Executive Summary

Diluted EPS of $1.39 was flat sequentially but up 16.8% YoY, driven by higher net interest income and a lower tax rate; noninterest expense included $0.43M one-time consulting cost, implying underlying EPS of ~$1.42 if excluded .
Net interest margin expanded to 3.46% (3.47% on annualized-day-count basis), supported by lower funding costs and higher loan yields; management expects further margin tailwinds from CD repricing and easing deposit competition .
Credit costs rose: PCL increased to $2.5M on higher net charge-offs, including a $3.8M write-down within special-purpose CRE and a $0.74M C&I charge-off; NPLs increased to 0.56% of loans, while ACL coverage remained robust at 224% of NPLs .
Dividend was raised 8.7% to $0.25 (125th consecutive quarterly dividend), signaling confidence in capital and earnings durability .
Outlook: pipeline to fund in 90 days rose to $224.1M; management targets mid-single-digit loan growth for FY26; near-term prepayments could temper net growth, but margin and fee initiatives are incremental catalysts .

What Went Well and What Went Wrong

What Went Well

“We have seen improvement in the net interest margin this year with continued loan growth and moderate operating expense growth,” supporting EPS growth and improved efficiency (54.6%) .
Margin drivers include loan yield expansion and easing deposit competition; average loan origination ~7.3% vs ~6.3% for loans maturing in the next 12 months, positioning for further NIM expansion .
Fee upside: card network volume incentives added $0.54M in the quarter; annual bonuses will be accrued in FY26 to smooth noninterest income .

What Went Wrong

Credit costs elevated: $5.3M net charge-offs including a $3.8M special-purpose CRE charge-off; PCL rose to $2.5M, lifting YoY and sequential credit provisioning .
Noninterest income fell 6.3% YoY due to accounting for tax credits shifting from fee income to direct tax reduction under ASU 2023-02 and a $0.11M MSR fair value hit .
Legal/professional expenses were elevated by $0.43M consulting costs to negotiate a large vendor contract, temporarily pressuring operating leverage .

Financial Results

Core P&L and Profitability vs prior year, prior quarter, and estimates

Metric	Q4 2024	Q2 2025	Q3 2025	Q4 2025
Net Interest Income ($MM)	$35.095	$38.143	$39.479	$40.333
Noninterest Income ($MM)	$7.767	$6.865	$6.666	$7.280
Provision for Credit Losses ($MM)	$0.900	$0.932	$0.932	$2.500
Noninterest Expense ($MM)	$25.002	$24.876	$25.391	$25.976
Net Income ($MM)	$13.530	$14.653	$15.683	$15.786
Diluted EPS ($)	$1.19	$1.30	$1.39	$1.39
Net Interest Margin (%)	3.25%	3.36%	3.39%	3.46%
ROA (Annualized, %)	1.17%	1.21%	1.27%	1.27%
ROE (Annualized, %)	11.2%	11.5%	12.1%	11.8%
Efficiency Ratio (%)	58.3%	55.3%	55.1%	54.6%

Wall Street Consensus vs Actual (S&P Global)

Metric	Q4 2025 Consensus	Q4 2025 Actual
Primary EPS Consensus Mean	$1.255*	$1.39*
Revenue Consensus Mean ($MM)	$46.26*	$45.11*

Values retrieved from S&P Global.
Note: S&P’s “Revenue” for banks may differ from press-release presentation; press release components sum to $47.61MM (Net interest income + Noninterest income) .

Balance Sheet and Mix

Loans ($MM)	Jun-24	Sep-24	Dec-24	Mar-25	Jun-25
Gross Loans	$3,849.803	$3,966.518	$4,026.979	$4,023.509	$4,099.698
1-4 Residential RE	$925.397	$942.916	$967.196	$978.908	$991.553
Non-owner OCCRE	$899.770	$903.678	$882.484	$897.125	$888.317
Commercial & Industrial	$450.147	$457.018	$484.799	$488.116	$510.259
Ag Production	$175.968	$200.215	$188.284	$186.058	$206.128

Deposits ($MM)	Jun-24	Sep-24	Dec-24	Mar-25	Jun-25
Total Deposits	$3,943.059	$4,040.142	$4,210.627	$4,261.382	$4,281.368
Noninterest-bearing	$514.107	$503.209	$514.199	$513.418	$508.110
NOW	$1,239.663	$1,128.917	$1,211.402	$1,167.296	$1,132.298
Savings	$517.084	$556.030	$573.291	$626.175	$661.115
Certificates (Total)	$1,335.406	$1,519.676	$1,561.446	$1,606.670	$1,648.594

Asset Quality and Liquidity KPIs

KPI	Q4 2024	Q2 2025	Q3 2025	Q4 2025
NPLs ($MM)	$6.680	$8.309	$21.970	$23.040
NPLs / Gross Loans (%)	0.17%	0.21%	0.55%	0.56%
ACL / NPLs (%)	786.17%	658.80%	250.07%	224.08%
ACL / Gross Loans (%)	1.36%	1.36%	1.37%	1.26%
Avg Loan-to-Deposit Ratio (%)	96.3%	96.4%	94.2%	94.5%
Cash Equivalents & Time Deposits ($MM)	$61.395	$146.078	$227.136	$193.105

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share	Q4 2025 payout	$0.23	$0.25, payable Aug 29, 2025	Raised
Net Interest Margin outlook	FY 2026	Not quantified	Expect additional expansion; CD repricing and loan yields supportive	Raised/Positive
NIM reporting methodology	FY 2026	n/a	Move to annualized day-count calculation (reduces quarterly volatility)	Method change
Loan growth	FY 2026	n/a	Mid-single-digit loan growth expected; near-term prepayments may temper net growth	New
CDs repricing	Next 12 months	n/a	CDs rolling at ~4.24% to be replaced ~4.0% average	Lower funding cost
Capital deployment	Ongoing	n/a	Prefer M&A with shorter earn-back over buybacks at current valuation	Strategic stance

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q4 2025)	Trend
Net Interest Margin	NIM 3.36%; asset yields +32 bps YoY offset by higher funding costs; accretion 9 bps; competition elevated	NIM 3.46%; asset yields +4 bps QoQ, funding costs −1 bp; accretion 5 bps; deposit competition eased; expect further expansion	Improving
Credit Quality	NPLs rose to $8.3M; ACL 1.36%; qualitative factors raised; small ag-related charge-offs	NPLs 0.56% of loans; $3.8M CRE write-down; $0.74M C&I charge-off; ACL coverage 224% of NPLs	Worsening from low base
Loan Growth & Pipeline	Gross loans +$60.5M QoQ; pipeline to fund in 90 days $172.5M	Gross loans +$76.2M QoQ; pipeline $224.1M; mid-single-digit FY26 growth targeted; higher prepayments expected	Strong origination; net growth moderated by prepayments
Deposits & Funding	Deposits +$170.5M QoQ; brokered CDs opportunistically used; public unit seasonality	Deposits +$19.9M QoQ; shift into CDs and savings; brokered CDs $233.6M; public unit deposits down YoY	Stable; mix shifting; funding cost relief expected
CRE Concentration	Non-owner OCCRE ~317% of Tier 1+ACL; none of office loans adversely classified	~302% at bank level; monitoring special-purpose assets; office loans 0.59% of loans, none adversely classified	Managing within range
Agriculture	Seasonal draws; input costs high; prior quarter noted suspected fraud in single ag relationship	Mixed crop outlook; lower commodity prices; higher input costs; lenders stress-testing; some restructurings	Macro headwinds
M&A & Capital	Expense discipline; efficiency improved; no explicit M&A color	Modest pickup in discussions; prefer M&A over buybacks given earn-back	Constructive

Management Commentary

“We have seen improvement in the net interest margin this year with continued loan growth and moderate operating expense growth, which improved overall earnings and profitability in fiscal twenty twenty five.”
“If we calculated the net interest margin by annualizing the day count in the fourth quarter, it would have been 3.47% as compared to 3.44% in the linked quarter…”
“Our average loan origination rate was about 7.3% compared to the average loans we have maturing over the next twelve months of 6.3%.”
“We took a $3.8 million charge in the quarter on one of the three [special-purpose CRE] loans… It would not surprise me if we would have additional charge off on the other remaining building.”
“Since the last quarter, we’ve seen a modest uptick in M&A discussions… we remain optimistic about the potential for attractive opportunities.”

Q&A Highlights

Loan growth momentum steady through the quarter; several larger credits indicated near-term payoffs, implying higher prepayment activity near term, primarily in non-owner-occupied CRE .
Margin outlook constructive: origination yields above maturing loan rates and ability to pull down CD specials as competition eased; potential incremental benefit if Fed cuts reduce funding costs .
Special-purpose CRE: updated appraisal triggered $3.8M write-down; 42% specific reserve on remaining balances; potential additional charge-offs possible .
Deposit mix and CDs: average CDs at ~4.24% rolling to ~4.0%; growth less heavily weighted to CDs in FY26 given strong funding position .
Capital allocation: buybacks remain secondary to M&A where earn-back appears shorter at current valuation .

Estimates Context

Q4 2025 EPS beat: Actual $1.39 vs consensus $1.255; management’s underlying EPS would be ~$1.42 if excluding $0.43M consulting cost, reinforcing the beat narrative *.
Q4 2025 Revenue slight miss on S&P’s definition: Actual $45.11MM vs consensus $46.26MM; press-release components totaled $47.61MM, reflecting definitional differences for bank “revenue” *.
Street may raise NIM and EPS trajectories given deposit cost relief, origination spread, and fee accrual changes; conversely, credit-loss assumptions may drift higher near term given special-purpose CRE and ag pressures .

Values retrieved from S&P Global.
*Estimates and S&P-defined actuals marked with asterisks.

Key Takeaways for Investors

Earnings quality improved: NIM expansion and operating efficiency gains drove EPS strength despite higher credit costs; dividend increase signals confidence .
Margin tailwinds: origination yields > maturing rates, CD repricing lower, and easing deposit competition support further NIM expansion into FY26 .
Credit normalization underway: special-purpose CRE and C&I write-downs lifted PCL; ACL remains strong relative to NPLs, but watch for additional CRE charge-offs .
Growth pipeline robust: loans to fund in 90 days rose to $224.1M; near-term prepayments may dampen net growth, but management targets mid-single-digit FY26 loan growth .
Fee initiatives: card network incentives recognized; FY26 accrual smooths quarterly volatility, offering incremental noninterest income support .
Capital deployment optionality: preference for M&A over buybacks given earn-back calculus; improving tangible book value (+14.1% YoY) provides capacity .
Trading implications: near-term positive bias from margin and dividend catalysts; monitor headlines around CRE appraisals and ag credit to gauge risk premium adjustments .

SOUTHERN MISSOURI BANCORP, INC. (SMBC)·Q4 2025 Earnings Summary