SOUTHERN MISSOURI BANCORP, INC.
For the period ended Jun 30, 2026. Filed Sep 11, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Sep 11, 2026
SMBC$70.46-0.3%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-K
Period ended 2025-06-30; filed 2025-09-11.
0001558370-25-012001
Item 1A. Risk FactorsCurrent report: 10-K
Period ended 2026-06-30; filed 2026-09-11.
0001104659-26-107119
Item 1A. Risk FactorsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 106 previous paragraphs and 120 current paragraphs.
73 unchanged; 21 reworded; 20 added; 9 removed; 3 previous and 6 current paragraphs rearranged.
Tables are not compared: 34 previous and 35 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
operations and financial condition. Furthermore, increases in employee compensation and benefits costs, occupancy, technology, insurance and other operating costs could increase our expenses and reduce our profitability. Any of these factors could have a material adverse effect on our business, results of operations and financial condition.
Current report
affect the composition and stability of our deposit base, as customers may move funds among deposit products or from deposits to other investments, which could increase our funding costs and adversely affect our net interest margin. They could also move their funds out of the Bank into other investment products, which could result in an increase in funding costs to replace these funds. Any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition and results of operations. See also, Part II, Item 7(a) “Interest Rate Sensitivity Analysis”.
Current report
Liquidity is essential to our business and our ability to meet the financial obligations of our customers, fund loans and investments, and satisfy deposit withdrawal requests. Our primary sources of liquidity include deposits, repayments and maturities of loans and investment securities, proceeds from the sale or maturity of investment securities, borrowings from the Federal Home Loan Bank and other financial institutions, and other sources of funding. Our deposits represent our primary source of funding, and we compete with banks, credit unions, money market funds and other financial institutions for deposits. Changes in interest rates, customer preferences, market conditions or concerns about the financial condition of financial institutions could cause customers to withdraw or transfer deposits, potentially at a rapid pace. A significant portion of our deposits may also consist of balances that exceed applicable FDIC insurance limits. The loss of significant deposits could reduce our liquidity and increase our reliance on wholesale or other sources of funding, which may be more expensive or less readily available. Our access to these sources of liquidity could be adversely affected by economic conditions, market disruptions, changes in interest rates, regulatory requirements, the financial condition or performance of the Company, or other factors beyond our control.
Current report
The level of our non-owner occupied commercial real estate portfolio may subject us to additional regulatory scrutiny.
Current report
Commercial real estate lending represents a significant portion of our loan portfolio. Although our commercial real estate concentration is currently below the supervisory screening criteria under the interagency guidance, we continue to maintain enhanced risk management, monitoring and reporting processes appropriate for the size and composition of our commercial real estate portfolio. These processes include monitoring our commercial real estate concentrations by property type and other relevant risk characteristics and assessing the potential impact of changes in economic and commercial real estate market conditions.
Current report
Our commercial real estate concentration could increase in the future and may approach or exceed the supervisory screening criteria. If this occurs, we may be subject to additional costs. In addition, we may determine to slow the growth of our commercial real estate portfolio or particular concentrations within that portfolio. Any decision to limit or slow commercial real estate lending could adversely affect our asset growth, net interest margin, earnings or other strategic objectives.
Current report
Climate change may materially affect our business and the value of collateral securing our loans.
Current report
Climate change and severe weather events may adversely affect our customers, the communities in which we operate and the value and condition of real estate and other assets securing our loans. The frequency, severity and geographic distribution of severe weather events, including storms, flooding, droughts, wildfires and other natural disasters, may affect property values, business operations, insurance availability and costs, and the financial condition of our borrowers.
Current report
The physical effects of severe weather events could damage or reduce the value of real estate and other collateral securing our loans. In addition, borrowers may experience business interruptions, property damage, increased operating or insurance costs, loss of income or other financial difficulties as a result of severe weather events. If insurance coverage is unavailable, inadequate or insufficient to cover losses to collateral or other property, the resulting deterioration in the value of collateral or the borrower's financial condition could increase our credit losses.
Current report
Climate-related risks may also affect regional and local economic conditions and the financial condition of businesses and consumers in our markets. In addition, changes in laws, regulations, market practices, technology or consumer preferences associated with efforts to address climate change could affect certain of our borrowers or industries and could indirectly affect our credit exposure to those borrowers. The extent and timing of these effects are difficult to predict and may vary significantly across geographic regions and industries.
Current report
Although the federal banking agencies have withdrawn their interagency Principles for Climate-Related Financial Risk Management for Large Financial Institutions, financial institutions remain subject to existing safety-and-soundness requirements to identify, monitor and manage material risks appropriate to the size, complexity and risk of their activities.
Current report
The effects of climate change, severe weather events and related economic or financial impacts could increase our credit, operational or other risks and could have a material adverse effect on our business, results of operations and financial condition.
Current report
Our business depends heavily on information technology systems, including systems used to process and maintain customer information, deposits, loans, securities, payments and other financial transactions. We also rely on third-party service providers for certain technology, data processing, communications, cloud-based and other services. A failure, interruption, cybersecurity incident or other disruption affecting our systems or those of our third-party service providers could adversely affect our ability to conduct business and serve our customers.
