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Southern Missouri Bancorp Reports Preliminary Results for First Quarter of Fiscal 2021; Declares Quarterly Dividend of $0.15 per Common Share; Conference Call Scheduled for Tuesday, October 27, at 3:30 PM Central Time

Southern Missouri Bancorp, Inc.
·31 min read

Poplar Bluff, Missouri, Oct. 26, 2020 (GLOBE NEWSWIRE) -- Southern Missouri Bancorp, Inc. (“Company”) (NASDAQ: SMBC), the parent corporation of Southern Bank (“Bank”), today announced preliminary net income for the first quarter of fiscal 2021 of $10.0 million, an increase of $2.2 million, or 27.6%, as compared to the same period of the prior fiscal year. The increase was attributable to increases in net interest income and noninterest income, and a decrease in provision for loan losses, partially offset by increases in noninterest expense and provision for income taxes. Preliminary net income was $1.09 per fully diluted common share for the first quarter of fiscal 2021, an increase of $.24 as compared to the $.85 per fully diluted common share reported for the same period of the prior fiscal year.

Highlights for the first quarter of fiscal 2021:

  • Annualized return on average assets was 1.57%, while annualized return on average common equity was 15.6%, as compared to 1.40% and 13.0%, respectively, in the same quarter a year ago, and 1.10% and 10.8%, respectively, in the fourth quarter of fiscal 2020, the linked quarter.

  • Earnings per common share (diluted) were $1.09, up $.24, or 28.2%, as compared to the same quarter a year ago, and up $.33, or 43.4%, from the fourth quarter of fiscal 2020, the linked quarter.

  • Provision for loan losses was $774,000, a decrease of $122,000, or 13.6%, as compared to the same period of the prior year, and down $1.1 million, or 58.6%, as compared to the fourth quarter of fiscal 2020, the linked quarter. Nonperforming assets were $11.3 million, or 0.44% of total assets, at September 30, 2020, as compared to $11.2 million, or 0.44% of total assets, at June 30, 2020, and $17.9 million, or 0.80% of total assets, at September 30, 2019, one year prior.

  • In what is usually the Company’s strongest quarter of the year for loan growth, net loan growth for the first quarter of fiscal 2021 was $8.5 million, resulting from a relatively small increase of $18.0 million in gross loan balances receivable, partially offset by an increase of $9.5 million in our allowance for credit losses, as the Company adopted ASU 2016-13, Financial Instruments – Credit Losses, effective with the beginning of our 2021 fiscal year. See further discussion below.

  • Deposit balances decreased $16.8 million in the first quarter of fiscal 2021. Typically, the first quarter of the fiscal year is the weakest for the Company’s deposit growth, and this weakness was somewhat more pronounced this year, as depositors had little appetite for certificates of deposit, and growth in nonmaturity balances slowed after significant increases in the final two quarters of the prior fiscal year.

  • Net interest margin for the first quarter of fiscal 2021 was 3.73%, down from the 3.81% reported for the year ago period, and down from the 3.75% figure reported for the fourth quarter of fiscal 2020, the linked quarter. Discount accretion on acquired loan portfolios was slightly lower in the current quarter as compared to the linked quarter, and down more significantly as compared to the year ago period. Additionally, as compared to the linked and year-ago quarters, the Company noted reductions in interest income resulting from the resolution of loans that had been previously classified as nonaccrual.

  • Noninterest income was up 41.6% for the first quarter of fiscal 2021, as compared to the year ago period, and was up 13.4% as compared to the fourth quarter of fiscal 2020, the linked quarter. The Company continues to realize significantly increased gains on sales of residential mortgage loans originated for that purpose.

  • Noninterest expense was up 9.3% for the first quarter of fiscal 2021, as compared to the year ago period, and was down 13.0% from the fourth quarter of fiscal 2020, the linked quarter. The linked quarter included significant non-recurring charges related to the May 2020 acquisition of Central Federal Bancshares and its subsidiary, the Central Federal Savings and Loan Association of Rolla (the “Central Federal Acquisition”).

Dividend Declared:

The Board of Directors, on October 20, 2020, declared a quarterly cash dividend on common stock of $0.15, payable November 30, 2020, to stockholders of record at the close of business on November 13, 2020, marking the 106th consecutive quarterly dividend since the inception of the Company. The Board of Directors and management believe the payment of a quarterly cash dividend enhances stockholder value and demonstrates our commitment to and confidence in our future prospects.

