Southern Michigan Bancorp, Inc. Announces Second Quarter 2011 Earnings

COLDWATER, Mich., July 22, 2011 /PRNewswire/ -- Southern Michigan Bancorp, Inc. (OTCBB: SOMC) announced second quarter net income of $762,000, or $0.33 per diluted share, for the three months ended June 30, 2011. This compares to net income of $803,000, or $0.35 per diluted share, for the three months ended June 30, 2010.  Southern's net income for the six months ended June 30, 2011, was $1,510,000, or $0.65 per diluted share, compared to net income of $1,505,000, or $0.65 per diluted share, for the same six month period a year ago.  

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Total consolidated assets at June 30, 2011 were $481.3 million compared to $493.9 million at December 31, 2010.  

Southern provided $375,000 for loan losses during the second quarter of 2011 compared to a $150,000 provision for the second quarter of 2010.  The increase in the provision for loan losses resulted from increased net charge offs.  Net charge offs totaled $549,000 during the second quarter of 2011 compared to $368,000 in the second quarter of 2010.  For the six month period ended June 30, 2011, net charge offs totaled $792,000 compared to $699,000 for the same six month period in 2010.  

The annualized return on average assets for the six month periods ended June 30, 2011 and 2010 was 0.61% and 0.64%, respectively.  The annualized return on average equity was 6.17% for the first six months of 2011 compared to 6.48% for the same period of 2010.

John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc., stated, "While uncertain economic conditions continue to exist, Southern continues to be well positioned for future growth and profitability.  Earnings results, although not where we would like them to be, remained stable.  Asset quality indicators have improved with delinquencies down 98 basis points to 2.41% at June 30, 2011 as compared to 3.39% at June 30, 2010, and non-performing assets, including non-accrual loans, loans past due 90 days and OREO, are down 19.7%, or $1,812,000, during the same period.  In addition, we are pleased with the progress we are making with cost saving initiatives which were implemented earlier this year."

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 "uncertain," "continue," "well positioned," "future," and other similar words or phrases.  Such statements are based upon current beliefs and expectations and involve substantial risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These statements include, among others, statements related to future growth and profitability and the future effect of cost saving measures. Management's determination of the provision and allowance for loan losses, the appropriate carrying value of intangible assets (including goodwill, mortgage servicing rights and deferred tax assets) and other real estate owned, 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. Management's assumptions regarding pension and other post retirement plans involve judgments that are inherently forward-looking. Our ability to sell other-real-estate owned at its carrying value or at all, successfully implement new programs and initiatives, increase efficiencies, respond to declines in collateral values and credit quality, maintain our current level of deposits and other sources of funding, and improve profitability is not entirely within our control and is not assured. The future effect of changes in the real estate, 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, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements.  We undertake no obligation to update or revise our forward-looking statements to reflect developments that occur or information obtained after the date of this report.

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, 2010.  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.