SMBC

SOUTHERN MISSOURI BANCORP INC

Financial Services | Small Cap

$1.17

EPS Forecast

$43.08

Revenue Forecast

Announcing earnings for the quarter ending 2024-09-30 soon
EX-99 2 ex991.htm EXHIBIT 99.1 -- PRESS RELEASE DATED APRIL 29, 2020

 

Picture 1 


FOR IMMEDIATE RELEASE

Contact: Matt Funke, CFO

April 29, 2020

(573) 778-1800

 

SOUTHERN MISSOURI BANCORP REPORTS PRELIMINARY RESULTS FOR THIRD QUARTER OF FISCAL 2020;

DECLARES QUARTERLY DIVIDEND OF $0.15 PER COMMON SHARE;

CONFERENCE CALL SCHEDULED FOR THURSDAY, APRIL 30, AT 12:00 NOON CENTRAL TIME

 

Poplar Bluff, Missouri - Southern Missouri Bancorp, Inc. (“Company”) (NASDAQ: SMBC), the parent corporation of Southern Bank (“Bank”), today announced preliminary net income available to common stockholders for the third quarter of fiscal 2020 of $5.1 million, a decrease of $2.0 million, or 28.1%, as compared to the same period of the prior fiscal year. The decrease was attributable to increases in the provision for loan losses and noninterest expense, and decreased noninterest income, partially offset by an increase in net interest income and a decrease in the provision for income taxes. Preliminary net income was $.55 per fully diluted common share for the third quarter of fiscal 2020, a decrease of $.21 as compared to the $.76 per fully diluted common share reported for the same period of the prior fiscal year.

 

Highlights for the third quarter of fiscal 2020:

 

Annualized return on average assets was 0.88%, while annualized return on average common equity was 8.1%, as compared to 1.30% and 12.5%, respectively, in the same quarter a year ago, and 1.36% and 12.6%, respectively, in the second quarter of fiscal 2020, the linked quarter.  

 

Earnings per common share (diluted) were $.55, down $.21, or 27.6%, as compared to the same quarter a year ago, and down $.29, or 34.5%, from the second quarter of fiscal 2020, the linked quarter. 

 

Provision for loan losses was $2.9 million, an increase of $2.4 million, or 480.4%, as compared to the same period of the prior year, and up $2.5 million, or 634.5%, as compared to the second quarter of fiscal 2020, the linked quarter. The increase was attributable primarily to increased uncertainty regarding the economic environment resulting from the COVID-19 pandemic and the potential impact on the Company’s borrowers. Nonperforming assets were $14.9 million, or 0.63% of total assets, at March 31, 2020, as compared to $24.8 million, or 1.12% of total assets, at June 30, 2019, and $26.3 million, or 1.21% of total assets, at March 31, 2019. The decrease primarily reflected progress by the Company in resolving acquired nonperforming assets resulting from the November 2018 acquisition of Gideon Bancshares Company and its subsidiary, First Commercial Bank (“the Gideon Acquisition”). 

 

Net loan growth for the third quarter of fiscal 2020 was $45.0 million, a continued strong annualized pace of growth, and better than recent March quarters for the Company. In general, seasonal impacts have been less pronounced of late. Net loans are up $121.4 million, or 6.6% in the first nine months of fiscal 2020. 

 

Deposit balances increased $57.0 million in the third quarter, in what is typically a strong quarter for the Company’s deposit growth, and this growth came despite a decrease of $5.9 million in brokered deposits. Deposits are up $78.0 million, or 4.1%, in the first nine months of fiscal 2020, with growth negatively impacted by a reduction of $15.5 million in brokered deposits in the fiscal year to date. 

 

Net interest margin for the third quarter of fiscal 2020 was 3.63%, down from the 3.73% reported for the year ago period, and down from the 3.70% figure reported for the second quarter of fiscal 2020, the linked quarter. Discount accretion on acquired loan portfolios was lower in the current quarter as compared to the linked quarter and the year ago period. Additionally, as compared to the linked  



quarter, the Company noted a reduction in the amount of interest income resulting from resolution of loans that had been previously classified as nonaccrual.

 

Noninterest income was up 4.2% for the third quarter of fiscal 2020, excluding the impact of the prior period’s gain on available-for-sale securities, and was down 11.0% as compared to the second quarter of fiscal 2020, the linked quarter. The current period was impacted negatively by an impairment charge for mortgage servicing rights, discussed in detail below. 

 

Noninterest expense was up 7.6% for the third quarter of fiscal 2020, as compared to the year ago period, and up 3.7% from the second quarter of fiscal 2020, the linked quarter. The current quarter was impacted negatively by an increase in provisioning for off-balance sheet credit exposures, in comparison to the year-ago period, while acquisition-related costs declined in comparison to the year-ago period, but increased modestly as compared to the second quarter of fiscal 2020, the linked period.  

