EX-99 2 d249169dex99.htm EXHIBIT 99 Exhibit 99

Exhibit 99

LOGO

PRESS RELEASE

 

For Release:    October 28, 2011

Nasdaq:

    MFNC
Contact:    Investor Relations at (888) 343-8147
Website:    www.bankmbank.com

MACKINAC FINANCIAL CORPORATION

REPORTS THIRD QUARTER AND NINE MONTHS 2011 RESULTS

Manistique, Michigan) – Mackinac Financial Corporation (Nasdaq: MFNC), the bank holding company for mBank (the “Bank”) today announced third quarter 2011 income of $.707 million or $.21 per share compared to a net loss of $.104 million, or $.03 per share for the third quarter of 2010. Net income for the first nine months of 2011 totaled $1.566 million, or $.46 per share, compared to net income of $.934 million, or $.27 per share, for the same period in 2010.

The Corporation’s primary asset, mBank, recorded net income of $.999 million for the third quarter of 2011 and $2.439 million for the nine month period in 2011. The third quarter results include the initial recording value of mortgage servicing rights at $.300 million, a provision for loan losses of $.400 million and $.296 million of losses on OREO properties. Operating results for the same period in 2010 include a $1.000 million provision and negligible OREO losses.

Total shareholders’ equity at September 30, 2011 totaled $55.479 million, compared to $55.987 million on September 30, 2010, a decrease of $.508 million and a $1.597 million, or 7.96% increase from 2010 year end equity of $53.882 million. Book value of common shareholders’ equity was $13.05 per share at September 30, 2011 compared to $13.26 per share at September 30, 2010 and $12.63 on December 31, 2010. Weighted average shares outstanding totaled 3,419,736 for all periods. The common stock warrants outstanding of 379,310 shares were slightly dilutive, at approximately $.01 per share, for the 2011 third quarter and the nine month period, as the market value of our stock moved above the $4.35 strike price.

Some highlights for the third quarter and nine month period included:

 

  •  

SBA/USDA loan sale premium income of $1.469 million year to date, exceeded all of 2010 totals. We continue to see good premiums in the 7% to 8% range on these transactions. This line of business has become a core competency and revenue driver to the company as evidenced by our continued strong results statewide in terms of these programs. SBA fiscal year-end September 30th, 2011 totals reflect mBank ranking 9th in terms of the number of 7A program loans (39), and 8th in total dollars of 7A program loans ($23.4M). We continue to strive to be a steady catalyst for small business lending within the markets we serve throughout the State of Michigan by providing the necessary capital for business expansion and infrastructure growth.

 

  •  

Improved net interest margin at 4.14% for the third quarter and 3.95% for the nine month period of 2011 through the increased growth in low cost transactional deposit accounts and disciplined loan pricing ensuring appropriate asset returns on a loan by loan basis.

 

  •  

Core deposit growth for the first nine months of 2011 totaled $56.229 million, with transactional accounts accounting for $33.313 million of this growth, improving our funding mix.

 

  •  

Recorded initial valuation of mortgage servicing rights at $.300 million.

  •  

In the third quarter and nine month period of 2011, the Corporation recorded a provision for loan losses of $.400 million and $1.000 million, as compared to the $1.000 million and $4.700 million provision recorded in the third quarter and nine month period of 2010. ORE losses of $.296 million for the third quarter and losses of $.728 million for the nine month period of 2011 compared to negligible losses in the 2010 third quarter and YTD 2010 losses of $2.000 million. Both are showing trends of an improved and overall well performing asset base.

 

  •  

Nonperforming assets at September 30, 2011 totaled $14.885 million or a manageable 2.99% of total assets, a reduction of $1.240 million from 2010 year end balances. Non-accrual loans comprise 1.51% of total loans. Total loan delinquencies greater than 30 days past due were a nominal 1.65%, and the company’s Texas Ratio resides at 24.28% for the quarter end, which is among the lowest of the 15 largest public banks headquartered in Michigan.

