SOUTHERN MISSOURI BANCORP, INC., 10-K filed on 9/13/2021
Annual Report
v3.21.2
Document and Entity Information - USD ($)
$ in Millions
12 Months Ended
Jun. 30, 2021
Sep. 10, 2021
Dec. 31, 2020
Cover [Abstract]      
SEC Form 10-K    
Document Annual Report true    
Document Transition Report false    
Period End date Jun. 30, 2021    
Registrant CIK 0000916907    
Entity File Number 0-23406    
Registrant Name SOUTHERN MISSOURI BANCORP, INC.    
Entity Incorporation, State or Country Code MO    
Tax Identification Number (TIN) 43-1665523    
Entity Address, Address Line One 2991 Oak Grove Road    
Entity Address, City or Town Poplar Bluff    
Entity Address, State or Province MO    
Entity Address, Postal Zip Code 63901    
City Area Code 573    
Local Phone Number 778-1800    
Title of 12(b) Security Common Stock    
Trading Symbol SMBC    
Trading Exchange NASDAQ    
Voluntary filer No    
Well-known Seasoned Issuer No    
Current reporting status Yes    
Interactive Data Current Yes    
Filer Category Accelerated Filer    
Small Business false    
Emerging Growth Company false    
ICFR Auditor Attestation Flag true    
Shell Company false    
Number of common stock shares outstanding   8,894,568  
Fiscal Year End --06-30    
Document Fiscal Year Focus 2021    
Document Fiscal Period Focus FY    
Amendment Flag false    
Public Float     $ 242.2
v3.21.2
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Jun. 30, 2021
Jun. 30, 2020
Assets    
Cash and cash equivalents $ 123,592 $ 54,245
Interest-bearing time deposits 979 974
Available for sale securities (Note 2) 207,020 176,524
Stock in FHLB of Des Moines 5,873 6,390
Stock in Federal Reserve Bank of St. Louis 5,031 4,363
Loans receivable, net of ACL of $33,222 and ALLL of $25,139 at June 30, 2021 and June 30, 2020, respectively (Note 3) 2,200,244 2,141,929
Accrued interest receivable 10,079 12,116
Premises and equipment, net (Note 5) 64,077 65,106
Bank owned life insurance - cash surrender value 43,817 43,363
Goodwill 14,089 14,089
Other intangible assets, net 7,129 7,700
Prepaid expenses and other assets 18,600 15,358
TOTAL ASSETS 2,700,530 2,542,157
Liabilities and Stockholders' Equity    
Deposits (Note 6) 2,330,803 2,184,847
Advances from FHLB (Note 7) 57,529 70,024
Accounts payable and other liabilities 12,753 12,151
Accrued interest payable 779 1,646
Subordinated debt (Note 8) 15,243 15,142
TOTAL LIABILITIES 2,417,107 2,283,810
Commitments and contingencies (Note 12)
Common stock, $.01 par value; 25,000,000 shares authorized; 9,361,629 and 9,345,339 shares issued, respectively, at June 30, 2021 and June 30, 2020 94 93
Additional paid-in capital 95,585 95,035
Retained earnings 200,140 165,709
Treasury stock of 456,431 and 217,949 shares at June 30, 2021 and June 30, 2020, respectively, at cost (15,278) (6,937)
Accumulated other comprehensive income 2,882 4,447
TOTAL STOCKHOLDERS' EQUITY 283,423 258,347
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,700,530 $ 2,542,157
v3.21.2
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Jun. 30, 2021
Jun. 30, 2020
CONSOLIDATED BALANCE SHEETS    
Loans and Leases Receivable, Allowance $ 33,222 $ 25,139
Common Stock, Par or Stated Value Per Share $ 0.01 $ 0.01
Common Stock, Shares Authorized 25,000,000 25,000,000
Common Stock, Shares, Issued 9,361,629 9,345,339
Treasury Stock 456,431 217,949
v3.21.2
CONSOLIDATED STATEMENTS OF INCOME - USD ($)
$ in Thousands
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Interest Income:      
Loans $ 105,077 $ 102,129 $ 92,328
Investment securities 2,130 1,992 2,323
Mortgage-backed securities 2,042 2,802 2,704
Other interest-earning assets 226 129 127
TOTAL INTEREST INCOME 109,475 107,052 97,482
Interest Expense:      
Deposits 14,889 24,084 21,208
Securities sold under agreements to repurchase     36
Advances from FHLB 1,366 1,932 2,377
Note payable   112 158
Subordinated debt 534 788 921
TOTAL INTEREST EXPENSE 16,789 26,916 24,700
NET INTEREST INCOME 92,686 80,136 72,782
Provision for credit losses (Note 3) (1,024) 6,002 2,032
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 93,710 74,134 70,750
Noninterest income:      
Deposit account charges and related fees 5,254 5,680 5,005
Bank card interchange income 3,913 3,073 2,581
Loan late charges 587 573 463
Loan servicing fees 1,454 196 376
Other loan fees 1,200 1,258 1,360
Net realized gains on sale of loans 3,980 1,630 771
Net realized gains on sale of AFS securities 90   244
Earnings on bank owned life insurance 1,800 1,021 1,329
Other income 1,764 1,319 964
TOTAL NONINTEREST INCOME 20,042 14,750 13,093
Noninterest expense:      
Compensation and benefits 31,010 29,336 26,379
Occupancy and equipment, net 7,880 7,288 6,586
Data processing expense 4,812 5,173 3,545
Telecommunications expense 1,261 1,263 1,137
Deposit insurance premiums 766 155 661
Legal and professional fees 1,093 969 965
Advertising 1,080 1,227 1,161
Postage and office supplies 796 804 772
Intangible amortization 1,395 1,771 1,672
Foreclosed property expenses/losses 142 992 442
Provision for off balance sheet credit exposure (422) 648 149
Other operating expense 3,812 4,826 4,423
TOTAL NONINTEREST EXPENSE 54,047 54,452 47,892
INCOME BEFORE INCOME TAXES 59,705 34,432 35,951
Income Taxes (Note 9)      
Current 10,844 6,890 6,972
Deferred 1,681 (3) 75
Income Tax Expense (Benefit), Total 12,525 6,887 7,047
NET INCOME $ 47,180 $ 27,545 $ 28,904
Basic earnings per share $ 5.22 $ 3.00 $ 3.14
Diluted earnings per share 5.22 2.99 3.14
Dividends paid $ 0.62 $ 0.60 $ 0.52
v3.21.2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Thousands
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME      
NET INCOME $ 47,180 $ 27,545 $ 28,904
Other comprehensive income:      
Unrealized gains (losses) on securities available-for-sale (1,925) 4,095 4,940
Less: reclassification adjustment for realized gains included in net income 90   244
Defined benefit pension plan net gain (loss) 6 6 (10)
Tax benefit (expense) 444 (901) (1,094)
Total other comprehensive income (loss) (1,565) 3,200 3,592
COMPREHENSIVE INCOME $ 45,615 $ 30,745 $ 32,496
v3.21.2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)
$ in Thousands
Common Stock
Additional Paid-in Capital
Retained Earnings
Impact of ASU 2016-13 adoption
Retained Earnings
Treasury Stock
Accumulated Other Comprehensive Income (Loss)
Impact of ASU 2016-13 adoption
Total
Beginning Balance at Jun. 30, 2018 $ 90 $ 83,413   $ 119,536   $ (2,345)   $ 200,694
Net Income       28,904       28,904
Change in unrealized gain on available for sale securities, net           3,602   3,602
Defined benefit pension plan net gain (loss)           (10)   (10)
Dividends paid on common stock       (4,763)       (4,763)
Stock option expense   51           51
Stock grant expense   323           323
Common Stock Issued 3 10,754           10,757
Treasury stock purchased         $ (1,166)     (1,166)
Ending Balance at Jun. 30, 2019 93 94,541   143,677 (1,166) 1,247   238,392
Net Income       27,545       27,545
Change in unrealized gain on available for sale securities, net           3,194   3,194
Defined benefit pension plan net gain (loss)           6   6
Dividends paid on common stock       (5,513)       (5,513)
Stock option expense   74           74
Stock grant expense   356           356
Exercise of stock options   64           64
Treasury stock purchased         (5,771)     (5,771)
Ending Balance at Jun. 30, 2020 93 95,035   165,709 (6,937) 4,447   258,347
Net Income       47,180       47,180
Change in unrealized gain on available for sale securities, net           (1,571)   (1,571)
Defined benefit pension plan net gain (loss)           6   6
Dividends paid on common stock       (5,598)       (5,598)
Stock option expense   142           142
Stock grant expense   408           408
Common Stock Issued 1             1
Treasury stock purchased         (8,341)     (8,341)
Ending Balance at Jun. 30, 2021 $ 94 $ 95,585 $ (7,151) $ 200,140 $ (15,278) $ 2,882 $ (7,151) $ 283,423
v3.21.2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY      
Dividends paid on common stock $ 0.62 $ 0.60 $ 0.52
v3.21.2
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Cash Flows From Operating Activities:      
NET INCOME (LOSS) $ 47,180 $ 27,545 $ 28,904
Items not requiring (providing) cash:      
Depreciation 4,029 3,783 3,402
Loss on disposal of fixed assets 80 482 29
Stock option and stock grant expense 550 430 374
Loss on sale/write-down of REO 55 802 267
Amortization of intangible assets 1,395 1,771 1,672
Accretion of purchase accounting adjustments (1,502) (1,403) (2,886)
Increase in cash surrender value of bank owned life insurance (BOLI) (1,800) (1,022) (1,329)
Provision for credit losses (1,024) 6,002 2,032
Gains realized on sale of AFS securities (90)   (244)
Net amortization of premiums and discounts on securities 1,633 1,295 846
Bargain purchase gain   (123)  
Originations of loans held for sale (151,171) (72,165) (30,768)
Proceeds from sales of loans held for sale 151,813 70,929 30,633
Gain on sales of loans held for sale (3,980) (1,630) (771)
Changes in:      
Accrued interest receivable 2,037 (1,758) (459)
Prepaid expenses and other assets 1,790 4,566 56
Accounts payable and other liabilities (47) 1,224 5,973
Deferred income taxes 1,681 26 75
Accrued interest payable (867) (453) 795
NET CASH PROVIDED BY OPERATING ACTIVITIES 51,762 40,301 38,601
Cash flows from investing activities:      
Net increase in loans (62,864) (246,930) (139,056)
Net change in interest-bearing deposits (7) (2) 983
Proceeds from maturities of available for sale securities 57,723 51,649 29,971
Proceeds from sales of available for sale securities 16,284   40,985
Net (purchases) redemptions of Federal Home Loan Bank stock 517 (1,072) 1,489
Net purchases of Federal Reserve Bank of St. Louis stock (668) (13) (785)
Purchases of available-for-sale securities (108,057) (55,486) (31,207)
Purchases of long-term investment (40)    
Purchases of premises and equipment (2,856) (4,304) (7,696)
Purchases of BOLI   (4,000)  
Net cash paid for acquisition   (9,080) (8,377)
Investments in state & federal tax credits (5,325) (5,103) (2,192)
Proceeds from sale of fixed assets 580 349 32
Proceeds from sale of foreclosed assets 1,444 1,632 2,317
Proceeds from BOLI claim 1,351   544
NET CASH USED IN INVESTING ACTIVITIES (101,918) (272,360) (112,992)
Cash flows from financing activities:      
Net increase in demand deposits and savings accounts 257,876 249,285 40,664
Net (decrease) increase in certificates of deposits (111,885) (4,788) 102,551
Net (decrease) increase in securities sold under agreements to repurchase   (4,376) 1,109
Proceeds from Federal Home Loan Bank advances 110,100 640,900 591,500
Repayments of Federal Home Loan Bank advances (122,649) (615,897) (642,030)
Repayments of long term debt   (3,000) (4,400)
Exercise of stock options   64  
Purchase of treasury stock (8,341) (5,771) (1,166)
Dividends paid on common stock (5,598) (5,513) (4,763)
NET CASH PROVIDED BY FINANCING ACTIVITIES 119,503 250,904 83,465
Increase in cash and cash equivalents 69,347 18,845 9,074
Cash and cash equivalents at beginning of period 54,245 35,400 26,326
Cash and cash equivalents at end of period 123,592 54,245 35,400
Noncash investing and financing activities:      
Conversion of loans to foreclosed real estate 748 1,057 2,134
Conversion of foreclosed real estate to loans     51
Conversion of loans to repossessed assets 461 210 66
Right of use assets obtained in exchange for lease obligations: Operating Leases 804 2,004  
Fair value of assets acquired   70,570 216,772
Less: common stock issued     10,757
Cash paid for the capital stock   21,942 11,271
Liabilities assumed   48,504 194,744
Cash paid during the period for:      
Interest (net of interest credited) 2,654 3,813 4,325
Income taxes $ 9,240 $ 2,437 $ 2,856
v3.21.2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($)
$ in Thousands
May 22, 2020
Nov. 21, 2018
Central Federal Bancshares    
Consideration for purchase of capital stock $ 21,942  
Gideon Bancshares Company    
Consideration for purchase of capital stock   $ 22,028
v3.21.2
Organization and Summary of Significant Accounting Policies
12 Months Ended
Jun. 30, 2021
Organization and Summary of Significant Accounting Policies  
Organization and Summary of Significant Accounting Policies

NOTE 1: Organization and Summary of Significant Accounting Policies

Organization. Southern Missouri Bancorp, Inc., a Missouri corporation (the Company) was organized in 1994 and is the parent company of Southern Bank (the Bank). Substantially all of the Company’s consolidated revenues are derived from the operations of the Bank, and the Bank represents substantially all of the Company’s consolidated assets and liabilities. SB Real Estate Investments, LLC is a wholly owned subsidiary of the Bank formed to hold Southern Bank Real Estate Investments, LLC. Southern Bank Real Estate Investments, LLC is a real estate investment trust (REIT) which is controlled by the investment subsidiary, and has other preferred shareholders in order to meet the requirements to be a REIT. At June 30, 2021, assets of the REIT were approximately $1.1 billion, and consisted primarily of loan participations acquired from the Bank.

The Bank is primarily engaged in providing a full range of banking and financial services to individuals and corporate customers in its market areas. The Bank and Company are subject to competition from other financial institutions. The Bank and Company are subject to the regulation of certain federal and state agencies and undergo periodic examinations by those regulatory authorities.

Basis of Financial Statement Presentation. The consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America and general practices within the banking industry. In the normal course of business, the Company encounters two significant types of risk: economic and regulatory. Economic risk is comprised of interest rate risk, credit risk, and market risk. The Company is subject to interest rate risk to the degree that its interest-bearing liabilities reprice on a different basis than its interest-earning assets. Credit risk is the risk of default on the Company’s investment or loan portfolios resulting from the borrowers’ inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of the investment portfolio, collateral underlying loans receivable, and the value of the Company’s investments in real estate.

Principles of Consolidation. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, the Bank. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates. The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

On July 1, 2020, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses, also known as the current expected credit loss (“CECL”) standard, which created material changes to the existing critical accounting policy that existed at June 30, 2020. Effective July 1, 2020, the significant accounting policy which was considered to be the most critical in preparing the Company’s consolidated financial statements is the determination of the allowance for credit losses (“ACL”) on loans.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses, and estimated fair values of purchased loans.

Cash and Cash Equivalents. For purposes of reporting cash flows, cash and cash equivalents includes cash, due from depository institutions and interest-bearing deposits in other depository institutions with original maturities of three months or less. Interest-bearing deposits in other depository institutions were $83.2 million and $6.9 million at June 30, 2021 and 2020, respectively. The deposits are held in various commercial banks with a total of $1.8 million and $0 at June 30, 2021 and 2020, respectively, exceeding the FDIC’s deposit insurance limits, as well as at the Federal Reserve and the Federal Home Loan Bank of Des Moines and Chicago.

Interest-bearing Time Deposits. Interest-bearing deposits in banks mature within seven years and are carried at cost.

Available for Sale Securities. Available for sale securities, which include any security for which the Company has no immediate plan to sell but which may be sold in the future, are carried at fair value. Unrealized gains and losses, net of tax, are reported in accumulated other comprehensive income (loss), a component of stockholders’ equity. All securities have been classified as available for sale.

Premiums and discounts on debt securities are amortized or accreted as adjustments to income over the estimated life of the security using the level yield method. Realized gains or losses on the sale of securities is based on the specific identification method. The fair value of securities is based on quoted market prices or dealer quotes. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities.

The Company does not invest in collateralized mortgage obligations that are considered high risk.

For AFS securities with fair value less than amortized cost that management has no intent to sell and believes that it more likely than not will not be required to sell prior to recovery, only the credit loss component of the impairment is recognized in earnings, while the noncredit loss is recognized in accumulated other comprehensive income (loss). The credit loss component recognized in earnings is identified as the amount of principal cash flows not expected to be received over the remaining term of the security as projected based on cash flow projections, and is recorded to the ACL, by a charge to provision for credit losses. Accrued interest receivable is excluded from the estimate of credit losses. Both the ACL and the adjustment to net income may be reversed if conditions change. However, if the Company intends to sell an impaired AFS security, or, if it is more likely than not the Company will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount would be recognized in earnings with a corresponding adjustment to the security’s amortized cost basis. Because the security’s amortized cost basis is adjusted to fair value, there is no ACL in this situation.

At adoption of ASU 2016-13, no impairment on AFS securities was attributable to credit. The Company will evaluate impaired AFS securities at the individual level on a quarterly basis, and will consider such factors including, but not limited to: the extent to which the fair value of the security is less than the amortized cost basis; adverse conditions specifically related to the security, an industry, or geographic area; the payment structure of the security and likelihood of the issuer to be able to make payments that may increase in the future; failure of the issuer to make scheduled interest or principal payments; any changes to the rating of the security by a rating agency; and the ability and intent to hold the security until maturity. A qualitative determination as to whether any portion of the impairment is attributable to credit risk is acceptable. There were no credit related factors underlying unrealized losses on AFS securities at June 30, 2021, and June 30, 2020.

Changes in the ACL are recorded as expense. Losses are charged against the ACL when management believes the uncollectability of an AFS debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Federal Reserve Bank and Federal Home Loan Bank Stock. The Bank is a member of the Federal Reserve and the Federal Home Loan Bank (FHLB) systems. Capital stock of the Federal Reserve and the FHLB is a required investment based upon a predetermined formula and is carried at cost.

Loans. Loans are generally stated at unpaid principal balances, less the allowance for loan losses, any net deferred loan origination fees, and unamortized premiums or discounts on purchased loans.

Interest on loans is accrued based upon the principal amount outstanding. The accrual of interest on loans is discontinued when, in management’s judgment, the collectability of interest or principal in the normal course of business is doubtful. The Company complies with regulatory guidance which indicates that loans should be placed in nonaccrual status when 90 days past due, unless the loan is both well-secured and in the process of collection. A loan that is “in the process of collection” may be subject to legal action or, in appropriate circumstances, through other collection efforts reasonably expected to result in repayment or restoration to current status in the near future. A loan is considered delinquent when a payment has not been made by the contractual due date. At June 30, 2021, some loans were modified under the terms of the Coronavirus Aid, Relief and Economic Security Act (the CARES Act), which provides that loans modified after March 1, 2020, due to the COVID-19 pandemic, and which were otherwise current at December 31, 2019,

need not be accounted for as troubled debt restructurings (TDRs). While these loans may not have met the contractual due dates of payments under their previous terms, so long as they were compliant with the terms of the modification made under the CARES Act, they would not have been reported as delinquent at June 30, 2020 or June 30, 2021. See further disclosure in Note 3: Loans and Allowance for Loan Losses. Interest income previously accrued but not collected at the date a loan is placed on nonaccrual status is reversed against interest income. Cash receipts on a nonaccrual loan are applied to principal and interest in accordance with its contractual terms unless full payment of principal is not expected, in which case cash receipts, whether designated as principal or interest, are applied as a reduction of the carrying value of the loan. A nonaccrual loan is generally returned to accrual status when principal and interest payments are current, full collectability of principal and interest is reasonably assured, and a consistent record of performance has been demonstrated.

The ACL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans, and is established through provision for credit losses charged to current earnings. The ACL is increased by the provision for losses on loans charged to expense and reduced by loans charged off, net of recoveries. Loans are charged off in the period deemed uncollectible, based on management’s analysis of expected cash flows (for non-collateral dependent loans) or collateral value (for collateral-dependent loans). Subsequent recoveries of loans previously charged off, if any, are credited to the allowance when received.

Management estimates the ACL using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Adjustments may be made to historical loss information for differences identified in current loan-specific risk characteristics, such as differences in underwriting standards or terms; lending review systems; experience, ability, or depth of lending management and staff; portfolio growth and mix; delinquency levels and trends; as well as for changes in environmental conditions, such as changes in economic activity or employment, agricultural economic conditions, property values, or other relevant factors. The Company generally incorporates a reasonable and supportable forecast period of four quarters, and a four-quarter, straight-line reversion period to return to long-term historical averages.

The ACL is measured on a collective (pool) basis when similar risk characteristics exist. For loans that do not share general risk characteristics with the collectively evaluated pools, the Company estimates credit losses on an individual loan basis, and these loans are excluded from the collectively evaluated pools. An ACL for an individually evaluated loan is recorded when the amortized cost basis of the loan exceeds the discounted estimated cash flows using the loan’s initial effective interest rate or the fair value, less estimated costs to sell, of the collateral for certain collateral dependent loans. For the collectively evaluated pools, the Company segments the loan portfolio primarily by loan purpose and collateral into 24 pools, which are homogeneous groups of loans that possess similar loss potential characteristics. The Company primarily utilizes the discounted cash flow (“DCF”) methodology for measurement of the required ACL. For a limited number of pools with a relatively small balance of unpaid principal balance, the Company utilized the remaining life method. The DCF model implements probability of default (“PD”) and loss given default (“LGD”) calculations at the instrument level. PD and LGD are determined based on statistical analysis and correlation of historical losses with various economic factors over time. In general, the Company’s losses have not correlated well with economic factors, and the Company has utilized peer data where more appropriate. The Company defines a default as an event of charge off, an adverse (substandard or worse) internal credit rating, becoming delinquent 90 days or more, or being placed on nonaccrual status. A PD/LGD estimate is applied to a projected model of the loan’s cashflow, including principal and interest payments, with consideration for prepayment speeds, principal curtailments, and recovery lag.

Prior to the July 1, 2020, adoption of ASU 2016-13, the allowance for loan and lease losses (ALLL) represented management’s best estimate of probable losses in the existing loan portfolio at the end of the reporting period. Integral to the methodology for determining the adequacy of the ALLL was portfolio segmentation and impairment measurement. Under the Company’s methodology, loans were first segmented into 1) those comprising large groups of homogeneous loans which are collectively evaluated for impairment and 2) all other loans which are individually evaluated. Those loans in the second category were further segmented utilizing a defined grading system which involves categorizing loans by severity of risk based on conditions that may affect the ability of the borrowers to repay their debt, such as current financial information, collateral valuations, historical payment experience, credit documentation, public information, and current trends. Loans were considered impaired if, based on current information and events, it was considered probable that the Company would be unable to collect the scheduled payments of principal or interest when

due according to the contractual terms of the loan agreement, and was generally based on the fair value, less estimated costs to sell, of the loan’s collateral. If the loan was not collateral-dependent, the measurement of impairment was based on the present value of expected future cash flows discounted at the historical effective interest rate, or the observable market price of the loan. Impairment identified through this evaluation process was a component of the ALLL. If a loan was not considered impaired, it was grouped together with loans having similar characteristics (i.e., the same risk grade), and an ALLL was based upon a quantitative factor (historical average charge-offs) and qualitative factors such as changes in lending policies; national, regional, and local economic conditions; changes in mix and volume of portfolio; experience, ability, and depth of lending management and staff; entry to new markets; levels and trends of delinquent, nonaccrual, special mention, and classified loans; concentrations of credit; changes in collateral values; agricultural economic conditions; and regulatory risk.

Prior to the July 1, 2020, adoption of ASU 2016-13, loans acquired in an acquisition that had evidence of credit quality deterioration since origination and for which it was probable that the Company would be unable to collect all contractually required payments receivable were considered purchased credit impaired (“PCI”). PCI loans were individually evaluated and recorded at fair value at the date of acquisition with no initial ALLL based on a DCF methodology that considered various factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and a discount rate reflecting the Company’s assessment of risk inherent in the cash flow estimates. The difference between the DCFs expected at acquisition and the investment in the loan, or the “accretable yield,” was recognized as interest income on a level-yield method over the life of the loan. Contractually required payments for interest and principal that exceed the DCFs expected at acquisition, or the “non-accretable difference,” were not recognized on the balance sheet and did not result in any yield adjustments, loss accruals or valuation allowances. Increases in expected cash flows, including prepayments, subsequent to the initial investment were recognized prospectively through adjustment of the yield on the loan over its remaining life. Decreases in expected cash flows were recognized as impairment. ALLL on PCI loans reflected only losses incurred after the acquisition (meaning the present value of all cash flows expected at acquisition that ultimately were not to be received).

Subsequent to the July 1, 2020, adoption of ASU 2016-13, loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated (“PCD”) loans. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. This initial ACL is allocated to individual PCD loans and added to the purchase price or acquisition date fair values to establish the initial amortized cost basis of the PCD loans. As the initial ACL is added to the purchase price, there is no credit loss expense recognized upon acquisition of a PCD loan. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to non-credit factors and results in a discount or premium. Discounts and premiums are recognized through interest income on a level-yield method over the life of the loans.

Upon adoption of ASU 2016-13, the amortized cost basis of the PCD assets were adjusted to reflect the addition of $434,000 to the ACL. The remaining noncredit discount, based on the adjusted amortized cost basis, will be accreted into interest income at the effective interest rate as of July 1, 2020.

Loan fees and certain direct loan origination costs are deferred, and the net fee or cost is recognized as an adjustment to interest income using the interest method over the contractual life of the loans.

Off-Balance Sheet Credit Exposures. Off-balance sheet credit instruments include commitments to make loans, and commercial letters of credit, issued to meet customer financing needs. The Company’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded. The ACL on off-balance sheet credit exposures is estimated by loan pool on a quarterly basis under the current CECL model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur and is included in other liabilities on the Company’s consolidated balance sheets. The Company records an ACL on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable. In prior periods the charge for credit loss expense for off-balance sheet credit exposures was included in other non-interest

expense in the Company’s consolidated statements of income, whereas under updated regulatory accounting guidelines, that figure is combined with the provision for credit losses beginning July 1, 2020.

Foreclosed Real Estate. Real estate acquired by foreclosure or by deed in lieu of foreclosure is initially recorded at fair value less estimated selling costs, establishing a new cost basis. Costs for development and improvement of the property are capitalized.

Valuations are periodically performed by management, and an allowance for losses is established by a charge to operations if the carrying value of a property exceeds its estimated fair value, less estimated selling costs.

Loans to facilitate the sale of real estate acquired in foreclosure are discounted if made at less than market rates. Discounts are amortized over the fixed interest period of each loan using the interest method.

Premises and Equipment. Premises and equipment are stated at cost less accumulated depreciation and include expenditures for major betterments and renewals. Maintenance, repairs, and minor renewals are expensed as incurred. When property is retired or sold, the retired asset and related accumulated depreciation are removed from the accounts and the resulting gain or loss taken into income. The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such assets are considered to be impaired, the impairment loss recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets.

Depreciation is computed by use of straight-line and accelerated methods over the estimated useful lives of the assets. Estimated lives are generally seven to forty years for premises, three to seven years for equipment, and three years for software.

Bank Owned Life Insurance. Bank owned life insurance policies are reflected in the consolidated balance sheets at the estimated cash surrender value. Changes in the cash surrender value of these policies, as well as a portion of the insurance proceeds received, are recorded in noninterest income in the consolidated statements of income.

Intangible Assets. The Company’s intangible assets at June 30, 2021 included gross core deposit intangibles of $15.3 million with $10.1 million accumulated amortization, gross other identifiable intangibles of $3.8 million with accumulated amortization of $3.8 million, and mortgage servicing rights of $1.9 million. At June 30, 2020, the Company’s intangible assets included gross core deposit intangibles of $15.3 million with $8.7 million accumulated amortization, gross other identifiable intangibles of $3.8 million with accumulated amortization of $3.8 million, and mortgage servicing rights of $1.1 million. The Company’s core deposit intangible assets are being amortized using the straight line method, over periods ranging from five to seven years, with amortization expense expected to be approximately $1.4 million in fiscal 2022, $1.4 million in fiscal 2023, $1.4 million in fiscal 2024, $807,000 in fiscal 2025, $328,000 in fiscal 2026, and none thereafter. As of June 30, 2021, and June 30, 2020, there was no impairment indicated.

Goodwill. The Company’s goodwill is evaluated annually for impairment or more frequently if impairment indicators are present. A qualitative assessment is performed to determine whether the existence of events or circumstances leads to a determination that it is more likely than not the fair value is less than the carrying amount, including goodwill. If, based on the evaluation, it is determined to be more likely than not that the fair value is less than the carrying value, then goodwill is tested further for impairment. If the implied fair value of goodwill is lower than its carrying amount, a goodwill impairment is indicated and goodwill is written down to its implied fair value. Subsequent increases in goodwill value are not recognized in the financial statements. As of June 30, 2021, there was no impairment indicated, based on a qualitative assessment of goodwill, which considered: the market value of the Company’s common stock; concentrations of credit; profitability; nonperforming assets; capital levels; and results of recent regulatory examinations. The Company believes there is no impairment of goodwil at June 30, 2021.

Income Taxes. The Company accounts for income taxes in accordance with income tax accounting guidance (ASC 740, Income Taxes). The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying

the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur.

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to the management’s judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

The Company recognizes interest and penalties on income taxes as a component of income tax expense.

The Company files consolidated income tax returns with its subsidiaries, the Bank and SB Real Estate Investments, LLC, with a tax year ended June 30. Southern Bank Real Estate Investments, LLC files a separate REIT return for federal tax purposes, and also files state income tax returns with a tax year ended December 31.

Incentive Plans. The Company accounts for its Equity Incentive Plan (EIP), and Omnibus Incentive Plan (OIP) in accordance with ASC 718, “Share-Based Payment.” Compensation expense is based on the market price of the Company’s stock on the date the shares are granted and is recorded over the vesting period. The difference between the grant-date fair value and the fair value on the date the shares are considered earned represents a tax benefit to the Company that is recorded as an adjustment to income tax expense.

Outside Directors’ Retirement. The Bank adopted a directors’ retirement plan in April 1994 for outside directors. The directors’ retirement plan provides that each non-employee director (participant) shall receive, upon termination of service on the Board on or after age 60, other than termination for cause, a benefit in equal annual installments over a five year period. The benefit will be based upon the product of the participant’s vesting percentage and the total Board fees paid to the participant during the calendar year preceding termination of service on the Board. The vesting percentage shall be determined based upon the participant’s years of service on the Board, whether before or after the reorganization date.

In the event that the participant dies before collecting any or all of the benefits, the Bank shall pay the participant’s beneficiary. No benefits shall be payable to anyone other than the beneficiary, and shall terminate on the death of the beneficiary.

Stock Options. Compensation cost is measured based on the grant-date fair value of the equity instruments issued, and recognized over the vesting period during which an employee provides service in exchange for the award.

Earnings Per Share. Basic earnings per share available to common stockholders is computed using the weighted-average number of common shares outstanding. Diluted earnings per share available to common stockholders includes the effect of all weighted-average dilutive potential common shares outstanding during each year.

Comprehensive Income. Comprehensive income consists of net income and other comprehensive income, net of applicable income taxes. Other comprehensive income includes unrealized appreciation (depreciation) on available-for-sale securities, unrealized appreciation (depreciation) on available-for-sale securities for which a portion of an other-than-temporary impairment has been recognized in income, and changes in the funded status of defined benefit pension plans.

Transfers Between Fair Value Hierarchy Levels. Transfers in and out of Level 1 (quoted market prices), Level 2 (other significant observable inputs) and Level 3 (significant unobservable inputs) are recognized on the period ending date.

Revisions. Certain immaterial revisions have been made to the 2019 consolidated financial statements for netting interchange expenses with interchange revenues to apply the recognition on an agency versus principal basis. These revisions did not have a significant impact on the financial statement line items impacted and have been reclassified to conform to the 2020 and 2021 presentations. These reclassifications had no effect on net income or retained earnings.

The following paragraphs summarize the impact of new accounting pronouncements:

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820. The amendments in this update remove disclosures that no longer are considered cost beneficial, modify/clarify the specific requirements of certain disclosures, and add disclosure requirements identified as relevant. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, with early adoption permitted for certain removed and modified disclosures. Adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), which the Company adopted July 1, 2020. The Update amended guidance on reporting credit losses for financial assets held at amortized cost basis and available for sale debt securities. For financial assets held at amortized cost basis, Topic 326 eliminated the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The Update affects loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, and any other financial assets not excluded from the scope that have the contractual right to receive cash. Adoption was applied on a modified retrospective basis, through a cumulative-effect adjustment to retained earnings. Adoption resulted in an increase to the ACL of $8.9 million, related to the transition from the incurred loss model to the CECL ACL model, and an increase of $434,000 related to the transition from PCI to PCD methodology, relative to the ALLL as of June 30, 2020. The Company also recorded an adjustment to the reserve for unfunded commitments recorded in other liabilities of $268,000. The impact at adoption was reflected as an adjustment to beginning retained earnings, net of income taxes, in the amount of $7.2 million. In accordance with the new standard, management did not reassess whether PCI assets met the criteria of PCD assets as of the date of adoption. The adoption of ASU 2016-13 in fiscal 2021 could also impact the Company’s future earnings, perhaps materially

The following table illustrates the impact of adoption of ASU 2016-13:

July 1, 2020

 

As reported

 

As reported

 

Impact of

 

under

 

prior to

 

adoption

(dollars in thousands)

    

ASU 2016-13

    

ASU 2016-13

    

ASU 2016-13

Loans receivable

$

2,142,363

$

2,141,929

$

434

Allowance for credit losses on loans:

Real Estate Loans:

Residential

 

8,396

 

4,875

 

3,521

Construction

 

1,889

 

2,010

 

(121)

Commercial

 

15,988

 

12,132

 

3,856

Consumer loans

 

2,247

 

1,182

 

1,065

Commercial loans

 

5,952

 

4,940

 

1,012

Total allowance for credit losses on loans

$

34,472

$

25,139

$

9,333

Total allowance for credit losses on off-balance sheet credit exposures

$

2,227

$

1,959

$

268

The above table includes the impact of ASU 2016-13 adoption for PCD assets previously classified as PCI. The change in the ACL includes $434,000 attributable to residential and commercial real estate loans, and the amortized cost basis of loans receivable was increased for those loans by that total amount.