 

Dividend Declared:

 

The Board of Directors, on April 21, 2020, declared a quarterly cash dividend on common stock of $0.15, payable May 29, 2020, to stockholders of record at the close of business on May 15, 2020, marking the 104th 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.

 

COVID-19 Pandemic Response:

 

Southern Missouri is committed to serving our communities in this difficult time, and to the safety of our team members and customers. We have taken a number of actions which merit mention in this quarterly update.

 

The Company has deferred or modified loan payments for loans totaling $206.2 million through Wednesday, April 22. Generally, the deferrals are for three-month periods, while interest-only modifications are for six months. Further information on deferrals and modifications is included in a table on page 10.  

 

In the first round of funding made available through the Small Business Administration’s Paycheck Protection Program, the Company originated 937 loans totaling $108.8 million through Wednesday, April 22. 

 

Beginning Monday, March 23, the Company closed its lobbies to access except by appointment, and encouraged customers to utilize our online, mobile, drive-thru, or integrated teller machines (ITMs) for service when possible. We’ve seen notable increases in usage for these delivery channels. As an example, video teller activity through our ITMs in the first twelve weekdays and Saturdays in the month of April increased by 34% over the comparable period in March. We are currently planning to begin re-opening lobbies on Monday, May 4, subject to guidance by state and local authorities. In a short amount of time we significantly increased our telework capabilities, and have had as many as 30% of our team members working remotely for the last month either on a regular or rotating basis. No team members have been furloughed, and no furloughs are anticipated. Non-essential business travel has been suspended. 

 

As the Company noted in a current report on Form 8-K filed March 23, 2020, to preserve capital and provide liquidity to meet the credit needs of its customers, activity under the Company’s stock repurchase program was temporarily suspended effective after the close of the market on Thursday, March 26, 2020. 

 

To provide useful disclosure regarding lending concentrations in this environment of economic uncertainty, we have prepared additional information for inclusion in this release. See page 9. 



Other News:

 

As the Company noted in a current report on Form 8-K filed January 17, 2020, we entered into an Agreement and Plan of Merger on January 17, 2020, with Central Federal Bancshares, Inc. (“Central”), which is the parent corporation of Central Federal Savings & Loan Association of Rolla (“Central Federal”). The agreement provides that the Company will acquire Central in an all-cash transaction. As part of the transaction, Central Federal will merge with and into the Bank. The deal is valued at approximately $24.0 million, inclusive of the retirement of debt outstanding under Central’s Employee Stock Ownership Plan. Completion of the merger, subject to customary closing conditions including approval by Central shareholders, is currently targeted for late May 2020. Regulatory approval to proceed with the merger has been received.

 

Conference Call:

 

The Company will host a conference call to review the information provided in this press release on Thursday, April 30, 2020, at 12:00 noon, 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 May 13, 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 10143470.

 

Balance Sheet Summary:

 

The Company experienced balance sheet growth in the first nine months of fiscal 2020, with total assets of $2.4 billion at March 31, 2020, reflecting an increase of $160.0 million, or 7.2%, as compared to June 30, 2019. Asset growth was comprised mainly of increases in loans, cash and cash equivalents, and available-for-sale (“AFS”) securities.

 

AFS securities were $180.6 million at March 31, 2020, an increase of $15.1 million, or 9.1%, as compared to June 30, 2019. Cash equivalents and time deposits were a combined $57.1 million, an increase of $20.7 million, or 56.9%, as compared to June 30, 2019.

 

Loans, net of the allowance for loan losses, were $2.0 billion at March 31, 2020, an increase of $121.4 million, or 6.6%, as compared to June 30, 2019. The portfolio primarily saw growth in residential real estate loans, commercial real estate loans, and funded balances in construction loans, partially offset by declines in commercial loans, and consumer loans. Residential real estate loan balances were higher as the Company saw increases both in loans secured by multifamily and 1-to-4 family real estate. Commercial real estate loans were increased primarily due to loans secured by nonresidential properties, combined with a small increase in loans secured by agricultural real estate. Construction loan balances were increased as a result of both draws on existing construction loans and new loan originations. The decrease in commercial loan balances primarily reflected reductions in commercial and industrial loans and seasonal declines in agricultural operating and equipment loans. Reductions in consumer loans consisted primarily of loans secured by deposits, partially offset by a modest increase in home equity line of credit balances. Loans anticipated to fund in the next 90 days stood at $76.6 million at March 31, 2020, as compared to $77.7 million at March 31, 2019, and $83.3 million at June 30, 2019.

