SMBC Stock Forecast & Price Target

Southern Missouri Bancorp demonstrated solid growth in tangible book value (TBV) and tangible common equity (TCE), increasing by 4% and 30 basis points quarter-over-quarter, respectively, highlighting strong profitability with a return on assets (ROA) of 1.23% and a return on tangible common equity (ROTCE) of 12.9%. The outlook for the efficiency ratio is positive, projected to improve to 49% by FY4Q27, fueled by a robust net interest income (NII) growth driven by the upward repricing of fixed-rate loans coupled with declining funding costs. Moreover, the company's TCE is expected to rise to between 10.3% and 11.3% by FY4Q26 and FY4Q27, supported by expanding profit after tax (PAA) and favorable lending conditions, positioning Southern Missouri Bancorp for continued financial strength.

Southern Missouri Bancorp has reported operating expenses of $25.1 million, which is 4% lower sequentially but still underperformed expectations, primarily due to decreased salaries and employee benefits. The company anticipates a decline in fiscal year 2026, alongside risks related to slower-than-expected growth in loans, core deposits, and fee income, as well as potential deterioration in credit quality and increased operating expenses. Additionally, the allowance for credit losses (ACL) has fallen to 1.24% of loans, which remains in line with peers but suggests challenges ahead with loan growth expectations impacting overall financial stability.