 

  •  

The company formed and opened its solely owned title company in conjunction with the Michigan Bankers Association. The title company began operations in September of this year and is expected to provide another business line to augment non-interest income growth through offering title services for both commercial and retail based mortgage transactions.

 

  •  

The company began the process of relocating its in-store Escanaba Menards Office location to a free standing traditional office given the growth and market share penetration we have been able to procure with our in-store branch the last two and half years and expect a full service branch to increase overall loan and deposit growth to increase shareholder value in this large commerce hub in the UP. We hope to have the new branch open during the end of the second quarter of 2012 or early summer.

 

  •  

mBank recently played an instrumental and lead role in staving off the permanent closure of Manistique Papers, Inc., a 90-year old paper mill located in Manistique, the bank’s headquarters, that was being forced into Chapter 7 bankruptcy liquidation. The mill employs approximately 150 local workers and is the county’s second largest private employer where the bank is based. A closure would have devastated the local economy and hundreds of direct manufacturing and indirect ancillary business jobs would have been lost. mBank’s management worked quickly and diligently with the mill’s prior non-local bank to purchase the senior secured debt at a discount to avert the Chapter 7 liquidation and keep the company functional in its current Chapter 11 process by also providing additional working capital through a new “debtor in possession” loan arrangement.

With mBank as the lead, the bank was supported in these transactions through participation by the Michigan Economic Development Corporation (“MEDC”) and the Governor’s office, whose support enabled these transactions to be consummated. Through these joint actions, the Manistique mill reopened less than six weeks after its closure in mid-August and days away from a complete liquidation in bankruptcy. Kelly W. George, President and CEO, commenting on mBank’s role, stated, “We at mBank are very proud that we were able to boldly provide the financial support and expertise to a vital member of our local community to save hundreds of jobs and to help rehabilitate the paper mill, a long standing member of our business community. I believe that this is the essence of real community banking; providing local banking services and financial expertise to foster economic development in order to preserve and create employment opportunities, keeping our communities vibrant and strong with a good quality of life for all.”

Loans and Non-performing Assets

Total loans at September 30, 2011 were $391.903 million, a 2.40% increase from the $382.727 million at September 30, 2010 and up $8.817 million from year-end 2010 total loans of $383.086 million. Commenting on loan growth, Kelly W. George, President and CEO, of mBank stated, “New loan production in the third quarter continued to gain momentum with overall new production of $40.6 million. On a year to date basis, the company has generated over $113 million of new loans, with $70 million of those being commercial in nature, and $43 million retail based. The Upper Peninsula continues to lead all regions with $64 million of this new production, the Northern Lower Peninsula with $34 million, and Southeast Michigan with $15 million. In addition, through the use of the various governmental loan guarantee programs offered through the SBA, USDA, and the Michigan Economic Development Corporation (MEDC), we have been able to prudently structure and extend credit throughout various commercial industries to help spur economic growth and help repair a state and job market that was significantly hurt by the financial and real-estate collapse several years ago.”

Nonperforming loans of $9.673 million have declined from 2010 year end balances of $10.563 million with nominal new additions throughout the year and balances representing several older loans that still remain in some stage of legal proceedings. George commenting, “Subsequent to the close of the third quarter, we did also accept an offer for the sale of a nonperforming piece of ORE of approximately $1.5 million, at very close to its carrying value that should exit the bank in the near future. We continue our aggressive remediation actions on all of our problem assets in order to mitigate our losses and ongoing carrying costs. We believe that the current carrying values of our OREO properties, which are reassessed annually to ensure timely identification for any deterioration in values, properly reflect as best they can current market value for these assets. We remain highly focused on overall asset quality metrics and are staying vigilant in extending new credit, given the still challenging overall Michigan economy, but we do believe that the market is stabilizing.”

