Call Start: 10:30 January 1, 0000 10:59 AM ET

Southern Missouri Bancorp, Inc. (NASDAQ:SMBC)

Q3 2022 Earnings Conference Call

April 26, 2022, 10:00 AM ET

Company Participants

Greg Steffens – President and Chief Executive Officer

Matt Funke – Chief Financial Officer

Conference Call Participants

Andrew Liesch – Piper Sandler

Eleanor Hagan – Keefe, Bruyette & Woods

Operator

Hello and welcome to the Southern Missouri Bancorp Quarterly Earnings Conference Call. My name is Alex and will be coordinating the call today. [Operator Instructions] I will now hand over to your host, Matt Funke, CFO for Southern Missouri, over to you. Matt.

Matt Funke

Thank you, Alex. Good morning, everyone. This is Matt Funke, CFO with Southern Missouri Bancorp. Thanks for joining us today. The purpose of the call is to review the information and data presented in our quarterly earnings release dated Monday, April 25th, 2022 and to take your questions. We may make certain forward-looking statements during today's call and we refer you to our cautionary statement regarding forward-looking statements contained in the press release. I'm joined on the call today by Greg Steffens, our President and CEO. Greg will lead off our conversation and then with commentary on our current operations or lending activity and credit quality measures. Greg.

Greg Steffens

Thank you, Matt, and good morning, everyone. This is Greg Steffens. Thank you, and we appreciate you joining us today. First item I would like to note is that we completed our merger with Fortune Financial Corporation Locations in the St. Louis Metropolitan area in late February. We completed system conversions on that same weekend and operations have been running smoothly since the acquisition. As for our COVID update, as most of the U.S., our market areas saw a rapid decline in reporting cases of COVID and hospitalizations beginning in February, and dropped to the lowest levels since the beginning of the pandemic.

Scheduled team members have not been an issue with COVID for the last several months, which has been a welcome relief. We do note that there are a few areas of the country where new variants may be pushing infection rates in the wrong direction. But it's hard to imagine that we would see another wave or anything in our areas that would result in any significant mitigation efforts that would affect our business activity or our customers. Our borrower's credit performance remained strong.

We noted in January that we were working with two hotel industry relationship loans totaling just under $24 million with business models that were particularly impacted by the pandemic. We've seen improvement as hoped for on the performance on those properties and one is returned to scheduled principal and interest payments. The second comprised of 3 loans, has not yet moved to principal and interest. And we've moved it to substandard as a result of that. We do expect they return to principal and interest payments by the end of the June quarter on those credits.