Southern Michigan Bancorp, Inc. Announces First Quarter 2012 Earnings

COLDWATER, Mich., April 27, 2012 /PRNewswire/ -- Southern Michigan Bancorp, Inc. (OTCBB: SOMC) reported net income of $1,002,000, or $0.43 per share, for the quarter ended March 31, 2012, compared to net income of $748,000, or $0.32 per share, for the first quarter of 2011.    

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Total consolidated assets at March 31, 2012 were $520.4 million compared to $509.2 million at December 31, 2011. 

Southern provided $225,000 for loan losses during the first quarter of 2012, resulting in an allowance for loan losses of $5,525,000, or 1.66% of loans at March 31, 2012.  This compared to $125,000 of provision for loan losses expense for the first quarter of 2011.   Net charge-offs totaled $112,000 for the first quarter of 2012, compared to $243,000 during the first quarter of 2011.  Specific reserves on impaired loans increased $159,000 during the first quarter of 2012 resulting in a higher provision for loan losses.  Total delinquent loans decreased to 2.24% as of March 31, 2012 from 2.93% as of March 31, 2011.  Other real estate owned levels for the quarter improved from $1,530,000 as of December 31, 2011 to $870,000 as of March 31, 2012.

First quarter 2012 net interest income increased $369,000, or 9.8%, to $4.1 million, as compared to $3.7 million for the first quarter of 2011.

The annualized return on average assets for the three month period ended March 31, 2012 was 0.77% compared to 0.60% for the first quarter of 2011.  The annualized return on average equity was 7.63% for the first quarter of 2012 compared to 6.19% for the first quarter of 2011.

John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc., stated, "We are very pleased with our first quarter results.  The 33.9% increase in year over year earnings was principally driven by an increase in outstanding loans.  Loan totals increased $27.1 million, or 8.9% from March 31, 2011 to March 31, 2012, funded by low cost core deposit growth and lower yielding cash investments.  Additional loan growth is expected during the second quarter as approved loans in the commercial loan pipeline begin to fund."

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. 

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.  These statements include, among others, statements related to expected additional loan growth.  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, 2011.  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.

SOURCE Southern Michigan Bancorp, Inc.