MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share data)
For The Period Ended
--------------------------------------------
March 31, December 31, March 31,
2008 2007 2007
------------ ------------ ------------
(Unaudited) (Unaudited)
Selected Financial
Condition Data (at end of
period):
Total assets $ 417,175 $ 408,880 $ 375,644
Total loans 360,056 355,079 318,421
Total deposits 326,047 320,827 304,412
Borrowings 48,849 45,949 38,307
Total shareholders' equity 39,633 39,321 29,932
Selected Statements of
Income Data:
Net interest income $ 3,045 $ 13,417 $ 3,178
Income before taxes 164 2,923 1,035
Net income 139 10,163 1,035
Income per common share -
Basic .04 2.96 .30
Income per common share -
Diluted .04 2.96 .30
Selected Financial Ratios
and Other Data:
Performance Ratios:
Net interest margin 3.13 % 3.60 % 3.55 %
Efficiency ratio 95.34 79.46 82.40
Return on average assets .13 2.59 1.10
Return on average equity 1.42 31.05 14.35
Average total assets $ 417,682 $ 392,313 $ 380,403
Average total shareholders'
equity 39,491 32,731 29,254
Average loans to average
deposits ratio 106.48 % 104.94 % 102.73 %
Common Share Data (at end
of period):
Market price per common
share $ 8.50 $ 8.98 $ 9.26
Book value per common share $ 11.56 $ 11.47 $ 8.73
Common shares outstanding 3,428,695 3,428,695 3,428,695
Weighted average shares
outstanding 3,428,695 3,428,695 3,428,695
Other Data (at end of
period):
Allowance for loan losses $ 3,924 $ 4,146 $ 4,975
Non-performing assets $ 4,518 $ 5,234 $ 4,989
Allowance for loan losses
to total loans 1.09 % 1.17 % 1.56 %
Non-performing assets to
total assets 1.08 % 1.28 % 1.33 %
Number of:
Branch locations 12 12 13
FTE Employees 103 100 104
MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31, March 31,
(Dollars in thousands) 2008 2007 2007
----------- ----------- -----------
(unaudited) (unaudited)
ASSETS
Cash and due from banks $ 6,849 $ 6,196 $ 5,647
Federal funds sold 1,568 166 6,330
----------- ----------- -----------
Cash and cash equivalents 8,417 6,362 11,977
Interest-bearing deposits in other
financial institutions 382 1,810 856
Securities available for sale 24,581 21,597 28,511
Federal Home Loan Bank stock 3,794 3,794 3,794
Loans:
Commercial 291,980 288,839 256,133
Mortgage 64,624 62,703 59,317
Installment 3,452 3,537 2,971
----------- ----------- -----------
Total Loans 360,056 355,079 318,421
Allowance for loan losses (3,924) (4,146) (4,975)
----------- ----------- -----------
Net loans 356,132 350,933 313,446
Premises and equipment 11,511 11,609 12,252
Other real estate held for sale 1,137 1,226 127
Other assets 11,221 11,549 4,681
----------- ----------- -----------
TOTAL ASSETS $ 417,175 $ 408,880 $ 375,644
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Non-interest-bearing deposits $ 26,876 $ 25,557 $ 23,416
Interest-bearing deposits
NOW and Money Market 81,952 81,160 70,558
Savings 11,530 12,485 13,488
CDs < $100,000 83,087 80,607 94,067
CDs > $100,000 22,010 22,355 24,475
Brokered 100,592 98,663 78,408
----------- ----------- -----------
Total deposits 326,047 320,827 304,412
Borrowings
Federal funds purchased 10,410 7,710 -
Short-term 2,159 1,959 -
Long-term 36,280 36,280 38,307
----------- ----------- -----------
Total borrowings 48,849 45,949 38,307
Other liabilities 2,646 2,783 2,993
----------- ----------- -----------
Total liabilities 377,542 369,559 345,712
Shareholders' equity:
Preferred stock - No par value:
Authorized 500,000 shares, no
shares outstanding
Common stock and additional paid
in capital - No par value
Authorized - 18,000,000 shares
Issued and outstanding -
