UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 24, 2011
SOUTHERN MICHIGAN BANCORP, INC.
(Exact Name of Registrant as
Specified in Charter)
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Michigan |
000-49722 |
38-2407501 |
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51 West Pearl Street |
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Registrant's telephone number,
including area code: (517) 279-5500
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).
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Item 7.01. |
Regulation FD Disclosure. |
On May 24, 2011, Southern Michigan Bancorp, Inc. mailed to its shareholders the letter furnished with this report as Exhibit 99.1, which is here incorporated by reference. This Report and the Exhibit are furnished to, and not filed with, the Commission.
Forward-Looking Statements
The letter 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 "continue", "opportunity", "beginning", "signs", "emerging", "may", "ultimately", "remainder", "beyond", "likely", "explore" and variations of such words and similar expressions. Such statements are based upon current beliefs and expectations and involve substantial risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These statements include, among others, statements related to future loan demand, the future impact of current and future laws and regulations, and the impact of our initiatives to increase efficiencies. All statements with references to future time periods are forward-looking. Management's determination of the provision and allowance for loan losses and other accounting estimates involves judgments that are inherently forward-looking. The future effect of changes in the real estate, 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. Actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. We undertake no obligation to update or revise our forward-looking statements to reflect developments that occur or information obtained after the date of this report.
Risk factors include, but are not limited to, the risk factors described in "Item 1A - Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2010. These and other factors are representative of the risk factors that may emerge and could cause a difference between an ultimate actual outcome and a preceding forward-looking statement.
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Item 9.01. |
Financial Statements and Exhibits. |
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(d) |
Exhibits: |
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99.1 |
Letter mailed May 24, 2011. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Date: May 24, 2011 |
SOUTHERN MICHIGAN BANCORP, INC. |
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By |
/s/ Danice L. Chartrand |
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Danice L. Chartrand |
EXHIBIT INDEX
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Exhibit |
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99.1 |
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Letter mailed May 24, 2011. |
EXHIBIT 99.1
To Our Shareholders:
I am pleased to announce that Southern Michigan Bancorp, Inc. reported net income of $748,000, or $.32 per share, for the first quarter of 2011. Our results for the period represent an increase of 6.6 percent over the net income of $702,000, or $.30 per share, reported for the first quarter of 2010.
Southern's quarterly net income marked its eighth consecutive profitable quarter. This is especially noteworthy in light of the negative impact the economic downturn has had on balance sheets and earnings of financial institutions throughout Michigan and the country over the past several years.
For the quarter, our balance sheet grew from $493.9 million in total assets as of year-end 2010 to $502.4 million as of March 31, 2011, a modest increase of $8.5 million and the highest level of total assets in Southern's history. Total deposits increased $7.7 million during the first quarter to $417.6 million. Total loans decreased by $3.7 million during the quarter to $305.8 million.
Our earnings are being driven by continued improvements in asset quality, maintaining our historically solid net interest margin, managing expenses and focusing on fee generation opportunities. Our annualized return on average assets for both three-month periods ending March 31, 2011 and 2010 was .60 percent. The annualized return on average equity was 6.19 percent for the first quarter of 2011, compared with 6.08 percent for the first quarter of 2010.
For the first quarter of 2011, our provision for loan losses totaled $125,000, a reduction from $200,000 incurred during the same period last year. Even with the provision expense reduction, our reserve for loan losses exceeds $5.5 million, or 1.82 percent of total loans, which is comparable to March 31, 2010 reserve levels of 1.83 percent of total loans. Net charge-offs for the first quarter of this year totaled $243,000, a reduction from the $331,000 in net charge-offs for the first quarter of 2010.
Southern's historically strong net interest margin declined to 3.57 percent from 4.07 percent for the same period last year, principally due to overall reductions in loan balances and deposit growth resulting in higher cash balances on our balance sheet. However, we are beginning to see signs of emerging quality loan demand that ultimately may have a positive impact on our net interest margin. Non interest income grew during the quarter, led by net gains on loan sales of $317,000 compared with $120,000 a year ago. Revenues from ATM's, interchange transactions, trust and service charges also contributed to improvements in non interest income totals.
One of management's key challenges throughout the remainder of 2011 and beyond will be offsetting the significant impact of new regulations that are likely to reduce sources of non interest income while increasing compliance costs. As a result, we will continue to explore initiatives that will enable us to remain as efficient as possible without sacrificing commitments to high levels of customer service. For example, we are evaluating
enhancements to our on-line banking services, utilizing social media to expand potential points of contact with businesses and retail banking clients and employing technology to speed up opening new accounts, evaluating loan requests and serving branch customers.
Your continued support is appreciated.
Sincerely,
/s/ John H. Castle
John H. Castle
Chairman & Chief Executive Officer