FIRST M & F CORPORATION 
By KOSCIUSKO, Miss., Aug. 7, 2013 /PRNewswire/ -- First M&F Corp. (NASDAQ: FMFC) revised net income for the quarter ended June 30, 2013 to $222 thousand from $2.205 million reported in the July 19 earnings announcement. Earnings per share after preferred stock dividends were revised to a loss of $.03 basic and diluted per share from the previously reported net profit of $.18 basic and $.17 diluted per share. Net income for the year was revised to $2.820 million or $.19 basic and diluted per share from the previously reported $4.803 million or $.40 basic and $.39 diluted per share.
As a result of a third quarter review of transactions and events, management determined it appropriate to record a loss on the sale of a foreclosed property and an other-than-temporary impairment of certain securities in the second quarter of 2013 rather than the third quarter. The foreclosed property sale resulted in a $1.125 million pre-tax loss. The other-than-temporary impairment, related to the Company's investments in certain collateralized debt obligations that were sold during the third quarter, resulted in a pre-tax charge of $2.038 million. The impairment charge effectively wrote the amortized cost basis of the securities down to their June 30 fair value of $1.070 million. The subsequent third quarter sale of the securities resulted in a gain of $375 thousand, resulting in net losses of $1.663 million on the securities for the year.
Hugh Potts, Jr., Chairman and CEO commented, "We are making these revisions after a detailed review of the accounting and reporting of certain transactions, identified in the third quarter but which had second quarter effects. We have made great strides in reducing our non-performing assets and improving the quality of our balance sheet, especially in light of our anticipated merger with Renasant. These transactions will not have a material impact on the combined company after the merger is completed. All indications are that the pending merger with Renasant will be completed during the third quarter."
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 26 communities in Mississippi, Alabama, and Tennessee.
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)
June 30 December 31 June 30
2013 2012 2012
---- ---- ----
Cash and
due from
banks $51,293 $54,811 $37,147
Interest
bearing
bank
balances 133,333 94,313 20,708
Federal
funds
sold 10,000 10,000 6,750
Securities
available
for sale
(cost of
$275,550, $341,273 and $371,424) 273,553 348,562 377,670
Loans held
for sale 2,614 21,014 22,291
Loans 967,013 975,473 982,596
Allowance
for loan
losses 19,431 17,492 15,310
------ ------ ------
Net loans 947,582 957,981 967,286
Bank
premises
and
equipment 36,438 37,264 37,529
Accrued
interest
receivable 4,777 5,683 6,060
Other real
estate 19,721 25,970 31,077
Other
intangible
assets 3,946 4,159 4,373
Other
assets 44,548 41,926 50,605
------ ------ ------
Total
assets $1,527,805 $1,601,683 $1,561,496
========== ========== ==========
Non-
interest
bearing
deposits $304,734 $276,295 $236,145
Interest
bearing
deposits 1,061,474 1,126,380 1,125,193
--------- --------- ---------
Total
deposits 1,366,208 1,402,675 1,361,338
Federal
funds and
repurchase
agreements 1,994 3,720 3,224