In March 2020, the CARES Act was signed into law, creating a forbearance program for federally backed mortgage loans, protects borrowers from negative credit reporting due to loan accommodations related to the National Emergency, and provides financial institutions the option to temporarily suspend certain requirements under U.S. GAAP related to troubled debt restructurings (TDR) for a limited period of time to account for the effects of COVID-19. The Company has elected to not apply ASC Subtopic 310-40 for loans eligible under the CARES Act, based on the modification’s (1) relation to COVID-19, (2) execution for a loan that was not more than 30-days past due as of December 31, 2019, and (3) execution between March 1, 2020, and the earlier of the date that falls 60 days following the termination of the declared National Emergency, or December 31, 2020. The 2021 Consolidated Appropriations Act, signed into law in December 2020, extended the window during which loans may be modified without classification as TDRs under ASC Subtopic 310-40, to the earlier of January 1, 2022, or 60 days following the termination of the declared National Emergency.

v3.21.2
Available for Sale Securities
12 Months Ended
Jun. 30, 2021
Available for Sale Securities  
Available for Sale Securities

NOTE 2: Available for Sale Securities

The amortized cost, gross unrealized gains, gross unrealized losses and approximate fair value of securities available for sale consisted of the following:

June 30, 2021

 

 

Gross

 

Gross

 

Allowance

Estimated

 

Amortized

 

Unrealized

 

Unrealized

 

for

 

Fair

(dollars in thousands)

    

Cost

    

Gains

    

Losses

    

Credit Losses

    

Value

Debt and equity securities:

Obligations of states and political subdivisions

$

46,257

$

1,479

$

(40)

$

$

47,696

Corporate obligations

20,356

290

(335)

20,311

Other securities

 

647

 

25

 

 

 

672

TOTAL DEBT AND EQUITY SECURITIES

67,260

1,794

(375)

68,679

Mortgage-backed securities (MBS) and collateralized mortgage obligations (CMOs):

Residential MBS issued by governmental sponsored enterprises (GSEs)

64,400

932

(379)

64,953

Commercial MBS issued by GSEs

35,425

1,394

(338)

36,481

CMOs issued by GSEs

36,201

755

(49)

36,907

TOTAL MBS and CMOs

 

136,026

 

3,081

 

(766)

 

138,341

TOTAL

$

203,286

$

4,875

$

(1,141)

$

$

207,020

June 30, 2020

 

 

Gross

 

Gross

Estimated

 

Amortized

 

Unrealized

 

Unrealized

 

Fair

(dollars in thousands)

    

Cost

    

Gains

    

Losses

    

Value

Debt and equity securities:

Obligations of states and political subdivisions

$

40,486

$

1,502

$

 

41,988

Corporate obligations

6,970

 

27

 

(338)

6,659

Other securities

949

21

(5)

965

TOTAL DEBT AND EQUITY SECURITIES

48,405

1,550

(343)

49,612

Mortgage-backed securities (MBS) and collateralized mortgage obligations (CMOs):

Residential MBS issued by GSEs

62,315

1,646

(7)

63,954

Commercial MBS issued by GSEs

17,466

1,585

19,051

CMOs issued by GSEs

42,594

1,345

(32)

43,907

TOTAL MBS and CMOs

 

122,375

 

4,576

 

(39)

 

126,912

TOTAL

$

170,780

$

6,126

$

(382)

$

176,524

The amortized cost and fair value of available-for-sale securities, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

June 30, 2021

 

Amortized

 

Estimated

(dollars in thousands)

    

Cost

    

Fair Value

Within one year

$

1,873

$

1,887

After one year but less than five years

 

9,564

 

9,720

After five years but less than ten years

 

30,386

 

31,033

After ten years

 

25,437

 

26,039

Total investment securities

 

67,260

 

68,679

MBS and CMOs

 

136,026

 

138,341

Total AFS securities

$

203,286

$

207,020

The carrying value of investment and mortgage-backed securities pledged as collateral to secure public deposits and securities sold under agreements to repurchase amounted to $155.6 million and $156.1 million at June 30, 2021 and 2020, respectively. The securities pledged consist of marketable securities, including $95.4 million and $82.0 million of Mortgage-Backed Securities, $18.8 million and $41.9 million of Collateralized Mortgage Obligations, $41.4 million and $32.0 million of State and Political Subdivisions Obligations, and $0 and $200,000 of Other Securities at June 30, 2021 and 2020, respectively.

Gains of $138,000 and losses of $48,000 were recognized from sales of available-for-sale securities in fiscal 2021. There were no gains or losses recognized from sales of available-for-sale securities in fiscal 2020. Gains of $265,450 and losses of $21,576 were recognized from sales of securities from sales of available-for-sale securities in fiscal 2019.

The Company did not hold any securities of a single issuer, payable from and secured by the same source of revenue or taxing authority, the book value of which exceeded 10% of stockholders’ equity at June 30, 2021.

Certain investments in debt securities are reported in the consolidated financial statements at an amount less than their historical cost. Total fair value of these investments at June 30, 2021, was $67.2 million, which is approximately 32.5% of the Company’s available for sale investment portfolio, as compared to $10.7 million or approximately 6.0% of the Company’s available for sale investment portfolio at June 30, 2020. Management believes the declines in fair value for these securities to be temporary.

The tables below show the Company’s investments’ gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2021 and 2020.

 

Less than 12 months

 

12 months or more

 

Total

 

Unrealized

 

Unrealized

 

Unrealized

For the year ended June 30, 2021

    

Fair Value

    

Losses

    

Fair Value

    

Losses

    

Fair Value

    

Losses

(dollars in thousands)

Obligations of state and political subdivisions

$

3,177

$

40

$

$

$

3,177

$

40

Corporate obligations

9,331

79

720

256

10,051

335

MBS and CMOs

 

53,893

 

764

 

70

 

2

 

53,963

 

766

Total AFS securities

$

66,401

$

883

$

790

$

258

$

67,191

$

1,141

June 30, 2020

 

Less than 12 months

 

12 months or more

 

Total

 

Unrealized

 

Unrealized

 

Unrealized

For the year ended June 30, 2020

    

Fair Value

    

Losses

    

Fair Value

    

Losses

    

Fair Value

    

Losses

Corporate obligations

995

5

454

333

1,449

338

Other securities

189

5

189

5

MBS and CMOs

 

9,037

 

39

 

 

 

9,037

 

39

Total AFS securities

$

10,032

$

44

$

643

$

338

$

10,675

$

382

Mortgage-backed securities. The unrealized losses on the Company’s investments in mortgage-backed securities include 22 individual securities which have been in an unrealized loss position for less than 12 months. The securities are performing and are of high credit quality. The unrealized losses were caused by variations in market interest rates since purchase or acquisition. Because the Company does not intend to sell these securities and it is likely that the Company will not be required to sell these securities prior to recovery of their amortized cost basis, which may be maturity, the Company has not recorded an ACL on these securities.

Obligations of state and political subdivisions. The unrealized losses on the Company’s investments in obligations of state and political subdivisions include seven individual securities which have been in an unrealized loss position for less than 12 months. The securities are performing and are of high credit quality. The unrealized losses were caused by variations in market interest rates since purchase or acquisition. Because the Company does not intend to sell these securities and it is likely that the Company will not be required to sell these securities prior to recovery of their amortized cost basis, which may be maturity, the Company has not recorded an ACL on these securities.

Corporate Obligations. The unrealized losses on the Company’s investments in corporate obligations include seven individual securities which have been in an unrealized loss position for less than 12 months. The securities are performing and are of high credit quality. The unrealized losses were caused by variations in market interest rates since purchase or acquisition. Because the Company does not intend to sell these securities and it likely that the Company will not be required to sell these securities prior to recovery of their amortized cost basis, which may be maturity, the Company has not recorded an ACL on these securities.

At June 30, 2021 there were two pooled trust preferred securities with an estimated fair value of $720,000 and unrealized losses of $257,000 in a continuous unrealized loss position for twelve months or more. These unrealized losses were primarily due to the long-term nature of the pooled trust preferred securities and a reduced demand for these securities, and concerns regarding the financial institutions that issued the underlying trust preferred securities.

The June 30, 2021, cash flow analysis for these two securities indicated it is probable the Company will receive all contracted principal and related interest projected. The cash flow analysis used in making this determination was based on anticipated default, recovery, and prepayment rates, and the resulting cash flows were discounted based on the yield spread anticipated at the time the securities were purchased. Other inputs include the actual collateral attributes, which include credit ratings and other performance indicators of the underlying financial institutions, including profitability, capital ratios, and asset quality. Assumptions for these two securities included prepayments averaging 1.8

percent, annually, annual defaults averaging 220 basis points over the next two years, and 80 basis points thereafter, and a recovery rate averaging ten percent of gross defaults, lagged two years.

One of these two securities has continued to receive cash interest payments in full since the Company’s purchase; the other security received principal-in-kind (PIK), in lieu of cash interest, for a period of time following the recession and financial crisis which began in 2008, but resumed cash interest payments during fiscal 2014. The Company's cash flow analysis indicates that cash interest payments are expected to continue for both securities. Because the Company does not intend to sell these securities and it is likely that the Company will not be required to sell these securities prior to recovery of their amortized cost basis, which may be maturity, the Company has not recorded an ACL on these securities.

The Company does not believe any other individual unrealized loss as of June 30, 2021, is the result of a credit loss. However, the Company could be required to recognize an ACL in future periods with respect to its available for sale investment securities portfolio.

Credit losses recognized on investments.  There were no credit losses recognized in income and other losses or recorded in other comprehensive income for the periods ended June 30, 2021 and 2020.

v3.21.2
Loans and Allowance for Credit Losses
12 Months Ended
Jun. 30, 2021
Loans and Allowance for Credit Losses  
Loans and Allowance for Credit Losses

NOTE 3: Loans and Allowance for Credit Losses

Classes of loans are summarized as follows:

(dollars in thousands)

    

June 30, 2021

    

June 30, 2020

Real Estate Loans:

Residential

$

721,216

$

627,357

Construction

 

208,824

 

185,924

Commercial

 

889,793

 

887,419

Consumer loans

 

77,674

 

80,767

Commercial loans

 

414,124

 

468,448

 

2,311,631

 

2,249,915

Loans in process

 

(74,540)

 

(78,452)

Deferred loan fees, net

 

(3,625)

 

(4,395)

Allowance for loan losses

 

(33,222)

 

(25,139)

Total loans

$

2,200,244

$

2,141,929

The Company’s lending activities consist of origination of loans secured by mortgages on one- to four-family residences and commercial and agricultural real estate, construction loans on residential and commercial properties, commercial and agricultural business loans and consumer loans. At June 30, 2021, the Bank had purchased participations in 23 loans totaling $83.0 million, as compared to 23 loans totaling $58.2 million at June 30, 2020.

Residential Mortgage Lending. The Company actively originates loans for the acquisition or refinance of one- to four-family residences. This category includes both fixed-rate and adjustable-rate mortgage (“ARM”) loans amortizing over periods of up to 30 years, and the properties securing such loans may be owner-occupied or non-owner-occupied. Single-family residential loans do not generally exceed 90% of the lower of the appraised value or purchase price of the secured property. Substantially all of the one- to four-family residential mortgage originations in the Company’s portfolio are located within the Company’s primary lending area. General risks related to one- to four-family residential lending include stability of borrower income and collateral values.

The Company also originates loans secured by multi-family residential properties that are often located outside the Company’s primary lending area but made to borrowers who operate within our primary market area. The majority of the multi-family residential loans that are originated by the Company are amortized over periods generally up to 25 years, with balloon maturities typically up to ten years. Both fixed and adjustable interest rates are offered and it is typical for the Company to include an interest rate “floor” and “ceiling” in the loan agreement. Generally, multi-family

residential loans do not exceed 85% of the lower of the appraised value or purchase price of the secured property. General risks related to multi-family residential lending include rental demand and supply, rental rates, and vacancies, as well as collateral values and borrower leverage.

Commercial Real Estate Lending. The Company actively originates loans secured by owner- and non-owner-occupied commercial real estate including farmland, single- and multi-tenant retail properties, restaurants, hotels, land (improved and unimproved), nursing homes and other healthcare facilities, warehouses and distribution centers, convenience stores, automobile dealerships and other automotive-related services, and other businesses. These properties are typically owned and operated by borrowers headquartered within the Company’s primary lending area, however, the property may be located outside our primary lending area. Approximately $293.3 million of the Company’s $889.8 million in commercial real estate loans are secured by properties located outside our primary lending area. Risks to owner-occupied commercial real estate lending generally include the continued profitable operation of the borrower’s enterprise, as well as general collateral values, and may be heightened by unique, specific uses of the property serving as collateral. Non-owner-occupied commercial real estate lending risks include tenant demand and performance, lease rates, and vacancies, as well as collateral values and borrower leverage. These factors may be influenced by general economic conditions in the region, or in the United States generally. Risks to lending on farmland include unique factors such as commodity prices, yields, input costs, and weather, as well as farmland values.

Most commercial real estate loans originated by the Company generally are based on amortization schedules of up to 25 years with monthly principal and interest payments. Generally, the interest rate received on these loans is fixed for a maturity for up to ten years, with a balloon payment due at maturity. Alternatively, for some loans, the interest rate adjusts at least annually after an initial period up to seven years. The Company typically includes an interest rate “floor” in the loan agreement. Generally, improved commercial real estate loan amounts do not exceed 80% of the lower of the appraised value or the purchase price of the secured property. Agricultural real estate terms offered differ slightly, with amortization schedules of up to 25 years with an 80% loan-to-value ratio, or 30 years with a 75% loan-to-value ratio.

Construction Lending. The Company originates real estate loans secured by property or land that is under construction or development. Construction loans originated by the Company are generally to finance the construction of owner occupied residential real estate, or to finance speculative construction of residential real estate, land development, or owner-operated or non-owner occupied commercial real estate. During construction, these loans typically require monthly interest-only payments, with single-family residential construction loans having maturities ranging from six to twelve months, while multifamily or commercial construction loans typically mature in 12 to 24 months. Once construction is completed, permanent construction loans may be converted to monthly payments using amortization schedules of up to 30 years on residential and generally up to 25 years on commercial real estate. Construction and development lending risks generally include successful timely and on-budget completion of the project, followed by the sale of the property in the case of land development or non-owner-occupied real estate, or the long-term occupancy of the property by the builder in the case of owner-occupied construction. Changes in real estate values or other economic conditions may impact the ability of a borrower to sell property developed for that purpose.

While the Company typically utilizes relatively short maturity periods to closely monitor the inherent risks associated with construction loans for these loans, weather conditions, change orders, availability of materials and/or labor, and other factors may contribute to the lengthening of a project, thus necessitating the need to renew the construction loan at the balloon maturity. Such extensions are typically executed in incremental three month periods to facilitate project completion. The Company’s average term of construction loans is approximately eight months. During construction, loans typically require monthly interest only payments which may allow the Company an opportunity to monitor for early signs of financial difficulty should the borrower fail to make a required monthly payment. Additionally, during the construction phase, the Company typically performs interim inspections which further allow the Company opportunity to assess risk. At June 30, 2021, construction loans outstanding included 48 loans, totaling $28.5 million, for which a modification had been agreed to. At June 30, 2020, construction loans outstanding included 77 loans, totaling $48.8 million, for which a modification had been agreed to. In general, these modifications were solely for the purpose of extending the maturity date due to conditions described above, pursuant to the Company’s normal underwriting and monitoring procedures. As these modifications were not executed due to financial difficulty on the part of the borrower, they were not accounted for as troubled debt restructurings (TDRs); nor were they made pursuant to exemptions provided under the CARES Act. Under the CARES Act, financial institutions have the option to temporarily

suspend certain requirements under U.S. GAAP related to TDRs for a limited period of time to account for the effects of COVID-19. Loans modified under the CARES Act did not include any construction loans with drawn balances at June 30, 2021.

Consumer Lending. The Company offers a variety of secured consumer loans, including home equity, direct and indirect automobile loans, second mortgages, mobile home loans and loans secured by deposits. The Company originates substantially all of its consumer loans in its primary lending area. Usually, consumer loans are originated with fixed rates for terms of up to five years, with the exception of home equity lines of credit, which are variable, tied to the prime rate of interest and are for a period of ten years.

Home equity lines of credit (HELOCs) are secured with a deed of trust and are issued up to 100% of the appraised or assessed value of the property securing the line of credit, less the outstanding balance on the first mortgage and are typically issued for a term of ten years. Interest rates on the HELOCs are generally adjustable. Interest rates are based upon the loan-to-value ratio of the property with better rates given to borrowers with more equity. Risks related to HELOC lending generally include the stability of borrower income and collateral values.

Automobile loans originated by the Company include both direct loans and a smaller amount of loans originated by auto dealers. The Company generally pays a negotiated fee back to the dealer for indirect loans. Typically, automobile loans are made for terms of up to 60 months for new and used vehicles. Loans secured by automobiles have fixed rates and are generally made in amounts up to 100% of the purchase price of the vehicle. Risks to automobile and other consumer lending generally include the stability of borrower income and borrower willingness to repay.

Commercial Business Lending. The Company’s commercial business lending activities encompass loans with a variety of purposes and security, including loans to finance accounts receivable, inventory, equipment and operating lines of credit, including agricultural production and equipment loans. The Company offers both fixed and adjustable rate commercial business loans. Generally, commercial loans secured by fixed assets are amortized over periods up to five years, while commercial operating lines of credit or agricultural production lines are generally for a one year period. Commercial lending risk is primarily driven by the borrower’s successful generation of cash flow from their business enterprise sufficient to service debt, and may be influenced by factors specific to the borrower and industry, or by general economic conditions in the region or in the United States generally. Agricultural production or equipment lending includes unique risk factors such as commodity prices, yields, input costs, and weather, as well as farm equipment values.

Allowance for Credit Losses. The provision for credit losses or loan losses for the fiscal years ended June 30, 2021, 2020, and 2019, was $(1.0 million), $6.0 million, and $2.0 million, respectively. The (recovery) charge was based on the estimated required ACL, reflecting management’s estimate of the current expected credit losses in the Company’s loan portfolio at June 30, 2021, and as of that date the Company’s ACL was $33.2 million. Reduced provisioning in fiscal 2021 was attributed primarily to an improved outlook regarding the economic environment resulting as the economy recovers from the effects of the COVID-19 pandemic and the Company notes less uncertainty regarding the potential impact on its borrowers generally, combined with moderated growth in unguaranteed loan balances, relatively consistent levels of net charge offs, and a reduction in delinquent or adversely classified credits, and nonperforming loans. While the Company assesses that the economic outlook has significantly improved during fiscal 2021 as compared to the year ended June 30, 2020, there remains uncertainty regarding the possible continuing impact of the COVID-19 pandemic or when transmission of the virus will abate to the point that restrictions are no longer being imposed or considered, and consumer behavior can be said to have returned to normal. As such, there remains a potential for the pandemic to negatively impact global and regional economies, or for recent efforts by the U.S. government and the Federal Reserve to respond to the pandemic and its economic impact to fall short of expectations. Specifically, management considered:

●  economic conditions and projections as provided by Moody’s Analytics, including baseline and downside scenarios were utilized in the Company’s estimate at June 30, 2021. Economic factors considered in the projections included national and state levels of unemployment, and national and state rates of inflation-adjusted growth in the gross domestic product. Economic conditions are considered to be a moderate and declining risk factor;

● the pace of growth of the Company’s loan portfolio, exclusive of acquisitions or government guaranteed loans, relative to overall economic growth. This measure remains elevated, but continued to moderate in the most recent quarter, and is considered to be a moderate and declining risk factor;

● levels and trends for loan delinquencies nationally and in the region. This measure as reported remains relatively stable, but management considered the potential that the measure remains under-reported due to the availability of modifications under the CARES Act. The level of uncertainty about loan delinquencies is considered to be diminishing. This is considered to be an elevated but declining risk factor;

● exposure to the hotel industry, in particular, metropolitan area hotels more impacted by activity restrictions and a lack of business or convention-related travel. This is considered to be an elevated and stable risk factor.

Management considered the impact of the COVID-19 pandemic on its consumer and business borrowers, particularly those business borrowers most affected by efforts to contain the pandemic, including our borrowers in the retail and multi-tenant retail industry, restaurants, and hotels, when making qualitative factor adjustments. To date, various relief efforts, notably including the availability of forgivable Paycheck Protection Program (PPP) loans to borrowers and deferrals or modifications available as encouraged by banking regulatory authorities and the CARES Act, have resulted in limited impact on the Company’s credit quality indicators, as is true of the industry generally. It is possible that the ongoing adverse effects of the pandemic may not be offset by future relief efforts, which could cause the outlook for economic conditions and levels and trends of past-due loans to significantly worsen, and require additions to the ACL.

The following tables present the balance in the ACL and the recorded investment in loans (excluding loans in process and deferred loan fees) based on portfolio segment as of June 30, 2021 and 2020, and activity in the ACL and ALLL for the fiscal years ended June 30, 2021, 2020, and 2019:

(dollars in thousands)

 

Residential

Construction

 

Commercial

 

June 30, 2021

    

Real Estate

    

Real Estate

    

Real Estate

    

Consumer

    

Commercial

    

Total

Allowance for credit losses:

Balance, beginning of period

$

4,875

$

2,010

$

12,132

$

1,182

$

4,940

$

25,139

Impact of CECL adoption

3,521

(121)

3,856

1,065

1,012

9,333

Provision (benefit) charged to expense

2,973

281

(1,364)

(1,232)

(1,260)

(602)

Losses charged off

(180)

(90)

(146)

(318)

(734)

Recoveries

3

1

47

35

86

Balance, end of period

$

11,192

$

2,170

$

14,535

$

916

$

4,409

$

33,222

(dollars in thousands)

 

Residential

Construction

 

Commercial

 

June 30, 2020

    

Real Estate

    

Real Estate

    

Real Estate

    

Consumer

    

Commercial

    

Total

Allowance for loan losses:

Balance, beginning of period

$

3,706

$

1,365

$

9,399

$

1,046

$

4,387

$

19,903

Provision charged to expense

1,529

645

2,730

300

798

6,002

Losses charged off

(379)

(12)

(189)

(273)

(853)

Recoveries

19

15

25

28

87

Balance, end of period

$

4,875

$

2,010

$

12,132

$

1,182

$

4,940

$

25,139

Ending Balance: individually evaluated for impairment

$

$

$

$

$

$

Ending Balance: collectively evaluated for impairment

$

4,875

$

2,010

$

12,132

$

1,182

$

4,940

$

25,139

Ending Balance: loans acquired with deteriorated credit quality

$

$

$

$

$

$

Loans:

 

  

 

  

 

  

 

  

 

  

 

  

Ending Balance: individually evaluated for impairment

$

$

$

$

$

$

Ending Balance: collectively evaluated for impairment

$

626,085

$

106,194

$

872,716

$

80,767

$

463,902

$

2,149,664

Ending Balance: loans acquired with deteriorated credit quality

$

1,272

$

1,278

$

14,703

$

$

4,546

$

21,799

(dollars in thousands)

 

Residential

Construction

 

Commercial

 

June 30, 2019

    

Real Estate

    

Real Estate

    

Real Estate

    

Consumer

    

Commercial

    

Total

Allowance for loan losses:

Balance, beginning of period

$

3,226

$

1,097

$

8,793

$

902

$

4,196

$

18,214

Provision charged to expense

487

268

765

231

281

2,032

Losses charged off

(30)

(164)

(103)

(92)

(389)

Recoveries

23

5

16

2

46

Balance, end of period

$

3,706

$

1,365

$

9,399

$

1,046

$

4,387

$

19,903

The following table presents the balance in the Allowance for off-balance credit exposure based on portfolio segment as of June 30, 2021, and activity in allowance for the fiscal year ended June 30, 2021:

(dollars in thousands)

 

Residential

Construction

 

Commercial

 

June 30, 2021

    

Real Estate

    

Real Estate

    

Real Estate

    

Consumer

    

Commercial

    

Total

Allowance for off-balance sheet credit exposure:

Balance, beginning of period

$

19

$

769

$

172

$

153

$

846

$

1,959

Impact of CECL adoption

35

(167)

95

197

108

268

Provision (benefit) charged to expense

(17)

(100)

(79)

(132)

(94)

(422)

Balance, end of period

$

37

$

502

$

188

$

218

$

860

$

1,805

Included in the Company’s loan portfolio are certain loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination, which are considered purchased credit deteriorated (PCD) loans. Prior to the July 1, 2020 adoption of ASU 2016-13, these loans were accounted for in accordance with ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, and were described as purchased credit impaired (PCI) loans. Under ASC 310-30, these loans were written down at acquisition to an amount estimated to be collectible, and, unless there was further deterioration following the acquisition, an ALLL was not recognized for these loans. As a result, certain historical ratios regarding the Company’s loan portfolio and credit quality cannot be used to compare the Company to peer companies or to compare the Company’s credit quality over time. The ratios particularly affected by accounting under ASC 310-30 include the allowance as a percentage of loans, nonaccrual loans, and nonperforming assets, and nonaccrual loans and nonperforming loans as a percentage of total loans. For more information about the transition from PCI to PCD status of the Company’s acquired loans, see Note 2: Organization and Summary of Significant Accounting Policies, Loans.

Credit Quality Indicators. The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on all loans at origination, and is updated on a quarterly basis for loans risk rated Watch, Special Mention, Substandard, or Doubtful. In addition, lending relationships of $3 million or more, exclusive of any consumer or owner-occupied residential loan, are subject to an annual credit analysis which is prepared by the loan administration department and presented to a loan committee with appropriate lending authority. A sample of lending relationships in excess of $1 million (exclusive of single-family residential real estate loans) are subject to an independent loan review annually, in order to verify risk ratings. The Company uses the following definitions for risk ratings:

Watch – Loans classified as watch exhibit weaknesses that require more than usual monitoring. Issues may include deteriorating financial condition, payments made after due date but within 30 days, adverse industry conditions or management problems.

Special Mention – Loans classified as special mention exhibit signs of further deterioration but still generally make payments within 30 days. This is a transitional rating and loans should typically not be rated Special Mention for more than 12 months.

Substandard – Loans classified as substandard possess weaknesses that jeopardize the ultimate collection of the principal and interest outstanding. These loans exhibit continued financial losses, ongoing delinquency, overall poor financial condition, and insufficient collateral.

Doubtful – Loans classified as doubtful have all the weaknesses of substandard loans, and have deteriorated to the level that there is a high probability of substantial loss.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be Pass rated loans.

A periodic review of selected credits (based on loan size and type) is conducted to identify loans with heightened risk or probable losses and to assign risk grades. The primary responsibility for this review rests with loan administration personnel. This review is supplemented with periodic examinations of both selected credits and the credit review process by the Company’s internal audit function and applicable regulatory agencies. The information from these reviews assists management in the timely identification of problems and potential problems and provides a basis for deciding whether the credit continues to share similar risk characteristics with collectively evaluated loan pools, or whether credit losses for the loan should be evaluated on an individual loan basis.

The following table presents the credit risk profile of the Company’s loan portfolio (excluding loans in process and deferred loan fees) based on rating category and year of origination as of June 30, 2021. This table includes PCD loans, which are reported according to risk categorization after acquisition based on the Company’s standards for such classification:

(dollars in thousands)

Revolving

June 30, 

    

2021

    

2020

    

2019

    

2018

    

2017

    

Prior

    

loans

    

Total

Residential Real Estate

Pass

$

361,876

$

175,772

$

43,576

$

32,929

$

23,267

$

71,592

$

5,557

$

714,569

Watch

 

328

 

70

 

410

 

 

89

 

809

 

 

1,706

Special Mention

 

 

 

 

 

 

 

 

Substandard

 

4,288

 

89

 

 

92

 

 

472

 

 

4,941

Doubtful

 

 

 

 

 

 

 

 

Total Residential Real Estate

$

366,492

$

175,931

$

43,986

$

33,021

$

23,356

$

72,873

$

5,557

$

721,216

Construction Real Estate

 

 

 

 

 

 

 

 

Pass

$

88,371

$

45,866

$

$

$

$

$

$

134,237

Watch

 

 

 

 

 

 

 

 

Special Mention

 

 

 

 

 

 

 

 

Substandard

 

47

 

 

 

 

 

 

 

47

Doubtful

 

 

 

 

 

 

 

 

Total Construction Real Estate

$

88,418

$

45,866

$

$

$

$

$

$

134,284

Commercial Real Estate

 

 

 

 

 

 

 

 

Pass

$

351,732

$

147,670

$

104,746

$

75,967

$

70,927

$

61,194

$

23,699

$

835,935

Watch

 

4,456

 

2,365

 

9,502

 

1,377

 

726

 

10

 

810

 

19,246

Special Mention

 

 

8,806

 

 

1,793

 

12,826

 

 

300

 

23,725

Substandard

 

8,191

 

1,137

 

505

 

31

 

5

 

99

 

69

 

10,037

Doubtful

 

 

 

850

 

 

 

 

 

850

Total Commercial Real Estate

$

364,379

$

159,978

$

115,603

$

79,168

$

84,484

$

61,303

$

24,878

$

889,793

Consumer

 

 

 

 

 

 

 

 

Pass

$

23,858

$

8,626

$

3,597

$

1,126

$

534

$

650

$

39,071

$

77,462

Watch

 

80

 

 

 

 

 

 

48

 

128

Special Mention

 

 

 

 

 

 

 

 

Substandard

 

 

 

 

30

 

30

 

 

24

 

84

Doubtful

 

 

 

 

 

 

 

 

Total Consumer

$

23,938

$

8,626

$

3,597

$

1,156

$

564

$

650

$

39,143

$

77,674

Commercial

 

 

 

 

 

 

 

 

Pass

$

189,280

$

42,549

$

17,960

$

5,591

$

7,265

$

9,120

$

136,603

$

408,368

Watch

 

1,551

 

262

 

1,323

 

22

 

 

 

463

 

3,621

Special Mention

 

 

 

 

 

 

 

 

Substandard

 

594

 

81

 

305

 

 

176

 

 

979

 

2,135

Doubtful

 

 

 

 

 

 

 

 

Total Commercial

$

191,425

$

42,892

$

19,588

$

5,613

$

7,441

$

9,120

$

138,045

$

414,124

Total Loans

 

 

 

 

 

 

 

 

Pass

$

1,015,117

$

420,483

$

169,879

$

115,613

$

101,993

$

142,556

$

204,930

$

2,170,571

Watch

 

6,415

 

2,697

 

11,235

 

1,399

 

815

 

819

 

1,321

 

24,701

Special Mention

 

 

8,806

 

 

1,793

 

12,826

 

 

300

 

23,725

Substandard

 

13,120

 

1,307

 

810

 

153

 

211

 

571

 

1,072

 

17,244

Doubtful

 

 

 

850

 

 

 

 

 

850

Total

$

1,034,652

$

433,293

$

182,774

$

118,958

$

115,845

$

143,946

$

207,623

$

2,237,091

At June 30, 2021, PCD loans comprised $3.2 million of credits rated “Pass”; $9.0 million of credits rated “Watch”; none rated “Special Mention”; $2.7 million of credits rated “Substandard”; and none rated “Doubtful”.

The following table presents the credit risk profile of the Company’s loan portfolio (excluding loans in process and deferred loan fees) based on rating category and payment activity as of June 30, 2020. This table includes PCI loans, which were reported according to risk categorization after acquisition based on the Company’s standards for such classification:

(dollars in thousands)

Residential

Construction

Commercial

June 30, 2020

    

Real Estate

    

Real Estate

    

Real Estate

    

Consumer

    

Commercial

Pass

$

620,004

$

103,105

$

829,276

$

80,517

$

457,385

Watch

 

1,900

 

4,367

 

45,262

 

45

 

4,708

Special Mention

 

 

 

403

 

25

 

Substandard

 

5,453

 

 

11,590

 

180

 

6,355

Doubtful

 

 

 

888

 

 

Total

$

627,357

$

107,472

$

887,419

$

80,767

$

468,448

At June 30, 2020, PCI loans comprised $5.9 million of credits rated “Pass”; $10.3 million of credits rated “Watch”, none rated “Special Mention”, $5.6 million of credits rated “Substandard” and none rated “Doubtful”.

Past Due Loans. The following tables present the Company’s loan portfolio aging analysis (excluding loans in process and deferred loan fees) as of June 30, 2021 and 2020. These tables include PCI and PCD loans, which are reported according to aging analysis after acquisition based on the Company’s standards for such classification:

Greater Than

Greater Than 90

(dollars in thousands)

30-59 Days

60-89 Days

90 Days

Total

Total Loans

Days Past Due

June 30, 2021

    

Past Due

    

Past Due

    

Past Due

    

Past Due

    

Current

    

Receivable

    

and Accruing

Real Estate Loans:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Residential

$

312

$

364

$

613

$

1,289

$

719,927

$

721,216

$

Construction

 

 

 

30

 

30

 

134,254

 

134,284

 

Commercial

 

363

 

 

374

 

737

 

889,056

 

889,793

 

Consumer loans

 

195

 

66

 

84

 

345

 

77,329

 

77,674

 

Commercial loans

 

368

 

939

 

110

 

1,417

 

412,707

 

414,124

 

Total loans

$

1,238

$

1,369

$

1,211

$

3,818

$

2,233,273

$

2,237,091

$

Greater Than

Greater Than 90

(dollars in thousands)

30-59 Days

60-89 Days

90 Days

Total

Total Loans

Days Past Due

June 30, 2020

    

Past Due

    

Past Due

    

Past Due

    

Past Due

    

Current

    

Receivable

    

and Accruing

Real Estate Loans:

Residential

$

772

$

378

$

654

$

1,804

$

625,553

$

627,357

$

Construction

 

 

 

 

 

107,472

 

107,472

 

Commercial

 

641

 

327

 

1,073

 

2,041

 

885,378

 

887,419

 

Consumer loans

 

180

 

53

 

193

 

426

 

80,341

 

80,767

 

Commercial loans

 

93

 

1,219

 

810

 

2,122

 

466,326

 

468,448

 

Total loans

$

1,686

$

1,977

$

2,730

$

6,393

$

2,165,070

$

2,171,463

$

Under the CARES Act, financial institutions have the option to temporarily suspend certain requirements under U.S. GAAP related to TDRs for a limited period of time to account for the effects of COVID-19. Loans with such modifications in effect at June 30, 2021, included $23.9 million in loans reported as current in the above table, while none were past due. Loans with such modifications in effect at June 30, 2020, included $380.1 million in loans reported as current in the above table, while an additional $29,000 of consumer loans and $1,000 in residential real estate loans with such modifications were reported as 30-59 days past due, and $66,000 of commercial loans with such modifications were reported as 60-89 days past due at such date.

