KOSCIUSKO, Miss., Oct. 19 /PRNewswire-FirstCall/ -- First M&F Corp. reported today that net income for the quarter ended September 30, 2009 was a loss of $.580 million ($580,000) attributable to common shareholders, or a negative $(.06) basic and diluted earnings per share, compared to the second quarter of 2009 loss attributable to common shareholders of $5.498 million, or negative $(.61) per share and a profit of $ 2.210 million, or $.24 basic and diluted earnings per share for the third quarter of 2008. The reported loss included $2.0 million in extraordinary loan loss provisioning. The quarterly results also included $.240 million in losses on the other than temporary impairment of trust preferred securities held in the investment portfolio. Hugh S. Potts, Jr., Chairman and CEO commented, "The third quarter of 2009 reflects a continuation of clear evidence of a recession and credit cycle. No two companies or banks are identical in the timing of their entry into or exit from the downward credit cycle which has not yet run its course. Most indicators reveal an emerging recovery. In looking at First M&F there are some trends which are improving, some trends are relatively stable, and some trends are still bothersome and troubling."
Mr. Potts commented further, "Our operating results have improved from the low point at the end of the first quarter. While the company lost $580 thousand, 6 cents per share, the trend of quarterly losses is dramatically down from the first quarter high and the second quarter. Our extraordinary provisioning for loan losses is trending downward and, at $2 million this quarter, was significantly down from the previous three quarters. Loan charge-offs at $3.433 million are consistent with comparative quarters and much less than the second quarter of 2009. Our core revenue stream, pre-tax, pre-provision, remains consistent. Mortgage revenues are up and insurance revenues, though down slightly, remain strong. Overhead expense, exclusive of credit-related expenses and regulatory assessments, is down."
Net Interest Income
Reported net interest income was down by 5.5% compared to the third quarter of 2008, with the net interest margin decreasing to 3.40% on a tax equivalent basis in the third quarter of 2009 as compared to 3.70% in the third quarter of 2008. The significant contributor to the decrease in net interest income year over year was the year-to-date continuing erosion in spreads in the low interest environment, although spreads and the margin did rebound somewhat in the quarter due mainly to increases in loan yields. The margin also continued to feel downward pressure from the increasing level of non-accrual loans. The net interest margin for the second quarter of 2009 was 3.16% as compared to 3.33% for the first quarter of 2009 and 3.60% for the fourth quarter of 2008. Loan yields decreased to 6.07% in the third quarter of 2009 from 6.53% in the third quarter of 2008. Loan yields, however, increased from the second quarter of 2009 to the third quarter as the company began to feel the effect of higher risk pricing in the portfolio. Average loans were $1.107 billion for the third quarter of 2009 as compared to $1.138 billion for the second quarter of 2009 and $1.204 billion during the third quarter of 2008. Loans decreased by $8.63 million in the third quarter of 2009 and fell by $41.5 million in the second quarter.
Deposit costs decreased in the third quarter of 2009 from the second quarter of 2009 and from the third quarter of 2008, in response to the overall fall in rates as the Fed cut rates in the fourth quarter of 2008, continuing its policy of loosening credit and as opportunities for re-pricing deposits were acted on. Deposit costs were 2.03% in the third quarter of 2009 as compared to 2.69% in the third quarter of 2008. Deposits grew by $47.269 million during the third quarter of 2009 and have grown $105.353 million since the third quarter of 2008. Management plans to continue to focus on core deposit growth for 2009 to encourage relationship-driven deposits as a stable source of low cost funding.
Loans as a percentage of assets were 65.56% at September 30, 2009 as compared to 73.49% at September 30, 2008 and 73.68% at December 31, 2008. Loans fell by 8.88% since the third quarter of 2008 while deposits grew by 8.42%.
