Southern Missouri Bancorp, Inc. | 2017 Annual Report
> FINANCIAL SUMMARY <
> FINANCIAL SUMMARY <
2017
2017
CHANGE (%)
CHANGE (%)
CHANGE (%)
8.9%
-6.2%
13.6%
17.0%
-9.3%
4.7%
-100.0%
5.3%
8.9%
-6.2%
13.6%
17.0%
-9.3%
4.7%
-100.0%
5.3%
8.9%
-6.2%
13.6%
17.0%
-9.3%
4.7%
-100.0%
5.3%
1.99
1.98
15.96
23.53
0.36
4.5%
4.5%
15.3%
37.1%
11.1%
4.5%
4.5%
15.3%
37.1%
11.1%
4.5%
4.5%
15.3%
37.1%
11.1%
> FINANCIAL SUMMARY <
> FINANCIAL SUMMARY <
> FINANCIAL SUMMARY <
EARNINGS (dollars in thousands)
Net interest income
EARNINGS (dollars in thousands)
Provision for loan losses
Net interest income
Noninterest income
Provision for loan losses
Noninterest expense
Noninterest income
Income taxes
Noninterest expense
Net income
2017
Income taxes
Dividend on preferred shares
46,952
$
46,952
Net income
$
46,952
Net income available to common stockholders
2,494
2,494
2,494
Dividend on preferred shares
9,758
9,758
9,758
32,686
Net income available to common stockholders
32,686
32,686
6,682
6,682
6,682
14,848
14,848
14,848
85
85
85
14,763
14,763
14,763
51,122
$
2,340
11,084
38,252
6,062
15,552
-
15,552
51,122
2,340
11,084
38,252
6,062
15,552
-
15,552
51,122
2,340
11,084
38,252
6,062
15,552
-
15,552
$
$
$
2017
2016
2017
2016
2016
EARNINGS (dollars in thousands)
EARNINGS (dollars in thousands)
EARNINGS (dollars in thousands)
Net interest income
Net interest income
Net interest income
Provision for loan losses
Provision for loan losses
Provision for loan losses
Noninterest income
Noninterest income
Noninterest income
PER COMMON SHARE
Noninterest expense
Noninterest expense
Noninterest expense
Income taxes
Income taxes
Net income:
Income taxes
Net income
Net income
Net income
PER COMMON SHARE
Basic
Dividend on preferred shares
Dividend on preferred shares
Dividend on preferred shares
Net income:
Diluted
Net income available to common stockholders
Net income available to common stockholders
Net income available to common stockholders
Basic
Closing market price
Diluted
Cash dividends declared
Closing market price
Cash dividends declared
PER COMMON SHARE
PER COMMON SHARE
Net income:
Net income:
Basic
Basic
Diluted
Diluted
Tangible book value
Tangible book value
Closing market price
Closing market price
Cash dividends declared
Cash dividends declared
Net income:
Basic
Diluted
Tangible book value
Closing market price
Cash dividends declared
PER COMMON SHARE
FINANCIAL RATIOS
FINANCIAL RATIOS
AT YEAR-END (dollars in thousands)
AT YEAR-END (dollars in thousands)
$
$
$
$
1.99
$
1.99
1.98
1.98
15.96
15.96
23.53
23.53
0.36
0.36
$
2.08
2.07
18.40
32.26
0.40
2.08
$
2.08
2.07
AT YEAR-END (dollars in thousands)
2.07
18.40
18.40
Total assets
32.26
32.26
AT YEAR-END (dollars in thousands)
Loans, net of allowance
0.40
0.40
Total assets
Reserves as a percent of nonperforming loans
AT YEAR-END (dollars in thousands)
Loans, net of allowance
Deposits
1,403,910
Total assets
$
Total assets
Total assets
$
1,403,910
Loans, net of allowance
1,135,453
Loans, net of allowance
Reserves as a percent of nonperforming loans
Loans, net of allowance
1,135,453
Stockholder's equity
Reserves as a percent of nonperforming loans
%
244
%
Reserves as a percent of nonperforming loans
244
Reserves as a percent of nonperforming loans
Deposits
1,120,693
Deposits
$
Deposits
Deposits
1,120,693
$
125,966
Stockholder's equity
Stockholder's equity
Stockholder's equity
Stockholder's equity
125,966
FINANCIAL RATIOS
Return on average common stockholder's equity
FINANCIAL RATIOS
FINANCIAL RATIOS
Return on average assets
Return on average common stockholder's equity
11.70
12.34
Return on average common stockholder's equity
Return on average common stockholder's equity
Return on average common stockholder's equity
Net interest margin
Return on average assets
1.05
1.11
Return on average assets
Return on average assets
3.80
Net interest margin
3.74
Net interest margin
Net interest margin
Return on average assets
Efficiency ratio
57.64
Efficiency ratio
61.49
Efficiency ratio
Efficiency ratio
Net interest margin
Allowance for loan losses to loans
1.20
Allowance for loan losses to loans
1.10
Allowance for loan losses to loans
Allowance for loan losses to loans
9.44
11.66
Equity to average assets at year-end
Equity to average assets at year-end
Efficiency ratio
Equity to average assets at year-end
Equity to average assets at year-end
Allowance for loan losses to loans
Equity to average assets at year-end
8,591,363
8,572,588
1,707,712
$
$
1,707,712
1,397,730
1,397,730
%
482
482
1,455,597
$
1,455,597
$
173,083
173,083
$
1,707,712
1,397,730
482
%
$
1,455,597
173,083
%
12.34
1.11
3.80
57.64
1.20
9.44
%
11.70
1.05
3.74
61.49
1.10
11.66
11.70
%
1.05
3.74
61.49
1.10
11.66
$
%
1,403,910
1,135,453
244
%
1,120,693
125,966
12.34
%
1.11
3.80
57.64
1.20
9.44
OTHER DATA(1)
OTHER DATA(1)
shares outstanding
shares outstanding
8,591,363
8,572,588
8,591,363
8,572,588
7,437,616
7,400,816
Common shares outstanding
Common shares outstanding for book value calculation(2)
Average common and dilutive
OTHER DATA(1)
Common shares outstanding
Common shares outstanding for book value calculation(2)
Average common and dilutive
Common shares outstanding
Common shares outstanding for book value calculation(2)
Average common and dilutive
shares outstanding
OTHER DATA(1)
Common shares outstanding
OTHER DATA(1)
Common shares outstanding for book value calculation(2)
7,458,759
7,510,880
7,458,759
7,458,759
7,510,880
Common shares outstanding
Average common and dilutive shares outstanding
250
???