Share Repurchase Program:

In November 2018, the Company announced a share repurchase plan under which it intended to repurchase up to 450,000, or 4.8% of the then-outstanding 9.3 million common shares. In March 2020, after having repurchased approximately 218,000 shares, the Company temporarily suspended activity under the repurchase program, as a result of the uncertainty triggered by the COVID-19 pandemic and its effect on the U.S. economy. On October 20, 2020, the Board of Directors approved the resumption of activity under the program. The shares will be purchased at prevailing market prices in the open market or in privately negotiated transactions, subject to availability and general market conditions. Repurchased shares will be held as treasury shares to be used for general corporate purposes.

Conference Call:

The Company will host a conference call to review the information provided in this press release on Tuesday, October 27, 2020, at 3:30 p.m., central time. The call will be available live to interested parties by calling 1-888-339-0709 in the United States (Canada: 1-855-669-9657, international: 1-412-902-4189). Participants should ask to be joined into the Southern Missouri Bancorp (SMBC) call. Telephone playback will be available beginning one hour following the conclusion of the call through November 9, 2020. The playback may be accessed by dialing 1-877-344-7529 (Canada: 1-855-669-9658, international: 1-412-317-0088), and using the conference passcode 10149525.

Balance Sheet Summary:

The Company’s balance sheet was slightly lower at September 30, 2020, as compared to June 30, 2020, with total assets of $2.5 billion reflecting a decrease of $1.4 million, or 0.1%. Growth in net loan balances, accrued interest receivable, and other assets was offset by reductions in cash and cash equivalents, and available-for-sale (“AFS”) securities.

Cash equivalents and time deposits were a combined $42.9 million at September 30, 2020, a decrease of $12.4 million, or 22.4%, as compared to June 30, 2020. AFS securities were $175.5 million at September 30, 2020, a decrease of $1.0 million, or 0.6%, as compared to June 30, 2020.

Loans, net of the allowance for credit losses (ACL), were $2.2 billion at September 30, 2020, an increase of $8.5 million, or 0.4%, as compared to June 30, 2020. Gross loans increased by $18.0 million, or 0.8%, during the first three months of the fiscal year, while the ACL at September 30, 2020, reflected an increase of $9.5 million, as compared to the balance of our allowance for loan and lease losses (ALLL) at June 30, 2020. The Company adopted ASU 2016-13, Financial Instruments – Credit Losses, also known as the current expected credit loss (“CECL”) standard, effective as of July 1, 2020, the beginning of our 2021 fiscal year. Adoption resulted in an $8.9 million increase in the ACL, relative to the ALLL as of June 30, 2020, while provisioning in excess of net charge offs during the first quarter of fiscal 2021 increased the ACL by an additional $612,000, as compared to July 1, 2020. The increase in loan balances in the portfolio was primarily attributable to commercial loans and residential real estate loans, partially offset by modest declines in commercial real estate loans and drawn construction loan balances. Residential real estate loans increased on growth in 1- to 4-family residential lending, partially offset by a modest decline in multifamily real estate loans. Commercial loan balances increased primarily as a result of seasonal agricultural loan draws, partially offset by a reduction in commercial and industrial loan types, and in total, commercial loan balances remained relatively high compared to recent periods as a result of the Small Business Administration’s Paycheck Protection Program (PPP) loans, which totaled $133.7 million at September 30, 2020, as compared to $132.3 million at June 30, 2020. In early October, the Company began submitting applications to the SBA for forgiveness of the loans originated under the PPP program but, to date, relatively few have been submitted, and only a small percentage of those submitted have been processed by the SBA. Loans anticipated to fund in the next 90 days stood at $122.7 million at September 30, 2020, as compared to $86.6 million at June 30, 2020, and $101.7 million at September 30, 2019.

