2014

Southern Michigan Bancorp, Inc. Announces First Quarter 2013 Earnings

COLDWATER, Mich., April 22, 2013 /PRNewswire/ -- Southern Michigan Bancorp, Inc. (OTCQB: SOMC) reported net income of $1,055,000, or $0.44 per share, for the quarter ended March 31, 2013. This compared to net income of $1,002,000, or $0.43 per share, for the first quarter of 2012.    

(Logo: http://photos.prnewswire.com/prnh/20070619/CLTU100LOGO)

Total consolidated assets at March 31, 2013 were $537.6 million compared to $528.9 million at December 31, 2012. 

Southern provided $225,000 for loan losses during the first quarter of 2013, resulting in an allowance for loan losses of $5,232,000, or 1.46% of loans at March 31, 2013.  This compared to $225,000 of provision for loan losses expense for the first quarter of 2012.   Net charge-offs totaled $448,000 for the first quarter of 2013, compared to $112,000 during the first quarter of 2012.  Specific reserves on impaired loans decreased $119,000 during the first quarter of 2013.  Total delinquent loans decreased to 1.74% as of March 31, 2013 from 2.24% as of March 31, 2012. 

The annualized return on average assets for the three month period ended March 31, 2013 was 0.79% compared to 0.77% for the first quarter of 2012.  The annualized return on average equity was 7.62% for the first quarter of 2013 compared to 7.63% for the first quarter of 2012.

John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc., stated, "We are pleased with our first quarter results.   Earnings increased 5.3% compared to the first quarter of 2012 results despite the fact that we incurred $223,000 of non-reoccurring expenses relating to our upcoming core processing system conversion.  The conversion is scheduled for the third quarter of 2013, and benefits to the company going forward include limiting the need for expensive hardware investments, reducing risk exposure, and creating a more consistent processing environment and more predictable processing costs." 

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 and St. Joseph Counties, providing a broad range of consumer, business and wealth management services throughout the region.
www.smb-t.com  

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.

Risk factors include, but are not limited to, the risk factors described in "Item 1A - Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2012.  These and other factors are representative of the risk factors that may emerge and could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.

SOUTHERN MICHIGAN BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except share data) 



March 31,
2013


December 31,
2012


ASSETS







     Cash and cash equivalents

$

49,083


$

50,334


     Federal funds sold


787



276


     Securities available for sale


84,687



64,525


     Loans held for sale


2,090



1,776


     Loans, net of allowance for loan losses of  $5,232 - 2013 ($5,455 - 2012)


353,028



364,150


     Premises and equipment, net


12,464



12,419


     Accrued interest receivable


2,236



2,059


     Net cash surrender value of life insurance


10,729



10,644


     Goodwill


13,422



13,422


     Other intangible assets, net


1,267



1,341


     Other assets


7,809



7,914


TOTAL ASSETS

$

537,602


$

528,860









LIABILITIES







     Deposits:







          Non-interest bearing

$

84,615


$

87,013


          Interest bearing


370,078



357,157


     Total deposits


454,693



444,170









     Securities sold under agreements to repurchase and overnight borrowings


15,237



16,134


     Accrued expenses and other liabilities


4,898



5,662


     Other borrowings


39



1,039


     Subordinated debentures


5,155



5,155


     Common stock subject to repurchase obligation in Employee







         Stock Ownership Plan, shares outstanding 126,760 in 2013







          (125,125 shares in 2012)


2,275



2,065


Total liabilities


482,297



474,225









SHAREHOLDERS' EQUITY







     Preferred stock, 100,000 shares authorized; none issued or outstanding


-



-


     Common stock, $2.50 par value:







         Authorized - 4,000,000 shares







         Issued –2,394,443 shares in 2013 (2,375,975 shares in 2012)







          Outstanding (other than ESOP shares) – 2,267,683 shares in 2013
          (2,250,850 shares in 2012)


5,670



5,627


     Additional paid-in capital


17,477



17,700


     Retained earnings


31,812



31,046


     Accumulated other comprehensive income, net


346



297


     Unearned Employee Stock Ownership Plan shares


-



(35)


     Total shareholders' equity


55,305



54,635


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

537,602


$

528,860












SOUTHERN MICHIGAN BANCORP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands, except per share data)


Three Months Ended March 31,



2013


2012









Interest income:







     Loans, including fees

$

4,498


$

4,511


     Securities:







          Taxable


122



156


          Tax-exempt


225



242


     Other


25



26


Total interest income


4,870



4,935









Interest expense:







     Deposits


505



661


     Other


78



133


Total interest expense


583



794


Net interest income


4,287



4,141


Provision for loan losses


225



225


Net interest income after provision for loan losses


4,062



3,916









Non-interest income:







     Service charges on deposit accounts


397



394


     Trust fees


280



298


     Net gains on security calls


-



3


     Net gains on loan sales


523



402


     Earnings on life insurance assets


84



88


     ATM and debit card fee income


279



272


     Other


160



208


Total non-interest income


1,723



1,665


Non-interest expense:







     Salaries and employee benefits


2,535



2,421


     Occupancy, net


292



283


     Equipment


208



192


     Printing, postage and supplies


109



139


     Telecommunication expenses


69



96


     Professional and outside services


310



256


     Software maintenance


272



111


     FDIC assessments


88



100


     Amortization of other intangibles


74



81


     Other


446



603


Total non-interest expense


4,403



4,282


INCOME BEFORE INCOME TAXES


1,382



1,299


Federal income tax provision


327



297


NET INCOME

$

1,055


$

1,002


Basic Earnings Per Common Share

$

0.44


$

0.43


Diluted Earnings Per Common Share

$

0.44


$

0.42


Dividends Declared Per Common Share

$

0.12


$

0.07










 

SOURCE Southern Michigan Bancorp, Inc.



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