not limited to: ● historical default and loss experience; ● historical recovery experience; ● economic conditions; ● evaluation of non-performing loans; ● the amount and quality of collateral, including guarantees, securing the loans. ● risk characteristics of the various classifications of loans; and 40 Table of Contents ● the rate of growth, quality, size and diversity of the loan portfolio; If actual credit losses exceed the projections modeled in arriving at our estimate of the allowance for credit losses, our business, financial condition and profitability may suffer.
A bank that has experienced rapid growth in commercial real estate lending, has notable exposure to a specific type of commercial real estate loan, or is approaching or exceeding the following supervisory criteria may be identified for further supervisory analysis with respect to real estate concentration risk: total loans for construction land development and other land representing 100% or more of the bank’s tier 1 regulatory capital plus the allowance for loan losses includable in total regulatory capital; or total commercial real estate loans (as defined in the guidance) that exceed 300% of the bank’s tier 1 regulatory capital plus the allowance for credit losses includable in total regulatory capital and the bank’s commercial real estate portfolio has increased by 50% or more during the prior 36 months.
A bank that has experienced rapid growth in commercial real estate lending, has notable exposure to a specific type of commercial real estate loan, or is approaching or exceeding the following supervisory criteria may be identified for further supervisory analysis with respect to real estate concentration risk: total loans for construction land development and other land representing 100% or more of the bank’s tier 1 regulatory capital plus the allowance for loan losses includable in total regulatory capital; or total commercial real estate loans (as defined in the guidance) that exceed 300% of the bank’s tier 1 regulatory capital plus the ACL includable in total regulatory capital and the bank’s commercial real estate portfolio has increased by 50% or more during the prior 36 months.
The evaluation considers factors including; past events, current conditions, and reasonable & supportable forecasts, and the Company’s ability and intent to hold the security until maturity. A qualitative determination is acceptable. There were no credit-related factors underlying unrealized losses on AFS securities at June 30, 2024, or June 30, 2023.
The evaluation considers factors including; past events, current conditions, and reasonable & supportable forecasts, and the Company’s ability and intent to hold the security until maturity. A qualitative determination is acceptable. There were no credit-related factors underlying unrealized losses on AFS securities at June 30, 2025, or June 30, 2024.
The success of the farm may be affected by many factors outside the control of the farm borrower, including adverse weather conditions that prevent the planting of a crop or limit crop yields (such as hail, drought and floods), loss of livestock due to disease or other factors, declines in market prices for agricultural products (both domestically and internationally) and the impact of government regulations (including changes in price supports, subsidies, and environmental regulations).
The success of the farm may be affected by many factors outside the control of the farm borrower, including adverse weather conditions that prevent the planting of a crop or limit crop yields (such as hail, drought and floods), loss of livestock due to disease or other factors, declines in market 42 Table of Contents prices for agricultural products (both domestically and internationally) and the impact of government regulations (including changes in price supports, subsidies, and environmental regulations).
This also includes the risk that interest-earning assets may be more responsive to changes in interest rates than interest-bearing liabilities, or vice versa 43 Table of Contents (repricing risk), the risk that the individual interest rates or rate indices underlying various interest-earning assets and interest-bearing liabilities may not change in the same degree over a given time period (basis risk), and the risk of changing interest rate relationships across the spectrum of interest-earning asset and interest-bearing liability maturities (yield curve risk), including a prolonged flat or inverted yield curve environment.
This also includes the risk that interest-earning assets may be more responsive to changes in interest rates than interest-bearing liabilities, or vice versa (repricing risk), the risk that the individual interest rates or rate indices underlying various interest-earning assets and interest-bearing liabilities may not change in the same degree over a given time period (basis risk), and the risk of changing interest rate relationships across the spectrum of interest-earning asset and interest-bearing liability maturities (yield curve risk), including a prolonged flat or inverted yield curve environment.
Future deterioration in economic conditions, particularly within our primary market area in Missouri and northern Arkansas, could result in the following consequences, among others, any of which could hurt our business materially: ● loan delinquencies may increase; ● problem assets and foreclosures may increase; ● demand for our products and services may decline; ● loan collateral may decline in value, in turn reducing a customer’s borrowing power and reducing the value of collateral securing our loans; ● the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; and ● reduction in our low-cost or noninterest-bearing deposits.
Future deterioration in economic conditions, particularly within our primary market area in Missouri and northern Arkansas, could result in the following consequences, among others, any of which could hurt our business materially: ● loan delinquencies may increase; ● problem assets and foreclosures may increase; ● demand for our products and services may decline; ● loan collateral may decline in value, in turn reducing a customer’s borrowing power and reducing the value of collateral securing our loans; ● the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; ● the need to increase the allowance for credit losses; and ● reduction in our low-cost or noninterest-bearing deposits.
As of June 30, 2024, we had outstanding $24.3 million aggregate principal amount of junior subordinated debt securities issued in connection with the sale of trust preferred securities by subsidiaries of ours that are statutory business trusts.
As of June 30, 2025, we had outstanding $24.3 million aggregate principal amount of junior subordinated debt securities issued in connection with the sale of trust preferred securities by subsidiaries of ours that are statutory business trusts.
Based on the levels of taxable income in prior years and our expectation of profitability in the current year and future years, management has determined that no valuation allowance was required at June 30, 2024.
Based on the levels of taxable income in prior years and our expectation of profitability in the current year and future years, management has determined that no valuation allowance was required at June 30, 2025.
Risks Relating to Credit and Lending Activities Our allowance for credit losses may be insufficient to absorb losses in our loan portfolio. Lending money is a substantial part of our business. Every loan carries a certain risk that it will not be repaid in accordance with its terms or that any underlying collateral will not be sufficient to ensure repayment.
Risks Relating to Credit and Lending Activities Our ACL may be insufficient to absorb losses in our loan portfolio. Lending money is a substantial part of our business. Every loan carries a certain risk that it will not be repaid in accordance with its terms or that any underlying collateral will not be sufficient to ensure repayment.
Additionally, if insurance obtained by our borrowers is insufficient 47 Table of Contents to cover any losses sustained to the collateral, or if insurance coverage is otherwise unavailable to our borrowers, the collateral securing our loans may be negatively impacted by climate change, natural disasters and related events, which could impact our financial condition and results of operations.
Additionally, if insurance obtained by our borrowers is insufficient to cover any losses sustained to the collateral, or if insurance coverage is otherwise unavailable to our borrowers, the collateral securing our loans may be negatively impacted by climate change, natural disasters and related events, which could impact our financial condition and results of operations.
Since we plan to continue to increase our originations of these loans, it may be necessary to increase the level of our allowance for credit losses due to the increased risk characteristics associated with these types of loans. Any increase to our provision credit credit losses would adversely affect our operating results and financial condition.
Since we plan to continue to increase our originations of these loans, it may be necessary to increase the level of our ACL due to the increased risk characteristics associated with these types of loans. Any increase to our provision credit losses would adversely affect our operating results and financial condition.
As with agricultural real estate loans, the repayment of operating loans is dependent on the successful operation or management of the farm property. 42 Table of Contents The same risk applies to agricultural operating loans which are unsecured or secured by rapidly depreciating assets such as farm equipment or assets such as livestock or crops.
As with agricultural real estate loans, the repayment of operating loans is dependent on the successful operation or management of the farm property. The same risk applies to agricultural operating loans which are unsecured or secured by rapidly depreciating assets such as farm equipment or assets such as livestock or crops.
If these issues or liabilities exceed our estimates, our results of operations and financial condition may be adversely affected; 44 Table of Contents ● Prices at which acquisitions can be made fluctuate with market conditions.
If these issues or liabilities exceed our estimates, our results of operations and financial condition may be adversely affected; ● Prices at which acquisitions can be made fluctuate with market conditions.
Additionally, actions by regulatory agencies or significant litigation against us could require us to devote significant time and resources to defending our business and may lead to penalties that materially affect us and our shareholders. Non-compliance with USA Patriot Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions.
Additionally, actions by regulatory agencies or significant litigation against us could require us to devote significant time and resources to defending our business and may lead to penalties that materially affect us and our shareholders. See “Government Supervision and Regulation.” Non-compliance with USA Patriot Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions.
Should our management determine it is not more likely than not that the deferred tax assets will be realized, a valuation allowance with a charge to earnings would be reflected in the period. At June 30, 2024, our net deferred tax asset was $11.2 million, none of which was disallowed for regulatory capital purposes.
Should our management determine it is not more likely than not that the deferred tax assets will be realized, a valuation allowance with a charge to earnings would be reflected in the period. At June 30, 2025, our net deferred tax asset was $9.4 million, none of which was disallowed for regulatory capital purposes.
Specifically, unpredictable and more frequent weather disasters may adversely impact the real property, and/or the value of the real property, securing the loans in our portfolios.
Specifically, unpredictable and more frequent weather disasters may adversely impact the real property, and/or the value 47 Table of Contents of the real property, securing the loans in our portfolios.
We maintain an allowance for credit losses which we believe is appropriate to provide for expected losses over the life of loans in our portfolio.
We maintain an ACL which we believe is appropriate to provide for expected losses over the life of loans in our portfolio.
Net interest income is the difference between interest income earned on interest-earning assets, such as loans and investment securities, and interest expense paid on interest-bearing liabilities, such as deposits and borrowed funds.
Net interest income is the difference between interest income earned on interest-earning assets, such as loans and investment securities, and 43 Table of Contents interest expense paid on interest-bearing liabilities, such as deposits and borrowed funds.
For the purposes of this guidance, “commercial real estate” includes, among other types, multi-family residential loans and non-owner occupied nonresidential loans, two categories which have been a source of loan growth for the Company.
For the purposes of this guidance, “commercial real estate” includes, among other types, construction and land development loans, multi-family residential loans, and non-owner occupied nonresidential loans, which have been a source of loan growth for the Company.
These regulatory authorities have extensive discretion, including the ability to restrict an institution’s operations, require the institution to reclassify assets, determine the adequacy of the institution’s allowance for credit losses and determine the level of deposit insurance premiums assessed.
These regulatory authorities have extensive discretion, including the ability to restrict an institution’s operations, require the institution to reclassify assets, determine the adequacy of the institution’s ACL and determine the level of deposit insurance premiums assessed.
The federal banking regulators, including the Federal Reserve have adopted rules that gives a banking organization the option to phase in over a three-year or five-year period the day-one adverse effects of CECL on its regulatory capital. We elected the five-year period for our Company. CECL has substantially changed how we calculate our allowance for credit losses.
The federal banking regulators, including the Federal Reserve have adopted rules that gives a banking organization the option to phase in over a three-year or five-year period the day-one adverse effects of CECL on its regulatory capital. We elected the five-year period for our Company.
The federal banking agencies have issued guidance on sound risk management practices for concentrations in commercial real estate lending (see “REGULATION – Guidance on Commercial Real Estate Concentrations”).
The federal banking agencies have issued guidance on sound risk management practices for concentrations in commercial real estate lending (see “Government Supervision and Regulation – Guidance on Commercial Real Estate Concentrations”).
The Company’s non-owner occupied commercial real estate loans was 305.3% of Tier 1 capital and ACL at June 30, 2024, as compared to 316.9% as of June 30, 2023.
The Company’s non-owner occupied commercial real estate loans was 288.6% of Tier 1 capital and ACL at June 30, 2025, as compared to 305.3% as of June 30, 2024.
The Bank’s concentration in non-owner occupied commercial real estate loans was 317.5% of Tier 1 capital and ACL at June 30, 2024, as compared to 330.2% as of June 30, 2023, with these loans representing 41.5% of total loans at June 30, 2024. The 36-month growth rate at June 30, 2024, inclusive of acquisitions, was 84.2%.
The Bank’s concentration in non-owner occupied commercial real estate loans was 301.1% of Tier 1 capital and ACL at June 30, 2025, as compared to 317.5% as of June 30, 2024, with these loans representing 40.1% of total loans at June 30, 2025. The 36-month growth rate at June 30, 2025, inclusive of acquisitions, was 49.5%.
The majority of these loans are concentrated within the company’s primary operational footprint. The other nonfarm nonresidential real estate portfolio includes a variety of collateral types, with hospitality (hotels/restaurants), care facilities, retail stand-alone properties, and strip centers being the most common. The hospitality and retail segments are predominantly composed of franchised businesses.
The majority of these loans are concentrated within the company’s primary operational footprint. The other nonfarm nonresidential real estate portfolio includes a variety of collateral types, with hospitality (hotels/restaurants), care facilities, strip centers, retail stand-alone, and storage units are the most common.
We are required to assess our goodwill for impairment at least annually, and any goodwill impairment charge could have a material adverse effect on our results of operations and financial condition; ● To finance an acquisition, we may borrow funds, thereby increasing our leverage and diminishing our liquidity, or raise additional capital, which could dilute the interests of our existing shareholders; and ● We have completed six acquisitions since June 2017 which enhanced our rate of growth.
We are required to assess our goodwill for impairment at least annually, and any goodwill impairment charge could have a material adverse effect on our results of operations and financial condition; ● To finance an acquisition, we may borrow funds, thereby increasing our leverage and diminishing our liquidity, or raise additional capital, which could dilute the interests of our existing shareholders; ● We expect our net interest income will increase following our acquisitions; however, we also expect our general and administrative expenses to increase; and ● We have completed seven acquisitions since June 2017 which enhanced our rate of growth.
