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Mackinac Financial Corporation Reports Second Quarter 2018 Results Including Impact of Acquisition Activity and Capital Raise

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MANISTIQUE, Mich., Aug. 02, 2018 (GLOBE NEWSWIRE) -- Mackinac Financial Corporation (NASDAQ:MFNC) (the "Corporation"), the bank holding company for mBank, today announced second quarter 2018 income of $396 thousand, or $.05 per share, compared to net income of $1.68 million, or $.27 per share, for the second quarter of 2017.  As expected, the 2018 second quarter results were impacted by expenses related to the acquisition of First Federal of Northern Michigan (FFNM) and pre-announcement diligence activity related to the pending Lincoln Community Bank (Lincoln) transaction.  Weighted average share count was increased by a common stock offering by the Corporation in June 2018 and the issuance of shares in the FFNM acquisition.

On May 18, 2018 the Corporation completed the acquisition of FFNM.  The Corporation issued 2,146,378 new shares as consideration for the purchase.   On June 15, 2018, the Corporation closed a common stock offering resulting in gross proceeds of roughly $34.50 million and net proceeds of roughly $32.40 million.  The Corporation issued 2,225,807 shares in connection with the stock offering.  As a result of the activities noted above, weighted average shares outstanding for the second quarter of 2018 were 7,041,010 compared to 6,294,930 for the same period of 2017 and 6,304,203 shares for the first quarter of 2018.

The Corporation still expects cost efficiencies from the FFNM acquisition and the pending Lincoln acquisition to be fully phased in by the end of 2018, however, the savings relating to FFNM were only partially integrated and realized in the second quarter of 2018. The Corporation completed a successful data processing conversion of FFNM over the weekend of July 13th. The Corporation expects the pending Lincoln acquisition to close end of third quarter or early in the fourth quarter subject to final regulatory approvals with a data conversion scheduled for mid-fourth quarter.

In connection with the acquisition, the Corporation had second quarter GAAP pre-tax transaction related expenses totaling $1.98 million.  These one-time costs reduced the reported net income for the quarter by $1.56 million on an after-tax basis.  The adjusted net income for the second quarter of 2018 (exclusive of the transaction related expenses) would equate to $1.96 million.   The majority of the expenses associated with the common stock offering were capitalized in accordance with GAAP.   

Total assets of the Corporation at June 30, 2018 were $1.27 billion compared to $1.03 billion at June 30, 2017.  Shareholders' equity at June 30, 2018 totaled $148.87 million, compared to $81.31 million on June 30, 2017. The tangible book value per share equated to $11.57 on June 30, 2018 compared to $11.72 per share a year ago.  Subsequent to receiving the proceeds from the stock offering, the Corporation paid down approximately $19.45 million in senior holding company debt in the second quarter. 

The Corporation's primary asset, mBank, recorded net income of $1.20 million in the second quarter of 2018, compared to $2.05 million for the same period in 2017.  Combined acquisition-related expenses totaled $1.45 million at the bank level, with an after-tax impact of $1.15 million. Adjusted core net income (exclusive of the expenses) for second quarter 2018 was $2.35 million.

Revenue

Total revenue of the corporation for the three months ended June 30, 2018 equated to $13.80 million compared to $11.66 million for the same period of 2017.  Total interest income was $12.94 million for the second quarter of 2018 and $10.87 for the same period in 2017.  The 2018 second quarter interest income included accretive yield of $284 thousand from combined credit mark accretion associated with acquisitions compared to 2017 same period of $351 thousand. The non-interest income portion of total revenue increased slightly year-over-year from $795 thousand in 2017 to $863 thousand in 2018, partially due to the positive impact of the FFNM acquisition. 