Nonperforming loans were $8.8 million, or 0.40% of gross loans, at September 30, 2020, as compared to $8.7 million, or 0.40% of gross loans at June 30, 2020, and $14.0 million, or 0.74% of gross loans at September 30, 2019. Nonperforming assets were $11.3 million, or 0.44% of total assets, at September 30, 2020, as compared to $11.2 million, or 0.44% of total assets, at June 30, 2020, and $17.9 million, or 0.80% of total assets, at September 30, 2019. The decrease in nonperforming loans over the previous twelve months was attributed primarily to the resolution of certain nonperforming loans acquired in the November 2018 acquisition of Gideon Bancshares and its subsidiary, First Commercial Bank (the “Gideon Acquisition”).

Our ACL at September 30, 2020, totaled $34.6 million, representing 1.59% of gross loans and 394.9% of nonperforming loans, as compared to an ALLL of $25.1 million, representing 1.16% of gross loans and 290.4% of nonperforming loans at June 30, 2020, and an ALLL of $20.7 million, or 1.09% of gross loans and 147.7% of nonperforming loans, at September 30, 2019. The ACL at September 30, 2020, also represented 1.69% of gross loans excluding PPP loans. The Company has estimated its credit losses as of September 30, 2020, under ASC 320-20, and management believes the allowance for credit losses as of that date is adequate based on that estimate; however, there remains significant uncertainty regarding the possible length of the COVID-19 pandemic and the aggregate impact that it will have on global and regional economies, including uncertainty regarding the effectiveness of recent efforts by the U.S. government and Federal Reserve to respond to the pandemic and its economic impact. Management considered the impact of the pandemic on its consumer and business borrowers, particularly those business borrowers most affected by efforts to contain the pandemic, including our borrowers in the retail and multi-tenant retail industry, restaurants, and hotels.

As of September 30, 2020, loans for which payment deferrals and interest-only payment modifications remained in place included approximately 250 loans with balances totaling $93.6 million, as compared to approximately 900 loans with balances totaling $380.2 million with such deferrals or modifications in place at June 30, 2020. Details by loan type are included in the table at the conclusion of this document. These are loans that were otherwise current and performing prior to the COVID-19 pandemic, but for which borrowers anticipated difficulties due to impact of the pandemic. Approximately $67.2 million in loans which remain under a payment deferral or interest-only modification at September 30, 2020, are scheduled to complete their deferral or modification period by October 31, 2020. Generally, deferrals were granted for three-month periods, while interest-only modifications were for six-month periods. Some borrowers were granted additional periods of deferral or interest-only modifications. These deferrals and modifications were made in compliance with provisions of the CARES Act that allow financial institutions the option to temporarily suspend certain requirements under U.S. GAAP related to troubled debt restructurings (TDRs), and the Company did not account for these loans as TDRs. While management considers progress made by our borrowers in responding to the pandemic to be relatively strong, and the performance of our loan portfolio to be encouraging to date, we cannot predict with certainty the difficulties to be faced in coming months as various relief provisions expire, or as communities where our borrowers operate experience increases in COVID-19 cases and reductions in business activity or employee attendance, or may be required by local authorities to restrict activity.

Total liabilities were $2.3 billion at September 30, 2020, a decrease of $3.1 million, or 0.1%, as compared to June 30, 2020.

Deposits were $2.2 billion at September 30, 2020, a decrease of $16.8 million, or 0.8%, as compared to June 30, 2020. This decrease reflected a decrease in time deposits, partially offset by an increase in nonmaturity deposits, and was inclusive of decreases of $16.9 million in public unit funds and $2.3 million in brokered time deposits. Public unit balances were $288.3 million at September 30, 2020, as public unit depositors partially reversed growth noted over recent quarters. Brokered time deposits were $21.0 million, and brokered money market deposits were $20.0 million, at September 30, 2020. In total, deposit balances saw decreases in certificates of deposit and non-interest bearing transaction accounts, partially offset by increases in savings accounts, interest-bearing transaction accounts, and money market deposit accounts. The average loan-to-deposit ratio for the first quarter of fiscal 2021 was 99.1%, as compared to 99.2% for the same period of the prior fiscal year.

FHLB advances were $85.6 million at September 30, 2020, an increase of $15.6 million, or 22.3%, as compared to June 30, 2020, with the increase primarily attributable to the Company’s use of overnight borrowings to fund increases in loans and outflows in deposits. The Company has continued to monitor the availability of the Federal Reserve’s PPP Lending Facility (PPPLF), but has not utilized it to date, given our improved liquidity position and the lack of attractive alternative investment options. Currently, the Company expects to process forgiveness applications for the majority of our outstanding PPP loans in the next several months, and will then assess the regulatory capital and liquidity considerations of the potential use of the PPPLF for any balances not forgiven and expected to remain outstanding for an additional 1.5 years or more.

