Sturgis Bancorp, Inc. Reports Financial Results for Full-Year 2024

Sturgis Bancorp, Inc.

Tue, Mar 4, 2025, 9:30 AM 13 min read

"The year ended on a positive note for the Bank. Net Income for 4Q24 was $2 million; 4Q24 Tier 1 Leverage Capital ended at 7.89% up from 1Q24's 7.64%, after the large commercial credit loss in 1Q24. The Bank's focus for 2025 is to continue to grow customer relationships by expanding wallet share. We will also continue focus efforts in our newer markets. The vision for our team is to continue to leverage the Community Bank model by focusing on what customers want and being there for our communities."

Quarterly Income Statement Highlights

Net income for the quarter (4Q24) was $2.0 million, increasing from last quarter's (3Q24) $1.5 million net income, while also up from the net loss of $(350,000) for the same quarter of the prior year (4Q23). The increase from 4Q23 was substantially due to an increase in net interest income, after credit loss expense, higher earnings on bank-owned life insurance, and a decrease in compensation and benefits.
Earnings (loss) per share were $0.91 for 4Q24, $0.72 for 3Q24, and $(0.16) for 4Q24.
Net interest income was $7.4 million during 4Q24, a 4.50% increase from 3Q24's $7.0 million. This also is a 7.09% increase from 4Q23's $6.9 million net interest income. The change from the same quarter a year ago was primarily due to:
- Interest and dividend income of $12.1 million in 4Q24, compared to $10.8 million in 4Q23.
Tax equivalent net interest margin decreased slightly to 3.35% for 4Q24 from 3.38% for 3Q24, while increasing from the 3.28% margin in 4Q23.
During 4Q24, there was a reversal of the allowance for credit losses of $216,000, due to annual historic loss updates, qualitative factor adjustments, and lower specific reserves. During 3Q24, there was also a reversal of the allowance of $28,000, while $993,000 was provided to the allowance for credit losses in 4Q23.
Noninterest income totaled $2.4 ($2.398) million during 4Q24, a 1.32% increase from 3Q24's $2.4 ($2.367) million, and a 22.50% increase from for 4Q23's $2.0 million. This fluctuation from 4Q23 was primarily due to:
- Earnings on cash value of bank-owned life insurance for 4Q24 were $541,000, compared to $100,000 for 4Q23.
Noninterest expenses totaled $7.7 million during 4Q24, a 1.37% increase from 3Q24's $7.6 million, while an 8.33% decrease from 4Q23's $8.4 million. This fluctuation from 4Q23 was primarily due to:
- Compensation and benefits in 4Q24 were $4.2 million, compared to $5.4 million for 4Q23. Most of this difference was due to one-time expenses associated with the retirement of the former President and CEO.

Full-Year Income Statement Highlights

Net income for 2024 was $2.8 million, compared to $6.0 million for 2023, as further discussed below.
Earnings per share were $1.32 for 2024 and $2.81 for 2023.
Net interest income was $28.0 million for 2024, a 1.70% decrease from 2023's $28.5 million. This decrease was primarily due to:
- Although interest and dividend income increased $5.9 million to $46.7 million in 2024 compared to $40.8 million in 2023, interest expense increased $6.4 million to $18.7 million in 2024 compared to $12.3 million in 2023.
During 2024, $4.6 million was provided to the allowance for credit losses, compared to $1.3 million for 2023. This increase was primarily due to:
- A one-time charge-off of one customer's loans totaling $5.5 million occurred in 1Q24.
Noninterest income totaled $10.1 million for 2024, compared to $8.9 million for 2023. This 13.14% increase was primarily comprised of:
- Investment brokerage commission income of $2.6 million in 2024, compared to $2.2 million in 2023.
- Mortgage banking activities of $1.8 million in 2024, compared to $1.5 million in 2023.
- Gain on termination of interest rate swaps of $1.1 million in 2024, compared to $793,000 in 2023.
Noninterest expenses totaled $30.4 million in 2024, compared to $29.0 million in 2023. This 4.73% increase was primarily comprised of:
- Compensation and benefits expense of $17.7 million in 2024, compared to $17.5 million in 2023.
- Occupancy and equipment expense of $4.3 million in 2024, compared to $3.7 million in 2023.
- Data processing expense of $1.3 million in 2024, compared to $1.0 million in 2023.

