Mackinac Financial Corporation (Nasdaq: MFNC) (the “Corporation”),
the bank holding company for mBank, today announced 2019 third
quarter net income of $3.72 million, or $.35 per share, compared to
2018 third quarter net income of $3.07 million, or $.29 per
share. The 2018 third quarter results included expenses
related to the acquisitions of First Federal of Northern Michigan
(“FFNM”) and Lincoln Community Bank (“Lincoln”), which had an
after-tax impact of $276 thousand on earnings. Adjusted net
income (net of transaction related expenses) for the third quarter
of 2018 was $3.35 million or $.31 per share. Third quarter
2019 net income, compared to 2018 third quarter adjusted net
income, increased by $373 thousand, or 11%.
Net income for the first three quarters of 2019
was $10.56 million, or $.98 per share, compared to $5.00 million,
or $.60 per share for the same period of 2018. When giving
effect to after-tax transaction related expenses of $2.08 million
for the first three quarters, adjusted nine-month net income for
2018 was $7.08 million, or $.85 per share. The year-over-year
increase in net income for the first three quarters was $3.47
million, or 49% when giving effect to the transaction expenses in
2018.
Total assets of the Corporation at September 30,
2019 were $1.36 billion, compared to $1.25 billion at September 30,
2018. Weighted average shares outstanding for the third
quarter of 2019 were 10,740,712, compared to 10,712,745 for the
same period of 2018. Shareholders’ equity at September 30, 2019
totaled $160.17 million, compared to $149.37 million at September
30, 2018. Book value per share equated to $14.91 at the end
of the third quarter 2019, compared to $13.94 per share a year
ago. Tangible book value at quarter-end was $135.38 million,
or $12.60 per share, compared to $124.61 million, or $11.63 per
share, at the end of the third quarter 2018.
Additional notes:
- mBank, the Corporation’s primary
asset, recorded year-to-date net income of $11.33 million for the
first nine months of 2019, compared to $6.73 million for the same
period of 2018. The 2018 nine-month results included expenses
related to the acquisition of FFNM and Lincoln, which had an
after-tax impact of $1.47 million on earnings. Adjusted bank
net income (net of transaction related expenses) for the first
three quarters of 2018 was $8.20 million, equating to a
year-over-year increase of $3.13 million, or 38%. The
increase in net income equated to an improvement in Return on
Average Assets at the bank from .80% (.97% as adjusted) for the
first nine months of 2018 to 1.14% for the same period of
2019.
- On August 28, 2019, the Corporation
announced a common stock repurchase program authorizing the buyback
of up to 5% of outstanding MFNC shares. There is no guarantee
as to the exact number of shares, if any, that will be repurchased
by the Corporation, and the Corporation may discontinue purchases
at any time that management determines additional purchases are not
warranted. The Board’s approval of this program reflects its
confidence in the Corporation’s intrinsic value. Repurchasing stock
is one means of underscoring the Corporation’s commitment to
enhancing shareholder value and it is a tool for proactive capital
management.
- On September 17, 2019, the
Corporation’s board of directors declared a cash dividend of $.14
per common share for the third quarter of 2019. The dividend was an
increase of $.02 per share from the prior quarter’s dividend and
represents a 17% increase in the annualized dividend from $.48 per
share to $.56 per share.
- Total core bank deposits have
increased $74.30 million (or 7.7%) in the first nine months of 2019
through more proactive sales activity in the treasury management
line of business and increased marketing efforts in key retail
markets where the Corporation has achieved some success in
obtaining high value clients.
- Reliance on higher-cost brokered
deposits continues to decrease significantly from $136.76 million,
or 12.46% of total deposits at year-end 2018, to a second quarter
2019 balance of $114.10 million, or 10.23% of total deposits, to
$78.50 million, or 6.57% of total deposits, as of the end of the
third quarter of 2019.
- Third quarter 2019 net interest
margin remained solid at 4.39%. Core operating margin for the
third quarter, which is net of accretive yield from purchase
accounting treatment on acquired loans (“accretion”), was 4.26%.
Revenue
Total revenue of the Corporation for third
quarter 2019 was $17.91 million, compared to $16.63 million for the
third quarter of 2018. Total interest income for the quarter
ended September 30, 2019 was $16.03 million, compared to $15.29
million for the same period in 2018. The 2019 third quarter
interest income included $404 thousand from accretion associated
with acquisitions. Accretion was $1.01 million for the same
period of 2018. The year-over-year change in accretive yield
was mainly associated with the normal level-yield accounting
treatment for acquired loan portfolios.
Loan Production and Portfolio Mix
Total balance sheet loans at September 30, 2019
were $1.06 billion, compared to September 30, 2018 balances of
$993.81 million. Total loans under management reside at $1.36
billion, which includes $303.78 million of service retained
loans. Loan production for the third quarter of 2019 was
$104.58 million, compared to $99.99 million for the third quarter
of 2018. Overall loan production for the first nine months of
2019 was $289.15 million, compared to $203.97 million for the same
period of 2018, an increase of $85.18 million, or 42%.
Increased production was evident in all lines of business and
across the entire market footprint, but driven primarily through
commercial lending activities, which were up $74 million
year-over-year. New production efforts have resulted in
year-to-date 2019 organic balance sheet loan growth of $21.08
million, or annualized growth of approximately 3%.