 

Nonperforming loans were $11.4 million, or 0.57% of gross loans, at March 31, 2020, as compared to $21.0 million, or 1.13% of gross loans at June 30, 2019, and $22.7 million, or 1.23% of gross loans, at March 31, 2019. Nonperforming assets were $14.9 million, or 0.63% of total assets, at March 31, 2020, as compared to $24.8 million, or 1.12% of total assets, at June 30, 2019, and $26.3 million, or 1.21% of total assets, at March 31, 2019. The decrease in nonperforming loans since June 30, 2019, was attributed primarily to the resolution of certain nonperforming loans acquired in the Gideon Acquisition. The Gideon Acquisition resulted in an increase in nonperforming loans of $12.9 million (at fair value) as of December 31, 2018, the quarter end following the



acquisition. At June 30, 2019, nonperforming loans from that acquisition had declined to $10.2 million, and they have declined further to $2.4 million as of March 31, 2020. The decrease in nonperforming loans was also the principal reason for the decrease in nonperforming assets. Our allowance for loan losses at March 31, 2020, totaled $23.5 million, representing 1.18% of gross loans and 205.7% of nonperforming loans, as compared to $19.9 million, or 1.07% of gross loans and 94.7% of nonperforming loans, at June 30, 2019. For all impaired loans, the Company has measured impairment under ASC 310-10-35. Management believes the allowance for loan losses at March 31, 2020, is adequate, based on that measurement; 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.

 

The Company has been working towards adoption of ASU 2016-13, regarding the current expected credit loss (CECL) standard. Based on FASB implementation timelines, the standard was to be effective for the Company on July 1, 2020, following the end of our current fiscal year. Under the Coronavirus Aid, Relief and Economic Security (CARES) Act, the Company has the option to temporarily delay implementation of the standard until the earlier of December 31, 2020, or the termination of the declared national emergency related to the COVID-19 pandemic. At this time, the Company is continuing to prepare as if we will adopt on July 1, 2020, but we will continue to monitor the situation and evaluate our options.

 

Total liabilities were $2.1 billion at March 31, 2020, an increase of $148.6 million, or 7.5%, as compared to June 30, 2019.

 

Deposits were $2.0 billion at March 31, 2020, an increase of $78.0 million, or 4.1%, as compared to June 30, 2019. Deposit growth was partially offset by a reduction in brokered deposits, which declined on net by $15.5 million, reflecting a decrease in brokered time deposits of $21.6 million, and an increase in brokered money market deposits of $6.1 million. Brokered time deposits were $23.3 million, and brokered money market deposits were $14.4 million, at March 31, 2020. The Company has utilized FHLB funding in lieu of brokered funding primarily due to rate and term availability. Public unit balances were $292.1 million at March 31, 2020, reflecting an increase of $25.3 million as compared to June 30, 2019, which is due in part to seasonal public unit flows of funds. In total, deposit balances saw increases in interest-bearing transaction accounts, money market deposit accounts, and noninterest-bearing transaction accounts, partially offset by declines in certificates of deposit and savings accounts. The average loan-to-deposit ratio for the second quarter of fiscal 2020 was 99.9%, as compared to 97.2% for the same period of the prior fiscal year.

 

FHLB advances were $123.4 million at March 31, 2020, an increase of $78.5 million, or 174.7%, as compared to June 30, 2019, with the increase attributable to the Company’s use of this funding source to fund increases in loans, cash balances, and securities in excess of our increases in deposits and retained earnings. The increase consisted of $53.1 million in overnight funding and $25.4 million in term advances. Over the past several years, the Company has worked to move public unit and business customers from a swept repurchase agreement product, which required the use of the Company’s AFS securities portfolio to collateralize those borrowings, to a reciprocal deposit product. During the first quarter of fiscal 2020, the final customers utilizing the sweep product were migrated, and the Company saw a reduction of $4.4 million in this funding source as compared to June 30, 2019.

 

The Company’s stockholders’ equity was $249.9 million at March 31, 2020, an increase of $11.5 million, or 4.8%, as compared to June 30, 2019. The increase was attributable primarily to retained earnings, partially offset by cash dividends paid and by repurchases during the fiscal year of 182,598 Company shares acquired for $5.8 million, for an average price of $31.61 per share. As the Company noted in a current report on Form 8-K



filed March 23, 2020, activity under the repurchase program was temporarily suspended effective after the close of the market on Thursday, March 26, 2020.

 

Quarterly Income Statement Summary:

 

The Company’s net interest income for the three-month period ended March 31, 2020, was $19.4 million, an increase of $864,000, or 4.7%, as compared to the same period of the prior fiscal year. The increase was attributable primarily to a 7.7% increase in the average balance of interest-earning assets, partially offset by a decrease in net interest margin to 3.63% in the current three-month period, from 3.73% in the three-month 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), and the Gideon Acquisition resulted in an additional $410,000 in net interest income for the three-month period ended March 31, 2020, as compared to $631,000 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. 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 eight basis points to net interest margin in the three-month period ended March 31, 2020, as compared to a contribution of 13 basis points in the same period of the prior fiscal year, and as compared to the 10 basis point contribution in the linked quarter, ended December 31, 2019, when net interest margin was 3.70%. Additionally, in the linked period, the Company recognized an additional $194,000 in interest income as a result of the resolution of nonperforming loans. This recognition of interest income contributed four basis points to the net interest margin in the linked period, without material comparable items in the current period.