Margin Analysis

Net interest margin in the third quarter of 2011 increased to $4.709 million, 4.14%, compared to $4.064 million, or 3.69%, in the third quarter of 2010 and the net interest margin in the first nine months of 2011 increased to $13.028 million, 3.95%, compared to $12.109 million, or 3.59%, in the first nine months of 2010. The interest margin increase was largely due to decreased funding costs. George stated, “We are disciplined in our deposit and loan pricing structures in order to minimize long term interest rate risk with the primary objective of growing our current margins. We expect our margin to improve as we progress through the end of the year and into 2012 with increased funding of new loans with lower cost transactional accounts and further repayment of longer- term maturing brokered deposits. On hand liquidity remains strong with over $30 million of fed funds/cash and $28 million of unpledged investments available to service depositor needs and fund new asset growth.”

Deposits

Total deposits of $405.058 million at September 30, 2011 increased slightly from deposits of $404.524 million on September 30, 2010; however, the deposit mix changed dramatically with brokered deposits declining from $94.660 million on September 30, 2010 to $34.077 million on September 30, 2011. Total deposits on September 30, 2011 were up $18.279 million from year-end 2010 deposits of $386.779 million. The overall increase in deposits for the first nine months of 2011 is comprised of a decrease in noncore deposits of $37.950 million which was offset with increased core deposits of $56.229 million. George, commenting on the increased core deposits, stated, “In the first nine months of 2011, we continued to grow core deposits at a steady rate. Our dependency on brokered deposits, which stood at 42% of total deposits at 2009 year-end, has decreased to 8% of deposits on September 30, 2011. We are pleased with our current deposit mix and we will continue to monitor all of our products and pricing to remain competitive in order to maintain interest margins and preserve franchise value associated with core deposits.”

Noninterest Income/Expense

Noninterest income, at $1.006 million in the third quarter of 2011, increased $.358 million from the third quarter 2010 level of $.648 million with the largest drivers of this income being the increased gains from the sale of SBA/USDA loans, which totaled $.283 million in the third quarter and $1.469 million for the nine month period, and the initial recognition of the value of mortgage servicing rights in the amount of $.300 million. Noninterest income, at $2.931 million in the first nine months of 2011, increased $.883 million from the first nine months of 2010 level of $2.048 million. Noninterest income in the first nine months of 2010 also includes $.215 million of security gains which the Corporation does not consider recurring earnings provider on a year to year basis.

Noninterest expense, at $3.960 million in the third quarter of 2011, increased $.359 million, or 9.97% from the third quarter of 2010. Noninterest expense, at $11.749 million in the first nine months of 2011, decreased $.811 million, or 6.46% from the first nine months of 2010 due primarily to lower losses and write-downs of ORE properties, which declined from $2.000 million of write-downs in 2010 to $.728 million in 2011. Our other operating expenses in 2011 remain marginally elevated due to the added cost of aggressive nonperforming asset remediation to cleanse the credit book and are expected to decrease as these remaining problem assets eventually exit the bank. The Corporation continues to look for ways to control costs and for the quarter end continues to remain below peer levels in terms of salary and benefits as a percentage of total assets residing at 1.48%, and total overhead as a percentage of total assets which equated to 3.01%. The company’s year-to-date efficiency ratio equated to 70.06%, down slightly from year end 2010 levels of 72.57%.

Assets and Capital

Total assets of the Corporation at September 30, 2011 were $498.598 million, down slightly from the $499.006 million reported at September 30, 2010 and up 4.16% from the $478.696 million of total assets at year-end 2010. Common Shareholders’ equity at September 30, 2011 totaled $44.613 million, or $13.05 per share, compared to $45.329 million, or $13.26 per share on September 30, 2010 and $43.173 million, or $12.63 per share at 2010 year end. The Corporation and the Bank are both “well-capitalized” with Tier 1 Capital at the Corporation of 9.73% and 8.79% at the Bank.