Balance Sheet Highlights

Total assets increased to $956 million as of the end of 4Q24, a 0.87% increase from the end of 3Q24's $948 million, and a 4.02% increase from then end of 4Q23's $919 million. These net increases were comprised of:
- Cash and cash equivalents ended 4Q24 at $20.8 million, compared to $23.8 million as of the end of 3Q24, and $40.0 million as of the end of 4Q23.
- Securities - available-for-sale increased to $77.1 million, compared to $80.9 million as of the end of 3Q24, and $52.7 million as of the end of 4Q23.
- Net loans ended 4Q24 at $768 million, compared to $753 million as of the end of 3Q24, and $739 million as of the end of 4Q23.
Total deposits as of the end of 4Q24 were $814 million, compared to $809 million as of the end of 3Q24, and $799 million as of the end of 4Q23. These net increases were comprised of:
- Noninterest-bearing deposits decreased to $158 million as of the end of 4Q24, from $162 million as of the end of 3Q24, and $160 million as of the end of 4Q23.
- Interest-bearing deposits increased to $656 million as of the end of 4Q24, from $647 million as of the end of 3Q24, and $639 million as of the end of 4Q23.
Borrowed funds increased to $61.1 million as of the end of 4Q24, from $57.0 million as of the end of 3Q24, and $40.0 million as of the end of 4Q23.
Total equity at the end of 4Q24 was $55.4 million, compared to $55.5 million as of the end of 3Q24, and $55.8 million as of the end of 4Q23.
Book value per share was $25.66 ($21.51 tangible) at the end of 4Q24, compared to $25.74 ($21.55 tangible) as of the end of 3Q24, and $25.94 ($21.84 tangible) as of the end of 4Q23.

About Sturgis Bancorp, Inc.

Sturgis Bancorp, Inc. is the holding company for Sturgis Bank & Trust Company (the Bank), and its subsidiaries: Oakleaf Financial Services, Oak Mortgage, Ayres/Oak Insurance, and Oak Title Services. The Bank provides a full array of trust, commercial, and consumer banking services from banking centers in: Sturgis, Bangor, Bronson, Centreville, Climax, Colon, Marshall, Niles, Portage, South Haven, St. Joseph, Three Rivers, and White Pigeon, Michigan. Oakleaf Financial Services offers a complete range of investment and financial-advisory services. Oakleaf Mortgage offers residential mortgages in all markets of the Bank. Ayres/Oak Insurance offers various competitive commercial and consumer insurance products. Oak Title Services offers commercial and consumer title insurance services.

Forward-Looking Statements

This release contains statements that constitute forward-looking statements. These statements appear in several places in this release and include statements regarding intent, belief, outlook, objectives, efforts, estimates, or expectations of Sturgis Bancorp, Inc. (Bancorp), primarily with respect to future events and the future financial performance of Bancorp. Any such forward-looking statements are not guarantees of future events or performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements. Factors that could cause a difference between an ultimate actual outcome and a preceding forward-looking statement include, but are not limited to, changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking laws and regulations; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; government and regulatory policy changes; the outcome of any pending or future litigation and contingencies; trends in consumer behavior and ability to repay loans; and changes in the world, national, and local economies. Bancorp undertakes no obligation to update, amend, or clarify forward-looking statements as a result of new information, future events, or otherwise. The numbers presented herein are unaudited.

For additional information, visit our website at www.sturgis.bank.

Sturgis Bancorp, Inc. Contacts

Jason J. Hyska, CEO & President, or Brian P. Hoggatt, CFO - (269) 651-9345

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited - Amounts in thousands, except share and per share data)

	Three Months Ended
	Dec 31,			Sep 30,			Dec 31,
	2024			2024			2023
	4Q24			3Q24			4Q23
Interest and dividend income
Loans (including fees)	$	10,981		$	10,819		$	10,056
Investment securities:
Taxable		827			906			506
Tax-exempt		38			39			69
Dividends		224			190			139
Total interest and dividend income		12,070			11,954			10,770

Interest expense
Deposits		3,956			3,686			3,496
Borrowed funds		763			1,233			410
Total interest expense		4,719			4,919			3,906

Net interest income		7,351			7,035			6,864

Credit loss expense (benefit)		(216	)		(28	)		993

Net interest income, after credit loss expense		7,567			7,063			5,871

Noninterest income
Service charges on deposits and other fees		337			356			345
Interchange income		336			375			328
Investment brokerage commission income		697			646			606
Mortgage banking activitives		262			588			420
Trust fee income		115			97			76
Earnings on cash value of bank-owned life insurance		541			111			100
Gain on sale of real estate owned, net		2			47			2
Proportionate net income from unconsolidated subsidiaries		92			100			67
Other income		16			47			14
Total noninterest income		2,398			2,367			1,958

Noninterest expenses
Compensation and benefits		4,212			4,559			5,412
Occupancy and equipment		1,103			1,063			992
Interchange expenses		203			174			179
Data processing		425			318			187
Professional services		165			125			177
Advertising		190			223			185
FDIC premiums		187			176			152
Other expenses		1,185			933			1,082
Total noninterest expenses		7,670			7,571			8,366

