Thugmuffin
2 years ago
$SOMC Southern Michigan Bancorp, Inc. Announces First Quarter 2022 EarningsPress Release | 04/27/2022
COLDWATER, Michigan, April 27, 2022 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced first quarter net income of $2,933,000, or $0.65 per share, compared to net income of $3,088,000, or $0.68 per share, for the first quarter of 2021.
John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc., stated, “We are pleased with our first quarter results. The core loan growth we have experienced over the last year has provided a stable stream of revenue that has offset the significant reductions from nonrecurring PPP loan revenue and mortgage loan sales that have dropped off due to market conditions.”
As of March 31, 2022, total consolidated assets were at a record high $1.225 billion compared to $1.161 billion on December 31, 2021. As of March 31, 2022, total loans and deposits also were at record levels totaling $765.1 million and $1.060 billion, respectively.
The allowance for loan losses totaled $9,307,000, or 1.22% of loans at March 31, 2022. Net loan charge-offs totaled $13,000 for the first quarter of 2022, compared to net loan loss recoveries of $29,000 during the first quarter of 2021. Loan delinquencies at both March 31, 2022 and December 31, 2021 were at 0.20% of gross loans. No provision for loan loss expense was required during the first quarter of 2022 or 2021.
Shareholders’ equity totaled $86.9 million as of March 31, 2022, down from $97.7 million at year-end 2021. Like many banks are experiencing, the change in equity was caused by higher market interest rates that resulted in net unrealized losses on securities in the investment portfolio and was recorded as other comprehensive loss. This change in shareholders’ equity has no impact on regulatory capital requirements.
The annualized return on average assets for the three-month periods ended March 31, 2022 and March 31, 2021 were 0.98% and 1.19% respectively. The annualized return on average equity was 12.23% for the first quarter of 2022 compared to 13.29% for the first quarter of 2021. The tax equivalent net interest margin for the three-month period ending March 31, 2022 was 3.02% compared to 3.35% for the same period of 2021.
Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust. It operates 13 branches within Branch, Calhoun, Hillsdale, 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,” “anticipated,” 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 loan losses and other accounting estimates, such as the carrying value of goodwill, other real estate owned and mortgage servicing rights and the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary and the amount of any impairment), involves judgments that are inherently forward-looking. There can be no assurance that future loan losses will be limited to the amounts estimated. Our ability sell other real estate owned at its carrying value or at all, successfully implement new programs and initiatives, increase efficiencies, maintain our current level of deposits and other sources of funding, respond to declines in collateral values and credit quality, and improve profitability is not entirely within our control and is not assured. The future effect of the COVID-19 pandemic, 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. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share data)
March 31,
2022 December 31,
2021
ASSETS
Cash and cash equivalents $ 135,682 $ 119,389
Federal funds sold 266 271
Securities available for sale 267,693 245,846
Loans held for sale 356 1,146
Loans, net of allowance for loan losses of $9,307 - 2022 ($9,320 - 2021) 755,821 732,088
Premises and equipment, net 13,485 13,115
Accrued interest receivable 4,508 4,193
Net cash surrender value of life insurance 18,788 18,671
Goodwill 13,422 13,422
Other intangible assets, net 210 219
Other assets 14,816 12,794
TOTAL ASSETS $ 1,225,047 $ 1,161,154
LIABILITIES
Deposits:
Non-interest bearing $ 274,737 $ 262,980
Interest bearing 785,122 711,372
Total deposits 1,059,859 974,352
Securities sold under agreements to repurchase and overnight borrowings 11,937 20,609