Paul D. Tobias, Chairman and Chief Executive Officer, concluded, “We are pleased with our progress thus far in 2011. We continue to build franchise value through core deposit growth and other strategic initiatives, such as the organization of mBank Title Insurance Agency, LLC and look forward to prudently expanding our franchise in the near term. An additional near-term objective is to begin exploration of a TARP exit strategy sometime in 2012 given our outlook for increased core earnings which creates opportunities for other sources of capital.”

Mackinac Financial Corporation is a registered bank holding company formed under the Bank Holding Company Act of 1956 with assets in excess of $490 million and whose common stock is traded on the NASDAQ stock market as “MFNC.” The principal subsidiary of the Corporation is mBank. Headquartered in Manistique, Michigan, mBank has 11 branch locations; seven in the Upper Peninsula, three in the Northern Lower Peninsula and one in Oakland County, Michigan. The Company’s banking services include commercial lending and treasury management products and services geared toward small to mid-sized businesses, as well as a full array of personal and business deposit products and consumer loans.

Forward-Looking Statements

This release contains certain forward-looking statements. Words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “should,” “will,” and variations of such words and similar expressions are intended to identify forward-looking statements: as defined by the Private Securities Litigation Reform Act of 1995. These statements reflect management’s current beliefs as to expected outcomes of future events and are not guarantees of future performance. These statements involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood, and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. Factors that could cause a difference include among others: changes in the national and local economies or market conditions; changes in interest rates and banking regulations; the impact of competition from traditional or new sources; and the possibility that anticipated cost savings and revenue enhancements from mergers and acquisitions, bank consolidations, branch closings and other sources may not be fully realized at all or within specified time frames as well as other risks and uncertainties including but not limited to those detailed from time to time in filings of the Company with the Securities and Exchange Commission. These and other factors may cause decisions and actual results to differ materially from current expectations. Mackinac Financial Corporation undertakes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release.

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

 

 

 

     For The Period Ended  
(Dollars in thousands, except per share data)    September 30,
2011		     December 31,
2010		     September 30,
2010		  
     (Unaudited)           (Unaudited)  

Selected Financial Condition Data (at end of period):

       

Assets

    $ 498,598      $ 478,696      $ 499,006   

Loans

      391,903        383,086        382,727   

Investment securities

      37,022        33,860        37,450   

Deposits

      405,058        386,779        404,524   

Borrowings

      35,997        36,069        36,069   

Common shareholders’ equity

      44,613        43,176        45,329   

Shareholders’ Equity

      55,479        53,882        55,987   

Selected Statements of Income Data (nine months and year ended):

       

Net interest income

    $ 13,028      $ 16,385      $ 12,109   

Income (Loss) before taxes and preferred dividend

      3,210        (3,918 )      (3,103 ) 

Net income

      1,566        (1,160 )      934   

Income (loss) per common share - Basic

     .46        (.34 )      .27   

Income (loss) per common share - Diluted

     .45        (.34 )      .27   

Weighted average shares outstanding

      3,419,736        3,419,736        3,419,736   

Weighted average shares outstanding - diluted

     3,503,347        3,419,736        3,419,736   

Three Months Ended:

       

Net interest income

    $ 4,709      $ 4,276      $ 4,064   

Income (Loss) before taxes and preferred dividend

      1,355        (814 )      111   

Net income (Loss)

      707        (1,907 )      (104 ) 

Income (Loss) per common share - Basic

     .21        (.61 )      (.03 ) 

Income (Loss) per common share - Diluted

     .20        (.61 )      (.03 ) 

Weighted average shares outstanding

      3,419,736        3,419,736        3,419,736   

Weighted average shares outstanding - diluted

     3,509,581        3,419,736        3,419,736   

Selected Financial Ratios and Other Data (nine months and year ended):

       

Performance Ratios:

       

