Southern Michigan Bancorp, Inc. Announces Second Quarter 2014 Earnings - Beckley, Bluefield & Lewisburg News, Weather, Sports

Southern Michigan Bancorp, Inc. Announces Second Quarter 2014 Earnings

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SOURCE Southern Michigan Bancorp, Inc.

COLDWATER, Mich., July 22, 2014 /PRNewswire/ -- Southern Michigan Bancorp, Inc. (OTCQB: SOMC) announced second quarter 2014 net income of $1,146,000, or $0.48 per share, compared to net income of $1,079,000, or $0.45 per share, for the second quarter of 2013.  Southern's net income for the six month period ended June 30, 2014 increased 5.3% to $2,248,000, or $0.93 per share, compared to net income of $2,134,000, or $0.89 per share, for the same six month period a year ago.   

Southern Michigan Bancorp, Inc.

Total consolidated assets at June 30, 2014 were $546.3 million compared to $539.5 million at December 31, 2013. 

Southern provided $225,000 for loan losses during the six month period ended June 30, 2014 resulting in an allowance for loan losses of $5,236,000, or 1.36% of loans.  This compared to $400,000 of provision for loan losses expense for the same six month period of 2013.   Net charge offs totaled $227,000 or annualized 0.12% of loans for the six month period ending June 30, 2014, compared to $261,000 for the same six month period of 2013. 

The annualized return on average assets for the six month periods ended June 30, 2014 and 2013 was 0.81% and 0.80%, respectively.  The annualized return on average equity was 7.74% for the first six months of 2014 compared to 7.65% for the same period of 2013.  The tax equivalent net interest margin for the six month periods ending June 30, 2014 and 2013 was 3.79% and 3.76%, respectively.

John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc. stated, "We continue to be pleased with the improvements being made in both profitability and credit quality. Shareholders are seeing these results positively impact their investment as Southern's stock price increased 7.3% or $1.29 per share during the twelve month period ending June 30, 2014.  During the same twelve month period the shareholder's quarterly dividend increased 25.0% or $0.03 per share, rising from $0.12 per quarter to $0.15 per quarter."

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 "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 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)







June 30,
2014


December 31,
2013


ASSETS







     Cash and cash equivalents

$

19,726


$

32,366


     Federal funds sold


243



148


     Securities available for sale


98,248



76,005


     Loans held for sale


567



115


     Loans, net of allowance for loan losses of  $5,236 - 2014 ($5,238 – 2013)


379,276



380,773


     Premises and equipment, net


11,937



12,366


     Accrued interest receivable


2,280



2,351


     Net cash surrender value of life insurance


11,138



10,979


     Goodwill


13,422



13,422


     Other intangible assets, net


903



1,045


     Other assets


8,532



9,889


TOTAL ASSETS

$

546,272


$

539,459









LIABILITIES







     Deposits :







          Non-interest bearing

$

93,867


$

85,670


          Interest bearing


362,138



364,730


     Total deposits


456,005



450,400










     Securities sold under agreements to repurchase and overnight borrowings


12,078



18,479


     Accrued expenses and other liabilities


5,316



6,351


     Other borrowings


6,800



-


     Subordinated debentures


5,155



5,155


     Common stock subject to repurchase obligation in Employee







         Stock Ownership Plan, shares outstanding –124,971 in 2014







         (126,931 shares in 2013)


2,356



2,247


Total liabilities


487,710



482,632









SHAREHOLDERS' EQUITY







     Preferred stock, 100,000 shares authorized; none issued or outstanding


-



-


     Common stock, $2.50 par value:







         Authorized - 4,000,000 shares







         Issued – 2,405,669 shares in 2014 (2,392,630 shares in 2013)







          Outstanding (other than ESOP shares) – 2,280,698 shares in 2014
          (2,265,699 shares in 2013)


5,696



5,665


     Additional paid-in capital


17,377



17,533


     Retained earnings


35,919



34,346


     Accumulated other comprehensive loss, net


(430)



(717)


     Total shareholders' equity


58,562



56,827


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

546,272


$

539,459













 

SOUTHERN MICHIGAN BANCORP, INC.


CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)


(In thousands, except per share data)








Three Months Ended
June 30,


Six Months Ended
June 30,



2014


2013


2014


2013


Interest income:













     Loans, including fees

$

4,611


$

4,537


$

9,199


$

9,035


     Federal funds sold and balances with banks


20



26



40



51


     Securities:













          Taxable


230



166



423



288


          Tax-exempt


199



222



395



447


Total interest income


5,060



4,951



10,057



9,821















Interest expense:













     Deposits


325



465



714



970


     Other


71



70



145



148


Total interest expense


396



535



859



1,118


Net interest income


4,664



4,416



9,198



8,703


Provision for loan losses


225



175



225



400


Net interest income after provision for loan losses


4,439



4,241



8,973



8,303















Non-interest income:













     Service charges on deposit accounts


515



478



1,001



875


     Trust fees


279



265



569



545


     Net gains on security calls and sales


4



-



37



-


     Net gains on loan sales


209



453



405



976


     Earnings on life insurance assets


77



86



159



170


     ATM and debit card fee income


325



313



615



592


     Other


227



192



428



352


Total non-interest income


1,636



1,787



3,214



3,510















Non-interest expense:













     Salaries and employee benefits


2,414



2,390



4,778



4,925


     Occupancy, net


309



275



676



567


     Equipment


158



227



331



435


     Printing, postage and supplies


120



124



225



233


     Telecommunication expenses


85



68



158



137


     Professional and outside services


246



369



590



679


     FDIC assessments


92



94



180



182


     Software maintenance


235



260



433



532


     Amortization of other intangibles


71



74



142



148


     Loan related expenses


51



57



392



116


     ATM expenses


125



112



241



216


     Other


597



460



958



743


Total non-interest expense


4,503



4,510



9,104



8,913


INCOME BEFORE INCOME TAXES


1,572



1,518



3,083



2,900


Federal income tax provision


426



439



835



766


NET INCOME

$

1,146


$

1,079


$

2,248


$

2,134















Basic Earnings Per Common Share

$

0.48


$

0.45


$

0.94


$

0.89


Diluted Earnings Per Common Share


0.48



0.45



0.93



0.89


Dividends Declared Per Common Share


0.15



0.12



0.28



0.24


 

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