Accrued expenses and other liabilities 11,778 13,930
Other borrowings 20,000 20,000
Subordinated debentures 34,532 34,514
Total liabilities 1,138,106 1,063,405
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 – 4,538,061 shares in 2022
(4,516,377 shares in 2021) 11,342 11,287
Additional paid-in capital 14,050 14,235
Retained earnings 73,919 71,581
Accumulated other comprehensive income/(loss), net (12,160 ) 856
Unearned Employee Stock Ownership Plan shares (210 ) (210 )
Total shareholders’ equity 86,941 97,749
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,225,047 $ 1,161,154
SOUTHERN MICHIGAN BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share data)
Three Months Ended March 31,
2022 2021
Interest income:
Loans, including fees $ 7,985 $ 7,805
Securities:
Taxable 901 734
Tax-exempt 277 231
Other 50 31
Total interest income 9,213 8,801
Interest expense:
Deposits 486 686
Other 463 222
Total interest expense 949 908
Net interest income 8,264 7,893
Provision for loan losses - -
Net interest income after provision for loan losses 8,264 7,893
Non-interest income:
Service charges on deposit accounts 362 293
Trust fees 577 549
Net gains on loan sales 264 744
Earnings on life insurance assets 117 101
ATM and debit card fee income 416 410
Other 160 145
Total non-interest income 1,896 2,242
Non-interest expense:
Salaries and employee benefits 3,991 3,999
Occupancy, net 439 409
Equipment 283 304
Printing, postage and supplies 112 115
Telecommunication expenses 84 100
Professional and outside services 389 337
Software maintenance 466 400
ATM expenses 180 151
Amortization of other intangibles 9 9
Other 672 555
Total non-interest expense 6,625 6,379
INCOME BEFORE INCOME TAXES 3,535 3,756
Federal income tax provision 602 668
NET INCOME $ 2,933 $ 3,088
Basic Earnings Per Common Share $ 0.65 $ 0.68
Diluted Earnings Per Common Share $ 0.65 $ 0.67
Dividends Declared Per Common Share $ 0.13 $ 0.12
FOR IMMEDIATE RELEASE
CONTACT: John H. Castle, CEO
(517) 279-5500
AskMuncher
2 years ago
$SOMC Southern Michigan Bancorp, Inc. Announces Fourth Quarter and Full Year 2021 Earnings
Press Release | 02/11/2022
COLDWATER, Mich., Feb. 11, 2022 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) reported net income of $11,757,000 for 2021 compared to $7,386,000 for 2020. Diluted earnings per share were $2.58 for 2021 compared to $1.61 for 2020 after adjusting for the 100 percent stock dividend issued in May 2021. Fourth quarter 2021 net income was $2,522,000, or $0.56 per share, compared to $2,024,000, or $0.44 per share for the fourth quarter of 2020.
Total consolidated assets at December 31, 2021 increased 16.4 percent, reaching $1.16 billion compared to $997.6 million at December 31, 2020. Loan totals grew 16.6 percent, from December 31, 2020 levels of $635.9 million to $741.4 million. Deposits also increased to $974.4 million at December 31, 2021, an increase of $136.1 million or 16.2 percent, as compared to year end 2020.
Southern Michigan Bancorp, Inc., Chairman and Chief Executive Officer John H. Castle stated, “Net income was a record for the year, 36.4 percent higher than the previous high of $8,622,000 reported in 2019. Total assets, loans and deposits also continued to grow, expanding to new record highs at year end 2021. Excluding the forgiveness of $46.9 million of PPP loans during the year, loan growth exceeded $150 million. Additionally, the commercial loan pipeline remains strong. With liquidity remaining elevated, continued loan growth will be a key to positive earnings momentum in 2022.”
Southern provided $1.5 million for loan losses in 2021, with an allowance for loan losses at December 31, 2021 of $9,320,000, or 1.26% of loans. This compared to a provision for loan losses of $2.6 million for 2020, with an allowance for loan losses at December 31, 2020 of $7,789,000, or 1.22% of loans. Net loan loss recoveries totaled $31,000 for 2021 compared to $5,000 for 2020.
The return on average assets for 2021 was 1.06% compared to 0.82% for 2020. The return on average equity was 12.32% for 2021 compared to 8.36% for 2020. The tax equivalent net interest margins for 2021 and 2020 were 3.27% and 3.24%, respectively.
Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust. It operates 13 branches within Branch, Calhoun, Hillsdale, 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 loan losses and other accounting estimates, such as the carrying value of goodwill, other real estate owned and mortgage servicing rights and the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary and the amount of any impairment), involves judgments that are inherently forward-looking. There can be no assurance that future loan losses will be limited to the amounts estimated. Our ability to successfully implement new programs and initiatives, increase efficiencies, maintain our current level of deposits and other sources of funding, respond to declines in collateral values and credit quality, and improve profitability is not entirely within our control and is not assured. 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)
December 31,
2021 December 31,
2020
ASSETS
Cash and cash equivalents $ 119,389 $ 99,610
Federal funds sold 271 231
Securities available for sale 245,846 208,380
Loans held for sale 1,146 1,691
Loans, net of allowance for loan losses of $9,320 - 2021 ($7,789 – 2020) 732,088 628,081
Premises and equipment, net 13,115 13,698
Accrued interest receivable 4,193 4,749
Net cash surrender value of life insurance 18,671 16,016
Goodwill 13,422 13,422
Other intangible assets, net 219 255
Other assets 12,794 11,441
TOTAL ASSETS $ 1,161,154 $ 997,574
LIABILITIES
Deposits :
Non-interest bearing $ 262,980 $ 220,786
Interest bearing 711,372 617,512
Total deposits 974,352 838,298
Securities sold under agreements to repurchase and overnight borrowings 20,609 20,083
Accrued expenses and other liabilities 13,930 14,561
Other borrowings 20,000 26,500
Subordinated debentures 34,514 5,155
Total liabilities 1,063,405 904,597
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 – 4,516,377 shares in 2021
(2,301,269 shares in 2020) 11,287 5,748
Additional paid-in capital 14,235 15,416
Retained earnings 71,581 67,741
Accumulated other comprehensive income, net 856 4,362
Unearned Employee Stock Ownership Plan shares (210 ) (290 )
Total shareholders’ equity 97,749 92,977
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,161,154 $ 997,574
Southern Michigan Bancorp, Inc.
condensed consolidated statements of income (unaudited)
(In thousands, except per share data)
Three Months Ended
December 31, Year Ended
December 31,
2021 2020 2021 2020
Interest income:
Loans, including fees $ 8,535 $ 7,202 $ 32,593 $ 28,377
Federal funds sold and balances with banks 41 33 148 314
Securities:
Taxable 843 643 3,330 2,482
Tax-exempt 269 185 1,069 645
Total interest income 9,688 8,063 37,140 31,818
Interest expense:
Deposits 485 800 2,268 4,025
Other 460 246 1,553 1,116
Total interest expense 945 1,046 3,821 5,141
Net interest income 8,743 7,017 33,319 26,677
Provision for loan losses 450 350 1,500 2,600
Net interest income after provision for loan losses 8,293 6,667 31,819 24,077
Non-interest income:
Service charges on deposit accounts 373 334 1,286 1,373
Trust fees 586 513 2,267 2,048
Net gains on loan sales 381 636 2,293 2,389
Earnings on life insurance assets 184 98 695 383
ATM and debit card fee income 463 394 1,823 1,543
Other 173 236 645 642
Total non-interest income 2,160 2,211 9,009 8,378
Non-interest expense:
Salaries and employee benefits 4,612 4,157 16,492 14,580
Occupancy, net 368 352 1,565 1,519
Equipment 313 300 1,174 1,180
Printing, postage and supplies 100 84 390 386
Telecommunication expenses 90 89 356 451
Professional and outside services 596 423 1,814 1,532
Software maintenance 449 400 1,677 1,552
ATM expenses 177 138 670 578
Other 771 497 2,570 1,888
Total non-interest expense 7,476 6,440 26,708 23,666
INCOME BEFORE INCOME TAXES 2,977 2,438 14,120 8,789
Federal income tax provision 455 414 2,363 1,403
NET INCOME $ 2,522 $ 2,024 $ 11,757 $ 7,386
Basic Earnings Per Common Share $ 0.56 $ 0.44 $ 2.59 $ 1,61
Diluted Earnings Per Common Share 0.56 0.44 2.58 1.61
Dividends Declared Per Common Share 0.12 0.12 0.48 0.46
CONTACT: John H. Castle, CEO
(517) 279-5500
AskMuncher
2 years ago
$SOMC Southern Michigan Bancorp, Inc. Announces Third Quarter 2021 Earnings
Press Release | 10/27/2021
COLDWATER, Mich., Oct. 27, 2021 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced third quarter 2021 net income of $3,138,000, or $0.69 per share, compared to net income of $2,018,000, or $0.44 per share, for the third quarter of 2020. Southern earned $9,235,000, or $2.02 per share, for the nine-month period ending September 30, 2021 compared to $5,362,000, or $1.17 per share, for the same nine-month period a year ago.