Overall Quarterly Loan Production:
https://www.globenewswire.com/NewsRoom/AttachmentNg/cfea46ae-1ce2-47a0-acec-b57ac41d0612
2019 New Loan
Production: https://www.globenewswire.com/NewsRoom/AttachmentNg/25910576-ab7e-4c19-b204-f9549a60dfa6
Payoff activity, outside of normal amortization,
continued to constrain portfolio growth with approximately $99
million of total principal reduction ahead of original terms
through the third quarter of 2019. Of this amount, $65.7 million
came from the commercial portfolio with $21.8 million of the total
being related to borrowers divesting of the collateral and $23.3
million being refinanced out at pricing or terms that the
Corporation was not able or willing to compete with. As noted
in the charts below, the loan portfolio remains well balanced and
diversified in terms of geography and loan type.
Total Loans by Region September,
2019: https://www.globenewswire.com/NewsRoom/AttachmentNg/642e7d36-fbbe-4a66-8fa7-aec431de51ea
MFNC Composition of Loans September,
2019: https://www.globenewswire.com/NewsRoom/AttachmentNg/9828c2fa-2428-460a-8ee5-5fda73903ec5
Commenting on new loan production and overall
lending activities, President of the Corporation and President and
CEO of mBank Kelly W. George stated, “We are pleased with our
nine-month 2019 lending trends in the wake of some continued payoff
activity and the rate cuts that occurred in the third quarter,
which applied increased pricing pressure for fixed rate commercial
loans, a trend we expect to continue going forward. We
continue to see good loan opportunities in all our markets, both on
the commercial and retail side, with a solid pipeline moving
through the end of the year and into 2020. Given the downward rate
environment shift, management has pivoted to ensure that our margin
is well maintained and that growth is in the form of ongoing
profitable loans that will ensure the long-term integrity of the
company’s well-matched balance sheet. We will continue to
proactively monitor and try to reduce payoff activity on the
commercial side, given the continued competitive pressure for good
loans from all types of lending conduits. However, we will
not stretch to retain credits within the portfolio that could apply
undue stress and negatively impact our balance sheet in the
long-term from either a macro composition or a micro individual
credit level perspective if adverse changes in overall economic
conditions in our regions were to occur.”
Credit Quality
Nonperforming loans totaled $4.86 million, or
.46% of total loans at September 30, 2019, compared to $4.53
million, or .46% of total loans at September 30, 2018. Total loan
delinquencies greater than 30 days resided at a nominal .84%,
compared to .97% at September 30, 2018. The nonperforming
assets to total assets ratio resided at .55% for third quarter of
2019, compared to .53% for the third quarter of 2018.
Commenting on overall credit risk, Mr. George
stated, “We have seen no material signs of any credit issues on a
systematic or individual credit basis within our loan book.
There has been no indication of softening credit quality through
increased payment period times for legacy clients or material
deterioration in commercial client financial statements in any of
our core industries in which we lend. Purchase accounting
marks from the previously acquired banks have continued to prove
accurate, attaining expected accretion levels, which should
continue into future periods on the normal accretion schedule.”
Margin Analysis and Funding
Net interest income for the third quarter of
2019 was $13.32 million, with $404 thousand of accretion, resulting
in a Net Interest Margin (“NIM”) of 4.39%, compared to $13.21
million in the third quarter of 2018, with $1.01 million of
accretion and a NIM of 4.60%. Core operating margin, which is
net of accretion from acquired loans, was 4.26% for the third
quarter 2019 and 4.24% for the same period of 2018.
Comparatively, net interest income for the second quarter of 2019
resided at $14.00 million ($741 thousand of accretion), a NIM of
4.76% and core NIM of 4.43%. As illustrated in the chart
below, core NIM remains comparatively strong but was impacted, as
were the margins of most banks, by the Federal Reserve Bank (the
“Fed”) rate moves in the third quarter and the effect of these
moves on the Corporation’s variable based loan portfolio.
Margin Analysis Per
Quarter: https://www.globenewswire.com/NewsRoom/AttachmentNg/b495cd15-03ef-4d94-9c71-385836cc936f
Total bank deposits (excluding brokered
deposits) have increased by $132.33 million year-over-year from
$902.74 million at September 30, 2018 to $1.04 billion at third
quarter-end 2019 as a result of the Lincoln acquisition
(approximately $53.00 million) and organic efforts (approximately
$79.33 million). Total brokered deposits have decreased
significantly and were $78.50 million at September 30, 2019,
compared to $125.32 million at September 30, 2018, a decrease of
43%. FHLB (Federal Home Loan Bank) and other borrowings were
slightly increased from $70.08 million at the end of the third
quarter 2019 from $58.22 million at the end of the third quarter
2018. This slight increase was due to the Corporation
opportunistically extending duration of roughly $25 million of
liability funding taking advantage of the inverted yield curve,
given the overall duration of wholesale funding remains very
short.
