Maryland
(State or Other Jurisdiction
of Incorporation)
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0-31957
(Commission
File Number)
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38-0135202
(I.R.S. Employer
Identification No.)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
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Item 2.02
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Results of Operations and Financial Condition
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Item 9.01
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Financial Statements and Exhibits
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(a)
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Financial Statements of businesses acquired. Not Applicable.
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(b)
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Pro forma financial information. Not Applicable.
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(c)
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Shell Company Transactions. Not Applicable
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(d)
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Exhibits.
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FIRST FEDERAL OF NORTHERN MICHIGAN BANCORP, INC. | |||
Date: August 1, 2011
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By:
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/s/ Amy E. Essex | |
Amy E. Essex | |||
Chief Financial Officer | |||
(Duly Authorized Representative) |
Contact:
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Amy E. Essex
Chief Financial Officer, Treasurer & Corporate Secretary
First Federal of Northern Michigan Bancorp, Inc.
(989) 356-9041
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·
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Significant quarter over quarter improvement in the Company’s net interest margin (from 3.73% for the quarter ended June 30, 2010 to 4.19% for the quarter ended June 30, 2011) due to both a 58 basis point reduction in the cost of funds period over period and to a large commercial loan which returned to accruing status during the quarter ended June 30, 2011.
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·
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Provision for Loan Losses of ($19,000) and $48,000, for the three and six months ended June 30, 2011, respectively, as compared to provisions of $595,000 and $606,000 for the three and six months ended June 30, 2010.
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·
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First Federal of Northern Michigan remains “well-capitalized” for regulatory purposes.
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For the Three Months Ended June 30
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For the Six Months Ended June 30
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|||||||||||||||
2011
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2010
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2011
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2010
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|||||||||||||
Performance Ratios:
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||||||||||||||||
Net interest margin
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4.19 | % | 3.73 | % | 4.08 | % | 3.67 | % | ||||||||
Average interest rate spread
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4.04 | % | 3.55 | % | 3.93 | % | 3.47 | % | ||||||||
Return on average assets*
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0.49 | % | 0.56 | % | 0.39 | % | 0.45 | % | ||||||||
Return on average equity*
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4.41 | % | 5.41 | % | 3.56 | % | 4.42 | % | ||||||||
* Annualized
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As of
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||||||||||||
June 30, 2011
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December 31, 2010
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June 30, 2010
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||||||||||
Asset Quality Ratios:
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||||||||||||
Non-performing assets to total assets
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4.06 | % | 4.37 | % | 4.40 | % | ||||||
Non-performing loans to total loans
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2.90 | % | 4.13 | % | 4.20 | % | ||||||
Allowance for loan losses to non-performing loans
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51.28 | % | 42.85 | % | 44.66 | % | ||||||
Allowance for loan losses to total loans
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1.48 | % | 1.77 | % | 1.87 | % | ||||||
"Texas Ratio" (Bank)
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37.07 | % | 39.66 | % | 41.42 | % | ||||||
Total non-performing loans ($000 omitted)
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$ | 4,273 | $ | 6,606 | $ | 7,000 | ||||||
Total non-performing assets ($000 omitted)
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$ | 8,898 | $ | 9,424 | $ | 9,992 |
·
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Timely pursuit of foreclosure and/or repossession options coupled with quick and aggressive marketing efforts of repossessed assets;
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·
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Restructuring loans, where feasible, to assist borrowers in working through this financially challenging time;
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·
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Allowing borrowers to structure short-sales of properties, where appropriate and feasible; and
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·
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Working with borrowers to find a means of reducing outstanding debt (such as through sales of collateral).
