SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
__________
FORM 10-QSB
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-23406
Southern Missouri Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Delaware 43-1665523
(State or jurisdiction of incorporation) (IRS employer id. no.)
531 Vine Street Poplar Bluff, MO 63901
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 573-785-1421
Not Applicable
Former name, former address and former fiscal year, if changed
since last report.
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date: 1,637,913 as of January 31, 1997.
<PAGE>
SOUTHERN MISSOURI BANCORP, INC.
FORM 10-QSB
FOR THE QUARTER ENDED DECEMBER 31, 1996
INDEX
Page No.
PART I - Financial Information
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Financial Condition 1
Consolidated Statements of Income 2
Consolidated Statements of Cash Flows 3-4
Notes to Consolidated Financial Statements 5
(Unaudited)
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 6-12
PART II - Other Information
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults upon Senior Securities 13
Item 4. Submission of Matters to a
Vote of Security-Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 14
<PAGE>
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
December 31, June 30,
ASSETS 1996 1996
Cash and cash equivalents $ 5,627,388 4,477,872
Certificates of deposit 91,355 186,512
Investment and mortgage-backed and
related securities:
Available for sale - at estimated
market value (amortized cost of
$42,246,318 and $50,615,727 at
December 31, 1996 and June 30, 1996,
respectively) 42,244,939 49,980,348
Held to maturity - at amortized cost
(estimated market value of $4,902,906
and $4,888,427 at December 31, 1996
and June 30, 1996, respectively) 4,831,267 4,851,454
Stock in Federal Home Loan Bank
of Des Moines 1,519,700 1,519,700
Loans receivable, net 102,128,136 95,534,657
Accrued interest receivable 1,011,506 1,141,099
Foreclosed real estate, net 151,585 60,133
Premises and equipment 1,646,825 1,411,247
Prepaid expenses and other assets 400,407 684,701
Total assets $ 159,653,108 159,847,723
See accompanying notes to consolidated financial statements.
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
December 31, June 30,
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1996
Deposits $ 118,738,220 120,138,066
Advances from borrowers for taxes
and insurance 135,980 353,895
Advances from FHLB of Des Moines 13,543,050 11,550,478
Income taxes payable 132,693 136,210
Accounts payable and other liabilities 418,738 459,971
Accrued interest payable 870,879 981,809
Total liabilities 133,839,560 133,620,429
Commitments and contingencies
Preferred stock, $.01 par value;
500,000 shares authorized; none
issued and outstanding - -
Common stock, $.01 par value;
3,000,000 shares authorized;
1,803,201 shares issued and
outstanding 18,032 18,032
Additional paid-in capital 17,492,420 17,449,978
Retained earnings -
substantially restricted 12,133,644 12,192,583
Treasury stock of 165,388 shares at
December 31, 1996 and 102,188
shares at June 30, 1996, at cost (2,674,618) (1,691,030)
Common stock acquired by ESOP (816,183) (918,207)
Common stock acquired by MRP (332,973) (397,972)
Unrealized loss on investment and
mortgage-backed securities
available for sale (469) (419,785)
Minimum pension liability (6,305) (6,305)
Total stockholders' equity 25,813,548 26,227,294
Total liabilities and
stockholders' equity $ 159,653,108 159,847,723
See accompanying notes to consolidated financial statements.
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
December 31,
1996 1995
Interest income:
Loans receivable $ 2,002,973 1,803,557
Investment securities 256,879 477,472
Mortgage-backed and related securities 548,215 369,441
Other interest-earning assets 14,568 36,128
Total interest income 2,822,635 2,686,598
Interest expense:
Deposits 1,368,068 1,483,873
Advances from FHLB of Des Moines 170,409 93,758
Total interest expense 1,538,477 1,577,631
Net interest income 1,284,158 1,108,967
Provision for loan losses 22,500 15,000
Net interest income after
provision for loan losses 1,261,658 1,093,967
Noninterest income:
Gain on sale of investment
securities, available for sale 53,389 12,536
Gain (loss) on sale of mortgage-backed
securities, available for sale (53,424) 4,440
Gain on sale of mortgage-backed
securities, held to maturity - -
Insurance commissions 92,668 85,161
Banking service charges 46,471 38,214
Net income on foreclosed real estate (9,214) (7,818)
Loan late charges 13,705 10,305
Other 5,958 2,530
Total noninterest income 149,553 145,368
Noninterest expense:
Compensation and benefits 502,335 514,380
Occupancy and equipment 78,808 69,399
SAIF special assessment - -
SAIF deposit insurance premium 69,858 68,722
Gain on foreclosed real estate, net (14,738) 4,698
Professional fees 36,603 42,774
Advertising 27,111 23,037
Postage and office supplies 28,513 25,783
Other 77,219 76,339
Total noninterest expense 805,709 825,132
Income before income taxes 605,502 414,203
Income taxes 180,950 111,181
Net income $ 424,552 303,022
Earnings per share $ .27 .18
Dividends per share $ .125 .125
See accompanying notes to consolidated financial statements.