250
250
???
Common shares outstanding for book value calculation(2)
321
356
321
Common stockholders of record
321
356
4,374
4,797
$
$
4,374
4,374
4,797
$
$
Average common and dilutive shares outstanding
Full-time equivalent employees
36
42
36
36
42
Common stockholders of record
Assets per employee (in thousands)
(1) Other data is as of year-end, except for average shares.
(1) Other data is as of year-end, except for average shares.
(1) Other data is as of year-end, except for average shares.
Full-time equivalent employees
Banking offices
(2) Excludes unvested restricted stock award shares.
(2) Excludes unvested restricted stock award shares.
(2) Excludes unvested restricted stock award shares.
Assets per employee (in thousands)
Banking offices
Common stockholders record
Full-time equivalent employees
Assets per employee (in thousands)
Banking offices
Common stockholders record
Full-time equivalent employees
Assets per employee (in thousands)
Banking offices
Common stockholders record
Full-time equivalent employees
Assets per employee (in thousands)
Banking offices
7,510,880
???
356
$
4,797
42
7,437,616
7,400,816
7,437,616
7,400,816
$
%
%
$1.44
$1.44
$1.45
$1.44
$1.45
$1.79
$1.45
$1.79
$1.98
$1.79
$1.98
$2.07
$1.98
$2.07
$2.07
$0.30
$0.30
$0.32
$0.30
$0.32
$0.34
$0.32
$0.34
$0.36
$0.34
$0.36
2017
$ 51,122
2,340
$ 51,122
11,084
2,340
38,252
11,084
6,062
38,252
15,552
6,062
-
15,552
15,552
-
15,552
$ 2.08
$
2.07
32.26
0.40
$ 2.08
2.07
32.26
0.40
$
$ 1,707,712
1,397,730
$ 1,707,712
482 %
482%
1,397,730
$ 1,455,597
$
482 %
173,083
11.70 %
11.70%
1.05
11.70 %
3.74
1.05
61.49
3.74
1.10
61.49
11.66
1.10
11.66
8,591,363
8,572,588
7,510,880
243
375
$
$ 4,554
42
8,591,363
8,572,588
7,510,880
243
375
$ 4,554
42
$0.40
$0.40
$0.40
$0.36
2016
2016
CHANGE (%)
2016
$
$ 46,952
2,494
$ 46,952
9,758
2,494
32,686
9,758
6,682
32,686
14,848
6,682
85
14,848
14,763
85
85
14,763
CHANGE (%)
8.9%
-6.2%
8.9%
13.6%
-6.2%
17.0%
13.6%
-9.3%
17.0%
4.7%
-9.3%
-100.0%
4.7%
5.3%
-100.0%
5.3%
$
$ 1.99
1.98
23.53
0.36
$ 1.99
1.98
23.53
0.36
$ 1,403,910
$
1,135,453
$ 1,403,910
244 %
244%
1,135,453
$ 1,120,693
$
244 %
125,966
$ 1,120,693
125,966
12.34 %
12.34%
1.11
12.34 %
3.80
1.11
57.64
3.80
1.20
57.64
9.44
1.20
9.44
0.116639
173,083
4.5%
4.5%
4.5%
37.1%
4.5%
11.1%
37.1%
11.1%
21.6%
23.1%
21.6%
23.1%
29.9%
37.4%
29.9%
37.4%
0.094368
0.094368
0.094368
0.116639
0.116639
173,083
173,083
1483918
1483918
125,966
1483918
125,966
125,966
1334843
1334843
1334843
7,437,616
7,400,816
7,437,616
7,458,759
7,400,816
250
7,458,759
321
250
$ 4,374
321
36
$ 4,374
36
$12.55 $13.79 $15.30 $17.02
$
$12.55 $13.79 $15.30 $17.02
$12.55 $13.79 $15.30 $17.02
$20.19
$20.19
$20.19
21.6%
23.1%
21.6%
23.1%
21.6%
23.1%
29.9%
37.4%
29.9%
37.4%
29.9%
37.4%
$ 1,455,597
173,083
2013
2013
2014
2013
2014
2015
2014
2015
2016
2015
2016
2017
2016
2017
2017
DILUTED EARNINGS
PER SHARE
2013
2013
2017
2016
2015
2014
2013
2016
2015
2014
CASH DIVIDENDS PER SHARE
CASH DIVIDENDS PER SHARE
2015
2014
CASH DIVIDENDS PER SHARE
CASH DIVIDENDS
PER SHARE
2016
2017
2017
2013
2013
2013
2016
2015
2014
2015
2016
2014
2016
2015
2014
BOOK VALUE PER SHARE
BOOK VALUE PER SHARE
BOOK VALUE PER SHARE
BOOK VALUE
PER SHARE
2017
2017
2017
DILUTED EARNINGS PER SHARE
DILUTED EARNINGS PER SHARE
DILUTED EARNINGS PER SHARE
(1) Other data is as of year-end, except for average shares.