Funding Sources September,
2019: https://www.globenewswire.com/NewsRoom/AttachmentNg/18b6cc95-2117-4d93-afc4-a704337a3acd
Funding Sources September,
2019: https://www.globenewswire.com/NewsRoom/AttachmentNg/4934b6de-3e78-4095-8fc0-f2c9df007341
Mr. George stated, “The Corporation’s margin
remains strong despite the two recent Fed rate cuts with continued
focus on pricing of both the loan and deposit portfolio. We
expect some core margin compression from the Fed activity as we
continue to proactively review traditional bank product offerings
to maintain a competitive position with local peers, as well as
regional and national banks. We were able to adjust some
liability pricing in concert with the rate moves and some term
liabilities, i.e. brokered deposits, are being paid off or rolled
over at lesser rates as they mature. With our bank
deposits up roughly $74 million since year-end 2018, our strong
liquidity position has allowed for continued reduction in higher
cost brokered deposits over the course of the first three quarters
of 2019. We have significantly lessened our reliance on
wholesale funding while maintaining a shorter duration to allow for
continued repricing of most brokered CD’s in a timely manner given
the rate forecast. Our focus on new core deposit procurement
remains a key initiative for 2019 and into 2020, which has provided
some nice procurement of new high value clients. We will look
to continue to wind down our wholesale funding exposure through
aggressive marketing and business development initiatives in our
commerce hubs and within our Treasury Management line of business
throughout our entire footprint.”
Noninterest Income /
Expense
Third quarter 2019 noninterest income was $1.88
million, compared to $1.34 million for the same period of
2018. The year-over-year improvement is a combination of the
scale provided by the two 2018 acquisitions, as well as continued
focus on drivers of noninterest income, including secondary market
mortgage and SBA sales. Noninterest expense for the third quarter
of 2019 was $10.44 million, compared to $10.62 million for the same
period of 2018. The expense variance from 2018 was impacted
by the transaction related expenses from FFNM, which equated to
$350 thousand on a pre-tax basis. For comparison purposes,
noninterest expense remains consistent quarter-over-quarter with
the second quarter of 2019 equating to $10.26 million.
Assets and Capital
Total assets of the Corporation at September 30,
2019 were $1.36 billion, compared to $1.25 billion at September 30,
2018. Shareholders’ equity at September 30, 2019 totaled
$160.17 million, compared to $149.37 million at September 30,
2018. Book value per share equated to $14.91 at the end of
the third quarter 2019, compared to $13.94 per share a year
ago. Tangible book value at quarter-end was $135.38 million,
or $12.60 per share, compared to $124.61 million, or $11.63 per
share at the end of the third quarter of 2018. Both the 2018
common stock offering and the 2018 acquisitions had positive
impacts on the Corporation’s overall capitalization and regulatory
capital ratios. Both the Corporation and the Bank are
“well-capitalized” with total risk-based capital to risk-weighted
assets of 12.90% and 12.81%, and tier 1 capital to total tier 1
average assets at the Corporation of 9.81% and at the bank of
9.74%.
Paul D. Tobias, Chairman and Chief Executive
Officer of the Corporation and Chairman of mBank, concluded, “We
believe that the first three quarters of 2019 reflect the positive
trends in operating metrics and earnings quality as we fully
absorbed the two 2018 acquisitions. We continue to improve
efficiency and our core funding with our larger operating platform
while we work to protect our margin in this changing rate
environment. We will continue to be receptive to acquisitions
with sound economics as we focus on operating efficiencies, credit
