SOMC - Southern Michigan Bancorp Inc. Announces Second Quarter 2023 Earnings

COLDWATER, Mich., July 26, 2023 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced second quarter 2023 net income of $2,696,000, or $0.59 per share, compared to net income of $3,361,000, or $0.74 per share, for the second quarter of 2022. Southern earned $5,701,000, or $1.25 per share, for the six-month period ending June 30, 2023 compared to $6,294,000, or $1.39 per share, for the same six-month period a year ago.

Total consolidated assets at June 30, 2023 totaled $1.418 billion compared to $1.277 billion at December 31, 2022.   Loan totals grew 12.8%, from December 31, 2022 levels of $886.6 million to $999.7 million. Deposits totaled $1,180.2 million at June 30, 2023, an increase of $89.2 million or 8.2%, as compared to year end 2022.

John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc. stated, “Continued loan growth, particularly in the Jackson market, necessitated additional provision expense this quarter. Asset quality remains strong with very little delinquency. Our financial performance remains solid despite the current rate environment.”

The allowance for loan losses totaled $11,616,000, or 1.16% of loans at June 30, 2023. Net loan recoveries totaled $3,000 for the first six months of 2023, compared to net loan losses of $3,000 during the first six months of 2022. Asset quality remains strong with loan delinquencies totaling just 0.12% of gross loans on June 30, 2023. During the first six months of 2023 $925,000 of provision for credit loss expense was recorded, a result of loan growth. This contrasts with no provision for credit loss for the first six months of 2022.

The annualized return on average assets for the six-month periods ending June 30, 2023 and 2022 was 0.86% and 1.04%, respectively. The annualized return on average equity was 12.63% for the first six months of 2023 compared to 14.03% for the first six months of 2022. The tax equivalent net interest margins for the six-month periods ending June 30, 2023 and 2022 was 3.25% and 3.13%, respectively.

Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust. It operates 14 branches within Branch, Calhoun, Hillsdale, Kalamazoo and St. Joseph Counties, and a loan production office in Jackson 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 “expected,” “anticipated,” 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.

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

(In thousands, except share data)

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

(In thousands, except per share data)

CONTACT: John H. Castle, CEO
(517) 279-5500