Filed by Mackinac Financial Corporation

Pursuant to Rule 425 under the Securities Act of 1933

Commission File No.: 000-20167

 

Subject Company: First Federal of Northern Michigan Bancorp, Inc.

 

 

PRESS RELEASE

 

For Release:

 

May 3, 2018

Nasdaq:

 

MFNC

Contact:

 

Jesse A. Deering, (248) 290-5906 /jdeering@bankmbank.com

Website:

 

www.bankmbank.com

 

MACKINAC FINANCIAL CORPORATION REPORTS FIRST QUARTER 2018 RESULTS & ANNOUNCES EXPECTED FFNM TRANSACTION COMPLETION DATE

 

(Manistique, Michigan) — Mackinac Financial Corporation (Nasdaq: MFNC) (the “Corporation”), the bank holding company for mBank, today announced first quarter 2018 income of $1.54 million, or $.24 per share, compared to net income of $1.73 million, or $.28 per share, for the first quarter of 2017.  As expected, the 2018 first quarter results were impacted by expenses related to the acquisition of First Federal of Northern Michigan (FFNM) that was announced January 16, 2018.  In connection with the acquisition, the Corporation had GAAP pre-tax transaction related expenses totaling $189 thousand.  Additionally, the Corporation consolidated two southeast Michigan offices during the first quarter that will create long-term cost efficiencies but required a one-time pre-tax early lease termination expense of $64 thousand.   These one-time costs reduced the reported net income for the quarter by $200 thousand, on an after-tax basis.  The adjusted net income for the first quarter of 2018 (exclusive of the transaction related expenses and the lease termination expense) would equate to $1.74 million, or $.28 per share.

 

Total assets of the Corporation at March 31, 2018 were $983.93 million compared to $976.64 million at March 31, 2017.  Shareholders’ equity at March 31, 2018 totaled $81.86 million, compared to $80.01 million on March 31, 2017. The tangible book value per share equated to $11.73 on March 31, 2018 compared to $11.47 per share a year ago. Weighted average shares outstanding totaled 6,304,203 shares in the 2018 first quarter compared to 6,270,034 for the same period in 2017.

 

Subject to both MFNC and FFNM shareholder approvals, the company is expecting to close the transaction on May 18, 2018.  Special shareholder meetings of each company to facilitate the requisite votes are scheduled for May 10, 2018.  All required regulatory approvals have been attained.

 

mBank, the Corporation’s primary asset, recorded net income of $2.05 million in the first quarter of 2018, compared to $2.06 million, in 2017.  Combined acquisition-related and lease termination expenses totaled $99 thousand at the bank level, with an after-tax impact of $78 thousand. Adjusted core net income (exclusive of the expenses noted above) for first quarter 2018 was $2.13 million.

 

Revenue

 

Total revenue of the company for the first three months of 2018 equated to $11.67 million compared to $11.37 million for the same period of 2017. Total interest income was $11.06 million for the first quarter of 2018 and $10.60 for the same period in 2017.  The 2017 first quarter interest income included accretive yield of $175 thousand from the performing credit mark associated with the December 2014 Peninsula Bank (Pen) acquisition. The accretion from Pen was fully amortized as of December 2017 with no impact on first quarter 2018 interest income or net interest margin.  The non-interest income portion of total revenue decreased slightly year over year from $776 thousand in 2017 to $614 thousand in 2018.  The primary reason for this was a $121 thousand decrease in secondary market mortgage sale revenue from declining refinancing activities in light of higher interest rates.  However, premium gain per sale has improved year-over-year and purchased home transaction activity has been consistent with prior period results.

 



 

Loan Production / Credit Risk

 

Total balance sheet loans at March 31, 2018 were $812.44 million, a $25.90 million increase from March 31, 2017 balances of $786.55 million.  Total loans under management now reside at $1.05 billion which amount includes $236 million of service retained loans.  New loan production was consistent for the 2018 first quarter at $45 million.  Commercial originations accounted for $30 million, with retail, predominantly mortgage, equating to $15 million. Commenting on new loan production and overall lending activities, Kelly W. George, President and CEO of mBank stated, “Loan production remains consistent with prior year in terms of the normal seasonality of this quarter within our business model.  Outside of our secondary market mortgage activity that has slowed some, which was consistent with industry wide trends, we see good momentum in the loan pipelines for both consumer and commercial loans in all our regions as we move into the second quarter where we expect increased production levels. We are very excited about the new markets we are adding from FFNM and look forward to aggressively competing for good quality loans throughout their trade areas immediately after the transaction is complete.”