The Company’s stockholders’ equity was $260.0 million at September 30, 2020, an increase of $1.6 million, or 0.6%, as compared to June 30, 2020. The increase was attributable primarily to earnings retained after cash dividends paid, partially offset by the one-time negative adjustment to retained earnings resulting from the adoption of the CECL standard.

Quarterly Income Statement Summary:

The Company’s net interest income for the three-month period ended September 30, 2020, was $22.1 million, an increase of $2.5 million, or 12.8%, as compared to the same period of the prior fiscal year. The increase was attributable to a 15.2% increase in the average balance of interest-earning assets, partially offset by a decrease in net interest margin to 3.73% in the current three-month period, from 3.81% in the same period a year ago.

Loan discount accretion and deposit premium amortization related to the Company’s August 2014 acquisition of Peoples Bank of the Ozarks (Peoples), the June 2017 acquisition of Capaha Bank (Capaha), the February 2018 acquisition of Southern Missouri Bank of Marshfield (SMB-Marshfield), the Gideon Acquisition, and the Central Federal Acquisition resulted in $339,000 in net interest income for the three-month period ended September 30, 2020, as compared to $508,000 in net interest income for the same period a year ago. The decline is attributable to expected reductions in discount accretion as additional time has elapsed since the loan portfolios were acquired and balances have declined, partially offset by the recent Central Federal acquisition, although the acquired loan book and resulting discount accretion from that acquisition is relatively small. The Company generally expects this component of net interest income will continue to decline over time, although volatility may occur to the extent we have periodic resolutions of specific credit impaired loans. Combined, these components of net interest income contributed six basis points to net interest margin in the three-month period ended September 30, 2020, as compared to a contribution of 10 basis points in the same period of the prior fiscal year, and as compared to the six basis point contribution in the linked quarter, ended June 30, 2020, when net interest margin was 3.75%. Additionally, in the year-ago and linked periods, the Company recognized additional interest income as a result of the resolution of a limited number of nonperforming loans, with no material contribution from similar resolutions in the current period. This recognition of $414,000 in interest income in the year-ago period, and $159,000 in the linked period, contributed eight and three basis points, respectively, to net interest margin in the year-ago and linked periods.

The provision for loan losses for the three-month period ended September 30, 2020, was $774,000, as compared to $896,000 in the same period of the prior fiscal year. The decrease as compared to the same quarter a year ago was attributable primarily to the current quarter’s relatively low loan growth and stable credit quality indicators quarter-over-quarter. While uncertainty remains regarding the economic environment resulting from the COVID-19 pandemic and the potential impact on the Company’s borrowers, the Company assesses that the outlook is little changed as compared to the quarter ended June 30, 2020. As a percentage of average loans outstanding, the provision for loan losses in the current three-month period represented a charge of 0.14% (annualized), while the Company recorded net charge offs during the period of 0.03% (annualized). During the same period of the prior fiscal year, the provision for loan losses as a percentage of average loans outstanding represented a charge of 0.19% (annualized), while the Company recorded net charge offs of 0.02% (annualized).

The Company’s noninterest income for the three-month period ended September 30, 2020, was $4.9 million, an increase of $1.5 million, or 41.6%, as compared to the same period of the prior fiscal year. In the current period, increases in gains realized on the sale of residential real estate loans originated for that purpose, other income, loan servicing fees, other loans fees, and bank card interchange income were partially offset by decreases in deposit account service charges. Gains realized on the sale of residential real estate loans originated for that purpose increased as origination of these loans more than tripled, remaining consistent with the linked quarter, while pricing improved slightly. Our portfolio of serviced loans increased by 16% during the quarter, which increased servicing income through fees received and the recognition of mortgage servicing rights at origination. Other income included a $187,000 non-recurring benefit related to a broker-dealer agreement to provide wealth management services in a new market area, with no comparable item in the year-ago period. Bank card interchange income increased as a result of an 8% increase in the number of bank card transactions and a 17% increase in bank card dollar volume.