Other
borrowings 2,792 36,007 40,333
Junior
subordinated
debt 30,928 30,928 30,928
Accrued
interest
payable 482 661 844
Other
liabilities 8,828 9,249 10,912
----- ----- ------
Total
liabilities 1,411,232 1,483,240 1,447,579
Preferred
stock,
30,000
shares
issued
and
outstanding 19,569 18,865 18,198
Common
stock,
9,236,479,
9,230,799
and
9,172,098
shares
issued &
outstanding 46,182 46,154 45,860
Additional
paid-in
capital 32,515 32,469 31,890
Nonvested
restricted
stock
awards 405 244 836
Retained
earnings 20,876 19,180 16,699
Accumulated
other
comprehensive
income
(loss) (2,974) 1,531 434
------ ----- ---
Total
equity 116,573 118,443 113,917
------- ------- -------
Total
liabilities
& equity $1,527,805 $1,601,683 $1,561,496
========== ========== ==========
First M&F Corporation and Subsidiary
Condensed Consolidated Statements of Income (Unaudited)
(In thousands, except share data)
Three Months Ended June
30 Six Months Ended June 30
2013 2012 2013 2012
---- ---- ---- ----
Interest and fees on loans $12,652 $13,741 $25,350 $27,899
Interest on loans held for sale 25 244 81 417
Taxable investments 1,338 1,563 2,569 3,053
Tax exempt investments 348 319 700 637
Federal funds sold 6 11 12 26
Interest bearing bank balances 40 28 98 79
--- --- --- ---
Total interest income 14,409 15,906 28,810 32,111
Interest on deposits 1,452 2,233 2,968 4,746
Interest on fed funds and repurchase agreements 2 5 6 11
Interest on other borrowings 329 437 700 888
Interest on subordinated debt 297 315 580 586
--- --- --- ---
Total interest expense 2,080 2,990 4,254 6,231
Net interest income 12,329 12,916 24,556 25,880
Provision for possible loan losses 1,380 2,280 2,660 4,560
----- ----- ----- -----
Net interest income after loan loss 10,949 10,636 21,896 21,320
Service charges on deposits 2,437 2,548 4,808 5,005
Mortgage banking income 619 1,806 1,910 2,373
Agency commission income 880 848 1,700 1,677
Fiduciary and brokerage income 203 163 363 303
Other income 618 673 1,662 1,510
Loss on extinguishment of debt (1,511) - (1,511) -
Other-than-temporary impairment on securities, net of
$0, $4, $0, and $4 reclassified to other
comprehensive income (2,038) (4) (2,038) (4)
Gains on AFS securities 1,378 1 1,394 592
----- --- ----- ---
Total noninterest income 2,586 6,035 8,288 11,456
Salaries and employee benefits 6,377 6,737 12,739 13,600
Net occupancy expense 819 932 1,684 1,840
Equipment expenses 390 423 822 886
Software and processing expenses 555 346 911 708
FDIC insurance assessments 323 553 671 1,067
Foreclosed property expenses 2,051 1,282 2,639 2,738
Intangible asset amortization and impairment 107 106 213 213
Other expenses 3,042 3,940 6,924 7,253
----- ----- ----- -----
Total noninterest expense 13,664 14,319 26,603 28,305
Net income before taxes (129) 2,352 3,581 4,471
Income tax expense (351) 599 761 1,111
---- --- --- -----
Net income $222 $1,753 $2,820 $3,360
==== ====== ====== ======
Earnings Per Common Share Calculations:
Net income $222 $1,753 $2,820 $3,360
Dividends and accretion on preferred stock (507) (471) (1,004) (934)
---- ---- ------ ----
Net income applicable to common stock (285) 1,282 1,816 2,426
Earnings attributable to participating securities (12) 56 69 61
Net income allocated to common shareholders $(273) $1,226 $1,747 $2,365
