Exhibit 99.1
PRESS RELEASE
For Release February 4, 2010
| Contact: | Investor Relations (888) 343-8147 |
Website: www.bankmbank.com
Mackinac Financial Corporation Announces
2009 Results of Operations/Increased Franchise Value
2009 Results of Operations/Increased Franchise Value
(Manistique, Michigan) — Mackinac Financial Corporation (Nasdaq: MFNC), the holding company for mBank, has reported net income of $1.907 million, or $.56 per share, for the year ended December 31, 2009, compared to a net income of $1.872 million, or $.55 per share, for 2008. Weighted average shares outstanding amounted to 3,419,736 in 2009 and 3,422,012 in 2008.
The 2009 results include $1.208 million of gains related to branch office sales and $1.471 million of security gains. The 2008 results included the positive effect, $3.475 million of a lawsuit settlement and the negative effect, $.425 million, of a severance agreement.
Listed below are several key points relative to our 2009 results:
| • | In 2009 book value per share increased by $.95 to $13.10. This marks the fourth consecutive year of increased shareholder value and a cumulative book value increase of $3.35 per share since the December 2004 recapitalization at $9.75 per share. | ||
| • | We grew bank deposits by $26 million, net after the sale of two branch offices with $30 million in core deposits. We experienced deposit growth in all of our markets, with $26 million in Northern Lower Michigan, $20 million in Southeast Michigan and $10 million in the Upper Peninsula. Most of our 2009 deposit growth occurred in low cost transactional accounts which grew by $41 million. | ||
| • | We continued to experience good loan demand with approximately $88 million of new loan production with a $14 million increase in loans outstanding, after reductions for amortization and payoffs. We were successful in producing loans in all of our markets |
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| but were less aggressive in Southeast Michigan where the recession is severe. Loan production totaled $44 million in the Upper Peninsula, $35 million in Northern Lower Michigan and $9 million in Southeast Michigan. | |||
| • | In 2009 mBank was recognized as the top SBA loan originator in the Upper Peninsula with 27 SBA transactions, totaling $7.4 million. mBank totals equated to seventh overall for the State of Michigan with 36 transactions and $13.2 million. | ||
| • | We improved our net interest margin from 3.20% in the fourth quarter of 2008 to 3.74% in 2009’s fourth quarter. | ||
| • | We continued to focus on enhancing our core earnings by controlling noninterest expense, increasing noninterest income and margin improvement. The combination of these three factors resulted in a decrease in our efficiency ratio from 86% in 2008 to 73% in 2009. | ||
| • | We had an increase in nonperforming assets from $7 million at 2008 year end to $21 million at the end of 2009. Despite the appearance of this increase, we do not have systematic loan issues. The increase for 2009 included three large credit relationships totaling $10 million, for which we believe we are adequately reserved. The nonperforming assets by region are as follows; $13 million in Southeast Michigan, $6 million in Northern Lower Michigan and $2 million in the Upper Peninsula. |
Following is more detailed information concerning our 2009 results. We have also included, as a part of this release a “Five Year Overview” which illustrates the progress of MFNC in terms of key shareholder metrics, since the recapitalization which occurred in December 2004. As this overview depicts, throughout the national and state specific economic challenges over the past several years, we have continued to improve the core operating platform of MFNC.
In April of 2009, the Corporation, in an abundance of caution, decided to participate in the TARP program and issued $11 million of preferred stock. In order to offset the cost of the preferred, we infused a portion of the TARP proceeds, $3 million, into the Bank and leveraged this excess capital by purchasing approximately $40 million of investment securities. We funded the purchase of these investments by issuing brokered deposits. In December, we began the process of deleveraging this position in anticipation of narrowing spreads and recognized a fourth quarter security gain of $.827 million. This strategy has resulted in overall security gains in excess of $1 million.