trends and growth within the constructs of our credit and pricing
philosophies.”
Mackinac Financial Corporation is a registered
bank holding company formed under the Bank Holding Company Act of
1956 with assets in excess of $1.3 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,”
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, 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 Corporation 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
SUBSIDIARIESSELECTED FINANCIAL
HIGHLIGHTS
| |
As of and For the |
|
As of and For the |
|
As of and For the |
|
| |
Period Ending |
|
Year Ending |
|
Period Ending |
|
| |
September 30, |
|
December 31, |
|
September 30, |
|
| (Dollars in
thousands, except per share data) |
2019 |
|
2018 |
|
2018 |
|
| |
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
| Selected
Financial Condition Data (at end of period): |
|
|
|
|
|
|
|
Assets |
$ |
1,355,383 |
|
$ |
1,318,040 |
|
$ |
1,254,335 |
|
| Loans |
|
1,059,942 |
|
|
1,038,864 |
|
|
993,808 |
|
| Investment
securities |
|
107,091 |
|
|
116,748 |
|
|
112,265 |
|
| Deposits |
|
1,113,579 |
|
|
1,097,537 |
|
|
1,028,058 |
|
| Borrowings |
|
70,079 |
|
|
60,441 |
|
|
58,216 |
|
| Shareholders'
equity |
|
160,165 |
|
|
152,069 |
|
|
149,367 |
|
| |
|
|
|
|
|
|
| Selected
Statements of Income Data (nine months and year
ended) |
|
|
|
|
|
|
| Net interest
income |
$ |
40,557 |
|
$ |
47,130 |
|
$ |
33,336 |
|
| Income before
taxes |
|
13,361 |
|
|
10,593 |
|
|
6,333 |
|
| Net income |
|
10,555 |
|
|
8,367 |
|
|
5,002 |
|
| Income per common
share - Basic |
.98 |
|
.94 |
|
.60 |
|
| Income per common
share - Diluted |
.98 |
|
.94 |
|
.60 |
|
| Weighted average
shares outstanding - Basic |
|
10,733,926 |
|
|
8,891,967 |
|
|
8,278,371 |
|
| Weighted average
shares outstanding- Diluted |
|
10,744,119 |
|
|
8,921,658 |
|
|
8,304,689 |
|
| |
|
|
|
|
|
|
| Three
Months Ended: |
|
|
|
|
|
|
| Net interest
income |
$ |
13,324 |
|
$ |
13,495 |
|
$ |
13,214 |
|
| Income before
taxes |
|
4,708 |
|
|
4,260 |
|
|
3,889 |
|
| Net income |
|
3,719 |
|
|
3,365 |
|
|
3,069 |
|
| Income per common
share - Basic |
.35 |
|
.31 |
|
.29 |
|
| Income per common
share - Diluted |
.35 |
|
.31 |
|
.29 |
|
| Weighted average
shares outstanding - Basic |
|
10,740,712 |
|
|
10,712,745 |
|
|
10,712,745 |
|
| Weighted average
shares outstanding- Diluted |
|
10,752,178 |
|
|
10,712,745 |
|
|
10,734,465 |
|
| |
|
|
|
|
|
|
| Selected
Financial Ratios and Other Data: |
|
|
|
|
|
|
|
Performance Ratios: |
|
|
|
|
|
|
| Net interest
margin |
|
4.61 |
% |
|
4.44 |
% |
|
4.37 |
% |
| Efficiency
ratio |
|
68.81 |
|
|
77.70 |
|
|
81.29 |
|
| Return on average
assets |
|
1.06 |
|
|
.71 |
|
|
.59 |
|
| Return on average
equity |
|
9.01 |
|
|
6.94 |
|
|
6.04 |
|
| |
|
|
|
|
|
|
| Average total
assets |
$ |
1,333,734 |
|
$ |
1,177,455 |
|
$ |
1,129,082 |
|
| Average total
shareholders' equity |
|
156,565 |
|
|
120,478 |
|
|
110,785 |
|
| Average loans to
average deposits ratio |
|
93.91 |
% |
|
97.75 |
% |
|
98.46 |
% |
| |
|
|
|
|
|
|
| Common
Share Data at end of period: |
|
|
|
|
|
|
| Market price per
common share |
$ |
15.46 |
|
$ |
13.65 |
|
$ |
16.20 |
|
| Book value per
common share |
|
14.91 |
|
|
14.20 |
|
|
13.94 |
|
| Tangible book
value per share |
|
12.60 |
|
|
11.61 |
|
|
11.63 |
|
| Dividends paid per
share, annualized |
.520 |
|
.480 |
|
.480 |
|
| Common shares
outstanding |
|
10,740,712 |
|
|
10,712,745 |
|
|
10,712,745 |
|
| |
|
|
|
|
|
|
| Other Data
at end of period: |
|
|
|
|
|
|
| Allowance for loan
losses |
$ |
5,308 |
|
$ |
5,183 |
|
$ |
5,186 |
|
| Non-performing
assets |
$ |
7,473 |
|
$ |
8,196 |
|
$ |
6,675 |
|
| Allowance for loan
losses to total loans |
.50 |
% |
.50 |
% |
.52 |
% |
| Non-performing
assets to total assets |
.55 |
% |
.62 |
% |
.53 |
% |
| Texas ratio |
|
5.31 |
% |
|
6.33 |
% |
|
5.14 |
% |
| |
|
|
|
|
|
|
| Number of: |
|
|
|
|