Net interest margin

      3.95 %      3.66 %      3.59 % 

Efficiency ratio

      70.06        72.57        74.12   

Return on average assets

      .43        (.23 )      .25   

Return on average common equity

      4.81        (2.64 )      2.71   

Return on average equity

      3.85        (2.06 )      2.21   

Average total assets

    $ 490,293      $ 502,993      $ 507,938   

Average common shareholders’ equity

    $ 43,563      $ 43,981      $ 45,975   

Average total shareholders’ equity

    $ 54,340      $ 56,171      $ 56,561   

Average loans to average deposits ratio

      96.96 %      94.36 %      93.19 % 

Common Share Data (at end of period):

       

Market price per common share

    $ 5.46      $ 4.58      $ 5.10   

Book value per common share

    $ 13.05      $ 12.63      $ 13.26   

Common shares outstanding

      3,419,736        3,419,736        3,419,736   

Other Data (at end of period):

       

Allowance for loan losses

    $ 5,838      $ 6,613      $ 5,437   

Non-performing assets

    $ 14,885      $ 16,125      $ 17,005   

Allowance for loan losses to total loans

      1.49 %      1.73 %      1.42 % 

Non-performing assets to total assets

      2.99 %      3.37 %      3.41 % 

Texas Ratio

      24.28 %      26.66 %      27.68 % 

Number of:

       

Branch locations

      11        11        11   

FTE Employees

      114        110        98   

 

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

 

 

 

     September 30,     December 31,     September 30,  
(Dollars in thousands)    2011     2010     2010  
     (Unaudited)           (Unaudited)  

ASSETS

       

Cash and due from banks

    $ 30,122      $ 22,719      $ 36,561   

Federal funds sold

      12,000        12,000        12,000   
  

 

 

    

 

 

    

 

 

  

Cash and cash equivalents

      42,122        34,719        48,561   

Interest-bearing deposits in other financial institutions

      10        713        692   

Securities available for sale

      37,022        33,860        37,450   

Federal Home Loan Bank stock

      3,060        3,423        3,794   

Loans:

       

Commercial

      299,135        297,047        295,262   

Mortgage

      86,500        80,756        82,312   

Installment

      6,268        5,283        5,153   
  

 

 

    

 

 

    

 

 

  

Total Loans

      391,903        383,086        382,727   

Allowance for loan losses

      (5,838 )      (6,613 )      (5,437 ) 
  

 

 

    

 

 

    

 

 

  

Net loans

      386,065        376,473        377,290   

Premises and equipment

      9,507        9,660        9,843   

Other real estate held for sale

      5,212        5,562        5,758   

Other assets

      15,600        14,286        15,618   
  

 

 

    

 

 

    

 

 

  

TOTAL ASSETS

    $ 498,598      $ 478,696      $ 499,006   
  

 

 

    

 

 

    

 

 

  

LIABILITIES AND SHAREHOLDERS’ EQUITY

       

LIABILITIES:

       

Deposits:

       

Noninterest bearing deposits

    $ 53,736      $ 41,264      $ 44,402   

NOW, money market, checking

      157,596        134,703        127,828   

Savings

      15,618        17,670        20,265   

CDs<$100,000

      119,893        96,977        94,560   

CDs>$100,000

      24,138        22,698        22,809   

Brokered

      34,077        73,467        94,660   
  

 

 

    

 

 

    

 

 

  

Total deposits

      405,058        386,779        404,524   

Borrowings:

       

Federal Home Loan Bank

      35,000        35,000        35,000   

Other

      997        1,069        1,069   
  

 

 

    

 

 

    

 

 

  

Total borrowings

      35,997        36,069        36,069   

Other liabilities

      2,064        1,966        2,426   
  

 

 

    

 

 

    

 

 

  

Total liabilities

      443,119        424,814        443,019   

SHAREHOLDERS’ EQUITY

       

Preferred stock - No par value: Authorized 500,000 shares 11,000 issued and outstanding