At June 30, 2021 and 2020 there were no PCD or PCI loans that were greater than 90 days past due.

Loans that experience insignificant payment delays and payment shortfalls generally are not adversely classified or determined to not share similar risk characteristics with collectively evaluated pools of loans for determination of the ACL estimate. Management determines the significance of payment delays and payment shortfalls

on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. Significant payment delays or shortfalls may lead to a determination that a loan should be individually evaluated for estimated credit losses.

Collateral-dependent Loans. The following table presents the Company’s collateral dependent loans and related ACL at June 30, 2021:

    

Amortized cost basis of

    

    

loans determined to be

Related allowance

collateral dependent

for credit losses

(dollars in thousands)

 

  

 

  

Residential real estate loans

 

  

 

  

1- to 4-family residential loans

$

895

$

223

Total loans

$

895

$

223

Impairment. Prior to the July 1, 2020, adoption of ASU 2016-13, a loan was considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it was probable the Company would be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans included nonperforming loans, as well as performing loans modified in TDRs where concessions were granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection.

The table below presents impaired loans (excluding loans in process and deferred loan fees) as of June 30, 2020. The table includes PCI loans at June 30, 2020 for which it was deemed probable, at acquisition, that the Company would be unable to collect all contractually required payments receivable. In an instance where, subsequent to the acquisition, the Company determined it was probable, for a specific loan, that cash flows received would exceed the amount previously expected, the Company will recalculate the amount of accretable yield in order to recognize the improved cash flow expectation as additional interest income over the remaining life of the loan. These loans, however, continued to be reported as impaired loans. In an instance where, subsequent to the acquisition, the Company determined it was probable, for a specific loan, that cash flows received would be less than the amount previously expected, the Company would allocate a specific allowance under the terms of ASC 310-10-35.

(dollars in thousands)

Recorded

Unpaid Principal

Specific

June 30, 2020

    

Balance

    

Balance

    

Allowance

Loans without a specific valuation allowance:

Residential real estate

$

3,811

$

4,047

$

Construction real estate

 

1,278

 

1,312

 

Commercial real estate

 

19,271

 

23,676

 

Consumer loans

 

 

Commercial loans

 

5,040

 

6,065

 

Loans with a specific valuation allowance:

 

  

 

  

 

Residential real estate

$

$

$

Construction real estate

 

 

 

Commercial real estate

 

 

 

Consumer loans

 

 

 

Commercial loans

 

 

 

Total:

 

  

 

  

 

  

Residential real estate

$

3,811

$

4,047

$

Construction real estate

$

1,278

$

1,312

$

Commercial real estate

$

19,271

$

23,676

$

Consumer loans

$

$

$

Commercial loans

$

5,040

$

6,065

$

At June 30, 2020, PCI loans comprised $21.8 million of impaired loans without a specific valuation allowance.

The following tables present information regarding interest income recognized on impaired loans:

Fiscal 2020

Average

Investment in

Interest Income

(dollars in thousands)

    

Impaired Loans

    

Recognized

Residential Real Estate

 

$

1,440

$

89

Construction Real Estate

1,295

 

134

Commercial Real Estate

16,175

 

1,276

Consumer Loans

 

Commercial Loans

5,597

 

419

Total Loans

 

$

24,507

 

$

1,918

Fiscal 2019

Average

Investment in

Interest Income

(dollars in thousands)

    

Impaired Loans

    

Recognized

Residential Real Estate

 

$

2,081

 

$

112

Construction Real Estate

1,297

246

Commercial Real Estate

14,547

1,570

Consumer Loans

Commercial Loans

4,212

926

Total Loans

 

$

22,137

 

$

2,854

Interest income on impaired loans recognized on a cash basis in the fiscal years ended June 30, 2020 and 2019 was immaterial.

For the fiscal years ended June 30, 2020 and 2019, the amount of interest income recorded for impaired loans that represents a change in the present value of future cash flows attributable to the passage of time was approximately $236,000, and $1.3 million, respectively.

Nonaccrual Loans. The following table presents the Company’s amortized cost basis of nonaccrual loans segmented by class of loans at June 30, 2021 and 2020. The table excludes performing TDRs.

June 30, 

(dollars in thousands)

    

2021

    

2020

Residential real estate

$

3,235

$

4,010

Construction real estate

 

30

 

Commercial real estate

 

1,914

 

3,106

Consumer loans

 

100

 

196

Commercial loans

 

589

 

1,345

Total loans

$

5,868

$

8,657

At June 30, 2021, there were no nonaccrual loans individually evaluated for which no ACL was recorded. Interest income recognized on nonaccrual loans in the periods ended June 30, 2021 and 2020, was immaterial.

Troubled Debt Restructurings. Prior to the July 1, 2020, adoption of ASU 2016-13, loans restructured as TDRs were included in certain loan categories classified as impaired loans, where economic concessions have been granted to borrowers who have experienced financial difficulties. Subsequent to the adoption of ASU 2016-13, TDRs are evaluated to determine whether they share similar risk characteristics with collectively evaluated loan pools, or must be individually evaluated. These concessions typically result from our loss mitigation activities, and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions. In general, the Company’s loans that have been subject to classification as TDRs are the result of guidance under ASU No. 2011-02, which indicates that the Company may not consider the borrower’s effective borrowing rate on the old debt immediately before the restructuring in determining whether a concession has been granted. Certain TDRs are classified as nonperforming at the time of restructuring and typically are returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period of at least six months.

During fiscal 2021, there were three loans modified as TDRs totaling $894,000. During fiscal 2020, there were no loans modified as TDRs.

Performing loans classified as TDRs at June 30, 2021 and June 30, 2020 segregated by class, are shown in the table below. Nonperforming TDRs are shown in nonaccrual loans.

June 30, 2021

June 30, 2020

Number of

Recorded

Number of

Recorded

(dollars in thousands)

    

modifications

    

Investment

    

modifications

    

Investment

Residential real estate

 

1

$

895

 

3

$

791

Construction real estate

 

 

 

 

Commercial real estate

 

4

 

949

 

10

 

4,544

Consumer loans

 

 

 

 

Commercial loans

 

7

 

1,397

 

7

 

3,245

Total

 

12

$

3,241

 

20

$

8,580

Real Estate Foreclosures. The Company may obtain physical possession of real estate collateralizing a residential mortgage loan or home equity loan via foreclosure or in-substance repossession. As of June 30, 2021 and June 30, 2020, the carrying value of foreclosed residential real estate properties as a result of obtaining physical possession was $622,000 and $563,000, respectively. In addition, as of June 30, 2021 and June 30, 2020, the Company had residential mortgage loans and home equity loans with a carrying value of $533,000 and $435,000, respectively, collateralized by residential real estate property for which formal foreclosure proceedings were in process.

Following is a summary of loans to executive officers, directors, significant shareholders and their affiliates held by the Company at June 30, 2021 and 2020, respectively:

June 30, 

(dollars in thousands)

    

2021

    

2020

Beginning Balance

 

$

8,603

$

9,132

Additions

 

 

8,474

 

5,179

Repayments

 

 

(6,453)

 

(5,708)

Ending Balance

 

$

10,624

$

8,603

v3.21.2
Premises and Equipment
12 Months Ended
Jun. 30, 2021
Premises and Equipment  
Premises and Equipment

NOTE 4: Premises and Equipment

Following is a summary of premises and equipment:

    

June 30, 

(dollars in thousands)

    

2021

    

2020

Land

$

12,452

$

12,585

Buildings and improvements

 

56,422

 

56,039

Construction in progress

 

1,158

 

435

Furniture, fixtures, equipment and software

 

18,985

 

18,109

Automobiles

 

120

 

120

Operating leases ROU asset

 

2,770

 

1,965

 

91,907

 

89,253

Less accumulated depreciation

 

27,830

 

24,147

$

64,077

$

65,106

Leases. The Company adopted ASU 2016-02, Leases (Topic 842), on July 1, 2019, using the modified retrospective transition approach whereby comparative periods were not restated. The Company also elected certain relief options under the ASU, including the option not to recognize right of use (“ROU”) asset and lease liabilities that arise from short-term leases (leases with terms of twelve months or less). The Company has six leased properties and numerous office equipment lease agreements in which it is the lessee, with lease terms exceeding twelve months.

All of the leases are classified as operating leases, and therefore, were previously not recognized on the Company’s consolidated balance sheets. With the adoption of ASU 2016-02, these operating leases are now included as a ROU asset in the premises and equipment line item on the Company’s consolidated balance sheets. The corresponding lease liability is included in the accounts payable and other liabilities line item on the Company’s consolidated balance sheets. Because these leases are classified as operating leases, the adoption of the new standard did not have a material effect on lease expense on the Company’s consolidated statements of income.

ASU 2016-02 also requires certain other accounting elections. The Company elected the short-term lease recognition exemption for all leases that qualify, meaning those with terms under twelve months. ROU assets or lease liabilities are not to be recognized for short-term leases. The calculated amount of the ROU assets and lease liabilities in the table below are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. Regarding the discount rate, the ASU requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate is

rarely determinable, the Company utilizes its incremental borrowing rate at lease inception over a similar term. The discount rate utilized was 5%. The expected lease terms range from 18 months to 21 years.

At or For the

At or For the

Twelve Months Ended

Twelve Months Ended

June 30, 2021

June 30, 2020

Consolidated Balance Sheet

Operating leases right of use asset

$

2,770

$

1,965

Operating leases liability

$

2,770

$

1,965

Consolidated Statement of Income

Operating lease costs classified as occupancy and equipment expense

$

340

$

214

(includes short-term lease costs)

Supplemental disclosures of cash flow information

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

$

282

$

174

ROU assets obtained in exchange for operating lease obligations:

$

804

$

2,004

For the years ended June 30, 2021 and 2020, lease expense was $340,000 and $214,000, respectively. At June 30, 2021, future expected lease payments for leases with terms exceeding one year were as follows:

(dollars in thousands)

    

  

2022

$

338

2023

 

272

2024

 

272

2025

 

272

2026

 

272

Thereafter

 

3,142

Future lease payments expected

$

4,568

v3.21.2
Deposits
12 Months Ended
Jun. 30, 2021
Deposits  
Deposits

NOTE 5: Deposits

Deposits are summarized as follows:

    

June 30, 

(dollars in thousands)

    

2021

    

2020

Non-interest bearing accounts

$

358,418

$

316,048

NOW accounts

 

925,280

 

781,937

Money market deposit accounts

 

253,614

 

231,162

Savings accounts

 

230,905

 

181,229

TOTAL NON-MATURITY DEPOSITS

1,768,217

1,510,376

Certificates

0.00-0.99%

332,958

72,236

1.00-1.99%

155,078

393,625

2.00-2.99%

63,777

168,985

3.00-3.99%

10,606

39,191

4.00-4.99%

167

160

5.00-5.99%

6.00-6.99%

274

TOTAL CERTIFICATES

562,586

674,471

TOTAL DEPOSITS

$

2,330,803

$

2,184,847

The aggregate amount of deposits with a minimum denomination of $250,000 was $668.8 million and $611.4 million at June 30, 2021 and 2020, respectively.

Certificate maturities are summarized as follows:

(dollars in thousands)

    

July 1, 2021 to June 30, 2022

$

358,777

July 1, 2022 to June 30, 2023

90,169

July 1, 2023 to June 30, 2024

21,530

July 1, 2024 to June 30, 2025

40,503

July 1, 2025 to June 30, 2026

51,607

TOTAL

$

562,586

Brokered certificates totaled $5.0 million and $23.3 million at June 30, 2021 and 2020, respectively. Deposits from executive officers, directors, significant shareholders and their affiliates (related parties) held by the Company at June 30, 2021 and 2020 totaled approximately $4.3 million and $4.2 million, respectively.

v3.21.2
Advances from Federal Home Loan Bank
12 Months Ended
Jun. 30, 2021
Advances from Federal Home Loan Bank  
Advances from Federal Home Loan Bank

NOTE 6:  Advances from Federal Home Loan Bank

Advances from Federal Home Loan Bank are summarized as follows:

Interest

June 30, 

 

Maturity

Rate

2021

2020

 

(dollars in thousands)

09/09/20

2.02

%  

4,982

11/23/20

2.13

%  

1,741

01/14/21

1.92

%  

249

03/31/21

1.68

%  

248

05/17/21

2.43

%  

5,000

06/10/21

1.42

%  

247

09/07/21

2.81

%  

9,000

9,000

09/09/21

2.28

%  

1,994

1,977

10/01/21

2.53

%  

5,000

5,000

11/16/21

2.43

%  

5,000

5,000

03/07/22

0.95

%  

3,000

3,000

03/31/22

1.91

%  

248

246

08/15/22

1.89

%  

3,000

3,000

03/06/23

0.99

%  

3,000

3,000

03/06/24

0.95

%  

3,000

3,000

03/28/24

2.56

%  

8,000

8,000

08/13/24

1.88

%  

3,000

3,000

02/21/25

1.28

%  

5,000

5,000

02/21/25

1.53

%  

5,000

5,000

03/06/25

1.01

%  

3,000

3,000

12/14/26

2.65

%  

287

334

TOTAL

$

57,529

$

70,024

Weighted-average rate

1.97

%

2.01

%

Of the advances outstanding at June 30, 2021, two advances totaling $10.0 million are callable by the FHLB prior to maturity. In addition to the above advances, the Bank had additional available credit amounting to $383.0 million and $296.6 million with the FHLB at June 30, 2021 and 2020, respectively.

Advances from FHLB of Des Moines are secured by FHLB stock and commercial real estate and one- to four-family mortgage loans pledged. To secure outstanding advances and the Bank’s line of credit, loans totaling $769.8 million and $768.7 million were pledged to the FHLB at June 30, 2021 and 2020, respectively. The principal maturities of FHLB advances at June 30, 2021, are below:

June 30, 2021

FHLB Advance Maturities

    

(dollars in thousands)

July 1, 2021 to June 30, 2022

$

24,242

July 1, 2022 to June 30, 2023

6,000

July 1, 2023 to June 30, 2024

11,000

July 1, 2024 to June 30, 2025

16,000

July 1, 2025 to June 30, 2026

July 1, 2025 to thereafter

287

TOTAL

$

57,529

v3.21.2
Subordinated Debt
12 Months Ended
Jun. 30, 2021
Debt Disclosure [Abstract]  
Subordinated Debt

NOTE 7: Subordinated Debt

In March 2004, the Company established Southern Missouri Statutory Trust I as a statutory business trust, to issue Floating Rate Capital Securities (the “Trust Preferred Securities”). The securities mature in 2034, became redeemable after five years, and bear interest at a floating rate based on LIBOR. The securities represent undivided beneficial interests in the trust, which was established by the Company for the purpose of issuing the securities. The Trust Preferred Securities were sold in a private transaction exempt from registration under the Securities Act of 1933, as amended (the “Act”) and have not been registered under the Act. The securities may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Southern Missouri Statutory Trust I used the proceeds from the sale of the Trust Preferred Securities to purchase Junior Subordinated Debentures (the “Debentures”) of the Company which have terms identical to the Trust Preferred Securities. At June 30, 2021, the Debentures carried an interest rate of 2.87%. The balance of the Debentures outstanding was $7.2 million at June 30, 2021 and June 30, 2020. The Company used its net proceeds for working capital and investment in its subsidiaries.

In connection with its October 2013 acquisition of Ozarks Legacy Community Financial, Inc. (OLCF), the Company assumed $3.1 million in floating rate junior subordinated debt securities. The debt securities had been issued in June 2005 by OLCF in connection with the sale of trust preferred securities, bear interest at a floating rate based on LIBOR, are now redeemable at par, and mature in 2035. At June 30, 2021, the current rate was 2.57%. The carrying value of the debt securities was approximately $2.7 million at June 30, 2021 and 2020.

In connection with its August 2014 acquisition of Peoples Service Company, Inc. (PSC), the Company assumed $6.5 million in floating rate junior subordinated debt securities. The debt securities had been issued in 2005 by PSC’s subsidiary bank holding company, Peoples Banking Company, in connection with the sale of trust preferred securities, bear interest at a floating rate based on LIBOR, are now redeemable at par, and mature in 2035. At June 30, 2021, the current rate was 1.92%. The carrying value of the debt securities was approximately $5.3 million at June 30, 2021 and 2020.

The Company’s investment at a face amount of $505,000 in these trusts is included with Prepaid Expenses and Other Assets in the consolidated balance sheets, and is carried at a value of $458,000 at June 30, 2021.

v3.21.2
Employee Benefits
12 Months Ended
Jun. 30, 2021
Employee Benefits  
Employee Benefits

NOTE 8: Employee Benefits

401(k) Retirement Plan. The Bank has a 401(k) retirement plan that covers substantially all eligible employees. The Bank makes “safe harbor” matching contributions of up to 4% of eligible compensation, depending upon the percentage of eligible pay deferred into the plan by the employee. Additional profit-sharing contributions of 5% of eligible salary have been accrued for the plan year ended June 30, 2021, which the board of directors authorizes based on management recommendations and financial performance for fiscal 2021. Total 401(k) expense for fiscal 2021, 2020, and 2019, $1.7 million, $1.5 million, and $1.3 million, respectively. At June 30, 2021, 401(k) plan participants held approximately 394,000 shares of the Company’s stock in the plan. Employee deferrals and safe harbor contributions are fully vested. Profit-sharing or other contributions vest over a period of five years.

2008 Equity Incentive Plan. The Company adopted an Equity Incentive Plan (the EIP) in 2008, reserving for award 132,000 shares (split-adjusted). EIP shares were available for award to directors, officers, and employees of the Company and its affiliates by a committee of outside directors. The committee held the power to set vesting requirements for each award under the EIP. At the 2017 annual meeting, shareholders approved the 2017 Omnibus Incentive Plan, which provided that no further awards would be made under the EIP. From fiscal 2012 through fiscal 2017, the Company awarded 122,803 shares, and no awards were made under the plan since fiscal 2017. All EIP awards were in the form of either restricted stock vesting at the rate of 20% of such shares per year, or performance-based restricted stock vesting at up to of 20% of such shares per year, contingent on the achievement of specified profitability targets over a three-year period. During fiscal 2021, 2020, and 2019, there were 2,700, 2,825, and 7,100 EIP shares (split-adjusted) vested each year, respectively. Compensation expense, in the amount of the fair market value of the common stock at the date of grant, is recognized pro-rata over the five years during which the shares vest. The EIP

expense for fiscal 2021, 2020, and 2019 was $84,000, $88,000, and $141,000, respectively. At June 30, 2021, unvested compensation expense related to the EIP was approximately $51,000.

2003 Stock Option Plan. The Company adopted a stock option plan in October 2003 (the 2003 Plan). Under the plan, the Company granted options to purchase 242,000 shares (split-adjusted) to employees and directors, of which, options to purchase 187,000 shares (split-adjusted) have been exercised, options to purchase 45,000 shares (split-adjusted) have been forfeited, and 10,000 remain outstanding. Under the 2003 Plan, exercised options may be issued from either authorized but unissued shares, or treasury shares. At the 2017 annual meeting, shareholders approved the 2017 Omnibus Incentive Plan, which provided that no further awards would be made under the 2003 Plan.

As of June 30, 2021, there was no remaining unrecognized compensation expense related to unvested stock options under the 2003 Plan. The aggregate intrinsic value of stock options outstanding, all of which were exercisable, at June 30, 2021, was $274,000. During fiscal 2020, options to purchase 10,000 shares were exercised; no options to purchase shares were exercised in fiscal 2021 or 2019. The intrinsic value of options vested in fiscal 2020 and 2019 was $14,000, and $35,000, respectively, and no options vested in fiscal 2021.

2017 Omnibus Incentive Plan. The Company adopted an equity-based incentive plan in October 2017 (the 2017 Plan). Under the 2017 plan, the Company reserved for issuance 500,000 shares of common stock for awards to employees and directors, against which full value awards (stock-based awards other than stock options and stock appreciation rights) are to be counted on a 2.5-for-1 basis. The 2017 Plan authorized awards to be made to employees, officers, and directors by a committee of outside directors. The committee held the power to set vesting requirements for each award under the 2017 Plan. Under the 2017 Plan, stock awards and shares issued pursuant to exercised options may be issued from either authorized but unissued shares, or treasury shares.

Under the 2017 Plan, options to purchase 79,500 shares have been issued to employees, of which none have been exercised or forfeited, and 79,500 remain outstanding. As of June 30, 2021, there was $489,000 in remaining unrecognized compensation expense related to unvested stock options under the 2017 Plan, which will be recognized over the remaining weighted average vesting period. The aggregate intrinsic value of in-the-money stock options outstanding under the 2017 Plan at June 30, 2021, was $728,000, and no options were exercisable at June 30, 2021, at a strike price in excess of the market price. The intrinsic value of options vested in fiscal 2021 was $87,000. No in-the-money options were vested in fiscal 2020 or 2019.

Full value awards totaling 18,925, 15,525, and 15,000 shares, respectively, were issued to employees and directors in fiscal 2021, 2020, and 2019. All full value awards were in the form of either restricted stock vesting at the rate of 20% of such shares per year, or performance-based restricted stock vesting at up to 20% of such shares per year, contingent on the achievement of specified profitability targets over a three-year period. During fiscal 2021, 2020, and 2019, full value awards of 9,770, 7,080 and 4,200 shares were vested, respectively. Compensation expense, in the amount of the fair market value of the common stock at the date of grant, is recognized pro-rata over the five years during which the shares vest. Compensation expense for full value awards under the 2017 Plan for fiscal 2021, 2020, and 2019 was $351,000, $293,000, and $189,000, respectively. At June 30, 2021, unvested compensation expense related to full value awards under the 2017 Plan was approximately $1.5 million.

Changes in options outstanding under the 2003 Plan and the 2017 Plan were as follows:

2021

2020

2019

Weighted

Weighted

Weighted

Average

Average

Average

Price

Number

Price

Number

Price

Number

Outstanding at beginning of year

$

33.22

60,500

$

26.35

51,000

$

22.18

33,500

Granted

34.91

29,000

37.40

19,500

34.35

17,500

Exercised

6.38

(10,000)

Forfeited

 

 

 

Outstanding at year-end

$

33.77

89,500

$

33.22

60,500

$

26.35

51,000

Options exercisable at year-end

$

29.79

29,000

$

26.31

18,900

$

14.73

20,700

The following is a summary of the assumptions used in the Black-Scholes pricing model in determining the fair values of options granted during fiscal years 2021, 2020, and 2019:

2021

2020

2019

Assumptions:

Expected dividend yield

1.83

%

1.60

%

1.51

%

Expected volatility

 

27.72

%

22.55

%

20.39

%

Risk-free interest rate

1.14

%

1.55

%

2.67

%

Weighted-average expected life (years)

10.00

10.00

10.00

Weighted-average fair value of options granted during the year

$

9.19

$

8.81

$

8.78

The table below summarizes information about stock options outstanding under the 2003 Plan and 2017 Plan at June 30, 2021:

Weighted

Options Outstanding

Options Exercisable

Average

Weighted

Weighted

Remaining

Average

Average

Contractual

Number

Exercise

Number

Exercise

Life

Outstanding

Price

Exercisable

Price

38 mo.

10,000

$

17.55

10,000

$

17.55

79 mo.

13,500

37.31

8,100

37.31

90 mo.

17,500

34.35

7,000

34.35

104 mo.

19,500

37.40

3,900

37.40

115 mo.

29,000

34.91

34.91

v3.21.2
Income Taxes
12 Months Ended
Jun. 30, 2021
Income Taxes  
Income Taxes.

NOTE 9: Income Taxes

The Company and its subsidiary files income tax returns in the U.S. Federal jurisdiction and various states. The Company is no longer subject to U.S. federal and state tax examinations by tax authorities for tax years ending June 30, 2017 and before. The Company’s Missouri income tax returns for the fiscal years ending June 30, 2016 through 2018 are under audit by the Missouri Department of Revenue. The Company recognized no interest or penalties related to income taxes for the periods presented.

The components of net deferred tax assets are summarized as follows:

(dollars in thousands)

    

June 30, 2021

    

June 30, 2020

Deferred tax assets:

 

  

 

  

Provision for losses on loans

$

7,626

$

5,802

Accrued compensation and benefits

 

826

 

825

NOL carry forwards acquired

 

147

 

149

Minimum Tax Credit

 

 

130

Unrealized loss on other real estate

 

180

 

257

Other

 

182

 

26

Total deferred tax assets

 

8,961

 

7,189

Deferred tax liabilities:

 

 

Purchase accounting adjustments

 

210

 

64

Depreciation

 

1,842

 

1,665

FHLB stock dividends

 

120

 

120

Prepaid expenses

 

283

 

259

Unrealized gain on available for sale securities

 

821

 

1,265

Other

 

1,193

 

104

Total deferred tax liabilities

 

4,469

 

3,477

Net deferred tax asset

$

4,492

$

3,712

As of June 30, 2021, the Company had approximately $706,000 and $0 in federal and state net operating loss carryforwards, respectively, which were acquired in the July 2009 acquisition of Southern Bank of Commerce, the February 2014 acquisition of Citizens State Bankshares of Bald Knob, Inc., and the April 2020 acquisition of Central Federal Savings and Loan. The amount reported is net of the IRC Sec. 382 limitation, or state equivalent, related to utilization of net operating loss carryforwards of acquired corporations. Unless otherwise utilized, the net operating losses will begin to expire in 2027.

A reconciliation of income tax expense at the statutory rate to the Company’s actual income tax expense is shown below:

For the year ended June 30

(dollars in thousands)

2021

2020

2019

Tax at statutory rate

$

12,538

$

7,231

$

7,550

Increase (reduction) in taxes resulting from:

 

 

 

Nontaxable municipal income

 

(453)

 

(444)

 

(400)

State tax, net of Federal benefit

 

1,018

 

299

 

487

Cash surrender value of Bank-owned life insurance

 

(378)

 

(214)

 

(279)

Tax credit benefits

 

(11)

 

(48)

 

(270)

Other, net

 

(189)

 

63

 

(41)

Actual provision

$

12,525

$

6,887

$

7,047

For the years ended June 30, 2021, 2020, and 2019, income tax expense at the statutory rate was calculated using a 21% annual effective tax rate (AETR).

Tax credit benefits are recognized under the deferral method of accounting for investments in tax credits.

v3.21.2
Accumulated Other Comprehensive Income (AOCI)
12 Months Ended
Jun. 30, 2021
Accumulated Other Comprehensive Income (AOCI)  
Accumulated Other Comprehensive Income (AOCI)

NOTE 10: Accumulated Other Comprehensive Income (AOCI)

The components of AOCI, included in stockholders’ equity, are as follows:

June 30, 

(dollars in thousands)

    

2021

    

2020

Net unrealized gain on securities available-for-sale

$

3,734

$

5,744

Net unrealized gain on securities available-for-sale securities for which a portion of an other-than-temporary impairment has been recognized in income

(1)

(1)

Unrealized gain from defined benefit pension plan

(26)

(32)

3,707

5,711

Tax effect

(825)

(1,264)

Net of tax amount

$

2,882

$

4,447

Amounts reclassified from AOCI and the affected line items in the consolidated statements of income during the years ended June 30, 2021 and 2020, were as follows:

Amounts Reclassified From AOCI

(dollars in thousands)

Affected Line Item in the Condensed

    

2021

    

2020

    

Consolidated Statements of Income

Unrealized gain on securities available-for-sale

$

90

$

Net realized gains on sale of AFS securities

Amortization of defined benefit pension items:

6

6

Compensation and benefits (included in computation of net periodic pension costs)

Total reclassified amount before tax

96

6

Tax benefit

20

1

Provision for income tax

Total reclassification out of AOCI

$

76

$

5

Net Income

v3.21.2
Stockholders' Equity and Regulatory Capital
12 Months Ended
Jun. 30, 2021
Stockholders' Equity and Regulatory Capital  
Stockholders' Equity and Regulatory Capital

NOTE 11: Stockholders’ Equity and Regulatory Capital

The Company and Bank are subject to various regulatory capital requirements administered by the Federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory—and possibly additional discretionary – actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of the Company and the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under U.S. GAAP, regulatory reporting requirements and regulatory capital standards. The Company and Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Furthermore, the Company and Bank’s regulators could require adjustments to regulatory capital not reflected in the condensed consolidated financial statements.

Quantitative measures established by regulatory capital standards to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total capital, Tier 1 capital (as defined), and common equity Tier 1 capital (as defined) to risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average total assets (as defined). Additionally, to make distributions or discretionary bonus payments, the Company and Bank must maintain a capital conservation buffer of 2.5% of risk-weighted assets. Management believes, as of June 30, 2021 and 2020, that the Company and the Bank met all capital adequacy requirements to which they are subject.

Effective January 1, 2020, depository institutions and depository institution holding companies that have less than $10 billion in total consolidated assets and meet other qualifying criteria, including a tier 1 leverage ratio of greater than 9 percent, are considered qualifying community banking organizations and are eligible to opt into an alternative, simplified regulatory capital framework, which utilizes a newly-defined “Community Bank Leverage Ratio” (CBLR). The CBLR framework is an optional framework that is designed to reduce burden by removing the requirements for calculating and reporting risk-based capital ratios for qualifying community banking organizations that opt into the framework. Qualifying community banking organizations that elect to use the CBLR framework and that maintain a leverage ratio of greater than 9 percent are considered to have satisfied the risk-based and leverage capital requirements in the agencies’ generally applicable capital rule. In April 2020, the federal bank regulatory agencies announced the issuance of two interim final rules to provide temporary relief to community banking organizations. Under the rules, CBLR requirement was a minimum of 8% for the remainder of calendar year 2020, and is 8.5% for calendar year 2021, and 9% thereafter. The Company and the Bank have not made an election to utilize the CBLR framework, but will continue to monitor the available option, and could do so in the future.

In August 2020, the Federal banking agencies adopted a final rule updating a December 2018 rule regarding the impact on regulatory capital of adoption of the CECL standard. The rule now allows institutions that adopt the CECL standard in 2020 a five-year transition period to recognize the estimated impact of adoption on regulatory capital. The Company and the Bank elected to exercise the option to recognize the impact of adoption over the five-year period.

As of June 30, 2021, the most recent notification from the Federal banking agencies categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized the Bank must maintain minimum total risk-based, Tier 1 risk-based, common equity Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank’s category.

The tables below summarize the Company and Bank’s actual and required regulatory capital:

To Be Well Capitalized Under

 

Prompt Corrective Action

 

Actual

For Capital Adequacy Purposes

Provisions

 

As of June 30, 2021

    

Amount

    

Ratio

    

Amount

    

Ratio

    

Amount

    

Ratio

 

(dollars in thousands)

 

  

 

  

 

  

 

  

 

  

 

  

Total Capital (to Risk-Weighted Assets)

Consolidated

$

315,490

14.18

%

$

177,938

8.00

%

n/a

n/a

Southern Bank

308,482

13.96

%

176,816

8.00

%

221,019

10.00

%

Tier I Capital (to Risk-Weighted Assets)

Consolidated

287,701

12.93

%

133,453

6.00

%

n/a

n/a

Southern Bank

282,638

12.79

%

132,612

6.00

%

176,816

8.00

%

Tier I Capital (to Average Assets)

Consolidated

287,701

10.61

%

108,505

4.00

%

n/a

n/a

Southern Bank

282,638

10.43

%

108,369

4.00

%

135,461

5.00

%

Common Equity Tier I Capital (to Risk-Weighted Assets)

Consolidated

272,458

12.25

%

100,090

4.50

%

n/a

n/a

Southern Bank

282,638

12.79

%

99,459

4.50

%

143,663

6.50

%

To Be Well Capitalized Under

 

Prompt Corrective Action

 

Actual

For Capital Adequacy Purposes

Provisions

 

As of June 30, 2020

    

Amount

    

Ratio

    

Amount

    

Ratio

    

Amount

    

Ratio

 

(dollars in thousands)

 

  

 

  

 

  

 

  

 

  

 

  

Total Capital (to Risk-Weighted Assets)

Consolidated

$

278,924

13.17

%

$

169,473

8.00

%

n/a

n/a

Southern Bank

271,137

12.88

%

168,355

8.00

%

210,444

10.00

%

Tier I Capital (to Risk-Weighted Assets)

Consolidated

252,609

11.92

%

127,105

6.00

%

n/a

n/a

Southern Bank

244,822

11.63

%

126,266

6.00

%

168,355

8.00

%

Tier I Capital (to Average Assets)

Consolidated

252,609

9.95

%

101,528

4.00

%

n/a

n/a

Southern Bank

244,822

9.66

%

101,370

4.00

%

126,713

5.00

%

Common Equity Tier I Capital (to Risk-Weighted Assets)

Consolidated

237,467

11.21

%

95,328

4.50

%

n/a

n/a

Southern Bank

244,822

11.63

%

94,700

4.50

%

136,789

6.50

%

The Bank’s ability to pay dividends on its common stock to the Company is restricted to maintain adequate capital as shown in the above tables. Additionally, prior regulatory approval is required for the declaration of any dividends generally in excess of the sum of net income for that calendar year and retained net income for the preceding two calendar years. At June 30, 2021, approximately $42.9 million of the equity of the Bank was available for distribution as dividends to the Company without prior regulatory approval.

v3.21.2
Commitments and Credit Risk
12 Months Ended
Jun. 30, 2021
Commitments and Credit Risk  
Commitments and Credit Risk

NOTE 12: Commitments and Credit Risk

Standby Letters of Credit. In the normal course of business, the Company issues various financial standby, performance standby, and commercial letters of credit for its customers. As consideration for the letters of credit, the institution charges letter of credit fees based on the face amount of the letters and the creditworthiness of the counterparties. These letters of credit are stand­alone agreements, and are unrelated to any obligation the depositor has to the Company.

Standby letters of credit are irrevocable conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Financial standby letters of credit are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. Performance standby letters of credit are issued to guarantee performance of certain customers under non-financial contractual obligations. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loans to customers.

The Company had total outstanding standby letters of credit amounting to $4.0 million at June 30, 2021, and $3.2 million at June 30, 2020, with terms ranging from 12 to 24 months. At June 30, 2021, the Company’s deferred revenue under standby letters of credit agreements was nominal.

Off-balance-sheet and Credit Risk. The Company’s Consolidated Financial Statements do not reflect various financial instruments to extend credit to meet the financing needs of its customers.

These financial instruments include commitments to extend credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheets. Lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Lines of credit generally have fixed expiration dates. Since a portion of the line may expire without being drawn upon, the total unused lines do not necessarily represent future cash requirements. Each customer’s creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, commercial real estate and residential real estate. Management uses the same credit policies in granting lines of credit as it does for on balance sheet instruments.