 

Nonperforming loans totaled $4.34 million, .53% of total loans at March 31, 2018 compared to $3.73 million, or .47%, of total loans at March 31, 2017.  Total loan delinquencies greater than 30 days resided at a nominal .69%, or $7.43 million at the end of the period, down from .79% in 2017. Commenting on overall credit risk, Mr. George stated, “Loan portfolio performance 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 first quarter of 2018 resided at $9.31 million, or 4.19%, compared to $9.17 million, or 4.19%, in the first quarter of 2017, which included the aforementioned Pen accretion.  First quarter 2018 total interest expense was $1.75 million versus $1.43 million for the same period of 2017.  Of the $316 thousand increase from previous year, $153 thousand was attributable to interest on brokered CDs due to repricing experienced from normal maturities and renewals at market rates.  An additional $101 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.

 

Mr. George stated, “We have been successful in maintaining our strong net interest margin in the rising rate environment where each rate increase should have positive impact on the income generated from our loan portfolio.  However, wholesale funding rates have risen more aggressively than what can be achieved on our loan base due to competitive reasons.  With the lower cost core deposit base we will be acquiring from FFNM, we expect to reposition the balance sheet and remove some of the more volatile and higher cost wholesale funding sources that we have been utilizing.  This should greatly stabilize our funding and position us very well on the liability side for 2018. We will also continue to proactively monitor, in all our markets, 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.”

 

Noninterest Expense

 

Noninterest expense, at $7.93 million in the first quarter of 2018, increased $751 thousand from the first quarter 2017 total of $7.18 million. The expense variance from the first quarter of 2017 was partially attributable to normal salary and wage increases and additional staffing.  A portion of the wage variance resulted from the Corporation opting to increase its minimum hourly wage for all entry level staff from $10.40 to $12.00 (as many companies did following tax reform in December 2017).  Furthermore, the aforementioned $253 thousand of pre-tax one-time expenses is a component of the year-over-year variation as are some indirect transaction expenses related to cyber and infrastructure changes in preparation for the larger operating platform following the FFNM acquisition.

 



 

Assets and Capital

 

Total assets of the Corporation at March 31, 2018 were $983.93 million compared to $976.64 million at March 31, 2017.  Shareholders’ equity at March 31, 2018 totaled $81.86 million, compared to $80.01 million on March 31, 2017. The tangible book value per share equated to $11.73 on March 31, 2018 compared to $11.47 per share a year ago.   The Corporation is “adequately-capitalized” and the Bank is “well-capitalized” with total risk-based capital to risk weighted assets of 9.43% and 11.73%, respectively.

 

Paul D. Tobias, Chairman and Chief Executive Officer of Mackinac concluded, “We remain very pleased with our overall performance and the progress we have made in the announcement, preparation and targeted close of the FFNM transaction.  We will remain focused on that integration, our normal operations and ensuring that we create the long-term value we seek to produce as a management team.  We will continue to evaluate potential acquisition partners opportunistically while organically growing assets and earnings. We are well positioned for continued value creation for our shareholders while maintaining our safe and sound risk profile.”

 

Mackinac Financial Corporation is a registered bank holding company formed under the Bank Holding Company Act of 1956 with assets in excess of $980 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 23 branch locations; eleven in the Upper Peninsula, four in the Northern Lower Peninsula, one in Oakland County, Michigan, and seven in Northern Wisconsin.  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,” “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

 

 

 

Quarter Ending

 

Year Ending

 

Quarter Ending

 

 

 

March 31,

 

December 31,

 

March 31,

 

(Dollars in thousands, except per share data)

 

2018

 

2017

 

2017

 

 

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

Selected Financial Condition Data (at end of period):

 

 

 

 

 

 

 

Assets

 

$

983,929

 

$

985,367

 

$

976,635

 

Loans

 

812,441

 

811,078

 

786,546

 