      10,866        10,706        10,658   

Common stock and additional paid in capital - No par value Authorized - 18,000,000 shares Issued and outstanding - 3,419,736 shares

      43,525        43,525        43,517   

Accumulated earnings (deficit)

      607        (961 )      1,131   

Accumulated other comprehensive income

      481        612        681   
  

 

 

    

 

 

    

 

 

  

Total shareholders’ equity

      55,479        53,882        55,987   
  

 

 

    

 

 

    

 

 

  

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

    $ 498,598      $ 478,696      $ 499,006   
  

 

 

    

 

 

    

 

 

  

 

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

     Three Months Ended
September 30,		     Nine Months Ended
September 30,		  
(Dollars in thousands except per share data)    2011      2010     2011      2010  
     (Unaudited)     (Unaudited)  

INTEREST INCOME:

           

Interest and fees on loans:

           

Taxable

    $ 5,584       $ 5,300      $ 15,918       $ 15,718   

Tax-exempt

      35         46        114         145   

Interest on securities:

           

Taxable

      304         324        878         1,077   

Tax-exempt

      7         7        21         21   

Other interest income

      26         23        89         100   
  

 

 

     

 

 

    

 

 

     

 

 

  

Total interest income

      5,956         5,700        17,020         17,061   
  

 

 

     

 

 

    

 

 

     

 

 

  

INTEREST EXPENSE:

           

Deposits

      1,091         1,414        3,541         4,309   

Borrowings

      156         222        452         643   
  

 

 

     

 

 

    

 

 

     

 

 

  

Total interest expense

      1,247         1,636        3,993         4,952   
  

 

 

     

 

 

    

 

 

     

 

 

  

Net interest income

      4,709         4,064        13,028         12,109   

Provision for loan losses

      400         1,000        1,000         4,700   
  

 

 

     

 

 

    

 

 

     

 

 

  

Net interest income after provision for loan losses

      4,309         3,064        12,028         7,409   
  

 

 

     

 

 

    

 

 

     

 

 

  

OTHER INCOME:

           

Service fees

      180         264        616         737   

Net security gains

      —           (1 )      —           215   

Income from loans sold

      478         334        1,863         958   

Mortgage servicing rights

      300         —          300         —     

Other

      48         51        152         138   
  

 

 

     

 

 

    

 

 

     

 

 

  

Total other income

      1,006         648        2,931         2,048   
  

 

 

     

 

 

    

 

 

     

 

 

  

OTHER EXPENSES:

           

Salaries and employee benefits

      1,811         1,779        5,441         5,281   

Occupancy

      334         358        1,048         1,048   

Furniture and equipment

      197         202        612         593   

Data processing

      177         193        532         587   

Professional service fees

      165         168        550         502   

Loan and deposit

      288         212        719         665   

ORE Writedowns and (gains)/losses on sale

      296         7        728         2,000   

FDIC Insurance Assessment

      215         222        755         665   

Telephone

      51         53        160         145   

Advertising

      93         77        292         220   

Other

      333         330        912         854   
  

 

 

     

 

 

    

 

 

     

 

 

  

Total other expenses

      3,960         3,601        11,749         12,560   
  

 

 

     

 

 

    

 

 

     

 

 

  

Income (Loss) before provision for income taxes

      1,355         111        3,210         (3,103 ) 

Provision for (benefit of) income taxes

      455         30        1,071         (4,593 ) 
  

 

 

     

 

 

    

 

 

     

 

 

  

NET INCOME

      900         81        2,139         1,490   
  

 

 

     

 

 

    

 

 

     

 

 

  

Preferred dividend expense

      193         185        573         556   
  

 

 

     

 

 

    

 

 

     

 

 

  

NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS

    $ 707       $ (104 )    $ 1,566       $ 934   
  

 

 

     

 

 

    

 

 

     

 

 

  

INCOME (LOSS) PER COMMON SHARE:

           

Basic

    $ .21       $ (.03 )    $ .46       $ .27   
  

 

