Manistique, Michigan – Mackinac Financial Corporation (Nasdaq: MFNC) (the “Corporation”), the bank holding company for mBank, today announced 2015 net income of $5.596 million, or $.90 per share, compared to net income $1.700 million, or $.30 per share in 2014. The 2015 results include one-time charges related to (i) the transfer of our asset based lending subsidiary assets to mBank, which charges included unamortized debt issue and dissolution costs of the subsidiary, and (ii) regulatory audit costs incurred in connection with our approval as an SBA preferred lender, along with a deferred tax valuation adjustment of $.322 million. The net positive impact of these items was approximately $.02 per share.
In 2014, the Corporation had nonrecurring transaction related expenses totaling $2.475 million. These “one-time” costs reduced the reported net income in 2014 by $1.810 million, or $.32 per share, on an after tax basis. The adjusted net income for 2014 (not inclusive of the nonrecurring transaction related expenses) would equate to $3.510 million, or $.62 per share.
Shareholders’ equity at December 31, 2015 totaled $76.602 million, compared to $73.996 million on December 31, 2014. The book value per share equated to $12.32 on December 31, 2015 compared to $11.81 per share a year ago. Weighted average shares outstanding totaled 6,247,416 in 2015 compared to 5,592,738 in 2014.
Key highlights for the 2015 results include:
mBank, the Corporation’s primary asset, recorded net income of $6.940 million in 2015, compared to $4.856 million, as adjusted for nonrecurring transaction related expenses, in 2014, a 43% increase following the seamless integration of Peninsula Bank.
The Corporation recorded “pre-tax, pre-provision” income of $9.133 million in 2015, compared to $6.504 million, as adjusted for nonrecurring transaction related expenses, for the same period in 2014, an increase of 25%.
Nonperforming asset reduction of $1.546 million, or 22.25%, from 2014 year-end. Nonperforming assets equate to a nominal .73% of total assets for 2015 and a Texas Ratio of 7.04%. Year-end nonperforming assets represent a reduction of $4.949 million from September 30, 2015.
Strong net interest margin, which improved to 4.30% compared to 4.19% in 2014. The margin was positively affected by the accretive impact of the “marks” to Peninsula acquired loans by approximately 19 basis points.
Increased contribution from secondary mortgage market activity. Income from this source in 2015 totaled $1.071 million compared to $.637 million in 2014.
The recently announced agreement to acquire First National Bank of Eagle River, a Wisconsin community bank with $140 million of assets as of December 31, 2015, for $12.5 million in cash. The acquisition is expected to be consummated in the second quarter of 2016, and should provide further earnings accretion.
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