|
|
|
Branch locations |
|
29 |
|
|
29 |
|
|
30 |
|
|
FTE Employees |
|
301 |
|
|
288 |
|
|
288 |
|
| |
|
|
|
|
|
|
MACKINAC FINANCIAL CORPORATION AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS
(Dollars in thousands)
| |
September 30, |
|
December 31, |
|
September 30, |
| |
2019 |
|
2018 |
|
2018 |
| |
(Unaudited) |
|
|
|
|
(Unaudited) |
| ASSETS |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Cash and due from banks |
$ |
66,722 |
|
|
$ |
64,151 |
|
|
$ |
60,619 |
|
| Federal funds sold |
|
16,202 |
|
|
|
6 |
|
|
|
9 |
|
|
Cash and cash equivalents |
|
82,924 |
|
|
|
64,157 |
|
|
|
60,628 |
|
| |
|
|
|
|
|
|
|
|
| Interest-bearing deposits in
other financial institutions |
|
11,275 |
|
|
|
13,452 |
|
|
|
9,149 |
|
| Securities available for
sale |
|
107,091 |
|
|
|
116,748 |
|
|
|
112,265 |
|
| Federal Home Loan Bank
stock |
|
4,924 |
|
|
|
4,924 |
|
|
|
4,860 |
|
| |
|
|
|
|
|
|
|
|
| Loans: |
|
|
|
|
|
|
|
|
|
Commercial |
|
752,715 |
|
|
|
717,032 |
|
|
|
680,451 |
|
|
Mortgage |
|
287,013 |
|
|
|
301,461 |
|
|
|
295,010 |
|
|
Consumer |
|
20,214 |
|
|
|
20,371 |
|
|
|
18,347 |
|
|
Total Loans |
|
1,059,942 |
|
|
|
1,038,864 |
|
|
|
993,808 |
|
|
Allowance for loan losses |
|
(5,308 |
) |
|
|
(5,183 |
) |
|
|
(5,186 |
) |
|
Net loans |
|
1,054,634 |
|
|
|
1,033,681 |
|
|
|
988,622 |
|
| |
|
|
|
|
|
|
|
|
| Premises and equipment |
|
23,709 |
|
|
|
22,783 |
|
|
|
21,831 |
|
| Other real estate held for
sale |
|
2,618 |
|
|
|
3,119 |
|
|
|
2,149 |
|
| Deferred tax asset |
|
4,599 |
|
|
|
5,763 |
|
|
|
6,285 |
|
| Deposit based intangibles |
|
5,212 |
|
|
|
5,720 |
|
|
|
4,373 |
|
| Goodwill |
|
19,574 |
|
|
|
22,024 |
|
|
|
20,389 |
|
| Other assets |
|
38,823 |
|
|
|
25,669 |
|
|
|
23,784 |
|
| |
|
|
|
|
|
|
|
|
| TOTAL
ASSETS |
$ |
1,355,383 |
|
|
$ |
1,318,040 |
|
|
$ |
1,254,335 |
|
| |
|
|
|
|
|
|
|
|
| LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| LIABILITIES: |
|
|
|
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
Noninterest bearing deposits |
$ |
285,887 |
|
|
$ |
241,556 |
|
|
$ |
240,940 |
|
|
NOW, money market, interest checking |
|
375,267 |
|
|
|
368,890 |
|
|
|
341,651 |
|
|
Savings |
|
110,455 |
|
|
|
111,358 |
|
|
|
104,382 |
|
|
CDs<$250,000 |
|
250,506 |
|
|
|
225,236 |
|
|
|
199,015 |
|
|
CDs>$250,000 |
|
12,964 |
|
|
|
13,737 |
|
|
|
16,755 |
|
|
Brokered |
|
78,500 |
|
|
|
136,760 |
|
|
|
125,315 |
|
|
Total deposits |
|
1,113,579 |
|
|
|
1,097,537 |
|
|
|
1,028,058 |
|
| |
|
|
|
|
|
|
|
|
|
Federal funds purchased |
|
— |
|
|
|
2,905 |
|
|
|
11,000 |
|
|
Borrowings |
|
70,079 |
|
|
|
57,536 |
|
|
|
58,216 |
|
|
Other liabilities |
|
11,560 |
|
|
|
7,993 |
|
|
|
7,694 |
|
|
Total liabilities |
|
1,195,218 |
|
|
|
1,165,971 |
|
|
|
1,104,968 |
|
| |
|
|
|
|
|
|
|
|
| SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
|
Common stock and additional paid in capital - No par value
Authorized - 18,000,000 shares Issued and outstanding -
10,740,712; 10,712,745 and 10,712,745
respectively |
|
129,292 |
|
|
|
129,066 |
|
|
|
129,008 |
|
|
Retained earnings |
|
29,949 |
|
|
|
23,466 |
|
|
|
21,386 |
|
|
Accumulated other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
Unrealized (losses) gains on available for sale securities |
|
1,142 |
|
|
|
(245 |
) |
|
|
(806 |
) |
|
Minimum pension liability |
|
(218 |
) |
|
|
(218 |
) |
|
|
(221 |
) |
|
Total shareholders’ equity |
|
160,165 |
|
|
|
152,069 |
|
|
|
149,367 |
|
| |
|
|
|
|
|
|
|
|
| TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
$ |
1,355,383 |
|
|
$ |
1,318,040 |
|
|
$ |
1,254,335 |
|
| |
|
|
|
|
|
|
|
|
MACKINAC FINANCIAL CORPORATION AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS
(Dollars in thousands,
except per share data)
| |
|
Three Months Ended |
|
Nine Months Ended |
| |
|
September 30, |
|
September 30, |
| |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
| |
|
|
|
|
| |
|
(Unaudited) |
|
