New Threads Only:  Add to Google Reader or Homepage
New Threads & Replies:  Add to Google Reader or Homepage
Forums are for serious investors only. GuruFocus Forum Rules.

Forum List » Business News and Headlines
SEC Filings, Earing Reports, Press Releases
New Topic Search
Goto Thread: PreviousNext
Goto: Forum ListMessage ListNew TopicSearchLog In
First M & F Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 14, 2012 04:06PM

First M & F Corp. (FMFC) filed Quarterly Report for the period ended 2012-09-30. First M&f Corp has a market cap of $65.8 million; its shares were traded at around $7.64 with a P/E ratio of 15.9 and P/S ratio of 0.7. The dividend yield of First M&f Corp stocks is 0.6%.



Highlight of Business Operations:

Net income for the third quarter of 2012 was $1.794 million, or $0.14 basic and diluted earnings per share as compared to net income of $1.330 million, or $0.10 basic and diluted earnings per share for the same period in 2011 and net income of $1.753 million or $0.14 basic and diluted earnings per share for the second quarter of 2012. Net income for the first nine months of 2012 was $5.154 million or $0.40 basic and diluted earnings per share as compared to net income of $3.386 million or $0.23 basic and diluted earnings per share for the same period in 2011. The major factors contributing to the improvement in earnings for the third quarter of 2012 as compared to the third quarter of 2011 were (1) an increase of $833 thousand in mortgage revenues, (2) a $600 thousand decrease in the loan loss provisions and (3) a small decrease in noninterest expenses highlighted by a decrease of $557 thousand in salaries and employee benefits, a $307 thousand decrease in foreclosure expenses and a $212 thousand decrease in FDIC insurance. The major factors contributing to the improvement in earnings for the third quarter of 2012 as compared to the second quarter of 2012 were (1) a $300 thousand decrease in provision for loan loss expense and (2) a decrease of $220 thousand in FDIC insurance expense offset by (3) a $449 thousand decrease in mortgage revenues.

Noninterest income, excluding securities transactions, was $5.659 million for the third quarter of 2012 as compared to $4.959 million for the same period in 2011 and $6.038 million in the second quarter of 2012. For the third quarter of 2012 as compared to the third quarter of 2011: (1) deposit revenues decreased by $132 thousand, (2) mortgage banking revenues increased by $833 thousand and (3) agency commissions decreased by $9 thousand. For the third quarter of 2012 as compared to the second quarter of 2012: (1) deposit revenues increased by $41 thousand, (2) mortgage banking revenues decreased by $449 thousand and (3) agency commissions increased by $153 thousand.

The Company had sales and calls of $6.527 million of U.S. government-sponsored entity (GSE) securities for a net loss of $27 thousand during the third quarter of 2012. The Company also had sales and calls of $50 thousand of municipal securities for no gain or loss during the third quarter of 2012. The Company had sales and calls of $30.374 million of GSE securities for a net loss of $41 thousand during the first nine months of 2012. The Company also had sales and calls of $17.115 million of mortgage-backed securities for net gains of $595 thousand during the first nine months of 2012. The Company also had sales and calls of $1.334 million of municipal securities for net gains of $11 thousand during the first nine months of 2012. Most of the investment gains for 2012 were generated during the first quarter through sales of mortgage-backed securities and GSE securities. The gains were used to offset losses that were being taken on foreclosed properties. The Company had sales of $58.911 million of mortgage-backed and GSE securities for a net gain of $2.191 million during the first nine months of 2011. The Company also had $28.720 million of investment securities called for a net loss of $41 thousand during the first nine months of 2011. Sales of GSE and mortgage-backed securities during 2011 were generated to support earnings and preserve capital.

Deposits declined during the third quarter of 2012 primarily in certificates of deposit. The deposit declines were funded primarily from investment portfolio cash flows generated from mortgage-backed securities payments and proceeds from called securities. Loans held for investment grew during the third quarter with the largest contributors being residential loans which grew by $7.702 million and asset-based loans which grew by $5.747 million. Other real estate declined during the third quarter of 2012 as $3.335 million of properties were disposed of. The first nine months of 2012 were dominated by asset movement as increased investments were funded by cash flows from loan portfolio net decreases and a decrease in interest-bearing bank balances and Fed funds sold. Approximately $137.873 million of securities were purchased during the first nine months of 2012, 30.64% of which were U.S. government sponsored entity securities and 53.22% of which were mortgage-backed securities. Approximately 73% of the purchases were funded by security sales, calls, maturities and principal payments. The security purchases were prompted by the need to redeploy excess liquidity, so the investment portfolio was used to provide better yields than the short-term cash. Most loan categories declined during the first nine months of 2012 with construction loans, other commercial real estate loans and agricultural loans making up most of the decline from December 31, 2011. At September 30, 2012 real estate-secured loans made up 79.94% of loans held for investment as compared to 81.56% at September 30, 2011.

The primary challenge during 2012 and beyond will be the liquidation of foreclosed properties. The Company sold $3.340 million of foreclosed properties for $3.172 million during the third quarter of 2012. During the third quarter of 2011 $2.574 million of properties were sold for $2.218 million. During the second quarter of 2012 $4.787 million of properties were sold for $4.292 million. Over the past twelve months $13.659 million of properties have been sold for approximately 91.78% of their book value. As sales have outpaced foreclosure activity in 2012, the Company faces the challenge of selling the remaining properties, with the most difficult task being the disposition of construction and land development properties which makes up over 75% of the balance of other real estate owned.

Read the The complete Report



Stocks Discussed: FMFC,
Rate this post:




Sorry, only registered users may post in this forum.

Please Login if you have an account or Create a Free Account if you don't




Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial