Southern Missouri Bancorp, Inc. ("Company") (NASDAQ: SMBC), the
parent corporation of Southern Missouri Bank and Trust Co.
("Bank"), today announced net income for the fourth quarter of
fiscal 2006 of $779,000, or $.35 per diluted share, an increase
from the loss of $587,000, or $(.26) per diluted share, during the
same period of the prior year. The increase in diluted earnings per
share was due primarily to the inclusion in the prior period's
results of a $2.0 million provision for loan losses, compared to a
$270,000 provision in the current period, and was partially offset
by the difference between an income tax benefit of $383,000 during
the prior period and a $303,000 provision for income taxes in the
current period. For fiscal 2006, the bank's net income increased to
$2.8 million, or $1.24 per diluted share, an increase from
$104,000, or $.05 per diluted share, earned in fiscal 2005. The
increase in diluted earnings per share for the fiscal year was also
primarily due to loan loss provisions of $4.8 million in the prior
year, compared to $555,000 in the current year, offset again by the
difference between an $82,000 income tax benefit in the prior year,
compared to a provision for income taxes of $1.4 million in the
current year. The fourth quarter and the fiscal year's results were
negatively impacted by the Company's opening of a branch in
Sikeston, Missouri, in January of 2006. We estimate that the
after-tax impact of operating the branch during the fourth quarter
decreased diluted earnings per share by $.02. For the fiscal year,
we estimate that the after-tax impact of operating the branch
decreased diluted earnings per share by $.05. Dividend Declared The
Board of Directors and management believe the continuation of a
quarterly dividend enhances shareholder value and demonstrates our
commitment to and confidence in our future prospects. Therefore,
they are pleased to announce the 49th consecutive quarterly
dividend since the inception of the Company. The $.09 cash dividend
will be paid on August 31, 2006, to shareholders of record at the
close of business on August 15, 2006. Balance Sheet Summary The
Company experienced balance sheet growth, with assets increasing
$20.3 million, or 6.2%, to $350.7 million at June 30, 2006, as
compared to $330.4 million at June 30, 2005. Growth in assets was
primarily reflected in increases in the loan portfolio, the
investment portfolio, and cash balances. Asset growth has been
funded primarily with deposits. Loans, net of allowance for loan
losses, as of June 30, 2006, increased $13.4 million, or 5.0%, to
$280.9 million, as compared to $267.6 million at June 30, 2005. The
increase in the loan portfolio primarily reflects growth in the
balances of commercial real estate and commercial loans of $7.2
million and $5.8 million, respectively. Asset quality remains
relatively strong with annualized net loan charge-offs for the year
totaling .25% of average net loans, compared to 1.85% for fiscal
2005. Non-performing loans totaled $53,000 at June 30, 2006. Our
allowance for loan loss at June 30, 2006, totaled $2.1 million,
representing .73% of net loans and 3,889% of non-performing loans.
The investment portfolio increased $3.7 million, or 10.7%, to $38.4
million at June 30, 2006, as compared to $34.7 million at June 30,
2005, primarily due to a $5.8 million increase in the amount
invested in U.S. government and federal agency obligations,
partially offset by a $2.8 million decrease in the amounts invested
in mortgage-backed securities. Total liabilities increased $18.8
million, or 6.2%, to $324.1 million, at June 30, 2006, as compared
to $305.4 million at June 30, 2005. Deposits increased $33.4
million, or 14.9%, to $258.1 million at June 30, 2006, as compared
to $224.7 million at June 30, 2005. The increase in deposits was
primarily due to a $25.7 million increase in certificates of
deposit (which resulted from promotional term/rate certificates,
including the net purchase of $10.7 million in brokered deposits),
an $8.1 million increase in money market passbook accounts, and a
$6.0 million increase in checking accounts, partially offset by a
$5.7 million decrease in money market deposit accounts. FHLB
advances decreased $15.5 million, or 25.2%, to $46.0 million at
June 30, 2006, as compared to $61.5 million at June 30, 2005, due
primarily to our strategic decision to increase certificate of
deposit balances and repay overnight borrowings in a rising rate
environment. The Company's stockholders' equity increased $1.6
million, or 6.2%, to $26.6 million at June 30, 2006, from $25.0
million at June 30, 2005. The increase was primarily due to net
income, partially offset by cash dividends paid and a decrease in
market value of the investment portfolio. The Company has
previously announced the intention to repurchase up to 115,000
shares of its common stock, or approximately 5% of its outstanding
common shares. To date, the Company has repurchased 89,000 shares
at an average cost of $15.17 per share. The Company has not been
actively purchasing shares of its common stock at this time, but
market conditions, business opportunities, and other economic
conditions may alter our outlook on repurchasing common stock.
Income Statement Summary The Company's net interest income
increased for the three and twelve month periods ended June 30,
2006, by $250,000, or 11.0%, and $348,000, or 3.8%, respectively,
as compared to the same periods of the prior year. The increase was
primarily due to an increase in the amount of interest-earning
assets, partially offset by decreases in net interest rate spread.
