SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2013

OR

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                      to                     

Commission File No. 001-35034

Wolverine Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Maryland	27-3939016
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
5710 Eastman Avenue, Midland, Michigan	48640
(Address of Principal Executive Offices)	Zip Code

(989) 631-4280

(Registrant’s telephone number)

N/A

(Former name or former address, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days.    YES  x    NO  ¨.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES  x    NO  ¨.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if smaller reporting company)	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES  ¨    NO  x

The number of shares outstanding of the Registrant’s common stock, $0.01 per share, as of April 30, 2013, was 2,451,776.

Wolverine Bancorp, Inc.

Form 10-Q

Index

		Page
	Part I. Financial Information
Item 1.	Condensed Consolidated Financial Statements
	Condensed Consolidated Balance Sheets as of March 31, 2013 (unaudited) and December 31, 2012		1
	Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2013 and 2012 (unaudited)		2
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2013 and 2012 (unaudited)		3
	Condensed Consolidated Statement of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2013 (unaudited)		4
	Notes to Condensed Consolidated Financial Statements (unaudited)		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		28
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		34
Item 4.	Controls and Procedures		34
	Part II. Other Information
Item 1.	Legal Proceedings		34
Item 1A.	Risk Factors		34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		35
Item 3.	Defaults upon Senior Securities		35
Item 4.	Mine Safety Disclosures		35
Item 5.	Other Information		35
Item 6.	Exhibits		35
	Signature Page		36

Wolverine Bancorp, Inc.

Condensed Consolidated Balance Sheets

(Amounts in Thousands, except per share data)

	March 31,			December 31,
	2013			2012
	(Unaudited)
Assets
Cash and due from banks	$	474		$	455
Interest-earning demand deposits		25,050			16,097
Cash and cash equivalents		25,524			16,552
Held to maturity securities		172			241
Loans held for sale		2,314			2,644
Loans, net of allowance for loan losses of $6,989 and $6,671		250,921			253,838
Premises and equipment, net		1,505			1,526
Federal Home Loan Bank stock		4,391			4,391
Other real estate owned		469			844
Accrued interest receivable		760			811
Other assets		4,396			4,434
Total assets	$	290,452		$	285,281
Liabilities and Stockholders’ Equity
Liabilities
Deposits	$	162,716		$	158,564
Federal Home Loan Bank advances		61,943			61,926
Interest payable and other liabilities		2,839			2,344
Total liabilities		227,498			222,834
Commitments and Contingencies
Stockholders’ Equity
Common Stock, $0.01 par value per share:
Authorized – 100,000,000 shares
Issued and outstanding – 2,451,776 and 2,459,082 at March 31, 2013 and December 31,2012	$	24		$	24
Additional paid-in capital		21,832			21,850
Unearned employee stock ownership plan (ESOP)		(1,767	)		(1,767	)
Retained earnings		42,865			42,340
Total stockholders’ equity		62,954			62,447
Total liabilities and stockholders’ equity	$	290,452		$	285,281

The accompanying notes are an integral part of these condensed financial statements.

1

Wolverine Bancorp, Inc.

Condensed Consolidated Statements of Income and Comprehensive Income

(Amounts in Thousands, except per share data)

	Three Months Ended March 31,
	2013			2012
	(Unaudited)
Interest and Dividend Income
Loans	$	3,310		$	3,542
Investment securities and other		44			95
Total interest and dividend income		3,354			3,637
Interest Expense
Deposits		224			363
Borrowings		582			682
Total interest expense		806			1,045
Net Interest Income		2,548			2,592
Provision for Loan Losses		325			650
Net Interest Income After Provision for Loan Losses		2,223			1,942
Noninterest Income
Service charges and fees		54			73
Net gain on loan sales		536			344
Gross income on real estate owned		8			1
Loan fees (costs) earned		(10	)		66
Net gain (loss) on sale of real estate owned		94			(31	)
Other		53			44
Total noninterest income		735			497
Noninterest Expense
Salaries and employee benefits		1,292			1,080
Net occupancy and equipment expense		178			197
Information technology expense		57			61
Federal deposit insurance corporation premiums		58			72
Professional and services fees		129			156
Other real estate owned expense		18			73
Loan legal expense		47			33
Advertising expense		65			53
Michigan business tax		47			37
Other		268			234
Total noninterest expense		2,159			1,996
Income Before Income Tax		799			443
Provision for Income Taxes		274			152
Net Income and Comprehensive Income	$	525		$	291
Earnings Per Share:
Basic	$	0.23		$	0.13
Diluted	$	0.23		$	0.13

The accompanying notes are an integral part of these condensed financial statements.

2

Wolverine Bancorp, Inc.

Condensed Consolidated Statement of Cash Flows

(Amounts in Thousands)

	Three Months Ended March 31,
	2013			2012
	(Unaudited)
Operating Activities
Net income	$	525		$	291
Items not requiring (providing) cash
Depreciation		51			55
Provision for loan losses		325			650
Amortization of Federal Home Loan Bank advance prepayment penalty		17			17
Gain (loss) on other real estate owned		(94	)		31
Loans originated for sale		(17,174	)		(17,701	)
Proceeds from loans sold		18,009			17,190
Gain on sale of loans		(536	)		(344	)
Share based compensation		82			—
Changes in
Interest receivable and other assets		277			634
Interest payable and other liabilities		339			1,418
Net cash provided by operating activities		1,821			2,241
Investing Activities
Net change in interest-bearing deposits		—			11,091
Proceeds from calls, maturities and pay-downs of held to maturity securities		69			57
Net change in loans		2,592			690
Proceeds from sale of real estate owned		469			158
Purchase of premises and equipment		(31	)		(92	)
Net cash provided by investing activities		3,099			11,904
Financing Activities
Net change in demand deposits, money market, checking and savings accounts		771			5,020
Net change in certificates of deposit		3,381			(4,928	)
Repayment of Federal Home Loan Bank Advances		—			(4,000	)
Purchase of treasury stock		(100	)		(49	)
Net cash provided by (used in) financing activities		4,052			(3,957	)
Increase (Decrease) in Cash and Cash Equivalents		8,972			10,188
Cash and Cash Equivalents, Beginning of Period		16,552			14,123
Cash and Cash Equivalents, End of Period	$	25,524		$	24,311
Supplemental Disclosures of Cash Flows Information
Interest paid	$	2,972		$	1,067
Loans transferred to real estate owned		—			15

The accompanying notes are an integral part of these condensed financial statements.

3

Wolverine Bancorp, Inc.

Condensed Consolidated Statement of Changes in Stockholders’ Equity

(Amounts in Thousands, except share data)

	Common Stock		Additional Paid-in Capital			Unearned ESOP Shares			Retained Earnings		Total Stockholders’ Equity
Balances at January 1, 2013	$	24	$	21,850		$	(1,767	)	$	42,340	$	62,447
Net income		—		—			—			525		525
Purchase of 5,300 shares of common stock		—		(100	)		—			—		(100	)
Share based compensation expense		—		82								82
Balances at March 31, 2013	$	24	$	21,832		$	(1,767	)	$	42,865	$	62,954

The accompanying notes are an integral part of these condensed financial statements.

4

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

Note 1:    Basis of Presentation

The unaudited condensed consolidated financial statements of Wolverine Bancorp, Inc. (the “Company”), the holding company of Wolverine Bank (the “Bank”), have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) believed necessary for a fair presentation have been included. The condensed consolidated balance sheet of the Company as of December 31, 2012 has been derived from the audited consolidated balance sheet of the Company as of that date. Operating results for the three month period ended March 31, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto filed as part of our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on April 1, 2013.

Note 2:    Accounting Developments

Financial Accounting Standards Board (“FASB”)

Accounting Standards Update No. 2013-02; Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. In February 2013, the FASB issued ASU 2013-02 to improve the transparency of reporting reclassifications out of accumulated other comprehensive income. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the Update do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this Update requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP.

The new amendments will require an organization to:

^¡   Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income–but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and

^¡   Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.

The amendments are effective for reporting periods beginning after December 15, 2012. The Company has adopted the methodologies prescribed by this ASU by the date required, and the ASU did not have a material effect on its financial position or results of operations.

