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CST: 20/11/2019 00:10:53   

Southern Michigan Bancorp, Inc. Announces First Quarter 2019 Earnings

209 Days ago

COLDWATER, Mich., April 24, 2019 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced first quarter net income increased 6.5% to $1,920,000, compared to net income of $1,802,000, for the first quarter of 2018. Earnings per share for the first quarter of 2019 increased 6.4% to $0.83 per share, compared to $0.78 per share, for the first quarter of 2018.

John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc., stated, “We are pleased to report strong overall results for the first quarter of 2019. Earnings grew 6.5% year over year, and we experienced solid loan and deposit growth which resulted in record high balance sheet footings for loans, deposits and total assets.”  

Total consolidated assets at March 31, 2019 were $785.8 million compared to $738.8 million at December 31, 2018.   

As a result of loan growth, Southern provided $150,000 for loan losses during the first quarter of 2019, raising the allowance for loan losses to $5,264,000, or 0.96% of loans. This compared to no provision for loan losses during the first quarter of 2018. The allowance for loan losses totaled $4,993,000, or 0.93% of loans at March 31, 2018. Net charge-offs totaled $3,000 for the first quarter of 2019, compared to $16,000 during the first quarter of 2018.    

The annualized return on average assets for the three-month period ended March 31, 2019 and March 31, 2018 was 1.01%. The annualized return on average equity was 10.03% for the first quarter of 2019 compared to 10.26% for the first quarter of 2018. The tax equivalent net interest margin for the three-month period ending March 31, 2019 was 3.72% compared to 3.79% for the same period of 2018.

Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust. It operates 14 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 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 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,
2019
  December 31,
2018
 
ASSETS            
 Cash and cash equivalents $ 87,083   $ 54,741  
 Federal funds sold   172     1,065  
 Securities available for sale   98,637     101,439  
 Loans held for sale   1,001     -  
 Loans, net of allowance for loan losses of $5,264 - 2019 ($5,117 - 2018)   543,202     526,857  
 Premises and equipment, net   14,198     14,296  
 Accrued interest receivable   3,515     3,294  
 Net cash surrender value of life insurance   15,782     15,685  
 Goodwill   13,422     13,422  
 Other intangible assets, net   318     327  
 Other assets   8,510     7,705  
TOTAL ASSETS $ 785,840   $ 738,831  
             
LIABILITIES            
 Deposits:            
 Non-interest bearing $ 132,109   $ 129,923  
 Interest bearing   519,914     475,970  
 Total deposits   652,023     605,893  
             
Securities sold under agreements to repurchase and overnight borrowings   13,681     15,342  
Accrued expenses and other liabilities   9,441     8,414  
Other borrowings   28,250     28,500  
Subordinated debentures   5,155     5,155  
Total liabilities   708,550     663,304  
             
SHAREHOLDERS’ EQUITY            
 Preferred stock, 100,000 shares authorized; none issued or outstanding   -     -  
 Common stock, $2.50 par value:            
Authorized - 4,000,000 shares            
Issued and outstanding – 2,321,678 shares in 2019 (2,315,505 shares in 2018)   5,798     5,783  
 Additional paid-in capital   15,135     15,246  
 Retained earnings   57,378     55,972  
 Accumulated other comprehensive loss, net   (467 )   (1,301 )
 Unearned Employee Stock Ownership Plan shares   (554 )   (173 )
 Total shareholders’ equity   77,290     75,527  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 785,840   $ 738,831  


SOUTHERN MICHIGAN BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands, except per share data)

  Three Months Ended March 31,  
  201 9   201 8  
             
Interest income:            
Loans, including fees $ 6,845   $ 6,338  
Securities:            
Taxable   399     327  
Tax-exempt   202     231  
Other   390     87  
Total interest income   7,836     6,983  
             
Interest expense:            
Deposits   1,151     591  
Other   305     311  
Total interest expense   1,456     902  
Net interest income   6,380     6,081  
Provision for loan losses   150     -  
Net interest income after provision for loan losses   6,230     6,081  
             
Non-interest income:            
Service charges on deposit accounts   486     382  
Trust fees   503     484  
Net gains on loan sales   87     131  
Earnings on life insurance assets   97     95  
ATM and debit card fee income   319     339  
Other   188     15  
Total non-interest income   1,680     1,446  
Non-interest expense:            
Salaries and employee benefits   3,397     3,157  
Occupancy, net   389     397  
Equipment   265     272  
Printing, postage and supplies   105     122  
Telecommunication expenses   102     73  
Professional and outside services   316     322  
Software maintenance   403     367  
ATM expenses   107     143  
Amortization of other intangibles   9     6  
Other   558     541  
Total non-interest expense   5,651     5,400  
INCOME BEFORE INCOME TAXES   2,259     2,127  
Federal income tax provision   339     325  
NET INCOME $ 1,920   $ 1,802  
Basic Earnings Per Common Share $ 0.83   $ 0.78  
Diluted Earnings Per Common Share $ 0.83   $ 0.78  
Dividends Declared Per Common Share $ 0.22   $ 0.21  



CONTACT:  John H. Castle, CEO
(517) 279-5500

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