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

CONTACT: CONTACT: John H. Castle, Chairman
[phone]