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SOUTHERN MICHIGAN BANCORP INC
Symbol	SOMC
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Southern Michigan Bancorp, Inc. Announces Third Quarter 2026 Earnings

2026-10-28 07:45 ET - News Release

COLDWATER, Mich., Oct. 28, 2026 (GLOBE NEWSWIRE) -- Southern Michigan Bancorp, Inc. (OTC Pink: SOMC) announced third quarter 2026 net income of $3,274,000, or $0.70 per share, an increase of $255,000, or 8.45%, compared to net income of $3,019,000, or $0.65 per share, for the third quarter of 2025. For the first nine months of 2026, Southern earned $9,667,000, or $2.06 per share, an increase of $364,000, or 3.91%, compared to net income of $9,303,000, or $2.01 per share, for the same nine-month period one year ago.

Southern’s annualized return on average assets was 0.76% and 0.79% for the nine-month periods ended September 30, 2026, and September 30, 2025, respectively. The annualized return on average equity was 10.25% for the first nine months of 2026 compared to 11.00% for the first nine months of 2025. The tax equivalent net interest margin was 3.33% for the nine months of 2026 compared to 3.21% for the same period of 2025.

The allowance for credit losses totaled $14,270,000, or 1.14% of loans on September 30, 2026. Net loan charge-offs totaled $1,650,000 for the first nine months of 2026, compared to $29,000 for the first nine months of 2025. Non-performing assets as a percentage of total assets were 0.28% as of September 30, 2026, and 0.96% as of December 31, 2025.

John H. Castle, Chairman and Interim Chief Executive Officer of Southern Michigan Bancorp, Inc., stated, “Third-quarter earnings were solid, and we made significant progress in reducing non-performing assets. We also achieved record levels of both deposits and total assets at quarter-end. As we shared in our press release, John Waldron has resigned as President and CEO of Southern Michigan Bancorp effective October 7, 2026. I am returning as Interim CEO alongside Kurt Miller as Interim President, while we search for a new CEO and President. Even though Kurt and I retired in August 2024, we have continued to hold leadership positions on the Board and actively advise the bank’s strategic direction. We both look forward to overseeing Southern’s day-to-day operations throughout the search process.”

Southern Michigan Bancorp, Inc. is a bank holding company and the parent company of Southern Michigan Bank & Trust. It operates 18 offices within Branch, Calhoun, Hillsdale, Jackson, Kalamazoo and St. Joseph Counties providing a broad range of consumer, business and wealth management services throughout the region.

This press release 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 “expected,” “begin,” and other similar words or expressions. All statements with reference to a future time period are forward-looking. Management’s determination of the provision and allowance for credit losses and other accounting estimates, such as the carrying value of goodwill, other real estate owned, mortgage servicing rights and the fair value of investment securities, involves judgments that are inherently forward-looking. The future effect of changes in the 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. Therefore, actual results and outcomes may materially differ from what may be expressed in or implied by such forward-looking statements. Southern Michigan Bancorp, Inc., does not update forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.

SOUTHERN MICHIGAN BANCORP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except share data)
	September 30, 2026			December 31, 2025
ASSETS
Cash and cash equivalents	$	153,466		$	110,126
Certificates of deposit in other banks		4,500			250
Securities available for sale, at fair value		150,240			156,220
Securities held-to-maturity, at amortized cost		64,377			62,471

Loans held-for-sale		949			214
Loans, net of allowance for credit losses of $14,270 – 2026, $15,553 - 2025		1,240,961			1,257,855
Premises and equipment, net		25,536			25,188
Net cash surrender value of life insurance		36,749			28,506
Goodwill		13,422			13,422
Other intangible assets, net		48			75
Other real estate owned		1,610			3,689
Other assets		39,158			32,461
TOTAL ASSETS	$	1,731,016		$	1,690,477

LIABILITIES
Deposits:
Non-interest bearing	$	243,100		$	224,171
Interest bearing		1,207,825			1,192,627
Total deposits		1,450,925			1,416,798

Securities sold under agreements to repurchase and overnight borrowings		1,139			1,390
Accrued expenses and other liabilities		22,479			18,118
Other borrowings		97,900			97,900
Subordinated debentures		34,843			34,791
Total liabilities		1,607,286			1,568,997

SHAREHOLDERS’ EQUITY
Preferred stock, 100,000 shares authorized; none issued or outstanding		-			-
Common stock, $2.50 par value:
Authorized - 10,000,000 shares
Issued and outstanding – 4,648,932 shares in 2026, 4,623,734 shares in 2025		11,618			11,555
Additional paid-in capital		13,710			13,621
Retained earnings		114,010			106,716
Accumulated other comprehensive loss		(15,608	)		(10,412	)
Total shareholders’ equity		123,730			121,480
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,731,016		$	1,690,477

SOUTHERN MICHIGAN BANCORP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except per share data)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Interest income:
Loans, including fees	$	19,519	$	18,681	$	58,828	$	53,724
Federal funds sold and balances with banks		1,009		726		2,539		2,492
Securities:
Taxable		1,398		1,468		4,156		4,405
Tax-exempt		439		394		1,271		1,089
Total interest income		22,365		21,269		66,794		61,710

Interest expense:
Deposits		7,469		7,731		22,535		22,587
Other		1,679		1,452		4,715		4,037
Total interest expense		9,148		9,183		27,250		26,624
Net interest income		13,217		12,086		39,544		35,086
Provision for credit losses		-		1,200		758		1,864
Net interest income after provision for credit losses		13,217		10,886		38,786		33,222

Non-interest income:
Service charges on deposit accounts		473		423		1,345		1,226
Trust fees		1,053		820		2,950		2,345
Net gains on loan sales		235		250		683		744
Earnings on life insurance assets		283		227		838		805
ATM and debit card fee income		492		478		1,440		1,406
Gain on sale of fixed assets		-		220		40		220
Other		217		200		648		602
Total non-interest income		2,753		2,618		7,944		7,348

Non-interest expense:
Salaries and employee benefits		6,684		5,992		19,460		17,985
Occupancy, net		680		651		2,003		1,837
Equipment		533		474		1,569		1,462
Professional and outside services		563		507		1,746		1,555
Software maintenance		796		718		2,304		2,067
ATM expenses		255		270		738		742
Printing, postage, and supplies		100		112		338		345
Telecommunication expenses		92		75		251		223
Loss on other real estate owned		830		-		2,519		-
Other		1,501		1,180		4,220		3,311
Total non-interest expense		12,034		9,979		35,148		29,527
INCOME BEFORE INCOME TAXES		3,936		3,525		11,582		11,043
Federal income tax provision		662		506		1,915		1,740
NET INCOME	$	3,274	$	3,019	$	9,667	$	9,303

Basic Earnings Per Common Share	$	0.70	$	0.65	$	2.08	$	2.02
Diluted Earnings Per Common Share		0.70		0.65		2.06		2.01
Dividends Declared Per Common Share		0.17		0.16		0.51		0.48

CONTACT:
John H. Castle, Chairman and Interim CEO
(517) 279-5500