<PAGE>
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Six Months Ended
December 31,
1996 1995
Interest income:
Loans receivable $ 3,952,695 3,445,320
Investment securities 601,560 1,003,131
Mortgage-backed and related securities 1,114,461 767,628
Other interest-earning assets 29,967 83,990
Total interest income 5,698,683 5,300,069
Interest expense:
Deposits 2,780,534 2,994,609
Advances from FHLB of Des Moines 340,086 110,278
Total interest expense 3,120,620 3,104,887
Net interest income 2,578,063 2,195,182
Provision for loan losses 40,000 30,000
Net interest income after
provision for loan losses 2,538,063 2,165,182
Noninterest income:
Gain on sale of investment
securities, available for sale 53,389 75,633
Gain (loss) on sale of mortgage-backed
securities, available for sale (53,424) (53,057)
Gain on sale of mortgage-backed securities,
held to maturity - 9,261
Insurance commissions 182,374 157,620
Banking service charges 85,116 74,312
Net income on foreclosed real estate (11,746) (10,468)
Loan late charges 24,247 20,153
Other 13,868 5,462
Total noninterest income 293,824 278,916
Noninterest expense:
Compensation and benefits 1,058,084 1,047,212
Occupancy and equipment 158,633 159,621
SAIF special assessment 779,184 -
SAIF deposit insurance premium 140,180 136,915
Gain on foreclosed real estate, net (18,160) (33,753)
Professional fees 60,711 74,243
Advertising 49,463 47,171
Postage and office supplies 51,689 52,696
Other 141,511 140,528
Total noninterest expense 2,421,295 1,624,633
Income before income taxes 410,592 819,465
Income taxes 84,287 214,356
Net income 326,305 605,109
Earnings per share $ .21 .36
Dividends per share $ .250 .250
See accompanying notes to consolidated financial statements.
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
December 31,
1996
Cash flows from operating activities:
Net income $ 326,305
Items not requiring (providing) cash:
Depreciation and amortization 83,409
MRP expense and ESOP expense 209,465
Gain on sale of investment securities -
available for sale (53,389)
Loss on sale of mortgage-backed
securities - available for sale 53,424
Gain on sale of mortgage-backed
securities - held to maturity -
Provision for loan losses 40,000
FHLB stock dividend -
Gain on foreclosed real estate, net (18,160)
Net amortization of deferred income,
premiums, and discounts 58,393
Changes in:
Accrued interest receivable 129,593
Prepaid expenses and other assets 284,294
Accounts payable and other liabilities (41,233)
Federal income taxes payable (3,517)
Accrued interest payable (110,930)
Net cash provided by operating activities 957,654
Cash flows from investing activities:
Net increase in loans (6,867,375)
Proceeds from sales of investment
securities, available for sale 1,578,200
Proceeds from maturing investment
securities, available for sale 3,538,955
Proceeds from maturing investment
securities, held to maturity 30,000
Purchase of investment securities,
available for sale -
Purchase of investment securities,
held to maturity -
Proceeds from sales of mortgage-backed
securities - held to maturity -
Proceeds from sales of mortgage-backed
securities, available for sale 639,376
Proceeds from maturing mortgage-backed
securities, available for sale 2,453,518
Proceeds from maturing mortgage-backed
securities, held to maturity 16,860
Purchase of mortgage-backed securities,
available for sale -
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Proceeds from maturing certificates
of deposit 95,000
Purchase of premises and equipment (303,351)
Proceeds from sale of foreclosed real estate 4,700
Net cash used in investing activities 1,185,883
Cash flows from financing activities:
Net (decrease) increase in deposits $(1,399,846)
Net decrease in advances from
borrowers for taxes and insurance (217,915)
Net increase in advances from
FHLB of Des Moines 1,992,572
Dividends on common stock (385,244)
Payments to acquire treasury stock (983,588)
Net cash provided by
financing activities (994,021)
Increase (decrease) in cash and
cash equivalents 1,149,516