The net income of $1.907 million, $.56 per share, along with an increase in the unrealized value of securities held for sale contributed to the 2009 overall increase in common shareholders’ equity of $3.233 million, or 7.8%. Paul Tobias, Chairman of MFNC, commenting on the overall results for 2009 stated, “Although our results in 2009 were stymied by a worsening national economy and the severe deterioration that occurred in the automotive industry and Michigan real estate markets, we still made significant progress to increase our franchise value. We were able to absorb increases in loan loss provisions, FDIC insurance premiums, and costs associated with
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higher levels of nonperforming assets and still post an overall increase in common shareholders’ equity which equated to $.95 per share.”
At 2009 year-end, the Corporation’s loans stood at $384.310 million, an increase of $14.030 million, or 3.79%, from 2008 year-end balances of $370.280 million. Total loan originations in 2009 amounted to $88.122 million. Loan amortization and principal payoffs totaled $60.415 million. A good portion of these payoffs pertained to loan relationships that no longer met our pricing or credit standards. Loan growth was primarily from the Upper Peninsula markets where the economy is more stable.
Total assets of the Corporation at December 31, 2009 were $515.377 million, an increase of $63.946 million, or 14.17% from total assets of $451.431 million reported at December 31, 2008.
Total deposits grew from $371.097 million at December 31, 2008, to $421.389 million at December 31, 2009, an increase of $50.292 million, or 13.55%. This increase is composed of an increase in wholesale brokered deposits of $24.288 million and an increase in bank deposits of $26.004 million. During 2009, we increased investment securities which were funded primarily with wholesale deposits that were priced lower than in-market deposits. In August of 2009 we completed the sale of $30 million in deposits including the bank facilities of two branch offices in Upper Michigan which resulted in a $1.208 million gain. Kelly George, President and Chief Executive Officer of mBank, commenting on the deposit growth and branch sales stated,” The sale of these branches tightened up our existing footprint in the Upper Peninsula and will allow us to concentrate on markets with higher growth potential, in addition to enabling the Corporation to strategically transition the Bank’s footprint into ‘commercial hubs’ of the Upper Peninsula to better allocate personnel resources and management time. We continue to focus our efforts on growing transactional accounts and were successful in growing demand, money market and NOW accounts in total from $121.413 million at 2008 year-end to $149.875 million at 2009 year-end.”
Net interest income for the year ended December 31, 2009 was $16.287 million compared to $12.864 million for the year ended December 31, 2008, an increase of $3.423 million. The margin percentage for 2009 was 3.59% compared to 3.23% in 2008 and 3.60% in 2007.
We recognize the importance of cost control, especially in times of economic slowdown. In 2009 our total noninterest expense was $13.802 million compared to $12.558 million in 2008 and $12.100 million in 2007. The increase in 2009 was primarily attributable to costs associated with higher levels of nonperforming assets and increased FDIC insurance premiums. Salaries and benefits were reduced from $6.886 million in 2008 to $6.583 million in 2009.
Nonperforming assets increased in 2009 as the economy continued to weaken, especially in Southeast Michigan. Nonperforming loans totaled $15.237 million, or 3.96% of total loans at December 31, 2009. Nonperforming assets at December 31, 2009, were $21.041 million, 4.08% of total assets, compared to $7.076 million or 1.57% of total assets at December 31, 2008. Kelly George commented, “The elevated level of nonperforming assets, while still below peers and manageable, does concern us given the challenges throughout the state. We do not have a systematic problem with our overall loan portfolio, with over 58%, $8.8 million, of our problem
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loans stemming from two credit relationships in Southeast Michigan that we continue to devote significant attention to in order to reduce nonperformers in a timely manner and with minimal income statement impact. In retrospect, these large loans appeared sound and adequately collateralized at inception however; as the economy worsened and real estate values declined, the borrowers have not been able to weather the storm. This in turn has led to a very cautious approach in all markets, but particularly in Southeast Michigan, which includes an emphasis on smaller loans and very conservative collateral valuations. We continue to focus on early identification and resolution of all our problem credits to minimize carrying costs, collateral deterioration and incremental loss.”
