FIRST M & F CORPORATION 
By KOSCIUSKO, Miss., Oct. 20, 2011 /PRNewswire/ -- First M&F Corp. (Nasdaq: FMFC) reported today a net profit for the quarter ended September 30, 2011 of $1.330 million compared to $1.245 million at September 30, 2010. Net income for the quarter allocated to common shareholders was $.878 million or $0.10 basic and diluted earnings per share, compared to September 30, 2010 common earnings of $13.565 million and $1.49 per share which included a gain on the exchange of preferred stock of $12.867 million. Common net income for the quarter ended September 30, 2011 was $.883 million or $0.10 per share versus the year-ago quarter common net income of $.804 million excluding the gain on exchange, or $.09 basic and diluted earnings per share. Second quarter of 2011 earnings allocated to common shareholders were $.661 million, or $.07 basic and diluted earnings per share.
Hugh Potts, Jr., Chairman and CEO commented, "The overall upward trend in net interest margin over the last year has provided a strong base for a continuing recovery of earnings which improves our capacity to remediate our credit issues. In that vein, the foreclosure and acquisition and then disposition of Other Real Estate are essential ingredients in cleaning up after a real estate collapse and credit cycle such as we've seen since 2008. We have made much progress in that area as reflected by improving credit metrics."
Net Interest Income
Reported net interest income was up 7.57% compared to the third quarter of 2010, with the net interest margin increasing to 3.72% on a tax equivalent basis in the third quarter of 2011 as compared to 3.60% in the third quarter of 2010. The significant contributors to the increase in net interest margin year over year continues to be the improvement in spreads, primarily due to lower cost of funds supplemented by a trend downward in new nonaccrual loans. The net interest margin for the second quarter of 2011 was 3.75% as compared to 3.59% for the first quarter of 2011 and 3.57% for the fourth quarter of 2010. Loan yields fell to 5.81% in the third quarter of 2011 from 5.90% in the third quarter of 2010. Loan yields decreased from the second quarter of 2011 to the third quarter as well as the Company strove to increase loan volumes in the face of tepid demand. Average loans were $1.035 billion for the third quarter of 2011 as compared to $1.053 billion for the second quarter of 2011 and $1.052 billion during the third quarter of 2010. Loans held for investment decreased by $29.6 million in the third quarter of 2011 and fell by $6.7 million in the second quarter.
Deposit costs decreased in the third quarter of 2011 from the second quarter of 2011 and from the third quarter of 2010, in response to the continuing low rate environment. Deposit costs were 1.10% in the third quarter of 2011 as compared to 1.60% in the third quarter of 2010. Deposits fell by $40.6 million during the third quarter of 2011 consistent with historic seasonal fluctuations but have grown $62.0 million since the third quarter of 2010. Management plans to continue to focus on core deposit growth for 2011 to encourage relationship-driven deposits as a stable source of funding.
Loans held for investment as a percentage of assets were 64.0% at September 30, 2011 as compared to 67.7% at September 30, 2010 and 66.1% at December 31, 2010. Loans held for investment fell by 3.06% since the third quarter of 2010 while deposits grew by 4.69%.
Non-interest Income
Non-interest income, excluding securities transactions and impairment of investments, for the third quarter of 2011 improved by 3.77% compared to the third quarter of 2010, with deposit-related income up 3.50%. Insurance agency commissions were flat quarter over quarter.
A major part of non-interest income is from deposit sources. Deposit revenues for the quarter benefitted from an August, 2011 overdraft fee increase of $6.00 and also continue to be supported by debit card fee income, which was up 15.7% in the third quarter of 2011 compared to the third quarter of 2010, while overdraft fee income was virtually flat.
Non-interest Expenses
Non-interest expenses were up by 7.87% in the third quarter of 2011 as compared to the third quarter of 2010 largely due to higher foreclosed property expenses. Mr. Potts commented, "We initiated a cost savings and efficiency project in the third quarter, Project McKinley, designed to position the bank to better deal with the continuing low-growth economy. The initiative involves the closure or sale by year-end of six branches with commensurate staff reductions throughout the bank. McKinley is an appropriate reflection of changes in customer delivery channel preferences as well as the general economic outlook. The positive overhead effects will be seen in 2012."
