$SOMC Southern Michigan Bancorp, Inc. Announces Fourth Quarter and Full Year 2021 Earnings
Press Release | 02/11/2022
COLDWATER, Mich., Feb. 11, 2022 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) reported net income of $11,757,000 for 2021 compared to $7,386,000 for 2020. Diluted earnings per share were $2.58 for 2021 compared to $1.61 for 2020 after adjusting for the 100 percent stock dividend issued in May 2021. Fourth quarter 2021 net income was $2,522,000, or $0.56 per share, compared to $2,024,000, or $0.44 per share for the fourth quarter of 2020.
Total consolidated assets at December 31, 2021 increased 16.4 percent, reaching $1.16 billion compared to $997.6 million at December 31, 2020. Loan totals grew 16.6 percent, from December 31, 2020 levels of $635.9 million to $741.4 million. Deposits also increased to $974.4 million at December 31, 2021, an increase of $136.1 million or 16.2 percent, as compared to year end 2020.
Southern Michigan Bancorp, Inc., Chairman and Chief Executive Officer John H. Castle stated, “Net income was a record for the year, 36.4 percent higher than the previous high of $8,622,000 reported in 2019. Total assets, loans and deposits also continued to grow, expanding to new record highs at year end 2021. Excluding the forgiveness of $46.9 million of PPP loans during the year, loan growth exceeded $150 million. Additionally, the commercial loan pipeline remains strong. With liquidity remaining elevated, continued loan growth will be a key to positive earnings momentum in 2022.”
Southern provided $1.5 million for loan losses in 2021, with an allowance for loan losses at December 31, 2021 of $9,320,000, or 1.26% of loans. This compared to a provision for loan losses of $2.6 million for 2020, with an allowance for loan losses at December 31, 2020 of $7,789,000, or 1.22% of loans. Net loan loss recoveries totaled $31,000 for 2021 compared to $5,000 for 2020.
The return on average assets for 2021 was 1.06% compared to 0.82% for 2020. The return on average equity was 12.32% for 2021 compared to 8.36% for 2020. The tax equivalent net interest margins for 2021 and 2020 were 3.27% and 3.24%, respectively.
Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust. It operates 13 branches within Branch, Calhoun, Hillsdale, 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 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 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)
December 31,
2021 December 31,
2020
ASSETS
Cash and cash equivalents $ 119,389 $ 99,610
Federal funds sold 271 231
Securities available for sale 245,846 208,380
Loans held for sale 1,146 1,691
Loans, net of allowance for loan losses of $9,320 - 2021 ($7,789 – 2020) 732,088 628,081
Premises and equipment, net 13,115 13,698
Accrued interest receivable 4,193 4,749
Net cash surrender value of life insurance 18,671 16,016
Goodwill 13,422 13,422
Other intangible assets, net 219 255
Other assets 12,794 11,441
TOTAL ASSETS $ 1,161,154 $ 997,574
LIABILITIES
Deposits :
Non-interest bearing $ 262,980 $ 220,786
Interest bearing 711,372 617,512
Total deposits 974,352 838,298
Securities sold under agreements to repurchase and overnight borrowings 20,609 20,083
Accrued expenses and other liabilities 13,930 14,561
Other borrowings 20,000 26,500
Subordinated debentures 34,514 5,155
Total liabilities 1,063,405 904,597
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 – 4,516,377 shares in 2021
(2,301,269 shares in 2020) 11,287 5,748
Additional paid-in capital 14,235 15,416
Retained earnings 71,581 67,741
Accumulated other comprehensive income, net 856 4,362
Unearned Employee Stock Ownership Plan shares (210 ) (290 )
Total shareholders’ equity 97,749 92,977
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,161,154 $ 997,574
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,
2021 2020 2021 2020
Interest income:
Loans, including fees $ 8,535 $ 7,202 $ 32,593 $ 28,377
Federal funds sold and balances with banks 41 33 148 314
Securities:
Taxable 843 643 3,330 2,482
Tax-exempt 269 185 1,069 645
Total interest income 9,688 8,063 37,140 31,818
Interest expense:
Deposits 485 800 2,268 4,025
Other 460 246 1,553 1,116
Total interest expense 945 1,046 3,821 5,141
Net interest income 8,743 7,017 33,319 26,677
Provision for loan losses 450 350 1,500 2,600
Net interest income after provision for loan losses 8,293 6,667 31,819 24,077
Non-interest income:
Service charges on deposit accounts 373 334 1,286 1,373
Trust fees 586 513 2,267 2,048
Net gains on loan sales 381 636 2,293 2,389
Earnings on life insurance assets 184 98 695 383
ATM and debit card fee income 463 394 1,823 1,543
Other 173 236 645 642
Total non-interest income 2,160 2,211 9,009 8,378
Non-interest expense:
Salaries and employee benefits 4,612 4,157 16,492 14,580
Occupancy, net 368 352 1,565 1,519
Equipment 313 300 1,174 1,180
Printing, postage and supplies 100 84 390 386
Telecommunication expenses 90 89 356 451
Professional and outside services 596 423 1,814 1,532
Software maintenance 449 400 1,677 1,552
ATM expenses 177 138 670 578
Other 771 497 2,570 1,888
Total non-interest expense 7,476 6,440 26,708 23,666
INCOME BEFORE INCOME TAXES 2,977 2,438 14,120 8,789
Federal income tax provision 455 414 2,363 1,403
NET INCOME $ 2,522 $ 2,024 $ 11,757 $ 7,386
Basic Earnings Per Common Share $ 0.56 $ 0.44 $ 2.59 $ 1,61
Diluted Earnings Per Common Share 0.56 0.44 2.58 1.61
Dividends Declared Per Common Share 0.12 0.12 0.48 0.46
CONTACT: John H. Castle, CEO
(517) 279-5500
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