SMBC Stock Forecast & Price Target

Southern Missouri Bancorp has demonstrated strong financial fundamentals, characterized by a robust growth in tangible book value (TBV) and tangible common equity (TCE), which increased by 4% and 30 basis points respectively over the last quarter, driven by impressive profitability, as indicated by return on assets (ROA) of 1.23% and return on tangible common equity (ROTCE) of 12.9%. The company's efficiency ratio is expected to improve significantly, projected to reach 49% by the fourth quarter of fiscal year 2027, supported by a favorable outlook for net interest income (NII) growth spurred by the upward repricing of fixed-rate loans and reduced funding costs. Additionally, projections for TCE suggest a steady increase to approximately 10.3% by fiscal year 2026 and 11.3% by fiscal year 2027, underscoring the company's capacity for sustained profitability and growth amidst favorable market dynamics.

Southern Missouri Bancorp has reported operating expenses of $25.1 million, which is a 4% decrease quarter-over-quarter but still falls short of expectations, primarily due to reduced salaries and employee benefits. The company's forecast predicts a decline in revenues with a projected 5% decrease in fiscal year 2026, raising concerns about slower loan, core deposit, and fee income growth, as well as potential credit quality deterioration. Additionally, the risks associated with higher operating expenses and macroeconomic factors further exacerbate the negative outlook for the bank's financial performance going forward.