(Unaudited) |
| INTEREST
INCOME: |
|
|
|
|
|
|
|
|
|
Interest and fees on loans: |
|
|
|
|
|
|
|
|
|
Taxable |
|
$ |
14,829 |
|
|
$ |
14,097 |
|
$ |
45,010 |
|
$ |
36,558 |
|
Tax-exempt |
|
|
45 |
|
|
|
25 |
|
|
134 |
|
|
81 |
|
Interest on securities: |
|
|
|
|
|
|
|
|
|
Taxable |
|
|
675 |
|
|
|
723 |
|
|
2,058 |
|
|
1,655 |
|
Tax-exempt |
|
|
78 |
|
|
|
84 |
|
|
261 |
|
|
232 |
|
Other interest income |
|
|
403 |
|
|
|
362 |
|
|
1,155 |
|
|
758 |
|
Total interest income |
|
|
16,030 |
|
|
|
15,291 |
|
|
48,618 |
|
|
39,284 |
| |
|
|
|
|
|
|
|
|
| INTEREST
EXPENSE: |
|
|
|
|
|
|
|
|
|
Deposits |
|
|
2,464 |
|
|
|
1,698 |
|
|
7,333 |
|
|
4,536 |
|
Borrowings |
|
|
242 |
|
|
|
379 |
|
|
728 |
|
|
1,412 |
|
Total interest expense |
|
|
2,706 |
|
|
|
2,077 |
|
|
8,061 |
|
|
5,948 |
| |
|
|
|
|
|
|
|
|
| Net interest income |
|
|
13,324 |
|
|
|
13,214 |
|
|
40,557 |
|
|
33,336 |
| Provision for loan losses |
|
|
50 |
|
|
|
50 |
|
|
350 |
|
|
200 |
| Net interest income after
provision for loan losses |
|
|
13,274 |
|
|
|
13,164 |
|
|
40,207 |
|
|
33,136 |
| |
|
|
|
|
|
|
|
|
| OTHER
INCOME: |
|
|
|
|
|
|
|
|
|
Deposit service fees |
|
|
383 |
|
|
|
414 |
|
|
1,197 |
|
|
1,006 |
|
Income from loans sold on the secondary market |
|
|
586 |
|
|
|
423 |
|
|
1,253 |
|
|
877 |
|
SBA/USDA loan sale gains |
|
|
496 |
|
|
|
184 |
|
|
650 |
|
|
318 |
|
Mortgage servicing amortization |
|
|
238 |
|
|
|
110 |
|
|
486 |
|
|
123 |
|
Other |
|
|
175 |
|
|
|
212 |
|
|
519 |
|
|
496 |
|
Total other income |
|
|
1,878 |
|
|
|
1,343 |
|
|
4,105 |
|
|
2,820 |
| |
|
|
|
|
|
|
|
|
| OTHER
EXPENSE: |
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
5,669 |
|
|
|
5,600 |
|
|
16,615 |
|
|
14,627 |
|
Occupancy |
|
|
987 |
|
|
|
963 |
|
|
3,072 |
|
|
2,702 |
|
Furniture and equipment |
|
|
768 |
|
|
|
681 |
|
|
2,209 |
|
|
1,856 |
|
Data processing |
|
|
785 |
|
|
|
720 |
|
|
2,202 |
|
|
1,810 |
|
Advertising |
|
|
203 |
|
|
|
258 |
|
|
726 |
|
|
645 |
|
Professional service fees |
|
|
536 |
|
|
|
421 |
|
|
1,517 |
|
|
1,122 |
|
Loan origination expenses and deposit and card related fees |
|
|
314 |
|
|
|
242 |
|
|
677 |
|
|
516 |
|
Writedowns and losses on other real estate held for sale |
|
|
(24 |
) |
|
|
36 |
|
|
77 |
|
|
102 |
|
FDIC insurance assessment |
|
|
(141 |
) |
|
|
201 |
|
|
70 |
|
|
544 |
|
Communications expense |
|
|
221 |
|
|
|
171 |
|
|
681 |
|
|
478 |
|
Transaction related expenses |
|
|
- |
|
|
|
350 |
|
|
- |
|
|
2,463 |
|
Other |
|
|
1,126 |
|
|
|
975 |
|
|
3,105 |
|
|
2,758 |
|
Total other expenses |
|
|
10,444 |
|
|
|
10,618 |
|
|
30,951 |
|
|
29,623 |
| |
|
|
|
|
|
|
|
|
| Income before provision for
income taxes |
|
|
4,708 |
|
|
|
3,889 |
|
|
13,361 |
|
|
6,333 |
| Provision for income
taxes |
|
|
989 |
|
|
|
820 |
|
|
2,806 |
|
|
1,331 |
| |
|
|
|
|
|
|
|
|
| NET INCOME AVAILABLE
TO COMMON SHAREHOLDERS |
|
$ |
3,719 |
|
|
$ |
3,069 |
|
$ |
10,555 |
|
$ |
5,002 |
| |
|
|
|
|
|
|
|
|
| INCOME PER COMMON
SHARE: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
.35 |
|
|
$ |
.29 |
|
$ |
.98 |
|
$ |
.60 |
|
Diluted |
|
$ |
.35 |
|
|
$ |
.29 |
|
$ |
.98 |
|
$ |
.60 |
| |
|
|
|
|
|
|
|
|
MACKINAC FINANCIAL CORPORATION AND
SUBSIDIARIESLOAN PORTFOLIO AND CREDIT
QUALITY
(Dollars in thousands)
Loan Portfolio Balances (at end of period):
| |
September 30, |
|
December 31, |
|
September 30, |
| |
2019 |
|
2018 |
|
2018 |
| |
(Unaudited) |
|
|
|
(Unaudited) |
| Commercial
Loans: |
|
|
|
|
|
|
Real estate - operators of nonresidential buildings |
$ |
142,176 |
|
$ |
150,251 |
|
$ |
144,079 |
| Hospitality and tourism |
|
94,143 |
|
|
77,598 |
|
|
81,033 |
| Lessors of residential
buildings |
|
50,891 |
|
|
50,204 |
|
|
43,699 |
| Gasoline stations and
convenience stores |
|
24,917 |
|
|
24,189 |
|
|
21,156 |
| Logging |
|
22,725 |
|
|
20,860 |
|
|
20,758 |
| Commercial construction |
|
34,511 |
|
|
29,765 |
|
|
12,750 |
| Other |
|
383,352 |
|
