On Tuesday, Stephens began reporting on Southern Missouri Bancorp (NASDAQ:), assigns the stock an “Overweight” rating and sets a price target of USD 60.00.

The company highlighted Southern Missouri Bancorp’s consistent profitability, characterized by robust return on assets (ROAA), efficiency and growth in tangible book value per share (TBVPS) over the past decade.

The company’s focus on maintaining high credit quality was also highlighted, with average net charge-offs (NCOs) over the past ten years being just 4 basis points.

Southern Missouri Bancorp, which went public in 1994, has posted a compound annual growth rate (CAGR) of 10%, outperforming the BANK index, which posted a CAGR of 6% over the same period. The bank’s relative outperformance has been particularly strong since 2011.

Stephens pointed to easing pricing pressures in the deposit business and the ongoing revaluation of earnings assets as factors that could lead to an expansion of the net interest margin in the short term.

The analysis also suggested that Southern Missouri Bancorp is likely to benefit from lower interest rates, which could further accelerate NIM performance.

In addition, the bank’s position in fragmented markets and its active acquisition history were cited as advantageous for potential banking merger and acquisition (M&A) activities.

Stephen’s positive outlook for Southern Missouri Bancorp is based on the bank’s past performance indicators and its strategic growth direction.

The Overweight rating indicates that the firm expects the stock to outperform the average return of stocks it covers over the next 12 to 18 months. The $60 price target reflects the firm’s confidence in the bank’s potential for continued financial success and outperformance of the market.

In other recent news, Southern Missouri Bancorp reported an increase in profitability for the June quarter, which marked the end of its fiscal year. The company announced a 9.5% increase in its quarterly dividend and reported robust loan growth.

Earnings per share for the full fiscal year were $4.42, up from $3.85 a year earlier. The company’s net interest margin and noninterest income increased, while expenses decreased slightly.

Southern Missouri Bancorp expects loan growth and is looking to expand its loan portfolio in the next fiscal year. The company is also exploring potential mergers and acquisitions to achieve scale in target markets.

Despite a decline in earnings per share for the quarter compared to the same period last year, the company reported an increase in profitability in a challenging interest rate environment.

These recent developments reflect Southern Missouri Bancorp’s resilience and strategic growth in the current economic climate. The company’s focus on loan growth and potential market expansion through mergers and acquisitions, as well as maintaining strong credit quality, positions it well for the future.

InvestingPro Insights

In line with Stephens’ bullish reporting, Southern Missouri Bancorp (NASDAQ:SMBC) has financial metrics that could be of interest to investors looking for stable growth. InvestingPro’s data shows a healthy market cap of $560.17 million and a P/E ratio of 10.89, suggesting the stock is trading at a reasonable price relative to its near-term earnings growth. The company’s revenue has grown nearly 30% over the trailing twelve months through Q3 2024, a testament to its robust performance in the financial sector.

InvestingPro’s picks paint a mixed picture, but with notable highlights. Southern Missouri Bancorp has increased its dividend for 12 consecutive years and maintained dividend payments for 30 consecutive years, indicating a strong commitment to returning value to shareholders. In addition, the company has been profitable over the past twelve months and analysts expect it to remain profitable this year. The bank’s strong return over the past three months, with a total share price return of 19.08%, is in line with the positive sentiment expressed by Stephens.

For investors seeking more detailed analysis and additional insights, more InvestingPro tips are available at https://www.investing.com/pro/SMBC. These tips provide more information on Southern Missouri Bancorp’s financial health and future prospects, which can help investors make more informed decisions.

This article was created with the help of AI and reviewed by an editor. For more information, see our Terms and Conditions.