 

     

 

 

    

 

 

     

 

 

  

Diluted

    $ .20       $ (.03 )    $ .45       $ .27   
  

 

 

     

 

 

    

 

 

     

 

 

  

 

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES

LOAN PORTFOLIO AND CREDIT QUALITY

 

 

 

(Dollars in thousands)

Loan Portfolio Balances (at end of period):

 

     September 30,
2011		      December 31,
2010		      September 30,
2010		  

Commercial Loans

         

Real estate - operators of nonresidential buildings

    $ 62,567       $ 58,114       $ 52,192   

Hospitality and tourism

      33,867         37,737         39,998   

Commercial construction

      19,771         33,330         25,718   

Lessors of residential buildings

      16,433         16,598         15,854   

Other

      166,497         151,268         161,500   
  

 

 

     

 

 

     

 

 

  

Total Commercial Loans

      299,135         297,047         295,262   

Consumer Loans

         

1-4 family residential real estate

      78,759         75,074         74,829   

Consumer construction

      7,741         5,682         7,483   

Consumer

      6,268         5,283         5,153   
  

 

 

     

 

 

     

 

 

  

Total Loans

    $ 391,903       $ 383,086       $ 382,727   
  

 

 

     

 

 

     

 

 

  

Credit Quality (at end of period):

 

     September 30,     December 31,     September 30,  
     2011     2010     2010  

Nonperforming Assets :

       

Nonaccrual loans

    $ 5,954      $ 5,921      $ 4,447   

Loans past due 90 days or more

      —          —          —     

Restructured loans

      3,719        4,642        6,800   
  

 

 

    

 

 

    

 

 

  

Total nonperforming loans

      9,673        10,563        11,247   

Other real estate owned

      5,212        5,562        5,758   
  

 

 

    

 

 

    

 

 

  

Total nonperforming assets

    $ 14,885      $ 16,125      $ 17,005   
  

 

 

    

 

 

    

 

 

  

Nonperforming loans as a % of loans

      2.47 %      2.76 %      2.94 % 
  

 

 

    

 

 

    

 

 

  

Nonperforming assets as a % of assets

      2.99 %      3.37 %      3.41 % 
  

 

 

    

 

 

    

 

 

  

Reserve for Loan Losses:

       

At period end

    $ 5,838      $ 6,613      $ 5,437   
  

 

 

    

 

 

    

 

 

  

As a % of average loans

      1.19 %      1.75 %      1.42 % 
  

 

 

    

 

 

    

 

 

  

As a % of nonperforming loans

      60.35 %      62.61 %      48.34 % 
  

 

 

    

 

 

    

 

 

  

As a % of nonaccrual loans

      98.05 %      111.69 %      122.26 % 
  

 

 

    

 

 

    

 

 

  

Charge-off Information (year to date):

       

Average loans

    $ 490,293      $ 384,347      $ 384,028   
  

 

 

    

 

 

    

 

 

  

Net charge-offs

    $ 1,775      $ 5,112      $ 4,488   
  

 

 

    

 

 

    

 

 

  

Charge-offs as a % of average loans

      .36 %      1.33 %      1.17 % 
  

 

 

    

 

 

    

 

 

  

 

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES

QUARTERLY FINANCIAL HIGHLIGHTS

 

 

 

     QUARTER ENDED  
     (Unaudited)  
     September 30,     June 30,     March 31,     December 31,     September 30,  
     2011     2011     2011     2010     2010  

BALANCE SHEET (Dollars in thousands)

           

Total loans

    $ 391,903      $ 394,812      $ 374,609      $ 383,086      $ 382,727   

Allowance for loan losses

      (5,838 )      (6,155 )      (6,184 )      (6,613 )      (5,437 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total loans, net

      386,065        388,657        368,425        376,473        377,290   

Total assets

      492,373        492,373        492,790        478,696        499,006   

Core deposits

      346,843        329,958        315,638        290,614        287,055   

Noncore deposits (1)

