Mackinac Financial Corporation Reports 2019 First Quarter Results

Manistique, Michigan – Mackinac Financial Corporation (Nasdaq: MFNC) (the “Corporation”), the bank holding company for mBank, today announced 2019 first quarter net income of $3.17 million, or $.30 per share, compared to 2018 first quarter net income of $1.54 million, or $.24 per share. The 2018 first quarter results included expenses related to the acquisition of First Federal of Northern Michigan (“FFNM”), which had an after-tax impact of $200 thousand on earnings. Adjusted net income (net of transaction related and other one-time expenses) for the first quarter of 2018 was $1.74 million or $.28 per share. First quarter 2019 net income compared to 2018 adjusted net income increased by $1.43 million, or 82%.

Weighted average shares outstanding for the first quarter 2019 were 10,720,127 compared to 6,304,203 for the same period of 2018. The Corporation issued 2,146,378 new shares for the FFNM purchase in May 2018 and issued an additional 2,225,807 shares related to the common stock offering completed in June 2018.

Total assets of the Corporation at March 31, 2019 were $1.32 billion, compared to $983.93 million at March 31, 2018. Shareholders’ equity at March 31, 2019 totaled $154.75 million, compared to $81.86 million at March 31, 2018. Book value per share outstanding equated to $14.41 at the end of the first quarter 2019 compared to $12.93 per share outstanding a year ago. Tangible book value at quarter-end was $129.97 million or $12.10 per share outstanding compared to $74.30 million or $11.73 per share at the end of the first quarter 2018.

Additional notes:

  • mBank, the Corporation’s primary asset, recorded net income of $3.46 million for the first quarter of 2019, compared to $2.05 million for the same period of 2018, equating to an increase of $1.41 million or 69%. The increase in net income equated to an improvement in Return on Average Assets at the bank from .85% in first quarter 2018 to 1.06% in the first quarter of 2019.
  • Reliance on higher-cost brokered deposits continues to decrease significantly from $191.46, million or 23.73% of total deposits at the end of the first quarter 2018, to $136.76 million, or 12.46% of total deposits at year-end 2018 to a first quarter 2019 balance of $119.18, million or 10.86% of total deposits.
  • Total core bank deposits increased $17.29 million in the first quarter of 2019 through more proactive sales activity in the treasury management line of business and increased marketing efforts in key retail markets.
  • New loan production of $81.4 million in the first quarter of 2019, compared to $44.9 million in 2018 first quarter.
  • First quarter 2019 net interest margin remains strong at 4.55%. Core operating margin, which is net of accretion from acquired loans that were subject to purchase accounting adjustments, was 4.37%.
  • mBank was awarded the 2018 Diversity Community Lender of the Year award from the U.S. Small Business Administration of Michigan for its continued work and commitment to using government sponsored loan programs to provide funding to local businesses and provide the capital they need to grow and strengthen communities. mBank was selected based on superior support provided to advance diverse participation among small businesses from historically underrepresented groups including minorities, women, and veterans. Community activities were also considered in the selection process.
 
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