10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC  20549

FORM 10-Q

(Mark One)

 X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

OR

___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number   0-23406

Southern Missouri Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Missouri	43-1665523
(State or jurisdiction of incorporation or organization)	(Employer Identification No.)

531 Vine Street       Poplar Bluff, MO	63901
(Address of principal executive offices)	(Zip Code)

(573) 778-1800

Registrant's telephone number (including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes X No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer Accelerated filer X Non-accelerated filer Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes No X

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date:

Class	Outstanding at May 11, 2015
Common Stock, Par Value $.01	7,419,666 Shares

1

SOUTHERN MISSOURI BANCORP, INC.

FORM 10-Q

INDEX

PART I.	Financial Information	PAGE NO.
Item 1.	Condensed Consolidated Financial Statements
	-      Condensed Consolidated Balance Sheets	3
	-      Condensed Consolidated Statements of Income	4
	-      Condensed Consolidated Statements of Comprehensive Income	5
	-      Condensed Consolidated Statements of Cash Flows	6
	-      Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of    Operations	34
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	50
Item 4.	Controls and Procedures	52
PART II.	OTHER INFORMATION	53
Item 1.	Legal Proceedings	53
Item 1a.	Risk Factors	53
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 3.	Defaults upon Senior Securities	53
Item 4.	Mine Safety Disclosures	53
Item 5.	Other Information	53
Item 6.	Exhibits	54
	-     Signature Page	55
	-     Tax Allocation Agreement
	-     Certifications

2

PART I:  Item 1:  Condensed Consolidated Financial Statements

SOUTHERN MISSOURI BANCORP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

MARCH 31, 2015 AND JUNE 30, 2014

	March 31, 2015		June 30, 2014
	(unaudited)
(dollars in thousands)
Cash and cash equivalents	$	20,798	$	14,932
Interest-bearing time deposits		2,698		1,655
Available for sale securities		133,637		130,222
Stock in FHLB of Des Moines		4,135		4,569
Stock in Federal Reserve Bank of St. Louis		2,340		1,424
Loans receivable, net of allowance for loan losses of     $11,743 and $9,259 at March 31, 2015 and      June 30, 2014, respectively		1,049,524		801,056
Accrued interest receivable		4,645		4,402
Premises and equipment, net		37,490		22,467
Bank owned life insurance – cash surrender value		19,549		19,123
Intangible assets, net		4,451		2,335
Goodwill		4,556		1,600
Prepaid expenses and other assets		19,035		17,637
Total assets	$	1,302,858	$	1,021,422
Deposits	$	1,056,994	$	785,801
Securities sold under agreements to repurchase		27,960		25,561
Advances from FHLB of Des Moines		65,080		85,472
Accounts payable and other liabilities		4,491		3,181
Accrued interest payable		741		569
Subordinated debt		14,635		9,727
Total liabilities		1,169,901		910,311
Preferred stock, $.01 par value, $1,000 liquidation value;     500,000 shares authorized; 20,000 shares issued and      outstanding at March 31, 2015 and June 30, 2014		20,000		20,000
Common stock, $.01 par value; 10,000,000 and 8,000,000 shares,      respectively, authorized; 7,413,666 and 3,340,440 shares,      respectively, issued at March 31, 2015 and June 30, 2014		74		33
Warrants to acquire common stock		177		177
Additional paid-in capital		36,159		23,504
Retained earnings		74,875		66,809
Accumulated other comprehensive income		1,672		588
Total stockholders' equity		132,957		111,111
Total liabilities and stockholders' equity	$	1,302,858	$	1,021,422

See Notes to Condensed Consolidated Financial Statements

3

SOUTHERN MISSOURI BANCORP, INC

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE- AND NINE-MONTH PERIODS ENDED MARCH 31, 2015 AND 2014 (Unaudited)

	Three months					Nine months
	ended					ended
	March 31,					March 31,
	2015		2014			2015		2014
(dollars in thousands)
INTEREST INCOME:
Loans	$	12,975	$	9,497		$	38,560	$	27,674
Investment securities		483		519			1,528		1,438
Mortgage-backed securities		435		286			1,298		587
Other interest-earning assets		16		14			98		20
Total interest income		13,909		10,316			41,484		29,719
INTEREST EXPENSE:
Deposits		1,756		1,493			5,060		4,447
Securities sold under agreements to repurchase		30		34			84		97
Advances from FHLB of Des Moines		301		272			973		814
Subordinated debt		125		83			379		223
Total interest expense		2,212		1,882			6,496		5,581
NET INTEREST INCOME		11,697		8,434			34,988		24,138
PROVISION FOR LOAN LOSSES		837		253			2,526		1,048
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES		10,860		8,181			32,462		23,090
NONINTEREST INCOME:
Deposit account charges and related fees		827		628			2,572		1,863
Bank card interchange income		568		355			1,660		1,014
Loan late charges		127		57			307		174
Other loan fees		191		129			437		357
Net realized gains on sale of loans		92		112			473		356
Net realized gains (losses) on sale of AFS securities		3		(2	)		6		108
Earnings on bank owned life insurance		140		126			426		384
Other income		146		57			380		153
Total noninterest income		2,094		1,462			6,261		4,409
NONINTEREST EXPENSE:
Compensation and benefits		4,541		3,215			13,313		8,878
Occupancy and equipment, net		1,424		1,045			4,414		2,807
Deposit insurance premiums		158		148			495		356
Legal and professional fees		221		321			748		1,232
Advertising		232		117			639		354
Postage and office supplies		133		169			434		440
Intangible amortization		323		186			930		467
Bank card network expense		85		586			595		909
Other operating expense		974		832			2,714		1,969
Total noninterest expense		8,091		6,619			24,282		17,412
INCOME BEFORE INCOME TAXES		4,863		3,024			14,441		10,087
INCOME TAXES		1,497		781			4,338		2,762
NET INCOME	$	3,366	$	2,243		$	10,103	$	7,325
Less: dividend on preferred shares		50		50			150		150
Net income available to common shareholders	$	3,316	$	2,193		$	9,953	$	7,175
Basic earnings per common share	$	0.45	$	0.33		$	1.36	$	1.09
Diluted earnings per common share	$	0.44	$	0.32		$	1.33	$	1.06
Dividends per common share	$	0.085	$	0.080		$	0.255	$	0.240

See Notes to Condensed Consolidated Financial Statements

4

SOUTHERN MISSOURI BANCORP, INC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE- AND NINE-MONTH PERIODS ENDED MARCH 31, 2015 AND 2014 (Unaudited)

	Three months ended						Nine months ended
	March 31,						March 31,
	2015			2014			2015			2014
(dollars in thousands)
Net income	$	3,366		$	2,243		$	10,103		$	7,325
Other comprehensive income:
Unrealized gains (losses) on securities available-for-sale		465			928			1,700			(321	)
Less:  reclassification adjustment for realized gains (losses)                  included in net income		3			(2	)		6			108
Unrealized gains on available-for-sale securities for                  which a portion of an other-than-temporary impairment                   has been recognized in income		29			293			28			294
Tax benefit (expense)		(159	)		(453	)		(637	)		50
Total other comprehensive income (loss)		332			770			1,085			(85	)
Comprehensive income	$	3,698		$	3,013		$	11,188		$	7,240

See Notes to Condensed Consolidated Financial Statements

5

SOUTHERN MISSOURI BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE-MONTH PERIODS ENDED MARCH 31, 2015 AND 2014 (Unaudited)

	March 31,
(dollars in thousands)	2015			2014
Cash Flows From Operating Activities:
Net income	$	10,103		$	7,325
Items not requiring (providing) cash:
Depreciation		1,485			1,112
Stock option and stock grant expense		99			11
Amortization of intangible assets		930			467
Amortization of purchase accounting adjustments		(1,986	)		(4	)
Increase in cash surrender value of bank owned life insurance		(426	)		(384	)
Loss on sale of foreclosed assets		11			19
Provision for loan losses		2,526			1,048
Gains realized on AFS securities		(6	)		(108	)
Net amortization of premiums and discounts on securities		687			885
Originations of loans held for sale		(11,176	)		(10,813	)
Proceeds from sales of loans held for sale		11,464			10,447
Gain on sales of loans held for sale		(473	)		(356	)
Changes in:
Accrued interest receivable		390			863
Prepaid expenses and other assets		1,563			531
Accounts payable and other liabilities		(171)			(596	)
Deferred income taxes		(744	)		(402	)
Accrued interest payable		95			(466	)
Net cash provided by operating activities		14,371			9,579
Cash flows from investing activities:
Net increase in loans		(59,777	)		(69,487	)
Net change in interest-bearing deposits		8,907			-
Proceeds from maturities of available for sale securities		14,813			6,701
Proceeds from sales of available for sale securities		14,021			36,127
Net redemptions (purchases) of Federal Home Loan Bank stock		1,361			(904	)
Net purchases of Federal Reserve  Bank of Saint Louis stock		(916	)		(249	)
Purchases of available-for-sale securities		-			(13,660	)
Purchases of premises and equipment		(4,737	)		(5,523	)
Net cash received in (paid for) acquisitions		3,221			(5,585	)
Investments in state and federal tax credits		-			(3,588	)
Proceeds from sale of fixed assets		14			-
Proceeds from sale of foreclosed assets		567			1,143
Net cash used in investing activities		(22,526	)		(55,025	)
Cash flows from financing activities:
Net increase in demand deposits and savings accounts		37,577			29,107
Net increase in certificates of deposits		12,016			611
Net increase (decrease) in securities sold under agreements to repurchase		2,399			(1,990	)
Proceeds from Federal Home Loan Bank advances		244,960			24,600
Repayments of Federal Home Loan Bank advances		(281,160	)		-
Exercise of stock options		265			87
Dividends paid on preferred stock		(150	)		(150	)
Dividends paid on common stock		(1,886	)		(1,585	)
Net cash provided by financing activities		14,021			50,680
Increase in cash and cash equivalents		5,866			5,234
Cash and cash equivalents at beginning of period		14,932			12,789
Cash and cash equivalents at end of period	$	20,798		$	18,023
Supplemental disclosures of cash flow information:
Noncash investing and financing activities:
Conversion of loans to foreclosed real estate	$	903		$	335
Conversion of foreclosed real estate to loans		58			338
Conversion of loans to repossessed assets		98			42
Cash paid during the period for:
Interest (net of interest credited)	$	2,043		$	2,085
Income taxes		3,432			2,798

See Notes to Condensed Consolidated Financial Statements

6

SOUTHERN MISSOURI BANCORP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1:  Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Securities and Exchange Commission (SEC) Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all material adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated balance sheet of Southern Missouri Bancorp, Inc. (the Company) as of June 30, 2014, has been derived from the audited consolidated balance sheet of the Company as of that date. Operating results for the three- and nine-month periods ended March 31, 2015, are not necessarily indicative of the results that may be expected for the entire fiscal year. For additional information, refer to the audited consolidated financial statements included in the Company's June 30, 2014, Form 10-K, which was filed with the SEC.

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Southern Bank (the Bank). All significant intercompany accounts and transactions have been eliminated in consolidation.  All share and per share amounts reflect, or have been restated to reflect, the two-for-one common stock split in the form of a common stock dividend paid on January 30, 2015.

Note 2:  Organization and Summary of Significant Accounting Policies

Organization. The Company, a Missouri corporation, was organized in 1994 and is the parent company of 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.

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 is subject to competition from other financial institutions. The Bank and Company are subject to regulation by certain federal and state agencies and undergo periodic examinations by those regulatory authorities.

Basis of Financial Statement Presentation. The 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 principally 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 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.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, estimated fair values of purchased loans, other-than-temporary impairments (OTTI), and fair value of financial instruments.

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

7

months or less. Interest-bearing deposits in other depository institutions were $12.7 million and $8.6 million at March 31, 2015 and June 30, 2014, respectively. The deposits are held in various commercial banks with none exceeding the FDIC's deposit insurance limits, as well as at the Federal Reserve Bank of St. Louis and the Federal Home Loan Bank of Des Moines (FHLB).

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, 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 are 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 by the Company to be high risk.

When the Company does not intend to sell a debt security, and it is more likely than not the Company will not have to sell the security before recovery of its cost basis, it recognizes the credit component of an other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income. As a result, the Company's balance sheet as of the dates presented reflects the full impairment (that is, the difference between the security's amortized cost basis and fair value) on debt securities that the Company intends to sell or would more likely than not be required to sell before the expected recovery of the amortized cost basis. For available-for-sale debt securities 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 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.

Federal Reserve Bank and Federal Home Loan Bank Stock. The Bank is a member of the FHLB system and the Federal Reserve Bank of St. Louis. 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 and 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. 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 allowance for losses on loans represents management's best estimate of losses probable in the existing loan portfolio. The allowance for losses on loans 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 flow (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. The provision for losses on loans is determined based on management's assessment of several factors: reviews and evaluations of specific loans, changes in the nature and volume of the loan portfolio, current economic conditions and the related impact on specific borrowers and industry groups, historical loan loss experience, the level of classified and nonperforming loans and the results of regulatory examinations.

8

Loans are considered impaired if, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Depending on a particular loan's circumstances, we measure impairment of a loan based upon either the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's observable market price, or the fair value of the collateral less estimated costs to sell if the loan is collateral dependent. Valuation allowances are established for collateral-dependent impaired loans for the difference between the loan amount and fair value of collateral less estimated selling costs. For impaired loans that are not collateral dependent, a valuation allowance is established for the difference between the loan amount and the present value of expected future cash flows discounted at the historical effective interest rate or the observable market price of the loan. Impairment losses are recognized through an increase in the required allowance for loan losses. Cash receipts on loans deemed impaired are recorded based on the loan's separate status as a nonaccrual loan or an accrual status loan.

Some loans are accounted for in accordance with ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. For these loans ("purchased credit impaired loans"), the Company recorded a fair value discount which established a new book value (see Note 4). For these loans, we determined the contractual amount and timing of undiscounted principal and interest payments (the "undiscounted contractual cash flows"), and estimated the amount and timing of undiscounted expected principal and interest payments, including expected prepayments (the "undiscounted expected cash flows"). Under acquired impaired loan accounting, the difference between the undiscounted contractual cash flows and the undiscounted expected cash flows is the nonaccretable difference. The nonaccretable difference is an estimate of the loss exposure of principal and interest related to the purchased credit impaired loans, and the amount is subject to change over time based on the performance of the loans. The carrying value of purchased credit impaired loans is initially determined as the discounted expected cash flows. The excess of expected cash flows at acquisition over the initial fair value of the purchased credit impaired loans is referred to as the "accretable yield" and is recorded as interest income over the estimated life of the acquired loans using the level-yield method, if the timing and amount of the future cash flows is reasonably estimable. The carrying value of purchased credit impaired loans is reduced by payments received, both principal and interest, and increased by the portion of the accretable yield recognized as interest income. Subsequent to acquisition, the Company evaluates the purchased credit impaired loans on a quarterly basis. Increases in expected cash flows compared to those previously estimated increase the accretable yield and are recognized as interest income prospectively. Decreases in expected cash flows compared to those previously estimated decrease the accretable yield and may result in the establishment of an allowance for loan losses and a provision for loan losses. Purchased credit impaired loans are generally considered accruing and performing loans, as the loans accrete interest income over the estimated life of the loan when expected cash flows are reasonably estimable. Accordingly, purchased credit impaired loans that are contractually past due are still considered to be accruing and performing as long as there is an expectation that the estimated cash flows will be received. If the timing and amount of cash flows is not reasonably estimable, the loans may be classified as nonaccrual loans.

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.

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. 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.

9

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.

Intangible Assets.  The Company's intangible assets at March 31, 2015 included gross core deposit intangibles of $5.9 million with $1.6 million accumulated amortization, gross other identifiable intangibles of $3.8 million with accumulated amortization of $3.7 million, and mortgage servicing rights of $84,000. At June 30, 2014, the Company's intangible assets included gross core deposit intangibles of $2.9 million with $875,000 accumulated amortization, and gross other identifiable intangibles of $3.8 million with accumulated amortization of $3.5 million, and mortgage servicing rights of $38,000.  The Company's core deposit and other intangible assets are being amortized using the straight line method, over periods ranging from five to fifteen years, with amortization expense expected to be approximately $323,000 in the remainder of fiscal 2015, $1.0 million in fiscal 2016, $911,000 in fiscal 2017, $911,000 in fiscal 2018,  $655,000 in fiscal 2019 and $541,000 thereafter.

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.

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 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.

Incentive Plan.The Company accounts for its Management and Recognition Plan, 2003 Stock Option and Incentive Plan and 2008 Equity Incentive Plan 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 aggregate purchase price and the fair value on the date the shares are considered earned represents a tax benefit to the Company and is recorded as an adjustment to additional paid in capital

Outside Directors' Retirement.Southern 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.

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

Stock Options. The amount of 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 Common 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 (stock options and warrants) outstanding during each period.

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.

Reclassification. Certain amounts included in the prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on net income.

The following paragraphs summarize the expected impact of new accounting pronouncements:

In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-05, "Customer's Accounting for Fees Paid in a Cloud Computing Arrangement," to provide guidance to customers about whether a cloud computing arrangement includes a software license. Arrangements containing a license should be recorded as consistent with the acquisition of software licenses, whereas arrangements that do not include a software license should be recorded as consistent with the accounting for service contracts. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. The Company is reviewing the ASU, but does not expect adoption will result in a significant effect on the Company's consolidated financial statements.

In February 2015, FASB issued ASU 2015-02, "Amendments to the Consolidation Analysis," requiring an evaluation of whether certain legal entities should be consolidated and modifying the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. The Company is reviewing the ASU.

In August 2014, FASB issued ASU 2014-14, "Troubled Debt Restructurings by Creditors," to address the classification of certain foreclosed mortgage loans held by creditors that are either fully or partially guaranteed under government programs (e.g., FHA, VA, HUD). The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. The Company is reviewing the ASU, but does not expect adoption will result in a significant effect on the Company's consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers," superseding most industry-specific revenue recognition guidance in the FASB Accounting Standards Codification. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance identifies specific steps that entities should apply in order to achieve this principle. The ASU was originally effective for interim and annual periods beginning after December 15, 2016, and must be applied retrospectively, but in April 2015, FASB issued an exposure draft proposing deferral of the effective date for public entities to interim and annual periods beginning after December 15, 2017. The Company remains in the process of evaluating the impact of the ASU's adoption on the Company's consolidated financial statements.

In January 2014, the FASB issued ASU 2014-04, "Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure," to reduce diversity by clarifying when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. Adoption of the ASU is not expected to have a significant effect on the Company's consolidated financial statements.

In January 2014, the FASB issued ASU 2014-01, "Accounting for Investments in Qualified Affordable Housing Projects," to permit entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. The ASU modifies the conditions that an entity must meet to be eligible to use a method other than the equity or cost methods to account for qualified affordable housing project investments. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. The Company is reviewing the ASU, but does not expect adoption will result in a significant effect on the Company's consolidated financial statements.

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Note 3:  Securities

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

	March 31, 2015
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
(dollars in thousands)	Cost		Gains		Losses			Value
Investment and mortgage backed securities:
U.S. government-sponsored enterprises (GSEs)	$	15,918	$	50	$	(96	)	$	15,872
State and political subdivisions		40,481		2,051		(46	)		42,486
Other securities		3,215		280		(689	)		2,806
Mortgage-backed: GSE residential		71,393		1,091		(11	)		72,473
Total investments and mortgage-backed securities	$	131,007	$	3,472	$	(842	)	$	133,637

	June 30, 2014
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
(dollars in thousands)	Cost		Gains		Losses			Value
Investment and mortgage backed securities:
U.S. government-sponsored enterprises (GSEs)	$	24,607	$	21	$	(554	)	$	24,074
State and political subdivisions		43,632		1,856		(131	)		45,357
Other securities		3,294		264		(918	)		2,640
Mortgage-backed GSE residential		57,780		578		(207	)		58,151
Total investments and mortgage-backed securities	$	129,313	$	2,719	$	(1,810	)	$	130,222

The amortized cost and estimated fair value of investment and mortgage-backed securities available for sale, 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 penalties.

	March 31, 2015
			Estimated
(dollars in thousands)	Amortized		Fair
	Cost		Value
Within one year	$	1,535	$	1,541
After one year but less than five years		15,551		15,634
After five years but less than ten years		17,362		17,856
After ten years		25,166		26,133
Total investment securities		59,614		61,164
Mortgage-backed securities		71,393		72,473
Total investments and mortgage-backed securities	$	131,007	$	133,637

The following tables show our 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 March 31, 2015 and June 30, 2014:

	March 31, 2015
	Less than 12 months				More than 12 months				Total
			Unrealized				Unrealized				Unrealized
(dollars in thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
U.S. government-sponsored enterprises (GSEs)	$	1,996	$	2	$	7,895	$	94	$	9,891	$	96
Obligations of state and political subdivisions		1,530		3		1,500		43		3,030		46
Other securities		-		-		1,199		689		1,199		689
Mortgage-backed securities		2,861		11		-		-		2,861		11
Total investments and mortgage-backed securities	$	6,387	$	16	$	10,594	$	826	$	16,981	$	842

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	June 30, 2014
	Less than 12 months				More than 12 months				Total
			Unrealized				Unrealized				Unrealized
(dollars in thousands)	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
U.S. government-sponsored enterprises (GSEs)	$	2,676	$	26	$	18,451	$	528	$	21,127	$	554
Obligations of state and political subdivisions		1,863		3		4,938		128		6,801		131
Other securities		476		2		532		916		1,008		918
Mortgage-backed securities		8,882		77		1,649		130		10,531		207
Total investments and mortgage-backed securities	$	13,897	$	108	$	25,570	$	1,702	$	39,467	$	1,810

Other securities. At March 31, 2015, there were three pooled trust preferred securities with an estimated fair value of $757,000 and unrealized losses of $681,000 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, a lack of demand or inactive market for these securities, and concerns regarding the financial institutions that issued the underlying trust preferred securities. Rules adopted by the federal banking agencies in December 2013 to implement Section 619 of the Dodd-Frank Act (the "Volcker Rule") generally prohibit banking entities from engaging in proprietary trading and from investing in, sponsoring, or having certain relationships with a hedge fund or private equity fund. All pooled trust preferred securities owned by the Company were included in a January 2014 listing of securities which the agencies considered to be grandfathered with regard to these prohibitions; as such, banking entities are permitted to retain their interest in these securities, provided the interest was acquired on or before December 10, 2013, unless acquired pursuant to a merger or acquisition.

The March 31, 2015, cash flow analysis for these three 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 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 three securities included annualized prepayments of 1%; no recoveries on issuers currently in default; recoveries of zero to 49 percent on currently deferred issuers within the next two years; new defaults of 50 basis points annually; and recoveries of 10% of new defaults.

One of these three securities has continued to receive cash interest payments in full since our purchase; the second of the three securities 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 interest payments during fiscal 2014. Our cash flow analysis indicates that interest payments are expected to continue for these two securities. Because the Company does not intend to sell these securities and it is not more-likely-than-not that the Company will be required to sell these securities prior to recovery of their amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2015.

For the last of these three securities, the Company is receiving PIK, in lieu of cash interest. Pooled trust preferred securities generally allow, under the terms of the issue, for issuers included in the pool to defer interest for up to five consecutive years. After five years, if not cured, the issuer is considered to be in default and the trustee may demand payment in full of principal and accrued interest. Issuers are also considered to be in default in the event of the failure of the issuer or a subsidiary bank. Both deferred and defaulted issuers are considered non-performing, and the trustee calculates, on a quarterly or semi-annual basis, certain coverage tests prior to the payment of cash interest to owners of the various tranches of the securities. The tests must show that performing collateral is sufficient to meet requirements for senior tranches, both in terms of cash flow and collateral value, before cash interest can be paid to subordinate tranches. If the tests are not met, available cash flow is diverted to pay down the principal balance of senior tranches until the coverage tests are met, before cash interest payments to subordinate tranches may resume. The Company is receiving PIK for this security due to failure of the required coverage tests described above at senior tranche levels of the security. The risk to holders of a tranche of a security in PIK status is that the pool's total cash flow will not be sufficient to repay all principal and accrued interest related to the investment. The impact of payment of PIK to subordinate tranches is to strengthen the position of senior tranches, by reducing the senior tranches' principal balances relative to available collateral and cash flow, while increasing principal balances, decreasing cash flow, and increasing credit risk to the tranches receiving PIK. For this security in receipt of PIK, the principal balance is increasing, cash flow has stopped, and, as a result, credit risk is increasing. The Company expects this security to remain in PIK status for a period of 1.5 years. Despite these facts, because the Company does not intend to sell this

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security and it is not more-likely-than-not that the Company will be required to sell this security prior to recovery of its amortized cost basis, which may be maturity, the Company does not consider this investment to be other-than-temporarily impaired at March 31, 2015.

At December 31, 2008, analysis of a fourth pooled trust preferred security indicated other-than-temporary impairment (OTTI). The loss recognized at that time reduced the amortized cost basis for the security, and as of March 31, 2015, the estimated fair value of the security exceeds the new, lower amortized cost basis.

The Company does not believe any other individual unrealized loss as of March 31, 2015, represents OTTI. However, the Company could be required to recognize OTTI losses in future periods with respect to its available for sale investment securities portfolio. The amount and timing of any additional OTTI will depend on the decline in the underlying cash flows of the securities. Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss recognized in the period the other-than-temporary impairment is identified.

Credit losses recognized on investments. As described above, one of the Company's investments in trust preferred securities experienced fair value deterioration due to credit losses, but is not otherwise other-than-temporarily impaired. During fiscal 2009, the Company adopted ASC 820, formerly FASB Staff Position 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly."  The following table provides information about the trust preferred security for which only a credit loss was recognized in income and other losses are recorded in other comprehensive income (loss) for the nine-month periods ended March 31, 2015 and 2014.

	Accumulated Credit Losses
	Nine-Month Period Ended
(dollars in thousands)	March 31,
	2015			2014
Credit losses on debt securities held
Beginning of period	$	375		$	375
Additions related to OTTI losses not previously recognized		-			-
Reductions due to sales		-			-
Reductions due to change in intent or likelihood of sale		-			-
Additions related to increases in previously-recognized OTTI losses		-			-
Reductions due to increases in expected cash flows		(7	)		-
End of period	$	368		$	375

Note 4:  Loans and Allowance for Loan Losses

Classes of loans are summarized as follows:

(dollars in thousands)	March 31, 2015			June 30, 2014
Real Estate Loans:
Residential	$	381,323		$	303,901
Construction		69,882			40,738
Commercial		406,204			308,520
Consumer loans		45,884			35,223
Commercial loans		181,676			141,072
		1,084,969			829,454
Loans in process		(23,793	)		(19,261	)
Deferred loan fees, net		91			122
Allowance for loan losses		(11,743	)		(9,259	)
Total loans	$	1,049,524		$	801,056

The Company's lending activities consist of originating 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. The Company has also occasionally purchased loan participation interests originated by other lenders and secured by properties generally located in the states of Missouri and Arkansas.

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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.

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 the primary lending area. The majority of the multi-family residential loans that are originated by the Bank 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.

Commercial Real Estate Lending. The Company actively originates loans secured by commercial real estate including land (improved, unimproved, and farmland), strip shopping centers, retail establishments 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.

Most commercial real estate loans originated by the Company generally are based on amortization schedules of up to 20 years with monthly principal and interest payments. Generally, the interest rate received on these loans is fixed for a maturity of up to five 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 five years. For loans with interest rates that adjust, 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 secured by mortgage loans for the construction of owner occupied residential real estate or to finance speculative construction secured by 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 and have maturities ranging from six to twelve months. Once construction is completed, loans may be converted to permanent status with monthly payments using amortization schedules of up to 30 years on residential and generally up to 20 years on commercial real estate.

While the Company typically utilizes maturity periods ranging from 6 to 12 months to closely monitor the inherent risks associated with construction 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 for a construction loan is approximately nine 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 obtains interim inspections completed by an independent third party. This monitoring further allows the Company an opportunity to assess risk. At March 31, 2015, construction loans outstanding included 57 loans, totaling $9.6 million, for which a modification had been agreed to. At June 30, 2014, construction loans outstanding included 31 loans, totaling $13.1 million, for which a modification had been agreed to. All modifications were solely for the purpose of extending the maturity date due to conditions described above.  None of these modifications were executed due to financial difficulty on the part of the borrower and, therefore, the loans were not accounted for as TDRs.

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 (HELOCs), which are variable, are tied to the prime rate of interest, and are for a period of ten years.

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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.

Automobile loans originated by the Company include both direct loans and a smaller amount of indirect 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.

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.

The following tables present the balance in the allowance for loan losses and the recorded investment in loans (excluding loans in process and deferred loan fees) based on portfolio segment and impairment methods as of March 31, 2015 and June 30, 2014, and activity in the allowance for loan losses for the three- and nine-month periods ended March 31, 2015 and 2014:

	At period end and for the nine months ended March 31, 2015
	Residential			Construction		Commercial
	Real Estate			Real Estate		Real Estate			Consumer			Commercial			Total
(dollars in thousands)
Allowance for loan losses:
Balance, beginning of period	$	2,462		$	355	$	4,143		$	519		$	1,780		$	9,259
Provision charged to expense		286			511		698			216			815			2,526
Losses charged off		(24	)		-		(9	)		(54	)		(40	)		(127	)
Recoveries		10			-		40			32			3			85
Balance, end of period	$	2,734		$	866	$	4,872		$	713		$	2,558		$	11,743
Ending Balance: individually             evaluated for impairment	$	-		$	-	$	-		$	59		$	-		$	59
Ending Balance: collectively             evaluated for impairment	$	2,734		$	866	$	4,872		$	654		$	2,558		$	11,684
Ending Balance: loans acquired             with deteriorated credit quality	$	-		$	-	$	-		$	-		$	-		$	-
Loans:
Ending Balance: individually             evaluated for impairment	$	-		$	-	$	-		$	59		$	-		$	59
Ending Balance: collectively             evaluated for impairment	$	377,500		$	43,608	$	394,407		$	45,630		$	180,580		$	1,041,725
Ending Balance: loans acquired             with deteriorated credit quality	$	3,823		$	2,481	$	11,797		$	195		$	1,096		$	19,392

	For the three months ended March 31, 2015
(dollars in thousands)	Residential			Construction		Commercial
	Real Estate			Real Estate		Real Estate			Consumer			Commercial			Total
Allowance for loan losses:
Balance, beginning of period	$	2,800		$	561	$	4,564		$	736		$	2,297		$	10,958
Provision charged to expense		(54	)		305		316			(12	)		282			837
Losses charged off		(13	)		-		(8	)		(16	)		(21	)		(58	)
Recoveries		1			-		-			5			-			6
Balance, end of period	$	2,734		$	866	$	4,872		$	713		$	2,558		$	11,743

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	At period end and for the nine months ended March 31, 2014
	Residential			Construction		Commercial
(dollars in thousands)	Real Estate			Real Estate		Real Estate			Consumer			Commercial			Total
Allowance for loan losses:
Balance, beginning of period	$	1,810		$	273	$	3,602		$	472		$	2,229		$	8,386
Provision charged to expense		562			130		446			55			(145	)		1,048
Losses charged off		(150	)		-		(69	)		(51	)		(517	)		(787	)
Recoveries		15			-		1			15			9			40
Balance, end of period	$	2,237		$	403	$	3,980		$	491		$	1,576		$	8,687
Ending Balance: individually             evaluated for impairment	$	-		$	-	$	-		$	-		$	-		$	-
Ending Balance: collectively             evaluated for impairment	$	2,237		$	403	$	3,980		$	491		$	1,576		$	8,687
Ending Balance: loans acquired             with deteriorated credit quality	$	-		$	-	$	-		$	-		$	-		$	-

	For the three months ended March 31, 2014
(dollars in thousands)	Residential			Construction			Commercial
	Real Estate			Real Estate			Real Estate		Consumer			Commercial			Total
Allowance for loan losses:
Balance, beginning of period	$	2,131		$	424		$	3,787	$	496		$	2,247		$	9,085
Provision charged to expense		232			(21	)		193		23			(174	)		253
Losses charged off		(127	)		-			-		(32	)		(504	)		(663	)
Recoveries		1			-			-		4			7			12
Balance, end of period	$	2,237		$	403		$	3,980	$	491		$	1,576		$	8,687

	At June 30, 2014
	Residential		Construction		Commercial
(dollars in thousands)	Real Estate		Real Estate		Real Estate		Consumer		Commercial		Total
Allowance for loan losses:
Balance, end of period	$	2,462	$	355	$	4,143	$	519	$	1,780	$	9,259
Ending Balance: individually             evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-
Ending Balance: collectively             evaluated for impairment	$	2,462	$	355	$	4,143	$	519	$	1,780	$	9,259
Ending Balance: loans acquired             with deteriorated credit quality	$	-	$	-	$	-	$	-	$	-	$	-
Loans:
Ending Balance: individually             evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-
Ending Balance: collectively             evaluated for impairment	$	302,111	$	21,477	$	307,253	$	35,223	$	140,957	$	807,021
Ending Balance: loans acquired             with deteriorated credit quality	$	1,790	$	-	$	1,267	$	-	$	115	$	3,172

Management's opinion as to the ultimate collectability of loans is subject to estimates regarding future cash flows from operations and the value of property, real and personal, pledged as collateral. These estimates are affected by changing economic conditions and the economic prospects of borrowers.

The allowance for loan losses is maintained at a level that, in management's judgment, is adequate to cover probable credit losses inherent in the loan portfolio at the balance sheet date. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when an amount is determined to be uncollectible, based on management's analysis of expected cash flow (for non-collateral-dependent loans) or collateral value (for collateral-dependent loans). Subsequent recoveries, if any, are credited to the allowance.

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The allowance for loan losses is evaluated on a regular basis by management and is based upon management's periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower's ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan.

Under the Company's methodology, loans are first segmented into 1) those comprising large groups of smaller-balance homogeneous loans, including single-family mortgages and installment loans, which are collectively evaluated for impairment, and 2) all other loans, which are individually evaluated. Those loans in the second category are 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. The loans subject to credit classification represent the portion of the portfolio subject to the greatest credit risk and where adjustments to the allowance for losses on loans as a result of provision and charge offs are most likely to have a significant impact on operations.

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 represents a probable loss or risk that should be recognized.

A loan is considered impaired when, based on current information and events, it is probable that the scheduled payments of principal or interest will not be able to be collected when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. 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. Impairment is measured on a loan-by-loan basis for commercial and agricultural loans by either the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's obtainable market price or the fair value of the collateral if the loan is collateral dependent.

Groups of loans with similar risk characteristics are collectively evaluated for impairment based on the group's historical loss experience adjusted for changes in trends, conditions and other relevant factors that affect repayment of the loans. Accordingly, individual consumer and residential loans are not separately identified for impairment measurements, unless such loans are the subject of a restructuring agreement due to financial difficulties of the borrower.

The general component covers non-impaired loans and is based on quantitative and qualitative factors. The loan portfolio is stratified into homogeneous groups of loans that possess similar loss characteristics and an appropriate loss ratio adjusted for qualitative factors is applied to the homogeneous pools of loans to estimate the incurred losses in the loan portfolio.

Included in the Company's loan portfolio are certain loans accounted for in accordance with ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. These loans were written down at acquisition to an amount estimated to be collectible. As a result, certain 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 current credit quality to prior periods. The ratios particularly affected by accounting under ASC 310-30 include the allowance for loan losses as a percentage of loans, nonaccrual loans, and nonperforming assets, and nonaccrual loans and nonperforming loans as a percentage of total loans.

18

The following tables present 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 March 31, 2015 and June 30, 2014. These tables include purchased credit impaired loans, which are reported according to risk categorization after acquisition based on the Company's standards for such classification:

	March 31, 2015
	Residential		Construction		Commercial
(dollars in thousands)	Real Estate		Real Estate		Real Estate		Consumer		Commercial
Pass	$	374,607	$	45,958	$	392,438	$	45,564	$	179,042
Watch		3,232		-		6,894		76		126
Special Mention		-		-		-		-		-
Substandard		3,484		131		6,872		244		2,508
Doubtful		-		-		-		-		-
Total	$	381,323	$	46,089	$	406,204	$	45,884	$	181,676

	June 30, 2014
	Residential		Construction		Commercial
(dollars in thousands)	Real Estate		Real Estate		Real Estate		Consumer		Commercial
Pass	$	300,926	$	21,477	$	303,853	$	35,046	$	140,138
Watch		301		-		1,014		40		362
Special Mention		-		-		-		-		-
Substandard		2,674		-		3,653		137		572
Doubtful		-		-		-		-		-
Total	$	303,901	$	21,477	$	308,520	$	35,223	$	141,072

At March 31, 2015, purchased credited impaired loans included above comprised $5.2 million of loans rated "Pass"; $6.8 million of loans rated "Watch"; no loans rated "Special Mention"; $7.4 million of loans rated "Substandard"; and no loans rated "Doubtful". At June 30, 2014,  purchased credit impaired loans accounted for $409,000 of loans rated "Pass"; no loans rated "Watch"; no loans rated "Special Mention"; $2.7 million of loans rated "Substandard"; and no loans rated "Doubtful".

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 "Special Mention", "Substandard", or "Doubtful". In addition, lending relationships over $250,000 are subject to an independent loan review following origination, and lending relationships in excess of $2.5 million are subject to an independent loan review annually, as are a sample of lending relationships between $1.0 million and $2.5 million, 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. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

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.

19

The following tables present the Company's loan portfolio aging analysis (excluding loans in process and deferred loan fees) as of March 31, 2015 and June 30, 2014.