Loan Production / Credit Risk

Total balance sheet loans at June 30, 2018 were $1.00 billion compared to June 30, 2017 balances of $811.08 million.  Total loans under management now reside at $1.34 billion which includes $334 million of service retained loans.  New loan production for the first half of 2018 was slightly behind previous year at $103 million with origination activity increasing in the second quarter, as expected.  Commercial originations accounted for $62 million, retail, predominantly mortgage, equated to $41 million. Commenting on new loan production and overall lending activities, Kelly W. George, President and CEO of mBank, stated, "Commercial loan production remains consistent with prior year with a continued competitive environment for the high-quality earning assets we originate. Based on steady deal flow since the FFNM acquisition date, we expect that the addition of the FFNM markets will have a positive impact on all types of originations for the second half of 2018 as the operational and cultural integration of this transaction has gone very well. Likewise, in-house mortgage production has ramped up in our more active summer months and is consistent with 2017 first half activity.  As we alluded to in our first quarter communications, we have seen the change in interest rates impact our secondary market origination, which is at about 70% of previous year levels."

Nonperforming loans totaled $5.03 million, .50% of total loans at June 30, 2018 compared to $3.75 million, or .47%, of total loans at June 30, 2017.  The dollar amount increase in non-performing loans is the result of credits acquired in the FFNM transaction which were marked to market as part of the credit due diligence process.  Total loan delinquencies greater than 30 days resided at a nominal .89%, compared to .59% in the second quarter of 2017. Commenting on overall credit risk, Mr. George stated, "As expected, we saw a slight increase in our non-performing credit ratios following the FFNM acquisition.  Similar to previous transactions, we anticipate this will normalize over the coming quarters as we work to quickly resolve some of these acquired credits.  Overall, loan portfolio performance, both legacy mBank and acquired FFNM, remains strong with no material credit issues within any of the business segments. Purchase accounting marks from the previously acquired banks have continued to prove accurate, attaining expected accretion levels. The acquired loan portfolio from FFNM should provide accretive results to our bottom line and support in overall granularity and concentration levels from a macro perspective." 

Margin Analysis / Funding

Net interest income in the second quarter of 2018 resided at $10.81 million, or 4.26%, compared to $9.32 million, or 4.24%, in the second quarter of 2017.  Second quarter 2018 total interest expense was $2.13 million versus $1.55 million for the same period of 2017.  Of the $578 thousand interest expense increase from previous year, $333 thousand was attributable to interest on brokered CDs due to repricing experienced from normal maturities and renewals at market rates.  An additional $167 thousand of the total was a result of increased expense on our CD & IRA products due to some slightly higher rates offered for competitive reasons.  Total brokered deposits were $152 million at the end of June 2018, down from $217 million at June 30, 2017.  FHLB borrowings were up from $71 million to $92 million year-over-year as a result of liabilities acquired from FFNM.  The Corporation expects to opportunistically reduce these borrowings as they mature.  The collective $44 million net improvement in these combined wholesale funding categories was partially made possible by the complementary balance sheet and deposit base of FFNM.  Following the close of the FFNM acquisition, the Corporation sold roughly $46 million of the acquired investment portfolio to decrease its wholesale funding. 

Mr. George stated, "We have been successful in maintaining our strong net interest margin in the rising rate environment, and each rate increase should have positive impact on the income generated from our loan portfolio.  With the lower cost core deposit base we acquired from FFNM, we have begun to reposition the balance sheet and remove some of the more volatile and higher cost wholesale funding sources that we have utilized in the past.  This repositioning should further stabilize our funding and position us very well on the liability side for the remainder of 2018 and decrease our relative funding costs. We will also continue to proactively monitor as to when a need could occur to move pricing up on our core transactional accounts due to expected market pressures, a challenge all banks will face this year. We have pivoted to a more offensive posture in terms of overall core deposit gathering initiatives within our branch network. At this time, our deposit beta remains strong at .08 when comparing the movement in the federal funds rate to the movement on our blended interest-bearing deposit rate."   

Noninterest Expense

Noninterest expense, at $11.08 million in the second quarter of 2018, increased $3.56 million from the second quarter 2017 total of $7.52 million. The expense variance from the second quarter of 2017 was heavily impacted by the $1.98 million in pre-tax transaction related expenses as well as the additional expense related to the larger bank platform following the FFNM closing, including additional salary, benefits and occupancy costs.  The Corporation still expects to realize the 40% cost efficiencies from the FFNM acquisition as originally projected and believes they will be fully phased in by the end of 2018.     

Assets and Capital

Total assets of the Corporation at June 30, 2018 were $1.27 billion compared to $1.03 billion at June 30, 2017.  Shareholders' equity at June 30, 2018 totaled $148.87 million, compared to $81.31 million on June 30, 2017. The tangible book value per share equated to $11.57 on June 30, 2018 compared to $11.72 per share a year ago.  Both the common stock offering and the FFNM acquisition had positive impacts on the Corporation's overall capitalization and regulatory capital ratios.  Of the $32.4 net proceeds from the June 2018 common stock offering, the corporation utilized $19.45 million to retire senior holding company debt.  The Corporation is "well-capitalized" and the Bank is "well-capitalized" with total risk-based capital to risk weighted assets of 11.06% and 12.39%, respectively.

Paul D. Tobias, Chairman and Chief Executive Officer of the Corporation concluded, "We had a very busy and productive quarter with the closing of the FFNM transaction, the announcement of the Lincoln Community Bank acquisition and the successful common stock offering.  All three of these events are representative of our consistent strategy of asset growth and balance sheet strength while driving continually improving earnings metrics.  Both FFNM and Lincoln are accretive transactions that add strategic and complementary markets where we can grow organically.  The stock offering was completed at a minimal market price discount, strengthening our balance sheet and providing the capital we need to continue to execute our growth plans.  Further, the ability to put a considerable portion of the new capital to work through the reduction of senior holding company debt and the purchase of Lincoln allows us to quickly hurdle our cost of capital with the expected yield and savings from the activities."

Mackinac Financial Corporation is a registered bank holding company formed under the Bank Holding Company Act of 1956 with assets in excess of $1.25 billion 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 29 branch locations; eleven in the Upper Peninsula, ten in the Northern Lower Peninsula, one in Oakland County, Michigan, and seven in Northern Wisconsin.  The Corporation'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," "view," 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

    As of and For the   As of and For the As of and For the
    Period Ending   Year Ending Period Ending
    June 30,   December 31, June 30,
(Dollars in thousands, except per share data)   2018   2017 2017
    (Unaudited)     (Unaudited)
Selected Financial Condition Data (at end of period):          
Assets   $   1,274,095   $ 985,367   $ 1,027,450
Loans       1,003,377     811,078     790,753
Investment securities       114,682     75,897     82,212
Deposits       1,015,501     817,998     848,245
Borrowings       91,747     79,552     92,024
Shareholders' equity       148,866     81,400     81,313
           
           
Selected Statements of Income Data six months and year ended):        
Net interest income   $   20,122   $ 37,938   $ 18,485
Income before taxes       2,444     11,018     5,162
Net income       1,933     5,479     3,406
Income per common share - Basic     .27     .87   .54
Income per common share - Diluted     .27     .87   .54
Weighted average shares outstanding       7,041,010     6,288,791     6,282,551
Weighted average shares outstanding- Diluted       7,073,764     6,322,413     6,298,515
           
Three Months Ended:          
Net interest income   $   10,813   $ 9,664   $ 9,319
Income before taxes       499     2,838     2,547
Net income       396     (20 )   1,680
Income per common share - Basic     .05     -   .27
Income per common share - Diluted     .05     -   .27
Weighted average shares outstanding       7,769,720     6,294,930     6,294,930
Weighted average shares outstanding- Diluted       7,809,018     6,294,930     6,307,883
           
Selected Financial Ratios and Other Data:          
Performance Ratios:          
Net interest margin       4.23 %   4.20 %   4.21
Efficiency ratio       87.27     71.39     71.61
Return on average assets     .37     .55   .70
Return on average equity       4.27     6.74     8.57
           
Average total assets   $   1,050,305   $ 995,826   $ 982,374
Average total shareholders' equity       91,258     81,349     80,158
Average loans to average deposits ratio       99.89 %   96.29 %   95.38
           
