COLDWATER, Mich., Feb. 18, 2013 /PRNewswire/ -- Southern Michigan Bancorp, Inc. (OTCQB: SOMC) reported net income of $4,350,000 for 2012 compared to $3,402,000 for 2011, an increase of $948,000, or 27.9%. Earnings per share were $1.84 for 2012 compared to $1.46 in 2011. Fourth quarter 2012 net income was $1,167,000, or $0.49 per share, compared to $1,005,000, or $0.43 per share in the fourth quarter of 2011.
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John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc., stated, "We accomplished a great deal during the year including loan portfolio growth of $36.8 million, or 11.1% year-over-year, reaching an all-time high of $369.6 million at December 31, 2012. Deposit totals reached an all-time high increasing by $23.7 million, or 5.6% totaling $444.2 million at year end. Improvements in asset quality metrics continued with net loan charge-offs in 2012 at their lowest level in five years, and loan delinquencies and non-performing loan totals also continued to decline."
Castle continued, "As a direct result, we are pleased to report Southern achieved record earnings in 2012. While the milestones realized are noteworthy, we continue to look ahead recognizing challenges in both economic and regulatory conditions remain a concern for us, and for all community bankers. However, we remain confident that our long term strategic objectives and commitment to customer service positions us well for continued success."
Total consolidated assets at December 31, 2012 were $528.9 million compared to $509.2 million at December 31, 2011.
Southern provided $1,350,000 for loan losses in 2012, with an allowance for loan losses at December 31, 2012 of $5,455,000, or 1.48% of loans. This compared to a provision for loan losses of $1,050,000 for 2011, with an allowance for loan losses at December 31, 2011 of $5,412,000, or 1.63% of loans. The increase in the provision for loan losses resulted primarily from loan growth offset by a reduction in specific reserves on impaired loans and lower delinquency and charge off trends. Net charge-offs for 2012 totaled $1,307,000, or .35% of loans, down from $1,332,000, or .40% of loans in 2011.
Net interest income increased $1,538,000, or 9.8% in 2012 compared to 2011. Interest income increased as the loan portfolio grew year-over-year. Interest expense decreased as higher priced deposits and other borrowings decreased.
Non-interest income for 2012 was 10.7% higher at $7,181,000 compared to $6,485,000 in 2011. The increase was primarily the result of robust mortgage loan activity increasing the net gains on loans sold by $873,000 to $2,108,000 for 2012. This increase offset a reduction in service charges on deposit accounts of $337,000 for the same period.
The annualized return on average assets for 2012 and 2011 was 0.84% and 0.68%, respectively. The annualized return on average equity was 8.09% for 2012 compared to 6.80% for 2011.
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 "continue", "look ahead", "long term", "strategic", "objectives", "trends" 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 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.
SOUTHERN MICHIGAN BANCORP, INC. AND SUBSIDIARIES |
|||||
(In thousands, except per share amounts) |
December 31, |
||||
2012 |
2011 |
||||
ASSETS |
|||||
Cash |
$ |
3,545 |
$ |
3,531 |
|
Due from banks |
46,789 |
38,654 |
|||
Cash and cash equivalents |
50,334 |
42,185 |
|||
Federal funds sold |
276 |
287 |
|||
Securities available for sale |
64,525 |
90,344 |
|||
Loans held for sale |
1,776 |
1,088 |
|||
Loans, net of allowance for loan losses of $5,455 - 2012 ($5,412 - 2011) |
364,150 |
327,392 |
|||
Premises and equipment, net |
12,419 |
12,546 |
|||
Accrued interest receivable |
2,059 |
2,148 |
|||
Net cash surrender value of life insurance |
10,644 |
10,312 |
|||
Goodwill |
13,422 |
13,422 |
|||
Other intangible assets, net |
1,341 |
1,666 |
|||
Other assets |
7,914 |
7,830 |
|||
Total Assets |
$ |
528,860 |
$ |
509,220 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||
Liabilities |
|||||
Deposits |