The Company’s non-owner occupied commercial real estate includes other nonfarm nonresidential real estate (174.4% as a percentage of Tier 1 capital and ACL), multifamily properties (74.6% as a percentage of Tier 1 capital and ACL), and construction and land development (56.3% as a percentage of Tier 1 capital and ACL).
The Company’s non-owner occupied commercial real estate includes other nonfarm nonresidential real estate (156.0% as a percentage of Tier 1 capital and ACL), multifamily properties (74.2% as a percentage of Tier 1 capital and ACL), and construction and land development (58.4% as a percentage of Tier 1 capital and ACL).
At June 30, 2024, 60.3% of our loans, net, consisted of commercial real estate and commercial business loans to small and mid-sized businesses, generally located in our primary market area, which are the types of businesses that have a heightened vulnerability to local economic conditions.
At June 30, 2025, 55.9% of our loans, net, consisted of commercial real estate, excluding construction as previously mentioned above, and commercial business loans to small and mid-sized businesses, generally located in our primary market area, which are the types of businesses that have a heightened vulnerability to local economic conditions.
If additional borrowers become delinquent and do not pay their loans and we are unable to successfully manage our nonperforming assets, our losses and troubled assets could increase significantly, which could have a material adverse effect on our financial condition and results of operations. See also “Regulation – Regulatory Capital Requirements.” Our construction lending exposes us to significant risk.
If additional borrowers become delinquent and do not pay their loans and we are unable to successfully manage our nonperforming assets, our losses and troubled assets could increase significantly, which could have a material adverse effect on our financial condition and results of operations.
Any delinquent payments or the failure to repay these loans would hurt our operating results and financial condition. Our loan portfolio possesses risk due to our agricultural lending. Included in the commercial real estate loans described above are agricultural real estate loans totaling $232.5 million, or 6.1% of our loan portfolio, net, at June 30, 2024.
Any delinquent payments or the failure to repay these loans would hurt our operating results and financial condition. Our loan portfolio possesses risk due to our agricultural lending. Our agricultural real estate loans totaled $245.0 million, or 6.1% of our loan portfolio, net, at June 30, 2025.
The primary agricultural activity in our market areas is livestock, dairy, poultry, rice, timber, soybeans, wheat, melons, corn, and cotton. Accordingly, adverse circumstances affecting these activities could have an adverse effect on our agricultural real estate loan portfolio.
The primary agricultural activity in our market areas is livestock, dairy, poultry, rice, timber, soybeans, wheat, melons, corn, and cotton. Accordingly, adverse circumstances affecting these activities could have an adverse effect on our agricultural real estate loan portfolio. Our agricultural production and equipment loans totaled $206.1 million, or 5.09%, of our loan portfolio, net, at June 30, 2025, these loans.
Inflation has risen sharply since the end of 2021 to levels not seen in more than 40 years. Small and medium-sized businesses may be impacted more during periods of high inflation, as they are not able to leverage economies of scale to mitigate cost pressures compared to larger businesses.
Small and medium-sized businesses may be impacted more during periods of high inflation, as they are not able to leverage economies of scale to mitigate cost pressures compared to larger businesses.
Risks Relating to Liquidity Liquidity risk could impair our ability to fund operations and jeopardize our financial condition. Liquidity is essential to our business. An inability to raise funds through deposits, borrowings, the sale of loans and other sources could have a substantial negative effect on our liquidity.
An inability to raise funds through deposits, borrowings, the sale of loans and other sources could have a substantial negative effect on our liquidity.
See “Government Supervision and Regulation.” The Federal Reserve and the Missouri Division of Finance regulate the activities in which the Bank may engage primarily for the protection of depositors and not for the protection or benefit of stockholders. In addition, new laws and regulations may increase our costs of regulatory compliance and of doing business and otherwise affect our operations.
See “Government Supervision and Regulation.” The Federal Reserve as our primary federal bank regulator and the Missouri Division of Finance regulate the activities in which the Bank may engage primarily for the protection of depositors and not for the protection or benefit of stockholders.
Furthermore, there can be no assurance that the declines in market value will not result in other-than-temporary impairments of these assets and lead to accounting charges that could have a material adverse effect on our net income and capital levels. For the year ended June 30, 2024, we did not incur any credit impairments on our securities portfolio.
Furthermore, there can be no assurance that the declines in market value will not result in losses realized on these assets and lead to provision for credit loss charges that could have a material adverse effect on our net income and capital levels.
New laws and regulations may significantly affect the markets in which we do business, the markets for and value of our loans and investments, the fees we can charge and our ongoing operations, costs and profitability. Regulatory changes regarding card interchange fee income do not currently apply to us but could change in the future.
In addition, new laws and regulations may increase our costs of regulatory compliance and of doing business and otherwise affect our operations. New laws and regulations may significantly affect the markets in which we do business, the markets for and value of our loans and investments, the fees we can charge and our ongoing operations, costs and profitability.
We have pursued a strategy of supplementing internal growth by acquiring other financial companies or their assets and liabilities that we believe will help fulfill our strategic objectives and enhance our earnings.
If we are unable to achieve these objectives, the anticipated benefits of the acquisitions may not be realized fully, if at all, or may take longer to realize than expected. 44 Table of Contents We have pursued a strategy of supplementing internal growth by acquiring other financial companies or their assets and liabilities that we believe will help fulfill our strategic objectives and enhance our earnings.
Additionally, we may experience significant construction credit losses because independent appraisers or project engineers inaccurately estimate the cost or value of construction loan projects. 41 Table of Contents Deterioration in our construction portfolio could result in increases in the provision for credit losses and an increase in charge-offs, all of which could have a material adverse effect on our financial condition and results of operations.
Deterioration in our construction portfolio could result in increases in the provision for credit losses and an increase in charge-offs, all of which could have a material adverse effect on our financial condition and results of operations. Our loan portfolio possesses increased risk due to our percentage of commercial real estate and commercial business loans.
Should we continue to grow this category of our loan portfolio, we may incur additional expense to meet increasing supervisory expectations related to this lending activity.
The Bank and Company may see its non-owner occupied commercial real estate lending grow as a percentage of total regulatory capital, or it may slow the growth of this type of lending activity. Should we continue to grow this category of our loan portfolio, we may incur additional expense to meet increasing supervisory expectations related to this lending activity.
Over the last ten years, we have increased this type of lending, in order to improve the yield on our assets. At June 30, 2024, our loan portfolio included $1.6 billion of commercial real estate loans and $668.3 million of commercial business loans.
At June 30, 2025, our loan portfolio included $1.8 billion of commercial real estate loans and $510.3 million of commercial business loans.
Our construction loan portfolio including unfunded commitments, which totaled $438.1 million, or 11.5% of loans, net, at June 30, 2024, includes residential and non-residential construction and development loans.
See also “Regulation – Regulatory Capital Requirements.” 41 Table of Contents Our construction lending exposes us to significant risk. Our construction loan portfolio, which totaled $332.4 million, or 8.2% of loans, net, at June 30, 2025, includes residential and non-residential construction and development loans.
In general, expectations are that the CECL methodology will lead to increased volatility in banking organizations’ required level of allowances at different points in the economic cycle, and in their results of operations. If our nonperforming assets increase, our earnings will be adversely affected. At June 30, 2024, our nonperforming assets were $10.6 million, or 0.23% of total assets.
Any increases in the ACL will result in a decrease in net income and possibly capital and may have a material adverse effect on our financial condition and results of operations. If our nonperforming assets increase, our earnings will be adversely affected. At June 30, 2025, our nonperforming assets were $23.7 million, or 0.47% of total assets.
Removed
We have adopted CECL and prepared our consolidated financial statements based on the required methodology; however we cannot predict how it will affect our results of operations and financial condition over time, including our regulatory capital.
Added
Inflation rose sharply beginning in late 2021 to levels not seen in more than 40 years before moderating in 2023 and 2024. While inflationary pressures have eased, inflation remains above pre-2021 levels and continues to create uncertainty for our customers and for our operating costs.
Removed
Our loan portfolio possesses increased risk due to our percentage of commercial real estate and commercial business loans.
Added
Our determination of the appropriate level of the ACL under CECL inherently involves a high degree of subjectivity and requires us to make significant estimates of current credit risks and future trends, all of which may undergo material changes over time If our estimates are incorrect, the ACL may not be sufficient to cover the expected losses in our loan portfolio, resulting in the need for increases in our ACL.
Removed
Our agricultural real estate lending has grown significantly since June 30, 2014 when these loans totaled $63.8 million, or 8.0% of our loan portfolio, and we intend to continue to grow this portion of our loan portfolio. Included in the commercial business loans described above are agricultural production and equipment loans.
Added
Management also recognizes that significant new growth in loan portfolios, new loan products and the refinancing of existing loans can result in portfolios comprised of unseasoned loans that may not perform in a historical or projected manner and will increase the risk that our ACL may be insufficient to absorb losses without significant additional provisions.
Removed
At June 30, 2024, these loans totaled $176.0 million, or 4.6%, of our loan portfolio, net.
Added
In addition, bank regulatory agencies periodically review our ACL and may require an increase in the provision for credit losses or the recognition of further loan charge-offs based on judgments different than those of management, if charge-offs in future periods exceed the ACL, we may need additional provisions to increase the ACL.
Removed
Our agricultural operating loans have also grown significantly since June 30, 2014, when such loans totaled $53.4 million, or 6.7% of our loan portfolio, and we intend to continue to grow this portion of our loan portfolio.
Added
Additionally, we may experience significant construction credit losses because independent appraisers or project engineers inaccurately estimate the cost or value of construction loan projects.
Removed
If we are unable to achieve these objectives, the anticipated benefits of the acquisitions may not be realized fully, if at all, or may take longer to realize than expected.
Added
For the year ended June 30, 2025, we did not incur any credit impairments on our securities portfolio. Risks Relating to Liquidity Liquidity risk could impair our ability to fund operations and jeopardize our financial condition. Liquidity is essential to our business.
Removed
Care facilities primarily consist of skilled nursing and assisted living centers, while strip centers are defined as non-mall shopping centers with multiple tenants. The Bank and Company may see its non-owner occupied commercial real estate lending grow as a percentage of total regulatory capital, or it may slow the growth of this type of lending activity.
Added
Regulatory changes regarding card interchange fee income do not currently apply to us but could change in the future.
Added
The hospitality and retail stand-alone segments include primarily franchised businesses; care facilities consisting mainly of skilled nursing and assisted living centers; and strip centers, which can be defined as non-mall shopping centers with a variety of tenants.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Maintaining resilience in our cybersecurity posture is not just a priority but a fundamental necessity to safeguard our operations, performance, and maintaining customer confidence in our financial services. ​ The Board of Directors oversees management’s processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk appetite with our strategic objectives.
Maintaining resilience in our cybersecurity posture is not just a priority but a fundamental necessity to safeguard our operations, performance, and to maintain customer confidence in our financial services. ​ The Board of Directors oversees management’s processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk appetite with our strategic objectives.
These reviews are reported to the IT Committee and Board of Dirctors for approval.. ​ Identified Cybersecurity Risks Federal regulators have issued multiple statements and guidance regarding cybersecurity and that financial institutions need to design multiple layers of security controls to establish lines of defense and to ensure that their risk management processes also address the risk posed by compromised client credentials, including security measures to reliably authenticate clients accessing internet-based services of the financial institution.
These reviews are reported to the IT Committee and Board of Directors for approval.. ​ Identified Cybersecurity Risks Federal regulators have issued multiple statements and guidance regarding cybersecurity and that financial institutions need to design multiple layers of security controls to establish lines of defense and to ensure that their risk management processes also address the risk posed by compromised client credentials, including security measures to reliably authenticate clients accessing internet-based services of the financial institution.
The Chief Operating Officer, Chief Risk Officer, and board-level risk committees of the Bank provide comprehensive reports to the full Board of Directors regarding pertinent cybersecurity risk management topics. ​ Our Information Security Officer has more than 40 years’ experience in financial services, substantial relevant expertise and formal training in the areas of information security, information technology, and cybersecurity risk management and is accountable for managing our enterprise information security department and developing and implementing our cybersecurity and information security programs.
The Chief Operations Officer, Chief Risk Officer, and board-level risk committees of the Bank provide comprehensive reports to the full Board of Directors regarding pertinent cybersecurity risk management topics. ​ Our Information Security Officer has more than 40 years’ experience in financial services, substantial relevant expertise and formal training in the areas of information security, information technology, and cybersecurity risk management and is accountable for managing our enterprise information security department and developing and implementing our cybersecurity and information security programs.
Item 1C. Cybersecurity ​ Cybersecurity and Risk Management ​ As a financial institution, we are confronted with a spectrum of cyber threats, ranging from common attacks like ransomware to sophisticated, organized assaults by nation-state actors. These risks extend to our customers, shareholders, suppliers, and partners.
Item 1C. Cybersecurity ​ Cybersecurity, Risk Management, Strategy and Governance ​ There continues to be a rise in electronic fraudulent activity security breaches and cyber-attacks within the financial services industry. We are confronted with a spectrum of cyber threats, ranging from common attacks such as ransomware to sophisticated, organized assaults by nation-state actors.
Added
These risks extend to our customers, shareholders, suppliers, and partners.

Item 2. Properties

Properties — owned and leased real estate

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Item 2. ​ ​ Description of Properties At June 30, 2024, the Bank operated from its headquarters, 62 full-service branch offices, three limited-service branch offices, and two LPOs. The Bank owns the office building and related land in which its headquarters are located, and 59 of its branch offices. The remaining seven branch offices are either leased or partially owned.
