EXHIBIT 99.1
|
51 West Pearl Street • P.O. Box 309 • Coldwater, Michigan • 49036 |
May 30, 2012
To Our Shareholders:
Southern Michigan Bank and Trust recently conducted its 140th annual meeting at which financial results for 2011 and the first quarter of 2012 were announced. Southern reported net income of $1,002,000, or $.43 per share, for the first quarter of 2012. Southern's earnings of $3.4 million for 2011 is noteworthy given the economic climate and as compared to peer bank results.
In response to the many positive comments related to the annual meeting, the entire presentation is now available on our website at www.smb-t.com by clicking on the Investor Relations link. Proceed to the left hand side of the page under Corporate Information to News & Market Data and then finally to Presentations. This offers shareholders unable to attend the annual meeting the opportunity to have access to all the information shared, including substantial details about Southern's financial results during 2011.
The five slides enclosed with this letter compare Southern with the twenty largest publicly traded banking companies headquartered in Michigan in several important categories. While Southern, with year-end assets totaling $509 million, is the twelfth largest publicly traded banking company headquartered in Michigan, it was the eighth most profitable banking company in 2011. In measures of asset quality, which are vitally important in assessing financial strength and stability, Southern ranked fourth with a non-performing asset ratio of 2.12 percent, and sixth with a Texas ratio of 25.5 percent among the top twenty peers. Lastly, when comparing annual dividends, Southern ranked fourth with only five out of the twenty largest publicly traded banking companies headquartered in Michigan paying a dividend in 2011.
Our directors and management team are pleased with improvements in many of the financial performance measures included in the shareholder meeting presentation. However, continued economic and regulatory uncertainties compel us to maintain conservative balance sheet management strategies. Our sustained focus on capital preservation has allowed Southern to remain comfortably above regulatory minimums for institutions categorized as "well-capitalized."
If you have any questions or comments about the annual meeting presentation, please contact me or members of our management team.
Sincerely,
John H. Castle
Chairman and Chief Executive Officer
517.279.5500 • 800.379.7628 • www.smb-t.com
| Excerpts from Southern Michigan Bancorp, Inc. Annual Meeting - May 10, 2012 |
| Twenty Largest Public Banks in Michigan
Ranked by Assets |
| |
Company Name
|
City
| 12/31/2011
Total
Assets
($000) |
| 1 | Flagstar Bancorp, Inc. | Troy | $13,637,473 |
| 2 | Citizens Republic Bancorp, Inc. | Flint | 9,462,849 |
| 3 | Chemical Financial Corporation | Midland | 5,339,453 |
| 4 | Independent Bank Corporation | Ionia | 2,307,406 |
| 5 | Capitol Bancorp Ltd. | Lansing | 2,205,265 |
| 6 | Macatawa Bank Corporation | Holland | 1,507,667 |
| 7 | Firstbank Corporation | Alma | 1,485,299 |
| 8 | Mercantile Bank Corporation | Grand Rapids | 1,433,229 |
| 9 | Isabella Bank Corporation | Mount Pleasant | 1,337,925 |
| 10 | MBT Financial Corp. | Monroe | 1,238,027 |
| 11 | United Bancorp, Inc. | Ann Arbor | 885,009 |
| 12 | Southern Michigan Bancorp, Inc. | Coldwater | 509,220 |
| 13 | Mackinac Financial Corporation | Manistique | 498,311 |
| 14 | ChoiceOne Financial Services, Inc. | Sparta | 495,914 |
| 15 | Fentura Financial, Inc. | Fenton | 298,861 |
| 16 | Wolverine Bancorp, Inc. | Midland | 293,682 |
| 17 | CNB Corporation | Cheboygan | 250,142 |
| 18 | First Federal of Northern Michigan Bancorp, Inc. | Alpena | 217,045 |
| 19 | Community Shores Bank Corporation | Muskegon | 208,651 |
| 20 | Monarch Community Bancorp, Inc. | Coldwater | 208,106 |
Twenty Largest Public Banks in Michigan
Ranked by Net Income | |
|
Company Name
|
City
| 2011Y
Net
Income
($000) | |
1 | Chemical Financial Corporation | Midland | $43,050 | |
2 | Mercantile Bank Corporation | Grand Rapids | 37,485 | |
3 | Isabella Bank Corporation | Mount Pleasant | 10,210 | |
4 | Citizens Republic Bancorp, Inc. | Flint | 6,667 | |
5 | Macatawa Bank Corporation | Holland | 5,829 | |
6 | Firstbank Corporation | Alma | 5,623 | |
7 | ChoiceOne Financial Services, Inc. | Sparta | 3,513 | |
8 | Southern Michigan Bancorp, Inc. | Coldwater | 3,402 | |
9 | Mackinac Financial Corporation | Manistique | 2,218 | |
10 | Wolverine Bancorp, Inc. | Midland | 1,108 | |
