Southern Michigan Bancorp, Inc. Announces Third Quarter 2024 Earnings


COLDWATER, Mich., Oct. 23, 2024 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced third quarter net income of $2,586,000, or $0.57 per share, compared to net income of $2,767,000, or $0.61 per share, for the third quarter of 2023. For the first nine months of 2024, Southern earned $7,751,000 or $1.70 per share, compared with $8,468,000 or $1.86 per share, for the same nine-month period one year ago.  

John R. Waldron, President and Chief Executive Officer of Southern Michigan Bancorp, Inc., stated, “For the first time, our bank has surpassed $1.5 billion in total assets, a significant milestone that reflects our ongoing growth and expansion across all markets. While our earnings continue to be impacted by the current interest rate environment, we remain encouraged by the strength of our core deposits and our ability to maintain asset quality. Our focus on disciplined growth strategies has positioned us well, even amid challenges. As we navigate the shifting economic landscape, we are confident in our capacity to sustain momentum and further strengthen our balance sheet.”

As of September 30, 2024, total loans and deposits grew during the first nine months totaling $1.084 billion and $1.266 billion, respectively.

The allowance for credit losses totaled $12,363,000, or 1.14% of loans on September 30, 2024. Net loan charge-offs totaled $20,000 for the first nine months of 2024, compared to net charge-offs of 7,000 for the first nine months of 2023. Non-performing loans as a percentage of total loans were 0.08% on September 30, 2024 compared to 0.09% on December 31, 2023.

The annualized return on average assets for the nine-month periods ended September 30, 2024 and September 30, 2023 was 0.70% and 0.84% respectively. The annualized return on average equity was 10.18% for the first nine months of 2024 compared to 12.42% for the first nine months of 2023. The tax equivalent net interest margin for the nine-month periods ending September 30, 2024 and 2023 was 2.94% and 3.18%, respectively.

Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust. It operates 18 offices within Branch, Calhoun, Hillsdale, Jackson, Kalamazoo and St. Joseph Counties 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)       
 September 30,
2024
 December 31,
2023
 
ASSETS      
Cash and cash equivalents$121,022 $71,620 
Federal funds sold 264  1,468 
Securities available for sale, at fair value 160,771  169,740 
Securities held-to-maturity, at amortized cost 60,129  61,600 
Loans held-for-sale 871  169 
Loans, net of allowance for credit losses of $12,363 – 2024, $11,697 - 2023 1,071,234  1,024,720 
Premises and equipment, net 23,406  23,114 
Net cash surrender value of life insurance 22,970  22,472 
Goodwill 13,422  13,422 
Other intangible assets, net 120  147 
Other assets 36,314  26,323 
TOTAL ASSETS$1,510,523 $1,414,795 
       
LIABILITIES       
Deposits:      
Non-interest bearing$219,072 $226,178 
Interest bearing 1,047,024  931,793 
Total deposits 1,266,096  1,157,971 
       
Securities sold under agreements to repurchase and overnight borrowings 1,688  1,738 
Accrued expenses and other liabilities 17,996  15,703 
Other borrowings 82,900  106,900 
Subordinated debentures 34,705  34,653 
Total liabilities 1,403,385  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 – 4,563,995 shares in 2024,
4,533,637 shares in 2023
 11,406  11,330 
Additional paid-in capital 13,225  13,126 
Retained earnings 95,498  89,808 
Accumulated other comprehensive loss (12,991) (16,434)
Total shareholders’ equity 107,138  97,830 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$1,510,523 $1,414,795 
       


 
Southern Michigan Bancorp, Inc.
condensed consolidated statements of income (unaudited)
(In thousands, except per share data)
 Three Months Ended
September 30,
 Nine Months Ended
September 30,
 
 2024 2023 2024 2023 
Interest income:            
Loans, including fees$16,444 $14,563 $47,748 $39,579 
Federal funds sold and balances with banks 1,313  786  3,630  2,360 
Securities:            
Taxable 1,465  1,567  4,512  4,655 
Tax-exempt 309  315  904  961 
Total interest income 19,531  17,231  56,794  47,555 
             
Interest expense:            
Deposits 7,567  5,777  21,655  14,516 
Other 1,571  1,519  4,701  3,389 
Total interest expense 9,138  7,296  26,356  17,905 
Net interest income 10,393  9,935  30,438  29,650 
Provision for credit losses 425  25  661  950 
Net interest income after provision for credit losses 9,968  9,910  29,777  28,700 
             
Non-interest income:            
Service charges on deposit accounts 439  422  1,270  1,248 
Trust fees 741  629  2,041  1,787 
Net gains on loan sales 181  71  419  186 
Earnings on life insurance assets 169  157  498  456 
ATM and debit card fee income 465  452  1,356  1,339 
Other 177  197  608  644 
Total non-interest income 2,172  1,928  6,192  5,660 
             
Non-interest expense:            
Salaries and employee benefits 5,528  5,356  16,154  14,751 
Occupancy, net 519  429  1,515  1,397 
Equipment 400  404  1,233  1,063 
Professional and outside services 530  443  1,575  1,473 
Software maintenance 626  568  1,817  1,639 
ATM expenses 229  195  629  602 
Printing, postage, and supplies 124  97  413  318 
Telecommunication expenses 75  88  240  268 
Other 972  869  2,958  2,525 
Total non-interest expense 9,003  8,449  26,534  24,036 
INCOME BEFORE INCOME TAXES 3,137  3,389  9,435  10,324 
Federal income tax provision 551  622  1,684  1,856 
NET INCOME$2,586 $2,767 $7,751 $8,468 
             
Basic Earnings Per Common Share$0.57 $0.61 $1.70 $1.86 
Diluted Earnings Per Common Share 0.57  0.61  1.70  1.86 
Dividends Declared Per Common Share 0.15  0.14  0.45  0.42 
             
 

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