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Press Release
SOUTHERN MICHIGAN BANCORP, INC. ANNOUNCES FIRST QUARTER EARNINGS
April 25, 2008
Coldwater, Michigan, April 25, 2008: Southern Michigan Bancorp, Inc. (OTCBB: SOMC.OB) announced net income of $1,201,000 ($0.52 basic and diluted earnings per share) for the three months ended March 31, 2008. This compares to $978,000 ($0.55 basic and diluted earnings per share) for the three months ended March 31, 2007. Financial results for 2008 were influenced by the acquisition of FNB Financial on December 1, 2007. In accordance with the purchase method of accounting, FNB’s results of operations were included in Southern’s consolidated statements of income from the date of acquisition. As a result of the merger, Southern recorded additional net loans of $76.8 million, securities of $40.2 million and additional deposits of $118.6 million at the time of the acquisition.
John H. Castle, Chairman & Chief Executive Officer, remarked, “While we are pleased with our first quarter results, we remain cautious about the balance of 2008. Like many other financial institutions, Southern has felt the impact of the weakened economy on consumers as delinquencies and losses in our mortgage loan portfolio have increased. The decline in local real estate values compounds the problem consumers and financial institutions are facing.”
Southern provided $350,000 for loan losses during the first quarter of 2008. Net charge offs totaled $197,000 for the quarter. Non performing loans increased $2,417,000, or 50% from December 31, 2007.
Net interest income for the 2008 period was $1,132,000 greater than in 2007 due to the additional loans, investments and deposits acquired from FNB.
Non-interest income for the first three months of 2008 was $996,000 greater than for the comparable period in 2007. The increase is attributable to FNB non-interest income and a gain recorded on life insurance proceeds. Non-interest expense for the 2008 period was $1,899,000 greater than for 2007. The increase was largely due to the FNB acquisition. Increases in salaries and benefits occurred resulting from routine salary and wage increases and an increase in the number of employees. Additionally, occupancy, equipment, and printing, postage and supplies, and telecommunication expenses increased primarily as a result of an increase in branch locations. Southern also began to incur costs associated with a core processing system conversion. Additional costs are expected relating to system conversions throughout 2008, as the core processing system, trust accounting system and loan documentation systems are converted.
For the first quarter of 2008, Southern Michigan Bancorp, Inc. attained a return on average assets of 0.99% and a return on average equity of 10.64%, compared to first quarter 2007 results of 1.18% and 13.38%, respectively.
Southern Michigan Bancorp, Inc. is a two bank holding company. Its subsidiary banks are Southern Michigan Bank & Trust and FNB Financial. Its 19 offices throughout southern Michigan provide a broad range of consumer, business and wealth management services throughout the region. For more information, please visit our website, www.smb-t.com.
Southern Michigan Bancorp, Inc.
Unaudited Interim Financial Statements
Consolidated Balance Sheets
(In thousands, except share data)
March 31, |
|
December 31, |
|||
ASSETS |
|||||
Cash |
$ |
3,831 |
|
$ |
4,027 |
Due from banks |
|
8,446 |
|
|
10,443 |
Cash and cash equivalents |
|
12,277 |
|
|
14,470 |
Federal funds sold |
|
12,490 |
|
|
6,449 |
Securities available for sale |
|
75,537 |
|
|
77,515 |
Loans held for sale, net of valuation of -0- in 2008 and 2007 |
|
1,024 |
|
|
624 |
Loans, net of allowance for loan losses of $5,309 - 2008 ($5,156 – 2007) |
