SOUTHERN MISSOURI BANCORP, INC. (SMBC)

CIK: 0000916907. SIC: 6036 Savings Institutions, Not Federally Chartered. Latest 10-K as of: 2025-09-11.

SIC breadcrumb: Finance, Insurance, And Real Estate > Depository Institutions > SIC 6036 Savings Institutions, Not Federally Chartered

SEC company page: https://www.sec.gov/edgar/browse/?CIK=916907. Latest filing source: 0001558370-25-012001.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-09-11. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000916907.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000916907.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001104659-26-058037.

Extracted from Part I Item 2 to the first post-MD&A boundary after HTML sanitization. Confidence: high. Filing date: 2026-05-08. Report date: 2026-03-31.

PART I:  Item 2:  Management’s Discussion and Analysis of Financial Condition and Results of Operations

SOUTHERN MISSOURI BANCORP, INC.

General

Southern Missouri Bancorp, Inc. (Company) is a Missouri corporation and owns all of the outstanding stock of Southern Bank (Bank). The Company’s earnings are primarily dependent on the operations of the Bank. As a result, the following discussion relates primarily to the operations of the Bank. The Bank’s deposit accounts are generally insured up to a maximum of $250,000 by the Deposit Insurance Fund (DIF), which is administered by the Federal Deposit Insurance Corporation (FDIC). At March 31, 2026, the Bank operated from its headquarters, 63 full-service branch offices, two limited-service branch offices, and three loan production offices. The Bank owns the office building and related land in which its headquarters are located, and 60 of its other branch offices. The remaining eight branches and offices are either leased or partially owned.

​

The significant accounting policies followed by Southern Missouri and its wholly owned subsidiaries for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. All adjustments, which are of a normal recurring nature and are in the opinion of management necessary for a fair statement of the results for the periods reported, have been included in the accompanying consolidated financial statements.

​

The consolidated balance sheet of the Company as of June 30, 2025, has been derived from the audited consolidated balance sheet of the Company as of that date. Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission.

​

Management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes. The following discussion reviews the Company’s condensed consolidated financial condition at March 31, 2026, and results of operations for the three- and nine-month periods ended March 31, 2026, and 2025.

​

Forward Looking Statements

This document contains statements about the Company and its subsidiaries which we believe are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include, without limitation, statements with respect to anticipated future operating and financial performance, growth opportunities, interest rates, cost savings and funding advantages expected or anticipated to be realized by management. Words such as “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan” and similar expressions are intended to identify these forward-looking statements. Forward-looking statements by the Company and its management are based on beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions of management and are not guarantees of future performance. The important factors we discuss below, as well as other factors discussed under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and identified in this filing and in our other filings with the SEC and those presented elsewhere by our management from time to time, could cause actual results to differ materially from those indicated by the forward-looking statements made in this document:

​

●

expected cost savings, synergies and other benefits from our merger and acquisition activities, including our recently completed acquisitions, might not be realized within the anticipated time frames, to the extent anticipated, or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention and labor shortages, might be greater than expected and goodwill impairment charges might be incurred;

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potential adverse impacts to economic conditions, both nationally and in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth;

●

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 inflation, including the effects of a potential recession whether caused by Federal Reserve actions or otherwise or slowed economic growth caused by changes in oil prices or supply chain disruptions;

●

the impact of monetary and fiscal policies of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) and the U.S. Government and other governmental initiatives affecting the financial services industry;

●

potential imposition of new or increased tariffs or changes to existing trade policies that could affect economic activity or specific industry sectors;

●

the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment;

●

the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses (ACL) on loans;

●

our ability to access cost-effective funding and maintain sufficient liquidity;

●

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;

●

fluctuations in the demand for loans and deposits, including our ability to attract and retain deposits;

●

the impact of a federal government shutdown;

●

legislative or regulatory changes that adversely affect our business;

●

the effects of climate change, severe weather events, other natural disasters, war, terrorist activities or civil unrest and their effects on economic and business environments in which the Company operates;

●

changes in accounting principles, policies, or guidelines;

●

results of examinations of us by our regulators, including the impact on FDIC insurance premiums and the possibility that our regulators may, among other things, require an increase in our reserve for credit losses on loans or a write-down of assets;

●

the impact of technological changes and an inability to keep pace with the rate of technological advances;

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the inability of key third party providers to perform their obligations to us;

●

cyber threats, such as phishing, ransomware, and insider attacks, can lead to financial loss, reputational damage, and regulatory penalties if sensitive customer data and critical infrastructure are not adequately protected;

●

our ability to retain key members of our management team; and

●

our success at managing the risks involved in the foregoing.

The Company disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information, or otherwise.

Critical Accounting Policies

Accounting principles generally accepted in the United States of America are complex and require management to apply significant judgments to various accounting, reporting and disclosure matters. Management of the Company must use assumptions and estimates to apply these principles where actual measurement is not possible or practical. For a complete discussion of the Company’s significant accounting policies, see “Note 1 of the Consolidated Financial Statements” in the Company’s 2025 Annual Report on Form 10-K and “Note 2 of the Notes to the Consolidated Financial Statements” in the Form 10-Q. Certain policies are considered critical because they are highly dependent upon subjective or complex judgments, assumptions and estimates. Changes in such estimates may have a significant impact on the financial statements. Management has reviewed the application of these policies with the Audit Committee of the Company’s Board of Directors. For a discussion of applying critical accounting policies, see “Critical Accounting Policies and Estimates” beginning on page 62 in the Company’s 2025 Annual Report.

​

Executive Summary

Our results of operations depend primarily on our net interest margin, which is directly impacted by the interest rate environment. The net interest margin represents interest income earned on interest-earning assets (primarily real estate loans, commercial and agricultural loans, and the investment portfolio), less interest expense paid on interest-bearing liabilities (primarily interest-bearing transaction accounts, certificates of deposit, savings and money market deposit accounts, and borrowed funds), as a percentage of average interest-earning assets. Net interest margin is directly impacted by the spread between long-term interest rates and short-term interest rates, as our interest-earning assets, particularly those with initial terms to maturity or repricing greater than one year, generally price off longer term rates while our interest-bearing liabilities generally price off shorter term interest rates. This difference in longer term and shorter term interest rates is often referred to as the steepness of the yield curve. A steep yield curve, in which the difference in interest rates between short term and long term periods is relatively large, could be beneficial to our net interest income, as the interest rate spread between our interest-earning assets and interest-bearing liabilities would be larger. Conversely, a flat or flattening yield curve, in which the difference in rates between short term and long term periods is relatively small or shrinking, or an inverted yield curve, in which short term rates exceed long term rates, could have an adverse impact on our net interest income, as our interest rate spread could decrease.

​

Results of operations may also be affected significantly by general and local economic and competitive conditions, particularly those with respect to changes in market interest rates, government policies, and actions of regulatory authorities.

​

During the first nine months of fiscal 2026, total assets increased by $121.9 million, or 2.4%. The increase was primarily attributable to an increase in net loans receivable, partially offset by decreases in cash and cash equivalents, and AFS securities. Loans, net of the ACL, increased $217.5 million; cash equivalents decreased by $99.8 million; and AFS securities decreased $21.7 million. Liabilities increased $93.0 million, or 2.1%, primarily attributable to increases in deposits of $59.5 million, accounts payable and other liabilities of $30.0 million (including a $23.7 million increase in future capital contributions for investment tax credits), securities sold under agreements to repurchase of $5.0 million, and FHLB overnight advances of $3.0 million, partially offset by decreases in accrued interest payable of $2.5 million

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[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2025-09-11. Report date: 2025-06-30.

Item 7.​ ​Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion and analysis reviews our consolidated financial statements and other relevant statistical data and is intended to enhance your understanding of our financial condition and results of operations. The information in this section has been derived from the Consolidated Financial Statements and notes thereto, which are included in Item 8 of this Form 10-K. You should read the information in this section in conjunction with the business and financial information regarding us as provided in this Form 10-K.

SELECTED CONSOLIDATED FINANCIAL INFORMATION

​

The following tables set forth selected consolidated financial information and other financial data of the Company. The summary statement of financial condition information and statement of income information are derived from our consolidated financial statements, which have been audited by Forvis Mazars, LLP. See Item 8. “Financial Statements and Supplementary Data.”  Results for past periods are not necessarily indicative of results that may be expected for any future period.