           
Common Share Data at end of period:          
Market price per common share   $   16.58   $ 15.90   $ 13.99
Book value per common share       13.90     12.93     12.92
Tangible book value per share       11.57     11.72     11.69
Dividends paid per share, annualized     .480     .480   .480
Common shares outstanding       10,712,745     6,294,930     6,294,930
           
Other Data at end of period:          
Allowance for loan losses   $   5,141   $ 5,079   $ 5,133
Non-performing assets   $   7,486   $ 6,126   $ 7,798
Allowance for loan losses to total loans     .51 %   .63 % .65
Non-performing assets to total assets     .59 %   .62 % .76
Texas ratio       5.80 %   7.77 %   9.91
           
Number of:          
Branch locations       29     23     24
FTE Employees       233     233     235
                   

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

  June 30,   December 31,   June 30,
  2018   2017   2017
  (Unaudited)       (Unaudited)
ASSETS          
           
Cash and due from banks $   64,874     $   37,420     $   78,972  
Federal funds sold     15         6         10,006  
Cash and cash equivalents     64,889         37,426         88,978  
           
Interest-bearing deposits in other financial institutions     10,873         13,374         14,312  
Securities available for sale     114,182         75,397         81,712  
Other securities     500         500         500  
Federal Home Loan Bank stock     4,860         3,112         3,250  
           
Loans:          
Commercial     684,725         572,936         559,388  
Mortgage     299,450         220,708         212,306  
Consumer     19,202         17,434         19,059  
Total Loans     1,003,377         811,078         790,753  
Allowance for loan losses     (5,141 )       (5,079 )       (5,133 )
Net loans     998,236         805,999         785,620  
           
Premises and equipment     21,790         16,290         16,654  
Other real estate held for sale     2,461         3,558         4,050  
Deferred tax asset     8,000         4,970         7,139  
Deposit based intangibles     4,504         1,922         2,047  
Goodwill     20,389         5,694         5,694  
Other assets     23,411         17,125         17,494  
           
TOTAL ASSETS $   1,274,095     $   985,367     $   1,027,450  
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
           
LIABILITIES:          
Deposits:          
Noninterest bearing deposits $   220,176     $   148,079     $   156,970  
NOW, money market, interest checking     337,344         280,309         259,423  
Savings     106,022         61,097         61,741  
CDs<$250,000     181,352         142,159         142,649  
CDs>$250,000     18,930         11,055         10,597  
Brokered     151,677         175,299         216,865  
Total deposits     1,015,501         817,998         848,245  
           
Federal funds purchased     10,000         -         -  
Borrowings     91,747         79,552         92,024  
Other liabilities     7,980         6,417         5,868  
Total liabilities     1,125,228         903,967         946,137  
           
SHAREHOLDERS' EQUITY:          
Common stock and additional paid in capital - No par value          
Authorized - 18,000,000 shares          
Issued and outstanding - 10,712,745; 6,294,930; and 6,294,930 shares respectively     128,880         61,981         61,782  
Retained earnings     19,602         19,711         19,101  
Accumulated other comprehensive income          
Unrealized gains (losses) on available for sale securities     606         (71 )       508  
Minimum pension liability     (221 )       (221 )       (78 )
           
Total shareholders' equity     148,867         81,400         81,313  
           
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $   1,274,095     $   985,367     $   1,027,450  
                       

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

    Three Months Ended   Six Months Ended
    June 30,   June 30,
    2018   2017   2018   2017
    (Unaudited)   (Unaudited)
INTEREST INCOME:                
Interest and fees on loans:                
Taxable   $   12,071     $   10,260     $   22,461     $   20,217  
Tax-exempt       31         19         56         52  
Interest on securities:                
Taxable       560         396         932         795  
Tax-exempt       79         75         148         154  
Other interest income       197         116         396         244  
Total interest income       12,938         10,866         23,993         21,462  
                 
INTEREST EXPENSE:                
Deposits       1,602         1,054         2,838         2,013  
Borrowings       523         493         1,033         964  
Total interest expense       2,125         1,547         3,871         2,977  
                 
