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): November 22, 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 November 22, 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 "focus," "position," "anticipation," "future," "likely," "opportunities," "prepared," "strategies" and "will" 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 |
Letter mailed November 22, 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: November 22, 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 November 22, 2011. |
EXHIBIT 99.1
To Our Shareholders:
I am pleased to announce that Southern Michigan Bancorp, Inc. reported net income of $887,000, or $0.38 per share, for the third quarter of 2011. Our results for the period represent an increase of 2 percent over the net income of $870,000, or $0.38 per share, reported for the third quarter of 2010. Through the first nine months of 2011, Southern earned $2,397,000, or $1.03 per share, resulting in an annualized return on average assets of 0.64 percent and a return on average equity of 6.46 percent.
Improvements in asset quality enabled us to reduce our provision for loan losses to $375,000 for the third quarter of 2011, compared with $425,000 in provision expense for the same period one year ago. Net loan charge-offs totaled $379,000 during the third quarter compared with $423,000 for the third quarter 2010. With a reserve for loan losses as of September 30, 2011 of $5,398,000, or 1.72 percent of gross loans, we are well positioned to respond to changes in local business and economic conditions. Equally important, loan delinquencies as a percentage of total loans at September 30, 2011 declined by 26 basis points to 2.27 percent compared with 2.53 percent a year ago.
Although unemployment remains at unacceptably high levels in all of our markets, growth in our commercial and retail banking lines of business may be signs of modest improvement in local economic conditions. Commercial loan totals during the third quarter of 2011 increased by $8 million. Gross loans exceeded $313 million as of September 30, 2011. In addition, growth in residential mortgage lending resulted in an increase in fees generated through loan sales to $831,000 from $684,000 for the same period a year ago.
Total deposits grew substantially during the third quarter of 2011 to $429.3 million, an increase of more than 8 percent over second quarter levels of $397.1 million. Total assets as of September 30, 2011 stood at $515.4 million, a year-to-date increase of 4.4 percent over December 31, 2010 levels of $493.9 million.
Our relentless focus on becoming more efficient without sacrificing customer service enabled us to reduce operating expenses for the first three quarters of 2011 by $190,000 as compared to the same period in 2010. The improvements in both asset quality and operating efficiencies offset declines in net interest income and non-interest income compared with third quarter 2010 results.
The uncertainties created by a sluggish economy and a burdensome regulatory environment make planning for the Bank all the more challenging. However, our directors and management team remain committed to the core strategies that have served Southern well since the onset of the economic crisis more than three years ago. They include:
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Personalizing our service as much as possible to differentiate Southern from its much larger regional bank competitors; |
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Serving business and individual borrowers in our communities while maintaining prudent underwriting and competitive pricing standards; and |
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Providing solid operating results on a relative basis while preserving our financial strength and stability. |
Southern is prepared to meet future financial and non-financial challenges that will affect our products, services and competition. We are well positioned to grow within our existing markets, and to take advantage of growth opportunities in new markets as they present themselves. Your continued support is appreciated.
Sincerely,
/s/ John H. Castle
John H. Castle
Chairman and Chief Executive Officer