Mackinac Financial Corporation Reports Results for the 2013 Third Quarter and Nine Month Periods

Marketwired

MANISTIQUE, MI--(Marketwired - Oct 30, 2013) - Mackinac Financial Corporation (NASDAQ: MFNC), the bank holding company for mBank (the "Bank"), today announced third quarter 2013 income of $.846 million or $.15 per share compared to net income available to common shareholders of $.897 million, or $.21 per share for the third quarter of 2012. Operating results for the first nine months of 2013 totaled $2.719 million or $.49 per share compared to $2.536 million or $.60 per share, excluding the $3.0 million deferred tax valuation adjustment, for the same period in 2012.

Weighted average shares totaled 5,559,108 shares for the nine month period in 2013 compared to 3,857,002 million in 2012 and 5,562,835 shares in the 2013 third quarter compared to 4,722,029 shares in 2012. The increase in outstanding shares for 2013 reflects the issuance of 2.138 million shares of common stock in August of 2012. Quarterly and nine month per share earnings for 2012 have been adjusted for the common stock issuance.

The Corporation's subsidiary, mBank, recorded net income of $3.820 million for the first nine months of this year compared to $3.577 million, excluding the deferred tax valuation adjustment, for the same period in 2012.

Total assets of the Corporation at September 30, 2013 were $567.917 million, up 3.05 % from the $551.117 million reported at September 30, 2012 and up 4.02% from the $545.980 million of total assets at year-end 2012. The Corporation and the Bank are both "well-capitalized" with Tier 1 Capital at the Corporation of 10.90% and 10.20% at the Bank.

Key highlights for the first nine months of 2013 results include:

  • Continued strong credit quality with a Texas Ratio of 9.56% with nominal nonperforming loans of $4.313 million, a $.977 million reduction from a year earlier.

  • Loan growth of $23.318 million, or 5.19% in the first nine months of 2013.

  • Stability and above peer average net interest margin at 4.15%.

  • Nine month secondary mortgage loan income of $.781 million.

  • Continued success in SBA/USDA lending with gains on the sale of these loans of $.798 million in the first nine months of 2013. The corporation continues to be a state leader within these various loan programs ranking 9th in terms of the number of SBA 7A loans originated, 30, and 13th based on total dollars equating to $9.553 million for the most recent SBA fiscal year end of September 30th, 2013.

  • Redemption, at par, of $7.0 million of the Corporation's $11.0 million Series A Preferred stock.

  • Mackinac Commercial Credit completed initial staffing and is processing asset based loan and factoring opportunities.

Loans and Nonperforming Assets

Total loans at September 30, 2013 were $472.495 million, an 8.88% increase from the $433.958 million at September 30, 2012 and up $23.318 million from year-end 2012 total loans of $449.177 million. In addition to the balance sheet totals, the company services $126 million of sold mortgage loans, up from $78 million at September 30, 2012. We also service another $71 million of sold SBA and USDA loans. Total loans under management now $670 million. The Corporation had total new loan production of $139 million in the first nine months of this year. Comprising the total production were $60 million in commercial loans, and $79 million in retail, $72 million of which were mortgages. The Upper Peninsula continues to drive a large majority of the new originations, totaling $97 million, with Northern Lower production of $34 million and Southeast Michigan with $8 million.

Commenting on new loan production, Kelly W. George, President and Chief Executive Officer of mBank stated, "We are seeing good loan opportunities in all of our markets but Southeast Michigan from a commercial lending growth standpoint has been stymied due to increased competition as more larger and non-traditional lenders turned to offense with rates and terms we were not comfortable entertaining for our balance sheet structure. We also remain cautiously optimistic with our mortgage lending activity as it continues to perform well given the recent volatility of rates we have experienced, with a good mix of home purchases and refinances. We are closely monitoring the mortgage markets as we look toward the future. Our commercial pipeline remains good throughout all our regions heading into the end of the year for both traditional and SBA/USDA guaranteed loans we expect to close."