(2) Excludes unvested restricted stock award shares.
2014
2014
(1) Other data is as of year-end, except for average shares.
1.45
$
$
1.45
(2) Excludes unvested restricted stock award shares.
2013
2013
1.44
$
$
1.44
2014
$
1.44
2013
$
2015
$
1.45
2015
2015
1.79
$
$
1.79
2016
$
1.79
2016
2016
1.98
$
$
1.98
2017
$
1.98
2017
2017
2.07
$
$
2.07
2.07
CASH DIVIDENDS PER SHARE
CASH DIVIDENDS PER SHARE
CASH DIVIDENDS PER SHARE
BOOK VALUE PER SHARE
BOOK VALUE PER SHARE
BOOK VALUE PER SHARE
Total Assets
Dollars in millions
Total Assets
Dollars in millions
Total Assets
Dollars in millions
2013
$
2013
2013
0.30
$
$
0.30
2014
$
0.30
2014
2014
0.32
$
$
0.32
2015
$
0.32
2015
2015
0.34
$
$
0.34
2016
$
0.34
2016
2016
0.36
$
$
0.36
2017
$
0.36
2017
2017
0.40
$
$
0.40
0.40
2013
$
2013
2013
12.55
$
$
12.55
2014
$
2014
2014
13.79
$
$
13.79
12.55
2015
$
2015
2015
15.30
$
$
15.30
2016
$
2016
2016
17.02
$
$
17.02
15.30
13.79
2017
$
2017
2017
20.19
$
$
20.19
17.02
20.19
18.6%
18.6%
18.6%
$1,300
$1,300
$1,300
$1,404
$1,404
$1,708
$1,404
$1,708
$1,708
$1,021
$1,021
$1,021
Total Loans, net of allowance for loan losses
Dollars in millions
Total Loans, net of allowance for loan losses
Dollars in millions
Total Loans, net of allowance for loan losses
Dollars in millions
Total Deposits
Dollars in millions
Total Deposits
Dollars in millions
Total Deposits
Dollars in millions
$1,053
$1,053
$1,135
$1,053
$1,135
$1,135
$1,398
$1,398
$1,398
$1,055
$1,055
$1,121
$1,055
$1,121
$1,121
$1,456
$1,456
$1,456
$796
$796
$796
$647
$647
$647
$801
$801
$801
$632
$632
$632
$785
$785
$785
13
13
13
14
14
14
15
15
15
16
16
16
17
17
17
13
13
13
14
14
14
15
15
15
16
16
16
17
17
17
13
13
13
14
14
14
15
15
15
16
16
16
17
17
17
Assets
Assets
Assets
$
10
$
552
$
552
10
552
$
11
$
688
$
688
11
688
$
12
$
739
$
739
12
739
$
13
$
796
$
796
13
796
$
14
1,021
$
$
1,021
14
1,021
$
15
1,300
$
$
1,300
15
1,300
$
16
1,404
$
$
1,404
16
1,404
$
17
1,708
$
$
1,708
17
1,708
Loans
Loans
Loans
$
10
$
419
$
419
10
419
$
11
$
557
$
557
11
557
$
12
$
583
$
583
12
583
$
13
$
647
$
647
13
647
$
14
$
801
$
801
14
801
$
15
1,053
$
$
1,053
15
1,053
$
16
1,135
$
$
1,135
16
1,135
$
17
1,398
$
$
1,398
17
1,398
10
11
12
13
14
15
16
17
10
11
12
13
14
15
16
17
Dear Shareholder,
Fiscal 2017 saw Southern Missouri Bancorp complete a moderately
sized acquisition in an adjacent market offering opportunities for
additional growth, raise capital to support continuing growth,
post solid organic loan and deposit growth, maintain solid core
profitability, and improve on our already sound asset quality.
peer
9.1%
11.7%
Inc.
return on average common equity
SMBC
Southern Missouri Bancorp,
(the
Company), was pleased to report net income
available to common shareholders of $15.6
million for fiscal 2017, an increase of $789,000,
or 5.3%, over fiscal 2016. The Company’s
return on average common equity was 11.7%,
and its return on average assets was 1.05% for
6/30/2017
fiscal 2017, as compared to 12.3% and 1.11%,
12/31/2016
6/30/2016
respectively, for fiscal 2016.
12/31/2015
6/30/2015
Purchase accounting benefits reported on the
12/31/2014
acquired loan and deposit portfolios from
6/30/2014
the fiscal 2015 acquisition of Peoples Bank of
12/31/2013
6/30/2013
the Ozarks (“Peoples”) increased net interest
12/31/2012
income (pre-tax) by $1.5 million in fiscal 2017,
as compared to $1.7 million in the prior fiscal
year. Fiscal 2017 results included $685,000
(pre-tax) in charges related to the acquisition
efficiency ratio
of Capaha Bank, with no comparable charges
in the prior fiscal year.
11.5%
12.3%
12.5%
12.3%
SMBC
8.7%
9.6%
9.8%
7.6%
peer
61.5%
68.9%
Return on common equity exceeds
that of peer1 banks
Returns decreased slightly for fiscal 2016, but still compare favorably to peer banks.
