The third quarter for Manistique-based
mBank wasn't as bright as some recently, with slightly lower income. The net result for the third quarter was a loss of about $104,000 for Mackinac Financial Corporation, the bank holding company.
The result is in contrast to a net income of $1.5 million in the third quarter of 2009. Bank officials say the loss is a result of higher loan losses than last year at this time -- $1 million versus $700,000 -- as well as a bit of a dip in income,
mBank also reported its results for nine months of the year, which also were down from last year. The net income for the first nine months of 2010 was $934,000, in comparison to $2 million over the same period in 2009. While the bank had significant income from the sales of two branch offices, gains in securities, and a deferred tax benefit, home foreclosures and loan loss provisions balanced the other end of the scale.
However, the bank's core businesses have done well this year, with deposits up by $77 million in 2010, and loan income more than double that of 2009. Kelly George, mBank president and CEO, says the bank is still dealing with nonperforming assets that it has been on a quest to reduce in the past year.
"We will continue our timely and aggressive efforts in the identification and resolution of nonperforming assets," says George. The process is slow, as it often involves the legal system, but stricter borrowing regulations have limited the number of new foreclosures or loan losses.
"(We) are encouraged that we are facing few new problem situations," George says.
For the year to date, 72 percent of the new loan production at the bank has taken place in the Upper Peninsula, of $58 million total in loans. Much of that is due to continued success with rural Small Business Administration and U.S. Department of Agriculture guaranteed loans.
Writer: Sam Eggleston
Source: Kelly George, mBank
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