Accounting Standards Update No. 2013-01; Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. In January 2013, the FASB issued ASU 2013-01, which clarifies the scope of transactions that are subject to the disclosures about offsetting. The Update clarifies that ordinary trade receivables and receivables are not in the scope of Accounting Standards Update No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.

5

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

Specifically, Update 2011-11 applies only to derivatives repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in FASB Accounting Standards Codification^® or subject to a master netting arrangement or similar agreement. Issued in December 2011, Update 2011-11 was the result of a joint project with the International Accounting Standards Board. Its objective was to improve transparency and comparability between U.S. GAAP and International Financial Reporting Standards by requiring enhanced disclosures about financial instruments and derivative instruments that are either (1) offset on the statement of financial position or (2) subject to an enforceable master netting arrangement or similar agreement. The Board undertook this clarification project in response to concerns expressed by U.S. stakeholders about the standard’s broad definition of financial instruments. After the standard was finalized, companies realized that many contracts have standard commercial provisions that would equate to a master netting arrangement. The Company has adopted the methodologies prescribed by this ASU by the date required, and the ASU did not have a material effect on its financial position or results of operations.

Accounting Standards Update No. 2013-04 – Liabilities (Topic 405). On February 28, 2013, FASB issued ASU 2013-04. The amendments in this Update provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this Update is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP. The amendments in this Update are effective for fiscal years after December 31, 2013. Early adoption is permitted. The Company will adopt the methodologies prescribed by this ASU by the date required, and does not anticipate that the ASU will have a material effect on its financial position or result of operations.

Note 3:    Securities

The amortized cost and approximate fair values of securities are as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Approximate Fair Value
Held to Maturity Securities:
March 31, 2013
Municipal	$	172	$	—	$	—	$	172
December 31, 2012
Municipal	$	241	$	—	$	—	$	241

6

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

The amortized cost and fair value of securities at March 31, 2013, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	March 31, 2013
	Amortized Cost		Fair Value
Within one year	$	—	$	—
One to five years		—		—
Five to ten years		172		172
After ten years		—		—
Totals	$	172	$	172

There were no sales of securities during the three months ended March 31, 2013 and 2012.

Note 4: Loans and Allowance for Loan Losses

Categories of loans include:

	March 31,		December 31,
	2013		2012
Real Estate
One-to four-family	$	54,953	$	58,158
Home equity		11,129		10,790
Commercial mortgage loans
Commercial real estate		108,649		108,087
Multifamily		62,945		60,755
Land		10,065		12,668
Construction		13,369		12,262
Commercial Non-mortgage		3,541		6,739
Consumer		1,195		1,297
Total loans		265,846		270,756
Less
Net deferred loan fees, premiums and discounts		566		585
Undisbursed portion of loans		7,370		9,662
Allowance for loan losses		6,989		6,671
Net loans	$	250,921	$	253,838

7

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

The risk characteristics of each loan portfolio segment are as follows:

1-4 Family, Home Equity, and Consumer

With respect to residential loans that are secured by one-to four-family residences and are primarily owner-occupied, we generally establish a maximum loan-to-value ratio and require PMI if that ratio is exceeded. Home equity loans are typically secured by a subordinate interest in one-to four-family residences, and consumer loans are typically secured by consumer assets such as automobiles or recreational vehicles. Some consumer loans are unsecured such as small installment loans. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Repayment can also be impacted by changes in property values on residential properties.

Home equity loans secured by second mortgages have greater risk than one- to four-family residential mortgage loans secured by first mortgages. We face the risk that the collateral will be insufficient to compensate us for loan losses and costs of foreclosure. When customers default on their loans, we attempt to foreclose on the property and resell the property as soon as possible to minimize foreclosure and carrying costs. However, the value of the collateral may not be sufficient to compensate us for the amount of the unpaid loan and we may be unsuccessful in recovering the remaining balance from those customers. Particularly with respect to our home equity loans, decreases in real estate values could adversely affect the value of property used as collateral for our loans.

Consumer and other loans generally have greater risk compared to longer-term loans secured by improved, owner-occupied real estate, particularly consumer loans that are secured by rapidly depreciable assets, such as automobiles. In these cases, any repossessed collateral for a defaulted loan may not provide an adequate source of repayment of the outstanding loan balance. As a result, consumer loan collections are dependent on the borrower’s continuing financial stability and thus are more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy.

Commercial real estate and multifamily

Commercial real estate and multifamily loans generally have greater credit risk than the owner-occupied one- to four-family residential mortgage loans that we originate for retention in our loan portfolio. Repayment of these loans generally depends, in large part, on sufficient income from the property securing the loan or the borrower’s business to cover operating expenses and debt service. These types of loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to one- to four-family residential mortgage loans. Changes in economic conditions that are beyond the control of the borrower may affect the value of the security for the loan, the future cash flow of the affected property or business, or the marketability of a construction project with respect to loans originated for the acquisition and development of property. Additionally, due to declining property values in our primary market area and in Michigan, the loan to value ratios of many of our commercial real estate and multifamily loans have increased significantly from the loan to value ratios that were assigned to these loans at the time of origination.

Land

Land loans generally have greater credit risk than the owner-occupied one-to four-family residential mortgage loans that we originate for retention in our portfolio. Repayment of these loans generally depends, in large part, on the sale of the land. The sale of land can either take place when the land is undeveloped, or developed. Generally, other cash flow sources of the borrower are utilized to make additional payments on land loans. Changes in economic conditions that are beyond the control of

8

Wolverine Bancorp, Inc.

Form 10-Q

(Amounts in Thousands)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

the borrower may affect the value of the security for the loan, the future cash flow of the affected property or business, or the marketability of a construction project with respect to loans originated for the acquisition and development of property. Additionally, due to declining property values in our primary market area and in Michigan, the loan to value ratios of many of our land loans have increased significantly from the loan to value ratios that were assigned to these loans at the time of origination.

Construction

Construction loans include those for one- to four-family residential properties and commercial properties, including multifamily loans and commercial “mixed-use” buildings and homes built by developers on speculation. With respect to construction loans for one- to four-family residential properties and which are primarily owner-occupied, we generally establish a maximum loan-to-value ratio and require PMI if that ratio is exceeded. These are generally “interest-only” loans during the construction period which typically does not exceed nine months. Construction loans for commercial real estate are made in accordance with a schedule reflecting the cost of construction, and are generally limited to a 75% loan-to-completed appraised value ratio. For all construction loans, we generally require that a commitment for permanent financing be in place prior to closing the construction loan

Repayment of one-to four-family residential property loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Repayment of commercial property loans and homes built by developers on speculation is normally expected from the property’s eventual rental income, income from the borrower’s operations, the personal resources of the guarantor, or the sale of the subject property. Generally, before making a commitment to fund a construction loan, we require an appraisal of the property by a state-certified or state-licensed appraiser. We generally review and inspect properties before disbursement of funds during the term of the construction loan.

Construction financing generally involves greater credit risk than long-term financing on improved, owner-occupied real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the value of the property at completion of construction compared to the estimated cost (including interest) of construction and other assumptions. If the estimate of construction cost is inaccurate, we may be required to advance additional funds beyond the amount originally committed in order to protect the value of the property. Moreover, if the estimated value of the completed project is inaccurate, the borrower may hold a property with a value that is insufficient to assure full repayment of the construction loan upon the sale of the property. Construction loans also expose us to the risk that improvements will not be completed on time in accordance with specifications and projected costs. In addition, the ultimate sale or rental of the property may not occur as anticipated.

Commercial non-mortgage

Commercial non-mortgage loans generally have a greater credit risk than residential mortgage loans. Unlike residential mortgage loans, which generally are made on the basis of the borrower’s ability to make repayment from his or her employment and other income, and which are secured by real property whose value tends to be more easily ascertainable, commercial non-mortgage loans are of higher risk and typically are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business. As a result, the availability of funds for the repayment of commercial non-mortgage loans may be substantially dependent on the success of the business itself. Further, the collateral securing the loans may depreciate over time, may be difficult to appraise and may fluctuate in value based on the success of the business.