Investment securities

 

73,902

 

75,897

 

83,882

 

Deposits

 

806,797

 

817,998

 

821,820

 

Borrowings

 

80,002

 

79,552

 

66,279

 

Shareholders’ equity

 

81,857

 

81,400

 

80,009

 

 

 

 

 

 

 

 

 

Selected Statements of Income Data:

 

 

 

 

 

 

 

Net interest income

 

$

9,309

 

$

37,938

 

$

9,166

 

Income before taxes

 

1,945

 

1,108

 

2,615

 

Net income

 

1,537

 

5,479

 

1,726

 

Income per common share - Basic

 

.24

 

.87

 

.28

 

Income per common share - Diluted

 

.24

 

.87

 

.28

 

Weighted average shares outstanding

 

6,304,203

 

6,288,791

 

6,270,034

 

Weighted average shares outstanding- Diluted

 

6,330,210

 

6,322,413

 

6,271,904

 

 

 

 

 

 

 

 

 

Selected Financial Ratios and Other Data:

 

 

 

 

 

 

 

Performance Ratios:

 

 

 

 

 

 

 

Net interest margin

 

4.19

%

4.20

%

4.19

%

Efficiency ratio

 

79.25

 

71.39

 

71.65

 

Return on average assets

 

.63

 

.55

 

.71

 

Return on average equity

 

7.61

 

6.74

 

8.83

 

 

 

 

 

 

 

 

 

Average total assets

 

$

982,679

 

$

995,826

 

$

980,491

 

Average total shareholders’ equity

 

81,894

 

81,349

 

79,293

 

Average loans to average deposits ratio

 

100.70

%

96.29

%

94.81

%

 

 

 

 

 

 

 

 

Common Share Data at end of period:

 

 

 

 

 

 

 

Market price per common share

 

$

16.25

 

$

15.90

 

$

13.72

 

Book value per common share

 

12.96

 

12.93

 

12.71

 

Tangible book value per share

 

11.73

 

11.72

 

11.47

 

Dividends paid per share, annualized

 

.480

 

.480

 

.480

 

Common shares outstanding

 

6,332,560

 

6,294,930

 

6,294,930

 

 

 

 

 

 

 

 

 

Other Data at end of period:

 

 

 

 

 

 

 

Allowance for loan losses

 

$

5,101

 

$

5,079

 

$

5,146

 

Non-performing assets

 

$

6,868

 

$

6,126

 

$

8,196

 

Allowance for loan losses to total loans

 

.63

%

.63

%

.66

%

Non-performing assets to total assets

 

.70

%

.62

%

.84

%

Texas ratio

 

6.87

%

7.77

%

10.60

%

 

 

 

 

 

 

 

 

Number of:

 

 

 

 

 

 

 

Branch locations

 

23

 

23

 

23

 

FTE Employees

 

227

 

233

 

221

 

 



 

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

 

 

March 31,

 

December 31,

 

March 31,

 

 

 

2018

 

2017

 

2017

 

 

 

(Unaudited)

 

 

 

(Unaudited)

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

40,411

 

$

37,420

 

$

41,166

 

Federal funds sold

 

16

 

6

 

3

 

Cash and cash equivalents

 

40,427

 

37,426

 

41,169

 

 

 

 

 

 

 

 

 

Interest-bearing deposits in other financial institutions

 

11,391

 

13,374

 

13,448

 

Securities available for sale

 

73,902

 

75,897

 

83,882

 

Federal Home Loan Bank stock

 

3,112

 

3,112

 

2,719

 

 

 

 

 

 

 

 

 

Loans:

 

 

 

 

 

 

 

Commercial

 

579,718

 

572,936

 

552,483

 

Mortgage

 

215,804

 

220,708

 

215,042

 

Consumer

 

16,919

 

17,434

 

19,021

 

Total Loans

 

812,441

 

811,078

 

786,546

 

Allowance for loan losses

 

(5,101

)

(5,079

)

(5,146

)

Net loans

 

807,340

 

805,999

 

781,400

 

 

 

 

 

 

 

 

 

Premises and equipment

 

16,329

 

16,290

 

15,970

 

Other real estate held for sale

 

2,526

 

3,558

 

4,466

 

