Southern Michigan Bancorp, Inc. Announces Fourth Quarter And Full Year 2015 Earnings

Feb 15, 2016, 08:00 ET from Southern Michigan Bancorp, Inc.

COLDWATER, Mich., Feb. 15, 2016 /PRNewswire/ -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) reported record net income of $5,806,000 for 2015 compared to $4,792,000 for 2014, an increase of $1,014,000, or 21.2%.  Earnings per share were $2.42 for 2015 compared to $1.99 in 2014.  Fourth quarter 2015 net income was $1,194,000, or $0.50 per share, compared to $1,252,000, or $0.51 per share in the fourth quarter of 2014.

"We are pleased to deliver the fourth consecutive year of record earnings," said John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc. "Positive contributions to income came from balance sheet and loan growth, and improvement in credit quality metrics including net charge-offs and past due loans."

Total consolidated assets at December 31, 2015 were $582.8 million compared to $543.3 million at December 31, 2014.   Total loans reached a record high of $422.0 million as of December 31, 2015, an increase of $11.9 million or 2.9%, as compared to $410.1 million at year end 2014.

Southern provided $250,000 for loan losses in 2015, with an allowance for loan losses at December 31, 2015 of $5,273,000, or 1.25% of loans.  This compared to a provision for loan losses of $400,000 for 2014, with an allowance for loan losses at December 31, 2014 of $5,177,000, or 1.26% of loans.   The decrease in the provision for loan losses resulted from a reduction in net charge-offs offset by loan growth in the commercial loan portfolio.  Net charge-offs for 2015 totaled $154,000, or .04% of loans, down from $461,000, or .11% of loans in 2014.

The annualized return on average assets for 2015 was 1.02% compared to 0.87% for 2014.  The annualized return on average equity was 8.82% for 2015 compared to 7.79% for 2014.

Chairman Castle continued "After months of planning and preparation, our new Portage Branch office opened February 1, 2016.  Growth of small and medium-sized business relationships remains favorable, and our pipeline of approved commercial loans from across all the markets that we serve, suggests that we will continue to experience loan growth in 2016."

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, Kalamazoo and St. Joseph Counties, and a loan production office in Steuben 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 "continue", "look ahead", "long term", "strategic", "objectives", "trends", "planned" 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 meet the challenges presented by economic and regulatory conditions, realize our long term strategic objectives, 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 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)

December 31,



2015


2014


ASSETS







Cash

$

3,642


$

3,696


Due from banks


9,845



11,678


     Cash and cash equivalents


13,487



15,374


Federal funds sold


6,941



247


Securities available for sale


97,150



72,880


Loans held for sale


328



483


Loans, net of allowance for loan losses of $5,273 - 2015 ($5,177 - 2014)


416,716



404,935


Premises and equipment, net


12,685



11,898


Accrued interest receivable


2,517



2,378


Net cash surrender value of life insurance


11,939



11,299


Goodwill


13,422



13,422


Other intangible assets, net


489



761


Other assets


7,097



9,668


     Total Assets

$

582,771


$

543,345









LIABILITIES AND SHAREHOLDERS' EQUITY







Liabilities







     Deposits







          Non-interest bearing

$

101,186


$

90,191


          Interest bearing


376,299



354,079


               Total deposits


477,485



444,270


     Securities sold under agreements to repurchase and overnight
        borrowings


15,943



14,644


     Accrued expenses and other liabilities


6,419



6,116


     Other borrowings


10,000



10,000


     Subordinated debentures


5,155



5,155


          Total Liabilities


515,002



480,185
















Shareholders' equity







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


-



-


     Common stock, $2.50 par value:







          Authorized – 4,000,000 shares







     Issued and outstanding – 2,406,508 shares in 2015







          (2,404,469 shares in 2014)


6,011



6,005


     Additional paid-in capital


19,572



19,622


     Retained earnings


42,029



37,741


     Accumulated other comprehensive gain/(loss), net


414



(208)


     Unearned Employee Stock Ownership Plan shares


(257)



-


          Total Shareholders' Equity


67,769



63,160


     Total Liabilities and Shareholders' Equity

$

582,771


$

543,345


 

 

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






(In thousands, except per share amounts)

Three Months Ended
December 31,


Year Ended
December 31,



2015


2014


2015


2014


Interest income:













     Loans, including fees

$

4,952


$

4,769


$

19,511


$

18,635


     Securities:













          Taxable


204



189



742



836


          Tax-exempt


245



195



877



794


     Other


29



7



65



55


Total interest income


5,430



5,160



21,195



20,320















Interest expense:













     Deposits


297



285



1,218



1,313


     Other


125



81



409



300


Total interest expense


422



366



1,627



1,613


Net interest income


5,008



4,794



19,568



18,707


Provision for loan losses


50



75



250



400


Net interest income after provision for loan losses


4,958



4,719



19,318



18,307















Non-interest income:













     Service charges on deposit accounts


427



467



1,770



1,989


     Trust fees


283



315



1,258



1,181


     Net securities gains


2



9



26



90


     Net gains on loan sales


316



211



1,157



839


     Earnings on life insurance assets


86



83



859



320


     ATM and debit card fee income


336



324



1,339



1,278


     Other


219



252



904



909


Total non-interest income


1,669



1,661



7,313



6,606















Non-interest expense:













     Salaries and employee benefits


2,827



2,823



10,907



10,230


     Occupancy, net


265



267



1,086



1,249


     Equipment


183



195



725



674


     Printing, postage and supplies


87



96



417



442


     Telecommunication


65



65



250



292


     Professional and outside services


261



250



1,148



1,175


     Software maintenance


239



209



865



821


     Amortization of other intangibles


68



71



272



284


     Automated teller machine expenses


146



137



538



503


     Advertising and marketing


83



96



324



317


     FDIC deposit assessments


82



96



329



369


     Other real estate owned expense


113



43



277



323


     Loss on sale of other real estate owned


135



28



295



142


     Other


492



273



1,442



1,489


Total non-interest expense


5,046



4,649



18,875



18,310


INCOME BEFORE INCOME TAXES


1,581



1,731



7,756



6,603


Federal income tax provision


387



479



1,950



1,811


NET INCOME

$

1,194


$

1,252


$

5,806


$

4,792















Basic Earnings Per Common Share

$

0.50


$

0.51


$

2.42


$

1.99


Diluted Earnings Per Common Share

$

0.50


$

0.51


$

2.42


$

1.99


Dividends Declared Per Common Share

$

0.16


$

0.15


$

0.63


$

0.58


 

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SOURCE Southern Michigan Bancorp, Inc.



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