Southern Michigan Bancorp (SOMC) AI Stock Analysis

• Market Cap: $112.01M
• Dividend Yield: 2.61%
• Average Volume (3M): 464.00
• Price to Earnings (P/E): 9.8
• Beta (1Y): 0.29
• Revenue Growth: 9.89%
• EPS Growth: 9.16%
• Country: US
• Employees: 173
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.70
• Shares Outstanding: 4,584,752
• 10 Day Avg. Volume: 819
• 30 Day Avg. Volume: 464
• PEG Ratio: -1.69
• Price to Book (P/B): 0.82
• Price to Sales (P/S): 1.81
• P/FCF Ratio: 30.79
• Enterprise Value/Market Cap: 1.53
• Enterprise Value/Revenue: 2.45
• Enterprise Value/Gross Profit: 2.79
• Enterprise Value/Ebitda: 12.84
• 1Y Price Target: $26.00
• Price Target Upside: 8.92% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 64 Neutral
• Price Target: $26.00 ▲(8.92% Upside)

Southern Michigan Bancorp's overall stock score reflects a stable financial performance with reasonable valuation metrics. The financial performance is solid, though there are concerns about increasing leverage and cash flow efficiency. Technical analysis indicates some short-term bearish signals, but longer-term trends remain supportive. The valuation is attractive with a low P/E ratio and a decent dividend yield, making it appealing for value investors.

Southern Michigan Bancorp Business Overview & Revenue Model

Company Description

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 southwest Michigan communities. Its deposit products include interest and non-interest checking, savings, and various types of money market accounts; time, savings, and demand deposits; and certificates of deposit and IRAs. The company also provides home mortgages and equity loans, home equity line of credit, and auto/personal loans; business loans, such as lines of credit, term loans, commercial real estate loans, commercial and industrial 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, IRA 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, ACH, wire transfer, remote deposit capture, insurance, and merchant services, as well as ATM, debit, credit, and gift cards. As of March 23, 2022, it operated 13 branches within Branch, Calhoun, Hillsdale, Kalamazoo, and St. Joseph Counties. The company was founded in 1871 and is based in Coldwater, Michigan.

How the Company Makes Money

Southern Michigan Bancorp generates revenue primarily through interest income from loans and investments. The company originates various types of loans, including commercial, residential, and consumer loans, and earns interest on these loans over time. Additionally, SOMC collects fees from its banking services, such as account maintenance, transaction fees, and service charges. Another significant revenue stream comes from its wealth management services, which include investment advisory fees and asset management fees. The company may also benefit from partnerships with local businesses and community organizations, enhancing its service offerings and expanding its customer base, ultimately contributing to its overall earnings.

Southern Michigan Bancorp Financial Statement Overview

Summary

Southern Michigan Bancorp exhibits stable financial performance with strengths in revenue growth and profitability management. However, the minor decline in net profit margins and increasing leverage raises caution. While the balance sheet remains strong, the rise in liabilities suggests a need for careful financial management. Cash flow metrics highlight the need for improved cash conversion and free cash flow generation. Overall, the company maintains a solid financial standing with areas requiring strategic focus to sustain growth and profitability.

Income Statement

The company demonstrated steady revenue growth over the years, with a slight dip in 2024 compared to 2022. Gross profit margins are robust, consistently at 100%, reflecting a strong ability to manage costs relative to revenues. The net profit margin showed some fluctuations, declining slightly in 2023 and 2024, indicating a potential pressure on profitability. EBIT margins remained stable, while EBITDA was reported as zero in 2024, possibly due to the absence of adjustments typically included in EBITDA calculations.

Balance Sheet

The debt-to-equity ratio increased slightly in 2024, pointing to a moderate rise in leverage. Return on Equity (ROE) remained relatively strong, showcasing efficient use of equity to generate profits. The equity ratio decreased in recent years, suggesting an increase in liabilities relative to assets, which may indicate growing financial obligations. Overall, the balance sheet reflects a stable but slightly leveraged position.

Cash Flow

Free Cash Flow saw significant fluctuations, with a decline in 2024 compared to previous years. The operating cash flow to net income ratio indicates a solid ability to convert earnings into cash, although this ratio decreased in 2024. The free cash flow to net income ratio also dropped, highlighting potential challenges in maintaining cash flow relative to profitability. The cash flow stability is moderate, with room for improvement in cash conversion efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	70.11M	48.56M	46.81M	51.51M	46.15M	40.20M
Gross Profit	61.36M	48.56M	73.31M	51.51M	46.15M	32.48M
EBITDA	13.36M	12.14M	-782.00K	17.48M	15.51M	10.26M
Net Income	11.52M	10.40M	10.90M	13.49M	11.76M	7.39M
Balance Sheet
Total Assets	1.57B	1.50B	1.42B	1.28B	1.16B	1.00B
Cash, Cash Equivalents and Short-Term Investments	0.00	69.50M	73.09M	75.70M	117.85M	98.03M
Total Debt	132.66M	117.98M	146.54M	89.25M	77.92M	54.55M
Total Liabilities	1.46B	1.39B	1.32B	1.19B	1.07B	907.37M
Stockholders Equity	113.71M	107.22M	97.83M	86.16M	97.75M	92.98M
Cash Flow
Free Cash Flow	0.00	2.85M	7.90M	8.36M	9.90M	9.29M
Operating Cash Flow	0.00	7.84M	16.24M	13.19M	13.68M	9.92M
Investing Cash Flow	0.00	-76.58M	-141.57M	-179.38M	-148.72M	-152.11M
Financing Cash Flow	0.00	66.36M	119.69M	124.06M	154.82M	173.08M

Southern Michigan Bancorp Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 23.87
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOMC, the sentiment is Negative. The current price of 23.87 is below the 20-day moving average (MA) of 24.57, below the 50-day MA of 24.08, and above the 200-day MA of 20.66, indicating a neutral trend. The MACD of 0.05 indicates Positive momentum. The RSI at 42.82 is Neutral, neither overbought nor oversold. The STOCH value of 64.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SOMC.

Southern Michigan Bancorp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MGYR	69 Neutral	$109.02M	10.89	8.68%	1.74%	18.82%	35.00%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
RVSB	64 Neutral	$108.09M	20.62	3.25%	1.53%	10.30%	170.86%
SOMC	64 Neutral	$112.01M	9.75	10.68%	2.61%	9.89%	9.16%
UNB	56 Neutral	$113.78M	11.64	―	5.76%	14.58%	7.73%
SRBK	56 Neutral	$116.02M	23.73	1.91%	1.02%	26.46%	―
BSBK	41 Neutral	$112.65M	―	-0.25%	―	-12.23%	83.58%