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Regulatory
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Minimum to be
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|||||||||||||||||||||||
Actual
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Minimum
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Well Capitalized
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||||||||||||||||||||||
Amount
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Ratio
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Amount
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Ratio
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Amount
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Ratio
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|||||||||||||||||||
Dollars in Thousands
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||||||||||||||||||||||||
Tier 1 (Core) capital ( to
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||||||||||||||||||||||||
adjusted assets)
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$ | 21,810 | 10.04 | % | $ | 8,694 | 4.00 | % | $ | 10,867 | 5.00 | % | ||||||||||||
Total risk-based capital ( to risk-
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||||||||||||||||||||||||
weighted assets)
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$ | 23,459 | 16.53 | % | $ | 11,353 | 8.00 | % | $ | 14,191 | 10.00 | % | ||||||||||||
Tier 1 risk-based capital ( to
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||||||||||||||||||||||||
risk-weighted assets)
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$ | 21,810 | 15.37 | % | $ | 5,676 | 4.00 | % | $ | 8,514 | 6.00 | % | ||||||||||||
Tangible Capital ( to
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||||||||||||||||||||||||
tangible assets)
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$ | 21,810 | 10.04 | % | $ | 3,260 | 1.50 | % | $ | 4,347 | 2.00 | % |
First Federal of Northern Michigan Bancorp, Inc. and Subsidiaries
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||
Consolidated Balance Sheet
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June 30, 2011
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December 31, 2010
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|||||||
(Unaudited)
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||||||||
ASSETS
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||||||||
Cash and cash equivalents:
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||||||||
Cash on hand and due from banks
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$ | 3,951,713 | $ | 1,889,999 | ||||
Overnight deposits with FHLB
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34,756 | 72,658 | ||||||
Total cash and cash equivalents
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3,986,469 | 1,962,657 | ||||||
Securities AFS
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47,671,712 | 35,301,238 | ||||||
Securities HTM
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2,485,000 | 2,520,000 | ||||||
Loans held for sale
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550,613 | - | ||||||
Loans receivable, net of allowance for loan losses of $2,190,949 and
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||||||||
$2,831,332 as of June 30, 2011 and December 31, 2010, respectively
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144,825,894 | 157,143,918 | ||||||
Foreclosed real estate and other repossessed assets
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4,625,417 | 2,818,343 | ||||||
Federal Home Loan Bank stock, at cost
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3,266,100 | 3,775,400 | ||||||
Premises and equipment
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5,924,907 | 6,026,793 | ||||||
Accrued interest receivable
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1,158,565 | 1,230,938 | ||||||
Intangible assets
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481,081 | 627,306 | ||||||
Prepaid FDIC premiums
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852,890 | 967,143 | ||||||
Deferred tax asset
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471,751 | 659,194 | ||||||
Other assets
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2,623,837 | 2,700,034 | ||||||
Total assets
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$ | 218,924,236 | $ | 215,732,964 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||||
Liabilities:
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||||||||
Deposits
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$ | 156,110,486 | $ | 155,465,896 | ||||
Advances from borrowers for taxes and insurance
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370,215 | 130,030 | ||||||
Federal Home Loan Bank Advances
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32,000,000 | 29,000,000 | ||||||
REPO Sweep Accounts
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4,847,231 | 6,172,362 | ||||||
Accrued expenses and other liabilities
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1,530,196 | 1,728,735 | ||||||
Total liabilities
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194,858,128 | 192,497,023 | ||||||
Stockholders' equity:
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||||||||
Common stock ($0.01 par value 20,000,000 shares authorized
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||||||||
3,191,999 shares issued)
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31,918 | 31,918 | ||||||
Additional paid-in capital
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23,851,341 | 23,822,152 | ||||||
Retained earnings
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2,661,488 | 2,238,064 | ||||||
Treasury stock at cost (307,750 shares)
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(2,963,918 | ) | (2,963,918 | ) | ||||
Unearned compensation
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(556 | ) | (38,382 | ) | ||||
Accumulated other comprehensive income
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485,835 | 146,107 | ||||||
Total stockholders' equity
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24,066,108 | 23,235,941 | ||||||