	March 31, 2015
	30-59 Days		60-89 Days		Greater Than		Total				Total Loans		Total Loans > 90
(dollars in thousands)	Past Due		Past Due		90 Days		Past Due		Current		Receivable		Days & Accruing
Real Estate Loans:
Residential	$	1,464	$	172	$	650	$	2,286	$	379,037	$	381,323	$	127
Construction		-		-		131		131		45,958		46,089		-
Commercial		1,044		53		40		1,137		405,067		406,204		-
Consumer loans		268		118		11		397		45,487		45,884		10
Commercial loans		584		20		55		659		181,017		181,676		-
Total loans	$	3,360	$	363	$	887	$	4,610	$	1,056,566	$	1,061,176	$	137

	June 30, 2014
	30-59 Days		60-89 Days		Greater Than		Total				Total Loans		Total Loans > 90
(dollars in thousands)	Past Due		Past Due		90 Days		Past Due		Current		Receivable		Days & Accruing
Real Estate Loans:
Residential	$	1,119	$	51	$	451	$	1,621	$	302,280	$	303,901	$	106
Construction		65		-		-		65		21,412		21,477		-
Commercial		1,025		-		18		1,043		307,477		308,520		18
Consumer loans		204		30		34		268		34,955		35,223		6
Commercial loans		101		431		347		879		140,193		141,072		-
Total loans	$	2,514	$	512	$	850	$	3,876	$	806,317	$	810,193	$	130

At March 31, 2015 and June 30, 2014, no purchased credit impaired loans were greater than 90 days past due.

A loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming loans, as well as performing loans modified in troubled debt restructurings where concessions have been 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 tables below present impaired loans (excluding loans in process and deferred loan fees) as of March 31, 2015 and June 30, 2014. These tables include purchased credit impaired loans. Purchased credit impaired loans are those 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 determines it is probable, for a specific loan, that cash flows received will 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, will continue to be reported as impaired loans. In an instance where, subsequent to the acquisition, the Company determines it is probable, for a specific loan, that cash flows received will be less than the amount previously expected, the Company will allocate a specific allowance under the terms of ASC 310-10-35.

20

	March 31, 2015
	Recorded		Unpaid Principal		Specific
(dollars in thousands)	Balance		Balance		Allowance
Loans without a specific valuation allowance:
Residential real estate	$	3,900	$	4,449	$	-
Construction real estate		2,481		3,212		-
Commercial real estate		13,891		15,635		-
Consumer loans		195		207		-
Commercial loans		1,355		1,456		-
Loans with a specific valuation allowance:
Residential real estate	$	-	$	-	$	-
Construction real estate		-		-		-
Commercial real estate		-		-		-
Consumer loans		59		59		59
Commercial loans		-		-		-
Total:
Residential real estate	$	3,900	$	4,449	$	-
Construction real estate	$	2,481	$	3,212	$	-
Commercial real estate	$	13,891	$	15,635	$	-
Consumer loans	$	254	$	266	$	59
Commercial loans	$	1,355	$	1,456	$	-

	June 30, 2014
	Recorded		Unpaid Principal		Specific
(dollars in thousands)	Balance		Balance		Allowance
Loans without a specific valuation allowance:
Residential real estate	$	1,790	$	2,068	$	-
Construction real estate		-		-		-
Commercial real estate		3,383		3,391		-
Consumer loans		-		-		-
Commercial loans		115		115		-
Loans with a specific valuation allowance:
Residential real estate	$	-	$	-	$	-
Construction real estate		-		-		-
Commercial real estate		-		-		-
Consumer loans		-		-		-
Commercial loans		-		-		-
Total:
Residential real estate	$	1,790	$	2,068	$	-
Construction real estate	$	-	$	-	$	-
Commercial real estate	$	3,383	$	3,391	$	-
Consumer loans	$	-	$	-	$	-
Commercial loans	$	115	$	115	$	-

At March 31, 2015, purchased credit impaired loans included above accounted for $19.4 million of impaired loans without a specific valuation allowance; no loans with a specific valuation allowance; and $19.4 million of total impaired loans. At June 30, 2014, purchased credit impaired loans accounted for $3.2 million of impaired loans without a specific valuation allowance; no loans with a specific valuation allowance; and $3.2 million of total impaired loans.

21

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

	For the three-month period ended
	March 31, 2015
	Average
(dollars in thousands)	Investment in		Interest Income
	Impaired Loans		Recognized
Residential Real Estate	$	3,950	$	54
Construction Real Estate		2,502		42
Commercial Real Estate		11,963		184
Consumer Loans		195		3
Commercial Loans		1,101		23
Total Loans	$	19,711	$	306

	For the three-month period ended
	March 31, 2014
	Average
(dollars in thousands)	Investment in		Interest Income
	Impaired Loans		Recognized
Residential Real Estate	$	1,745	$	36
Construction Real Estate		-		-
Commercial Real Estate		1,283		21
Consumer Loans		-		-
Commercial Loans		582		-
Total Loans	$	3,610	$	57

	For the nine-month period ended
	March 31, 2015
	Average
(dollars in thousands)	Investment in		Interest Income
	Impaired Loans		Recognized
Residential Real Estate	$	3,451	$	191
Construction Real Estate		1,913		141
Commercial Real Estate		9,390		554
Consumer Loans		147		9
Commercial Loans		859		51
Total Loans	$	15,760	$	946

	For the nine-month period ended
	March 31, 2014
	Average
(dollars in thousands)	Investment in		Interest Income
	Impaired Loans		Recognized
Residential Real Estate	$	1,730	$	163
Construction Real Estate		-		-
Commercial Real Estate		1,328		110
Consumer Loans		-		-
Commercial Loans		789		1
Total Loans	$	3,847	$	274

Interest income on impaired loans recognized on a cash basis in the three- and nine-month periods ended March 31, 2015 and 2014, was immaterial.

For the three- and nine-month periods ended March 31, 2015, the amount of interest income recorded for impaired loans that represented a change in the present value of cash flows attributable to the passage of time was approximately $48,000 and $133,000, respectively, as compared to $2,000 and $106,000, respectively, for the three-and nine-month periods ended March 31, 2014.

22

The following table presents the Company's nonaccrual loans at March 31, 2015 and June 30, 2014. The table excludes performing troubled debt restructurings (TDRs).

(dollars in thousands)	March 31, 2015		June 30, 2014
Residential real estate	$	2,334	$	444
Construction real estate		131		-
Commercial real estate		1,490		673
Consumer loans		143		58
Commercial loans		102		91
Total loans	$	4,200	$	1,266

The above amounts include purchased credit impaired loans. At March 31, 2015 and June 30, 2014, these loans comprised $2.6 million and $0 of nonaccrual loans, respectively. Purchased credit impaired loans are placed on nonaccrual status in the event the Company cannot reasonably estimate cash flows expected to be collected.

Included in certain loan categories in the impaired loans are TDRs, where economic concessions have been granted to borrowers who have experienced financial difficulties. 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. 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.

When loans and leases are modified into a TDR, the Company evaluates any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan or lease agreement, and uses the current fair value of the collateral, less selling costs, for collateral dependent loans. If the Company determines that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs, and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance. In periods subsequent to modification, the Company evaluates all TDRs, including those that have payment defaults, for possible impairment and recognizes impairment through the allowance.

During the three- and nine-month periods ended March 31, 2015 and 2014, certain loans were classified as TDRs. They are shown, segregated by class, in the tables below:

	For the three-month period ended
	March 31, 2015				March 31, 2014
(dollars in thousands)	Number of		Recorded		Number of		Recorded
	modifications		Investment		modifications		Investment
Residential real estate		2	$	169		-	$	-
Construction real estate		-		-		-		-
Commercial real estate		-		-		1		299
Consumer loans		-		-		-		-
Commercial loans		-		-		5		179
Total		2	$	169		6	$	478

	For the nine-month period ended
	March 31, 2015				March 31, 2014
(dollars in thousands)	Number of		Recorded		Number of		Recorded
	modifications		Investment		modifications		Investment
Residential real estate		2	$	169		1	$	37
Construction real estate		-		-		-		-
Commercial real estate		1		41		2		328
Consumer loans		-		-		-		-
Commercial loans		1		250		5		179
Total		4	$	460		8	$	544

23

Performing loans classified as TDRs outstanding at March 31, 2015 and June 30, 2014, segregated by class, are shown in the table below. Nonperforming TDRs are shown as nonaccrual loans.

	March 31, 2015				June 30, 2014
(dollars in thousands)	Number of		Recorded		Number of		Recorded
	modifications		Investment		modifications		Investment
Residential real estate		5	$	230		6	$	1,790
Construction real estate		-		-		-		-
Commercial real estate		12		3,026		13		3,145
Consumer loans		-		-		-		-
Commercial loans		2		364		2		125
Total		19	$	3,620		21	$	5,060

Note 5: Accounting for Certain Loans Acquired in a Transfer

The Company acquired loans in transfers during the fiscal year ended June 30, 2011 and during the nine months ended March 31, 2015. At acquisition, certain transferred loans evidenced deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected.

Loans purchased with evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected are considered to be credit impaired. Evidence of credit quality deterioration as of the purchase date may include information such as past-due and nonaccrual status, borrower credit scores and recent loan to value percentages. Purchased credit-impaired loans are accounted for under the accounting guidance for loans and debt securities acquired with deteriorated credit quality (ASC 310-30) and initially measured at fair value, which includes estimated future credit losses expected to be incurred over the life of the loan. Accordingly, an allowance for credit losses related to these loans is not carried over and recorded at the acquisition date. Management estimated the cash flows expected to be collected at acquisition using our internal risk models, which incorporate the estimate of current key assumptions, such as default rates, severity and prepayment speeds.

The carrying amount of those loans is included in the balance sheet amounts of loans receivable at March 31, 2015 and June 30, 2014. The amounts of these loans at March 31, 2015 and June 30, 2014, are as follows:

(dollars in thousands)	March 31, 2015		June 30, 2014
Residential real estate	$	4,372	$	2,068
Construction real estate		3,212		-
Commercial real estate		13,541		1,276
Consumer loans		207		-
Commercial loans		1,198		115
Outstanding balance	$	22,530	$	3,459
Carrying amount, net of fair value adjustment of$3,137,379 and $287,306 at March 31, 2015     and June 30, 2014, respectively	$	19,392	$	3,172

Accretable yield, or income expected to be collected, is as follows:

	Three-month period ended
(dollars in thousands)	March 31, 2015			March 31, 2014
Balance at beginning of period	$	535		$	637
Additions		-			-
Accretion		(78	)		(32	)
Reclassification from nonaccretable difference		159			1
Disposals		-			-
Balance at end of period	$	616		$	606

24

	Nine-month period ended
(dollars in thousands)	March 31, 2015			March 31, 2014
Balance at beginning of period	$	380		$	799
Additions		(4	)		-
Accretion		(223	)		(196	)
Reclassification from nonaccretable difference		463			3
Disposals		-			-
Balance at end of period	$	616		$	606

During the three- and nine-month periods ended March 31, 2015, and during the same periods of the prior fiscal year, the Company had no increases to the allowance for loan losses by a charge to the income statement related to these purchased credit impaired loans. During the three- and nine-month periods ended March 31, 2015, no allowance for loan losses related to these loans was reversed, as compared to $0 and $57,489, respectively, during the same periods of the prior fiscal year.

Note 6:  Deposits

Deposits are summarized as follows:

	March 31, 2015		June 30, 2014
(dollars in thousands)
Non-interest bearing accounts	$	121,647	$	68,113
NOW accounts		330,046		271,156
Money market deposit accounts		72,595		28,033
Savings accounts		115,911		95,327
Certificates		416,795		323,172
Total Deposit Accounts	$	1,056,994	$	785,801

Note 7:  Earnings Per Share

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

	Three months ended				Nine months ended
	March,				March,
	2015		2014		2015		2014
(dollars in thousands except per share data)
Net income	$	3,366	$	2,243	$	10,103	$	7,325
Dividend payable on preferred stock		50		50		150		150
Net income available to common shareholders	$	3,316	$	2,193	$	9,953	$	7,175
Average Common shares – outstanding basic		7,413,257		6,623,480		7,310,494		6,591,848
Stock options under treasury stock method		190,660		223,340		188,625		205,708
Average Common shares – outstanding diluted		7,603,917		6,846,820		7,499,119		6,797,556
Basic earnings per common share	$	0.45	$	0.33	$	1.36	$	1.09
Diluted earnings per common share	$	0.44	$	0.32	$	1.33	$	1.06

At March 31, 2015 and 2014, no options outstanding had an exercise price exceeding the market price.

25

Note 8: Income Taxes

The Company files consolidated income tax returns in the U.S. Federal jurisdiction and various states. The Company is no longer subject to federal and state examinations by tax authorities for fiscal years before 2011. The Company recognized no interest or penalties related to income taxes.

The Company's income tax provision is comprised of the following components:

(dollars in thousands)	For the three-month period ended					For the nine-month period ended
	March 31, 2015			March 31, 2014		March 31, 2015			March 31, 2014
Income taxes
Current	$	1,616		$	1,976	$	5,081		$	3,377
Deferred		(119	)		(1,195)		(743	)		(615)
Total income tax provision	$	1,497		$	781	$	4,338		$	2,762

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

(dollars in thousands)	March 31, 2015		June 30, 2014
Deferred tax assets:
Provision for losses on loans	$	4,811	$	3,696
Accrued compensation and benefits		499		450
Other-than-temporary impairment on             available for sale securities		138		141
NOL carry forwards acquired		789		853
Minimum Tax Credit		130		130
Unrealized loss on other real estate		6		38
Other		662		-
Total deferred tax assets		7,035		5,308
Deferred tax liabilities:
FHLB stock dividends		71		157
Purchase accounting adjustments		1,919		1,533
Depreciation		885		767
Prepaid expenses		110		250
Unrealized gain on available for sale securities		973		336
Other		-		164
Total deferred tax liabilities		3,957		3,207
Net deferred tax asset	$	3,078	$	2,101

As of March 31, 2015 and June 30, 2014, the Company had approximately $2.3 million of federal and state net operating loss carryforwards, which were acquired in the July 2009 acquisition of Southern Bank of Commerce and February 2014 acquisition of Citizens State Bankshares of Bald Knob, Inc. The amount reported is net of the Internal Revenue Code Section 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 is shown below:

(dollars in thousands)	For the three-month period ended						For the nine-month period ended
	March 31, 2015			March 31, 2014			Mrach 31, 2015			March 31, 2014
Tax at statutory rate	$	1,654		$	1,028		$	4,910		$	3,430
Increase (reduction) in taxes       resulting from:
Nontaxable municipal income		(133	)		(133	)		(398	)		(395	)
State tax, net of Federal benefit		133			59			380			212
Cash surrender value of                   Bank-owned life insurance		(47	)		(43	)		(145	)		(131	)
Tax credit benefits		(91	)		(82	)		(272	)		(244	)
Other, net		(18	)		(49	)		(136	)		(110	)
Actual provision	$	1,497		$	781		$	4,338		$	2,762

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

26

Note 9:  401(k) Retirement Plan

The Southern Bank 401(k) Retirement Plan (the Plan) covers substantially all Southern Bank employees who are at least 21 years of age and who have completed one year of service. The Plan provides a safe harbor matching contribution of up to 4% of eligible compensation, and the Company also made additional, discretionary profit-sharing contributions for fiscal 2014; for fiscal 2015, the Company has maintained the safe harbor matching contribution of 4%, and expects to continue to make additional, discretionary profit-sharing contributions. During the three and nine-month periods ended March 31, 2015, retirement plan expenses recognized for the Plan were approximately $207,000, and $495,000, respectively, as compared to $128,000 and $389,000, respectively, for the same periods of the prior fiscal year.

Note 10:  Corporate Obligated Floating Rate Trust Preferred Securities

Southern Missouri Statutory Trust I issued $7.0 million of Floating Rate Capital Securities (the "Trust Preferred Securities") in March, 2004, with a liquidation value of $1,000 per share. The securities are due in 30 years, are now redeemable at par, 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. Southern Missouri Statutory Trust I used the proceeds from the sale of the Trust Preferred Securities to purchase junior subordinated debentures of the Company. The Company has 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. The carrying value of the debt securities was approximately $2.5 million at March 31, 2015, and June 30, 2014.

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. The carrying value of the debt securities was approximately $4.9 million at March 31, 2015.

Note 11: Small Business Lending Fund

On July 21, 2011, as part of the Small Business Lending Fund (SBLF) of the United States Department of the Treasury (Treasury), the Company entered into a Small Business Lending Fund-Securities Purchase Agreement (Purchase Agreement) with the Secretary of the Treasury, pursuant to which the Company (i) sold 20,000 shares of the Company's Senior Non-Cumulative Perpetual Preferred Stock, Series A (SBLF Preferred Stock) to the Secretary of the Treasury for a purchase price of $20,000,000. The SBLF Preferred Stock was issued pursuant to the SBLF program, a $30 billion fund established under the Small Business Jobs Act of 2010 that was created to encourage lending to small business by providing capital to qualified community banks with assets of less than $10 billion.

The SBLF Preferred Stock qualifies as Tier 1 capital. The holder of SBLF Preferred Stock is entitled to receive non-cumulative dividends, payable quarterly, on each January 1, April 1, July 1 and October 1, beginning October 1, 2011. The dividend rate, as a percentage of the liquidation amount, fluctuated on a quarterly basis from the original issue date through the tenth dividend period (which ended December 31, 2013), based upon changes in the Company's level of Qualified Small Business Lending (QBSL), as defined in the Purchase Agreement, over the baseline level calculated under the terms of the Purchase Agreement. From January 1, 2014, through four and one half years after issuance (i.e., through January 21, 2016), the dividend rate will be fixed at one percent (1%), based upon the increase in QBSL as compared to the baseline. After four and one half years from issuance, the dividend rate will increase to nine percent (9%), including a quarterly lending incentive fee of one-half percent (0.5%).

The SBLF Preferred Stock is non-voting, except in limited circumstances. In the event that the Company misses five dividend payments, the holder of the SBLF Preferred Stock will have the right to appoint a representative as an

27

observer on the Company's Board of Directors. In the event that the Company misses six dividend payments, then the holder of the SBLF Preferred Stock will have the right to designate two directors to the Board of Directors of the Company.

The SBLF Preferred Stock may be redeemed at any time at the Company's option, at a redemption price of 100% of the liquidation amount plus accrued but unpaid dividends to the date of redemption for the current period, subject to the approval of its federal banking regulator.

As required by the Purchase Agreement, $9,635,000 of the proceeds from the sale of the SBLF Preferred Stock was used to redeem the 9,550 shares of the Company's Fixed Rate Cumulative Perpetual Preferred Stock, Series A issued in 2008 to the Treasury in the Troubled Asset Relief Program (TARP), plus the accrued but unpaid dividends on those preferred shares. As part of the 2008 TARP transaction, the Company issued a ten-year warrant to Treasury to purchase 114,326 shares of the Company's common stock at an exercise price of $12.53 per share. Based on dividends paid by the Company on its common stock since the issuance of the warrant, and the two-for-one common stock split in the form of a common stock dividend paid on January 30, 2015, the warrant has been adjusted and, as of March 31, 2015, was exercisable for the purchase of 231,891 shares, at an exercise price of $6.18 per share.

Note 12:  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 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 that are 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 balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fell at March 31, 2015 and June 30, 2014:

	Fair Value Measurements at March 31, 2015, Using:
(dollars in thousands)			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
U.S. government sponsored enterprises (GSEs)	$	15,872	$	-	$	15,872	$	-
State and political subdivisions		42,486		-		42,486		-
Other securities		2,806		-		2,603		203
Mortgage-backed GSE residential		72,473		-		72,473		-

	Fair Value Measurements at June 30, 2014, Using:
(dollars in thousands)			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
U.S. government sponsored enterprises (GSEs)	$	24,074	$	-	$	24,074	$	-
State and political subdivisions		45,357		-		45,357		-
Other securities		2,640		-		2,507		133
Mortgage-backed GSE residential		58,151		-		58,151		-

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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 nine months ended March 31, 2015.

Available-for-sale Securities. When quoted market prices are available in an active market, securities are classified within Level 1. The Company does not have Level 1 securities. 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, the 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. Level 2 securities include U.S. Government-sponsored enterprises, state and political subdivisions, other securities, and mortgage-backed GSE residential securities. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

The following table presents a reconciliation of activity for available for sale securities measured at fair value based on significant unobservable (Level 3) information for the three- and nine-month periods ended March 31, 2015 and 2014:

	Three months ended
(dollars in thousands)	March 31, 2015		March 31, 2014
Available-for-sale securities, beginning of period	$	172	$	121
Total unrealized gain (loss) included in comprehensive income		31		3
Transfer from Level 2 to Level 3		-		-
Available-for-sale securities, end of period	$	203	$	124

	Nine months ended
(dollars in thousands)	March 31, 2015		March 31, 2014
Available-for-sale securities, beginning of period	$	133	$	73
Total unrealized gain (loss) included in comprehensive income		70		51
Transfer from Level 2 to Level 3		-		-
Available-for-sale securities, end of period	$	203	$	124

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 March 31, 2015 and June 30, 2014:

	Fair Value Measurements at March 31, 2015, 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)
Impaired loans (collateral dependent)	$	-	$	-	$	-	$	-
Foreclosed and repossessed assets held for sale		4,328		-		-		4,328

	Fair Value Measurements at June 30, 2014, 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)
Impaired loans (collateral dependent)		$	-		$	-		$	-		$	-
Foreclosed and repossessed assets held for sale			2,977			-			-			2,977

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The following table presents gains and (losses) recognized on assets measured on a non-recurring basis for the nine-month periods ended March 31, 2015 and 2014:

	For the nine months ended
(dollars in thousands)	March 31, 2015			March 31, 2014
Impaired loans (collateral dependent)	$	(59	)	$	110
Foreclosed and repossessed assets held for sale		(33	)		(221	)
Total gains (losses) on assets measured on a non-recurring basis	$	(92	)	$	(111	)

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 and liabilities pursuant to the valuation hierarchy. For assets classified within Level 3 of fair value hierarchy, the process used to develop the reported fair value process is described below.

Impaired Loans (Collateral Dependent). A collateral dependent loan is considered to be impaired when it is probable that all of the principal and interest due may not be collected according to its contractual terms. Generally, when a collateral dependent loan is considered impaired, the amount of reserve required is measured based on the fair value of the underlying collateral. The Company makes such measurements on all material collateral dependent loans deemed impaired using the fair value of the collateral for collateral dependent loans. The fair value of collateral used by the Company is determined by obtaining an observable market price or by obtaining an appraised value from an independent, licensed or certified appraiser, using observable market data. This data includes information such as selling price of similar properties and capitalization rates of similar properties sold within the market, expected future cash flows or earnings of the subject property based on current market expectations, and other relevant factors. In addition, management applies selling and other discounts to the underlying collateral value to determine the fair value. If an appraised value is not available, the fair value of the collateral dependent impaired loan is determined by an adjusted appraised value including unobservable cash flows.

On a quarterly basis, loans classified as special mention, substandard, doubtful, or loss are evaluated including the loan officer's review of the collateral and its current condition, the Company's knowledge of the current economic environment in the market where the collateral is located, and the Company's recent experience with real estate in the area. The date of the appraisal is also considered in conjunction with the economic environment and any decline in the real estate market since the appraisal was obtained. For all loan types, updated appraisals are obtained if considered necessary. Of the Company's $19.4 million (carrying value) in impaired loans (collateral-dependent and purchased credit-impaired) at March 31, 2015, the Company utilized a real estate appraisal more than 12 months old to serve as the primary basis of our valuation for impaired loans with a carrying value of approximately $18.4 million. The remaining $1.0 million was secured by machinery, equipment and accounts receivable. In instances where the economic environment has worsened and/or the real estate market declined since the last appraisal, a higher distressed sale discount would be applied to the appraised value.

The Company records collateral dependent impaired loans based on nonrecurring Level 3 inputs. If a collateral dependent loan's fair value, as estimated by the Company, is less than its carrying value, the Company either records a charge-off of the portion of the loan that exceeds the fair value or establishes a specific reserve as part of the allowance for loan losses.

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.

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

(dollars in thousands)	Fair value atMarch 31, 2015		Valuation technique	Unobservable inputs	Range of inputs applied			Weighted-average inputs applied
Recurring Measurements
Available-for-sale securities      (pooled trust preferred security)	$	203	Discounted cash flow	Discount ratePrepayment rateProjected defaults   and deferrals   (% of pool balance)Anticipated recoveries    (% of pool balance)	n/an/an/a n/a			11.2%1% annually33.3% 0.8%
Nonrecurring Measurements
Foreclosed and repossessed assets		4,328	Third party appraisal	Marketability discount		0.0% - 76.0	%		36.1	%

(dollars in thousands)	Fair value atJune 30, 2014		Valuation technique	Unobservable inputs	Range of inputs applied			Weighted-average inputs applied
Recurring Measurements
Available-for-sale securities      (pooled trust preferred security)	$	133	Discounted cash flow	Discount ratePrepayment rateProjected defaults   and deferrals   (% of pool balance)Anticipated recoveries    (% of pool balance)	n/an/an/a n/a			16.0%1% annually38.8% 1.0%
Nonrecurring Measurements
Foreclosed and repossessed assets		2,977	Third party appraisal	Marketability discount		0.0% - 76.4	%		14.9	%

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 March 31, 2015 and June 30, 2014.

	March 31, 2015
			Quoted Prices
			in Active				Significant
			Markets for		Significant Other		Unobservable
(dollars in thousands)	Carrying		Identical Assets		Observable Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	20,798	$	20,798	$	-	$	-
Interest-bearing time deposits		2,698		-		2,698		-
Stock in FHLB		4,135		-		4,135		-
Stock in Federal Reserve Bank of St. Louis		2,340		-		2,340		-
Loans receivable, net		1,049,524		-		-		1,052,384
Accrued interest receivable		4,645		-		4,645		-
Financial liabilities
Deposits		1,056,994		640,266		-		415,479
Securities sold under agreements to          repurchase		27,960		-		27,960		-
Advances from FHLB		65,080		23,700		43,174		-
Accrued interest payable		741		-		741		-
Subordinated debt		14,635		-		-		12,125
Unrecognized financial instruments    (net of contract amount)
Commitments to originate loans		-		-		-		-
Letters of credit		-		-		-		-
Lines of credit		-		-		-		-

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	June 30, 2014
			Quoted Prices
			in Active				Significant
			Markets for		Significant Other		Unobservable
	Carrying		Identical Assets		Observable Inputs		Inputs
	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	14,932	$	14,932	$	-	$	-
Interest-bearing time deposits		1,655		-		1,655		-
Stock in FHLB		4,569		-		4,569		-
Stock in Federal Reserve Bank of St. Louis		1,424		-		1,424		-
Loans receivable, net		801,056		-		-		805,543
Accrued interest receivable		4,402		-		4,402		-
Financial liabilities
Deposits		785,801		462,629		-		323,512
Securities sold under agreements to          repurchase		25,561		-		25,561		-
Advances from FHLB		85,472		59,900		27,714		-
Accrued interest payable		570		-		570		-
Subordinated debt		9,727		-		-		8,059
Unrecognized financial instruments    (net of contract amount)
Commitments to originate loans		-		-		-		-
Letters of credit		-		-		-		-
Lines of credit		-		-		-		-

The following methods and assumptions were used in estimating the fair values of financial instruments:

Cash and cash equivalents and interest-bearing time deposits are valued at their carrying amounts, which approximates book value. Stock in FHLB and the Federal Reserve Bank of St. Louis is valued at cost, which approximates fair value. Fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans with similar characteristics are aggregated for purposes of the calculations. The carrying amounts of accrued interest approximate their fair values.

The fair value of fixed-maturity time deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities. Non-maturity deposits and securities sold under agreements are valued at their carrying value, which approximates fair value. Fair value of advances from the FHLB is estimated by discounting maturities using an estimate of the current market for similar instruments. The fair value of subordinated debt is estimated using rates currently available to the Company for debt with similar terms and maturities. The fair value of commitments to originate loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and committed rates. The fair value of letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date.

Note 13: Acquisitions

On August 5, 2014, the Company completed its acquisition of Peoples Service Company (PSC) and its subsidiary, Peoples Bank of the Ozarks (Peoples), Nixa, Missouri. Peoples was merged into the Company's bank subsidiary, Southern Bank, in early December, 2014, in connection with the conversion of Peoples' data system. The Company acquired Peoples primarily for the purpose of conducting commercial banking activities in markets where it believes the Company's business model will perform well, and for the long-term value of its core deposit franchise. Through March 31, 2015, the Company incurred $678,000 in third-party acquisition-related costs. Expenses totaling $528,000 are included in noninterest expense in the Company's consolidated statement of income for the nine months ended March 31, 2015, compared to $0 for the nine months ended March 31, 2014. Notes payable of $2.9 million were contractually required to be repaid on the date of acquisition. The goodwill of $3.0 million arising from the acquisition consists largely of synergies and economies of scale expected from combining the operations of the Company and Peoples. Total goodwill was assigned to the acquisition of the bank holding company.

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The following table summarizes the consideration paid for PSC and Peoples, and the amounts of assets acquired and liabilities assumed recognized at the acquisition date:

Fair Value of Consideration Transferred
(dollars in thousands)
Cash	$	12,094
Common stock, at fair value		12,331
Total consideration	$	24,425
Recognized amounts of identifiable assets acquired
and liabilities assumed
Cash and Cash equivalents	$	18,236
Interest bearing time deposits		9,950
Investment Securities		31,257
Loans		190,445
Premises and equipment		11,785
Identifiable intangible assets		3,000
Miscellaneous other assets		4,045
Deposits		(221,887	)
Advances from FHLB		(16,038	)
Subordinated debt		(4,844	)
Miscellaneous other liabilities		(1,558	)
Notes Payable		(2,921	)
Total identifiable net assets		21,492
Goodwill	$	2,955

The following unaudited pro forma condensed financial information presents the results of operations of the Company, including the effects of the purchase accounting adjustments and acquisition expenses, had the acquisition taken place at the beginning of each period:

	Three months ended				Nine months ended
	March 31,				March 31,
	2015		2014		2015		2014
(dollars in thousands except per share data)
Interest income		13,909		13,161		42,551		38,790
Interest expense		2,212		2,204		6,594		6,686
Net interest income		11,697		10,957		35,957		32,104
Provision for loan losses		837		253		2,526		1,048
Noninterest income		2,094		1,854		6,376		5,477
Noninterest expense		8,091		9,107		26,063		24,743
Income before income taxes		4,863		3,451		13,744		11,790
Income taxes		1,497		940		4,264		3,410
Net income		3,366		2,511		9,480		8,380
Dividends on preferred shares		50		50		150		150
Net income available to common stockholders		3,316		2,461		9,330		8,230
Earnings per share
Basic	$	0.45	$	0.34	$	1.25	$	1.13
Diluted	$	0.44	$	0.33	$	1.23	$	1.10
Basic weighted average shares outstanding		7,413,257		7,315,266		7,442,084		7,283,634
Diluted weighted average shares outstanding		7,603,917		7,538,606		7,630,789		7,489,342

The unaudited pro forma condensed combined financial statements do not reflect any anticipated cost savings or revenue enhancements. Accordingly, the pro forma results of operations of the Company as of and after the business combination may not be indicative of the results that actually would have occurred if the combination had been in effect during the periods presented or of the results that may be attained in the future.

Note 14: Subsequent Events

On May 8, 2015, Treasury notified the Company that it had accepted the Company's offer to repurchase for $2.7 million the warrant held by Treasury for the purchase of 231,891 shares of the Company's common stock at an exercise price of $6.18 per share. As indicated in Note 11, the warrant was issued by the Company to Treasury on December 5, 2008, as part of the Company's participation in the TARP Capital Purchase Program.  Settlement for the repurchase of the warrant is expected to occur on or about May 13, 2015.

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PART I:  Item 2:  Management's Discussion and Analysis of Financial Condition and Results of Operations

SOUTHERN MISSOURI BANCORP, INC.

General

Southern Missouri Bancorp, Inc. (Southern Missouri or Company) is a Missouri corporation and owns all of the outstanding stock of Southern Bank (the Bank). The Company's earnings are primarily dependent on the operations of the Bank. As a result, the following discussion relates primarily to the operations of the Bank. The Bank's deposit accounts are generally insured up to a maximum of $250,000 by the Deposit Insurance Fund (DIF), which is administered by the Federal Deposit Insurance Corporation (FDIC). As of March 31, 2015, the Bank conducted business through its home office located in Poplar Bluff, 32 full service offices, and two limited service offices located in in Poplar Bluff (3), Van Buren, Dexter, Kennett, Doniphan, Qulin, Sikeston, Matthews, Springfield, Thayer (2), West Plains, Alton, Nixa, Fremont Hills, Ozark, Springfield (2), Republic, Clever, Forsyth, and Kimberling City, Missouri; and Paragould, Jonesboro (2), Brookland, Batesville, Searcy, Bald Knob (2), and Bradford, Arkansas.

The significant accounting policies followed by Southern Missouri Bancorp, Inc. and its wholly owned subsidiaries for interim financial reporting are consistent with the accounting policies followed for annual financial reporting. All adjustments, which are of a normal recurring nature and are in the opinion of management necessary for a fair statement of the results for the periods reported, have been included in the accompanying consolidated condensed financial statements.

The consolidated balance sheet of the Company as of June 30, 2014, has been derived from the audited consolidated balance sheet of the Company as of that date. Certain information and note disclosures normally included in the Company's annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Form 10-K annual report filed with the Securities and Exchange Commission for the fiscal year ended June 30, 2014.

Management's discussion and analysis of financial condition and results of operations is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited consolidated financial statements and accompanying notes. The following discussion reviews the Company's condensed consolidated financial condition at March 31, 2015, and results of operations for the three- and nine-month periods ended March 31, 2015 and 2014.

Forward Looking Statements

This document contains statements about the Company and its subsidiaries which we believe are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include, without limitation, statements with respect to anticipated future operating and financial performance, growth opportunities, interest rates, cost savings and funding advantages expected or anticipated to be realized by management. Words such as "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan" and similar expressions are intended to identify these forward‑looking statements. Forward-looking statements by the Company and its management are based on beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions of management and are not guarantees of future performance. The important factors we discuss below, as well as other factors discussed under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" and identified in this filing and in our other filings with the SEC and those presented elsewhere by our management from time to time, could cause actual results to differ materially from those indicated by the forward-looking statements made in this document:

· the strength of the United States economy in general and the strength of the local economies in which we conduct operations;

· fluctuations in interest rates;

· monetary and fiscal policies of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board") and the U.S. Government and other governmental initiatives affecting the financial services industry;

· the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses;

34

· our ability to access cost-effective funding;

· the timely development of and acceptance of our new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors' products and services;

· expected cost savings, synergies and other benefits from our merger and acquisition activities might not be realized within the anticipated time frames or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention, might be greater than expected;

· fluctuations in real estate values and both residential and commercial real estate market conditions;

· demand for loans and deposits;

· legislative or regulatory changes that adversely affect our business;

· results of examinations of us by our regulators, including the possibility that our regulators may, among other things, require us to increase our reserve for loan losses or to write-down assets;

· the impact of technological changes; and

· our success at managing the risks involved in the foregoing.

The Company disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information, or otherwise.

Non-GAAP Disclosures

The following financial measures contain information determined by methods other than in accordance with accounting principles generally accepted in the United States (commonly referred to as GAAP):

· net income available to common shareholders excluding the accretion of fair value discount on acquired loans and amortization of fair value premium on assumed time deposits;

· annualized return on average assets excluding the accretion of fair value discount on acquired loans and amortization of fair value premium on assumed time deposits;

· annualized return on average common equity excluding the accretion of fair value discount on acquired loans and amortization of fair value premium on assumed time deposits;

· net interest margin excluding the accretion of fair value discount on acquired loans and amortization of fair value premium on assumed time deposits;

These measures indicate what net income available to common shareholders, return on average assets, return on average common equity, and net interest margin would have been without the impact of the accretion of fair value discount on acquired loans and amortization of fair value premium on assumed time deposits resulting from the December 2010 acquisition of most of the assets and assumption of substantially all of the liabilities of the former First Southern Bank, Batesville, Arkansas (the Fiscal 2011 Acquisition), as well as the August 5, 2014 acquisition of Peoples Service Company and its subsidiary, Peoples Bank of the Ozarks (the Peoples Acquisition). Management believes that showing these measures excluding these items provides useful information by which to evaluate the Company's operating performance on an ongoing basis from period to period.  Other acquisitions, with smaller acquired loan portfolios, resulted in less variation between GAAP and what management believes to be core operating results.

These non-GAAP financial measures are supplemental and are not a substitute for an analysis based on GAAP measures. Because not all companies use identical calculations, these non-GAAP financial measures might not be comparable to other similarly-titled measures as determined and disclosed by other companies. Reconciliations to GAAP of these non-GAAP financial measures presented are set forth below.