"Loan volumes are down almost 9% year over year," said Mr. Potts, "but new loan production continues to keep overall balances from falling more rapidly. The recasting of the portfolio continues with the most favorable and dramatic reduction coming in Acquisition, Construction and Development, down $97 million or 34 % from a year ago. This high-risk category now represents 17% of our portfolio. Deposits are up about 8.5% year over year reflecting liquidity and resources to fund loan growth."
Non-interest Income
Non-interest income, excluding securities transactions and impairment of investments, for the second quarter of 2009 fell by 2.07% compared to the second quarter of 2008, with deposit-related income down 4.03%. Insurance agency commissions were down by 7.72%.
A major part of non-interest income is from deposit sources. Although down overall, deposit revenues continue to be supported by debit card fee income, flat versus the year-ago quarter, while overdraft fee income decreased by 9.70%.
Non-interest Expenses
Non-interest expenses were up by 6.89% in the third quarter of 2009 as compared to the third quarter of 2008 largely due to increases in Other Real Estate expenses and losses and increased FDIC assessments. Salaries and benefits were down 1.72% year over year.
Credit Quality
Annualized net loan charge-offs as a percent of average loans for the third quarter of 2009 were 1.24% as compared to .49% for the same period in 2008. Net charge-offs totaled $3.433 million for the quarter versus $1.473 million a year ago and $19.378 million in the second quarter of 2009. Non-accrual and 90-day past due loans as a percent of total loans were 6.82% at the end of the third quarter of 2009 as compared to 1.88% at the end of the 2008 quarter. The allowance for loan losses as a percentage of loans was 2.97% at September 30, 2009 as compared to 1.63% at September 30, 2008, reflecting increased provisioning. The allowance for loan losses increased to $32.695 million at the end of the third quarter of 2009 from $31.323 million at the end of the second quarter of 2009 due to net charge-off activity of $3.433 million offset by additional provisions of $4.805 million. The end of third quarter allowance for loan loss balance increased from $19.618 million at the end of the third quarter of 2008 due to increased quarterly provisions and extraordinary provisioning in recognition of worsening credit issues. The increased provision expense was a reaction to continued distress in real estate markets, and in construction and development loans in particular, as sales of existing inventory continued at a slow pace and real estate values fell. Mr. Potts commented, "Non-accruals are down, ninety days past due and still accruing are up and other real estate owned is up. Other real estate represents credit issues which are near final disposition. Sales of OREO were $7.4 million for the quarter, an all-time high, and should rise from this level before declining."
Further commenting, Mr. Potts said, "Asset quality remains the primary challenge facing the company. Our reappraisals are current. Our focus is on remediation, collection and disposition. Negative impact on capital during the quarter was minimal and the small drop in capital ratios was due more to deposit growth than the operating loss."
Balance Sheet
Total assets at September 30, 2009 were $1.676 billion as compared to $1.597 billion at the end of 2008 and $1.641 billion at September 30, 2008. Total loans were $1.099 billion compared to $1.177 billion at the end of 2008 and $1.206 billion at September 30, 2008. Deposits were $1.357 billion compared to $1.261 billion at the end of 2008 and $1.251 billion at September 30, 2008. Total capital was $133.750 million, or $ 11.57 in book value per common share at September 30, 2009.
Mr. Potts concluded, "As we look ahead, we believe the recession is coming to an end. The economy will be slower than we would like to see. The lagging clean up will extend to 2010. The worst should be over, however, the certainty of that is neither guaranteed nor clear. There are many positive and encouraging trends as well as serious and unresolved issues.
Preserving capital and adding to capital through earnings and other means are a part of our daily tactical and strategic thinking. We take heart at the recovery trends and focus on what must be done, all with a sense of urgency and thanksgiving. You are encouraged to take note of the various schedules accompanying this release which will shed light on the narrative."