Cash and cash equivalents at
beginning of period 4,477,872
Cash and cash equivalents
at end of period $ 5,627,388
Supplemental disclosures of
cash flow information:
Noncash investing and financing activities
Conversion of loans to foreclosed
real estate $ 132,446
Conversion of foreclosed real
estate to loans $ 39,100
Cash paid during the period for
Interest (net of interest credited) $ 1,063,670
Income taxes $ 8,500
See accompanying notes to consolidated financial statements
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
December 31,
1995
Cash flows from operating activities:
Net income 605,109
Items not requiring (providing) cash:
Depreciation and amortization 95,596
MRP expense and ESOP expense 232,266
Gain on sale of investment securities -
available for sale (75,633)
Loss on sale of mortgage-backed
securities - available for sale 53,057
Gain on sale of mortgage-backed
securities - held to maturity ( 9,261)
Provision for loan losses 30,000
FHLB stock dividend (30,000)
Gain on foreclosed real estate, net (33,753)
Net amortization of deferred income,
premiums, and discounts 106,755
Changes in:
Accrued interest receivable 66,441
Prepaid expenses and other assets 120,686
Accounts payable and other liabilities (5,974)
Federal income taxes payable 130,686
Accrued interest payable 122,092
Net cash provided by operating activities 1,408,067
Cash flows from investing activities:
Net increase in loans (5,215,700)
Proceeds from sales of investment
securities, available for sale 5,903,998
Proceeds from maturing investment
securities, available for sale 3,295,000
Proceeds from maturing investment
securities, held to maturity 2,900,000
Purchase of investment securities,
available for sale (3,889,062)
Purchase of investment securities,
held to maturity (500,000)
Proceeds from sales of mortgage-backed
securities - held to maturity 978,784
Proceeds from sales of mortgage-backed
securities, available for sale 3,430,168
Proceeds from maturing mortgage-backed
securities, available for sale 1,375,759
Proceeds from maturing mortgage-backed
securities, held to maturity 1,055,216
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Purchase of mortgage-backed securities,
available for sale (16,021,007)
Proceeds from maturing certificates
of deposit -
Purchase of premises and equipment (64,847)
Proceeds from sale of foreclosed real estate 74,500
Net cash used in investing activities (6,677,191)
Cash flows from financing activities:
Net (decrease) increase in deposits $ 1,451,674
Net decrease in advances from
borrowers for taxes and insurance (307,105)
Net increase in advances from
FHLB of Des Moines 10,243,142
Dividends on common stock (416,497)
Payments to acquire treasury stock (1,321,900)
Net cash provided by financing activities 9,649,314
Increase (decrease) in cash and
cash equivalents 4,380,190
Cash and cash equivalents at
beginning of period 2,985,898
Cash and cash equivalents
at end of period $ 7,366,088
Supplemental disclosures of
cash flow information:
Noncash investing and financing activities
Conversion of loans to foreclosed
real estate $ 15,000
Conversion of foreclosed real
estate to loans $ 18,000
Cash paid during the period for
Interest (net of interest credited) $ 1,002,332
Income taxes $ 88,000
See accompanying notes to consolidated financial statements
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) The information contained in the accompanying consolidated
financial statements is unaudited. In the opinion of
management, the financial statements contain all adjustments
(none of which were other than normal recurring accruals)
necessary for a fair statement of the results of operations
for the interim periods. These financial statements should
be read in conjunction with the audited consolidated financial
statements contained in the Company's 1996 Annual Report to
Stockholders. The results of operations for the three and
six month periods ended December 31, 1996 are not necessarily
indicative of the results of operations for the entire
fiscal year.