Item 2. ​ ​ Description of Properties At June 30, 2025, the Bank operated from its headquarters, 62 full-service branch offices, two limited-service branch offices, and two LPOs. The Bank owns the office building and related land in which its headquarters are located, and 59 of its branch offices.
However, we will continue to monitor customer growth and expand our branching network, if necessary, to serve our customers’ needs. ​ 54 Table of Contents
Management believes that our current facilities are adequate to meet our present and immediately foreseeable needs. However, we will continue to monitor customer growth and expand our branching network, if necessary, to serve our customers’ needs. 54 Table of Contents ​ ​
For additional information regarding our properties, see "Part II, Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 5 – Premises and Equipment". Management believes that our current facilities are adequate to meet our present and immediately foreseeable needs.
The remaining five branch offices and two loan production offices are either leased or partially owned. For additional information regarding our properties, see "Part II, Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 5 – Premises and Equipment".

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Management’s Discussion and Analysis of Financial Condition and Results of Operations 60 Item 7A Quantitative and Qualitative Disclosures About Market Risk 74 Item 8. Financial Statements and Supplementary Information 76
Management’s Discussion and Analysis of Financial Condition and Results of Operations 60 Item 7A Quantitative and Qualitative Disclosures About Market Risk 75 Item 8. Financial Statements and Supplementary Information 77

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Item 5. ​ ​ Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The common stock of Southern Missouri Bancorp, Inc., is traded under the symbol “SMBC” on the Nasdaq Global Market. At September 8, 2024, there were 11,277,737 shares of common stock outstanding and approximately 468 common stockholders of record.
Item 5. ​ ​ Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The common stock of Southern Missouri Bancorp, Inc., is traded under the symbol “SMBC” on the Nasdaq Global Market. At September 8, 2025, there were 11,290,667 shares of common stock outstanding and approximately 468 common stockholders of record.
The following table summarizes the Company’s stock repurchase activity for each month during the three months ended June 30, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total # of Shares ​ ​ ​ ​ ​ Average ​ Purchased as Part of a ​ Maximum Number ​ ​ Total # ​ Price ​ Publicly ​ of Shares That ​ ​ of Shares ​ Paid Per ​ Announced ​ May Yet Be ​ ​ Purchased ​ Share ​ Program ​ Purchased (1) 04/01/24 - 04/30/24 period — ​ $ — — 301,937 05/01/24 - 05/31/24 period 51,282 ​ 41.62 51,282 250,655 06/01/24 - 06/30/24 period 37,075 ​ 41.42 37,075 213,580 (1) Represents the remaining shares available for purchase as of the last calendar day of the month shown. ​ 58 Table of Contents The following graph shows a comparison of stockholder return on the common stock of Southern Missouri Bancorp, Inc., to the cumulative total returns for the indices shown below.
The following table summarizes the Company’s stock repurchase activity for each month during the three months ended June 30, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total # of Shares ​ ​ ​ ​ ​ Average ​ Purchased as Part of a ​ Maximum Number ​ ​ Total # ​ Price ​ Publicly ​ of Shares That ​ ​ of Shares ​ Paid Per ​ Announced ​ May Yet Be ​ ​ Purchased ​ Share ​ Program ​ Purchased (1) 04/01/25 - 04/30/25 period — ​ $ — — 213,580 05/01/25 - 05/31/25 period — ​ — — 213,580 06/01/25 - 06/30/25 period — ​ — — 213,580 (1) Represents the remaining shares available for purchase as of the last calendar day of the month shown. ​ 58 Table of Contents Stockholder Return Performance Graph Information The following graph shows a comparison of stockholder return on the common stock of Southern Missouri Bancorp, Inc., to the cumulative total returns for the indices shown below.
On May 20, 2021, the Company announced its intention to repurchase up to 445,000 shares of its common stock, or approximately 5.0% of its 8.9 million outstanding common shares. The shares will be purchased at prevailing market prices in the open market or in privately negotiated transactions, subject to availability and general market conditions.
The most recent time this was done, May 20, 2021, the Company announced its intention to repurchase up to 445,000 shares of its common stock, or approximately 5.0% of its outstanding common shares at the time. The shares are purchased at prevailing market prices in the open market or in privately negotiated transactions, subject to availability and general market conditions.
Repurchased shares will be held as treasury shares to be used for general corporate purposes. From time to time, the Company may utilize a pre-arranged trading plan pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934 to repurchase its shares under its repurchase programs.
From time to time, the Company may utilize a pre-arranged trading plan pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934 to repurchase its shares under its repurchase programs.
Description of Business – Regulation”), the Company’s financial condition, results of operations and the Bank’s ability to pay dividends to the Company. The Company relies significantly upon such dividends originating from the Bank to accumulate earnings for payment of cash dividends to stockholders. See “Item 1A.
The Company relies significantly upon such dividends originating from the Bank to accumulate earnings for payment of cash dividends to stockholders. See “Item 1A.
Our cash dividend payout policy is continually reviewed by management and the Board of Directors. The Company intends to continue its policy of paying quarterly dividends; however, future dividend payments will depend upon a number of factors, including capital requirements, regulatory limitations (See “Item 1.
The Company intends to continue its policy of paying quarterly dividends; however, future dividend payments will depend upon a number of factors, including capital requirements, regulatory limitations (See “Item 1. Description of Business – Regulation”), the Company’s financial condition, results of operations and the Bank’s ability to pay dividends to the Company.
The graph is historical only and may not be indicative of possible future performance. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Ending Index 6/30/19 6/30/20 6/30/21 6/30/22 6/30/23 6/30/24 Southern Missouri Bancorp, Inc. 100.00 71.15 134.32 137.41 118.97 142.03 KBW NASDAQ Bank Index 100.00 78.78 136.38 112.89 92.87 125.70 S&P U.S.
The graph is historical only and may not be indicative of possible future performance. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Ending Index 6/30/20 6/30/21 6/30/22 6/30/23 6/30/24 6/30/25 Southern Missouri Bancorp, Inc. 100.00 188.77 193.11 167.19 199.61 246.84 KBW NASDAQ Bank Index 100.00 173.10 143.29 117.88 159.55 219.86 S&P U.S.
Removed
SmallCap Banks Index 100.00 74.72 125.60 116.20 94.55 116.29 S&P U.S. BMI Banks - Midwest Region Index 100.00 73.86 120.10 106.03 85.74 112.60 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Added
Certain shares are held in “nominee” or “street” name and accordingly the number of beneficial owners of such shares is not known or included in the foregoing number. Our cash dividend payout policy is continually reviewed by management and the Board of Directors.
Added
Repurchased shares are held as treasury shares to be used for general corporate purposes. As of June 30, 2025, 231,000 of these shares had been purchased at an average purchase price of $43.11 per share of which none were repurchased during fiscal 2025.
Added
SmallCap Banks Index 100.00 168.09 155.51 126.53 155.64 192.40 S&P U.S. BMI Banks - Midwest Region Index 100.00 162.61 143.56 116.10 152.45 186.37 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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The Company's allowance for credit losses (ACL) is its estimate of credit losses expected in the loan portfolio, on unfunded lending commitments, and held-to maturity securities over the expected life of those assets or in securities available-for-sale when credit loss is identified, which is limited to the difference in fair value and cost.
The Company's ACL is its estimate of credit losses expected in the loan portfolio, on unfunded lending commitments, and held-to maturity securities over the expected life of those assets or in securities available-for-sale when credit loss is identified, which is limited to the difference in fair value and cost.
(2) Does not include dividends earned on equity securities. 73 Table of Contents Item 7A ​ ​ Quantitative and Qualitative Disclosures About Market Risk The goal of the Company’s asset/liability management strategy is to manage the interest rate sensitivity of both interest-earning assets and interest-bearing liabilities in order to maximize net interest income without exposing the Company to an excessive level of interest rate risk.
(2) Does not include dividends earned on equity securities. 74 Table of Contents Item 7A ​ ​ Quantitative and Qualitative Disclosures About Market Risk The goal of the Company’s asset/liability management strategy is to manage the interest rate sensitivity of both interest-earning assets and interest-bearing liabilities in order to maximize net interest income without exposing the Company to an excessive level of interest rate risk.
Consumer loans, including single family residential real estate, are individually smaller and generally behave in a similar manner, and loss estimates for these credits are considered more predictable. Additionally, the Company estimates the allowance for credit losses as a calculation of expected lifetime credit losses utilizing a forward-looking forecast of macroeconomic conditions, which may differ significantly from actual results.
Consumer loans, including single family residential real estate, are individually smaller and generally behave in a similar manner, and loss estimates for these credits are considered more predictable. Additionally, the Company estimates the ACL as a calculation of expected lifetime credit losses utilizing a forward-looking forecast of macroeconomic conditions, which may differ significantly from actual results.
Southern Bank’s noninterest income consists primarily of fees charged on transaction and loan accounts, interchange income from customer debit and ATM card use, gains on sales of loans, trust and wealth management services, insurance brokerage commissions, and increased cash surrender value of bank owned life insurance (“BOLI”).
Southern Bank’s noninterest income consists primarily of fees charged on transaction and loan accounts, interchange income from customer debit and ATM card use, gains on sales of loans, trust and wealth management services, insurance brokerage commissions, and increased cash surrender value of bank owned life insurance (BOLI).
In addition, for the fiscal year ending June 30, 2025, we project that our fixed commitments will include (i) $1.5 million of operating and finance lease and other fixed payments and (ii) $1.7 million of scheduled interest payments on subordinate notes.
In addition, for the fiscal year ending June 30, 2025, we project that our fixed commitments will include (i) $1.5 million of operating and finance lease and other fixed payments and (ii) $1.6 million of scheduled interest payments on subordinate notes.
Another indicator of an institution’s net interest income is its net yield (or net interest margin) on interest-earning assets, which is its net interest income divided by the average balance of interest-earning assets. Net interest income is affected by the interest rate spread and by the 71 Table of Contents relative amounts of interest-earning assets and interest-bearing liabilities.
Another indicator of an institution’s net interest income is its net yield (or net interest margin) on interest-earning assets, which is its net interest income divided by the average balance of interest-earning assets. Net interest income is affected by the interest rate spread and by the 72 Table of Contents relative amounts of interest-earning assets and interest-bearing liabilities.
The January 2023 Citizens merger resulted in goodwill of $23.5 million, as well as a $22.1 million core deposit intangible which is being amortized over a ten year period using the straight-line method, and a $2.6 million intangible related to the acquired trust and wealth management business line which is being amortized over a ten year 64 Table of Contents period using the straight-line method.
The January 2023 Citizens merger resulted in goodwill of $23.5 million, as well as a $22.1 million core deposit intangible which is being amortized over a ten-year period using the straight-line method, and a $2.6 million intangible related to the acquired trust and wealth management business line which is being amortized over a ten-year period using the straight-line method.
See Item 1 – Business – Regulation, and Note 11 of the Notes to the Consolidated Financial Statements contained in Item 8 of this Form 10-K for additional detail on the Company’s capital requirements.
See Item 1 – Business – Regulation, and Note 12 of the Notes to the Consolidated Financial Statements contained in Item 8 of this Form 10-K for additional detail on the Company’s capital requirements.
In total, FHLB borrowings are limited to 45% of Bank assets, or approximately $2.1 billion as most recently reported by the FHLB as of June 30, 2024, which means that an amount up to $2.0 billion may still be eligible to be borrowed from the FHLB, subject to available collateral.
In total, FHLB borrowings are limited to 45% of Bank assets, or approximately $2.2 billion as most recently reported by the FHLB as of June 30, 2025, which means that an amount up to $2.1 billion may still be eligible to be borrowed from the FHLB, subject to available collateral.
We believe that our liquid assets combined with the available lines of credit provide adequate liquidity to meet our current financial obligations for at least the next 12 months. 70 Table of Contents REGULATORY CAPITAL Federally insured financial institutions are required to maintain minimum levels of regulatory capital.
We believe that our liquid assets combined with the available lines of credit provide adequate liquidity to meet our current financial obligations for at least the next 12 months. REGULATORY CAPITAL Federally insured financial institutions are required to maintain minimum levels of regulatory capital.
The June 2017 acquisition of Tammcorp, Inc., and its subsidiary, Capaha Bank (the “Capaha Acquisition”) resulted in goodwill of $4.1 million and a $3.4 million core deposit intangible which is being amortized over a seven-year period using the straight-line method.
The June 2017 acquisition of Tammcorp, Inc., and its subsidiary, Capaha Bank (the “Capaha Acquisition”) resulted in goodwill of $4.1 million and a $3.4 million core deposit intangible which was amortized over a seven-year period using the straight-line method.
In addition, as of June 30, 2024, the Bank had other assets available to pledge to the FHLB and Federal Reserve to access additional liquidity.
In addition, as of June 30, 2025, the Bank had other assets available to pledge to the FHLB and Federal Reserve to access additional liquidity.
The notes will be redeemable at par beginning in May 2026, and mature in May 2031. The carrying value of the notes was approximately $7.6 million at June 30, 2024, as compared to $7.7 million at June 30, 2023. Stockholders’ Equity.
The notes will be redeemable at par beginning in May 2026, and mature in May 2031. The carrying value of the notes was approximately $7.5 million at June 30, 2025, as compared to $7.6 million at June 30, 2024. Stockholders’ Equity.
The debt securities had been issued in 2005 by Peoples, in connection with the sale of trust preferred securities, bear interest at a floating rate based on SOFR, are redeemable at par, and mature in 2035. The carrying value of these debt securities was approximately $5.6 million at June 30, 2024, as compared to $5.5 million at June 30, 2023.
