Southern Michigan Bancorp, Inc. Announces Third Quarter 2026 Earnings

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

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