MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per For The Period Ended
share data) ----------------------------------
June 30, December 31, June 30,
2010 2009 2009
---------- ---------- ----------
(Unaudited) (Unaudited)
Selected Financial Condition Data (at
end of period):
Assets $ 500,774 $ 515,377 $ 506,304
Loans 384,839 384,310 372,004
Investment securities 34,942 46,513 95,620
Deposits 405,784 421,389 413,152
Borrowings 36,140 36,140 36,210
Shareholders' Equity 56,231 55,299 53,939
Selected Statements of Income Data (six
months and year ended):
Net interest income $ 8,045 $ 16,287 $ 7,546
Provision for loan losses 3,700 3,700 700
Income (Loss) before taxes and
preferred dividend (3,214) 3,536 967
Net income 1,038 1,907 551
Income per common share - Basic .30 .56 .16
Income per common share - Diluted .30 .56 .16
Three Months Ended:
Net interest income $ 4,023 $ 4,431 $ 4,051
Income (Loss) before taxes and
preferred dividend (3,514) (16) 870
Net income (Loss) (2,488) (180) 461
Income (Loss) per common share - Basic (0.73) (.05) .13
Income (Loss) per common share -
Diluted (0.73) (.05) .13
Weighted average shares outstanding 3,419,736 3,419,736 3,419,736
Selected Financial Ratios and Other
Data (six months and year ended):
Performance Ratios:
Net interest margin 3.53% 3.59% 3.47%
Efficiency ratio 77.08 73.37 79.25
Return on average assets .41 .39 .23
Return on average common equity 3.70 3.77 2.42
Average total assets $ 505,703 $ 493,652 $ 473,074
Average total common shareholders'
equity $ 56,506 $ 50,531 $ 45,856
Average loans to average deposits ratio 93.59% 92.99% 95.90%
Common Share Data (at end of period):
Market price per common share $ 6.50 $ 4.64 $ 4.50
Book value per common share $ 13.34 $ 13.10 $ 12.55
Common shares outstanding 3,419,736 3,419,736 3,419,736
Other Data (at end of period):
Allowance for loan losses $ 6,371 $ 5,225 $ 4,119
Non-performing assets $ 16,719 $ 21,041 $ 14,825
Allowance for loan losses to total
loans 1.66% 1.36% 1.11%
Non-performing assets to total assets 3.34% 4.08% 2.93%
Texas Ratio* 26.71% 34.77% 25.54%
Number of:
Branch locations 11 10 11
FTE Employees 105 100 102
* Texas Ratio: Non-performing Assets divided by Total Equity plus Allowance
for Loan Losses
MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, December 31, June 30,
(Dollars in thousands) 2010 2009 2009
---------- ---------- ----------
(unaudited) (unaudited)
ASSETS
Cash and due from banks $ 39,165 $ 18,433 $ 12,189
Federal funds sold 12,000 27,000 -
---------- ---------- ----------
Cash and cash equivalents 51,165 45,433 12,189
Interest-bearing deposits in other
financial institutions 678 678 618
Securities available for sale 34,942 46,513 95,620
Federal Home Loan Bank stock 3,794 3,794 3,794
Loans:
Commercial 302,228 305,670 296,392
Mortgage 78,428 74,350 71,777
Installment 4,183 4,290 3,835
---------- ---------- ----------
Total Loans 384,839 384,310 372,004
Allowance for loan losses (6,371) (5,225) (4,119)
---------- ---------- ----------
Net loans 378,468 379,085 367,885
Premises and equipment 10,085 10,165 11,064
Other real estate held for sale 5,676 5,804 4,950
Other assets 15,966 23,905 10,184
---------- ---------- ----------
TOTAL ASSETS $ 500,774 $ 515,377 $ 506,304
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest bearing deposits $ 41,434 $ 35,878 $ 33,368
NOW, money market, checking 118,909 95,790 75,974
Savings 20,110 18,207 21,411
CDs < $100,000 90,573 59,953 72,139
CDs > $100,000 23,652 36,385 25,455
Brokered 111,106 175,176 184,805
---------- ---------- ----------
Total deposits 405,784 421,389 413,152
Borrowings:
Federal Home Loan Bank 35,000 35,000 35,000
Other 1,140 1,140 1,210
---------- ---------- ----------
Total borrowings 36,140 36,140 36,210
Other liabilities 2,619 2,549 3,003
---------- ---------- ----------
Total liabilities 444,543 460,078 452,365
TOTAL SHAREHOLDERS' EQUITY 56,231 55,299 53,939
---------- ---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 500,774 $ 515,377 $ 506,304