Noninterest expense for the three-month period ended September 30, 2020, was $13.5 million, an increase of $1.1 million, or 9.3%, as compared to the same period of the prior fiscal year. The increase was attributable primarily to increases in compensation and benefits, provisioning for off-balance sheet credit exposure, deposit insurance premiums, data processing expenses, and occupancy, partially offset by a reduction in other expenses, which included a variety of relatively small items that trended lower, including the costs of providing rewards checking products, employee travel expenses, and customer entertainment. Included in compensation expense was $150,000 in non-recurring expense related to the hiring of an investment representative for the Company’s wealth management group; otherwise, the increase over the prior year primarily reflected standard increases in compensation and an increase in employee headcount over the prior year, due in part to the Central Federal Acquisition, as well as a de novo branch opened early in the quarter. Data processing and occupancy expenses also increased in part due to the new facilities, while data processing expenses have also been higher since the implementation of a new data processing environment in the first half of fiscal 2020. Deposit insurance premiums reflected a return to a normalized level of premiums after the Company benefited from one-time assessment credits for much of the prior fiscal year. The efficiency ratio for the three-month period ended September 30, 2020, was 50.0%, as compared to 53.6% in the same period of the prior fiscal year, with the improvement attributable primarily to the current period’s increase in noninterest income.

The income tax provision for the three-month period ended September 30, 2020, was $2.7 million, an increase of 39.0% as compared to the same period of the prior fiscal year, as higher pre-tax income combined with an increase in the effective tax rate, to 21.6%, as compared to 20.2% in the same period a year ago. While the Company generated higher levels of pre-tax income, investments in tax-advantaged assets were modestly reduced, resulting in a higher effective tax rate.

Forward-Looking Information:

Except for the historical information contained herein, the matters discussed in this press release may be deemed to be forward-looking statements that are subject to known and unknown risks, uncertainties, and other factors that could cause the actual results to differ materially from the forward-looking statements, including: potential adverse impacts to the economic conditions in the Company’s local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, generally, resulting from the ongoing COVID-19 pandemic and any governmental or societal responses thereto; expected cost savings, synergies and other benefits from our merger and acquisition activities might not be realized to the extent anticipated, within the anticipated time frames, or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected; the strength of the United States economy in general and the strength of the local economies in which we conduct operations; fluctuations in interest rates and in real estate values; monetary and fiscal policies of the FRB and the U.S. Government and other governmental initiatives affecting the financial services industry; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; our ability to access cost-effective funding; the timely development of and acceptance of our new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors' products and services; fluctuations in real estate values and both residential and commercial real estate markets, as well as agricultural business conditions; demand for loans and deposits; legislative or regulatory changes that adversely affect our business; changes in accounting principles, policies, or guidelines; results of regulatory examinations, including the possibility that a regulator may, among other things, require an increase in our reserve for loan losses or write-down of assets; the impact of technological changes; and our success at managing the risks involved in the foregoing. Any forward-looking statements are based upon management’s beliefs and assumptions at the time they are made. We undertake no obligation to publicly update or revise any forward-looking statements or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed might not occur, and you should not put undue reliance on any forward-looking statements.


Southern Missouri Bancorp, Inc.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION

Summary Balance Sheet Data as of:

Sep. 30,

June 30,

Mar. 31,

Dec. 31,

Sep. 30,

(dollars in thousands, except per share data)