<PAGE>
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
On April 13, 1994, Southern Missouri Savings Bank (Savings Bank)
completed its conversion from mutual to stock form and became a
wholly-owned subsidiary of a newly formed Delaware holding
company,Southern Missouri Bancorp, Inc. (Company). The Company sold
1,785,375 shares of common stock at $10 per share in conjunction
with the subscription offering to the Savings Bank Employee Stock
Ownership Plan (ESOP), eligible account holders and other members
of the Savings Bank. In addition, 17,826 shares of authorized
common stock were granted to the Savings Bank's Management
Recognition Plan to fulfill its order in the subscription
offering. Net proceeds of the sale of common stock in the subscription
offering were $15,160,161, after deduction of conversion costs of
$729,369. The Company retained 50% of the net conversion
proceeds less the funds used to make the ESOP loan to the Savings Bank for
the purchase of shares of common stock for the Savings Bank's
ESOP and used the balance of the net proceeds to purchase all of the
stock of the Savings Bank in the conversion.
Certain statements in this report which relate to the Company's
plans, objectives or future performance may be deemed to be
forward-looking statements within the meaning of Private
Securities Litigation Act of 1995. Such statements are based on
management's current expectations. Actual strategies and results in future
periods may differ materially from those currently expected
because of various risks and uncertainties. Additional discussion of
factors affecting the Company's business and prospects is
contained in periodic filings with the Securities and Exchange Commission.
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Supervisory Agreement and Regulatory Matters
On December 21, 1994, the Savings Bank voluntarily entered into a
Supervisory Agreement with the Office of Thrift Supervision
(OTS), its primary federal regulator. The Supervisory Agreement
generally concerns the Savings Bank's investment portfolio and, more
specifically, focuses on the reporting, monitoring, and
assessment of interest rate risk in connection with the Savings Bank's
portfolio of collateralized mortgage obligations (CMO's). In an
effort to comply with the Supervisory Agreement, the Savings Bank
has hired a Chief Financial Officer who serves primarily as a
senior investment officer. In addition, the Savings Bank revised
its Investment Policy to conform more closely to the OTS's policy
on securities activities and implemented additional procedures to
review the investment activities and monitor interest rate risk
management. The regulatory examination of the Savings Bank
conducted during the fourth quarter of 1996 noted noncompliance
with the Supervisory Agreement, and numerous additional actions
required by management to achieve compliance and improve the
operations of the Savings Bank. Among the actions being taken by
management is a review of the activities in borrower's escrow
accounts to determine whether a material amount of escrowed funds
has been used to make payments of principal and interest rather
than to pay taxes and insurance. Failure to achieve compliance
with the Supervisory Agreement could lead to further regulatory
enforcement actions, including the assessment of civil money
penalties against the Savings Bank and/or its officers and
directors. The Supervisory Agreement will remain in effect until
it is terminated by the OTS. As a result of the Savings Bank's
current regulatory status, the Savings Bank will no longer be
eligible for the lowest assessment rate for deposit insurance.
Consequently, the previously anticipated reduction will not
occur. Instead, the assessment rate is expected to increase somewhat
beginning June 30, 1997.
In a letter dated October 20, 1995, addressed to the Board of
Directors of the Savings Band, the OTS stated: "Southern
Missouri Savings Bank continues to be designated a `problem' institution
and in need of more than normal supervision. Accordingly, the
institution is subject to the provisions of Regulatory Bulletin
No. 3a-1 governing growth and to other restrictions and requirements
in various other OTS regulations and memoranda." Regulatory
Bulletin No. 3a-1 states, in pertinent part: "As a general rule,
associations `requiring more than normal supervision' . . . will
be permitted little to no growth under this policy, subject to
District Director discretion and waiver authority . . . Without
the prior written approval of the District Director, any association
requiring more than normal supervision shall not increase its
total assets during any quarter in excess of an amount equal to net
interest credited on deposit liabilities (or earnings credited on
8
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
share accounts) during the quarter." The continued existence of
growth restrictions could have a material effect on the
operations of the Savings Bank and, consequently, on the operations of the
Company.