Credit Quality
Annualized net loan charge-offs as a percent of average loans for the third quarter of 2011 were 2.03% as compared to 0.19% for the same period in 2010. Net charge-offs totaled $5.274 million for the quarter versus $.504 million a year ago and $.518 million in the second quarter of 2011. Non-accrual and 90-day past due loans as a percent of total loans were 2.61% at the end of the third quarter of 2011 as compared to 3.61% at the end of the 2010 quarter. The allowance for loan losses as a percentage of loans held for investment was 1.59% at September 30, 2011 as compared to 1.92% at September 30, 2010. The provision for loan losses grew slightly to $2.580 million in the third quarter of 2011 from $2.280 million in the third quarter of 2010. Mr. Potts commented, "Virtually every credit trend we measure is moving in a positive direction in spite of the sluggish economy. Although net charge-offs are up versus the year ago quarter, year-to-date net charge-offs since 2009 continue to fall."
Balance Sheet
Total assets at September 30, 2011 were $1.587 billion as compared to $1.604 billion at the end of 2010 and $1.547 billion at September 30, 2010. Total loans held for investment were $1.015 billion compared to $1.060 billion at the end of 2010 and $1.047 billion at September 30, 2010. Deposits were $1.384 billion compared to $1.375 billion at the end of 2010 and $1.322 billion at September 30, 2010. Total capital was $110.8 million or $10.23 in book value per common share at September 30, 2011.
In closing, Mr. Potts said, "Much of the business and retail community continues to mark time awaiting a positive shift in public policy toward a less restrictive, less expensive and more market accommodative business climate. We are not, however, content to just "wait and see" what develops. Our specialty lending niches, church and timber lending as well as our SBA credit program, recently named in the top five SBA lenders in Mississippi, are beginning to gain traction. We believe they will bear fruit and add value during the coming periods."
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 ForwardLooking Statements
This document includes certain "forwardlooking 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)
September 30 December 31 September 30
2011 2010 2010
---- ---- ----
Cash and due from banks $42,545 $45,099 $36,232
Interest bearing bank
balances 66,026 72,103 32,904
Federal funds sold 25,000 25,000 25,000
Securities available for sale
(cost of
$301,274, $274,421 and $265,788) 307,167 276,929 272,467
Loans held for sale 11,676 6,242 3,893
Loans 1,014,966 1,060,146 1,047,013
Allowance for loan losses 16,111 16,025 20,077
------ ------ ------
Net loans 998,855 1,044,121 1,026,936
Bank premises and equipment 40,382 40,696 41,143
Accrued interest receivable 5,915 6,380 6,617
Other real estate 32,722 31,125 38,631
Other intangible assets 4,693 5,013 5,119
Other assets 51,886 51,256 57,693
------ ------ ------
Total assets $1,586,867 $1,603,964 $1,546,635
========== ========== ==========
Non-interest bearing deposits $222,042 $212,199 $220,556
Interest bearing deposits 1,161,817 1,163,213 1,101,323
--------- --------- ---------
Total deposits 1,383,859 1,375,412 1,321,879