The following table presents reconciliation to GAAP of net income available to common stockholders excluding accretion of fair value discount on acquired loans and amortization of fair value premium on assumed time deposits related to the Fiscal 2011 Acquisition and the Peoples Acquisition:

35

	For the three months ended				For the nine months ended
(dollars in thousands)	March 31, 2015		March 31, 2014		March 31, 2015		March 31, 2014
Net income available to common stockholders	$	3,316	$	2,193	$	9,953	$	7,175
Less: impact of excluding accretion of fair value discount on acquired loans and amortization of fair value premium on acquired time deposits related to the Acquisitions, net of tax		392		68		1,197		301
Net income available to common shareholders - excluding accretion of fair value discount on acquired loans and amortization of fair value premium on acquired time deposits related to the Acquisitions, net of tax	$	2,924	$	2,125	$	8,756	$	6,874

The following table presents reconciliation to GAAP of return on average assets excluding accretion of fair value discount on acquired loans and amortization of fair value premium on assumed time deposits related to the Fiscal 2011 Acquisition and the Peoples Acquisition:

	For the three months ended						For the nine months ended
	March 31, 2015			March 31, 2014			March 31, 2015			March 31, 2014
Return on average assets		1.04	%		0.93	%		1.06	%		1.09	%
Less: impact of excluding accretion of fair value discount on acquired loans and amortization of fair value premium on acquired time deposits related to the Acquisitions, net of tax		0.12	%		0.03	%		0.12	%		0.05	%
Return on average assets - excluding accretion of fair value discount on acquired loans and amortization of fair value premium on acquired time deposits related to the Acquisitions, net of tax		0.92	%		0.90	%		0.94	%		1.04	%

The following table presents reconciliation to GAAP of return on average common equity excluding accretion of fair value discount on acquired loans and amortization of fair value premium on assumed time deposits related to the Fiscal 2011 Acquisition and the Peoples Acquisition:

	For the three months ended						For the nine months ended
	March 31, 2015			March 31, 2014			March 31, 2015			March 31, 2014
Return on average common equity		11.88	%		10.15	%		12.49	%		11.34	%
Less: impact of excluding accretion of fair value discount on acquired loans and amortization of fair value premium on acquired time deposits related to the Acquisitions, net of tax		1.40	%		0.31	%		1.50	%		0.47	%
Return on average common equity - excluding accretion of fair value discount on acquired loans and amortization of fair value premium on acquired time deposits related to the Acquisitions, net of tax		10.48	%		9.84	%		10.99	%		10.87	%

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The following table presents reconciliation to GAAP of net interest margin excluding accretion of fair value discount on acquired loans and amortization of fair value premium on assumed time deposits related to the Fiscal 2011 Acquisition and the Peoples Acquisition:

	For the three months ended						For the nine months ended
	March 31, 2015			March 31, 2014			March 31, 2015			March 31, 2014
Net interest margin		3.89	%		3.72	%		3.95	%		3.82	%
Less: impact of excluding accretion of fair value discount on acquired loans and amortization of fair value premium on acquired time deposits related to the Acquisitions		0.21	%		0.05	%		0.22	%		0.07	%
Net interest margin - excluding accretion of fair value discount on acquired loans and amortization of fair value premium on acquired time deposits related to the Acquisitions		3.68	%		3.67	%		3.73	%		3.75	%

Critical Accounting Policies

Accounting principles generally accepted in the United States of America are complex and require management to apply significant judgments to various accounting, reporting and disclosure matters. Management of the Company must use assumptions and estimates to apply these principles where actual measurement is not possible or practical. For a complete discussion of the Company's significant accounting policies, see "Notes to the Consolidated Financial Statements" in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2014. Certain policies are considered critical because they are highly dependent upon subjective or complex judgments, assumptions and estimates. Changes in such estimates may have a significant impact on the financial statements. Management has reviewed the application of these policies with the Audit Committee of the Company's Board of Directors. For a discussion of applying critical accounting policies, see "Critical Accounting Policies" beginning on page 58 of the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2014.

Recent Events

On August 5, 2014, the Company acquired Peoples Service Company (PSC) and its banking subsidiary, Peoples Bank of the Ozarks (Peoples), in a stock and cash transaction (the Peoples Acquisition). The acquired financial institution was merged with and into Southern Bank in early December, 2014. Net of purchase accounting adjustments to the acquired balance sheet, the acquired entity had assets of $268.7 million, loans of $190.4 million, and deposits of $221.9 million.

On January 30, 2015, the Company effected a two-for-one common stock split in the form of a common stock dividend.  All share and per share amounts reflect this stock dividend.

Executive Summary

During fiscal 2014, the Company closed on its acquisition of the Bank of Thayer in October 2013, and the acquisition of Citizens State Bank in February 2014 (collectively, the "Fiscal 2014 Acquisitions"). Along with the Peoples Acquisition, described above, the Fiscal 2014 Acquisitions impacted our reported results through a larger average balance sheet, and increased noninterest income and noninterest expense.

Our results of operations depend primarily on our net interest margin, which is directly impacted by the interest rate environment. The net interest margin represents interest income earned on interest-earning assets (primarily real estate loans, commercial and agricultural loans, and the investment portfolio), less interest expense paid on interest-bearing liabilities (primarily certificates of deposit, interest-bearing transaction accounts, savings and money market deposit accounts, repurchase agreements, and borrowed funds), as a percentage of average interest-earning assets. Net interest margin is directly impacted by the spread between long-term interest rates and short-term interest rates, as our interest-earning assets, particularly those with initial terms to maturity or repricing greater than one year, generally price off longer term rates while our interest-bearing liabilities generally price off shorter term rates. This difference in longer term and shorter term interest rates is often referred to as the steepness of the yield curve. A steep yield curve – in which the difference in interest rates between short term and long term periods is relatively large – could be beneficial to our net interest income, as the interest rate spread between our interest-earning assets and interest-bearing liabilities would be larger. Conversely, a flat or flattening yield curve, in which the difference in rates between short term and long term periods is relatively small or shrinking, or an inverted yield curve, in which short term rates exceed long term rates, could have an adverse impact on our net interest income, as our interest rate spread could decrease.

37

Our results of operations may also be affected significantly by general and local economic and competitive conditions, particularly those with respect to changes in market interest rates, government policies and actions of regulatory authorities.

During the first nine months of fiscal 2015, we grew our balance sheet by $281.4 million. Balance sheet growth was primarily due to the Peoples Acquisition. Loans increased $248.5 million, of which the Peoples Acquisition accounted for $190.4 million at the time of acquisition. Available-for-sale securities increased $3.4 million, attributable to the Peoples Acquisition, which provided $31.3 million in securities, partially offset by securities sales and maturities. Cash equivalents and time deposits increased $6.9 million, fixed assets increased $15.0 million, intangible assets increased $5.1 million, and other assets increased $2.5 million, all due primarily to the Peoples Acquisition. Deposits increased $271.2 million, attributable primarily to the Peoples Acquisition, which provided $221.9 million in deposit balances at the time of acquisition. Securities sold under agreements to repurchase increased $2.4 million. Advances from the Federal Home Loan Bank (FHLB) decreased $20.4 million, despite the Peoples Acquisition adding longer-term advances of $16.0 million, at fair value, as the Company repaid overnight advances. Subordinated debt increased $4.9 million, attributable to the Peoples Acquisition. Equity increased $21.8 million, primarily as a result of additional shares of the Company's common stock issued in the Peoples Acquisition, as well as retention of net income and an increase in accumulated other comprehensive income.

Net income for the first nine months of fiscal 2015 was $10.1 million, an increase of $2.8 million, or 37.9% as compared to the same period of the prior fiscal year. After accounting for dividends on preferred stock of $150,000, net earnings available to common shareholders were $10.0 million in the nine-month period ended March 31, 2015, an increase of 38.7% as compared to the same period of the prior fiscal year. Compared to the year-ago period, the Company's increase in net income was the result of an increase in net interest income and noninterest income, partially offset by increases in non-interest expense, provision for income taxes, and provision for loan losses. Diluted net income available to common shareholders was $1.33 per share for the first nine months of fiscal 2015, as compared to $1.06 per share for the same period of the prior fiscal year (both figures split-adjusted). The increase was attributable to the increased net income available to common shareholders, partially offset by an increase in the average number of common shares outstanding. For the first nine months of fiscal 2015, net interest income increased $10.9 million, or 45.0%; noninterest income increased $1.9 million, or 42.0%; noninterest expense increased $6.9 million, or 39.5%; provision for income taxes increased $1.6 million, or 57.1%; and provision for loan losses increased $1.5 million, or 141.1%, as compared to the same period of the prior fiscal year. For more information see "Results of Operations."

Interest rates during the first nine months of fiscal 2015 remained relatively low by historical standards, and yields on longer maturities moved decidedly lower in the December and March quarters. Yields were up on the shortest-term securities, as expectations built that the Federal Reserve's Open Market Committee (FOMC) was poised to raise overnight borrowing costs in mid- to late-2015. The effect was a flatter yield curve. Our average yield on earning assets increased, primarily due to the impact of the Peoples Acquisition and the loan portfolio acquired at a fair value discount under purchase accounting (see "Results of Operations: Comparison of the three- and nine-month periods ended March 31, 2015 and 2014 – Net Interest Income"). A flat or flattening yield curve is generally detrimental to the Company. In December 2008, the FOMC cut the targeted Federal Funds rate to a range of 0.00% to 0.25%, and in March 2009, it detailed its plan to purchase long-term mortgage-backed securities, agency debt, and long-term Treasuries. A second securities purchase program focused on US Treasuries. A third program sought to lower real estate borrowing costs through purchases of mortgage-backed securities, and extending the average life of its securities portfolio. For 2013, the FOMC extended its quantitative easing by purchasing approximately $85 billion per month in longer-term Treasuries and additional agency mortgage-backed securities. In December 2013, the FOMC began reducing those purchases by $10 billion per month, continued reducing those purchases by $10 billion per month at each successive meeting through 2014, and announced in late October 2014 that the program would be concluded. The Fed has recently removed language indicating that it can remain "patient" before beginning to remove the extraordinarily accommodative policy in place since 2008.

Our net interest margin improved when comparing the first nine months of fiscal 2015 to the same period of the prior fiscal year.  The improvement was attributable to purchase accounting adjustments related to the Peoples Acquisition, which was partially offset by the diminishing impact of similar adjustments resulting from the December 2010 acquisition of most of the assets and assumption of substantially all of the liabilities of the former First Southern Bank, Batesville, Arkansas (the Fiscal 2011 Acquisition). In both acquisitions, the Company acquired loans at a material discount. Net interest income resulting from the accretion of those discounts (and smaller premiums on acquired time deposits) in the first nine months of fiscal 2015 increased to $1.9 million, as compared to $481,000 in the first

38

nine months of fiscal 2014. This increase equates to a 14 basis point increase in the net interest margin. The Company expects that as the acquired loan portfolios pay down, the positive impact on net interest income of discount accretion resulting from these acquisitions will be reduced. Our net interest margin, excluding this income, decreased to 3.73% in the current nine-month period, as compared to 3.74% in the prior year's nine-month period, as declines in core loan yields were mostly offset by declines in our core cost of funds, and the mix of our earning assets was relatively stable.

The Company's net income is also affected by the level of its noninterest income and noninterest expenses. Non-interest income generally consists primarily of deposit account service charges, bank card interchange income, loan-related fees, increases in the cash value of bank-owned life insurance, gains on sales of loans, and other general operating income. Noninterest expenses consist primarily of compensation and employee benefits, occupancy-related expenses, deposit insurance assessments, professional fees, advertising, postage and office expenses, insurance, bank card network expenses, the amortization of intangible assets, and other general operating expenses. During the nine-month period ended March 31, 2015, noninterest income increased $1.9 million, or 42.0%, as compared to the same period of the prior fiscal year, attributable primarily to deposit account charges, bank card interchange income, loan late charges, and gains on sales of loans, most of which resulted from the Fiscal 2014 Acquisitions and the Peoples Acquisition, partially offset by a reduction in realized gains on AFS securities. Noninterest expense for the nine-month period ended December 31, 2015, increased $6.9 million, or 39.5%, as compared to the same period of the prior fiscal year. The increase was primarily attributable to compensation, occupancy, amortization of core deposit intangibles, and advertising expenses, which resulted primarily from the Fiscal 2014 Acquisitions and the Peoples Acquisition, partially offset by reductions in legal and professional costs and bank card network expense, due to higher one-time charges in the prior period.

We expect, over time, to continue to grow our assets modestly through the origination and occasional purchase of loans, and purchases of investment securities. The primary funding for this asset growth is expected to come from retail deposits, short- and long-term FHLB borrowings, and, as needed, brokered certificates of deposit. We have grown and intend to continue to grow deposits by offering desirable deposit products for our current customers and by attracting new depository relationships. We will also continue to explore strategic expansion opportunities in market areas that we believe will be attractive to our business model, although we expect that the integration of operations from the Peoples Acquisition and the Fiscal 2014 Acquisitions will be our focus for the immediate-term.

Comparison of Financial Condition at March 31, 2015 and June 30, 2014

The Company experienced balance sheet growth in the first nine months of fiscal 2015, with total assets increasing $281.4 million, or 27.6%, to $1.3 billion at March 31, 2015, as compared to $1.0 billion at June 30, 2014. Balance sheet growth during this period was primarily due to the Peoples Acquisition, as well as organic loan growth. Balance sheet growth was funded primarily with acquired deposit balances and organic deposit growth.

Available-for-sale securities increased $3.4 million, or 2.6%, to $133.6 million at March 31, 2015, as compared to $130.2 million at June 30, 2014. The increase was attributable to the Peoples Acquisition, which included $31.3 million in AFS securities balances, consisting primarily of mortgage-backed securities, mostly offset by securities sold, repaid, and matured. Cash equivalents and time deposits increased $6.9 million, or 41.6%, as compared to June 30, 2014, primarily as a result of the Peoples Acquisition.

Loans, net of the allowance for loan losses, increased $248.5 million, or 31.0%, to $1.0 billion at March 31, 2015, as compared to $801.1 million at June 30, 2014. The increase was primarily attributable to the Peoples Acquisition, which included $190.4 million in loans, at fair value. Including acquired loans, the increase in balance consisted primarily of commercial real estate, residential real estate, and commercial loans.

Deposits increased $271.2 million, or 34.5%, to $1.1 billion at March 31, 2015, as compared to $785.8 million at June 30, 2014. The increase was primarily attributable to the Peoples Acquisition, which included $221.9 million in deposits, at fair value. Including assumed deposits, the increase consisted primarily of certificates of deposit, interest-bearing transaction accounts, noninterest-bearing transaction accounts, and money market deposit accounts.

FHLB advances were $65.1 million at March 31, 2015, a decrease of $20.4 million, or 23.9%, as compared to $85.5 million at June 30, 2014. The decrease was attributable to the repayment of overnight borrowings funded by the utilization of cash equivalents obtained in the Peoples Acquisition, the sale of AFS securities, and deposit growth, and was partially offset by the assumption of longer-term advances totaling $16.0 million, at fair value, as a result of the

39

Peoples Acquisition. Securities sold under agreements to repurchase totaled $28.0 million at March 31, 2015, as compared to $25.6 million at June 30, 2014, an increase of 9.4%. At both dates, the full balance of repurchase agreements was due to local small business and government counterparties.

The Company's stockholders' equity increased $21.8 million, or 19.7%, to $133.0 million at March 31, 2015, from $111.1 million at June 30, 2014. The increase was due primarily to the issuance of shares of Company common stock in the Peoples Acquisition, as well as retention of net income, and an increase in accumulated other comprehensive income, partially offset by cash dividends paid on common and preferred stock.

Average Balance Sheet, Interest, and Average Yields and Rates for the Three- and Nine-Month Periods Ended

March 31, 2015 and 2014

The tables below present certain information regarding our financial condition and net interest income for the three- and nine-month periods ended March 31, 2015 and 2014. The tables present the annualized average yield on interest-earning assets and the annualized average cost of interest-bearing liabilities. We derived the yields and costs by dividing annualized income or expense by the average balance of interest-earning assets and interest-bearing liabilities, respectively, for the periods shown. Yields on tax-exempt obligations were not computed on a tax equivalent basis.

	Three-month period ended								Three-month period ended
	March 31, 2015								March 31, 2014
	Average Balance			Interest and Dividends		Yield/ Cost (%)			Average Balance			Interest and Dividends		Yield/ Cost (%)
(dollars in thousands)
Interest earning assets:
Mortgage loans (1)	$	822,215		$	10,182		4.95		$	607,774		$	7,489		4.93
Other loans (1)		218,156			2,793		5.12			153,346			2,008		5.24
Total net loans		1,040,371			12,975		4.99			761,120			9,497		4.99
Mortgage-backed securities		78,293			435		2.22			52,982			286		2.16
Investment securities (2)		69,140			483		2.79			82,301			519		2.52
Other interest earning assets		16,148			16		0.40			10,803			14		0.52
Total interest earning assets (1)		1,203,952			13,909		4.62			907,206			10,316		4.55
Other noninterest earning assets (3)		92,966			-					60,800			-
Total assets	$	1,296,918		$	13,909				$	968,006		$	10,316
Interest bearing liabilities:
Savings accounts	$	114,912			91		0.32		$	91,430			78		0.34
NOW accounts		330,150			624		0.76			264,328			512		0.77
Money market deposit accounts		74,623			41		0.22			29,042			49		0.67
Certificates of deposit		423,350			1,000		0.94			312,252			854		1.09
Total interest bearing deposits		943,035			1,756		0.74			697,052			1,493		0.86
Borrowings:
Securities sold under agreements       to repurchase		26,256			30		0.46			25,470			34		0.53
FHLB advances		57,597			301		2.09			64,557			272		1.69
Subordinated debt		14,626			125		3.42			9,717			83		3.42
Total interest bearing liabilities		1,041,514			2,212		0.85			796,796			1,882		0.94
Noninterest bearing demand deposits		123,033			-					64,053			-
Other noninterest bearing liabilities		753			-					763			-
Total liabilities		1,165,300			2,212					861,612			1,882
Stockholders' equity		131,618			-					106,394			-
Total liabilities and                stockholders' equity	$	1,296,918		$	2,212				$	968,006		$	1,882
Net interest income				$	11,697							$	8,434
Interest rate spread (4)							3.77	%							3.61	%
Net interest margin (5)							3.89	%							3.72	%
Ratio of average interest-earning assets to average interest-bearing liabilities		115.60	%							113.86	%

(1)	Calculated net of deferred loan fees, loan discounts and loans-in-process. Non-accrual loans are included in average loans.
(2)	Includes FHLB and Federal Reserve Bank of St. Louis membership stock and related cash dividends.
(3)	Includes average balances for fixed assets and bank owned life insurance (BOLI) of $34.3 million and $19.5 million, respectively, for the three-month period ended March 31, 2015, as compared to $23.4 million and $18.9 million, respectively, for the same period of the prior fiscal year.
(4)	Interest rate spread represents the difference between the average rate on interest-earning assets and the average cost of interest-bearing liabilities.
(5)	Net interest margin represents net interest income divided by average interest-earning assets.

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	Nine-month period ended								Nine-month period ended
	March 31, 2015								March 31, 2014
(dollars in thousands)	Average Balance			Interest and Dividends		Yield/ Cost (%)			Average Balance			Interest and Dividends		Yield/ Cost (%)
Interest earning assets:
Mortgage loans (1)	$	797,772		$	30,293		5.06		$	555,710		$	21,102		5.06
Other loans (1)		209,312			8,267		5.27			164,996			6,572		5.31
Total net loans		1,007,084			38,560		5.11			720,706			27,674		5.12
Mortgage-backed securities		79,284			1,298		2.18			37,329			587		2.10
Investment securities (2)		73,753			1,528		2.76			78,211			1,438		2.45
Other interest earning assets		21,339			98		0.61			5,996			20		0.44
Total interest earning assets (1)		1,181,460			41,484		4.68			842,242			29,719		4.70
Other noninterest earning assets (3)		86,836			-					56,780			-
Total assets	$	1,268,296		$	41,484				$	899,022		$	29,719
Interest bearing liabilities:
Savings accounts	$	114,534			289		0.34		$	88,276			225		0.34
NOW accounts		299,945			1,755		0.78			236,417			1,469		0.83
Money market deposit accounts		77,997			142		0.24			24,485			131		0.71
Certificates of deposit		406,551			2,874		0.94			297,904			2,622		1.17
Total interest bearing deposits		899,027			5,060		0.75			647,082			4,447		0.92
Borrowings:
Securities sold under agreements       to repurchase		24,776			84		0.45			23,939			97		0.54
FHLB advances		88,427			973		1.47			58,417			814		1.86
Subordinated debt		13,933			379		3.63			8,774			223		3.39
Total interest bearing liabilities		1,026,163			6,496		0.84			738,212			5,581		1.01
Noninterest bearing demand deposits		114,731			-					55,343			-
Other noninterest bearing liabilities		1,167			-					1,138			-
Total liabilities		1,142,061			6,496					794,693			5,581
Stockholders' equity		126,235			-					104,329			-
Total liabilities and                stockholders' equity	$	1,268,296		$	6,496				$	899,022		$	5,581
Net interest income				$	34,988							$	24,138
Interest rate spread (4)							3.84	%							3.69	%
Net interest margin (5)							3.95	%							3.82	%
Ratio of average interest-earning assets to average interest-bearing liabilities		115.13	%							114.09	%

(1)	Calculated net of deferred loan fees, loan discounts and loans-in-process. Non-accrual loans are included in average loans.
(2)	Includes FHLB and Federal Reserve Bank of St. Louis membership stock and related cash dividends.
(3)	Includes average balances for fixed assets and BOLI of $31.6 million and $19.3 million, respectively, for the nine-month period ended March 31, 2015, as compared to $20.5 million and $17.3 million, respectively, for the same period of the prior fiscal year.
(4)	Interest rate spread represents the difference between the average rate on interest-earning assets and the average cost of interest-bearing liabilities.
(5)	Net interest margin represents net interest income divided by average interest-earning assets.

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Rate/Volume Analysis

The following tables set forth the effects of changing rates and volumes on the Company's net interest income for the three- and nine-month periods ended March 31, 2015. Information is provided with respect to (i) effects on interest income and expense attributable to changes in volume (changes in volume multiplied by the prior rate), (ii) effects on interest income and expense attributable to change in rate (changes in rate multiplied by prior volume), and (iii) changes in rate/volume (change in rate multiplied by change in volume).

	Three-month period ended March 31, 2015
	Compared to three-month period
	ended March 31, 2014, Increase (Decrease) Due to
							Rate/
(dollars in thousands)	Rate			Volume			Volume			Net
Interest-earnings assets:
Loans receivable (1)	$	(8	)	$	3,485		$	-		$	3,478
Mortgage-backed securities		8			137			4			149
Investment securities (2)		57			(83	)		(10	)		(36	)
Other interest-earning deposits		(3	)		7			(1	)		2
Total net change in income on
interest-earning assets		54			3,546			(7	)		3,593
Interest-bearing liabilities:
Deposits		(161	)		526			(103	)		263
Securities sold under
agreements to repurchase		(6	)		1			1			(4	)
Subordinated debt		1			42			-			42
FHLB advances		64			(29	)		(6	)		29
Total net change in expense on
interest-bearing liabilities		(102	)		540			(108	)		330
Net change in net interest income	$	156		$	3,006		$	101		$	3,263

	Nine-month period ended March 31, 2015
	Compared to nine-month period
	ended March 31, 2014, Increase (Decrease) Due to
							Rate/
(dollars in thousands)	Rate			Volume			Volume			Net
Interest-earnings assets:
Loans receivable (1)	$	(69	)	$	10,993		$	(38	)	$	10,886
Mortgage-backed securities		24			660			27			711
Investment securities (2)		183			(82	)		(11	)		90
Other interest-earning deposits		8			50			20			78
Total net change in income on
interest-earning assets		146			11,621			(2	)		11,765
Interest-bearing liabilities:
Deposits		(691	)		1,704			(400	)		613
Securities sold under
agreements to repurchase		(15	)		3			(1	)		(13	)
Subordinated debt		15			131			10			156
FHLB advances		(171	)		418			(88	)		159
Total net change in expense on
interest-bearing liabilities		(862	)		2,256			(479	)		915
Net change in net interest income	$	1,008		$	9,365		$	477		$	10,850

(1)	Does not include interest on loans placed on nonaccrual status.
(2)	Does not include dividends earned on equity securities.

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Results of Operations – Comparison of the three- and nine-month periods ended March 31, 2015 and 2014

General. Net income for the three- and nine-month periods ended March 31, 2015, was $3.4 million and $10.1 million, respectively, increases of $1.1 million, or 50.1%, and $2.8 million, or 37.9%, as compared to the same periods of the prior fiscal year.  After preferred dividends of $50,000 and $150,000, respectively, paid in the three- and nine-month periods ended March 31, 2015 and 2014, net income available to common shareholders was $3.3 million and $10.0 million, respectively, increases of $1.1 million, or 51.2%, and $2.8 million, or 38.7%, respectively as compared to the same periods of the prior fiscal year.

For the three-month period ended March 31, 2015, basic and diluted earnings per common share was $0.45 and $0.44, respectively, each an increase of $0.12, or 36.4% and 37.5% respectively, as compared to the same period of the prior fiscal year, with figures adjusted to reflect the 2-for-1 stock split in the form of a stock dividend paid January 30, 2015. Our annualized return on average assets for the three-month period ended March 31, 2015, was 1.04%, as compared to 0.93% for the same period of the prior fiscal year. For the three-month period ended March 31, 2015, annualized return on average assets excluding accretion of fair value discount on acquired loans and amortization of fair value premium on assumed time deposits related to the Fiscal 2011 Acquisition and the Peoples Acquisition was 0.92%, as compared to 0.90% for the same period of the prior fiscal year. Our annualized return on average common stockholders' equity for the three-month period ended March 31, 2015, was 11.9%, as compared to 10.2% in the same period of the prior fiscal year.

For the nine-month period ended March 31, 2015, basic and diluted earnings per common share was $1.36 and $1.33, respectively, each an increase of $0.27, or 24.8%, and 25.5% respectively, as compared to the same period of the prior fiscal year, with figures adjusted to reflect the 2-for-1 stock split in the form of a stock dividend paid January 30, 2015. Our annualized return on average assets for the nine-month period ended March 31, 2015, was 1.06%, as compared to 1.09% for the same period of the prior fiscal year. For the nine-month period ended March 31, 2015, annualized return on average assets excluding accretion of fair value discount on acquired loans and amortization of fair value premium on assumed time deposits related to the Fiscal 2011 Acquisition and the Peoples Acquisition was 0.94%, as compared to 1.04% for the same period of the prior fiscal year. Our annualized return on average common stockholders' equity for the nine-month period ended March 31, 2015, was 12.5%, as compared to 11.3% in the same period of the prior fiscal year.

Net Interest Income. Net interest income for the three-month and nine-month periods ended March 31, 2015, was $11.7 million and $35.0 million, respectively, increases of $3.3 million, or 38.7%, and $10.9 million, or 45.0%, as compared to the same periods of the prior fiscal year. Net interest income attributable to the accretion of fair value discount on acquired loans and amortization of fair value premium on assumed time deposits related to the Fiscal 2011 Acquisition was $69,000 and $244,000, respectively, in the current three- and nine-month periods, as compared to $109,000 and $481,000, respectively, in the same periods of the prior fiscal year. Net interest income attributable to the accretion of fair value discount on acquired loans and amortization of fair value premium on assumed time deposits related to the Peoples Acquisition was $558,000 and $1.7 million, respectively, in the current three- and nine-month periods, with no comparable accretion in the same periods of the prior fiscal year.

Our net interest margin for the three- and nine-month periods ended March 31, 2015, determined by dividing annualized net interest income by total average interest-earning assets, was 3.89% and 3.95%, respectively, as compared to 3.72% and 3.82%, respectively, in the same periods of the prior fiscal year. Our net interest margin excluding accretion of fair value discount on acquired loans and amortization of fair value premium on assumed time deposits related to the Fiscal 2011 Acquisition and the Peoples Acquisition was 3.68% and 3.73%, respectively, for the three-and nine-month periods ended March 31, 2015, as compared to 3.67% and 3.75%, respectively, for the same periods of the prior fiscal year. Our average net interest rate spread for the three- and nine-month periods ended March 31, 2015, was 3.77% and 3.84%, respectively, as compared to 3.61% and 3.69%, respectively, for the same periods of the prior fiscal year.

For the three-month period ended March 31, 2015, the improvement in net interest rate spread, compared to the same period a year ago, resulted from a nine basis point decrease in the average cost of interest-bearing liabilities, combined with a seven basis point increase in the average yield on interest-earning assets. This decline in rates paid was attributable to the continued generally low rate environment, while the increase in yields earned was attributable to an increase in the accretion of fair value discount on acquired loans, due to the Peoples Acquisition which closed in early August 2014, partially offset by continued repricing of assets in the low rate environment. Our

43

growth initiatives, including the Peoples Acquisition and the Fiscal 2014 Acquisitions, resulted in an increase of $296.7 million, or 32.7%, in the average balance of interest-earning assets, when comparing the three-month period ended March 31, 2015, with the same period of the prior fiscal year.

For the nine-month period ended March 31, 2015, the improvement in net interest rate spread, compared to the same period a year ago, resulted from a 17 basis point decrease in the average cost of interest-bearing liabilities, partially offset by a two basis point decrease in the average yield on interest-earning assets. The declines in yields earned and rates paid were attributable to the continued generally low rate environment, while the decline in yields earned was partially offset by the accretion of fair value discount on acquired loans, due to the Peoples Acquisition which closed in early August 2014. Our growth initiatives, including the Peoples Acquisition and the Fiscal 2014 Acquisitions, resulted in an increase of $339.2 million, or 40.3%, in the average balance of interest-earning assets, when comparing the nine-month period ended March 31, 2015, with the same period of the prior fiscal year.

Interest Income. Total interest income for the three- and nine-month periods ended March 31, 2015, was $13.9 million and $41.5 million, respectively, increases of $3.6 million, or 34.8%, and $11.8 million, or 39.6%, respectively, as compared to the same periods of the prior fiscal year. The increases were attributed to 32.7% and 40.3% increases, respectively, in the average balance of interest-earning assets for the three- and nine-month periods ended March 31, 2015, combined with an increase of seven basis points in the average yield earned on interest-earning assets in the three-month period, and partially offset by a two basis point decline in the average yield earned on interest-earning assets in the nine-month period, as compared to the same periods of the prior fiscal year. Increased average balances were attributed to our growth initiatives, including the Peoples Acquisition and the Fiscal 2014 Acquisitions. For the three-month period, the increase in yields on interest-earning assets was attributable to an increase in interest income generated from accretion of fair value discount on acquired loans, resulting from the Peoples Acquisition, which closed in early August 2014, partially offset by the repricing of assets in the continued low rate environment. For the nine-month period, the decrease in yields on interest-earning assets was attributable to the repricing of assets in the continued low rate environment, partially offset by the increase in interest income generated from accretion of fair value discount on acquired loans, resulting from the Peoples Acquisition.

Interest Expense. Total interest expense for the three- and nine-month periods ended March 31, 2015, was $2.2 million and $6.5 million, respectively, increases of $329,000, or 17.5%, and $915,000, or 16.4%, respectively, as compared to the same periods of the prior fiscal year. The increases were attributable to increases of $244.7 million, or 30.7%, and $288.0 million, or 39.0%, respectively, in the average balance of interest-bearing liabilities for the three- and nine-month periods ended March 31, 2015, partially offset by declines of nine and 17 basis points, respectively, in the average cost of interest-bearing liabilities, as compared to the same periods of the prior fiscal year. The growth in average balances was attributed to our growth initiatives, including the Peoples Acquisition and the Fiscal 2014 Acquisitions, while the decline in the average cost of interest-bearing liabilities was attributed to the repricing of liabilities in the continued low rate environment.

Provision for Loan Losses. The provision for loan losses for the three- and nine-month periods ended March 31, 2015, was $837,000 and $2.5 million, respectively, as compared to $253,000 and $1.0 million, respectively, in the same periods of the prior fiscal year. As a percentage of average loans outstanding, provision for loan losses in the current three- and nine-month periods represented an annualized charge of 0.32% and 0.33%, respectively, while the Company incurred annualized net charge offs in the three- and nine-month periods of 0.02% and 0.01%, respectively. During the same periods of the prior fiscal year, provision for loan losses as a percentage of average loans outstanding represented an annualized charge of 0.13% and 0.19%, respectively, while annualized net charge offs were 0.35% and 0.14%, respectively, for the three- and nine-month periods. The increase was primarily attributable to growth in loan balances and the migration of balances within the portfolio subject to allowance

Allowance for Loan Loss Activity

The Company regularly reviews its allowance for loan losses and makes adjustments to its balance based on management's analysis of the loan portfolio, the amount of non-performing and classified loans, as well as general economic conditions. Although the Company maintains its allowance for loan losses at a level that it considers sufficient to provide for losses, there can be no assurance that future losses will not exceed internal estimates. In addition, the amount of the allowance for loan losses is subject to review by regulatory agencies, which can order the establishment of additional loss provision. The following table summarizes changes in the allowance for loan losses over the three- and nine- month periods ended March 31, 2015 and 2014:

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	Three months ended						Nine months ended
	March 31,						March 31,
(dollars in thousands)	2015			2014			2015			2014
Balance, beginning of period	$	10,958		$	9,085		$	9,259		$	8,386
Loans charged off:
Residential real estate		(13	)		(127	)		(24	)		(150	)
Construction		-			-			-			-
Commercial business		(21	)		(503	)		(40	)		(517	)
Commercial real estate		(8	)		-			(9	)		(70	)
Consumer		(16	)		(33	)		(54	)		(50	)
Gross charged off loans		(58	)		(663	)		(127	)		(787	)
Recoveries of loans previously charged off:
Residential real estate		1			1			10			15
Construction		-			-			-			-
Commercial business		-			7			3			9
Commercial real estate		-			-			40			1
Consumer		5			4			32			15
Gross recoveries of charged off loans		6			12			85			40
Net charge offs		(52	)		(651	)		(42	)		(747	)
Provision charged to expense		837			253			2,526			1,048
Balance, end of period	$	11,743		$	8,687		$	11,743		$	8,687

The allowance for loan losses has been calculated based upon an evaluation of pertinent factors underlying the various types and quality of the Company's loans. Management considers such factors as the repayment status of a loan, the estimated net fair value of the underlying collateral, the borrower's intent and ability to repay the loan, local economic conditions, and the Company's historical loss ratios. We maintain the allowance for loan losses through the provision for loan losses that we charge to income. We charge losses on loans against the allowance for loan losses when we believe the collection of loan principal is unlikely. The allowance for loan losses increased $2.4 million to $11.7 million at March 31, 2015, from $9.3 million at June 30, 2014. The increase was deemed appropriate in order to bring the allowance for loan losses to a level that reflects management's estimate of the incurred loss in the Company's loan portfolio at March 31, 2015.

At March 31, 2015, the Company had loans of $13.2 million, or 1.25% of total  loans, adversely classified ($13.2 million classified "substandard"; none classified "doubtful" or "loss"), as compared to loans of $7.0 million, or 0.87% of total loans, adversely classified ($7.0 million classified "substandard"; none classified "doubtful" or "loss") at June 30, 2014, and $6.6 million, or 0.85% of total loans, adversely classified ($6.5 million classified "substandard"; $90,000 classified "doubtful"; and none classified "loss") at March 31, 2014. The increase was attributable primarily to the Peoples Acquisition. Classified loans were generally comprised of loans secured by commercial and residential real estate loans, while a smaller amount of commercial operating loans, consumer loans and construction loans were also classified. All loans were classified due to concerns as to the borrowers' ability to continue to generate sufficient cash flows to service the debt. Of our classified loans, the Company had ceased recognition of interest on loans with a carrying value of $4.1 million at March 31, 2015. As indicated in Note 4 to the condensed consolidated financial statements, the Company's total past due loans increased from $3.9 million at June 30, 2014, to $4.6 million at March 31, 2015.  The increase was attributable primarily to the Peoples Acquisition.

In its quarterly evaluation of the adequacy of its allowance for loan losses, the Company employs historical data including past due percentages, charge offs, and recoveries for the previous five years for each loan category. The Company's allowance methodology considers the most recent twelve-month period's average net charge offs and uses this information as one of the primary factors for evaluation of allowance adequacy. Average net charge offs are calculated as net charge offs by portfolio type for the period as a percentage of the average balance of respective portfolio type over the same period.

45

The following table sets forth the Company's historical net charge offs as of March 31, 2015 and June 30, 2014:

	March 31, 2015			June 30, 2014
	Net charge offs –			Net charge offs –
Portfolio segment	12-month historical			12-month historical
Real estate loans:
Residential		0.01	%		0.06	%
Construction		0.00	%		0.00	%
Commercial		0.00	%		0.03	%
Consumer loans		0.15	%		0.26	%
Commercial loans		0.01	%		0.44	%

Additionally, in its quarterly evaluation of the adequacy of the allowance for loan losses, the Company evaluates changes in the financial condition of individual borrowers; changes in local, regional, and national economic conditions; the Company's historical loss experience; and changes in market conditions for property pledged to the Company as collateral. The Company has identified specific qualitative factors that address these issues and subjectively assigns a percentage to each factor. Qualitative factors are reviewed quarterly and may be adjusted as necessary to reflect improving or declining trends. At March 31, 2015, these qualitative factors included:

· 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

· Regulatory risk

The qualitative factors are applied to the allowance for loan losses based upon the following percentages by loan type:

Portfolio segment	Qualitative factor applied at interim period ended March 31, 2015			Qualitative factor applied at fiscal year ended June 30, 2014
Real estate loans:
Residential		0.77	%		0.78	%
Construction		1.84	%		1.67	%
Commercial		1.35	%		1.33	%
Consumer loans		1.43	%		1.39	%
Commercial loans		1.40	%		1.29	%

At March 31, 2015, the amount of our allowance for loan losses attributable to these qualitative factors was approximately $10.6 million, as compared to $8.6 million at June 30, 2014. The relative stability in qualitative factors was attributed to stable credit quality, classifications, and delinquencies within the legacy portfolio.

While management believes that our asset quality remains strong, it recognizes that, due to the continued growth in the loan portfolio and potential changes in market conditions, our level of nonperforming assets and resulting charge offs may fluctuate. Higher levels of net charge offs requiring additional provision for loan losses could result. Although management uses the best information available, the level of the allowance for loan losses remains an estimate that is subject to significant judgment and short-term change.