Shareholders’ equity totaled $55.299 million at December 31, 2009, compared to $41.552 million at the end of 2008, an increase of $13.747 million. This increase includes $10.5 million of preferred stock that was issued by MFNC as a TARP recipient, consolidated net income of $1.907 million, the capital contribution impact of stock options and also the increase in equity due to the increase in the market value of held-for-sale investments, which amounted to $.648 million.
Mr. Tobias concluded, “We will continue to consider all business combination options that would create shareholder value but we have built our business plan on resolving the existing asset quality problems, building core deposits and managing costs. We believe that our book value growth has been significant and franchise value will be recognized by the market when the perception of Michigan and the confidence in the asset quality component of banking improves.”
Mackinac Financial Corporation is a registered bank holding company formed under the Bank Holding Company Act of 1956 with assets in excess of $500 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 10 branch locations; six 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
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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.
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MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
SELECTED FINANCIAL HIGHLIGHTS
| For The Years Ended December 31, | ||||||||
| (Dollars in thousands, except per share data) | 2009 | 2008 | ||||||
| (Unaudited) | (Unaudited) | |||||||
Selected Financial Condition Data(at end of period): | ||||||||
| Assets | $ | 515,377 | $ | 451,431 | ||||
| Loans | 384,310 | 370,280 | ||||||
| Investment securities | 46,513 | 47,490 | ||||||
| Deposits | 421,389 | 371,097 | ||||||
| Borrowings | 36,140 | 36,210 | ||||||
| Shareholders’ equity | 55,299 | 41,552 | ||||||
Selected Statements of Income Data: | ||||||||
| Net interest income | $ | 16,287 | $ | 12,864 | ||||
| Income before taxes and preferred dividend | 3,535 | 2,659 | ||||||
| Net income | 1,907 | 1,872 | ||||||
| Income per common share — Basic | .56 | .55 | ||||||
| Income per common share — Diluted | .56 | .55 | ||||||
| Weighted average shares outstanding | 3,419,736 | 3,422,012 | ||||||
Selected Financial Ratios and Other Data: | ||||||||
Performance Ratios: | ||||||||
| Net interest margin | 3.59 | % | 3.23 | % | ||||
| Efficiency ratio | 73.37 | 85.51 | ||||||
| Return on average assets | .39 | .44 | ||||||
| Return on average equity | 3.77 | 4.61 | ||||||
| Average total assets | $ | 493,652 | $ | 425,343 | ||||
| Average total shareholders’ equity | 50,531 | 40,630 | ||||||
| Average loans to average deposits ratio | 92.99 | % | 105.61 | % | ||||
Common Share Data at end of period: | ||||||||
| Market price per common share | $ | 4.64 | $ | 4.40 | ||||
| Book value per common share | $ | 13.10 | $ | 12.15 | ||||
| Common shares outstanding | 3,419,736 | 3,419,736 | ||||||
Other Data at end of period: | ||||||||
| Allowance for loan losses | $ | 5,225 | $ | 4,277 | ||||
| Non-performing assets | $ | 21,041 | $ | 7,076 | ||||
| Allowance for loan losses to total loans | 1.36 | % | 1.16 | % | ||||
