Manistique, Michigan – Mackinac Financial Corporation (Nasdaq: MFNC) (the “Corporation”), the bank holding company for mBank, today announced third quarter 2016 net income of $1.778 million, or $.28 per share, compared to net income available to common shareholders of $1.018 million, or $.16 per share for the third quarter of 2015. In connection with the acquisitions of Niagara Bancorporation, Inc. (”Niagara”) and First National Bank of Eagle River (“Eagle River”), the Corporation had total GAAP pre-tax transaction related expenses for the third quarter of $.359 million that reduced net income by $.237 million or $.04 per share, on an after tax basis. The adjusted net income for the third quarter of 2016 (exclusive of all transaction related expenses) is $2.015 million, or $.32 per share.
Operating results for the first nine months of 2016, including transaction related expenses from both Niagara and Eagle River, totaled $2.785 million or $.45 per share compared to $4.003 million or $.64 per share for the same period in 2015. Year-to- date transaction related expenses, largely associated with the early termination of the Eagle River data processing system, totaled $2.928 million with an after-tax impact of $1.932 million on earnings equating to $.31 per share. Adjusted net income for the first nine months of 2016 for the Corporation is $4.718 million, or $.76 per share.
Total assets of the Corporation at September 30, 2016 were $959.121 million, compared to $754.972 million at September 30, 2015. Shareholders’ equity at September 30, 2016 totaled $78.285 million, compared to $76.091 million on September 30, 2015. The book value per share equated to $12.50 on September 30, 2016 compared to $12.18 per share a year ago. Quarter-end tangible book value was $11.23 per and share and market price was $11.49, or 102% of tangible book value. Weighted average shares outstanding totaled 6,226,371 for the first nine months of 2016 compared to 6,247,416 for the same period in 2015.
mBank, the Corporation’s subsidiary bank, recorded nine-month adjusted net income of $5.611 million compared to $5.003 million in 2015. Inclusive of $2.512 million of transaction related expenses at the bank ($1.658 million after tax), net income was $3.953 million for the first nine months of 2016.
Key highlights for the first nine months of 2016 results include:
- The 2016 acquisitions of Niagara and Eagle River added approximately $194 million in assets, $115 million in loan balances and $163 million in core deposits to the Corporation. Since September 30, 2014 (which is inclusive of the Peninsula Financial Corporation acquisition in December 2014 and organic growth) the company has grown assets approximately $345 million from $613.943 million to the current $959.121 million, an increase of 56%.
- Healthy new loan production of $206.8 million through September 2016 compared to $175.4 million through September 2015.
- Total interest income of $27.398 million through September 2016 compared to $25.117 million for the same period in 2015.
- Margin remains solid, at 4.21% through disciplined pricing of loan and deposit products. Net interest income increased from $21.755 million in 2015 to $23.980 million in 2016, a 10% increase.
- Credit quality remains strong with a Texas Ratio of 10.55% compared to 13.41% one year ago, and nonperforming assets of $7.938 million, or .83% of total assets, compared with $10.324 million, or 1.37 % of total assets, for the same period in 2015.
- Increased contribution from secondary mortgage market activity. Income from this source in the 2016 nine-month period totaled $1.118 million compared to $.750 million in the 2015 nine-month period.
- Gains on sold SBA (Small Business Administration) loan premiums through September 2016 was $.717 million compared to $.440 million for the same period of 2015.