Southern Michigan Bancorp, Inc. Announces Second Quarter 2015 Earnings

COLDWATER, Mich., July 21, 2015 /PRNewswire/ -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced second quarter 2015 net income of $1,880,000, or $0.79 per share, compared to net income of $1,146,000, or $0.48 per share, for the second quarter of 2014.  Southern's net income for the six month period ended June 30, 2015 increased 37.4% to $3,089,000, or $1.29 per share, compared to net income of $2,248,000, or $0.93 per share, for the same six month period a year ago.   

During the second quarter of 2015 Southern recorded $555,000 of tax free income from death benefits on bank owned life insurance policies.  Excluding this income, net income for the three and six month periods ended June 30, 2015 totaled $1,325,000 and $2,534,000, respectively, an increase of 15.62% and 12.72% over the respective three and six month prior year periods.

During the second quarter of 2015 the Board of Directors authorized the termination of the previously frozen defined benefit pension plan.  Southern recorded $625,000 of pension expense through June 30, 2015 to ensure the plan will be fully funded as of the anticipated termination date of September 1, 2015.

Total consolidated assets at June 30, 2015 were $557.0 million compared to $543.3 million at December 31, 2014. 

Southern provided $150,000 for loan losses during the six month period ended June 30, 2015 resulting in an allowance for loan losses of $5,196,000, or 1.26% of loans.  This compared to $225,000 of provision for loan losses expense for the same six month period of 2014.   Net charge offs totaled $131,000 or annualized 0.06% of loans for the six month period ending June 30, 2015, compared to $227,000 for the same six month period of 2014. 

The annualized return on average assets for the six month periods ended June 30, 2015 and 2014 was 1.11% and 0.81%, respectively.  The annualized return on average equity was 10.03% for the first six months of 2015 compared to 7.74% for the same period of 2014.  The tax equivalent net interest margin for the six month periods ending June 30, 2015 and 2014 was 3.92% and 3.79%, respectively.

John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc. stated, "We are pleased to report strong core earnings, heightened mortgage lending activity and favorable asset quality metrics which are contributing to our overall success."

Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust.  It operates 14 branches within Branch, Calhoun, Hillsdale and St. Joseph Counties, and a loan production office in Steuben County, providing a broad range of consumer, business and wealth management services throughout the region. 

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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.

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SOURCE Southern Michigan Bancorp, Inc.

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