Deferred tax asset

 

4,674

 

4,970

 

7,651

 

Deposit based intangibles

 

1,860

 

1,922

 

2,110

 

Goodwill

 

5,694

 

5,694

 

5,694

 

Other assets

 

16,674

 

17,125

 

18,126

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

983,929

 

$

985,367

 

$

976,635

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

Noninterest bearing deposits

 

$

143,129

 

$

148,079

 

$

147,106

 

NOW, money market, interest checking

 

260,051

 

280,309

 

283,314

 

Savings

 

63,867

 

61,097

 

61,171

 

CDs<$250,000

 

135,554

 

142,159

 

141,569

 

CDs>$250,000

 

12,738

 

11,055

 

8,802

 

Brokered

 

191,458

 

175,299

 

179,858

 

Total deposits

 

806,797

 

817,998

 

821,820

 

 

 

 

 

 

 

 

 

Federal funds purchased

 

10,000

 

 

3,000

 

Borrowings

 

80,002

 

79,552

 

66,279

 

Other liabilities

 

5,273

 

6,417

 

5,527

 

Total liabilities

 

902,072

 

903,967

 

896,626

 

 

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY:

 

 

 

 

 

 

 

Common stock and additional paid in capital - No par value Authorized - 18,000,000 shares Issued and outstanding - 6,332,560 and 6,294,930 respectively

 

62,080

 

61,981

 

61,683

 

Retained earnings

 

20,493

 

19,711

 

18,176

 

Accumulated other comprehensive income (loss)

 

 

 

 

 

 

 

Unrealized (losses) gains on available for sale securities

 

(495

)

(71

)

228

 

Minimum pension liability

 

(221

)

(221

)

(78

)

Total shareholders’ equity

 

81,857

 

81,400

 

80,009

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

$

983,929

 

$

985,367

 

$

976,635

 

 



 

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

Three Months Ended
March 31,

 

 

 

 

 

 

2018

 

2017

 

 

 

(Unaudited)

 

INTEREST INCOME:

 

 

 

 

 

Interest and fees on loans:

 

 

 

 

 

Taxable

 

$

10,390

 

$

9,957

 

Tax-exempt

 

25

 

33

 

Interest on securities:

 

 

 

 

 

Taxable

 

372

 

399

 

Tax-exempt

 

69

 

79

 

Other interest income

 

199

 

128

 

Total interest income

 

11,055

 

10,596

 

 

 

 

 

 

 

INTEREST EXPENSE:

 

 

 

 

 

Deposits

 

1,236

 

959

 

Borrowings

 

510

 

471

 

Total interest expense

 

1,746

 

1,430

 

 

 

 

 

 

 

Net interest income

 

9,309

 

9,166

 

Provision for loan losses

 

50

 

150

 

Net interest income after provision for loan losses

 

9,259

 

9,016

 

 

 

 

 

 

 

OTHER INCOME:

 

 

 

 

 

Deposit service fees

 

269

 

272

 

Income from loans sold on the secondary market

 

177

 

298

 

SBA/USDA loan sale gains

 

51

 

60

 

Mortgage servicing amortization

 

(8

)

(8

)

Net security gains

 

 

 

Other

 

125

 

154

 

Total other income

 

614

 

776

 

 

 

 

 

 

 

OTHER EXPENSE:

 

 

 

 

 

Salaries and employee benefits

 

4,154

 

3,797

 

Occupancy

 

811

 

785

 

Furniture and equipment

 

531

 

481

 

Data processing

 

504

 

461

 

Advertising

 

195

 

123

 

Professional service fees

 

304

 

321

 

Loan origination expenses and deposit and card related fees

 

126

 

179

 

Writedowns and losses on other real estate held for sale

 

26

 

12

 

FDIC insurance assessment

 

156

 

157

 

Telephone

 

155

 

157

 

Transaction related expenses

 

189

 

 

Other

 

777

 

704

 

Total other expenses

 

7,928

 

7,177

 

 

 

 

 

 

 

Income before provision for income taxes

 

1,945

 

2,615

 

Provision for income taxes

 

408

 

889

 

 

 

 

 

 

 

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS

 

$

1,537

 

$

1,726

 

 

 

 

 

 

 