===== ====== ====== ======
Weighted average shares (basic) 9,234,452 9,164,576 9,232,963 9,160,526
Weighted average shares (diluted) 9,234,452 9,164,576 9,403,561 9,160,526
Basic earnings per share $(0.03) $0.14 $0.19 $0.26
Diluted earnings per share $(0.03) $0.14 $0.19 $0.26
====== ===== ===== =====
First M&F Corporation
Financial Highlights
YTD Ended YTD Ended YTD Ended YTD Ended
June 30 December 31 June 30 December 31
2013 2012 2012 2011
---- ---- ---- ----
Performance Ratios:
Return on assets (annualized) 0.37% 0.44% 0.42% 0.27%
Return on equity (annualized) (a) 4.73% 6.12% 6.06% 4.00%
Return on common equity (annualized) (a) 3.63% 5.30% 5.21% 2.81%
Efficiency ratio (c) 79.88% 74.98% 74.94% 78.47%
Net interest margin (annualized, tax-equivalent) 3.55% 3.67% 3.69% 3.68%
Net charge-offs to average loans (annualized) 0.15% 0.61% 0.86% 1.05%
Nonaccrual loans to total loans 0.62% 0.75% 0.64% 1.68%
90 day accruing loans to total loans 0.02% 0.03% 0.15% 0.06%
QTD Ended QTD Ended QTD Ended QTD Ended
June 30 March 31 December 31 September 30
2013 2013 2012 2012
---- ---- ---- ----
Per Common Share (diluted):
Net income $(0.03) $0.22 $0.14 $0.14
Cash dividends paid 0.01 0.01 0.01 0.01
Book value 10.50 11.00 10.79 10.69
Closing stock price 15.81 14.15 6.98 7.42
Loan Portfolio Composition: (in thousands)
Commercial, financial and agricultural $145,411 $150,125 $153,550 $155,890
Non-residential real estate 540,694 557,453 542,859 554,475
Residential real estate 206,490 203,260 200,992 197,629
Home equity loans 38,340 39,047 37,736 37,196
Consumer loans 36,078 37,772 40,336 42,137
------ ------ ------ ------
Total loans $967,013 $987,657 $975,473 $987,327
Deposit Composition: (in thousands)
Noninterest-bearing deposits $304,734 $252,453 $276,295 $233,684
NOW deposits 404,457 419,376 423,461 386,371
MMDA deposits 200,839 207,931 214,091 216,620
Savings deposits 119,583 119,728 118,123 117,404
Core certificates of deposit under $100,000 176,722 182,245 188,733 201,361
Core certificates of deposit $100,000 and over 148,734 159,913 165,979 177,084
Brokered certificates of deposit under $100,000 3,305 3,295 3,549 3,417
Brokered certificates of deposit $100,000 and over 7,834 7,834 12,444 13,533
----- ----- ------ ------
Total deposits $1,366,208 $1,352,775 $1,402,675 $1,349,474
Nonperforming Assets: (in thousands)
Nonaccrual loans $6,036 $7,277 $7,444 $6,219
Other real estate 19,721 24,820 25,970 28,002
Investment securities 679 604 733 644
--- --- --- ---
Total nonperforming assets $26,436 $32,701 $34,147 $34,865
Accruing loans past due 90 days or more $186 $268 $321 $408
Restructured loans (accruing) $6,209 $21,657 $21,800 $16,784
Total nonaccrual loan to loans 0.62% 0.72% 0.75% 0.62%
Total nonperforming credit assets to loans and ORE 2.60% 3.12% 3.27% 3.29%
Total nonperforming assets to assets ratio 1.73% 2.11% 2.13% 2.24%
Allowance For Loan Loss Activity: (in thousands)
Beginning balance $18,269 $17,492 $16,656 $15,310
Provision for loan loss 1,380 1,280 1,980 1,980
Charge-offs (569) (747) (1,584) (1,035)
Recoveries 351 244 440 401
--- --- --- ---
Ending balance $19,431 $18,269 $17,492 $16,656
First M&F Corporation
Financial Highlights
QTD Ended QTD Ended QTD Ended QTD Ended
June 30 March 31 December 31 September 30
