Southern Michigan Bancorp, Inc. Announces Fourth Quarter and Full Year 2020 Earnings

COLDWATER, Mich., Feb. 12, 2021 (GLOBE NEWSWIRE) — Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) reported net income of $7,386,000 for 2020 compared to $8,622,000 for 2019.   Earnings per share were $3.21 for 2020 compared to $3.74 for 2019. Fourth quarter 2020 net income was $2,024,000, or $0.88 per share, compared to $1,836,000, or $0.80 per share for the fourth quarter of 2019.
Total consolidated assets at December 31, 2020 increased 23.2%, reaching $997.6 million compared to $809.7 million at December 31, 2019.   Loan totals grew 13.0%, from December 31, 2019 levels of $562.9 million to $635.9 million. Deposits also increased totaling $838.3 million at December 31, 2020, an increase of $182.5 million or 27.8 percent, as compared to year end 2019.“Southern finished 2020 with solid financial performance despite the unique challenges presented by COVID-19,” commented John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc., continuing, “Net income was a record for the fourth quarter, 10.2% higher than the previous fourth quarter high. Total assets, loans and deposits all expanded to new record highs at year end 2020.”Castle continued, “While we have not identified any specific asset quality concerns, we have elected to increase provision expense and the allowance for loan losses through December 31, 2020 due to the economic uncertainty caused by the pandemic.”Southern provided $2.6 million for loan losses in 2020, with an allowance for loan losses at December 31, 2020 of $7,789,000, or 1.22% of loans. This compared to a provision for loan losses of $225,000 for 2019, with an allowance for loan losses at December 31, 2019 of $5,184,000, or 0.92% of loans. Net loan loss recoveries totaled $5,000 for 2020 compared to net loan charge offs of $158,000 for 2019.The return on average assets for 2020 was 0.82% compared to 1.09% for 2019. The return on average equity was 8.36% for 2020 compared to 11.21% for 2019. The tax equivalent net interest margins for 2020 and 2019 were 3.22% and 3.66%, 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.