9

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

In determining the appropriate level of allowance for loan loss, we analyze various components of our portfolio. The following components are analyzed: all substandard loans on an individual basis; all loans that are designated special mention or closely monitored; loans not classified according to purpose or collateral type; and overdrawn deposit account balances.

We also factor in historical loss experience and qualitative considerations, including trends in charge offs and recoveries; trends in delinquencies and impaired/classified loans; effects of credit concentrations; changes in underwriting standards and loan review system; experience in lending staff; current industry conditions; and current market conditions.

In instances where risk and loss exposure is clearly identified with a particular asset, the asset or a portion of the asset will be charged off.

The following tables present the balance in the allowance for loan losses and the recorded investment in loans based on portfolio segment and impairment method as of March 31, 2013, December 31, 2012 and March 31, 2012:

Loan Class	1-4 Family			Home Equity		Commercial Real Estate		Multifamily		Land			Construction		Commercial Non- Mortgage			Consumer			Total
Year to date analysis as of March 31, 2013
Allowance for loan losses:
Balance, beginning of year	$	1,433		$	266	$	2,663	$	1,497	$	312		$	302	$	166		$	32		$	6,671
Provision charged to expense		21			26		193		158		(47	)`		49		(73	)		(2	)		325
Losses charged off		(12	)		—		—		—		—			—		—			—			(12	)
Recoveries		3			—		—		—		—			—		—			2			5
Balance, end of period	$	1,445		$	292	$	2,856	$	1,655	$	265		$	351	$	93		$	32		$	6,989
Ending Balance: individually evaluated for impairment	$	9		$	—	$	228	$	48	$	100		$	—	$	15		$	—		$	400
Ending balance: collectively evaluated for impairment	$	1,436		$	292	$	2,628	$	1,607	$	165		$	351	$	78		$	32		$	6,589
Loans:
Ending Balance	$	54,953		$	11,129	$	108,649	$	62,945	$	10,065		$	13,369	$	3,541		$	1,195		$	265,846
Ending Balance: individually evaluated for impairment	$	2,809		$	—	$	10,955	$	9,449	$	4,693		$	80	$	837		$	—		$	28,823
Ending Balance: collectively evaluated for impairment	$	52,144		$	11,129	$	97,694	$	54,296	$	5,372		$	13,289	$	2,704		$	1,195		$	237,823

10

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

Loan Class	1-4 Family			Home Equity			Commercial Real Estate			Multifamily			Land			Construction			Commercial Non- Mortgage			Consumer			Total
Year to date analysis as of December 31, 2012
Allowance for loan losses:
Balance, beginning of year	$	1,580		$	290		$	3,462		$	1,933		$	1,622		$	423		$	165		$	28		$	9,503
Provision charged to expense		(58	)		(40	)		502			750			1,083			(119	)		85			2			2,205
Losses charged off		(116	)		—			(1,337	)		(1,241	)`		(2,393	)		(2	)		(84	)		(4	)		(5,177	)
Recoveries		27			16			36			55			—			—			—			6			140
Balance, end of period	$	1,433		$	266		$	2,663		$	1,497		$	312		$	302		$	166		$	32		$	6,671
Ending Balance: individually evaluated for impairment	$	—		$	—		$	—		$	—		$	100		$	—		$	—		$	—		$	100
Ending balance: collectively evaluated for impairment	$	1,433		$	266		$	2,663		$	1,497		$	212		$	302		$	166		$	32		$	6,571
Loans:
Ending Balance	$	58,158		$	10,790		$	108,087		$	60,755		$	12,668		$	12,262		$	6,739		$	1,297		$	270,756
Ending Balance: individually evaluated for impairment	$	2,583		$	—		$	7,645		$	7,324		$	4,994			—		$	277		$	21		$	22,844
Ending Balance: collectively evaluated for impairment	$	55,575		$	10,790		$	100,442		$	53,431		$	7,674		$	12,262		$	6,462		$	1,276		$	247,912

11

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

Loan Class	1-4 Family			Home Equity		Commercial Real Estate			Multifamily			Land			Construction			Commercial Non- Mortgage		Consumer			Total
As of March 31, 2012
Allowance for loan losses:
Balance, beginning of year	$	1,580		$	290	$	3,462		$	1,933		$	1,622		$	423		$	165	$	28		$	9,503
Provision charged to expense		51			11		41			518			42			(31	)		19		(1	)		650
Losses charged off		(61	)		—		(1,253	)		(1,241	)		(1,386	)		(2	)		—		(1	)		(3,944	)
Recoveries		20			15		—			12			—			—			—		2			49
Balance, end of period	$	1,590		$	316	$	2,250		$	1,222		$	278		$	390		$	184	$	28		$	6,258
Ending Balance: individually evaluated for impairment	$	—		$	—	$	—		$	—		$	—		$	—		$	—	$	—		$	—
Ending balance: collectively evaluated for impairment	$	1,590		$	316	$	2,250		$	1,222		$	278		$	390		$	184	$	28		$	6,258
Loans:
Ending Balance	$	65,543		$	13,024	$	92,682		$	50,343		$	11,429		$	16,066		$	7,570	$	1,167		$	257,824
Ending Balance: individually evaluated for impairment	$	2,328		$	171	$	5,993		$	8,988		$	7,244		$	—		$	374	$	—		$	25,098
Ending Balance: collectively evaluated for impairment	$	63,215		$	12,853	$	86,689		$	41,355		$	4,185		$	16,066		$	7,196	$	1,167		$	232,726

12

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

Consistent with regulatory guidance, charge offs on all loan segments are taken when specific loans, or portions thereof, are considered uncollectible. Our policy is to promptly charge these loans off in the period the uncollectible loss is reasonably determined.

For all loan portfolio segments except one-to-four family residential loans and consumer loans, we promptly charge off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For impaired loans that are considered to be solely collateral dependent, a partial charge off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral.

We charge off one-to-four family residential and consumer loans, or portions thereof, when we reasonably determine the amount of the loss. We adhere to timeframes established by applicable regulatory guidance which provides for the charge off of one-to-four family first and junior lien mortgages to the net realizable value less costs to sell when the loan is 180 days past due, charge off of unsecured open-end loans when the loan is 180 days past due, and charge down to the net realizable value when other secured loans are 120 days past due. Loans at these respective delinquency thresholds for which we can clearly document that the loan is both well-secured and in the process of collection, such that collection will occur regardless of delinquency status, need not be charged off.

13

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

The following table presents the credit risk profile of our loan portfolio based on rating category and payment activity as of March 31, 2013 and December 31, 2012:

	1-4 Family				Home Equity				Commercial Real Estate				Multifamily
	2013		2012		2013		2012		2013		2012		2013		2012
Pass	$	49,862	$	52,857	$	11,042	$	10,719	$	85,722	$	84,434	$	48,057	$	45,160
Pass (Closely Monitored)		2,468		2,839		87		71		7,011		7,793		5,946		6,017
Special Mention		1,052		955		—		—		7,317		6,635		3,998		4,016
Substandard		1,571		1,507		—		—		8,599		9,225		4,944		5,562
Doubtful		—		—		—		—		—		—		—		—
Loss		—		—		—		—		—		—		—		—
	$	54,953	$	58,158	$	11,129	$	10,790	$	108,649	$	108,087	$	62,945	$	60,755

	Land				Construction				Commercial Non- Mortgage				Consumer				Total
	2013		2012		2013		2012		2013		2012		2013		2012		2013		2012
Pass	$	4,020	$	6,088	$	13,289	$	11,936	$	2,526	$	6,304	$	1,174	$	1,276	$	215,693	$	218,773
Pass (Closely Monitored)		1,352		1,187		—		—		65		68		21		—		16,949		17,975
Special Mention		—		606		80		326		113		90		—		—		12,560		12,628
Substandard		4,693		4,787		—		—		837		277		—		21		20,644		21,380
Doubtful		—		—		—		—		—		—		—		—		—		—
Loss		—		—		—		—		—		—		—		—		—		—
	$	10,065	$	12,668	$	13,369	$	12,262	$	3,541	$	6,739	$	1,195	$	1,297	$	265,846	$	270,756

We categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation and current economic trends, among other factors. We analyze loans individually by classifying the loans as to credit risk. This analysis is performed during the loan approval process and is updated as circumstances warrant.

