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

May 17, 2010 | About:

First Federal of Northern Michigan Banco (FFNM) filed Quarterly Report for the period ended 2010-03-31.

First Federal Of Northern Michigan Banco has a market cap of $5.77 million; its shares were traded at around $2 with and P/S ratio of 0.38.

Highlight of Business Operations:

For the quarter ended March 31, 2010, the Company had net income from continuing operations of $202,000, or $0.07 per basic and diluted share, compared to $147,000, or $0.05 per basic and diluted share, for the year earlier period, an increase of $55,000.

Total assets decreased by $3.9 million, or 1.7%, from $233.5 million as of December 31, 2009 to $229.6 million as of March 31, 2010. Investment securities available for sale decreased by $676,000 and net loans receivable decreased $2.8 million during this time period. Total deposits decreased $1.5 million from December 31, 2009 to March 31, 2010 while Federal Home Loan Bank advances decreased by $2.2 million and equity increased by $226,000.

ASSETS: Total assets decreased $3.9 million, or 1.7%, to $229.6 million at March 31, 2010 from $233.5 million at December 31, 2009. Net loans receivable decreased $2.8 million, or 1.6%, to $168.4 million at March 31, 2010 from $171.2 million at December 31, 2009. The decrease in net loans was due to adjustable-rate or balloon mortgage loans that have paid off or been refinanced and sold into the secondary market, consumer loan balances that have declined due to normal pay-downs, and limited originations of loans to be held in the Company s portfolio. Investment securities decreased $676,000 from December 31, 2009 to March 31, 2010 due in part to the sale of a $1 million municipal security because of the perceived credit risk inherent in the security.

General: Net income from continuing operations increased by $55,000 to $202,000 for the three months ended March 31, 2010 from $147,000 for the same period ended March 31, 2009. The major factors affecting earnings during the quarter were a decrease of $253,000 in the provision for loan losses and improvements to our net interest margin, partially offset by a decrease in non-interest income of $220,000 quarter over quarter.

Interest Income: Interest income decreased to $2.9 million for the three months ended March 31, 2010, from $3.3 million for the comparable period in 2009. The average balance of interest earning assets decreased by $17.2 million from $233.1 million for the three months ended March 31, 2009 to $215.9 million for the three months ended March 31, 2010 and the average yield on interest earning assets decreased 31 basis points over that same time period from 5.68% to 5.37%. The yield on our mortgage loan portfolio decreased by 22 basis points to 6.18% from 6.40% for the three month period ended March 31, 2010 and 2009 respectively. The average balance of our mortgage loan portfolio decreased by $10.3 million to $80.5 million during that time period. The average balance of our non-mortgage loan portfolio decreased $11.9 million to $95.0 million for the three months ended March 31, 2010 and the yield on these assets decreased to 5.53% from 5.65% period over period.

Net Interest Income: Net interest income increased by $124,000, to $1.9 million for the three-month period ended March 31, 2010 from $1.8 million for the same period in 2009. For the three months ended March 31, 2010, average interest-earning assets decreased $17.2 million, or 7.4%, to $215.9 million when compared to the same period in 2009. Average interest-bearing liabilities decreased $10.8 million, or 5.3%, to $194.2 million for the quarter ended March 31, 2010 from $205.0 million for the quarter ended March 31, 2009. The yield on average interest-earning assets decreased to 5.37% for the three month period ended March 31, 2010 from 5.68% for the same period ended in 2009. In addition, the cost of average interest-bearing liabilities decreased to 2.00% from 2.94% for the three month periods ended March 31, 2010 and 2009, respectively. Our interest rate spread increased by 64 basis points to 3.38% while our net interest margin increased by 48 basis points to 3.58% for the three month period ended March 31, 2010 from 3.10% for same period in 2009.

Read the The complete Report

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10qk
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