Current report
Financial institutions and their service providers continue to face increasingly sophisticated cybersecurity threats, including ransomware, malware, phishing, social engineering, credential theft, denial-of-service attacks, business email compromise, fraud and other attempts to obtain unauthorized access to systems or confidential information. The techniques used to obtain unauthorized access or disrupt systems are continually evolving and may be difficult to detect or prevent. The increasing use of mobile and online banking, cloud computing, remote access, artificial intelligence and other technologies may increase the number and complexity of potential vulnerabilities and attack vectors.
Current report
A cybersecurity incident or other technology disruption could result in the theft, destruction, loss, alteration or unauthorized disclosure of confidential, proprietary or customer information; unauthorized transactions or fraud; disruption of our operations; damage to our systems or those of our service providers; or the inability of our customers to access banking services. We may also experience business interruption, reputational damage, loss of customers, increased operating costs or other adverse consequences. Although we have policies, procedures and controls designed to prevent, detect and respond to cybersecurity incidents and other technology disruptions, we cannot guarantee that these measures will prevent or adequately mitigate every incident.
Current report
Our reliance on third-party service providers also exposes us to risks arising from the cybersecurity practices, systems and controls of those providers. A cybersecurity incident or operational failure at a significant service provider could adversely affect us even if our own systems and controls remain secure. In addition, a disruption affecting multiple
Current report
financial institutions or critical third-party providers could limit the availability of alternative services and make recovery more difficult.
Current report
Cybersecurity incidents and other technology-related events may also subject us to regulatory scrutiny, increased compliance costs, contractual liabilities, litigation, claims for damages, remediation expenses and other financial losses. We may be required to notify affected customers, regulators or other parties following certain incidents, and applicable laws and regulations governing cybersecurity, privacy and data protection may impose additional obligations and costs. The costs associated with investigating, responding to and remediating a significant cybersecurity incident could be substantial.
Current report
As cybersecurity threats continue to evolve, we may be required to devote additional financial and operational resources to protecting our systems, enhancing our controls, replacing or upgrading technology, and responding to incidents. Despite these efforts, there can be no assurance that our information technology systems, or those of our third-party service providers, will not experience failures, interruptions or cybersecurity incidents. Any such event could have a material adverse effect on our business, reputation, financial condition and results of operations.
Removed paragraphs (9)
Previous report
We currently exceed thresholds defined in interagency guidance on commercial real estate concentrations, and as such, we may incur additional expense or slow the growth of certain categories of commercial real estate lending.
Previous report
The Bank and Company may see its non-owner occupied commercial real estate lending grow as a percentage of total regulatory capital, or it may slow the growth of this type of lending activity. Should we continue to grow this category of our loan portfolio, we may incur additional expense to meet increasing supervisory expectations related to this lending activity. If we slow the growth of commercial real estate loans generally, or particular concentrations of borrowers or categories of properties within that definition, we may be negatively impacted in terms of our asset growth, net interest margin and earnings, leverage, or other targets.
Previous report
Climate change and related legislative and regulatory initiatives may materially affect our business and results of operations.
Previous report
The effects of climate change continue to create an alarming level of concern for the state of the global environment. As a result, the global business community has increased its political and social awareness surrounding the issue, and the United States has entered into international agreements in an attempt to reduce global temperatures, such as reentering the Paris Agreement. Further, the U.S. Congress, state legislatures and federal and state regulatory agencies continue to propose numerous initiatives to supplement the global effort to combat climate change. Similar initiatives can be expected to be implemented by the federal banking regulators, including potentially increasing supervisory expectations with respect to banks’ risk management practices, accounting for the effects of climate change in stress testing scenarios and systemic risk assessments, revising expectations for credit portfolio concentrations based on climate-related factors and encouraging investment by banks in climate-related initiatives and lending to communities disproportionately impacted by the effects of climate change. The lack of empirical data surrounding the credit and other financial risks posed by climate change render it difficult, or even impossible, to predict how specifically climate change may impact our financial condition and results of operations. however, the physical effects of climate change may also directly impact us. Specifically, unpredictable and more frequent weather disasters may adversely impact the real property, and/or the value
Previous report
of the real property, securing the loans in our portfolios. Additionally, if insurance obtained by our borrowers is insufficient to cover any losses sustained to the collateral, or if insurance coverage is otherwise unavailable to our borrowers, the collateral securing our loans may be negatively impacted by climate change, natural disasters and related events, which could impact our financial condition and results of operations. Further, the effects of climate change may negatively impact regional and local economic activity, which could lead to an adverse effect on our customers and impact the communities in which we operate. Overall, climate change, its effects and the resulting, unknown impact could have a material adverse effect on our financial condition and results of operations.
Previous report
Information technology systems are critical to our business. We use various technology systems to manage our customer relationships, general ledger, securities investments, deposits, and loans. We have established policies and procedures to prevent or limit the impact of system failures, interruptions, and security breaches, including privacy breaches and cyber-attacks, but such events may still occur or may not be adequately addressed if they do occur.