 

The provision for loan losses for the three-month period ended March 31, 2020, was $2.9 million, as compared to $491,000 in the same period of the prior fiscal year. Increased provisioning was attributable primarily to increased uncertainty regarding the economic environment and its potential impact on the Company’s borrowers. Stronger loan growth and increases in classified and delinquent credits also contributed. As a percentage of average loans outstanding, the provision for loan losses in the current three-month period represented a charge of 0.58% (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 0.11% (annualized), while the Company recorded net charge offs of 0.02% (annualized).

 

The Company’s noninterest income for the three-month period ended March 31, 2020, was $3.9 million, a decrease of $90,000, or 2.3%, as compared to the same period of the prior fiscal year. The year ago period included $244,000 in gains on sales of AFS securities, and $214,000 in other identified nonrecurring benefits. In the current period, increases in deposit account service charges and bank card interchange income were mostly offset by a decline in mortgage servicing income, as the Company recognized a $395,000 impairment of its mortgage servicing rights due to the decline in market interest rates and a coincident increase in expected prepayments. Deposit account service charges increased primarily as a result of a 12.7% increase in the number of NSF items presented, as well as a 12.0% increase in fees charged for NSF items effective October 1, 2019. These service charges typically see a seasonal reduction late in the March quarter when consumers receive income tax refunds, and the Company would expect that impact, coupled with COVID-19 Economic Impact Payments, reduced gasoline prices, and other spending reductions to result in an even more pronounced reduction in these charges in coming quarters. Bank card interchange income increased as a result of a 9.6% increase in bank card dollar volume and incentive benefits under a new affiliation contract. We anticipate interchange income may decline as well due to reductions in depositor purchasing activity.



Noninterest expense for the three-month period ended March 31, 2020, was $14.2 million, an increase of $1.0 million, or 7.6%, as compared to the same period of the prior fiscal year. The increase was attributable primarily to increases in compensation and benefits, occupancy and data processing expenses, provisioning for off-balance sheet credit exposures, losses and expenses on foreclosed real estate, and bank card network expense, partially offset by a decrease in deposit insurance premiums. Based on the same qualitative evaluation of loss exposure utilized in the allowance for loan losses, the Company saw an increase in its off-balance sheet credit exposure, resulting in a charge of $300,000 in the current period, as compared to a charge of $9,000 in the year ago period. Partially offsetting these increases, the FDIC continued applying credits to the deposit insurance assessments due from smaller banks, such as the Company’s subsidiary, resulting in no deposit insurance premium expense for the Company in the current quarter, as compared to an expense of $157,000 in the year ago period. As the credits are exhausted in all material respects, the expense will return to a normalized level for the quarter ended June 30, 2020. After recording $243,000 in charges related to merger and acquisition activity in the same quarter a year ago, the Company recorded only $76,000 in comparable expenses in the current period. Additionally, the year ago period included $185,000 in other nonrecurring charges. The efficiency ratio for the three-month period ended March 31, 2020, was 61.0%, as compared to 59.3% in the same period of the prior fiscal year, as noninterest expenses, including provision for off-balance sheet credit exposure, grew at a faster rate over the prior year as compared to net interest income, due to margin compression, and as compared to noninterest income, due primarily to the impairment charge recorded on the Company’s mortgage servicing rights.

 

The income tax provision for the three-month period ended March 31, 2020, was $1.1 million, a decrease of $596,000, or 34.6%, as compared to the same period of the prior fiscal year, attributable primarily to lower pre-tax income, combined with a decrease in the effective tax rate, to 18.1%, as compared to 19.6% in the year-ago period.

 

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 loan 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:

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

June 30,

 

Mar. 31,

 

     (dollars in thousands, except per share data)

 

2020

 

2019

 

2019

 

2019

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents and time deposits

 

$        57,078

 

$        42,015

 

$        32,394

 

$        36,369

 

$        32,353

 

Available for sale securities

 

        180,592

 

        175,843

 

        171,006

 

        165,535

 

        161,510

 

FHLB/FRB membership stock

 

          13,054

 

          12,522

 

          12,083

 

            9,583

 

            9,216

 

Loans receivable, gross

 

    1,991,328

 

    1,943,599

 

    1,895,207

 

    1,866,308

 

    1,842,883

 

  Allowance for loan losses

 

          23,508

 

          20,814

 

          20,710

 