11 | United Bancorp, Inc. | Ann Arbor | 917 | |
12 | First Federal of Northern Michigan Bancorp, Inc. | Alpena | 742 | |
13 | Monarch Community Bancorp, Inc. | Coldwater | (353) | |
14 | Fentura Financial, Inc. | Fenton | (1,512) | |
15 | Community Shores Bank Corporation | Muskegon | (2,467) | |
16 | CNB Corporation | Cheboygan | (2,693) | |
17 | MBT Financial Corp. | Monroe | (3,762) | |
18 | Independent Bank Corporation | Ionia | (20,200) | |
19 | Capitol Bancorp Ltd. | Lansing | (51,926) | |
20 | Flagstar Bancorp, Inc. | Troy | (181,778) | |
| Excerpts from Southern Michigan Bancorp, Inc. Annual Meeting - May 10, 2012 |
| Twenty Largest Public Banks in Michigan
Ranked By Nonperforming Asset Ratio |
| |
Company Name
|
City
| 2011Y
NPAs/
Assets
(%) |
| 1 | Citizens Republic Bancorp, Inc. | Flint | 1.42 |
| 2 | ChoiceOne Financial Services, Inc. | Sparta | 1.74 |
| 3 | Isabella Bank Corporation | Mount Pleasant | 2.00 |
| 4 | Southern Michigan Bancorp, Inc. | Coldwater | 2.12 |
| 5 | Mackinac Financial Corporation | Manistique | 2.24 |
| 6 | Chemical Financial Corporation | Midland | 2.90 |
| 7 | Firstbank Corporation | Alma | 3.20 |
| 8 | CNB Corporation | Cheboygan | 3.22 |
| 9 | First Federal of Northern Michigan Bancorp, Inc. | Alpena | 3.75 |
| 10 | Mercantile Bank Corporation | Grand Rapids | 4.21 |
| 11 | Wolverine Bancorp, Inc. | Midland | 5.42 |
| 12 | United Bancorp, Inc. | Ann Arbor | 5.80 |
Note: Total Nonperforming | 13 | Community Shores Bank Corporation | Muskegon | 7.47 |
Assets ("NPAs") include 90 + | 14 | MBT Financial Corp. | Monroe | 7.72 |
days past due loans, nonaccrual | 15 | Flagstar Bancorp, Inc. | Troy | 8.25 |
loans, OREO and restructured | 16 | Fentura Financial, Inc. | Fenton | 8.91 |
loans. | 17 | Independent Bank Corporation | Ionia | 9.12 |
| 18 | Macatawa Bank Corporation | Holland | 10.02 |
| 19 | Monarch Community Bancorp, Inc. | Coldwater | 13.94 |
| 20 | Capitol Bancorp Ltd. | Lansing | 19.29 |
Twenty Largest Public Banks in Michigan
Ranked By Texas Ratio | |
|
Company Name
|
City
| 2011Y
Texas
Ratio
(%) | |
1 | Citizens Republic Bancorp, Inc. | Flint | 15.5 | |
2 | ChoiceOne Financial Services, Inc. | Sparta | 18.2 | |
3 | Mackinac Financial Corporation | Manistique | 18.4 | |
4 | Wolverine Bancorp, Inc. | Midland | 21.4 | |
5 | Isabella Bank Corporation | Mount Pleasant | 22.2 | |
6 | Southern Michigan Bancorp, Inc. | Coldwater | 25.5 | |
7 | Chemical Financial Corporation | Midland | 28.7 | |
8 | Mercantile Bank Corporation | Grand Rapids | 29.9 | |
9 | First Federal of Northern Michigan Bancorp, Inc. | Alpena | 31.6 | |
10 | Firstbank Corporation | Alma | 34.1 | |
11 | CNB Corporation | Cheboygan | 37.7 | |
12 | United Bancorp, Inc. | Ann Arbor | 44.8 | |
13 | Flagstar Bancorp, Inc. | Troy | 98.4 | |
14 | MBT Financial Corp. | Monroe | 99.0 | |
15 | Fentura Financial, Inc. | Fenton | 116.7 | |
16 | Macatawa Bank Corporation | Holland | 119.9 | |
17 | Independent Bank Corporation | Ionia | 136.8 | |
18 | Monarch Community Bancorp, Inc. | Coldwater | 186.6 | |
19 | Community Shores Bank Corporation | Muskegon | 401.8 | |
20 | Capitol Bancorp Ltd. | Lansing | NM* | |
Note: Texas Ratio = Total Nonperforming Assets / (Tangible Equity + Loan Loss Reserve).
| Excerpts from Southern Michigan Bancorp, Inc. Annual Meeting - May 10, 2012 |
| Twenty Largest Public Banks in Michigan
Ranked By 2011 Dividend Rate | |
| |
Company Name
|
City
| Annual
Dividend
($) | |
| 1 | Chemical Financial Corporation | Midland | $0.80 | |
| 2 | Isabella Bank Corporation | Mount Pleasant | 0.76 | |
| 3 | ChoiceOne Financial Services, Inc. | Sparta | 0.48 | |
| 4 | Southern Michigan Bancorp, Inc. | Coldwater | 0.22 | |
| 5 | Firstbank Corporation | Alma | 0.04 | |
| | Mercantile Bank Corporation | Grand Rapids | 0.00 | |
| | Flagstar Bancorp, Inc. | Troy | 0.00 | |
| | Citizens Republic Bancorp, Inc. | Flint | 0.00 | |
| | Independent Bank Corporation | Ionia | 0.00 | |
| | Capitol Bancorp Ltd. | Lansing | 0.00 | |
| | Macatawa Bank Corporation | Holland | 0.00 | |
| | MBT Financial Corp. | Monroe | 0.00 | |
| | United Bancorp, Inc. | Ann Arbor | 0.00 | |
| | Mackinac Financial Corporation | Manistique | 0.00 | |
| | Fentura Financial, Inc. | Fenton | 0.00 | |
| | Wolverine Bancorp, Inc. | Midland | 0.00 | |
| | CNB Corporation | Cheboygan | 0.00 | |
| | First Federal of Northern Michigan Bancorp, Inc. | Alpena | 0.00 | |
| | Community Shores Bank Corporation | Muskegon | 0.00 | |
| | Monarch Community Bancorp, Inc. | Coldwater | 0.00 | |
