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Mackinac Financial Corp. Reports Operating Results (10-Q)

August 14, 2012 | About:
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10qk

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Mackinac Financial Corp. (MFNC) filed Quarterly Report for the period ended 2012-06-30.

Mackinac Financial Corporation has a market cap of $21.4 million; its shares were traded at around $6.35 with a P/E ratio of 4.2 and P/S ratio of 0.8.
This is the annual revenues and earnings per share of MFNC over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of MFNC.


Highlight of Business Operations:

The Corporation recognized a deferred tax benefit of approximately $1.986 million for the June 30, 2012 six month period and $.616 million for the six months ended June 30, 2011. The valuation allowance at June 30, 2012 was $3.4 million. Management evaluated the deferred tax valuation allowance as of June 30, 2012 and determined that an adjustment to the valuation was warranted. The Corporation reduced the valuation allowance by $3.0 million since it was determined that it was “more likely than not” that these benefits would be realized. The Corporation made this determination after a thorough review of projected earnings and the composition and sustainability of those earnings over the projected tax carryover period. This analysis substantiated the ability to utilize these deferred tax assets. The Corporation will continue to evaluate the future benefits from these carryforwards and at such time as it becomes “more likely than not” that they would be utilized prior to expiration will recognize the additional benefits as an adjustment to the valuation allowance.

The Corporation reported net income available to common shareholders of $4.639 million, or $1.36 per share, in the first half of 2012, compared to $.859 million or $.25 per share for the first half of 2011. Fully diluted earnings per share amounted to $1.31 per share for the 2012 six-month period and $.25 per share in 2011. The warrants outstanding were more dilutive in 2012 due to the increased market value of our common stock. The first half results include a valuation adjustment to the deferred tax asset of $3 million, a provision for loan losses of $.645 million and OREO writedowns and losses of $.185 million. Operating results for the same period in 2011 include a $.600 million provision for loan losses, and $.432 million of OREO writedowns and losses.

Net interest margin on a fully taxable equivalent basis amounted to $5.038 million, 4.32% of average earning assets, in the second quarter of 2012, compared to $4.201 million, and 3.81% of average earning assets, in the second quarter of 2011. In the first six months of 2012, net interest margin increased to $9.821 million, 4.25% of average earning assets, compared to $8.367 million, 3.87 % of average earning assets, for the same period in 2011. Margin improvement in 2012 was primarily due to a reduction in funding costs between periods.

Other income decreased by $.014 million for the six months ended June 30, 2012, compared to the six months ended June 30, 2011. In the first half of 2012, revenue due to 1-4 family loans produced and sold in the secondary market, amounted to $.524 million compared to $.199 million a year ago. We expect to continue to benefit from secondary market activity in future periods. SBA/USDA loan sale gains amounted to $.620 million in the first half of 2012, compared to $1.186 million for the same period in 2011. Service fees and other noninterest income decreased slightly between periods largely because of lower NSF fees, which we believe will continue due to customers being more diligent in managing their accounts.

The Corporation recognized a deferred tax benefit of approximately $1.986 million for the June 30, 2012 six month period and $.616 million for the six months ended June 30, 2011. The valuation allowance at June 30, 2012 was $3.4 million. Management evaluated the deferred tax valuation allowance as of June 30, 2012 and determined that an adjustment to the valuation was warranted. The Corporation reduced the valuation allowance by $3.0 million since it was determined that it was “more likely than not” that these benefits would be realized. The Corporation made this determination after a thorough review of projected earnings and the composition and sustainability of those earnings over the projected tax carryover period. This analysis substantiated the ability to utilize these deferred tax assets. The Corporation will continue to evaluate the future benefits from these carryforwards and at such time as it becomes “more likely than not” that they would be utilized prior to expiration will recognize the additional benefits as an adjustment to the valuation allowance.

Read the The complete Report

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