Liquidity and Capital Resources
The Savings Bank's principal sources of funds are cash receipts
from deposits, loan repayments by borrowers, and net income. The
Savings Bank has an agreement with the Federal Home Loan Bank of
Des Moines (FHLB of Des Moines) to provide cash advances, should
the need for additional funds be required. Commitments to
originate fixed rate and adjustable-rate mortgage loans at
December 31, 1996 were approximately $239,000 and $2,849,000,
respectively.
For regulatory purposes, liquidity is measured as a ratio of cash
and certain investments to withdrawable deposits and short term
borrowings. The minimum level of liquidity required by OTS
regulation is presently 5%. The Savings Bank's liquidity ratio
was approximately 10.6% at December 31, 1996. The Savings Bank
maintains a high level of liquidity as a matter of management
philosophy in order to more closely match interest-sensitive
assets with interest-sensitive liabilities.
The savings and loan industry historically has accepted interest
rate risk as a part of its operating philosophy. Long-term,
fixed-rate loans were funded with deposits which adjust to market
interest rates more frequently. In recent years, the Savings
Bank has originated primarily mortgage loans which permit adjustment
of the interest rate after an initial term of one to three years in
order to reduce inherent interest rate risk.
Investment and mortgage-backed and related securities with a
carrying value of $42,245,000 are classified as available for
sale at December 31, 1996. Such securities are carried at fair value
and can be liquidated with no further impact on capital. The
Company's unrealized gains and losses on investment and mortgage-
backed and related securities net, of applicable income taxes,
are recorded in stockholders' equity.
The Savings Bank must maintain core capital equal to 3% of
adjusted total assets and maintain tangible capital equal to 1.5% of
adjusted total assets. The Savings Bank must maintain an 8%
risk-based capital.
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following table presents the Savings Bank's capital position
relative to its regulatory capital requirements at December 31,
1996:
Unaudited Regulatory Capital
Tangible
Stockholders' equity per
consolidated financial statements $ 25,813,548
Stockholders' equity of Southern
Missouri Bancorp, Inc. not available
for regulatory capital purposes (5,474,409)
GAAP capital 20,339,139
General valuation allowances -
Non-includable unrealized loss on
investment and mortgage-backed and
related securities available for sale 30,196
Non-includable deferred tax assets (208,556)
Non-includable intangible assets (71,670)
Regulatory capital 20,089,109
Regulatory capital requirement (2,326,000)
Regulatory capital - excess $ 17,763,109
Regulatory capital ratio 12.95%
Regulatory capital requirement 1.50
Regulatory capital ratio - excess 11.45%
Unaudited Regulatory Capital
Core Risk-Based
Stockholders' equity per
consolidated financial statements $ 25,813,548 25,813,548
Stockholders' equity of Southern
Missouri Bancorp, Inc. not available
for regulatory capital purposes (5,474,409) (5,474,409)
GAAP capital 20,339,139 20,339,139
General valuation allowances - 661,539
Non-includable unrealized loss on
investment and mortgage-backed and
related securities available for sale 30,196 30,196
Non-includable deferred tax assets (208,556) (208,556)
Non-includable intangible assets (71,670) (71,670)
Regulatory capital 20,089,109 20,750,648
Regulatory capital requirement (4,659,000) (6,325,000)
Regulatory capital - excess $15,430,109 14,425,648
Regulatory capital ratio 12.95% 26.24%
Regulatory capital requirement 3.00 8.00
Regulatory capital ratio - excess 9.95% 18.24%
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS -Continued
Financial Condition
Total assets decreased slightly from $159,848,000 at June 30,
1996 to $159,653,000 at December 31, 1996. Cash flows from sales,
maturities and prepayments of securities, and advances from the
FHLB of Des Moines were used to originate loans and fund
deposits. The Savings Bank intends to borrow from the FHLB when the cost of
such borrowings is less than the overall cost of retail deposits.
Premises and equipment increased due to the ongoing remodeling of
the main banking facility, and an automatic teller machine added
to the Van Buren, Missouri, branch. Foreclosed real estate, net,
increased due to foreclosure of certain loans. Advances by
borrowers for taxes and insurance decreased since real estate
taxes are paid on behalf of borrowers in December of each year.