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 2009 2008 2008 ---- ---- ---- Cash and due from banks 38,809 47,738 41,791 Interest bearing bank balances 57,934 6,556 10,721 Federal funds sold 50,000 9,350 31,000 Securities available for sale (cost of $296,828, $223,882 and $220,477) 303,305 227,145 219,953 Loans held for sale 6,726 7,698 5,466 Loans 1,099,108 1,176,595 1,206,213 Allowance for loan losses 32,695 24,918 19,618 ------ ------ ------ Net loans 1,066,413 1,151,677 1,186,595 Bank premises and equipment 43,574 44,642 44,739 Accrued interest receivable 8,280 9,832 10,099 Other real estate 28,114 11,061 7,191 Goodwill 16,772 32,572 32,572 Other intangible assets 5,546 7,127 7,248 Other assets 50,996 41,467 43,890 ------ ------ ------ Total assets 1,676,469 1,596,865 1,641,265 Non-interest bearing deposits 196,999 178,689 178,980 Interest bearing deposits 1,159,818 1,082,698 1,072,483 --------- --------- --------- Total deposits 1,356,817 1,261,387 1,251,463 Federal funds and repurchase agreements 12,164 9,728 11,938 Other borrowings 133,751 151,547 197,547 Junior subordinated debt 30,928 30,928 30,928 Accrued interest payable 2,973 3,537 3,577 Other liabilities 6,086 3,770 4,896 ----- ----- ----- Total liabilities 1,542,719 1,460,897 1,500,349 Preferred stock, 30,000 shares issued and outstanding 28,778 - - Common stock, 9,069,346, 9,063,346 and 9,061,846 shares issued & outstanding 45,347 45,317 45,309 Additional paid-in capital 31,922 30,447 30,421 Nonvested restricted stock awards 765 780 789 Retained earnings 25,242 60,133 65,700 Accumulated other comprehensive income 1,695 (727) (1,321) ----- ---- ------ Total First M&F Corp equity 133,749 135,950 140,898 Noncontrolling interests in subsidiaries 1 18 18 -- -- -- Total equity 133,750 135,968 140,916 ------- ------- ------- Total liabilities & equity 1,676,469 1,596,865 1,641,265 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 2009 2008 2009 2008 ---- ---- ---- ---- Interest and fees on loans 16,798 19,675 50,147 62,160 Interest on loans held for sale 76 46 192 241 Taxable investments 2,507 2,179 7,318 6,893 Tax exempt investments 519 554 1,617 1,607 Federal funds sold 22 10 61 144 Interest bearing bank balances 4 15 12 120 -- -- -- --- Total interest income 19,926 22,479 59,347 71,165 Interest on deposits 5,758 7,266 18,249 25,136 Interest on fed funds and repurchase agreements 26 98 83 259 Interest on other borrowings 1,345 1,596 4,120 5,035 Interest on subordinated debt 499 499 1,488 1,488 --- --- ----- ----- Total interest expense 7,628 9,459 23,940 31,918 ------ ------ ------ ------ Net interest income 12,298 13,020 35,407 39,247 Provision for possible loan losses 4,805 2,190 33,840 9,050 ----- ----- ------ ----- Net interest income (expense) after loan loss 7,493 10,830 1,567 30,197 Service charges on deposits 2,804 3,042 8,138 8,765 Mortgage banking income 468 389 1,428 1,014 Agency commission income 1,097 1,153 3,025 3,191 Fiduciary and brokerage income 120 117 372 453 Other income 688 833 2,552 2,871 Other-than-temporary impairment on securities, net of $994 and $1,212 charged to other comprehensive income (237) - (412) - Gains on AFS securities 441 (17) 442 5 --- --- --- -- Total