Southern Missouri Bancorp, Inc.

Hello, everyone, and welcome to the Southern Missouri Bancorp earnings call. My name is James, and I'll be your operator for today. If you would like to ask a question during the presentation, you may do so by pressing star followed by the number one on your telephone keypads. The conference call will now start, and I'll hand it over to our host, Chief Financial Officer of Southern Missouri Bancorp, Stephan. Please go ahead.

Thank you, James. Good morning, everyone. This is Stephan Chakotovich, 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 quarterly earnings release dated Wednesday, January 21st, 2026, 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 Matt Funke, President and Chief Administrative Officer. Matt will lead off our conversation today with some highlights from our most recent quarter.

Thank you, Steffen, 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, the second quarter of our first quarter. Quarter over quarter, our earnings and profitability improved due to a lower provision for credit losses a larger earning asset base, which drove an increase in net interest income, as well as an increase in non-interest income. With the earnings and profitability improvement we've seen in the first half of our fiscal year, we feel we have good momentum and see positive trends continuing into the second half. We earned $1.62 per share diluted in the December quarter. That's up 24 cents or 17.4% from the linked September quarter. and it's 32 cents or 24.6% from the December 2024 quarter. Provision for credit loss expense was about $1.7 million, a decrease of $2.8 million when compared to the linked September quarter. As we stated on the last earnings call, we expected the provision to decrease this quarter and some positive movement with the workout of the specialty CRE loans we've discussed in prior quarters. Greg will give some more details on that next. On the balance sheet, gross loan balances increased by $35 million during the second quarter. Compared to December 31st of the prior year, our gross loan balances are up almost $200 million, or 5%. Growth in the quarter was led by 1-4 family residential, C&I, and construction and loan development loans. We experienced strong growth in our east region, followed by good growth in our west region. We had a great quarter for loan originations generating almost $312 million, our strongest quarter over the last several years. But growth was slowed by seasonal ag paydowns and some larger loan payoffs. With the strong production and as we enter a slower season for ag and real estate loans, our loan pipeline for the next 90 days decreased somewhat but remains healthy at $159 million at December 31st. Due to normal seasonality, we would expect limited net loan growth in the March quarter, but having grown just above 3% in our fiscal year today and expecting a typical pickup of growth in our fourth quarter, we're still in a good position to achieve mid-single-digit growth for the fiscal year of 26. Deposit balances increased by about $28 million in the second quarter and by $98 million, or 2.3%, compared to December 31st of the prior year. Over the last 12 months, we've had a reduction of $72 million in broker deposits, so we put our core deposit growth at about $170 million, or 4.3% over that 12-month period. Net interest margin for the quarter was 3.57%, unchanged from the linked September quarter, and as compared to 3.34% reported for the year-ago period. Interest income was up just over 1% quarter over quarter and up 12.4% year over year. Stephan will get into the details on the NIM in a bit, but I wanted to point out that with 50 basis points of FOMC cuts in the December quarter, we have seen some positive underlying improvement in the NIM, although that was hampered this quarter by two credit relationships that were placed on non-accrual. Adjusting for $678,000 of this reversed interest income related to these credits The NIM would have been 3.63% in the December quarter. Tangible book value per share was $44.65 and increased by $5.74 or almost 15% during the last 12 months. Lastly, in the second quarter, we repurchased 148,000 shares at an average price of $54.32 per share for a total of $8.1 million. The average purchase price was 122% of our tangible book value as of December 31st, 25. I'll now hand it over to Greg for some discussion on credit.