John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc. stated, “During the third quarter Southern continued to capitalize on market opportunities presented to us. We are pleased to report continued loan and deposit growth during the quarter, with additional growth expected during the fourth quarter. Earnings through the third quarter now exceed our 2019 annual record net income benchmark of $8,622,000.”
Total consolidated assets at September 30, 2021 increased 14.5%, reaching $1.142 billion compared to $997.6 million at December 31, 2020. Loan totals grew 15.3%, from December 31, 2020 levels of $635.9 million to $733.3 million. Deposits also increased totaling $962.6 million at September 30, 2021, an increase of $124.3 million or 14.8%, as compared to year end 2020.
The allowance for loan losses totaled $8,879,000, or 1.21% of loans at September 30, 2021. Net loan recoveries totaled $40,000 for the first nine months of 2021, compared to net loan losses of $10,000 during the first nine months of 2020. Loan delinquencies dropped from 0.72% of gross loans on December 31, 2020 to 0.19% of gross loans on September 30, 2021. Likewise, total non-performing assets dropped from .49% of total assets on December 31, 2020 to 0.14% of total assets on September 30, 2021. As a result of loan growth, Southern provided $650,000 of provision for loan loss expense during the third quarter of 2021, with total provision expense of $1,050,000 through the first nine months of 2021. This contrasts with $2,250,000 of provision for loan loss expense recorded during the first nine months of 2020.
The annualized return on average assets for the nine-month periods ending September 30, 2021 and 2020 was 1.13% and 0.81%, respectively. The annualized return on average equity was 13.02% for the first nine months of 2021 compared to 8.20% for the first nine months of 2020. The tax equivalent net interest margins for the nine-month periods ending September 30, 2021 and 2020 was 3.27% and 3.26%, respectively.
Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust. It operates 13 branches within Branch, Calhoun, Hillsdale, 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 loan losses and other accounting estimates, such as the carrying value of goodwill, other real estate owned and mortgage servicing rights and the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary and the amount of any impairment), involves judgments that are inherently forward-looking. There can be no assurance that future loan losses will be limited to the amounts estimated. Our ability to successfully implement new programs and initiatives, increase efficiencies, maintain our current level of deposits and other sources of funding, respond to declines in collateral values and credit quality, and improve profitability is not entirely within our control and is not assured. 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, December 31,
2021 2020
ASSETS
Cash and cash equivalents $ 101,565 $ 99,610
Federal funds sold 246 231
Securities available for sale 251,726 208,380
Loans held for sale 1,201 1,691
Loans, net of allowance for loan losses of $8,879 - 2021 ($7,789 – 2020) 724,387 628,081
Premises and equipment, net 13,240 13,698
Accrued interest receivable 4,816 4,749
Net cash surrender value of life insurance 18,884 16,016
Goodwill 13,422 13,422
Other intangible assets, net 228 255
Other assets 12,148 11,441
TOTAL ASSETS $ 1,141,863 $ 997,574
LIABILITIES
Deposits :
Non-interest bearing $ 257,493 $ 220,786
Interest bearing 705,131 617,512
Total deposits 962,624 838,298
Securities sold under agreements to repurchase and overnight borrowings 15,413 20,083
Accrued expenses and other liabilities 13,132 14,561
Other borrowings 20,000 26,500
Subordinated debentures 34,497 5,155
Total liabilities 1,045,666 904,597
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 – 4,515,777 shares in 2021
(2,301,269 shares in 2020) 11,285 5,748
Additional paid-in capital 13,996 15,416
Retained earnings 69,600 67,741
Accumulated other comprehensive income, net 1,556 4,362
Unearned Employee Stock Ownership Plan shares (240 ) (290 )
Total shareholders’ equity 96,197 92,977
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,141,863 $ 997,574
Southern Michigan Bancorp, Inc.