Return on Average Common Equity
12.3%
11.5%
12.5%
12.3%
11.7%
7.6%
8.7%
9.6%
9.8%
9.1%
Dec-12
Jun-13
Dec-13
Jun-14
Dec-14
Jun-15
Dec-15
Jun-16
Dec-16
Jun-17
RETURN ON AVERAGE COMMON EQUITY
SMBC
peer
Southern Missouri Bancorp, Inc.
Peer Companies
Efficiency Ratio
65.9%
69.4%
70.0%
71.3%
68.9%
6/30/2017
12/31/2016
6/30/2016
12/31/2015
6/30/2015
12/31/2014
6/30/2014
12/31/2013
6/30/2013
12/31/2012
6/30/2017
12/31/2016
6/30/2016
12/31/2015
6/30/2015
12/31/2014
6/30/2014
12/31/2013
6/30/2013
12/31/2012
Net interest income improved 8.9%, as our average earning asset balances increased by 10.5%, while net interest margin
declined by six basis points. Purchase accounting benefits from the Peoples acquisition contributed eleven basis points to net
71.3%
interest margin in the 2017 fiscal year, as compared to 14 basis points in the prior year.
70.0%
58.5%
57.6%
61.5%
57.6%
52.7%
60.6%
58.5%
Noninterest income increased 13.6%, attributed primarily to loan origination fees, bank card interchange income, deposit
account service charges, loan servicing fees, increases in the cash value of bank-owned life insurance (BOLI), and net gains
realized on the sale of residential loans originated for sale into the secondary market.
65.9%
52.7%
69.4%
Jun-14
Dec-14
Jun-15
Dec-15
Jun-16
Dec-16
Dec-12
Jun-13
Dec-13
Jun-17
60.6%
_________________________________________________________________________________________
SMBC
peer
non-performing assets ratio
SMBC
peer
0.37%
0.49%
2.22%
Non-performing Assets Ratio
(1) Peer data is based on the median year-end figures (December) reported by S&P Global Market Intelligence (formerly, SNL Financial)
for publicly-traded commercial banks and thrifts with assets of $1 billion to $2 billion as of December 31, 2016, headquartered in Missouri,
Arkansas, Illinois, Iowa, Kansas, Kentucky, Nebraska, Oklahoma, and Tennessee. SMBC data is as of fiscal year-end (June).
0.64%
0.72%
1.50%
1.18%
0.64%
1.18%
0.43%
0.58%
1.50%
2.22%
0.58%
0.43%
0.72%
0.49%
0.64%
0.64%
0.37%
Dec-12
Jun-13
Dec-13
Jun-14
Dec-14
Jun-15
Dec-15
Jun-16
Dec-16
Jun-17
SMBC
peer
return on average common equity
SMBC
peer
9.1%
9.8%
9.6%
8.7%
7.6%
efficiency ratio
SMBC
peer
68.9%
71.3%
70.0%
69.4%
65.9%
non-performing assets ratio
SMBC
peer
0.49%
0.72%
1.18%
1.50%
2.22%
6/30/2017
12/31/2016
6/30/2016
12/31/2015
6/30/2015
12/31/2014
6/30/2014
12/31/2013
6/30/2013
12/31/2012
6/30/2017
12/31/2016
6/30/2016
12/31/2015
6/30/2015
12/31/2014
6/30/2014
12/31/2013
6/30/2013
12/31/2012
6/30/2017
12/31/2016
6/30/2016
12/31/2015
6/30/2015
12/31/2014
6/30/2014
12/31/2013
6/30/2013
12/31/2012
11.7%
12.3%
12.5%
11.5%
12.3%
61.5%
57.6%
58.5%
60.6%
52.7%
0.37%
0.64%
0.64%
0.43%
0.58%
Return on Average Common Equity
12.3%
Noninterest expense increased 17.0%, due to increased compensation, occupancy, legal and professional fees, charges to
recognize the impairment of fixed assets, expenses attributable to the prepayment of FHLB advances, provisioning for off-
balance sheet credit exposures, losses on foreclosed real estate, bank card network expenses, and expenses related to providing
debit cards, internet banking, and other deposit service to new and existing customers. The increase included the $685,000 in
9.1%
merger-related charges noted above.
11.5%
12.5%
11.7%
12.3%
9.6%
8.7%
9.8%
7.6%
peer
SMBC
Jun-13
Jun-14
Jun-15
Jun-17
Jun-16
Dec-12
Dec-14
Dec-13
Dec-15
Dec-16
Efficiency deteriorates, but remains
ahead of peers
Management remains committed to lowering the ratio
as we integrate recent acquisitions
Efficiency Ratio
While exclusion of the M&A expenses and other, smaller non-recurring items results in a core efficiency ratio we measure
internally that is somewhat lower, our noninterest expense results have not been what we would want for the long term. Because
operating efficiently remains a key long-term
strategy for the Company, we are focused on
lowering the measure. Our effective tax rate
improved primarily due to our formation of a
real estate investment trust (REIT) subsidiary
to hold certain qualified assets in order to
minimize the Company’s state tax liability.
The formation of the REIT did require some
legal and accounting expenditures, which
contributed a relatively small amount to the
annual increase in noninterest expense.
69.4%
60.6%
58.5%
70.0%
52.7%
65.9%
57.6%
61.5%
68.9%
71.3%
SMBC
Jun-13
Jun-16
Jun-14
Jun-15
Dec-13
Dec-14
Dec-15
Dec-12
EFFICIENCY RATIO
Southern Bank’s logo is a depiction of our
vision to be an organization that is accessible,
dynamic, innovative, competitive, rooted, and
involved. Each attribute is one we believe to
be key to developing as a Company that has
strong roots and strong branches. Since our
last shareholder letter, we’ve been pleased to
continue to expand those roots, announcing two acquisitions, and we remain focused on further opportunities to dynamically
grow.