The Pass asset quality rating encompasses assets that have performed as expected. These assets generally do not have delinquency or servicing issues. Loans assigned this rating include loans to borrowers possessing solid credit quality with acceptable risk. Borrowers in these grades are differentiated from higher grades on the basis of size (capital and/or revenue), leverage, asset quality, stability of the industry or specific market area and quality/coverage of collateral. These borrowers generally have a history of consistent earnings and reasonable leverage.

14

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

The Closely Monitored asset quality rating encompasses assets that have been brought to the attention of management and may, if not corrected, warrant a more serious quality rating by management. These assets are usually in the first phase of a deficiency situation and may possess similar criteria as Special Mention assets. This grade includes loans to borrowers which require special monitoring because of deteriorating financial results, declining credit ratings, decreasing cash flow, increasing leverage, marginal collateral coverage or industry stress that has resulted or may result in a changing overall risk profile.

The Special Mention asset quality rating encompasses assets that have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. This grade is intended to include loans to borrowers whose credit quality has clearly deteriorated and where risk of further decline is possible unless active measures are taken to correct the situation. Weaknesses are considered potential at this state and are not yet fully defined.

The Substandard asset quality rating encompasses assets that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any; assets having a well-defined weakness(es) based upon objective evidence; assets characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected; or the possibility that liquidation will not be timely. Loans categorized in this grade possess a well defined credit weakness and the likelihood of repayment from the primary source is uncertain. Significant financial deterioration has occurred and very close attention is warranted to ensure the full repayment without loss. Collateral coverage may be marginal and the accrual of interest has been suspended.

The Doubtful asset quality rating encompasses assets that have all of the weaknesses of those classified as Substandard. In addition, these weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

The Loss asset quality rating encompasses assets that are considered uncollectible and of such little value that their continuance as assets of the Bank is not warranted. A loss classification does not mean that an asset has no recovery or salvage value; instead, it means that it is not practical or desirable to defer writing off or reserving all or a portion of a basically worthless asset, even though partial recovery may be realized in the future.

15

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

The following table is a summary of our past due and non-accrual loans as of March 31, 2013 and December 31, 2012:

As of March 31, 2013:	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans>90 Days & Accruing		Total Nonaccrual
1-4 Family	$	26	$	317	$	262	$	605	$	54,348	$	54,953	$	—	$	397
Home Equity		—		—		54		54		11,075		11,129		—		—
Commercial Real Estate		795		—		716		1,510		107,139		108,649		—		1,789
Multifamily		—		—		—		—		62,945		62,945		—		—
Land		—		—		4,609		4,609		5,456		10,065		—		4,926
Construction		—		—		—		—		13,369		13,369		—		80
Commercial Non-Mortgage		53		—		277		331		3,210		3,541		—		277
Consumer		—		—		—		—		1,195		1,195		—		—
Total	$	874	$	317	$	5,918	$	7,109	$	258,737	$	265,846	$	—	$	7,469

As of December 31, 2012:	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivable		Total Loans>90 Days & Accruing		Total Nonaccrual
1-4 Family	$	166	$	—	$	344	$	510	$	57,648	$	58,158	$	—	$	503
Home Equity		—		—		—		—		10,790		10,790		—		—
Commercial Real Estate		1,551		29		721		2,301		105,786		108,087		—		2,013
Multifamily		—		—		—		—		60,755		60,755		—		—
Land		—		—		4,667		4,667		8,001		12,668		—		4,720
Construction		—		—		—		—		12,262		12,262		—		—
Commercial Non-Mortgage		—		—		277		277		6,462		6,739		—		278
Consumer		—		—		—		—		1,297		1,297		—		—
Total	$	1,717	$	29	$	6,009	$	7,755	$	263,001	$	270,756	$	—	$	7,514

Nonaccrual Loan and Past Due Loans. The accrual of interest is discontinued on all loan classes at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful. The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date.

16

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. Subsequent payments on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. We generally require a period of satisfactory performance of not less than six months before returning a nonaccrual loan to accrual status.

A loan is considered impaired, in accordance with the impairment accounting guidance (ASC 310-10-35-16), when based on current information and events, it is probable we will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include non-performing commercial loans but also include loans modified in troubled debt restructurings where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. Interest income on loans individually classified as impaired is recognized on a cash basis after all past due and current principal payments have been made.

17

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

The following tables present impaired loans at March 31, 2013:

As of March 31, 2013	Recorded Balance		Unpaid Principal Balance		Specific Allowance		QTD Average Balance		QTD Interest Income
Loans without a specific valuation allowance
1-4 Family	$	2,629	$	2,838	$	—	$	2,823	$	130
Home Equity		—		—		—		—		—
Commercial Real Estate		6,822		9,065		—		6,912		65
Multifamily		8,609		9,423		—		9,615		88
Land		1,866		3,156		—		5,873		83
Construction		80		82		—		28		—
Commercial Non-Mortgage		277		372		—		277		3
Consumer		—		—		—		—		—
Loans with a specific valuation allowance
1-4 Family	$	180	$	181	$	9	$	182	$	—
Home Equity		—		—		—		—		—
Commercial Real Estate		4,133		4,133		228		3,766		20
Multifamily		840		840		48		843		—
Land		2,827		4,724		100		1,947		50
Construction		—		—		—		—		—
Commercial Non-Mortgage		560		559		15		560		6
Consumer		—		—		—		—		—
Total
1-4 Family	$	2,809	$	3,019	$	9	$	3,005	$	130
Home Equity		—		—		—		—		—
Commercial Real Estate		10,955		13,198		228		10,678		85
Multifamily		9,449		10,263		48		10,458		88
Land		4,693		7,880		100		7,820		133
Construction		80		82		—		28		—
Commercial Non-Mortgage		837		931		15		837		9
Consumer		—		—		—		—		—
Total	$	28,823	$	35,373	$	400	$	32,826	$	396

18

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

The following tables present impaired loans at December 31, 2012:

	Recorded Balance		Unpaid Principal Balance		Specific Allowance		YTD Average Balance		YTD Interest Income
Loans without a specific valuation allowance
1-4 Family	$	2,583	$	2,779	$	—	$	2,308	$	146
Home Equity		—		—		—		128		—
Commercial Real Estate		7,645		9,626		—		8,730		449
Multifamily		7,324		8,333		—		9,064		474
Land		1,047		3,015		—		1,607		175
Construction		—		2		—		85		—
Commercial Non-Mortgage		277		372		—		376		13
Consumer		21		21		—		4		—
Loans with a specific valuation allowance
1-4 Family	$	—	$	—	$	—	$	279	$	—
Home Equity		—		—		—		—		—
Commercial Real Estate		—		—		—		1,238		—
Multifamily		—		—		—		1,912		—
Land		3,947		5,219		100		7,153		210
Construction		—		—		—		—		—
Commercial Non-Mortgage		—		—		—		—		—
Consumer		—		—		—		—		—
Totals
1-4 Family	$	2,583	$	2,779	$	—	$	2,587	$	146
Home Equity		—		—		—		128		—
Commercial Real Estate		7,645		9,626		—		9,968		449
Multifamily		7,324		8,333		—		10,976		474
Land		4,994		8,234		100		8,760		385
Construction		—		2		—		85		—
Commercial Non-Mortgage		277		372		—		376		13
Consumer		21		21		—		4		—
Total	$	22,844	$	29,367	$	100	$	32,884	$	1,467

19

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

The following tables present impaired loans at March 31, 2012:

As of March 31, 2012	Recorded Balance		Unpaid Principal Balance		Specific Allowance		QTD Average Balance		QTD Interest Income
Loans w/o a specific valuation allowance
1-4 Family	$	2,328	$	2,472	$	—	$	2,775	$	35
Home Equity		171		276		—		314		5
Commercial Real Estate		5,993		8,123		—		8,499		120
Multifamily		8,988		9,809		—		9,827		153
Land		7,244		9,391		—		9,323		107
Construction		—		—		—		117		—
Commercial Non-Mortgage		374		374		—		375		3
Consumer		—		—		—		—		—
Loans w/ a specific valuation allowance
1-4 Family	$	—	$	—	$	—	$	—	$	—
Home Equity		—		—		—		—		—
Commercial Real Estate		—		—		—		—		—
Multifamily		—		—		—		—		—
Land		—		—		—		—		—
Construction		—		—		—		—		—
Commercial Non-Mortgage		—		—		—		—		—
Consumer		—		—		—		—		—
Total
1-4 Family	$	2,328	$	2,472	$	—	$	2,775	$	35
Home Equity		171		276		—		314		5
Commercial Real Estate		5,993		8,123		—		8,499		120
Multifamily		8,988		9,809		—		9,827		153
Land		7,244		9,391		—		9,323		107
Construction		—		—		—		117		—
Commercial Non-Mortgage		374		374		—		375		3
Consumer		—		—		—		—		—
Total	$	25,098	$	30,445	$	—	$	31,230	$	423

20

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assumed, in which case interest is recognized on a cash basis and is reasonable compared to interest income noted above.