noninterest income 5,381 5,517 15,545 16,299 Salaries and employee benefits 7,106 7,230 21,566 22,193 Net occupancy expense 1,134 1,084 3,308 3,115 Equipment expenses 706 882 2,195 2,671 Software and processing expenses 465 518 1,458 1,475 FDIC insurance assessments 750 107 2,565 250 Foreclosed property expenses 508 191 2,790 807 Goodwill impairment - - 15,800 - Intangible asset amortization and impairment 107 122 1,581 364 Other expenses 3,364 3,095 9,733 9,168 ----- ----- ----- ----- Total noninterest expense 14,140 13,229 60,996 40,043 ------ ----- ------- ----- Net income (loss) before taxes (1,266) 3,118 (43,884) 6,453 Income tax expense (benefit) (1,137) 902 (11,389) 1,555 ------ --- ------- ----- Net income (loss) (129) 2,216 (32,495) 4,898 Net income (loss) attributable to noncontrolling interests 7 6 (7) 15 -- -- -- -- Net income (loss) attributable to First M&F Corp (136) 2,210 (32,488) 4,883 ==== ===== ======= ===== Earnings Per Common Share Calculations: Net income (loss) attributable to First M&F Corp (136) 2,210 (32,488) 4,883 Dividends and accretion on preferred stock 435 - 1,028 - --- --- ----- --- Net income (loss) applicable to common stock (571) 2,210 (33,516) 4,883 Earnings (loss) attributable to participating securities (a) 9 27 (349) 61 -- -- ---- -- Net income (loss) allocated to common shareholders (580) 2,183 (33,167) 4,822 ==== ===== ======= ===== Weighted average shares (basic) 9,069,346 9,060,675 9,066,049 9,061,685 Weighted average shares (diluted) 9,069,346 9,060,860 9,066,049 9,062,835 Basic earnings (loss) per share (a) ($0.06) $0.24 ($3.66) $0.53 Diluted earnings (loss) per share ($0.06) $0.24 ($3.66) $0.53 ====== ===== ====== ===== First M&F Corporation Financial Highlights YTD Ended YTD Ended YTD Ended YTD Ended September 30 December 31 September 30 December 31 2009 2008 2008 2007 ---- ---- ---- ---- Performance Ratios: Return on assets (annualized) -2.66% 0.03% 0.40% 0.92% Return on equity (annualized) (b) -30.77% 0.37% 4.59% 10.78% Return on common equity (annualized) (b) -38.23% 0.37% 4.59% 10.78% Efficiency ratio 84.38% 72.77% 70.70% 67.07% Net interest margin (annualized, tax- equivalent) 3.30% 3.67% 3.70% 3.93% Net charge-offs to average loans (annualized) 3.08% 0.75% 0.41% 0.28% Nonaccrual loans to total loans 6.24% 1.74% 1.82% 0.53% 90 day accruing loans to total loans 0.57% 0.48% 0.05% 0.09% QTD Ended QTD Ended QTD Ended QTD Ended September 30 June 30 March 31 December 31 2009 2009 2009 2008 ---- ---- ---- ---- Per Common Share (diluted): Net income (loss) (0.06) (0.61) (2.99) (0.48) Cash dividends paid 0.01 0.01 0.13 0.13 Book value 11.57 11.46 12.14 15.00 Closing stock price 3.75 4.07 6.12 8.46 Loan Portfolio Composition: (in thousands) Commercial, financial and agricultural 124,836 135,325 132,812 127,704 Non-residential real estate 677,777 672,359 720,783 745,700 Residential real estate 197,760 205,068 204,003 209,696 Home equity loans 44,250 44,827 45,116 45,791 Consumer loans 44,318 40,728 37,451 37,908 Other loans 10,167 9,434 9,087 9,796 ------ ----- ----- ----- Total loans 1,099,108 1,107,741 1,149,252 1,176,595 Deposit Composition: (in thousands) Noninterest-bearing deposits 196,999 181,163 191,386 178,689 NOW deposits 