INCOME PER COMMON SHARE:

 

 

 

 

 

Basic

 

$

.24

 

$

.28

 

Diluted

 

$

.24

 

$

.28

 

 



 

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES

LOAN PORTFOLIO AND CREDIT QUALITY

 

(Dollars in thousands)

 

Loan Portfolio Balances (at end of period):

 

 

 

March 31,

 

December 31,

 

March 31,

 

 

 

2018

 

2017

 

2017

 

 

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

Commercial Loans:

 

 

 

 

 

 

 

Real estate - operators of nonresidential buildings

 

$

118,458

 

$

119,025

 

$

114,650

 

Hospitality and tourism

 

75,046

 

75,228

 

69,568

 

Lessors of residential buildings

 

33,127

 

33,032

 

30,118

 

Gasoline stations and convenience stores

 

21,771

 

21,176

 

20,187

 

Logging

 

16,628

 

17,554

 

16,096

 

Commercial construction

 

8,004

 

9,243

 

10,618

 

Other

 

306,684

 

297,678

 

291,246

 

Total Commercial Loans

 

579,718

 

572,936

 

552,483

 

 

 

 

 

 

 

 

 

1-4 family residential real estate

 

204,542

 

209,890

 

202,654

 

Consumer

 

16,919

 

17,434

 

19,021

 

Consumer construction

 

11,262

 

10,818

 

12,388

 

 

 

 

 

 

 

 

 

Total Loans

 

$

812,441

 

$

811,078

 

$

786,546

 

 

Credit Quality (at end of period):

 

 

 

March 31,

 

December 31,

 

March 31,

 

 

 

2018

 

2017

 

2017

 

 

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

Nonperforming Assets :

 

 

 

 

 

 

 

Nonaccrual loans

 

$

4,165

 

$

2,388

 

$

3,691

 

Loans past due 90 days or more

 

 

 

 

Restructured loans

 

177

 

180

 

39

 

Total nonperforming loans

 

4,342

 

2,568

 

3,730

 

Other real estate owned

 

2,526

 

3,558

 

4,466

 

Total nonperforming assets

 

$

6,868

 

$

6,126

 

$

8,196

 

Nonperforming loans as a % of loans

 

.53

%

.32

%

.47

%

Nonperforming assets as a % of assets

 

.70

%

.62

%

.84

%

Reserve for Loan Losses:

 

 

 

 

 

 

 

At period end

 

$

5,101

 

$

5,079

 

$

5,146

 

As a % of average loans

 

.63

%

.64

%

.65

%

As a % of nonperforming loans

 

117.48

%

197.78

%

137.96

%

As a % of nonaccrual loans

 

122.47

%

212.69

%

139.42

%

Texas Ratio

 

6.87

%

7.77

%

10.60

%

 

 

 

 

 

 

 

 

Charge-off Information (year to date):

 

 

 

 

 

 

 

Average loans

 

$

810,688

 

$

795,532

 

$

782,477

 

Net charge-offs (recoveries)

 

$

28

 

$

584

 

$

24

 

Charge-offs as a % of average loans, annualized

 

.01

%

.07

%

.01

%

 



 

MACKINAC FINANCIAL CORPORATION AND SUBSIDIARIES
QUARTERLY FINANCIAL HIGHLIGHTS

 

 

 

QUARTER ENDED

 

 

 

(Unaudited)

 

 

 

March 31,

 

December 31

 

September 30,

 

June 30

 

March 31

 

 

 

2018

 

2017

 

2017

 

2017

 

2017

 

BALANCE SHEET (Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans

 

$

812,441

 

$

811,078

 

$

808,149

 

$

790,753

 

$

786,546

 

Allowance for loan losses

 

(5,101

)

(5,079

)

(5,130

)

(5,133

)

(5,146

)

Total loans, net

 

807,340

 

805,999

 

803,019

 

785,620

 

781,400

 

Total assets

 

983,929

 

985,367

 

1,015,070

 

1,027,450

 

976,635

 

Core deposits

 

602,601

 

631,644

 

643,859

 

621,303

 

633,160

 

Noncore deposits

 

204,196

 

186,354

 

191,344

 

226,942

 

188,660

 

Total deposits

 