Non-performing Assets Ratio
Southern Missouri Bancorp, Inc.
Peer Companies
Dec-16
Jun-17
2.22%
peer
1.50%
1.18%
Dec-12
0.64%
0.37%
0.49%
0.58%
0.64%
0.43%
Jun-16
Jun-14
Jun-15
Jun-13
Dec-13
Dec-14
Dec-15
0.72%
In January, we reported that we’d reached an agreement to add Capaha
Bank to our organization, with locations in Cape Girardeau and
Jackson, Missouri, as well as locations in Anna, Cairo, and Tamms,
Illinois, providing access to the only Metropolitan Statistical Area
peer
(MSA) in southeast Missouri. The merger was completed in June,
with Capaha Bank being merged with and into Southern Bank,
providing a solid core deposit franchise and a loan portfolio with a
positive credit outlook. We look forward to the opportunity to grow
both sides of the balance sheet in that market, as access to new products
and higher lending limits will help the bankers who joined us from Capaha to
serve their customers.
Dec-16
Jun-17
SMBC
Following our 2017 fiscal year end, in August, we reported that we will enter an adjacent market in
Marshfield, Missouri, as Southern Missouri Bank of Marshfield agreed to merge with our Company. We’re
targeting closing for the first quarter of calendar year 2018, and look forward to expanding our presence in
the Springfield, Missouri, MSA, through this addition of two locations in Webster County.
> FINANCIAL SUMMARY <
> FINANCIAL SUMMARY <
> FINANCIAL SUMMARY <
EARNINGS (dollars in thousands)
EARNINGS (dollars in thousands)
EARNINGS (dollars in thousands)
Net interest income
Net interest income
Net interest income
Provision for loan losses
Provision for loan losses
Provision for loan losses
Noninterest income
Noninterest income
Noninterest income
Noninterest expense
Noninterest expense
Noninterest expense
Income taxes
Income taxes
Income taxes
Net income
Net income
Net income
Dividend on preferred shares
Dividend on preferred shares
Dividend on preferred shares
PER COMMON SHARE
PER COMMON SHARE
PER COMMON SHARE
Net income:
Net income:
Net income:
Basic
Basic
Basic
Diluted
Diluted
Diluted
Tangible book value
Tangible book value
Tangible book value
Closing market price
Closing market price
Closing market price
Cash dividends declared
Cash dividends declared
Cash dividends declared
AT YEAR-END (dollars in thousands)
AT YEAR-END (dollars in thousands)
AT YEAR-END (dollars in thousands)
2017
2017
2017
2016
2016
CHANGE (%)
2016
CHANGE (%)
CHANGE (%)
$
51,122
$
51,122
$
$
51,122
46,952
$
46,952
$
46,952
8.9%
8.9%
8.9%
2,340
2,340
2,340
2,494
11,084
11,084
11,084
9,758
2,494
9,758
2,494
-6.2%
-6.2%
-6.2%
9,758
13.6%
13.6%
13.6%
38,252
38,252
38,252
32,686
32,686
32,686
17.0%
17.0%
17.0%
6,062
6,062
6,062
6,682
6,682
6,682
-9.3%
-9.3%
-9.3%
15,552
15,552
15,552
14,848
14,848
14,848
4.7%
4.7%
4.7%
-
-
-
85
85
-100.0%
85
-100.0%
-100.0%
$
$
2.08
$
$
2.08
2.08
$
1.99
$
1.99
1.99
4.5%
2.07
18.40
32.26
0.40
2.07
18.40
32.26
0.40
2.07
1.98
18.40
15.96
32.26
23.53
0.40
0.36
1.98
15.96
23.53
0.36
1.98
4.5%
4.5%
4.5%
4.5%
4.5%
15.96
15.3%
15.3%
15.3%
23.53
37.1%
37.1%
37.1%
0.36
11.1%
11.1%
11.1%
Net income available to common stockholders
Net income available to common stockholders
Net income available to common stockholders
15,552
15,552
15,552
14,763
14,763
14,763
5.3%
5.3%
5.3%
Total assets
Total assets
Total assets
$
1,707,712
$
1,707,712
$
1,707,712
1,403,910
$
$
1,403,910
$
1,403,910
21.6%
21.6%
21.6%
Loans, net of allowance
Loans, net of allowance
Loans, net of allowance
1,397,730
1,397,730
1,397,730
1,135,453
1,135,453
1,135,453
23.1%
23.1%
23.1%
Reserves as a percent of nonperforming loans
Reserves as a percent of nonperforming loans
Reserves as a percent of nonperforming loans
482
%
482
%
482
244
%
%
244
%
244
%
Deposits
Deposits
Deposits
Stockholder's equity
Stockholder's equity
Stockholder's equity
$
1,455,597
$
1,455,597
$
1,455,597
1,120,693
$
$
1,120,693
$
1,120,693
29.9%
29.9%
29.9%
173,083
173,083
173,083
125,966
125,966
125,966
37.4%
37.4%
37.4%
FINANCIAL RATIOS
FINANCIAL RATIOS
FINANCIAL RATIOS
Return on average common stockholder's equity
Return on average common stockholder's equity
Return on average common stockholder's equity
%
11.70
%
11.70
12.34
%
%
12.34
%
12.34
%
Return on average assets
Net interest margin
Efficiency ratio
Allowance for loan losses to loans
Equity to average assets at year-end
Return on average assets
Net interest margin
Efficiency ratio