The debt securities had been issued in 2005 by Peoples, in connection with the sale of trust preferred securities, bear interest at a floating rate based on SOFR, are redeemable at par, and mature in 2035. The carrying value of these debt securities was approximately $5.6 million at June 30, 2025 and at June 30, 2024.
At June 30, 2024, CDs with original terms of two years or more totaled $335.0 million, compared to $383.8 million at June 30, 2023. Management continues to focus on customer retention, customer satisfaction, and offering new products to customers in order to increase the Company’s amount of less rate-sensitive deposit accounts.
At June 30, 2025, CDs with original terms of two years or more totaled $322.5 million, compared to $335.0 million at June 30, 2024. Management continues to focus on customer retention, customer satisfaction, and offering new products to customers in order to increase the Company’s amount of less rate-sensitive deposit accounts.
INTEREST RATE SENSITIVITY ANALYSIS The following table sets forth as of June 30, 2024 and 2023, management’s estimates of the projected changes in net portfolio value in the event of 100, 200, and 300 basis point, instantaneous and permanent increases or decreases in market interest rates.
INTEREST RATE SENSITIVITY ANALYSIS The following table sets forth as of June 30, 2025, management’s estimates of the projected changes in net portfolio value in the event of 100, 200, 300, and 400 basis point, instantaneous and permanent parallel increases or decreases in market interest rates.
While scheduled repayments on loans and securities as well as the maturity of short-term investments are a relatively predictable source of funding, deposit flows, FHLB advance redemptions and loan and security prepayment rates are 69 Table of Contents significantly influenced by factors outside of the Bank’s control, including general economic conditions and market competition.
While scheduled repayments on loans and securities as well as the maturity of short-term investments are a relatively predictable source of funding, deposit flows and loan and security prepayment rates are significantly influenced by factors outside of the Bank’s control, including general economic conditions and market competition.
The Company originated $300.3 million in fixed rate commercial, commercial real estate, and multi-family loans during the year ended June 30, 2024, compared to $614.2 million during the prior fiscal year.
The Company originated $375.2 million in fixed rate commercial, commercial real estate, and multi-family loans during the year ended June 30, 2025, compared to $300.3 million during the prior fiscal year.
The amount of capital investment is influenced by, among other things, current and projected demand for our services and products, cash flow generated by operating activities, cash required for other purposes and regulatory considerations. At June 30, 2024, we had other future obligations and accrued expenses of $19.9 million.
The amount of capital investment is influenced by, among other things, current and projected demand for our services and products, cash flow generated by operating activities, cash required for other purposes and regulatory considerations. At June 30, 2025, we had other future obligations and accrued expenses of $27.3 million.
LIQUIDITY AND CAPITAL RESOURCES Southern Missouri’s primary potential sources of funds include deposit growth, FHLB advances, amortization and prepayment of loan principal, investment maturities and sales, and capital generated from ongoing operations.
LIQUIDITY AND CAPITAL RESOURCES The Bank’s primary potential sources of funds include deposit growth, FHLB advances, amortization and prepayment of loan principal, investment maturities and sales, and capital generated from ongoing operations.
The SMB-Marshfield Acquisition resulted in goodwill of $4.4 million and a $1.3 million core deposit intangible which is being amortized over a seven-year period using the straight-line method. The Gideon Acquisition resulted in goodwill of $1.0 million and a $4.1 million core deposit intangible which is being amortized over a seven-year period using the straight-line method.
The February 2018 acquisition of SMB-Marshfield resulted in goodwill of $4.4 million and a $1.3 million core deposit intangible which was amortized over a seven-year period using the straight-line method. The November 2019 Gideon acquisition resulted in goodwill of $1.0 million and a $4.1 million core deposit intangible which is being amortized over a seven-year period using the straight-line method.
The Company originated $109.0 million in adjustable rate residential loans during the fiscal year ended June 30, 2024, compared to $38.4 million during the prior fiscal year.
The Company originated $58.4 million in adjustable rate residential loans during the fiscal year ended June 30, 2025, compared to $109.0 million during the prior fiscal year.
At June 30, 2024, the Company’s weighted average life of its investment portfolio was 5.1 years, compared to 5.3 years at June 30, 2023. Effective duration of the portfolio indicates a relatively stable price sensitivity of approximately 2.6% per 100 basis points movement in market rates at June 30, 2024, as compared to the year ago period of 2.7%.
At June 30, 2025, the Company’s weighted average life of its investment portfolio was 5.0 years, compared to 5.1 years at June 30, 2024. Effective duration of the portfolio indicates a relatively stable price sensitivity of approximately 2.6% per 100 basis points movement in market rates at June 30, 2025, unchanged from the year ago period.
Computations of prospective effects of hypothetical interest rate changes are based on an internally generated model using actual maturity and repricing schedules for the Bank’s loans and deposits, and are based on numerous assumptions, including relative levels of market interest rates, loan repayments and deposit run-offs, and should not be relied upon as indicative of actual results.
Computations of prospective effects of hypothetical interest rate changes are based on an internally generated model using actual maturity and repricing schedules for the Bank’s loans and deposits, and are based on numerous assumptions, including relative levels of market interest rates, loan repayments and deposit run-offs.
Other elements of the Company’s current asset/liability strategy include: (i) increasing originations of commercial real estate, commercial business loans, agricultural real estate, and agricultural operating lines, which typically provide higher yields and shorter repricing periods, but inherently increase credit risk, (ii) limiting the price volatility of the investment portfolio by maintaining a relatively short weighted average maturity, (iii) actively soliciting less rate-sensitive nonmaturity deposits, and (iv) offering competitively priced money market accounts and CDs with maturities of up to five years.
Other elements of the Company’s current asset/liability strategy include: (i) increasing originations of commercial real estate, commercial business loans, agricultural real estate, and agricultural operating lines, which typically provide higher yields and shorter repricing periods, but inherently increase credit risk, (ii) utilizing hedges, such as pay fixed/receive floating swaps on longer maturity 1-4 family residential real estate loans (iii) limiting the price volatility of the investment portfolio by maintaining a relatively short weighted average maturity, (iv) actively soliciting less rate-sensitive nonmaturity deposits, and (v) offering competitively priced money market accounts and CDs with maturities of up to five years.
“Financial Statements and Supplementary Data.” Results for past periods are not necessarily indicative of results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands) ​ At June 30, Financial Condition Data: 2024 2023 2022 2021 2020 Total assets ​ $ 4,604,316 ​ $ 4,360,211 ​ $ 3,214,782 ​ $ 2,700,530 ​ $ 2,542,157 Loans receivable, net ​ 3,797,287 ​ 3,571,078 ​ 2,686,198 ​ 2,200,244 ​ 2,141,929 Mortgage-backed securities ​ 304,861 ​ 270,252 ​ 170,585 ​ 138,341 ​ 126,912 Cash, interest-bearing deposits and investment securities ​ 184,437 ​ 202,523 ​ 156,369 ​ 193,250 ​ 104,831 Deposits ​ 3,952,457 ​ 3,725,540 ​ 2,815,075 ​ 2,330,803 ​ 2,184,847 Borrowings ​ 102,050 ​ 133,514 ​ 37,957 ​ 57,529 ​ 70,024 Subordinated debt ​ 23,156 ​ 23,105 ​ 23,055 ​ 15,243 ​ 15,142 Stockholder's equity ​ 488,748 ​ 446,058 ​ 320,772 ​ 283,423 ​ 258,347 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands, except per share data) ​ For the Year Ended June 30, Operating Data: 2024 2023 2022 2021 2020 Interest income ​ $ 248,375 ​ $ 176,416 ​ $ 116,867 ​ $ 109,475 ​ $ 107,052 Interest expense ​ 108,892 ​ 49,671 ​ 13,300 ​ 16,789 ​ 26,916 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income ​ 139,483 ​ 126,745 ​ 103,567 ​ 92,686 ​ 80,136 Provision (benefit) for credit losses ​ 3,600 ​ 17,061 ​ 1,487 ​ (1,024) ​ 6,002 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income after provision (benefit) for credit losses ​ 135,883 ​ 109,684 ​ 102,080 ​ 93,710 ​ 74,134 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest income ​ 24,844 ​ 26,204 ​ 21,203 ​ 20,042 ​ 14,750 Noninterest expense ​ 97,617 ​ 86,425 ​ 63,379 ​ 54,047 ​ 54,452 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ 63,110 ​ 49,463 ​ 59,904 ​ 59,705 ​ 34,432 Income taxes ​ 12,928 ​ 10,226 ​ 12,735 ​ 12,525 ​ 6,887 Net Income ​ $ 50,182 ​ $ 39,237 ​ $ 47,169 ​ $ 47,180 ​ $ 27,545 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per share available to common stockholders ​ $ 4.42 ​ $ 3.86 ​ $ 5.22 ​ $ 5.22 ​ $ 3.00 Diluted earnings per share available to common stockholders ​ $ 4.42 ​ $ 3.85 ​ $ 5.21 ​ $ 5.22 ​ $ 2.99 Dividends per share ​ $ 0.84 ​ $ 0.84 ​ $ 0.80 ​ $ 0.62 ​ $ 0.60 ​ 60 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At June 30, Other Data: 2024 2023 2022 2021 2020 Number of: Real Estate Loans 10,073 9,707 9,190 8,506 8,127 Deposit Accounts 151,374 144,219 107,038 100,407 96,813 Full service offices 63 63 49 47 46 Limited service offices 3 3 2 2 2 Loan production offices ​ 2 ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or for the year ended June 30, Key Operating Ratios: 2024 2023 2022 2021 2020 Return on assets (net income divided by average assets) ​ 1.10 % 1.03 % 1.59 % 1.79 % 1.18 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on average common equity (net income available to common stockholders divided by average common equity) ​ 10.74 10.39 15.44 17.69 11.11 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average equity to average assets ​ 10.25 9.91 10.30 10.14 10.60 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate spread (spread between weighted average rate on all interest-earning assets and all interest-bearing liabilities) ​ 2.71 3.21 3.61 3.61 3.50 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest margin (net interest income as a percentage of average interest-earning assets ​ 3.27 3.54 3.72 3.77 3.72 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest expense to average assets ​ 2.14 2.27 2.14 2.05 2.33 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average interest-earning assets to average interest-bearing liabilities ​ 121.96 123.57 124.20 122.59 117.63 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses to gross loans (1) ​ 1.36 1.32 1.22 1.49 1.16 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses to nonperforming loans (1) ​ 786.17 624.93 806.02 566.16 290.38 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net charge-offs (recoveries) to average outstanding loans during the period ​ 0.05 0.02 0.00 0.03 0.04 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ratio of nonperforming assets to total assets (1) ​ 0.23 0.26 0.20 0.30 0.44 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dividend payout ratio ​ 18.98 22.00 15.25 11.87 20.02 ​ (1) Total loans before allowance for credit losses and deferred loan fees at end of period. 61 Table of Contents OVERVIEW Southern Missouri Bancorp, Inc., is a Missouri corporation originally organized for the principal purpose of becoming the holding company of Southern Bank.
