FIRST M & F CORPORATION 
By KOSCIUSKO, Miss., Jan. 23, 2012 /PRNewswire/ -- First M&F Corp. (NASDAQ:FMFC) today reported 2011 net income of $4.373 million as compared to a net income of $4.011 million for 2010, a nine percent increase. Earnings allocated to common shareholders were $2.584 million, or $0.28 basic and diluted earnings per share, compared to earnings of $15.071 million, or $1.66 basic and diluted earnings per share for 2010. Earnings attributable to common shareholders for 2010 includes a $12.867 million gain on exchange of preferred stock recorded in the third quarter of 2010. Excluding the gain on exchange, 2010 common earnings were $2.301 million, or $.25 basic and diluted earnings per share.
Net income for the quarter ended December 31, 2011 was $.530 million allocated to common shareholders, or $.05 basic and diluted earnings per share, compared to $.267 million, or $.03 basic and diluted earnings per share for the fourth quarter of 2010.
For the fourth quarter of 2011 the annualized return on assets was 0.25%, while return on common equity was 2.27%. Comparatively, the return on assets for the fourth quarter of 2010 was 0.16%, with a return on common equity of 1.16%. The return on assets for 2011 was 0.27%, while the return on common equity was 2.81%.
"Our credit trends continue to improve, bolstered by eight quarters of post-recession earnings," said Hugh S. Potts, Jr., Chairman and Chief Executive Officer. "Our nonaccrual loans to total loans improved in 2011 to 1.68% from 3.11% in 2010. While our net income overall was up nine percent, cash earnings applicable to common stock, excluding the 2010 gain on exchange of preferred stock, were up thirteen percent year over year," continued Mr. Potts.
Net Interest Income
Net interest income for the quarter was up slightly compared to the fourth quarter of 2010, with the net interest margin increasing to 3.64% in the fourth quarter of 2011 as compared to 3.57% in the fourth quarter of 2010. The significant contributor to the increase in net interest income continues to be the improvement in net interest spreads stemming from lower deposit costs. The net interest margin for the third quarter of 2011 was 3.72% as compared to 3.75% for the second quarter of 2011 and 3.59% for the first quarter of 2011 as the cost of funds trended downward all year. Loan yields decreased to 5.74% in the fourth quarter of 2011 from 5.89% in the fourth quarter of 2010. Loan yields fell slightly from the third quarter of 2011 to the fourth quarter. Average total loans were $1.014 billion for the fourth quarter of 2011 as compared to $1.035 billion for the third quarter of 2011 and $1.048 million during the fourth quarter of 2010. Loans held for investment fell by $18.626 million in the fourth quarter of 2011 and by $29.629 million in the third quarter as loan demand continued to be weak. Deposit costs fell in the fourth quarter of 2011 from the third quarter of 2011 and from the fourth quarter of 2010, as deposits were re-priced downward throughout 2011 in the current stable low-rate environment, continuing a trend beginning in the fourth quarter of 2007. Deposit costs were 1.01% in the fourth quarter of 2011 as compared to 1.49% in the fourth quarter of 2010. Deposits fell by $12.396 million during the fourth quarter of 2011. Management continues to emphasize and focus on core deposit growth by developing and promoting relationship-driven deposit gathering while de-emphasizing non-core deposit funding. Loans held for investment as a percentage of assets were 63.55% at December 31, 2011 as compared to 66.10% at December 31, 2010 and 63.96% at September 30, 2011.
Non-interest Income
Non-interest income, excluding securities transactions and other-than-temporary impairment on securities, for the fourth quarter of 2011 was up by 20.96% compared to the fourth quarter of 2010, with deposit-related income up by 3.73% and mortgage income up 40.77% on higher volumes. Other income was bolstered by a net gain on the sale of branch properties closed under Project McKinley, a cost savings and efficiency initiative in the fourth quarter. Insurance agency commissions fell by 7.64% in a soft insurance market.
Non-interest income, excluding securities transactions and other-than-temporary impairment on securities, was up 4.11% for 2011 versus 2010. Over half of non-interest income is from deposit sources, which was virtually flat year over year. Deposit revenues continue to be supported by debit card fee income, which increased by 17.86% in 2011 over 2010, and overdraft fee income, which, however, decreased by 5.61% for the year. Commission revenues from traditional insurance products were down 4.54% year over year.
Non-interest income includes non-cash other-than-temporary impairment charges of $.631 million in 2011 on pooled trust preferred securities held in the investment portfolio. These charges reflect credit losses expected due to deferrals and defaults by issuing institutions and cash flow analyses.
Non-interest Expenses
Non-interest expenses were up by 3.07% in the fourth quarter of 2011 as compared to the fourth quarter of 2010. Salaries and benefits for the quarter were up slightly compared to the year-ago quarter due to severance costs related to Project McKinley. Most of the increase in other expenses was due to volume-related mortgage expenses.
Non-interest expenses increased by 7.05% for 2011 as compared to 2010. Most of the increase was due to higher foreclosed property expenses in 2011 as non-performing assets shifted more from non-accrual loans to Other Real Estate. The number of full-time equivalent employees at the end of 2011 was 460 as compared to 496 at the end of the third quarter of 2011 and 499 at the end of 2010.
Credit Quality
Annualized net loan charge-offs as a percent of average loans for the fourth quarter of 2011 were 1.37% as compared to 2.41% for the same period in 2010. Non-accrual and 90-day past due loans as a percent of total loans were 1.74% at the end of 2011 as compared to 3.20% at the end of 2010. Annualized net charge-offs as a percentage of average loans for 2011 were 1.05% as compared to 1.65% for 2010. The allowance for loan losses as a percentage of loans was 1.50% at December 31, 2011 as compared to 1.51% at December 31, 2010. The provision for loan losses increased slightly in 2011 from $9.220 million in 2010 to $9.720 million in 2011.
Mr. Potts commented, "Credit metrics improved across the board during 2011 and the fourth quarter as non-performing assets shifted from non-accrual to Other Real Estate. The rate of increase in new credit issues has dropped dramatically as old issues are resolved."
Balance Sheet
Total assets fell by 2.26% in 2011, to $1.568 billion from $1.604 billion. Total equity grew to $111.041 million, a 3.71% increase from 2010. Total loans held for investment were $.996 billion compared to $1.060 billion at the end of 2010. Deposits were $1.371 billion compared to $1.375 billion at the end of 2010. Book value per common share increased to $10.21 per share at the end of 2011, a 2.51% increase from 2010. "While loan demand has been tepid at best and loan volumes have fallen, newer channels of growth are beginning to gain traction," said Mr. Potts. Mr. Potts continued, "Present demands are such that an aggressive growth strategy looks more likely in 2013 and 2014, although we do expect some growth this year."
Growth and Branch Rationalization
In the first quarter of 2010 the Company closed two branches in Shelby County, Tennessee and one branch in Shelby County, Alabama. Under Project McKinley, the Company closed five branches, two in metro-Jackson, MS, one in Oxford MS, one in Tupelo, MS and one in its Shelby County, Alabama market in the fourth quarter of 2011. These closures were designed to improve the Company's efficiencies and cost structure without exiting any markets.
Conclusion
"We are convinced," stated Mr. Potts, "that we are on the right track. We have addressed organizational structure, overhead, net interest margin, credit concentrations, classified and non-performing assets while still remaining profitable. We expect 2012 to reflect a continuation of these trends while the Company strives to accelerate progress."
About First M&F Corporation
First M&F Corp., the parent of M&F Bank, is committed to proceed with its mission of making the mid-south better through the delivery of excellence in financial services to 33 communities in Mississippi, Alabama, Tennessee and Florida.
Caution Concerning Forward?Looking Statements
This document includes certain "forward?looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in economic, business, competitive, market and regulatory factors. More detailed information about those factors is contained in First M&F Corporation's filings with the Securities and Exchange Commission.
First M&F Corporation
Condensed Consolidated
Statements of Condition
(Unaudited)
(In thousands, except share
data)
December 31 December 31
2011 2010
---- ----
Cash and due from banks $39,976 $45,099
Interest bearing bank
balances 39,391 72,103
Federal funds sold 25,000 25,000
Securities available for sale
(cost of
$315,890 and $274,421) 320,774 276,929
Loans held for sale 26,073 6,242
Loans 996,340 1,060,146
Allowance for loan losses 14,953 16,025
------ ------
Net loans 981,387 1,044,121
Bank premises and equipment 37,989 40,696
Accrued interest receivable 6,122 6,380
Other real estate 36,952 31,125
Other intangible assets 4,586 5,013
Other assets 49,541 51,256
------ ------
Total assets $1,567,791 $1,603,964
========== ==========
Non-interest bearing deposits $231,718 $212,199
Interest bearing deposits 1,139,745 1,163,213
--------- ---------
Total deposits 1,371,463 1,375,412
Federal funds and repurchase
agreements 4,398 33,481
Other borrowings 43,001 50,416
Junior subordinated debt 30,928 30,928
Accrued interest payable 1,023 1,470
Other liabilities 5,937 5,192
----- -----
Total liabilities 1,456,750 1,496,899
Preferred stock, 30,000
shares issued and
outstanding 17,564 16,390
Common stock, 9,154,936 and
9,106,803
shares issued & outstanding 45,775 45,534
Additional paid-in capital 31,895 31,883
Nonvested restricted stock
awards 674 784
Retained earnings 14,456 12,225
Accumulated other
comprehensive income (Note
1) 677 249
--- ---
Total First M&F Corp equity 111,041 107,065
Noncontrolling interests in
subsidiaries - -
--- ---
Total equity 111,041 107,065
------- -------
Total liabilities & equity $1,567,791 $1,603,964
========== ==========
First M&F Corporation
and Subsidiary
Condensed Consolidated
Statements of Income
(Unaudited)
(In thousands, except
share data)
Three Months Ended Twelve Months Ended
December 31 December 31
2011 2010 2011 2010
---- ---- ---- ----
Interest and fees on
loans $14,482 $15,463 $60,201 $62,070
Interest on loans held
for sale 154 62 275 232
Taxable investments 1,297 1,676 6,745 7,616
Tax exempt investments 318 353 1,252 1,549
Federal funds sold 16 15 63 82
Interest bearing bank
balances 38 34 179 143
--- --- --- ---
Total interest income 16,305 17,603 68,715 71,692
Interest on deposits 2,897 4,177 13,501 18,809
Interest on fed funds
and repurchase
agreements 6 17 36 66
Interest on other
borrowings 467 536 1,979 3,024
Interest on
subordinated debt 292 505 1,335 1,992
--- --- ----- -----
Total interest expense 3,662 5,235 16,851 23,891
Net interest income 12,643 12,368 51,864 47,801
Provision for possible
loan losses 2,280 2,280 9,720 9,220
----- ----- ----- -----
Net interest income
after loan loss 10,363 10,088 42,144 38,581
Service charges on
deposits 2,641 2,546 10,293 10,221
Mortgage banking
income 618 439 1,821 1,581
Agency commission
income 798 864 3,636 3,809
Fiduciary and
brokerage income 153 120 584 526
Other income 1,133 448 3,102 2,532
Other-than-temporary
impairment on
securities, net of
$49, $0, $263 and $32 recognized in other
comprehensive income (50) - (631) (403)
Gains on AFS
securities 619 539 2,769 2,255
--- --- ----- -----
Total noninterest
income 5,912 4,956 21,574 20,521
Salaries and employee
benefits 6,899 6,732 28,469 27,303
Net occupancy expense 1,003 968 3,935 3,937
Equipment expenses 479 523 1,871 2,382
Software and
processing expenses 378 400 1,540 1,627
FDIC insurance
assessments 530 768 2,426 3,261
Foreclosed property
expenses 2,047 1,905 7,351 2,946
Intangible asset
amortization and
impairment 107 106 427 426
Other expenses 3,634 3,226 12,315 12,608
----- ----- ------ ------
Total noninterest
expense 15,077 14,628 58,334 54,490
Net income before
taxes 1,198 416 5,384 4,612
Income tax expense
(benefit) 211 (226) 1,011 602
--- ---- ----- ---
Net income 987 642 4,373 4,010
Net income (loss)
attributable to
noncontrolling
interests - 1 - (1)
--- --- --- ---
Net income
attributable to First
M&F Corp $987 $641 $4,373 $4,011
==== ==== ====== ======
Earnings Per Common
Share Calculations:
Net income
attributable to First
M&F Corp $987 $641 $4,373 $4,011
Dividends and
accretion on
preferred stock (454) (375) (1,774) (1,692)
Gain on exchange of
preferred stock
(Note 2) - - - 12,867
--- --- --- ------
Net income applicable
to common stock 533 266 2,599 15,186
Earnings (loss)
attributable to
participating
securities 3 (1) 15 115
Net income allocated
to common
shareholders $530 $267 $2,584 $15,071
==== ==== ====== =======
Weighted average
shares (basic) 9,145,108 9,099,883 9,126,605 9,081,687
Weighted average
shares (diluted) 9,145,108 9,099,883 9,126,605 9,081,687
Basic earnings per
share $0.05 $0.03 $0.28 $1.66
Diluted earnings per
share $0.05 $0.03 $0.28 $1.66
===== ===== ===== =====
First M&F Corporation
Financial Highlights
YTD Ended YTD Ended
December 31 December 31
2011 2010
---- ----
Performance Ratios:
Return on assets
(annualized) 0.27% 0.25%
Return on equity
(annualized) (a) 4.00% 3.74%
Return on common equity
(annualized) (a) 2.81% 2.87%
Efficiency ratio (c) 78.47% 78.47%
Net interest margin
(annualized, tax-
equivalent) 3.68% 3.43%
Net charge-offs to
average loans
(annualized) 1.05% 1.65%
Nonaccrual loans to total
loans 1.68% 3.11%
90 day accruing loans to
total loans 0.06% 0.09%
QTD Ended QTD Ended QTD Ended QTD Ended
December 31 September 30 June 30 March 31
2011 2011 2011 2011
---- ---- ---- ----
Per Common Share
(diluted):
Net income $0.05 $0.10 $0.07 $0.06
Cash dividends paid 0.01 0.01 0.01 0.01
Book value 10.21 10.23 10.20 9.98
Closing stock price 2.84 3.16 3.78 4.08
Loan Portfolio
Composition: (in
thousands)
Commercial, financial and
agricultural $155,330 $143,133 $152,063 $137,620
Non-residential real
estate 574,505 603,904 621,546 642,372
Residential real estate 186,815 185,564 187,932 189,290
Home equity loans 37,024 38,320 38,891 38,622
Consumer loans 42,666 44,045 44,163 43,357
------ ------ ------ ------
Total loans $996,340 $1,014,966 $1,044,595 $1,051,261
Deposit Composition: (in
thousands)
Noninterest-bearing
deposits $231,718 $222,042 $243,626 $208,457
NOW deposits 390,256 378,409 397,281 411,898
MMDA deposits 197,849 179,138 174,127 161,959
Savings deposits 119,693 118,814 117,830 116,714
Core certificates of
deposit under $100,000 225,777 250,130 255,847 261,087
Core certificates of
deposit $100,000 and over 187,513 216,655 217,540 222,617
Brokered certificates of
deposit under $100,000 5,629 4,686 4,611 2,880
Brokered certificates of
deposit $100,000 and over 13,028 13,985 13,637 14,464
------ ------ ------ ------
Total deposits $1,371,463 $1,383,859 $1,424,499 $1,400,076
Nonperforming Assets: (in
thousands)
Nonaccrual loans $17,177 $26,622 $32,800 $37,407
Other real estate 36,952 32,722 30,650 29,660
Investment securities 599 509 693 639
--- --- --- ---
Total nonperforming assets $54,728 $59,853 $64,143 $67,706
Accruing loans past due 90
days or more $602 $252 $784 $338
Restructured loans
(accruing) $19,662 $19,712 $22,988 $16,320
Total nonaccrual loan to
loans 1.68% 2.59% 3.13% 3.55%
Total nonperforming credit
assets to loans and ORE 5.11% 5.60% 5.89% 6.19%
Total nonperforming assets
to assets ratio 3.49% 3.77% 3.95% 4.21%
Allowance For Loan Loss
Activity: (in thousands)
Beginning balance $16,111 $18,805 $17,043 $16,025
Provision for loan loss 2,280 2,580 2,280 2,580
Charge-offs (4,001) (5,419) (1,442) (2,147)
Recoveries 563 145 924 585
--- --- --- ---
Ending balance $14,953 $16,111 $18,805 $17,043
First M&F
Corporation
Financial Highlights
QTD Ended QTD Ended QTD Ended QTD Ended
December 31 September 30 June 30 March 31
2011 2011 2011 2011
---- ---- ---- ----
Condensed Income
Statements: (in
thousands)
Interest income $16,305 $17,239 $17,602 $17,569
Interest expense 3,662 4,014 4,331 4,844
----- ----- ----- -----
Net interest income 12,643 13,225 13,271 12,725
Provision for loan
losses 2,280 2,580 2,280 2,580
Noninterest revenues 5,912 5,219 4,712 5,731
Noninterest expenses 15,077 14,143 14,303 14,811
------ ------ ------ ------
Net income before
taxes 1,198 1,721 1,400 1,065
Income tax expense 211 391 294 115
Noncontrolling
interest - - - -
--- --- --- ---
Net income $987 $1,330 $1,106 $950
Preferred dividends (454) (448) (440) (432)
Gain on exchange of
preferred stock - - - -
--- --- --- ---
Net income
applicable to
common stock 533 882 666 518
Earnings
attributable to
participating
securities 3 4 5 3
--- --- --- ---
Net income allocated
to common
shareholders $530 $878 $661 $515
Tax-equivalent net
interest income $12,865 $13,449 $13,495 $12,955
Selected Average
Balances: (in
thousands)
Assets $1,564,531 $1,592,030 $1,598,871 $1,622,363
Loans held for
investment 993,869 1,028,372 1,050,136 1,056,903
Earning assets 1,401,948 1,433,189 1,444,677 1,463,032
Deposits 1,366,628 1,390,835 1,396,331 1,403,733
Equity 110,483 110,412 108,911 107,633
Common equity 93,077 93,307 92,096 91,102
Selected Ratios:
Return on average
assets (annualized) 0.25% 0.33% 0.28% 0.24%
Return on average
equity (annualized)
(a) 3.54% 4.78% 4.07% 3.58%
Return on average
common equity
(annualized) (a) 2.27% 3.76% 2.90% 2.31%
Average equity to
average assets 7.06% 6.94% 6.81% 6.63%
Tangible equity to
tangible assets
(b) 6.81% 6.71% 6.50% 6.41%
Tangible common
equity to tangible
assets (b) 5.69% 5.61% 5.46% 5.37%
Net interest margin
(annualized, tax-
equivalent) 3.64% 3.72% 3.75% 3.59%
Efficiency ratio (c) 80.29% 75.76% 78.56% 79.26%
Net charge-offs to
average loans
(annualized) 1.37% 2.03% 0.20% 0.60%
Nonaccrual loans to
total loans 1.68% 2.59% 3.13% 3.55%
90 day accruing
loans to total
loans 0.06% 0.02% 0.07% 0.03%
Price to book 0.28x 0.31x 0.37x 0.41x
Price to earnings 14.20x 7.90x 13.50x 17.00x
First M&F
Corporation
Financial
Highlights
Historical Earnings
Trends: Earnings Earnings
Applicable to Allocated to
Common Common
Earnings Stock Shareholders EPS
(in thousands) (in thousands) (in thousands) (diluted)
------------- ------------- ------------- --------
4Q 2011 $987 $533 $530 $0.05
3Q 2011 1,330 882 878 0.10
2Q 2011 1,106 666 661 0.07
1Q 2011 950 518 515 0.06
4Q 2010 641 266 267 0.03
3Q 2010 1,245 13,671 13,565 1.49
2Q 2010 1,272 833 826 0.09
1Q 2010 853 416 413 0.05
4Q 2009 (27,311) (27,747) (27,488) (3.03)
Revenue Statistics: Non-interest Non-interest
Revenues Revenues to Revenues to
Per FTE Ttl. Revenues Avg. Assets
(thousands) (percent) (percent)
---------- -------- --------
4Q 2011 $39.0 31.48% 1.50%
3Q 2011 36.6 27.96% 1.30%
2Q 2011 36.6 25.88% 1.18%
1Q 2011 37.9 30.67% 1.43%
4Q 2010 35.4 28.19% 1.25%
3Q 2010 34.9 27.42% 1.21%
2Q 2010 35.1 29.98% 1.31%
1Q 2010 34.4 32.66% 1.39%
4Q 2009 32.8 26.09% 1.05%
Expense Statistics: Non-interest
Expense to Efficiency
Avg. Assets Ratio
(percent) (percent) (c)
-------- -------------
4Q 2011 3.82% 80.29%
3Q 2011 3.52% 75.76%
2Q 2011 3.59% 78.56%
1Q 2011 3.70% 79.26%
4Q 2010 3.69% 83.22%
3Q 2010 3.35% 75.75%
2Q 2010 3.35% 76.69%
1Q 2010 3.32% 78.16%
4Q 2009 8.25% 106.73%
First M&F
Corporation
Average Balance
Sheets/Yields and
Costs (tax-
equivalent)
(In thousands with
yields and costs
annualized) QTD December 2011 QTD December 2010
----------------- -----------------
Average Average
Balance Yield/Cost Balance Yield/Cost
------- ---------- ------- ----------
Interest bearing
bank balances $44,653 0.33% $65,302 0.21%
Federal funds sold 25,000 0.25% 25,000 0.25%
Taxable investments
(amortized cost) 283,986 1.81% 228,935 2.91%
Tax-exempt
investments
(amortized cost) 33,923 5.94% 37,525 5.95%
Loans held for sale 20,517 2.98% 6,551 3.75%
Loans held for
investment 993,869 5.79% 1,041,453 5.91%
------- ---- --------- ----
Total earning
assets 1,401,948 4.68% 1,404,766 5.04%
Non-earning assets 162,583 169,660
------- -------
Total average
assets $1,564,531 $1,574,426
NOW $369,789 0.47% $319,309 1.02%
MMDA 186,898 0.62% 167,154 1.14%
Savings 118,833 1.05% 115,806 1.26%
Certificates of
Deposit 459,182 1.60% 512,012 1.95%
Short-term
borrowings 4,809 0.53% 34,194 0.20%
Other borrowings 74,431 4.04% 80,946 5.10%
------ ---- ------ ----
Total interest
bearing
liabilities 1,213,942 1.20% 1,229,421 1.69%
Non-interest
bearing deposits 231,926 227,457
Non-interest
bearing
liabilities 8,180 8,438
Preferred equity 17,406 18,498
Common equity 93,077 90,612
------ ------
Total average
liabilities and
equity $1,564,531 $1,574,426
Net interest spread 3.48% 3.35%
Effect of non-
interest bearing
deposits 0.19% 0.26%
Effect of leverage -0.03% -0.04%
----- -----
Net interest
margin, tax-
equivalent 3.64% 3.57%
Less tax equivalent
adjustment:
Investments 0.05% 0.06%
Loans 0.01% 0.02%
---- ----
Reported book net
interest margin 3.58% 3.49%
First M&F
Corporation
Average Balance
Sheets/Yields and
Costs (tax-
equivalent)
(In thousands with
yields and costs
annualized) YTD December 2011 YTD December 2010
----------------- -----------------
Average Average
Balance Yield/Cost Balance Yield/Cost
------- ---------- ------- ----------
Interest bearing