3,428,695 shares 42,862 42,843 42,750
Accumulated deficit (3,441) (3,582) (12,709)
Accumulated other comprehensive
income (loss) 212 60 (109)
----------- ----------- -----------
Total shareholders' equity 39,633 39,321 29,932
----------- ----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 417,175 $ 408,880 $ 375,644
=========== =========== ===========
MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except per share data) Three Months Ended
March 31,
-----------------------
2008 2007
----------- -----------
(Unaudited) (Unaudited)
INTEREST INCOME:
Interest and fees on loans:
Taxable $ 6,100 $ 6,233
Tax-exempt 108 171
Interest on securities:
Taxable 266 301
Tax-exempt 1 -
Other interest income 89 200
----------- -----------
Total interest income 6,564 6,905
----------- -----------
INTEREST EXPENSE:
Deposits 3,065 3,222
Borrowings 454 505
----------- -----------
Total interest expense 3,519 3,727
----------- -----------
Net interest income 3,045 3,178
Provision for loan losses - -
----------- -----------
Net interest income after provision for loan losses 3,045 3,178
----------- -----------
OTHER INCOME:
Service fees 174 161
Net security gains 65 -
Net gains on loan sales 48 108
Proceeds from settlement of lawsuit - 470
Other 23 174
----------- -----------
Total other income 310 913
----------- -----------
OTHER EXPENSES:
Salaries and employee benefits 1,807 1,738
Occupancy 355 334
Furniture and equipment 178 157
Data processing 221 171
Professional service fees 153 151
Loan and deposit 110 72
Telephone 45 58
Advertising 60 92
Other 262 283
----------- -----------
Total other expenses 3,191 3,056
----------- -----------
Income before provision for income taxes 164 1,035
Provision for (benefit of) income taxes 25 -
----------- -----------
NET INCOME $ 139 $ 1,035
=========== ===========
INCOME PER COMMON SHARE:
Basic $ .04 $ .30
=========== ===========
Diluted $ .04 $ .30
=========== ===========
MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
LOAN PORTFOLIO AND CREDIT QUALITY
(Dollars in thousands)
Loan Portfolio Balances (at end of period):
March December March
31, 2008 31, 2007 31, 2007
---------- ---------- ----------
Commercial Loans
Real estate - operators of nonresidential
buildings $ 43,167 $ 41,597 $ 44,155
Hospitality and tourism 35,760 37,604 33,726
Real estate agents and managers 30,235 29,571 27,313
New car dealers 10,551 10,569 10,139
Other 144,714 130,546 105,937
---------- ---------- ----------
Total Commercial Loans 264,427 249,887 221,270
1-4 family residential real estate 59,532 57,613 54,204
Consumer 3,452 3,537 2,971
Construction
Commercial 27,553 38,952 34,863
Consumer 5,092 5,090 5,113
---------- ---------- ----------
Total Loans $ 360,056 $ 355,079 $ 318,421
========== ========== ==========
Credit Quality (at end of period):
March December March
31, 2008 31, 2007 31, 2007
--------- --------- ---------
Nonperforming Assets:
Nonaccrual loans $ 3,381 $ 3,298 $ 4,142
Loans past due 90 days or more - 710 720
--------- --------- ---------
Total nonperforming loans 3,381 4,008 4,862
Other real estate owned 1,137 1,226 127
--------- --------- ---------
Total nonperforming assets $ 4,518 $ 5,234 $ 4,989
========= ========= =========
Nonperforming loans as a % of loans .94% 1.13% 1.53%
--------- --------- ---------
Nonperforming assets as a % of assets 1.08% 1.28% 1.33%
--------- --------- ---------
Reserve for Loan Losses:
At period end $ 3,924 $ 4,146 $ 4,975
As a % of loans 1.09% 1.17% 1.56%
--------- --------- ---------
As a % of nonperforming loans 116.06% 103.44% 102.32%