Nonperforming loans totaled $4.313 million, .91% of total loans at September 30, 2013 compared to $5.290 million, or 1.22% of total loans at September 30, 2012 and down $.374 million from December 31, 2012. Nonperforming assets were reduced by $1.920 million from a year ago and stood at 1.21% of total assets. Total loan delinquencies resided at .36% or $4.313 million, almost solely made up of non-accrual commercial loans. George, commenting on overall credit quality, "We remain pleased with the overall credit performance metrics of our loan portfolio from both a micro perspective as noted above, as well as from a macro perspective with all industry segments performing satisfactory with a good diversification of loan types being originated. Our performance metrics have improved and our current level of nonperforming assets has resulted in lower costs, which we believe will continue. We will remain diligent in our timely monitoring on any problem loans that arise and will stay true to our core underwriting principles and will not stretch credit quality even with more banks lending and competition fierce for new loans to augment balance sheet growth."

Margin Analysis

Net interest income in the first nine months of 2013 increased to $15.773 million, or 4.15%, compared to $14.712 million, or 4.19%, in the same period in 2012. The increase in net interest income is due primarily to increased levels of earning assets. George, commenting on margin items stated, "We have managed our margin prudently in this continued low interest rate environment. We have used some extended term wholesale funding sources given the inability to get market clients to move into these longer terms liabilities to match fund longer term fixed rate loans as best we can to help mitigate longer term interest rate risk should rates move forward more quickly than market indicators foresee. We also continue to offer very competitive variable rate loans with interest rate floors to protect the margin in the near term, and balance the overall interest rate risk in the portfolio."

Deposits

Total deposits of $461.688 million at September 30, 2013 increased 5.08% from deposits of $439.363 million on September 30, 2012. Total deposits on September 30, 2013 were up $27.131 million from year-end 2012 deposits of $434.557 million. The overall increase in deposits for the nine months of 2013 is comprised of an increase in noncore deposits of $24.461 million and an increase in core deposits of $2.670 million. George, commenting on core deposits, stated, "Though not as robust as previous years with respect to our overall core deposit growth, we remain pleased that our overall net growth has been concentrated in transactional accounts even with reducing rates on these types of accounts and certificates as well, in order to enhance our net interest margin. We experienced some certificate withdrawals from primarily rate driven clients that has stunted overall core deposit growth. We continue to monitor our markets to remain competitive in pricing and to maintain our core deposit relationships with service and products to serve their needs. We also experienced some withdrawals by several of our larger commercial accounts as they have utilized their liquidity for business expansion opportunities and general debt pay downs given their limited investment options. We supplemented our deposit growth with manageable levels of noncore deposits to manage interest rate risk in this prolonged low interest rate cycle, and also aligns our funding costs with rates and maturities on loans as noted previously."

Noninterest Income

Noninterest income, at $2.747 million in the first nine months of 2013, decreased $.313 million from the same period in 2012 of $3.060 million. Levels of income from secondary market mortgage activities and gains from SBA/USDA loan sales were lower in 2013. Income from secondary mortgage activities totaled $.781 million in 2013 compared to $.844 million in 2012. SBA/USDA loan sale gains were behind 2012 with 2013 year to date gains of $.798 million compared to 2012 gains of $1.126 million.

Noninterest Expense

Noninterest expense, at $13.193 million in the first nine months of 2013, increased $.785 million, or 6.33% from the same period in 2012. A significant portion of this increase in expense, approximately $.300 million was due to the initial start-up and operational costs of our newly formed asset based lending subsidiary. We are also experiencing added costs given the growth of the company's operating platform and the need to keep pace both from a personnel, and infrastructure standpoint, with the changing internal risk profile of the company and external banking regulatory environment. Our overall non-interest expense base remains at, or below peer levels and we remain diligent in overseeing that the expense base is well controlled.

Capital

Total shareholders' equity at September 30, 2013 was $67.045 million, compared to $72.945 million on September 30, 2012, a decrease of $5.900 million, or 8.09%. Common shareholders' equity was $63.045 million, or $11.30 per share at September 30, 2013 compared to $61.945 million, or $11.14 per share at September 30, 2012 and $61.448 million, or $11.05 per share on December 31, 2012.