| Non-performing assets to total assets | 4.08 | % | 1.57 | % | ||||
| Number of: | ||||||||
| Branch locations | 10 | 12 | ||||||
| FTE Employees | 100 | 100 | ||||||
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MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
| December 31, | December 31, | |||||||
| (Dollars in thousands) | 2009 | 2008 | ||||||
| (unaudited) | (audited) | |||||||
ASSETS | ||||||||
| Cash and due from banks | $ | 18,433 | $ | 10,112 | ||||
| Federal funds sold | 27,000 | — | ||||||
| Cash and cash equivalents | 45,433 | 10,112 | ||||||
| Interest-bearing deposits in other financial institutions | 678 | 582 | ||||||
| Securities available for sale | 46,513 | 47,490 | ||||||
| Federal Home Loan Bank stock | 3,794 | 3,794 | ||||||
| Loans: | ||||||||
| Commercial | 305,670 | 296,088 | ||||||
| Mortgage | 74,350 | 70,447 | ||||||
| Installment | 4,290 | 3,745 | ||||||
| Total Loans | 384,310 | 370,280 | ||||||
| Allowance for loan losses | (5,225 | ) | (4,277 | ) | ||||
| Net loans | 379,085 | 366,003 | ||||||
| Premises and equipment | 10,165 | 11,189 | ||||||
| Other real estate held for sale | 5,804 | 2,189 | ||||||
| Other assets | 23,905 | 10,072 | ||||||
TOTAL ASSETS | $ | 515,377 | $ | 451,431 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Liabilities: | ||||||||
| Non-interest-bearing deposits | $ | 35,878 | $ | 30,099 | ||||
| Interest-bearing deposits: | ||||||||
| NOW, Money Market, Checking | 95,790 | 70,584 | ||||||
| Savings | 18,207 | 20,730 | ||||||
| CDs<$100,000 | 59,953 | 73,752 | ||||||
| CDs>$100,000 | 36,385 | 25,044 | ||||||
| Brokered | 175,176 | 150,888 | ||||||
| Total deposits | 421,389 | 371,097 | ||||||
| Borrowings: | ||||||||
| Federal funds purchased | — | — | ||||||
| Short-term | 15,000 | — | ||||||
| Long-term | 21,140 | 36,210 | ||||||
| Total borrowings | 36,140 | 36,210 | ||||||
| Other liabilities | 2,549 | 2,572 | ||||||
| Total liabilities | 460,078 | 409,879 | ||||||
| Shareholders’ equity: | ||||||||
| Preferred stock — No par value: | ||||||||
| Authorized 500,000 shares, no shares outstanding | 10,514 | — | ||||||
| Common stock and additional paid in capital — No par value | ||||||||
| Authorized — 18,000,000 shares | ||||||||
Issued and outstanding —3,419,736 shares | 43,494 | 42,815 | ||||||
| Accumulated deficit | 198 | (1,708 | ) | |||||
| Accumulated other comprehensive income (loss) | 1,093 | 445 | ||||||
| Total shareholders’ equity | 55,299 | 41,552 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 515,377 | $ | 451,431 | ||||
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MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
CONSOLIDATED STATEMENTS OF OPERATIONS
| For The Years Ended December 31, | ||||||||||||
| (Dollars in thousands, except per share data) | 2009 | 2008 | 2007 | |||||||||
| (unaudited) | (audited) | (audited) | ||||||||||
INTEREST INCOME: | ||||||||||||
| Interest and fees on loans: | ||||||||||||
| Taxable | $ | 20,521 | $ | 22,555 | $ | 26,340 | ||||||
| Tax-exempt | 292 | 404 | 533 | |||||||||
| Interest on securities: | ||||||||||||
| Taxable | 2,783 | 1,293 | 1,100 | |||||||||
| Tax-exempt | 19 | 5 | — | |||||||||