          19,903

 

          19,434

 

Loans receivable, net

 

    1,967,820

 

    1,922,785

 

    1,874,497

 

    1,846,405

 

    1,823,449

 

Bank-owned life insurance

 

          39,095

 

          38,847

 

          38,593

 

          38,337

 

          38,086

 

Intangible assets

 

          21,573

 

          22,423

 

          22,889

 

          23,328

 

          23,991

 

Premises and equipment

 

          64,705

 

          65,006

 

          63,484

 

          62,727

 

          62,508

 

Other assets

 

          30,531

 

          32,408

 

          34,265

 

          32,118

 

          25,334

 

  Total assets

 

$  2,374,448

 

$  2,311,849

 

$  2,249,211

 

$  2,214,402

 

$  2,176,447

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$  1,738,379

 

$  1,691,010

 

$  1,663,874

 

$  1,674,806

 

$  1,649,830

 

Noninterest-bearing deposits

 

        233,268

 

        223,604

 

        208,646

 

        218,889

 

        224,284

 

Securities sold under agreements to repurchase

 

                   -   

 

                   -   

 

                   -   

 

            4,376

 

            4,703

 

FHLB advances

 

        123,361

 

        114,646

 

        103,327

 

          44,908

 

          38,388

 

Note payable

 

            3,000

 

            3,000

 

            3,000

 

            3,000

 

            3,000

 

Other liabilities

 

          11,469

 

          15,627

 

          13,034

 

          14,988

 

            9,845

 

Subordinated debt

 

          15,118

 

          15,093

 

          15,068

 

          15,043

 

          15,018

 

  Total liabilities

 

    2,124,595

 

    2,062,980

 

    2,006,949

 

    1,976,010

 

    1,945,068

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stockholders' equity

 

        249,853

 

        248,869

 

        242,262

 

        238,392

 

        231,379

 

  Total stockholders' equity

 

        249,853

 

        248,869

 

        242,262

 

        238,392

 

        231,379

 

 

 

 

 

 

 

 

 

 

 

 

 

  Total liabilities and stockholders' equity

 

$  2,374,448

 

$  2,311,849

 

$  2,249,211

 

$  2,214,402

 

$  2,176,447

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity to assets ratio

 

10.52%

 

10.76%

 

10.77%

 

10.77%

 

10.63%

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

    9,128,290

 

    9,206,783

 

    9,201,783

 

    9,289,308

 

    9,324,659

 

  Less: Restricted common shares not vested

 

          28,925

 

          24,900

 

          25,975

 

          28,250

 

          28,250

 

Common shares for book value determination

 

    9,099,365

 

    9,181,883

 

    9,175,808

 

    9,261,058

 

    9,296,409

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per common share

 

$          27.46

 

$          27.10

 

$          26.40

 

$          25.74

 

$          24.89

 

Closing market price

 

            24.27

 

            38.36

 

            36.43

 

            34.83

 

            30.80

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming asset data as of:

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

June 30,

 

Mar. 31,

 

     (dollars in thousands)

 

2020

 

2019

 

2019

 

2019

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$        11,428

 

$        10,419

 

$        14,023

 

$        21,013

 

$        22,690

 

Accruing loans 90 days or more past due

 

                   -   

 

                     1

 

                   -   

 

                   -   

 

                   -   

 

  Total nonperforming loans

 

          11,428

 

          10,420

 

          14,023

 

          21,013

 

          22,690

 

Other real estate owned (OREO)

 

            3,401

 

            3,668

 

            3,820

 

            3,723

 

            3,617

 

Personal property repossessed

 

                  38

 

                  26

 

                  71

 

                  29

 

                     2

 

  Total nonperforming assets

 

$        14,867

 

$        14,114

 

$        17,914

 

$        24,765

 

$        26,309

 

 

 

 

 

 

 

 

 

 

 

 

 

Total nonperforming assets to total assets

 

0.63%

 

0.61%

 

0.80%

 

1.12%

 

1.21%

 

Total nonperforming loans to gross loans

 

0.57%

 

0.54%

 

0.74%

 

1.13%

 

1.23%

 

Allowance for loan losses to nonperforming loans

 

205.71%

 

199.75%

 

147.69%

 

94.72%

 

85.65%

 

Allowance for loan losses to gross loans

 

1.18%

 

1.07%

 

1.09%

 

1.07%

 

1.05%

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing troubled debt restructurings (1)

 

$        14,196

 

$        14,814

 

$        12,432

 

$        13,289

 

$        17,577

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 


8



 

 

For the three-month period ended

Quarterly Average Balance Sheet Data:

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

June 30,

 

Mar. 31,

 

     (dollars in thousands)

 

2020

 

2019

 

2019

 

2019

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing cash equivalents

 

$          7,363

 

$          6,322

 

