OTCPK:SOMC

Stock Analysis Report

Southern Michigan Bancorp

Executive Summary

Southern Michigan Bancorp, Inc. operates as the bank holding company for Southern Michigan Bank & Trust that provides a range of commercial banking services to individuals, businesses, institutions, and governmental agencies primarily in the southern Michigan communities.


Snowflake Analysis

Undervalued with adequate balance sheet and pays a dividend.

Share Price & News

How has Southern Michigan Bancorp's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SOMC's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-7.2%

SOMC

-9.5%

US Banks

-3.8%

US Market


1 Year Return

-35.0%

SOMC

-34.8%

US Banks

-15.9%

US Market

Return vs Industry: SOMC underperformed the US Banks industry which returned -31.1% over the past year.

Return vs Market: SOMC underperformed the US Market which returned -13.6% over the past year.


Shareholder returns

SOMCIndustryMarket
7 Day-7.2%-9.5%-3.8%
30 Day-30.5%-26.7%-17.4%
90 Day-34.1%-43.7%-24.1%
1 Year-33.4%-35.0%-32.8%-34.8%-14.1%-15.9%
3 Year-23.6%-28.4%-23.7%-29.4%10.0%2.8%
5 Year27.7%13.3%0.4%-11.2%27.6%13.5%

Price Volatility Vs. Market

How volatile is Southern Michigan Bancorp's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Southern Michigan Bancorp undervalued compared to its fair value and its price relative to the market?

44.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SOMC ($25.05) is trading below our estimate of fair value ($44.56)

Significantly Below Fair Value: SOMC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SOMC is good value based on its PE Ratio (6.7x) compared to the Banks industry average (8.8x).

PE vs Market: SOMC is good value based on its PE Ratio (6.7x) compared to the US market (12.9x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate SOMC's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: SOMC is good value based on its PB Ratio (0.7x) compared to the US Banks industry average (0.8x).


Next Steps

Future Growth

How is Southern Michigan Bancorp forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

-2.4%

Forecasted Banks industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Southern Michigan Bancorp has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

  • Examine whether Southern Michigan Bancorp is trading at an attractive price based on how much it is expected to earn in the future, and relative to its industry peers and the wider market.
  • While we do not consider unaudited financials to be a reliable enough to include in our analysis, you can access them on the OTC Markets Website. If you are looking for more of a qualitative research into the company, you can access Southern Michigan Bancorp's filings and announcements here.
  • Explore growth companies in the Banks industry.

Past Performance

How has Southern Michigan Bancorp performed over the past 5 years?

10.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SOMC has high quality earnings.

Growing Profit Margin: SOMC's current net profit margins (25.7%) are lower than last year (25.8%).


Past Earnings Growth Analysis

Earnings Trend: SOMC's earnings have grown by 10.7% per year over the past 5 years.

Accelerating Growth: SOMC's earnings growth over the past year (6.1%) is below its 5-year average (10.7% per year).

Earnings vs Industry: SOMC earnings growth over the past year (6.1%) underperformed the Banks industry 10.9%.


Return on Equity

High ROE: SOMC's Return on Equity (10.3%) is considered low.


Next Steps

Financial Health

How is Southern Michigan Bancorp's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: SOMC has a low level of unsold assets or inventory.

Debt Coverage by Assets: SOMC's debt is covered by short term assets (assets are 1.3x debt).


Financial Institutions Analysis

Asset Level: SOMC's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if SOMC has a sufficient allowance for bad loans.

Low Risk Liabilities: SOMC's liabilities are made up of primarily low risk sources of funding.

Loan Level: SOMC has an acceptable proportion of non-loan assets held.

Low Risk Deposits: SOMC's loans are broadly funded by customer deposits.

Level of Bad Loans: Insufficient data to determine if SOMC has an appropriate level of bad loans.


Next Steps

Dividend

What is Southern Michigan Bancorp's current dividend yield, its reliability and sustainability?

3.67%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: SOMC's dividend (3.67%) is higher than the bottom 25% of dividend payers in the US market (2%).

High Dividend: SOMC's dividend (3.67%) is low compared to the top 25% of dividend payers in the US market (5.56%).


Stability and Growth of Payments

Stable Dividend: SOMC's dividends per share have been stable in the past 10 years.