Paul D. Tobias, Chairman and Chief Executive Officer, concluded, "Our operating results reflect strong loan production and balance sheet growth, improved credit quality and a sustainable above average interest margin. We recognize the challenges to improving our operating results, but are confident that current momentum, the strength of our balance sheet and access to capital will help us improve our returns on equity.

"Looking forward, we believe that as the economy continues to improve, opportunities for franchise expansion will present themselves. We retired $7 million of our preferred stock and intend to retire the remaining $4.0 million balance prior to 2013 year-end. After the preferred redemption our capital will still exceed regulatory 'well-capitalized' ratios. With our strong capital base and improving core earnings generation, coupled with our stable and experienced management team, we stand ready to create shareholder value through either organic growth or acquisition."

Mackinac Financial Corporation is a registered bank holding company formed under the Bank Holding Company Act of 1956 with assets in excess of $550 million 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 11 branch locations; seven in the Upper Peninsula, three in the Northern Lower Peninsula and one in Oakland County, Michigan. The Company'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, 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
                   
                   

(Dollars in thousands, except per share data)
  September 30,
2013
    December 31,
2012
    September 30,
2012
 
    (Unaudited)           (Unaudited)  
Selected Financial Condition Data (at end of period):                  
Assets   $ 567,917     $ 545,980     $ 551,117  
Loans     472,495       449,177       433,958  
Investment securities     48,096       43,799       42,476  
Deposits     461,688       434,557       439,363  
Borrowings     35,852       35,925       35,925  
Common Shareholders' Equity     63,045       61,448       61,945  
Shareholders' equity     67,045       72,448       72,945  
                         
                         
Selected Statements of Income Data (nine months and year ended):                        
Net interest income   $ 15,773     $ 19,824     $ 14,712  
Income before taxes and preferred dividend     4,477       6,165       4,569  
Net income     2,719       6,458       5,536  
Income per common share - Basic*     .49       1.51       1.30  
Income per common share - Diluted*     .49       1.51       1.25  
Weighted average shares outstanding     5,559,108       4,285,043       3,857,002  
Weighted average shares outstanding- Diluted     5,559,108       4,285,043       3,976,852  
                         
Three Months Ended:                        
Net interest income   $ 5,348     $ 5,112     $ 4,930  
Income before taxes and preferred dividend     1,352       1,596       1,562  
Net income     846       922       897  
Income per common share - Basic     .15       .21       .21  
Income per common share - Diluted*     .15       .21       .20  
Weighted average shares outstanding*     5,562,835       5,559,859       4,722,029  
Weighted average shares outstanding- Diluted     5,562,835       5,559,859       4,858,215  
                         
Selected Financial Ratios and Other Data:                        
Performance Ratios:                        
Net interest margin     4.15 %     4.17 %     4.19 %
Efficiency ratio     70.36       67.95       67.07  
Return on average assets     .66       1.23       1.42  
Return on average common equity     5.89       12.43       15.21  
Return on average equity     5.30       10.26       12.41  
                         
Average total assets   $ 550,013     $ 526,740     $ 520,387  
Average common shareholders' equity     61,776       51,978       48,604  
Average total shareholders' equity     68,599       62,939       59,582  
Average loans to average deposits ratio     103.40 %     99.45 %     98.90 %
                         
                         
Common Share Data at end of period:                        
Market price per common share   $ 9.10     $ 7.09     $ 7.60  
Book value per common share   $ 11.30     $ 11.05     $ 11.14  
Common shares outstanding     5,581,339       5,559,859       5,559,914  
                         
Other Data at end of period:                        
Allowance for loan losses   $ 4,959     $ 5,218     $ 5,186  
Non-performing assets   $ 6,881     $ 7,899     $ 8,801  
Allowance for loan losses to total loans     1.05 %     1.16 %     1.20 %
Non-performing assets to total assets     1.21 %     1.45 %     1.60 %
Texas ratio     9.56 %     10.17 %     11.26 %
                         
Number of:                        
  Branch locations     11       11       11  
  FTE Employees     128       121       121  
 
*Earnings per share data for 2012 restated for common stock issuance
 
 
 
          MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
          CONSOLIDATED BALANCE SHEETS
                   
                   
 