2013 2013 2012 2012
---- ---- ---- ----
Condensed Income Statements: (in thousands)
Interest income $14,409 $14,401 $15,186 $15,625
Interest expense 2,080 2,174 2,545 2,753
----- ----- ----- -----
Net interest income 12,329 12,227 12,641 12,872
Provision for loan losses 1,380 1,280 1,980 1,980
Noninterest revenues 2,586 5,702 5,735 5,607
Noninterest expenses 13,664 12,939 13,913 14,060
------ ------ ------ ------
Net income before taxes (129) 3,710 2,483 2,439
Income tax expense (351) 1,112 652 645
---- ----- --- ---
Net income $222 $2,598 $1,831 $1,794
Preferred dividends (507) (497) (488) (479)
---- ---- ---- ----
Net income applicable to common stock (285) 2,101 1,343 1,315
Earnings attributable to participating securities (12) 81 53 51
--- --- --- ---
Net income allocated to common shareholders $(273) $2,020 $1,290 $1,264
Tax-equivalent net interest income $12,557 $12,458 $12,859 $13,088
Selected Average Balances: (in thousands)
Assets $1,543,020 $1,570,994 $1,585,467 $1,546,416
Loans held for investment 973,160 977,198 982,894 984,282
Earning assets 1,408,023 1,431,054 1,436,348 1,396,824
Deposits 1,345,703 1,369,784 1,381,667 1,343,559
Equity 121,328 119,209 117,529 115,544
Common equity 101,940 100,171 98,837 97,186
Selected Ratios:
Return on average assets (annualized) 0.06% 0.67% 0.46% 0.46%
Return on average equity (annualized) (a) 0.73% 8.84% 6.19% 6.18%
Return on average common equity (annualized) (a) -1.12% 8.51% 5.40% 5.38%
Average equity to average assets 7.86% 7.59% 7.41% 7.47%
Tangible equity to tangible assets (b) 7.39% 7.55% 7.15% 7.28%
Tangible common equity to tangible assets (b) 6.11% 6.31% 5.97% 6.08%
Net interest margin (annualized, tax-equivalent) 3.58% 3.53% 3.56% 3.73%
Efficiency ratio (c) 90.24% 71.25% 74.83% 75.21%
Net charge-offs to average loans (annualized) 0.09% 0.21% 0.46% 0.26%
Nonaccrual loans to total loans 0.62% 0.72% 0.75% 0.62%
90 day accruing loans to total loans 0.02% 0.03% 0.03% 0.04%
Price to book 1.51x 1.29x 0.65x 0.69x
Price to earnings N/A 16.08x 12.46x 13.25x
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)
------------- ------------- ------------- --------
2Q
2013 $222 $(285) $(273) $(0.03)
1Q
2013 2,598 2,101 2,020 0.22
4Q
2012 1,831 1,343 1,290 0.14
3Q
2012 1,794 1,315 1,264 0.14
2Q
2012 1,753 1,282 1,226 0.14
1Q
2012 1,607 1,144 1,139 0.12
4Q
2011 987 533 530 0.05
3Q
2011 1,330 882 878 0.10
2Q
2011 1,106 666 661 0.07
Revenue
Statistics: Non-interest Non-interest
Revenues Revenues to Revenues to
Per FTE Ttl. Revenues Avg. Assets
(thousands) (percent) (percent)
---------- -------- --------
2Q
2013 $35.6 17.07% 0.67%
1Q
2013 40.4 31.40% 1.47%
4Q
2012 40.2 30.85% 1.44%
3Q
2012 39.9 29.99% 1.44%
2Q
2012 41.1 31.48% 1.54%
1Q
2012 40.5 29.14% 1.36%
4Q
2011 39.0 31.48% 1.50%
3Q
2011 36.6 27.96% 1.30%
2Q
2011 36.6 25.88% 1.18%
Expense
Statistics: Non-interest
Expense to Efficiency
Avg. Assets Ratio
(percent) (percent) (c)
-------- -------------
2Q
2013 3.55% 90.24%
1Q
2013 3.34% 71.25%
4Q
2012 3.49% 74.83%
3Q
2012 3.62% 75.21%
2Q
2012 3.65% 74.70%
1Q
2012 3.50% 75.18%
4Q
2011 3.82% 80.29%
3Q
2011 3.52% 75.76%
2Q
2011 3.59% 78.56%
First M&F Corporation
Average Balance Sheets/Yields and Costs (tax-equivalent)