Troubled Debt Restructuring (TDR)

We may grant a concession or modification for economic or legal reasons related to a borrower’s financial condition that we would not otherwise consider resulting in a modified loan which is then identified as a troubled debt restructuring. We may modify loans through rate reductions, short-term extensions of maturity, interest only payments, or payment modifications to better match the timing of cash flows due under the modified terms with the cash flows from the borrowers’ operations. Loan modifications are intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral.

We identify loans for potential restructure primarily through direct communication with the borrower and evaluation of the borrower’s financial statements, revenue projections, tax returns, and credit reports. Even if the borrower is not presently in default, management will consider the likelihood that cash flow shortages, adverse economic conditions, and negative trends may result in a payment default in the near future.

For one-to-four family residential and home equity lines of credit, a restructure often occurs with past due loans and may be offered as an alternative to foreclosure. There are other situations where borrowers, who are not past due, experience a sudden job loss, become over-extended with credit obligations, or other problems, have indicated that they will be unable to make the required monthly payment and request payment relief.

When considering a loan restructure, management will determine if: (i) the financial distress is short or long term; (ii) loan concessions are necessary; and (iii) the restructure is a viable solution.

When a loan is restructured, the new terms often require a reduced monthly debt service payment. No TDRs that were on non-accrual status at the time the concessions were granted have been returned to accrual status. For commercial loans, management completes an analysis of the operating entity’s ability to repay the debt. If the operating entity is capable of servicing the new debt service requirements and the underlying collateral value is believed to be sufficient to repay the debt in the event of a future default, the new loan can be placed on accrual status after six months of performance with the new loan terms. To date, there have been no commercial loans restructured and immediately placed on accrual status after the execution of the TDR.

For retail loans, an analysis of the individual’s ability to service the new required payments is performed. If the borrower is capable of servicing the newly restructured debt and the underlying collateral value is believed to be sufficient to repay the debt in the event of a future default, the new loan can be placed on accrual status after six months of performance to the new loan terms. The reason for the TDR is also considered, such as paying past due real estate taxes or payments caused by a temporary job loss, when determining whether a retail TDR loan could be returned to accrual status. Retail TDRs remain on nonaccrual status until sufficient payments have been made to bring the past due principal and interest current and/or after six months of performance to the new loan terms at which point the loan could be transferred to accrual status.

21

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

There were no loans that were restructured as TDRs for the three months ending March 31, 2013.

The following table summarizes the loans that were restructured as TDRs during the three months ended March 31, 2012:

	Three Months Ended March 31, 2012
	Count		Balance prior to TDR		Balance after TDR
	(Dollars in thousands)
Commercial real estate		2	$	139	$	145
Total loans		2	$	139	$	145

We had no TDRs that had payment defaults during the quarters ended March 31, 2013 and March 31, 2012. Default occurs when a TDR is 90 days or more past due, transferred to nonaccrual status, or transferred to other real estate owned within twelve months of restructuring.

Management monitors the TDRs based on the type of modification or concession granted to the borrower. These types of modifications may include rate reductions, payment/term extensions, forgiveness of principal, forbearance, and other applicable actions. During the three months ended March 31, 2013, management predominantly utilized rate reductions and lower monthly payments, either from a longer amortization period or interest only repayment schedule, because these concessions provide needed payment relief without risking the loss of principal. Management will also agree to a forbearance agreement when it is deemed appropriate to avoid foreclosure.

Note 5:    Disclosures About Fair Value of Assets and Liabilities

ASC Topic 820, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Topic 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1	Quoted prices in active markets for identical assets or liabilities.
Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

22

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

Following is a description of the valuation methodologies used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets under the valuation hierarchy. We have no assets or liabilities measured at fair value on a recurring basis and no liabilities measured at fair value on a nonrecurring basis.

Transfers between Levels

There were no transfers between Levels 1, 2 and 3 during the three months ended March 31, 2013 and 2012.

Nonrecurring Measurements

The following table presents the fair value measurements of assets and liabilities recognized in the accompanying consolidated balance sheets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2013 and December 31, 2012.

			Fair Value Measurements Using
	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
March 31, 2013
Impaired loans	$	6,983	$	—	$	—	$	6,983
December 31, 2012
Impaired loans	$	15,562	$	—	$	—	$	15,562

Collateral-dependent Impaired Loans

The estimated fair value of collateral-dependent impaired loans is based on the appraised fair value of the collateral, less estimated cost to sell. Collateral-dependent impaired loans are classified within Level 3 of the fair value hierarchy.

The Company considers the appraisal or an evaluation as the starting point for determining fair value and then considers other factors and events in the environment that may affect the fair value. Appraisals of the collateral underlying collateral-dependent loans are obtained when the loan is determined to be collateral-dependent or subsequently as deemed necessary and approved by management. Appraisals are reviewed for accuracy and consistency by the Credit Analysis department. Typically, appraisers are selected from the list of approved appraisers maintained by the Underwriting department. The appraised values may be reduced by discounts to consider a lack of marketability or estimated cost to sell if repayment or satisfaction of the loan is dependent on the sale of the collateral. These discounts and estimates are developed by the Credit Analysis department and approved by management.

23

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

Unobservable (Level 3) inputs

The following tables present quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements other than good will at March 31, 2013 and December 31, 2012.

	Collateral-dependent Impaired Loans
	Fair Value		Valuation Technique	Unobservable Inputs	Range (Weighted Average)
As of March 31, 2013	$	6,983	Market comparable properties	Marketability discount	0% - 36%  (12.7%)
As of December 31, 2012	$	15,562	Market comparable properties	Marketability discount	0% - 32%  (11%)

Fair Value of Financial Instruments

The following table presents estimated fair values of the Company’s financial instruments and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2013.

			Fair Value Measurements Using
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets
Cash and cash equivalents	$	25,524	$	25,524	$	—	$	—
Held to maturity securities		172		—		172		—
Loans held for sale		2,314		—		2,379		—
Loans, net of allowance for loan losses		250,921		—		—		254,837
Federal Home Loan Bank stock		4,391		—		4,391		—
Interest receivable		760		—		759		—
Financial liabilities
Deposits		162,716		98,477		—		64,946
Federal Home Loan Bank advances		61,943		—		70,208		—
Interest payable		108		—		108		—

24

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

The following table presents estimated fair values of our financial instruments recognized in the accompanying consolidated balance sheets at amounts other than fair value. The fair values of certain of these instruments were calculated by discounting expected cash flows, which involves significant judgments by management and uncertainties. Because no market exists for certain of these financial instruments and because management does not intend to sell these financial instruments, we do not know whether the fair values shown below represent values at which the respective financial instruments could be sold individually or in the aggregate.

			Fair Value Measurements Using
	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
As of December 31, 2012
Financial assets
Cash and cash equivalents	$	16,552	$	16,552	$	—	$	—
Held to maturity securities		241		—		241		—
Loans held for sale		2,644		—		2,711		—
Loans, net of allowance for loan losses		253,838		—		—		259,539
Federal Home Loan Bank stock		4,391		—		4,391		—
Interest receivable		811		—		811		—
Financial liabilities
Deposits		158,564		93,270		—		65,953
Federal Home Loan Bank advances		61,926		—		70,896		—
Interest payable		138		—		138		—

The following methods and assumptions were used to estimate the fair value of all other financial instruments recognized in the accompanying consolidated balance sheets at amounts other than fair value.