The net interest rate spread for the three and twelve month periods
ended June 30, 2006, was 2.77% and 2.69%, respectively, compared to
2.78% and 2.84%, respectively, for the same periods of the prior
year. The decrease in net interest rate spread for the three month
period ended June 30, 2006, resulted from a 70 basis point increase
in the weighted-average cost of funds, partially offset by a 69
basis point increase in the weighted-average yield on
interest-earning assets. The decrease in net interest rate spread
for the twelve month period ended June 30, 2006, resulted from a 71
basis point increase in the weighted-average cost of funds,
partially offset by a 56 basis point increase in the
weighted-average yield on interest-earning assets. Net interest
rate spread compression during the fiscal year has been due
primarily to short-term interest rate increases by the Federal
Reserve, without similar long-term interest rate increases,
increased competition within our market area for both loans and
deposits, and increased average cash balances, which lowered our
average yield on interest-earning assets. Non-interest income
increased $29,000, or 5.5%, for the three month period ended June
30, 2006, as compared to the same period of the prior year. For the
twelve month period ended June 30, 2006, non-interest income
decreased $170,000, or 7.4%, as compared to the prior year,
primarily due to the inclusion in the results for fiscal 2005 of
gains realized on the sale of equities and investments totaling
$352,000. Non-interest expense decreased $82,000, or 4.5%, for the
three month period ended June 30, 2006, as compared to the same
period of the prior year. The decrease was primarily due to lower
legal and professional fees, offset by higher occupancy expenses.
For the twelve month period ended June 30, 2006, non-interest
expense increased $300,000, or 4.5%, as compared to the prior year,
primarily due to higher compensation and occupancy expenses,
partially offset by lower legal and professional fees. For the
three and twelve month periods ended June 30, 2006, the operation
of the Sikeston facility contributed $113,000 and $254,000,
respectively, to non-interest expense. Absent those expenses,
non-interest expense would have decreased by $195,000, or 11.2%,
for the three month period, and increased $46,000, or 0.7%, for the
twelve month period. The efficiency ratio for the three month
period ended June 30, 2006, improved to 56.2%, compared to 64.7%
for the same period of the prior year. The improvement was due to
the aforementioned decrease in non-interest expense, coupled with
increases in net interest income and non-interest income, compared
to the same period of the prior year. For the twelve month period
ended June 30, 2006, the efficiency ratio narrowed to 59.8%,
compared to 58.2% for fiscal 2005. The narrowing was due primarily
to the inclusion in the prior year's results of the aforementioned
$352,000 in gains on the sale of equities and investments. Absent
non-interest expense incurred due to the opening and operation of
the new Sikeston facility, we estimate that the Company's
efficiency ratio would have been 54.5% for the fourth quarter, and
58.4% for the fiscal year. The Company continues to evaluate
opportunities to improve efficiency. Except for the historical
information contained herein, the matters discussed in this press
release may be deemed to be forward-looking statements that involve
risks and uncertainties, including changes in economic conditions
in the Company's market area, changes in policies by regulatory
agencies, fluctuations in interest rates, demand for loans in the
Company's market area, and competition. Actual strategies and
results in future periods may differ materially from those
currently expected. These forward-looking statements represent the
Company's judgment as of the date of this release. The Company
disclaims however, any intent or obligation to update these
forward-looking statements. -0- *T SOUTHERN MISSOURI BANCORP, INC.
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION Selected
Financial Data at: June 30, 2006 June 30, 2005
--------------------------- --------------- -------------- Total
assets $350,684,000 $330,360,000 Available-for-sale securities
38,402,000 34,700,000 Loans, net 280,931,000 267,568,000 Allowance
for losses on loans 2,058,000 2,017,000 Non-performing assets
269,000 658,000 Deposits 258,069,000 224,666,000 FHLB advances
46,000,000 61,500,000 Securities sold under repurchase agreements
11,296,000 10,757,000 Subordinated debt 7,217,000 7,217,000
Stockholders' equity 26,554,000 25,003,000 Equity to assets ratio
7.57% 7.57% Allowance as a percentage of loans 0.73% 0.75%
Non-performing loans as a percentage of loans 0.02% 0.21% Per
common share: Closing market price 13.00 14.50 Tangible book value
10.86 10.07 Three Months Ended Twelve Months Ended June 30, June
30, Selected Operating Data: 2006 2005 2006 2005
---------------------- ----------- ----------- -----------
----------- Net interest income $2,520,000 $2,270,000 $9,600,000
$9,252,000 Provision for losses on loans 270,000 1,960,000 555,000
4,815,000 Non-interest income 566,000 536,000 2,144,000 2,313,000
Non-interest expense 1,734,000 1,816,000 7,028,000 6,728,000 Income
taxes 303,000 (383,000) 1,377,000 (82,000) ----------- -----------
----------- ----------- Net income $779,000 $(587,000) $2,784,000
$104,000 Per common share: Net earnings: Basic $0.35 $(.26) $1.25
$.05 Diluted $0.35 $(.26) $1.24 $.05 Cash dividends $.09 $.09 $.36
$.36 Average basic shares outstanding 2,225,731 2,224,682 2,224,409
2,225,493 Average diluted shares outstanding 2,254,356 2,284,258
2,252,261 2,286,645 Profitability Ratios: ----------------------
Return on average assets: .89% (.71%) .80% .03% Return on average
common equity: 11.91% (9.10%) 10.83% .39% Net interest margin 3.06%
2.98% 2.96% 3.06% Net interest spread 2.77% 2.78% 2.69% 2.84%
Efficiency Ratio 56.2% 64.7% 59.8% 58.2% *T
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