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Southern Michigan Bancorp, Inc. Announces First Quarter 2020 Earnings

Written by Customer Service on . Posted in Earnings Releases And Operating Results.

COLDWATER, Mich., April 29, 2020 (GLOBE NEWSWIRE) — Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced first quarter net income of $1,513,000, a 21.2% decrease compared to net income of $1,920,000 for the first quarter of 2019. Earnings per share for the first quarter of 2020 were $0.66 per share, a decrease of 20.5% compared to $0.83 per share for the first quarter of 2019.
John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc., stated, “These are unprecedented times. We are proud of the work our employees are doing to help our customers and each other through this pandemic.”As of March 31, 2020, total consolidated assets were $828.3 million compared to $809.7 million at December 31, 2019.“While our asset quality metrics remained strong at March 31, 2020, the overall impact COVID-19 will have on the economy and our customers is unknown. Given this uncertainty, we believed it prudent to increase our provision for loan losses during the quarter,” Castle added.As a result of these economic conditions, Southern provided $1,000,000 for provision expense during the first quarter of 2020, raising the allowance for loan losses to $6,177,000, or 1.10% of loans. This contrasts with $150,000 of provision for loan losses during the first quarter of 2019. The allowance for loan losses totaled $5,264,000, or 0.96% of loans at March 31, 2019. Net charge-offs totaled $7,000 for the first quarter of 2020, compared to $3,000 during the first quarter of 2019.The annualized return on average assets for the three-month periods ended March 31, 2020 and March 31, 2019 were 0.73% and 1.01% respectively. The annualized return on average equity was 7.06% for the first quarter of 2020 compared to 10.03% for the first quarter of 2019. The tax equivalent net interest margin for the three-month period ending March 31, 2020 was 3.49% compared to 3.72% for the same period of 2019.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 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. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

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