Accrued interest payable decreased due to the timing of interest payments
on certificates of deposit. Additional paid-in capital and
common stock acquired by the ESOP and MRP changed as a result of the
recognition of shares committed to be released for the ESOP and
MRP. Unrealized loss on investment securities and
mortgage-backed and related securities available for sale, net of income tax
changed from a loss of $420,000 at June 30, 1996 to none at
December 31, 1996. The balance is expected to fluctuate in the
future based on changes in interest rates, as well as the amount
and maturities of securities and mortgage-backed securities
available for sale.
COMPARISON OF OPERATING RESULTS FOR THE THREE AND SIX MONTHS
ENDED DECEMBER 31, 1996 AND 1995
Net Income
Net income for the three-months ended December 31, 1996 was
$425,000 compared with $303,000 for the three-months ended
December 31, 1995. Net income for the six months ended December 31, 1996
was $326,000 compared with $605,000 for the six months ended
December 31, 1995.
Net Interest Income
Net interest income increased from $1.11 million for the three
months ended December 31, 1995 to $1.28 million for the
comparable three month period in 1996. Net interest income increased from
$2.20 million for the six months ended December 31, 1995 to $2.58
million for the comparable six month period in 1996. Net
interest income increased due to a higher interest rate spread.
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Interest Income
Interest income was $2.69 million for the three-months ended
December 31, 1995 compared with $2.82 million for the comparable
three month period in 1996. Interest income was $5.30 million
for the six months ended December 31, 1995 compared with $5.70
million for the comparable six month period in 1996.
Interest on loans receivable increased for both the three months
and six months periods ended December 31, 1996 compared to the
1995 periods as a result of higher average loans outstanding for 1996,
offset by a slightly lower yield. The weighted-average rate on
loans decreased from 7.79% at December 31, 1995 to 7.73% at
December 31, 1996. Interest on mortgage-backed securities (MBSs)
increased due to a higher average balance in the three and six
month periods ended December 31, 1996 compared to the 1995
periods, offset by lower weighted-average yield on repricing of
adjustable-rate MBSs. The weighted-average rate on MBSs decreased from
7.09% at December 31, 1995 to 6.67% at December 31, 1996. Interest on
investment securities decreased due to lower interest rates and
lower average balances. The weighted-average rate on investment
securities decreased from 6.53% at December 31, 1995 to 6.33% at
December 31, 1996.
Interest on other interest-earning assets decreased due to lower
average balance and lower interest rates on overnight funds and
short term deposits. The components of interest-bearing assets
change from time to time based on the availability and interest
rates of loans, investment securities, and MBSs.
Interest Expense
Interest expense decreased due to lower interest rates offset by
slightly higher average balances. The weighted-average rate on
interest-bearing liabilities was 4.90% at December 31, 1995 as
compared to 4.67% at December 31, 1996.
Provision for Loan Losses
Provision for loan losses are charged to earnings to bring the
total allowance for loan losses to a level considered adequate by
management to provide for loan losses based on prior loss
experience, known and inherent risks in the portfolio, adverse
situations that may affect the borrower's ability to repay, the
estimated value of any underlying collateral and current economic
conditions. Management also considers other factors relating to
the collectibility of the Savings Bank's loan portfolio.
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
For the three months ended December 31, 1996, the Savings Bank
established a provision for loan losses of $23,000 compared with
$15,000 for the three months ended December 31, 1995. For the
six months ended December 31, 1996, the Savings Bank established a
provision for loan losses of $40,000 compared with $30,000 for
the six months ended December 31, 1995.
The book value of nonaccrual loans at December 31, 1996 was
$822,000 compared to $546,000 at June 30, 1996. The average
balance of nonaccrual loans for the six months ended December 31,
1996 was approximately $898,000. Allowance for losses on nonaccrual
loans amounted to approximately $41,000 at December 31, 1996.
For the three months and six months ended December 31, 1996,
gross interest income which would have been recorded had
nonaccrual loans been current in accordance with their original
terms amounted to approximately $16,000 and $21,000, respectively.
The amount of interest income included in the Company's net
earnings for the three months and six months ended December 31,
1996 was approximately $9,000 and $23,000, respectively.