“Financial Statements and Supplementary Data.” Results for past periods are not necessarily indicative of results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands) ​ At June 30, Financial Condition Data: 2025 2024 2023 2022 2021 Total assets ​ $ 5,019,607 ​ $ 4,604,316 ​ $ 4,360,211 ​ $ 3,214,782 ​ $ 2,700,530 Loans receivable, net ​ 4,048,961 ​ 3,797,287 ​ 3,571,078 ​ 2,686,198 ​ 2,200,244 Mortgage-backed securities ​ 359,494 ​ 304,861 ​ 270,252 ​ 170,585 ​ 138,341 Cash, interest-bearing deposits and investment securities ​ 294,455 ​ 184,437 ​ 202,523 ​ 156,369 ​ 193,250 Deposits ​ 4,281,368 ​ 3,943,059 ​ 3,725,540 ​ 2,815,075 ​ 2,330,803 Securities sold under agreement to repurchase ​ ​ 15,000 ​ ​ 9,398 ​ ​ — ​ ​ — ​ ​ — Borrowings ​ 104,052 ​ 102,050 ​ 133,514 ​ 37,957 ​ 57,529 Subordinated debt ​ 23,208 ​ 23,156 ​ 23,105 ​ 23,055 ​ 15,243 Stockholder's equity ​ 544,692 ​ 488,748 ​ 446,058 ​ 320,772 ​ 283,423 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands, except per share data) ​ For the Year Ended June 30, Operating Data: 2025 2024 2023 2022 2021 Interest income ​ $ 277,365 ​ $ 248,375 ​ $ 176,416 ​ $ 116,867 ​ $ 109,475 Interest expense ​ 122,749 ​ 108,892 ​ 49,671 ​ 13,300 ​ 16,789 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income ​ 154,616 ​ 139,483 ​ 126,745 ​ 103,567 ​ 92,686 Provision (benefit) for credit losses ​ 6,523 ​ 3,600 ​ 17,061 ​ 1,487 ​ (1,024) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income after provision (benefit) for credit losses ​ 148,093 ​ 135,883 ​ 109,684 ​ 102,080 ​ 93,710 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest income ​ 27,984 ​ 24,844 ​ 26,204 ​ 21,203 ​ 20,042 Noninterest expense ​ 102,083 ​ 97,617 ​ 86,425 ​ 63,379 ​ 54,047 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ 73,994 ​ 63,110 ​ 49,463 ​ 59,904 ​ 59,705 Income taxes ​ 15,416 ​ 12,928 ​ 10,226 ​ 12,735 ​ 12,525 Net Income ​ $ 58,578 ​ $ 50,182 ​ $ 39,237 ​ $ 47,169 ​ $ 47,180 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per share available to common stockholders ​ $ 5.19 ​ $ 4.42 ​ $ 3.86 ​ $ 5.22 ​ $ 5.22 Diluted earnings per share available to common stockholders ​ $ 5.18 ​ $ 4.42 ​ $ 3.85 ​ $ 5.21 ​ $ 5.22 Dividends per share ​ $ 0.92 ​ $ 0.84 ​ $ 0.84 ​ $ 0.80 ​ $ 0.62 ​ 60 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At June 30, Other Data: 2025 2024 2023 2022 2021 Number of: Real Estate Loans 10,272 10,073 9,707 9,190 8,506 Deposit Accounts 156,155 151,374 144,219 107,038 100,407 Full service offices 63 63 63 49 47 Limited service offices 2 3 3 2 2 Loan production offices ​ 2 ​ 2 ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At or for the year ended June 30, Key Operating Ratios: 2025 2024 2023 2022 2021 Return on assets (net income divided by average assets) ​ 1.21 % 1.10 % 1.03 % 1.59 % 1.79 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on average common equity (net income available to common stockholders divided by average common equity) ​ 11.37 10.74 10.39 15.44 17.69 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average equity to average assets ​ 10.63 10.25 9.91 10.30 10.14 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate spread (spread between weighted average rate on all interest-earning assets and all interest-bearing liabilities) ​ 2.84 2.71 3.21 3.61 3.61 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest margin (net interest income as a percentage of average interest-earning assets ​ 3.40 3.27 3.54 3.72 3.77 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest expense to average assets ​ 2.11 2.14 2.27 2.14 2.05 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average interest-earning assets to average interest-bearing liabilities ​ 120.71 121.96 123.57 124.20 122.59 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses to gross loans (1) ​ 1.26 1.36 1.32 1.22 1.49 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses to nonperforming loans (1) ​ 224.08 786.17 624.93 806.02 566.16 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net charge-offs (recoveries) to average outstanding loans during the period ​ 0.17 0.05 0.02 0.00 0.03 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ratio of nonperforming assets to total assets (1) ​ 0.47 0.23 0.26 0.20 0.30 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dividend payout ratio ​ 17.72 18.98 22.00 15.25 11.87 ​ (1) Total loans before ACL and deferred loan fees at end of period. 61 Table of Contents OVERVIEW Southern Missouri Bancorp, Inc., is a Missouri corporation originally organized for the principal purpose of becoming the holding company of Southern Bank.
During the fiscal year ended June 30, 2024, fixed rate residential loan originations totaled $119.4 million (of which $21.9 million was originated for sale into the secondary market), compared to $147.2 million during the prior fiscal year (of which $21.5 million was originated for sale into the secondary market).
During the fiscal year ended June 30, 2025, fixed rate residential loan originations totaled $141.4 million (of which $21.6 million was originated for sale into the secondary market), compared to $119.4 million during the prior fiscal year (of which $21.9 million was originated for sale into the secondary market).
The primary impact of inflation on the operations of the Company is reflected in increased operating costs. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, changes in interest rates generally have a more significant impact on a financial institution’s performance than does inflation.
Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, changes in interest rates generally have a more significant impact on a financial institution’s performance than does inflation.
The carrying value of these debt securities was approximately $2.8 million at June 30, 2024, as compared to $2.7 million at June 30, 2023. In connection with the Peoples Acquisition, the Company assumed $6.5 million in floating rate junior subordinated debt securities.
The carrying value of these debt securities was approximately $2.8 million at June 30, 2025 and at June 30, 2024. In connection with the Peoples Acquisition, the Company assumed $6.5 million in floating rate junior subordinated debt securities.
IMPACT OF INFLATION The consolidated financial statements and related data presented herein have been prepared in accordance with U.S. generally accepted accounting principles, which require the measurement of financial position and operating results in historical dollars without considering changes in the relative purchasing power of money over time due to inflation.
IMPACT OF INFLATION The consolidated financial statements and related data presented herein have been prepared in accordance with U.S. generally accepted accounting principles, which require the measurement of financial position and operating results in historical dollars without considering changes in the relative purchasing power of money over time due to inflation. 71 Table of Contents The primary impact of inflation on the operations of the Company is reflected in increased operating costs.
Management anticipates that current funding sources will be adequate to meet foreseeable liquidity needs. For the fiscal year ended June 30, 2024, Southern Missouri increased deposits by $226.9 million, and decreased FHLB advances by $31.5 million. During the prior fiscal year, Southern Missouri increased deposits by $910.5 million, and increased FHLB advances by $95.6 million.
Management anticipates that current funding sources will be adequate to meet foreseeable liquidity needs. For the fiscal year ended June 30, 2025, Southern Missouri increased deposits by $338.3 million and FHLB advances by $2.0 million. During the prior fiscal year, the Bank increased deposits by $226.9 million, and decreased FHLB advances by $31.5 million.
The Company also originated $109.9 million in adjustable rate commercial, commercial real estate, and multi-family loans during the fiscal year ended June 30, 2024, compared to $157.0 million during the prior fiscal year. At June 30, 2024, adjustable-rate home equity lines of credit totaled $72.8 million, compared to $64.6 million as of June 30, 2023.
The Company also originated $119.5 million in adjustable rate commercial, commercial real estate, and multi-family loans during the fiscal year ended June 30, 2025, compared to $109.9 million during the prior fiscal year. At June 30, 2025, adjustable-rate home equity lines of credit totaled $86.7 million, compared to $72.8 million as of June 30, 2024.
At June 30, 2024, fixed rate loans with remaining maturities in excess of 10 years totaled $369.8 million, or 9.7%, of loans receivable, compared to $365.1 million, or 10.2%, of loans receivable, at June 30, 2023.
At June 30, 2025, fixed rate loans with remaining maturities in excess of 10 years totaled $350.4 million, or 8.7%, of loans receivable, compared to $369.8 million, or 9.7%, of loans receivable, at June 30, 2024.
We continued to utilize reciprocal deposit programs, and at June 30, 2024, we had placed deposits of $575.3 million through reciprocal programs, up from $524.1 million a year earlier. At June 30, 2024, $361.0 million of this total reflected deposits we had placed on behalf of our public unit depositors, up from $331.3 million a year ago.
We continued to utilize reciprocal deposit programs, and at June 30, 2025, we had placed deposits of $517.4 million through reciprocal programs, down from $575.3 million a year earlier. At June 30, 2025, $260.0 million of this total reflected deposits we had placed on behalf of our public unit depositors, down from $361.0 million a year ago.
The Company recorded an income tax provision of $12.9 million for fiscal 2024, an increase of $2.7 million, or 26.4%, as compared to the prior fiscal year, which was attributable to higher pre-tax income and was partially offset by a decrease in the effective tax rate to 20.5% for fiscal 2024, as compared to 20.7% for fiscal 2023. 67 Table of Contents COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED JUNE 30, 2023 AND 2022 Net Income.
The Company recorded an income tax provision of $12.9 million for fiscal 2024, an increase of $2.7 million, or 26.4%, as compared to the prior fiscal year, which was attributable to higher pre-tax income and was partially offset by a decrease in the effective tax rate to 20.5% for fiscal 2024, as compared to 20.7% for fiscal 2023.
Goodwill from these acquisitions is not being amortized, but is tested for impairment at least annually. Deposits. Deposits were $4.0 billion at June 30, 2024, an increase of $226.9 million, or 6.1%, as compared to June 30, 2023.
Goodwill from these acquisitions is not being amortized, but is tested for impairment at least annually. Deposits. Deposits were $4.3 billion at June 30, 2025, an increase of $338.3 million, or 8.6%, as compared to June 30, 2024.
At June 30, 2024, the Bank reported $1.4 billion of its single-family residential and commercial real estate loan portfolios as eligible collateral to the FHLB for available credit of approximately $845.1 million, of which $102.1 million was advanced, while $461,000 was encumbered in relation to residential real estate loans sold onto the secondary market through the FHLB.
At June 30, 2025, the Bank reported $1.5 billion of its single-family residential, home equity, and commercial real estate loan portfolios as eligible collateral to the FHLB for available credit of approximately $857.3 million, of which $104.1 million was advanced, while $612,000 was encumbered in relation to residential real estate loans sold onto the secondary market through the FHLB.
The Bank had also pledged $383.6 million of its agricultural real estate and agricultural operating and equipment loans to the Federal Reserve Bank of St. Louis’s discount window for available credit of approximately $323.4 million, as of June 30, 2024, none of which was advanced.
The Bank had also pledged $386.2 million of its agricultural real estate and agricultural operating and equipment loans to the Federal Reserve Bank of St. Louis’s discount window for available credit of approximately $334.8 million, as of June 30, 2025, none of which was advanced.
The Company experienced balance sheet growth in fiscal 2024, with total assets of $4.6 billion at June 30, 2024, reflecting an increase of $244.1 million, or 5.6%, as compared to June 30, 2023. Asset growth was attributable mainly to increases in loans, available-for-sale (“AFS”) securities, and cash equivalents. Cash and equivalents.
The Company experienced balance sheet growth in fiscal 2025, with total assets of $5.0 billion at June 30, 2025, reflecting an increase of $415.3 million, or 9.0%, as compared to June 30, 2024. Asset growth was attributable mainly to increases in loans, cash and cash equivalents, and available-for-sale (AFS) securities. Cash and cash equivalents.
At June 30, 2024, the fixed-rate, single-family residential loan portfolio totaled $622.1 million, with a weighted average maturity of 176 months, compared to $586.4 million, with a weighted average maturity of 188 months at June 30, 2023.
At June 30, 2025, the fixed-rate, single-family residential loan portfolio totaled $632.9 million, with a weighted average maturity of 163 months, compared to $622.1 million, with a weighted average maturity of 176 months at June 30, 2024.
At June 30, 2024, the Bank exceeded regulatory capital requirements with tier 1 capital, total risk-based capital, and common equity tier 1 capital of $447.2 million, $496.1 million and $447.2 million, respectively.
At June 30, 2025, the Bank exceeded regulatory capital requirements with tier 1 capital, total risk-based capital, and common equity tier 1 capital of $494.2 million, $545.3 million and $494.2 million, respectively.
The increase of $230.9 million in loan balances, net of fair value adjustments, was attributable to growth in non-owner occupied commercial real estate loans, residential real estate loans, agricultural revolving lines of credit, and drawn construction loan balances. This was partially offset by payoffs and paydowns in owner-occupied commercial real estate, commercial and industrial, multi-family, and agriculture real estate loans.
The increase of $250.7 million in gross loan balances, net of fair value adjustments, was attributable to growth in residential real estate loans, commercial and industrial loans, drawn construction loan balances, multi-family real estate loans, and agricultural production draws. This was partially offset by payoffs and paydowns in non-owner occupied commercial real estate and consumer loans.
In connection with its October 2013 acquisition of Ozarks Legacy, the Company assumed $3.1 million in floating rate junior subordinated debt securities. The debt securities had been issued in June 2005 by Ozarks Legacy in connection with the sale of trust preferred securities, bear interest at a floating rate based on SOFR, are redeemable at par, and mature in 2035.
The securities bear interest at a floating rate based on SOFR, are now redeemable at par, and mature in 2034. In connection with its October 2013 acquisition of Ozarks Legacy, the Company assumed $3.1 million in floating rate junior subordinated debt securities.
Interest expense on deposits was $102.2 million for fiscal 2024, an increase of $57.8 million, or 130.1%, as compared to the prior fiscal year. The increase was due to a 144-basis point increase in the average rate paid on interest-bearing deposits, combined with the $592.1 million, or 21.5%, increase in the average balance of those deposits.
Interest expense on deposits was $101.7 million for fiscal 2024, an increase of $57.3 million, or 129.1%, as compared to the prior fiscal year. The increase was due to a 143-basis point increase in the average rate paid on interest-bearing deposits, combined with the $582.7 million, or 21.1%, increase in the average balance of those deposits.
(5) Represents net interest income divided by average interest-earning assets. ​ 72 Table of Contents YIELDS EARNED AND RATES PAID The following table sets forth for the periods and at the date indicated, the weighted average yields earned on the Company’s assets, the weighted average interest rates paid on the Company’s liabilities, together with the net yield on interest-earning assets. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At June 30, ​ For The Year Ended June 30, ​ 2024 2024 2023 2022 Weighted-average yield on loan portfolio 6.15 % 5.98 % 5.11 % 4.60 % Weighted-average yield on mortgage-backed securities 4.99 4.80 2.88 1.80 ​ Weighted-average yield on investment securities (1) 4.15 4.16 4.50 2.82 ​ Weighted-average yield on other interest-earning assets 4.87 5.50 4.50 0.34 ​ Weighted-average yield on all interest-earning assets 6.00 5.82 4.93 4.20 ​ Weighted-average rate paid on interest-bearing deposits 3.34 3.05 1.61 0.54 ​ Weighted-average rate paid on FHLB advances 3.82 4.03 3.37 1.83 ​ Weighted-average rate paid on subordinated debt 7.44 7.53 6.19 3.77 ​ Weighted-average rate paid on all interest-bearing liabilities 3.38 3.11 1.72 0.59 ​ Interest rate spread (spread between weighted average rate on all interest-earning assets and all interest- bearing liabilities) 2.62 2.71 3.21 3.61 ​ Net interest margin (net interest income as a percentage of average interest-earning assets) 3.21 3.27 3.54 3.72 ​ (1) Includes Federal Home Loan Bank and Federal Reserve Bank stock.