​

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(Dollars in thousands)

​

At June 30, 

Financial Condition Data:

2025

2024

2023

2022

2021

Total assets

​

$

5,019,607

​

$

4,604,316

​

$

4,360,211

​

$

3,214,782

​

$

2,700,530

Loans receivable, net

​

4,048,961

​

3,797,287

​

3,571,078

​

2,686,198

​

2,200,244

Mortgage-backed securities

​

359,494

​

304,861

​

270,252

​

170,585

​

138,341

Cash, interest-bearing deposits and investment securities

​

294,455

​

184,437

​

202,523

​

156,369

​

193,250

Deposits

​

4,281,368

​

3,943,059

​

3,725,540

​

2,815,075

​

2,330,803

Securities sold under agreement to repurchase

​

​

15,000

​

​

9,398

​

​

—

​

​

—

​

​

—

Borrowings

​

104,052

​

102,050

​

133,514

​

37,957

​

57,529

Subordinated debt

​

23,208

​

23,156

​

23,105

​

23,055

​

15,243

Stockholder's equity

​

544,692

​

488,748

​

446,058

​

320,772

​

283,423

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(Dollars in thousands, except per share data)

​

For the Year Ended June 30, 

Operating Data:

2025

2024

2023

2022

2021

Interest income

​

$

277,365

​

$

248,375

​

$

176,416

​

$

116,867

​

$

109,475

Interest expense

​

122,749

​

108,892

​

49,671

​

13,300

​

16,789

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net interest income

​

154,616

​

139,483

​

126,745

​

103,567

​

92,686

Provision (benefit) for credit losses

​

6,523

​

3,600

​

17,061

​

1,487

​

(1,024)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net interest income after provision (benefit) for credit losses

​

148,093

​

135,883

​

109,684

​

102,080

​

93,710

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Noninterest income

​

27,984

​

24,844

​

26,204

​

21,203

​

20,042

Noninterest expense

​

102,083

​

97,617

​

86,425

​

63,379

​

54,047

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Income before income taxes

​

73,994

​

63,110

​

49,463

​

59,904

​

59,705

Income taxes

​

15,416

​

12,928

​

10,226

​

12,735

​

12,525

Net Income

​

$

58,578

​

$

50,182

​

$

39,237

​

$

47,169

​

$

47,180

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Basic earnings per share available to common stockholders

​

$

5.19

​

$

4.42

​

$

3.86

​

$

5.22

​

$

5.22

Diluted earnings per share available to common stockholders

​

$

5.18

​

$

4.42

​

$

3.85

​

$

5.21

​

$

5.22

Dividends per share

​

$

0.92

​

$

0.84

​

$

0.84

​

$

0.80

​

$

0.62

​

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At June 30, 

Other Data:

2025

2024

2023

2022

2021

Number of:

Real Estate Loans

10,272

10,073

9,707

9,190

8,506

Deposit Accounts

156,155

151,374

144,219

107,038

100,407

Full service offices

63

63

63

49

47

Limited service offices

2

3

3

2

2

Loan production offices

​

2

​

2

​

—

​

—

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At or for the year ended June 30, 

Key Operating Ratios:

2025

2024

2023

2022

2021

Return on assets (net income divided by average assets)

​

1.21

%  

1.10

%  

1.03

%  

1.59

%  

1.79

%

​

​

​

​

​

​

​

​

​

​

​

​

Return on average common equity (net income available to common stockholders divided by average common equity)

​

11.37

10.74

10.39

15.44

17.69

​

​

​

​

​

​

​

​

​

​

​

​

​

Average equity to average assets

​

10.63

10.25

9.91

10.30

10.14

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest rate spread (spread between weighted average rate on all interest-earning assets and all interest-bearing liabilities)

​

2.84

2.71

3.21

3.61

3.61

​

​

​

​

​

​

​

​

​

​

​

​

​

Net interest margin (net interest income as a percentage of average interest-earning assets

​

3.40

3.27

3.54

3.72

3.77

​

​

​

​

​

​

​

​

​

​

​

​

​

Noninterest expense to average assets

​

2.11

2.14

2.27

2.14

2.05

​

​

​

​

​

​

​

​

​

​

​

​

​

Average interest-earning assets to average interest-bearing liabilities

​

120.71

121.96

123.57

124.20

122.59

​

​

​

​

​

​

​

​

​

​

​

​

​

Allowance for credit losses to gross loans(1)

​

1.26

1.36

1.32

1.22

1.49

​

​

​

​

​

​

​

​

​

​

​

​

​

Allowance for credit losses to nonperforming loans(1)

​

224.08

786.17

624.93

806.02

566.16

​

​

​

​

​

​

​

​

​

​

​

​

​

Net charge-offs (recoveries) to average outstanding loans during the period

​

0.17

0.05

0.02

0.00

0.03

​

​

​

​

​

​

​

​

​

​

​

​

​

Ratio of nonperforming assets to total assets(1)

​

0.47

0.23

0.26

0.20

0.30

​

​

​

​

​

​

​

​

​

​

​

​

​

Dividend payout ratio

​

17.72

18.98

22.00

15.25

11.87

​

(1)

Total loans before ACL and deferred loan fees at end of period.

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OVERVIEW

Southern Missouri Bancorp, Inc., is a Missouri corporation originally organized for the principal purpose of becoming the holding company of Southern Bank. The principal business of Southern Bank consists of attracting deposits from the communities it serves and investing those funds in loans secured by residential and commercial real estate, as well as commercial business and consumer loans. These funds have also been used to purchase municipal, corporate, and asset-backed investment securities, residential and commercial mortgage-backed securities (MBS) and collateralized mortgage obligations (CMOs), U.S. government and federal agency obligations and other permissible securities.

Southern Bank’s results of operations are primarily dependent on the levels of its net interest margin and noninterest income, and its ability to control operating expenses and net charge offs. Net interest margin is dependent primarily on the difference or spread between the average yield earned on interest-earning assets (including loans, mortgage-related securities, and investments) and the average rate paid on interest-bearing liabilities (including deposits, securities sold under agreements to repurchase, and borrowings), as well as the relative amounts of these assets and liabilities. Southern Bank is subject to interest rate risk to the degree that its interest-earning assets mature or reprice at different times, or on a varying basis, from its interest-bearing liabilities.

Southern Bank’s noninterest income consists primarily of fees charged on transaction and loan accounts, interchange income from customer debit and ATM card use, gains on sales of loans, trust and wealth management services, insurance brokerage commissions, and increased cash surrender value of bank owned life insurance (BOLI). Southern Bank’s operating expenses include: employee compensation and benefits, occupancy and data processing expenses, legal and professional fees, federal deposit insurance premiums, amortization of intangible assets, and other general and administrative expenses.

Southern Bank’s operations are significantly influenced by general economic conditions including monetary and fiscal policies of the U.S. government and the Federal Reserve Board. Additionally, Southern Bank is subject to policies and regulations issued by financial institution regulatory agencies including the Federal Reserve, the Missouri Division of Finance, and the Federal Deposit Insurance Corporation. Each of these factors may influence interest rates, loan demand, prepayment rates and deposit flows. Interest rates available on competing investments as well as general market interest rates influence the Bank’s cost of funds. Lending activities are affected by the demand for real estate and other types of loans, which in turn is affected by the interest rates at which such financing may be offered. Lending activities are funded through the attraction of deposit accounts consisting of checking accounts, passbook and statement savings accounts, money market deposit accounts, certificate of deposit accounts with terms of 60 months or less, securities sold under agreements to repurchase, advances from the Federal Home Loan Bank of Des Moines, and brokered deposits. The Bank intends to continue to focus on its lending programs for one- to four-family and multi-family residential real estate, commercial real estate, commercial business, and consumer financing on loans secured by properties or collateral located in its primary lending area or to borrowers who operate within that area.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Critical accounting estimates are those estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant, and provide qualitative and quantitative information necessary to understand the estimation uncertainty and the impact the critical accounting estimate has had or is reasonably likely to have on financial condition or results of operations to the extent the information is material and reasonably available. This information should include why each critical accounting estimate is subject to uncertainty and, to the extent the information is material and reasonably available, how much each estimate and/or assumption has changed over a relevant period, and sensitivity of the reported amount to the methods, assumptions and estimates underlying its calculation.

The Company has established various accounting policies, which govern the application of accounting principles generally accepted in the United States of America in the preparation of our financial statements. Our significant accounting policies are described in Item 8 of this Form 10-K under the Notes to the Consolidated Financial

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Statements. Certain accounting policies involve significant judgments and assumptions by management that have a material impact on the carrying value of certain assets and liabilities; management considers such accounting policies to be critical accounting policies. The judgments and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ from these judgments and estimates that could have a material impact on the carrying values of assets and liabilities and the results of operations of the Company.

Allowance for Credit Losses. The Company's ACL is its estimate of credit losses expected in the loan portfolio, on unfunded lending commitments, and held-to maturity securities over the expected life of those assets or in securities available-for-sale when credit loss is identified, which is limited to the difference in fair value and cost. While these estimates are based on substantive methods for determining the required allowance, actual outcomes may differ significantly from estimated results, especially when determining required allowances for larger, complex commercial credits or unfunded lending commitments to commercial borrowers. Consumer loans, including single family residential real estate, are individually smaller and generally behave in a similar manner, and loss estimates for these credits are considered more predictable. Additionally, the Company estimates the ACL as a calculation of expected lifetime credit losses utilizing a forward-looking forecast of macroeconomic conditions, which may differ significantly from actual results. Further discussion of the methodology used in establishing the allowance is provided in Note 1 and Note 3 to the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K, and in the “Financial Condition – Loans” and “Allowance for Credit Losses” sections of this Item 7.

FINANCIAL CONDITION

General. The Company experienced balance sheet growth in fiscal 2025, with total assets of $5.0 billion at June 30, 2025, reflecting an increase of $415.3 million, or 9.0%, as compared to June 30, 2024. Asset growth was attributable mainly to increases in loans, cash and cash equivalents, and available-for-sale (AFS) securities.