Total liabilities and stockholders' equity
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$ | 218,924,236 | $ | 215,732,964 |
First Federal of Northern Michigan Bancorp, Inc. and Subsidiaries
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|||||||
Consolidated Statement of Income
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For the Three Months
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For the Six Months
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|||||||||||||||
Ended June 30,
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Ended June 30,
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|||||||||||||||
2011
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2010
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2011
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2010
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(Unaudited)
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(Unaudited)
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|||||||||||||||
Interest income:
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Interest and fees on loans
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$ | 2,317,197 | $ | 2,552,986 | $ | 4,590,517 | $ | 5,093,399 | ||||||||
Interest and dividends on investments
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Taxable
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134,402 | 106,843 | 229,217 | 239,406 | ||||||||||||
Tax-exempt
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40,011 | 58,455 | 80,339 | 111,267 | ||||||||||||
Interest on mortgage-backed securities
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199,702 | 165,313 | 383,068 | 321,846 | ||||||||||||
Total interest income
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2,691,312 | 2,883,597 | 5,283,141 | 5,765,918 | ||||||||||||
Interest expense:
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||||||||||||||||
Interest on deposits
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407,875 | 601,733 | 845,128 | 1,239,557 | ||||||||||||
Interest on borrowings
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172,681 | 298,657 | 340,755 | 617,239 | ||||||||||||
Total interest expense
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580,556 | 900,390 | 1,185,883 | 1,856,796 | ||||||||||||
Net interest income
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2,110,756 | 1,983,207 | 4,097,258 | 3,909,122 | ||||||||||||
Provision for loan losses
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(19,238 | ) | 594,840 | 48,120 | 605,928 | |||||||||||
Net interest income after provision for loan losses
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2,129,994 | 1,388,367 | 4,049,138 | 3,303,194 | ||||||||||||
Non-interest income:
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||||||||||||||||
Service charges and other fees
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181,228 | 199,340 | 345,719 | 403,514 | ||||||||||||
Mortgage banking activities
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182,463 | 315,223 | 418,446 | 563,315 | ||||||||||||
Gain on sale of investments
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- | 447,387 | - | 496,817 | ||||||||||||
Net gain (loss) on sale of premises and equipment,
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||||||||||||||||
real estate owned and other repossessed assets
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(37,756 | ) | 42,691 | (46,431 | ) | 53,867 | ||||||||||
Other
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67,048 | 260,723 | 124,601 | 326,336 | ||||||||||||
Total non-interest income
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392,983 | 1,265,364 | 842,335 | 1,843,849 | ||||||||||||
Non-interest expense:
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||||||||||||||||
Compensation and employee benefits
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1,159,252 | 1,194,299 | 2,328,188 | 2,365,241 | ||||||||||||
FDIC Insurance Premiums
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51,170 | 94,348 | 122,387 | 188,548 | ||||||||||||
Advertising
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33,817 | 36,103 | 56,838 | 55,992 | ||||||||||||
Occupancy
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267,652 | 288,237 | 537,694 | 600,813 | ||||||||||||
Amortization of intangible assets
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73,112 | 73,112 | 146,225 | 146,225 | ||||||||||||
Service bureau charges
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79,292 | 86,114 | 155,498 | 165,696 | ||||||||||||
Professional services
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133,570 | 149,091 | 221,147 | 252,202 | ||||||||||||
Other
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462,389 | 515,103 | 900,072 | 850,786 | ||||||||||||
Total non-interest expense
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2,260,254 | 2,436,407 | 4,468,049 | 4,625,503 | ||||||||||||
Income before income tax benefit
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262,723 | 217,324 | 423,424 | 521,540 | ||||||||||||
Income tax benefit
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- | (101,913 | ) | - | - | |||||||||||
Net Income
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$ | 262,723 | $ | 319,237 | $ | 423,424 | $ | 521,540 | ||||||||
Per share data:
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||||||||||||||||
Net income per share
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||||||||||||||||
Basic
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0.09 | 0.11 | 0.15 | 0.18 | ||||||||||||
Diluted
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0.09 | 0.11 | 0.15 | 0.18 | ||||||||||||
Weighted average number of shares outstanding
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||||||||||||||||
Basic
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2,884,049 | 2,884,249 | 2,884,049 | 2,884,249 | ||||||||||||
Including dilutive stock options
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2,884,049 | 2,884,249 | 2,884,049 | 2,884,249 | ||||||||||||
Dividends per common share
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- | - | - | - |