Income (loss) before income tax expense (benefit)		2,295			1,859			(537	)

Income tax expense (benefit)		330			316			(187	)

Net income (loss)	$	1,965		$	1,543		$	(350	)

Earnings (loss) per share	$	0.91		$	0.72		$	(0.16	)
Dividends per share	$	0.17		$	0.17		$	0.17

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited - Amounts in thousands, except share and per share data)

	Full-Year Ended
	Dec 31,		Dec 31,
	2024		2023
Interest and dividend income
Loans (including fees)	$	42,534	$	37,964
Investment securities:
Taxable		3,298		1,965
Tax-exempt		177		361
Dividends		733		479
Total interest and dividend income		46,742		40,769

Interest expense
Deposits		15,170		10,725
Borrowed funds		3,553		1,542
Total interest expense		18,723		12,267

Net interest income		28,019		28,502

Credit loss expense		4,585		1,269

Net interest income, after credit loss expense		23,434		27,233

Noninterest income
Service charges on deposits and other fees		1,372		1,356
Interchange income		1,369		1,349
Investment brokerage commission income		2,578		2,203
Mortgage banking activitives		1,823		1,484
Trust fee income		465		365
Earnings on cash value of bank-owned life insurance		867		887
Gain on sale of real estate owned, net		77		56
Gain on termination of interest rate swap		1,070		793
Proportionate net income from unconsolidated subsidiaries		365		224
Other income		92		190
Total noninterest income		10,078		8,907

Noninterest expenses
Compensation and benefits		17,680		17,459
Occupancy and equipment		4,260		3,739
Interchange expenses		708		650
Data processing		1,319		988
Professional services		580		525
Advertising		827		723
FDIC premiums		741		675
Other expenses		4,239		4,224
Total noninterest expenses		30,354		28,983

Income before income tax expense		3,158		7,157

Income tax expense (benefit)		323		1,139

Net income	$	2,835	$	6,018

Earnings per share	$	1.32	$	2.81
Dividends per share	$	0.68	$	0.68

CONSOLIDATED BALANCE SHEETS
(Unaudited - Amounts in thousands, except share and per share data)

	Dec 31,			Sep 30,			Dec 31,
	2024			2024			2023
	4Q24			3Q24			4Q24
ASSETS
Cash and due from banks	$	10,628		$	12,642		$	10,243
Other short-term investments		10,174			11,199			29,766
Total cash and cash equivalents		20,802			23,841			40,009

Securities - available-for-sale		77,072			80,867			52,658
Securities - held-to-maturity		19,442			19,722			20,866
Federal Home Loan Bank stock		9,786			9,786			7,295
Loans held for sale		3,658			3,664			2,259
Loans, net of allowance for credit losses of $9,289; $9,484;
and $10,198 at 4Q24; 3Q24; and 4Q23, respectively		768,430			752,660			739,461
Premises and equipment, net		18,708			18,546			19,136
Goodwill		5,834			5,834			5,834
Mortgage servicing rights		3,121			3,198			2,979
Real estate owned		152			151			130
Bank-owned life insurance		15,402			16,158			15,832
Accrued interest receivable		3,405			3,504			3,099
Other assets		10,577			10,201			9,914
Total assets	$	956,389		$	948,132		$	919,472

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits
Noninterest-bearing	$	157,782		$	162,254		$	159,899
Interest-bearing		656,077			646,734			639,039
Total deposits		813,859			808,988			798,938

Federal Home Loan Bank advances and other borrowings		61,100			57,000			40,000
Subordinated debentures - $15,000 face amount (less
unamortized debt issuance costs of $81; $102; and $164
at 4Q24; 3Q24; and 4Q23, respectively)		14,919			14,898			14,836
Accrued interest payable		2,600			2,190			1,654
Other liabilities		8,502			9,540			8,276
Total liabilities		900,980			892,616			863,704

Stockholders' equity
Common stock - $1 par value: authorized - 9,000,000 shares;
issued and outstanding - 2,159,191 shares at 4Q24;
2,156,941 shares at 3Q24; and 2,150,191 shares at 4Q23		2,159			2,157			2,150
Additional paid-in capital		8,699			8,660			8,556
Retained earnings		53,398			51,801			52,029
Accumulated other comprehensive (loss)		(8,847	)		(7,102	)		(6,967	)
Total stockholders' equity		55,409			55,516			55,768
Total liabilities and stockholders' equity	$	956,389		$	948,132		$	919,472

SOURCE: Sturgis Bancorp, Inc.

View the original press release on ACCESS Newswire

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