Cash and cash equivalents. Cash and cash equivalents were $192.9 million at June 30, 2025, an increase of $132.0 million, or 216.7%, as compared to June 30, 2024. The increase was primarily a result of organic deposit growth, in addition to growth in brokered certificates of deposits, during the period, partially offset by the funding of loan growth. Total deposits were $4.3 billion at June 30, 2025, an increase of $338.3 million, or 8.6% as compared to June 30, 2024.

Investments. AFS securities were $460.8 million at June 30, 2025, an increase of $32.9 million, or 7.7%, as compared to June 30, 2024. The increase was primarily attributable to increased holdings of residential and commercial mortgage-backed securities.

Loans. Loans, net of the ACL, were $4.0 billion at June 30, 2025, an increase of $251.7 million, or 6.6%, as compared to June 30, 2024. Gross loans increased by $250.7 million, while the ACL attributable to outstanding loan balances decreased $887,000, or 1.7%, as compared to June 30, 2024. See, “Allowance for Credit Losses” below.

The increase of $250.7 million in gross loan balances, net of fair value adjustments, was attributable to growth in residential real estate loans, commercial and industrial loans, drawn construction loan balances, multi-family real estate loans, and agricultural production draws. This was partially offset by payoffs and paydowns in non-owner occupied commercial real estate and consumer loans.

Nonperforming loans (NPLs) were $23.0 million, or 0.56% of gross loans, at June 30, 2025, as compared to $6.7 million, or 0.17% of gross loans, at June 30, 2024. Nonperforming assets (NPAs) were $23.7 million, or 0.47% of total assets, at June 30, 2025, as compared to $10.6 million, or 0.23% of total assets, at June 30, 2024.

Allowance for Credit Losses. ACL at June 30, 2025, totaled $51.6 million, representing 1.26% of gross loans and 224% of nonperforming loans, as compared to an ACL of $52.5 million, representing 1.36% of gross loans and 786% of nonperforming loans, at June 30, 2024. The Company has estimated its expected credit losses as of June 30, 2025, under ASC 326-20, and management believes the ACL as of that date was adequate based on that estimate. There remains, however, significant uncertainty as borrowers adjust to relatively high market interest rates, although the

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Federal Reserve has reduced short-term rates somewhat during this fiscal year. The decrease in the ACL was primarily attributable to net charge-offs, which reduced the required reserves for individually evaluated loans, as well as a decline in certain qualitative adjustments relevant to assessing expected credit losses. This decrease was partially offset by higher required reserves for pooled loans, reflecting management’s updated view of a deteriorating economic outlook and an increase in modeled loss drivers compared to the prior assessment as of June 30, 2024. Additional provisions were also recorded to support loan growth and overdraft exposures during fiscal year 2025. For fiscal year 2025, net charge offs totaled $6.7 million, or 0.18% as a percentage of average loans, as compared to $1.9 million, or 0.05% as a percentage of average loans, for fiscal year 2024. The increase in net charge offs in fiscal 2025 were primarily attributable to a $3.8 million special-purpose CRE loan, a $987,000 agricultural credit relationship with suspected fraudulent activity, and a $742,000 commercial and industrial charge off related to a commercial contractor. See also, “Provision for Credit Losses, under Comparison of Operating Results for the Years Ended June 30, 2025 and 2024” and Note 1 and Note 3 of the Notes to Consolidated Financial Statements, “Critical Accounting Policies”, “Financial Condition – Allowance for Credit Losses” in this Item 7, and “Asset Quality” in Item 1 of this Form 10-K.

The Company regularly reviews its ACL and makes adjustments to its balance based on management’s estimate of (1) the total expected losses included in the Company’s financial assets held at amortized cost, which is limited to the Company’s loan portfolio, and (2) any credit deterioration in the Company’s available-for-sale securities as of the balance sheet date. The Company holds no securities classified as held-to-maturity. Although the Company maintains its ACL at a level that it considers sufficient to provide for losses, there can be no assurance that future losses will not exceed internal estimates. In addition, the amount of the ACL is subject to review by regulatory agencies, which can order the Company to record additional allowances. The required ACL has been estimated based upon the guidelines in ASC Topic 326, Financial Instruments – Credit Losses. For a summary of changes in the ACL during the current and prior fiscal years, and a breakdown of the ACL by loan category as of the current and prior fiscal year end, see Description of Business – Asset Quality, Allowance for Credit Losses, contained within Item 1 of this Form 10-K.

The estimate involves consideration of quantitative and qualitative factors relevant to the loans as segmented by the Company, and is based on an evaluation, at the reporting date, of historical loss experience and peer data, coupled with qualitative adjustments to address current economic conditions and credit quality, and reasonable and supportable forecasts. Specific qualitative factors considered include, but may not be limited to:

●Changes in lending policies and/or loan review system

●National, regional, and local economic trends and/or conditions

●Changes and/or trends in the nature, volume, or terms of the loan portfolio

●Experience, ability, and depth of lending management and staff

●Levels and/or trends of delinquent, non-accrual, problem assets, or charge offs and recoveries

●Concentrations of credit

●Changes in collateral values

●Agricultural economic conditions

●Risks from regulatory, legal, or competitive factors

●Quantified supported model adjustments and general imprecision adjustments

​

Specifically, management considered the following primary items in its estimate of the ACL:

●

economic conditions and projections as provided by the Federal Open Market Committee (FOMC) were utilized in the Company’s estimate at June 30, 2025. Economic factors considered in the projections included national levels of unemployment using the high bound of the FOMC’s central tendency, and national rates of inflation-adjusted growth in the gross domestic product using the low bound of the FOMC’s central tendency. Economic conditions have modestly declined, relative to June 30, 2024;

​

●

the pace of growth of the Company’s loan portfolio, exclusive of acquisitions, relative to overall economic growth. This measure is considered to be a moderate and slightly decreasing risk factor, relative to June 30, 2024;

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●

levels and trends for loan delinquencies nationally and in the region. This is considered to be a low and slightly increasing risk factor, relative to June 30, 2024.

​

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Premises and Equipment. Premises and equipment remained unchanged at $96.0 million, as compared to June 30, 2024. Increases primarily in premises, furniture, fixtures, equipment, and right-of-use assets, were offset by depreciation.

BOLI. The Bank has purchased “key person” life insurance policies (BOLI) on employees at various times since fiscal 2003, and has acquired additional BOLI in connection with certain mergers. At June 30, 2025, the cash surrender value of all such policies was $75.7 million, up $2.1 million, or 2.8%, as compared to June 30, 2024.

Intangible Assets. The July 2009 acquisition of the Southern Bank of Commerce resulted in goodwill of $126,000. The October 2013 acquisition of Ozarks Legacy Community Financial, Inc., resulted in goodwill of $1.5 million. The August 2014 acquisition of Peoples Service Company, Inc., and its subsidiary, Peoples Bank of the Ozarks (the “Peoples Acquisition”) resulted in goodwill of $3.0 million. The June 2017 acquisition of Tammcorp, Inc., and its subsidiary, Capaha Bank (the “Capaha Acquisition”) resulted in goodwill of $4.1 million and a $3.4 million core deposit intangible which was amortized over a seven-year period using the straight-line method. The February 2018 acquisition of SMB-Marshfield resulted in goodwill of $4.4 million and a $1.3 million core deposit intangible which was amortized over a seven-year period using the straight-line method. The November 2019 Gideon acquisition resulted in goodwill of $1.0 million and a $4.1 million core deposit intangible which is being amortized over a seven-year period using the straight-line method. The May 2020 Central Federal Acquisition resulted in a bargain purchase gain of $123,000 and a $540,000 core deposit intangible which is being amortized over a six-year period using the straight-line method. The December 2021 Cairo acquisition resulted in goodwill of $442,000 and a $168,000 core deposit intangible which is being amortized over a seven-year period using the straight-line method. The February 2022 Fortune acquisition resulted in goodwill of $12.8 million and a $1.6 million core deposit intangible which is being amortized over a seven-year period using the straight-line method. The January 2023 Citizens merger resulted in goodwill of $23.5 million, as well as a $22.1 million core deposit intangible which is being amortized over a ten-year period using the straight-line method, and a $2.6 million intangible related to the acquired trust and wealth management business line which is being amortized over a ten-year period using the straight-line method. Goodwill from these acquisitions is not being amortized, but is tested for impairment at least annually.

Deposits. Deposits were $4.3 billion at June 30, 2025, an increase of $338.3 million, or 8.6%, as compared to June 30, 2024. The deposit portfolio saw increases in certificates of deposit and savings accounts, which were partially offset by decreases in interest bearing transaction accounts, noninterest-bearing transaction accounts, and money market deposit accounts.

Public unit balances totaled $550.8 million at June 30, 2025, a decrease of $43.8 million compared to June 30, 2024. Brokered deposits, comprised of certificates and money market deposits, totaled $235.1 million at June 30, 2025, an increase of $61.3 million compared to June 30, 2024. Our discussion of brokered deposits excludes those deposits originated through reciprocal arrangements. We continued to utilize reciprocal deposit programs, and at June 30, 2025, we had placed deposits of $517.4 million through reciprocal programs, down from $575.3 million a year earlier. At June 30, 2025, $260.0 million of this total reflected deposits we had placed on behalf of our public unit depositors, down from $361.0 million a year ago. The average loan-to-deposit ratio for the fourth quarter of fiscal 2025 was 94.5%, as compared to 96.3% for the same period of the prior fiscal year.

