COLDWATER, MI (WTVB) - Southern Michigan Bancorp, Inc. (OTCQB: SOMC) reported net income of $4,499,000 for 2013 compared to $4,350,000 for 2012, an increase of $149,000, or 3.4%. Earnings per share were $1.88 for 2013 compared to $1.84 in 2012. Fourth quarter 2013 net income was $1,158,000, or $0.49 per share, compared to $1,167,000, or $0.49 per share in the fourth quarter of 2012.
“As the result of several strategic initiatives throughout 2013 we are pleased to announce record earnings for the year,” said John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, Inc. “The core system conversion was completed in the third quarter; loans reached an all-time high of $386.0 million as of year-end and we are seeing continued improvements in asset quality metrics including loan delinquencies, non-performing loans and net charge-offs.”
Castle continued, “2014 will be another challenging year for all community banks. However, we remain confident that we are positioned to be successful in meeting both the economic and regulatory challenges.”
Total consolidated assets at December 31, 2013 were $539.5 million compared to $528.9 million at December 31, 2012.
Southern provided $750,000 for loan losses in 2013, with an allowance for loan losses at December 31, 2013 of $5,238,000, or 1.36% of loans. This compared to a provision for loan losses of $1,350,000 for 2012, with an allowance for loan losses at December 31, 2012 of $5,455,000, or 1.48% of loans. The decrease in the provision for loan losses resulted from a reduction in net charge-offs, reduced delinquencies and a reduction in specific reserves on impaired loans offset by loan growth in the commercial loan portfolio. Net charge-offs for 2013 totaled $967,000, or .25% of loans, down from $1,307,000, or .35% of loans in 2012.
Net interest income increased $593,000, or 3.5% in 2013 compared to 2012. Interest expense decreased $669,000 as higher priced deposits and other borrowings decreased.
Non-interest income for 2013 was slightly higher at $7.24 million compared to $7.19 million in 2012. The increase was primarily the result of increased service charge income, gains on the sale of securities and ATM and debit card fee income offset by a 21.6% decrease in gain on loans sold.
The annualized return on average assets for both 2013 and 2012 was 0.84%. The annualized return on average equity was 8.01% for 2013 compared to 8.09% for 2012.
Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust. It operates 15 branches within Branch, Calhoun, Hillsdale and St. Joseph Counties, providing a broad range of consumer, business and wealth management services throughout the region.