Cash and Cash Equivalents, Interest-Earning Time Deposits, Federal Home Loan Bank Stock, Interest Receivable and Interest Payable

The carrying amount approximates fair value.

Held to Maturity Securities

Fair values equal quoted market prices, if available. If quoted market prices are not available, fair value is estimated based on quoted market prices of similar securities.

Loans Held for Sale

Fair value is estimated using quoted market prices from the secondary market.

25

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

Loans

The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans with similar characteristics were aggregated for purposes of the calculations.

Deposits

Deposits include demand deposits, savings accounts, checking accounts and certain money market deposits. The carrying amount approximates fair value. The fair value of fixed-maturity time deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities.

Federal Home Loan Bank Advances

Rates currently available to us for debt with similar terms and remaining maturities are used to estimate the fair value of existing debt.

Commitments to Originate Loans, Letters of Credit and Lines of Credit

Loan commitments and letters-of-credit generally have short-term, variable rate features and contain clauses which limit our exposure to changes in customer credit quality. Accordingly, their carrying values, which are immaterial at the respective balance sheet dates, are reasonable estimates of fair value.

Note 6:    Earnings Per Share (In thousands except per share amounts)

	Three Months Ended March 31, 2013			Three Months Ended March 31, 2012
Net income	$	525		$	291
Dividends and undistributed earnings allocated to participating securities		(17	)		—
Income attributable to common shareholders	$	508		$	291
Weighted average shares outstanding		2,455			2,507
Less: average unearned ESOP and unvested restricted stock		(254	)		(189	)
Average shares		2,201			2,318
Effect of diluted based awards		—			—
Average common and common-equivalent shares for diluted EPS		2,201			2,318
Basic EPS	$	.23		$	.13
Diluted EPS	$	.23		$	.13

26

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

Note 7:    Share-Based Compensation

In May 2012, the Company’s stockholders approved the Wolverine Bancorp, Inc. 2012 Equity Incentive Plan (“Plan”) which provides for awards of stock options and restricted stock to key officers and outside directors. The cost of the Plan is based on the fair value of the awards on the grant date. The fair value of restricted stock awards is based on the closing price of the Company’s stock on the grant date. The fair value of stock options is estimated using a Black-Scholes option pricing model using assumptions for dividend yield, stock price volatility, risk-free interest rate, and option term. These assumptions are based on management’s judgments regarding future events, are subjective in nature, and contain uncertainties inherent in an estimate. The cost of the awards are being recognized on a straight-line basis over the five-year vesting period during which participants are required to provide services in exchange for the awards.

Until such time as awards of stock are granted and vest or options are exercised, shares of the Company’s common stock under the Plan shall be authorized but unissued shares. The maximum number of shares authorized under the plan is 351,050. Total share-based compensation expense for the three months ended March 31, 2013 was $82,000.

Stock Options

The table below presents the stock option activity for the period shown:

	Options		Weighted average exercise price		Remaining contractual life (years)
Options outstanding at January 1, 2013		141,617	$	17.30		10
Granted		—		—		—
Exercised		—		—		—
Forfeited		2,507		17.30		—
Expired		—		—		—
Exercisable, end of year		—		—		—
Options outstanding at March 31, 2013		139,110	$	17.30		10

As of March 31, 2013, the Company had $307,000 of unrecognized compensation expense related to stock options. The cost of stock options will be amortized in monthly installments over the five-year vesting period. Stock option expense for the quarter ended March 31, 2013 was $19,000. The aggregate grant date fair value of the stock options was $355,000. The total intrinsic value of options as of March 31, 2013, was $206,000.

27

Wolverine Bancorp, Inc.

Form 10-Q

(Table Amounts in Thousands Except Per Share Amounts)

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

Restricted Stock Awards

Restricted stock awards are accounted for as fixed grants using the fair value of the Company’s stock at the time of grant. Unvested restricted stock awards may not be disposed of or transferred during the vesting period. Restricted stock awards carry with them the right to receive dividends.

The table below presents the restricted stock award activity for the period shown:

	Service- Based Restricted stock awards		Weighted average grant date fair value
Non-vested at January 1, 2013		75,223	$	17.30
Granted		—		—
Vested		—		—
Forfeited		2,006		17.30
Non-vested at March 31, 2013		73,217	$	17.30

As of March 31, 2013, the Company had $1.1 million of unrecognized compensation expense related to restricted stock awards. The cost of the restricted stock awards will be amortized in monthly installments over the five-year vesting period. Restricted stock expense for the three months ended March 31, 2013 was $63,000.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

Management’s discussion and analysis of the financial condition and results of operations at the three months ended March 31, 2013 and 2012 is intended to assist in understanding our financial condition and results of operations. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto, appearing on Part I, Item 1 of this quarterly report on Form 10-Q.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) is designed to provide a narrative on our financial condition, results of operations, liquidity, critical accounting policies, off-balance sheet arrangements and the future impact of accounting standards. It is useful to read our MD&A in conjunction with the consolidated financial statements contained in Part I in this Quarterly Report on Form 10-Q (this “Form 10-Q”), our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 (the “Form 10-K”), and our other reports on Forms 10-Q and current reports on Forms 8-K and other publicly available information

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect,” “will,” “may” and words of similar meaning. These forward-looking statements include, but are not limited to:

• statements of our goals, intentions and expectations;

• statements regarding our business plans, prospects, growth and operating strategies;

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• statements regarding the asset quality of our loan and investment portfolios; and

• estimates of our risks and future costs and benefits.

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this quarterly report.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

• general economic conditions, either nationally or in our market areas, that are worse than expected;

• competition among depository and other financial institutions;

• changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments;

• adverse changes in the securities markets;

• changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;

• our ability to enter new markets successfully and capitalize on growth opportunities;

• our ability to successfully integrate acquired entities, if any;

• changes in consumer spending, borrowing and savings habits;

• changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board;

• changes in our organization, compensation and benefit plans;

• changes in our financial condition or results of operations that reduce capital; and

• changes in the financial condition or future prospects of issuers of securities that we own.

Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.

Critical Accounting Policies

We consider accounting policies that require management to exercise significant judgment or discretion or make significant assumptions that have, or could have, a material impact on the carrying value of certain assets or on income, to be critical accounting policies. We consider the following to be our critical accounting policies.

Allowance for Loan Losses. We believe that the allowance for loan losses and related provision for loan losses are particularly susceptible to change in the near term, due to changes in credit quality which are evidenced by trends in charge offs and in the volume and severity of past due loans. In addition, our portfolio is comprised of a substantial amount of commercial real estate loans which generally have greater credit risk than one- to four-family residential mortgage and consumer loans because these loans generally have larger principal balances and are non-homogenous.

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The allowance for loan losses is maintained at a level to cover probable credit losses inherent in the loan portfolio at the balance sheet date. Based on our estimate of the level of allowance for loan losses required, we record a provision for loan losses as a charge to earnings to maintain the allowance for loan losses at an appropriate level. The estimate of our credit losses is applied to two general categories of loans:

• loans that we evaluate individually for impairment under ASC 310-10, “Receivables;” and

• groups of loans with similar risk characteristics that we evaluate collectively for impairment under ASC 450-20, “Loss Contingencies.”

The allowance for loan losses is evaluated on a regular basis by management and reflects consideration of all significant factors that affect the collectability of the loan portfolio. The factors used to evaluate the collectability of the loan portfolio include, but are not limited to, current economic conditions, our historical loss experience, the nature and volume of the loan portfolio, the financial strength of the borrower, and estimated value of any underlying collateral. This evaluation is inherently subjective as it requires estimates that are subject to significant revision as more information becomes available. Actual loan losses may be significantly more than the allowance for loan losses we have established which could have a material negative effect on our financial results. See also “Business of Wolverine Bank—Allowance for Loan Losses.”

