Southern Michigan Bancorp, Inc. Announces Fourth Quarter and Full Year 2025 Earnings
MWN-AI** Summary
On February 17, 2026, Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) reported robust financial results for the fourth quarter and full year of 2025. The company posted a fourth-quarter net income of $2,912,000, or $0.62 per share, marking a 9.9% increase from the preceding year's net income of $2,650,000, or $0.57 per share. For the entire year, Southern Michigan Bancorp recorded net income of $12,215,000, translating to $2.63 per share, up 17.4% from $10,402,000 and $2.28 per share in 2024.
The bank's performance indicators demonstrated solid growth, with an annualized return on average assets rising to 0.77% in 2025, up from 0.71% in the previous year. The annualized return on average equity also improved to 10.64%, compared to 10.07% in 2024. Additionally, the tax-equivalent net interest margin increased to 3.22%, signaling effective management of interest income.
President and CEO, John R. Waldron, expressed satisfaction with the institution’s performance, highlighting a promising year with loan growth of 14.1%, deposit growth of 13.2%, and total asset growth of 13.0%. The report also noted an increase in the allowance for credit losses to $15,553,000, consistent with the rise in loans, which totaled $1,257,855,000 by year-end.
However, challenges included a spike in non-performing loans to 0.98% of total loans, up significantly from 0.08% in 2024. Despite the heightened risk in this area, the bank's overall profitability and growth metrics portray Southern Michigan Bancorp, Inc. as a strong player in regional banking, providing a range of financial services through its 18 offices across Michigan.
MWN-AI** Analysis
Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) has released its fourth quarter and full year results for 2025, showcasing robust financial performance that suggests a positive outlook for the bank and its investors. With a net income of $2,912,000 for Q4 2025, representing a 9.9% increase year-over-year, and a 17.4% increase to $12,215,000 for the full year, the company demonstrates strong growth. This consistent expansion highlights the bank's ability to navigate market challenges effectively.
The reported net interest margin also increased to 3.22%, suggesting improved profitability from lending activities, which combined with a loan growth of 14.1%, indicates a dynamic lending environment. However, rising non-performing loans, which increased from 0.08% to 0.98% of total loans, necessitates caution and underscores the need for close monitoring of credit quality.
Additionally, an annualized return on average equity of 10.64% is commendable, indicating effective management and profitability relative to shareholders' equity. The bank's growth in deposits by 13.2% and total asset growth of 13% further bolsters the firm's financial foundation.
Investors should note the increase in the allowance for credit losses, which stands at 1.22% of loans. Although this figure reflects prudent management, especially in a changing economic landscape, the rise in net loan charge-offs from $28,000 to $53,000 warrants attention.
In conclusion, while Southern Michigan Bancorp's solid earnings and growth trajectory present an attractive investment opportunity, potential investors should remain mindful of credit quality metrics and the competitive landscape of the banking sector. Maintaining a balanced approach, focusing on both growth and risk management, will be key to capitalizing on potential future gains.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
COLDWATER, Mich., Feb. 17, 2026 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced fourth quarter 2025 net income of $2,912,000, or $0.62 per share, an increase of $262,000, or 9.9%, compared to net income of $2,650,000, or $0.57 per share, for the fourth quarter of 2024. Southern earned $12,215,000, or $2.63 per share, for the year ended December 31, 2025, an increase of $1,813,000, or 17.4%, compared to net income of $10,402,000, or $2.28 per share, for the same period of 2024.
The annualized return on average assets for the years ended December 31, 2025, and December 31, 2024, was 0.77% and 0.71%, respectively. The annualized return on average equity for the years ended December 31, 2025 and December 31, 2024, was 10.64% and 10.07%, respectively. The tax equivalent net interest margin for the year ended December 31, 2025 was 3.22% compared to 2.98% for the same period of 2024.
