Strong first quarter results at Southern Michigan Bancorp, Inc. reflect a 104.1-percent increase in first quarter net income as compared to a year ago for the Coldwater-based institution, now reporting record assets and more.
Southern Michigan Bancorp reports first quarter net income came in at $3,088,000, representating a 104.1-percent increase compared to net income of $1,513,000 for the first quarter of 2020. Earnings per share for the first quarter of 2021 increased to $1.35 per share, up $0.69 per share, from $0.66 per share for the first quarter of 2020.
As of March 31, 2021, total consolidated assets were at a record high of $1.076 billion compared to $997.6 million on December 31, 2020. As of March 31, 2021, total loans and deposits also were at record levels totaling $644.4 million and $924.5 million, respectively.
John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc., says, “We are pleased with the strong results posted in the first quarter. Our continued focus on meeting our customers’ needs has resulted in over 700 additional Paycheck Protection Program loans being processed for our customers totaling over $40 million. In addition, the commercial loan pipeline is robust with funding expected to start in the second quarter.” Castle adds, “The successful closing of the $30 million subordinated debt offering this month provides capital to support additional growth in the bank.”
The allowance for loan losses totaled $7,818,000, or 1.21-percent of loans at March 31, 2021. Net loan loss recoveries totaled $29,000 for the first quarter of 2021, compared to net loan charge-offs of $7,000 during the first quarter of 2020. Loan delinquencies dropped from 0.72-percent of gross loans on December 31, 2020 to 0.26-percent of gross loans on March 31, 2021. Likewise, total non-performing assets dropped from .49-percent of total assets on December 31, 2020 to 0.17-percent of total assets on March 31, 2021. No provision for loan loss expense was required during the first quarter of 2021. This contrasts with $1.0 million of provision for loan loss expense during the first quarter of 2020.
The annualized return on average assets for the three-month periods ended March 31, 2021 and March 31, 2020 were 1.19-percent and 0.73-percent respectively. The annualized return on average equity was 13.29-percent for the first quarter of 2021 compared to 7.06-percent for the first quarter of 2020. The tax equivalent net interest margin for the three-month period ending March 31, 2021 was 3.35-percent compared to 3.49-percent for the same period of 2020.
Earlier this month the Board of Directors of Southern Michigan Bancorp announced the declaration of a one hundred percent stock dividend payable on May 14, 2021 for shareholders of record April 26, 2021. At that time, Castle said, “The declaration of this stock dividend is the result of Southern Michigan’s strong financial condition and the optimistic outlook for the ongoing operation of the company,” adding, “The Board and management of Southern Michigan are especially appreciative of shareholder support over the past several years that have led to Southern’s growth in earnings and its increase in franchise value.”
Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust, and 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.