Borrowings. FHLB advances were $104.1 million at June 30, 2025, an increase of $2.0 million, or 2.0%, as compared to June 30, 2024. For both periods, the borrowings consisted only of term advances, with no overnight borrowings.

Subordinated Debt. In March 2004, $7.0 million of Floating Rate Capital Securities of Southern Missouri Statutory Trust I, with a liquidation value of $1,000 per share were issued. The securities bear interest at a floating rate based on SOFR, are now redeemable at par, and mature in 2034. In connection with its October 2013 acquisition of Ozarks Legacy, the Company assumed $3.1 million in floating rate junior subordinated debt securities. The debt

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securities had been issued in June 2005 by Ozarks Legacy in connection with the sale of trust preferred securities, bear interest at a floating rate based on SOFR, are redeemable at par, and mature in 2035. The carrying value of these debt securities was approximately $2.8 million at June 30, 2025 and at June 30, 2024. In connection with the Peoples Acquisition, the Company assumed $6.5 million in floating rate junior subordinated debt securities. The debt securities had been issued in 2005 by Peoples, in connection with the sale of trust preferred securities, bear interest at a floating rate based on SOFR, are redeemable at par, and mature in 2035. The carrying value of these debt securities was approximately $5.6 million at June 30, 2025 and at June 30, 2024. In connection with the Fortune acquisition, the Company assumed $7.5 million in fixed-to-floating rate subordinated notes. The notes had been issued in May 2021 by Fortune to a multi-lender group, bear interest through May 2026 at a fixed rate of 4.5%, and will bear interest thereafter at SOFR plus 3.77%. The notes will be redeemable at par beginning in May 2026, and mature in May 2031. The carrying value of the notes was approximately $7.5 million at June 30, 2025, as compared to $7.6 million at June 30, 2024.

Stockholders’ Equity. The Company’s stockholders’ equity was $544.7 million at June 30, 2025, an increase of $55.9 million, or 11.4%, as compared to June 30, 2024. The increase was attributable primarily to earnings retained after cash dividends paid, in combination with a $6.1 million reduction in accumulated other comprehensive losses (AOCL) as the market value of the Company’s investments appreciated due to the decrease in market interest rates. The AOCL totaled $11.4 million at June 30, 2025, as compared to $17.5 million at June 30, 2024. The Company does not hold any securities classified as held-to-maturity.

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED JUNE 30, 2025 AND 2024

Net Income. The Company’s net income for the fiscal year ended June 30, 2025, was $58.6 million, an increase of $8.4 million, or 16.7%, as compared to the prior fiscal year.

Net Interest Income. Net interest income for fiscal 2025 was $154.6 million, an increase of $15.1 million, or 10.8%, when compared to the prior fiscal year. The increase was attributable to a 6.7% increase in the average balance of interest-earning assets, and an increase in the net interest margin, from 3.27% to 3.40%. Average earning asset balance growth was due primarily to loan growth, increases in investment securities, and funds held with correspondent banks. The increase in earning asset yields, primarily attributable to the increase in loan yields, more than offset the increase in average cost of funding, contributed to the expansion in net interest margin as compared to 2024.

Interest Income. Interest income for fiscal 2025 was $277.4 million, an increase of $29.0 million, or 11.7%, when compared to the prior fiscal year. The increase was due to an increase of $286.1 million, or 6.7%, in the average balance of interest-earning assets, combined with a 27-basis point increase in the average yield earned on interest-earning assets, from 5.82% in fiscal 2024, to 6.09% in fiscal 2025.

Interest income on loans receivable for fiscal 2025 was $250.8 million, an increase of $28.3 million, or 12.7%, when compared to the prior fiscal year. The increase was due to a $257.3 million, or 6.9%, increase in the average balance of loans receivable, combined with a 33-basis point increase in the average yield earned on loans receivable. The increase in the average yield was attributed to originations and repricing of loans and borrower refinancings at current higher market interest rates compared to the average loan portfolio rates of the prior fiscal year.

Interest income on the investment portfolio and other interest-earning assets was $26.5 million for fiscal 2025, an increase of $656,000, or 2.5%, when compared to the prior fiscal year. This increase was attributable to a $28.8 million, or 5.2%, increase in the average balance of such assets. The increase in these average balances were due to increases in mortgage-backed and collateralized mortgage obligations, and correspondent balances. This was partially offset by decreases in other investment securities and FHLB stock, and a decrease in the average yield of this portfolio of 12 basis points, to 4.59%, in fiscal 2025. The decrease in yield was primarily attributable to the decrease in the short end of the yield curve compared to the year ago.

Interest Expense. Interest expense was $122.7 million for fiscal 2025, an increase of $13.9 million, or 12.7%, when compared to the prior fiscal year. The increase was due to a 14-basis point increase in the average rate paid on

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interest-bearing liabilities, to 3.25% in fiscal 2025, from 3.11% in fiscal 2024, combined with an increase of $273.4 million, or 7.8%, in the average balance of interest-bearing liabilities.

Interest expense on deposits was $115.8 million for fiscal 2025, an increase of $14.1 million, or 13.8%, as compared to the prior fiscal year. The increase was due to a 15-basis point increase in the average rate paid on interest-bearing deposits, combined with the $282.2 million, or 8.4%, increase in the average balance of those deposits. The increase in the average rate paid on deposits was attributable primarily to deposits rates, particularly certificates of deposits and savings accounts, adjusting up to higher market interest rates over the course of fiscal 2025, when compared to average rates in fiscal 2024.

Interest expense on securities sold under agreements to repurchase was $766,000 for fiscal 2025, an increase of $315,000, or 69.8%, when compared to the prior fiscal year. The increase was due primarily to a $4.9 million, or 52.5%, increase in the average balance of these securities sold and a 55-basis point increase in the average rate paid on advances. The increase in the average rate paid was attributable primarily to the term advances being made in a rate environment with higher market interest rates, compared to the portfolio of term advances in the prior year.

Interest expense on FHLB advances was $4.6 million for fiscal 2025, a decrease of $411,000, or 8.2%, when compared to the prior fiscal year. The decrease was due primarily to a $13.7 million, or 11.1%, decrease in the average balance of these advances, which was partially offset by a 13-basis point increase in the average rate paid on advances. The increase in the average rate paid was attributable primarily to the maturity of term advances with interest rates below the portfolio’s average rate.

Interest expense on subordinated debt was $1.6 million for fiscal year 2025, a decrease of $114,000, or 6.5%, when compared to the prior fiscal year. The decrease was due primarily to a 51-basis point decrease in the average rate paid on subordinated debt. The decrease in the average rate paid was attributable primarily to lower market interest rates over the course of the fiscal year, which impacted adjustable-rate debt.

Provision for Credit Losses. The Company recorded a provision for credit losses (PCL) of $6.5 million for fiscal 2025, as compared to a PCL of $3.6 million for the prior fiscal year. In fiscal 2025, the Company had a $5.8 million PCL for on-balance sheet exposure and a $676,000 PCL for off-balance sheet exposures. The increase was primarily attributable to providing for net charge-offs and to support loan growth, in addition to an increase in unfunded balances and an increase in the expected funding rate on available credit.

​

Noninterest Income. Noninterest income was $28.0 million for fiscal 2025, an increase of $3.1 million, or 12.6%, when compared to the prior fiscal year. In the prior year, $1.5 million net realized losses on AFS securities were recognized, compared to a net realized gain of $48,000 in fiscal 2025. In addition, the increase was attributable to increased other loan fees and deposit account charges and related fees. The increase in other loan fees was primarily due to an increase in loan origination volume, in both commercial and residential real estate loans. Increased deposit account charges and related fees were primarily attributable to an increase in non-sufficient fund activity and an increase in maintenance and activity fees collected. These increases were partially offset by lower other income, loan late charges, and loan servicing fees. The decrease in other noninterest income was associated with the change in accounting for realization of tax credits, as the Company has adopted the proportional amortization method under ASU 2023-02, which results in a direct reduction to the provision for income taxes in fiscal 2025. This has resulted in lower other fee income for fiscal 2025 of $701,000, as current year tax credit amortization for investments accounted for under proportional amortization reduces tax provisions. Loan servicing fees were negatively impacted by the recognition of a change in the fair value of mortgage servicing rights, which resulted in a negative adjustment of $108,000 in fiscal 2025, as compared to a benefit of $131,000 in fiscal 2024, due to changes in market rates and prepayment assumptions.

Noninterest Expense. Noninterest expense was $102.1 million for fiscal 2025, an increase of $4.5 million, or 4.6%, when compared to the prior fiscal year. The increase was primarily attributable to increases in compensation and benefits and legal and professional fees. The increase in compensation and benefits as compared to the prior year period was primarily due to increased headcount, as well as annual merit increases and inflation adjustments. The Company experienced elevated legal and professional fees associated with consulting costs related to a performance improvement project with one-time cost for this review totaling $840,000 and consulting expenses to negotiate a new contract with a

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large vendor totaling $425,000. These increases as compared to the prior year were partially offset by decreases in intangible amortization expense, as the core deposit intangible recognized in an older merger was fully amortized in the second quarter of fiscal 2025, and by reduced telecommunication expenses.