John R. Waldron, President and Chief Executive Officer of Southern Michigan Bancorp, Inc., stated, “We are pleased to announce another solid quarter of earnings and growth. For 2025, we achieved loan growth of 14.1%, deposit growth of 13.2% and total asset growth of 13.0%.”
The allowance for credit losses totaled $15,553,000, or 1.22% of loans on December 31, 2025. Net loan charge-offs totaled $53,000 for 2025, compared to $28,000 for 2024. Non-performing loans as a percentage of total loans were 0.98% as of December 31, 2025, and 0.08% as of December 31, 2024.
Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust. It operates 18 offices within Branch, Calhoun, Hillsdale, Jackson, Kalamazoo 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. All statements with reference to a future time period are forward-looking. Management’s determination of the provision and allowance for credit losses and other accounting estimates, such as the carrying value of goodwill, other real estate owned, mortgage servicing rights and the fair value of investment securities, involves judgments that are inherently forward-looking. 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 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)
| December 31, 2025 | December 31, 2024 | ||||||
| ASSETS | |||||||
| Cash and cash equivalents | $ | 109,498 | $ | 73,737 | |||
| Federal funds sold | 878 | 259 | |||||
| Securities available for sale, at fair value | 156,220 | 159,320 | |||||
| Securities held-to-maturity, at amortized cost | 62,471 | 60,454 | |||||
| Loans held-for-sale | 214 | 995 | |||||
| Loans, net of allowance for credit losses of $15,553 – 2025, $12,782 - 2024 | 1,257,855 | 1,103,652 | |||||
| Premises and equipment, net | 25,188 | 25,600 | |||||
| Net cash surrender value of life insurance | 28,506 | 23,139 | |||||
| Goodwill | 13,422 | 13,422 | |||||
| Other intangible assets, net | 75 | 111 | |||||
| Other real estate owned | 3,689 | - | |||||
| Other assets | 32,461 | 35,866 | |||||
| TOTAL ASSETS | $ | 1,690,477 | $ | 1,496,555 | |||
| LIABILITIES | |||||||
| Deposits: | |||||||
| Non-interest bearing | $ | 224,171 | $ | 223,583 | |||
| Interest bearing | 1,192,627 | 1,028,212 | |||||
| Total deposits | 1,416,798 | 1,251,795 | |||||
| Securities sold under agreements to repurchase and overnight borrowings | 1,390 | 1,560 | |||||
| Accrued expenses and other liabilities | 18,118 | 18,355 | |||||
| Other borrowings | 97,900 | 82,900 | |||||
| Subordinated debentures | 34,791 | 34,722 | |||||
| Total liabilities | 1,568,997 | 1,389,332 | |||||
| SHAREHOLDERS’ EQUITY | |||||||
| Preferred stock, 100,000 shares authorized; none issued or outstanding | – | – | |||||
| Common stock, $2.50 par value: | |||||||
| Authorized – 10,000,000 shares | |||||||
| Issued and outstanding – 4,623,734 shares in 2025, 4,577,107 shares in 2024 | 11,555 | 11,438 | |||||
| Additional paid-in capital | 13,621 | 13,438 | |||||
| Retained earnings | 106,716 | 97,462 | |||||
| Accumulated other comprehensive loss | (10,412 | ) | (15,115 | ) | |||
| Total shareholders’ equity | 121,480 | 107,223 | |||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 1,690,477 | $ | 1,496,555 |
SOUTHERN MICHIGAN BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share data)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||
| Interest income: | |||||||||||||
| Loans, including fees | $ | 19,052 | $ | 16,628 | $ | 72,776 | $ | 64,376 | |||||