2020

2020

2020

2019

2019

Cash equivalents and time deposits

$

42,850

$

55,219

$

57,078

$

42,015

$

32,394

Available for sale (AFS) securities

175,528

176,524

180,592

175,843

171,006

FHLB/FRB membership stock

11,956

10,753

13,054

12,522

12,083

Loans receivable, gross

2,185,113

2,167,067

1,991,328

1,943,599

1,895,207

Allowance for loan losses

34,650

25,138

23,508

20,814

20,710

Loans receivable, net

2,150,463

2,141,929

1,967,820

1,922,785

1,874,497

Bank-owned life insurance

43,644

43,363

39,095

38,847

38,593

Intangible assets

21,582

21,789

21,573

22,423

22,889

Premises and equipment

64,430

65,106

64,705

65,006

65,480

Other assets

30,281

27,474

30,531

32,408

34,265

Total assets

$

2,540,734

$

2,542,157

$

2,374,448

$

2,311,849

$

2,251,207

Interest-bearing deposits

$

1,861,051

$

1,868,799

$

1,738,379

$

1,691,010

$

1,663,874

Noninterest-bearing deposits

307,023

316,048

233,268

223,604

208,646

FHLB advances

85,637

70,024

123,361

114,646

103,327

Note payable

-

-

3,000

3,000

3,000

Other liabilities

11,880

13,797

11,469

15,627

15,030

Subordinated debt

15,168

15,142

15,118

15,093

15,068

Total liabilities

2,280,759

2,283,810

2,124,595

2,062,980

2,008,945

Total stockholders' equity

259,975

258,347

249,853

248,869

242,262

Total liabilities and stockholders' equity

$

2,540,734

$

2,542,157

$

2,374,448

$

2,311,849

$

2,251,207

Equity to assets ratio

10.23

%

10.16

%

10.52

%

10.76

%

10.76

%

Common shares outstanding

9,126,625

9,127,390

9,128,290

9,206,783

9,201,783

Less: Restricted common shares not vested

27,260

28,025

28,925

24,900

25,975

Common shares for book value determination

9,099,365

9,099,365

9,099,365

9,181,883

9,175,808

Book value per common share

$

28.57

$

28.39

$

27.46

$

27.10

$

26.40

Closing market price

23.58

24.30

24.27

38.36

36.43

Nonperforming asset data as of:

Sep. 30,

June 30,

Mar. 31,

Dec. 31,

Sep. 30,

(dollars in thousands)

2020

2020

2020

2019

2019

Nonaccrual loans

$

8,775

$

8,657

$

11,428

$

10,419

$

14,021

Accruing loans 90 days or more past due

-

-

-

1

-

Total nonperforming loans

8,775

8,657

11,428

10,420

14,021

Other real estate owned (OREO)

2,466

2,561

3,401

3,668

3,820

Personal property repossessed

9

9

38

26

71

Total nonperforming assets

$

11,250

$

11,227

$

14,867

$

14,114

$

17,912

Total nonperforming assets to total assets

0.44

%

0.44

%

0.63

%

0.61

%

0.80

%

Total nonperforming loans to gross loans

0.40

%

0.40

%

0.57

%

0.54

%

0.74

%

Allowance for loan losses to nonperforming loans

394.87

%

290.38

%

205.71

%

199.75

%

147.71

%

Allowance for loan losses to gross loans

1.59

%

1.16

%

1.18

%

1.07

%

1.09

%

Performing troubled debt restructurings (1)

$

7,923

$

8,580

$

14,196

$

14,814

$

12,432

(1) Nonperforming troubled debt restructurings are included with nonaccrual loans or accruing loans 90 days or more past due.



For the three-month period ended

Quarterly Average Balance Sheet Data:

Sep. 30,

June 30,

Mar. 31,

Dec. 31,

Sep. 30,

(dollars in thousands)

2020

2020

2020

2019

2019

Interest-bearing cash equivalents

$

19,768

$

10,380

$

7,363

$

6,322

$

7,001

AFS securities and membership stock

181,535

188,497

184,389

183,748

179,623

Loans receivable, gross

2,162,125

2,127,181

1,950,887

1,903,230

1,865,344

Total interest-earning assets

2,363,428

2,326,058

2,142,639

2,093,300

2,051,968

Other assets

174,574

194,651

180,981

184,028

184,415

Total assets

$

2,538,002

$

2,520,709

$

2,323,620

$

2,277,328

$

2,236,383

Interest-bearing deposits

$

1,865,637

$

1,838,606

$

1,729,327

$

1,674,198

$

1,660,994

Securities sold under agreements to repurchase

-

-

-

-

329

FHLB advances

70,272

83,130

83,916

99,728

82,192

Note payable

-

1,187

3,000

3,000

3,000

Subordinated debt

15,155

15,130

15,105

15,080

15,055

Total interest-bearing liabilities

1,951,064

1,938,053

1,831,348

1,792,006

1,761,570

Noninterest-bearing deposits

316,996

311,555

223,865

222,187

218,755

Other noninterest-bearing liabilities

14,672

15,937

17,634

17,533

16,014

Total liabilities

2,282,732

2,265,545

2,072,847

2,031,726

1,996,339

Total stockholders' equity

255,270

255,164

250,773

245,602

240,044

Total liabilities and stockholders' equity

$

2,538,002

$

2,520,709

$

2,323,620

$

2,277,328

$

2,236,383




For the three-month period ended

Quarterly Summary Income Statement Data:

