Southern Missouri Bancorp (SMBC)

The sleeper story is the broken NPA promise: Greg Steffens told the Street last quarter he was 'pretty optimistic' NPAs would improve this quarter and next, and instead they rose $1.5M to $33.5M, a miss management quietly papered over by emphasizing classified loan and NPL improvement instead. The obvious headline, a 14% sequential EPS beat to $1.83, is mostly a tax-rate mirage: the effective rate cratered to 11.9% from a guided 19.5-20% run-rate, and management says that benefit won't recur in FY27. The binding constraint going forward is funding, not loan demand: with 25% of deposits indexed to the 91-day T-bill and $1.3B of CDs repricing at rates above maturing levels versus only $550M of favorably-repricing fixed loans, core NIM is set to compress even as loan growth is deliberately throttled to what core deposits can fund. My view changes if Q1 FY27 shows NPAs actually declining as newly re-promised, and if the FY27 effective tax rate holds inside the stated 19-20% band without another 'one-time' credit rescuing the print.