|
364,165 |
|
|
356,976 |
|
Total Commercial Loans |
|
752,715 |
|
|
717,032 |
|
|
680,451 |
| |
|
|
|
|
|
| 1-4 family residential real
estate |
|
268,333 |
|
|
286,908 |
|
|
277,508 |
| Consumer |
|
20,214 |
|
|
20,371 |
|
|
18,347 |
| Consumer construction |
|
18,680 |
|
|
14,553 |
|
|
17,502 |
| |
|
|
|
|
|
|
Total Loans |
$ |
1,059,942 |
|
$ |
1,038,864 |
|
$ |
993,808 |
Credit Quality (at end of
period):
| |
September 30, |
|
December 31, |
|
September 30, |
|
| |
2019 |
|
2018 |
|
2018 |
|
| |
(Unaudited) |
|
|
|
(Unaudited) |
|
| Nonperforming Assets
: |
|
|
|
|
|
|
|
Nonaccrual loans |
$ |
4,844 |
|
$ |
5,054 |
|
$ |
4,526 |
|
| Loans past due 90 days or
more |
|
11 |
|
|
23 |
|
|
- |
|
| Restructured loans |
|
- |
|
|
- |
|
|
- |
|
|
Total nonperforming loans |
|
4,855 |
|
|
5,077 |
|
|
4,526 |
|
| Other real estate owned |
|
2,618 |
|
|
3,119 |
|
|
2,149 |
|
|
Total nonperforming assets |
$ |
7,473 |
|
$ |
8,196 |
|
$ |
6,675 |
|
| Nonperforming loans as a % of
loans |
.46 |
% |
.49 |
% |
.46 |
% |
| Nonperforming assets as a % of
assets |
.55 |
% |
.62 |
% |
.53 |
% |
| Reserve for Loan
Losses: |
|
|
|
|
|
|
| At period end |
$ |
5,308 |
|
$ |
5,183 |
|
$ |
5,186 |
|
| As a % of outstanding
loans |
.50 |
% |
.50 |
% |
.52 |
% |
| As a % of nonperforming
loans |
|
109.33 |
% |
|
102.09 |
% |
|
114.58 |
% |
| As a % of nonaccrual
loans |
|
109.58 |
% |
|
102.55 |
% |
|
114.58 |
% |
| Texas Ratio |
|
5.31 |
% |
|
6.33 |
% |
|
5.14 |
% |
| |
|
|
|
|
|
|
| Charge-off Information
(year to date): |
|
|
|
|
|
|
|
Average loans |
$ |
1,041,991 |
|
$ |
941,221 |
|
$ |
906,784 |
|
|
Net charge-offs (recoveries) |
$ |
225 |
|
$ |
396 |
|
$ |
93 |
|
|
Charge-offs as a % of average |
|
|
|
|
|
|
|
loans, annualized |
.03 |
% |
.04 |
% |
.01 |
% |
MACKINAC FINANCIAL
CORPORATION AND SUBSIDIARIESQUARTERLY FINANCIAL
HIGHLIGHTS
| |
QUARTER ENDED |
|
| |
(Unaudited) |
|
| |
September 30, |
|
June 30, |
|
March 31, |
|
December 31 |
|
September 30, |
|
| |
2019 |
|
2019 |
|
2019 |
|
2018 |
|
2018 |
|
| BALANCE SHEET (Dollars
in thousands) |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Total loans |
$ |
1,059,942 |
|
|
$ |
1,060,703 |
|
|
$ |
1,045,428 |
|
|
$ |
1,038,864 |
|
|
$ |
993,808 |
|
|
| Allowance for loan losses |
|
(5,308 |
) |
|
|
(5,306 |
) |
|
|
(5,154 |
) |
|
|
(5,183 |
) |
|
|
(5,186 |
) |
|
|
Total loans, net |
|
1,054,634 |
|
|
|
1,055,397 |
|
|
|
1,040,274 |
|
|
|
1,033,681 |
|
|
|
988,622 |
|
|
| Total assets |
|
1,355,383 |
|
|
|
1,330,723 |
|
|
|
1,316,996 |
|
|
|
1,318,040 |
|
|
|
1,254,335 |
|
|
| Core deposits |
|
1,022,115 |
|
|
|
989,116 |
|
|
|
965,359 |
|
|
|
947,040 |
|
|
|
885,988 |
|
|
| Noncore deposits |
|
91,464 |
|
|
|
125,737 |
|
|
|
131,889 |
|
|
|
150,497 |
|
|
|
142,070 |
|
|
|
Total deposits |
|
1,113,579 |
|
|
|
1,114,853 |
|
|
|
1,097,248 |
|
|
|
1,097,537 |
|
|
|
1,028,058 |
|
|
| Total borrowings |
|
70,079 |
|
|
|
46,232 |
|
|
|
53,678 |
|
|
|
60,441 |
|
|
|
69,216 |
|
|
| Total shareholders'
equity |
|
160,165 |
|
|
|
157,840 |
|
|
|
154,746 |
|
|
|
152,069 |
|
|
|
149,367 |
|
|
| Total tangible equity |
|
135,379 |
|
|
|
133,236 |
|
|
|
129,973 |
|
|
|
124,325 |
|
|
|
124,605 |
|
|
| Total shares outstanding |
|
10,740,712 |
|
|
|
10,740,712 |
|
|
|
10,740,712 |
|
|
|
10,712,745 |
|
|
|
10,712,745 |
|
|
| Weighted average shares
outstanding |
|
10,740,712 |
|
|
|
10,740,712 |
|
|
|
10,720,127 |
|
|
|
10,712,745 |
|
|
|
10,712,745 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| AVERAGE BALANCES
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Assets |
$ |
1,354,220 |
|
|
$ |
1,326,827 |
|
|
$ |
1,320,080 |
|
|
$ |
1,320,996 |
|
|
$ |
1,284,068 |
|
|
| Loans |
|
1,065,337 |
|
|
|
1,051,998 |
|
|
|
1,046,740 |
|
|
|
1,043,409 |
|
|
|
1,001,763 |
|
|
| Deposits |
|
1,124,433 |
|
|
|
1,103,413 |
|
|
|
1,099,644 |
|
|
|
1,087,174 |
|
|
|
1,042,004 |
|
|
| Equity |
|
159,453 |
|
|
|
