Southern Missouri Bancorp, Inc.

Hello, and welcome to the Southern Missouri Bancorp Earnings Conference Call. My name is Alex. I'll be coordinating the call today. If you'd like to ask a question once the presentation has ended, please press star, followed by one on your telephone keypad. I'm going to hand it over to your host, Stephan Chikotovich, CFO to begin. Please go ahead.

Thank you, Alex. Good morning, everyone. This is Stephan Chikotovich, CFO with Southern Missouri Bancorp. Thank you for joining us. The purpose of this call is to review the information and data presented in our quarterly earnings release, dated Monday, January 27, 2024, 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 Steffen, 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.

Thanks, Stephan, and good morning, everyone. This is Matt Funke. Thanks for joining us. I'll start off with some highlights on our financial results for the December quarter, which is the second quarter of our fiscal year. Quarter over quarter, earnings and profitability improved due to a larger earning asset base driving an increase in net interest income in combination with a lower provision for credit losses and a decrease in non-interest expense. With the earnings and profitability improvement we have seen in the first half of our fiscal year, we feel we have good momentum and see positive trends going into the second half. We earned $1.30 diluted in the December quarter. That's up 20 cents from the linked September quarter, and it's up 23 cents from the December 2023 quarter. Net interest margin for the quarter was 3.36% as compared to 3.25% recorded for the year-ago period and was relatively flat compared to the first quarter of fiscal 25 when it was 3.37%. Net interest income was up 4% quarter over quarter and about 10.5% year over year. In the second quarter of our fiscal year, we generally receive inflows of seasonal deposits from our agricultural customers and public unit depositors. which can drive some net interest margin compression with those funds held in higher cash balances. However, this year, with FOMC rate cuts of 100 basis points driving down short-term rates and reducing the cost of our variable rate deposits, which have grown over recent periods, we were able to expand our net interest spread by four basis points in the quarter due to decreased funding costs, and that helped hold the net interest margin relatively steady quarter over quarter. On the balance sheet, gross loan balances increased by just over 60 million during the second quarter compared to a year ago at December 31st, 2023, gross balances are up 295 million or just under 8%. Deposit balances increased by about 170 million in the second quarter and increased by 225 million or about 5.5% compared to December 31st of the prior year. Strong growth in deposits this quarter was a result of non-maturity deposit accounts from seasonal deposit inflows and core CD growth from well received special rates offered during the quarter. Due to strong deposit growth, cash equivalents grew 70 million quarter over quarter and our available for sale securities portfolio grew about 48 million or 11% as we took advantage of a better spread environment to purchase bonds and add on balance sheet liquidity. Tangible book value per share was $38.91 and increased by $4.26 or 12% during the last 12 months. I'll now hand it over to Greg for some discussion on credit.