|
329,601 |
|
|
330,822 |
Premises and equipment, net |
|
13,431 |
|
|
13,335 |
Accrued interest receivable |
|
2,907 |
|
|
3,387 |
Net cash surrender value of life insurance |
|
9,254 |
|
|
10,015 |
Goodwill |
|
13,422 |
|
|
13,422 |
Other intangible assets |
|
2,998 |
|
|
3,091 |
Other assets |
|
7,508 |
|
|
7,048 |
Total Assets |
$ |
480,449 |
|
$ |
480,178 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|||||
Liabilities |
|
|
|
|
|
Deposits |
|
|
|
|
|
Non-interest bearing |
$ |
56,878 |
|
$ |
57,027 |
Interest bearing |
|
343,497 |
|
|
342,142 |
Total deposits |
|
400,375 |
|
|
399,169 |
Securities sold under agreements to repurchase and overnight borrowings |
|
8,821 |
|
|
9,776 |
Accrued expenses and other liabilities |
|
4,917 |
|
|
5,077 |
Other borrowings |
|
14,120 |
|
|
14,753 |
Subordinated debentures |
|
5,155 |
|
|
5,155 |
Total Liabilities |
|
433,388 |
|
|
433,930 |
|
|
|
|
|
|
Common stock subject to repurchase obligation in |
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
|
Preferred stock, 100,000 shares authorized; none issued or outstanding |
|
- |
|
|
- |
Common stock, $2.50 par value: |
|
|
|
|
|
Authorized - 4,000,000 shares |
|
|
|
|
|
Issued – 2,307,924 shares in 2008 and 2007 |
|
|
|
|
|
Outstanding (other than ESOP shares) – 2,208,170 shares in 2008 |
|
5,520 |
|
|
5,539 |
Additional paid-in capital |
|
17,316 |
|
|
17,087 |
Retained earnings |
|
22,369 |
|
|
21,629 |
Accumulated other comprehensive income, net |
|
774 |
|
|
122 |
Unearned restricted stock compensation |
|
(51 |
) |
|
(55 |
Unearned Employee Stock Ownership Plan shares |
|
(712 |
) |
|
(103 |
Total Shareholders’ Equity |
|
45,216 |
|
|
44,219 |
Total Liabilities and Shareholders’ Equity |
$ |
480,449 |
|
$ |
480,178 |
Southern Michigan Bancorp, Inc.
Consolidated Statements of Income (Unaudited)
(In thousands, except per share data)
Three Months Ended March 31, |
|||||
2008 |
|
2007 |
|||
Interest income: |
|||||
Loans, including fees |
$ |
6,144 |
|
$ |
5,001 |
Securities: |
|
|
|
|
|
Taxable |
|
638 |
|
|
250 |
Tax-exempt |
|
243 |
|
|
152 |
Other |
|
127 |
|
|
167 |
|
|
1,008 |
|
|
569 |
Total interest income |
|
7,152 |
|
|
5,570 |
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
Deposits |
|
2,152 |
|
|
1,817 |
Other |
|
298 |
|
|
183 |
Total interest expense |
|
2,450 |
|
|
2,000 |
Net Interest Income |
|
4,702 |
|
|
3,570 |
Provision for loan losses |
|
350 |
|
|
200 |
Net Interest Income after Provision for Loan Losses |
|
4,352 |
|
|
3,370 |
|
|
|
|
|
|
Non-interest income: |
|
|
|
|
|
Service charges on deposit accounts |
|
659 |
|
|
430 |
Trust fees |
|
288 |
|
|
175 |
Net gains on security calls and sales |
|
13 |
|
|
- |
Net gains on loan sales |
|
119 |
|
|
105 |
Earnings on life insurance assets |
|
88 |
|
|
68 |
Gain on life insurance proceeds |
|
371 |
|
|
- |
Income and fees from automated teller machines |
|
148 |
|
|
75 |
Other |
|
264 |
|
|
101 |
|
|
1,950 |
|
|
954 |
Non-interest expense: |
|
|
|
|
|
Salaries and employee benefits |
|
2,687 |
|
|
1,876 |
Occupancy, net |
|
387 |
|
|
208 |
Equipment |
|
298 |
|
|
181 |
Printing, postage and supplies |
|
151 |
|
|
87 |
Telecommunication expenses |
|
108 |
|
|
54 |
Professional and outside services |
|
275 |
|
|
135 |
Software maintenance |
|
134 |
|
|
57 |
Amortization of other intangibles |
|
93 |
|
|
- |
Other |
|
762 |
|
|
398 |
|
|
4,895 |
|
|
2,996 |
Income before income taxes |
|
1,407 |
|
|
1,328 |
Federal income taxes |
|
206 |
|
|
350 |
Net Income |
$ |
1,201 |
|
$ |
978 |
Basic Earnings Per Common Share |
$ |
0.52 |
|
$ |
0.55 |
Diluted Earnings Per Common Share |
$ |
0.52 |
|
$ |
0.55 |
Copyright © 2009 Southern Michigan Bank & Trust, Member FDIC, All Rights Reserved