|||||
Non-interest bearing |
$ |
87,013 |
$ |
61,930 |
|
Interest bearing |
357,157 |
358,581 |
|||
Total deposits |
444,170 |
420,511 |
|||
Securities sold under agreements to repurchase and overnight |
16,134 |
18,074 |
|||
Accrued expenses and other liabilities |
5,662 |
4,568 |
|||
Other borrowings |
1,039 |
7,751 |
|||
Subordinated debentures |
5,155 |
5,155 |
|||
Common stock subject to repurchase obligation in |
2,065 |
1,296 |
|||
Total Liabilities |
474,225 |
457,355 |
|||
Shareholders' equity |
|||||
Preferred stock, 100,000 shares authorized; none issued or outstanding |
- |
- |
|||
Common stock, $2.50 par value: |
|||||
Authorized – 4,000,000 shares |
|||||
Issued – 2,375,975 shares in 2012 (2,358,599 shares in 2011) |
|||||
Outstanding (other than ESOP shares) –2,250,850 shares |
|||||
in 2012 (2,243,429 shares in 2011) |
5,627 |
5,609 |
|||
Additional paid-in capital |
17,700 |
18,278 |
|||
Retained earnings |
31,046 |
27,576 |
|||
Accumulated other comprehensive income, net |
297 |
571 |
|||
Unearned Employee Stock Ownership Plan shares |
(35) |
(169) |
|||
Total Shareholders' Equity |
54,635 |
51,865 |
|||
Total Liabilities and Shareholders' Equity |
$ |
528,860 |
$ |
509,220 |
SOUTHERN MICHIGAN BANCORP, INC. AND SUBSIDIARIES |
|||||||||||
(In thousands, except per share amounts) |
Three Months Ended |
Year Ended |
|||||||||
2012 |
2011 |
2012 |
2011 |
||||||||
Interest income: |
|||||||||||
Loans, including fees |
$ |
4,659 |
$ |
4,516 |
$ |
18,478 |
$ |
17,664 |
|||
Securities: |
|||||||||||
Taxable |
111 |
158 |
450 |
631 |
|||||||
Tax-exempt |
233 |
249 |
959 |
920 |
|||||||
Other |
27 |
43 |
104 |
172 |
|||||||
Total interest income |
5,030 |
4,966 |
19,991 |
19,387 |
|||||||
Interest expense: |
|||||||||||
Deposits |
527 |
723 |
2,329 |
3,141 |
|||||||
Other |
107 |
157 |
488 |
610 |
|||||||
Total interest expense |
634 |
880 |
2,817 |
3,751 |
|||||||
Net interest income |
4,396 |
4,086 |
17,174 |
15,636 |
|||||||
Provision for loan losses |
300 |
175 |
1,350 |
1,050 |
|||||||
Net interest income after provision for loan losses |
4,096 |
3,911 |
15,824 |
14,586 |
|||||||
Non-interest income: |
|||||||||||
Service charges on deposit accounts |
439 |
464 |
1,695 |
2,032 |
|||||||
Trust fees |
289 |
268 |
1,126 |
1,120 |
|||||||
Net securities gains |
- |
25 |
3 |
29 |
|||||||
Net gains on loan sales |
711 |
404 |
2,108 |
1,235 |
|||||||
Earnings on life insurance assets |
82 |
96 |
332 |
347 |
|||||||
ATM and debit card fee income |
294 |
260 |
1,147 |
1,015 |
|||||||
Other |
196 |
166 |
770 |
707 |
|||||||
Total non-interest income |
2,011 |
1,683 |
7,181 |
6,485 |
|||||||
Non-interest expense: |
|||||||||||
Salaries and employee benefits |
2,533 |
2,572 |
9,713 |
9,623 |
|||||||
Occupancy, net |
199 |
255 |
996 |
1,194 |
|||||||
Equipment |
215 |
192 |
821 |
757 |
|||||||
Printing, postage and supplies |
104 |
114 |
452 |
496 |
|||||||
Telecommunication |
61 |
105 |
273 |
376 |
|||||||
Software maintenance |
199 |
110 |
555 |
435 |
|||||||
Professional and outside services |
340 |
236 |
1,185 |
909 |
|||||||
Amortization of other intangibles |
81 |
85 |
325 |
339 |
|||||||
Automated teller machines |
104 |
104 |
422 |
371 |
|||||||
Advertising and marketing |
64 |
62 |
316 |
224 |
|||||||
FDIC deposit assessments |
96 |
101 |
390 |
477 |
|||||||
Other real estate owned expense |
57 |
38 |
233 |
147 |
|||||||
Loss on sale of other real estate owned |
32 |
24 |
132 |
118 |
|||||||
Other |
399 |
269 |
1,412 |
1,244 |
|||||||
Total non-interest expense |
4,484 |
4,267 |
17,225 |
16,710 |
|||||||
INCOME BEFORE INCOME TAXES |
1,623 |
1,327 |
5,780 |
4,361 |
|||||||
Federal income tax provision |
456 |
322 |
1,430 |
959 |
|||||||
NET INCOME |
$ |
1,167 |
$ |
1,005 |
$ |
4,350 |
$ |
3,402 |
|||
Basic Earnings Per Common Share |
$ |
0.49 |
$ |
0.43 |
$ |
1.84 |
$ |
1.46 |
|||
Diluted Earnings Per Common Share |
$ |
0.49 |
$ |
0.43 |
$ |
1.84 |
$ |
1.46 |
|||
Dividends Declared Per Common Share |
$ |
0.12 |
$ |
0.07 |
$ |
0.37 |
$ |
0.22 |
SOURCE Southern Michigan Bancorp, Inc.
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