$          7,001

 

$          6,079

 

$          3,544

 

Available for sale securities and membership stock

 

        184,389

 

        183,748

 

        179,623

 

        174,063

 

        183,717

 

Loans receivable, gross

 

    1,950,887

 

    1,903,230

 

    1,865,344

 

    1,833,344

 

    1,803,070

 

  Total interest-earning assets

 

    2,142,639

 

    2,093,300

 

    2,051,968

 

    2,013,486

 

    1,990,331

 

Other assets

 

        180,981

 

        184,028

 

        184,415

 

        185,403

 

        189,503

 

  Total assets

 

$  2,323,620

 

$  2,277,328

 

$  2,236,383

 

$  2,198,889

 

$  2,179,834

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

$  1,729,327

 

$  1,674,198

 

$  1,660,994

 

$  1,652,831

 

$  1,621,580

 

Securities sold under agreements to repurchase

 

                   -   

 

                   -   

 

                328

 

            4,463

 

            4,267

 

FHLB advances

 

          83,916

 

          99,728

 

          82,192

 

          51,304

 

          67,091

 

Note payable

 

            3,000

 

            3,000

 

            3,000

 

            3,000

 

            3,000

 

Subordinated debt

 

          15,105

 

          15,080

 

          15,055

 

          15,031

 

          15,006

 

  Total interest-bearing liabilities

 

    1,831,348

 

    1,792,006

 

    1,761,569

 

    1,726,629

 

    1,710,944

 

Noninterest-bearing deposits

 

        226,177

 

        224,687

 

        221,202

 

        224,932

 

        233,296

 

Other noninterest-bearing liabilities

 

          15,322

 

          15,033

 

          13,568

 

          12,548

 

            7,994

 

  Total liabilities

 

    2,072,847

 

    2,031,726

 

    1,996,339

 

    1,964,109

 

    1,952,234

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stockholders' equity

 

        250,773

 

        245,602

 

        240,044

 

        234,780

 

        227,600

 

  Total stockholders' equity

 

        250,773

 

        245,602

 

        240,044

 

        234,780

 

        227,600

 

 

 

 

 

 

 

 

 

 

 

 

 

  Total liabilities and stockholders' equity

 

$  2,323,620

 

$  2,277,328

 

$  2,236,383

 

$  2,198,889

 

$  2,179,834

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three-month period ended

Quarterly Summary Income Statement Data:

 

Mar. 31,

 

Dec. 31,

 

Sep. 30,

 

June 30,

 

Mar. 31,

 

     (dollars in thousands, except per share data)

 

2020

 

2019

 

2019

 

2019

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

  Cash equivalents

 

$                33

 

$                31

 

$                46

 

$                38

 

$                28

 

  Available for sale securities and membership stock

 

            1,218

 

            1,194

 

            1,236

 

            1,220

 

            1,320

 

  Loans receivable

 

          24,969

 

          25,421

 

          25,640

 

          24,789

 

          23,838

 

     Total interest income

 

          26,220

 

          26,646

 

          26,922

 

          26,047

 

          25,186

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

  Deposits

 

            6,135

 

            6,448

 

            6,578

 

            6,422

 

            5,851

 

  Securities sold under agreements to repurchase

 

                   -   

 

                   -   

 

                   -   

 

                  10

 

                  10

 

  FHLB advances

 

                439

 

                573

 

                522

 

                352

 

                495

 

  Note payable

 

                  31

 

                  34

 

                  37

 

                  38

 

                  37

 

  Subordinated debt

 

                197

 

                214

 

                225

 

                232

 

                239

 

     Total interest expense

 

            6,802

 

            7,269

 

            7,362

 

            7,054

 

            6,632

 

Net interest income

 

          19,418

 

          19,377

 

          19,560

 

          18,993

 

          18,554

 

Provision for loan losses

 

            2,850

 

                388

 

                896

 

                546

 

                491

 

Securities gains

 

                   -   

 

                   -   

 

                   -   

 

                   -   

 

                244

 

Other noninterest income

 

            3,856

 

            4,334

 

            4,101

 

            3,741

 

            3,702

 

Noninterest expense

 

          14,196

 

          13,685

 

          12,961

 

          12,778

 

          13,190

 

Income taxes

 

            1,129

 

            1,921

 

            1,976

 

            1,853

 

            1,725

 

     Net income

 

$          5,099

 

$          7,717

 

$          7,828

 

$          7,557

 

$          7,094

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$            0.55

 

$            0.84

 

$            0.85

 

$            0.81

 

$            0.76

 

Diluted earnings per common share

 

               0.55

 

               0.84

 

               0.85

 

               0.81

 

               0.76

 

Dividends per common share

 

               0.15

 

               0.15

 

               0.15

 

               0.13

 

               0.13

 

Average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

  Basic

 