========== ========== ==========
MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except per Three Months Ended Six Months Ended
share data) June 30, June 30,
------------------- -------------------
2010 2009 2010 2009
-------- --------- -------- ---------
(Unaudited) (Unaudited)
INTEREST INCOME:
Interest and fees on loans:
Taxable $ 5,227 $ 5,104 $ 10,418 $ 10,106
Tax-exempt 47 84 99 174
Interest on securities:
Taxable 356 673 753 1,132
Tax-exempt 7 3 14 4
Other interest income 37 14 77 16
-------- --------- -------- ---------
Total interest income 5,674 5,878 11,361 11,432
-------- --------- -------- ---------
INTEREST EXPENSE:
Deposits 1,439 1,566 2,896 3,344
Borrowings 212 261 420 542
-------- --------- -------- ---------
Total interest expense 1,651 1,827 3,316 3,886
-------- --------- -------- ---------
Net interest income 4,023 4,051 8,045 7,546
Provision for loan losses 2,800 150 3,700 700
-------- --------- -------- ---------
Net interest income after provision
for loan losses 1,223 3,901 4,345 6,846
-------- --------- -------- ---------
OTHER INCOME:
Service fees 252 271 474 514
Net security gains - - 215 -
Net gains on sale of secondary
market loans 276 84 575 142
Other 65 84 136 174
-------- --------- -------- ---------
Total other income 593 439 1,400 830
-------- --------- -------- ---------
OTHER EXPENSES:
Salaries and employee benefits 1,781 1,561 3,501 3,158
Occupancy 345 355 690 733
Furniture and equipment 197 222 391 411
Data processing 205 224 394 444
Professional service fees 161 144 334 297
Loan and deposit 2,239 512 2,856 773
Telephone 45 46 92 89
Advertising 72 80 144 158
Other 285 326 557 646
-------- --------- -------- ---------
Total other expenses 5,330 3,470 8,959 6,709
-------- --------- -------- ---------
Income (Loss) before provision for
income taxes (3,514) 870 (3,214) 967
Provision for (benefit of) income
taxes (1,212) 271 (4,623) 278
-------- --------- -------- ---------
NET INCOME (LOSS) (2,302) 599 1,409 689
-------- --------- -------- ---------
Preferred dividend expense 186 138 371 138
-------- --------- -------- ---------
NET INCOME (LOSS) AVAILABLE TO
COMMON SHAREHOLDERS $ (2,488) $ 461 $ 1,038 $ 551
======== ========= ======== =========
INCOME (LOSS) PER COMMON SHARE:
Basic $ (0.73) $ .13 $ .30 $ .16
======== ========= ======== =========
Diluted $ (0.73) $ .13 $ .30 $ .16
======== ========= ======== =========
MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
LOAN PORTFOLIO AND CREDIT QUALITY
(Dollars in thousands)
Loan Portfolio Balances (at end of period):
June 30, December 31, June 30,
2010 2009 2009
----------- ----------- -----------
Commercial Loans
Real estate - operators of
nonresidential buildings $ 50,000 $ 48,689 $ 44,087
Hospitality and tourism 43,883 45,315 35,033
Commercial construction 27,219 24,591 26,125
Real estate agents and managers 20,727 24,242 24,614
Other 160,399 162,833 166,533
----------- ----------- -----------
Total Commercial Loans 302,228 305,670 296,392
1-4 family residential real estate and
construction 78,428 74,350 71,777
Consumer 4,183 4,290 3,835
----------- ----------- -----------
Total Loans $ 384,839 $ 384,310 $ 372,004
=========== =========== ===========
Credit Quality (at end of period):
June 30, December 31, June 30,
2010 2009 2009
---------- ---------- ----------
Nonperforming Assets :
Nonaccrual loans $ 10,174 $ 14,368 $ 9,283
Loans past due 90 days or more - - -
Restructured loans 869 869 592
---------- ---------- ----------
Total nonperforming loans 11,043 15,237 9,875
Other real estate owned 5,676 5,804 4,950
---------- ---------- ----------
Total nonperforming assets $ 16,719 $ 21,041 $ 14,825
========== ========== ==========
Nonperforming loans as a % of loans 2.87% 3.96% 2.65%
---------- ---------- ----------
Nonperforming assets as a % of assets 3.34% 4.08% 2.93%
---------- ---------- ----------
Reserve for Loan Losses:
At period end $ 6,371 $ 5,225 $ 4,119
---------- ---------- ----------
As a % of average loans 1.66% 1.39% 1.11%