294,303 286,265 283,521 217,334 MMDA deposits 155,858 163,112 179,313 182,364 Savings deposits 112,370 113,061 114,529 114,281 Certificates of deposit under $100,000 283,531 281,698 274,187 272,461 Certificates of deposit $100,000 and over 306,728 274,472 258,664 276,763 Brokered certificates of deposit under $100,000 7,028 9,776 11,560 19,495 ----- ----- ------ ------ Total deposits 1,356,817 1,309,547 1,313,160 1,261,387 Nonperforming Assets: (in thousands) Nonaccrual loans 69,019 74,420 52,084 20,564 Other real estate 28,114 22,575 10,907 11,061 Investment securities 610 1,047 - - --- ----- --- --- Total nonperforming assets 97,743 98,042 62,991 31,625 Accruing loans past due 90 days or more 6,351 5,608 1,409 5,686 Restructured loans (accruing) 3,664 3,664 3,664 3,664 Total nonaccrual loan to loans 6.24% 6.69% 4.51% 1.74% Total nonperforming credit assets to loans and ORE 8.57% 8.54% 5.40% 2.65% Total nonperforming assets to assets ratio 5.83% 6.03% 3.84% 1.98% Allowance For Loan Loss Activity: (in thousands) Beginning balance 31,323 41,506 24,918 19,618 Provision for loan loss 4,805 9,195 19,840 10,684 Charge-offs (3,597) (19,579) (3,508) (5,501) Recoveries 164 201 256 117 --- --- --- --- Ending balance 32,695 31,323 41,506 24,918 First M&F Corporation Financial Highlights QTD Ended QTD Ended QTD Ended QTD Ended September 30 June 30 March 31 December 31 2009 2009 2009 2008 ---- ---- ---- ---- Condensed Income Statements: (in thousands) Interest income 19,926 19,160 20,261 22,123 Interest expense 7,628 7,895 8,417 9,374 ----- ----- ----- ----- Net interest income 12,298 11,265 11,844 12,749 Provision for loan losses 4,805 9,195 19,840 10,684 Noninterest revenues 5,381 4,976 5,188 4,832 Noninterest expenses 14,140 15,815 31,041 14,241 ------ ------ ------ ------ Net income (loss) before taxes (1,266) (8,769) (33,849) (7,344) Income tax expense (benefit) (1,137) (3,660) (6,592) (2,990) Noncontrolling interest 7 2 (16) 3 - - --- - Net income (loss) (136) (5,111) (27,241) (4,357) Preferred dividends 435 439 154 - --- --- --- - Net income (loss) applicable to common stock (571) (5,550) (27,395) (4,357) Earnings (loss) attributable to participating securities (a) 9 (52) (306) (57) - --- ---- --- Net income (loss) allocated to common shareholders (580) (5,498) (27,089) (4,300) Tax-equivalent net interest income 12,670 11,654 12,216 13,131 Selected Average Balances: (in thousands) Assets 1,646,710 1,611,513 1,645,555 1,611,444 Loans held for investment 1,100,109 1,131,370 1,165,086 1,196,806 Earning assets 1,478,169 1,478,819 1,486,073 1,450,265 Deposits 1,315,758 1,303,615 1,304,905 1,254,382 Equity 135,365 138,120 150,128 141,330 Common equity 106,694 109,510 135,791 141,312 Selected Ratios: Return on average assets (annualized) -0.03% -1.27% -6.71% -1.08% Return on average equity (annualized) (b) -0.40% -14.84% -73.59% -12.27% Return on average common equity (annualized) (b) -2.13% -20.33% -81.82% -12.27% Average equity to average assets 8.22% 8.57% 9.12% 8.77% Tangible equity to tangible assets (c) 6.74% 6.88% 7.18% 6.18% Tangible common equity to tangible assets (c) 5.00% 5.09% 5.41% 6.18% Net interest margin (annualized, tax- equivalent) 3.40% 3.16% 3.33% 