| Other interest income | 93 | 305 | 722 | |||||||||
| Total interest income | 23,708 | 24,562 | 28,695 | |||||||||
INTEREST EXPENSE: | ||||||||||||
| Deposits | 6,431 | 10,115 | 13,224 | |||||||||
| Borrowings | 990 | 1,583 | 2,054 | |||||||||
| Total interest expense | 7,421 | 11,698 | 15,278 | |||||||||
| Net interest income | 16,287 | 12,864 | 13,417 | |||||||||
| Provision for loan losses | 3,700 | 2,300 | 400 | |||||||||
| Net interest income after provision for loan losses | 12,587 | 10,564 | 13,017 | |||||||||
OTHER INCOME: | ||||||||||||
| Service fees | 1,023 | 838 | 688 | |||||||||
| Net security gains | 1,471 | 64 | (1 | ) | ||||||||
| Net gains on sale of secondary market loans | 830 | 120 | 498 | |||||||||
| Proceeds from settlement of lawsuits | — | 3,475 | 470 | |||||||||
| Other | 1,427 | 156 | 351 | |||||||||
| Total other income | 4,751 | 4,653 | 2,006 | |||||||||
OHER EXPENSES: | ||||||||||||
| Salaries and employee benefits | 6,583 | 6,886 | 6,757 | |||||||||
| Occupancy | 1,385 | 1,374 | 1,272 | |||||||||
| Furniture and equipment | 805 | 771 | 678 | |||||||||
| Data processing | 862 | 844 | �� | 785 | ||||||||
| Professional service fees | 603 | 508 | 532 | |||||||||
| Loan and deposit | 1,772 | 569 | 285 | |||||||||
| Telephone | 187 | 170 | 228 | |||||||||
| Advertising | 322 | 305 | 370 | |||||||||
| Other | 1,283 | 1,131 | 1,193 | |||||||||
| Total other expenses | 13,802 | 12,558 | 12,100 | |||||||||
| Income before provision for income taxes | 3,536 | 2,659 | 2,923 | |||||||||
| Provision for (benefit of) income taxes | 1,120 | 787 | (7,240 | ) | ||||||||
NET INCOME | $ | 2,416 | $ | 1,872 | $ | 10,163 | ||||||
Preferred dividend expense | 509 | — | — | |||||||||
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | $ | 1,907 | $ | 1,872 | $ | 10,163 | ||||||
INCOME PER COMMON SHARE | ||||||||||||
| Basic | $ | .56 | $ | .55 | $ | 2.96 | ||||||
| Diluted | $ | .56 | $ | .55 | $ | 2.96 | ||||||
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MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
LOAN PORTFOLIO AND CREDIT QUALITY
LOAN PORTFOLIO AND CREDIT QUALITY
(Dollars in thousands)
Loan Portfolio Balances (at end of period):
| December 31, | December 31, | |||||||
| 2009 | 2008 | |||||||
| (unaudited) | (unaudited) | |||||||
Commercial Loans: | ||||||||
| Real estate — operators of nonresidential buildings | $ | 48,689 | $ | 41,299 | ||||
| Hospitality and tourism | 45,315 | 35,086 | ||||||
| Real estate agents and managers | 24,242 | 29,292 | ||||||
| Operators of nonresidential buildings | 12,619 | 13,467 | ||||||
| Other | 150,214 | 145,831 | ||||||
| Total Commercial Loans | 281,079 | 264,975 | ||||||
| 1-4 family residential real estate | 67,232 | 65,595 | ||||||
| Consumer | 4,290 | 3,745 | ||||||
| Construction | ||||||||
| Commercial | 24,591 | 31,113 | ||||||
| Consumer | 7,118 | 4,852 | ||||||
| Total Loans | $ | 384,310 | $ | 370,280 | ||||
Credit Quality (at end of period):
| December 31, | December 31, | |||||||
| 2009 | 2008 | |||||||
| (unaudited) | (unaudited) | |||||||
Nonperforming Assets : | ||||||||
| Nonaccrual loans | $ | 14,368 | $ | 4,887 | ||||
| Loans past due 90 days or more | — | — | ||||||
| Restructured loans | 869 | |||||||
