Southern Michigan Bancorp, Inc. Announces Second Quarter 2022 Earnings
July 27, 2022 at 08:26 am
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COLDWATER, Mich., July 27, 2022 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced second quarter 2022 net income of $3,361,000, or $0.74 per share, compared to net income of $3,009,000, or $0.66 per share, for the second quarter of 2021. Southern earned $6,294,000, or $1.39 per share, for the six-month period ending June 30, 2022 compared to $6,097,000, or $1.33 per share, for the same six-month period a year ago.
Total consolidated assets at June 30, 2022 totaled $1.183 billion compared to $1.161 billion at December 31, 2021. Loan totals grew 6.5%, from December 31, 2021 levels of $741.4 million to $789.6 million. Deposits totaled $1,030.9 million at June 30, 2022, an increase of $56.5 million or 5.8%, as compared to year end 2021.
John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc. stated, “We are pleased to report record earnings for both the second quarter and six-month period of 2022. Positive contributions to income came from growth in the loan portfolio, continued strong credit quality, as well as increased interest rates. Additional loan growth is expected during the second half of 2022 as we look to expand into the Jackson market and approved loans in the commercial pipeline fund.”
The allowance for loan losses totaled $9,317,000, or 1.18% of loans at June 30, 2022. Net loan losses totaled $3,000 for the first six months of 2022, compared to net loan recoveries of $40,000 during the first six months of 2021. Asset quality remains strong with loan delinquencies totaling just 0.17% of gross loans on June 30, 2022. No provision for loan loss expense was required during the first six months of 2022. This contrasts with $400,000 of provision for loan loss expense during the first six months of 2021.
The annualized return on average assets for the six-month periods ending June 30, 2022 and 2021 was 1.04% and 1.13%, respectively. The annualized return on average equity was 14.03% for the first six months of 2022 compared to 13.12% for the first six months of 2021. The tax equivalent net interest margins for the six-month periods ending June 30, 2022 and 2021 was 3.13% and 3.16%, 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,” “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 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, 2022
December 31, 2021
ASSETS
Cash and cash equivalents
$
54,822
$
119,389
Federal funds sold
255
271
Investment securities
279,937
245,846
Loans held for sale
-
1,146
Loans, net of allowance for loan losses of $9,317 - 2022 ($9,320 – 2021)
780,270
732,088
Premises and equipment, net
14,202
13,115
Accrued interest receivable
4,214
4,193
Net cash surrender value of life insurance
18,730
18,671
Goodwill
13,422
13,422
Other intangible assets, net
201
219
Other assets
17,124
12,794
TOTAL ASSETS
$
1,183,177
$
1,161,154
LIABILITIES
Deposits :
Non-interest bearing
$
266,647
$
262,980
Interest bearing
764,247
711,372
Total deposits
1,030,894
974,352
Securities sold under agreements to repurchase and overnight borrowings
10,961
20,609
Accrued expenses and other liabilities
12,781
13,930
Other borrowings
10,000
20,000
Subordinated debentures
34,549
34,514
Total liabilities
1,099,185
1,063,405
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 – 4,545,461 shares in 2022 (4,516,377 shares in 2021)
11,359
11,287
Additional paid-in capital
14,211
14,235
Retained earnings
76,690
71,581
Accumulated other comprehensive income/(loss), net
(18,087
)
856
Unearned Employee Stock Ownership Plan shares
(181
)
(210
)
Total shareholders’ equity
83,992
97,749
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
1,183,177
$
1,161,154
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,
2022
2021
2022
2021
Interest income:
Loans, including fees
$
8,427
$
7,662
$
16,412
$
15,467
Federal funds sold and balances with banks
236
39
286
70
Securities:
Taxable
1,123
861
2,025
1,595
Tax-exempt
378
287
654
518
Total interest income
10,164
8,849
19,377
17,650
Interest expense:
Deposits
600
589
1,086
1,275
Other
444
412
907
634
Total interest expense
1,044
1,001
1,993
1,909
Net interest income
9,120
7,848
17,384
15,741
Provision for loan losses
-
400
-
400
Net interest income after provision for loan losses
Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust (The Bank). The Bank operates about 18 branches within Branch, Calhoun, Hillsdale, Jackson, Kalamazoo, and St. Joseph counties, providing a range of consumer, business, and wealth management services throughout the region. Its business, which it conducts primarily through the Bank, is concentrated in a single industry segment, commercial banking. The Bank offers a variety of deposit, payment, credit, and other financial services to all types of customers. The Bankâs commercial lending covers categories, such as business, industrial, agricultural, construction, inventory, and real estate. It offers trust and investment services, which include investment management, trustee services, and others. It also owns Southern Michigan Bancorp Capital Trust I, SMB Risk Management, Inc., and 27 Marshall Street, LLC. The Bank wholly owns SMB Financial Services, Inc.