806,797

 

817,998

 

835,203

 

848,245

 

821,820

 

Total borrowings

 

80,002

 

79,552

 

91,397

 

92,024

 

66,279

 

Total shareholders’ equity

 

81,857

 

81,400

 

82,649

 

81,313

 

80,009

 

Total tangible equity

 

74,303

 

73,784

 

74,970

 

73,572

 

72,205

 

Total shares outstanding

 

6,332,560

 

6,294,930

 

6,294,930

 

6,294,930

 

6,294,930

 

Weighted average shares outstanding

 

6,304,203

 

6,294,930

 

6,294,930

 

6,294,930

 

6,270,034

 

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE BALANCES (Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

$

982,679

 

$

996,966

 

$

1,021,152

 

$

984,236

 

$

980,491

 

Loans

 

810,688

 

808,306

 

803,825

 

787,143

 

782,477

 

Deposits

 

805,092

 

817,338

 

841,699

 

820,375

 

825,309

 

Equity

 

81,894

 

82,879

 

82,162

 

81,013

 

79,293

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME STATEMENT (Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

9,309

 

$

9,664

 

$

9,789

 

$

9,319

 

$

9,166

 

Provision for loan losses

 

50

 

225

 

200

 

50

 

150

 

Net interest income after provision

 

9,259

 

9,439

 

9,589

 

9,269

 

9,016

 

Total noninterest income

 

614

 

1,317

 

1,153

 

795

 

776

 

Total noninterest expense

 

7,928

 

7,918

 

7,724

 

7,517

 

7,177

 

Income before taxes

 

1,945

 

2,838

 

3,018

 

2,547

 

2,615

 

Provision for income taxes

 

408

 

2,858

 

925

 

867

 

889

 

Net income available to common shareholders

 

$

1,537

 

$

(20

)

$

2,093

 

$

1,680

 

$

1,726

 

Income pre-tax, pre-provision

 

$

1,995

 

$

3,062

 

$

3,218

 

$

2,597

 

$

2,765

 

 

 

 

 

 

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings

 

$

.24

 

$

(.01

)

$

.33

 

$

.27

 

$

.28

 

Book value per common share

 

12.96

 

12.93

 

13.13

 

12.92

 

12.71

 

Tangible book value per share

 

11.73

 

11.72

 

11.91

 

11.69

 

11.47

 

Market value, closing price

 

16.25

 

15.90

 

15.50

 

13.99

 

13.72

 

Dividends per share

 

.120

 

.120

 

.120

 

.120

 

.120

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSET QUALITY RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans/total loans

 

.53

%

.32

%

.38

%

.47

%

.47

%

Nonperforming assets/total assets

 

.70

 

.62

 

.74

 

.76

 

.84

 

Allowance for loan losses/total loans

 

.63

 

.63

 

.63

 

.65

 

.65

 

Allowance for loan losses/nonperforming loans

 

117.48

 

197.78

 

167.37

 

136.95

 

137.96

 

Texas ratio

 

6.87

 

7.77

 

9.34

 

9.91

 

10.60

 

 

 

 

 

 

 

 

 

 

 

 

 

PROFITABILITY RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

 

.63

%

(.01

)%

.81

%

.68

%

.71

%

Return on average equity

 

7.61

 

(.10

)

10.11

 

8.32

 

8.83

 

Net interest margin

 

4.19

 

4.18

 

4.23

 

4.24

 

4.19

 

Average loans/average deposits

 

100.70

 

98.89

 

95.50

 

95.95

 

94.81

 

 

 

 

 

 

 

 

 

 

 

 

 

CAPITAL ADEQUACY RATIOS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 leverage ratio

 

7.25

%

7.06

%

6.82

%

7.02

%

6.77

%

Tier 1 capital to risk weighted assets

 

8.79

 

8.66

 

8.47

 

8.57

 

8.49

 

Total capital to risk weighted assets

 

9.43

 

9.29

 

9.10

 

9.21

 

9.15

 

Average equity/average assets (for the quarter)

 

8.33

 

8.31

 

8.05

 

8.23

 

8.09

 

Tangible equity/tangible assets (at quarter end)

 

7.62

 

7.55

 

7.44

 

7.22

 

7.45