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Nonperforming Assets

The ratio of nonperforming assets to total assets and nonperforming loans to net loans receivable is another measure of asset quality. Nonperforming assets of the Company include nonaccruing loans, accruing loans delinquent/past maturity 90 days or more, and assets which have been acquired as a result of foreclosure or deed-in-lieu of foreclosure. The table below summarizes changes in the Company's level of nonperforming assets over selected time periods:

(dollars in thousands)	March 31, 2015		June 30, 2014		March 31, 2014
Nonaccruing loans:
Residential real estate	$	2,334	$	444	$	448
Construction		132		-		411
Commercial real estate		1,490		673		669
Consumer		143		58		66
Commercial business		101		91		385
Total		4,200		1,266		1,979
Loans 90 days past due
accruing interest:
Residential real estate		127		106		-
Commercial real estate		-		18		-
Consumer		10		6		-
Commercial business		-		-		-
Total		137		130		-
Total nonperforming loans		4,337		1,396		1,979
Nonperforming investments		-		-		125
Foreclosed assets held for sale:
Real estate owned		4,291		2,912		2,969
Other nonperforming assets		36		65		39
Total nonperforming assets	$	8,664	$	4,373	$	5,112

At March 31, 2015, troubled debt restructurings (TDRs) totaled $6.6 million, of which $3.0 million was considered nonperforming and was included in the nonaccrual loan total above. The remaining $3.6 million in TDRs have complied with their modified terms for a reasonable period of time and are therefore considered by the Company to be accrual status loans. In general, these performing loans were subject to classification as TDRs at March 31, 2015, on the basis 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. At June 30, 2014, TDRs totaled $5.1 million, of which $300,000 was considered nonperforming and was included in the nonaccrual loan total above. The remaining $4.8 million in TDRs at June 30, 2014, had complied with their modified terms for a reasonable period of time and were therefore considered by the Company to be accrual status loans.

At March 31, 2015, nonperforming assets totaled $8.7 million, as compared to $4.4 million at June 30, 2014, and $5.1 million at March 31, 2014. The increase in nonperforming assets from fiscal year end was attributed primarily to $1.7 million in nonaccrual loans (at fair value) and $1.0 million in foreclosed real estate obtained in the Peoples Acquisition, combined with the migration to nonaccrual status of a previously classified loan relationship, with a carrying value of $2.0 million, assumed by the Company in its Fiscal 2011 Acquisition.

Liquidity Resources

The term "liquidity" refers to our ability to generate adequate amounts of cash to fund loan originations, loan purchases, deposit withdrawals and operating expenses. Our primary sources of funds include deposit growth, securities sold under agreements to repurchase, FHLB advances, brokered deposits, amortization and prepayment of loan principal and interest, investment maturities and sales, and funds provided by our operations. While the scheduled loan repayments and maturing investments are relatively predictable, deposit flows, FHLB advance redemptions, and loan and security prepayment rates are significantly influenced by factors outside the Bank's control, including interest rates, general and local economic conditions and competition. The Bank relies on FHLB advances and brokered deposits as additional sources for funding cash or liquidity needs.

47

The Company uses its liquid resources principally to satisfy its ongoing cash requirements, which include funding loan commitments, funding maturing certificates of deposit and deposit withdrawals, maintaining liquidity, funding maturing or called FHLB advances, purchasing investments, and meeting operating expenses.

At March 31, 2015, the Company had outstanding commitments and approvals to extend credit of approximately $121.3 million (including $99.0 million in unused lines of credit) in mortgage and non-mortgage loans. These commitments and approvals are expected to be funded through existing cash balances, cash flow from normal operations and, if needed, advances from the FHLB or the Federal Reserve's discount window. At March 31, 2015, the Bank had pledged residential real estate loan portfolios and a significant portion of its commercial real estate loan portfolios with the FHLB for available credit of approximately $347.7 million, of which $64.2 million had been advanced. The Bank has the ability to pledge several of its other loan portfolios, including, for example, its commercial and home equity loans, which could provide additional collateral for additional borrowings; in total, FHLB borrowings are generally limited to 35% of bank assets, or $456.0 million, subject to available collateral. Also, at March 31, 2015, the Bank had pledged a total of $117.1 million in loans secured by farmland and agricultural production loans to the Federal Reserve, providing access to $78.4 million in primary credit borrowings from the Federal Reserve's discount window. Management believes its liquid resources will be sufficient to meet the Company's liquidity needs.

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 regulatory accounting practices. 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's and Bank's regulators could require adjustments to regulatory capital not reflected in the condensed consolidated financial statements.

Quantitative measures established by regulation 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, and common equity Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average total assets (as defined). Management believes, as of March 31, 2015, that the Company and the Bank met all capital adequacy requirements to which they are subject.

In July 2013, the Federal banking agencies announced their approval of the final rule to implement the Basel III regulatory reforms, among other changes required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The approved rule includes a new minimum ratio of common equity Tier 1 (CET1) capital of 4.5%, raises the minimum ratio of Tier 1 capital to risk-weighted assets from 4.0% to 6.0%, and includes a minimum leverage ratio of 4.0% for all banking institutions. Additionally, the rule creates a capital conservation buffer of 2.5% of risk-weighted assets, and prohibits banking organizations from making distributions or discretionary bonus payments during any quarter if its eligible retained income is negative, if the capital conservation buffer is not maintained. The phase-in of the enhanced capital requirements for banking organizations such as the Company and the Bank began January 1, 2015. Other changes included revised risk-weighting of some assets, stricter limitations on mortgage servicing assets and deferred tax assets, and replacement of the ratings-based approach to risk weight securities.

As of March 31, 2015, 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.

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

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
As of March 31, 2015	Amount		Ratio			Amount		Ratio			Amount			Ratio
(dollars in thousands)
Total Capital (to Risk-Weighted Assets)
Consolidated	$	154,133		13.74	%	$	89,752		8.00	%		n/	a		n/	a
Southern Bank		145,917		13.09	%		89,198		8.00	%		111,497			10.00	%
Tier I Capital (to Risk-Weighted Assets)
Consolidated		141,627		12.62	%		67,314		6.00	%		n/	a		n/	a
Southern Bank		134,174		12.03	%		66,898		6.00	%		89,198			8.00	%
Tier I Capital (to Average Assets)
Consolidated		141,627		10.93	%		51,815		4.00	%		n/	a		n/	a
Southern Bank		134,174		10.44	%		51,389		4.00	%		64,237			5.00	%
Common Equity Tier I Capital (to Risk-Weighted Assets)
Consolidated		106,992		9.54	%		58,292		4.50	%		n/	a		n/	a
Southern Bank		134,174		12.03	%		57,813		4.50	%		83,508			6.50	%
	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
As of June 30, 2014	Amount		Ratio			Amount		Ratio			Amount			Ratio
(dollars in thousands)
Total Capital (to Risk-Weighted Assets)
Consolidated	$	125,930		16.38	%	$	61,522		8.00	%		n/	a		n/	a
Southern Bank		114,811		15.07	%		60,968		8.00	%		76,211			10.00	%
Tier I Capital (to Risk-Weighted Assets)
Consolidated		116,314		15.12	%		30,762		4.00	%		n/	a		n/	a
Southern Bank		105,281		13.81	%		30,484		4.00	%		45,726			6.00	%
Tier I Capital (to Average Assets)
Consolidated		116,314		11.71	%		39,743		4.00	%		n/	a		n/	a
Southern Bank		105,281		10.69	%		39,379		4.00	%		49,224			5.00	%

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PART I:  Item 3:  Quantitative and Qualitative Disclosures About Market Risk

SOUTHERN MISSOURI BANCORP, INC.

Asset and Liability Management and Market Risk

The goal of the Company's asset/liability management strategy is to manage the interest rate sensitivity of both interest-earning assets and interest-bearing liabilities in order to maximize net interest income without exposing the Bank to an excessive level of interest rate risk. The Company employs various strategies intended to manage the potential effect that changing interest rates may have on future operating results. The primary asset/liability management strategy has been to focus on matching the anticipated re-pricing intervals of interest-earning assets and interest-bearing liabilities. At times, however, depending on the level of general interest rates, the relationship between long- and short-term interest rates, market conditions and competitive factors, the Company may determine to increase its interest rate risk position somewhat in order to maintain its net interest margin.

In an effort to manage the interest rate risk resulting from fixed rate lending, the Bank has utilized longer term FHLB advances (with maturities up to ten years), subject to early redemptions and fixed terms. Other elements of the Company's current asset/liability strategy include (i) increasing originations of commercial business, commercial real estate, agricultural operating lines, and agricultural real estate loans, which typically provide higher yields and shorter repricing periods, but inherently increase credit risk; (ii) actively soliciting less rate-sensitive deposits, including aggressive use of the Company's "rewards checking" product, and (iii) offering competitively-priced money market accounts and CDs with maturities of up to five years. The degree to which each segment of the strategy is achieved will affect profitability and exposure to interest rate risk.

The Company continues to originate long-term, fixed-rate residential loans. During the first nine months of fiscal year 2015, fixed rate 1- to 4-family residential loan production totaled $24.9 million, as compared to $24.7 million during the same period of the prior fiscal year. At March 31, 2015, the fixed rate residential loan portfolio was $139.3 million with a weighted average maturity of 125 months, as compared to $107.6 million at March 31, 2014, with a weighted average maturity of 172 months. The Company originated $25.6 million in adjustable-rate 1- to 4-family residential loans during the nine-month period ended March 31, 2015, as compared to $25.8 million during the same period of the prior fiscal year. At March 31, 2015, fixed rate loans with remaining maturities in excess of 10 years totaled $41.3 million, or 3.9% of net loans receivable, as compared to $48.7 million, or 6.3% of net loans receivable at March 31, 2014. The Company originated $145.0 million in fixed rate commercial and commercial real estate loans during the nine-month period ended March 31, 2015, as compared to $74.7 million during the same period of the prior fiscal year.  The Company also originated $32.1 million in adjustable rate commercial and commercial real estate loans during the nine-month period ended March 31, 2015, as compared to $45.3 million during the same period of the prior fiscal year. At March 31, 2015, adjustable-rate home equity lines of credit were $22.6 million, as compared to $17.8 million at March 31, 2014. At March 31, 2015, the Company's investment portfolio had an expected weighted-average life of 4.7 years, down from 5.4 years at March 31, 2014. Management continues to focus on customer retention, customer satisfaction, and offering new products to customers in order to increase the Company's amount of less rate-sensitive deposit accounts.

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Interest Rate Sensitivity Analysis

The following table sets forth as of March 31, 2015, management's estimates of the projected changes in net portfolio value ("NPV") in the event of 100, 200, and 300 basis point ("bp") instantaneous and permanent increases, and 100, 200, and 300 basis point instantaneous and permanent decreases in market interest rates. Dollar amounts are expressed in thousands.

March 31, 2015
BP Change		Estimated Net Portfolio Value					NPV as % of PV of Assets
in Rates		$ Amount	$ Change		% Change		NPV Ratio		Change
+300	$	107,970	(27,962	)	-21	%	8.46	%	-1.94	%
+200		117,605	(18,328	)	-13	%	9.14	%	-1.26	%
+100		126,153	(9,780	)	-7	%	9.73	%	-0.67	%
NC		135,933	-			-	10.40	%		-
-100		146,251	10,319		8	%	11.09	%	0.69	%
-200		157,634	21,702		16	%	11.85	%	1.46	%
-300		168,822	32,889		24	%	12.59	%	2.19	%

June 30, 2014
BP Change		Estimated Net Portfolio Value						NPV as % of PV of Assets
in Rates		$ Amount		$ Change		% Change		NPV Ratio		Change
+300	$	93,966	$	(20,788	)	-18	%	9.32	%	-1.77	%
+200		101,125		(13,628	)	-12	%	9.95	%	-1.15	%
+100		107,345		(7,409	)	-6	%	10.48	%	-0.62	%
NC		114,754		-			-	11.10	%		-
-100		123,482		8,728		8	%	13.49	%	0.74	%
-200		132,190		17,436		15	%	13.96	%	1.48	%
-300		140,398		25,644		22	%	14.47	%	2.17	%

Computations of prospective effects of hypothetical interest rate changes are based on an internally generated model using actual maturity and repricing schedules for the Bank's loans and deposits, and are based on numerous assumptions, including relative levels of market interest rates, loan repayments and deposit run-offs, and should not be relied upon as indicative of actual results. Further, the computations do not contemplate any actions the Bank's may undertake in response to changes in interest rates.

Management cannot predict future interest rates or their effect on the Bank's NPV in the future. Certain shortcomings are inherent in the method of analysis presented in the computation of NPV. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in differing degrees to changes in market interest rates. Additionally, certain assets, such as adjustable-rate loans, have an initial fixed rate period typically from one to seven years and over the remaining life of the asset changes in the interest rate are restricted. In addition, the proportion of adjustable-rate loans in the Bank's portfolios could decrease in future periods due to refinancing activity if market interest rates remain steady in the future. Further, in the event of a change in interest rates, prepayment and early withdrawal levels could deviate significantly from those assumed in the table. Finally, the ability of many borrowers to service their adjustable-rate debt may decrease in the event of an interest rate increase.

The Bank's Board of Directors (the "Board") is responsible for reviewing the Bank's asset and liability policies. The Board's Asset/Liability Committee meets monthly to review interest rate risk and trends, as well as liquidity and capital ratios and requirements. The Bank's management is responsible for administering the policies and determinations of the Board with respect to the Bank's asset and liability goals and strategies.

51

PART I:  Item 4:  Controls and Procedures

SOUTHERN MISSOURI BANCORP, INC.

An evaluation of Southern Missouri Bancorp's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, (the "Act")) as of March 31, 2015, was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, and several other members of our senior management. The Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2015, the Company's disclosure controls and procedures were effective in ensuring that the information required to be disclosed by the Company in the reports it files or submits under the Act is (i) accumulated and communicated to management (including the Chief Executive and Financial Officer) in a timely manner, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Act) that occurred during the quarter ended March 31, 2015, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The Company does not expect that its disclosures and procedures will prevent all error and all fraud. A control procedure, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control procedure are met. Because of the inherent limitations in all control procedures, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any control procedure also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control procedure, misstatements due to error or fraud may occur and not be detected.

52

PART II: Other Information

SOUTHERN MISSOURI BANCORP, INC.

Item 1:  Legal Proceedings

In the opinion of management, the Company is not a party to any pending claims or lawsuits that are expected to have a material effect on the Company's financial condition or operations. Periodically, there have been various claims and lawsuits involving the Company mainly as a defendant, such as claims to enforce liens, condemnation proceedings on properties in which the Company holds security interests, claims involving the making and servicing of real property loans and other issues incident to the Bank's business. Aside from such pending claims and lawsuits, which are incident to the conduct of the Company's ordinary business, the Company is not a party to any material pending legal proceedings that would have a material effect on the financial condition or operations of the Company.

Item 1a:  Risk Factors

There have been no material changes to the risk factors set forth in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended June 30, 2014.

Item 2:  Unregistered Sales of Equity Securities and Use of Proceeds

Period	Total Number of Shares (or Units) Purchased	Average Price Paid per Share (or Unit)	Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet be Purchased Under the Plans or Program
1/1/2015 thru 1/31/2015	-	-	-	-
2/01/2015 thru 2/28/2015	-	-	-	-
3/1/2015 thru 3/31/2015	-	-	-	-
Total	-	-	-	-

Item 3:  Defaults upon Senior Securities

Not applicable

Item 4:  Mine Safety Disclosures

Not applicable

Item 5:  Other Information

None

53

Item 6:  Exhibits

3	(a)(i)	Articles of Incorporation of the Registrant+
3	(a)(ii)	Amendment to Articles of Incorporation of the Registrant increasing the authorized capital stock of the Registrant++
3	(b)	Certificate of Designation for the Registrant's Senior Non-Cumulative Perpetual Preferred Stock, Series A+++
3	(c)	Bylaws of the Registrant++++
4		Form of Stock Certificate of Southern Missouri Bancorp+++++
10		Material Contracts
	(a)	Registrant's 2008 Equity Incentive Plan++++++
	(b)	Registrant's 2003 Stock Option and Incentive Plan+++++++
	(c)	Southern Missouri Savings Bank, FSB Management Recognition and Development Plan++++++++
	(d)	Employment Agreements
		(i)	Greg A. Steffens*
	(e)	Director's Retirement Agreements
		(i)	Sammy A. Schalk**
		(ii)	Ronnie D. Black**
		(iii)	L. Douglas Bagby**
		(iv)	Rebecca McLane Brooks***
		(v)	Charles R. Love***
		(vi)	Charles R. Moffitt***
		(vii)	Dennis Robison****
		(viii)	David Tooley*****
		(ix)	Todd E. Hensley******
	(f)	Tax Sharing Agreement
31.1		Rule 13a-14(a) Certification of Principal Executive Officer
31.2		Rule 13a-14(a) Certification of Principal Financial Officer
32		Section 1350 Certification
101		Attached as Exhibit 101 are the following financial statements from the Southern Missouri Bancorp, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, formatted in Extensive Business Reporting Language (XBRL): (i) consolidated balance sheets, (ii) consolidated statements of income, (iii) consolidated statements of cash flows and (iv) the notes to consolidated financial statements.

+	Filed as an exhibit to the Registrant's Annual Report on Form 10-KSB for the year ended June 30, 1999.
++	Filed as an exhibit to the Registrant's Current Report on Form 8-K filed on July 26, 2011.
+++	Filed as an exhibit to the Registrant's Quarterly Report on Form 10-Q/A for the quarter ended September 30, 2014, filed on November 17, 2014.
++++	Filed as an exhibit to the Registrant's Current Report on Form 8-K filed on December 6, 2007.
+++++	Filed as an exhibit to the Registrant's Registration Statement on Form S-1 (File No. 333-2320) as filed with the SEC on January 3, 1994.
++++++	Field as an attachment to the Registrant's definitive proxy statement filed on September 19, 2008.
+++++++	Filed as an attachment to the Registrant's definitive proxy statement filed on September 17, 2003.
++++++++	Filed as an attachment to the Registrant's 1994 Annual Meeting Proxy Statement dated October 21, 1994.
*	Filed as an exhibit to the Registrant's Annual Report on Form 10-KSB for the year ended June 30, 1999.
**	Filed as an exhibit to the Registrant's Quarterly Report on Form 10-QSB for the quarter ended December 31, 2000.
***	Filed as an exhibit to the Registrant's Quarterly Report on Form 10-QSB for the quarter ended December 31, 2004.
****	Filed as an exhibit to the Registrant's Quarterly Report on Form 10-Q for the quarter ended December 31, 2008.
*****	Filed as an exhibit to the Registrant's Quarterly Report on Form 10-Q for the quarter ended December 31, 2011.
******	Filed as an exhibit to the Registrant's Annual Report on Form 10-K for the year ended June 30, 2014.

54

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SOUTHERN MISSOURI BANCORP, INC.
	Registrant
Date:  May 11, 2015	/s/ Greg A. Steffens
	Greg A. Steffens
	President & Chief Executive Officer
	(Principal Executive Officer)
Date:  May 11, 2015	/s/ Matthew T. Funke
	Matthew T. Funke
	Executive Vice President & Chief Financial Officer
	(Principal Financial and Accounting Officer)

55

EX-10.(F)

EXHIBIT 10(f)

TAX ALLOCATION AGREEMENT

This Agreement is entered into as of April 21, 2015, among the following parties:  SOUTHERN MISSOURI BANCORP, INC. ("SMBC"), a Missouri Corporation, and SOUTHERN BANK (the Bank), a Missouri chartered trust company with banking powers.  The parties are members ("Members") of an affiliated group ("Affiliated Group") within the meaning of Section 1504 of the Internal Revenue Code ("Code") and file a consolidated return for federal income tax purposes.  SMBC is the common parent of the Affiliated Group.  The parties desire to provide for the allocation of tax liabilities among the Members and to provide for reimbursing Members whose tax losses or credits reduce the consolidated taxable income.  References herein to "regulations" shall be to the Treasury Regulations.  References herein to "tax liabilities" are to current tax liabilities and not deferred tax liabilities; however, the Bank shall not transfer any of its deferred tax liabilities to SMBC through cash payments or by any other means, nor shall SMBC forgive any portion of any deferred tax liability of the Bank.  In addition, references herein to "tax liabilities" do not include accrued income tax liabilities, including portions thereof subject to deferral due to use by any Members of different methods or reporting for financial statement and tax return purposes.

The parties hereto agree as follows:

1.The parties agree to continue to file consolidated federal income tax returns in accordance with the provisions of Sections 1502 and 1504 of the Code and the regulations thereunder.

2.The parties agree to allocate total federal income tax liability based on the ratio that each member's separate return tax liability for the taxable year bears to the sum of the separate return tax liability of each of the Members.  Moreover, the parties agree to reimburse any Member which has tax losses or credits in an amount equal to 100 percent of the tax benefits realized by the Affiliated Group as a result of the utilization of such Member's tax losses or credits.  Accordingly, the parties agree to allocate tax liability of the Affiliated Group in accordance with Section 1.1552-1(a)(2) and 1.1502-33(d)(2)(ii) of the Regulations, and for this purpose the percentage referred to in Section 1.1502-33(d)(2)(ii)(b) shall be 100 percent.  Unless applicable law, regulation or policy provides otherwise, if the Bank incurs a tax loss that it may carry back on a stand alone basis to offset taxable income of prior years, the Bank shall record a current tax benefit and shall receive a prompt refund from SMBC.

3.If the Bank incurs a current year tax loss that it may not carryback on a stand alone basis to obtain a current year refund and if that tax loss is used in the current tax year to reduce the consolidated tax liability of the Affiliated Group, then the Bank shall record a current year tax benefit and shall receive prompt payment from SMBC.

4.If a tax loss of the Bank from a prior year may not be used on a stand-alone basis by the Bank and is used in the current consolidated tax return of the Affiliated Group to offset current income of the Affiliated Group, the Bank shall record a tax benefit and shall receive prompt payment from SMBC.

5.Any Alternative Minimum Tax ("AMT") liability shall be determined on a consolidated basis.  Any AMT liability in excess of the consolidated tax liability of the Affiliated Group shall be allocated to the Members on an equitable and consistent basis.  Any AMT liability shall not be allocated to the Bank if its tax liability equaled or exceeded the AMT liability on a stand alone basis.

6.Under Treasury Regulations Section 1.1502-77(a), SMBC is the agent for all the Members and is required to act for the Affiliated Group in connection with matters relating to the consolidated tax liability of the Affiliated Group.  In particular, SMBC shall be responsible for filing returns with the Internal Revenue Service, making elections, receiving all correspondence, filing claims for refund, contesting proposed

adjustments and performing such other acts and deeds as SMBC may deem necessary and desirable in connection with the foregoing.  The parties hereto agree to provide SMBC with such information as SMBC may request in order to permit SMBC to carry out its responsibilities described in this paragraph.

7.The parties agree that SMBC shall be responsible for making tax payments to the Internal Revenue Service.  At such time as SMBC makes payments to the Internal Revenue Service for any taxes (including estimated taxes), but in no event earlier than 5 days prior to the date on which the tax payments of the Affiliated Group are due to the Internal Revenue Service, each Member shall pay to SMBC an amount, including any interest thereon paid to the Internal Revenue Service, equal to its share of such payments as determined under paragraph 2.  Any overpayment of tax of the Affiliated Group shall be paid or credited by the Internal Revenue Service to SMBC and SMBC shall pay such amount, including interest thereon paid by the Internal Revenue Service, to the appropriate member immediately upon receipt.  SMBC shall immediately pay or credit to the appropriate Member any portion of such overpayment and any interest thereon paid by the Internal Revenue Service to which such Member is entitled.  Any adjustment by the Internal Revenue Service which affects either the consolidated tax liability or the relative tax liabilities of members shall be made among the Members immediately after the amount of the adjustment is determined.  If there are any penalties (including penalty for failure to pay estimated taxes) with respect to the filing of any consolidated return, the penalty shall be shared appropriately among those parties whose action or inaction (such as understating taxable income) contributed to the penalty.

8.In the event of any adjustment of tax returns of the Members as filed by reason of filing an amended return or claim for refund, or arising out of an audit by the Internal Revenue Service, the liability of the Members to each other and to the Internal Revenue Service for any period covered by this Agreement shall be redetermined after fully giving effect to any such adjustments as if such adjustments had been made as part of original computations.  Payments or credits between the Members shall be made at the time of any payment of tax or receipt of refund or credit from the Internal Revenue Service with respect to such adjustments, and such payments, refunds or credits shall include any interest attributable to such adjustments.

9.The parties acknowledge that they file a single combined report for Missouri franchise tax purposes.  The parties agree to a tax allocation method for Missouri franchise tax purposes comparable to that described in this agreement for federal income tax purposes.

10.The parties agree that it is their express intent that this Agreement shall at all times be construed in a manner consistent with any law or regulation applicable to any Member as now or hereafter in effect relating to savings banks, the insurance of their accounts or savings bank holding companies.  Anything to the contrary herein notwithstanding, (1) the Bank shall not pay to Members an amount greater than the tax which it would have been required to pay had it filed a separate tax return, taking maximum advantage of available reductions in taxable income; (2) any payments made pursuant to this Agreement shall be made only at the time taxes are actually paid or refunds or credits are actually received, it being understood that the Bank shall at no time make advance payments with respect to the foregoing to any Member; (3) any funds (i) received by SMBC from any Member for the payment by SMBC of taxes or (ii) received by SMBC from any taxing authority by reason of any refund, credit or overpayment and properly allocable to another Member, shall at all times be held by SMBC in a segregated account solely as agent for such Member and shall at no time be commingled with any other funds held by SMBC; and (4) appropriate refunds from SMBC to the Bank shall be made in the event that a loss by the Bank would have resulted in a refund from taxing authorities if the Bank had filed on a separate entity basis.

11.SMBC is an agent for the Bank with respect to all matters related to consolidated tax returns and refund claims, and nothing in this agreement shall be construed to alter or modify this agency relationship. If SMBC receives a tax refund from a taxing authority, these funds are obtained as agent for the Bank. Any tax

2

refund attributable to income earned, taxes paid, and losses incurred by the Bank is the property of and owned by the Bank, and shall be held in trust by SMBC for the benefit of the Bank. SMBC shall forward promptly the amounts held in trust to the Bank. Nothing in this agreement is intended to be or should be construed to provide SMBC with an ownership interest in a tax refund that is attributable to income earned, taxes paid, and losses incurred by the Bank. SMBC hereby agrees that this tax sharing agreement does not give it an ownership interest in a tax refund generated by the tax attributes of the Bank.

12.The Members which will be reimbursed for tax losses and credits and the Members making such reimbursement may change from time to time, depending upon the relationship of each Member's tax liability and tax losses and credits to those of the Affiliated Group.  Except as Section 12 hereof may otherwise require, each Member shall be treated in a manner identical to each other Member.

13.At any time the Bank or its successor, regardless of its subsidiary position within the Affiliated Group, may withdraw, without cause, from this Agreement upon 30 days written notice to any or all of its parent corporations.

14.Except as provided by Section 10 hereof or otherwise by applicable law or regulation, this Agreement shall be binding on or inure to the benefit of any successors to any of the parties hereto.  In no event, however, shall this Agreement be binding on and inure to the benefit of any successor of any of the parties hereto is such successor was created specifically at the behest of an agency of the Federal government.

15.Subject to Sections 14 and 15 hereof, in the event any corporation subsequently becomes an includible corporation of the Affiliated Group, the parties agree to use their best efforts to cause such corporation to become a party to this Agreement and to be subject to all the terms and conditions hereof.

16.This Agreement shall remain in effect with respect to any party hereto for any taxable year or part thereof for which consolidated returns are filed by SMBC as a common parent corporation and such party is an includible corporation in such consolidated return.

17.This Agreement shall be governed by the laws of the State of Missouri, except to the extent that Federal law shall apply.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

SOUTHERN MISSOURI BANCORP, INC.
BY:	/s/ Doug Bagby
	DOUG BAGBY
	Chairman of the Board
SOUTHERN BANK
BY:	/s/ Sammy A. Schalk
	SAMMY A. SCHALK
	Chairman of the Board

3

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Greg A. Steffens, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Southern Missouri Bancorp, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a- 15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))  for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:   May 11, 2015	By:	/s/ Greg A. Steffens
		Greg A. Steffens
		President & Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Matthew T. Funke, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Southern Missouri Bancorp, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a- 15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))  for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:   May 11, 2015	By:	/s/ Matthew T. Funke
		Matthew T. Funke
		Executive Vice President & Chief Financial Officer
		(Principal Financial Officer)

EX-32

EXHIBIT 32

CERTIFICATION

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned hereby certifies in his capacity as an officer of Southern Missouri Bancorp, Inc. (the "Company") that the quarterly report of the Company on Form 10-Q for the quarter ended March 31, 2015, fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the financial statements included in such report.

Date:   May 11, 2015	By:	/s/ Greg A. Steffens
		Greg A. Steffens
		President & Chief Executive Officer
		(Principal Executive Officer)
Date:   May 11, 2015	By:	/s/ Matthew T. Funke
		Matthew T. Funke
		Executive Vice President & Chief Financial Officer
		(Principal Financial Officer)

XML

Note 2: Organization and Summary of Significant Accounting Policies: Reclassification Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Reclassification Policy

Reclassification. Certain amounts included in the prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on net income.

XML

Note 9: 401(k) Retirement Plan: Pension and Other Postretirement Plans, Policy (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Details
Defined Benefit Plan, Contributions by Employer	$ 207	$ 128	$ 495	$ 389

XML

Note 14: Subsequent Events: Subsequent Events, Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Subsequent Events, Policy

On May 8, 2015, Treasury notified the Company that it had accepted the Company’s offer to repurchase for $2.7 million the warrant held by Treasury for the purchase of 231,891 shares of the Company’s common stock at an exercise price of $6.18 per share. As indicated in Note 11, the warrant was issued by the Company to Treasury on December 5, 2008, as part of the Company’s participation in the TARP Capital Purchase Program.  Settlement for the repurchase of the warrant is expected to occur on or about May 13, 2015.

XML

Note 4: Loans and Allowance For Loan Losses: Purchased Credit Impaired Loans Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Purchased Credit Impaired Loans Policy

At March 31, 2015, purchased credited impaired loans included above comprised $5.2 million of loans rated “Pass”; $6.8 million of loans rated “Watch”; no loans rated “Special Mention”; $7.4 million of loans rated “Substandard”; and no loans rated “Doubtful”. At June 30, 2014,  purchased credit impaired loans accounted for $409,000 of loans rated “Pass”; no loans rated “Watch”; no loans rated “Special Mention”; $2.7 million of loans rated “Substandard”; and no loans rated “Doubtful”.

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 “Special Mention”, “Substandard”, or “Doubtful”. In addition, lending relationships over $250,000 are subject to an independent loan review following origination, and lending relationships in excess of $2.5 million are subject to an independent loan review annually, as are a sample of lending relationships between $1.0 million and $2.5 million, 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. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

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.

XML

Note 13: Acquisitions: Business Acquisition, Pro Forma Information (Details) (Peoples Bank, USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Peoples Bank
Business Acquisition Pro Forma Interest Income	$ 13,909	$ 13,161	$ 42,551	$ 38,790
Business Acquisition Pro Forma Interest Expense	2,212	2,204	6,594	6,686
Business Acquisition Pro Forma Interest Income, Net	11,697	10,957	35,957	32,104
Business Acquisition Pro Forma Provision for Loan Losses	837	253	2,526	1,048
Business Acquisition Pro Forma Noninterest Income	2,094	1,854	6,376	5,477
Business Acquisition Pro Forma Noninterest Expense	8,091	9,107	26,063	24,743
Business Acquisition Pro Forma Income Taxes	1,497	940	4,264	3,410
Business Acquisition, Pro Forma Net Income (Loss)	3,366	2,511	9,480	8,380
Business Acquisition Pro Forma Dividends on Preferred Shares	50	50	150	150
Business Acquisition Pro Forma Net Income Available to Common Stockholders	$ 3,316	$ 2,461	$ 9,330	$ 8,230
Business Acquisition, Pro Forma Earnings Per Share, Basic	$ 0.45	$ 0.34	$ 1.25	$ 1.13
Business Acquisition, Pro Forma Earnings Per Share, Diluted	$ 0.44	$ 0.33	$ 1.23	$ 1.10
Business Acquisition Pro Forma Weighted Average Shares Outstanding Basic	7,413,257	7,315,266	7,442,084	7,283,634
Business Acquisition Pro Forma Weighted Average Shares Outstanding Diluted	7,603,917	7,538,606	7,630,789	7,489,342

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Note 6: Deposits: Schedule of Deposits (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Deposits

	March 31, 2015	June 30, 2014
(dollars in thousands)
Non-interest bearing accounts	$121,647	$68,113
NOW accounts	330,046	271,156
Money market deposit accounts	72,595	28,033
Savings accounts	115,911	95,327
Certificates	416,795	323,172
Total Deposit Accounts	$1,056,994	$785,801

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Note 3: Securities: Schedule of Available-for-sale Securities Reconciliation (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Available-for-sale Securities Reconciliation

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

	March 31, 2015
		Gross	Gross	Estimated
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	Value
(dollars in thousands)
Investment and mortgage backed securities:
U.S. government-sponsored enterprises (GSEs)	$15,918	$50	$(96)	$15,872
State and political subdivisions	40,481	2,051	(46)	42,486
Other securities	3,215	280	(689)	2,806
Mortgage-backed: GSE residential	71,393	1,091	(11)	72,473
Total investments and mortgage-backed securities	$131,007	$3,472	$(842)	$133,637

	June 30, 2014
		Gross	Gross	Estimated
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	Value
(dollars in thousands)
Investment and mortgage backed securities:
U.S. government-sponsored enterprises (GSEs)	$24,607	$21	$(554)	$24,074
State and political subdivisions	43,632	1,856	(131)	45,357
Other securities	3,294	264	(918)	2,640
Mortgage-backed GSE residential	57,780	578	(207)	58,151
Total investments and mortgage-backed securities	$129,313	$2,719	$(1,810)	$130,222

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Note 12: Fair Value Measurements: Schedule of Gains and Losses Recognized on Assets Measured on Nonrecurring Basis (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Gains and Losses Recognized on Assets Measured on Nonrecurring Basis

The following table presents gains and (losses) recognized on assets measured on a non-recurring basis for the nine-month periods ended March 31, 2015 and 2014:

(dollars in thousands)	For the nine months ended
	March 31, 2015	March 31, 2014
Impaired loans (collateral dependent)	$(59)	$110
Foreclosed and repossessed assets held for sale	(33)	(221)
Total gains (losses) on assets measured on a non-recurring basis	$(92)	$(111)

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Note 5: Accounting For Certain Loans Acquired in A Transfer: Schedule of Loans Acquired in Transfer Credit Impaired (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Jun. 30, 2014
Residential Mortgage
Certain Loans and Debt Securities Acquired in Transfer, Allowance for Credit Losses Due to Subsequent Impairment	$ 4,372		$ 2,068
Construction Real Estate
Certain Loans and Debt Securities Acquired in Transfer, Allowance for Credit Losses Due to Subsequent Impairment	3,212
Commercial Real Estate
Certain Loans and Debt Securities Acquired in Transfer, Allowance for Credit Losses Due to Subsequent Impairment	13,541		1,276
Consumer Loan
Certain Loans and Debt Securities Acquired in Transfer, Allowance for Credit Losses Due to Subsequent Impairment	207
Commercial Loan
Certain Loans and Debt Securities Acquired in Transfer, Allowance for Credit Losses Due to Subsequent Impairment	1,198		115
Outstanding balance
Certain Loans and Debt Securities Acquired in Transfer, Allowance for Credit Losses Due to Subsequent Impairment	22,530		3,459
Carrying amount
Certain Loans and Debt Securities Acquired in Transfer, Allowance for Credit Losses Due to Subsequent Impairment	$ 19,392	[1]	$ 3,172	[1]

[1] Net of fair value adjustment of $3,549 and $287 at September 30, 2014, and June 30, 2014, respectively.

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Note 4: Loans and Allowance For Loan Losses: Consumer Lending Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Consumer Lending Policy

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 (HELOCs), which are variable, are tied to the prime rate of interest and are for a period of ten years.

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.

Automobile loans originated by the Company include both direct loans and a smaller amount of indirect 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.

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Note 2: Organization and Summary of Significant Accounting Policies: Income Tax Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Income Tax Policy

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 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.

