Southern Michigan Bancorp, Inc. Announces Second Quarter 2025 Earnings

Rhea-AI Summary

Southern Michigan Bancorp (OTC Pink: SOMC) reported strong Q2 2025 financial results, with net income reaching $3.24 million ($0.70 per share), marking a significant 30.14% increase from Q2 2024's $2.49 million. For H1 2025, the company achieved $6.28 million in net income ($1.36 per share), up 21.64% year-over-year.

Key performance metrics showed improvement, with H1 2025 return on average assets at 0.81% (up from 0.71%) and return on average equity at 11.31% (up from 10.34%). The tax equivalent net interest margin expanded to 3.20% from 2.94%. Credit quality remained robust with non-performing loans at just 0.01% of total loans, and the allowance for credit losses stood at 1.11% of total loans.

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COLDWATER, Mich., July 23, 2025 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced second quarter 2025 net income of $3,238,000, or $0.70 per share, an increase of $750,000, or 30.14%, compared to net income of $2,488,000, or $0.55 per share, for the second quarter of 2024. For the first six months of 2025, Southern earned $6,284,000, or $1.36 per share, an increase of $1,118,000, or 21.64%, compared to net income of $5,166,000, or $1.14 per share, for the same six-month period one year ago.

The annualized return on average assets for the six-month periods ended June 30, 2025, and June 30, 2024, was 0.81% and 0.71%, respectively. The annualized return on average equity was 11.31% for the first six months of 2025 compared to 10.34% for the first six months of 2024. The tax equivalent net interest margin for the six-month period ending June 30, 2025 was 3.20% compared to 2.94% for the same period of 2024.

John R. Waldron, President and Chief Executive Officer of Southern Michigan Bancorp, Inc., stated, “We are pleased to report another solid quarter. Our earnings trend remained positive, and credit quality remained strong. Our continued investment in market expansion and staff translated into record loans and total assets at quarter end.”  

The allowance for credit losses totaled $13,224,000, or 1.11% of loans on June 30, 2025. Net loan charge-offs totaled $15,000 for the first six months of 2025, compared to $11,000 for the first six months of 2024. Non-performing loans as a percentage of total loans were 0.01% as of June 30, 2025, and 0.08% as of December 31, 2024.  

Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust. It operates 18 offices within Branch, Calhoun, Hillsdale, Jackson, 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 credit losses and other accounting estimates, such as the carrying value of goodwill, other real estate owned, mortgage servicing rights and the fair value of investment securities, involves judgments that are inherently forward-looking. 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, extent, 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 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)
		June 30, 2025				December 31, 2024
ASSETS
Cash and cash equivalents		$	59,176			$	73,737
Federal funds sold			257				259
Securities available for sale, at fair value			160,961				159,320
Securities held-to-maturity, at amortized cost			68,398				60,454
Loans held-for-sale			180				995
Loans, net of allowance for credit losses of $13,224 – 2025, $12,782 - 2024			1,180,162				1,103,652
Premises and equipment, net			25,502				25,600
Net cash surrender value of life insurance			28,050				23,139
Goodwill			13,422				13,422
Other intangible assets, net			93				111
Other assets			35,062				35,866
TOTAL ASSETS		$	1,571,263			$	1,496,555
LIABILITIES
Deposits:
Non-interest bearing		$	233,369			$	223,583
Interest bearing			1,070,746				1,028,212
Total deposits			1,304,115				1,251,795
Securities sold under agreements to repurchase and overnight borrowings			818				1,560
Accrued expenses and other liabilities			19,962				18,355
Other borrowings			97,900				82,900
Subordinated debentures			34,756				34,722
Total liabilities			1,457,551				1,389,332
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 – 4,627,809 shares in 2025, 4,577,107 shares in 2024			11,565				11,438
Additional paid-in capital			13,769				13,438
Retained earnings			102,264				97,462
Accumulated other comprehensive loss			(13,886	)			(15,115	)
Total shareholders’ equity			113,712				107,223
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,571,263			$	1,496,555

Southern Michigan Bancorp, Inc.
condensed consolidated statements of income (unaudited)

(In thousands, except per share data)

	Three Months Ended June 30,								Six Months Ended June 30,
	2025				2024				2025				2024
Interest income:
Loans, including fees	$	18,268			$	15,838			$	35,043			$	31,304
Federal funds sold and balances with banks		766				1,058				1,766				2,317
Securities:
Taxable		1,530				1,565				2,937				3,048
Tax-exempt		377				296				695				595
Total interest income		20,941				18,757				40,441				37,264
Interest expense:
Deposits		7,553				7,269				14,856				14,088
Other		1,301				1,503				2,585				3,130
Total interest expense		8,854				8,772				17,441				17,218
Net interest income		12,087				9,985				23,000				20,046
Provision for credit losses		500				236				664				236
Net interest income after provision for credit losses		11,587				9,749				22,336				19,810
Non-interest income:
Service charges on deposit accounts		397				407				803				831
Trust fees		786				659				1,525				1,300
Net gains on loan sales		274				141				494				237
Earnings on life insurance assets		207				165				578				329
ATM and debit card fee income		484				467				928				891
Other		213				200				402				432
Total non-interest income		2,361				2,039				4,730				4,020
Non-interest expense:
Salaries and employee benefits		6,220				5,330				11,993				10,626
Occupancy, net		571				497				1,186				996
Equipment		501				409				988				833
Professional and outside services		596				459				1,048				1,045
Software maintenance		691				598				1,349				1,190
ATM expenses		236				210				472				399
Printing, postage, and supplies		104				128				232				289
Telecommunication expenses		76				78				148				165
Other		1,101				1,036				2,131				1,988
Total non-interest expense		10,096				8,745				19,547				17,531
INCOME BEFORE INCOME TAXES		3,852				3,043				7,519				6,299
Federal income tax provision		614				555				1,235				1,133
NET INCOME	$	3,238			$	2,488			$	6,284			$	5,166
Basic Earnings Per Common Share	$	0.70			$	0.55			$	1.36			$	1.14
Diluted Earnings Per Common Share		0.70				0.55				1.36				1.14
Dividends Declared Per Common Share		0.16				0.15				0.32				0.30

CONTACT: John R. Waldron, President and CEO
(517) 279-5500