Allowance for loan losses to loans
Equity to average assets at year-end
Return on average assets
Net interest margin
Efficiency ratio
Allowance for loan losses to loans
Equity to average assets at year-end
11.70
1.05
3.74
61.49
1.10
11.66
1.05
3.74
61.49
1.10
11.66
1.05
3.74
61.49
1.10
11.66
1.11
3.80
57.64
1.20
9.44
1.11
3.80
57.64
1.20
9.44
1.11
3.80
57.64
1.20
9.44
0.116639
0.116639
0.116639
0.094368
0.094368
0.094368
173,083
173,083
1483918
173,083
1483918
125,966
1483918
125,966
1334843
125,966
1334843
1334843
OTHER DATA(1)
OTHER DATA(1)
OTHER DATA(1)
Common shares outstanding
Common shares outstanding
Common shares outstanding
Common shares outstanding for book value calculation(2)
Common shares outstanding for book value calculation(2)
Common shares outstanding for book value calculation(2)
8,591,363
8,572,588
8,591,363
8,572,588
8,591,363
8,572,588
7,437,616
7,400,816
7,437,616
7,400,816
7,437,616
7,400,816
shares outstanding
Average common and dilutive
Average common and dilutive
Average common and dilutive
shares outstanding
shares outstanding
Common stockholders record
Common stockholders record
Common stockholders record
Full-time equivalent employees
Full-time equivalent employees
Full-time equivalent employees
Assets per employee (in thousands)
Assets per employee (in thousands)
Assets per employee (in thousands)
Banking offices
Banking offices
Banking offices
7,510,880
7,510,880
???
???
356
356
$
$
4,797
4,797
$
42
42
7,458,759
7,510,880
???
250
356
321
4,797
$
4,374
42
36
7,458,759
250
321
$
4,374
36
7,458,759
250
321
4,374
36
$
(1) Other data is as of year-end, except for average shares.
(1) Other data is as of year-end, except for average shares.
(2) Excludes unvested restricted stock award shares.
(2) Excludes unvested restricted stock award shares.
(1) Other data is as of year-end, except for average shares.
(2) Excludes unvested restricted stock award shares.
We continue to evaluate new opportunities to grow through mergers and acquisitions, as a range of
prospects appear to be in play across our footprint and beyond. As we consider each, we’ll continue
to focus on the growth of an institution built to serve our customers through an effective community
banking business model providing a valued service to our market area and a solid return to our
$2.07
$1.98
$1.98
$1.98
$0.36
shareholders.
$12.55 $13.79 $15.30 $17.02
$12.55 $13.79 $15.30 $17.02
$12.55 $13.79 $15.30 $17.02
$20.19
$20.19
$20.19
$1.79
$2.07
$2.07
$0.30
$0.30
$0.30
$0.32
$0.34
$0.32
$0.34
$0.36
$0.40
$0.40
$0.32
$0.34
$0.36
$0.40
$1.44
$1.44
$1.45
$1.44
$1.45
$1.45
$1.79
$1.79
2013
2013
2015
2014
2016
2013
2014
2015
2016
2015
We saw strong loan growth in fiscal 2017 totaling $262.3 million, or 23.1%. The mid-June Capaha Bank acquisition
2014
2014
2015
CASH DIVIDENDS PER SHARE
added their $152.2 million loan portfolio to our organic growth for the year. In total, loan growth consisted
primarily of increases in commercial real estate loans, residential real estate loans, and commercial loans.
2014
2015
CASH DIVIDENDS PER SHARE
2014
2015
CASH DIVIDENDS PER SHARE
2016
2015
2014
BOOK VALUE PER SHARE
2016
2015
2014
BOOK VALUE PER SHARE
2015
2016
2014
BOOK VALUE PER SHARE
Return on Average Common Equity
return on average common equity
SMBC
2017
2017
2017
2017
2013
2016
2017
2017
2013
2013
2017
2016
2013
2017
2016
2013
2017
2016
2013
peer
DILUTED EARNINGS PER SHARE
DILUTED EARNINGS PER SHARE
DILUTED EARNINGS PER SHARE
CASH DIVIDENDS PER SHARE
CASH DIVIDENDS PER SHARE
CASH DIVIDENDS PER SHARE
BOOK VALUE PER SHARE
BOOK VALUE PER SHARE
BOOK VALUE PER SHARE
12.5%
12.3%
11.7%
6/30/2017
12/31/2016
6/30/2016
12/31/2015
6/30/2015
12/31/2014
6/30/2014
TOTAL ASSETS
12/31/2013
Dollars in Millions
6/30/2013
Total Assets
Dollars in millions
12/31/2012
$1,404
$1,300
$1,404
Total Assets
Dollars in millions
Total Assets
Dollars in millions
$1,300
$1,300
11.7%
2013
$
1.44
12.3%
2013
$
2014
2013
$
1.44
1.44
$
2014
9.1%
$
1.45
2015
2014
$
1.45
1.45
$
2015
$
1.79
12.3%
2016
2015
$
1.79
1.79
$
2016
$
1.98
2016
2017
2017
11.5%
$
1.98
1.98
$
$
2.07
2017
$
2.07
2.07
9.8%
2014
2013
$
0.30
0.30
$
Further growth in loans, deposits, and total assets
Organic originations were supplemented by the Capaha Bank acquisition
2016
2015
2013
2013
12.5%
$
0.34
0.34
$
$
$
0.30
to result in an outstanding year for loan and deposit growth.
