COLDWATER, Mich., Oct. 26 /PRNewswire-FirstCall/ -- Southern Michigan Bancorp,
Inc. (OTC Bulletin Board: SOMC) announced third quarter net income of
$771,000, or $0.34 per diluted share, for the three months ended September 30,
2009. This compares to $21,000, or $0.01 per diluted share, for the three
months ended September 30, 2008. Southern's net income for the nine months
ended September 30, 2009, was $1,251,000, or $0.55 per diluted share, compared
to $1,571,000, or $0.69 per diluted share, for the same nine month period a
year ago.
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Southern provided $350,000 for loan losses during the third quarter of 2009
and $2,300,000 for the nine month period ended September 30, 2009, compared to
a $1,580,000 provision for the third quarter of 2008 and $2,730,000 for the
same nine month period a year ago. Net charge-offs totaled $254,000 for the
third quarter of 2009 compared to $766,000 during the second quarter of 2009
and $1.7 million in the first quarter of 2009. Net charge-offs for the nine
month period ended September 30, 2008 totaled $899,000.
Southern's allowance for loan losses totaled $6.7 million, or 2.00% of total
loans at September 30, 2009 compared to $7.0 million, or 2.07% of total loans
at September 30, 2008. Non-performing loans totaled $8,151,000, or 2.43% of
gross loans at September 30, 2009 compared to $10,449,000, or 3.10% of gross
loans at September 30, 2008, a decrease of $2,298,000, or 22%. In addition,
loans 60-89 days past due were only $92,417 or .03% of total loans as of
September 30, 2009.
"Given the extent of economic weakness and uncertainty, we are pleased to
report solid operating results for the third quarter," said John H. Castle,
Chairman and Chief Executive Officer. "While various economic indicators are
beginning to stabilize or show signs of improvement, we believe the recovery
will extend well into 2010 and possibly beyond."
Southern's net interest margin remained strong when compared to peers at 4.14%
for the nine month period ended September 30, 2009. This was a decrease
compared to 4.43% for the nine month comparable period in 2008. The decline
in margin from 2008 was attributable to the declining rate environment.
Non-interest income for the third quarter of 2009 was $119,000 greater than
the comparable period in 2008. Net gains on loan sales were up $92,000 or
113.6% for the third quarter of 2009 compared to the same period of 2008 and
up $308,000 or 104.4% for the nine month period of 2009 compared to the same
period of 2008. The increase was primarily driven by refinancing activity due
to low mortgage interest rates. Non-interest expense for the third quarter of
2009 was $148,000 less than the same period of 2008, primarily due to a
$302,000 decrease in salaries and employee benefits. FDIC assessments
increased $140,000 and $620,000, respectively, for the three and nine months
ending September 30, 2009 compared to the same periods of 2008. During the
second quarter 2009 Southern recorded a special deposit insurance assessment
of $217,000.
The annualized return on average assets for the nine month periods ending
September 30, 2009 and 2008 was 0.36% and 0.44%, respectively. The annualized
return on average equity was 3.70% for the first nine months of 2009 compared
to 4.56% for the same period of 2008.
Total consolidated assets at September 30, 2009 were $467.8 million, compared
to $475.0 million at December 31, 2008. Over $14 million of higher priced,
non-core deposits were eliminated from the balance sheet during the first
quarter of 2009.
Southern Michigan Bancorp, Inc. is a bank holding company headquartered in
Coldwater, Michigan with 18 branches within Branch, Calhoun, Cass, Hillsdale
and St. Joseph Counties which provide a broad range of consumer, business and
wealth management services throughout the region.
The 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 "will", "uncertainty", "believe", "beginning", "possibly"
"beyond" and other similar words or expressions. Accounting estimates, such
as the provision and allowance for loan losses, are inherently
forward-looking. There can be no assurance that future loan losses will be
limited to the amounts estimated. Our ability to successfully implement new
programs and initiatives, increase efficiencies 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 or
forecasted in such forward-looking statements. Risk factors include, but are
not limited to, the risk factors described in "Item 1A - Risk Factors" of
Southern Michigan Bancorp, Inc.'s Annual Report on Form 10-K for the year
ended December 31, 2008; the timing and level of asset growth; changes in
banking laws and regulations; changes in tax laws; changes in prices, levies
and assessments; the impact of technological advances and issues; governmental
and regulatory policy changes; opportunities for acquisitions and the
effective completion of acquisitions and integration of acquired entities; the
possibility that anticipated cost savings and revenue enhancements from
acquisitions, restructuring, reorganizations and bank consolidations may not
be realized at amounts projected, at all or within expected time frames; the
local and global effects of ongoing and future military actions; and current
uncertainties and fluctuations in the financial markets and stocks of
financial services providers due to concerns about credit availability and
concerns about the Michigan economy in particular. Southern undertakes no
obligation to update or revise any forward-looking statements to reflect
developments that occur or information obtained after the date of this report.