      58,215        69,709        85,145        96,165        117,469   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total deposits

      405,058        399,667        400,783        386,779        404,524   

Total borrowings

      35,997        36,069        36,069        36,069        36,069   

Common shareholders’ equity

      44,613        43,973        43,340        43,176        45,329   

Total shareholders’ equity

      55,479        54,784        54,097        53,882        55,987   

Total shares outstanding

      3,419,736        3,419,736        3,419,736        3,419,736        3,419,736   

AVERAGE BALANCES (Dollars in thousands)

           

Assets

    $ 497,333      $ 494,481      $ 478,861      $ 488,320      $ 512,335   

Loans

      397,665        378,250        380,066        385,296        385,268   

Deposits

      403,957        401,549        386,743        393,266        416,847   

Common equity

      44,176        43,363        43,147        44,339        46,041   

Equity

      54,998        54,138        53,870        55,015        56,668   

INCOME STATEMENT (Dollars in thousands)

           

Net interest income

    $ 4,709      $ 4,178      $ 4,141      $ 4,276      $ 4,064   

Provision for loan losses

      400        600        —          1,800        1,000   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net interest income after provision

      4,309        3,578        4,141        2,476        3,064   

Total other income

      1,006        1,348        577        747        648   

Total other expense

      3,960        3,729        4,059        4,037        3,601   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income before taxes

      1,355        1,197        659        (814 )      111   

Provision for (benefit of) income taxes

      455        402        214        1,093        30   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income

      900        795        445        (1,907 )      81   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Preferred dividend expense

      193        192        189        185        185   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss) available to common shareholders

    $ 707      $ 603      $ 256      $ (2,092 )    $ (104 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

PER SHARE DATA

           

Earnings

    $ .21      $ .18      $ .07      $ (.61 )    $ (.03 ) 

Book value per common share

      13.05        12.86        12.67        12.63        13.26   

Market value, closing price

      5.46        6.00        6.02        4.58        5.10   

ASSET QUALITY RATIOS

           

Nonperforming loans/total loans

      2.47 %      2.39 %      2.66 %      2.76 %      2.94 % 

Nonperforming assets/total assets

      2.99        2.89        3.05        3.37        3.41   

Allowance for loan losses/total loans

      1.49        1.56        1.65        1.73        1.42   

Allowance for loan losses/nonperforming loans

      60.35        65.19        62.06        62.61        48.34   

Texas ratio (2)

      24.28        23.38        24.96        26.66        27.68   

PROFITABILITY RATIOS

           

Return on average assets

      .56 %      .49 %      .22 %      (1.70 )%      (.08 )% 

Return on average common equity

      6.35        5.58        2.40        (18.72 )      (.90 ) 

Return on average equity

      5.10        4.47        1.92        (15.09 )      (.73 ) 

Net interest margin

      4.14        3.79        3.92        3.88        3.69   

Efficiency ratio

      67.39        67.84        75.73        65.05        75.98   

Average loans/average deposits

      98.44        94.20        98.27        97.97        92.42   

CAPITAL ADEQUACY RATIOS

           

Tier 1 leverage ratio

      9.73 %      9.50 %      9.70 %      9.25 %      9.22 % 

Tier 1 capital to risk weighted assets

      11.65        11.40        11.61        11.36        11.73   

Total capital to risk weighted assets

      12.97        12.66        12.86        12.62        12.98   

Average equity/average assets

      11.06        10.95        11.25        11.27        11.06   

Tangible equity/tangible assets

      11.06        10.95        11.25        11.27        11.06   

 

(1) 

Noncore deposits includes Internet CDs, brokered deposits and CDs greater than $100,000

(2) 

Texas ratio equals nonperforming assets divided by shareholders’ equity plus allowance for loan losses

 

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES

QUARTERLY FINANCIAL HIGHLIGHTS

 

 

 

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