| Federal funds sold and balances with banks | 823 | 999 | 3,314 | 4,629 | |||||||||
| Securities: | |||||||||||||
| Taxable | 1,404 | 1,376 | 5,810 | 5,889 | |||||||||
| Tax-exempt | 410 | 318 | 1,498 | 1,222 | |||||||||
| Total interest income | 21,689 | 19,321 | 83,398 | 76,116 | |||||||||
| Interest expense: | |||||||||||||
| Deposits | 7,847 | 7,358 | 30,434 | 29,013 | |||||||||
| Other | 1,447 | 1,315 | 5,484 | 6,016 | |||||||||
| Total interest expense | 9,294 | 8,673 | 35,918 | 35,029 | |||||||||
| Net interest income | 12,395 | 10,648 | 47,480 | 41,087 | |||||||||
| Provision for credit losses | 1,332 | 353 | 3,196 | 1,014 | |||||||||
| Net interest income after provision for credit losses | 11,063 | 10,295 | 44,284 | 40,073 | |||||||||
| Non-interest income: | |||||||||||||
| Service charges on deposit accounts | 443 | 422 | 1,669 | 1,692 | |||||||||
| Trust fees | 876 | 704 | 3,221 | 2,744 | |||||||||
| Net gains on loan sales | 395 | 253 | 1,139 | 672 | |||||||||
| Earnings on life insurance assets | 229 | 170 | 833 | 667 | |||||||||
| Gain from life insurance | – | – | 202 | – | |||||||||
| ATM and debit card fee income | 476 | 462 | 1,882 | 1,818 | |||||||||
| Other | 230 | 289 | 831 | 898 | |||||||||
| Total non-interest income | 2,649 | 2,300 | 9,777 | 8,491 | |||||||||
| Non-interest expense: | |||||||||||||
| Salaries and employee benefits | 6,161 | 6,233 | 24,146 | 22,388 | |||||||||
| Occupancy, net | 601 | 540 | 2,438 | 2,054 | |||||||||
| Equipment | 553 | 425 | 2,015 | 1,658 | |||||||||
| Professional and outside services | 575 | 581 | 2,130 | 2,156 | |||||||||
| Software maintenance | 774 | 635 | 2,841 | 2,452 | |||||||||
| ATM expenses | 235 | 212 | 976 | 841 | |||||||||
| Printing, postage, and supplies | 123 | 97 | 468 | 510 | |||||||||
| Telecommunication expenses | 91 | 73 | 314 | 313 | |||||||||
| Other | 1,251 | 1,096 | 4,342 | 4,053 | |||||||||
| Total non-interest expense | 10,364 | 9,892 | 39,670 | 36,425 | |||||||||
| INCOME BEFORE INCOME TAXES | 3,348 | 2,703 | 14,391 | 12,139 | |||||||||
| Federal income tax provision | 436 | 53 | 2,176 | 1,737 | |||||||||
| NET INCOME | $ | 2,912 | $ | 2,650 | $ | 12,215 | $ | 10,402 | |||||
| Basic Earnings Per Common Share | $ | 0.63 | $ | 0.57 | $ | 2.65 | $ | 2.28 | |||||
| Diluted Earnings Per Common Share | 0.62 | 0.57 | 2.63 | 2.28 | |||||||||
| Dividends Declared Per Common Share | 0.16 | 0.15 | 0.64 | 0.60 |
A photo accompanying this announcement is available at:
https://www.globenewswire.com/NewsRoom/AttachmentNg/832ed605-5584-4b45-b447-75d83a032fe1
CONTACT: John R. Waldron, President and CEO(517) 279-5500
FAQ**
What factors contributed to the 14.loan growth experienced by Southern Michigan Bancorp Inc SOMC in 2025, and how sustainable are these factors for future growth?
With non-performing loans increasing to 0.98%, how does Southern Michigan Bancorp Inc SOMC plan to manage credit risk and maintain asset quality moving forward?
Given the significant increase in the allowance for credit losses to $15.6 million, what does Southern Michigan Bancorp Inc SOMC anticipate regarding future loan performance and credit risk?
How will the improvements in the net interest margin, which rose to 3.22% for 2025, impact Southern Michigan Bancorp Inc SOMC’s profitability strategy in the coming years?
**MWN-AI FAQ is based on asking OpenAI questions about Southern Michigan Bancorp Inc (OTC: SOMC).
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