Sep. 30,

June 30,

Mar. 31,

Dec. 31,

Sep. 30,

(dollars in thousands, except per share data)

2020

2020

2020

2019

2019

Interest income:

Cash equivalents

$

41

$

18

$

33

$

31

$

46

AFS securities and membership stock

1,024

1,146

1,218

1,194

1,236

Loans receivable

25,907

26,099

24,969

25,421

25,640

Total interest income

26,972

27,263

26,220

26,646

26,922

Interest expense:

Deposits

4,390

4,923

6,135

6,448

6,578

FHLB advances

380

398

439

573

522

Note payable

-

11

31

34

37

Subordinated debt

138

151

197

214

225

Total interest expense

4,908

5,483

6,802

7,269

7,362

Net interest income

22,064

21,780

19,418

19,377

19,560

Provision for loan losses

774

1,868

2,850

388

896

Noninterest income:

Deposit account charges and related fees

1,339

1,087

1,538

1,632

1,423

Bank card interchange income

830

954

719

651

751

Loan late charges

141

157

149

121

146

Loan servicing fees

310

248

(285

)

103

130

Other loan fees

327

290

370

354

243

Net realized gains on sale of loans

1,206

977

178

203

273

Earnings on bank owned life insurance

280

266

247

253

254

Other noninterest income

508

380

313

357

270

Total noninterest income

4,941

4,359

3,229

3,674

3,490

Noninterest expense:

Compensation and benefits

7,720

7,698

7,521

6,993

7,125

Occupancy and equipment, net

1,970

1,887

1,780

1,769

1,852

Data processing expense

1,062

2,084

974

878

885

Telecommunications expense

315

314

309

320

320

Deposit insurance premiums

201

155

-

-

-

Legal and professional fees

198

318

229

239

184

Advertising

230

391

244

283

309

Postage and office supplies

193

219

224

178

183

Intangible amortization

380

448

441

441

441

Foreclosed property expenses

50

636

282

25

48

Provision for off-balance sheet credit exposure

226

132

300

362

(146

)

Other noninterest expense

953

1,226

1,265

1,537

1,149

Total noninterest expense

13,498

15,508

13,569

13,025

12,350

Net income before income taxes

12,733

8,763

6,228

9,638

9,804

Income taxes

2,747

1,861

1,129

1,921

1,976

Net income

9,986

6,902

5,099

7,717

7,828

Less: distributed earnings to participating securities

4

-

-

-

-

Less: undistributed earnings to participating securities

26

-

-

-

-

Net income available to common shareholders

$

9,956

$

6,902

$

5,099

$

7,717

$

7,828

Basic earnings per common share

$

1.09

$

0.76

$

0.55

$

0.84

$

0.85

Diluted earnings per common share

1.09

0.76

0.55

0.84

0.85

Dividends per common share

0.15

0.15

0.15

0.15

0.15

Average common shares outstanding:

Basic

9,100,000

9,128,000

9,197,000

9,202,000

9,232,000

Diluted

9,101,000

9,130,000

9,205,000

9,213,000

9,244,000

Return on average assets

1.57

%

1.10

%

0.88

%

1.36

%

1.40

%

Return on average common stockholders' equity

15.6

%

10.8

%

8.1

%

12.6

%

13.0

%

Net interest margin

3.73

%

3.75

%

3.63

%

3.70

%

3.81

%

Net interest spread

3.55

%

3.56

%

3.40

%

3.47

%

3.58

%

Efficiency ratio

50.0

%

59.3

%

59.9

%

56.5

%

53.6

%



As of September 30, 2020

As of June 30, 2020

Loan portfolio balances and CARES Act modifications

Balance

Payment

Interest-only

Payment

Interest-only

(dollars in thousands)