(5) Represents net interest income divided by average interest-earning assets. ​ 73 Table of Contents YIELDS EARNED AND RATES PAID The following table sets forth for the periods and at the date indicated, the weighted average yields earned on the Company’s assets, the weighted average interest rates paid on the Company’s liabilities, together with the net yield on interest-earning assets. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For The Year Ended June 30, ​ 2025 2024 2023 Weighted-average yield on loan portfolio 6.31 % 5.98 % 5.11 % Weighted-average yield on mortgage-backed securities 4.65 4.80 2.88 ​ Weighted-average yield on investment securities (1) 4.45 4.16 4.50 ​ Weighted-average yield on other interest-earning assets 4.54 5.50 4.50 ​ Weighted-average yield on all interest-earning assets 6.09 5.82 4.93 ​ Weighted-average rate paid on interest-bearing deposits 3.19 3.04 1.61 ​ Weighted-average rate paid on securities sold under agreements to repurchase 5.35 4.80 5.13 ​ Weighted-average rate paid on FHLB advances 4.16 4.03 3.37 ​ Weighted-average rate paid on subordinated debt 7.02 7.53 6.19 ​ Weighted-average rate paid on all interest-bearing liabilities 3.25 3.11 1.72 ​ Interest rate spread (spread between weighted average rate on all interest-earning assets and all interest- bearing liabilities) 2.84 2.71 3.21 ​ Net interest margin (net interest income as a percentage of average interest-earning assets) 3.40 3.27 3.54 ​ (1) Includes Federal Home Loan Bank and Federal Reserve Bank stock.
The deposit portfolio saw increases in certificates of deposit and savings accounts, which were partially offset by decreases in money market deposit accounts, interest-bearing transaction accounts, and noninterest bearing transaction accounts. Public unit balances totaled $594.6 million at June 30, 2024, an increase of $16.1 million compared to June 30, 2023.
The deposit portfolio saw increases in certificates of deposit and savings accounts, which were partially offset by decreases in interest bearing transaction accounts, noninterest-bearing transaction accounts, and money market deposit accounts. Public unit balances totaled $550.8 million at June 30, 2025, a decrease of $43.8 million compared to June 30, 2024.
Brokered deposits, comprised of certificates and money market deposits, totaled $173.8 million at June 30, 2024, an increase of $14.2 million compared to June 30, 2023. Our discussion of brokered deposits excludes those deposits originated through reciprocal arrangements.
Brokered deposits, comprised of certificates and money market deposits, totaled $235.1 million at June 30, 2025, an increase of $61.3 million compared to June 30, 2024. Our discussion of brokered deposits excludes those deposits originated through reciprocal arrangements.
The Bank has relied on FHLB advances as a source for funding cash or liquidity needs. Southern Missouri uses its liquid assets as well as other funding sources to meet ongoing commitments, to fund loan demand, to repay maturing certificates of deposit and FHLB advances, to make investments, to fund other deposit withdrawals, and to meet operating expenses.
The Bank uses its liquid assets as well as other funding sources to meet ongoing commitments, to fund loan demand, to repay maturing certificates of deposit and FHLB advances, to make investments, to fund other deposit withdrawals, and to meet operating expenses.
At June 30, 2024, the Bank had outstanding commitments to extend credit of $898.6 million (including $689.6 million in unused lines of credit). Total commitments to originate fixed-rate loans with terms in excess of one year were $159.3 million at rates ranging from 4.95% to 9.0%, with a weighted-average rate of 7.04%.
At June 30, 2025, the Bank had outstanding commitments to extend credit of $944.0 million (including $596.9 million in unused lines of credit). Total commitments to originate fixed-rate loans with terms in excess of one year were $200.2 million at rates ranging from 4.75% to 8.28%, with a weighted-average rate of 6.96%.
The Company’s stockholders’ equity was $488.7 million at June 30, 2024, an increase of $42.7 million, or 9.6%, as compared to June 30, 2023.
The Company’s stockholders’ equity was $544.7 million at June 30, 2025, an increase of $55.9 million, or 11.4%, as compared to June 30, 2024.
The increase in the average rate paid on deposits was attributable primarily to higher market interest rates and a more competitive deposit environment over the course of fiscal 2024. Interest expense on FHLB advances was $5.0 million for fiscal 2024, an increase of $1.4 million, or 37.7%, when compared to the prior fiscal year.
The increase in the average rate paid on deposits was attributable primarily to higher market interest rates and a more competitive deposit environment over the course of fiscal 2024. Interest expense on securities sold under agreements to repurchase were $451,000 for fiscal 2024, an increase of $238,000, or 111.7%, when compared to the prior fiscal year.
(See Note 1 and Note 3 of the Notes to Consolidated Financial Statements, “Critical Accounting Policies” and “Financial Condition – Allowance for Credit Losses” in this Item 7, and “Asset Quality” in Item 1 of this Form 10-K.) Noninterest Income.
See also, “Provision for Credit Losses, under Comparison of Operating Results for the Years Ended June 30, 2025 and 2024” and Note 1 and Note 3 of the Notes to Consolidated Financial Statements, “Critical Accounting Policies”, “Financial Condition – Allowance for Credit Losses” in this Item 7, and “Asset Quality” in Item 1 of this Form 10-K.
The Company’s tier 1 capital represented 10.19% of total adjusted assets and 11.79% of total risk-weighted assets, while total risk-based capital was 13.23% of total risk-weighted assets, and common equity tier 1 capital was 11.39% of total risk-weighted assets.
The Company’s tier 1 capital represented 10.61% of total adjusted assets and 12.51% of total risk-weighted assets, while total risk-based capital was 13.95% of total risk-weighted assets, and common equity tier 1 capital was 12.14% of total risk-weighted assets.
The Bank’s tier 1 capital represented 9.79% of total adjusted assets and 11.43% of total risk-weighted assets, while total risk-based capital was 12.68% of total risk-weighted assets, and common equity tier 1 capital was 11.43% of total risk-weighted assets.
The Bank’s tier 1 capital represented 10.05% of total adjusted assets and 12.09% of total risk-weighted assets, while total risk-based capital was 13.34% of total risk-weighted assets, and common equity tier 1 capital was 12.09% of total risk-weighted assets.
The average loan-to-deposit ratio for the fourth quarter of fiscal 2024 was 96.1%, as compared to 95.8% for the same period of the prior fiscal year. Borrowings. FHLB advances were $102.1 million at June 30, 2024, a decrease of $31.5 million, or 23.6%, as compared to June 30, 2023.
The average loan-to-deposit ratio for the fourth quarter of fiscal 2025 was 94.5%, as compared to 96.3% for the same period of the prior fiscal year. Borrowings. FHLB advances were $104.1 million at June 30, 2025, an increase of $2.0 million, or 2.0%, as compared to June 30, 2024.
Specific qualitative factors considered include, but may not be limited to: ● Changes in lending policies and/or loan review system ● National, regional, and local economic trends and/or conditions ● Changes and/or trends in the nature, volume, or terms of the loan portfolio ● Experience, ability, and depth of lending management and staff ● Levels and/or trends of delinquent, non-accrual, problem assets, or charge offs and recoveries ● Concentrations of credit ● Changes in collateral values ● Agricultural economic conditions ● Risks from regulatory, legal, or competitive factors ​ Premises and Equipment.
Specific qualitative factors considered include, but may not be limited to: ● Changes in lending policies and/or loan review system ● National, regional, and local economic trends and/or conditions ● Changes and/or trends in the nature, volume, or terms of the loan portfolio ● Experience, ability, and depth of lending management and staff ● Levels and/or trends of delinquent, non-accrual, problem assets, or charge offs and recoveries ● Concentrations of credit ● Changes in collateral values ● Agricultural economic conditions ● Risks from regulatory, legal, or competitive factors ● Quantified supported model adjustments and general imprecision adjustments ​ Specifically, management considered the following primary items in its estimate of the ACL: ● economic conditions and projections as provided by the Federal Open Market Committee (FOMC) were utilized in the Company’s estimate at June 30, 2025.
The increase was attributable primarily to earnings retained after cash dividends paid, in combination with a $4.5 million reduction in accumulated other comprehensive losses (“AOCL”) primarily as a result of the market value of the Company’s investments appreciating during the fiscal year due to the decrease in market interest rates.
The increase was attributable primarily to earnings retained after cash dividends paid, in combination with a $6.1 million reduction in accumulated other comprehensive losses (AOCL) as the market value of the Company’s investments appreciated due to the decrease in market interest rates. The AOCL totaled $11.4 million at June 30, 2025, as compared to $17.5 million at June 30, 2024.
Interest income on loans receivable for fiscal 2023 was $162.2 million, an increase of $50.7 million, or 45.5%, when compared to the prior fiscal year. The increase was due to a $749.9 million, or 30.9%, increase in the average balance of loans receivable, combined with a 51 basis point increase in the average yield earned on loans receivable.
Interest income on loans receivable for fiscal 2025 was $250.8 million, an increase of $28.3 million, or 12.7%, when compared to the prior fiscal year. The increase was due to a $257.3 million, or 6.9%, increase in the average balance of loans receivable, combined with a 33-basis point increase in the average yield earned on loans receivable.
Interest expense on deposits was $44.4 million for fiscal 2023, an increase of $32.6 million, or 275.5%, as compared to the prior fiscal year. The increase was due to a 107-basis point increase in the average rate paid on interest-bearing deposits, combined with the $580.5 million, or 26.6%, increase in the average balance of those deposits.
Interest expense on deposits was $115.8 million for fiscal 2025, an increase of $14.1 million, or 13.8%, as compared to the prior fiscal year. The increase was due to a 15-basis point increase in the average rate paid on interest-bearing deposits, combined with the $282.2 million, or 8.4%, increase in the average balance of those deposits.
At June 30, 2024, the Company exceeded regulatory capital requirements with tier 1 capital, total risk-based capital, and common equity tier 1 capital of $467.0 million, $524.0 million and $451.5 million, respectively.
At June 30, 2025, the Company exceeded regulatory capital requirements with tier 1 capital, total risk-based capital, and common equity tier 1 capital of $517.8 million, $577.2 million and $502.2 million, respectively.
Cash and cash equivalents were $61.4 million at June 30, 2024, an increase of $6.2 million, or 11.2%, as compared to June 30, 2023. The increase was primarily a result of organic deposit growth during the period, partially offset by the funding of loan growth.
Cash and cash equivalents were $192.9 million at June 30, 2025, an increase of $132.0 million, or 216.7%, as compared to June 30, 2024. The increase was primarily a result of organic deposit growth, in addition to growth in brokered certificates of deposits, during the period, partially offset by the funding of loan growth.
The July 2009 acquisition of the Southern Bank of Commerce resulted in goodwill of $126,000. The October 2013 acquisition of Ozarks Legacy Community Financial, Inc., resulted in goodwill of $1.5 million. The August 2014 acquisition of Peoples Service Company, Inc., and its subsidiary, Peoples Bank of the Ozarks (the “Peoples Acquisition”) resulted in goodwill of $3.0 million.
The August 2014 acquisition of Peoples Service Company, Inc., and its subsidiary, Peoples Bank of the Ozarks (the “Peoples Acquisition”) resulted in goodwill of $3.0 million.
The increase in the average rate paid was attributable primarily to higher market interest rates over the course of the fiscal year, which impacted adjustable-rate debt. 66 Table of Contents Provision for Credit Losses .
The increase in the average rate paid was attributable primarily to higher market interest rates over the course of the fiscal year, which impacted adjustable-rate debt. Provision for Credit Losses . The Company recorded a provision for credit losses (PCL) of $3.6 million for fiscal 2024, as compared to a PCL of $17.1 million for the prior fiscal year.
Total deposits were $4.0 billion at June 30, 2024, an increase of $226.9 million, or 6.1% as compared to June 30, 2023. Investments. AFS securities were $427.9 million at June 30, 2024, an increase of $10.3 million, or 2.5%, as compared to June 30, 2023. The increase was primarily attributable to increased holdings of residential MBS and CMOs. Loans.
Total deposits were $4.3 billion at June 30, 2025, an increase of $338.3 million, or 8.6% as compared to June 30, 2024. Investments. AFS securities were $460.8 million at June 30, 2025, an increase of $32.9 million, or 7.7%, as compared to June 30, 2024. The increase was primarily attributable to increased holdings of residential and commercial mortgage-backed securities. Loans.