Southern Michigan Bancorp, Inc.
Unaudited Interim Financial Statements
Consolidated Balance Sheets
(In thousands, except share data)
Sept. 30, Dec. 31,
2009 2008
---- ----
ASSETS
Cash and cash equivalents $27,792 $27,989
Federal funds sold 2,942 3,320
Securities available for sale 58,969 65,718
Loans held for sale, net of
valuation of -0- in 2009 and 2008 258 121
Loans, net of allowance for loan
losses of $6,720 - 2009 ($7,104 -
2008) 328,867 328,206
Premises and equipment, net 12,893 13,286
Accrued interest receivable 2,504 2,614
Net cash surrender value of life
insurance 9,774 9,523
Goodwill 13,422 13,422
Other intangible assets 2,445 2,717
Other assets 7,971 8,080
----- -----
TOTAL ASSETS $467,837 $474,996
======== ========
LIABILITIES
Deposits:
Non-interest bearing $50,988 $57,216
Interest bearing 331,701 336,827
------- -------
Total deposits 382,689 394,043
Securities sold under agreements to
repurchase and overnight borrowings 13,895 13,890
Accrued expenses and other
liabilities 3,842 4,272
Other borrowings 15,954 12,492
Subordinated debentures 5,155 5,155
----- -----
Total liabilities 421,535 429,852
Common stock subject to repurchase
obligation in
Employee Stock Ownership Plan,
102,502 shares outstanding in 2009
(100,392 in 2008) 871 728
SHAREHOLDERS' EQUITY
Preferred stock, 100,000 shares
authorized; none issued or
outstanding - -
Common stock, $2.50 par value:
Authorized - 4,000,000 shares
Issued - 2,323,410 shares in 2009
(2,311,740 shares in 2008)
Outstanding (other than ESOP shares)
- 2,220,908 shares in 2009
(2,211,348 shares in 2008) 5,552 5,528
Additional paid-in capital 18,405 18,473
Retained earnings 21,494 20,593
Accumulated other comprehensive
income, net 446 413
Unearned Employee Stock Ownership
Plan shares (466) (591)
---- ----
Total shareholders' equity 45,431 44,416
------ ------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $467,837 $474,996
======== ========
Southern Michigan Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
(In thousands, except per share data)
Three Months Nine Months
Ended Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Interest income:
Loans, including
fees $4,966 $5,587 $14,881 $17,301
Federal funds sold
and balances with
banks 22 116 42 339
Securities:
Taxable 228 455 895 1,590
Tax-exempt 231 233 684 716
--- --- --- ---
Total interest
income 5,447 6,391 16,502 19,946
----- ----- ------ ------
Interest expense:
Deposits 1,128 1,615 3,561 5,453
Other 142 253 544 909
--- --- --- ---
Total interest
expense 1,270 1,868 4,105 6,362
----- ----- ----- -----
Net Interest
Income 4,177 4,523 12,397 13,584
Provision for loan
losses 350 1,580 2,300 2,730
--- ----- ----- -----
Net interest
income after
provision for
loan losses 3,827 2,943 10,097 10,854
Non-interest
income:
Service charges on
deposit accounts 786 726 2,091 2,076
Trust fees 237 297 716 844
Net gains on
security calls
and sales - - 407 15
Net gains on loan
sales 173 81 603 295
Earnings on life
insurance assets 83 84 251 256
Gain on life
insurance
proceeds - - - 390
Income and fees
from automated
teller machines 181 166 514 475
Other 214 201 718 670
--- --- --- ---
Total non-interest
income 1,674 1,555 5,300 5,021
Non-interest
expense:
Salaries and
employee benefits 2,413 2,715 7,355 7,977
Occupancy, net 325 273 1,047 1,048
Equipment 217 307 672 927
Printing, postage
and supplies 158 169 470 489
Telecommunication
expenses 88 87 263 283
Professional and
outside services 339 324 999 1,096
FDIC assessments 157 17 676 56
Software
maintenance 101 82 315 304
Amortization of
other intangibles 91 94 272 281
Other 672 641 2,113 1,918
--- --- ----- -----
Total non-interest
expense 4,561 4,709 14,182 14,379
----- ----- ------ ------
INCOME (LOSS)
BEFORE INCOME
TAXES 940 (211) 1,215 1,496
Federal income tax
provision
(credit) 169 (232) (36) (75)
--- ---- --- ---
NET INCOME $771 $21 $1,251 $1,571
==== === ====== ======
Basic Earnings Per
Common Share $0.34 $0.01 $0.55 $0.69
===== ===== ===== =====
Diluted Earnings
Per Common Share $0.34 $0.01 $0.55 $0.69
===== ===== ===== =====
Dividends Declared
Per Common Share $0.05 $0.20 $0.15 $0.60
===== ===== ===== =====
SOURCE Southern Michigan Bancorp, Inc.
John H. Castle, CEO of Southern Michigan Bancorp, Inc. +1-517-279-5500