 
  September 30,
2013
 
 
  December 31,
2012
 
 
  September 30,
2012
 
 
    (Unaudited)           (Unaudited)  
ASSETS                  
                   
Cash and due from banks   $ 22,791     $ 26,958     $ 31,403  
Federal funds sold     3       3       16,002  
  Cash and cash equivalents     22,794       26,961       47,405  
                         
Interest-bearing deposits in other financial institutions     10       10       10  
Securities available for sale     48,096       43,799       42,476  
Federal Home Loan Bank stock     3,060       3,060       3,060  
                         
Loans:                        
  Commercial     353,526       342,841       329,891  
  Mortgage     104,504       95,413       93,446  
  Consumer     14,465       10,923       10,621  
    Total Loans     472,495       449,177       433,958  
      Allowance for loan losses     (4,959 )     (5,218 )     (5,186 )
  Net loans     467,536       443,959       428,772  
                         
Premises and equipment     10,484       10,633       10,744  
Other real estate held for sale     2,568       3,212       3,511  
Deferred Tax Asset     7,953       9,131       9,670  
Other assets     5,416       5,215       5,469  
                         
TOTAL ASSETS   $ 567,917     $ 545,980     $ 551,117  
                         
LIABILITIES AND SHAREHOLDERS' EQUITY                        
                         
LIABILITIES:                        
Deposits:                        
  Noninterest bearing deposits   $ 70,063     $ 67,652     $ 62,306  
  NOW, money market, interest checking     158,588       155,465       152,286  
  Savings     12,694       13,829       15,783  
  CDs     133,821       135,550       142,125  
  CDs > $100,000     23,816       24,355       25,390  
  Brokered     62,706       37,706       41,473  
      Total deposits     461,688       434,557       439,363  
                           
  Borrowings     35,852       35,925       35,925  
  Other liabilities     3,332       3,050       2,884  
      Total liabilities     500,872       473,532       478,172  
                         
SHAREHOLDERS' EQUITY:                        
  Preferred stock - No par value:                        
    Authorized - 500,000 shares     4,000       11,000       11,000  
    Issued and outstanding - 4,000, 11,000 and 11,000 respectively                        
  Common stock and additional paid in capital - No par value                        
    Authorized - 18,000,000 shares                        
    Issued and outstanding - 5,581,339, 5,559,859 and 5,559,914 respectively     53,915       53,797       55,047  
    Retained earnings     8,780       6,727       6,028  
    Accumulated other comprehensive income     350       924       870  
                           
      Total shareholders' equity     67,045       72,448       72,945  
                         
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 567,917     $ 545,980     $ 551,117  
                         
                         
 
      MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
      CONSOLIDATED STATEMENTS OF OPERATIONS
           
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
 
    2013   2012   2013   2012  
    (Unaudited)   (Unaudited)  
INTEREST INCOME:                  
  Interest and fees on loans:                  
    Taxable   $ 6,077   $ 5,803   $ 17,980   $ 17,256  
    Tax-exempt     26     28     81     90  
  Interest on securities:                          
    Taxable     245     226     726     728  
    Tax-exempt     9     6     22     20  
  Other interest income     33     41     96     96  
    Total interest income     6,390     6,104     18,905     18,190  
                           
INTEREST EXPENSE:                          
  Deposits     879     1,011     2,642     2,986  
  Borrowings     163     163     490     492  
    Total interest expense     1,042     1,174     3,132     3,478  
                           
Net interest income     5,348     4,930     15,773     14,712  
Provision for loan losses     375     150     850     795  
Net interest income after provision for loan losses     4,973     4,780     14,923     13,917  
                           
OTHER INCOME:                          
  Deposit service fees     158     155     495     538  
  Income from secondary market loans sold     203     320     781     844  
  SBA/USDA loan sale gains     135     506     798     1,126  
  Mortgage servicing income     128     92     413     292  
  Other     114     76     260     260  
    Total other income     738     1,149     2,747     3,060  
                           