(In thousands with yields and costs annualized) QTD June 2013 QTD June 2012
------------- -------------
Average Average
Balance Yield/Cost Balance Yield/Cost
------- ---------- ------- ----------
Interest bearing bank balances $61,978 0.26% $30,923 0.37%
Federal funds sold 10,000 0.25% 15,082 0.27%
Taxable investments (amortized cost) 313,887 1.71% 333,794 1.88%
Tax-exempt investments (amortized cost) 44,109 5.04% 36,610 5.59%
Loans held for sale 4,889 2.08% 30,416 3.22%
Loans held for investment 973,160 5.22% 973,545 5.69%
------- ---- ------- ----
Total earning assets 1,408,023 4.17% 1,420,370 4.57%
Non-earning assets 134,997 157,050
------- -------
Total average assets $1,543,020 $1,577,420
NOW $411,929 0.23% $404,958 0.43%
MMDA 200,444 0.18% 217,533 0.37%
Savings 120,227 0.76% 121,778 0.95%
Certificates of Deposit 345,147 1.04% 402,703 1.31%
Short-term borrowings 2,862 0.20% 2,974 0.62%
Other borrowings 62,062 4.05% 71,771 4.21%
------ ---- ------ ----
Total interest bearing liabilities 1,142,671 0.73% 1,221,717 0.98%
Non-interest bearing deposits 267,956 232,744
Non-interest bearing liabilities 11,065 10,493
Preferred equity 19,388 18,036
Common equity 101,940 94,430
------- ------
Total average liabilities and equity $1,543,020 $1,577,420
Net interest spread 3.44% 3.59%
Effect of non-interest bearing deposits 0.14% 0.16%
Effect of leverage 0.00% -0.03%
---- -----
Net interest margin, tax-equivalent 3.58% 3.72%
Less tax equivalent adjustment:
Investments 0.06% 0.05%
Loans 0.01% 0.01%
---- ----
Reported book net interest margin 3.51% 3.66%
First M&F Corporation
Average Balance Sheets/Yields and Costs (tax-equivalent)
(In thousands with yields and costs annualized) YTD June 2013 YTD June 2012
------------- -------------
Average Average
Balance Yield/Cost Balance Yield/Cost
------- ---------- ------- ----------
Interest bearing bank balances $69,212 0.29% $55,067 0.29%
Federal funds sold 10,000 0.25% 20,041 0.26%
Taxable investments (amortized cost) 311,642 1.66% 316,708 1.94%
Tax-exempt investments (amortized cost) 44,148 5.10% 35,790 5.71%
Loans held for sale 9,305 1.76% 26,573 3.15%
Loans held for investment 975,168 5.25% 978,672 5.74%
------- ---- ------- ----
Total earning assets 1,419,475 4.16% 1,432,851 4.57%
Non-earning assets 137,455 159,365
------- -------
Total average assets $1,556,930 $1,592,216
NOW $417,417 0.23% $412,108 0.45%
MMDA 206,242 0.18% 222,067 0.45%
Savings 119,477 0.78% 121,307 0.97%
Certificates of Deposit 353,048 1.06% 409,895 1.35%
Short-term borrowings 4,093 0.27% 4,014 0.53%
Other borrowings 64,107 4.03% 72,439 4.09%
------ ---- ------ ----
Total interest bearing liabilities 1,164,384 0.74% 1,241,830 1.01%
Non-interest bearing deposits 261,493 229,177
Non-interest bearing liabilities 10,779 9,603
Preferred equity 19,214 17,878
Common equity 101,060 93,728
------- ------
Total average liabilities and equity $1,556,930 $1,592,216
Net interest spread 3.42% 3.56%
Effect of non-interest bearing deposits 0.14% 0.16%
Effect of leverage -0.01% -0.03%
----- -----
Net interest margin, tax-equivalent 3.55% 3.69%
Less tax equivalent adjustment:
Investments 0.06% 0.05%
Loans 0.01% 0.01%
---- ----
Reported book net interest margin 3.49% 3.63%
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)
SOURCE First M&F Corp.