When interest-earning assets approximate or exceed interest-bearing liabilities, any positive interest rate spread will generate net interest income. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended June 30, ​ ​ 2024 ​ 2023 ​ 2022 (dollars in thousands) Average Interest and Yield/ Average Interest and Yield/ Average Interest and Yield/ ​ ​ Balance ​ Dividends ​ Cost Balance ​ Dividends ​ Cost Balance ​ Dividends ​ Cost Interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mortgage loans (1) ​ $ 3,009,263 ​ $ 168,894 ​ 5.61 % $ 2,585,065 ​ $ 126,315 ​ 4.89 % $ 1,953,460 ​ $ 90,522 ​ 4.63 % Other loans (1) ​ ​ 708,881 ​ ​ 53,618 ​ 7.56 ​ ​ 589,625 ​ ​ 35,909 ​ 6.09 ​ ​ 471,350 ​ ​ 20,973 ​ 4.45 ​ Total net loans ​ 3,718,144 ​ 222,512 5.98 ​ 3,174,690 ​ 162,224 5.11 ​ 2,424,810 ​ 111,495 4.60 ​ Mortgage-backed securities ​ ​ 304,778 ​ ​ 14,631 ​ 4.80 ​ ​ 241,642 ​ ​ 6,967 ​ 2.88 ​ ​ 152,280 ​ ​ 2,738 ​ 1.80 ​ Investment securities (2) ​ ​ 165,307 ​ ​ 6,877 ​ 4.16 ​ ​ 118,386 ​ ​ 5,324 ​ 4.50 ​ ​ 77,996 ​ ​ 2,197 ​ 2.82 ​ Other interest-earning assets ​ ​ 79,116 ​ ​ 4,355 ​ 5.50 ​ ​ 42,287 ​ ​ 1,901 ​ 4.50 ​ ​ 127,958 ​ ​ 437 ​ 0.34 ​ TOTAL INTEREST- EARNING ASSETS (1) ​ 4,267,345 ​ 248,375 5.82 ​ 3,577,005 ​ 176,416 4.93 ​ 2,783,044 ​ 116,867 4.20 ​ Other noninterest-earning assets (3) ​ ​ 290,952 ​ ​ — ​ — ​ ​ 234,047 ​ ​ — ​ — ​ ​ 181,973 ​ ​ — ​ — ​ TOTAL ASSETS ​ $ 4,558,297 ​ ​ 248,375 — ​ $ 3,811,052 ​ ​ 176,416 — ​ $ 2,965,017 ​ ​ 116,867 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ Savings accounts ​ $ 382,713 ​ ​ 8,176 ​ 2.14 ​ $ 286,959 ​ ​ 1,623 ​ 0.57 ​ $ 253,651 ​ ​ 672 ​ 0.26 ​ NOW accounts ​ ​ 1,265,325 ​ ​ 26,528 ​ 2.10 ​ ​ 1,280,134 ​ ​ 17,756 ​ 1.39 ​ ​ 1,062,913 ​ ​ 5,164 ​ 0.49 ​ Money market accounts ​ ​ 403,170 ​ ​ 12,596 ​ 3.12 ​ ​ 382,032 ​ ​ 7,846 ​ 2.05 ​ ​ 276,579 ​ ​ 928 ​ 0.34 ​ Certificates of deposit ​ ​ 1,300,561 ​ ​ 54,857 ​ 4.22 ​ ​ 810,570 ​ ​ 17,167 ​ 2.12 ​ ​ 586,017 ​ ​ 5,058 ​ 0.86 ​ TOTAL INTEREST- BEARING DEPOSITS ​ 3,351,769 ​ 102,157 3.05 ​ 2,759,695 ​ 44,392 1.61 ​ 2,179,160 ​ 11,822 0.54 ​ Borrowings: ​ ​ ​ ​ ​ ​ ​ Securities sold under agreements to repurchase ​ ​ — ​ ​ — ​ — ​ ​ 4,148 ​ ​ 213 ​ 5.13 ​ ​ — ​ ​ — ​ — ​ FHLB advances ​ ​ 123,986 ​ ​ 4,993 ​ 4.03 ​ ​ 107,661 ​ ​ 3,627 ​ 3.37 ​ ​ 43,410 ​ ​ 792 ​ 1.83 ​ Junior subordinated debt ​ ​ 23,130 ​ ​ 1,742 ​ 7.53 ​ ​ 23,253 ​ ​ 1,439 ​ 6.19 ​ ​ 18,189 ​ ​ 686 ​ 3.77 ​ TOTAL INTEREST- BEARING LIABILITIES ​ 3,498,885 ​ 108,892 3.11 ​ 2,894,757 ​ 49,671 1.72 ​ 2,240,759 ​ 13,300 0.59 ​ Noninterest-bearing demand deposits ​ ​ 561,004 ​ ​ — ​ — ​ ​ 522,159 ​ ​ — ​ — ​ ​ 408,148 ​ ​ — ​ — ​ Other liabilities ​ ​ 31,366 ​ ​ — ​ — ​ ​ 16,484 ​ ​ — ​ — ​ ​ 10,651 ​ ​ — ​ — ​ TOTAL LIABILITIES ​ 4,091,255 ​ 108,892 — ​ 3,433,400 ​ 49,671 — ​ 2,659,558 ​ 13,300 — ​ Stockholders’ equity ​ 467,042 ​ — — ​ 377,652 ​ — — ​ 305,459 ​ — — ​ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ​ $ 4,558,297 ​ ​ 108,892 — ​ $ 3,811,052 ​ ​ 49,671 — ​ $ 2,965,017 ​ ​ 13,300 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income ​ ​ $ 139,483 ​ ​ $ 126,745 ​ ​ $ 103,567 ​ Interest rate spread (4) ​ ​ 2.71 % ​ 3.21 % ​ 3.61 % Net interest margin (5) ​ ​ 3.27 % ​ 3.54 % ​ 3.72 % Ratio of average interest-earning assets to average interest-bearing liabilities ​ 121.96 % ​ 123.57 % ​ 124.20 % ​ (1) Calculated net of deferred loan fees, loan discounts and unfunded commitments on construction loans.
When interest-earning assets approximate or exceed interest-bearing liabilities, any positive interest rate spread will generate net interest income. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended June 30, ​ ​ 2025 ​ 2024 ​ 2023 (dollars in thousands) Average Interest and Yield/ Average Interest and Yield/ Average Interest and Yield/ ​ ​ Balance ​ Dividends ​ Cost Balance ​ Dividends ​ Cost Balance ​ Dividends ​ Cost Interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mortgage loans (1) ​ $ 3,175,179 ​ $ 190,062 ​ 5.99 % $ 3,009,263 ​ $ 168,894 ​ 5.61 % $ 2,585,065 ​ $ 126,315 ​ 4.89 % Other loans (1) ​ ​ 800,247 ​ ​ 60,784 ​ 7.60 ​ ​ 708,881 ​ ​ 53,618 ​ 7.56 ​ ​ 589,625 ​ ​ 35,909 ​ 6.09 ​ Total net loans ​ 3,975,426 ​ 250,846 6.31 ​ 3,718,144 ​ 222,512 5.98 ​ 3,174,690 ​ 162,224 5.11 ​ Mortgage-backed securities ​ ​ 356,293 ​ ​ 16,567 ​ 4.65 ​ ​ 304,778 ​ ​ 14,631 ​ 4.80 ​ ​ 241,642 ​ ​ 6,967 ​ 2.88 ​ Investment securities (2) ​ ​ 130,445 ​ ​ 5,808 ​ 4.45 ​ ​ 165,307 ​ ​ 6,877 ​ 4.16 ​ ​ 118,386 ​ ​ 5,324 ​ 4.50 ​ Other interest-earning assets ​ ​ 91,278 ​ ​ 4,144 ​ 4.54 ​ ​ 79,116 ​ ​ 4,355 ​ 5.50 ​ ​ 42,287 ​ ​ 1,901 ​ 4.50 ​ TOTAL INTEREST- EARNING ASSETS (1) ​ 4,553,442 ​ 277,365 6.09 ​ 4,267,345 ​ 248,375 5.82 ​ 3,577,005 ​ 176,416 4.93 ​ Other noninterest-earning assets (3) ​ ​ 291,057 ​ ​ — ​ — ​ ​ 290,952 ​ ​ — ​ — ​ ​ 234,047 ​ ​ — ​ — ​ TOTAL ASSETS ​ $ 4,844,499 ​ ​ 277,365 — ​ $ 4,558,297 ​ ​ 248,375 — ​ $ 3,811,052 ​ ​ 176,416 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ Savings accounts ​ $ 584,185 ​ ​ 15,733 ​ 2.69 ​ $ 382,713 ​ ​ 8,176 ​ 2.14 ​ $ 286,959 ​ ​ 1,623 ​ 0.57 ​ NOW accounts ​ ​ 1,153,650 ​ ​ 22,249 ​ 1.93 ​ ​ 1,265,325 ​ ​ 26,528 ​ 2.10 ​ ​ 1,280,134 ​ ​ 17,756 ​ 1.39 ​ Money market accounts ​ ​ 338,132 ​ ​ 9,735 ​ 2.88 ​ ​ 403,170 ​ ​ 12,596 ​ 3.12 ​ ​ 382,032 ​ ​ 7,846 ​ 2.05 ​ Certificates of deposit ​ ​ 1,548,584 ​ ​ 68,056 ​ 4.39 ​ ​ 1,291,163 ​ ​ 54,406 ​ 4.21 ​ ​ 810,570 ​ ​ 17,167 ​ 2.12 ​ TOTAL INTEREST- BEARING DEPOSITS ​ 3,624,551 ​ 115,773 3.19 ​ 3,342,371 ​ 101,706 3.04 ​ 2,759,695 ​ 44,392 1.61 ​ Borrowings: ​ ​ ​ ​ ​ ​ ​ Securities sold under agreements to repurchase ​ ​ 14,330 ​ ​ 766 ​ 5.35 ​ ​ 9,398 ​ ​ 451 ​ 4.80 ​ ​ 4,148 ​ ​ 213 ​ 5.13 ​ FHLB advances ​ ​ 110,254 ​ ​ 4,582 ​ 4.16 ​ ​ 123,986 ​ ​ 4,993 ​ 4.03 ​ ​ 107,661 ​ ​ 3,627 ​ 3.37 ​ Junior subordinated debt ​ ​ 23,182 ​ ​ 1,628 ​ 7.02 ​ ​ 23,130 ​ ​ 1,742 ​ 7.53 ​ ​ 23,253 ​ ​ 1,439 ​ 6.19 ​ TOTAL INTEREST- BEARING LIABILITIES ​ 3,772,317 ​ 122,749 3.25 ​ 3,498,885 ​ 108,892 3.11 ​ 2,894,757 ​ 49,671 1.72 ​ Noninterest-bearing demand deposits ​ ​ 523,710 ​ ​ — ​ — ​ ​ 561,004 ​ ​ — ​ — ​ ​ 522,159 ​ ​ — ​ — ​ Other liabilities ​ ​ 33,370 ​ ​ — ​ — ​ ​ 31,366 ​ ​ — ​ — ​ ​ 16,484 ​ ​ — ​ — ​ TOTAL LIABILITIES ​ 4,329,397 ​ 122,749 — ​ 4,091,255 ​ 108,892 — ​ 3,433,400 ​ 49,671 — ​ Stockholders’ equity ​ 515,102 ​ — — ​ 467,042 ​ — — ​ 377,652 ​ — — ​ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ​ $ 4,844,499 ​ ​ 122,749 — ​ $ 4,558,297 ​ ​ 108,892 — ​ $ 3,811,052 ​ ​ 49,671 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income ​ ​ $ 154,616 ​ ​ $ 139,483 ​ ​ $ 126,745 ​ Interest rate spread (4) ​ ​ 2.84 % ​ 2.71 % ​ 3.21 % Net interest margin (5) ​ ​ 3.40 % ​ 3.27 % ​ 3.54 % Ratio of average interest-earning assets to average interest-bearing liabilities ​ 120.71 % ​ 123.57 % ​ 124.20 % ​ (1) Calculated net of deferred loan fees, and loan discounts.
Interest income on the investment portfolio and other interest-earning assets was $14.2 million for fiscal 2023, an increase of $8.8 million, or 164.2%, when compared to the prior fiscal year. This increase was attributable to a 203-basis point increase in the yield on these assets, combined with a $44.1 million, or 12.3%, increase in the average balance of such assets.
Interest income on the investment portfolio and other interest-earning assets was $26.5 million for fiscal 2025, an increase of $656,000, or 2.5%, when compared to the prior fiscal year. This increase was attributable to a $28.8 million, or 5.2%, increase in the average balance of such assets.
The increase was due primarily to a $16.3 million, or 15.2%, increase in the average balance of these advances, combined with a 66-basis point increase in the average rate paid on advances.
Interest expense on FHLB advances was $5.0 million for fiscal 2024, an increase of $1.4 million, or 37.7%, when compared to the prior fiscal year. The increase was due primarily to a $16.3 million, or 15.2%, increase in the average balance of these advances, combined with a 66-basis point increase in the average rate paid on advances.
Nonperforming loans were $6.7 million, or 0.17% of gross loans, at June 30, 2024, as compared to $7.7 million, or 0.21% of gross loans, at June 30, 2023. Nonperforming assets were $10.6 million, or 0.23% of total assets, at June 30, 2024, as compared to $11.3 million, or 0.26% of total assets, at June 30, 2023. Allowance for Credit Losses.
Nonperforming loans (NPLs) were $23.0 million, or 0.56% of gross loans, at June 30, 2025, as compared to $6.7 million, or 0.17% of gross loans, at June 30, 2024. Nonperforming assets (NPAs) were $23.7 million, or 0.47% of total assets, at June 30, 2025, as compared to $10.6 million, or 0.23% of total assets, at June 30, 2024.
ACL at June 30, 2024, totaled $52.5 million, representing 1.36% of gross loans and 786% of nonperforming loans, as compared to an ACL of $47.8 million, representing 1.32% of gross loans and 625% of nonperforming loans, at June 30, 2023.
Allowance for Credit Losses. ACL at June 30, 2025, totaled $51.6 million, representing 1.26% of gross loans and 224% of nonperforming loans, as compared to an ACL of $52.5 million, representing 1.36% of gross loans and 786% of nonperforming loans, at June 30, 2024.
The increase in the average rate paid on deposits was attributable primarily to higher market interest rates over the course of fiscal 2023. Interest expense on FHLB advances was $3.6 million for fiscal 2023, an increase of $2.8 million, or 358.0%, when compared to the prior fiscal year.