OTHER EXPENSE:                          
  Salaries and employee benefits     2,226     2,063     6,907     6,041  
  Occupancy     362     370     1,107     1,050  
  Furniture and equipment     274     213     799     660  
  Data processing     269     253     802     739  
  Professional service fees     161     210     706     700  
  Loan and deposit     55     195     173     674  
  Writedowns and losses on other real estate held for sale     57     265     146     450  
  FDIC insurance assessment     100     36     300     354  
  Telephone     84     56     229     168  
  Advertising     119     96     334     292  
  Other     652     610     1,690     1,280  
    Total other expenses     4,359     4,367     13,193     12,408  
                           
Income before provision for income taxes     1,352     1,562     4,477     4,569  
Provision for (benefit of) income taxes     456     528     1,508     (1,458 )
                           
NET INCOME     896     1,034     2,969     6,027  
                           
Preferred dividend and accretion of discount     50     137     250     491  
                           
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS   $ 846   $ 897   $ 2,719   $ 5,536  
                           
INCOME PER COMMON SHARE*:                          
  Basic   $ .15   $ .21   $ .49   $ 1.30  
  Diluted   $ .15   $ .20   $ .49   $ 1.25  
                             
 
*Earnings per share data for 2012 restated for common stock issuance
 
 
 
 MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
 LOAN PORTFOLIO AND CREDIT QUALITY
 
(Dollars in thousands)
 
Loan Portfolio Balances (at end of period):
 
    September 30,
2013
  December 31,
2012
  September 30,
2012
    (Unaudited)   (Unaudited)   (Unaudited)
Commercial Loans:            
Real estate - operators of nonresidential buildings   $ 101,406   $ 95,151   $ 88,505
Hospitality and tourism     41,473     40,787     36,950
Lessors of residential buildings     14,573     12,672     12,326
Real estate agents and managers     10,975     10,597     12,336
Gasoline stations and convenience stores     10,897     11,393     12,394
Other     158,148     155,012     145,623
  Total Commercial Loans     337,472     325,612     308,134
                   
1-4 family residential real estate     98,770     87,948     86,643
Consumer     14,465     10,923     10,621
Construction                  
  Commercial     16,054     17,229     21,757
  Consumer     5,734     7,465     6,803
                   
  Total Loans   $ 472,495   $ 449,177   $ 433,958
                   
                   
 
 
Credit Quality (at end of period):
                   
    September 30,
2013
    December 31,
2012
    September 30,
2012
 
    (Unaudited)     (Unaudited)     (Unaudited)  
Nonperforming Assets :                  
Nonaccrual loans   $ 4,313     $ 4,687     $ 3,122  
Loans past due 90 days or more     -       -       -  
Restructured loans     -       -       2,168  
  Total nonperforming loans     4,313       4,687       5,290  
Other real estate owned     2,568       3,212       3,511  
  Total nonperforming assets   $ 6,881     $ 7,899     $ 8,801  
Nonperforming loans as a % of loans     .91 %     1.04 %     1.22 %
Nonperforming assets as a % of assets     1.21 %     1.45 %     1.60 %
Reserve for Loan Losses:                        
At period end   $ 4,959     $ 5,218     $ 5,186  
As a % of average loans     1.09 %     1.24 %     1.24 %
As a % of nonperforming loans     114.98 %     111.33 %     98.03 %
As a % of nonaccrual loans     114.98 %     111.33 %     166.11 %
Texas Ratio     9.56 %     10.17 %     11.26 %
                         
Charge-off Information (year to date):                        
  Average loans   $ 456,831     $ 422,440     $ 417,159  
  Net charge-offs   $ 1,110     $ 978     $ 860  
  Charge-offs as a % of average loans     .32 %     .23 %     .28 %
                         
                         
 
                MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
                QUARTERLY FINANCIAL HIGHLIGHTS
                               
    QUARTER ENDED
    (Unaudited)
    September 30,
2013
    June 30,
2013
    March 31,
2013
    December 31,
2012
    September 30,
2012
 
BALANCE SHEET (Dollars in thousands)                              
                               