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
Interest income:
Loans, including fees $ 8,591 $ 6,988 $ 24,058 $ 21,175
Federal funds sold and balances with banks 37 25 107 281
Securities:
Taxable 892 565 2,487 1,839
Tax-exempt 282 175 800 460
Total interest income 9,802 7,753 27,452 23,755
Interest expense:
Deposits 508 936 1,783 3,225
Other 459 249 1,093 870
Total interest expense 967 1,185 2,876 4,095
Net interest income 8,835 6,568 24,576 19,660
Provision for loan losses 650 500 1,050 2,250
Net interest income after provision for loan losses 8,185 6,068 23,526 17,410
Non-interest income:
Service charges on deposit accounts 345 322 913 1,039
Trust fees 587 514 1,681 1,535
Net gains on loan sales 470 966 1,912 1,753
Earnings on life insurance assets 124 96 511 285
ATM and debit card fee income 470 421 1,360 1,149
Other 174 142 472 406
Total non-interest income 2,170 2,461 6,849 6,167
Non-interest expense:
Salaries and employee benefits 4,047 3,856 11,880 10,423
Occupancy, net 388 395 1,197 1,167
Equipment 274 290 861 880
Printing, postage and supplies 93 90 290 302
Telecommunication expenses 82 112 266 362
Professional and outside services 441 373 1,218 1,109
Software maintenance 434 384 1,228 1,152
ATM expenses 173 152 493 440
Other 627 509 1,799 1,391
Total non-interest expense 6,559 6,161 19,232 17,226
INCOME BEFORE INCOME TAXES 3,796 2,368 11,143 6,351
Federal income tax provision 658 350 1,908 989
NET INCOME $ 3,138 $ 2,018 $ 9,235 $ 5,362
Basic Earnings Per Common Share $ 0.69 $ 0.44 $ 2.02 $ 1.17
Diluted Earnings Per Common Share 0.69 0.44 2.02 1.17
Dividends Declared Per Common Share 0.12 0.12 0.36 0.35
CONTACT: John H. Castle, CEO
(517) 279-5500
AskMuncher
3 years ago
$SOMC Southern Michigan Bancorp, Inc. Announces Second Quarter 2021 Earnings
Press Release | 07/28/2021
COLDWATER, Mich., July 28, 2021 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced second quarter 2021 net income of $3,009,000, or $0.66 per share, compared to net income of $1,831,000, or $0.40 per share, for the second quarter of 2020. Southern earned $6,097,000, or $1.33 per share, for the six-month period ending June 30, 2021 compared to $3,344,000, or $0.73 per share, for the same six-month period a year ago.
Total consolidated assets at June 30, 2021 increased 12.7%, reaching $1.124 billion compared to $997.6 million at December 31, 2020. Loan totals grew 10.3%, from December 31, 2020 levels of $635.9 million to $701.1 million. Deposits also increased totaling $944.8 million at June 30, 2021, an increase of $106.5 million or 12.7%, as compared to year end 2020.
John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc. stated, “We are pleased to report record earnings for both the second quarter and six-month period of 2021 as well as solid loan and deposit growth resulting in record high balance sheet footings for loans, deposits and total assets. Additional loan growth is expected during the third and fourth quarters of 2021 as approved loans in the commercial pipeline fund.”
The allowance for loan losses totaled $8,229,000, or 1.17% of loans at June 30, 2021. Net loan recoveries totaled $40,000 for the first six months of 2021, compared to net loan recoveries of $2,000 during the first six months of 2020. Loan delinquencies dropped from 0.72% of gross loans on December 31, 2020 to 0.21% of gross loans on June 30, 2021. Likewise, total non-performing assets dropped from .49% of total assets on December 31, 2020 to 0.15% of total assets on June 30, 2021. Southern provided $400,000 of provision for loan loss expense during the second quarter of 2021 to support loan growth. This contrasts with $1,750,000 of provision for loan loss expense during the first six months of 2020.
The annualized return on average assets for the six-month periods ending June 30, 2021 and 2020 was 1.13% and 0.78%, respectively. The annualized return on average equity was 13.12% for the first six months of 2021 compared to 7.80% for the first six months of 2020. The tax equivalent net interest margins for the six-month periods ending June 30, 2021 and 2020 was 3.16% and 3.31%, respectively.
Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust. It operates 13 branches within Branch, Calhoun, Hillsdale, 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 loan losses and other accounting estimates, such as the carrying value of goodwill, other real estate owned and mortgage servicing rights and the fair value of investment securities (including whether any impairment on any investment security is temporary or other-than-temporary and the amount of any impairment), involves judgments that are inherently forward-looking. There can be no assurance that future loan losses will be limited to the amounts estimated. Our ability to successfully implement new programs and initiatives, increase efficiencies, maintain our current level of deposits and other sources of funding, respond to declines in collateral values and credit quality, and improve profitability is not entirely within our control and is not assured. 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)
June 30,
2021 December 31,
2020
ASSETS
Cash and cash equivalents $ 106,781 $ 99,610
Federal funds sold 245 231
Securities available for sale 258,848 208,380
Loans held for sale 1,287 1,691
Loans, net of allowance for loan losses of $8,229 - 2021 ($7,789 – 2020) 692,932 628,081
Premises and equipment, net 13,280 13,698
Accrued interest receivable 4,390 4,749
Net cash surrender value of life insurance 19,236 16,016
Goodwill 13,422 13,422
Other intangible assets, net 237 255
Other assets 13,218 11,441
TOTAL ASSETS $ 1,123,876 $ 997,574
LIABILITIES
Deposits:
Non-interest bearing $ 256,870 $ 220,786
Interest bearing 687,935 617,512
Total deposits 944,805 838,298
Securities sold under agreements to repurchase and overnight borrowings 15,977 20,083
Accrued expenses and other liabilities 13,087 14,561
Other borrowings 20,000 26,500
Subordinated debentures 34,480 5,155
Total liabilities 1,028,349 904,597
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 – 4,571,691 shares in 2021 (2,301,269 shares in 2020) 11,425 5,748
Additional paid-in capital 14,628 15,416
Retained earnings 67,003 67,741
Accumulated other comprehensive income, net 2,711 4,362
Unearned Employee Stock Ownership Plan shares (240 ) (290 )
Total shareholders’ equity 95,527 92,977
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,123,876 $ 997,574
Southern Michigan Bancorp, Inc.
condensed consolidated statements of income (unaudited)
(In thousands, except per share data)
Three Months Ended
June 30, Six Months Ended
June 30,
2021 2020 2021 2020
Interest income:
Loans, including fees $ 7,662 $ 7,260 $ 15,467 $ 14,187
Federal funds sold and balances with banks 39 29 70 256
Securities:
Taxable 861 567 1,595 1,274
Tax-exempt 287 169 518 285
Total interest income 8,849 8,025 17,650 16,002
Interest expense:
Deposits 589 1,032 1,275 2,289
Other 412 302 634 621
Total interest expense 1,001 1,334 1,909 2,910
Net interest income 7,848 6,691 15,741 13,092
Provision for loan losses 400 750 400 1,750
Net interest income after provision for loan losses 7,448 5,941 15,341 11,342
Non-interest income:
Service charges on deposit accounts 276 255 569 718
Trust fees 545 504 1,094 1,021
Net gains on loan sales 698 538 1,442 787
Earnings on life insurance assets 286 95 387 189
ATM and debit card fee income 479 380 889 728
Other 153 113 298 263
Total non-interest income 2,437 1,885 4,679 3,706
Non-interest expense:
Salaries and employee benefits 3,834 3,309 7,833 6,567
Occupancy, net 400 375 809 772
Equipment 283 277 587 590
Printing, postage and supplies 82 109 197 212
Telecommunication expenses 84 122 184 250
Professional and outside services 440 400 777 737
Software maintenance 394 388 794 768
ATM expenses 170 157 321 288
Other 607 482 1,171 882
Total non-interest expense 6,294 5,619 12,673 11,066
INCOME BEFORE INCOME TAXES 3.591 2,207 7,347 3,982
Federal income tax provision 582 376 1,250 638
NET INCOME $ 3,009 $ 1,831 $ 6,097 $ 3,344
Basic Earnings Per Common Share $ 0.66 $ 0.40 $ 1.33 $ 0.73
Diluted Earnings Per Common Share 0.66 0.40 1.33 0.73
Dividends Declared Per Common Share 0.12 0.12 0.24 0.23
CONTACT: John H. Castle, CEO
(517) 279-5500
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