Southern Michigan Bancorp, Inc. Announces First Quarter 2024 Earnings


COLDWATER, Mich., April 24, 2024 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced first quarter net income of $2,678,000, or $0.59 per share, compared to net income of $3,005,000, or $0.66 per share, for the first quarter of 2023.

John R. Waldron, President and Chief Executive Officer of Southern Michigan Bancorp, Inc., stated, “Earnings were lower due to net interest margin compression in this higher interest rate environment and our overhead increased as we continued our expansion. Total assets, loans and deposits all reached record highs.”

As of March 31, 2024, total consolidated assets grew to $1.479 billion compared to $1.415 billion on December 31, 2023. Likewise, total loans and deposits also grew during the quarter totaling $1.058 billion and $1.211 billion, respectively, on March 31, 2024.

The allowance for credit losses totaled $11,687,000, or 1.10% of loans on March 31, 2024. Net loan charge-offs totaled $10,000 for the first quarter of 2024, compared to $0 during the first quarter of 2023. Delinquent and non-accrual loans as a percentage of gross loans were 0.11% on March 31, 2024 compared to 0.10% on December 31, 2023.

The annualized return on average assets for the three-month periods ended March 31, 2024 and March 31, 2023 were 0.73% and 0.93% respectively. The annualized return on average equity was 10.80% for the first quarter of 2024 compared to 13.68% for the first quarter of 2023. The tax equivalent net interest margin for the three-month period ending March 31, 2024 was 2.95% compared to 3.31% for the same period of 2023.

Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust. It operates 15 branches within Branch, Calhoun, Hillsdale, Jackson, Kalamazoo and St. Joseph Counties, and a loan production office in Jackson County, providing a broad range of consumer, business and wealth management services throughout the region.

This press release contains forward-looking statements that are based on management’s beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and Southern Michigan Bancorp, Inc. Forward-looking statements are identifiable by words or phrases such as “expected,” “begin,” and other similar words or expressions. All statements with reference to a future time period are forward-looking. Management’s determination of the provision and allowance for credit losses and other accounting estimates, such as the carrying value of goodwill, other real estate owned, mortgage servicing rights and the fair value of investment securities, involves judgments that are inherently forward-looking. The future effect of changes in the financial and credit markets and the national and regional economy on the banking industry, generally, and Southern Michigan Bancorp, Inc., specifically, are also inherently uncertain. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“risk factors”) that are difficult to predict with regard to timing, extend, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed in or implied by such forward-looking statements. Southern Michigan Bancorp, Inc. does not undertake to update forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.

SOUTHERN MICHIGAN BANCORP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except share data)
 March 31,
2024
 December 31,
2023
 
ASSETS      
Cash and cash equivalents$122,869 $71,620 
Federal funds sold 252  1,468 
Securities available for sale, at fair value 163,210  169,740 
Securities held-to-maturity, at amortized cost 60,864  61,600 
Loans held-for-sale 683  169 
Loans, net of allowance for credit losses of $11,687 - 2024 ($11,697 - 2023) 1,046,787  1,024,720 
Premises and equipment, net 22,087  23,114 
Net cash surrender value of life insurance 22,636  22,472 
Goodwill 13,422  13,422 
Other intangible assets, net 138  147 
Other assets 25,908  26,323 
TOTAL ASSETS$1,478,856 $1,414,795 
       
LIABILITIES      
Deposits:      
Non-interest bearing$204,748 $226,178 
Interest bearing 1,005,768  931,793 
Total deposits 1,210,516  1,157,971 
       
Securities sold under agreements to repurchase and overnight borrowings 1,824  1,738 
Accrued expenses and other liabilities 15,044  15,703 
Other borrowings 116,900  106,900 
Subordinated debentures 34,670  34,653 
Total liabilities 1,378,954  1,316,965 
       
SHAREHOLDERS’ EQUITY      
Preferred stock, 100,000 shares authorized; none issued or outstanding -  - 
Common stock, $2.50 par value:      
Authorized - 10,000,000 shares      
Issued and outstanding – 4,521,106 shares in 2024 (4,533,637 shares in 2023) 11,298  11,330 
Additional paid-in capital 13,131  13,126 
Retained earnings 91,794  89,808 
Accumulated other comprehensive loss, net (16,321) (16,434)
Total shareholders’ equity 99,902  97,830 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$1,478,856 $1,414,795 
       


SOUTHERN MICHIGAN BANCORP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands, except per share data)  
 Three Months Ended March 31, 
 2024 2023 
       
Interest income:      
Loans, including fees$15,466 $11,853 
Securities:      
Taxable 1,483  1,527 
Tax-exempt 299  329 
Other 1,259  624 
Total interest income 18,507  14,333 
       
Interest expense:      
Deposits 6,819  3,767 
Other 1,627  660 
Total interest expense 8,446  4,427 
Net interest income 10,061  9,906 
Provision for credit losses -  275 
Net interest income after provision for credit losses 10,061  9,631 
       
Non-interest income:      
Service charges on deposit accounts 424  393 
Trust fees 641  567 
Net gains on loan sales 73  60 
Earnings on life insurance assets 164  146 
ATM and debit card fee income 424  414 
Other 255  221 
Total non-interest income 1,981  1,801 
Non-interest expense:      
Salaries and employee benefits 5,296  4,762 
Occupancy, net 499  487 
Equipment 424  322 
Professional and outside services 586  473 
Software maintenance 592  519 
ATM expenses 189  207 
Printing, postage and supplies 161  101 
Telecommunication expenses 87  91 
Amortization of other intangibles 9  9 
Other 943  758 
Total non-interest expense 8,786  7,729 
INCOME BEFORE INCOME TAXES 3,256  3,703 
Federal income tax provision 578  698 
NET INCOME$2,678 $3,005 
Basic Earnings Per Common Share$0.59 $0.66 
Diluted Earnings Per Common Share$0.59 $0.66 
Dividends Declared Per Common Share$0.15 $0.14 
 

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