| Total nonperforming loans | 15,237 | 4,887 | ||||||
| Other real estate owned | 5,804 | 2,189 | ||||||
| Total nonperforming assets | $ | 21,041 | $ | 7,076 | ||||
| Nonperforming loans as a % of loans | 3.96 | % | 1.32 | % | ||||
| Nonperforming assets as a % of assets | 4.08 | % | 1.57 | % | ||||
Reserve for Loan Losses: | ||||||||
| At period end | $ | 5,225 | $ | 4,277 | ||||
| As a % of average loans | 1.39 | % | 1.18 | % | ||||
| As a % of nonperforming loans | 34.29 | % | 87.52 | % | ||||
| As a % of nonaccrual loans | 36.37 | % | 87.52 | % | ||||
Charge-off Information (year to date): | ||||||||
| Average loans | $ | 374,796 | $ | 361,324 | ||||
| Net charge-offs | $ | 2,752 | $ | 2,169 | ||||
| Charge-offs as a % of average loans | .73 | % | .60 | % | ||||
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MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
QUARTERLY FINANCIAL HIGHLIGHTS
| QUARTER ENDED | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| 2009 | 2009 | 2009 | 2009 | 2008 | ||||||||||||||||
BALANCE SHEET(Dollars in thousands) | ||||||||||||||||||||
| Total loans | $ | 384,310 | $ | 384,100 | $ | 372,004 | $ | 370,776 | $ | 370,280 | ||||||||||
| Allowance for loan losses | (5,225 | ) | (4,081 | ) | (4,119 | ) | (4,793 | ) | (4,277 | ) | ||||||||||
| Total loans, net | 379,085 | 380,019 | 367,885 | 365,983 | 366,003 | |||||||||||||||
| Intangible assets | — | — | 6 | 26 | 46 | |||||||||||||||
| Total assets | 515,377 | 513,180 | 506,304 | 466,375 | 451,431 | |||||||||||||||
| Core deposits | 209,828 | 200,541 | 202,892 | 196,860 | 195,165 | |||||||||||||||
Noncore deposits(1) | 211,561 | 218,040 | 210,260 | 188,897 | 175,932 | |||||||||||||||
| Total deposits | 421,389 | 418,581 | 413,152 | 385,757 | 371,097 | |||||||||||||||
| Total borrowings | 36,140 | 36,140 | 36,210 | 36,210 | 36,210 | |||||||||||||||
| Total shareholders’ equity | 55,299 | 55,766 | 53,939 | 41,864 | 41,552 | |||||||||||||||
| Total shares outstanding | 3,419,736 | 3,419,736 | 3,419,736 | 3,419,736 | 3,419,736 | |||||||||||||||
AVERAGE BALANCES(Dollars in thousands) | ||||||||||||||||||||
| Assets | $ | 514,102 | $ | 513,687 | $ | 491,205 | $ | 454,740 | $ | 441,583 | ||||||||||
| Loans | 386,203 | 370,310 | 371,609 | 370,943 | 366,077 | |||||||||||||||
| Deposits | 418,280 | 419,102 | 401,510 | 372,669 | 358,213 | |||||||||||||||
| Equity | 55,665 | 54,594 | 49,855 | 41,813 | 41,516 | |||||||||||||||
INCOME STATEMENT(Dollars in thousands) | ||||||||||||||||||||
| Net interest income | $ | 4,431 | $ | 4,310 | $ | 4,051 | $ | 3,495 | $ | 3,330 | ||||||||||
| Provision for loan losses | 2,300 | 700 | 150 | 550 | 1,100 | |||||||||||||||
| Net interest income after provision | 2,131 | 3,610 | 3,901 | 2,945 | 2,230 | |||||||||||||||
| Total noninterest income | 1,503 | 2,418 | 439 | 391 | 308 | |||||||||||||||
| Total noninterest expense | 3,650 | 3,443 | 3,470 | 3,239 | 2,961 | |||||||||||||||
| Income before taxes | (16 | ) | 2,585 | 870 | 97 | (423 | ) | |||||||||||||
| Provision for income taxes | (22 | ) | 864 | 271 | 7 | (171 | ) | |||||||||||||
| Net income | 6 | 1,721 | 599 | 90 | (252 | ) | ||||||||||||||
| Preferred dividend expense | 186 | 185 | 138 | — | — | |||||||||||||||
