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

COLDWATER, Mich., Oct. 25, 2023 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced third quarter 2023 net income of $2,767,000, or $0.61 per share, compared to net income of $3,613,000, or $0.79 per share, for the third quarter of 2022. Southern earned $8,468,000, or $1.86 per share, for the nine-month period ending September 30, 2023 compared to $9,907,000, or $2.18 per share, for the same nine-month period a year ago.

Consolidated assets at September 30, 2023 totaled $1.429 billion compared to $1.277 billion at December 31, 2022. Loan totals grew 17.1%, from December 31, 2022 levels of $886.6 million to $1.039 billion. Deposits totaled $1.192 billion at September 30, 2023, an increase of $101 million or 9.3%, as compared to year end 2022.

John Waldron, President and CEO of Southern Michigan Bancorp, Inc. stated, “Despite the challenging rate environment and higher deposit costs, net interest income decreased nominally. Overhead increased in part due to higher FTE counts and the higher wage scale prevalent across the country.”

Waldron continued, “We opened our first branch office in the Jackson market during the third quarter of 2023 and look forward to further expansion in the coming years.”

The allowance for loan losses totaled $11,634,000, or 1.12% of loans at September 30, 2023. Net loan losses totaled $7,000 for the first nine months of 2023, compared to net loan recoveries of $11,000 during the first nine months of 2022. Asset quality remains strong with loan delinquencies totaling just 0.10% of gross loans at September 30, 2023. During the first nine months of 2023 $950,000 of provision for credit loss expense was recorded, a result of loan growth. This contrasts with no provision for credit loss for the first nine months of 2022.

The annualized return on average assets for the nine-month periods ending September 30, 2023 and 2022 was 0.84% and 1.09%, respectively. The annualized return on average equity was 12.42% for the first nine months of 2023 compared to 15.14% for the first nine months of 2022. The tax equivalent net interest margins for the nine-month periods ending September 30, 2023 and 2022 was 3.18% and 3.23%, respectively.

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, Jackson, 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 to- 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, extent, 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, Chairman(517) 279-5500