Firstbank Corp. Reports Operating Results (10-Q)
Firstbank Corp. has a market cap of $35.9 million; its shares were traded at around $4.63 with a P/E ratio of 35.6 and P/S ratio of 0.4. The dividend yield of Firstbank Corp. stocks is 0.9%.FBMI is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:Total deposits increased $13.2 million, or 1.1% when compared with year end 2009 balances. Within the deposit base, interest bearing demand account balances increased $6.5 million, or 2.5%, savings balances increased $23.1 million, or 13.3%, and time balances decreased $16.5 million, or 3.0%. Within time balances, wholesale CDs were $6.3 million lower than year end, while core market CDs was down $10.2 million. Given our current low levels of loan demand, wholesale CDs were allowed to mature without replacement. Non-interest bearing demand account balances were basically unchanged from year end.
Total shareholders equity increased $1.3 million from year end. Net income of $1,596,000 and common stock issuances of $253,000 increased shareholders equity, while common and preferred stock dividends of $1,289,000 decreased shareholders equity. Other comprehensive income increased $753,000 from year end. Common stock issuance was primarily related to shares issued through dividend reinvestment. The per share book value of shareholders common equity was $14.86 at June 30, 2010, increasing from $14.77 at December 31, 2009. Tangible shareholders common equity per share (total equity less goodwill and other intangible assets) was $9.96 at the end of the second quarter of 2010, increasing slightly from $9.79 at year end 2009. Shareholders common equity per share calculations excludes preferred stock of $32.7 million.
For the second quarter of 2010, net income was $937,000, basic and diluted earnings per share were $0.07, compared with net income of $659,000, and $0.03 basic and diluted per share for the first quarter of 2010, and net income of $62,000, $(0.05) basic and diluted earnings per share, for the second quarter of 2009. Net income available to shareholders was $525,000 in the current quarter compared with $246,000 in the first quarter of the year and a net loss of $351,000 in the second quarter of 2009. This years second quarter was once again, heavily impacted by a $3.1 million charge to loan loss provision, as well as $466,000 in expense relating to other real estate owned. The charge to loan loss provision was necessary as we identified additional loans for which the borrowers had exhausted their sources of repayment, or the value of the supporting collateral had declined. These loans were either transferred into nonaccrual status and specific reserves established, or charged down to the estimated value of the collateral that can be recovered on the loan.
Total non-interest income was $2.4 million in the second quarter, compared with $5.1 million in the second quarter of 2009 and $2.3 million in the first quarter of 2010. Compared with 2009s second quarter, gains on sale of mortgages were lower by $2.4 million, primarily due to a decrease in mortgage refinancing resulting from new regulatory restrictions on making residential mortgages. Other factors affecting non-interest income in the current quarter compared to second quarter of last year were gains on trading account securities and securities available for sale, which decreased a combined $419,000. Last years second quarter reflected a gain on the sale of money market preferred securities of $382,000. Also effecting non interest income were higher mortgage servicing income, which was up $254,000 on fewer write downs of servicing rights, and other income which was down $273,000 mainly due to the sale of our armored car business. As a result of our sale of the armored car business, other income will be lower by $200,000 to $250,000 per quarter.
For the first half of 2010, net income was $1.6 million, basic and diluted earnings per share were $0.10, compared with net income of $1.6 million and $0.12 basic and diluted per share for the first six months of 2009. Net income available to shareholders was $771,000 in 2010s first half compared with a net income of $887,000 in the year ago period. The first half of the year was heavily impacted by a $5.6 million charge to loan loss provision, as well as $1.3 million in expense relating to other real estate owned. The charge to loan loss provision was necessary as we identified additional loans for which the borrowers had exhausted their sources of repayment, or the value of the supporting collateral had declined. These loans were either transferred into nonaccrual status and specific reserves established, or charged down to the estimated value of the collateral that can be recovered on the loan.
At June 30, 2010, we have adequate sources of liquidity to meet our needs. Cash and cash equivalent balances were at $75 million, a decrease of $32.5 million, or 30.2%, compared with year end 2009. This decrease was primarily the result of reinvestment of funds into available for sale securities and a $15.2 million net pay down of Federal Home Loan Bank advances. Our securities available for sale increased $70.3 million from year end 2009, providing an additional source of liquidity should it be necessary. The additional liquidity was primarily derived from increased deposits of $13.2 million and loan pay downs of approximately $29.5 million.
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