Provision for Income Taxes. The Company recorded an income tax provision of $15.4 million for fiscal 2025, an increase of $2.5 million, or 19.2%, as compared to the prior fiscal year, which was attributable to higher pre-tax income and an adjustment of tax accruals of $650,000 attributable to completed merger activity. This was partially offset by the change in accounting for recognition of tax credits accounted for under proportional amortization, as mentioned above. The effective tax rate was 20.8% for fiscal 2025, as compared to 20.5% for fiscal 2024.

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED JUNE 30, 2024 AND 2023

Net Income. The Company’s net income for the fiscal year ended June 30, 2024, was $50.2 million, an increase of $10.9 million, or 27.9%, as compared to the prior fiscal year.

Net Interest Income. Net interest income for fiscal 2024 was $139.5 million, an increase of $12.7 million, or 10.1%, when compared to the prior fiscal year. The increase was attributable to a 19.3% increase in the average balance of interest-earning assets, partially offset by a decrease in the net interest margin, from 3.54% to 3.27%. Average earning asset balance growth was due primarily to loan growth, increases in investment securities, and funds held with correspondent banks, which was attributable in part to the Citizens merger in January 2023. In addition to the increased cost of deposits, change in the interest-earning asset mix also contributed to the decline in net interest margin as higher yielding loans were a lower percentage of the mix compared to 2023.

Interest Income. Interest income for fiscal 2024 was $248.4 million, an increase of $72.0 million, or 40.8%, when compared to the prior fiscal year. The increase was due to an increase of $690.3 million, or 19.3%, in the average balance of interest-earning assets, combined with an 89-basis point increase in the average yield earned on interest-earning assets, from 4.93% in fiscal 2023, to 5.82% in fiscal 2024.

Interest income on loans receivable for fiscal 2024 was $222.5 million, an increase of $60.3 million, or 37.2%, when compared to the prior fiscal year. The increase was due to a $543.5 million, or 17.1%, increase in the average balance of loans receivable, combined with an 87-basis point increase in the average yield earned on loans receivable. The increase in the average yield was attributed to origination and repricing of loans and borrower refinancing as average market interest rates increased over the course of the fiscal year.

Interest income on the investment portfolio and other interest-earning assets was $25.9 million for fiscal 2024, an increase of $11.7 million, or 82.2%, when compared to the prior fiscal year. This increase was attributable to a 307-basis point increase in the yield on these assets, combined with a $146.9 million, or 36.5%, increase in the average balance of such assets. The increase in average yield was attributable to higher balances of variable-rate correspondent deposit balances, and the purchases and reinvestment at higher market interest rates of securities, the average balance of which were increasing over the course of the fiscal year.

Interest Expense. Interest expense was $108.9 million for fiscal 2024, an increase of $59.2 million, or 119.2%, when compared to the prior fiscal year. The increase was due to a 140-basis point increase in the average rate paid on interest-bearing liabilities, to 3.11% in fiscal 2024, from 1.72% in fiscal 2023, combined with an increase of $604.1 million, or 20.9%, in the average balance of interest-bearing liabilities.

Interest expense on deposits was $101.7 million for fiscal 2024, an increase of $57.3 million, or 129.1%, as compared to the prior fiscal year. The increase was due to a 143-basis point increase in the average rate paid on interest-bearing deposits, combined with the $582.7 million, or 21.1%, increase in the average balance of those deposits. The increase in the average rate paid on deposits was attributable primarily to higher market interest rates and a more competitive deposit environment over the course of fiscal 2024.

Interest expense on securities sold under agreements to repurchase were $451,000 for fiscal 2024, an increase of $238,000, or 111.7%, when compared to the prior fiscal year. The increase was due primarily to a $5.3 million, or

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126.6%, increase in the average balance of these securities sold, which was partially offset by a 33-basis point decrease in the average rate paid on advances. The decrease in the average rate paid was attributable primarily to the remaining term advances being made in a rate environment with lower market interest rates, compared to the portfolio of term advances in the prior year.

Interest expense on FHLB advances was $5.0 million for fiscal 2024, an increase of $1.4 million, or 37.7%, when compared to the prior fiscal year. The increase was due primarily to a $16.3 million, or 15.2%, increase in the average balance of these advances, combined with a 66-basis point increase in the average rate paid on advances. The increase in the average rate paid was attributable primarily to higher market interest rates over the course of the fiscal year, which impacted the costs of overnight borrowings and new term advances taken during the fiscal year.

Interest expense on subordinated debt was $1.7 million for fiscal year 2024, an increase of $303,000, or 21.1%, when compared to the prior fiscal year. The increase was due primarily to a 134-basis point increase in the average rate paid on subordinated debt. The increase in the average rate paid was attributable primarily to higher market interest rates over the course of the fiscal year, which impacted adjustable-rate debt.

Provision for Credit Losses. The Company recorded a provision for credit losses (PCL) of $3.6 million for fiscal 2024, as compared to a PCL of $17.1 million for the prior fiscal year. In the prior period, the larger PCL was attributable in part to the $5.2 million charge required to fund the ACL for non-purchased credit deteriorated loans acquired in the Citizens merger, along with a $1.8 million charge to fund the allowance for off-balance sheet credit exposures acquired in the Citizens merger. Exclusive of the charges required as a result of the Citizens merger, the Company would have recorded a PCL of approximately $10.1 million for fiscal 2023, reflecting a $9.0 million increase in the Company’s required ACL on outstanding loans based on organic loan growth changes in the current expected credit losses on the portfolio, and a $1.1 million increase in the required allowance for off-balance sheet credit exposure. In 2024 the company had a $6.6 million PCL for on-balance sheet exposure for loan growth and charge-offs and a $3.0 negative PCL for off-balance sheet exposures, as construction draws reduced available credit and increased on-balance sheet exposure. In addition, the required PCL was lower in fiscal 2024 due to the company’s assessment of the economic outlook, which improved as compared to its assessment as of June 30, 2023, but reserves were modestly increased due to increased loan balances, qualitative factors, and individually evaluated credits, slightly expanding the ACL as a percentage of total loans.

​

Our ACL at June 30, 2024, totaled $52.5 million, representing 1.36% of gross loans and 786% of nonperforming loans, as compared to an ACL of $47.8 million, representing 1.32% of gross loans and 624% of nonperforming loans, at June 30, 2023.  As a percentage of average loans outstanding, the Company recorded net charge offs of 0.05% during fiscal year 2024, as compared to net charge offs of 0.02% in the prior fiscal year. (See Note 1 and Note 3 of the Notes to Consolidated Financial Statements, “Critical Accounting Policies” and “Financial Condition – Allowance for Credit Losses” in this Item 7, and “Asset Quality” in Item 1 of this Form 10-K.)

​

Noninterest Income. Noninterest income was $24.8 million for fiscal 2024, a decrease of $1.4 million, or 5.2%, when compared to the prior fiscal year. Increases in bank card interchange income, wealth management fees, earnings on BOLI, and loan late charges, were more than offset by realized losses on sale of AFS securities, and lower other loan fees, other income, deposit account fees, loan servicing fees, and gains on sale of loans. Excluding the losses on sale of AFS securities, which the Company sold lower yielding securities and reinvested into higher yielding securities to improve interest income, non-interest income would have been slightly higher than the prior year. Interchange income increased due to higher card volume during the year to date, driving fee income growth. Wealth management benefitted from higher assets under management, and BOLI earnings improved due mostly to increased investments in policies, both attributable primarily to the Citizens merger and also due to asset appreciation. Also, BOLI earnings increased from higher crediting rates. These increases were more than offset by the realized losses in the investment portfolio; and inclusion in the prior-year period of a one-time gain on the sale of fixed assets of $317,000, resulting in lower other income in the current fiscal year. Other loan fees were down due to the decrease in loan origination volume, primarily in commercial and residential real estate loans, which resulted in declining recognition of new mortgage servicing rights. Deposit account charges and related fees also decreased due to changes adopted in July 2023 as to how fees are assessed on NSF items.

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Noninterest Expense. Noninterest expense was $97.6 million for fiscal 2024, an increase of $11.2 million, or 12.9%, when compared to the prior fiscal year. The increase was primarily attributable to the full year impact of the Citizens merger in the current year with the largest increases realized in compensation and benefits, occupancy and equipment, intangible amortization from the Citizens merger, and data processing expenses, partially offset by lower legal and professional costs resulting from the prior year’s impact from the Citizens merger. The increase in compensation and benefits as compared to the prior year period was primarily due to increased headcount resulting from the Citizens merger, an increase in legacy employee headcount, as well as annual merit increases and inflation adjustments. Occupancy expenses increased primarily due to facilities added through the Citizens merger, and other equipment purchases. The Company’s increase in data processing costs related to the growing volume of transaction activity, increased costs of software licensing, and new programs for lending and wealth management.

Provision for Income Taxes. The Company recorded an income tax provision of $12.9 million for fiscal 2024, an increase of $2.7 million, or 26.4%, as compared to the prior fiscal year, which was attributable to higher pre-tax income and was partially offset by a decrease in the effective tax rate to 20.5% for fiscal 2024, as compared to 20.7% for fiscal 2023.

LIQUIDITY AND CAPITAL RESOURCES

The Bank’s primary potential sources of funds include deposit growth, FHLB advances, amortization and prepayment of loan principal, investment maturities and sales, and capital generated from ongoing operations. While scheduled repayments on loans and securities as well as the maturity of short-term investments are a relatively predictable source of funding, deposit flows and loan and security prepayment rates are significantly influenced by factors outside of the Bank’s control, including general economic conditions and market competition. The Bank has relied on FHLB advances as a stable source for funding cash or liquidity needs, particularly for longer maturities.

The Bank uses its liquid assets as well as other funding sources to meet ongoing commitments, to fund loan demand, to repay maturing certificates of deposit and FHLB advances, to make investments, to fund other deposit withdrawals, and to meet operating expenses. At June 30, 2025, the Bank had outstanding commitments to extend credit of $944.0 million (including $596.9 million in unused lines of credit). Total commitments to originate fixed-rate loans with terms in excess of one year were $200.2 million at rates ranging from 4.75% to 8.28%, with a weighted-average rate of 6.96%. Management anticipates that current funding sources will be adequate to meet foreseeable liquidity needs.

For the fiscal year ended June 30, 2025, Southern Missouri increased deposits by $338.3 million and FHLB advances by $2.0 million. During the prior fiscal year, the Bank increased deposits by $226.9 million, and decreased FHLB advances by $31.5 million. At June 30, 2025, the Bank reported $1.5 billion of its single-family residential, home equity, and commercial real estate loan portfolios as eligible collateral to the FHLB for available credit of approximately $857.3 million, of which $104.1 million was advanced, while $612,000 was encumbered in relation to residential real estate loans sold onto the secondary market through the FHLB. The Bank had also pledged $386.2 million of its agricultural real estate and agricultural operating and equipment loans to the Federal Reserve Bank of St. Louis’s discount window for available credit of approximately $334.8 million, as of June 30, 2025, none of which was advanced. In addition, as of June 30, 2025, the Bank had other assets available to pledge to the FHLB and Federal Reserve to access additional liquidity. In total, FHLB borrowings are limited to 45% of Bank assets, or approximately $2.2 billion as most recently reported by the FHLB as of June 30, 2025, which means that an amount up to $2.1 billion may still be eligible to be borrowed from the FHLB, subject to available collateral. Along with the ability to borrow from the FHLB and Federal Reserve Bank of St. Louis, management believes its liquid resources will be sufficient to meet the Company’s liquidity needs.

Liquidity management is an ongoing responsibility of the Bank’s management. The Bank adjusts its investment in liquid assets based upon a variety of factors including (i) expected loan demand and deposit flows, (ii) anticipated investment and FHLB advance maturities, (iii) the impact on profitability, and (iv) asset/liability management objectives.

At June 30, 2025, the Bank had $1.2 billion in CDs maturing within one year and $2.6 billion in non-maturity deposits, as compared to $1.1 billion in CDs maturing within one year and $2.6 billion in non-maturity deposits as of June 30, 2024. Management believes that most maturing interest-bearing liabilities will be retained or replaced by new

70

Table of Contents

interest-bearing liabilities. Also, at June 30, 2025, the Bank had no overnight advances from the FHLB, $17.0 million in term FHLB advances maturing within one year, and $87.1 million in FHLB advances with a maturity date in excess of one year. Of the advances with maturity dates in excess of one year, none was eligible for early redemption by the lender within one year.

We also incur capital expenditures on an ongoing basis to expand and improve our product offerings, enhance and modernize our technology infrastructure, and to introduce new technology-based products to compete effectively in our markets. We evaluate capital expenditure projects based on a variety of factors, including expected strategic impacts (such as forecasted impact on revenue growth, productivity, expenses, service levels and customer retention) and our expected return on investment. The amount of capital investment is influenced by, among other things, current and projected demand for our services and products, cash flow generated by operating activities, cash required for other purposes and regulatory considerations. At June 30, 2025, we had other future obligations and accrued expenses of $27.3 million. Based on our current capital allocation objectives, during fiscal 2025 we project expending approximately $7.0 million to $10.0 million of cash for capital investment in technology, property, plant and equipment. In addition, for the fiscal year ending June 30, 2025, we project that our fixed commitments will include (i) $1.5 million of operating and finance lease and other fixed payments and (ii) $1.6 million of scheduled interest payments on subordinate notes. We believe that our liquid assets combined with the available lines of credit provide adequate liquidity to meet our current financial obligations for at least the next 12 months.

REGULATORY CAPITAL

Federally insured financial institutions are required to maintain minimum levels of regulatory capital. Federal Reserve regulations establish capital requirements, including a tier 1 leverage (or core capital) requirement and risk-based capital requirements. The Federal Reserve Board is also authorized to impose capital requirements in excess of these standards on individual institutions on a case-by-case basis.

At June 30, 2025, the Bank exceeded regulatory capital requirements with tier 1 capital, total risk-based capital, and common equity tier 1 capital of $494.2 million, $545.3 million and $494.2 million, respectively. The Bank’s tier 1 capital represented 10.05% of total adjusted assets and 12.09% of total risk-weighted assets, while total risk-based capital was 13.34% of total risk-weighted assets, and common equity tier 1 capital was 12.09% of total risk-weighted assets. To be considered adequately capitalized under the FDIC Prompt Corrective Action (PCA) guidelines, the Bank must maintain tier 1 capital levels of at least 4.0% of adjusted total assets and 6.0% of risk-weighted assets, total risk-based capital of 8.0% of risk-weighted assets, and common equity tier 1 capital of 4.5% of risk-weighted assets. To be considered well capitalized, the Bank must maintain tier 1 capital levels of at least 5.0% of adjusted total assets and 8.0% of risk-weighted assets, total risk-based capital of 10.0% of risk-weighted assets, and common equity tier 1 capital of 6.5% of risk-weighted assets.

At June 30, 2025, the Company exceeded regulatory capital requirements with tier 1 capital, total risk-based capital, and common equity tier 1 capital of $517.8 million, $577.2 million and $502.2 million, respectively. The Company’s tier 1 capital represented 10.61% of total adjusted assets and 12.51% of total risk-weighted assets, while total risk-based capital was 13.95% of total risk-weighted assets, and common equity tier 1 capital was 12.14% of total risk-weighted assets. Under 12 CFR Part 217 -- Capital Adequacy of Bank Holding Companies, Savings and Loan Holding Companies, and State Member Banks (Regulation Q), the Company is subject to the following minimum regulatory capital requirements: common equity tier 1 capital ratio of 4.5%, tier 1 capital ratio of 6%, total capital ratio of 8% of risk-weighted assets, and leverage ratio of 4%.

See Item 1 – Business – Regulation, and Note 12 of the Notes to the Consolidated Financial Statements contained in Item 8 of this Form 10-K for additional detail on the Company’s capital requirements.

IMPACT OF INFLATION

The consolidated financial statements and related data presented herein have been prepared in accordance with U.S. generally accepted accounting principles, which require the measurement of financial position and operating results in historical dollars without considering changes in the relative purchasing power of money over time due to inflation.

71

Table of Contents

The primary impact of inflation on the operations of the Company is reflected in increased operating costs. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, changes in interest rates generally have a more significant impact on a financial institution’s performance than does inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services. In the current interest rate environment, liquidity and maturity structure of the Company’s assets and liabilities are critical to the maintenance of acceptable performance levels.

AVERAGE BALANCE, INTEREST AND AVERAGE YIELDS AND RATES

The following table sets forth certain information relating to the Company’s average interest-earning assets and interest-bearing liabilities and reflects the average yield on assets and the average cost of liabilities for the periods indicated. These yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the years indicated. Nonaccrual loans are included with other noninterest-earning assets.