Growing Dividend: SOMC's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (24.3%), SOMC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

17.8yrs

Average management tenure


CEO

John Castle (62yo)

17.75s

Tenure

US$405,248

Compensation

Mr. John H. Castle has been a Director of Southern Michigan Bancorp, Inc. (“Southern”) and Southern Michigan Bank & Trust (“Southern Michigan Bank”) since 2002. Mr. Castle is Chairman of the Board and Chie ...


Leadership Team

NamePositionTenureCompensationOwnership
John Castle
Chairman & CEO17.75yrsUS$405.25k2.26% $1.3m
Kurt Miller
President18.25yrsUS$334.51k1.67% $966.6k
Danice Chartrand
Senior VP17.25yrsUS$196.76k0.77% $448.0k
Jaylen Johnson
Executive VP & Secretaryno dataUS$115.53kno data
Charles James Clark
Director5.33yrsno data0.63% $366.3k
Rick Feller
VP of Retail Loansno datano datano data
Nicholas Grabowski
Executive VP & Head of Lendingno datano data0.58% $338.2k
Steve Todd
Vice President of Commercial Loans - Southern Michigan Bank & Trustno datano datano data
Trisha Clark
VP of Risk Mgmt & Risk Mgmt Officer of Southern Michigan Bank & Trust no datano datano data
Eric Romzek
Head of IT - Southern Michigan Bank & Trust and First VP of IT - Southern Michigan Bank & Trust no datano datano data

17.8yrs

Average Tenure

62yo

Average Age

Experienced Management: SOMC's management team is seasoned and experienced (17.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
John Castle
Chairman & CEO17.75yrsUS$405.25k2.26% $1.3m
Kurt Miller
President18.25yrsUS$334.51k1.67% $966.6k
Charles James Clark
Director5.33yrsno data0.63% $366.3k
H. Cole
Independent Director22.25yrsUS$18.79k0.13% $75.3k
Freeman Riddle
Independent Director38.25yrsUS$16.74k0.73% $422.0k
Nolan Hooker
Independent Director29.25yrsUS$17.76k0.50% $288.7k
Gregory Hull
Honorary Directorno dataUS$17.76kno data
Thomas Kolassa
Honorary Directorno dataUS$16.74kno data
Dean Calhoun
Independent Director14.25yrsUS$16.74k10.33% $6.0m
Brian McConnell
Director13.17yrsUS$16.74k0.20% $112.8k

18.0yrs

Average Tenure

65yo

Average Age

Experienced Board: SOMC's board of directors are seasoned and experienced ( 18 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Southern Michigan Bancorp, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Southern Michigan Bancorp, Inc.
  • Ticker: SOMC
  • Exchange: OTCPK
  • Founded: 1871
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: US$57.817m
  • Shares outstanding: 2.31m
  • Website: https://www.smb-t.com

Location

  • Southern Michigan Bancorp, Inc.
  • 51 West Pearl Street
  • PO Box 309
  • Coldwater
  • Michigan
  • 49036
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SOMCOTCPK (Pink Sheets LLC)YesCommon StockUSUSDAug 1995

Biography

Southern Michigan Bancorp, Inc. operates as the bank holding company for Southern Michigan Bank & Trust that provides a range of commercial banking services to individuals, businesses, institutions, and governmental agencies primarily in the southern Michigan communities. Its deposit products include interest and non-interest checking, passbook savings, and various types of money market accounts; time, savings, and demand deposits; and certificates of deposit. The company also provides home mortgages, equity loans, and personal loans; business loans, such as lines of credit, term loans, commercial real estate loans, agriculture loans, letters of credit, small business administration loans, and capital access loans; industrial, construction, real estate, and inventory loans; and consumer lending products comprising direct and indirect loans to purchasers of residential real property and consumer goods. In addition, it offers trust and investment services that include investment management, trustee, individual retirement account rollovers and retirement plan, institutional and personal custody, estate settlement, wealth management, estate and wealth transfer planning assistance, charitable gift planning assistance, and cash management custody services; and safe deposit box and automated teller machine services. Further, the company provides online and mobile banking, bill pay, e-statements, health savings account, business succession planning, life insurance, and remote deposit capture services, as well as payroll, prepaid, gift, and credit cards. It operates through a network of 14 banking offices located in Battle Creek, Camden, Centreville, Coldwater, Constantine, Hillsdale, Marshall, Mendon, Portage, Tekonsha, Three Rivers, and Union City, Michigan. The company was founded in 1871 and is based in Coldwater, Michigan. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/05 05:37
End of Day Share Price2020/04/01 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.