Total loans   $ 472,495     $ 455,555     $ 454,051     $ 449,177     $ 433,958  
Allowance for loan losses     (4,959 )     (5,177 )     (5,037 )     (5,218 )     (5,186 )
  Total loans, net     467,536       450,378       449,014       443,959       428,772  
Total assets     567,917       553,501       541,896       545,980       551,117  
Core deposits     375,166       357,935       362,911       372,496       372,500  
Noncore deposits (1)     86,522       89,972       62,325       62,061       66,863  
  Total deposits     461,688       447,907       425,236       434,557       439,363  
Total borrowings     35,852       35,925       40,925       35,925       35,925  
Common shareholders' equity     63,045       62,520       62,039       61,448       61,945  
Total shareholders' equity     67,045       66,520       73,039       72,448       72,945  
Total shares outstanding     5,581,339       5,554,459       5,557,859       5,559,859       5,559,859  
Weighted average shares outstanding     5,562,835       5,556,133       5,559,859       5,559,859       4,722,029  
                                         
AVERAGE BALANCES (Dollars in thousands)                                        
                                         
Assets   $ 560,089     $ 548,455     $ 541,279     $ 545,661     $ 545,788  
Loans     464,324       456,937       449,065       438,168       424,461  
Deposits     456,191       439,780       429,174       433,573       439,327  
Common Equity     62,134       62,483       61,238       61,936       56,327  
Equity     66,134       67,483       72,238       72,936       67,327  
                                         
INCOME STATEMENT (Dollars in thousands)                                        
                                         
Net interest income   $ 5,348     $ 5,269     $ 5,156     $ 5,112     $ 4,930  
Provision for loan losses     375       100       375       150       150  
  Net interest income after provision     4,973       5,169       4,781       4,962       4,780  
Total noninterest income     738       1,251       758       983       1,149  
Total noninterest expense     4,359       4,523       4,311       4,349       4,367  
Income before taxes     1,352       1,897       1,228       1,596       1,562  
Provision for income taxes     456       637       415       536       528  
  Net income     896       1,260       813       1,060       1,034  
Preferred dividend expense     50       63       137       138       137  
Net income available to common shareholders   $ 846     $ 1,197     $ 676     $ 922     $ 897  
                                         
PER SHARE DATA                                        
                                         
Earnings   $ .15     $ .22     $ .12     $ .21     $ .21  
Book value per common share     11.30       11.26       11.16       11.05       11.14  
Market value, closing price     9.10       8.88       9.21       7.09       7.60  
                                         
ASSET QUALITY RATIOS                                        
                                         
Nonperforming loans/total loans     .91 %     .87 %     .84 %     1.04 %     1.22 %
Nonperforming assets/total assets     1.21       1.17       1.41       1.45       1.60  
Allowance for loan losses/total loans     1.09       1.14       1.11       1.16       1.20  
Allowance for loan losses/nonperforming loans     114.98       129.98       131.41       111.33       96.99  
Texas ratio (2)     9.56       9.02       9.81       10.17       11.26  
                                         
PROFITABILITY RATIOS                                        
                                         
Return on average assets     .60 %     .88 %     .51 %     .67 %     .65 %
Return on average common equity     5.40       7.69       4.47       5.93       6.33  
Return on average equity     5.08       7.12       3.79       5.03       5.29  
Net interest margin     4.12       4.16       4.18       4.11       4.10  
Efficiency ratio     70.64       68.02       72.65       70.52       67.29  
Average loans/average deposits     101.78       103.90       104.63       99.45       96.62  
                                         
CAPITAL ADEQUACY RATIOS                                        
                                         
Tier 1 leverage ratio     10.90 %     11.01 %     12.23 %     11.98 %     10.16 %
Tier 1 capital to risk weighted assets     12.45       12.74       13.98       13.81       12.87  
Total capital to risk weighted assets     13.47       13.85       15.06       14.93       14.12  
Average equity/average assets (for the quarter)     11.81       12.30       13.35       13.37       12.34  
Tangible equity/tangible assets (at quarter end)     11.81       12.02       13.48       13.27       13.24  
                                         
 
(1) Noncore deposits includes Internet CDs, brokered deposits and CDs greater than $100,000
(2)Texas ratio equals nonperforming assets divided by shareholders' equity plus allowance for loan losses
 
 
Contact:

Ernie R. Krueger
(906) 341-7158
Email Contact
Website: www.bankmbank.com

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