Previous report
There have been increasing efforts by third parties to breach data security at financial institutions. There have been a number of instances involving financial services and consumer-based companies reporting the unauthorized disclosure of client or customer information or the destruction or theft of corporate data. Although we take protective measures, the security of our computer systems, software, and networks may be vulnerable to breaches, unauthorized access, misuse, computer viruses, or other malicious code and cyber-attacks that could have an impact on information security. Because the techniques used to cause security breaches change frequently, we may be unable to proactively address these techniques or to implement adequate preventative measures.
Previous report
Information security risks continue to increase due to new technologies, the increasing use of the Internet and telecommunication technologies (including mobile devices) to conduct financial and other business transactions, and the increasing sophistication and activities of organized crime, perpetrators of fraud, hackers, and others. The Company makes significant investments in various technology to identify and prevent intrusions into its information system. The Company also has policies and procedures designed to prevent or limit the effect of failure, interruption or security breach of its information systems and performs regular audits using both internal and outside resources. However, there can be no assurances that any such failures, interruptions or security breaches will not occur, or if they do occur, that they will be adequately addressed. In addition to unauthorized access, denial-of-service attacks, or other operational disruptions could overwhelm Company websites and prevent the Company from adequately serving customers. Should any of the Company’s systems become compromised or customer information be obtained by unauthorized parties, the reputation of the Company could be damaged, relationships with existing customers may be impaired, and the Company could be subject to lawsuits, all of which could result in a material adverse effect on the Company’s business, financial condition and results of operations.
Reworded paragraphs (21)
Previous wording
Our business is directly affected by market conditions, trends in industry and finance, legislative and regulatory changes, and changes in governmental monetary and fiscal policies and inflation, all of which are beyond our control. Future deterioration in economic conditions, particularly within our primary market area in Missouri and northern Arkansas, could result in the following consequences, among others, any of which could hurt our business materially:
Current wording
Our business is directly affected by broad macroeconomic and policy factors including, inflation or deflation, changes in monetary policy, interest rate volatility, trends in industry and finance, legislative and regulatory changes, and changes in governmental monetary and fiscal policies, all of which are beyond our control. Future deterioration in economic conditions including declining employment, reduced consumer spending, business failures or adverse weather events, particularly within our primary market area, could result in the following consequences, among others, any of which could hurt our business materially:
Previous wording
Inflation rose sharply beginning in late 2021 to levels not seen in more than 40 years before moderating in 2023 and 2024. While inflationary pressures have eased, inflation remains above pre-2021 levels and continues to create uncertainty for our customers and for our operating costs. Small and medium-sized businesses may be impacted more during periods of high inflation, as they are not able to leverage economies of scale to mitigate cost pressures compared to larger businesses. Consequently, the ability of our business customers to repay their loans may deteriorate, and in some cases this deterioration may occur quickly, which would adversely impact our results of operations and financial condition. Furthermore, a prolonged period of inflation could cause wages and other costs to the Company to increase, which could adversely affect our results of operations and financial condition.
Current wording
Inflation and higher costs for goods, services, labor and other operating expenses could adversely affect our customers and our business. Although inflationary pressures have moderated from the elevated levels experienced in recent years, the continued uncertainty surrounding inflation, interest rates and other economic conditions could affect consumer and business activity and the financial condition of our customers. Small and medium-sized businesses may be impacted more during periods of high inflation, as they are not able to leverage economies of scale to mitigate cost pressures compared to larger businesses. Consequently, the ability of our business customers to repay their loans may deteriorate, and in some cases this deterioration may occur quickly, which would adversely impact our results of
Previous wording
The Financial Accounting Standards Board (FASB), adopted Accounting Standards Update (ASU), 2016-13 “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” on June 16, 2016, which changed previous allowance for loan losses methodology to consider current expected credit losses (CECL). This accounting pronouncement was applicable to us effective for our fiscal year beginning July 1, 2020. The federal banking regulators, including the Federal Reserve have adopted rules that gives a banking organization the option to phase in over a three-year or five-year period the day-one adverse effects of CECL on its regulatory capital. We elected the five-year period for our Company.
Current wording
The Financial Accounting Standards Board (FASB), adopted Accounting Standards Update (ASU), 2016 13 “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” on June
Previous wording
At June 30, 2025, our nonperforming assets were $23.7 million, or 0.47% of total assets. Our nonperforming assets adversely affect our net income in various ways:
Current wording
At June 30, 2026, our nonperforming assets were $33.5 million, or 0.64% of total assets. Our nonperforming assets adversely affect our net income in various ways:
Previous wording
Our construction loan portfolio, which totaled $332.4 million, or 8.2% of loans, net, at June 30, 2025, includes residential and non-residential construction and development loans. Construction and development lending, especially non-residential construction and development lending, is generally considered to have more complex credit risks than traditional one-to-four-family residential lending because the principal is concentrated in a limited number of loans with repayment dependent on the successful completion and sale, leasing, or operation of the related real estate project. Consequently, these loans are often more sensitive to adverse conditions in the real estate market or the general economy than other real estate loans. These loans are generally less predictable and more difficult to evaluate and monitor and collateral may be difficult to dispose of in a market decline. Additionally, we may experience significant construction credit losses because independent appraisers or project engineers inaccurately estimate the cost or value of construction loan projects.