Income Tax Accounting. The provision for income taxes is based upon income in our consolidated financial statements, rather than amounts reported on our income tax return. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on our deferred tax assets and liabilities is recognized as income or expense in the period that includes the enactment date. Under U.S. GAAP, a valuation allowance is required to be recognized if it is more likely than not that a deferred tax asset will not be realized. The determination as to whether we will be able to realize the deferred tax assets is highly subjective and dependent upon judgment concerning our evaluation of both positive and negative evidence, our forecasts of future income, applicable tax planning strategies, and assessments of current and future economic and business conditions. Positive evidence includes the existence of taxes paid in available carryback years as well as the probability that taxable income will be generated in future periods, while negative evidence includes any cumulative losses in the current year and prior two years and general business and economic trends. Any reduction in estimated future taxable income may require us to record a valuation allowance against our deferred tax assets. Any required valuation allowance would result in additional income tax expense in the period and could have a significant impact on our future earnings. Positions taken in our tax returns may be subject to challenge by the taxing authorities upon examination. The benefit of an uncertain tax position is initially recognized in the financial statements only when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions are both initially and subsequently measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement with the tax authority, assuming full knowledge of the position and all relevant facts. Differences between our position and the position of tax authorities could result in a reduction of a tax benefit or an increase to a tax liability, which could adversely affect our future income tax expense.

We believe our tax policies and practices are critical accounting policies because the determination of our tax provision and current and deferred tax assets and liabilities have a material impact on our net income and the carrying value of our assets. We believe our tax liabilities and assets are properly recorded in the consolidated financial statements at March 31, 2013 and December 31, 2012 and no valuation allowance was necessary.

30

Comparison of Financial Condition at March 31, 2013 and December 31, 2012

Total assets increased $5.0 million, or 1.8%, to $290.4 million at March 31, 2013 from $285.3 million at December 31, 2012. The increase resulted from an increase of $9.0 million in interest-earning demand deposits, offset in part by a decrease of $2.9 million in net loans.

Cash and cash equivalents increased $9.0 million, or 54.2%, to $25.5 million at March 31, 2013 from $16.6 million at December 31, 2012. The increase was a result of an increase of $9.0 million, or 55.6%, in interest-earning demand deposits, due to increased funds in our Federal Reserve and cash management accounts attributable an increase in deposits and a decrease in loans.

Loans held for sale decreased $330,000, or 12.5%, to $2.3 million at March 31, 2013 from $2.6 million at December 31, 2012. The decrease was attributable to lower loan volume occurring as a result of seasonal demand fluctuations in the housing market.

Net loans decreased $2.9 million, or 1.1%, to $251.0 million at March 31, 2013 from $253.8 million at December 31, 2012. The loan portfolio decreased primarily as a result of commercial non-mortgage loans decreasing $3.2 million or 47.5%, one-to four-family loans decreasing $3.2 million or 5.5%, and commercial land loans decreasing $2.6 million or 20.5%. These increases were offset in part by an increase of $2.2 million, or 3.6%, in multi-family commercial loans and an increase of $1.1 million or 9.0% in construction loans.

Securities held to maturity, consisting of one municipal security at March 31, 2013, decreased $69,000, or 28.6%, to $172,000 from $241,000 at December 31, 2012 due to paydowns.

Other real estate owned decreased $375,000, or 44.4%, to $469,000 at March 31, 2013, from $844,000 at December 31, 2012. The decrease in other real estate owned resulted from the sale of six properties totaling $374,000.

Other assets, consisting primarily of prepaid FDIC assessments and deferred federal taxes, decreased $38,000, or 0.9%, to $4.4 million at March 31, 2013, from $4.4 million at December 31, 2012.

Deposits increased $4.1 million, or 2.6%, to $162.7 million at March 31, 2013 from $158.6 million at December 31, 2012. Core deposits (consisting of interest-bearing and noninterest-bearing checking accounts, money market accounts and savings accounts) increased $4.6 million. This increase was partially offset by a decrease in certificates of deposit of $1.1 million, or 1.6%, to $64.2 million at March 31, 2013 from $65.3 million at December 31, 2012.

Federal Home Loan Bank advances remained unchanged from December 31, 2012 to March 31, 2013 at $61.9 million.

Interest payable and other liabilities, consisting primarily of liabilities for checks and money orders and accrued expenses, increased $495,000, or 21.3%, to $2.8 million at March 31, 2013, from $2.3 million at December 31, 2012. The increase was primarily due to an increase in borrower’s prepaid taxes and insurances of $637,000 to $1.2 million as of March 31, 2013 from $558,000 as of December 31, 2012. This was partially offset by a decrease of $192,000 in liability for checks and money orders to $185,000 as of March 31, 2013 from $377,000 as of December 31, 2012.

Total stockholders’ equity increased $507,000, or 0.8%, to $63.0 million at March 31, 2013 from $62.4 million at December 31, 2012 primarily due to net income of $525,000, in part offset by purchases of 5,300 shares of common stock, totaling $100,000 pursuant to the announced stock repurchase programs which were approved by our Board of Directors on February 14, 2012 and December 10, 2012, respectively.

31

Comparison of Operating Results for the Three Months Ended March 31, 2013 and 2012

General. We recorded net income of $525,000 for the three months ended March 31, 2013 compared to net income of $291,000 for the three months ended March 31, 2012. The increase in income resulted primarily from a decrease in quarterly provisions for loan loss to $325,000 for the three months ended March 31, 2013 from $650,000 for the three months ended March 31, 2012. The increase in net income was also attributable in part to an increase of $238,000 in total other income resulting from a $192,000 in gain on the sale of loans and $125,000 net gain on the sale of other real estate owned, offset in part by decreased interest income of $283,000 from $3.4 million for the quarter ended March 31, 2013 from $3.6 million for the quarter ended March 31, 2012 reflective of the lower interest rate environment.

Interest and Dividend Income. Interest and dividend income decreased $283,000, or 7.8%, to $3.4 million for the three months ended March 31, 2013, as the average balance of interest-earning assets decreased $3.4 million to $278.6 million for the three months ended March 31, 2013 from $282.0 million for the three months ended March 31, 2012. There was also a decrease in the average yield on interest-earning assets of 34 basis points to 4.82% during the 2013 period from 5.16% during the 2012 period.

The biggest component of the decrease in average interest-earning assets was in other interest-earning assets, consisting of interest-earning overnight funds and time deposits, which decreased $11.6 million, or 34.6%, to $21.9 million for the three months ended March 31, 2013 from $33.5 million for the three months ended March 31, 2012. The average yield on these assets decreased 40 basis points from 0.58% to 0.17%. The decrease in the average balance resulted in a $39,000 decrease in interest income from other interest-earning assets to $10,000 for the three months ended March 31, 2013 from $48,000 for the three months ended March 31, 2012. The decrease in interest income was primarily attributable to a decrease of $25,000 in interest income from other investment securities from $25,000 to $0.

Average net loans increased $8.1 million, or 3.3%, to $252.0 million for the three months ended March 31, 2013 from $243.8 million for the three months ended March 31, 2012. Interest income on loans decreased by $232,000, or 6.6%, to $3.3 million for the three months ended March 31, 2013, as the average yield on loans decreased 56 basis points to 5.25% for the three months ended March 31, 2013 from 5.81% for the three months ended March 31, 2012. The decrease in interest income on loans was partially attributable to the low interest rate environment and was also in part a result of shifts in the mix between loan types in our portfolio from generally higher yielding loan types to lower yielding types.

Interest Expense. Interest expense decreased $240,000, or 23.0%, to $806,000 for the three months ended March 31, 2013 from $1.0 million for the three months ended March 31, 2012 as we experienced a decrease of $2.2 million in average interest-bearing liabilities, or 1.0%, to $221.2 million for the three months ended March 31, 2013 from $223.4 million for the three months ended March 31, 2012. The average rate we paid on these liabilities decreased 42 basis points to 1.46% from 1.87% reflecting a shift to lower cost core deposits from higher cost certificates of deposit. Interest expense on certificates of deposit decreased $124,000, or 42.7%, to $166,000 for the three months ended March 31, 2013 from $290,000 for the three months ended March 31, 2012 resulting primarily from a $4.0 million decrease in the average balance of certificates of deposits to $64.0 million for the 2013 period, from $68.0 million for the 2012 period. Additionally, the rate on certificates of deposit decreased 67 basis points to 1.04% for the 2013 period from 1.71% for the 2012 period. This was primary a result of runoff of higher priced certificates of deposit as well as the benefit of lower rates offered on certificates.