The Company had $491.6 million in commitments to extend credit at June 30, 2021, and $416.2 million at June 30, 2020.

At June 30, 2021, total commitments to originate fixed-rate loans with terms in excess of one year were $134.5 million at rates ranging from 2.25% to 5.50%, with a weighted-average rate of 4.04%. Commitments to extend credit and standby letters of credit include exposure to some credit loss in the event of nonperformance of the customer. The Company’s policies for credit commitments and financial guarantees are the same as those for extension of credit that are recorded in the balance sheet. The commitments extend over varying periods of time with the majority being disbursed within a thirty-day period.

The Company originates collateralized commercial, real estate, and consumer loans to customers in Missouri, Arkansas, and Illinois. Although the Company has a diversified portfolio, loans aggregating $801.6 million at June 30, 2021, are secured by single and multi-family residential real estate generally located in the Company’s primary lending area.

v3.21.2
Earnings Per Share
12 Months Ended
Jun. 30, 2021
Earnings Per Share  
Earnings Per Share

NOTE 13: Earnings Per Share

The following table sets forth the computations of basic and diluted earnings per common share:

Year Ended June 30, 

(dollars in thousands except per share data)

2021

2020

2019

Net income

$

47,180

$

27,545

$

28,904

Less: distributed earnings allocated to participating securities

 

(18)

 

 

Less: undistributed earnings allocated to participating securities

 

(135)

 

 

Net income available to common shareholders

47,027

27,545

28,904

Denominator for basic earnings per share -

Weighted-average shares outstanding

 

9,007,814

 

9,189,876

 

9,193,235

Effect of dilutive securities stock options or awards

 

2,923

 

9,293

 

10,674

Denominator for diluted earnings per share

9,010,737

9,199,169

9,203,909

Basic earnings per share available to common stockholders

$

5.22

$

3.00

$

3.14

Diluted earnings per share available to common stockholders

$

5.22

$

2.99

$

3.14

Certain option and restricted stock awards were excluded from the computation of diluted earnings per share because they were anti-dilutive, based on the average market prices of the Company’s common stock for these periods. Outstanding options and shares of restricted stock totaling 99,825, 50,500, and 31,000 were excluded from the computation of diluted earnings per share for the fiscal years ended June 30, 2021, 2020, and 2019, respectively.

v3.21.2
Acquisitions
12 Months Ended
Jun. 30, 2021
Acquisitions  
Acquisitions

NOTE 14: Acquisitions

On May 22, 2020 the Company completed its acquisition of Central Federal Bancshares, Inc. (“Central”), and its wholly owned subsidiary, Central Federal Savings and Loan Association (“Central Federal”), in an all-cash transaction valued at approximately $21.9 million. Net cash paid for the acquisition totaled approximately $9.1 million. The conversion of data systems took place on June 7, 2020. The Company incurred $1.2 million of third-party acquisition-related costs with $1.2 million being included in noninterest expense in the Company’s consolidated statement of income for the year ended June 30, 2020.

Under the acquisition method of accounting, the total purchase price is allocated to net tangible and intangible assets based on their current estimated fair values on the date of the acquisition. Based on valuations of the fair value of tangible and intangible assets acquired and liabilities assumed, the purchase price for the Central acquisition is detailed in the following table.

Central Federal Bancshares

    

Fair Value of Consideration Transferred

(dollars in thousands)

Cash

$

21,942

Recognized amounts of identifiable assets acquired and liabilities assumed

  

Cash and cash equivalents

$

12,862

Investment securities

4,355

Loans

51,449

Premises and equipment

723

Identifiable intangible assets

540

Miscellaneous other assets

639

Deposits

(46,720)

Miscellaneous other liabilities

(1,783)

Total identifiable net assets

22,065

Bargain Purchase Gain

$

(123)

Of the total purchase price of $21.9 million, $540,000 has been allocated to core deposit intangible. None of the purchase price was allocated to goodwill, as the acquisition resulted in a bargain purchase gain of $123,000. The core deposit intangible will be amortized over six years on a straight line basis.

The Company acquired the $52.1 million loan portfolio at an estimated fair value discount of $662,000. The excess of expected cash flows above the fair value of the performing portion of loans will be accreted to interest income over the remaining lives of the loans in accordance with ASC 310-30. Management identified no purchased credit-impaired loans associated with the Central acquisition (ASC 310-30).

v3.21.2
Fair Value Measurements
12 Months Ended
Jun. 30, 2021
Fair Value Measurements  
Fair Value Measurements

NOTE 15: Fair Value Measurements

ASC Topic 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Topic 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities

Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in active markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities

Level 3 – Unobservable inputs supported by little or no market activity and significant to the fair value of the assets or liabilities

Recurring Measurements. The following table presents the fair value measurements of assets recognized in the accompanying consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2021 and 2020:

Fair Value Measurements at June 30, 2021, Using:

Quoted Prices in

Active Markets for

Significant Other

Significant

Identical Assets

Observable Inputs

Unobservable Inputs

(dollars in thousands)

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

Obligations of state and political subdivisions

$

47,696

$

$

47,696

$

Corporate obligations

20,311

20,311

Other securities

 

672

 

 

672

 

MBS and CMOs

 

138,341

 

 

138,341

 

Fair Value Measurements at June 30, 2020, Using:

Quoted Prices in

Active Markets for 

Significant Other

Significant

Identical Assets

Observable Inputs

Unobservable Inputs

(dollars in thousands)

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

Obligations of state and political subdivisions

$

41,988

$

$

41,988

$

Corporate obligations

6,659

6,659

Other securities

 

965

 

 

965

 

MBS and CMOs

 

126,912

 

 

126,912

 

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the year ended June 30, 2021.

Available-for-sale Securities. When quoted market prices are available in an active market, securities are classified within Level 1. If quoted market prices are not available, then fair values are estimated using pricing models, or quoted prices of securities with similar characteristics. For these securities, our Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

Nonrecurring Measurements. The following tables present the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the ASC 820 fair value hierarchy in which the fair value measurements fell at June 30, 2021 and 2020:

Fair Value Measurements at June 30, 2021, Using:

Quoted Prices in

Active Markets for

Significant Other

Significant

Identical Assets

Observable Inputs

Unobservable Inputs

(dollars in thousands)

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

Foreclosed and repossessed assets held for sale

$

280

$

$

$

280

Fair Value Measurements at June 30, 2020, Using:

Quoted Prices in

Active Markets for

Significant Other

Significant

Identical Assets

Observable Inputs

Unobservable Inputs

(dollars in thousands)

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

Foreclosed and repossessed assets held for sale

$

2,211

$

$

$

2,211

The following table presents losses recognized on assets measured on a non-recurring basis for the years ended June 30, 2021 and 2020:

(dollars in thousands)

2021

2020

Foreclosed and repossessed assets held for sale

$

(44)

$

(1,009)

Total losses on assets measured on a non-recurring basis

$

(44)

$

(1,009)

The following is a description of valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarch. For assets classified within Level 3 of fair value hierarchy, the process used to develop the reported fair value process is described below.

Foreclosed and Repossessed Assets Held for Sale. Foreclosed and repossessed assets held for sale are valued at the time the loan is foreclosed upon or collateral is repossessed and the asset is transferred to foreclosed or repossessed assets held for sale. The value of the asset is based on third party or internal appraisals, less estimated costs to sell and appropriate discounts, if any. The appraisals are generally discounted based on current and expected market conditions that may impact the sale or value of the asset and management’s knowledge and experience with similar assets. Such discounts typically may be significant and result in a Level 3 classification of the inputs for determining fair value of these assets. Foreclosed and repossessed assets held for sale are continually evaluated for additional impairment and are adjusted accordingly if impairment is identified.

Unobservable (Level 3) Inputs. The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements.

    

    

    

    

Range

    

 

Fair value at

Valuation

Unobservable

of

Weighted-average

 

(dollars in thousands)

June 30, 2021

technique

inputs

inputs applied

inputs applied

 

Nonrecurring Measurements

 

  

 

  

 

  

 

  

 

  

Foreclosed and repossessed assets

$

280

 

Third party appraisal

 

Marketability discount

 

7.2% - 80.6

%  

37.1

%




    

    

    

    

Range

    

 

Fair value at

Valuation

Unobservable

of

Weighted-average

 

(dollars in thousands)

June 30, 2020

technique

inputs

inputs applied

inputs applied

 

Nonrecurring Measurements

 

  

 

  

 

  

 

  

 

  

Foreclosed and repossessed assets

$

2,211

 

Third party appraisal

 

Marketability discount

 

8.0% - 56.9

%  

15.7

%

Fair Value of Financial Instruments. The following table presents estimated fair values of the Company’s financial instruments and the level within the fair value hierarchy in which the fair value measurements fell at June 30, 2021 and 2020:

June 30, 2021

Quoted Prices

in Active

Significant

Markets for

Significant Other

Unobservable

Carrying

Identical Assets

Observable Inputs

Inputs

(dollars in thousands)

    

Amount

    

(Level 1)

    

(Level 2)

    

(Level 3)

Financial assets

 

  

 

  

 

  

 

  

Cash and cash equivalents

$

123,592

$

123,592

$

$

Interest-bearing time deposits

 

979

 

 

979

 

Stock in FHLB

 

5,873

 

 

5,873

 

Stock in Federal Reserve Bank of St. Louis

 

5,031

 

 

5,031

 

Loans receivable, net

 

2,200,244

 

 

 

2,218,762

Accrued interest receivable

 

10,079

 

 

10,079

 

Financial liabilities

 

 

 

 

Deposits

 

2,330,803

 

1,768,217

 

 

565,123

Advances from FHLB

 

57,529

 

 

58,587

 

Accrued interest payable

 

779

 

 

779

 

Subordinated debt

 

15,243

 

 

 

15,468

Unrecognized financial instruments (net of contract amount)

 

 

 

 

Commitments to originate loans

 

 

 

 

Letters of credit

 

 

 

 

Lines of credit

 

 

 

 

June 30, 2020

Quoted Prices

in Active

Significant

Markets for

Significant Other

Unobservable

Carrying

Identical Assets

Observable Inputs

Inputs

(dollars in thousands)

    

Amount

    

(Level 1)

    

(Level 2)

    

(Level 3)

Financial assets

 

  

 

  

 

  

 

  

Cash and cash equivalents

$

54,245

$

54,245

$

$

Interest-bearing time deposits

 

974

 

 

974

 

Stock in FHLB

 

6,390

 

 

6,390

 

Stock in Federal Reserve Bank of St. Louis

 

4,363

 

 

4,363

 

Loans receivable, net

 

2,141,929

 

 

 

2,143,823

Accrued interest receivable

 

12,116

 

 

12,116

 

Financial liabilities

 

Deposits

 

2,184,847

 

1,508,740

 

 

676,816

Advances from FHLB

 

70,024

 

 

72,136

 

Accrued interest payable

1,646

 

 

1,646

 

Subordinated debt

15,142

 

 

 

11,511

Unrecognized financial instruments (net of contract amount)

 

Commitments to originate loans

 

 

 

 

Letters of credit

 

 

 

 

Lines of credit

 

 

 

 

v3.21.2
Significant Estimates
12 Months Ended
Jun. 30, 2021
Significant Estimates.  
Significant Estimates

NOTE 16: Significant Estimates

Accounting principles generally accepted in the United States of America require disclosure of certain significant estimates and current vulnerabilities due to certain concentrations. Estimates related to the allowance for loan losses are described in Note 1.

v3.21.2
Condensed Parent Company Only Financial Statements
12 Months Ended
Jun. 30, 2021
Condensed Parent Company Only Financial Statements  
Condensed Parent Company Only Financial Statements

NOTE 17: Condensed Parent Company Only Financial Statements

The following condensed balance sheets, statements of income and comprehensive income and cash flows for Southern Missouri Bancorp, Inc. should be read in conjunction with the consolidated financial statements and the notes thereto:

June 30, 

(dollars in thousands)

2021

    

2020

Condensed Balance Sheets

Assets

  

 

  

Cash and cash equivalents

$

1,193

$

4,576

Other assets

14,380

13,823

Investment in common stock of Bank

283,500

255,601

TOTAL ASSETS

$

299,073

$

274,000

Liabilities and Stockholders' Equity

  

  

Accrued expenses and other liabilities

$

407

$

511

Subordinated debt

15,243

15,142

TOTAL LIABILITIES

15,650

15,653

Stockholders' equity

283,423

258,347

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

299,073

$

274,000

Year ended June 30, 

(dollars in thousands)

2021

2020

    

2019

Condensed Statements of Income

Interest income

$

13

$

27

$

25

Interest expense

 

534

899

1,079

Net interest expense

 

(521)

(872)

(1,054)

Dividends from Bank

12,000

34,000

23,000

Bargain purchase gain

123

Operating expenses

599

1,529

827

Income before income taxes and equity in undistributed income of the Bank

10,880

31,722

21,119

Income tax benefit

235

292

358

Income before equity in undistributed income of the Bank

11,115

32,014

21,477

Equity in undistributed income of the Bank

36,065

(4,469)

7,427

NET INCOME

$

47,180

$

27,545

$

28,904

COMPREHENSIVE INCOME

$

45,615

$

30,745

$

32,496

Year ended June 30, 

(dollars in thousands)

    

2021

    

2020

    

2019

Condensed Statements of Cash Flow

Cash Flows from operating activities:

Net income

$

47,180

$

27,545

$

28,904

Changes in:

 

Equity in undistributed income of the Bank

 

(36,065)

4,469

(7,427)

Other adjustments, net

(559)

(904)

(635)

NET CASH PROVIDED BY OPERATING ACTIVITES

10,556

31,110

20,842

Investments in Bank subsidiaries

(20,463)

(10,747)

NET CASH USED IN INVESTING ACTIVITIES

(20,463)

(10,747)

Cash flows from financing activities:

Dividends on common stock

(5,598)

(5,513)

(4,763)

Exercise of stock options

64

Payments to acquire treasury stock

(8,341)

(5,771)

(1,166)

Repayments of long term debt

(3,000)

(4,400)

NET CASH USED IN FINANCING ACTIVITIES

(13,939)

(14,220)

(10,329)

Net decrease in cash and cash equivalents

(3,383)

(3,573)

(234)

Cash and cash equivalents at beginning of year

4,576

8,149

8,383

CASH AND CASH EQUIVALENTS AT END OF YEAR

$

1,193

$

4,576

$

8,149

v3.21.2
Quarterly Financial Data (Unaudited)
12 Months Ended
Jun. 30, 2021
Quarterly Financial Data (Unaudited)  
Quarterly Financial Data (Unaudited)

NOTE 18: Quarterly Financial Data (Unaudited)

Quarterly operating data is summarized as follows (in thousands):

June 30, 2021

    

First

    

Second

    

Third

    

Fourth

(dollars in thousands)

Quarter

Quarter

Quarter

Quarter

Interest income

$

26,972

$

27,871

$

27,100

$

27,532

Interest expense

 

4,908

 

4,344

 

3,951

 

3,586

 

Net interest income

 

22,064

 

23,527

 

23,149

 

23,946

 

Provision for credit losses

 

1,000

 

1,000

 

(409)

 

(2,615)

Noninterest income

4,941

5,720

4,524

4,857

Noninterest expense

13,272

13,046

13,528

14,201

Income before income taxes

 

12,733

 

15,201

 

14,554

 

17,217

Income tax expense

 

2,747

 

3,153

 

3,096

 

3,529

NET INCOME

$

9,986

$

12,048

$

11,458

$

13,688

Basic earnings per share

$

1.09

$

1.33

$

1.27

$

1.53

Diluted earnings per share

$

1.09

$

1.32

$

1.27

$

1.53

June 30, 2020

    

First

    

Second

    

Third

    

Fourth

(dollars in thousands)

Quarter

Quarter

Quarter

Quarter

Interest income

$

26,922

$

26,646

$

26,220

$

27,264

Interest expense

 

7,362

 

7,269

 

6,802

 

5,483

 

Net interest income

 

19,560

 

19,377

 

19,418

 

21,781

 

Provision for loan losses

 

896

 

388

 

2,850

 

1,868

Noninterest income

3,489

3,674

3,229

4,358

Noninterest expense

12,349

13,025

13,569

15,509

Income before income taxes

 

9,804

 

9,638

 

6,228

 

8,762

Income tax expense

 

1,976

 

1,921

 

1,129

 

1,861

NET INCOME

$

7,828

$

7,717

$

5,099

$

6,901

Basic earnings per share

$

0.85

$

0.84

$

0.55

$

0.76

Diluted earnings per share

$

0.85

$

0.84

$

0.55

$

0.76

June 30, 2019

    

First

    

Second

    

Third

    

Fourth

(dollars in thousands)

Quarter

Quarter

Quarter

Quarter

Interest income

$

22,042

$

24,207

$

25,186

$

26,047

Interest expense

 

4,875

 

6,139

 

6,632

 

7,054

 

Net interest income

 

17,167

 

18,068

 

18,554

 

18,993

 

Provision for loan losses

 

682

 

314

 

491

 

545

Noninterest income

2,944

3,568

3,423

3,158

Noninterest expense

10,963

12,066

12,667

12,196

Income before income taxes

 

8,466

 

9,256

 

8,819

 

9,410

Income tax expense

 

1,666

 

1,802

 

1,725

 

1,854

NET INCOME

$

6,800

$

7,454

$

7,094

$

7,556

Basic earnings per share

$

0.76

$

0.82

$

0.76

$

0.81

Diluted earnings per share

$

0.76

$

0.81

$

0.76

$

0.81

v3.21.2
Organization and Summary of Significant Accounting Policies (Policies)
12 Months Ended
Jun. 30, 2021
Organization and Summary of Significant Accounting Policies  
Organization

Organization. Southern Missouri Bancorp, Inc., a Missouri corporation (the Company) was organized in 1994 and is the parent company of Southern Bank (the Bank). Substantially all of the Company’s consolidated revenues are derived from the operations of the Bank, and the Bank represents substantially all of the Company’s consolidated assets and liabilities. SB Real Estate Investments, LLC is a wholly owned subsidiary of the Bank formed to hold Southern Bank Real Estate Investments, LLC. Southern Bank Real Estate Investments, LLC is a real estate investment trust (REIT) which is controlled by the investment subsidiary, and has other preferred shareholders in order to meet the requirements to be a REIT. At June 30, 2021, assets of the REIT were approximately $1.1 billion, and consisted primarily of loan participations acquired from the Bank.

The Bank is primarily engaged in providing a full range of banking and financial services to individuals and corporate customers in its market areas. The Bank and Company are subject to competition from other financial institutions. The Bank and Company are subject to the regulation of certain federal and state agencies and undergo periodic examinations by those regulatory authorities.

Basis of Financial Statement Presentation

Basis of Financial Statement Presentation. The consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America and general practices within the banking industry. In the normal course of business, the Company encounters two significant types of risk: economic and regulatory. Economic risk is comprised of interest rate risk, credit risk, and market risk. The Company is subject to interest rate risk to the degree that its interest-bearing liabilities reprice on a different basis than its interest-earning assets. Credit risk is the risk of default on the Company’s investment or loan portfolios resulting from the borrowers’ inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of the investment portfolio, collateral underlying loans receivable, and the value of the Company’s investments in real estate.

Principles of Consolidation

Principles of Consolidation. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, the Bank. All significant intercompany accounts and transactions have been eliminated.

Use of Estimates

Use of Estimates. The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

On July 1, 2020, the Company adopted ASU 2016-13, Financial Instruments – Credit Losses, also known as the current expected credit loss (“CECL”) standard, which created material changes to the existing critical accounting policy that existed at June 30, 2020. Effective July 1, 2020, the significant accounting policy which was considered to be the most critical in preparing the Company’s consolidated financial statements is the determination of the allowance for credit losses (“ACL”) on loans.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses, and estimated fair values of purchased loans.

Cash and Cash Equivalents

Cash and Cash Equivalents. For purposes of reporting cash flows, cash and cash equivalents includes cash, due from depository institutions and interest-bearing deposits in other depository institutions with original maturities of three months or less. Interest-bearing deposits in other depository institutions were $83.2 million and $6.9 million at June 30, 2021 and 2020, respectively. The deposits are held in various commercial banks with a total of $1.8 million and $0 at June 30, 2021 and 2020, respectively, exceeding the FDIC’s deposit insurance limits, as well as at the Federal Reserve and the Federal Home Loan Bank of Des Moines and Chicago.

Interest-bearing Time Deposits

Interest-bearing Time Deposits. Interest-bearing deposits in banks mature within seven years and are carried at cost.

Available for Sale Securities

Available for Sale Securities. Available for sale securities, which include any security for which the Company has no immediate plan to sell but which may be sold in the future, are carried at fair value. Unrealized gains and losses, net of tax, are reported in accumulated other comprehensive income (loss), a component of stockholders’ equity. All securities have been classified as available for sale.

Premiums and discounts on debt securities are amortized or accreted as adjustments to income over the estimated life of the security using the level yield method. Realized gains or losses on the sale of securities is based on the specific identification method. The fair value of securities is based on quoted market prices or dealer quotes. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities.

The Company does not invest in collateralized mortgage obligations that are considered high risk.

For AFS securities with fair value less than amortized cost that management has no intent to sell and believes that it more likely than not will not be required to sell prior to recovery, only the credit loss component of the impairment is recognized in earnings, while the noncredit loss is recognized in accumulated other comprehensive income (loss). The credit loss component recognized in earnings is identified as the amount of principal cash flows not expected to be received over the remaining term of the security as projected based on cash flow projections, and is recorded to the ACL, by a charge to provision for credit losses. Accrued interest receivable is excluded from the estimate of credit losses. Both the ACL and the adjustment to net income may be reversed if conditions change. However, if the Company intends to sell an impaired AFS security, or, if it is more likely than not the Company will be required to sell such a security before recovering its amortized cost basis, the entire impairment amount would be recognized in earnings with a corresponding adjustment to the security’s amortized cost basis. Because the security’s amortized cost basis is adjusted to fair value, there is no ACL in this situation.

At adoption of ASU 2016-13, no impairment on AFS securities was attributable to credit. The Company will evaluate impaired AFS securities at the individual level on a quarterly basis, and will consider such factors including, but not limited to: the extent to which the fair value of the security is less than the amortized cost basis; adverse conditions specifically related to the security, an industry, or geographic area; the payment structure of the security and likelihood of the issuer to be able to make payments that may increase in the future; failure of the issuer to make scheduled interest or principal payments; any changes to the rating of the security by a rating agency; and the ability and intent to hold the security until maturity. A qualitative determination as to whether any portion of the impairment is attributable to credit risk is acceptable. There were no credit related factors underlying unrealized losses on AFS securities at June 30, 2021, and June 30, 2020.

Changes in the ACL are recorded as expense. Losses are charged against the ACL when management believes the uncollectability of an AFS debt security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Federal Reserve Bank and Federal Home Loan Bank Stock

Federal Reserve Bank and Federal Home Loan Bank Stock. The Bank is a member of the Federal Reserve and the Federal Home Loan Bank (FHLB) systems. Capital stock of the Federal Reserve and the FHLB is a required investment based upon a predetermined formula and is carried at cost.

Loans

Loans. Loans are generally stated at unpaid principal balances, less the allowance for loan losses, any net deferred loan origination fees, and unamortized premiums or discounts on purchased loans.

Interest on loans is accrued based upon the principal amount outstanding. The accrual of interest on loans is discontinued when, in management’s judgment, the collectability of interest or principal in the normal course of business is doubtful. The Company complies with regulatory guidance which indicates that loans should be placed in nonaccrual status when 90 days past due, unless the loan is both well-secured and in the process of collection. A loan that is “in the process of collection” may be subject to legal action or, in appropriate circumstances, through other collection efforts reasonably expected to result in repayment or restoration to current status in the near future. A loan is considered delinquent when a payment has not been made by the contractual due date. At June 30, 2021, some loans were modified under the terms of the Coronavirus Aid, Relief and Economic Security Act (the CARES Act), which provides that loans modified after March 1, 2020, due to the COVID-19 pandemic, and which were otherwise current at December 31, 2019,

need not be accounted for as troubled debt restructurings (TDRs). While these loans may not have met the contractual due dates of payments under their previous terms, so long as they were compliant with the terms of the modification made under the CARES Act, they would not have been reported as delinquent at June 30, 2020 or June 30, 2021. See further disclosure in Note 3: Loans and Allowance for Loan Losses. Interest income previously accrued but not collected at the date a loan is placed on nonaccrual status is reversed against interest income. Cash receipts on a nonaccrual loan are applied to principal and interest in accordance with its contractual terms unless full payment of principal is not expected, in which case cash receipts, whether designated as principal or interest, are applied as a reduction of the carrying value of the loan. A nonaccrual loan is generally returned to accrual status when principal and interest payments are current, full collectability of principal and interest is reasonably assured, and a consistent record of performance has been demonstrated.

The ACL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans, and is established through provision for credit losses charged to current earnings. The ACL is increased by the provision for losses on loans charged to expense and reduced by loans charged off, net of recoveries. Loans are charged off in the period deemed uncollectible, based on management’s analysis of expected cash flows (for non-collateral dependent loans) or collateral value (for collateral-dependent loans). Subsequent recoveries of loans previously charged off, if any, are credited to the allowance when received.

Management estimates the ACL using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Adjustments may be made to historical loss information for differences identified in current loan-specific risk characteristics, such as differences in underwriting standards or terms; lending review systems; experience, ability, or depth of lending management and staff; portfolio growth and mix; delinquency levels and trends; as well as for changes in environmental conditions, such as changes in economic activity or employment, agricultural economic conditions, property values, or other relevant factors. The Company generally incorporates a reasonable and supportable forecast period of four quarters, and a four-quarter, straight-line reversion period to return to long-term historical averages.

The ACL is measured on a collective (pool) basis when similar risk characteristics exist. For loans that do not share general risk characteristics with the collectively evaluated pools, the Company estimates credit losses on an individual loan basis, and these loans are excluded from the collectively evaluated pools. An ACL for an individually evaluated loan is recorded when the amortized cost basis of the loan exceeds the discounted estimated cash flows using the loan’s initial effective interest rate or the fair value, less estimated costs to sell, of the collateral for certain collateral dependent loans. For the collectively evaluated pools, the Company segments the loan portfolio primarily by loan purpose and collateral into 24 pools, which are homogeneous groups of loans that possess similar loss potential characteristics. The Company primarily utilizes the discounted cash flow (“DCF”) methodology for measurement of the required ACL. For a limited number of pools with a relatively small balance of unpaid principal balance, the Company utilized the remaining life method. The DCF model implements probability of default (“PD”) and loss given default (“LGD”) calculations at the instrument level. PD and LGD are determined based on statistical analysis and correlation of historical losses with various economic factors over time. In general, the Company’s losses have not correlated well with economic factors, and the Company has utilized peer data where more appropriate. The Company defines a default as an event of charge off, an adverse (substandard or worse) internal credit rating, becoming delinquent 90 days or more, or being placed on nonaccrual status. A PD/LGD estimate is applied to a projected model of the loan’s cashflow, including principal and interest payments, with consideration for prepayment speeds, principal curtailments, and recovery lag.

Prior to the July 1, 2020, adoption of ASU 2016-13, the allowance for loan and lease losses (ALLL) represented management’s best estimate of probable losses in the existing loan portfolio at the end of the reporting period. Integral to the methodology for determining the adequacy of the ALLL was portfolio segmentation and impairment measurement. Under the Company’s methodology, loans were first segmented into 1) those comprising large groups of homogeneous loans which are collectively evaluated for impairment and 2) all other loans which are individually evaluated. Those loans in the second category were further segmented utilizing a defined grading system which involves categorizing loans by severity of risk based on conditions that may affect the ability of the borrowers to repay their debt, such as current financial information, collateral valuations, historical payment experience, credit documentation, public information, and current trends. Loans were considered impaired if, based on current information and events, it was considered probable that the Company would be unable to collect the scheduled payments of principal or interest when

due according to the contractual terms of the loan agreement, and was generally based on the fair value, less estimated costs to sell, of the loan’s collateral. If the loan was not collateral-dependent, the measurement of impairment was based on the present value of expected future cash flows discounted at the historical effective interest rate, or the observable market price of the loan. Impairment identified through this evaluation process was a component of the ALLL. If a loan was not considered impaired, it was grouped together with loans having similar characteristics (i.e., the same risk grade), and an ALLL was based upon a quantitative factor (historical average charge-offs) and qualitative factors such as changes in lending policies; national, regional, and local economic conditions; changes in mix and volume of portfolio; experience, ability, and depth of lending management and staff; entry to new markets; levels and trends of delinquent, nonaccrual, special mention, and classified loans; concentrations of credit; changes in collateral values; agricultural economic conditions; and regulatory risk.

Prior to the July 1, 2020, adoption of ASU 2016-13, loans acquired in an acquisition that had evidence of credit quality deterioration since origination and for which it was probable that the Company would be unable to collect all contractually required payments receivable were considered purchased credit impaired (“PCI”). PCI loans were individually evaluated and recorded at fair value at the date of acquisition with no initial ALLL based on a DCF methodology that considered various factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and a discount rate reflecting the Company’s assessment of risk inherent in the cash flow estimates. The difference between the DCFs expected at acquisition and the investment in the loan, or the “accretable yield,” was recognized as interest income on a level-yield method over the life of the loan. Contractually required payments for interest and principal that exceed the DCFs expected at acquisition, or the “non-accretable difference,” were not recognized on the balance sheet and did not result in any yield adjustments, loss accruals or valuation allowances. Increases in expected cash flows, including prepayments, subsequent to the initial investment were recognized prospectively through adjustment of the yield on the loan over its remaining life. Decreases in expected cash flows were recognized as impairment. ALLL on PCI loans reflected only losses incurred after the acquisition (meaning the present value of all cash flows expected at acquisition that ultimately were not to be received).

Subsequent to the July 1, 2020, adoption of ASU 2016-13, loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated (“PCD”) loans. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. This initial ACL is allocated to individual PCD loans and added to the purchase price or acquisition date fair values to establish the initial amortized cost basis of the PCD loans. As the initial ACL is added to the purchase price, there is no credit loss expense recognized upon acquisition of a PCD loan. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to non-credit factors and results in a discount or premium. Discounts and premiums are recognized through interest income on a level-yield method over the life of the loans.

Upon adoption of ASU 2016-13, the amortized cost basis of the PCD assets were adjusted to reflect the addition of $434,000 to the ACL. The remaining noncredit discount, based on the adjusted amortized cost basis, will be accreted into interest income at the effective interest rate as of July 1, 2020.

Loan fees and certain direct loan origination costs are deferred, and the net fee or cost is recognized as an adjustment to interest income using the interest method over the contractual life of the loans.

Off-Balance Sheet Credit Exposures

Off-Balance Sheet Credit Exposures. Off-balance sheet credit instruments include commitments to make loans, and commercial letters of credit, issued to meet customer financing needs. The Company’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded. The ACL on off-balance sheet credit exposures is estimated by loan pool on a quarterly basis under the current CECL model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur and is included in other liabilities on the Company’s consolidated balance sheets. The Company records an ACL on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable. In prior periods the charge for credit loss expense for off-balance sheet credit exposures was included in other non-interest

expense in the Company’s consolidated statements of income, whereas under updated regulatory accounting guidelines, that figure is combined with the provision for credit losses beginning July 1, 2020.

Foreclosed Real Estate

Foreclosed Real Estate. Real estate acquired by foreclosure or by deed in lieu of foreclosure is initially recorded at fair value less estimated selling costs, establishing a new cost basis. Costs for development and improvement of the property are capitalized.

Valuations are periodically performed by management, and an allowance for losses is established by a charge to operations if the carrying value of a property exceeds its estimated fair value, less estimated selling costs.

Loans to facilitate the sale of real estate acquired in foreclosure are discounted if made at less than market rates. Discounts are amortized over the fixed interest period of each loan using the interest method.

Premises and Equipment

Premises and Equipment. Premises and equipment are stated at cost less accumulated depreciation and include expenditures for major betterments and renewals. Maintenance, repairs, and minor renewals are expensed as incurred. When property is retired or sold, the retired asset and related accumulated depreciation are removed from the accounts and the resulting gain or loss taken into income. The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such assets are considered to be impaired, the impairment loss recognized is measured by the amount by which the carrying amount exceeds the fair value of the assets.

Depreciation is computed by use of straight-line and accelerated methods over the estimated useful lives of the assets. Estimated lives are generally seven to forty years for premises, three to seven years for equipment, and three years for software.

Bank Owned Life Insurance

Bank Owned Life Insurance. Bank owned life insurance policies are reflected in the consolidated balance sheets at the estimated cash surrender value. Changes in the cash surrender value of these policies, as well as a portion of the insurance proceeds received, are recorded in noninterest income in the consolidated statements of income.

Intangible Assets

Intangible Assets. The Company’s intangible assets at June 30, 2021 included gross core deposit intangibles of $15.3 million with $10.1 million accumulated amortization, gross other identifiable intangibles of $3.8 million with accumulated amortization of $3.8 million, and mortgage servicing rights of $1.9 million. At June 30, 2020, the Company’s intangible assets included gross core deposit intangibles of $15.3 million with $8.7 million accumulated amortization, gross other identifiable intangibles of $3.8 million with accumulated amortization of $3.8 million, and mortgage servicing rights of $1.1 million. The Company’s core deposit intangible assets are being amortized using the straight line method, over periods ranging from five to seven years, with amortization expense expected to be approximately $1.4 million in fiscal 2022, $1.4 million in fiscal 2023, $1.4 million in fiscal 2024, $807,000 in fiscal 2025, $328,000 in fiscal 2026, and none thereafter. As of June 30, 2021, and June 30, 2020, there was no impairment indicated.

Goodwill

Goodwill. The Company’s goodwill is evaluated annually for impairment or more frequently if impairment indicators are present. A qualitative assessment is performed to determine whether the existence of events or circumstances leads to a determination that it is more likely than not the fair value is less than the carrying amount, including goodwill. If, based on the evaluation, it is determined to be more likely than not that the fair value is less than the carrying value, then goodwill is tested further for impairment. If the implied fair value of goodwill is lower than its carrying amount, a goodwill impairment is indicated and goodwill is written down to its implied fair value. Subsequent increases in goodwill value are not recognized in the financial statements. As of June 30, 2021, there was no impairment indicated, based on a qualitative assessment of goodwill, which considered: the market value of the Company’s common stock; concentrations of credit; profitability; nonperforming assets; capital levels; and results of recent regulatory examinations. The Company believes there is no impairment of goodwil at June 30, 2021.

Income Taxes

Income Taxes. The Company accounts for income taxes in accordance with income tax accounting guidance (ASC 740, Income Taxes). The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying

the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur.

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to the management’s judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

The Company recognizes interest and penalties on income taxes as a component of income tax expense.