Current wording
Our construction loan portfolio, which totaled $310.0 million, or 7.1% of loans at June 30, 2026, includes residential and non-residential construction and development loans. Construction and development lending, especially non-residential construction and development lending, is generally considered to have more complex credit risks than traditional one-to-four-family residential lending because the principal is concentrated in a limited number of loans with repayment dependent on the successful completion and sale, leasing, or operation of the related real estate project. Consequently, these loans are often more sensitive to adverse conditions in the real estate market or the general economy than other real estate loans. These loans are generally less predictable and more difficult to evaluate and monitor and collateral may be difficult to dispose of in a market decline. Additionally, we may experience significant construction credit losses because independent appraisers or project engineers inaccurately estimate the cost or value of construction loan projects.
Previous wording
At June 30, 2025, 55.9% of our loans, net, consisted of commercial real estate, excluding construction as previously mentioned above, and commercial business loans to small and mid-sized businesses, generally located in our primary market area, which are the types of businesses that have a heightened vulnerability to local economic conditions. At June 30, 2025, our loan portfolio included $1.8 billion of commercial real estate loans and $510.3 million of commercial business loans. The credit risk related to these types of loans is considered to be greater than the risk related to one- to four-family residential loans because the repayment of commercial real estate loans and commercial business loans typically is dependent on the successful operation and income stream of the borrower’s business or the real estate securing the loans as collateral, which can be significantly affected by economic conditions. Additionally, commercial loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to residential real estate loans. If loans that are collateralized by real estate become troubled and the value of the real estate has been significantly impaired, then we may not be able to recover the full contractual amount of principal and interest that we anticipated at the time we originated the loan, which could require us to increase our provision for credit losses and adversely affect our operating results and financial condition. Commercial loans not collateralized by real estate are often secured by collateral that may depreciate over time, be difficult to appraise and fluctuate in value (such as accounts receivable, inventory and equipment).
Current wording
At June 30, 2026, 55.8% of our loans consisted of commercial real estate, excluding construction as previously mentioned above, and commercial business loans to small and mid-sized businesses, generally located in our primary market area, which are the types of businesses that have a heightened vulnerability to local economic conditions. At June 30, 2026, our loan portfolio included $1.9 billion of commercial real estate loans and $552.6 million of commercial business loans. The credit risk related to these types of loans is considered to be greater than the risk related to one- to four-family residential loans because the repayment of commercial real estate loans and commercial business loans typically is dependent on the successful operation and income stream of the borrower’s business or the real estate securing the loans as collateral, which can be significantly affected by economic conditions. Additionally, commercial loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to residential real estate loans. If loans that are collateralized by real estate become troubled and the value of the real estate has been significantly impaired, then we may not be able to recover the full contractual amount of principal and interest that we anticipated at the time we originated the loan, which could require us to increase our provision for credit losses and adversely affect our operating results and financial condition. Commercial loans not collateralized by real estate are often secured by collateral that may depreciate over time, be difficult to appraise and fluctuate in value (such as accounts receivable, inventory and equipment).
Previous wording
Our agricultural real estate loans totaled $245.0 million, or 6.1% of our loan portfolio, net, at June 30, 2025. Agricultural real estate lending involves a greater degree of risk and typically involves larger loans to single borrowers than lending on one-to-four-family residences. Payments on agricultural real estate loans are dependent on the profitable operation or management of the farm property securing the loan. The success of the farm may be affected by many factors outside the control of the farm borrower, including adverse weather conditions that prevent the planting of a crop or limit crop yields (such as hail, drought and floods), loss of livestock due to disease or other factors, declines in market
Current wording
Our agricultural real estate loans totaled $295.8 million, or 6.8% of our loan portfolio at June 30, 2026. Agricultural real estate lending involves a greater degree of risk and typically involves larger loans to single borrowers than lending on one-to-four-family residences. Payments on agricultural real estate loans are dependent on the profitable operation or management of the farm property securing the loan. The success of the farm may be affected by many factors outside the control of the farm borrower, including adverse weather conditions that prevent the planting of a crop or limit crop yields (such as hail, drought and floods), loss of livestock due to disease or other factors, declines in market prices for agricultural products (both domestically and internationally) and the impact of government regulations (including changes in price supports, subsidies, and environmental regulations). In addition, many farms are dependent on a limited number of key individuals whose injury or death may significantly affect the successful operation of the farm. If the cash flow from a farming operation is diminished, the borrower’s ability to repay the loan may be impaired. The primary agricultural activity in our market areas is livestock, dairy, poultry, rice, timber, soybeans, wheat, melons, corn, and cotton. Accordingly, adverse circumstances affecting these activities could have an adverse effect on our agricultural real estate loan portfolio.
Previous wording
Our agricultural production and equipment loans totaled $206.1 million, or 5.09%, of our loan portfolio, net, at June 30, 2025, these loans. As with agricultural real estate loans, the repayment of operating loans is dependent on the successful operation or management of the farm property. The same risk applies to agricultural operating loans which are unsecured or secured by rapidly depreciating assets such as farm equipment or assets such as livestock or crops. Any repossessed collateral for a defaulted loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation to the collateral.