---------- ---------- ----------
As a % of nonperforming loans 57.69% 34.29% 41.71%
---------- ---------- ----------
As a % of nonaccrual loans 62.62% 36.37% 44.37%
========== ========== ==========
Charge-off Information (year to date):
Average loans 383,398 374,796 371,278
---------- ---------- ----------
Net charge-offs 2,554 2,752 858
---------- ---------- ----------
Charge-offs as a % of average loans .67% .73% .23%
---------- ---------- ----------
MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
QUARTER ENDED
-------------------------------------------------------
(Unaudited)
-------------------------------------------------------
December September
June 30, March 31, 31, 30, June 30,
2010 2010 2009 2009 2009
--------- --------- --------- --------- ---------
BALANCE SHEET
(Dollars in
thousands)
Total loans $ 384,839 $ 377,311 $ 384,310 $ 384,100 $ 372,004
Allowance for loan
losses (6,371) (4,737) (5,225) (4,081) (4,119)
--------- --------- --------- --------- ---------
Total loans,
net 378,468 372,574 379,085 380,019 367,885
Intangible assets - - - - 6
Total assets 500,774 502,427 515,377 513,180 506,304
Core deposits 271,026 236,227 209,828 200,541 202,892
Noncore deposits(1) 134,758 168,985 211,561 218,040 210,260
--------- --------- --------- --------- ---------
Total deposits 405,784 405,212 421,389 418,581 413,152
Total borrowings 36,140 36,140 36,140 36,140 36,210
Total shareholders'
equity 56,231 58,722 55,299 55,766 53,939
Total shares
outstanding 3,419,736 3,419,736 3,419,736 3,419,736 3,419,736
AVERAGE BALANCES
(Dollars in
thousands)
Assets $ 502,942 $ 508,495 $ 514,102 $ 513,687 $ 491,205
Loans 382,169 384,640 386,203 370,310 371,609
Deposits 405,449 413,897 418,280 419,102 401,510
Equity 57,889 55,109 55,665 54,594 49,855
INCOME STATEMENT
(Dollars in
thousands)
Net interest
income $ 4,023 $ 4,022 $ 4,431 $ 4,310 $ 4,051
Provision for loan
losses 2,800 900 2,300 700 150
--------- --------- --------- --------- ---------
Net interest
income after
provision 1,223 3,122 2,131 3,610 3,901
Total noninterest
income 593 807 1,503 2,418 439
Total noninterest
expense 5,330 3,629 3,650 3,443 3,470
--------- --------- --------- --------- ---------
Income (Loss)
before taxes (3,514) 300 (16) 2,585 870
Provision for
(benefit of)
income taxes (1,212) (3,411) (22) 864 271
Preferred dividend
expense 186 185 186 185 138
--------- --------- --------- --------- ---------
Net income (loss)
available to
common
shareholders $ (2,488) $ 3,526 $ (180) $ 1,536 $ 461
========= ========= ========= ========= =========
PER SHARE DATA
Earnings (Losses)
- basic $ (.73) $ 1.03 $ (.05) $ .45 $ .13
Earnings
(Losses)- diluted (.73) 1.03 (.05) .45 .13
Book value per
common share 13.34 14.08 13.10 13.25 12.55
Market value,
closing price 6.50 4.72 4.64 4.10 4.50
ASSET QUALITY
RATIOS
Nonperforming
loans/total loans 2.87% 2.62% 3.96% 3.00% 2.65%
Nonperforming
assets/total
assets 3.34 3.51 4.08 3.38 2.93
Allowance for loan
losses/total
loans 1.66 1.26 1.36 1.06 1.11
Allowance for loan
losses/
nonperforming loans 57.69 47.87 34.29 35.40 41.71
Texas Ratio(2) 26.71 27.76 34.77 28.99 25.54
PROFITABILITY
RATIOS
Return on average
assets (1.98)% 2.81% (.14)% 1.19% .38%
Return on average
equity (17.24) 25.95 (1.28) 11.16 3.71
Net interest margin 3.56 3.51 3.74 3.66 3.58
Efficiency ratio 76.04 78.12 71.03 70.09 76.55
Average loans/average
deposits 94.26 92.93 92.33 88.36 92.55
CAPITAL ADEQUACY
RATIOS
Tier 1 leverage
ratio 9.38% 9.85% 9.75% 9.74% 9.65%
Tier 1 capital to
risk weighted
assets 11.65 12.48 11.92 12.18 11.94
Total capital to
risk weighted
assets 12.91 13.69 13.17 13.19 13.00
Average
equity/average
assets 11.51 10.84 10.83 10.63 10.15
Tangible
equity/tangible
assets 11.51 10.84 10.83 10.87 10.65
(1) Noncore deposits includes Internet CDs, brokered deposits and CDs
greater than $100,000
(2) Texas Ratio: Nonperforming Assets divided by Total Equity plus
Allowance for Loan Losses
Contact Information: Contact: Investor Relations (888) 343-8147 Website: www.bankmbank.com