Federal funds and repurchase
agreements 8,374 33,481 25,685
Other borrowings 44,315 50,416 50,141
Junior subordinated debt 30,928 30,928 30,928
Accrued interest payable 1,237 1,470 1,554
Other liabilities 7,374 5,192 7,691
----- ----- -----
Total liabilities 1,476,087 1,496,899 1,437,878
Preferred stock, 30,000
shares issued and
outstanding 17,260 16,390 16,164
Common stock, 9,142,717,
9,106,803 and 9,097,522
shares issued & outstanding 45,714 45,534 45,488
Additional paid-in capital 31,917 31,883 31,893
Nonvested restricted stock
awards 647 784 756
Retained earnings 14,016 12,225 12,050
Accumulated other
comprehensive income 1,226 249 2,406
----- --- -----
Total First M&F Corp equity 110,780 107,065 108,757
Noncontrolling interests in
subsidiaries - - -
--- --- ---
Total equity 110,780 107,065 108,757
------- ------- -------
Total liabilities & equity $1,586,867 $1,603,964 $1,546,635
========== ========== ==========
First M&F
Corporation and
Subsidiary
Condensed
Consolidated
Statements of
Income
(Unaudited)
(In thousands,
except share
data)
Three Months Ended Nine Months Ended
September 30 September 30
2011 2010 2011 2010
---- ---- ---- ----
Interest and
fees on loans $15,063 $15,532 $45,719 $46,607
Interest on
loans held for
sale 53 46 121 170
Taxable
investments 1,746 1,863 5,448 5,940
Tax exempt
investments 318 374 934 1,196
Federal funds
sold 16 17 47 67
Interest bearing
bank balances 43 23 141 109
--- --- --- ---
Total interest
income 17,239 17,855 52,410 54,089
Interest on
deposits 3,234 4,471 10,604 14,632
Interest on fed
funds and
repurchase
agreements 8 15 30 49
Interest on
other
borrowings 479 576 1,512 2,488
Interest on
subordinated
debt 293 499 1,043 1,487
--- --- ----- -----
Total interest
expense 4,014 5,561 13,189 18,656
Net interest
income 13,225 12,294 39,221 35,433
Provision for
possible loan
losses 2,580 2,280 7,440 6,940
----- ----- ----- -----
Net interest
income after
loan loss 10,645 10,014 31,781 28,493
Service charges
on deposits 2,721 2,629 7,652 7,675
Mortgage banking
income 524 330 1,203 1,142
Agency
commission
income 1,010 1,112 2,838 2,945
Fiduciary and
brokerage
income 146 141 431 406
Other income 558 567 1,969 2,084
Other-than-
temporary
impairment on
securities, net
of
$72, $29, $215 and $32 recognized in other
comprehensive
income (200) (37) (581) (403)
Gains on AFS
securities 460 4 2,150 1,716
--- --- ----- -----
Total
noninterest
income 5,219 4,746 15,662 15,565
Salaries and
employee
benefits 7,457 6,853 21,570 20,571
Net occupancy
expense 992 1,023 2,932 2,969
Equipment
expenses 476 554 1,392 1,859
Software and
processing
expenses 368 405 1,162 1,227
FDIC insurance
assessments 545 808 1,896 2,493
Foreclosed
property
expenses 1,483 166 5,304 1,041
Intangible asset
amortization
and impairment 106 107 320 320
Other expenses 2,716 3,195 8,681 9,382
----- ----- ----- -----
Total
noninterest
expense 14,143 13,111 43,257 39,862
Net income
before taxes 1,721 1,649 4,186 4,196
Income tax
expense 391 407 800 828
--- --- --- ---
Net income 1,330 1,242 3,386 3,368
Net loss
attributable to
noncontrolling
interests - (3) - (2)
--- --- --- ---
Net income
attributable to
First M&F Corp $1,330 $1,245 $3,386 $3,370
====== ====== ====== ======
Earnings Per
Common Share
Calculations:
Net income