Current wording
Our agricultural production and equipment loans totaled $219.2 million, or 5.1%, of our loan portfolio at June 30, 2026, these loans. As with agricultural real estate loans, the repayment of operating loans is dependent on the successful operation or management of the farm property. The same risk applies to agricultural operating loans which are unsecured or secured by rapidly depreciating assets such as farm equipment or assets such as livestock or crops. Any
Previous wording
interest expense paid on interest-bearing liabilities, such as deposits and borrowed funds. Interest rates are sensitive to many factors that are beyond our control, including general economic conditions, competition and policies of various governmental and regulatory agencies and, in particular, the policies of the Federal Reserve Board. Changes in monetary policy, including changes in interest rates, could influence not only the interest we receive on loans and investment securities and the amount of interest we pay on deposits and borrowings, but these changes could also affect: (i) our ability to originate loans and obtain deposits; (ii) the fair value of our financial assets and liabilities, including our securities portfolio; and (iii)the average duration of our interest-earning assets. This also includes the risk that interest-earning assets may be more responsive to changes in interest rates than interest-bearing liabilities, or vice versa (repricing risk), the risk that the individual interest rates or rate indices underlying various interest-earning assets and interest-bearing liabilities may not change in the same degree over a given time period (basis risk), and the risk of changing interest rate relationships across the spectrum of interest-earning asset and interest-bearing liability maturities (yield curve risk), including a prolonged flat or inverted yield curve environment. Any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition and results of operations. See also, Part II, Item 7(a) “Interest Rate Sensitivity Analysis”.
Current wording
Our earnings and cash flows depend substantially upon our net interest income. Net interest income is the difference between interest income earned on interest-earning assets, such as loans and investment securities, and interest expense paid on interest-bearing liabilities, such as deposits and borrowed funds. Interest rates are sensitive to many factors that are beyond our control, including general economic conditions, competition and policies of various governmental and regulatory agencies and, in particular, the policies of the Federal Reserve Board. Changes in monetary policy, including changes in interest rates, could influence not only the interest we receive on loans and investment securities and the amount of interest we pay on deposits and borrowings, but these changes could also affect: (i) our ability to originate loans and obtain deposits; (ii) the fair value of our financial assets and liabilities, including our securities portfolio; and (iii) the average duration of our interest-earning assets. This also includes the risk that interest-earning assets may be more responsive to changes in interest rates than interest-bearing liabilities, or vice versa (repricing risk), the risk that the individual interest rates or rate indices underlying various interest-earning assets and interest-bearing liabilities may not change in the same degree over a given time period (basis risk), and the risk of changing interest rate relationships across the spectrum of interest-earning asset and interest-bearing liability maturities (yield curve risk), including a prolonged flat or inverted yield curve environment. Changes in interest rates may also
Previous wording
Liquidity is essential to our business. An inability to raise funds through deposits, borrowings, the sale of loans and other sources could have a substantial negative effect on our liquidity. Our access to funding sources in amounts adequate to finance our activities or the terms of which are acceptable to us could be impaired by factors that affect us specifically or the financial services industry or economy in general. Factors that could detrimentally impact our access to liquidity sources include a decrease in the level of our business activity as a result of a downturn in the markets in which our loans are concentrated or an adverse regulatory action against us. Our ability to borrow could also be impaired by factors that are not specific to us, such as a disruption in the financial markets or negative views and expectations about the prospects for the financial services industry generally.
Current wording
Factors that could detrimentally impact our access to liquidity sources include a decrease in the level of our business activity as a result of a downturn in the markets in which our loans are concentrated or an adverse regulatory action against us. Our ability to borrow could also be impaired by factors that are not specific to us, such as a disruption in the financial markets or negative views and expectations about the prospects for the financial services industry generally. A significant deterioration in our liquidity position could adversely affect our ability to meet our obligations, fund loans, maintain required liquidity levels or continue to operate our business as planned. While we maintain liquidity management policies and contingency funding arrangements designed to address potential liquidity needs, these measures may not be sufficient to address all circumstances, particularly in the event of rapid or significant deposit outflows or broader market disruption. Any significant reduction in the availability of deposits or other funding sources, or any material increase in our cost of funding, could have a material adverse effect on our business, results of operations and financial condition.
Previous wording
The Federal Reserve as our primary federal bank regulator and the Missouri Division of Finance regulate the activities in which the Bank may engage primarily for the protection of depositors and not for the protection or benefit of stockholders. In addition, new laws and regulations may increase our costs of regulatory compliance and of doing business and otherwise affect our operations. New laws and regulations may significantly affect the markets in which we do business, the markets for and value of our loans and investments, the fees we can charge and our ongoing operations, costs and profitability. Regulatory changes regarding card interchange fee income do not currently apply to us but could change in the future. Further, legislative proposals limiting our rights as a creditor could result in credit losses or increased expense in pursuing our remedies as a creditor.