The Company files consolidated income tax returns with its subsidiaries, the Bank and SB Real Estate Investments, LLC, with a tax year ended June 30. Southern Bank Real Estate Investments, LLC files a separate REIT return for federal tax purposes, and also files state income tax returns with a tax year ended December 31.

Incentive Plan

Incentive Plans. The Company accounts for its Equity Incentive Plan (EIP), and Omnibus Incentive Plan (OIP) in accordance with ASC 718, “Share-Based Payment.” Compensation expense is based on the market price of the Company’s stock on the date the shares are granted and is recorded over the vesting period. The difference between the grant-date fair value and the fair value on the date the shares are considered earned represents a tax benefit to the Company that is recorded as an adjustment to income tax expense.

Outside Directors' Retirement

Outside Directors’ Retirement. The Bank adopted a directors’ retirement plan in April 1994 for outside directors. The directors’ retirement plan provides that each non-employee director (participant) shall receive, upon termination of service on the Board on or after age 60, other than termination for cause, a benefit in equal annual installments over a five year period. The benefit will be based upon the product of the participant’s vesting percentage and the total Board fees paid to the participant during the calendar year preceding termination of service on the Board. The vesting percentage shall be determined based upon the participant’s years of service on the Board, whether before or after the reorganization date.

In the event that the participant dies before collecting any or all of the benefits, the Bank shall pay the participant’s beneficiary. No benefits shall be payable to anyone other than the beneficiary, and shall terminate on the death of the beneficiary.

Stock Options

Stock Options. Compensation cost is measured based on the grant-date fair value of the equity instruments issued, and recognized over the vesting period during which an employee provides service in exchange for the award.

Earnings Per Share

Earnings Per Share. Basic earnings per share available to common stockholders is computed using the weighted-average number of common shares outstanding. Diluted earnings per share available to common stockholders includes the effect of all weighted-average dilutive potential common shares outstanding during each year.

Comprehensive Income

Comprehensive Income. Comprehensive income consists of net income and other comprehensive income, net of applicable income taxes. Other comprehensive income includes unrealized appreciation (depreciation) on available-for-sale securities, unrealized appreciation (depreciation) on available-for-sale securities for which a portion of an other-than-temporary impairment has been recognized in income, and changes in the funded status of defined benefit pension plans.

Transfers Between Fair Value Hierarchy Levels

Transfers Between Fair Value Hierarchy Levels. Transfers in and out of Level 1 (quoted market prices), Level 2 (other significant observable inputs) and Level 3 (significant unobservable inputs) are recognized on the period ending date.

Revisions

Revisions. Certain immaterial revisions have been made to the 2019 consolidated financial statements for netting interchange expenses with interchange revenues to apply the recognition on an agency versus principal basis. These revisions did not have a significant impact on the financial statement line items impacted and have been reclassified to conform to the 2020 and 2021 presentations. These reclassifications had no effect on net income or retained earnings.

New Accounting Pronouncements

The following paragraphs summarize the impact of new accounting pronouncements:

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820. The amendments in this update remove disclosures that no longer are considered cost beneficial, modify/clarify the specific requirements of certain disclosures, and add disclosure requirements identified as relevant. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, with early adoption permitted for certain removed and modified disclosures. Adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), which the Company adopted July 1, 2020. The Update amended guidance on reporting credit losses for financial assets held at amortized cost basis and available for sale debt securities. For financial assets held at amortized cost basis, Topic 326 eliminated the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The Update affects loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, and any other financial assets not excluded from the scope that have the contractual right to receive cash. Adoption was applied on a modified retrospective basis, through a cumulative-effect adjustment to retained earnings. Adoption resulted in an increase to the ACL of $8.9 million, related to the transition from the incurred loss model to the CECL ACL model, and an increase of $434,000 related to the transition from PCI to PCD methodology, relative to the ALLL as of June 30, 2020. The Company also recorded an adjustment to the reserve for unfunded commitments recorded in other liabilities of $268,000. The impact at adoption was reflected as an adjustment to beginning retained earnings, net of income taxes, in the amount of $7.2 million. In accordance with the new standard, management did not reassess whether PCI assets met the criteria of PCD assets as of the date of adoption. The adoption of ASU 2016-13 in fiscal 2021 could also impact the Company’s future earnings, perhaps materially

The following table illustrates the impact of adoption of ASU 2016-13:

July 1, 2020

 

As reported

 

As reported

 

Impact of

 

under

 

prior to

 

adoption

(dollars in thousands)

    

ASU 2016-13

    

ASU 2016-13

    

ASU 2016-13

Loans receivable

$

2,142,363

$

2,141,929

$

434

Allowance for credit losses on loans:

Real Estate Loans:

Residential

 

8,396

 

4,875

 

3,521

Construction

 

1,889

 

2,010

 

(121)

Commercial

 

15,988

 

12,132

 

3,856

Consumer loans

 

2,247

 

1,182

 

1,065

Commercial loans

 

5,952

 

4,940

 

1,012

Total allowance for credit losses on loans

$

34,472

$

25,139

$

9,333

Total allowance for credit losses on off-balance sheet credit exposures

$

2,227

$

1,959

$

268

The above table includes the impact of ASU 2016-13 adoption for PCD assets previously classified as PCI. The change in the ACL includes $434,000 attributable to residential and commercial real estate loans, and the amortized cost basis of loans receivable was increased for those loans by that total amount.

In March 2020, the CARES Act was signed into law, creating a forbearance program for federally backed mortgage loans, protects borrowers from negative credit reporting due to loan accommodations related to the National Emergency, and provides financial institutions the option to temporarily suspend certain requirements under U.S. GAAP related to troubled debt restructurings (TDR) for a limited period of time to account for the effects of COVID-19. The Company has elected to not apply ASC Subtopic 310-40 for loans eligible under the CARES Act, based on the modification’s (1) relation to COVID-19, (2) execution for a loan that was not more than 30-days past due as of December 31, 2019, and (3) execution between March 1, 2020, and the earlier of the date that falls 60 days following the termination of the declared National Emergency, or December 31, 2020. The 2021 Consolidated Appropriations Act, signed into law in December 2020, extended the window during which loans may be modified without classification as TDRs under ASC Subtopic 310-40, to the earlier of January 1, 2022, or 60 days following the termination of the declared National Emergency.

Repurchase Agreements

The carrying value of investment and mortgage-backed securities pledged as collateral to secure public deposits and securities sold under agreements to repurchase amounted to $155.6 million and $156.1 million at June 30, 2021 and 2020, respectively. The securities pledged consist of marketable securities, including $95.4 million and $82.0 million of Mortgage-Backed Securities, $18.8 million and $41.9 million of Collateralized Mortgage Obligations, $41.4 million and $32.0 million of State and Political Subdivisions Obligations, and $0 and $200,000 of Other Securities at June 30, 2021 and 2020, respectively.

Credit losses recognized on investments

Leases

Leases. The Company adopted ASU 2016-02, Leases (Topic 842), on July 1, 2019, using the modified retrospective transition approach whereby comparative periods were not restated. The Company also elected certain relief options under the ASU, including the option not to recognize right of use (“ROU”) asset and lease liabilities that arise from short-term leases (leases with terms of twelve months or less). The Company has six leased properties and numerous office equipment lease agreements in which it is the lessee, with lease terms exceeding twelve months.

401(k) Retirement Plan

401(k) Retirement Plan. The Bank has a 401(k) retirement plan that covers substantially all eligible employees. The Bank makes “safe harbor” matching contributions of up to 4% of eligible compensation, depending upon the percentage of eligible pay deferred into the plan by the employee. Additional profit-sharing contributions of 5% of eligible salary have been accrued for the plan year ended June 30, 2021, which the board of directors authorizes based on management recommendations and financial performance for fiscal 2021. Total 401(k) expense for fiscal 2021, 2020, and 2019, $1.7 million, $1.5 million, and $1.3 million, respectively. At June 30, 2021, 401(k) plan participants held approximately 394,000 shares of the Company’s stock in the plan. Employee deferrals and safe harbor contributions are fully vested. Profit-sharing or other contributions vest over a period of five years.

2008 Equity Incentive Plan. The Company adopted an Equity Incentive Plan (the EIP) in 2008, reserving for award 132,000 shares (split-adjusted). EIP shares were available for award to directors, officers, and employees of the Company and its affiliates by a committee of outside directors. The committee held the power to set vesting requirements for each award under the EIP. At the 2017 annual meeting, shareholders approved the 2017 Omnibus Incentive Plan, which provided that no further awards would be made under the EIP. From fiscal 2012 through fiscal 2017, the Company awarded 122,803 shares, and no awards were made under the plan since fiscal 2017. All EIP awards were in the form of either restricted stock vesting at the rate of 20% of such shares per year, or performance-based restricted stock vesting at up to of 20% of such shares per year, contingent on the achievement of specified profitability targets over a three-year period. During fiscal 2021, 2020, and 2019, there were 2,700, 2,825, and 7,100 EIP shares (split-adjusted) vested each year, respectively. Compensation expense, in the amount of the fair market value of the common stock at the date of grant, is recognized pro-rata over the five years during which the shares vest. The EIP

expense for fiscal 2021, 2020, and 2019 was $84,000, $88,000, and $141,000, respectively. At June 30, 2021, unvested compensation expense related to the EIP was approximately $51,000.

2003 Stock Option Plan. The Company adopted a stock option plan in October 2003 (the 2003 Plan). Under the plan, the Company granted options to purchase 242,000 shares (split-adjusted) to employees and directors, of which, options to purchase 187,000 shares (split-adjusted) have been exercised, options to purchase 45,000 shares (split-adjusted) have been forfeited, and 10,000 remain outstanding. Under the 2003 Plan, exercised options may be issued from either authorized but unissued shares, or treasury shares. At the 2017 annual meeting, shareholders approved the 2017 Omnibus Incentive Plan, which provided that no further awards would be made under the 2003 Plan.

As of June 30, 2021, there was no remaining unrecognized compensation expense related to unvested stock options under the 2003 Plan. The aggregate intrinsic value of stock options outstanding, all of which were exercisable, at June 30, 2021, was $274,000. During fiscal 2020, options to purchase 10,000 shares were exercised; no options to purchase shares were exercised in fiscal 2021 or 2019. The intrinsic value of options vested in fiscal 2020 and 2019 was $14,000, and $35,000, respectively, and no options vested in fiscal 2021.

2017 Omnibus Incentive Plan. The Company adopted an equity-based incentive plan in October 2017 (the 2017 Plan). Under the 2017 plan, the Company reserved for issuance 500,000 shares of common stock for awards to employees and directors, against which full value awards (stock-based awards other than stock options and stock appreciation rights) are to be counted on a 2.5-for-1 basis. The 2017 Plan authorized awards to be made to employees, officers, and directors by a committee of outside directors. The committee held the power to set vesting requirements for each award under the 2017 Plan. Under the 2017 Plan, stock awards and shares issued pursuant to exercised options may be issued from either authorized but unissued shares, or treasury shares.

Under the 2017 Plan, options to purchase 79,500 shares have been issued to employees, of which none have been exercised or forfeited, and 79,500 remain outstanding. As of June 30, 2021, there was $489,000 in remaining unrecognized compensation expense related to unvested stock options under the 2017 Plan, which will be recognized over the remaining weighted average vesting period. The aggregate intrinsic value of in-the-money stock options outstanding under the 2017 Plan at June 30, 2021, was $728,000, and no options were exercisable at June 30, 2021, at a strike price in excess of the market price. The intrinsic value of options vested in fiscal 2021 was $87,000. No in-the-money options were vested in fiscal 2020 or 2019.

Full value awards totaling 18,925, 15,525, and 15,000 shares, respectively, were issued to employees and directors in fiscal 2021, 2020, and 2019. All full value awards were in the form of either restricted stock vesting at the rate of 20% of such shares per year, or performance-based restricted stock vesting at up to 20% of such shares per year, contingent on the achievement of specified profitability targets over a three-year period. During fiscal 2021, 2020, and 2019, full value awards of 9,770, 7,080 and 4,200 shares were vested, respectively. Compensation expense, in the amount of the fair market value of the common stock at the date of grant, is recognized pro-rata over the five years during which the shares vest. Compensation expense for full value awards under the 2017 Plan for fiscal 2021, 2020, and 2019 was $351,000, $293,000, and $189,000, respectively. At June 30, 2021, unvested compensation expense related to full value awards under the 2017 Plan was approximately $1.5 million.

Changes in options outstanding under the 2003 Plan and the 2017 Plan were as follows:

Regulatory Capital Requirements

The Company and Bank are subject to various regulatory capital requirements administered by the Federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory—and possibly additional discretionary – actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of the Company and the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under U.S. GAAP, regulatory reporting requirements and regulatory capital standards. The Company and Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Furthermore, the Company and Bank’s regulators could require adjustments to regulatory capital not reflected in the condensed consolidated financial statements.

Quantitative measures established by regulatory capital standards to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total capital, Tier 1 capital (as defined), and common equity Tier 1 capital (as defined) to risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average total assets (as defined). Additionally, to make distributions or discretionary bonus payments, the Company and Bank must maintain a capital conservation buffer of 2.5% of risk-weighted assets. Management believes, as of June 30, 2021 and 2020, that the Company and the Bank met all capital adequacy requirements to which they are subject.

Effective January 1, 2020, depository institutions and depository institution holding companies that have less than $10 billion in total consolidated assets and meet other qualifying criteria, including a tier 1 leverage ratio of greater than 9 percent, are considered qualifying community banking organizations and are eligible to opt into an alternative, simplified regulatory capital framework, which utilizes a newly-defined “Community Bank Leverage Ratio” (CBLR). The CBLR framework is an optional framework that is designed to reduce burden by removing the requirements for calculating and reporting risk-based capital ratios for qualifying community banking organizations that opt into the framework. Qualifying community banking organizations that elect to use the CBLR framework and that maintain a leverage ratio of greater than 9 percent are considered to have satisfied the risk-based and leverage capital requirements in the agencies’ generally applicable capital rule. In April 2020, the federal bank regulatory agencies announced the issuance of two interim final rules to provide temporary relief to community banking organizations. Under the rules, CBLR requirement was a minimum of 8% for the remainder of calendar year 2020, and is 8.5% for calendar year 2021, and 9% thereafter. The Company and the Bank have not made an election to utilize the CBLR framework, but will continue to monitor the available option, and could do so in the future.

In August 2020, the Federal banking agencies adopted a final rule updating a December 2018 rule regarding the impact on regulatory capital of adoption of the CECL standard. The rule now allows institutions that adopt the CECL standard in 2020 a five-year transition period to recognize the estimated impact of adoption on regulatory capital. The Company and the Bank elected to exercise the option to recognize the impact of adoption over the five-year period.

As of June 30, 2021, the most recent notification from the Federal banking agencies categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized the Bank must maintain minimum total risk-based, Tier 1 risk-based, common equity Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank’s category.

Standby Letters of Credit

Standby Letters of Credit. In the normal course of business, the Company issues various financial standby, performance standby, and commercial letters of credit for its customers. As consideration for the letters of credit, the institution charges letter of credit fees based on the face amount of the letters and the creditworthiness of the counterparties. These letters of credit are stand­alone agreements, and are unrelated to any obligation the depositor has to the Company.

Standby letters of credit are irrevocable conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Financial standby letters of credit are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. Performance standby letters of credit are issued to guarantee performance of certain customers under non-financial contractual obligations. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loans to customers.

The Company had total outstanding standby letters of credit amounting to $4.0 million at June 30, 2021, and $3.2 million at June 30, 2020, with terms ranging from 12 to 24 months. At June 30, 2021, the Company’s deferred revenue under standby letters of credit agreements was nominal.

Accounting Principles

Accounting principles generally accepted in the United States of America require disclosure of certain significant estimates and current vulnerabilities due to certain concentrations. Estimates related to the allowance for loan losses are described in Note 1.

v3.21.2
Organization and Summary of Significant Accounting Policies (Tables)
12 Months Ended
Jun. 30, 2021
Organization and Summary of Significant Accounting Policies  
Schedule of Adoption of ASU 2016-13

July 1, 2020

 

As reported

 

As reported

 

Impact of

 

under

 

prior to

 

adoption

(dollars in thousands)

    

ASU 2016-13

    

ASU 2016-13

    

ASU 2016-13

Loans receivable

$

2,142,363

$

2,141,929

$

434

Allowance for credit losses on loans:

Real Estate Loans:

Residential

 

8,396

 

4,875

 

3,521

Construction

 

1,889

 

2,010

 

(121)

Commercial

 

15,988

 

12,132

 

3,856

Consumer loans

 

2,247

 

1,182

 

1,065

Commercial loans

 

5,952

 

4,940

 

1,012

Total allowance for credit losses on loans

$

34,472

$

25,139

$

9,333

Total allowance for credit losses on off-balance sheet credit exposures

$

2,227

$

1,959

$

268

v3.21.2
Available for Sale Securities (Tables)
12 Months Ended
Jun. 30, 2021
Available for Sale Securities  
Schedule of Available for Sale Securities

June 30, 2021

 

 

Gross

 

Gross

 

Allowance

Estimated

 

Amortized

 

Unrealized

 

Unrealized

 

for

 

Fair

(dollars in thousands)

    

Cost

    

Gains

    

Losses

    

Credit Losses

    

Value

Debt and equity securities:

Obligations of states and political subdivisions

$

46,257

$

1,479

$

(40)

$

$

47,696

Corporate obligations

20,356

290

(335)

20,311

Other securities

 

647

 

25

 

 

 

672

TOTAL DEBT AND EQUITY SECURITIES

67,260

1,794

(375)

68,679

Mortgage-backed securities (MBS) and collateralized mortgage obligations (CMOs):

Residential MBS issued by governmental sponsored enterprises (GSEs)

64,400

932

(379)

64,953

Commercial MBS issued by GSEs

35,425

1,394

(338)

36,481

CMOs issued by GSEs

36,201

755

(49)

36,907

TOTAL MBS and CMOs

 

136,026

 

3,081

 

(766)

 

138,341

TOTAL

$

203,286

$

4,875

$

(1,141)

$

$

207,020

June 30, 2020

 

 

Gross

 

Gross

Estimated

 

Amortized

 

Unrealized

 

Unrealized

 

Fair

(dollars in thousands)

    

Cost

    

Gains

    

Losses

    

Value

Debt and equity securities:

Obligations of states and political subdivisions

$

40,486

$

1,502

$

 

41,988

Corporate obligations

6,970

 

27

 

(338)

6,659

Other securities

949

21

(5)

965

TOTAL DEBT AND EQUITY SECURITIES

48,405

1,550

(343)

49,612

Mortgage-backed securities (MBS) and collateralized mortgage obligations (CMOs):

Residential MBS issued by GSEs

62,315

1,646

(7)

63,954

Commercial MBS issued by GSEs

17,466

1,585

19,051

CMOs issued by GSEs

42,594

1,345

(32)

43,907

TOTAL MBS and CMOs

 

122,375

 

4,576

 

(39)

 

126,912

TOTAL

$

170,780

$

6,126

$

(382)

$

176,524

Schedule of amortized cost and fair value of available-for-sale securities, by contractual maturity

June 30, 2021

 

Amortized

 

Estimated

(dollars in thousands)

    

Cost

    

Fair Value

Within one year

$

1,873

$

1,887

After one year but less than five years

 

9,564

 

9,720

After five years but less than ten years

 

30,386

 

31,033

After ten years

 

25,437

 

26,039

Total investment securities

 

67,260

 

68,679

MBS and CMOs

 

136,026

 

138,341

Total AFS securities

$

203,286

$

207,020

Schedule of investments' gross unrealized losses and fair value

 

Less than 12 months

 

12 months or more

 

Total

 

Unrealized

 

Unrealized

 

Unrealized

For the year ended June 30, 2021

    

Fair Value

    

Losses

    

Fair Value

    

Losses

    

Fair Value

    

Losses

(dollars in thousands)

Obligations of state and political subdivisions

$

3,177

$

40

$

$

$

3,177

$

40

Corporate obligations

9,331

79

720

256

10,051

335

MBS and CMOs

 

53,893

 

764

 

70

 

2

 

53,963

 

766

Total AFS securities

$

66,401

$

883

$

790

$

258

$

67,191

$

1,141

June 30, 2020

 

Less than 12 months

 

12 months or more

 

Total

 

Unrealized

 

Unrealized

 

Unrealized

For the year ended June 30, 2020

    

Fair Value

    

Losses

    

Fair Value

    

Losses

    

Fair Value

    

Losses

Corporate obligations

995

5

454

333

1,449

338

Other securities

189

5

189

5

MBS and CMOs

 

9,037

 

39

 

 

 

9,037

 

39

Total AFS securities

$

10,032

$

44

$

643

$

338

$

10,675

$

382

v3.21.2
Loans and Allowance for Credit Losses (Tables)
12 Months Ended
Jun. 30, 2021
Schedule of classes of loans

(dollars in thousands)

    

June 30, 2021

    

June 30, 2020

Real Estate Loans:

Residential

$

721,216

$

627,357

Construction

 

208,824

 

185,924

Commercial

 

889,793

 

887,419

Consumer loans

 

77,674

 

80,767

Commercial loans

 

414,124

 

468,448

 

2,311,631

 

2,249,915

Loans in process

 

(74,540)

 

(78,452)

Deferred loan fees, net

 

(3,625)

 

(4,395)

Allowance for loan losses

 

(33,222)

 

(25,139)

Total loans

$

2,200,244

$

2,141,929

Schedule of balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment methods

(dollars in thousands)

 

Residential

Construction

 

Commercial

 

June 30, 2021

    

Real Estate

    

Real Estate

    

Real Estate

    

Consumer

    

Commercial

    

Total

Allowance for credit losses:

Balance, beginning of period

$

4,875

$

2,010

$

12,132

$

1,182

$

4,940

$

25,139

Impact of CECL adoption

3,521

(121)

3,856

1,065

1,012

9,333

Provision (benefit) charged to expense

2,973

281

(1,364)

(1,232)

(1,260)

(602)

Losses charged off

(180)

(90)

(146)

(318)

(734)

Recoveries

3

1

47

35

86

Balance, end of period

$

11,192

$

2,170

$

14,535

$

916

$

4,409

$

33,222

(dollars in thousands)

 

Residential

Construction

 

Commercial

 

June 30, 2020

    

Real Estate

    

Real Estate

    

Real Estate

    

Consumer

    

Commercial

    

Total

Allowance for loan losses:

Balance, beginning of period

$

3,706

$

1,365

$

9,399

$

1,046

$

4,387

$

19,903

Provision charged to expense

1,529

645

2,730

300

798

6,002

Losses charged off

(379)

(12)

(189)

(273)

(853)

Recoveries

19

15

25

28

87

Balance, end of period

$

4,875

$

2,010

$

12,132

$

1,182

$

4,940

$

25,139

Ending Balance: individually evaluated for impairment

$

$

$

$

$

$

Ending Balance: collectively evaluated for impairment

$

4,875

$

2,010

$

12,132

$

1,182

$

4,940

$

25,139

Ending Balance: loans acquired with deteriorated credit quality

$

$

$

$

$

$

Loans:

 

  

 

  

 

  

 

  

 

  

 

  

Ending Balance: individually evaluated for impairment

$

$

$

$

$

$

Ending Balance: collectively evaluated for impairment

$

626,085

$

106,194

$

872,716

$

80,767

$

463,902

$

2,149,664

Ending Balance: loans acquired with deteriorated credit quality

$

1,272

$

1,278

$

14,703

$

$

4,546

$

21,799

(dollars in thousands)

 

Residential

Construction

 

Commercial

 

June 30, 2019

    

Real Estate

    

Real Estate

    

Real Estate

    

Consumer

    

Commercial

    

Total

Allowance for loan losses:

Balance, beginning of period

$

3,226

$

1,097

$

8,793

$

902

$

4,196

$

18,214

Provision charged to expense

487

268

765

231

281

2,032

Losses charged off

(30)

(164)

(103)

(92)

(389)

Recoveries

23

5

16

2

46

Balance, end of period

$

3,706

$

1,365

$

9,399

$

1,046

$

4,387

$

19,903

Schedule of Allowance for off-balance credit exposure

(dollars in thousands)

 

Residential

Construction

 

Commercial

 

June 30, 2021

    

Real Estate

    

Real Estate

    

Real Estate

    

Consumer

    

Commercial

    

Total

Allowance for off-balance sheet credit exposure:

Balance, beginning of period

$

19

$

769

$

172

$

153

$

846

$

1,959

Impact of CECL adoption

35

(167)

95

197

108

268

Provision (benefit) charged to expense

(17)

(100)

(79)

(132)

(94)

(422)

Balance, end of period

$

37

$

502

$

188

$

218

$

860

$

1,805

Schedule of credit risk profile of the Company's loan portfolio based on rating category and payment activity

(dollars in thousands)

Revolving

June 30, 

    

2021

    

2020

    

2019

    

2018

    

2017

    

Prior

    

loans

    

Total

Residential Real Estate

Pass

$

361,876

$

175,772

$

43,576

$

32,929

$

23,267

$

71,592

$

5,557

$

714,569

Watch

 

328

 

70

 

410

 

 

89

 

809

 

 

1,706

Special Mention

 

 

 

 

 

 

 

 

Substandard

 

4,288

 

89

 

 

92

 

 

472

 

 

4,941

Doubtful

 

 

 

 

 

 

 

 

Total Residential Real Estate

$

366,492

$

175,931

$

43,986

$

33,021

$

23,356

$

72,873

$

5,557

$

721,216

Construction Real Estate

 

 

 

 

 

 

 

 

Pass

$

88,371

$

45,866

$

$

$

$

$

$

134,237

Watch

 

 

 

 

 

 

 

 

Special Mention

 

 

 

 

 

 

 

 

Substandard

 

47

 

 

 

 

 

 

 

47

Doubtful

 

 

 

 

 

 

 

 

Total Construction Real Estate

$

88,418

$

45,866

$

$

$

$

$

$

134,284

Commercial Real Estate

 

 

 

 

 

 

 

 

Pass

$

351,732

$

147,670

$

104,746

$

75,967

$

70,927

$

61,194

$

23,699

$

835,935

Watch

 

4,456

 

2,365

 

9,502

 

1,377

 

726

 

10

 

810

 

19,246

Special Mention

 

 

8,806

 

 

1,793

 

12,826

 

 

300

 

23,725

Substandard

 

8,191

 

1,137

 

505

 

31

 

5

 

99

 

69

 

10,037

Doubtful

 

 

 

850

 

 

 

 

 

850

Total Commercial Real Estate

$

364,379

$

159,978

$

115,603

$

79,168

$

84,484

$

61,303

$

24,878

$

889,793

Consumer

 

 

 

 

 

 

 

 

Pass

$

23,858

$

8,626

$

3,597

$

1,126

$

534

$

650

$

39,071

$

77,462

Watch

 

80

 

 

 

 

 

 

48

 

128

Special Mention

 

 

 

 

 

 

 

 

Substandard

 

 

 

 

30

 

30

 

 

24

 

84

Doubtful

 

 

 

 

 

 

 

 

Total Consumer

$

23,938

$

8,626

$

3,597

$

1,156

$

564

$

650

$

39,143

$

77,674

Commercial

 

 

 

 

 

 

 

 

Pass

$

189,280

$

42,549

$

17,960

$

5,591

$

7,265

$

9,120

$

136,603

$

408,368

Watch

 

1,551

 

262

 

1,323

 

22

 

 

 

463

 

3,621

Special Mention

 

 

 

 

 

 

 

 

Substandard

 

594

 

81

 

305

 

 

176

 

 

979

 

2,135

Doubtful

 

 

 

 

 

 

 

 

Total Commercial

$

191,425

$

42,892

$

19,588

$

5,613

$

7,441

$

9,120

$

138,045

$

414,124

Total Loans

 

 

 

 

 

 

 

 

Pass

$

1,015,117

$

420,483

$

169,879

$

115,613

$

101,993

$

142,556

$

204,930

$

2,170,571

Watch

 

6,415

 

2,697

 

11,235

 

1,399

 

815

 

819

 

1,321

 

24,701

Special Mention

 

 

8,806

 

 

1,793

 

12,826

 

 

300

 

23,725

Substandard

 

13,120

 

1,307

 

810

 

153

 

211

 

571

 

1,072

 

17,244

Doubtful

 

 

 

850

 

 

 

 

 

850

Total

$

1,034,652

$

433,293

$

182,774

$

118,958

$

115,845

$

143,946

$

207,623

$

2,237,091

Schedule of company's loan portfolio aging analysis

Greater Than

Greater Than 90

(dollars in thousands)

30-59 Days

60-89 Days

90 Days

Total

Total Loans

Days Past Due

June 30, 2021

    

Past Due

    

Past Due

    

Past Due

    

Past Due

    

Current

    

Receivable

    

and Accruing

Real Estate Loans:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Residential

$

312

$

364

$

613

$

1,289

$

719,927

$

721,216

$

Construction

 

 

 

30

 

30

 

134,254

 

134,284

 

Commercial

 

363

 

 

374

 

737

 

889,056

 

889,793

 

Consumer loans

 

195

 

66

 

84

 

345

 

77,329

 

77,674

 

Commercial loans

 

368

 

939

 

110

 

1,417

 

412,707

 

414,124

 

Total loans

$

1,238

$

1,369

$

1,211

$

3,818

$

2,233,273

$

2,237,091

$

Greater Than

Greater Than 90

(dollars in thousands)

30-59 Days

60-89 Days

90 Days

Total

Total Loans

Days Past Due

June 30, 2020

    

Past Due

    

Past Due

    

Past Due

    

Past Due

    

Current

    

Receivable

    

and Accruing

Real Estate Loans:

Residential

$

772

$

378

$

654

$

1,804

$

625,553

$

627,357

$

Construction

 

 

 

 

 

107,472

 

107,472

 

Commercial

 

641

 

327

 

1,073

 

2,041

 

885,378

 

887,419

 

Consumer loans

 

180

 

53

 

193

 

426

 

80,341

 

80,767

 

Commercial loans

 

93

 

1,219

 

810

 

2,122

 

466,326

 

468,448

 

Total loans

$

1,686

$

1,977

$

2,730

$

6,393

$

2,165,070

$

2,171,463

$

Schedule of company's collateral dependent loans and related ACL

    

Amortized cost basis of

    

    

loans determined to be

Related allowance

collateral dependent

for credit losses

(dollars in thousands)

 

  

 

  

Residential real estate loans

 

  

 

  

1- to 4-family residential loans

$

895

$

223

Total loans

$

895

$

223

Schedule of impaired loans

(dollars in thousands)

Recorded

Unpaid Principal

Specific

June 30, 2020

    

Balance

    

Balance

    

Allowance

Loans without a specific valuation allowance:

Residential real estate

$

3,811

$

4,047

$

Construction real estate

 

1,278

 

1,312

 

Commercial real estate

 

19,271

 

23,676

 

Consumer loans

 

 

Commercial loans

 

5,040

 

6,065

 

Loans with a specific valuation allowance:

 

  

 

  

 

Residential real estate

$

$

$

Construction real estate

 

 

 

Commercial real estate

 

 

 

Consumer loans

 

 

 

Commercial loans

 

 

 

Total:

 

  

 

  

 

  

Residential real estate

$

3,811

$

4,047

$

Construction real estate

$

1,278

$

1,312

$

Commercial real estate

$

19,271

$

23,676

$

Consumer loans

$

$

$

Commercial loans

$

5,040

$

6,065

$

Schedule of interest income recognized on impaired loans

Fiscal 2020

Average

Investment in

Interest Income

(dollars in thousands)

    

Impaired Loans

    

Recognized

Residential Real Estate

 

$

1,440

$

89

Construction Real Estate

1,295

 

134

Commercial Real Estate

16,175

 

1,276

Consumer Loans

 

Commercial Loans

5,597

 

419

Total Loans

 

$

24,507

 

$

1,918

Fiscal 2019

Average

Investment in

Interest Income

(dollars in thousands)

    

Impaired Loans

    

Recognized

Residential Real Estate

 

$

2,081

 

$

112

Construction Real Estate

1,297

246

Commercial Real Estate

14,547

1,570

Consumer Loans

Commercial Loans

4,212

926

Total Loans

 

$

22,137

 

$

2,854

Schedule of Company's nonaccrual loans

June 30, 

(dollars in thousands)

    

2021

    

2020

Residential real estate

$

3,235

$

4,010

Construction real estate

 

30

 

Commercial real estate

 

1,914

 

3,106

Consumer loans

 

100

 

196

Commercial loans

 

589

 

1,345

Total loans

$

5,868

$

8,657

Schedule of Performing loans classified as troubled debt restructuring loans

June 30, 2021

June 30, 2020

Number of

Recorded

Number of

Recorded

(dollars in thousands)

    

modifications

    

Investment

    

modifications

    

Investment

Residential real estate

 

1

$

895

 

3

$

791

Construction real estate

 

 

 

 

Commercial real estate

 

4

 

949

 

10

 

4,544

Consumer loans

 

 

 

 

Commercial loans

 

7

 

1,397

 

7

 

3,245

Total

 

12

$

3,241

 

20

$

8,580

Schedule of loans to executive officers, directors, significant shareholders and their affiliates held by the Company

June 30, 

(dollars in thousands)

    

2021

    

2020

Beginning Balance

 

$

8,603

$

9,132

Additions

 

 

8,474

 

5,179

Repayments

 

 

(6,453)

 

(5,708)

Ending Balance

 

$

10,624

$

8,603

Purchase Credit Impaired  
Schedule of credit risk profile of the company's loan portfolio

(dollars in thousands)

Residential

Construction

Commercial

June 30, 2020

    

Real Estate

    

Real Estate

    

Real Estate

    

Consumer

    

Commercial

Pass

$

620,004

$

103,105

$

829,276

$

80,517

$

457,385

Watch

 

1,900

 

4,367

 

45,262

 

45

 

4,708

Special Mention

 

 

 

403

 

25

 

Substandard

 

5,453

 

 

11,590

 

180

 

6,355

Doubtful

 

 

 

888

 

 

Total

$

627,357

$

107,472

$

887,419

$

80,767

$

468,448

v3.21.2
Premises and Equipment (Tables)
12 Months Ended
Jun. 30, 2021
Premises and Equipment  
Schedule of summary of premises and equipment

    

June 30, 

(dollars in thousands)

    

2021

    

2020

Land

$

12,452

$

12,585

Buildings and improvements

 

56,422

 

56,039

Construction in progress

 

1,158

 

435

Furniture, fixtures, equipment and software

 

18,985

 

18,109

Automobiles

 

120

 

120

Operating leases ROU asset

 

2,770

 

1,965

 

91,907

 

89,253

Less accumulated depreciation

 

27,830

 