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Note 12: Fair Value Measurements: Schedule of Quantitative Information About Level 3 Fair Value Measurements (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Quantitative Information About Level 3 Fair Value Measurements

					Weighted
	Fair value at	Valuation	Unobservable	Range of	-average
(dollars in thousands)	March 31, 2015	technique	inputs	inputs applied	inputs applied
Recurring Measurements
Available-for-sale securities      (pooled trust preferred security)	$203	Discounted cash flow	Discount rate	n/a	11.2%
			Prepayment rate	n/a	1% annually
			Projected defaults    and deferrals    (% of pool balance)	n/a	33.3%
			Anticipated recoveries    (% of pool balance)	n/a	0.8%
Nonrecurring Measurements
Foreclosed and repossessed assets	4,328	Third party appraisal	Marketability discount	0.0% - 76.0%	36.1%

					Weighted
	Fair value at	Valuation	Unobservable	Range of	-average
(dollars in thousands)	June 30, 2014	technique	inputs	inputs applied	inputs applied
Recurring Measurements
Available-for-sale securities      (pooled trust preferred security)	$133	Discounted cash flow	Discount rate	n/a	16.0%
			Prepayment rate	n/a	1% annually
			Projected defaults    and deferrals    (% of pool balance)	n/a	38.8%
			Anticipated recoveries    (% of pool balance)	n/a	1.0%
Nonrecurring Measurements
Foreclosed and repossessed assets	2,977	Third party appraisal	Marketability discount	0.0% - 76.4%	14.9%

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Note 12: Fair Value Measurements: Schedule of Fair Value of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
Deposits | Liability
Fair Value Financial Instruments Carrying Amount	$ 1,056,994	$ 785,801
Securities Loaned or Sold under Agreements to Repurchase | Liability
Fair Value Financial Instruments Carrying Amount	27,960	25,561
Federal Home Loan Bank Advances | Liability
Fair Value Financial Instruments Carrying Amount	65,080	85,472
Accrued interest payable | Liability
Fair Value Financial Instruments Carrying Amount	741	570
Subordinated Debt | Liability
Fair Value Financial Instruments Carrying Amount	14,635	9,727
Assets | Cash and Cash Equivalents
Fair Value Financial Instruments Carrying Amount	20,798	14,932
Assets | Interest-bearing time deposits
Fair Value Financial Instruments Carrying Amount	2,698	1,655
Assets | Investment in Federal Home Loan Bank Stock
Fair Value Financial Instruments Carrying Amount	4,135	4,569
Assets | Investment in Federal Reserve Bank Stock
Fair Value Financial Instruments Carrying Amount	2,340	1,424
Assets | Loans Receivable
Fair Value Financial Instruments Carrying Amount	1,049,524	801,056
Assets | Accrued interest receivable
Fair Value Financial Instruments Carrying Amount	$ 4,645	$ 4,402

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Note 8: Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Deferred Tax Assets and Liabilities

	March 31, 2015	June 30, 2014
(dollars in thousands)
Deferred tax assets:
Provision for losses on loans	$4,811	$3,696
Accrued compensation and benefits	499	450
Other-than-temporary impairment on available for sale securities	138	141
NOL carry forwards acquired	789	853
Minimum Tax Credit	130	130
Unrealized loss on other real estate	6	38
Other	662	-
Total deferred tax assets	7,035	5,308
Deferred tax liabilities:
FHLB stock dividends	71	157
Purchase accounting adjustments	1,919	1,533
Depreciation	885	767
Prepaid expenses	110	250
Unrealized gain on available for sale securities	973	336
Other	-	164
Total deferred tax liabilities	3,957	3,207
Net deferred tax (liability) asset	$3,078	$2,101

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Note 4: Loans and Allowance For Loan Losses: Schedule of Accounts, Notes, Loans and Financing Receivable (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
Residential Mortgage
Financing Receivable	$ 381,323	$ 303,901
Construction Loans
Financing Receivable	69,882	40,738
Commercial Real Estate
Financing Receivable	406,204	308,520
Consumer Loan
Financing Receivable	45,884	35,223
Commercial Loan
Financing Receivable	181,676	141,072
Loans gross, total
Financing Receivable	1,084,969	829,454
Loans in process
Financing Receivable	(23,793)	(19,261)
Deferred loan fees, net
Financing Receivable	91	122
Allowance for Loan and Lease Losses
Financing Receivable	(11,743)	(9,259)
Loans net, total
Financing Receivable	$ 1,049,524	$ 801,056

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Note 3: Securities: Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value

	March 31, 2015
	Less than 12 months		More than 12 months		Total
		Unrealized		Unrealized		Unrealized
	Fair Value	Losses	Fair Value	Losses	Fair Value	Losses
(dollars in thousands)
U.S. government-sponsored enterprises (GSEs)	$1,996	$2	$7,895	$94	$9,891	$96
Obligations of state and political subdivisions	1,530	3	1,500	43	3,030	46
Other securities	-	-	1,199	689	1,199	689
Mortgage-backed securities	2,861	11	-	-	2,861	11
Total investments and mortgage-backed securities	$6,387	$16	$10,594	$826	$16,981	$842

	June 30, 2014
	Less than 12 months		More than 12 months		Total
		Unrealized		Unrealized		Unrealized
	Fair Value	Losses	Fair Value	Losses	Fair Value	Losses
(dollars in thousands)
U.S. government-sponsored enterprises (GSEs)	$2,676	$26	$18,451	$528	$21,127	$554
Obligations of state and political subdivisions	1,863	3	4,938	128	6,801	131
Other securities	476	2	532	916	1,008	918
Mortgage-backed securities	8,882	77	1,649	130	10,531	207
Total investments and mortgage-backed securities	$13,897	$108	$25,570	$1,702	$39,467	$1,810

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Note 8: Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Details
Current Income Tax Expense (Benefit)	$ 1,616	$ 1,976	$ 5,081	$ 3,377
Deferred Income Tax Expense (Benefit)	(119)	(1,195)	(743)	(615)
Total Income Tax Provision	$ 1,497	$ 781	$ 4,338	$ 2,762

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Note 12: Fair Value Measurements: Schedule of Available for Sale Securities Reconciliation on Level 3 Unobservable information (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Available for Sale Securities Reconciliation on Level 3 Unobservable information

(dollars in thousands)	Three months ended
	March 31, 2015	March 31, 2014
Available-for-sale securities, beginning of period	$172	$121
Total unrealized gain (loss) included in comprehensive income	31	3
Transfer from Level 2 to Level 3	-	-
Available-for-sale securities, end of period	$203	$124

(dollars in thousands)	Nine months ended
	March 31, 2015	March 31, 2014
Available-for-sale securities, beginning of period	$133	$73
Total unrealized gain (loss) included in comprehensive income	70	51
Transfer from Level 2 to Level 3	-	-
Available-for-sale securities, end of period	$203	$124

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Note 3: Securities: Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
US Government-sponsored Enterprises Debt Securities
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	$ 1,996	$ 2,676
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	2	26
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	7,895	18,451
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	94	528
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	9,891	21,127
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss	96	554
US States and Political Subdivisions Debt Securities
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	1,530	1,863
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	3	3
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	1,500	4,938
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	43	128
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	3,030	6,801
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss	46	131
Other Debt Obligations
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value		476
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss		2
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	1,199	532
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	689	916
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	1,199	1,008
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss	689	918
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	2,861	8,882
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	11	77
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value		1,649
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss		130
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	2,861	10,531
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss	11	207
Total Investments And Mortgage Backed Securities
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	6,387	13,897
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	16	108
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	10,594	25,570
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	826	1,702
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value	16,981	39,467
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss	$ 842	$ 1,810

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Note 13: Acquisitions: Schedule of Business Acquisition -- Peoples Bank (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Business Acquisition -- Peoples Bank

Fair Value of Consideration Transferred
(dollars in thousands)
Cash	$12,094
Common stock, at fair value	12,331
Total consideration	$24,425
Recognized amounts of identifiable assets acquired
and liabilities assumed
Cash and Cash equivalents	$18,236
Interest bearing time deposits	9,950
Investment Securities	31,257
Loans	190,445
Premises and equipment	11,785
Identifiable intangible assets	3,000
Miscellaneous other assets	4,045
Deposits	(221,887)
Advances from FHLB	(16,038)
Subordinated debt	(4,844)
Miscellaneous other liabilities	(1,558)
Notes Payable	(2,921)
Total identifiable net assets	21,492
Goodwill	$2,955

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Note 3: Securities: Other Securities Disclosure: Pooled Trust Preferred Securities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Details
Number of Pooled Trust Preferred Securities in a Continuous Unrealized Loss Position	3
Fair Value of Pooled Trust Preferred Securities Held in a Continuous Unrealized Loss Position	$ 757
Amount of Unrealized Loss on Pooled Trust Preferred Securities in a Continuous Unrealized Loss Position for 12 Months or More	$ 681

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Note 12: Fair Value Measurements: Fair Value Measurements, Nonrecurring (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Fair Value Measurements, Nonrecurring

	Fair Value Measurements at March 31, 2015, Using:
(dollars in thousands)		Quoted Prices in
		Active Markets for	Significant Other	Significant
		Identical Assets	Observable Inputs	Unobservable Inputs
	Fair Value	(Level 1)	(Level 2)	(Level 3)
Impaired loans (collateral dependent)	$-	$-	$-	$-
Foreclosed and repossessed assets held for sale	4,328	-	-	4,328

	Fair Value Measurements at June 30, 2014, Using:
(dollars in thousands)		Quoted Prices in
		Active Markets for	Significant Other	Significant
		Identical Assets	Observable Inputs	Unobservable Inputs
	Fair Value	(Level 1)	(Level 2)	(Level 3)
Impaired loans (collateral dependent)	$-	$-	$-	$-
Foreclosed and repossessed assets held for sale	2,977	-	-	2,977

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Note 7: Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Earnings Per Share, Basic and Diluted

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

	Three months ended		Nine months ended
	March,		March,
	2015	2014	2015	2014
(dollars in thousands except per share data)
Net income	$3,366	$2,243	$10,103	$7,325
Dividend payable on preferred stock	50	50	150	150
Net income available to common shareholders	$3,316	$2,193	$9,953	$7,175
Average Common shares – outstanding basic	7,413,257	6,623,480	7,310,494	6,591,848
Stock options under treasury stock method	190,660	223,340	188,625	205,708
Average Common shares – outstanding diluted	7,603,917	6,846,820	7,499,119	6,797,556
Basic earnings per common share	$0.45	$0.33	$1.36	$1.09
Diluted earnings per common share	$0.44	$0.32	$1.33	$1.06

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Note 2: Organization and Summary of Significant Accounting Policies: Use of Estimates Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Use of Estimates Policy

Use of Estimates. The preparation of 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.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, estimated fair values of purchased loans, other-than-temporary impairments (OTTI), and fair value of financial instruments.

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Note 4: Loans and Allowance For Loan Losses: Interest Income Recognized Change Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Interest Income Recognized Change Policy

For the three- and nine-month periods ended March 31, 2015, the amount of interest income recorded for impaired loans that represented a change in the present value of cash flows attributable to the passage of time was approximately $48,000 and $133,000, respectively, as compared to $2,000 and $106,000, respectively, for the three-and nine-month periods ended March 31, 2014.

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Note 3: Securities: Credit Losses Recognized on Investments Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Credit Losses Recognized on Investments Policy

Credit losses recognized on investments. As described above, one of the Company’s investments in trust preferred securities experienced fair value deterioration due to credit losses, but is not otherwise other-than-temporarily impaired. During fiscal 2009, the Company adopted ASC 820, formerly FASB Staff Position 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.”  The following table provides information about the trust preferred security for which only a credit loss was recognized in income and other losses are recorded in other comprehensive income (loss) for the nine-month periods ended March 31, 2015 and 2014.

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Note 12: Fair Value Measurements: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Recurring Measurements. The following table presents the fair value measurements of assets  recognized in the accompanying balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fell at March 31, 2015 and June 30, 2014:

	Fair Value Measurements at March 31, 2015, Using:
(dollars in thousands)		Quoted Prices in Active Markets for Identical Assets	Significant Other Observable Inputs	Significant Unobservable Inputs
	Fair Value	(Level 1)	(Level 2)	(Level 3)
U.S. government sponsored enterprises (GSEs)	$15,872	$-	$15,872	$-
State and political subdivisions	42,486	-	42,486	-
Other securities	2,806	-	2,603	203
Mortgage-backed GSE residential	72,473	-	72,473	-

	Fair Value Measurements at June 30, 2014, Using:
(dollars in thousands)		Quoted Prices in Active Markets for Identical Assets	Significant Other Observable Inputs	Significant Unobservable Inputs
	Fair Value	(Level 1)	(Level 2)	(Level 3)
U.S. government sponsored enterprises (GSEs)	$24,074	$-	$24,074	$-
State and political subdivisions	45,357	-	45,357	-
Other securities	2,640	-	2,507	133
Mortgage-backed GSE residential	58,151	-	58,151	-

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Note 4: Loans and Allowance For Loan Losses: Purchased Impaired Loans Policy: Purchased Impaired Loans (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
Loans without a specific valuation allowance
Purchased Credit Impaired Loans	$ 19,400	$ 3,200
Loans with a specific valuation allowance
Purchased Credit Impaired Loans	0
Total loans with and without a specific valuation allowance
Purchased Credit Impaired Loans	$ 19,400	$ 3,200

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Note 2: Organization and Summary of Significant Accounting Policies: Earnings Per Share Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Earnings Per Share Policy

Earnings Per Common 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 (stock options and warrants) outstanding during each period.

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Note 9: 401(k) Retirement Plan: Pension and Other Postretirement Plans, Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Pension and Other Postretirement Plans, Policy

The Southern Bank 401(k) Retirement Plan (the Plan) covers substantially all Southern Bank employees who are at least 21 years of age and who have completed one year of service. The Plan provides a safe harbor matching contribution of up to 4% of eligible compensation, and also made additional, discretionary profit-sharing contributions for fiscal 2014; for fiscal 2015, the Company has maintained the safe harbor matching contribution of 4%, and expects to continue to make additional, discretionary profit-sharing contributions. During the three and nine-month periods ended March 31, 2015, retirement plan expenses recognized for the Plan were approximately $207,000, and $495,000, respectively, as compared to $128,000 and $389,000, respectively, for the same periods of the prior fiscal year.

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Note 4: Loans and Allowance For Loan Losses: Schedule of Performing Loans Classified as Troubled Debt Restructured Loans (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Performing Loans Classified as Troubled Debt Restructured Loans

(dollars in thousands)	March 31, 2015		June 30, 2014
	Number of	Recorded	Number of	Recorded
	modifications	Investment	modifications	Investment
Residential real estate	5	$230	6	$1,790
Construction real estate	-	-	-	-
Commercial real estate	12	3,026	13	3,145
Consumer loans	-	-	-	-
Commercial loans	2	364	2	125
Total	19	$3,620	21	$5,060

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Note 8: Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Details
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount	$ 1,654	$ 1,028	$ 4,910	$ 3,430
Increase (Decrease) in Taxes Resulting from Nontaxable Municipal Income	(133)	(133)	(398)	(395)
Increase (Decrease) in Taxes Resulting from State Tax Net of Federal Benefit	133	59	380	212
Increase (Decrease) in Taxes Resulting from Cash Surrender Value of Bank Owned Life Insurance	(47)	(43)	(145)	(131)
Tax credit benefit	(91)	(82)	(272)	(244)
Increase (Decrease) in Taxes Resulting from Other Net	(18)	(49)	(136)	(110)
Actual Tax Provision	$ 1,497	$ 781	$ 4,338	$ 2,762

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Note 4: Loans and Allowance For Loan Losses: Financing Receivable Credit Quality Indicators (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Financing Receivable Credit Quality Indicators

The following tables present 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 March 31, 2015 and June 30, 2014. These tables include purchased credit impaired loans, which are reported according to risk categorization after acquisition based on the Company’s standards for such classification:

	March 31, 2015
(dollars in thousands)	Residential	Construction	Commercial
	Real Estate	Real Estate	Real Estate	Consumer	Commercial
Pass	$374,607	$45,958	$392,438	$45,564	$179,042
Watch	3,232	-	6,894	76	126
Special Mention	-	-	-	-	-
Substandard	3,484	131	6,872	244	2,508
Doubtful	-	-	-	-	-
Total	$381,323	$46,089	$406,204	$45,884	$181,676

	June 30, 2014
(dollars in thousands)	Residential	Construction	Commercial
	Real Estate	Real Estate	Real Estate	Consumer	Commercial
Pass	$300,926	$21,477	$303,853	$35,046	$140,138
Watch	301	-	1,014	40	362
Special Mention	-	-	-	-	-
Substandard	2,674	-	3,653	137	572
Doubtful	-	-	-	-	-
Total	$303,901	$21,477	$308,520	$35,223	$141,072

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Note 4: Loans and Allowance For Loan Losses: Commercial Business Lending Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Commercial Business Lending Policy

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.

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Note 3: Securities

9 Months Ended

Mar. 31, 2015

Notes

Note 3: Securities

Note 3:  Securities

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

	March 31, 2015
		Gross	Gross	Estimated
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	Value
(dollars in thousands)
Investment and mortgage backed securities:
U.S. government-sponsored enterprises (GSEs)	$15,918	$50	$(96)	$15,872
State and political subdivisions	40,481	2,051	(46)	42,486
Other securities	3,215	280	(689)	2,806
Mortgage-backed: GSE residential	71,393	1,091	(11)	72,473
Total investments and mortgage-backed securities	$131,007	$3,472	$(842)	$133,637

	June 30, 2014
		Gross	Gross	Estimated
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	Value
(dollars in thousands)
Investment and mortgage backed securities:
U.S. government-sponsored enterprises (GSEs)	$24,607	$21	$(554)	$24,074
State and political subdivisions	43,632	1,856	(131)	45,357
Other securities	3,294	264	(918)	2,640
Mortgage-backed GSE residential	57,780	578	(207)	58,151
Total investments and mortgage-backed securities	$129,313	$2,719	$(1,810)	$130,222

The amortized cost and estimated fair value of investment and mortgage-backed securities available for sale, 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 penalties.

	March 31, 2015
		Estimated
(dollars in thousands)	Amortized	Fair
	Cost	Value
Within one year	$1,535	$1,541
After one year but less than five years	15,551	15,634
After five years but less than ten years	17,362	17,856
After ten years	25,166	26,133
Total investment securities	59,614	61,164
Mortgage-backed securities	71,393	72,473
Total investments and mortgage-backed securities	$131,007	$133,637

The following tables show our 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 March 31, 2015 and June 30, 2014:

	March 31, 2015
	Less than 12 months		More than 12 months		Total
		Unrealized		Unrealized		Unrealized
	Fair Value	Losses	Fair Value	Losses	Fair Value	Losses
(dollars in thousands)
U.S. government-sponsored enterprises (GSEs)	$1,996	$2	$7,895	$94	$9,891	$96
Obligations of state and political subdivisions	1,530	3	1,500	43	3,030	46
Other securities	-	-	1,199	689	1,199	689
Mortgage-backed securities	2,861	11	-	-	2,861	11
Total investments and mortgage-backed securities	$6,387	$16	$10,594	$826	$16,981	$842

	June 30, 2014
	Less than 12 months		More than 12 months		Total
		Unrealized		Unrealized		Unrealized
	Fair Value	Losses	Fair Value	Losses	Fair Value	Losses
(dollars in thousands)
U.S. government-sponsored enterprises (GSEs)	$2,676	$26	$18,451	$528	$21,127	$554
Obligations of state and political subdivisions	1,863	3	4,938	128	6,801	131
Other securities	476	2	532	916	1,008	918
Mortgage-backed securities	8,882	77	1,649	130	10,531	207
Total investments and mortgage-backed securities	$13,897	$108	$25,570	$1,702	$39,467	$1,810

Other securities. At March 31, 2015, there were three pooled trust preferred securities with an estimated fair value of $757,000 and unrealized losses of $681,000 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, a lack of demand or inactive market for these securities, and concerns regarding the financial institutions that issued the underlying trust preferred securities. Rules adopted by the federal banking agencies in December 2013 to implement Section 619 of the Dodd-Frank Act (the “Volcker Rule”) generally prohibit banking entities from engaging in proprietary trading and from investing in, sponsoring, or having certain relationships with a hedge fund or private equity fund. All pooled trust preferred securities owned by the Company were included in a January 2014 listing of securities which the agencies considered to be grandfathered with regard to these prohibitions; as such, banking entities are permitted to retain their interest in these securities, provided the interest was acquired on or before December 10, 2013, unless acquired pursuant to a merger or acquisition.

The March 31, 2015, cash flow analysis for these three 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 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 three securities included annualized prepayments of 1%; no recoveries on issuers currently in default; recoveries of zero to 49 percent on currently deferred issuers within the next two years; new defaults of 50 basis points annually; and recoveries of 10% of new defaults.

One of these three securities has continued to receive cash interest payments in full since our purchase; the second of the three securities 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 interest payments during fiscal 2014. Our cash flow analysis indicates that interest payments are expected to continue for these two securities. Because the Company does not intend to sell these securities and it is not more-likely-than-not that the Company will be required to sell these securities prior to recovery of their amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2015.

For the last of these three securities, the Company is receiving PIK, in lieu of cash interest. Pooled trust preferred securities generally allow, under the terms of the issue, for issuers included in the pool to defer interest for up to five consecutive years. After five years, if not cured, the issuer is considered to be in default and the trustee may demand payment in full of principal and accrued interest. Issuers are also considered to be in default in the event of the failure of the issuer or a subsidiary bank. Both deferred and defaulted issuers are considered non-performing, and the trustee calculates, on a quarterly or semi-annual basis, certain coverage tests prior to the payment of cash interest to owners of the various tranches of the securities. The tests must show that performing collateral is sufficient to meet requirements for senior tranches, both in terms of cash flow and collateral value, before cash interest can be paid to subordinate tranches. If the tests are not met, available cash flow is diverted to pay down the principal balance of senior tranches until the coverage tests are met, before cash interest payments to subordinate tranches may resume. The Company is receiving PIK for this security due to failure of the required coverage tests described above at senior tranche levels of the security. The risk to holders of a tranche of a security in PIK status is that the pool’s total cash flow will not be sufficient to repay all principal and accrued interest related to the investment. The impact of payment of PIK to subordinate tranches is to strengthen the position of senior tranches, by reducing the senior tranches’ principal balances relative to available collateral and cash flow, while increasing principal balances, decreasing cash flow, and increasing credit risk to the tranches receiving PIK. For this security in receipt of PIK, the principal balance is increasing, cash flow has stopped, and, as a result, credit risk is increasing. The Company expects this security to remain in PIK status for a period of 1.5 years. Despite these facts, because the Company does not intend to sell this security and it is not more-likely-than-not that the Company will be required to sell this security prior to recovery of its amortized cost basis, which may be maturity, the Company does not consider this investment to be other-than-temporarily impaired at March 31, 2015.

At December 31, 2008, analysis of a fourth pooled trust preferred security indicated other-than-temporary impairment (OTTI). The loss recognized at that time reduced the amortized cost basis for the security, and as of March 31, 2015, the estimated fair value of the security exceeds the new, lower amortized cost basis.

The Company does not believe any other individual unrealized loss as of March 31, 2015, represents OTTI. However, the Company could be required to recognize OTTI losses in future periods with respect to its available for sale investment securities portfolio. The amount and timing of any additional OTTI will depend on the decline in the underlying cash flows of the securities. Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss recognized in the period the other-than-temporary impairment is identified.

Credit losses recognized on investments. As described above, one of the Company’s investments in trust preferred securities experienced fair value deterioration due to credit losses, but is not otherwise other-than-temporarily impaired. During fiscal 2009, the Company adopted ASC 820, formerly FASB Staff Position 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.”  The following table provides information about the trust preferred security for which only a credit loss was recognized in income and other losses are recorded in other comprehensive income (loss) for the nine-month periods ended March 31, 2015 and 2014.

	Accumulated Credit Losses
	Nine-Month Period Ended
(dollars in thousands)	March 31,
	2015	2014
Credit losses on debt securities held
Beginning of period	$375	$375
Additions related to OTTI losses not previously recognized	-	-
Reductions due to sales	-	-
Reductions due to change in intent or likelihood of sale	-	-
Additions related to increases in previously-recognized OTTI losses	-	-
Reductions due to increases in expected cash flows	(7)	-
End of period	$368	$375

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Note 12: Fair Value Measurements: Schedule of Gains and Losses Recognized on Assets Measured on Nonrecurring Basis (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Impaired loans (collateral dependent)
Gains and (losses) recognized on assets measured on a non-recurring basis	$ (59)	$ 110
Foreclosed and repossessed assets held for sale
Gains and (losses) recognized on assets measured on a non-recurring basis	(33)	(221)
Gains (losses) on assets measured on a non-recurring basis
Gains and (losses) recognized on assets measured on a non-recurring basis	$ (92)	$ (111)

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Note 4: Loans and Allowance For Loan Losses: Schedule of Loan Portfolio Aging Analysis (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Loan Portfolio Aging Analysis

The following tables present the Company’s loan portfolio aging analysis (excluding loans in process and deferred loan fees) as of March 31, 2015 and June 30, 2014.

	March 31, 2015
							Total Loans
(dollars in thousands)	30-59 Days	60-89 Days	Greater Than	Total		Total Loans	> 90 Days &
	Past Due	Past Due	90 Days	Past Due	Current	Receivable	Accruing
Real Estate Loans:
Residential	$1,464	$172	$650	$2,286	$379,037	$381,323	$127
Construction	-	-	131	131	45,958	46,089	-
Commercial	1,044	53	40	1,137	405,067	406,204	-
Consumer loans	268	118	11	397	45,487	45,884	10
Commercial loans	584	20	55	659	181,017	181,676	-
Total loans	$3,360	$363	$887	$4,610	$1,056,566	$1,061,176	$137

	June 30, 2014
							Total Loans
(dollars in thousands)	30-59 Days	60-89 Days	Greater Than	Total		Total Loans	> 90 Days &
	Past Due	Past Due	90 Days	Past Due	Current	Receivable	Accruing
Real Estate Loans:
Residential	$1,119	$51	$451	$1,621	$302,280	$303,901	$106
Construction	65	-	-	65	21,412	21,477	-
Commercial	1,025	-	18	1,043	307,477	308,520	18
Consumer loans	204	30	34	268	34,955	35,223	6
Commercial loans	101	431	347	879	140,193	141,072	-
Total loans	$2,514	$512	$850	$3,876	$806,317	$810,193	$130

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Note 4: Loans and Allowance For Loan Losses: Residential Mortgage Lending Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Residential Mortgage Lending Policy

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.

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 the primary lending area. The majority of the multi-family residential loans that are originated by the Bank 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.

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Note 2: Organization and Summary of Significant Accounting Policies: Loans Receivable Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Loans Receivable Policy

Loans. Loans are generally stated at unpaid principal balances, less the allowance for loan losses and 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. 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 allowance for losses on loans represents management’s best estimate of losses probable in the existing loan portfolio. The allowance for losses on loans 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 flow (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. The provision for losses on loans is determined based on management’s assessment of several factors: reviews and evaluations of specific loans, changes in the nature and volume of the loan portfolio, current economic conditions and the related impact on specific borrowers and industry groups, historical loan loss experience, the level of classified and nonperforming loans and the results of regulatory examinations.

Loans are considered impaired if, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Depending on a particular loan’s circumstances, we measure impairment of a loan based upon either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral less estimated costs to sell if the loan is collateral dependent. Valuation allowances are established for collateral-dependent impaired loans for the difference between the loan amount and fair value of collateral less estimated selling costs. For impaired loans that are not collateral dependent, a valuation allowance is established for the difference between the loan amount and the present value of expected future cash flows discounted at the historical effective interest rate or the observable market price of the loan. Impairment losses are recognized through an increase in the required allowance for loan losses. Cash receipts on loans deemed impaired are recorded based on the loan’s separate status as a nonaccrual loan or an accrual status loan.

Some loans are accounted for in accordance with ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. For these loans (“purchased credit impaired loans”), the Company recorded a fair value discount which established a new book value (see Note 4). For these loans, we determined the contractual amount and timing of undiscounted principal and interest payments (the “undiscounted contractual cash flows”), and estimated the amount and timing of undiscounted expected principal and interest payments, including expected prepayments (the “undiscounted expected cash flows”). Under acquired impaired loan accounting, the difference between the undiscounted contractual cash flows and the undiscounted expected cash flows is the nonaccretable difference. The nonaccretable difference is an estimate of the loss exposure of principal and interest related to the purchased credit impaired loans, and the amount is subject to change over time based on the performance of the loans. The carrying value of purchased credit impaired loans is initially determined as the discounted expected cash flows. The excess of expected cash flows at acquisition over the initial fair value of the purchased credit impaired loans is referred to as the “accretable yield” and is recorded as interest income over the estimated life of the acquired loans using the level-yield method, if the timing and amount of the future cash flows is reasonably estimable. The carrying value of purchased credit impaired loans is reduced by payments received, both principal and interest, and increased by the portion of the accretable yield recognized as interest income. Subsequent to acquisition, the Company evaluates the purchased credit impaired loans on a quarterly basis. Increases in expected cash flows compared to those previously estimated increase the accretable yield and are recognized as interest income prospectively. Decreases in expected cash flows compared to those previously estimated decrease the accretable yield and may result in the establishment of an allowance for loan losses and a provision for loan losses. Purchased credit impaired loans are generally considered accruing and performing loans, as the loans accrete interest income over the estimated life of the loan when expected cash flows are reasonably estimable. Accordingly, purchased credit impaired loans that are contractually past due are still considered to be accruing and performing as long as there is an expectation that the estimated cash flows will be received. If the timing and amount of cash flows is not reasonably estimable, the loans may be classified as nonaccrual loans.

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.

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Note 2: Organization and Summary of Significant Accounting Policies: Federal Reserve Bank and Federal Home Loan Bank Stock Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Federal Reserve Bank and Federal Home Loan Bank Stock Policy

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

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Note 4: Loans and Allowance For Loan Losses: Schedule of Financing Receivables, Non Accrual Status (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
Residential Mortgage
Financing Receivable, Recorded Investment, Nonaccrual Status	$ 2,334	$ 444
Construction Real Estate
Financing Receivable, Recorded Investment, Nonaccrual Status	131
Commercial Real Estate
Financing Receivable, Recorded Investment, Nonaccrual Status	1,490	673
Consumer Loan
Financing Receivable, Recorded Investment, Nonaccrual Status	143	58
Commercial Loan
Financing Receivable, Recorded Investment, Nonaccrual Status	102	91
Total loans
Financing Receivable, Recorded Investment, Nonaccrual Status	$ 4,200	$ 1,266

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Note 3: Securities: Investments Classified by Contractual Maturity Date (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Investments Classified by Contractual Maturity Date

	March 31, 2015
		Estimated
(dollars in thousands)	Amortized	Fair
	Cost	Value
Within one year	$1,535	$1,541
After one year but less than five years	15,551	15,634
After five years but less than ten years	17,362	17,856
After ten years	25,166	26,133
Total investment securities	59,614	61,164
Mortgage-backed securities	71,393	72,473
Total investments and mortgage-backed securities	$131,007	$133,637

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Note 4: Loans and Allowance For Loan Losses: Commercial Real Estate Lending Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Commercial Real Estate Lending Policy

Commercial Real Estate Lending. The Company actively originates loans secured by commercial real estate including land (improved, unimproved, and farmland), strip shopping centers, retail establishments 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.

Most commercial real estate loans originated by the Company generally are based on amortization schedules of up to 20 years with monthly principal and interest payments. Generally, the interest rate received on these loans is fixed for a maturity of up to five 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 five years. For loans with interest rates that adjust, 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.

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Note 2: Organization and Summary of Significant Accounting Policies: Foreclosed Real Estate Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Foreclosed Real Estate Policy

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. 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.

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Note 2: Organization and Summary of Significant Accounting Policies: Premises and Equipment Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Premises and Equipment Policy

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.

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Note 2: Organization and Summary of Significant Accounting Policies

9 Months Ended

Mar. 31, 2015

Notes

Note 2: Organization and Summary of Significant Accounting Policies

Note 2:  Organization and Summary of Significant Accounting Policies

Organization. The Company, a Missouri corporation, was organized in 1994 and is the parent company of 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.

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 is subject to regulation by certain federal and state agencies and undergo periodic examinations by those regulatory authorities.

Basis of Financial Statement Presentation. The 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 principally 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 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.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, estimated fair values of purchased loans, other-than-temporary impairments (OTTI), and fair value of financial instruments.

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 $12.7 million and $8.6 million at March 31, 2015 and June 30, 2014, respectively. The deposits are held in various commercial banks with none exceeding the FDIC’s deposit insurance limits, as well as at the Federal Reserve Bank of St. Louis and the Federal Home Loan Bank of Des Moines (FHLB).

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, 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 are 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 by the Company to be high risk.

When the Company does not intend to sell a debt security, and it is more likely than not the Company will not have to sell the security before recovery of its cost basis, it recognizes the credit component of an other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income. As a result, the Company’s balance sheet as of the dates presented reflects the full impairment (that is, the difference between the security’s amortized cost basis and fair value) on debt securities that the Company intends to sell or would more likely than not be required to sell before the expected recovery of the amortized cost basis. For available-for-sale debt securities 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 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.

Federal Reserve Bank and Federal Home Loan Bank Stock. The Bank is a member of the FHLB system and the Federal Reserve Bank of St. Louis. 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 and 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. 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 allowance for losses on loans represents management’s best estimate of losses probable in the existing loan portfolio. The allowance for losses on loans 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 flow (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. The provision for losses on loans is determined based on management’s assessment of several factors: reviews and evaluations of specific loans, changes in the nature and volume of the loan portfolio, current economic conditions and the related impact on specific borrowers and industry groups, historical loan loss experience, the level of classified and nonperforming loans and the results of regulatory examinations.

Loans are considered impaired if, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Depending on a particular loan’s circumstances, we measure impairment of a loan based upon either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral less estimated costs to sell if the loan is collateral dependent. Valuation allowances are established for collateral-dependent impaired loans for the difference between the loan amount and fair value of collateral less estimated selling costs. For impaired loans that are not collateral dependent, a valuation allowance is established for the difference between the loan amount and the present value of expected future cash flows discounted at the historical effective interest rate or the observable market price of the loan. Impairment losses are recognized through an increase in the required allowance for loan losses. Cash receipts on loans deemed impaired are recorded based on the loan’s separate status as a nonaccrual loan or an accrual status loan.

Some loans are accounted for in accordance with ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. For these loans (“purchased credit impaired loans”), the Company recorded a fair value discount which established a new book value (see Note 4). For these loans, we determined the contractual amount and timing of undiscounted principal and interest payments (the “undiscounted contractual cash flows”), and estimated the amount and timing of undiscounted expected principal and interest payments, including expected prepayments (the “undiscounted expected cash flows”). Under acquired impaired loan accounting, the difference between the undiscounted contractual cash flows and the undiscounted expected cash flows is the nonaccretable difference. The nonaccretable difference is an estimate of the loss exposure of principal and interest related to the purchased credit impaired loans, and the amount is subject to change over time based on the performance of the loans. The carrying value of purchased credit impaired loans is initially determined as the discounted expected cash flows. The excess of expected cash flows at acquisition over the initial fair value of the purchased credit impaired loans is referred to as the “accretable yield” and is recorded as interest income over the estimated life of the acquired loans using the level-yield method, if the timing and amount of the future cash flows is reasonably estimable. The carrying value of purchased credit impaired loans is reduced by payments received, both principal and interest, and increased by the portion of the accretable yield recognized as interest income. Subsequent to acquisition, the Company evaluates the purchased credit impaired loans on a quarterly basis. Increases in expected cash flows compared to those previously estimated increase the accretable yield and are recognized as interest income prospectively. Decreases in expected cash flows compared to those previously estimated decrease the accretable yield and may result in the establishment of an allowance for loan losses and a provision for loan losses. Purchased credit impaired loans are generally considered accruing and performing loans, as the loans accrete interest income over the estimated life of the loan when expected cash flows are reasonably estimable. Accordingly, purchased credit impaired loans that are contractually past due are still considered to be accruing and performing as long as there is an expectation that the estimated cash flows will be received. If the timing and amount of cash flows is not reasonably estimable, the loans may be classified as nonaccrual loans.

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.

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. 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.

Intangible Assets.The Company’s intangible assets at March 31, 2015 included gross core deposit intangibles of $5.9 million with $1.6 million accumulated amortization, gross other identifiable intangibles of $3.8 million with accumulated amortization of $3.7 million, and mortgage servicing rights of $84,000. At June 30, 2014, the Company’s intangible assets included gross core deposit intangibles of $2.9 million with $875,000 accumulated amortization, and gross other identifiable intangibles of $3.8 million with accumulated amortization of $3.5 million, and mortgage servicing rights of $38,000.  The Company’s core deposit and other intangible assets are being amortized using the straight line method, over periods ranging from five to fifteen years, with amortization expense expected to be approximately $323,000 in the remainder of fiscal 2015, $1.0 millionin fiscal 2016, $911,000 in fiscal 2017, $911,000 in fiscal 2018, $655,000 in fiscal 2019 and $541,000 thereafter.

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.

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 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.

Incentive Plan. The Company accounts for its Management and Recognition Plan, 2003 Stock Option and Incentive Plan and 2008 Equity Incentive Plan 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 aggregate purchase price and the fair value on the date the shares are considered earned represents a tax benefit to the Company and is recorded as an adjustment to additional paid in capital

Directors’ Retirement. Southern 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.

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

Stock Options. The amount of 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 Common 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 (stock options and warrants) outstanding during each period.

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.

Reclassification. Certain amounts included in the prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on net income.

The following paragraphs summarize the expected impact of new accounting pronouncements:

In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-05, "Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” to provide guidance to customers about whether a cloud computing arrangement includes a software license. Arrangements containing a license should be recorded as consistent with the acquisition of software licenses, whereas arrangements that do not include a software license should be recorded as consistent with the accounting for service contracts. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. The Company is reviewing the ASU, but does not expect adoption will result in a significant effect on the Company’s consolidated financial statements.

In February 2015, FASB issued ASU 2015-02, "Amendments to the Consolidation Analysis,” requiring an evaluation of whether certain legal entities should be consolidated and modifying the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. The Company is reviewing the ASU.

In August 2014, FASB issued ASU 2014-14, "Troubled Debt Restructurings by Creditors,” to address the classification of certain foreclosed mortgage loans held by creditors that are either fully or partially guaranteed under government programs (e.g., FHA, VA, HUD). The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. The Company is reviewing the ASU, but does not expect adoption will result in a significant effect on the Company’s consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers," superseding most industry-specific revenue recognition guidance in the FASB Accounting Standards Codification. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance identifies specific steps that entities should apply in order to achieve this principle. The ASU was originally effective for interim and annual periods beginning after December 15, 2016, and must be applied retrospectively, but in April 2015, FASB issued an exposure draft proposing deferral of the effective date for public entities to interim and annual periods beginning after December 15, 2017. The Company remains in the process of evaluating the impact of the ASU's adoption on the Company's consolidated financial statements.

In January 2014, the FASB issued ASU 2014-04, "Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure,” to reduce diversity by clarifying when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. Adoption of the ASU is not expected to have a significant effect on the Company’s consolidated financial statements.

