Southern Missouri Bancorp, Inc.

Good morning and welcome to today's Southern Missouri Bancorp Quarterly Earnings Conference call. My name is Drew and I'll be coordinating your call today. During today's presentation, if you would like to ask a question, you may do so by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two. I'm now going to hand over to Laura Daves, Chief Financial Officer to begin. Please go ahead.

Thank you, Drew, and good morning, everyone. This is Laura Dave, CFO with Southern Missouri Bank Corp. Thank you for joining us. The purpose of this call is to review the information and data presented in our quarter earnings release dated Monday, October 24, 2022, and to take your questions. We may make certain forward-looking statements during today's call, and we refer you to our cautionary statement regarding forward-looking statements contained in the press release. I'm joined on the call today by Greg Steffens, our chairman and CEO, and by Matt Funke, president and chief administrative officer. Matt will lead off our conversation today with some highlights from our most recent quarter.

Thank you, Laura, and good morning, everyone. This is Matt Funke. Thanks for joining us. We're pleased to report this morning that the September quarter, the first of our fiscal year, provided continued growth for southern Missouri. due to the above-trend growth in loans, as well as due to some deterioration in the macroeconomic outlook, required provisioning cut into profitability, despite very low charge-offs and continued strong credit quality metrics. We earned $1.04 diluted in the September quarter. That's down 37 cents from the linked June quarter and down 39 cents from the September 2021 quarter. Net interest margin for the quarter was 3.65%. compared to 4.01% reported for the year-ago period and 3.66% recorded for the fourth quarter of fiscal 22, the linked quarter. The large drop-off from a year ago was due to large amounts of deferred PPP origination fees recognized in that quarter. We viewed our core quarterly margin as stable quarter over quarter and down slightly year over year. But if we did adjust for the 92-day quarter in September, we'd be down about 3.5 basis points compared to the June quarter. Average interest earning cash and cash equivalent balances decreased compared to the linked quarter and year-ago period and are back in line with our historical norms. Net interest income for the quarter was $28.5 million, an increase of $2.9 million, or 11.2% as compared to the same period of the prior fiscal year. The increase was attributable to a 22% increase in the average balance of interest earning assets partially offset by the decrease noted in our net interest margin. On the balance sheet, gross loan balances were up more than $257 million in the September quarter. Compared to one year ago at September 30th, 2021, gross loan balances are up $695 million, or almost 30%. Our fortune merger in February of 22 added $202 million during that period. So net of that, our annual growth rate for the year for the 12-month period would be about 22%. The investment portfolio was little changed over the quarter, while cash equivalents decreased almost $42 million. Deposit balances increased by almost $36 million in the first quarter and have increased by $479 million compared to September 30 of last year. The year-over-year increase was attributable in part to the February Fortune merger, which provided $218 million in deposits of fair value We also had a little more than $28 million that we picked up in a branch acquisition in the second quarter of fiscal 22. FHLB borrowings increased by $187 million during the quarter, consisting of overnight balances. We typically see better deposit growth after our September quarter, and we also see some seasonal loan payoffs in the December and March quarters. But still, this would be a higher-than-normal overnight position for us due to the very strong loan growth that we had this quarter. Greg is planning to speak to some key credit themes. Greg?