Southern Michigan Bancorp, Inc. Announces Third Quarter 2024 Earnings

Rhea-AI Summary

Southern Michigan Bancorp (SOMC) reported Q3 2024 net income of $2,586,000 ($0.57 per share), down from $2,767,000 ($0.61 per share) in Q3 2023. For the first nine months of 2024, earnings were $7,751,000 ($1.70 per share) compared to $8,468,000 ($1.86 per share) in 2023. The bank surpassed $1.5 billion in total assets, with loans at $1.084 billion and deposits at $1.266 billion. The allowance for credit losses was $12,363,000 (1.14% of loans). Return on average assets decreased to 0.70% from 0.84%, while return on equity declined to 10.18% from 12.42%. Net interest margin dropped to 2.94% from 3.18%.

Positive

• Total assets exceeded $1.5 billion milestone
• Strong asset quality with low non-performing loans ratio of 0.08%
• Minimal net loan charge-offs of $20,000 for first nine months

Negative

• Q3 2024 EPS decreased to $0.57 from $0.61 YoY
• Nine-month net income declined 8.5% YoY to $7,751,000
• Net interest margin contracted to 2.94% from 3.18%
• Return on equity decreased to 10.18% from 12.42%

COLDWATER, Mich., Oct. 23, 2024 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced third quarter net income of $2,586,000, or $0.57 per share, compared to net income of $2,767,000, or $0.61 per share, for the third quarter of 2023. For the first nine months of 2024, Southern earned $7,751,000 or $1.70 per share, compared with $8,468,000 or $1.86 per share, for the same nine-month period one year ago.  

John R. Waldron, President and Chief Executive Officer of Southern Michigan Bancorp, Inc., stated, “For the first time, our bank has surpassed $1.5 billion in total assets, a significant milestone that reflects our ongoing growth and expansion across all markets. While our earnings continue to be impacted by the current interest rate environment, we remain encouraged by the strength of our core deposits and our ability to maintain asset quality. Our focus on disciplined growth strategies has positioned us well, even amid challenges. As we navigate the shifting economic landscape, we are confident in our capacity to sustain momentum and further strengthen our balance sheet.”

As of September 30, 2024, total loans and deposits grew during the first nine months totaling $1.084 billion and $1.266 billion, respectively.

The allowance for credit losses totaled $12,363,000, or 1.14% of loans on September 30, 2024. Net loan charge-offs totaled $20,000 for the first nine months of 2024, compared to net charge-offs of 7,000 for the first nine months of 2023. Non-performing loans as a percentage of total loans were 0.08% on September 30, 2024 compared to 0.09% on December 31, 2023.

The annualized return on average assets for the nine-month periods ended September 30, 2024 and September 30, 2023 was 0.70% and 0.84% respectively. The annualized return on average equity was 10.18% for the first nine months of 2024 compared to 12.42% for the first nine months of 2023. The tax equivalent net interest margin for the nine-month periods ending September 30, 2024 and 2023 was 2.94% and 3.18%, respectively.

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, 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)
			September 30, 2024			December 31, 2023
ASSETS
Cash and cash equivalents			$	121,022		$	71,620
Federal funds sold				264			1,468
Securities available for sale, at fair value				160,771			169,740
Securities held-to-maturity, at amortized cost				60,129			61,600
Loans held-for-sale				871			169
Loans, net of allowance for credit losses of $12,363 – 2024, $11,697 - 2023				1,071,234			1,024,720
Premises and equipment, net				23,406			23,114
Net cash surrender value of life insurance				22,970			22,472
Goodwill				13,422			13,422
Other intangible assets, net				120			147
Other assets				36,314			26,323
TOTAL ASSETS			$	1,510,523		$	1,414,795
LIABILITIES
Deposits:
Non-interest bearing			$	219,072		$	226,178
Interest bearing				1,047,024			931,793
Total deposits				1,266,096			1,157,971
Securities sold under agreements to repurchase and overnight borrowings				1,688			1,738
Accrued expenses and other liabilities				17,996			15,703
Other borrowings				82,900			106,900
Subordinated debentures				34,705			34,653
Total liabilities				1,403,385			1,316,965
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 – 4,563,995 shares in 2024, 4,533,637 shares in 2023				11,406			11,330
Additional paid-in capital				13,225			13,126
Retained earnings				95,498			89,808
Accumulated other comprehensive loss				(12,991	)		(16,434	)
Total shareholders’ equity				107,138			97,830
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			$	1,510,523		$	1,414,795

Southern Michigan Bancorp, Inc. condensed consolidated statements of income (unaudited)
(In thousands, except per share data)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Interest income:
Loans, including fees	$	16,444		$	14,563		$	47,748		$	39,579
Federal funds sold and balances with banks		1,313			786			3,630			2,360
Securities:
Taxable		1,465			1,567			4,512			4,655
Tax-exempt		309			315			904			961
Total interest income		19,531			17,231			56,794			47,555
Interest expense:
Deposits		7,567			5,777			21,655			14,516
Other		1,571			1,519			4,701			3,389
Total interest expense		9,138			7,296			26,356			17,905
Net interest income		10,393			9,935			30,438			29,650
Provision for credit losses		425			25			661			950
Net interest income after provision for credit losses		9,968			9,910			29,777			28,700
Non-interest income:
Service charges on deposit accounts		439			422			1,270			1,248
Trust fees		741			629			2,041			1,787
Net gains on loan sales		181			71			419			186
Earnings on life insurance assets		169			157			498			456
ATM and debit card fee income		465			452			1,356			1,339
Other		177			197			608			644
Total non-interest income		2,172			1,928			6,192			5,660
Non-interest expense:
Salaries and employee benefits		5,528			5,356			16,154			14,751
Occupancy, net		519			429			1,515			1,397
Equipment		400			404			1,233			1,063
Professional and outside services		530			443			1,575			1,473
Software maintenance		626			568			1,817			1,639
ATM expenses		229			195			629			602
Printing, postage, and supplies		124			97			413			318
Telecommunication expenses		75			88			240			268
Other		972			869			2,958			2,525
Total non-interest expense		9,003			8,449			26,534			24,036
INCOME BEFORE INCOME TAXES		3,137			3,389			9,435			10,324
Federal income tax provision		551			622			1,684			1,856
NET INCOME	$	2,586		$	2,767		$	7,751		$	8,468
Basic Earnings Per Common Share	$	0.57		$	0.61		$	1.70		$	1.86
Diluted Earnings Per Common Share		0.57			0.61			1.70			1.86
Dividends Declared Per Common Share		0.15			0.14			0.45			0.42

FAQ

What was Southern Michigan Bancorp's (SOMC) Q3 2024 earnings per share?

SOMC reported earnings of $0.57 per share in Q3 2024, compared to $0.61 per share in Q3 2023.

What is SOMC's current total asset size as of Q3 2024?

Southern Michigan Bancorp surpassed $1.5 billion in total assets, marking a significant milestone for the bank.

What was Southern Michigan Bancorp's (SOMC) net interest margin for the first nine months of 2024?

SOMC's tax equivalent net interest margin was 2.94% for the first nine months of 2024, down from 3.18% in the same period of 2023.

What is SOMC's current loan portfolio quality in Q3 2024?

Non-performing loans were 0.08% of total loans, with net loan charge-offs of $20,000 for the first nine months of 2024.