Net interest income       10,813         9,319         20,122         18,485  
Provision for loan losses       100         50         150         200  
Net interest income after provision for loan losses       10,713         9,269         19,972         18,285  
                 
OTHER INCOME:                
Deposit service fees       323         268         592         540  
Income from loans sold on the secondary market       277         316         454         614  
SBA/USDA loan sale gains       83         89         134         149  
Mortgage servicing income       (2 )       (9 )       (10 )       (17 )
Other       182         131         307         285  
Total other income       863         795         1,477         1,571  
                 
OTHER EXPENSE:                
Salaries and employee benefits       4,923         3,658         9,077         7,455  
Occupancy       928         776         1,739         1,561  
Furniture and equipment       644         544         1,175         1,025  
Data processing       586         489         1,090         950  
Advertising       192         174         387         297  
Professional service fees       397         405         701         726  
Loan and deposit       148         155         274         334  
Writedowns and losses on other real estate held for sale       40         243         66         255  
FDIC insurance assessment       187         189         343         346  
Telephone       152         134         307         291  
Transaction related expenses       1,976         -         2,165         -  
Other       904         750         1,681         1,454  
Total other expenses       11,077         7,517         19,005         14,694  
                 
Income before provision for income taxes       499         2,547         2,444         5,162  
Provision for income taxes       103         867         511         1,756  
                 
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS       396         1,680         1,933         3,406  
                 
                 
INCOME PER COMMON SHARE:                
Basic   $  .05     $ .27     $ .27     $ .54  
Diluted   $ .05     $ .27     $ .27     $ .54  
                 

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,
  2018   2017   2017
  (Unaudited)   (Unaudited)   (Unaudited)
Commercial Loans:          
Real estate - operators of nonresidential buildings $   117,285   $   119,025   $   114,129
Hospitality and tourism     78,122       75,228       73,109
Lessors of residential buildings     37,866       33,032       30,719
Gasoline stations and convenience stores     22,207       21,176       19,903
Logging     17,368       17,554       18,143
Commercial construction     20,895       9,243       10,145
Other     390,982       297,678       293,240
  Total Commercial Loans     684,725       572,936       559,388
           
1-4 family residential real estate     284,041       209,890       200,771
Consumer     19,202       17,434       19,059
Consumer construction     15,409       10,818       11,535
           
  Total Loans $   1,003,377   $   811,078   $   790,753
                 

Credit Quality (at end of period):

  June 30,    December 31,   June 30,  
  2018   2017   2017  
  (Unaudited)   (Unaudited)   (Unaudited)  
Nonperforming Assets :            
Nonaccrual loans $   3,825   $   2,388   $   3,644  
Loans past due 90 days or more     -       -       -  
Restructured loans     1,200       180       104  
  Total nonperforming loans     5,025       2,568       3,748  
Other real estate owned     2,461       3,558       4,050  
  Total nonperforming assets $   7,486   $   6,126   $   7,798  
Nonperforming loans as a % of loans   .50 % .32 % .47 %
Nonperforming assets as a % of assets   .59 %   .62 %   .76 %
Reserve for Loan Losses:            
At period end $   5,141   $   5,079   $   5,133  
As a % of average loans   .51 % .64 % .65 %
As a % of nonperforming loans     102.31 %     197.78 %     136.95 %
As a % of nonaccrual loans     215.28 %     212.69 %     140.86 %
Texas Ratio     5.80 %     7.77 %     9.91 %
             
Charge-off Information (year to date):            
  Average loans $   858,508   $   795,532   $   784,823  
  Net charge-offs (recoveries) $   88   $   566   $   87  
  Charge-offs as a % of average            
  loans, annualized   .02 % .07 %   .02 %
             

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS

  QUARTER ENDED  
  (Unaudited)  
  June 30,   March 31,   December 31   September 30,   June 30  
  2018   2018   2017   2017   2017  
BALANCE SHEET (Dollars in thousands)                    
                     