156,491 |
|
|
|
153,689 |
|
|
|
149,241 |
|
|
|
149,202 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| INCOME STATEMENT
(Dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Net interest income |
$ |
13,324 |
|
|
$ |
13,997 |
|
|
$ |
13,236 |
|
|
$ |
13,795 |
|
|
$ |
13,214 |
|
|
| Provision for loan losses |
|
50 |
|
|
|
200 |
|
|
|
100 |
|
|
|
300 |
|
|
|
50 |
|
|
|
Net interest income after provision |
|
13,274 |
|
|
|
13,797 |
|
|
|
13,136 |
|
|
|
13,495 |
|
|
|
13,164 |
|
|
| Total noninterest income |
|
1,878 |
|
|
|
1,110 |
|
|
|
1,117 |
|
|
|
1,443 |
|
|
|
1,343 |
|
|
| Total noninterest expense |
|
10,444 |
|
|
|
10,263 |
|
|
|
10,244 |
|
|
|
10,678 |
|
|
|
10,618 |
|
|
| Income before taxes |
|
4,708 |
|
|
|
4,644 |
|
|
|
4,009 |
|
|
|
4,260 |
|
|
|
3,889 |
|
|
| Provision for income
taxes |
|
989 |
|
|
|
975 |
|
|
|
842 |
|
|
|
895 |
|
|
|
820 |
|
|
| Net income available to common
shareholders |
$ |
3,719 |
|
|
$ |
3,669 |
|
|
$ |
3,167 |
|
|
$ |
3,365 |
|
|
$ |
3,069 |
|
|
| Income pre-tax,
pre-provision |
$ |
4,758 |
|
|
$ |
4,844 |
|
|
$ |
4,109 |
|
|
$ |
4,560 |
|
|
$ |
3,939 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| PER SHARE
DATA |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Earnings per common share |
$ |
.35 |
|
|
$ |
.34 |
|
|
$ |
.30 |
|
|
$ |
.31 |
|
|
$ |
.29 |
|
|
| Book value per common
share |
|
14.91 |
|
|
|
14.70 |
|
|
|
14.41 |
|
|
|
14.20 |
|
|
|
13.94 |
|
|
| Tangible book value per
share |
|
12.60 |
|
|
|
12.40 |
|
|
|
12.10 |
|
|
|
11.61 |
|
|
|
11.63 |
|
|
| Market value, closing
price |
|
15.46 |
|
|
|
15.80 |
|
|
|
15.74 |
|
|
|
13.65 |
|
|
|
16.20 |
|
|
| Dividends per share |
|
.140 |
|
|
|
.120 |
|
|
|
.120 |
|
|
|
.120 |
|
|
|
.120 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| ASSET QUALITY
RATIOS |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Nonperforming loans/total
loans |
|
.46 |
|
% |
|
.44 |
|
% |
|
.53 |
|
% |
|
.49 |
|
% |
|
.46 |
|
% |
| Nonperforming assets/total
assets |
|
.55 |
|
|
|
.51 |
|
|
|
.57 |
|
|
|
.62 |
|
|
|
.53 |
|
|
| Allowance for loan
losses/total loans |
|
.50 |
|
|
|
.50 |
|
|
|
.49 |
|
|
|
.50 |
|
|
|
.52 |
|
|
| Allowance for loan
losses/nonperforming loans |
|
109.33 |
|
|
|
113.55 |
|
|
|
92.23 |
|
|
|
102.09 |
|
|
|
114.58 |
|
|
| Texas ratio |
|
5.31 |
|
|
|
4.91 |
|
|
|
5.59 |
|
|
|
6.33 |
|
|
|
5.14 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| PROFITABILITY
RATIOS |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Return on average assets |
|
1.09 |
|
% |
|
1.11 |
|
% |
|
.97 |
|
% |
|
1.01 |
|
% |
|
.95 |
|
% |
| Return on average equity |
|
9.25 |
|
|
|
9.40 |
|
|
|
8.36 |
|
|
|
8.95 |
|
|
|
8.16 |
|
|
| Net interest margin |
|
4.39 |
|
|
|
4.76 |
|
|
|
4.55 |
|
|
|
4.64 |
|
|
|
4.60 |
|
|
| Average loans/average
deposits |
|
94.74 |
|
|
|
95.34 |
|
|
|
95.10 |
|
|
|
95.97 |
|
|
|
96.14 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
| CAPITAL ADEQUACY
RATIOS |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Tier 1 leverage ratio |
|
9.81 |
|
% |
|
9.74 |
|
% |
|
9.54 |
|
% |
|
9.24 |
|
% |
|
9.51 |
|
% |
| Tier 1 capital to risk
weighted assets |
|
12.39 |
|
|
|
12.20 |
|
|
|
12.28 |
|
|
|
11.95 |
|
|
|
12.62 |
|
|
| Total capital to risk weighted
assets |
|
12.90 |
|
|
|
12.72 |
|
|
|
12.79 |
|
|
|
12.47 |
|
|
|
13.17 |
|
|
| Average equity/average assets
(for the quarter) |
|
11.77 |
|
|
|
11.80 |
|
|
|
11.64 |
|
|
|
11.30 |
|
|
|
11.62 |
|
|
| Tangible equity/tangible
assets (at quarter end) |
|
10.17 |
|
|
|
10.20 |
|
|
|
10.06 |
|
|
|
9.64 |
|
|
|
10.13 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
Contact:
Jesse A. Deering, EVP & Chief Financial Officer (248) 290-5906
/jdeering@bankmbank.comWebsite:
www.bankmbank.com
Grafico Azioni Mackinac Financial (NASDAQ:MFNC)
Storico
Da Gen 2025 a Feb 2025
Grafico Azioni Mackinac Financial (NASDAQ:MFNC)
Storico
Da Feb 2024 a Feb 2025