The table also presents information with respect to the difference between the weighted-average yield earned on interest-earning assets and the weighted-average rate paid on interest-bearing liabilities, or interest rate spread, which financial institutions have traditionally used as an indicator of profitability. Another indicator of an institution’s net interest income is its net yield (or net interest margin) on interest-earning assets, which is its net interest income divided by the average balance of interest-earning assets. Net interest income is affected by the interest rate spread and by the

72

Table of Contents

relative amounts of interest-earning assets and interest-bearing liabilities. When interest-earning assets approximate or exceed interest-bearing liabilities, any positive interest rate spread will generate net interest income.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Years Ended June 30, 

​

​

2025

​

2024

​

2023

(dollars in thousands)

Average

Interest and 

Yield/

Average

Interest and 

Yield/

Average

Interest and 

Yield/

​

​

Balance

​

Dividends

​

 Cost 

Balance

​

Dividends

​

 Cost

Balance

​

Dividends

​

 Cost 

Interest-earning assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Mortgage loans (1)

​

$

3,175,179

​

$

190,062

​

5.99

%

$

3,009,263

​

$

168,894

​

5.61

%

$

2,585,065

​

$

126,315

​

4.89

%

Other loans (1)

​

​

800,247

​

​

60,784

​

7.60

​

​

708,881

​

​

53,618

​

7.56

​

​

589,625

​

​

35,909

​

6.09

​

Total net loans

​

3,975,426

​

250,846

6.31

​

3,718,144

​

222,512

5.98

​

3,174,690

​

162,224

5.11

​

Mortgage-backed securities

​

​

356,293

​

​

16,567

​

4.65

​

​

304,778

​

​

14,631

​

4.80

​

​

241,642

​

​

6,967

​

2.88

​

Investment securities (2)

​

​

130,445

​

​

5,808

​

4.45

​

​

165,307

​

​

6,877

​

4.16

​

​

118,386

​

​

5,324

​

4.50

​

Other interest-earning assets

​

​

91,278

​

​

4,144

​

4.54

​

​

79,116

​

​

4,355

​

5.50

​

​

42,287

​

​

1,901

​

4.50

​

TOTAL INTEREST- EARNING ASSETS (1)

​

4,553,442

​

277,365

6.09

​

4,267,345

​

248,375

5.82

​

3,577,005

​

176,416

4.93

​

Other noninterest-earning assets (3)

​

​

291,057

​

​

—

​

—

​

​

290,952

​

​

—

​

—

​

​

234,047

​

​

—

​

—

​

TOTAL ASSETS

​

$

4,844,499

​

​

277,365

—

​

$

4,558,297

​

​

248,375

—

​

$

3,811,052

​

​

176,416

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest-bearing liabilities:

​

​

​

​

​

​

​

Savings accounts

​

$

584,185

​

​

15,733

​

2.69

​

$

382,713

​

​

8,176

​

2.14

​

$

286,959

​

​

1,623

​

0.57

​

NOW accounts

​

​

1,153,650

​

​

22,249

​

1.93

​

​

1,265,325

​

​

26,528

​

2.10

​

​

1,280,134

​

​

17,756

​

1.39

​

Money market accounts

​

​

338,132

​

​

9,735

​

2.88

​

​

403,170

​

​

12,596

​

3.12

​

​

382,032

​

​

7,846

​

2.05

​

Certificates of deposit

​

​

1,548,584

​

​

68,056

​

4.39

​

​

1,291,163

​

​

54,406

​

4.21

​

​

810,570

​

​

17,167

​

2.12

​

TOTAL INTEREST- BEARING DEPOSITS

​

3,624,551

​

115,773

3.19

​

3,342,371

​

101,706

3.04

​

2,759,695

​

44,392

1.61

​

Borrowings:

​

​

​

​

​

​

​

Securities sold under agreements to repurchase

​

​

14,330

​

​

766

​

5.35

​

​

9,398

​

​

451

​

4.80

​

​

4,148

​

​

213

​

5.13

​

FHLB advances

​

​

110,254

​

​

4,582

​

4.16

​

​

123,986

​

​

4,993

​

4.03

​

​

107,661

​

​

3,627

​

3.37

​

Junior subordinated debt

​

​

23,182

​

​

1,628

​

7.02

​

​

23,130

​

​

1,742

​

7.53

​

​

23,253

​

​

1,439

​

6.19

​

TOTAL INTEREST- BEARING LIABILITIES

​

3,772,317

​

122,749

3.25

​

3,498,885

​

108,892

3.11

​

2,894,757

​

49,671

1.72

​

Noninterest-bearing demand deposits

​

​

523,710

​

​

—

​

—

​

​

561,004

​

​

—

​

—

​

​

522,159

​

​

—

​

—

​

Other liabilities

​

​

33,370

​

​

—

​

—

​

​

31,366

​

​

—

​

—

​

​

16,484

​

​

—

​

—

​

TOTAL LIABILITIES

​

4,329,397

​

122,749

—

​

4,091,255

​

108,892

—

​

3,433,400

​

49,671

—

​

Stockholders’ equity

​

515,102

​

—

—

​

467,042

​

—

—

​

377,652

​

—

—

​

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

​

$

4,844,499

​

​

122,749

—

​

$

4,558,297

​

​

108,892

—

​

$

3,811,052

​

​

49,671

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net interest income

​

​

$

154,616

​

​

$

139,483

​

​

$

126,745

​

Interest rate spread (4)

​

​

2.84

%

​

2.71

%

​

3.21

%

Net interest margin (5)

​

​

3.40

%

​

3.27

%

​

3.54

%

Ratio of average interest-earning assets to average interest-bearing liabilities

​

120.71

%  

​

123.57

%  

​

124.20

%  

​

(1)

Calculated net of deferred loan fees, and loan discounts. Nonaccrual loans are not included in average loans.

(2)

Includes FHLB membership stock, Federal Reserve membership stock, and related cash dividends.

(3)

Includes equity securities and related cash dividends.

(4)

Represents the difference between the average rate on interest-earning assets and the average cost of interest-bearing liabilities.

(5)

Represents net interest income divided by average interest-earning assets.

​

73

Table of Contents

YIELDS EARNED AND RATES PAID

The following table sets forth for the periods and at the date indicated, the weighted average yields earned on the Company’s assets, the weighted average interest rates paid on the Company’s liabilities, together with the net yield on interest-earning assets.

​

​

​

​

​

​

​

​

​

​

For The Year Ended June 30, 

​

2025

2024

2023

Weighted-average yield on loan portfolio

6.31

%  

5.98

%  

5.11

%

Weighted-average yield on mortgage-backed securities

4.65

4.80

2.88

​

Weighted-average yield on investment securities (1)

4.45

4.16

4.50

​

Weighted-average yield on other interest-earning assets

4.54

5.50

4.50

​

Weighted-average yield on all interest-earning assets

6.09

5.82

4.93

​

Weighted-average rate paid on interest-bearing deposits

3.19

3.04

1.61

​

Weighted-average rate paid on securities sold under agreements to repurchase

5.35

4.80

5.13

​

Weighted-average rate paid on FHLB advances

4.16

4.03

3.37

​

Weighted-average rate paid on subordinated debt

7.02

7.53

6.19

​

Weighted-average rate paid on all interest-bearing liabilities

3.25

3.11

1.72

​

Interest rate spread (spread between weighted average rate on all interest-earning assets and all interest- bearing liabilities)

2.84

2.71

3.21

​

Net interest margin (net interest income as a percentage of average interest-earning assets)

3.40

3.27

3.54

​

(1)

Includes Federal Home Loan Bank and Federal Reserve Bank stock.

RATE/VOLUME ANALYSIS

The following table sets forth the effects of changing rates and volumes on net interest income of the Company. Information is provided with respect to (i) effects on interest income attributable to changes in volume (changes in volume multiplied by prior rate), (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) changes in rate/volume (change in rate multiplied by change in volume).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Years Ended June 30, 

​

Years Ended June 30, 

​

​

2025 Compared to 2024

​

2024 Compared to 2023

​

​

Increase (Decrease) Due to

​

Increase (Decrease) Due to

​

​

​

​

​

​

Rate/

​

​

​

​

​

​

​

Rate/

​

​

(dollars in thousands)

Rate

​

Volume

​

Volume

​

Net

Rate

​

Volume

​

Volume

​

Net

Interest-earning assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans receivable (1)

​

$

11,463

​

$

16,223

​

$

648

​

$

28,334

​

$

27,460

​

$

27,991

​

$

4,837

​

$

60,288

Mortgage-backed securities

​

(460)

​

2,473

​

(77)

​

1,936

​

4,633

​

1,820

​

1,211

​

7,664

Investment securities (2)

​

707

​

(1,450)

​

(326)

​

(1,069)

​

(399)

​

2,110

​

(158)

​

1,553

Other interest-earning deposits

​

(762)

​

669

​

(118)

​

(211)

​

426

​

1,656

​

373

​

2,455

Total net change in income on interest-earning assets

​

10,948

​

17,915

​

127

​

28,990

​

32,120

​

33,577

​

6,263

​

71,960

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest-bearing liabilities:

​

​

​

​

​

​

​

​

Deposits

​

1,299

​

10,789

​

1,979

​

14,067

​

34,703

​

11,149

​

11,914

​

57,766

Securities sold under agreements to repurchase

​

​

51

​

​

237

​

​

27

​

​

315

​

​

—

​

​

—

​

​

(213)

​

​

(213)

FHLB advances

​

159

​

​

(553)

​

(17)

​

(411)

​

708

​

​

550

​

108

​

1,366

Subordinated debt

​

(118)

​

4

​

—

​

(114)

​

312

​

(8)

​

(1)

​

303

Total net change in expense on interest-bearing liabilities

​

1,391

​

10,477

​

1,989

​

13,857

​

35,723

​

11,691

​

11,808

​

59,222

Net change in net interest income

​

$

9,557

​

$

7,438

​

$

(1,862)

​

$

15,133

​

$

(3,603)

​

$

21,886

​

$

(5,545)

​

$

12,738

(1)

Does not include interest on loans placed on nonaccrual status.

(2)

Does not include dividends earned on equity securities.