24,147

$

64,077

$

65,106

Schedule of calculated amount of right of use assets and lease liabilities

At or For the

At or For the

Twelve Months Ended

Twelve Months Ended

June 30, 2021

June 30, 2020

Consolidated Balance Sheet

Operating leases right of use asset

$

2,770

$

1,965

Operating leases liability

$

2,770

$

1,965

Consolidated Statement of Income

Operating lease costs classified as occupancy and equipment expense

$

340

$

214

(includes short-term lease costs)

Supplemental disclosures of cash flow information

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

$

282

$

174

ROU assets obtained in exchange for operating lease obligations:

$

804

$

2,004

Schedule of Future Minimum Rental Payments for Operating Leases

(dollars in thousands)

    

  

2022

$

338

2023

 

272

2024

 

272

2025

 

272

2026

 

272

Thereafter

 

3,142

Future lease payments expected

$

4,568

v3.21.2
Deposits (Tables)
12 Months Ended
Jun. 30, 2021
Deposits  
Schedule of deposits

    

June 30, 

(dollars in thousands)

    

2021

    

2020

Non-interest bearing accounts

$

358,418

$

316,048

NOW accounts

 

925,280

 

781,937

Money market deposit accounts

 

253,614

 

231,162

Savings accounts

 

230,905

 

181,229

TOTAL NON-MATURITY DEPOSITS

1,768,217

1,510,376

Certificates

0.00-0.99%

332,958

72,236

1.00-1.99%

155,078

393,625

2.00-2.99%

63,777

168,985

3.00-3.99%

10,606

39,191

4.00-4.99%

167

160

5.00-5.99%

6.00-6.99%

274

TOTAL CERTIFICATES

562,586

674,471

TOTAL DEPOSITS

$

2,330,803

$

2,184,847

Schedule of Certificate maturities

(dollars in thousands)

    

July 1, 2021 to June 30, 2022

$

358,777

July 1, 2022 to June 30, 2023

90,169

July 1, 2023 to June 30, 2024

21,530

July 1, 2024 to June 30, 2025

40,503

July 1, 2025 to June 30, 2026

51,607

TOTAL

$

562,586

v3.21.2
Advances from Federal Home Loan Bank (Tables)
12 Months Ended
Jun. 30, 2021
Advances from Federal Home Loan Bank  
Schedule of Advances from Federal Home Loan Bank

Interest

June 30, 

 

Maturity

Rate

2021

2020

 

(dollars in thousands)

09/09/20

2.02

%  

4,982

11/23/20

2.13

%  

1,741

01/14/21

1.92

%  

249

03/31/21

1.68

%  

248

05/17/21

2.43

%  

5,000

06/10/21

1.42

%  

247

09/07/21

2.81

%  

9,000

9,000

09/09/21

2.28

%  

1,994

1,977

10/01/21

2.53

%  

5,000

5,000

11/16/21

2.43

%  

5,000

5,000

03/07/22

0.95

%  

3,000

3,000

03/31/22

1.91

%  

248

246

08/15/22

1.89

%  

3,000

3,000

03/06/23

0.99

%  

3,000

3,000

03/06/24

0.95

%  

3,000

3,000

03/28/24

2.56

%  

8,000

8,000

08/13/24

1.88

%  

3,000

3,000

02/21/25

1.28

%  

5,000

5,000

02/21/25

1.53

%  

5,000

5,000

03/06/25

1.01

%  

3,000

3,000

12/14/26

2.65

%  

287

334

TOTAL

$

57,529

$

70,024

Weighted-average rate

1.97

%

2.01

%

Schedule of Principal Maturities of Federal Home Loan Bank

June 30, 2021

FHLB Advance Maturities

    

(dollars in thousands)

July 1, 2021 to June 30, 2022

$

24,242

July 1, 2022 to June 30, 2023

6,000

July 1, 2023 to June 30, 2024

11,000

July 1, 2024 to June 30, 2025

16,000

July 1, 2025 to June 30, 2026

July 1, 2025 to thereafter

287

TOTAL

$

57,529

v3.21.2
Employee Benefits (Tables)
12 Months Ended
Jun. 30, 2021
Employee Benefits  
Schedule of changes in options outstanding under the 2003 Plan and the 2017 Plan

2021

2020

2019

Weighted

Weighted

Weighted

Average

Average

Average

Price

Number

Price

Number

Price

Number

Outstanding at beginning of year

$

33.22

60,500

$

26.35

51,000

$

22.18

33,500

Granted

34.91

29,000

37.40

19,500

34.35

17,500

Exercised

6.38

(10,000)

Forfeited

 

 

 

Outstanding at year-end

$

33.77

89,500

$

33.22

60,500

$

26.35

51,000

Options exercisable at year-end

$

29.79

29,000

$

26.31

18,900

$

14.73

20,700

Schedule of values of options granted

2021

2020

2019

Assumptions:

Expected dividend yield

1.83

%

1.60

%

1.51

%

Expected volatility

 

27.72

%

22.55

%

20.39

%

Risk-free interest rate

1.14

%

1.55

%

2.67

%

Weighted-average expected life (years)

10.00

10.00

10.00

Weighted-average fair value of options granted during the year

$

9.19

$

8.81

$

8.78

Schedule of stock options under the 2003 Plan and 2017 Plan

Weighted

Options Outstanding

Options Exercisable

Average

Weighted

Weighted

Remaining

Average

Average

Contractual

Number

Exercise

Number

Exercise

Life

Outstanding

Price

Exercisable

Price

38 mo.

10,000

$

17.55

10,000

$

17.55

79 mo.

13,500

37.31

8,100

37.31

90 mo.

17,500

34.35

7,000

34.35

104 mo.

19,500

37.40

3,900

37.40

115 mo.

29,000

34.91

34.91

v3.21.2
Income Taxes (Tables)
12 Months Ended
Jun. 30, 2021
Income Taxes  
Schedule of components of net deferred tax assets

The components of net deferred tax assets are summarized as follows:

(dollars in thousands)

    

June 30, 2021

    

June 30, 2020

Deferred tax assets:

 

  

 

  

Provision for losses on loans

$

7,626

$

5,802

Accrued compensation and benefits

 

826

 

825

NOL carry forwards acquired

 

147

 

149

Minimum Tax Credit

 

 

130

Unrealized loss on other real estate

 

180

 

257

Other

 

182

 

26

Total deferred tax assets

 

8,961

 

7,189

Deferred tax liabilities:

 

 

Purchase accounting adjustments

 

210

 

64

Depreciation

 

1,842

 

1,665

FHLB stock dividends

 

120

 

120

Prepaid expenses

 

283

 

259

Unrealized gain on available for sale securities

 

821

 

1,265

Other

 

1,193

 

104

Total deferred tax liabilities

 

4,469

 

3,477

Net deferred tax asset

$

4,492

$

3,712

Schedule of reconciliation of income tax expense at the statutory rate

For the year ended June 30

(dollars in thousands)

2021

2020

2019

Tax at statutory rate

$

12,538

$

7,231

$

7,550

Increase (reduction) in taxes resulting from:

 

 

 

Nontaxable municipal income

 

(453)

 

(444)

 

(400)

State tax, net of Federal benefit

 

1,018

 

299

 

487

Cash surrender value of Bank-owned life insurance

 

(378)

 

(214)

 

(279)

Tax credit benefits

 

(11)

 

(48)

 

(270)

Other, net

 

(189)

 

63

 

(41)

Actual provision

$

12,525

$

6,887

$

7,047

v3.21.2
Accumulated Other Comprehensive Income (AOCI) (Tables)
12 Months Ended
Jun. 30, 2021
Accumulated Other Comprehensive Income (AOCI)  
Schedule of components of AOCI

The components of AOCI, included in stockholders’ equity, are as follows:

June 30, 

(dollars in thousands)

    

2021

    

2020

Net unrealized gain on securities available-for-sale

$

3,734

$

5,744

Net unrealized gain on securities available-for-sale securities for which a portion of an other-than-temporary impairment has been recognized in income

(1)

(1)

Unrealized gain from defined benefit pension plan

(26)

(32)

3,707

5,711

Tax effect

(825)

(1,264)

Net of tax amount

$

2,882

$

4,447

Schedule of reclassified from AOCI

Amounts Reclassified From AOCI

(dollars in thousands)

Affected Line Item in the Condensed

    

2021

    

2020

    

Consolidated Statements of Income

Unrealized gain on securities available-for-sale

$

90

$

Net realized gains on sale of AFS securities

Amortization of defined benefit pension items:

6

6

Compensation and benefits (included in computation of net periodic pension costs)

Total reclassified amount before tax

96

6

Tax benefit

20

1

Provision for income tax

Total reclassification out of AOCI

$

76

$

5

Net Income

v3.21.2
Stockholders' Equity and Regulatory Capital (Tables)
12 Months Ended
Jun. 30, 2021
Stockholders' Equity and Regulatory Capital  
Schedule of company and Bank's actual and required regulatory capital

To Be Well Capitalized Under

 

Prompt Corrective Action

 

Actual

For Capital Adequacy Purposes

Provisions

 

As of June 30, 2021

    

Amount

    

Ratio

    

Amount

    

Ratio

    

Amount

    

Ratio

 

(dollars in thousands)

 

  

 

  

 

  

 

  

 

  

 

  

Total Capital (to Risk-Weighted Assets)

Consolidated

$

315,490

14.18

%

$

177,938

8.00

%

n/a

n/a

Southern Bank

308,482

13.96

%

176,816

8.00

%

221,019

10.00

%

Tier I Capital (to Risk-Weighted Assets)

Consolidated

287,701

12.93

%

133,453

6.00

%

n/a

n/a

Southern Bank

282,638

12.79

%

132,612

6.00

%

176,816

8.00

%

Tier I Capital (to Average Assets)

Consolidated

287,701

10.61

%

108,505

4.00

%

n/a

n/a

Southern Bank

282,638

10.43

%

108,369

4.00

%

135,461

5.00

%

Common Equity Tier I Capital (to Risk-Weighted Assets)

Consolidated

272,458

12.25

%

100,090

4.50

%

n/a

n/a

Southern Bank

282,638

12.79

%

99,459

4.50

%

143,663

6.50

%

To Be Well Capitalized Under

 

Prompt Corrective Action

 

Actual

For Capital Adequacy Purposes

Provisions

 

As of June 30, 2020

    

Amount

    

Ratio

    

Amount

    

Ratio

    

Amount

    

Ratio

 

(dollars in thousands)

 

  

 

  

 

  

 

  

 

  

 

  

Total Capital (to Risk-Weighted Assets)

Consolidated

$

278,924

13.17

%

$

169,473

8.00

%

n/a

n/a

Southern Bank

271,137

12.88

%

168,355

8.00

%

210,444

10.00

%

Tier I Capital (to Risk-Weighted Assets)

Consolidated

252,609

11.92

%

127,105

6.00

%

n/a

n/a

Southern Bank

244,822

11.63

%

126,266

6.00

%

168,355

8.00

%

Tier I Capital (to Average Assets)

Consolidated

252,609

9.95

%

101,528

4.00

%

n/a

n/a

Southern Bank

244,822

9.66

%

101,370

4.00

%

126,713

5.00

%

Common Equity Tier I Capital (to Risk-Weighted Assets)

Consolidated

237,467

11.21

%

95,328

4.50

%

n/a

n/a

Southern Bank

244,822

11.63

%

94,700

4.50

%

136,789

6.50

%

v3.21.2
Earnings Per Share (Tables)
12 Months Ended
Jun. 30, 2021
Earnings Per Share  
Schedule of Earnings Per Share, Basic and Diluted

Year Ended June 30, 

(dollars in thousands except per share data)

2021

2020

2019

Net income

$

47,180

$

27,545

$

28,904

Less: distributed earnings allocated to participating securities

 

(18)

 

 

Less: undistributed earnings allocated to participating securities

 

(135)

 

 

Net income available to common shareholders

47,027

27,545

28,904

Denominator for basic earnings per share -

Weighted-average shares outstanding

 

9,007,814

 

9,189,876

 

9,193,235

Effect of dilutive securities stock options or awards

 

2,923

 

9,293

 

10,674

Denominator for diluted earnings per share

9,010,737

9,199,169

9,203,909

Basic earnings per share available to common stockholders

$

5.22

$

3.00

$

3.14

Diluted earnings per share available to common stockholders

$

5.22

$

2.99

$

3.14

v3.21.2
Acquisitions (Tables)
12 Months Ended
Jun. 30, 2021
Central Federal Bancshares  
Schedule of Purchase price

Central Federal Bancshares

    

Fair Value of Consideration Transferred

(dollars in thousands)

Cash

$

21,942

Recognized amounts of identifiable assets acquired and liabilities assumed

  

Cash and cash equivalents

$

12,862

Investment securities

4,355

Loans

51,449

Premises and equipment

723

Identifiable intangible assets

540

Miscellaneous other assets

639

Deposits

(46,720)

Miscellaneous other liabilities

(1,783)

Total identifiable net assets

22,065

Bargain Purchase Gain

$

(123)

v3.21.2
Fair Value Measurements (Tables)
12 Months Ended
Jun. 30, 2021
Fair Value Measurements  
Fair Value, Assets Measured on Recurring Basis

Fair Value Measurements at June 30, 2021, Using:

Quoted Prices in

Active Markets for

Significant Other

Significant

Identical Assets

Observable Inputs

Unobservable Inputs

(dollars in thousands)

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

Obligations of state and political subdivisions

$

47,696

$

$

47,696

$

Corporate obligations

20,311

20,311

Other securities

 

672

 

 

672

 

MBS and CMOs

 

138,341

 

 

138,341

 

Fair Value Measurements at June 30, 2020, Using:

Quoted Prices in

Active Markets for 

Significant Other

Significant

Identical Assets

Observable Inputs

Unobservable Inputs

(dollars in thousands)

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

Obligations of state and political subdivisions

$

41,988

$

$

41,988

$

Corporate obligations

6,659

6,659

Other securities

 

965

 

 

965

 

MBS and CMOs

 

126,912

 

 

126,912

 

Fair Value Measurements, Nonrecurring

Fair Value Measurements at June 30, 2021, Using:

Quoted Prices in

Active Markets for

Significant Other

Significant

Identical Assets

Observable Inputs

Unobservable Inputs

(dollars in thousands)

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

Foreclosed and repossessed assets held for sale

$

280

$

$

$

280

Fair Value Measurements at June 30, 2020, Using:

Quoted Prices in

Active Markets for

Significant Other

Significant

Identical Assets

Observable Inputs

Unobservable Inputs

(dollars in thousands)

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

Foreclosed and repossessed assets held for sale

$

2,211

$

$

$

2,211

Gains (Losses) Recognized on Assets Measured on a Nonrecurring Basis

(dollars in thousands)

2021

2020

Foreclosed and repossessed assets held for sale

$

(44)

$

(1,009)

Total losses on assets measured on a non-recurring basis

$

(44)

$

(1,009)

Fair Value Option, Disclosures

    

    

    

    

Range

    

 

Fair value at

Valuation

Unobservable

of

Weighted-average

 

(dollars in thousands)

June 30, 2021

technique

inputs

inputs applied

inputs applied

 

Nonrecurring Measurements

 

  

 

  

 

  

 

  

 

  

Foreclosed and repossessed assets

$

280

 

Third party appraisal

 

Marketability discount

 

7.2% - 80.6

%  

37.1

%




    

    

    

    

Range

    

 

Fair value at

Valuation

Unobservable

of

Weighted-average

 

(dollars in thousands)

June 30, 2020

technique

inputs

inputs applied

inputs applied

 

Nonrecurring Measurements

 

  

 

  

 

  

 

  

 

  

Foreclosed and repossessed assets

$

2,211

 

Third party appraisal

 

Marketability discount

 

8.0% - 56.9

%  

15.7

%

Schedule of Financial Instruments

June 30, 2021

Quoted Prices

in Active

Significant

Markets for

Significant Other

Unobservable

Carrying

Identical Assets

Observable Inputs

Inputs

(dollars in thousands)

    

Amount

    

(Level 1)

    

(Level 2)

    

(Level 3)

Financial assets

 

  

 

  

 

  

 

  

Cash and cash equivalents

$

123,592

$

123,592

$

$

Interest-bearing time deposits

 

979

 

 

979

 

Stock in FHLB

 

5,873

 

 

5,873

 

Stock in Federal Reserve Bank of St. Louis

 

5,031

 

 

5,031

 

Loans receivable, net

 

2,200,244

 

 

 

2,218,762

Accrued interest receivable

 

10,079

 

 

10,079

 

Financial liabilities

 

 

 

 

Deposits

 

2,330,803

 

1,768,217

 

 

565,123

Advances from FHLB

 

57,529

 

 

58,587

 

Accrued interest payable

 

779

 

 

779

 

Subordinated debt

 

15,243

 

 

 

15,468

Unrecognized financial instruments (net of contract amount)

 

 

 

 

Commitments to originate loans

 

 

 

 

Letters of credit

 

 

 

 

Lines of credit

 

 

 

 

June 30, 2020

Quoted Prices

in Active

Significant

Markets for

Significant Other

Unobservable

Carrying

Identical Assets

Observable Inputs

Inputs

(dollars in thousands)

    

Amount

    

(Level 1)

    

(Level 2)

    

(Level 3)

Financial assets

 

  

 

  

 

  

 

  

Cash and cash equivalents

$

54,245

$

54,245

$

$

Interest-bearing time deposits

 

974

 

 

974

 

Stock in FHLB

 

6,390

 

 

6,390

 

Stock in Federal Reserve Bank of St. Louis

 

4,363

 

 

4,363

 

Loans receivable, net

 

2,141,929

 

 

 

2,143,823

Accrued interest receivable

 

12,116

 

 

12,116

 

Financial liabilities

 

Deposits

 

2,184,847

 

1,508,740

 

 

676,816

Advances from FHLB

 

70,024

 

 

72,136

 

Accrued interest payable

1,646

 

 

1,646

 

Subordinated debt

15,142

 

 

 

11,511

Unrecognized financial instruments (net of contract amount)

 

Commitments to originate loans

 

 

 

 

Letters of credit

 

 

 

 

Lines of credit

 

 

 

 

v3.21.2
Condensed Parent Company Only Financial Statements (Tables)
12 Months Ended
Jun. 30, 2021
Condensed Parent Company Only Financial Statements  
Parent Company Condensed Balance Sheets

June 30, 

(dollars in thousands)

2021

    

2020

Condensed Balance Sheets

Assets

  

 

  

Cash and cash equivalents

$

1,193

$

4,576

Other assets

14,380

13,823

Investment in common stock of Bank

283,500

255,601

TOTAL ASSETS

$

299,073

$

274,000

Liabilities and Stockholders' Equity

  

  

Accrued expenses and other liabilities

$

407

$

511

Subordinated debt

15,243

15,142

TOTAL LIABILITIES

15,650

15,653

Stockholders' equity

283,423

258,347

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

299,073

$

274,000

Parent Company Condensed Statements of Income

Year ended June 30, 

(dollars in thousands)

2021

2020

    

2019

Condensed Statements of Income

Interest income

$

13

$

27

$

25

Interest expense

 

534

899

1,079

Net interest expense

 

(521)

(872)

(1,054)

Dividends from Bank

12,000

34,000

23,000

Bargain purchase gain

123

Operating expenses

599

1,529

827

Income before income taxes and equity in undistributed income of the Bank

10,880

31,722

21,119

Income tax benefit

235

292

358

Income before equity in undistributed income of the Bank

11,115

32,014

21,477

Equity in undistributed income of the Bank

36,065

(4,469)

7,427

NET INCOME

$

47,180

$

27,545

$

28,904

COMPREHENSIVE INCOME

$

45,615

$

30,745

$

32,496

Parent Company Condensed Statements of Cash Flows

Year ended June 30, 

(dollars in thousands)

    

2021

    

2020

    

2019

Condensed Statements of Cash Flow

Cash Flows from operating activities:

Net income

$

47,180

$

27,545

$

28,904

Changes in:

 

Equity in undistributed income of the Bank

 

(36,065)

4,469

(7,427)

Other adjustments, net

(559)

(904)

(635)

NET CASH PROVIDED BY OPERATING ACTIVITES

10,556

31,110

20,842

Investments in Bank subsidiaries

(20,463)

(10,747)

NET CASH USED IN INVESTING ACTIVITIES

(20,463)

(10,747)

Cash flows from financing activities:

Dividends on common stock

(5,598)

(5,513)

(4,763)

Exercise of stock options

64

Payments to acquire treasury stock

(8,341)

(5,771)

(1,166)

Repayments of long term debt

(3,000)

(4,400)

NET CASH USED IN FINANCING ACTIVITIES

(13,939)

(14,220)

(10,329)

Net decrease in cash and cash equivalents

(3,383)

(3,573)

(234)

Cash and cash equivalents at beginning of year

4,576

8,149

8,383

CASH AND CASH EQUIVALENTS AT END OF YEAR

$

1,193

$

4,576

$

8,149

v3.21.2
Quarterly Financial Data (Unaudited) (Tables)
12 Months Ended
Jun. 30, 2021
Quarterly Financial Data (Unaudited)  
Schedule of Quarterly Financial Information

Quarterly operating data is summarized as follows (in thousands):

June 30, 2021

    

First

    

Second

    

Third

    

Fourth

(dollars in thousands)

Quarter

Quarter

Quarter

Quarter

Interest income

$

26,972

$

27,871

$

27,100

$

27,532

Interest expense

 

4,908

 

4,344

 

3,951

 

3,586

 

Net interest income

 

22,064

 

23,527

 

23,149

 

23,946

 

Provision for credit losses

 

1,000

 

1,000

 

(409)

 

(2,615)

Noninterest income

4,941

5,720

4,524

4,857

Noninterest expense

13,272

13,046

13,528

14,201

Income before income taxes

 

12,733

 

15,201

 

14,554

 

17,217

Income tax expense

 

2,747

 

3,153

 

3,096

 

3,529

NET INCOME

$

9,986

$

12,048

$

11,458

$

13,688

Basic earnings per share

$

1.09

$

1.33

$

1.27

$

1.53

Diluted earnings per share

$

1.09

$

1.32

$

1.27

$

1.53

June 30, 2020

    

First

    

Second

    

Third

    

Fourth

(dollars in thousands)

Quarter

Quarter

Quarter

Quarter

Interest income

$

26,922

$

26,646

$

26,220

$

27,264

Interest expense

 

7,362

 

7,269

 

6,802

 

5,483

 

Net interest income

 

19,560

 

19,377

 

19,418

 

21,781

 

Provision for loan losses

 

896

 

388

 

2,850

 

1,868

Noninterest income

3,489

3,674

3,229

4,358

Noninterest expense

12,349

13,025

13,569

15,509

Income before income taxes

 

9,804

 

9,638

 

6,228

 

8,762

Income tax expense

 

1,976

 

1,921

 

1,129

 

1,861

NET INCOME

$

7,828

$

7,717

$

5,099

$

6,901

Basic earnings per share

$

0.85

$

0.84

$

0.55

$

0.76

Diluted earnings per share

$

0.85

$

0.84

$

0.55

$

0.76

June 30, 2019

    

First

    

Second

    

Third

    

Fourth

(dollars in thousands)

Quarter

Quarter

Quarter

Quarter

Interest income

$

22,042

$

24,207

$

25,186

$

26,047

Interest expense

 

4,875

 

6,139

 

6,632

 

7,054

 

Net interest income

 

17,167

 

18,068

 

18,554

 

18,993

 

Provision for loan losses

 

682

 

314

 

491

 

545

Noninterest income

2,944

3,568

3,423

3,158

Noninterest expense

10,963

12,066

12,667

12,196

Income before income taxes

 

8,466

 

9,256

 

8,819

 

9,410

Income tax expense

 

1,666

 

1,802

 

1,725

 