In January 2014, the FASB issued ASU 2014-01, "Accounting for Investments in Qualified Affordable Housing Projects,” to permit entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. The ASU modifies the conditions that an entity must meet to be eligible to use a method other than the equity or cost methods to account for qualified affordable housing project investments. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. The Company is reviewing the ASU, but does not expect adoption will result in a significant effect on the Company’s consolidated financial statements

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Note 2: Organization and Summary of Significant Accounting Policies: Goodwill and Intangible Assets, Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Goodwill and Intangible Assets, Policy

Intangible Assets.The Company’s intangible assets at March 31, 2015 included gross core deposit intangibles of $5.9 million with $1.6 million accumulated amortization, gross other identifiable intangibles of $3.8 million with accumulated amortization of $3.7 million, and mortgage servicing rights of $84,000. At June 30, 2014, the Company’s intangible assets included gross core deposit intangibles of $2.9 million with $875,000 accumulated amortization, and gross other identifiable intangibles of $3.8 million with accumulated amortization of $3.5 million, and mortgage servicing rights of $38,000.  The Company’s core deposit and other intangible assets are being amortized using the straight line method, over periods ranging from five to fifteen years, with amortization expense expected to be approximately $323,000 in the remainder of fiscal 2015, $1.0 millionin fiscal 2016, $911,000 in fiscal 2017, $911,000 in fiscal 2018, $655,000 in fiscal 2019 and $541,000 thereafter.

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.

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Note 2: Organization and Summary of Significant Accounting Policies: Goodwill and Intangible Assets, Policy: Intangible Assets (Details) (Finite-Lived Intangible Assets, USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Jun. 30, 2014
Finite-Lived Intangible Assets
Finite-Lived Core Deposits, Gross	$ 5,900	$ 2,900
Finite-Lived Intangible Assets, Accumulated Amortization	1,600	875
Other Finite-Lived Intangible Assets, Gross	3,800	3,800
Other Finite-Lived Intangible Assets Gross Accumulated Amortization	3,700	3,500
Mortgage Servicing Rights, Amount Outstanding	84	38
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year	323
Finite-Lived Intangible Assets, Amortization Expense, Year Two	1,000
Finite-Lived Intangible Assets, Amortization Expense, Year Three	911
Finite-Lived Intangible Assets, Amortization Expense, Year Four	911
Finite-Lived Intangible Assets, Amortization Expense, Year Five	655
Finite-Lived Intangible Assets, Amortization Expense, after Year Five	$ 541

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Note 12: Fair Value Measurements: Schedule of Available for Sale Securities Reconciliation on Level 3 Unobservable information (Details) (Fair Value, Inputs, Level 3, USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Available for sale securities unrealized gain (loss) included in comprehensive income	$ 31	$ 3	$ 70	$ 51
Beginning of period
Available for Sale Securities, Fair Value	172	121	133	73
End of period
Available for Sale Securities, Fair Value	$ 203	$ 124	$ 203	$ 124

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Note 2: Organization and Summary of Significant Accounting Policies: New Accounting Pronouncements (Policies)

9 Months Ended

Mar. 31, 2015

Policies

New Accounting Pronouncements

The following paragraphs summarize the expected impact of new accounting pronouncements:

In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-05, "Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement,” to provide guidance to customers about whether a cloud computing arrangement includes a software license. Arrangements containing a license should be recorded as consistent with the acquisition of software licenses, whereas arrangements that do not include a software license should be recorded as consistent with the accounting for service contracts. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. The Company is reviewing the ASU, but does not expect adoption will result in a significant effect on the Company’s consolidated financial statements.

In February 2015, FASB issued ASU 2015-02, "Amendments to the Consolidation Analysis,” requiring an evaluation of whether certain legal entities should be consolidated and modifying the evaluation of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. The Company is reviewing the ASU.

In August 2014, FASB issued ASU 2014-14, "Troubled Debt Restructurings by Creditors,” to address the classification of certain foreclosed mortgage loans held by creditors that are either fully or partially guaranteed under government programs (e.g., FHA, VA, HUD). The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. The Company is reviewing the ASU, but does not expect adoption will result in a significant effect on the Company’s consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers," superseding most industry-specific revenue recognition guidance in the FASB Accounting Standards Codification. The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance identifies specific steps that entities should apply in order to achieve this principle. The ASU was originally effective for interim and annual periods beginning after December 15, 2016, and must be applied retrospectively, but in April 2015, FASB issued an exposure draft proposing deferral of the effective date for public entities to interim and annual periods beginning after December 15, 2017. The Company remains in the process of evaluating the impact of the ASU's adoption on the Company's consolidated financial statements.

In January 2014, the FASB issued ASU 2014-04, "Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure,” to reduce diversity by clarifying when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. Adoption of the ASU is not expected to have a significant effect on the Company’s consolidated financial statements.

In January 2014, the FASB issued ASU 2014-01, "Accounting for Investments in Qualified Affordable Housing Projects,” to permit entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. The ASU modifies the conditions that an entity must meet to be eligible to use a method other than the equity or cost methods to account for qualified affordable housing project investments. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. The Company is reviewing the ASU, but does not expect adoption will result in a significant effect on the Company’s consolidated financial statements

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Note 13: Acquisitions: Business Acquisition Policy -- Peoples Bank (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Business Acquisition Policy -- Peoples Bank

On August 5, 2014, the Company completed its acquisition of Peoples Service Company (PSC) and its subsidiary, Peoples Bank of the Ozarks (Peoples), Nixa, Missouri. Peoples was merged into the Company’s bank subsidiary, Southern Bank, in early December, 2014, in connection with the conversion of Peoples’ data system. The Company acquired Peoples primarily for the purpose of conducting commercial banking activities in markets where it believes the Company’s business model will perform well, and for the long-term value of its core deposit franchise. Through March 31, 2015, the Company incurred $678,000 in third-party acquisition-related costs. Expenses totaling $528,000 are included in noninterest expense in the Company’s consolidated statement of income for the nine months ended March 31, 2015, compared to $0 for the nine months ended March 31, 2014. Notes payable of $2.9 million were contractually required to be repaid on the date of acquisition. The goodwill of $3.0 million arising from the acquisition consists largely of synergies and economies of scale expected from combining the operations of the Company and Peoples. Total goodwill was assigned to the acquisition of the bank holding company.

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Note 8: Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Components of Income Tax Expense (Benefit)

The Company’s income tax provision is comprised of the following components:

(dollars in thousands)	For the three-month period ended		For the nin-month period ended
	March 31, 2015	March 31, 2014	March 31, 2015	March 31, 2014
Income taxes
Current	$1,616	$1,976	$5,081	$3,377
Deferred	(119)	(1,195	(743)	(615)
Total income tax provision	$1,497	$781	$4,338	$2,762

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SOUTHERN MISSOURI BANCORP, INC. -- CONDENSED CONSOLIDATED BALANCE SHEETS (March 31, 2015 figures unaudited) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
Statements of Financial Condition
Cash and cash equivalents	$ 20,798	$ 14,932
Interest-bearing time deposits	2,698	1,655
Available for sale securities	133,637	130,222
Stock in FHLB of Des Moines	4,135	4,569
Stock in Federal Reserve Bank of St. Louis	2,340	1,424
Loans receivable, net	1,049,524	801,056
Accrued interest receivable	4,645	4,402
Premises and equipment, net	37,490	22,467
Bank owned life insurance - cash surrender value	19,549	19,123
Intangible assets, net	4,451	2,335
Goodwill	4,556	1,600
Prepaid expenses and other assets	19,035	17,637
Total assets	1,302,858	1,021,422
Deposits	1,056,994	785,801
Securities sold under agreements to repurchase	27,960	25,561
Advances from FHLB of Des Moines	65,080	85,472
Accounts payable and other liabilities	4,491	3,181
Accrued interest payable	741	569
Subordinated debt	14,635	9,727
Total liabilities	1,169,901	910,311
Preferred stock	20,000	20,000
Common stock	74	33
Warrants to acquire common stock	177	177
Additional paid-in capital	36,159	23,504
Retained earnings	74,875	66,809
Accumulated other comprehensive income	1,672	588
Total stockholders' equity	132,957	111,111
Total liabilities and stockholders' equity	$ 1,302,858	$ 1,021,422

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Note 4: Loans and Allowance For Loan Losses: Construction Lending Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Construction Lending Policy

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 secured by mortgage loans for the construction of owner occupied residential real estate or to finance speculative construction secured by 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 and have maturities ranging from six to twelve months. Once construction is completed, loans may be converted to permanent status with monthly payments using amortization schedules of up to 30 years on residential and generally up to 20 years on commercial real estate.

While the Company typically utilizes maturity periods ranging from 6 to 12 months to closely monitor the inherent risks associated with construction 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 for a construction loan is approximately nine 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 obtains interim inspections completed by an independent third party. This monitoring further allows the Company an opportunity to assess risk. At March 31, 2015, construction loans outstanding included 57 loans, totaling $9.6 million, for which a modification had been agreed to. At June 30, 2014, construction loans outstanding included 31 loans, totaling $13.1 million, for which a modification had been agreed to. All modifications were solely for the purpose of extending the maturity date due to conditions described above.  None of these modifications were executed due to financial difficulty on the part of the borrower and, therefore, the loans were not accounted for as TDRs.

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Note 4: Loans and Allowance For Loan Losses: Schedule of Impaired Loans (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
Loans without a specific valuation allowance | Residential Mortgage
Impaired Financing Receivable, Recorded Investment	$ 3,900	$ 1,790
Impaired Financing Receivable, Unpaid Principal Balance	4,449	2,068
Loans without a specific valuation allowance | Construction Real Estate
Impaired Financing Receivable, Recorded Investment	2,481
Impaired Financing Receivable, Unpaid Principal Balance	3,212
Loans without a specific valuation allowance | Commercial Real Estate
Impaired Financing Receivable, Recorded Investment	13,891	3,383
Impaired Financing Receivable, Unpaid Principal Balance	15,635	3,391
Loans without a specific valuation allowance | Consumer Loan
Impaired Financing Receivable, Recorded Investment	195
Impaired Financing Receivable, Unpaid Principal Balance	207
Loans without a specific valuation allowance | Commercial Loan
Impaired Financing Receivable, Recorded Investment	1,355	115
Impaired Financing Receivable, Unpaid Principal Balance	1,456	115
Loans with a specific valuation allowance | Consumer Loan
Impaired Financing Receivable, Recorded Investment	59
Impaired Financing Receivable, Unpaid Principal Balance	59
Impaired Financing Receivable, Related Allowance	59
Total loans with and without a specific valuation allowance | Residential Mortgage
Impaired Financing Receivable, Recorded Investment	3,900	1,790
Impaired Financing Receivable, Unpaid Principal Balance	4,449	2,068
Total loans with and without a specific valuation allowance | Construction Real Estate
Impaired Financing Receivable, Recorded Investment	2,481
Impaired Financing Receivable, Unpaid Principal Balance	3,212
Total loans with and without a specific valuation allowance | Commercial Real Estate
Impaired Financing Receivable, Recorded Investment	13,891	3,383
Impaired Financing Receivable, Unpaid Principal Balance	15,635	3,391
Total loans with and without a specific valuation allowance | Consumer Loan
Impaired Financing Receivable, Recorded Investment	254
Impaired Financing Receivable, Unpaid Principal Balance	266
Impaired Financing Receivable, Related Allowance	59
Total loans with and without a specific valuation allowance | Commercial Loan
Impaired Financing Receivable, Recorded Investment	1,355	115
Impaired Financing Receivable, Unpaid Principal Balance	$ 1,456	$ 115

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Note 12: Fair Value Measurements: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
US Government-sponsored Enterprises Debt Securities
Assets, Fair Value Disclosure, Recurring	$ 15,872	$ 24,074
US States and Political Subdivisions Debt Securities
Assets, Fair Value Disclosure, Recurring	42,486	45,357
Other Debt Obligations
Assets, Fair Value Disclosure, Recurring	2,806	2,640
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises
Assets, Fair Value Disclosure, Recurring	$ 72,473	$ 58,151

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SOUTHERN MISSOURI BANCORP, INC. -- CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash Flows From Operating Activities:
Net income	$ 10,103	$ 7,325
Items not requiring (providing) cash:
Depreciation	1,485	1,112
Stock option and stock grant expense	99	11
Amortization of intangible assets	930	467
Amortization of purchase accounting adjustments	(1,986)	(4)
Increase in cash surrender value of bank owned life insurance	(426)	(384)
Loss on sale of foreclosed assets	11	19
Provision for loan losses	2,526	1,048
Gains realized on AFS securities	(6)	(108)
Net amortization of premiums and discounts on securities	687	885
Originations of loans held for sale	(11,176)	(10,813)
Proceeds from sales of loans held for sale	11,464	10,447
Gain on sales of loans held for sale	(473)	(356)
Changes in:
Accrued interest receivable	390	863
Prepaid expenses and other assets	1,563	531
Accounts payable and other liabilities	(171)	(596)
Deferred income taxes	(744)	(402)
Accrued interest payable	95	(466)
Net cash provided by operating activities	14,371	9,579
Cash flows from investing activities:
Net increase in loans	(59,777)	(69,487)
Net change in interest-bearing deposits	8,907
Proceeds from maturities of available for sale securities	14,813	6,701
Proceeds from sales of available for sale securities	14,021	36,127
Net redemptions (purchases) of Federal Home Loan Bank stock	1,361	(904)
Net purchases of Federal Reserve Bank of Saint Louis stock	(916)	(249)
Purchases of available-for-sale securities		(13,660)
Purchases of premises and equipment	(4,737)	(5,523)
Net cash received in (paid for) acquisitions	3,221	(5,585)
Investments in state and federal tax credits		(3,588)
Proceeds from sale of fixed assets	14
Proceeds from sale of foreclosed assets	567	1,143
Net cash used in investing activities	(22,526)	(55,025)
Cash flows from financing activities:
Net increase in demand deposits and savings accounts	37,577	29,107
Net increase in certificates of deposits	12,016	611
Net increase (decrease) in securities sold under agreements to repurchase	2,399	(1,990)
Proceeds from Federal Home Loan Bank advances	244,960	24,600
Repayments of Federal Home Loan Bank advances	(281,160)
Exercise of stock options	265	87
Dividends paid on preferred stock	(150)	(150)
Dividends paid on common stock	(1,886)	(1,585)
Net cash provided by financing activities	14,021	50,680
Increase in cash and cash equivalents	5,866	5,234
Cash and cash equivalents at beginning of period	14,932	12,789
Cash and cash equivalents at end of period	20,798	18,023
Noncash investing and financing activities:
Conversion of loans to foreclosed real estate	903	335
Conversion of foreclosed real estate to loans	58	338
Conversion of loans to repossessed assets	98	42
Cash paid during the period for:
Interest (net of interest credited)	2,043	2,085
Income taxes	$ 3,432	$ 2,798

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Note 4: Loans and Allowance For Loan Losses: Purchased Credit Impaired Loans Policy (Details)	9 Months Ended
	Mar. 31, 2015
Details
Financing Receivable, Credit Quality, Additional Information	lending relationships over $250,000 are subject to an independent loan review following origination, and lending relationships in excess of $2.5 million are subject to an independent loan review annually, as are a sample of lending relationships between $1.0 million and $2.5 million, in order to verify risk ratings

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Note 4: Loans and Allowance For Loan Losses: Schedule of Accounts, Notes, Loans and Financing Receivable (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Accounts, Notes, Loans and Financing Receivable

Classes of loans are summarized as follows:

	March 31, 2015	June 30, 2014
(dollars in thousands)
Real Estate Loans:
Residential	$381,323	$303,901
Construction	69,882	40,738
Commercial	406,204	308,520
Consumer loans	45,884	35,223
Commercial loans	181,676	141,072
	1,084,969	829,454
Loans in process	(23,793)	(19,261)
Deferred loan fees, net	91	122
Allowance for loan losses	(11,743)	(9,259)
Total loans	$1,049,524	$801,056

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Note 4: Loans and Allowance For Loan Losses: Interest Income Recognized Change Policy: Interest Income Recognized Change in Present Value Attributable to Passage of Time (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Details
Loans and Leases Receivable, Impaired, Interest Income Recognized, Change in Present Value Attributable to Passage of Time	$ 48	$ 2	$ 133	$ 106

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Note 2: Organization and Summary of Significant Accounting Policies: Outside Director Retirement Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Outside Director Retirement Policy

Directors’ Retirement. Southern 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.

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

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Note 4: Loans and Allowance For Loan Losses: Schedule of Financing Receivables, Non Accrual Status (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Financing Receivables, Non Accrual Status

	March 31, 2015	June 30, 2014
(dollars in thousands)
Residential real estate	$2,334	$444
Construction real estate	131	-
Commercial real estate	1,490	673
Consumer loans	143	58
Commercial loans	102	91
Total loans	$4,200	$1,266

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Note 1: Basis of Presentation: Consolidation Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Consolidation Policy

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Southern Bank (the Bank). All significant intercompany accounts and transactions have been eliminated in consolidation.  All share and per share amounts reflect, or have been restated to reflect, the two-for-one common stock split in the form of a common stock dividend paid on January 30, 2015.

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Note 2: Organization and Summary of Significant Accounting Policies: Stock Options Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Stock Options Policy

Stock Options. The amount of 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.

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Note 4: Loans and Allowance For Loan Losses: Interest Income Recognized on Impaired Loans (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Residential Mortgage
Impaired Financing Receivable, Average Recorded Investment	$ 3,950	$ 1,745	$ 3,451	$ 1,730
Impaired Financing Receivable Interest Income Recognized	54	36	191	163
Construction Real Estate
Impaired Financing Receivable, Average Recorded Investment	2,502		1,913
Impaired Financing Receivable Interest Income Recognized	42		141
Commercial Real Estate
Impaired Financing Receivable, Average Recorded Investment	11,963	1,283	9,390	1,328
Impaired Financing Receivable Interest Income Recognized	184	21	554	110
Consumer Loan
Impaired Financing Receivable, Average Recorded Investment	195		147
Impaired Financing Receivable Interest Income Recognized	3		9
Commercial Loan
Impaired Financing Receivable, Average Recorded Investment	1,101	582	859	789
Impaired Financing Receivable Interest Income Recognized	23		51	1
Total loans
Impaired Financing Receivable, Average Recorded Investment	19,711	3,610	15,760	3,847
Impaired Financing Receivable Interest Income Recognized	$ 306	$ 57	$ 946	$ 274

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Note 2: Organization and Summary of Significant Accounting Policies: Principles of Consolidation Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Principles of Consolidation Policy

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.

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Note 5: Accounting For Certain Loans Acquired in A Transfer: Schedule of Loans Acquired in Transfer Credit Impaired (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Loans Acquired in Transfer Credit Impaired

The carrying amount of those loans is included in the balance sheet amounts of loans receivable at March 31, 2015 and June 30, 2014. The amounts of these loans at March 31, 2015 and June 30, 2014, are as follows: 

	March 31, 2015	June 30, 2014
(dollars in thousands)
Residential real estate	$4,372	$2,068
Construction real estate	3,212	-
Commercial real estate	13,541	1,276
Consumer loans	207	-
Commercial loans	1,198	115
Outstanding balance	$22,530	$3,459
Carrying amount, net of fair value adjustment of $3,137,379 and $287,306 at March 31, 2015 and June 30, 2014, respectively	$19,392	$3,172

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Note 7: Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Details
Earnings Per Share Net Income	$ 3,366	$ 2,243	$ 10,103	$ 7,325
Dividends, Preferred Stock	50	50	150	150
Net income available to common shareholders	$ 3,316	$ 2,193	$ 9,953	$ 7,175
Weighted Average Number of Shares Outstanding, Basic	7,413,257	6,623,480	7,310,494	6,591,848
Stock Options Under Treasury Stock Method	190,660	223,340	188,625	205,708
Weighted Average Number of Shares Outstanding, Diluted	7,603,917	6,846,820	7,499,119	6,797,556
Basic earnings per common share	$ 0.45	$ 0.33	$ 1.36	$ 1.09
Diluted earnings per common share	$ 0.44	$ 0.32	$ 1.33	$ 1.06

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Note 1: Basis of Presentation

9 Months Ended

Mar. 31, 2015

Notes

Note 1: Basis of Presentation

Note 1:  Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Securities and Exchange Commission (SEC) Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all material adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated balance sheet of Southern Missouri Bancorp, Inc. (the Company) as of June 30, 2014, has been derived from the audited consolidated balance sheet of the Company as of that date. Operating results for the three- and nine-month periods ended March 31, 2015, are not necessarily indicative of the results that may be expected for the entire fiscal year. For additional information, refer to the audited consolidated financial statements included in the Company’s June 30, 2014, Form 10-K, which was filed with the SEC.

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Southern Bank (the Bank). All significant intercompany accounts and transactions have been eliminated in consolidation.  All share and per share amounts reflect, or have been restated to reflect, the two-for-one common stock split in the form of a common stock dividend paid on January 30, 2015.

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SOUTHERN MISSOURI BANCORP, INC. -- CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) (March 31, 2015 figures unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
Statements of Financial Condition
Allowance for loan losses of loans receivable	$ 11,743	$ 9,259
Preferred stock par value	$ 0.01	$ 0.01
Preferred stock liquidation value	$ 1,000	$ 1,000
Preferred stock shares authorized	500,000	500,000
Preferred stock shares issued	20,000	20,000
Preferred stock outstanding	20,000	20,000
Common stock par value	$ 0.01	$ 0.01
Common stock shares authorized	10,000,000	8,000,000
Common stock shares issued	7,413,666	3,340,440

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Note 11: Small Business Lending Fund

9 Months Ended

Mar. 31, 2015

Notes

Note 11: Small Business Lending Fund

Note 11: Small Business Lending Fund

On July 21, 2011, as part of the Small Business Lending Fund (SBLF) of the United States Department of the Treasury (Treasury), the Company entered into a Small Business Lending Fund-Securities Purchase Agreement (Purchase Agreement) with the Secretary of the Treasury, pursuant to which the Company (i) sold 20,000 shares of the Company’s Senior Non-Cumulative Perpetual Preferred Stock, Series A (SBLF Preferred Stock) to the Secretary of the Treasury for a purchase price of $20,000,000. The SBLF Preferred Stock was issued pursuant to the SBLF program, a $30 billion fund established under the Small Business Jobs Act of 2010 that was created to encourage lending to small business by providing capital to qualified community banks with assets of less than $10 billion.

The SBLF Preferred Stock qualifies as Tier 1 capital. The holder of SBLF Preferred Stock is entitled to receive non-cumulative dividends, payable quarterly, on each January 1, April 1, July 1 and October 1, beginning October 1, 2011. The dividend rate, as a percentage of the liquidation amount, fluctuated on a quarterly basis from the original issue date through the tenth dividend period (which ended December 31, 2013), based upon changes in the Company’s level of Qualified Small Business Lending (QBSL), as defined in the Purchase Agreement, over the baseline level calculated under the terms of the Purchase Agreement. From January 1, 2014, through four and one half years after issuance (i.e., through January 21, 2016), the dividend rate will be fixed at one percent (1%), based upon the increase in QBSL as compared to the baseline. After four and one half years from issuance, the dividend rate will increase to nine percent (9%), including a quarterly lending incentive fee of one-half percent (0.5%).

The SBLF Preferred Stock is non-voting, except in limited circumstances. In the event that the Company misses five dividend payments, the holder of the SBLF Preferred Stock will have the right to appoint a representative as an observer on the Company’s Board of Directors. In the event that the Company misses six dividend payments, then the holder of the SBLF Preferred Stock will have the right to designate two directors to the Board of Directors of the Company.

The SBLF Preferred Stock may be redeemed at any time at the Company’s option, at a redemption price of 100% of the liquidation amount plus accrued but unpaid dividends to the date of redemption for the current period, subject to the approval of its federal banking regulator.

As required by the Purchase Agreement, $9,635,000 of the proceeds from the sale of the SBLF Preferred Stock was used to redeem the 9,550 shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock, Series A issued in 2008 to the Treasury in the Troubled Asset Relief Program (TARP), plus the accrued but unpaid dividends on those preferred shares. As part of the 2008 TARP transaction, the Company issued a ten-year warrant to Treasury to purchase 114,326 shares of the Company’s common stock at an exercise price of $12.53 per share. Based on dividends paid by the Company on its common stock since the issuance of the warrant, and the two-for-one common stock split in the form of a common stock dividend paid on January 30, 2015, the warrant has been adjusted and, as of March 31, 2015, was exercisable for the purchase of 231,891 shares, at an exercise price of $6.18 per share.

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Note 4: Loans and Allowance For Loan Losses: Schedule of Performing Loans Classified as Troubled Debt Restructured Loans (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
Residential Mortgage
Financing Receivable Post Modifications Number of Modifications Performing	5	6
Financing Receivable Modification Post Modification Recorded Investment	$ 230	$ 1,790
Commercial Real Estate
Financing Receivable Post Modifications Number of Modifications Performing	12	13
Financing Receivable Modification Post Modification Recorded Investment	3,026	3,145
Commercial Loan
Financing Receivable Post Modifications Number of Modifications Performing	2	2
Financing Receivable Modification Post Modification Recorded Investment	364	125
Total loans
Financing Receivable Post Modifications Number of Modifications Performing	19	21
Financing Receivable Modification Post Modification Recorded Investment	$ 3,620	$ 5,060

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Note 4: Loans and Allowance For Loan Losses: Purchased Credit Impaired Loans Policy: Purchased Credit Impaired Loans (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
Pass
Purchased Credit Impaired Loans	$ 5,200	$ 409
Watch
Purchased Credit Impaired Loans	6,800	0
Special Mention
Purchased Credit Impaired Loans	0	0
Substandard
Purchased Credit Impaired Loans	7,400	2,700
Doubtful
Purchased Credit Impaired Loans	$ 0	$ 0

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Note 4: Loans and Allowance For Loan Losses: Schedule of Allowance for Loan Losses and Recorded Investment (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014	Jun. 30, 2014
Residential Mortgage
Provision for Loan Losses Expensed	$ (54)	$ 232	$ 286	$ 562
Allowance for Loan and Lease Losses, Write-offs	(13)	(127)	(24)	(150)
Allowance for Doubtful Accounts Receivable, Recoveries	1	1	10	15
Residential Mortgage | Beginning of period
Allowance for loan losses	2,800	2,131	2,462	1,810	2,462
Residential Mortgage | End of period
Allowance for loan losses	2,734	2,237	2,734	2,237
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	2,734	2,237	2,734	2,237	2,462
Financing Receivable, Collectively Evaluated for Impairment	377,500		377,500		302,111
Financing Receivable, Acquired with Deteriorated Credit Quality	3,823		3,823		1,790
Construction Loans
Provision for Loan Losses Expensed	305	(21)	511
Construction Loans | Beginning of period
Allowance for loan losses	561	424	355		355
Construction Loans | End of period
Allowance for loan losses	866	403	866
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	866		866		355
Financing Receivable, Collectively Evaluated for Impairment	43,608		43,608		21,477
Financing Receivable, Acquired with Deteriorated Credit Quality	2,481		2,481
Commercial Real Estate
Provision for Loan Losses Expensed	316	193	698	446
Allowance for Loan and Lease Losses, Write-offs	(8)		(9)	(69)
Allowance for Doubtful Accounts Receivable, Recoveries			40	1
Commercial Real Estate | Beginning of period
Allowance for loan losses	4,564	3,787	4,143	3,602	4,143
Commercial Real Estate | End of period
Allowance for loan losses	4,872	3,980	4,872	3,980
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	4,872	3,980	4,872	3,980	4,143
Financing Receivable, Collectively Evaluated for Impairment	394,407		394,407		307,253
Financing Receivable, Acquired with Deteriorated Credit Quality	11,797		11,797		1,267
Consumer Loan
Provision for Loan Losses Expensed	(12)	23	216	55
Allowance for Loan and Lease Losses, Write-offs	(16)	(32)	(54)	(51)
Allowance for Doubtful Accounts Receivable, Recoveries	5	4	32	15
Consumer Loan | Beginning of period
Allowance for loan losses	736	496	519	472	519
Consumer Loan | End of period
Allowance for loan losses	713	491	713	491
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment	59		59
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	654	491	654	491	519
Financing Receivable, Individually Evaluated for Impairment	59		59
Financing Receivable, Collectively Evaluated for Impairment	45,630		45,630		35,223
Financing Receivable, Acquired with Deteriorated Credit Quality	195		195
Commercial Loan
Provision for Loan Losses Expensed	282	(174)	815	(145)
Allowance for Loan and Lease Losses, Write-offs	(21)	(504)	(40)	(517)
Allowance for Doubtful Accounts Receivable, Recoveries		7	3	9
Commercial Loan | Beginning of period
Allowance for loan losses	2,297	2,247	1,780	2,229	1,780
Commercial Loan | End of period
Allowance for loan losses	2,558	1,576	2,558	1,576
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	2,558	1,576	2,558	1,576	1,780
Financing Receivable, Collectively Evaluated for Impairment	180,580		180,580		140,957
Financing Receivable, Acquired with Deteriorated Credit Quality	1,096		1,096		115
Total loans
Provision for Loan Losses Expensed	837	253	2,526	1,048
Allowance for Loan and Lease Losses, Write-offs	(58)	(663)	(127)	(787)
Allowance for Doubtful Accounts Receivable, Recoveries	6	12	85	40
Total loans | Beginning of period
Allowance for loan losses	10,958	9,085	9,259	8,386	9,259
Total loans | End of period
Allowance for loan losses	11,743	8,687	11,743	8,687
Financing Receivable, Allowance for Credit Losses, Individually Evaluated for Impairment	59		59
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment	11,684	8,687	11,684	8,687	9,259
Financing Receivable, Individually Evaluated for Impairment	59		59
Financing Receivable, Collectively Evaluated for Impairment	1,041,725		1,041,725		807,021
Financing Receivable, Acquired with Deteriorated Credit Quality	19,392		19,392		3,172
Construction Real Estate
Provision for Loan Losses Expensed				130
Construction Real Estate | Beginning of period
Allowance for loan losses				273
Construction Real Estate | End of period
Allowance for loan losses				403
Financing Receivable, Allowance for Credit Losses, Collectively Evaluated for Impairment		$ 403		$ 403

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Note 13: Acquisitions: Business Acquisition Policy -- Peoples Bank (Details) (Peoples Bank, USD $) In Thousands, unless otherwise specified	9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Peoples Bank
Business Acquisition, Transaction Costs	$ 678
Business Combination, Separately Recognized Transactions, Expenses and Losses Recognized	528	0
Business Acquisition Purchase Price Allocation Goodwill Amount	$ 3,000

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Document and Entity Information	9 Months Ended
	Mar. 31, 2015	May 11, 2015
Document and Entity Information:
Entity Registrant Name	Southern Missouri Bancorp Inc
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Amendment Flag	false
Entity Central Index Key	0000916907
Current Fiscal Year End Date	--06-30
Entity Common Stock, Shares Outstanding		7,419,666
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3

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Note 12: Fair Value Measurements

9 Months Ended

Mar. 31, 2015

Notes

Note 12: Fair Value Measurements

Note 12:  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 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 that are 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 balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fell at March 31, 2015 and June 30, 2014:

	Fair Value Measurements at March 31, 2015, Using:
(dollars in thousands)		Quoted Prices in Active Markets for Identical Assets	Significant Other Observable Inputs	Significant Unobservable Inputs
	Fair Value	(Level 1)	(Level 2)	(Level 3)
U.S. government sponsored enterprises (GSEs)	$15,872	$-	$15,872	$-
State and political subdivisions	42,486	-	42,486	-
Other securities	2,806	-	2,603	203
Mortgage-backed GSE residential	72,473	-	72,473	-

	Fair Value Measurements at June 30, 2014, Using:
(dollars in thousands)		Quoted Prices in Active Markets for Identical Assets	Significant Other Observable Inputs	Significant Unobservable Inputs
	Fair Value	(Level 1)	(Level 2)	(Level 3)
U.S. government sponsored enterprises (GSEs)	$24,074	$-	$24,074	$-
State and political subdivisions	45,357	-	45,357	-
Other securities	2,640	-	2,507	133
Mortgage-backed GSE residential	58,151	-	58,151	-

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 nine months ended March 31, 2015.

Available-for-sale Securities. When quoted market prices are available in an active market, securities are classified within Level 1. The Company does not have Level 1 securities. 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, the 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. Level 2 securities include U.S. Government-sponsored enterprises, state and political subdivisions, other securities, and mortgage-backed GSE residential securities. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

The following table presents a reconciliation of activity for available for sale securities measured at fair value based on significant unobservable (Level 3) information for the three- and nine-month periods ended March 31, 2015 and 2014:

(dollars in thousands)	Three months ended
	March 31, 2015	March 31, 2014
Available-for-sale securities, beginning of period	$172	$121
Total unrealized gain (loss) included in comprehensive income	31	3
Transfer from Level 2 to Level 3	-	-
Available-for-sale securities, end of period	$203	$124

(dollars in thousands)	Nine months ended
	March 31, 2015	March 31, 2014
Available-for-sale securities, beginning of period	$133	$73
Total unrealized gain (loss) included in comprehensive income	70	51
Transfer from Level 2 to Level 3	-	-
Available-for-sale securities, end of period	$203	$124

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 March 31, 2015 and June 30, 2014:

	Fair Value Measurements at March 31, 2015, Using:
(dollars in thousands)		Quoted Prices in
		Active Markets for	Significant Other	Significant
		Identical Assets	Observable Inputs	Unobservable Inputs
	Fair Value	(Level 1)	(Level 2)	(Level 3)
Impaired loans (collateral dependent)	$-	$-	$-	$-
Foreclosed and repossessed assets held for sale	4,328	-	-	4,328

	Fair Value Measurements at June 30, 2014, Using:
(dollars in thousands)		Quoted Prices in
		Active Markets for	Significant Other	Significant
		Identical Assets	Observable Inputs	Unobservable Inputs
	Fair Value	(Level 1)	(Level 2)	(Level 3)
Impaired loans (collateral dependent)	$-	$-	$-	$-
Foreclosed and repossessed assets held for sale	2,977	-	-	2,977

The following table presents gains and (losses) recognized on assets measured on a non-recurring basis for the nine-month periods ended March 31, 2015 and 2014:

(dollars in thousands)	For the nine months ended
	March 31, 2015	March 31, 2014
Impaired loans (collateral dependent)	$(59)	$110
Foreclosed and repossessed assets held for sale	(33)	(221)
Total gains (losses) on assets measured on a non-recurring basis	$(92)	$(111)

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 and liabilities pursuant to the valuation hierarchy. For assets classified within Level 3 of fair value hierarchy, the process used to develop the reported fair value process is described below.

Impaired Loans (Collateral Dependent). A collateral dependent loan is considered to be impaired when it is probable that all of the principal and interest due may not be collected according to its contractual terms. Generally, when a collateral dependent loan is considered impaired, the amount of reserve required is measured based on the fair value of the underlying collateral. The Company makes such measurements on all material collateral dependent loans deemed impaired using the fair value of the collateral for collateral dependent loans. The fair value of collateral used by the Company is determined by obtaining an observable market price or by obtaining an appraised value from an independent, licensed or certified appraiser, using observable market data. This data includes information such as selling price of similar properties and capitalization rates of similar properties sold within the market, expected future cash flows or earnings of the subject property based on current market expectations, and other relevant factors. In addition, management applies selling and other discounts to the underlying collateral value to determine the fair value. If an appraised value is not available, the fair value of the collateral dependent impaired loan is determined by an adjusted appraised value including unobservable cash flows.

On a quarterly basis, loans classified as special mention, substandard, doubtful, or loss are evaluated including the loan officer’s review of the collateral and its current condition, the Company’s knowledge of the current economic environment in the market where the collateral is located, and the Company’s recent experience with real estate in the area. The date of the appraisal is also considered in conjunction with the economic environment and any decline in the real estate market since the appraisal was obtained. For all loan types, updated appraisals are obtained if considered necessary. Of the Company’s $19.4 million (carrying value) in impaired loans (collateral-dependent and purchased credit-impaired) at March 31, 2015, the Company utilized a real estate appraisal more than 12 months old to serve as the primary basis of our valuation for impaired loans with a carrying value of approximately $18.4 million. The remaining $1.0 million was secured by machinery, equipment and accounts receivable. In instances where the economic environment has worsened and/or the real estate market declined since the last appraisal, a higher distressed sale discount would be applied to the appraised value.

The Company records collateral dependent impaired loans based on nonrecurring Level 3 inputs. If a collateral dependent loan’s fair value, as estimated by the Company, is less than its carrying value, the Company either records a charge-off of the portion of the loan that exceeds the fair value or establishes a specific reserve as part of the allowance for loan losses.

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.

					Weighted
	Fair value at	Valuation	Unobservable	Range of	-average
(dollars in thousands)	March 31, 2015	technique	inputs	inputs applied	inputs applied
Recurring Measurements
Available-for-sale securities      (pooled trust preferred security)	$203	Discounted cash flow	Discount rate	n/a	11.2%
			Prepayment rate	n/a	1% annually
			Projected defaults    and deferrals    (% of pool balance)	n/a	33.3%
			Anticipated recoveries    (% of pool balance)	n/a	0.8%
Nonrecurring Measurements
Foreclosed and repossessed assets	4,328	Third party appraisal	Marketability discount	0.0% - 76.0%	36.1%

					Weighted
	Fair value at	Valuation	Unobservable	Range of	-average
(dollars in thousands)	June 30, 2014	technique	inputs	inputs applied	inputs applied
Recurring Measurements
Available-for-sale securities      (pooled trust preferred security)	$133	Discounted cash flow	Discount rate	n/a	16.0%
			Prepayment rate	n/a	1% annually
			Projected defaults    and deferrals    (% of pool balance)	n/a	38.8%
			Anticipated recoveries    (% of pool balance)	n/a	1.0%
Nonrecurring Measurements
Foreclosed and repossessed assets	2,977	Third party appraisal	Marketability discount	0.0% - 76.4%	14.9%

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 March 31, 2015 and June 30, 2014.

