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CST: 20/11/2019 00:48:22   

Southern Michigan Bancorp, Inc. Announces Second Quarter 2019 Earnings

118 Days ago

COLDWATER, Mich., July 24, 2019 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced second quarter 2019 net income of $2,326,000, or $1.01 per share, compared to net income of $2,216,000, or $0.96 per share, for the second quarter of 2018.  Southern earned $4,246,000, or $1.84 per share, for the six-month period ending June 30, 2019 compared to $4,018,000, or $1.74 per share, for the same six-month period a year ago.   

John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc., stated, “We are pleased with our second quarter and year-to-date performance, which resulted in record first and second quarter earnings and solid returns for our shareholders.”

Total consolidated assets at June 30, 2019 were $779.0 million compared to $738.8 million at December 31, 2018.    

The allowance for loan losses was $5,157,000, or 0.95% of loans at June 30, 2019 and $4,987,000, or 0.91% of loans at June 30, 2018.  Net charge offs totaled $107,000 for the second quarter of 2019, compared to $6,000 for the second quarter of 2018.  For the six-month period ending June 30, 2019, net charge offs totaled $110,000, compared to $22,000 for the same period of 2018.  No provision for loan losses was required during the second quarter of 2019.  For the first six months of 2019, $150,000 of loan loss provision was recorded. 

The annualized return on average assets for the six-month periods ending June 30, 2019 and 2018 was 1.10% and 1.12%, respectively.  The annualized return on average equity was 10.94% for the first six months of 2019 compared to 11.36% for the same period of 2018.  The tax equivalent net interest margin for the six-month periods ending June 30, 2019 and 2018 was 3.73% and 3.83%, respectively.

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.
 
Condensed Consolidated Balance Sheets (Unaudited)
 
   
(In thousands, except share data)
 
  June 30,
2019
  December 31,
2018
 
ASSETS            
Cash and cash equivalents $ 72,358   $ 54,741  
Federal funds sold   264     1,065  
Securities available for sale   111,307     101,439  
Loans held for sale   154     -  
Loans, net of allowance for loan losses of $5,157 - 2019 ($5,117 – 2018)   538,041     526,857  
Premises and equipment, net   14,284     14,296  
Accrued interest receivable   3,350     3,294  
Net cash surrender value of life insurance   15,880     15,685  
Goodwill   13,422     13,422  
Other intangible assets, net   309     327  
Other assets   9,601     7,705  
TOTAL ASSETS $ 778,970   $ 738,831  
             
LIABILITIES            
Deposits :            
Non-interest bearing $ 133,275   $ 129,923  
Interest bearing   499,885     475,970  
Total deposits   633,160     605,893  
             
Securities sold under agreements to repurchase and overnight borrowings   11,477     15,342  
Accrued expenses and other liabilities   11,044     8,414  
Other borrowings   38,000     28,500  
Subordinated debentures    5,155     5,155  
Total liabilities   698,836     663,304  
             
SHAREHOLDERS’ EQUITY            
Preferred stock, 100,000 shares authorized; none issued or outstanding   -     -  
Common stock, $2.50 par value:            
Authorized - 5,000,000 shares            
Issued and outstanding – 2,315,043 shares in 2019
     (2,315,505 shares in 2018)
  5,782      
5,783
 
Additional paid-in capital   15,099     15,246  
Retained earnings   59,173     55,972  
Accumulated other comprehensive income/(loss), net   551     (1,301 )
Unearned Employee Stock Ownership Plan shares   (471 )   (173 )
Total shareholders’ equity   80,134     75,527  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 778,970   $ 738,831  


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,
 
  2019   2018   2019   2018  
Interest income:                        
Loans, including fees $ 7,178   $ 6,716   $ 14,023   $ 13,054  
Federal funds sold and balances with banks   373     75     762     162  
Securities:                        
Taxable   448     311     847     638  
Tax-exempt   193     226     396     457  
Total interest income   8,192     7,328     16,028     14,311  
                         
Interest expense:                        
Deposits   1,297     705     2,448     1,296  
Other   316     316     621     627  
Total interest expense   1,613     1,021     3,069     1,923  
Net interest income   6,579     6,307     12,959     12,388  
Provision for loan losses   -     -     150     -  
Net interest income after provision for loan losses   6,579     6,307     12,809     12,388  
                         
Non-interest income:                        
Service charges on deposit accounts   496     385     982     767  
Trust fees   514     473     1,017     957  
Net gains on loan sales   92     180     180     311  
Net gains on investment security sales   161     -     207     -  
Earnings on life insurance assets   98     101     195     196  
ATM and debit card fee income   361     365     680     704  
Other   165     115     307     130  
Total non-interest income   1,887     1,619     3,568     3,065  
                         
Non-interest expense:                        
Salaries and employee benefits   3,433     3,199     6,830     6,356  
Occupancy, net   325     359     714     756  
Equipment   266     286     530     558  
Printing, postage and supplies   99     78     205     200  
Telecommunication expenses   93     73     195     146  
Professional and outside services   374     413     690     735  
Software maintenance   397     368     801     735  
ATM expenses   137     124     244     267  
Other   519     523     1,086     1,070  
Total non-interest expense   5,643     5,423     11,295     10,823  
INCOME BEFORE INCOME TAXES   2,823     2,503     5,082     4,630  
Federal income tax provision   497     287     836     612  
NET INCOME $ 2,326   $ 2,216   $ 4,246   $ 4,018  
                         
Basic Earnings Per Common Share $ 1.01   $ 0.96   $ 1.84   $ 1.74  
Diluted Earnings Per Common Share   1.01     0.96     1.84     1.74  
Dividends Declared Per Common Share   0.23     0.22     0.45     0.43  

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

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