COLDWATER, Mich., April 28, 2021 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced first quarter net income of $3,088,000, a 104.1% increase compared to net income of $1,513,000 for the first quarter of 2020. Earnings per share for the first quarter of 2021 increased to $1.35 per share, up $0.69 per share, from $0.66 per share for the first quarter of 2020.
As of March 31, 2021, total consolidated assets were at a record high of $1.076 billion compared to $997.6 million on December 31, 2020. As of March 31, 2021, total loans and deposits also were at record levels totaling $644.4 million and $924.5 million, respectively.
John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc., stated, “We are pleased with the strong results posted in the first quarter. Our continued focus on meeting our customers’ needs has resulted in over 700 additional PPP loans being processed for our customers totaling over $40 million. In addition, the commercial loan pipeline is robust with funding expected to start in the second quarter.” Castle continued, “The successful closing of the $30 million subordinated debt offering this month provides capital to support additional growth in the bank.”
The allowance for loan losses totaled $7,818,000, or 1.21% of loans at March 31, 2021. Net loan loss recoveries totaled $29,000 for the first quarter of 2021, compared to net loan charge-offs of $7,000 during the first quarter of 2020. Loan delinquencies dropped from 0.72% of gross loans on December 31, 2020 to 0.26% of gross loans on March 31, 2021. Likewise, total non-performing assets dropped from .49% of total assets on December 31, 2020 to 0.17% of total assets on March 31, 2021. No provision for loan loss expense was required during the first quarter of 2021. This contrasts with $1.0 million of provision for loan loss expense during the first quarter of 2020.
The annualized return on average assets for the three-month periods ended March 31, 2021 and March 31, 2020 were 1.19% and 0.73% respectively. The annualized return on average equity was 13.29% for the first quarter of 2021 compared to 7.06% for the first quarter of 2020. The tax equivalent net interest margin for the three-month period ending March 31, 2021 was 3.35% compared to 3.49% for the same period of 2020.
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, 2021 | December 31, 2020 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 140,410 | $ | 99,610 | ||||
| Federal funds sold | 249 | 231 | ||||||
| Securities available for sale | 238,712 | 208,380 | ||||||
| Loans held for sale | 2,198 | 1,691 | ||||||
| Loans, net of allowance for loan losses of $7,818 - 2021 ($7,789 - 2020) | 636,611 | 628,081 | ||||||
| Premises and equipment, net | 13,415 | 13,698 | ||||||
| Accrued interest receivable | 4,838 | 4,749 | ||||||
| Net cash surrender value of life insurance | 16,118 | 16,016 | ||||||
| Goodwill | 13,422 | 13,422 | ||||||
| Other intangible assets, net | 246 | 255 | ||||||
| Other assets | 9,458 | 11,441 | ||||||
| TOTAL ASSETS | $ | 1,075,677 | $ | 997,574 | ||||
| LIABILITIES | ||||||||
| Deposits: | ||||||||
| Non-interest bearing | $ | 245,168 | $ | 220,786 | ||||
| Interest bearing | 679,374 | 617,512 | ||||||
| Total deposits | 924,542 | 838,298 | ||||||
| Securities sold under agreements to repurchase and overnight borrowings | 17,059 | 20,083 | ||||||
| Accrued expenses and other liabilities | 12,823 | 14,561 | ||||||
| Other borrowings | 26,250 | 26,500 | ||||||
| Subordinated debentures | 5,155 | 5,155 | ||||||
| Total liabilities | 985,829 | 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 – 2,292,376 shares in 2021 (2,301,269 shares in 2020) | 5,725 | 5,748 | ||||||
| Additional paid-in capital | 14,585 | 15,416 | ||||||
| Retained earnings | 70,275 | 67,741 | ||||||
| Accumulated other comprehensive income/(loss), net | (447 | ) | 4,362 | |||||
| Unearned Employee Stock Ownership Plan shares | (290 | ) | (290 | ) | ||||
| Total shareholders’ equity | 89,848 | 92,977 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 1,075,677 | $ | 997,574 | ||||
SOUTHERN MICHIGAN BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share data)
| Three Months Ended March 31, | |||||||
| 2021 | 2020 | ||||||
| Interest income: | |||||||
| Loans, including fees | $ | 7,805 | $ | 6,927 | |||
| Securities: | |||||||
| Taxable | 734 | 707 | |||||
| Tax-exempt | 231 | 116 | |||||
| Other | 31 | 227 | |||||
| Total interest income | 8,801 | 7,977 | |||||
| Interest expense: | |||||||
| Deposits | 686 | 1,257 | |||||
| Other | 222 | 319 | |||||
| Total interest expense | 908 | 1,576 | |||||
| Net interest income | 7,893 | 6,401 | |||||
| Provision for loan losses | - | 1,000 | |||||
| Net interest income after provision for loan losses | 7,893 | 5,401 | |||||
| Non-interest income: | |||||||
| Service charges on deposit accounts | 293 | 463 | |||||
| Trust fees | 549 | 517 | |||||
| Net gains on loan sales | 744 | 249 | |||||
| Earnings on life insurance assets | 101 | 94 | |||||
| ATM and debit card fee income | 410 | 348 | |||||
| Other | 145 | 150 | |||||
| Total non-interest income | 2,242 | 1,821 | |||||
| Non-interest expense: | |||||||
| Salaries and employee benefits | 3,999 | 3,258 | |||||
| Occupancy, net | 409 | 397 | |||||
| Equipment | 304 | 313 | |||||
| Printing, postage and supplies | 115 | 103 | |||||
| Telecommunication expenses | 100 | 128 | |||||
| Professional and outside services | 337 | 337 | |||||
| Software maintenance | 400 | 380 | |||||
| ATM expenses | 151 | 131 | |||||
| Amortization of other intangibles | 9 | 9 | |||||
| Other | 555 | 391 | |||||
| Total non-interest expense | 6,379 | 5,447 | |||||
| INCOME BEFORE INCOME TAXES | 3,756 | 1,775 | |||||
| Federal income tax provision | 668 | 262 | |||||
| NET INCOME | $ | 3,088 | $ | 1,513 | |||
| Basic Earnings Per Common Share | $ | 1.35 | $ | 0.66 | |||
| Diluted Earnings Per Common Share | $ | 1.35 | $ | 0.66 | |||
| Dividends Declared Per Common Share | $ | 0.24 | $ | 0.23 | |||