Current wording
The Federal Reserve as our primary federal bank regulator and the Missouri Division of Finance regulate the activities in which the Bank may engage primarily for the protection of depositors and not for the protection or benefit of stockholders. In addition, new laws and regulations may increase our costs of regulatory compliance and of doing business and otherwise affect our operations. New laws and regulations may significantly affect the markets in which we do business, the markets for and value of our loans and investments, the fees we can charge and our ongoing operations, costs and profitability. Regulatory changes regarding card interchange fee income do not currently apply to us but could
Previous wording
The federal banking agencies have issued guidance on sound risk management practices for concentrations in commercial real estate lending (see “Government Supervision and Regulation – Guidance on Commercial Real Estate Concentrations”). For the purposes of this guidance, “commercial real estate” includes, among other types, construction and land development loans, multi-family residential loans, and non-owner occupied nonresidential loans, which have been a source of loan growth for the Company. A bank that has experienced rapid growth in commercial real estate lending, has notable exposure to a specific type of commercial real estate loan, or is approaching or exceeding the following supervisory criteria may be identified for further supervisory analysis with respect to real estate concentration risk: total loans for construction land development and other land representing 100% or more of the bank’s tier 1 regulatory capital plus the allowance for loan losses includable in total regulatory capital; or total commercial real estate loans (as defined in the guidance) that exceed 300% of the bank’s tier 1 regulatory capital plus the ACL includable in total regulatory capital and the bank’s commercial real estate portfolio has increased by 50% or more during the prior 36 months.
Current wording
The federal banking agencies have issued guidance on sound risk management practices for concentrations in commercial real estate lending (see “Government Supervision and Regulation – Guidance on Commercial Real Estate Concentrations”). For the purposes of this guidance, “commercial real estate” includes, among other types, construction and land development loans, multi-family residential loans, and non-owner occupied nonresidential loans, which have been a source of loan growth for the Company. A bank that has experienced rapid growth in commercial real estate lending, has notable exposure to a specific type of commercial real estate loan, or is approaching or exceeding the following supervisory criteria may be identified for further supervisory analysis with respect to real estate concentration risk: total loans for construction land development and other land representing 100% or more of the bank’s tier 1 regulatory capital plus the allowance for credit losses includable in total regulatory capital; or total commercial real estate loans (as defined in the guidance) that exceed 300% of the bank’s tier 1 regulatory capital plus the ACL includable in total regulatory capital and the bank’s commercial real estate portfolio has increased by 50% or more during the prior 36 months.
Previous wording
The Bank’s concentration in non-owner occupied commercial real estate loans was 301.1% of Tier 1 capital and ACL at June 30, 2025, as compared to 317.5% as of June 30, 2024, with these loans representing 40.1% of total loans at June 30, 2025. The 36-month growth rate at June 30, 2025, inclusive of acquisitions, was 49.5%. The Company’s non-owner occupied commercial real estate loans was 288.6% of Tier 1 capital and ACL at June 30, 2025, as compared to 305.3% as of June 30, 2024.
Current wording
The Bank’s concentration in non-owner occupied commercial real estate loans was 287.9% of Tier 1 capital and ACL at June 30, 2026, as compared to 301.1% as of June 30, 2025, with these loans representing 38.8% of total loans at June 30, 2026. The 36-month growth rate at June 30, 2026, inclusive of acquisitions, was 14.9%. The Company’s non-owner occupied commercial real estate loans was 275.8% of Tier 1 capital and ACL at June 30, 2026, as compared to 288.6% as of June 30, 2025.
Previous wording
The Company’s non-owner occupied commercial real estate includes other nonfarm nonresidential real estate (156.0% as a percentage of Tier 1 capital and ACL), multifamily properties (74.2% as a percentage of Tier 1 capital and ACL), and construction and land development (58.4% as a percentage of Tier 1 capital and ACL). The majority of these loans are concentrated within the company’s primary operational footprint. The other nonfarm nonresidential real estate portfolio includes a variety of collateral types, with hospitality (hotels/restaurants), care facilities, strip centers, retail stand-alone, and storage units are the most common. The hospitality and retail stand-alone segments include primarily franchised businesses; care facilities consisting mainly of skilled nursing and assisted living centers; and strip centers, which can be defined as non-mall shopping centers with a variety of tenants.
Current wording
The Company’s non-owner occupied commercial real estate includes other nonfarm nonresidential real estate (149.6% as a percentage of Tier 1 capital and ACL), multifamily properties (76.1% as a percentage of Tier 1 capital and ACL), and construction and land development (50.2% as a percentage of Tier 1 capital and ACL). The majority of these loans are concentrated within the company’s primary operational footprint. The other nonfarm nonresidential real estate portfolio includes a variety of collateral types, with hospitality (hotels/restaurants), care facilities, strip centers, retail stand-alone, and storage units are the most common. The hospitality and retail stand-alone segments include primarily franchised businesses; care facilities consisting mainly of skilled nursing and assisted living centers; and strip centers, which can be defined as non-mall shopping centers with a variety of tenants.
