SMBC Stock Forecast & Price Target

Southern Missouri Bancorp has demonstrated robust financial performance, with tangible book value (TBV) and tangible common equity (TCE) increasing by 4% and 30 basis points quarter-over-quarter, reflecting strong profitability metrics including a return on assets (ROA) of 1.23% and a return on tangible common equity (ROTCE) of 12.9%. The bank's efficiency ratio is expected to improve to 49% by FY4Q27, driven by anticipated strong net interest income (NII) growth from favorable fixed-rate loan repricing and decreasing funding costs. Furthermore, projections indicate TCE could rise to between 10.3% and 11.3% by the end of FY4Q26 and FY4Q27, supported by consistent asset quality and ongoing growth in loans and deposits with attractive net interest margin spreads.

Southern Missouri Bancorp's operating expenses of $25.1 million decreased by 4% quarter-over-quarter but still fell short of expectations, particularly due to reduced salaries and employee benefits. The forecast indicates a decline in fiscal year 2026 earnings by 5%, alongside a projected modest growth of 7% in fiscal year 2027, which raises concerns about long-term profitability. Additionally, there are multiple risks impacting the company's outlook, including slower loan growth, deteriorating credit quality, and increasing operating expenses, which could further hinder financial performance.