2017
2016
2016
2015
2017
2015
2014
2013
11.5%
TOTAL LOANS, NET OF ALLOWANCE
$
17.02
17.02
$
15.30
15.30
$
$
$
20.19
$
15.30
$
$
12.55
13.79
8.7%
FOR LOAN LOSSES
Total Loans, net of allowance for loan losses
Total Loans, net of allowance for loan losses
Total Loans, net of allowance for loan losses
Dollars in Millions
Dollars in millions
Dollars in millions
Dollars in millions
2014
$
0.32
9.6%
2017
2016
8.7%
$
0.36
$
0.36
2015
2014
$
13.79
13.79
$
2014
2013
$
12.55
12.55
$
2015
$
0.34
7.6%
2015
2014
$
0.32
0.32
$
2017
$
20.19
2017
9.6%
$
0.40
2017
$
0.40
2016
$
0.36
2016
$
17.02
2013
$
12.3%
18.6%
18.6%
9.8%
20.19
0.40
$1,708
$1,404
$1,708
$1,708
7.6%
9.1%
TOTAL DEPOSITS
18.6%
Dollars in Millions
Total Deposits
Dollars in millions
Jun-16
Total Deposits
Dollars in millions
Dec-15
Dec-12
Jun-13
Dec-13
$1,135
$1,053
$1,135
$1,053
$1,135
$1,398
Jun-14
$1,398
Dec-14
$1,398
Jun-15
$647
$647
$647
$801
$801
$1,053
$801
SMBC
$632
peer
$632
$785
$785
$632
$1,055
$1,055
$785
Total Deposits
Dollars in millions
Dec-16
$1,121
$1,055
Jun-17
$1,456
$1,456
$1,456
$1,121
$1,121
$796
$796
$1,021
$796
$1,021
$1,021
13
13
14
13
14
15
14
15
16
efficiency ratio
17
16
16
SMBC
15
17
17
peer
13
13
14
13
14
15
14
15
16
15
16
17
16
17
17
Efficiency Ratio
13
13
14
13
14
15
14
15
16
15
16
17
16
17
17
BOOK VALUE
PER SHARE
peer
SMBC
68.9%
71.3%
70.0%
69.4%
65.9%
61.5%
57.6%
58.5%
60.6%
52.7%
Jun-13
Jun-16
Jun-17
Jun-15
Jun-14
Dec-13
Dec-15
Dec-14
Dec-12
Dec-16
61.5%
52.7%
CASH DIVIDENDS
PER SHARE
$
10
$
11
12
$
$
13
$
14
$
15
$
16
17
$
Assets
$
552
$
688
$
739
796
$
1,021
$
1,300
$
1,404
$
$
1,708
Assets
552
10
$
57.6%
688
11
$
12
$
739
796
13
$
58.5%
1,021
14
$
1,300
15
$
1,404
16
$
60.6%
17
$
1,708
Loans
Loans
$
419
10
419
$
$
10
$
557
11
557
$
$
11
$
583
12
583
$
$
12
$
13
647
$
13
647
$
801
$
14
801
$
14
$
1,053
$
15
1,053
$
15
$
non-performing assets ratio
1,135
1,135
$
16
$
16
$
SMBC
peer
$
17
$
1,398
17
$
1,398
0.37%
problem asset levels improved
Nonperforming asset levels declined as a percentage of average assets, trending towards
historical averages following recent mergers.
DILUTED EARNINGS
6/30/2017
Assets
PER SHARE
68.9%
12/31/2016
552
10
6/30/2016
688
11
739
12
71.3%
12/31/2015
796
13
6/30/2015
1,021
14
70.0%
12/31/2014
1,300
15
Deposits increased $334.9 million, or 29.9%, with the Capaha Bank acquisition contributing $166.8 million
1,404
16
6/30/2014
1,708
17
to internally-generated growth. Additionally, we utilized brokered deposits to offset Federal Home Loan Bank
69.4%
12/31/2013
6/30/2013
advance repayments, and grew public
Loans
65.9%
12/31/2012
unit deposits. On a core basis, excluding
419
10
557
11
brokered and public unit deposits, and
583
12
647
13
evaluating monthly average balances,
801
14
we measured our nonmaturity deposit
1,053
15
1,135
16
growth during the 2017 fiscal year at 8.5%
1,398
17
6/30/2017
at our legacy branches, down slightly from
0.49%
12/31/2016
9.7% growth in fiscal 2016. We continue
6/30/2016
to be quite pleased with those results.
12/31/2015
0.72%
6/30/2015
1.18%
12/31/2014
We ended fiscal 2017 with improved
6/30/2014
12/31/2013
1.50%
credit quality, with nonperforming assets
6/30/2013
of $6.3 million, or 0.37% of total assets,
2.22%
12/31/2012
as compared to $9.0 million, or 0.64%
of total assets, at year end for fiscal 2016.
Nonperforming loans were 0.23% of gross
loans at June 30, 2017, as compared to
0.50%, at the prior fiscal year end. Net
charge-offs for fiscal 2017 were 0.05% of
average loans outstanding, as compared to
0.09% for fiscal 2016.
NON-PERFORMING ASSSETS RATIO
Non-performing Assets Ratio
Southern Missouri Bancorp, Inc.