Previous wording
We operate in diverse markets and rely on the ability of our employees and systems to process a high number of transactions and to collect, process, transmit and store significant amounts of confidential information regarding our customers, employees and others and concerning our own business, operations, plans and strategies. Operational risk is the risk of loss resulting from our operations, including but not limited to, the risk of fraud by employees or persons outside our company, the execution of unauthorized transactions by employees, errors relating to transaction processing and technology, systems failures or interruptions, breaches of our internal control systems and compliance requirements, and business continuation and disaster recovery. Insurance coverage may not be available for such losses, or where available, such losses may exceed insurance limits. This risk of loss also includes the potential legal actions that could arise as a result of operational deficiencies or as a result of non-compliance with applicable regulatory standards or customer attrition due to potential negative publicity. In addition, we outsource some of our data processing to certain third-party providers. If these third-party providers encounter difficulties, including as a result of cyber-attacks or information security breaches, or if we have difficulty communicating with them, our ability to adequately process and account for transactions could be affected, and our business operations could be adversely affected.
Current wording
customers, employees and others and concerning our own business, operations, plans and strategies. Operational risk is the risk of loss resulting from our operations, including but not limited to, the risk of fraud by employees or persons outside our company, the execution of unauthorized transactions by employees, errors relating to transaction processing and technology, systems failures or interruptions, breaches of our internal control systems and compliance requirements, and business continuation and disaster recovery. Insurance coverage may not be available for such losses, or where available, such losses may exceed insurance limits. This risk of loss also includes the potential legal actions that could arise as a result of operational deficiencies or as a result of non-compliance with applicable regulatory standards or customer attrition due to potential negative publicity. In addition, we outsource some of our data processing to certain third-party providers. If these third-party providers encounter difficulties, including as a result of cyber-attacks or information security breaches, or if we have difficulty communicating with them, our ability to adequately process and account for transactions could be affected, and our business operations could be adversely affected.
Previous wording
The Company relies on third-party vendors to provide products and services necessary to maintain day-to-day operations. For example, the Company outsources a portion of its information systems, communication, data management, and transaction processing to third parties. Accordingly, the Company is exposed to the risk that these vendors might not perform in accordance with the contracted arrangements or service level agreements for a number of reasons, including, but not limited to, changes in the vendor’s organizational structure, financial condition, support for existing products and services, or strategic focus. Such failure to perform could be disruptive to the Company’s operations, which could have a materially adverse impact on its business, results of operations and financial condition.
Current wording
The Company relies on third-party vendors to provide products and services necessary to maintain day-to-day operations. For example, the Company outsources a portion of its information systems, communication, data management, and transaction processing to third parties. Accordingly, the Company is exposed to the risk that these vendors might not perform in accordance with the contracted arrangements or service level agreements for a number of reasons, including, but not limited to, changes in the vendor’s organizational structure, financial condition, support for existing products and services, or strategic focus. Such failure to perform could be disruptive to the Company’s operations, which could have a materially adverse impact on its business, results of operations and financial condition. These third parties are also sources of risk associated with operational errors, system interruptions or breaches and unauthorized disclosure of confidential information. If the vendors encounter any of these issues, the Company could be exposed to disruption of service, damage to reputation and litigation. Because the Company is an issuer of debit cards, it is periodically exposed to losses related to security breaches which occur at retailers that are unaffiliated with the Company (e.g., customer card data being compromised at retail stores). These losses include, but are not limited to, costs and expenses for card reissuance as well as losses resulting from fraudulent card transactions.
Previous wording
We are from time to time subject to claims related to our operations. These claims and legal actions, including supervisory actions by our regulators, could involve large monetary claims and significant defense costs. As a result, we may be exposed to substantial liabilities, which could adversely affect our results of operations and financial condition. See also, Item 3. “Legal Proceedings”.
Current wording
We are from time to time subject to claims related to our operations. These claims and legal actions, including supervisory actions by our regulators, could involve large monetary claims and significant defense costs. As a result, we
Previous wording
Deferred tax assets are only recognized to the extent it is more likely than not they will be realized. Should our management determine it is not more likely than not that the deferred tax assets will be realized, a valuation allowance with a charge to earnings would be reflected in the period. At June 30, 2025, our net deferred tax asset was $9.4 million, none of which was disallowed for regulatory capital purposes. Based on the levels of taxable income in prior years and our expectation of profitability in the current year and future years, management has determined that no valuation allowance was required at June 30, 2025. If we are required in the future to take a valuation allowance with respect to our deferred tax asset, our financial condition, results of operations and regulatory capital levels would be negatively affected.
Current wording
Deferred tax assets are only recognized to the extent it is more likely than not they will be realized. Should our management determine it is not more likely than not that the deferred tax assets will be realized, a valuation allowance with a charge to earnings would be reflected in the period. At June 30, 2026, our net deferred tax asset was $10.3 million, none of which was disallowed for regulatory capital purposes. Based on the levels of taxable income in prior years and our expectation of profitability in the current year and future years, management has determined that no valuation allowance was required at June 30, 2026. If we are required in the future to take a valuation allowance with respect to our deferred tax asset, our financial condition, results of operations and regulatory capital levels would be negatively affected.
Previous wording
The market value of our common stock may also be affected by conditions affecting the financial markets in general, including price and trading fluctuations. These conditions may result in (i) volatility in the level of, and fluctuations in, the market prices of stocks generally and, in turn, our common stock and (ii) sales of substantial amounts of our common stock in the market, in each case that could be unrelated or disproportionate to changes in our operating performance. These broad market fluctuations may adversely affect the market value of our common stock. Currently, market prices of stocks issued by financial institutions have been negatively impacted by interest rates which are at historic lows and anticipated to remain there, and market expectations regarding elevated future credit losses resulting from the economic effects of the pandemic.