Noninterest Income
Noninterest income increased from $145,000 for the three months
ended December 31, 1995 to $150,000 for 1996. Noninterest income
increased from $279,000 for the six months ended December 31,1995
to $294,000 for 1996. The Savings Bank realized net gains on
sales of securities and MBSs of $17,000 for the three months ended
December 31, 1995, compared to none in 1996. Such gains were
$32,000 for the six months ended December 31, 1995, compared to
none in 1996. Gains on sales of securities and MBSs are not a
stable source of income and no assurance can be given that the
Savings Bank will generate such gains in the future. Gain on
sale of MBSs held to maturity relate to small balance pools, which are
permitted to be sold prior to maturity under Statement of
Financial Accounting Standards No. 115.
Commissions on insurance increased for both the three and six
months ended December 31, 1996 over the comparable periods in
1995 due to increased activity. Banking service charges increased for
both periods in 1996 over 1995 periods due to increased checking
account activity. Miscellaneous income increased for both
periods in 1996 over the 1995 periods due to fees received from the new
automatic teller machines installed within the past year.
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
Noninterest Expense
Noninterest expense decreased from $825,000 for the three months
ended December 31, 1995 to $806,000 for the three months ended
December 31, 1996. Noninterest expense increased from $1.62
million for the six months ended December 31, 1995 to $2.42
million for the six months ended December 31, 1996.
Compensation and benefits decreased for the three month period in
1996 over 1995 due to lower ESOP expense and lower bonuses
partially offset by salary increases. Compensation and benefits
increased for the six month period in 1996 over 1995 due to
salary increases, partially offset by lower bonuses and ESOP expense.
Under generally accepted accounting principles, expense of the
ESOP is affected by changes in the market price of the Company's
stock, which has been lower during 1996 as compared to 1995. ESOP
expense will fluctuate in the future based on changes in the market price
of the Company's stock. Occupancy and equipment increased for
the three month period ended December 31, 1996 over the comparable
period in 1995 as a result of higher repair and maintenance
charges.
The SAIF special assessment recorded for the six month period
ended December 31, 1996 is a result of legislation enacted September
30,1996 to recapitalize the Savings Association Insurance Fund. The
Savings Bank was assessed .657% of deposits at March 31, 1995.
The assessment of $779,000 was paid on November 28, 1996.
Income Taxes
Income tax expense increased from $111,000 for the three months
ended December 31, 1995 to $181,000 for 1996 due to an increase
in income before income taxes. Income taxes decreased from $214,000
for the six months ended December 31, 1995 to $84,000 for 1996.
This decrease is a result of the lower income before income taxes
for this period. The effective rate of income taxes is affected
by the relationship of nontaxable municipal interest income to
income before income taxes.
<PAGE>
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
There are no material legal proceedings to which the Holding
Company or the Savings Bank is a party or of which any of
their property is subject. From time to time, the Savings
Bank is a party to various legal proceedings incident to its
business.
Item 2 - Changes in Securities
None
Item 3 - Defaults upon Senior Securities
Not applicable
Item 4 - Submission of Matters to a Vote of Security-Holders
The Annual Meeting of Stockholders of the Company (Meeting)
was held on October 28, 1996. The results of the vote on
the matters presented at the Meeting are as follows:
1. The following individuals were elected as directors,
each for a three-year term:
Vote For Vote Withheld
Robert A. Seifert 1,403,592 55,801
James W. Tatum 1,403,592 55,801
The terms of Directors Samuel H. Smith, Thadis R.
Seifert, Leonard W. Ehlers, and Donald R. Crandell
continued after the meeting.
Broker non-votes totalled 0 .
Item 5 - Other Information
None
SOUTHERN MISSOURI BANCORP, INC. AND SUBSIDIARY
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits: none
(b) Reports on Form 8-K: No reports on Form 8-K have been
filed during the quarter for which this report is
filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SOUTHERN MISSOURI BANCORP,INC.
(Registrant)
Date: February 12, 1997 BY: Donald R. Crandell
Donald R. Crandell,
Chief Executive Officer
Chief Financial Officer and
Duly Authorized Officer
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<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 5,627,388
<INT-BEARING-DEPOSITS> 91,355
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