bank balances $70,998 0.25% $60,894 0.23%
Federal funds sold 25,000 0.25% 35,642 0.23%
Taxable investments
(amortized cost) 265,446 2.54% 236,046 3.23%
Tax-exempt
investments
(amortized cost) 33,390 5.98% 41,347 5.97%
Loans held for sale 8,566 3.21% 7,416 3.13%
Loans held for
investment 1,032,137 5.85% 1,045,467 5.96%
--------- ---- --------- ----
Total earning
assets 1,435,537 4.85% 1,426,812 5.11%
Non-earning assets 158,747 164,130
------- -------
Total average
assets $1,594,284 $1,590,942
NOW $389,052 0.63% $321,036 1.05%
MMDA 172,978 0.72% 151,974 1.12%
Savings 117,686 1.12% 114,358 1.28%
Certificates of
Deposit 489,199 1.73% 544,192 2.26%
Short-term
borrowings 10,855 0.33% 19,112 0.35%
Other borrowings 76,923 4.31% 102,112 4.91%
------ ---- ------- ----
Total interest
bearing
liabilities 1,256,693 1.34% 1,252,784 1.91%
Non-interest
bearing deposits 220,370 222,083
Non-interest
bearing
liabilities 7,851 8,909
Preferred equity 16,967 26,300
Common equity 92,403 80,866
------ ------
Total average
liabilities and
equity $1,594,284 $1,590,942
Net interest spread 3.51% 3.20%
Effect of non-
interest bearing
deposits 0.20% 0.29%
Effect of leverage -0.03% -0.06%
----- -----
Net interest
margin, tax-
equivalent 3.38% 3.43%
Less tax equivalent
adjustment:
Investments 0.05% 0.06%
Loans 0.02% 0.02%
---- ----
Reported book net
interest margin 3.61% 3.35%
First M&F Corporation
Notes to Financial Schedules
(a) Return on equity is calculated
as: (Net income attributable to
First M&F Corp) divided by (Total
equity)
Return on common equity is calculated
as: (Net income attributable to
First M&F Corp minus preferred
dividends) divided by
(Total First M&F Corp equity minus
preferred stock)
(b) Tangible equity to tangible
assets is calculated as: (Total
equity minus goodwill and other
intangible assets) divided by
(Total assets minus goodwill and
other intangible assets)
Tangible common equity to tangible
assets is calculated as: (Total
First M&F Corp equity minus
preferred stock minus
goodwill and other intangible assets)
divided by (Total assets minus
goodwill and other intangible
assets)
(c) Efficiency ratio is calculated
as: (Noninterest expense) divided by
(Tax-equivalent net interest income
plus
noninterest revenues)
Note 1: Other comprehensive income
does not include year-end actuarial
adjustments for the Company's
defined benefit
pension plan. When the calculations
have been completed, an adjustment
will be made to the pension
liability, deferred
tax assets and other comprehensive
income.
Note 2: On September 29, 2010 the
Company issued 30,000 shares of
Class B, Series CD, par value $1,000
preferred stock
to the U.S. Treasury to acquire its
30,000 shares outstanding of Class
B, Series A, par value $1,000
preferred stock. The
Series CD preferred stock issued has
a dividend rate of 2.00%. The
estimated fair value of the Series
CD preferred stock as
of September 29, 2010 was
$16,159,000. The Series A preferred
stock carried a dividend rate of
5.00% and had a book value
of $29,026,000 as of September 29,
2010. The acquisition of the Series
A shares in exchange for the Series
CD shares resulted
in a gain of $12,867,000 which was
recorded as a credit to retained
earnings.
SOURCE First M&F Corp.