Current wording
The market value of our common stock may also be affected by conditions affecting the financial markets in general, including price and trading fluctuations. These conditions may result in (i) volatility in the level of, and fluctuations in, the market prices of stocks generally and, in turn, our common stock and (ii) sales of substantial amounts of our common stock in the market, in each case that could be unrelated or disproportionate to changes in our operating performance. These broad market fluctuations may adversely affect the market value of our common stock.
Previous wording
Southern Missouri Bancorp, Inc., is an entity separate and distinct from its subsidiary bank and derives substantially all of its revenue in the form of dividends from the Bank. Accordingly, the Company is and will be dependent upon dividends from its subsidiary bank to pay the principal of and interest on its indebtedness, to satisfy its other cash needs and to pay dividends on its common and preferred stock. The Bank’s ability to pay dividends is subject to its ability to earn net income and to meet certain regulatory requirements. In the event the subsidiary bank is unable to pay dividends to the Company, the Company may not be able to pay dividends on its common or preferred stock. Also, the Company’s right to participate in a distribution of assets upon the subsidiary’s liquidation or reorganization is subject to the prior claims of the subsidiary’s creditors. In addition, holders of our common stock are entitled to receive dividends only when, as and if declared by our board of directors. Although we have historically paid cash dividends on our common stock, we are not required to do so and our board of directors could reduce, suspend or eliminate our common stock cash dividend in the future.
Current wording
pay dividends to the Company, the Company may not be able to pay dividends on its common or preferred stock. Also, the Company’s right to participate in a distribution of assets upon the subsidiary’s liquidation or reorganization is subject to the prior claims of the subsidiary’s creditors. In addition, holders of our common stock are entitled to receive dividends only when, as and if declared by our Board of Directors. Although we have historically paid cash dividends on our common stock, we are not required to do so and our Board of Directors could reduce, suspend or eliminate our common stock cash dividend in the future.
Previous wording
As of June 30, 2025, we had outstanding $24.3 million aggregate principal amount of junior subordinated debt securities issued in connection with the sale of trust preferred securities by subsidiaries of ours that are statutory business trusts. As of that date, those debt securities were carried at a book value of $23.2 million.
Current wording
As of June 30, 2026, we had outstanding $16.8 million aggregate principal amount of junior subordinated debt securities issued in connection with the sale of trust preferred securities by subsidiaries of ours that are statutory business trusts. As of that date, those debt securities were carried at a book value of $15.8 million.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
16, 2016, which changed previous allowance for loan losses methodology to consider current expected credit losses (CECL).
Current report — wording carried from elsewhere
repossessed collateral for a defaulted loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation to the collateral.
Current report — wording carried from elsewhere
change in the future. Further, legislative proposals limiting our rights as a creditor could result in credit losses or increased expense in pursuing our remedies as a creditor.
Current report — wording carried from elsewhere
We operate in diverse markets and rely on the ability of our employees and systems to process a high number of transactions and to collect, process, transmit and store significant amounts of confidential information regarding our
Current report — wording carried from elsewhere
may be exposed to substantial liabilities, which could adversely affect our results of operations and financial condition. See also, Item 3. “Legal Proceedings”.
Current report — wording carried from elsewhere
Southern Missouri Bancorp, Inc., is an entity separate and distinct from its subsidiary bank and derives substantially all of its revenue in the form of dividends from the Bank. Accordingly, the Company is and will be dependent upon dividends from its subsidiary bank to pay the principal of and interest on its indebtedness, to satisfy its other cash needs and to pay dividends on its common and preferred stock. The Bank’s ability to pay dividends is subject to its ability to earn net income and to meet certain regulatory requirements. In the event the subsidiary bank is unable to
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
prices for agricultural products (both domestically and internationally) and the impact of government regulations (including changes in price supports, subsidies, and environmental regulations). In addition, many farms are dependent on a limited number of key individuals whose injury or death may significantly affect the successful operation of the farm. If the cash flow from a farming operation is diminished, the borrower’s ability to repay the loan may be impaired. The primary agricultural activity in our market areas is livestock, dairy, poultry, rice, timber, soybeans, wheat, melons, corn, and cotton. Accordingly, adverse circumstances affecting these activities could have an adverse effect on our agricultural real estate loan portfolio.
Previous report — wording carried elsewhere
Our earnings and cash flows depend substantially upon our net interest income. Net interest income is the difference between interest income earned on interest-earning assets, such as loans and investment securities, and
Previous report — wording carried elsewhere
These third parties are also sources of risk associated with operational errors, system interruptions or breaches and unauthorized disclosure of confidential information. If the vendors encounter any of these issues, the Company could be exposed to disruption of service, damage to reputation and litigation. Because the Company is an issuer of debit cards, it is periodically exposed to losses related to security breaches which occur at retailers that are unaffiliated with the Company (e.g., customer card data being compromised at retail stores). These losses include, but are not limited to, costs and expenses for card reissuance as well as losses resulting from fraudulent card transactions.