74

Table of Contents

Item 7A​ ​Quantitative and Qualitative Disclosures About Market Risk

The goal of the Company’s asset/liability management strategy is to manage the interest rate sensitivity of both interest-earning assets and interest-bearing liabilities in order to maximize net interest income without exposing the Company to an excessive level of interest rate risk. The Company employs various strategies intended to manage the potential effect that changing interest rates may have on future operating results. The primary asset/liability management strategy has been to focus on matching the anticipated repricing intervals of interest-earning assets and interest-bearing liabilities. At times, however, depending on the level of general interest rates, the relationship between long- and short-term interest rates, market conditions and competitive factors, the Company may increase its interest rate risk position in order to maintain its net interest margin.

In an effort to manage the interest rate risk resulting from fixed rate lending, the Company has at times utilized longer term (up to 10 year maturities) fixed-rate FHLB advances, which may be subject to early redemption, to offset interest rate risk. Other elements of the Company’s current asset/liability strategy include: (i) increasing originations of commercial real estate, commercial business loans, agricultural real estate, and agricultural operating lines, which typically provide higher yields and shorter repricing periods, but inherently increase credit risk, (ii) utilizing hedges, such as pay fixed/receive floating swaps on longer maturity 1-4 family residential real estate loans (iii) limiting the price volatility of the investment portfolio by maintaining a relatively short weighted average maturity, (iv) actively soliciting less rate-sensitive nonmaturity deposits, and (v) offering competitively priced money market accounts and CDs with maturities of up to five years. The degree to which each segment of the strategy is achieved will affect profitability and exposure to interest rate risk.

The Company continues to generate long-term, fixed-rate residential loans. During the fiscal year ended June 30, 2025, fixed rate residential loan originations totaled $141.4 million (of which $21.6 million was originated for sale into the secondary market), compared to $119.4 million during the prior fiscal year (of which $21.9 million was originated for sale into the secondary market). At June 30, 2025, the fixed-rate, single-family residential loan portfolio totaled $632.9 million, with a weighted average maturity of 163 months, compared to $622.1 million, with a weighted average maturity of 176 months at June 30, 2024. The Company originated $58.4 million in adjustable rate residential loans during the fiscal year ended June 30, 2025, compared to $109.0 million during the prior fiscal year. At June 30, 2025, fixed rate loans with remaining maturities in excess of 10 years totaled $350.4 million, or 8.7%, of loans receivable, compared to $369.8 million, or 9.7%, of loans receivable, at June 30, 2024. The Company originated $375.2 million in fixed rate commercial, commercial real estate, and multi-family loans during the year ended June 30, 2025, compared to $300.3 million during the prior fiscal year. The Company also originated $119.5 million in adjustable rate commercial, commercial real estate, and multi-family loans during the fiscal year ended June 30, 2025, compared to $109.9 million during the prior fiscal year. At June 30, 2025, adjustable-rate home equity lines of credit totaled $86.7 million, compared to $72.8 million as of June 30, 2024. At June 30, 2025, the Company’s weighted average life of its investment portfolio was 5.0 years, compared to 5.1 years at June 30, 2024. Effective duration of the portfolio indicates a relatively stable price sensitivity of approximately 2.6% per 100 basis points movement in market rates at June 30, 2025, unchanged from the year ago period. At June 30, 2025, CDs with original terms of two years or more totaled $322.5 million, compared to $335.0 million at June 30, 2024. Management continues to focus on customer retention, customer satisfaction, and offering new products to customers in order to increase the Company’s amount of less rate-sensitive deposit accounts.

INTEREST RATE SENSITIVITY ANALYSIS

The following table sets forth as of June 30, 2025, management’s estimates of the projected changes in net portfolio value in the event of 100, 200, 300, and 400 basis point, instantaneous and permanent parallel increases or decreases in market interest rates. The table for June 30, 2024, contains management’s estimates of the projected changes in net portfolio value in the event of 100, 200, and 300 basis point, instantaneous and permanent parallel increases or decreases in market interest rates.

Computations of prospective effects of hypothetical interest rate changes are based on an internally generated model using actual maturity and repricing schedules for the Bank’s loans and deposits, and are based on numerous assumptions, including relative levels of market interest rates, loan repayments and deposit run-offs. Further, the

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computations do not consider any reactions that the Bank may undertake in response to changes in interest rates. These projected changes should not be relied upon as indicative of actual results in any of the aforementioned interest rate changes.

Management cannot accurately predict future interest rates or their effect on the Bank’s NPV in the future. The shape of the yield curve may vary in certain interest rate environments and is not captured in an instantaneous parallel shock. Certain shortcomings are inherent in the method of analysis presented in the computation of NPV. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in differing degrees to changes in market interest rates. Additionally, certain assets, such as adjustable-rate loans, have an initial fixed rate period, typically from one to seven years, and over the remaining life of the asset changes in the interest rate are restricted. In addition, the proportion of adjustable-rate loans in the Bank’s portfolios could decrease in future periods due to refinancing activity if market interest rates remain steady in the future. Further, in the event of a change in interest rates, prepayment and early withdrawal levels could deviate significantly from those assumed in the table. Finally, the ability of many borrowers to service their adjustable-rate debt may decrease in the event of an interest rate increase.

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​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2025

​

​

​

​

​

​

​

​

​

​

NPV as Percentage of

​

​

Net Portfolio

​

PV of Assets

Change in Rates

Value

Change

% Change

NPV Ratio

Change

​

​

(dollars in thousands)

​

(%)

​

(basis points)

​

+400 bp

​

$

480,630

​

$

(94,952)

​

(16)

​

10.19

​

(140)

​

+300 bp

​

​

512,685

​

$

(62,896)

(11)

​

10.87

​

(72)

​

+200 bp

​

540,045

​

(35,536)

(6)

​

11.25

​

(35)

​

+100 bp

​

561,455

​

(14,127)

(2)

​

11.50

​

(10)

​

0 bp

​

575,582

​

—

—

​

11.60

​

—

​

‑100 bp

​

583,974

​

8,392

1

​

11.58

​

(2)

​

‑200 bp

​

581,715

​

6,133

1

​

11.37

​

(23)

​

‑300 bp

​

​

568,247

​

​

(7,335)

​

(1)

​

10.95

​

(65)

​

‑400 bp

​

552,615

​

(22,967)

(4)

​

10.49

​

(111)

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2024

​

​

​

​

​

​

​

​

​

​

NPV as Percentage of

​

​

Net Portfolio

​

PV of Assets

Change in Rates

Value

Change

% Change

NPV Ratio

Change

​

​

(dollars in thousands)

​

(%)

​

(basis points)

​

+300 bp

​

$

355,100

​

$

(117,925)

(25)

​

8.49

​

(211)

​

+200 bp

​

398,386

​

(74,640)

(16)

​

9.32

​

(129)

​

+100 bp

​

438,278

​

(34,748)

(7)

​

10.03

​

(57)

​

0 bp

​

473,026

​

—

—

​

10.60

​

—

​

‑100 bp

​

502,260

​

29,235

6

​

11.03

​

43

​

‑200 bp

​

517,334

​

44,308

9

​

11.16

​

55

​

‑300 bp

​

512,487

​

39,461

8

​

10.89

​

28

​

​

The Company’s growth strategy has included origination of fixed-rate loans, as discussed under “Quantitative and Qualitative Disclosures About Market Risk,” above. Our fixed rate loan portfolio and the behavior of fixed-rate borrowers in a higher interest rate environment, especially over the course of fiscal 2023 and 2024, pressured our NPV. Since June 30, 2024, market interest rates at the mid-point of the curve have decreased, positively impacting the modeled value of our fixed rate loans and bonds at June 30, 2025. Also benefiting the NPV was an overall increase in earning asset yields compared to June 30, 2024, which was primarily attributable to an increase in loan yields, as securities and other interest earning asset yields decreased over this period. The decrease in rates had an inverse impact on liabilities, primarily attributable to the modeled value of the deposit portfolio. This was partially offset by a decrease in the cost of deposits since June 30, 2024. The Company’s sensitivity has also decreased in this period due to an increase in cash balances and a slight decrease in fixed rate loans as a percentage of the total portfolio, as well as a slight reduction in the duration of fixed-rate loans in total. In addition to these on-balance sheet changes, the Company also increased the notional amount of its pay-fixed/receive-floating interest rate swaps, designed to hedge the residential loan portfolio

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against the risk of rising interest rates, to $60 million in fiscal 2025, as compared to $40 million in similar interest rate swaps outstanding at June 30, 2024. $10 million of this additional notional amount is forward starting in the second quarter of fiscal 2026. The Company continues to manage its balance sheet to maximize earnings through interest rate cycles, while maintaining safe and sound risk management practices. Over time, the Company has worked to limit its exposure to rising rates by increasing the share of funding on its balance sheet obtained through lower cost non-maturity transaction accounts and retail time deposits, and by limiting short-term FHLB borrowings. See information regarding the Company’s derivative financial agreements in Note 17: Derivative Financial Instruments of these Notes to Consolidated Financial Statements.

The Bank’s board of directors is responsible for reviewing asset and liability management policies. The Bank’s Asset/Liability Committee meets monthly to review interest rate risk and trends, as well as liquidity, capital ratios, and other requirements. The Bank’s management is responsible for administering the policies and determinations of the board of directors with respect to the Bank’s asset and liability management goals and strategies.

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