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): August 5, 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. |
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 "focus," "position," "emerge," "anticipation," "began," "future," "looking ahead," "likely," "opportunities," "believe" 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 the future impact of current and future laws and regulations, future changes in the banking industry, future profitability, the impact of our initiatives to reduce expenses, and future opportunities to enhance shareholder value. 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 |
Shareholder letter. |
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: August 5, 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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Shareholder letter. |
EXHIBIT 99.1
To Our Shareholders:
I am pleased to announce that Southern Michigan Bancorp, Inc. earned $762,000, or $.33 per share, for the second quarter ended June 30, 2011. This represents an increase of 1.9 percent over first quarter 2011 net income of $748,000, and a decline from the $803,000 of net income earned during the second quarter of 2010. For the first six months of 2011, net income rose to $1,510,000, or $.65 per share, from $1,505,000, or $.65 per share, earned during the first six months of 2010.
Southern's financial results are noteworthy in light of high unemployment, limited lending opportunities, regulatory conditions and persistent overall economic instability. Our results were attained through deliberate focus on lending discipline, controlling expenses and remaining attentive to our customers' needs.
Total assets, for the first six months of 2011, declined to $481.3 from $493.9 million as of December 31, 2010. This was largely impacted by a reduction in rate sensitive deposits totaling $12.8 million. However, core transaction deposits, including business and personal checking relationships, rose by more than $1 million through the first six months of 2011 to more than $60 million.
Total loans as of June 30, 2011 stood at $305.6 million, a slight reduction from the year-end 2010 total of $309.5 million. Loan delinquencies, however, declined to 2.41 percent of total loans from 3.39 percent for the same date last year. Non-performing loans, including non-accrual loans and loans past due 90 days, also declined by more than $1.8 million from a year ago. Net charge-offs for the second quarter of 2011 totaled $549,000, and for the first six months of 2011 were $792,000, as compared with $368,000 and $699,000, respectively, for the same periods last year. Our second quarter provision expense of $375,000 enabled Southern to maintain a reserve for loan losses of more than $5.4 million, or 1.77 percent of total loans. The steady improvement in loan portfolio metrics positions us to emerge from this challenging economic period as a stronger, more profitable organization.
Several months ago, in anticipation of today's challenging business climate, Southern began implementing several expense reduction initiatives to align future operating costs with revenue projections. The impact of those strategies resulted in an eight percent reduction in non-interest expenses for the second quarter of 2011 compared with the total for the same period of 2010. Non-interest income declined slightly year-over-year, due in part to the impact of new banking regulations affecting charges for overdrafts on checking accounts and other fees. However, the declines were offset by a 15 percent growth in trust revenues, which totaled more than $568,000 for the first six months of 2011.
For the first six months of 2011, Southern's annualized return on average assets totaled .61 percent and the annualized return on average equity was 6.17 percent. With total shareholders' equity of $49.7 million as of June 30, 2011, our Tier 1 and Total Risk-Based capital ratios of 12.8 and 14.0 percent, respectively, are strong.
Looking ahead to the remaining six months of 2011 and into 2012, we expect more changes in the banking industry that are likely to have a profound impact on all financial institutions. We believe that "sticking to the basics" will enable us to take advantage of opportunities to enhance shareholder value that may come our way in the future. Thank you for your continued support.
Sincerely,
/s/ John H. Castle
John H. Castle
Chairman and Chief Executive Officer