3.60% Efficiency ratio 78.34% 95.10% 80.41% 79.29% Net charge-offs to average loans (annualized) 1.24% 6.87% 1.13% 1.79% Nonaccrual loans to total loans 6.24% 6.69% 4.51% 1.74% 90 day accruing loans to total loans 0.57% 0.50% 0.12% 0.48% Price to book (x) 0.32 0.36 0.50 0.56 Price to earnings (x) N/A N/A N/A N/A First M&F Corporation Financial Highlights Historical Earnings Trends: (a) Earnings Earnings Applicable to Allocated to Common Common Earnings Stock Shareholders EPS (in thousands) (in thousands) (in thousands) (diluted) -------------- -------------- -------------- --------- 3Q 2009 (136) (571) (580) (0.06) 2Q 2009 (5,111) (5,550) (5,498) (0.61) 1Q 2009 (27,241) (27,395) (27,089) (2.99) 4Q 2008 (4,357) (4,357) (4,300) (0.48) 3Q 2008 2,210 2,210 2,183 0.24 2Q 2008 (466) (466) (458) (0.05) 1Q 2008 3,139 3,139 3,097 0.34 4Q 2007 3,561 3,561 3,517 0.38 3Q 2007 3,808 3,808 3,760 0.42 2Q 2007 3,535 3,535 3,492 0.38 1Q 2007 3,554 3,554 3,509 0.39 Revenue Statistics: Non-interest Non-interest Revenues Revenues to Revenues to Contribution Per FTE Ttl. Revenues Avg. Assets Margin (thousands) (percent) (percent) (percent) (d) ----------- --------- --------- ------------- 3Q 2009 34.4 29.81% 1.30% 60.64% 2Q 2009 31.2 29.92% 1.24% 56.11% 1Q 2009 32.3 29.81% 1.28% 58.85% 4Q 2008 32.8 26.90% 1.19% 62.36% 3Q 2008 34.4 29.16% 1.37% 61.78% 2Q 2008 33.4 28.13% 1.31% 61.00% 1Q 2008 33.7 29.03% 1.34% 59.68% 4Q 2007 34.3 27.31% 1.29% 61.21% 3Q 2007 35.0 27.83% 1.36% 62.58% 2Q 2007 33.4 26.23% 1.28% 61.04% 1Q 2007 33.7 29.96% 1.50% 61.88% Expense Statistics: Non-interest Expense to Efficiency Avg. Assets Ratio (percent) (percent) (e) --------- -------------- 3Q 2009 3.41% 78.34% 2Q 2009 3.94% 95.10% 1Q 2009 7.65% 80.41% 4Q 2008 3.52% 79.29% 3Q 2008 3.29% 69.93% 2Q 2008 3.34% 71.85% 1Q 2008 3.25% 70.33% 4Q 2007 3.19% 67.78% 3Q 2007 3.24% 66.08% 2Q 2007 3.26% 67.02% 1Q 2007 3.37% 67.41% First M&F Corporation Average Balance Sheets/Yields and Costs (tax-equivalent) (In thousands with yields and costs annualized) QTD September 2009 QTD September 2008 ------------------ ------------------ Average Average Balance Yield/Cost Balance Yield/Cost ------- ---------- ------- ---------- Interest bearing bank balances 14,850 0.11% 3,228 1.93% Federal funds sold 41,032 0.22% 2,400 1.61% Taxable investments (amortized cost) 260,003 3.82% 171,936 5.04% Tax-exempt investments (amortized cost) 54,940 5.97% 57,809 6.08% Loans held for sale 7,235 4.13% 4,986 3.68% Loans held for investment 1,100,109 6.08% 1,198,943 6.55% --------- ---- --------- ---- Total earning assets 1,478,169 5.45% 1,439,302 6.32% Non-earning assets 168,541 159,911 ------- ------- Total average assets 1,646,710 1,599,213 NOW 280,104 1.17% 215,559 1.55% MMDA 155,665 1.18% 178,733 2.11% Savings 112,684 1.41% 116,658 2.11% Certificates of Deposit 576,388 2.80% 565,156 3.42% Short-term borrowings 12,556 0.82% 17,269 2.25% Other borrowings 165,722 4.41% 180,793 4.61% ------- ---- ------- ---- Total interest bearing liabilities 1,303,119 2.32% 1,274,168 2.95% Non-interest bearing deposits 190,917 177,595 Non-interest bearing liabilities 17,309 7,117 Preferred equity 28,669 - Common equity 106,696 140,333 ------- ------- Total average liabilities