SMBC Stock Forecast & Price Target

Southern Missouri Bancorp exhibited solid financial performance, marked by a 4% increase in tangible book value (TBV) per share to $43.16 and a tangible common equity (TCE) ratio of 9.82%, indicating strong profitability with return on assets (ROA) of 1.23% and return on tangible common equity (ROTCE) of 12.9%. The bank is expected to see an improvement in its efficiency ratio, projected to reach 49% by FY4Q27, driven by a favorable net interest income (NII) growth outlook due to the upward repricing of fixed-rate loans and decreasing funding costs. Additionally, TCE is anticipated to rise to between 10.3% and 11.3% by FY4Q26 and FY4Q27, supported by growth in loans and deposits at net interest margin (NIM) accretive spreads.

Southern Missouri Bancorp's forecast indicates a concerning decline in growth, projecting a 5% decrease in fiscal year 2026 with only a modest 7% growth expected in fiscal year 2027. The bank's operating expenses, although slightly reduced, remain a concern as they were 4% below expectations, primarily attributed to lower salaries and employee benefits, which may not guarantee sustained efficiency. Additionally, risks surrounding slower loan and deposit growth, potential credit quality deterioration, and rising operating expenses further contribute to a negative outlook on the company's financial stability.