Total loans $   1,003,377     $   812,441     $   811,078     $   808,149     $   790,753    
Allowance for loan losses     (5,141 )       (5,101 )       (5,079 )       (5,130 )       (5,133 )  
  Total loans, net     998,236         807,340         805,999         803,019         785,620    
Total assets     1,274,095         983,929         985,367         1,015,070         1,027,450    
Core deposits     844,894         602,601         631,644         643,859         621,303    
Noncore deposits     170,607         204,196         186,354         191,344         226,942    
  Total deposits     1,015,501         806,797         817,998         835,203         848,245    
Total borrowings     91,747          80,002         79,552         91,397         92,024    
Total shareholders' equity     148,867         81,857         81,400         82,649         81,313    
Total tangible equity     123,974         74,303         73,784         74,970         73,572    
Total shares outstanding     10,712,745         6,332,560         6,294,930         6,294,930         6,294,930    
Weighted average shares outstanding     7,041,010         6,304,203         6,294,930         6,294,930         6,294,930    
                     
AVERAGE BALANCES (Dollars in thousands)                    
                     
Assets $   1,117,188     $   982,679     $   996,966     $   1,021,152     $   984,236    
Loans     905,802         810,688         808,306         803,825         787,143    
Deposits     913,220         805,092         817,338         841,699         820,375    
Equity     100,518         81,894         82,879         82,162         81,013    
                     
INCOME STATEMENT (Dollars in thousands)                    
                     
Net interest income $   10,813     $   9,309     $   9,664     $   9,789     $   9,319    
Provision for loan losses     100         50         225         200         50    
  Net interest income after provision     10,713         9,259         9,439         9,589         9,269    
Total noninterest income     863         614         1,317         1,153         795    
Total noninterest expense     11,077         7,928         7,918         7,724         7,517    
Income before taxes     499         1,945         2,838         3,018         2,547    
Provision for income taxes     103         408         2,858          925         867    
Net income available to common shareholders $   396     $   1,537     $   (20 )   $   2,093     $   1,680    
Income pre-tax, pre-provision $   599     $   1,995     $    3,062     $   3,218     $   2,597    
                     
PER SHARE DATA                    
                     
Earnings $ .05     $ .24     $ (.01 )   $ .33     $ .27    
Book value  per common share     13.90       12.96       12.93       13.13       12.92    
Tangible book value per share     11.57       11.73       11.72       11.91       11.69    
Market value, closing price     16.58       16.25       15.90       15.50       13.99    
Dividends per share    .120       .120       .120       .120       .120    
                     
ASSET QUALITY RATIOS                    
                     
Nonperforming loans/total loans   .50 %     .53 %     .32 %     .38 %     .47 %  
Nonperforming assets/total assets   .59       .70       .62       .74       .76    
Allowance for loan losses/total loans     .51       .63       .63       .63       .65    
Allowance for loan losses/nonperforming loans     102.31       117.48       197.78       167.37       136.95    
Texas ratio     5.80       6.87       7.77       9.34       9.91    
                     
PROFITABILITY RATIOS                    
                     
Return on average assets     .14 %     .63 %     (.01 )%     .81 %     .68 %  
Return on average equity     1.58       7.61       (.10 )     10.11       8.32    
Net interest margin     4.26       4.19       4.18       4.23       4.24    
Average loans/average deposits     99.19       100.70       98.89       95.50       95.95    
                     
CAPITAL ADEQUACY RATIOS                    
                     
Tier 1 leverage ratio     9.39 %     7.25 %     7.06 %     6.82 %     7.02 %  
Tier 1 capital to risk weighted assets     11.87       8.79       8.66       8.47       8.57    
Total capital to risk weighted assets     12.39       9.43       9.29       9.10       9.21    
Average equity/average assets (for the quarter)     9.00       8.33       8.31       8.05       8.23    
Tangible equity/tangible assets (at quarter end)     9.92       7.62       7.55       7.44       7.22    
                                         


Contact:                     Jesse A. Deering, (248) 290-5906 / jdeering@bankmbank.com
Paul D. Tobias, (248) 290-5900 / ptobias@bankmbank.com
Website:   www.bankmbank.com
     

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