    9,197,000

 

    9,202,000

 

    9,232,000

 

    9,316,000

 

    9,323,000

 

  Diluted

 

    9,205,000

 

    9,213,000

 

    9,244,000

 

    9,328,000

 

    9,331,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

0.88%

 

1.36%

 

1.40%

 

1.37%

 

1.30%

 

Return on average common stockholders' equity

 

8.1%

 

12.6%

 

13.0%

 

12.9%

 

12.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin

 

3.63%

 

3.70%

 

3.81%

 

3.77%

 

3.73%

 

Net interest spread

 

3.40%

 

3.47%

 

3.58%

 

3.54%

 

3.51%

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio

 

61.0%

 

57.7%

 

54.8%

 

56.2%

 

59.3%

 


9



Loan Portfolio Balances as of:

 

 

 

 

 

 

 

 

Mar. 31,

 

 

 

     (dollars in thousands)

 

 

 

 

 

 

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1- to 4-family residential

 

 

 

 

 

 

 

 

$             392,532

 

 

 

Multifamily residential

 

 

 

 

 

 

 

 

               191,244

 

 

 

     Total residential

 

 

 

 

 

 

 

 

               583,776

 

 

 

1- to 4-family owner-occupied construction

 

 

 

 

 

 

 

 

                 22,728

 

 

 

1- to 4-family speculative construction

 

 

 

 

 

 

 

 

                 12,837

 

 

 

Multifamily construction

 

 

 

 

 

 

 

 

                 37,819

 

 

 

Other construction

 

 

 

 

 

 

 

 

                 18,669

 

 

 

     Total construction balances drawn

 

 

 

 

 

 

 

 

                 92,053

 

 

 

Agricultural real estate

 

 

 

 

 

 

 

 

               186,855

 

 

 

Vacant land - developed, undeveloped, and other purposes

 

 

 

 

 

 

                 58,312

 

 

 

Owner-occupied commercial real estate loans to:

 

Churches and nonprofits

 

                 16,105

 

 

 

 

 

Non-professional services

 

                 11,883

 

 

 

 

 

Retail

 

                 23,932

 

 

 

 

 

Automobile dealerships

 

 

 

 

                 19,191

 

 

 

 

 

Healthcare providers

 

                    3,685

 

 

 

 

 

Restaurants

 

                 43,958

 

 

 

 

 

Convenience stores

 

                 24,209

 

 

 

 

 

Automotive services

 

                    7,609

 

 

 

 

 

Manufacturing

 

                 17,725

 

 

 

 

 

Professional services

 

                 18,703

 

 

 

 

 

Warehouse/distribution

 

                    3,543

 

 

 

 

 

Grocery

 

                    4,999

 

 

 

 

 

Other

 

                 32,190

 

 

 

 

 

Total owner-occupied commercial real estate loans

 

               227,732

 

 

 

Non-owner-occupied commercial real estate loans to:

Care facilities

 

                 29,153

 

 

 

 

 

Non-professional services

 

                 15,385

 

 

 

 

 

Retail

 

                 40,059

 

 

 

 

 

Healthcare providers

 

                 22,268

 

 

 

 

 

Restaurants

 

                 51,173

 

 

 

 

 

Convenience stores

 

                    8,412

 

 

 

 

 

Automotive services

 

                    6,471

 

 

 

 

 

Hotels

 

                 77,562

 

 

 

 

 

Manufacturing

 

                    5,068

 

 

 

 

 

Storage units

 

                 11,601

 

 

 

 

 

Professional services

 

                    9,196

 

 

 

 

 

Multi-tenant retail

 

                 81,184

 

 

 

 

 

Warehouse/distribution

 

                 26,289

 

 

 

 

 

Other

 

                 36,549

 

 

 

 

 

Total non-owner-occupied commercial real estate

 

               420,370

 

 

 

     Total commercial real estate

 

 

 

 

 

 

 

 

               893,269

 

 

 

Home equity lines of credit

 

 

 

 

 

 

 

 

                 44,924

 

 

 

Deposit-secured loans

 

 

 

 

 

 

 

 

                 18,875

 

 

 

All other consumer loans

 

 

 

 

 

 

 

 

                 30,846

 

 

 

     Total consumer loans

 

 

 

 

 

 

 

 

                 94,645

 

 

 

Agricultural production and equipment loans

 

 

 

 

 

 

 

 

                 87,409

 

 

 

Loans to municipalities or other public units

 

 

 

 

 

 

 

 

                 11,904

 

 

 

Commercial and industrial loans to:

 

Forestry, fishing, and hunting

 

                    5,893

 

 

 

 

 

Construction

 

                 19,972

 

 

 

 

 

Finance and insurance

 

                 48,857

 

 

 

 

 

Real estate rental and leasing

 

                 16,090

 