and equity 1,646,710 1,599,213 ---- ---- Net interest spread 3.13% 3.37% Effect of non-interest bearing deposits 0.30% 0.36% Effect of leverage -0.03% -0.03% ----- ----- Net interest margin, tax-equivalent 3.40% 3.70% Less tax equivalent adjustment: Investments 0.08% 0.09% Loans 0.02% 0.01% ---- ---- Reported book net interest margin 3.30% 3.60% First M&F Corporation Average Balance Sheets/Yields and Costs (tax-equivalent) (In thousands with yields and costs annualized) YTD September 2009 YTD September 2008 ------------------ ------------------ Average Average Balance Yield/Cost Balance Yield/Cost ------- ---------- ------- ---------- Interest bearing bank balances 13,457 0.12% 6,238 2.58% Federal funds sold 36,589 0.23% 6,534 2.94% Taxable investments (amortized cost) 233,965 4.18% 181,080 5.08% Tax-exempt investments (amortized cost) 57,284 6.02% 55,450 6.17% Loans held for sale 7,746 3.31% 6,493 4.96% Loans held for investment 1,131,950 5.94% 1,201,912 6.92% --------- ---- --------- ---- Total earning assets 1,480,991 5.46% 1,457,707 6.62% Non-earning assets 153,606 167,441 ------- ------- Total average assets 1,634,597 1,625,148 NOW 274,984 1.32% 209,949 1.50% MMDA 166,746 1.41% 177,066 2.38% Savings 113,706 1.52% 115,123 2.39% Certificates of Deposit 567,377 2.94% 594,214 3.95% Short-term borrowings 10,587 1.05% 14,105 2.45% Other borrowings 166,264 4.51% 184,401 4.73% ------- ---- ------- ---- Total interest bearing liabilities 1,299,664 2.46% 1,294,858 3.29% Non-interest bearing deposits 185,319 179,622 Non-interest bearing liabilities 8,464 8,411 Preferred equity 23,919 - Common equity 117,231 142,257 ------- ------- Total average liabilities and equity 1,634,597 1,625,148 ---- ---- Net interest spread 3.00% 3.33% Effect of non-interest bearing deposits 0.31% 0.40% Effect of leverage -0.01% -0.03% ----- ----- Net interest margin, tax-equivalent 3.30% 3.70% Less tax equivalent adjustment: Investments 0.09% 0.09% Loans 0.01% 0.01% ---- ---- Reported book net interest margin 3.20% 3.60% First M&F Corporation Notes to Financial Schedules (a) Effective January 1, 2009 the Company adopted FSP EITF 03-6-1 which clarifies that unvested restricted stock awards that contain nonforfeitable rights to dividends are considered participating securities and therefore are included in the two-class method calculation of earnings per share. Under this method, all distributed and undistributed earnings are allocated to the Company's common shares and the Company's restricted stock grant shares based on their respective rights to receive dividends. Earnings per share have been revised to reflect the retrospective application of the FSP. (b) 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) (c) 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) (d) Contribution margin is calculated as: (Tax-equivalent net interest income plus noninterest revenues minus salaries and benefits) divided by (Tax-equivalent net interest income plus noninterest revenues) (e) Efficiency ratio is calculated as: (Noninterest expense) divided by (Tax-equivalent net interest income plus noninterest revenues)
First M&F Corp.
CONTACT: John G. Copeland, EVP & Chief Financial Officer,
+1-662-289-8594
