Mackinac Financial Corp. (NASDAQ:MFNC) filed Quarterly Report for the period ended 2012-09-30.
Mackinac Financial Corporation has a market cap of $24.6 million; its shares were traded at around $7.19 with a P/E ratio of 4.9 and P/S ratio of 0.9.
Highlight of Business Operations:Through the first nine months of 2012, loan balances increased by $32.712 million, or 8.15%, from December 31, 2011 balances of $401.246 million. During the first nine months of 2012, the Bank had total loan production of $145 million, which included $46 million of secondary market loan production. This loan production, however, was offset by loan principal runoff, paydowns and amortization, and also SBA/USDA loan sales of $11.540 million, and nonperforming loans transferred to other real estate owned (OREO) amounting to $1.013 million.
The Corporation reported net income available to common shareholders of $5.536 million, or $1.44 per share, in the first nine months of 2012, compared to $1.566 million or $.46 per share for the first nine months of 2011. Fully diluted earnings per share amounted to $1.39 per share for the 2012 nine-month period and $.45per share in 2011. The warrants outstanding were more dilutive in 2012 due to the increased market value of our common stock. The first nine month results include a valuation adjustment to the deferred tax asset of $3 million, a provision for loan losses of $.795 million and OREO writedowns and losses of $.450 million. Operating results for the same period in 2011 include a $1.000 million provision for loan losses, and $.728 million of OREO writedowns and losses.
Net interest margin on a fully taxable equivalent basis amounted to $4.934 million, 4.10% of average earning assets, in the third quarter of 2012, compared to $4.732 million, and 4.18% of average earning assets, in the third quarter of 2011. In the first nine months of 2012, net interest margin increased to $14.722 million, 4.19% of average earning assets, compared to $13.103 million, 3.78 % 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 increased by $.143 million for the three months ended September 30, 2012. Included in the 2012 three month period was income from secondary market loans of $.320 million and income from SBA/USDA loan sales of $.506 million, compared to $.195 million and $.283 million for the same period in 2011. In 2011, the Corporation recorded the initial recognition of mortgage servicing rights in the amount of $.300 million, and in 2012, recorded ongoing income from this source of $.092 million.
Other income increased by $.129 million for the nine months ended September 30, 2012, compared to the nine months ended September 30, 2011. In the first nine months of 2012, revenue due to 1-4 family loans produced and sold in the secondary market, amounted to $.844 million compared to $.394 million a year ago. We expect to continue to benefit from secondary market activity in future periods. SBA/USDA loan sale gains amounted to $1.126 million in the first nine months of 2012, compared to $1.469 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.
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