	March 31, 2015
		Quoted Prices
		in Active		Significant
		Markets for	Significant Other	Unobservable
(dollars in thousands)	Carrying	Identical Assets	Observable Inputs	Inputs
	Amount	(Level 1)	(Level 2)	(Level 3)
Financial assets
Cash and cash equivalents	$20,798	$20,798	$-	$-
Interest-bearing time deposits	2,698	-	2,698	-
Stock in FHLB	4,135	-	4,135	-
Stock in Federal Reserve Bank of St. Louis	2,340	-	2,340	-
Loans receivable, net	1,049,524	-	-	1,052,384
Accrued interest receivable	4,645	-	4,645	-
Financial liabilities
Deposits	1,056,994	640,266	-	415,479
Securities sold under agreements to repurchase	27,960	-	27,960	-
Advances from FHLB	65,080	23,700	43,174	-
Accrued interest payable	741	-	741	-
Subordinated debt	14,635	-	-	12,125
Unrecognized financial instruments (net of contract amount)
Commitments to originate loans	-	-	-	-
Letters of credit	-	-	-	-
Lines of credit	-	-	-	-

	June 30, 2014
		Quoted Prices
		in Active		Significant
		Markets for	Significant Other	Unobservable
	Carrying	Identical Assets	Observable Inputs	Inputs
	Amount	(Level 1)	(Level 2)	(Level 3)
Financial assets
Cash and cash equivalents	$14,932	$14,932	$-	$-
Interest-bearing time deposits	1,655	-	1,655	-
Stock in FHLB	4,569	-	4,569	-
Stock in Federal Reserve Bank of St. Louis	1,424	-	1,424	-
Loans receivable, net	801,056	-	-	805,543
Accrued interest receivable	4,402	-	4,402	-
Financial liabilities
Deposits	785,801	462,629	-	323,512
Securities sold under agreements to repurchase	25,561	-	25,561	-
Advances from FHLB	85,472	59,900	27,714	-
Accrued interest payable	570	-	570	-
Subordinated debt	9,727	-	-	8,059
Unrecognized financial instruments (net of contract amount)
Commitments to originate loans	-	-	-	-
Letters of credit	-	-	-	-
Lines of credit	-	-	-	-

The following methods and assumptions were used in estimating the fair values of financial instruments:

Cash and cash equivalents and interest-bearing time deposits are valued at their carrying amounts, which approximates book value. Stock in FHLB and the Federal Reserve Bank of St. Louis is valued at cost, which approximates fair value. Fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans with similar characteristics are aggregated for purposes of the calculations. The carrying amounts of accrued interest approximate their fair values.

The fair value of fixed-maturity time deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities. Non-maturity deposits and securities sold under agreements are valued at their carrying value, which approximates fair value. Fair value of advances from the FHLB is estimated by discounting maturities using an estimate of the current market for similar instruments. The fair value of subordinated debt is estimated using rates currently available to the Company for debt with similar terms and maturities. The fair value of commitments to originate loans is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed-rate loan commitments, fair value also considers the difference between current levels of interest rates and committed rates. The fair value of letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date.

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Note 12: Fair Value Measurements: Schedule of Fair Value of Financial Instruments (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Fair Value of Financial Instruments

	March 31, 2015
		Quoted Prices
		in Active		Significant
		Markets for	Significant Other	Unobservable
(dollars in thousands)	Carrying	Identical Assets	Observable Inputs	Inputs
	Amount	(Level 1)	(Level 2)	(Level 3)
Financial assets
Cash and cash equivalents	$20,798	$20,798	$-	$-
Interest-bearing time deposits	2,698	-	2,698	-
Stock in FHLB	4,135	-	4,135	-
Stock in Federal Reserve Bank of St. Louis	2,340	-	2,340	-
Loans receivable, net	1,049,524	-	-	1,052,384
Accrued interest receivable	4,645	-	4,645	-
Financial liabilities
Deposits	1,056,994	640,266	-	415,479
Securities sold under agreements to repurchase	27,960	-	27,960	-
Advances from FHLB	65,080	23,700	43,174	-
Accrued interest payable	741	-	741	-
Subordinated debt	14,635	-	-	12,125
Unrecognized financial instruments (net of contract amount)
Commitments to originate loans	-	-	-	-
Letters of credit	-	-	-	-
Lines of credit	-	-	-	-

	June 30, 2014
		Quoted Prices
		in Active		Significant
		Markets for	Significant Other	Unobservable
	Carrying	Identical Assets	Observable Inputs	Inputs
	Amount	(Level 1)	(Level 2)	(Level 3)
Financial assets
Cash and cash equivalents	$14,932	$14,932	$-	$-
Interest-bearing time deposits	1,655	-	1,655	-
Stock in FHLB	4,569	-	4,569	-
Stock in Federal Reserve Bank of St. Louis	1,424	-	1,424	-
Loans receivable, net	801,056	-	-	805,543
Accrued interest receivable	4,402	-	4,402	-
Financial liabilities
Deposits	785,801	462,629	-	323,512
Securities sold under agreements to repurchase	25,561	-	25,561	-
Advances from FHLB	85,472	59,900	27,714	-
Accrued interest payable	570	-	570	-
Subordinated debt	9,727	-	-	8,059
Unrecognized financial instruments (net of contract amount)
Commitments to originate loans	-	-	-	-
Letters of credit	-	-	-	-
Lines of credit	-	-	-	-

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Note 4: Loans and Allowance For Loan Losses: Construction Lending Policy: Construction Loans Modified for Other Than TDR (Details) (Construction Loans, USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
Construction Loans
Number of Loans Modified for Other Than TDR	57	31
Amount of Loans Modified for Other Than TDR	$ 9,600	$ 13,100

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SOUTHERN MISSOURI BANCORP, INC -- CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
INTEREST INCOME:
Loans	$ 12,975	$ 9,497	$ 38,560	$ 27,674
Investment securities	483	519	1,528	1,438
Mortgage-backed securities	435	286	1,298	587
Other interest-earning assets	16	14	98	20
Total interest income	13,909	10,316	41,484	29,719
INTEREST EXPENSE:
Deposits	1,756	1,493	5,060	4,447
Securities sold under agreements to repurchase	30	34	84	97
Advances from FHLB of Des Moines	301	272	973	814
Subordinated debt	125	83	379	223
Total interest expense	2,212	1,882	6,496	5,581
NET INTEREST INCOME	11,697	8,434	34,988	24,138
PROVISION FOR LOAN LOSSES	837	253	2,526	1,048
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	10,860	8,181	32,462	23,090
NONINTEREST INCOME:
Deposit account charges and related fees	827	628	2,572	1,863
Bank card interchange income	568	355	1,660	1,014
Loan late charges	127	57	307	174
Other loan fees	191	129	437	357
Net realized gains on sale of loans	92	112	473	356
Net realized gains (losses) on sale of AFS securities	3	(2)	6	108
Earnings on bank owned life insurance	140	126	426	384
Other noninterest income	146	57	380	153
Total noninterest income	2,094	1,462	6,261	4,409
NONINTEREST EXPENSE:
Compensation and benefits	4,541	3,215	13,313	8,878
Occupancy and equipment, net	1,424	1,045	4,414	2,807
Deposit insurance premiums	158	148	495	356
Legal and professional fees	221	321	748	1,232
Advertising	232	117	639	354
Postage and office supplies	133	169	434	440
Intangible amortization	323	186	930	467
Bank card network expense	85	586	595	909
Other operating expense	974	832	2,714	1,969
Total noninterest expense	8,091	6,619	24,282	17,412
INCOME BEFORE INCOME TAXES	4,863	3,024	14,441	10,087
INCOME TAXES	1,497	781	4,338	2,762
NET INCOME	3,366	2,243	10,103	7,325
Less: dividend on preferred shares	50	50	150	150
Net income available to common shareholders	$ 3,316	$ 2,193	$ 9,953	$ 7,175
Basic earnings per common share	$ 0.45	$ 0.33	$ 1.36	$ 1.09
Diluted earnings per common share	$ 0.44	$ 0.32	$ 1.33	$ 1.06
Dividends per common share	$ 0.085	$ 0.080	$ 0.255	$ 0.240

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Note 6: Deposits

9 Months Ended

Mar. 31, 2015

Notes

Note 6: Deposits

Note 6:  Deposits

Deposits are summarized as follows:

	March 31, 2015	June 30, 2014
(dollars in thousands)
Non-interest bearing accounts	$121,647	$68,113
NOW accounts	330,046	271,156
Money market deposit accounts	72,595	28,033
Savings accounts	115,911	95,327
Certificates	416,795	323,172
Total Deposit Accounts	$1,056,994	$785,801

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Note 5: Accounting For Certain Loans Acquired in A Transfer

9 Months Ended

Mar. 31, 2015

Notes

Note 5: Accounting For Certain Loans Acquired in A Transfer

Note 5: Accounting for Certain Loans Acquired in a Transfer

The Company acquired loans in transfers during the fiscal year ended June 30, 2011 and during the nine months ended March 31, 2015. At acquisition, certain transferred loans evidenced deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected.

Loans purchased with evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected are considered to be credit impaired. Evidence of credit quality deterioration as of the purchase date may include information such as past-due and nonaccrual status, borrower credit scores and recent loan to value percentages. Purchased credit-impaired loans are accounted for under the accounting guidance for loans and debt securities acquired with deteriorated credit quality (ASC 310-30) and initially measured at fair value, which includes estimated future credit losses expected to be incurred over the life of the loan. Accordingly, an allowance for credit losses related to these loans is not carried over and recorded at the acquisition date. Management estimated the cash flows expected to be collected at acquisition using our internal risk models, which incorporate the estimate of current key assumptions, such as default rates, severity and prepayment speeds.

The carrying amount of those loans is included in the balance sheet amounts of loans receivable at March 31, 2015 and June 30, 2014. The amounts of these loans at March 31, 2015 and June 30, 2014, are as follows: 

	March 31, 2015	June 30, 2014
(dollars in thousands)
Residential real estate	$4,372	$2,068
Construction real estate	3,212	-
Commercial real estate	13,541	1,276
Consumer loans	207	-
Commercial loans	1,198	115
Outstanding balance	$22,530	$3,459
Carrying amount, net of fair value adjustment of $3,137,379 and $287,306 at March 31, 2015 and June 30, 2014, respectively	$19,392	$3,172

Accretable yield, or income expected to be collected, is as follows:

	Three-month period ended
	March 31, 2015	March 31, 2014
(dollars in thousands)
Balance at beginning of period	$535	$637
Additions	-	-
Accretion	(78)	(32)
Reclassification from nonaccretable difference	159	1
Disposals	-	-
Balance at end of period	$616	$606

	Nine-month period ended
	March 31, 2015	March 31, 2014
(dollars in thousands)
Balance at beginning of period	$380	$799
Additions	(4)	-
Accretion	(223)	(196)
Reclassification from nonaccretable difference	463	3
Disposals	-	-
Balance at end of period	$616	$606

During the three- and nine-month periods ended March 31, 2015, and during the same periods of the prior fiscal year, the Company had no increases to the allowance for loan losses by a charge to the income statement related to these purchased credit impaired loans. During the three- and nine-month periods ended March 31, 2015, no allowance for loan losses related to these loans was reversed, as compared to $0 and $57,489, respectively, during the same periods of the prior fiscal year.

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Note 2: Organization and Summary of Significant Accounting Policies: Business Description and Basis of Presentation (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Business Description and Basis of Presentation

Organization. The Company, a Missouri corporation, was organized in 1994 and is the parent company of 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.

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 is subject to regulation by certain federal and state agencies and undergo periodic examinations by those regulatory authorities.

Basis of Financial Statement Presentation. The 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 principally 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.

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Note 13: Acquisitions

9 Months Ended

Mar. 31, 2015

Notes

Note 13: Acquisitions

Note 13: Acquisitions

On August 5, 2014, the Company completed its acquisition of Peoples Service Company (PSC) and its subsidiary, Peoples Bank of the Ozarks (Peoples), Nixa, Missouri. Peoples was merged into the Company’s bank subsidiary, Southern Bank, in early December, 2014, in connection with the conversion of Peoples’ data system. The Company acquired Peoples primarily for the purpose of conducting commercial banking activities in markets where it believes the Company’s business model will perform well, and for the long-term value of its core deposit franchise. Through March 31, 2015, the Company incurred $678,000 in third-party acquisition-related costs. Expenses totaling $528,000 are included in noninterest expense in the Company’s consolidated statement of income for the nine months ended March 31, 2015, compared to $0 for the nine months ended March 31, 2014. Notes payable of $2.9 million were contractually required to be repaid on the date of acquisition. The goodwill of $3.0 million arising from the acquisition consists largely of synergies and economies of scale expected from combining the operations of the Company and Peoples. Total goodwill was assigned to the acquisition of the bank holding company.

The following table summarizes the consideration paid for PSC and Peoples, and the amounts of assets acquired and liabilities assumed recognized at the acquisition date:

Fair Value of Consideration Transferred
(dollars in thousands)
Cash	$12,094
Common stock, at fair value	12,331
Total consideration	$24,425
Recognized amounts of identifiable assets acquired
and liabilities assumed
Cash and Cash equivalents	$18,236
Interest bearing time deposits	9,950
Investment Securities	31,257
Loans	190,445
Premises and equipment	11,785
Identifiable intangible assets	3,000
Miscellaneous other assets	4,045
Deposits	(221,887)
Advances from FHLB	(16,038)
Subordinated debt	(4,844)
Miscellaneous other liabilities	(1,558)
Notes Payable	(2,921)
Total identifiable net assets	21,492
Goodwill	$2,955

The following unaudited pro forma condensed financial information presents the results of operations of the Company, including the effects of the purchase accounting adjustments and acquisition expenses, had the acquisition taken place at the beginning of each period:

	Three months ended		Nine months ended
	March 31,		March 31,
	2015	2014	2015	2014
(dollars in thousands except per share data)
Interest income	13,909	13,161	42,551	38,790
Interest expense	2,212	2,204	6,594	6,686
Net interest income	11,697	10,957	35,957	32,104
Provision for loan losses	837	253	2,526	1,048
Noninterest income	2,094	1,854	6,376	5,477
Noninterest expense	8,091	9,107	26,063	24,743
Income before income taxes	4,863	3,451	13,744	11,790
Income taxes	1,497	940	4,264	3,410
Net income	3,366	2,511	9,480	8,380
Dividends on preferred shares	50	50	150	150
Net income available to common stockholders	3,316	2,461	9,330	8,230
Earnings per share
Basic	$0.45	$0.34	$1.25	$1.13
Diluted	$0.44	$0.33	$1.23	$1.10
Basic weighted average shares outstanding	7,413,257	7,315,266	7,442,084	7,283,634
Diluted weighted average shares outstanding	7,603,917	7,538,606	7,630,789	7,489,342

The unaudited pro forma condensed combined financial statements do not reflect any anticipated cost savings or revenue enhancements. Accordingly, the pro forma results of operations of the Company as of and after the business combination may not be indicative of the results that actually would have occurred if the combination had been in effect during the periods presented or of the results that may be attained in the future.

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Note 3: Securities: Schedule of Available-for-sale Securities Reconciliation (Details) (Investment and mortgage backed securities, USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
US Government-sponsored Enterprises Debt Securities
Available-for-sale Securities, Amortized Cost Basis	$ 15,918	$ 24,607
Available for sale Securities Gross Unrealized Gain	50	21
Available For Sale Securities Gross Unrealized Losses	(96)	(554)
Available-for-sale Securities Estimated Fair Value	15,872	24,074
US States and Political Subdivisions Debt Securities
Available-for-sale Securities, Amortized Cost Basis	40,481	43,632
Available for sale Securities Gross Unrealized Gain	2,051	1,856
Available For Sale Securities Gross Unrealized Losses	(46)	(131)
Available-for-sale Securities Estimated Fair Value	42,486	45,357
Other Debt Obligations
Available-for-sale Securities, Amortized Cost Basis	3,215	3,294
Available for sale Securities Gross Unrealized Gain	280	264
Available For Sale Securities Gross Unrealized Losses	(689)	(918)
Available-for-sale Securities Estimated Fair Value	2,806	2,640
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises
Available-for-sale Securities, Amortized Cost Basis	71,393	57,780
Available for sale Securities Gross Unrealized Gain	1,091	578
Available For Sale Securities Gross Unrealized Losses	(11)	(207)
Available-for-sale Securities Estimated Fair Value	72,473	58,151
Total Investments And Mortgage Backed Securities
Available-for-sale Securities, Amortized Cost Basis	131,007	129,313
Available for sale Securities Gross Unrealized Gain	3,472	2,719
Available For Sale Securities Gross Unrealized Losses	(842)	(1,810)
Available-for-sale Securities Estimated Fair Value	$ 133,637	$ 130,222

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Note 9: 401(k) Retirement Plan

9 Months Ended

Mar. 31, 2015

Notes

Note 9: 401(k) Retirement Plan

Note 9:  401(k) Retirement Plan

The Southern Bank 401(k) Retirement Plan (the Plan) covers substantially all Southern Bank employees who are at least 21 years of age and who have completed one year of service. The Plan provides a safe harbor matching contribution of up to 4% of eligible compensation, and also made additional, discretionary profit-sharing contributions for fiscal 2014; for fiscal 2015, the Company has maintained the safe harbor matching contribution of 4%, and expects to continue to make additional, discretionary profit-sharing contributions. During the three and nine-month periods ended March 31, 2015, retirement plan expenses recognized for the Plan were approximately $207,000, and $495,000, respectively, as compared to $128,000 and $389,000, respectively, for the same periods of the prior fiscal year.

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Note 4: Loans and Allowance For Loan Losses: Schedule of Allowance for Loan Losses and Recorded Investment (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Allowance for Loan Losses and Recorded Investment

The following tables present the balance in the allowance for loan losses and the recorded investment in loans (excluding loans in process and deferred loan fees) based on portfolio segment and impairment methods as of March 31, 2015 and June 30, 2014, and activity in the allowance for loan losses for the three- and nine-month periods ended March 31, 2015 and 2014:

	At period end and for the nine months ended March 31, 2015
(dollars in thousands)	Residential	Construction	Commercial
	Real Estate	Real Estate	Real Estate	Consumer	Commercial	Total
Allowance for loan losses:
Balance, beginning of period	$2,462	$355	$4,143	$519	$1,780	$9,259
Provision charged to expense	286	511	698	216	815	2,526
Losses charged off	(24)	-	(9)	(54)	(40)	(127)
Recoveries	10	-	40	32	3	85
Balance, end of period	$2,734	$866	$4,872	$713	$2,558	$11,743
Ending Balance: individually evaluated for impairment	$-	$-	$-	$59	$-	$59
Ending Balance: collectively evaluated for impairment	$2,734	$866	$4,872	$654	$2,558	$11,684
Ending Balance: loans acquired with deteriorated credit quality	$-	$-	$-	$-	$-	$-
Loans:
Ending Balance: individually evaluated for impairment	$-	$-	$-	$59	$-	$59
Ending Balance: collectively evaluated for impairment	$377,500	$43,608	$394,407	$45,630	$180,580	$1,041,725
Ending Balance: loans acquired with deteriorated credit quality	$3,823	$2,481	$11,797	$195	$1,096	$19,392

	For the three months ended March 31, 2015
(dollars in thousands)	Residential	Construction	Commercial
	Real Estate	Real Estate	Real Estate	Consumer	Commercial	Total
Allowance for loan losses:
Balance, beginning of period	$2,800	$561	$4,564	$736	$2,297	$10,958
Provision charged to expense	(54)	305	316	(12)	282	837
Losses charged off	(13)	-	(8)	(16)	(21)	(58)
Recoveries	1	-	-	5	-	6
Balance, end of period	$2,734	$866	$4,872	$713	$2,558	$11,743

	At period end and for the nine months ended March 31, 2014
(dollars in thousands)	Residential	Construction	Commercial
	Real Estate	Real Estate	Real Estate	Consumer	Commercial	Total
Allowance for loan losses:
Balance, beginning of period	$1,810	$273	$3,602	$472	$2,229	$8,386
Provision charged to expense	562	130	446	55	(145)	1,048
Losses charged off	(150)	-	(69)	(51)	(517)	(787)
Recoveries	15	-	1	15	9	40
Balance, end of period	$2,237	$403	$3,980	$491	$1,576	$8,687
Ending Balance: individually evaluated for impairment	$-	$-	$-	$-	$-	$-
Ending Balance: collectively evaluated for impairment	$2,237	$403	$3,980	$491	$1,576	$8,687
Ending Balance: loans acquired with deteriorated credit quality	$-	$-	$-	$-	$-	$-

	For the three months ended March 31, 2014
(dollars in thousands)	Residential	Construction	Commercial
	Real Estate	Real Estate	Real Estate	Consumer	Commercial	Total
Allowance for loan losses:
Balance, beginning of period	$2,131	$424	$3,787	$496	$2,247	$9,085
Provision charged to expense	232	(21)	193	23	(174)	253
Losses charged off	(127)	-	-	(32)	(504)	(663)
Recoveries	1	-	-	4	7	12
Balance, end of period	$2,237	$403	$3,980	$491	$1,576	$8,687

	At June 30, 2014
(dollars in thousands)	Residential	Construction	Commercial
	Real Estate	Real Estate	Real Estate	Consumer	Commercial	Total
Allowance for loan losses:
Balance, end of period	$2,462	$355	$4,143	$519	$1,780	$9,259
Ending Balance: individually evaluated for impairment	$-	$-	$-	$-	$-	$-
Ending Balance: collectively evaluated for impairment	$2,462	$355	$4,143	$519	$1,780	$9,259
Ending Balance: loans acquired with deteriorated credit quality	$-	$-	$-	$-	$-	$-
Loans:
Ending Balance: individually evaluated for impairment	$-	$-	$-	$-	$-	$-
Ending Balance: collectively evaluated for impairment	$302,111	$21,477	$307,253	$35,223	$140,957	$807,021
Ending Balance: loans acquired with deteriorated credit quality	$1,790	$-	$1,267	$-	$115	$3,172

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Note 8: Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
Details
Deferred Tax Asset Provision for Losses on Loans	$ 4,811	$ 3,696
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits	499	450
Deferred Tax Asset Other Than Temporary Impairment on Available for Sale Securities	138	141
Deferred Tax Assets, Operating Loss Carryforwards	789	853
Deferred tax asset minimum tax credit	130	130
Deferred Tax Asset Unrealized Loss on Other Real Estate	6	38
Deferred Tax Assets, Other	662
Deferred Tax Assets, Gross	7,035	5,308
Deferred Tax Liabilities FHLB Stock Dividends	71	157
Deferred Tax Liabilities Purchase Accounting Adjustments	1,919	1,533
Deferred Tax Liabilities Depreciation	885	767
Deferred Tax Liabilities, Prepaid Expenses	110	250
Deferred Tax Liabilities, Unrealized Gains on Trading Securities	973	336
Deferred Tax Liabilities, Other		164
Deferred Tax Liabilities, Gross, Current	3,957	3,207
Deferred Tax Assets, Net	$ 3,078	$ 2,101

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Note 7: Earnings Per Share

9 Months Ended

Mar. 31, 2015

Notes

Note 7: Earnings Per Share

Note 7:  Earnings Per Share

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

	Three months ended		Nine months ended
	March,		March,
	2015	2014	2015	2014
(dollars in thousands except per share data)
Net income	$3,366	$2,243	$10,103	$7,325
Dividend payable on preferred stock	50	50	150	150
Net income available to common shareholders	$3,316	$2,193	$9,953	$7,175
Average Common shares – outstanding basic	7,413,257	6,623,480	7,310,494	6,591,848
Stock options under treasury stock method	190,660	223,340	188,625	205,708
Average Common shares – outstanding diluted	7,603,917	6,846,820	7,499,119	6,797,556
Basic earnings per common share	$0.45	$0.33	$1.36	$1.09
Diluted earnings per common share	$0.44	$0.32	$1.33	$1.06

At March 31, 2015 and 2014, no options outstanding had an exercise price exceeding the market price.

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Note 8: Income Taxes

9 Months Ended

Mar. 31, 2015

Notes

Note 8: Income Taxes

Note 8: Income Taxes  

The Company files consolidated income tax returns in the U.S. Federal jurisdiction and various states. The Company is no longer subject to federal and state examinations by tax authorities for fiscal years before 2011. The Company recognized no interest or penalties related to income taxes.

The Company’s income tax provision is comprised of the following components:

(dollars in thousands)	For the three-month period ended		For the nin-month period ended
	March 31, 2015	March 31, 2014	March 31, 2015	March 31, 2014
Income taxes
Current	$1,616	$1,976	$5,081	$3,377
Deferred	(119)	(1,195	(743)	(615)
Total income tax provision	$1,497	$781	$4,338	$2,762

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

	March 31, 2015	June 30, 2014
(dollars in thousands)
Deferred tax assets:
Provision for losses on loans	$4,811	$3,696
Accrued compensation and benefits	499	450
Other-than-temporary impairment on available for sale securities	138	141
NOL carry forwards acquired	789	853
Minimum Tax Credit	130	130
Unrealized loss on other real estate	6	38
Other	662	-
Total deferred tax assets	7,035	5,308
Deferred tax liabilities:
FHLB stock dividends	71	157
Purchase accounting adjustments	1,919	1,533
Depreciation	885	767
Prepaid expenses	110	250
Unrealized gain on available for sale securities	973	336
Other	-	164
Total deferred tax liabilities	3,957	3,207
Net deferred tax (liability) asset	$3,078	$2,101

As of March 31, 2015 and June 30, 2014, the Company had approximately $2.3 million of federal and state net operating loss carryforwards, which were acquired in the July 2009 acquisition of Southern Bank of Commerce and February 2014 acquisition of Citizens State Bankshares of Bald Knob, Inc. The amount reported is net of the Internal Revenue Code Section 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 is shown below:

(dollars in thousands)	For the three-month period ended		For the nine-month period ended
	March 31, 2015	March 31, 2014	March 31, 2015	March 31, 2014
Tax at statutory rate	$1,654	$1,028	$4,910	$3,430
Increase (reduction) in taxes resulting from:
Nontaxable municipal income	(133)	(133)	(398)	(395)
State tax, net of Federal benefit	133	59	380	212
Cash surrender value of Bank-owned life insurance	(47)	(43)	(145)	(131)
Tax credit benefits	(91)	(82)	(272)	(244)
Other, net	(18)	(49)	(136)	(110)
Actual provision	$1,497	$781	$4,338	$2,762

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

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Note 10: Corporate Obligated Floating Rate Trust Preferred Securities

9 Months Ended

Mar. 31, 2015

Notes

Note 10: Corporate Obligated Floating Rate Trust Preferred Securities

Note 10:  Corporate Obligated Floating Rate Trust Preferred Securities 

Southern Missouri Statutory Trust I issued $7.0 million of Floating Rate Capital Securities (the “Trust Preferred Securities”) in March, 2004, with a liquidation value of $1,000 per share. The securities are due in 30 years, are now redeemable at par, 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. Southern Missouri Statutory Trust I used the proceeds from the sale of the Trust Preferred Securities to purchase junior subordinated debentures of the Company. The Company has 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. The carrying value of the debt securities was approximately $2.5 million at March 31, 2015, and June 30, 2014.

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. The carrying value of the debt securities was approximately $4.9 million at March 31, 2015.

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Note 4: Loans and Allowance For Loan Losses: Interest Income Recognized on Impaired Loans (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Interest Income Recognized on Impaired Loans

	For the three-month period ended
	March 31, 2015
	Average
(dollars in thousands)	Investment in	Interest Income
	Impaired Loans	Recognized
Residential Real Estate	$3,950	$54
Construction Real Estate	2,502	42
Commercial Real Estate	11,963	184
Consumer Loans	195	3
Commercial Loans	1,101	23
Total Loans	$19,711	$306

	For the three-month period ended
	March 31, 2014
	Average
(dollars in thousands)	Investment in	Interest Income
	Impaired Loans	Recognized
Residential Real Estate	$1,745	$36
Construction Real Estate	-	-
Commercial Real Estate	1,283	21
Consumer Loans	-	-
Commercial Loans	582	-
Total Loans	$3,610	$57

	For the nine-month period ended
	March 31, 2015
	Average
(dollars in thousands)	Investment in	Interest Income
	Impaired Loans	Recognized
Residential Real Estate	$3,451	$191
Construction Real Estate	1,913	141
Commercial Real Estate	9,390	554
Consumer Loans	147	9
Commercial Loans	859	51
Total Loans	$15,760	$946

	For the nine-month period ended
	March 31, 2014
	Average
(dollars in thousands)	Investment in	Interest Income
	Impaired Loans	Recognized
Residential Real Estate	$1,730	$163
Construction Real Estate	-	-
Commercial Real Estate	1,328	110
Consumer Loans	-	-
Commercial Loans	789	1
Total Loans	$3,847	$274

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Note 13: Acquisitions: Schedule of Business Acquisition -- Peoples Bank (Details) (Peoples Bank, USD $) In Thousands, unless otherwise specified	Aug. 05, 2014
Business Combination Common Stock, at Fair Value	$ 12,331
Cash
Business Combination, Contingent Consideration, Asset	12,094
Total consideration
Business Combination, Contingent Consideration, Asset	24,425
Cash and Cash Equivalents
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	18,236
Interest-bearing time deposits
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	9,950
Securities Investment
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	31,257
Loans Receivable
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	190,445
Property, Plant and Equipment
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	11,785
Identifiable intangible assets
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	3,000
Miscellaneous other assets
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	4,045
Deposits
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	(221,887)
Federal Home Loan Bank Advances
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	(16,038)
Subordinated Debt
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	(4,844)
Miscellaneous other liabilities
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	(1,558)
Notes Payable
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	(2,921)
Total identifiable net assets
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	21,492
Goodwill
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets	$ 2,955

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Note 3: Securities: Investments Classified by Contractual Maturity Date (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Details
Available-for-sale Securities, Debt Maturities, Next Twelve Months, Amortized Cost Basis	$ 1,535
Available-for-sale Securities, Debt Maturities, Next Twelve Months, Fair Value	1,541
Available-for-sale Securities, Debt Maturities, Year Two Through Five, Amortized Cost Basis	15,551
Available-for-sale Securities, Debt Maturities, Year Two Through Five, Fair Value	15,634
Available-for-sale Securities, Debt Maturities, Year Six Through Ten, Amortized Cost Basis	17,362
Available-for-sale Securities, Debt Maturities, Year Six Through Ten, Fair Value	17,856
Available-for-sale Securities, Debt Maturities, after Ten Years, Amortized Cost Basis	25,166
Available-for-sale Securities, Debt Maturities, after Ten Years, Fair Value	26,133
Available-for-sale Securities, Debt Maturities, Amortized Cost	59,614
Available-for-sale Securities,Debt Maturities Estimated Fair Value	61,164
Mortgage Backed Securities Available for Sale Amortized Cost	71,393
Mortgage-backed Securities Available-for-sale, Fair Value Disclosure	72,473
Investment and Mortgage-Backed Securities Amortized Cost by Contractual Maturity	131,007
Investment and Mortgage-Backed Securities Estimated Fair Value by Contractual Maturity	$ 133,637

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Note 4: Loans and Allowance For Loan Losses: Schedule of Debtor Troubled Debt Restructuring, Current Period (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Debtor Troubled Debt Restructuring, Current Period

	For the three-month period ended
	March 31, 2015		March 31, 2014
(dollars in thousands)	Number of	Recorded	Number of	Recorded
	modifications	Investment	modifications	Investment
Residential real estate	2	$169	-	$-
Construction real estate	-	-	-	-
Commercial real estate	-	-	1	299
Consumer loans	-	-	-	-
Commercial loans	-	-	5	179
Total	2	$169	6	$478

	For the nine-month period ended
	March 31, 2015		March 31, 2014
(dollars in thousands)	Number of	Recorded	Number of	Recorded
	modifications	Investment	modifications	Investment
Residential real estate	2	$169	1	$37
Construction real estate	-	-	-	-
Commercial real estate	1	41	2	328
Consumer loans	-	-	-	-
Commercial loans	1	250	5	179
Total	4	$460	8	$544

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Note 4: Loans and Allowance For Loan Losses: Schedule of Debtor Troubled Debt Restructuring, Current Period (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Residential Mortgage
Financing Receivable Modifications Number of Contracts	2		2	1
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 169		$ 169	$ 37
Commercial Real Estate
Financing Receivable Modifications Number of Contracts		1	1	2
Financing Receivable, Modifications, Pre-Modification Recorded Investment		299	41	328
Commercial Loan
Financing Receivable Modifications Number of Contracts		5	1	5
Financing Receivable, Modifications, Pre-Modification Recorded Investment		179	250	179
Total loans
Financing Receivable Modifications Number of Contracts	2	6	4	8
Financing Receivable, Modifications, Pre-Modification Recorded Investment	$ 169	$ 478	$ 460	$ 544

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Note 4: Loans and Allowance For Loan Losses: Schedule of Impaired Loans (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Impaired Loans

	March 31, 2015
(dollars in thousands)	Recorded	Unpaid Principal	Specific
	Balance	Balance	Allowance
Loans without a specific valuation allowance:
Residential real estate	$3,900	$4,449	$-
Construction real estate	2,481	3,212	-
Commercial real estate	13,891	15,635	-
Consumer loans	195	207	-
Commercial loans	1,355	1,456	-
Loans with a specific valuation allowance:
Residential real estate	$-	$-	$-
Construction real estate	-	-	-
Commercial real estate	-	-	-
Consumer loans	59	59	59
Commercial loans	-	-	-
Total:
Residential real estate	$3,900	$4,449	$-
Construction real estate	$2,481	$3,212	$-
Commercial real estate	$13,891	$15,635	$-
Consumer loans	$254	$266	$59
Commercial loans	$1,355	$1,456	$-

	June 30, 2014
(dollars in thousands)	Recorded	Unpaid Principal	Specific
	Balance	Balance	Allowance
Loans without a specific valuation allowance:
Residential real estate	$1,790	$2,068	$-
Construction real estate	-	-	-
Commercial real estate	3,383	3,391	-
Consumer loans	-	-	-
Commercial loans	115	115	-
Loans with a specific valuation allowance:
Residential real estate	$-	$-	$-
Construction real estate	-	-	-
Commercial real estate	-	-	-
Consumer loans	-	-	-
Commercial loans	-	-	-
Total:
Residential real estate	$1,790	$2,068	$-
Construction real estate	$-	$-	$-
Commercial real estate	$3,383	$3,391	$-
Consumer loans	$-	$-	$-
Commercial loans	$115	$115	$-

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Note 4: Loans and Allowance For Loan Losses: Financing Receivable Credit Quality Indicators (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
Residential Mortgage | Pass
Financing Receivable Credit Quality Indicators	$ 374,607	$ 300,926
Residential Mortgage | Watch
Financing Receivable Credit Quality Indicators	3,232	301
Residential Mortgage | Substandard
Financing Receivable Credit Quality Indicators	3,484	2,674
Residential Mortgage | Total Loans By Credit Risk Profile
Financing Receivable Credit Quality Indicators	381,323	303,901
Construction Loans | Pass
Financing Receivable Credit Quality Indicators	45,958	21,477
Construction Loans | Substandard
Financing Receivable Credit Quality Indicators	131
Construction Loans | Total Loans By Credit Risk Profile
Financing Receivable Credit Quality Indicators	46,089	21,477
Commercial Real Estate | Pass
Financing Receivable Credit Quality Indicators	392,438	303,853
Commercial Real Estate | Watch
Financing Receivable Credit Quality Indicators	6,894	1,014
Commercial Real Estate | Substandard
Financing Receivable Credit Quality Indicators	6,872	3,653
Commercial Real Estate | Total Loans By Credit Risk Profile
Financing Receivable Credit Quality Indicators	406,204	308,520
Consumer Loan | Pass
Financing Receivable Credit Quality Indicators	45,564	35,046
Consumer Loan | Watch
Financing Receivable Credit Quality Indicators	76	40
Consumer Loan | Substandard
Financing Receivable Credit Quality Indicators	244	137
Consumer Loan | Total Loans By Credit Risk Profile
Financing Receivable Credit Quality Indicators	45,884	35,223
Commercial Loan | Pass
Financing Receivable Credit Quality Indicators	179,042	140,138
Commercial Loan | Watch
Financing Receivable Credit Quality Indicators	126	362
Commercial Loan | Substandard
Financing Receivable Credit Quality Indicators	2,508	572
Commercial Loan | Total Loans By Credit Risk Profile
Financing Receivable Credit Quality Indicators	$ 181,676	$ 141,072

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Note 2: Organization and Summary of Significant Accounting Policies: Share-based Compensation, Option and Incentive Plans Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Share-based Compensation, Option and Incentive Plans Policy

Incentive Plan. The Company accounts for its Management and Recognition Plan, 2003 Stock Option and Incentive Plan and 2008 Equity Incentive Plan 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 aggregate purchase price and the fair value on the date the shares are considered earned represents a tax benefit to the Company and is recorded as an adjustment to additional paid in capital

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Note 4: Loans and Allowance For Loan Losses: Purchased Credit Impaired Loans Included in Nonaccrual Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Purchased Credit Impaired Loans Included in Nonaccrual Policy

The above amounts include purchased credit impaired loans. At March 31, 2015 and June 30, 2014, these loans comprised $2.6 million and $0 of nonaccrual loans, respectively. Purchased credit impaired loans are placed on nonaccrual status in the event the Company cannot reasonably estimate cash flows expected to be collected.

Included in certain loan categories in the impaired loans are TDRs, where economic concessions have been granted to borrowers who have experienced financial difficulties. 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. 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.

When loans and leases are modified into a TDR, the Company evaluates any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan or lease agreement, and uses the current fair value of the collateral, less selling costs, for collateral dependent loans. If the Company determines that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs, and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance. In periods subsequent to modification, the Company evaluates all TDRs, including those that have payment defaults, for possible impairment and recognizes impairment through the allowance.

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Note 1: Basis of Presentation: Basis of Presentation and Significant Accounting Policies (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Basis of Presentation and Significant Accounting Policies

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Securities and Exchange Commission (SEC) Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all material adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated balance sheet of Southern Missouri Bancorp, Inc. (the Company) as of June 30, 2014, has been derived from the audited consolidated balance sheet of the Company as of that date. Operating results for the three- and nine-month periods ended March 31, 2015, are not necessarily indicative of the results that may be expected for the entire fiscal year. For additional information, refer to the audited consolidated financial statements included in the Company’s June 30, 2014, Form 10-K, which was filed with the SEC.