 

 

 

 

Healthcare and social assistance

 

                    8,078

 

 

 

 

 

Accommodations and food services

 

                 11,735

 

 

 

 

 

Manufacturing

 

                    7,273

 

 

 

 

 

Retail trade

 

                 44,974

 

 

 

 

 

Transportation and warehousing

 

                 27,027

 

 

 

 

 

Administrative support and waste management

 

                    4,984

 

 

 

 

 

Arts, entertainment, and recreation

 

                    5,059

 

 

 

 

 

Other commercial loans

 

                 28,332

 

 

 

 

 

Total commercial and industrial loans

 

               228,274

 

 

 

     Total commercial loans

 

 

 

 

 

 

 

 

               327,587

 

 

 

        Total gross loans receivable, excluding deferred loan fees

 

 

 

 

 

 

$         1,991,330

 

 

 


10



Loan Deferrals and Modifications Related to COVID-19

 

 

 

 

 

 

Through April 22, 2020

 

     (dollars in thousands)

 

 

 

 

 

 

 

 

Payment

 

Interest-only

 

 

 

 

 

 

 

 

 

 

Deferrals

 

Modifications

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1- to 4-family residential

 

 

 

 

 

 

 

 

$                 8,403

 

$               13,688

 

Multifamily residential

 

 

 

 

 

 

 

 

                    5,164

 

                    5,848

 

  Total residential

 

 

 

 

 

 

 

 

                 13,567

 

                 19,536

 

1- to 4-family owner-occupied construction

 

 

 

 

 

 

 

 

                           -   

 

                           -   

 

1- to 4-family speculative construction

 

 

 

 

 

 

 

 

                           -   

 

                           -   

 

Multifamily construction

 

 

 

 

 

 

 

 

                           -   

 

                           -   

 

Other construction

 

 

 

 

 

 

 

 

                    4,367

 

                       290

 

  Total construction balances drawn

 

 

 

 

 

 

 

 

                    4,367

 

                       290

 

Agricultural real estate

 

 

 

 

 

 

 

 

                       457

 

                    3,480

 

Vacant land - developed, undeveloped, and other purposes

 

 

 

 

 

 

                       106

 

                    1,825

 

Owner-occupied commercial real estate

 

 

 

 

 

 

 

 

                 20,222

 

                 32,426

 

Non-owner-occupied commercial real estate

 

 

 

 

 

 

 

 

                 52,124

 

                 45,154

 

  Total commercial real estate

 

 

 

 

 

 

 

 

                 72,909

 

                 82,885

 

Home equity lines of credit

 

 

 

 

 

 

 

 

                          91

 

                           -   

 

Deposit-secured loans

 

 

 

 

 

 

 

 

                          40

 

                           -   

 

All other consumer loans

 

 

 

 

 

 

 

 

                    1,000

 

                          51

 

  Total consumer loans

 

 

 

 

 

 

 

 

                    1,131

 

                          51

 

Agricultural production and equipment loans

 

 

 

 

 

 

 

 

                       450

 

                       451

 

Loans to municipalities or other public units

 

 

 

 

 

 

 

 

                           -   

 

                           -   

 

Commercial and industrial loans

 

 

 

 

 

 

 

 

                    1,368

 

                    9,211

 

  Total commercial loans

 

 

 

 

 

 

 

 

                    1,818

 

                    9,662

 

  Total loans outstanding

 

 

 

 

 

 

 

 

$               93,792

 

$             112,424

 

 

 

 

Through April 22, 2020, the Company had approved requests for 520 payment modifications and deferrals totaling $206.4 million.  Of note, 94% of the dollar amount of deferrals and modifications approved for other construction loans are loans for the construction of a hotel.

 

For owner-occupied commercial real estate, 31% of the dollar amount of deferrals and modifications approved are loans secured by restaurants, 27% are loans secured by convenience stores, 9% are loans secured by manufacturing properties, 9% are loans secured by retail properties, and 7% are loans secured by auto dealers.

 

For non-owner-occupied commercial real estate, 34% of the dollar amount of deferrals and modifications approved are loans secured by multi-tenant retail, 25% are loans secured by hotels, 15% are loans secured by restaurants, and 13% are loans secured by care facilities.

 

Within our commercial real estate categories, 34.0% of our loans secured by hotels, 32.7% of our loan secured by restaurants, and 41.0% of our loans secured by multi-tenant retail have been modified or deferred.

 

Finally, for commercial and industrial loans, 19% of the dollar amount of deferrals and modifications approved are loans to firms in the transportation and warehousing industry, 18% are loans to firms in administrative support or waste management, 15% are loans to firms in healthcare or social assistance, 13% are loans to firms in accommodation or food services, 11% are loans to firms in retail trade, and 11% are loans to firms in real estate rental and leasing.


11