Outstanding

Deferrals

Modifications

Deferrals

Modifications

1- to 4-family residential loans

$

438,496

$

1,171

$

8,805

$

13,385

$

21,194

Multifamily residential loans

196,997

-

12,278

1,912

28,101

Total residential loans

635,493

1,171

21,083

15,297

49,295

1- to 4-family owner-occupied construction loans

25,053

-

-

-

-

1- to 4-family speculative construction loans

11,961

-

-

-

-

Multifamily construction loans

39,102

-

-

-

31

Other construction loans

30,229

4,367

-

4,367

290

Total construction loan balances drawn

106,345

4,367

-

4,367

321

Agricultural real estate loans

182,602

1,967

1,415

2,803

5,537

Loans for vacant land - developed, undeveloped, and other purposes

58,015

-

1,203

106

4,196

Owner-occupied commercial real estate loans to:

Churches and nonprofits

19,900

-

1,449

-

4,213

Non-professional services

16,826

-

2,106

333

3,160

Retail

25,337

-

1,257

3,285

3,960

Automobile dealerships

21,544

-

-

-

3,977

Healthcare providers

7,869

-

330

-

334

Restaurants

46,161

-

5,694

22,988

10,745

Convenience stores

22,550

-

1,303

-

14,817

Automotive services

7,428

-

244

-

1,509

Manufacturing

18,669

-

7,262

4,938

3,140

Professional services

14,113

-

354

248

719

Warehouse/distribution

4,516

-

-

485

-

Grocery

5,548

-

26

-

26

Other

21,813

-

551

-

2,417

Total owner-occupied commercial real estate loans

232,274

-

20,576

32,277

49,017

Non-owner-occupied commercial real estate loans to:

Care facilities

33,246

-

-

-

15,943

Non-professional services

14,442

-

3,864

-

3,864

Retail

33,471

545

525

3,125

1,537

Healthcare providers

19,633

-

442

-

1,489

Restaurants

47,875

-

413

17,418

5,839

Convenience stores

8,983

-

-

-

1,285

Automotive services

7,173

-

-

-

-

Hotels

80,947

-

3,495

39,622

26,092

Manufacturing

5,170

-

-

-

2,011

Storage units

14,210

-

404

-

3,711

Professional services

12,084

-

460

-

723

Multi-tenant retail

77,428

-

14,872

21,817

35,791

Warehouse/distribution

26,146

-

2,953

141

3,809

Other

30,927

-

4,218

-

8,055

Total non-owner-occupied commercial real estate loans

411,735

545

31,646

82,123

110,149

Total commercial real estate

884,626

2,512

54,840

117,309

168,899



As of September 30, 2020

As of June 30, 2020

Loan portfolio balances and CARES Act modifications, continued

Balance

Payment

Interest-only

Payment

Interest-only

(dollars in thousands)

Outstanding

Deferrals

Modifications

Deferrals

Modifications

Home equity lines of credit

42,523

-

-

91

-

Deposit-secured loans

4,803

-

1

45

1

All other consumer loans

33,580

83

92

1,319

199

Total consumer loans

80,906

83

93

1,455

200

Agricultural production and equipment loans

121,298

351

84

400

586

Loans to municipalities or other public units

10,087

-

-

-

-

Commercial and industrial loans to:

-

-

-

Forestry, fishing, and hunting

14,621

-

364

50

612

Construction

29,100

-

-

125

148

Finance and insurance

49,984

-

20

-

20

Real estate rental and leasing

27,198

-

54

-

1,299

Healthcare and social assistance

38,230

-

-

-

1,576

Accommodations and food services

31,772

-

707

175

2,595

Manufacturing

15,801

-

3,097

-

3,271

Retail trade

46,488

-

874

1,189

1,512

Transportation and warehousing

37,787

-

3,071

194

5,636

Professional services

8,762

-

12

-

12

Administrative support and waste management

9,164

-

-

-

1,962

Arts, entertainment, and recreation

4,274

585

27

732

27

Other commercial loans

37,016

8

238

179

741

Total commercial and industrial loans

350,197

593

8,464

2,644

19,411

Total commercial loans

481,582

944

8,548

3,044

19,997

Total gross loans receivable, excluding deferred loan fees

$

2,188,952

$

9,077

$

84,564

$

141,472

$

238,712


CONTACT: Matt Funke, CFO 573-778-1800