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Note 12: Fair Value Measurements: Fair Value Measurements, Nonrecurring (Details) (Foreclosed and repossessed assets held for sale, USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
Foreclosed and repossessed assets held for sale
Assets, Fair Value Disclosure, Nonrecurring	$ 4,328	$ 2,977

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Note 2: Organization and Summary of Significant Accounting Policies: Cash and Cash Equivalents Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Cash and Cash Equivalents Policy

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 $12.7 million and $8.6 million at March 31, 2015 and June 30, 2014, respectively. The deposits are held in various commercial banks with none exceeding the FDIC’s deposit insurance limits, as well as at the Federal Reserve Bank of St. Louis and the Federal Home Loan Bank of Des Moines (FHLB).

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Note 4: Loans and Allowance For Loan Losses: Schedule of Loan Portfolio Aging Analysis (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
Residential Mortgage
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	$ 1,464	$ 1,119
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	172	51
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	650	451
Financing Receivable, Recorded Investment, Past Due	2,286	1,621
Financing Receivable, Recorded Investment, Current	379,037	302,280
TotalLoansReceivable	381,323	303,901
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	127	106
Construction Loans
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due		65
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	131
Financing Receivable, Recorded Investment, Past Due	131	65
Financing Receivable, Recorded Investment, Current	45,958	21,412
TotalLoansReceivable	46,089	21,477
Commercial Real Estate
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	1,044	1,025
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	53
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	40	18
Financing Receivable, Recorded Investment, Past Due	1,137	1,043
Financing Receivable, Recorded Investment, Current	405,067	307,477
TotalLoansReceivable	406,204	308,520
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing		18
Consumer Loan
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	268	204
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	118	30
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	11	34
Financing Receivable, Recorded Investment, Past Due	397	268
Financing Receivable, Recorded Investment, Current	45,487	34,955
TotalLoansReceivable	45,884	35,223
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	10	6
Commercial Loan
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	584	101
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	20	431
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	55	347
Financing Receivable, Recorded Investment, Past Due	659	879
Financing Receivable, Recorded Investment, Current	181,017	140,193
TotalLoansReceivable	181,676	141,072
Total loans
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	3,360	2,514
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	363	512
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	887	850
Financing Receivable, Recorded Investment, Past Due	4,610	3,876
Financing Receivable, Recorded Investment, Current	1,056,566	806,317
TotalLoansReceivable	1,061,176	810,193
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing	$ 137	$ 130

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Note 4: Loans and Allowance For Loan Losses: Purchased Impaired Loans Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Purchased Impaired Loans Policy

At March 31, 2015, purchased credit impaired loans included above accounted for $19.4 million of impaired loans without a specific valuation allowance; no loans with a specific valuation allowance; and $19.4 million of total impaired loans. At June 30, 2014, purchased credit impaired loans accounted for $3.2 million of impaired loans without a specific valuation allowance; no loans with a specific valuation allowance; and $3.2 million of total impaired loans.

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Note 5: Accounting For Certain Loans Acquired in A Transfer: Schedule of Loans Acquired in Transfer Accretable Yield (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield, Additions			$ (4)
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield, Accretion	(78)	(32)	(223)	(196)
Certain Loans Acquired in Transfer Accounted for as Debt Securities, Accretable Yield, Reclassifications to Nonaccretable Difference	159	1	463	3
Beginning of period
Certain Loans Acquired in Transfer Accounted for as Available-for-sale Debt Securities, Accretable Yield, Accretion	535	637	380	799
End of period
Certain Loans Acquired in Transfer Accounted for as Available-for-sale Debt Securities, Accretable Yield, Accretion	$ 616	$ 606	$ 616	$ 606

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Note 3: Securities: Other Securities Disclosure (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Other Securities Disclosure

Other securities. At March 31, 2015, there were three pooled trust preferred securities with an estimated fair value of $757,000 and unrealized losses of $681,000 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, a lack of demand or inactive market for these securities, and concerns regarding the financial institutions that issued the underlying trust preferred securities. Rules adopted by the federal banking agencies in December 2013 to implement Section 619 of the Dodd-Frank Act (the “Volcker Rule”) generally prohibit banking entities from engaging in proprietary trading and from investing in, sponsoring, or having certain relationships with a hedge fund or private equity fund. All pooled trust preferred securities owned by the Company were included in a January 2014 listing of securities which the agencies considered to be grandfathered with regard to these prohibitions; as such, banking entities are permitted to retain their interest in these securities, provided the interest was acquired on or before December 10, 2013, unless acquired pursuant to a merger or acquisition.

The March 31, 2015, cash flow analysis for these three 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 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 three securities included annualized prepayments of 1%; no recoveries on issuers currently in default; recoveries of zero to 49 percent on currently deferred issuers within the next two years; new defaults of 50 basis points annually; and recoveries of 10% of new defaults.

One of these three securities has continued to receive cash interest payments in full since our purchase; the second of the three securities 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 interest payments during fiscal 2014. Our cash flow analysis indicates that interest payments are expected to continue for these two securities. Because the Company does not intend to sell these securities and it is not more-likely-than-not that the Company will be required to sell these securities prior to recovery of their amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2015.

For the last of these three securities, the Company is receiving PIK, in lieu of cash interest. Pooled trust preferred securities generally allow, under the terms of the issue, for issuers included in the pool to defer interest for up to five consecutive years. After five years, if not cured, the issuer is considered to be in default and the trustee may demand payment in full of principal and accrued interest. Issuers are also considered to be in default in the event of the failure of the issuer or a subsidiary bank. Both deferred and defaulted issuers are considered non-performing, and the trustee calculates, on a quarterly or semi-annual basis, certain coverage tests prior to the payment of cash interest to owners of the various tranches of the securities. The tests must show that performing collateral is sufficient to meet requirements for senior tranches, both in terms of cash flow and collateral value, before cash interest can be paid to subordinate tranches. If the tests are not met, available cash flow is diverted to pay down the principal balance of senior tranches until the coverage tests are met, before cash interest payments to subordinate tranches may resume. The Company is receiving PIK for this security due to failure of the required coverage tests described above at senior tranche levels of the security. The risk to holders of a tranche of a security in PIK status is that the pool’s total cash flow will not be sufficient to repay all principal and accrued interest related to the investment. The impact of payment of PIK to subordinate tranches is to strengthen the position of senior tranches, by reducing the senior tranches’ principal balances relative to available collateral and cash flow, while increasing principal balances, decreasing cash flow, and increasing credit risk to the tranches receiving PIK. For this security in receipt of PIK, the principal balance is increasing, cash flow has stopped, and, as a result, credit risk is increasing. The Company expects this security to remain in PIK status for a period of 1.5 years. Despite these facts, because the Company does not intend to sell this security and it is not more-likely-than-not that the Company will be required to sell this security prior to recovery of its amortized cost basis, which may be maturity, the Company does not consider this investment to be other-than-temporarily impaired at March 31, 2015.

At December 31, 2008, analysis of a fourth pooled trust preferred security indicated other-than-temporary impairment (OTTI). The loss recognized at that time reduced the amortized cost basis for the security, and as of March 31, 2015, the estimated fair value of the security exceeds the new, lower amortized cost basis.

The Company does not believe any other individual unrealized loss as of March 31, 2015, represents OTTI. However, the Company could be required to recognize OTTI losses in future periods with respect to its available for sale investment securities portfolio. The amount and timing of any additional OTTI will depend on the decline in the underlying cash flows of the securities. Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss recognized in the period the other-than-temporary impairment is identified.

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Note 6: Deposits: Schedule of Deposits (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
Details
Noninterest-bearing Deposit Liabilities	$ 121,647	$ 68,113
Deposits, Negotiable Order of Withdrawal (NOW)	330,046	271,156
Deposits, Money Market Deposits	72,595	28,033
Deposits, Savings Deposits	115,911	95,327
Time Deposits	416,795	323,172
Deposit Liabilities	$ 1,056,994	$ 785,801

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SOUTHERN MISSOURI BANCORP, INC -- CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Statements of Comprehensive Income
Net income	$ 3,366	$ 2,243	$ 10,103	$ 7,325
Other comprehensive income:
Unrealized gains (losses) on securities available-for-sale	465	928	1,700	(321)
Less: reclassification adjustment for realized gains (losses) included in net income	3	(2)	6	108
Unrealized gains on available-for-sale securities for which a portion of an other-than-temporary impairment has been recognized in income	29	293	28	294
Tax benefit (expense)	(159)	(453)	(637)	50
Total other comprehensive income (loss)	332	770	1,085	(85)
Comprehensive income	$ 3,698	$ 3,013	$ 11,188	$ 7,240

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Note 3: Securities: Other than Temporary Impairment, Credit Losses Recognized in Earnings (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Reductions, Cash Flows	$ (7)
Beginning of period
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Credit Losses on Debt Securities Held	375	375
End of period
Other Than Temporary Impairment Credit Losses Recognized In Earnings Credit Losses On Debt Securities Held	$ 368	$ 375

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Note 4: Loans and Allowance For Loan Losses

9 Months Ended

Mar. 31, 2015

Notes

Note 4: Loans and Allowance For Loan Losses

Note 4:  Loans and Allowance for Loan Losses

Classes of loans are summarized as follows:

	March 31, 2015	June 30, 2014
(dollars in thousands)
Real Estate Loans:
Residential	$381,323	$303,901
Construction	69,882	40,738
Commercial	406,204	308,520
Consumer loans	45,884	35,223
Commercial loans	181,676	141,072
	1,084,969	829,454
Loans in process	(23,793)	(19,261)
Deferred loan fees, net	91	122
Allowance for loan losses	(11,743)	(9,259)
Total loans	$1,049,524	$801,056

The Company’s lending activities consist of originating 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. The Company has also occasionally purchased loan participation interests originated by other lenders and secured by properties generally located in the states of Missouri and Arkansas.

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.

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 the primary lending area. The majority of the multi-family residential loans that are originated by the Bank 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.

Commercial Real Estate Lending. The Company actively originates loans secured by commercial real estate including land (improved, unimproved, and farmland), strip shopping centers, retail establishments 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.

Most commercial real estate loans originated by the Company generally are based on amortization schedules of up to 20 years with monthly principal and interest payments. Generally, the interest rate received on these loans is fixed for a maturity of up to five 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 five years. For loans with interest rates that adjust, 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 secured by mortgage loans for the construction of owner occupied residential real estate or to finance speculative construction secured by 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 and have maturities ranging from six to twelve months. Once construction is completed, loans may be converted to permanent status with monthly payments using amortization schedules of up to 30 years on residential and generally up to 20 years on commercial real estate.

While the Company typically utilizes maturity periods ranging from 6 to 12 months to closely monitor the inherent risks associated with construction 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 for a construction loan is approximately nine 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 obtains interim inspections completed by an independent third party. This monitoring further allows the Company an opportunity to assess risk. At March 31, 2015, construction loans outstanding included 57 loans, totaling $9.6 million, for which a modification had been agreed to. At June 30, 2014, construction loans outstanding included 31 loans, totaling $13.1 million, for which a modification had been agreed to. All modifications were solely for the purpose of extending the maturity date due to conditions described above.  None of these modifications were executed due to financial difficulty on the part of the borrower and, therefore, the loans were not accounted for as TDRs.

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 (HELOCs), which are variable, are tied to the prime rate of interest and are for a period of ten years.

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.

Automobile loans originated by the Company include both direct loans and a smaller amount of indirect 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.

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.

The following tables present the balance in the allowance for loan losses and the recorded investment in loans (excluding loans in process and deferred loan fees) based on portfolio segment and impairment methods as of March 31, 2015 and June 30, 2014, and activity in the allowance for loan losses for the three- and nine-month periods ended March 31, 2015 and 2014:

	At period end and for the nine months ended March 31, 2015
(dollars in thousands)	Residential	Construction	Commercial
	Real Estate	Real Estate	Real Estate	Consumer	Commercial	Total
Allowance for loan losses:
Balance, beginning of period	$2,462	$355	$4,143	$519	$1,780	$9,259
Provision charged to expense	286	511	698	216	815	2,526
Losses charged off	(24)	-	(9)	(54)	(40)	(127)
Recoveries	10	-	40	32	3	85
Balance, end of period	$2,734	$866	$4,872	$713	$2,558	$11,743
Ending Balance: individually evaluated for impairment	$-	$-	$-	$59	$-	$59
Ending Balance: collectively evaluated for impairment	$2,734	$866	$4,872	$654	$2,558	$11,684
Ending Balance: loans acquired with deteriorated credit quality	$-	$-	$-	$-	$-	$-
Loans:
Ending Balance: individually evaluated for impairment	$-	$-	$-	$59	$-	$59
Ending Balance: collectively evaluated for impairment	$377,500	$43,608	$394,407	$45,630	$180,580	$1,041,725
Ending Balance: loans acquired with deteriorated credit quality	$3,823	$2,481	$11,797	$195	$1,096	$19,392

	For the three months ended March 31, 2015
(dollars in thousands)	Residential	Construction	Commercial
	Real Estate	Real Estate	Real Estate	Consumer	Commercial	Total
Allowance for loan losses:
Balance, beginning of period	$2,800	$561	$4,564	$736	$2,297	$10,958
Provision charged to expense	(54)	305	316	(12)	282	837
Losses charged off	(13)	-	(8)	(16)	(21)	(58)
Recoveries	1	-	-	5	-	6
Balance, end of period	$2,734	$866	$4,872	$713	$2,558	$11,743

	At period end and for the nine months ended March 31, 2014
(dollars in thousands)	Residential	Construction	Commercial
	Real Estate	Real Estate	Real Estate	Consumer	Commercial	Total
Allowance for loan losses:
Balance, beginning of period	$1,810	$273	$3,602	$472	$2,229	$8,386
Provision charged to expense	562	130	446	55	(145)	1,048
Losses charged off	(150)	-	(69)	(51)	(517)	(787)
Recoveries	15	-	1	15	9	40
Balance, end of period	$2,237	$403	$3,980	$491	$1,576	$8,687
Ending Balance: individually evaluated for impairment	$-	$-	$-	$-	$-	$-
Ending Balance: collectively evaluated for impairment	$2,237	$403	$3,980	$491	$1,576	$8,687
Ending Balance: loans acquired with deteriorated credit quality	$-	$-	$-	$-	$-	$-

	For the three months ended March 31, 2014
(dollars in thousands)	Residential	Construction	Commercial
	Real Estate	Real Estate	Real Estate	Consumer	Commercial	Total
Allowance for loan losses:
Balance, beginning of period	$2,131	$424	$3,787	$496	$2,247	$9,085
Provision charged to expense	232	(21)	193	23	(174)	253
Losses charged off	(127)	-	-	(32)	(504)	(663)
Recoveries	1	-	-	4	7	12
Balance, end of period	$2,237	$403	$3,980	$491	$1,576	$8,687

	At June 30, 2014
(dollars in thousands)	Residential	Construction	Commercial
	Real Estate	Real Estate	Real Estate	Consumer	Commercial	Total
Allowance for loan losses:
Balance, end of period	$2,462	$355	$4,143	$519	$1,780	$9,259
Ending Balance: individually evaluated for impairment	$-	$-	$-	$-	$-	$-
Ending Balance: collectively evaluated for impairment	$2,462	$355	$4,143	$519	$1,780	$9,259
Ending Balance: loans acquired with deteriorated credit quality	$-	$-	$-	$-	$-	$-
Loans:
Ending Balance: individually evaluated for impairment	$-	$-	$-	$-	$-	$-
Ending Balance: collectively evaluated for impairment	$302,111	$21,477	$307,253	$35,223	$140,957	$807,021
Ending Balance: loans acquired with deteriorated credit quality	$1,790	$-	$1,267	$-	$115	$3,172

Management’s opinion as to the ultimate collectability of loans is subject to estimates regarding future cash flows from operations and the value of property, real and personal, pledged as collateral. These estimates are affected by changing economic conditions and the economic prospects of borrowers.

The allowance for loan losses is maintained at a level that, in management’s judgment, is adequate to cover probable credit losses inherent in the loan portfolio at the balance sheet date. The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when an amount is determined to be uncollectible, based on management’s analysis of expected cash flow (for non-collateral-dependent loans) or collateral value (for collateral-dependent loans). Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of allocated and general components. The allocated component relates to loans that are classified as impaired. For those loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan.

Under the Company’s methodology, loans are first segmented into 1) those comprising large groups of smaller-balance homogeneous loans, including single-family mortgages and installment loans, which are collectively evaluated for impairment, and 2) all other loans, which are individually evaluated. Those loans in the second category are 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. The loans subject to credit classification represent the portion of the portfolio subject to the greatest credit risk and where adjustments to the allowance for losses on loans as a result of provision and charge offs are most likely to have a significant impact on operations.

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 represents a probable loss or risk that should be recognized.

A loan is considered impaired when, based on current information and events, it is probable that the scheduled payments of principal or interest will not be able to be collected when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. 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. Impairment is measured on a loan-by-loan basis for commercial and agricultural loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent.

Groups of loans with similar risk characteristics are collectively evaluated for impairment based on the group’s historical loss experience adjusted for changes in trends, conditions and other relevant factors that affect repayment of the loans. Accordingly, individual consumer and residential loans are not separately identified for impairment measurements, unless such loans are the subject of a restructuring agreement due to financial difficulties of the borrower.

The general component covers non-impaired loans and is based on quantitative and qualitative factors. The loan portfolio is stratified into homogeneous groups of loans that possess similar loss characteristics and an appropriate loss ratio adjusted for qualitative factors is applied to the homogeneous pools of loans to estimate the incurred losses in the loan portfolio.

Included in the Company’s loan portfolio are certain loans accounted for in accordance with ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. These loans were written down at acquisition to an amount estimated to be collectible. As a result, certain 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 current credit quality to prior periods. The ratios particularly affected by accounting under ASC 310-30 include the allowance for loan losses as a percentage of loans, nonaccrual loans, and nonperforming assets, and nonaccrual loans and nonperforming loans as a percentage of total loans.

The following tables present 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 March 31, 2015 and June 30, 2014. These tables include purchased credit impaired loans, which are reported according to risk categorization after acquisition based on the Company’s standards for such classification:

	March 31, 2015
(dollars in thousands)	Residential	Construction	Commercial
	Real Estate	Real Estate	Real Estate	Consumer	Commercial
Pass	$374,607	$45,958	$392,438	$45,564	$179,042
Watch	3,232	-	6,894	76	126
Special Mention	-	-	-	-	-
Substandard	3,484	131	6,872	244	2,508
Doubtful	-	-	-	-	-
Total	$381,323	$46,089	$406,204	$45,884	$181,676

	June 30, 2014
(dollars in thousands)	Residential	Construction	Commercial
	Real Estate	Real Estate	Real Estate	Consumer	Commercial
Pass	$300,926	$21,477	$303,853	$35,046	$140,138
Watch	301	-	1,014	40	362
Special Mention	-	-	-	-	-
Substandard	2,674	-	3,653	137	572
Doubtful	-	-	-	-	-
Total	$303,901	$21,477	$308,520	$35,223	$141,072

At March 31, 2015, purchased credited impaired loans included above comprised $5.2 million of loans rated “Pass”; $6.8 million of loans rated “Watch”; no loans rated “Special Mention”; $7.4 million of loans rated “Substandard”; and no loans rated “Doubtful”. At June 30, 2014,  purchased credit impaired loans accounted for $409,000 of loans rated “Pass”; no loans rated “Watch”; no loans rated “Special Mention”; $2.7 million of loans rated “Substandard”; and no loans rated “Doubtful”.

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 “Special Mention”, “Substandard”, or “Doubtful”. In addition, lending relationships over $250,000 are subject to an independent loan review following origination, and lending relationships in excess of $2.5 million are subject to an independent loan review annually, as are a sample of lending relationships between $1.0 million and $2.5 million, 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. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

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.

The following tables present the Company’s loan portfolio aging analysis (excluding loans in process and deferred loan fees) as of March 31, 2015 and June 30, 2014.

	March 31, 2015
							Total Loans
(dollars in thousands)	30-59 Days	60-89 Days	Greater Than	Total		Total Loans	> 90 Days &
	Past Due	Past Due	90 Days	Past Due	Current	Receivable	Accruing
Real Estate Loans:
Residential	$1,464	$172	$650	$2,286	$379,037	$381,323	$127
Construction	-	-	131	131	45,958	46,089	-
Commercial	1,044	53	40	1,137	405,067	406,204	-
Consumer loans	268	118	11	397	45,487	45,884	10
Commercial loans	584	20	55	659	181,017	181,676	-
Total loans	$3,360	$363	$887	$4,610	$1,056,566	$1,061,176	$137

	June 30, 2014
							Total Loans
(dollars in thousands)	30-59 Days	60-89 Days	Greater Than	Total		Total Loans	> 90 Days &
	Past Due	Past Due	90 Days	Past Due	Current	Receivable	Accruing
Real Estate Loans:
Residential	$1,119	$51	$451	$1,621	$302,280	$303,901	$106
Construction	65	-	-	65	21,412	21,477	-
Commercial	1,025	-	18	1,043	307,477	308,520	18
Consumer loans	204	30	34	268	34,955	35,223	6
Commercial loans	101	431	347	879	140,193	141,072	-
Total loans	$2,514	$512	$850	$3,876	$806,317	$810,193	$130

At March 31, 2015 and June 30, 2014, no purchased credit impaired loans were greater than 90 days past due.

A loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming loans, as well as performing loans modified in troubled debt restructurings where concessions have been 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 tables below present impaired loans (excluding loans in process and deferred loan fees) as of March 31, 2015 and June 30, 2014. These tables include purchased credit impaired loans. Purchased credit impaired loans are those 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 determines it is probable, for a specific loan, that cash flows received will 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, will continue to be reported as impaired loans. In an instance where, subsequent to the acquisition, the Company determines it is probable, for a specific loan, that cash flows received will be less than the amount previously expected, the Company will allocate a specific allowance under the terms of ASC 310-10-35.

	March 31, 2015
(dollars in thousands)	Recorded	Unpaid Principal	Specific
	Balance	Balance	Allowance
Loans without a specific valuation allowance:
Residential real estate	$3,900	$4,449	$-
Construction real estate	2,481	3,212	-
Commercial real estate	13,891	15,635	-
Consumer loans	195	207	-
Commercial loans	1,355	1,456	-
Loans with a specific valuation allowance:
Residential real estate	$-	$-	$-
Construction real estate	-	-	-
Commercial real estate	-	-	-
Consumer loans	59	59	59
Commercial loans	-	-	-
Total:
Residential real estate	$3,900	$4,449	$-
Construction real estate	$2,481	$3,212	$-
Commercial real estate	$13,891	$15,635	$-
Consumer loans	$254	$266	$59
Commercial loans	$1,355	$1,456	$-

	June 30, 2014
(dollars in thousands)	Recorded	Unpaid Principal	Specific
	Balance	Balance	Allowance
Loans without a specific valuation allowance:
Residential real estate	$1,790	$2,068	$-
Construction real estate	-	-	-
Commercial real estate	3,383	3,391	-
Consumer loans	-	-	-
Commercial loans	115	115	-
Loans with a specific valuation allowance:
Residential real estate	$-	$-	$-
Construction real estate	-	-	-
Commercial real estate	-	-	-
Consumer loans	-	-	-
Commercial loans	-	-	-
Total:
Residential real estate	$1,790	$2,068	$-
Construction real estate	$-	$-	$-
Commercial real estate	$3,383	$3,391	$-
Consumer loans	$-	$-	$-
Commercial loans	$115	$115	$-

At March 31, 2015, purchased credit impaired loans included above accounted for $19.4 million of impaired loans without a specific valuation allowance; no loans with a specific valuation allowance; and $19.4 million of total impaired loans. At June 30, 2014, purchased credit impaired loans accounted for $3.2 million of impaired loans without a specific valuation allowance; no loans with a specific valuation allowance; and $3.2 million of total impaired loans.

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

	For the three-month period ended
	March 31, 2015
	Average
(dollars in thousands)	Investment in	Interest Income
	Impaired Loans	Recognized
Residential Real Estate	$3,950	$54
Construction Real Estate	2,502	42
Commercial Real Estate	11,963	184
Consumer Loans	195	3
Commercial Loans	1,101	23
Total Loans	$19,711	$306

	For the three-month period ended
	March 31, 2014
	Average
(dollars in thousands)	Investment in	Interest Income
	Impaired Loans	Recognized
Residential Real Estate	$1,745	$36
Construction Real Estate	-	-
Commercial Real Estate	1,283	21
Consumer Loans	-	-
Commercial Loans	582	-
Total Loans	$3,610	$57

	For the nine-month period ended
	March 31, 2015
	Average
(dollars in thousands)	Investment in	Interest Income
	Impaired Loans	Recognized
Residential Real Estate	$3,451	$191
Construction Real Estate	1,913	141
Commercial Real Estate	9,390	554
Consumer Loans	147	9
Commercial Loans	859	51
Total Loans	$15,760	$946

	For the nine-month period ended
	March 31, 2014
	Average
(dollars in thousands)	Investment in	Interest Income
	Impaired Loans	Recognized
Residential Real Estate	$1,730	$163
Construction Real Estate	-	-
Commercial Real Estate	1,328	110
Consumer Loans	-	-
Commercial Loans	789	1
Total Loans	$3,847	$274

Interest income on impaired loans recognized on a cash basis in the three- and nine-month periods ended March 31, 2015 and 2014, was immaterial.

For the three- and nine-month periods ended March 31, 2015, the amount of interest income recorded for impaired loans that represented a change in the present value of cash flows attributable to the passage of time was approximately $48,000 and $133,000, respectively, as compared to $2,000 and $106,000, respectively, for the three-and nine-month periods ended March 31, 2014.

The following table presents the Company’s nonaccrual loans at March 31, 2015 and June 30, 2014. The table excludes performing troubled debt restructurings (TDRs).

	March 31, 2015	June 30, 2014
(dollars in thousands)
Residential real estate	$2,334	$444
Construction real estate	131	-
Commercial real estate	1,490	673
Consumer loans	143	58
Commercial loans	102	91
Total loans	$4,200	$1,266

The above amounts include purchased credit impaired loans. At March 31, 2015 and June 30, 2014, these loans comprised $2.6 million and $0 of nonaccrual loans, respectively. Purchased credit impaired loans are placed on nonaccrual status in the event the Company cannot reasonably estimate cash flows expected to be collected.

Included in certain loan categories in the impaired loans are TDRs, where economic concessions have been granted to borrowers who have experienced financial difficulties. 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. 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.

When loans and leases are modified into a TDR, the Company evaluates any possible impairment similar to other impaired loans based on the present value of expected future cash flows, discounted at the contractual interest rate of the original loan or lease agreement, and uses the current fair value of the collateral, less selling costs, for collateral dependent loans. If the Company determines that the value of the modified loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs, and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance. In periods subsequent to modification, the Company evaluates all TDRs, including those that have payment defaults, for possible impairment and recognizes impairment through the allowance.

During the three- and nine-month periods ended March 31, 2015 and 2014, certain loans were classified as TDRs. They are shown, segregated by class, in the tables below:

	For the three-month period ended
	March 31, 2015		March 31, 2014
(dollars in thousands)	Number of	Recorded	Number of	Recorded
	modifications	Investment	modifications	Investment
Residential real estate	2	$169	-	$-
Construction real estate	-	-	-	-
Commercial real estate	-	-	1	299
Consumer loans	-	-	-	-
Commercial loans	-	-	5	179
Total	2	$169	6	$478

	For the nine-month period ended
	March 31, 2015		March 31, 2014
(dollars in thousands)	Number of	Recorded	Number of	Recorded
	modifications	Investment	modifications	Investment
Residential real estate	2	$169	1	$37
Construction real estate	-	-	-	-
Commercial real estate	1	41	2	328
Consumer loans	-	-	-	-
Commercial loans	1	250	5	179
Total	4	$460	8	$544

Performing loans classified as TDRs outstanding at March 31, 2015 and June 30, 2014, segregated by class, are shown in the table below. Nonperforming TDRs are shown as nonaccrual loans.

(dollars in thousands)	March 31, 2015		June 30, 2014
	Number of	Recorded	Number of	Recorded
	modifications	Investment	modifications	Investment
Residential real estate	5	$230	6	$1,790
Construction real estate	-	-	-	-
Commercial real estate	12	3,026	13	3,145
Consumer loans	-	-	-	-
Commercial loans	2	364	2	125
Total	19	$3,620	21	$5,060

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Note 3: Securities: Other than Temporary Impairment, Credit Losses Recognized in Earnings (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Other than Temporary Impairment, Credit Losses Recognized in Earnings

	Accumulated Credit Losses
	Nine-Month Period Ended
(dollars in thousands)	March 31,
	2015	2014
Credit losses on debt securities held
Beginning of period	$375	$375
Additions related to OTTI losses not previously recognized	-	-
Reductions due to sales	-	-
Reductions due to change in intent or likelihood of sale	-	-
Additions related to increases in previously-recognized OTTI losses	-	-
Reductions due to increases in expected cash flows	(7)	-
End of period	$368	$375

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Note 13: Acquisitions: Business Acquisition, Pro Forma Information (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Business Acquisition, Pro Forma Information

	Three months ended		Nine months ended
	March 31,		March 31,
	2015	2014	2015	2014
(dollars in thousands except per share data)
Interest income	13,909	13,161	42,551	38,790
Interest expense	2,212	2,204	6,594	6,686
Net interest income	11,697	10,957	35,957	32,104
Provision for loan losses	837	253	2,526	1,048
Noninterest income	2,094	1,854	6,376	5,477
Noninterest expense	8,091	9,107	26,063	24,743
Income before income taxes	4,863	3,451	13,744	11,790
Income taxes	1,497	940	4,264	3,410
Net income	3,366	2,511	9,480	8,380
Dividends on preferred shares	50	50	150	150
Net income available to common stockholders	3,316	2,461	9,330	8,230
Earnings per share
Basic	$0.45	$0.34	$1.25	$1.13
Diluted	$0.44	$0.33	$1.23	$1.10
Basic weighted average shares outstanding	7,413,257	7,315,266	7,442,084	7,283,634
Diluted weighted average shares outstanding	7,603,917	7,538,606	7,630,789	7,489,342

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Note 5: Accounting For Certain Loans Acquired in A Transfer (Details) (Purchased Credit Impaired Loans, USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Purchased Credit Impaired Loans
Allowance for loan loss increase charged to income statement	$ 0		$ 0
Allowance for loan losses reversal	$ 0	$ 0	$ 0	$ 57,489

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Note 5: Accounting For Certain Loans Acquired in A Transfer: Schedule of Loans Acquired in Transfer Accretable Yield (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Loans Acquired in Transfer Accretable Yield

Accretable yield, or income expected to be collected, is as follows:

	Three-month period ended
	March 31, 2015	March 31, 2014
(dollars in thousands)
Balance at beginning of period	$535	$637
Additions	-	-
Accretion	(78)	(32)
Reclassification from nonaccretable difference	159	1
Disposals	-	-
Balance at end of period	$616	$606

	Nine-month period ended
	March 31, 2015	March 31, 2014
(dollars in thousands)
Balance at beginning of period	$380	$799
Additions	(4)	-
Accretion	(223)	(196)
Reclassification from nonaccretable difference	463	3
Disposals	-	-
Balance at end of period	$616	$606

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Note 2: Organization and Summary of Significant Accounting Policies: Available for Sale Securities Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Available for Sale Securities Policy

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, 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 are 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 by the Company to be high risk.

When the Company does not intend to sell a debt security, and it is more likely than not the Company will not have to sell the security before recovery of its cost basis, it recognizes the credit component of an other-than-temporary impairment of a debt security in earnings and the remaining portion in other comprehensive income. As a result, the Company’s balance sheet as of the dates presented reflects the full impairment (that is, the difference between the security’s amortized cost basis and fair value) on debt securities that the Company intends to sell or would more likely than not be required to sell before the expected recovery of the amortized cost basis. For available-for-sale debt securities 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 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.

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Note 12: Fair Value Measurements: Schedule of Quantitative Information About Level 3 Fair Value Measurements (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Jun. 30, 2014
Fair Value Measurements Level 3 Recurring and Nonrecurring	$ 203	$ 133
Available-for-sale Securities
Fair Value Measurements Recurring and Nonrecurring Valuation Technique		Discounted cash flow
Foreclosed and repossessed assets held for sale
Fair Value Measurements Level 3 Recurring and Nonrecurring	$ 4,328	$ 2,977
Fair Value Measurements Recurring and Nonrecurring Valuation Technique	Third party appraisal	Third party appraisal
Fair Value Measurements Recurring and Nonrecurring Unobservable Inputs	Marketability discount	Marketability discount
Fair Value Measurements Recurring and Nonrecurring Range of discounts Applied	0.0% - 76.0%	0.0% - 76.4%
Fair Value Measurements Recurring and Nonrecurring Weighted Average Discount Applied	36.1%	14.9%
Discount Rate | Available-for-sale Securities
Fair Value Measurements Recurring and Nonrecurring Unobservable Inputs		Discount rate
Fair Value Measurements Recurring and Nonrecurring Range of discounts Applied		n/a
Fair Value Measurements Recurring and Nonrecurring Weighted Average Discount Applied		16.0%
Prepayment Rate | Available-for-sale Securities
Fair Value Measurements Recurring and Nonrecurring Unobservable Inputs		Prepayment rate
Fair Value Measurements Recurring and Nonrecurring Range of discounts Applied		n/a
Fair Value Measurements Recurring and Nonrecurring Weighted Average Discount Applied		1% annually
Anticipated recoveries | Available-for-sale Securities
Fair Value Measurements Recurring and Nonrecurring Unobservable Inputs		Anticipated recoveries (% of pool balance)
Fair Value Measurements Recurring and Nonrecurring Range of discounts Applied		n/a
Fair Value Measurements Recurring and Nonrecurring Weighted Average Discount Applied		1.0%
Projected Defaults And Deferrals | Available-for-sale Securities
Fair Value Measurements Recurring and Nonrecurring Unobservable Inputs		Projected defaults and deferrals (% of pool balance)
Fair Value Measurements Recurring and Nonrecurring Range of discounts Applied		n/a
Fair Value Measurements Recurring and Nonrecurring Weighted Average Discount Applied		38.8%
Available for sale securities (pooled trust preferred security)
Fair Value Measurements Recurring and Nonrecurring Valuation Technique	Discounted cash flow
Available for sale securities (pooled trust preferred security) | Discount Rate
Fair Value Measurements Recurring and Nonrecurring Unobservable Inputs	Discount rate
Fair Value Measurements Recurring and Nonrecurring Range of discounts Applied	n/a
Fair Value Measurements Recurring and Nonrecurring Weighted Average Discount Applied	11.2%
Available for sale securities (pooled trust preferred security) | Prepayment Rate
Fair Value Measurements Recurring and Nonrecurring Unobservable Inputs	Prepayment rate
Fair Value Measurements Recurring and Nonrecurring Range of discounts Applied	n/a
Fair Value Measurements Recurring and Nonrecurring Weighted Average Discount Applied	1% annually
Available for sale securities (pooled trust preferred security) | Projected defaults | Discount cash flow
Fair Value Measurements Recurring and Nonrecurring Unobservable Inputs	Projected defaults and deferrals (% of pool balance)
Fair Value Measurements Recurring and Nonrecurring Range of discounts Applied	n/a
Fair Value Measurements Recurring and Nonrecurring Weighted Average Discount Applied	33.3%
Available for sale securities (pooled trust preferred security) | Anticipated recoveries | Discount cash flow
Fair Value Measurements Recurring and Nonrecurring Unobservable Inputs	Anticipated recoveries (% of pool balance)
Fair Value Measurements Recurring and Nonrecurring Range of discounts Applied	n/a
Fair Value Measurements Recurring and Nonrecurring Weighted Average Discount Applied	0.8%

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Note 8: Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables)

9 Months Ended

Mar. 31, 2015

Tables/Schedules

Schedule of Effective Income Tax Rate Reconciliation

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

(dollars in thousands)	For the three-month period ended		For the nine-month period ended
	March 31, 2015	March 31, 2014	March 31, 2015	March 31, 2014
Tax at statutory rate	$1,654	$1,028	$4,910	$3,430
Increase (reduction) in taxes resulting from:
Nontaxable municipal income	(133)	(133)	(398)	(395)
State tax, net of Federal benefit	133	59	380	212
Cash surrender value of Bank-owned life insurance	(47)	(43)	(145)	(131)
Tax credit benefits	(91)	(82)	(272)	(244)
Other, net	(18)	(49)	(136)	(110)
Actual provision	$1,497	$781	$4,338	$2,762

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Note 2: Organization and Summary of Significant Accounting Policies: Comprehensive Income, Policy (Policies)

9 Months Ended

Mar. 31, 2015

Policies

Comprehensive Income, Policy

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.

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Note 14: Subsequent Events

9 Months Ended

Mar. 31, 2015

Notes

Note 14: Subsequent Events

Note 14: Subsequent Events

On May 8, 2015, Treasury notified the Company that it had accepted the Company’s offer to repurchase for $2.7 million the warrant held by Treasury for the purchase of 231,891 shares of the Company’s common stock at an exercise price of $6.18 per share. As indicated in Note 11, the warrant was issued by the Company to Treasury on December 5, 2008, as part of the Company’s participation in the TARP Capital Purchase Program.  Settlement for the repurchase of the warrant is expected to occur on or about May 13, 2015.

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Note 4: Loans and Allowance For Loan Losses: Purchased Credit Impaired Loans Included in Nonaccrual Policy: Purchased Credit Impaired Loans Included in Nonaccrual (Details) (Included in Nonaccrual Loans, USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
Included in Nonaccrual Loans
Purchased Credit Impaired Loans	$ 2,600	$ 0