The increase in the average rate paid was attributable primarily to the term advances being made in a rate environment with higher market interest rates, compared to the portfolio of term advances in the prior year. Interest expense on FHLB advances was $4.6 million for fiscal 2025, a decrease of $411,000, or 8.2%, when compared to the prior fiscal year.
Information is provided with respect to (i) effects on interest income attributable to changes in volume (changes in volume multiplied by prior rate), (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) changes in rate/volume (change in rate multiplied by change in volume). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended June 30, ​ Years Ended June 30, ​ ​ 2024 Compared to 2023 ​ 2023 Compared to 2022 ​ ​ Increase (Decrease) Due to ​ Increase (Decrease) Due to ​ ​ ​ ​ ​ ​ Rate/ ​ ​ ​ ​ ​ ​ ​ Rate/ ​ ​ (dollars in thousands) Rate ​ Volume ​ Volume ​ Net Rate ​ Volume ​ Volume ​ Net Interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans receivable (1) ​ $ 27,460 ​ $ 27,991 ​ $ 4,837 ​ $ 60,288 ​ $ 12,664 ​ $ 34,531 ​ $ 3,534 ​ $ 50,729 Mortgage-backed securities ​ 4,633 ​ 1,820 ​ 1,211 ​ 7,664 ​ 1,653 ​ 1,607 ​ 969 ​ 4,229 Investment securities (2) ​ (399) ​ 2,110 ​ (158) ​ 1,553 ​ 1,311 ​ 1,138 ​ 678 ​ 3,127 Other interest-earning deposits ​ 426 ​ 1,656 ​ 373 ​ 2,455 ​ 5,315 ​ (293) ​ (3,558) ​ 1,464 Total net change in income on interest-earning assets ​ 32,120 ​ 33,577 ​ 6,263 ​ 71,960 ​ 20,943 ​ 36,983 ​ 1,623 ​ 59,549 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ 34,703 ​ 11,149 ​ 11,914 ​ 57,766 ​ 22,447 ​ 3,435 ​ 6,688 ​ 32,570 Securities sold under agreements to repurchase ​ ​ — ​ ​ — ​ ​ (213) ​ ​ (213) ​ ​ — ​ ​ — ​ ​ 213 ​ ​ 213 FHLB advances ​ 708 ​ ​ 550 ​ 108 ​ 1,366 ​ 670 ​ ​ 1,173 ​ 992 ​ 2,835 Subordinated debt ​ 312 ​ (8) ​ (1) ​ 303 ​ 440 ​ 191 ​ 122 ​ 753 Total net change in expense on interest-bearing liabilities ​ 35,723 ​ 11,691 ​ 11,808 ​ 59,222 ​ 23,557 ​ 4,799 ​ 8,015 ​ 36,371 Net change in net interest income ​ $ (3,603) ​ $ 21,886 ​ $ (5,545) ​ $ 12,738 ​ $ (2,614) ​ $ 32,184 ​ $ (6,392) ​ $ 23,178 (1) Does not include interest on loans placed on nonaccrual status.
Information is provided with respect to (i) effects on interest income attributable to changes in volume (changes in volume multiplied by prior rate), (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) changes in rate/volume (change in rate multiplied by change in volume). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended June 30, ​ Years Ended June 30, ​ ​ 2025 Compared to 2024 ​ 2024 Compared to 2023 ​ ​ Increase (Decrease) Due to ​ Increase (Decrease) Due to ​ ​ ​ ​ ​ ​ Rate/ ​ ​ ​ ​ ​ ​ ​ Rate/ ​ ​ (dollars in thousands) Rate ​ Volume ​ Volume ​ Net Rate ​ Volume ​ Volume ​ Net Interest-earning assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans receivable (1) ​ $ 11,463 ​ $ 16,223 ​ $ 648 ​ $ 28,334 ​ $ 27,460 ​ $ 27,991 ​ $ 4,837 ​ $ 60,288 Mortgage-backed securities ​ (460) ​ 2,473 ​ (77) ​ 1,936 ​ 4,633 ​ 1,820 ​ 1,211 ​ 7,664 Investment securities (2) ​ 707 ​ (1,450) ​ (326) ​ (1,069) ​ (399) ​ 2,110 ​ (158) ​ 1,553 Other interest-earning deposits ​ (762) ​ 669 ​ (118) ​ (211) ​ 426 ​ 1,656 ​ 373 ​ 2,455 Total net change in income on interest-earning assets ​ 10,948 ​ 17,915 ​ 127 ​ 28,990 ​ 32,120 ​ 33,577 ​ 6,263 ​ 71,960 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ 1,299 ​ 10,789 ​ 1,979 ​ 14,067 ​ 34,703 ​ 11,149 ​ 11,914 ​ 57,766 Securities sold under agreements to repurchase ​ ​ 51 ​ ​ 237 ​ ​ 27 ​ ​ 315 ​ ​ — ​ ​ — ​ ​ (213) ​ ​ (213) FHLB advances ​ 159 ​ ​ (553) ​ (17) ​ (411) ​ 708 ​ ​ 550 ​ 108 ​ 1,366 Subordinated debt ​ (118) ​ 4 ​ — ​ (114) ​ 312 ​ (8) ​ (1) ​ 303 Total net change in expense on interest-bearing liabilities ​ 1,391 ​ 10,477 ​ 1,989 ​ 13,857 ​ 35,723 ​ 11,691 ​ 11,808 ​ 59,222 Net change in net interest income ​ $ 9,557 ​ $ 7,438 ​ $ (1,862) ​ $ 15,133 ​ $ (3,603) ​ $ 21,886 ​ $ (5,545) ​ $ 12,738 (1) Does not include interest on loans placed on nonaccrual status.
Other loan fees were down due to the decrease in loan origination volume, primarily in commercial and residential real estate loans, which resulted in declining recognition of new mortgage servicing rights. Deposit account charges and related fees also decreased due to changes adopted in July 2023 as to how fees are assessed on NSF items. Noninterest Expense.
Other loan fees were down due to the decrease in loan origination volume, primarily in commercial and residential real estate loans, which resulted in declining recognition of new mortgage servicing rights.
The Company continues to manage its balance sheet to maximize earnings through interest rate cycles, while maintaining safe and sound risk management practices. 75 Table of Contents The Bank’s board of directors is responsible for reviewing it’s asset and liability policies.
The Company continues to manage its balance sheet to maximize earnings through interest rate cycles, while maintaining safe and sound risk management practices.
The Company has estimated its expected credit losses as of June 30, 2024, under ASC 326-20, and management believes the ACL as of that date is adequate based on that estimate. There remains, however, significant uncertainty as the Federal Reserve has tightened monetary policy to address inflation risks.
The Company has estimated its expected credit losses as of June 30, 2025, under ASC 326-20, and management believes the ACL as of that date was adequate based on that estimate.
The increase was due to an increase of $794.0 million, or 28.5%, in the average balance of interest-earning assets, combined with a 73 basis point increase in the average yield earned on interest-earning assets, from 4.20% in fiscal 2022, to 4.93% in fiscal 2023.
The increase was due to an increase of $286.1 million, or 6.7%, in the average balance of interest-earning assets, combined with a 27-basis point increase in the average yield earned on interest-earning assets, from 5.82% in fiscal 2024, to 6.09% in fiscal 2025.
Interest Expense. Interest expense was $49.7 million for fiscal 2023, an increase of $36.4 million, or 273.5%, when compared to the prior fiscal year.
Interest income for fiscal 2025 was $277.4 million, an increase of $29.0 million, or 11.7%, when compared to the prior fiscal year.
Loans, net of the ACL, were $3.8 billion at June 30, 2024, an increase of $226.2 million, or 6.3%, as compared to June 30, 2023. Gross loans increased by $230.9 million, while the ACL attributable to outstanding loan balances increased $4.7 million, or 9.8%, as compared to June 30, 2023.
Loans, net of the ACL, were $4.0 billion at June 30, 2025, an increase of $251.7 million, or 6.6%, as compared to June 30, 2024. Gross loans increased by $250.7 million, while the ACL attributable to outstanding loan balances decreased $887,000, or 1.7%, as compared to June 30, 2024. See, “Allowance for Credit Losses” below.
Finally, the ability of many borrowers to service their adjustable-rate debt may decrease in the event of an interest rate increase. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NPV as Percentage of ​ ​ Net Portfolio ​ PV of Assets Change in Rates Value Change % Change NPV Ratio Change ​ ​ (Dollars in thousands) ​ (%) ​ (basis points) ​ +300 bp ​ $ 355,100 ​ $ (117,925) (25) ​ 8.49 ​ (211) ​ +200 bp ​ 398,386 ​ (74,640) (16) ​ 9.32 ​ (129) ​ +100 bp ​ 438,278 ​ (34,748) (7) ​ 10.03 ​ (57) ​ 0 bp ​ 473,026 ​ — — ​ 10.60 ​ — ​ ‑100 bp ​ 502,260 ​ 29,235 6 ​ 11.03 ​ 43 ​ ‑200 bp ​ 517,334 ​ 44,308 9 ​ 11.16 ​ 55 ​ ‑300 bp ​ 512,487 ​ 39,461 8 ​ 10.89 ​ 28 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NPV as Percentage of ​ ​ Net Portfolio ​ PV of Assets Change in Rates Value Change % Change NPV Ratio Change ​ ​ (Dollars in thousands) ​ (%) ​ (basis points) ​ +300 bp ​ $ 259,599 ​ $ (114,765) (31) ​ 6.66 ​ (226) ​ +200 bp ​ 296,514 ​ (77,850) (21) ​ 7.43 ​ (149) ​ +100 bp ​ 334,226 ​ (40,138) (11) ​ 8.17 ​ (75) ​ 0 bp ​ 374,364 ​ — — ​ 8.92 ​ — ​ ‑100 bp ​ 426,243 ​ 51,879 14 ​ 9.91 ​ 99 ​ ‑200 bp ​ 480,345 ​ 105,981 28 ​ 10.95 ​ 203 ​ ‑300 bp ​ 518,672 ​ 144,307 39 ​ 11.64 ​ 272 ​ ​ The Company’s growth strategy has included origination of fixed-rate loans, as discussed under “Quantitative and Qualitative Disclosures About Market Risk,” above.
Finally, the ability of many borrowers to service their adjustable-rate debt may decrease in the event of an interest rate increase. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NPV as Percentage of ​ ​ Net Portfolio ​ PV of Assets Change in Rates Value Change % Change NPV Ratio Change ​ ​ (dollars in thousands) ​ (%) ​ (basis points) ​ +400 bp ​ $ 480,630 ​ $ (94,952) ​ (16) ​ 10.19 ​ (140) ​ +300 bp ​ ​ 512,685 ​ $ (62,896) (11) ​ 10.87 ​ (72) ​ +200 bp ​ 540,045 ​ (35,536) (6) ​ 11.25 ​ (35) ​ +100 bp ​ 561,455 ​ (14,127) (2) ​ 11.50 ​ (10) ​ 0 bp ​ 575,582 ​ — — ​ 11.60 ​ — ​ ‑100 bp ​ 583,974 ​ 8,392 1 ​ 11.58 ​ (2) ​ ‑200 bp ​ 581,715 ​ 6,133 1 ​ 11.37 ​ (23) ​ ‑300 bp ​ ​ 568,247 ​ ​ (7,335) ​ (1) ​ 10.95 ​ (65) ​ ‑400 bp ​ 552,615 ​ (22,967) (4) ​ 10.49 ​ (111) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NPV as Percentage of ​ ​ Net Portfolio ​ PV of Assets Change in Rates Value Change % Change NPV Ratio Change ​ ​ (dollars in thousands) ​ (%) ​ (basis points) ​ +300 bp ​ $ 355,100 ​ $ (117,925) (25) ​ 8.49 ​ (211) ​ +200 bp ​ 398,386 ​ (74,640) (16) ​ 9.32 ​ (129) ​ +100 bp ​ 438,278 ​ (34,748) (7) ​ 10.03 ​ (57) ​ 0 bp ​ 473,026 ​ — — ​ 10.60 ​ — ​ ‑100 bp ​ 502,260 ​ 29,235 6 ​ 11.03 ​ 43 ​ ‑200 bp ​ 517,334 ​ 44,308 9 ​ 11.16 ​ 55 ​ ‑300 bp ​ 512,487 ​ 39,461 8 ​ 10.89 ​ 28 ​ ​ The Company’s growth strategy has included origination of fixed-rate loans, as discussed under “Quantitative and Qualitative Disclosures About Market Risk,” above.
The Bank’s Asset/Liability Committee meets monthly to review interest rate risk and trends, as well as liquidity, capital ratios, and other requirements. The Bank’s management is responsible for administering the policies and determinations of the board of directors with respect to the Bank’s asset and liability goals and strategies. ​ ​
The Bank’s management is responsible for administering the policies and determinations of the board of directors with respect to the Bank’s asset and liability management goals and strategies. ​
Our fixed rate loan portfolio and the behavior of fixed-rate borrowers in a higher interest rate environment, especially over the course of fiscal 2023 and 2024, pressured our NPV.
Our fixed rate loan portfolio and the behavior of fixed-rate borrowers in a higher interest rate environment, especially over the course of fiscal 2023 and 2024, pressured our NPV. Since June 30, 2024, market interest rates at the mid-point of the curve have decreased, positively impacting the modeled value of our fixed rate loans and bonds at June 30, 2025.

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