| Net income available to common shareholders | $ | (180 | ) | $ | 1,536 | $ | 461 | $ | 90 | $ | (252 | ) | ||||||||
PER SHARE DATA | ||||||||||||||||||||
| Earnings | $ | (.05 | ) | $ | .45 | $ | .13 | $ | .03 | $ | (.07 | ) | ||||||||
| Book value per common share | 13.10 | 13.25 | 12.73 | 12.24 | 12.15 | |||||||||||||||
| Market value, closing price | 4.64 | 4.10 | 4.50 | 4.00 | 4.40 | |||||||||||||||
ASSET QUALITY RATIOS | ||||||||||||||||||||
| Nonperforming loans/total loans | 3.96 | % | 3.00 | % | 2.66 | % | 3.52 | % | 1.32 | % | ||||||||||
| Nonperforming assets/total assets | 4.08 | 3.38 | 2.93 | 3.27 | 1.57 | |||||||||||||||
| Allowance for loan losses/total loans | 1.36 | 1.06 | 1.11 | 1.29 | 1.16 | |||||||||||||||
| Allowance for loan losses/nonperforming loans | 34.29 | 35.40 | 41.71 | 36.72 | 87.52 | |||||||||||||||
PROFITABILITY RATIOS | ||||||||||||||||||||
| Return on average assets | (.14 | )% | 1.19 | % | .38 | % | .08 | % | (.23 | )% | ||||||||||
| Return on average equity | (1.28 | ) | 11.16 | 3.71 | .87 | (2.42 | ) | |||||||||||||
| Net interest margin | 3.74 | 3.66 | 3.58 | 3.35 | 3.20 | |||||||||||||||
| Efficiency ratio | 71.03 | 70.09 | 76.55 | 82.36 | 80.30 | |||||||||||||||
| Average loans/average deposits | 92.33 | 88.36 | 92.55 | 99.54 | 102.20 | |||||||||||||||
CAPITAL ADEQUACY RATIOS | ||||||||||||||||||||
| Tier 1 leverage ratio | 9.75 | % | 9.74 | % | 9.65 | % | 7.86 | % | 8.01 | % | ||||||||||
| Tier 1 capital to risk weighted assets | 11.92 | 12.18 | 11.94 | 9.31 | 9.25 | |||||||||||||||
| Total capital to risk weighted assets | 13.17 | 13.19 | 13.00 | 10.56 | 10.38 | |||||||||||||||
| Average equity/average assets | 10.83 | 10.63 | 10.15 | 9.19 | 9.40 | |||||||||||||||
| Tangible equity/tangible assets | 10.83 | 10.87 | 10.65 | 8.97 | 9.20 | |||||||||||||||
| (1) | Noncore deposits includesInternet CDs, brokered deposits and CDs greater than $100,000 |
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MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
QUARTERLY FINANCIAL HIGHLIGHTS
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MACKINAC FINANCIAL CORPORATION
FIVE YEAR OVERVIEW
FIVE YEAR OVERVIEW
 Since the recapitalization, which occurred in December 2004, the book value of MFNC stock has increased by $3.35, or 34.5%. |  | |
 Since the recapitalization, common shareholders’ equity has increased by a total of $11 million. |  In April 2009, MFNC participated in the TARP program, receiving $11 million. |
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MACKINAC FINANCIAL CORPORATION
FIVE YEAR OVERVIEW
FIVE YEAR OVERVIEW
 |  Through 2009, MFNC has achieved total loan production of $516 million, which contributed to overall net growth of $180 million, or 88% since the recapitalization in 2004. | |
 Total assets have increased $176 million, or 52% since the recapitalization. Since the Corporation’s lowest level of assets, $299 million in 2005, we have grown assets by $217 million through 2009 year end. |  Since the recapitalization, core deposits have grown a total of $79 million. Adjusting for the branch sales in 2007 and 2009, core deposit growth amounted to $118 million through 2009 year end. |
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