Mackinac Financial Corporation Announces Rights Offering and Entry Into Securities Purchase Agreement

Mackinac Financial Corporation

, the holding corporation for mBank, announced today that it is planning to commence a $7 million rights offering of common stock to its stockholders. The Company will file a registration statement with the Securities and Exchange Commission with respect to the rights offering. The Company has set April 6, 2012 as the record date for the rights offering. In conjunction with the rights offering, Mackinac Financial Corporation has entered into a Securities Purchase Agreement with Steinhardt Capital Investors, LLLP. Pursuant to the securities purchase agreement, SCI has agreed to purchase, upon completion of the rights offering, between $5,000,000 and $11,000,000 of the Company's securities, comprised of varying types and amounts, depending on (i) the outcome of the rights offering and (ii) SCI receiving approval from the Board of Governors of the Federal Reserve System to hold more than 9.9% of the total number of our Common Shares then issued and outstanding. The proceeds from the sale of securities derived from the SCI investment and the rights offering will be used to repurchase the Company's outstanding TARP Securities that were issued by the Company to the U.S. Department of the Treasury under the Troubled Asset Relief Capital Purchase Program.