Despite the unique challenges presented by the pandemic and lower annual net income, Coldwater-based Southern Michigan Bancorp, holding company for Southern Michigan Bank & Trust, saw their fourth quarter numbers stage a comeback.
Southern Michigan Bancorp, Inc. has reported net income of $7,386,000 for 2020 as compared to $8,622,000 for 2019. Earnings per share were $3.21 for 2020 compared to $3.74 for 2019. There was a bounce back at the end of the year, however, as the holding company reports fourth quarter 2020 net income clocked in at $2,024,000, or $0.88 per share, as compared to $1,836,000, or $0.80 per share for the same quarter in 2019.
John H. Castle, Chairman and Chief Executive Officer of Southern Michigan Bancorp, says, “Southern finished 2020 with solid financial performance despite the unique challenges presented by COVID-19,” and adds, “Net income was a record for the fourth quarter, 10.2-percent higher than the previous fourth quarter high. Total assets, loans and deposits all expanded to new record highs at year end 2020.”
Total consolidated assets at December 31, 2020 increased 23.2-percent, reaching $997.6 million compared to $809.7 million at December 31, 2019. Loan totals grew 13.0-percent, from December 31, 2019 levels of $562.9 million to $635.9 million. Deposits also increased totaling $838.3 million at December 31, 2020, an increase of $182.5 million or 27.8-percent, as compared to year end 2019.
Castle went on to say, “While we have not identified any specific asset quality concerns, we have elected to increase provision expense and the allowance for loan losses through December 31, 2020 due to the economic uncertainty caused by the pandemic.”
Southern provided $2.6 million for loan losses in 2020, with an allowance for loan losses at December 31, 2020 of $7,789,000, or 1.22-percent of loans. That compared to a provision for loan losses of $225,000 for 2019, with an allowance for loan losses at December 31, 2019 of $5,184,000, or 0.92-percent of loans. Net loan loss recoveries totaled $5,000 for 2020 compared to net loan charge offs of $158,000 for 2019.
The return on average assets for 2020 was 0.82-percent compared to 1.09-percent for 2019. The return on average equity was 8.36-percent for 2020 compared to 11.21-percent for 2019. The tax equivalent net interest margins for 2020 and 2019 were 3.22-percent and 3.66-percent, respectively.
Southern Michigan Bancorp, Inc. is the bank holding company and parent to Southern Michigan Bank & Trust. They operate 13 branches within Branch, Calhoun, Hillsdale, Kalamazoo and St. Joseph Counties across the southern tier of Michigan, providing a broad range of consumer, business and wealth management services throughout the region.