attributable to
First M&F Corp $1,330 $1,245 $3,386 $3,370
Dividends and
accretion on
preferred stock (447) (441) (1,319) (1,317)
Gain on exchange
of preferred
stock (Note 1) - 12,867 - 12,867
--- ------ --- ------
Net income
applicable to
common stock 883 13,671 2,067 14,920
Earnings
attributable to
participating
securities 5 106 13 116
Net income
allocated to
common
shareholders $878 $13,565 $2,054 $14,804
==== ======= ====== =======
Weighted average
shares (basic) 9,133,481 9,087,769 9,120,370 9,075,554
Weighted average
shares
(diluted) 9,133,481 9,087,769 9,120,370 9,075,554
Basic earnings
per share $0.10 $1.49 $0.23 $1.63
Diluted earnings
per share $0.10 $1.49 $0.23 $1.63
===== ===== ===== =====
First M&F
Corporation
Financial
Highlights
YTD
YTD Ended YTD Ended YTD Ended Ended
September December September December
30 31 30 31
2011 2010 2010 2009
---- ---- ---- ----
Performance
Ratios:
Return on assets
(annualized) 0.28% 0.25% 0.28% -3.63%
Return on equity
(annualized) (a) 4.15% 3.74% 4.23% -42.97%
Return on common
equity
(annualized) (a) 3.00% 2.87% 3.54% -53.73%
Efficiency ratio
(c) 77.85% 78.47% 76.86% 89.87%
Net interest
margin
(annualized, tax-
equivalent) 3.69% 3.43% 3.38% 3.29%
Net charge-offs
to average loans
(annualized) 0.94% 1.65% 1.39% 4.50%
Nonaccrual loans
to total loans 2.59% 3.11% 3.53% 4.17%
90 day accruing
loans to total
loans 0.02% 0.09% 0.08% 0.23%
QTD
QTD Ended QTD Ended QTD Ended Ended
September December
30 June 30 March 31 31
2011 2011 2011 2010
---- ---- ---- ----
Per Common Share
(diluted):
Net income $0.10 $0.07 $0.06 $0.03
Cash dividends
paid 0.01 0.01 0.01 0.01
Book value 10.23 10.20 9.98 9.96
Closing stock
price 3.16 3.78 4.08 3.74
Loan Portfolio
Composition: (in
thousands)
Commercial,
financial and
agricultural $143,133 $152,063 $137,620 $133,226
Non-residential
real estate 603,904 621,546 642,372 646,731
Residential real
estate 185,564 187,932 189,290 195,184
Home equity loans 38,320 38,891 38,622 40,305
Consumer loans 44,045 44,163 43,357 44,700
------ ------ ------ ------
Total loans $1,014,966 $1,044,595 $1,051,261 $1,060,146
Deposit
Composition: (in
thousands)
Noninterest-
bearing deposits $222,042 $243,626 $208,457 $212,199
NOW deposits 378,409 397,281 411,898 364,209
MMDA deposits 179,138 174,127 161,959 166,455
Savings deposits 118,814 117,830 116,714 114,769
Core certificates
of deposit under
$100,000 250,130 255,847 261,087 268,272
Core certificates
of deposit
$100,000 and over 216,655 217,540 222,617 234,500
Brokered
certificates of
deposit under
$100,000 4,686 4,611 2,880 3,074
Brokered
certificates of
deposit $100,000
and over 13,985 13,637 14,464 11,934
------ ------ ------ ------
Total deposits $1,383,859 $1,424,499 $1,400,076 $1,375,412
Nonperforming
Assets: (in
thousands)
Nonaccrual loans $26,622 $32,800 $37,407 $33,127
Other real estate 32,722 30,650 29,660 31,125
Investment
securities 509 693 639 698
--- --- --- ---
Total
nonperforming
assets $59,853 $64,143 $67,706 $64,950
Accruing loans
past due 90 days
or more $252 $784 $338 $951
Restructured loans
(accruing) $19,712 $22,988 $16,320 $18,052
Total nonaccrual
loan to loans 2.59% 3.13% 3.55% 3.11%
Total
nonperforming
credit assets to
loans and ORE 5.60% 5.89% 6.19% 5.85%
Total
nonperforming
assets to assets
ratio 3.77% 3.95% 4.21% 4.05%
Allowance For Loan
Loss Activity:
(in thousands)
Beginning balance $18,805 $17,043 $16,025 $20,077
Provision for loan
loss 2,580 2,280 2,580 2,280
Charge-offs (5,419) (1,442) (2,147) (6,536)
Recoveries 145 924 585 204
--- --- --- ---
Ending balance $16,111 $18,805 $17,043 $16,025
First M&F
Corporation
Financial
Highlights
QTD
QTD Ended QTD Ended QTD Ended Ended
September December
30 June 30 March 31 31
2011 2011 2011 2010
---- ---- ---- ----
Condensed Income
Statements: (in
thousands)
Interest income $17,239 $17,602 $17,569 $17,603
Interest expense 4,014 4,331 4,844 5,235
----- ----- ----- -----
Net interest
income 13,225 13,271 12,725 12,368
Provision for loan
losses 2,580 2,280 2,580 2,280
Noninterest
revenues 5,219 4,712 5,731 4,956
Noninterest
expenses 14,143 14,303 14,811 14,628
------ ------ ------ ------
Net income before
taxes 1,721 1,400 1,065 416
Income tax expense
(benefit) 391 294 115 (226)
Noncontrolling
interest - - - 1
--- --- --- ---
Net income $1,330 $1,106 $950 $641
Preferred
dividends (447) (440) (432) (375)
Gain on exchange
of preferred
stock - - - -
--- --- --- ---
Net income
applicable to
common stock 883 666 518 266
Earnings (loss)
attributable to
participating
securities 5 5 3 (1)
--- --- --- ---
Net income
allocated to
common
shareholders $878 $661 $515 $267
Tax-equivalent
net interest
income $13,449 $13,495 $12,955 $12,624
Selected Average
Balances: (in
thousands)
Assets $1,592,030 $1,598,871 $1,622,363 $1,574,426
Loans held for
investment 1,028,372 1,050,136 1,056,903 1,041,453
Earning assets 1,433,189 1,444,677 1,463,032 1,404,766
Deposits 1,390,835 1,396,331 1,403,733 1,341,738
Equity 110,412 108,911 107,633 109,110
Common equity 93,307 92,096 91,102 90,612
Selected Ratios:
Return on average
assets
(annualized) 0.33% 0.28% 0.24% 0.16%
Return on average
equity
(annualized) (a) 4.78% 4.07% 3.58% 2.33%
Return on average
common equity
(annualized) (a) 3.76% 2.90% 2.31% 1.16%
Average equity to
average assets 6.94% 6.81% 6.63% 6.93%
Tangible equity to
tangible assets
(b) 6.71% 6.50% 6.41% 6.38%
Tangible common
equity to
tangible assets
(b) 5.61% 5.46% 5.37% 5.36%
Net interest
margin
(annualized, tax-
equivalent) 3.72% 3.75% 3.59% 3.57%
Efficiency ratio
(c) 75.76% 78.56% 79.26% 83.22%
Net charge-offs
to average loans
(annualized) 2.03% 0.20% 0.60% 2.41%
Nonaccrual loans
to total loans 2.59% 3.13% 3.55% 3.11%
90 day accruing
loans to total
loans 0.02% 0.07% 0.03% 0.09%
Price to book 0.31x 0.37x 0.41x 0.38x
Price to earnings 7.90x 13.50x 17.00x 31.17x
First M&F
Corporation
Financial
Highlights
Historical Earnings
Trends: Earnings Earnings
Applicable Allocated
to to
Common Common
Earnings Stock Shareholders EPS
(in (in (in
thousands) thousands) thousands) (diluted)
----------- ----------- ----------- ---------
3Q 2011 $1,330 $883 $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)
3Q 2009 (136) (571) (580) (0.06)
Non- Non-
Revenue Statistics: interest interest
Revenues Revenues
Revenues to to
Ttl. Avg.
Per FTE Revenues Assets
(thousands) (percent) (percent)
----------- --------- ---------
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%
3Q 2009 34.4 29.81% 1.30%
Non-
Expense Statistics: interest
Expense
to Efficiency
Avg.
Assets Ratio
(percent)
(percent) (c)
--------- ---------
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%
3Q 2009 3.41% 78.34%
First M&F Corporation
Average Balance
Sheets/Yields and
Costs (tax-
equivalent)
(In thousands with
yields and costs
annualized) QTD September 2011 QTD September 2010
------------------ ------------------
Average Average
Yield/ Yield/
Balance Cost Balance Cost
------- ------- ------- -------
Interest bearing bank
balances $74,683 0.23% $29,023 0.31%
Federal funds sold 25,000 0.25% 28,522 0.24%
Taxable investments
(amortized cost) 265,438 2.61% 235,439 3.14%
Tax-exempt
investments
(amortized cost) 33,294 6.04% 39,743 5.95%
Loans held for sale 6,402 3.27% 5,320 3.43%
Loans held for
investment 1,028,372 5.82% 1,046,242 5.91%
--------- ---- --------- ----
Total earning assets 1,433,189 4.83% 1,384,289 5.19%
Non-earning assets 158,841 169,126
------- -------
Total average assets $1,592,030 $1,553,415
NOW $383,104 0.51% $312,167 1.04%
MMDA 175,471 0.65% 149,972 1.11%
Savings 118,273 1.09% 115,332 1.27%
Certificates of
Deposit 490,297 1.72% 528,929 2.15%
Short-term borrowings 6,319 0.48% 17,583 0.33%
Other borrowings 75,641 4.05% 84,991 5.01%
------ ---- ------ ----
Total interest bearing
liabilities 1,249,105 1.27% 1,208,974 1.82%
Non-interest bearing
deposits 223,689 225,223
Non-interest bearing
liabilities 8,824 10,683
Preferred equity 17,105 28,988
Common equity 93,307 79,547
------ ------
Total average
liabilities and
equity $1,592,030 $1,553,415
Net interest spread 3.56% 3.37%
Effect of non-
interest bearing
deposits 0.19% 0.29%
Effect of leverage -0.03% -0.06%
----- -----
Net interest margin,
tax-equivalent 3.72% 3.60%
Less tax equivalent
adjustment:
Investments 0.05% 0.06%
Loans 0.01% 0.02%
---- ----
Reported book net
interest margin 3.66% 3.52%
First M&F Corporation
Average Balance
Sheets/Yields and
Costs (tax-
equivalent)
(In thousands with
yields and costs
annualized) YTD September 2011 YTD September 2010
------------------ ------------------
Average Average
Yield/ Yield/
Balance Cost Balance Cost
------- ------- ------- -------
Interest bearing bank
balances $79,876 0.24% $59,409 0.24%
Federal funds sold 25,000 0.25% 39,228 0.23%
Taxable investments
(amortized cost) 259,198 2.81% 238,443 3.33%
Tax-exempt
investments
(amortized cost) 33,211 6.00% 42,635 5.98%
Loans held for sale 4,539 3.55% 7,707 2.95%
Loans held for
investment 1,045,033 5.86% 1,046,819 5.97%
--------- ---- --------- ----
Total earning assets 1,446,857 4.91% 1,434,241 5.12%
Non-earning assets 157,453 162,266
------- -------
Total average assets $1,604,310 $1,596,507
NOW $395,544 0.68% $321,618 1.06%
MMDA 168,287 0.75% 146,859 1.11%
Savings 117,299 1.14% 113,870 1.29%
Certificates of
Deposit 499,313 1.78% 555,037 2.35%
Short-term borrowings 12,893 0.31% 14,029 0.46%
Other borrowings 77,764 4.39% 109,245 4.86%
------ ---- ------- ----
Total interest bearing
liabilities 1,271,100 1.39% 1,260,658 1.98%
Non-interest bearing
deposits 216,475 220,272
Non-interest bearing
liabilities 7,740 9,066
Preferred equity 16,819 28,929
Common equity 92,176 77,582
------ ------
Total average
liabilities and
equity $1,604,310 $1,596,507
Net interest spread 3.52% 3.14%
Effect of non-
interest bearing
deposits 0.20% 0.29%
Effect of leverage -0.03% -0.05%
----- -----
Net interest margin,
tax-equivalent 3.69% 3.38%
Less tax equivalent
adjustment:
Investments 0.05% 0.07%
Loans 0.02% 0.01%
---- ----
Reported book net
interest margin 3.62% 3.30%
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: 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.