Peer Companies
0.43%
0.64%
0.64%
0.58%
Dec-16
Dec-12
Dec-15
Dec-13
Dec-14
Jun-17
Jun-13
Jun-14
Jun-15
Jun-16
0.58%
0.43%
0.64%
0.64%
0.37%
2.22%
1.50%
1.18%
0.72%
0.49%
SMBC
peer
Our Company saw significant changes in its capital base during fiscal 2017, issuing common shares in the June closing of the
Capaha Bank acquisition and completing an “at-the-market” capital raise in that same month. Absent the capital raise, the
acquisition would have reduced our capital ratios compared to the prior fiscal year end. With the additional capital, however,
we ended the fiscal year with a ratio of tangible common equity to tangible assets (TCE/TA) of 9.32%, as compared to 8.46%
a year earlier. The additional capital raised, in addition to our normal retention, provides us with added capacity to grow
organically or through acquisitions. At the same time, we are re-evaluating our targeted capital ratios, and anticipate that
we’ll attempt to hold somewhat higher levels of capital over the near- to medium-term, attributable to continued expected
growth opportunities, and our concentration of assets in commercial real estate loans.
Book value per common share at June 30, 2017, was $20.19, an increase of 18.6% from the year prior, aided by the accretive
capital raise. Tangible book value per common share, a non-GAAP measure, improved 15.3%, to $18.40 at June 30, 2017.
Our closing stock price at the end of the fiscal year was $32.26, up 37.1% from $23.53 at the previous fiscal year end. Over
that same period, the SNL U.S. Bank Index was up 43.2%, while the S&P 500 was up 15.5%. We noted in last year’s report
that the Company’s stock had been included in the Russell 2000 Index when it reconstituted in June 2016, and we have seen
improved liquidity for our shareholders since then. Assuming dividends have been reinvested, our total shareholder return
over the five years ended June 30, 2017, has been 229.3%, while the SNL U.S. Bank Index has returned 136.1%, and the S&P
500 has returned 97.4%.
Our dividends paid during fiscal 2017 represented a 1.24% return on our closing stock price on the final day of the fiscal
year, and a 1.33% return on our average closing stock price for fiscal 2017. In July 2017, the board was pleased to increase our
dividend by 10%, to $0.11 per quarter, effective with the August 2017 payment.
As we plan for the coming year, we will, as always, look for opportunities to drive long-term shareholder value, including
through acquisition opportunities that present growth potential, stable sources of funding, or both. As this letter goes to
press, we were recently pleased to have been interviewed by the publication, Bank Director, for an upcoming article in which
we were identified as one of the highest performing listed banks over the last decade. This success has provided a foundation
from which we can look forward with optimism to the new fiscal year and beyond, and it is the result of a remarkable effort
by our team members, the opportunities afforded by our legacy communities as well as those we’ve grown into, and the
outstanding relationships we’re fortunate to enjoy with the businesses and consumers we serve.
Thank you for your continued confidence in our Company, and for the opportunity to serve you.
Sincerely,
GREG STEFFENS
PRESIDENT and CHIEF EXECUTIVE OFFICER
SOUTHERN MISSOURI BANCORP, INC.
> DIRECTORS <
L. Douglas Bagby
Chairman of the Board;
Retired City Manager, City of Poplar Bluff
Greg A. Steffens
President & CEO,
Southern Missouri Bancorp, Inc.
Sammy A. Schalk
Vice-Chairman of the Board;
President, Gamblin Lumber Company
Ronnie D. Black
Retired Executive Director,
General Association of General Baptists
Rebecca M. Brooks
Financial Manager, McLane Transport
Charles R. Love
Certified Public Accountant,
Kraft, Miles & Tatum
Dennis C. Robison
President, Robison Farms, Inc.
David J. Tooley
Retired President & CEO,
Metropolitan National Bank
Todd E. Hensley
Investor/Former Chairman,
Peoples Bank of the Ozarks
John R. Abercrombie
Retired President, Chairman & CEO,
Capaha Bank
> EXECUTIVE OFFICERS <
Greg A. Steffens
President & Chief Executive Officer
Lora L. Daves
Executive Vice President & Chief Risk Officer
Kimberly A. Capps
Executive Vice President & Chief Operations Officer
Justin G. Cox
Executive Vice President & Regional President
William D. Hribovsek
Executive Vice President & Regional President
Mark E. Hecker
Executive Vice President & Chief Credit Officer
Matthew T. Funke
Executive Vice President & Chief Financial Officer
Christopher R. (“Robb”) Roberts
Executive Vice President & Regional President
PLEASE JOIN US
at our 2017 Annual Meeting, where shareholders will hear
management review this year’s performance in detail.
ANNUAL MEETING
Monday, October 30, 2017, at 9:00 AM
To be held at our headquarters facility
2991 Oak Grove Road
Poplar Bluff, Missouri
SOUTHERN MISSOURI BANCORP, INC.
offers community banking services
in Missouri, Arkansas, and Illinois
through its single bank subsidiary, Southern Bank.
Southern Bank is…
Accessible – Southern Bank is always accessible through our branches, website, mobile applications,
ATMs and ITMs.
Dynamic – We are charismatic and progressive. We grow and adapt to meet the ever-changing needs of
our customers and communities.
Innovative – We are unconventional pioneers. We offer cutting edge products, like Kasasa, to help our
customers put their hard-earned money to work.
Competitive – We are as ambitious and driven as the people we serve. We offer the same quality products
of mega bank chains without losing personal service or outsourcing decisions.
Rooted – Our culture is rooted in nearly 130 years of impeccable customer service, superior products,
and philanthropy.
Involved – We believe that our personal investment in the lives of our customers and in the communities
we serve is just as important as our financial investments.
Southern Missouri Bancorp, Inc.
2991 Oak Grove Road, Poplar Bluff, Missouri 63901
(573) 778-1800
www.bankwithsouthern.com