The average balance of core deposits, consisting of checking accounts, money market accounts and savings accounts, increased $3.0 million, or 3.27%, to $95.2 million for the three months ended March 31, 2013 from $92.2 million for the three months ended March 31, 2012. However, the interest on core deposits decreased $15,000 to $58,000 for the 2013 period from $73,000 for the 2012 period, as the rate on these deposits for the three months ended March 31, 2013 decreased 8 basis points, or 25.0%, to 0.24% from 0.32% for the three months ended March 31, 2012.

Interest expense on borrowed funds, consisting entirely of Federal Home Loan Bank advances, decreased $100,000, or 14.7%, to $582,000 for the three months ended March 31, 2013 from $682,000 for the three months ended March 31, 2012, as the average balance of our borrowings decreased $121,000

32

and the average rate paid on these borrowings decreased 56 basis points to 3.75% from 4.32%. The decrease in the rate was due to two restructures of outstanding advances as well as a $2.0 million advance that paid off in 2012. First, in the third quarter of 2012, we restructured $18.0 million of outstanding advances under the Federal Home Loan Bank of Indianapolis’ ‘blend and extend’ program, with a rate of 3.78% and a weighted average remaining maturity of 19 months to 2.69% with a weighted average remaining maturity of 62 months. In addition, in the second quarter of 2012, we restructured $22.0 million of outstanding advances under the aforementioned program, with a rate of 5.51% with a weighted average remaining maturity of 4 years to 4.22% with a weighted average remaining maturity of 9 years.

Net Interest Income. Net interest income decreased $44,000, or 1.7%, to $2.5 million for the three months ended March 31, 2013 from $2.6 million for the three months ended March 31, 2012, as our average net interest-earning assets decreased to $57.4 million from $58.6 million, and net interest rate spread increased 7 basis points to 3.36% from 3.29% and net interest margin increased 4 basis points to 3.60% from 3.56%. Changes in the our net interest income are influenced by a variety of factors, including changes in the level and mix of interest-earning assets and interest-bearing liabilities, the level and direction of interest rates, the difference between short-term and long-term interest rates and the general strength of the economy.

Provision for Loan Losses. Based on our analysis of the factors described in “Critical Accounting Policies — Allowance for Loan Losses,” in our Annual Report on Form 10-K for 2012, we recorded a provision for loan losses of $325,000 for the three months ended March 31, 2013 and a provision for loan losses of $650,000 for the three months ended March 31, 2012. We have continued with additional provisions in 2013 because of elevated levels of non-performing assets, delinquencies and classified assets, as well as continued concerns about the Michigan economy, elevated levels of unemployment, and some declining collateral values. At March 31, 2013, non-performing loans totaled $10.3 million, or 4.1% of total loans, as compared to $11.8 million, or 4.9% of total loans, at March 31, 2012. The decrease in non-performing loans is primarily due to decreased levels of delinquent non-accruing loans and additional writedowns of 1.2 million as of March 31, 2013. The allowance for loan losses to total loans receivable increased to 2.6% at March 31, 2013 from 2.5% at March 31, 2012.

All loans rated substandard are reviewed for impairment at least quarterly. Overall, management continues to focus on resolving non-performing assets and improving asset quality. In addition to our collections department personnel in working out loans, we continue to involve business development officers and, on significant assets, underwriters and senior management.

Noninterest Income. Noninterest income increased $238,000, or 47.8%, to $735,000 for the three months ended March 31, 2013 from $497,000 for the three months ended March 31, 2012. The increase was attributable to an increase of $192,000 in net gain on loan sales and a $125,000 net gain on the sale of other real estate owned. These increases were offset by decreases in loan fees earned, which are now netted against the fees paid to our mortgage loan processing provider that was engaged in 2012.

Noninterest Expense. Noninterest expense increased $164,000, or 8.2%, to $2.2 million for the three months ended March 31, 2013 from $2.0 million for the three months ended March 31, 2012. The increase was primarily due to an increase of $212,000 or 19.6%, in salaries and employee benefits expense, primarily as a result of the creation of an equity incentive plan and increased salaries expense. This was partially offset by a decrease of $19,500 in directors’ fees due to the fact that a board meeting did not occur in February.

Income Tax Expense. We recorded $274,000 of income tax expense for the three months ended March 31, 2013 compared to $152,000 of income tax expense for the 2012 quarter. Our effective tax rate was 34.3% for the three months ended March 31, 2013 and 34.3% the three months ended March 31, 2012.

33

Asset Quality

Other real estate owned totaled $469,000, or 0.2% of total assets, at March 31, 2013 as compared to $1.2 million, or 0.4% of total assets, at March 31, 2012. The largest relationship as of March 31, 2013 was $174,000, or 37.1% of other real estate owned, which consisted of a single family home and vacant land.

Non-performing assets, which includes non-performing loans, other real estate owned and troubled debt restructurings, totaled $10.8 million, or 3.7% of total assets, at March 31, 2013 as compared to $13.0 million, or 4.5% of total assets, at March 31, 2012. We believe that the decreases in nonperforming assets are a sign of improvement in the credit quality of our loan portfolio. However, our level of nonperforming assets has remained elevated, compared to historical levels, due to the unfavorable economic climate within the State of Michigan.

The largest substandard relationship as of March 31, 2013 is composed of six commercial loans that have a total balance of $3.8 million. Of the $20.6 million loans rated substandard, approximately $13.9 million are performing.

At March 31, 2013, we had 7 loans, totaling $2.0 million, for which we had temporarily extended the maturities while working on the loan renewal process. During the renewal process, the borrowers continue repayment according to the original loan terms which are at market interest rates. Of the remaining loans, two were classified as substandard, totaling $1.4 million. At March 31, 2013, none of these loans was considered a troubled debt restructuring, and all of these loans were considered performing at March 31, 2013.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable, as the Registrant is a smaller reporting company.

Item 4. Controls and Procedures

An evaluation was performed under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Operating Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of March 31, 2013. Based on that evaluation, our management, including the Chief Executive Officer and the Chief Operating Officer and Treasurer, concluded that our disclosure controls and procedures were effective.

During the quarter ended March 31, 2013, there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Part II – Other Information

Item 1. Legal Proceedings

We are subject to various legal actions arising in the normal course of business. In the opinion of management, the resolution of these legal actions is not expected to have a material adverse effect on our financial condition or results of operations.

Item 1A. Risk Factors

Not applicable, as the Registrant is a smaller reporting company.

34

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) There were no sales of unregistered securities during the period covered by this Report.

(b) Not applicable.

(c) The following table presents for the periods indicated a summary of the purchases made by or on behalf of Wolverine Bancorp, Inc. of shares of its common stock.

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1), (2)
January 1, 2013 through January 31, 2013		—	$	—		—		124,688
February 1, 2013 through February 28, 2013		5,200	$	18.83		5,200		119,488
March 1, 2013 through March 31, 2013		100	$	18.70		100		119,388
		5,300				5,300

(1) The Company’s board of directors approved a stock repurchase program on February 14, 2012 for the repurchase of 125,375 shares of common stock.

(2) The Company’s board of directors approved a stock repurchase program on December 10, 2012 for the repurchase of 122,954 shares of common stock.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	INS XBRL Instance
101	SCH XBRL Taxonomy Extension Schema
101	CAL XBRL Taxonomy Extension Calculation
101	DEF XBRL Taxonomy Extension Definition
101	LAB XBRL Taxonomy Extension Label
101	PRE XBRL Taxonomy Extension Presentation

35

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	WOLVERINE BANCORP, INC.
Date: May 14, 2013	/s/ David H. Dunn
	David H. Dunn
	President and Chief Executive Officer
Date: May 14, 2013	/s/ Rick A. Rosinski
	Rick A. Rosinski
	Chief Operating Officer and Treasurer

36