--------- --------- ---------
As a % of nonaccrual loans 116.06% 125.71% 120.11%
========= ========= =========
Charge-off Information (year to date):
Average loans 357,778 333,415 318,072
--------- --------- ---------
Net charge-offs 222 1,260 31
--------- --------- ---------
Charge-offs as a % of average loans .06% .38% .01%
--------- --------- ---------
MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS
QUARTER ENDED
----------------------------------------------------
(Unaudited)
----------------------------------------------------
March December September June March
31, 2008 31, 2007 30, 2007 30, 2007 31, 2007
--------- --------- --------- --------- ---------
BALANCE SHEET
(Dollars in
thousands)
Total loans $ 360,056 $ 355,079 $ 344,149 $ 338,896 $ 318,421
Allowance for loan
losses (3,924) (4,146) (5,022) (4,920) (4,975)
--------- --------- --------- --------- ---------
Total loans, net 356,132 350,933 339,127 333,976 313,446
Intangible assets 104 124 143 163 182
Total assets 417,175 408,880 401,213 393,319 375,644
Core deposits 203,445 199,809 218,638 211,773 201,529
Noncore deposits (1) 122,602 121,018 102,733 109,473 102,883
--------- --------- --------- --------- ---------
Total deposits 326,047 320,827 321,371 321,246 304,412
Total borrowings 48,849 45,949 38,239 38,307 38,307
Total shareholders'
equity 39,633 39,321 38,697 30,485 29,932
Total shares
outstanding 3,428,695 3,428,695 3,428,695 3,428,695 3,428,695
AVERAGE BALANCES
(Dollars in
thousands)
Assets $ 417,682 $ 406,308 $ 400,105 $ 382,065 $ 380,403
Loans 357,778 350,050 340,391 324,721 318,072
Deposits 336,016 324,194 327,293 309,469 309,619
Equity 39,491 38,973 32,184 30,412 29,254
INCOME STATEMENT
(Dollars in
thousands)
Net interest income $ 3,045 $ 3,410 $ 3,560 $ 3,269 $ 3,178
Provision for loan
losses - - 400 - -
--------- --------- --------- --------- ---------
Net interest
income after
provision 3,045 3,410 3,160 3,269 3,178
Total noninterest
income 310 355 396 342 913
Total noninterest
expense 3,191 2,978 3,001 3,065 3,056
--------- --------- --------- --------- ---------
Income before taxes 164 787 555 546 1,035
Provision for income
taxes 25 260 (7,500) - -
--------- --------- --------- --------- ---------
Net income $ 139 $ 527 $ 8,055 $ 546 $ 1,035
========= ========= ========= ========= =========
PER SHARE DATA
Earnings - basic $ .04 $ .15 $ 2.35 $ .16 $ .30
Earnings - diluted .04 .15 2.35 .16 .30
Book value 11.56 11.47 11.29 8.89 8.73
Market value,
closing price 8.50 8.98 8.75 9.45 9.26
ASSET QUALITY RATIOS
Nonperforming
loans/total loans .94% 1.13% .92% 1.49% 1.53%
Nonperforming
assets/total assets 1.08 1.28 .90 1.30 1.33
Allowance for loan
losses/total loans 1.09 1.17 1.46 1.45 1.56
Allowance for loan
losses/nonperforming
loans 116.06 103.42 158.32 97.45 102.32
PROFITABILITY RATIOS
Return on average
assets .13% .51% 7.99% .57% 1.10%
Return on average
equity 1.42 5.36 99.30 7.20 14.35
Net interest margin 3.13 3.55 3.71 3.60 3.55
Efficiency ratio 95.34 78.02 74.71 83.18 82.39
Average loans/
Average deposits 106.48 107.98 104.00 104.93 102.73
CAPITAL ADEQUACY RATIOS
Tier 1 leverage ratio 7.85% 8.05% 8.03% 7.97% 7.85%
Tier 1 capital to
risk weighted
assets 8.84 8.97 9.03 8.85 9.16
Total capital to
risk weighted
assets 9.92 10.13 10.28 10.10 10.41
Average equity/
average assets 9.45 9.59 8.04 7.96 7.69
Tangible equity/
tangible assets,
period end 9.48 9.59 9.61 7.71 7.92
(1) Noncore deposits includes Internet CDs, brokered deposits and CDs
greater than $100,000
Contact Information: Contact: Investor Relations (888) 343-8147 Website: www.bankmbank.com



