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First Federal of Northern Michigan Banco Reports Operating Results (10-Q)

November 15, 2010 | About:
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10qk

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First Federal of Northern Michigan Banco (FFNM) filed Quarterly Report for the period ended 2010-09-30.

First Federal Of Northern Michigan Banco has a market cap of $7.35 million; its shares were traded at around $2.55 with and P/S ratio of 0.49.
This is the annual revenues and earnings per share of FFNM over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of FFNM.


Highlight of Business Operations:

Total assets decreased by $7.8 million, or 3.4%, to $225.7 million from December 31, 2009 to September 30, 2010. Investment securities available for sale increased by $1.0 million or 3.1% from December 31, 2009 to September 30, 2010. Net loans receivable decreased $9.5 million or 5.6% during that same time period. Total deposits decreased $1.5 million, or 1.0% from December 31, 2009 to September 30, 2010 and REPO sweep accounts increased by $1.0 million, or 18.1% during that same time period. Federal Home Loan Bank advances decreased by $7.4 million or 16.7% from December 31, 2009 to September 30, 2010. Equity increased by $805,000, or 3.5% to $23.9 million during the nine-month period ended September 30, 2010.

ASSETS: Total assets decreased $7.8 million, or 3.4%, to $225.7 million at September 30, 2010 from $233.5 million at December 31, 2009. During that nine-month period the following changes occurred: investment securities available for sale increased $1.0 million, or 3.1%, to $34.8 million; cash and cash equivalents increased $1.9 million or 60.0% to $5.0 million; and net loans receivable decreased $9.5 million, or 5.6%, to $161.7 million. Mortgage loans decreased by $7.4 million, consumer loans decreased by $1.7 million and commercial loans decreased by $1.1 million as loan originations declined due to weaker economic conditions in our primary lending markets and due to our sale of the majority of our mortgage loans into the secondary market.

LIABILITIES: Deposits decreased $1.5 million, or 1.0%, to $156.6 million at September 30, 2010 from $158.1 million at December 31, 2009. The composition of our deposits changed markedly during the nine-month period. Our liquid certificate of deposit product (from which customers can make a penalty-free withdrawal with seven days advance written notice) decreased by $8.9 million and our non interest-bearing checking accounts decreased by $752,000 during this time period. Partially offsetting those decreases were increases in the following deposit products: $1.3 million in our traditional certificate of deposit accounts (which cannot be redeemed before maturity without penalty); $6.2 million in money market accounts; $933,000 in savings deposit accounts; and $536,000 in NOW accounts. During this same time period, Repo sweep accounts increased $979,000 or 18.1% to $6.4 million. FHLB advances decreased $7.4 million, or 16.7%, to $37.0 million at September 30, 2010 from $44.4 million at December 31, 2009 due to decreases in our assets.

EQUITY: Stockholders equity increased to $23.9 million at September 30, 2010 from $23.1 million at December 31, 2009, an increase of $805,000. The increase in stockholders equity was mainly attributable to our net income for the nine-month period of $593,000. The unrealized gain on available for sale securities, net of tax, was $469,000 at September 30, 2010 as compared to $423,000 at December 31, 2009, an increase of $46,000.

General: Net income from continuing operations increased by $3.9 million to $72,000 for the three months ended September 30, 2010 from a net loss of $3.8 million for the same period ended September 30, 2009. This increase was attributable to two main factors: a decrease in provision for loan losses of $2.6 million to $353,000 for the three months ended September 30, 2010 as compared to $3.0 million for the same period in 2009 and the establishment of a $2.0 million valuation allowance on our deferred tax assets during the three-month period ended September 30, 2009.

Net Interest Income: Net interest income increased $163,000 to $2.0 million for the three-month period ended September 30, 2010 as compared to $1.9 million for the same period in 2009. For the three months ended September 30, 2010, average interest-earning assets decreased $12.8 million, or 5.8%, to $209.5 million when compared to the same period in 2009. Average interest-bearing liabilities decreased $7.1 million, or 3.6%, to $190.8 million for the quarter ended September 30, 2010 from $197.9 million for the quarter ended September 30, 2009. The yield on average interest-earning assets decreased to 5.53% for the three month period ended September 30, 2010 from 5.58% for the same period ended in 2009. The cost of average interest-bearing liabilities decreased to 1.76% from 2.43% for the three-month periods ended September 30, 2010 and September 30, 2009, respectively. The decrease in asset yields on interest earning assets, offset by a greater decrease in our cost of funds resulted in a increase in our net interest margin of 52 basis points to 3.93% for the three-month period ended September 30, 2010 from 3.41% for same period in 2009.

Read the The complete Report

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