1,854

NET INCOME

$

6,800

$

7,454

$

7,094

$

7,556

Basic earnings per share

$

0.76

$

0.82

$

0.76

$

0.81

Diluted earnings per share

$

0.76

$

0.81

$

0.76

$

0.81

v3.21.2
Organization and Summary of Significant Accounting Policies - Organization (Details)
$ in Billions
Jun. 30, 2021
USD ($)
Organization and Summary of Significant Accounting Policies  
Assets of the REIT $ 1.1
v3.21.2
Organization and Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($)
$ in Millions
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Cash and Cash Equivalents [Line Items]    
Term of interest bearing deposits 7 years  
Interest-bearing deposits in other depository institutions    
Cash and Cash Equivalents [Line Items]    
Cash $ 83.2 $ 6.9
Deposits are held in various commercial banks    
Cash and Cash Equivalents [Line Items]    
Cash $ 1.8 $ 0.0
v3.21.2
Organization and Summary of Significant Accounting Policies - Loans (Details)
12 Months Ended
Jul. 01, 2020
USD ($)
Jun. 30, 2021
item
Number of loan portfolio pools | item   24
Impact of ASU 2016-13 adoption | Purchased credit deteriorated ("PCD") loans    
Increase to ACL | $ $ 434,000  
v3.21.2
Organization and Summary of Significant Accounting Policies - Premises and Equipment (Details)
12 Months Ended
Jun. 30, 2021
USD ($)
Property, Plant and Equipment [Line Items]  
Impairment loss on goodwill $ 0
Software  
Property, Plant and Equipment [Line Items]  
Useful life 3 years
Minimum | Premises  
Property, Plant and Equipment [Line Items]  
Useful life 7 years
Minimum | Equipment  
Property, Plant and Equipment [Line Items]  
Useful life 3 years
Maximum | Premises  
Property, Plant and Equipment [Line Items]  
Useful life 40 years
Maximum | Equipment  
Property, Plant and Equipment [Line Items]  
Useful life 7 years
v3.21.2
Organization and Summary of Significant Accounting Policies - Intangible Assets (Details) - USD ($)
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Finite-Lived Intangible Assets [Line Items]      
Amortization of intangible assets $ 1,395,000 $ 1,771,000 $ 1,672,000
Mortgage Servicing Rights 1,900,000 1,100,000  
2022 1,400,000    
2023 1,400,000    
2024 1,400,000    
2025 807,000    
2026 328,000    
Thereafter $ 0    
Finite-Lived Intangible Assets, Amortization Method using the straight line method    
Gross Core Deposit Intangibles   15,300,000  
Gross Core Deposit Intangibles Accumulated Amortization $ 10,100,000 8,700,000  
Gross Other Identifiable Intangibles 3,800,000 3,800,000  
Gross Other Identifiable Intangibles Accumulated Amortization 3,800,000 $ 3,800,000  
Impairment of Intangible Assets, Finite-lived 0    
Goodwill, Impairment Loss 0    
Core Deposits      
Finite-Lived Intangible Assets [Line Items]      
Intangible assets $ 15,300,000    
Minimum      
Finite-Lived Intangible Assets [Line Items]      
Core deposit intangible assets amortized period 5 years    
Maximum      
Finite-Lived Intangible Assets [Line Items]      
Core deposit intangible assets amortized period 7 years    
v3.21.2
Organization and Summary of Significant Accounting Policies - Outside Directors' Retirement (Details)
12 Months Ended
Jun. 30, 2021
age
Organization and Summary of Significant Accounting Policies  
Requisite period 60
Vesting period 5 years
v3.21.2
Organization and Summary of Significant Accounting Policies - New Accounting Pronouncements - Schedule of Adoption of ASU 2016-13 (Details) - USD ($)
Jul. 01, 2020
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2018
Allowance for Credit Loss on loans $ 25,139,000 $ 33,222,000 $ 25,139,000 $ 19,903,000 $ 18,214,000
Total allowance for credit losses on off-balance sheet credit exposures 1,959,000 1,805,000 1,959,000    
As reported prior to ASU 2016-13          
Loans receivable 2,141,929,000        
Cumulative Effect, Period of Adoption, Adjusted Balance          
Allowance for Credit Loss on loans 34,472,000        
Total allowance for credit losses on off-balance sheet credit exposures 2,227,000        
Retained earnings 7,200,000        
Cumulative Effect, Period of Adoption, Adjusted Balance | As reported under ASU 2016-13          
Loans receivable 2,142,363,000        
Cumulative Effect, Period of Adoption, Adjusted Balance | Impact of adoption ASU 2016-13          
Increase to the ACL 8,900,000        
Adjustment to the reserve for unfunded commitments 268,000        
Cumulative Effect, Period of Adoption, Adjusted Balance | Purchased credit deteriorated ("PCD") loans          
Increase to ACL 434,000        
Impact of ASU 2016-13 adoption          
Allowance for Credit Loss on loans 9,333,000   9,333,000    
Total allowance for credit losses on off-balance sheet credit exposures 268,000   268,000    
Impact of ASU 2016-13 adoption | Impact of adoption ASU 2016-13          
Loans receivable 434,000        
Impact of ASU 2016-13 adoption | Purchased credit deteriorated ("PCD") loans          
Increase to ACL 434,000        
Residential and commercial real estate loans | Purchased credit deteriorated ("PCD") loans | Impact of adoption ASU 2016-13          
Loans receivable 434,000        
Residential Real Estate          
Allowance for Credit Loss on loans 4,875,000 11,192,000 4,875,000 3,706,000 3,226,000
Total allowance for credit losses on off-balance sheet credit exposures   37,000 19,000    
Residential Real Estate | Cumulative Effect, Period of Adoption, Adjusted Balance          
Allowance for Credit Loss on loans 8,396,000        
Residential Real Estate | Impact of ASU 2016-13 adoption          
Allowance for Credit Loss on loans 3,521,000   3,521,000    
Total allowance for credit losses on off-balance sheet credit exposures     35,000    
Construction Real Estate          
Allowance for Credit Loss on loans 2,010,000 2,170,000 2,010,000 1,365,000 1,097,000
Total allowance for credit losses on off-balance sheet credit exposures   502,000 769,000    
Construction Real Estate | Cumulative Effect, Period of Adoption, Adjusted Balance          
Allowance for Credit Loss on loans 1,889,000        
Construction Real Estate | Impact of ASU 2016-13 adoption          
Allowance for Credit Loss on loans (121,000)   (121,000)    
Total allowance for credit losses on off-balance sheet credit exposures     (167,000)    
Commercial Real Estate          
Allowance for Credit Loss on loans 12,132,000 14,535,000 12,132,000 9,399,000 8,793,000
Total allowance for credit losses on off-balance sheet credit exposures   188,000 172,000    
Commercial Real Estate | Cumulative Effect, Period of Adoption, Adjusted Balance          
Allowance for Credit Loss on loans 15,988,000        
Commercial Real Estate | Impact of ASU 2016-13 adoption          
Allowance for Credit Loss on loans 3,856,000   3,856,000    
Total allowance for credit losses on off-balance sheet credit exposures     95,000    
Consumer loans          
Allowance for Credit Loss on loans 1,182,000 916,000 1,182,000 1,046,000 902,000
Total allowance for credit losses on off-balance sheet credit exposures   218,000 153,000    
Consumer loans | Cumulative Effect, Period of Adoption, Adjusted Balance          
Allowance for Credit Loss on loans 2,247,000        
Consumer loans | Impact of ASU 2016-13 adoption          
Allowance for Credit Loss on loans 1,065,000   1,065,000    
Total allowance for credit losses on off-balance sheet credit exposures     197,000    
Commercial loans          
Allowance for Credit Loss on loans 4,940,000 4,409,000 4,940,000 $ 4,387,000 $ 4,196,000
Total allowance for credit losses on off-balance sheet credit exposures   $ 860,000 846,000    
Commercial loans | Cumulative Effect, Period of Adoption, Adjusted Balance          
Allowance for Credit Loss on loans 5,952,000        
Commercial loans | Impact of ASU 2016-13 adoption          
Allowance for Credit Loss on loans $ 1,012,000   1,012,000    
Total allowance for credit losses on off-balance sheet credit exposures     $ 108,000    
v3.21.2
Available for Sale Securities - Schedule of Available for Sale Securities (Details) - USD ($)
$ in Thousands
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost $ 203,286  
Gross Unrealized Gains 4,875  
Gross Unrealized Losses (1,141)  
Total AFS securities 207,020 $ 176,524
Available-for-sale Securities    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost   170,780
Gross Unrealized Gains   6,126
Gross Unrealized Losses   (382)
Total AFS securities   176,524
Obligations of states and political subdivisions    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 46,257 40,486
Gross Unrealized Gains 1,479 1,502
Gross Unrealized Losses (40)  
Total AFS securities 47,696 41,988
Corporate Obligations    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 20,356 6,970
Gross Unrealized Gains 290 27
Gross Unrealized Losses (335) (338)
Total AFS securities 20,311 6,659
Other securities    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 647 949
Gross Unrealized Gains 25 21
Gross Unrealized Losses   (5)
Total AFS securities 672 965
TOTAL DEBT AND EQUITY SECURITIES    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 67,260 48,405
Gross Unrealized Gains 1,794 1,550
Gross Unrealized Losses (375) (343)
Total AFS securities 68,679 49,612
Residential MBS issued by governmental sponsored enterprises (GSEs)    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 64,400 62,315
Gross Unrealized Gains 932 1,646
Gross Unrealized Losses (379) (7)
Total AFS securities 64,953 63,954
Commercial MBS issued by GSEs    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 35,425 17,466
Gross Unrealized Gains 1,394 1,585
Gross Unrealized Losses (338)  
Total AFS securities 36,481 19,051
CMOs issued by GSEs    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 36,201 42,594
Gross Unrealized Gains 755 1,345
Gross Unrealized Losses (49) (32)
Total AFS securities 36,907 43,907
TOTAL MBS and CMOs    
Debt Securities, Available-for-sale [Line Items]    
Amortized Cost 136,026 122,375
Gross Unrealized Gains 3,081 4,576
Gross Unrealized Losses (766) (39)
Total AFS securities $ 138,341 $ 126,912
v3.21.2
Available for Sale Securities - Amortized Cost and Fair Value of Available-for-sale Securities, by Contractual Maturity (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Jun. 30, 2020
Amortized Cost    
Within one year $ 1,873  
After one year but less than five years 9,564  
After five years but less than ten years 30,386  
After ten years 25,437  
Total AFS securities 203,286  
Estimated Fair Value    
Within one year 1,887  
After one year but less than five years 9,720  
After five years but less than ten years 31,033  
After ten years 26,039  
Available for sale securities (Note 2) 207,020 $ 176,524
TOTAL DEBT AND EQUITY SECURITIES    
Amortized Cost    
Total investment securities 67,260  
Total AFS securities 67,260 48,405
Estimated Fair Value    
Total investment securities 68,679  
Available for sale securities (Note 2) 68,679 49,612
TOTAL MBS and CMOs    
Amortized Cost    
Total AFS securities 136,026 122,375
Estimated Fair Value    
Available for sale securities (Note 2) $ 138,341 $ 126,912
v3.21.2
Available for Sale Securities - Investments Pledged as Collateral to Secure Public Deposits and Securities Sold Under Agreements to Repurchase (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Jun. 30, 2020
Debt Securities, Available-for-sale [Line Items]    
Carrying value of investment and MBS pledged as collateral to secure public deposits and securities sold under agreements to repurchase $ 155,600 $ 156,100
Mortgage-Backed Securities    
Debt Securities, Available-for-sale [Line Items]    
Carrying value of investment and MBS pledged as collateral to secure public deposits and securities sold under agreements to repurchase 95,400 82,000
Collateralized Mortgage Obligations    
Debt Securities, Available-for-sale [Line Items]    
Carrying value of investment and MBS pledged as collateral to secure public deposits and securities sold under agreements to repurchase 18,800 41,900
Obligations of states and political subdivisions    
Debt Securities, Available-for-sale [Line Items]    
Carrying value of investment and MBS pledged as collateral to secure public deposits and securities sold under agreements to repurchase 41,400 32,000
Other securities    
Debt Securities, Available-for-sale [Line Items]    
Carrying value of investment and MBS pledged as collateral to secure public deposits and securities sold under agreements to repurchase $ 0 $ 200
v3.21.2
Available for Sale Securities - Gains and Losses recognized from sales of AFS securities (Details) - USD ($)
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Available for Sale Securities      
Gains recognized from sales of available-for-sale securities $ 138,000   $ 265,450
Losses recognized from sales of available-for-sale securities $ 48,000   $ 21,576
Debt Securities, Available-for-sale, Realized Gain (Loss)   $ 0  
v3.21.2
Available for Sale Securities - Fair Value of Debt Securities Reported Less Than Their Historical Cost (Details) - USD ($)
$ in Millions
Jun. 30, 2021
Jun. 30, 2020
Available for Sale Securities    
Fair value of certain investments reported less than their historical cost $ 67.2 $ 10.7
Certain investments in debt securities reported at less than historical cost, percentage of Company's AFS portfolio 32.50% 6.00%
v3.21.2
Available for Sale Securities - Gross Unrealized Losses and Fair Value, Continuous Unrealized Loss Position (Details)
$ in Thousands
Jun. 30, 2021
USD ($)
security
Jun. 30, 2020
USD ($)
security
Available-for-sale Securities    
Debt Securities, Available-for-sale [Line Items]    
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value $ 66,401 $ 10,032
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss 883 44
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value 790 643
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss 258 338
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value 67,191 10,675
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss 1,141 $ 382
Obligations of states and political subdivisions    
Debt Securities, Available-for-sale [Line Items]    
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value 3,177  
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss 40  
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value 3,177  
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss $ 40  
Number of individual securities in an unrealized loss position | security 7 7
Corporate Obligations    
Debt Securities, Available-for-sale [Line Items]    
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value $ 9,331 $ 995
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss 79 5
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value 720 454
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss 256 333
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value 10,051 1,449
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss $ 335 $ 338
Number of individual securities in an unrealized loss position | security 7 7
Other securities    
Debt Securities, Available-for-sale [Line Items]    
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value   $ 189
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss   5
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value   189
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss   5
TOTAL MBS and CMOs    
Debt Securities, Available-for-sale [Line Items]    
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value $ 53,893 9,037
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss 764 39
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value 70  
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss 2  
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value 53,963 9,037
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss $ 766 $ 39
Mortgage-Backed Securities    
Debt Securities, Available-for-sale [Line Items]    
Number of individual securities in an unrealized loss position | security 22 22
v3.21.2
Available for Sale Securities - Other Securities Policy: Pooled Trust Preferred Securities (Details)
12 Months Ended
Jun. 30, 2021
USD ($)
security
Jun. 30, 2020
USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Number of Pooled Trust Preferred Securities 2  
Fair Value of Pooled Trust Preferred Securities Held $ 720,000  
Unrealized Losses on Pooled Trust Preferred Securities in a Continuous Unrealized Loss Position for 12 Months or More $ 257,000  
Securities that continue to receive cash interest payments | security 1  
Credit losses recognized on investments $ 0 $ 0
Prepayments    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Debt Securities, Available-for-sale, Measurement Input 1.8  
Annual defaults    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Debt Securities, Available-for-sale, Measurement Input 220  
Debt Securities Basis Points Thereafter 0.80  
Recovery rate    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Debt Securities, Available-for-sale, Measurement Input 10  
Lagged years    
Fair Value Measurement Inputs and Valuation Techniques [Line Items]    
Debt Securities, Available-for-sale, Term 2 years  
v3.21.2
Loans and Allowance for Credit Losses - Classes of loans (Details)
$ in Thousands
12 Months Ended
Jun. 30, 2021
USD ($)
Jun. 30, 2020
USD ($)
Jul. 01, 2020
USD ($)
Jun. 30, 2019
USD ($)
Jun. 30, 2018
USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]          
Real Estate Loans $ 2,311,631 $ 2,249,915      
Loans in Process (74,540) (78,452)      
Deferred loan fees, net (3,625) (4,395)      
Allowance for credit losses (33,222) (25,139) $ (25,139) $ (19,903) $ (18,214)
Total loans $ 2,200,244 $ 2,141,929      
Number of purchased participation loans 23 23      
Purchased participation loans $ 83,000 $ 58,200      
Residential Real Estate          
Accounts, Notes, Loans and Financing Receivable [Line Items]          
Real Estate Loans 721,216 627,357      
Allowance for credit losses (11,192) (4,875) (4,875) (3,706) (3,226)
Construction Real Estate          
Accounts, Notes, Loans and Financing Receivable [Line Items]          
Real Estate Loans 208,824 185,924      
Allowance for credit losses (2,170) (2,010) (2,010) (1,365) (1,097)
Commercial Real Estate          
Accounts, Notes, Loans and Financing Receivable [Line Items]          
Real Estate Loans 889,793 887,419      
Allowance for credit losses (14,535) (12,132) (12,132) (9,399) (8,793)
Consumer loans          
Accounts, Notes, Loans and Financing Receivable [Line Items]          
Real Estate Loans 77,674 80,767      
Allowance for credit losses (916) (1,182) (1,182) (1,046) (902)
Commercial loans          
Accounts, Notes, Loans and Financing Receivable [Line Items]          
Real Estate Loans 414,124 468,448      
Allowance for credit losses $ (4,409) $ (4,940) $ (4,940) $ (4,387) $ (4,196)
v3.21.2
Loans and Allowance for Credit Losses - Classes of loans information (Details)
$ in Thousands
3 Months Ended 12 Months Ended
Jun. 30, 2021
USD ($)
Mar. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Sep. 30, 2020
USD ($)
Jun. 30, 2019
USD ($)
Mar. 31, 2019
USD ($)
Dec. 31, 2018
USD ($)
Sep. 30, 2018
USD ($)
Jun. 30, 2021
USD ($)
item
Jun. 30, 2020
USD ($)
Jun. 30, 2019
USD ($)
Provision for credit losses $ (2,615) $ (409) $ 1,000 $ 1,000 $ 545 $ 491 $ 314 $ 682 $ (1,024) $ 6,002 $ 2,032
ACL $ 33,222               $ 33,222 $ 25,139  
Consumer loans                      
Amortization period of loans                 5 years    
Consumer Loans, Home Equity Lines Of Credit                      
Maximum percentage of appraised value or purchase price that loans cannot exceed                 100.00%    
Amortization period of loans                 10 years    
Consumer Loans, Other Than Home Equity Lines Of Credit                      
Maximum percentage of appraised value or purchase price that loans cannot exceed                 100.00%    
Amortization period of loans                 60 months    
Commercial loans                      
Amortization period of loans                 5 years    
Amortization period of multi-family residential loans if balloon maturities                 1 year    
Secured by Properties Located Outside Lending Area                      
Loans Receivable                 $ 293,300    
Residential Real Estate                      
Fixed-rate and adjustable-rate mortgage (ARM) loans amortization period (in years)                 30 years    
Amortization period of multi-family residential loans if balloon maturities                 10 years    
Residential Real Estate | Minimum                      
Number of family residences | item                 1    
Residential Real Estate | Maximum                      
Number of family residences | item                 4    
Residential Real Estate | Single Family                      
Maximum percentage of appraised value or purchase price that loans cannot exceed                 90.00%    
Residential Real Estate | Multifamily                      
Maximum percentage of appraised value or purchase price that loans cannot exceed                 85.00%    
Amortization period of loans                 25 years    
Commercial                      
Amortization period of loans                 25 years    
Term of fixed interest applicability on loans                 10 years    
Term of variable interest applicability on loans                 7 years    
Agricultural real estate terms if 80% loan-to-value ratio                 25 years    
Agricultural real estate terms if 75% loan-to-value ratio                 30 years    
Loans Receivable                 $ 889,800    
Residential Real Estate                      
Amortization period of loans                 30 years    
Residential Real Estate | Minimum                      
Maturities of single-family residential construction loans                 6 months    
Residential Real Estate | Maximum                      
Maturities of single-family residential construction loans                 12 months    
Commercial Real Estate                      
Amortization period of loans                 25 years    
Construction Real Estate                      
Average term of construction loans                 8 months    
Construction Real Estate | Minimum                      
Maturities of multifamily or commercial construction loans                 12 months    
Construction Real Estate | Maximum                      
Maturities of multifamily or commercial construction loans                 24 months    
Modifications for the purpose of extending the maturity date | Construction Real Estate                      
Incremental period that the loan maturity can be extended to                 3 months    
Number of construction loans outstanding, for which a modification had been agreed to 48               48 77  
Construction loans outstanding, for which a modification had been agreed to $ 28,500               $ 28,500 $ 48,800  
v3.21.2
Loans and Allowance for Credit Losses - Balance in the ACL and the recorded investment in loans (Details) - USD ($)
$ in Thousands
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Allowance for credit losses:      
Balance, beginning of period $ 25,139 $ 19,903 $ 18,214
Provision (benefit) charged to expense (602) 6,002 2,032
Losses charged off (734) (853) (389)
Recoveries 86 87 46
Balance, end of period 33,222 25,139 19,903
Ending Balance: individually evaluated for impairment   0  
Ending Balance: collectively evaluated for impairment   25,139  
Ending Balance: loans acquired with deteriorated credit quality   0  
Loans:      
Ending Balance: individually evaluated for impairment   0  
Ending Balance: collectively evaluated for impairment   2,149,664  
Ending Balance: loans acquired with deteriorated credit quality   21,799  
Residential Real Estate      
Allowance for credit losses:      
Balance, beginning of period 4,875 3,706 3,226
Provision (benefit) charged to expense 2,973 1,529 487
Losses charged off (180) (379) (30)
Recoveries 3 19 23
Balance, end of period 11,192 4,875 3,706
Ending Balance: individually evaluated for impairment   0  
Ending Balance: collectively evaluated for impairment   4,875  
Ending Balance: loans acquired with deteriorated credit quality   0  
Loans:      
Ending Balance: individually evaluated for impairment   0  
Ending Balance: collectively evaluated for impairment   626,085  
Ending Balance: loans acquired with deteriorated credit quality   1,272  
Construction Real Estate      
Allowance for credit losses:      
Balance, beginning of period 2,010 1,365 1,097
Provision (benefit) charged to expense 281 645 268
Balance, end of period 2,170 2,010 1,365
Ending Balance: individually evaluated for impairment   0  
Ending Balance: collectively evaluated for impairment   2,010  
Ending Balance: loans acquired with deteriorated credit quality   0  
Loans:      
Ending Balance: individually evaluated for impairment   0  
Ending Balance: collectively evaluated for impairment   106,194  
Ending Balance: loans acquired with deteriorated credit quality   1,278  
Commercial Real Estate      
Allowance for credit losses:      
Balance, beginning of period 12,132 9,399 8,793
Provision (benefit) charged to expense (1,364) 2,730 765
Losses charged off (90) (12) (164)
Recoveries 1 15 5
Balance, end of period 14,535 12,132 9,399
Ending Balance: individually evaluated for impairment   0  
Ending Balance: collectively evaluated for impairment   12,132  
Ending Balance: loans acquired with deteriorated credit quality   0  
Loans:      
Ending Balance: individually evaluated for impairment   0  
Ending Balance: collectively evaluated for impairment   872,716  
Ending Balance: loans acquired with deteriorated credit quality   14,703  
Consumer loans      
Allowance for credit losses:      
Balance, beginning of period 1,182 1,046 902
Provision (benefit) charged to expense (1,232) 300 231
Losses charged off (146) (189) (103)
Recoveries 47 25 16
Balance, end of period 916 1,182 1,046
Ending Balance: individually evaluated for impairment   0  
Ending Balance: collectively evaluated for impairment   1,182  
Ending Balance: loans acquired with deteriorated credit quality   0  
Loans:      
Ending Balance: individually evaluated for impairment   0  
Ending Balance: collectively evaluated for impairment   80,767  
Commercial loans      
Allowance for credit losses:      
Balance, beginning of period 4,940 4,387 4,196
Provision (benefit) charged to expense (1,260) 798 281
Losses charged off (318) (273) (92)
Recoveries 35 28 2
Balance, end of period 4,409 4,940 $ 4,387
Ending Balance: individually evaluated for impairment   0  
Ending Balance: collectively evaluated for impairment   4,940  
Ending Balance: loans acquired with deteriorated credit quality   0  
Loans:      
Ending Balance: individually evaluated for impairment   0  
Ending Balance: collectively evaluated for impairment   463,902  
Ending Balance: loans acquired with deteriorated credit quality   4,546  
Impact of ASU 2016-13 adoption      
Allowance for credit losses:      
Balance, beginning of period 9,333    
Balance, end of period   9,333  
Impact of ASU 2016-13 adoption | Residential Real Estate      
Allowance for credit losses:      
Balance, beginning of period 3,521    
Balance, end of period   3,521  
Impact of ASU 2016-13 adoption | Construction Real Estate      
Allowance for credit losses:      
Balance, beginning of period (121)    
Balance, end of period   (121)  
Impact of ASU 2016-13 adoption | Commercial Real Estate      
Allowance for credit losses:      
Balance, beginning of period 3,856    
Balance, end of period   3,856  
Impact of ASU 2016-13 adoption | Consumer loans      
Allowance for credit losses:      
Balance, beginning of period 1,065    
Balance, end of period   1,065  
Impact of ASU 2016-13 adoption | Commercial loans      
Allowance for credit losses:      
Balance, beginning of period $ 1,012    
Balance, end of period   $ 1,012  
v3.21.2
Loans and Allowance for Credit Losses - Allowance for off-balance credit exposure (Details) - USD ($)
$ in Thousands
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Allowance for off-balance sheet credit exposure:      
Balance, beginning of period $ 1,959    
Provision (benefit) charged to expense (422) $ 648 $ 149
Balance, end of period 1,805 1,959  
Impact of ASU 2016-13 adoption      
Allowance for off-balance sheet credit exposure:      
Balance, beginning of period 268    
Balance, end of period   268  
Residential Real Estate      
Allowance for off-balance sheet credit exposure:      
Balance, beginning of period 19    
Provision (benefit) charged to expense (17)    
Balance, end of period 37 19  
Residential Real Estate | Impact of ASU 2016-13 adoption      
Allowance for off-balance sheet credit exposure:      
Balance, beginning of period 35    
Balance, end of period   35  
Construction Real Estate      
Allowance for off-balance sheet credit exposure:      
Balance, beginning of period 769    
Provision (benefit) charged to expense (100)    
Balance, end of period 502 769  
Construction Real Estate | Impact of ASU 2016-13 adoption      
Allowance for off-balance sheet credit exposure:      
Balance, beginning of period (167)    
Balance, end of period   (167)  
Commercial Real Estate      
Allowance for off-balance sheet credit exposure:      
Balance, beginning of period 172    
Provision (benefit) charged to expense (79)    
Balance, end of period 188 172  
Commercial Real Estate | Impact of ASU 2016-13 adoption      
Allowance for off-balance sheet credit exposure:      
Balance, beginning of period 95    
Balance, end of period   95  
Consumer loans      
Allowance for off-balance sheet credit exposure:      
Balance, beginning of period 153    
Provision (benefit) charged to expense (132)    
Balance, end of period 218 153  
Consumer loans | Impact of ASU 2016-13 adoption      
Allowance for off-balance sheet credit exposure:      
Balance, beginning of period 197    
Balance, end of period   197  
Commercial loans      
Allowance for off-balance sheet credit exposure:      
Balance, beginning of period 846    
Provision (benefit) charged to expense (94)    
Balance, end of period 860 846  
Commercial loans | Impact of ASU 2016-13 adoption      
Allowance for off-balance sheet credit exposure:      
Balance, beginning of period $ 108    
Balance, end of period   $ 108  
v3.21.2
Loans and Allowance for Credit Losses - Credit risk profile based on rating category and year of origination (Details) - USD ($)
$ in Thousands
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Financing Receivable, Credit Quality Indicator [Line Items]    
Amount of loan relationships subject to annual credit analysis $ 3,000  
Loan relationships that are subject to independent annual review 1,000  
2021 1,034,652  
2020 433,293  
2019 182,774  
2018 118,958  
2017 115,845  
Prior 143,946  
Revolving loans 207,623  
Total 2,237,091 $ 2,171,463
Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 1,015,117  
2020 420,483  
2019 169,879  
2018 115,613  
2017 101,993  
Prior 142,556  
Revolving loans 204,930  
Total 2,170,571  
Watch    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 6,415  
2020 2,697  
2019 11,235  
2018 1,399  
2017 815  
Prior 819  
Revolving loans 1,321  
Total 24,701  
Special Mention    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 8,806  
2018 1,793  
2017 12,826  
Revolving loans 300  
Total 23,725  
Substandard    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 13,120  
2020 1,307  
2019 810  
2018 153  
2017 211  
Prior 571  
Revolving loans 1,072  
Total 17,244  
Doubtful    
Financing Receivable, Credit Quality Indicator [Line Items]    
2019 850  
Total 850  
Residential Real Estate    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 366,492  
2020 175,931  
2019 43,986  
2018 33,021  
2017 23,356  
Prior 72,873  
Revolving loans 5,557  
Total 721,216 627,357
Residential Real Estate | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 361,876  
2020 175,772  
2019 43,576  
2018 32,929  
2017 23,267  
Prior 71,592  
Revolving loans 5,557  
Total 714,569  
Residential Real Estate | Watch    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 328  
2020 70  
2019 410  
2017 89  
Prior 809  
Total 1,706  
Residential Real Estate | Substandard    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 4,288  
2020 89  
2018 92  
Prior 472  
Total 4,941  
Construction Real Estate    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 88,418  
2020 45,866  
Total 134,284 107,472
Construction Real Estate | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 88,371  
2020 45,866  
Total 134,237  
Construction Real Estate | Substandard    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 47  
Total 47  
Commercial Real Estate    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 364,379  
2020 159,978  
2019 115,603  
2018 79,168  
2017 84,484  
Prior 61,303  
Revolving loans 24,878  
Total 889,793 887,419
Commercial Real Estate | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 351,732  
2020 147,670  
2019 104,746  
2018 75,967  
2017 70,927  
Prior 61,194  
Revolving loans 23,699  
Total 835,935  
Commercial Real Estate | Watch    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 4,456  
2020 2,365  
2019 9,502  
2018 1,377  
2017 726  
Prior 10  
Revolving loans 810  
Total 19,246  
Commercial Real Estate | Special Mention    
Financing Receivable, Credit Quality Indicator [Line Items]    
2020 8,806  
2018 1,793  
2017 12,826  
Revolving loans 300  
Total 23,725  
Commercial Real Estate | Substandard    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 8,191  
2020 1,137  
2019 505  
2018 31  
2017 5  
Prior 99  
Revolving loans 69  
Total 10,037  
Commercial Real Estate | Doubtful    
Financing Receivable, Credit Quality Indicator [Line Items]    
2019 850  
Total 850  
Consumer loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 23,938  
2020 8,626  
2019 3,597  
2018 1,156  
2017 564  
Prior 650  
Revolving loans 39,143  
Total 77,674 80,767
Consumer loans | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 23,858  
2020 8,626  
2019 3,597  
2018 1,126  
2017 534  
Prior 650  
Revolving loans 39,071  
Total 77,462  
Consumer loans | Watch    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 80  
Revolving loans 48  
Total 128  
Consumer loans | Substandard    
Financing Receivable, Credit Quality Indicator [Line Items]    
2018 30  
2017 30  
Revolving loans 24  
Total 84  
Commercial loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 191,425  
2020 42,892  
2019 19,588  
2018 5,613  
2017 7,441  
Prior 9,120  
Revolving loans 138,045  
Total 414,124 $ 468,448
Commercial loans | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 189,280  
2020 42,549  
2019 17,960  
2018 5,591  
2017 7,265  
Prior 9,120  
Revolving loans 136,603  
Total 408,368  
Commercial loans | Watch    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 1,551  
2020 262  
2019 1,323  
2018 22  
Revolving loans 463  
Total 3,621  
Commercial loans | Substandard    
Financing Receivable, Credit Quality Indicator [Line Items]    
2021 594  
2020 81  
2019 305  
2017 176  
Revolving loans 979  
Total $ 2,135  
v3.21.2
Loans and Allowance for Credit Losses - Credit risk profile based on rating and payment activity (Details) - USD ($)
$ in Thousands
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL $ 3,200 $ 5,900
Watch    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL 9,000 10,300
Special Mention    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL 0 0
Substandard    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL 2,700 5,600
Doubtful    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL $ 0 0
Residential Real Estate    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   627,357
Residential Real Estate | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   620,004
Residential Real Estate | Watch    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   1,900
Residential Real Estate | Substandard    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   5,453
Construction Real Estate    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   107,472
Construction Real Estate | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   103,105
Construction Real Estate | Watch    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   4,367
Commercial Real Estate    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   887,419
Commercial Real Estate | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   829,276
Commercial Real Estate | Watch    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   45,262
Commercial Real Estate | Special Mention    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   403
Commercial Real Estate | Substandard    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   11,590
Commercial Real Estate | Doubtful    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   888
Consumer loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   80,767
Consumer loans | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   80,517
Consumer loans | Watch    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   45
Consumer loans | Special Mention    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   25
Consumer loans | Substandard    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   180
Commercial loans    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   468,448
Commercial loans | Pass    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   457,385
Commercial loans | Watch    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   4,708
Commercial loans | Substandard    
Financing Receivable, Credit Quality Indicator [Line Items]    
PCD loans receivable, net of ACL   $ 6,355
v3.21.2
Loans and Allowance for Credit Losses - Loan portfolio aging analysis (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Jun. 30, 2020
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable $ 2,237,091 $ 2,171,463
30-59 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 1,238 1,686
60 to 89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 1,369 1,977
Greater than 90 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 1,211 2,730
Total Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 3,818 6,393
Current    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 2,233,273 2,165,070
Residential Real Estate    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 721,216 627,357
Residential Real Estate | 30-59 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 312 772
Residential Real Estate | 60 to 89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 364 378
Residential Real Estate | Greater than 90 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 613 654
Residential Real Estate | Total Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 1,289 1,804
Residential Real Estate | Current    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 719,927 625,553
Construction Real Estate    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 134,284 107,472
Construction Real Estate | Greater than 90 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 30  
Construction Real Estate | Total Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 30  
Construction Real Estate | Current    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 134,254 107,472
Commercial Real Estate    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 889,793 887,419
Commercial Real Estate | 30-59 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 363 641
Commercial Real Estate | 60 to 89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable   327
Commercial Real Estate | Greater than 90 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 374 1,073
Commercial Real Estate | Total Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 737 2,041
Commercial Real Estate | Current    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 889,056 885,378
Consumer loans    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 77,674 80,767
Consumer loans | 30-59 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 195 180
Consumer loans | 60 to 89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 66 53
Consumer loans | Greater than 90 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 84 193
Consumer loans | Total Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 345 426
Consumer loans | Current    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 77,329 80,341
Commercial loans    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 414,124 468,448
Commercial loans | 30-59 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 368 93
Commercial loans | 60 to 89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 939 1,219
Commercial loans | Greater than 90 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 110 810
Commercial loans | Total Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 1,417 2,122
Commercial loans | Current    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable $ 412,707 $ 466,326
v3.21.2
Loans and Allowance for Credit Losses - CARES Act (Details) - USD ($)
Jun. 30, 2021
Jun. 30, 2020
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable $ 2,237,091,000 $ 2,171,463,000
Current    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 2,233,273,000 2,165,070,000
Current | CARES Act    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 23,900,000 380,100,000
30-59 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 1,238,000 1,686,000
60 to 89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 1,369,000 1,977,000
Total Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 3,818,000 6,393,000
Total Past Due | CARES Act    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 0  
Residential Real Estate    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 721,216,000 627,357,000
Residential Real Estate | Current    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 719,927,000 625,553,000
Residential Real Estate | 30-59 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 312,000 772,000
Residential Real Estate | 30-59 Days Past Due | CARES Act    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable   1,000
Residential Real Estate | 60 to 89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 364,000 378,000
Residential Real Estate | Total Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 1,289,000 1,804,000
Consumer loans    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 77,674,000 80,767,000
Consumer loans | Current    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 77,329,000 80,341,000
Consumer loans | 30-59 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 195,000 180,000
Consumer loans | 30-59 Days Past Due | CARES Act    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable   29,000
Consumer loans | 60 to 89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 66,000 53,000
Consumer loans | Total Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 345,000 426,000
Commercial loans    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 414,124,000 468,448,000
Commercial loans | Current    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 412,707,000 466,326,000
Commercial loans | 30-59 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 368,000 93,000
Commercial loans | 60 to 89 Days Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable 939,000 1,219,000
Commercial loans | 60 to 89 Days Past Due | CARES Act    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable   66,000
Commercial loans | Total Past Due    
Financing Receivable, Past Due [Line Items]    
Total Loans Receivable $ 1,417,000 $ 2,122,000
v3.21.2
Loans and Allowance for Credit Losses - Collateral dependent loans and related ACL (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Jul. 01, 2020
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2018
Related allowance for credit losses $ 33,222 $ 25,139 $ 25,139 $ 19,903 $ 18,214
Collateral-dependent Loans | 1- to 4-family residential loans          
Amortized cost 895        
Related allowance for credit losses 223        
Residential Real Estate          
Related allowance for credit losses 11,192 $ 4,875 $ 4,875 $ 3,706 $ 3,226
Residential Real Estate | Collateral-dependent Loans          
Amortized cost 895        
Related allowance for credit losses $ 223        
v3.21.2
Loans and Allowance for Credit Losses - Impaired Loans (Details)
$ in Thousands
12 Months Ended
Jun. 30, 2021
USD ($)
PCI loans $ 21,800
Commercial loans  
Impaired Financing Receivable, with No Related Allowance, Recorded Investment 5,040
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance 6,065
Impaired Financing Receivable With and Without Related Allowance Recorded Investment 5,040
Impaired Financial Receivable With and Without Related Allowance Unpaid Principal Balance 6,065
Construction Real Estate  
Impaired Financing Receivable, with No Related Allowance, Recorded Investment 1,278
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance 1,312
Impaired Financing Receivable With and Without Related Allowance Recorded Investment 1,278
Impaired Financial Receivable With and Without Related Allowance Unpaid Principal Balance 1,312
Residential Real Estate  
Impaired Financing Receivable, with No Related Allowance, Recorded Investment 3,811
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance 4,047
Impaired Financing Receivable With and Without Related Allowance Recorded Investment 3,811
Impaired Financial Receivable With and Without Related Allowance Unpaid Principal Balance 4,047
Commercial  
Impaired Financing Receivable, with No Related Allowance, Recorded Investment 19,271
Impaired Financing Receivable, with No Related Allowance, Unpaid Principal Balance 23,676
Impaired Financing Receivable With and Without Related Allowance Recorded Investment 19,271
Impaired Financial Receivable With and Without Related Allowance Unpaid Principal Balance $ 23,676
v3.21.2
Loans and Allowance for Credit Losses - Interest income recognized on impaired loans (Details) - USD ($)
12 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Average Investment in Impaired Loans $ 24,507,000 $ 22,137,000
Interest Income Recognized 1,918,000 2,854,000
Interest Income Recognized, Cash basis 0 0
Change in the present value of future cash flows attributable to the passage of time 236,000 1,300,000
Commercial loans    
Average Investment in Impaired Loans 5,597,000 4,212,000
Interest Income Recognized 419,000 926,000
Construction Real Estate    
Average Investment in Impaired Loans 1,295,000 1,297,000
Interest Income Recognized 134,000 246,000
Residential Real Estate    
Average Investment in Impaired Loans 1,440,000 2,081,000
Interest Income Recognized 89,000 112,000
Commercial    
Average Investment in Impaired Loans 16,175,000 14,547,000
Interest Income Recognized $ 1,276,000 $ 1,570,000
v3.21.2
Loans and Allowance for Credit Losses - Nonaccrual Loans (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Jun. 30, 2020
Financing Receivable, Nonaccrual [Line Items]    
Nonaccrual loans $ 5,868 $ 8,657
Residential Real Estate    
Financing Receivable, Nonaccrual [Line Items]    
Nonaccrual loans 3,235 4,010
Construction Real Estate    
Financing Receivable, Nonaccrual [Line Items]    
Nonaccrual loans 30  
Commercial Real Estate    
Financing Receivable, Nonaccrual [Line Items]    
Nonaccrual loans 1,914 3,106
Consumer loans    
Financing Receivable, Nonaccrual [Line Items]    
Nonaccrual loans 100 196
Commercial loans    
Financing Receivable, Nonaccrual [Line Items]    
Nonaccrual loans $ 589 $ 1,345
v3.21.2
Loans and Allowance for Credit Losses - Performing Loans Classified as Troubled Debt Restructuring Loans (Details)
12 Months Ended
Jun. 30, 2021
USD ($)
loan
Jun. 30, 2020
USD ($)
Number of modifications | loan 3  
Recorded Investment $ 894,000  
Performing Loans    
Number of modifications 12,000 20,000
Recorded Investment $ 3,241,000  
Recorded Investment   $ 8,580,000
Performing Loans | Commercial loans    
Number of modifications 7,000 7,000
Recorded Investment $ 1,397,000  
Recorded Investment   $ 3,245,000
Performing Loans | Residential Real Estate    
Number of modifications 1,000 3,000
Recorded Investment $ 895,000  
Recorded Investment   $ 791,000
Performing Loans | Commercial    
Number of modifications 4,000 10,000
Recorded Investment $ 949,000  
Recorded Investment   $ 4,544,000
v3.21.2
Loans and Allowance for Credit Losses - Real Estate Foreclosures (Details) - USD ($)
Jun. 30, 2021
Jun. 30, 2020
Financing Receivable, Troubled Debt Restructuring [Line Items]    
Repossessed assets $ 622,000 $ 563,000
Residential Real Estate | Home Equity Loan    
Financing Receivable, Troubled Debt Restructuring [Line Items]    
Foreclosure proceedings in process $ 533,000 $ 435,000
v3.21.2
Loans and Allowance for Credit Losses - Summary of loans to executive officers, directors, significant shareholders (Details) - USD ($)
$ in Thousands
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Loans and Allowance for Credit Losses    
Beginning Balance $ 8,603 $ 9,132
Additions 8,474 5,179
Repayments (6,453) (5,708)
Ending Balance $ 10,624 $ 8,603
v3.21.2
Premises and Equipment - Summary of premises and equipment (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Jun. 30, 2020
Premises and Equipment    
Land $ 12,452 $ 12,585
Buildings and improvements 56,422 56,039
Construction in progress 1,158 435
Furniture, fixtures, equipment and software 18,985 18,109
Automobiles 120 120
Operating leases ROU asset 2,770 1,965
Property, Plant and Equipment, Gross 91,907 89,253
Less accumulated depreciation 27,830 24,147
Premises and equipment, net $ 64,077 $ 65,106
v3.21.2
Premises and Equipment - Calculated amount of right of use assets and lease liabilities (Details) - USD ($)
$ in Thousands
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Right of use assets obtained in exchange for lease obligations: Operating Leases $ 804 $ 2,004
Consolidated Balance Sheet    
Operating leases right of use asset 2,770 1,965
Operating leases liability 2,770 1,965
Consolidated Statement Of Income    
Operating lease costs classified as occupancy and equipment expense (includes short-term lease costs) 340 214
Supplemental Disclosures Of Cash Flow Information | Cash paid for amounts included in the measurement of lease liabilities    
Operating cash flows from operating leases 282 174
Right of use assets obtained in exchange for lease obligations: Operating Leases $ 804 $ 2,004
v3.21.2
Premises and Equipment - Additional Information (Details)
12 Months Ended
Jun. 30, 2021
USD ($)
property
Jun. 30, 2020
USD ($)
Number of leased properties | property 6  
Operating Lease, Weighted Average Discount Rate, Percent 5.00%  
Operating lease expense | $ $ 340,000 $ 214,000
Minimum    
Lessee Expected Lease Terms P18M  
Maximum    
Lessee Expected Lease Terms P21Y  
v3.21.2
Premises and Equipment - Future expected lease payments for leases (Details)
$ in Thousands
Jun. 30, 2021
USD ($)
Premises and Equipment  
2022 $ 338
2023 272
2024 272
2025 272
2026 272
Thereafter 3,142
Future lease payments expected $ 4,568
v3.21.2
Deposits (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Jun. 30, 2020
Non-interest bearing accounts $ 358,418 $ 316,048
NOW accounts 925,280 781,937
Money market deposit accounts 253,614 231,162
Savings accounts 230,905 181,229
TOTAL NON-MATURITY DEPOSITS 1,768,217 1,510,376
TOTAL CERTIFICATES 562,586 674,471
TOTAL DEPOSITS 2,330,803 2,184,847
0.00-0.99%    
TOTAL CERTIFICATES 332,958 72,236
1.00-1.99%    
TOTAL CERTIFICATES 155,078 393,625
2.00-2.99%    
TOTAL CERTIFICATES 63,777 168,985
3.00-3.99%    
TOTAL CERTIFICATES 10,606 39,191
4.00-4.99%    
TOTAL CERTIFICATES $ 167 160
5.00 - 5.99%    
TOTAL CERTIFICATES   0
6.00 - 6.99%    
TOTAL CERTIFICATES   $ 274
v3.21.2
Deposits - Summary of Certificate Maturities (Details)
$ in Thousands
Jun. 30, 2021
USD ($)
Deposits  
July 1, 2021 to June 30, 2022 $ 358,777
July 1, 2022 to June 30, 2023 90,169
July 1, 2023 to June 30, 2024 21,530
July 1, 2024 to June 30, 2025 40,503
July 1, 2025 to June 30, 2026 51,607
TOTAL $ 562,586
v3.21.2
Deposits - Additional Information (Details) - USD ($)
$ in Millions
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Deposits    
Aggregate Amount of Deposits With a Minimum Denomination of $250,000 $ 668.8 $ 611.4
Interest-bearing Domestic Deposit, Brokered 5.0 23.3
Deposits Held for Affiliates $ 4.3 $ 4.2
v3.21.2
Advances from Federal Home Loan Bank (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Jun. 30, 2020
Federal Home Loan Bank Advances. $ 57,529 $ 70,024
Weighted-average rate 1.97% 2.01%
09/09/20 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 2.02%  
Federal Home Loan Bank Advances.   $ 4,982
11/23/20 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 2.13%  
Federal Home Loan Bank Advances.   1,741
01/14/21 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 1.92%  
Federal Home Loan Bank Advances.   249
03/31/21 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 1.68%  
Federal Home Loan Bank Advances.   248
05/17/21 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 2.43%  
Federal Home Loan Bank Advances.   5,000
06/10/21 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 1.42%  
Federal Home Loan Bank Advances.   247
09/07/21 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 2.81%  
Federal Home Loan Bank Advances. $ 9,000 9,000
09/09/21 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 2.28%  
Federal Home Loan Bank Advances. $ 1,994 1,977
10/01/21 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 2.53%  
Federal Home Loan Bank Advances. $ 5,000 5,000
11/16/21 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 2.43%  
Federal Home Loan Bank Advances. $ 5,000 5,000
03/07/22 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 0.95%  
Federal Home Loan Bank Advances. $ 3,000 3,000
03/31/22 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 1.91%  
Federal Home Loan Bank Advances. $ 248 246
08/15/22 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 1.89%  
Federal Home Loan Bank Advances. $ 3,000 3,000
03/06/23 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 0.99%  
Federal Home Loan Bank Advances. $ 3,000 3,000
03/06/24 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 0.95%  
Federal Home Loan Bank Advances. $ 3,000 3,000
03/28/24 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 2.56%  
Federal Home Loan Bank Advances. $ 8,000 8,000
08/13/24 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 1.88%  
Federal Home Loan Bank Advances. $ 3,000 3,000
02/21/25 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 1.28%  
Federal Home Loan Bank Advances. $ 5,000 5,000
02/21/25 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 1.53%  
Federal Home Loan Bank Advances. $ 5,000 5,000
03/06/25 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 1.01%  
Federal Home Loan Bank Advances. $ 3,000 3,000
12/14/26 | Federal Home Loan Bank Advances Maturity Date    
Federal Home Loan Bank, Advances, Interest Rate 2.65%  
Federal Home Loan Bank Advances. $ 287 $ 334
v3.21.2
Advances from Federal Home Loan Bank - FHLB Advances Maturities (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Jun. 30, 2020
Advances from Federal Home Loan Bank    
July 1, 2021 to June 30, 2022 $ 24,242  
July 1, 2022 to June 30, 2023 6,000  
July 1, 2023 to June 30, 2024 11,000  
July 1, 2024 to June 30, 2025 16,000  
July 1, 2025 to thereafter 287  
TOTAL $ 57,529 $ 70,024
v3.21.2
Advances from Federal Home Loan Bank - Additional Information (Details) - USD ($)
$ in Millions
Jun. 30, 2021
Jun. 30, 2020
Advances from Federal Home Loan Bank    
FHLB prior to maturity amount $ 10.0  
Long-term Line of Credit 383.0 $ 296.6
Line of Credit Outstanding $ 769.8 $ 768.7
v3.21.2
Subordinated Debt (Details) - USD ($)
1 Months Ended 12 Months Ended
Aug. 31, 2014
Oct. 31, 2013
Mar. 31, 2004
Jun. 30, 2021
Jun. 30, 2020
Subordinated debt       $ 15,243,000 $ 15,142,000
Prepaid Expenses and Other Current Assets [Member]          
Investment, face amount       505,000  
Investment, carrying value       458,000  
Trust Preferred Securities          
Subordinated debt       $ 7,200,000 7,200,000
Redeemable term (in years)     5 years    
Interest rate (as a percent)       2.87%  
Ozarks Legacy Community Financial, Inc.          
Interest rate (as a percent)       2.57%  
Floating rate   $ 3,100,000      
Ozarks Legacy Community Financial, Inc. | Reported Value Measurement          
Floating rate       $ 2,700,000 2,700,000
Peoples Service Company, Inc.          
Interest rate (as a percent)       1.92%  
Floating rate $ 6,500,000        
Peoples Service Company, Inc. | Reported Value Measurement          
Floating rate       $ 5,300,000 $ 5,300,000
v3.21.2
Employee Benefits - 401(k) Retirement Plan (Details) - USD ($)
$ in Millions
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Employee Benefits      
Matching contributions of eligible compensation 4.00%    
Additional profit-sharing contributions of eligible salary 5.00%    
401(k) Retirement Plan Expense $ 1.7 $ 1.5 $ 1.3
401(k) Retirement Plan Shares Held 394,000    
Vesting period 5 years    
v3.21.2
Employee Benefits - 2008 Equity Incentive Plan (Details) - USD ($)
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2017
Jun. 30, 2012
Equity Incentive Plan Description The Company adopted an Equity Incentive Plan (the EIP) in 2008, reserving for award 132,000 shares (split-adjusted). EIP shares were available for award to directors, officers, and employees of the Company and its affiliates by a committee of outside directors.        
Equity Incentive Plan Shares reserved 132,000        
Restricted Stock          
Equity Incentive Plan Shares Awarded       0 122,803
Equity Incentive Plan vesting percentage 20.00%        
Equity Incentive Plan Shares Vested 2,700 2,825 7,100    
Equity Incentive Plan Expense $ 84,000 $ 88,000 $ 141,000    
Equity Incentive Plan Unvested Compensation Expense $ 51,000        
Performance-based restricted stock          
Equity Incentive Plan vesting percentage 20.00%        
v3.21.2
Employee Benefits - 2003 Stock Option Plan (Details) - USD ($)
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Exercised 0 10,000 0
2003 Stock Option Plan      
Stock Option Plan Description The Company adopted a stock option plan in October 2003 (the 2003 Plan). Under the plan, the Company granted options to purchase 242,000 shares (split-adjusted) to employees and directors, of which, options to purchase 187,000 shares (split-adjusted) have been exercised, options to purchase 45,000 shares (split-adjusted) have been forfeited, and 10,000 remain outstanding. Under the 2003 Plan, exercised options may be issued from either authorized but unissued shares, or treasury shares. At the 2017 annual meeting, shareholders approved the 2017 Omnibus Incentive Plan, which provided that no further awards would be made under the 2003 Plan.    
Granted 242,000    
Exercised 187,000    
Forfeited 45,000    
Outstanding 10,000    
Stock Option Plan Unrecognized Compensation Expense Related to Nonvested Stock Options $ 0    
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value $ 274,000    
Stock Option Plan Intrinsic Value of Options Vested   $ 14,000 $ 35,000
Options vested 0    
v3.21.2
Employee Benefits - 2017 Omnibus Incentive Plan (Details)
12 Months Ended
Jun. 30, 2021
USD ($)
shares
Jun. 30, 2020
USD ($)
shares
Jun. 30, 2019
USD ($)
shares
Common stock reserve for issuance 132,000    
Exercised 0 10,000 0
Restricted Stock      
Equity Incentive Plan vesting percentage 20.00%    
Performance-based restricted stock      
Equity Incentive Plan vesting percentage 20.00%    
the 2017 Plan      
2017 Omnibus Incentive Plan Description The Company adopted an equity-based incentive plan in October 2017 (the 2017 Plan). Under the 2017 plan, the Company reserved for issuance 500,000 shares of common stock for awards to employees and directors, against which full value awards (stock-based awards other than stock options and stock appreciation rights) are to be counted on a 2.5-for-1 basis. The 2017 Plan authorized awards to be made to employees, officers, and directors by a committee of outside directors. The committee held the power to set vesting requirements for each award under the 2017 Plan. Under the 2017 Plan, stock awards and shares issued pursuant to exercised options may be issued from either authorized but unissued shares, or treasury shares.    
Common stock reserve for issuance 500,000    
Full value awards basis 2.5    
Granted 79,500    
Exercised 0    
Forfeited 0    
Outstanding 79,500    
Unrecognized compensation cost | $ $ 489,000    
Options vested   0 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 728,000    
Stock Option Plan Intrinsic Value of Options Vested | $ $ 87,000    
Options Exercisable, Number 0    
Full value awards issued 18,925 15,525 15,000
Full value awards vested 9,770 7,080 4,200
Period for recognition of compensation expense from date of grant on pro rata basis 5 years    
Share based compensation expense | $ $ 351,000 $ 293,000 $ 189,000
Unvested compensation cost for full value awards | $ $ 1,500,000    
the 2017 Plan | Restricted Stock      
Equity Incentive Plan vesting percentage 20.00%    
the 2017 Plan | Performance-based restricted stock      
Equity Incentive Plan vesting percentage 20.00%    
Achievement of specified profitability targets period 3 years    
v3.21.2
Employee Benefits - Schedule of Share-based Compensation, Stock Options, Activity (Details) - $ / shares
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Outstanding at beginning of year      
Weighted Average Price $ 33.22 $ 26.35 $ 22.18
Number 60,500 51,000 33,500
Granted      
Weighted Average Price $ 34.91 $ 37.40 $ 34.35
Number 29,000 19,500 17,500
Exercised      
Weighted Average Price   $ 6.38  
Number   10,000  
Outstanding at year-end      
Weighted Average Price $ 33.77 $ 33.22 $ 26.35
Number 89,500 60,500 51,000
Options exercisable at year-end      
Weighted Average Price $ 29.79 $ 26.31 $ 14.73
Number 29,000 18,900 20,700
v3.21.2
Employee Benefits - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) - $ / shares
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Employee Benefits      
Expected dividend yield 1.83% 1.60% 1.51%
Expected volatility 27.72% 22.55% 20.39%
Risk-free interest rate 1.14% 1.55% 2.67%
Weighted-average expected life (years) 10 years 10 years 10 years
Weighted-average fair value of options granted during the year $ 9.19 $ 8.81 $ 8.78
v3.21.2
Employee Benefits - Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable (Details)
12 Months Ended
Jun. 30, 2021
$ / shares
shares
38 mo.  
Weighted Average Remaining Contractual Life 38 months
Options Outstanding, Number | shares 10,000
Options Outstanding, Weighted Average Exercise Price $ 17.55
Options Exercisable, Number | shares 10,000
Options Exercisable, Weighted Average Exercise Price $ 17.55
79 mo.  
Weighted Average Remaining Contractual Life 79 months
Options Outstanding, Number | shares 13,500
Options Outstanding, Weighted Average Exercise Price $ 37.31
Options Exercisable, Number | shares 8,100
Options Exercisable, Weighted Average Exercise Price $ 37.31
90 mo.  
Weighted Average Remaining Contractual Life 90 months
Options Outstanding, Number | shares 17,500
Options Outstanding, Weighted Average Exercise Price $ 34.35
Options Exercisable, Number | shares 7,000
Options Exercisable, Weighted Average Exercise Price $ 34.35
104 mo.  
Weighted Average Remaining Contractual Life 104 months
Options Outstanding, Number | shares 19,500
Options Outstanding, Weighted Average Exercise Price $ 37.40
Options Exercisable, Number | shares 3,900
Options Exercisable, Weighted Average Exercise Price $ 37.40
115 mo.  
Weighted Average Remaining Contractual Life 115 months
Options Outstanding, Number | shares 29,000
Options Outstanding, Weighted Average Exercise Price $ 34.91
Options Exercisable, Weighted Average Exercise Price $ 34.91
v3.21.2
Income Taxes - Schedule of net deferred tax assets (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Jun. 30, 2020
Income Taxes    
Provision for losses on loans $ 7,626 $ 5,802
Accrued compensation and benefits 826 825
NOL carry forwards acquired 147 149
Minimum Tax Credit   130
Unrealized loss on other real estate 180 257
Other 182 26
Total deferred tax assets 8,961 7,189
Purchase accounting adjustments 210 64
Depreciation 1,842 1,665
FHLB stock dividends 120 120
Prepaid expenses 283 259
Unrealized gain on available for sale securities 821 1,265
Other 1,193 104
Total deferred tax liabilities 4,469 3,477
Net deferred tax assets $ 4,492 $ 3,712
v3.21.2
Income Taxes - Reconciliation of Income Tax Expense at the Statutory Rate to Actual Income Tax (Details) - USD ($)
$ in Thousands
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Tax at statutory rate $ 12,538 $ 7,231 $ 7,550
Actual provision 12,525 6,887 7,047
Increase (reduction) in taxes      
Nontaxable Municipal Income (453) (444) (400)
State tax, net of Federal benefit 1,018 299 487
Cash surrender value of Bank-owned life insurance (378) (214) (279)
Tax Credit Benefits (11) (48) (270)
Other, net $ (189) $ 63 $ (41)
v3.21.2
Income Taxes - Additional Information (Details) - USD ($)
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Income Taxes      
Interest or penalties on income taxes $ 0    
Federal Net Operating Loss Carryforwards 706,000    
State Net Operating Loss Carryforwards $ 0    
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent 21.00% 21.00% 21.00%
v3.21.2
Accumulated Other Comprehensive Income (AOCI) - Components of AOCI (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2018
Accumulated Other Comprehensive Income (Loss) [Line Items]        
AOCI, included in stockholders's equity $ 3,707 $ 5,711    
Tax effect (825) (1,264)    
Net of tax amount 283,423 258,347 $ 238,392 $ 200,694
Net unrealized gain on securities available-for-sale        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
AOCI, included in stockholders's equity 3,734 5,744    
Net unrealized gain on securities available-for-sale securities for which a portion of an other-than-temporary impairment has been recognized in income        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
AOCI, included in stockholders's equity (1) (1)    
Unrealized gain from defined benefit pension plan        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
AOCI, included in stockholders's equity (26) (32)    
Accumulated Other Comprehensive Income (Loss)        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Net of tax amount $ 2,882 $ 4,447 $ 1,247 $ (2,345)
v3.21.2
Accumulated Other Comprehensive Income (AOCI) - Reclassification out of AOCI (Details) - USD ($)
$ in Thousands
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Unrealized gain on securities available-for-sale $ 4,875  
Reclassification out of Accumulated Other Comprehensive Income    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Total reclassified amount before tax 96 $ 6
Reclassification out of Accumulated Other Comprehensive Income | Net realized gains on sale of AFS securities    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Unrealized gain on securities available-for-sale 90  
Reclassification out of Accumulated Other Comprehensive Income | Compensation and benefits (included in computation of net periodic pension costs)    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Amortization of defined benefit pension items: 6 6
Reclassification out of Accumulated Other Comprehensive Income | Provision for income tax    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Tax benefit 20 1
Reclassification out of Accumulated Other Comprehensive Income | Net Income    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Total reclassification out of AOCI $ 76 $ 5
v3.21.2
Stockholders' Equity and Regulatory Capital (Details)
$ in Thousands
Jun. 30, 2021
USD ($)
Jun. 30, 2020
USD ($)
Southern Bank | Total Capital (to Risk-Weighted Assets)    
Capital $ 308,482 $ 271,137
Capital to Risk Weighted Assets 13.96 12.88
Capital Required for Capital Adequacy $ 176,816 $ 168,355
Capital Required for Capital Adequacy to Risk Weighted Assets 8.00 8.00
Capital Required to be Well Capitalized $ 221,019 $ 210,444
Capital Required to be Well Capitalized to Risk Weighted Assets 10.00 10.00
Southern Bank | Tier I Capital (to Risk-Weighted Assets)    
Capital $ 282,638 $ 244,822
Capital to Risk Weighted Assets 12.79 11.63
Capital Required for Capital Adequacy $ 132,612 $ 126,266
Capital Required for Capital Adequacy to Risk Weighted Assets 6.00 6.00
Capital Required to be Well Capitalized $ 176,816 $ 168,355
Capital Required to be Well Capitalized to Risk Weighted Assets 8.00 8.00
Southern Bank | Tier I Capital (to Average Assets)    
Capital $ 282,638 $ 244,822
Capital to Risk Weighted Assets 10.43 9.66
Capital Required for Capital Adequacy $ 108,369 $ 101,370
Capital Required for Capital Adequacy to Risk Weighted Assets 4.00 4.00
Capital Required to be Well Capitalized $ 135,461 $ 126,713
Capital Required to be Well Capitalized to Risk Weighted Assets 5.00 5.00
Southern Bank | Common Equity Tier I Capital (to Risk-Weighted Assets)    
Capital $ 282,638 $ 244,822
Capital to Risk Weighted Assets 12.79 11.63
Capital Required for Capital Adequacy $ 99,459 $ 94,700
Capital Required for Capital Adequacy to Risk Weighted Assets 4.50 4.50
Capital Required to be Well Capitalized $ 143,663 $ 136,789
Capital Required to be Well Capitalized to Risk Weighted Assets 6.50 6.50
Consolidated | Total Capital (to Risk-Weighted Assets)    
Capital $ 315,490 $ 278,924
Capital to Risk Weighted Assets 14.18 13.17
Capital Required for Capital Adequacy $ 177,938 $ 169,473
Capital Required for Capital Adequacy to Risk Weighted Assets 8.00 8.00
Consolidated | Tier I Capital (to Risk-Weighted Assets)    
Capital $ 287,701 $ 252,609
Capital to Risk Weighted Assets 12.93 11.92
Capital Required for Capital Adequacy $ 133,453 $ 127,105
Capital Required for Capital Adequacy to Risk Weighted Assets 6.00 6.00
Consolidated | Tier I Capital (to Average Assets)    
Capital $ 287,701 $ 252,609
Capital to Risk Weighted Assets 10.61 9.95
Capital Required for Capital Adequacy $ 108,505 $ 101,528
Capital Required for Capital Adequacy to Risk Weighted Assets 4.00 4.00
Consolidated | Common Equity Tier I Capital (to Risk-Weighted Assets)    
Capital $ 272,458 $ 237,467
Capital to Risk Weighted Assets 12.25 11.21
Capital Required for Capital Adequacy $ 100,090 $ 95,328
Capital Required for Capital Adequacy to Risk Weighted Assets 4.50 4.50
v3.21.2
Stockholders' Equity and Regulatory Capital - Additional Information (Details)
$ in Thousands
12 Months Ended
Jun. 30, 2021
USD ($)
Apr. 30, 2021
Jun. 30, 2020
USD ($)
Apr. 30, 2020
Jan. 01, 2020
USD ($)
Capital conservation buffer ratio 2.5        
Amount of distributions as dividend of equity $ 42,900        
Assets $ 2,700,530   $ 2,542,157    
Minimum          
Assets         $ 10,000,000
Tier I Capital (to Risk-Weighted Assets) | Maximum          
Minimum leverage ratio         9
Community Bank Leverage Ratio | Maximum          
Ratio of risk-based capital 9        
2020 Year | Community Bank Leverage Ratio | Minimum          
Minimum leverage ratio       8  
2021 Year | Community Bank Leverage Ratio | Minimum          
Minimum leverage ratio   8.5      
2021 Year After | Community Bank Leverage Ratio | Minimum          
Minimum leverage ratio       9  
v3.21.2
Commitments and Credit Risk - Standby Letters of Credit: Letters of Credit (Details) - USD ($)
$ in Millions
Jun. 30, 2021
Jun. 30, 2020
Commitments and Credit Risk    
Letters of credit outstanding amount $ 4.0 $ 3.2
v3.21.2
Commitments and Credit Risk - Off-balance-sheet and Credit Risk (Details) - USD ($)
$ in Millions
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Unused Commitments to Extend Credit $ 491.6 $ 416.2
Commitments to originate fixed rate loans $ 134.5  
Weighted-average rate 4.04%  
Commitments extended period 30 days  
Diversified portfolio, loans $ 801.6  
Minimum    
Term 12 months 12 months
Commitments to originate fixed rate loans rates 2.25%  
Maximum    
Term 24 months 24 months
Commitments to originate fixed rate loans rates 5.50%  
v3.21.2
Earnings Per Share - Basic and Diluted Earnings Per Common Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Jun. 30, 2021
Mar. 31, 2021
Dec. 31, 2020
Sep. 30, 2020
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Earnings Per Share                      
Net Income                 $ 47,180 $ 27,545 $ 28,904
Less: distributed earnings allocated to participating securities                 (18)    
Less: undistributed earnings allocated to participating securities                 (135)    
Net income available to common shareholders                 $ 47,027 $ 27,545 $ 28,904
Denominator for basic earnings per share - Weighted-average shares outstanding                 9,007,814 9,189,876 9,193,235
Effect of dilutive securities stock options or awards                 2,923 9,293 10,674
Denominator for diluted earnings per share                 9,010,737 9,199,169 9,203,909
Basic earnings per share available to common stockholders $ 1.53 $ 1.27 $ 1.33 $ 1.09 $ 0.81 $ 0.76 $ 0.82 $ 0.76 $ 5.22 $ 3.00 $ 3.14
Basic earnings per share available to common stockholders $ 1.53 $ 1.27 $ 1.32 $ 1.09 $ 0.81 $ 0.76 $ 0.81 $ 0.76 $ 5.22 $ 2.99 $ 3.14
v3.21.2
Earnings Per Share - Additional information (Details) - shares
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Earnings Per Share      
Options Outstanding With An Exercise Price In Excess Of The Market Price 99,825 50,500 31,000
v3.21.2
Acquisitions - Additional information (Details) - USD ($)
3 Months Ended 12 Months Ended
May 22, 2020
Jun. 30, 2021
Mar. 31, 2021
Dec. 31, 2020
Sep. 30, 2020
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Noninterest expense   $ 14,201,000 $ 13,528,000 $ 13,046,000 $ 13,272,000 $ 12,196,000 $ 12,667,000 $ 12,066,000 $ 10,963,000 $ 54,047,000 $ 54,452,000 $ 47,892,000
Goodwill   $ 14,089,000               14,089,000 14,089,000  
Bargain purchase gain                     $ 123,000  
Diversified portfolio, loans                   $ 801,600,000    
Central Federal Bancshares                        
Value of all cash transaction $ 21,900,000                      
Cash consideration 9,100,000                      
Acquisition related costs 1,200,000                      
Noninterest expense 1,200,000                      
Cash 21,900,000                      
Purchase price allocated to core deposit intangible 540,000                      
Goodwill 0                      
Bargain purchase gain $ 123,000                      
Core Deposit Intangible Assets Amortization Period 6 years                      
Diversified portfolio, loans $ 52,100,000                      
Fair value of portfolio 662,000                      
Purchased credit-impaired loans $ 0                      
v3.21.2
Acquisitions - Based on Valuations of Fair Value of Tangible and Intangible Assets Acquired and Liabilities Assumed (Details) - USD ($)
12 Months Ended
May 22, 2020
Jun. 30, 2021
Jun. 30, 2020
Bargain purchase gain     $ (123,000)
Central Federal Bancshares      
Cash $ 21,900,000    
Bargain purchase gain $ (123,000)    
Central Federal Bancshares | Fair Value of Consideration Transferred      
Cash   $ 21,942,000  
Cash and cash equivalents   12,862,000  
Investment securities   4,355,000  
Loans   51,449,000  
Premises and equipment   723,000  
Identifiable intangible assets   540,000  
Miscellaneous other assets   639,000  
Deposits   (46,720,000)  
Miscellaneous other liabilities   (1,783,000)  
Total identifiable net assets   22,065,000  
Bargain purchase gain   $ (123,000)  
v3.21.2
Fair Value Measurements - Fair value of Assets Measured on a Recurring Basis and Nonrecurring Basis (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Jun. 30, 2020
Nonrecurring Measurements    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreclosed and repossessed assets held for sale $ 280 $ 2,211
Level 3 | Nonrecurring Measurements    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreclosed and repossessed assets held for sale 280 2,211
Obligations of states and political subdivisions    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale Securities   41,988
Obligations of states and political subdivisions | Recurring Measurements    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale Securities 47,696  
Obligations of states and political subdivisions | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale Securities   41,988
Obligations of states and political subdivisions | Level 2 | Recurring Measurements    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale Securities 47,696  
Corporate Obligations | Recurring Measurements    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale Securities 20,311 6,659
Corporate Obligations | Level 2 | Recurring Measurements    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale Securities 20,311 6,659
Other securities    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale Securities   965
Other securities | Recurring Measurements    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale Securities 672  
Other securities | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale Securities   965
Other securities | Level 2 | Recurring Measurements    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale Securities 672  
Residential MBS issued by governmental sponsored enterprises (GSEs)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale Securities   126,912
Residential MBS issued by governmental sponsored enterprises (GSEs) | Recurring Measurements    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale Securities 138,341  
Residential MBS issued by governmental sponsored enterprises (GSEs) | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale Securities   $ 126,912
Residential MBS issued by governmental sponsored enterprises (GSEs) | Level 2 | Recurring Measurements    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale Securities $ 138,341  
v3.21.2
Fair Value Measurements - Losses Recognized on Assets Measured on a Nonrecurring Basis (Details) - USD ($)
$ in Thousands
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Nonrecurring Measurements    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total losses on assets measured on a non-recurring basis $ (44) $ (1,009)
v3.21.2
Fair Value Measurements - Unobservable (Level 3) inputs (Details) - Nonrecurring Measurements - Level 3 - Foreclosed and repossessed assets - USD ($)
$ in Thousands
12 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fair Value Measurements Nonrecurring Unobservable Inputs $ 280 $ 2,211
Third party appraisal    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fair Value Measurements Nonrecurring Valuation Technique Third party appraisal Third party appraisal
Third party appraisal | Minimum    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fair Value Measurements Nonrecurring Range of discounts Applied 7.20%  
Third party appraisal | Marketability discount    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fair Value Measurements Nonrecurring Unobservable Inputs Marketability discount Marketability discount
Fair Value Measurements Nonrecurring Range of discounts Applied 37.10%  
Fair Value Measurements Nonrecurring Weighted Average Discount Applied   15.7
Third party appraisal | Marketability discount | Minimum    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fair Value Measurements Nonrecurring Range of discounts Applied   8.00%
Third party appraisal | Marketability discount | Maximum    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fair Value Measurements Nonrecurring Range of discounts Applied 80.60% 56.90%
v3.21.2
Fair Value Measurements - Schedule of financial instruments (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Jun. 30, 2020
Financial assets    
Cash and cash equivalents $ 123,592 $ 54,245
Interest-bearing time deposits 979 974
Stock in FHLB 5,873 6,390
Stock in Federal Reserve Bank of St. Louis 5,031 4,363
Loans receivable, net 2,200,244 2,141,929
Accrued interest receivable 10,079 12,116
Financial liabilities    
Deposits 2,330,803 2,184,847
Advances from FHLB 57,529 70,024
Accrued interest payable 779 1,646
Subordinated debt 15,243 15,142
Level 1    
Financial assets    
Cash and cash equivalents 123,592 54,245
Financial liabilities    
Deposits 1,768,217 1,508,740
Level 2    
Financial assets    
Interest-bearing time deposits 979 974
Stock in FHLB 5,873 6,390
Stock in Federal Reserve Bank of St. Louis 5,031 4,363
Accrued interest receivable 10,079 12,116
Financial liabilities    
Advances from FHLB 58,587 72,136
Accrued interest payable 779 1,646
Level 3    
Financial assets    
Loans receivable, net 2,218,762 2,143,823
Financial liabilities    
Deposits 565,123 676,816
Subordinated debt $ 15,468 $ 11,511
v3.21.2
Condensed Parent Company Only Financial Statements - Balance Sheets (Details) - USD ($)
$ in Thousands
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2018
Cash and cash equivalents $ 123,592 $ 54,245 $ 35,400 $ 26,326
TOTAL ASSETS 2,700,530 2,542,157    
Subordinated debt (Note 8) 15,243 15,142    
TOTAL LIABILITIES 2,417,107 2,283,810    
Stockholders' equity 283,423 258,347    
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 2,700,530 2,542,157    
Parent Company        
Cash and cash equivalents 1,193 4,576 $ 8,149 $ 8,383
Other Assets 14,380 13,823    
Investment in common stock of Bank 283,500 255,601    
TOTAL ASSETS 299,073 274,000    
Accrued expenses and other liabilities 407 511    
Subordinated debt (Note 8) 15,243 15,142    
TOTAL LIABILITIES 15,650 15,653    
Stockholders' equity 283,423 258,347    
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 299,073 $ 274,000    
v3.21.2
Condensed Parent Company Only Financial Statements - Statements of Income (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Jun. 30, 2021
Mar. 31, 2021
Dec. 31, 2020
Sep. 30, 2020
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Interest income $ 27,532 $ 27,100 $ 27,871 $ 26,972 $ 26,047 $ 25,186 $ 24,207 $ 22,042 $ 109,475 $ 107,052 $ 97,482
Interest expense 3,586 3,951 4,344 4,908 7,054 6,632 6,139 4,875 16,789 26,916 24,700
Net interest income 23,946 23,149 23,527 22,064 18,993 18,554 18,068 17,167 92,686 80,136 72,782
Bargain purchase gain                   123  
Income tax expense 3,529 3,096 3,153 2,747 1,854 1,725 1,802 1,666 12,525 6,887 7,047
NET INCOME (LOSS) $ 13,688 $ 11,458 $ 12,048 $ 9,986 $ 7,556 $ 7,094 $ 7,454 $ 6,800 47,180 27,545 28,904
Parent Company                      
Interest income                 13 27 25
Interest expense                 534 899 1,079
Net interest income                 (521) (872) (1,054)
Dividends from Bank                 12,000 34,000 23,000
Bargain purchase gain                   123  
Operating expenses                 599 1,529 827
Income before income taxes and equity in undistributed income of the Bank                 10,880 31,722 21,119
Income tax expense                 235 292 358
Income before equity in undistributed income of the Bank                 11,115 32,014 21,477
Equity in undistributed income of the Bank                 36,065 (4,469) 7,427
NET INCOME (LOSS)                 47,180 27,545 28,904
COMPREHENSIVE INCOME                 $ 45,615 $ 30,745 $ 32,496
v3.21.2
Condensed Parent Company Only Financial Statements - Cash Flows (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Jun. 30, 2021
Mar. 31, 2021
Dec. 31, 2020
Sep. 30, 2020
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
NET INCOME $ 13,688 $ 11,458 $ 12,048 $ 9,986 $ 7,556 $ 7,094 $ 7,454 $ 6,800 $ 47,180 $ 27,545 $ 28,904
NET CASH PROVIDED BY OPERATING ACTIVITIES                 51,762 40,301 38,601
NET CASH USED IN INVESTING ACTIVITIES                 (101,918) (272,360) (112,992)
Dividends on common stock                 5,598 5,513 4,763
Exercise of stock options                   64  
NET CASH PROVIDED BY FINANCING ACTIVITIES                 119,503 250,904 83,465
Increase in cash and cash equivalents                 69,347 18,845 9,074
Cash and cash equivalents at beginning of period       54,245       26,326 54,245 35,400 26,326
Cash and cash equivalents at end of period 123,592       35,400       123,592 54,245 35,400
Parent Company                      
NET INCOME                 47,180 27,545 28,904
Equity in undistributed income of the Bank                 (36,065) 4,469 (7,427)
Other adjustments, net                 (559) (904) (635)
NET CASH PROVIDED BY OPERATING ACTIVITIES                 10,556 31,110 20,842
Investments in Bank subsidiaries                   (20,463) (10,747)
NET CASH USED IN INVESTING ACTIVITIES                   (20,463) (10,747)
Dividends on common stock                 (5,598) (5,513) (4,763)
Exercise of stock options                   64  
Payments to acquire treasury stock                 (8,341) (5,771) (1,166)
Repayments of long term debt                   (3,000) (4,400)
NET CASH PROVIDED BY FINANCING ACTIVITIES                 (13,939) (14,220) (10,329)
Increase in cash and cash equivalents                 (3,383) (3,573) (234)
Cash and cash equivalents at beginning of period       $ 4,576       $ 8,383 4,576 8,149 8,383
Cash and cash equivalents at end of period $ 1,193       $ 8,149       $ 1,193 $ 4,576 $ 8,149
v3.21.2
Quarterly Financial Data (Unaudited) - Summary of Quarterly Operating Data (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 12 Months Ended
Jun. 30, 2021
Mar. 31, 2021
Dec. 31, 2020
Sep. 30, 2020
Jun. 30, 2020
Mar. 31, 2020
Dec. 31, 2019
Sep. 30, 2019
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2019
Interest income $ 27,532 $ 27,100 $ 27,871 $ 26,972         $ 26,047 $ 25,186 $ 24,207 $ 22,042 $ 109,475 $ 107,052 $ 97,482
Interest expense 3,586 3,951 4,344 4,908         7,054 6,632 6,139 4,875 16,789 26,916 24,700
NET INTEREST INCOME 23,946 23,149 23,527 22,064         18,993 18,554 18,068 17,167 92,686 80,136 72,782
Provision for credit losses (2,615) (409) 1,000 1,000         545 491 314 682 (1,024) 6,002 2,032
Noninterest income 4,857 4,524 5,720 4,941         3,158 3,423 3,568 2,944 20,042 14,750 13,093
Noninterest expense 14,201 13,528 13,046 13,272         12,196 12,667 12,066 10,963 54,047 54,452 47,892
INCOME BEFORE INCOME TAXES 17,217 14,554 15,201 12,733         9,410 8,819 9,256 8,466 59,705 34,432 35,951
Income tax expense 3,529 3,096 3,153 2,747         1,854 1,725 1,802 1,666 12,525 6,887 7,047
NET INCOME $ 13,688 $ 11,458 $ 12,048 $ 9,986         $ 7,556 $ 7,094 $ 7,454 $ 6,800 $ 47,180 $ 27,545 $ 28,904
Basic earnings per share $ 1.53 $ 1.27 $ 1.33 $ 1.09         $ 0.81 $ 0.76 $ 0.82 $ 0.76 $ 5.22 $ 3.00 $ 3.14
Diluted earnings per share $ 1.53 $ 1.27 $ 1.32 $ 1.09         $ 0.81 $ 0.76 $ 0.81 $ 0.76 $ 5.22 $ 2.99 $ 3.14
Quarterly Operating Data                              
Interest income         $ 27,264 $ 26,220 $ 26,646 $ 26,922              
Interest expense         5,483 6,802 7,269 7,362              
NET INTEREST INCOME         21,781 19,418 19,377 19,560              
Provision for credit losses         1,868 2,850 388 896              
Noninterest income         4,358 3,229 3,674 3,489              
Noninterest expense         15,509 13,569 13,025 12,349              
Income before income taxes         8,762 6,228 9,638 9,804              
Income tax expense         $ 1,861 $ 1,129 $ 1,921 $ 1,976