Southern Michigan Bancorp, Inc. Announces Fourth Quarter and Full Year 2023 Earnings
COLDWATER, Mich., Feb. 12, 2024 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced fourth quarter 2023 net income of $2,437,000, or $0.54 per share, compared to net income of $3,584,000, or $0.79 per share, for the fourth quarter of 2022. Southern earned $10,905,000, or $2.40 per share, for the year ended December 31, 2023 compared to $13,491,000, or $2.97 per share, for the same period a year ago. Consolidated assets at December 31, 2023 totaled $1.41 billion compared to $1.28 billion at December 31, 2022. Total loans grew 16.9%, from December 31, 2022 levels of $886.6 million to $1.04 billion. Deposits totaled $1.16 billion at December 31, 2023, an increase of $66.9 million or 6.1%, as compared to December 31, 2022.
John Waldron, President and CEO of Southern Michigan Bancorp, Inc. stated, “We had a solid year despite the challenging rate environment and higher deposit costs. Overhead increased in part due to higher FTE counts associated with our recent expansion.”
The allowance for credit losses totaled $11,697,000, or 1.13% of loans at December 31, 2023 compared to $9,588,000, or 1.08% of loans at December 31, 2022. Net loan losses totaled $15,000 for 2023, compared to $7,000 for 2022. Asset quality remains strong with loan delinquencies totaling just 0.10% of gross loans at December 31, 2023. During 2023, the Bank recognized a $950,000 provision for credit losses, primarily due to loan growth. This compares with a $275,000 provision for credit losses recognized for 2022.
The annualized return on average assets for the year ended December 31, 2023 and 2022 was 0.80% and 1.10%, respectively. The annualized return on average equity was 11.94% for the year ended December 31, 2023 compared to 15.68% for the year ended December 31, 2022. The tax equivalent net interest margin for the years ended December 31, 2023 and 2022 was 3.16% and 3.36%, respectively.
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,” “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 to- 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, extent, 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,
2023
December 31,
2022
*ASSETS*
Cash and cash equivalents $ 71,620 $ 77,255
Federal funds sold 1,468 253
Securities available for sale, at fair value 169,740 178,154
Securities held-to-maturity, at amortized cost 61,600 69,661
Loans held for sale 169 -
Loans, net of allowance for credit losses of $11,697 - 2023 ($9,588 – 2022) 1,024,720 877,038
Premises and equipment, net 23,114 16,545
Net cash surrender value of life insurance 22,472 18,124
Goodwill 13,422 13,422
Other intangible assets, net 147 183
Other assets 26,323 25,888
*TOTAL ASSETS* $ 1,414,795 $ 1,276,523
*LIABILITIES *
Deposits :
Non-interest bearing $ 226,178 $ 268,704
Interest bearing 931,793 822,347
*Total deposits* 1,157,971 1,091,051
Securities sold under agreements to repurchase and overnight borrowings 1,738 11,179
Accrued expenses and other liabilities 15,703 13,545
Other borrowings 106,900 40,000
Subordinated debentures 34,653 34,584
*Total liabilities* 1,316,965 1,190,359
*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 – 4,533,637 shares in 2023 (4,519,179 shares in 2022) 11,330 11,294
Additional paid-in capital 13,126 14,066
Retained earnings 89,808 82,705
Accumulated other comprehensive loss, net (16,434 ) (21,901 )
*Total shareholders’ equity* 97,830 86,164
*TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY* $ 1,414,795 $ 1,276,523
**
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, 2023 2022 2023 2022
*Interest income:*
Loans, including fees $ 15,308 $ 10,802 $ 54,887 $ 36,583
Federal funds sold and deposits with other banks 766 490 3,125 1,249
Securities:
Taxable 1,635 1,527 6,291 4,948
Tax-exempt 304 401 1,265 1,354
*Total interest income* 18,013 13,220 65,568 44,134
*Interest expense:*
Deposits 6,078 2,045 20,593 4,118
Other 1,606 555 4,995 1,914
*Total interest expense* 7,684 2,600 25,588 6,032
Net interest income 10,329 10,620 39,980 38,102
*Provision for credit losses* - 275 950 275
Net interest income after provision for credit losses 10,329 10,345 39,030 37,827
*Non-interest income:*
Service charges on deposit accounts 422 401 1,670 1,516
Trust fees 632 589 2,419 2,264
Net losses on securities - (666 ) - (666 )
Net gains on loan sales 119 41 305 606
Earnings on life insurance assets 161 125 617 472
Gain from life insurance - 747 - 747
ATM and debit card fee income 447 430 1,786 1,749
Other 296 138 941 692
*Total non-interest income* 2,077 1,805 7,738 7,380
*Non-interest expense:*
Salaries and employee benefits 5,836 5,162 20,586 18,134
Occupancy, net 416 431 1,813 1,675
Equipment 385 340 1,449 1,294
Printing, postage and supplies 118 106 437 413
Telecommunication expenses 109 63 376 303
Professional and outside services 770 450 2,243 1,742
Software maintenance 608 491 2,247 1,911
ATM expenses 201 208 803 755
Other 940 793 3,466 2,907
*Total non-interest expense* 9,383 8,044 33,420 29,134
*INCOME BEFORE INCOME TAXES* 3,023 4,106 13,348 16,073
*Federal income tax provision* 586 522 2,443 2,582
*NET INCOME* $ 2,437 $ 3,584 $ 10,905 $ 13,491
*Basic Earnings Per Common Share* $ 0.54 $ 0.79 $ 2.40 $ 2.98
*Diluted Earnings Per Common Share* 0.54 0.79 2.40 2.97
*Dividends Declared Per Common Share* 0.14 0.13 0.56 0.52
CONTACT: CONTACT:
John H. Castle, Chairman
(517) 279-5500